Saturday, May 30, 2020

Pyjama time

In a worrying development, social media platforms are starting to push ads for pyjamas at me.

In the big outside world I don’t see so much of these days, we appear to be approaching the break down in social order phase of this crisis.

Yesterday's protests in the capital appear to have been a bit more genteel than those which broke out in various cities in the US. Indeed, one might hesitate to even use the adjunct 'mass' in this case as at least one of the participants was photographed with her bodyguard. 

I read somewhere a while ago that a pandemic like this is political until it is personal; a statement that carried the suggestion that as time goes on, more and more will feel the personal aspects of the situation. 

In fact in some ways the opposite would seem to be more obviously the case.

Our collective responses back in March involved a practical alignment of the political and personal, such that much of the suppression was in a sense voluntary. Yet some are now asking if this would have been the case if the virus had first started spreading in say Norway rather than China and fairly polarised opinions have started to form around examples where mitigation was prioritised over suppression (e.g. Japan and South that we have all done Sweden to death). 

Anyway, many submitted to lockdown with a real enthusiasm that they are now struggling to drop. The process of relinquishing our personal fortresses has inevitably involved a break-down in the consensus that saw us hauling up our draw-bridges so brusquely. 

In countries like the US where polarisation is endemic and almost no aspect of national life can present itself without first being run through infantilising partisan filters, the spectacle has been depressing for weeks already. 

The UK meanwhile has distracted itself from the collective problems with the matter of what one man did when everyone was supposed to be staying put. 

The Prime Minister's special advisor Dominic Cummings decided that stay at home meant a choice of which home to stay in and although he and his wife were covid-symptomatic, they drove half way across the country with their autistic child so that they could isolate on his parents' estate. 

Boris achieved an unlikely Tory majority by means of a populist encroachment into traditional working class constituencies and the man many see as the intellectual author of this strategy is Cummings. This in the end is the bigger irony in play than the fact that he may have had a key role in drafting the lockdown regulations loads of Brits now feel he personally violated. 

A new poll suggests that 74% of Tory voters are convinced that he broke the rules and nearly half think he should be sacked. Needless to say opinions are particularly heated amongst the 'new' Tory voters that Boris was only recently so pleased to have acquired and was promising vehemently not to let down. 

A lot of these people, the sort pollsters tend to fit into the C1 and C2 categories,   hold to the supposedly traditional British value of fairness. It's one of the reasons that Cummings and co have been able to stoke up their resentments over the EU and immigration. These people don't look at rule books like lawyers, rather they tend to make fairly broad judgments about the 'spirit' of the regulation. 

Accordingly, Cummings has now in effect fallen into his own trap and at least partially stuffed up the populist coalition that he helped build around brand Boris. 

My wife, who is not a UK citizen and only indirectly concerned with the goings on in Blighty, watched Cummings press statement from the back garden of No10 with me. She was astonished by the lack of humility and the ultimate lack of anything remotely resembling an apology. 

He's not bleeding Antigone. This is not some high matter of personal conscience, so 'I understand why you might disagree with me, but I disagree with you' doesn't really cut it. 

As I learned many times with my parents, it is not entirely dishonourable to say sorry when you don't particularly feel you've done anything wrong. Other people's feelings are relevant. (Indeed, the BBC gave a fine example of pandering to hurt feelings a couple of days later when they replaced Emily Maitlis on Newsnight.) 

The media immediately and quite joyously picked up on the fact that Cummings justified a half hour drive to Barnard Castle on his wife's birthday as a stratagem for testing his eyesight, which he felt the disease might have adversely affected. 

One reason that a sense of the spirit of the rules has seemed important throughout all this is that most of us will have had reason to scratch our heads at the regulatory details, which have almost universally involved a mishmash of the specific and the vague, the draconian and the downright lax. 

Here in Guatemala in particular we've been under a state of calamity that has superimposed suppression with containment, combining some measures which almost anyone would deem likely to succeed with others that appear far more of a punt. 

Monday, May 25, 2020


I used to think that mosquitoes were only active from roughly nightfall to just before dawn, but here in Guatemala I’ve learned that they are pretty ravenous all day long and that it’s only the novel coronavirus that sticks to those hours. 

Dr G was back in his familiar Sunday prime time slot with a mixture of grim-faced news offset by more smiley-countenanced developments. Amongst the latter was a weather forecast that suggests we are now just as likely to die from dengue. 

