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-63008 Wed, 20 Sep 2017 19:54:35 GMT Unusually Large Loans Mask Decline In NYC Commercial Real Estate Lending http://hf-implode.com/viewnews/2017-09-20_UnusuallyLargeLoansMaskDeclineInNYCCommercialRealEstateLending.html iehi-feed-63007 Wed, 20 Sep 2017 19:53:44 GMT Fed to Shrink Assets Next Month, Boost Rates by Year-End http://hf-implode.com/viewnews/2017-09-20_FedtoShrinkAssetsNextMonthBoostRatesbyYearEnd.html Federal Reserve officials set an October start for shrinking their $4.5 trillion stockpile of assets, moving to unwind a pillar of their crisis-era support for the economy. They continued to forecast one more interest-rate hike later this year, saying storm damage will have only a temporary impact on the economy.

...

Minutes from the July meeting showed deepening worries about a prolonged period of low inflation. FOMC participants -- including Fed governors and regional bank presidents -- forecast that inflation will reach their 2 percent target in 2019, compared with an expectation of 2018 in June, based on median estimates. They have missed the target for most of the past five years.

]]>
iehi-feed-63006 Wed, 20 Sep 2017 17:41:56 GMT Freelancer CEO destroys "delusional, stuffed, basket case, bubble, Third World economy like no other" (AU) http://hf-implode.com/viewnews/2017-09-20_FreelancerCEOdestroysdelusionalstuffedbasketcasebubbleThirdWorld.html iehi-feed-63005 Wed, 20 Sep 2017 16:09:29 GMT Fed's QT will push this market into 'brick wall': Boockvar http://hf-implode.com/viewnews/2017-09-20_FedsQTwillpushthismarketintobrickwallBoockvar.html We're finally here. About nine years after quantitative easing (QE) began, quantitative tightening (QT) is about to start. On Wednesday, after the Federal Open Market Committee releases its statement, Janet Yellen will follow with a press conference that she will do her best to make as boring as possible... [but] I expect no different an outcome this time and I believe the market -- with the S&P at an all-time high - is headed for a brick wall the deeper QT gets.

...

After QE1 ended when we knew exactly the full size and expiration date (March 31st, 2010), the market topped out three weeks after and then fell 17 percent. After QE2 ended when we also knew the exact amount and deadline (June 30th, 2011), the market peaked one week later and then fell about 20 percent. Around the time QE3 ended with the lead up being a very methodical process of tapering, stocks had a hissy fit of about 10 percent only saved by James Bullard who hinted that maybe they won't end QE.

In the two months after the well telegraphed first rate hike in December 2015, stocks fell by 13 percent. The stock market of course therefore wasn't very good at discounting the end of major monetary stimulus actions even though they knew what was coming.

]]>
iehi-feed-63000 Tue, 19 Sep 2017 19:56:15 GMT Donald Trump took bulk of $107 million for inauguration promised to charities ... and kept it http://hf-implode.com/viewnews/2017-09-19_DonaldTrumptookbulkof107millionforinaugurationpromisedtocharitie.html President Donald Trump's inaugural committee raised an unprecedented $107 million for a ceremony that officials promised would be "workmanlike," and the committee pledged to give leftover funds to charity.

...

The $107 million is a massive amount for even the most lavish inauguration. It's almost twice what Barack Obama took in for a celebration that was much more widely attended and which included many more events... Somehow, Trump supposedly blew through $25 million for [an] abbreviated event that seemed more suitable for a county fair. In a small county. It's an amount that seems amazing even to the people on Trump's own campaign committee. "I couldn't tell you how we possibly could have spent $25 million on a concert," said Kerrigan.

... [After that questionable expense of $25 million,] it's been eight months. How much has been given out? None. None at all.

