Saturday, July 4, 2020

America’s Grand Post Election Re-Set

 

The Transitional Healer

For America at this time & place Joe Biden represents the caretaker, healing, fatherly figure who has a broad and rather deep appeal. That’s the good news.

The not so good news is that, assuming Biden wins the November presidential election, he’ll enter the presidency one year older at just over 78 years old than Ronald Reagan who was the oldest US president to leave office.

Worse yet he’ll face four unrelenting brutal years against the backdrop of a continuing pandemic, global recession with historic debt, mass unemployment and social unrest. To say he’ll have an overwhelming agenda is an under-statement but at his age he’s willing to make the ultimate public service sacrifice.

For this reason his vice-president must be president-ready from the get go; someone ultra-savvy, dynamic, energetic, and an internationalist because it’s a one term gig for Biden. In other words his vice president will be the Democratic candidate in 2024.

The simultaneous international and domestic objectives for the Democrats are as follows:

INTERNATIONAL

Repair & Reassessment

Re-establish American global political credibility with its allies against growing encroachment by the Russians, Chinese, Iranians and their respective proxies and non-state actors.

Diplomatic Re-Connection with the World

The immediate task of filling long vacant ambassadorial and diplomatic positions. According to the US Ambassadors by American Foreign Service Association as of 23 June 2020, here is a list of many vacant ambassadorial posts:

·         Afghanistan

·         Cuba

·         European Union

·         Germany

·         Japan (nomination pending)

·         Jordan (nomination pending)

·         Qatar

·         Singapore

·         Sudan

·         UN Human Rights Council

·         UN Political Affairs

Long Term Dictators

Chinese President Xi (leader of the world’s # 2 economy) and more recently Russian President Putin (the world’s # 2 nuclear weapons arsenal) secured their legacy in their respective countries enabling them to legally rule forever outside of an internal coup or health issues. Both have achieved numerous objectives under a US presidency that acted more of an ally than an adversary.

 

Nonetheless both Xi and Putin are anticipating a Democratic victory with its one-term Biden presidency. Regardless because of their leadership lifetime status, they can afford to wait four more years during this global socio-economic-political transitional adjustment period to better assess America’s strategic policies and objectives.

Global Institutional Engagement

Biden must undertake a deep-dive reassessment of how and to what extent America will engage with international institutions: political, economic and public health. This requires redefining America’s role and level of engagement in a New World Order.

In a counter-intuitive twist, Biden may take some pages from Trump’s book of non-diplomacy in reassessing, discussing and negotiating to what extent other members have contributed to each global organization’s objectives particularly relative to America’s historical financial and resource contribution.

DOMESTIC

Big Business Setting the Agenda

A 21st century Economic Reconstruction is already underway unofficially led by Big Business and coordinated by Big Tech. The government’s anti-trust efforts are merely a beau geste because the emerging new economy and information technology structure are designed to favor behemoth corporations. With far less resources than big business, the government will prefer to deal with devils they know even if the pandemic and subsequent global lockdown has crushed small businesses and created oligopolies across many industries.

THE COMEBACK KID

With respect to the political opposition, the GOP will have several years to cleanse itself of Trump’s toxic political waste – an aberration that should have never happened - and reinvent itself as a strong & viable party. Americans have short memories so this task is well within their grasp.

Restructuring & Rebranding the GOP

It’s the proverbial and ironic “elephant in the room”. The GOP will reinvigorate itself with a massive overhaul and re-branding for the 2024 presidential election by removing the Trump’s sycophants. With a fresh start and clean slate by 2024 the GOP will be unrecognizable from today.

Presidential Re-Election Scuttling

By every indicator it seems as if Joe Biden will be the next US president. (Of course that was said of Hillary Clinton at this point in the campaign in 2016). For Trump failure is indeed an option. Why?  His administration’s handling of the pandemic has failed disastrously and has pushed his credibility over the edge. Instead of trying to repair the damage Trump’s statements are evermore outrageous and might seem like the unraveling of a madman.

But these statements are not from someone who’s psychologically unraveling, rather a carefully crafted strategy from a street-savvy malignant narcissist. He knows that he’s in a lose-lose situation and is more than likely deliberately setting himself up to fail so as to lose the presidential election – on his terms – and then conveniently blame everyone for his failures.

I believe that Trump now realizes that pandemic is a profound and long-term crisis that he can’t handle. For this reason he has created an atmosphere so toxic that there are public fissures in his inner circle as well as non-governmental, retired, prominent GOP members openly stating that they won’t vote for him. The dismal campaign rally in Tulsa from his grass-roots supporters was probably the clearest harbinger of his political future and for that reason he has since initiated his escape plan.

