NeedWork: WeWork Expands Executive Purge Of Neumann Allies
The management purge that began with the firing of former We Company CEO Adam Neumann has gone international, Bloomberg reports.
WeWork has named a new head for its Japanese operations, replacing Chris Hill, who led Japanese operations for the company since it entered the market in 2017. Hill also served as ‘chief product officer’ at WeWork’s parent, the We Company, and has long been seen as a close ally of Neumann’s. He will be replaced by Kazuyuki Sasaki, a former managing director at WeWork Japan.
The management turnover comes as landlords cool to the idea of renting to the company, which could run out of money as soon as next year without the capital infusion that its now-cancelled IPO was supposed to provide. Earlier this week, BBG reported that WeWork had pulled out of a deal to rent office space at Central Quay, an office block in Dublin’s docklands neighborhood.
Hill is one of several executives who are leaving the company now that Neumann has stepped down from the CEO role (he’s still chairman of the board). Neumann stepped aside in a desperate attempt to assuage investors’ concerns about WeWork’s governance, though the company abandoned its IPO anyway. Hill had a family connection: He’s Neumann’s brother-in-law.
WeWork hasn’t broken down revenues by region, but Japan is one of the company’s most important markets, if only because it’s the home of the company’s biggest investor: SoftBank, the Japanese telecoms giant with a VC arm attached. SoftBank and its Vision Fund have together poured nearly $11 billion into the We Company (the firm was also reportedly behind WeWork’s decision to abandon its IPO and its CEO).
SoftBank also reportedly put up another $500 million for a 50% stake for the Japanese joint venture with WeWork. Using that money, WeWork Japan expanded into 21 locations across five cities in just 20 months (the firm is also reportedly designing SoftBank’s new headquarters on the waterfront in Tokyo).
Per BBG, the management purge has also claimed several other members of Neumann’s inner circle: including Michael Gross and Wendy Silverstein, the company’s vice chairman and co-head of its real estate investment arm, respectively. Neumann’s wife, Rebekah Paltrow Neumann, also departed the company after a stint as its “chief brand” and “chief impact” officer.
In a separate report, BBG revealed that WeWork is trying to repair its hard-partying reputation by toning down the launch party for its new European headquarters in London’s Waterloo district, where the company is preparing to open what it has billed as “the largest co-working space in the world.”
The launch ‘event’ will include food and drinks and run for ‘a couple of hours’ said one of BBG‘s sources, unlike previous WeWork parties, which sometimes continued late into the night, with copious amounts of drugs consumed.
Remember last month when San Francisco’s Board of Supervisors passed a resolution declaring the National Rifle Association a domestic terrorist organization and ordered city employees to “take every reasonable step to limit” business interactions with the NRA and its supporters?
The one that our David French labeled “a retaliatory public attack on constitutionally protected speech”?
The NRA sued, and lo and behold, San Francisco is backing down, before the suit even went to court.
In a formal memo to city officials, San Francisco mayor London Breed declared that “no [municipal] department will take steps to restrict any contractor from doing business with the NRA or to restrict City contracting opportunities for any business that has any relationship with the NRA.”
The memo declares, “resolutions making policy statements do not impose duties on City departments, change any of the City’s existing laws or policies, or control City departments’ exercise of discretion.”
“Through these actions and our public advocacy, we hope the message is now clear,” NRA CEO and executive vice president Wayne LaPierre said in a released statement.
“The NRA will always fight to protect our members and the constitutional freedoms in which they believe.”
“The memo serves as a clear concession and a well-deserved win for the First and Second Amendments of the United States Constitution,” says William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel for the NRA.
“It is unfortunate that in today’s polarized times, some elected officials would rather silence opposing arguments than engage in good-faith debate. The NRA – America’s oldest civil rights organization – won’t stand for that.”
