Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60115 Thu, 30 Jun 2016 14:46:04 GMT Was Brexit fear a giant hoax or is this the calm before the next storm? - AEP http://implode-explode.com/viewnews/2016-06-30_WasBrexitfearagianthoaxoristhisthecalmbeforethenextstormAEP.html iehi-feed-60114 Thu, 30 Jun 2016 13:58:24 GMT Fed Stress Tests Clear 31 of 33 Big U.S. Banks to Boost Returns to Investors; Deutsche, Santander Flunk http://implode-explode.com/viewnews/2016-06-30_FedStressTestsClear31of33BigUSBankstoBoostReturnstoInvestorsDeut.html Big U.S. banks won permission from regulators Wednesday to boost dividends and buybacks, offering investors some welcome news after the sector got hammered when the U.K. voted last week to exit the European Union.

All but two of 33 institutions passed the final round of the Federal Reserve's annual "stress tests," conducted to gauge how such firms would fare in a new financial crisis. (See this interactive graphic on how each bank fared.)

Big firms such as Bank of America Corp. and Citigroup Inc., which struggled on the tests in recent years, passed this time. Morgan Stanley also passed but received a bit of a rebuke. The Fed said it found "weaknesses" in internal risk- management processes and required the bank to submit a revised capital plan by the end of the year, though it will still be able to return capital in the meantime.

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The U.S. banking units of two foreign firms, Deutsche Bank AG and Banco Santander SA, were flunked, due to Fed concerns about their ability to measure risks. It was the second year in a row the German bank failed and the third consecutive failure for the Spanish firm.

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For Deutsche Bank and Santander, the Fed's rejection of those firms' capital plans is a public embarrassment, but the practical impact is more limited. The rejection effectively locks up some U.S. profits, which can't be sent home to the parent firms at a higher rate until they pass the tests, but the firms don't have publicly announced plans to return capital home that would be affected by that restriction, a Fed official said.

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M&T Bank Corp. gained the Fed's approval, but the Buffalo, N.Y., firm passed only after scaling back its proposal to distribute funds to shareholders, to ensure its capital buffers stayed above the minimums required by the Fed.

It was the only bank to take the "mulligan" allowing banks to adjust their payout plans. Had the bank not done so, it would have failed the test by falling below two of the four required capital ratios in a hypothetical recession, the Fed said.

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iehi-feed-60113 Thu, 30 Jun 2016 13:39:58 GMT Former London mayor Boris Johnson says he will not run for British prime minister http://implode-explode.com/viewnews/2016-06-30_FormerLondonmayorBorisJohnsonsayshewillnotrunforBritishprimemini.html The question of who will lead Britain into its future outside the European Union -- a muddled mess for nearly a week -- was further scrambled Thursday, with the camp that had favored an exit splintering into warring tribes and forcing former London mayor Boris Johnson to drop from the contest to become prime minister.

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Michael Gove, the bookish justice secretary who was regarded as the intellectual architect of the "leave" campaign, shocked the country's political establishment Thursday by announcing that he, too, would enter the fray.

This would validate the "conspiracy" theory that Boris was being set up... so looks like he reacted by simply getting out of the firing line...

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iehi-feed-60112 Thu, 30 Jun 2016 13:29:38 GMT When Central Planning Fails http://implode-explode.com/viewnews/2016-06-30_WhenCentralPlanningFails.html iehi-feed-60111 Thu, 30 Jun 2016 13:27:09 GMT Italy 'Should Return National Currency' to Revive Its Economy - 5 Star Movement http://implode-explode.com/viewnews/2016-06-30_ItalyShouldReturnNationalCurrencytoReviveItsEconomy5StarMovement.html iehi-feed-60110 Thu, 30 Jun 2016 01:49:20 GMT Civil Uprising Escalates As 8th EU Nation Threatens Referendum http://implode-explode.com/viewnews/2016-06-29_CivilUprisingEscalatesAs8thEUNationThreatensReferendum.html iehi-feed-60109 Thu, 30 Jun 2016 01:48:00 GMT The Italian Job http://implode-explode.com/viewnews/2016-06-29_TheItalianJob.html iehi-feed-60108 Thu, 30 Jun 2016 01:44:32 GMT Biggest Diamond in More Than Century Fails to Sell in London http://implode-explode.com/viewnews/2016-06-29_BiggestDiamondinMoreThanCenturyFailstoSellinLondon.html The 1,109-carat diamond that's called Lesedi la Rona, or "our light" in the Tswana language spoken in Botswana, was expected to sell for about $86 million, based on a diamond sale in May. That would have made it the most expensive rough gem on record. Instead, the highest bid of $61 million didn't clear the so-called "reserve price" at a Sotheby's auction on Wednesday night, leaving it unsold.

