Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us 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.

]]>
iehi-feed-63406 Thu, 14 Dec 2017 22:58:44 GMT Rubio to vote against GOP tax bill unless tax credit for working poor is expanded http://implode-explode.com/viewnews/2017-12-14_RubiotovoteagainstGOPtaxbillunlesstaxcreditforworkingpoorisexpan.html Sen. Marco Rubio informed Senate leaders Thursday he intends to vote against Republicans' $1.5 trillion tax plan unless it includes a larger expansion of a child tax credit. "... given all the other changes made in the tax code leading into it, I can't in good conscience support it unless we are able to increase [the child tax credit], and there's ways to do it and we'll be very reasonable about it."

Sen. Mike Lee (R-Utah), Rubio's partner in pushing for the expanded child tax credit, is undecided on whether to support the Republicans' final tax bill, according to a Lee spokesman.

...

Rubio and Lee want to allow millions of families who pay payroll taxes but do not earn enough to pay income taxes to claim the expanded credit. The change they are now pushing would expand the credit by $80 billion over 10 years, a smaller change than they proposed for the Senate bill.

]]>
iehi-feed-63383 Sun, 10 Dec 2017 20:07:23 GMT How the GOP tax cut could take money away from most Americans http://implode-explode.com/viewnews/2017-12-10_HowtheGOPtaxcutcouldtakemoneyawayfrommostAmericans.html If President Donald Trump and congressional Republicans end up paying for their proposed $1.4 trillion tax cut by reducing spending or raising taxes later on, most Americans making less than $86,000 would be worse off, according to a new report by the Tax Policy Center, a nonpartisan think tank.

Republicans have yet to say how they intend to pay for the tax cut. Originally, Treasury Secretary Steven Mnuchin argued the tax cut would completely pay for itself because the economy would grow substantially faster, a claim that has not been backed up by independent research. Congress' official scorekeepers estimate that the tax cut would add $1 trillion to the federal deficit, even after taking into account some additional economic growth.

At some point, that will have to be paid for, and top Republican lawmakers, including House Speaker Paul Ryan, R-Wis., have indicated they plan to take a hard look at welfare spending and other safety net programs for potential trimming.

The Tax Policy Center warns in its "Winners and Losers" report released Friday that paying for the tax cut by reducing programs that help the poor and lower middle class would leave many Americans in the bottom 60 percent in a worse spot than they would have been without the GOP tax bill.

...

The House bill would cut taxes for 76 percent of Americans next year and raise taxes on just 7 percent, according to the Tax Policy Center. But those numbers look substantially different once the think tank factored in how to pay for the bill. If every household were required to pay the same amount to fund the tax cuts - roughly $1,200 - in 2018, then only 27 percent of Americans would get a cut and 73 percent of Americans would essentially be getting a tax hike. The vast majority of the families that would be worse off would be in the low and middle class.

...

Critics of the report say the Tax Policy Center is running hypothetical scenarios. There are no proposals on the table to make draconian cuts or to make every American pay a fee or tax... But the Tax Policy Center says this is actually a pretty similar scenario to what the Trump budget proposed earlier this year with its cuts to various welfare and safety net programs that mostly impact moderate-income households. The Tax Policy Center is also assuming a modest increase on higher-income households.

]]>
iehi-feed-63357 Sun, 03 Dec 2017 01:13:40 GMT ‘This is class warfare': Tax vote sparks political brawl over populism that will carry into 2018 elections http://implode-explode.com/viewnews/2017-12-02_ThisisclasswarfareTaxvotesparkspoliticalbrawloverpopulismthatwil.html Democrats see an opening for an attack on President Trump and Republicans as allies of the wealthy and Wall Street interests. Republicans, who watched Trump capture an antiestablishment populist mood in 2016, may find it difficult to sell a tax bill that was underwater in polls even before the mostly party-line vote on the Senate measure.

...

Veterans of President Barack Obama's administration, with memories of how Republicans attacked the passage of the Affordable Care Act, argued that Republicans overly optimistic and had misread the national mood. Republicans were "deluding themselves," said former Obama strategist David Axelrod, to think that voters would reward them for a tax cut.

