Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63405 Thu, 14 Dec 2017 21:49:30 GMT Glut of New Manhattan Luxury Apartments Masks Rent Decline http://implode-explode.com/viewnews/2017-12-14_GlutofNewManhattanLuxuryApartmentsMasksRentDecline.html Rent-free months, price cuts, gift cards, gym memberships. Manhattan's apartment landlords have been offering all sorts of enticements month after month, hoping to lure renters to their units amid a surge of new supply.

So why hasn't the median rent declined? Blame all those fancy units in just-built towers with swimming pools and yoga rooms, where rents are so far above the rest of the market that they're keeping the overall rate elevated -- even when the properties lease at a discount.

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iehi-feed-63403 Thu, 14 Dec 2017 19:59:34 GMT Famed Short-Seller Jim Chanos Says Tesla Headed for ‘Brick Wall' http://implode-explode.com/viewnews/2017-12-14_FamedShortSellerJimChanosSaysTeslaHeadedforBrickWall.html Chanos has been public about his short position in Tesla Inc. for more than a year. Last September, when Tesla was merging with SolarCity Corp., he called Elon Musk's automaker a "walking insolvency." He recently reiterated the critique on Bloomberg Television, describing Tesla as "structurally unprofitable" with a "way too leveraged" capital structure. Chanos famously bet early that Enron Corp. would fail and was later proven right.

Chanos warned Wednesday that the spate of executive departures at Tesla this year is reminiscent of Enron before its fall. He predicted Musk will even depart in the coming years for another of his companies, Space Exploration Technologies Corp. Morgan Stanley analyst Adam Jonas said earlier this month he could envision Tesla merging with SpaceX as the rocket company becomes a more time-consuming focus for Musk.

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iehi-feed-63402 Thu, 14 Dec 2017 19:29:15 GMT Bitcoin Is Greener Than Its Critics Think http://implode-explode.com/viewnews/2017-12-14_BitcoinIsGreenerThanItsCriticsThink.html iehi-feed-63401 Thu, 14 Dec 2017 02:44:30 GMT Fed boosts benchmark rate for third time this year http://implode-explode.com/viewnews/2017-12-13_Fedboostsbenchmarkrateforthirdtimethisyear.html The Federal Reserve is raising its benchmark interest rate for the third time this year, signaling its confidence that the U.S. economy remains on solid footing 8½ years after the end of the Great Recession.

The Fed is lifting its short-term rate by a modest quarter-point to a still-low range of 1.25 percent to 1.5 percent. It is also continuing to slowly shrink its bond portfolio. Together, the two steps could lead over time to higher loan rates for consumers and businesses and slightly better returns for savers.

The central bank says it expects the job market and the economy to strengthen further. Partly as a result, it foresees three additional rate hikes in 2018 under the leadership of Jerome Powell, who succeeds Janet Yellen as Fed chair in February.

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Most analysts have said they think the still-strengthening U.S. economy will lead the Fed to raise rates three more times next year. A few, though, have held out the possibility that a Powell-led Fed will feel compelled to step up the pace of rate hikes as inflation finally picks up and the economy, perhaps sped by the Republican tax cuts, begins accelerating.

For what it's worth (since the Fed funds rate has almost no meaning in the post-2008 regime, and all...). And on a related noteYellen Isn't Buying Trump's Tax Cut Talk of an Economic Miracle ...

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iehi-feed-63400 Thu, 14 Dec 2017 01:47:02 GMT Here Come the Bogus Bitcoin Scare Tactics http://implode-explode.com/viewnews/2017-12-13_HereCometheBogusBitcoinScareTactics.html iehi-feed-63399 Thu, 14 Dec 2017 00:08:22 GMT The Fight to Control the CFPB Is Just Heating Up http://implode-explode.com/viewnews/2017-12-13_TheFighttoControltheCFPBIsJustHeatingUp.html A federal court ruling last month, which denied CFPB Deputy Director Leandra English's request to block Mulvaney from assuming the directorship, was widely seen in the media as legitimizing Trump's appointment of Mulvaney and ending English's challenge. But that decision pertained to a temporary restraining order, and the court has not yet ruled on the merits of the case. English's lawyers filed a request for a preliminary injunction last week, and U.S. District Court Judge Timothy Kelly, a Trump appointee, set a December 22 hearing date for oral arguments. The ruling could come any time after that.

