Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63647 Mon, 19 Feb 2018 18:00:13 GMT Goldman Sachs raises a red flag over U.S. government spending http://implode-explode.com/viewnews/2018-02-19_GoldmanSachsraisesaredflagoverUSgovernmentspending.html U.S. fiscal policy is headed for "uncharted territory."That's how a team of economists at Goldman Sachs, led by Jan Hatzius, have described the government's current spending and tax plans, as they also warned that the growth kick for the economy from those strategies will eventually fade.

"Congress has voted twice in the last two months to substantially expand the budget deficit despite an already elevated debt level and an economy that shows no need for additional fiscal stimulus," said the Goldman economists. Tax cuts signed into law by U.S. President Donald Trump in December will add $1.5 trillion to the deficit over a 10-year period.

Goldman economists expect the U.S. [deficit] level to hit 5.2% of gross domestic product by 2019, and keep climbing gradually from there. In the past, a strengthening economy and rising debt burden has prompted Congress to raise taxes and cut spending. But this time, the opposite has occurred, which will leave revenues low for a few years and push spending to its "highest point in decades," they said.

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iehi-feed-63645 Mon, 19 Feb 2018 17:43:02 GMT Bitcoin price hits $11,000 for the first time since January http://implode-explode.com/viewnews/2018-02-19_Bitcoinpricehits11000forthefirsttimesinceJanuary.html The price of the cryptocurrency went as high as $11,279.18 on Sunday, its most elevated level since January 30, according to CoinDesk's bitcoin price index, which tracks prices from four major cryptocurrency exchanges... Bitcoin is up over 80 percent since it bottomed at $5.947.40 on February 6.

In South Korea, a key market for bitcoin, there were fears that an outright ban on cryptocurrency trading could come into effect. But as new measures were implemented, they were less strict than investors thought, and many sounded a positive note.

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iehi-feed-63641 Sun, 18 Feb 2018 18:25:37 GMT Wall Street's Regulators Move Deeper Into Darkness Under Trump http://implode-explode.com/viewnews/2018-02-18_WallStreetsRegulatorsMoveDeeperIntoDarknessUnderTrump.html ... All of the above [failures of transparency in the wake of the 2008 Financial Crisis] occurred under the Obama administration. It's getting worse under President Trump. Yesterday Bloomberg News reported that the SEC is now settling cases against banks and hedge funds without issuing press releases as it has historically done, ostensibly to save the firms embarrassment and deny the public the ability to see that wrongdoing continues unabated on Wall Street despite the huge fines following the financial crash. Last month, Susan Antilla and Gary Rivlin wrote an in-depth report for The Intercept showing how Trump's SEC is allowing more secrecy in what Wall Street itself has to report to the public.

Now the U.S. Treasury, headed by the former foreclosure king, Steve Mnuchin, has announced it plans to hold a secret meeting of the Financial Stability Oversight Council (F-SOC) next Wednesday, February 21. F-SOC was created under the Dodd-Frank financial reform legislation of 2010 to make sure the financial collapse of 2008 would never happen again. That collapse was the worst economic event for the United States since the Great Depression of the 1930s. Given the financial devastation to citizens from that collapse, the public has every right to know about any new financial stability threats facing the nation.

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[Meanwhile,] the 24/7 cable news programs are consumed with investigating Russia. We're not saying that's not important but it's happening while nothing is being reported about the growing dangers on Wall Street. The Republican-led Congress is consumed with funding wars against foreign terrorists. But it was neither Russia nor foreign terrorists that dealt America the two worst financial and economic crises in its history: the 1929-1932 and 2008-2010 Wall Street collapses and ensuing economic calamities. These occurred from well-documented illegal acts by Wall Street firms as their Federal regulators wore blindfolds.

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iehi-feed-63638 Sun, 18 Feb 2018 01:00:19 GMT China Warns It May Retaliate If U.S. Imposes Metal Tariffs http://implode-explode.com/viewnews/2018-02-17_ChinaWarnsItMayRetaliateIfUSImposesMetalTariffs.html China said proposed U.S. tariffs on imported steel and aluminum products are groundless and that it reserves the right to retaliate if they are imposed.

The U.S. recommendations, unveiled by the Commerce Department on Friday, aren't consistent with the facts, Wang Hejun, chief of the trade remedy and investigation bureau at China's Ministry of Commerce, said in a statement posted on its website.

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"If the final decision impacts China's interests, China will certainly take necessary measures to protect its own rights," Wang said.

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Rather than tariffs on all imports, Trump may opt for a more "surgical" approach, Ross suggested at a meeting with lawmakers this week. On steel, for example, the president could go with the recommended option that would levy a tariff of 53 percent on imports from 12 countries -- a list that includes China, Russia, India and South Korea -- but allow exemptions for allies such as Japan, Germany and Canada.

