Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63381 Sun, 10 Dec 2017 16:42:51 GMT Ditech Financial Attorneys Facing Criminal Arraignment http://implode-explode.com/viewnews/2017-12-10_DitechFinancialAttorneysFacingCriminalArraignment.html iehi-feed-63379 Sun, 10 Dec 2017 15:18:05 GMT Living in cars, working for Amazon: meet America's new nomads http://implode-explode.com/viewnews/2017-12-10_LivingincarsworkingforAmazonmeetAmericasnewnomads.html Despite a lack of hard numbers, anecdotal evidence suggests the ranks of American itinerants started to boom after the housing collapse and have kept growing.

The cause of the unmanageable household math that drives some people to become nomads is no secret.

Federal minimum wage is stalled at $7.25 an hour. The cost of shelter continues to climb. There are now only a dozen counties and one metro area where a full-time minimum-wage worker can afford a one-bedroom apartment at fair market rent.

At the same time, the top 1% now makes 81 times more than those in the bottom half do, when you compare average earnings. For American adults on the lower half of the income ladder -- some 117 million of them -- earnings haven't changed since the 1970s. This is not a wage gap -- it's a chasm.

The most widely accepted measure for calculating income inequality is a century-old formula called the Gini coefficient. What it reveals is startling. Today the United States has the most unequal society of all developed nations. America's level of inequality is comparable to that of Russia, China, Argentina and the war-torn Democratic Republic of the Congo.''

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iehi-feed-63378 Fri, 08 Dec 2017 21:59:08 GMT Trump promises heavy penalties for Wells Fargo http://implode-explode.com/viewnews/2017-12-08_TrumppromisesheavypenaltiesforWellsFargo.html President Trump on Friday tweeted that the he'd ensure stiff penalties against Wells Fargo over allegations of financial impropriety the day after a report emerged that federal fines are being reconsidered.

"Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased," Trump tweeted.

"I will cut Regs but make penalties severe when caught cheating!"

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iehi-feed-63377 Fri, 08 Dec 2017 21:57:50 GMT Dollar stores are booming because people are getting poorer http://implode-explode.com/viewnews/2017-12-08_Dollarstoresareboomingbecausepeoplearegettingpoorer.html As more and more US department stores close and malls are mothballed, Amazon is being blamed for the "retail apocalypse". But there's another dynamic crippling American retailers--a shrinking middle class exacerbated by a widening inequality gap. Between 1971 and 2015, the share of US income held by America's middle earners has contracted from 61% to 50%, according to Pew Research. Wealthy families had three times as much wealth as middle-income families in 1983; by 2013, they had seven times as much.

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In response to their own economic woes, middle-class consumers have shifted away towards discount retailers. The fastest-expanding retailers in the US are cheap, "fast-fashion" brands like Zara and H&M--and dollar stores. While the revenue of department stores in those malls is declining, Dollar General and Dollar Tree are growing at 6.4% and 7.5%, respectively. And investors have noticed, sending Dollar General's and Dollar Tree's stock up 23% and 36%, respectively, this year while the S&P Retail Index has been flat.

[The typical Dollar General customer profile is:] [The Customer] lives in a two-income household, making $40,000 per year before taxes; Employment has been stable but wage growth has been choppy. This year, her disposable income is around 2%, so $800 per year; This is well below her 20-year average of 3.5-3.8% and she is sensitive to price changes, by as little as a dime...

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iehi-feed-63375 Fri, 08 Dec 2017 15:26:06 GMT NAMBLA Is Going To Love Mr. Cooper Mortgage http://implode-explode.com/viewnews/2017-12-08_NAMBLAIsGoingToLoveMrCooperMortgage.html iehi-feed-63361 Tue, 05 Dec 2017 01:20:56 GMT Billionaire Welfare King Dan Gilbert Will Rake In Billions In Free Handouts http://implode-explode.com/viewnews/2017-12-04_BillionaireWelfareKingDanGilbertWillRakeInBillionsInFreeHandouts.html iehi-feed-63359 Sun, 03 Dec 2017 15:56:43 GMT Trump Wants to Dismantle Elizabeth Warren's Agency. Good Luck With That. http://implode-explode.com/viewnews/2017-12-03_TrumpWantstoDismantleElizabethWarrensAgencyGoodLuckWithThat.html The legal fight over the future of the CFPB began on Cordray's last day in office, when he ventured into another gray area to try to put English, his chief of staff, in charge of the bureau until Trump can get a permanent director confirmed. But the policy fight will continue long after the legal fight is settled. The White House is clearly eager to dismantle a pocket of liberal resistance inside Trump's Washington, even though polls suggest that the public overwhelmingly supports the bureau's work. It's only been in existence for six years, but its early leaders have tried to make it dismantle-proof.

