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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: 58 min 28 sec ago

The Trump-Russia Probe Is About to Get Uglier (OBSTRUCTION, FINANCIAL FRAUD AND LAUNDERING, OH MY!)

Thu, 12/14/2017 - 17:01
...keeping in mind an important reminder from Bill Ruckelshaus, a former acting FBI director who was a hero of Watergate when he quit Nixon's Justice Department in 1973 rather than following an order to impede the investigation of that landmark case. What's publicly known about inquiries like this one, he told me in June, is just a little of what's actually happening.

There is, for example, evidence that Mueller has expanded his investigation to look at financial deals involving Trump family interests.

Robert Anderson, a top counterintelligence and cybersecurity aide to Mueller when the latter was FBI director from 2001 to 2013, wrote in Time last month that Mueller "appears to have uncovered details of a far-reaching Russian political-influence campaign." Anderson predicted that the conspiracy would prove to involve wire fraud, mail fraud and moving money around illicitly between countries. He said more informants are likely to emerge, and declared, "When the people who may be cooperating with the investigation start consensually recording conversations, it's all over."

The issue of whether a sitting president can be indicted is unsettled. Those who know Mueller believe that he's less likely to pursue a prosecution than to send Trump's case to Congress to consider impeachment.''

Rubio to vote against GOP tax bill unless tax credit for working poor is expanded

Thu, 12/14/2017 - 16:58
Sen. Marco Rubio informed Senate leaders Thursday he intends to vote against Republicans' $1.5 trillion tax plan unless it includes a larger expansion of a child tax credit. "... given all the other changes made in the tax code leading into it, I can't in good conscience support it unless we are able to increase [the child tax credit], and there's ways to do it and we'll be very reasonable about it."

Sen. Mike Lee (R-Utah), Rubio's partner in pushing for the expanded child tax credit, is undecided on whether to support the Republicans' final tax bill, according to a Lee spokesman.

...

Rubio and Lee want to allow millions of families who pay payroll taxes but do not earn enough to pay income taxes to claim the expanded credit. The change they are now pushing would expand the credit by $80 billion over 10 years, a smaller change than they proposed for the Senate bill.

Glut of New Manhattan Luxury Apartments Masks Rent Decline

Thu, 12/14/2017 - 15:49
Rent-free months, price cuts, gift cards, gym memberships. Manhattan's apartment landlords have been offering all sorts of enticements month after month, hoping to lure renters to their units amid a surge of new supply.

So why hasn't the median rent declined? Blame all those fancy units in just-built towers with swimming pools and yoga rooms, where rents are so far above the rest of the market that they're keeping the overall rate elevated -- even when the properties lease at a discount.

Disney Will Rue Its Merger With Fox

Thu, 12/14/2017 - 14:06
``I hate to be the skunk at the garden party, but Iger better hope this deal isn't his legacy. If it is, I fear he'll be remembered as this decade's Gerald Levin, the former chief executive of Time Warner who merged his company in 2000 with the wrong partner (AOL) at the wrong time (two months before the internet bubble burst), and orchestrated one of the worst deals in history.  

...

"Buying Fox and Sky cements Disney in the past," says BTIG analyst Rich Greenfield, "because it adds networks that are tied to the legacy ecosystem." For instance, one of Disney's tried-and-true strategies has been to sell all of its networks--ESPN, ABC and Disney--as a package in negotiating with cable distributors... But over the long haul, as subscribers continue to abandon cable TV, having all those networks is more likely to become an albatross.

...

[Further,] Disney and Fox together now control 40 percent of the movie business, and one has to wonder whether the Justice Department's antitrust department will insist that the companies divest some of their movie assets to reduce their power over the theaters. Given the government's current opposition to the proposed AT&T-Time Warner merger, I suspect that the answer is yes. Which of course would negate the point of the deal, at least in terms of the movie business.

...

As for Hulu, it is unclear what Disney would be able to do with it without the consent of Comcast, which will still own 30 percent of the service. And in any case, it is hard to envision what it might do with Hulu that would in any way harm Netflix... if Iger truly were looking to the future, the last thing he'd be spending Disney's money on would be Fox. Wrong deal, wrong time.

