Implode-Explode Heavy Industries news feed Tracking the many faces of the global credit implosion. en-us iehi-feed-61756 Fri, 24 Feb 2017 04:17:59 GMT Bitcoin is nearing its all-time high on ETF anticipation Bitcoin came within $3 of its all-time high on Thursday as expectations mounted that the Securities and Exchange Commission could soon authorize the creation of the first bitcoin exchange-traded fund.


The SEC is expected to deliver a decision on the proposed Winklevoss Bitcoin Trust by March 11. Two other bitcoin-focused ETFs are also under consideration.

Though some have speculated that the path to a bitcoin ETF may be easier under the administration of President Donald Trump, Spencer Bogart, a bitcoin analyst at Needham and Co., believes chances of approval are less than 1-in-4.

iehi-feed-61755 Fri, 24 Feb 2017 04:15:28 GMT Mnuchin: Stock market 'absolutely' Trump admin's economic report card iehi-feed-61754 Fri, 24 Feb 2017 04:14:19 GMT Dow pulls off a stunt it hasn't done in 30 years iehi-feed-61752 Thu, 23 Feb 2017 17:37:05 GMT Paris attempts to lure business from London with new skyscrapers; Streamlined rules Paris will build seven new skyscrapers in its business district as part of an aggressive campaign to lure financial services companies from London after the UK leaves the EU.


Marie-Célie Guillaume, chief executive of Defacto La Défense, the body responsible for managing the financial hub in western Paris, said that they wanted to send a "powerful message to businesses that are uncertain about their future in London".

Paris is vying with Frankfurt, Luxembourg and Dublin to attract banks, insurers, start-ups and other companies worried about what will happen when Britain leaves the political bloc. Paris has been one of the most aggressive in its efforts.

Immediately after the June 23 referendum, President François Hollande's socialist government changed the tax rules for expatriates in Paris to make it more generous, and put together a high-level team to lobby international companies.


In January, HSBC became the first big bank to confirm plans to move jobs out of London after the Brexit vote, saying it aims to relocate 1,000 roles in its London-based investment bank to Paris.

UBS said about the same number of its London employees could be affected by Brexit, while Jamie Dimon, chief executive of JPMorgan Chase, said that more than 4,000 of his bank's 16,000 UK staff could be displaced. Neither has yet said where they might move, however.

In September, French financial regulators said they were simplifying the process of registering new financial companies in Paris, in part by allowing documents to be filed in English. They said this came "in the context of the Brexit vote".

iehi-feed-61751 Thu, 23 Feb 2017 00:27:07 GMT Prudential May Charge Wells Fargo as Fake-Account Fallout Spreads to Other Business Lines Prudential "has provided notice to Wells Fargo that it may seek indemnification," the Newark, New Jersey-based insurer said in a Feb. 17 regulatory filing, referring to their agreement to sell MyTerm life coverage to Wells Fargo customers. Prudential didn't quantify the sum that it might pursue.

Wells Fargo's sales practices are being scrutinized on multiple fronts after authorities fined the bank $185 million in September for signing customers up for bank accounts and credit cards without permission. On Wednesday, ProPublica said the firm placed the head of a mortgage-lending unit in Los Angeles, Tom Swanson, on leave while examining allegations some customers were charged to lock in low interest rates when the bank delayed applications.

Prudential suspended MyTerm sales through Wells Fargo in December ... That case, in which the ex-workers say they were fired for blowing the whistle on misconduct, is one of several Prudential headaches from the Wells Fargo relationship. The insurer is also facing a suit from a customer seeking class-action status. And regulators from New Jersey and California have announced probes.


ProPublica raised the separate concern about Wells Fargo's mortgage practices last month. Some branches in Los Angeles and Oregon broke with the company's policy of eating fees to lock in low interest rates when it was at fault for delays in mortgage applications, the publication said in its report on Wednesday, citing current and former employees. Swanson didn't respond to a message seeking comment.

Wells Fargo is conducting an internal review to ensure it handled rate-lock extensions consistently and with "customers' best interests in mind," company spokesman Tom Goyda said, declining to comment on Swanson. "While that process has not been completed and we can't discuss the results, we want this review to be comprehensive." The firm may take additional steps and "make things right for customers" as warranted, he said.

iehi-feed-61750 Thu, 23 Feb 2017 00:21:46 GMT U.S. home sales hit 10-year high, prices soar on low inventory U.S. home resales surged to a 10-year high in January as buyers shrugged off higher prices and mortgage rates, signaling rising confidence in the economy and bolstering expectations of a pickup in growth in the first quarter.


