Month: March 2020

Blain’s Morning Porridge, submitted by Bill Blain

“I think this is serious in the sense that we can’t afford not to consider it as a serious threat.”

My Colleague James starts the day with a question: “Can a Cat with Coronavirus Bounce?”  We shall find out shortly. Everyone expects coordinated action and support… Buying boots on?? Your call. I’d wait a bit. 

Here’s my big tip for March 2020. This is likely to get worse, much much worse, BUT… buy banks on the dips and whenever they look cheap. I’m thinking not just the stock of the big dividend payers, but also the debt of the more questionable names with a bit of yield. I’m even thinking: Buy Cocos – the Tier 1 hybrid contingent capital monstrosities that combine all the downside of debt, and none of the equity upside. Why bullish on Banks? I’m not, but I’m pretty certain global authorities will do anything to avoid the Coronavirus morphing into financial catastrophe. 

The last thing the authorities will countenance is any uncertainty around the likelihood a bank might be forced to trigger its CoCo debt. I’d even say bonds issued by the Worst Bank in the World – Deutsche Bank, might be worth a punt. That is a really difficult thing to write – I feel dirty just thinking it because it just feels so wrong – but it’s a call arrived at after calm and rational consideration of where the Coronavirus crisis goes next. 

This morning the Bank of Japan pretty much said it would do “whatever it takes” to support markets and support liquidity. Gold star to me. I predicted they would: every other central bank will do the same. There are rumours the Fed could act as early as this week with a rate cut. Trump is gunning for them to act.  

BTW: This morning’s headline quote is from Lunch with the FT with Peter Piot; Ebola co-discoverer Peter Piot on how to respond to the coronavirus, he is the director of the London School of Hygiene and Tropical Medicine. He expects a pandemic.  

Thus far I think I’ve called this crisis pretty well. Back on Jan 20th I warned how a Meltup to Meltdown could happen quickly, before suggesting the virus could trigger it a few days later. (All the blogs are there on www.morningporridge.com.)   Since then we’ve watched it escalate into a market event, despite the initial stock market indifference followed by a realisation of the economic damage, to the stage the markets are in reactive panic mode. But, unlike any other market shocker I’ve experienced, this one is a slow, grinding slow motion car crash of entirely predictable consequences. We don’t know where this goes, but we can make informed decisions.

The questions for investors are legion, but it’s possible to figure out a likely crisis roadmap round the following questions:

• How effective will global central banks and regulators prove as they try to buoy markets through relaxing lending requirements, rate cuts, renewed Asset Purchase Programmes (QE), and even direct equity purchases? 

• How long-term will the damage to the global economy be from busted supply chains? The problem could be stay-at-home workers as much as anything else.

• How much will corporate balance sheets be compromised by lost income? How is that likely to damage sentiment, impact investment, and create job losses? Can these be avoided?

• How will the authorities pump liquidity direct to corporates – through bank lending forgiveness, extensions, etc? 

• If the virus becomes entrenched, how irrelevant will markets be when TV footage of hospitals in crisis dominates the agenda?

Where is this likely to go?

My own guess is that we aren’t yet ready for the likely social and market implications of a full blown pandemic. From reading over the weekend, it would appear 15-20% of cases turn serious, and of these, 20% require acute hospital care, including ventilating patients suffering deep-lung pneumonia. That’s 4% of patients. Yesterday, on the Andrew Marr show, the UK health minister stated the NHS has been able to make 500 acute beds capable of ventilating patients available. If 1 million Brits are affected, they will potentially need 40,000 beds. I understand the worst case scenario the govt is looking at is for 80% of the population, 45 million people, to become infected. Do the maths. 

My conclusion is simple. If this becomes a Pandemic, there is likely to be a massive hospital and associated health crisis. The NHS will be forced to stop all other treatment to focus on the flu. As I can attest from a hospital appointment on Friday, the NHS is creaking at the seems at the best of times. If it happens, markets will be forced to react, and it won’t be a priority for global governments.   

Meanwhile, back in Britain

Is the news Boris Johnson and his partner are to wed, and produce his unknownth child, supposed to generate a feel good for the UK economy? Boris and his squeeze are not Will and Kate. They aren’t even the latest desperately fondling Z-Listers from Love Island. He’s supposed to be our prime minister – guiding us through pestilence, plague and market meltdowns… Except, he’s not. The new government looks to be degenerating into a circus of political assassinations, blundering incompetence, self-entitled preening, and disruption for the sake of it.

