It’s Just Starting: Apple Supply Woes To Last For Months, Nikkei Reports

It’s Just Starting: Apple Supply Woes To Last For Months, Nikkei Reports

As we’ve noted in the last several weeks, Apple’s Foxconn factories in China had to have production up and running around Feb 10-11 to meet full production targets by the end of the month. So far, some production lines are operating, but much of it has been idled because of the virus outbreak. 

A new report via Nikkei Asian Review has confirmed our thoughts that Apple will see significant supply chain disruptions that could lead to product shortages in the months ahead. The problem could persist through April, sources told Nikkei. 

Apple delivered a statement on Monday evening, admitting it does “not expect to meet the revenue guidance we provided for the March quarter” due to production woes. 

In other words, the guidance Apple issued almost three weeks ago was completely bogus and has now trapped a generation of retail traders long in the stock as it has now faded from all-time highs. 

Apple’s aggressive plan to produce cheaper iPhones in 1H20 could be derailed because of the virus outbreak, as much of the Chinese economy is shutdown.

“The suppliers are doing their best to produce and ship the [cheaper] iPhone within four weeks. …The delay can’t be too long, otherwise, it will affect the sales strategy of Apple’s new products in the second half of this year,” a source with direct knowledge told Nikkei.

“On average, suppliers in the iPhone supply chain are currently operating at around 30% to 50% of capacity,” another source told Nikkei. “The constrained supply of iPhones will likely extend to April. There are still a lot of hurdles, from labor shortages to logistics transportation.”

“The biggest uncertainty is still lingering as no one can be sure whether the coronavirus is under control,” the source said, adding that some suppliers could have more people back to work around Feb 24.

The central region of iPhone production is in Zhengzhou, Henan Province, has restarted some production but not at the levels to reach full capacity by the end of the month.

The Nikkei said production is gradually coming online at a key iPhone facility in Shanghai.

Sources also said iPhone suppliers had seen disruption that could make some critical parts for the iPhone in short supply or not available.

Reuters noted via a source with direct knowledge that some semiconductor suppliers of Apple are currently seeing production issues.

“If one component factory stays closed and they’re the only supplier, then everyone has to stop and wait. And if there are two suppliers and one is shut down, then we need the other to do more,” the source told Reuters.

It’s now evident that iPhone and Airpod shortages could be imminent.

We noted Monday that Apple could start developing production issues in India at its iPhone XR plants because of the lack of parts from China.

Apple is now starting to realize that its complex and global supply chain is at risk of completely imploding. It should be a major wakeup call for investors as they must reevaluate risk as the virus outbreak has generated a “demand shock” that could tilt the global economy into recession. 

And don’t tell US investors that the most exposed industries to a crashing Chinese economy is technology… This won’t end well. 

Tyler Durden

Tue, 02/18/2020 – 15:16

via ZeroHedge News Tyler Durden

“The Magic Is Gone” – Retirement Will Be Different Going Forward

“The Magic Is Gone” – Retirement Will Be Different Going Forward

Authored by Bob Williams via Alhambra Investments,

I’m a Baby Boomer – in the middle of the Boomer pack. Talk to almost anyone of my generation and they’ll tell you stories of what retirement looked like for workers when we were growing up. Back then it was common for someone to work for only one company, starting at age 18 and retiring at 65. You took your pension and gold watch and went home to sit on the porch in a rocking chair. Ah, the good ‘ole days!

But those times are long gone and the magical retirement age of 65 isn’t so magical anymore. The workforce is getting more gray hair as Americans continue working into their late 60’s and on into their 70’s.

Social Security hasn’t considered 65 as full retirement age for a long time. The last workers who received full Social Security benefits at that age were born in 1937. For people born in 1938 and beyond, full retirement age has been increasing by 2 months per year up to those born in 1960 and after, when full retirement age caps at 67.

According to the Bureau of Labor Statistics, in 2016, almost 27% of Americans between 65 and 74 were still working. That’s projected to exceed 30% by 2026. And the number of people 75 and older who continue to work has gone from 6.4% in 2006 to 8.4% in 2016, projected to hit almost 11% by 2026.

