Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65598 Tue, 08 Jun 2021 17:05:33 GMT Foreclosure Warning! Lenders To Resume Foreclosures On July 1st http://implode-explode.com/viewnews/2021-06-08_ForeclosureWarningLendersToResumeForeclosuresOnJuly1st.html iehi-feed-65594 Mon, 26 Apr 2021 13:45:42 GMT Stow Your Outrage About a Capital Gains Tax Hike http://implode-explode.com/viewnews/2021-04-26_StowYourOutrageAboutaCapitalGainsTaxHike.html ... there have been three recent, real-world opportunities to observe the impact of a capital gains tax hike -- in 1987, 1988 and 2013. In each case, equities (with the exception of momentum stocks) stumbled before the hikes were enacted but outperformed afterward.

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the fruits of the market's boom have been narrowly enjoyed. The wealthiest 1% of Americans reported about 75% of all long-term capital gains in 2019, according to the Tax Policy Center, with the wealthiest 0.1% -- the cohort with annual incomes above $3.8 million -- hauling in more than half of all capital gains.

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iehi-feed-65593 Thu, 22 Apr 2021 22:34:14 GMT Biden prepares to announce string of tax rises for richest Americans http://implode-explode.com/viewnews/2021-04-22_BidenpreparestoannouncestringoftaxrisesforrichestAmericans.html The tax increases would [end the preferential treatment of capital gains income for those making over $1 million per year, and] reverse some of the tax cuts passed in 2017 by former president Donald Trump and are expected to track Biden's campaign proposals, which targeted individuals earning more than $400,000 per year.

Among them are an increase in the top income tax rate from 37 per cent to 39.6 per cent and the application of ordinary income tax rates to capital gains and dividend payments for Americans earning more than $1m a year.

Coupled with a surtax on investment income for the wealthy introduced at the time of Barack Obama's health reform, this would bring the total capital gains tax rate for the richest Americans to 43.4 per cent.

The rates proposed by Biden would hit private equity and hedge fund managers by effectively eliminating the preferential tax treatment of their profits -- or "carried interest". At the moment, carried interest is taxed at the lower capital gains rate rather than ordinary income, but Biden would equalise their tax treatment. 

The president has also been considering taxing unrealised capital gains passed on to heirs at death, and increasing payroll taxes on the wealthiest Americans.

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As he pushes ahead with the new tax-and-spend proposal for childcare and education, Biden is struggling to gain momentum on Capitol Hill for his infrastructure plan.

Senate Republicans proposed their own $568bn plan on Thursday -- far below the levels of spending sought by the White House. The Republican offer is heavily weighted towards traditional infrastructure projects, with $299bn devoted to roads and bridges, $65bn to broadband, $61bn to public transit systems and $44bn to airports.

By contrast, the White House plan seeks broader investments in research and development, manufacturing subsidies and retooling buildings, while devoting much more federal funding towards tackling climate change -- a priority for many Democrats.

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iehi-feed-65592 Mon, 19 Apr 2021 00:53:50 GMT Homeless encampment outside of the Fed forces Powell to reckon with uneven recovery http://implode-explode.com/viewnews/2021-04-18_HomelessencampmentoutsideoftheFedforcesPowelltoreckonwithunevenr.html The Fed has several tools to protect the economy, and Powell deployed them with full force last year. But that kind of intervention aids some parts of the economy more than others.

Slashing interest rates and backstopping corporate debt, for example, helped direct money into the financial system. Some of the biggest beneficiaries were wealthier Americans who hold investments. As a stark sign of how the rich got richer in the past 12 months, the number of billionaires on Forbes's 35th-annual ranking grew by nearly a third, swelling by 660.

Claudia Sahm, a former Fed economist and now a senior fellow at the Jain Family Institute, said the inequality stems from the limitations of the Fed's monetary policy tool kit. Low interest rates or asset purchases influence the macroeconomy as a whole. In the Fed's efforts to quicken the recovery, Sahm said that "some of the problems they're trying to solve, they make a little bit worse."

"It's not intentional," she added. "They don't like [Tesla's] Elon [Musk] more than the worker at Walmart. But the reality is that their tools make him better off more quickly than the worker."

