Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61462 Wed, 11 Jan 2017 22:51:04 GMT Volkswagen agrees to $4.3 billion U.S. diesel settlement http://implode-explode.com/viewnews/2017-01-11_Volkswagenagreesto43billionUSdieselsettlement.html According to documents filed in U.S. District Court in Detroit, VW will pay a $1.5-billion civil fine and $2.8-billion criminal fine. It would have faced higher fines if it hadn't agreed to spend an estimated $11 billion to address consumer vehicles.

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Prosecutors also charged six Volkswagen executives and employees, for their roles in the nearly 10-year conspiracy, including Oliver Schmidt, who was a manager in charge of VW's environmental and engineering office in Michigan.

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iehi-feed-61448 Tue, 10 Jan 2017 15:01:44 GMT Obama's Blunder; Trump's Gambit - Jim Rickards http://implode-explode.com/viewnews/2017-01-10_ObamasBlunderTrumpsGambitJimRickards.html Most threatening [to US interests] is that in the past ten years, Russia increased its gold reserves 203%, and China increased its gold reserves an estimated 570%. Such gold accumulations have no purpose other than to lay the foundation for a non-dollar based international monetary system. No great power has prevailed long without a great currency. When confidence in the dollar fails, U.S. power will fail with it.

Obama blundered because he allowed Russia and China to pursue the two-against-one dynamic leaving the U.S. as the odd man out. Fortunately it is not too late to reverse this dynamic. Signs from the new Trump administration are encouraging. Trump's early actions and appointments suggest he understands the precarious position of the U.S., and is already moving to change the status quo.

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iehi-feed-61443 Sun, 08 Jan 2017 21:01:16 GMT Peña Nieto Faces Unrest in Mexico as Gas Prices Climb and Trump Looms http://implode-explode.com/viewnews/2017-01-08_PeaNietoFacesUnrestinMexicoasGasPricesClimbandTrumpLooms.html Amid nationwide marches, highway blockades and looting stemming from widespread outrage over an increase in gas prices, President Enrique Peña Nieto of Mexico went on national television to appeal for understanding.

With international oil prices rising and Mexico dependent on gasoline imports, he argued in the speech on Thursday, the government had no alternative but to raise prices at the pump. "Here I ask you," he said, gesturing at the camera, "What would you have done?"

It did not take long for him to get an answer, as social media erupted with suggestions and disgust: Combat corruption and impunity. Eliminate gasoline vouchers for elected officials. Collect more taxes from multinational corporations. Cut the salaries and benefits of high-level government officials. Sell the presidential plane. Reduce the first lady's wardrobe spending. Resign.

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The unrest comes as Mexico braces for the administration of President-elect Donald J. Trump, who has threatened to introduce far more restrictive immigration and trade policies, including canceling the North American Free Trade Agreement, increasing deportations and building a wall on the southern border of the United States... in general the Peña Nieto administration seems to be struggling to figure out how to respond to Mr. Trump. Mexicans have been clamoring for a full-throated, chest-out defense of their country and sovereignty against Mr. Trump's threats, but many say they have yet to hear it.

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The gas price increases of about 20 percent are part of a broad overhaul that ends the state's monopoly over the energy industry. The government has long controlled and subsidized gasoline prices, but by the end of the year it will allow gas prices to fluctuate according to the market, a move intended to attract foreign investment to compete with the state oil company, Pemex.

The government has argued that ending fuel subsidies will help the country avoid spending cuts to social programs, and that the subsidies have disproportionately benefited wealthier Mexicans who own cars. But many fear that higher gasoline prices will increase prices for food and public transportation, hitting the pocketbooks of even the poorest Mexicans.

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iehi-feed-61385 Mon, 02 Jan 2017 13:52:40 GMT Forecast 2017: The Wheels Finally Come Off - KUNSTLER http://implode-explode.com/viewnews/2017-01-02_Forecast2017TheWheelsFinallyComeOffKUNSTLER.html The American people have been punked by their own government and their central bank, the Federal Reserve, for years and the jig is now up. In 2017 both will lose their authority and legitimacy, a very grave matter for the survival of this republic.