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iehi-feed-63637 Sat, 17 Feb 2018 16:32:37 GMT Telegram has raised an initial $850M for its billion-dollar ICO... Before the ICO http://implode-explode.com/viewnews/2018-02-17_Telegramhasraisedaninitial850MforitsbilliondollarICOBeforetheICO.html This initial sum is most likely the pre-sale stage of the ICO which, as TechCrunch reported on extensively and in detail last month, was targeted at venture capital firms and top figures in the investment community who were given deep discounts to buy Telegram's Gram token. The pre-sale was originally targeted at raising $600 million, but demand pushed the figure up to $850 million, according to a Bloomberg report.

Telegram initially planned to raise a further $600 million to develop its TON project via a public sale that starts in March, according to documents seen by TechCrunch, but it remains to be seen whether that figure will be adjusted. Bloomberg previously suggested the public sale component would expand to $1.15 billion, bringing the total raised to nearly $2 billion if successful.

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iehi-feed-63635 Thu, 15 Feb 2018 22:18:17 GMT Second Federal Appeals Court, Ruling Against Travel Ban 3.0, Just Said Trump's Tweets Show He's An Anti-Muslim Bigot http://implode-explode.com/viewnews/2018-02-15_SecondFederalAppealsCourtRulingAgainstTravelBan30JustSaidTrumpsT.html In a 9-4 ruling, the [4th circuit] federal appeals court held that the third version of Trump's travel ban ― which limited visitors from six majority-Muslim countries as well as two other nations ― was likely unconstitutional. It was the second federal appeals court to find that Trump's third travel ban was likely unconstitutional, but both rulings have been put on hold until the U.S. Supreme Court hears oral arguments in the matter this spring.

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While Trump could have "removed the taint of his prior troubling statements," he hasn't, the court said. "In fact, instead of taking any actions to cure the ‘taint' that we found infected [the second executive order laying out a travel ban], President Trump continued to disparage Muslims and the Islamic faith," it said.

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iehi-feed-63634 Thu, 15 Feb 2018 22:15:06 GMT Donald Trump 'Strongly' Favors Imposing Online Sales Tax, Mnuchin Says http://implode-explode.com/viewnews/2018-02-15_DonaldTrumpStronglyFavorsImposingOnlineSalesTaxMnuchinSays.html President Donald Trump "feels strongly" that the U.S. should impose a sales tax on purchases made over the Internet, Treasury Secretary Steven Mnuchin said Thursday.

Mnuchin, speaking at a hearing before the House Ways and Means Committee, said he has spoken personally with Trump about the issue, and that the president "does feel strongly" that the tax should be applied.

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Amazon began collecting sales taxes on purchases in all states that levy them earlier last year, despite an exemption that allows online retailers to avoid collecting them in places where they don't have a physical presence. But Amazon still avoids charging shoppers sales taxes when they buy from one of its third-party vendors -- sales that make up about half the company's volume... The Supreme Court [has] said states couldn't require out-of-state retailers to collect sales taxes from consumers unless those retailers had a physical presence -- through branches, warehouses or employees -- where the consumers were located.

Kind of ironic that just to "get" Jeff Bezos, Trump would essentially negate the meagre value of the tax cuts he endorsed on the non-wealthy...

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iehi-feed-63633 Wed, 14 Feb 2018 23:10:24 GMT Terrified of Bitcoin, banks forced to innovate for the first time in 40+ years http://implode-explode.com/viewnews/2018-02-14_TerrifiedofBitcoinbanksforcedtoinnovateforthefirsttimein40years.html The rapid rise of Bitcoin and other cryptocurrencies proved to the banking system that it's possible to conduct real-time [or near-real-time] transactions, and not have to wait 2-5 days for a payment to clear.

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When the CEO of the company launching RTP in the US announced the platform, he admitted that the "RTP system will be the first new payments system in the U.S. in more than 40 years."

That's utterly pathetic. The Internet has been around for 25 years. Even PayPal is nearly 20 years old.

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iehi-feed-63630 Wed, 14 Feb 2018 21:12:21 GMT Rumors Grow that the U.S. Fed is Propping Up the Stock Market http://implode-explode.com/viewnews/2018-02-14_RumorsGrowthattheUSFedisProppingUptheStockMarket.html According to a research report released last week by BNY Mellon in collaboration with the University of Cambridge's Judge Business School, 39 percent of central banks surveyed are now investing in stocks and 72 percent "reported use of derivatives as part of their investment management activities." It is likely that interest rate swaps are the more common derivatives being used by central banks. However, S&P 500 futures contracts are also derivatives and would be the most efficient means of propping up stock prices and/or leveraging a directional bet in stocks.

