Tuesday, February 25, 2020

How Covid-19 Has Profoundly Infected The Global Supply Chain

Indo-Brazilian Associates LLC CEO presents a deep-dive into the delicate and highly vulnerable complexities of global logistics in his article - "How Covid-19 HasProfoundly Infected The Global Supply Chain".

The critical path elements of the global supply chain, including non-Chinese sources, are blocked leaving few alternatives especially for firms whose critical path is the only path.

Chinese suppliers and foreign buyers face a unique triad of challenges – operations, financial and legal - in restarting operations.

Black Swan II includes a mutation of Covid-19 and civil unrest events that could paralyze the global supply chain.

Firms in the post Covid-19 era will create more robust and diverse alternative supply chains thus Chinese manufacturers will permanently have less business even if their costs are competitive.

Wuhan is China’s manufacturing epicenter in which the world is dependent for automotive parts and technology shipments.

Friday, February 21, 2020

OPEC+ Oil Price Challenge: Catching The Falling Knife

Indo-Brazilian Associates forecasts that although China’s economic engine has seized, world markets have not reacted in proportion to the high medium-to-long term post Covid-19 risks if their post-Lunar New Year economic recovery is far weaker than forecast. Additionally:

The Saudis have gained a pyrrhic victory over US shale with increasing bankruptcies and forecast lower 2020 production.

Oil prices are in contango and far below the Saudis $83/bbl requirement to balance their budget and supertanker rates for crude oil have plummeted 75% since 4Q2019.

Even limited new oil production can grease the skids on oil prices if the Covid-19 crisis becomes a prolonged problem.

Autumn is the high season for Chinese oil demand and represents the critical crossroad that will determine the direction of global oil prices.

These particulars and other important factors can be accessed in the following published article: OPEC+ Oil Price Challenge: Catching The Falling Knife.

Wednesday, February 12, 2020

China: A Brutal Post-Coronavirus Economic Reset

China’s post-coronavirus economic landscape will look far different from today with profound political, economic and social changes.

Chinese and foreign businesses will reduce operations while developing the type of emergency protocols and disaster recovery plans reserved for politically volatile countries in the extraction industries for future similar crisis.

China’s government lack of credibility and inability to act rapidly to national emergencies may have planted the seeds of Hong Kong activism amongst the Mainlanders.

Please click on the following link that will provide you with a deeper perspective on these issues:

Sunday, February 2, 2020

China's Crisis Management Stress Test

China confronts a version of the Four Horsemen of the Apocalypse

  1. African swine flu
  2. Hong Kong crisis
  3. Trade war with US
  4. Coronavirus epidemic

China’s draconian quarantine and travel restrictions will accelerate its already slowing economy that will inevitably fall below the political and psychological 6% targeted annual growth rate.

A dramatically weaker Chinese economy will expose financially weak firms that have remained in business through creative accounting resulting in large layoffs and possible social unrest.

Indo-Brazilian Associates LLC provides a comprehensive overview of China's unprecedented challenges in the following article: China's Crisis Management Stress Test.