Reflecting on the pandemic and examining ‘the new normal’

Vector illustration of a man working from home during the coronavirus outbreak

” COVID 19 will end up being the greatest wealth transfer in history “

Jim Cramer / Michael A. Gayed, CFA and a bunch of other financial analysts.

I read this numerous times in the midst of the DOW crash and did dwell on it for a while, as it certainly has some accuracy behind it. There have been some massive winners and losers during the pandemic, lockdown and the recession thus after it. Whilst there have been some rich losers – Warren Buffets firm posted losses off more than $50 Billion, as did many other old hands in the stock markets caught stuck in the mud as the global travel hub and associated services & sectors suddenly ground to a halt. Not that this will ultimately effect them as they’re still incredibly rich as a company.

The losses that will be most keenly felt, will be by the working man. The self employed workers who struggled to get finance or lost clients that they may never recover. The industry lay offs in their hundreds of thousands / millions across the worst effected sectors. Those who will likely be hardest hit are those in the gig economy, arts, hospitality sectors.

2008’s global crash wasn’t as bad as the great depression because lessons had been learnt and whilst it’s very possible this economic recession will also not be as bad, it’s come at a bad time.

The AI / Digital revolution is in full swing and many jobs are and could be easily replaced by robots and technology. Machine learning has this revolution in hyper drive. There’s opportunities, there always is but the industries are fast becoming digitised, those who have always prided themselves on being technologically illiterate will soon find themselves in a bad position.

Rich tech, mostly, gets richer

Amazon posted profits of about 75 Billion for the 1st quarter of this year, that’s the same amount they pulled in for their annual profits in 2013. Alphabet & Facebook have also had a lot of success.

It’s not all doom and gloom

Working from home or remote work, is perhaps here to stay after its unexpected success. Workers and remote workers have been advocating for remote work for years now and most polls I have seen on LinkedIn show a glowing majority for ‘work from home & office work’ flexibility as something they’d like to see.

In other positive news, it’s estimated that over 3 million lives were saved in Europe alone by countries going into lockdown at the right time, meanwhile in the UK, top scientists think the lockdown was at least one week too late and at least 20,000 died as a result due to the UK’s indecisiveness and half in / half out approach.

Governments set to struggle

This is the area I think will be of greatest concern with the recession or possible depression. Is that governments across the world, will suddenly be in either huge debt or desperate to fund the gaping hole the lockdown pause has put on their economy, especially in so in countries dependent on tourism and hospitality sectors.

Brexit Project Fear (Reality ) is now in effect

After years of painfully trying to explain to people that the UK couldn’t have it’s cake and eat it as promised, the reality is beginning to set in and excruciatingly so. Boris and company are looking more hopelessly out of their depth to even some of the previous staunchest supporters and the conservative back benches aren’t quite as strongly behind Boris as they once were. Labour even has even offered some actual competition for once.

As the UK’s economy is now predicted to be the hardest hit post pandemic, with the expectation of it being as much as a 14% hit to the economy should a 2nd wave occur.

It’s strongly suggested the UK’s budgeting for a ‘No-Deal Brexit’ played a large role in undermining the pandemic response plan, which combined with the UK being the most reluctant country in Europe outside of Sweden to enter into lockdown or commit to any stringent measures, points to a country that doesn’t quite have the budget for a no deal crusade they thought they did. The UK’s pandemic response has been largely criticised both internally and internationally

Brazil
Is set to be the 2nd worst and new epicentre of the outbreak within days / weeks
Spain
Strictest Lockdown in Europe
‘EU level lockdown’
Higher population Density than UK
Germany
‘EU level lockdown’
UK
Lockdown ‘lite’
Highest Death Toll In Europe
United States
‘Largely ignored lockdown’

Lockdown deniers will point to any list of excuses from ‘being too many variables’ IE they don’t want to hear the answer to the population density answer, to which Belgiums reality of a much higher population density and following the EU approach still points to the lockdown having being the better thing to have done. The EU countries as seen in the charts above, all have a similar decline rate due to the strictness of the lockdown, in comparison to a much more dragged out decline when compared to the USA / UK who had ‘lockdown lite’

The reality is simple, the EU countries realised the situation they were in that the virus had spread too much and had much too long an incubation period and infectivity rate, to be contained in clusters much like South Korea and Japan were managing and understood a strict lockdown was the best solution moving forward. The data supports this thesis as the countries in which have done this have brought the figures down well below 4 figures and have a planed approach for exiting the lockdown.

The UK meanwhile has pretty much bungled this thing from the started, from ignoring their own highly ranked world wide pandemic plan, downplaying the virus despite the growing warning signs coming from China & Italy, having known that a pandemic was the number 1 threat to their country. This would be bad enough on it’s own, had the UK not had a 2016 pandemic response readiness test, of which the summary could best be described as a failure, 4 years on and nothing had been done, no doubt because Brexit planning overtook everything.

Not that the blame can go wholly on the folly of the UK government, the WHO hasn’t been clear on some vital information such as masks, only recently admitting they are effective in controlling the spread of the virus, despite substantial evidence of this in Asian countries where this is well practised, it is possible and should be considered however, that this was in a bid to save medical equipment for the healthcare workers in a white lie for the greater good as supply couldn’t meet demand, it was only once stock worldwide seemed to reach demand, that their stance changed.

The WHO’s recent worst offence wasn’t the mask misinformation, nor the apparent ‘mishearing’ of a reporter asking about Taiwan and suspected Chinese influence, no. It was the most recent headline which stole the hearts and minds of those who had been sceptical about the virus from the start

Which was quickly fixed but unfortunately, people will hear the words they want to hear and quote the articles that back up their ideas regardless of timeline.

Closer to Home – potential financial ruin

In Northern Ireland alone, the warning signs are there across the country. Causeway Coast & Glens which was already 70m in debt before the virus must be in dire straits given other councils which had reserves they were looking to invest are now in the red and holding off on any new projects, with frequent warnings that the cash supply is running out fast.

Companies in Northern Ireland have already begun packing up and moving to the Republic of Ireland to avoid the upcoming nightmare which is the dual border between the south and mainland UK. Given the double whammy of Brexit & Covid-19’s effect on the economy, fresh questions have to be asked about Northern Irelands future as the UK seems tired of bailing it out given their own freshly found economic woes.

Boris will begin the ‘crunch time’ talks with the EU next week so we can expect a clearer idea( if that even exists with the negotiations ) of what the relationship or lack of will be going forward. Though it feels for most, that Northern Ireland has been hung out to dry.

The Second Wave

We have to still consider the very real possibility that a second wave can occur if the situation moving forward is not handled correctly. Culturally the EU and asian countries seem in a much better place for this as wearing masks and a well established plan for reopening is already in place and is in the process of being executed, it’s been seen thus far a small incremental increase in cases across some of the countries in the past few days so the worry remains justified.

Meanwhile in the UK the culture is still very much ‘British common sense’ over masks, there is much widespread confusion and lack of top down information, which isn’t helping anyone, least of all anyone in need of an eye test and decide to take their car out for a spin just to make sure it’s safe..

On a brighter note.

On a lighter note, our Leo unleashed his inner Samwise as he looked forward to the end of this nightmare that has encompassed us all

About cwavedave 42 Articles
Always learning & travelling. I help small to medium-sized businesses grow online with web design & connect with their customers with SEO Strategy at my business Creative Wavelength. I also play Cornerback for the Donegal Derry Vipers American Football team.

Be the first to comment

Leave a Reply

Your email address will not be published.


*