Hong Kong Retail Sales Suffer “Very Enormous” Crash As Tourism Collapses
Hong Kong’s retail industry crashed again in October, as the city spirals lower into a recession that could lead to a collapse of the economy, reported Reuters.
Retail sales in October plunged 24.3% YoY, according to government data published on Monday. This was by far the worst print on record as the tourism industry in the last six months has evaporated.
Retail sales fell to $3.85 billion in October, a ninth consecutive month of declines, following violent clashes between pro-democracy protesters and police around shopping districts, malls, and eateries. Many Mainlanders now view Hong Kong as far too dangerous for travel, one of the main reasons why the retail industry has tanked.
“The local social incidents with increasing violence depressed consumption sentiment and severely disrupted tourism- and consumption-related activities,” a government spokesman said.
Financial Secretary Paul Chan Mo-po said retail sales decline will continue to be “very enormous” heading into the new year.
Last month, it was confirmed that Hong Kong stumbled into a recession for the first time in a decade in 3Q.
More than six months of protests and nearly 17 months of a trade war between the US and China dampened economic activity in the city.
With no end in sight to neither the protests and trade war, Hong Kong’s economy is expected to continue decelerating through 1Q20, will likely face a deeper slump than what was seen in the 2008 financial crisis.
“Domestic demand worsened significantly in the third quarter, as the local social incidents took a heavy toll on consumption-related activities and subdued economic prospects weighed on consumption and investment sentiment,” the government said last month.
GDP data was revised lower for full-year growth to -1.3%. That marked the first annual decline since 2009.
Chinese Mainlanders and tourists from across the world have canceled bookings, as retailers have been severely damaged from crashing sales, and the stock market continues to trend lower, which has been compounded by the ongoing trade war between the US and China.
Tourism numbers for October arrivals plunged 43.7% YoY to 3.31 million, according to the Hong Kong Tourism Board. September figures showed a 34.2% drop.
We’ve noted that luxury retailers have been hit the hardest, also putting pressure on the global diamond industry.
The Hong Kong Retail Management Association has told landlords to halve rents for retailers as the city’s economy is expected to plunge through 2020.
The government has deployed stimulus measures since August, but monetary policy is widely ineffective when social-economic chaos continues to gain momentum.
The outlook for 2020 could be absolutely disastrous for retailers in the city, there’s the chance that if the retail industry remains depressed, then a massive wave of store closures could nearing. This would also trigger enormous job losses and feed through the system, likely tilting the economy into a depression.
Imagine that, and it only took six months of violent protests in Hong Kong to trigger economic disaster. Now the real question remains, what are the global implications to the financial system of an imploding Hong Kong?
Ever since the U.S. signalled through its effective withdrawal from Syria that it now has little interest in becoming involved in military actions in the Middle East, the door has been fully opened to China and Russia to advance their ambitions in the region.
For Russia, the Middle East offers a key military pivot from which it can project influence West and East and that it can use to capture and control massive oil and gas flows in both directions as well.
For China, the Middle East – and, absolutely vitally, Iran and Iraq – are irreplaceable stepping stones towards Europe for its era-defining ‘One Belt, One Road’ project.
Earlier this week an announcement was made by Iraq’s Oil Ministry that highlights each of these factors at play, through a relatively innocuous-sounding contract award to a relatively unknown Chinese firm.
Specifically, it was announced that China Petroleum Engineering & Construction Corp (CPECC) has been awarded a US$121 million engineering contract to upgrade the facilities that are used to extract gas during crude oil production at the supergiant West Qurna-1 oilfield in Iraq, 50 kilometres northwest of the principal oil hub of Basra. The project is due to be completed within 27 months and aims to increase the capture of gas currently being flared across the site. Two factors that were not highlighted in the general announcement were firstly that CPECC is a subsidiary of China’s principal political proxy in the oil and gas sector, China National Petroleum Corp (CNPC), and secondly that the gas capture project will also include the development of the oil reserves at West Qurna 1. The current level of oil reserves at West Qurna 1 is just under nine billion barrels but, crucially, the site is part of the overall massive West Qurna reservoir that comprises at least 43 billion barrels of crude oil reserves.