The NRA is challenging a similar law passed by the Los Angeles city council that requiring city contractors to disclose any ties they have to the gun-rights group. Back in August, a federal judge denied a request by the city to dismiss the suit.
Auto Loans Stretch To Eight Years To Accommodate Irresponsible Car Buyers
About a third of all US auto loans issued today are stretching out to seven years, according to the Wall Street Journal. By comparison, a decade ago, the seven-year loan only made up about 10% of all loans.
Why? Because that’s the only type of loan increasingly more Americans can afford to amortize.
The longer loan durations are a clear sign that the American middle class is growing broker by the day, and, as we pointed out in our recent article about millennials putting items like sneakers and sweaters on installment plans, the US consumer’s creeping debt burden is, among other things, the result of auto prices growing rapidly while real incomes have barely budged. It is also the result of little to no financial education piled on top of a pathological shopping addiction.
Despite so-called hedonic adjustments, new safety and technological features being included with vehicles, like larger and more intricate multimedia displays, have made even the most basic vehicles unaffordable… without the help of debt that is. And of course, in true debt-laden American fashion, broke consumers are also drifting towards higher priced vehicles, like SUVs.
Meanwhile, as already cash-starved Americans seek ever-larger loans, the yield-starved Wall Street machine has responded to demand for vehicle loans in style: investors have been snapping up longer-term loans which are ultimately bundled into bonds and various structured products, allowing buyers to take out loans with a 7 and even 8 year term. In fact, dealers are at the point where they make more money on the loans than on the cars that they sell.
Meanwhile, the seven-year loan creates the illusion of affordability for many Americans, due to its longer amortization term and “smaller” monthly payment. It has also helped fuel car purchases that never would’ve happened with more traditional car term loans like three, five or six years.
Thanks to this menu of loans, Bronson Argyle, a professor at Brigham Young University said: “People can get into very expensive cars. Households are taking on, on average, more risk.”
Take Deven Jones: he walked into his local Honda dealership in early 2017 and walked out with a gray Honda Accord with heated leather seats. He wound up taking out a 72 month loan that cost him more than $500 a month. He had initially taken out the loan with his girlfriend, but when they split up, the monthly payment became his sole responsibility.
And despite paying $27,000 for the car, Jones took out a $36,000 loan with an interest rate of 1.9% to cover not only the purchase price, but debt on two other vehicles he had bought as a teenager. Why a teenager (!) would need to buy not one but two cars was not explained, even though that’s precisely the core issue here.
We probably don’t have to explain why so many Americans have to resort to debt just to buy a car: the reason is simple – only 18% of US households have enough liquid assets to cover the cost of a new car. The median income US household with a four year loan, 20% down and a payment under 10% of gross income – a fairly standard budget – can afford a car worth $18,390, excluding taxes.
And yet, that is only about half the size of the average new car loan over the last decade, which has grown to about $32,100 as car prices have risen. To make payments more manageable, the industry hasn’t lowered prices, why should it – instead, it has simply added more and more months to the end of auto loans.
As a result, the average loan now stretches for about 69 months, which is a record. In the first half of 2019, 1.5% of auto loans for new vehicles had terms of 85 months – 7 years – or longer. Just five years ago, these 8 or 9 year loans were “practically nonexistent”.
All this means is that more car buyers won’t pay off the debt before they trade in their car for new ones. About 33% of new car buyers who trade in their cars rollover debt from old vehicles into their new loans, according to Edmunds. That is up from about 25% before the financial crisis.
Understandably, auto debt has exploded since the financial crisis. US consumers now hold a record $1.3 trillion of debt tied to their cars, which is nearly double from $740 billion a decade ago.
As usual, we have the Fed to thank for this latest debt bomb. Even though the industry’s rebirth after the global financial crisis took place at a time when consumers didn’t have much cash to go car shopping, lower interest rates made it much easier to finance vehicles. This put buyers into showrooms and Wall Street was encouraged to buy the loans, as treasuries were heading towards 0%. The combination of low interest rates and investors looking for yield helped bring the auto industry back to life.
