Implode-Explode Heavy Industries news feed Tracking the many faces of the global credit implosion. en-us iehi-feed-61512 Wed, 18 Jan 2017 21:29:46 GMT China Housing Bubble Finally Pops: First Slowdown After 19 Months Of Acceleration iehi-feed-61505 Tue, 17 Jan 2017 21:06:39 GMT Crazy Housing Reality Shows Are Back [The shows don't want] too much to think about.  Real estate buying is simple!  It never goes down!  If this dingbat couple bought then surely "I" with my genius IQ and my spouse will live happily ever after so long as we buy.  No one lost buying real estate (aside from the 7,000,000+ recent foreclosures from the latest housing bust).

In the end, no one cares about your financial well being more than you.  In my view, managing your finances wisely is about financial independence, not being locked down as a house slave while having to forge into the toxic freeway wasteland of California.  That financial independence may very well include owning a home.  Heck, in most parts of the country buying is really a no brainer.  But in expensive regions and states, the math isn't so clear. 

iehi-feed-61483 Sat, 14 Jan 2017 15:03:20 GMT Addicted To Gov? Ben Carson And The 30 Year Mortgage Backstop iehi-feed-61482 Sat, 14 Jan 2017 03:24:58 GMT Carson will "Examine" FHA Premium Cut iehi-feed-61465 Wed, 11 Jan 2017 23:19:33 GMT Suddenly, Home Sale Agreements Are Falling Apart Across the U.S. A Trulia analysis of U.S. listings shows that 3.9 percent of homes that moved from for-sale to pending moved back to for-sale again, nearly double the rate in 2015. Such "failed sales" increased in 96 of the 100 biggest U.S. metros, with big swings in areas large and small, rich and poor. That includes Los Angeles and Charleston, S.C., as well as San Jose and Akron, Ohio.


The problem of failed sales has been most acute for cheaper homes and older ones: Some 6.3 percent of sales of starter homes fell through last year, according to Trulia's analysis, compared with 3.6 percent of so-called premium home sales. Homes built in the 1960s had the highest fail rates, while sales of newer and older houses were more likely to go through.

iehi-feed-61464 Wed, 11 Jan 2017 23:17:10 GMT Mnuchin to Divest Stakes in 43 Investments to Avoid Conflict, But Already Talked Up Fannie/Freddie Holdings The disclosures reveal that Mnuchin may have benefited following his comments in a Nov. 30 interview that the government should exit control of Fannie Mae and Freddie Mac. The remarks sent shares of the mortgage-finance giants soaring. Mnuchin's filings show he's invested as much as $2 million in Paulson Advantage LP, which holds a stake in Fannie and Freddie.

The Paulson Advantage holdings are among 43 investments that he has pledged to divest within 90 days of being confirmed. The value of the divestitures is more than $75 million, based on Bloomberg calculations.

Some think Mnuchin won't get confirmed, and some think that Fannie and Freddie can't even be privatized. Interesting times!

iehi-feed-61435 Sat, 07 Jan 2017 02:47:48 GMT Trump asking Congress, not Mexico, to pay for border wall... and "Reimbursement" looks unlikely According to Trump's website, those steps could include: remittance seizure, potential tariffs and foreign aids cuts, increasing fees on temporary visas issued to Mexican CEOs and diplomats, increasing fees on border crossing cards, increasing fees on NAFTA worker visas; and increasing fees at ports of entry to the US from Mexico.

A major challenge for judging Trump's proposal is that most of those steps amount to a drop in the bucket -- less than $1 billion -- compared to the proposed cost of the wall. And the one step that could provide the required amount of money -- remittance seizure -- would face major legal obstacles, in addition to the likelihood of severe domestic and international backlash.

God bless innumeracy. At least, that must be what Trump is thinking, or would be, if he understood what "innumeracy" was...

iehi-feed-61409 Wed, 04 Jan 2017 15:55:14 GMT Why New York's most beloved stores are dying Stores like Gracious Home and Crate & Barrel have suffered, too, because financially strapped millennials have put off buying homes, and buying the furniture and curtains to put in those homes.

These stores serve a shrinking clientele: people financially healthy enough to splurge on a better-quality bathmat, but not so rich that they hire professionals to outfit their homes, and who use wholesale providers to do it.

Finally, these stores struggle because they don't serve the tourist trade. Since the financial crisis, Manhattan's retail market has been defined by overseas tourists who spend hundreds or even thousands of dollars per trip. But tourists want to buy clothes and jewelry and M&Ms, not pie pans.

The tourist trade, too, may be peaking. Fifth Avenue's tenants, from Topshop to H&M, seem increasingly desperate for customers, advertising rock-bottom "sale" prices year-round.

