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Tracking the many faces of the global credit implosion. You can pull sub-categories from this feed by adding a ?tags=a,b,c,... style parameter. The category tags (which can be given as numbers or handles) are : id handle category description 1 housing_finance "Housing Finance News/ML-Implode Main" 2 hedge_funds "Hedge Funds News" 3 fed "The Fed, Central Banking and fin. reg." 4 foreclosures "Foreclosures (News)" 5 chavez "Hugo Chavez Watch (News)" 6 builders "Home Builders News" 7 banks "Banks News" 8 credit_bubble "Credit Bubble and Crash (News)" 9 peak_oil "Peak Oil and Energy Security (News)" 10 BRIC_v_us "BRIC countries vs. U.S. (News)" 11 gov_bk "Government Bankruptcy (News)" 12 mediawatch "Mainstream Media Watch" 13 Our commentary "IEHI Original Commentary" 14 rebalancing "Economic Rebalancing (News)" 15 pm "Precious Metals News" 16 inflation "Inflation and Deflation News" 17 nr "Natural Resources News" 18 consumer "Consumer Capitulation/Issues and Populism" 20 pe "Private Equity Implosion (News)" 21 recession "Recession/depression News" 22 ML_implosion "Mortgage Lender IMPLOSIONS" 23 HF_implosion "Hedge Fund IMPLOSIONS" 24 HB_implosion "Home Builder IMPLOSIONS" 25 Bank_implosion "Bank IMPLOSIONS" 26 ML_update "Mortgage Lender UPDATES" 27 HF_update "Hedge Fund UPDATES" 28 HB_update "Home Builder UPDATES" 29 Bank_update "Bank UPDATES" 30 RFWS "Radio Free Wall Street" 31 FHA "FHA and Mtg Regulation (News)" 32 martial_law "Martial Law/Big Brother/NWO Watch" 33 pension "Retirement Implosion (News)" 34 mtgindustry "Mortgage Industry (News)" 35 econlists "Econ insider lists" 36 iehi_fb "IEHI facebook feed" 37 robin_fb "robin facebook" 38 IEHItwitter "IEHI Twitter Feed" 39 ak_linkedin "akrowne LinkedIn (mtg industry)"
Updated: 1 hour 50 min ago

Our Miserable 21st Century

Sun, 02/26/2017 - 14:19
The very fact of Trump's election served as a truth broadcast about a reality that could no longer be denied: Things out there in America are a whole lot different from what you thought... In fact, things have been going badly wrong in America since the beginning of the 21st century.

It turns out that the year 2000 marks a grim historical milestone of sorts for our nation. For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then--and broke down very badly.

The warning lights have been flashing, and the klaxons sounding, for more than a decade and a half. But our pundits and prognosticators and professors and policymakers, ensconced as they generally are deep within the bubble, were for the most part too distant from the distress of the general population to see or hear it. (So much for the vaunted "information era" and "big-data revolution.") Now that those signals are no longer possible to ignore, it is high time for experts and intellectuals to reacquaint themselves with the country in which they live and to begin the task of describing what has befallen the country in which we have lived since the dawn of the new century.

... In some circles people still widely believe, as one recent New York Times business-section article cluelessly insisted before the inauguration, that "Mr. Trump will inherit an economy that is fundamentally solid." But this is patent nonsense. By now it should be painfully obvious that the U.S. economy has been in the grip of deep dysfunction since the dawn of the new century. And in retrospect, it should also be apparent that America's strange new economic maladies were almost perfectly designed to set the stage for a populist storm.

Taiwan Plans To Restrict Cash Purchases In "Criminal Crackdown"

Sun, 02/26/2017 - 12:54
``"With the goal of strengthening the prevention and control of money laundering, Taiwan's Ministry of Justice plans to promote large-scale transactions without cash. The first wave may lock real estate, luxury cars and jewelry transactions," he said. The main impetus behind the move is allegedly to crack down on criminal activity and money laundering.''

