Month: March 2020

No doubt Americans will look back on this current crisis as the moment the country collectively learned its lesson ‘the hard way’ about the dangers of over-reliance on Chinese manufacturing, or sending the vast majority of our manufacturing abroad anywhere for that matter. 

"The critical shortage of medical supplies across the U.S., including testing swabs, protective masks, surgical gowns and hand sanitizer, can be tied to a sudden drop in imports, mostly from China," Associated Press reports after a new investigation.  

Likely Washington’s current panicked mobilization to ensure medical equipment and supply needs are met across the country as the numbers of infected Americans begin to track with the kind of exponential growth rate seen in Italy or Iran is due to political leaders already seeing the writing on the wall, or the plain and simple data for that matter. Trump’s invoking the Defense Production Act and reportedly mulling lifting some tariffs against China is a case in point.

Chart and data via the Associated Press

"Trade data shows the decline in shipments started in mid-February after the spiraling coronavirus outbreak in China led the country to shutter factories and disrupted ports," the AP says.

Whether ventilators, gloves, surgical gowns or N95 masks (which remove 95% of all airborne particles), or even over-the-counter items like thermometers and bandage kits, the US health system overwhelmingly relies on Chinese manufacturing.

But with the United States’ own crisis perhaps in the early stages, and at a moment lack of daily growth in confirmed cases out of Beijing health officials looks promising, the fallout from the prior forced shuttering of many Chinese factories is only now hitting US ports hard and thus is severely depleting hospitals and clinics: 

The most recent delivery of medical-grade N95 masks arrived from China about a month ago, on Feb. 19. And as few as 13 shipments of non-medical N95 masks have arrived in the past month — half as many as arrived the same month last year. N95 masks are used in industrial settings, as well as hospitals, and filter out 95% of all airborne particles, including ones too tiny to be blocked by regular masks.

The AP investigation further found that over the past month vital supplies of things as simple as hand sanitizer and swabs dropped by 40%, with N95 mask imports cut down by over half.

At the moment hospitals on the East and West coasts in the most highly impacted cities are receiving the bulk of recent reduced shipments first; however, as the pandemic potentially continues to spread in cities in the central parts of the country and mid-west, the vastly reduced supplies could send hospitals into the kind of catastrophe and crisis mode that Italy is tragically experiencing. 

But doctors on the ground might say we’re already entering Italy levels of the crisis, as the AP alarmingly details: "Doctors, nurses and first responders in the U.S. are resorting to spraying their masks with bleach at the end of each day and hanging them up at home to dry to use for another day, according to the American College of Emergency Physicians."

Authored by Paul Joseph Watson via Summit News,

An Italian virologist says that the country’s attempt not to appear “racist” in the early says of the coronavirus outbreak crippled the ability to properly respond to the pandemic.

Professor of Virology and Microbiology at the University of Padova Dr. Giorgio Palù told CNN that measures imposing travel restrictions and border controls were taken too late due to fears over political correctness.

“There was a proposal to isolate people coming from the epicenter, coming from China,” Palù told CNN. “Then it became seen as racist, but they were people coming from the outbreak.”

Italy is now the hardest hit country in the world in terms of coronavirus deaths, with 3,405 people losing their lives.

The need to minimize potential “racism” and “stigmatization” in response to the coronavirus was a policy endorsed by the World Health Organization itself on numerous occasions and adopted by the left-wing Italian government.

As we previously highlighted, the Mayor of Florence launched a nationwide campaign at the start of February encouraging Italians to hug Chinese people on the street to “stem the hatred.”

Footage of the stunt even shows Italians physically removing a Chinese man’s face mask while closely embracing him.

The Mayor even released a Twitter video of himself hugging an awkward-looking Chinese person to promote the campaign, which was launched to “express solidarity with the Chinese community.”

#coronavirus: seguiamo le indicazioni delle autorità sanitarie e usiamo cautela, ma nessun terrorismo psicologico e soprattutto basta con i soliti sciacalli che non vedevano l’ora di usare questa scusa per odiare e insultare. Uniti in questa battaglia comune! #AbbracciaUnCinese pic.twitter.com/pUdqEl0piW

— Dario Nardella (@DarioNardella) February 1, 2020

Now Italian hospitals in some areas are completely overwhelmed and the entire country is on lockdown.

This once again underscores how political correctness, which leftists often define as “just being nice to people,” can often have deadly consequences.

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The number of reported cases and deaths of COVID-19 continues to rise on an exponential curve across the world. 

For the last month, people have been panic hoarding non-perishable foods, hand sanitizer, and toilet paper at grocery stores across the US and Europe. In a pandemic, some people have different priorities. We noted this as early as March 1, when the local news interviewed a man at a US Costco store, who bought boxes of condoms and a big jar of coconut lube. And it’s not just safe sex products that people are purchasing. There’s also a huge demand for marijuana. 

We usually spend Saturday morning scouring the internet in search of panic hoarding videos of consumers fighting over toilet paper and or bags of rice at big-box retailers. However, we’ve covered the topic so much that it would be boring at this point to rehash what is already known. 

So, an emerging trend among consumers in the Western Hemisphere ahead of a city or nationwide lockdowns has been the stockpiling of condoms and weed. 

A shortage of condoms has developed at retail stores. Sex toy company Womanizer has reported that their brand of condoms has seen a 60% surge in sales in Italy, a 40% rise in France, and a 71% jump in Hong Kong. The company said sex toy sales across the world have also risen in the last month. 

