Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61550 Tue, 24 Jan 2017 02:21:17 GMT Citi mortgage units fined $28.8 million for foreclosure sleaze; 40k homeowners effected http://implode-explode.com/viewnews/2017-01-23_Citimortgageunitsfined288millionforforeclosuresleaze40khomeowner.html The Consumer Financial Protection Bureau ordered CitiFinancial Servicing and CitiMortgage to pay $28.8 million for giving "the runaround" to cash-strapped homeowners who were facing foreclosure.

"Consumers were kept in the dark about their options or burdened with excessive paperwork," said CFPB Director Richard Cordray, in a release on Monday. "This action will put money back in consumers' pockets and make sure borrowers can get help they need."

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The CFPB charged that in 2014, CitiMortgage requested unnecessary documents and forms from some homeowners who were seeking foreclosure relief. Many of these letters requested documents that had already been provided or weren't needed in the application process, according to the CFPB.

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iehi-feed-61548 Tue, 24 Jan 2017 01:31:25 GMT China: We can lead world after crisis in Western democracy, capitalism http://implode-explode.com/viewnews/2017-01-23_ChinaWecanleadworldaftercrisisinWesterndemocracycapitalism.html The article and two similar pieces filled up a full page in the government paper on Sunday, and blamed Western democracy and capitalism for global troubles such as the financial crisis and populist movements in the U.S. and Europe. In this context, the editorials said, China could show the benefits of "socialism with Chinese characteristics."

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"When you have a country like China whose growth is slowing with massive debt, with concerns of its neighbors as it moves to become more powerful, I don't know if it's the right time for China to be strongly promoting its system relative to others," Kennedy said.

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iehi-feed-61547 Mon, 23 Jan 2017 23:11:48 GMT Resurgent Inflation To Collide With Trump Stimulus Plans http://implode-explode.com/viewnews/2017-01-23_ResurgentInflationToCollideWithTrumpStimulusPlans.html ... inflation started picking up last summer... It's now rising at the fastest rate in five years. MarketWatch reported last week... A string of sharp gains since late summer helped drive up inflation by 2.1% for the full year, marking the biggest increase since a 3% gain in 2011. Americans are pay[ing] more for fuel, housing and doctor visits, countering the biggest decline in grocery prices since the tail end of the Great Recession.

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It won't take much inflation for bondholders to take heavy losses, either... Take the U.S. 10-year Treasury, which is supposedly one of the "safest" bonds you can own. It currently yields about 2.4%. That's about half its historical average. Corporate and municipal bonds are also yielding near-record lows. This makes them incredibly vulnerable to inflation.

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iehi-feed-61545 Mon, 23 Jan 2017 17:55:00 GMT Carrot and Stick: Trump threatens business leaders with border tax, Offers "Massive" Tax and Regulation Cuts http://implode-explode.com/viewnews/2017-01-23_CarrotandStickTrumpthreatensbusinessleaderswithbordertaxOffersMa.html "If you go to another country ... we are going to be imposing a very major border tax on the product when it comes in, which I think is fair," Trump said. "All you have to do is stay. Don't leave. Don't fire your people."

Sources told CNN last month that Trump was eyeing an across-the-board tax on imports as high as 10% -- an idea business leaders have bristled at.

Trump said he would aim to cut regulations by as much as 75% -- including by slashing environmental protections -- which would streamline the process for companies to build new factories in the US.

Of course now he is trying to deal based on things that primarily involve Congress, so this will get interesting. At some point companies may start calling Trump's bluff (they may have already, with a shift in tactics towards playing up "job creation" that is either questionable accounting or was going to happen anyways).

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iehi-feed-61544 Mon, 23 Jan 2017 17:50:17 GMT The US dollar is now overvalued against almost every currency in the world http://implode-explode.com/viewnews/2017-01-23_TheUSdollarisnowovervaluedagainstalmosteverycurrencyintheworld.html iehi-feed-61543 Mon, 23 Jan 2017 16:46:13 GMT China's central bank ‘playing dangerous game' to prop up yuan; Calls to allow float grow http://implode-explode.com/viewnews/2017-01-23_ChinascentralbankplayingdangerousgametopropupyuanCallstoallowflo.html China's central bank is playing a dangerous game using the country's foreign reserves to defend the yuan because it could leave the nation defenceless in an increasingly volatile world, a state researcher has warned.

