Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62489 Wed, 28 Jun 2017 15:57:57 GMT Yellen: Banks 'very much stronger'; another financial crisis not likely 'in our lifetime' (NOW WE CAN BREATHE FREE!) http://implode-explode.com/viewnews/2017-06-28_YellenBanksverymuchstrongeranotherfinancialcrisisnotlikelyinourl.html [Yellen] also made a bold prediction: that another financial crisis the likes of the one that exploded in 2008 was not likely "in our lifetime." The crisis, which erupted in September 2008 with the implosion of Lehman Brothers but had been stewing for years, would have been "worse than the Great Depression" without the Fed's intervention, Yellen said.

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Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the central bank chief said the Fed has learned lessons from the financial crisis and has brought stability to the banking system.

This is utterly insane. Where to even begin? That Yellen thinks what commenced in 2007 was not at least as bad as the Great Depression speaks volumes about how cloistered the Fed and mainstream economists are.

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iehi-feed-62488 Tue, 27 Jun 2017 23:41:25 GMT China Suffers "Delusion" like 1980s Japan, Faces Long Stagnation: Expert http://implode-explode.com/viewnews/2017-06-27_ChinaSuffersDelusionlike1980sJapanFacesLongStagnationExpert.html ... dodging painful reform and papering over problems with more debt will likely result in a long-term economic stagnation, as it did in Japan...

China's current delusion resembles what he saw in Tokyo in the late 1980s when the nation was going through an economic bubble, which eventually burst in the 1990s. Most of Japan's growing credits were held domestically, just like today's credits in China, he said, and this is another reason why he believed that what awaits China is most likely long-lasting economic stagnation.

Economic reform will likely remain a focus of the Chinese government, but there are so many conflicting interests in the economy that Jerram sees the government's willingness to tackle real reform as low. "I don't know if it's really possible," he said. Even if President Xi Jinping were given another 15 years, "I still don't know if you can fix it."''

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This theory -- a long hard stagnation as a result of the debt boom rather than a sudden debt meltdown -- is not universally shared. For example, the New York Fed was somewhat less sanguine about the chances of China being able to avoid a "Financial Crisis," though it also thought that the government had some capacity "to absorb potential losses from a financial disruption."

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iehi-feed-62486 Tue, 27 Jun 2017 23:13:25 GMT Draghi CARES About Europe's Inequality -- But Don't Touch Monetary Policy To Fix it! http://implode-explode.com/viewnews/2017-06-27_DraghiCARESAboutEuropesInequalityButDontTouchMonetaryPolicyToFix.html Income inequality has grown among euro zone countries since the global financial crisis and some measures also show divergence between the bloc's richer and poorer members, a source of tension for the 19-member currency bloc.

"Is this a seriously destabilizing factor that we should cope with?" Draghi said in a rare town-hall style meeting with university students in Lisbon. "Yes it is."

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Defending the ECB's ultra easy monetary policy, Draghi said that super low rates create jobs, foster growth and benefit borrowers, ultimately easing inequality.

He also rejected calls to exit super easy monetary policy quickly, arguing that premature tightening would lead to a fresh recession and more inequality.

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iehi-feed-62485 Tue, 27 Jun 2017 21:19:39 GMT Subway Derailment in Manhattan Injures Dozens (MORE CRUMBLING TRANSIT) http://implode-explode.com/viewnews/2017-06-27_SubwayDerailmentinManhattanInjuresDozensMORECRUMBLINGTRANSIT.html iehi-feed-62483 Tue, 27 Jun 2017 20:29:05 GMT Italy's Latest Bank Bailout Has Created A Two-Speed Eurozone http://implode-explode.com/viewnews/2017-06-27_ItalysLatestBankBailoutHasCreatedATwoSpeedEurozone.html The Italian government decided that although these banks might not be systemically important to the EU, they most certainly are to Italy. Claiming that allowing them to fail would cause disruption to the local economy in Venice, it bailed them out.

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Remarkable. Winding up two banks in the Venetian area would cause massive economic disruption. So the solution is to create an effective banking monopoly in that area. And this doesn't distort competition, apparently. I detect a distinct odor of Eurofudge.

