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-60328 Fri, 29 Jul 2016 00:13:27 GMT Global Central Banks Are All-In: QE Running At Record $180 Billion Per Month (And Rising) http://hf-implode.com/viewnews/2016-07-28_GlobalCentralBanksAreAllInQERunningAtRecord180BillionPerMonthAnd.html iehi-feed-60327 Thu, 28 Jul 2016 22:07:16 GMT Monte Paschi Bailout In Peril As 3 Banks Walk Out http://hf-implode.com/viewnews/2016-07-28_MontePaschiBailoutInPerilAs3BanksWalkOut.html iehi-feed-60323 Thu, 28 Jul 2016 15:09:36 GMT Can the World Deal With a New Bank Crisis? - Satyajit Das http://hf-implode.com/viewnews/2016-07-28_CantheWorldDealWithaNewBankCrisisSatyajitDas.html As Europe braces for the release of its bank stress tests on Friday, the world could be on the verge of another banking crisis. The signs are obvious to all. The World Bank estimates the ratio of non-performing loans to total gross loans in 2015 reached 4.3 percent. Before the 2009 global financial crisis, they stood at 4.2 percent.

If anything, the problem is starker now than then: There are more than $3 trillion in stressed loan assets worldwide, compared to the roughly $1 trillion of U.S. subprime loans that triggered the 2009 crisis. European banks are saddled with $1.3 trillion in non-performing loans, nearly $400 billion of them in Italy. The IMF estimates that risky loans in China also total $1.3 trillion, although private forecasts are higher. India's stressed loans top $150 billion.

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To make matters worse, the world's limp recovery since 2009 is intensifying loan stresses. In advanced economies, low growth and disinflation or deflation is making it harder for companies to pay off what they owe. Many European firms are suffering from a lack of global competitiveness, exacerbated by the effects of the single currency.

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Current monetary policy is partly to blame. Zero or negative rates drive down bank lending rates more than deposit rates, which can't be cut because of the need to maintain deposits and comply with regulatory requirements for stable funding.

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iehi-feed-60322 Thu, 28 Jul 2016 15:04:55 GMT Schäuble "bails out" Spain, Portugal (In attempt to defuse political rebellions) http://hf-implode.com/viewnews/2016-07-28_SchublebailsoutSpainPortugalInattempttodefusepoliticalrebellions.html By the time the so-called College of Commissioners gathered mid-morning on Wednesday, the sentiment in the room had shifted away from coming down on Spain and Portugal. "That is having an impact," a source in the room wrote during the deliberations, referring to Schäuble's intervention.

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Officials pointed to various political reasons for Schäuble's move. Primarily, the de facto number two in Germany's government doesn't want to hurt an ally in Mariano Rajoy, the center-right Spanish leader who is struggling to put together a government after last month's elections. With France and Italy in the hands of the Left, Germany's CDU-led coalition prefers to see a fellow conservative take power in the eurozone's fourth-largest economy. During his conversations at the G20 in China, Schäuble stressed the need for "political stability" in southwestern Europe, according to someone familiar with the conversation. Portugal's leftist government got a free ride on the Schäuble train.

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iehi-feed-60321 Thu, 28 Jul 2016 14:56:24 GMT Insanity In Japan http://hf-implode.com/viewnews/2016-07-28_InsanityInJapan.html iehi-feed-60318 Thu, 28 Jul 2016 01:53:08 GMT Sudden Spike - Trend Reversal and Record Swiss Gold Flow Into The United States http://hf-implode.com/viewnews/2016-07-27_SuddenSpikeTrendReversalandRecordSwissGoldFlowIntoTheUnitedState.html iehi-feed-60317 Thu, 28 Jul 2016 01:26:31 GMT Cameron was right, Britain is broken. But it's businessmen who are to blame http://hf-implode.com/viewnews/2016-07-27_CameronwasrightBritainisbrokenButitsbusinessmenwhoaretoblame.html In Brexit Britain, one of the most important contracts between businesses and the public has been broken. Companies increasingly rely on the public to pay their way: to top up wages with benefits and public services, and billions in subsidies and grants and tax reliefs. What goes with that is another broken contract: the one that says work always pays. From Norman Tebbit to Brown to IDS, that idea has been central to employment and welfare policy. It is now dead. As the Institute for Fiscal Studies said last week: "The new poor tend to live in households where there is someone in work." This is a fact that those at the bottom of the labour market have known for years, but is only now working its way into the minds of policymakers.

