Tag: finance

While mayor Lori Lightfoot continues to try and assure the public that she has everything under control, the exodus from Chicago as a result of the looting and riots is continuing. Citizens of Chicago are literally starting to pour out of the city, citing safety and the Mayor’s ineptitude as their key reasons for leaving. 

Hilariously, in liberal politicians’ attempt to show the world they don’t need Federal assistance and that they don’t need to rely on President Trump’s help, they are inadvertently likely creating more Trump voters, as residents who seek law and order may find no other choice than to vote Republican come November. 

And even though residents understand the looting and riots in some cases, they are not waiting around for it to get better on its own, nor are they waiting around for it to make its way to their house, their families or their neighborhoods. 

One 30 year old nurse that lives in River North told the Chicago Tribune: “Not to make it all about us; the whole world is suffering. This is a minute factor in all of that, and we totally realize that. We are very lucky to have what we do have. But I do think that I’ve never had to think about my own safety in this way before.”

The city’s soaring crime has been national news this year and many residents are claiming they “no longer feel safe” in the city’s epicenter, according to the Tribune report. Aldermen say their constituents are leaving the city and real estate agents say they are seeing the same. 

The “chaotic bouts of destruction in recent months” are the catalyst, the report says.

Residents of the Near North Side told a Tribune columnist that they would be moving “as soon as we can get out” and others “expressed fear” of returning downtown. The Near North Side is 70% white and 80% of residents have a college degree. The median household income is $99,732, which is about twice the city’s average. 

Real estate broker Rafael Murillo says people are moving to the suburbs quicker than planned: “And then you have the pandemic, so people are spending more and more time in their homes. And in the high-rise, it starts to feel more like a cubicle after awhile.”

Additionally, those who once planned on buying downtown are reconsidering, he said. He said over the last week he has talked to “three or four” sellers who live downtown and want out so they can move to the suburbs. 

He commented: “They want to feel safe. They want to be able to come outside their homes and enjoy their neighborhood amenities, whether it’s running at the park, enjoying a nice little dinner, shopping. But with everything going on, there are a lot of residents who are not feeling safe right now.”

Resident Neil Spun, who has lived in Chicago for more than 30 years, said: “There have been riots before, and looting. It just seems to me now that the city isn’t doing anything about it. I don’t see this getting any better, and so I’d like to leave.”

Philip Nyden, founding director of the Center for Urban Research and Learning and professor emeritus of sociology at Loyola University Chicago said: “One of the things around the immediate reaction to the looting: there is an undertone of race, I think. People don’t openly say ’those people’ from the South and West sides are coming downtown … (but) in Chicago, the looters shown on television were predominantly young and African American.”

He continued: “Streeterville is one of the richest neighborhoods in the city — probably in the metro area. The looting of luxury stores on Oak Street earlier this month sort of freaked some people out. It’s not an image you normally see. And I think they’re reacting to that.”

He said of the riots: “Folks start saying, ‘Well, we’re gonna go to the affluent neighborhoods and loot, and not wreck our own neighborhoods,’ (although) I don’t know if it was quite that conscious politically.”

Nyden says he is not yet comparing the exodus to the “white flight” of the 1950s: “A lot of white flight was related to pure racism in many cases, or false fears being fed by realtors, who were doing all sorts of things to rev up fears. I’m not seeing that here.” 

Steven P. Levy, president of residential management firm Sudler Property Management wrote a letter to the mayor begging for change. It stated: “From Hyde Park to the Gold Coast to Edgewater, residents across the city are adjusting their daily routines out of fear. They’re avoiding neighborhood walks after 6 p.m. This is not a way to live, and I can’t fault homeowners when they tell me they’re considering leaving Chicago.”

Charlie Ragusa, a real estate client of Murillo’s, said: “I don’t feel comfortable here in the city anymore. People have the right to get their message out there … whatever it might be. But beyond the protests, we have the violence that’s attached to the protests. Often times, we combine the two of them together, because they pretty much happen at the same time. The violence is overpowering the people who have a message to say.”

He blames the Mayor: “She hasn’t done her job. Her job is to protect me and protect the city. And I just don’t see that she’s doing it. I can’t go out at nighttime anymore. I’m afraid to. That’s not normal; that’s not the way Americans are supposed to live.”

Another resident says she is looking to take her family and move about 50 miles outside of the city. “We’re just looking for more safety,” she said. Both her and her husband support the Black Lives Matter movement, she said, but living downtown it doesn’t matter. 

Looting had broken our near her home on August 10 and came home from a late night dog walk to see people surrounding her parked car. “The cops were just going past, and people had shopping carts full of (stuff), and all you heard were sirens, glass shattering and shouting. And gunshots. It was just very jarring.”

She concluded, in peak liberal hypocrisy fashion: “I think people forget that people do live here, too — it’s not just the Guccis and the Jimmy Choo stores. And I completely support it all. You stealing shoes means nothing to me — that doesn’t hurt me at all. It’s just the fact that that brings more crime, and that does endanger me.”

Authored by Michael Snyder via TheMostImportantNews.com,

Much of the southwestern portion of the United States has been gripped by a drought that never seems to end, and there is a tremendous amount of concern that patterns that we witnessed back during the Dust Bowl days of the 1930s may be starting to repeat. 

In a previous article, I discussed the extreme heat that we have been seeing in the region lately.  Phoenix has never had more days in a year when the high temperature has hit at least 115 degrees, and other southwestern cities have been smashing records as well.  At the same time, precipitation levels have been very low, and the combination of these two factors is starting to cause some major problems.