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Get this: the Fed is completely full of shit. It is terrified of the conditions it has set up and it has no idea what to do next. The "data" that it claims to be so dependent on is arrantly fake. The government's official unemployment number at Christmas 2016 was 4.6 percent. It's a compound lie....

In 2015 they didn't do anything until the very last Fed meeting of the year when they raised the Fed Funds rate 25 basis point (that's a measly one-quarter of a percent). They raised, they said, because they were "confident" about the economy. No, that's not why. They did it because they talked about it all year without doing anything and their credibility was on the line. They also promised four rate hikes altogether in 2016, which they then failed to carry out...

The Fed Funds rate is one thing. As it happens, the Fed does not directly control the interest rates on US treasury bonds, and they have been rising shockingly through the second half of 2016. The crucial ten-year treasury rate has gone up a hundred percent since the summer. Because bond values move inversely to bond rates, the price of ten-year treasuries has tanked, inducing trillions of dollars in losses to bond-holders around the world. The bond market is many times larger than the stock markets. Bonds have been in a bull market since the early 1980s and that bull rolled over in mid-2016...

A sharply rising interest rate on the ten-year Treasury bond will thunder through the system. A lot of other basic interest costs are keyed to the ten-year bond rate, especially home mortgages, apartment rentals (landlords hold mortgages), and car payments. When the ten year bond rate goes up, so do mortgage payments. When mortgage rates go up, house prices go down, because fewer people are in a position to buy a house at higher mortgage rates, and rents go up (more competition among people who can't buy a house). Zero Interest Rate Policy (ZIRP), in force for ten years, has driven house prices back to stratospheric levels. They are now primed to fall, perhaps severely, leaving many homeowners "underwater," with houses worth way less on the market than the amount of mortgage left to pay off. The re-financing market is dead. Housing starts were already down by a stunning 19 percent in November. Automobile sales are rolling over. Manufacturing and retail sales numbers are down at year end. What's up: stocks, stocks, stocks.

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iehi-feed-61303 Tue, 13 Dec 2016 18:21:57 GMT Trumpxuberance... Until It's Not - KUNSTLER http://implode-explode.com/viewnews/2016-12-13_TrumpxuberanceUntilItsNotKUNSTLER.html iehi-feed-61298 Mon, 12 Dec 2016 16:01:07 GMT Oil prices leap after Russia and others agree to output cuts http://implode-explode.com/viewnews/2016-12-12_OilpricesleapafterRussiaandothersagreetooutputcuts.html Oil has soared above $54 a barrel to its highest level in nearly a year and a half. U.S. crude futures jumped more than 5% on Monday after Russia and a bunch of other big producers agreed over the weekend to join OPEC members in cutting their output next month.

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The group of non-OPEC nations -- which includes Mexico, Kazakhstan and Oman -- will aim to reduce their production by 558,000 barrels a day, according to a statement. That follows OPEC's deal last month to cut its overall production by 1.2 million barrels a day.

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"The question which troubles some investors is whether the higher oil price will give the U.S.'s shale oil production a new lease of life," said Naeem Aslam, chief analyst at Think Markets in London.

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iehi-feed-61287 Sun, 11 Dec 2016 17:12:22 GMT Donald Trump Says Exxon's Rex Tillerson Would Be ‘World-Class Player' as Secretary of State http://implode-explode.com/viewnews/2016-12-11_DonaldTrumpSaysExxonsRexTillersonWouldBeWorldClassPlayerasSecret.html Donald Trump on Sunday defended Exxon Mobil Corp. Chief Executive Rex Tillerson--expected to be the president-elect's choice as secretary of state--as a "world-class player" who knows international leaders well.

"He's more than a business executive,'' Mr. Trump told Fox News in an interview broadcast Sunday. "He's in charge of, I guess, the largest company in the world."

Mr. Trump called it "a great advantage" that Mr. Tillerson already knows "many of the players," noting that he does "massive deals in Russia."

