I’m taking a short break from hosting our daily market broadcasts this week. My colleague Kit Winder will be hosting it in the meantime, focusing on how the WuFlu will permanently change the energy market.
He’s never hosted a podcast before so go easy on him, but I’m confident he’ll do a sterling job – after all, before the virus hit he managed to get some of the biggest names in the renewable energy space into our studio for some one-on-one interviews on what the future of energy will look like.
In the meantime, I shall of course be writing these daily notes to you, and if you want more of my content, or an idea of what stories I’m following, you can follow me on Twitter: @FederalExcess.
All being well, I’ll be hosting those podcasts again in a week’s time. I’ll be using the extra time I have now to figure out what we should do with this daily podcast format next. If you have suggestions, do send them over to me: [email protected].
When we started these a few weeks back, we had a few folks requesting an improvement in the sound quality. We’ve since rectified some of the earlier problems, and also acquired some better microphones which should hopefully address this. There were also many requests for transcripts to be made available for each broadcast, however this sadly isn’t currently feasible as we’re trying to get these out every day and with you as soon as possible after recording.
That said, let’s take a rummage through the postbox…
Hi Boaz,
One thing that puzzles me and also effects the guesswork figures on the number of unemployed is we have no idea how many people are working from home and are on furlough.
Do you have any ideas on answering those questions from the UK aspect?
Sadly I do not, and I am dubious on the accuracy of official stats where this is concerned. Unemployment figures were already highly politicised metrics and subject to considerable pressure from various parties to nudge them one way or another before the WuFlu showed up. Considering the BoJo administration will be defined by this crisis, one can only imagine the level of spin that will be applied to the official figures – from both sides of the Commons.
Sales of consumer electronics may be a good indicator on the financial health of the average Brit. I would expect these to be strong in this scenario, but only if folks keep getting a paycheque – you’re unlikely to celebrate being unemployed with a new iPhone.
Thank you very much for these daily reports/broadcasts they are really interesting and thought provoking listening. Given these extraordinary times we live in it is amazing how governments are reacting and the potential implications for currencies and markets. This is also the 10th financial crisis of my life and my personal view is that we cannot just go on printing money without dire consequences and thus instigating either a currency realignment or some form of debt forgiveness. I cannot see just increasing taxes in the future as a solution to debt reduction. I may be asking too much but which one of these options would be the most effective and in addition the most likely? Does anyone have a real insight into this?
I’ve no crystal ball, but the “most effective” option to reduce debt is to simply default on it. The International Monetary Fund has interestingly begun a “debt forgiveness” programme for developing countries that owe it cash so they can devote more resources to surviving the pandemic.
I think we’ll see whatever the “next step” for indebted nations is revealed by this crisis. A country like Japan, where vast quantities of its government debt is owned by its financial institutions, is maybe where we will see the first “debt forgiveness” experiment for a developed country.
But then again, the stresses in the eurozone may be such that such a plan will be proposed there to try and prevent the bloc from disintegrating. Christine Lagarde recently denied that this was an option. And you know what they say about official denials…
North Korea-lite
A lot of you wrote in with your thoughts regarding China, especially after Tim Price over at The Price Report has been on the podcast.
Tim’s point about demanding Chinese reparations rang the most harmoniously with me. On the contrary, it would seem, not only are the Chinese selling to the West large quantities of the resources and equipment needed to cope with the pandemic, there was even a report of the French being gazumped by the Americans over an order they had placed.
If there is one thing that sticks in the metaphorical gullet, it is that the Chinese establishment is being allowed to profit over, perhaps, the most unholy mess ever created in history and before.
This next bit on China is very grim and distressing. Personally I think this is an important subject that should gain broad public awareness and foster a broad international backlash, but if you’re having a hard enough time these days in lockdown, I don’t want to make your day any worse, and I won’t blame you if you just stop reading today’s note here.
Just a brief note to say that your Covid-19 Crisis Alerts are absolutely brilliant. Please keep up the excellent work.