“For China, it’s always all about positioning itself so that it is perfectly placed to expand its foothold,” a senior oil and gas industry source who works closely with Iraq’s Oil Ministry told OilPrice.com earlier this week.
Certainly it makes sense for Iraq to finally begin to monetise its associated gas that it has been burnt off for decades as a product of its burgeoning oil production. Aside from the negative environmental impact of this practice, there is the bizarre practical result that Iraq – which holds some of the biggest oil and gas reserves in the world – has to go to its neighbour Iran every year and beg for electricity imports to plug the huge power deficits that afflict it, particularly during the summer months. As it stands, Iraq has been steadily importing around one third of its total energy supplies from Iran, which equates to around 28 million cubic feet (mcf) of gas to feed its power stations. Even with these extra supplies, frequent daily power outages across Iraq occur and have been a prime catalyst for widespread protests in the past, including last year. The situation is also likely to become worse if change does not occur as, according to the International Energy Agency (IEA), Iraq’s population is growing at a rate of over one million per year, with electricity demand set to double by 2030, reaching about 17.5 gigawatts average.
Apart from this, burning gas associated with the production of crude oil is costing Iraq billions of dollars in lost revenues. It loses money in the first place because in order to try to minimise power shortages, Iraq is forced to burn crude oil directly at power plants that it could sell in the open market for currently well over US$55 per barrel (and the lifting cost per barrel in Iraq is just US$2 on average). In this context, the average volume of crude oil used for power generation has fallen in the past two years from a peak of 223,000 barrels per day (bpd) in 2015 but it still averages around 110,000 bpd, or around US$2.25 billion per year in value. It costs Iraq money in the second place because this associated gas that is flared could itself either be sold off directly or in LNG form or used as high-quality feedstock to finally truly kick-start the country’s long-stalled petrochemicals industry that itself could generate massive added-value product revenue streams. According to the IEA, Iraq has around 3.5 trillion cubic metres (tcm) of proven reserves of gas – mainly associated – which would be enough to supply nearly 200 years of Iraq’s current consumption of gas, as long as flaring is minimised. It added, though, that proven reserves do not provide an accurate picture of Iraq’s long-term production potential and that the underlying resource base – ultimately recoverable resources – is significantly larger, at 8 tcm or more.
China knows all of this and has come to the correct conclusion that it cannot lose by expanding its imprint in Iraq in such a way. “However, China is now very wary of being seen in Iran or Iraq as looking to make them into client states, although that’s what it plans for both, so it’s recalibrated its approach to being more of the stealth variety – that is, small, incremental steps but lots of them – until at one point in the future the governments [of Iran and Iraq] look around and wonder how China is calling all the shots all of a sudden,” said the Iraq source. Such is the case in West Qurna 1 in which, although the contract announced principally involves CPECC just building the infrastructure to capture gas rather than flare it, in reality also involves being allowed to take and use or sell the gas at an advantageous rate.
“China is looking at taking the gas with a discount of at least 30 per cent to the lowest mean one-year average market price at the hubs [principal gas hub pricing in Europe], and this then allows China to get more involved in the oil as well,” he added.
China certainly has the expertise for this – and the appetite – as it has put on hold for a while at least its plans to take over the development of Phase 11 of Iran’s supergiant South Pars gas field.
This large foothold in West Qurna 1 will very neatly fit in with China’s near-identical move just a couple of months ago in Iraq’s massive Majnoon oil field. It is this field that was the focus of the extremely similar announcement that two major new drilling contracts had been signed: one with China’s Hilong Oil Service & Engineering Company to drill 80 wells at a cost of US$54 million and the other with the Iraq Drilling Company to drill 43 wells at a cost of US$255 million. In reality, it will be China that is in charge of both, having given the funds required to the Iraq Drilling Company as a ‘fee’ for its own participation, according to the Iraq source. Also located very close to Basra – around 60 kilometres to the north-east – the supergiant Majnoon oilfield is one of the world’s largest, holding an estimated 38 billion barrels of oil in place. It is currently producing around 240,000 bpd. Longer term, though, the original production target figures for the Shell-led consortium still stand: the first production target of 175,000 bpd (already reached), and the plateau production for the site of 1.8 million bpd at some point in the 2030s. West Qurna 1, in the meantime, is producing around 465,000 bpd, with an original plateau target of 2.825 million bpd having been re-negotiated down, to 1.6 million bpd again by some point in the 2030s.