The day before Mr Charisma himself from the Ministerio de Salud had announced a pronounced surge with a record number of new cases, but explained that over 200 of these could be attributed to one super-spreader at a Guatemala City sweat shop. 

So imagine our surprise when Sunday’s numbers were even worse. 

Giammattei must have twigged that ‘cases are only going up because we’re doing more tests’ made him sound like the imbecile up north, so he’s trying us out with ‘tests are only going up because of the rise in cases’, which is equally oxy-moronic. 

Truth is that we’re now beyond statistical illumination and the only number that will matter from now on is the number of hospital beds relative to the people that need them. 

Friday, May 22, 2020

The Big Seroprevalence Reveal

Seroprevalence reports from around Europe (Sweden even...) suggest that so far no country has yet seen more than 10% of its population infected with SARS-Cov-2.

Herd immunity was always a dodgy concept. In the UK it would have meant 40m people with the virus and hence approximately 400,000 deaths.

Commentators now talk about the Imperial College model as something that has been ‘discredited’, but that is basically what it was saying and at just the time Boris was jabbering on about herd immunity. 

You don’t actually need a complex algorithm to do the arithmetic.

The only way around this was to do what the Swedish ‘experts’ were doing which was to assume, for no particularly credible reason, that many more people had already become invisibly infected and that the rate of mortality was therefore a much less worrisome obstacle to the goal of herdy-gurdy immunity. 

Sometimes we are actually going to have to believe the Chinese (and the WHO) when they supply the rest of the world with data, because in this case it has been spot on.

Tuesday, May 19, 2020

Bomber Command

Readers of the previous post will spot the hopefully minor flaw in the analogy I am about to deploy —  the moment the bomb lands on your house and the moment of your death tend to be fairly proximate.

Think of Covid-19 disease cases as bombs being dropped from the sky by enemy planes. 

Trump's job, like almost every other leader of the nations of the world being systematically bombed this spring was to get his citizens into shelters and clear the skies of hostile aircraft. 

Sadly for the USA, their Commander-in-Chief is an incompetent, sociopathic imbecile. 

Compared to the leaders of other nations who did the necessary with a degree of success, he has failed, abjectly. He barely had any shelters ready on time and now he wants to clear them out before the all clear sounds and with the bombs still falling.

In order to save the economy — i.e. his second term — ordinary Americans will have to be encouraged to think of themselves as cannon (💣) fodder or 'warriors', he calculates. To find a way to keep calm and carry on as death continues to rain from the sky. 

Maybe the bombers will thin out by themselves as the enemy pursues alternative priorities. This, in part, is what eventually saved London in 1940, beyond the Spitfires. 

Or maybe America will invent a super weapon before the country has been bombed to shit.

Could happen. Quite possibly won't. 

(A word to those who insist that Covid-19 hasn’t actually killed that many people. Imagine trying that logic out during the Blitz. Sure, German bombing didn’t wipe out the population, but the notion that more would have died if they hadn’t been sent by sirens to underground shelters should not be moot.) 

Interplanetary news

We're all in the gutter, said Wilde, but some of us are looking at the stars. And of these, I wonder, how many realise how long it took their light to reach us. 

When it comes to the Covid-19 data the distances are more interplanetary than interstellar, so to speak. But over the next few months we are all going to need to mentally apply the correct timescales to the information that is reaching us in a semblance of 'real' time. 

For example, on Saturday the state of Texas reported a significant spike in reported infections. Some of these individuals — or folk as they are referred to there — will have been infected as a result of generally dropping their guard, going back to work (or being forced to, like a load of meat packers in the panhandle) and so on, but it’s still a bit early to make firm judgements, especially as the surge appeared to correct itself in the following day's numbers.

A proportion of these infected individuals will die, but their deaths will usually not be recorded and published for 2-3 weeks. So this spike in positives and its fellow traveller in mortality are thus never part of the same news cycle.

The 786 people reported as Covid-19 fatalities across the US today would have picked up their infections roughly a fortnight ago, when America was mostly still in lockdown and that’s if they died within the past 24 hours and are not part of a catch-up — so the downward trends we are currently seeing cannot really be mentioned in the same breath as the policy of re-openings being pursued by states like Texas.