Why is it happening? Some people continue working to have something to do. I’ve talked to people still in the workforce, and some who retired and went back to work. They say, “There’s only so much golf you can plan and so many fish you can catch.” They were bored. They needed something to do.

Some continue to work so they’ll have health insurance.

But the majority of people still working are doing it because they have to. The Government Accountability Office (GAO) reports that almost 29% of households age 55 and older don’t have anything saved for retirement and they don’t have a pension. The National Institute on Retirement Security calculated the number. That means 40 million U.S. households have no retirement savings at all.

The Employee Research Institute estimates that all households with a head of household between 25 and 64 years old, cumulative, are $4.3 trillion short of what they need for retirement.

Among households that do have retirement accounts, The Federal Reserve found the median account balance was $60,000. When you consider medical costs for a couple are estimated to be $200,000 during their retirement years—Not Good.

Numbers from the Social Security Administration (SSA) show 50% of retired couples and 70% of unmarried elderly receive 50% of their income from Social Security. Among all Social Security beneficiaries, 21% of married couples and 45% of unmarried persons rely on Social Security for 90% of their income.

There are more reasons for this retirement disaster than Carter has liver pills (Boomers will understand that analogy).  The fact is, retirement will be different going forward than it has ever been. Expect to see more “mature” employees in the workforce. And should you find yourself engaged with one of those more “experienced” workers and discover that the process is taking a little more time than you’d like, take a breath and think that one day, you might be on that side of the equation.

Tyler Durden

Tue, 02/18/2020 – 15:00

via ZeroHedge News Tyler Durden

Jury Deliberations Begin In Harvey Weinstein Rape Trial

Jury Deliberations Begin In Harvey Weinstein Rape Trial

The jury in Harvey Weinstein’s rape trial began deliberations in a New York court on Tuesday, where the disgraced movie mogul faces charges for a first-degree criminal sexual act, two counts of rape, and two counts of predatory sexual assault, according to CNN.

While th 67-year-old has been accused of sex crimes by dozens of women, charges in this case was based on Miriam Haley’s claims that he forced oral sex on her in 2006, as well as Jessica Mann’s testimony that he raped her in 2013 during an abusive relationship.

Because of the way the case was structured, Weinstein can only be convicted on two charges at most – one on Mann’s allegations and one on Haley’s.

Four other women, including actress Annabella Sciorra, also testified that Weinstein sexually attacked them as prosecutors sought to show that he used his power in the movie industry to prey on young, inexperienced women.

Sciorra’s testimony that he raped her in the winter of 1993-1994 is outside of the statute of limitations, but it can be used to support the predatory sexual assault charges, which requires serious sex crimes against at least two victims. Predatory sexual assault is punishable by up to life in prison.

However, Weinstein’s defense attorneys argued that the sexual encounters were consensual. As evidence, they pointed out that both Haley and Mann had sex with Weinstein after the alleged attacks, and they continued to have friendly contact with him for years afterward. He has also denied allegations of non-consensual sexual activity related to the other women. –CNN

Around 40 minutes after deliberations began, the jury sent a lengthy note to the judge, asking for legal definitions of several terms contained in the charges, as well as questions over why the statue of limitations has not run out for certain crimes. The questions indicate that the jury has no idea how the verdict was structured.

Check back for updates

Tyler Durden

Tue, 02/18/2020 – 14:45

via ZeroHedge News Tyler Durden

Nasdaq Just Went Green…

Nasdaq Just Went Green…

Not even a warning from the world’s largest company about the unknown impact of the virus on consumption and supply is enough to keep this full-retard market down…

Quite a ride for futures…

Meanwhile, bonds are bid, gold is surging and yuan is down.

You have to laugh.

Tyler Durden

Tue, 02/18/2020 – 14:29

via ZeroHedge News Tyler Durden

Dershowitz Says Obama “Personally Asked” FBI To Investigate Someone For George Soros

Dershowitz Says Obama “Personally Asked” FBI To Investigate Someone For George Soros

Former President Barack Obama “personally asked” the FBI to investigate someone at the request of billionaire progressive George Soros, according to Harvard Law School professor emeritus, Alan Dershowitz.

