Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63388 Mon, 11 Dec 2017 15:20:00 GMT NYC Townhouse in Contract for a Record $80 Million (DOWN FROM $114M!) http://implode-explode.com/viewnews/2017-12-11_NYCTownhouseinContractforaRecord80MillionDOWNFROM114M.html 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.

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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.

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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

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iehi-feed-63379 Sun, 10 Dec 2017 15:18:05 GMT Living in cars, working for Amazon: meet America's new nomads http://implode-explode.com/viewnews/2017-12-10_LivingincarsworkingforAmazonmeetAmericasnewnomads.html Despite a lack of hard numbers, anecdotal evidence suggests the ranks of American itinerants started to boom after the housing collapse and have kept growing.

The cause of the unmanageable household math that drives some people to become nomads is no secret.

Federal minimum wage is stalled at $7.25 an hour. The cost of shelter continues to climb. There are now only a dozen counties and one metro area where a full-time minimum-wage worker can afford a one-bedroom apartment at fair market rent.

At the same time, the top 1% now makes 81 times more than those in the bottom half do, when you compare average earnings. For American adults on the lower half of the income ladder -- some 117 million of them -- earnings haven't changed since the 1970s. This is not a wage gap -- it's a chasm.

The most widely accepted measure for calculating income inequality is a century-old formula called the Gini coefficient. What it reveals is startling. Today the United States has the most unequal society of all developed nations. America's level of inequality is comparable to that of Russia, China, Argentina and the war-torn Democratic Republic of the Congo.''

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iehi-feed-63351 Sat, 02 Dec 2017 01:44:27 GMT Stockman: Lemmings In Full Stampede Toward The Fiscal Cliff http://implode-explode.com/viewnews/2017-12-01_StockmanLemmingsInFullStampedeTowardTheFiscalCliff.html ... the promised balance sheet shrinkage process is going to rapidly escalate from $10 billion per month of Fed bond sales now, to $30 billion by spring and $50 billion by next October. That amounts to a $600 billion annual run rate; and when the ECB and other banks join the "normalization" party in 2019 and beyond total central bank bond sales will pierce through the $1 trillion per year level.

And that's a very big deal because the law of supply and demand has not yet been abolished, meaning prices and yields in the global bond market are heading for a big reset. For instance, if the UST 10-year benchmark note normalizes to a yield of 4.0%, its price will fall by more than 40% from current levels (2.35%).

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But what they will be talking about soon is a US Fiscal Cliff like none before. It now seems that the desperate GOP politicians of Capitol Hill have come up with so many fiscal gimmicks that they may actually cobble together 51 votes in the Senate.

But the emerging Rube Goldberg Contraption, which sunsets all of the individual tax cuts after 2025, and then piles on top a "trigger tax", which most surely would turn the whole things into massive ($350 billion) tax increase after a 2024 "growth" test, is actually a giant debt trap... between 2018 and 2024 the emerging Senate "compromise" would generate upwards of $1.4 trillion of new debt including interest on the added borrowing... the massive front-loaded borrowing embedded in the Senate tax bill would come on top of the $6.1 trillion already built into the CBO baseline for the 2018-2024 period and another $1 trillion that will be needed for disaster relief and the Donald's massive defense build-up and dramatically heightened pace of global military operations.

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In a word, we do not think you can finance $8.5 trillion of new Federal debt in an environment in which the Fed and its convoy of fellow traveling central banks are also selling bonds by the trillions. That is, without triggering a "crowding out" effect of the kind that has been in hibernation ever since Greenspan's cranked up the Eccles Building printing presses after the 22% stock market plunge in October 1987.

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iehi-feed-63345 Fri, 01 Dec 2017 16:13:25 GMT The Dirty Shopping Season Secret http://implode-explode.com/viewnews/2017-12-01_TheDirtyShoppingSeasonSecret.html  Black Friday results mean absolutely nothing at all. Not for the U.S. economy, and not even for the retailers themselves. Most of the stuff sold on Black Friday was going to be sold during the holiday season anyway.  What retailers have done is brought it forward into one weekend and marked down the prices, damaging margins. It is not a smart move on their part.