The deal for the oil that China ends up extracting from West Qurna 1 will be: “Absolutely in line with the deal it has for Majnoon,” the Iraq source told OilPrice.com earlier this week. Specifically, this will involve a 25-year contract but – critically – one that would only officially start two years after the signing date (yet to be determined), so allowing CNPC to recoup more profits on average per year and less upfront investment. The per barrel payments to China will be the higher of either the mean average of the 18 month spot price for crude oil produced, or the past six months’ mean average price. It will also involve at least a 10 per cent discount to China for at least five years on the value of the oil it recovers, in addition to the aforementioned 30 per cent discount for the gas it captures.
Barr Disputes Major Horowitz Finding Based On Durham, CIA Evidence
Attorney General William Barr will dispute a fundamental finding in the upcoming Inspector General report – namely that the FBI was justified in launching an operation Crossfire Hurricane, the agency’s official covert counterintelligence investigation into links between the Trump campaign and Russian officials, according to the Washington Post.
While IG Michael Horowitz is said to have concluded that the agency had enough information to launch the probe on July 31, 2016 after Trump campaign aide George Papadopoulos repeated a rumor that Russia had dirt on Hillary Clinton, Barr has reportedly told associates that Horowitz does not know about – or did not include – potentially exculpatory evidence held by other US agencies such as the CIA, which could alter his report’s conclusion.
In July, Fox News reported that exculpatory evidence existed which the FBI failed to include in surveillance warrant applications in which Papadopoulos denies having any contact with the Russians, when he was in fact told about the ‘Clinton dirt’ byJoseph Mifsud, a mysterious Maltese professor (and self-professed member of the Clinton foundation) who has ties to George Soros’ Open Society Foundation.
Many believe Papadopoulos was the victim of an entrapment scheme, by which Mifsud would seed him with information that Australian diplomat would later extract from him in a London bar, which made its way to the FBI – officially leading to the launch of Operation Crossfire Hurricane.
And the exculpatory evidence?Downer – a Clinton ally – likely recorded Papadopoulos saying he had no Russian contacts.
Have been contacted by about a dozen Australian journalists for comment on Clinton errand boy, Alexander Downer, and him being idiotic enough to spy on me with his phone. The transcript of my meeting with him will show Australia was willfully trying to sabotage Donald Trump.
Barr’s information also comes from a concurrent, ongoing investigation into the Obama DOJ conducted by Connecticut US Attorney John Durham.
Part of Barr’s reluctance to accept that finding is related to another investigation, one being conducted by Connecticut U.S. Attorney John Durham, into how intelligence agencies pursued allegations of Russian election tampering in 2016. Barr has traveled abroad to personally ask foreign officials to assist Durham in that work. Even as the inspector general’s review is ending, Durham’s investigation continues. –Washington Post
Barr, through Durham, has been investigating Mifsud – who told Italian media “I never got any money from the Russians: my conscience is clear,” adding “I am not a secret agent.” The Maltese professor is currently MIA.
As the Post‘s Devlin Barrett (who spoke with former FBI lawyer Lisa Page) notes, Barr’s disagreement with Horowitz not only sets the stage for a showdown within the DOJ, it will spark partisan outrage among Democrats who have already accused the AG of being Trump’s personal lawyer.
House Speaker Nancy Pelosi (D-Calif.) charged in September that Barr had “gone rogue.”
In recent weeks, Democrats have charged that Barr’s Justice Department was too quick to decide not to investigate Trump over his efforts to convince Ukraine’s president, Volodymyr Zelensky, to announce an investigation of Democratic presidential candidate Joe Biden. The Ukraine controversy has led to an impeachment inquiry. –Washington Post
Barr, meanwhile, has slammed Democrats for abusing legal procedures and Congressional standards in their pursuit of Donald Trump, saying earlier this month “In waging a scorched-earth, no-holds-barred war against this administration, it is the left that is engaged in shredding norms and undermining the rule of law.”