Speaking with Breitbart News Sunday, Dershowitz says he won’t reveal the name of the targeted individual, as it will be part of a forthcoming lawsuit.

“President Obama personally asked the FBI to investigate somebody on behalf of George Soros, who was a close ally of his,” said Dershowitz.

“We’ve seen this kind of White House influence on the Justice Department virtually in every Justice Department,” he added. “The difference is this president is much more overt about it. He tweets about it. President Obama whispered to the Justice Department about it.”

Q: Wow, well, we look forward to hearing more about that new.

Dershowitz: That’s not unusual. That is not unusual. People whisper to presidents all the time. Presidents whisper to [the] Justice Department all the time. It’s very common. It’s wrong, whoever does it, but it’s common, and we shouldn’t think that it’s unique to any particular president. I have in my possession the actual 302 form [an FBI record of an interview], which documents this issue, and it will, at the right time, come out. But I’m not free to disclose it now because it’s a case that’s not yet been filed. -Breitbart News

Dershowitz also opined on the impeachment trial of President Trump – of which he was part of Trump’s defense – reiterating that his arguments had been so distorted by CNN that he could sue the network if he wanted to.

CNN — and House impeachment managers — claimed Dershowitz said that the president can do whatever he wants to do, as long as he claims to have believed he was acting in the public interest. Dershowitz had specifically said that criminal-like behavior was indeed impeachable.

Dershowitz also said that former Trump associate Roger Stone deserved a new trial, given new revelations about the extreme political bias of the jury foreperson, who opposed both Trump and Stone. -Breitbart

Hear the entire interview below:

Tyler Durden

Tue, 02/18/2020 – 14:15

via ZeroHedge News Tyler Durden

Morgan Stanley: Is This Cycle So Broken That Nothing Makes Sense Anymore

Morgan Stanley: Is This Cycle So Broken That Nothing Makes Sense Anymore

Authored by Andrew Sheets, chief cross-asset strategist at Morgan Stanley

The US economic expansion started in mid-2009, and the 125+ months since have been remarkable. The longest run without a US recession on record has left the US unemployment rate (3.6%) near a 50-year low, US 10-year yields (1.6%) near a post-war low and price/sales for the S&P 500 (2.4x) at a post-war high. Those extremes are just a few of the many indicators suggesting that we live in unusual times.

And the more unusual the times, the less traditional frameworks seem to work. That’s the subject of an active debate: Are the indicators we use for the US cycle, which moved to a late-cycle ‘downturn’ phase last year, simply wrong?

A quick refresher – there are many ways to define ‘the cycle’, and our models take a relatively simple approach. Looking across a broad composite of de-trended US indicators, we measure whether they are below or above average, and rising or falling. These four possible states give us the four phases of our cycle model – ‘repair’, ‘recovery’, ‘expansion’ and ‘downturn’.

From early 2014 to early 2019 these indicators were in ‘expansion’ (data ‘above trend and rising’), a phase that historically has seen equities do better than valuations would suggest and outperform credit. Over that five-year period, both occurred. The message of this framework was one reason why we never moved ‘underweight’ equities over this period, even as valuations climbed higher.

But then things changed. As growth slowed, our cycle indicators shifted to ‘downturn’ in May 2019, the phase where data are still better than average but deteriorating. This stage is historically associated with worse-than-average risk credit and equity performance, one of several reasons why we went underweight global equities in early July 2019.

Stocks initially struggled from July through September last year. But then they rallied. We closed our underweight in mid-November, and while global equities underperformed government bonds over this period, and saw below-average risk-adjusted return, it certainly didn’t feel like a victory. And as global equities (and credit) continued to press higher after mid-November, bigger questions loomed: Were our indicators simply wrong? Is this cycle so different that past approaches simply don’t apply?

We don’t think we’re alone in asking this question. A not-so-well-kept secret of asset allocation is that there aren’t that many indicators which, over the long run, have given powerful, statistically significant signals. As such, we think that our models share similarities with those of many investors. More qualitatively, the idea that we’re in the ‘late innings’ of the current expansion has hardly been an out-of-consensus view.

