Der Stand der Dinge - 18.6.2020

News: When is a goal not a goal? There is only one answer to this tricky question, and the FA makes this quite clear: “A goal is scored when the whole of the ball passes over the goal line, between the goalposts and under the crossbar, provided that no offence has been committed by the team scoring the goal.” Match officials, on the other hand, often appear to try and follow the Dominic Cummins methodology of interpreting rules (“checking eyesight”) and failing dismally. One example of such failures occurred 54 years ago at Wembley Stadium and changed the course of football history, another yesterday as Sheffield United scored against West Ham but didn’t as the match officials were asleep at the wheel, er, whistle. Arsenal was run over by a bus last night, losing 0:3 away at Man City. ITV’s Piers Morgan, a life-long Arsenal fan, was suspicious by his absence from this morning’s ITV Good Morning Britain broadcast… ??

Boris Johnson must have read my missive yesterday where I criticised him for being beside himself since coming back to work after his Corona-virus infection. He was in excellent form yesterday during Prime Minister’s question time as he sparred with Keir Starmer. Still, that doesn’t change his recent decision-making record: his plan to open schools is still botched, the 14-day quarantine for travellers is so bass-ackwards that Emanuel Macron is travelling to London today to discuss it with the PM in person, and the “world-class” contact tracing app is an abject failure. Having been rolled out on May 28 to much fanfare and beating a self-imposed government deadline by three days, the system is hobbled by staff who often are ill-trained and under-employed, with some employees failing to trace a single person since starting work. Some employees tried to send suspected patients in England to testing centres in Northern Ireland. For non-UK residents: both countries are part of the UK, only separated by something commonly known as the Irish Sea. There is no bridge between the two countries…

In case you need something to read for your summer holidays, check out John Bolton’s book on Donald Trump. The leader of the Free World apparently was unaware that Britain was a nuclear power. He asked an advisor whether Finland was part of Russia. During a meeting with China’s leader Xi he recommended that Xi should go ahead with building internment camps for Uhigurs, the Muslim minority in the Xinjiang province because “it was the right thing to do”. This ties in nicely with his leadership style during the BLM protests.

On the Covid front, there was good news and bad news. The good news is that face masks do appear to work very well in reducing the risk of someone infected spreading the virus to others. The bad news is that yesterday alone Brazil clocked up 35,000 new Covid-19 infections. A Brazilian government official stated that “everything is under control.” That’s comforting to know. In China, officials are considering a new lockdown as Beijing grapples with a new wave of infections.  

Financial Markets: Stock markets took their signal from this development and closed lower yesterday. The Bank of England is continuing with its buy-back of Gilts, pumping more money into the financial system and depressing long-term interest rates. Since March it has bought back close to ￡200 billion and looks set to continue its purchases. Governor Andrew Baily said that lowering the base rate further (currently at 0.1%) is under consideration. Given that the UK economy contracted by 25% over the March/April period, I’d say that’s not just possible but probable. That will throw a spanner in the works for many baby-boomers who are looking at retirement. Anyone looking to take out an annuity will get hammered by the commissions paid to the annuity provider and low interest rates. In essence, you’d be living off your capital as the investment would not provide a positive return. That’s the next financial crisis in the making.

Alphabet shook off bad news on Google’s Chrome browser. I’m relieved I’m using DuckDuckGo….

Check here for Regulatory News. It’s nice to see a slow return to normality: the CBOE opened its trading floor again for hybrid trading.

Stay safe!