- American Citizen Held By Immigration Enforcement For Over 3 Years Without Lawyer
Submitted by Sovereign Man
This Week's Intelligence
American Citizen Held by Immigration Enforcement for Over 3 Years Without Lawyer
“I am an American citizen,” Davino Watson pleaded with ICE (Immigration and Customs Enforcement) agents, judges, and jailers. But to no avail; he was held in detention for over 3 years as a deportable illegal immigrant.
What did his court appointed lawyer have to say ? Nothing, because he was never assigned one. After all, illegal immigrants are not afforded the same rights of the accused and due process guaranteed to American citizens. The only problem: Davino Watson was in fact an American citizen.
Eventually, Watson was released and managed to get a meager court settlement of $82,500. But he would never see the money. Two weeks ago, an appeals court ruled that Watson is not entitled to the compensation. Turns out the statute of limitations expired–while he was still in ICE custody!
What this means:
What kind of monster working for the U.S. government appealed the decision to compensate this man $82,500 for the nightmare he was put through? Clearly, if the U.S. government falsely imprisons someone, all they need to do is keep them falsely imprisoned until the clock runs out on the two-year statute of limitations. The rights of the accused should apply to anyone on U.S. soil. And there should be no statute of limitations for “petition[ing] the government for a redress of grievances,” as the First Amendment guarantees.
Anyone detained on U.S. soil should be provided a lawyer. This would have prevented Davino from ever being wrongfully imprisoned by immigration officers. Due process should be applied anyway, because it is the right thing to do. But beyond that, as this nightmarish case shows, authorities can be wrong. Why should an agent be able to unilaterally make the call that someone is an illegal immigrant?
The man was basically assumed guilty of being an illegal immigrant without the state having to prove anything.
Let’s hope this goes on to the Supreme Court, so that no other American citizens have to endure such abuse.
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IRS Cashes in on Bitcoin Boom
Have you made money on Bitcoin? Did you give the IRS their cut? Here is another reason to hold Bitcoin long term, instead of treating it as a speculation. If you sold your Bitcoin high, and made some cash, the IRS considers that capital gains. And they most likely know who you are.
The IRS is now actively seeking those who made money on Bitcoin and did not report the gains to the IRS. They used a “John Doe summons” to collect all records from the Bitcoin trading website Coinbase.
In the past, the IRS used the same methods to bully Swiss banks into revealing American account holders.
What this means:
How is this type of summons legal? Isn’t the government supposed to abide by the Fourth Amendment, and describe particular things to be searched and seized? This is broad dragnet investigation into personal documents or “papers.” Since the 16th amendment created the income tax, Americans have put up with yearly investigations into their finances that completely trample the Fourth Amendment.
Just because the government says it is legal to tax income, suddenly the right to be secure in your person, houses, papers, and effects goes out the window.
Jail Time for Reproduction in Cambodia
Her body her choice? Not according to the Cambodian government. A Cambodian court has sentenced an Australian woman to prison time. No, she wasn’t running an abortion clinic. She was running a surrogacy clinic, for women who need another woman to carry their baby to term.
Cambodia outlawed surrogacy last year. The government claimed Cambodian women were being taken advantage of by foreigners looking for a surrogate. But two Cambodian women who were paid $12,000 each for their surrogacy testified that they were not coerced into carrying the babies.
What this means:
In Cambodia, abortion is legal for the first twelve weeks of pregnancy. So it is a woman's choice to get rid of her baby, but not to carry another woman’s baby. In trying to protect women from exploitation, Cambodia has destroyed a unique business. The business provided opportunity for the right women to make good money. It also provided a much needed service for women who cannot carry their babies to term.
But the government didn’t care. They simply outlawed the practice. They didn’t bother asking the women who depend on the income from surrogacy. And now a woman will spend a year and a half in prison because she facilitated a beneficial trade between two consenting adults.
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Federal Obamacare Money a State’s Right?
