Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60091 Mon, 27 Jun 2016 17:40:30 GMT Firms plan to quit UK as City braces for more post-Brexit losses http://implode-explode.com/viewnews/2016-06-27_FirmsplantoquitUKasCitybracesformorepostBrexitlosses.html ... fears are spreading that an estimated 100,000 roles could be lost in the financial sector if banks press on with contingency plans to move jobs out of the UK...

US bank JP Morgan has warned 4,000 jobs will go and HSBC has said 1,000 City jobs will move to France. Rumours are sweeping the City that alternative trading sites are being set up in a number of other financial centres, including Luxembourg.

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iehi-feed-60090 Mon, 27 Jun 2016 17:36:26 GMT Britain 'may never' trigger EU divorce: diplomats http://implode-explode.com/viewnews/2016-06-27_BritainmaynevertriggerEUdivorcediplomats.html iehi-feed-60089 Mon, 27 Jun 2016 16:44:57 GMT Nevermind the Brexit, UK will emerge with a good trade deal; Worry About the EU Itself http://implode-explode.com/viewnews/2016-06-27_NevermindtheBrexitUKwillemergewithagoodtradedealWorryAbouttheEUI.html The U.K. is by far Germany's most profitable export market. Last year, Germany's trade surplus with the U.K. came in at 51 billion euros ($56 billion), accounting for 34 percent of the German surplus with the EU. That surplus was also 42 percent higher than the German trade surplus with France, Berlin's largest European trade partner.

With its 89.3 billion euro worth of exports to the U.K. last year, Britain is Germany's third-largest export market, after the U.S. and France. Will Germany give this up by shutting the U.K. out of a free-trade agreement with the EU? Of course it won't.

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No wonder that Chancellor Merkel keeps saying that there is no need to be "nasty" with the U.K., while reassuring her compatriots that she would negotiate the U.K.'s exit from the EU with a great attention to German interests.

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The existing trade and defense ties explain why I think that the U.K. will have no trouble getting a deal it wants with the EU.

But the EU, and its future, is a much bigger worry. The union's leading tenors - Germany, France and Italy - have no idea what to do next, mostly because they are in a state of an intractable political disarray.

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iehi-feed-60088 Mon, 27 Jun 2016 16:41:46 GMT BofA Predicts Record Low Bond Yields In Q3, Resumed Central Bank Easing http://implode-explode.com/viewnews/2016-06-27_BofAPredictsRecordLowBondYieldsInQ3ResumedCentralBankEasing.html Equity indexes worldwide are likely to endure sustained declines and heightened volatility, as uncertainty persists. Our European equity strategists see a 16% downside the Stoxx 600 that would push through the February lows. Our US equity strategists expect up to a 6-7% drop in the S&P 500.

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The spillover from Brexit to global growth is modest but not trivial, in our view. We have trimmed 0.2pp from our US GDP growth forecast for the next six quarters, bringing 2017 growth down to 1.8% from 2.0% previously.

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Central banks that held their fire ahead of the UK referendum may soon deploy additional easing. Some fiscal stimulus is likely as well. In particular, we look for the BOJ and RBA to ease further at upcoming meetings, and the ECB to extend QE at its July meeting. We expect the BOE to cut rates by 50bp to zero in July and to expand QE by £50bn within the next few policy meetings.

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iehi-feed-60087 Mon, 27 Jun 2016 16:39:12 GMT Death to All Zombies! - Kunstler http://implode-explode.com/viewnews/2016-06-27_DeathtoAllZombiesKunstler.html The next stage of this protean global melodrama [post-Brexit] is what happens when currencies and interest rates become completely unglued from their assigned roles as patsies in financial racketeering. Sooner or later we'll know what's going on in the vast shadowy gloaming of "derivatives," especially the "innovative" arrangements that affect to be "insurance" against losses in currency and interest rate "positions" -- bets made on the movements of these things. When currencies rise or fall quickly, these so-called "swaps" are "triggered," and then some hapless institution is left holding a big bag of dog-shit. A zombie is a terrible thing to behold, but a zombie holding a bag of dog-shit is like unto the end of the world.

Once this contagion starts burning, the people-in-charge won't be able to quell it the way they did last time: by drowning it in torrents of money-from-nowhere. At least not without inducing real-deal inflation, the kind that leads to epochal ruin and more intense political upheaval: the nation-changing kind.

