When we commented yesterday morning on the unexpected "going concern" notice in Sears' just filed 10-K which sent the stock crashing, we pointed out the immediate spin provided by Eddie Lampert's distressed retailer which promised that its comeback plan may help alleviate the concerns, “satisfying our estimated liquidity needs 12 months from the issuance of the financial statements", to which however we added the footnote that "the question is what happens when vendors start demanding cash on delivery as concerns about SHLD.'s liquidity concerns continue to grow."
As it turned out, we wouldn't have long to wait, because overnight Reuters reported that the worst case Sears scenario we envisioned for Sears is now taking shape and that suppliers to Sears have told Reuters they are doubling down on defensive measures, such as reducing shipments and asking for better payment terms, to protect against the risk of nonpayment as the company warned about its finances.
The company's disclosure turned the focus to its vendors as tension is expected to mount ahead of the key fourth-quarter selling season amid rising concern about a potential bankruptcy, they said.
Quoted by Reuters, the managing director of a Bangladesh-based textile firm said his company is using only a handful of its production lines to manufacture products for Sears' 2017 holiday sales. Last year, nearly half of the company's lines in its four factories were producing for Sears. "We have to protect ourselves from the risk of nonpayment," said the managing director, who declined to be identified for fear of disrupting his company's relationship with Sears.
Furthermore, precisely as we predicted, Mark Cohen, the former CEO of Sears Canada and director of retail studies at Columbia Business School said vendors will keep a close eye on Sears' finances. "Whatever vendors continue to support them are now going to put them on even more of a short string. That means they’ll ship them smaller quantities and demand payment either in advance or immediately upon delivery."
He added: "Sears stores are pathetically badly inventoried today and they will become worse."
Another supplier to Sears, Arnold Kamler, CEO of New Jersey-based bicycle manufacturer and importer Kent International Inc, said he was not surprised by Sears' Tuesday announcement. He said he noticed a warning sign last year when Sears pushed to increase its purchases, which occurred "because a lot of their current suppliers were either cutting them off or limited them on credit."
Kamler said he declined to sell Sears more product and that he receives a report once a week from his accounting department because of concerns around billing, payments and deductions.
The Bangladesh-based clothing supplier said Sears' announcement is making him re-evaluate accepting new orders.
"So far there was only speculation that they would declare bankruptcy in 2017. But now they are acknowledging it, which definitely complicates our relationship with them and our decision to accept future orders from Sears," the executive said.
A second clothing supplier from Bangladesh who did not wish to be named said he renegotiated payment terms with Sears a year ago and was being paid within 15 days of sending a shipment, compared with the traditional 60 days. He is considering asking the company for an advance payment on orders going forward.
* * *
Sears disagreed, and according to Jason Hollar, the company's CFO, Sears' move to raise capital in recent months is helping strengthen the company's balance sheet he claimed in a blog post.
Sears is "a viable business that can meet its financial and other obligations for the foreseeable future," Hollar said. He cited a $1 billion increase in liquidity from a new secured loan facility and a new asset-based loan that provided $250 million more in "financial flexibility." The only problem with this is that Sears continues to be a melting ice cube which while not as bad as Tesla, is burning through hundreds of millions each year, money which in recent years has come out of Eddie Lampert's pocket, either directly or indirectly, with loan gurantees. At some point even Lampert will realize that throwing away billions to sustain the Sears zombie is no longer a viable strategy, especially if the vendor freak out prompts a sudden need for cash which the company does not have.
Speaking of Sears' cash, here are some more details from Reuters:
Sears' cash position has shrunk dramatically in recent years. Sears, which lost $2.22 billion in the year ended Jan. 28, 2017, had $286 million in cash on hand, down from $609 million in 2012. Retailers in distress often use their accounts receivable to finance operations, and Sears had $466 million in receivables, down from $635 million in 2012.
So is a bankrtupcy inevitable? Well, yes, and increasingly so with every passing day that the company avoids filing.