In April, Barr used the term “spying” to describe what the Obama DOJ did to the Trump campaign.
“I think spying on a political campaign is a big deal,” he told lawmakers. “I think spying did occur, but the question is whether it was adequately predicated and I’m not suggesting it wasn’t adequately predicated, but I need to explore that.“
For centuries, it has been an established tenet of Western jurisprudence that a person cannot be punished for a crime unless the government first convicts him of the crime in a court of law. After the Constitution called the federal government into existence, our American ancestors demanded that this principle be enshrined in the Bill of Rights because they were convinced that federal officials would end up violating it.
The Fifth Amendment states in part:
“No person shall be held to answer for a capital, or otherwise infamous crime, unless on presentment or indictment of a Grand Jury…. nor be deprived of life, liberty, or property, without due process of law.”
What is “due process of law”? It is a phrase whose origin stretches all the way to Magna Carta in the year 1215. It means “notice and hearing.” In a criminal case, that means the federal government is prohibited from depriving a person of life, liberty, and property without a formally issued grand-jury indictment and a formal trial, where the government must prove a person’s guilt beyond a reasonable doubt. In a civil case, it means that the government must provide advance notice and a formal hearing or trial before it can deprive a person of his property.
The centuries-old judicial principle of due process of law was destroyed when Congress enacted what are called asset-forfeiture laws, which are part of the decades-long federal effort to win the war on drugs, which is arguably the most failed, deadly, destructive, and racially bigoted government program in our nation’s history.
Realizing that all of their previous efforts to “win” the war on drugs had failed, the feds came up with what they considered was a brilliant idea, but one that actually has turned out to be one great big crooked and corrupt racket that forcibly takes money out of the pockets of law-abiding citizens and puts it in the coffers of state cops and the federal Drug Enforcement Administration, in direct contravention of the due process clause of the Fifth Amendment.
Here is how the system works.
The state police decide to stop a late-model car traveling down the highway that is being driven, say, by an African-American. The cop might come up with some excuse for the stop, such as a defective tail light. After asking for a driver’s license and car registration, the cop will ask the driver if it’s okay if he searches the vehicle. The driver, who has nothing to hide, says yes. The cop finds a case containing $10,000 in cash. The driver explains that he is on his way to buy a used car for his son.
What happens then? Under traditional rules of jurisprudence, nothing should happen except to let driver proceed on his way, with, at most, a citation for a defective tail light. The driver has not committed any other offenses. Under our system of justice, he should be free to be on his way.
But that’s not what happens under the asset-forfeiture law. The law permits the cops to assume that the cash must be “drug money.” Thus, the law now permits the cop to just take the driver’s money and transport it back to the police station, where the loot is divided up between the police department and the DEA.
Notice something important about this process: There are no criminal charges filed against the driver. There is no advance notice of the seizure. There is no hearing or trial before the seizure. People, especially poorer people, are having their money seized and taken from them by the cops in direct violation of the due process clause of the Fifth Amendment (as well as the due process clause of the Fourteenth Amendment).
The cops say to their victim: If you don’t like what we are doing to you, you can sue us. And they can. But as a practical matter, most don’t. They just resign themselves to the theft of their money. After all, most of them don’t have the money to hire a lawyer to file a lawsuit in the hope of getting their money back. Even if they do, they know that they’ll have to pay the lawyer $300-$500 an hour, with no assurance that they will prevail in the litigation. It’s just not worth it to most people, especially most poorer people.
It’s a classic case of highway robbery at the hands of the state. It’s also a classic example of how Americans have had their liberty destroyed by their own government, which was precisely what our ancestors were trying to prevent when they enacted the Bill of Rights.
“Grab Some Red Bull & Code”: Israel’s Bizarre Appeal For A ‘Worldwide Hackathon’ To Free Iran
“This is going to sound insane,” Israeli Defense Minister Naftali Bennett introduces during a social media message on Iran published Saturday. He explains that Iran blocked internet access after mass anti-government and economic grievance-driven protests spread to some 100 cities over the past weeks.
