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-61515 Wed, 18 Jan 2017 22:54:44 GMT The Dollar, "the Most Crowded Trade," Gets Less Crowded http://hf-implode.com/viewnews/2017-01-18_TheDollartheMostCrowdedTradeGetsLessCrowded.html iehi-feed-61514 Wed, 18 Jan 2017 21:45:44 GMT Troubled Deutsche Bank Scraps Senior Bankers' Bonuses for 2016 http://hf-implode.com/viewnews/2017-01-18_TroubledDeutscheBankScrapsSeniorBankersBonusesfor2016.html Deutsche Bank AG scrapped the bonuses of its top executives for a second straight year and slashed variable compensation for other senior employees, as Germany's largest lender tries to shore up capital that's been eroded by low interest rates and legal expenses.

The measures, announced in a memo to employees Wednesday that was signed by the members of the management board, will affect about a quarter of employees, including vice presidents, directors and managing directors. A "limited number" of employees in crucial positions will receive a special long-term incentive, partly in stock, that will be deferred for as long as six years, according to the memo.

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"Now that we have a clearer idea of the financial impact of the settlement with the U.S. Department of Justice and our performance for the year, we feel that tough measures are unavoidable," the bank said in the memo. "This is especially true at a time when thousands of jobs are being cut and our shareholders are not receiving an annual dividend."

The widespread bonus cuts, unprecedented in the bank's recent history, highlight the severity of its troubles, and come as fixed-income traders around the world are about to see their annual pay grow for the first time since 2012 amid a surge in bond trading, according to a November report from recruitment firm Options Group Inc.

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iehi-feed-61509 Tue, 17 Jan 2017 23:04:55 GMT Gundlach's Projections: Stocks Will Correct; Euro Will Deteriorate http://hf-implode.com/viewnews/2017-01-17_GundlachsProjectionsStocksWillCorrectEuroWillDeteriorate.html iehi-feed-61507 Tue, 17 Jan 2017 22:03:37 GMT Why the Price of Gold Will Rise 15.2% This Year http://hf-implode.com/viewnews/2017-01-17_WhythePriceofGoldWillRise152ThisYear.html iehi-feed-61506 Tue, 17 Jan 2017 21:14:00 GMT A Hint of Gold Backwardation Means Rising Gold Scarcity http://hf-implode.com/viewnews/2017-01-17_AHintofGoldBackwardationMeansRisingGoldScarcity.html iehi-feed-61505 Tue, 17 Jan 2017 21:06:39 GMT Crazy Housing Reality Shows Are Back http://hf-implode.com/viewnews/2017-01-17_CrazyHousingRealityShowsAreBack.html [The shows don't want] too much to think about.  Real estate buying is simple!  It never goes down!  If this dingbat couple bought then surely "I" with my genius IQ and my spouse will live happily ever after so long as we buy.  No one lost buying real estate (aside from the 7,000,000+ recent foreclosures from the latest housing bust).

In the end, no one cares about your financial well being more than you.  In my view, managing your finances wisely is about financial independence, not being locked down as a house slave while having to forge into the toxic freeway wasteland of California.  That financial independence may very well include owning a home.  Heck, in most parts of the country buying is really a no brainer.  But in expensive regions and states, the math isn't so clear. 

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iehi-feed-61504 Tue, 17 Jan 2017 19:58:25 GMT Bombshell as Trump just signaled the death of Clinton-era strong "dollar policy" http://hf-implode.com/viewnews/2017-01-17_BombshellasTrumpjustsignaledthedeathofClintonerastrongdollarpoli.html Presidents in recent history have refrained from talking the currency up or down, and Chandler says going back to Clinton Treasury Secretary Robert Rubin, the policy has been for a strong dollar. Even when the dollar's strength created headwinds, administrations have stood by it, at least verbally.

Trump said the dollar was already "too strong," and he pointed a finger at the Chinese currency. "Our companies can't compete with them now because our currency is too strong. And it's killing us," he told the newspaper. Trump said the yuan has been "dropping like a rock," and that recent Chinese moves to support its currency were done "because they don't want us to get angry."

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"It raises questions. Are we back to Lloyd Benson? He talked the dollar down and the dollar collapsed. Is this a jettison of the Rubin strong dollar policy? We don't know," said Chandler.

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Woo said he does not expect Mnuchin to tout the strong dollar policy. Instead, he expects him to stop short of it as he did in a recent CNBC interview by more or less saying a strong "economy" is in the best interest of the U.S. That is very like the comment made by Lew on Tuesday.

