Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61212 Sat, 03 Dec 2016 00:27:34 GMT Erdogan Demands Turks Exchange Their Dollars To Gold, Lira http://implode-explode.com/viewnews/2016-12-02_ErdoganDemandsTurksExchangeTheirDollarsToGoldLira.html or those who have foreign currencies under the pillow, come change this to gold, come change this to Turkish lira. Let the lira win greater value. Let gold win greater value," he said during a televised speech in Ankara... In November alone, the lira has lost more than 10% against the dollar, and December was not starting off on the right foot either.

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Erdogan also warned that there were forces "playing games" against Turkey, which Turks could counter by changing their money. He did not say whom he was referring to. "Don't worry, in a short while, we will destroy this game", clearly referring to "evil speculators" who could be destroyed if only mom and pop exchanged the dollars in their mattress for the local currency.

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iehi-feed-61211 Sat, 03 Dec 2016 00:24:57 GMT China, Grappling With Trump, Turns to ‘Old Friend' Kissinger http://implode-explode.com/viewnews/2016-12-02_ChinaGrapplingWithTrumpTurnstoOldFriendKissinger.html The 93-year-old former secretary of state, who secretly brokered President Richard Nixon's watershed visit in 1972, returned to Beijing to meet with state leaders Friday, just two weeks after huddling with Trump in New York. While little about Kissinger's closed-door talks has been disclosed, Chinese officials are trying to assess whether the incoming administration will prompt greater confrontation over trade and territory disputes, as Trump promised on the campaign trail.

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"The U.S. and China are going to have to establish some channels, but that is going to take time," said Tim Summers, a Hong Kong-based senior consulting fellow for Chatham House. Summers said that Xi, unlike Japanese Prime Minister Shinzo Abe, "is not going drop into Trump Tower en route somewhere else. So, we are in for a period of U.S.-china uncertainty, along with all the other issues up in the air at the moment."

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iehi-feed-61210 Fri, 02 Dec 2016 22:28:56 GMT Indian ‘Gold Ban' a Portent of Major Events? http://implode-explode.com/viewnews/2016-12-02_IndianGoldBanaPortentofMajorEvents.html iehi-feed-61209 Fri, 02 Dec 2016 18:26:27 GMT Americans Not In The Labor Force Soar To Record 95.1 Million, Driving Headline Unemployment Rate Fall http://implode-explode.com/viewnews/2016-12-02_AmericansNotInTheLaborForceSoarToRecord951MillionDrivingHeadline.html this report that average hourly earnings are actually slightly down on the month, belying alleged strength...)]]> iehi-feed-61208 Fri, 02 Dec 2016 16:05:41 GMT Gross Warns That Trump Rally Built on False Promise of Growth http://implode-explode.com/viewnews/2016-12-02_GrossWarnsThatTrumpRallyBuiltonFalsePromiseofGrowth.html iehi-feed-61207 Fri, 02 Dec 2016 02:37:59 GMT UK could pay EU for access to single market, ministers admit http://implode-explode.com/viewnews/2016-12-01_UKcouldpayEUforaccesstosinglemarketministersadmit.html iehi-feed-61206 Fri, 02 Dec 2016 02:25:02 GMT Largest US Bitcoin Exchange Ordered To Disclose Three Years Of User Data To IRS http://implode-explode.com/viewnews/2016-12-01_LargestUSBitcoinExchangeOrderedToDiscloseThreeYearsOfUserDataToI.html Despite the order, Coinbase has vowed to continue the fight: "We look forward to opposing the DOJ's request in court after Coinbase is served with a subpoena," a spokesman for the San Francisco-based company said in an email to Reuters.

Coinbase remains concerned with its U.S. customers' privacy rights in the face of the government's request, he added, although he is likely far less concerned than any people who used Coinbase from 2013 to 2015, and who may soon be getting a visit from the taxman, even if they have done nothing illegal. As for the myth that trading bitcoin by ordinary Americans provides some additional layer of privacy, that is about to be thoroughly debunked.

