IEHI Feed: The Hedge Fund Implode-o-Meter http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63424 Mon, 18 Dec 2017 15:51:20 GMT US Stock Indexes Keep Climbing on Tax News and Company Deals http://hf-implode.com/viewnews/2017-12-18_USStockIndexesKeepClimbingonTaxNewsandCompanyDeals.html iehi-feed-63423 Mon, 18 Dec 2017 15:45:14 GMT U.S. Homebuilder Sentiment Hits 18-Year High, Beating Forecasts http://hf-implode.com/viewnews/2017-12-18_USHomebuilderSentimentHits18YearHighBeatingForecasts.html iehi-feed-63422 Mon, 18 Dec 2017 15:44:07 GMT Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts http://hf-implode.com/viewnews/2017-12-18_BitcoinClimbsasFuturesDebutFailstoInciteAttackbyShorts.html The arrival of a new futures contract that makes it easier to place short bets on bitcoin wasn't enough to undercut the cryptocurrency's march toward $20,000... Bitcoin touched a record $19,511 just minutes before CME Group Inc. began offering futures Sunday evening in a move that broadens the market for institutional traders and makes it easier to sell the cryptocurrency short.

Still, impediments remain to betting on a dive. The Chicago-based futures exchange, the world's biggest, required a 47 percent initial margin, or almost $50,000, for opening trades on a five-bitcoin future. Settlement terms are spurring some participants to question whether futures will move fully in line with the underlying asset.

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iehi-feed-63421 Mon, 18 Dec 2017 00:05:40 GMT Second bitcoin futures debut could lure volume to wild market http://hf-implode.com/viewnews/2017-12-17_Secondbitcoinfuturesdebutcouldlurevolumetowildmarket.html iehi-feed-63420 Mon, 18 Dec 2017 00:01:13 GMT Homeowners Have Had It Good. Too Good, Says the Tax Bill. http://hf-implode.com/viewnews/2017-12-17_HomeownersHaveHadItGoodTooGoodSaystheTaxBill.html Today, a little under half of American homes are worth enough to justify itemizing mortgage interest and property taxes. Under the tax legislation, that figure would fall to close to 14 percent, according to an analysis of the plan by the online real estate marketplace Zillow.

The Republican plan, in short, is tinkering with subsidies so entrenched in the social fabric that they have become entitlements in all but name.

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All this has made homeowner subsidies, in particular the mortgage interest deduction, one of the rare tax breaks with critics across the political spectrum. Matthew Desmond, a Princeton sociologist who studies how eviction wreaks havoc on the lives on the poor, has documented how the deduction became the "engine of American inequality" because it favors higher-income homeowners.

Edward J. Pinto, co-director of the conservative American Enterprise Institute's Center for Housing Markets and Finance, has described the interest deduction and other homeowner subsidies as a wasteful giveaway that inflates home prices and encourages people to borrow excessively.

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The bill does retain significant subsidies, allowing home buyers to deduct interest on mortgages as high as $750,000 -- accounting for the vast majority -- and up to $10,000 total in property taxes and state and local income taxes. But real estate agents have portrayed the changes as a full-blown attack on their industry.

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iehi-feed-63419 Sun, 17 Dec 2017 19:51:01 GMT Bayview Loan Servicing Body Slammed By Homeowner http://hf-implode.com/viewnews/2017-12-17_BayviewLoanServicingBodySlammedByHomeowner.html iehi-feed-63418 Sun, 17 Dec 2017 03:20:31 GMT Steinhoff's ex-chairman Wiese calls off $2.6 billion Shoprite deal amidst accounting scandal; Wall St. Banks Brace For $1.2bln Losses http://hf-implode.com/viewnews/2017-12-16_SteinhoffsexchairmanWiesecallsoff26billionShopritedealamidstacco.html South African tycoon Christo Wiese on Friday called off plans to sell his stake in grocer Shoprite (SHPJ.J) to Steinhoff's African arm (SRRJ.J), a day after he resigned from Steinhoff's board in the midst of an accounting scandal.

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Banks have sold 98.4 million of the shares they used as security to lend Wiese 1.6 billion euros ($1.89 billion) to fund the purchase of additional shares in Steinhoff in September 2016.

Steinhoff did not name the bank or banks that have exercised their security rights over the stock. Citigroup, Goldman Sachs, HSBC and Nomura provided financing, which was backed by 628 million shares, or 15 percent of the company.