And I voted for them…??? Was that a mistake? The alternative wasn’t great but neither is this.

A few years ago a government whip, Andrew Mitchell, was forced to resign after insulting a policeman by calling him a Pleb. Many people didn’t realise what the root of the insult told us about his mindset – a high class Tory Patrician who perceived himself entitled to rule, exercising his divine right to browbeat mere Plebeian servant. He may have forgotten the plebs also had the vote and elected officials. Quite properly he was slung out.

That was in another age. Today, politicians can get away with anything. The case against the home secretary, Pritti Patel, bears parallels. She has been accused of bullying her staff and conducting a media briefing campaign against her senior civil servant. He’s resigned, was offered a deal to stay quiet, but wants his day in court. Senior cabinet politicians have immediately rallied around her, hailing her as someone “determined” to change the civil service. She is hailed as an effective “distruptor” – suiting the Dominic Cummings agenda perfectly. That she comes across to sceptics like me as a crass political opportunistic is apparently neither here nor there.

Senior civil servants don’t resign over minor tiffs. They resign on matters of principal. For every cabinet source expressing confidence in the minister, there are dozens of insiders telling the press just how awful, self-centred, entitled and out of control she was. If she is a bully she must be dealt with – what signal would it send if she is not? But of course, she won’t be. She will get away with it because… because Cummings and Johnson don’t recognise that creating noise and bluster is not the same as getting stuff done. Disruption for disruptions sake is pointless, especially when done with malice.  Check out Patel’s previous form – not good. Are these people you want in government?

And therein lies the problem. The key thing about any debt investment is that it be as “dull, boring and predictable” as possible. The UK fits the model. Over the past few days of crisis, Gilts and Sterling have proved something of a safe haven. We are perceived that way because of our political process and “strong and stable” government/administration. That’s in large part due to the civil service. Break it – and you break not only the country, but the perception of our global credit. 

As Chairman Mao (actually it Zhou-Enlai) is rumoured to have said, “its too early” to comment on the French revolution… Its not too early to comment on the unacceptable behavior of Boris’ gang and the damage it might do to the UK’s global prestige long-term. 

Having been permanently banned from Twitter for sharing the publicly-available details of the man who ran the show as far a bat-soup virology in Wuhan’s super-secret bio-lab – which is now a common talking point and rapidly shifting from conspiracy theory to conspiracy fact – we thought a reminder of how we got here was in order…

Scott Burke,  CEO of crypto-related firm Groundhog, unleashed what we feel may be the most complete timelines of facts to help understand the controversial links between COVID-19 and HIV, and COVID-19 and Wuhan Institute of Virology.

Want to go down a (strictly fact-based) rabbit hole?

Here is the full slightly-edited-for-formatting twitter thread…

A disclaimer: I am not a virologist. This is me synthesizing what we have learned since the outbreak began and reviewing public scientific papers. I believe each of the following statements is a solid fact, backed up by a citation. 

I also want to say that I understand some people are worried about blame being cast for this outbreak. Obviously we are all in this together, and my intention here is not to cast blame. These links overwhelmingly compel further scrutiny, but are not conclusive. 

I do think however that information is being downplayed and suppressed by some scientists and media outlets and it’s our duty to find out the facts about this virus, do what we can to mitigate the outbreak, and prevent it from happening again.

Ready?…

So there’s original SARS, which is a type of coronavirus. SARS infects cells through the ACE2 receptor in hosts. 

The S spike protein plays a key role in how the virus infects cells. Each of the little spikes that surround the coronavirus is a spike protein (or S protein). That’s what gives the coronavirus it’s name – it’s “crown” of these spikes.

The S protein binds to the targeted cell through the ACE2 receptor, and boom, your cell is infected and becomes a virus replication factory.

After the first SARS outbreak, there was a “land rush” to find other coronaviruses. A collection of SARS-*like* coronaviruses was isolated in several horseshoe bat species over 10 years ago, called SARS-like CoVs, or SL-CoVs. Not SARS exactly, but coronaviruses similar to SARS. 

In 2007, a team of researchers based in Wuhan, in conjunction with an Australian laboratory, conducted a study with SARS, a SARS-like coronavirus, and HIV-1.

