Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62819 Sat, 19 Aug 2017 17:31:15 GMT New York State Buying 400 Mortgages http://implode-explode.com/viewnews/2017-08-19_NewYorkStateBuying400Mortgages.html iehi-feed-62791 Wed, 16 Aug 2017 00:47:21 GMT Ten years after the crash, there's barely suppressed civil war in Britain http://implode-explode.com/viewnews/2017-08-15_TenyearsafterthecrashtheresbarelysuppressedcivilwarinBritain.html One truism of this era is that the average British worker earns less after inflation than they did when RBS nearly died. Most of us have seen not a recovery, but a ripping up of our social contract -- so that over 7 million Britons are now in precarious employment. But the highest earners are way ahead of where they were in 2008. Finance-sector bonuses are as generous as they were during the boom, while a bad year for the average FTSE boss is one in which he or she pulls in a mere £4.53m.

...

The banks got bailed out. Their bosses still get paid out. The rest of us get austerity. Whatever technical reforms have followed on from the crash, the economic and business model that created it remains intact. We could have used the nationalised banks to direct credit to strategic industries and regions; instead, Labour and the Tories insisted on treating them as if they were still private sector industries. We could have used the crash to make Britain a far more equal and democratic society. Instead, the UK is still grossly unequal.

And so we remain reliant on debt -- aptly termed "the raw material for bubbles and crashes" by Daniel Mügge at the University of Amsterdam. According to the Bank for International Settlements, the UK is far deeper in the red now than it was when Northern Rock collapsed. Government debt has shot up under the Conservatives, but so too has household borrowing. Were the UK to crash again, its government no longer has the political capital nor the fiscal headroom to save the financial system. And with interest rates scraping along the bottom, the Bank of England has barely any firepower left. Ten years of political fudge and failed austerity has left Britain's state machinery tapped out.

]]>
iehi-feed-62785 Tue, 15 Aug 2017 19:56:52 GMT Looming housing slowdown clouds Home Depot's strong results http://implode-explode.com/viewnews/2017-08-15_LoominghousingslowdowncloudsHomeDepotsstrongresults.html iehi-feed-62771 Sun, 13 Aug 2017 17:36:27 GMT Rich Hamptons Buyers Don't Want Mega-Mansions Anymore http://implode-explode.com/viewnews/2017-08-13_RichHamptonsBuyersDontWantMegaMansionsAnymore.html iehi-feed-62761 Sat, 12 Aug 2017 15:32:18 GMT Baby boomers are refusing to sell and will age like a fine wine in their homes http://implode-explode.com/viewnews/2017-08-12_Babyboomersarerefusingtosellandwillagelikeafinewineintheirhomes.html iehi-feed-62758 Fri, 11 Aug 2017 16:26:33 GMT Airbnb faces EU clampdown for not paying 'fair share' of tax http://implode-explode.com/viewnews/2017-08-11_AirbnbfacesEUclampdownfornotpayingfairshareoftax.html It was revealed this week that Airbnb paid less than €100,000 (£90,336) in French taxes last year, despite the country being the room-booking firm's second-biggest market after the US.

In response, the French economy minister, Bruno Le Maire, informed the national assembly that the EU's Franco-German axis would be proposing a pan-European clampdown. "These digital platforms make tens of millions of sales and the French treasury gets a few tens of thousands," the minister said, adding that the current setup was "unacceptable".

Le Maire further claimed in parliament that an ongoing consultation being led by the commission and the OECD to address the tax question were "taking too much time, it's all too complicated". Many digital platforms operating in the EU have a base in Ireland, including Airbnb, where they can exploit a low corporation tax regime. Le Maire said: "Everybody has to pay a fair contribution."

]]>
iehi-feed-62736 Sat, 05 Aug 2017 04:03:07 GMT Trump weighs axing "untouchable" mortgage interest deduction http://implode-explode.com/viewnews/2017-08-05_Trumpweighsaxinguntouchablemortgageinterestdeduction.html As Matthew Desmond, author of "Evicted: Poverty and Profit in the American City," wrote in May, it's actually one of the main entitlement programs in the United States. "But by any fair standard," Desmond wrote in the New York Times, "the holy trinity of United States social policy should also include the mortgage-interest deduction -- an enormous benefit that has also become politically untouchable."