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Zhang call's for Beijing to reverse tack and abandon its heavy intervention in the foreign exchange market is gaining traction among researchers.

Zhang Bin, another researcher at the Chinese Academy of Social Sciences, agreed that Beijing should free up controls on the yuan's exchange rate by reducing government intervention in the market.

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Tsinghua University professor Zhu Ning also said earlier that Beijing should let the market determine the yuan's exchange rate.

The prospects of this approach becoming a policy option appear to be rising, especially with the decline in the reserves.

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iehi-feed-61540 Sun, 22 Jan 2017 21:00:06 GMT A whole mall near Pittsburgh just sold for $100 http://implode-explode.com/viewnews/2017-01-22_AwholemallnearPittsburghjustsoldfor100.html The reason? As explained by money, it's that the mall simply hasn't done well. Though the Galleria isn't even 15 years old, it's never performed to expectations, and the changing patterns of the surrounding populace plus the overall trend away from mall shopping in many areas combined to spell its doom.

Analysts suggest that it's simply too large for the area it serves, and while it still has anchors like Macy's and Dick's Sporting Goods, the Galleria is almost half empty. Without getting into technical jargon, the mall wasn't truly open to outside bids, as Wells Fargo Bank more or less bought the mall from itself after foreclosing on it two years ago.

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iehi-feed-61536 Sun, 22 Jan 2017 15:18:38 GMT Draghi Says There's a Target-2 Toll For Leaving Euro; Italy's Bill Would Be $383.1 bln http://implode-explode.com/viewnews/2017-01-22_DraghiSaysTheresaTarget2TollForLeavingEuroItalysBillWouldBe3831b.html Any country leaving the euro zone would need to settle its claims or debts with the bloc's payments system before severing ties, European Central Bank President Mario Draghi said.

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Based on data to end-November from the Target 2 payment system, that would leave Italy with a 358.6 billion euro ($383.1 billion) bill. The system records flows of payments between euro zone countries.

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iehi-feed-61530 Sat, 21 Jan 2017 15:58:55 GMT Mnuchin Grapples With the Strong-Dollar Dilemma Left by Rubin http://implode-explode.com/viewnews/2017-01-21_MnuchinGrapplesWiththeStrongDollarDilemmaLeftbyRubin.html iehi-feed-61527 Sat, 21 Jan 2017 15:41:32 GMT Trump's Magic Wand: I Simply Don't Buy It! http://implode-explode.com/viewnews/2017-01-21_TrumpsMagicWandISimplyDontBuyIt.html Since we're not in a supply-side crisis like we were in the late 1970s and early 1980s when Ronald Reagan came in, those solutions aren't the answer. They worked then. They will NOT work now. And who are Trump's chief economic advisors? Larry Kudlow, Stephen Moore, and Art Laffer -- all zealous supply-siders.

Instead, we're in a demand-side crisis like what we saw in the early 1930s with global oversupply. In such a situation, cutting taxes will only create even faster growing deficits and debt, not investment in new capacity and jobs.

Besides, does Trump really think a Republican Congress is going to just approve of massive tax cuts and infrastructure investments that raise our already out of control public debt, just as the debt ceiling has to be raised above $20 trillion?

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President Trump was inaugurated today. I sincerely wish him the best of luck. But I have serious doubts that he'll last his first year without a major debacle and backlash.

At this point I would give the Trump rally through about July and then we could see one of those first, devastating bubble crashes that sees the markets down 30% to 40% in a few months.