A couple of weeks ago, NASA posted an article on their official website about the horrible drought conditions that we are now witnessing…

As the United States moves into the last weeks of climatological summer, one-third of the country is experiencing at least a moderate level of drought. Much of the West is approaching severe drought, and New England has been unusually dry and hot. An estimated 53 million people are living in drought-affected areas.

Since NASA posted that article, things have gotten even worse.  If you go to the U.S. Drought Monitor website, you will instantly see why so many experts are deeply concerned.  The latest map shows that nearly the entire southwestern quadrant of the country is now gripped by either “severe” or “extreme” drought.  Needless to say, this is not good news at all for farmers and ranchers in the region.

Colorado is one of the states that is being hit the hardest.  At this point, more than 93 percent of the entire state is experiencing very serious drought conditions…

According to United States Drought Monitor, drought conditions have gotten significantly worse in Colorado in recent days and weeks.

Last week, approximately 72 percent of Colorado was experiencing “severe” drought conditions or worse. This has now jumped to just over 93 percent.

Because things have been so dry, it is really easy for the wind to pick up dust and start blowing it around, and this summer we have been seeing some really impressive dust storms.

For example, earlier this month two giant dust storms actually “converged” in the Phoenix area…

Two dust storms converged over the greater Phoenix area on Sunday, hours after the city broke another record as a heat wave grips the West.

Thankfully, at this point we still have a long way to go before we return to the nightmarish conditions of the 1930s.  The “Black Sunday” dust storm that so many history books talk about was actually 1,000 miles long, and it traveled at speeds of up to 100 miles an hour…

A month later, one of the most severe storms of the era, nicknamed “Black Sunday,” enveloped the Great Plains. It was 1,000 miles long, contained 300,000 tons of dust, and traveled up to 100 miles per hour. This weather didn’t just affect the land: Farm animals choked on dust and suffocated. At least 7,000 people died from “dust pneumonia” as a result of breathing in the fine particulates, and countless more were driven from their homes and livelihoods by the endless, swirling dirt.

Let us hope that we don’t see anything like that any time soon, but scientists are using the term “megadrought” to describe what the southwestern portion of the country is currently going through…

The western United States and parts of northern Mexico have been suffering through drought conditions on and off since the year 2000 – and unfortunately it may not let up any time soon. A new study has examined extreme droughts in the region dating back 1,200 years, and found that the current conditions have the makings of a “megadrought” that could last decades.

In fact, the lead author of that study is actually telling us that the current drought is “on the same trajectory as the worst prehistoric droughts”…

“We now have enough observations of current drought and tree-ring records of past drought to say that we’re on the same trajectory as the worst prehistoric droughts,” said study lead author A. Park Williams, a bioclimatologist at Columbia University, in a statement. This is “a drought bigger than what modern society has seen.”

Ultimately, the experts don’t know how long this new “megadrought” will last.

It could theoretically end next year, or it could persist for the foreseeable future.

But if it continues to intensify, it is going to become increasingly difficult for farmers and ranchers to make a living in the affected areas.

In addition, supplies of fresh water are going to become increasingly stressed.  The once mighty Colorado River is now so overused that it doesn’t even run all the way to the ocean anymore, and experts are deeply concerned about the future of the river.

In the end, this “megadrought” may force dramatic changes in cities all over the region.  Sadly, things have already gotten so bad that you can see the impact of the drought “everywhere”…

“You see impacts everywhere, in snowpacks, reservoir levels, agriculture, groundwater and tree mortality,” said co-author Benjamin Cook, of Columbia University’s Lamont Doherty Earth Observatory. “Droughts are these amazingly disruptive events. Water sits at the foundation of everything.”

Those that have been following my work for many years know that I have been watching developments in the southwestern quadrant of the country for many years, and things have really started to escalate here in 2020.

What a crazy year this has been.  We are still dealing with a global pandemic, 58 million Americans have filed for unemployment over the past 23 weeks, civil unrest continues to rage in our major cities and major politicians are being chased down the street, and this month we have been hit by one natural disaster after another.

Now a presidential election is rapidly approaching, and many people believe that what we have experienced so far is just the beginning of our problems.

Without a doubt, our world seems to be going absolutely nuts, and that should deeply alarm all of us.

Authored by MN Gordon via EconomicPrism.com,

In 1976, economist Herbert Stein, father of Ben Stein, the economics professor in Ferris Bueller’s Day Off, observed that U.S. government debt was on an unsustainable trajectory.  He, thus, established Stein’s Law:

“If something cannot go on forever, it will stop.”

Stein may have been right in theory.  Yet the unsustainable trend of U.S. government debt outlasted his life.  Herbert Stein died in 1999, several decades before the crackup.  Those reading this may not be so lucky.

Sometimes the end of the world comes and goes, while some of us are still here.  We believe our present episode of debt, deficits, and state sponsored economic destruction, is one of these times..

We’ll have more on this in just a moment.  But first, let’s peer back several hundred years.  There we find context, edification, and instruction.

In 1696, William Whiston, a protégé of Isaac Newton, wrote a book.  It had the grandiose title, “A New Theory of the Earth from its Original to the Consummation of all Things.”  In it he proclaimed, among other things, that the global flood of Noah had been caused by a comet.

