Supply-Chain
Contagion Arrives - "Global Trade" Roiled, Cargo-Owners Panic In Wake
Of Hanjin Bankruptcy - (www.zerohedge.com) We
did not have long to wait for the aftershocks to emerge. As we first reported
last night, just hours after the insolvency news hit the tape, three Hanjin ships promptly found themselves stranded off the California coast, stuck - together with
the hundreds of tons of cargo - in legal and financial limbo. That was just the
beginning and as Reuters updates this morning, more Hanjin vessels have been
seized at Chinese ports, "further roiling the industry as freight
rates jump and manufacturers scramble for alternatives." The Korea
International Trade Association said on Thursday that about 10 Hanjin vessels
in China have been either seized or were expected to seized by charterers, port
authorities or other parties. That adds to one other ship seized in Singapore
by a creditor earlier this week.
Elon Musk Faces Cash Squeeze at Tesla,
SolarCity - (www.wsj.com) Two
pillars of Elon Musk’s empire are facing financial crunches as the
entrepreneur seeks to combine the two companies through a controversial
acquisition. Tesla Motors Inc., which
makes electric cars, disclosed in a securities filing Wednesday that it has to
pay $422 million to its bondholders in the third quarter, and that it will
raise additional money by the end of the year. The purpose of the additional
capital, among other things, is to support its proposed merger with home-solar company SolarCity Corp. Mr. Musk is the chairman of
both companies. The filing also revealed that in recent weeks, 15 institutional
investors passed on either acquiring SolarCity or injecting equity into it. The
company is having difficulty tapping the public markets amid the proposed
merger and is facing a liquidity squeeze, the filing indicated. SolarCity’s
cash declined to $146 million on June 30, from $421 million a year earlier, the
company has reported.
Bank of Japan Has an 8.7 Trillion Yen
Balance-Sheet Problem - (www.bloomberg.com) There’s
an 8.7 trillion yen ($84 billion) gap between the value of government bond
holdings on the Bank of Japan’s balance sheet and their face value.
While not an immediate problem because the BOJ’s income can cover the losses,
the widening gap raises questions about the sustainability of the central
bank’s bond purchases, which Governor Haruhiko Kuroda has said could be
expanded. The costs of the central bank’s record stimulus are mounting, while
its chief goal -- spurring inflation to 2 percent -- appears as far away as it
was when Kuroda took the helm in 2013. The BOJ is in the midst of reviewing its
policy before a board meeting later this month, but the governor has said there
will be no scaling back of his monetary program.
Hanjin’s Ships Get Stranded in High Seas,
Roiling Supply Chain - (www.bloomberg.com) Hanjin
Shipping Co.’s vessels are getting stranded at sea after the South Korean
container mover filed for court protection, roiling the supply chain of
televisions and consumer goods ahead of the holiday season. LG Electronics Inc.
is trying to find new carriers for its goods, the world’s second-largest
manufacturer of televisions said. Shipments through Hanjin account for between
15 percent and 20 percent of LG’s deliveries to America.
Hyundai Merchant Marine Co., the nation’s second-biggest container line,
stepped in saying it plans to
add 13 more vessels to ease the squeeze.
We’ve
Reached the “Zero Point” of Debt Creation - (www.wolfstreet.com) Forty-five
years and counting: We’ve been on a debt spree since the early 1970s when
we went off the gold standard, covering every possible angle. Trade deficits,
government deficits, unfunded entitlements, private debt – you name it! Our
total debt has grown 2.5-times GDP since 1971. How could economists not see
this as a problem? How is this the least bit sustainable? It isn’t. We’re
hurtling toward a massive financial crisis, and all we have to show for it are
financial asset bubbles destined to burst. And when they do, they’ll wipe out
the artificial wealth they’ve created for many decades… in just a few years, as
they did from late 1929 into late 1932!
Dilma Rousseff Ousted in Historic Brazil Impeachment Trial - (www.bloomberg.com)
America’s Corporate Bond Party Goes on as Sales Near $1 Trillion - (www.bloomberg.com)
Rajoy Loses Confidence Vote as Spain’s Political Impasse Endures - (www.bloomberg.com)
Mexico Central Bank Cuts Growth Forecast as Manufacturing Slows - (www.bloomberg.com)
China Engages in 'Backdoor QE' as Monetary Policy Shifts, Says Jefferies - (www.bloomberg.com)
Global bank stocks extend summer rally - (www.ft.com
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