“Most social media sites in Iran are still banned as we speak,” he notes, while also describing a typical young Iranian’s frustration at being prevented from logging in. He then calls for a all programmers and techies to unite for a “worldwide hackathon” to free the Iranians from their regime-imposed internet ban.
“So, here is a crazy idea. How about every techie in the world — Israelis, Arabs, Iranians, Americans, Europeans and everyone else unite for one purpose: to help the long-suffering Iranian people gain open access to all social media. A worldwide hackathon for freedom,” Bennet says.
It’s among the more bizarre tactics over the years involving Israeli attempts to make a ‘hip’ appeal to the Iranian public to rise up against their government, which has also lately included the Israeli Embassy in the US using “Frozen 2” movie images to “remind people that the Iranian regime has frozen 80 million Iranians from the internet for a whole week.”
“Elsa has a message for the regime in Teheran – Let It Go!” the unusual appeal posted to Titter reads.
Thus it appears Tel Aviv is hoping some kind of home-grown revolution can topple the power of the Ayatollahs using crude Disney movie themed propaganda.
Defense Minister Bennett’s social media video also has a youthful and progressive sounding ‘rise up for regime change’ vibe to it. Making a global appeal, he says everyone “has a role to play” whether a senior IT engineer at an AI startup or merely someone “tinkering” in their own garage.
“Call up your most brilliant friends, grab some Red Bull and code through the night to do the impossible,” he urges, with his words also appearing in Farsi on the screen.
So far the social media reaction appears to be one of widespread mockery at the comic appearance and strangeness of the appeals. Likely few if any actual young Iranians believe that Tehran’s arch-enemy Israel is on the side of ‘the people’ and cares about their fate and future prospects for democracy.
The Jerusalem Post in a new report has also noted that inside Iran, Israel’s new Defense Minister Naftali Bennett is openly mocked on TV and social media as the “Zionist minister of war”.
For decades, New York City enforced uniquely onerous regulations that effectively prohibited licensed pistol and revolver owners from taking their weapons outside their homes, even when they were unloaded and stored in a locked container, unless they were traveling to or from one of seven gun ranges in the five boroughs. When several gun owners challenged those regulations, the city successfully defended their constitutionality for five years, obtaining favorable rulings from a federal judge and the U.S. Court of Appeals for the 2nd Circuit. But after the U.S. Supreme Court agreed to hear an appeal of that decision, the city rewrote its rules, backed a state law that eased restrictions on transporting guns, and urged the Court to drop the case, arguing that the regulatory and statutory changes made it moot. During oral arguments today in New York State Rifle & Pistol Association v. City of New York, several justices seemed skeptical of that claim, which is transparently aimed at avoiding a Supreme Court decision that could clarify the contours of the Second Amendment.
Chief Justice John Roberts asked Richard Dearing, the attorney representing New York City, whether a prior violation of the old transportation regulations might be held against a gun owner when he tries to renew his license. “It absolutely will not,” Dearing said, although the discretion to deny licenses for “good cause” seems to make that a real risk.
Justice Neil Gorsuch suggested that the possibility of obtaining compensation for economic damages related to the old regulations, although it was not specifically sought by the plaintiffs, might be enough to keep the case alive, as Principal Deputy Solicitor General Jeffrey Wall argued. “This litigation, I think, has taken five-plus years, and that [issue] has become relevant only at this late stage, after the city and the state have enacted a new law,” Gorsuch observed. “Why isn’t the prospect of allowing damages to be added to the complaint enough?”
Gorsuch also noted that it’s unclear whether the new rules allow gun owners to make stops while en route to ranges, competitions, or second homes outside the city. The city says such trips have to be “continuous and uninterrupted,” while the state law says gun owners have to be traveling “directly” to their destinations. If those restrictions might be read to preclude stops for coffee, gas, or bathroom breaks, Gorsuch wondered, “why isn’t there a live controversy remaining?” He suggested that “despite herculean, late-breaking efforts to moot the case,” there is still relief the plaintiffs could obtain only through a decision on the merits.
Dearing assured the justices that the NYPD would not look askance at “reasonably necessary” stops for coffee, gas, or bladder relief, prompting Gorsuch to wonder, “Is coffee reasonably necessary?” While that remark prompted laughter, Gorsuch emphasized his point: “What’s going to qualify? I’m just a little unclear about that.”
