IEHI Feed: The Bank Implode-o-Meter http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-59910 Mon, 30 May 2016 02:54:19 GMT Silver Photovoltaic Needs Through 2020 Will Drive Shortage And Price Shock http://bankimplode.com/viewnews/2016-05-29_SilverPhotovoltaicNeedsThrough2020WillDriveShortageAndPriceShock.html After 2020, increasing silver demand will mean increasing rationing of the metal, which can only be done by via extraordinarily high prices. Of the world's major countries, only China seems to get the message and to be preparing for this eventuality, with China's recent silver imports soaring to five-year highs. Meanwhile, U.S. imports have stagnated.

Barring a miracle, silver prices are going to the moon, leaving the U.S. in a very difficult position. It would not surprise us one bit if silver is confiscated much like gold was during the Depression. This means, as was the case with gold, the best investments are likely to be silver producers. Over the next decade almost all credible silver producers could see their prices multiply by anywhere from 10- to 100-fold.

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iehi-feed-59909 Mon, 30 May 2016 02:43:54 GMT Bitcoin Skyrockets And Is Now Up More Than 100% This Jubilee Year http://bankimplode.com/viewnews/2016-05-29_BitcoinSkyrocketsAndIsNowUpMoreThan100ThisJubileeYear.html In [the past year], it has been pronounced dead at least once and is now at a 20-month high. We gave these three main reasons in the last year for why we thought it would go much higher. Still to this day most other financial analysts either ignore bitcoin or, even stupider, deride it as being some sort of scam or ponzi scheme.

The dollar and government "services" like Social Security are scams and ponzi schemes... but bitcoin clearly is not.  It is open source and so anyone who cares to look can see there is nothing nefarious about it.  Therefore, anyone who says it is a scam or ponzi scheme is just showing willful ignorance as they could very easily look at it themselves and see it is not.

Bitcoin was just declared "dead" again last week when Coinbase announced Ethereum support. Big whoop. We're not slamming Etherum (it is by all accounts great tech with wonderful potential) -- but that news was good for about a $20 "collapse"... on the 28th alone, bitcoin surged about $50. It is far from down for the count and may still be in the early innings.

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iehi-feed-59907 Sun, 29 May 2016 19:02:55 GMT Last Time this Happened, the Housing Market Collapsed http://bankimplode.com/viewnews/2016-05-29_LastTimethisHappenedtheHousingMarketCollapsed.html According to the Times: "Many say the sudden surge in hyperprice homes -- often built and sold by speculative investors -- is the ultimate bubble signal." And when was the last time this sort of pile-up happened? In 2007 and 2008, just as the housing market was beginning to spiral down and as the Financial Crisis was beginning to mature. So now, the same signs are popping up once again.

While overall home prices were still soaring in the first quarter, at the top 5% of the housing market, the bubble has begun to deflate, with prices down 1.1%, according to Redfin. In some cities, the very top end is starting to take some hits, including in Manhattan where a luxury condo boom has turned into a glut, and where prices have begun to sag.

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iehi-feed-59906 Sun, 29 May 2016 18:06:53 GMT Obama Admin's Trade Deals Going Nowhere Fast http://bankimplode.com/viewnews/2016-05-29_ObamaAdminsTradeDealsGoingNowhereFast.html iehi-feed-59905 Sun, 29 May 2016 15:39:42 GMT Japan's Abe to delay sales tax hike until 2019: government source http://bankimplode.com/viewnews/2016-05-29_JapansAbetodelaysalestaxhikeuntil2019governmentsource.html iehi-feed-59903 Sun, 29 May 2016 13:51:27 GMT "Miracle" in Athens as Greek tourism numbers keep growing http://bankimplode.com/viewnews/2016-05-29_MiracleinAthensasGreektourismnumberskeepgrowing.html "It's a miracle, what's been happening in Athens," Greece's tourism chief, Andreas Andreadis, told the Observer. "The tourist industry in Greece grew two to three times faster than in Spain, Portugal, Italy or France last year. This year we expect around 4.5 million visitors in Athens alone."