So when Dr G tells us that our collective good behaviour since Thursday has resulted in a lower level of new cases today, he’s basically talking bollocks. 

And the impact of the unbridled deschongue all over the country today will be felt in the data served up to us next week. 

Monday, May 18, 2020


Nosocomial. It's the new favourite word of a certain sort of limp-brained intellectual on the right on the UK who used to want to leave the EU and now wants to leave lockdown and social distance at their own discretion. 

Never heard of it? Don't rush to Google just yet, because I will tell you what they think it means, or at least what they want you to think it means. 

By insisting that Covid-19 is 'nosocomial' they'd like you to understand that it is a disease that is native to and to some extent limited to environments like hospitals and care homes; that you are far more likely to get it by visiting the NHS than say Lords Cricket Ground. 

Matt Ridley puts it thus: "If Covid-19 is at least partly a ‘nosocomial’ (hospital-acquired) disease, then the pandemic might burn itself out quicker than expected."

Whoopydoo, eh? 

And indeed, yesterday it was revealed that 20% of infections in the UK appear to have occurred in hospitals and care homes. It was this stat, rather than its all too obvious flipside — 80% didn't — that these eedjits immediately jumped on. 

This sounds very much like a #firstworldproblem anyway. Here in Latin America food markets, sweat shops and so on have been the main hubs, and if people all over the world had been going out to concerts, football matches, schools even, it is almost certain that the hospital-acquired proportion would have been depressed. 

The virus really isn't particular about this. 

Notsonosocomial then. 

Caso Lever S02EO1: Origin Story

Back in the noughties the property now co-owned by the Levers belonged to a US citizen. This man was then close to our niece and as a result my wife was a guest in that house on several occasions. 

Its owner consistently expressed to her a strong desire to acquire the next door property, which would ultimately become our main home in Guatemala.

Back in the days when the village was a set of fields filled with cane, the two plots had been part of the original 'home farm'. But subsequent to divisions via inheritance, they were registered with separate escrituras.

Our friend the US citizen did eventually acquire the larger of the two, and partially unified them, physically if not legally.  He did this using a loan firm in the capital and at some point in 2012, for his own reasons, decided to surrender the newly-acquired plot rather than continue paying the interest.

Around the same time he reportedly persuaded Australian miner come antro-preneur Jason Lever to pay off (in installments) the mortgage he had on the main house. 

What follows is largely speculation, but seems like a reasonable deduction, given what was to follow. 

When Lever moved in there was no dividing wall between the two plots. He made use of the full space. He may well have had an expectation that he would be able to acquire both pairs of deeds down the line for a relatively small additional outlay.

We were informed that the owner of the loan firm in Antigua had started toying with the idea of having a country retreat. This may have put a bit of a key scratch down the side of Lever's long-term plan. 

The prestamista reportedly showed the property to his wife who informed him that not only did she need him to build a wall, she needed a 2m corridor down the side of the house so that her servants could enter the garden without passing through her living space. 

Lever obliged by agreeing to sell him the extra portion allowing for the construction of a perimeter wall which would not belong to him. 

This was pretty much the situation when we showed up, following a tip off from the above-mentioned US citizen.

The prestamista and his wife had meanwhile reportedly become disillusioned with the provinces and the larger of the two properties with the wall had been put on the market.

Following our purchase in 2013, Lever had a conversation with my wife  in which he pleaded temporary poverty as an excuse for not raising his own perimeter wall.  

Our concern was that the escrituras that he would take control of in 2015 after the loan was paid of, contained a number of errors with regard to the physical dimensions of the property, and that Lever or any subsequent proprietor might later be inclined to take advantage of this. And we were led to conclude that there was something more akin to obstruction already going on here.

Our mistake early on was perhaps to assume that Lever's reluctance to build the wall, open a water account, lay down his own drains, register for IUSI and so on reflected either laziness or opportunism and nothing more systematic. 

The trigger for a greater appreciation of the threat was the realisation that we had accidentally paid the Claro bill of one of his business accounts that had been registered to our address.

When we moved in, Lever's home was signposted #5 and this identification was reflected in the underlying paperwork shared with us by the prestamista and his staff.

Yet shortly after Lever concluded his nuptials, this numeral was painted over and the couple started advertising the address as #3, exactly the same as ours.

And so it was that pretty much every single delivery that they requested came and knocked on our door first. Why would anyone knowingly put themselves at such an inconvenience? 

