Coronavirus Update No 9
I hope that this update finds you well? But, oh what a miserable year 2020 has turned out to be!
Coronavirus – still with us
Brexit – not yet resolved
US Presidential Election – (as I write), undecided
In relation to all three of the above we hear so much noise, the seeds of doubt, truth and untruth!
Well here we go again! Not quite the lockdown from March but you can’t go to the pub, restaurant or local clothing retailer and you certainly can’t meet with friends. Even the experts can’t agree to agree or even agree to disagree. I’m certain most of us will have watched presentations from the Government’s advisers telling us that by mid October we would be seeing 50,000 cases of the virus every day followed by a further presentation suggesting as many as 4,000 deaths a day. Truly scary stuff! But then other experts take apart the data and suggest alternative strategies for the Government to follow. Who would want to be Boris right now… Not me that’s for sure. Can you imagine, refusing to lockdown and these numbers becoming half way near to being accurate.
But what does it mean for the economy…more doom and gloom I’m afraid. And the effects will linger long into the future. If there is an element of good news it’s that the market appears to have priced this in right now and if (a big if!) we get a vaccine or the testing experiment in Liverpool works we could see a surge in equity values in the new year.
Deja vu? you’d better believe it! Are we stalling until the outcome of the US election is known? Will Boris walk away from the deal this week? Are we playing “a dangerous game of brinkmanship?” Answers on a postcard please!
But, if there is any good news in this it’s that the markets have the bad news priced in. I’ve highlighted before that there are several sources suggesting now would be a good time to walk away on World Trade Organisation (WTO) rules….note, not NO DEAL but WTO rules. Someone once said to me in the middle of a particularly fraught negotiation, “in these circumstances if we are both unhappy with the deal…it’s probably the right one for both of us.” I think that statement is as true today as it was all of those years ago. I think all parties should report to their mothers immediately for a good ticking off before shaking hands and getting the deal done. Why is it that us ordinary folk in the street can see what these supposedly highly intelligent people can’t.
Wow, if they’re the best you’ve got America let’s have Andy Pandy for PM. But what might each of the combatants bring to the party?
Trump has had some really bad press; America has embarked on no new wars, their economy (until coronavirus) was going gangbusters, the Chinese weren’t getting away with their old tricks of deliberately devaluing their currency and stealing intellectual property (well not as much as before anyway). So I think a little bit more of the same if he manages to sneak in again (which is looking less likely – but not impossible as I write).
Biden; he’ll reverse some of Trump’s corporate tax cuts, borrow tons of money but then hopefully spend it on infrastructure projects which will, in turn, stimulate the economy. But watch out for a couple of new wars.
And yes we might see some legal action taken (by both sides!) and it wouldn’t be the first time that the Presidency was decided by the Supreme Court. It (the Presidency) is a huge prize after all. But a quick resolution would be good for everyone including us in the UK.
So, ever hopeful as we move towards the end of the year. Let’s hope the current lockdown works and we see the virus retreat. Here’s hoping that we manage to negotiate a deal with our European Friends, but if not “the sun will still come up tomorrow – or the day after that”. And let’s wish our American Cousins well, their economy will likely look after itself (good for all of us) but that is one divided country right now. Probably much worse than the UK over the Brexit issue.
And finally; I left you with a quote last time “the darkest hour comes just before the dawn”. But they’d forgotten to tell me that the clocks had gone back an hour. So once again…
“The darkest hour comes just before the dawn”
(Attributed to Thomas Fuller 1650)
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