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-61235 Mon, 05 Dec 2016 15:30:06 GMT Greece must reform or leave eurozone, says Germany's Schäuble http://hf-implode.com/viewnews/2016-12-05_GreecemustreformorleaveeurozonesaysGermanysSchuble.html ``"Athens must finally implement the needed reforms," he told the newspaper Bild am Sonntag in an interview published on Sunday. "If Greece wants to stay in the euro, there is no way around it -- in fact completely regardless of the debt level."

Asked if German voters should be prepared for the inevitability of debt relief in the run-up to national elections next year, Schäuble quipped: "That would not help Greece."''

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iehi-feed-61233 Mon, 05 Dec 2016 15:16:42 GMT Italian vote against the elites could shatter Europe http://hf-implode.com/viewnews/2016-12-05_ItalianvoteagainsttheelitescouldshatterEurope.html The danger for Italy now is that a string of unpredictable outcomes -- ranging from a difficult-to-control euro decline to a run on troubled Italian banks and a further loss of credibility of the European Central Bank -- could ensue. With the main opposition parties that backed the "no" vote all declaring their wish to leave the euro , and antiestablishment groupings gaining ground in other important member countries including France, European fragmentation is plainly accelerating.

The Italian "no" could have a similar impact on Europe to that unleashed by President Charles de Gaulle's resignation in April 1969 when, in a referendum, voters turned down his plans for constitutional changes. De Gaulle's departure helped spark a chain of events that led to a devaluation of the French franc against the Deutsche mark, the entry of the U.K. into the European Economic Community, and the breakdown of the Bretton Woods system of fixed exchange rates.

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iehi-feed-61231 Mon, 05 Dec 2016 00:39:23 GMT Italy's PM Renzi cedes defeat, plans to resign after decisive ‘No' vote in constitutional referendum http://hf-implode.com/viewnews/2016-12-04_ItalysPMRenzicedesdefeatplanstoresignafterdecisiveNovoteinconsti.html ``Italian Prime Minister Matteo Renzi says he takes full responsibility for the crashing defeat at the referendum he proposed, which would have reduced the powers of the Senate. Renzi intends to send in his resignation on Monday.

"The experience of my government ends here," Renzi said in a televised news conference, adding that his defeat was "extraordinary clear."

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The European Central Bank also meets Thursday amid much speculation it will announce a six month extension of its asset buying program and widen the type of bonds it can purchase.

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iehi-feed-61230 Mon, 05 Dec 2016 00:09:57 GMT Euro dives as Italy votes 'No' on reform, shares slip http://hf-implode.com/viewnews/2016-12-04_EurodivesasItalyvotesNoonreformsharesslip.html The euro sank to 20-months lows in Asia on Monday after Italian Prime Minister Matteo Renzi said he would resign in the wake of a stinging defeat on constitutional reform that could destabilize the country's shaky banking system... Ultimately, the danger is that Italy holds a vote on whether to leave the euro, possibly triggering a break up of the entire bloc.

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The European Central Bank also meets Thursday amid much speculation it will announce a six month extension of its asset buying program and widen the type of bonds it can purchase.

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iehi-feed-61228 Sun, 04 Dec 2016 23:44:58 GMT Larry Summers Blasts Trump's Carrier Deal As "Ad Hoc Deal Capitalism" http://hf-implode.com/viewnews/2016-12-04_LarrySummersBlastsTrumpsCarrierDealAsAdHocDealCapitalism.html wants banana republic-like tactics...]]> iehi-feed-61225 Sun, 04 Dec 2016 19:28:02 GMT Far-right candidate concedes in Austria's presidential vote (ALL EYES TURN TO ITALY) http://hf-implode.com/viewnews/2016-12-04_FarrightcandidateconcedesinAustriaspresidentialvoteALLEYESTURNTO.html The center-left candidate handily defeated his far-right challenger in Austria's presidential election on Sunday, boosting the political establishment in Europe as it sought to contain the fallout of Donald Trump's victory in the United States and thwart the spread of nationalism.

The far-right Freedom Party's Norbert Hofer conceded defeat on his Facebook page less than 30 minutes after polls closed and following projections showing a surprisingly strong lead for Alexander Van der Bellen. The 72-year-old elder statesman and former Green Party politician was winning by 53.3 percent to 46.7 percent with nearly 100 percent of the votes counted.

