Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60520 Thu, 25 Aug 2016 00:35:40 GMT Investors controlling $13tn call on G20 leaders to ratify Paris climate agreement http://implode-explode.com/viewnews/2016-08-24_Investorscontrolling13tncallonG20leaderstoratifyParisclimateagre.html A group of 130 institutions that control US$13tn of investments have called on G20 nations to ratify the Paris agreement this year and accelerate investment in clean energy and forced disclosure of climate-related financial risk.

Countries that ratified the Paris agreement early would benefit from better policy certainty and would attract investment in low-carbon technology, the signatories said in a letter before the G20 heads of government meeting in September.

They called for strong carbon pricing to be implemented, as well as regulations that encouraged energy efficiency and renewable energy. Plans for how to phase out fossil fuels also needed to be developed, they said.

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iehi-feed-60483 Fri, 19 Aug 2016 19:24:57 GMT Australia Blocks Power Grid Sale To China; Opening Rift Between Countries http://implode-explode.com/viewnews/2016-08-19_AustraliaBlocksPowerGridSaleToChinaOpeningRiftBetweenCountries.html China voiced anger on Friday over a decision by Australia to rule out on security grounds the preferred Chinese bidders for an energy grid potentially worth more than $7 billion and restart the sale process.

Australia's Treasurer Scott Morrison, who must approve major foreign investments, formally blocked the sale of Ausgrid to State Grid Corp of China and Hong Kong's Cheung Kong Infrastructure Holdings earlier in the day.

Last month, Britain said it would review plans to build two nuclear reactors at Hinkley Point with financial backing from China General Nuclear. Prime Minister Theresa May was concerned about the security implications of the proposed Chinese investment, a former colleague and a source said.

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Foreign bidders will likely need to restructure their deals and bring in local partners to succeed in Australia, said Matthew Fitzgerald, an Australian-based corporate partner at law firm Herbert Smith Freehills.

"One example would be that rather than have a majority Chinese consortium buying the asset, you might have three or four different investors, some of whom are Australian, some of whom are Chinese," Fitzgerald said.

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iehi-feed-60473 Fri, 19 Aug 2016 13:59:03 GMT The Land of Genghis Khan Is Having an Epic Economic Meltdown http://implode-explode.com/viewnews/2016-08-19_TheLandofGenghisKhanIsHavinganEpicEconomicMeltdown.html Mongolia, a mineral-rich and landlocked $12 billion economy bordering Russia and China, is staring at a full-blown balance of payments crisis. It's caused barely a ripple in global financial markets, but the nation's economic meltdown offers instructive lessons to far bigger resource-reliant economies like Brazil, Venezuela, Russia and Saudi Arabia. 

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Stoked by a booming Chinese economy and brisk foreign direct investment flows, Mongolia was one of the fastest-growing economies in the decade that ended in 2015. Its economy clocked in with an average real GDP growth rate of 8 percent, while per capita income surged to about $4,000.

It all went bad when China's growth throttled back from double-digit levels in 2011, just as a coalition government led by Altankhuyag Norov went on a debt-fueled spending binge.

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"It seems unlikely that the country will be able to avert the need to restructure its debts or seek a bailout from the IMF," said Renata Lagierska, a senior associate at a Alaco, a London-based business intelligence consultancy.

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iehi-feed-60451 Tue, 16 Aug 2016 02:05:33 GMT Burning Down the House | KUNSTLER http://implode-explode.com/viewnews/2016-08-15_BurningDowntheHouseKUNSTLER.html iehi-feed-60417 Wed, 10 Aug 2016 18:48:25 GMT For Oil Companies $110 Billion Debt Wall Looms Over Next 5 Years http://implode-explode.com/viewnews/2016-08-10_ForOilCompanies110BillionDebtWallLoomsOverNext5Years.html iehi-feed-60399 Mon, 08 Aug 2016 20:59:38 GMT Trump vows to jolt economy with tax cuts, domestic investment http://implode-explode.com/viewnews/2016-08-08_Trumpvowstojolteconomywithtaxcutsdomesticinvestment.html In a speech received with subdued applause and repeatedly interrupted by protesters, Trump vowed to create 500,000 jobs annually in the first seven years of his administration, while cutting business taxes and reducing federal regulations -- with hopes of resetting his presidential campaign in the process.

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Trump also touted his plan to eliminate the estate tax, put a moratorium on new federal regulations and reduce the corporate tax rate from 35 percent to 15 percent, in his speech at the Detroit Economic Club.

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In his speech Monday, Trump also announced his plan to allow parents to fully deduct the cost of childcare from their taxable income. He also called again for boosting domestic energy production -- a plan his campaign estimates can add $6 trillion in local, state and federal revenue over the next four decades.