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In one of the briefs, more than 30 current and former members of Congress, including Dodd-Frank architects Barney Frank and Christopher Dodd, wrote that they intended the deputy director to take over in the absence of the director to insulate the CFPB from politics. "In creating the Bureau, lawmakers determined that it needed to be independent in order to fulfill its mission," the amici argued. Indeed, legislative history shows that Congress considered making the CFPB subject to the FVRA standard, but then rejected that approach, a position that the legislators who actually authored the law reinforce.

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nd because the CFPB director also serves on the board of the Federal Deposit Insurance Corporation and the Financial Stability Oversight Council, Trump has illegally brought a White House official into those venues as well, Conti-Brown charged.

These allegations about the legality of the Mulvaney appointment also show up in a second lawsuit, filed Tuesday by the Lower East Side People's Federal Credit Union in a U.S. District Court in New York. The credit union asserts that Mulvaney cannot serve as acting director and that English, instead, has the legal right to do so. "An Acting Director with no lawful authority to regulate the Credit Union is now regulating the Credit Union," the plaintiffs allege, causing what they say is direct harm to the business.

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In the meantime, the legal uncertainty and the scrutiny of Mulvaney's actions has forced him to change course on some decisions and proposals he previously made. He initially froze all payments to fraud victims. But after an outcry, he reversed himself two days later, allowing payments to be disbursed.

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iehi-feed-63398 Wed, 13 Dec 2017 23:31:21 GMT ‘Buy the Dip' Has Never Been More Popular in U.S. Stocks http://implode-explode.com/viewnews/2017-12-13_BuytheDipHasNeverBeenMorePopularinUSStocks.html "Investors no longer fear shocks but love them," a team led by global equity derivatives researcher Nitin Saksena wrote in a note Tuesday. "Since 2013, central banks have stepped in (or communicated that they may step in) to protect markets, leaving investors confident enough to ‘buy-the-dip.'"

Intraday realized volatility for the S&P 500 Index relative to the realized volatility in the open-close ratio for the benchmark gauge has soared to record highs this year, emblematic of an environment in which buying the dip has become gospel for traders, according to the bank's analysis of price action going back to 2003. This ratio is also above the 90th percentile for the Euro Stoxx 50 Index and Nikkei 225.

But as is obvious to All Thinking People(tm), only the Bitcoin market is "a bubble".

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iehi-feed-63397 Wed, 13 Dec 2017 22:16:30 GMT Republicans Say They Have a Deal on Tax Bill http://implode-explode.com/viewnews/2017-12-13_RepublicansSayTheyHaveaDealonTaxBill.html Senator John Cornyn of Texas, the majority whip, told reporters that Republicans will be briefed on the deal today, and that he is confident it will be approved next week.

The agreement drops the corporate tax rate to 21 percent from the current 35 percent rate and will go into effect in 2018, rather than 2019, as the Senate bill originally called for, according to a senior Republican congressional aide. The bill also allows individuals to deduct up to $10,000 in state and local taxes, split between property taxes and either income or sales taxes paid. That move is intended to alleviate the concerns of House Republicans, particularly those from California, over the bill's treatment of the state and local tax deduction.

Lawmakers also agreed to rescind the corporate alternative minimum tax, which was tucked into the Senate bill at the last minute as a way to pay for the $1.5 trillion bill. The inclusion of the corporate A.M.T. was criticized by many business groups, who said it would prohibit the ability of companies to use tax breaks such as the research and development tax credit.

The top individual income tax rate will drop to 37 percent, down from the current rate of 39.6 percent. But the rate will kick in for income levels below the $1 million cutoff outlined in both the House and Senate bills.

The conference bill will preserve the individual alternative minimum tax, which the House bill had eliminated and the Senate bill retained in a watered-down form. The conference version will apply to even fewer taxpayers than the Senate bill would have, the congressional aide said.

The agreement in principle appears to allow some high-earning business owners to claim an even larger tax break than the Senate bill would have. Negotiators agreed to keep the Senate's approach to provide a tax deduction for so-called pass-through companies, whose owners pay taxes on profits through the individual code. That deduction will likely be lower than the 23 percent deduction in the Senate-passed bill.

But, the aide said, the conference bill will include a House provision that would allow some pass-through owners with few employees -- but large amounts of investment in their businesses -- to bypass a limit on how much income qualifies for the preferential deduction.

