iftttwall

Via Safehaven.com,

Once the excitement of taking over a country settles, such as checking out the presidential gym and enjoying some fun on bumper cars, Afghanistan’s new Taliban authorities will face the same issues any other government will: how to finance the country.

Following the Taliban’s takeover of the country last weekend, many international financial institutions have blacklisted the new government, and the currency is in freefall. 

On Thursday, the International Monetary Fund (IMF) decided that Afghanistan would no longer be able to access its resources.

The lender said that resources of over $370 million had been set to arrive later this month. The funds were approved last November and intended to support Afghanistan’s recovery from the Covid-19 pandemic, anchor economic reforms, and spur donor financing.

An IMF spokesperson said it was due to “lack of clarity within the international community” over recognizing a government in Afghanistan.

The IMF’s decision follows a letter of more than a dozen GOP lawmakers to Treasury Secretary Janet Yellen expressing alarm over IMF funds heading to the Taliban.

“The potential of the Special Drawing Rights (SDR) allocation to provide nearly half a billion dollars in unconditional liquidity to a regime with a history of supporting terrorist actions against the United States and her allies is extremely concerning,” they wrote.

Earlier this week, the Biden administration also announced that central bank assets the Afghan government has in the U.S. would not be made available to the Taliban, who remain on the Treasury Department’s sanctions designation list in the aftermath of the 9/11 attack.

According to the media, the U.S. has frozen nearly $9.5 billion in assets belonging to the Afghan central bank and stopped shipments of cash there.

Reuters cited an Afghanistan official saying that the country’s central bank, Da Afghanistan Bank (DAB) is thought to hold foreign currency, gold and other treasures in its vaults–most of which is said to be held outside Afghanistan.

In addition to that, Western Union has also suspended money transfer services to Afghanistan “until further notice”.

According to data compiled by Bloomberg, the country’s currency Afghani has fallen as much as 4.6% to 86.0625 per dollar on its fourth day of decline. 

The Taliban won’t be able to easily finance Afghanistan on its time-honored trade of opium poppy farming, which it has pledged to ban. Afghanistan is estimated to be responsible for around 80% of global opium and heroin supplies. 

According to a UN report from June,  the “primary sources of Taliban financing remain criminal activities,” including “drug trafficking and opium poppy production, extortion, kidnapping for ransom, mineral exploitation and revenues from tax collection in areas under Taliban control or influence.”

But the alleged new and improved Taliban have promised not to be a drug dealing cartel any longer (along with pledges to respect women’s rights to some extent and to cease retaliatory violence). It would hardly behoove the IMF to fund the world’s biggest heroin operation.

Following this week’s IMF and U.S. financial intervention, and considering that some 75% of public spending is financed through international aid grants, many believe that without opium, the Taliban can’t survive.

So far, there is no evidence of any change of heart.

Dozens of reports have emerged claiming that those failing to comply with Sharia law or Taliban “virtues” are being beaten up and tortured, mostly women and those who cooperated with U.S. forces in the country.

The United Nations has warned that the Taliban are searching for people who worked with U.S. and NATO forces and are going “door to door” to find them.

Container ships resumed berthing operations after a two-week shutdown at one of the world’s busiest ports in China, according to Bloomberg. 

The two-week closure of the Meishan Terminal in Ningbo, China, was due to a COVID infection at the port earlier this month. Chinese authorities suspended operations at the terminal, causing massive shipping delays and container backlogs. 

The Meishan terminal handles about a quarter of the port’s volume and caused severe vessel congestion at the terminal and other surrounding ports. We noted this in a recent shipping note titled “China’s Top Port Shuttered For Seventh Day As Congestion Crisis Spreads.” 

Shipping data compiled by Bloomberg shows five container ships have left the Meishan terminal in the past few days after berthing. Ningbo-Zhoushan port office released a notice Monday outlining the terminal was still closed. Still, the good news is the movement of vessels around the terminal has sparked optimism among shippers that full capacity could imminently return as long as there are no new COVID infections. 

