Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62806 Fri, 18 Aug 2017 03:25:22 GMT Trump signs order to speed infrastructure construction http://implode-explode.com/viewnews/2017-08-17_Trumpsignsordertospeedinfrastructureconstruction.html Trump's order includes revoking an earlier executive order signed by President Barack Obama concerning projects built in flood plains, White House officials said. The Obama order required that such projects built with federal aid take rising sea levels into account. Trump has suggested the predicted risks from sea level rise driven by climate change are overblown.

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Building trade groups had urged Trump to revoke the flood plain order, saying it was overly bureaucratic and increased the cost of projects. The Obama order was especially unwieldy because it didn't standardize across the government how sea level rise was to be taken into account, which left each federal agency to come up with its own standards, said Jimmy Christianson, an attorney with the Associated General Contractors.

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Transportation Secretary Elaine Chao has said that regulations, not a lack of funding, are a primary holdup faced by transportation infrastructure projects. But a Treasury Department report released earlier this year found that "a lack of public funding is by far the most common factor hindering completion" of major transportation and water infrastructure projects.

More mostly-bluster from Trump (that might sound good initially at 100,000 feet). Now let's see him craft an infrastructure plan with Congress that would actually fund something (or facilitate funding on a large scale)...

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iehi-feed-62805 Fri, 18 Aug 2017 03:22:23 GMT Trump ends plans for his Council on Infrastructure http://implode-explode.com/viewnews/2017-08-17_TrumpendsplansforhisCouncilonInfrastructure.html Trump's infrastructure council was still being formed but the President decided to end the process, the official said. No reason was given...

Trump was initially defiant when some business leaders indicated they would leave the councils.

"For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on," Trump tweeted after a few departures. "JOBS!"

When more business leaders left, Trump pulled the plug.

Classic Trump... undoing/defeating himself within weeks... days... even hours...

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iehi-feed-62800 Wed, 16 Aug 2017 20:28:22 GMT The Shortest Commute: Where Co-Working and Co-Living Collide http://implode-explode.com/viewnews/2017-08-16_TheShortestCommuteWhereCoWorkingandCoLivingCollide.html ... his one-bedroom at WeLive, a co-living residence on Wall Street, is in the same 26-story building as his office at WeWork, a co-working space. Mr. Nguyen takes many of his meals at Westville, Fuku or Milk Bar--the trendy eateries on the building's ground floor. He does his laundry in the building. He goes to parties in the building. He attends movie nights in the building. "I'm literally here probably 23 hours of the day," he says.

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With its wide-plank pine flooring and industrial feel, WeLive looks just like WeWork--right down to the lounges where people can spin Nirvana LPs on old-school turntables. Like his office, the apartment came furnished--and equipped with pots, pans, books, and prints, even a flashlight. Mr. Nguyen enjoys fresh sheets, towels and maid service. There is free cappuccino in the lobby and free arcade games in the laundry room. The building even provides a social life, with activities ranging from Pilates to community dinners.

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The rush is on to serve folks like Mr. Nguyen, who wish to dispense with their commute. Facebook, for example, is building on-campus housing for employees. Here in New York, developers looking to lure freelancers and entrepreneurs are adding shared office spaces to new condo and rental projects. A 714-unit luxury rental in Boerum Hill, Brooklyn--named 33 Bond Street--for example, promises to "redefine the notion of work-life balance" with HomeWork, an in-house co-working space with its own coffee bar.

WeWork, meanwhile, says only a "handful" of residents at its Wall Street location also work in the building. But roughly 15% work at one of the 41 other WeWork locations in the city, including five within walking distance of the WeLive.

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iehi-feed-62791 Wed, 16 Aug 2017 00:47:21 GMT Ten years after the crash, there's barely suppressed civil war in Britain http://implode-explode.com/viewnews/2017-08-15_TenyearsafterthecrashtheresbarelysuppressedcivilwarinBritain.html One truism of this era is that the average British worker earns less after inflation than they did when RBS nearly died. Most of us have seen not a recovery, but a ripping up of our social contract -- so that over 7 million Britons are now in precarious employment. But the highest earners are way ahead of where they were in 2008. Finance-sector bonuses are as generous as they were during the boom, while a bad year for the average FTSE boss is one in which he or she pulls in a mere £4.53m.

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The banks got bailed out. Their bosses still get paid out. The rest of us get austerity. Whatever technical reforms have followed on from the crash, the economic and business model that created it remains intact. We could have used the nationalised banks to direct credit to strategic industries and regions; instead, Labour and the Tories insisted on treating them as if they were still private sector industries. We could have used the crash to make Britain a far more equal and democratic society. Instead, the UK is still grossly unequal.

