Talking Points
- The WHO stated that asymptomatic spread of Covid-19 is "very rare"
- Contrast: half of Singapore's cases were found to be asymptomatic
- The EU blamed China and Russia for coronavirus misinformation
- Wildlife groups praised China's new pangolin protections
- India and China put years of border disputes to bed (for now)
- Georgia's disgraceful primary portended a disputed 2020 result
- Post-Brexit trade deal negotiation update: still broken
- Burundian President Pierre Nkurunzizi died in office aged 55
- The Koreas found common ground: curbing propaganda leaflet balloons
- Mass graves with hundreds of bodies were unearthed in Libya
Deep Dive
How can America's stock markets be heading in one direction, while its economy is heading in the other? Before you answer that, just remember that some of America's best stock marketeers haven't the faintest clue.
Shock value
One headline caught our attention early in the week (and still has it): There Isn't a Single Down Stock in the S&P 500 Over Last 10 Weeks . It erased all of its 2020 losses. How can this be in the midst of a raging global pandemic, a recession, and historic job losses? This is the index of the 500 largest American companies (weighted by market capitalisation). Not some temperamental technology index like the Nasdaq which is regularly propelled into stratospheric territory by the likes of Google, Apple, and Amazon. Has there really been an economy-wide turnaround in the ten weeks since Covid-19 knocked the wind out of global equities?
Well, if economics is a 'soft' science (which is to say hardly a science at all) then stock trading is surely an art. After its bewildering climb, on Thursday, the S&P 500 shed some $2 trillion of value (near 5%) as 499 of its members lost ground. The sell-off was precipitated by signs of a destructive second wave of Covid-19 infections. With this kind of volatility, depending on where you set the date parameters, you could probably tell any number of stories about the S&P's performance . So let's just take a step back from the ebb and flow, and note that the index is still up an inscrutable 13% since February.
And if you are concerned that you don't understand this state of affairs, you are not alone. A great many esteemed stock pickers missed the boat entirely. The plurality of egg-faced experts led one commentator to this memorable appraisal , "The people who hate the rally are the people who are market gurus, because it makes it seem like their expertise is useless. And guess what? It is useless." Not for the first time in recent years, it appears as though the US stock indices no longer correlate with the reality of the economy they are built on. For the half of American households who own no shares, the rally is an immaterial fantasy.
The R word
The fantasy ends when you look at the current material conditions of the US economy. It is when we delve into the level of labour force participation and the consumption of goods that the disparity is revealed. America is in a recession . And it has officially been in one since February, when the pandemic reached US shores. The contraction ended 128 months of continuous expansion since the Global Financial Crisis. The pace of job losses and decline in production is ( EDITOR'S NOTE – sorry, but few synonyms can convey the intensity of this word: ) unprecedented. The Federal Reserve, which acted quickly in March to shore up the stock and money markets, is expected to keep interest rates near 0 for at least another year. It sees the US economy as a whole shrinking by 6.5% in 2020. This portraiture is set against a backdrop of the broadest economic collapse in more than a century.
44.2 million Americans have been laid off – as many as 1.5 million filed for unemployment benefits this week. This is an intense, desperate situation, and America's states are rushing to reopen even as businesses are shuttered en masse. And here's the really bad news. The current round of coronavirus unemployment benefits (which includes an extra $600 per week ) is set to expire in July. If no extension plan is agreed upon, and it looks unlikely that one will be, income for nearly 15% of the population will drop down to the paltry figure of less than $200 per week. Even worse, the 15% figure is misleading. While just over 20 million Americans are receiving that benefit, as many again are left with either rejected claims or unanswered claims. On top of all that, some 6.5% of American families don't even have a bank account (let alone a trading portfolio). And so, even the initial $1,200 Trump-bucks stimulus cheque has not reached many of them.
Amidst all the talk about rebounds and rallies, it would pay to remember that there is a soft underbelly to the American economy. A mass of millions unemployed, and a magnitude more underemployed, for whom 2020 looks more like an 'L', than a V-shape chart.
Worldlywise
Treasure mountain
"Begin it where the warm waters halt
And take it in the canyon down,
Not far, but too far to walk,
Put in below the home of Brown"
This might be the most-studied stanza of modern poetry to have never made it into a literature syllabus. It might not be particularly rewarding in the ways traditionally associated with poetry. But its dissection certainly did pay off – with at least $1 million worth of jewels and gold. The stanza is one of six in a poem that offers clues to America's most delightful treasure hunt. This week, someone finally cracked the riddle.
A decade ago, the art and antiquities dealer, Forrest Fenn challenged the world to find a genuine treasure chest that he had hidden somewhere in New Mexico's Southern Rocky Mountains. The trove included gold coins, pre-Colombian South American sculptures, gold mirrors, a 2,000-year-old neckalce, ancient Chinese jade figurines, as well as rubies and emeralds. The lustre proved to be a powerful motivator; it's estimated that some 350,000 people tried their hand at searching the New Mexico high country and beyond. A local paper reported that four or five people had even perished while deep in the wilderness.
