Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65374 Wed, 03 Jun 2020 20:59:55 GMT Trump's Invocation of Occupy Wall Street In Call To Governors Misses ALL The Points http://implode-explode.com/viewnews/2020-06-03_TrumpsInvocationofOccupyWallStreetInCallToGovernorsMissesALLTheP.html In the call with Governors, Trump invoked the Occupy Wall Street movement... This is the mind of the President of the free world. Protesters attempting to realign their corrupted democracy while braving snow and ice living in tents on the sidewalks of lower Manhattan (following the greatest bank looting in U.S. history by Wall Street executives) have committed the ultimate crime of getting free pizza delivery.

As most Americans now realize, the President regularly relies on "alternative facts" to make his arguments. Wall Street On Parade covered the Occupy Wall Street protests. Wall Street was not "closed up" and there was no "total domination" of Wall Street. The stock exchange traded every single business day. Wall Street banks went merrily about their business of ripping off two-thirds of average folks 401(k) plans. Local residents came and went on the sidewalks, often delivering home-made meals to the protesters.

The protesters were not "there forever." The occupation of Zuccotti Park by Occupy Wall Street lasted from September 17, 2011 to November 15, 2011. Two months of peaceful protest. The brutal military-style raid and destruction of the protesters' camp left a lasting stain on the reputation of New York City and Mayor Michael Bloomberg.

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iehi-feed-65371 Sun, 31 May 2020 04:14:25 GMT America Is a Tinderbox http://implode-explode.com/viewnews/2020-05-31_AmericaIsaTinderbox.html So many things make America combustible right now: mass unemployment, a pandemic that's laid bare murderous health and economic inequalities, teenagers with little to do, police violence, right-wingers itching for a second civil war and a president eager to pour gasoline on every fire. "I think we're indeed in a moment where things are going to get a lot more tense before they get more peaceful," said the University of Michigan historian Heather Ann Thompson, who won the Pulitzer Prize for her 2016 book "Blood in the Water: The Attica Prison Uprising of 1971 and Its Legacy."

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These demonstrations were sparked by specific instances of police violence, but they also take place in a context of widespread health and economic devastation that's been disproportionately borne by people of color, especially those who are poor. "Sociologists have studied collective behavior, urban unrest for decades, and I think it's safe to say that the consensus view is that it's never just about a precipitating incident that resulted in the unrest," Darnell Hunt, dean of social sciences at U.C.L.A., told me. "It's always a collection of factors that make the situation ripe for collective behavior, unrest and mobilization."

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iehi-feed-65365 Thu, 21 May 2020 02:47:23 GMT 'Major reallocation shock' from coronavirus will see 42% of lost jobs evaporate, study says http://implode-explode.com/viewnews/2020-05-20_Majorreallocationshockfromcoronaviruswillsee42oflostjobsevaporat.html Permanent job losses are likely to be a feature of the eventual U.S. recovery, according to University of Chicago research, which estimates that 42% of recently unemployed workers will not return to their jobs amid the "profound" shock stemming from coronavirus lockdowns.

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researchers at the U of C's Becker Institute for Economics have painted a dour picture of the labor market reallocating those lost positions. Calling the crisis a "major reallocation shock" across all major economic sectors, the authors found that for every 10 coronavirus-induced job losses, only 3 were created.

Some employers -- primarily Amazon (AMZN) and Walmart (WMT) -- have hired en masse to deal with temporary demand spikes, yet the Chicago study suggests positions created during the COVID-19 crisis are unlikely to offset the labor market's extreme bloodletting.

The lockdowns have cratered activity in an economy that consists of 70% consumer spending, while undoing all of the jobs created since the great recession ended.

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Although the pandemic is perceived as a "one-off" event -- albeit a big one -- economists are warning the impending changes to the economy will result in long-term behavioral shifts, and likely to see mass bankruptcies.