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There are many fundamental reasons to distrust central banks meddling in what are supposed to be free markets. For one thing, U.S. securities laws and regulators are not set up to police central banks. But more importantly, with the power to create money out of thin air, what is to stop central banks from effectively becoming the stock market, killing off its very reason for existing: as a reliable pricing mechanism. Just as the central bank of Japan has boosted its stock market with a $50 billion a year stock purchase program and Switzerland and Israel keep ratcheting up the percentage of reserves they are committing to stocks, the central banks may have doomed themselves and the stock market by failing to address the most crucial part of this strategy: an exit plan.

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iehi-feed-63628 Tue, 13 Feb 2018 23:20:08 GMT Hello, it's the IRS calling -- or is it? http://implode-explode.com/viewnews/2018-02-13_HelloitstheIRScallingorisit.html Potential victims usually are told they owe money that must be paid immediately via prepaid debit card, wire transfer or gift card. If people resist, they're threatened with suspension of their driver's license, deportation, a lawsuit or arrest.

It can scare the heck out of people. And they panic, instead of taking the next logical step, which is to contact the IRS directly (800-829-1040) to confirm the debt.

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iehi-feed-63623 Mon, 12 Feb 2018 08:36:54 GMT What Crushed Stocks? | Wolf Street http://implode-explode.com/viewnews/2018-02-12_WhatCrushedStocksWolfStreet.html The 40-basis point move by the 30-year yield and the 43-basis point move by the 10-year yield since the beginning of this year have some consequences for the real economy -- and it added to the nervousness in the stock market when investors finally took note of it.

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These higher borrowing costs also mean that investors are now seeing more attractive yields in bonds, and there is less pressure to chase risk. The stock market last week reacted fairly suddenly to what has been in the works for months. As they say, Treasury yields don't matter to stocks -- until they do.

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iehi-feed-63622 Sat, 10 Feb 2018 08:17:13 GMT Doug Noland: Subprime and Short Vol http://implode-explode.com/viewnews/2018-02-10_DougNolandSubprimeandShortVol.html For nine long years now, CBB analysis has posited "the global government finance Bubble," "The Moneyness of Risk Assets" and the "Granddaddy of all Bubbles" theses. I believe the Bubble has likely been pierced. The spectacular blowup of all these "short vol" products is a replay of subprime in the summer of 2007 - just so much bigger and consequential. The "insurance" marketplace has badly dislocated, concluding for now the environment of readily available cheap market protection.

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A Paradox of Dysfunctional Contemporary Finance: The higher home prices inflated (and the greater systemic risk) the cheaper it became to "insure" mortgage Credit risk. More recently, the higher stock prices have inflated (and the greater systemic risk), the cheaper it has been to "insure" equities market risk. These highly distorted "insurance" markets became instrumental in attracting the marginal source of finance fueling late-stage "Terminal Excess" throughout the risk markets.

Variations of these "short vol" strategies have essentially been writing flood insurance during a prolonged drought. Key to it all, global central bankers for the past nine years have been intently controlling the weather.

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iehi-feed-63617 Wed, 07 Feb 2018 16:19:13 GMT How Much of Trump's "Saved" Government Bloat Money Will He Now Waste On a Military Parade? http://implode-explode.com/viewnews/2018-02-07_HowMuchofTrumpsSavedGovernmentBloatMoneyWillHeNowWasteOnaMilitar.html "The marching orders were: I want a parade like the one in France," said a military official who spoke on the condition of anonymity because the planning discussions are supposed to remain confidential. "This is being worked at the highest levels of the military."

Shows of military strength are not typical in the United States -- and they don't come cheap. The cost of shipping Abrams tanks and high-tech hardware to Washington could run in the millions, and military officials said it was unclear how they would pay for it.

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iehi-feed-63615 Tue, 06 Feb 2018 19:14:12 GMT Mnuchin says he wants answers from CFPB Stooge Mulvaney on Equifax investigation http://implode-explode.com/viewnews/2018-02-06_MnuchinsayshewantsanswersfromCFPBStoogeMulvaneyonEquifaxinvestig.html U.S. Treasury Secretary Steven Mnuchin on Tuesday said he wants to know how the Consumer Financial Protection Bureau is handling a probe into a hack of credit bureau Equifax Inc (EFX.N) after a report that the agency's acting director had pulled back from investigating the matter.

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Reuters, citing people familiar with the matter, reported on Monday that while CFPB does have an open investigation into Equifax, Mulvaney has reined in the work begun by his predecessor, Richard Cordray.

Mulvaney has not ordered subpoenas against Equifax or sought sworn testimony from executives, routine steps in a full-scale probe, the sources said. Meanwhile, they added, the CFPB has shelved plans for on-the-ground tests of how Equifax protects data, an idea backed by Cordray.