Cameron warned of "the slow-motion moral collapse that has taken place in parts of our country these past few generations". He was right. It's just that it's been led by those at the top -- the ones at the boardroom tables, their expensive helpers -- and their mates and supporters in politics using taxpayer money to wave them on.

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iehi-feed-60316 Wed, 27 Jul 2016 22:05:29 GMT IRS Launches Investigation Of Clinton Foundation, At Behest of Congress http://hf-implode.com/viewnews/2016-07-27_IRSLaunchesInvestigationOfClintonFoundationAtBehestofCongress.html The [World Bank's] IFC also awarded $150 million to another company owned by Frank Giustra, a close friend of Bill Clinton. Giustra donated $100 million to create the "Clinton Giustra Enterprise Partnership" within the Clinton Foundation... Giustra also was an owner in Uranium One, a uranium mining company with operations in Kazakhstan and in the western United States. Giustra wanted to sell a share of the uranium business to Russia's atomic energy agency, which required U.S. approval, including that of Secretary Clinton. The Russian investment was approved.

Blackburn added that it appeared the Clinton Foundation -- which was tax-exempt only to construct and manage Clinton's presidential library -- never got IRS approval to become a tax-exempt global organization with operations in Africa, Asia, Latin America, the Pacific and the Caribbean.

"In the Clinton Foundation we have a charity that has never filed the appropriate paperwork," [Rep.] Blackburn charged.

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iehi-feed-60315 Wed, 27 Jul 2016 19:42:57 GMT Fed Says Risks Have Diminished, Yet Leaves Rate Unchanged http://hf-implode.com/viewnews/2016-07-27_FedSaysRisksHaveDiminishedYetLeavesRateUnchanged.html "Near-term risks to the economic outlook have diminished," the Federal Open Market Committee said in its statement Wednesday after a two-day meeting in Washington, before repeating language from June that the panel "continues to closely monitor" inflation and global developments. Job gains were "strong" in June and indicators "point to some increase in labor utilization in recent months," the Fed said.

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"It's kind of an upbeat statement, although guarded," said Roberto Perli, partner at Cornerstone Macro LLC in Washington and former associate director for monetary affairs at the Fed Board. "It's a sign of a little bit of confidence, if you want, in the outlook going forward."

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Data since the Fed's June meeting indicate "that the labor market strengthened and that economic activity has been expanding at a moderate rate," the Fed said. The statement contained three references to recent improvement in the labor market.

The market seems to be wondering why the Fed didn't hike if the data is looking so good... the read might be that this is confirmation that, "yes, the Fed is constrained by the dollar"...

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iehi-feed-60311 Wed, 27 Jul 2016 13:36:35 GMT Shadow banking understates overall China leverage, Moody's says http://hf-implode.com/viewnews/2016-07-27_ShadowbankingunderstatesoverallChinaleverageMoodyssays.html iehi-feed-60310 Wed, 27 Jul 2016 13:35:07 GMT Deutsche Bank's second-quarter net income plunges nearly 100% year-on-year http://hf-implode.com/viewnews/2016-07-27_DeutscheBankssecondquarternetincomeplungesnearly100yearonyear.html iehi-feed-60309 Wed, 27 Jul 2016 13:33:13 GMT Japan PM unveils $266 bn stimulus plan to boost economy http://hf-implode.com/viewnews/2016-07-27_JapanPMunveils266bnstimulusplantoboosteconomy.html iehi-feed-60308 Tue, 26 Jul 2016 19:58:23 GMT "Low Credibility" Federal Reserve gets ready to talk policy http://hf-implode.com/viewnews/2016-07-26_LowCredibilityFederalReservegetsreadytotalkpolicy.html Despite chatter from central bank leaders and speculation from the financial press about looming hikes, the market is becoming pretty immune to Fed saber-rattling.

