Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64479 Tue, 18 Dec 2018 01:18:51 GMT US credit markets dry up as volatility rattles investors http://implode-explode.com/viewnews/2018-12-17_UScreditmarketsdryupasvolatilityrattlesinvestors.html US credit markets are grinding to a halt with fund managers refusing to bankroll buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weigh on sentiment.

Not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month. If that drought persists, it would be the first month since November 2008 that not a single high-yield bond priced in the market, according to data providers Informa and Dealogic.

In the leveraged loan market, two transactions were postponed last week after Barclays, Deutsche Bank, UBS and Wells Fargo failed to find buyers for the debt packages, a rarity in what has been one of the hottest corners of credit markets this year.

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"This is clearly more than year-end jitters," said Guy LeBas, a strategist at Janney Montgomery Scott. "What we're seeing now is pretty typical for end-of-credit-cycle behaviour."

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As prices in the loan market have slumped over the past two months, banks that committed to finance highly leveraged buyouts earlier this year have struggled to find investors to back the deals. Some lenders, including JPMorgan Chase and Goldman Sachs, have offered loans at substantial discounts to entice investors. But others, including Barclays, Deutsche Bank, UBS and Wells Fargo, have had to pull deals altogether. 

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iehi-feed-64477 Mon, 17 Dec 2018 18:31:48 GMT Goldman Sachs Faces First Criminal Charges in 1MDB Scandal http://implode-explode.com/viewnews/2018-12-17_GoldmanSachsFacesFirstCriminalChargesin1MDBScandal.html iehi-feed-64476 Mon, 17 Dec 2018 14:01:22 GMT National Rifle Association Admits It's Facing Financial Ruin http://implode-explode.com/viewnews/2018-12-17_NationalRifleAssociationAdmitsItsFacingFinancialRuin.html iehi-feed-64475 Mon, 17 Dec 2018 04:15:00 GMT Protests Grip Hungary In Response To Overtime Measure That Critics Call A 'Slave Law' http://implode-explode.com/viewnews/2018-12-16_ProtestsGripHungaryInResponseToOvertimeMeasureThatCriticsCallASl.html iehi-feed-64474 Sun, 16 Dec 2018 22:32:07 GMT Cambridge University Study: Speculation of the Death of Bitcoin 'Greatly Exaggerated' http://implode-explode.com/viewnews/2018-12-16_CambridgeUniversityStudySpeculationoftheDeathofBitcoinGreatlyExa.html iehi-feed-64473 Sun, 16 Dec 2018 17:36:49 GMT Doug Noland: The Perils of Inflationism http://implode-explode.com/viewnews/2018-12-16_DougNolandThePerilsofInflationism.html What only weeks ago appeared a rather straightforward meeting is now a pivotal juncture for the Federal Open Market Committee. With low unemployment and relatively robust household and business expenditures, the Fed has been widely expected to raise rates next Wednesday. It may now be a close call. But, then again, the Fed may not yet appreciate the seriousness of what is unfolding in the markets. They're in a real predicament, along with central bankers around the world. They all waited way too long to begin normalizing monetary policy. Today, normalization has barely even commenced, and yet the Bubble they nurtured has already begun to deflate.

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I don't want to imply that resurgent Chinese Credit growth and/or even a more dovish Fed wouldn't matter. I just believe at this point the bursting global Bubble is increasingly beyond resuscitation. A bold statement, I fully appreciate. But Fear is rapidly supplanting greed in "Core" U.S. securities markets. The "Core" has seen de-risking/deleveraging dynamics attain important momentum. Latent "Core" fragilities are being exposed. And the further the global Bubble deflates, the greater the scope of monetary stimulus required to re-energize broad-based securities market inflation. I fully expect more QE. But it will come in a crisis backdrop. I'll presume the first few Trillion or so will, at best, accommodate deleveraging.

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iehi-feed-64472 Sun, 16 Dec 2018 00:55:13 GMT Senior FDIC Official Found Guilty Of Theft Of Government Property http://implode-explode.com/viewnews/2018-12-15_SeniorFDICOfficialFoundGuiltyOfTheftOfGovernmentProperty.html iehi-feed-64471 Sat, 15 Dec 2018 04:32:24 GMT Trump's Inauguration Paid Trump's Company -- With Ivanka in the Middle http://implode-explode.com/viewnews/2018-12-14_TrumpsInaugurationPaidTrumpsCompanyWithIvankaintheMiddle.html iehi-feed-64470 Fri, 14 Dec 2018 23:41:49 GMT The End of QE Will Always Devolve Into This Sort of Incoherent Mess http://implode-explode.com/viewnews/2018-12-14_TheEndofQEWillAlwaysDevolveIntoThisSortofIncoherentMess.html Draghi claimed today, again the circus, that at some points "QE has been the only driver of this recovery." Even if that statement is true, it can't have been a recovery. The term itself has been so misused, to attempt to reverse engineer some measure of success for the policy.