This is large-scale scammery, even for Trump. The funny thing is, we were initially resistant to the claims of Trump's detractors early on that he just wanted to use the presidency to line his pockets... overtly. But that seems to be panning out to a greater degree than we ever imagined... and it has been going on since the campaign (e.g., jacking up the rent on his own campaign for Trump Tower by 2-3x), to say nothing of the presidency.

]]>
iehi-feed-62999 Tue, 19 Sep 2017 17:35:29 GMT 'No evidence QE works' as balance sheet unwind starts http://hf-implode.com/viewnews/2017-09-19_NoevidenceQEworksasbalancesheetunwindstarts.html There's little question that the program, known as quantitative easing or "money printing," boosted the stock market. The three iterations of QE between November 2008 and October 2014 each saw big boosts to the market, with a cumulative S&P 500 gain from beginning to end, including the various down periods between each leg, of about 140 percent.

The economic impacts, though, are less clear.

For most of the period, GDP struggled to gain more than 2 percent. Wealth disparity grew, income gains were hard to come by and the Fed continually came up short on its inflation goal.

...

In fact, one of the Fed's own economists recently penned a report indicating that QE has come up short of its goals.

"Evaluating the effects of monetary policy is difficult, even in the case of conventional interest rate policy," St. Louis Fed economist Stephen D. Williamson wrote. "With respect to QE, there are good reasons to be skeptical that it works as advertised, and some economists have made a good case that QE is actually detrimental."

]]>
iehi-feed-62998 Tue, 19 Sep 2017 17:33:25 GMT Toys R Us -- crushed by debt -- files for bankruptcy http://hf-implode.com/viewnews/2017-09-19_ToysRUscrushedbydebtfilesforbankruptcy.html Toys R Us been spiraling toward bankruptcy for years as it failed to keep up with competitors. Analysts cited many reasons for the company's demise: Lousy in-store customer service, a second-rate website and prices that are often higher than at many of its big-box competitors. Add to that piles of mounting debt -- much of it dating to a 2005 leveraged buyout -- and it was clear, many said, that the 60-year-old brand was in trouble.

"When you're cursed with all this debt, there's no way you can compete anymore," said Howard Davidowitz, a retail consultant who worked with Toys R Us in the 1980s and 1990s. "Now they're running up and down the halls trying to pick up the pieces, but there's no way around it: This is a very bad situation, and it will weaken the company forever."

...

The Wayne, N.J.-based company was for decades the country's preeminent toy retailer, with a towering flagship in New York's Times Square and a ubiquitous icon, Geoffrey the Giraffe. In 2009, it purchased competitor FAO Schwarz but eventually closed its New York store on Fifth Avenue, citing high costs.

]]>
iehi-feed-62995 Tue, 19 Sep 2017 14:17:32 GMT Bitcoin roars back from Chinese-regulation spurred swoon http://hf-implode.com/viewnews/2017-09-19_BitcoinroarsbackfromChineseregulationspurredswoon.html Prices are rebounding because traders in China are likely to switch to alternative exchanges or seek loopholes in the regulation, said Peter Van Valkenburgh, director of research at Coin Center, a Washington-based nonprofit research firm focusing on cryptocurrencies.

"The efficacy of any bitcoin ban is pretty dubious," said Van Valkenburgh.''

...

While the tighter regulation makes access to cryptocurrency more difficult, investors can trade the digital assets over-the-counter or go to exchanges based in other jurisdictions.

Instead of WeChat, cryptocurrency aficionados are already migrating to encrypted messaging service Telegram.