In other words, this is all the Fed’s fault, as lower rates served as a second type of bail out for the entire auto industry.
Last year, investors bought $107 billion in bonds backed by car loans, the first issuance record since 2005 and nearly triple the amount it bought two decades earlier. The outstanding pile of auto bonds has swollen to a record $264 billion.
This year, dealerships are making an average of $982 per new vehicle on financing versus $381 per vehicle on the sale. A decade earlier, financing brought in $516 per car and the sale made dealers $837.
The article explained how the debt enslavement process works, noting that financing companies spend extravagant resources focused solely on collecting:
Westlake Services LLC is among the biggest. Its owner, billionaire Don Hankey, started lending four decades ago when, as a dealer, he realized subprime buyers needed somewhere to get their financing. Westlake is still focused on these borrowers, but it has pursued more creditworthy customers as it has grown in recent years.
Much like a dealership, the company is obsessed with results. An automated system sends emails to employees with an image of a winking robot when they are late to work, unproductive or exceed expectations. Workers get monthly bonuses based on how they stack up against their goals. Screens around the office display auto loan applications as they come in.
Westlake needs to make sure the monthly payments on its auto loans keep flowing. Late borrowers can expect calls from the company immediately. Roughly 40% of its employees focus exclusively on collecting.
Some dealerships like Earl Stewart Toyota in North Palm Beach, Florida, walk each customer through every add-on before offering them financing. But Petrov Degan, the dealership’s financing manager, said he has seen other finance managers quote prices where the add-ons are already included. This is known as “packing the payment” in the industry.
Outside of the industry, it’s known simply as conning people.
Jose Mercado is an example of another customer who has overspent. He spent six months doing research on the Toyota RAV4 he wanted to buy, but ultimately was convinced by the dealership’s finance manager to take on $100 a month more in loans by buying options.
“I wish my research would have been deeper to be more ready,” he said, after falling victim to the hard sell.
You can read the Wall Street Journal’s full longform article here.
While China unveiled a new ‘doomsday’ nuclear bomb that can “strike the US within 30 minutes with ten warheads,” a top US General declared gender and race “diversity” to be a “warfighting necessity” against the homogeneous forces of China and Russia.
We’re truly screwed.
Billed as the “ultimate doomsday weapon,” the fearsome super nuke was displayed during China’s 70th anniversary parade in Tiananmen Square.
“The Dongfeng-41 is a 7,672 mph intercontinental ballistic missile that is said to have the furthest range of any nuclear missile and could reach the US in 30 minutes,” reports the Sun.
Meanwhile, in the United States, US Major General Lori Reynolds told 300 intelligence Marines at the 9th Annual Marine Corps Association and Foundation Intelligence Awards Dinner that “diversity” will make the difference in future war fighting.
“I believe a dramatic mix of talent, of all races, religions, backgrounds and genders will be the difference in the future,” said Reynolds.
She added that promoting diversity was crucial because it was an advantage China and Russia do not hold.
“We must talk about diversity as a warfighting necessity and tonight I’m declaring it essential to the information environment,” Reynolds said.
Earlier this year, Air Force Gen. David L. Goldfein also gave a speech in which he asserted that introducing diverse flesh colored band aids was a “warfighting imperative.”
I for one welcome our future Chinese overlords with open arms.
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Millions Of Dollars Missing After Denver Man’s Cattle And Marijuana Ponzi Scheme Collapses
It’s usually at the later innings of an economic cycle when Ponzi schemes unravel. As we’ve reported on numerous occasions, Ponzi implosions are gaining momentum as a recession could be dead ahead in 2020.
The latest Ponzi nightmare is located in Denver, where one baby boomer convinced a bunch of other baby boomers to give him tens of millions of dollars for cattle trading and marijuana businesses, enticing them with high yield returns, The Denver Post reported.