The researchers noted that if small changes were made to the S protein, it broke how SARS-CoV worked – it could no longer go in via ACE2. So they inferred the S protein was critical to the SARS attack vector. 

They also predicted based on the S-ACE2 binding structure, that SARS-like CoVs were not able to use this same attack method (ACE2 mediation). 

They decided to create a pseudovirus where they essentially put a SARS-like CoV in a HIV envelope. 

It worked.

Using an HIV envelope, they replaced the RBD (receptor binding domain) of SL-CoV with that of SARS-CoV, and used it to successfully infect bats through ACE2 mediation. 

12 years goes by…

A SARS-like CoV begins sweeping the globe that is far more infectious than previous outbreaks. 

Ground Zero for this outbreak (not first human patient, but first spreading event) is considered to be Wuhan Seafood Market. 

Wuhan Seafood Market is 20 miles from the National Biosafety Laboratory at Wuhan Institute of Virology.

Amidst the outbreak, a team of Indian bioinformatics specialists at Delhi University released a paper pre-print…

COVID-19 has a unique sequence about 1,378 nucleotide base pairs long that is not found in related coronaviruses. They claimed to identify genetic similarities in this unique material between COVID-19 and HIV-1. 

Specifically, they isolated 4 short genetic sequences in key protein structures (the receptor binding domain, or RBD).

Two of the sequences were perfect matches (albeit, short), and two of the sequences were matched but each with an additional string of non-matching material appearing in the middle of the sequence.

The paper was criticized and numerous attempts have been made to debunk it. After the criticism, the authors voluntarily withdrew it, intending to revise it based on comments made about their technical approach and conclusions. 

One key debunking attempt claims this:

The same sequences are found in a variant called BetaCoV/bat/Yunnan/RaTG13/2013, which had been found “in the wild” in bats.

This is an attempt to prove that it was not engineered, but mutated naturally in the wild.

But there’s a problem…

This strain was only known by and studied at the Wuhan Virology Institute, and although they claim it was discovered in 2013, it wasn’t published or shared with the scientific community until immediately after the Indian paper, on January 27, 2020.

The RatG13 strain publication and the HIV research paper from 2008 share an author.

I discovered this on my own by comparing the two papers and then quickly realized this scientist’s contact information was the information that ZeroHedge was suspended from Twitter for sharing. 

Their article identifies this author in question including some contact information from the Wuhan Virology Institute web site. 

You can read the public comments and discussion of the original paper here:

There is a line of inquiry about how the sequences are remarkably stable in between the “bat” CoV and the nCoV, where in nature they would likely have mutated in between their shared evolution. Also a call for greater scientific evidence that the strain was collected in the wild.

Here is the only point in this thread where I will offer my opinion rather than a list of facts: In light of all the previous facts, the efforts to debunk the paper are not yet convincing in my view. 

The RaTG13 paper makes the claim that, oh, that HIV-related material you identified that happens to protein fold to become a perfect attack vector for nCoV to attack ACE2?

It’s a relative of this other secret virus which came from the wild which we forgot to tell the scientific community about until now for no reason.

Here’s the secret virus – it came from bats – and here’s the new virus, see, they have the same HIV-related sequences… so… bats!

Totally not secret pathogen research which escaped the lab. 

What are the odds that a SARS-like coronavirus with overlapping genetics from HIV mutated and crossed over into humans, next door to a laboratory which had been enhancing coronavirus with HIV for over a decade? And conversely, what are the odds it leaked out of the laboratory? 

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Finally, there is a great thread here by Trevor Bedford (@trvrb) examining the evidence for and against, with key replies challenging the conclusions made as well.

There is a nice “Bayesian” way to compare theories and think about evidence. I’m showing the probability of observing the data at hand given different theories. We want to compare the likelihood of observing this data, compared to other outcomes consistent with a theory. 3/21 pic.twitter.com/HaiNvCVxUo

— Trevor Bedford (@trvrb) February 20, 2020

Let’s learn! What do you think? Maybe I’m wrong! Can anyone disprove any of the links in the chain above? One thing is for sure, the science behind all this is fascinating. 

But we need to make sure that if viruses are being secretly developed and accidentally released, that we learn about that and do our best to make sure it doesn’t happen again. @jonhoye @r_h_ebright @batresearch @nemopublius @JJ2000426 

While over the past 24 hours, the US Federal Reserve appears to have gotten cold feet about intervening in the market and/or cutting rates, its Japanese peer had no such misgivings.