Back in the days when Guatemala had a working postal service this was significantly inconveniencing me as well. 

Even now, for professional reasons, I receive confidential deliveries via courier and for the past five years I have had to pick these up in an office in town as I cannot trust anyone to negotiate the on-going confusion over signposting.

And we still see the Levers' own couriers standing outside scratching their heads on a regular basis. 

When I ran into him outside one morning and asked why he had made the change, he proposed a plan which from the tone of his voice sounded pre-approved. 'You can be A and I can be B'. 

I wrote a polite yet firm letter to Lever back in October 2016 asking him to explain the imposture and rejecting his proposed solution: I might need to make use of those kind of subdivisions of my own property in the future and he needed to use the number specified by his deeds (though I later learned that these do not mention the specific address in the village as ours do, nor do they specify the location of the property beyond referring to the registration.)

Later on he came up to me once more in the street outside and announced, again almost as a fait accompli, that he had registered for IUSI using another variant of #3 (-1) and that that was therefore how it was going to stay.

This is really not much of a solution at all and many of the inconveniences remain, particularly with regard to the delivery of confidential information.

It was in this same conversation he made the strange boast that he had a 'free water' deal with the Muni, a comment which was ultimately to lead to a rapid deterioration in the essentially amicable relationship we had thus far retained in spite of the series of (what seemed) minor encroachments.

Even so, it is clear to us that some of his accounts (EEGSA and Campero for example) remained registered to #3 and his name consistently turns up attacked to 3-G in official paperwork.

Again, why would anyone voluntarily place themselves in such a pickle? 

All of the above needs to be borne in mind when, in later posts, I will address the 'plot' against us. The latter unfortunately, is not precisely wild speculation. We have it on audio file, so to speak, from the horse's mouth.



The mother of all deschongues has been set loose this morning.

This is not just pent-up demand but pent-up supply as well, feeding off each other in a potentially devastating autocatalytic reaction. 

Brotan como poporopos’ was one description I came across this morning of new cases in a provincial town. 

Unless the government finds a way to manage the municipal markets soon — other than shutting them down only for them to burst open again like this — we’ll be hearing the sound of popping for some time.

Dr G’s Sunday Sermon

So, as long as you have a 🍅 you can go wherever you want?

In fairness Giammattei seems to understand that he may well have been presented with an historic opportunity to build some sort of political consensus around improving public healthcare in Guatemala. Let’s hope he doesn’t forget this down the line. 

He’s undoubtedly flirting overtly with Trump logic when he suggests that we only have more cases this weekend because we’re doing more tests. 

Thank fork he brought back next Tuesday from the dead. I was dreading the grocery shopping tomorrow.

Overall, sermón suave

Saturday, May 16, 2020

All over...

More than a hint here of the assumption that doing it all over again is purely hypothetical. 

An article from Bloomberg today began ‘What will it take to get this going again?’ with the probably unintentional ambiguity between our present economic and public health uncertainties.

Even in Spain serological studies indicate that only 5-10% of the population has been infected there. 

Do we really suppose that the virus has simply shrugged its shoulders and given up on the rest of them? 

A change of disposition...

If I were Dr G I would probably have shut down everything except local shops for this three day period. That includes restaurants with pickup and delivery. 

His message to ordinary Guatemalans seems to be that if you cannot find pan frances, buy sliced bread instead. 

I’d tend to agree, but the compromises need to be fair and even. It’s not right that local families are being asked to make do with bags of sugar and salt, whilst wealthier individuals and foreign residents can still have luxury pizza varieties or mango tacos delivered to their doors. Make them go to the local shop for eggs and bread like everyone else. (The two-tier lockdown hasn’t exactly been a roaring success up to now, has it?)  

And it’s just three days FFS. One of the circumstances that is making it harder still for the president to act decisively now is that the formal sector has spent the past month or so systematically encroaching on the informal, such that many of the vendors of luxury pizza are also trying to sell comida típica.

My basic plea here is not some sort of right-on call for radical redistribution during an opportune moment of crisis, but a sense, which I believe used to be a very British sense, that when the state asks its citizens to make a sacrifice, that everyone, regardless of circumstances, should be on board for this. 

Giammattei has repeatedly lost his cool over incidents he characterises as ‘massive social irresponsibility’ and when he does so, almost always appears to be taking aim at the lower income brackets. 