Indeed, just seven months ago, the Fed was prepping investors for four rate hikes this year. Now the market is pricing in only a 2.4 percent chance of a move this week and a fairly low likelihood farther down the road.

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Multiple Wall Street pros have been talking up September in recent days, but the market gives just a 19.9 percent probability of a hike then. December is about a coin flip, with traders anticipating a funds rate of 0.47 percent from the current 0.4 percent. The CME says that equates to a 47.8 percent chance.

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Fed officials, however, continue to insist that rate hikes will be appropriate sometime soon.

Maybe it's time to introduce a Fed moniker for the Trump era: "Low-Cred Fed"!!!

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iehi-feed-60307 Tue, 26 Jul 2016 19:50:00 GMT ‘Impending gold production cliff' may deliver a jolt to prices http://hf-implode.com/viewnews/2016-07-26_Impendinggoldproductioncliffmaydeliverajolttoprices.html iehi-feed-60306 Tue, 26 Jul 2016 19:45:47 GMT Wall Street banks "need" to catch a break http://hf-implode.com/viewnews/2016-07-26_WallStreetbanksneedtocatchabreak.html Allowing banks to free up more capital for things like home loans would be a boost for banks, and for the U.S. economy, he added. Many market watchers have expressed concern that big banks are being regulated into utilities -- that is to say, saddled with enough requirements and boxes to check that they would face low margins in virtually any economy.

But regulators, for now, look determined to head in the opposite direction, which would create additional pressure on Wall Street.

... not everyone thinks banks deserve a break. Christopher Whalen, senior managing director at the Kroll Bond Rating Agency, said the banks are in a mess of their own making.

"It's puzzling why banks and nonbanks have positioned for higher interest rates," he said. "The notion you should position for higher rates is downright reckless."

From the looks of it, Wall Street won't have its expectations met in the way of higher rates in 2016. It isn't even clear a rate hike is coming this year at all. If one doesn't happen, that likely would mean big banks will miss projected return-on-capital estimates.

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iehi-feed-60301 Tue, 26 Jul 2016 04:05:42 GMT Grant Williams on Peak Credit, Oil (Demand), and Gold (Supply); Trump and The Money Printing Endgame (Matterhorn Interview) http://hf-implode.com/viewnews/2016-07-26_GrantWilliamsonPeakCreditOilDemandandGoldSupplyTrumpandTheMoneyP.html Donald Trump is the self-professed king of debt, which is very apropos for the United States right now... He's come out and said, "No, no, no. We'll never have to default because we'll just print the money". This, to me, is something I've been waiting for, for quite some time now, and this is the fact that central banks have been able to print an extraordinary amount of money over the last eight years with optically no bad side effects. The inflation hasn't shown up that people were warning about price in the money printing game going. And my fear was always that that would embolden politicians who didn't really understand any of the nuance of this; they heard there was money printing going on, they were waiting for the bad effects to happen, they haven't seen them, so they think that this money printing thing works.

... Politicians don't understand these things for the most part. They're complicated ideas and they don't have demonstrable outcomes, the wheels that get set in motion when you do things like go to negative interest rates and print money start spinning very slowly and you don't really see what comes out of the machine for an indeterminate amount of time. We haven't seen it yet, but we will. There are no free lunches, but the very fact that the political class has seen this happen without any obvious ill effects has emboldened them and Trump... He thinks he understands debt and he will have no qualms about going deeper into debt.