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Portugal is no doubt furious, since not long ago it imposed a highly contentious haircut on senior creditors to recapitalize the BES 'good bank' Novo Banco. But I doubt if it would have gotten away with state recapitalization. It just isn't big or important enough.

We now have a two-speed Eurozone, made up of big countries that can do what they like, and small ones that must obey the rules set by the big ones.

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iehi-feed-62482 Tue, 27 Jun 2017 20:21:35 GMT Europe's Gradualist Fallacy by Yanis Varoufakis http://implode-explode.com/viewnews/2017-06-27_EuropesGradualistFallacybyYanisVaroufakis.html iehi-feed-62481 Tue, 27 Jun 2017 15:54:52 GMT The Technicolor Swan - Kunstler http://implode-explode.com/viewnews/2017-06-27_TheTechnicolorSwanKunstler.html iehi-feed-62478 Tue, 27 Jun 2017 15:36:22 GMT Seattle's Painful Lesson on the Road to a $15 Minimum Wage http://implode-explode.com/viewnews/2017-06-27_SeattlesPainfulLessonontheRoadtoa15MinimumWage.html iehi-feed-62476 Tue, 27 Jun 2017 01:37:52 GMT Senate Health Bill Tottering as C.B.O. Weighs In: 22 Million More Expected Uninsured http://implode-explode.com/viewnews/2017-06-26_SenateHealthBillTotteringasCBOWeighsIn22MillionMoreExpectedUnins.html The Senate bill to repeal the Affordable Care Act was edging toward collapse on Monday after the nonpartisan Congressional Budget Office said it would increase the number of people without health insurance by 22 million by 2026.

Two Republicans, Senators Susan Collins of Maine and Rand Paul of Kentucky, said Monday that they would vote against even debating the health care bill, joining Senator Dean Heller of Nevada, who made the same pledge on Friday. Senator Ron Johnson of Wisconsin hinted he, too, would probably oppose taking up the bill on an expected procedural vote as early as Tuesday, meaning a collapse could be imminent.

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Mr. McConnell, who is the chief author of the bill, wanted the Senate to approve it before a planned recess for the Fourth of July, but that looks increasingly doubtful. Misgivings in the Republican conference extend beyond just a few of the most moderate and conservative members, and Mr. McConnell can lose only two Republicans.

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iehi-feed-62473 Sun, 25 Jun 2017 20:45:11 GMT Contagion from the 2 Friday-Night Bank Collapses in Italy? http://implode-explode.com/viewnews/2017-06-25_Contagionfromthe2FridayNightBankCollapsesinItaly.html ... two of the private investors -- hedge funds Fortress and Elliott -- walked away from the negotiating table [for the bailout of Monte Paschi] in "a dispute over the sales terms," which likely means that even an 80% mark down on MPS' non-performing loans may not be enough to attract private investors. If they don't come back, Monte dei Paschi will have only one willing investor to turn to: Atlante. In other words, back to square one.

The hedge funds' withdrawal prompted fears that it could jeopardize not only the government's efforts to save Monte dei Paschi but also Banca Popolare di Vicenza and Veneto Banca. That has now happened. Contagion at work. And the risk of contagion is still huge.

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iehi-feed-62472 Sun, 25 Jun 2017 19:30:04 GMT How Greece Became A Guinea Pig For A Cashless And Controlled Society http://implode-explode.com/viewnews/2017-06-25_HowGreeceBecameAGuineaPigForACashlessAndControlledSociety.html The International Monetary Fund (IMF), which day after day is busy "saving" economically suffering countries such as Greece, also happens to agree with this brave new worldview. In a working paper titled "The Macroeconomics of De-Cashing," which the IMF claims does not necessarily represent its official views, the fund nevertheless provides a blueprint with which governments around the world could begin to phase out cash...

Beginning July 27, dozens of categories of businesses in Greece will be required to install aptly-acronymized "POS" (point-of-sale) card readers and to accept payments by card. Businesses are also required to post a notice, typically by the entrance or point of sale, stating whether card payments are accepted or not. Another new piece of legislation, in effect as of June 1, requires salaries to be paid via direct electronic transfers to bank accounts. Furthermore, cash transactions of over 500 euros have been outlawed.

