Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-59660 Fri, 29 Apr 2016 03:30:16 GMT Volume Collapses As China Commodity Exchanges Ordered To "Curb Speculation" http://implode-explode.com/viewnews/2016-04-28_VolumeCollapsesAsChinaCommodityExchangesOrderedToCurbSpeculation.html iehi-feed-59658 Thu, 28 Apr 2016 20:06:01 GMT Russia to Price Its Own Oil, Ditch Dollars http://implode-explode.com/viewnews/2016-04-28_RussiatoPriceItsOwnOilDitchDollars.html iehi-feed-59657 Thu, 28 Apr 2016 19:56:52 GMT Loeb's Third Point Says Hedge Funds in 'Catastrophic' Period http://implode-explode.com/viewnews/2016-04-28_LoebsThirdPointSaysHedgeFundsinCatastrophicPeriod.html Third Point, founded by Dan Loeb, said hedge funds are in the first stage of a "washout" after "catastrophic" performance this year. The $2.9 trillion hedge fund industry had the worst start to a year in returns and outflows in at least seven years. Alan Howard's Brevan Howard Asset Management and Paul Tudor Jones' Tudor Investment Corp. are among the firms that clients are pulling billions of dollars from, while managers including Bill Ackman and John Paulson have posted steep losses.

Hedge funds lost 1.9 percent in the first quarter, according to Hedge Fund Research's global index, the poorest performance since 2008. The industry had net outflows of $16.6 billion in the last two quarters, the most since 2009, according to HFR. In 2015, 979 funds closed, more than any year since 2009, according to the research firm.

...

"Further exacerbating the carnage was a huge asset rotation into market neutral strategies in late the fourth quarter," Third Point said. "Unfortunately, many managers lost sight of the fact that low net does not mean low risk and so, when positioning reversed, market neutral became a hedge fund killing field."

]]>
iehi-feed-59656 Thu, 28 Apr 2016 19:28:07 GMT Why the Vampire Squid Wants Small Depositors' Money in 1 Frightening Chart http://implode-explode.com/viewnews/2016-04-28_WhytheVampireSquidWantsSmallDepositorsMoneyin1FrighteningChart.html iehi-feed-59654 Thu, 28 Apr 2016 15:12:57 GMT Japan consumer prices fall at fastest in 3 years before BOJ meeting http://implode-explode.com/viewnews/2016-04-28_Japanconsumerpricesfallatfastestin3yearsbeforeBOJmeeting.html iehi-feed-59653 Thu, 28 Apr 2016 15:10:20 GMT The European Union always was a CIA project, as Brexiteers discover http://implode-explode.com/viewnews/2016-04-28_TheEuropeanUnionalwayswasaCIAprojectasBrexiteersdiscover.html Brexiteers should have been prepared for the shattering intervention of the US.  The European Union always was an American project... Nor are many aware of declassified documents from the State Department archives showing that US intelligence funded the European movement secretly for decades, and worked aggressively behind the scenes to push Britain into the project.

As this newspaper first reported when the treasure became available, one memorandum dated July 26, 1950, reveals a campaign to promote a full-fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the Central Inteligence Agency.

The key CIA front was the American Committee for a United Europe (ACUE), chaired by Donovan. Another document shows that it provided 53.5 per cent of the European movement's funds in 1958. The board included Walter Bedell Smith and Allen Dulles, CIA directors in the Fifties, and a caste of ex-OSS officials who moved in and out of the CIA.

]]>
iehi-feed-59652 Thu, 28 Apr 2016 15:07:43 GMT America's earnings recession just got worse http://implode-explode.com/viewnews/2016-04-28_Americasearningsrecessionjustgotworse.html Overall, S&P 500 earnings so far this quarter are down 8%. That marks the third quarterly decline in a row and the worst since 2009, according to S&P Global Market Intelligence. Weak global growth is closing consumers' wallets, while the strong dollar is only making iPhones and other American goods more expensive for foreign buyers. Add on still-low oil prices and Corporate America is facing major headwinds.

...

With disappointing earnings like these, it's no wonder investors are worried about stocks getting too pricey. One key measure for value -- the price-to-earnings ratio -- shows stocks are at their most expensive point since 2009. The S&P 500 is trading at about 17.8 times its forward earnings, compared with 15.2 in mid-February.