Settlement documents filed Monday in the U.S. District Court in Colorado, first retrieved by The Post, stated that, Mark Ray owned no cattle and had a pot business with insurmountable debts.
Ray funneled new investors’ dollars to pay off prior investors and even channeled funds into personal bank accounts to pay for things like medical bills, private flights, fancy cars, mansions, automobiles, and even had enough funds to cover the expenses of his own cattle, the filing said.
Ray allowed the U.S. Securities and Exchange Commission (SEC) to freeze his assets in the spring so that investigators could examine assets under management.
The Ponzi scheme began in 2014 and collapsed as early as March 2019.
Filings show Ray didn’t admit to any wrongdoing in his settlement with the SEC.
The filing claims that at the height of the scheme, more than $140 million per month was being transferred between accounts.
The pot business, called Universal Herbs, had insurmountable debts, according to the filing. Ray provided investors with detailed reports on the cattle and feedlot, but never really had any cattle, it was “mostly lies,” said The Post.
“In other words, there were, in fact, no cattle to support the vast majority of purported investments in cattle trading,” according to the filing. “Instead, Ray simply used new investor money to repay prior investors.”
Ray is a serial offender, was barred from selling securities in 2005 in the state of Illinois for running another Ponzi cattle scheme.
In the last several months, we’ve reported on a multi-million-dollar Ponzi scheme in Maryland that went bust.
One plus one may equal two, but if the student says three, you better not correct them, oppressor!
Math, in Seattle schools, will become a social justice course. But that’s not all. The U.S. government will be posited as a racist institution that must be destroyed. If this is taught to students, it’s indoctrination at its most destructive.
An Ethnic Studies Advisory Committee (ESAC), under the Seattle Public Schools Superintendent, published a preliminary Math Ethnic Studies framework document populated by district representatives that explains math as a racist study used to oppress students — and if you correct a student’s faulty math logic, you’re guilty.
Math is racist
The framework, created by various statewide districts, tackles four themes, including Power and Oppression and History of Resistance and Liberation.
At its core, the belief seems to be that “western” math is viewed as the only “legitimate expression” of math identity and that it’s used to “disenfranchise people and communities of color” and, consequently, it “erases the historical contributions of people and communities of color.”
None of this has anything to do with the math you should learn in K-12; these are topics left for a progressive college course you’d likely see at Evergreen State College.
The framework asks, “Where does Power and Oppression show up in our math experiences?” It wonders, “Who gets to say if an answer is right?”
Apparently, math is now subjective. Who are you to insist two plus two equals four? It goes on to ask “Who is Smart? Who is not Smart?” Answer: the person who says two plus two equals five is not yet smart and should be corrected, even if you think it oppresses them.
The framework believes math is manipulated to allow inequality and oppression to persist. They ask, “Who is doing the oppressing?” I think the answer is supposed to be the white, cis-gendered, heterosexual Christian man.
They ask, “How has math been used to resist and liberate people and communities of color from oppression?”
Ironically, if you subscribe to this social justice world view of math, and teach anyone that there’s no such thing as correct answers, you will be doing immeasurable and, yes, oppressive, harm to students.
History revised
These radical educators aren’t just looking to redefine the study of math. They seem ready to use history courses to present an aggressively progressive worldview, using socialist activist Howard Zinn teachings to indoctrinate kids.
The U.S. History Ethnic Studies Framework insists “the United States government was founded on racist intellectual premises and economic practices that institutionalized oppression of
people of color that continues to the present day.”
The document does not hide their goal of demonizing capitalism as exploitative and oppressive. They present mass incarceration as “the New Jim Crow” and want students to understand that “Europeans brought the dominant worldview values of “guns, the bible, private property and social hierarchy, and racial supremacy.”
Reasonable people can certainly argue that history has been whitewashed and we’d all benefit from a more holistic approach to how contemporary society has been shaped. But this document of possible recommendations goes way beyond that. This would be teaching an ideological perspective; this isn’t teaching history.
