BRACE YOURSELF: ‘Mother of All Supply Chain Shocks’ Coming as China Locks Down Major Ports Due to Pandemic

Gian

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BRACE YOURSELF: ‘Mother of All Supply Chain Shocks’ Coming as China Locks Down Major Ports Due to Pandemic
@Panzerhund @TimeBandit @Highlander


Over the past month, as Wall Street turned increasingly optimistic on US growth alongside the Fed, with consensus (shaped by the Fed's leaks and jawboning) now virtually certain of a March rate hike, we have been repeatedly warning that after a huge policy error in 2021 when the Fed erroneously said that inflation is "transitory" (it wasn't), the central bank is on pace to make another just as big policy mistake in 2022 by hiking as many as 4 times and also running off its massive balance sheet... right into a global growth slowdown.


And, as we have also discussed in recent weeks, one place where this growth slowdown is emerging - besides the upcoming deterioration in US consumption where spending is now being funded to record rates by credit cards before it encounters a troubling air pocket - is China and its "covid-zero" policy in general, and its covid-locked down ports in particular.

But what until recently was a minority view confined to our modest website, has since expanded and as Bloomberg writes overnight, the effects of restrictions in China as the country maintains its Covid-zero policy "are starting to hit supply chains in the region." As a result of the slow movement of goods through some of the country’s busiest and most important ports means shippers are now diverting to Shanghai, causing the types of knock-on delays at the world’s biggest container port that led to massive congestion bottlnecks last summer that eventually translated into a record number of container ships waiting off the coast of California, a glut that hasn't been cleared to this day.



With sailing schedules already facing delays of about a week, freight forwarders warn of the impact on already back-logged gateways in Europe and the US and is also why HSBC economists are warning that the world economy could be headed for the “mother of all” supply chain shocks if the highly infectious omicron variant which is already swamping much of the global economy spreads across Asia, especially China, at which point disruption to manufacturing will be inevitable.

"Temporary, one would hope, but hugely disruptive all the same" in the next few months, they wrote in a research note this week first noted by Bloomberg.

For those who have forgotten last year's global shockwave when China locked down its ports for several days, a quick reminder: it led to an unprecedented hiccup in global logistics and shipping which hasn't been resolved to this day. That's because China is the world’s biggest trading nation and its ability to keep its factories humming through the pandemic has been crucial for global supply chains.



While the outbreak of omicron in China has been small compared to other nations (if one believes China's official data, which is a big if) authorities are taking no chances, especially with China's continued "zero-covid" policy. In recent weeks scattered infections of both the delta and omicron variants have already triggered shutdowns to clothing factories and gas deliveries around one of China’s biggest seaports in Ningbo, disruptions at computer chip manufacturers in the locked-down city of Xi’an, and a second city-wide lockdown in Henan province Tuesday.

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anti-barabas-ite

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Canada rail is fookun with muh heating fuel...rationed!
 

anti-barabas-ite

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PotstickerSwatstika

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Panzerhund

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They've predicted about 6,000,000 doomsday events since I started reading them. I think approximately 0 have actually come to pass as badly as they predicted.
In the 08 era they were full on dooms. Still waiting zero hedge!

The nifty Tyler Durden avi drew me to them but man oh man are they batting zero.
 

zuckerborglol

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In the 08 era they were full on dooms. Still waiting zero hedge!

The nifty Tyler Durden avi drew me to them but man oh man are they batting zero.
You know, if something ever happens, their writers will be frantically pacing their apartments saying, "we were right!"

Everyone should be prepared, but in the meantime, we gotta live our lives.

The doom stuff is something younger people can compartmentalize, but I've noticed with some boomers, when they get into that stuff they go off the deep end.
 

Enigma

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It's part of the big plan to force the USA to the knees, China would have cut them off the supply line anyway at some point to crash the western economy. It would have sounded like a war declaration if they would have just said "ok you fuckers we have you at the balls and cut you off".

Now they can use the deadly killer virus as reason and most people in the west just nod and say: "of course they have to close their ports to prevent spreading of the killer virus! That's fully legit! Most are vaxxed, but hey we need to be vaxxed and prevent it from spreading, because of the unvaxxed! So zero COvid is still legit"

Our western society is beyond retardation at this point and is going to die.
 

CuzinEd

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The US needs to get away from the dependency on commie chink China. But I know that will never happen with Beijing Biden in the White House. Commie chink China is a cesspit of disease. It always has been. All the major diseases that have had major impacts on the world have come out of China. China needs to be cut off and ostracized till their economy collapses. They are worse off than the US. Loaded with much more debt and their population decline is worse. It makes Japan look good.

Trump was doing this. If he had gotten his second term in 2020 we would all be hearing about how China is on the verge of collapse. Trump would have brought the commie chinks to their knees. But now we have Beijing Biden on his knees with a commie chink rice dick in his mouth. Don't choke Joe. LOL

Corporate America wanted Trump gone as well because they like globalism and the access to cheap foreign labor in places like commie chink China.

The Beijing Biden mandates were just killed here in the US so we won't be having any major shortages and most likely not on anything important. I don't consider the cheaply made junk in China important. We really don't need commie chink China sending their poisoned food over here as well.
 

Garfisch

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The US needs to get away from the dependency on commie chink China. But I know that will never happen with Beijing Biden in the White House. Commie chink China is a cesspit of disease. It always has been. All the major diseases that have had major impacts on the world have come out of China. China needs to be cut off and ostracized till their economy collapses.
Its not just the actual diseases but the economic contagion we need to be quaranting them for. Try telling that to the International Clique hell-bent on spreading disease world-wide as ever, though...
 

CallOfTheBlood

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The articles are generally clickbait but best thing about ZeroHedge are the comments which are very jew aware.

There’s a channel similar to ZH on YouTube called Epic Economist, they always predict the stock market crashing and the economy collapsing next month and are of course always wrong. Its narrated by a middle aged British guy with a grave voice who sounds like he is narrating a horror movie. I can’t help watching it.

 
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