Coronavirus Hits China's Economy badly - Stocks plunging - Global Economy in Danger

There are three new confirmed cases of coronavirus this morning in the US , south of San Francisco, so that brings the total number of cases in this country to 11, according to health officials. There are more than 17,000 cases worldwide. The Chinese government says the death toll there, has now risen to 361. So now that is even higher than the number of people who died in China from SARS back in 2003. The death toll in China has now exceeded the SARS outbreak, and the World Health Organization is confirming that the virus may soon turn into a pandemic. But the Coronavirus is not infecting just humans; it is now infecting the markets too. As the battle to contain the virus continues, fears about the impact of the coronavirus have now reached the economy. Hundreds of billions of dollars have been wiped off the value of leading Chinese companies on the first day of trading since China's markets opened after the Lunar New Year holiday. The Chinese stocks are in freefall. The Shanghai Composite Index closed nearly eight percent down; that's its worst performance in nearly five years. The slump coming despite the Chinese government injecting more than 170 billion dollars into the markets to try and ease investors' concerns. The markets in China, when they reopened after the end of the extended Lunar New Year Festival, were just a kind of a sea of red. It is the first time investors have had a chance to express their feelings since the coronavirus outbreak. So yeah, there was going to be a sell-off anyway, but it was pretty severe when it came. The market in Shanghai, for example, where closed down nearly eight percent. Overall about 400 billion dollars worth of value wiped off leading companies. And it spread to commodities as well, which is hugely important in terms of a gauge of China's economic health. Copper, Steel, Rubber, Cotton all of those down by six, seven,eight, percent. This is a barometer not so much of how investors think the Chinese government has dealt with or is dealing with the outbreak, but about the future and about the impact they'll think it has or will have on China's economy. And remember China's economy is already having to deal with a slowdown in its growth rate the like of which it hasn't seen for some three decades. So all the government has been trying to use some measures to try and ease the slowdown there , it is now gonna have to go further, you wonder what else they have left in the tank. Welcome to The Atlantis Report. Monday, China's financial markets just reopened after a ten-day holiday. So you can imagine after ten days there has been a lot of pent up-selling pressure. So upon open the Chinese market actually plunged eight point seven percent, and the government had to step in with a 170 billion dollar package in order to buy these securities that they were selling. It's kind of act as a stopgap so to make sure to restore confidence to the market. This is a temporary measure in order just to reinstall confidence that there is a floor to this entire market that the floor won't just fall out, and your equities will be worth zero. This is a measure meant to be and used in a time of panic, so there is no flash crash; because we all remember how devastating a flash crash could be to the market. It kills all sorts of confidence, and then the market sometimes never recovers after that. They're going to have to prop up the market from now on. Otherwise, it will simply crash. Temporary measures of pumping in money to stop a falling market are not substantially different from what the US is doing. There is one difference, though . The money China is pumping comes from their reserves. The money Fed is pumping in is printed out of thin air. We don't have reserves, only debt. Fed prints money and banks an IOU to back said money. And as THE VIRUS INFECTS THE MARKETS ; SERIOUS TROUBLES BEGIN FOR CHINA AND ALL THE WORLD. THE EPIDEMIC IS BREAKING UP THE DEMAND FOR OIL, as The CHINESE oil DEMAND Slumps . OPEC IS READY TO CUT CRUDE PRODUCTION. BEIJING COULD ALSO LOWER THE GROWTH TARGET FOR 2020, AND THE MANUFACTURING INDEX GOES DOWN . HONG KONG CANCELED "ART BASEL," WHICH SHOULD BE OPEN ON MARCH 17. AND THE GOVERNMENT OF THE FORMER BRITISH COLONY CONFIRMS THE RECESSION . LUFTHANSA STOPS FLIGHTS TO CHINA UNTIL 29 FEBRUARY. Coronavirus is already affecting the Chinese economy, with manufacturing activity which has grown at the slowest pace in January in the last five months and the demand for oil in sharp decline, while the alarm blocks the recovery of economic activities in some provinces after the New Year.   The slowdown in oil demand and the consequent drop in prices (with the WTI falling to around $ 50 and the Brent to 54) would be pushing OPEC, according to various sources, to evaluate an immediate cut in crude oil production in the order of 500 thousand barrels per day. On Tuesday and Wednesday, an OPEC meeting will discuss it. Not only that, but according to reports from the Bloomberg agency, China is considering whether to lower the growth target for 2020. The government could put in place a series of measures to support the economy, including raising the ceiling on the report between deficit and GDP. China's annual growth target is generally announced in March. According to economists, China should aim for growth "around 6%" after the 6-6.5% fork set for 2019, closed with a growth of 6.1%. But even the 6% target, in light of the latest developments, could be revised downwards. Caixin index now is in free fall. The Caixin index, which precisely measures manufacturing activity, fell from 51.5 to 51.1 in January (expectations were 51.3), although it still remains above the 50 point threshold, which separates growth from the contraction. Similar signals had arrived on Friday from the PMI index, which fell to 50. Several analysts cited by Bloomberg also report a sharp drop in oil demand, which dropped by about 20% (three million barrels per day), according to the agency's estimates. The downturn is perhaps the biggest shock suffered by the demand for crude oil since the 2008-2009 financial crisis and could force OPEC and its allies, who are considering an emergency meeting to cut production and stem the drop in prices.   