In Greece, where in the eyes of the state citizens are guilty even if proven innocent, capital controls have been implemented preventing ATM cash withdrawals of over 840 euros every two weeks. These capital controls, in varying forms, have been in place for two years with no end in sight, choking small businesses that are already suffering.

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The irony that [Greek pensioners, abiding by the new rules] were paying by card to avoid taxation themselves was lost on them--as is the fact that the otherwise fiscally responsible Germany, whose government never misses an opportunity to lecture the "spendthrift" and "irresponsible" Greeks, has the largest black market in Europe (exceeding 100 billion euros annually), ranks first in Europe in financial fraud, is the eighth-largest tax haven worldwide, and one of the top tax-evading countries in Europe.

Also lost on these otherwise elderly gentlemen was a fact not included in the official propaganda campaign: Germans happen to love their cash, as evidenced by the fierce opposition that met a government plan to outlaw cash payments of 5,000 euros or more. In addition, about 80 percent of transactions in Germany are still conducted in cash. The German tabloid Bild went as far as to publish an op-ed titled "Hands off our cash" in response to the proposed measure.

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iehi-feed-62471 Sun, 25 Jun 2017 19:26:17 GMT Doug Noland: Washington Finance and Bubble Illusion http://implode-explode.com/viewnews/2017-06-25_DougNolandWashingtonFinanceandBubbleIllusion.html The current debate, focusing simplistically on interest rates and the level consumer price inflation, misses the overarching issue. U.S. and global central banking shifted to an untested and radical regime of directly inflating securities prices. No longer do central banks attempt to loosen or tighten bank lending through subtle changes in reserve holdings and interbank lending rates. Why not just purchase securities, supporting prices while injecting liquidity directly into the marketplace?

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Central banks should not be in the business of favoring individual asset classes, sectors or groups in society. Never should a small group of unelected officials have such discretion to create Trillions of "money" and allocate wealth. After all, if "printing" Trillions to buy marketable debt was such a fine idea, why did central bankers wait until deep crisis to implement such a doctrine?

The new regime that developed specifically favored securities markets, Wall Street and the wealthy. It has fancied the financial speculator at the expense of the saver. The new regime favored financial engineering to productive investment -- the white collar to the blue collar. There was no problem seen with deindustrialization and persistent huge Current Account Deficits. No issue whatsoever exchanging new financial claims for Chinese imports.

The new regime has spurred wealth redistribution that is at the root of a divided country, political dysfunction and escalating geopolitical risk. And there is little mystery surrounding weak economic underpinnings, dismal productivity trends and stagnant wages and living standards. Contemporary finance has proven itself especially deficient in allocating resources throughout the economy. Markets have been over-liquefied, too distorted, grossly speculative and too monstrous to be an effective mechanism for resource allocation.

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iehi-feed-62469 Sun, 25 Jun 2017 14:31:19 GMT Stocks to plummet 40% or more, warns Marc 'Dr. Doom' Faber http://implode-explode.com/viewnews/2017-06-25_Stockstoplummet40ormorewarnsMarcDrDoomFaber.html "We've had more than eight years of a bull market. The Nasdaq is being driven by very few stocks," said Faber on Friday's "Trading Nation." That rally "is not a particularly healthy sign from a technical point of view, and valuations are very high," the investor added.

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Faber is deeply concerned that wealth has flowed to big corporations and affluent people. He believes the imbalance could eventually disrupt the markets as we know it.

"Either people with money will be taxed heavily ... or we'll have a massive deflation in asset prices -- I repeat: massive," he warned. "Eventually the system will break."

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iehi-feed-62468 Sun, 25 Jun 2017 14:08:37 GMT One57 ("Billionaire's Tower") could set NYC foreclosure record http://implode-explode.com/viewnews/2017-06-25_One57BillionairesTowercouldsetNYCforeclosurerecord.html previous foreclosure.]]> iehi-feed-62465 Sat, 24 Jun 2017 14:08:17 GMT The Insanity of 100-Year Bonds http://implode-explode.com/viewnews/2017-06-24_TheInsanityof100YearBonds.html iehi-feed-62464 Sat, 24 Jun 2017 02:48:49 GMT Brexit forever or Brexit never? http://implode-explode.com/viewnews/2017-06-23_BrexitforeverorBrexitnever.html While both May's Conservatives and the opposition Labour Party now explicitly support leaving the club the United Kingdom joined in 1973, some of the Union's most powerful politicians have raised the possibility of Britain cancelling Brexit.