The interesting thing about all this Black Friday perusing is that most of it is wrong. The numbers will be revised several times before the end of December, and many erroneous conclusions will be reached based on incomplete data.

Even highly accurate numbers wouldn't tell you much. Consider the fact that in 2007, Black Friday sales were up 3.2% after an impressive gain of 6.2% the year before. Looking at that data, one would think the economy was in great shape.

Of course, we all know now that precisely the opposite was true, as toxic real estate assets were building up on bank balance sheets, and the economy was about to fall off the precipice. Like I said, Black Friday sales tell us nothing about the health or direction of the economy.

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iehi-feed-63341 Wed, 29 Nov 2017 16:54:13 GMT The next big thing at Hudson Yards: free rent and no security deposits http://implode-explode.com/viewnews/2017-11-29_ThenextbigthingatHudsonYardsfreerentandnosecuritydeposits.html iehi-feed-63324 Thu, 23 Nov 2017 02:12:13 GMT Trump's name is coming off his SoHo hotel as politics weigh on president's brand http://implode-explode.com/viewnews/2017-11-22_TrumpsnameiscomingoffhisSoHohotelaspoliticsweighonpresidentsbran.html The decision, announced by the company Wednesday afternoon, follows signs that business has flagged for months at Trump SoHo, beginning during his polarizing campaign last year.

The hotel's sushi restaurant closed. Professional sports teams, once reliable customers, began to shun the property. The hotel struggled to attract business for its meeting rooms and banquet halls, according to reporting by radio station WNYC.

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The deal to remove the Trump name was made with the Trump SoHo condominium board and the property's majority owner, CIM Group, a California-based real estate investment firm. The hotel is divided into condominiums whose owners allowed them to be rented out as hotel rooms

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The Trump Organization does have plans to expand its hotel business, targeting areas where Trump's political brand is more popular.

Those plans include two new, less-expensive brands of hotels called Scion and American Idea. But since those brands were announced in June, progress has been slow. The three discount hotels that were supposed to start the American Idea brand are still operating under their old names

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iehi-feed-63319 Wed, 22 Nov 2017 18:20:41 GMT Flat-pack home costs $32K and can be built in six hours http://implode-explode.com/viewnews/2017-11-22_Flatpackhomecosts32Kandcanbebuiltinsixhours.html It comes in a variety of sizes, ranging from a 290-square-foot tiny home for $32,800 to a 904-square-foot family home which will set you back $72,650. It also has the eco-friendly capacity to become completely off-grid with solar panels and LED lighting.

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It will cost you between $2,000 to $2,600 per unit to get it delivered to London.

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iehi-feed-63314 Tue, 21 Nov 2017 16:39:30 GMT Room rates at Trump's hotels have fallen by up to 63 per cent since he became president http://implode-explode.com/viewnews/2017-11-21_RoomratesatTrumpshotelshavefallenbyupto63percentsincehebecamepre.html At Trump Turnberry, his Ayrshire golf hotel, the average cost of a two-night stay has fallen by 57 per cent, from £498 to £215, while steep drops have also been found for stays at Trump Doral in Miami (down 53 per cent), Trump Washington DC (down 52 per cent), Trump Vancouver (down 48 per cent), and Trump New York (down 32 per cent). Only the president's Irish hotel, Trump Doonbeg, has seen a rise in rates, from £334 to £357.

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Rates for the premium rooms at his portfolio of properties have also fallen. A two-night stay in the executive suite at Trump Panama, for example, was priced at £3,129 during January 2017, but during January 2018 it could be yours for only £814.

While it conceded that there were other factors at play, FairFX suggested the falling prices were also indicative of a widespread fall in demand -- with travellers apparently put off by Trump's policies.

