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-60749 Tue, 27 Sep 2016 03:15:42 GMT Fact-Checking the First Presidential Debate http://hf-implode.com/viewnews/2016-09-26_FactCheckingtheFirstPresidentialDebate.html iehi-feed-60748 Mon, 26 Sep 2016 18:24:39 GMT Renminbi use surges in London in spite of Brexit http://hf-implode.com/viewnews/2016-09-26_RenminbiusesurgesinLondoninspiteofBrexit.html The new figures, reflecting bilateral business confidence and the renminbi's growing international use, showed London's renminbi-denominated business transactions in August were 60 percent higher than July's.

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[China Construction Bank] London celebrated the significant milestone of clearing 10 trillion yuan ($1.5 trillion) of transactions between June 2014, when it was appointed by PBOC to be London's official renminbi clearing bank, and August 2016.

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iehi-feed-60745 Mon, 26 Sep 2016 15:03:17 GMT Banking analyst Mike Mayo rips Wells Fargo CEO in a scathing note http://hf-implode.com/viewnews/2016-09-26_BankinganalystMikeMayoripsWellsFargoCEOinascathingnote.html iehi-feed-60744 Mon, 26 Sep 2016 14:58:46 GMT HBO's John Oliver Shreds Wells Fargo and John Stumpf http://hf-implode.com/viewnews/2016-09-26_HBOsJohnOliverShredsWellsFargoandJohnStumpf.html iehi-feed-60741 Mon, 26 Sep 2016 14:23:44 GMT Cracks showing in Germany's fragile truce with the ECB http://hf-implode.com/viewnews/2016-09-26_CracksshowinginGermanysfragiletrucewiththeECB.html "The big challenge for Mario Draghi will be to prepare the Bundestag and German public for a further easing of monetary policy," said Marcel Fratzscher, head of the DIW economic institute and a former senior official at the ECB.

That message is unlikely to go down well in Berlin. In addition to concerns about the distorting effects of QE on financial markets and the impact of low interest rates on German savers and insurers, the political landscape in Germany has become decidedly more toxic for the ECB over the past months.

With one year to go until the next federal election, the AfD has risen to a record high of 16 percent in national polls. On the defensive, Merkel's conservatives are desperate to shift the debate away from her increasingly unpopular stance on refugees.

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iehi-feed-60740 Mon, 26 Sep 2016 14:21:47 GMT Clueless Janet Paves the Way for Bigger Crash http://hf-implode.com/viewnews/2016-09-26_CluelessJanetPavestheWayforBiggerCrash.html iehi-feed-60739 Mon, 26 Sep 2016 14:19:20 GMT Economic Establishment Pans Trump Economic Plan http://hf-implode.com/viewnews/2016-09-26_EconomicEstablishmentPansTrumpEconomicPlan.html Establishment economists ranging from austere neoliberals to spendthrift Keynesians are united in branding Donald Trump's proposed economic policies as "disastrous."

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Trump's tax policies may well benefit very high-income households, but as Betsy McCaughey notes in the New York Post this week, they also reduce the federal income-tax rate for couples earning $50,000 or less to zero, and that tax-free threshold goes up if you add new child care tax deductions... the proposal to cut corporate income taxes to 15% from the current 35% is the "heart" of Trump's economic plan, and will do the most to repatriate production and encourage the business investment that will spur growth.

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And conservative analyst James Pethokoukis, a fellow at the American Enterprise Institute, labeled Trump's economic plan "a complete and utter joke" as he took the Republican nominee to task for potentially adding $2.6 trillion to $3.9 trillion to the national debt over the next 10 years -- even though the $9 trillion in debt added during the seven and a half years of the Obama administration has caused no detectable harm.

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iehi-feed-60738 Sun, 25 Sep 2016 18:08:40 GMT Former employees file class action against Wells Fargo http://hf-implode.com/viewnews/2016-09-25_FormeremployeesfileclassactionagainstWellsFargo.html Two former Wells Fargo & Co (WFC.N) employees have filed a class action in California seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, forced to resign or fired.

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Former employees Alexander Polonsky and Brian Zaghi allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short.

Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.

