Just when you thought it couldn't get much weirder, Elon Musk has introduced a group of pigs with mind reading implants.
Developed by Neuralink, headquartered in Fremont, California, the button sized brain implant can be installed by a robot. The brain activity of pigs can then be transmitted to a computer "allowing onlookers to watch the animals' neurons fire, as vets stroked their snouts" according to Bloomberg today.
What were they thinking about? Not much apparently. The demonstration was meant to show the progress of the four year start up currently employing 100 staff, expected to grow to over 10,000 within years. Development of the device would enable implants in humans within a few years. "We now have a Fitbit for the brain" the claim.
Once fitted, the implants could be updated with software updates. The goals would include improvement or restoration, of vision, mobility and speech. The inhibition of pain, the acceleration of learning and the exploration of consciousness would also feature. In the future, "I think you will be able to save and replay memories" said Musk.
Let's hope that comes with a delete button. If only we could travel our minds back in time to pick up Tesla shares at $200 dollars in August 2019. The stock closed at $2,200 this week. Watch out for a Neuralink listing soon ...
In other news, Americans are still drinking bleach as a cure for Corinavirus. Despite months of warnings that it is not safe, some Americans are still attempting to self treat by drinking bleach products and voting Republican. At a news conference in April, Trump suggested injecting disinfectant was a potential treatment for the virus. The FDA along with manufacturers Lysol has issued a warning, that Chlorine dioxide can lead to respiratory failure, liver failure and abnormal heart rhythms along with other potentially life threatening conditions. Americans still continue to attend Trump rallies, without a mask, carrying a bottle of bleach, wearing a "Make America Great Again Hat" over their eyes. Just 66 days to polling day ...
Last week we suggested that sniffer dogs could be employed on retail queues in shopping centres in the future, to detect Covid Carriers. Headlines from Forbes this week, "Sniffer dogs could be the answer to travel bans". No need for testing at the airport, a dog has 300 million nasal receptors compared to just 5 million in humans. Already proven in the ability to detect cancer in humans, countries have been testing if dogs can sniff out people infected with Covid-19.
Trials are already underway in the UAE appparently. Specialised teams monitor samples from the armpits of arriving passengers. It is believed the trained dog can very quickly determine if a person is infected or not ... together with how long they have been traveling ...
Boris Johnson is under fire this week. "Get Britain back to work", senior Tories have told the Prime Minister. A "clear and consistent message" is needed on this and many things for sure.
Grant Shapps said the government would launch a publicity campaign to reassure people, it was now safe to return to the office. The TV and Newspaper campaign will be aimed at reducing the number of people working from home. "People working from home have a higher risk of losing their job", the Transport Secretary added for good measure.
Speaking from his ranch somewhere in the country, Matt Hancock, warned of a second coming of the virus and the possibility of further total shutdown. The Health Secretary claimed he was unaware of the number of his department staff working from home. He cares more about how effectively they are working, than whether they come into the office or not.
Carolyn Fairbairn, Director General of the CBO has warned that commercial centres risk becoming permanent ghost towns unless employees return to the office. Jes Staley, Group Chief Exec of Barclays has suggested the big office block, like the Bank's 7000 seater in London, could become a thing of the past. Yes the tumbleweed could soon be blowing across Canary Wharf, unless commuters get back on track.
Boris Johnson's approval rating has fallen to its lowest level since last October according to a YouGov poll. Just 38% of people had a favourable view of the PM compared to 53% who said they have an unfavourable perspective.
The Prime Minister is not the only one with rating lows. Matt Hancock, Dominic Raab, Gavin Williamson, Priti Patel and Dominic Cummings all have negative ratings. By far, the most popular cabinet minister is Rishi Sunak, the Chancellor of the Exchequer. The furlough scheme and Eat Out to Help Out has been the best way to gain favour with a fickle electorate.
The furlough scheme is due to end in October. How long then will Rishi ride the waves of popularity? This week, Angela Merkel announced the German scheme will be extended to the end of next year. The Chancellor would be wise to head the Teutonic lead, an extension to the end of this year and up until Easter next year would be a wise call ...
Retail Sales were up in July, compared to prior year. It was the first increase, year on year, since the January start to the year. Mike Ashley's Fraser Group suggested there was some "semblance of normality" returning to the high street.
Household goods stores were up by almost 10%. White goods and DIY were beneficiaries. Furniture and floor coverings prospered from the housing market recovery. Garden centres once again featured, with sales up by 12%.
Things must be getting better or people are returning to work. Alcohol sales have fallen for the first time since the start of the year. Clothing and footwear sales were down by 25%. Cosmetic sales were down by over 11%. Overall retail values increased by 3.7% (excluding auto fuels) and volumes increased by just over 3%.
The online story continues. Year on year growth was 53%, accounting for 29% of all retail transactions. Food penetration has doubled over the past twelve months to 11%. Non food sales increased by 60% accounting for 30% of all volume.
Clothing sales online increased by 22%. In store sales were down by 45% year on year. The online mantra is UX and UJ, the quality of user experience and journey. "One Click" the standard. No wonder sales are down in clothing and cosmetics. There is little or no chance to "experience" the product.
The in store retail experience begins with a lengthy queue, confronted by a gatekeeper, with a face shield, pointing a gun at your head, mumbling through a face mask, with no semblance of a smiley welcome. Next will come the sniffer dog, detecting those with a temperature and a hint of a cough, trained to bark aggressively, at those failing to wear a mask.
