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Economic implications of a SARS/Coronavirus outbreak
- Thread starter greggles
- Start date
over9k
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Vaccine numbers:
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Total self interest from the shipping companies, but not wrong:
Maritime frontline workers have been effectively imprisoned on ships around the world, well beyond the expiry date of their initial contracts with many prohibited from disembarking onto dry land. An estimated 400,000 workers have been left immobilised abroad, separated from their families and deadlocked in foreign ports. This not only represents a humanitarian crisis, but threatens to dismantle the smooth running of the global maritime supply chain, which accounts for 90% of all international trade.
The Neptune Declaration on Seafarer Wellbeing and Crew Change is spearheading a global call to action to urgently end the ongoing crisis. Vortexa has joined over 600 industry and human rights leaders in signing the Neptune Declaration; urging the immediate implementation of four key action points that both safeguard the wellbeing of seafarers and protect the maritime ecosystem from collapse:
The disparity in support for seagoing versus land-based employees has become a serious concern for the international maritime community. The Neptune Declaration has the capacity to significantly mitigate the hardships of key workers and protect the functionality of crucial waterborne supply chains.
Join Vortexa and the coalition of leading industry organisations fighting to end the plight of shipping workers by sharing or signing the declaration now.
https://www.globalmaritimeforum.org/neptune-declaration/
Maritime frontline workers have been effectively imprisoned on ships around the world, well beyond the expiry date of their initial contracts with many prohibited from disembarking onto dry land. An estimated 400,000 workers have been left immobilised abroad, separated from their families and deadlocked in foreign ports. This not only represents a humanitarian crisis, but threatens to dismantle the smooth running of the global maritime supply chain, which accounts for 90% of all international trade.
The Neptune Declaration on Seafarer Wellbeing and Crew Change is spearheading a global call to action to urgently end the ongoing crisis. Vortexa has joined over 600 industry and human rights leaders in signing the Neptune Declaration; urging the immediate implementation of four key action points that both safeguard the wellbeing of seafarers and protect the maritime ecosystem from collapse:
- Recognise seafarers as key workers and give them priority access to COVID-19 vaccines.
- Establish and implement gold standard health protocols based on existing best practice.
- Increase collaboration between ship operators and charterers to facilitate crew changes.
- Ensure air connectivity between key maritime hubs for seafarers.
The disparity in support for seagoing versus land-based employees has become a serious concern for the international maritime community. The Neptune Declaration has the capacity to significantly mitigate the hardships of key workers and protect the functionality of crucial waterborne supply chains.
Join Vortexa and the coalition of leading industry organisations fighting to end the plight of shipping workers by sharing or signing the declaration now.
https://www.globalmaritimeforum.org/neptune-declaration/
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Snowstorm threw a spanner in the works this week guys, still can't return to a "normal" virus effects analysis.
One thing to note is that the storm shut down a lot of vaccine distribution/deployment, so some time (maybe a week or so) has been added to the vaccination process.
One thing to note is that the storm shut down a lot of vaccine distribution/deployment, so some time (maybe a week or so) has been added to the vaccination process.
Dona Ferentes
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Things slowly turning around. ...
A Singapore Airlines A380, mothballed at Alice Springs for a year, has arrived in Sydney Kingsford Smith, presumably to be pressed into service again.
A Singapore Airlines A380, mothballed at Alice Springs for a year, has arrived in Sydney Kingsford Smith, presumably to be pressed into service again.
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mm i think the process of getting them airworthy again takes quite some time though.
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Alright so longer term followers of this thread probably remember the big post I made a few months ago talking about the shipping logjam we saw in October/November, and, well, it's only gotten worse. Back then, there was about a dozen container ships backed up waiting for berth space at Los Angeles.
Now it's three times that.
Ship congestion around the ports of Los Angeles and Long Beach has hit an unprecedented level, worsening the bottleneck at the busiest gateway for U.S. imports.
A record 38 container ships are awaiting berth space -- 36 at anchor and two more that were directed to wait in designated areas at sea until anchorages are available. It’s the first time since 2004 that these so-called drift zones have been used to manage traffic into the neighbouring ports.
Kip Louitt, executive director of the marine exchange of Southern California explaining how it works:
"If all the anchorages and contingency anchorages fill up, ships will be placed in so-called “drift boxes” in deeper water. These are actually circles not boxes. Unlike ships at anchorages in shallower water, ships in drift boxes would not anchor, they’d drift. “When you drift out of the circle, which has a radius of 2 miles, you start your engine and go back to the middle of the circle".
The vessels floating off Los Angeles have capacity to be carrying almost 300,000 containers measured by 20-foot equivalent units, according to the marine exchange’s list. L.A. says it’s expecting to handle 155,000 inbound containers next week, 80% more than a year ago, and Long Beach estimates taking in just under 100,000.
Average unload time is now out to eight days and some have had to sit at anchor for nearly two weeks.
A shipping intelligence picture from Vortexa or whomever simply looks like this:
But the actual "in the flesh" images are incredible:
The reasons are twofold:
Firstly, with American spending and stimulus cheques combining with an America that can't go to work but a China that's basically eradicated the virus and therefore can, China and Taiwan effectively become the only place that anyone actually can get anything made - manufactured goods, microchips, whatever. The result is that the traffic is essentially entirely one way, with container prices FROM Asia increasing somewhere between three and five fold depending on exact origin and destination:
And there now being a major container shortage as well. Remember, it's not just the goods that are all moving one-way, it's the containers as well. Even worse, like the ships themselves, every minute spent at anchor is a minute the containers themselves are not being utilised either.
Chinese manufacturers have responded by producing 440,000 containers just in january alone: https://www.bloomberg.com/news/arti...force-global-commerce-to-look-outside-the-box
And amazingly, still can't keep up with the industry's insatiable demand for the things. Nerijus Poskus, vice president for global ocean at San Francisco-based freight forwarder Flexport Inc, reckons the world needs the equivalent of half a million more 20-foot containers -- roughly enough to fill 25 of the largest ships in operation.
As someone who used to run a business in this industry, I can tell you, when containers only cost approximately $2,000 each to make, shipping costs are very rapidly approaching the point where it will be cheaper for the companies to actually leave the containers in the United States and send the ships back mostly empty and just refill them with freshly made brand new containers from China than to actually ship the things back across the world again empty. This becomes especially apparent when you think about the fees and time saved by not needing to unload them once you arrive back in Shanghai or wherever.