So was Dearing. Justice Samuel Alito, who like Gorsuch remarked upon “the quite extraordinary step of trying to moot the case after we granted review,” wondered about a gun owner who drives to a range in New Jersey and stops to “visit his mother for a couple of hours to take care of a few things for her.” Dearing was unsure whether that would be allowed. “I think that would have to be a question now to be litigated under the state law,” he said. “I hadn’t considered the mother or mother-in-law example before.”
Speaking for the plaintiffs, Paul Clement said Dearing’s assurances are not good enough to make the case moot. “The city took it on itself in Section 7 of the new regs to tell you what they, at least at that point, thought was sufficiently direct, which is ‘continuous and uninterrupted,'” he said. “They’re now making representations that the reg doesn’t mean what it seems to mean….My client[s] shouldn’t have to rely on those representations. They should get that in writing in an injunction that would be enforceable. That would be effectual relief.”
Perhaps the most telling exchange involved not the mootness issue but the constitutionality of the original rules:
Alito: Mr. Dearing, are the people in New York less safe now as a result of the enactment of the new city and state laws than they were before?
Dearing: No, I don’t think so. We made a judgment, expressed by our police commissioner, that it was consistent with public safety to repeal the prior rule and to move forward without it.
Alito: Well, if they’re not less safe, then what possible justification could there have been for the old rule, which you have abandoned?
Dearing did not have a very good answer, except to say that the city’s arbitrary restrictions on transporting firearms may have made its other rules a bit easier to enforce. As the petitioners note, “The only ‘evidence’ the City has ever mustered to support the tailoring of its policy is an affidavit from a former commander of the state licensing division hypothesizing, with no evidentiary support whatsoever, that the mere presence of a handgun—even unloaded, secured in a pistol case, separated from its ammunition, and stowed in the trunk of the car—might pose a public-safety risk in ‘road rage’ or other ‘stressful’ situations.” The city will have to do better than that if it wants to demonstrate that its rules were consistent with the constitutional right to keep and bear arms, which is why it is so desperate to stop the Supreme Court from considering that question.
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For decades, New York City enforced uniquely onerous regulations that effectively prohibited licensed pistol and revolver owners from taking their weapons outside their homes, even when they were unloaded and stored in a locked container, unless they were traveling to or from one of seven gun ranges in the five boroughs. When several gun owners challenged those regulations, the city successfully defended their constitutionality for five years, obtaining favorable rulings from a federal judge and the U.S. Court of Appeals for the 2nd Circuit. But after the U.S. Supreme Court agreed to hear an appeal of that decision, the city rewrote its rules, backed a state law that eased restrictions on transporting guns, and urged the Court to drop the case, arguing that the regulatory and statutory changes made it moot. During oral arguments today in New York State Rifle & Pistol Association v. City of New York, several justices seemed skeptical of that claim, which is transparently aimed at avoiding a Supreme Court decision that could clarify the contours of the Second Amendment.
Chief Justice John Roberts asked Richard Dearing, the attorney representing New York City, whether a prior violation of the old transportation regulations might be held against a gun owner when he tries to renew his license. “It absolutely will not,” Dearing said, although the discretion to deny licenses for “good cause” seems to make that a real risk.
Justice Neil Gorsuch suggested that the possibility of obtaining compensation for economic damages related to the old regulations, although it was not specifically sought by the plaintiffs, might be enough to keep the case alive, as Principal Deputy Solicitor General Jeffrey Wall argued. “This litigation, I think, has taken five-plus years, and that [issue] has become relevant only at this late stage, after the city and the state have enacted a new law,” Gorsuch observed. “Why isn’t the prospect of allowing damages to be added to the complaint enough?”
Gorsuch also noted that it’s unclear whether the new rules allow gun owners to make stops while en route to ranges, competitions, or second homes outside the city. The city says such trips have to be “continuous and uninterrupted,” while the state law says gun owners have to be traveling “directly” to their destinations. If those restrictions might be read to preclude stops for coffee, gas, or bathroom breaks, Gorsuch wondered, “why isn’t there a live controversy remaining?” He suggested that “despite herculean, late-breaking efforts to moot the case,” there is still relief the plaintiffs could obtain only through a decision on the merits.