Neil Saunders, managing director at retail research firm GlobalData, said tension will grow as the year goes on. "As we move towards the last quarter, I think we'll find there are more and more suppliers that are not necessarily willing to engage with Sears" and will demand cash up-front.
Another sign of Sears' weakness is that insurance companies that once provided policies to Sears vendors - insuring against nonpayment for their goods - are no longer doing so.
Doug Collins, regional director for risk services at Atradius Trade Credit Insurance, said his firm has stopped providing insurance to Sears vendors. "We tried to hang in as long as we could," he said. "Vendors may try to get a few more cycles in before the worst happens, and then it just depends if they're lucky or not."
Of course, if that's the case, then Sears has nothing to worry about: if the past 9 years of trading this "market" has shown, is that luck - or hope - is the only strategy that matters for this market, and courtesy of central banks, it always somehow shows up in the last moment.
In a recent study, scientists concluded that this sort of mind reading technology could be used to scan the brains of criminals and determine whether or not they are knowingly committing a crime. This marks the first time that neurobiological readings have been used to determine levels of guilt, but researchers acknowledged that their brain scanning method is not currently admissible in court.
Of course, criminals are unpredictable, and there are dozens of different motivating factors that contribute to their actions. Therefore, scientists warn that brain data alone shouldn’t be used to access the mental state of defendants.
Still, the use of brain scanning and artificial intelligence to determine guilt is another step forward for the practice of neurolaw, which combines neuroscience and the law to assess criminal behavior.
At Virginia Tech, neuroscientists conducted a study in which 40 volunteers got together to simulate a drug smuggling operation. Each volunteer, called “runners” for the sake of the experiment, was given a probability that the suitcases they were asked to bring across the border contained drugs. Using Functional Magnetic Resonance Imaging (FMRI), researchers scanned the brains of each of the runners and were ultimately able to determine whether the runners knew drugs were in the suitcase, or whether they were simply taking a risk.
Dr. Read Montague, the director of the research institute’s human neuroimaging lab, explained how the mental state of criminals can be the most significant factor in determining the legal consequences. “People can commit exactly the same crime in all of its elements and circumstances and, depending on their mental states, the difference could be one would go to jail for 14 years and the other would get probation.”
He added, “Predicated on which side of the boundary you are on between acting knowingly and recklessly, you can be deprived of your freedom. In principle, we are showing these brain states can be detected when the activity is taking place.”
In other words, Dr. Montague is underscoring the potential that this new brain scanning technology holds, in that it can examine the mental state of criminals and use that to determine the appropriate legal ramifications.
In 2013, researchers found that they could use brain-scanning technology to determine the probability that offenders would repeat crimes. Neuroscientists at the Mind Research Network in Albuquerque examined 96 male prisoners as they were getting ready to be released from prison. The subjects’ brains were scanned while they performed specific tasks on computers that forced them to make impulsive decisions and react as quickly as possible. After following the subjects for four years, researchers found that those who performed poorly in the decision making process were more likely to be arrested again.
This type of technology, especially if used in the court of law, could be a potential breakthrough in the legal system when it comes to determining guilt, and therefore prison sentences. Through brain scans and the use of artificial intelligence, law enforcement and prosecutors will be able to determine whether or not criminals were knowingly committing a crime. As Dr. Montague noted, the mental state of offenders during the time the actual crime is committed could mean the difference between probation and years in prison. Once perfected, this technology could make the legal system more reasonable, more fair, and more just.
The noose around the neck of FBI’s James Comey career is tightening. It is amazing that he is still the Director of the FBI. The following contains a multitude of allegations against Comey and anyone of them should be grounds for removal from office followed by criminal prosecution
Comey and Obstruction of Justice
Last fall, Fox Newsfurther confirmed that a congressional source confirmed that the House Government Oversight Committee had received a heavily redacted FBI summary of Hillary Clinton’s session last month with FBI agents who interviewed her about her use of a private server for government business. Heavily redacted? What right does Comey have to thumb his nose to a Congressional Inquiry by redacting evidence requested by Congress? Why would Comey do such a thing? The answer to that question can best be summed up as “Birds of a feather, flock together”. Or, perhaps, Ben Franklin put it more accurately:
“We must, indeed, all hang together or, most assuredly, we shall all hang separately.”