These incidents are real and do seem to emanate out of what one might call the popular culture of Guatemala. Yet one cannot castigate with the sort of moral authority that the President is after, unless the elites are also behaving themselves.

If I were running out of tinned cat food and decided to switch to dried grains for all the mishes except Clavi — who could continue to gorge himself on Felix — I’d soon be made fully aware of the levels of ambient resentment thus engendered.

Life will find a way...

Why is flu not seasonal in the tropics? 

In part because the virus behaves like everyone else living in the tropics. Life will find a way. No cars allowed? No problem. 

This is one of the major challenges we face here: creative solutions to the social and economic restrictions which end up increasing the public health risks.

That 50s drive-thru idea put about by Joe's Grill (unceremoniously killed off out of the blue by Giammattei's new dispositions) is the kind of thing that perhaps ought not to have been permitted in the first place.

Restaurants have been restricted to pick-up and delivery only for a reason: to limit the points of contact as far as feasible. 

Joe's has a big parking space right in front. Rather than sitting at tables diners would have gathered outside in their cars. 

The rules would thus have been neatly circumvented. But what about the toilets? What about the expanded level of contact for the servers? What about the mini super-market in the same plaza and the possibility of cross-contamination? 

The Key Arithmetic

Based on interviews given yesterday, Dr Giammattei seems to be suggesting a spare capacity of around 20 ICU beds in the capital right now. 

The average number of new cases over the past few days is taking us to a new level of around 1000 a week. Of these approximately 100 will develop a more serious form of illness, around half with the so-called long-tailed set of symptoms and another 50 or so requiring hospitalisation, though depending on the stage at which they were diagnosed, it could take a week or so for them to reach that critical moment. 

Some of those already in ICU will die or recover, but 50 into 20 doesn’t fit, so it’s not hard to see how we reached this new, rather desperate stage of containment.

These numbers are very rough and will be skewed by the fact that the country is still only really testing the symptomatic. (This appears to be about to change, with a plan to hisopar more people employed in the rump of the retail sector.)

During one radio interview the President spoke almost non-stop, without hesitation, for almost an hour, never appearing anything other than resolute and as well-informed as the experts other so-called leaders have surrounded themselves with. 

As a sort of medical-political hybrid, he seems far more willing to talk about the epidemic in unambiguous, even if occasionally ‘anecdotal’, terms. 

The trouble with the briefing format favoured in the UK and the US is that it immediately establishes a sort of tennis match between two competing forms of uncertainty (or indeed equivocation) — the political and the scientific.

Anyway, if the eventual new normal here in Guatemala involves fewer deschongues, I’m on board with that. 

Friday, May 15, 2020

Bucketloads of lost marbles...

Today of all days, all anyone had to do was stay put. Could it be more simple?

But no, our local authorities have lost their marbles. In fact they are wandering around knocking on doors with buckets of spherical thingies that they claim will cure all known pandemics. Here's our twit of an alcalde auxiliar with his bucket. 

These pellets could be disinfectant, hydroxychloroquine, murder hornet eggs, holy water in gel form, who knows? The important thing is that they are of no use whatsoever. And that the team deploying them all live down by the old people's home and bear cloth masks as PPE. 

When I first spotted him and his mates this morning I figured this was a slightly ill-advised door to door fund-raising expedition. But then it became clear that they actually want to come INSIDE. They announce their intentions with the caveat that their payload is harmless to children and pets. 

In effect this is little more than an excuse for shuteando

Only a drooling moron would let them in. My neighbour did.

Back to the 50s

They had a plan...but it turned out to be the 18-50s that we were about to revisit. 

Dr Giammattei first prescribed a generic Guatemalan version of the popular and widely available therapy called Lockdown. This did seem to alleviate our symptoms a bit and even promised a shorter recovery time. 

But then things took a turn for the worse and now the drip is feeding us the far more experimental Lockdown Plus. 

The essential problem with the treatment regime was explained to me a while ago by V’s nephew Oscar, the microbiologist: Only those who could afford Lockdown were to take it; everyone else would be allowed to go without, but would be shamed. This accounts for the failure to cure the whole body, he said. 

It strikes me also that some of the people who were supposedly taking the pill weren’t really sticking to the appropriate dosage and schedule. 

