“Tremendous Ripple Effects” – Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade
by Tyler Durden
ZeroHedge.com
Sep 2, 2016
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.”
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.”
The Rest…HERE
