Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64142 Tue, 24 Jul 2018 02:52:14 GMT Trump's Tax Cut Hasn't Done Anything for Workers http://implode-explode.com/viewnews/2018-07-23_TrumpsTaxCutHasntDoneAnythingforWorkers.html Official data for the second quarter isn't available yet, but private data isn't looking encouraging. PayScale's index of real wages shows a dramatic deterioration [of almost 10%] in the period... growth hasn't really sped up either -- real per capita gross domestic product growth was only 1.34 percent in the first quarter, below 2017's pace, and considerably less than in 2014 and 2015...

This tepid rate of growth means that the tax cut is unlikely to pay for itself. By this point, almost all economists recognize that income tax cuts no longer stimulate the economy enough to reduce deficits, as supply-siders thought they would back in the 1980s. But economists still held out some hope that lowering the corporate tax, which is believed to be more harmful than the personal income tax, would have a more salutary effect on the budget. Unfortunately, that hope appears to be fading, as fiscal deficits increase rapidly.

]]>
iehi-feed-64136 Fri, 20 Jul 2018 21:26:46 GMT U.S. Gov's Budget Deficit Overshoots by 100%; Trillion-Dollar Deficits Expected Indefinitely http://implode-explode.com/viewnews/2018-07-20_USGovsBudgetDeficitOvershootsby100TrillionDollarDeficitsExpected.html ... when they first unveiled the FY2018 budget in March of last year, they projected the annual deficit to be ‘only' $440 billion.

So between their initial projections in March 2017, and their current projections in July 2018, this year's budget deficit increased by more than 100%.

...

Last March, they projected a total budget deficit of $526 billion for Fiscal Year 2019.

But according to the revised projections they published yesterday, the budget deficit for Fiscal Year 2019 will now be $1.085 TRILLION... 106% worse than projected.

And, whereas last year the government was forecasting DECLINING deficits in Fiscal Years 2020, 2021, etc., until miraculously reaching a positive budget SURPLUS of +16 billion in 2026, their updated projections now show TRILLION DOLLAR DEFICITS next year. And the year after that. And the year after that. Etc.

It's Trumponomics! What did we expect from a guy who's been bankrupt a gazillion times?

]]>
iehi-feed-64104 Wed, 11 Jul 2018 21:08:33 GMT Billionaires Have Already Written-Off The Rest of the Human Race http://implode-explode.com/viewnews/2018-07-11_BillionairesHaveAlreadyWrittenOffTheRestoftheHumanRace.html When the hedge funders asked me the best way to maintain authority over their security forces after "the event," I suggested that their best bet would be to treat those people really well, right now. They should be engaging with their security staffs as if they were members of their own family. And the more they can expand this ethos of inclusivity to the rest of their business practices, supply chain management, sustainability efforts, and wealth distribution, the less chance there will be of an "event" in the first place. All this technological wizardry could be applied toward less romantic but entirely more collective interests right now.

They were amused by my optimism, but they didn't really buy it. They were not interested in how to avoid a calamity; they're convinced we are too far gone. For all their wealth and power, they don't believe they can affect the future. They are simply accepting the darkest of all scenarios and then bringing whatever money and technology they can employ to insulate themselves -- especially if they can't get a seat on the rocket to Mars.

]]>
iehi-feed-64100 Mon, 09 Jul 2018 19:21:28 GMT Generation wealth: how the modern world fell in love with money http://implode-explode.com/viewnews/2018-07-09_Generationwealthhowthemodernworldfellinlovewithmoney.html Lauren Greenfield has spent years photographing the world's richest people. Now she's made a documentary on society's obsession with extreme wealth -- and its cost to us all

...

Greenfield introduces us to characters all motivated by the accumulation of wealth. "No matter how much people had, they still wanted more," Greenfield says of her subjects. We meet Florian Homm, a hedge fund manager living in self-imposed exile in Germany to avoid extradition to the US where he has been sentenced to 225 years in jail. Smoking cigars and dripping in gold, Homm, who became known as "the antichrist of finance" for ripping off his investors for hundreds of millions of dollars, tells Greenfield that morality changed in the 80s. "The value system changed completely. It wasn't about who you are, but about what you are worth... Morals are completely non-productive in that value system."

...