Though the nation's housing inventory increased from December, it remained near a record low. As a result, the median house price vaulted 7.1 percent from a year ago to $228,900 in January. That was the biggest increase since January 2016.

Demand for housing is being underpinned by a strengthening labor market, which is improving employment opportunities for young adults and, in turn, boosting household formation... But a persistent shortage of properties available for sale, which is lifting house prices, remains an obstacle to a robust housing market. That is likely to put pressure on homebuilders to ramp up construction.

Last month, the number of homes on the market rose 2.4 percent to 1.69 million units, still remaining close to an all-time low of 1.65 million units in December. Housing inventory was down 7.1 percent from a year ago. It has declined for 20 straight months on a year-on-year basis.

Economists say homebuilders are struggling to plug the inventory gap because of difficulties securing funding as well as shortages of land and labor. The NAR estimates housing starts and completions should be in a range of 1.5 million to 1.6 million units to alleviate the chronic shortage.

iehi-feed-61749 Thu, 23 Feb 2017 00:15:52 GMT Fed Officials Not "Losing Patience" Fast Enough to Hike in March iehi-feed-61748 Wed, 22 Feb 2017 23:53:46 GMT A Simple Subpoena For Trump's Tax Returns Could Sink Him iehi-feed-61746 Wed, 22 Feb 2017 15:24:17 GMT Deutsche Bank Says Next Big Short Is on CMBS as Malls Suffer iehi-feed-61744 Wed, 22 Feb 2017 15:03:42 GMT Banks Retreat From Apartment Market Swelling supplies of apartment units are prompting big banks to pull back from new projects, forcing developers to scramble for capital, in a sign that the U.S. apartment industry headed for a downturn.

The apartment sector, which contributes some $284 billion to the economy annually, has been a winning bet for investors since the housing crash, as the economy recovered and more renters sought out units. Since 2010, average U.S. apartment rents have increased by 26%, according to data tracker MPF Research, a division of RealPage.

But fresh supply is beginning to overwhelm demand. More than 378,000 new apartments are expected to be completed in 2017, a 30-year high, according to real estate researcher Axiometrics Inc. In the fourth quarter of last year, 88,000 units were completed but only 50,000 of those were rented by tenants, according to MPF.

"Our business has radically changed," said Toby Bozzuto, president and chief executive of the Bozzuto Group, which owns or manages 59,000 apartments in cities across the U.S. "I haven't seen anything this seismically different since 2008, when credit dried up."

iehi-feed-61743 Wed, 22 Feb 2017 14:56:33 GMT Why Toronto (and Other Cities) Inflate Housing Bubbles to the Bitter End ``Home prices in Greater Toronto have become "dangerously detached" from economic fundamentals and are soaring simply on the belief that they will continue to soar, he wrote. "The market is far too hot for comfort."...

... Toronto is just an a example. There are many jurisdictions in the US that face similar budget problems, and the only thing that keeps them from falling deeper into a financial and fiscal sinkhole is the rich tax revenue that the local property bubble extracts from the economy. Homeowners and investors might grumble, but they usually put up with it, mollified by soaring property prices. So this system works until suddenly, it doesn't.

iehi-feed-61742 Wed, 22 Feb 2017 02:46:40 GMT Fumbling Towards Collapse - KUNSTLER You ... have an American public, and a mass media, who do not question the premise of a massive "infrastructure" spending project to re-boot the foundering economy. If you ask what they mean by that, you will learn that they uniformly see rebuilding our highways, bridges, tunnels, and airports. Some rightly suspect that the money for that is not there -- or can only be summoned with more accounting fraud (borrowing from our future). But on the whole, most adults of all political stripes in this country think we can and should do this, that it would be a good thing.

And what is this infrastructure re-boot in the service of? A living arrangement with no future. A matrix of extreme car dependency that has zero chance of continuing another decade. More WalMarts, Target stores, Taco Bells, muffler shops, McHousing subdivisions, and other accoutrement of our fast-zombifying mode of existence? Isn't it obvious, even if you never heard of, or don't understand, the oil quandary, that we have shot our wad with all this? That we have to start down a different path if we intend to remain human?

iehi-feed-61739 Tue, 21 Feb 2017 15:14:21 GMT Goldman Sachs: Market investors have a letdown coming iehi-feed-61737 Tue, 21 Feb 2017 15:08:12 GMT HSBC share run stumbles on writedowns, tough outlook HSBC's full-year profit slumped 62 percent and fell far short of forecasts on Tuesday as the bank took hefty writedowns from restructuring and flagged near-term brakes on revenue growth... HSBC made profit before tax of $7.1 billion in 2016 compared to $18.87 billion for the previous year, well below an average analyst estimate of $14.4 billion in Thomson Reuters data.

