Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64397 Thu, 15 Nov 2018 02:37:37 GMT Why Amazon Chose New York and Northern Virginia for New Headquarters http://implode-explode.com/viewnews/2018-11-14_WhyAmazonChoseNewYorkandNorthernVirginiaforNewHeadquarters.html To recap: a company whose profits soared 27 percent to $3.03 billion last year just received an additional $2 billion or more in tax breaks, and may also be in line for $10 billion more in tax money through the JEDI deal.

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No population genuinely worried about abuses of power would even countenance placing a single private company in control of securing the data of both the intelligence community and the armed services. Add putting a major media organ or two under the same umbrella and you're beginning to enter oligarchy territory.

Moving Amazon closer to America's political and financial capitals isn't just about creating a few jobs. It's also a symbolic move that speaks to the unsettling co-mingling of state and corporate power. We might wake up soon and wish we hadn't put so many eggs in one basket.

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iehi-feed-64393 Wed, 14 Nov 2018 02:30:31 GMT The chances of seeing Donald Trump's tax returns just went WAY up http://implode-explode.com/viewnews/2018-11-13_ThechancesofseeingDonaldTrumpstaxreturnsjustwentWAYup.html The real issue here is a 1924 provision in the Internal Revenue Service tax code that allows the chair of the House Ways and Means Committee and the chair of the Senate Finance Committee can ask for anyone's tax returns -- including the president's! -- from the Internal Revenue Service -- as long as they can demonstrate that the returns are necessary for an ongoing investigation.

That clause, according to this great piece by CNN's Jeanne Sahadi, could well lead to the eventual public disclosure of Trump's returns:

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What seems certain now: House Democrats will make a move to see Trump's taxes. Trump, who, I believe, thinks the release of the returns could do him real political harm, will fight like hell to keep them from doing so.

Who wins? No clue. But there's no question that we are closer to seeing Trump's tax returns today than we have been at any point since he began to run for president in 2015.

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iehi-feed-64392 Wed, 14 Nov 2018 01:39:11 GMT Britain and E.U. Agree on a draft Plan for Brexit http://implode-explode.com/viewnews/2018-11-13_BritainandEUAgreeonadraftPlanforBrexit.html Britain is scheduled to quit the European Union on March 29. The draft agreement, if approved, would at least avert the prospect of a disorderly and chaotic departure without any deal -- something that could clog ports and lead to shortages of food and some medicines.

If Mrs. May's cabinet signs off on the draft agreement, the next step is for European Union leaders to give it their blessing at a meeting at the end of the month.

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iehi-feed-64386 Sun, 11 Nov 2018 22:28:58 GMT Were GOP's House losses dramatically smaller than historical pattern? (A: NO) http://implode-explode.com/viewnews/2018-11-11_WereGOPsHouselossesdramaticallysmallerthanhistoricalpatternANO.html The Republicans did have to cope with many retirements, which in 2018 reached a high for Republicans going back at least as far as 1930. But Trump is wrong that the Republicans outperformed historical precedents. The losses were fairly average or worse than average.

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Indeed, if you look just at losses suffered under Republican presidents, the total for 2018 exceeds all but two midterms going back to the Great Depression. The 2018 total even edged out the losses under George W. Bush in 2006, which was the last time the Democrats re-took the House in a midterm election.

"This one was clearly pretty bad," said Alan Abramowitz, an Emory University political scientist.

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iehi-feed-64385 Sun, 11 Nov 2018 21:08:50 GMT Doug Noland: Back to Fundamentals http://implode-explode.com/viewnews/2018-11-11_DougNolandBacktoFundamentals.html For me, Back to Fundamentals means a return of "Periphery to Core Crisis Dynamics" - rising yields, widening Credit spreads, de-risking/deleveraging, faltering global liquidity and, to be sure, China... Odds are mounting that de-risking/deleveraging dynamics attain destabilizing momentum. Many hedge funds now have losses for the year, which forces managers to take down both risk and leverage in anticipation of year-end outflows. I believe deleveraging is having a growing impact on marketplace liquidity around the world - and across asset classes. Yields are rising and spreads are widening throughout global fixed-income. Unstable equities markets around the globe are indicating a fragile liquidity backdrop. And this week's $2.68 (4.3%) drop in WTI has all the appearances of a major leveraged speculating community panic liquidation (portending challenges for the - to this point - resilient junk bond market).

