China

Co-Vid 19 and Supply Chain

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As I mentioned on these pages a few days ago, there will be supply chain issues with the Co-Vid 19 event, whether you think it is the next Black Plague, or just another version of the flu (from reading the comments on Trent’s post on the subject, we appear to have both reading here). As a reminder, I deal in HVAC distribution, which is a subset of industrial distribution. Most equipment for my market is made close to the USA or in the USA itself, but the component parts are many times made in China.

Today I got the first letter from a vendor talking about the possible issues. They are saying that they are preparing to see product shortages due to component supply problems and are actively trying to source from other places, but the information is very general in nature. It seemed more CYA than anything and almost could be a force majeure setup, recommended by their attorneys to get ahead of contracted jobs. I have no proof of that but have seen enough legal documents in my day to know that a lawyer or ten helped write their CoVid-19 letter rather than a bunch of HVAC dorks like me.

But let’s be real for a minute. The supply chain (in my industry) is long so we aren’t likely to see any problems for the Summer, as most of those orders for inventory are already in the tank and on their way to our warehouses. Fall/Winter is my estimate for issues in industrial distribution if the problem continues. And that could be a BIG problem for you if you have a house where a furnace breaks down and it is -20 outside. Critical infrastructure will get priority I am assuming (blood banks, etc) but you don’t know when that stuff will break, do you?

As I receive more communications from my vendors I will put up an occasional post here. I have a meeting next week in DC and will personally speak with many of my vendor contacts and may get more/better information at the cocktail parties when my contacts get loosened up from the booze. It’s going to be an interesting year in industrial distribution and I imagine that the Chinese are going to lose some business over this when it is all said and done, never to come back (the main reason I don’t think this whole episode is fiction/blown out of proportion – incentives).

SARS-CoV2/COVID-19 Evening Update 2-25-2020: The Pandemic Hide the Name & Blame Games

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The themes of this update will be on issues of COVID-19 spread, World Headlines, border closings, the CDC news conference, developments with fomite spread, how American Public Health institutions build a liablity law suit proof diagnostic test and how that limits tests for community spread and a new recommended COVID-19 sites, social media and videos section.
 
Top line, There are currently 80,420 confirmed COVID-19 cases worldwide, including 2,710 fatalities as of the 24 February 2020 at 5:24 p.m. ET time hack on the BNO News corona virus tracking site (https://bnonews.com/index.php/2020/02/the-latest-coronavirus-cases/) There are 39 nations including China plus three “Chinese special administrative regions” (Macao, Hong Kong and Taiwan) that have reported COVID-19 infections. China, Taiwan, Hong Kong, Japan, Thailand, Singapore, Italy, Iran and R.O.K. all appear to have local, or endemic, spread of the disease. Italy has spawned further spread in Spain proper, it’s Canary Islands possession, Austria, Germany, and possibly Croatia. And now Brazil in South America and Algeria reporting a case signals North West Africa have added two new regions to the Pandemic spread list. The virus has spread from Asia to Europe, North America, Australia and Africa.
 
All of the above meets the pre-COVID-19 WHO standard for a “Pandemic” that requiring endemic spread in multiple nations in multiple WHO regions. However, the WHO just decided that it was time to retire the term “Pandemic” because…something…[insert reasons here]. The WHO statement for doing so was a master piece of unintelligible double talk that boils down to “Lets not scare the “Normies” and set off more “Run, Hide & Hoard” panics like seized Italy, ROK and Singapore in the last few days. Meanwhile the WHO is cheering-on China’s “Hospice-Prison system for the infected” Quarantine as a “Model” in aiding China’s restarting the World economy.
ITALY COVID-19 Confirmed Cases and Deaths 25 Feb 2020
ITALY COVID-19 Confirmed Cases and Deaths 25 Feb 2020
 