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It is not clear if Republican senators will roundly endorse the deal, which would allow provisions that Senators Susan Collins of Maine and Marco Rubio of Florida had raised concerns about earlier this week. Ms. Collins has said she's not in favor of a lower individual rate and Mr. Rubio has pushed for a more generous child tax credit.

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iehi-feed-63396 Wed, 13 Dec 2017 22:14:55 GMT The S&P 2700 By Christmas, Maybe -- But Fed Still Not Draining Balance Sheet! http://implode-explode.com/viewnews/2017-12-13_TheSP2700ByChristmasMaybeButFedStillNotDrainingBalanceSheet.html iehi-feed-63395 Wed, 13 Dec 2017 17:04:48 GMT Mt. Gox Creditors, Now That Leftover Horde Worth Appx $3bln, Seek to Remove Exchange From Bankruptcy http://implode-explode.com/viewnews/2017-12-13_MtGoxCreditorsNowThatLeftoverHordeWorthAppx3blnSeektoRemoveExcha.html A group of major creditors of Japanese cryptocurrency exchange Mt. Gox have filed a court petition urging that the disgraced and now-defunct exchange be removed from bankruptcy, in order to prevent its CEO Mark Karpeles from walking away with a billion dollar profit.

According to a report by Financial Times, the legal bid to move the exchange out of bankruptcy and into civil rehabilitation comes in the wake of Bitcoin's recent price surge, after which the 202,185 Bitcoins held by the Mt. Gox trustee have risen to approximately $3 billion in value.

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Outrage ensued last month among creditors after it was revealed Karpeles stood to walk away from the trial as a multibillionaire, owing to a technicality in Japanese bankruptcy law. Currently, if Mt. Gox maintains its bankrupt status, the assets in the trustee's custody will be liquidated, and the payouts creditors receive will be in accordance with the exchange rate at the time the bankruptcy proceedings began in 2014 -- roughly $440 per Bitcoin, which is nothing in comparison to the current price of over $17,000 per Bitcoin. Karpeles, by comparison, will stand to collect a massive profit after liabilities have been paid off.

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iehi-feed-63394 Wed, 13 Dec 2017 05:27:26 GMT European Parliament Report Accuses Wilbur Ross of Insider Trading http://implode-explode.com/viewnews/2017-12-13_EuropeanParliamentReportAccusesWilburRossofInsiderTrading.html Earlier this year, Luke Ming Flanagan, an Irish politician and member of the European Parliament, the European Union's governing body, commissioned a report on the 2008 eurozone banking crisis. The final version of this report, written by two Irish financial analysts, was presented in Brussels last week to a group of 52 European Parliament members affiliated with left-leaning parties. And it included a section covering Ross' investment in the Bank of Ireland, in which he was a major shareholder and a member of the board of directors. The report alleges that when Ross sold off his holdings in the bank for a massive profit in 2014, he possessed inside information that the bank was relying on deceptive accounting practices to mask its losses and embellish its financial position.

Ross' involvement with the Bank of Ireland began in July 2011, when his hedge fund, WL Ross & Co., joined several institutional investors to purchase a 34.9 percent stake in the struggling financial firm for 1.12 billion euros ($1.6 billion). At the time, the deal "led to much head-scratching," according to the Irish Examiner. That's because Ross and the other investors obtained stock in the company at the low price of 10 euro cents a share just months after the bank received a 3.5 billion euro bailout from the Irish Central Bank and a guarantee of up to 10 billion more. (The bank's shares were trading at about 30 euro cents two months before the sale.) The Irish government's decision "to sell a large chunk of Bank of Ireland at the bottom of the market" so soon after the government's cash infusion had stabilized the institution "was on the face of it baffling," the newspaper reported.

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Ross sold near the top of the market. Since the 2015 admissions that the Bank of Ireland relied on flawed accounting methods, the bank's share prices have dropped significantly. Yet as a board member, Ross would have presumably been privy to the bank's most sensitive financial information, including its bookkeeping practices. This raises the question of what Ross knew when he sold off his shares. Was he aware that the losses the bank was deferring using flawed accounting would inevitably reappear and that he could get out of the company before the true state of its finances became clear?

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iehi-feed-63392 Tue, 12 Dec 2017 16:09:44 GMT Automatic Job Storm Coming | Mauldin http://implode-explode.com/viewnews/2017-12-12_AutomaticJobStormComingMauldin.html In one day, starting from nothing at all ("tabula rasa"), AlphaGo Zero learned to play chess, shogi, and Go at a superhuman level, beating the same systems that had beaten the best humans in the world... Systems like that are coming for your job. So if you think you're safe because you aren't an assembly-line worker or a retail cashier and don't work at the level of rote repetition, you could be wrong. These systems will only get better and take on ever more complex jobs.

