- How A U.S. Nuclear Strike Works
If President Trump decided to launch a nuclear strike, how swiftly could he put things in motion? Would he have the sole power alone to launch a nuclear missiles?
Statista’s Niall McCarthy notes that, according to an analysis undertaken by Bloomberg, the U.S. president’s power is absolute in this situation – he or she gives the order and the Pentagon is obliged to go along with it.
The following infographic provides an overview of the steps necessary to make it happen.
You will find more infographics at Statista
It can take as little as five minutes from the president’s decision to strike to intercontinental missiles launching from their silos.
When it comes to submarine-launched weapons, however, it takes a little bit longer – approximately 15 minutes.
- The 12-Step Method Of Regime Change
Authored by Vijay Prashad via Counterpunch.org,
On 15 September 1970, US President Richard Nixon and National Security Advisor Henry Kissinger authorised the US government to do everything possible to undermine the incoming government of the socialist president of Chile, Salvador Allende. Nixon and Kissinger, according to the notes kept by CIA Director Richard Helms, wanted to ‘make the economy scream’ in Chile; they were ‘not concerned [about the] risks involved’. War was acceptable to them as long as Allende’s government was removed from power. The CIA started Project FUBELT, with $10 million as a first installment to begin the covert destabilisation of the country.
CIA memorandum on Project FUBELT, 16 September 1970.
US business firms, such as the telecommunication giant ITT, the soft drink maker Pepsi Cola and copper monopolies such as Anaconda and Kennecott, put pressure on the US government once Allende nationalised the copper sector on 11 July 1971. Chileans celebrated this day as the Day of National Dignity (Dia de la Dignidad Nacional). The CIA began to make contact with sections of the military seen to be against Allende. Three years later, on 11 September 1973, these military men moved against Allende, who died in the regime change operation. The US ‘created the conditions’ as US National Security Advisor Henry Kissinger put it, to which US President Richard Nixon answered, ‘that is the way it is going to be played’. Such is the mood of international gangsterism.
Phone Call between Richard Nixon (P) and Henry Kissinger (K) on 16 September 1973.
Chile entered the dark night of a military dictatorship that turned over the country to US monopoly firms. US advisors rushed in to strengthen the nerve of General Augusto Pinochet’s cabinet.
What happened to Chile in 1973 is precisely what the United States has attempted to do in many other countries of the Global South. The most recent target for the US government – and Western big business – is Venezuela. But what is happening to Venezuela is nothing unique. It faces an onslaught from the United States and its allies that is familiar to countries as far afield as Indonesia and the Democratic Republic of Congo. The formula is clichéd. It is commonplace, a twelve-step plan to produce a coup climate, to create a world under the heel of the West and of Western big business.
Step One: Colonialism’s Traps.
Most of the Global South remains trapped by the structures put in place by colonialism. Colonial boundaries encircled states that had the misfortune of being single commodity producers – either sugar for Cuba or oil for Venezuela. The inability to diversify their economies meant that these countries earned the bulk of their export revenues from their singular commodities (98% of Venezuela’s export revenues come from oil). As long as the prices of the commodities remained high, the export revenues were secure. When the prices fell, revenue suffered. This was a legacy of colonialism. Oil prices dropped from $160.72 per barrel (June 2008) to $51.99 per barrel (January 2019). Venezuela’s export revenues collapsed in this decade.
Step Two: The Defeat of the New International Economic Order.
In 1974, the countries of the Global South attempted to redo the architecture of the world economy. They called for the creation of a New International Economic Order (NIEO) that would allow them to pivot away from the colonial reliance upon one commodity and diversify their economies. Cartels of raw materials – such as oil and bauxite – were to be built so that the one-commodity country could have some control over prices of the products that they relied upon. The Organisation of Petroleum Exporting Countries (OPEC), founded in 1960, was a pioneer of these commodity cartels. Others were not permitted to be formed. With the defeat of OPEC over the past three decades, its members – such as Venezuela (which has the world’s largest proven oil reserves) – have not been able to control oil prices. They are at the mercy of the powerful countries of the world.
Step Three: The Death of Southern Agriculture.
In November 2001, there were about three billion small farmers and landless peasants in the world. That month, the World Trade Organisation met in Doha (Qatar) to unleash the productivity of Northern agri-business against the billions of small farmers and landless peasants of the Global South. Mechanisation and large, industrial-scale farms in North America and Europe had raised productivity to about 1 to 2 million kilogrammes of cereals per farmer. The small farmers and landless peasants in the rest of the world struggled to grow 1,000 kilogrammes of cereals per farmer. They were nowhere near as productive. The Doha decision, as Samir Amin wrote, presages the annihilation of the small farmer and landless peasant. What are these men and women to do? The production per hectare is higher in the West, but the corporate take-over of agriculture (as Tricontinental: Institute for Social Research Senior Fellow P. Sainath shows) leads to increased hunger as it pushes peasants off their land and leaves them to starve.