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iehi-feed-61526 Fri, 20 Jan 2017 23:04:23 GMT Now we care about how Steve Mnuchin at OneWest Bank handled foreclosures? | Mandelman Matters http://implode-explode.com/viewnews/2017-01-20_NowwecareabouthowSteveMnuchinatOneWestBankhandledforeclosuresMan.html iehi-feed-61525 Fri, 20 Jan 2017 22:54:59 GMT Trump takes away FHA mortgage insurance premium cut not long after being sworn into office http://implode-explode.com/viewnews/2017-01-20_TrumptakesawayFHAmortgageinsurancepremiumcutnotlongafterbeingswo.html The move undid the quarter-point decrease in the FHA mortgage insurance premium that was announced earlier in the week by outgoing U.S. Department of Housing and Urban Development Secretary Julian Castro. For most borrowers, it would have been a reduction to 0.60 percent from 0.85 percent.

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House Republicans objected to the reduction because it would have lowered the amount of funds FHA has available to cover mortgage defaults. House Financial Services Chairman Jeb Hensarling (R-Tex.) issued a statement earlier in the week saying, "the Obama administration's parting gift to hardworking taxpayers is to put them at greater risk for footing the bill for another bailout."

... "According to our estimates, roughly 750,000 to 850,000 home buyers will face higher costs, and 30,000 to 40,000 new home buyers will be left on the sidelines in 2017 without the cut," William E. Brown, National Association of Realtors president, said in a statement. "We're disappointed in the decision but will continue making the case to reinstate the cut in the months ahead."

From the perspective of FHA being a bankrupt/fraudulent insurance fund, this is a good thing. However, it's just going to get bailed out anyways (in some form), so this consists of the removal of a marginal amount of housing-finance accessibility for a significant number of people. I.e., it's probably the fiscally right thing to do, but it's pretty interesting how scrooge-like of a move this is for one of Trump's first official acts....

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iehi-feed-61524 Fri, 20 Jan 2017 15:18:51 GMT Freshman congressman with guts is ready to file articles of impeachment against Trump http://implode-explode.com/viewnews/2017-01-20_Freshmancongressmanwithgutsisreadytofilearticlesofimpeachmentaga.html iehi-feed-61523 Fri, 20 Jan 2017 03:02:28 GMT CFPB To Sue TCF National Bank For Overdraft Fraud; CEO Named His Boat "The Overdraft" http://implode-explode.com/viewnews/2017-01-19_CFPBToSueTCFNationalBankForOverdraftFraudCEONamedHisBoatTheOverd.html TCF National Bank stood out among other financial institutions in its practices, consumer watchdog CFPB said. It "designed its application process to obscure the fees and make overdraft seem mandatory for new customers," the CFPB said. For existing customers, the bank used "deceitful language" in scripts it gave to its employees, such as asking customers if they "wanted their TCF card to continue to exist as it does today," instead of clearer questions about consent for allowing their accounts to go into overdraft, a spokesman for the CFPB said.

About 66% of all TCF checking account customers had opted in to giving overdraft abilities on their accounts as of mid-2014, triple the average rate of opt-in at other banks, according to the CFPB's complaint. What's more, the bank in 2010 also held opt-in celebrations, the CFPB said: one to celebrate 300,000 opt-ins and another one to celebrate 500,000, with senior executives attending both. TCF's chief executive at the time of the 2010 opt-in rule even named a personal boat "The Overdraft," the complaint added.

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iehi-feed-61522 Fri, 20 Jan 2017 02:07:20 GMT USGov Has Been Massively Under-Reporting Student Loan Delinquencies Due To "Glitch" http://implode-explode.com/viewnews/2017-01-19_USGovHasBeenMassivelyUnderReportingStudentLoanDelinquenciesDueTo.html iehi-feed-61521 Thu, 19 Jan 2017 23:38:50 GMT Dimon: Euro Zone May Not Survive If Economic Concerns Are Ignored http://implode-explode.com/viewnews/2017-01-19_DimonEuroZoneMayNotSurviveIfEconomicConcernsAreIgnored.html Dimon said he had hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes. That hasn't happened, and if nationalist politicians including France's Marine Le Pen rise to power in elections across the region "the euro zone may not survive," Dimon, 60, said in a Bloomberg Television interview with John Micklethwait.