Famed Short-Seller Jim Chanos Says Tesla Headed for ‘Brick Wall'

Thu, 12/14/2017 - 13:59
Chanos has been public about his short position in Tesla Inc. for more than a year. Last September, when Tesla was merging with SolarCity Corp., he called Elon Musk's automaker a "walking insolvency." He recently reiterated the critique on Bloomberg Television, describing Tesla as "structurally unprofitable" with a "way too leveraged" capital structure. Chanos famously bet early that Enron Corp. would fail and was later proven right.

Chanos warned Wednesday that the spate of executive departures at Tesla this year is reminiscent of Enron before its fall. He predicted Musk will even depart in the coming years for another of his companies, Space Exploration Technologies Corp. Morgan Stanley analyst Adam Jonas said earlier this month he could envision Tesla merging with SpaceX as the rocket company becomes a more time-consuming focus for Musk.

Bitcoin Is Greener Than Its Critics Think

Thu, 12/14/2017 - 13:29
``... it's important to put things in perspective. A recent report suggests that at current prices, Bitcoin miners will consume an estimated 8.27 terawatt-hours per year. That might sound like a lot, but it's actually less than an eighth of what U.S. data centers use, 1 and only about 0.21 percent of total U.S. consumption. It also compares favorably to the currencies and commodities that bitcoin could help replace: Global production of cash and coins consumes an estimated 11 terawatt-hours per year, while gold mining burns the equivalent of 132 terawatt-hours. And that doesn't include armored trucks, bank vaults, security systems and such. So in the right context, bitcoin is positively green.''

Fed boosts benchmark rate for third time this year

Wed, 12/13/2017 - 20:44
The Federal Reserve is raising its benchmark interest rate for the third time this year, signaling its confidence that the U.S. economy remains on solid footing 8½ years after the end of the Great Recession.

The Fed is lifting its short-term rate by a modest quarter-point to a still-low range of 1.25 percent to 1.5 percent. It is also continuing to slowly shrink its bond portfolio. Together, the two steps could lead over time to higher loan rates for consumers and businesses and slightly better returns for savers.

The central bank says it expects the job market and the economy to strengthen further. Partly as a result, it foresees three additional rate hikes in 2018 under the leadership of Jerome Powell, who succeeds Janet Yellen as Fed chair in February.

...

Most analysts have said they think the still-strengthening U.S. economy will lead the Fed to raise rates three more times next year. A few, though, have held out the possibility that a Powell-led Fed will feel compelled to step up the pace of rate hikes as inflation finally picks up and the economy, perhaps sped by the Republican tax cuts, begins accelerating.

For what it's worth (since the Fed funds rate has almost no meaning in the post-2008 regime, and all...). And on a related noteYellen Isn't Buying Trump's Tax Cut Talk of an Economic Miracle ...

Here Come the Bogus Bitcoin Scare Tactics

Wed, 12/13/2017 - 19:47
``The run-up in bitcoin and other crypto assets has offered cynics of all stripes a chance to look smart by condemning cryptocurrency as a "Ponzi scheme" that could "cause a recession." These arguments are not new, but they are ignorant.''

The Fight to Control the CFPB Is Just Heating Up

Wed, 12/13/2017 - 18:08
A federal court ruling last month, which denied CFPB Deputy Director Leandra English's request to block Mulvaney from assuming the directorship, was widely seen in the media as legitimizing Trump's appointment of Mulvaney and ending English's challenge. But that decision pertained to a temporary restraining order, and the court has not yet ruled on the merits of the case. English's lawyers filed a request for a preliminary injunction last week, and U.S. District Court Judge Timothy Kelly, a Trump appointee, set a December 22 hearing date for oral arguments. The ruling could come any time after that.

...

In one of the briefs, more than 30 current and former members of Congress, including Dodd-Frank architects Barney Frank and Christopher Dodd, wrote that they intended the deputy director to take over in the absence of the director to insulate the CFPB from politics. "In creating the Bureau, lawmakers determined that it needed to be independent in order to fulfill its mission," the amici argued. Indeed, legislative history shows that Congress considered making the CFPB subject to the FVRA standard, but then rejected that approach, a position that the legislators who actually authored the law reinforce.

...

nd because the CFPB director also serves on the board of the Federal Deposit Insurance Corporation and the Financial Stability Oversight Council, Trump has illegally brought a White House official into those venues as well, Conti-Brown charged.

