Troublesome Times…

“These are tough times…” -- said everyone, throughout history

We say it often, don’t we? In fact throughout the documented history of human beings, through all time, there are often-times quotes of a similar nature to be found. Why is that? Are we just a perennially troubled species, with hyper-sensitive Amygdala, unable to focus on the undeniable comfort of our (western) lives. As is often the case, it’s all contextual. As the quality of human life improves, it likely correlates with a rising fear that the theoretical downside or risks are even greater. Result? The birth of 20th century anxiety disorder...

In 2020, we are all dealing with a viral pandemic that is threatening to overwhelm not just the global healthcare system, but indeed our very way of life. Again, I speak only of the comfortable Western way of life that I have had the utmost privilege of experiencing. I have no ability or indeed right to share my guesswork on how it is to live in poverty or war-torn regions across the planet. Nonetheless these are troubling times for all of us. So much so that fear and greed are driving normally rational people to clear the shelves of supermarkets as if they are about to continue their existence in an underground nuclear bunker. 

There is one mitigating factor regarding this behavioural change in humanity. For anyone born post the 1940s, we have never really witnessed a true humanitarian crisis unfolding, on the ground, here in Europe or the US. Yet, here we are, hundreds going on thousands of people in ICUs across Europe, starving the continent of hospital beds and healthcare capacity. The streets are emptying. Stores are beginning to ration food and supplies. The UK government has unleashed a package that offers to cover 80% of salaries for any business where employees are unable to work. These are war-time like conditions and this may just be an early stage if the trajectory of infection rates in the worst affected countries is anything to go by. No one alive below the age of ~85 has likely seen this type of scenario before; not to this level anyhow.

The global economy is at risk, as it was in 2008 when a 30-year credit bubble was rudely burst. Many people lost jobs, livelihoods and entire national economies collapsed. The world spent ten years eliminating the probability of a repeat; capitalising the financial system and forcing banks to make their balance sheets bullet proof. Yet, that work will be of limited use to protecting the global economy today. Alas, the next crisis is NEVER the same as the last. Before I continue, let’s be clear, this is not a primarily economic crisis today. The global economy, aside from a few (mostly Trump related) banana skins was humming along just fine. This is a healthcare crisis caused by a mutated virus, for which no one can be blamed. People are losing their good health and families are suffering the world over. The issue is, with the world order built as it, with a spine of ‘capitalism’ (though, read Corporatism), a weakening economy makes the downward spiral, sharply steeper. When a humanitarian crisis is compounded by severe economic uncertainty and contraction, failing businesses, mass job losses, collapsing consumption and falling credit extension, things unfortunately get a whole lot worse. In a world where the rich-poor divide has never been wider, we have already seen the manifestation of this division through rising populist politics, the north African refugee crisis and perhaps worst of all, the Petri Dish like growth of a situation that can lead to the election of a germ like Donald Trump as “leader” of the free world. In another example, taking a look at Venezuela is like a window into the future of a nation that succumbs to desperate populist politics. A disaster with multiple ugly facets.

Currently the economic cycle that keeps this world order functioning is slowly grinding to a halt. I wish this outlook didn’t sound so gloomy, but there is no escaping it. In 2008 onwards, the consumer could still go out, take loans, buy cars, go to pubs and generally keep the economic heart pumping. This behaviour directly lines the pockets of corporate CEOs, their boards and bankers, meanwhile filling the tax coffers of governments and generally keeping the cogs turning. Not to sound all conspiracy theorist, but this is the smoke-screen put in place to keep the masses satisfied and maintain the system just as those corporations and governments like it. To put this in terms of popular culture, we are the batteries that power the machines, while they distract us with the Matrix. A situation like we have today, shows how fragile the system really is. The virus is the anomaly in the system that cannot be controlled...

The world brought this upon itself. Building a pyramid of corporate and political elites at the apex, with the masses feeding off scraps down below, is likely to produce a system that does not handle this type of crisis well. The short term incentives are just not aligned with producing an outcome where the majority of human beings have the means to protect their own future, either from a health or livelihood perspective. Like any organic species, life or perhaps more correctly put, the process of evolution, fights to keep the environment in a delicate equilibrium. The human race has spent 2000 years disrupting that equilibrium.

This brings me on to another point, the planetary environment itself. Remember a few weeks ago when the only thing you heard on the news was talk of the climate crisis and Greta Thunberg? Well at least a little bit less exposure to the latter is one thing we can be thankful for. But on a more serious note, let’s not forget that when this pandemic has finally been contained (and history says it will be, albeit with too much tragic loss of life on the way), perhaps even more significant challenges to our way of life lay ahead. The ‘Pyramid’ rears its ugly head again. I believe that world leaders have the power to initiate changes that can stop eating into the scientifically confirmed carbon emission budget we have remaining. The problem is that too many Chevrolet, Ford, Volkswagen, Exxon, Shell (... endless list...) CEOs and board members will have to take a massive pay cut. That is not to mention the lobbyists, power brokers (WTF is that job anyway?), politicians and other pond slime that make up the Pyramids upper echelons.

For me, these are indeed troubling times. Not because I am worse off than my ancestors or indeed those living in poor conditions today, but because I have a lot to lose. I have a young daughter and sometimes my heart sinks at the thought of the world she must take on. I hope this article doesn’t come across as a rant. I believe I am actually a capitalist and somewhere deeper inside, an optimist! I believe that a free market should be allowed to dictate prices and our economy. However, I find it disturbing that a world that is advertised as democratic, capitalist and equitable is a horrible disguise for mass elitist corporatism. Most people just don’t stand a chance any more...

I certainly won’t offer any investment advice here. In fact, as tempting as free-falling markets are as a “buying opportunity” I would not be trying my hand at catching falling knives here. The water is just not safe to enter; it’s not even warm. If anything, as the cliche goes, CASH IS KING. Central bankers are scrambling to completely untether monetary policy from reality. And this is coming from an era of already extreme policy where the most influential economic centres hold inter-bank interest rates at negative levels. It hasn’t helped before, and it won’t really help now. Extreme monetary policy relies on the green-shoots of commercial and industrial demand, to encourage further investment for growth. These things are in thin supply. So UK interest rates are going to be low, for a very long time now. I might suggest taking out a loan. Not to buy a car or a nice ring for your Mrs, no. But to keep the cash in the bank, because I daresay, rainy days are coming.

To sign off, my last bit of advice, if anyone cares and has read this far down, is to now really appreciate all the good things you have in your life. Your children all loved ones, your work, your health (mental as well as physiological), the sofa you’re sitting on that allows you to unwind, the big screen TV you lose yourself in or maybe the lovely pizza you have ready to put in the oven. Just look at the four walls around you, the place you live. One day in the past you walked in there, likely with some KFH estate agent with a dodgy haircut, and fell in love with your future home. Now you’re stuck in there for a few weeks/months. Take some time to remind yourself why you love living there, take solace in your sanctuary and try to relax. Hidden in all this chaos is a chance to switch off and shed years of commuting, stress and bureaucracy. If all that fails, stick a copy of FIFA-20 in the XBOX and smash up Liverpool FC for fun…

These times are hard, but they will pass. Cracks open up in our world, giving the opportunity for a Rose to grow from concrete...

Take care, be safe and please don't hoard toilet paper (it makes you seem really gross and indicates embarrassing Bowel issues),

Ravi Singh Sidhu 

[P.S. I could not be bothered to grammar check this, so you can stick your ‘they’re not there’ comments where the sun doesn't shine…]