Steinhoff, which moved its primary share listing from Johannesburg to Frankfurt two years ago, has been under investigation for suspected accounting fraud in Germany since 2015. Four current and former managers are under suspicion of having overstated revenues at subsidiaries, prosecutors said.

Here's an FT article on the impact on Wall St. banks (paywall); and another on SA auditors body to probe Deloitte's contribution to Steinhoff scandal as this scandal unfolds.

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iehi-feed-63417 Sat, 16 Dec 2017 20:34:56 GMT Bitcoin Is A Scam Says Jordan Belfort http://hf-implode.com/viewnews/2017-12-16_BitcoinIsAScamSaysJordanBelfort.html iehi-feed-63416 Sat, 16 Dec 2017 16:40:26 GMT Goodbye, Janet Yellen - Here's How We'll Deal with Your Bearish Legacy http://hf-implode.com/viewnews/2017-12-16_GoodbyeJanetYellenHeresHowWellDealwithYourBearishLegacy.html We currently have asset bubbles driven by loose, overly plentiful, and cheap credit in housing, commercial real estate, stocks, bonds, and of course, bitcoin. When one of these starts to deflate, it will start a chain reaction that destabilizes the financial system. I believe that's where we're headed, although it's probably at least a year to 18 months away... I read Yellen's thoughts here as the Fed itself being panicked, but somehow hoping to manage a soft landing by downplaying just how bad the problem is.

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She's doing the right thing by reducing the size of the Fed's balance sheet and taking excess money out of the system. But it will cause the asset bubbles that the Fed created with QE to deflate. The Fed has decided that it is quite willing to have you pay that price.  It is incumbent on you to recognize that and take the appropriate defensive action.''

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iehi-feed-63415 Sat, 16 Dec 2017 14:43:06 GMT Former Mortgage Lender Charged With Bank Fraud And Wire Fraud http://hf-implode.com/viewnews/2017-12-16_FormerMortgageLenderChargedWithBankFraudAndWireFraud.html iehi-feed-63414 Fri, 15 Dec 2017 23:38:55 GMT With Rubio, Corker Back on Board, G.O.P. Speeds Ahead With Tax Overhaul http://hf-implode.com/viewnews/2017-12-15_WithRubioCorkerBackonBoardGOPSpeedsAheadWithTaxOverhaul.html A day after the bill's fate seemed somewhat in doubt, Republican leaders notched two wins on Friday, when Senator Marco Rubio of Florida said he would vote yes after winning a more generous child tax credit in the final bill and Senator Bob Corker of Tennessee, who voted against the initial Senate bill over deficit concerns, said he would support the legislation despite the cost of the tax cuts.

On Friday, as Republicans released details about the final bill, it became clear that the agreement would provide deep and longstanding tax cuts for businesses, while providing slightly more generous tax breaks to low- and middle-income Americans by reducing some benefits for higher earners.

New details from the text show that lawmakers offset last-minute changes to the bill -- such as eliminating the corporate alternative minimum tax and lowering the top individual tax rate to 37 percent from 39.6 percent today -- through slight adjustments, not sweeping changes. It was still unclear how they were going to pay for the entire package, which can add no more than $1.5 trillion to the deficit if it is to pass without Democrat support.

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A spokeswoman for Mr. Rubio said the senator will vote yes on the legislation, given the changes that were made. The final bill will allow families who owe no federal income taxes to still claim up to $1,400 of the $2,000 child tax credit, up from $1,100 in the original version.

The move to satisfy Mr. Rubio appears to have been financed, at least in part, by reducing the ability of higher earners to take the $2,000 per child tax credit. The Senate bill lowers the income cap for families who could claim the credit by phasing out the benefits of the credit once families earn $400,000 a year, down from the $500,000 in the original Senate bill.

The bill's text, which was signed by Republican negotiators from the chambers' conference committee on Friday, includes few major changes from the version that passed the Senate earlier this month. The 2025 expiration date for the individual tax cuts remains, as does the estate tax, which would apply to fewer Americans down the road. At the center of the $1.5 trillion bill are large tax cuts for corporations and other businesses, which Republican lawmakers say will create jobs, investment and economic growth.

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Owners of so-called pass-through businesses, who pay taxes on their profits at the owner's individual tax rate, would receive a slightly less generous tax break than the original bills called for, allowing a 20 percent deduction on profits they earn. That deduction would phase out -- with some exceptions -- starting at $315,000 of income for couples. The Senate bill included a larger deduction, 23 percent, and a higher phase-out point, $500,000 for couples.