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iehi-feed-65361 Sun, 17 May 2020 17:13:08 GMT 'They are angry': Pandemic and economic collapse slam Trump across Rust Belt http://implode-explode.com/viewnews/2020-05-17_TheyareangryPandemicandeconomiccollapseslamTrumpacrossRustBelt.html iehi-feed-65359 Fri, 15 May 2020 19:05:22 GMT Manhattan Faces a Reckoning if Working From Home Becomes the Norm http://implode-explode.com/viewnews/2020-05-15_ManhattanFacesaReckoningifWorkingFromHomeBecomestheNorm.html ... now, as the pandemic eases its grip, companies are considering not just how to safely bring back employees, but whether all of them need to come back at all. They were forced by the crisis to figure out how to function productively with workers operating from home -- and realized unexpectedly that it was not all bad.

If that's the case, they are now wondering whether it's worth continuing to spend as much money on Manhattan's exorbitant commercial rents. They are also mindful that public health considerations might make the packed workplaces of the recent past less viable.

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iehi-feed-65356 Wed, 13 May 2020 16:36:57 GMT Bankruptcy courts ill-prepared for tsunami of people going broke from coronavirus shutdown http://implode-explode.com/viewnews/2020-05-13_Bankruptcycourtsillpreparedfortsunamiofpeoplegoingbrokefromcoron.html iehi-feed-65355 Mon, 11 May 2020 22:19:01 GMT I've Seen Trump's Tax Returns and You Should, Too http://implode-explode.com/viewnews/2020-05-11_IveSeenTrumpsTaxReturnsandYouShouldToo.html Sometimes a tweet is just a tweet. And sometimes it's an advertisement for your business. And sometimes, when the president of the United States promotes his business on Twitter while overseeing the federal response to a pandemic gutting the economy, it's a financial conflict of interest.

Is Trump pushing businesses to reopen despite ongoing perils attached to the coronavirus because it's best for the country? Or is it because Covid-19 has battered his family's fortunes? Or is it simply because he has the upcoming presidential election in mind? Who knows. But we are more than three years into this presidency and the same questions that have hung over Trump from the moment he launched his bid for the White House still linger: What are the contours of his personal finances and how do they inform his actions and policies?

On Tuesday, the Supreme Court will help shape our understanding of some of this when it hears arguments involving efforts by Congress and a New York prosecutor to get access to Trump's tax returns, bank documents and bookkeeping records.

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Trump sued me for libel in 2006 for a biography I wrote, "TrumpNation," claiming the book unfairly and intentionally misrepresented his track record as a businessman and lowballed the size of his fortune. The suit was dismissed in 2011.

During the course of the litigation, Trump resisted releasing his tax returns and other financial records. My lawyers got the returns, and while I can't disclose specifics, I imagine that Trump is hesitant to release them now because they would reveal how robust his businesses actually are and shine a light on some of his foreign sources of income.

Deutsche Bank AG, one of the firms Trump's lawyers are trying to stifle in their arguments before the Supreme Court, also turned over documents in my case -- including its own assessment of Trump's wealth that pegged his fortune at $788 million in 2004, well below the $3 billion he told them he had at the time. Deutsche is the only major global bank to have continued doing business with Trump since the early 1990s and is conversant with his financial comings and goings since then.

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iehi-feed-65354 Mon, 11 May 2020 17:38:40 GMT Small Businesses Counting on Loan Forgiveness Could Be Stuck With Debt http://implode-explode.com/viewnews/2020-05-11_SmallBusinessesCountingonLoanForgivenessCouldBeStuckWithDebt.html With thousands of businesses preparing to ask for their eight-week loans to be forgiven, banks and borrowers are just now beginning to realize how complicated the program may turn out to be. Along with lawmakers, they are pushing the Treasury Department, which is overseeing the loan fund, to make forgiveness requirements easier to meet.

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"Virtually every small business borrower believes that this will be forgiven," said Paul Merski, a lobbyist for the Independent Community Bankers of America. "They took it out assuming that it would be a grant but it's not -- you have to abide by very complex rules and regulations on how this is spent."

One of the biggest stumbling blocks is a requirement that businesses allocate 75 percent of the loan money to cover payroll costs, with only 25 percent allowed for rent, utilities and other overhead. That has become more difficult as the economic crisis from the virus drags on and as some businesses face a prolonged period of depressed sales, even once they reopen.