Netherlands holds probe into whether to ditch euro

Sun, 02/26/2017 - 10:53
Politicians in the Netherlands have commissioned a report into whether or not the country should keep the euro, with a "comprehensive debate" on the country's future relationship with the currency expected to take place after the general election next month... calls for the report were prompted by concerns the European Central Bank's (ECB) ultra-low interest rates were hurting Dutch savers, especially pensioners, and doubts as to whether its bond purchasing programmes are legal.

Its findings will be presented in several months, by which time the make-up of parliament will have changed dramatically following the election... While most Dutch voters say they favour retaining the euro, the eurosceptic far-right party of Geert Wilders is expected to book large gains, though it is unlikely to win enough votes to form a government.''

Malls face more change with JCPenney closings

Sun, 02/26/2017 - 10:48
``... a focal point of the American shopping mall, but as brick-and-mortar retail has struggled and consumerism has evolved following the Great Recession, that's not the case anymore. Now, really, all they're doing is keeping these malls anchored in the past... stronger retailers don't necessarily want to bite at a desolate indoor property when consumers are more interested in shopping at mixed-use, lifestyle centers where they can live, work and play. ''

Half of Germans oppose debt relief for Greece (AND A THIRD WANT IT OUT OF EURO)

Sun, 02/26/2017 - 10:45
``Around half of Germans are against granting debt relief to Greece and around three in 10 want it to quit the eurozone, a survey showed on Friday. ''

Investors in America's housing-finance giants lose in court

Sun, 02/26/2017 - 09:43
At issue is the Obama administration's decision in 2012 to hoover up all of Fannie and Freddie's profits. Until then, it had received a fixed dividend on its investment. The timing of the shift was striking--just before a surge in the firms' profitability. Since 2008 the Treasury has sucked in about $250bn from the firms, 30% more than the cost of the bail-out.

The change enraged hedge funds who had bought Fannie and Freddie's shares and found themselves expropriated. The investors' lawsuit held that the government overstepped its authority by seizing all profits. A federal court dismissed that claim in 2014; it has taken until now for an appeals court to uphold the most important parts of the decision. An odd aspect of the ruling is that it largely ignored the substantive arguments but concluded the court lacked the authority to curb the government's actions.


The firms are hardly robust. The Treasury is running down their capital by $600m a year. By 2018 they will have none left. From then on, should the firms make a loss, they will need to draw on an emergency line of credit from the government. Doing so would be characterised by some as a second bail-out.

President Trump Must Replace The Dollar With Gold As The Global Currency To Make America Great Again

Sun, 02/26/2017 - 08:54
... if President Trump wishes to address America's merchandise trade deficit he will find that allowing the dollar to be used as the global currency is the real snake in the economic woodpile.  The dollar's burden as the international reserve currency, not currency manipulation by our trading partners or bad treaties, is the true villain in the ongoing melodrama of crummy job creation.


To turn the IMF into a world central bank would, of course, be anathema to Trump's economic nationalism. To subordinate the dollar to the IMF's SDR would be equivalent to lowering Old Glory and replacing the American flag with the flag of the United Nations on every flagpole in America. Unthinkable under a Trump administration.

That leaves the [final] option, to "adopt a modernized international gold standard, as proposed in the 1960s by Rueff and in 1984 by his protégé Lewis E. Lehrman ... and then-Rep. Jack Kemp" (whose eponymous foundation I advise). To this one should add, as contributor Nathan Lewis has shrewdly observed, the removal of tax and regulatory barriers to the use of gold as currency... We have the gold. Bringing back the gold standard would not be very hard to do.

The Fiscal Horror Show Playing Soon in Washington - David Stockman

Sat, 02/25/2017 - 10:22
``... once the tax collection season ends in April, it will be Katie-bar-the-door time on the debt ceiling front. When the latter becomes frozen into place on March 15 after the insidious Boehner-Obama debt ceiling "holiday" expires, there will not be enough cash to last the summer -- even if the Treasury resorts to the usual gimmicks, such as temporarily divesting the trust funds... What is coming down the track is the mother of all debt ceiling showdowns and the virtual certainty of government shutdowns and deferred payments to states, contractors and even some transfer payment beneficiaries.... The boys and girls on Wall Street are so unprepared for this outbreak of fiscal mayhem that they will think that Halloween has come before Labor Day.''