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This wasn't the first time Trump set out his economic vision. He first unveiled his tax plan in the fall of 2015, framing it as a boon to the middle class. "It's going to cost me a fortune," he told reporters as he vowed to lower taxes across the board without exploding the deficit.

But a host of independent groups crunching the numbers soon concluded otherwise. The plan, they said, dramatically favored the wealthy over the middle class and would increase the debt by as much as $10 trillion over the next decade.

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iehi-feed-60350 Tue, 02 Aug 2016 02:11:22 GMT Saudi Banks Offered $4BN Bailout To Avoid Liquidity Crisis http://implode-explode.com/viewnews/2016-08-01_SaudiBanksOffered4BNBailoutToAvoidLiquidityCrisis.html budget deficits -> more oil pumping -> even lower oil prices" can only end badly.'']]> iehi-feed-60301 Tue, 26 Jul 2016 04:05:42 GMT Grant Williams on Peak Credit, Oil (Demand), and Gold (Supply); Trump and The Money Printing Endgame (Matterhorn Interview) http://implode-explode.com/viewnews/2016-07-26_GrantWilliamsonPeakCreditOilDemandandGoldSupplyTrumpandTheMoneyP.html Donald Trump is the self-professed king of debt, which is very apropos for the United States right now... He's come out and said, "No, no, no. We'll never have to default because we'll just print the money". This, to me, is something I've been waiting for, for quite some time now, and this is the fact that central banks have been able to print an extraordinary amount of money over the last eight years with optically no bad side effects. The inflation hasn't shown up that people were warning about price in the money printing game going. And my fear was always that that would embolden politicians who didn't really understand any of the nuance of this; they heard there was money printing going on, they were waiting for the bad effects to happen, they haven't seen them, so they think that this money printing thing works.

... Politicians don't understand these things for the most part. They're complicated ideas and they don't have demonstrable outcomes, the wheels that get set in motion when you do things like go to negative interest rates and print money start spinning very slowly and you don't really see what comes out of the machine for an indeterminate amount of time. We haven't seen it yet, but we will. There are no free lunches, but the very fact that the political class has seen this happen without any obvious ill effects has emboldened them and Trump... He thinks he understands debt and he will have no qualms about going deeper into debt.

At some point, however, the question of faith in the finances of the US Government, faith in the quality of the dollar are going to be raised again by the market in general, and when that time comes, it's very hard to see how there is a solution to calm any nervousness that people have around the dollar without some significant pain being felt. There is a storm coming. There is no two ways about it, and I think if people pay attention, you will have heard recently some really significant names starting to express the fears they have. Guys like Carl Icahn, guys like Stan Druckenmiller have been very outspoken about how concerned they are for what's happening. And if you listen to those things carefully and you understand that these guys are some of the smartest investors in the world, if guys like that are getting out of equities, getting into gold, getting into cash, there are very good reasons for that, and the average investor in the street should be listening to that and trying to understand why the smartest investors in the world are thinking that way because it's extremely important to try and understand.

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iehi-feed-60226 Fri, 15 Jul 2016 17:20:20 GMT Wells Fargo Profit Falls as Energy Loans Sour, Costs Climb (AND ZIRP HURTS) http://implode-explode.com/viewnews/2016-07-15_WellsFargoProfitFallsasEnergyLoansSourCostsClimbANDZIRPHURTS.html Wells Fargo & Co., the world's most valuable bank, said second-quarter profit fell 2.8 percent as more energy loans soured, expenses rose and revenue from mortgage lending declined... Net interest margin, the difference between what a bank pays for deposits and earns on loans, decreased 4 basis points in the quarter to 2.86 percent, falling short of some analysts' estimates. The measure, known as NIM, has declined the past four quarters.

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Provisions for credit losses more than tripled to $1.07 billion from a year earlier, tied largely to the bank's oil and gas portfolio, while net write-offs rose about 42 percent to $924 million, Wells Fargo said. Net interest income, including the loan-loss provision, declined 2.8 percent to $10.7 billion from a year earlier... "... "The oil and gas portfolio remains under significant pressure," Chris Wheeler, an analyst at Atlantic Equities LLP wrote in a note to clients.

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iehi-feed-60212 Thu, 14 Jul 2016 14:05:37 GMT Great American Oil Bust Rages on; Defaults, Bankruptcies Soar http://implode-explode.com/viewnews/2016-07-14_GreatAmericanOilBustRagesonDefaultsBankruptciesSoar.html The trailing 12-month US high-yield bond default rate jumped to 4.9% at the end of June, the highest since May 2010 as the Financial Crisis was winding down, Fitch Ratings reported today. The first-half total of $50.2 billion of defaults already exceeds the $48.3 billion for the entire year 2015.

