Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64401 Sat, 17 Nov 2018 17:18:13 GMT After the Retail Apocalypse, Prepare for the Property Tax Meltdown http://implode-explode.com/viewnews/2018-11-17_AftertheRetailApocalypsePrepareforthePropertyTaxMeltdown.html iehi-feed-64400 Fri, 16 Nov 2018 14:59:54 GMT Mass Wells Fargo Firings Begin In Time For The Holidays http://implode-explode.com/viewnews/2018-11-16_MassWellsFargoFiringsBeginInTimeForTheHolidays.html iehi-feed-64399 Thu, 15 Nov 2018 21:00:15 GMT "Too Big to Fail" author says WeWork may now be "too big to fail" http://implode-explode.com/viewnews/2018-11-15_TooBigtoFailauthorsaysWeWorkmaynowbetoobigtofail.html Andrew Ross Sorkin -- author of "Too Big to Fail" -- argues in his latest DealBook column for the New York Times that WeWork now has so much space in so many cities, its landlords can't afford to let it go under.

The co-working giant now controls 15.5 million square feet across 335 locations in 24 countries and says it is the largest tenant in Manhattan, Washington D.C. and London. So, when the next economic downturn arrives, WeWork's landlords might not be able to evict it even if it can't pay its rent... a more likely outcome would be for landlords to "swallow hard and renegotiate the lease agreements on more favorable terms to keep WeWork from creating a full-on panic." They could also have the company start acting as a property manager in the vein of Marriott, which manages rather than owns or leases hotels.

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iehi-feed-64398 Thu, 15 Nov 2018 14:43:17 GMT Sore Loser Dan Gilbert And His Lawyers Go Full Blown Joan Crawford http://implode-explode.com/viewnews/2018-11-15_SoreLoserDanGilbertAndHisLawyersGoFullBlownJoanCrawford.html iehi-feed-64397 Thu, 15 Nov 2018 02:37:37 GMT Why Amazon Chose New York and Northern Virginia for New Headquarters http://implode-explode.com/viewnews/2018-11-14_WhyAmazonChoseNewYorkandNorthernVirginiaforNewHeadquarters.html To recap: a company whose profits soared 27 percent to $3.03 billion last year just received an additional $2 billion or more in tax breaks, and may also be in line for $10 billion more in tax money through the JEDI deal.

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No population genuinely worried about abuses of power would even countenance placing a single private company in control of securing the data of both the intelligence community and the armed services. Add putting a major media organ or two under the same umbrella and you're beginning to enter oligarchy territory.

Moving Amazon closer to America's political and financial capitals isn't just about creating a few jobs. It's also a symbolic move that speaks to the unsettling co-mingling of state and corporate power. We might wake up soon and wish we hadn't put so many eggs in one basket.

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iehi-feed-64396 Thu, 15 Nov 2018 02:35:59 GMT So Goes Apple, So Goes The U.S. Market http://implode-explode.com/viewnews/2018-11-14_SoGoesAppleSoGoesTheUSMarket.html There are those who are focused so intently on the recent strength of the domestic economy that they are unable to see the forest for the trees. For example, oil prices do not lose 25% in value in a matter of weeks when global demand is strong. Not ever. Nor is this merely a case of excess supply.

In truth, the world's economy has been slowing to a crawl. The German economy contracted in the third quarter. Meanwhile, China is dealing with a massive debt bubble and a trade war. (Note: China is the world's largest importer of oil.)

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A diversified investor with a helping of large-cap stocks, small-cap stocks, foreign stocks, commodities, bonds, preferreds and/or other income producers had been relying on the influence of mega-caps like Facebook, Amazon and Apple. Bearish price depreciation in one or two of them might have been tolerable. Not all three.

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iehi-feed-64395 Wed, 14 Nov 2018 16:10:58 GMT Seminole Hard Rock Casino Robber Faces Life In Prison Thanks To Family  http://implode-explode.com/viewnews/2018-11-14_SeminoleHardRockCasinoRobberFacesLifeInPrisonThanksToFamily.html iehi-feed-64394 Wed, 14 Nov 2018 14:56:07 GMT WeWork raises $3bn from SoftBank as losses balloon http://implode-explode.com/viewnews/2018-11-14_WeWorkraises3bnfromSoftBankaslossesballoon.html WeWork has secured an additional $3bn of funding from SoftBank at a $42bn valuation even as the flexible office provider's losses ballooned to $2bn on an annual basis.*SoftBank will inject the funding next year in exchange for a warrant enabling it to buy new WeWork shares by the end of September 2019, at a price that will lift the group's valuation from the $20bn figure reached in its last equity funding round.The fresh multibillion dollar commitment from SoftBank increases WeWork's cash pile and cash commitments to a total of $6.4bn, according to an investor presentation seen by the Financial Times on Tuesday.Artie Minson, chief financial officer, said the funding was "opportunistic". "The way we work with SoftBank emphasises speed and getting it done quickly . . . that speaks to the overall momentum in the business," he said.The fresh funding came as privately owned WeWork said its losses in the nine months to September had nearly quadrupled from a year earlier to $1.2bn.