The result of this has been companies actually diverting their shipping to basically anywhere they can get it unloaded and just sending the containers cross-country from Seattle or Vancouver or Houston or wherever by rail or if really desperate, trucking them. This means that a container ship may very well be sent through the Panama Canal and unloaded at Houston to get a container over to Los Angeles.
Some carriers were proactive, rerouting their shipments to Western Canada as early as May. The number of shippers taking the plunge has only grown, as it seems more and more vessels are skipping Californian ports altogether. Most of the ships end up going to ports in Victoria and Prince Rupert, but these cities lack the infrastructure network to deal with the increase in cargo efficiently, and they end up almost as congested as the LA and Long Beach ports have been.
Alternatives include ports in Mexico and along the Gulf Coast, as well as certain cities along the East Coast. Unfortunately, most Eastern U.S. ports have already reached their capacity as far as their ability to handle overflow demand. Much of their business now focuses on dealing with shipments from Asia that have come through the Suez Canal. More on this in a moment.
Secondly, the industry is grappling with the exact same problem that every job that cannot be done from home is:
All the staff are off work sick and/or in quarantine with coronavirus. The ports literally cannot get the staff they need to unload the containers and even when they do, can't get the trucks to put the containers on to free up the dockyard space needed to even unload the ships in the first place.
Recall I just mentioned I was going to bring up the shipments diverted to come the long way around from Asia through the Suez Canal. Well, you could be forgiven for thinking that this would be an expensive but effective solution to this problem, and you would be completely wrong. Why? Because it's not just the United States that has been ravaged by/has huge numbers of people unable to work because of coronavirus. So, too, have Egypt and Panama.
The result, well, isn't complex. During the latest call of Oslo-listed Avance Gas, the company’s chief commercial officer, Ben Martin, attributed canal transit delays to “the COVID effect of lack of crew to be able to manage the tugboats, which limits the number of transits.”
In layman's terms: A logjam.
As a result, the Suez and Panama canals have become global shipping chokepoints, with dozens of vessels now sitting at anchor waiting to even so much as transit those:
This problem is so bad that LNG and LPG ships are being diverted around the entire continent, down and around the Cape of Good Hope, in order to get to Asia: https://www.freightwaves.com/news/how-the-panama-canal-traffic-jam-is-affecting-ocean-shipping
The end result of all of this is first, ungodly amounts of sales (income) either delayed or just outright lost due to the inability for companies to actually get their products to their customers: https://www.bloomberg.com/news/arti...millions-in-sales-delays-amid-shipping-logjam
But for the right kind of customer buying the right kind of product, air freight has actually now become a preference over shipping. Ordinarily, air freight costs up to 16 times more than shipping by sea. Not so any more.
With expected revenue of approximately $4 Billion this year but margins of some 35% or so, high-end exercise bike manufacturer Peloton has just spent a lazy $100 million on air freight in a desperate attempt to get its products to its customers down to approximately four weeks from the ten it's currently taking: https://www.bloomberg.com/news/news...s-desperate-to-overcome-its-supply-chain-woes
With trans-Pacific trade routes increasingly backed up, Whirlpool Corp. is also paying for faster options like air cargo to get its components and products to their final markets on time too. Whirlpool have just changed a significant amount of freight to move by air, adding another $10-20 million to their costs in a year, a drop in the bucket for a company that just reported quarterly net sales of $5.8 billion. https://www.bloomberg.com/news/arti...ghting-more-orders-as-shipping-logjam-worsens
And you want to know the kicker for all of this?
Freight costs probably aren't even at their peak yet.
A.P. Moller-Maersk A/S, the world’s largest container carrier, is working at full capacity and can’t yet see a peak in freight rates that have already been propelled to record highs by pandemic consumer spending. https://www.bloomberg.com/news/arti...ee-freight-rate-peak-with-all-ships-in-demand
Shipping and the logistics business as a whole has well & truly become clown world.
Now it's three times that.
Ship congestion around the ports of Los Angeles and Long Beach has hit an unprecedented level, worsening the bottleneck at the busiest gateway for U.S. imports.
A record 38 container ships are awaiting berth space -- 36 at anchor and two more that were directed to wait in designated areas at sea until anchorages are available. It’s the first time since 2004 that these so-called drift zones have been used to manage traffic into the neighbouring ports.
Kip Louitt, executive director of the marine exchange of Southern California explaining how it works:
"If all the anchorages and contingency anchorages fill up, ships will be placed in so-called “drift boxes” in deeper water. These are actually circles not boxes. Unlike ships at anchorages in shallower water, ships in drift boxes would not anchor, they’d drift. “When you drift out of the circle, which has a radius of 2 miles, you start your engine and go back to the middle of the circle".
The vessels floating off Los Angeles have capacity to be carrying almost 300,000 containers measured by 20-foot equivalent units, according to the marine exchange’s list. L.A. says it’s expecting to handle 155,000 inbound containers next week, 80% more than a year ago, and Long Beach estimates taking in just under 100,000.
Average unload time is now out to eight days and some have had to sit at anchor for nearly two weeks.
A shipping intelligence picture from Vortexa or whomever simply looks like this:
But the actual "in the flesh" images are incredible:
The reasons are twofold:
Firstly, with American spending and stimulus cheques combining with an America that can't go to work but a China that's basically eradicated the virus and therefore can, China and Taiwan effectively become the only place that anyone actually can get anything made - manufactured goods, microchips, whatever. The result is that the traffic is essentially entirely one way, with container prices FROM Asia increasing somewhere between three and five fold depending on exact origin and destination:
And there now being a major container shortage as well. Remember, it's not just the goods that are all moving one-way, it's the containers as well. Even worse, like the ships themselves, every minute spent at anchor is a minute the containers themselves are not being utilised either.
Chinese manufacturers have responded by producing 440,000 containers just in january alone: https://www.bloomberg.com/news/arti...force-global-commerce-to-look-outside-the-box
And amazingly, still can't keep up with the industry's insatiable demand for the things. Nerijus Poskus, vice president for global ocean at San Francisco-based freight forwarder Flexport Inc, reckons the world needs the equivalent of half a million more 20-foot containers -- roughly enough to fill 25 of the largest ships in operation.
As someone who used to run a business in this industry, I can tell you, when containers only cost approximately $2,000 each to make, shipping costs are very rapidly approaching the point where it will be cheaper for the companies to actually leave the containers in the United States and send the ships back mostly empty and just refill them with freshly made brand new containers from China than to actually ship the things back across the world again empty. This becomes especially apparent when you think about the fees and time saved by not needing to unload them once you arrive back in Shanghai or wherever.
