Implode-Explode Heavy Industries news feed

Congressman Introduces Bill That Would Indemnify His Former Foreclosure Mill

Mon, 25 Sep 2017 17:41:38 GMT

Congressman David Trott Introduces Bill That Would Indemnify His Former Firm from Liabilities Under The Dodd-Frank Act And The FDCPA

Kings Lake University Sells Man Fake Masters Degree For $8100

Mon, 25 Sep 2017 00:55:14 GMT

Kings Lake University seemed like a perfect fit for Erwin Sniedzins. It shared his paranoia of traditional universities Erwin Sniedzins found Kings Lake University on the internet. The school offered a master's degree requiring no exams or academic work. Sniedzins thought it was a school sharing his unconventional approach to education.

The Great Corporate Cash Shell Game

Sun, 24 Sep 2017 01:07:29 GMT

... the amount of bonds issued by these companies has surged, rising 66 percent from mid-2009 to $5.24 trillion of bonds outstanding as of the end of June, Federal Reserve data show. .. That isn't necessarily a recipe for default because a large chunk of this is an exercise in financial engineering aimed at avoiding onerous taxes [by keeping earned profits offshore]. But it has consequences. First, it limits the benefit to the economy if and when those tax policies are changed because much of the money has already been released through the bond market.
And second, to the extent that companies have cash, they're not using enough of it for exciting projects. There hasn't been a tremendous wave of innovation or salary increases. Instead, companies have repurchased billions of dollars of their own shares, which is great for the stock market but doesn't do a whole lot to bolster economic growth.''

Stocks Will Get Crushed By New Treasury Issuance; End of QE

Sat, 23 Sep 2017 15:54:14 GMT

``While Treasury supply will increase, the trend of demand for Treasuries has been going the other way... The Federal Reserve has given the market extraordinary support over the past eight years by financing most new Treasury supply. Even after it stopped outright Quantitative Easing in November of 2014, the Fed continued to buy $25--$45 billion per month in maturing Mortgage Backed Securities from the primary dealers. That cashed up the dealers and helped finance their purchases of new Treasuries... But now, the Fed intends to join the Treasury as a net seller of Treasuries (and MBS) as it starts to reduce its balance sheet this fall. Once the Fed stops buying that paper, the dealers will have a lot less cash and that means a lot more selling.''

Housing Affordability NEVER Worse...By a Long-Shot - M. Hanson

Sat, 23 Sep 2017 15:24:02 GMT

``But in '12, as trillions in unorthodox capital, credit & liquidity began to drive massive speculation (just like Bubble 1.0) income required to buy began to surge, with prices, shooting above median HH income (boxed in yellow). Meaningful sales growth with this affordability backdrop is impossible.''

"Puerto Rico Back in the 18th Century" - Kunstler

Sat, 23 Sep 2017 15:20:56 GMT

``Puerto Rico already faced a crisis pre-Hurricane Maria, with its dodgy electric grid and crumbling infrastructure: roads, bridges, water and sewage systems. Bankruptcy put it in a poor position to issue new bonds for public works which are generally paid for with public borrowing. Who, exactly, would buy the new bonds? I hear readers whispering, "the Federal Reserve." Which is a pretty good clue to understanding the circle-jerk that American finance has become.''

Uber only has itself to blame for London license loss

Sat, 23 Sep 2017 14:40:44 GMT

``How will we get home safety now, fretted others -- apparently untroubled by the fact that London's Met Police had informed the regulator Uber was failing to report sex attacks by drivers on its platform. TfL cited Uber's "approach to reporting serious criminal offenses" as a contributing factor to its decision to withdraw licensing. The deepest irony of all is that Uber can continue to operate in London while it appeals the regulator's decision. Which will, at very least, take months. It could take years.''

Why didn't Equifax protect your data? Because corporations have all the power

Fri, 22 Sep 2017 20:47:54 GMT

``Instead of capitalism based on democratic principles of trade, it's more of a feudal system: The land is owned by the banking class and anyone using it has to pay the owners. The "land," in this case, is the entire U.S. financial system of banking and credit, as banks and financial firms like Equifax have made themselves successful intermediaries in nearly all transactions, from simple salary payments (hello, direct deposit) to renting an apartment (try doing that without having a credit score on file.) While consumers remain accountable to financial firms -- that late rent payment is on your credit report -- financial firms are not at all accountable the other way around. They do business as they like, as Equifax shows. Because their more profitable customers are other financial firms, and those firms don't care if you have to spend an hour or two on the phone cleaning up Equifax's mess.''