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iehi-feed-63302 Sat, 18 Nov 2017 00:09:40 GMT How racist official housing policies supercharged today's US wealth gap http://implode-explode.com/viewnews/2017-11-17_HowracistofficialhousingpoliciessuperchargedtodaysUSwealthgap.html In the postwar period, white Americans were given attractive, government-subsidized mortgages to move to all-white suburbs, the best known of which was New York's Levittown, that were not accessible to blacks and other minority groups. That helped white families that benefited from those mortgages to build housing wealth.

The Federal Housing Administration at the time not only "refused to insure mortgages in predominantly African American neighborhoods" but also actively subsidized "the movement of white families out of cities into single-family homes in the suburbs," Rothstein said.

Racial segregation was built into public-housing policy. Contracts in suburban subdivisions were made with an FHA subsidy that explicitly required that no blacks be allowed to move in, either initially or through future sales.

All those policy decisions led directly to the race gaps we see now. "Without federal government policy of this kind we would not have the kind of segregation in any metropolitan area today," Rothstein said.

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iehi-feed-63296 Fri, 17 Nov 2017 21:29:06 GMT Trump Organization worth one tenth of value previously reported http://implode-explode.com/viewnews/2017-11-17_TrumpOrganizationworthonetenthofvaluepreviouslyreported.html The Trump Organization in New York is reportedly worth one tenth of the value it previously claimed. 

Donald Trump's family business had previously ranked near the top of Crain's New York Business' list of largest privately held companies.

But this year it has fallen from number three to number 40 after the President disclosed the organisation's revenue to federal regulators. 

While the Trump Organization claimed $9.5bn (£7.2bn) in sales last year, Mr Trump's public filings suggest revenues of less than a tenth of that amount, between $600m (£450m) and $700m (£530m).

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"It was obviously important to Donald to have his company at the top of the list and I don't know why he felt that way but the numbers that he presented are just flagrantly untrue," Aaron Elstein said.

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iehi-feed-63294 Thu, 16 Nov 2017 20:07:04 GMT House passes sweeping tax bill; Teeing Senate Up For Battle http://implode-explode.com/viewnews/2017-11-16_HousepassessweepingtaxbillTeeingSenateUpForBattle.html The House on Thursday passed legislation to overhaul the tax code, moving Republicans one step closer to achieving the top item on their legislative agenda. 

The measure was approved by a vote of 227-205. No Democrats voted for the bill, while 13 Republicans broke ranks to oppose it.  

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Senate Republicans have their own tax bill, which is currently being considered by the chamber's tax-writing committee.

The Senate legislation differs from the House's in a number of ways. Unlike the House bill, the Senate bill fully repeals the state and local tax deduction, delays the corporate tax cut until 2019 and repeals ObamaCare's individual mandate. 

The Senate's bill also sunsets tax cuts for individuals after 2025, in order to comply with the "Byrd rule" that the measure can't increase the deficit after 10 years if it is to pass with a simple majority.

No more than two Senate Republicans can vote against their bill if Democrats are united in opposition to it. Already, Sen. Ron Johnson (R-Wis.) has said he doesn't support either the House or the Senate bills because they provide more of a benefit to corporations than to other types of businesses. Sen. Susan Collins (R-Maine) has expressed concerns about including repeal of the individual mandate, but has not taken a hard stance yet on the measure.''

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iehi-feed-63293 Thu, 16 Nov 2017 17:11:03 GMT The Shock of Sweden's Housing Market is Hitting the Country's Currency http://implode-explode.com/viewnews/2017-11-16_TheShockofSwedensHousingMarketisHittingtheCountrysCurrency.html Can a central bank steer the housing market? Not so long ago, Sweden's Riksbank decided: no. Now, there's a risk that decision may backfire as the biggest property market in Scandinavia risks sinking into a correction.

The evidence of price declines was so worrying on Tuesday that it contributed to a 1.5 percent slump in the krona against the euro. A weak currency puts the Riksbank's inflation target at risk. So should it be looking at the housing market more closely?

Developments in Sweden's housing market "could spark some doubts at the Riksbank as it may affect the overall economic outlook and inflation," Nordea analyst Andreas Wallstrom said in a note.