Funny how the House voted to repeal Obamacare six times while they knew Obama was there to veto it. There were also about 50 attempts to repeal or defund select pieces of Obamacare. Now that the President would actually sign the repeal, Congress can’t seem to drum up the votes.
In response, Trump could begin dismantling Obamacare by stopping cost sharing reduction payments. These funds go to states to support their health insurance exchanges. Trump has dubbed these payments insurance company bailouts.
But the courts just made it that much harder to actually dismantle the law.
States will be able to sue the federal government to continue collecting Obamacare funds. The ruling claims cost sharing reduction payments are crucial to the state run insurance exchanges. Because of the court ruling, if Trump cuts the payments, it would open the federal government to lawsuits.
What this means:
Tax dollars have quickly become a right, according to the courts. This shows how once a person–or a state–is on the dole, it isn’t so easy to get them off of it. The original case this ruling was based on actually stemmed from the Obama administration funding state exchanges without Congress approving the funds. But now, it may be illegal for Trump to remove this illegal funding. Obamacare made the government more powerful. Power is a drug. This is the government on drugs.
- Yes Congress, Afghanistan Is Your Vietnam
Does any member have the courage and vision to take responsibility?
Just shy of fifty years ago on November 7, 1967, the Senate Foreign Relations Committee, chaired by J. William Fulbright, Democrat of Arkansas, met in executive session to assess the progress of the ongoing Vietnam War. Secretary of State Dean Rusk was the sole witness invited to testify. Even today, the transcript of Rusk’s remarks and the subsequent exchange with committee members make for depressing reading.
Responding to questions that ranged from plaintive to hostile, Rusk gave no ground. The Johnson administration was more than willing to end the war, he insisted; the North Vietnamese government was refusing to do so. The blame lay with Hanoi. Therefore the United States had no alternative but to persist. American credibility was on the line.
By extension, so too was the entire strategy of deterring Communist aggression. The stakes in South Vietnam extended well beyond the fate of that one country, as senators well knew. In that regard, Rusk reminded members of the committee, the Congress had “performed its function…when the key decisions were made”—an allusion to the Tonkin Gulf Resolution, a de facto declaration of war passed with near unanimous congressional support. None too subtly, Rusk was letting members of the committee know that the war was theirs as much as it was the administration’s.
Yet Fulbright and his colleagues showed little inclination to accept ownership. As a result, the back-and-forth between Rusk and his interrogators produced little of value. Rather than illuminating the problem of a war gone badly awry and identifying potential solutions, the event became an exercise in venting frustration. This exchange initiated by Senator Frank Lausche, Democrat from Ohio, captures the overall tone of the proceedings.
Senator Lausche: “The debate about what our course in Vietnam should be has now been in progress since the Tonkin Bay resolution. When was that, August 1964?
Senator Wayne Morse (D-Ore.): “Long before that."
Senator Albert Gore, Sr. (D-Tenn.): “Long before that.”
Senator Fulbright: “Oh, yes, but that was the Tonkin Bay.”
Senator Lausche: “For three years we have been arguing it, arguing for what purpose? Has it been to repeal the Tonkin Bay resolution? Has it been to establish justification for pulling out? In the three years, how many times has the Secretary appeared before us?
Those hearings, those debates, in my opinion, have fully explored all of the aspects that you are speaking about without dealing with any particular issue. Now, this is rather rash, I suppose: If our presence in Vietnam is wrong, [if] it is believed we should pull out, should not one of us present a resolution to the Senate[?] …. [Then] we would have a specific issue. We would not just be sprawled all over the field, as we have been in the last three years.”
Put simply, Senator Lausche was suggesting that Congress force the matter, providing a forum to examine and resolve an issue that had deeply divided the country and that, Rusk’s assurances notwithstanding, showed no signs of resulting in a successful outcome. No such congressional intervention occurred, however. As a practical matter, Congress in 1967 found it more expedient to defer to the wishes of the commander in chief as the exigencies of the Cold War ostensibly required.