The stories Greenfield tells about rich families detached from the world around them, living in bubbles separated from reality by armies of nannies and household staff, chime with my own experiences covering the super-rich as wealth correspondent for the Observer and the Guardian. From Knightsbridge to Monaco, the Upper West Side and the Hamptons, the wealthiest people in society are richer than they've ever been before. More of them have five, six, seven or even a dozen homes in the world's most desirable locations and it is not unusual for them to fly their nannies, tutors and security details between them on private jets. Their houses may cost as much as the £135m a Ukrainian billionaire paid for a penthouse in One Hyde Park, but that doesn't mean they'll spend much time there.

...

A growing number of academics warn that the widening gulf between the richest 1% and everyone else could lead to a backlash. The richest 0.1% of the world's population has increased their combined wealth by as much as the poorest 50% -- or 3.8 billion people -- since 1980, according to the The report, by the French economist Thomas Piketty and 100 other researchers, also found that the richest 1% of the global population "captured" 27% of the world's wealth growth between 1980 and 2016. Piketty warns that inequality has ballooned to "extreme levels" in many countries, and will only get worse unless governments take co-ordinated action to increase taxes and prevent tax avoidance.

...

She says that while examining her photos it became clear to her that "We have left behind the American dream of my dad's generation where there was the possibility of social mobility and the belief that anyone could make it. The things that were valued then -- discipline, hard work and frugality -- are not so important now. We have a culture that prizes celebrity, bling and narcissism." Trump, she says, "is the apotheosis of generation wealth. With Trump you have wealth and celebrity achieving the ultimate goal. Trump is the natural evolution of the values of our culture."

Yes, let's be careful or a backlash "will" come...

]]>
iehi-feed-64099 Mon, 09 Jul 2018 01:39:39 GMT A Record 95.5 Million Americans Not in the Labor Force:  One-third of Working Americans Supports the other two-thirds http://implode-explode.com/viewnews/2018-07-08_ARecord955MillionAmericansNotintheLaborForceOnethirdofWorkingAme.html Since 2009 alone we have seen the number of those not in the labor force increase from 80 million to 95.5 million (this is an increase of 19.37 percent).  At the same time, the U.S. population has only increased by 6 percent.  In other words, those not in the labor force are increasing at a much faster rate than your general growth in the population. 

...

If the economy is doing so great, how is it that we have a record 95.5 million Americans not in the labor force? That is an incredibly large number. And as we first brought up, this is not simply because of baby boomers retiring (as you now know the new retirement model is working until you die since most have very little to no money saved for retirement).

It's because we're the land of the free -- two-thirds of us are free, at least!

]]>
iehi-feed-64096 Mon, 09 Jul 2018 00:59:38 GMT Charles Hugh Smith: We Are All Hostages of Corporate Profits http://implode-explode.com/viewnews/2018-07-08_CharlesHughSmithWeAreAllHostagesofCorporateProfits.html iehi-feed-63993 Wed, 06 Jun 2018 21:29:15 GMT How Greece's Busiest Port Reveals the Perils of Privatization http://implode-explode.com/viewnews/2018-06-06_HowGreecesBusiestPortRevealsthePerilsofPrivatization.html In 2015, as a condition of the $100 billion European Union bailout that followed the 2008 financial crisis, the Greek government agreed to privatize a number of state-held assets including the Piraeus Port Authority, which manages the port's container and passenger terminals. The Greek state sold a majority stake for $330 million to COSCO. For the Chinese company, the purchase had a clear financial logic. About 80 percent of China's imports and exports to and from Europe are transported by sea, and by avoiding the need to sail to busy Northern European ports like Rotterdam or Hamburg, COSCO could offload containers in Piraeus, reducing the time it takes cargo to get to Europe by nearly a week. Plus, by owning the port authority, COSCO could help determine how much its own ships would have to pay itself in port fees.

As part of the deal, COSCO pledged to participate in financing $410 million worth of investment in the port, including a repair of port equipment and the dredging of Piraeus's central port. Supporters of privatization argue these improvements signal a coming maritime renaissance at Piraeus--already the busiest port in the eastern Mediterranean. Nektarios Demenopolous, the deputy manager for investor relations at Piraeus Port Authority, told me, "There are 300 million euros [$350 million] of investment to come in the next five years, followed by another 50 million. Privatization has made the port much more dynamic and will reboot activities at the port like ship repair that have been in recession. It will be remembered as a success story."

But a "success story" for whom? The dockworkers of Piraeus say they and their families have seen little of the alleged gains brought by COSCO. As Piraeus Port Authority boasts of widening profit margins and increasing maritime traffic, wages for dockworkers haven't budged since they were slashed from 1500 euros ($1,750) per month to 600 euros after the financial crisis. Beyond that, COSCO now hires few dockworkers as full-time employees, and tends to enlist unskilled laborers for complex container unloading. COSCO also primarily remunerates people on an ad hoc basis as subcontractors, leaving dockworkers and their families entirely dependent on the ebb and flow of traffic into Piraeus. It also means their traditional retirement benefits have disappeared.