Yet amid that confusion (or despair), something notable has been happening. While overall equity and credit markets (beta) have been unusually strong for a ‘downturn’ phase, a number of underlying market relationships (alpha) have been almost exactly what this phase would imply.

Historically, in the ‘downturn’ phase of our indicator, long-dated bonds outperform stocks. Defensive and large-cap equities (modestly) outperform cyclicals and small-caps. US stocks (modestly) outperform those in the rest of the world. Investment grade credit returns more than high yield. Precious metals outperform other commodities. All have been happening, not just year-to-date, but for the better part of a year.

That’s important.

  1. First, it suggests that traditional approaches to the current cycle have been and are still providing useful information. They shouldn’t be discarded simply because the S&P 500 has remained strong.
  2. Second, the divergence between these trends in beta and alpha suggests strategically maintaining more balance until it is resolved; we remain strategically neutral global credit and equities.

Finally, it’s worth identifying where divergences are most unusual versus history. While the outperformance of gold, large-caps and defensive stocks are all ‘normal’ for a ‘downturn’ phase, the magnitude of these moves are not, and are much larger than normal. Oil has historically done extremely well in ‘downturn’, but lately it has struggled. And while there is a lot of conventional wisdom that owning Growth over Value is a classic late-cycle defensive position…

… history is far more mixed: it worked wonderfully in 2007-08, but extremely poorly in 2000-01 – the latter, ironically, being preceded by the last time the relative valuation gap of Global Growth versus Value was near current levels.

Tyler Durden

Tue, 02/18/2020 – 14:03

via ZeroHedge News Tyler Durden

Trump Commutes Rod Blagojevich Sentence; Pardons Ex-NY Police Chief Kerik & ‘Junk-Bond King’ Milken

Trump Commutes Rod Blagojevich Sentence; Pardons Ex-NY Police Chief Kerik & ‘Junk-Bond King’ Milken

In a surprising move, President Trump said on Tuesday that he had granted clemency to the disgraced former Illinois governor, democrat Rod Blagojevich, who had served roughly half of a 14-year sentence on federal corruption charges. The commutation concludes more than a year’s worth of vacillation within the White House over whether to intervene in the Blagojevich case.

The disgraced Blagojevich was removed from office in 2009 and was later convicted of a wide array of corruption charges, including attempted extortion of a children’s hospital for campaign contributions and trying to sell former President Obama’s Senate seat after he was elected to the White House in 2008. The former governor began serving a 14-year prison sentence in 2012.

Blagojevich was infamously caught on tape speaking about the pay-for-play scheme involving Obama’s seat. “I’ve got this thing, and it’s fucking golden. I’m just not giving it up for fucking nothing,” Blagojevich said in a recorded phone call.

According to the Hill, Trump first floated a commutation for Blagojevich in 2018. The two men knew each other previously from when the former governor appeared as a contestant on “Celebrity Apprentice.” Trump then broached the topic again last August, telling reporters aboard Air Force One that he was inclined to commute Blagojevich’s sentence.

“You have drug dealers that get not even 30 days, and they’ve killed 25 people,” Trump said.

“They put him in jail for 18 years, and he has many years left. And I think it’s very unfair.”

The former governor has advocated for a pardon or a reduced sentence for years, appealing directly to Trump in some cases.

Blagojevich’s wife, Patti, regularly appeared on Fox News to make the case for clemency, and the governor penned an op-ed from prison in January in which he ripped House Democrats for impeaching Trump, claiming lawmakers would have done the same to Abraham Lincoln.

A handful of Illinois political figures – including including Sen. Dick Durbin and the Rev. Jesse Jackson – had also come out in support of reducing Blagojevich’s jail time.

* * *

In a separate action, the president also told reporters that he had pardoned former New York Police Commissioner Bernard Kerik.

“I just pardoned Bernie Kerik,” Trump said.

Kerik, who oversaw the NYPD during the Sept. 11, 2001, terrorist attacks, pleaded guilty in 2009 to charges of felony tax fraud and lying to the government. He was released from federal prison in 2013.    

*  *  *

Additionally, AP reports that President Trump has granted clemency to former ‘juink-bond-king’ Michael Milken.