Step Four: Culture of Plunder.
Emboldened by Western domination, monopoly firms act with disregard for the law. As Kambale Musavuli and I write of the Democratic Republic of Congo, its annual budget of $6 billion is routinely robbed of at least $500 by monopoly mining firms, mostly from Canada – the country now leading the charge against Venezuela. Mispricing and tax avoidance schemes allow these large firms (Canada’s Agrium, Barrick and Suncor) to routinely steal billions of dollars from impoverished states.
Step Five: Debt as a Way of Life.
Unable to raise money from commodity sales, hemmed in by a broken world agricultural system and victim of a culture of plunder, countries of the Global South have been forced to go hat in hand to commercial lenders for finance. Over the past decade, debt held by the Global South states has increased, while debt payments have ballooned by 60%. When commodity prices rose between 2000 and 2010, debt in the Global South decreased. As commodity prices began to fall from 2010, debts have risen. The IMF points out that of the 67 impoverished countries that they follow, 30 are in debt distress, a number that has doubled since 2013. More than 55.4% of Angola’s export revenue is paid to service its debt. And Angola, like Venezuela, is an oil exporter. Other oil exporters such as Ghana, Chad, Gabon and Venezuela suffer high debt to GDP ratios. Two out of five low-income countries are in deep financial distress.
Step Six: Public Finances Go to Hell.
With little incoming revenue and low tax collection rates, public finances in the Global South has gone into crisis. As the UN Conference on Trade and Development points out, ‘public finances have continued to be suffocated’. States simply cannot put together the funds needed to maintain basic state functions. Balanced budget rules make borrowing difficult, which is compounded by the fact that banks charge high rates for money, citing the risks of lending to indebted countries.
Step Seven: Deep Cuts in Social Spending.
Impossible to raise funds, trapped by the fickleness of international finance, governments are forced to make deep cuts in social spending. Education and health, food sovereignty and economic diversification – all this goes by the wayside. International agencies such as the IMF force countries to conduct ‘reforms’, a word that means extermination of independence. Those countries that hold out face immense international pressure to submit under pain of extinction, as the Communist Manifesto (1848) put it.
Step Eight: Social Distress Leads to Migration.
The total number of migrants in the world is now at least 68.5 million. That makes the country called Migration the 21st largest country in the world after Thailand and ahead of the United Kingdom. Migration has become a global reaction to the collapse of countries from one end of the planet to the other. The migration out of Venezuela is not unique to that country but is now merely the normal reaction to the global crisis. Migrants from Honduras who go northward to the United States or migrants from West Africa who go towards Europe through Libya are part of this global exodus.
Step Nine: Who Controls the Narrative?
The monopoly corporate media takes its orders from the elite. There is no sympathy for the structural crisis faced by governments from Afghanistan to Venezuela. Those leaders who cave to Western pressure are given a free pass by the media. As long as they conduct ‘reforms’, they are safe. Those countries that argue against the ‘reforms’ are vulnerable to being attacked. Their leaders become ‘dictators’, their people hostages. A contested election in Bangladesh or in the Democratic Republic of Congo or in the United States is not cause for regime change. That special treatment is left for Venezuela.
Step Ten: Who’s the Real President?
Regime change operations begin when the imperialists question the legitimacy of the government in power: by putting the weight of the United States behind an unelected person, calling him the new president and creating a situation where the elected leader’s authority is undermined. The coup takes place when a powerful country decides – without an election – to anoint its own proxy. That person – in Venezuela’s case Juan Guaidó – rapidly has to make it clear that he will bend to the authority of the United States. His kitchen cabinet – made up of former government officials with intimate ties to the US (such as Harvard University’s Ricardo Hausmann and Carnegie’s Moisés Naím) – will make it clear that they want to privatise everything and sell out the Venezuelan people in the name of the Venezuelan people.
Step Eleven: Make the Economy Scream.