Energy companies accounted for 56% of those defaults. The energy sector default rate shot up to 15%. Within it, the default rate of the Exploration & Production (E&P) sub-sector soared to 29%!

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Between E&P and Oilfield Services companies, the Great American Oil Bust has now generated a combined 157 bankruptcies involving $73 billion in debt, much of it unsecured and by now mostly evaporated.

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iehi-feed-60165 Fri, 08 Jul 2016 17:55:42 GMT Global Sovereign Credit Rating Downgrades Set To Hit Record High, Fitch Says http://implode-explode.com/viewnews/2016-07-08_GlobalSovereignCreditRatingDowngradesSetToHitRecordHighFitchSays.html iehi-feed-60107 Wed, 29 Jun 2016 18:31:42 GMT Turkish Stream project; Russia-Turkey tourism to resume after Erdogan apology http://implode-explode.com/viewnews/2016-06-29_TurkishStreamprojectRussiaTurkeytourismtoresumeafterErdoganapolo.html Russian-Turkish tourism spigot is about to be turned back on, as well...]]> iehi-feed-60084 Mon, 27 Jun 2016 15:01:41 GMT Erdogan apologizes to Putin over death of Russian pilot, calls Russia ‘friend & strategic partner' http://implode-explode.com/viewnews/2016-06-27_ErdoganapologizestoPutinoverdeathofRussianpilotcallsRussiafriend.html 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-60040 Tue, 21 Jun 2016 16:20:42 GMT Raymond James: Get Ready for $80 Oil http://implode-explode.com/viewnews/2016-06-21_RaymondJamesGetReadyfor80Oil.html iehi-feed-60025 Sat, 18 Jun 2016 13:57:32 GMT Rio state declares 'public calamity' over finances http://implode-explode.com/viewnews/2016-06-18_Riostatedeclarespubliccalamityoverfinances.html iehi-feed-60016 Fri, 17 Jun 2016 00:00:07 GMT JPMorgan CIO Crushes Cameron's Scaremongery on Brexit http://implode-explode.com/viewnews/2016-06-16_JPMorganCIOCrushesCameronsScaremongeryonBrexit.html iehi-feed-60010 Thu, 16 Jun 2016 13:34:45 GMT For One Breed of Wall Street Bankers, Business Is Booming Again http://implode-explode.com/viewnews/2016-06-16_ForOneBreedofWallStreetBankersBusinessIsBoomingAgain.html iehi-feed-59960 Mon, 06 Jun 2016 13:39:38 GMT Saudi Arabia Races Through Financial Toolkit to Raise Funds http://implode-explode.com/viewnews/2016-06-06_SaudiArabiaRacesThroughFinancialToolkittoRaiseFunds.html In recent weeks, the kingdom raised a $10 billion loan, clamped down on currency speculators and informed banks of plans to raise as much as $15 billion in its first international bond sale, people with knowledge of the matter said. It's also said to be contemplating IOUs to pay contractor bills and hired HSBC Holdings Plc banker Fahad Al Saif to set up a new debt office.

The speed of the measures underscores Deputy Crown Prince Mohammed bin Salman's urgency to shore up the country's finances as an era of oil-fueled abundance falters. Though currency reserves remain strong -- among the world's largest -- net foreign assets are at a four-year low after declining for 15 months in a row and the kingdom may post a budget deficit of about 13.5 percent of economic output this year.

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Authorities are also taking steps to protect the currency regime amid speculation the country will have to abandon the riyal's three-decade-old peg to the U.S. dollar. Last week, the Saudi Arabia Monetary Agency ordered banks to stop selling dollar-riyal forward structured contracts immediately, following a similar order in January, people aware of the matter said.

Among those betting that the peg may not endure are U.S. hedge funds. PointState Capital's Zach Schreiber, who made $1 billion betting against oil two years ago, is wagering that weaker long-term crude prices and rising costs will cause the country to abandon the peg. Pershing Square Capital Management has made similar bets.

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iehi-feed-59955 Sun, 05 Jun 2016 19:13:24 GMT Swiss reject free income plan after worker vs robot debate http://implode-explode.com/viewnews/2016-06-05_Swissrejectfreeincomeplanafterworkervsrobotdebate.html Swiss voters rejected by a wide margin on Sunday a proposal to introduce a guaranteed basic income for everyone living in the wealthy country after an uneasy debate about the future of work at a time of increasing automation.

Supporters had said introducing a monthly income of 2,500 Swiss francs ($2,563) per adult and 625 francs per child under 18 no matter how much they work would promote human dignity and public service. Opponents, including the government, said it would cost too much and weaken the economy.

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