Mr. Whiston took his book very serious.  The good people of London took it very serious too.  Perhaps it was Whiston’s conviction.  Or his great fear of comets.  But, for whatever reason, it never occurred to Londoners that he was a Category 5 quack.

Like Neil Ferguson, and his mathematical biology cohorts at Imperial College, London, Whiston’s research filled a void.  Much like today’s epidemiological models, the science was bunk.  Nonetheless, the results supplied prophecies of the apocalypse to meet a growing demand.

It was just a matter of time before Whiston’s research would cause trouble…

Judgement Day

In 1736, William Whiston crunched some data and made some calculations.  He projected these calculations out and saw the future.  And what he witnessed scared him mad.

He barked.  He ranted.  He foamed at the mouth to anyone who would listen.  Pretty soon he’d stirred up his neighbors with a prophecy that the world would be destroyed on October 13th of that year when a comet would collide with the earth.

Jonathan Swift, in his work, “A True and Faithful Narrative of What Passed in London on a Rumour of the Day of Judgment,” quoted Whiston:

“Friends and fellow-citizens, all speculative science is at an end: the period of all things is at hand; on Friday next this world shall be no more.  Put not your confidence in me, brethren; for tomorrow morning, five minutes after five, the truth will be evident; in that instant the comet shall appear, of which I have heretofore warned you.  As ye have heard, believe.  Go hence, and prepare your wives, your families, and friends, for the universal change.”

Clergymen assembled to offer prayers.  Churches filled to capacity.  Rich and paupers alike feared their judgement.  Lawyers worried about their fate.  Judges were relieved they were no longer lawyers.  Teetotalers got smashed.  Drunks got sober.  Bankers forgave their debtors.  Criminals, to be executed, expressed joy.

The wealthy gave their money to beggars.  Beggars gave it back to the wealthy.  Several rich and powerful gave large donations to the church; no doubt, reserving first class tickets to heaven.  Many ladies confessed to their husbands that one or more of their children were bastards.  Husbands married their mistresses.  And on and on…

The Archbishop of Canterbury, William Wake, had to officially deny this prediction to ease the public consternation.  But it did little good.  Crowds gathered at Islington, Hampstead, and the surrounding fields, to witness the destruction of London, which was deemed the “beginning of the end.”

Then, just like Whiston said, a comet appeared.  Prayers were made.  Deathbed confessions were shared.  And at the moment of maximum fear, something remarkable happened: the world didn’t end.

The comet did not collide with earth.  It was merely a near miss.

In The Long Run We Are All Alive

The experience of Whiston, and his pseudoscience prophecy, shows that predictions of the end of the world come and go while people still remain.  Sometimes the fallout of these predictions, and the foolishness they provoke, is limited.  Other times the foolishness they provoke leads to catastrophe. 

Here’s what we mean…

“In the long run we are all dead,” said 20th Century economist and Fabian socialist, John Maynard Keynes.  This was Keynes rationale for why governments should borrow from the future to fund economic growth today.

Of course, politicians love an academic theory that gives them cover to intervene in the economy.  This is especially so when it justifies spending other people’s money to buy votes.  Keynesian economics, and in particular, counter-cyclical stimulus, does just that.

U.S. politicians have attempted to borrow and spend the nation to prosperity for the last 80 years.  Over the past decade, the Federal Reserve has aggressively printed money to fund Washington’s epic borrowing binge.  Just yesterday, for example, Fed Chair Jay Powell confirmed that the Fed will pursue policies of dollar destruction to, somehow, print new jobs.

The world as it was once known – where a dollar was as good as gold – has come and gone.  Today, in life after the end of that world, we are witnessing the illusion of wealth, erected by four generations of borrowing and spending, crumble before our eyes.

Moreover, contrary to Keynes, in the long run we are not all dead.  In fact, in the long run we are all very much alive.  And we are all living with the compounding consequences of shortsighted economic policies.

Summary:

• UK health minister warns about lockdowns
• Indonesia sees record numbers for 3rd day
• US cases climb DoD on Friday
• California imposes new restrictions on evictions
• Victoria reports fewest new cases since July 4
• India’s new cases slow slightly from record pace

* * *

Coronavirus cases climbed in both Europe – where France reported a new post-lockdown record of new cases – and the US yesterday, prompting renewed fears of a second wave. Police in Berlin broke up a march against Germany’s coronavirus restrictions on Saturday because the thousands of demonstrators mostly refused to wear masks and adhere to social distancing rules.

After French President Emmanuel Macron said yesterday that while he doesn’t want to impose new lockdown restrictions, he would if he felt there was no better alternative, UK Health Secretary Matt Hancock warned in an interview that Britons may face “very extensive” local lockdowns should a feared second wave emerge in the winter.

Hancock added that he’s operating under the assumption that a vaccine will be widely available “some time next year”. Until then, the government will have to rely on three “lines of defense” to stop the spread of the coronavirus: social distancing, testing and tracing and local lockdowns.

Meanwhile, the US added 47,860 virus cases Friday, bringing the total to 5,913,913, as more cases were reported at schools around the country. As President Trump demanded that college football return ASAP, the University of Alabama, a football powerhouse, reported more than 1,000 cases since classes began.

With California on the cusp of becoming the first US state to pass the 700,000 confirmed cases mark, Gov Gavin Newsom said late Friday that the state would impose new rules protecting small business owners from eviction.