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iehi-feed-60086 Mon, 27 Jun 2016 16:27:04 GMT China, Russia pledge business partnership worth $50 billion as Belt & Road Takes Shape http://implode-explode.com/viewnews/2016-06-27_ChinaRussiapledgebusinesspartnershipworth50billionasBeltRoadTake.html iehi-feed-60085 Mon, 27 Jun 2016 16:07:53 GMT Soros: The Man Who DIDN'T Break The Pound (This Time) http://implode-explode.com/viewnews/2016-06-27_SorosTheManWhoDIDNTBreakThePoundThisTime.html "George Soros did not speculate against sterling while he was arguing for Britain to remain in the European Union. In fact, he was long the British pound leading up to the vote," the spokesman said in an emailed statement.

Soros, however, did profit from other investments "because of his generally bearish outlook on world markets," according to the statement.

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Soros had urged British citizens to vote to remain in the European Union in the run-up to last Thursday's referendum. The investor warned that a "leave" vote would spark a sterling plunge but without the beneficial impact that followed the "Black Wednesday" devaluation that accompanied the pound's 1992 ejection from the European exchange-rate mechanism.

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iehi-feed-60083 Mon, 27 Jun 2016 14:48:15 GMT Russia-German Pipeline May Break Europe's Energy Union http://implode-explode.com/viewnews/2016-06-27_RussiaGermanPipelineMayBreakEuropesEnergyUnion.html iehi-feed-60082 Sun, 26 Jun 2016 18:27:56 GMT Bravo Brexit! | David Stockman http://implode-explode.com/viewnews/2016-06-26_BravoBrexitDavidStockman.html This time populist and insurgent politicians are not going to roll-over for the rule of unelected central bankers and the international financial apparatchiks of the IMF and related institutions.

In that context, it can be confidently said that the Eurozone and ECB are finished. That's because the monstrously inflated euro-bond market that Draghi created will implode if the front-running speculators lose confidence in the scheme.

At length, it will become evident that Draghi's "whatever it takes" gambit was the single most foolish act in the history of central banking. It assumed that the rule of the financial elite was limitless and endless.

Brexit proves that both assumptions are wrong. Now every nook and cranny of the world's bloated and radically mispriced financial casinos will face the same shock to confidence.

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iehi-feed-60081 Sun, 26 Jun 2016 14:53:07 GMT Britain's Labour Party in turmoil over Brexit vote results http://implode-explode.com/viewnews/2016-06-26_BritainsLabourPartyinturmoiloverBrexitvoteresults.html The leader of Britain's opposition Labour Party has vowed not to step down amid challenges to his leadership as the fallout from the UK's momentous vote to leave the European Union continues.

Four senior MPs resigned from Labour leader Jeremy Corbyn's shadow cabinet Sunday, and a fifth was sacked by Corbyn for reportedly plotting against his leadership in the wake of Britain's startling vote to leave the EU in last Thursday's referendum.

... Corbyn, who became leader of the Labour Party in September, has been criticized for his lackluster performance in campaigning for the "Remain" camp.

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iehi-feed-60080 Sun, 26 Jun 2016 14:38:56 GMT MIchael Hudson: The Slow Crash http://implode-explode.com/viewnews/2016-06-26_MIchaelHudsonTheSlowCrash.html iehi-feed-60079 Sun, 26 Jun 2016 14:29:01 GMT How They Capped The Gold Price Rise In Brexit http://implode-explode.com/viewnews/2016-06-26_HowTheyCappedTheGoldPriceRiseInBrexit.html As turmoil shook the global markets, gold shot higher and, at one point, was up nearly $100. However, within hours it had given back nearly half of those gains and then spent the remainder of the day in am unusual and very tight trading range while virtually every other "market" was rocked with volatility throughout the trading day... The all-important question of the day is: How and why was this done? ... What does the data show? On Friday, with global markets in turmoil and precious metals markets rallying significantly, The Bullion Banks on the Comex issued brand new supply of nearly 60,000 new paper gold contracts!

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Did the world's gold producers all suddenly decide to forward sell and hedge 186 metric tonnes of future production yesterday, just as the most significant economic event in eight years was beginning to unfold? OR: Did the Bullion Banks suddenly put up a few million ounces of their own gold and then lever it up a few times and issue 60,000 new contracts based upon this collateral deposit? Obviously, the answer to both questions is a big, bold NO!

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Without this added supply...which grew total open interest by over 10% in one day!...how much further would the paper price of gold have risen yesterday?

See this linked piece on physical shortage in the large-scale physical gold market in the week leading up to Brexit.