So the Vietnam War dragged on at great cost and to no good effect. Not until the summer of 1970 did Congress repeal the Tonkin Gulf Resolution. Even then, the gesture came too late to have any meaningful impact. The war continued toward its mournful conclusion.
To characterize congressional conduct regarding the Vietnam War as timorous and irresponsible is to be kind. There were individual exceptions, of course, among them Senator Morse who had opposed the Tonkin Gulf Resolution and Senator Fulbright who by 1967 openly regretted his vote in favor and recognized Vietnam for the disaster it had become. Collectively, however, legislators failed abjectly.
Well, with the passage of a half century, here we are again, back in the soup (or perhaps more accurately, the sand). With the United States currently mired in the longest armed conflict in the nation’s history—considerably longer than Vietnam—Senator Lausche’s proposal of 1967 just might merit a fresh look.
Of course, the Afghanistan War (ostensibly part of a Global War on Terrorism) differs from the Vietnam War (ostensibly part of the Cold War) in myriad ways. Yet it resembles Vietnam in three crucial respects. First, it drags on with no end in sight. Second, no evidence exists to suggest that mere persistence will produce a positive outcome. Third, those charged with managing the war have long since run out of ideas about how to turn things around.
Indeed, the Trump administration seems unable to make up its mind about what to do in Afghanistan. A request for additional troops by the senior U.S. field commander has been pending since February. He is still waiting for an answer. James Mattis, Trump’s defense secretary, has promised a shiny new strategy. That promise remains unfulfilled. Meanwhile, the news coming out of Kabul is almost uniformly bad. The war itself continues as if on autopilot. Lausche’s “sprawled all over the field” provides an apt description of where the United States finds itself today.
Where is the Congress in all of this? By all appearances, congressional deference to the putative prerogatives of the commander in chief remains absurdly intact—this despite the fact that the Cold War is now a distant memory and the post once graced by eminences like Truman and Eisenhower is now occupied by an individual whose judgment and attention span (among other things) are suspect.
A citizen might ask: What more does the Congress need to reassert its constitutional prerogatives on matters related to war? Surely there must be at least a handful of members who, setting aside partisan considerations, can muster the courage and vision to offer a rash proposition similar to Senator Lausche’s. Doing so has the potential not only to inaugurate debate on a conflict that has gone on for too long to no purpose, but also to call much needed attention to the overall disarray of U.S. policy of which Afghanistan is merely one symptom. Otherwise, why do we pay these people?
- ANTIFA Clashes With Police in Seattle
Content originally published at iBankCoin.com
A right wing group was marching in Westlake (just north of Seattle), so naturally the leftists led by ANTIFA in Seattle attempted to disrupt their little shindig.
As always, the masked men clad in black didn’t fail to provide its audience with ample supplies of degeneracy and violence.
Here are the lowlights.
With a ‘Go Back to Europe’ flag in the background, an gentleman from the ANTIFA organization burned an American flag.
Here they are trying to break through the police barrier of mountain bikes, most likely to say a few unkind words to the other gents in Westlake.
They caught one! An evil alt-right racist was snagged by ANTIFA, so naturally they tried to rob him of his phone.
Unable to break the barrier, ANTIFA resorted to third grade schoolyard assaults, spraying police with silly string.
The police get fed up with having silly string sprayed on their officers and decide to reply with flash bangs into the crowd.
- Bitcoin (BTC/USD) Breaks Above 4000
Bitcoin (BTC/USD) Weekly/Daily
Bitcoin (BTC/USD) continued surging higher over the weekend, smashing above the psychologically key whole figure resistance level of 4000. 4000 coincides with an upside target previously estimated by taking the height of the prior flag pole of roughly 1000, and adding it to the point of breakout above flag/channel resistance 2 weeks ago at 3000ish. With the weekly and daily RSI and Stochastics overbought, the weekly and daily MACD could begin tiring in the next few days. Going into the early part of the European morning, healthy profittaking on BTC/USD has just begun and can be expected to gather steam in the next few days after BTC/USD’s near month long rally.