AS a reminder, Friday saw Fed Chairman Powell step in with a rare public statement, in which he stated that “the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.” And yet despite this Greenspan-playbook preview which helped send US stocks soaring in the last minutes of Friday trading, Powell didn’t actually do anything over the weekend, as the whispers had had it.

His BOJ colleague, Haruhiko Kuroda, however, was far more aggressive, and on Monday morning, the BOJ also csme out and made clear that it too has noticed that things are not going well (and recall Japan was already in recession, which today’s Q4 capex data at -5.0% only underlines), and said that the BoJ would “closely monitor future developments.”

More importantly, however, besides mere jawboning, the BOJ did in fact step in to stabilize markets, and with the Nikkei openly sharply lower, the BOJ unleashed a record stock market intervention and bought a record amount of Japanese stock ETFs on Monday, central bank data showed. Indeed, according to Reuters, on top of its small daily purchase of ETFs targeted to “encourage companies’ capital spendings”, the BOJ bought 100.2 billion yen ($926 million) of ETFs, much larger than the 70-74 billion yen it habitually buys.

The BOJ’s panicked attempt to stabilize the market takes place three monts after we reported that the Japanese central bank would start lending out ETFs to prevent a market freeze as a result of its relentless purchases, and as the market literally runs out of ETFs to purchase and keep systemic liquidity ample. The problem: the BOJ already owns nearly 80% of the country’s stock of ETFs, the result of a program begun in 2010 and ramped up in 2013.

And with every incremental purchase, not only does the stock of existing ETFs shrink, but incremental BOJ intervention threatens to tip over the market into an illiquid crunch. Of course, the BOJ can “fix” this issue by simply expanding its universe of eligible securities to also include single stocks, which is inevitable now that the coronavirus pandemic threatens to transform Japan’s garden-variety recession into a depression. Until then, however, for all those asking why futures aren’t far lower, thank Kuroda, whose central bank once again demonstrate that the only thing that matters is stocks.

Authored by Richard Breslow via Bloomberg,

The markets’ reaction to the latest economic news is indeed odd. But entirely predictable. The Chinese PMIs were horrendous. How could that possibly have come as a shock? And on what basis should anyone have been relying on economist forecasts to decide whether it was a miss or a beat? Anyone surprised that China’s economy has taken a serious hit, is being delusional. Probably the same ones who where assuring us of the impending V-shaped recovery.

Perhaps less surprising was the immediate reaction to the 4 1/2-liner from Fed Chair Jerome Powell letting us know that he is “monitoring developments.” Isn’t that what he is meant to be doing? And is it a surprise that their reaction function is as predictable as it has always been? Blame it on risks or headwinds while keeping a vigilant eye on the level of the S&P 500. But, I guess that’s what it takes.

There is absolutely nothing wrong with cutting rates when appropriate. Nor are insurance cuts inappropriate.

But we were treated last week to a long litany of assurances:

• that “the fundamentals of the U.S. economy remain strong” (Powell),

• “I wouldn’t want to to prejudge the March meeting” (Bullard),

• “there is some risk, but basically I think the U.S. outlook looks pretty good” (Yellen),

• “I think it pays to be patient” (Kaplan).

At least Italy’s leaders weren’t assuring everyone that they feltsanguine before announcing yesterday emergency measures to combat the economic ill-effects they are experiencing. And to their credit, they are proposing to implement fiscal measures that are actually meant to reach businesses directly rather than relying on the old trickle-down method.

We’ve now moved to not merely assuming a March cut is baked in the cake — and maybe one bigger than 25 basis points– to debating if they can afford to wait that long and whether they should pull the trigger on an emergency basis.

And do so in tandem with the rest of the world’s central banks. We won’t be shocked and we won’t be awed. Cooperation is a good thing. Would that the powers-that-be could do it under more circumstances.

The Bank of Canada has its March meeting on Wednesday. Futures pricing has them going. Before Powell’s statement economists were undecided. Watch whether that changes rapidly. I suspect we move from talk of a tight housing market and financial stability considerations straight to discussions about not wanting to disappoint market expectations.

