You tushy is causing a global economic crisis

I’m concerned about the global economy. I’m more concerned that you aren’t concerned. In this edition, I’m going to shame you for destroying the global economy. Read on to be shamed

I’m concerned about the global economy. I’m more concerned that you aren’t concerned. In this edition, I’m going to shame you for destroying the global economy. Read on to be shamed


We had talked about what will talk about in this edition in an earlier edition. I had hoped that you would change your ways, but you clearly haven’t.

While you sit there in your loose baggy sweat pants, shoving your mouth full of junk food and watching Kumkum Bhagya, there’s a crisis. Every day, you wake up and go to the restroom to take care of your bowels without a care in the world. Every single flush, every time you wipe your tushy with that 3 ply ultra-soft embossed ultra-premium toilet paper, you’re causing a global crisis. Do you realize that? If not, what’s wrong with you?

COVID caused a simultaneous demand and supply shock. When the entire global economy shut down because of the stupid virus, demand collapsed, and a lot of manufacturing had to be taken offline. But as the world slowly reopened, there was a tremendous resurgence in demand. But the supply couldn’t keep up because of the thousands of issues the goddamn stupid virus directly or indirectly caused, not to mention the old issues that it exacerbated.

Your ignorant and innocent wiping of your tushy is causing a global shipping crisis that is giving sleepless nights and endless headaches to everyone from manufacturers, logistics service providers, shipping rews, dock workers, truck drivers to CMOs of companies whose job up until was only to say “synergy” and “circle back” 27 times in a day over Zoom calls. You tushy is to blame. Before you even think of denying responsibility for making that poor CMO answer questions about supply chain issues, I’ll explain how you’re responsible. Clearly, you don’t know.

When you wipe your tush with that 3 ply ultra-soft embossed ultra-premium toilet paper and get a heavenly feeling, here’s what happens.

You take care of business, and your bowels and stomach feel as good as a Karan Johar movie climax. All smiles and tears of joy. You tear off half a meter of that 3 ply ultra-soft embossed ultra-premium toilet paper and gently massage your tush. You’re feeling good, but here’s the hell that poor 3 ply ultra-soft embossed ultra-premium toilet paper had to go through before it had the misfortune of coming in contact with your tush.

Step 1: Ordering the 3 ply ultra-soft embossed ultra-premium toilet paper

You want what’s best for your tush, so you decide to order the best 3 ply ultra-soft embossed ultra-premium toilet paper. Now the manufacturer has to produce the 3 ply ultra-soft embossed ultra-premium toilet paper for your tush to feel good. Wood pulp is the main ingredient required to manufacture toilet paper. China and Canada are among the largest pulp manufacturers, and China is usually quite cheap. So the tushy paper manufacturer places an order with The Bruce Lee Tushy Pulp Company.

But he’s in for a rude shock. The manufacturer tells him that he has to pay 40-50% more compared to pre-COVID.

You ask him why. The pulp supplier explains that there has been an increase in input costs for everything from energy, labour, and lumber because of the stupid virus. He also explains that China has stopped importing waste paper to recycle because it wants to reduce pollution. Waste paper is also an input to manufacture toilet paper. There’s also a supply crunch in waste paper supply given that schools, colleges, offices are shut down in the US and Europe, which are the largest exporters of waste paper.

The tushy paper manufactures begrudgingly agrees and places the order. He then locks his office, holds his face in his palms and cries.

Step 2: Boats, boats, boats

It usually takes about 3 weeks for the pulp to be delivered. The tushy paper manufacturer is waiting anxiously for the tushy pulp delivery. But he gets a surprise call while he’s in the middle of a bowel relieving session. An executive from The Bruce Lee Tushy Pulp Company tells him that there’s a global shipping crisis and that the shipping costs have gone up nearly 5-10 times. Shipping container fees that were about $2000 was now as high as $15,000 and $20,000+ in some cases.

The spike in prices was because of a stunning rebound in global demand. With everyone stuck at home and working from home, people who had never tried online shopping suddenly discovered it. They started furiously ordering things like furniture, electronics, consumer durables, home improvement items and so on.

Before people started ordering useless shit, the first wave of the demand was from health equipment like PPE kits, gloves masks and so on for frontline healthcare workers.

The tushy paper manufacturer who was relieving his bowels when he got the call almost faints on the bidet. But he has no control and no choice given that many customers are waiting for his 3 ply ultra-soft embossed ultra-premium toilet paper to wipe their tushies. He says, ok. He then holds his face in his palms and cries right on the bidet. Poor guy!

Another dramatic chart for context:

The tushy paper manufacturer, in a desperate attempt to keep costs low, tries to find out if he can ship the pulp via air, but he almost faints again. Airfreight costs have also gone through the roop. He holds his face in his palms and cries. It’s unclear this time if he was on the bidet. My reporters are waiting for a confirmation.

Air isn’t an option.

But after 1 week, the tushy paper manufacturer gets a call from The Brue Lee Tushy Pulp Company that the shipment will be delayed. The tushy paper manufacturer asks why? The Brue Lee Tushy Pulp Company representative explains that ships are full because of the global shipping crisis, and there’s a shortage of containers and shipping crews. He also explains how some of the major Chinese ports are severely disrupted and even partially shut down. You ask him for more details, so the Bruce Lee company person starts explaining.