Seattle Public Schools responds
The ESAC is made up of a number of educators and was created due to a legislature mandate to “advise, assist, and make recommendations to the office of the superintendent of public instruction regarding the identification of ethnic studies materials.”
The committee will meet throughout the next year in order to meet a September 1, 2020 deadline to offer up their final recommendations. The Superintendent’s office notes that the document is a review of the work done by districts so far, but not necessarily a finalized recommendation list, which isn’t yet due.
“The Committee thought it was important to review work that has already been done,” Kate Payne, Director of Communications from the Superintendent’s Office. “The materials posted to our ESAC webpage were created by school districts around our state, and the Committee intends to review them as they the work move forward.”
“In creating a state-level framework and recommended resources, we hope to provide guidance to districts implementing Ethnic Studies as part of their class offerings. Again, the Committee has not yet created any documents, nor have they made any recommendations. They are in the process of gathering information about current practices and deciding on the best course of action to ensure our students and educators receive appropriate support. This is an elective class offering, and there are no requirements that school districts offer Elective Studies courses at this time.”
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“The Collapse Is Here”: Initial U.S. Auto Sales For September Paints An Ugly Picture
After a couple months of stagnation, automobile sales in the United States took a significant step backwards in September, according to Bloomberg.
This sets the stage for increased incentive spending by carmakers, who will be desperate to clear inventory heading into the end of the year.
Initial auto sales results from Toyota and Honda can only be described as disasters. Both companies suffered double digit declines in September, with Honda missing its estimated numbers by nearly 10% and Toyota missing its estimates by about 5%.
General Motors also missed estimates, posting an increase in sales of 6.3% versus estimates of 7.1%.
The performance of these automakers suggests that the picture could get even uglier when other companies report US results this week. Overall deliveries of cars and light trucks could come in worse than the 12% drop that is estimated.
These sharp misses continue to paint the picture of a global auto market that is steeped in recession, namely due to a broke consumer after a decade of low interest rates and endless incentives. Any prolonged slowdown would put significant pressure on auto dealers, who are already in a precarious position with outgoing model year vehicles “clogging their lots”.
Meanwhile, automakers already spent more than $4,100 per vehicle in incentives in the third quarter, marking a record.
The seasonally adjusted annualized rate came in at 17.2 million in September, which was up from 17 million in August – a small silver lining in the data so far.
Toyota’s 16% plunge in September was attributed to its namesake and Lexus brands dropping by double digit percentages. Deliveries fell for almost every model, including its best selling RAV4.
Honda immediately snapped back after logging its best US sales month in August. Its Pilot SUV sales fell 40%, while its Accord sedan sales fell 20%.
Nissan saw sales decline by 18%, technically a “beat” versus estimates of a 21% drop.
And possibly serving as the biggest canary in the coalmine, Subaru saw its nearly 8 year streak of monthly sales increases end after 93 months. Deliveries dropped 9.4% in September.
Hyundai also saw its vehicle sales drop 8.8%, despite it still expecting to have gained market share for the quarter.
General Motors ended September with inventory of 759,633 units.
We will update these U.S. numbers as they become available during the week.
And as a reminder, the auto recession isn’t just in the U.S. Chinese auto sales fell 14 times in the last 15 months under the weight of a trade war and a far overextended consumer and Mexico saw its total vehicle exports collapse 12.7% in August, a sharp drop for one of the biggest exporters of vehicles in the world.
If Mexico’s export data is any indication as what we have to look forward to in the rest of September’s sales numbers,look out below…
There is a whole lotta shaking going on in America right now, and many people are concerned about what that could potentially mean.