Retail upheaval is showing up in the numbers. In its fall report, the Real Estate Board of New York noted that "a slower retail sales environment," coupled with newly built space, "have started to affect ground-floor asking rents in Manhattan's most prominent retail corridors." Prices fell in 11 of 17 areas.

iehi-feed-61397 Tue, 03 Jan 2017 21:40:37 GMT Nation-Wide Luxury Apartment Boom Looks Set to Fizzle in 2017 Landlords of upscale properties across the U.S. are bracing for rough conditions in 2017 that will likely force them to slash rents and offer deep concessions as a glut of supply brings a seven-year luxury-apartment boom to an end.

The turnaround follows a more-than-26% jump in U.S. apartment rents since early 2010, far outstripping inflation and income growth. But in 2016, rents rose a modest 3.8%, a significant drop from the recent high of 5.6% year-to-year growth in the third quarter of 2015... the number of upscale apartments coming onto the market appear to be outpacing the number of renters able to move into them: More than 50,000 new units were rented by tenants in the fourth quarter in the U.S.... But that demand was overwhelmed by the 88,000 new units that were completed in the quarter, the most since the mid-1980s, according to MPF.


That gap looks set to widen in 2017. More than 378,000 new apartments are expected to be completed across the country this year, almost 35% more than the 20-year average, according to real estate tracker Axiometrics Inc... The New York area alone will be flooded with nearly 30,000 new apartments in 2017, double the historical average, according to Axiometrics. Roughly 85% are luxury units.

iehi-feed-61391 Tue, 03 Jan 2017 15:06:42 GMT Real estate is not local: Housing markets across the US are overheating iehi-feed-61387 Mon, 02 Jan 2017 14:55:26 GMT A giant wave of store closures is about to hit the US Macy's has already said that it's planning to close 100 stores, or about 15% of its fleet, in 2017. Sears is shuttering at least 30 Sears and Kmart stores by April, and additional closures are expected to be announced soon. CVS also said this month that it's planning to shut down 70 locations.

Mall stores like Aeropostale, which filed for bankruptcy in May, American Eagle, Chicos, Finish Line, Men's Wearhouse, and The Children's Place are also in the midst of multi-year plans to close stores. 

Many more announcements like these are expected in the coming months.

iehi-feed-61385 Mon, 02 Jan 2017 13:52:40 GMT Forecast 2017: The Wheels Finally Come Off - KUNSTLER The American people have been punked by their own government and their central bank, the Federal Reserve, for years and the jig is now up. In 2017 both will lose their authority and legitimacy, a very grave matter for the survival of this republic.


Get this: the Fed is completely full of shit. It is terrified of the conditions it has set up and it has no idea what to do next. The "data" that it claims to be so dependent on is arrantly fake. The government's official unemployment number at Christmas 2016 was 4.6 percent. It's a compound lie....

In 2015 they didn't do anything until the very last Fed meeting of the year when they raised the Fed Funds rate 25 basis point (that's a measly one-quarter of a percent). They raised, they said, because they were "confident" about the economy. No, that's not why. They did it because they talked about it all year without doing anything and their credibility was on the line. They also promised four rate hikes altogether in 2016, which they then failed to carry out...

The Fed Funds rate is one thing. As it happens, the Fed does not directly control the interest rates on US treasury bonds, and they have been rising shockingly through the second half of 2016. The crucial ten-year treasury rate has gone up a hundred percent since the summer. Because bond values move inversely to bond rates, the price of ten-year treasuries has tanked, inducing trillions of dollars in losses to bond-holders around the world. The bond market is many times larger than the stock markets. Bonds have been in a bull market since the early 1980s and that bull rolled over in mid-2016...

A sharply rising interest rate on the ten-year Treasury bond will thunder through the system. A lot of other basic interest costs are keyed to the ten-year bond rate, especially home mortgages, apartment rentals (landlords hold mortgages), and car payments. When the ten year bond rate goes up, so do mortgage payments. When mortgage rates go up, house prices go down, because fewer people are in a position to buy a house at higher mortgage rates, and rents go up (more competition among people who can't buy a house). Zero Interest Rate Policy (ZIRP), in force for ten years, has driven house prices back to stratospheric levels. They are now primed to fall, perhaps severely, leaving many homeowners "underwater," with houses worth way less on the market than the amount of mortgage left to pay off. The re-financing market is dead. Housing starts were already down by a stunning 19 percent in November. Automobile sales are rolling over. Manufacturing and retail sales numbers are down at year end. What's up: stocks, stocks, stocks.

iehi-feed-61370 Wed, 28 Dec 2016 08:56:51 GMT Housing affordability drops to 8-year lows while mortgage rates surge iehi-feed-61364 Thu, 22 Dec 2016 10:52:45 GMT These hotel workers just took on Trump -- and won Donald Trump's hotel company and two of the country's leading labor unions reached agreement Wednesday on deals that will offer new benefits to hundreds of workers at his Las Vegas hotel and pave the way for workers at his D.C. hotel to unionize.