This order is almost unbelievably broad -- it's comparable to an order demanding bank client identities and transactions because the transactions might entail unreported taxable gains (of course, there are already other forms of regulatory surveillance on banks). The until-recently-ongoing NSA warrantless wiretapping program revealed by Snowden is the closest parallel we can think of.

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iehi-feed-61205 Fri, 02 Dec 2016 00:40:57 GMT Mortgage Rates Surge Above 2-Year Highs (AT SPEEDS NOT SEEN IN 20 YEARS!) http://implode-explode.com/viewnews/2016-12-01_MortgageRatesSurgeAbove2YearHighsATSPEEDSNOTSEENIN20YEARS.html ``Mortgage rates spiked abruptly today, bringing them to the highest levels in well over 2 years.  The average lender is now quoting conventional 30yr fixed rates of 4.25% on top tier scenarios with more than a few already up to 4.375%.  You'd have to go back to the summer of 2014 to see a similar mortgage rate landscape.  

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The pace of losses has only been seen 2 other times in the last 30 years (in 1987 and 1996). For the record, 2013's taper tantrum resulted in a bigger rate spike than we're seeing currently, but it took more than twice as long to play out... Some people may think its funny, but they are terribly wrong. When borrowing costs move higher, this much, this fast, it is toxic to many areas of the economy. Unfortunately it takes a while to surface

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iehi-feed-61204 Thu, 01 Dec 2016 23:05:00 GMT Wells Fargo Splits Chairman, CEO Roles After Account Scandal http://implode-explode.com/viewnews/2016-12-01_WellsFargoSplitsChairmanCEORolesAfterAccountScandal.html [The] move is significant in an industry that has long fought off pressure from corporate governance activists and shareholders including pension managers, but it won't change Wells Fargo's current leadership. John Stumpf had held both roles at Wells Fargo until he stepped down in October under pressure from lawmakers. Tim Sloan was promoted that month to CEO, while Stephen Sanger became non-executive chairman.

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The approach differs from almost all of Wells Fargo's biggest competitors, including Bank of America Corp. and JPMorgan Chase & Co., which have persuaded shareholders not to divide the jobs in recent years. Citigroup Inc. is the only other bank among the nation's top six that hasn't granted both titles to its current leader.

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Wells Fargo should also consider further steps to improve its board, he said. CtW urged the San Francisco-based company in September to add directors with experience linking employees' pay to corporate objectives.

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iehi-feed-61203 Thu, 01 Dec 2016 22:58:35 GMT Sanders: Donald Trump 'Has Endangered' U.S. Jobs With Carrier Deal http://implode-explode.com/viewnews/2016-12-01_SandersDonaldTrumpHasEndangeredUSJobsWithCarrierDeal.html The former Democratic presidential candidate ripped the apparent terms of the deal in an op-ed for The Washington Post. "Trump has endangered the jobs of workers who were previously safe in the United States," Sanders wrote. "Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives."

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Trump's deal apparently saves less than half of the total jobs, the rest of which will still be going to Mexico.

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And as Sanders noted in the op-ed, Trump promised during the campaign to threaten Carrier with tariffs on products it would import into the United States as a way of dissuading them from offshoring the jobs ― rather than giving them tax relief as an incentive to stay.

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iehi-feed-61202 Thu, 01 Dec 2016 22:50:21 GMT Melbourne Apartment Prices Drop by Most Since 2014 (AU'S HOUSING BUBBLE GOING BUST) http://implode-explode.com/viewnews/2016-12-01_MelbourneApartmentPricesDropbyMostSince2014AUSHOUSINGBUBBLEGOING.html Apartment prices in Melbourne fell at the fastest pace in more than two years in November, reinforcing concerns about a looming oversupply of units in Australia's second-largest city.  The 3.2 percent month-on-month drop is the largest such decline since May 2014, according to figures from data provider CoreLogic Inc.

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Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy's shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation's biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane.

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"There are emerging signs of stress" in the economy, the head of Australia's third-biggest bank told a Reuters event in Sydney.

