Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65459 Thu, 13 Aug 2020 14:08:23 GMT Thousands of Small Businesses Going Bankrupt in US Are Uncounted in Covid http://implode-explode.com/viewnews/2020-08-13_ThousandsofSmallBusinessesGoingBankruptinUSAreUncountedinCovid.html This wave of silent failures goes uncounted in part because real-time data on small business is notoriously scarce, and because owners of small firms often have no debt, and thus no need for bankruptcy court.

... Yelp Inc., the online reviewer, has data showing more than 80,000 permanently shuttered from March 1 to July 25. About 60,000 were local businesses, or firms with fewer than five locations. About 800 small businesses did indeed file for Chapter 11 bankruptcy from mid-February to July 31, according to the American Bankruptcy Institute, and the trade group expects the 2020 total could be up 36% from last year.

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Chapter 11 bankruptcy gives a business protection from its creditors while the owners work out a turnaround plan. For smaller companies, though, the extra time might not make any difference. "Bankruptcy cannot create more revenue," said Robert Keach, a restructuring partner at New England-based Bernstein Shur and former president at the American Bankruptcy Institute.

Some owners fear bankruptcy could scar their credit reports and hurt their future chances to rebuild. Bankrupt businesses have a nearly 24 percentage point higher likelihood of being denied a loan, according to the SBA, and a filing can show up on a credit report for 10 years.

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To be sure, small business attrition is high even in normal times. Only about half of all establishments survive for at least five years, according to the SBA. But the swiftness of the pandemic and the huge drop in economic activity is hitting hard among typically upbeat entrepreneurs. About 58% of small business owners say they're worried about permanently closing, according to a July U.S. Chamber of Commerce survey.

In a June 2020 NFIB survey, a net 31% of owners reported lower sales in the past three months, while 7% reported higher sales a year earlier. In the same survey, only 13% of business owners said it was a good time to expand, a dip from 24% a year earlier.

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iehi-feed-65458 Sun, 09 Aug 2020 20:02:56 GMT Congressional panel slams Fed's Main Street Lending Program as Hotel works oppose CMBS owner bailout http://implode-explode.com/viewnews/2020-08-09_CongressionalpanelslamsFedsMainStreetLendingProgramasHotelworkso.html The Main Street facility took three months to get up and running and has been little used relative to some of the other emergency lending programs created to help companies survive the pandemic. So far, only 509 banks have signed up to be Main Street program lenders, and 29 have made loans. Only 54 loans totaling $580.9 million have been issued to date. For comparison, the Paycheck Protection Program has pushed out more than 5.1 million loans worth $523.4 billion.

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"I think the issue is that the Fed is trying to solve a problem that doesn't exist and it's incapable of solving the problem that does exist. By law, the Fed can only support loans, and more loans are not the answer here for most companies," Ramamurti said, urging Congress to act to provide direct support to midsize firms with strings on the money to ensure that workers also benefit.

The Main Street Lending Program relies on banks to issue mid-market companies five-year term loans with low interest rates. The Fed then effectively buys 95 percent of those loans from the bank. The way the terms work now, companies little hurt by the pandemic can get better loans from regular lenders.

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Gwen Mills, secretary-treasurer of UNITE HERE, which represents hotel, casino and restaurant workers, opposed an asset-based facility, saying it would be a bailout for real estate investors that would do little to help laid-off employees.

"Lobbyists claim if the Fed doesn't rescue [commercial mortgage-backed securities] borrowers, hotels will default and workers won't have jobs to come back to, but that is not our experience, and this isn't the first time hotel owners got themselves in trouble using these inflexible loans," she said. "After the financial crisis, there were scores of defaults across the country, but defaults and foreclosures didn't lead to closed hotels. Hotel workers, who were used to seeing absentee owners come and go, understand that jobs are driven by occupancy. And only ending the pandemic can fix that."

