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“Tremendous Ripple Effects” – Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade
“Tremendous Ripple Effects” – Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade
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.”
Or, as America’s banks would call it, “get bailed out.” And, in taking a page right out of the 2008 bank bailout, the doom and gloom scenarios emerge:
“While the situation is still developing, the prospect of harm is significant and apparent,” Sandra Kennedy, president of the Retail Industry Leaders Association, wrote in a letter to the Department of Commerce and the Federal Maritime Commission. Hanjin’s recent bankruptcy filing “presents an enormous challenge to U.S. shippers,” she said, and “could have a substantial impact on consumers and the economy at large.”
…click on the above link to read the rest of the article…
Norway Pushes Panic Button: “We’re In A Crisis Now, We Can’t Deny That”
Norway Pushes Panic Button: “We’re In A Crisis Now, We Can’t Deny That”
We’ve spent quite a bit of time documenting Norway’s precarious balancing act in the face of slumping crude prices.
On the one hand, falling crude puts pressure on the krone which essentially allows the Norges Bank to compete in the regional currency wars without resorting to the same type of deeply negative rates as the ECB, the Riksbank, the Nationalbank, and the SNB. In short, a falling krone preserves export competitiveness in a world gone Keynesian crazy.
At the same time, falling crude puts enormous pressure on the country’s economy, which is heavily dependent on oil production
Additionally, collapsing crude revenue means the country will soon be forced to drawdown its $830 billion sovereign wealth fund (the largest in the world) to plug the various budget leaks caused by “lower for longer.”
Now, Norway has declared that its oil industry has entered a “crisis.”
“[The] industry is in a crisis now, we can’t deny that,” Bente Nyland, director general of the Norwegian Petroleum Directorate, told Bloomberg who reminds us that “Norway depends on oil and gas for about one-fifth of its economic output and nationwide, the petroleum industry has cut almost 30,000 jobs.”
The government last year announced plans to boost spending on the way to shoring up the flagging economy and officials says those measures – which are part of the reason why Norway will pull money from the SWF – should be sufficient to offset the pain from lower crude prices. “Finance Minister Siv Jensen says budget proposals put forward last year already contain ‘a lot of expansion’ and will help stem job losses,” Bloomberg continues, before noting that “the question is how quickly the economic adjustment brought on by a weaker krone will manifest itself.”
…click on the above link to read the rest of the article…