]]>
iehi-feed-62994 Tue, 19 Sep 2017 04:56:01 GMT Gary Cohn Is Giving Goldman Sachs Everything It Ever Wanted From the Trump Administration http://hf-implode.com/viewnews/2017-09-19_GaryCohnIsGivingGoldmanSachsEverythingItEverWantedFromtheTrumpAd.html GOLDMAN SACHS had been a favorite cudgel for candidate Trump -- the symbol of a government that favors Wall Street over its citizenry. Trump proclaimed that Hillary Clinton was in the firm's pockets, as was Ted Cruz. It was Goldman Sachs that Trump singled out when he railed against a system rigged in favor of the global elite -- one that "robbed our working class, stripped our country of wealth, and put money into the pockets of a handful of large corporations and political entities." Cohn, as president and chief operating officer of Goldman Sachs, had been at the heart of it all. Aggressive and relentless, a former aluminum siding salesman and commodities broker with a nose for making money, Cohn had turned Goldman's sleepy home loan unit into what a Senate staffer called "one of the largest mortgage trading desks in the world." There, he aggressively pushed his sales team to sell mortgage-backed securities to unaware investors even as he watched over "the big short," Goldman's decision to bet billions of dollars that the market would collapse.

Now Cohn would be coordinating economic policy for the populist president.

The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump's nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage.

...

Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six.

Drain the swamp! (LOL)

]]>
iehi-feed-62993 Tue, 19 Sep 2017 01:10:54 GMT Hurricane Maria strengthens to Category 5, Puerto Rico prepares for potentially catastrophic storm http://hf-implode.com/viewnews/2017-09-18_HurricaneMariastrengthenstoCategory5PuertoRicopreparesforpotenti.html iehi-feed-62992 Mon, 18 Sep 2017 17:45:48 GMT Yellen's Legacy Burnished by Job Market Hunch, Crisis Policy Exit http://hf-implode.com/viewnews/2017-09-18_YellensLegacyBurnishedbyJobMarketHunchCrisisPolicyExit.html President Donald Trump said in July that Yellen is "absolutely" in the running to remain at the helm of the U.S. central bank when her term expires in February. That doesn't mean he'll pick her, or that she even wants a second term. Yellen has declined to comment on the topic. The White House is also considering other candidates.

...

Yellen has also presided over the end of the Fed's emergency-era bond purchases and mapped out a path to gradually shrink its $4.5 trillion balance sheet--both without repeating the market-roiling taper tantrum of predecessor Ben Bernanke. Some 71 percent of 42 economists in a Bloomberg News survey conducted Sept. 12-14 expect the Fed to announce when it will start the runoff at the conclusion of its meeting Wednesday.

Yellen's tenure seems to us like an extended Wil-e-coyote moment amidst a debt-deflationary phase-shift in the financial economy...

]]>
iehi-feed-62991 Mon, 18 Sep 2017 15:34:44 GMT Greece told to begin online auctions or face a bank bail-in http://hf-implode.com/viewnews/2017-09-18_Greecetoldtobeginonlineauctionsorfaceabankbailin.html iehi-feed-62990 Mon, 18 Sep 2017 15:33:11 GMT Global Central Banks Can't Ignore the Bitcoin Boom, BIS Says http://hf-implode.com/viewnews/2017-09-18_GlobalCentralBanksCantIgnoretheBitcoinBoomBISSays.html The world's central banks can't ignore the growth in cryptocurrencies and may at some point have to consider whether it makes sense for them to issue their own digital currencies, according to the Bank for International Settlements.

... with bitcoin and others gaining in popularity as payment systems go mobile and investors pour in money, central banks are beginning to delve into them and their underlying blockchain technology, which promises to speed up clearing and settlements. At the Bank of England, Mark Carney has cited cryptocurrencies as part of a potential "revolution" in finance.

]]>
iehi-feed-62989 Sun, 17 Sep 2017 13:36:50 GMT The eurozone may be back on its feet. But is Greece? http://hf-implode.com/viewnews/2017-09-17_TheeurozonemaybebackonitsfeetButisGreece.html iehi-feed-62988 Sun, 17 Sep 2017 00:29:41 GMT Pension Storm Warning - Mauldin http://hf-implode.com/viewnews/2017-09-16_PensionStormWarningMauldin.html iehi-feed-62986 Sat, 16 Sep 2017 16:32:40 GMT "Going Broke at Mach 30" http://hf-implode.com/viewnews/2017-09-16_GoingBrokeatMach30.html iehi-feed-62984 Sat, 16 Sep 2017 14:12:53 GMT Debt-ceiling shift signifies a remarkable political evolution for Trump http://hf-implode.com/viewnews/2017-09-16_DebtceilingshiftsignifiesaremarkablepoliticalevolutionforTrump.html President Trump on Thursday signaled openness to a proposal to effectively eliminate the federal limit on government borrowing, a dramatic reversal from his view as a candidate and the long-standing position of the Republican Party that the debt limit should be raised only if other steps are taken to restrain the size of government.