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"Our view is that there is tremendous wind at our back -- we are the only serious global player out there," he said."Our growth is actually accelerating as our product offering continues to go deeper and reach not just small-sized companies but Fortune 500 companies and everything in between.

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iehi-feed-64393 Wed, 14 Nov 2018 02:30:31 GMT The chances of seeing Donald Trump's tax returns just went WAY up http://implode-explode.com/viewnews/2018-11-13_ThechancesofseeingDonaldTrumpstaxreturnsjustwentWAYup.html The real issue here is a 1924 provision in the Internal Revenue Service tax code that allows the chair of the House Ways and Means Committee and the chair of the Senate Finance Committee can ask for anyone's tax returns -- including the president's! -- from the Internal Revenue Service -- as long as they can demonstrate that the returns are necessary for an ongoing investigation.

That clause, according to this great piece by CNN's Jeanne Sahadi, could well lead to the eventual public disclosure of Trump's returns:

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What seems certain now: House Democrats will make a move to see Trump's taxes. Trump, who, I believe, thinks the release of the returns could do him real political harm, will fight like hell to keep them from doing so.

Who wins? No clue. But there's no question that we are closer to seeing Trump's tax returns today than we have been at any point since he began to run for president in 2015.

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iehi-feed-64392 Wed, 14 Nov 2018 01:39:11 GMT Britain and E.U. Agree on a draft Plan for Brexit http://implode-explode.com/viewnews/2018-11-13_BritainandEUAgreeonadraftPlanforBrexit.html Britain is scheduled to quit the European Union on March 29. The draft agreement, if approved, would at least avert the prospect of a disorderly and chaotic departure without any deal -- something that could clog ports and lead to shortages of food and some medicines.

If Mrs. May's cabinet signs off on the draft agreement, the next step is for European Union leaders to give it their blessing at a meeting at the end of the month.

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iehi-feed-64391 Wed, 14 Nov 2018 01:37:42 GMT Sears Didn't 'Die.' Vulture Capitalists Killed It. http://implode-explode.com/viewnews/2018-11-13_SearsDidntDieVultureCapitalistsKilledIt.html ... most of the coverage has failed to stress the deeper story. Namely, Sears is a prime example of how hedge funds and private equity companies take over retailers, encumber them with debt in order to pay themselves massive windfall profits, and then leave the retailer without adequate operating capital to compete.

Part of the strategy is to sell off valuable real estate, the better to enrich the hedge fund, and stick the retail company with costly rental payments to occupy the space that it once owned.

In the case of Sears, the culprit is a hedge-fund operator named Edward Lampert, once a senior merger guy at Goldman Sachs. In 2005, Lampert merged Sears with Kmart, loaded both up with debt, and used some of the debt on stock buybacks to pump up the share price and enrich shareholders, notably himself and his hedge fund.

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iehi-feed-64390 Tue, 13 Nov 2018 17:49:39 GMT Ganja REIT Outperforming Other Real Estate Investment Trusts http://implode-explode.com/viewnews/2018-11-13_GanjaREITOutperformingOtherRealEstateInvestmentTrusts.html iehi-feed-64389 Tue, 13 Nov 2018 17:39:29 GMT Borrowers Flee Empty Malls, and Bond Investors Brace for Fallout http://implode-explode.com/viewnews/2018-11-13_BorrowersFleeEmptyMallsandBondInvestorsBraceforFallout.html Things are getting worse for malls across America. So much worse that their owners are walking away early from struggling properties, a trend that has mortgage bond investors bracing for losses.

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"Experienced borrowers will act in their economic interest and will turn in the keys to malls that don't merit further investment. They don't want to service the loan anymore," Edward Reardon, head of CMBS research at Deutsche Bank, said in a phone interview. "We think the number of malls that don't merit investment will expand."

This is happening because malls are losing anchor stores and as a result would have to significantly cut rents for existing occupants, Reardon said, noting that mall owners fleeing their properties early is a "relatively new phenomenon."

That may mean trouble ahead for investors. While the delinquency rate in the CMBS market is now at post-crisis lows, the mall-related pain may not show up for a couple years, according to analysts. That's because the securities with the highest exposure have loans that won't mature until 2021 or later.