Benjamin Franklin
On the surface, Comey’s previous refusal to fully cooperate with Congress seems inexplicable at this point, unless you consider the character and lack of integrity of James Comey. If the Clintons are Bonnie and Clyde, then Comey is John Dillinger.
Comey’s Skeletons Are Getting Exposed
How does a man with absolutely no law enforcement experience become the head of the most modern crime fighting organization in the United States? The simple answer is, Comey is complicit in Hillary Clinton’s aerial criminality.
While serving in the capacity of FBI Director, Comey has turned this organization into Hillary Clinton’s lap dog of personal protection and has helped her evade criminal prosecution.
If Fox News is really after Clinton, then one would think that they would begin to impugn the integrity of James Comey and for the life of me, I cannot figure out why they have not, because for months since so much verifiable criminal evidence against Comey has surfaced, Fox News is continuing to ignore what is publicly available.. In fact, James Comey is committing perjury before Congress when he claims that Trump has no proof of Obama’s wiretapping against Trump. Comey knows that Trump is being accurate, and the evidence it omnipresent!
This week, Judge Napolitano has been removed from Fox News for repeating the President’s allegation of wiretapping against Obama and his minions. There is no question that the wiretapping took place. First, and as Steve Quayle just told me in a soon-to-be-released interview, EVERYONE is illegally wirtapped. Yes, since at least the days of George W. Bush, every American is wiretapped on every form of communiation and I don’t care how you dress it up, it is a violation of the 4th Amendment and the illegal evidence gathered is sometimes boot-strapped into violating the 5th Amendment Due Process provisions of the Constitution. Therefore, just based on this fact alone, Napolitano and Trump are accurate in their allegations against Obama. But wait, there’s more. In the following short video, I detail how we know that President Trump is accurate in his wiretapping allegations. Here is a short interview I did with Paul Preston of Agenda 21 Radio in which he lays out the long criminal association between the Clintons and Comey which dates back to the 1990’s. Please not the background noise. You are listening to an interview between two experienced talk show hosts. If we had heard the background noises that have been externally imposed on this interview, one, or both of us, would have stopped the interview and immediately called attention to it. In the same manner as my interview with Josh Coy, these noises were implanted AFTER the interview took place. This adds legitmacy to what Paul Preston is saying. The globalists do not want the public to know the long criminal history between the Clintons and James Comey because they would then understand why Comey is running from revealing the truth about the alleged wiretapping of Trump by Obama. The following interview is to be taken very seriously by the people, background noise notwithstanding, if one wants to understand the dot-connecting criminal cabal that permeates our government. One has to realize that the Deep State is alive and well in the FBI.
The FBI, who else would it be, imposed background noises of clanging dishes, a muffled drum, people in a crowd talking, and the muffling of Paul’s message at key points. When I am in my office doing interviews, we can take out the noise even when it is externally imposed. However, and unforturnately on the road, which is where we are at for this interview, we do not have that remote capability at this time because this interview was a straight Skype recording.
To recap Paul’s message, Comey has a long association with the Clinton crime family in which he has assisted in bailing out the Clintons for their past illegal deeds. The listener no doubt heard Paul refuse to answer the question on why Comey was retained as FBI director by President Trump and where this is going. He is obviously aware of something that is actively in the works that involves Comey and the Clintons. One can only speculate, but my mind immediately went to Pedogate. This is only a guess, but this is the only time that I have interviewed Paul Preston where he did not answer each and every question in a forthright manner. The content has to be absolutely huge.
More Damning Evidence Against Comey
Breitbart held lightening in a bottle in several discoveries the new organization made about Comey that should have disqualified him from being the FBI Director. Here is a summary of Breitbart’s evidence that surfaced vs. Comey during the coure of their investigation.
Additionally, Breitbart also came to the following conclusions during the height of the Presidential campaign.
