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-63322 Wed, 22 Nov 2017 21:07:58 GMT Gallup: Americans' Non-Concern With Economy Reaches Typical Pre-Crash/Recession Lows http://hf-implode.com/viewnews/2017-11-22_GallupAmericansNonConcernWithEconomyReachesTypicalPreCrashRecess.html iehi-feed-63320 Wed, 22 Nov 2017 19:52:17 GMT Fed Signals December Hike Even as Debate on Prices Persists http://hf-implode.com/viewnews/2017-11-22_FedSignalsDecemberHikeEvenasDebateonPricesPersists.html "Many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term if incoming information left the medium-term outlook broadly unchanged," according to minutes from their Oct. 31-Nov. 1 gathering, released in Washington on Wednesday.

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Stocks stayed lower, the dollar declined and yields on two-year Treasury notes dipped after the minutes were released. With a December Fed rate hike almost fully priced in, market-implied odds of another rate increase by March held around 55 percent, based on trading in federal funds futures.

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Even as inflation baffles policy makers, they are on the lookout for asset bubbles after a long period of low interest rates. Several participants "expressed concerns about a potential buildup of financial imbalances," adding that a sharp reversal in asset prices could hurt the economy, according to the minutes.

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iehi-feed-63317 Tue, 21 Nov 2017 16:54:03 GMT China's $15 Trillion Problem: Investors Don't Believe in Losses http://hf-implode.com/viewnews/2017-11-21_Chinas15TrillionProblemInvestorsDontBelieveinLosses.html When China unveiled plans on Friday to end the implicit guarantees underpinning asset-management products worth trillions of dollars, it should have been a bombshell for the nation's savers.

But for Yolanda Yuan and other individual investors who've piled into AMPs issued by banks, insurers and securities firms, the government's announcement was largely a non-event. The reason: they didn't believe it.

"I don't think any big banks will dare to take the risk of allowing defaults on AMPs, as that will lead to a flood of fund redemptions," said Yuan, a 29-year-old sales manager at a state-run financial company in Shanghai. She has about 100,000 yuan ($15,069) of personal savings in products covered by the new regulations.

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It may ultimately require an AMP blowup for Chinese regulators to convince investors that they're serious about the new rules, which are set to take effect in mid-2019. But a major product failure is risky: In a worst-case scenario, it could spark a destabilizing stampede out of AMPs, which have become a key source of funding for banks and other financial institutions. It's not clear that's a chance Beijing is willing to take, despite last week's rhetoric.

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iehi-feed-63313 Mon, 20 Nov 2017 17:16:24 GMT Its Time To Say Sayonara To Federally Funded CRA Housing Agencies http://hf-implode.com/viewnews/2017-11-20_ItsTimeToSaySayonaraToFederallyFundedCRAHousingAgencies.html iehi-feed-63312 Mon, 20 Nov 2017 17:13:55 GMT Is Flagstar Bank Playing Low-Income Borrowers For Chumps? http://hf-implode.com/viewnews/2017-11-20_IsFlagstarBankPlayingLowIncomeBorrowersForChumps.html iehi-feed-63309 Sat, 18 Nov 2017 20:48:41 GMT Wells Fargo Consumer Lending Chief Fired For Being A Big Mouth http://hf-implode.com/viewnews/2017-11-18_WellsFargoConsumerLendingChiefFiredForBeingABigMouth.html iehi-feed-63305 Sat, 18 Nov 2017 16:37:48 GMT Now Is Not The Time To Be Talking Shit About Regulators At Wells Fargo http://hf-implode.com/viewnews/2017-11-18_NowIsNotTheTimeToBeTalkingShitAboutRegulatorsAtWellsFargo.html iehi-feed-63303 Sat, 18 Nov 2017 00:41:13 GMT How Corporate Zombies Are Threatening The Eurozone Economy http://hf-implode.com/viewnews/2017-11-17_HowCorporateZombiesAreThreateningTheEurozoneEconomy.html ``The Bank for International Settlements, the Basel-based central bank for central banks, defines a zombie as any firm which is at least 10 years old, publicly traded and has interest expenses that exceed the company's earnings before interest and taxes. Other organizations use different criteria. About 10% of the companies in six eurozone countries, including France, Germany, Italy and Spain are zombies, according to the central bank's latest data. The percentage is up sharply from 5.5% in 2007. In Italy and Spain, the percentage of zombie companies has tripled since 2007, the Organization for Economic Cooperation and Development estimated in January. Italy's zombies employed about 10% of all workers and gobbled up nearly 20% of all the capital invested in 2013, the latest year for which figures are available.''

The WSJ explains how the ECB's negative interest rate policy and corporate bond buying are keeping a chunk of the corporate sector, especially in southern Europe on life support. In some cases, even the life support of low rates and debt restructuring is not preventing further deterioration in their metrics. These are the true "Zombie" companies who will probably never come back from being "undead"...