As Bloomberg noted back in 2018, some of President Donald Trump’s closest confidants had urged him to pardon Michael Milken, the 1980s “junk bond king” who has unsuccessfully sought for decades to reverse his securities fraud conviction, according to people familiar with the matter.

The idea of a Milken pardon was reportedly being supported by Treasury Secretary Steven Mnuchin; and Trump son-in-law and senior adviser Jared Kushner, the people said. Another advocate is Rudy Giuliani, the onetime federal prosecutor whose criminal investigation landed Milken in jail but who later bonded with him.

Tyler Durden

Tue, 02/18/2020 – 13:45

via ZeroHedge News Tyler Durden

Stone Shafted: Judge Denies Sentencing Delay, DOJ Balks At New Trial

Stone Shafted: Judge Denies Sentencing Delay, DOJ Balks At New Trial

Roger Stone’s sentencing will proceed as scheduled on Thursday – albeit without a recommended 7-9 years in the slammer, however Judge Amy Berman Jackson agreed on Tuesday to let Stone walk free until she decides on whether he deserves a new trial, according to Bloomberg.

There’s been a lot of work that’s gone into the sentencing,” Jackson said on Tuesday. “It makes sense to proceed.”

That said, Berman declared that the “execution of the sentence will be deferred,” and she’s “willing to make sure that there are no consequences that flow from the announcement of what the sentencing will be.”

Stone’s sentencing has already been delayed once, and he can still appeal even after his sentence is handed down, U.S. District Judge Amy Berman Jackson said at a hearing Tuesday in Washington. Stone had asked for delay of a few weeks while the court considers his motion for a new trial.

Another delay “would not be a prudent thing to do under all the circumstances,” Jackson said. “I’m willing to make sure there are no consequences that flow from the announcement of the sentence at the sentencing hearing.” –Bloomberg

The Justice Department, meanwhile, is reportedly preparing a motion opposing Stone’s request for a new trial, despite President Trump’s repeated insistence that Stone’s situation is unfair – attacking the judge personally.

Attorney General William Barr has come under intense scrutiny after he overruled four anti-Trump prosecutors who wanted Stone locked up for nearly a decade over process crimes.

In addition to more than 2,000 former DOJ officials demanding in an angry letter that Barr resign, the head of the Federal Judges Association has called an emergency meeting to address the Stone situation.

U.S. District Judge Cynthia M. Rufe, the Philadelphia-based judge who heads the voluntary association of around 1,100 life-term federal judges, told USA Today that the issue “could not wait.” The association, founded in 1982, ordinarily concerns itself with matters of judicial compensation and legislation affecting the federal judiciary. –Washington Post

We would note that zero judges spoke out against Stone’s absurd original sentence, or the FBI’s heavy-handed pre-dawn raid on Stone’s house last June over lying, obstruction and witness tampering.

Tyler Durden

Tue, 02/18/2020 – 13:30

via ZeroHedge News Tyler Durden

The Angels Are Falling: Macy’s Downgraded To Junk; Stock Tumbles

The Angels Are Falling: Macy’s Downgraded To Junk; Stock Tumbles

More than two years after Horseman Capital first suggested shorting BBB names on the expectation that a coming recession would lead to an avalanche of “fallen angels”, or ‘just barely’ investment grade names being downgraded to junk, resulting in a major hit to the high yield sector which, sized just over $1 trillion would not be able to absorb the roughly $3 trillion in BBB-rated credits without a corporate bond market crisis, the thesis is starting to play out, and one week after Fitch and S&P downgraded consumer products giant to junk, or from BBB- to BB+, sending a “gargantuan” amount of debt to junk, moments ago S&P downgraded another investment grade staple, Macy’s, to junk, when it cut its rating from BBB- to BB+, due to what S&P said was “considerable execution risks as the company attempts to improve its position in the challenging department store sector.”