As far as U.S. numbers are concerned, it seems likely that any weakness will be taken as evidence that the economy is slowing and any strength as dated information. In reality, that isn’t necessarily true, but if rate cuts are on offer, that will have to be the interpretation. Especially, if ISM disappoints and no one wants to wait around for an expected robust non-farm payrolls to throw a spanner in the lower-rates works.

There is the usual long list of Fed speakers on the schedule this week. The extent to which they change their messaging will be well worth listening for. What a difference a week makes. This morning the OECD lowered its global growth forecast to what would be the lowest since 2009. The BOJ and BOE have waded in with pledges of support. A lot of people are relearning that globalization isn’t such a bad idea.

Jack Welch, a railroad conductor’s son who became chairman and CEO of General Electric and led it for two decades, growing its market value from $12 billion to $410 billion, has died. He was 84.

As CNBC reports, John Francis Welch Jr. was born Nov. 19, 1935, in Peabody, Massachusetts, to Irish American parents. His father was a conductor for the Boston & Maine Railroad and his mother was a homemaker. The younger Welch studied chemical engineering at the University of Massachusetts Amherst and received his Ph.D. from the University of Illinois in 1960.

Welch joined GE in 1960 as a chemical engineer in its plastics division in Pittsfield, Massachusetts. He became a vice president in 1972 and vice chairman seven years later. In April 1981, at age 45, he succeeded Reginald H. Jones as chairman and chief executive officer.

Welch insisted that all of GE’s divisions be market leaders. ″Fix it, close it or sell it,” he was fond of saying.

Fortune magazine dubbed him “manager of the century” in 1999.

“Though he acted with what seemed at the time like blitzkrieg aggressiveness, he regretted in later years that he hadn’t moved even faster,” Fortune editorial director Geoffrey Colvin wrote in explaining the title.

“Having been handed one of the treasures of American enterprise, he said, he was ‘afraid of breaking it.’ Not only did Welch not break it, but he transformed it as well and multiplied its value beyond anyone’s expectations.”

Welch retired from GE in September 2001, days before the 9/11 attacks. Upon his retirement, The New York Times published an editorial that gushed over his professional record.

“Mr. Welch was a white-collar revolutionary, bent throughout his career at G.E. on championing radical change and smashing the complacency of the established order,” the editorial said. “His legacy is not only a changed G.E., but a changed American corporate ethos, one that prizes nimbleness, speed and regeneration over older ideals like stability, loyalty and permanence.”

Survivors include his third wife, the former Suzy Wetlaufer, whom he married in 2004. He filed for divorce from his second wife, Jane, after reports surfaced that he was having an extramarital affair with journalist Wetlaufer. Four days before the divorce trial was to begin, Jack and Jane Beasley Welch reached a settlement that reports said was worth $180 million. He divorced his first wife, Carolyn, the mother of his four children, in 1987.

It was only a matter of time before smartphone and other electronic shortages from top brands, including Apple and Xiaomi, were seen in India amid supply chain disruptions in China. Many of these companies have production facilities in China, with factory output at half to idle speed because of the Covid-19 outbreak.

The Economic Times (ET) says supplies of made in China smartphones and electronics are dwindling at Indian shops. Suppliers told ET that in the last 7-10 days, only 10-20% of the average shipment had been sent to stores.

Supply disruptions have mainly hit iPhone X models, due mostly because iPhone XR and 7 are locally manufactured. Suppliers noted that TCL and Xiaomi smartphones and televisions from China are in short supply. Shenzhen-based Realme was another brand that was facing shipment delays to India.

ET said shortages of high-tech goods had forced many retailers to stop offering discounts in the last several weeks. There’s also reports that some prices of smartphones and TVs rose 10% last month due to manufacturers resourcing components, which has driven up overall costs.

“There are supply issues for several brands. There is no clarity when the situation will normalise,” said Nilesh Gupta, director at Vijay Sales, a top electronics retailer in Mumbai and New Delhi. “If it doesn’t get corrected fast, we may move into a stock-out situation from next month.”

A Xiaomi India spokesperson told ET that supply chain disruptions in China are expected in early March. “We are working towards balancing the demand in India, which should be met soon,” the spokesperson said.

Indian retailers have been building inventories of smartphones, television, air conditions, washing machines, and refrigerators since supply constraints developed in China last month.