This is one of the simplest, most effective things Trump can do (as it addresses the all-important monetary front of U.S. economic challenges, and apparently, is all Trump cares to do on that front) -- of course, there is a risk of it overshooting badly. The real bold move would be to re-back the dollar with gold when it is at its nadir, but that would take "work" to setup, not just gum-flapping/twitter tapping.

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iehi-feed-61502 Tue, 17 Jan 2017 18:58:36 GMT Theresa May Elaborates on Brexit: 4 Quotes and What They Mean http://hf-implode.com/viewnews/2017-01-17_TheresaMayElaboratesonBrexit4QuotesandWhatTheyMean.html "I must be clear. Britain wants to remain a good friend and neighbor to Europe. Yet, I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path. That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend. Britain would not -- indeed, we could not -- accept such an approach."

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Since the referendum, Britain's European partners have taken a hard line, warning that it cannot have an à la carte membership in which it cherry-picks the benefits it wants to retain. Some European leaders have also said that Britain should be punished in some way to deter other countries from trying to leave the European Union.

In her speech, Mrs. May emphasized Britain's friendship with Europe and said that the nation did not seek to unravel the union. But those comments were quickly followed by the threat that punitive measures against Britain could easily backfire. Case in point: This week, Philip Hammond, the chancellor of the Exchequer, suggested that Britain could transform itself into a corporate tax haven if the European Union failed to strike a trade agreement with the country.

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iehi-feed-61499 Tue, 17 Jan 2017 02:05:56 GMT Peak Savings: Wall Street Faces 20 Years Of Retirement Withdrawals As Boomers Hit 70 1/2 http://hf-implode.com/viewnews/2017-01-16_PeakSavingsWallStreetFaces20YearsOfRetirementWithdrawalsAsBoomer.html America's aging population [will be] forced by IRS regulations to take retirement withdrawals once they hit 70 1/2 years of age... over the past 2 decades Americans have consistently contributed more than they've withdrawn from tax deferred accounts, excluding recessionary periods. But that all changed in 2013 and 2014 as the first wave of Boomers hit the magical age of 70.5 with a total of $25 billion of net withdrawals in 2014 alone.

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In aggregate, per the Wall Street Journal, Boomers have saved $10 trillion in various tax-deferred saving accounts. While that sounds like an impressive figure, with 75 million Boomers, it equates to an average of $133,000 per person which, needless to say, is insufficient to fund ~20 years of retirement.

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iehi-feed-61498 Tue, 17 Jan 2017 01:59:07 GMT Davos elite faces evaporating trust of populace http://hf-implode.com/viewnews/2017-01-16_Davoselitefacesevaporatingtrustofpopulace.html Trust in governments, companies and the media plunged last year as ballots from the United States to Britain to the Philippines rocked political establishments and scandals hit business.

The majority of people now believe the economic and political system is failing them, according to the annual Edelman Trust Barometer, released on Monday ahead of the Jan. 17-20 World Economic Forum (WEF).

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"The most shocking statistic of this whole study is that half the people who are high-income, college-educated and well-informed also believe the system doesn't work."

We're not sure what's "post-truth" about no longer having trust in elites; so we just went ahead and cropped that from the headline.

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iehi-feed-61490 Sun, 15 Jan 2017 15:06:55 GMT The President Who Wasn't There: Barack Obama's Legacy of Impotence http://hf-implode.com/viewnews/2017-01-15_ThePresidentWhoWasntThereBarackObamasLegacyofImpotence.html Obama assumed the presidency at a moment when much of the nation seemed ready to confront the unwelcome fact that the American project had derailed.... Corporate capitalism just wasn't delivering the goods anymore. Not for the bottom 80 percent, any way. The economy was in ruins, mired in what appeared to be a permanent recession. The manufacturing sector had been killed from the inside-out, with millions of well-paying jobs outsourced and nothing but dreary service-sector positions to take their place. Chronic long-term unemployment hovered at more than 10 percent, worse, much worse, in black America. Those who clung to their jobs had seen their wages stagnate, their home values shrivel and were suffocating under merciless mounds of debt. Meanwhile, capital moved in ever-tightening circles among a new odious breed of super-rich, making sweat-free billions from the facile movement of money.

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With his sunny disposition and Prospero-like aptitude for mystification, Obama should have been able to convert [the discontented] or, at least, to roll over them. Instead, they kicked his ass. How? ... Obama's most grievous political wounds were self-inflicted, starting even before his election when he rushed back to Washington to help rescue Bush's Wall Street bailout. This was perhaps the first real indication that the luminous campaign speeches about generational and systemic change masked the servile psyche of a man who was desperately yearning to be embraced by the nation's political and financial elites.