The result of this has been companies actually diverting their shipping to basically anywhere they can get it unloaded and just sending the containers cross-country from Seattle or Vancouver or Houston or wherever by rail or if really desperate, trucking them. This means that a container ship may very well be sent through the Panama Canal and unloaded at Houston to get a container over to Los Angeles.
Some carriers were proactive, rerouting their shipments to Western Canada as early as May. The number of shippers taking the plunge has only grown, as it seems more and more vessels are skipping Californian ports altogether. Most of the ships end up going to ports in Victoria and Prince Rupert, but these cities lack the infrastructure network to deal with the increase in cargo efficiently, and they end up almost as congested as the LA and Long Beach ports have been.
Alternatives include ports in Mexico and along the Gulf Coast, as well as certain cities along the East Coast. Unfortunately, most Eastern U.S. ports have already reached their capacity as far as their ability to handle overflow demand. Much of their business now focuses on dealing with shipments from Asia that have come through the Suez Canal. More on this in a moment.
Secondly, the industry is grappling with the exact same problem that every job that cannot be done from home is:
All the staff are off work sick and/or in quarantine with coronavirus. The ports literally cannot get the staff they need to unload the containers and even when they do, can't get the trucks to put the containers on to free up the dockyard space needed to even unload the ships in the first place.
Recall I just mentioned I was going to bring up the shipments diverted to come the long way around from Asia through the Suez Canal. Well, you could be forgiven for thinking that this would be an expensive but effective solution to this problem, and you would be completely wrong. Why? Because it's not just the United States that has been ravaged by/has huge numbers of people unable to work because of coronavirus. So, too, have Egypt and Panama.
The result, well, isn't complex. During the latest call of Oslo-listed Avance Gas, the company’s chief commercial officer, Ben Martin, attributed canal transit delays to “the COVID effect of lack of crew to be able to manage the tugboats, which limits the number of transits.”
In layman's terms: A logjam.
As a result, the Suez and Panama canals have become global shipping chokepoints, with dozens of vessels now sitting at anchor waiting to even so much as transit those:
This problem is so bad that LNG and LPG ships are being diverted around the entire continent, down and around the Cape of Good Hope, in order to get to Asia: https://www.freightwaves.com/news/how-the-panama-canal-traffic-jam-is-affecting-ocean-shipping
The end result of all of this is first, ungodly amounts of sales (income) either delayed or just outright lost due to the inability for companies to actually get their products to their customers: https://www.bloomberg.com/news/arti...millions-in-sales-delays-amid-shipping-logjam
But for the right kind of customer buying the right kind of product, air freight has actually now become a preference over shipping. Ordinarily, air freight costs up to 16 times more than shipping by sea. Not so any more.
With expected revenue of approximately $4 Billion this year but margins of some 35% or so, high-end exercise bike manufacturer Peloton has just spent a lazy $100 million on air freight in a desperate attempt to get its products to its customers down to approximately four weeks from the ten it's currently taking: https://www.bloomberg.com/news/news...s-desperate-to-overcome-its-supply-chain-woes
With trans-Pacific trade routes increasingly backed up, Whirlpool Corp. is also paying for faster options like air cargo to get its components and products to their final markets on time too. Whirlpool have just changed a significant amount of freight to move by air, adding another $10-20 million to their costs in a year, a drop in the bucket for a company that just reported quarterly net sales of $5.8 billion. https://www.bloomberg.com/news/arti...ghting-more-orders-as-shipping-logjam-worsens
And you want to know the kicker for all of this?
Freight costs probably aren't even at their peak yet.
A.P. Moller-Maersk A/S, the world’s largest container carrier, is working at full capacity and can’t yet see a peak in freight rates that have already been propelled to record highs by pandemic consumer spending. https://www.bloomberg.com/news/arti...ee-freight-rate-peak-with-all-ships-in-demand
Shipping and the logistics business as a whole has well & truly become clown world.
over9k
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Completely unrelated to that (sort of), CNBC have done an actually decent segment on the chip shortage too:
over9k
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over9k
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Inflation fears are only now sending everyone's heads spinning. The snowstorm in texas was the, er, initial snowball. GUSH, NRGU, ERX, oil, anything inflation-linked has gone nuts. Even the banks have bounced on account of higher interest rates being good for them. Obviously ridiculous to only start getting worried about this in the last week or so, but we all know the quotes about market rationality.
The other problem comes when stop-losses start getting triggered, key technical levels like EMA's broken etc etc and runs begin. 10 year treasuries are just at the S&P yield levels now:
So the risk premium for stocks has vanished, meaning we either get armageddon from here on out or we get a rebound. Almost everything was green in aftermarket trading because hey, it's not like the economy isn't on a recovery path now. A choppy one yes, but we're on the home stretch. Remember, stocks are priced by a combination of risk and future expectations, so with us now at a point of zero risk premium then all other things equal, we're at a price floor. With the other factor being future expectations, which are only positive, it's therefore unsurprising to see everything that's been smashed over the last week or so now green aftermarket.
Today was actually green until powell's comments. The fed doesn't like stepping in unless it has no other choice (it's on record as being the option of last resort) so is generally far more reactive than proactive and we all know not to fight it.
I bought NRGU, ERX, GUSH and a couple of other things quite a while ago but I've had tech like SOXL for ages. I have held everything. Remember, almost all the inflation is a supply-side problem. I posted all the stuff about the shipping problems etc for a reason. Get everyone back to work and making stuff and then supply will increase and prices will come down.
This will also increase energy and oil consumption, hence my non-intention of selling anything
The other problem comes when stop-losses start getting triggered, key technical levels like EMA's broken etc etc and runs begin. 10 year treasuries are just at the S&P yield levels now:
So the risk premium for stocks has vanished, meaning we either get armageddon from here on out or we get a rebound. Almost everything was green in aftermarket trading because hey, it's not like the economy isn't on a recovery path now. A choppy one yes, but we're on the home stretch. Remember, stocks are priced by a combination of risk and future expectations, so with us now at a point of zero risk premium then all other things equal, we're at a price floor. With the other factor being future expectations, which are only positive, it's therefore unsurprising to see everything that's been smashed over the last week or so now green aftermarket.
Today was actually green until powell's comments. The fed doesn't like stepping in unless it has no other choice (it's on record as being the option of last resort) so is generally far more reactive than proactive and we all know not to fight it.