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iehi-feed-63275 Fri, 10 Nov 2017 15:52:34 GMT America's ‘Retail Apocalypse' Is Really Just Beginning http://implode-explode.com/viewnews/2017-11-10_AmericasRetailApocalypseIsReallyJustBeginning.html The reason isn't as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt--often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder--even for healthy chains.

The debt coming due, along with America's over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what's coming next could truly be scary.

Until this year, struggling retailers have largely been able to avoid bankruptcy by refinancing to buy more time. But the market has shifted, with the negative view on retail pushing investors to reconsider lending to them...

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iehi-feed-63266 Thu, 09 Nov 2017 17:57:05 GMT Foreclosed $51 Million "Billionaire's Row" Penthouse Sells At A 30% Discount http://implode-explode.com/viewnews/2017-11-09_Foreclosed51MillionBillionairesRowPenthouseSellsAtA30Discount.html iehi-feed-63260 Wed, 08 Nov 2017 01:16:04 GMT Douglas Elliman's profitability falls over 50% with fewer new dev closings http://implode-explode.com/viewnews/2017-11-07_DouglasEllimansprofitabilityfallsover50withfewernewdevclosings.html The New York-based brokerage pulled in $190.4 million in revenue, up 3.2 percent from $184.5 million during the prior-year period, according to filings by its parent company, Vector Group. But net income was $4.2 million -- down from $8.7 million in 2016.

Those numbers were the result of a strong low-end market but softer new development segment, where Elliman has had fewer closings despite a robust pipeline of projects it is marketing.

"There were more closings in '16 than in '17 -- quite a bit more," Chairman Howard Lorber said during an earnings call Tuesday.

Overall, Elliman closed $7 billion worth of sales during the quarter compared to $6.8 billion in 2016. For the first nine months of the year, Elliman closed sales worth $19.8 billion compared to $18.9 billion a year earlier.

Lorber said the low-end of the market is "very, very strong," as is the high-end. The mid-market segment is "kind of quiet," he said.

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iehi-feed-63259 Mon, 06 Nov 2017 19:55:43 GMT China's Central Bank Chief Warns of ‘Sudden, Contagious and Hazardous' Financial Risks http://implode-explode.com/viewnews/2017-11-06_ChinasCentralBankChiefWarnsofSuddenContagiousandHazardousFinanci.html China's financial system is becoming significantly more vulnerable due to high leverage, according to central bank governor Zhou Xiaochuan, who has made a series of blunt warnings in recent weeks about debt levels in the world's second-largest economy.

Latent risks are accumulating, including some that are "hidden, complex, sudden, contagious and hazardous," even as the overall health of the financial system remains good, Zhou wrote in a lengthy article published on the People's Bank of China's website late Saturday.

The nation should toughen regulation and let markets serve the real economy better, according to Zhou. The government should also open up markets by relaxing capital controls and reducing restrictions on non-Chinese financial institutions that want to operate on the mainland, he wrote.

"High leverage is the ultimate origin of macro financial vulnerability," wrote Zhou, 69, who is widely expected to retire soon after a record 15-year tenure. "In sectors of the real economy, this is reflected as excessive debt, and in the financial system, this is reflected as credit that has been expanding too quickly."

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iehi-feed-63245 Sat, 04 Nov 2017 14:33:46 GMT Lobbying Frenzy Begins on Tax Bill; Party-Line Vote Ability In Doubt http://implode-explode.com/viewnews/2017-11-04_LobbyingFrenzyBeginsonTaxBillPartyLineVoteAbilityInDoubt.html The Republican tax rewrite unveiled on Thursday has set off a scramble among lobbyists and interest groups desperate to preserve prized tax breaks that are suddenly at risk in the sweeping bill moving through the House.

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The rapid pace set out by Republican leaders is by design: They want to prevent the kind of arm-twisting that has long bedeviled previous tax overhaul efforts by leaving little time for outside groups to blitz lawmakers with concerns. Several consultants and lobbyists said on Friday that individual companies were just beginning to digest how the 400-plus page bill, which drastically changes how American businesses are taxed at home and abroad, would affect their bottom lines.

