Virus Misdirection?

Submitted by Chris Ducret on Fri, 02/28/2020 - 18:31
Chris Ducret

The announcements from Japan to Seattle of schools being shut down. Travel being restricted, stay away from crowds etc. is it all misdirection.  The stock market (that is on a pedestal as the true state of the economy) is going down a black diamond hill right now. Zombies should be fearful, companies low on cash will be getting squeezed.

The real impact is the break in the supply chain.  Even a few days or weeks delay will not show up in many cases for months down the road.  Hyundai has shut down, Land Rover on the cusp of shutting down due to missing parts. 

With China being down for 4-6 weeks, the interruptions are on the edge of the production envelope. Things spin back up next week in China, the impact will be uncomfortable but not catastrophic. For the impact of shut down to major supply chain, look at the aftermath of the earthquake in Japan in 2016.

Difference here is while China was a hit to the supply chain (major), the panic has moved to the consumption side of the world. With production and consumption impacted worldwide, it will be more difficult to deal with than when Japan shut down.