The S&P downgrade is below:

Macy’s Inc. Ratings Lowered To ‘BB+’ On Strategy Execution Risks And Intensified Secular Headwinds; Outlook Stable

  • New York-based department store operator Macy’s Inc. recently unveiled its three-year Polaris strategic plan, which includes a significant reduction of the store network, focus on growth in private label brands and off-price stores, as well as cost-cutting.
  • We see considerable execution risks as the company attempts to improve its position in the challenging department store sector. Profitability under the plan is weaker than our prior expectation. This leads us to view Macy’s competitive position as less favorable.
  • We are lowering our long- and short-term issuer credit ratings on Macy’s to ‘BB+’ and ‘B’ from ‘BBB-‘ and ‘A-3’, respectively, and our rating on the company’s senior unsecured debt to ‘BB+’ from ‘BBB-‘ while assigning a ‘3’ recovery rating.
  • The outlook is stable because we anticipate that Macy’s will continue to manage financial leverage by using free cash flow and proceeds from asset sales to reduce debt, keeping debt to EBITDA at 3x or less.

S&P Global Ratings today took the rating actions listed above. The downgrade reflects our view that Macy’s improvement trajectory is weaker than our prior expectations and execution risks are elevated as the company pursues its Polaris strategic plan against an ongoing difficult industry backdrop. Macy’s faces unique challenges among the large national department stores. A long history of acquisitions and expansion has saddled it with excess stores as shoppers’ shifting preferences move away from mall-based locations and toward more value oriented offerings. While we believe management’s strategic plan is a necessary step toward rightsizing the enterprise, it demonstrates to us that the company’s competitive advantage has diminished more than we expected, and to a point that we no longer believe is consistent with an investment-grade rating. We now project operating performance will deteriorate over the next several quarters, with declines in comparable same-store sales. However, we recognize the company’s ability to manage credit metrics by reducing debt with still good free cash flow generation, supplemented by asset-sale proceeds.

The stable outlook reflects our view that cost-savings initiatives should offset sales declines, contributing to S&P adjusted EBITDA margins of slightly above 10% for Macy’s in 2020. We expect the company to maintain leverage of 3x or lower in the next year and believe it will continue to reduce debt using free cash flow and the proceeds of asset sales.

We could lower the rating if Macy’s is unable to track reasonably close to its Polaris plan, or the decline in revenues is greater than we expect because of secular headwinds and competitive pressures. That would lead us to believe that business stabilization is more difficult than anticipated, resulting in larger sales declines and margin erosion. We could also lower the rating if we expect leverage to be sustained above 3x.

We view an upgrade as unlikely over the next year because we believe the new strategy will take several years to implement and bear fruit. In the longer term, we could consider raising the ratings if we believe Macy’s performance has stabilized and the company is on a path to generate consistently positive same-store sales growth and margin improvement, while keeping leverage below 3x.

One look at Macy’s net leverage in recent years suggests that it is far more likely that the next leverage bracket for the company will be 3x (thus resulting in another downgrade) rather than an improvement to 1x or better.

And to think that after repurchasing billions in stock between 2011 and 2016, the company saw the surge in leverage without even buying back its own shares.

In any case, now that buybacks are out of the question for the newly junked Macy’s, investors are bailing with the stock down more than 4%, especially since any future capital raises and debt refis will require a far higher coupon and result in even more value being pulled away from equity.

And speaking of future debt maturities and rollovers, there sure will be a lot of those with Macy’s net debt now the highest it has been since the financial crisis.

Tyler Durden

Tue, 02/18/2020 – 13:17

via ZeroHedge News Tyler Durden

Coronavirus “Lab Leakage” Rumors Spreading

Coronavirus “Lab Leakage” Rumors Spreading

Authored by Frank Chen via The Asia Times,

A Wuhan lab affiliated with the Chinese Academy of Sciences has sought to dispel rumors that it “made and leaked” the highly infectious pneumonic virus that led to the still-raging global outbreak. While Chinese President Xi Jinping was briefed about the public health threat by the Chinese Center for Disease Control and Prevention (CCDC) in early January, the government decided against sounding the alarm because it did not want to “mar the festive vibe” during the Lunar New Year celebrations.

The Wuhan Institute of Virology, located in the provincial capital of Hubei, which is the ground zero of the contagion, has been thrust into the media spotlight by the allegation last week that it leaked “bio-hazardous agents.”