A senior executive of an Apple exclusive store chain warned that supplies would normalize by April because much of the production is being routed to the US and Europe. “Business is down by 50% last week and March is looking bleak,” he said

The virus has gone global, now affecting South Korea and Japan, two top manufacturing hubs of electronic companies that have had some multinationals idle or close some plants because of the virus outbreak.

What’s coming down the pipe for the US is much of the same supply constraints seen in India at the moment. Major retailers, such as Target and Walmart, could experience shortages of products starting later this month or in April. Amazon has already warned several products could be “unavailable” in the weeks or months ahead.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Force cannot restore legitimacy, trust or confidence, nor can it magically erase the consequences of a still-unfolding national trauma.

The Chinese authorities threatening to punish workers who refuse to return to work are getting a lesson in the limits of force in an unprecedented national trauma: a bayonet in the back will not restore the legitimacy and confidence that have been lost.

There are two enormous blind spots in conventional media coverage of the pandemic:

1. The limits of force in restoring China’s economy to pre-pandemic levels.

2. The longer term (i.e. second-order) consequences of the immense trauma experienced by the Chinese people.

While the media focuses on questionable statistics and economic claims–factories are already back to 60% capacity, etc.– little attention has been paid to the tremendous losses. For me, a photo of a young woman weeping inconsolably as the body of her mother was unceremoniously hauled away to the crematorium crystallized the cost, the losses and the national trauma.

For this was not the first tragedy of the pandemic to befall this young person; her father had also died 20 days earlier of the coronavirus. This young person lost both parents in the space of a month to the pandemic.

Everyone knows the Chinese government uses statistics to fashion positive political optics of the Chinese Communist Party (CCP).

But for secrets and lies in service of political optics to have unleashed the virus on the entire nation–that is beyond the usual official rigging of statistics to serve Party optics. It is a complete betrayal of the Chinese people, and betrayal has long-lasting consequences.

Once trust, faith in institutions and confidence are lost, they cannot be recovered without much time and many small good faith steps; even one further betrayal will destroy whatever has been slowly regained.

Beneath the surface, confidence has been eroding for years. Despite the “permanently positive news” of bogus GDP statistics, China’s economy has been stagnating for the past few years, and the trade war was not the primary cause: unnoticed by a myopic Western financial media, China’s economy has shifted from a dependence on increasing production and direct foreign investment (FDI) to a largely hidden dependence on speculation.

Companies don’t have earnings from production, they have gains from speculating in debt and the stocks of other companies. Households aren’t getting wealthier because they’re producing more but because their real estate holding are rising in what’s been presented as a permanently expanding housing bubble.

This is one of the hidden costs of sacrificing reality to serve political optics: the average person has sensed the stagnation, but they’ve had little appreciation of the increasing fragility that left China’s pre-pandemic economy exquisitely vulnerable to an external shock.

The collapse of confidence has weakened the power of authorities’ threats. Trauma dulls the normal fear of punishment, as the pandemic’s punishments have stripped the traumatized of fear.

The limits of over-stretched authorities’ powers are also becoming visible. If 40% of a factory’s workforce doesn’t show up when ordered to do so, are there sufficient police to search for workers who returned to their home villages 1,000 kilometers away and put a bayonet in the back of each one? And then what? Will police officers be assigned to watch the workers 24/7 so they can’t escape? The practical limits on force are increasingly apparent.

And what about the borrowing and spending China’s economy has become dependent on for growth? Will bayonets be shoved in the backs of potential borrowers to make sure they sign loan documents? Will bayonets be shoved in the backs of potential buyers of empty flats in empty buildings in ghost cities?

Will a bayonet in the back of a flat-broke small business owner pay his overdue rent?

Force cannot restore legitimacy, trust or confidence, nor can it magically erase the consequences of a still-unfolding national trauma. The limits of force apply not just to China but to every national elite that reckons it can force the genie back in the bottle and magically restore legitimacy, trust and confidence to pre-pandemic levels.

Trauma has consequences, and they don’t disappear in a matter of days or weeks. Rather, these consequences unleash consequences of their own, i.e. second-order effects, that are beyond the reach of propaganda or force.

When force fails, threats lose their potency and whatever shreds of legitimacy, trust or confidence that survived the trauma evaporate.

A bayonet in the back doesn’t restore the confidence of the traumatized, especially when the pandemic is still expanding globally.

My COVID-19 Pandemic Posts

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The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

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