]]>
iehi-feed-63888 Sun, 22 Apr 2018 17:07:52 GMT The Pension Time Bomb, $400 Trillion by 2050 http://implode-explode.com/viewnews/2018-04-22_ThePensionTimeBomb400Trillionby2050.html According to an analysis by the World Economic Forum (WEF), there was a combined retirement savings gap in excess of $70 trillion in 2015, spread between eight major economies..

The WEF says the deficit is growing by $28 billion every 24 hours -- and if nothing is done to slow the growth rate, the deficit will reach $400 trillion by 2050, or about five times the size of the global economy today.

...

This problem is amplified by the size of generations and fertility rates. The population of retirees globally is expected to grow from 1.5 billion to 2.1 billion between 2017-2050, while the number of workers for each retiree is expected to halve from eight to four over the same timeframe.

]]>
iehi-feed-63882 Thu, 19 Apr 2018 00:09:45 GMT World debt hits record $164 trillion as crisis hangover lingers http://implode-explode.com/viewnews/2018-04-18_Worlddebthitsrecord164trillionascrisishangoverlingers.html The world's debt load has ballooned to a record $164 trillion, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten, the International Monetary Fund said.

...

The global debt burden clouded the IMF's otherwise upbeat outlook of the world economy, which is in its strongest upswing since 2011. The fund on Tuesday forecast expansion of 3.9 per cent in 2018 and 2019, while saying in subsequent years the global economy could be impacted by tighter monetary policy and the fading effects of U.S. fiscal stimulus.

...

The IMF figures bare the scale of the debt hangover from which the world is still recovering from a decade after the financial crisis pushed the global banking system to the brink, and tipped the world economy into recession. Governments increased spending to boost growth, while central banks resorted to unconventional methods to ease financing conditions, such as buying bonds.

]]>
iehi-feed-63880 Wed, 18 Apr 2018 19:30:17 GMT U.S. Debt Load Seen Worse Than Italy's by 2023, IMF Predicts http://implode-explode.com/viewnews/2018-04-18_USDebtLoadSeenWorseThanItalysby2023IMFPredicts.html iehi-feed-63797 Mon, 26 Mar 2018 14:50:24 GMT Wall Street Bonus Pool Dwarfs 'Tax Reform Bonuses' and Minimum Wage Earnings While Contributing to Gender Inequality http://implode-explode.com/viewnews/2018-03-26_WallStreetBonusPoolDwarfsTaxReformBonusesandMinimumWageEarningsW.html iehi-feed-63784 Thu, 22 Mar 2018 13:56:59 GMT 66% Of Working Millennials Have Nothing Saved For Retirement http://implode-explode.com/viewnews/2018-03-22_66OfWorkingMillennialsHaveNothingSavedForRetirement.html iehi-feed-63776 Wed, 21 Mar 2018 18:52:42 GMT Congress quietly formed a committee to bail out 200 pension funds http://implode-explode.com/viewnews/2018-03-21_Congressquietlyformedacommitteetobailout200pensionfunds.html As the government was working on the recent, new budget deal and subsequent boost in government spending, Congress quietly snuck in a provision that forms a committee which would use federal funds to bail out as many as 200 "multiemployer" pension plans -- where employers and labor unions jointly provide retirement benefits to employees.

...

But Congress' committee, assuming it works, wouldn't even rescue the red zone plans, much less the remaining 1,200. And it doesn't even begin to address the real problem -- the $7 trillion funding gap faced by the government's own pensions.

Congress is stepping in because the Pension Benefit Guaranty Corporation (PBGC) -- the pension equivalent to the Federal Deposit Insurance Corporation (FDIC) -- is completely insolvent.

]]>
iehi-feed-63773 Tue, 20 Mar 2018 19:26:51 GMT Japan is so broke that its prisons are full of 80+ year old ‘felons' http://implode-explode.com/viewnews/2018-03-20_Japanissobrokethatitsprisonsarefullof80yearoldfelons.html One in five female prisoners in Japan is senior, almost all of whom have been convicted of petty crimes like shoplifting. This is no accident. Elderly women in Japan are economically vulnerable. Half live below the poverty line. Many live by themselves and have no one to turn to for help. So there's a growing trend in Japan of elderly women deliberately committing petty crimes-- hoping to get caught so that they'll be sent to prison.

