Socialism

Death from consuming fish tank products is apparently Trump’s fault

Chloroquine

Trump Derangement Syndrome knows no bounds. One man has died and his wife put in ICU after ingesting fish tank products that include the ingredient Chloroquine Phosphate thinking it would save them from coronavirus.

Trump said that chloroquine has shown “very, very encouraging early results,” in treating COVID-19. He went on to say that chloroquine taken in combination with the antibiotic azithromycin could be “one of the biggest game-changers in the history of medicine.”

Chloroquine has been used since the 1930s to treat malaria. Hydroxychloroquine sulphate, often sold as Plaquenil, was developed from chloroquine because it has lower side effects. Plaquenil is also an antirheumatic medicine and is used to treat symptoms of rheumatoid arthritis and discoid or systemic lupus erythematosus.

Never mind that the instructions clearly state “fish only” and “aquarium use only“. Frankly, if anyone consumes something that clearly states not to do so has only themselves to blame.

Dettol clearly displays its products kill human coronavirus yet we haven’t seen a rush of deaths related to improper use of the product. If PM Scott Morrison said that Dettol has ingredients that can help kill coronavirus, would you drink it before checking the label?

Image result for dettol coronavirus

You have to wonder at what point Trump won’t be responsible for something in the eyes of the mainstream media.

We are aware that identity politics is poisonous. We never imagined that people would identify as fish.

 

 

WHO’s official 2017 pandemic playbook says it all

WHOTWO

The World Health Organisation (WHO) has bungled its response during the coronavirus crisis. Politics always seems to trump principle. This cartoon is particularly blunt.

In mid-January, WHO happily parroted Chinese propaganda which said, “preliminary investigations conducted by the Chinese authorities have found no clear evidence of human-to-human transmission of the novel coronavirus (2019-nCoV) identified in Wuhan, China.” This, instead of independent verification by WHO.

WHO Director-General Tedros Adhanom Ghebreyesus praised China’s “transparency” despite whistleblower doctors being silenced by the propaganda machine. Several have sadly ended up dying.

Ghebreyesus even took potshots at governments looking to close borders to quarantine themselves on the basis of “unnecessarily interfering with international travel and trade” and “increasing fear and stigma.”

The interesting thing is that Director-General was reading straight from WHO’s very own 2017 playbook, ‘Pandemic Influenza Risk Management [PIRM]- A WHO guide to inform and harmonize national and international pandemic preparedness and response‘.

On travel, the report noted,

The International Health Regulations (IHR) (2005) seeks to limit the public health measures taken in response to disease spread to those “that are commensurate with and restricted to public health risks, and which avoid unnecessary interference with international traffic and trade.” This aligned with China’s rhetoric.

On member state cooperation,

Under the Framework, Member States are responsible for (1) ensuring the timely sharing of influenza viruses with human pandemic potential with Global Influenza Surveillance and Response System (GISRS); (2) contributing to the pandemic influenza benefit-sharing system, including by working with relevant public and private institutions, organizations and entities so they make appropriate contributions to this system; and (3) continuing to support GISRS.” p.16

China covered up the extent of the problem by destroying lab samples taken in December causing the unexplained viral infections in Hubei province. Imagine what might have happened if China had been open and honest at the offset? How lucky to have a WHO that pushed China’s narrative that the spread of COVID-19 was slow?

Indeed it is the chief of WHO that calls the Public Health Emergency of International Concern (PHEIC) and for declaring a pandemic. The PIRM report stated,

The responsibility of determining a PHEIC lies with the WHO Director-General under Article 12 of the IHR (2005). The determination of a PHEIC leads to the communication of temporary recommendations…During the period of spread of human influenza caused by a new subtype, based on risk assessment and appropriate to the situation, the WHO Director-General may make a declaration of a pandemic.”  p.14

Why did it take till March 10 for the Director-General to declare a pandemic? 64 days after the start. 118,000 people had caught COVID-19 by then. Now the number stands at 351,000.