Shipping line CMA CGM SA told customers that Meishan terminal resumed partial operations on Aug. 18 and expected full operations by mid-September. Two of the French company’s ships, Rivoli and the Samson, were being loaded and would depart from the terminal “very soon,” the shipper said. Bloomberg data already shows the two vessels have already left the Ningbo region. 

Ningbo port’s container throughput has been slashed by a quarter since Aug. 11, and congestion at other major Chinese ports has soared. Here is some data on the congestion in Asia from last week. 

Throughput at the port will likely increase in the coming days in stages to whittle down the backlog of containers, with a full resumption of operations by mid-September. 

However, increasing throughput at Ningbo could be bad news if departed vessels are headed for US West Coasts due to port congestion is at record highs. 

The global supply chain remains an utter mess. 

Authored by Eric Peters via EricPetersAutos.com,

If you knew someone who chose not to exercise, who ate too much not-good food, would you exult in the news of his having been diagnosed with diabetes or cancer? Most people would not and if any did exult, it would be considered evidence of a mental defect (sadism) by the rest.

Yet people – some people – practically celebrate when a person who questions the rightness of forcing people to submit to “vaccinations” gets sick – and practically dance on their graves if they die.

There are many good – sound – reasons for objecting to forcing anyone to get “vaccinated” that have nothing to do with sickness, as such, but rather with this business of forcing people to take medicine or submit to medical treatment of any kind whatsoever. It sets a precedent by affirming the principle that it is ok to force people to take medicine and submit to medical treatment. Once that is established, for any medicine or treatment it will naturally become the basis for requiring that people submit to other medical treatments; they will be required to take other medicines – as decreed by the government and enforced by corporations, through “policies” that render it impossible to work or even to socialize without proof you’ve submitted to these decrees.

There are some, perhaps, who wish to live in such a world but most probably do not. Yet they cannot see that they are helping to build such a world by supporting this push to make everyone roll up their sleeves.

Just this once? If you think so, think again. Please.

As always, there are people who cannot see the inevitability. The same people who could not see that mass acceptance of the “masks” – as these psychological training devices are styled – would lead to mass “vaccinations” – as these unsafe and ineffective temporary symptom suppressors are styled. The same people, in mentality, who could not see that giving the federal government the legal power to seize – that is, to “tax” – a portion of the incomes of the very wealthy would inevitably lead to the government seizing a portion of the incomes of everyone.

The proportion ever increasing.

If the government can erect checkpoints on the public right-of-way, at which people who’ve given no reason to suspect them of having committed any crime can be stopped at gunpoint and required to produce “papers” – and also demonstrate to the satisfaction of an armed government worker that they are not “drunk” – then the government already has the power – in principle, established in law by precedent – to erect checkpoints at which people can be required to prove they are “vaccinated” and present “papers” so affirming.

This is why many thoughtful people object in principle to forcing anyone to be injected with anything. The shot itself is an incidental affront. It is what the affront allows – and enables – that matters.

Try to envision what such a world will be like.

Imagine being required to go to the doctor’s office, like a pet taken to the vet.

A doctor perhaps not even selected by you, who wields power over you.

A doctor that can order you to do as he says – to take what he says – and if you do not do as he says and take what he says you must, can see to it that you are punished for it.

Envision it working in the manner the insurance mafia currently coerces you to buy its services, want them or not. If you decline, if you allow your policy to lapse or refuse to renew, the government is immediately informed and your former right to drive – which is now a conditional privilege – is rescinded, making it exceedingly difficult for you to live since most people must drive in order to work and to obtain the necessaries of life. The mafia is well-aware of this power it possesses and uses it to get what it wants, which is your money – and submission.

Now imagine the health insurance/medical-pharmaceutical mafia wielding similar power. It will encompass the entirety of your life – in the name of “public health” and the “common good.” Sickness – including hypothetical sickness – will be used to justify all-encompassing measures, visited upon everyone – enforced by a technocratic social credit regime, as in China – which America increasingly resembles.