And so we remain reliant on debt -- aptly termed "the raw material for bubbles and crashes" by Daniel Mügge at the University of Amsterdam. According to the Bank for International Settlements, the UK is far deeper in the red now than it was when Northern Rock collapsed. Government debt has shot up under the Conservatives, but so too has household borrowing. Were the UK to crash again, its government no longer has the political capital nor the fiscal headroom to save the financial system. And with interest rates scraping along the bottom, the Bank of England has barely any firepower left. Ten years of political fudge and failed austerity has left Britain's state machinery tapped out.

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iehi-feed-62787 Tue, 15 Aug 2017 22:57:11 GMT "Ignorance, indifference or utter disregard of the law" - Kushner Companies hit with rent-stabilization lawsuit in Brooklyn Heights http://implode-explode.com/viewnews/2017-08-15_IgnoranceindifferenceorutterdisregardofthelawKushnerCompanieshit.html iehi-feed-62785 Tue, 15 Aug 2017 19:56:52 GMT Looming housing slowdown clouds Home Depot's strong results http://implode-explode.com/viewnews/2017-08-15_LoominghousingslowdowncloudsHomeDepotsstrongresults.html iehi-feed-62781 Tue, 15 Aug 2017 15:39:30 GMT Hartford, CT, With Its Finances in Disarray, Veers Toward Bankruptcy http://implode-explode.com/viewnews/2017-08-15_HartfordCTWithItsFinancesinDisarrayVeersTowardBankruptcy.html ... the state capital is teetering on the brink of bankruptcy, and the turbulence rocking Hartford has served as a stark reminder of the gulf between the affluent enclaves that drive Connecticut's wealth and its larger cities that have long grappled with high crime, underperforming schools and unsure financial footing.

The problems in Hartford are similar to some other cities across the United States that have sought relief through bankruptcy: its tax base and population have shrunk and its pension obligations and debts have piled up. City officials, who are confronting a budget deficit approaching $50 million, have already made deep cuts in services, sought concessions from labor unions representing public employees and have taken steps, such as hiring lawyers, to position the city to be able to file for bankruptcy.

At the same time, Hartford has looked to the state for help, only to find that financial situation is also in disarray. The state, which has a deficit of about $3.5 billion, started the fiscal year on July 1 without a budget after months of wrangling in the State Legislature and a resolution could be weeks away.

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Connecticut has the greatest degree of income inequality of any state, according to Daphne A. Kenyon, an economist who studies local taxation at the Lincoln Institute of Land Policy, a research institute in Cambridge, Mass. That, she said, has translated into an extreme in "haves" and "have-nots" among its municipalities.

Cities and towns in Connecticut rely to an unusual degree on property taxes to finance their operations, a system that works well for more affluent communities, like Greenwich and Darien. But it is proving disastrous for a city like Hartford, which has one of the highest property tax rates in the state, but still cannot raise enough money to pay for basic government operations. Last year, state grants and assistance covered about half of the city's $566 million budget.

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Beyond the city's core, blocks are dotted with blighted buildings, some appearing to be overtaken by nature. Residents complain of parks that are poorly maintained and have expressed concern over violent crime. The Police Department is significantly understaffed, officials said, having lost more than 100 officers in recent years. The city's library system recently announced the closure of three of its branches and other cuts have threatened community events, like parades and festivals.

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Hartford also has a fundamental tax problem: It is home to government buildings and other properties it has no power to tax, making up just over half the real estate in the city. Connecticut accounts for that by promising to compensate the capital for the forgone property taxes, but in practice, the flow of money has been unreliable. The mayor described the city as being in a situation that forces an urban center to operate with a tax base similar to that of a suburb. "And it's a structure not built to work," Mr. Bronin said.

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In July, Moody's Investors Service downgraded Hartford's debt after the city disclosed that it had hired a law firm to advise it on a possible debt restructuring. Both Moody's and Standard & Poor's now rate Hartford's debt in the junk range, signaling a greater likelihood of some sort of default on bond payments.... Some contend that filing for bankruptcy is inevitable and is the city's best option. But there is also a pervasive sense in the city, especially among public employee labor unions, that bankruptcy could have devastating consequences and should be vigorously avoided.

... Hartford would be the first state capital to file under Chapter 9 of the federal bankruptcy code. (Harrisburg, the Pennsylvania capital, tried to declare bankruptcy in 2011, but state lawmakers there passed a bill to thwart the case from proceeding.)

