Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60082 Sun, 26 Jun 2016 18:27:56 GMT Bravo Brexit! | David Stockman http://implode-explode.com/viewnews/2016-06-26_BravoBrexitDavidStockman.html This time populist and insurgent politicians are not going to roll-over for the rule of unelected central bankers and the international financial apparatchiks of the IMF and related institutions.

In that context, it can be confidently said that the Eurozone and ECB are finished. That's because the monstrously inflated euro-bond market that Draghi created will implode if the front-running speculators lose confidence in the scheme.

At length, it will become evident that Draghi's "whatever it takes" gambit was the single most foolish act in the history of central banking. It assumed that the rule of the financial elite was limitless and endless.

Brexit proves that both assumptions are wrong. Now every nook and cranny of the world's bloated and radically mispriced financial casinos will face the same shock to confidence.

]]>
iehi-feed-60081 Sun, 26 Jun 2016 14:53:07 GMT Britain's Labour Party in turmoil over Brexit vote results http://implode-explode.com/viewnews/2016-06-26_BritainsLabourPartyinturmoiloverBrexitvoteresults.html The leader of Britain's opposition Labour Party has vowed not to step down amid challenges to his leadership as the fallout from the UK's momentous vote to leave the European Union continues.

Four senior MPs resigned from Labour leader Jeremy Corbyn's shadow cabinet Sunday, and a fifth was sacked by Corbyn for reportedly plotting against his leadership in the wake of Britain's startling vote to leave the EU in last Thursday's referendum.

... Corbyn, who became leader of the Labour Party in September, has been criticized for his lackluster performance in campaigning for the "Remain" camp.

]]>
iehi-feed-60080 Sun, 26 Jun 2016 14:38:56 GMT MIchael Hudson: The Slow Crash http://implode-explode.com/viewnews/2016-06-26_MIchaelHudsonTheSlowCrash.html iehi-feed-60079 Sun, 26 Jun 2016 14:29:01 GMT How They Capped The Gold Price Rise In Brexit http://implode-explode.com/viewnews/2016-06-26_HowTheyCappedTheGoldPriceRiseInBrexit.html As turmoil shook the global markets, gold shot higher and, at one point, was up nearly $100. However, within hours it had given back nearly half of those gains and then spent the remainder of the day in am unusual and very tight trading range while virtually every other "market" was rocked with volatility throughout the trading day... The all-important question of the day is: How and why was this done? ... What does the data show? On Friday, with global markets in turmoil and precious metals markets rallying significantly, The Bullion Banks on the Comex issued brand new supply of nearly 60,000 new paper gold contracts!

...

Did the world's gold producers all suddenly decide to forward sell and hedge 186 metric tonnes of future production yesterday, just as the most significant economic event in eight years was beginning to unfold? OR: Did the Bullion Banks suddenly put up a few million ounces of their own gold and then lever it up a few times and issue 60,000 new contracts based upon this collateral deposit? Obviously, the answer to both questions is a big, bold NO!

...

Without this added supply...which grew total open interest by over 10% in one day!...how much further would the paper price of gold have risen yesterday?

See this linked piece on physical shortage in the large-scale physical gold market in the week leading up to Brexit.

]]>
iehi-feed-60078 Sun, 26 Jun 2016 02:14:43 GMT Brexit Blowback Hits Italian and Spanish Banks http://implode-explode.com/viewnews/2016-06-25_BrexitBlowbackHitsItalianandSpanishBanks.html iehi-feed-60077 Sat, 25 Jun 2016 14:25:33 GMT #Regrexit!! http://implode-explode.com/viewnews/2016-06-25_Regrexit.html iehi-feed-60076 Sat, 25 Jun 2016 14:17:00 GMT Why the Bitcoin Price Rise on Brexit News Matters http://implode-explode.com/viewnews/2016-06-25_WhytheBitcoinPriceRiseonBrexitNewsMatters.html ``The global financial community has come around to viewing Bitcoin as a transformational technology, and not so much a tech novelty, so the next logical step is for it to be thought of as a kind of "digital gold." "This is Bitcoin's coming out party as a global safe-haven investment. Amazing," tweeted Barry Silbert, founder and CEO of the Digital Currency Group and the creator of the Bitcoin Investment Trust.

We got a nice preview of this when Cyprus' banking system collapsed...

]]>
iehi-feed-60075 Sat, 25 Jun 2016 14:14:09 GMT Brexit: The Crisis Begins http://implode-explode.com/viewnews/2016-06-25_BrexitTheCrisisBegins.html A major complicating factor is that while unwinding the EU arrangements is comparatively easy (and that still means the process would take roughly two years), negotiating new trade relations is a far more time consuming process, and experts estimate it would take a minimum of five years and still could fail.

...