We were the first to note that virus-porn-themed videos by amateurs on Pornhub were becoming popular in early March. Since our reporting, the amount of "coronavirus porn" videos have jumped 10x on the site. 

With consumers loading up on condoms and sex toys, their next move appears to be the purchasing of marijuana. 

Bank of America recently said that higher demand for cannabis had been seen in the US as tens of millions of people are confined to their homes as the government limits mass gatherings and shutters businesses. 

"Our checks across North America were consistent: regardless of region, cannabis purchases have accelerated," BofA analyst Christopher Carey said in a note. "While likely on pantry loading, it’s not unreasonable to think there will be some boost to per capita consumption as people stay at home longer."

The explosive demand for cannabis was the most visible in California as videos surfaced on Twitter of long lines at pot shops after Gov. Gavin Newsom told residents across the state to "stay home." 

Uh the line for MedMen WeHo right now pic.twitter.com/ChZoNf35An

— Andrea Chang (@byandreachang) March 20, 2020

Six hours before the lockdown, and the longest line in the city is outside the marijuana dispensary #SanFrancisco #lockdown #ShelterInPlace #Priorities pic.twitter.com/bWdGxsG2gJ

— Bao Tran, MD, RPVI (@BaoGTran) March 17, 2020

Los Angeles County has considered "cannabis dispensaries, or any related and/or ancillary healthcare services," an "essential healthcare services," which means the industry will stay open during the pandemic. 

To answer a popular question: cannabis dispensaries with a medicinal cannabis license are considered essential and may remain open. https://t.co/9f8LQDXWCP

— Los Angeles County (@CountyofLA) March 20, 2020

Cannabis retailers in Clark County, Washington, were also allowed to operate during shutdowns. Shops reported an uptick in traffic because consumers are panic hoarding pot as the outbreak worsens, reported The Columbian. 

"We’ve had much higher than average sales since last Friday," said Jim Mullen, co-owner of The Herbery, which operates two locations in Clark County.

Mullen said state laws limit how much marijuana a customer can buy at one given time. He said many customers had purchased the maximum allotment.

"People are stocking up," said Adam Hamide, co-owner of Main Street Marijuana, which operates two Vancouver locations. "They don’t know what’s going to happen."

Hamide said the number of items per customer has increased by 50% since last week. He noted that customers have been gravitating towards edibles more than flower in the virus crisis. 

"Those shelves have been hit pretty hard in the last few days," Mullen said. 

And there we have it, the evolution of panic hoarding has transformed over the last month from consumers loading up on food and supplies to now condoms and weed. What’s next? 

Evidence of creaking global supply chains is fast emerging, at risk of triggering the next global depression amid the COVID-19 pandemic. 

A supply chain crisis that began earlier this year, one that we warned from the very start, has now spread across Asia to the Middle East to Europe, and now to the Americas.

"This is kind of a rolling natural disaster," said Ethan Harris, head of global economic research at Bank of America. "In terms of the impact on global production, the shutdown outside of China will likely become bigger than the impact from China."

Harris warned that the shock to global supply chains is deep and broad and could easily last through the next quarter. He estimates that factory shutdowns in many regions could last until May.

He describes a twin shock, one where a supply chain shock has been combined with a demand shock, culminating into a perfect storm, will likely tip many countries into recession, if not depression during the second quarter. 

Bloomberg piecemeals current supply chain disruptions seen across the world: 

Apple has had the most exposure to a China shutdown, with manufacturing plants in the country still operating well below full capacity in late March. Virus-related closings have hammered several of the company’s key suppliers operating in South Korea, Italy, Germany, and Malaysia. 

In late January, Freeport-McMoRan’s CEO Richard Adkerson warned that the virus outbreak in China is a "real black swan event" for the global economy. The company’s mining operations in Peru have recently been halted. Other mining facilities in Chile, Canada, and Mongolia have also been shuttered. 

Across Europe, Airbus and Volkswagen AG have closed production plants amid severe virus outbreaks in Italy, Spain, Germany, France, Switzerland, and the UK. Major transportation networks on the continent have come to a standstill as nonessential travel has been banned in many regions. 

Europe’s car industry has been absolutely devastated by virus disruptions in China and elsewhere. 

Germany’s Schaeffler Group, a major supplier for European carmakers, announced this week that it would reduce hours for thousands of employees and slash production. 

"As we have to reduce production in our plants in the light of the crisis, it was important to us that flexible solutions be quickly established," said Juergen Wechsler, who represents Schaeffler workers for union IG Metall.

Across the Atlantic, we noted as early as the start of March, that China’s supply chain meltdown reached US West Coast ports and was about to unleash economic doom on "the greatest economy ever." Several weeks later, GDP estimates for the second quarter are apocalyptic via JPM’s chief economist Michael Feroli, expecting an unprecedented -14%, a drop the kinds of which have never before been seen.

As the US economy grinds to a halt, General Motors Co., Ford Motor Co., and Fiat Chrysler Automobiles NV are shutting down plants, resulting in steel and aluminum manufacturers to reduce capacity as well. 

"We have ships loading steel in Europe next week headed for the US, but will there be shipments beyond that with industry shutting down?" Anton Posner, CEO of supply-chain management and consulting company Mercury Resources, asked. "Who’s going to hold inventory if there’s no consumption?"

As creaking supply chains are seen across the world, the second quarter will most likely be one of the biggest crashes in economic data the world has ever seen.