Your diet and habits monitored, since you might get diabetes or develop hypertension if you eat too much not-good-for-you foods, the amount and type to be determined for you (for your own good) by a medical technocracy empowered to compel your obedient submission via immediate excommunication from work/social life at the first sign of recalcitrance. You are allowed to eat only what they say and only as much of it as they say you may.

Your activities – including your formerly private sex life – are now also a matter of public “concern,” since various sex acts can be “risky” and that cannot be allowed. At the least, your routines must be monitored.

Not exercising can increase your risk of becoming sick and “we” – meaning, they – cannot have that.

In his bleakly predictive novel, 1984, Orwell described mandatory calisthenics each morning – the physical jerks – led by a Telescreen termagant. Such technology now exists in the form of Telescreens people carry with them everywhere they go; larger versions of the same – the “smart” TV, which can send and receive and which listens and watches – are in almost every home.

Are you ready for Captain Freedom’s workout?

All of this – and worse – will inevitably become regularity once the principle is allowed that the government – or corporations, which are the creatures of government – can force anyone to be injected with this medicine (whatever it actually is). It will no longer be a bulwark against such to claim bodily autonomy, that your corpus belongs to you and thus no one else has the right, morally, to tinker with it.

It will no longer be a defensible (in law or practice) argument to state – factually – that you, as an individual, have no need of this or that medicine or procedure, since you are not sick and the putative sickness which perhaps threatens others doesn’t threaten you much, if at all. The good of the body – as Landru, in the old Star Trek series styled it – will be all that matters.

The collective – as defined and decreed by a handful of technocratic Landru-bureaucrat-politician-doctor-priests, all for our own good, as they see it.

No questions. No disobedience. No independence – of mind or of body. No life, except that which we are allowed – like cattle in a pen. Does this sound good to you? Is it worth easing your fear that someone, somewhere might be “unvaccinated”?

Will your lust to make them suffer be satiated once we all suffer, together – forever?

*  *  *

If you like what you’ve found here please consider supporting EPautos. We depend on you to keep the wheels turning! Our donate button is here.

The rise in the Delta variant of Covid-19 in Asia is starting to gum up the works of what was thought to be the potential road to recovery for the global semicondcutor shortage.

Now, it looks as though Malaysia is once again becoming a bottleneck. 

Malaysia is home to names like Infineon Technologies AG, NXP Semiconductors NV and STMicroelectronics NV, who all have operating plants in the country. With Covid infections soaring locally, plans for lifting lockdowns and re-opening production look as though they could fall by the wayside, according to Bloomberg.

Daily infections are up to 20,000 per day, up from just 5,000 per day in late June. 

Just last week, Ford cited “a semiconductor-related part shortage as a result of the Covid-19 pandemic in Malaysia” as a reason for temporarily suspending production at one U.S. plant. 

Malaysian companies were allowed to operate at 60% of capacity during June lockdowns and they will be able to move to 100% capacity when more than 80% of their workforce is vaccinated, the report says.

Despite this, factories have shuttered for weeks at a time for sanitation guidelines and the Delta variant is proving “difficult to stop”. 

Samuel Tan, a semiconductor analyst with Kenanga Investment Bank, told Bloomberg: “This could be very disruptive for Infineon and other companies that have plants of a few thousand workers.”

Lead times for chips increased by more than eight days to 20.2 weeks in July, from June. It is the longest wait time since Susquehanna Financial Group began tracking the data. 

Wong Siew Hai, president of the Malaysia Semiconductor Industry Association, commented: “Malaysia is a key player in the global semiconductor trade. Thus, any disruption anywhere along the supply chain will have knock-on effects elsewhere in the ecosystem.”