The result was an unexpectedly clear victory for Austria's beleaguered political establishment -- one suggesting the aggressive tactics and Trump-style campaign deployed by the Austrian far-right may have hurt more than they helped.

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Yet Europe's political establishment was not out of the woods yet. In Italy, voting continued on a reform referendum opposed by anti-establishment populists across the political spectrum. Center-left Prime Minister Matteo Renzi has vowed to resign should it fail -- a move that could plunge Europe's third largest economy into a new round of political chaos while fanning fresh concerns about the country's ailing banks. Opinion polls have suggested the result may be a nail biter.

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iehi-feed-61224 Sun, 04 Dec 2016 19:21:23 GMT Will Trump's band of billionaires care about regular folk? http://hf-implode.com/viewnews/2016-12-04_WillTrumpsbandofbillionairescareaboutregularfolk.html Teena Colebrook is despondent that Trump has picked Steve Mnuchin for Treasury because Mnuchin was the head of a group of investors who owned OneWest, a bank that foreclosed on Colebrook's Los Angeles-area home.  She tried to work with the bank to modify her loan, she told the AP, but the bank lost some of her paperwork and was generally difficult to deal with. "I just wish that I had not voted," she said. "I have no faith in our government anymore at all. They all promise you the world at the end of a stick and take it away once they get in."

What fascinates me is why Colebrook ever believed that Trump's heart bleeds for struggling people.  Two years before the housing crash that eventually cost Colebrook her home, Trump  openly longed for the kind of housing crash that would cost people their homes.

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Now, according to a Wednesday report in The Washington Post, Trump is putting together the "wealthiest administration in modern American history." People thought George W. Bush had a wealthy administration, the report says, but the Bush administration's combined net worth of about $250 million is "roughly one-tenth the wealth of Donald Trump's nominee for commerce secretary alone."

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iehi-feed-61223 Sun, 04 Dec 2016 15:33:43 GMT Debunking GFMS' Gold Demand Statistics - Koos Jansen http://hf-implode.com/viewnews/2016-12-04_DebunkingGFMSGoldDemandStatisticsKoosJansen.html iehi-feed-61222 Sun, 04 Dec 2016 14:56:11 GMT A Big Swirling Italian Mess http://hf-implode.com/viewnews/2016-12-04_ABigSwirlingItalianMess.html Coming up with an answer isn't necessarily helpful when you can't even agree on the question. However Italians vote, it may take some time to figure out exactly what the result means to Italy, the Eurozone, the EU, and the global economy. I am fairly confident that the ultimate outcome won't be good, no matter what they choose. The problems are deeper than simple structural reform can cure.

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The entire Italian system is being propped up by the European Central Bank's (ECB) buying of Italy's bonds as part of its overall quantitative easing project. There is a significant revolt involving many members of the ECB who want to scale back if not all together halt the QE program. That would remove the prop from Italian bonds, and their yields would soar back to the 6 to 7% range.''

Good tour-de-force article by Mauldin.

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iehi-feed-61220 Sat, 03 Dec 2016 23:23:27 GMT No Overstatement: Structural Unemployment Is the Biggest Economic Threat http://hf-implode.com/viewnews/2016-12-03_NoOverstatementStructuralUnemploymentIstheBiggestEconomicThreat.html ``The fact that the labor force participation rate is falling at the same time the unemployment rate is falling indicates that that there is a structural problem in the economy... [the] process is accelerating as technological advances are enabling the replacement of all kinds of human labor at a faster rate than new job opportunities are being created.

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The net result is that an increasing percentage of the population is no longer economically viable. What's more, this condition is not going to be reversed by regulatory, tax, and fiscal policy changes at the federal level, intended to prevent domestic U.S. companies from offshoring jobs, as is being proposed by President-elect Trump.

... The trajectory I outlined for -- when the U.S. economic system can no longer function and thus collapses, which occurs when the percentage of the population that is employed in the private sector dips below 25% and is absolute at 20% -- has continued since then.

What we think analyses like these miss is that monetary dysfunction is as important -- if not more important -- than "accelerating technology" to the problem of an increasingly idle population. That is, the core gears of capitalism, and in particular, creative destruction, are gummed up (if not absent entirely), in our completely bizarre and dysfunctional monetary and banking system. If this were fixed, we might have little to no structural unemployment problem at all, as the market would be more able to create new opportunities. Regardless of how significantly this factor is, it seems virtually suicidal for an economy and society not to fix it before proceeding to more elaborate interventions.