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The Lesedi la Rona, just smaller than a tennis ball, is second in size only to the Cullinan, a 3,106-carat gem found near Pretoria in South Africa in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain.

The world's biggest and rarest diamonds had proven more resilient than smaller rough stones -- what mined gems are called before they're cut and polished. Prices for rough diamonds slumped 18 percent last year, the most since the financial crisis in 2008, amid lower demand and an industrywide credit crunch.

The diamond auction took place during a week of contemporary art sales in the U.K. On Tuesday, Sotheby's sold 52.2 million pounds ($70 million) of art as Asian and U.S. collectors went shopping, taking advantage of the drop in sterling after Britain voted to exit the European Union.

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iehi-feed-60107 Wed, 29 Jun 2016 18:31:42 GMT Turkish Stream project; Russia-Turkey tourism to resume after Erdogan apology http://implode-explode.com/viewnews/2016-06-29_TurkishStreamprojectRussiaTurkeytourismtoresumeafterErdoganapolo.html Russian-Turkish tourism spigot is about to be turned back on, as well...]]> iehi-feed-60106 Wed, 29 Jun 2016 15:18:10 GMT Against the Populist Tide, Draghi Wants More Central Bank Coordination http://implode-explode.com/viewnews/2016-06-29_AgainstthePopulistTideDraghiWantsMoreCentralBankCoordination.html Mario Draghi has just pushed the boundaries of central banking further into the realm of globalization, at a time when globalization is on the run.

Following the work of Reserve Bank of India Raghuram Rajan and others, the European Central Bank president on Tuesday became the most senior global central banker so far to call for more explicit policy cooperation between jurisdictions. Draghi's aim is to mitigate the damaging cross-border side-effects brought on by the combination of monetary activism and tighter global financial links.

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"What he's getting at is simply the idea that we don't have a great understanding of all the financial linkages and capital flows," Sharif said. "That certainly does call for better understanding among central banks, not necessarily coordinated policies."

Technocrats, including those at the the Bank for International Settlements in Basel, go further, saying that new global rules are the best way to create more financial stability for all concerned.

But if central bankers seek to increase coordination, either on interest-rate policies or financial rules, the groundswell of nationalism and populism sweeping developed economies risks making their job next to impossible. While monetary policy is increasingly global, most politics remains local.

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iehi-feed-60105 Wed, 29 Jun 2016 15:16:36 GMT Britain wins Brexit breathing space at gloomy EU summit http://implode-explode.com/viewnews/2016-06-29_BritainwinsBrexitbreathingspaceatgloomyEUsummit.html EU leaders gave Britain breathing space Tuesday by accepting it needed time to absorb a shock Brexit vote before triggering a divorce but insisted the crunch move could not wait months.

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After hours of talks in Brussels, EU President Donald Tusk said that he understood that time was needed "for the dust to settle" in Britain before the next steps can be taken.

But reflecting wider concerns of a domino effect of other states wanting to leave, European Commission president Jean-Claude Juncker said Britain did not have "months to meditate".