At least there is a get out of jail free clause in WHO’s 2017 PIRM report,

Ethics do not provide a prescribed set of policies; rather, ethical considerations will be shaped by the local context and cultural values.” p.18

We guess it must be ok in WHO’s mind that China’s ethics are shaped by the culture of the Communist Party.

As to the question of the effectiveness of social distancing? WHO concluded with this vague paragraph,

Nevertheless, measures that have been associated with containment such as social distancing, hand/respiratory hygiene and judicious use of antiviral drugs may be effective in mitigating the impact of outbreaks of a new influenza subtype in individual countries. These measures are most likely to be successful and are better supported by data demonstrating effectiveness when implemented in specific local (smaller scale) circumstances, e.g. households and closed or semi-closed institutions. Although there is no evidence of any wider population-level containment effect, these measures may reduce the spread and overall impact of the pandemic and could be considered as part of a country’s national preparedness plan, depending on available resources.” p.62

Has there been an overreaction on social distancing which is likely to produce catastrophic economic side effects? If hygiene and antiviral drugs are effective, does social distancing have any impact at all? If not, aren’t governments submitting companies and employees to unnecessary hardship?

Assuming one self-isolates for 14 days, if one catches COVID-19 the first day out of quarantine was there any point to the first 14?

In Japan, peak hour trains to work remain as crowded as normal yet the country isn’t registering a severe outbreak of the disease. Close quarter drinking parties below the cherry blossoms are in full swing, yet no real signs of mass contagion. Japanese are meticulous with hygiene. Is it a factor? Japan has 1,046 cases and 44 deaths so far.

South Korea’s success would seemingly be driven by the sheer number of tests conducted on its population (270,000) which has made controlling out who needs to be isolated easier, as opposed to social distancing and hoping for the best. South Korea has tested 5,200 people per million population vs America at 74, according to the Centre for Disease Control. We don’t profess to hold any expertise in virus containment, but the data seems to bear out highly inconsistent results.

Yet it doesn’t escape the immutable fact that UN bodies, in general, have terrible track records. Why do so many countries want to entrust sovereign laws to UN groups that can’t keep their own houses in order?

In the last audited set of accounts (Dec 2018), WHO operates on a $2.9bn budget of which $931.22 million is paid in salaries across 5,541 staff or an average of $168,000 each. Although in the FY2018 financial year, expenditures totalled $2.5 billion, leaving a $442 million surplus after financial revenue. 

WHO spent $191.7 million on travel, $178 million on operating expenses and $177 million on medical supplies and materials. Medical supplies and materials are mainly purchased and distributed by WHO including vaccines, medicines, medical supplies, hospital running costs, fuel, as well as related shipping costs.

Contracted services look an interesting line item at $781 million. Medical research activities and security expenses are also included in contractual services. 

Despite Ebola in 2014, MERS in 2012, H1N1 Swine Flu in 2009 and SARS in 2002 it is hard to ignore the fact that with over 5,500 well-paid staff members WHO can’t construct a better policy prescription in limiting the spread other than provide sketchy anecdotal data on what methods seemed effective in containing the spread? Perhaps China can loan some propaganda ministry staff to better shape the responses. That’s right, they already have.

Let’s not forget that Tedros Adhanom Ghebreyesus proposed former Zimbabwe dictator Robert Mugabe as a WHO ambassador in 2017. It is not hard to see where the lack of judgment comes from.

Macron invites moral hazard

President Macron of France wants to suspend all utility and rent payments for 30 days. So what if Coronavirus lasts 6-9 months? Will landlords get special treatment from the banks to suspend loan payments on those properties forced into providing free rent?What about banks who have to pay for staff with reduced income because loan payments are frozen? Who pays? The very people the government is trying to help.

How long can a country subsidize employers and employees? What will happen when those French citizens who end up 6mths in arrears on rent? Should we expect that they have prudently set aside those payments to hand over as a lump sum to their generous landlords? Will the tenants claim that they had to spend it on other things and ask for the government to pay on their behalf? Of course they will.