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The bill appears to be heading toward the finish line but at least three other Republican senators remained publicly undecided on Friday, including Mike Lee of Utah, who has allied with Mr. Rubio in pressing for an expanded child credit, and Jeff Flake of Arizona, who has been trying to extract commitments from Republican leadership related to the Deferred Action for Childhood Arrivals, or DACA, program. Senator Susan Collins of Maine has also expressed reservations about the bill's reduction in the top individual tax rate and pushed for party leaders to support measures to bolster individual health care markets as a condition for her vote.

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iehi-feed-63413 Fri, 15 Dec 2017 23:32:06 GMT America's Inequality Machine Is Sending the Dow Soaring http://hf-implode.com/viewnews/2017-12-15_AmericasInequalityMachineIsSendingtheDowSoaring.html A rising tide does lift all boats -- but nowadays, in the U.S., not equally. Under both parties, recoveries have become increasingly lopsided. The current one has helped millions of people find work; it's also benefited asset-owners far more than people who trade their labor for a paycheck. Income distribution, already the most unequal in the developed world, is getting worse. And that's starting to influence everything from America's spending habits to its elections.

"The story of our time is polarization -- by party, by class and by income," said Mark Spindel, founder and chief investment officer at Potomac River Capital in Washington, and co-author of a 2017 book about the Federal Reserve. "I don't see anything in the tax bill to make that any better.''

The Fed's post-2008 toolkit included massive purchases of financial assets, which supported a liftoff on the markets but took time to trickle through to the real economy. Trump's tax critics say his plan will have a similar effect, because companies will spend the windfall on share buybacks or dividends, instead of job-creating investments. Plenty of executives say that's exactly what they'll do.

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Buybacks have fueled the stock rally (there's disagreement about how big a part they played). And the rally's biggest benefits go to the richest. On Twitter last week, Trump invited his followers to check their swelling retirement accounts. Only about half the country's households have any such nest-egg.

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Looming in the background [of the late-90s broad-based economic growth] was a technology-stocks bubble. It burst in March 2000, plunging the economy into recession. What happened next is telling -- it illustrates the perverse asymmetry of bubbles. In the following three years, those poorest households saw their incomes fall more than twice as much as their richest counterparts.

The pattern was repeated after the even bigger housing crash of late 2007. Today, even after an increase of more than 9 percent over two years, incomes at the bottom are short of pre-crisis peaks, while higher earners have comfortably surpassed them.

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American workers won't put up with any more business cycles that yield them few gains, [illiam Spriggs, chief economist at the AFL-CIO] says. "This is the last time they can get away with it, because the backlash is going to be huge."

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iehi-feed-63411 Fri, 15 Dec 2017 15:55:32 GMT NYDFS Slaps PHH Mortgage With $119,000 Fine For One Property http://hf-implode.com/viewnews/2017-12-15_NYDFSSlapsPHHMortgageWith119000FineForOneProperty.html iehi-feed-63409 Fri, 15 Dec 2017 15:39:22 GMT Latest GOP tax bill ups benefits for ultra-wealthy for 3rd time http://hf-implode.com/viewnews/2017-12-15_LatestGOPtaxbillupsbenefitsforultrawealthyfor3rdtime.html Just dropping the top individual tax bracket to 37% from the 38.5% originally proposed by the Senate can lead to huge savings for ultra-wealthy Americans... Those earning $10 million a year would save an estimated $361,435 compared to the current tax system. That translates to nearly $140,000 more in savings under the conference committee's version compared to the Senate's version. 

Those earning $1 million would also save more under the conference committee's version. Those earning $300,000 to $500,000 would not see a change between the Senate and conference committee's plans since their incomes do not hit the top bracket.

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Most Americans will see a slight increase in their take-home pay under the current proposals. But all of that may change as many provisions are set to expire. Some analysts have said that nearly half of Americans would see a tax increase if that happens.

Exactly how much taxpayers will save if Republicans succeed in overhauling the US tax code will depend on many factors. And as it stands now, a final bill has still not been revealed.

