Covid-19 Lockdown to be Extended and Tightened

Covid-19 sounds lke one of those really technical names scientists develop, having understood the gene type and infection mechanism, doesn’t it?

The sad truth is that it is just a shortening of Corona Virus Disease 2019. How disappointing!! That could have been made up by an arts graduate, not some eminent senior professor!

So far, the Government has handled this outbreak with a shrewd political approach, gradually tightening up things as the public acceptance grew. As the numbers of infections and deaths increased, the official response increased from ‘wash your hands’ to ‘social distancing’. Next, it was ‘closure of pubs and clubs’, until finally we reached ‘lockdown’. This step-by-step tightening meant that the public understood the ever-worsening situation required stronger reactions. However, it was entirely politically driven. The scientific need for a much earlier lockdown was clear for all to see.

History will not be kind to Boris and his team.

It was obvious from China and Italy that containment as soon as possible would reduce the death toll by thousands. Bold decision making was necessary. However, the Government’s dithering almost made Mrs May look decisive and authoritarian. I said ALMOST.

Many many thousands of British deaths could have been avoided and sadly were not. They will happen as a direct result of slow and incorrect decision making. It can only be a matter of time before the population starts to get angry. This will be Boris’s legacy – which is a shame for a likable chap so early into his premiership.

As an aside, we wish BoJo a speedy recovery, and hope he is self-isolating from Carrie, what with her, er, having a bun in the oven.

What now then?

It is clear that the three week lockdown was another of the Tories’ attempts at not scaring the British people. The reality is that from infection to symptoms to hospital to intensive care to death is a 3 or 4 week process. And so at the end of the three week lockdown, the numbers of infections will not be accelerating as quickly, but they will continue at a sickening pace, as the infections before the lockdown was imposed reach their grizzly conclusion. By the three week date of 13 April (Easter Monday), we are likely to be seeing 1000 deaths per day. This is not the background for a relaxation of the curbs. Quite the opposite. Despite the British public’s unwillingness to be bossed around too much, we see tighter controls and a much longer timeframe for the lockdown.

Total Deaths in Italy, from worldometers.info

The sad sad chart above lists the total number of deaths in Italy. Even after three weeks of a proper lockdown, the numbers continue to climb at close to 1000 people per day. This is where we will be in 2 weeks.

Yesterday, 181 people died from Covid-19 in UK. That is the equivalent of an Airbus A320 going down. And yet the numbers didn’t make it into the first 5 minutes of news bulletins. When we reach 1000 people dying per day, that will be like 2 Boeing 747’s crashing in the UK every 24 hours! It is hard to overstate how serious this all looks.

The number of infections per case needs to be reduced from 2.5 each to less than one new case for each live infection. Otherwise, the dreadful growth goes on.

The restrictions will be substantially extended, and will be considerably tightened.

This Recession Will Be Huge

Economists like to talk about recessions being V shaped, U shaped or L shaped – based on the graph line depicting the fall and speed of the possible recovery. This recession is going to be pear-shaped!

If you haven’t read the Imperial College Covid-19 Report, I suggest you do so right now. Okay, have you looked at it? The numbers are pretty startling….. 500,000 deaths in UK if we had done nothing, 260,000 deaths on last week’s strategy. So the Government had no choice but to initiate the latest controls, and thankfully Boris was sensible enough to see that.

Scary Imperial College Covid Image

Under the new approach, critical care numbers may be kept within the capacity of the NHS intensive care system. Deaths will be less than 100,000, and may be as low as 20,000.

However, the worrying part of the report was what happens when the controls are relaxed. Under the mitigation approach of last week, the infections shoot back up to the extent that the epidemic has just been delayed.

Under the latest scenario, we have, say, 3 months of lockdown, then normality is resumed for a month. At this point, infections will start to rise again. So after a further month, we go back into lockdown. This made for simplified modelling. What is more likely is that after 2 or 3 months of low infection rates, people become complacent, contacts rise and infections grow again… then there will be a reinforcement of measures. But remember, the models contain lots of assumptions, and could be rather inaccurate. This is not a condemnation of the scientists, just a reflection of an uncertain data they are using.