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At this point, I seriously doubt the Fed has a solid grasp of the (direct and indirect) sources of the Trillions of global liquidity that have flooded into U.S. securities and asset markets over the past decade. I take them at their word that they don't discern the degree of leverage that would typically indicate a Bubble. Yet this has been the most atypical of global Bubbles. I am not convinced the Fed knows where to look for the leverage most germane to today's global Bubble. And, I'm compelled to add, the whole world seems oblivious. Speculative deleveraging is not on the Fed's radar, and this is a problem for the markets.

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iehi-feed-64384 Sun, 11 Nov 2018 20:53:07 GMT Dark Money: Illuminated http://implode-explode.com/viewnews/2018-11-11_DarkMoneyIlluminated.html Since dark money changed politics as we know it in the post-Citizens United era, the top 15 dark money groups have spent more than $600 million in secret money in our elections.

These groups accounted for more than 75 percent of the $800-plus million spent by all dark money organizations between January 2010 and December 2016. They spent the majority of this money on negative attack ads, criticizing candidates from the shadows while purposefully hiding their donors and masquerading as trade associations or "social welfare" nonprofits.

"Dark Money Illuminated" profiles the top 15 dark money groups and shines light on approximately 400 donors and donor organizations who have funded these groups, including companies, trade associations and labor unions. Issue One created a searchable, first-of-its-kind database containing nearly 1,200 transactions linked to these donors, each supported by primary source documents.''

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iehi-feed-64383 Sun, 11 Nov 2018 20:18:46 GMT New York City Raids Condo Building in Crackdown on Airbnb Rentals http://implode-explode.com/viewnews/2018-11-11_NewYorkCityRaidsCondoBuildinginCrackdownonAirbnbRentals.html A team of New York City law-enforcement officers swarmed a Manhattan condominium last month, issuing 27 notices of violations for illegal hotel use in one of the largest crackdowns on short-term rentals such as those listed on Airbnb.

The raid at the Atelier, a 46-story Midtown luxury tower, may be a sign of what's to come. New York and other cities are seeking to limit short-term rentals that can run afoul of local laws designed to limit hotel-style stays in residential buildings.

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iehi-feed-64379 Fri, 09 Nov 2018 22:57:32 GMT Father of Z-Score Sees Bigger Bankruptcies in Next Downturn http://implode-explode.com/viewnews/2018-11-09_FatherofZScoreSeesBiggerBankruptciesinNextDownturn.html Edward Altman, who developed the Z-score method for predicting bankruptcies 50 years ago, says the next recession will be characterized by many more bankruptcies and defaults than in previous downturns, and the corporate failures will be larger than ever before.

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More firms that look like they are going bankrupt don't. Over the last 50 years, it's clear that the average company in the world is more leveraged using more debt than ever before. There was no leveraged-loan or junk-bond markets 50 years ago. Now, these are big dynamic markets available to many firms. They take advantage of it. Interest rates in the last ten year have been low and firms have been overjoyed to leverage their balance sheet to try to earn returns greater than the cost of capital. And the cost of capital, with the lower costs of interest rates, has come down.

... There is a dramatic increase in leveraged loans, in covenant-lite issuance. The defaults will not take place as quickly as they normally would because there are no easy triggers from these covenants. But when they do take place, the ultimate recovery when the firm emerges from Chapter 11 will be lower because the covenant-lite debt kicked the can down the road.

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iehi-feed-64378 Fri, 09 Nov 2018 22:27:43 GMT Minister Jo Johnson quits over Brexit and calls for new vote http://implode-explode.com/viewnews/2018-11-09_MinisterJoJohnsonquitsoverBrexitandcallsfornewvote.html A well-respected and liked member of the government, he has decided that what was promised to people during the referendum campaign is now so different to what is on the table that he has quit the government instead.