Could it be possible that the U.S. is entering a more seismically active time? This week alone, we have seen earthquake swarms in Texas, Oklahoma, San Francisco and the New Madrid fault zone. Of course earthquakes happen every day, but to see so many earthquake swarms happen in such diverse places within such a compressed period of time is definitely unusual. And what makes this even more unusual is the fact that Rosh Hashanah just ended. In fact, the earthquake swarm that we just witnessed in Texas started on Rosh Hashanah with a magnitude 4.0 quake near the town of “Snyder”…
In just over 12 hours, Texas experienced not one earthquake, but four, experts say.
Three quakes were centerednear the town of Snyder — just south of the Texas panhandle — with a fourth centered near the Fort Worth area, according to the United States Geological Survey. The first and strongest of the cluster hit just after 4:45 p.m. Monday about 12 miles north of Snyder and measured magnitude 4.0.
That was the strongest earthquake in Texas so far this year, and it was followed by a magnitude 3.8 earthquake near Snyder, a magnitude 3.2 earthquake just south of Fort Worth, and a magnitude 2.5 earthquake near Snyder.
Meanwhile, we have been witnessing unusual earthquake activity in Oklahoma as well.
Over the past 24 hours, the state has experienced 9 earthquakes of at least magnitude 1.5, and over the past 7 days there have been 40 such earthquakes.
Decades ago, Oklahoma was very quiet geologically, but things sure have changed over the past few years. If you can believe it, there have already been more than 1,000 earthquakes of at least magnitude 1.5 in Oklahoma so far in 2019.
Meanwhile, we continue to see unusual seismic activity along the California coast. This week, a swarm of five moderate earthquakes in the San Francisco area made headlines all over the nation…
A swarm of tiny temblors shook up California’s East Bay over the past 24 hours, the U.S. Geological Survey reports.
The agency reported at least five quakes registering from 2.0 to 2.9 magnitude, along with a slew of even smaller temblors registering below 2.0 magnitude.
The swarm centered on Dublin and San Ramon on the east side of San Francisco Bay.
Those earthquakes didn’t really cause any significant damage, but the concern is that all of this shaking could be leading up to something. I wrote about this potential danger a few days ago, and scientists assure us that “the Big One” is way overdue and that at some point our time will run out.
Last but certainly not least, an earthquake swarm just hit the New Madrid fault zone as well.
It started with a 2.6 magnitude temblor around 11:18 a.m. near Lilbourn, a small city just north of Missouri’s boot heel, according to the United States Geological Survey. A mere three minutes later, a 1.1 magnitude quake rumbled nearby.
Just before 11:30 a.m., a 2.7 magnitude quake rattled southwest of Lilbourn followed by a 1.8 magnitude quake only five minutes later, the USGS says.
It would be 23 minutes before the next quake, another magnitude 2.7, shook an area just west of Lilbourn, the USGS says.
For those that don’t know, southeastern Missouri sits right along the New Madrid fault zone, and in the early portion of the 19th century this part of the country was shaken by four of the largest earthquakes in U.S. history…
The New Madrid Seismic Zone is the most active earthquake zone east of the Rocky Mountains and spans southeastern Missouri, northeastern Arkansas, western Tennessee, western Kentucky, and southern Illinois.
Between 1811 and 1812, the New Madrid Fault experienced some of the largest quakes in history. And although they originated in the Mississippi Valley, they rang church bells in Boston and shook New York City — over 1,000 miles away.
Even then-President James Madison and his wife Dolley reportedly felt shaking at the White House.
A number of years ago, the U.S. government conducted a major five day operation known as “National Level Exercise 11” in which they attempted to simulate what a major earthquake along the New Madrid fault zone would look like…
In May, the federal government simulated an earthquake so massive, it killed 100,000 Midwesterners instantly, and forced more than 7 million people out of their homes. At the time, National Level Exercise 11 went largely unnoticed; the scenario seemed too far-fetched — states like Illinois and Missouri are in the middle of a tectonic plate, not at the edge of one. A major quake happens there once every several generations.
Could you imagine what such a disaster would mean for our country?