Venezuela has faced harsh US sanctions since 2014, when the US Congress started down this road. The next year, US President Barack Obama declared Venezuela a ‘threat to national security’. The economy started to scream. In recent days, the United States and the United Kingdom brazenly stole billions of dollars of Venezuelan money, placed the shackles of sanctions on its only revenue generating sector (oil) and watched the pain flood through the country. This is what the US did to Iran and this is what they did to Cuba. The UN says that the US sanctions on Cuba have cost the small island $130 billion. Venezuela lost $6 billion for the first year of Trump’s sanctions, since they began in August 2017. More is to be lost as the days unfold. No wonder that the United Nations Special Rapporteur Idriss Jazairy says that ‘sanctions which can lead to starvation and medical shortages are not the answer to the crisis in Venezuela’. He said that sanctions are ‘not a foundation for the peaceful settlement of disputes’. Further, Jazairy said, ‘I am especially concerned to hear reports that these sanctions are aimed at changing the government of Venezuela’. He called for ‘compassion’ for the people of Venezuela.
Step Twelve: Go to War.
US National Security Advisor John Bolton held a yellow pad with the words 5,000 troops in Colombia written on it. These are US troops, already deployed in Venezuela’s neighbour. The US Southern Command is ready. They are egging on Colombia and Brazil to do their bit. As the coup climate is created, a nudge will be necessary. They will go to war.
None of this is inevitable. It was not inevitable to Titina Silá, a commander of the Partido Africano para a Independència da Guiné e Cabo Verde (PAIGC) who was murdered on 30 January 1973. She fought to free her country. It is not inevitable to the people of Venezuela, who continue to fight to defend their revolution. It is not inevitable to our friends at CodePink: Women for Peace, whose Medea Benjamin walked into a meeting of the Organisation of American States and said – No!
It is time to say No to regime change intervention. There is no middle ground.
- It "Haunts My Life": Americans Over-60 Owe $86 Billion In Student Loan Debt They Can't Discharge In Bankruptcy
A generation of Americans over 60 years old owe $86 billion in student loan debt, according to a new write-up by the Wall Street Journal. This stunning sum is comprised not only of older people who took out loans for their children, but also some who took out loans for themselves during the last recession, under the guise that it would bolster their employment prospects.
About 93% of all new private student loan money to undergrads during the current academic year included parent or adult signatures, which is up from 74% in 2008. Federal loans account for more than 90% of student debt, but the private market for these loans is also growing.
According to the report, borrowers in their 60s owed an average of $33,800 in 2017, which is up 44% from 2010. Total student loan debt was up 161% for people aged 60 and older in the seven years preceding 2017. This was the biggest increase for any age group over that span of time.
The result has been the monetary suffocation of a generation. Some people are even having their Social Security checks garnished. The federal government, who also happens to be the largest student loan lender, garnished the Social Security benefits or tax refunds of more than 40,000 people aged 65 or older in 2015 because of defaulting on student loan debt. That figure is up an astounding 362% from the decade prior.
The article profiles people like Anmte Grgas-Cice, who is 66 years old and owes about $29,000 in student loans. His only income is $1600 a month that he gets from Social Security, which he saw garnished for some of last year because he wasn’t paying his student loans.
He says that his decision to go back to school continues to “haunt his life”. In 2003 and 2004, he signed up for loans to go to the Art Institute in New York to study culinary art and restaurant design. His plans in the industry fell through and he is currently unemployed.
He limits himself to about $7 a day for food and relies on financial help from family to survive. “I put all my money to better myself,” he stated.
Student loan debt makes up one of the biggest chunks of the overall increasing debt burden of this generation. People 60 and older in the United States owe around $615 billion combined in credit cards, auto loans, personal loans and student loans as of 2017. That figure is up 84% since 2010.
The debt, made available by low interest rates and monetary policy that puts the stock market before common sense, is not fixing the problems created by the 2008 recession, but rather it’s making them worse for people of this generation. Between 2010 and 2017, people in their 60s accelerated their borrowing in nearly every category.
This has resulted in seniors having to work longer and harder just to service the debt they have taken on. And even though this generation is also accounting for a larger share of US bankruptcy filings, student loan debt is rarely dischargeable in bankruptcy.
- Dick Morris: How The Clintons Made Money From Huawei
Authored by Dick Morris, op-ed via WesternJournal.com,
When Meng Wanzhou, the chief financial officer of Huawei Technologies, was arrested in Canada on Dec. 1 through an extradition warrant from the United States, American media described in detail how the company had apparently conspired to evade U.S. sanctions on Iran.
Huawei has long been involved in helping terrorist states and seemingly seeking to thwart U.S. sanctions. Meng is the daughter of Huawei’s founder, Ren Zhengfei.