These are the first steps to guaranteeing moral hazard. This misguided altruism will backfire big time. The vicious circle will mean the people he tried to help will end up in a worse place after it. Higher taxes, fewer jobs and more handouts with money that has been borrowed or printed.

What next? Bail out restaurants, bars and cafes that are affected by shutdowns?

We are staring at a Great Depression. No one likes to talk about it but we can’t just expect economies to shutdown for 2 months or more and then go back to business as usual once the whole pandemic has been defeated like nothing ever happened.

Take the example of a cafe. Most coffee shops buy in muffins and pastries. So if the coffee shop must cease trading for a while, it will tell its bakery to halt deliveries. Same for the coffee bean makers. And the coffee cup suppliers. They’ll tell their raw materials providers to stop until further notice. And so on and so on. The cafe will temporarily lay off staff. As will the baker, bean supplier and others.

Some staff or owners may have mortgages. Many won’t be able to meet monthly payments. They could default. Their homes could be repossessed by the banks which will then be faced with marking to market the value of the property on their loan books which could technically wipe out all their thin equity. Then the banks will be forced to ask for a bail out. Housing prices implode. Australia, are you listening?

Then home owners struggling to make payments cut back on non essentials. Out go gym memberships and cable TV subscriptions. Buying a latte becomes a luxury.

We are all going to have to realize we will have little choice but to click the big fat RESET button if the economy is to recover properly and soundly. It will be painful and bring out the worst in people but experience is a hard teacher. We’ll get the test first and the lesson afterwards.

And for Australia, which has experienced 28 years of non stop growth, the shock will be exacerbated because of so much complacency.

In a nutshell we all need to relearn the word “personal responsibility“. Governments are only doing everything in their power to remove us having to be accountable for anything.

Political expediency will trump Coronavirus market rout. Await market manipulation

MARKETS YTD

Share markets have been decimated in recent weeks across the globe. This year to date (YTD) chart above shows the extent. It shouldn’t really have taken Coronavirus or plunging oil prices to lead to this. We’ve been living high on the sauce for two decades and even though GFC in 2008 was a rude hangover, our authorities thought doubling down on all those free money excesses would work again.

Let’s not get too carried away. On a 5-yr basis, shares haven’t exactly blitzed with the exception of the S&P500. The ASX has put on just under 7% in 5 years. Germany, Japan and Italy have gone down. So if one is 45% higher than 5-yrs ago with an S&P fund, is that a mass hysteria moment?

INDEX 5YR

Automotive stocks have been dud investments over the last 5 years. It didn’t take Coronavirus to expose the underlying trends. BMW is don 52% on 5 yrs ago. Ford down 60%. Volkswagen -40%.

Car stocks

Industrial bellwethers like Caterpillar and GE have also not escaped stagnation. YTD, all of these stocks have bloody noses. Boeing has held up surprisingly well despite the MAX problems.

Industrials

Yet if we look at the FAANGs (Facebook, Apple, Amazon, Netflix & Google), we can see that over 5 years, investors have made a bundle.

FAANGAs these 5 stocks make up 15% of the S&P500 Index by weight, if they fall the impact is greater. With the exception of Netflix, these monsters are down 15~20%.

FAANG 1M

Worried?

Fear not, our heavily indebted incompetent political class and complicit central bankers will concoct a new potion of even lower rates, more QE and further fiscal spending on wind farms, solar panels and roads to nowhere to keep the ship afloat. It may be a hapless task in the long run but just watch the printing presses move to full speed. The ride is about to get interesting.

We’ve been bearish for years based on the underlying tenet that financial market manipulation by authorities has merely distorted the most efficient clearing mechanism -free markets. The invisible hand will eventually win. Just not quite yet.

Italian Senator and former Deputy PM Matteo Salvini has called for a ban on short selling. Why? All he’ll do is exacerbate the sell-off by diverting capital from Milan to London. The politicians just don’t get it. That is why Milan FTSE All-Share index fell by 10.75% overnight. That market is down 23% YTD.