On Wednesday, Trump and Senate Minority Leader Charles E. Schumer (D--N.Y.) reached what one senior White House official called a "gentlemen's agreement" to develop a plan that would no longer require Congress to routinely raise the limit on government borrowing.

]]>
iehi-feed-62983 Sat, 16 Sep 2017 00:47:31 GMT U.S. Senator Warren introduces Equifax bill, launches industry probe http://hf-implode.com/viewnews/2017-09-15_USSenatorWarrenintroducesEquifaxbilllaunchesindustryprobe.html U.S. Senator Elizabeth Warren said on Friday she has begun an investigation into Equifax's massive data breach, and along with 11 other Democratic senators, introduced a bill to allow consumers to freeze their credit for free.

...

Warren, who has built a reputation as a fierce consumer champion, also signaled in a letter to the Consumer Financial Protection Bureau (CFPB), the agency she helped create in the wake of the 2007-2009 financial crisis, that it may require extra powers to ensure closer federal oversight of credit reporting agencies.

...

Also on Friday, the chairman and ranking member of the Senate subcommittee on Social Security urged Social Security Administration to consider nullifying its contract with Equifax and consider making the company ineligible for future government contracts.

...

Despite shares of Equifax heading for their biggest weekly drop since July 2001, most of Wall Street still recommended buying the stock.

Equifax (and semi-regular consumer financial breaches) may result in the CFPB becoming untouchable...

]]>
iehi-feed-62982 Sat, 16 Sep 2017 00:38:56 GMT Hugh Hendry Shuts Down His Hedge Fund; Predicts Inflationary Surprise http://hf-implode.com/viewnews/2017-09-15_HughHendryShutsDownHisHedgeFundPredictsInflationarySurprise.html In the middle of 1964, CPI core inflation was running at 1.7% and indeed dropped to just 1.2% in 1965; unemployment was 4.5%, the same as today. And yet by the end of 1966 inflation had essentially got out of control and didn't dip below 2% again until 1995, almost 30 years later.

...

if an inflationary path like 1966 is gestating then I fear there is very little chance that anything timely will be done about it. Rate hikes will continue to be sparse, we only have one quarter point hike predicted between now and the end of 2019, which if fulfilled will be highly unlikely to spark a severe recession. Most likely the US economy will continue to grow and the labour market will tighten making a larger adjustment to rates in the future inevitable.

]]>
iehi-feed-62980 Sat, 16 Sep 2017 00:15:28 GMT Fed to take historic leap into the unknown (+TRIES NOT TO SPOOK MARKETS) http://hf-implode.com/viewnews/2017-09-15_FedtotakehistoricleapintotheunknownTRIESNOTTOSPOOKMARKETS.html The Federal Reserve is set to take a leap into the unknown next week by beginning to sell some of the roughly $3.7 trillion of bonds and mortgage securities it amassed during the financial crisis.

The Fed will meet on Tuesday and Wednesday and is widely expected at the end of the meeting to announce it plans to allow the run-off of its massive balance sheet beginning sometime in October. Fed Chairwoman Janet Yellen will hold a press conference afterwards to explain the decision.

...

Trying to keep financial markets calm, the Fed is not celebrating this turning point. Officials have openly admitting they have designed the first steps to be so small it will be like watching paint dry. But economists have no doubt that bond yields will eventually move higher.

]]>