Toronto Housing Market May Need Vancouver-Style Cooling, RBC Says

Sat, 02/25/2017 - 08:47
Toronto may require measures to cool its red-hot housing market similar to moves taken in Vancouver if interest rates don't increase, said Royal Bank of Canada Chief Executive Officer David McKay.

The head of Canada's largest lender said Toronto housing is "running hot" and is fueled by a "concerning mix of drivers" that include lack of supply, continued low rates, rising foreign money and speculative activity. Similar circumstances in Vancouver prompted British Columbia's government last year to impose a 15 percent tax on foreign buyers.


The comments from the bank CEO come as frustration grows over the unaffordability of properties in Canada's biggest city. The average home price in Toronto jumped 22 percent in January from the previous year, the fifth straight month of gains topping 20 percent. Listings have dropped off, down by half from last year, squeezing prices further.


Since the tax was imposed in Vancouver, monthly transactions in the metro region fell on average by 36 percent compared to a year earlier, according to data from the Real Estate Board of Greater Vancouver. Prices for prized single-family detached homes had been rising in double digits last year. In the past six months, they've fallen 6.6 percent to an average C$1.47 million, according to board figures released earlier this month.

DHS: Trump's 7-country travel ban justification is bogus

Sat, 02/25/2017 - 08:46
`` Analysts at the Homeland Security Department's intelligence arm found insufficient evidence that citizens of seven Muslim-majority countries included in President Donald Trump's travel ban pose a terror threat to the United States. A draft document obtained by The Associated Press concludes that citizenship is an "unlikely indicator" of terrorism threats to the United States and that few people from the countries Trump listed in his travel ban have carried out attacks or been involved in terrorism-related activities in the U.S. since Syria's civil war started in 2011.''

Deutsche Bank: How France scrapping the euro could go beyond a `Lehman moment'

Fri, 02/24/2017 - 18:13
Le Pen has relied on [comparisons to the mild market reaction to Brexit] as a basis for rallying support during her campaigning, saying: "They told us that Brexit would be a catastrophe, that the stock markets would crash ... The reality is that none of that happened."... "Make no mistake, there is the world of difference between tearing up bilateral and multilateral trade agreements, and, unwinding a monetary union as far reaching in scope as the EMU (economic and monetary union) project," Deutsche Bank said in a note Tuesday. "It is the difference between a benign global risk event and something that has the potential to go beyond a 'Lehman's moment'.


Investment bank Lehman Brothers is responsible for the U.S.'s largest ever bankruptcy filing, triggering the start of the 2008 financial crisis. It held assets of $600 billion -- a fraction of the estimated $46 trillion at risk under a break-up of the EMU.

While central banks could be expected to step in to secure the system, as they did during the 2008 crash, the long lead times and multiple legal obstacles of an EMU break-up would do little to manage the immediate aftermath of such a wide-reaching crash, said Deutsche Bank.


The likelihood of a French referendum on its membership of the EU was called further into question Wednesday when independent candidate Emmanuel Macron, who is currently seen in second place to Le Pen in first round opinion polls, formed an alliance with Democratic Movement leader Francois Bayrou.

Odey: Trump Will Introduce a VAT; Spur 7% Inflation

Fri, 02/24/2017 - 18:11
``(Trump) will propose a version of VAT as we have it in Europe. He may propose a 20% rate. It will be a Federal tax. Why VAT? Because exports are exempt from VAT. It will make all goods covered by VAT 20% more expensive, but it will mean tha t exports become 20% cheaper than imports. To cries of ‘this will be so unpopular hurting the little man', my reply is that with the US at full employment, these costs will be passed on in full. Also, remember that in Europe where VAT is now 20%, actual tax collected is only 7% of GN P (i.e. only 35% of the economy is paying this tax). He will sell it to his supporters because he will explain that foreign imports are disproportionately affected by this tax. It will bring in $1.2 trillion, which he then must spend to keep the economy going. He will spend this on a combination of corporate tax cuts, capital spending incentives and infrastructure programmes.''