Landlords in the state won’t be allowed to evict renters before Jan. 31, 2021, at the earliest, as long as partial payments and certain declarations are made. Meanwhile, landlords will be protected from foreclosure by the banks (though we suspect Wells Fargo will still find a way).

Earlier in the day, Newsom unveiled new economic guidance that will allow industries and counties more flexibility around reopening.

Victoria, the epicenter of the pandemic in Australia, reported 94 new infections for Friday, its lowest reading since July 4, as the outbreak in the region finally abates.

The state’s health department also reported Saturday via Twitter that there were 18 deaths from the disease. The second-largest state has been under strict lockdown restrictions to combat the virus, and the central bank estimates the effective isolation is set to push the national unemployment rate up to 10% later this year.

The country’s largest state, New South Wales, reported 14 new cases, eight of which were linked to an emerging cluster centered on a Sydney gym.

While cases in the US climbed on Friday, Brazil saw case numbers continue to decline. Brazil reported 43,412 cases, fewer than the 44,235 from the prior day, for a total of 3,804,804. Another 855 deaths were reported, a drop from the 984 reported the day before. Brazil’s death toll has now reached 119,504.

For the third straight day, Indonesia on Saturday reported a record jump in new coronavirus infections, with 3,308 new cases taking Indonesia’s tally of infections to 169,195, while 92 new deaths pushed its death toll to 7,261.

After notching a string of its own records, including the most new cases reported in a single-day by any country on earth, India reported 76,472 new coronavirus cases on Saturday, slightly below its record numbers from the past couple of days.

In Nearby Malaysia, the government extended its pandemic-inspired restrictions, including a ban on foreign tourists, until the end of the year.

India has reported a total of 3.46 million cases during the pandemic, a tally that places it behind the US and Brazil in terms of total cases. However, India has reported more cases over the past 2 weeks than both the US and Brazil, making its outbreak the worst active outbreak in the world.

A couple of days ago, we reported that conservative attorney Lin Wood has taken on the case of Kenosha shooter Kyle Rittenhouse, the 17-year-old who has been hit with 6 charges stemming from a Tuesday night bloodbath where he shot three men, killing two, during a night of chaos, anarchy and looting.

As the lawyer goes about shaping and implementing his legal strategy, Wood told reporters that he plans to argue his client acted in self-defense during the fatal shootings.

Wood, who is based in Atlanta but will be arguing the case in Wisconsin, where his client is set to be extradited, told reporters that video footage of the altercation would vindicate Rittenhouse. He also slammed the mainstream media for spreading “misinformation” about his client.

“Kyle Rittenhouse acted in self-defense. Murder charges are factually unsupportable. An egregious miscarriage of justice is occurring with respect to this 17-year old boy,” Wood said on Twitter.

An Illinois judge on Friday postponed Rittenhouse’s extradition to Wisconsin so the 17-year-old defendant and his family could arrange for a private legal team. He didn’t appear during Friday’s virtual bond hearing, where it was decided he would be held without bond.

As Reuters pointed out, the criminal complaint filed against Rittenhouse cites as evidence several videos recorded by witnesses, including one where Rittenhouse can be heard calling a friend and telling them “I just killed somebody”.

Coincidentally, Rittenhouse spoke to a reporter earlier in the evening and said he was there to help keep the peace, and that he had brought a medical kit, along with his AR-15, just in case.

Wood won notoriety for his work representing Covington Catholic student Nick Sandmann in his battle to seek compensation from the mainstream media outlets, including WaPo and CNN, that he argued defamed him.

Though he isn’t a criminal defense lawyer, Wood has helped assemble a pro bono legal defense for Rittenhouse.

Ayanna Pressley just got condemned to the World of the Blocked. She is no Elvis. And I am not a criminal defense lawyer but I am going to see what I can do tomorrow to help Kyle Rittenhouse. If a private defense lawyer steps up to defend him, please notify me of his or her name. https://t.co/I6IVnKZ6JT

— Lin Wood (@LLinWood) August 27, 2020

I will be speaking with Attorney John Pierce later today about Kyle Rittenhouse. John has taken lead in helping form #FightBack Foundation.

To help or provide information about Kyle, please contact John Pierce at jpierce@piercebainbridge.com or @CaliKidJMP.

Enough is enough.

— Lin Wood (@LLinWood) August 27, 2020

Michelle Malkin @michellemalkin is also assisting so please DM Michelle also.

This young man needs & deserves courageous legal counsel who will fight for him. John is ready to do so & others will join him. The fight is for Kyle and for ALL Freedom Loving Americans.#FightBack

— Lin Wood (@LLinWood) August 27, 2020

Pierce has confirmed to other media outlets that he will be working on Rittenhouse’s defense. He has also represented former Trump campaign aide Carter Page and Rudy Giuliani.

“I and my colleagues at Pierce Bainbridge are representing Kyle Rittenhouse,” Pierce said in a statement. “We will obtain justice for Kyle.”

Many in the conservative media world have already speculated that Rittenhouse acted in self defense.

 

In what appears a case of epic trolling by a local New Jersey police department (or more seriously a severe violation of 1st Amendment rights), a teen organizer behind a Black Lives Matters rally was billed by local police for $2,500 for their overtime pay. 

In the town of Englewood Cliffs, which sits across the river from Upper Manhattan, an eighteen-year old girl and recent high school graduate named Emily Gil organized a protest on July 25. It turns out to have been relatively small and peaceful, with a mere 30 to 40 people gathered in front of the town’s administration offices on a single day.