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iehi-feed-61201 Thu, 01 Dec 2016 22:47:27 GMT Trump's Tax Cut Means Billion-Dollar Writedowns for U.S. Banks http://implode-explode.com/viewnews/2016-12-01_TrumpsTaxCutMeansBillionDollarWritedownsforUSBanks.html Donald Trump's planned U.S. corporate tax cuts could translate to a big one-time earnings hit for many of the biggest U.S. banks, thanks to tax benefits they generated during the 2008 financial crisis... The banks might have to write down deferred tax assets, which often pile up when a company loses money and can't immediately enjoy the tax benefits of those losses.

... Citigroup Inc. would take the deepest earnings hit -- perhaps $12 billion or more, according to recent estimates by the bank's chief financial officer and several banking analysts. Mark Costiglio, a Citigroup spokesman, declined to comment. Others, including Bank of America Corp. and Wells Fargo & Co. could face multibillion-dollar writedowns.

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At a 25 percent rate, Citigroup would be required to lower its earnings by $6 billion to reflect the reduced value of its tax-deferred assets, John Gerspach, the bank's chief financial officer, told investors at a conference hosted by Bank of America on Nov. 16.

But that could change if a Republican call for exempting overseas corporate earnings from U.S. taxation is enacted as part of the tax overhaul. Under that scenario, Gerspach said, Citigroup would have to write down as much as $12 billion -- because a large part of its deferred tax assets consist of unused foreign tax credits.

Calculations by Brian Kleinhanzl, a financial-sector analyst at KBW, show that at a 25 percent corporate tax rate, Bank of America would face a $6.6 billion writedown, while Wells Fargo's would be $4 billion. Goldman Sachs Group Inc.'s would be $1.6 billion, according to KBW's estimates.

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The implications might also reach mortgage giants Fannie Mae and Freddie Mac, which could see write downs of $10 billion and $5.4 billion respectively, according to a Nov. 27 KBW research note. Those hits would be large enough to potentially require both of them to seek a new infusion of money from the Treasury Department, the note said.

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iehi-feed-61200 Thu, 01 Dec 2016 22:37:09 GMT Carrier deal shows Trump understands the politics of jobs http://implode-explode.com/viewnews/2016-12-01_CarrierdealshowsTrumpunderstandsthepoliticsofjobs.html Trump has focused much of his economic messaging on one correct core idea: What most people want is to be able to comfortably support themselves and their families with the income from a job that pays steadily rising wages. And he'll work hard to make that goal a reality for more Americans -- including by bullying and bribing companies into keeping jobs in America.

The idea that good-paying jobs are the central goal of economic policy may sound uncontroversial, even trite -- but it's a significant departure from standard Republican and Democratic messaging on the economy.

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President George W. Bush promoted an "ownership society" in which ordinary people got to enjoy the rising fortunes of capital through their ownership of assets. The problem with this idea was that most people are not rich and therefore cannot derive a large share of their income from returns to capital. They have to work for a living.

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Of course, Democrats talk constantly about the importance of creating good, middle-class jobs. But over the past eight years, their economic agenda has focused much more on uplifting the poor than on strengthening and employing the middle class.

... I think the likely wage effects of Trump's economic policy suite are more uncertain than his detractors want to admit. In particular, a lot of economic research on the effects of trade on wages has been turned on its head in recent years. My confidence in the economics consensus that immigration does not depress native-born workers' wages is relatedly low.

... Trump's public jawboning of Carrier has been treated as extraordinary, but it doesn't strike me as all that different from the Obama administration's shaming of Pfizer out of pursuing a tax-inversion transaction with Allergan. The main difference is the government's goal was job location rather than tax receipts.

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iehi-feed-61198 Thu, 01 Dec 2016 17:09:20 GMT Greece Isn't 'Crying Wolf' on Debt Relief http://implode-explode.com/viewnews/2016-12-01_GreeceIsntCryingWolfonDebtRelief.html This isn't just your standard tale of a bondholder trying to boost the value of his investments by talking his book. What Kazarian has tried to do for the past four years is treat the sovereign nation of Greece the same way he might a private company he'd taken over: by detailing its assets and liabilities, looking for ways to enhance asset value while reducing liabilities, and, most importantly, seeking to install his own managers to take charge. The more you reflect on that latter notion, the more disturbing Kazarian's larger-than-life presence on the Greek financial scene becomes.

