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Economy China might collapse, and the global economy is going into major recession

Discussion in 'The War Room' started by VivaRevolution, Feb 6, 2020.

  1. VivaRevolution Banned Banned

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    Note to the mods: this thread is about the economic impact, not the Coronavirus.

    China Reneges on Commodity Deals, Worsens Global Trade Chaos

    Stephen Stapczynski, Mark Burton and Jackie Davalos
    BloombergFebruary 7, 2020, 4:53 AM UTC


    (Bloomberg) --

    Global commodity trade plunged deeper into chaos as Chinese companies started walking away from purchase contracts because of the spread of the deadly coronavirus.

    A Chinese buyer of liquefied natural gas and a copper importer declared what’s known as force majeure -- meaning they are reneging on deals as the virus constrains their ability to take deliveries. The cancellations are among the first known cases of the legal clause being invoked in commodity contracts due to the epidemic.

    “Everything that we were afraid of, from trade wars or global growth, doesn’t compare,” said Jan Stuart, global energy economist at Cornerstone Macro. “This virus is an entirely different risk, especially in commodities where China’s role dominates.”

    China is the world’s biggest consumer of most raw materials, from energy products to industrial metals, and disruptions in its purchases create havoc across global supply chains. Now, while global markets bounce back from initial fears over the impact of the virus, the fallout in commodity trade is only worsening as Beijing keeps swathes of the country under lockdown and restricts travel.


    In a dramatic and rare step, China National Offshore Oil Corp., the nation’s biggest LNG buyer, invoked force majeure and told some suppliers it won’t take delivery of cargoes because of constraints caused by the coronavirus. French oil and gas giant Total SA rejected the declaration.

    Hours later, it emerged that Chinese copper smelter Guangxi Nanguo had also declared the same get-out clause, refusing to take delivery of raw materials.

    Meanwhile, copper buyers are requesting Chilean miners postpone shipments because of port shutdowns while China’s biggest oil refiner, Sinopec Group, is likely to ask Saudi Arabia to reduce crude supplies next month. Soybeans from Brazil and the U.S. are being held up on arrival in eastern China and Indonesian palm oil shipments are also being delayed.

    “We are truly concerned about the loss of buying power that has spread across every division of commodities,” said Pete Thomas, a senior vice president at Chicago-based broker Zaner Group. “The impact has been much larger than everyone even realizes it would be.”

    For LNG, CNOOC’s force majeure hurts a market already buffeted by rising U.S. supplies and weak demand after a mild winter in Europe and Asia. Even before Chinese buyers walked away from supply contracts, spot prices fell to a record low, crippling the profitability of energy giants such as Royal Dutch Shell Plc and Exxon Mobil Corp.

    CNOOC sent the force majeure notice to suppliers including Shell and Total, according to people familiar with the matter, who asked not to be identified because the matter is confidential. Shell declined to comment.

    Total confirmed it received one force majeure notification, which it rejected after legal analysis, Philippe Sauquet, the company’s president for gas, renewables and power, said in a company presentation.

    “Of course we have to be careful, if there is a real quarantine in all unloading ports in China, we have a real case for force majeure,” he said. “But for the time being, this is not the case. For me it is ordinary negotiation.”

    https://finance.yahoo.com/amphtml/news/chinese-gas-buyer-cnooc-declares-064044988.html

    ________________________________


    China told more than half the country and the heart of it's manufacturing to shut down after Chinese new years until February 10th.

    This virus hasn't been contained in China.

    How can they let people go back to work?

    They can't.

    This is just the beginning.

    Discuss........
     
    Last edited: Feb 7, 2020
  2. Pseudo Sane Black Belt

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    Time to buy puts, I guess...
     
  3. bobgeese Steel Belt

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    Bad time to be in a trade war against a very strong US economy, huh.
     
  4. Orgasmo Silver Belt

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    If stock's any indication, I am up 5% alone in the last two weeks.
     
  5. Wadtucket Gold Belt

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    CCP is scrambling to keep the stock market afloat by injecting a shit ton of money into it. They know what a sharp economic downturn will do for their social cohesion.
     
  6. Teppodama Silver Belt

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    Better get to prepping.
     
  7. Happy Man Banned Banned

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    So our gas prices should plummet, or they have it rigged. Let’s keep an eye on that.

    and when people said, take the numbers and multiply by 100, they might be right. China could be fudging by a huge degree. They aren’t setting up those brand new Hospitals in 10 days for nothing. Watching them do it on vidoe is nothing short of miraculous. And then sending people to fog the streets is so useless it’s desperate. The door to door checks and then seizure of people who fail the tests makes me think this is out of control.

    [​IMG]
     
    Last edited: Feb 6, 2020
  8. VivaRevolution Banned Banned

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    Wait, are you trying to tell me our banking and oil is ran with the same centralized power that makes monarchy, and Communism dangerous?
     
  9. Wadtucket Gold Belt

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    Cathay Pacific slashed 30% of their routes and workforce and their stock is in the green. Really makes you think.
     
  10. VivaRevolution Banned Banned

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    This is all great news for me. They can't crash the economy because Bernie won, if the economy is already crashed.

    Losing my job, is a price I'm willing to pay.

    How many of the Trump folk are that committed?
     
  11. Wadtucket Gold Belt

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    I have no idea what you just said but thanks
     
  12. Stoic1 Weapons are my religion

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    You are being overly dramatic.

    We've been ripe for a recession for a while. This isnt going to turn into another Great Depression or an apocalypse.

    This too shall pass.

    China just got kicked in the nuts is all. 5 minute time out and then the fight is back on.
     
  13. VivaRevolution Banned Banned

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    Explain to me how that works?

    Like paint the picture for how China sends people back to work in the next 3 months without losing all attempted containment of the Virus?
     
  14. SalvadorCollie Brown Belt

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    I almost hope a disaster happens close to home for a lot of you people, you need a reality check.

    you’re like a regular Michael Ricards.
     
  15. Stoic1 Weapons are my religion

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    Nvm. You're right.

    Grabbing the shorty and gas masks and filling up my bathtub.

    Let's do this.
     
  16. VivaRevolution Banned Banned

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    Ha!

    This virus is more than likely going to sweep through the world.

    This is coming home.

    If we were really smart, we would stop trying to contain it, and just accept that 3% of the world population has to die.

    The economic fallout will probably kill more.
     
  17. VivaRevolution Banned Banned

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    Naw, not that serious yet.

    We here in the US are safest from the global economy with 10% of our economy being dependent on foreign trade.

    It's a flu bug you really don't want to catch if you are young or old. People will adjust, but the attempt to contain it, is going to cripple the world economy.
     
  18. Sakurabaism Black Belt

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    Either China will execute half of their population or this shit will spread like a bubonic plague. Either way I'm ready for some post-apocalyptic scenario down the line.
     
  19. Happy Man Banned Banned

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    what’s your problem?
     
  20. SalvadorCollie Brown Belt

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    Cowboy fan..
     

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