These allegations about the legality of the Mulvaney appointment also show up in a second lawsuit, filed Tuesday by the Lower East Side People's Federal Credit Union in a U.S. District Court in New York. The credit union asserts that Mulvaney cannot serve as acting director and that English, instead, has the legal right to do so. "An Acting Director with no lawful authority to regulate the Credit Union is now regulating the Credit Union," the plaintiffs allege, causing what they say is direct harm to the business.

...

In the meantime, the legal uncertainty and the scrutiny of Mulvaney's actions has forced him to change course on some decisions and proposals he previously made. He initially froze all payments to fraud victims. But after an outcry, he reversed himself two days later, allowing payments to be disbursed.

‘Buy the Dip' Has Never Been More Popular in U.S. Stocks

Wed, 12/13/2017 - 17:31
"Investors no longer fear shocks but love them," a team led by global equity derivatives researcher Nitin Saksena wrote in a note Tuesday. "Since 2013, central banks have stepped in (or communicated that they may step in) to protect markets, leaving investors confident enough to ‘buy-the-dip.'"

Intraday realized volatility for the S&P 500 Index relative to the realized volatility in the open-close ratio for the benchmark gauge has soared to record highs this year, emblematic of an environment in which buying the dip has become gospel for traders, according to the bank's analysis of price action going back to 2003. This ratio is also above the 90th percentile for the Euro Stoxx 50 Index and Nikkei 225.

But as is obvious to All Thinking People(tm), only the Bitcoin market is "a bubble".

Republicans Say They Have a Deal on Tax Bill

Wed, 12/13/2017 - 16:16
Senator John Cornyn of Texas, the majority whip, told reporters that Republicans will be briefed on the deal today, and that he is confident it will be approved next week.

The agreement drops the corporate tax rate to 21 percent from the current 35 percent rate and will go into effect in 2018, rather than 2019, as the Senate bill originally called for, according to a senior Republican congressional aide. The bill also allows individuals to deduct up to $10,000 in state and local taxes, split between property taxes and either income or sales taxes paid. That move is intended to alleviate the concerns of House Republicans, particularly those from California, over the bill's treatment of the state and local tax deduction.

Lawmakers also agreed to rescind the corporate alternative minimum tax, which was tucked into the Senate bill at the last minute as a way to pay for the $1.5 trillion bill. The inclusion of the corporate A.M.T. was criticized by many business groups, who said it would prohibit the ability of companies to use tax breaks such as the research and development tax credit.

The top individual income tax rate will drop to 37 percent, down from the current rate of 39.6 percent. But the rate will kick in for income levels below the $1 million cutoff outlined in both the House and Senate bills.

The conference bill will preserve the individual alternative minimum tax, which the House bill had eliminated and the Senate bill retained in a watered-down form. The conference version will apply to even fewer taxpayers than the Senate bill would have, the congressional aide said.

The agreement in principle appears to allow some high-earning business owners to claim an even larger tax break than the Senate bill would have. Negotiators agreed to keep the Senate's approach to provide a tax deduction for so-called pass-through companies, whose owners pay taxes on profits through the individual code. That deduction will likely be lower than the 23 percent deduction in the Senate-passed bill.

But, the aide said, the conference bill will include a House provision that would allow some pass-through owners with few employees -- but large amounts of investment in their businesses -- to bypass a limit on how much income qualifies for the preferential deduction.

...

It is not clear if Republican senators will roundly endorse the deal, which would allow provisions that Senators Susan Collins of Maine and Marco Rubio of Florida had raised concerns about earlier this week. Ms. Collins has said she's not in favor of a lower individual rate and Mr. Rubio has pushed for a more generous child tax credit.

The S&P 2700 By Christmas, Maybe -- But Fed Still Not Draining Balance Sheet!

Wed, 12/13/2017 - 16:14
``With global Central Banks still flooding the system with liquidity, the Fed has yet to begin rolling off their reinvestments as expected. In fact, the Fed made a timely reinvestment during the "Senate Tax Bill" debacle earlier this month. Of course, that bump of liquidity sent asset prices rocketing higher. The question becomes just what will happen to the markets when the Fed actually does begin to aggressively decrease their "reinvestments" in the coming year.''