The town says she was supposed to submit advanced proper notification about the event, but failed to.

“Please promptly forward your payment to the borough in the amount of $2,499.26 for the police overtime caused by your protest,” Englewood Cliffs Mayor Mario M. Kranjac subsequently demanded in a letter following the protest.

“Your lack of notification left the borough with little time to prepare for your protest so that the police department and department of public works could ensure that everyone would be safe,” the letter adds.

The town’s police chief also backed the action, saying his department was forced to make extensive last-minute preparations, including arranging overtime pay for police at the protest. It appears they were ready to handle the type of mayhem or possible rioting that has accompanied the much bigger BLM and Antifa protests and riots that have been part of many other demonstrations in major cities through early summer. 

The current media attention has caused some town council members to openly condemn the city action, while the American Civil Liberties Union of New Jersey has condemned slammed the fine as unconstitutional, stating, “the idea of sending a bill to protesters is shocking.”

Meanwhile Englewood Cliffs police are claiming the teen’s freedom of speech and assembly rights were fully upheld, while classifying the protest gathering as a “privately-sponsored event… requiring police safety”.

Authored by Bill Blain via MorningPorridge.com,

“London calling to the Zombies of death, quit holding out and draw another breath”

Let’s talk about the Working from Home revolution – and what it might mean for markets and finance.

The City of London is the Capital of Global Finance. Together with satellites in the West End and Canary Wharf, Finance and The City employs some 500,000 of the highest paid workers in the UK, paying over £100 bln in taxes (business and personal) each year. There is more shiny bright new office space visible from our office windows in the Walkie Talkie, (which I bet still haven’t been cleaned since I last looked out of them in March), than you can shake a sharp pointy stick at.

The pandemic may be easing, but the City is still a Ghost Town. Tumbleweed blows down the streets. Lowest common denominator junk food vendor Greggs is about the only place open. (Seriously, their steak slices are to die for.) I’ve not been up myself, but She-who-is-Mrs-Blain was pretty shocked. 

The news JP Morgan and the magic circle Law Firm Linklaters are ending the daily commute and telling staff to telework from work and in the office actually confirms the massive changes underway in how we work in global finance will be fairly limited. Staff will still be expected to come into the office regularly. Other firms, including Schroders, report work-from-home (WFH) has been a stunning success – with their business flourishing – they say. However, I’m told “freedom” for staff to WFH will be at their managers discretion. 

On the other hand, a chum who runs an office-logistics firm tells me they are busy as London trading floors are being converted into flexible workspace while rows of desks are being consumed by new meeting rooms. 

Although we hit peak WFH months ago, less than 35% of British office workers have returned to work. That compares to 83% of French employees de bureau. Personally, I suspect the main reason keeping staff from returning to their London offices is the misery of commuting. If WFJ works… then why take COVID risks on London’s dirty, filthy, unreliable and massively overcrowded rail and tube networks? When I go back to London I will relying on my Brompton bike for in-town travel. 

However, I suspect the Pandemic will act as a catalyst to accelerate changes in Finance – which are going to have some long-term fairly unsettling effects on a large portion of the workforce. I expect the “accelerant” effect of COVID in changing/shaking industry and commerce will prove its most lasting bequest to us all. 

Therefore, I award myself a “No Sh*t Sherlock”prize for realising the City is going to be massively changed by the Pandemic. We’ve seen predictions about the end of the modern office but its only now we’re beginning to see facts emerge. For instance, JP Morgan will be closing their Basinggrad office (Basingstoke to those of you who don’t commute) because they now know WFH makes recovery sites redundant. 

Like most things in finance, the hyperbole and dystopian outlook of a permanently empty City is overblown. There will be changes, but it won’t be the end of everything. Over the last few days I’ve been asking clients and market contacts what they think the future holds for the Financial Industry, Teleworking, the Office and how Investments and the Market will be impacted by the coming evolution of the financial sector. 

Let’s start with working from home. 

Teleworking has pros and cons. It tends to be generational. Younger workers stuck in small London flats quickly went crazy and couldn’t wait to get back to work. Older workers have convinced themselves they’re working hard while finding time to go for long walks and do the garden. 

When lockdown began there were serious regulatory concerns about how financial business could be conducted from home rather than controlled city locations. The head of one of the UK’s most important and influential institutions told me he’d been very concerned about trades being done in “another person’s shed” rather than the office, but that “after my hand was forced, I have to admit it’s worked rather well.” The same chap notes nothing will replace the “City Lunch” or the chance meeting as the sparks where business and ideas germinate. 

I’ve written a few times about missing my “broker ear”, the ability to listen in to office conversations to sense what was occurring in the market, but to be honest, that was more 1980s-2010s. Since then offices have become far less energetic, and the language which conveyed the emotion of markets has been sensitised. I can learn what I need on calls.

On the other hand, humans are evolved social creatures. We thrive in company. We aren’t so good in solitary – which is why it’s a punishment. We need social impetus – the stimulus of discussions and arguments sparking ideas on the desk, driving the creativity and problem-solving that’s made the UK financial services sector such a success. No one is taught how to be a City financier – you learn through a process of osmosis in the office – “it can’t be learnt in half-hour Zoom calls”, said a client.

