HANJIN

The U.S. government, should have been investing more money south of our border. Had we focused on Mexico and building up their wealth, and living conditions our immigrant problem would likely be a non issue. Flabbergasted that our southern neighbors aren't more important to our security than they are treated. Absolutely no reason they shouldn't have the same standards of living as Canada, and the U.S.

 

Laughs..I did read the article and all I could think was "awwww poor retailers can't stock their Christmas shelves with slave made goodies."

 

Cmom..this is business..lots of companies buy new equiptment, then go bankrupt.
Uncle joe buys the company, for pennies on the dollar and ..repeat.

 

Shipping companies have been dropping like flies lately, and canceling orders for new ships left and right. Even Maersk, the world's largest shipping line, is canceling orders for their new triple E class of container ships (18,000 TEU capacity or 9000 40 ft. containers). Hanjin has ordered its ships to stay at sea rather than come into port and risk seizure. Too many ships chasing too little freight. Sound familiar? I feel for the sailors stuck aboard.

 

Hanjin, is also a shipbuilder.

 

Maersk pulled out of the mainland to Hawaii market (known as Horizon here) and Pasha stepped into the yard, docks and freight traffic. For every down, there is an up...

Postscript: on west coast they are off shore because they can't pay for the Harbor Pilots and birthing fees. No financial action in bankruptcy, although I'm not familiar with the Korean laws. I'll try to catch Asia Squawk Box on CNBC to get more insight to share.

 

I believe Hyundai will pick up the slack. Hanjin and Hyundai are both part of the South Korean Chaebol system so....meh, nothing to see here.

 

The Chaebol system is getting strained. Hanjin was counting on the government backed banks to renew their line of credit. It didn't happen.

Remember late 1997 when Korea had a major financial meltdown that required IMF intervention? I was there with my wife around Christmas, in the thick of it. It was crazy, one day the Won traded at 1200 to the dollar and the next day it was 3500 Won to the dollar. It was almost impossible to finalize pricing with factories for Fall 1998.

The thing that really stood out to me was reading English language Korean news. The Chaebols AVERAGED 200 to 1 debt to equity ratio. Anyone with half a brain and any knowledge of stocks knows that in mature industries and markets you NEVER want to invest in anything over 12 to one. Every Chaebol was relying on political connections to borrow more money.

In the last year or so I have been reading a lot of articles noting that borrowing in Asia has escalated. Consumer credit debt is at an all time high. Corporate (Chaebol) debt is approaching 1997 ratios.

Meanwhile in the USA car loan defaults are approaching historic levels. Oh, and the "packages" of car loans being foisted off by big banks are getting very shaky.

Sound familiar?

 

A quick Google search yielded this article:

http://qz.com/769897/sorry-china-the-future-of-next-generation-manufacturing-is-in-the-us/

I'd tend to agree that American robots may be more cost effective than overseas shipping. Also, the forklift operators would create a bigger tax base (not a lot bigger, mind you) so the gubberment would have more of our money to spend. I also remember reading that certain companies kept their headquarters here due to the cyclical nature of business. Interesting stuff.

 

Post of the year right there.