... the worse than expected profits took their toll on the bank's bonus pool, which it cut by 12 percent to $3 billion, and sets the stage for results this week from Lloyds, Barclays, RBS and Standard Chartered.

... A $3.2 billion impairment in its private banking business led HSBC to report a $3.4 billion fourth-quarter loss, against analysts' expectations for a profit, as the accounting valuation of the unit caught up with years of declining performance. HSBC effectively built out its Swiss private bank from its $10 billion purchase of Republic National Bank of New York and Safra Republic Holdings in 1999... But major compliance failures at those operations ate into the bank's bottom line and hurt its reputation, leading to a radical restructuring which mean the private bank is now viable as a slimmed-down operation providing advice to wealthy clients referred from the lender's other business lines.

Compliance problems at a unit associated with the late Safra... color us shocked...

iehi-feed-61735 Mon, 20 Feb 2017 21:23:51 GMT Bailout Negotiators Get Go-ahead to Return to Greece; IMF Role Still In Question Greece and its European creditors agreed Monday to resume talks on what economic reforms the country must make next in order to get the money it needs to avoid bankruptcy and a potential exit from the euro this summer.

The creditors also hinted that they would temper their demands for budget cuts -- a welcome thought for austerity-weary Greeks who have seen poverty and unemployment spike as their economy shrank by a quarter over the recent crisis-ridden years.

"There will be a change in the policy mix, if you will, moving perhaps away from austerity and putting more emphasis on deep reforms," said Jeroen Dijsselbloem, the eurozone's top official.


Still, there are other potential hurdles to be cleared before the IMF does get involved. One key issue relates to Greece's debt profile over the coming decades. The IMF forecasts Greece's debt will, as things stand, swell to a staggering 275 percent by 2060 from around 180 percent now.

As a result, it's urging the Europeans to come up with a substantive package of debt relief measures. The eurozone countries, notably Germany, have ruled out an outright debt reduction but are open to other kinds of debt relief, such as extending Greece's repayment periods or capping the interest rates at relatively low levels. Debt relief discussions will recommence once agreement on the next batch of Greek reforms is concluded.

iehi-feed-61733 Mon, 20 Feb 2017 20:47:00 GMT Chinese Banks' Off-Book Lending Vehicles Exceed $3.8 Trillion, Up 30% Y-O-Y Chinese banks had more than 26 trillion yuan ($3.8 trillion) of wealth-management products held off their balance sheets at the end of December, a 30 percent increase from a year earlier, according to the central bank.

The expansion of this form of shadow banking, with money eventually being diverted to quasi-loans and bonds, outpaced the 10 percent growth for normal lending during the same period, raising risks for the broader economy and undermining the country's "deleveraging" efforts, the People's Bank of China said Friday in its quarterly monetary policy report.

Remind anyone of another three-letter-acronym... like "SIV" perhaps?

iehi-feed-61731 Mon, 20 Feb 2017 15:50:13 GMT Spain's Senior Central Bankers Called To Testify on Bankia Debacle As part of the epic, multi-year criminal investigation into the doomed IPO of Spain's frankenbank Bankia -- which had been assembled from the festering corpses of seven already defunct saving banks -- Spain's national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements' Financial Stability Institute), Fernando Restoy. It also summoned for questioning Julio Segura, the former president of Spain's financial markets regulator, the CNMV (the Spanish equivalent of the SEC in the US).

The six central bankers and one financial regulator stand accused of authorizing the public launch of Bankia in 2011 despite repeated warnings from the Bank of Spain's own team of inspectors that the banking group was "unviable."

iehi-feed-61730 Mon, 20 Feb 2017 15:32:27 GMT Greenspan: Gold is "Primary Global Currency" iehi-feed-61729 Mon, 20 Feb 2017 15:30:38 GMT Continuing Global Dollar "Shortage" Implies High Systemic Stress iehi-feed-61728 Mon, 20 Feb 2017 15:29:25 GMT BlackRock: "We're on the precipice of a breakout in inflation"