Talking Points
- A study showed polar ice-melt is six times worse than two decades ago
- Theories abounded as to whether the Olympics would be cancelled
- Vladimir Putin shuffled some laws to line up a 5th term in power
- Coalition forces exchanged rockets with Shia militias in Iraq
- Greece battened down the hatches ahead of a refugee influx
- Mali's rapidly-growing Islamist insurgency raised fears in the region
- The long-awaited MH17 trial opened in the Netherlands
- Joseph Biden emerged as the clear Democratic front-runner
- A US judge ordered Chelsea Manning's release from prison
- Harvey Weinstein was handed a 23-year sentence in New York
Deep Dive
Turning and turning in a widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold...
Pandemics and pantomimes
This week the World Health Organisation (WHO) declared the novel coronavirus COVID-19 outbreak a pandemic; which is epidemiological-speak for "dust off the Yeats". The definitional hurdle of 'wide-spread person-to-person spreading' has most certainly been met. And while some countries have followed best-practice guidelines for containing the coronavirus (hello Singapore) others have gone their own way in a fit of coughs.
A month ago the local authorities in Hubei were (quite rightly) castigated for wilfully downplaying the severity – and in some cases the very existence – of the coronavirus outbreak. It was to many people, particularly those who've watched the HBO series Chernobyl, a tell-tale sign of how truth-telling is disincentivised under communist regimes. And yet, China was able to deploy a breathtaking amount of central authority to contain the outbreak, which by now it most certainly has (new cases in Hubei have fallen to single-digits ). Some 3,169 Chinese have died from a population of 1.3 billion. Compare this to Italy, which recorded its 1000th coronavirus death from a piddling population of 60 million. The government in Rome have enforced policies that range from inconvenient (placing the entire country in lockdown, shuttering all non-essential stores ) to unbearable (suspending the Serie A season). Italy has failed spectacularly, in flattening the coronavirus curve.
America has emerged as another country to watch, if only to observe the war of words between its public health authorities and the White House. The Trump administration has announced a travel ban on all arrivals from continental Europe for at least 30 days. Such pronouncements appear decisive. But they mask the fact that America's coronavirus testing regimen has been piecemeal and ineffective . Not that you'd know it, if you listened to the US president. Trump not only lied about his government's response, he even misrepresented the science itself. While that may have been a play to calm the markets (a must if he is to win reelection this year) it is a clarifying moment when the Islamic State's advice (self-quarantine, wash your hands) is more medically-sound than that of the president of the United States of America (i.e., that a "miracle" will make it disappear, and that the number of infections in America will be "close to zero"). Incredibly, there is even a chance that Trump himself has been exposed to COVID-19.
Markets playing FTSE with oblivion
If you are lucky enough to have a share portfolio, now is not the time to check it. The WHO's updated nomenclature, paired with Trump's alarming attempt at reassurance, was enough to send fresh convulsions through global markets. The Dow Jones Industrial Average has – as the kids would say – been having a normal one. Or as the rest of us would say: it's entirely out of control. A sizeable percentage of the Dow's most precipitous intra-day figures ever have occurred this month. It lost 1,100 points, or 4% of its total value on Tuesday, only to then regain it all. The next day it shed over 2,000 points ; a near 10% plummet that ended an 11-year bull market charge and represented the worst single-day result in more than three decades. Its partner indices in the S&P 500 and Nasdaq took a similar battering, prompting the Wall Street circuit breakers to halt trading on consecutive days. These breathers have not worked. New York losing sight of its proverbial falcon rarely inspires confidence in the rest of the world. Surely as the Earth turns, each market in the rest of the world dropped sharply on the opening bell. Indices from London to Sydney experienced historic drops.
This volatility has now infected the broader financial system. In the States the crucial repo (repurchase) market has taken a walloping. This largely-unheralded market exists so that dealers can sell collateralised securities (often government bonds) for cash, on the proviso that they'll buy them back within a short time-frame (as little as a day) for the initial amount plus interest. If that sounds confusing, just know this: it's an arrangement for banks and hedge funds to borrow at low rates and for money market funds to earn a quick buck. The daily trade on the repo market amounts to trillions of dollars. There are now worries that it's all at risk: on Wednesday the US Treasury bought $1.5 trillion worth of repo agreements to stabilise the market.
In marginally better news, China's dormant factories are reopening , which ought to help turn around the extraordinary 30% drop in seaborne trade that some countries have felt. But it's yet to be seen whether there will be any money left in the rest of the world to purchase Chinese goods.
As with all crises, this pandemic presents our species with a series of profound questions. Will the labour laws of my country protect me in a recession? Are the institutions that guide and temper civic life actually functioning? Is the social fabric of my community woven tight enough to counteract self-interest? What is the relationship between my country and the globalised world economy? Where did all the toilet paper go?
Worldlywise
A well-oiled machine...
You might think this is a perilous moment in modern history that calls for measured actions. And it's exactly that kind of thinking that separates you from Saudi Arabia's rulers. You see, they think it's high-time to prosecute an internecine oil price war with Russia. In a bid to reverse the descent of oil prices, Riyadh instructed the OPEC, the oil cartel of which it is the leader, to cut production. Moscow, while not an OPEC member, had an agreement in place with the Saudis. It was a marriage of convenience – borne of the good days of high oil prices.