Ultimately, this is an open-ended procedure. At some point a vaccine will be developed. But it won’t be less than 18 months away. It could be 3 years of close to house-arrest for the whole population.

We have already seen demand for durable goods fall away and car companies suspending production. We will see bankruptcies of manufacturing and service companies, no matter how much Government support is given. The current £350 billion is way too little. And isn’t it a frightening echo of the Boris Brexit Bus with its £350 million? What is it about £350???

Boris’ Brexit Bus – and another £350 sum. What a spooky coincidence

Even public sector employees, isolated from the worst of the economic-epidemic will save rather than spend. The general public, as is usual in times of trouble, will save or pay down debt. The collapse in retail spending will be truly eye-watering. We may never return to our previous societal norms. Another article will comment on forever-changed political structures. Workers may end up in small, closed communities for their own protection.

Apologies for the lack of jokes and puns in this article. It just is not a funny topic.

Brace yourself folks. This is going to be a humdinger of a recession.

Coronavirus Party Required for Granny

We recommend that you should do your utmost to get your Granny infected now!

Old People Partying

The UK Government’s strategy for coronavirus is to resignedly accept that around 80% of people here will catch it. We know that approximately 1% of those infected will die from the disease. This is an awful, terrible number of people.

However, it has been decided that instead of trying to prevent people from becoming infected, the answer is to delay the spread of infection so that the peak is later and more spread out. In this way, the NHS will have more time to prepare for the rise in demand, and the maximum number of intensive care beds needed will be lower, albeit for a longer period.

Looking at the statistics, most people will be infected, and the bulk of those infections will happen over the summer, when the NHS is fully stretched – and then some – trying to cope with the numbers. The last thing you should be doing is to risk catching it at the same time as everyone else.

So the answer is to get the vulnerable infected now, whilst plenty of spaces are available in intensive care. Why wait until the ICU’s are full to bursting and you might be receiving treatment in a corridor? Get in early.

Coronavirus Parties

Did your Mum take you to a chicken-pox party when you were a child, inflicting an unpleasant, itchy disease on you “for your own good”? Well now is your chance for payback. Ship her out of that old-folks’ home and get her into pubs, clubs, football matches, even the Houses of Parliament. This way, she will be infected and treated before the rush!

You read it here first – now get out there and infect the old and vulnerable people in your life!

Coronavirus Moves to Stage 2 – Excuse for Missed Profits

The human cost of the coronavirus cannot be underestimated. Now that the authorities are taking steps to limit further spread, one has to hope that the disease will be restricted from any more major growth. We may well not have hit the peak yet, but hopefully it is in sight. Then there will be a long tail of infections stretching into the spring and summer of 2020.

What will be the long term impacts?

It seems clear that the secrecy and delay of the Chinese government has created a mood-change among the population. What was an acceptance and even pleasure at the Chinese way seems to have turned to resentment and anger. We’ll look at this another day.

But what of the financial impact?

6 month FTSE 100 chart from LSE

From the chart, it is clear that the Boris Bounce post-election has been brought to a halt. However, FTSE 100 remains higher than after the election, and the fall seems to have halted. The market seems to be looking through the inevitable short-term disruption to a resumption of normal service in just a few weeks time.

Coronavirus – a God-send to Failing Managers

Clearly the coronavirus is going to be a blessing to hard-pressed CFO’s wondering how to make excuses for poor financial performance. In the past, the go-to justifications to explain bad management were currency fluctuations or interest rate moves. Bizarrely, these flimsy reasons were accepted by the financial community. Nobody ever seemed to ask why the same CFOs hadn’t managed those risks in the same way that they managed the other risks of the business. Why didn’t they hedge the markets properly?

Then came Brexit, the perfect catch-all reason for management to cover up why they had failed.