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Cordray's final defeat was the congressional repeal of his "forced arbitration rule," which would have ensured that consumers could sue financial firms in court rather than getting locked into mandatory arbitration proceedings. He even wrote a letter begging Trump to veto the bill, to prevent American families from getting "cheated out of their hard-earned money and left helpless to fight back." But despite campaigning as a populist, Trump has governed as a corporatist, and gleefully signed the repeal in front of bank lobbyists and Republican lawmakers, while venting about Cordray's hostility to business.

Congress may strike down another Cordray rule shaking up the high-interest payday lending industry. But financial leaders say their real hope for the Trump era at the bureau is a less antagonistic approach to supervision and enforcement. They would also like to see Mulvaney remove its complaint database from public view, so that companies are no longer tarred by allegations without due process. They say the aggression of the CFPB has made consumer credit more expensive and less efficient, forcing lenders to invest in lawyers and compliance officers and then pass the costs along to their customers.

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one thing you don't hear financial leaders say anymore is that the CFPB should be abolished, even though they once warned that its creation would cripple financial services in America. The Wall Street reform law of 2010 transferred authorities from seven federal agencies over 18 consumer protection laws to the CFPB, and it's hard to imagine how they could be transferred back. The critics complain about the way the bureau is structured, and its adversarial approach to business, but they no longer clamor for its demise.

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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-63345 Fri, 01 Dec 2017 16:13:25 GMT The Dirty Shopping Season Secret http://implode-explode.com/viewnews/2017-12-01_TheDirtyShoppingSeasonSecret.html  Black Friday results mean absolutely nothing at all. Not for the U.S. economy, and not even for the retailers themselves. Most of the stuff sold on Black Friday was going to be sold during the holiday season anyway.  What retailers have done is brought it forward into one weekend and marked down the prices, damaging margins. It is not a smart move on their part.

The interesting thing about all this Black Friday perusing is that most of it is wrong. The numbers will be revised several times before the end of December, and many erroneous conclusions will be reached based on incomplete data.

Even highly accurate numbers wouldn't tell you much. Consider the fact that in 2007, Black Friday sales were up 3.2% after an impressive gain of 6.2% the year before. Looking at that data, one would think the economy was in great shape.

Of course, we all know now that precisely the opposite was true, as toxic real estate assets were building up on bank balance sheets, and the economy was about to fall off the precipice. Like I said, Black Friday sales tell us nothing about the health or direction of the economy.

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iehi-feed-63341 Wed, 29 Nov 2017 16:54:13 GMT The next big thing at Hudson Yards: free rent and no security deposits http://implode-explode.com/viewnews/2017-11-29_ThenextbigthingatHudsonYardsfreerentandnosecuritydeposits.html iehi-feed-63319 Wed, 22 Nov 2017 18:20:41 GMT Flat-pack home costs $32K and can be built in six hours http://implode-explode.com/viewnews/2017-11-22_Flatpackhomecosts32Kandcanbebuiltinsixhours.html It comes in a variety of sizes, ranging from a 290-square-foot tiny home for $32,800 to a 904-square-foot family home which will set you back $72,650. It also has the eco-friendly capacity to become completely off-grid with solar panels and LED lighting.

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It will cost you between $2,000 to $2,600 per unit to get it delivered to London.

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iehi-feed-63313 Mon, 20 Nov 2017 17:16:24 GMT Its Time To Say Sayonara To Federally Funded CRA Housing Agencies http://implode-explode.com/viewnews/2017-11-20_ItsTimeToSaySayonaraToFederallyFundedCRAHousingAgencies.html iehi-feed-63312 Mon, 20 Nov 2017 17:13:55 GMT Is Flagstar Bank Playing Low-Income Borrowers For Chumps? http://implode-explode.com/viewnews/2017-11-20_IsFlagstarBankPlayingLowIncomeBorrowersForChumps.html iehi-feed-63309 Sat, 18 Nov 2017 20:48:41 GMT Wells Fargo Consumer Lending Chief Fired For Being A Big Mouth http://implode-explode.com/viewnews/2017-11-18_WellsFargoConsumerLendingChiefFiredForBeingABigMouth.html iehi-feed-63302 Sat, 18 Nov 2017 00:09:40 GMT How racist official housing policies supercharged today's US wealth gap http://implode-explode.com/viewnews/2017-11-17_HowracistofficialhousingpoliciessuperchargedtodaysUSwealthgap.html In the postwar period, white Americans were given attractive, government-subsidized mortgages to move to all-white suburbs, the best known of which was New York's Levittown, that were not accessible to blacks and other minority groups. That helped white families that benefited from those mortgages to build housing wealth.

The Federal Housing Administration at the time not only "refused to insure mortgages in predominantly African American neighborhoods" but also actively subsidized "the movement of white families out of cities into single-family homes in the suburbs," Rothstein said.