Plus, it is important to note that there are 15 nuclear reactors operating within the New Madrid fault zone, and so in such a scenario we could potentially be facing the equivalent of 15 Fukushima nuclear disasters.
As long as the earthquakes rattling our nation remain small, they won’t be a problem.
But really big earthquakes are often preceded by smaller “foreshocks”, and scientists tell us that it is just a matter of time until the next great quake hits America.
So let us hope that all of this shaking settles down, because we want that day to be put off for as long as possible.
“Hong Kong Is A Disaster” – Retail Sales Routed As Bitcoin Volumes Hit Record High
European luxury-goods stocks tumbled as data show the pro-democracy protests in Hong Kong are taking an increasing toll on the city’s economy, with retail sales crashing by a record amount in August.
As Goldman Sachs details, August retail sales growth (in value terms) was down 23% yoy, the largest decline on record. On a month-over-month basis after seasonal adjustment, the value of retail sales contracted by around 12.5% in August vs -5.2% in July.
Clothing and footwear, department stores and jewellery, watches and clocks retail sales saw material deterioration. Jewellery, watches and clocks retail sales contracted 47.4% in August, vs -24.3% in July. Clothing and footwear retail sales were down 32%yoy, vs -13% yoy in July, and department store sales declined by 29.9% yoy in August, vs -10.4% yoy in August. Supermarkets, food/drinks and fuel retail sales year-over-year growth improved slightly in August vs July.
In volume terms, retail sales growth showed similar patterns. Headline retail sales volume growth was -25.3% year-over-year, the largest decline on record. Jewellery, watches and clocks showed the biggest deceleration to -50.7% yoy in August, vs -26.4% yoy in July.
And this has had a direct impact on Europe’s luxury-good makers… broadly.
Swatch falls 2.8% in Zurich, extending YTD losses to 11%, among the biggest losers on Switzerland’s benchmark SMI Index
Shares in Swiss peer Richemont, which owns brands such as Cartier, down 2%.
Moncler eases 1.9% in Milan while Hugo Boss sheds 2.4% in Frankfurt; LVMH (-1.9%), Kering (-2.9%) and Hermes (-2.3%) all down in Paris.
Burberry down 2.5% as of 11:05 a.m. in London trading, among the biggest decliners on the Europe Stoxx 600 Personal & Household Goods Index.
And Prada closed down 2% on the Hong Kong Exchange.
As Bloomberg reports, Co-CEO and designer Miuccia Prada said “Hong Kong is a disaster, like for everybody,” speaking at a runway show in Paris Tuesday.
“You can’t compensate those kind of numbers,” said Lorenzo Bertelli, Prada’s head of marketing and communication.
And judging by last night’s escalation, things will not improve anytime soon, and as Goldman concludes, the ongoing street protests since June have continued to affect business and leisure travel and spending (and recently cut our forecast for HK real GDP growth in Q3 to -2% yoy, and our 2019 full year GDP growth forecast is now at -0.6% yoy.)
Additionally, speaking at a conference in Amsterdam this morning, Kyle Bass, the founder of Dallas-based hedge fund Hayman Capital Management, confirms Hong Kong faces a “severe” economic decline, adding that “a significant amount of capital and investment to leave Hong Kong in next 12 to 18 months.”
Bass says Hong Kong’s economy is being drained of liquidity and predicts that its FX reserves will worsen for September and October, calling Hong Kong’s economy a “giant question mark.”
And in case you wondered where the capital was flowing…BTC Demand in Hong Kong Reaches Record Highs:
As eToro noted, while it’s hard to identify the source of trading volume, spiking demand for BTC could be a sign that some Hong Kong protesters are seeing bitcoin as a way to opt-out of the local economy that is run by governments and financial institutions
Graham Asks Foreign Countries To Cooperate With Russiagate Origin Investigation
Following a Tuesday report by the New York Times that President Trump “pressed” Australia’s Prime Minister into cooperating with Attorney General William Barr’s investigation into the origins of the Mueller probe, the MSM lost their marbles – bloviating (without articulating) that Trump’s discussion was beyond the pale, and Trump clearly coerced him into something.