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The Fed uses a wide dashboard of metrics to monitor the labor market. And recently, pressure has grown to drill down beyond the aggregate unemployment rate, which was 6 percent in March. Economists note that the overall figure doesn't account for major disparities in the jobless rate between White, Black, Hispanic and Asian workers.

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iehi-feed-65590 Tue, 06 Apr 2021 04:24:03 GMT How Index Funds May Hurt the Economy http://implode-explode.com/viewnews/2021-04-06_HowIndexFundsMayHurttheEconomy.html Although many financial institutions offer index funds to their clients, the Big Three control 80 or 90 percent of the market. The Harvard Law professor John Coates has argued that in the near future, just 12 management professionals--meaning a dozen people, not a dozen management committees or firms, mind you--will likely have "practical power over the majority of U.S. public companies

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The market clout of the indexers raises other questions too. The actual owners of the stocks--not the index-fund managers but the people putting money into index funds--have little say over the companies they own. Vanguard, Fidelity, and State Street, not Mom and Dad, vote in shareholder elections. As John Coates, the Harvard professor, notes: "For the most valuable public company in the world, three individuals can in principle swing the vote of 17 percent of its shares. Generally, a significant fraction of shareholders do not vote, even if in contested battles. As a result, the 17 percent actually represents more like 25 percent or more of the likely votes in contested votes. That share of the vote will generally be pivotal." In fact, the Big Three cast roughly 25 percent of the votes in S&P 500 companies.

Another worry is that these firms are too passive rather than too powerful. They are committed to being as lean and hands-off as possible, in order to reduce their fees. They do not tend to get involved in shareholder actions or small-bore corporate management, perhaps in part because any one company doing well against its peers is not of interest to the indexers, who want more assets under management and higher corporate profits.

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The effect on the real economy might look a lot like that of rising corporate concentration. And the two phenomena might be catalyzing one another, as index investing increases the number of mergers and makes them more lucrative.

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Just last month, Senator Elizabeth Warren grilled Treasury Secretary Janet Yellen on whether BlackRock, with its $9 trillion in assets under management, is too big to fail. The Federal Trade Commission is contemplating whether the big index-fund families pose antitrust concerns. Government watchdogs have raised alarm bells about the revolving door, as the Biden administration continues to draw officials from the Big Three. In an interview with The Wall Street Journal, the chief executive officer of State Street said he thought it was "almost inevitable, when you see this kind of concentration, that it probably will make sense to do something about it."

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iehi-feed-65587 Mon, 29 Mar 2021 22:45:47 GMT Remote Work Is Here to Stay. Manhattan May Never Be the Same. http://implode-explode.com/viewnews/2021-03-29_RemoteWorkIsHeretoStayManhattanMayNeverBetheSame.html ``"Going back to the office with 100 percent of the people 100 percent of the time, I think there is zero chance of that," Daniel Pinto, JPMorgan's co-president and chief operating officer, said in an interview in February on CNBC. "As for everyone working from home all the time, there is also zero chance of that.''

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The loss of workers has caused the market value of commercial properties that include office buildings to plunge nearly 16 percent during the pandemic, triggering a sharp decline in tax revenue that pays for essential city services, from schools to sanitation.

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New York is set to receive significant federal assistance from the $1.9 trillion federal stimulus package: $5.95 billion in direct aid and another $4 billion for schools, a City Hall spokeswoman said. While that addresses immediate needs, the city still faces an estimated $5 billion budget deficit next year and similar deficits in the following years, and a changing work culture could hobble New York's recovery.

The amount of office space in Manhattan on the market has risen in recent months to 101 million square feet, roughly 37 percent higher than a year ago and more than all the combined downtown office space in Los Angeles, Atlanta and Dallas. "This trend has shown little signs of slowing down," said Victor Rodriguez, director of analytics at CoStar, a real estate company.

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Only 15 percent of workers have returned to offices in New York City and the surrounding suburbs, up slightly from 10 percent last summer, according to Kastle Systems, a security company that analyzes employee access-card swipes in more than 2,500 office buildings nationwide. Only San Francisco has a lower rate.

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At least one industry, however, is charging in the opposite direction. Led by some of the world's largest companies, the technology sector has expanded its footprint in New York during the pandemic. Facebook has added 1 million square feet of Manhattan office space, and Apple added two floors in a Midtown Manhattan building.