I bought NRGU, ERX, GUSH and a couple of other things quite a while ago but I've had tech like SOXL for ages. I have held everything. Remember, almost all the inflation is a supply-side problem. I posted all the stuff about the shipping problems etc for a reason. Get everyone back to work and making stuff and then supply will increase and prices will come down.
This will also increase energy and oil consumption, hence my non-intention of selling anything
over9k
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And as if on cue, here's a screencap that encapsulates how acute (absurd) the labour shortage in the workshops of the world has become perfectly:
Get everyone back to work (vaccinated) and all of this goes away.
Get everyone back to work (vaccinated) and all of this goes away.
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Vaccine intel from Peter Zeihan:
On March 2 the Biden administration announced a vaccine manufacturing partnership between two of the largest and most successful drug manufacturers in the United States: Johnson & Johnson and Merck. Less than a week previous the U.S. FDA approved J&J's vaccine for emergency use in combatting the COVID-19 virus; its formula will now be produced both in J&J and Merck facilities. (At present neither firm has announced expansion schedules or delivery volumes.)
This is big. Of the five proven anti-COVID vaccine formulas that have been approved for use in the First World, only the J&J formula is refrigerator safe and easy to manufacture and a single-dose formula. As such it can be used for inoculations at any facility worldwide that can handle any other vaccine formula. It is this formula that is capable of vaccinating the majority of the world's population against COVID, and with the Merck tie-up I've little doubt the formula will be able to make good on its potential.
Again, this is big. The question now becomes just how big?
Some backstory:
In his early days, the Biden administration activated an option in the Trump administration's supply contracts with Pfizer and Moderna. Each will now provide the United States with at least 300 million doses by the end of July, providing enough vaccine for 300 million Americans. That alone is enough to cover 90% of the American population, children included. Johnson & Johnson (by itself) will kick in another 100 million by the end of June, and since the J&J formula is single shot, that's enough for another 100 million people.
Such figures suggest every adult in the United States who wants to get the vaccine will be able to get it by June 1, and that on-demand, walk-in vaccinations will be available by mid-April.
In fact, this is now the worst-case scenario for vaccine availability in the United States. The manufacturers continue to find ways to optimize their manufacturing. For example, Pfizer has increased their rate of production by more than 80% in just January and February and has simplified its distribution by proving its formula can be stored in normal freezers as opposed to the dry-ice-ultra-cold set-ups it initially used. Such advances likely shaved 4-6 weeks off American vaccination schedules.
There are also two other vaccine formulas – AstraZeneca and Novavax – that will likely contribute millions of doses (maybe tens of millions) to the effort, bringing the American schedule ever forward.
Best yet, this new J&J-Merck tie up isn't included in the above prognostications. Despite what my vaccine optimism might suggest, vaccine manufacture isn't quick. It requires 2-3 months to grow the vaccine cultures in a vat, and then a few more weeks for testing and bottling. And that assumes the facilities are already ready to go. The primary reason the Pfizer and Moderna formulas are moving along so quickly is that they began production last year before they even applied for FDA approval. The J&J-Merck effort is only beginning now. We shouldn't expect to see first doses from the collaboration in the hands of medical professionals until June.
Which raises some very interesting geopolitical possibilities. June 1 is when the United States will have tens of millions of surplus doses from its existing production contracts. The J&J-Merck partnership will add at least 100 million doses on top of that, with many more to come throughout the summer as everyone's efforts continue to expand. While the bulk of the rest of the world will be starved of vaccine, the United States will have a glut. Since the U.S. government is the entity that contracted for the doses, it will be up to the Biden administration to decide where those doses go.
The term you're looking for is "vaccine diplomacy".
It comes at a fortuitous time. The United States has backed away from the world. This isn't a Clinton thing or a W Bush thing or an Obama thing or a Trump thing or a Biden thing, but instead a United States thing. The American people lost interest in playing a constructive role in the world three decades ago, and America's political leadership has molded itself around that fact. Trump may have been instinctually and publicly hostile to all things international, but Biden is only different in tone. Biden's Buy-American program is actually more anti-globalization than Trump's America-First rhetoric as it is an express violation of most of America's international trade commitments. TeamBiden says it wants to reestablish America's global leadership…but it plans to do so without any troops or money. Sorry, but that's not how it works.
Which makes the possibilities for vaccine diplomacy wildly interesting. The United States has no responsibility to provide COVID vaccines to the world. It can – it will – distribute them, but it will want something in return.
Let's begin with the obvious decisions:
Canada: Like the United States, the Canadian government contracted for more doses than it needed from multiple vaccine developers, working from the wise theory that not all would pan out. Like the United States, several of the firms Canada chose did work out, suggesting a similar vaccine glut. But unlike the United States, no vaccines are manufactured in Canada, so Canadians have had to wait. Not much longer. Whether it is because the United States finishes its vaccination program and so frees up manufacturing capacity for its northern neighbor, or because the Biden administration chooses to apply vaccine diplomacy to its closest friend, Canada will get all the vaccine it needs in June. Considering the Canadian health system is far superior to America's, mass vaccination in Canada should be completed by July 1.
Mexico: America's southern neighbor lacks both America's manufacturing capacity and Canada's health system. It was never going to be among the first countries to achieve mass vaccination. If left it its own devices, that is. In reality, Mexico will be second in line. Mexico is one of America's two largest trading partners (based on how you run the math). Mexicans are America's second- or third-largest ethnic group (depending upon how one defines "Mexican"). The Mexican-American border is the most-crossed (legally) in the world (no matter how you count). Completely ignoring health and ethics and good-neighborliness and focusing purely on self-interest, Mexico is the obvious second choice for American vaccine diplomacy. Vaccination there will take longer than Canada. After all, there are 130 million people in Mexico to Canada's 35 million, and the health system isn't nearly as advanced. But I'd be surprised if the Mexican effort wasn't functionally completed – and with it, the broader North American economy recovered – before August 1.
After that, the choices become less obvious.
The very nature of the vaccines and coronavirus limits the options:
China and Russia are out. In addition to the pair becoming increasingly hostile to all things American, both have their own vaccines and are not interested in any sort of quid pro quo with Washington.
Many of the poor portions of the world are out. In part, its an issue of economics and strategy. Its harsh to say but there is only so much that Bolivia or Niger can offer the United States. But just as important, it is about COVID itself. The people the virus tends to kill are over 65. In the world's poorer countries, not all that many live that long. That hardly means coronavirus is something they can just take in stride, but the mass casualties we've seen in the advanced world just don't occur within the younger-aged populations of the poorer parts of the developing world. And the niggling logistical issues remain; While the J&J formula can be distributed easily, it is the only one that can be – and even J&J needs a refrigerator cold chain.