His worst nightmare that oddly no one, not even himself, wants is to get re-elected like the sure-thing Broadway flop in The Producers (1968) in which the duo of Max Bialystock and Leo Bloom created a situation that “failure” was guaranteed.

As John Bolton former Ambassador to the UN and author of the new controversial book “The Room Where It Happened” adroitly said during a webinar 2 July 2020 sponsored by the Foreign Press Association, 2 July 2020, “A one term Trump presidency is reparable.” Should Trump get re-elected, the real nightmare will just be starting.

 

Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.


The Red Dragon’s New Pandemic

 

With its official imposition of the Hong Kong national security law The People’s Republic of China (PRC) has effectively placed its autocratic knee on Hong Kong’s democratic neck extinguishing any remnants of free speech and human rights. The overwhelming passage of this law undoubtedly proved that the pen is indeed mightier than the Hong Kong riot police.

The PRC’s timing was impeccable enacting it so near to our Fourth of July – an anti-Fourth of July anti-freedom of speech legislation. Admittedly its passage had more to do with the fortuitous timing of a world preoccupied with their respective internal pandemic crisis and the “kid gloves” rebuke by the Trump administration relative to the draconian security law.

The argument put forth by the PRC supporting this law is that it will be used judiciously for specific individuals. On the other hand it’s merely a question of selective enforcement and political convenience akin to laws stating fines for littering or jaywalking which are rarely enforced but could be overnight.

Psychological Impacts

The sword of Damocles now hangs over most Hong Kong professionals triggering stratospheric stress impacting physical and mental health. The pressures for this first-world territory is unique because there hasn’t been a change in the type of government anywhere else in the world. In addition to the dangers of Covid-19, Hong Kongers are suffering a psychic shock because they now live under a de facto autocratic state after decades and generations under a democratic one.

The security law raises self-censorship at the level equivalent to walking on eggshells. Everyone now has to reassess casual, business and even family relationships in avoiding becoming guilty by association.

Economic Impact

This elevated stress will adversely impact work productivity and creativity required in an uber-competitive world. The PRC has been slowly reducing Hong Kong’s importance for decades as Shanghai and Shenzen has emerged as the dominant financial & trade center and technological center respectively. In the future Hong Kong may be relegated to merely a comprehensive back office engaged in nothing more than administrative duties.

Since the summer of 2019 when the protests began there have been strong downward economic pressures on the commercial real estate market. Initially foreign firms drastically reduced their personnel by evacuating many professionals because of the protest violence followed by a recession. This commercial real estate trend is underscored by The Wall Street Journal article 30 June 2020 Hong Kong Skyscrapers Lose Some Sheen, 30 June 2020.

In sum, the article states:

·         Remote work and hot desking may reduce companies’ need for office space by up to 20%.

·         For this reason vacancy rates have risen dramatically to between 5-8% depending on the commercial sector.

·         Rents for prime Grade-A Hong Kong office space could continue its decline from 2019 by an additional decline of 15%-20%.

·         In 2019 Grade-A office space in Central Hong Kong was $313/sf or 48% higher than the next expensive city, midtown Manhattan. This figure has been dropping precipitously.

Additionally my previously published article 31 May 2020 entitled Asian Dunkirk | Hong Kong Brain Drain provided a comprehensive overview of the aforementioned factors particularly the real estate market just prior to the enactment of the national security law.

 

Global Pandemic | Strangulation through Triangulation

The political epidemic is entrenched in Hong Kong. The political pandemic will soon begin is worldwide tour. In other words Hong Kong’s national security law is a misnomer because in reality it’s an international security law that applies to non-Chinese companies and non-Chinese citizens worldwide.

The national security law’s global reach is insidious. According to the Wall Street Journal article 2 July 2020 Hong Kong’s Security Law Means No More Business as Usual, “violations can apply even if committed overseas, and even if the person isn’t a Hong Kong resident.” That means anyone of any nationality, anywhere who says something perceived as hostile to the PRC could be liable under this law.

It would not be far-fetched to imagine that this savvy language was specifically designed as a tool for political and economic suppression and de facto blackmail worldwide. It subtly forces corporate behavior modification in their business and communications about the PRC or risk incurring heavy “penalties” such as lost business whether directly with a PRC firm or non-PRC third-party company whom the PRC has informed not to do business with them. It’s business strangulation through political triangulation.