Posts circulating on WeChat and Weibo claim that a researcher at the institute was the first to be infected by the novel coronavirus, now called Covid-19 by the World Health Organization.

The female virologist and a graduate from the institute, referred to as “patient zero,” had never visited the city’s shambolic wet market – also known as the “zoo” – where a range of wild animals were sold. The market has been identified by the authorities as the most probable source of the deadly pathogen.

In a statement released on Sunday, the lab stressed that the researcher had left the city in 2015 and was in good health, refusing to release more information about her for privacy reasons.

A rumor that the Chinese Academy of Sciences’ Wuhan Institute of Virology could have leaked the virus is circulating. Photos: Xinhua

The institute is said to be the nation’s only Biological Security Level 4-certified lab, the highest level in the hierarchy of biosafety and biocontainment procedures codified by the US Center for Disease Control and Prevention. The Wuhan lab has the equipment and staff to handle the most infectious viruses, including Ebola.

Shi Zhengli, the institute’s lead researcher on bat-related viruses, said on her social media account that she “guaranteed with her own life” that the outbreak had nothing to do with the lab but was a “nemesis for the barbaric habits and lifestyle of some people – like eating wild game including bats.”

Shi’s team said at the end of January, when the acute respiratory disease started to strike down more people in Wuhan and the rest of Hubei, that bats could have been the initial host of the coronavirus and SARS virus. Shi also heads an expert panel advising the Hubei provincial government in the battle against the epidemic.

Patients line up in an outpatient department at a hospital in Wuhan. Photo: WeChat

Richard Ebright, a biology professor at Rutgers University in New Jersey, told the BBC that genomic sequencing of the coronavirus showed no proof that it had been artificially modified, yet he could not rule out the possibility that the unfolding pandemic could be the result of a “lab incident.”

Ebright said the coronavirus was a cousin of one found in bats captured by the institute in caves in the southwestern province of Yunnan in 2003, and that samples had been kept in the Wuhan lab since 2013.

A woman wears a face mask as a preventative measure against the COVID-19 coronavirus, as she watches a race during the Hong Kong Gold Cup at the Sha Tin racecourse on February 16, 2020. Photo: AFP

Also, a paper that appeared in the prestigious medical journal The Lancet at the end of last month has lent credibility to speculation about the origins of the virus. The paper quoted seven doctors at Wuhan’s Jinyintan Hospital as saying that the first patient admitted on December 1 had “never been to the wet market,” nor had there been any epidemiological link between the first patient and subsequent infection cases, based on the data from the first 41 patients treated there.

Furthermore, a note from the Chinese Ministry of Science and Technology is seen as a tacit admission that some kind of incident may have occurred at the Wuhan lab.

On Saturday, the ministry issued a directive mandating more stringent handling of viruses and bioagents by all labs and research institutes. The document alluded to the slack oversight and management rampant at some facilities, and stressed that protection and decontamination must be beefed up now that more labs across the nation are intensifying their efforts to develop medicines to treat it and a vaccine to prevent it.

Meanwhile, Hong Kong’s Ming Pao daily reported on Monday that the CCDC had sounded the alarm in a report on the emerging SARS-like outbreak submitted to the top leadership in early January. However, curbing the spread was not at the top of the agenda when Xi and other members of the party’s upper echelon sat down for a Politburo meeting on January 7. Citing its source, the broadsheet said top leaders were opposed to any contingency measures “that may mar the festive vibe and make the public panic.”

In a move seen as a bid to highlight Xi’s early involvement in combating the outbreak, state media revealed on Sunday that the president “gave specific instructions” to contain the spread in the January 7 meeting, amid people’s simmering exasperation with the state and local cadres’ tardy response to the public health crisis that has made more than 70,000 sick across the country as of Monday afternoon.

Gao Fu, chief of China’s CCDC. Photo: Xinhua

And even though the CCDC alerted Xi early on, its chief, Gao Fu, is still under fire for his public assurances last month that people were not likely to become infected as a result of normal human contact. Calls are being made for Gao, a veterinarian by training, to step down.

Tyler Durden

Tue, 02/18/2020 – 13:00

via ZeroHedge News Tyler Durden