India is probably out as well. Not because an Indo-American tie up wouldn't be a solid idea, but because India has its own vaccine manufacturing capacity. In fact, India has its own vaccine diplomacy program that already stretches from Mongolia to Myanmar (if you have problems with China, you can probably count on New Delhi to help you out with vaccines).
That still leaves us with just under half the global population that are potential American vaccine diplomacy targets. I can't tell you which countries TeamBiden will pick in which order. That will in part be determined by the new administration's evolving priorities as well as the broader geopolitical environment in the last half of 2021. What I can do is lay out the options from cleanest to messiest:
The Five Eyes: Back in the 1950s the Americans worked with the Brits, Canadians, Australians and New Zealanders to build a globe-spanning intelligence collection system. We know that today as the Five Eyes. The five Anglo nations aren't simply friends and allies, they are family, and it would stretch the mind for all not to be included in some degree of vaccine sharing. It was also be eeeeasy. After all, the UK is taking care of itself, and Canada is already first on America's list. Combined, there are only 30 million Aussies and Kiwis; Supplying sufficient doses would be child's play.
Japan and South Korea: Allies? Check. First World countries? Check. Major trading partners? Check. Excellent health infrastructure? Check. Wildly insufficient domestic vaccine manufacturing capacity? Check. Both the Japanese and Koreans loathed Donald Trump's efforts to wring economic and security concessions out of them, but in the end, both had to give in. Biden has indicated zero inclinations to give back anything Trump secured. If anything, the Biden administration will demand more. Vaccine diplomacy is an excellent way to either secure more concessions in specific or salve the relationships in general.
Southeast Asia: There's a brewing competition between China and the United States for influence throughout the region, making a broadscale vaccination program a useful tool. The problems are complexity and scope. There are some 650 million people in the region. It is also politically and strategically messy. A recent military coup in Myanmar and an aging military coup in Thailand suggest diplomatic complications. Singapore is wildly rich and can take care of itself. Indonesia is huge and poor and lacks basic infrastructure for upwards of one-third of its population. Laos and Cambodia are de facto Chinese satellites. Malaysia is…stuffy. The smartest target might prove to be the Philippines. Manila gets petulant from time to time if the United States doesn't toss the Philippines sufficient financial bones. Vaccines could well scratch the itch for years to come.
Colombia and Chile: This pair – courtesy of long-time friendly trade and political relations – are the only South American countries to make the list. Vaccine diplomacy would be a cheap and easy way to firm up ties. It would also underline the broader region that there are indeed benefits to being part of America's Friends & Family Plan.
Taiwan: The Biden administration is doubling down on every anti-China effort the Trump administration started. On the same day of the J&J-Merck announcement, the new U.S. Trade Representative, Katherine Tai, announced a broadscale legal effort to target pretty much everything China does as a matter of course: from genocide in Xinjiang to political repression in Hong Kong to forced labor to unfair state financing. The only thing I can think of that would piss Beijing off more than the United States providing Taiwan with all the vaccine it needs, would be if an American cabinet secretary accompanied the delivery (Defense Secretary Lloyd Austin would be a delightfully inflammatory choice).
The European Union: Phbbbt. The EU's vaccination effort to this point has been a disaster. In part it is bad luck: Unlike the US or Canada or the UK, most of the formulas the Continental Europeans backed didn't work out. In part it is a bad approach: the EU started its negotiations with would-be manufacturers late and the Euros made price-haggling their top priority, so Europe is at the back of the line when it comes to deliveries. In part it was bad politics: the European Commission briefly – and extraordinarily stupidly – threatened border and trade relations with countries that had better vaccination planning. But mostly it is simply that Europe didn't have any health capacity at the EU level and so it is literally making up everything as it goes.
And so, the rest of the world is pulling ahead. Post-Brexit UK is nearly the best in the world with vaccinations (which is galling enough to the Europeans), but economically devastated and strategically isolated Serbia has already vaccinated 20% of its population. The top-in-class EU country – Denmark – is barely half that far.
As a Europhile, I find it disheartening not only how badly the EU is doing, but how quickly EU members of all wealth levels are losing faith. Hungary, Austria and Denmark have opted to stop waiting for the EU to get its act together and so have entered separate agreements with Russia and Israel. The Netherlands, Sweden, Finland and Poland are likely to follow similar paths.
These disconnects provide a wealth of options for the Biden administration.
It could attempt a straight up vaccines-for-NATO program in an effort to achieve with honey what Trump attempted with vinegar: getting the Europeans to take their security seriously and actually commit financial resources to their own defense.
It could trade hundreds of millions of doses to the EU in exchange for broadscale trade concessions from the entire bloc. Aerospace and agriculture are two particularly sticky logjams that could benefit from vaccine-related lubrication.
It could bypass the EU and NATO completely and instead choose to target specific strategic partners in order to lock down long-term security agreements (Italy and Spain come to mind) to the detriment of any European defense planning.
It could trade vaccines for following the American lead against all things China. Say good-bye to the EU's recent investment bilateral with Beijing?
It could provide the doses to the United Kingdom to distribute to Europe as London sees fit, an action which would reduce any bad PR to first derivative effects and give the United States a leg up in post-Brexit trade talks with the Brits.
It could toss enough vaccine into Germany's lap to inoculate the German population but allow Berlin to decide how to distribute the doses. If the doses go to Germans, the EU would politically implode; but if the Germans distribute them to Europe, the German government would fall.
Best yet, the United States is likely to have so many doses by the fourth quarter, it could attempt multiple options.
There are both Canada and Mexico etf's on the market, but Mexico's demographics are way better than Canada's:
Versus:
There are even leveraged Mexico etf's (ticker MEXX) but as far as I know, there isn't one for Canada.
On March 2 the Biden administration announced a vaccine manufacturing partnership between two of the largest and most successful drug manufacturers in the United States: Johnson & Johnson and Merck. Less than a week previous the U.S. FDA approved J&J's vaccine for emergency use in combatting the COVID-19 virus; its formula will now be produced both in J&J and Merck facilities. (At present neither firm has announced expansion schedules or delivery volumes.)