But the Kremlin is looking to squeeze US shale manufacturers who are susceptible to significant drops in the oil price, and so they refused OPEC's request. And just like that, the global oil market imploded: the (unimpressed) Saudis began flooding the market with oil to further depress the price, starting a game of chicken with their Russian frenemies. The result? An immediate 25% collapse in the price of Brent crude. You'd be really hard pressed to find a worse time to throw a molotov cocktail at the international oil market. .
But this was not the only eyebrow-raising moment from the Kingdom this week. The alleged reformist Crown Prince Mohammad bin Salman has detained even more family members . Mohammed bin Nayef, who was the designated crown prince before MbS staged a palace coup, and King Salman's younger brother Ahmed bin Abdul Aziz have both been detained. With rumours about the king's poor health swirling, MbS is obviously getting his ducks in a row for his self-appointed succession. Don't you just love monarchies?
Living in fear
International Women’s Day was followed by a sombre shutdown across Mexico on Monday. Tens of thousands of women vanished from streets, schools and offices for “Un dia sin nosotras” ("A day without us”). The protest was triggered by the nauseatingly brutal and highly-publicised murders of Fatima Cecilia Aldrighett , 7, and Ingrid Escamilla , 25. They’re counted among the many victims of a femicide epidemic across Mexico and Latin America. Officially, ten women are killed each day in Mexico; though this number that excludes many who are never found . On one hand, Mexico has invested millions of pesos into protecting women. But crimes are rarely investigated or punished, judicial rulings are private, and slain women feature gratuitously in the tabloids . Faced with this deadly problem, Mexico's women could either take to the streets – or disappear from them.
No nation is immune to “femicide” – the gender-based murder of a woman or girls. It is so common across Latin America that 17 countries have singled it out in their criminal codes. Such crimes are met with severe punishment: Mexico’s minimum sentence is 45 years; while Panama’s is five years higher still. And yet, despite the legal cudgel, femicide won’t abate . Many countries across the region have high overall murder rates: thanks to the war on drugs, Mexico's murder rate has risen steadily since 2007; while Guatemala’s widespread violence can be traced to its brutal civil war. Women have not been immune to this.
But while murder rates are high, femicides carry a common thread of atrocity: sexual violence or asphyxiation is often involved, the woman is often killed at home, and the perpetrator is often a current/former partner or a family member. Women’s protest movements have been roaring in retaliation for years – from Argentina to Chile . But these women are fighting for more than the right to live. Many are fighting for economic equality, better education, and safe and legal abortions. If the notion that women lead the most successful protest movements is anything to go by, their uproar may be the main ingredient to spur change .
The Best of Times
A savvier power source
The case for investing in renewables has gained new ground, as wind and solar farms were found to be cheaper to run than coal plants . A report from Carbon Tracker Initiatives states that by 2030, it will be cheaper to build new wind or solar power generators than to continue mining coal, in all markets. It pushes another nail into coal’s coffin; putting almost $640bn of pending coal projects at risk, and shifting coal into 'risky investment' territory. Finally, coal is risky for more than one reason.
A cure for the ages
Amid the scourge of alarming public health coverage this week, one story flew under the radar. Adam Castillejo, 40, revealed himself as the second person to be cured of HIV. Doctors originally announced that a man known as “the London patient” had been cured in March last year. But Casillejo kept quiet until now, announcing his newfound-mission to “be an ambassador for hope ”. Castillejo started taking medication for HIV in 2012. But it was a bone marrow transplant for his Hodgkin’s Lymphoma that same year that seems to have cured him. The chef is now cancer- and HIV-free.
The Worst of Times
Carbon sinking feeling
Over the last half-century the Amazon has lost 20% of its unique vegetation to farmland and logging coupes. While the rate of biodiversity loss is accelerating, many still believe that there is still ample time to save the world's most biodiverse rainforest. A new study suggests this is not so : that seemingly superficial clearings are exacerbating issues elsewhere in the rainforest. In fact, we may be nearing the point of no-return. If we cross that, we will see the entire Amazon depleted to parched savannah within 50 years.
Radical theocracy
Utah is considering a bill to make administering abortions a felony , with a maximum 15-year jail sentence attached. This is an extraordinarily brazen attack on the rights of American women.
Weekend Reading
Quote of the week
" For many of our workers ― restaurant workers, truck drivers, service industry workers ― they may not have an option to take a day off without losing their pay or losing their job. That’s not a choice we should be asking anyone to make in the United States in the 21st century. "
– Senator Patty Murray gets to the heart of the matter. Coronavirus has forced all of us to look at how our societies and economies are structured – to interrogate who counts and who doesn't.
Headline of the week
''Coronavirus conference 'cancelled due to coronavirus'" – The Independent .
Special mention
This 12-year-old bookworm who built her own library in Rio's favelas.
Some choice long-reads
- Businessweek finds holes in the quarantine net
- Financial Times laments the rise of femicide in Mexico
- Foreign Affairs knows what's missing from international relations
Tom Wharton