Rabobank also put out a note on Tuesday of this week expressing concern regarding Malaysia: 

Recent (partial) port closings in China and the spread of Covid in many parts of Southeast Asia suggests we haven’t seen the end to supply disruptions. Indeed, mismatches may well be expected to increase in upcoming months. Taiwan and South Korea have recently been singled out as the main countries to watch when it comes to global chip shortages, but Malaysia should not be overlooked, as Bloomberg reports. The country has advanced its position as a major chip testing and packaging sector in recent years, but may – as a result – turn out to be another weak part in the chain given the rampant pace of delta, which has forced companies to cut back operations in the country.

Recall, in a note we put out just days ago, we made light of the fact that IHS predicted 2.1 million auto units could wind up being lost in the third quarter of 2021 alone due to continued semi shortages. 

There is still little in the way of normalization to be optimistic about until the second quarter of 2022, IHS estimated. 

An IHS report stated: “The situation is still fraught with challenges. We are also seeing additional volatility due to Covid-19 lockdown measures in Malaysia where many back-end chip packaging and testing operations are performed.”

Toyota Purchasing Group Chief Officer Kazunari Kumakura said this week: “Especially in Southeast Asia, the spread of Covid and lockdowns are impacting our local suppliers.”

By Greg Miller of Freightwaves,

How long does it take to build a container? The short answer is: The time is insignificant, a matter of hours including the automated process of putting the steel walls together and drying the paint.

Containers are built at highly efficient and highly automated factories, virtually all of which are in China. Eight out of every 10 containers built worldwide are produced by just three Chinese companies: CIMC, Dong Fang and CXIC.

One indicator of just how quickly new boxes can be popped out: China’s factories can theoretically work around the clock and add a second 12-hour shift, but haven’t done so despite this year’s historic demand. One reason they’ve kept to one shift (besides propping up container prices) involves customer preference.

During an interview with American Shipper in May, John Fossey, Drewry’s head of container equipment and leasing research, explained: “The waterborne paint does not dry as effectively on night shifts as on day shifts, particularly during winter months when temperatures are lower. Producing a whole box at night and painting containers at night — some customers don’t want that. They’re not as good quality as those produced during the day shift.”

The implication is that a box can be produced, painted and dried within one shift.

Another indicator of how quickly containers can be built is the sheer volume produced. According to Drewry, factories churned out 3,368,000 twenty-foot equivalent units worth of equipment in the first half of this year.

Fossey said that factories, as of May, were operating 10-11 hours a day for six days a week, with the majority of the units produced being 40-footers versus 20-footers. Assuming, on a back-of-the-envelope basis, that factories are putting out 70% 40-footers and 30% 20-footers, this comes out to a first-half pace of over 20 containers produced every minute factories were online.

The bigger question

Practically speaking, however, the bigger question is not how long it takes a Chinese factory to build one box. The bigger question is: How long does it take between when you place the order for the box and when you put it in service?

In normal times, it has reportedly taken as little as six weeks. Needless to say, these are not normal times. The lead time this year has reportedly been as long as four months.

The final piece of the “how long does it take?” timeline involves delivery of the newly built boxes from the factories to the liners for deployment.

In the case of 20-foot and 40-foot ocean containers, the lag is minimal. One of the main reasons box factories are overwhelmingly concentrated in China (besides Chinese government support that has lowered production costs) is that newly produced equipment can be immediately deployed in the Chinese export market, with no need for costly repositioning by liners.

As of late July, inventories of new boxes were just two to three weeks, implying that newly constructed equipment was being rapidly absorbed by the market within a month.

It’s a different story for U.S. domestic 53-foot containers. Despite the fact that these boxes are only used in America, none are built there — they’re all built in China because even with repositioning costs, American builders can’t compete with China.

After their construction, 53-footers must compete with laden 20- and 40-footers for slots on trans-Pacific eastbound shipping services — services that are now experiencing massive delays. Some retailers are taking extreme measures: Walmart, for example, has brought in 53-footers overseas on the decks of non-container ships this year.

Put it all together and depending on the type of container, the time it takes from order to delivery looks to be somewhere from one to two quarters.

