Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-54784 Fri, 22 Aug 2014 20:08:43 GMT Draghi Says ECB Ready to Do More http://implode-explode.com/viewnews/2014-08-22_DraghiSaysECBReadytoDoMore.html iehi-feed-54782 Fri, 22 Aug 2014 17:53:48 GMT Yellen Facing Hard Call on When Labor Market Has Healed http://implode-explode.com/viewnews/2014-08-22_YellenFacingHardCallonWhenLaborMarketHasHealed.html In her remarks, Yellen repeated the FOMC statement that "underutilization of labor resources still remains significant." Much of her 16-page speech walked through measures of labor-market "slack" that Yellen uses -- such as the number of people employed part-time who prefer full-time work -- and how much of that slack might be related to weak demand as opposed to longer-term trends...

Because measuring slack is an inexact science, the debate on the committee is likely to intensify if labor markets continue to improve... Other gauges Yellen watches continue to show weakness. The labor force participation rate, at 62.9 percent last month, is near the lowest since 1978. Average hourly earnings are 2 percent higher than a year ago, barely outpacing the 1.6 percent annual gain in the Fed's main inflation gauge.

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iehi-feed-54781 Fri, 22 Aug 2014 16:39:17 GMT Alasdair MacLeod Talks De-Dollarization; Eastern Takeover of Gold Trading http://implode-explode.com/viewnews/2014-08-22_AlasdairMacLeodTalksDeDollarizationEasternTakeoverofGoldTrading.html iehi-feed-54779 Fri, 22 Aug 2014 16:29:30 GMT CFR Shocker: The Ukraine Crisis Is the West's Fault http://implode-explode.com/viewnews/2014-08-22_CFRShockerTheUkraineCrisisIstheWestsFault.html iehi-feed-54777 Fri, 22 Aug 2014 14:50:54 GMT Foreigners Dump Record Amount of US Securities, But Who the Heck Is Still Buying? http://implode-explode.com/viewnews/2014-08-22_ForeignersDumpRecordAmountofUSSecuritiesButWhotheHeckIsStillBuyi.html iehi-feed-54776 Fri, 22 Aug 2014 14:47:44 GMT Nobel guru fears it may be nigh impossible to stop deflation http://implode-explode.com/viewnews/2014-08-22_Nobelgurufearsitmaybenighimpossibletostopdeflation.html Christopher Sims -- a monetary expert, who now thinks money indicators have been rendered "essentially obsolete" by modern finance -- says it may be impossible to reverse deflation in the Western economies by any normal means, in which case we are in trouble.

He argues that the public (including investors) are convinced that there will have to be some sort of payback for all the debts accumulated during the great era of leverage and excess. They have "internalised" the prospect of future tax rises and spending that will make them feel poorer.

...

By the same token businesses are putting off investment and hoarding cash in anticipation of a hit to come. We may be deluding ourselves in thinking that companies will soon be confident enough to let rip with a fresh burst of spending and investment. They may just sit on their money for year after year.

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iehi-feed-54775 Fri, 22 Aug 2014 14:45:21 GMT "Hopium": Philly Fed Surges To Highest Since March 2011 Despite Plunge In Jobs & New Orders http://implode-explode.com/viewnews/2014-08-22_HopiumPhillyFedSurgesToHighestSinceMarch2011DespitePlungeInJobsN.html iehi-feed-54774 Fri, 22 Aug 2014 14:44:17 GMT The Schizophrenic US Housing Market In One Chart http://implode-explode.com/viewnews/2014-08-22_TheSchizophrenicUSHousingMarketInOneChart.html iehi-feed-54773 Fri, 22 Aug 2014 14:43:18 GMT High-frequency trading critic Chilton joins HFT lobby effort http://implode-explode.com/viewnews/2014-08-22_HighfrequencytradingcriticChiltonjoinsHFTlobbyeffort.html iehi-feed-54772 Fri, 22 Aug 2014 00:01:26 GMT Swiss Referendum May End Gold Sales;Force Repatriation And 20% Holding http://implode-explode.com/viewnews/2014-08-21_SwissReferendumMayEndGoldSalesForceRepatriationAnd20Holding.html iehi-feed-54771 Thu, 21 Aug 2014 20:40:49 GMT Don't Hold Breath for Homeowner Help in $16.5bn Bank of America deal http://implode-explode.com/viewnews/2014-08-21_DontHoldBreathforHomeownerHelpin165bnBankofAmericadeal.html iehi-feed-54770 Thu, 21 Aug 2014 18:49:11 GMT Janet Tavakoli on Derivatives: "Complete Irresponsibility in Financial Reform" (VIDEO) http://implode-explode.com/viewnews/2014-08-21_JanetTavakolionDerivativesCompleteIrresponsibilityinFinancialRef.html iehi-feed-54766 Thu, 21 Aug 2014 13:23:24 GMT Why Bank of America deal won't cost it $17B http://implode-explode.com/viewnews/2014-08-21_WhyBankofAmericadealwontcostit17B.html iehi-feed-54765 Thu, 21 Aug 2014 13:20:19 GMT Fed debates merits of earlier rate hike given U.S. jobs gains http://implode-explode.com/viewnews/2014-08-21_FeddebatesmeritsofearlierratehikegivenUSjobsgains.html The U.S. Federal Reserve hinted on Wednesday that a surprisingly strong jobs market recovery could lead it to raise interest rates earlier than it had been anticipating.