Those deals would be certain to come under scrutiny in Senate confirmation hearings. A number of Republicans have urged Mr. Trump to be wary of Russia, warning that it is trying to expand its influence in ways that run counter to U.S. interests in places such as Ukraine and Syria.

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Since Mr. Trump began vetting candidates for secretary of state, Mr. Tillerson's stock has climbed steadily. He moved ahead of better-known hopefuls with established political credentials--including 2012 Republican presidential nominee Mitt Romney--who had multiple conversations with Mr. Trump about the job. Mr. Tillerson is viewed by some of Mr. Trump's advisers as a mold-breaking pick who would bring an executive's experience to the diplomatic role, said a person involved in the process.

Mr. Trump said in a statement on Friday that former New York Mayor Rudy Giuliani had taken himself out of the running for the diplomatic job and other administration posts late last month.

With Mr. Trump's decision not yet final, other candidates who remain in the running, apart from Mr. Romney, are former CIA director David Petraeus, former U.S. Ambassador to the United Nations John Bolton, and U.S. Sen. Bob Corker (R., Tenn.), people familiar with the matter said.

If Mr. Trump selects Mr. Tillerson, it would add a seasoned business executive to a team that already includes three retired generals. As Exxon's CEO since 2006, Mr. Tillerson could leverage existing relationships with numerous world leaders.

Exxon has a large global presence, and this could introduce potential conflicts if Mr. Tillerson is selected. The company explores for oil and gas on six of the world's continents and has operations in more than 50 countries.

Mr. Tillerson is slated to retire next year and has retirement funds worth tens of millions of dollars, a value that could potentially be affected by State Department activities. For example, he could benefit from such potential department actions as the lifting of sanctions on Russia.

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iehi-feed-61259 Wed, 07 Dec 2016 17:49:10 GMT Standing Rock is a modern-day Indian war. This time Indians are winning http://implode-explode.com/viewnews/2016-12-07_StandingRockisamoderndayIndianwarThistimeIndiansarewinning.html Along the snowy banks of the Missouri river, a new story is being painfully birthed. It tells us that frontiers must at some point close. That endless taking must become care-taking. And that Indigenous rights, cast aside for too long, are a key to protecting land and water and preventing climate chaos. America is waking up to new heroes.

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Almost everywhere these fossil fuel projects have emerged, Indigenous peoples have been their first and fiercest opponents: the Cheyenne stopping coal in Montana, the Lummi defeating an export terminal in Washington, and throughout my country of Canada, Indigenous peoples standing in the way of mines and tar sands pipelines. Forget all those supposedly progressive heads of state who have touted the Paris climate accord but effectively undermined it with their actions: real climate leaders, those keeping carbon in the ground, are doing so directly on the land.

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The Lakota, like other Indigenous peoples, have always had to be depicted as the "evil instigators." How else could they be "hunted like wolves," as one US general commanded in 1865; how else could the government violate the treaties that guaranteed them a huge tract of the plains, include the path taken by the proposed Dakota access pipeline. Their lands--seized for gold, parcelled for cattle grazing, flooded for dams--have shrunk and shrunk. That is why they are poor and America has become rich.

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But brave activism has shown that an unbroken history of ugliness and violence is never a guarantee of the future. It turns out treaty rights were never a specimen of the past. They were always living and sacred obligations. In ways clear to more and more people, they have also become the most powerful non-violent weapon for a habitable planet. Which means that honouring the treaty and land rights of Indigenous peoples is now not only a long-overdue moral and legal duty: a stable climate depends on it.

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iehi-feed-61256 Tue, 06 Dec 2016 23:53:23 GMT Trump Native America Advisors: "Drill, Baby Drill... Under Indian Reservations" http://implode-explode.com/viewnews/2016-12-06_TrumpNativeAmericaAdvisorsDrillBabyDrillUnderIndianReservations.html Native American reservations cover just 2 percent of the United States, but they may contain about a fifth of the nation's oil and gas, along with vast coal reserves. Now, a group of advisors to President-elect Donald Trump on Native American issues wants to free those resources from what they call a suffocating federal bureaucracy that holds title to 56 million acres of tribal lands, two chairmen of the coalition told Reuters in exclusive interviews.