Ethereum (ETH/USD) Weekly/Daily
Ethereum (ETH/USD) is beginning to show fatigue after its month long bounce going into today’s European morning. Significantly, while BTC/USD has been making new all-time highs for a few weeks now, ETH/USD has begun to hesitate in its current rally at the 61.8% Fib retrace of the fall from the June peak. Over the next month or so, ETH/USD still appears poised to retest its record high in June, but may begin seeing a healthy correction in the next few days. Longer term bulls will remain encouraged with the bottomish weekly RSI, Stochastics and MACD.
Click here for today’s technical analysis on USDCHF
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- Alt Right Activists Are Being Outed on Twitter and Fired From Their Jobs
Content originally published at iBankCoin.com
After the ‘alt-right’ (what the fuck does that mean anyway?) took to the streets, without masks, to defend confederate monuments and profess ‘white pride’, libshits on Twitter have been busy doxing them, which is internet jargon for outing them. The purpose of outing them, naturally, is to hope the so called ‘racist’ person will lose his job and his racist wife and kids could starve and die.
The circle of hate continues.
Via NY Post
Peter Cvjetanovic, 20, has gotten so much backlash as a result of “Yes, You’re Racist” identifying him on Saturday night as one of the “angry” torchbearers from Friday’s Emancipation Park rally that he tried to clear his name in an interview with a local TV station in his home city of Reno, Nevada.
“I did not expect the photo to be shared as much as it was,” he told Channel 2 News. “I understand the photo has a very negative connotation. But I hope that the people sharing the photo are willing to listen that I’m not the angry racist they see in that photo.”
White, who worked for the Top Dog restaurant chain, was the very first person that “Yes, You’re Racist” exposed this weekend. His employers said he was fired as a direct result of his involvement in the “Unite the Right” demonstrations.
“The actions of those in Charlottesville are not supported by Top Dog,” the restaurant said in a statement, which was posted outside their Berkeley location on Sunday.
Here’s your typical tweet by the “Yes, You’re Racist” account on Twitter. I am sure this guy/gal/both is a real hoot at parties.
— Yes, You're Racist (@YesYoureRacist) August 13, 2017
There are plenty others out there doing this; and it’s totally fair game. The people on the right do the same thing when the left head out into the streets to ‘bash fash.’
— I luv being Teamster (@JimKilbane) August 14, 2017
In summary, this is the correct way to conduct free speech these days, with a mask.
You thought you were being brave by showing your face. But like Batman said, the mask is to protect the people you love — not yourself.
These guys knew the deal, covered from head to toe.
- China Macro Data Misses Across The Board In July, Worst Since 2016
Confirming the credit impulse peak is passed (June’s surprise beats), China’s July macro-economic data is ugly. Retail Sales, Industrial Production, and Fixed Asset Investment all fell and missed notably. For now the reaction is absolutely nothing…
National Bureau of Statistics reports some ugly data for July:
- China July Industrial Output MISS Rises 6.4% Y/y; Est. 7.1% (range 6.5%-8.7%, 37 economists)
- Fixed-asset investment excluding rural households MISS up 8.3% y/y in Jan.-July; est. 8.6% (range 8.4%-9.3%, 35 economists)
- July retail sales MISS rose 10.4% y/y; est. 10.8% y/y (range 9.5%-11.5%, 37 economists)
China data is the weakest since 2016…
We wonder just how bad it will get…
For now there is zero reaction anywhere as it appears traders are numb to global nuclear war concerns, epic Japanese growth, and dismal Chinese data.
- Paul Craig Roberts Explains "How Conspiracy Theories Really Work"
In the United States «conspiracy theory» is the name given to explanations that differ from those that serve the ruling oligarchy, the establishment or whatever we want to call those who set and control the agendas and the explanations that support the agendas.
The explanations imposed on us by the ruling class are themselves conspiracy theories. Moreover, they are conspiracy theories designed to hide the real conspiracy that our rulers are operating.