Mt. Gox Creditors, Now That Leftover Horde Worth Appx $3bln, Seek to Remove Exchange From Bankruptcy

Wed, 12/13/2017 - 11:04
A group of major creditors of Japanese cryptocurrency exchange Mt. Gox have filed a court petition urging that the disgraced and now-defunct exchange be removed from bankruptcy, in order to prevent its CEO Mark Karpeles from walking away with a billion dollar profit.

According to a report by Financial Times, the legal bid to move the exchange out of bankruptcy and into civil rehabilitation comes in the wake of Bitcoin's recent price surge, after which the 202,185 Bitcoins held by the Mt. Gox trustee have risen to approximately $3 billion in value.

...

Outrage ensued last month among creditors after it was revealed Karpeles stood to walk away from the trial as a multibillionaire, owing to a technicality in Japanese bankruptcy law. Currently, if Mt. Gox maintains its bankrupt status, the assets in the trustee's custody will be liquidated, and the payouts creditors receive will be in accordance with the exchange rate at the time the bankruptcy proceedings began in 2014 -- roughly $440 per Bitcoin, which is nothing in comparison to the current price of over $17,000 per Bitcoin. Karpeles, by comparison, will stand to collect a massive profit after liabilities have been paid off.

European Parliament Report Accuses Wilbur Ross of Insider Trading

Tue, 12/12/2017 - 23:27
Earlier this year, Luke Ming Flanagan, an Irish politician and member of the European Parliament, the European Union's governing body, commissioned a report on the 2008 eurozone banking crisis. The final version of this report, written by two Irish financial analysts, was presented in Brussels last week to a group of 52 European Parliament members affiliated with left-leaning parties. And it included a section covering Ross' investment in the Bank of Ireland, in which he was a major shareholder and a member of the board of directors. The report alleges that when Ross sold off his holdings in the bank for a massive profit in 2014, he possessed inside information that the bank was relying on deceptive accounting practices to mask its losses and embellish its financial position.

Ross' involvement with the Bank of Ireland began in July 2011, when his hedge fund, WL Ross & Co., joined several institutional investors to purchase a 34.9 percent stake in the struggling financial firm for 1.12 billion euros ($1.6 billion). At the time, the deal "led to much head-scratching," according to the Irish Examiner. That's because Ross and the other investors obtained stock in the company at the low price of 10 euro cents a share just months after the bank received a 3.5 billion euro bailout from the Irish Central Bank and a guarantee of up to 10 billion more. (The bank's shares were trading at about 30 euro cents two months before the sale.) The Irish government's decision "to sell a large chunk of Bank of Ireland at the bottom of the market" so soon after the government's cash infusion had stabilized the institution "was on the face of it baffling," the newspaper reported.

...

Ross sold near the top of the market. Since the 2015 admissions that the Bank of Ireland relied on flawed accounting methods, the bank's share prices have dropped significantly. Yet as a board member, Ross would have presumably been privy to the bank's most sensitive financial information, including its bookkeeping practices. This raises the question of what Ross knew when he sold off his shares. Was he aware that the losses the bank was deferring using flawed accounting would inevitably reappear and that he could get out of the company before the true state of its finances became clear?

Facebook Is 'Ripping Apart' Society, Former Executive Warns

Tue, 12/12/2017 - 17:46
... another Facebook alum has come out with deep regret over his involvement in the company's work. This time it's venture capitalist Chamath Palihapitiya, Facebook's former head of user growth, who told the Stanford Graduate School of Business that he feels "tremendous guilt" over Facebook's divisive role in society, as exploited by Russian agents in last year's U.S. election.

He added that Facebook encourages "fake, brittle popularity," leaving users feeling empty and needing another hit, and suggested that this "vicious circle" drives people to keep sharing posts that they think will gain other people's approval...

"If you feed the beast, that beast will destroy you," Palihapitiya advised his audience. "If you push back on it, we have a chance to control it and rein it in. It is a point in time where people need a hard break from some of these tools and the things that you rely on. The short-term, dopamine-driven feedback loops that we have created are destroying how society works. No civil discourse, no cooperation, [but] misinformation, mistruth."

He added that this is a "global problem" and not just about Russian ads.