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iehi-feed-62771 Sun, 13 Aug 2017 17:36:27 GMT Rich Hamptons Buyers Don't Want Mega-Mansions Anymore http://implode-explode.com/viewnews/2017-08-13_RichHamptonsBuyersDontWantMegaMansionsAnymore.html iehi-feed-62764 Sun, 13 Aug 2017 04:35:47 GMT Battle of the Behemoths - Kunstler http://implode-explode.com/viewnews/2017-08-13_BattleoftheBehemothsKunstler.html iehi-feed-62761 Sat, 12 Aug 2017 15:32:18 GMT Baby boomers are refusing to sell and will age like a fine wine in their homes http://implode-explode.com/viewnews/2017-08-12_Babyboomersarerefusingtosellandwillagelikeafinewineintheirhomes.html iehi-feed-62758 Fri, 11 Aug 2017 16:26:33 GMT Airbnb faces EU clampdown for not paying 'fair share' of tax http://implode-explode.com/viewnews/2017-08-11_AirbnbfacesEUclampdownfornotpayingfairshareoftax.html It was revealed this week that Airbnb paid less than €100,000 (£90,336) in French taxes last year, despite the country being the room-booking firm's second-biggest market after the US.

In response, the French economy minister, Bruno Le Maire, informed the national assembly that the EU's Franco-German axis would be proposing a pan-European clampdown. "These digital platforms make tens of millions of sales and the French treasury gets a few tens of thousands," the minister said, adding that the current setup was "unacceptable".

Le Maire further claimed in parliament that an ongoing consultation being led by the commission and the OECD to address the tax question were "taking too much time, it's all too complicated". Many digital platforms operating in the EU have a base in Ireland, including Airbnb, where they can exploit a low corporation tax regime. Le Maire said: "Everybody has to pay a fair contribution."

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iehi-feed-62743 Tue, 08 Aug 2017 20:10:34 GMT How China's billion savers embarked on a household debt binge http://implode-explode.com/viewnews/2017-08-08_HowChinasbillionsaversembarkedonahouseholddebtbinge.html Since [the 2008 crisis], China's massive money supply, urbanisation and a mortgage loan boom have resulted in a hefty rise in household debt, which is now equivalent to 44.4 per cent of national gross domestic product, triple the level in 2008, according to the Bank for International Settlements.

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Although China's household debt level is still low compared to the 79.5 per cent of GDP in the US and 62.5 per cent in Japan, it has risen too steeply to be safe, according to a research report by the Institute for Advanced Research at Shanghai University of Finance and Economics which was published last month and led by former central bank statistics chief Sheng Songcheng.

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"The speed of China's household debt accumulation ... has exceeded that of US household debt accumulation before the subprime crisis," it said, warning that the rapid growth would squeeze consumer spending and might lead to dangerous scenarios.

"As early as in 2020, the ratio of mortgage payments and disposable incomes in China will match the peak level in the US before the financial crisis," it concluded, adding that the rising debt burden would "restrict China's economic growth to some extent".

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iehi-feed-62740 Mon, 07 Aug 2017 15:29:34 GMT Tenants Under Siege: Inside New York City's Housing Crisis http://implode-explode.com/viewnews/2017-08-07_TenantsUnderSiegeInsideNewYorkCitysHousingCrisis.html ... [NHC] rent-stabilized apartments are disappearing at an alarming rate: since 2007, at least 172,000 apartments have been deregulated. To give an example of how quickly affordable housing can vanish, between 2007 and 2014, 25 percent of the rent-stabilized apartments on the Upper West Side of Manhattan were deregulated.

A major reason for this is that once the monthly rent of an apartment exceeds $2,700, the owner may charge a new tenant whatever the market will bear--which, because of the exceptional pressures on New York real estate, may be thousands of dollars more. Not long ago a rent-stabilized building would sell for ten or at most twelve times its rent roll--the amount of money, before expenses, that it generates in a year. Today, it sells for perhaps thirty or forty times that amount, or ten times what the rent roll would be after regulated tenants have been dislodged. The clearing out of rent-stabilized tenants has become such a common real estate practice that it is added to a building's value even before the fact. Landlords have found enough loopholes in tenant protection laws to make widespread displacement a viable financial strategy. A building in Crown Heights with one hundred stabilized units and a rent roll of $1.2 million might now fetch $40 million or more--and every tenant must be forced out for the investment to be recouped.