“…A review of FBI Director James Comey’s professional history and relationships shows that the Obama cabinet leader — now under fire for his handling of the investigation of Hillary Clinton — is deeply entrenched in the big-money cronyism culture of Washington, D.C. His personal and professional relationships — all undisclosed as he announced the Bureau would not prosecute Clinton — reinforce bipartisan concerns that he may have politicized the criminal probe. These concerns focus on millions of dollars that Comey accepted from a Clinton Foundation defense contractor, Comey’s former membership on a Clinton Foundation corporate partner’s board, and his surprising financial relationship with his brother Peter Comey, who works at the law firm that does the Clinton Foundation’s taxes.“
James Comey’s brother, Peter Comey, works for the Clinton Foundation. Peter Comey, through Procomredesigned the FBI building. If you think there is anything neutral about any previous investigation into Hillary Clinton’s criminal background, think again. All of this information surfaced in September of the 2010 and was buried by the MSM.
Government Accomplices to HSBC’s Money Laundering: Comey and Clinton
Please allow me to reintroduce you to John Cruz. According to this former Senior VP of HSBC Bank, John Cruz, he states that the Clinton Foundation profited from HSBC’s terrorist affiliations related to money laundering at the bank.
The above radio interview was conducted on The Common Sense Show on 7/31/16.
I previously documented how FBI director Comey served on the Board of Directors at HSBC during the time of the coverup of the criminal activities. Comey is not the only senior federal government official implicated in the crimes of HSBC either through participation or coverup.
In a previous radio interview, I asked Cruz about Comey and he was aware that Comey had been on the board of directors at HSBC bank and was responsible for “moving money”. We now know that moving money meant, in part, involved moving money to the Clinton Foundation. Therefore, are we surprised that Comey gave Clinton a free pass for her illegal emails? Additionally, should we be surprised that Comey heavily redacted emails sent to Congress regarding Clinton’s perjury in her testimony to Congress. Comey should be in jail for obstruction of justice.
The above, including the radio interview, should answer the question about why Comey would heavily redact FBI documents related to Clinton’s alleged perjury when being interviewed by the FBI. Simply put, if Clinton goes down, so does Comey. Additionally there will be another former federal casualty as well and her name is Loretta Lynch, the Attorney General. It was widely reported, even in the MSM, that she held a private meeting with Bill Clinton in Phoenix during the height of the so-called email investigation of Hillary. They are all part f the same organized crime family.
Government Accomplice to HSBC’s Money Laundering: Loretta Lynch
Loretta Lynch, guilty of obstruction of justice. And we are surprised that she would not prosecute Clinton for the emails?
Cruz went far and wide with his allegations that HSBC Bank laundered money for terrorists and the drug cartels. DHS told him to go away. Manhattan’s District Attorney’s told him that this would cost him his job, and that is if he was lucky. The head of the New York Eastern District covered up the crime as well, after Cruz provided her with irrefutable prof of his allegations. And who was the head of the Eastern District of New York? Why, it was none other than Loretta Lynch, the current Attorney General.
Lynch, to cover her legal behind, actually found HSBC guilty of violation the “Banking Secrecy Laws”, but ignored the 800 lb. gorilla in the room, the money laundering and the violation of national laws on terrorism. I asked Cruz why Lynch would pursue the one charge and not the other. He told my audience that she could prosecute on a far lesser charge to make the more serious charge go away.
This fact actually came up in the confirmation of Lynch’s nomination to the AG position, but it was quickly swept under the rug. However, the Cruz two hour testimony before the Senate Judiciary Committee was so damning, that the Senate had to withhold Lynch’s nomination vote for three weeks in order “to let things calm down”.
This XYZ affair (Clinton, Comey and Lynch) is a house of cards. If Clinton is taken down by Congress, Comey and Lynch are headed to prison for obstruction and being an accomplice after the fact. Comey could actually be charged with money laundering and “trading with the enemies” act.