For an economy stuck in depression-era recession, dependent on emergency bails and seemingly locked in a perpetual fiscal vice, tourism is vital. A record 23.5 million holidaymakers visited Greece in 2015 -- generating €14.2bn in direct receipts, or 24% of gross domestic product. In 2010, at the start of the country's debt crisis -- which has seen it struggle to avert default and remain in the euro -- revenues from tourism were €10bn, or 15% of GDP.

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Much of the upsurge is linked to Greece's safety record. Tourists are staying away from resort in Egypt, Tunisia, Turkey and elsewhere in the wake of high-profile attacks. Countries whose economies are also dependent on holidaymakers have suffered incalculable damage following a severe drop in arrivals. Travel advice from governments and fears of fresh violence are simply keeping tourists away.

... it could not come at a better time: tourism provides one in five jobs in Greece, at a time when unemployment in the effectively bankrupt nation has hovered stubbornly around 25%. Youth unemployment stands at an astonishing 67%.''

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iehi-feed-59902 Sun, 29 May 2016 13:45:14 GMT Iceland Puts Freeze on Foreign Investors http://bankimplode.com/viewnews/2016-05-29_IcelandPutsFreezeonForeignInvestors.html A law passed May 22 by Iceland's parliament offers the foreign holders of about $2.3 billion worth of krona-denominated government bonds a Hobson's choice: Sell out in June at a below-market exchange rate, or have the money they receive when their bonds mature impounded indefinitely in low-interest bank accounts...

A growing number of fund managers are now buying Icelandic government bonds, including those that were marooned on the island when it applied capital controls. The country is now one of the few offering a combination of high interest rates and strong economic growth prospects.

Eaton Vance and another holder of the legacy debt, also called "offshore" debt, hedge fund Autonomy Capital LP, have been courting the government for months to allow them to keep their cash on the island, even offering to swap their holdings into long-term bonds that they would pledge to hold on to.

But the country isn't interested. Instead, officials behind the law say they aim to keep the $16.7 billion economy of the island with a population of 327,386 from being swamped anew by the ebb and flow of offshore funds.

"We don't need the money," said Mar Gudmundsson, governor of Iceland's central bank. "These are remnants from the last boom and bust, and we are not going to repeat that mistake."

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Some investors consider the terms to be coercive and tantamount to default. But Kristin Lindow, a sovereign bond ratings analyst at Moody's Investors Service, calls the offer purely voluntary and says most bonds will mature years from now, when capital controls will likely be long gone.

... The economy is thriving again, thanks largely to a tourism boom. But the populace wants the controls fully lifted. "Capital controls should have been lifted a long time ago," said Arnar Sigurdsson, an importer of French wines in Reykjavik who invests his personal wealth in bonds and currencies.

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iehi-feed-59901 Sun, 29 May 2016 13:16:33 GMT Billionaire Gross: Jubilee Debt Relief as Prelude to New Global Economic Order http://bankimplode.com/viewnews/2016-05-29_BillionaireGrossJubileeDebtReliefasPreludetoNewGlobalEconomicOrd.html iehi-feed-59898 Sat, 28 May 2016 14:18:15 GMT Russian President Vladimir Putin Aims to Renew Ties During Visit to Greece http://bankimplode.com/viewnews/2016-05-28_RussianPresidentVladimirPutinAimstoRenewTiesDuringVisittoGreece.html Talks focused on trade and investment, in particular in energy and transport, and the Russian president openly expressed his country's interest in taking part in the potential privatization of Greek rail assets and the port of Thessaloniki, a major gateway into the Balkans.

Greece and Russia have flirted with the idea of Athens participating in a pipeline project that would bring Russian gas into Europe via Greece, though little progress was immediately expected.

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Greece has kept close relations with Moscow even after the EU imposed economic sanctions in the summer of 2014 in response to Russia's annexation of Ukraine's Crimea region and its support for separatists in eastern Ukraine. Russia has denied Western charges that it supplied and directed the rebels.

"Greece has repeatedly said that the vicious circle of sanctions is not productive," the Greek Prime Minister said, but added Greece will stick to the commitments it has as a member of the European Union.