When the pandemic hit the economy, we should have known from last month that it would spread and impact global travel, trade and oil prices. Why did it take so long?

We wrote last week that the explosion in market chasing (especially levered) ETFs would exacerbate distortions on the downside. The main reason being is that options markets that hedge levered products see heavy delta bleed (pricing blowing out) during routs. The reason is in bull markets human nature is more comfortable taking risk. In bear markets, people panic hence needing larger insurance premiums to protect against the madness of crowds.

Essentially what that means is that when ETFs were a far smaller chunk of the market, today’s 7.8% drubbing may only have been -4% in equivalent terms. That is because the ETFs chase, not lead markets because their product design is to replicate the immediate past. Yet our first instincts are to compare these apples with oranges and equate them to 2008. Wrong. Furthermore, a larger part of the market is dominated by a smaller

So the question is, do we liquidate all of our shares into the falling knife or take the view that some wonderful opportunities will present themselves to get exposure to what we hopefully viewed as sensible long term investments.

We take the latter view. We need to separate Coronavirus (the disease) and the hysteria (eg hand sanitizer and toilet paper panic buying).

While the disease is problematic and will hit the economy hard in the coming quarters, the question is market hope pinned to government response will come back. The measures should continue to grow and grow until they have cauterized the wound. After all, we live in a market where financial TV programs are summoning the opinions of NY Mets baseball pitchers for their ideas on stocks.

Of course, it will be all academic, but confidence is the only thing that matters from here. As soon as we get on top of Coronavirus, markets will swing back into action and many will simply fall for the same tricks like Pavlov’s dog and the short squeeze will send stocks powering back.

Governments now have a legitimate excuse to blow out deficits and borrow to save us. In that sense, this pandemic is a blessing in disguise. That isn’t to trivialize Coronavirus but to note that politicians will do almost anything to stay in power, even if the long term consequences will linger long after they’re out of office.

Where will they spend? The automotive sector has been in the doldrums for ages. Expect to see EV related subsidies which will be a boon for the EV battery plays – we’ve bought Jervois Mining (JRV.AX) which is about to start a cobalt mine in Idaho.

Think of support to the aviation industry when the crisis is under control. Boeing and Airbus. Don’t forget that American Airlines renewed 900 aircraft soon after it announced Chapter 11 bankruptcy back in 2011.

Think construction – cement companies and construction machinery companies tend to benefit from public works programs. We continue to hold gold (have done since 2001) as the ultimate insurance policy when the whole system can no longer heal with band-aids.

So get ready to buy some bargain-basement names with cash flow survivability, especially if you have a self-managed super fund.

Yes the underlying economic backdrop is dreadful but there will be one last hurrah!

Girls smarter than boys so why lower hurdles to force gender quotas?

It is kind of ironic that UTS thinks that lowering the ATAR requirements to get more girls into STEM fields makes sense. What happened to independently minded girls who want to pursue their interests as individuals rather than try to rig admissions to push ideological quotas?

Isn’t that what International Women’s Day is all about? To create equality of opportunity?

Forget that the average ATAR score for girls is 71.1, higher than boys at 67.8.

Could it be that girls and boys tend to like different things?

A Scandinavian study conducted across 470,000 subjects showed that while girls from nations that had pro gender equality policies in place qualified as well if not better than boys to do STEM, simply chose not to elect to study it. It had the exact opposite outcome of what was expected.

There is a reason why 99% of bricklayers are men and 80% of nurses are women.

Sensibly, Pymble Ladies College (PLC) principal Kate Hadwen openly said,

We don’t need it, do we, girls? No…It’s outrageous. The thinking is to try and encourage girls into STEM. But I just think that it’s absolutely saying women need help. We don’t need help. We’re great as we are, thanks very much.You have to earn your place there… I’m a believer in that.”

By all means, tell girls the virtues of what a STEM degree might bring in terms of a job and remuneration but leave it to them to pursue it if they feel it is of interest.