"There are two categories of people who will benefit here -- wealthy, corporate interests, of course, who scored a bonanza, and Democratic ad-makers, who have been handed a treasure trove of egregious targets and tawdry, swamp-like images with which to work," Axelrod said.

The bill's progress has not much resembled Washington's last raids on the tax code. President Ronald Reagan's 1981 tax cut passed by super-majorities in the House and the Senate, while President George W. Bush's 2001 tax cut -- sold at first as a way to spend a surplus, then as a way to combat a recession -- attracted 13 Democratic votes in the House and 12 in the Senate. In 2010, an even larger number of Democrats voted to extend the Bush-era tax rates for people making less than $400,000, fearful that cutting them back would lengthen the Great Recession.

]]>
iehi-feed-63350 Sat, 02 Dec 2017 01:35:12 GMT government-spending-deficits-soar-everywhere http://implode-explode.com/viewnews/2017-12-01_governmentspendingdeficitssoareverywhere.html iehi-feed-63349 Sat, 02 Dec 2017 01:32:55 GMT US Household Debt Is Rising 60% Faster Than Wages http://implode-explode.com/viewnews/2017-12-01_USHouseholdDebtIsRising60FasterThanWages.html iehi-feed-63336 Tue, 28 Nov 2017 20:57:33 GMT The chained CPI: Another secret tax hike for the middle class slipped into the GOP tax bills http://implode-explode.com/viewnews/2017-11-28_ThechainedCPIAnothersecrettaxhikeforthemiddleclassslippedintothe.html What Republicans really like about the chained CPI is that it tends to show a lower inflation rate than the alternative, typically by 0.3 percentage point a year. The difference pencils out to significant dollars: Changing the inflation index immediately would raise about $125 billion over the next decade and nearly $500 billion in the decade after that, according to the Tax Policy Center.

Most of that money would come out of the pockets of middle- and working-class taxpayers. Most important, it would slow inflation adjustments to tax brackets. This would hurt those taxpayers because more of them would move into higher tax brackets purely because of inflation in their wages. High-income taxpayers who already pay the top tax rate wouldn't be affected the same way.

The chained CPI also would reduce inflation increases in provisions such as the standard deduction, personal exemption, earned income tax credit and the alternative minimum tax. Personal exemptions and the AMT are marked for repeal in the GOP tax bills, but if they survive or are supplanted by other inflation-indexed provisions, the chained CPI would represent a tax increase on their users. In any event, as Howard Gleckman of the Tax Policy Center recently observed, the Republican plan is to replace the inflation-indexed personal exemption with a larger but non-indexed child tax credit. Leaving the latter unindexed would erode its value over time.

What's insidious about the chained CPI is that its effect is modest at first, but compounds over time. After 10 years the shortfall compared with the standard CPI is more than three percentage points; after 20 years, more than six.

...

One other thing: Inserting the chained CPI into the tax code could be a Trojan horse to infiltrate other government programs, notably Social Security. But that would be only the start. The Congressional Budget Office noted in a 2010 report that the federal poverty level is indexed to a standard CPI; changing that to the chained CPI would affect all programs whose budgets or benefits are keyed to the poverty level, including Head Start, food stamps and "the National School Lunch Program, the Low-Income Home Energy Assistance Program, the Children's Health Insurance Program, and parts of Medicaid." Republicans already have their daggers out for some of these programs; the chained CPI would represent just the first prick.

]]>
iehi-feed-63330 Mon, 27 Nov 2017 15:29:54 GMT Fed chair nominee Powell may need unconventional means to tackle low inflation 'mystery' http://implode-explode.com/viewnews/2017-11-27_FedchairnomineePowellmayneedunconventionalmeanstotacklelowinflat.html The Fed's preferred inflation indicator has shown little sign of a rebound despite falling unemployment and a pickup in growth.

...

Yellen is now concerned that there are longer-term trends at work, and suggested that those concerns are shared by others at the Fed. "My colleagues and I are not certain that it is transitory,'' Yellen said in a speech Tuesday at New York University's Stern School of Business.

That raises the question of what Powell now believes. A Fed governor for the past five years, Powell has expressed some concerns about low inflation but hasn't yet gone as far as Yellen. In an Aug. 25 CNBC interview, Powell called low inflation "kind of a mystery."