]]>
iehi-feed-59650 Thu, 28 Apr 2016 14:35:42 GMT WSJ Master Word Soup Chef Greg Ip Missplains the Fed and Argentina Flation http://implode-explode.com/viewnews/2016-04-28_WSJMasterWordSoupChefGregIpMissplainstheFedandArgentinaFlation.html iehi-feed-59649 Wed, 27 Apr 2016 21:40:40 GMT Why Sam Zell ("The Grave Dancer") Is Cashing Out http://implode-explode.com/viewnews/2016-04-27_WhySamZellTheGraveDancerIsCashingOut.html iehi-feed-59648 Wed, 27 Apr 2016 21:38:51 GMT Fed leaves rates alone, signals confidence in economy (LOOK AT WHAT WE SAY, NOT WHAT WE DO!!) http://implode-explode.com/viewnews/2016-04-27_FedleavesratesalonesignalsconfidenceineconomyLOOKATWHATWESAYNOTW.html iehi-feed-59647 Wed, 27 Apr 2016 21:10:55 GMT More Greece "Uncertainty": Default Looms in July, EU Rejects Greek Emergency Summit http://implode-explode.com/viewnews/2016-04-27_MoreGreeceUncertaintyDefaultLoomsinJulyEURejectsGreekEmergencySu.html The creditors demand still more austerity but Tsipras said "no". Instead, Tsipras seeks an emergency meeting, but European Commission president Donald Tusk said "no" to that proposal.

...

Greece is fast running out of cash to pay salaries and pensions in May because of lagging tax receipts. To cover the gap Mr Tsipras's government has been strong-arming state entities, from the cash-strapped health service to the profitable water utility, to empty their bank accounts and place the funds with the central bank in a short-term loan arrangement.

]]>
iehi-feed-59646 Wed, 27 Apr 2016 14:39:50 GMT ECB likely to decide next week to scrap 500-euro bill http://implode-explode.com/viewnews/2016-04-27_ECBlikelytodecidenextweektoscrap500eurobill.html iehi-feed-59645 Wed, 27 Apr 2016 14:21:13 GMT Alarm over corporate debt and stalled earnings http://implode-explode.com/viewnews/2016-04-27_Alarmovercorporatedebtandstalledearnings.html According to Andrew Lapthorne of Société Générale, the reality is that "US corporates appear to be spending way too much (over 35 per cent more than their gross operating cash flow, the biggest deficit in over 20 years of data) and are using debt issuance to make up the difference". The decline in earnings and cash flows in the past year has accentuated the problem, and brought it to the top of investors' consciousness.

A further issue is the uses to which the debt has been put. As pointed out many times in the post-crisis years, it has generally not gone into capital expenditures, which might arguably be expected to boost the economy. It has instead been deployed to pay dividends, or to buy back stock -- or to buy other companies. Shifts in these uses of cash are now affecting markets.

...

Such popularity for companies that pay out dividends is generally sign of bearishness and lack of trust. If investors want to be shown the money in this way, it suggests very low confidence in companies' ability to use the cash wisely. At this point, according to Mr Santschi, investors are eschewing buyback stocks because they fear that the buybacks will only be funded with further debt.

Companies can of course afford to stay highly levered without too much difficulty, while they enjoy fixed low rates. The problem, and the reason that investors have now started to focus on the problem, is producing the earnings and cash flows needed to pay their debt. That is why earnings are being watched with such anxiety.

]]>
iehi-feed-59644 Tue, 26 Apr 2016 20:13:05 GMT Unmistakable Gold, Silver Breakouts To Continue http://implode-explode.com/viewnews/2016-04-26_UnmistakableGoldSilverBreakoutsToContinue.html iehi-feed-59643 Tue, 26 Apr 2016 19:17:39 GMT 30-Year Fixed Mortgage At Root of Housing Instability; Should Be Nixed - Pinto http://implode-explode.com/viewnews/2016-04-26_30YearFixedMortgageAtRootofHousingInstabilityShouldBeNixedPinto.html The 30-year fixed rate mortgage should be retired -- for good. Despite continued proof that it fails to build up wealth for the most disadvantaged Americans, and that mortgage debt should not be a burden as homeowners approach their 50s and 60s, misguided advocates maintain that the 30-year fixed rate mortgage should be at the core of the U.S. housing finance system. The latest proposal by five respected economists including Gene Sperling and Mark Zandi aims to reformulate taxpayer backing of Fannie Mae and Freddie Mac in an effort to keep the 30-year fixed mortgage alive.

...