Many countries like Australia, Canada, and Britain don't have this deduction, which is ostensibly there to increase homeownership. Economists don't think this necessarily works, however, instead simply allowing for the purchase of larger houses and benefiting the wealthy. According to the Tax Policy Center, it's a very regressive policy, disproportionately helping boost the top 20% post-tax income.

...

In April, the administration released its tax proposal, and while it indicated that it would "protect the homeownership and charitable gift tax deductions," the proposal sought to double the standard deduction, which would effectively mute the mortgage deduction benefit for many American homeowners--except the wealthiest.

...

Despite being one of the most expensive tax breaks, costing the country--mostly the renters, who don't get the benefit--$77 billion in 2016, Trump and Treasury Secretary Steven Mnuchin will face massive blowback should they pursue this policy. And not just from homeowners--from renters too. After all, homeownership is consistently cited as a being a part of the American Dream, a dream many renters hope to realize someday.

]]>
iehi-feed-62730 Fri, 04 Aug 2017 15:29:50 GMT Toronto Home Prices Suffer Worst Monthly Decline in 17 Years http://implode-explode.com/viewnews/2017-08-04_TorontoHomePricesSufferWorstMonthlyDeclinein17Years.html The benchmark Toronto property price, which tracks a typical home over time, dropped 4.6 percent to C$773,000 ($613,000) from June. That's the biggest monthly drop since records for the price index began in 2000, according to Bloomberg calculations, and brings prices down to roughly March levels. Prices are still up 18 percent from the same month a year ago, according to the Toronto Real Estate Board.

Transactions tumbled 40 percent to 5,921, the biggest year-over-year decline since 2009, led by detached homes. The average price, which includes all property types, rose 5 percent to C$746,218 from July 2016. That compares with a 17 percent increase at this time last year.

...

Three levels of government have introduced housing regulations since October that pushed out many potential buyers. The measures were seen as necessary to cool prices climbing at an unsustainable pace. Meanwhile, shares of Home Capital Group Inc. imploded in the spring after the alternative mortgage lender failed to disclose the extent of fraudulent mortgage activity, though it has since stabilized.

]]>
iehi-feed-62727 Thu, 03 Aug 2017 19:33:34 GMT Report: New York Apartment Vacancies Projected to Soar thru 2018 http://implode-explode.com/viewnews/2017-08-03_ReportNewYorkApartmentVacanciesProjectedtoSoarthru2018.html A new report predicts New York City apartment vacancy rates will soar to more than 11% by the end of next year. The scenario, which some local housing analysts rejected, would mean a grim reckoning for landlords.

The forecast, by Ten-X Commercial, an online marketplace for real estate, said rents will slide as thousands of apartments in new buildings come on the market. It noted that the rate of job growth, a driver of the rental market, already has begun to slow.

New York's vacancy rate, typically in the low single digits, is 3.8%, below the national rate of 4.4%...

...

The report put New York City at the No. 1 position among "top sell markets," where owners of multifamily properties "might consider selling" because of the prospect of declining owner incomes. Nearly 10,000 new apartments in large buildings--those with at least 40 units--have hit the market since 2016, a total that is due to exceed 40,000 by the end of 2018, according to the report.

Rents, after landlord concessions, already are falling, the report noted, and it predicted that rents will suffer average annual declines of 2.7% through 2020. Owner operating income, or income after subtracting operating expenses, will decline by an average of 4.5% through 2020, the report said.

]]>
iehi-feed-62720 Wed, 02 Aug 2017 15:59:19 GMT New Fannie Rule: "Bring Us Your Poor, Your Tired, Your Student-Loan-Debt-Overloaded..." http://implode-explode.com/viewnews/2017-08-02_NewFannieRuleBringUsYourPoorYourTiredYourStudentLoanDebtOverload.html The new statement from Fannie Mae makes it clear:  the reduced payment can be used, even when the payment is $0. According to Fannie Mae, "if the lender obtains documentation to evidence the actual monthly payment is $0, the lender may qualify the borrower with the $0 payment as long as the $0 payment is associated with an income-driven repayment plan."