In sweeping move, Trump puts regulation monitors in U.S. agencies (IT WON'T WORK)

Fri, 02/24/2017 - 17:40
President Donald Trump signed an executive order on Friday to place "regulatory reform" task forces and officers within federal agencies in what may be the most far reaching effort to pare back U.S. red tape in recent decades.


The sweeping order directs every federal agency to establish a task force to ensure each has a team to research all regulations and take aim at those deemed burdensome to the U.S. economy and designate regulatory reform officers within 60 days and must report on the progress within 90 days.

"Excessive regulation is killing jobs, driving companies out of our country like never before," Trump said before signing the order. "Every regulation should have to pass a simple test; does it make life better or safer for American workers or consumers?"''

We like the spirit behind this, and think it's a good idea to have a dedicated officer within each agency who is independent and is focusing on regulatory efficiency (kind of like the inspectors general system). However, Trump's remarks shows he doesn't really understand what the problem is -- the issue isn't that we aren't already taking enough time to weigh new regulations, get feedback from all sides, and weigh the pro's and con's (we already do this -- agonizingly-so): the real problem is that there's no compulsory force to cut through all the opposing interests and impose the optimal outcome based on the benefit to the general public (or whoever the intended stakeholders are). Instead, the preferences of the most powerful/vocal lobbies (or secondarily, the agency staff themselves) dominate. It isn't clear how yet ANOTHER monitor (we already have the GAO and CBO and CRS) is going to "right" the system. Generally, these oversight agencies already do amazing work -- it's just that "no one listens to them" (i.e., they have no power over the political process).

Thus, we don't expect this to work: while it might help in some cases for a while by adding some useful information to the public debate over particular regulations, it will likely just become another politicized facility that will become integrated into the DC sausage factory. Remember, the laws are being mandated by Congress in the first place, and the President can't simply refuse to implement them -- even if someone's analysis shows there's overall more cost than benefit.

To really make any meaningful, sustainable progress on this front, you'd need a law that puts enforcement behind the cost-benefit analysis of all future laws, and regulations implementing them; i.e., regulations can only be implemented if they can be done at a net benefit, and laws can only go into effect if their regulations can be implemented thusly (and this would be reviewed periodically over time, since you can't always tell from the outset). In essence, give the GAO's (and other oversight organizations) analyses some actual TEETH.

So, unfortunately, this just demonstrates another case where it is clear that Trump's people simply don't know how things already work, and what's already in place. You have to know what, in specific, is broken, to fix it. Oh, and you might have to actually work with Congress to get them to surrender some of their arbitrary power...

New home sales are up, but pace disappoints; Price slips

Fri, 02/24/2017 - 17:24
New residential single-family home sales increased 3.7% to an annually adjusted rate of 555,000 in January, the report stated. This is up from December's rate of 535,000 and 5.5% above January 2016's rate of 526,000. .. new sales have much room to grow," McLaughlin said. "In January, new home sales represented about 11.6% of all sales, which is less than half of the pre-recession average of 23.6%." Median sales prices of new homes sold slipped in January from December's $322,500 to $312,900 in January. The average sales price slipped from $384,000 to $360,900 in January.''

GOP Draft Health Care Bill Loads Up on HSAs and the "Cadillac Tax", But Cuts Medicaid, Insurance Subsidies

Fri, 02/24/2017 - 17:16
A draft bill detailing Republican plans to begin repealing and replacing many facets of the Affordable Care Act would provide expanded tax credits and health savings accounts for individuals while reducing federal spending on tax subsidies and Medicaid and practically eliminating both the current employer and individual mandate to provide and carry health insurance.


What isn't included is a guarantee that people with pre-existing conditions are able to obtain coverage. Members of the House, however, introduced a bill last week to preserve the pre-existing condition ban, signaling that it would have to be passed separately.