What Congress Should Do
If Congress truly wants justice in this matter and is not merely grandstanding, they need to make a deal. Special prosecutors need to be appointed by Congress. An investigation of any length is not needed because almost all of the evidence is readily available as this article strongly suggests. Instead, what has Congress decided to do? Congress has chosen, instead, to chase windmills and investigate Trump’s association with the Russians in a story that has been debunked. Further, this Congress ignores the real Russian connection between our government and Putin when they refused to investgate Clinton’s sale of uranium to the Russians in a story run by the New York Times
The two prosecutors should simply be charged with making a deal with either Comey or Lynch in order to bring down Clinton. I am told by one of my sources that this indeed the strategy and Comey is being backed into a corner. To be fair, this unnamed source, is not connected to Paul Preston.
If I were a special prosecutor, in one room they bring in Loretta Lynch. In an adjacent room, they bring in James Comey. Special prosecutors interview both suspects at the same time. The offer is simple. The first of the two that offers testimony that will bring down Clinton, with regard to money laundering, trading with the enemies act, funding her presidential campaign with foreign (terrorist) money through the Clinton Foundation, and multiple counts of perjury, gets the nicer prison cell.
Further, Donald Trump needs to relentlessly repeat these events in the public. The dumbed down sheep who get their news from CNN need to be confronted with the truth. The GOP needs to make these events their continuing mantra. Let confirmation bias take its course.
Conclusion
Last fall, my family had dinner in Wickenburg, AZ., and as we were leaving the small town of 6,000 people, adjacent to the highway was a very large billboard that consisted of this message:
The American people are ready for the truth. The American people are tired of the politicians and their lies, manipulation and corruption.
COMEY IS THE KEY TO UNLOCKING PEDOGATE. PEDOGATE IS THE KEY TO EXPOSING THE RUTHLESS CRIMINAL CABAL THAT IS THE DEEP STATE. EXPOSING THE DEEP STATE IN PLAIN VIEW MIGHT WAKE UP THE SLEEPING MASSES AND THE PUBLIC FINALLY REALIZES THAT THEIR CHILDREN ARE NOT SAFE UNDER OUR PRESENT DEEP STATE LEADERSHIP.
(Editor’s Note: Next up on The Common Sense Show, is a detialed interview with Steve Quayle in which he details what the death of the David Rockefeller means to the goals, objectives and timetables of New World Order. This is a can’t miss interview and will be available on Stevequaye.com and on The Common Sense Show
The Director of The FBI has managed to do what many have failed to do - bring a desperately divided nation together. James Comey is unpopular across the political spectrum, according to a new poll that finds voters have a negative opinion of Comey by a more than two-to-one margin.
As The Hill reports,according to data from aHarvard-Harris Poll survey of registered voters provided exclusively to The Hill,only 17 percent have a favorable view of Comey, compared to 35 percent who have a negative view of him.
Forty-one percent of Democrats have an unfavorable view of Comey, with only 12 percent saying they view him positively.
Comey is almost at break-even among Republicans, with 26 percent viewing him positively and 27 percent viewing him negatively.
Among independents, Comey has an overall negative rating, with 17 percent holding a positive view compared to 36 percent with a negative view of the FBI director.
Harvard-Harris Poll co-director Mark Penn said, "Comey’s ratings, which are two-to-one negative, suggest a crisis of confidence in his leadership as top law enforcement officer."
That could change for the worse, as the Harvard-Harris Poll survey was conducted prior Comey’s testimony on Monday before the House Intelligence Committee that frustrated many Republicans. Chairman Devin Nunes (R-Calif.) lamented that Comey had cast “a big, gray cloud” over the Trump administration.
Finally we note that a plurality of voters - 40 percent - say Congress is spending too much time on Russia and Trump’s wiretapping claims.
More than 3,500 retail stores are going to close all across America over the next few months as the worst retail downturn in U.S. history gets even deeper. Earlier this week, Sears shocked the world when it announced that there is “substantial doubt” that the company will be able to “continue as a going concern” much longer. In other words, Sears has announced that it is on the verge of imminent collapse. Meanwhile, Payless stunned the retail industry when it came out that they are preparing to file for bankruptcy. The “retail apocalypse” that I have been warning about is greatly accelerating, and many believe that this is one of the early warning signs that the economic collapse that is already going on in other parts of the globe will soon reach U.S. shores.