"What went wrong is going wrong for everybody, not just going wrong for Britain, but in some ways it looks like they're kind of doubling down," Dimon said in the interview Wednesday at the annual meeting of the World Economic Forum in Davos, Switzerland. Unless leaders address underlying concerns, "you're going to have the same political things about immigration, the laws of the country, how much power goes to Brussels."

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iehi-feed-61520 Thu, 19 Jan 2017 23:26:32 GMT How Deutsche Bank Made a $462 Million Loss Disappear (Monte Pasci) http://implode-explode.com/viewnews/2017-01-19_HowDeutscheBankMadea462MillionLossDisappearMontePasci.html iehi-feed-61519 Thu, 19 Jan 2017 23:01:58 GMT Western Union Slapped With $586M Fine For Abetting Systemic Fraud http://implode-explode.com/viewnews/2017-01-19_WesternUnionSlappedWith586MFineForAbettingSystemicFraud.html Western Union Co, the world's biggest money-transfer company, agreed to pay $586 million and admitted to turning a blind eye as criminals used its service for money laundering and fraud, U.S. authorities said on Thursday.

Western Union, which has over half a million locations in more than 200 countries, admitted "to aiding and abetting wire fraud" by allowing scammers to process transactions, even when the company realized its agents were helping scammers avoid detection, the U.S. Department of Justice and the Federal Trade Commission said in statements.

With the help of Western Union agents, Chinese immigrants used the service to send hundreds of millions of dollars to pay human smugglers, wiring the money in smaller increments to avoid federal reporting requirements, U.S. authorities said.''

Meanwhile, governments don't want YOU to have access to cash or day-to-day use of virtual currencies like bitcoin, because ... well, something like what Western Union (and the big banks) have been doing MIGHT happen...

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iehi-feed-61518 Thu, 19 Jan 2017 22:50:47 GMT Mnuchin weathers stormy confirmation hearing http://implode-explode.com/viewnews/2017-01-19_Mnuchinweathersstormyconfirmationhearing.html In a wide-ranging hearing more than five hours long, Mnuchin was pressed by Democrats for details on everything from his thoughts on tax reform to his defense of foreclosures carried out by OneWest Bank while serving as its top executive.

Mnuchin also faced significant pressure over the fact that just one day earlier, he had to update his financial disclosures to include nearly $100 million in previously unreported assets, as well as a fund based in the Cayman Islands, a notorious tax haven.

But like many of Trump's picks, at the end of the day it appeared that Mnuchin could still rely on enough Republican support to win the job.

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Mnuchin took many of [the] critiques head-on Thursday, defending his time as a bank executive and his work in the private sector. While Democrats highlighted individuals who lost their homes to OneWest, Mnuchin emphasized the efforts his bank took to help struggling homeowners adjust their mortgages.

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iehi-feed-61517 Thu, 19 Jan 2017 04:21:33 GMT Janet Yellen: Economy is getting closer to "running on its own" http://implode-explode.com/viewnews/2017-01-18_JanetYellenEconomyisgettingclosertorunningonitsown.html [Yellen] said the long-run unemployment rate is probably 4.75 percent, just above the current 4.7 percent. Inflation is "inching back" toward the Fed's 2 percent goal, which has remained elusive even as the economy has stayed out of recession for nearly eight years and unemployment is at its lowest level since late 2007.

Despite the economic improvements, the Fed has remained cautious. "Right now our foot is still pressing on the gas pedal, though, as I noted, we have eased back a bit," Yellen said.

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The funds rate, which banks charge to lend to each other overnight, likely will be at 3 percent by the end of 2019, a target that Yellen acknowledged is "a full percentage point lower than our estimate just three years ago."

The Fed looks set to undershoot -- as they almost always do in rate-rise cycles. This is probably a major reason that gold usually rallies hard after rate hikes begin -- because it's too little, too late.

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