Patients in my local ward have been driving around during curfew hours, throwing parties or gathering their staff and other contractors for non-essential activities, some of these individuals having crossed departmental lines illegally in order to arrive here. 

A few hundred metres up the road there is an old people’s home. We’ve heard sirens in the night as ambulances head that way. These sort of institutions are vulnerable not just because of the age profile of their residents, but also because of the demographics of their employees. 

This is one of the explanations being offered for the severity of the outbreak in Montreal, Canada, where a cluster of rather poorly-funded asilos de ancianos are served by a staff of largely immigrant workers, themselves living in cramped, badly sanitised conditions. 

The connections between those taking the medicine and those who are not are of crucial importance. 

Thursday, May 14, 2020

Barely legal...

Except this time it happened precisely the other way around: ‘rich guys’ and government colluded to pump up the market after the March panic, knowing full well that this rally had nowhere to go, and this week the ‘rich guys’ have bailed and the government finds it can now be honest about the economic situation given that it no longer needs consensus around staying at home.

Blind Tasting

The Bodegona has now carefully removed all the bottles of bleach they had previously strapped to the Trapiche, but the point is that this actually happened and someone* recorded it for posterity, and now it will be one of those iconic images that Antigueños will have to remember these extraordinary times.

— What were you doing during the pandemic dad? 
— Blind tasting the difference between a cheap malbec and Magia Blanca.

* Dylan Thomas

Saturday, May 09, 2020

What's up with the markets?

I’ve outlined separately why I think the economic recovery will be more protracted and painful than many in government and finance seem prepared to accept. The stock markets need not however match the same fundamental curves. 

The US indices in particular crave a narrative to follow. This is usually a bullish one. There’s nearly always a bearish alternative, but it’s a minority view under most circumstances. 

The novel coronavirus pandemic generates all sorts of narratives, many of which are incompatible. The end result is a swirl of uncertainty. Markets do not function well with overbrimming unknowns, any more than they do when panic is a majority position. 

The men in suits driving the market appear to have decided not to chase after every psychological twist and turn; indeed they have in effect chosen to discount 2020 completely in a somewhat childlike, not happening, not happening, kind of way. Instead they are looking further ahead than usual to next year’s potential for growth. 

The advantage is that no matter what happens, the eventual recovery after lockdown will bring accelerated bump in output of a genuinely unusual kind, which will be no doubt be spun as truly exciting, especially as the financial markets will have effectively blanked out the memory of this year’s contractions. 

Investors may also be anticipating a period of profitability as companies return to full revenues before they have finished re-hiring back some of the workers they earlier shed. 

A spring back in GDP will possibly also be accompanied by a process of ‘creative destruction’, in effect a clearing out of the rubbish and an accompanying boost for the stronger, innovative parts of the economy and for the egos of speculators*.

This all makes sense, but...

1) Most obviously perhaps, if they are ‘pricing in’ a robust rebound starting towards the end of this year, the wiggle-room between now and next January will tend to be in a downward direction. 

2) Over the past week it has become clear that the national peak in the US and the New York peak were not in fact the same thing. 

Trump believed himself to be on the back nine before he actually was, and the realisation of his true predicament is not bringing out the better aspects of his character. 

It should be obvious by now that POTUS is no leader, of the nation or indeed of the world, but instead a follower of the more ignorant and deranged elements of his ‘base’. The potential this has for augmenting the damage already being done by Covid-19 should not be underestimated. 

3) The market is never as rational as the men in suits would have you believe. The V-shaped recovery story was first pushed by politicians and central bankers as a necessary tool for building consensus around social distancing and then far stricter policy measures. 

The ideological component to the model has been retained as it flows down into the big investors and corporate America. There is now almost no aspect of American life that isn't contaminated by cultural-political biases. 

Nevertheless, this particular piece of political mythology has some bipartisan value. Several Democratic state governors now find themselves on the epidemiological altiplano with a core group of voters who are extremely vulnerable to both the disease and the poverty which may result from containing it. 

They are going to find it vexatiously hard to release their populations from lockdown on public health grounds alone, so ready-made, upbeat economic soothsaying kits will come in handy for the left-of-centre as well.  

4) I find it genuinely hard to believe that either main party will make it through the lead-up to the November election up north without further damaging relations with China. 

And should there come a moment where Trump has a nasty presentiment of impending defeat, expect him to start acting like Hitler in his Berlin bunker. 