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iehi-feed-60078 Sun, 26 Jun 2016 02:14:43 GMT Brexit Blowback Hits Italian and Spanish Banks http://implode-explode.com/viewnews/2016-06-25_BrexitBlowbackHitsItalianandSpanishBanks.html iehi-feed-60077 Sat, 25 Jun 2016 14:25:33 GMT #Regrexit!! http://implode-explode.com/viewnews/2016-06-25_Regrexit.html iehi-feed-60076 Sat, 25 Jun 2016 14:17:00 GMT Why the Bitcoin Price Rise on Brexit News Matters http://implode-explode.com/viewnews/2016-06-25_WhytheBitcoinPriceRiseonBrexitNewsMatters.html ``The global financial community has come around to viewing Bitcoin as a transformational technology, and not so much a tech novelty, so the next logical step is for it to be thought of as a kind of "digital gold." "This is Bitcoin's coming out party as a global safe-haven investment. Amazing," tweeted Barry Silbert, founder and CEO of the Digital Currency Group and the creator of the Bitcoin Investment Trust.

We got a nice preview of this when Cyprus' banking system collapsed...

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iehi-feed-60075 Sat, 25 Jun 2016 14:14:09 GMT Brexit: The Crisis Begins http://implode-explode.com/viewnews/2016-06-25_BrexitTheCrisisBegins.html A major complicating factor is that while unwinding the EU arrangements is comparatively easy (and that still means the process would take roughly two years), negotiating new trade relations is a far more time consuming process, and experts estimate it would take a minimum of five years and still could fail.

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In the meantime, there are immediate consequences and risks. The Transatlantic Trade and Investment Partnership is probably dead. The sterling crisis and the less dramatic fall in the euro are likely to leave some UK and Eurozone financial institutions with large losses on net dollar and other foreign currency positions. While the British banks, given the magnitude of the sterling plunge, are the obvious focus of concern, many Eurobanks are undercapitalized. Worse, the Eurozone in theory will use a bank bail-in if any institution becomes impaired. We've warned that this is a prescription for bank runs. And it's not just banks that are exposed; operating businesses may have foreign currency commitments they will struggle to meet.

The British government is likely to lose its AAA rating, which also means higher funding costs for its banks, since their borrowing rates are at a premium to the local currency risk-free rate. A recession is almost certain, since the UK exports services and imports goods and many of its imports don't have ready substitutes, while the US and European banks will be doing everything they can to poach both British bankers and their clients, denting the UK balance of trade even more. Richard Smith also points out that a Brexit could imperil Ireland's ability to operate as a tax haven. And that raises the issue that both Scotland and Ireland supported Remain. Is a UK breakup in the offing?

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iehi-feed-60074 Sat, 25 Jun 2016 14:08:38 GMT Brexit: Leaveniks have it. What next? - M. K. Bhadrakumar http://implode-explode.com/viewnews/2016-06-25_BrexitLeavenikshaveitWhatnextMKBhadrakumar.html iehi-feed-60073 Sat, 25 Jun 2016 14:04:28 GMT Global markets lose $2.1 trillion in Brexit rout http://implode-explode.com/viewnews/2016-06-25_Globalmarketslose21trillioninBrexitrout.html iehi-feed-60072 Fri, 24 Jun 2016 22:31:40 GMT AEP: Eurocrats Bred Splittist "Terroir-ists", Not Terrorists; Post-Brexit Ground Fraught, But Manageable http://implode-explode.com/viewnews/2016-06-24_AEPEurocratsBredSplittistTerroiristsNotTerroristsPostBrexitGroun.html threatening emanations out of Brussels and from remaining EU members, the case for optimally managing the Brexit doesn't look great... hopefully cooler heads will ultimately prevail...]]> iehi-feed-60071 Fri, 24 Jun 2016 19:59:26 GMT In Brexit victory, a defiant protest against globalization http://implode-explode.com/viewnews/2016-06-24_InBrexitvictoryadefiantprotestagainstglobalization.html "People are waking up to realize that, look, this is potentially a misguided protest vote, but it is a protest vote, and politics is not working for a lot of people," says Brian Klaas, a fellow in comparative politics at the London School of Economics. He says the results will demand greater responsiveness from politicians, so that frustrations do not drive greater nationalism and isolation.

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The immediate shocks are still not known. But German Chancellor Angela Merkel spoke for many when she said, "There is no point beating about the bush: today is a watershed for Europe, it is a watershed for the European unification process."

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or British society, this was much more than a response from the far-right, says Robert Colls, professor of cultural history at De Montfort University in Leicester, who was calling for a "Lexit," or a socialist response to Brexit, ahead of the vote. He says the choice to leave is a "late response to globalization" that has dislocated too many people and not been addressed by the Labour party, the majority of whose members backed the Remain camp.

The referendum itself, and the way it played out amid fear and falsifications, is also indicative of a broken system. "We haven't got a really good system for dealing with complicated matters," he says. "It has not been necessary for either side to say what will happen next. No one has had to spell it out. We just have to frighten each other."

For that reason he says he, like the majority who voted for Brexit, have no idea what to expect now. But they believe that they've actually made the more prudent choice with an EU they say simply does not work.

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