Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62674 Thu, 27 Jul 2017 14:48:28 GMT Howard Marks Sounds the Alarm on Tech, Cryptocurrencies and Private Equity http://implode-explode.com/viewnews/2017-07-27_HowardMarksSoundstheAlarmonTechCryptocurrenciesandPrivateEquity.html iehi-feed-62673 Thu, 27 Jul 2017 01:20:54 GMT Greece arrests Russian suspected of running $4 billion bitcoin laundering ring http://implode-explode.com/viewnews/2017-07-26_GreecearrestsRussiansuspectedofrunning4billionbitcoinlaunderingr.html Police said "at least" $4 billion in cash had been laundered through a bitcoin platform since 2011 - the year BTC-e was founded - with 7 million bitcoins deposited, and 5.5 million bitcoins in withdrawals.

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Founded in 2011, BTC-e is one of the oldest and most obscure virtual currency exchanges, allowing users to trade bitcoin pseudonymously against fiat currencies, such as the U.S. dollar, and other virtual currencies. Until today, the people behind it had remained unknown.

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It is known in crypto-currency markets as one with the most relaxed standards for checking the identity of its users to combat money laundering, and for not collaborating with law enforcement.

This helped make BTC-e "a favorite money-laundering location," said James Smith, chief executive of Elliptic, a company that works with law enforcement to track illicit bitcoin transactions. The exchange has been connected to recent ransomware attacks, he said.

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iehi-feed-62672 Thu, 27 Jul 2017 01:19:05 GMT Facebook's rapid sales growth is slowing down http://implode-explode.com/viewnews/2017-07-26_Facebooksrapidsalesgrowthisslowingdown.html Facebook posted revenue of $9.3 billion for the June quarter, up 45% from the same period a year earlier. For any other company, 45% growth would be a phenomenal result, but not Facebook.

The company enjoyed an impressive five consecutive quarters of sales booming 50% or more thanks to its tremendous success making money from ads on mobile devices. That streak ended earlier this year.

Now the question is how much more will it slow down.

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iehi-feed-62670 Thu, 27 Jul 2017 01:12:47 GMT Steve Bannon Pushing For 44 Percent Marginal Tax Rate On The Very Rich http://implode-explode.com/viewnews/2017-07-26_SteveBannonPushingFor44PercentMarginalTaxRateOnTheVeryRich.html ... Steve Bannon is pushing for tax reform to include a new 44 percent top marginal tax rate, hitting people who earn more than $5 million a year, with the revenue paying for tax cuts for the rest, according to three people who've spoken to him recently.

The top rate is now 39.6 percent and most Republicans have been planning to lower it significantly as part of tax reform. The plan Trump put out previously would have only three brackets, with the top one brought down to 35 percent.

... the hike would pull in around $18 billion per year, or $180 billion over 10 years.

This actually quite shrewd (from a purely-political point of view) -- it would have a huge "solidarity effect", while bringing in comparatively little revenue compared to what we need to balance the budget (3% a year at best, roughly).

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iehi-feed-62669 Wed, 26 Jul 2017 22:38:39 GMT Fed, Leaving Rates Unchanged, Expects to Wind Down Stimulus ‘Relatively Soon' http://implode-explode.com/viewnews/2017-07-26_FedLeavingRatesUnchangedExpectstoWindDownStimulusRelativelySoon.html iehi-feed-62668 Wed, 26 Jul 2017 22:16:08 GMT Health care bill: Senate rejects full Obamacare repeal without Replace http://implode-explode.com/viewnews/2017-07-26_HealthcarebillSenaterejectsfullObamacarerepealwithoutReplace.html The Senate rejected a proposal from Republican lawmakers to repeal Obamacare on Wednesday, marking a significant milestone in the Republican Party's years-long political crusade to gut former President Barack Obama's legacy health care law. The vote was 45-55, with seven Republicans opposing the measure.

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The failed effort was a remarkable contrast from less than two years ago, when a Republican-controlled House and Senate passed an identical measure and sent it to Obama. He vetoed the bill. In 2015, the passage of that legislation was largely viewed as a political messaging exercise: GOP lawmakers were keenly aware that Obama would not sign it into law.