The bill dismantles some major components of the ACA, including the expansion of Medicaid and the subsidies to purchase health insurance. In its place, Americans who need assistance to purchase health care will receive a tax credit - able to be received in advanced on a monthly basis - based on age. A person under 30 is eligible for a $2000 tax credit while a person over 60 is eligible for a $4000 credit.


The measure also also creates state-based high risk pools for people who don't have access to insurance. The federal government would start in 2018 providing $15 billion to help fund the high risk pools, but the number decreases to $10 billion by 2020 and beyond.


The measure does not directly get rid of the individual and employer mandate to purchase and provide health care, but it zeroes out the penalty, making violation of the mandate non-enforceable.

Republicans, struggling to figure out a way to pay for their health insurance plan, puts in place a tax on the most expensive employer-based health insurance plans, which is an expanded version of the so-called Cadillac tax.

The measure repeals unpopular taxes opposed by the business community and health field, including the medical device tax and the tax on health insurance, also known as the HIT tax, that helped to pay for the ACA.

Spain: Former IMF Chief and Dozens of Former Bank Execs Just Got Sentenced to Jail

Fri, 02/24/2017 - 17:05
The unimaginable just happened in Spain: two former bank CEOs, Miguel Blesa (CEO of Caja Madrid) and Rodrigo Rato (CEO of Bankia) were just awarded prison sentences of six years and four-and-a-half years, respectively, for misappropriation of company funds. Rato was also Managing Director of the IMF from 2004 to 2007. He was succeeded by another luminary, Dominique Strauss Kahn.


Dozens more former Caja Madrid senior executives, most of whom are closely connected to either, or both, of the country's two main political parties and/or unions also face three to six years in prison. They were found guilty by Spain's National High Court of misusing company credit cards. Those cards drained money directly from the scarce funds of Caja Madrid, which at the height of Spain's banking crisis was merged with six other failed savings banks into Bankia, which shortly thereafter collapsed and ended up receiving the biggest bail out in Spanish history, costing taxpayers over €20 billion, to date.

JCPenney shuttering up to 140 stores as sales weaken, more sluggish growth seen ahead

Fri, 02/24/2017 - 08:51
``J.C. Penney finally lifted the lid on its plans to downsize its fleet, telling investors on Friday that it would close between 130 and 140 of its stores over the next few months. The retailer made its comments while reporting fiscal fourth-quarter earnings that topped Wall Street's expectations, though revenue and same-store sales fell shy of expectations. ''

Bitcoin is nearing its all-time high on ETF anticipation

Thu, 02/23/2017 - 22:17
Bitcoin came within $3 of its all-time high on Thursday as expectations mounted that the Securities and Exchange Commission could soon authorize the creation of the first bitcoin exchange-traded fund.


The SEC is expected to deliver a decision on the proposed Winklevoss Bitcoin Trust by March 11. Two other bitcoin-focused ETFs are also under consideration.

Though some have speculated that the path to a bitcoin ETF may be easier under the administration of President Donald Trump, Spencer Bogart, a bitcoin analyst at Needham and Co., believes chances of approval are less than 1-in-4.

Mnuchin: Stock market 'absolutely' Trump admin's economic report card

Thu, 02/23/2017 - 22:15
``Treasury Secretary Steven Mnuchin tied the success of the Trump administration's economic policy to the success of the United States stock market Thursday, a rare step for high-ranking government officials. Mnuchin told CNBC that the stock market is "absolutely" a good report card for the Trump administration, citing massive gains since President Trump's election.''

Dow pulls off a stunt it hasn't done in 30 years

Thu, 02/23/2017 - 22:14
``With 10 Dow records in a row, it wouldn't be a surprise if Wall Street's bull caught its breath in the near future. Stocks closed mixed Thursday, but the Dow was the leader, in its longest streak of record closes since the first 13 trading days of 1987. Traders often wince when 1987 is mentioned since it is remembered well as the year of the famous October stock market crash.'' -- What, anyone, worry?