Thursday, 16th April 2020
The ‘key worker’ of the future will look very different – and he’ll be back on the agenda shortly….
There is little good news….
The IMF warns that the world faces the worst recession since the Great Depression. It expects the global economy to contract 3.3%….
That doesn’t sound like much. But the effect will be cataclysmic…. unprecedented…. ‘a crisis like no other’….
The IMF chief says global living standards will plummet. The advice to government? Spend. Keep on spending. Then spend more….
Here, the Office for Budget Responsibility expects the economy to shrink by a third this quarter…. for jobless figures to hit 10%…. and for the government deficit to rise beyond £200 billion….
Is there a glimmer of hope in the latest monthly survey of investors conducted by Bank of America?
It says 93% of leading fund managers expect the world economy to contract this year. That leaves 7% who don’t believe it….
I’d like to meet that 7%. I don’t know if they’re eternal optimists, drunks, comedians or fruitcakes, but they sound like fun. That said, some contrarian bets you just don’t make….
- This bear didn’t hit bottom….
Stock markets have bounced back from low points reached during earlier stages of the coronavirus crisis….
Prices have rediscovered some stability after the initial shock of the black swan event….
Governments are committed to spending whatever it takes to keep the economy going and markets on track….
Infection and death rates are flattening. Confidence is returning. Volatility is reduced….
But anybody who believes the bear market in stocks hit bottom should think again. That’s my advice….
Bear markets don’t end with the same old investors sat like coiled springs waiting to leap back into the fray….
When a real bear market ends, most stock investors are curled up in a ball sobbing. The rest are out looking for their broker – and not to thank him for his advice….
That time will come. It hasn’t been and gone yet. There is a deeper, harder bottom ahead….
- Wrong question….
Meanwhile, many stock investors focus on the wrong question….
They ask when lockdown will end – enabling people to get back to work….
What they should be asking is this: when will consumer demand return to pre-crisis levels?
A return to work and a resumption in same-old consumer spending levels are not the same thing. One won’t follow on seamlessly from the other….
Consumer budgets have been damaged – if not decimated – and there will be an element of ‘stand back’ in consumer markets to begin with….
That torpor will continue to adversely affect corporate earnings….
People returning to work isn’t a return to ‘business as usual’. Investors would be wrong to conclude that it is….
- Brass neck….
I howled with laughter earlier this week when I saw historic comments attributed to Richard Branson….
The tycoon went to live tax-free in the British Virgin Islands 14-years ago. He hasn’t paid any personal tax to the British Exchequer since….
No problem. Laws exist to be bent. Loopholes to be exploited. I’d probably do the same….
But I wouldn’t have the brass neck to say what Branson said on his blog in 2013 when his BVI-resident status was revealed….
‘I have not left Britain for tax reasons but for my love of the beautiful British Virgin Islands…. [I] would not live somewhere I don’t want to for tax reasons….’
Sure, Richard. Sure….
- Exodus of the super-rich?
The coronavirus crisis fallout will produce more super-rich tycoons who develop a deep (and sudden) love for the climate and scenery in residential tax havens worldwide….
Rishi Sunak hasn’t got many options when it comes to footing the bill for coronavirus and his economic support measures….
Austerity has been government policy for a decade. How much more fat can be trimmed from public service budgets before Britain becomes the Hunger Games dystopia David Icke talks about? How many more cutbacks will the British public stand for?
You can only sell so many bonds. The Bank of England won’t want to resort to permanent money-printing. So, that leaves taxation – if not immediately, certainly at some point….
The poor and the middle classes will be squeezed mercilessly. That’s long odds-on and you can bet it big with confidence….
But, if the super-rich are asked to stump-up a bigger share of the tab, I suspect a decent percentage will vote with their feet….
- New key workers….
I’ll tell you what doesn’t get sick; what doesn’t pass the virus on;
what doesn’t need to be furloughed or isolated or bailed out with helicopter money – a robot….
A robot doesn’t need a mask either. Nor any other personal protection equipment that doctors, nurses, care staff, porters, bus drivers, tube workers, delivery drivers and supermarket workers have been lacking….
Robots don’t need to observe social distancing regulations. Robots can give the virus two fingers. It doesn’t affect them. They can carry on regardless – 24 hours a day. They don’t need food, paracetamol or toilet roll. And they don’t demand rights….
It won’t be long before some bright spark makes the argument that if we’d had an army of 500,000 custom-programmed robot workers and intelligent machines at our disposal, this crisis – public health and economic – wouldn’t be half the problem it is….
But the story lost impetus. To be replaced by the next trendy cab off the rank – bitcoin, cannabis, trade wars, Brexit….
- Expect a return to the AI agenda….
Expect a swift return to the AI agenda once this crisis is over….
The COVID-19 virus has revealed the vulnerabilities of the human worker and the danger his unreliable immune system poses to the global economy….
Susceptible human workers are the new problem. The solution will be a different workforce – one that doesn’t share human fragilities….
Make no mistake about it, the ‘key worker’ of the future is a multi-purpose robot….
Getting more robots into more workplaces will be high on the political, corporate and globalist agendas – once it’s politically safe to talk about replacing ‘frontline’ nurses, supermarket workers and bus drivers with machines….
If you’re thinking about putting a little speculative cash into post-coronavirus stock market plays, consider investing in a basket of stocks of companies focused on AI, intelligent machines, automation and robots….
There are various Exchange Traded Funds (ETFs) enabling you to do just that….
There will be market ups and downs, but if you’re in for the long haul then AI is a sector with huge growth potential….
That’s how it looks from here….
All the best,