IEHI Feed: The Bank Implode-o-Meter http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-59678 Sun, 01 May 2016 22:07:32 GMT Gold And Silver: Bull Markets Are Just Beginning http://bankimplode.com/viewnews/2016-05-01_GoldAndSilverBullMarketsAreJustBeginning.html iehi-feed-59677 Sun, 01 May 2016 18:43:23 GMT China's debt reckoning cannot be deferred indefinitely - Magnus http://bankimplode.com/viewnews/2016-05-01_ChinasdebtreckoningcannotbedeferredindefinitelyMagnus.html iehi-feed-59676 Sun, 01 May 2016 18:24:39 GMT The Cult Of Central Banking Is Dead In The Water | Stockman http://bankimplode.com/viewnews/2016-05-01_TheCultOfCentralBankingIsDeadInTheWaterStockman.html The Fed has been sitting on the funds rate like some monetary mother hen since December 2008. Once it punts again at the June meeting owing to Brexit worries it will have effectively pegged money market rates at the zero bound for 90 straight months.

There has never been a time in financial history when anything close to this happened, including the 1930s. Nor was interest-free money for eight years running ever even imagined in the entire history of monetary thought.

So where's the fire? What monumental emergency justifies this resort to radical monetary intrusion and repression? Alas, there is none. And that's as in nichts, nada, nope, nothing!

There is a structural growth problem, of course. But it has absolutely nothing to do with monetary policy; and it can't be fixed with cheap money and more debt, anyway.

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The following two graphs dramatize the cargo cult essence of today's Keynesian central banking regime. Since the year 2000 when monetary repression began in earnest, the balance sheet of the Fed has risen by 800%, while the amount of labor hours used in the US economy has increased by 2%.

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iehi-feed-59675 Sun, 01 May 2016 18:19:48 GMT The Real Story Behind The True Magnitude of The New Home Sales Collapse http://bankimplode.com/viewnews/2016-05-01_TheRealStoryBehindTheTrueMagnitudeofTheNewHomeSalesCollapse.html iehi-feed-59674 Sun, 01 May 2016 18:14:58 GMT UK housing crisis: four in 10 renters fear they will never own a home http://bankimplode.com/viewnews/2016-05-01_UKhousingcrisisfourin10rentersfeartheywillneverownahome.html David Cameron's pledge to build a property-owning democracy is called into serious question by a landmark survey revealing that almost four in 10 of those who do not own a home believe they will never be able to do so.

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The findings cast doubt on the prime minister's claim before last year's general election that Tory housing policies would transform "generation rent" into "generation buy". In April last year, as he launched plans to force local authorities to sell valuable properties to fund new "affordable homes", Cameron said: "The dream of a property-owning democracy is alive and well and we will help you fulfil it."

The poll -- which found that 58% of people want more, not less, social housing as a way to ease the crisis -- comes as the government's highly controversial housing and planning bill returns to the Commons on Tuesday.

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iehi-feed-59672 Sun, 01 May 2016 14:11:52 GMT Inside the rocky billionaire bromance of Donald Trump and Carl Icahn http://bankimplode.com/viewnews/2016-05-01_InsidetherockybillionairebromanceofDonaldTrumpandCarlIcahn.html For Trump, who has taken pride in punching back hard at his attackers, his rapport with Icahn shows a side of the brash real estate tycoon that Americans rarely see: a willingness to show deference to someone who once insulted his business and who has, by many measures, been more successful.

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"Carl is a master strategist and easily one of the brightest people I've ever had the pleasure of working for," said Edward Weisfelner, head of the corporate restructuring practice at the law firm Brown Rudnick, who represented bondholders and Icahn in two of the casino bankruptcies. "I couldn't say the same about Donald."

Trump, in the interview, said he never lost leverage in the Atlantic City deal. Because so many bankers and bondholders were owed so much -- and because many agreed that an open Trump casino would make more money than a shuttered one -- Trump said people such as Icahn needed him to agree to a deal just as much as he needed them.

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The episode with the Taj and Trump's other loans left a mark on his grandeur. To shrink his massive bank debts, Trump agreed to relinquish his plane and other luxuries, and bankers forced Trump to limit his personal and household spending to $450,000 a month.

Icahn transformed the casino's downfall into handsome gains. In 1993, according to the Wall Street Journal, he sold his Taj bonds for $150 million -- more than double what he had paid for them three years earlier.