PLC 1 – UTS 0

Colonialism and Comcars

Image result for robert menzies car

Senator Mattias Cormann has admitted he was behind the decision to change the colour of our government Comcars – which ferry politicians around – from white to dark grey in order to remove any remnants of our colonial past, which in his words were “a better reflection of a modern, forward-looking Australia.” Forget the fact that most government cars were painted black, including Sir Robert Menzies’ Bentley (above). Might have been better to channel the founder of the Liberal Party as inspiration instead some woke nonsense. Or just let the drivers, who need to clean and maintain the vehicles, choose. 

Seriously though, what % of Australians have ever thought that our white Comcars harked to a colonial past? Best put it to a plebiscite and waste more time. 

Dark Grey? Isn’t that a gloomy hue? Should Aussies prepare for dark days ahead? Truth be told the colour is probably quite representative of where our economy is heading, even without coronavirus.

Interestingly, according to car insurer youi,

Our accident frequency research reveals that dark coloured cars are more likely to be in an accident than lighter coloured cars, likely because they are less visible to other drivers on the road. Grey coloured cars topped the list, followed by black and charcoal.

Who says that politicians don’t make sacrifices for us?

If we study where the proportion of cars coloured in colonial white is highest, perhaps parliament should be spending up big on a reeducation program in Tasmania for their unconscious colonialism. youi claimed,

Tasmania has the highest percentage of white cars at 33.80% versus the national average of 30.45% (silver 19.4%, blue 11.29%)

White cars seem to be connected to toxic masculinity too. Best run a campaign on unconscious sexism if youi is to be believed.

Compared to females, white is more popular for males relative to other colours (34.34% for males, 26.46% for females)

Take it a step further and question how much more Cormann could have done to reduce the racist footprints of colonialism.

Why are we buying cars from a maker that powered the Nazi Luftwaffe, SS and Wehrmacht, based in a nation that at the time was hell-bent on world domination and genocide? If we went for Lexus or Toyota we’d be buying cars built by a country that was also determined to colonize The Pacific. Jaguars or Range Rovers would be off the list, even though the Indians now own the brands. Rolls-Royce & Bentley are German-owned. Italians were colonialists. Maserati, Fiat, Lancia and Alfa Romeo banned. The French? Colonialists. Renault and Peugeot-Citroen are out. The Spanish? Colonialists. No SEATs, although that is owned by the Germans. America? Someone is bound to raise an issue with their CIA operative endorsed post-war military hegemony. So no Caddies, Fords or GM cars, especially after the axing of the Holden brand. China? Buying Haval or Great Wall cars would at the very least cut down on the overall cost of Comcars, especially with the generous 10-yr unlimited kilometre extended warranty.  That is how we cut the budget deficit. 

Maybe we should just buy Volvos. Maybe that way we could appeal to be supporting the home team of climate activist, Greta Thunberg to shore up the youth vote while acknowledging that the Viking hordes of 1000 years ago was far back enough in history to upset anyone today. If we’re lucky, the Swedish Riksbank may consider buying our sovereign debt again

Seriously, haven’t our pollies got anything better to do than conjure up such illogical nonsense like this? Given we’re at this level of discourse, perhaps walking, cycling or public transport would be a better bet for our lawmakers. At the very least it would put them in touch with how commoners live.

Brains immature until 25yo

The BBC notes that pressure is being placed on courts to refrain from jailing people under 25yo on the basis their brains are stil immature.

BBC reported, “The Scottish Sentencing Council, which produces guidelines for all courts, has launched a 12-week public consultation…

…They say a young person’s maturity should be taken into account when assessing their blameworthiness…

…Using 25 as a threshold would bring Scotland in line with Switzerland. In the Netherlands the age threshold is 23. In Germany it is 21…

…It follows research saying imbalances in brain development explain risk-taking and emotionally driven behaviour.

Do the same rules apply to the apocalyptic predictions of a brainwashed 17yo to save the planet? Is it emotional rather than rational?