World Headline Summary
o WHO warns the rest of the world “is not ready for the virus to spread…”
o CDC warns Americans “should prepare for possible community spread” of virus.
o San Francisco Mayor declares state of emergency
o Later, CDC says pandemic not a question of it, but when
o Brazil may have South America’s first coronavirus case
o Germany confirms 2nd case on Tuesday, brings total to 17
o Italy cases spike to 322; deaths hit 10
o Japan’s Shiseido tells 8k employees to work from home
o Trump Economic Advisor Kudlow tries to jawbone stock markets higher
o HHS Sec. Azar warns US lacks stockpiles of masks
o Italy Hotel in Lockdown After First Coronavirus Case in Liguria
o Algeria confirms 1st case
o First case in Switzerland
o Kuwait halts all flights to Singapore and Japan
o Iran confirms 95 cases, 15 deaths
o First case in Austria
o Spain reports 7 cases in under 24 hours, including in Madrid, Canary Islands, Barcelona
o Iran Deputy Health Minister infected with Covid-19
Pandemic Border Closures
Turkey, Iraq, Kuwait, Afghanistan, Pakistan, Turkmenistan, Georgia, Armenia, and UAE blocked border crossings by Iranians.
Russia, North Korea and Vietnam are blocking border crossings from China
Austria and Switzerlan are blocking border crossings from Italy.
El Salvador on Tuesday announced it would prevent entry of people from Italy and South Korea.
 

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COVID-19 Update, Morning 2-19-2020

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This update is going to be a horror show of numbers involving “super spreaders” and public health incompetence in and around the Diamond Princess cruise ship. As of this mornings’s writing time hack, there are currently 75,129 confirmed COVID-19 cases worldwide, including 2,007 fatalities. China: TOTAL 74,130 2,002 12,017 serious 13,818 recovered 6,242 suspected. (No one believed these numbers except the Who and CDC) Everywhere else: 999 cases, 5 deaths, 39 serious/critical

Next — the COVID-19 infection numbers from the Diamond Princess are horrific.

See:
https://bnonews.com/index.php/2020/02/the-latest-coronavirus-cases/

“Japan: The 542 people from the “Diamond Princess” cruise ship are listed separately and they are not included in the Japanese government’s official count. Fourteen of them are Americans whose test results came in while they were being evacuated from the ship. 246 were _asymptomatic_.”

Given 246 of 542 infected are asymptomatic…we are looking at a 45% of no-symptom super-spreader rate.

Note: the following additional “Diamond Princess” information culled from four US newspapers over at the Free Republic forum’s “Corona Virus Live—mostly Thread. 2/18-2/19”

https://www.freerepublic.com/focus/f-chat/3817559/posts?q=1&;page=151

In one flight of the Diamond Princess returnees. “…the original 14 tested have become 19 due to inflight testing, or 18 pending and 1 CDC confirmed.

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The flight to Travis, CA had 7, and picked up 3 inflight – all asymptomatic

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The Flight to Lackland, TX had 7, and picked up 2 inflight – all but one asymptomatic

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So that’s 14+3+2

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It was reported that Texas sent 6 to Omaha; however Omaha said they received 13. One requiring hospitalization but stable, and the rest asymptomatic. All are awaiting final CDC confirmation.

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Of the 7 in Calif, 2 were transferred to QotV – one asymptomatic received CDC confirmation of positive today; one with mild symptoms is still awaiting CDC.

Third — More super spreader evidence of SARS-CoV-2 Infection in Returning Travelers from Wuhan, China

“In this effort to evacuate 126 people from Wuhan to Frankfurt, a symptom-based screening process was ineffective in detecting SARS-CoV-2 infection in 2 persons who later were found to have evidence of SARS-CoV-2 in a throat swab. We discovered that shedding of potentially infectious virus may occur in persons who have no fever and no signs or only minor signs of infection.”

https://www.nejm.org/doi/full/10.1056/NEJMc2001899

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COVID-19 From a Business Perspective

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I live in the world of HVAC distribution, which is basically a subset of industrial distribution. The information flow concerning COVID-19 is interesting. There are some of my vendors who are in full freak out mode, as they are already getting short on items imported from China. Some of these items are part of a larger item being put together either in Mexico or here in the States. Other items are things that my vendors simply repackage and resell. I have also heard a rumor that certain chemicals and finished copper products are going to have issues in the near future. There are some vendors that are just “shoulder shrugging” the whole thing off at this point. The reactions are all over the board from my vendors.