We also need threat – the knowledge that underperformance could cost us our jobs, and that younger staff want our salaries and to sit in our seats. If there is no sense of threat, people work less hard – fact. (That’s why bureaucracies ultimately kill economies.) I would argue competition with colleagues is the biggest driver of success in finance. Another client pointed out: “firms that pair back on analyst and associate programmes see a noticeable decline in output.” Fear of obsolescence and burn-out is a vital component of success. 

Competition is also evident at firm level where the speed at which staff are returning to the office is a function of moral and the character of individual firms. It’s a form of resilience. I hear that over 50% of Goldman Sachs were back in the office the moment the doors opened –  The Vampyre Squid is feeding them and offering free child-care. Smart. I reckon if we could chart returnees for each bank it would correlate directly with how successful the bank is perceived to be. (Please don’t tell me Deutsche Bank is already back in situ?)

At the other end of the scale, trying to get hold of a retail bank staff at high-street banks is still impossible – they were demotivated and bored before the crisis, and it’s just got even less interesting for them. If they can say they are anxious and stay at home, why wouldn’t they? I am so peeved with my bank making excuses blaming the virus as explaining why no one could help me chase missing money. 

Then there is the importance of being present in an office. When it comes to awarding important new business, or investing in a fund, the principals are under a duty of care, which using includes “onsite due diligence” – meaning having a swanky office at a top City or Mayfair address that looks busy is still important. 

WFH vs Office is bound to raise work-life balance questions. A senior European fund manager in London told me his younger European staff are seriously considering moving home – not because of Brexit, but because the whole point of being in London is because its so much more exciting than Frankfurt, Milan, Madrid or Paris. If it’s not, and London’s cultural menu is effectively zero at present, then working in Munchen – where a 10 min cycle gets you to a beer garden in the countryside – feels much more attractive. 

On balance, WFH works, but isn’t ideal. I suspect we will all move towards an office/home mix. That will be determined through experimentation and common sense. My own intention is certainly to get back in the office regularly, and to resume face-to-face client meetings as soon as possible. (Meanwhile, you can see watch my videos on https://morningporridge.com/videoif you are missing my face!)

Technical issues reopening buildings

There are good reasons why more City staff haven’t yet returned. Technical problems about distancing have to be resolved before offices can reopen. Many clients tell me they have been unable to return to their offices because building owners haven’t figured out how to ramp up the air conditioning to cope with the number of people and new recommendations on ventilation, or how to get people to their working floors when lifts can only carry 3 passengers at a time. Its physically impossible to get 600 people onto a trading floor at 7.30 am when only 4 lifts service the floor. 

The reality is London’s office towers were designed for a normal business environment. If the pandemic really means we have to keep social distancing and restrict numbers – then they just don’t work anymore. We will need a vaccine, or the bravery to agree the virus risks are manageable, the disease treatable, before we reopen them fully. Tower Block Offices don’t lend themselves to compromises. The future of the tower block office depends on what the post-Covid analysis says about the efficacy of lockdowns and distancing.

It’s clear there will be an impact on office demand. A senior banker told me he expects to cut the number of desks by 1/3rdand institute a hot-desk policy for rotating staff each day. If that’s replicated across the City, then demand for office space drops at least 1/3rd. 

Perhaps the biggest loser is WeWork – they would have taken a thumping from cancelled desks at the start of Lockdown, but could have been marvellously positioned to reap rewards as small and mid-sized firms actually give up on offices completely. Perhaps it’s a business idea to think about: “WeWork2: this time we’re serious…” 

The knock-on effects…

The services the City demands are massive. It’s not just shops and catering, but also supports such as travel. Bankers are not travelling to meet clients. Boards are doing meetings by Zoom. Conferences and Events have been cancelled. At least one senior city figure is delighted – “It all saves on the bottom line, and these fripperies never added to the bottom line. We did corporate hostility because everyone else did it.”

While losing the expertise of “event-managers” is unlikely to kill the City, the potential loss of skilled deal facilitators who become sidelined, like lawyers, accountants, media-advisors and digital IT geeks could prove highly significant. If they stay away in droves, choose to go elsewhere, or simply aren’t trained.. then London’s financial sector will be in serious crisis. 

And then there are the cost implications. Large firms have the reserves to maintain their half-full trophy offices, but smaller firms being battered by the effects of the pandemic are going to struggle – leading to an inevitable glut of property as they fold or exit. The pandemic is culling smaller firms – which is a serious loss of future genetic diversity for the City.  

The actual financial impact of WFH is going to be felt hardest in the Insurance Real Money sector – these firms have become the largest owners and funders of commercial property, although I’m hearing Chinese banks are going to take a serious bath as well. Landlords are doing rent deals because it’s better to have a tenanted office than an empty one! As they say: “The best tenant is the current tenant!” Expectations of high returns on prestige City Tower Blocks have tumbled. The effect is going to be most visible on UK pension and insurance companies performance – which means on the retirement savings of the workforce..

.. will change the Financial Industry

As I wrote earlier the Pandemic and teleworking are just accelerating trends that were already underway in finance. 

The strengths of financial experience and creativity that led the boom in financial services has been under the regulatory cosh for the last 15 years.  Don’t kid yourselves, but being a fund manager today isn’t the era of financial buccaneer spirit I encountered in the 1980s. Today, most City jobs are largely about box-ticking, regulatory oversight, and compliance – and the objective is to not be beaten by dumb indices. QE Infinity and ZIRP have dulled the game. 

The fact most firms have apparently done well during lockdown could well expose a brutal truth:

 “their basic worthlessness has been exposed by forced absenteeism without any consequence to the bottom line”, a fund manager told me.  