Less than an hour later, Australian PM Scott Morrison put their aspersions to bed – stating “The Australian Government has always been ready to assist and cooperate with efforts that help shed further light on the matters under investigation. The PM confirmed this readiness once again in conversation with the President.”
To be clear, the left feels that any investigation of potential FBI wrongdoing is off-limits. Perhaps they’re afraid of what Barr and his team may uncover?
On Wednesday, perhaps in an effort to get ahead of Democrat efforts to undermine Barr, Senate Judiciary Committee Chairman Lindsey Graham (R-SC) sent a letter to three foreign governments, urging them to cooperate with the Justice Department’s probe into the origins of the Russia probe.
Graham’s letter was addressed to Italy, Austria and the United Kingdom.
“That the attorney general is holding meetings with your countries to aid in the Justice Department’s investigation of what happened is well within the bounds of his normal activities. He is simply doing his job,” wrote Graham, adding “your country’s continued cooperation with Attorney General Barr as the Department of Justice continues to investigate the origins and extent of foreign influence in the 2016 U.S. presidential election.”
Graham noted in his letter that “it appears” the United States used “foreign intelligence as part of their efforts to investigate and monitor the 2016 election.”
Graham had said earlier this week that he was planning to send the letters in the wake of the New York Times reporting that Trump had reached out to the Australian government to assist Barr as part of the DOJ investigation. The Justice Department subsequently confirmed the report.
“This New York Times article is an effort to stop Barr. … What are they afraid of? This really bothers me a lot that the left is going to try to say there’s something wrong with Barr talking to Australia, Italy and the United Kingdom,” Graham said during a Fox News interview earlier this week. –The Hill
Barr has reportedly been in contact with UK and Italian officials.
In May, President Trump said he wanted Attorney General William Barr to investigate the UK, Australia and Ukraine for their roles in the ‘greatest hoax in the history of our country.’
“It’s the greatest hoax probably in the history of our country and somebody has to get to the bottom of it. We’ll see. For a long period of time, they wanted me to declassify and I did,” he said.
After the Mueller report made clear that Trump and his campaign had in no way conspired with Russia during hte 2016 election, Democrats immediately pivoted to whether Trump obstructed the investigation. Trump and his supporters, however, immediately pivoted to the conduct of the US intelligence community, including the involvement of foreign actors and possibly their governments.
Meanwhile, an email exchange in late 2016 referred to the infamous Steele Dossier as “crown material,” suggesting UK intelligence may have played a role in the opposition research conducted by former MI6 spy Christopher Steele on behalf of the Clinton campaign.
Moreover, much of “Operation Crossfire Hurricane” – the FBI’s official investigation into the Trump campaign – occurred on UK soil, which is perhaps why the New York Times reported last September that the UK begged Trump not to declassify ‘Russiagate’ documents ‘without redaction.’
Shortly after he announced his involvement with the Trump campaign, aide George Papadopoulos was lured to London in March, 2016, where Maltese professor and self-described Clinton foundation memberJoseph Mifsud fed him the rumor that Russia had damaging information on Hillary Clinton. It was later at a London bar that Papadopoulos would drunkenly pass the rumor to Australian diplomat Alexander Downer (who FBI agent Peter Strzok flew to London to meet with the day after Crossfire Hurricane was launched).
Two weeks later, Papadopoulos would be bilked for information by Australian diplomat (another Clinton ally) Alexander Downer at a London bar, who relayed the Russia rumor to Australian authorities, which alerted the FBI (as the story goes), which ‘officially’ kicked off the US intelligence investigation.
No wonder Democrats are freaking out about Barr’s investigation…