It’s a law that can impact business negotiations with a politically well-connected PRC firm who can merely whisper the possibility of alleged “irregularities” to gain a business edge. The permutations are as endless as the vagueness and vagaries of the national security law.

The absurdity of the open-ended scope and vagueness of this security law can be compared to a classic scene in the movie Reservoir Dogs (1992) in which merely thinking anti-Chinese government policies can get you a one-way ticket to Beijing.

Counter-Measures

Standing up to the world’s # 2 economy whether for a big or small corporation is a daunting but not impossible task should one be so bold as to challenge the PRC’s high table. The security law serves as a hidden yet subtle constraint on growth for non-Chinese firms globally while PRC companies enjoy a competitive advantage.

The Hong Kong security law is an internal matter as long as the security law is applied within the PRC’s jurisdiction. However if this law is used against non-PRC companies and citizens outside the PRC, this would constitute an intolerable and illegal imposition on another’s sovereignty. With respect to countermeasures, sending a message through aggressive and immediate shareholder and consumer activism can be utilized through protests and boycotting.


Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.


Saturday, June 27, 2020

Covid’s Mistress | America’s Stratospheric Stress

 

The years between the Great Recession and commencement of the pandemic lockdown the economic recovery was a two-faced mirage with eye-popping figures on Wall Street benefiting the wealthy versus wage stagnation, long hours, erosion of health benefits and rising cost of living for the lower and middle class workers.

During this same period most Americans led unhealthy lifestyles as obesity rates and associated health conditions rose unabated despite the media cherry-picking celebrities and individuals who had transformed themselves into ironman and ironwoman with 8-pack ab and outrageous looking “guns.” For this reason the pandemic has claimed disproportionately more lives of people with underlying health conditions.

According to the Center for Disease Control & Prevention (CDC), “The most common underlying medical conditions reported in American coronavirus patients are heart disease (32.2 percent), diabetes (30.2 percent) and chronic lung disease (17.5 percent).” Some of the following conditions that put people at risk for diabetes and other diseases:

 

·         High blood pressure

·         High LDL (bad cholesterol)

·         Low HDL (good cholesterol)

·         High blood glucose (sugar)

·         High triglycerides

 

According to many domestic and global health organizations Americans (young and old) have been getting ever fatter and for this reason less healthy for decades. According to the following chart Obesity Rates Continue to Trend Upward in US, provided by the CDC and presented 27 February 2020 by Statista, an online German statistical firm, this trend has continued for almost 20 years. Furthermore 4 in 10 Americans are obese while one in 10 are severely obese.

 

With respect to the economic impact the following chart entitled Where Obesity Places the Highest Burden on Healthcare, provided by the Organization for Economic Co-Operation and Development (OECD) and presented 11 October 2019 by Statista.

 

Underscoring obesity’s impact on the US economy, Statista provided the following explanation: “For example, obesity is responsible for 70 percent of all treatment costs for diabetes, 23 percent of treatment costs for cardiovascular diseases and 9 percent for cancers. On average, treating diseases caused by excess weight costs 8.4 percent of total health spending in OECD nations. So where is the financial burden highest? Unsurprisingly, perhaps, the U.S. has to spend the most battling the bulge. Obesity is expected to cost the health system $644 per capita annually from 2020 to 2050 - 14 percent total American health expenditure. By comparison, Canada will "only" have to spend $295 each year during the same period which equates to 11 percent of its total health spending.”

For this reason Covid’s mistress has lit the fuse to the obesity epidemic that can result in a brutal health and financial contagion among these demographic.

Assuming that the curves flattens with no significant increases in Covid-19 cases and a vaccine is developed and distributed sometime in 2021, the legacy of Covid-19 will have already adversely impacted this vulnerable group.

Culinary Lockdown Lunacy

For starters there are more than enough anecdotal stories about substantial weight gain during the lockdown as articulated in the Wall Street Journal article 25 June 2020 entitled Covid 19, Lockdowns Are Lifting and Our Clothes Don’t Fit. The primary causes are a forced sedentary lifestyle such as remote working, unlimited junk food and no commuting. For sure there are dedicated workout fanatics who’ll improvise and maintain their intensity with or without a gym but those are an exceptional minority of gym goers. For most others social participation with other gym goers is motivating while goldfish are not.

There are two groups who are vulnerable during the present-day, near-term and even beyond in a post-vaccine environment:

·         Group A: Those vast majority of Americans who were already out of shape, overweight and obese pre-pandemic. The lockdown has exacerbated their situation to the point that losing the added weight during lockdown and pursuing a healthy lifestyle to reduce their pre-pandemic overweight situation might be too much to overcome making them more vulnerable to health-related problems.