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Now add in tax policy. I explained early this year in my open letters to the new US president that we would all be better off with a consumption tax like a VAT rather than we are currently with the income tax. Alas, I did not get my wish. Congress is right now "improving" the tax code in ways that may actually accelerate the automation trend.

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iehi-feed-63391 Tue, 12 Dec 2017 15:48:23 GMT Bitcoin: Will The Arrival Of Institutional Money Cause A New Price Surge? http://implode-explode.com/viewnews/2017-12-12_BitcoinWillTheArrivalOfInstitutionalMoneyCauseANewPriceSurge.html Oehman tells me "It's really about timing -- if you look back 12 months, the market cap of Bitcoin and cryptocurrency was $25 billion.

"Now we are close to $400 billion and we are talking about a completely different picture. It's really been a market where the products available haven't been geared towards institutional investors, but now we are starting to move towards that.

"They want to get involved with this somehow. The question I get all the time is ‘we are fine with allocating funds to this, but how do we do it?'

Oehman says that for a year or two now there has been a growing demand from institutional investors such as family offices representing high net worth individuals, for ways to invest in crypto currencies while still being covered by the same protections offered by more traditional markets.

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iehi-feed-63390 Mon, 11 Dec 2017 20:55:36 GMT Bitcoin Futures Deliver Wild Ride as Debut Brings Rally, Halts http://implode-explode.com/viewnews/2017-12-11_BitcoinFuturesDeliverWildRideasDebutBringsRallyHalts.html ``Futures on the world's most popular cryptocurrency surged as much as 26 percent in their debut session on Cboe Global Markets Inc.'s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers' expectations, while traffic on Cboe's website was so heavy that it caused delays and temporary outages. The website's problems had no impact on trading systems, Cboe said. Bitcoin's spot price rose.

"It is rare that you see something more volatile than bitcoin, but we found it: bitcoin futures," said Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia.

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"It was smooth, and bitcoin traders don't seem to be put off by futures," said Craig Erlam, senior market analyst in London at online trading firm Oanda. "There was a fear that short selling would have an adverse impact on price, but we haven't seen that yet."

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The roughly $1,300 difference reflects not only the novelty of the asset but also the difficulty of using the cash-settled futures to trade against the spot, strategists said.

"In a normal, functioning market, good old arbitrage would settle this," Ole Hansen, head of commodity strategy at Saxo Bank A/S in Hellerup, Denmark, said by email. "If they were deliverable you could arbitrage the life out of it."

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iehi-feed-63388 Mon, 11 Dec 2017 15:20:00 GMT NYC Townhouse in Contract for a Record $80 Million (DOWN FROM $114M!) http://implode-explode.com/viewnews/2017-12-11_NYCTownhouseinContractforaRecord80MillionDOWNFROM114M.html A roughly 20,000-square-foot mansion with its own red velvet movie theater and panic room is in contract for about $80 million, according to people with knowledge of the deal.

If it closes for that price, the property would become the most expensive townhouse ever sold in New York City, according to appraiser Jonathan Miller. The current record was set in 2006, when financier J. Christopher Flowers paid $53 million for the Harkness mansion on East 75th Street, Mr. Miller said.

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The townhouse at 12 East 69th St. is owned by Vincent Viola, the billionaire owner of the National Hockey League's Florida Panthers who was briefly President Donald Trump's nominee for secretary of the army, and his wife Teresa Viola. They paid $20 million for the property in 2005, according to public records.

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The house came on the market in 2013 for about $114 million but was delisted after a price cut to $98 million in 2014, according to listings website StreetEasy.com

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iehi-feed-63387 Mon, 11 Dec 2017 04:54:26 GMT Hotly anticipated bitcoin futures debut in sedate fashion http://implode-explode.com/viewnews/2017-12-10_Hotlyanticipatedbitcoinfuturesdebutinsedatefashion.html ``The eagerly anticipated launch of futures trading of the world's largest cryptocurrency bitcoin got off to a positive start on Sunday, with the price nearly 9 percent ahead after briefly slipping below its opening level.

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The price action was unlike the wild swings seen in past weeks. The first bitcoin future trades kicked off at 6 p.m. (2300 GMT) on CBOE Global Markets Inc's CBOE Futures Exchange, with January futures opening at $15,460, briefly dipping to a low of $15,420, and were last at $16,800, with 1,006 contracts traded.