And now it has been found , by an as-yet-unnamed prospector. Fenn confirmed that the poetry-map led the lucky man to the spot "under a canopy of stars in the lush, forested vegetation". It's provoked mixed feelings amongst those who've spent years searching, and in Fenn himself. Some have called the entire treasure hunt a hoax. But until proven otherwise, we're happy to believe that Fenn was driven by the same sense of adventure that resides in all of us – he just had the courage to go searching for it.
Rewriting white culture
Last week we touched on George Floyd becoming a martyr for the Black Lives Movement. His death, and the global protests in its wake, sparked widespread action. Across US police departments. Across business. Across politics. Now, the movement is forcing culture to have its own reckoning with racism. Starting with the silver screen.
HBO Max has temporarily pulled the 1939 classic, Gone With The Wind . The film’s positive portrayal of slavery is a product of its time – when Jim Crow and segregation still ruled the US. Hattie McDonald played the sassy head slave, “Mammy” and became the first African American to win an Oscar for her role. After she accepted the award, McDonald was was forced to sit separately from her esteemed white colleagues. That “Mammy” stereotype long depicted African American women as one-dimensional, unambitious and angry. It arguably still informs the “angry black woman” stereotype we see across American culture today. HBO said the film would eventually be re-added with a “discussion of its historical context”. Though the removal didn't really quell interest. Within 24 hours, the film's DVD jumped to the top of Amazon’s best-selling list . And critics have largely decried it as a form of censorship. While other film networks and streamers have followed suit. “Cops” was canned for its glorification of law enforcement. While Netflix removed Little Britain, The Mighty Boosh and Australian comedian Chris Lilley’s shows, over their use of blackface.
It’s not uncommon for streaming services to pull content. Perhaps what says more about this cultural moment is the fact that we noticed their removal at all, and the ensuing outrage. Can we still be entertained by blackface in 2020? It started with pre-Civil War minstrel shows that specifically ridiculed African Americans. Do we let these depictions live on as a relic of their time, or scrub them completely? Regardless, this moment is forcing a conversation about what audiences still find entertaining in this zeitgeist, and what that says about them. If audiences can still watch Gone With The Wind without picking up on the overt racism, that’s a problem that no contextual note from a streaming service can solve . Film and television reflect life back onto us. What lives and stereotypes do we want people to be viewing 50 years from now?
The Best of Times
Ad alta, ad astra
Kathy Sullivan became the first woman to have travelled the ten kilometres underwater to Challenger Deep, the lowest oceanic floor on the planet. Seven men preceded her, but while eighth overall doesn't sound like much, none of those who descended previously have also lived 408 kilometres above sea level on the International Space Station. The 68-year-old Sullivan (who was also the first American woman to walk in space) described Challenger Deep, part of the ocean's ominously named 'hadal' zone, as a "moonscape".
Reversing the cycle
The unvirtuous loop of space-cooling air-conditioners providing respite at the expense of higher emissions and accelerated global warming is well defined. Singapore might just have the solution , and it involves thinking a lot bigger.
The Worst of Times
What we say goes
Yesterday the Trump administration unveiled a raft of sanctions and travel restrictions on an insidious, new threat: the International Criminal Court. It was a targeted attack on the members of said tribunal who are investigating alleged war crimes in Afghanistan. It's an obnoxious response, though one that is hardly a significant departure from Washington's long-held and bipartisan position, to steadfastly refuse to submit its war criminals to a higher power.
It's hard to overstate the importance of this story
Weekend Reading
The image
The quote
"As my mother likes to say, eternity is awfully long, especially near the end."
– Matthieu Ricard , a biologist, Buddhist, and French translator for the Dalai Lama, sat down for a gentle interview with the Financial Times. The above quote is just one of the many gems in it.
The numbers
Two
- Consecutive months during which Britain, a country of 66 million with an advanced economy, has burnt no coal to power itself.
13,500
- The estimated number of years since a craftsperson carved a piece of burnt bone to create a startlingly complex bird figurine. Just look at the skill in this proto-Chinese art .
The headline
"Truncated will: India landowner bequeaths land to elephants" – AFP .
The special mention
Prince Andrew is back in the headlines this week (isn't that just a sentence that makes you wince?). He's managed to further batter his reputation by publicly lying about his cooperation with the FBI investigation into his highly suspicious links to the deceased billionaire paedophile Jeffrey Epstein. Extraditing a royal is broadly considered to run counter to the ethos of the special relationship, but we love the suggestion of a straight swap : Prince Andrew for Harry Dunn's killer.
A few choice long-reads
- The Economist on the chance for reform after Floyd
- Foreign Affairs counts the deadly cost of exceptionalism
- Businessweek delves into the Dorsey v. Trump billing
Tom Wharton