Knowledgeable, well-meaning officials on both sides may want the trade deal to happen, but it’s their bosses who will ultimately decide its fate, and one of them may be in the grip of a self-destructive urge. 

5) There is a well-observed phenomenon that generals start each new war by fighting the last one. This involves a more or less serious misapprehension of the new threat. 

Recap: The last war was fought after banks took on more and more risk as it was being camouflaged as something less hazardous and fed into the wider financial system. It was an attritional conflict that was 'won' by bailing out the big guys in a manner that often left the little guys high and dry. 

The big guys appear to be going into the warzone now with a comfy confidence that they can expect the same treatment this time round, and that the key enemy menace of 2008 (crunchy credit) has been averted because the state institutions have deployed their existing box of tricks — and have frankly really rather gone to town with them, perhaps a little precipitately. 

Germany has committed a full 30% of GDP to financially cushioning its economy, with the UK at 19% and the US at far. 

All this borrowing does not seem to have been accompanied by a promise to win the peace once more with the pain of austerity. 

My comprehension of economics is stuck at A-level, but I do understand that there's risk of unpleasant blow-back from all this, such as inflation and perhaps even negative interest rates. And I do believe that governments are yet to fully understand the global implications of what has happened. 

6) Lastly, there is one key element underlying the surge back from the March lows which should be a cause for concern and has little to do with prognosticating the strength of the general recovery — whole chunks of the market have been experiencing a mini tech bubble, not unlike the early noughties. The NASDAQ is now actually up for 2020 and the S&P is significantly bolstered by tech giants like Amazon, who have seen their stocks rise steeply. 

Sure, some of these firms will benefit from the new normal, but you cannot really have it both ways — a quick return to the old normal and an exciting, tech-driven, new normal. 

And within this bubble there’s an even more speculative and slightly loopy biotech rush taking shape, with any companies even vaguely involved in the hunt for a vaccine or relevant therapies seeing their valuations soar. Most of these will face a day of reckoning down the line, and it won't be pretty. 

* I'd be lying if I didn't admit to the desire for a bit of creative destruction here in La Antigua. 

Friday, May 08, 2020

‘Drinking just Champagne’

In the late 70s there was a man of indeterminate foreign-ness apparently living in the basement of my father’s office in Neal’s Yard called Jan, or perhaps it was Yan. 

He was the ‘sound guy’ and shared his limited space with a massive mixing machine with all sorts of knobs and slide controls. He introduced me to the siren synth sounds of the likes of Vangelis and Jean Michel Jarre before it was strictly cool to be into them. 

Around the same time my cousin Sara was doing the promotional legwork for Tubeway Army and then Gary Numan and British pop was about to embark on its epic electronic adventure of the early 80s. (Visage, New Order, The Human League, Depeche Mode, OMD and so on.) 

So, when The Model was released in English in ‘82 (the same year as Vangelis’s  Chariots of Fire), I perhaps didn’t have quite the sense of how pioneering Kraftwerk — ‘power plant’ — had been to the new sounds and techniques, but I was thrilled nonetheless, in part because it refers to an era when my mother was on the catwalk, but also because it flirted outrageously with all the clichés we had about West German pop culture...and ruthlessly satirised. (That includes the audience in this clip.) 

The boys from the Conservatory in Düsseldorf described themselves as Klangchemiker (zound kemistz!), yet outside Germany eventually acquired the moniker of the ‘Electronic Beatles’. 

The tributes to founder member Florian Schneider, who died this week aged 73, have reminded me just how much of an indispensable building block of the culture this signature hit of theirs became. 

Not everyone was enamoured of their chilly, somewhat archly-detached aesthetic. NME described them as the sort of people who’d blow up the world just to hear what sound it would make. I suspect my old friend Yan might also have belonged to that same club. 

Thursday, May 07, 2020

Demi Tasse

We will not wake up after the lockdown in a new world. It will be the same, just a bit worse — Michel Houellebecq

If you repeat this piece of wisdom from a prominent Gallic wet blanket in a broad French accent, out loud, it might actually improve. Worked for me. 

My father was a lifelong optimist. Sometimes this worked for him, sometimes it didn't. Maybe as a response to this upbringing and perhaps because I have been hanging out a bit too long with Bulgarians, I have my glass is half empty moods.