Ouch.

It’s likely to get worse. We’ve known for years that automation and AI is going to eat into middle class professions. Bond salesmen are pretty much already dinosaurs in a market where the big funds have to buy everything anyway, and AI determines portfolio compositions to beat the indexes. Jobs are going to go – meaning the ecosystem of the City is going to contract. Even writers of financial commentary…. I can’t be replicated (!) but if no one is left to read me, I am equally redundant! (Perhaps I shall start to write the porridge in binary to make it easy for investment-bots?) 

Using the cover of cost savings due to the pandemic, I expect to see at least 10% of City Staff culled by the end of the year. The numbers being let go will keep rising next year. That’s a serious disincentive to new joiners, and the energy levels of the City will drop accordingly.

And then there is the effect of the Pandemic stifling innovation. Let’s assume you just had a brilliant idea that’s going to make Finance exciting, renumerative and deliver excellent above market returns, but you current employer can’t do it because “it’s not in mandate”, “compliance say no”, or “we are concerned about ESG/Mifid/SEC (delete where applicable)”. Your chances of funding and launching that brilliant idea aren’t looking good. Instead the older City dinosaurs that were being kept alive by regulatory constipation, will retain their dominance because the efforts to contain the pandemic enables them to survive when Darwin says they perish!

And we need brilliant ideas, because the challenge to the City today is simple. We exist In a global financial marketplace where returns have been minimised and risks maximised by interest rate repression and QE Infinity – how do you generate meaningful returns to finance retirement and growth? 

Turkey’s Air Force F-16s have confronted Greek fighter jets over the eastern Mediterranean in what is perhaps the closest the two sides have come to an incident sparking war.

Military statements from both sides are revealing details of the incident which happened Thursday off the southwestern coast of Cyprus, and involved what The Times (UK) described as a mock “dog fight” in which the Greek fighters even called for more aerial reinforcements.

“Turkish and Greek fighter jets have engaged in a mock dogfight over the eastern Mediterranean, the second direct confrontation between the two Nato powers this month,” The Times writes. “Ankara sent F-16s to intercept six Greek jets as they returned from Cyprus — where they had been participating in war games — to their base in Crete.”

Subsequent Turkish cockpit video allegedly from the encounter appears to show that during the intercept a Turkish F-16 achieved radar lock on a Greek fighter, but did not fire.

Viral radar video published by Turkey’s Ministry of Defense on Friday shows the risky jet intercept. It garnered over a million views merely within the first few hours of release, showing how hot tensions are running among each side’s population:

27 Ağustos 2020 tarihinde Girit Adası’ndan kalkarak GKRY’ye doğru giden ve Navtex ilan edilen bölgeye yaklaşan Yunanistan’a ait 6 adet F-16 uçağı, Hava Kuvvetlerimize ait F-16 uçakları tarafından önleme yapılarak bölgeden uzaklaştırılmıştır.https://t.co/yntVao9lgz#MSB #TSK pic.twitter.com/9V46V3Gve7

— T.C. Millî Savunma Bakanlığı (@tcsavunma) August 28, 2020

Bloomberg also confirmed the dangerous incident as the two sides are increasingly backing their maritime claims with military power: “Turkish F-16s blocked six Greek jets from flying over a maritime area designated as off limits by Turkish navtex, or navigational telex, according to a statement by Turkey’s Defense Ministry.”

This week the UAE also jumped in, as France and Italy have already joined Cyprus and Greece in joint war games, at a time Turkey is also about to hold its own ‘live fire’ exercises in the area. 

Amid ongoing tensions in the eastern Mediterranean Turkey says its US supplied F-16 fighter jets intercepted Greece’s US-supplied F-16 fighter jets off the coast of Cyprus https://t.co/7TN7RoazyJ

— Ryan Browne (@rabrowne75) August 28, 2020

At least four UAE fighter jets have been reported dispatched to Crete to hold joint operations with the Hellenic Air Force.

Recall that the allies are also standing against Turkey inside Libya, where Turkey’s military has propped up the Tripoli government, but alternately the UAE has firmly backed rival Gen. Khalifa Haftar.

Authored by Finian Cunningham via The Strategic Culture Foundation,

Britain’s Prime Minister Boris Johnson is the latest Western leader to wildly jump on the bandwagon claiming that Russian opposition figure Alexei Navalny was poisoned, and by implication insinuating the Kremlin had a sinister hand in it.

“The poisoning of Alexei Navalny shocked the world,” asserted Johnson on Twitter, who went on to call for a “transparent investigation” to find the perpetrators. The British premier didn’t explicitly finger the Russian authorities, but that was what he implied.

It’s amazing how Boris Johnson, wracked by the political disaster of his sheer incompetent mishandling of the coronavirus pandemic in Britain, somehow has the time and “authority” to poke into Russian affairs.

Johnson’s rush to judgement replicates other Western leaders who have concluded without any evidence that Navalny was poisoned in a malicious way. U.S. Secretary of State Mike Pompeo has said he backs the European Union’s call for a comprehensive investigation. Germany Chancellor Angela Merkel not only referred to Navalny’s condition as “poisoning” but also a “crime”.