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iehi-feed-61219 Sat, 03 Dec 2016 17:56:51 GMT Government Bond & Mortgage "Meltdown" Crushes NIRP http://hf-implode.com/viewnews/2016-12-03_GovernmentBondMortgageMeltdownCrushesNIRP.html While global stocks rallied in November, the gains -- $635 billion -- were outright puny compared to the $1.7 trillion wiped out in the much larger bond markets.

On Thursday it got worse. It started in Europe where government bonds got crushed after speculation surfaced that the ECB might not keep buying bonds until hell freezes over, that in fact it might begin tapering its QE program as soon as next year. The markets were aghast.

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In terms of dollars and cents, the CME CBOT 30-Year US Treasury Bond Price Index has now lost 8.5% since Election Day, and 14.8% since July. This is a bitterly ironic twist for those investors who consider them among the most conservative investments in the world...

This bond market "carnage" is accomplishing something else: It's gutting negative yields -- and all those who've bought these bonds when yields were at their most negative.

This post also excellently illustrates the "contagion" aspect -- the breakdowns are illustrating the disturbing extent that bond markets had also been all floating on the same pool of global QE/NIRP on the way up (as we've been pointing out on this site for years now), giving lie to the claim that one region and market is "doing fine" even with another region or two engaging aggressively in QE to keep the game going.

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iehi-feed-61217 Sat, 03 Dec 2016 17:13:08 GMT Deutsche Bank Pays $60 Million To Settle Gold-Manipulation Lawsuit http://hf-implode.com/viewnews/2016-12-03_DeutscheBankPays60MillionToSettleGoldManipulationLawsuit.html ... last night, two months after the silver settlement, Deutsche Bank agreed to pay another $60 million to settle the other side of the antitrust litigation: that of rigging the gold market... the preliminary settlement was filed on Friday with the U.S. District Court in Manhattan, and requires a judge's approval. As part of the settelement, Deutsche Bank has denied any wrongdoing, and with the two settlements, and some $98 million out of pocket, it is clear of any future liability regarding precious metals manipulation.

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As we reported previously, in an Oct. 3 decision, U.S. District Judge Valerie Caproni in Manhattan said investors could pursue much of their lawsuit against the other four banks named in the anti-trust lawsuit which include Barclays, Bank of Nova Scotia, HSBC and Societe Generale.

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iehi-feed-61216 Sat, 03 Dec 2016 15:45:04 GMT Italian bourse CEO says there are 'colossal' short positions on Italy in advance of referendum http://hf-implode.com/viewnews/2016-12-03_ItalianbourseCEOsaystherearecolossalshortpositionsonItalyinadvan.html iehi-feed-61211 Sat, 03 Dec 2016 00:24:57 GMT China, Grappling With Trump, Turns to ‘Old Friend' Kissinger http://hf-implode.com/viewnews/2016-12-02_ChinaGrapplingWithTrumpTurnstoOldFriendKissinger.html The 93-year-old former secretary of state, who secretly brokered President Richard Nixon's watershed visit in 1972, returned to Beijing to meet with state leaders Friday, just two weeks after huddling with Trump in New York. While little about Kissinger's closed-door talks has been disclosed, Chinese officials are trying to assess whether the incoming administration will prompt greater confrontation over trade and territory disputes, as Trump promised on the campaign trail.

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"The U.S. and China are going to have to establish some channels, but that is going to take time," said Tim Summers, a Hong Kong-based senior consulting fellow for Chatham House. Summers said that Xi, unlike Japanese Prime Minister Shinzo Abe, "is not going drop into Trump Tower en route somewhere else. So, we are in for a period of U.S.-china uncertainty, along with all the other issues up in the air at the moment."

