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Posted on 09/05/2016 2:00:06 PM PDT by Lorianne
When we first reported about the imminent paralysis of an unknown number of global supply chains and a potential shock in worldwide trade as a result of the historic bankruptcy of Hanjing Shipping, one of the world's largest container shipping companies which handles 8% of Trans-Pacific trade volume for the US market, we concluded that "the global implications from the bankruptcy are unknown: if, as expected, the company's ships remain "frozen" and inaccessible for weeks if not months, the impact on global supply chains will be devastating, potentially resulting in a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. The good news is that both economists and corporations around the globe, both those impacted and others, will now have yet another excuse on which to blame the "unexpected" slowdown in both profits and economic growth in the third quarter."
However, not even this extreme forecast captured what would happen just 48 hours later, when as the WSJ reported overnight, retailers have gone far beyond simply blaming the Hanjing bankruptcy for their upcoming woes: they are petitioning for a government bailout, or as the WSJ put it, they are "bracing for a blow as they stock up for the crucial holiday sales season, asked the government to step in and help resolve a growing crisis."
(Excerpt) Read more at zerohedge.com ...
Black Swan alert
Is this the Trigger?
I don’t the problem here. As I recall, global shippers have been complaining about a lack of business for the past few years. Idle ships, and all that. Is this a chance for other companies to leap in and fill the gap?
I don’t see the problem, I mean.....
You can bet obama and the Dems will blame Hanjin on some pretty gruesome retail sales numbers over the next several months. And everyone from CNBC to Bloomberg to Reuters will gladly follow the narrative of “everything was great in obamaville until an unexpected S Korean bankrupcy...”
Unless, of course, Donald Trump is elected in November - then, “nobody’s spending and the economy’s tanking because consumers are horrified of a President Trump!”.
Just watch.
For those of you who don’t know exactly what is or how a “derivative” financial instrument works, this video makes it crystal clear to anyone. It is an ad for a prepper type book. Don’t let that throw you. They did their homework and make the sleazy back room world of BANKER GAMBLING with deposits easy for Joe Sixpack to understand. Until we get it into our heads how Wall St. really works, we’re nothing more than feudal peasants waiting for the next tidal wave of disaster.
https://www.youtube.com/watch?v=TpVXuy6X6aU
How many phones does Apple they have sitting on the dock?
Seems like it to me. Might even raise shipping rates!
Iirc, the WSJ coverage said Hanjin accounts for about 8% of global shipping, so although there may be a bit of a scramble, it's far from a trade stoppage.
Privatize the gains, socialize the losses.
I talked with a friend who works customs in the shipping business. For the most part, this article is hysterical nonsense. Other shipping companies will immediately pick up that business.
I agree, if there is that business to pick up.
This may, however, usefully remind some people that there are risks to offshoring too much.
Cheap plastic Chinese crap that we don’t need...
Look at the Baltic Dry Index (BDI) and note how much tonnage is parked for a lack of shipping business. That’s the reason for the Hanjing Shipping bankruptcy. Rates have been way down based on how much tonnage is parked idle. Spot quotes to move cargo have popped since the news.
If you have a cargo on-board one of their ships, the docks aren’t moving it with a null contract. Sorting out the cargo handling issue is the immediate priority for the retail operations with their investment in cargo stranded aboard.
Otherwise, ships will be available for hire at a rate supportive of operations. Hanjing Shipping apparently won the contracts bidding battle; but, lost the war by not being able to deliver based on their contracted price.
And why must we get all our junk from overseas??
It is mostly poor quality junk. Central Bank?? cough cough
Not too sure about that. I just took delivery of a 1500 lb metal lathe that cost less than quality ground round per lb.
IMO, there's a fire sale going on for items now that may cost a fortune later, if you're even able to get them later, if disruptions in transportation/tariffs/trade, like this one, continue to occur.
One of the first signs of a collapsing economy is somethings become hard to find and selection slim. I see it now at hardware stores and big box building supply stores. Even Walmart seems to be having issues keeping some items in stock.
See Venezuela.
If the flow of Chinese goods suddenly stops, a great number of things we used daily will be in short supply. It will take many years for our manufacturing to pick up the slack, not to mention the time it would take to train a capable workforce.
We lost jobs overseas over a period of years, it will likewise take time to bring those jobs back.
All of that is true. BUT, nothing motivates like necessity.
If I had my way, Middle East oil would be embargoed tomorrow, and China would face a 1000% import tariff.
We have allowed our Nation to decline in its capabilities. Some tough medicine would get us straight and keep it from happening again. AND it would stop funding people that just want to destroy us.
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