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iehi-feed-65586 Sat, 27 Mar 2021 16:01:51 GMT Select Portfolio Servicing Is Busted Jerking Around People Of Color, Again! http://implode-explode.com/viewnews/2021-03-27_SelectPortfolioServicingIsBustedJerkingAroundPeopleOfColorAgain.html iehi-feed-65584 Wed, 24 Mar 2021 13:24:40 GMT United Wholesale Mortgage Declares War On Rocket Mortgage http://implode-explode.com/viewnews/2021-03-24_UnitedWholesaleMortgageDeclaresWarOnRocketMortgage.html iehi-feed-65583 Mon, 22 Mar 2021 14:56:15 GMT Federal Rent Relief Programs Being Rejected By Landlords http://implode-explode.com/viewnews/2021-03-22_FederalRentReliefProgramsBeingRejectedByLandlords.html iehi-feed-65580 Mon, 15 Mar 2021 14:38:24 GMT The Biden American Rescue Plan: What It Means For Housing http://implode-explode.com/viewnews/2021-03-15_TheBidenAmericanRescuePlanWhatItMeansForHousing.html iehi-feed-65578 Fri, 05 Mar 2021 19:52:28 GMT NYC's Financial District faces office glut as tenant exits loom http://implode-explode.com/viewnews/2021-03-05_NYCsFinancialDistrictfacesofficeglutastenantexitsloom.html New York's Financial District is suffering as a glut of office space builds with the pandemic keeping workers home. JPMorgan Chase & Co. is the latest high-profile tenant to look for an exit from the neighborhood, a historic part of lower Manhattan that is home to the New York Stock Exchange and Federal Reserve.

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"The sublet spaces currently on offer at deeply discounted rates is a veritable flood of biblical proportions, with more likely to come online soon," said Ruth Colp-Haber, chief executive officer of brokerage Wharton Property Advisors.

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"What's happening in this market and in other downturns in the real estate market is flight to quality," Engelhardt said. "Tenants in this market, especially post-pandemic, are looking for healthier, newer, inspired spaces to encourage their staff to return to the office."

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iehi-feed-65577 Thu, 04 Mar 2021 20:16:19 GMT SPAC Froth Turns on Itself With Stocks Plunging 20% in Two Weeks - Bloomberg http://implode-explode.com/viewnews/2021-03-04_SPACFrothTurnsonItselfWithStocksPlunging20inTwoWeeksBloomberg.html It may turn out that five new special

purpose acquisition companies per day was too many. SPAC mania is showing signs of hitting a stock-market saturation point, with an index tracking blank-check flyers suddenly down about 20% from its peak. The craze is being clipped as quickly as it whipped up, with sentiment souring on growth stocks amid a runup in interest rates and rotation into beaten-down names. Before the selloff, SPACs had almost doubled since October.

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The IPOX SPAC Index, which tracks the performance of a broad group of special purpose acquisition companies, has fallen toward a bear market, down about 20% since a mid-February peak. It's on track for its second-worst week ever relative to the S&P 500. Meanwhile, the Defiance Next Gen SPAC Derived ETF (ticker SPAK), is also down about 20% from its February top, with the fund on pace for its worst week of outflows on record. While it isn't crazy that SPACs became popular given their structure and relatively loose listing requirements, according to Marketfield Asset Management's Michael Shaoul and Timothy Brackett, any frenzy of this magnitude tends to result in "a long and expensive period of regret."

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iehi-feed-65575 Tue, 02 Mar 2021 18:27:23 GMT CBRE bets $200m on flexible offices post-COVID with 35% stake in Industrious http://implode-explode.com/viewnews/2021-03-02_CBREbets200monflexibleofficespostCOVIDwith35stakeinIndustrious.html CBRE has acquired a 35% stake in US flexible workspace provider Industrious in a move to significantly expand its presence in the rapidly growing industry.

As part of the deal, the global advisory firm paid about $200m in cash and agreed to merge its flexible space brand Hana into Industrious, which has more than 100 locations in 50 US cities.

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The deal stemmed from CBRE's belief in the rise of agile workspace products, particularly in the wake of the Covid-19 pandemic. It cited a survey it carried out showing that 86% of CBRE's occupier clients plan to incorporate flexible office space into their real estate strategies. About 82% said they will favour buildings that offer a flex-office component.