China is the world's largest oil importer after surpassing the United States in 2016 ; and today it consumes about 14 million barrels per day: practically the consumption of France, Germany, Italy, Spain, the United Kingdom, Japan, and South Korea combined.   The third bad news for the Asian giant's economy is the decision by at least 24 Chinese provinces and municipalities - including Shanghai, Chongqing, and Guandong - to have postponed the resuming of economic and productive activities to no earlier than February 10 for fears of coronavirus infection. These are areas that, in 2019, weighed more than 80% in terms of contribution to Beijing's GDP and 90% of exports. Macau has ordered all casinos to close for the next two weeks. Car manufacturers postpone the reopening. Hyundai and Kia Factories are Crippled In South Korea As Part Suppliers In China Remain Closed. The plants are expected to reopen on Feb. 10 or 11, but that entirely depends if manufacturing plants, cities, and transportation networks open in China. International companies are adapting and, in turn, postponing the reopening of activities. The latest to announce was Renault, which has decided to postpone production of the Wuhan plant, which employs 2,000 people, until February 13. Other manufacturers with factories in the area, such as PSA, have made similar decisions. Lufthansa: flights stop until February 29th. Lufthansa announced the extension of all flights to China until 29 February. The German group, which also controls Swiss Air and Austrian Airlines, will not operate flights to and from Beijing and Shanghai until February 29 and March 28 to and from Nanjing, Shenyang, and Qingdao. The German airline initially announced its decision to suspend flights until February 9th. Flights to and from Hong Kong will continue to be insured. When fully operational, Lufthansa and its subsidiaries operate 54 flights to China and 19 to Hong Kong. Those who already suffer for different reasons, but who with coronavirus is likely to get worse, is the economy of Hong Kong. The government has confirmed the recession, with GDP down 1.2% in the whole of 2019 due to street protests against Beijing. The coronavirus will probably keep Hong Kong in recession even in 2020. Most people don't understand how the supply chain works and the timetable of product delivery. Massive amounts of purchase orders across all industries were cut in the first few weeks of January to get ahead of CNY. Once back from the vacation, production ramps up for the busiest time of the year. This production window is already going to be two weeks behind. The production period is 30-60 days, then 6-8 weeks ocean transit time, two weeks of import and transit to distributors, one month of warehouse time, two weeks to retail warehouse distribution, and up to one month to the retail shelf. Essentially six to eight months from the start of production to reach store shelves. What is supposed to be in production right now is what will show up on store shelves in August/September or back to school. One of the largest retail sales drivers of the year behind Christmas. If factories stay closed for the next month, back to school is shot and won't happen. Companies will not keep the POs open if they are going to miss the retail window and will cancel billions of dollars worth of product. The other issue is that shipping is also down. This will create a massive backlog that will need to work through and may draw out transit times by three to four weeks. Companies may just cancel summer product and move right to producing holiday inventory, hoping that might get here in time. I'll tell you right now that if the factories are closed through March, there won't be a Christmas season unless the Chinese work their asses off, and ocean freight moves faster than ever before. How long will this take before US auto/truck manufacturing begins to shut down. How long before US or Mexican or Canadian facilities can pick up the production of critical parts. What other products have critical parts made in China. I know of iPhone. Others? Any business that has all its eggs in one basket (China) is asking for trouble and will pay a high cost for that mistake! So it begins; a cascading Global collapse. As the virus can live for five days on smooth surfaces. US manufacturers are also addicted to slave labor factories in China a lot, if not most, fish sold in the US is processed in China . This is becoming a hard lesson for many countries. Too many eggs in one basket sending all manufacturing to China, where there are four concurrent viruses laying waste to the countryside. I think China looses in a very big way after this dust settles. Will China survives without a complete political and social breakdown. That's the real risk here. This was The Atlantis Report. Please Like. Share. And Subscribe. Thank You.















The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more