Feierstein: Entire Global Economy Now a Ponzi; New Crisis On Horizon

Fri, 22 Sep 2017 17:36:54 GMT

Stock markets today are at all time highs, housing markets globally have been artificially reflated and companies who have not ever made a penny of profit are being floated for eye-watering sums.
When everybody is thinking the same thing, it is likely that no one is really thinking at all. Co-founder and presenter, Ross Ashcroft interviews investor, hedge fund manager and author of Planet Ponzi, Mitch Feierstein.
...
Feierstein cited the Resolution Trust debacle as an example of what should have happened. The Trust was declared insolvent as a consequence of the 1980s Savings and Loans Crisis and up to 300 bankers were jailed.

"This is what should have happened this time around, instead of taking hundreds of trillions of dollars taxpayer's money and placing the taxpayer at incredible peril and just added liquidity to the markets," he said. "Giving more money to an insolvent institution is not the solution. You cannot pay your way out of debt with borrowed money. It's not going to cure the underlying problem of insolvency."

This is why Feierstein refers to the entire global economy as a Ponzi scheme.
...
Feierstein predicts another financial crisis is on the horizon and says China is due for another significant credit event, but this time, companies should be allowed to go under.

"Capitalism without bankruptcy is like Catholicism without hell," he said. "What happens when you bail out the insolvency is you still have an insolvent bridge that has more debt." ''

Hack of SEC rattles investors, lawmakers (MAY HAVE ENABLED INSIDER TRADING)

Thu, 21 Sep 2017 22:01:33 GMT

Wall Street's top regulator came under fire on Thursday about its cyber security and disclosure practices after admitting hackers had breached its database of corporate announcements in 2016 and may have used it for insider trading.
The breach involved Securities and Exchange Commission's EDGAR filing system, which houses market-moving information with millions of filings ranging from quarterly earnings to statements on acquisitions.

The SEC said on Wednesday evening it discovered last month that cyber criminals may have used a hack detected in 2016 to make illicit trades.

No doubt such ill-gotten information was fed to some "flash boys" at some point...

China's Dangerous House Price Boom Is Spreading

Thu, 21 Sep 2017 17:17:20 GMT

In general, it's debt that's the warning sign. As developers and households become more leveraged, the risk is that a price downturn doesn't remain contained within the property market.
"The high leverage will amplify the damage to the economy if a property bust happens," said Bloomberg Intelligence economist Fielding Chen. "The shock wave will be passed onto the entire financial system, and losses will be greater," he said.

Once home prices tumble, about 40 percent of Chinese banks will be hit hard, according to a recent research note from Ping An Securities.

Federal Reserve Will Continue Cutting Economic Life Support

Thu, 21 Sep 2017 15:44:58 GMT

``Today, we find our economic fundamentals in complete disarray, but the overwhelming fantasy within stocks still remains. Why? Because yet again, for some reason, no one is ready to accept the reality that the Fed is pulling the plug on America's fiscal life support. Nary a handful of economists in the world think that the Fed will raise interest rates one more time this year if ever again, and the threat of a balance sheet reduction is the furthest thing from everyone's mind. Daytrading investors are utterly convinced they have the Fed by the short hairs. I say, the situation is actually in reverse.''

Unusually Large Loans Mask Decline In NYC Commercial Real Estate Lending

Wed, 20 Sep 2017 19:54:35 GMT

``Overall, commercial real estate origination in New York City was flat in Q2 year-over-year, at $24 billion, following a 12% dip from Q2 2015 to Q2 2016. Flat is better than down, so that sounds all right. But a closer examination shows that if the top five originations had totaled roughly the same in the second quarter of this year as in the parallel quarter the previous two years, lending would have declined year-over-year by about $2 billion.''

Fed to Shrink Assets Next Month, Boost Rates by Year-End

Wed, 20 Sep 2017 19:53:44 GMT

Federal Reserve officials set an October start for shrinking their $4.5 trillion stockpile of assets, moving to unwind a pillar of their crisis-era support for the economy. They continued to forecast one more interest-rate hike later this year, saying storm damage will have only a temporary impact on the economy.
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Minutes from the July meeting showed deepening worries about a prolonged period of low inflation. FOMC participants -- including Fed governors and regional bank presidents -- forecast that inflation will reach their 2 percent target in 2019, compared with an expectation of 2018 in June, based on median estimates. They have missed the target for most of the past five years.

Freelancer CEO destroys "delusional, stuffed, basket case, bubble, Third World economy like no other" (AU)

Wed, 20 Sep 2017 17:41:56 GMT

``Governments have achieved growth from a property bubble "like no other", says Mr Barrie. To paint this picture, he says there are [more] cranes in Sydney right now than in most American states combined -- and that being in postcodes with restricted lending.''