As details of Huawei’s complicity with Iran emerge, it is time to look back on the Clinton family and its close relationship with Huawei. When their connection was first exposed more than a decade ago, it just seemed like another shady Clinton deal. But now, it becomes clear that Huawei has been central to the Iranian efforts to evade first U.N. and then U.S. sanctions.
The Clintons were apparently conspiring with the enemy.
Huawei has long been a bad actor in undermining U.S. foreign policy. The company has had a deep and long term relationship with the Clinton family.
Huawei and the Clintons’ ties began when Terry McAuliffe, the Clintons’ top fundraiser and future governor of Virginia, bought a Chinese car company – GreenTech Automotive – and moved it to the U.S. in the hopes that it would produce electric cars.
McAuliffe got Huawei to invest in GreenTech through a financing firm called Gulf Coast Funds Management, headed by Hillary’s brother, Tony Rodham. Gulf Coast, boasting the Rodham name, agreed to help Huawei get visas for its top executives under the EB-5 program, which awards visas to those who invest at least $500,000 in the U.S. to create jobs.
The feds had already turned Huawei down because of its links to the Chinese military.
Huawei’s misdeeds are plentiful.
It helped Saddam Hussein install fiber optic cables in violation of U.S. sanctions.
It also helped the Taliban by installing a phone system in Kabul, Afghanistan.
It stole proprietary material from U.S. high-tech company Cisco Systems. This material ended up in Chinese hands.
In 2013, Huawei tried to sell telecom equipment made by Hewlett-Packard to Iran in defiance of sanctions. And, until a few weeks ago, the parent company of Huawei’s Iranian business partner was partly owned by the Islamic Revolutionary Guard Corps, which is playing the key role in Iran’s nuclear program.
According to the South China Morning Post, the U.S. action against Huawei “will severely damage, even cripple, the Chinese company. Of Huawei’s 92 core suppliers, 33 are U.S. corporations, including chip makers Intel, Qualcomm, Broadcom, Marvell and Micron. If Washington now prohibits these companies from selling to Huawei, the Chinese telecoms giant will struggle to survive.”
And, if their full role in the liaison with Huawei comes out, so will Bill and Hillary.
- China To Build 4 Nuclear Aircraft Carriers In Bid To Rival US Superiority
A bombshell new report outlines an expected Chinese military game-changer that could catapult its navy to rival global US power on the high seas. In a push to compete with US naval power, China plans to build four nuclear-powered aircraft carriers expected to be operational by 2035. With China’s current single carrier group commissioned in 2012 and another domestic-built carrier on the way (undergoing sea tests), this would bring Chinese naval strength up to six carrier battle groups.
By comparison the United States has 11 nuclear-powered carriers in operation (and 9 other amphibious warfare ships that could be considered small carriers). Such a rapid advance in Beijing’s sea capabilities would far outpace other countries except for the US, as no other country has more than two. Currently the only other active nuclear powered carrier in the world today is France’s Charles de Gaulle, though India also has plans to build one, and Russia is in an exploratory phase.
China’s aircraft carrier Liaoning, via Military Leak The South China Morning Post (SCMP) cites multiple Chinese military experts, some of them with close ties to the People’s Liberation Army (PLA), in its latest report on Beijing’s massive long term strategic shift in defense planning. The PLA announced major changes last month which aim to transform it into a modern fighting force taking its focus away from land-based fighting which has defined much of the 20th century since WWII while boosting its navy, air force and new strategic units focused on emerging hi-tech threats such as cyberwarfare.
For starters all future carriers are expected to have electromagnetic catapults, a current high-tech feature of American carriers, per the report:
All of China’s new carriers were expected to be equipped with electromagnetic catapults similar to those used by the United States, the experts said. The US’ electromagnetic aircraft launch system, known as EMALS, can launch more aircraft more rapidly than the older diesel systems.
This is part of a major push, one naval expert and retired PLA destroyer naval officer named Wang Yunfei told the SCMP, to “close the gap” with US capabilities: “The country needs to keep developing until it is at the same level as the United States,” he said.
Though it might be expected that China’s current economic slowdown amidst an ongoing and unpredictable trade war with the US could put a temporary halt to the ambitious plans, the Chinese analysts noted that military authorities have promised that under no circumstances would investment in the projects be cut: “Even if the economic downturn has an effect, we can adjust proportions in total military expenditure to make sure naval modernization keeps going,” Wang said. “For example, we can cut the number of new tanks.