The buyers at these prices are, more often than not, private equity funds that manage pools of investors' money: a typical participant in the Central Brooklyn market describes itself as an asset investment firm that specializes in the "repositioning" of multifamily buildings. The aggressive entry of hypercapitalized investors into the working- and lower-middle-class real estate market has struck Central Brooklyn--and the South Bronx, and East Harlem, and Washington Heights, and practically every New York neighborhood with a concentration of rent-stabilized buildings--like a thunderclap in the span of just a few years. They are a new type of owner in the outer boroughs, ones who can afford patient, relentless eviction proceedings and tenant buyouts in a way that most previous owners, who were often individual slumlords working with a different set of profit margins, could not.

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S's daughter, who was studying to become a dental hygienist, took on extra hours at a retail clothing chain where she worked [to afford a near-doubling in rent in their Crown Heights apartment]. But they still missed rent payments, and late fees were piling up, adding to the burden. S seemed locked in a nightmare when I saw her one morning begging for a fare at the Utica Avenue subway station so she could get to her job as a home nursing aide in Manhattan. She had become impoverished overnight, paying close to 70 percent of her income in rent, and saw no recourse other than to accept her new landlord's offer of $45,000 to move out and sign away any lingering legal claim she might have to renew her lease at the stabilized rate.

"I put up with these streets when you had to be half-crazy to go out to the bodega for a quart of milk after dark," said S. "I got rid of a rat infestation four years ago myself." She and other tenants once pooled money to install a new hot water heater when the old one broke down. "We watched over this street, we cleaned it up. Why should we have to leave?" S and her daughter were shuttling between various relatives and friends--paying for a couch here, a spare bed there--when I lost touch with them.

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iehi-feed-62736 Sat, 05 Aug 2017 04:03:07 GMT Trump weighs axing "untouchable" mortgage interest deduction http://implode-explode.com/viewnews/2017-08-05_Trumpweighsaxinguntouchablemortgageinterestdeduction.html As Matthew Desmond, author of "Evicted: Poverty and Profit in the American City," wrote in May, it's actually one of the main entitlement programs in the United States. "But by any fair standard," Desmond wrote in the New York Times, "the holy trinity of United States social policy should also include the mortgage-interest deduction -- an enormous benefit that has also become politically untouchable."

Many countries like Australia, Canada, and Britain don't have this deduction, which is ostensibly there to increase homeownership. Economists don't think this necessarily works, however, instead simply allowing for the purchase of larger houses and benefiting the wealthy. According to the Tax Policy Center, it's a very regressive policy, disproportionately helping boost the top 20% post-tax income.

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In April, the administration released its tax proposal, and while it indicated that it would "protect the homeownership and charitable gift tax deductions," the proposal sought to double the standard deduction, which would effectively mute the mortgage deduction benefit for many American homeowners--except the wealthiest.

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Despite being one of the most expensive tax breaks, costing the country--mostly the renters, who don't get the benefit--$77 billion in 2016, Trump and Treasury Secretary Steven Mnuchin will face massive blowback should they pursue this policy. And not just from homeowners--from renters too. After all, homeownership is consistently cited as a being a part of the American Dream, a dream many renters hope to realize someday.

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iehi-feed-62734 Fri, 04 Aug 2017 23:23:02 GMT Manhattan's Upper East Side is facing a retail vacancy epidemic http://implode-explode.com/viewnews/2017-08-04_ManhattansUpperEastSideisfacingaretailvacancyepidemic.html Manhattan's streets are awash with empty storefronts after retail asking rents climbed to untenable levels and tenants started to push back. But the sheer number of vacancies on the Upper East Side is alarming: The Real Deal counted 82 empty storefronts along Madison, Lexington, Third and Second avenues between 57th and 96th streets during an afternoon in late July.

Over on Third Avenue, asking rents average $283 per square foot, and experts in the area said the avenue's shops are geared more toward chain apparel stores and national brands due to the kinds of large retail spaces that line the avenue. The struggles faced by national retailers, therefore, are having more of an impact on storefronts on Third Avenue than they would on a tony strip like Madison, brokers said.

"Third [Avenue], I think, is the first market to really struggle with some of the difficulties we're seeing with national soft goods retailers," Cushman's Steven Soutendijk said. "They're the ones that are struggling in malls across the country."

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iehi-feed-62730 Fri, 04 Aug 2017 15:29:50 GMT Toronto Home Prices Suffer Worst Monthly Decline in 17 Years http://implode-explode.com/viewnews/2017-08-04_TorontoHomePricesSufferWorstMonthlyDeclinein17Years.html The benchmark Toronto property price, which tracks a typical home over time, dropped 4.6 percent to C$773,000 ($613,000) from June. That's the biggest monthly drop since records for the price index began in 2000, according to Bloomberg calculations, and brings prices down to roughly March levels. Prices are still up 18 percent from the same month a year ago, according to the Toronto Real Estate Board.

