Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-58989 Sat, 13 Feb 2016 04:02:32 GMT Is Anybody NOT Deeper In Debt? http://implode-explode.com/viewnews/2016-02-12_IsAnybodyNOTDeeperInDebt.html iehi-feed-58988 Fri, 12 Feb 2016 18:54:05 GMT U.S. Retail Sales Increased in January (BUT IT'S BASICALLY STILL JUST INFLATION) http://implode-explode.com/viewnews/2016-02-12_USRetailSalesIncreasedinJanuaryBUTITSBASICALLYSTILLJUSTINFLATION.html iehi-feed-58987 Fri, 12 Feb 2016 18:49:57 GMT Bail-in Securities and the Current Equity Market Turmoil - Unintended Consequences http://implode-explode.com/viewnews/2016-02-12_BailinSecuritiesandtheCurrentEquityMarketTurmoilUnintendedConseq.html iehi-feed-58985 Fri, 12 Feb 2016 14:46:51 GMT Credit Barometer Flashes a Warning Sign on Banks http://implode-explode.com/viewnews/2016-02-12_CreditBarometerFlashesaWarningSignonBanks.html On Thursday, the average cost of insuring senior European bank debt against default increased to its highest level since October 2013, according to data provider Markit. In the U.S., the cost of insuring against default on banks from Goldman Sachs Group Inc. to Wells Fargo & Co. also has shot up.

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In the U.S., the cost of insuring against a default on $10 million worth of Goldman Sachs debt for five years rose $20,000 to $159,000 a year on Thursday, according to Markit. The cost of insuring against a default from other major lenders such as J.P. Morgan Chase & Co. and Wells Fargo also rose.

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iehi-feed-58984 Fri, 12 Feb 2016 14:31:02 GMT If Credit Is Right, The S&P Is Facing A 40% Crash http://implode-explode.com/viewnews/2016-02-12_IfCreditIsRightTheSPIsFacingA40Crash.html iehi-feed-58983 Fri, 12 Feb 2016 14:20:31 GMT Asia's Rich Advised to Buy Yen as BOJ's Negative Rates Backfire http://implode-explode.com/viewnews/2016-02-12_AsiasRichAdvisedtoBuyYenasBOJsNegativeRatesBackfire.html iehi-feed-58982 Fri, 12 Feb 2016 14:18:49 GMT Assault on Banks Intensifies as Investors Punish Weakness http://implode-explode.com/viewnews/2016-02-12_AssaultonBanksIntensifiesasInvestorsPunishWeakness.html iehi-feed-58980 Fri, 12 Feb 2016 01:25:26 GMT No easy way out for Deutsche Bank as investors 'lose faith' http://implode-explode.com/viewnews/2016-02-11_NoeasywayoutforDeutscheBankasinvestorslosefaith.html iehi-feed-58979 Fri, 12 Feb 2016 01:24:23 GMT Bass Says China Bank Losses May Top 400% of Subprime Crisis http://implode-explode.com/viewnews/2016-02-11_BassSaysChinaBankLossesMayTop400ofSubprimeCrisis.html iehi-feed-58978 Fri, 12 Feb 2016 01:19:54 GMT Lines Around The Block To Buy Gold In London; Banks Placing "Unusually Large Orders For Physical" http://implode-explode.com/viewnews/2016-02-11_LinesAroundTheBlockToBuyGoldInLondonBanksPlacingUnusuallyLargeOr.html BullionByPost, Britain's biggest online gold dealer, said it has already taken record-day sales of £5.6m as traders pile into gold following fears the world is on the brink of another financial crisis.

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"The bullion market has been building with interest since the end of last year but this morning things have gone bananas," said Mr Halliday-Stein. "Some London banks are placing unusually large orders for physical gold."

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But that's just part of the story. As reported by the World Gold Council, the buying really started to pick up in the fourth quarter, courtesy of the Chinese and central banks.

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Central bank buying accelerated sharply in the second half of last year and jumped 25 percent in the fourth quarter, from a year earlier, as the need to diversify was reinforced by falling oil prices and reduced confidence in the global economy, WGC said.

See also London Was Bleeding 184t Of Gold In December While China Imported At Least 217t.

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iehi-feed-58976 Thu, 11 Feb 2016 16:39:44 GMT How Low Can Central Banks Go? JPMorgan Reckons Way, Way Lower http://implode-explode.com/viewnews/2016-02-11_HowLowCanCentralBanksGoJPMorganReckonsWayWayLower.html ... in this brave new world, how much lower can rates now go? According to an analysis published late on Tuesday by economists at JPMorgan Chase & Co., way, way lower. Having studied the lack of fallout in Switzerland, where the benchmark rate is minus 0.75 percent, Malcolm Barr, David Mackie and Bruce Kasman reckon the trick lies in a tiered system as already deployed by the Bank of Japan and in some places of Europe, whereby only a portion of reserves are subjected to negative rates.