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iehi-feed-63405 Thu, 14 Dec 2017 21:49:30 GMT Glut of New Manhattan Luxury Apartments Masks Rent Decline http://hf-implode.com/viewnews/2017-12-14_GlutofNewManhattanLuxuryApartmentsMasksRentDecline.html Rent-free months, price cuts, gift cards, gym memberships. Manhattan's apartment landlords have been offering all sorts of enticements month after month, hoping to lure renters to their units amid a surge of new supply.

So why hasn't the median rent declined? Blame all those fancy units in just-built towers with swimming pools and yoga rooms, where rents are so far above the rest of the market that they're keeping the overall rate elevated -- even when the properties lease at a discount.

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iehi-feed-63403 Thu, 14 Dec 2017 19:59:34 GMT Famed Short-Seller Jim Chanos Says Tesla Headed for ‘Brick Wall' http://hf-implode.com/viewnews/2017-12-14_FamedShortSellerJimChanosSaysTeslaHeadedforBrickWall.html Chanos has been public about his short position in Tesla Inc. for more than a year. Last September, when Tesla was merging with SolarCity Corp., he called Elon Musk's automaker a "walking insolvency." He recently reiterated the critique on Bloomberg Television, describing Tesla as "structurally unprofitable" with a "way too leveraged" capital structure. Chanos famously bet early that Enron Corp. would fail and was later proven right.

Chanos warned Wednesday that the spate of executive departures at Tesla this year is reminiscent of Enron before its fall. He predicted Musk will even depart in the coming years for another of his companies, Space Exploration Technologies Corp. Morgan Stanley analyst Adam Jonas said earlier this month he could envision Tesla merging with SpaceX as the rocket company becomes a more time-consuming focus for Musk.

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iehi-feed-63402 Thu, 14 Dec 2017 19:29:15 GMT Bitcoin Is Greener Than Its Critics Think http://hf-implode.com/viewnews/2017-12-14_BitcoinIsGreenerThanItsCriticsThink.html iehi-feed-63401 Thu, 14 Dec 2017 02:44:30 GMT Fed boosts benchmark rate for third time this year http://hf-implode.com/viewnews/2017-12-13_Fedboostsbenchmarkrateforthirdtimethisyear.html The Federal Reserve is raising its benchmark interest rate for the third time this year, signaling its confidence that the U.S. economy remains on solid footing 8½ years after the end of the Great Recession.

The Fed is lifting its short-term rate by a modest quarter-point to a still-low range of 1.25 percent to 1.5 percent. It is also continuing to slowly shrink its bond portfolio. Together, the two steps could lead over time to higher loan rates for consumers and businesses and slightly better returns for savers.

The central bank says it expects the job market and the economy to strengthen further. Partly as a result, it foresees three additional rate hikes in 2018 under the leadership of Jerome Powell, who succeeds Janet Yellen as Fed chair in February.

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Most analysts have said they think the still-strengthening U.S. economy will lead the Fed to raise rates three more times next year. A few, though, have held out the possibility that a Powell-led Fed will feel compelled to step up the pace of rate hikes as inflation finally picks up and the economy, perhaps sped by the Republican tax cuts, begins accelerating.

For what it's worth (since the Fed funds rate has almost no meaning in the post-2008 regime, and all...). And on a related noteYellen Isn't Buying Trump's Tax Cut Talk of an Economic Miracle ...

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iehi-feed-63400 Thu, 14 Dec 2017 01:47:02 GMT Here Come the Bogus Bitcoin Scare Tactics http://hf-implode.com/viewnews/2017-12-13_HereCometheBogusBitcoinScareTactics.html iehi-feed-63398 Wed, 13 Dec 2017 23:31:21 GMT ‘Buy the Dip' Has Never Been More Popular in U.S. Stocks http://hf-implode.com/viewnews/2017-12-13_BuytheDipHasNeverBeenMorePopularinUSStocks.html "Investors no longer fear shocks but love them," a team led by global equity derivatives researcher Nitin Saksena wrote in a note Tuesday. "Since 2013, central banks have stepped in (or communicated that they may step in) to protect markets, leaving investors confident enough to ‘buy-the-dip.'"

Intraday realized volatility for the S&P 500 Index relative to the realized volatility in the open-close ratio for the benchmark gauge has soared to record highs this year, emblematic of an environment in which buying the dip has become gospel for traders, according to the bank's analysis of price action going back to 2003. This ratio is also above the 90th percentile for the Euro Stoxx 50 Index and Nikkei 225.

But as is obvious to All Thinking People(tm), only the Bitcoin market is "a bubble".

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