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iehi-feed-60104 Wed, 29 Jun 2016 01:21:58 GMT A Brexit conspiracy theory nails the no-win situation Boris Johnson now finds himself in http://implode-explode.com/viewnews/2016-06-28_ABrexitconspiracytheorynailsthenowinsituationBorisJohnsonnowfind.html If [Boris Johnson] runs for leadership of the party, and then fails to follow through on triggering Article 50, then he is finished. If he does not run and effectively abandons the field, then he is finished. If he runs, wins and pulls the UK out of the EU, then it will all be over -- Scotland will break away, there will be upheaval in Ireland, a recession ... broken trade agreements. Then he is also finished. Boris Johnson knows all of this. When he acts like the dumb blond it is just that: an act.

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When Boris Johnson said there was no need to trigger Article 50 straight away, what he really meant to say was "never". When Michael Gove went on and on about "informal negotiations" ... why? why not the formal ones straight away? ... he also meant not triggering the formal departure. They both know what a formal demarche would mean: an irreversible step that neither of them is prepared to take.''

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iehi-feed-60103 Wed, 29 Jun 2016 01:04:22 GMT Hospital stays top $1,200 out-of-pocket even with insurance, U-M study finds http://implode-explode.com/viewnews/2016-06-28_Hospitalstaystop1200outofpocketevenwithinsuranceUMstudyfinds.html Even if you have what you might think of as good health insurance, your next hospital stay could cost more than $1,200 out of your pocket, University of Michigan researchers say.

That amount has gone up sharply in recent years, rising more than 37 percent just for straightforward hospital stays for common conditions. The statistics come from the first published analysis of actual out-of-pocket spending by people with private health insurance, most of it provided by employers. The study appears in JAMA Internal Medicine.

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The biggest change in out-of-pocket spending came from two types of insurance plan charges. Deductibles - the amount patients pay for their care before their insurance kicks in - increased 86 percent. Coinsurance - a percentage of hospital costs insurance plans often expect patients to pay - rose 33 percent.

"These results open up the 'black box' of health care and show all the costs of hospitalization that are billed to people with private insurance. For many, these may appear to be 'hidden costs' that they didn't realize they would owe," said first author Emily Adrion, a research fellow with the U-M Center for Healthcare Outcomes and Policy. "It shows that even people with the most comprehensive insurance are paying thousands of dollars, at a time when they need hospital care and may not have time to shop around."

Adrion and colleagues, including senior author Dr. Brahmajee Nallamothu, say that growth in out-of-pocket costs was 6.5 percent a year, compared to 5.1 percent growth in health insurance premiums and 2.9 percent growth in overall health care spending.

Isn't it just fantastic that we engaged in a comprehensive "reform" of health care in the US just a few years ago, without there ever having been a study on out-of-pocket costs (and their likely trajectory)?

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iehi-feed-60102 Tue, 28 Jun 2016 23:40:40 GMT Satyajit Das: What If Anything Does Brexit Really Signify? http://implode-explode.com/viewnews/2016-06-28_SatyajitDasWhatIfAnythingDoesBrexitReallySignify.html The decision by Boris Johnson, an Etonian like David Cameron and of similar background and leanings, to back the Leave vote showed ruthless calculation and accurate political sensitivities. His position reflected his aspirations for leadership not solidarity with the Leave voters or fundamental policy shifts. In an editorial after the vote, Mr. Johnson seized with post Brexit Bre-gret or Bre-morse suggested that wholesale changes in the relationship between the UK and the EU were now unnecessary.

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In essence, for those who believe they are born to rule, Brexit signals the need to limit democracy to ensure that important decisions are left to self-certified experts. European Parliament President Martin Schultz was refreshingly clear: "It is not the EU philosophy that the crowd can decide its fate".

History may well record that little changed as a result of Brexit after the long tortured process of negotiation of the terms of withdrawal and arrangements regarding trade and other matters with the EU. Those in charge and their attendant retinues continued, as British blogger John Ward wrote in 2015, to ignore the individual, State sovereignty, debt mountains, currency realities, poverty, its responsibilities and every legal and constitutional restraint on their power.

If the deep seated economic and social divisions within Britain or other societies cannot be dealt with peacefully and through existing processes, the risk is that it will unleash the furies of nationalism and isolationism in unknown ways and with unpredictable results.