This is big. Of the five proven anti-COVID vaccine formulas that have been approved for use in the First World, only the J&J formula is refrigerator safe and easy to manufacture and a single-dose formula. As such it can be used for inoculations at any facility worldwide that can handle any other vaccine formula. It is this formula that is capable of vaccinating the majority of the world's population against COVID, and with the Merck tie-up I've little doubt the formula will be able to make good on its potential.
Again, this is big. The question now becomes just how big?
Some backstory:
In his early days, the Biden administration activated an option in the Trump administration's supply contracts with Pfizer and Moderna. Each will now provide the United States with at least 300 million doses by the end of July, providing enough vaccine for 300 million Americans. That alone is enough to cover 90% of the American population, children included. Johnson & Johnson (by itself) will kick in another 100 million by the end of June, and since the J&J formula is single shot, that's enough for another 100 million people.
Such figures suggest every adult in the United States who wants to get the vaccine will be able to get it by June 1, and that on-demand, walk-in vaccinations will be available by mid-April.
In fact, this is now the worst-case scenario for vaccine availability in the United States. The manufacturers continue to find ways to optimize their manufacturing. For example, Pfizer has increased their rate of production by more than 80% in just January and February and has simplified its distribution by proving its formula can be stored in normal freezers as opposed to the dry-ice-ultra-cold set-ups it initially used. Such advances likely shaved 4-6 weeks off American vaccination schedules.
There are also two other vaccine formulas – AstraZeneca and Novavax – that will likely contribute millions of doses (maybe tens of millions) to the effort, bringing the American schedule ever forward.
Best yet, this new J&J-Merck tie up isn't included in the above prognostications. Despite what my vaccine optimism might suggest, vaccine manufacture isn't quick. It requires 2-3 months to grow the vaccine cultures in a vat, and then a few more weeks for testing and bottling. And that assumes the facilities are already ready to go. The primary reason the Pfizer and Moderna formulas are moving along so quickly is that they began production last year before they even applied for FDA approval. The J&J-Merck effort is only beginning now. We shouldn't expect to see first doses from the collaboration in the hands of medical professionals until June.
Which raises some very interesting geopolitical possibilities. June 1 is when the United States will have tens of millions of surplus doses from its existing production contracts. The J&J-Merck partnership will add at least 100 million doses on top of that, with many more to come throughout the summer as everyone's efforts continue to expand. While the bulk of the rest of the world will be starved of vaccine, the United States will have a glut. Since the U.S. government is the entity that contracted for the doses, it will be up to the Biden administration to decide where those doses go.
The term you're looking for is "vaccine diplomacy".
It comes at a fortuitous time. The United States has backed away from the world. This isn't a Clinton thing or a W Bush thing or an Obama thing or a Trump thing or a Biden thing, but instead a United States thing. The American people lost interest in playing a constructive role in the world three decades ago, and America's political leadership has molded itself around that fact. Trump may have been instinctually and publicly hostile to all things international, but Biden is only different in tone. Biden's Buy-American program is actually more anti-globalization than Trump's America-First rhetoric as it is an express violation of most of America's international trade commitments. TeamBiden says it wants to reestablish America's global leadership…but it plans to do so without any troops or money. Sorry, but that's not how it works.
Which makes the possibilities for vaccine diplomacy wildly interesting. The United States has no responsibility to provide COVID vaccines to the world. It can – it will – distribute them, but it will want something in return.
Let's begin with the obvious decisions:
Canada: Like the United States, the Canadian government contracted for more doses than it needed from multiple vaccine developers, working from the wise theory that not all would pan out. Like the United States, several of the firms Canada chose did work out, suggesting a similar vaccine glut. But unlike the United States, no vaccines are manufactured in Canada, so Canadians have had to wait. Not much longer. Whether it is because the United States finishes its vaccination program and so frees up manufacturing capacity for its northern neighbor, or because the Biden administration chooses to apply vaccine diplomacy to its closest friend, Canada will get all the vaccine it needs in June. Considering the Canadian health system is far superior to America's, mass vaccination in Canada should be completed by July 1.
Mexico: America's southern neighbor lacks both America's manufacturing capacity and Canada's health system. It was never going to be among the first countries to achieve mass vaccination. If left it its own devices, that is. In reality, Mexico will be second in line. Mexico is one of America's two largest trading partners (based on how you run the math). Mexicans are America's second- or third-largest ethnic group (depending upon how one defines "Mexican"). The Mexican-American border is the most-crossed (legally) in the world (no matter how you count). Completely ignoring health and ethics and good-neighborliness and focusing purely on self-interest, Mexico is the obvious second choice for American vaccine diplomacy. Vaccination there will take longer than Canada. After all, there are 130 million people in Mexico to Canada's 35 million, and the health system isn't nearly as advanced. But I'd be surprised if the Mexican effort wasn't functionally completed – and with it, the broader North American economy recovered – before August 1.
After that, the choices become less obvious.
The very nature of the vaccines and coronavirus limits the options:
China and Russia are out. In addition to the pair becoming increasingly hostile to all things American, both have their own vaccines and are not interested in any sort of quid pro quo with Washington.
Many of the poor portions of the world are out. In part, its an issue of economics and strategy. Its harsh to say but there is only so much that Bolivia or Niger can offer the United States. But just as important, it is about COVID itself. The people the virus tends to kill are over 65. In the world's poorer countries, not all that many live that long. That hardly means coronavirus is something they can just take in stride, but the mass casualties we've seen in the advanced world just don't occur within the younger-aged populations of the poorer parts of the developing world. And the niggling logistical issues remain; While the J&J formula can be distributed easily, it is the only one that can be – and even J&J needs a refrigerator cold chain.
India is probably out as well. Not because an Indo-American tie up wouldn't be a solid idea, but because India has its own vaccine manufacturing capacity. In fact, India has its own vaccine diplomacy program that already stretches from Mongolia to Myanmar (if you have problems with China, you can probably count on New Delhi to help you out with vaccines).
That still leaves us with just under half the global population that are potential American vaccine diplomacy targets. I can't tell you which countries TeamBiden will pick in which order. That will in part be determined by the new administration's evolving priorities as well as the broader geopolitical environment in the last half of 2021. What I can do is lay out the options from cleanest to messiest:
The Five Eyes: Back in the 1950s the Americans worked with the Brits, Canadians, Australians and New Zealanders to build a globe-spanning intelligence collection system. We know that today as the Five Eyes. The five Anglo nations aren't simply friends and allies, they are family, and it would stretch the mind for all not to be included in some degree of vaccine sharing. It was also be eeeeasy. After all, the UK is taking care of itself, and Canada is already first on America's list. Combined, there are only 30 million Aussies and Kiwis; Supplying sufficient doses would be child's play.