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iehi-feed-61210 Fri, 02 Dec 2016 22:28:56 GMT Indian ‘Gold Ban' a Portent of Major Events? http://hf-implode.com/viewnews/2016-12-02_IndianGoldBanaPortentofMajorEvents.html iehi-feed-61209 Fri, 02 Dec 2016 18:26:27 GMT Americans Not In The Labor Force Soar To Record 95.1 Million, Driving Headline Unemployment Rate Fall http://hf-implode.com/viewnews/2016-12-02_AmericansNotInTheLaborForceSoarToRecord951MillionDrivingHeadline.html this report that average hourly earnings are actually slightly down on the month, belying alleged strength...)]]> iehi-feed-61207 Fri, 02 Dec 2016 02:37:59 GMT UK could pay EU for access to single market, ministers admit http://hf-implode.com/viewnews/2016-12-01_UKcouldpayEUforaccesstosinglemarketministersadmit.html iehi-feed-61206 Fri, 02 Dec 2016 02:25:02 GMT Largest US Bitcoin Exchange Ordered To Disclose Three Years Of User Data To IRS http://hf-implode.com/viewnews/2016-12-01_LargestUSBitcoinExchangeOrderedToDiscloseThreeYearsOfUserDataToI.html Despite the order, Coinbase has vowed to continue the fight: "We look forward to opposing the DOJ's request in court after Coinbase is served with a subpoena," a spokesman for the San Francisco-based company said in an email to Reuters.

Coinbase remains concerned with its U.S. customers' privacy rights in the face of the government's request, he added, although he is likely far less concerned than any people who used Coinbase from 2013 to 2015, and who may soon be getting a visit from the taxman, even if they have done nothing illegal. As for the myth that trading bitcoin by ordinary Americans provides some additional layer of privacy, that is about to be thoroughly debunked.

This order is almost unbelievably broad -- it's comparable to an order demanding bank client identities and transactions because the transactions might entail unreported taxable gains (of course, there are already other forms of regulatory surveillance on banks). The until-recently-ongoing NSA warrantless wiretapping program revealed by Snowden is the closest parallel we can think of.

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iehi-feed-61203 Thu, 01 Dec 2016 22:58:35 GMT Sanders: Donald Trump 'Has Endangered' U.S. Jobs With Carrier Deal http://hf-implode.com/viewnews/2016-12-01_SandersDonaldTrumpHasEndangeredUSJobsWithCarrierDeal.html The former Democratic presidential candidate ripped the apparent terms of the deal in an op-ed for The Washington Post. "Trump has endangered the jobs of workers who were previously safe in the United States," Sanders wrote. "Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives."

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Trump's deal apparently saves less than half of the total jobs, the rest of which will still be going to Mexico.

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And as Sanders noted in the op-ed, Trump promised during the campaign to threaten Carrier with tariffs on products it would import into the United States as a way of dissuading them from offshoring the jobs ― rather than giving them tax relief as an incentive to stay.

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iehi-feed-61201 Thu, 01 Dec 2016 22:47:27 GMT Trump's Tax Cut Means Billion-Dollar Writedowns for U.S. Banks http://hf-implode.com/viewnews/2016-12-01_TrumpsTaxCutMeansBillionDollarWritedownsforUSBanks.html Donald Trump's planned U.S. corporate tax cuts could translate to a big one-time earnings hit for many of the biggest U.S. banks, thanks to tax benefits they generated during the 2008 financial crisis... The banks might have to write down deferred tax assets, which often pile up when a company loses money and can't immediately enjoy the tax benefits of those losses.

... Citigroup Inc. would take the deepest earnings hit -- perhaps $12 billion or more, according to recent estimates by the bank's chief financial officer and several banking analysts. Mark Costiglio, a Citigroup spokesman, declined to comment. Others, including Bank of America Corp. and Wells Fargo & Co. could face multibillion-dollar writedowns.

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At a 25 percent rate, Citigroup would be required to lower its earnings by $6 billion to reflect the reduced value of its tax-deferred assets, John Gerspach, the bank's chief financial officer, told investors at a conference hosted by Bank of America on Nov. 16.

But that could change if a Republican call for exempting overseas corporate earnings from U.S. taxation is enacted as part of the tax overhaul. Under that scenario, Gerspach said, Citigroup would have to write down as much as $12 billion -- because a large part of its deferred tax assets consist of unused foreign tax credits.

Calculations by Brian Kleinhanzl, a financial-sector analyst at KBW, show that at a 25 percent corporate tax rate, Bank of America would face a $6.6 billion writedown, while Wells Fargo's would be $4 billion. Goldman Sachs Group Inc.'s would be $1.6 billion, according to KBW's estimates.

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The implications might also reach mortgage giants Fannie Mae and Freddie Mac, which could see write downs of $10 billion and $5.4 billion respectively, according to a Nov. 27 KBW research note. Those hits would be large enough to potentially require both of them to seek a new infusion of money from the Treasury Department, the note said.

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