While executives at the top benefited from the activity, the blame landed on thousands of $12-per-hour employees who tried to meet the quotas and were often required to work off the clock to do so, the lawsuit said.

Employees with a conscience who tried to meet quotas without engaging in fraud were the biggest victims, losing wages, benefits and suffering anxiety, humiliation and embarrassment, the lawsuit said.

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iehi-feed-60737 Sun, 25 Sep 2016 18:03:36 GMT Whistleblowing Wells Fargo loan officer describes years of fraudulent, criminal culture in the bank http://hf-implode.com/viewnews/2016-09-25_WhistleblowingWellsFargoloanofficerdescribesyearsoffraudulentcri.html iehi-feed-60736 Sun, 25 Sep 2016 18:00:06 GMT Naked Shorts Can't Stay Naked Forever http://hf-implode.com/viewnews/2016-09-25_NakedShortsCantStayNakedForever.html And even with its market-maker exemption, Knight is required by SEC rules to eventually deliver the shares in a naked short transaction to the buyer and close out the trade... Instead of complying with the rule, however, DiIorio alleges that Knight circumvented it by manipulating an obscure process within the machinery of the nation's clearing system known as the "Obligation Warehouse.".. "They set up a shadow clearing system," DiIorio said.

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Time after time, DiIorio would isolate individual penny stocks and find UBS and Knight as major traders in them. While it wasn't possible to know for sure, the correlation suggested that UBS was repeatedly on the other side of Knight's trades; its clients would go long while Knight's would go short. If true, that meant UBS, or its clients, were taking on multitudes of losses by design.

Why was UBS so involved with penny stocks, which had little upside potential for a global megabank? Why was it so intertwined with Knight? Who was it purchasing these penny stocks for?

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iehi-feed-60735 Sun, 25 Sep 2016 17:43:30 GMT China Continues to Battle Massive Capital Flight Problem http://hf-implode.com/viewnews/2016-09-25_ChinaContinuestoBattleMassiveCapitalFlightProblem.html Any way you do the math, capital outflows from China continue to be massive. A large current account surplus continues to cushion a potential fall in reserves, but more seems to be happening for reserves to be stable. Looking deeper into the nature of outflows, one has to conclude that the situation remains fragile. It is still residents driving the outflows and they do not seem to be a "good cholesterol" type (i.e. repayment of debt or purchases of assets abroad).

Meanwhile, China hasn't fully resolved its balance-of-payments problem. The reserves are massive, but so are the "bad cholesterol" outflows. It is time to go to the doctor and increase the return on assets for capital to be willing to come back. Unfortunately, the Chinese authorities seem to be heading in the opposite direction, with increasingly lower interest rates and a lack of real reform for state-owned enterprises.

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iehi-feed-60734 Sun, 25 Sep 2016 17:39:19 GMT Merkel Says No Aid for Deutsche Bank; Derivatives And Fines Loom -- Depositor Bail-In Inevitable? http://hf-implode.com/viewnews/2016-09-25_MerkelSaysNoAidforDeutscheBankDerivativesAndFinesLoomDepositorBa.html iehi-feed-60733 Sat, 24 Sep 2016 16:19:52 GMT The Fed's Missed Window & Failed Realizations http://hf-implode.com/viewnews/2016-09-24_TheFedsMissedWindowFailedRealizations.html iehi-feed-60731 Sat, 24 Sep 2016 16:01:21 GMT IMF on Greece: calls for more pension cuts, greater debt relief in report http://hf-implode.com/viewnews/2016-09-24_IMFonGreececallsformorepensioncutsgreaterdebtreliefinreport.html The International Monetary Fund called for Greece to cut pensions and taxes and for its lenders to provide significant debt relief in order for the country to make a convincing exit from the crisis.

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It argued that the pension system's deficit remains too high at 11 percent, compared to a 2.5 percent average in the eurozone, and that too much of a burden has been placed on Greeks currently in work, while existing pensioners have largely been protected.