At some point, however, the question of faith in the finances of the US Government, faith in the quality of the dollar are going to be raised again by the market in general, and when that time comes, it's very hard to see how there is a solution to calm any nervousness that people have around the dollar without some significant pain being felt. There is a storm coming. There is no two ways about it, and I think if people pay attention, you will have heard recently some really significant names starting to express the fears they have. Guys like Carl Icahn, guys like Stan Druckenmiller have been very outspoken about how concerned they are for what's happening. And if you listen to those things carefully and you understand that these guys are some of the smartest investors in the world, if guys like that are getting out of equities, getting into gold, getting into cash, there are very good reasons for that, and the average investor in the street should be listening to that and trying to understand why the smartest investors in the world are thinking that way because it's extremely important to try and understand.

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iehi-feed-60300 Tue, 26 Jul 2016 03:45:21 GMT Hillary Clinton Is In Deep Trouble: "Hordes Of Wall Street Executives" Descend Upon Philly http://hf-implode.com/viewnews/2016-07-25_HillaryClintonIsInDeepTroubleHordesOfWallStreetExecutivesDescend.html iehi-feed-60298 Tue, 26 Jul 2016 01:13:36 GMT Fed Readies Enforcement Action Against Goldman Sachs in Theft of Secrets http://hf-implode.com/viewnews/2016-07-25_FedReadiesEnforcementActionAgainstGoldmanSachsinTheftofSecrets.html The planned action, reported earlier by the New York Times, shows the Fed is advancing its own investigation into the incident, in which confidential regulatory materials were leaked to a Goldman staffer from one of his former colleagues at the Federal Reserve Bank of New York. The Fed last year permanently banned from the banking industry the former Goldman staffer who obtained the sensitive documents, and the central bank is now expected to pursue a similar ban for that staffer's former supervisor.

The leak was a black eye for the central bank because it raised fresh questions about the so-called revolving door between the regulator and Wall Street after much criticism in the wake of the financial crisis that the Fed was too lenient on big banks. Since the incident, the Fed has been weighing new measures to tighten the restraints it imposes on bank examiners who leave for jobs with financial institutions.

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The Fed is expected to seek to ban former Goldman executive Joseph Jiampietro from the banking industry. Mr. Jiampietro was fired by Goldman in October 2014, and his most recent role was as a managing director in the investment-banking division.

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A spokeswoman for Goldman said that when the firm discovered the sensitive documents had been obtained, it began its own investigation, terminated the employees implicated and changed its hiring practices for former government employees.

The Fed in November permanently banned from the industry Rohit Bansal, the Goldman employee who got the secrets while working under Mr. Jiampietro

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The Fed didn't fine Goldman when it discovered the theft, but the bank paid $50 million to settle charges last year from the New York State Department of Financial Services that it failed to properly supervise Mr. Bansal. A DFS spokesman declined to comment.

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iehi-feed-60297 Mon, 25 Jul 2016 19:17:30 GMT Risks to U.S. Financial Stability Increase After Brexit: FSOC Report http://hf-implode.com/viewnews/2016-07-25_RiskstoUSFinancialStabilityIncreaseAfterBrexitFSOCReport.html The U.K. decision to split from the 28-member bloc "surprised financial markets and was a negative shock to investor confidence," said Richard Berner, director of the Office of Financial Research, the research arm of the Financial Stability Oversight Council. He said the vote ushers in "months or years of uncertainty" over rules tied to the U.K.'s investment, financing and trade relations with Europe and the rest of the world.

Despite the ability of U.S. markets to recover from the initial shock of a market selloff, persistent concerns remain as the U.K. decides "if, how and when" to leave the EU, Mr. Berner said in a briefing with reporters. Possible spillover effects, he said, could jolt the broader financial system, including U.S. banks and nonbanks such as life insurers and broker-dealers.

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iehi-feed-60295 Mon, 25 Jul 2016 17:21:38 GMT IceCap Asks What Happens When The Bond Bubble Finally Pops http://hf-implode.com/viewnews/2016-07-25_IceCapAsksWhatHappensWhenTheBondBubbleFinallyPops.html