Some businesses are facing smaller payroll expenses because workers have opted to accept more generous unemployment insurance benefits, while only a handful of states have so far allowed businesses to reopen.

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iehi-feed-65348 Fri, 08 May 2020 15:12:18 GMT Coronavirus costs the U.S. 20.5 million jobs in April as unemployment soars to 14.7% http://implode-explode.com/viewnews/2020-05-08_CoronaviruscoststheUS205millionjobsinAprilasunemploymentsoarsto1.html If millions of Americans who have been furloughed and expect to return to their jobs are counted, the Bureau of Labor Statistics said the jobless rate would have almost 5 percentage points higher at nearly 20%.

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Although the April employment report paints an ugly portrait of the U.S. labor market, the devastation runs even deeper than the official statistics show.

For one thing, some of the people who are still getting paid by their companies but aren't working probably were not included in the jobless rate. Others have stopped looking for work and dropped out of the labor force because there are no jobs. They would not be counted in the official jobless rate, either. And with many companies closed or going out of business, the response rate to the government's survey was lower than usual.

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iehi-feed-65345 Tue, 05 May 2020 21:06:07 GMT Big Banks and Fossil Fuel Industry Poised to Get Bailed Out Under Fed's "Main Street" Lending Program http://implode-explode.com/viewnews/2020-05-05_BigBanksandFossilFuelIndustryPoisedtoGetBailedOutUnderFedsMainSt.html ``We've walked down plenty of Main Streets in America: in West Virginia, downstate and upstate New York, New Hampshire, Connecticut, Florida and in ski towns from coast to coast. We've seen plenty of boutique gift shops, family-owned restaurants and ice cream parlors, hair and nail salons, sole-proprietor bake shops, and locally-owned breweries. What we've never seen on any of these streets is a shop or restaurant with "15,000 employees or up to $5 billion in annual revenue" or one that needed to refinance $200 million in debt. And yet, that describes businesses that will be able to apply for loans under the Fed's "Main Street" Expanded Lending Program that has been approved by both Treasury Secretary Mnuchin and Fed Chair Powell.

You have to ask yourself this: if this was really about helping Main Street, why wouldn't that $750 billion have simply been added to the Paycheck Protection Program (PPP) which is restricted to businesses with 500 or fewer employees -- the Small Business Administration's definition of a small business? The second round of funding to that program by Congress is likely to run out sometime this week. Just under half of all American workers are employed by a small business that has less than 500 workers according to the most recent government data.

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"The Federal Reserve today unveiled an expanded ‘Main Street' business lending program that could allow failing, highly indebted oil and gas companies to borrow money at low rates. In doing so, the Fed heeded a call by U.S. Sen. Ted Cruz (R-Texas) as well as fracking companies to make it easier for oil and gas companies to refinance their debts. The Fed's new program rules drop an earlier restriction on refinances.

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iehi-feed-65344 Tue, 05 May 2020 20:58:42 GMT Billionaire Sam Zell Sees Economy Permanently Scarred by Pandemic http://implode-explode.com/viewnews/2020-05-05_BillionaireSamZellSeesEconomyPermanentlyScarredbyPandemic.html ``"How soon will anybody get on an airplane? How soon will anybody stay in a hotel? How soon will anybody go to a mall?" he asked. "The fact that these places may be open doesn't necessarily mean that they'll be doing business."

Nothing to Buy

Zell disagrees with the conventional wisdom that big cities like New York are doomed and warehouses are the smartest bet in commercial real estate.

For now, the raspy-voiced investor who earned his nickname, the Grave Dancer, buying distressed real estate in the 1970s, is watching from the sidelines. Like Warren Buffett, Zell hasn't found anything to buy since the onset of the pandemic. Part of the problem is a lack of deals.

"Those sellers that wanted to sell still remember the prices that were available seven or eight weeks ago. The buyers are looking at a very different world and expecting to see significant discounts," he said. "When you've got that big a spread, nothing happens."

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Shares of [his] real estate investment trust [Equity Residential], one of the biggest apartment owners in the U.S., are down almost 30% since late February. Rents, however, are holding up well enough that Zell said he doesn't expect any significant changes in monthly collections.