Japan and South Korea: Allies? Check. First World countries? Check. Major trading partners? Check. Excellent health infrastructure? Check. Wildly insufficient domestic vaccine manufacturing capacity? Check. Both the Japanese and Koreans loathed Donald Trump's efforts to wring economic and security concessions out of them, but in the end, both had to give in. Biden has indicated zero inclinations to give back anything Trump secured. If anything, the Biden administration will demand more. Vaccine diplomacy is an excellent way to either secure more concessions in specific or salve the relationships in general.
Southeast Asia: There's a brewing competition between China and the United States for influence throughout the region, making a broadscale vaccination program a useful tool. The problems are complexity and scope. There are some 650 million people in the region. It is also politically and strategically messy. A recent military coup in Myanmar and an aging military coup in Thailand suggest diplomatic complications. Singapore is wildly rich and can take care of itself. Indonesia is huge and poor and lacks basic infrastructure for upwards of one-third of its population. Laos and Cambodia are de facto Chinese satellites. Malaysia is…stuffy. The smartest target might prove to be the Philippines. Manila gets petulant from time to time if the United States doesn't toss the Philippines sufficient financial bones. Vaccines could well scratch the itch for years to come.
Colombia and Chile: This pair – courtesy of long-time friendly trade and political relations – are the only South American countries to make the list. Vaccine diplomacy would be a cheap and easy way to firm up ties. It would also underline the broader region that there are indeed benefits to being part of America's Friends & Family Plan.
Taiwan: The Biden administration is doubling down on every anti-China effort the Trump administration started. On the same day of the J&J-Merck announcement, the new U.S. Trade Representative, Katherine Tai, announced a broadscale legal effort to target pretty much everything China does as a matter of course: from genocide in Xinjiang to political repression in Hong Kong to forced labor to unfair state financing. The only thing I can think of that would piss Beijing off more than the United States providing Taiwan with all the vaccine it needs, would be if an American cabinet secretary accompanied the delivery (Defense Secretary Lloyd Austin would be a delightfully inflammatory choice).
The European Union: Phbbbt. The EU's vaccination effort to this point has been a disaster. In part it is bad luck: Unlike the US or Canada or the UK, most of the formulas the Continental Europeans backed didn't work out. In part it is a bad approach: the EU started its negotiations with would-be manufacturers late and the Euros made price-haggling their top priority, so Europe is at the back of the line when it comes to deliveries. In part it was bad politics: the European Commission briefly – and extraordinarily stupidly – threatened border and trade relations with countries that had better vaccination planning. But mostly it is simply that Europe didn't have any health capacity at the EU level and so it is literally making up everything as it goes.
And so, the rest of the world is pulling ahead. Post-Brexit UK is nearly the best in the world with vaccinations (which is galling enough to the Europeans), but economically devastated and strategically isolated Serbia has already vaccinated 20% of its population. The top-in-class EU country – Denmark – is barely half that far.
As a Europhile, I find it disheartening not only how badly the EU is doing, but how quickly EU members of all wealth levels are losing faith. Hungary, Austria and Denmark have opted to stop waiting for the EU to get its act together and so have entered separate agreements with Russia and Israel. The Netherlands, Sweden, Finland and Poland are likely to follow similar paths.
These disconnects provide a wealth of options for the Biden administration.
It could attempt a straight up vaccines-for-NATO program in an effort to achieve with honey what Trump attempted with vinegar: getting the Europeans to take their security seriously and actually commit financial resources to their own defense.
It could trade hundreds of millions of doses to the EU in exchange for broadscale trade concessions from the entire bloc. Aerospace and agriculture are two particularly sticky logjams that could benefit from vaccine-related lubrication.
It could bypass the EU and NATO completely and instead choose to target specific strategic partners in order to lock down long-term security agreements (Italy and Spain come to mind) to the detriment of any European defense planning.
It could trade vaccines for following the American lead against all things China. Say good-bye to the EU's recent investment bilateral with Beijing?
It could provide the doses to the United Kingdom to distribute to Europe as London sees fit, an action which would reduce any bad PR to first derivative effects and give the United States a leg up in post-Brexit trade talks with the Brits.
It could toss enough vaccine into Germany's lap to inoculate the German population but allow Berlin to decide how to distribute the doses. If the doses go to Germans, the EU would politically implode; but if the Germans distribute them to Europe, the German government would fall.
Best yet, the United States is likely to have so many doses by the fourth quarter, it could attempt multiple options.
There are both Canada and Mexico etf's on the market, but Mexico's demographics are way better than Canada's:
Versus:
There are even leveraged Mexico etf's (ticker MEXX) but as far as I know, there isn't one for Canada.
over9k
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Currently wearing my smug face, I think I managed to call it to the day:
And the close:
Though we'll see if I've eaten my words on monday so not actually getting ahead of myself just yet. Just cautiously optimistic.
The next thing to do is determine if our previous barbell spread will continue to apply after all of this or not. Remember, we are in a recovery play now, even while all of this has been going on.
Here's how the week went, all numbers tripled as I don't bother with etf's that aren't triple levered:
You can see the same very similiar pattern we've seen on the way up for basically the whole year: Indexes following the same broad trend, but the volatility much higher. So the Nasdaq dropped the most, but also recovered the most off the lows.
However, whilst all this was going on, there's been a killing to make on the other side of it. It's all been driven by inflation fears, so anything that benefits from inflation absolutely soared. And by anything, I mean anything commodity-linked.
Here's energy (ERX), big oil (NRGU), and oil exploration (GUSH) as well as regional banks (DPST) and big banks (BNKU) for example and full disclosure, I bought all of them ages ago precisely in anticipation of all of this happening (though not nearly as suddenly):
I have sold absolutely nothing - kept all my tech holdings as well as all these energy and inflation plays. They've actually been an excellent hedge against inflation-derived losses.
If we were sure we'd turned the corner, then the obvious play like with any situation where X goes up but Y goes down, we'd take our gains from X and pump them into Y once we're confident we're at the inflection point. I'm not positive we're there yet, but the evidence suggests so - you can see the same very similiar pattern on the way down this week that we've seen on the way up for basically the whole year: Indexes following the same broad trend, but the volatility much higher. So the Nasdaq dropped the most, but also recovered the most off the lows.
The thing is that energy, oil etc are also recovery/reopening plays so the most likely thing to do from here is to actually just keep holding everything.