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By 2009, debt continued to plague Trump Entertainment Resorts, which controlled the Taj and two other casinos.

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As the company entered bankruptcy restructuring yet again, investors offered competing plans. Trump sided with a hedge fund that pledged to give him a 10 percent stake if he let the company continue to use his name.

Icahn, who had sold off his Taj shares years earlier, saw a new opportunity to profit off the Trump company's struggles -- this time on the opposite side of Trump. Icahn backed a Texas billionaire who was mobilizing a full takeover and whose lawyers argued that the Trump name had been tarnished by repeated bankruptcies.

In 2010, Trump took the stand in a Camden, N.J., courtroom and swatted back, saying, "Mr. Icahn has led companies into many, many bankruptcies" and reasserting that he still had one of America's most valuable brands. "I wouldn't switch my assets for his assets any day of the week," Trump said.

Icahn was unconvinced. "I like Donald personally, but frankly I'm a little curious about the big deal about the name," he told the Wall Street Journal. "If the name is so powerful, then how come they went bankrupt three times?"

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In 2014, the casino group slid again into bankruptcy, sparking more maneuvers that dragged on until this past February, when Icahn gained full control.

The takeover took place as Trump began cruising to victories in Republican primaries. And Icahn, it seemed, had changed his view on the Trump brand -- signing an agreement that said he could still use the mogul's name.

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The best solution for this financial mess, Icahn said, would be to bring in "a guy like Donald Trump . . . [who's] not beholden to an establishment." "I disagree with him on certain issues and certainly would talk to him more," Icahn added. "But this is what this country needs. Somebody to wake it up."

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iehi-feed-59671 Sun, 01 May 2016 13:50:58 GMT Puerto Rico debt rescue plan engulfed in Great Recession ‘bailout' politics http://bankimplode.com/viewnews/2016-05-01_PuertoRicodebtrescueplanengulfedinGreatRecessionbailoutpolitics.html A group called the Center for Individual Freedom has spent millions of dollars on ads calling the Puerto Rico bill a "bailout," targeting specific congressional districts, including Bishop's. Jeff Mazzella, CFIF's president, did not reply to email or phone calls Friday. The group does not disclose its donors, but there is a widespread belief on Capitol Hill that the group is acting at the behest of those bondholders opposed to a court or board-imposed restructuring.

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Supporters of a congressional rescue plan got a boost on Tuesday, when Pimco, which manages $40 billion of municipal bonds, supported the current House bill.

"It would be incorrect to classify [the bill] as a ‘bailout,'" said a blog posting on the Pimco website. "No incremental federal tax dollars are allocated to the Territory under the bill. In fact, if this legislation does not advance, the probability of future federal tax dollars flowing to the Territory or bondholders may actually increase."

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iehi-feed-59668 Sat, 30 Apr 2016 02:06:25 GMT The Deutsche Bank Settlement is Meaningless http://bankimplode.com/viewnews/2016-04-29_TheDeutscheBankSettlementisMeaningless.html iehi-feed-59667 Fri, 29 Apr 2016 23:41:51 GMT Did Shanghai just blow a hole in the old gold market? http://bankimplode.com/viewnews/2016-04-29_DidShanghaijustblowaholeintheoldgoldmarket.html ... the few percentage point drop in the dollar against the yen over the past week is really not enough to justify a nearly $60 rise in the price of gold over the past five trading sessions.  The bigger determinant has been China's underpinning of the gold price on two different occasions over the past week after it had taken a major turn to the downside in New York trading... the two reversals of New York pricing -- occurring over the course of the past week -- sent a message loud and clear to traders around the world: China was going to be a presence in the gold market and a formidable one.

... Do you remember reports a few weeks back, reported here, about a secret G20 accord to organize a de facto dollar devaluation? More and more, it is beginning to look like such an accord may have been agreed. If so, it would explain the Fed's mysterious dovishness of the past several weeks. It also serves as an additional impetus to gold demand among investors of all descriptions -- private, public and institutional... Coupled with Shanghai's aggressive acquisition strategy, we do think that we may have entered a new era for the gold and silver markets.