]]>
iehi-feed-63301 Sat, 18 Nov 2017 00:04:43 GMT Fed Hints During Next Recession It Will Roll Out Income Targeting, NIRP http://implode-explode.com/viewnews/2017-11-17_FedHintsDuringNextRecessionItWillRollOutIncomeTargetingNIRP.html On Thursday afternoon, in a stark warning of what's to come, San Francisco Fed President John Williams confirmed our suspicions when he said that to fight the next recession, global central bankers will be forced to come up with a whole new toolkit of "solutions", as simply cutting interest rates won't well, cut it anymore, and in addition to more QE and forward guidance - both of which were used widely in the last recession - the Fed may have to use negative interest rates, as well as untried tools including so-called price-level targeting or nominal-income targeting.

[This] is a tacit admission that as a result of the aging workforce and the dramatic slack which still remains in the labor force, the US central bank will have to take drastic steps to preserve social order and cohesion.

According to Williams', Reuters reports, central bankers should take this moment of "relative economic calm" to rethink their approach to monetary policy. Others have echoed Williams' implicit admission that as a result of 9 years of Fed attempts to stimulate the economy - yet merely ending up with the biggest asset bubble in history - the US finds itself in a dead economic end, such as Chicago Fed Bank President Charles Evans, who recently urged a strategy review at the Fed, but Williams' call for a worldwide review is considerably more ambitious.

...Meanwhile, the idea of Fed targeting, or funding, "income" is hardly new: back in July, Deutsche Bank was the first institution to admit that the Fed has created "universal basic income for the rich"...

]]>
iehi-feed-63300 Sat, 18 Nov 2017 00:01:17 GMT Wall St. traders secretly used chat rooms to rig Treasury bond prices: suit http://implode-explode.com/viewnews/2017-11-17_WallSttraderssecretlyusedchatroomstorigTreasurybondpricessuit.html The new accusations, leveled by several pension funds and wealthy individual investors, are contained in an expanded class-action suit originally filed in July 2015 -- and include an unusual twist: Some of the evidence came from confidential informants and one of the banks sued in the earlier action.

...

The funds, representing retirees and public workers, also claim the banks conspired to rig the secondary Treasury markets beginning in the 1990s through tightly controlled electronic platforms that inhibited more competitive trading -- a new allegation that wasn't in the original suit but mirrors similar complaints filed against banks in other markets, like stock loans.

The amended suit tightens its focus on a select number of banks, naming Goldman Sachs, Morgan Stanley, the Royal Bank of Scotland, BNP Paribas, and UBS, among others, as the firms behind the rigging, which they allege occurred from Jan. 1, 2007, to mid-2015.

]]>
iehi-feed-63298 Fri, 17 Nov 2017 23:54:15 GMT Taxpayers have paid dearly for 720-mln-euro ‘social dividend' (Greece) http://implode-explode.com/viewnews/2017-11-17_Taxpayershavepaiddearlyfor720mlneurosocialdividendGreece.html iehi-feed-63297 Fri, 17 Nov 2017 23:52:43 GMT EU handling of Greek bailouts only partial success, say EU auditors http://implode-explode.com/viewnews/2017-11-17_EUhandlingofGreekbailoutsonlypartialsuccesssayEUauditors.html The ECA [European Court of Auditors] report, which focused on the work of the European Commission, said the programs "only helped Greece to recover to a limited extent."

The European Central Bank, which together with eurozone states and the International Monetary Fund contributed to the programs, was not assessed because it declined to provide data, questioning the auditors' mandate to ask for it, ECA said.

...

"... the Commission did not comprehensively consider Greece's implementation capacity in the design process and thus did not adapt the scope and timing accordingly," [the ECA] said.

]]>
iehi-feed-63280 Sun, 12 Nov 2017 19:44:55 GMT Debt swap problems pile up in China http://implode-explode.com/viewnews/2017-11-12_DebtswapproblemspileupinChina.html iehi-feed-63245 Sat, 04 Nov 2017 14:33:46 GMT Lobbying Frenzy Begins on Tax Bill; Party-Line Vote Ability In Doubt http://implode-explode.com/viewnews/2017-11-04_LobbyingFrenzyBeginsonTaxBillPartyLineVoteAbilityInDoubt.html The Republican tax rewrite unveiled on Thursday has set off a scramble among lobbyists and interest groups desperate to preserve prized tax breaks that are suddenly at risk in the sweeping bill moving through the House.