At the same time, most Fed officials wanted further evidence before changing their view on when rates should rise, according to the minutes from the central bank's July 29-30 meeting.

...

In a slight shift from the views expressed at the Fed's June policy meeting, the minutes said "most" Fed officials supported re-investing the maturing securities in the central bank's vast portfolio until sometime after its first rate hike. The minutes of the previous meeting said only that "many" supported this approach.

Notice the latter part... so the only substantial change in these minutes is that now the Fed definitely wants to re-invest its QE-acquired portfolio rather than "running it off"... yet this is not being taken as a dovish release.

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iehi-feed-54764 Thu, 21 Aug 2014 13:17:17 GMT Credit Swaps Polished in $19 Trillion Derivative Overhaul http://implode-explode.com/viewnews/2014-08-21_CreditSwapsPolishedin19TrillionDerivativeOverhaul.html iehi-feed-54761 Thu, 21 Aug 2014 13:12:04 GMT Argentina bonds, peso reel on country's debt swap plan http://implode-explode.com/viewnews/2014-08-21_Argentinabondspesoreeloncountrysdebtswapplan.html iehi-feed-54760 Wed, 20 Aug 2014 20:05:16 GMT Investors dine on fresh menu of credit derivatives http://implode-explode.com/viewnews/2014-08-20_Investorsdineonfreshmenuofcreditderivatives.html Some market participants say the rise of these derivatives raises questions about the effectiveness of financial reform undertaken since 2008. While standardised derivatives such as interest rate swaps are now transacted in exchange-type venues and centrally cleared, the flourishing area of opaque products are not, and moreover there are few records of activity that regulators can monitor.

"We've reformed nothing," says Janet Tavakoli, president of Tavakoli Structured Finance. "We have more leverage and more derivatives risk than we've ever had."

...

"The markets don't really need a Lehman or even Lehman-lite event for a credit dislocation," says Manish Kapoor, managing principal at hedge fund West Wheelock Capital. "You just need spreads to widen out or rates to go up for a significant impact on collateral movement for derivatives."

...

The use of options tied to CDS indices, known as "swaptions", has grown sharply, buoyed in part because the instruments are not required to be centrally cleared. Such swaptions allow investors to protect their portfolios from large movements in markets, known as "tail risk".

More than $60bn of CDS index options currently exchange hands each week -- up from just $2bn traded per month back in 2005, according to Citigroup analysts.

Bob Douglass, head of credit electronic trading at Barclays, says the bank is excited about the future of these swaptions: "It's one of the really bright spots in the world of credit derivatives insofar as growth goes. We're ramping up our capacity for this."

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iehi-feed-54759 Wed, 20 Aug 2014 20:00:11 GMT Goldman to face Libya's sovereign wealth fund in court over trades http://implode-explode.com/viewnews/2014-08-20_GoldmantofaceLibyassovereignwealthfundincourtovertrades.html iehi-feed-54755 Wed, 20 Aug 2014 14:32:56 GMT Is the [New, "fraud-free"] LBMA Silver Price more transparent than the Fix? Not yet! http://implode-explode.com/viewnews/2014-08-20_IstheNewfraudfreeLBMASilverPricemoretransparentthantheFixNotyet.html iehi-feed-54752 Wed, 20 Aug 2014 14:23:08 GMT China Grabbing Gold Trade: Allows 3 more banks to import gold; Exchanges Bloom, Renmimbi Gold Trading Looms http://implode-explode.com/viewnews/2014-08-20_ChinaGrabbingGoldTradeAllows3morebankstoimportgoldExchangesBloom.html A pair of articles came our way on this topic:

1. China allows 3 more banks including StanChart to import gold -sources. Note that grabbing pricing power and avoiding manipulation are now discussed in cleartext:

China has allowed three more banks, including a foreign lender, to import gold, sources with direct knowledge of the matter said, as the world's top gold buyer gears up for its strongest effort yet to gain pricing power of the metal.]

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China and other Asian gold trading centres such as Singapore are calling for more localised pricing of the precious metal as they seek alternatives to the so-called London fix, the global benchmark for spot gold prices, which is being investigated by regulators on suspicion that it may have been manipulated.

2. Koos Jansen: East Asia Geared Up For RMB Gold Trading:

In comparison, on the COMEX the weekly volume was 2,092 tonnes and it's estimated that in the London Bullion Market 25,000 tonnes are being traded weekly. But will the western paper markets be able to stay in the driver's seat of the gold market? We know China is developing it's market infrastructure not only for physical gold trade, but also to expand paper trading to steal pricing power from the dominant forces in the West and to promote the internationalization of the renminbi.

Bloomberg recently reported the SGE will launch gold trading in the Shanghai Free Trade Zone (FTZ) on September 26. From what was disclosed previously by the SGE this will likely be a gold-backed spot contract traded through the SGE's subsidiary the Shanghai International Gold Trading Center. The next step would be the launch of gold derivatives. According to Bloomberg the FTZ hosts a vault capable of storing 1,500 tonnes of gold. If this vault is in addition to the 2,000 tonnes vault opened in the FTZ by precious metals transportation and storage company Malca-Amit I do not know. Approximately at the same time as the SGE's international board will go live, the kilobar gold contract will be launched in Singapore.

The SGE international board will allow investors worldwide to trade gold in renminbi, which undoubtedly will lead to higher trade volumes on the SGE. The gold industry is fully prepared in East Asia for what might be a pricing shift, following the great physical shift of recent years

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