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Give or take, everyone else agrees that Greece's debts are equal to about 170 percent of its gross domestic product... But Kazarian says people who arrive at that number are suffering from "a major, major, major, major flaw in their model." He gets to a much more manageable (or downright virtuous) debt ratio of 45 percent by accounting for every previous restructuring as a debt cancellation, and treating all of the supposed assets of the country as if they were the factories, inventory and intellectual property of a company.

... there's a crucial, insurmountable difference between a bust company and a bankrupt nation: In the latter, the creditors don't (and indeed shouldn't) get to decide who's in charge.

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After shrinking this year and last year, economists are forecasting growth of just 1 percent in 2017 (lower than the official forecast). Sympathizers ranging from the IMF to President Barack Obama remain convinced that Greece cannot escape its doldrums without a further reduction in the debt burden. EU minister say they will discuss the issue when they meet next week. Investors may currently be fixated on Italian politics, but Greece's problems could also boil over.

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iehi-feed-61197 Thu, 01 Dec 2016 14:56:53 GMT Some 6 million Americans are delinquent with auto loans and it's going to get worse http://implode-explode.com/viewnews/2016-12-01_Some6millionAmericansaredelinquentwithautoloansanditsgoingtogetw.html The number of subprime auto loans sinking into delinquency hit their highest level since 2010 in the third quarter, with roughly 6 million individuals at least 90 days late on their car-loan payments.

It's behavior much like that seen in the months heading into the 2007-2009 recession, according to data from Federal Reserve Bank of New York researchers.

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Credit officials have stressed that the contagion risk to the financial system from poor auto loans isn't like the risk posed when subprime mortgage lending pushed the U.S. into the Great Recession. That's in large part because repossessed cars are easier to resell than bank-owned homes. Cars can't sink whole neighborhoods with foreclosure blight.

Don't worry, consumer confidence is high...

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iehi-feed-61196 Thu, 01 Dec 2016 14:54:07 GMT Angry Mobs Lock Up Indian Bankers As Cash Chaos Soars http://implode-explode.com/viewnews/2016-12-01_AngryMobsLockUpIndianBankersAsCashChaosSoars.html iehi-feed-61195 Thu, 01 Dec 2016 14:52:38 GMT Where Are We In The Business Cycle: A Troubling Chart From Morgan Stanley http://implode-explode.com/viewnews/2016-12-01_WhereAreWeInTheBusinessCycleATroublingChartFromMorganStanley.html iehi-feed-61194 Thu, 01 Dec 2016 01:31:58 GMT Mortgage Activity Will Be Crushed By Rising Rates - Freddie Mac http://implode-explode.com/viewnews/2016-11-30_MortgageActivityWillBeCrushedByRisingRatesFreddieMac.html iehi-feed-61192 Thu, 01 Dec 2016 00:55:37 GMT Bombshell: OPEC+Russia Agree to Historic Oil Production Cut, Price Spikes 10% http://implode-explode.com/viewnews/2016-11-30_BombshellOPECRussiaAgreetoHistoricOilProductionCutPriceSpikes10.html OPEC confounded its doubters and sent crude oil prices soaring by agreeing to its first production cuts in eight years. The deal, designed to drain record global oil inventories, overcame disagreements between the group's three largest producers -- Saudi Arabia, Iran and Iraq -- and ended a flirtation with free markets that started in 2014. It was also broader than many had expected, extending beyond OPEC. Most strikingly, Russia agreed to unprecedented cuts to its own output.

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The impact on the energy world was immediate: benchmark oil prices gained as much as 10 percent in New York and the share prices of energy companies around the globe jumped alongside the currencies of large exporters. Whether that's sustained will depend on how strictly members of the Organization of Petroleum Exporting Countries stick to the agreement, something they haven't always done in the past.

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iehi-feed-61190 Wed, 30 Nov 2016 22:47:59 GMT What Happens "If the Boom Ends with a Bang?" (CA) http://implode-explode.com/viewnews/2016-11-30_WhatHappensIftheBoomEndswithaBangCA.html