And now here is coronavirus, a wonderful reason to show failure was an Act of God, and not incompetence. Has your pie-shop in Hartlepool seen falling sales – blame coronavirus. What if your newsagents in Warrington didn’t sell as many magazines as last year – it’s coronavirus. Do you run a major international oil-company that missed profit targets – coronavirus? Next it will be airlines and iron-ore supply companies saying that reduced demand from China drove then to a loss.

The minimal falls on FTSE 100 says that the market doesn’t believe there will be a long term effect of coronavirus. You shouldn’t believe all those excuses either!

Dino Days by Phill Brigstock – A Special Book

We interrupt normal programming to bring you a special treat…. a review of Dino Days by Phil Brigstock.

Dino Days – A Special AUTO-biography

This is a whole new genre of car book – an anecdote-filled AUTO-biography. It is centred on Phill’s twice ownership of a Ferrari Dino, but covers so much more of his family’s life-long involvement in classic cars. It avoids the usual technical-fact design-detail of many single model books, and the tedious detail of I-restored-it-this-way of classic car personal accounts.

Instead Mr Brigstock takes us on a very personal driving CV. He started with a humble Ford (so many of us can relate to that), but quickly moved up to a Triumph Spitfire (related again). However, Phill just kept going. We particularly loved the stories of Lotus Esprits and the Lamborghini Miura – owned by the Brigstock brothers when most of us were still standing in WHSmiths reading Thoroughbred and Classic Cars with a longing in our hearts. The atmospheric, slightly colour-faded 1970’s photos emphasise the nostalgia for a long-gone time.

What is particularly noticeable in the book is an absence of any reference to spannering or modifications. The family were not tinkerers, and certainly it is refreshing to read that any profits were purely accidental, and certainly not the usual Wheeler Dealers type of mythical look-how-much we made on this.

Wheeler Dealer Mike Brewer

Talking of Wheeler Dealers, Mike Brewer has penned the foreword to the book. All of the profits from each book are going to the Sporting Bears charity, which we strongly endorse. Sporting Bears members provide paid-for joy-rides for members of the public, with all proceeds going to benefit disabled children. Everybody wins from that. It enables regular people to experience everything from an Austin 7 to a brand new Aston Martin, boosting the image of classic car hobby. Having raised well over £2 million, this is a most commendable organisation.

You must go and buy this book! It is available on Amazon, and at good bookshops. It is a great read….. and it supports disabled children. Just how much incentive do you need? Buy it today!

 

Go to Amazon……

Scottish Architecture: V&A Dundee is Good, Scottish Parliament is Bad and Ugly

What a wonderful, uplifting building has been built by the V&A in Dundee!

V&A Dundee – uplifting on a grey day

It is modern, but references the past life of its location on the River Tay and in the lovely city of Dundee. What is most impressive is how it is so accessible – and I don’t just mean the ramp to the door and lift inside. Everyone can see it and understand what it represents: truly a case of bringing art to the masses in an inspiring and interesting way!

Dundee has a long history of shipbuilding, especially (whisper it) for the whaling industry. Hence it was Dundee that supplied super-strong ships for Antarctic explorers. This building is the cornerstone (!) of reinvigorating the riverside area. It is a welcoming sight as one leaves the train station. Oh, and if visiting Dundee from the south, do try to arrive by train. The journeys across the Forth bridge and Tay bridge are worth the rail fare in themselves.

Magnificent Forth Bridge

Impressive Tay Bridge

The building was designed by Kengo Kuma. For us, even more impressive is the structural engineering of the building. With few internal walls to tie it together, the design of a bowl-shaped building must have been rather interesting! So kudos to Ove Arup for their work there.

 

Contrast to Scottish Parliament

Scottish Parliament – Bad and Ugly

Regular readers will know of our disdain for the Scottish Parliament building – and yet it is feted among the architectural and planning community. We can see that it is innovative, and that the layout of the buildings references traditional Scottish democracy. Yet here is the BUT… and it is a big but (the worst sort eh).

BUT

  1. A weird concrete monstrosity is wildly out of place on the Royal Mile.

  2. The references it makes can only be understood from the air.

  3. It is elitist. It works for people “in the know”, who claim aesthetic training and superior artistic feel. Everyone else just feels excluded.