In the meantime, there are immediate consequences and risks. The Transatlantic Trade and Investment Partnership is probably dead. The sterling crisis and the less dramatic fall in the euro are likely to leave some UK and Eurozone financial institutions with large losses on net dollar and other foreign currency positions. While the British banks, given the magnitude of the sterling plunge, are the obvious focus of concern, many Eurobanks are undercapitalized. Worse, the Eurozone in theory will use a bank bail-in if any institution becomes impaired. We've warned that this is a prescription for bank runs. And it's not just banks that are exposed; operating businesses may have foreign currency commitments they will struggle to meet.

The British government is likely to lose its AAA rating, which also means higher funding costs for its banks, since their borrowing rates are at a premium to the local currency risk-free rate. A recession is almost certain, since the UK exports services and imports goods and many of its imports don't have ready substitutes, while the US and European banks will be doing everything they can to poach both British bankers and their clients, denting the UK balance of trade even more. Richard Smith also points out that a Brexit could imperil Ireland's ability to operate as a tax haven. And that raises the issue that both Scotland and Ireland supported Remain. Is a UK breakup in the offing?

]]>
iehi-feed-60074 Sat, 25 Jun 2016 14:08:38 GMT Brexit: Leaveniks have it. What next? - M. K. Bhadrakumar http://implode-explode.com/viewnews/2016-06-25_BrexitLeavenikshaveitWhatnextMKBhadrakumar.html iehi-feed-60073 Sat, 25 Jun 2016 14:04:28 GMT Global markets lose $2.1 trillion in Brexit rout http://implode-explode.com/viewnews/2016-06-25_Globalmarketslose21trillioninBrexitrout.html iehi-feed-60072 Fri, 24 Jun 2016 22:31:40 GMT AEP: Eurocrats Bred Splittist "Terroir-ists", Not Terrorists; Post-Brexit Ground Fraught, But Manageable http://implode-explode.com/viewnews/2016-06-24_AEPEurocratsBredSplittistTerroiristsNotTerroristsPostBrexitGroun.html threatening emanations out of Brussels and from remaining EU members, the case for optimally managing the Brexit doesn't look great... hopefully cooler heads will ultimately prevail...]]> iehi-feed-60071 Fri, 24 Jun 2016 19:59:26 GMT In Brexit victory, a defiant protest against globalization http://implode-explode.com/viewnews/2016-06-24_InBrexitvictoryadefiantprotestagainstglobalization.html "People are waking up to realize that, look, this is potentially a misguided protest vote, but it is a protest vote, and politics is not working for a lot of people," says Brian Klaas, a fellow in comparative politics at the London School of Economics. He says the results will demand greater responsiveness from politicians, so that frustrations do not drive greater nationalism and isolation.

...

The immediate shocks are still not known. But German Chancellor Angela Merkel spoke for many when she said, "There is no point beating about the bush: today is a watershed for Europe, it is a watershed for the European unification process."

...

or British society, this was much more than a response from the far-right, says Robert Colls, professor of cultural history at De Montfort University in Leicester, who was calling for a "Lexit," or a socialist response to Brexit, ahead of the vote. He says the choice to leave is a "late response to globalization" that has dislocated too many people and not been addressed by the Labour party, the majority of whose members backed the Remain camp.

The referendum itself, and the way it played out amid fear and falsifications, is also indicative of a broken system. "We haven't got a really good system for dealing with complicated matters," he says. "It has not been necessary for either side to say what will happen next. No one has had to spell it out. We just have to frighten each other."

For that reason he says he, like the majority who voted for Brexit, have no idea what to expect now. But they believe that they've actually made the more prudent choice with an EU they say simply does not work.

]]>
iehi-feed-60070 Fri, 24 Jun 2016 18:20:30 GMT London gold dealers report surge in coin, bar demand on Brexit vote http://implode-explode.com/viewnews/2016-06-24_LondongolddealersreportsurgeincoinbardemandonBrexitvote.html iehi-feed-60069 Fri, 24 Jun 2016 16:17:47 GMT Brexit: The System Cannot Hold http://implode-explode.com/viewnews/2016-06-24_BrexitTheSystemCannotHold.html iehi-feed-60068 Fri, 24 Jun 2016 15:05:38 GMT Hilsenrath's Take: `Brexit' Vote Means More Fed Delay http://implode-explode.com/viewnews/2016-06-24_HilsenrathsTakeBrexitVoteMeansMoreFedDelay.html Officials just a few weeks ago were looking at a move by their July 26-27 policy meeting. That now looks highly unlikely and a move at subsequent meetings becomes less likely, too, at least until it becomes clearer how events in Europe will affect the U.S. economic outlook.

The most important development from the Fed's perspective is a sharp rise in the dollar, which rose 2% against a broad basket of currencies.

The strengthening dollar is in effect a policy tightening for the U.S. that hurts exports and puts downward pressure on import prices. Stock market declines and the global flight from risky assets add to this tightening effect.