Dearing assured the justices that the NYPD would not look askance at “reasonably necessary” stops for coffee, gas, or bladder relief, prompting Gorsuch to wonder, “Is coffee reasonably necessary?” While that remark prompted laughter, Gorsuch emphasized his point: “What’s going to qualify? I’m just a little unclear about that.”
So was Dearing. Justice Samuel Alito, who like Gorsuch remarked upon “the quite extraordinary step of trying to moot the case after we granted review,” wondered about a gun owner who drives to a range in New Jersey and stops to “visit his mother for a couple of hours to take care of a few things for her.” Dearing was unsure whether that would be allowed. “I think that would have to be a question now to be litigated under the state law,” he said. “I hadn’t considered the mother or mother-in-law example before.”
Speaking for the plaintiffs, Paul Clement said Dearing’s assurances are not good enough to make the case moot. “The city took it on itself in Section 7 of the new regs to tell you what they, at least at that point, thought was sufficiently direct, which is ‘continuous and uninterrupted,'” he said. “They’re now making representations that the reg doesn’t mean what it seems to mean….My client[s] shouldn’t have to rely on those representations. They should get that in writing in an injunction that would be enforceable. That would be effectual relief.”
Perhaps the most telling exchange involved not the mootness issue but the constitutionality of the original rules:
Alito: Mr. Dearing, are the people in New York less safe now as a result of the enactment of the new city and state laws than they were before?
Dearing: No, I don’t think so. We made a judgment, expressed by our police commissioner, that it was consistent with public safety to repeal the prior rule and to move forward without it.
Alito: Well, if they’re not less safe, then what possible justification could there have been for the old rule, which you have abandoned?
Dearing did not have a very good answer, except to say that the city’s arbitrary restrictions on transporting firearms may have made its other rules a bit easier to enforce. As the petitioners note, “The only ‘evidence’ the City has ever mustered to support the tailoring of its policy is an affidavit from a former commander of the state licensing division hypothesizing, with no evidentiary support whatsoever, that the mere presence of a handgun—even unloaded, secured in a pistol case, separated from its ammunition, and stowed in the trunk of the car—might pose a public-safety risk in ‘road rage’ or other ‘stressful’ situations.” The city will have to do better than that if it wants to demonstrate that its rules were consistent with the constitutional right to keep and bear arms, which is why it is so desperate to stop the Supreme Court from considering that question.
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We are facing a corporate debt bomb that is far, far greater than what we faced in 2008, and we are being warned that this “unexploded bomb” will “amplify everything” once the financial system starts melting down.
Thanks to exceedingly low interest rates, over the last decade U.S. corporations have been able to go on the greatest corporate debt binge in history. It has been a tremendous “boom”, but it has also set the stage for a tremendous “bust”. Large corporations all over the country are now really struggling to deal with their colossal debt burdens, and defaults on the riskiest class of corporate debt are on pace to hit their highest level since 2008. Everyone can see that a major corporate debt disaster is looming, but nobody seems to know how to stop it.
At this point, companies listed on our stock exchanges have accumulated a total of almost 10 trillion dollars of debt. That is equivalent to approximately 47 percent of U.S. GDP…
A decade of historically low interest rates has allowed companies to sell record amounts of bonds to investors, sending total U.S. corporate debt to nearly $10 trillion, or a record 47% of the overall economy.
In recent weeks, the Federal Reserve, the International Monetary Fund and major institutional investors such as BlackRock and American Funds all have sounded the alarm about the mounting corporate obligations.
We have never witnessed a corporate debt crisis of this magnitude.
Corporate debt is up a whopping 52 percent since 2008, and this bubble is continually growing.
And actually the 10 trillion dollar figure is the most conservative number out there. Because if you add in all other forms of corporate debt, the grand total comes to 15.5 trillion dollars. The following comes from Forbes…
Total corporate debt is actually much higher. Adding the debt of small medium sized enterprises, family businesses, and other business which are not listed in stock exchanges ads another $5.5 trillion. In other words, total US corporate debt is $15.5 trillion, 74% of US GDP.