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iehi-feed-65457 Fri, 07 Aug 2020 23:38:38 GMT Coronavirus has already dealt a blow to Social Security's finances. A payroll tax cut would make it worse http://implode-explode.com/viewnews/2020-08-07_CoronavirushasalreadydealtablowtoSocialSecuritysfinancesApayroll.html If this economic downturn is as bad as the Great Recession a decade ago, then the Social Security trust funds could run out of money in 2029, according to the Bipartisan Policy Center. After that, beneficiaries could see a 31% cut in retirement payments.

The program's trustees had projected earlier this year that the trust funds would be depleted in 2035, but that did not take the coronavirus pandemic into account.

It would be the first time the estimated insolvency date was within a decade since the crisis of the 1980s, which prompted several changes, including raising the retirement age, said Shai Akabas, the center's director of economy policy.

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The [depletion] projection depends heavily on when the economy is estimated to recover. If the economy bounces back quickly, under a V-shaped recovery, the depletion date would be 2034, according to the Penn Wharton Budget Model. But a slower U-shaped recovery would accelerate that by two years to 2032.

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The situation is even more dire for the Medicare trust fund, which its trustees projected earlier this year would run out of money by 2026, not taking into account the pandemic.

If employment and payroll tax revenues follow the same pattern as the Great Recession and its aftermath, the hit to the Medicare trust fund could be $175 billion between 2020 and 2023, according to an estimate by experts at the American Enterprise Institute, a right-leaning think tank. That would accelerate the depletion date by three years.

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iehi-feed-65456 Fri, 07 Aug 2020 23:31:55 GMT Covid's next casualty -- American restaurants http://implode-explode.com/viewnews/2020-08-07_CovidsnextcasualtyAmericanrestaurants.html "Four out of five of our favorite independent restaurants may not survive this shutdown." ... Most survived on small profit margins before the Covid-19 crisis compelled many to temporarily close, and re-open at 25% capacity, operating with skeleton crews doing takeout and serving food outdoors when the weather permits. Now, they're trying to convince Congress to throw them a much needed lifeline in the form of the Restaurants Act, a bipartisan bill to establish a $120 billion grant program distributed through the Treasury Department... But despite one-third of Congress co-sponsoring the bill, it has not been taken up by Senate Majority Leader Mitch McConnell as negotiations for a new round of relief drags on.

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[The] supply chain is now breaking, with small family farms feeling the pain. "It's nearly impossible to plan what we need to grow, how much seed to buy, or when we should start growing given the current situation," said third-generation farmer Kate McClendon from Peoria, Arizona. "Farms like ours don't have the connections to grocery chains and other businesses that might help us get through this. We depend on independent restaurants."

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The Restaurants Act's sponsors believe their bill will reduce the unemployment rate by more than 2 percentage points -- given the fact that restaurant and bar workers made up a staggering 60% of initial unemployment claims when the coronavirus pandemic hit.

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iehi-feed-65455 Fri, 07 Aug 2020 21:24:44 GMT Coronavirus stimulus updates: Relief bill stalls, Trump mulls executive order http://implode-explode.com/viewnews/2020-08-07_CoronavirusstimulusupdatesReliefbillstallsTrumpmullsexecutiveord.html It would take a massive effort for Democrats and the White House to even reach the outline of a deal soon. But the clock is ticking: the expiration of both the $600 per week enhanced federal unemployment benefit and the eviction moratorium late last month have left millions of Americans scrambling to cover bills and remain in their homes.

The U.S. added 1.76 million jobs in July despite a resurgence in coronavirus cases that forced many states to pause or reverse their economic reopening plans. The unemployment rate fell to 10.2%, but was still higher than at any point during the 2008 financial crisis.

In a joint statement after the jobs report release Friday, Pelosi and Schumer said the data shows "that the economic recovery spurred by the investments Congress has passed is losing steam and more investments are still urgently needed to protect the lives and livelihoods of the American people."

Democrats have insisted on extending the jobless benefit long term at $600 per week. The White House has made several counteroffers, reportedly proposing extra payments of $400 per week into December.