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iehi-feed-59666 Fri, 29 Apr 2016 20:33:49 GMT Europe "Growing", Barely... http://bankimplode.com/viewnews/2016-04-29_EuropeGrowingBarely.html On Friday, the European Union released data showing that the overall economy of the 19 countries that use the euro advanced 0.6 percent over the first three months of the year, compared with the previous quarter.

That gain, equivalent to an annual rate of 2.2 percent, brought the eurozone's gross domestic product for the period -- the total value of goods and services produced -- to slightly above the previous peak reached in the early months of 2008, before the crisis emerged and Europe's core economy descended into a pair of crippling recessions.

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Yet as milestones go, Europe's return to precrisis levels of economic activity came with so many qualifiers that any celebration seemed premature, at best, and at worst like a mockery for the tens of millions of ordinary Europeans who have far from recovered. New unemployment data on Friday showed that the eurozone jobless rate, while edging down slightly, remained above 10 percent -- more than twice the level in the United States.

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But clouding the eurozone growth data was another new figure on Friday, indicating that consumer prices in the currency union were down 0.2 percent in April. Low inflation, or even periodic falling prices in the eurozone, has been a persistent problem, a sign of economic stagnation that continues to resist efforts by the European Central Bank to raise inflation, spending and borrowing to healthier levels.

Many economists now discuss Europe's prospects with the grim vernacular long used to describe Japan. There, a real estate bubble in the 1980s gave way to a calamitous bust that left banks reeling. Decades of half-measures aimed at finessing the economy to better days kept the ship of state afloat but left it in the doldrums.

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iehi-feed-59665 Fri, 29 Apr 2016 20:16:59 GMT Atlantic City teeters on the brink of default http://bankimplode.com/viewnews/2016-04-29_AtlanticCityteetersonthebrinkofdefault.html Atlantic City, the once-celebrated gambling mecca on the Jersey Shore, is dangerously close to defaulting on its next bond payment. The $1.8 million bond payment is due May 1, which is a Sunday, which means the city won't have to pay until Monday, May 2. That's the same day that the city starts to receive its next tax payments. But that revenue won't necessarily be enough to pay for both the bond payment and city services, according to Chris Filiciello, spokesman for Atlantic City Mayor Don Guardian. He said the mayor still has to decide which payment he'll make first.

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Gov. Chris Christie and the mayor are locked in a nasty feud over city finances that degenerated into a lawsuit and a war of words. Earlier this month, the state sued the city to force it to pay its teachers before other city workers, because they didn't have enough money to pay everybody.

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iehi-feed-59663 Fri, 29 Apr 2016 19:15:56 GMT Puerto Rico's Governor Says the Island Will Default on Monday http://bankimplode.com/viewnews/2016-04-29_PuertoRicosGovernorSaystheIslandWillDefaultonMonday.html iehi-feed-59662 Fri, 29 Apr 2016 13:24:58 GMT Puerto Rico Risks Historic Default as Congress Chooses Inaction http://bankimplode.com/viewnews/2016-04-29_PuertoRicoRisksHistoricDefaultasCongressChoosesInaction.html Nearly 10 months after Governor Alejandro Garcia Padilla said the commonwealth was unable to repay all its obligations, Puerto Rico has failed to reach an accord on a broad restructuring deal presented to bondholders. During that time the administration has delayed payments to suppliers, postponed tax refunds, grabbed revenue originally used to repay other bonds and missed payments on smaller agency debt. With its options drying up, no bondholder agreement in sight and Congressional action delayed, defaulting may be the next step for Puerto Rico.

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The island's Government Development Bank, which lent to the commonwealth and its municipalities, is in talks with creditors to avoid defaulting on the $422 million that's due May 1. The commonwealth may use a new debt moratorium law if it cannot defer that GDB payment, Jesus Manuel Ortiz, a spokesman for Garcia Padilla, said Wednesday during a press conference in San Juan.

While a GDB default would be the largest yet by Puerto Rico, a missed payment on its general obligations would signal to investors that the commonwealth is finally executing on its warnings that it cannot pay its debts. Puerto Rico and its agencies owe $2 billion on July 1, including a $805 million payment on its general-obligation bonds, which are guaranteed under the island's constitution to be paid before anything else.

A general-obligation default would be the first by a state-level borrower since Arkansas missed payments on its bonds in 1933. That would likely trigger a restructuring of the commonwealth's $13 billion of general obligations, which would be the largest-ever in the tax-exempt bond market.