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The groups pushing back the hardest on Friday included those in the real estate industry. Some of them had raised concerns before the bill was released, only to discover their biggest fears realized in the draft legislation. The bill includes several measures long opposed by those groups, including a limit on interest deductions for new home purchases of $500,000 or more and an expansion of the standard deduction.

The Mortgage Bankers Association plans conference calls and discussions with members of Congress throughout the weekend, said David Stevens, the group's president. Realtors are running online ads raising concerns over those provisions.

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Representative Kevin Brady of Texas, the chairman of the House Ways and Means Committee, said no decision had been made about whether to include repeal of the so-called individual mandate. But he said Mr. Trump wants its inclusion, and he indicated that Republicans wanted to evaluate the fiscal effects of taking that step. Senate Republicans may not be as enthused about its inclusion.

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[However, a Tax Foundation] analysis found that the draft legislation would cost too much to survive the budgetary requirements needed to pass the Senate on a party-line vote -- a sign that Republicans will almost certainly need to rework it in order to keep their hopes alive for delivering a bill to Mr. Trump's desk by December.

The analysis found that the bill would add $2 trillion to the federal budget deficit over the next decade, an amount that shrinks to $1 trillion even when additional economic growth effects from the bill are factored in.

"This does not pay for itself," said Scott Greenberg, a senior analyst at the Tax Foundation.

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iehi-feed-63238 Fri, 03 Nov 2017 01:38:54 GMT Homebuilders Plunge as New Buyers Could See U.S. Tax Break Cut http://implode-explode.com/viewnews/2017-11-02_HomebuildersPlungeasNewBuyersCouldSeeUSTaxBreakCut.html The bill's talking points, released Thursday, suggest that the interest deduction for existing home mortgages will be preserved in full, but newly purchased homes will see the cap

cut in half, to $500,000.

The SPDR S&P Homebuilders exchange-traded fund, ticker XHB, and an S&P index that tracks builders plunged in early trading. If the losses hold, it would be the worst day for both in more than a year. Luxury homebuilder Toll Brothers Inc. fell as much as 7.3 percent, and retailer Home Depot Inc. also saw heavy losses.

We cryeth not many tears over this, frankly...

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iehi-feed-63229 Mon, 30 Oct 2017 22:50:37 GMT Rent Is Eating Up a Record Share of Americans' Disposable Income http://implode-explode.com/viewnews/2017-10-30_RentIsEatingUpaRecordShareofAmericansDisposableIncome.html iehi-feed-63228 Mon, 30 Oct 2017 21:38:42 GMT Lennar Makes Deal for CalAtlantic as Home Builders Face Challenges http://implode-explode.com/viewnews/2017-10-30_LennarMakesDealforCalAtlanticasHomeBuildersFaceChallenges.html The home-building sector in the United States has faced an array of challenges, including natural disasters, a long-running labor shortage and increased regulatory costs. Now, two of the nation's biggest residential-construction companies are merging in hopes that their combined heft will help them counter those forces.

The Lennar Corporation said on Monday that it would merge with the CalAtlantic Group to form America's largest home builder in a stock-and-cash deal worth $5.7 billion. The deal would create a behemoth with around 240,000 building plots in 21 states, a market value of about $18 billion and combined revenue of $17 billion over the past 12 months.

Lennar and CalAtlantic anticipate reaping $250 million in annual cost savings and paying down debt obligations. But the deal will not alter a basic problem: The construction of new homes in the United States lags below historical averages.

A decade after the big housing bust dealt a blow to many smaller home builders, the industry's largest firms continue to grapple with higher regulatory expenses that make building homes -- especially starter homes -- too costly, some housing-finance experts said. The situation confounds some people, given the pressing need for affordable housing for young families.

What a perplexing situation -- no matter how the deck chairs are rearranged, normal folks are still too broke to buy even a modest home! Who could have foreseen this???

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