]]>
iehi-feed-60067 Fri, 24 Jun 2016 14:55:02 GMT Biggest U.S. Banks Seen Weathering Severe Stress in Fed Test http://implode-explode.com/viewnews/2016-06-24_BiggestUSBanksSeenWeatheringSevereStressinFedTest.html The Federal Reserve's stress tests of big banks found all 33 have enough capital to withstand a severe economic shock, though Morgan Stanley trailed the rest of Wall Street in a key measure of leverage.

...

This year, the hypothetical scenarios were seen as especially tough, calling for banks to assume -- in the most severe case -- that U.S. unemployment doubled to 10 percent while the markets tumbled and Treasury yields went negative. The banks would have experienced resulting loan losses of $385 billion, according to the Fed.

...

Now that banks have initial results, they can revise capital plans sent to regulators before CCAR comes out. Those who think their capital-distribution strategies were too ambitious can send a new version, as JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley did last year.

Bank of America -- which faced significant pressure to overcome its stumbling in the past two exams -- cleared the capital minimums for this initial test, exceeding last year's marks in all categories. The Fed had put the Charlotte, North Carolina-based lender on notice that it needed to get better this year. Chief Executive Officer Brian Moynihan responded by allocating more than $100 million to overhaul controls and he promoted veteran human-resources executive Andrea Smith to chief administrative officer, overseeing the stress-test submission.

We're not sure unemployment going to 10% is really all that "severe"... but the article is largely detail-free...

]]>
iehi-feed-60066 Fri, 24 Jun 2016 14:49:18 GMT Brexit Backlash: Dow Falls 350 Points as Markets React http://implode-explode.com/viewnews/2016-06-24_BrexitBacklashDowFalls350PointsasMarketsReact.html Blindsided by the winning "Leave" vote, global investors fled the market in search of safe havens such as gold, the Japanese yen, and U.S. Treasuries. As investors scrambled for any port in a storm, the dollar rose by more than 3 percent -- the most in one day since 1978 -- and gold soared to a two-year high, reaching 1,000 pounds an ounce.

...

"It's going to be ugly," Mike Ellingsen, a trader at U.S. Global Investors Inc in San Antonio, Texas, told Reuters. "Obviously markets were not pricing this in."

]]>
iehi-feed-60065 Fri, 24 Jun 2016 14:47:18 GMT 'Explosive shock' as Britain votes to leave EU, Cameron quits (EU ITSELF NOW TESTED) http://implode-explode.com/viewnews/2016-06-24_ExplosiveshockasBritainvotestoleaveEUCameronquitsEUITSELFNOWTEST.html Britain has voted to leave the European Union, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow since World War Two to the European project of forging greater unity.

...

World stocks saw more than $2 trillion wiped off their value, with indices across Europe heading for their sharpest one-day drops ever. Britain's big banks took a $100 billion battering, with Lloyds, Barclays and RBS falling as much as 30 percent at one point.

The United Kingdom itself could now break apart, with the leader of Scotland - where nearly two-thirds of voters wanted to stay in the EU - saying a new referendum on independence from the rest of Britain was "highly likely".

...

The EU for its part will be economically and politically damaged, facing the departure of a member with its biggest financial centre, a U.N. Security Council veto, a powerful army and nuclear weapons. The world's biggest trading bloc -- which rose out of the ashes of two world wars, fascist and communist totalitarianism to unite a continent of prosperous democracies -- will lose around a sixth of its economic output.

"It's an explosive shock. At stake is the break up pure and simple of the union," French Prime Minister Manuel Valls said. "Now is the time to invent another Europe."

]]>
iehi-feed-60064 Fri, 24 Jun 2016 04:00:25 GMT 'Leave' scents victory in Britain's EU vote, pound crashes http://implode-explode.com/viewnews/2016-06-23_LeavescentsvictoryinBritainsEUvotepoundcrashes.html Supporters of leaving the European Union seized the lead on Friday in the vote count from Britain's bitterly contested referendum, setting sterling on track for its biggest ever fall on world markets.

The British currency fell as much nine percent to a 30-year-low below $1.35, marking a sharper dive even than on 'Black Wednesday' in 1992 when financier George Soros was instrumental in pushing the pound out of the Exchange Rate Mechanism that predated the euro.

...

Bookmakers adjusted their odds to reflect the likelihood of a 'Brexit', with the Betfair Internet betting exchange putting that probability at 94 percent as tallies showed the Leave camp doing better than expected across large swathes of the country.

Such an outcome would shake the European Union to its core, potentially fuelling the rise of anti-EU movements across the continent and marking the start of a two-year divorce process that would create uncertainty for companies and investors.

With results declared from 282 of 382 voting districts plus parts of Northern Ireland, Leave was ahead by 51.6 percent to 48.4 in the referendum.

]]>
iehi-feed-60063 Thu, 23 Jun 2016 22:25:34 GMT IMF warns the US over high poverty http://implode-explode.com/viewnews/2016-06-23_IMFwarnstheUSoverhighpoverty.html