The only thing we might want do is grab some UDOW whilst the chip shortage has kept it low (it's industrials heavy and industrials can't operate without chips) and make some sweet sweet gains once that problem gets solved. Catch is, it'll meander making us nothing for quite some time before then so it's a patience play and I dunno about the rest of you but I'm not a patient person at the best of times. There's also just buying DUSL for a pure industrials play.
But the most important thing to be cognisant of is that the inflation problem (not the "everyone losing the minds in the bond market" problem, the actual inflation problem) is not going to be solved until all the supply side issues from both a lack of production and shipping logjam I've already waxed lyrical about are solved.
Here are the virus numbers which are obviously the ones which are going to dictate that. All eyes on lockdown easing from here on out:
So in summary, to quote Jack Vogel:
"Buy everything, and hold all of it".
Last edited:
over9k
So I didn't tell my wife, but I...
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More good news:
And it looks like a lot of lockdowns are being lifted this weekend:
So, only a couple of hours after close, but the futures are all deep into the green:
At this stage, monday/a rebound is looking good.
And it looks like a lot of lockdowns are being lifted this weekend:
So, only a couple of hours after close, but the futures are all deep into the green:
At this stage, monday/a rebound is looking good.
Last edited:
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Love this.
Can Value make a comeback? Or are low IRs really going to keep fuelling large cap Growth?
over9k
So I didn't tell my wife, but I...
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They aren't going to (artificially) raise rates until we see some decent inflation and once everyone get back to work and both production and shipping can increase, that will actually bring prices DOWN. Not to mention that demand for *things* will drop but services and energy demand will increase as everyone get out and do stuff (movies, theme parks, holidays, sports, skiing etc) rather than be stuck at home (you know, pent up demand and all that).
So despite all this carryon over the last week, medium term, interest rates are more likely to go DOWN rather than up. And that's not even counting the next stimulus package(s):
So despite all this carryon over the last week, medium term, interest rates are more likely to go DOWN rather than up. And that's not even counting the next stimulus package(s):
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The spreading collapse of Greensill is not going to create confidence in the economic future of many companies particularly with the long term impact of COVID. Good analysis on the ABC. I suggest there may be some very naked swimmers out there.!!
To finance this, Greensill bundled these debts together — just as was done in the lead up to the GFC — sliced them up into portions and sold them off to investors.
The returns were attractive in a zero interest world, and to add an element of safety to the whole thing for investors, he insured the debt bundles.
Everything went swimmingly until last year. That's when the flaws became obvious.
Instead of vast numbers of suppliers, the clients were a smallish number of large corporations. There wasn't enough diversity to spread the risk, and when a few UK companies experienced difficulties in a COVID induced crisis, the insurers had to cover the losses.
The banks then realised some of these corporations were carrying far more debt than they'd disclosed, the insurers became twitchy about extending policies and the investors, sensing greater risk than they'd anticipated, began to back out.
That's when the whole scheme began to unravel. A fortnight ago, one of the biggest insurers for the scheme declined to renew policies over $US4.6 billion worth of investments and the investment banks directing clients to stump up the cash pulled the plug.
www.abc.net.au
To finance this, Greensill bundled these debts together — just as was done in the lead up to the GFC — sliced them up into portions and sold them off to investors.
The returns were attractive in a zero interest world, and to add an element of safety to the whole thing for investors, he insured the debt bundles.
Everything went swimmingly until last year. That's when the flaws became obvious.
Instead of vast numbers of suppliers, the clients were a smallish number of large corporations. There wasn't enough diversity to spread the risk, and when a few UK companies experienced difficulties in a COVID induced crisis, the insurers had to cover the losses.
The banks then realised some of these corporations were carrying far more debt than they'd disclosed, the insurers became twitchy about extending policies and the investors, sensing greater risk than they'd anticipated, began to back out.
That's when the whole scheme began to unravel. A fortnight ago, one of the biggest insurers for the scheme declined to renew policies over $US4.6 billion worth of investments and the investment banks directing clients to stump up the cash pulled the plug.
How one Aussie billionaire's fall from grace could wallop the city of Whyalla
Lex Greensill's rise from Bundaberg farmer to world-renowned billionaire wasn't your typical rags to riches story, but now he is desperately trying to stave off a collapse that threatens the livelihood of thousands, writes Ian Verrender.
over9k
So I didn't tell my wife, but I...
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Ugh. Big microsoft and government hack as well as a saudi oil facility blown up just a few hours ago. Futures flipped entirely in response. No rebound today, but give it time, this WILL reverse.
Oil futures etc have predictably gone mental.
Oil futures etc have predictably gone mental.
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I guess the Whyalla steelworkers will be getting worried again, just when things looked like they were coming good.The spreading collapse of Greensill is not going to create confidence in the economic future of many companies particularly with the long term impact of COVID. Good analysis on the ABC. I suggest there may be some very naked swimmers out there.!!
To finance this, Greensill bundled these debts together — just as was done in the lead up to the GFC — sliced them up into portions and sold them off to investors.
The returns were attractive in a zero interest world, and to add an element of safety to the whole thing for investors, he insured the debt bundles.
Everything went swimmingly until last year. That's when the flaws became obvious.
Instead of vast numbers of suppliers, the clients were a smallish number of large corporations. There wasn't enough diversity to spread the risk, and when a few UK companies experienced difficulties in a COVID induced crisis, the insurers had to cover the losses.
The banks then realised some of these corporations were carrying far more debt than they'd disclosed, the insurers became twitchy about extending policies and the investors, sensing greater risk than they'd anticipated, began to back out.
That's when the whole scheme began to unravel. A fortnight ago, one of the biggest insurers for the scheme declined to renew policies over $US4.6 billion worth of investments and the investment banks directing clients to stump up the cash pulled the plug.
How one Aussie billionaire's fall from grace could wallop the city of Whyalla
Lex Greensill's rise from Bundaberg farmer to world-renowned billionaire wasn't your typical rags to riches story, but now he is desperately trying to stave off a collapse that threatens the livelihood of thousands, writes Ian Verrender.
'It's important Whyalla is not led to fail': SA government seeks answers as uncertainty hovers over steelworks financial future
After taking a long road back to profitability, the Whyalla steelworks is once again facing uncertain times following speculation around the financial situation of its owner, British billionaire Sanjeev Gupta.
www.abc.net.au
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An otherwise viable and very high profile business located in a regional area that finds itself in difficulty through no fault of its own.
Ticks every possible box for government to get involved and I expect that's what would occur.
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