Sulentic said: "Our investment in Industrious is consistent with our view that flexible office space is playing an increasingly central role in companies' occupancy strategies and aligns us with an exceptional operator and an outstanding leadership team that is executing a great strategy.

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iehi-feed-65574 Sun, 28 Feb 2021 21:29:28 GMT The number of public listings by zero-revenue companies valued above $1 billion currently exceeds the dot-com era | Markets Insider http://implode-explode.com/viewnews/2021-02-28_Thenumberofpubliclistingsbyzerorevenuecompaniesvaluedabove1billi.html SPACs have become so popular even celebrities are getting involved. Both A-Rod and Colin Kapernick have taken part in SPACs in 2021, and the list of celebs entering the market continues to grow.

All this growth has some investment firms concerned. Data from the firm Accelerate shows SPACs are trading at a significant premium to their net asset value.

The firm said in a February 24 report that "SPAC NAV premiums remain disconcerting" and noted SPAC NAV premiums reached 26.9% in February before dropping to 20.9% after the SPAC market went through a correction.

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iehi-feed-65568 Thu, 11 Feb 2021 15:33:00 GMT The Gamers' Uprising Against Wall Street Has Deep Populist Roots http://implode-explode.com/viewnews/2021-02-11_TheGamersUprisingAgainstWallStreetHasDeepPopulistRoots.html iehi-feed-65567 Tue, 09 Feb 2021 16:33:51 GMT Is this the end of WeWork? http://implode-explode.com/viewnews/2021-02-09_IsthistheendofWeWork.html ... because the exponential growth was built on WeWork signing long, expensive leases on space it rents out in a multitude of short-term deals, the company has exposed itself to a near-ruinous level of risk. As a broadly positive report from market intelligence firm CBInsights noted in January 2019: "WeWork's big selling point of office space flexibility is also one of the greatest threats to the long-term stability of its business. Members can pick up and leave if they want to, leaving WeWork on the hook."

That risk has become existential after a year in which a large proportion of the company's members have picked up and left: figures provided by WeWork show that its total membership fell by 11 per cent in the third quarter of 2020 alone.

That was made possible by another flaw in WeWork's strategy: its over-reliance on the freelancers and startups whose year-long contracts can be broken after six months rather than larger corporates -- otherwise known as enterprise clients -- who had to keep paying for unused office space right through the pandemic. (WeWork says it was "able to offer concessions to the overwhelming majority of member businesses that have requested one".) During the pandemic, the company has been accused of "profound hypocrisy" over its appointment of debt collectors to pursue customers at the same time as the shared offices provider is negotiating with its own landlords over its liabilities.

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Papadakos believes that close to 100 per cent of clients with a handful of desks have now gone, taking with them a large chunk of WeWork's income for the year. The average renter had six months left when the UK entered its first lockdown, he says. "As that came to an end they didn't renew. Income will be down by about a third." WeWork company did not provide projections of its financial performance for the full year, but said that global income for the third quarter of 2020 was down by 13 per cent, from $934m to $811m.

That was before countries around the world started locking down all over again. In its 2019 accounts, WeWork made a point of saying that Covid-19 was likely to have a negative impact on its 2020 results. "WeWork Inc as a whole, including its operations in the United Kingdom, is facing a period of uncertainty and expects there will be a material impact on the global demand for our space-as-a-service offering in the short-term, which may adversely affect the 2020 results for the company," it wrote.

Papadakos begs to differ. "It's not Covid that's the problem, but the expansion itself," he says. "[WeWork] was losing money before because they were trying to think like a tech firm in a real estate business." In other words, WeWork was posing as a high-growth company in order to attract investment and making bullish statements about strategy, when in fact it was operating in a low-growth sector.

Paradoxically, the risks it took with strategy could mean it doesn't survive to see the wave of the growth its segment of the real estate sector is expected to see in the wake of the pandemic.

Ben Munn, global flexible space lead at commercial real estate firm JLL, says the shared-office sector will boom as corporates reassess their property needs after more than a year of having employees based almost entirely at home. "Undoubtedly the last year has demonstrated that companies don't need an office for all the work they need to do," he says. "When demand comes back it will be for great space on flexible terms and with a level of choice for employees that has not necessarily been there before. The flexible world is really well positioned to provide that."