This is important, because the payment calculation for a student loan (10% of the discretionary income) is different from the DTI requirement of a mortgage. Many Americans could find it easier to qualify for a mortgage while in student loan debt.

]]>
iehi-feed-62719 Wed, 02 Aug 2017 15:57:20 GMT With LIBOR Dead, $400 Trillion In Assets Are Stuck In Limbo http://implode-explode.com/viewnews/2017-08-02_WithLIBORDead400TrillionInAssetsAreStuckInLimbo.html iehi-feed-62692 Fri, 28 Jul 2017 21:30:37 GMT Mark Hanson Reveals "The Next Housing Bubble" http://implode-explode.com/viewnews/2017-07-28_MarkHansonRevealsTheNextHousingBubble.html iehi-feed-62682 Fri, 28 Jul 2017 00:26:06 GMT Does Specialized Loan Servicing Discriminate Against People of Color? http://implode-explode.com/viewnews/2017-07-27_DoesSpecializedLoanServicingDiscriminateAgainstPeopleofColor.html iehi-feed-62680 Thu, 27 Jul 2017 19:40:32 GMT The rise and fall of the property-owning democracy (UK) http://implode-explode.com/viewnews/2017-07-27_TheriseandfallofthepropertyowningdemocracyUK.html iehi-feed-62675 Thu, 27 Jul 2017 16:19:54 GMT Fact-Checking Website Snopes About To Collapse http://implode-explode.com/viewnews/2017-07-27_FactCheckingWebsiteSnopesAboutToCollapse.html iehi-feed-62660 Wed, 26 Jul 2017 14:24:18 GMT Australian housing market at risk of crash: UBS http://implode-explode.com/viewnews/2017-07-26_AustralianhousingmarketatriskofcrashUBS.html iehi-feed-62654 Tue, 25 Jul 2017 22:21:44 GMT Bank of England warns of complacency over big rise in personal debt http://implode-explode.com/viewnews/2017-07-25_BankofEnglandwarnsofcomplacencyoverbigriseinpersonaldebt.html In its toughest warning yet about the possibility of a rerun of the financial crisis that devastated the economy 10 years ago, Threadneedle Street admitted it was alarmed about the increase in the amount of money being borrowed on easy terms over the past year.

...

Over the past year, Brazier said, household incomes had grown by just 1.5% but outstanding car loans, credit card balances and personal loans had risen by 10%.

He added that terms and conditions on credit cards and personal loans had become easier. The average advertised length of 0% credit card balance transfers had doubled to close to 30 months, while advertised interest rates on £10,000 personal loans had fallen from 8% to around 3.8%, even though official interest rates had barely changed.

The past decade has seen the number of cars bought with a personal contract purchase (PCP) plan -- under which the car is effectively leased -- increase from one in five to four in five. Companies risk losing money if used car prices fall and Brazier said banks involved and the shareholders of car companies would "want to think very carefully about the risks".

]]>
iehi-feed-62646 Tue, 25 Jul 2017 01:05:59 GMT Here's what it looks like when the foreclosure ‘pig' moves through the housing-crisis ‘python' http://implode-explode.com/viewnews/2017-07-24_Hereswhatitlookslikewhentheforeclosurepigmovesthroughthehousingc.html iehi-feed-62645 Tue, 25 Jul 2017 01:04:44 GMT U.S. Existing Home Sales Decline 1.8% in June (VIDEO) http://implode-explode.com/viewnews/2017-07-24_USExistingHomeSalesDecline18inJuneVIDEO.html iehi-feed-62622 Thu, 20 Jul 2017 15:24:34 GMT Are Manhattan Bankruptcy Lawyers Misleading You About Foreclosures? http://implode-explode.com/viewnews/2017-07-20_AreManhattanBankruptcyLawyersMisleadingYouAboutForeclosures.html