But now, with Republican President Donald Trump in the White House and ready to sign a bill, the stakes are real -- as are the realities of voting to repeal the current health care law without a replacement in place. The failure crystalized the new reality for Republicans: more than seven years after the enactment of Obamacare, there is growing recognition within the GOP that a straight repeal of the law is not viable.

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iehi-feed-62667 Wed, 26 Jul 2017 19:35:25 GMT The Value of Everything - Kunstler http://implode-explode.com/viewnews/2017-07-26_TheValueofEverythingKunstler.html iehi-feed-62666 Wed, 26 Jul 2017 18:46:47 GMT US sanctions have taken a big bite out of Russia's economy http://implode-explode.com/viewnews/2017-07-26_USsanctionshavetakenabigbiteoutofRussiaseconomy.html iehi-feed-62665 Wed, 26 Jul 2017 18:45:06 GMT BoAML says there are more 'zombie' companies in Europe now than pre-Lehman times http://implode-explode.com/viewnews/2017-07-26_BoAMLsaystherearemorezombiecompaniesinEuropenowthanpreLehmantime.html iehi-feed-62664 Wed, 26 Jul 2017 15:35:06 GMT Bolivia's President Declares 'Total Independence' from World Bank and IMF http://implode-explode.com/viewnews/2017-07-26_BoliviasPresidentDeclaresTotalIndependencefromWorldBankandIMF.html iehi-feed-62663 Wed, 26 Jul 2017 15:07:26 GMT Take money out of US, says Russell Investments top forecaster http://implode-explode.com/viewnews/2017-07-26_TakemoneyoutofUSsaysRussellInvestmentstopforecaster.html iehi-feed-62662 Wed, 26 Jul 2017 15:02:21 GMT How Big Of A Deleveraging Are We Talking About? http://implode-explode.com/viewnews/2017-07-26_HowBigOfADeleveragingAreWeTalkingAbout.html When credit creation can no longer be sustained the markets will begin to "clear" the excesses. It is only then, and must be allowed to happen, can resources be reallocated back towards more efficient uses. This is why all the efforts of Keynesian policies to stimulate growth in the economy have ultimately failed. Those fiscal and monetary policies, from TARP and QE to tax cuts, only delay the clearing process. Ultimately, that delay only potentially worsens the inevitable clearing process.

That clearing process is going to be very substantial. With the economy currently requiring roughly $3 of debt to create $1 of real, inflation-adjusted, economic growth, a reversion to a structurally manageable level of debt would involve a nearly $35 Trillion reduction of total credit market debt from current levels. 

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iehi-feed-62661 Wed, 26 Jul 2017 14:26:29 GMT Nobody Really Knows What the Fed Does, but They Think It's Bad Anyway http://implode-explode.com/viewnews/2017-07-26_NobodyReallyKnowsWhattheFedDoesbutTheyThinkItsBadAnyway.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-62659 Tue, 25 Jul 2017 23:27:11 GMT Och-Ziff Bets On Camp-Counselor Wunderkind Who Cut Teeth in Mortgage Collapse Aftermath for Redemption http://implode-explode.com/viewnews/2017-07-25_OchZiffBetsOnCampCounselorWunderkindWhoCutTeethinMortgageCollaps.html ... in the wake of a bribery scandal that spooked clients and blew away a third of its assets, the fund's fate is in many ways now in the hands of a little-known 34-year-old named Jimmy Levin... Back in February, Och shocked many on Wall Street by elevating Levin, the star of the firm's credit business, to co-chief investment officer and handing him an incentive package of $280 million. It's the kind of crazy pay you don't hear about in the industry much these days, and Och wagered a small personal fortune to make it happen, relinquishing 30 million of his own shares.

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Levin, who began working at Och-Ziff in 2006, is a largely unknown quantity beyond the firm's immediate universe. But he has a reputation there for something of a golden touch. His rise started in the aftermath of the financial crisis, as he persuaded the man who's now his co-CIO, David Windreich, to gamble on the rubbles of structured credit assets tied to the U.S. housing market and, later, on similarly roughed up securities in Europe, including Spanish regional debt that paid off.