“The budget for military modernization will not be cut, even if [Beijing] decided to [use force to] reunify Taiwan,” the military analyst continued. “In a war scenario, [Beijing] may reduce spending on things like infrastructure, but it would increase military expenditure.” Wang further described that Chinese engineers were developing a next-generation carrier-based fighter, another planned stealth fighter in addition to the Chengdu J-20.
China’s aircraft carrier Liaoning, via Military Leak The carrier plans are part of President Xi Jinping’s recent order the PLA to rapidly modernize by 2035 and compete at the top of world powers by 2050, which another China-based military expert, Song Zhongping, acknowledged would be a massive leap closer to the US Navy’s clear superiority; however, he cautioned that lack of Chinese naval combat experience remains a “key shortcoming”.
“China’s aircraft carrier technology and its carrier-based fighter jets will be developed to match the same generation of their American counterparts, but hardware build-up is only part of the picture,” he said. Song Zhongping continued, according to the SCMP: “The standard of warships’ crew training and damage control have remained key shortcomings of the PLA Navy, because they has not had as much real combat experience as the Americans.”
China’s first domestically built aircraft carrier, still undergoing sea tests. But regardless, significant development toward a future planned-for four nuclear carriers added to the PLA would most certainly be alarming to US defense planners. Nuclear carriers are capable of traveling anywhere in the world, assuming the water is deep enough, for somewhere between 20 and 40 years without refueling — a huge naval advantage.
With China’s army now elsewhere reported to be taking a backseat in terms of defense prioritization, Beijing is expected to continue shifting away from mere homeland-based defensive posture to engaging threats by air and sea, increasingly in disputed waters in places like the East and South China, and in protection of its interests abroad, further as its “Belt and Road Initiative” continues to take root.
- IBD: The Press Needs More Than A Super Bowl Ad To Fix Its Plunging Credibility
Media Bias: While journalists are getting pink slips across the country, the Washington Post decided to dump a boatload of cash for a Super Bowl image ad that tried to portray the news media as national heroes.
Here’s a better, and much cheaper, idea to restore the industry’s shattered reputation: Be less blatantly partisan.
In the 60-second ad, Tom Hanks intones about the importance of journalists against the backdrop of historic events. Thankfully, during these times, the ad says, “There’s someone to gather the facts. To bring you the story. No matter the cost. Because knowing empowers us. Knowing helps us decide. Knowing keeps us free.”
The problem with journalists today, however, is that they aren’t interested in gathering facts or empowering the public with knowledge. Instead, they are interested mainly in pushing their agenda — a basic failing of the profession brought into high relief over the past two years.
Media Bias Kills Trust
The latest IBD/TIPP Poll makes this abundantly clear. The poll asked several questions to gauge the public’s perception of the mainstream news media.
What did it find?
First, that fully half the country says its trust in the media decreased over the past two years. A tiny 8% say it’s increased.
That includes a plurality of independents (49%). Even among Republicans, who’ve long grown accustomed to media bias, 81% say their trust in the press has dropped over the past two years.
Geographically, those in the Midwest and the South are mostly likely to say their trust in the press has declined (52% and 57%, respectively) since Trump took office. Men are far more likely than women (54% vs. 47%). And those with incomes over $75,000 (51% of home distrust the media more) more than lower-income households.
These findings alone should be alarming. After all, as any corporate executive knows, you can’t run a successful business when a vast and increasing share of your customer base doesn’t trust the product you are selling.
It gets worse.
Pushing An Agenda
The poll found that more than two-thirds of the public (69%) think the news media “is more concerned with advancing its points of view rather than reporting all the facts.” Only 29% of the public disagrees with that statement.
In other words, nearly seven out of 10 adults in the country think the Post ad’s blather about “gathering the facts” is bull.
That includes 72% of independents, 95% of Republicans, and — surprisingly enough — 43% of Democrats.
There’s more. Fifty-nine percent say that the press covers issues in a way “that seeks to delegitimize the views held by President Trump and his supporters.”
Sixty percent of independents and 93% of Republicans agree with that.
Prejudging Trump
Also, more than half (53%) say they agree that the media “prematurely declared President Trump guilty of collusion with Russia without sufficient evidence.”
On this, too, most independents (55%) agree. So do more than one in five (22%) of Democrats.
Is anyone in the mainstream press paying attention? Apparently not, since they seem to think that the only problem they have is too few image ads.
So, here’s a question for the folks at the Washington Post:
How does “knowing help us decide” when the press clearly isn’t helping the public “know,” but is instead trying to force decisions by spinning stories, massaging facts and pushing an agenda?