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He added: "This would not be about re-running the 2016 referendum, but about asking people whether they want to go ahead with Brexit now that we know the deal that is actually available to us, whether we should leave without any deal at all or whether people on balance would rather stick with the deal we already have inside the European Union.

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Mr Johnson is the sixth minister in Theresa May's government to resign specifically over Brexit, following David Davis, Boris Johnson, Philip Lee, Steve Baker and Guto Bebb.

For Labour, Shadow Brexit Minister Jenny Chapman said Mrs May had "lost all authority and is incapable of negotiating a Brexit deal within her own party, let alone with the EU".

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iehi-feed-64377 Fri, 09 Nov 2018 18:13:28 GMT Trump Administration Spares Corporate Wrongdoers Billions in Penalties http://implode-explode.com/viewnews/2018-11-09_TrumpAdministrationSparesCorporateWrongdoersBillionsinPenalties.html In the final months of the Obama administration, Walmart was under pressure from federal officials to pay nearly $1 billion and accept a guilty plea to resolve a foreign bribery investigation. Barclays faced demands that it pay nearly $7 billion to settle civil claims that it had sold toxic mortgage investments that helped fuel the 2008 financial crisis, and the Royal Bank of Scotland was ensnared in a criminal investigation over its role in the crisis.

The three corporate giants complained that the Obama administration was being unreasonable and stood their ground, according to people briefed on the investigations. After President Trump took office, they looked to his administration for a more sympathetic ear -- and got one.

Federal prosecutors and the Securities and Exchange Commission have yet to charge Walmart, and the Justice Department reached a much lower settlement agreement with Barclays in March, for $2 billion. R.B.S. paid a civil penalty, but escaped criminal charges altogether.

Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration's aggressive deregulatory agenda throughout the federal government.

The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:

- A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;

- A 72 percent decline in corporate penalties from the Justice Department's criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;

-A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump's Justice Department bringing 17 such cases, compared with 71.

Cool! This is all obviously helping the middle class and working poor (Trump's base, of course) -- not at all lining the pockets of the already mega-rich and powerful, no doubt.

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iehi-feed-64376 Fri, 09 Nov 2018 15:20:42 GMT The tragedy of Amazon's HQ2 selections, explained http://implode-explode.com/viewnews/2018-11-09_ThetragedyofAmazonsHQ2selectionsexplained.html America needs to find a way to do better than this. Being the home to a very large share of the world's most dynamic high tech companies is an incredible source of national strength, but in practical terms it does not benefit most Americans. With better policy it could.

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Over a decade ago, housing economists Janna Matlack and Jacob Vigdor investigated the economic impact of unequal economic development and found that "in tight housing markets, the poor do worse when the rich get richer."

A "tight" housing market, in this case, is a market like greater New York or greater Washington, where the cost of buying a house greatly exceeds the actual construction costs of new buildings. The problem in markets like this is that when the rich get richer -- say because a new office complex opens and hires 20,000 to 30,000 people for six-figure salaries -- the price of scarce housing rises.

If you actually get a job at Amazon or have the kind of job skills that you plausibly could get a job at Amazon, this will pay off for you because you'll end up with higher wages that more than equal the higher rent. But if you work in a restaurant or cut hair or clean houses or a drive cab, you'll probably end up worse off.

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iehi-feed-64372 Thu, 08 Nov 2018 21:23:15 GMT Fed leaves rates unchanged, notes slowing in business investment http://implode-explode.com/viewnews/2018-11-08_Fedleavesratesunchangednotesslowinginbusinessinvestment.html The policymaking Federal Open Market Committee, as expected, unanimously approved keeping the federal funds rate in a range of 2 percent to 2.25 percent. Markets figured the central bank would hold the line at this meeting and probably approve a quarter-point hike in December, which would be the fourth of the year.

... the statement noted that the "growth of business fixed investment has moderated from its rapid pace earlier in the year." There was no detail or data given for why officials see investment declining, though companies reported during third-quarter earnings season that some of their investment plans have been curtailed due to the ongoing trade war between the U.S. and China.