Boris Johnson’s intervention is reminiscent of how he accused the Kremlin of poisoning former MI6 spy Sergei Skripal in March 2018 within days of that incident. Johnson was then the UK’s foreign minister. What actually happened to Skripal and his daughter Yulia in the English city of Salisbury remains a mystery since the pair have not been seen or heard of since. Presumably, they are in the custody of the British authorities, who have denied all international norms by not allowing Russia consular access to at least one of its citizens.

As with the Skripal case, the reflexive response among Western governments and media is to accuse Russian authorities of malign involvement in the case of Navalny. Demanding an investigation by the Russian government indicates a high-handed presumption to interfere in Russian internal affairs. It also indicates a Western prejudice to criminalize Moscow over any incident.

As soon as Navalny was hospitalized after apparently being taken ill during a flight last week from the Siberian city of Tomsk to Moscow, Western media headlines immediately inferred it was the result of sinister play. “Putin critic” was ubiquitous in headlines, as were unfounded claims of “poisoning” from drinking tea. (Russian trope alert.)

The Russian doctors who treated Navalny said there was no evidence of poisonous substance found in his body. They said his seizure may have been caused by a fatal drop in blood sugar levels. He is reportedly diabetic. So, from what we can tell, the Russian doctors appear to have saved Navalny’s life by their rapid response, but they were unable to make a precise diagnosis. What then merits Western demands for an investigation by the Russian authorities?

Here is the strange twist in the story.

Two days after being treated in Russia, Navalny is airlifted on Saturday, August 22, by a private jet to a hospital in Germany, where he continues to reside, reportedly in a coma, which is not life-threatening. The doctors in the Charité hospital in Berlin release a vague statement claiming that it is “likely” he has been “poisoned”. They cite the presence of “cholinesterase inhibitors” in his body as evidence of “poisoning”.

The Russian medics were also aware of “cholinesterase inhibitors” being present and were treating Navalny with atropine, a known antidote. But as the Russians point out, cholinesterase inhibitors are widely found in a variety of clinical pharmaceuticals as well as more sinister substances, such as nerve agents. By merely detecting the presence of cholinesterase inhibitors and while not detecting any specific chemical that then does not permit a conclusion of “poisoning”, which the Russian doctors refrained from.

Therefore, what we have is a hasty assessment by the German doctors who make a dramatic conclusion, which the Russian counterparts do not, even though both teams were working on the same clinical sample information. Surely, that is unprofessional and unethical on the part of the German medics.

It would appear that the doctors at the Berlin hospital share the same mental condition as Boris Johnson, Angela Merkel and Mike Pompeo. That is, a condition of condemning Russia before any evidence is in. Then let the media pile on the propaganda tropes and “history” of “assassinations” by “Kremlin poisoning”

The curious question is: why did the Russia authorities permit the private transport of a Russian citizen out of the country at a time when he was in a serious medical condition? Was the Russian government unnerved by the media accusations of foul play against a dissident figure who has been lionized by the West as some kind of political hero? Did they feel the need to be excessively “open”?

Alexei Navalny, despite his high-profile among Western media, is a minor figure in Russian politics. His so-called anti-corruption campaigns have negligible interest for most ordinary Russian citizens, and minimal political impact for the Russian government. In short, Navalny is a professional gadfly whose importance is blown out of all proportion to its reality by Western media. There is nothing to gain for the Russian authorities in causing injury to this person, assuming that such a malicious event might even be considered.

That may well explain why Russian officials assented to Navalny being airlifted to Berlin, knowing full well that his medical condition was not caused by anything pertaining to deliberate, sinister action. Still, that decision by the Russians seems an odd concession over a matter of sovereignty. It’s doubtful that the Americans, British, Germans or others would have followed a similar course for one of their citizens being take abroad, especially one who could be exploited for propaganda value.

Surely, Moscow did not underestimate the mentality of Russophobia which Western politicians suffer from? The cardinal rule is never give hostages to fortune when dealing with buffoons like Britain’s Boris Johnson. It looks like Navalny is now one such hostage to anti-Russian fortune.

Almost $6 million in cocaine was discovered by British authorities at Gatwick Airport, near London, this month. According to the UK’s National Crime Agency, three separate seizures were made, with the first occurring on August 11.

The incoming flights were all from Jamaica. On the first flight, about 22 kilos of the drug were found “in a consignment of vegetables that had come off a flight from Kingston,” according to the agency. 

A second seizure was made from the same flight one week later on August 18, this time carrying 30 kilos of cocaine.

Finally, a third seizure was made on August 25, again on a flight from Kingston. The cocaine on the third flight amounted to about 3 kilos and was “suspended in a liquid solution”. 

NCA Branch Commander Mark McCormack commented: “Working with our colleagues at Border Force we are determined to do all we can to stop class A drugs reaching the streets of the UK, where they can cause so much damage. These seizures are an example of that in action, and our investigations are ongoing.

Tim Kingsberry, regional director for Border Force South, said: “Through the diligence and hard work of Border Force officers, we have prevented millions of pounds of cocaine from reaching Britain’s streets. I hope this detection sends a clear message to anyone who thinks they can smuggle dangerous drugs into the UK. We will find and confiscate these items and we will bring you to justice.”

NCA officers have launched investigations after three separate seizures of cocaine at Gatwick Airport.

The first haul was was found as Border Force officers carried out checks on incoming freight from Jamaica. @ukhomeoffice

Read more ➡️ https://t.co/L7GYIwAqdI pic.twitter.com/wgagLpD5EL

— National Crime Agency (NCA) (@NCA_UK) August 25, 2020