The group proposes to put those lands into private ownership - a politically explosive idea that could upend more than century of policy designed to preserve Indian tribes on U.S.-owned reservations, which are governed by tribal leaders as sovereign nations.

The tribes have rights to use the land, but they do not own it. They can drill it and reap the profits, but only under regulations that are far more burdensome than those applied to private property.

"We should take tribal land away from public treatment," said Markwayne Mullin, a Republican U.S. Representative from Oklahoma and a Cherokee tribe member who is co-chairing Trump's Native American Affairs Coalition. "As long as we can do it without unintended consequences, I think we will have broad support around Indian country."

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The plan dovetails with Trump's larger aim of slashing regulation to boost energy production. It could deeply divide Native American leaders, who hold a range of opinions on the proper balance between development and conservation. The proposed path to deregulated drilling - privatizing reservations - could prove even more divisive. Many Native Americans view such efforts as a violation of tribal self-determination and culture.

It's funny that people think this even matters anymore: two years of rock-bottom energy prices did little to revive the moribund economy, as the core monetary engine of capitalism was not revived.

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iehi-feed-61192 Thu, 01 Dec 2016 00:55:37 GMT Bombshell: OPEC+Russia Agree to Historic Oil Production Cut, Price Spikes 10% http://implode-explode.com/viewnews/2016-11-30_BombshellOPECRussiaAgreetoHistoricOilProductionCutPriceSpikes10.html OPEC confounded its doubters and sent crude oil prices soaring by agreeing to its first production cuts in eight years. The deal, designed to drain record global oil inventories, overcame disagreements between the group's three largest producers -- Saudi Arabia, Iran and Iraq -- and ended a flirtation with free markets that started in 2014. It was also broader than many had expected, extending beyond OPEC. Most strikingly, Russia agreed to unprecedented cuts to its own output.

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The impact on the energy world was immediate: benchmark oil prices gained as much as 10 percent in New York and the share prices of energy companies around the globe jumped alongside the currencies of large exporters. Whether that's sustained will depend on how strictly members of the Organization of Petroleum Exporting Countries stick to the agreement, something they haven't always done in the past.

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iehi-feed-61170 Tue, 29 Nov 2016 15:21:10 GMT Oil Climbs as Iraq Pledges to Cooperate With OPEC on Output Deal http://implode-explode.com/viewnews/2016-11-29_OilClimbsasIraqPledgestoCooperateWithOPEConOutputDeal.html Oil rose as Iraq's oil minister said it pledged to cooperate with OPEC to reach an agreement this week that's acceptable to all members.

Futures gained 2.2 percent in New York, reversing an earlier decline. Iraq's Oil Minister Jabbar al-Luaibi said Monday he's "optimistic" a deal will be reached at OPEC's summit in Vienna on Wednesday. However, after hours of discussions on Monday, an OPEC committee didn't reach agreement on production cuts during high-level talks in Vienna, according to a delegate. Iran and Iraq still have reservations on cuts, the delegate said.

Saudi Arabia previously said that the producer group doesn't necessarily need to curb oil output, after pulling out of a scheduled meeting with non-members including Russia.

... If OPEC fails to reach an output deal this week, oil prices may fall to the $20s, Amrita Sen, Energy Aspects Ltd. chief oil analyst, said in a Bloomberg Television interview in Vienna on Monday.

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iehi-feed-61071 Mon, 14 Nov 2016 17:23:58 GMT What Now? - Kunstler http://implode-explode.com/viewnews/2016-11-14_WhatNowKunstler.html Mr. Trump might not know it yet, but his chief task will be managing contraction. It would appear to be problematic, since his chief promise -- "to make America great again" -- is based on restarting the epic expansions of the 19th and 20th centuries. Well, things have changed... He begins to look like a man in a tunnel staring down the harsh light of the onrushing gravy train.