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iehi-feed-65564 Thu, 04 Feb 2021 16:14:37 GMT The Downside to Life in a Supertall Tower: Leaks, Creaks, Breaks http://implode-explode.com/viewnews/2021-02-04_TheDownsidetoLifeinaSupertallTowerLeaksCreaksBreaks.html After the first incident, water seeped into Ms. Abramovich's apartment several floors below the leak, causing an estimated $500,000 in damage, she said.

Others have made similar claims. The anonymous buyer of unit 84B cited a "catastrophic water flood" that caused major damage to the 83rd to 86th floors in 2016 as grounds to back out of the deal. The would-be buyer, who was in contract for a $46.25 million apartment, was a member of the Beckmann family, the owners of the Jose Cuervo tequila brand, according to sources familiar with the suit. The case was settled quietly the next year.

Many of the mechanical issues cited at 432 Park are occurring at other supertall residential towers, according to several engineers who have worked on the buildings.

All buildings sway in the wind, but at exceptional heights, those forces are stronger. A management email explained that "a high-wind condition" stopped an elevator and caused a resident to be "entrapped" on the evening of Oct. 31, 2019 for 1 hour and 25 minutes. Wind sway can cause the cables in the elevator shaft to slap around and lead to slowdowns or shutdowns, according to an engineer who asked not to be named, because he has worked on other towers in New York with similar issues.

One of the most common complaints in supertall buildings is noise, said Luke Leung, a director at the architectural firm Skidmore, Owings and Merrill. He has heard metal partitions between walls groan as buildings sway, and the ghostly whistle of rushing air in doorways and elevator shafts.

Residents at 432 Park complained of creaking, banging and clicking noises in their apartments, and a trash chute "that sounds like a bomb" when garbage is tossed, according to notes from a 2019 owners' meeting.

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iehi-feed-65563 Wed, 03 Feb 2021 17:55:55 GMT Knotel Files for Bankruptcy as Pandemic Strains Office Rentals http://implode-explode.com/viewnews/2021-02-03_KnotelFilesforBankruptcyasPandemicStrainsOfficeRentals.html Knotel Inc. filed for bankruptcy in Delaware after the WeWork rival succumbed to work-from-home pressures driven by the coronavirus pandemic.

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Knotel, which manages and rents short-term office space, saw customers cancel contracts, skip payments and ask for reduced rents after stay at home orders began last year, causing its revenue to plunge, Jureller said. Knotel listed both liabilities and assets of $1 billion to $10 billion, according to the petition.

Founded in 2015, Knotel had more than 4 million square feet (1.22 million square meters) of leased workspace under management in early 2020 and more than 300 customers across the U.S., Europe, Asia and South America, according to the Jureller declaration. Covid-19 has cast doubt on the business model of Knotel and other flexible office space and co-working companies that rely on people working near each other.

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iehi-feed-65561 Tue, 02 Feb 2021 16:54:32 GMT Superstar Cities Are in Trouble - The Atlantic http://implode-explode.com/viewnews/2021-02-02_SuperstarCitiesAreinTroubleTheAtlantic.html Thanks to zoning and land-use restrictions, the American dream has fractured: The rich cities with the greatest upward mobility are the least affordable, while the most affordable places to live have a poor record of mobility. As a result, America has grown more divided in the past few decades, not only by politics and by class, but also by geography.

"Remote work is the first change in a while that can help lean against this trend," Adam Ozimek, the chief economist at Upwork, told me. White-collar workers moving away from NIMBY areas could help solve this problem in two important ways: by reducing housing prices in superstar cities, and sprinkling high-income workers throughout the country.

Coastal cities' depopulation will not be a perfect substitute for more housing construction in those cities, but it might be better than the before world. Remote work is not a perfect substitute for higher welfare spending, either, but thousands of high-income workers moving to lower-income metros in the Midwest and the South could stimulate local job creation and raise local incomes. And remote work is not a perfect solution to regional inequality, but it will almost certainly expand the roster of hyperproductive cities in ways that could help wages grow nationwide, according to Moretti's analysis.

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iehi-feed-65559 Fri, 29 Jan 2021 01:23:59 GMT Sam Thielman: Redditors took on hedge funds over GameStop and AMC Theatres stock and won. So what now? http://implode-explode.com/viewnews/2021-01-28_SamThielmanRedditorstookonhedgefundsoverGameStopandAMCTheatresst.html