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iehi-feed-61489 Sun, 15 Jan 2017 02:40:01 GMT Icahn Hedge Fund Loses 20% of Its Value in 2016 http://hf-implode.com/viewnews/2017-01-14_IcahnHedgeFundLoses20ofItsValuein2016.html Billionaire Carl Icahn is coming off another poor investment year as a nearly $6 billion hedge fund that he oversees suffered a loss of 20.3% in 2016 after a decline of 18% in 2015, according to a disclosure in a regulatory filing in conjunction with a bond deal and rights offering being made by Icahn Enterprises (ticker: IEP), a publicly traded limited partnership that is controlled by Icahn.

The weak 2016 performance reflected Icahn's bearish stance as the fund had a sizable short position in the U.S. equity market that hurt results as the S&P 500 index gained almost 10% last year. The Icahn fund had a net short position of 138% at the end of the third quarter--fourth quarter positioning has not yet been disclosed.

It's ironic that Icahn, one of the Wall Street's prominent supporters of president-elect Donald Trump, failed to capitalize on the postelection market rally in stocks.

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iehi-feed-61487 Sun, 15 Jan 2017 00:42:05 GMT Why DeLong, Summers, Bernanke, Krugman, Keen, Pettis, Edwards et al. Can't Figure Out "Secular Stagnation" http://hf-implode.com/viewnews/2017-01-14_WhyDeLongSummersBernankeKrugmanKeenPettisEdwardsetalCantFigureOu.html iehi-feed-61484 Sat, 14 Jan 2017 15:05:25 GMT Are Investors bracing for a massive stock-market selloff? http://hf-implode.com/viewnews/2017-01-14_AreInvestorsbracingforamassivestockmarketselloff.html Demand for one-month call options tied to the CBOE Volatility Index, a popular gauge of stock-market volatility, has spiked in the past week, a sign that some are bracing for a sharp downturn following the inauguration of President-elect Donald Trump.

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Since the beginning of the year, stock-market volatility has been relatively subdued despite increasing uncertainty surrounding the future direction of fiscal and monetary policy in the U.S. The Daily Shot, a popular market newsletter, illustrates this divergence in the chart below.

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iehi-feed-61480 Fri, 13 Jan 2017 19:41:52 GMT JPMorgan, BofA make out like a bandits on post-Trump market surge http://hf-implode.com/viewnews/2017-01-13_JPMorganBofAmakeoutlikeabanditsonpostTrumpmarketsurge.html JPMorgan Chase & Co reported a 24 percent rise in fourth-quarter profits on Friday, beating analyst expectations, as its Wall Street business benefited from a surge in trading activity following the U.S. election... [ex-tax adjustments] the bank earned $1.58 per share, well above the average analyst estimate of $1.44 per share...

Revenue from fixed-income trading -- JPMorgan's most volatile business -- rose 31 percent to $3.4 billion, while stock trading revenue increased 8 percent to $1.2 billion. Bank of America Corp (BAC.N), which reported results earlier on Friday, also said trading revenue surged last quarter.

Here's a piece on BofA, to the same effect.

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iehi-feed-61475 Fri, 13 Jan 2017 16:42:22 GMT Wells Fargo profit falls after sales scandal http://hf-implode.com/viewnews/2017-01-13_WellsFargoprofitfallsaftersalesscandal.html Wells Fargo & Co. reported a decline in fourth-quarter profit as moves in interest rates, a falloff in mortgage revenue and the bank's recent sales-tactics scandal weighed on the nation's third-largest bank.

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Since the scandal, new retail banking business such as customer checking account openings and credit card applications have fallen dramatically, including a drop of 40% and 43%, respectively, in December from a year ago.

Overall profits at Wells Fargo's community banking division, which includes the unit responsible for the questionable sales tactics, were $2.73 billion, a 15% decrease from the $3.3 billion it earned in the fourth quarter of 2015.

The scandal has boosted expenses, which are likely to remain high for some time. Wells Fargo CEO Timothy Sloan has said the bank expects to spend tens of millions of dollars to get through investigations and other regulatory matters related to its sales-practices scandal. Wells faces a spate of state and federal investigations, including by the Justice Department and the Securities and Exchange Commission.

Making matters worse, the higher costs come as interest rates remain at relatively low levels, despite a recent uptick. The result of this combination: Wells Fargo's return on equity continues to grind lower in the fourth quarter, at 10.94%, its lowest level in years.

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iehi-feed-61474 Fri, 13 Jan 2017 16:36:50 GMT Germany's Wolfgang Schaeuble urges ECB to start unwinding stimulus this year http://hf-implode.com/viewnews/2017-01-13_GermanysWolfgangSchaeubleurgesECBtostartunwindingstimulusthisyea.html The European Central Bank should start unwinding its ultra-loose monetary policy this year, German Finance Minister Wolfgang Schaeuble said in an interview to be published on Friday, adding that it would not be easy.

