IEHI Feed: The Bank Implode-o-Meter http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62685 Fri, 28 Jul 2017 03:51:20 GMT Amazon: Ugly Q3 Guidance Easily Predicted (& STOCK GUT-CHECKED -6%(+) FROM DAY'S HIGH) http://bankimplode.com/viewnews/2017-07-27_AmazonUglyQ3GuidanceEasilyPredictedSTOCKGUTCHECKED6FROMDAYSHIGH.html Amazon guided to a potential Q3 operating loss of up to $400 million. Somehow, analysts were up at a consensus operating income of $950 million despite the historical knowledge that the company expands retail growth at the costs of profits.

Maybe even worse, sales guidance for the quarter wasn't all that strong either, with mid-point guidance of only 24%. Clearly, the Prime Day event stole sales from the rest of the month versus generating a boost to revenues for the quarter.

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The key investor takeaway is that Amazon is the FANG stock that doesn't belong with the others. The ugly Q3 guidance should dent the stock for a while, but the market will probably brush off the weakness heading into Q4. The stock really isn't appealing at any price, but the momentum play likely remains intact, though much better opportunities exist elsewhere.

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iehi-feed-62684 Fri, 28 Jul 2017 01:49:14 GMT Libor Funeral Set for 2021 as FCA Abandons Scandal-Tarred Benchmark http://bankimplode.com/viewnews/2017-07-27_LiborFuneralSetfor2021asFCAAbandonsScandalTarredBenchmark.html The U.K. Financial Conduct Authority will phase out the key interest-rate indicator by the end of 2021 after it became clear there wasn't enough meaningful data to sustain the benchmark that underpins more than $350 trillion in securities, Andrew Bailey, the head of the regulator, said in a speech Thursday at Bloomberg's London office.

The end of the London interbank offered rate, or Libor, is welcome on many levels for regulators. It was tied to some of the banking industry's biggest scandals, leading to about $9 billion in fines and the conviction of several bankers for manipulating the rate. Relying on the opinions of industry insiders to set the daily estimates based on interbank lending -- some in markets that saw fewer than 20 transactions annually -- was unacceptable, Bailey said.

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iehi-feed-62682 Fri, 28 Jul 2017 00:26:06 GMT Does Specialized Loan Servicing Discriminate Against People of Color? http://bankimplode.com/viewnews/2017-07-27_DoesSpecializedLoanServicingDiscriminateAgainstPeopleofColor.html iehi-feed-62681 Thu, 27 Jul 2017 19:48:04 GMT Republicans Kill Border Adjustment Tax http://bankimplode.com/viewnews/2017-07-27_RepublicansKillBorderAdjustmentTax.html A statement Thursday from the so-called Big Six - Ryan, Brady, White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch - said due to the unknowns associated with the border-adjusted tax, the group "had decided to set this policy aside in order to advance tax reform."

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As for BAT being gone, it means that any Trump tax cuts - a generous assumption these days - will be that much smaller as the border adjustment tax was expected to raise roughly $1.2 trillion in government revenue over the next decade, offsetting over half of the corporate tax cut over a ten year period. In other words, so much for corporate tax cuts.

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iehi-feed-62680 Thu, 27 Jul 2017 19:40:32 GMT The rise and fall of the property-owning democracy (UK) http://bankimplode.com/viewnews/2017-07-27_TheriseandfallofthepropertyowningdemocracyUK.html iehi-feed-62679 Thu, 27 Jul 2017 17:42:08 GMT Fulfillment Center Warehouse Jobs Give New Life to Sleepy Towns http://bankimplode.com/viewnews/2017-07-27_FulfillmentCenterWarehouseJobsGiveNewLifetoSleepyTowns.html ``Entire towns are becoming hubs for these "fulfillment centers" that offer internet retailers the ability to move their boxes more quickly from your click to your doorstep. The million-square-feet, jobs-building juggernauts also give a unique boost to the lower-income, lower-skilled workers previously left out of the country's economic recovery and technological transformation.