... The financialization of the economy is already playing into its disastrous climax as I write, with bond markets tanking all over the planet. What this means is that the long-ignored chickens of risk associated with debt are coming home to roost. As they do, they are going to shit over everything on the financial landscape. Industrial societies have been borrowing from the future to a grotesque degree for decades, pretending that these debts were assets rather than liabilities. That perception is about to change, and with it an enormous amount of presumed notional wealth is going to disappear.

... My sense of things is that this meta-predicament alone could overwhelm the Trump government from the very start. We could have problems with money orders of magnitude worse than anything FDR faced in 1933, with bank closures, the seizing of accounts, and the paralysis of everyday business.

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iehi-feed-61027 Tue, 08 Nov 2016 15:48:55 GMT OPEC Boss Warns of Oil-Market Instability If No Deal on Output http://implode-explode.com/viewnews/2016-11-08_OPECBossWarnsofOilMarketInstabilityIfNoDealonOutput.html The Algiers agreement helped push oil prices to a 15-month high above $50 a barrel, but crude has subsequently fallen as several OPEC states disputed production estimates that would determine the size of cuts required of the group's individual members. OPEC wants to put the changes into effect when it meets in Vienna on Nov. 30.

The group's internal disagreements have so far prevented a deal to secure cooperation from major non-OPEC suppliers such as Russia after rounds of talks in Vienna. The producers will meet again in the Austrian capital later this month. OPEC, which pumps about 40 percent of the world's oil, is trying to persuade suppliers from outside the group to join the cuts. The 14-member group has held talks in the past weeks with producer nations including Russia, Azerbaijan, Brazil, Kazakhstan and Mexico.

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iehi-feed-61024 Tue, 08 Nov 2016 06:05:29 GMT Iran to Sign $6 Billion Gas-Field Deal With Total, CNPC http://implode-explode.com/viewnews/2016-11-08_IrantoSign6BillionGasFieldDealWithTotalCNPC.html Iran plans to sign a preliminary $6 billion deal with France's Total SA on Tuesday to help develop an offshore gas field, an agreement that would mark the first Western energy investment there since international sanctions were lifted this year.

Under the deal, Total, China National Petroleum Corp. and Iran's state-owned Petropars would develop part of a giant gas field in the Persian Gulf known as South Pars, a press official at Iran's oil ministry said.

It wasn't clear how much of the $6 billion investment would come from Total, or how the deal would be structured for Total to steer clear of U.S. restrictions still in effect.

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The deal is a draft that still must be completed over the next six months, the Iranian oil-ministry official said, but it gives Total and CNPC a head start over competitors. Total and CNPC both signed deals years ago to develop the South Pars project before sanctions forced them to pull out in 2009 and 2012, respectively.

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iehi-feed-60969 Fri, 28 Oct 2016 16:20:15 GMT Woe in the oilfield: 213 companies have now declared bankruptcy http://implode-explode.com/viewnews/2016-10-28_Woeintheoilfield213companieshavenowdeclaredbankruptcy.html iehi-feed-60948 Tue, 25 Oct 2016 18:14:33 GMT Faber on why commodity prices will rise, oil to hit $70 soon http://implode-explode.com/viewnews/2016-10-25_Faberonwhycommoditypriceswillriseoiltohit70soon.html iehi-feed-60909 Tue, 18 Oct 2016 21:32:53 GMT Duterte Visit to China; Failed "Pivot"? http://implode-explode.com/viewnews/2016-10-18_DuterteVisittoChinaFailedPivot.html Philippine President Rodrigo Duterte arrived in China to meet with Chinese Premier Xi Xinping. Duterte has become a very controversial figure in Asian politics as he has publicly excoriated U.S. President Barack Obama's treatment of him and his country.

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His meeting with Xinping comes after multiple public clashes with Obama which has led to ending joint sea patrols with the U.S. Seventh Fleet in the disputed South China Sea.