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iehi-feed-60730 Fri, 23 Sep 2016 23:30:27 GMT Former Trader Jérôme Kerviel Ordered to Pay Only €1 mln in Damages to SocGen (WHICH NOW MAY BE ON THE JOOK FOR ANOTHER €2.2bln) http://hf-implode.com/viewnews/2016-09-23_FormerTraderJrmeKervielOrderedtoPayOnly1mlninDamagestoSocGenWHIC.html A French appeals court ruled Friday that former trader Jérôme Kerviel is only responsible for a sliver of the €4.9 billion ($5.47 billion) Société Générale SA lost after unwinding his trades, raising the possibility the government might reclaim a hefty tax rebate it granted the bank at the time.

Judges ordered Mr. Kerviel to pay €1 million to his former employer, overturning a previous ruling which ordering him to pay €4.9 billion to Société Générale.

The ruling is a qualified victory for Mr. Kerviel and a setback for Société Générale, because it establishes that responsibility for the lion's share of the losses ultimately lies with the French lender, not its former employee.

... the French government could reclaim a €2.2 billion tax deduction that the bank received after unwinding Mr. Kerviel's trade and posting a massive loss... Jean Veil, a lawyer for Société Générale, brushed off the idea saying he didn't believe that the government could claim the money back given that the bank hadn't committed a "deliberate" or "excessive" fault.

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iehi-feed-60729 Fri, 23 Sep 2016 22:58:13 GMT ECB Embarrassment: Each €18 In QE Generated Just €1 In GDP Growth http://hf-implode.com/viewnews/2016-09-23_ECBEmbarrassmentEach18InQEGeneratedJust1InGDPGrowth.html iehi-feed-60728 Fri, 23 Sep 2016 19:10:36 GMT Exclusive: Euro Regulators expect Monte dei Paschi to ask Italy for help http://hf-implode.com/viewnews/2016-09-23_ExclusiveEuroRegulatorsexpectMontedeiPaschitoaskItalyforhelp.html Now euro zone authorities are considering whether state support would have to be tapped after what bankers have described as slack interest in the bank's share offer.

"There is clearly an execution risk to the capital raising," said one official with knowledge of the rescue attempt, adding that the bank's value, about one ninth the size of the planned 5 billion euro cash call, would be a turn-off for investors.

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Reopening the question of state support, which had already been explored and dropped because of the losses it requires for bondholders under European bank crisis rules, is politically charged, and would reignite a dispute between Italy and Germany.

Berlin had objected to Rome's efforts to back the struggling bank without imposing a loss on its bondholders, according to another senior official.

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iehi-feed-60727 Fri, 23 Sep 2016 19:07:01 GMT You're Not as Rich as You Think - Satyajit Das http://hf-implode.com/viewnews/2016-09-23_YoureNotasRichasYouThinkSatyajitDas.html iehi-feed-60722 Fri, 23 Sep 2016 15:11:08 GMT The 9 Most Important Things You Need To Know About The Wells Fargo Fiasco http://hf-implode.com/viewnews/2016-09-23_The9MostImportantThingsYouNeedToKnowAboutTheWellsFargoFiasco.html Stumpf's mantra to employees was often "eight is great" meaning get eight Wells Fargo products into the hands of each customer. But this directive proved burdensome for bank employees as they struggled to meet demanding quotas and satisfy even more demanding managers. 

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Stumpf, however, is unlikely to lose his job. Analysts and investors on Wall Street are more forgiving of Stumpf than their Main Street and DC counterparts. Many are pointing to Wells Fargo's "superior" return in the market as reason Stumpf should stick around.

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iehi-feed-60720 Thu, 22 Sep 2016 19:42:08 GMT Taking Responsibility: Wells Fargo's Stumpf "Leads the Way" http://hf-implode.com/viewnews/2016-09-22_TakingResponsibilityWellsFargosStumpfLeadstheWay.html ... thousands of employees who engaged in the actual act of creating the fraudulent charge accounts have all been fired by the bank, no doubt at Stumpf's direction. They took a substantial paycut for their criminal behavior, which one might say is a kind of "taking responsibility" for what they did, though perhaps they didn't do it voluntarily.

But Stumpf? While he clearly turned a blind eye to the scam for five years until the federal authorities got wind of it, once it became public knowledge outside the bank, he stood up and said he "takes responsibility" for what happened. Not just that. He said he's "accountable" for it. Good man!''

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