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iehi-feed-59660 Fri, 29 Apr 2016 03:30:16 GMT Volume Collapses As China Commodity Exchanges Ordered To "Curb Speculation" http://bankimplode.com/viewnews/2016-04-28_VolumeCollapsesAsChinaCommodityExchangesOrderedToCurbSpeculation.html iehi-feed-59658 Thu, 28 Apr 2016 20:06:01 GMT Russia to Price Its Own Oil, Ditch Dollars http://bankimplode.com/viewnews/2016-04-28_RussiatoPriceItsOwnOilDitchDollars.html iehi-feed-59657 Thu, 28 Apr 2016 19:56:52 GMT Loeb's Third Point Says Hedge Funds in 'Catastrophic' Period http://bankimplode.com/viewnews/2016-04-28_LoebsThirdPointSaysHedgeFundsinCatastrophicPeriod.html Third Point, founded by Dan Loeb, said hedge funds are in the first stage of a "washout" after "catastrophic" performance this year. The $2.9 trillion hedge fund industry had the worst start to a year in returns and outflows in at least seven years. Alan Howard's Brevan Howard Asset Management and Paul Tudor Jones' Tudor Investment Corp. are among the firms that clients are pulling billions of dollars from, while managers including Bill Ackman and John Paulson have posted steep losses.

Hedge funds lost 1.9 percent in the first quarter, according to Hedge Fund Research's global index, the poorest performance since 2008. The industry had net outflows of $16.6 billion in the last two quarters, the most since 2009, according to HFR. In 2015, 979 funds closed, more than any year since 2009, according to the research firm.

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"Further exacerbating the carnage was a huge asset rotation into market neutral strategies in late the fourth quarter," Third Point said. "Unfortunately, many managers lost sight of the fact that low net does not mean low risk and so, when positioning reversed, market neutral became a hedge fund killing field."

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iehi-feed-59656 Thu, 28 Apr 2016 19:28:07 GMT Why the Vampire Squid Wants Small Depositors' Money in 1 Frightening Chart http://bankimplode.com/viewnews/2016-04-28_WhytheVampireSquidWantsSmallDepositorsMoneyin1FrighteningChart.html iehi-feed-59654 Thu, 28 Apr 2016 15:12:57 GMT Japan consumer prices fall at fastest in 3 years before BOJ meeting http://bankimplode.com/viewnews/2016-04-28_Japanconsumerpricesfallatfastestin3yearsbeforeBOJmeeting.html iehi-feed-59653 Thu, 28 Apr 2016 15:10:20 GMT The European Union always was a CIA project, as Brexiteers discover http://bankimplode.com/viewnews/2016-04-28_TheEuropeanUnionalwayswasaCIAprojectasBrexiteersdiscover.html Brexiteers should have been prepared for the shattering intervention of the US.  The European Union always was an American project... Nor are many aware of declassified documents from the State Department archives showing that US intelligence funded the European movement secretly for decades, and worked aggressively behind the scenes to push Britain into the project.

As this newspaper first reported when the treasure became available, one memorandum dated July 26, 1950, reveals a campaign to promote a full-fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the Central Inteligence Agency.

The key CIA front was the American Committee for a United Europe (ACUE), chaired by Donovan. Another document shows that it provided 53.5 per cent of the European movement's funds in 1958. The board included Walter Bedell Smith and Allen Dulles, CIA directors in the Fifties, and a caste of ex-OSS officials who moved in and out of the CIA.

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iehi-feed-59652 Thu, 28 Apr 2016 15:07:43 GMT America's earnings recession just got worse http://bankimplode.com/viewnews/2016-04-28_Americasearningsrecessionjustgotworse.html Overall, S&P 500 earnings so far this quarter are down 8%. That marks the third quarterly decline in a row and the worst since 2009, according to S&P Global Market Intelligence. Weak global growth is closing consumers' wallets, while the strong dollar is only making iPhones and other American goods more expensive for foreign buyers. Add on still-low oil prices and Corporate America is facing major headwinds.

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With disappointing earnings like these, it's no wonder investors are worried about stocks getting too pricey. One key measure for value -- the price-to-earnings ratio -- shows stocks are at their most expensive point since 2009. The S&P 500 is trading at about 17.8 times its forward earnings, compared with 15.2 in mid-February.

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