For example, the official explanation of 9/11 is a conspiracy theory. Some Muslims, mainly Saudi Arabians, delivered the greatest humiliation to a superpower since David slew Goliath. They outsmarted all 17 US intelligence agencies and those of NATO and Israel, the National Security Council, the Transportation Safety Administration, Air Traffic Control, and Dick Cheney, hijacked four US airliners on one morning, brought down three World Trade Center skyscrapers, destroyed that part of the Pentagon where research was underway into the missing $2.3 billion, and caused the morons in Washington to blame Afghanistan instead of Saudi Arabia.
Clearly, the Saudi Arabians who humiliated America were involved in a conspiracy to do so.
Is it a believable conspiracy?
The ability of a few young Muslim men to pull off such a feat is unbelievable. Such total failure of the US National Security State means that America was blindly vulnerable throughout the decades of Cold War with the Soviet Union. If such total failure of the National Security State had really occurred, the White House and Congress would have been screaming for an investigation. People would have been held accountable for the long chain of security failures that allowed the plot to succeed. Instead, no one was even reprimanded, and the White House resisted all efforts for an investigation for a year. Finally, to shut up the 9/11 families, a 9/11 Commission was convened. The commission duly wrote down the government’s story and that was the «investigation».
Moreover, there is no evidence to support the official conspiracy theory of 9/11. Indeed, all known evidence contradicts the official conspiracy theory.
For example, it is a proven fact that Building 7 came down at freefall acceleration, which means it was wired for demolition. Why was it wired for demolition? There is no official answer to this question.
It is the known evidence provided by scientists, architects, engineers, pilots, and the first responders who were in the twin towers and personally experienced the numerous explosions that brought down the towers that is described as a conspiracy theory.
The CIA introduced the term «conspiracy theory» into public discourse as part of its action plan to discredit skeptics of the Warren Commission report on the assassination of President John F. Kennedy. Any explanation other than the one handed down was debunked as a conspiracy theory.
Conspiracy theories are the backbone of US foreign policy. For example, the George W. Bush regime was active in a conspiracy against Iraq and Saddam Hussein. The Bush regime created fake evidence of Iraqi «weapons of mass destruction», sold the false story to a gullible world and used it to destroy Iraq and murder its leader. Similarly, Gaddafi was a victim of an Obama/Hillary conspiracy to destroy Libya and murder Gaddafi. Assad of Syria and Iran were slated for the same treatment until the Russians intervened.
Currently, Washington is engaged in conspiracies against Russia, China, and Venezuela. Proclaiming a non-existent «Iranian threat», Washington put US missiles on Russia’s border and used the «North Korean threat» to put missiles on China’s border. The democratically elected leader of Venezuela is said by Washington to be a dictator, and sanctions have been put on Venezuela to help the small Spanish elite through whom Washington has traditionally ruled South American countries pull of a coup and reestablish US control over Venezuela.
Everyone is a threat: Venezuela, Yemen, Syria, Iran, Iraq, Afghanistan, tribes in Pakistan, Libya, Russia, China, North Korea, but never Washington. The greatest conspiracy theory of our time is that Americans are surrounded by foreign threats. We are not even safe from Venezuela.
The New York Times, the Washington Post, CNN, NPR, and the rest of the presstitutes are quick to debunk as conspiracy theories all explanations that differ from the explanations of the ruling interests that they serve.
Yet, as I write and for some nine months to date, the presstitute media has been promoting the conspiracy theory that Donald Trump was involved in a conspiracy with the president of Russia and Russian intelligence services to hack the US presidential election and place Trump, a Russian agent, in the White House.
This conspiracy theory has no evidence whatsoever. It doesn’t need evidence, because it serves the interests of the military/security complex, the Democratic Party, the neoconservatives, and permits the presstitutes to show lavish devotion to their masters. By endless repetition a lie becomes truth.