The firm's main credit fund has turned in average gains of 13 percent since its 2011 inception, including an 18 percent return last year that made it one of the top performing funds in the industry. Back in 2012, credit trades guided by Levin notched $2 billion, accounting for more than half of the firm's total gains that year. The credit unit was pulling in such outsize returns that Levin was named global head of credit in 2013.

That growth, in fairness, came in the middle of a bull market -- junk-rated corporate bonds, for example, have returned more than 185 percent since the end of 2008 -- that lifted all credit assets for an extraordinary run, so much so that it can be argued it would've been hard not to make a lot of money.

"Was it luck? I don't know, maybe, I'm not sure it really matters," said Mike Rosen, chief investment officer at Angeles Investment Advisors, who has put money into Och-Ziff's credit-opportunities fund. "I do want to invest in lucky people -- that's better than investing with unlucky people."

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Och and Levin met when Levin was a counselor and water-skiing coach at a camp in Wisconsin where Och's children spent part of their summer. At first, Och sidestepped the younger man's pleas for a job at the hedge fund. After graduating from Harvard University with a degree in computer science, Levin worked for Sagamore Hill Capital Management and then Dune Capital, the now defunct hedge fund founded by Treasury Secretary Steve Mnuchin. Och finally hired Levin as a distressed analyst.

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iehi-feed-62658 Tue, 25 Jul 2017 23:19:03 GMT Trump Says Yellen, Cohn Both in Running to Be Fed Chair http://implode-explode.com/viewnews/2017-07-25_TrumpSaysYellenCohnBothinRunningtoBeFedChair.html iehi-feed-62657 Tue, 25 Jul 2017 22:34:01 GMT SEC concludes initial coin offerings are securities http://implode-explode.com/viewnews/2017-07-25_SECconcludesinitialcoinofferingsaresecurities.html iehi-feed-62656 Tue, 25 Jul 2017 22:29:23 GMT In Scaramucci, Wall Street finds an important White House ally http://implode-explode.com/viewnews/2017-07-25_InScaramucciWallStreetfindsanimportantWhiteHouseally.html To be sure, there's been a little head-scratching. Some on the Street had anticipated seeing Scaramucci in a role more closely tied to finance, not running the White House's message machine.

"The fact is that the appointment to a lot of us is sort of puzzling," said Michael Cohn, chief investment strategist at Atlantis Asset Management, a boutique advisory and money management firm in New York. Cohn also has attended SALT on multiple occasions and has interacted with Scaramucci. "He's a very smart guy -- intelligent, articulate per se. Maybe that'll play well."

On a sector level, analysts already are expecting Scaramucci to provide help to the banking sector, particularly at the top of the bracket. Jaret Seiberg at Cowen Washington Research Group expects that, among other things, the move will make it less of a possibility that a new version of the Glass-Steagall Act that separated commercial and investment banks will become a reality.

However, Seiberg cautions that Scaramucci will struggle to control a president who badly needs to focus on pushing through tax reform, infrastructure spending and raising the debt ceiling but instead seems preoccupied with battling his enemies on social media.

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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.

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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".

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iehi-feed-62653 Tue, 25 Jul 2017 22:19:49 GMT EU divided on how to answer Congress' sanctions bill against Russia http://implode-explode.com/viewnews/2017-07-25_EUdividedonhowtoanswerCongresssanctionsbillagainstRussia.html A bill agreed by U.S. Senate and House leaders foresees fines for companies aiding Russia to build energy export pipelines. EU firms involved in Nord Stream 2, a 9.5 billion euro ($11.1 billion) project to carry Russian gas across the Baltic, are likely to be affected.

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Markus Beyrer, director of the EU's main business lobby, Business Europe, urged Washington to "avoid unilateral actions that would mainly hit the EU, its citizens and its companies".

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The Commission could demand a formal U.S. promise to exclude EU energy companies; use EU laws to block U.S. measures against European entities; or impose outright bans on doing business with certain U.S. companies, an EU official said.

But if no such promise is offered, punitive sanctions such as limiting the access of U.S. companies to EU banks require unanimity from the 28 EU member states.

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Meanwhile there is little or no sign that the Western sanctions have had any tangible effect in Ukraine, as the Russian-backed rebellion in the country's industrial east continues unabated.

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