The Vegas agreement resolves a high-profile battle at the Trump International Hotel Las Vegas, where Trump, as co-owner, refused to recognize a vote to organize last year by housekeepers, maids, porters, cooks and other members of the UNITE HERE Culinary Workers Union and the Bartenders Union.

iehi-feed-61360 Thu, 22 Dec 2016 10:34:56 GMT It's the END OF HAMP... And the Beginning of a New Era in Loan Modifications | Mandelman Matters HAMP is ending this year, as of December 31st, it will be history.

What won't be history, unfortunately, are the foreclosures that we've been trying to prevent since 2008.  Sure, the numbers of new foreclosure filings have fallen as compared with the numbers reported in 2009 or 2010, but that doesn't mean the foreclosure crisis is over... Looking at RealtyTrac's foreclosure chart for 2016, it appears that we still had almost a million foreclosures this past year. Yeah, it's not two million or four million, but it's still a million, which works out to 2740 a day, 365 days a year... and seems like too many at least to me.


The good news, however, is that the end of HAMP does not necessarily mean the end of loan modifications. Last week, Fannie Mae and Freddie Mac announced a HAMP replacement called the "Flex Modification" program, which Fannie says, "leverages components" of HAMP with those of Fannie's "Streamlined Modifications."

iehi-feed-61359 Thu, 22 Dec 2016 10:24:30 GMT Italy Aims €20 Billion "Bazooka" at €360 Billion Problem: Bail-ins Coming, Expect More iehi-feed-61356 Wed, 21 Dec 2016 22:02:47 GMT Italy Banking Crisis is Also a Huge Crime Scene While attention is focused on the rescue of MPS, news regarding another Italian bank, Banca Etruria, has quietly slipped by the wayside.

On Friday it was announced that the first part of an investigation concerning fraudulent bankruptcy charges, in which 21 board members are implicated, had been closed. This strand of the investigation concerns €180 million of loans offered by the bank which were never paid back, leading to the regional lender's bankruptcy and eventual bail-in/out last November that left bondholders holding virtually worthless bonds.

The Banca Etruria scandal is a reminder -- and certainly not a welcome one right now for Italian authorities -- that a large part of the €360 billion of toxic loans putrefying on the balance sheets of Italy's banks should never have been created at all and were a result of the widespread culture of corruption, political kickbacks, and other forms of fraud and abuse infecting Italy's banking sector.


Yet, as has happened in just about every Western jurisdiction since the Global Financial Crisis (bar Iceland, of course), no one will be held to account for the myriad "alleged" white-collar crimes, misdeeds and misdemeanors that paved the way to Italy's unfolding banking crisis. As in Spain, high-profile investigations will be launched and trials will be held, yet they will lead nowhere. And they will take years getting there.

iehi-feed-61337 Fri, 16 Dec 2016 18:16:29 GMT U.S. housing starts tumble from nine-year high last permit data point was revised down too....]]> iehi-feed-61335 Fri, 16 Dec 2016 16:02:52 GMT Trump wants "Bubblehead" financial pundit Larry Kudlow for Council of Economic Advisers Stephen Moore, chief economist at the Heritage Foundation and an adviser to Trump, told a Lansing, Mich., business group Thursday that Kudlow would be named to the post, though Moore later added that the nomination "isn't a done deal," according to the Detroit News. A person close to the transition told The Post that Trump is trying to find a space for Kudlow, a Trump friend and loyal adviser during the campaign, in an economic advisory role.

If selected, Kudlow would mark another un­or­tho­dox pick for Trump. Under both Republican and Democratic presidents, the council has provided expert economic advice to the president and attracts a staff of top-flight young economists. But Kudlow lacks a graduate or undergraduate degree in economics and has not written scholarly papers on the subject.

A fervent supporter of deep tax cuts, Kudlow is a senior contributor at CNBC and former host of the cable channel's prime-time "The Kudlow Report." While continuing with his broadcasts, he informally advised Trump during the campaign. Like Moore, Kudlow disagrees with Trump about trade and opposes protectionism, but shares the president-elect's desire to slash tax rates for businesses.


In recent years, he has become a popular figure on television, but his record as an economic forecaster is full of potholes.

Less than nine months before the economic crisis hit in 2008, Kudlow wrote in the National Review: "There's no recession coming. The pessimistas were wrong. It's not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that's a minimum). Goldilocks is alive and well. The Bush boom is alive and well. . . . Yes, it's still the greatest story never told."

Earlier, in 2005, he made fun of people worried about inflated housing prices, calling them "bubbleheads."

Obviously Trump places loyalty above all else.

iehi-feed-61328 Thu, 15 Dec 2016 15:45:51 GMT Home builder sentiment soars to 11-year high as developers bank on a Trump bump Home builder confidence soared in December to a level last seen at the heights of the housing bubble as construction firms anticipated less red tape under the presidency of Donald Trump.


"Builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability."

Boy, now things look peakey...