John Maynard Keynes would be spinning in his grave. Monetary as fiscal policy is supposed to spur the organic processes that then lead to sustained economic growth (pump priming). If it is the only thing moving the economy forward (itself debatable), it has failed on its own terms.

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iehi-feed-64468 Thu, 13 Dec 2018 22:03:31 GMT The Curious Rush To Combine German Banks http://implode-explode.com/viewnews/2018-12-13_TheCuriousRushToCombineGermanBanks.html German officials are laying the groundwork to change the nation's banking laws so that it's two largest banks, really "banks", can more easily combine. If it should ever come to that... DB would have to convert to a holding company triggering revaluation of assets and then the tax consequences of those. Unless, of course, auditing the bank's standing book reveals other malformities taking things in a different direction.

It's not just the rush toward marriage, it's more so who with. DB is both the target and the presumptive acquirer, an already odd situation. And if there is a healthy counterpart to DB's sickening status it's surely not Commerzbank, the institution being whispered up for combination.

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All of these things are related, furthermore connected to Germany's vulnerable external financing requirements ("dollar short"). DB's, as Commerzbank's, declining revenues and overall position indeed have led to a great contribution to the global "dollar shortage." The "dollar short" persists regardless, meaning that rock has met hard place; "funding costs have continued to rise" because these things become self-reinforcing.

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The bank raised significant capital early on in [2014], ostensibly to complete its comeback from the 2008 break. Having been fixed, and compliant with new regulations in full, what did DB's management decide was its best course? Unlike most of its other peers who were actively retreating, Deutsche plunged headlong into the riskiest assets -- global junk, including US corporates as well as US$ EM junk (Eurobonds).

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iehi-feed-64467 Thu, 13 Dec 2018 19:23:01 GMT Mark Calabria Nominated To Lead FHFA http://implode-explode.com/viewnews/2018-12-13_MarkCalabriaNominatedToLeadFHFA.html iehi-feed-64466 Thu, 13 Dec 2018 16:35:23 GMT Two Nuns Are Accused Of Pilfering $500,000 From Catholic Church http://implode-explode.com/viewnews/2018-12-13_TwoNunsAreAccusedOfPilfering500000FromCatholicChurch.html iehi-feed-64465 Thu, 13 Dec 2018 05:28:57 GMT Speaker Paul Ryan retires: his legacy is debt and disappointment http://implode-explode.com/viewnews/2018-12-13_SpeakerPaulRyanretireshislegacyisdebtanddisappointment.html House Speaker Paul Ryan's legacy can be summed up in just one number: $343 billion. That's the increase between the deficit for fiscal year 2015 and fiscal year 2018 -- that is, the difference between the fiscal year before Ryan became speaker of the House and the fiscal year in which he retired.

... now, as Ryan prepares to leave Congress, it is clear that his critics were correct and a credulous Washington press corps -- including me -- that took him at his word was wrong. In the trillions of long-term debt he racked up as speaker, in the anti-poverty proposals he promised but never passed, and in the many lies he told to sell unpopular policies, Ryan proved as much a practitioner of post-truth politics as Donald Trump.

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The first [betrayal] is the 2017 tax cut Ryan passed but didn't pay for. His defenders note that early drafts of the tax cut bill included a border adjustment tax that would've made the package revenue-neutral, fulfilling Ryan's promises. But that policy fell out of the legislation early on, and rather than replace it, Ryan pushed a plan that added $1.5 trillion to the national debt over 10 years, and used accounting gimmicks to hide vastly larger increases tucked into the legislation's long-term design. Now House Republicans, still under Ryan's leadership, are agitating to make the tax cuts permanent, with a 20-year cost estimated at $4 trillion.

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The second is the spending Ryan passed but didn't pay for. Years of fiscal irresponsibility have sometimes permitted Republicans to be graded on a curve, where tax cuts can be charged to the national credit card and spending cuts are the true measure of policy steel. But even on this diminished measure, Ryan's record betrayed his promises.

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The third is the expansion of the earned income tax credit Ryan proposed but never even tried to pass. After the 2010 election, he went on a much-vaunted tour of American poverty, racking up positive press for expanding the boundaries of the possible under conservatism, and arguing for an enlarged EITC that would help childless adults.

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"When we tried to get it into a negotiation, he refused," says Jason Furman, who served as Obama's chief economist. "It wasn't in his tax plan. In $1.5 trillion in tax cuts, he somehow couldn't find space for this $60 billion item. It's just amazing."