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iehi-feed-59897 Sat, 28 May 2016 14:13:46 GMT The Shift to a Cashless Society is Snowballing http://bankimplode.com/viewnews/2016-05-28_TheShifttoaCashlessSocietyisSnowballing.html iehi-feed-59896 Sat, 28 May 2016 13:59:48 GMT The Next Systemic Lehman Event http://bankimplode.com/viewnews/2016-05-28_TheNextSystemicLehmanEvent.html iehi-feed-59895 Sat, 28 May 2016 00:30:46 GMT The Great Race: USA, Germany, Japan All Have Negative Real 10 Year Sovereign Yields http://bankimplode.com/viewnews/2016-05-27_TheGreatRaceUSAGermanyJapanAllHaveNegativeReal10YearSovereignYie.html iehi-feed-59894 Fri, 27 May 2016 15:40:36 GMT Essence of BofA "Hustle" Ruling: Sign A Contract And LATER Decide To Commit Fraud, and It's Not Fraud http://bankimplode.com/viewnews/2016-05-27_EssenceofBofAHustleRulingSignAContractAndLATERDecideToCommitFrau.html The judges based their ruling on the contracts that Countrywide had reached with Fannie and Freddie, pledging to provide those government-sponsored firms with "investment quality" mortgages. There was no evidence, the appellate judges found, that the executives who signed those contracts intended at the time to stuff the pipeline with toxic junk. It just turned out that way. Because there was no intent to defraud when the contracts were signed, the judges ruled, this whole affair is merely a case of breach of contract, not fraud...

There are a few problems with this analysis. One was pointed out presciently by Judge Rakoff. In a 2013 ruling in the case, he observed that under the federal mail fraud statute, that limitation [of fraud needing to occur at the moment of contract signing] doesn't apply. In any event, the bank's misrepresentations were continuous and ongoing: every time it sold Fannie or Freddie a substandard loan, it was arguably lying... Judge Rakoff anticipated and rejected [the Appeals Court's] argument, and even pointed out that Congress closed the loophole by amending the mail fraud statute -- in 1909. It's also likely that the government will appeal the latest ruling to the full 2nd circuit court, and thence, if necessary, to the Supreme Court.

Yes, this will likely get reversed again. The ruling simply seems to be in error, aside from leading to nonsensical conclusions (i.e., that anyone can now defraud the government with abandon as long as they don't show any evidence of intent to defraud at the time they sign a contract or make covenants).

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iehi-feed-59893 Fri, 27 May 2016 14:40:20 GMT Japan "Already Doing Helicopter Money"; "Yen At Great Risk": Noguchi http://bankimplode.com/viewnews/2016-05-27_JapanAlreadyDoingHelicopterMoneyYenAtGreatRiskNoguchi.html iehi-feed-59892 Fri, 27 May 2016 14:32:05 GMT Gross Moving To Short Credit Stance http://bankimplode.com/viewnews/2016-05-27_GrossMovingToShortCreditStance.html iehi-feed-59891 Fri, 27 May 2016 14:30:26 GMT Duncan: China's Boom Ended in 2015; Protracted Slump Ahead (Video) http://bankimplode.com/viewnews/2016-05-27_DuncanChinasBoomEndedin2015ProtractedSlumpAheadVideo.html iehi-feed-59889 Fri, 27 May 2016 14:17:18 GMT Wells Fargo Reintroduces 3%-Down Mortgages http://bankimplode.com/viewnews/2016-05-27_WellsFargoReintroduces3DownMortgages.html After being called out for its deceptive practices, the bank has scaled back on FHA backed mortgage lending in recent years. Wells Fargo accounted for just 2.5% of total FHA mortgages in 2015, down from 13% in 2010, and ultimately coming to this end game where the bank has a path forward without the FHA... Wells' own mortgage origination pipeline has been slowing down in recent years, and as such the corner office of the country's largest mortgage originator is desperate to find new and innovative ways to boost lending.