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iehi-feed-63301 Sat, 18 Nov 2017 00:04:43 GMT Fed Hints During Next Recession It Will Roll Out Income Targeting, NIRP http://hf-implode.com/viewnews/2017-11-17_FedHintsDuringNextRecessionItWillRollOutIncomeTargetingNIRP.html On Thursday afternoon, in a stark warning of what's to come, San Francisco Fed President John Williams confirmed our suspicions when he said that to fight the next recession, global central bankers will be forced to come up with a whole new toolkit of "solutions", as simply cutting interest rates won't well, cut it anymore, and in addition to more QE and forward guidance - both of which were used widely in the last recession - the Fed may have to use negative interest rates, as well as untried tools including so-called price-level targeting or nominal-income targeting.

[This] is a tacit admission that as a result of the aging workforce and the dramatic slack which still remains in the labor force, the US central bank will have to take drastic steps to preserve social order and cohesion.

According to Williams', Reuters reports, central bankers should take this moment of "relative economic calm" to rethink their approach to monetary policy. Others have echoed Williams' implicit admission that as a result of 9 years of Fed attempts to stimulate the economy - yet merely ending up with the biggest asset bubble in history - the US finds itself in a dead economic end, such as Chicago Fed Bank President Charles Evans, who recently urged a strategy review at the Fed, but Williams' call for a worldwide review is considerably more ambitious.

...Meanwhile, the idea of Fed targeting, or funding, "income" is hardly new: back in July, Deutsche Bank was the first institution to admit that the Fed has created "universal basic income for the rich"...

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iehi-feed-63300 Sat, 18 Nov 2017 00:01:17 GMT Wall St. traders secretly used chat rooms to rig Treasury bond prices: suit http://hf-implode.com/viewnews/2017-11-17_WallSttraderssecretlyusedchatroomstorigTreasurybondpricessuit.html The new accusations, leveled by several pension funds and wealthy individual investors, are contained in an expanded class-action suit originally filed in July 2015 -- and include an unusual twist: Some of the evidence came from confidential informants and one of the banks sued in the earlier action.

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The funds, representing retirees and public workers, also claim the banks conspired to rig the secondary Treasury markets beginning in the 1990s through tightly controlled electronic platforms that inhibited more competitive trading -- a new allegation that wasn't in the original suit but mirrors similar complaints filed against banks in other markets, like stock loans.

The amended suit tightens its focus on a select number of banks, naming Goldman Sachs, Morgan Stanley, the Royal Bank of Scotland, BNP Paribas, and UBS, among others, as the firms behind the rigging, which they allege occurred from Jan. 1, 2007, to mid-2015.

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iehi-feed-63299 Fri, 17 Nov 2017 23:58:30 GMT Saudi Arabia Offers Arrested Royals A Deal: Your Freedom For Lots Of Cash http://hf-implode.com/viewnews/2017-11-17_SaudiArabiaOffersArrestedRoyalsADealYourFreedomForLotsOfCash.html Saudi authorities are negotiating settlements with princes and businessmen held over allegations of corruption, offering deals for the detainees to pay for their freedom, people briefed on the discussions say.

 

In some cases the government is seeking to appropriate as much as 70 per cent of suspects' wealth, two of the people said, in a bid to channel hundreds of billions of dollars into depleted state coffers.

 

The arrangements, which have already seen some assets and funds handed over to the state, provide an insight into the strategy behind Crown Prince Mohammed bin Salman's dramatic corruption purge.

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Regular Saudis, who've seen their benefits cut and some of their jobs taken away, support MbS's decision. "Why should the poor take all the pain of austerity," said one Saudi academic. "The rich need to pay their way too."

In Saudi Arabia, they are about to do just that.

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iehi-feed-63298 Fri, 17 Nov 2017 23:54:15 GMT Taxpayers have paid dearly for 720-mln-euro ‘social dividend' (Greece) http://hf-implode.com/viewnews/2017-11-17_Taxpayershavepaiddearlyfor720mlneurosocialdividendGreece.html iehi-feed-63297 Fri, 17 Nov 2017 23:52:43 GMT EU handling of Greek bailouts only partial success, say EU auditors http://hf-implode.com/viewnews/2017-11-17_EUhandlingofGreekbailoutsonlypartialsuccesssayEUauditors.html The ECA [European Court of Auditors] report, which focused on the work of the European Commission, said the programs "only helped Greece to recover to a limited extent."

The European Central Bank, which together with eurozone states and the International Monetary Fund contributed to the programs, was not assessed because it declined to provide data, questioning the auditors' mandate to ask for it, ECA said.

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"... the Commission did not comprehensively consider Greece's implementation capacity in the design process and thus did not adapt the scope and timing accordingly," [the ECA] said.

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iehi-feed-63296 Fri, 17 Nov 2017 21:29:06 GMT Trump Organization worth one tenth of value previously reported http://hf-implode.com/viewnews/2017-11-17_TrumpOrganizationworthonetenthofvaluepreviouslyreported.html The Trump Organization in New York is reportedly worth one tenth of the value it previously claimed. 

Donald Trump's family business had previously ranked near the top of Crain's New York Business' list of largest privately held companies.