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iehi-feed-65454 Fri, 07 Aug 2020 15:50:20 GMT Capital One Fined $80 Million For Data Breach. Who's In Your Wallet? http://implode-explode.com/viewnews/2020-08-07_CapitalOneFined80MillionForDataBreachWhosInYourWallet.html iehi-feed-65453 Thu, 06 Aug 2020 22:19:15 GMT 'They Are Literally Exploding Right Now': The Rise Of Blank Check Real Estate Companies http://implode-explode.com/viewnews/2020-08-06_TheyAreLiterallyExplodingRightNowTheRiseOfBlankCheckRealEstateCo.html There were 59 SPAC IPOs in 2019, which raised a combined $13.6B. So far this year, according to Danic's data, there have been 60. A SPAC is a shell company that is set up to go public, even though it doesn't have any operations. Money poured into these "blank check companies" by shareholders is used to acquire another company, thus taking it public in a reverse merger. After the acquisition, the company is usually listed on one of the major stock exchanges.

Just in the last few weeks, a SPAC called PropTech Acquisition Corp., acquired Porch, an online real estate and home improvement marketplace, for $523M after the SPAC raised $172.5M in a November IPO. An offshoot of Miami-based Lionheart Capital filed paperwork with the Securities and Exchange Commission specifying that it intends to raise $200M to acquire a proptech company. Benchmark Real Estate Group is likewise looking to raise up to $200M for a SPAC called Property Solutions Acquisition Corp. that would target property technology or real estate service firms.

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iehi-feed-65452 Mon, 03 Aug 2020 23:42:38 GMT The next housing crisis is here http://implode-explode.com/viewnews/2020-08-03_Thenexthousingcrisisishere.html The eviction wave has already started, said Will Parker at The Wall Street Journal. The national moratorium only covered tenants in buildings with federally backed mortgages. States passed their own eviction limits, but some, such as Texas, have already let them expire. In a sign of things to come, attorneys in Houston are seeing "long lines at courthouses, sometimes people standing shoulder to shoulder" awaiting eviction hearings. "Stuck between tenants who can't, or simply won't, pay up and banks that still expect mortgage payments every month," landlords are also feeling the squeeze, said Tim Logan at The Boston Globe. In Massachusetts, a fifth of the landlords say "they don't know how they will pay their bills this year." That will only get worse if the state extends its eviction ban without help for property owners.

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"Perhaps this is all starting to sound like a redux of the mid-2000s housing crisis," said Derek Thompson at The Atlantic. "It's not." In many ways, it is the opposite. Back then, "foreclosures soared" and single-family homes stood empty in the suburbs. Now there is an undersupply of suburban housing and a hot market in new construction. The problem today is in the cities, where the pandemic has accelerated a crisis of affordability. "Without income, renters can't pay rent and utilities. Without monthly payments, landlords and other companies can't make mortgages and bond payments." Housing costs in cities have been approaching a crisis for years; thanks to the pandemic, that crisis is here, and "dangerously close to spiraling out of control."

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iehi-feed-65451 Mon, 03 Aug 2020 15:47:48 GMT Trump Housing Crisis: 40 Million Americans Face Being Homeless http://implode-explode.com/viewnews/2020-08-03_TrumpHousingCrisis40MillionAmericansFaceBeingHomeless.html iehi-feed-65449 Fri, 31 Jul 2020 22:30:59 GMT Gold powers to new record on weak US dollar and GDP; Cornered Fed http://implode-explode.com/viewnews/2020-07-31_GoldpowerstonewrecordonweakUSdollarandGDPCorneredFed.html Gold rose on Friday to hit a new all-time high, as a sliding dollar and dire economic numbers from far and wide sparked a rush to safety in bullion. It was gold's best month since February 2016, and its fifth straight positive month... Spot gold gained 0.58% to trade at $1,970.81 per ounce, while U.S. gold futures settled 1% higher at $1,985.9, after earlier breaking above $2,000 for the first time on record.

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The dollar was on track for its biggest monthly drop in almost a decade...Safe-haven bullion has gained nearly 30% so far this year, propelled by low interest rates globally and widespread stimulus from central banks adding to support for the metal considered a refuge from inflation and currency debasement.

