What caught my eye this week.
The graph of this week’s GDP forecast from the [1] Office for Budget Responsibility looks like something from a comic book:
[2]Great Recession? “Pah!” says Covid-19. “Hold my drink…”
That’s not an economic projection – that’s the punchline to a three-panel cartoon.
Of course the hope is that like a sack full of garden manure dropped onto a trampoline, what goes down must surely bounce up again. And it will. But how?
Will we see a V-shaped recovery? A U-shaped recovery? Maybe a W-shaped start-stop affair? Or even a Nike Swoosh [3]?
The idea is to pick the letter of the alphabet that best fits how you expect the graph to go over the next few months.
Personally, I think it’ll probably be more like a Chinese character, darting up and down all over the place.
Modern economies are fabulously complex, and switching ours off wholesale will have broken numerous connections. When we restart, some areas will fly but others will be literally waiting for parts.
China tried to reboot its big factories first, but then discovered most of them relied upon smaller suppliers. So they were switched on, too – but then they found workers had nowhere to eat, because the street canteens hadn’t yet been allowed to reopen.
Britain on pseudo-FIRE
We’ve got plenty of time to think about all this, what with lockdown officially extended [4] for “at least” another three weeks.
Indeed it seems that many Britons have become more reflective now their alarm clocks have stopped buzzing and they’re working within sight of their gardens and kids.
It’s bemusing to me to read articles or hear podcasts in which people gush about how proud they are to be managing to work from home.
Apparently it’s a revelation to many that the technology is available, and that people will get on with work without the clattering distraction of an office or the time suck of a commute.
Fifteen years ago I co-founded a company that eventually grew to dozens of employees and scattered contractors. We never had a central office and ran the thing using Skype, Gmail, and early on Google Spreadsheets.
We’d meet fancy clients in a London member’s club to avoid awkward questions. But mostly we plotted strategy around our dining room tables, and then beavered away in our homes.
It seems this is fairy story stuff for many workers. I’ve written before that I believe more things will stay the same [5] than change post-Covid-19.
But maybe I’ve been presuming too much?
Sky News [6] reports that only 9% of people want life to return to normal after lockdown:
The survey found that 61% of people are spending less money and 51% noticed cleaner air outdoors, while 27% think there is more wildlife.
Others say [7] that having glimpsed the freedom of working from home, many won’t want to go back:
“Once they’ve done it, they’re going to want to continue,” said Kate Lister, president of consulting firm Global Workplace Analytics.
She predicts that 30% of people will work from home multiple days per week within a couple of years.
Lister added that there has been pent-up demand by employees for greater work-life flexibility, and that the coronavirus has made their employers see the light, especially as they themselves have had to work from home.
Indeed some are already anticipating a rearguard action from The Man and His Minions, who are presumed to be desperate to keep us in our (work)place and on the hedonistic treadmill.
In a widely-shared Medium [8] article, Julio Vincent Gambuto celebrated the global lockdown:
The treadmill you’ve been on for decades just stopped. Bam!
And that feeling you have right now is the same as if you’d been thrown off your Peloton bike and onto the ground: What in the holy fuck just happened?
I hope you might consider this: What happened is inexplicably incredible.
It’s the greatest gift ever unwrapped. Not the deaths, not the virus, but The Great Pause.
It is, in a word, profound.
But Gambuto predicts capitalism won’t stand for it.
“We are about to be gaslit in a truly unprecedented way,” he says, using the neologism for manipulating somebody into doubting their own sanity.
Lock heeding martians
While of course I’m breezily doing as directed – it’s not a big weekday change for me, to be honest – I do have mixed feelings [9] about the full lockdown strategy, as we’ve been discussing in the Monevator comments over the past few weeks.
Sweden, for instance, has no mandatory lockdown and yet far fewer deaths per million citizens, as cited in the links below. Indeed different countries are as figuratively all over the map with their Covid-19 pandemics as they are on the globe. It seems there’s a lot going on we don’t yet understand.
But all that aside, I’ve been moved by seeing the lockdown in action in London.
When China shut-up Wuhan, the few over here who were paying attention wondered whether we could ever manage anything similar in the individualist West. I admit I had my doubts.
Yet with no coercion and minimum fuss, the vast majority of us have followed the government’s strictures and it’s a little wonderful.
Out on my daily walk, every time someone steps off the pavement into the car-less road to give me space before I can do the same for them, I almost want to hug them. (Oh the irony!)
The London air is clean to breathe. You really can hear birds sing.
Even as the economy craters. Even as Romanian workers are being [10] flown in to pick fruit because the farming industry still can’t find British workers to do it, despite a million more jobless than last month. And not even Covid-19 can slow down Brexit [11].
Irony indeed.
Have a philosophical weekend!