I imagine that we will know a lot more when the Spring AC calls start coming as most vendors typically have a 30-60 day safety supply stateside.

This could end up quite profitable for other regions of the world vs. China, and it may be business that China will never get back. Time will tell.

COVID-19 Update Morning 2-14-2020

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There are currently 65,213 confirmed COVID-19 cases worldwide, including 1,486 fatalities. Of which 4,823 new cases and 116 new deaths were reported in Hubei province, China.
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There are several trends in this update, as well as the headline summary. First Community spreading of COVID-19 is now established in Hong Kong (attached graphic), Japan and Singapore.
COVID-19 in Hong Kong
COVID-19 in Hong Kong
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Second, the shut down of China as an economic power seems near complete. See the JP Morgan coal for electricity usage and the Goldman Sachs economic projection charts attached to this post. The JP Morgan chart shows that while traditionally daily coal consumption – the primary commodity used to keep China electrified – rebounds in the days following the Lunar New Year collapse when China hibernates for one week. This is not the case this now. There hasn’t been even a modest increase, indicating that so far there hasn’t been a return to work.
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2020 Chinese Coal/Electrical Consumption
2020 Chinese Coal/Electrical Consumption
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Short Form — Lack of Chinese coal use/electric power generation indicates the scale of Chinese industries that are shut down…AKA near total.
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And the “Just-In-Time/Sole-Source in China” world-wide, Multi-national corporation, economic shut down virus is gathering a huge economic momentum. Nissan has shut down auto production in addition to South Korea’s Hyundai for lack of Chinese parts. Rumor has it that Ford has the same issue — as their heater coils in their autos are sole sourced in China — and will soon shut down auto production.   Anything cheap or disposable in the world economy is sourced in China, and the Chinese economy is now off-line for the foreseeable future.
Near Term Economic Projections for China
Near Term Economic Projections for China
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Third, China is again playing games with COVID-19 numbers and particularly the announced deaths to keep the death rate at 2.1%, saying deaths were “double counted”?!? (See JP Morgan graphic).
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Dodgy Chinese COVID-19 Infection Numbers
Dodgy Chinese COVID-19 Infection Numbers
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 This has been ‘officially noticed’ by the White House.
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See:
White House does not have ‘high confidence’ in China’s coronavirus information, official says
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Fourth, American COVID-19 are now officially 15 with a case in San Antonio, Texas from a Wuhan evacuation flight and no deaths. I say “officially” as there possible COVID-19 death in Boise, ID. See:
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The possible COVID-19 victim was a 71-year-old man found dead on Feb 9 in an advanced state of decomposition. He returned from China Feb 5. The initial testing came up negative, but additional tests are being run. The cause of death has not been released.
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An idea of what “Community spreading” in Singapore means can be seen in the following report:
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“Singapore Casino employee confirmed with COVID-19; symptomatic Feb 5, hospitalized Feb 9
On February 13, 2020, the Central Epidemic Command Center (CECC) pointed out that the confirmed case of coronavirus disease 2019 (COVID-19) in Singapore announced on February 11 is an employee at the casino in Resorts World Sentosa Casino. The employee developed symptoms on February 5 and was hospitalized in isolation on February 9. Travelers who visited the casino during the communicable period (February 4-9) are advised to call 1922, put on a face mask and seek immediate medical attention as instructed if suspected symptoms develop within 2 weeks. Moreover, such travelers should inform the physician of any relevant travel history when seeking medical attention.”
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World Headline Summary:
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o China says 1,716 medical workers have been infected
o Singapore reports largest daily jump in cases amid increased human-to-human transmission
o Hong Kong reports 3 new cases
o Hubei’s new party boss orders quarantine tightened
o President Xi touts new “biosecurity law”
o Hong Kong Disney land offers space for quarantine
o Chinese company says blood plasma of recovered patients useful in combating the virus
o US mulling new travel restrictions

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