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He said forecasts that inflation could reach 3 percent in Germany this year would exacerbate concerns about current low interest rates.

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The conservative minister said it would take a great effort to convince German citizens that the common currency provided more employment, social and business benefits than risks and negative consequences.

To help Germany make the argument, he said it was essential that Italy and other countries stuck to the agreed rules.

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iehi-feed-61473 Fri, 13 Jan 2017 16:35:17 GMT Edwards: ‘Waste of time' to save Italian bank; Get Italy Out of Euro http://hf-implode.com/viewnews/2017-01-13_EdwardsWasteoftimetosaveItalianbankGetItalyOutofEuro.html iehi-feed-61472 Fri, 13 Jan 2017 16:30:55 GMT Mitchell Feierstein: Abolish central banks and slay the zombies http://hf-implode.com/viewnews/2017-01-13_MitchellFeiersteinAbolishcentralbanksandslaythezombies.html It's different this time -- or is it? The US Federal Reserve, the Bank of England and the European Central Bank have become gargantuan, out-of-control, rogue hedge funds. Global central banks have magicked up hundreds of trillions of dollars in debt and guarantees. Worldwide stock-market valuations are stratospheric -- buoyed by share buybacks, funded by record corporate debt and enabled by reckless central bank zero-interest-rate policies. The European Central Bank's purchase of massive amounts of corporate debt is pouring petrol on this blaze.

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As far as I'm concerned, Carney and former chancellor George Osborne used the levers of monetary policy to distort market-pricing mechanisms and normal price signals. As a result, insurance companies and pension-fund portfolios were loaded to the gills with "risky assets" that will bankrupt them when -- not if -- markets normalise.

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All of this has resulted in a UK commercial and residential property bubble that is ready to explode. In Chelsea and Kensington, property transaction volumes have plummeted. Prices collapsed nearly 15% in November as property agents quietly close shop and sack employees across London. 

Have the Bank-enabled grotesque bubbles in the bond, stock and property markets or the eight years of "temporary emergency measures" and zero-interest-rate policies created infrastructure investment? Job creation? Savings? No, no and no.

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JPMorgan, Deutsche and Nomura made a fortune -- and Monte's shareholders and depositors, and EU taxpayers, will get slammed with the massive bailout tab. The new normal is apparently a world of financial fraud where the only rules which apply are too big to fail, bail or jail and too connected to prosecute --steal all you can, while you can, with impunity.

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Capitalism without bankruptcy is like Catholicism without hell. And right now, we need to audit and abolish the Fed, the Bank and the ECB, which started this mess, and slay the zombies.

Desperate times call for desperate measures; we must create a "new global banking paradigm" -- pivoting far away from the West's broken models, which rely on the same PhD economists, academics and government bureaucrats who have destroyed our global financial system and capitalism, replacing it with a combination of Keynesian economic Kool-Aid and central bank "new normal" Marxism.

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iehi-feed-61468 Thu, 12 Jan 2017 15:41:47 GMT Central Bank Cites Security Threat in India Cash Ban Decision Mystery http://hf-implode.com/viewnews/2017-01-12_CentralBankCitesSecurityThreatinIndiaCashBanDecisionMystery.html The cloak of secrecy that has shrouded the currency ban decision is likely to bolster the view that authorities, both on Mint Street and in New Delhi, were not prepared for such a decision and the way it was announced. It risks undermining perceptions of the central bank's independence and raises questions about Modi's decision-making style and his communication with the RBI.

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The RBI also claimed exemptions on two questions seeking detail on its preparations for the demonetization and studies it used to forecast the impact of the move. Sharing these "sensitive matters" would endanger India's sovereignty, integrity and security, according to the RBI

The use of those specific exemptions are "perplexing," Capital Economics's Shah said. Shailesh Gandhi, a former bureaucrat with the Central Information Commission, told the FirstPost website on Dec. 31 that the RBI's attitude of stonewalling smacked of "sheer arrogance."

"What the RBI is doing by refusing to answer queries under RTI is denying citizens their fundamental rights," Gandhi said.

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The move to ban high currency bank notes was an economic disaster with the worst yet to come, Former Prime Minister Manmohan Singh told a gathering of opposition Congress Party workers yesterday.

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"The institutional identity of the RBI has been damaged," former Governor Yaga Venugopal Reddy told CNBC this week. Rahul Gandhi, a leader of the main opposition Congress party, repeated the accusation, attacking Modi for ruining the credibility of the central bank.

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