From Monevator
How diversification is working during the coronavirus crisis – Monevator [12]
Another strong Covid-19 discussion followed last week’s links [Use ‘Next Comments’ at the bottom of each tranche of 50 comments to read through all 120+] – Monevator [13]
From the archive-ator: How to spot a bear market bottom – Monevator [14]
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1 [15]
IMF head: dire recession forecasts may be too optimistic – BBC [16]
UK economy losing £2bn every day in deepest slump since the Great Depression – ThisIsMoney [17]
Government extends furlough scheme until end of June – GOV.UK [18]
Bank of England tells lenders to ‘get on with’ Covid-19 business loans – Guardian [19]
How coronavirus almost brought down the global financial system – Guardian [20]
[21]
Morgan Stanley: In a post-Covid-19 world, employers will have to pay workers more [Search result]– FT [22]
Products and services
Price of high-demand food bought online rises sharply – Guardian [23]
NS&I cancels plans to cut Premium Bonds prizes and variable savings rates – Which? [24]
Pension transfers under lockdown [Search result] – FT [25]
Sign-up to Freetrade via my link and we can both get a free share worth between £3 and £200 – Freetrade [26]
Home electricity consumption now peaks at 1pm; data suggests we’re having early nights AND late mornings – ThisIsMoney [27]
Marcus cuts its easy-access rate, after £17bn pours in from savers – are top rates headed below 1%? – ThisIsMoney [28]
Open a SIPP with Interactive Investor by 30 April and pay no SIPP fee until April 2021, saving you £110 – Interactive Investor [29] [Affiliate link]
Unusual homes for sale [Gallery] – Guardian [30]
Comment and opinion
The virus broke the stock market weighing machine – Advisor Perspectives [31]
Downturns this deep can take a long time to recover from, financially and mentally – Schroders [32]
Larry Swedroe: Stop being bewildered that the market has bounced back – it’s not the economy – T.E.B.I. [33]
Should the state pension triple lock be axed to help pay coronavirus bill? – ThisIsMoney [34]
Robo advisers are easier to blame – Klement on Investing [35]
Covid-19 and the equity markets – Albert Bridge Capital [36]
Post-retirement calculator updated [US parameters, but interesting] – Engaging Data [37]
Portfolio tracking spreadsheet: v2.0 release notes [Tool] – Fire V London [38]
What is the average net worth, adjusted for age and education [US but interesting] – Of Dollars and Data [39]
Naughty corner: Active antics
A bull’s view in a China shop – Sum Zero [40]
Will investment trust dividends hold up? – IT Investor [41]
The S&P 500’s CAPE Ratio says the US market is still expensive – UK Value Investor [42]
Have small value stocks become a bargain? – Morningstar [43]
High Yield in the Covid Crash: Risky, but potentially very rewarding – Bond Vigilantes [44]
How working from home has slowed down Wall Street’s trading pros – New York Times [45]
Rob Arnott: Why the stock market hasn’t even got cheap yet [Video] – YouTube [46]
Jason Calacanis on ‘intelligent risk’ and angel investing [Podcast] – Farnham Street [47]
The unprecedented stock market impact of Covid-19 [Research, PDF] – NBER [48]
Covid-19 corner
[49](Click to enlarge)
The Covid-19 reproduction number is falling below 1 in several key hot spots – Epiforecasts [50]
Tim Harford: why we fail to prepare for disasters [Search result] – FT [51]
Critics question Swedish approach as coronavirus death toll reaches 1,000 [Really? It should also make them at least question our approach then, given Sweden has no lockdown and is seeing about one-third fewer deaths per million citizens] – Guardian [52]
Market up after Gilead’s Covid-19 treatment Remdesivir shows promise in leaked report – CNBC [53] and Stat [54]
Owner directors ‘come out of this with nothing’ due to lack of government support – BBC [55]
Ten reasons to doubt the Covid-19 data – Bloomberg [56]
UK is [supposedly] set to restart contact tracing – Guardian [57]
Nine out of 10 dying of Covid-19 had existing health issues, on average three of them – BBC [58]
Our pandemic summer [US but relevant] – The Atlantic [59]
Nursing home residents make up nearly half of Belgium’s coronavirus deaths – Brussels Times [60]
Locked and loaded – Bennallack [61]
China outbreak city Wuhan raises death toll by 50% – BBC [62]
Why is there a flour shortage in the UK? – CBBC [63]
You Clap For Me Now: meditation on racism and immigration in Brexit Britain [Video] – YouTube [64]
Kindle book bargains
Exactly: How Precision Engineers Created the Modern World by Simon Winchester – £0.99 on Kindle [65]
Gordon Ramsay’s Ultimate Cookery Course by Gordon Ramsay – £0.99 on Kindle [66]
Remote: Office Not Required by David Heinemeier Hansson and Jason Fried – £0.99 on Kindle [67]
Side Hustle: Build a Side Business and Make Extra Money by Chris Guillebeau – £0.99 on Kindle [68]
Coronavirus government briefing mini-special
A study of the increasingly bizarre backgrounds of Matt Hancock’s video briefings – Independent [69]
Hancock is channelling James Blunt, Raab looks terrified – Marina Hyde [70]
Little Brother is watching you [Images] – Guardian [71] and Steve Bell [72]
Off our beat. Ish.
“Anybody can do this game” – a pretty funny (NSFW) three-week day trading diary [Video] – Jason Portnoy via Twitter [73]
I always feel crabby too after a long flight [Video, funny] – via Twitter [74]
And finally…
“Wisdom comes to us when it can no longer do any good.”
– Gabriel García Márquez, Love in the Time of Cholera [75]
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