There is a conspiracy, and it is against the American people. Their jobs have been offshored in order to enrich the already rich. They have been forced into debt in a futile effort to maintain their living standards. Their effort to stem their decline by electing a president who spoke for them is being subverted before their eyes by an utterly corrupt media and ruling class.
Sooner or later it will dawn on them that there is nothing they can do but violently revolt. Most likely, by the time they reach this conclusion it will be too late.
For the gullible and naive who have been brainwashed into believing that any explanation that differs from the officially-blessed one is a conspiracy theory, there are available online long lists of government conspiracies that succeeded in deceiving the people in order that the governments could achieve agendas that the people would have rejected.
If liberty continues to exist on earth, it will not be in the Western world. It will be in Russia and China, countries that emerged out of the opposite and know the value of liberty, and it will be in those South American countries, such as Venezuela, Ecuador, and Bolivia that fight for their sovereignty against American oppression.
Indeed, as historians unconcerned with their careers are beginning to write, the primary lesson in history is that governments deceive their peoples.
Everywhere in the Western world, government is a conspiracy against the people.
- US Launches Quiet Crackdown On Cryptocurrencies
While all eyes were distracted with the Trump-demeaning headlines of the foreign sanctions bill, few spotted the hidden mandate that foreign governments monitor cryptocurrency circulations as a measure to combat "illicit finance trends" in an effort to "combat terrorism."
As Coinivore reports, the bill requires the governments to develop a “national security strategy” to combat the “financing of terrorism and related forms of illicit finance.”
Governments will be further required to monitor “data regarding trends in illicit finance, including evolving forms of value transfer such as so-called cryptocurrencies.”
According to the bill, an initial draft strategy is expected to come before Congress within the next year, and will see input from U.S. financial regulators, the Department of Homeland Security, and the State Department.
The bill calls for:
“[A] discussion of and data regarding trends in illicit finance, including evolving forms of value transfer such as so-called cryptocurrencies, other methods that are computer, telecommunications, or internet-based, cybercrime, or any other threats that the Secretary may choose to identify.”
Interestingly enough, Coindesk reports, “the new bill echoes another submitted in May as part of a wider Department of Homeland Security legislative package.” That measure, as CoinDesk reported at the time, calls for research into the potential use of cryptocurrencies by terrorists.
Like the DHS bill, the new sanctions law doesn’t constitute a shift in policy, but rather indicates that Congress is taking steps to explore the issue more closely.
Just more examples of the U.S. government trying to impose its will upon other nations and citizens who never lived there, as witnessed with the arrest of Alexander Vinnik in Greece, BTC-E’s alleged CEO according to the Department Of Justice.
- Hertz – The Final Nail In The Coffin
As a disciplinarian in the automotive sector, my focal point is concentrated on the study of used vehicle values and how they affect the automotive industry as a whole.
Measure the Cause to Predict the Effect
There are several subcategories that help predict the trajectory of used vehicle values that I use as leading indicators. For example, there is a very strong correlation between the performance of Hertz stock and used vehicle values. In June, while the stock was trading at multi-year lows due to excessive pessimism, I witnessed used vehicle values begin to stabilize. I also noticed the amount of vehicles available from Hertz at auction fall drastically. These events made me believe that a strategy change was at hand. Was Hertz reducing the size of their fleet as they have in the past during difficult times? Would Hertz focus on better utilization rates and other cost saving measures? My suspicions proved to be correct. The benefits of stabilizing used vehicle values plus fleet management changes will likely be felt through the end of Q3.
The reduced volume of rental vehicles at auction has supported higher used vehicle values. Additionally, falling new vehicle retail sales increase the demand for used vehicles. Fewer new vehicle sales result in fewer used vehicle trades forcing dealers to acquire more used inventory at wholesale auctions.
However, I believe the factors currently supporting used vehicle values are transitory, and we should consider what comes next.