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For years, Zell has been warning that the U.S. construction boom would result in oversupply and lower prices, and the current shutdown "is going to dramatically make things much worse."

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iehi-feed-65343 Tue, 05 May 2020 00:38:21 GMT Negative Interest Rates: Will Donald Trump And The Fed Destroy The U.S. Banking System? http://implode-explode.com/viewnews/2020-05-04_NegativeInterestRatesWillDonaldTrumpAndTheFedDestroyTheUSBanking.html iehi-feed-65342 Tue, 05 May 2020 00:26:30 GMT The Coronavirus Depression - How America Locked Itself Into Economic Devastation http://implode-explode.com/viewnews/2020-05-04_TheCoronavirusDepressionHowAmericaLockedItselfIntoEconomicDevast.html iehi-feed-65340 Sun, 03 May 2020 15:09:12 GMT As Airbnb income vanishes, overextended homeowners struggle to avoid foreclosure http://implode-explode.com/viewnews/2020-05-03_AsAirbnbincomevanishesoverextendedhomeownersstruggletoavoidforec.html Smaller players have spent hundreds of thousands of dollars each buying homes for short-term rentals. Jennifer Kelleher-Hazlett of Clawson, Mich., spent about $380,000 to buy two Michigan properties in 2018. She said she and her husband cashed out their financial investments and borrowed $100,000 from employers to furnish them.

The 47-year-old expected to net up to $7,000 a month from Airbnb after mortgage payments, supplementing her income as a part-time pharmacist and her husband's as a schoolteacher. Before the virus struck, the couple was considering buying more homes. Now, they can't make mortgage payments because no one is booking, she said. "We're either borrowing more or defaulting."

What makes Airbnb such an appealing prospect is that payoff. At up to $7,000 a month, Kelleher-Hazlett and her husband likely, and reasonably, in the Before COVID-19 times, to recoup their initial investment and pay off their bosses in less than three years. Now they're on the verge of losing everything.

Larger players, such as Jennifer and David Landrum of Atlanta, who are on the hook for 39 properties while tourism and the city's ever-growing entertainment industry are at a halt, are on the verge of selling their house to make ends meet. What an ironic horror.

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iehi-feed-65339 Sun, 03 May 2020 14:51:53 GMT Reopening Has Begun. No One Is Sure What Happens NexT http://implode-explode.com/viewnews/2020-05-03_ReopeningHasBegunNoOneIsSureWhatHappensNexT.html ``"I don't think it was really the government shutdown orders that shut down the economy -- I think it was the virus that shut down the economy," Mr. Vavra said. "Saying the economy is now opened is just lip service. The economy's not going to be reopened until people want it to reopen."

So far, there is little evidence that the public is ready. Despite scattered protests, surveys show widespread support for shutdown orders and little appetite for a rapid return. A recent Wall Street Journal/NBC News poll found that most Americans were more worried about lifting restrictions too early than keeping them in place too long.

"There's no restaurateur in the country that believes that when the government says ‘Go,' the restaurants will be packed again," Mr. Smith said.

... economists say the government's role is only beginning. Businesses will need help weathering a period of reduced sales. State and local governments will need help, too, or they will have to cut programs to offset a sharp drop in tax revenue. Individuals will need unemployment benefits, food assistance and other aid to make ends meet in a recession that will almost certainly outlast the pandemic.

The scope of those problems isn't yet clear. No one knows how many businesses have failed permanently, rather than shut down temporarily, or how many laid-off workers will be able to return to their old jobs. But the longer the shutdown lasts, the more permanent the damage will be, and the slower the rebound.

"You can press pause for a period of time, but not too long before that becomes bad loans and defaults and so on," said Shubham Singhal, a senior partner at McKinsey, the consulting firm. "Then you have the negative cycle that feeds on itself for a while."