"With policy rates already at or even below the zero bound, support to gold prices will increasingly have to come from higher inflation, in our view," said BofA Global Research, which expects gold to hit $3,000 per ounce in the coming 18 months.

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Silver climbed 4.2% to $24.34 per ounce, on course for a monthly rise of about 33%, its largest on records going back to 1982, supported by investment and industrial demand.

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iehi-feed-65448 Tue, 28 Jul 2020 16:57:25 GMT COVID-19 RELIEF FRAUD ALERT! Florida Man Busted In $3.9M Scam http://implode-explode.com/viewnews/2020-07-28_COVID19RELIEFFRAUDALERTFloridaManBustedIn39MScam.html iehi-feed-65446 Mon, 27 Jul 2020 17:32:10 GMT The Coronavirus Turns Midtown Manhattan Into a Ghost Town, Causing an Economic Crisis http://implode-explode.com/viewnews/2020-07-27_TheCoronavirusTurnsMidtownManhattanIntoaGhostTownCausinganEconom.html Editors and account managers at the Time & Life Building in Midtown Manhattan could once walk out through the modernist lobby and into a thriving ecosystem that existed in support of the offices above. They could shop for designer shirts or shoes, slide into a steakhouse corner booth for lunch and then return to their desks without ever crossing the street.

To approach this block today is like visiting a relative in the hospital. The building, rebranded a few years ago and renovated to fit 8,000 workers, now has just 500 a day showing up. The steakhouse dining rooms are dark.

On a sidewalk once lined with food carts, a lone hot-dog vendor stood one recent Friday on a corner below the building. His name is Ahmed Ahmed, and he said he used to sell 400 hot dogs a day. How many now? "Maybe 10."

Midtown Manhattan, the muscular power center of New York City for a century, faces an economic catastrophe, a cascade of loss upon loss that threatens to alter the very identity of the city's corporate base. The coronavirus's toll of lost professions, lost professionals and untold billions of lost income and tax revenue may take years to understand and resolve.

Other neighborhoods are rushing to reopen, while Midtown remains stuck in a purgatorial Phase Zero, its very purpose -- to bring as many human beings together as possible -- strangling most hope of a convincing comeback in the foreseeable future and offering a sign of what may lie in store for business districts across the country.

Upstairs, floors are mostly empty, as companies reassess their need for office space, raising serious questions about the future of the city's commercial real estate market. Downstairs, streets were lined with the creature comforts that made working in Midtown not only bearable, but even fun. They are vanishing, and with them, the men and women who fed, clothed, poured drinks for and drove the people in those tall buildings.

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In jeopardy of extinction, at least in its known state, is the corporate office culture at large -- its corner suites and cubicles, water-cooler movie reviews, coffee breaks, office crushes, shoeshines, black cars. Happy hour, "Mad Men."

That show was set in part in the Time & Life Building, which lent a shorthand nod to corporate chic. Today, the story of the state of Midtown can largely be told with a close look at the block near Rockefeller Center where it has stood for more than 60 years.

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iehi-feed-65442 Sun, 26 Jul 2020 15:35:55 GMT Millennials are Caught in the Two Recession Trap: the Great Recession and now the Great Pandemic. http://implode-explode.com/viewnews/2020-07-26_MillennialsareCaughtintheTwoRecessionTraptheGreatRecessionandnow.html iehi-feed-65440 Wed, 22 Jul 2020 19:06:11 GMT Gold futures blast forward to their highest since 2011; silver soars to highest finish since 2013 http://implode-explode.com/viewnews/2020-07-22_Goldfuturesblastforwardtotheirhighestsince2011silversoarstohighe.html iehi-feed-65439 Wed, 22 Jul 2020 15:42:35 GMT After CEO's Passing, Prodigy RE Crowdfunding Network, Assemblaged CoWorking Go Dark http://implode-explode.com/viewnews/2020-07-22_AfterCEOsPassingProdigyRECrowdfundingNetworkAssemblagedCoWorking.html In the month before he died, Rodrigo Niño led a daily meditation series over Zoom. Dressed in a different striped caftan each morning, a grey-bearded Niño led the early-morning sessions for viewers confined at home at the height of the pandemic in late April.