Poor Residual Performance Prompts A Change In Fleet Mix
Base trim levels and underperforming passenger vehicle values were identified by Hertz as part of the reason for the excessive per unit monthly depreciation levels experienced in Q1 and Q2 of 2017. The fix? Purchase vehicles with more options, reduce the amount of compact cars and add more SUVs.
This is where it all goes wrong. Higher trim levels are accompanied by higher cost. Assuming that the added cost will be recuperated when the vehicles are retired should not be expected. This is because added options do not depreciate at the same pace as the base value of a vehicle. To use a simple example, a navigation system with an added cost of $2,000 in a new vehicle will only add about $500 of additional wholesale value. The same applies for upgraded stereos, sunroofs, etc. However, the available wholesale and retail supply of a vehicle in a specific trim level is more important than the trim level itself. As the concentration of any vehicle in a specific trim level grows, it will experience pricing pressure. To date, the damage done by Hertz and other rental companies when vehicles are retired en masse has been limited entry level vehicles. When higher value assets experience pricing pressure, they put pricing pressure on all related lower value assets. When these higher trim level vehicles are retired, more pricing pressure will be felt in the used vehicle market because in essence, Hertz has taken one step up on the asset value ladder.
Higher trim levels were not the only change to the fleet. Hertz, like many others experiencing the accelerated depreciation in passenger vehicles, has chosen to seek the safety of the better performing SUV segment. The compact car portion of the fleet was reduced by 5% and replaced with more expensive SUVs. The timing of this decision could not be worse. I have been very vocal about the misconception that the truck and SUV market is healthy. Trucks and SUVs are in a different cycle than passenger cars, but the values have already peaked and will continue to fall for the next 2 to 3 years. SUVs are more expensive than passenger cars, so the losses will be greater.
We’ve Been Here Before
During the 2008 and 2009, Hertz faced a very depressed used vehicle market. In response to the difficult market conditions, they decided to reduce their fleet size and keep the vehicles longer as stated in this New York Times article. During this difficult time, the peak depreciation per unit reached $332 (2009).
In Q1 of 2017, Hertz reported a depreciation rate per unit of $348 and the most recently, a depreciation rate of $353 for Q2.
In response to the rising per unit cost due to weakening used vehicle values, Hertz has decided to reduce the size of its fleet once again.
More importantly, Hertz has committed to only half of the new vehicle purchases thought to be necessary in 2018 as they cautiously measure the demand and the strength of the used vehicle market going forward. If used vehicle values continue to fall (as I fully expect they will), a very similar scenario to 2009 is possible allowing new vehicle sales into rental to fall drastically.
This has very negative implications for manufacturing when you consider that new vehicle sales into rental represented a little more than 1.8 million units in 2016.
The last time this happened for Hertz the story had a happy ending. The peak of monthly depreciation per unit in 2009 also marked the bottom of the stock price declines.
This was largely due to used vehicle values rebounding strongly which provided them with a seller’s market when their aging fleet needed to be retired.
What’s Different This Time?
Unlike 2009 when the US government intervened with Cash for Clunkers and the lowest interest rates in history, I don’t foresee a catalyst that will boost or even stabilize used vehicle values for the next 2-3 years. Most important of all, in 2009, when the depreciation for rental vehicles was at its peak, new vehicle sales had been declining for three years: A used vehicle is little more than a new vehicle that is sold then driven just beyond the curb. Weak new vehicle sales for a prolonged period of time created a shortage of late model vehicles with low mileage.
Last year was a record setting year for new vehicle sales. We have not experienced a sufficient decline in new vehicle sales which will be necessary to balance the supply of used vehicles. Similar to the 2008 period, I expect that Hertz will have to keep their current fleet longer than expected due to further used vehicle value declines. However, a fleet can only be allowed to age for so long due to higher wear and tear costs like tire and brake replacement. In conclusion, Hertz has surpassed the previous peak in per unit depreciation and now has to weather a 2 plus year declining used vehicle value storm with a more expensive mix of vehicles.
The greatest challenge for Hertz is not behind, it lies ahead, and it’s one that they may not be able to survive this time.
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