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iehi-feed-65338 Sun, 03 May 2020 00:23:48 GMT 'Heads we win, tails you lose': how America's rich have turned pandemic into profit http://implode-explode.com/viewnews/2020-05-02_HeadswewintailsyoulosehowAmericasrichhaveturnedpandemicintoprofi.html Never let a good crisis go to waste: as the coronavirus pandemic sweeps the world, America's 1% have taken profitable advantage of the old saying. Some of the richest people in the US have been at the front of the queue as the government has handed out trillions of dollars to prop up an economy it shuttered amid the coronavirus pandemic. At the same time, the billionaire class has added $308bn to its wealth in four weeks - even as a record 26 million people lost their jobs.

According to a new report from the Institute for Policy Studies, a progressive thinktank, between 18 March and 22 April the wealth of America's plutocrats grew 10.5%. After the last recession, it took over two years for total billionaire wealth to get back to the levels they enjoyed in 2007.

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The billionaire bonanza comes as a flotilla of big businesses, millionaires and billionaires sail through loopholes in a $349bn bailout meant to save hard-hit small businesses. About 150 public companies managed to bag more than $600m in forgivable loans before the funds ran out. Among them was Shake Shack, a company with 6,000 employees valued at $2bn. It has since given the cash back but others have not.

Fisher Island, a members-only location off the coast of Miami where the average income of residents is $2.2m and the beaches are made from imported Bahamian sand, has received $2m in aid.

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The banks that were the largest recipients of bailout cash in the last recession have also done well, raking in $10bn in fees from the government loans, according to an analysis by National Public Radio... [but at the same time,] By 2016 -- seven years after the end of the last recession -- the bottom 90% of households in the US had still not recovered from the last downturn while the top 10% had more wealth than they had in 2007.

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iehi-feed-65336 Fri, 01 May 2020 22:56:45 GMT COVID-19's Income Truth: Real-time losses are worse than they appear from unemployment numbers http://implode-explode.com/viewnews/2020-05-01_COVID19sIncomeTruthRealtimelossesareworsethantheyappearfromunemp.html iehi-feed-65334 Fri, 01 May 2020 01:39:20 GMT Pelosi Says States and Cities Seek $1 Trillion in Next Stimulus http://implode-explode.com/viewnews/2020-04-30_PelosiSaysStatesandCitiesSeek1TrillioninNextStimulus.html iehi-feed-65333 Thu, 30 Apr 2020 15:47:17 GMT US G.D.P. Declined in First Quarter, With Worse to Come http://implode-explode.com/viewnews/2020-04-30_USGDPDeclinedinFirstQuarterWithWorsetoCome.html U.S. gross domestic product, the broadest measure of goods and services output, fell at a 4.8 percent annual rate in the first quarter of the year, the Commerce Department said Wednesday. That is the first decline since 2014, and the worst quarterly contraction since 2008, when the country was in a deep recession.

There is much worse to come. Widespread layoffs and business closings didn't hit until late March in most of the country. Economists expect figures from the current quarter, which will capture the shutdown's impact more fully, to show that G.D.P. contracted at an annual rate of 30 percent or more, a scale not seen since the Great Depression.

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"You could lift the restrictions tomorrow and the economy would still not come back if people don't feel safe to go out," she said. As a result, "measures that we normally consider to be public health measures are in this case a really important component of the economic policy response."

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"If we could be told right now with confidence that on X date, whenever X date is, the virus will be gone -- if we knew that now, I think businesses could plan accordingly and could make the right calculations," said Ms. Sinclair, the economist. "The problem is that we don't have that certainty, and there's no way to have that certainty. There's no way to promise when we can restart, and that uncertainty is what's killing our ability to do good economic policy."

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iehi-feed-65332 Thu, 30 Apr 2020 15:36:09 GMT Fed expanding the scope of Main Street lending program to include bigger businesses http://implode-explode.com/viewnews/2020-04-30_FedexpandingthescopeofMainStreetlendingprogramtoincludebiggerbus.html Touted as one of the cornerstone's the Fed's initiatives to get money to businesses and households in need, the Main Street program now will allow companies with up to 15,000 employees and $5 billion in revenue to apply for financing.

That's up from the previous limit of 10,000 workers and $2.5 billion in revenue for a program targeted at medium-sized firms whose operations have been hamstrung by the social distancing efforts put into place to limit the spread of the coronavirus.

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