He explains that pre-COVID, global trade was chugging along despite all the issues. Since China was the largest exporter, ships would load goods in containers from China and deliver them to the US and Europe, and on the way back, they would pick up containers with US and European goods into China. This meant that the containers were continuously in flow. But once the stupid virus hit the world and economies shut down, things changed. Ships already en route dumped to the US and Europe dumped the containers at their destination ports and sailed back empty. A large amount of shipping supply had to be taken offline because of the negative demand and supply shocks.

But once the world reopened, there was now a container imbalance at places like China. They were ready to export but didn’t have the containers. Add to this; the stupid virus was still on a rampage, and ports across the world were congested and were operating with less manpower because dock workers were down with COVID or quarantined. This meant that they couldn’t quickly process the containers lying around and ship them back. To make the nightmare worse, China also had to partially close the Yantian port, one of the busiest ports in the world, for a month in June. This led to a shipping imbalance.

This month, it had to shut down a terminal at Ningbo-Zhoushan, the world’s third-largest port.

To make things worse, containers were also stuck on ships waiting to be unloaded at inland cargo ports and freight train yards. There’s a serious shortage of truck drivers responsible for delivering the unloaded containers from the ports to the customers’ warehouses.

To make things even worser, it was far more profitable for shipping companies to ship stuff to the US, which is the world’s largest consumer, than ship stuff from the US to China. So, only about 4 out of 10 containers coming into the US were going back into circulation. The shipping companies started prioritizing profitable routes, which was exacerbating container shortages. He also explains that even though new shipping container production is at record highs, it’s unlikely to help the situation quickly.

To make things worsest, there was also a shortage of seafarers or shipping crew. In March, nearly 400,000 seafarers were stuck on ships due to COVID restrictions. This was because more than 50% of seafarers were from developing countries like India, where vaccinations were off to a rocky start.

To make it worsest squared, The Bruce Lee Company representative explains that in the last decade, there’s been a consolidation in the shipping industry. Today, just 3 shipping alliances control 80% of the market. He also explains how ships sizes have doubled in the pursuit of lower costs and economies of scale in the last decade while port infrastructure hasn’t kept pace. This is one of the reasons why that Ever Given ship got stuck in the Suez Canal. He gave an analogy of a 40-year-old man trying to fit into a size 26 jeans.

To put this into perspective, in 2005 the container fleet in total was under 2,000 vessels, the largest vessel capacity was 11,078 TEU with a Deadweight (dwt) value of 115,700 tonnes. By close of 2020 it had rocketed to 5,234 vessels, with some boasting a capacity of 23,964 TEU and 232,606 dwt. This has driven overall Compound Annual Growth Rate (CAGR) by 42%, from 44K TEU in 2005 to 8.82 million TEU in 2020. Various factors have driven the growth notably economies of scale vs transportation costs, a dominant Asia Europe trade lane fuelling enough cargo, and fierce competition amongst owners. All have played into the burgeoning desire for more of what have become known as “mega” container ships.

Since The Bruce Lee Company representative knows Kung Fu, the tushy paper manufacturer decided to wait patiently for his tushy paper pulp.

Step 3: No boats, no boats, no boats

So finally, after 10 weeks, the boat carrying the pulp for the tushy paper manufacturer arrived in the US. But there’s more bad luck. All the major ports around the world are facing severe congestion.

The tushy paper manufacturer’s boat is stuck at the Los Angeles port, and there are 40 ships already waiting to unload. Usually, there are just one or two ships, according to the port authorities. Waiting times for ships to unload had hit record highs.

It takes another week for the pulp to be unloaded because the ports had a labour shortage because of COVID and contract tracing. Ports were operating with reduced manpower but were having to deal with a historic spike in inbound cargo. Finally, the ports unload the containers, but now, there was a chassis shortage, those trailers things on which containers are placed so that that truck can carry it to the tushy paper manufacturer’s warehouse. This shortage was because of the delay in them being returned from the buyer’s warehouse to the port, a spike in old repaired chassis, a demand shock, and a dying business model.

Not just that, there was also a historic shortage of truck drivers. This driver shortage was because of COVID, a spike in drivers’ retirement, low pay, stress, mental health issues, regulations, among other reasons. Similarly, even the inland railways that carry the cargo from the ports to the inland destinations were clogged because of demand spikes, terminal closures, and a shortage of rail car boxes.

So finally, having paid extra for drivers and chassis, the tushy paper manufacturer gets the pulp at his warehouse. He manufactures the 3 ply ultra-soft embossed ultra-premium toilet paper .

Now, since you clearly aren’t smart enough to care about the global economy over your tush feeling good, you go to Amazon and order 50 rolls of 3 ply ultra-soft embossed ultra-premium toilet paper. It takes two clicks to place the order, but now the poor tush paper manufacturer has to go through the same logistical hell to ship the 3 ply ultra-soft embossed ultra-premium toilet paper to you.

Do you feel good? Are you proud of yourself? Every time you try to give your tush the best, it’s causing a global shipping crisis and worsening the global logistical crisis. If your tush is reading this, I hope it was worth it, and I hope you, the tush, can live with this. You tush has blood on its cheeks.


A few good reads

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Was Ben Graham a Quant?

Benchmarking Has Become Circular

Everybody makes money in SPACs except the investors

Are Value Stocks Cheap for a Fundamental Reason?

Bottom Fishing In China Not Safe

International Tests of Factor Anomalies: Most Don’t Survive

Private markets the performance measurement shenanigans

Voodo economics

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Inequality, Interest Rates, Aging, and the Role of Central Banks

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Matters of the mind

The Attention Span. “Puppies and Con Artists.”

Other things

Notes From the Metaverse

The Red Warning Light on Richard Branson’s Space Flight


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