To us, the Scottish Parliament emphasises the gap between architects, planners, and all of the people for whom they are meant to be working. It has brought the professions into disrepute.

What a contrast to the V&A Dundee. This building is in context, striking but easy to understand. It is uplifting for everyone who sees it. What an inspiration!

Pic from Ove Arup

Iran = World War 3 – NOT! Or At Least, NOT YET!

We all know that the Middle East is a Tinderbox – though I wonder just how many people today would recognise such a thing if it hit them on the forehead?

Tinderbox, from oldandinteresting.com

So once you come round, now you can identify with what you have just been bludgeoned!

How will last night’s reprisals work out? Well it is fair to say that Tehran had to be seen to be doing something, to show the domestic audience and local acolytes that the leaders aren’t cowed by the US gorilla (yep, I mean you-know-who). But their target selection was fairly low level, and the results not even a pin-prick.

Will Trump reply, or just laugh at them? A big man would stand and smile benignly at the small child who is having a paddy. But this is Trump we are talking about. Oh dear!!

Our feel is that he will wait to see if the Iranians try again. If they do something of real economic consequence, then one can expect a hard strike at Tehran. I hope the ayatollahs have a good bunker.

There is some risk to global oil supplies, and successful attacks on Saudi refineries or shipping would provoke a very sharp response from the US. It would be a short erasing of any Iranian production capacity. However, we do not feel that it would lead to a sustained rise in oil prices. Pipelines can be repaired, and US Shalegas drilling is is very elastic to price rises.

Meanwhile, the markets are calm, down by less than 0.5%. We think that is right. The worst thing for Trump right now would be to appear weak to his electorate, or to blink. Our feel is that Tehran is drinking in the last chance saloon, and just ordered another round…….. There is clearly a point at which Trump will be keen to demonstrate to the world that the US economy and US lives are sacrosanct. If the bullets (or missiles) start to fly, then the markets will fall by less than 20% – because everyone, us included, will see very limited global economic consequences, and any falls representing a buying opportunity.

Why did we say “NOT YET”? Where is the real risk here then? If the Russians or the Chinese see an angle for stepping in to control the Middle East, then suddenly it becomes a geo-political play, and then we really are worried!

Have a nice day now!

Boris’ Historic Election – Thank You EU

Congratulations to Boris! Now perhaps we can go back to having too much food, too much drink and too much indulgence over the Christmas break, without having politics upsetting us all?

Johnson this morning – photo from BBC

This huge victory will set the direction of politics for the next 10 years. Yes, we predict another term for BoJo starting in 2024. I am indebted to my older contact who has already pointed out that by December 2024, Labour will have only had one election-winning leader in 50 years. FIFTY YEARS!!! Step forward Tony Blair. You achieved the success that eluded Jim Callaghan, Michael Foot, Neil Kinnock, Gordon Brown, Ed Milliband and now Jeremy Corbyn. Oh, and John Smith too…… Did I miss any?

Jim Callaghan – never won

Michael Foot – never won

John Smith – never won (though to be fair he never tried)

Neil Kinnock – never won

Gordon Brown – never won

Ed Milliband – never won

Mr Corbyn – he didn’t win either (twice)

Tony Blair – the only one to win in 50 years – and yet they hate him!

And to what can we allocate this massive swing in the vote for the Tory Party? Why, the EU!! What a change for the European project to be assisting the blues! It was the disdainful response of Frau Merkel to David Cameron’s pleas for moderating change that set the ball rolling towards a leave vote. This was compounded by the EU inaction during the referendum campaign. Where were Messrs Junckers and Tusk during the lead up to the vote? They were not in UK sharing the vision and love were they? Their next mistake was to play hardball too much with Mrs May, forcing her on to the defensive at home. One has to surmise that they thought a Remainer-Parliament was their best hope of keeping the UK on board. But they overplayed their hand, sending Theresa back with too much of a surrender bill. This off-hand treatment was compounded by the humiliation and shunning that Mrs May received from the other EU leaders at Salzburg. So the scene was set for Parliament to respond to the lack of co-operation… which led to Boris becoming leader…. which led to the election. One has to hope that they will work with Boris as an equal!