I have repeatedly warned my readers that “Sears is going to zero“, and now Sears is officially saying that it might actually happen. When you file official paperwork with the government that says there is “substantial doubt” that the company will survive, that means that the end is very near…
The company that operates Sears, the department store chain that dominated retail for decades, warned Tuesday that it faces “substantial doubt” about its ability to stay in business unless it can borrow more and tap cash from more of its assets.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears Holdings said in a filing with the Securities and Exchange Commission. Sears Holdings operates both Sears and Kmart stores.
In the wake of that statement, the price of Sears stock dipped 13.69% to $7.85 a share.
Personally, I am going to miss Sears very much. But of course the truth is that they simply cannot continue operating as they have been.
For the quarter that ended on January 28th, Sears lost an astounding 607 million dollars…
The company said it lost $607 million, or $5.67 per diluted share, during the quarter that ended on Jan. 28. That compared with a loss of $580 million, or $5.44 per diluted share, a year earlier. It has posted a loss in all but two of the last 24 quarters, according to S&P Global Market Intelligence.
How in the world is it possible for a retailer to lose that amount of money in just three months?
As I have said before, if they had employees flushing dollar bills down the toilet 24 hours a day they still shouldn’t have losses that big.
This week we also learned that Payless is heading for bankruptcy. According to Bloomberg, the chain is planning to imminently close at least 400 stores…
Payless Inc., the struggling discount shoe chain, is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter.
The company is initially planning to close 400 to 500 stores as it reorganizes operations, said the people, who asked not to be identified because the deliberations aren’t public. Payless had originally looked to shutter as many as 1,000 locations, and the number may still be in flux, according to one of the people.
Of course these are just two examples of a much broader phenomenon.
Never before in U.S. history have we seen such a dramatic wave of store closures. According to Business Insider, over 3,500 retail locations “are expected to close in the next couple of months”…
Thousands of mall-based stores are shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.
More than 3,500 stores are expected to close in the next couple of months.
Once thriving shopping malls are rapidly being transformed into ghost towns. As I wrote about just recently, “you might be tempted to think that ‘Space Available’ was the hottest new retail chain in the entire country.”
The demise of Sears is going to be an absolute nightmare for many mall owners. Once “anchor stores” start closing, it is usually only a matter of time before smaller stores start bailing out…
When an anchor store like Sears or Macy’s closes, it often triggers a downward spiral in performance for shopping malls.
Not only do the malls lose the income and shopper traffic from that store’s business, but the closure often triggers “co-tenancy clauses” that allow the other mall tenants to terminate their leases or renegotiate the terms, typically with a period of lower rents, until another retailer moves into the anchor space.
Years ago I wrote of a time when we would see boarded-up storefronts all across America, and now it is happening.
Instead of asking which retailers are going to close, perhaps we should be asking which ones are going to survive this retail cataclysm.
In the past, you could always count on middle class U.S. consumers to save the day, but today the middle class is steadily shrinking and U.S. consumers are increasingly tapped out.
For instance, just look at what is happening to delinquency rates on auto loans…
US auto loan and lease credit loss rates weakened in the second half of 2016, according to a new report from Fitch Ratings, which said they will continue to deteriorate.
“Subprime credit losses are accelerating faster than the prime segment, and this trend is likely to continue as a result of looser underwriting standards by lenders in recent years,” said Michael Taiano, a director at Fitch.
The last time so many Americans got behind on subprime auto loans was during the last financial crisis.
We are seeing so many similarities to what happened just prior to the last recession, and yet most Americans still seem to think that the U.S. economy is going to be just fine in 2017.
The last recession probably should have started back in late 2015, but thanks to manipulation by the Fed and an unprecedented debt binge by the Obama administration, official U.S. GDP growth has been able to stay barely above zero for the last year and a half.
But just because something is delayed does not mean that it is canceled.
All along, our long-term economic imbalances have continued to get even worse, and a date with destiny is rapidly approaching for the U.S. economy.