Transactions tumbled 40 percent to 5,921, the biggest year-over-year decline since 2009, led by detached homes. The average price, which includes all property types, rose 5 percent to C$746,218 from July 2016. That compares with a 17 percent increase at this time last year.

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Three levels of government have introduced housing regulations since October that pushed out many potential buyers. The measures were seen as necessary to cool prices climbing at an unsustainable pace. Meanwhile, shares of Home Capital Group Inc. imploded in the spring after the alternative mortgage lender failed to disclose the extent of fraudulent mortgage activity, though it has since stabilized.

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iehi-feed-62727 Thu, 03 Aug 2017 19:33:34 GMT Report: New York Apartment Vacancies Projected to Soar thru 2018 http://implode-explode.com/viewnews/2017-08-03_ReportNewYorkApartmentVacanciesProjectedtoSoarthru2018.html A new report predicts New York City apartment vacancy rates will soar to more than 11% by the end of next year. The scenario, which some local housing analysts rejected, would mean a grim reckoning for landlords.

The forecast, by Ten-X Commercial, an online marketplace for real estate, said rents will slide as thousands of apartments in new buildings come on the market. It noted that the rate of job growth, a driver of the rental market, already has begun to slow.

New York's vacancy rate, typically in the low single digits, is 3.8%, below the national rate of 4.4%...

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The report put New York City at the No. 1 position among "top sell markets," where owners of multifamily properties "might consider selling" because of the prospect of declining owner incomes. Nearly 10,000 new apartments in large buildings--those with at least 40 units--have hit the market since 2016, a total that is due to exceed 40,000 by the end of 2018, according to the report.

Rents, after landlord concessions, already are falling, the report noted, and it predicted that rents will suffer average annual declines of 2.7% through 2020. Owner operating income, or income after subtracting operating expenses, will decline by an average of 4.5% through 2020, the report said.

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iehi-feed-62720 Wed, 02 Aug 2017 15:59:19 GMT New Fannie Rule: "Bring Us Your Poor, Your Tired, Your Student-Loan-Debt-Overloaded..." http://implode-explode.com/viewnews/2017-08-02_NewFannieRuleBringUsYourPoorYourTiredYourStudentLoanDebtOverload.html The new statement from Fannie Mae makes it clear:  the reduced payment can be used, even when the payment is $0. According to Fannie Mae, "if the lender obtains documentation to evidence the actual monthly payment is $0, the lender may qualify the borrower with the $0 payment as long as the $0 payment is associated with an income-driven repayment plan."

This is important, because the payment calculation for a student loan (10% of the discretionary income) is different from the DTI requirement of a mortgage. Many Americans could find it easier to qualify for a mortgage while in student loan debt.

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iehi-feed-62717 Wed, 02 Aug 2017 14:00:40 GMT Manhattan Commercial Deals Plummet in 1H 2017 (KUSHIE'S 666 5TH STILL AILING) http://implode-explode.com/viewnews/2017-08-02_ManhattanCommercialDealsPlummetin1H2017KUSHIES6665THSTILLAILING.html Manhattan's property sales dollar volume plummeted 55 percent year-over-year in the first half of 2017, according to Real Capital Analytics. Some brokers claim these six months were the quietest stretch since 2008.

Observers agree on the culprit: Sellers, egged on by 2016's record prices and by brokers eager to please them, are often asking too much for their buildings. Meanwhile, buyers are increasingly reluctant to pay top dollar, citing rising interest rates, uncertainty over federal tax policy and the prospect of a cyclical downturn. No one seems to know what will happen over the coming year, so why take the risk? It probably didn't help that new capital controls have made it harder for Chinese firms to invest overseas.

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According to sources, Kushner Companies is still trying to raise money [for 666 5th) and is confident that a deal will get done. Tenants whose leases are up are offered short-term renewal deals, according to a source, with an eye on emptying out the tower for development. But brokers and investors, including those who were pitched on the project, are skeptical. They question whether now is a good time to bet on luxury condos and high-street retail, with both markets struggling.

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iehi-feed-62692 Fri, 28 Jul 2017 21:30:37 GMT Mark Hanson Reveals "The Next Housing Bubble" http://implode-explode.com/viewnews/2017-07-28_MarkHansonRevealsTheNextHousingBubble.html