Yet when the bird flu and swine flu pandemics were puffed up in 2006 and 2010 respectively, I was quick to de-bunk the associated waves of panic. So, allow me now my stint in Cassandra's temple. 

Optimists are a suspicious-looking bunch right now. The mere fact that a quick and robust, V-shaped recovery is such a vital component of the consensus needed for prolonged lockdowns should force us to interrogate this prediction a bit more. 

Indeed Société Générale economist Albert Edwards observed today that resurgent stock valuations, driven in part by the prognostications of governments and central banks, are supported by nothing more than an 'ideological dream'. 

Here are two examples of the divinations that I have come across in the past couple of days. 

The first one, charting the likely course of the US economy from here was emailed to me by my bank. Not only do we get a complete recovery but some bonus growth to boot. 

The second, which does the same for the UK economy, is from the Bank of England, and comes with the caveat that it's an 'illustrative scenario' rather than an actual forecast. It appears to take full advantage of the fact that nobody seems to be mentioning the Brexit deadline at year's end any longer. 

Such is the plotting of the curve you could be mistaken for thinking the drop in output was almost a non-event. 

Here are some of the reasons I think this is the dog’s bollocks...minus the canine qualifier. 

The wealthier nations, even US states, have been fighting the pandemic individually. Even the closely-aligned blocs like the EU have ceased to function as collectives, at least as far as public health is concerned. 

This and the fact that their citizens have been stuck indoors for over a month has given everyone an exaggerated sense of the role of proximity in the spread of the virus and thus how social distancing has temporarily brought economic activity to a halt. 

Yet mobility is just as important to a virus as proximity. Before Guatemalans were told to #quedateencasa they saw whole chunks of their economy evaporate as nearly all the foreigners disappeared. (Antigua also lost the economically-important mobility of the capitalinos from the big city, some 45km away). 

And whilst Sweden has famously side-stepped a full lockdown, its economy has only shrunk 1% less this year than the rest of the Eurozone. 

Zurab Pololikashvili, Secretary-General of the World Tourism Organization (WTO — bound to confuse POTUS) announced a new, more pessimistic forecast for tourism revenues in 2020, which anticipates a steep decline of 60-80%. 

The mobility of people and their money around the globe has been an important component of the global economy and right now there are reasons beyond mere psychology to suspect that it will take a considerable amount of time for the flow to re-commence. 

Developed nations see that the path to living with SARS-Cov-2 involves constant testing and contact tracking/tracing. If this works at all, it is going to work on a national level. Governments won't want to encourage their citizens to head to the airports any time soon. 

Would-be travellers will inevitably be making difficult, rational decisions as their opportunities for mobility return. Do they want to go to countries with limited testing and over-stretched healthcare systems, while facing the risk that closing borders (or airlines) could leave them stranded? Countries where their coronavirus tracking app might stop sending alerts? And do these countries really want them back yet either?  

Just over half of the 16m jobs shed by the US service sector in April belonged to hotels and restaurants. A restoration of domestic mobility, combined with a partial reduction in social distancing, is not going to bring about a sudden 'snap back'. 

Globally, many of the affected companies will fail, meaning that the out-of-work will be competing for a reduced pool of new jobs rather than simply walking back into their old ones. 

Outside the US, financial assistance for the service sector is either limited, or tied to loans. So for example, when Italy allows seating in restaurants next month, owners will have to maintain numbers below a certain percentage of full capacity whilst using any profit they do manage to make repaying the government. In the UK it seems covers could be halved by dictat. 

Should a vaccine turn up in the next 18 months a new patchwork of haves and have-nots will immediately be imposed on the international situation, already complicated by the fact that some countries have compressed R and community transmission, whilst others appear almost ready to give up the fight. This will undoubtedly affect essential trade as well as well as non-essential tourism. 

A more cautious world, will be a slower world. 

(PS: Flesh-eating, reptilian aliens will be invading later in the year. This is an illustrative scenario, not a forecast.) 

Wednesday, May 06, 2020

Deadly disease league to restart...

Given that we are some way beyond the dreaded Vietnam milestone, it can be observed that should 100,000 Americans die of covid-19 in 2020 it will end up as the seventh-leading cause of death in the US, still behind Alzheimer’s, though sneaking in just ahead of diabetes.

Now there’s a stat that’s just sitting there waiting to be abused by someone with a naked political agenda.