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iehi-feed-64369 Thu, 08 Nov 2018 02:45:38 GMT California rejected rent control, but Sacramento may do it http://implode-explode.com/viewnews/2018-11-07_CaliforniarejectedrentcontrolbutSacramentomaydoit.html Prop. 10. would have overturned the state's Costa Hawkins Rental Housing Act, which bans local governments from imposing rent control on any apartment built since 1995. It also bans rent control as well on any single-family residence that is being used as a rental unit.

Had Prop. 10 passed, the Sacramento effort would have covered all renters throughout the city.

Instead, the Sacramento rent control initiative likely will affect about 72 percent of the city's 106,000 rental units, based on numbers from the city of Sacramento rental housing inspection program, Pariset said...

The proposal, called the "Sacramento Community Stabilization and Fair Rent Charter Amendment," stipulates that annual allowable rent increases could range from a maximum of 2 percent per year up to a maximum of 5 percent each year.

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iehi-feed-64363 Tue, 06 Nov 2018 20:50:09 GMT Over 30 Goldman Sachs execs, top bosses reviewed 1MDB deals (LEGAL COSTS COULD TOP $1.8B) http://implode-explode.com/viewnews/2018-11-06_Over30GoldmanSachsexecstopbossesreviewed1MDBdealsLEGALCOSTSCOULD.html ``Over 30 Goldman Sachs executives including bank boss David Solomon and his predecessor, Lloyd Blankfein reviewed the 1Malaysia Development Berhad (1MDB) deals, according to sources familiar with the approval process.

The Financial Times reported the Wall Street bank helped 1MDB sovereign wealth fund sell about RM27.06 bil (US$6.5bil) of bonds between 2012 and 2013, two years before Malaysian police raided 1MDB's offices to investigate allegations of massive fraud. 

In a 2016 indictment, the US Department of Justice alleged that much of the money raised with Goldman's help was siphoned off by Low Taek Jho, who funnelled it into everything from Beverly Hills properties to Van Gogh paintings.

The report added that DoJ, which is still exploring what sanctions if any Goldman should face, has brought criminal charges against former Goldman bankers Tim Leissner and Roger Ng in connection with the deal.

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In a filing to the Securities and Exchange Commission on Friday (Nov 2), the Wall Street firm estimated that possible losses related to litigation proceedings could run as high as $1.8bil (RM7.49 bil) above its total reserves for such matters. Previously, Goldman estimated litigation losses to be in an excess of $1.5bil (RM6.24 bil).

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iehi-feed-64357 Sun, 04 Nov 2018 16:27:04 GMT The Citizenship Clause Means What It Says http://implode-explode.com/viewnews/2018-11-04_TheCitizenshipClauseMeansWhatItSays.html ``Trump, Anton, and their enablers are relying on phony history and altered documents in an attempt to change the American constitutional order... Those who don't want to take my word for it can consult this essay by James C. Ho, a conservative "originalist" who was recently appointed to the U.S. Court of Appeals for the Fifth Circuit by Donald Trump. Ho and I agree on little except this: The citizenship clause means what it says.''

There's essentially no doubt it would take a constitutional amendment to change "birthright citizenship". A debate on that isn't unreasonable; what is unreasonable is Trump's belief he can change something so fundamental by fiat, illegally, in a way that explicitly end-runs around the core checks and balances of our government. There's definitely a word for that...

Besides, there is little evidence (if any) that "anchor babies" are creating an immigration problem. Immigrants will readily leave their US-born children behind, as US-born babies don't actually provide any "anchor" for the parents. So, what's the anger about? The kids who are born in the US? How are they not Americans?