On that basis, they estimate if the ECB just focused on reserves equivalent to 2 percent of gross domestic product it could slice the rate it charges on bank deposits to minus 4.5 percent. That compares with minus 0.3 percent today and the minus 0.7 percent JPMorgan says it could reach by the middle of this year.

The Bank of Japan's lower bound on a similar basis may be minus 3.45 percent, while Sweden's is likely minus 3.27 percent, the economists said. Should they also go negative, the Fed could cut to minus 1.3 percent and the Bank of England to minus 2.69 percent in JPMorgan's view, reflecting how the ratio of reserves to assets is higher in their economies than elsewhere.

Concentrating on 25 percent of reserves would allow the ECB to cut to minus 4.64 percent and the Fed to minus 0.78 percent. Making no change to the current regime would allow Draghi to lop to minus 1.36 percent, they said.

Easing the fall is that the JPMorgan economists bet that banks are unlikely to be able to pass on the cost of the policy to borrowers, reducing potential repercussions. They also see limited pressure on bank profits or for a need to stash cash.

So basically as long as it is a silly stage show, negative interest rates can "work". But see Fed's Janet Yellen: Not sure we can do negative rate; rate cut unlikely.

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iehi-feed-58975 Thu, 11 Feb 2016 16:32:57 GMT European banks face prolonged energy exposure http://implode-explode.com/viewnews/2016-02-11_Europeanbanksfaceprolongedenergyexposure.html iehi-feed-58974 Thu, 11 Feb 2016 16:31:28 GMT It Was Never About Oil | Alhambra Investment Partners http://implode-explode.com/viewnews/2016-02-11_ItWasNeverAboutOilAlhambraInvestmentPartners.html iehi-feed-58973 Thu, 11 Feb 2016 16:30:29 GMT Notes from the Locked Ward | KUNSTLER http://implode-explode.com/viewnews/2016-02-11_NotesfromtheLockedWardKUNSTLER.html iehi-feed-58972 Thu, 11 Feb 2016 16:25:40 GMT Some Hedge Funds Want to Make Subprime Auto Loans Next Big Short (But Banks Won't Touch The Trade) http://implode-explode.com/viewnews/2016-02-11_SomeHedgeFundsWanttoMakeSubprimeAutoLoansNextBigShortButBanksWon.html iehi-feed-58970 Thu, 11 Feb 2016 14:50:52 GMT Fresh Wave of Selling Slams Global Markets http://implode-explode.com/viewnews/2016-02-11_FreshWaveofSellingSlamsGlobalMarkets.html iehi-feed-58969 Thu, 11 Feb 2016 14:42:13 GMT Gold Roars to One-Year High as Turmoil Drives Safe Haven Demand http://implode-explode.com/viewnews/2016-02-11_GoldRoarstoOneYearHighasTurmoilDrivesSafeHavenDemand.html Dollar, global stocks trampled in stampede to safety and Gold surges to one-year high on fears of financial uncertainty .]]> iehi-feed-58968 Thu, 11 Feb 2016 03:44:07 GMT Gold's Outperformance: This Time, It May Really Be Different http://implode-explode.com/viewnews/2016-02-10_GoldsOutperformanceThisTimeItMayReallyBeDifferent.html iehi-feed-58967 Thu, 11 Feb 2016 00:55:02 GMT Congress Hammers Yellen on Paying Subsidy To Banks http://implode-explode.com/viewnews/2016-02-10_CongressHammersYellenonPayingSubsidyToBanks.html iehi-feed-58966 Wed, 10 Feb 2016 22:57:01 GMT Deutsche Bank "Technically Insolvent"; Bond-buyback Scheme "Legalized Fraud" http://implode-explode.com/viewnews/2016-02-10_DeutscheBankTechnicallyInsolventBondbuybackSchemeLegalizedFraud.html I would conservatively estimate that the 1.53 trillion euros of financial assets + for sale assets + loans + other assets should be written down by at least 20%.   That would imply that, conservatively, DB could write-down its assets 306 billion euros and likely still be overstating the value of its total asset base.  A write-down of that magnitude would imply that DB has negative net worth of 238 billion euros.

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It's fine with me if DB management wants to puff up its image by taking a few billion of liquidity that it technically does not have and buy back some of its debt... However this is highly misleading because the only "gains" generated are a non-cash generating accounting "gain" that is now permitted. It was an accounting change that was passed after the 2008/2009 collapse which gave banks the ability to fabricate net income for the purposes of padding their retained earnings and therefore their book value. It's nothing more than legalized fraudulent accounting... anyone who is not selling their stock into this rally is a complete moron.

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