Needless to say, this mountain of corporate debt is definitely not sustainable, and I have already noted that defaults are rising. One expert recently explained that all of this debt is “an exploded bomb” and that at some point something will come along to “trigger the explosion”…
“We are sitting on the top of an unexploded bomb, and we really don’t know what will trigger the explosion,” said Emre Tiftik, a debt specialist at the Institute of International Finance, an industry association.
Right now a lot of large corporations are so maxed out that they can barely service their debts. So when things start getting really bad for the economy, we could be facing a wave of defaults unlike anything we have ever seen before.
When asked about what this will mean during the next recession, a finance professor at the University of Pennsylvania warned that it will “make everything happen faster, larger, worse”…
“It’s going to amplify everything,” said Krista Schwarz, a finance professor at the University of Pennsylvania’s Wharton School. “It’s going to make everything happen faster, larger, worse. The recession would just be that much deeper.”
Of course I am being a bit silly, but the truth is that there is nothing silly about the giant mountain of debt that our society is facing.
In addition to our looming corporate debt crisis, U.S. consumers are 14 trillion dollars in debt, state and local government debt levels are at record highs, and the U.S. national debt just hit the 23 trillion dollar mark.
If you can believe it, we have actually added another 1.3 trillion dollars to the national debt just since last Thanksgiving…
That is the largest Thanksgiving-to-Thanksgiving increase in the debt in nine years. The last time the debt increased more from Thanksgiving to Thanksgiving was in 2010, when it increased by $1,785,995,360,978.10.
It also equals approximately $10,137.48 per household in the United States.
Adding 1.3 trillion dollars to the national debt in 12 months while things are still relatively stable is utter insanity, and what we are doing to future generations of Americans is beyond criminal.
Sen. Rand Paul is continuing to expose the rampant waste of tax dollars by our government agencies. In a special Fall edition of his Waste Report, the Kentucky senator highlights some of the most wasteful expenditures of our federal government, including a half-a-million-dollar toilet nobody could use and a $22 million project to bring Serbian cheeses up to international standards.
“Once again, The Waste Report takes a closer look at just some of what the federal government is doing with the American people’s hard-earned money, this time including stories of it continuing to turn over so many taxpayer dollars to the Washington Metropolitan Area Transit Authority, funding research that involves hooking Zebrafish on nicotine, buying textbooks for Afghan students that are subpar or sitting in warehouses, and more in a list that totals over $230 million,” states a press release from Sen. Paul’s office.
Of course it isn’t just the United States that is drowning under an ocean of red ink. As Bloomberg has detailed, when you total up all forms of debt in the world it comes to a grand total of 250 trillion dollars…
Zombie companies in China. Crippling student bills in America. Sky-high mortgages in Australia. Another default scare in Argentina.
A decade of easy money has left the world with a record $250 trillion of government, corporate and household debt. That’s almost three times global economic output and equates to about $32,500 for every man, woman and child on earth.
So if you have a household of four, your share comes to $130,000.
Are you ready to pay up?
In the end, all of this debt will never be paid off. Instead, the bubble will just keep ballooning until it inevitably bursts.
And when it finally bursts, many are warning of a complete and total meltdown. In fact, Rick Ackerman believes that “a Mad Max scenario” is likely…
Ackerman contends, “I am a little more bearish than that. I see a Mad Max scenario as inevitable. . . . I try not to think about it because we’ve all got lives to live and kids to raise. . . . When you go back to the calculous of deflation and that every penny of every debt must be paid, if not by the borrower then by the lender, we have already put ourselves into a condition where Social Security is going to fail. Medicare is going to fail. All the ‘just-in-time’ deliveries are going to be in jeopardy. Food from the grocery stores, one day shipping from Amazon, I don’t see how all these things can continue to operate in a condition other than in the false prosperity that we have now. We are at the pinnacle of affluence.”
I haven’t been able to find anyone that can logically argue that the road that we are currently on has a positive ending.
The truth is that we are headed for complete and total disaster, and the only real debate is about how long it will take for us to get there.
So enjoy these moments of relative stability while you still can, because it is only a matter of time before we go over the precipice.