Racial segregation was built into public-housing policy. Contracts in suburban subdivisions were made with an FHA subsidy that explicitly required that no blacks be allowed to move in, either initially or through future sales.

All those policy decisions led directly to the race gaps we see now. "Without federal government policy of this kind we would not have the kind of segregation in any metropolitan area today," Rothstein said.

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iehi-feed-63295 Fri, 17 Nov 2017 18:03:37 GMT Operator Of Fraudulent Predatory Lending Scheme Found Guilty http://implode-explode.com/viewnews/2017-11-17_OperatorOfFraudulentPredatoryLendingSchemeFoundGuilty.html iehi-feed-63293 Thu, 16 Nov 2017 17:11:03 GMT The Shock of Sweden's Housing Market is Hitting the Country's Currency http://implode-explode.com/viewnews/2017-11-16_TheShockofSwedensHousingMarketisHittingtheCountrysCurrency.html Can a central bank steer the housing market? Not so long ago, Sweden's Riksbank decided: no. Now, there's a risk that decision may backfire as the biggest property market in Scandinavia risks sinking into a correction.

The evidence of price declines was so worrying on Tuesday that it contributed to a 1.5 percent slump in the krona against the euro. A weak currency puts the Riksbank's inflation target at risk. So should it be looking at the housing market more closely?

Developments in Sweden's housing market "could spark some doubts at the Riksbank as it may affect the overall economic outlook and inflation," Nordea analyst Andreas Wallstrom said in a note.

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iehi-feed-63290 Wed, 15 Nov 2017 18:39:51 GMT Richard Cordray is stepping down as head of CFPB (RESTORATION OF BANKSTERS IS COMPLETE!) http://implode-explode.com/viewnews/2017-11-15_RichardCordrayissteppingdownasheadofCFPBRESTORATIONOFBANKSTERSIS.html Richard Cordray, one of the few remaining Obama-era banking regulators, said on Wednesday that he plans to step down as head of the Consumer Financial Protection Bureau by the end of the month, clearing the way for President Trump to remake a watchdog agency loathed by Republicans and Wall Street.

Cordray's decision comes just a month after the CFPB suffered a major rebuke from Republicans in Congress who took the unusual step of blocking an agency rule that would have allowed consumers to sue their banks for the first time. Cordray appealed to President Trump directly not to sign the legislation but was rebuffed.

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With Cordray's departure, the aggressive regulatory structure put in place by the Obama administration in the wake of the global financial crisis has been nearly entirely replaced. The head of the Securities and Exchange Commission has been replaced by a former Wall Street lawyer and the Senate is moving to approve Trump's pick to lead the Office of the Comptroller of the Currency, another important banking regulator. The head of the Federal Deposit Insurance Corp., Martin Gruenberg, has said he will step down at the end of the month.

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The agency has been controversial among Republicans since its inception. Critics complain that CFPB has made it more difficult for people to get a mortgage loan and has overstepped its power to regulate some industries, including auto loans.

More difficult to get a mortgage?! How horrible. It's not like that was ever needed in our recent past (oh, 2007, you say? That's like, a million years ago...)

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iehi-feed-63288 Wed, 15 Nov 2017 17:34:18 GMT Household debt rises by $116 billion as credit-card delinquencies pile up http://implode-explode.com/viewnews/2017-11-15_Householddebtrisesby116billionascreditcarddelinquenciespileup.html iehi-feed-63283 Tue, 14 Nov 2017 19:56:57 GMT Subprime Auto Delinquency Is Near Crisis Levels at Non-Bank Lenders http://implode-explode.com/viewnews/2017-11-14_SubprimeAutoDelinquencyIsNearCrisisLevelsatNonBankLenders.html There's a growing rift in car debt: Delinquent subprime loans are nearing crisis levels at auto finance companies, while loan performance at banks and credit unions continues to improve, data from the Federal Reserve Bank of New York show.

Almost 9.7 percent of subprime car loans made by non-bank lenders -- including private-equity-backed firms catering to car dealers -- were more than 90 days past due in the third quarter, the highest rate in more than seven years, according to the New York Fed's quarterly report on household debt and credit. That's more than double the 4.4 percent delinquency rate for subprime loans made by traditional banks, a number that's been falling pretty steadily since the end of the financial crisis.

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Auto finance companies have long dominated the subprime lending area, originating and holding more than 70 percent of auto loans for the riskiest borrowers, according to the New York Fed. Their share has almost doubled since 2011 and now comprises more than $200 billion after years of booming car sales and fierce competition. Meanwhile, many traditional banks have been trimming their portfolios to curb exposure to riskier auto loans.

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There's $1.2 trillion in auto loans outstanding in the U.S., up $23 billion from the previous quarter. About 20 percent of new car loan originations are subprime, meaning the borrowers have a credit score below 620, according to the Fed report.

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