In prison, of course, they're fed, clothed, housed, and even have their health care covered by the state. It's a pitiful, last resort form of welfare that's likely going to become worse as Japan's already elderly population continues to age.

...

[Yet,] everything that Japan did back in the 70s and 80s to cause these long-term social and economic problems is EXACTLY what most of the West is doing now: printing money, keeping rates too low, inflating asset bubbles, going into debt, and acting like the good times will last forever.

It would be utterly foolish to believe that this time is different.

]]>
iehi-feed-63699 Fri, 02 Mar 2018 02:42:50 GMT Debt (Still) on Track to Destroy The American Middle Class http://implode-explode.com/viewnews/2018-03-01_DebtStillonTracktoDestroyTheAmericanMiddleClass.html iehi-feed-63698 Fri, 02 Mar 2018 02:40:56 GMT The Economy Looks Good Today, But the Next Debt Crisis Is on the Horizon http://implode-explode.com/viewnews/2018-03-01_TheEconomyLooksGoodTodayButtheNextDebtCrisisIsontheHorizon.html We can't ignore the enduring problem of unemployment and underemployment. While the Bureau of Labor Statistics lists the unemployment rate at 4.1%--a 17-year low--the seasonally adjusted U6 unemployment rate, which takes into account eligible workers who can't find full-time jobs and those who have given up trying altogether, stands at 8.2%. The fact is that automation and other technological innovations are accelerating job displacement, reducing costs, and increasing corporate margins and profits. This benefits investors with the liquidity available to participate in financial markets, but certainly not average families living from paycheck to paycheck, or without a paycheck at all.

While Fed policies helped household balance sheets to deleverage after the 2008 financial crisis, they did so by effectively transferring household debt to corporate and sovereign balance sheets, paving the way for higher interest rates. Outstanding non-mortgage consumer credit has risen by 45% since its previous peak in 2008, now approaching $4 trillion. Global nonfinancial corporate debt increased to 96% of global GDP between 2011 and 2017, with some 37% of global companies now deemed to be "highly leveraged," (meaning they have a debt-to-earnings ratio above five-to-one) up from 32% in 2007, according to Standard & Poor's. And the level of margin debt used to buy securities has doubled since 2011, to a new all-time high of $643 billion. Nearly one in five American companies now qualify as "zombies," meaning that earnings before interest and taxes don't cover interest expenses.

All of this suggests a new cycle of distressed corporate credit looks to be just around the corner, and recent tax reforms limiting corporate interest deductibility won't help.

]]>
iehi-feed-63677 Sun, 25 Feb 2018 14:43:07 GMT Mass Exodus Of NYPD And FDNY Fleeing Monroe, New York http://implode-explode.com/viewnews/2018-02-25_MassExodusOfNYPDAndFDNYFleeingMonroeNewYork.html 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-63511 Fri, 12 Jan 2018 15:58:38 GMT Greece to Remain Under Lenders' Supervision Until 2059 http://implode-explode.com/viewnews/2018-01-12_GreecetoRemainUnderLendersSupervisionUntil2059.html iehi-feed-63454 Tue, 26 Dec 2017 15:52:53 GMT Scotland united in curiosity as councils trial universal basic income http://implode-explode.com/viewnews/2017-12-26_Scotlandunitedincuriosityascouncilstrialuniversalbasicincome.html ... it is in Scotland that four councils face the task of turning basic income from a utopian fantasy to contemporary reality as they build the first pilot schemes in the UK, with the support of a £250,000 grant announced by the Scottish government last month and the explicit support of Nicola Sturgeon.

The concept of a universal basic income revolves around the idea of offering every individual, regardless of their existing benefit entitlement or earned income, a non-conditional flat-rate payment, with any income earned above that taxed progressively. The intention is to replace the welfare safety net with a platform on which people can build their lives, whether they choose to earn, learn, care or set up a business.

The idea has its roots in 16th-century humanist philosophy. The political theorist Thomas Paine advocated a citizen's dividend. But there has been a groundswell of interest over the past decade not only among lateral thinkers but also anti-poverty groups, which see it as a means of changing the relationship between people and state, and between workers and the gig economy.

In Scotland, a country wearily familiar with divisions of a constitutional nature, the concept of a basic income is almost unique in enjoying multi-party favour. Across the four areas currently designing basic income pilots -- Glasgow, Edinburgh, Fife and North Ayrshire -- the projects have variously been championed by Labour, SNP, Green and, in one case, Conservative councillors.

]]>