...

The rapid pace set out by Republican leaders is by design: They want to prevent the kind of arm-twisting that has long bedeviled previous tax overhaul efforts by leaving little time for outside groups to blitz lawmakers with concerns. Several consultants and lobbyists said on Friday that individual companies were just beginning to digest how the 400-plus page bill, which drastically changes how American businesses are taxed at home and abroad, would affect their bottom lines.

...

The groups pushing back the hardest on Friday included those in the real estate industry. Some of them had raised concerns before the bill was released, only to discover their biggest fears realized in the draft legislation. The bill includes several measures long opposed by those groups, including a limit on interest deductions for new home purchases of $500,000 or more and an expansion of the standard deduction.

The Mortgage Bankers Association plans conference calls and discussions with members of Congress throughout the weekend, said David Stevens, the group's president. Realtors are running online ads raising concerns over those provisions.

...

Representative Kevin Brady of Texas, the chairman of the House Ways and Means Committee, said no decision had been made about whether to include repeal of the so-called individual mandate. But he said Mr. Trump wants its inclusion, and he indicated that Republicans wanted to evaluate the fiscal effects of taking that step. Senate Republicans may not be as enthused about its inclusion.

...

[However, a Tax Foundation] analysis found that the draft legislation would cost too much to survive the budgetary requirements needed to pass the Senate on a party-line vote -- a sign that Republicans will almost certainly need to rework it in order to keep their hopes alive for delivering a bill to Mr. Trump's desk by December.

The analysis found that the bill would add $2 trillion to the federal budget deficit over the next decade, an amount that shrinks to $1 trillion even when additional economic growth effects from the bill are factored in.

"This does not pay for itself," said Scott Greenberg, a senior analyst at the Tax Foundation.

]]>
iehi-feed-63208 Thu, 26 Oct 2017 14:45:06 GMT Kotlikoff: America in Worse Financial Shape than Russia or China http://implode-explode.com/viewnews/2017-10-26_KotlikoffAmericainWorseFinancialShapethanRussiaorChina.html iehi-feed-63204 Thu, 26 Oct 2017 02:00:00 GMT Why Italy faces worst shock in Europe as ECB prepares to taper bond buys http://implode-explode.com/viewnews/2017-10-25_WhyItalyfacesworstshockinEuropeasECBpreparestotaperbondbuys.html Saddled with mountains of debt and a looming election, the southern European nation will likely struggle to find buyers for its government bonds when the European Central Bank stops snapping up Italian debt over the coming years, according to Christian Schulz, European economist at Citigroup. That means yields are set to rise, potentially strangling the country's nascent recovery.

...

Italy has particularly benefited from the ECB's quantitative easing program that began in 2015, as it's been one of the biggest bond issuers in the currency union. The central bank has purchased 300 billion euros ($352.9 billion) of Italian bonds under the program, which is more than three times the net bond issuance for the country during that period, according to Schulz. That means the ECB has not only bought pretty much all new bonds issued in Italy since 2015, but also existing bonds from other investors.

]]>
iehi-feed-63190 Tue, 24 Oct 2017 01:00:05 GMT Dalio to Fed: Analyzing The Economy With Overall Averages is A Mistake http://implode-explode.com/viewnews/2017-10-23_DaliotoFedAnalyzingTheEconomyWithOverallAveragesisAMistake.html iehi-feed-63189 Mon, 23 Oct 2017 20:34:22 GMT Why the next stock market crash will be faster and bigger than ever before http://implode-explode.com/viewnews/2017-10-23_Whythenextstockmarketcrashwillbefasterandbiggerthaneverbefore.html iehi-feed-63187 Mon, 23 Oct 2017 20:17:29 GMT CLOs -- "Safe" CDOs -- Are Booming Again http://implode-explode.com/viewnews/2017-10-23_CLOsSafeCDOsAreBoomingAgain.html