The Post would have done journalists – to say nothing of the public at large – a real service if, instead of blowing millions of dollars on a Super Bowl ad, they had put that money into dealing with media bias. They could start by teaching journalists not to be propagandists for the far left wing of Democratic Party.
- The "Retail Apocalypse" Isn't Over: It Is Only Just Getting Started
Last year’s holiday sales season was one of the strongest in years. But unfortunately for America’s struggling retailers, many missed out on the sales bonanza as Amazon and other e-commerce platforms accrued nearly all of the sales growth while foot traffic at US malls was stagnant. Already, Kohl’s and Macy’s have helped crush the narrative of the strong consumer by slashing their earnings guidance, something that doesn’t bode well for Q4 GDP, thanks to what we warned would be an unsustainable inventory build up that has inflated growth numbers in recent quarters.
The retail space has already seen the first headline-grabbing retail bankruptcy of the year (see: Gymboree). And as Bloomberg warned in a story published this week, even after high-profile bankruptcies including Sears and Toys R’ Us, the “retail apocalypse” is far from over.
Though the Fed has capitulated to the whims of the market, retailers still make up about one-fifth of the universe of distresses borrowers. And on Friday, the head of the biggest mall owner in the US warned that more bankruptcies are coming this year. Economists are increasingly worried about a recession this year or next.
Simon Property Group CEO David Simon told investors on Friday during a conference call that there are chains that his company is “nervous” about. Anybody who has traveled to a US mall recently may have noticed this change: Where once there were shoppers, now they halls look disconcertingly empty.
As Barry Bobrow and Lynn Whitmore at Wells Fargo Capital Finance warned, the industry is likely heading for a “prolonged restructuring” as the pre-crisis debt binge undertaken by retailers continues to haunt the broader industry. Retailers who are already weighed down with debt are also facing pressure to innovate and pivot to e-commerce. But their financial pressures are leaving them little wiggle room. Put another way, the problems facing Sears are effectively an extremely acute version of the problems facing the broader industry.
“We’re heading more and more into a distressed market,” said Bobrow, managing director at Wells Fargo Capital Finance. Whitmore, managing director of retail finance, says retailers are laboring under debt levels that “just eclipses anything we saw in the recession.”
Still, there are some reasons to be optimistic. Some chains have improved online sales, which Moody’s said could increase operating income by 5% or 6% this year. The ratings firm raised its outlook from stable to positive in October, the first shift since 2015. Only about 4.9% of retail mortgages were overdue in January, down from more than 6% at the start of 2018. However, these sunnier data points can largely be attributed to the fact that many of the biggest struggling retailers have already failed.
And defaults continue to be a problem. Default rates on retail junk bonds have risen to 10.2% as of December, according to Fitch Ratings, more than double the level from the same period in 2017.
With that in mind, Bloomberg has published a list of some of the most troubled large retailers who could be at risk of bankruptcy during the year ahead.
Neiman Marcus
The luxury retailer is saddled with nearly $5 billion of debt after its 2005 leveraged buyout and its 2013 sale to another set of private equity owners. The retailer has a $2.8 billion loan due next year, and has too much debt relative to its earnings, Moody’s analyst Christina Boni said in an interview. “If we had a magic wand and could get rid of their balance sheet issues, Neiman could move forward, focused on its core operations,” she said.
The retailer’s 8 percent notes due October 2021 trade at less than 50 cents on the dollar. Its first round of talks with its lenders ended last year in stalemate. The company is trying to talk to creditors again to cut its borrowings. A representative for the Dallas-based retailer said the company is confident it can come to a “mutually beneficial solution” with stakeholders. Neiman Marcus is in full compliance with debt agreements and has ample time to refinance its debt, the representative said.
NM is facing a veritable “debt wall” that will be almost impossible for the company to surmount without new financing.
Petsmart & Petco
Two of the largest pet supply stores continue to face competitive pressures from mega-retailers like Amazon.com Inc. and Walmart Inc. Both PetSmart and Petco have struggled to improve their online sales to help keep competitors at bay.
PetSmart acquired Chewy.com in 2017, taking on $2 billion of additional borrowings in the process. Unfortunately, PetSmart’s earnings are declining, making it harder to carry its debt, Moody’s analyst Mickey Chadha said.
A representative for PetSmart said, “The pet category continues to grow. While we continue to experience customer channel shift to online at PetSmart, we feel we are well positioned to capture and benefit from the growth in online through Chewy, and we are gaining market share on an aggregate basis.”
Petco has less debt, Chadha said, but it remains to be seen whether its own online platform can stay competitive, and both chains are at risk of losing exclusive products that draw shoppers.