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iehi-feed-60101 Tue, 28 Jun 2016 23:31:57 GMT When Markets Sour, Stuff Suddenly Oozes from the Woodwork ("The bezzle shrinks": LendingClub, Theranos, Breitling Energy) http://implode-explode.com/viewnews/2016-06-28_WhenMarketsSourStuffSuddenlyOozesfromtheWoodworkThebezzleshrinks.html iehi-feed-60100 Tue, 28 Jun 2016 14:53:48 GMT Italy eyes €40bn bank rescue as first Brexit domino falls http://implode-explode.com/viewnews/2016-06-28_Italyeyes40bnbankrescueasfirstBrexitdominofalls.html Italy is preparing a €40bn rescue of its financial system as bank shares collapse on the Milan bourse and the powerful after-shocks of Brexit shake European markets. An Italian government task force is watching events hour by hour, pledging all steps necessary to ensure the stability of the banks. "Italy will do everything necessary to reassure people," said premier Matteo Renzi. "This is the moment of truth we have all been waiting for a long time. We just didn't know it would be Brexit that set the elephant loose," said a top Italian banker.

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Italy's banks are the Achilles Heel of the eurozone financial system. Non-performing loans have ratcheted up to 18pc of total balance sheets as a result the country's slide into depression after the Lehman crisis.

The new bail-in reform this year has brought matters to a head, catching EU authorities off guard. It was intended to protect taxpayers by ensuring that creditors suffer major losses first if a bank gets into trouble, but was badly designed and has led to a flight from bank shares. The Bank of Italy has called for a complete overhaul of the bail-in rules.

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Italy is now paralyzed under the existing eurozone structure. Analysts say it desperately needs a US-style bank rescue along the lines of the ‘TARP' in 2008, which used federal funds to mop up bad assets and stabilize the banks. This is forbidden by the eurozone.

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Hedge fund veteran George Soros warned that Italy faces the risk of a "full-blown banking crisis" that could bring the rebel Five Star Movement to power as early as next year. The banking squeeze has become politically explosive in Italy after thousands of small depositors were wiped out at four regional banks late last year...

Mr Renzi may be forced to take matters into his own hands and enact a unilateral sovereign rescue of the Italian banking system in defiance of the EU, unless he wins concessions soon from Brussels. Those who know him say he will not go down in flames for the sake of European ideological purity.

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iehi-feed-60099 Tue, 28 Jun 2016 14:46:23 GMT Jim Rogers on Brexit: 'Worse than any bear market you've seen in your lifetime' http://implode-explode.com/viewnews/2016-06-28_JimRogersonBrexitWorsethananybearmarketyouveseeninyourlifetime.html Brexit's win will also embolden other countries to leave the EU and separatist movements to break up a few states, Rogers predicted. That could make the world to look significantly different in just a half a decade.

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"The EU as we know it will not exist," he said. "The euro as we know it will not exist. Some people leave, others may join -- unlikely, but they could join. There are a lot of angry people all over the world. Look at what's happening in America." In the UK, he added, "People are making unbelievably incompetent statements but they're very happy to be getting out [of the EU]. They're so angry."

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iehi-feed-60098 Tue, 28 Jun 2016 14:43:10 GMT U.S. Home Prices Continued Strong Growth in April, Case-Shiller Says http://implode-explode.com/viewnews/2016-06-28_USHomePricesContinuedStrongGrowthinAprilCaseShillerSays.html iehi-feed-60097 Tue, 28 Jun 2016 14:41:34 GMT Rent Freeze Approved For Second Consecutive Year In Historic Vote (NYC) http://implode-explode.com/viewnews/2016-06-28_RentFreezeApprovedForSecondConsecutiveYearInHistoricVoteNYC.html iehi-feed-60096 Tue, 28 Jun 2016 14:36:37 GMT Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard http://implode-explode.com/viewnews/2016-06-28_GreenspanWarnsACrisisIsImminentUrgesAReturnToTheGoldStandard.html