·         Group B: The minority of Americans within the healthy Body Mass Index (BMI) or have active & healthy lifestyles in which the BMI is not relevant. Even this group many have gained weight during the lockdown, reducing the excess weight may be far easier than for Group A but I suspect some will still retain more weight than they should.

Stratospheric Stress

The pandemic has pulverized the economy in which there are few “safe havens” for secure employment. This has caused stratospheric stress across all socio-economic levels ironically creating an employment landscape that will punish obese Americans in a shrinking economy.

·         Essential workers are stressed by working daily exposure to the virus through the pandemic in frequently less-than-secure environment and inadequate protection. Adding to their stress is whether they’ll still have their present-day job or if they’re laid off whether they can secure another one in an economic environment in which companies are downsizing aggressively because of low consumer demand or filing for bankruptcy to insecure they’re own survival.

·         Because every industry has been decimated simultaneously, the option of retraining or additional education to change careers is moot point.

·         White collar jobs, even in the C-suite, are highly vulnerable as file in order to restructure their debt. Those that survive will emerging far leaner & meaner than ever that includes laying off thousands of workers. For those firms unable to turnaround their organizations they’ll have no choice to vaporize the entire work force.

·         Even firms with reasonably stable financial situation are discovering that it’s still prudent and profitable to have a leaner operations workforce. It’s not a question of musical chairs because there are no chairs. Nothing is secure.

·         For this reason the surviving white or blue collar workers who still have job will occupy a different level of corporate hell because employers will have the power of kings and workers merely serfs in a job environment with no options. I expect increased employer abuse such as ageism, sexism, racism, etc. in the workplace because workers will be in a position of survival not justice.

·        Although the probability of a collapsed food supply has vanished, food prices have increased which means the under-employed or unemployed face food scarcity.

Health Hellscape

The pandemic and ensuing economic disaster have created a vicious toxic cycle. The backdrop is that most Americans have led unhealthy lifestyles with resultant multiple pre-existing health conditions. Even if they adhere to safety recommendations and avoid contracting the virus, the stress of this once-in-a-century pandemic is the straw that breaks the camel’s back on an already elevated stress level.

Mass unemployment, indefinite furloughs, corporate downsizing/bankruptcy filings, civil unrest create a torrent of psychological tornados. To cope with this Americans engage in activities that initially suppress their stress but ultimately compound them such as increased alcohol consumption and controlled substances, binge eating and taking or abusing more and stronger prescription medication as coping mechanisms. Call it “lockdown lunacy” but people in isolation do weird things and discipline goes out the window particularly those who live alone with few (if any) genuinely close friends or relatives. Some call it hopelessness.

With respect to dealing with mental health and anxiety issues the following are charts provided by Statista that document the impact how the pandemic anxiety is having on Americans.

The following is entitled Pandemic Causes Spike in Anxiety & Depression provided on 2 June 2020 by the CDC, National Center for Health Statistics (NCHS) and the US Census Bureau.

 

 

The next chart on mental health related to pandemic anxiety is entitled Mental Health Prescriptions Spike Amid Pandemic Fears provided on 2 June 2020 by Express Scripts.

 

For this reason the pandemic has morphed into a non-viral vicious strain that converts evermore already unhealthy and overweight Americans into drug & alcohol dependent zombies. This only worsens America’s healthcare crisis not only medically rather financially with additional present-day and future expenses and “flattens the curve” on America’s economic recovery.

Long-term even slightly elevated stress imposes greater pressures on one’s health. Even if one has no health issues, this pressure eventually impacts the weakest part of the body and then things snowball form there. Medication merely suppresses a problem, it doesn’t eliminate it.

Oases

Those relatively unaffected are the wealthy whom I classify as those with plenty of savings and cash on hand not necessarily annual income or net worth. Net worth is a financial mirage because when push comes to shove in accessing cash on short notice illiquid assets [boats, planes, artwork, property] are notoriously difficult to sell at a reasonable price during a recession.

Damning Forecast

The damning forecast is for a far sicker and weaker population well past the development and distribution of a vaccine because of the new brutal economy. The stratospheric stress is the accelerant on an already overweight, aging and over-medicated American citizenry. This viral storm will trigger exploding health care costs, lower economic productivity and quality of life, and ultimately declining longevity.

Only months before the pandemic the media was touting how healthier lifestyles and advanced DNA-programmed medicines will create an older and more robust generation in which living until 100 will be commonplace. The cruel irony is that potentially shorter lifespans parallel the economic reality that the younger generation will be poorer economically than previous generations.