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iehi-feed-64355 Fri, 02 Nov 2018 22:49:12 GMT Trump administration to reinstate all Iran sanctions http://implode-explode.com/viewnews/2018-11-02_TrumpadministrationtoreinstateallIransanctions.html iehi-feed-64354 Fri, 02 Nov 2018 20:30:25 GMT Stocks fall after wild session as conflicting trade news keeps investors guessing http://implode-explode.com/viewnews/2018-11-02_Stocksfallafterwildsessionasconflictingtradenewskeepsinvestorsgu.html When asked whether the president explicitly requested his top advisors to drum up a trade deal, Kudlow said "no." ... Kudlow's remarks contradicted a Bloomberg report from earlier on Friday that said Trump had asked officials to prepare a draft for a U.S.-China trade deal.

"It's still all about trade," said JJ Kinahan, chief market strategist at TD Ameritrade. "Most of the trading we're seeing is related to earnings or trade."

"The recent moves we're seeing are reflect a return to more historical levels of volatility," said Kinahan. "I don't think this will abate."

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"Today's stronger than expected October employment report was a mixed bag for stocks," said Alec Young, managing director of global markets research at FTSE Russell. "On the positive side, strong job growth will allay fears of slowing economic growth. However, with wages up 3.1 percent year over year ... it will be more difficult for the Fed to slow its rate hiking campaign."

The Fed doesn't care about the economy "overheating" (especially since they know Trump would be pleased as punch about that) -- all the fundamental economic data does is provide them cover for (or an inconvenience with respect to) unwinding their giant post-crisis balance sheet.

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iehi-feed-64351 Wed, 31 Oct 2018 20:47:40 GMT ‘Godfather' of chart analysis says ‘damage done to the stock market' is much, much worse' than anyone is talking about http://implode-explode.com/viewnews/2018-10-31_Godfatherofchartanalysissaysdamagedonetothestockmarketismuchmuch.html Acampora cited a break down of so-called FANG stocks--a quartet of technology and internet-related companies that include Facebook Inc. FB, +0.16% Amazon.com Inc. AMZN, +0.12% Netflix Inc. NFLX, +5.59% and Google-parent Alphabet Inc. GOOGL, -0.05% --as the clearest sign that the worm has turned on the bull market.

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"I've been a bull for a long, long time and like everyone, I was waiting for a correction but this is something different," said Acampora, who many chartists refer to as the "godfather" of technical analysis.

"All the leadership is getting crushed," he said.

Acampora said he believed that the entire stock market itself would go into a bear market and said the current dynamic in the market was eerily similar to the stock-market crash of 1987, when the Dow slide a historic 22.6% in a single day on Oct. 19 of that year.

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Acampora isn't alone in his bearish view. Michael Wilson, Morgan Stanley's chief U.S. equity strategist, said he believes the market is undergoing a "rolling bear market." He was among the first to spot fractures in the market's uptrend.

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iehi-feed-64348 Wed, 31 Oct 2018 00:22:17 GMT Trump encouraged vulnerable consumers to invest in sham businesses, lawsuit says http://implode-explode.com/viewnews/2018-10-30_Trumpencouragedvulnerableconsumerstoinvestinshambusinesseslawsui.html iehi-feed-64346 Tue, 30 Oct 2018 13:42:52 GMT The U.S. Secretly Halted JPMorgan's Growth for Years (GETS GREEN-LIGHT UNDER TRUMP) http://implode-explode.com/viewnews/2018-10-30_TheUSSecretlyHaltedJPMorgansGrowthforYearsGETSGREENLIGHTUNDERTRU.html In actions never before made public, Obama administration regulators prevented the bank from opening branches in new states as punishment for violating banking rules, according to people familiar with the matter. JPMorgan's ambitious plan to expand nationally, announced earlier this year, was made possible by the Trump administration's rollback of those restraints, which date from 2012, said the people, who asked not to be identified discussing regulators' impact on the bank's plans.

JPMorgan has racked up more than $30 billion in penalties, legal costs and related obligations since the 2008 financial crisis, some of which stemmed from its acquisitions of Bear Stearns Cos. and Washington Mutual Inc. Missteps include excessive risk taken by the London Whale trader and failing to flag transactions related to Bernard Madoff's Ponzi scheme. Privately, the U.S. Office of the Comptroller of the Currency stopped JPMorgan from expanding into additional states while resolving compliance breakdowns as part of an unwritten regulatory policy, the people said.

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