... In important ways, Trump is not a break from the Republican Party's recent past but an acceleration of it. A party that acculturates itself, its base, and its media sphere to constant nonsense can hardly complain when other political entrepreneurs notice that nonsense sells and decide to begin marketing their own brand of flimflam.

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iehi-feed-64464 Wed, 12 Dec 2018 16:03:03 GMT Theresa May Faces No-Confidence Vote Wednesday Over Brexit Anger http://implode-explode.com/viewnews/2018-12-12_TheresaMayFacesNoConfidenceVoteWednesdayOverBrexitAnger.html iehi-feed-64463 Wed, 12 Dec 2018 15:42:40 GMT Fed Piles Up $66 Billion in Paper Losses as It Faces Trump Wrath http://implode-explode.com/viewnews/2018-12-12_FedPilesUp66BillioninPaperLossesasItFacesTrumpWrath.html ``The Fed had losses of $66.5 billion on its securities holdings on Sept. 30, if it marked them to market, according to its latest quarterly financial report. That dwarfed its $39.1 billion in capital, effectively leaving it with a negative net worth on that basis, a sure sign of financial frailty if it were an ordinary company.

... officials play down the significance of the theoretical losses and say they won't affect the ability of what they call "a unique non-profit entity'' to carry out monetary policy or remit profits to the Treasury Department. Case in point: the Fed handed over $51.6 billion to the Treasury in the first nine months of the year.

... "A central bank with a negative net worth matters not in theory,'' former Fed Governor Kevin Warsh said in an email. "But in practice, it runs the risk of chipping away at Fed credibility, its most powerful asset.''

The unrealized losses also provide fuel to critics of the Fed's huge bond buying programs -- commonly known as quantitative easing -- and the monetary operating framework underpinning them, just as central bankers begin discussing the future of its balance sheet. The ostensible red ink also could make it politically more difficult for the Fed to resume QE if the economy turns down.

... The Fed is currently reducing its bond holdings by a maximum of $50 billion per month -- not by selling them, which could force it to recognize an actual loss -- but by opting not to reinvest some of the proceeds of securities as they mature.

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iehi-feed-64462 Wed, 12 Dec 2018 13:45:48 GMT Florida Appellate Courts Irritated By Moronic Trial Court Foreclosure Rulings http://implode-explode.com/viewnews/2018-12-12_FloridaAppellateCourtsIrritatedByMoronicTrialCourtForeclosureRul.html iehi-feed-64461 Tue, 11 Dec 2018 05:09:50 GMT Manic Monday: Britain plunges deeper into Brexit crisis http://implode-explode.com/viewnews/2018-12-11_ManicMondayBritainplungesdeeperintoBrexitcrisis.html It all started in the morning, when in a landmark ruling the European Union's top court said the UK may unilaterally reverse its decision to leave the 28-member bloc prior to its scheduled exit on March 29 next year.

By early noon, May's already tenuous grip on Brexit appeared further weakened as whispers began to circulate that she would postpone a parliamentary voteon the widely criticised Brexit deal she negotiated with the EU, contradicting statements made by several officials earlier in the day.

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When May finally announced that Tuesday's vote was being delayed, acknowledging that her agreement would have been rejected, opposition MPs accused her of "losing control of events" and members of her own ruling party called on her to "govern or quit".

"The situation is utterly confused," said Simon Usherwood, a reader in politics at the University of Surrey and deputy director of the UK in a Changing Europe group.

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iehi-feed-64459 Mon, 10 Dec 2018 13:29:58 GMT Florida Foreclosure Defense Lawyer Bruce Jacobs Sanctioned http://implode-explode.com/viewnews/2018-12-10_FloridaForeclosureDefenseLawyerBruceJacobsSanctioned.html iehi-feed-64457 Sun, 09 Dec 2018 16:47:42 GMT Paris cleans up as Macron prepares to respond to 'yellow vest' riots http://implode-explode.com/viewnews/2018-12-09_PariscleansupasMacronpreparestorespondtoyellowvestriots.html The government canceled a planned rise in fuel taxes last Tuesday to try to defuse the situation but the protests have morphed into a broader anti-Macron rebellion.

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Yellow vest protesters demand lower taxes, higher minimum wages and better pension benefits. But, mindful of France's deficit and not wanting to flout EU rules, Macron has scant wriggle room for more concessions.

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iehi-feed-64455 Sun, 09 Dec 2018 12:33:02 GMT Short Sales Are Not Home Sales To Dwarfs http://implode-explode.com/viewnews/2018-12-09_ShortSalesAreNotHomeSalesToDwarfs.html