Boris to Win 43 Seat Majority Says Meta-Poll

You’ve heard of meta-analyses, where academics who can’t be bothered to do their own research just nick everyone else’s hard work, crunch the numbers a bit, and come out with a super-accurate result? Well here is our META-POLL. After much reading of the papers, surfing the net, and even talking to people, we have concluded that the Tory party will win. (Bet you saw that coming eh?)

Why do we think that?

  1. Farage folded, as predicted here recently, avoided splitting the leave vote, and crowned the Tories as winners

  2. The Labour manifesto was written to appeal to hard-line left wingers – who would have voted for Jeremy anyway. Only the naïve or those too young to remember the 1970s could think that nationalisation is the answer. (See our earlier report on rail user numbers pre- and post – nationalisation). The “free” broadband idea went down well, but the practicalities are horrible. By the time it is built, at five times the original cost, technology will have made it obsolete. And the big beneficiaries will be the farmers and isolated rural communities – who will not be voting Labour under any circumstances. Meanwhile, their fence-sitting on Brexit feels a bit like “Follow Me….. I don’t know where we are going, but Follow Me!”

  3. The Liberal Democrats have shown themselves to be neither liberal nor democratic. Their reverse Article 50 campaign can only appeal to the most die-hard europhiles. Meanwhile, Jo Swinson has not done well. Her claims to be PM in waiting invite the retort that she’ll be waiting a very long time.

  4. The Tories have avoided a May-style manifesto-suicide-note. Divisive figures such as Rees-Mogg have been kept out of the limelight. Boris himself has picked his battles carefully, with more to lose than win.

So what happens now?

There are still considerable risks for Mr Johnson. Will the left-leaning students be too busy recovering from their end-of-term parties to vote?

Students preparing to oversleep and miss voting

Just how many people were too embarrassed to tell pollsters that they would vote Tory (but will anyway)? Will tactical voting have any impact? Will Mr Trump try to intervene? He is not great at keeping his thoughts to himself is he? That could hurt Boris. In this last week, we expect the Tories to try to refocus on Brexit as the major issue – and Labour to try to talk about virtually anything else!

What does it all mean for Asset Prices?

The market had a lost year in 2019, with too much uncertainty. A Tory win is about 70% baked into the market, so we expect a moderate bounce on 13 December. This will be most pronounced for the likes of BT and other nationalisation victims. Despite longer term trading arrangements still being in the air, we feel that 2020 will turn into a log bull run for equities and commercial property, as investors get back to the serious business of making money.

Farage Must Fold

Gosh, there are so many pics out there of Mr Farage with a pint!

Much as we admire Nigel Farage’s consistency in supporting his cause, his present political positioning is just madness.

Clearly, he could never have thought that Boris would tear up his deal just because it is not No Deal – which seems to be Farage’s target, So what does Nigel want? Most Brexiteers can live with Boris’ deal – and many remainers can live with the withdrawal, as it least it isn’t a crash, and it moves the topic on. The Brexit Party have no chance of power, and in many close marginals, they risk drawing just enough voters away from the Tories to gift the seat to Labour or the Liberals.

Just as in Peterborough and Brecon by-elections, they could well split the leave vote, and let one of the other parties to win, with many fewer than half of the votes cast. Does Nigel really want to be the man who let Jeremy Corbyn into Number 10? We think not. So the only conclusion is that he thinks there may be a peerage in it for him if he backs down. There can be no other logical motivation for Mr Farage to take such an extreme position.

Our Forecast

The Brexit Party will withdraw from all seats except those where the Tories have no chance anyway – ie Northern Labour-held seats. Nigel will magnanimously agree to back Boris’s deal as being better than any of the plausible alternatives. In due time, Mr Farage will enter the House of Lords.

Lord Farage of England! You heard it here first.