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iehi-feed-60900 Mon, 17 Oct 2016 19:42:17 GMT Corruption in China is Structural; Will The Country Buckle Under It Before Reforming? http://implode-explode.com/viewnews/2016-10-17_CorruptioninChinaisStructuralWillTheCountryBuckleUnderItBeforeRe.html IN 1989 the movement for democracy brought the Chinese Communist Party to within days of extinction. According to official reports, on one day alone, May 22nd, 6m people joined demonstrations in 132 cities across the country. The party's immediate response was to use the people's army to crush the people by force, in Tiananmen Square. To rebuild the loyalty of those who would continue to rule in the party's name, its leaders went on to create the conditions in which officials at all levels could loot state property. Thus, the biggest democracy movement in history was countered by the greatest opportunity for predation the world has ever seen.

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Mr Pei's book is quietly devastating. In sober, restrained language, he exposes the full gravity of corruption in China. Presenting a wealth of evidence, he shows that this is not the unfortunate by-product of rapid economic growth but the result of strategic choices by the party. With clinical precision, Mr Pei explains how corruption operates at every level, perverting each branch of the party-state and subverting the political authority of the regime. The party cannot mitigate, let alone eradicate, "crony capitalism" because, since 1989, it has been "the very foundations of the regime's monopoly of power", the author argues. The conclusion, he believes, is that far from saving the regime, President Xi Jinping's anti-corruption drive may accelerate its demise by creating divisions within the ruling elite even as it reinforces strong popular resentment of corruption.

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Corruption in China has been made easy by ill-defined property rights, decentralised administrative authority and the absence of democratic checks and balances, such as an independent judiciary, a free press and political competition. Only by improving all of these can it be permanently reduced. Belatedly, the party under Mr Xi has recognised that corruption poses a mortal threat to the regime, but it has, at the same time, rejected the very reforms that offer the only prospect of a remedy.

Mr Pei grew up in Shanghai and lived there in the hopeful early 1980s, but he is not optimistic now: "Even a revolutionary overthrow of the old order may not usher in the dawn of a liberal democracy. The legacies of crony capitalism...will enable those who have acquired enormous illicit wealth under the old regime to wield outsized political influence in a struggling new democracy that will have poor odds of survival," he writes.

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iehi-feed-60894 Sun, 16 Oct 2016 18:20:57 GMT Goldman Sachs Wins Suit Over $1.2 Billion Libyan Fund Losses http://implode-explode.com/viewnews/2016-10-16_GoldmanSachsWinsSuitOver12BillionLibyanFundLosses.html Goldman Sachs Group Inc. didn't dupe Libyan officials into investments that lost $1.2 billion, a London court ruled, putting to rest claims the bank leveraged its reputation as well as lavish meals and prostitutes to win the sovereign wealth fund's trust.

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The Libyan Investment Authority, a $60 billion oil wealth fund set up under former dictator Moammar Qaddafi, sued Goldman Sachs saying it was misled into signing derivative deals it never properly understood. The trades ended up being virtually worthless after the company shares they were linked to fell in the 2008 crisis.

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iehi-feed-60882 Fri, 14 Oct 2016 14:40:38 GMT Saudi Arabia, SoftBank plan $100 billion tech fund - one of the world's biggest http://implode-explode.com/viewnews/2016-10-14_SaudiArabiaSoftBankplan100billiontechfundoneoftheworldsbiggest.html Saudi Arabia and Japan's SoftBank Group said they will create a technology investment fund that could grow as large as $100 billion, aiming to create one of the world's largest private equity funds.

The plan is part of a series of dramatic business initiatives launched by Riyadh this year as Saudi Arabia, its economy hurt by low oil prices, deploys huge financial reserves in an effort to move into non-oil industries.

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The Public Investment Fund (PIF), Saudi Arabia's top sovereign wealth fund, is set to be the lead investment partner and may invest up to $45 billion over the next five years while SoftBank expects to invest at least $25 billion, the Japanese company said in a statement.

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[Crown Prince Salman] has said he aims to expand the PIF, founded in 1971 to finance development projects in the kingdom and until this year little known abroad, from $160 billion to about $2 trillion, making it the world's largest sovereign fund.

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