A representative for Petco said the company rebuilt momentum last year and returned to growth. The company focused on improving nutrition in their pet food, expanded its grooming, training and veterinary services businesses, and achieved “double-digit growth” in e-commerce, the representative said.
J.C. Penney
J.C. Penney has been through it all: boardroom battles, lawsuits, management turnover, activist battles — and that was just in 2013. In the five years since, it has had three CEOs. The current head, Jill Soltau, took over in October and said the retailer is on track to generate free cash flow in the latest fiscal year and reduce its bloated inventory.
To do so, it may have to shutter a whole lot more outlets. The global retail think tank Coresight Research predicted one fifth of U.S. department stores — about 1,150 — will close between 2017 and 2023 no matter what they do. “The U.S. has far too many department stores,” said Deborah Weinswig, Coresight’s CEO. “In particular, it has far too many midmarket department stores that are competing in a similar, and highly challenged, space.”
A spokeswoman for J.C. Penney said that credit rating firms have maintained their highest liquidity rating for the retailer, and it has only $160 million of its more than $4 billion of debt coming due in the next four years.
Iconix Brand Group
Over the past four years, the owner of brands such as London Fog and Mossimo has endured a U.S. Securities and Exchange Commission accounting investigation, which isn’t over, and the departure of its founder as sales steadily slid. Now, Iconix has around $700 million of debt, including more than $100 million of busted convertible notes due 2023, which trade at about 44 cents on the dollar.
It’s even fighting with Jay-Z over his Rocawear brand, which it acquired in 2007. Eric Rosenthal, senior director of leveraged finance at Fitch Ratings, says the company is a “likely default” this year. Representatives for Iconix didn’t return requests for comment.
As if the situation wasn’t already dire enough, just imagine what the impact could be when the next recession finally arrives, or trade talks fail and Trump moves ahead with the next round of sanctions – or both happen simultaneously.
- Marriage Rates Down, Cohabitating Rates Up: It's Not Just Student Debt To Blame
Authored by Mike Shedlock via MishTalk,
Young adults are delaying marriage longer than ever. Student debt is a key reason…
A St. Louis Fed study shows As Fewer Young Adults Wed, Married Couples’ Wealth Surpasses Others’.
Since the 1960s, the median age at first marriage has steadily increased for both women and men. The last three decades were no different for young adults: The age at first marriage went from 26.2 for men and 23.8 for women in 1989 to 29.5 and 27.4, respectively, in 2016. As marriage rates decline in young adulthood, more young adults are choosing to cohabitate (reside with an unmarried partner) and are doing so at earlier ages. The increase in unmarried partnered young adult couples is evident. The share of married households dropped steadily from around 57 percent in 1989 to 37 percent by 2016, while partnered households grew from about 7 percent to 21 percent.
Wealth Effect
As the share of married young adult households declines, their median net worth (both total and when omitting housing-related assets and debts) has remained consistently higher than that of single households. From 1989 to 2016, the typical married household had around three times as much wealth as a partnered or single household.
Student Loan Debt Is Widespread across Young Households’ Balance Sheets
The shifting share of married versus unmarried young adult households is also associated with changes in the composition of debt. This shift is most pronounced when examining the rise of student loan debt. Recent research suggests that growth in student debt levels is associated with marriage delays or avoidance. This suggests that young adults increasingly feel that their debt is an economic barrier to transitioning to adulthood and forming a family.
In 2013, the share of young adult households with student loan debt, 42.1 percent, surpassed the credit card debt rate, 40.1 percent, for the first time. By 2016, 46 percent of young adult households had student loan debt, triple the 1989 percentage.
Heavy Student Loan Debt Forces Many Millennials To Delay Buying Homes
NPR reports Heavy Student Loan Debt Forces Many Millennials To Delay Buying Homes
Homeownership rates for people ages 24 to 32 dropped nearly 9 percentage points between 2005 and 2014 — effectively driving down homeownership rates overall. In January, the Fed estimated 20 percent of that decline is attributable to student loan debt.
“It’s not that they’re not going to buy homes. It’s just that they’ll purchase these homes later in life,” says Odeta Kushi, deputy chief economist at real estate research firm First American.
Baby boomers were 25, on average, when they purchased their first homes; millennials, by comparison, are waiting almost a decade longer, Kushi says.
“Approximately 40 percent of those who start college do not finish within six years. … That’s a huge number,” says Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute.
For those people, it is the worst of all worlds — they have the school debt without the higher wages to show for it.