The CFPB also recently rebuffed bank regulators at the Federal Reserve, Federal Deposit Insurance Corp and Office of the Comptroller of the Currency when they offered to help with on-site exams of credit bureaus, the sources said.

Maybe this finally registered as "too blatantly outside of Trump's populist promises" to let slide...

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iehi-feed-63613 Tue, 06 Feb 2018 18:58:22 GMT The Fed's unprecedented slap at Wells Fargo may cost the bank more than merely $400 million this year http://implode-explode.com/viewnews/2018-02-06_TheFedsunprecedentedslapatWellsFargomaycostthebankmorethanmerely.html The bank says this reprimand will cost them between $300 million and $400 million in earnings this year, but that is less than 2 percent of its total 2017 earnings of $22 billion. If that is indeed all it costs the bank, and they successfully pass their review in September, then it's possible that the stock's recent declines could be the end of Wells Fargo's worries.

That said, some analysts have been surprised how quickly the bank was able to estimate an implied quantitative cost for what is essentially a qualitative and broad issue at the bank. In light of that, Wells Fargo passing its review on September 30th will not be a precise science.

Furthermore, there is also the question of long term damage and market share losses from the limit on growth and negative press, particularly at a time when rivals are freer to lend and grow than they have been for years. This is highlighted by rival JP Morgan's recent push into new markets -- many where Wells Fargo has a big presence.

Should they fail the review later this year, and the cap on assets remains, then the extent of impact on Wells Fargo will be far more significant.

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iehi-feed-63611 Tue, 06 Feb 2018 01:00:11 GMT Trump often takes credit for stock market rise; Will he own the falls too? http://implode-explode.com/viewnews/2018-02-05_TrumpoftentakescreditforstockmarketriseWillheownthefallstoo.html iehi-feed-63610 Mon, 05 Feb 2018 22:57:20 GMT Early Facebook and Google employees form coalition to fight what they built http://implode-explode.com/viewnews/2018-02-05_EarlyFacebookandGoogleemployeesformcoalitiontofightwhattheybuilt.html A group of Silicon Valley technologists who were early employees at Facebook and Google, alarmed over the ill effects of social networks and smartphones, are banding together to challenge the companies they helped build.

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The campaign, titled The Truth About Tech... will be aimed at educating students, parents and teachers about the dangers of technology, including the depression that can come from heavy use of social media.

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"We were on the inside," said Tristan Harris, a former in-house ethicist at Google who is heading the new group. "We know what the companies measure. We know how they talk, and we know how the engineering works."

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iehi-feed-63609 Mon, 05 Feb 2018 22:51:20 GMT Exclusive: U.S. consumer protection official puts Equifax probe on ice http://implode-explode.com/viewnews/2018-02-05_ExclusiveUSconsumerprotectionofficialputsEquifaxprobeonice.html ... Three sources say... Mulvaney, the new CFPB chief, has not ordered subpoenas against Equifax or sought sworn testimony from executives, routine steps when launching a full-scale probe. Meanwhile the CFPB has shelved plans for on-the-ground tests of how Equifax protects data, an idea backed by Cordray.

The CFPB also recently rebuffed bank regulators at the Federal Reserve, Federal Deposit Insurance Corp and Office of the Comptroller of the Currency when they offered to help with on-site exams of credit bureaus, said two sources familiar with the matter.

Equifax has said it is under investigation by every state attorney general and faces more than 240 class action lawsuits.

The Federal Trade Commission is examining the breach and the company may face financial penalties. The last time the FTC penalized a major credit bureau was in 2012, a $393,000 settlement with Equifax.

Related: Chuck Schumer is not happy.

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iehi-feed-63608 Mon, 05 Feb 2018 22:48:24 GMT Berkshire Dragged Down As Wells Fargo Stake Plunges http://implode-explode.com/viewnews/2018-02-05_BerkshireDraggedDownAsWellsFargoStakePlunges.html Shares of Warren Buffett's Berkshire Hathaway Inc. are getting dragged down excessively by the slumping value of one of its biggest stock holdings, Wells Fargo & Co., according to analysts at Barclays Plc.

Berkshire was down 4.9 percent at 3:41 p.m. on Monday in New York, amid a broader sell-off in stocks. Buffett's conglomerate is the largest shareholder in the San Francisco-based bank, which plunged even more -- 9.1 percent -- after the Federal Reserve banned the bank Friday from growing until it convinces authorities it's addressing shortcomings.

Hah... hah...

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iehi-feed-63603 Mon, 05 Feb 2018 14:55:45 GMT Bitcoin News: China's Great Firewall to Block Crypto Websites http://implode-explode.com/viewnews/2018-02-05_BitcoinNewsChinasGreatFirewalltoBlockCryptoWebsites.html