SEE ALSO: CIT Group's Chris Niederpruem on Taking the Helm of What He Helped Kickstart

Working off the teachings of consciousness guru Richard Rudd, Niño spoke about mortality, self-reflection, and the expanded self. "We forgot that we forgot that we don't know who we really are," he said on Day 16.

Less than two weeks later, Niño--once a luxury real estate broker to rich Latin Americans, then a pioneer peddling the wonders of crowdfunding, and finally the enlightened founder of The Assemblage, a center for the consciousness community in New York--passed away from melanoma cancer.

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When he died, the empire he'd built over two decades was crumbling. The assets he had amassed with his crowdfunding company, Prodigy Network, were facing financial ruin, he was facing a string of lawsuits, and The Assemblage had been reduced to a skeleton crew, with its staff furloughed, and members scattered by the pandemic.

The implosion of Niño's identity and the apparent implosion of Prodigy has left those thousands of investors in the dark over the fate of their investments.

Multiple investors, lawyers and Assemblage members have reached out to the company in the last several weeks, but they have heard nothing back. Both phone numbers on Prodigy's website are no longer working, The Assemblage ceased operations in June, and two of Prodigy's assets sold several days later at a loss.

It's a steep fall from the early days of Prodigy, which made waves as a pioneering crowdfunding platform, raising hundreds of millions of dollars. Within the space of a few years, Prodigy launched three AKA-branded hotels, two coworking properties for The Assemblage and a live-work hotel in Manhattan's hottest markets, including Nomad, the Financial District and Tribeca.

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iehi-feed-65437 Mon, 20 Jul 2020 19:03:44 GMT Mark Cuban says 2020 stock-market rally 'very similar' to tech bubble--'everybody's a genius' http://implode-explode.com/viewnews/2020-07-20_MarkCubansays2020stockmarketrallyverysimilartotechbubbleeverybod.html iehi-feed-65436 Mon, 20 Jul 2020 16:04:26 GMT Caliber Home Loans Management Favors Kiddie Porn Peddlers Over AIME http://implode-explode.com/viewnews/2020-07-20_CaliberHomeLoansManagementFavorsKiddiePornPeddlersOverAIME.html iehi-feed-65435 Mon, 20 Jul 2020 13:53:27 GMT Global Real Estate Investment Plunges Amid Covid Pandemic http://implode-explode.com/viewnews/2020-07-20_GlobalRealEstateInvestmentPlungesAmidCovidPandemic.html Global real estate investment fell by 33% in the first half as the coronavirus pandemic battered economies and disrupted deals.

The Asia-Pacific region took the biggest hit, with volumes down 45% from the year-earlier period, because it was the first struck by the outbreak, according to a report from broker Savills Plc. Investment dropped by 36% in the Americas and 19% in Europe, the Middle East and Africa.

Investment is "expected to remain well below pre-pandemic levels for the rest of 2020 as investors wait for market clarity," Simon Hope, Savills head of global capital markets, said in a statement on Monday. "However, certain sectors are expected to outperform as investors focus on secure assets, namely logistics, residential and life sciences."

The global economy has been hammered by the pandemic, with the International Monetary Fund forecasting a 4.9% contraction this year. IMF chief economist Gita Gopinath has said the cumulative loss for the world economy this year and next as a result of the recession is expected to reach $12.5 trillion.

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iehi-feed-65434 Sun, 19 Jul 2020 20:10:07 GMT Here's What Everyone, Including Mary Trump, Gets Wrong About Donald Trump's Failed Response to COVID-19 http://implode-explode.com/viewnews/2020-07-19_HeresWhatEveryoneIncludingMaryTrumpGetsWrongAboutDonaldTrumpsFai.html iehi-feed-65432 Fri, 17 Jul 2020 18:44:47 GMT AIME CEO Anthony Casa Takes Leave Of Absence http://implode-explode.com/viewnews/2020-07-17_AIMECEOAnthonyCasaTakesLeaveOfAbsence.html