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iehi-feed-64387 Mon, 12 Nov 2018 18:26:46 GMT Manhattan Rabbi Sued For $21 Million For Turning Temple Into Disco http://implode-explode.com/viewnews/2018-11-12_ManhattanRabbiSuedFor21MillionForTurningTempleIntoDisco.html iehi-feed-64385 Sun, 11 Nov 2018 21:08:50 GMT Doug Noland: Back to Fundamentals http://implode-explode.com/viewnews/2018-11-11_DougNolandBacktoFundamentals.html For me, Back to Fundamentals means a return of "Periphery to Core Crisis Dynamics" - rising yields, widening Credit spreads, de-risking/deleveraging, faltering global liquidity and, to be sure, China... Odds are mounting that de-risking/deleveraging dynamics attain destabilizing momentum. Many hedge funds now have losses for the year, which forces managers to take down both risk and leverage in anticipation of year-end outflows. I believe deleveraging is having a growing impact on marketplace liquidity around the world - and across asset classes. Yields are rising and spreads are widening throughout global fixed-income. Unstable equities markets around the globe are indicating a fragile liquidity backdrop. And this week's $2.68 (4.3%) drop in WTI has all the appearances of a major leveraged speculating community panic liquidation (portending challenges for the - to this point - resilient junk bond market).

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At this point, I seriously doubt the Fed has a solid grasp of the (direct and indirect) sources of the Trillions of global liquidity that have flooded into U.S. securities and asset markets over the past decade. I take them at their word that they don't discern the degree of leverage that would typically indicate a Bubble. Yet this has been the most atypical of global Bubbles. I am not convinced the Fed knows where to look for the leverage most germane to today's global Bubble. And, I'm compelled to add, the whole world seems oblivious. Speculative deleveraging is not on the Fed's radar, and this is a problem for the markets.

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iehi-feed-64384 Sun, 11 Nov 2018 20:53:07 GMT Dark Money: Illuminated http://implode-explode.com/viewnews/2018-11-11_DarkMoneyIlluminated.html Since dark money changed politics as we know it in the post-Citizens United era, the top 15 dark money groups have spent more than $600 million in secret money in our elections.

These groups accounted for more than 75 percent of the $800-plus million spent by all dark money organizations between January 2010 and December 2016. They spent the majority of this money on negative attack ads, criticizing candidates from the shadows while purposefully hiding their donors and masquerading as trade associations or "social welfare" nonprofits.

"Dark Money Illuminated" profiles the top 15 dark money groups and shines light on approximately 400 donors and donor organizations who have funded these groups, including companies, trade associations and labor unions. Issue One created a searchable, first-of-its-kind database containing nearly 1,200 transactions linked to these donors, each supported by primary source documents.''

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iehi-feed-64382 Sun, 11 Nov 2018 20:02:41 GMT Ocwen Stock Plummets Faster Than Contestants On A Japanese Game Show. http://implode-explode.com/viewnews/2018-11-11_OcwenStockPlummetsFasterThanContestantsOnAJapaneseGameShow.html iehi-feed-64381 Sat, 10 Nov 2018 18:33:11 GMT Manafort's Former Son-In-Law Busted Again In RE Scam http://implode-explode.com/viewnews/2018-11-10_ManafortsFormerSonInLawBustedAgainInREScam.html iehi-feed-64380 Sat, 10 Nov 2018 14:22:55 GMT Federal Trade Commission Busts $100M Real Estate Scam In Belize http://implode-explode.com/viewnews/2018-11-10_FederalTradeCommissionBusts100MRealEstateScamInBelize.html iehi-feed-64379 Fri, 09 Nov 2018 22:57:32 GMT Father of Z-Score Sees Bigger Bankruptcies in Next Downturn http://implode-explode.com/viewnews/2018-11-09_FatherofZScoreSeesBiggerBankruptciesinNextDownturn.html Edward Altman, who developed the Z-score method for predicting bankruptcies 50 years ago, says the next recession will be characterized by many more bankruptcies and defaults than in previous downturns, and the corporate failures will be larger than ever before.

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More firms that look like they are going bankrupt don't. Over the last 50 years, it's clear that the average company in the world is more leveraged using more debt than ever before. There was no leveraged-loan or junk-bond markets 50 years ago. Now, these are big dynamic markets available to many firms. They take advantage of it. Interest rates in the last ten year have been low and firms have been overjoyed to leverage their balance sheet to try to earn returns greater than the cost of capital. And the cost of capital, with the lower costs of interest rates, has come down.

... There is a dramatic increase in leveraged loans, in covenant-lite issuance. The defaults will not take place as quickly as they normally would because there are no easy triggers from these covenants. But when they do take place, the ultimate recovery when the firm emerges from Chapter 11 will be lower because the covenant-lite debt kicked the can down the road.

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