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With her authority so weakened, May will have to gauge whether she can get a deal from the EU that she can sell at home.

If she thinks she will fail to get a Brexit deal through parliament, some business leaders fear she will allow talks with the EU to collapse and take Britain out with no deal.

A disorderly Brexit could spook financial markets, tarnish London's reputation as one of the world's top two financial centers and sow chaos through the economies of Britain and the EU by dislocating trading relationships.

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iehi-feed-62463 Sat, 24 Jun 2017 02:22:30 GMT Amazon Takeover of Whole Foods Puzzlingly Missing Any Economies of Scale http://implode-explode.com/viewnews/2017-06-23_AmazonTakeoverofWholeFoodsPuzzlinglyMissingAnyEconomiesofScale.html If Amazon.com Inc hopes to revolutionize grocery delivery, then its bid to buy Whole Foods Market Inc for $13.7 billion will be just the start of a long and costly process. The e-commerce giant would need to add a large network of specialized grocery distribution warehouses, former AmazonFresh employees and logistics experts said. This is something Wal-Mart Stores Inc and other competitors have already done. Whole Foods, with a relatively small distribution footprint of its own, does little to change the picture for Amazon, they said.

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Whole Foods has over 1 million square feet of warehouse space for distribution to its markets, and a chunk of its inventory goes straight from suppliers to stores, MWPVL said. "It's a peanut. It's nothing," MWPVL President Marc Wulfraat said of Whole Foods' distribution

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Even using Whole Foods stores to provide food for delivering to nearby urban shoppers would have hard limits, since many outlets lack the floor space to handle thousands of online orders.

"It's a space issue for stuff coming through. It's a labor issue for people tripping over each other," said Tom Furphy, former vice president of consumables and AmazonFresh, and now chief executive of Consumer Equity Partners. There would also be a risk that "the quality starts to go down because the e-commerce orders are getting better product."

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iehi-feed-62462 Sat, 24 Jun 2017 01:50:04 GMT Trump joins the effort to pass a health-care bill, but another GOP senator is opposed http://implode-explode.com/viewnews/2017-06-23_TrumpjoinstheefforttopassahealthcarebillbutanotherGOPsenatorisop.html Heller is seen as a bellwether for how the bill is perceived across the country. He is facing reelection next year in a swing state where Democrat Hillary Clinton defeated Trump but where there is also an active Republican base, which turned out overwhelmingly for Trump during the battle for the GOP presidential nomination. Nevada is among 31 states and the District of Columbia that expanded Medicaid under the ACA.

"I cannot support a piece of legislation that takes away insurance from tens of millions of Americans and hundreds of thousands of Nevadans," Heller said at a news conference in his home state Friday, where he was joined by Republican Gov. Brian Sandoval.

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[Trump] can afford to lose only two votes from the pool of 52 GOP senators, with all Democrats united against it and Vice President Pence ready to break a 50-50 tie.

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iehi-feed-62459 Fri, 23 Jun 2017 21:01:34 GMT Economists draw mixed conclusions over May new home sales report http://implode-explode.com/viewnews/2017-06-23_EconomistsdrawmixedconclusionsoverMaynewhomesalesreport.html "Despite May's good news, new home sales still have a long way to go to reach historic norms," Trulia Chief Economist Ralph McLaughlin said. "When taking into account the U.S. population, new home sales are still about 69% of the long-run average."

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"Ultimately this report is a disappointment for those looking to builders to meaningfully help solve the pressing supply issues in the market overall, especially for entry-level buyers," Zillow Chief Economist Svenja Gudell said. "The median price of a new home sold in May was close to $350,000, by far the highest it's ever been and likely well beyond the budget of younger, first-time buyers that make up a sizable portion of the market right now."

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iehi-feed-62458 Fri, 23 Jun 2017 20:58:31 GMT McDonalds Is Replacing 2,500 Human Cashiers With Digital Kiosks: Here Is Its Math http://implode-explode.com/viewnews/2017-06-23_McDonaldsIsReplacing2500HumanCashiersWithDigitalKiosksHereIsItsM.html