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"We've typically had kind of a boring downtown [in Tracy, CA], and in the last few years it's started to pick up," he told NBC News. "People are in town more. They're not commuting three hours a day after working an eight- or 10-hour day. They're actually here and have the energy to go out and eat."

"We've seen a lot of [people in their] early 20s who are just getting started, getting their first jobs in distribution, fulfillment -- and then a lot of families, which are more the management side of things; and then the construction that goes into it."

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[Such jobs created] stands somewhat in contrast to predictions about the death of retail and continued erosion of jobs by technology. By one estimate, the e-commerce industry in the past 10 years has created 397,000 U.S. jobs in the U.S., compared to 76,000 retail jobs lost, wrote Michael Mandel, chief economic strategist at the Progressive Policy Institute in Washington, in a new report. And the new jobs pay about 30 percent more, he said.

Mandel also argues that more jobs are being created as some of the "unpaid labor" that shoppers used to do schlepping products from the mall to their homes is being redistributed into e-commerce.

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iehi-feed-62676 Thu, 27 Jul 2017 17:30:26 GMT Bezos is world's new richest man at $91.4 bln http://bankimplode.com/viewnews/2017-07-27_Bezosisworldsnewrichestmanat914bln.html iehi-feed-62674 Thu, 27 Jul 2017 14:48:28 GMT Howard Marks Sounds the Alarm on Tech, Cryptocurrencies and Private Equity http://bankimplode.com/viewnews/2017-07-27_HowardMarksSoundstheAlarmonTechCryptocurrenciesandPrivateEquity.html iehi-feed-62673 Thu, 27 Jul 2017 01:20:54 GMT Greece arrests Russian suspected of running $4 billion bitcoin laundering ring http://bankimplode.com/viewnews/2017-07-26_GreecearrestsRussiansuspectedofrunning4billionbitcoinlaunderingr.html Police said "at least" $4 billion in cash had been laundered through a bitcoin platform since 2011 - the year BTC-e was founded - with 7 million bitcoins deposited, and 5.5 million bitcoins in withdrawals.

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Founded in 2011, BTC-e is one of the oldest and most obscure virtual currency exchanges, allowing users to trade bitcoin pseudonymously against fiat currencies, such as the U.S. dollar, and other virtual currencies. Until today, the people behind it had remained unknown.

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It is known in crypto-currency markets as one with the most relaxed standards for checking the identity of its users to combat money laundering, and for not collaborating with law enforcement.

This helped make BTC-e "a favorite money-laundering location," said James Smith, chief executive of Elliptic, a company that works with law enforcement to track illicit bitcoin transactions. The exchange has been connected to recent ransomware attacks, he said.

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iehi-feed-62672 Thu, 27 Jul 2017 01:19:05 GMT Facebook's rapid sales growth is slowing down http://bankimplode.com/viewnews/2017-07-26_Facebooksrapidsalesgrowthisslowingdown.html Facebook posted revenue of $9.3 billion for the June quarter, up 45% from the same period a year earlier. For any other company, 45% growth would be a phenomenal result, but not Facebook.

The company enjoyed an impressive five consecutive quarters of sales booming 50% or more thanks to its tremendous success making money from ads on mobile devices. That streak ended earlier this year.

Now the question is how much more will it slow down.

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iehi-feed-62670 Thu, 27 Jul 2017 01:12:47 GMT Steve Bannon Pushing For 44 Percent Marginal Tax Rate On The Very Rich http://bankimplode.com/viewnews/2017-07-26_SteveBannonPushingFor44PercentMarginalTaxRateOnTheVeryRich.html ... Steve Bannon is pushing for tax reform to include a new 44 percent top marginal tax rate, hitting people who earn more than $5 million a year, with the revenue paying for tax cuts for the rest, according to three people who've spoken to him recently.

The top rate is now 39.6 percent and most Republicans have been planning to lower it significantly as part of tax reform. The plan Trump put out previously would have only three brackets, with the top one brought down to 35 percent.

... the hike would pull in around $18 billion per year, or $180 billion over 10 years.

This actually quite shrewd (from a purely-political point of view) -- it would have a huge "solidarity effect", while bringing in comparatively little revenue compared to what we need to balance the budget (3% a year at best, roughly).