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Heightened excitement ahead of the launch of the futures has given an extra kick to the cryptocurrency's scorching run this year.

The launch may indeed have caused an outage of the CBOE's website. The exchange said that due to heavy traffic on the CBOE Global Markets website on Sunday, the site "may be temporarily unavailable."

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Bitcoin fans appear excited about the prospect of an exchange-listed and regulated product and the ability to bet on its price swings without having to sign up for a digital wallet.

Others, however, caution that risks remain for investors and possibly even the clearing organizations underpinning the trades.

"You are going to open up the market to a whole lot of people who aren't currently in bitcoin," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

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iehi-feed-63383 Sun, 10 Dec 2017 20:07:23 GMT How the GOP tax cut could take money away from most Americans http://implode-explode.com/viewnews/2017-12-10_HowtheGOPtaxcutcouldtakemoneyawayfrommostAmericans.html If President Donald Trump and congressional Republicans end up paying for their proposed $1.4 trillion tax cut by reducing spending or raising taxes later on, most Americans making less than $86,000 would be worse off, according to a new report by the Tax Policy Center, a nonpartisan think tank.

Republicans have yet to say how they intend to pay for the tax cut. Originally, Treasury Secretary Steven Mnuchin argued the tax cut would completely pay for itself because the economy would grow substantially faster, a claim that has not been backed up by independent research. Congress' official scorekeepers estimate that the tax cut would add $1 trillion to the federal deficit, even after taking into account some additional economic growth.

At some point, that will have to be paid for, and top Republican lawmakers, including House Speaker Paul Ryan, R-Wis., have indicated they plan to take a hard look at welfare spending and other safety net programs for potential trimming.

The Tax Policy Center warns in its "Winners and Losers" report released Friday that paying for the tax cut by reducing programs that help the poor and lower middle class would leave many Americans in the bottom 60 percent in a worse spot than they would have been without the GOP tax bill.

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The House bill would cut taxes for 76 percent of Americans next year and raise taxes on just 7 percent, according to the Tax Policy Center. But those numbers look substantially different once the think tank factored in how to pay for the bill. If every household were required to pay the same amount to fund the tax cuts - roughly $1,200 - in 2018, then only 27 percent of Americans would get a cut and 73 percent of Americans would essentially be getting a tax hike. The vast majority of the families that would be worse off would be in the low and middle class.

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Critics of the report say the Tax Policy Center is running hypothetical scenarios. There are no proposals on the table to make draconian cuts or to make every American pay a fee or tax... But the Tax Policy Center says this is actually a pretty similar scenario to what the Trump budget proposed earlier this year with its cuts to various welfare and safety net programs that mostly impact moderate-income households. The Tax Policy Center is also assuming a modest increase on higher-income households.

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iehi-feed-63382 Sun, 10 Dec 2017 20:02:57 GMT How states that carried Trump to victory avoid one sticky part of the tax bill http://implode-explode.com/viewnews/2017-12-10_HowstatesthatcarriedTrumptovictoryavoidonestickypartofthetaxbill.html 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-63380 Sun, 10 Dec 2017 16:30:34 GMT Stockman - Peak Fantasy Time http://implode-explode.com/viewnews/2017-12-10_StockmanPeakFantasyTime.html ... when goods-producing jobs peaked at 25 million back in 1980, there were only 6.7 million jobs in leisure and hospitality. Today that sector employs 16.0 million part-time, low-pay workers or 2.4X the four decade ago level.

Yes, there is nothing wrong with these jobs or the workers who hold them, but the fact that they constitute a rapidly increasing share of the mix is powerful proof that the job market is not nearly as awesome as it is cracked up to be; and that the monthly BLS report is surely no measure at all of a rising standard of living in Flyover America.

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As it happens, [the number of breadwinner jobs] is virtually the same number posted by the BLS back in January 2001 when Bill Clinton was packing his bags to vacate the Oval office. In short, three presidents later---all of whom have claimed undying devotion to good jobs and rising living standards---and there is hardly a single new breadwinner job.

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What does our latest Oval Office occupant plan to do about this? Why nothing less than borrow $1.8 trillion from future taxpayers in order to enable corporations and other business to crank-out even bigger financial engineering distributions to shareholders in the form of dividends, stock buybacks and M&A deals.

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