The ‘hog cycle’

That’s still short enough so that container equipment does not suffer excessively from the so-called “hog cycle” effect that plagues commercial shipping. In economic theory, the hog cycle refers to the lag time between production — the breeding period of pigs — and when the decision to increase production is spurred by higher pricing.

The hog-cycle effect has historically had a massive impact on ocean freight volatility. For example, a container ship ordered today won’t be delivered until 2024. By that time, demand may have plunged and the market may not need the new ship. Conversely, rates are so high today partly because of low ordering two to three years ago, when rates were low.

In contrast, the time lag between container-equipment ordering and delivery is short enough so that production does not overshoot or undershoot by too much, reducing volatility.

Brian Sondey, CEO of container lessor Triton International (NYSE: TRTN), explained during his company’s July 27 conference call: “The most recent container orders we placed were for delivery through the end of September. Usually, we see shipping lines slowing down the pace that they bring containers into their fleets in the fourth quarter. This year is, of course, an unusual year. It’s certainly possible we’ll see customers continuing to pull equipment into their fleets in the fourth quarter to help them with ongoing operational disruptions.

“But the good thing about our business is we don’t really have to make guesses about it, at least not yet. We’ll have a benefit probably of another month or so before we have to start making guesses ourselves about whether we want to order high volumes of equipment for the fourth quarter. To the extent that the market is there, we’ll continue to buy.”

Just over a month after the most broad-based COVID outbreak since the original outbreak in Wuhan, China is claiming to have virtually eliminated the virus for the umpteenth time, claiming that its draconian lockdowns, mass testing and vaccinations and travel restrictions have helped lower the number of new local cases to 0 as of Monday.

But as Bloomberg pointed out, “it was more difficult this time”, given the more virulent nature of the delta variant. Beijing’s “success” shows that the China model may be what it takes to get COVID under control, raising questions about whether other countries are willing to take such draconian steps. Australia is even starting to rethink its dedication to the “COVID Zero” ideology.

While Beijing is likely suppressing case numbers (and we strongly doubt that local transmission has been completely eliminated), Bloomberg decided to review all the actions taken by Beijing over the past month that allowed them to reach this point. And the first strategy on BBG’s list? Mass testing, which Beijing rolled out at “unprecedented” levels.

Quarantines also played a larger role. At one point, Beijing was sealed off from other places with even a single case. It also cut off trains and flights from hotspots around the country, even though the city ultimately recorded fewer than 10 cases during the latest flareup.

Curbs introduced in other regions include: barring entry for people from high-risk areas and asking them to cut short vacations. Most had to remain isolated at home, which was strictly enforced, before returning to work and school. More than 200 neighborhoods were labeled high- or medium-risk, disrupting millions of lives, and thousands of businesses.

Source: Bloomberg

The blazing spread of the delta variant across the country became the biggest test of China’s COVID control model. Ultimately, it penetrated nearly 50 cities across 17 provinces and reintroduced the virus to Wuhan, which has been COVID free for more than a year.

Source: Bloomberg

The latest outbreak is also unique in that investment banks scrambled to assess its potential impact on China’s domestic economy. Banks like Goldman Sachs (which slashed its China GDP outlook during the outbreak) shared data from foot traffic trackers and other sources of instant economic data. While the investment banks prophesied that consumption would take a major hit, Bloomberg showed the outbreak also weighed on industrial production.

Source: Bloomberg

Finally, still, China eliminated the virus in about a month, roughly the same time it took to quell previous outbreaks including one at the start of 2021. By comparison, cities in Australia have undergone repeated lockdowns, keeping more than half of the country’s 26MM people confined to their homes and eliciting a popular backlash – with far less success. In fact, case numbers across China have seemed to increase as the lockdowns became harsher and more widespread.

While China imposed more restrictive lockdowns and testing, there’s another important differentiating factor that Bloomberg is ignoring here: Beijing has much more control over the numbers and the press than the Australian government does.

Is the American press really suggesting that we should believe the COVID numbers coming out of China?