The authors' reform plan, like virtually all the others before it, fails to acknowledge the government's role in past housing finance failures. Failures include the savings and loan (S&L) debacle of the 1980s, Fannie and Freddie's collapse into conservatorship, and the Federal Housing Administration's (FHA's) 3.4 million foreclosures (almost all with 30-year fixed rate loan terms). These crashes did not come about in spite of government support for housing finance, but because of government backing.

...

Guaranteeing access to loans independently of market conditions creates an economics free zone, one where the FHA neither prices nor underwrites for risk, where the taxpayer-backed GSEs compete with the FHA for "affordable loans," and where government-backed lending is provided in both good times and bad... It is impossible to simultaneously keep the 30-year fixed rate mortgage at the system's core, protect taxpayers and provide broad access to meet the needs of underserved communities.

...

This latest proposal is a policy cul-de-sac, repeating many of the same policy mistakes of the past decades. It is time to substitute shorter term loans of 15 and 20 years, designed to reliably build wealth and maintain buying power, while protecting borrowers and neighborhoods from high levels of foreclosure risk. Such a loan, developed by AEI's International Center for Housing Risk, is already being offered in different versions by a number of banks, credit unions and at least one non-profit. Several state housing finance agencies have also signed on.

]]>
iehi-feed-59640 Tue, 26 Apr 2016 14:50:23 GMT Big Banks Would Have to Boost Long-Term Funding Under U.S. Plan http://implode-explode.com/viewnews/2016-04-26_BigBanksWouldHavetoBoostLongTermFundingUnderUSPlan.html After years of new regulations governing the industry's capital, leverage and liquidity, the net stable funding ratio is among the last of the major constraints spurred by the 2008 financial crisis. The proposed rule -- the U.S. answer to a 2014 agreement among international regulators -- would add to an earlier demand that lenders maintain a 30-day stockpile of easy-to-sell assets to weather shorter periods of stress. Both aim to ensure banks don't have to scramble for funding in a meltdown.

...

Almost all of the covered banks currently meet the proposed requirements set to take effect in 2018, according to regulators' estimates, and the few that don't are almost at the mark. They would have to report their holdings on a quarterly basis, the regulators said.

]]>
iehi-feed-59639 Tue, 26 Apr 2016 14:41:56 GMT US Home Prices Rise at Solid Pace, Even With Flat Sales http://implode-explode.com/viewnews/2016-04-26_USHomePricesRiseatSolidPaceEvenWithFlatSales.html U.S. home prices continued their steady upward march in February as buyers competed for a limited number of available properties. The Standard & Poor's/Case-Shiller 20-city home price index rose 5.4 percent that month compared with a year earlier, according to a report released Tuesday. That's down slightly from January's 5.7 percent rise.

Prices are rising even as sales have leveled off in recent months. The number of homes for sale last month was 1.5 percent lower than a year earlier. That's pushed buyers to act quickly, with homes on the market just 47 days in March, according to the National Association of Realtors.

Svenja Gudell, chief economist at real estate website Zillow, said the problem is particularly acute for first-time buyers and those looking at mid-level homes.

]]>
iehi-feed-59638 Tue, 26 Apr 2016 14:30:11 GMT Japan government weighs shopping vouchers, promotions to boost consumption http://implode-explode.com/viewnews/2016-04-26_Japangovernmentweighsshoppingvoucherspromotionstoboostconsumptio.html iehi-feed-59637 Tue, 26 Apr 2016 14:21:37 GMT The Euro's Next Existential Crisis http://implode-explode.com/viewnews/2016-04-26_TheEurosNextExistentialCrisis.html So long as at least one of the four rating agencies judges Portugal to be worthy, its government debt remains eligible to participate in the ECB's bond-buying program. But if the country drops to sub-investment grade at all four, the ECB's own rules forbid it from buying any more Portuguese government securities -- purchases which have ballooned to almost 15 billion euros ($17 billion) in the program's one-year lifetime... if DBRS lowers the nation's grade... it could trigger a renewed crisis in the euro area.

The ECB's purchases are arguably responsible for keeping Portugal's 10-year borrowing cost at an average of a bit less than 3 percent in the past six months. Compare that with Greece, which doesn't qualify for ECB assistance and has had an average yield of almost 9 percent since October, and it becomes clear how valuable ECB eligibility is -- and how financially damaging it might be for Portugal if it was shut out after a downgrade.

]]>
iehi-feed-59636 Tue, 26 Apr 2016 14:18:35 GMT ECB pushes for saver protection, at odds with Germany http://implode-explode.com/viewnews/2016-04-26_ECBpushesforsaverprotectionatoddswithGermany.html