But this year it has fallen from number three to number 40 after the President disclosed the organisation's revenue to federal regulators. 

While the Trump Organization claimed $9.5bn (£7.2bn) in sales last year, Mr Trump's public filings suggest revenues of less than a tenth of that amount, between $600m (£450m) and $700m (£530m).

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"It was obviously important to Donald to have his company at the top of the list and I don't know why he felt that way but the numbers that he presented are just flagrantly untrue," Aaron Elstein said.

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iehi-feed-63295 Fri, 17 Nov 2017 18:03:37 GMT Operator Of Fraudulent Predatory Lending Scheme Found Guilty http://hf-implode.com/viewnews/2017-11-17_OperatorOfFraudulentPredatoryLendingSchemeFoundGuilty.html iehi-feed-63290 Wed, 15 Nov 2017 18:39:51 GMT Richard Cordray is stepping down as head of CFPB (RESTORATION OF BANKSTERS IS COMPLETE!) http://hf-implode.com/viewnews/2017-11-15_RichardCordrayissteppingdownasheadofCFPBRESTORATIONOFBANKSTERSIS.html Richard Cordray, one of the few remaining Obama-era banking regulators, said on Wednesday that he plans to step down as head of the Consumer Financial Protection Bureau by the end of the month, clearing the way for President Trump to remake a watchdog agency loathed by Republicans and Wall Street.

Cordray's decision comes just a month after the CFPB suffered a major rebuke from Republicans in Congress who took the unusual step of blocking an agency rule that would have allowed consumers to sue their banks for the first time. Cordray appealed to President Trump directly not to sign the legislation but was rebuffed.

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With Cordray's departure, the aggressive regulatory structure put in place by the Obama administration in the wake of the global financial crisis has been nearly entirely replaced. The head of the Securities and Exchange Commission has been replaced by a former Wall Street lawyer and the Senate is moving to approve Trump's pick to lead the Office of the Comptroller of the Currency, another important banking regulator. The head of the Federal Deposit Insurance Corp., Martin Gruenberg, has said he will step down at the end of the month.

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The agency has been controversial among Republicans since its inception. Critics complain that CFPB has made it more difficult for people to get a mortgage loan and has overstepped its power to regulate some industries, including auto loans.

More difficult to get a mortgage?! How horrible. It's not like that was ever needed in our recent past (oh, 2007, you say? That's like, a million years ago...)

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iehi-feed-63287 Wed, 15 Nov 2017 17:32:48 GMT Richest 1% own over half the world's wealth http://hf-implode.com/viewnews/2017-11-15_Richest1ownoverhalftheworldswealth.html iehi-feed-63286 Tue, 14 Nov 2017 20:57:38 GMT After periodic drops of 20 percent, bitcoin tends to come back even stronger http://hf-implode.com/viewnews/2017-11-14_Afterperiodicdropsof20percentbitcointendstocomebackevenstronger.html iehi-feed-63285 Tue, 14 Nov 2017 20:54:24 GMT Venezuela's Bondholder Meeting Is a Bust as S&P Declares Default http://hf-implode.com/viewnews/2017-11-14_VenezuelasBondholderMeetingIsaBustasSPDeclaresDefault.html Venezuela's grand gathering with creditors Monday lasted all of 30 minutes and didn't produce anything of substance. To make matters worse, S&P Global Ratings declared the country in default while Fitch Ratings cited missed payments by the state oil company prompting a fresh selloff in the nation's bonds.

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Very little was announced and nothing was resolved, according to attendees who said they left just as confused about the government's intentions as they were going in. Vice President Tareck El Aissami was the only official to speak, and devoted most of his prepared remarks to railing against Donald Trump and global financiers who he said have conspired to keep the country from making debt payments on time. He pledged the nation would continue to honor its obligations and work with bondholders to find new ways to get them their money, but offered no concrete proposals for restructuring.

President Nicolas Maduro had summoned holders of some $60 billion of bonds issued by the government and state oil company Petroleos de Venezuela SA to begin a renegotiation as the nation's cash crunch worsens, sanctions make it difficult to transfer money and delayed payments pile up.

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The nation, home to the world's largest oil reserves, owed investors about $200 million and failed to make those payments by the end of a 30-day grace period, S&P said in the statement in which it lowered the country's rating to SD. Plagued with payment delays and running low on cash -- and with most of its debt trading near 30 cents on the dollar -- it's the first time in recent years the government has exceeded the buffer period on its bonds.

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Investors in Venezuela's $5 billion of bonds maturing in 2019 and 2024 can organize to demand that the nation immediately pay back all they're owed, and down the line, holders of the nation's other debt, which have cross-default provisions, could choose to do the same... they risk setting off what could be the start of one of the messiest debt restructurings ever. S&P said there was a 50 percent chance Venezuela will default again within the next three months.

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iehi-feed-63284 Tue, 14 Nov 2017 19:59:00 GMT Ray Dalio Buys $500 Million In Gold EFTs In Q3 http://hf-implode.com/viewnews/2017-11-14_RayDalioBuys500MillionInGoldEFTsInQ3.html