Attitudes, Attitudes, Attitudes
Homeownership rates may rise, but not to the same rate as boomers. Student debt is only one pf the reasons. Attitudes about marriage, having kids, mobility, and debt have all changed.
This is not 1960 or 1971.
To top it off, houses simply are not affordable. That’s what the cohabitation rate shows. Wages have not kept up with home prices even without the burden of student debt.
- Mystery Surrounding 'Lost' $150M Crypto Fortune Deepens As Analysts Question Exchange Founder's Death
We were half-joking when we speculated last week that QuadrigaCX CEO Gerald Cotten – founder of a Canadian crypto exchange that has become embroiled in a $150 million fiasco after Cotten died and purportedly took the keys to the exchange’s cold wallets to his grave, rendering his customers’ coins immovable – faked his own death in a foreign land to abscond with a fortune belonging to his customers. But a Bloomberg report published Wednesday evening has raised red flags suggesting that this ludicrous “conspiracy theory” might soon become a “conspiracy fact.”
Gerald Cotten
But since Quadriga filed for bankruptcy protection last month in the face of a rash of lawsuits being filed by angry customers demanding their coins be returned, a group of analysts and crypto-sleuths have been trying to suss out whether the claims made by Quadriga and Cotten’s widow – that the notoriously security-conscious (some might say paranoid) executive was the only employee who handled moving coins deposited with the exchange, and that he had recently shifted the bulk of the exchange’s holdings into “cold storage” platforms to which only he possessed the encrypted key, which they have been unable to locate – hold water.
And as it turns out, there has been some suspicious activity that, at first brush, would seem to call these claims into question. As one Cornell professor who spoke with BBG claimed, Quadriga’s story didn’t pass “the smell test.” If the coins were truly frozen, then why hadn’t the exchange at least furnished the public keys that would allow auditors to verify their holdings on the blockchain?
The argument that that’s what happened with Quadriga didn’t pass the smell test for many in the industry who are adept at scouring the anonymous ledgers that underpin the decentralized networks for evidence of where digital coins may be stored.
“The Quadriga story doesn’t make sense,” Emin Gün Sirer, a professor at Cornell University and co-director of the Initiative for CryptoCurrencies and Contracts, wrote in an email Wednesday. “The one amazing thing about blockchains is that anyone can audit, in essence, any company.”
[…]
“If the funds are frozen and the cold wallet is inaccessible, it should be possible for the exchange to provide the cold wallet addresses so their claims can be verified with the help of the blockchain,” Sirer said.
But the fact that the exchange hasn’t disclosed which wallets belong to it hasn’t stopped amateur investigators from analyzing transactions and taking an educated guess.
And what they found might come as disturbing – at least for QuadrigaCX’s 115,000 customers. The analysts said they couldn’t find any cold wallets holding the Ether that supposedly was one of the cryptocurrencies held on the exchange. Instead, they found that Quadriga had been moving Ether from its wallet to larger exchanges through mid-January.
But that would seem to contradict the exchange’s story that Cotten was the only one who had access. After all, he died in December.
Analysis firms such as Elementus say that by examining the blockchain patterns, they can guess which particular wallets holding coins belong to. The researcher says it couldn’t find any cold wallets holding Ether, one of the cryptocurrencies that’s missing. Instead, Quadriga was moving Ether to larger exchanges through mid-January, Elementus said.
At the same time, the patterns could mean that the exchange had set up automatic transfers to larger exchanges when its wallet balances reached a certain amount, or, alternatively, that “there’s some fishy business going on,” Elementus founder Max Galka said.
The head of one exchange where Quadriga had stashed some of its coins said that the vast majority of its holdings recently disappeared. He also noted that not being transparent about where coins are on the blockchain is troubling.
Jesse Powell, head of exchange Kraken, said it has some Quadriga balances. Of about 230,000 Ether coins that Quadriga is supposed to have had, only about 1,000 coins remain in its own wallets, Galka said.
“Not to be transparent” about where the money is exactly on a blockchain “is unusual,” said Christine Duhaime, a Canadian lawyer specializing in anti-money laundering.
According to the company, Cotten, aged 30, died of complications from Crohn’s disease in Jaipur, India in December while reportedly doing research for an orphanage he planned to build.
But if the coins have in fact been moved since his death, that could mean one of two things: Either the exchange is lying, and Cotten’s former colleagues are seeking to take advantage of his death by robbing his customers.
Or, Cotten is still alive, and has already taken the money and run?
Digest powered by RSS Digest
Saving...