"My solution is I just don't use these tools anymore," Palihapitiya said. "I haven't for years. It's created huge tension with my friends...I guess I kind of innately didn't want to get programmed." He also doesn't allow his children to use social networks, he added.

Automatic Job Storm Coming | Mauldin

Tue, 12/12/2017 - 10:09
In one day, starting from nothing at all ("tabula rasa"), AlphaGo Zero learned to play chess, shogi, and Go at a superhuman level, beating the same systems that had beaten the best humans in the world... Systems like that are coming for your job. So if you think you're safe because you aren't an assembly-line worker or a retail cashier and don't work at the level of rote repetition, you could be wrong. These systems will only get better and take on ever more complex jobs.

...

Now add in tax policy. I explained early this year in my open letters to the new US president that we would all be better off with a consumption tax like a VAT rather than we are currently with the income tax. Alas, I did not get my wish. Congress is right now "improving" the tax code in ways that may actually accelerate the automation trend.

Bitcoin: Will The Arrival Of Institutional Money Cause A New Price Surge?

Tue, 12/12/2017 - 09:48
Oehman tells me "It's really about timing -- if you look back 12 months, the market cap of Bitcoin and cryptocurrency was $25 billion.

"Now we are close to $400 billion and we are talking about a completely different picture. It's really been a market where the products available haven't been geared towards institutional investors, but now we are starting to move towards that.

"They want to get involved with this somehow. The question I get all the time is ‘we are fine with allocating funds to this, but how do we do it?'

Oehman says that for a year or two now there has been a growing demand from institutional investors such as family offices representing high net worth individuals, for ways to invest in crypto currencies while still being covered by the same protections offered by more traditional markets.

Bitcoin Futures Deliver Wild Ride as Debut Brings Rally, Halts

Mon, 12/11/2017 - 14:55
``Futures on the world's most popular cryptocurrency surged as much as 26 percent in their debut session on Cboe Global Markets Inc.'s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers' expectations, while traffic on Cboe's website was so heavy that it caused delays and temporary outages. The website's problems had no impact on trading systems, Cboe said. Bitcoin's spot price rose.

"It is rare that you see something more volatile than bitcoin, but we found it: bitcoin futures," said Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia.

...

"It was smooth, and bitcoin traders don't seem to be put off by futures," said Craig Erlam, senior market analyst in London at online trading firm Oanda. "There was a fear that short selling would have an adverse impact on price, but we haven't seen that yet."

...

The roughly $1,300 difference reflects not only the novelty of the asset but also the difficulty of using the cash-settled futures to trade against the spot, strategists said.

"In a normal, functioning market, good old arbitrage would settle this," Ole Hansen, head of commodity strategy at Saxo Bank A/S in Hellerup, Denmark, said by email. "If they were deliverable you could arbitrage the life out of it."

The Retail Apocalypse Is Fueled by No-Name Clothes

Mon, 12/11/2017 - 14:52
``This year Amazon will leapfrog T.J. Maxx owner TJX Cos. and Macy's Inc. to become the second-biggest seller of apparel and footwear in the U.S., Wells Fargo estimates. In some categories--like the active wear that Americans increasingly wear all day, whether or not they hit the gym--private labels combined account for 20 percent of the market, according to researcher NPD. That makes store brands in aggregate larger than any single brand, which should strike fear in the executive suites of Lululemon Athletica, Nike, and Under Armour.''

NYC Townhouse in Contract for a Record $80 Million (DOWN FROM $114M!)

Mon, 12/11/2017 - 09:20
A roughly 20,000-square-foot mansion with its own red velvet movie theater and panic room is in contract for about $80 million, according to people with knowledge of the deal.

If it closes for that price, the property would become the most expensive townhouse ever sold in New York City, according to appraiser Jonathan Miller. The current record was set in 2006, when financier J. Christopher Flowers paid $53 million for the Harkness mansion on East 75th Street, Mr. Miller said.

...

The townhouse at 12 East 69th St. is owned by Vincent Viola, the billionaire owner of the National Hockey League's Florida Panthers who was briefly President Donald Trump's nominee for secretary of the army, and his wife Teresa Viola. They paid $20 million for the property in 2005, according to public records.

...

The house came on the market in 2013 for about $114 million but was delisted after a price cut to $98 million in 2014, according to listings website StreetEasy.com