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The new program partners with Fannie Mae in order to allow borrowers with credit scores as low as 620 to make as little as a 3% down payment and use income from family members or renters to qualify. Naturally, the intent is to make more loans to low and middle-income borrowers - in the process pushing up home prices countrywide - without going through the FHA.

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iehi-feed-59887 Thu, 26 May 2016 16:55:52 GMT HUD: For many poor families, housing costs are ‘out of reach' http://bankimplode.com/viewnews/2016-05-26_HUDFormanypoorfamilieshousingcostsareoutofreach.html The affordable housing situation is bleak. So bleak that "in no state, metropolitan area, or county can a full-time worker earning the prevailing minimum wage afford a modest two-bedroom apartment," according to the report.

To afford a two-bedroom apartment at the current federal minimum wage of $7.25 an hour, a worker would need to work 112 hours a week, every week, according to the report. That means workers "would have no remaining time during the week for anything other than working and sleeping."

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NLIHC proposes a formula reducing the mortgage interest tax deduction that benefits homeowners. For years, there have been various proposals to change the popular deduction. Whatever reform that might eventually be approved, the coalition wants a portion of the savings to go to affordable housing.

The main benefit of eliminating the mortgage interest tax deduction would actually be to allow home prices to fall to more affordable levels. Of course cutting a sacred "middle class" benefit (even if done so gradually that there'd be no nominal decline in home prices) is politically impossible.

Alternatively, they could make all consumer debt interest (i.e. credit card) tax-deductible. That would be fair.

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iehi-feed-59886 Thu, 26 May 2016 16:41:10 GMT Wall Street Crime: 7 Years, 156 Cases and Few Convictions http://bankimplode.com/viewnews/2016-05-26_WallStreetCrime7Years156CasesandFewConvictions.html The Wall Street Journal examined 156 criminal and civil cases brought by the Justice Department, Securities and Exchange Commission and Commodity Futures Trading Commission against 10 of the largest Wall Street banks since 2009. In 81% of those cases, individual employees were neither identified nor charged. A total of 47 bank employees were charged in relation to the cases. One was a boardroom-level executive, the Journal's analysis found.

The analysis shows not only the rarity of proceedings brought against individual bank employees, but also the difficulty authorities have had winning cases they do bring.

Most of the bankers who were charged pleaded guilty to criminal counts or agreed to settle a civil case, with those facing civil charges paying a median penalty of $61,000. Of the 11 people who went to trial or a hearing and had a ruling on their case, six were found not liable or had the case dismissed. That left a total of five bank employees at any level against whom the government won a contested case. They include Mr. Heinz, the former UBS employee.

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There are plenty of possible explanations for the small number of successful cases. For starters, much of the institutional conduct during and after the financial crisis didn't break the law, said law-enforcement officials. Even when the government has been able to prove illegal activity, it has rarely been traced to the upper echelons of big banks.

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The Journal's analysis found that about half of the 47 bank employees charged since 2009 held junior or midlevel jobs--vice presidents, financial advisers, private bankers and managing directors. Most had quit or been fired before the bank was charged, sometimes years earlier.

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In 2012, a New York jury convicted Mr. Heinz, now 43 years old, and two colleagues of rigging a bidding process in which banks competed for contracts to invest proceeds from bonds issued by towns and cities. Prosecutors said the three men steered financial contracts to their friends in exchange for kickbacks and other favors, resulting in cities and towns paying millions more for the deals than they needed to. Mr. Heinz, a vice president on UBS's municipal-bond reinvestment desk, was sentenced to 27 months in prison and ordered to pay a $400,000 fine.

His lawyer, Marc Mukasey of Greenberg Traurig LLP, said the government "tends to go after the low-hanging fruit, and they bully a lot of people into settlements or into testifying in a way that helps their case." He said Mr. Heinz had been doing his job in good faith, when the government "decided to criminalize something that had previously never been criminalized."

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iehi-feed-59885 Thu, 26 May 2016 14:55:28 GMT Bigger Than All The World's QE's Combined http://bankimplode.com/viewnews/2016-05-26_BiggerThanAllTheWorldsQEsCombined.html