While writing, I thought it worth mentioning that Nick Hubble’s Exponential Investor email yesterday was eye-opening in the extreme. In his final paragraph, he referred to rumours coming from Breitbart with regard to Covid-19 patients in China being taken to crematoria before they died. Here in the UK, someone I know – and trust implicitly – works in a Care Home. When one of the elderly residents had a fall earlier this week resulting in a suspected broken hip, the Ambulance crew were heard to ask whether the patient had a funeral plan!!!
Further to your Covid-19 Crisis Alert with Tim Price yesterday, I fully concur that the world should no longer be trading with China. There are the Xinjiang “re-education camps” for the Uighurs – denied by the Chinese. There is deliberate misinformation about China’s GDP and gold holdings. China deliberately withheld notification of Covid-19 to the WHO for at least six weeks after it was known about. And then Chinese authorities take a mix of genetic material from seven patients, code it and then define it as Covid-19 without ever isolating the virus itself! Given all the other misinformation, why on earth would we believe their diagnosis?
This whole fiasco gets more absurd by the day. Nothing, but nothing, seems to add up!
The above notwithstanding, my sincere thanks again to you and all at Southbank Research for your truly excellent work.
There were rumours circulating on Chinese blogs over a month ago about people being burned alive in the mobile crematoriums the state had wheeled out to dispose of corpses and curb the spread of the virus. The job description for those working in these crematoria stated that potential applicants should not be afraid of ghosts or demons, and – allegedly – that any sound of screaming they heard on the job was merely “gas escaping”.
Both Taiwan News and Radio Free Asia have begun reporting on this story. While they cannot independently ascertain that this has taken place, they do cite various pieces of evidence including video interviews which suggest this has been going on.
I had hoped this was just a rumour, or perhaps even a propaganda operation by one of the alphabet agencies, and this still may be the case. However, it looks increasingly likely that has indeed been happening and considering the indescribable evil the Chinese Communist Party has and continues to commit against Uighurs and Falun Gong practitioners – murder for organs on an industrial scale that Mengele would have been proud of – it is tragically quite believable. The CCP’s capacity for evil knows no bounds.
It’s stories like this that make me incredibly grateful to have been born and raised in a civilised country. And it makes me ever more hawkish in my beliefs on how the CCP should be dealt with.
But as you allude to in your letter, we must be ever more vigilant that what goes on in China doesn’t come here. That the brutal totalitarian approach of the CCP is scorned as it should be, as should those apologists and appeasers for the regime.
One of the biggest investment and geopolitical themes of the 2010s was the rise of China’s power and influence – now we’re in the 2020s, we’re going to discover a new story. The zeitgeist gets closer to accepting the Cold War reality day by day, and the WuFlu has shone a spotlight on the incompetence and corruption within China’s political class.
I believe the Western perception of China in the future looks a lot like our perception of North Korea today though on a much larger scale, and of course plugged into much of the world’s manufacturing and supply chains. North Korea-lite if you will; a brutal totalitarian disruptor, unlimited by democratic restraints or morality which you wouldn’t think of investing in, and which you’d have a lot of problems retrieving your money if you did.
The news that China has recently begun conducting nuclear weapons tests only makes me more convinced of this view – the US-China clash will only escalate…
Boaz, just to say I really enjoyed your covid crisis interviews with other Southbank editors.
This should be a daily occurrence, even when things return to normal, if there will be such a thing?
Stand out performer for me, although everyone has given great insight, is Tim Price.
He absolutely nailed it on Wednesday with his forthright views on China and how the world needs to react.
Take a well deserved break and please continue this broadcast, it goes well with gardening or other DIY jobs…
By the way, mine’s a pint of Woodforde’s Wherry, Norfolk’s finest.
Thanks for the beer tip – I’ll see if I can get my hands on some of that. The lockdown is, if anything, a drinking opportunity, and one which I have seized with both hands. A chart of my alcohol consumption over the last few weeks would likely look similar to these WuFlu infection charts everyone keeps posting on social media. If you’re in the market for something a little stronger, I recommend Homeward Bound by Black Iris Brewing.
That’s all for today. I hope this note finds you in good health, and that you’re ready for another wild week…
Thank you for all your feedback, and do keep it coming.
Back tomorrow,
Boaz Shoshan
Editor, Capital & Conflict
Category: Market updates