Fed's QT will push this market into 'brick wall': Boockvar

Wed, 20 Sep 2017 16:09:29 GMT

We're finally here. About nine years after quantitative easing (QE) began, quantitative tightening (QT) is about to start. On Wednesday, after the Federal Open Market Committee releases its statement, Janet Yellen will follow with a press conference that she will do her best to make as boring as possible... [but] I expect no different an outcome this time and I believe the market -- with the S&P at an all-time high - is headed for a brick wall the deeper QT gets.
...
After QE1 ended when we knew exactly the full size and expiration date (March 31st, 2010), the market topped out three weeks after and then fell 17 percent. After QE2 ended when we also knew the exact amount and deadline (June 30th, 2011), the market peaked one week later and then fell about 20 percent. Around the time QE3 ended with the lead up being a very methodical process of tapering, stocks had a hissy fit of about 10 percent only saved by James Bullard who hinted that maybe they won't end QE.

In the two months after the well telegraphed first rate hike in December 2015, stocks fell by 13 percent. The stock market of course therefore wasn't very good at discounting the end of major monetary stimulus actions even though they knew what was coming.

Donald Trump took bulk of $107 million for inauguration promised to charities ... and kept it

Tue, 19 Sep 2017 19:56:15 GMT

President Donald Trump's inaugural committee raised an unprecedented $107 million for a ceremony that officials promised would be "workmanlike," and the committee pledged to give leftover funds to charity.
...
The $107 million is a massive amount for even the most lavish inauguration. It's almost twice what Barack Obama took in for a celebration that was much more widely attended and which included many more events... Somehow, Trump supposedly blew through $25 million for [an] abbreviated event that seemed more suitable for a county fair. In a small county. It's an amount that seems amazing even to the people on Trump's own campaign committee. "I couldn't tell you how we possibly could have spent $25 million on a concert," said Kerrigan.
... [After that questionable expense of $25 million,] it's been eight months. How much has been given out? None. None at all.

This is large-scale scammery, even for Trump. The funny thing is, we were initially resistant to the claims of Trump's detractors early on that he just wanted to use the presidency to line his pockets... overtly. But that seems to be panning out to a greater degree than we ever imagined... and it has been going on since the campaign (e.g., jacking up the rent on his own campaign for Trump Tower by 2-3x), to say nothing of the presidency.

'No evidence QE works' as balance sheet unwind starts

Tue, 19 Sep 2017 17:35:29 GMT

There's little question that the program, known as quantitative easing or "money printing," boosted the stock market. The three iterations of QE between November 2008 and October 2014 each saw big boosts to the market, with a cumulative S&P 500 gain from beginning to end, including the various down periods between each leg, of about 140 percent.
The economic impacts, though, are less clear.

For most of the period, GDP struggled to gain more than 2 percent. Wealth disparity grew, income gains were hard to come by and the Fed continually came up short on its inflation goal.
...
In fact, one of the Fed's own economists recently penned a report indicating that QE has come up short of its goals.

"Evaluating the effects of monetary policy is difficult, even in the case of conventional interest rate policy," St. Louis Fed economist Stephen D. Williamson wrote. "With respect to QE, there are good reasons to be skeptical that it works as advertised, and some economists have made a good case that QE is actually detrimental."

Toys R Us -- crushed by debt -- files for bankruptcy

Tue, 19 Sep 2017 17:33:25 GMT

Toys R Us been spiraling toward bankruptcy for years as it failed to keep up with competitors. Analysts cited many reasons for the company's demise: Lousy in-store customer service, a second-rate website and prices that are often higher than at many of its big-box competitors. Add to that piles of mounting debt -- much of it dating to a 2005 leveraged buyout -- and it was clear, many said, that the 60-year-old brand was in trouble.
"When you're cursed with all this debt, there's no way you can compete anymore," said Howard Davidowitz, a retail consultant who worked with Toys R Us in the 1980s and 1990s. "Now they're running up and down the halls trying to pick up the pieces, but there's no way around it: This is a very bad situation, and it will weaken the company forever."
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The Wayne, N.J.-based company was for decades the country's preeminent toy retailer, with a towering flagship in New York's Times Square and a ubiquitous icon, Geoffrey the Giraffe. In 2009, it purchased competitor FAO Schwarz but eventually closed its New York store on Fifth Avenue, citing high costs.

Bitcoin roars back from Chinese-regulation spurred swoon

Tue, 19 Sep 2017 14:17:32 GMT

Prices are rebounding because traders in China are likely to switch to alternative exchanges or seek loopholes in the regulation, said Peter Van Valkenburgh, director of research at Coin Center, a Washington-based nonprofit research firm focusing on cryptocurrencies.
"The efficacy of any bitcoin ban is pretty dubious," said Van Valkenburgh.''
...
While the tighter regulation makes access to cryptocurrency more difficult, investors can trade the digital assets over-the-counter or go to exchanges based in other jurisdictions.

Instead of WeChat, cryptocurrency aficionados are already migrating to encrypted messaging service Telegram.