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iehi-feed-62669 Wed, 26 Jul 2017 22:38:39 GMT Fed, Leaving Rates Unchanged, Expects to Wind Down Stimulus ‘Relatively Soon' http://bankimplode.com/viewnews/2017-07-26_FedLeavingRatesUnchangedExpectstoWindDownStimulusRelativelySoon.html iehi-feed-62668 Wed, 26 Jul 2017 22:16:08 GMT Health care bill: Senate rejects full Obamacare repeal without Replace http://bankimplode.com/viewnews/2017-07-26_HealthcarebillSenaterejectsfullObamacarerepealwithoutReplace.html The Senate rejected a proposal from Republican lawmakers to repeal Obamacare on Wednesday, marking a significant milestone in the Republican Party's years-long political crusade to gut former President Barack Obama's legacy health care law. The vote was 45-55, with seven Republicans opposing the measure.

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The failed effort was a remarkable contrast from less than two years ago, when a Republican-controlled House and Senate passed an identical measure and sent it to Obama. He vetoed the bill. In 2015, the passage of that legislation was largely viewed as a political messaging exercise: GOP lawmakers were keenly aware that Obama would not sign it into law.

But now, with Republican President Donald Trump in the White House and ready to sign a bill, the stakes are real -- as are the realities of voting to repeal the current health care law without a replacement in place. The failure crystalized the new reality for Republicans: more than seven years after the enactment of Obamacare, there is growing recognition within the GOP that a straight repeal of the law is not viable.

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iehi-feed-62667 Wed, 26 Jul 2017 19:35:25 GMT The Value of Everything - Kunstler http://bankimplode.com/viewnews/2017-07-26_TheValueofEverythingKunstler.html iehi-feed-62666 Wed, 26 Jul 2017 18:46:47 GMT US sanctions have taken a big bite out of Russia's economy http://bankimplode.com/viewnews/2017-07-26_USsanctionshavetakenabigbiteoutofRussiaseconomy.html iehi-feed-62665 Wed, 26 Jul 2017 18:45:06 GMT BoAML says there are more 'zombie' companies in Europe now than pre-Lehman times http://bankimplode.com/viewnews/2017-07-26_BoAMLsaystherearemorezombiecompaniesinEuropenowthanpreLehmantime.html iehi-feed-62664 Wed, 26 Jul 2017 15:35:06 GMT Bolivia's President Declares 'Total Independence' from World Bank and IMF http://bankimplode.com/viewnews/2017-07-26_BoliviasPresidentDeclaresTotalIndependencefromWorldBankandIMF.html iehi-feed-62663 Wed, 26 Jul 2017 15:07:26 GMT Take money out of US, says Russell Investments top forecaster http://bankimplode.com/viewnews/2017-07-26_TakemoneyoutofUSsaysRussellInvestmentstopforecaster.html iehi-feed-62662 Wed, 26 Jul 2017 15:02:21 GMT How Big Of A Deleveraging Are We Talking About? http://bankimplode.com/viewnews/2017-07-26_HowBigOfADeleveragingAreWeTalkingAbout.html When credit creation can no longer be sustained the markets will begin to "clear" the excesses. It is only then, and must be allowed to happen, can resources be reallocated back towards more efficient uses. This is why all the efforts of Keynesian policies to stimulate growth in the economy have ultimately failed. Those fiscal and monetary policies, from TARP and QE to tax cuts, only delay the clearing process. Ultimately, that delay only potentially worsens the inevitable clearing process.

That clearing process is going to be very substantial. With the economy currently requiring roughly $3 of debt to create $1 of real, inflation-adjusted, economic growth, a reversion to a structurally manageable level of debt would involve a nearly $35 Trillion reduction of total credit market debt from current levels. 

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iehi-feed-62661 Wed, 26 Jul 2017 14:26:29 GMT Nobody Really Knows What the Fed Does, but They Think It's Bad Anyway http://bankimplode.com/viewnews/2017-07-26_NobodyReallyKnowsWhattheFedDoesbutTheyThinkItsBadAnyway.html