The rise in retail sales suggests the recovery is gathering pace. The latest IHS Markit/CIPS data points to a further increase in output in August. The composite index increased to over 60 in the month. This was the highest rate of business expansion for almost seven years. Manufacturing and services were beneficiaries as businesses opened up. Manufacturing production increased at a slightly faster pace than services as both sectors experienced a recovery in demand.
Yes the recovery is gathering pace, the recovery will be V shaped but then it always is ...
Government borrowing in July was £26.7 billion, up by £28.3 billion compared to last year. In the first four months of the financial year the government was forced to borrow £150 billion up by £128 billion on the same period in 2019.
The OBR expects total borrowing in the current financial year to hit £322 billion around 16% of GDP. Total debt increased to £2 trillion, over 100% of GDP.
Rishi Sunak, the Chancellor or the Exchequer explained "The crisis has put the public finances under significant strain. We have taken action to support millions of jobs, businesses and livelihoods. Without that support things would have been far worse."
He also warned, "today's figures are a stark reminder, that we must return our public finances to a sustainable footing over time. This will require taking difficult decisions!" No extension of the furlough scheme towards the end of the year, The "Eat Out to help Out" scheme at a cost of £180 million to date, will not be on the menu from the end of the month. The government is keen for the return to work to continue. "protecting, supporting and creating jobs, to ensure nobody is left without hope". Oh dear, that doesn't sound good!
In the markets, Sterling closed at $1.31 against the dollar. The move above $1.32 a little too ambitious in the week. The FTSE closed down, finding support at the 6,000 level. In the US, NASDAQ pushed to a new high, assisted by Apple's all time high. Gold bears were singed a little as the test of $2,000 proved a little too much. The Bitcoin boys were baffled, as the move above $12,000 was short lived,
That's all for this week! Have a great, safe, week-end ...
It's official. Output in the UK economy dropped by over 20% in the second quarter. The actual figure, year on year, was 21.7%, that's slightly better than our forecasts, since start of lock down.
Construction output fell by 36%. Manufacturing output was down by 22%. Service sector output fell by 21%. The leisure sector, accommodation and food, was down by almost 90%. Lock the doors and turn off the lights. Don't be too surprised if revenues take a hit.
So what happens next? Our multi sector model of output, GDP(O), phases in the gradual return to normality. We expect a V shaped recovery. Recoveries always are or have been, V shaped, since formal records began in 1948.
The "Eat Out To Help Out" has confirmed families will return to restaurants. Retail sales confirm consumers will return to high streets. The fans are desperate to return to the terraces, as football, cricket and rugby return to the screens. Car sales were up in July, house sales and prices are rising. The government is committed to infrastructure spending. The Bank of England is committed to liquidity in the banking system, Money supply, M4 based is rising in double figure growth. No return of austerity. The mantra is a return to normality. Strong growth will return in 2021. The year on year comparisons will have such a low base for comparison.
This year, our base case scenario is for an output drop in Q3 of 10% and a 5% drop in the final quarter of the year. For the year as a whole the economy will be down by 10%. This is in line with the Bank of England latest forecasts and the mainstream consensus view from the HM Treasury panel.
In the final quarter, travel and tourism will continue to impact on the leisure sector. Manufacturing will face the overhang of Brexit uncertainty. Construction, retail and distribution will remain down compared to prior year. The government really needs to set out the policy for travel and tourism. The industry is warning, a full recovery may take years yet ...
The big challenge is the probable increase in jobs lost. Unemployment is likely to increase to 2.5 million to 3.0 million by the end of the year, unless the furlough scheme is extended. This week, Yo!Sushi announced the closure of 19 of 69 outlets, with the loss of 250 jobs. Fashion chain Jigsaw filed a proposal to close 20 stores with 200 redundancies. The restructuring in retail continues. There will be more to follow the CVA route ...
In the USA, Joe Biden has found his running mate. Senator Kamala Harris is on the platform. It's a dream ticket for Democrats, a nightmare for the White House.
Kamala Harris is a sitting U.S. senator. The daughter of immigrants from Jamaica and India, Harris was born in Oakland, California. The first black woman, an Indian American on a major party ticket. Harris could be the follow on President if Biden wins the election. Aged 77, he is expected to serve just one term.
Californian Senator since 2017, Harris was Attorney General in the State. A formidable intellect, skilled in interrogation and debate. "She takes pleasure in campaigning, making speeches, waving, laughing, smiling and pressing the flesh", according to the Washington Post. The October VP debate with Mike Pence should make for great television.
Joe Biden has answered the call from the Democratic party. He ticked all the boxes, the party had demanded. A progressive, minority woman, who could succeed him as President in 2024, if not sooner! Trump reacted by calling the Senator a "nasty woman", a "very, very nasty woman", who was very disrespectful to Joe Biden in the primaries.
The Trump camp are struggling to position the Biden Harris ticket for attack. Birtherism returns, the suggestion Harris may not be eligible for office is met with derision from mainstream media and the democratic party.
Trump is behind in the polls. The election is just 80 days away. The momentum is swinging to the Biden Harris ticket. Markets are adjusting to the prospect of Joe Biden in the White House. With Harris on the platform, the Presidential campaign just gathered additional momentum ...
Trump complained this week, the water pressure from shower heads is too low. It is playing havoc with his hair style. "I don't know about you, but it has to be perfect. Perfect". The President explained.
Ah yes, soon we may have to say good bye to our White House WTF feature ...
The President is behind in the polls. The pressure on China is increasing. This week Trump signed an executive order banning TikTok in the US. A forced sale to Microsoft may follow. Trump is expecting a slice of the action, for the arranged marriage.
Huawei, TikTok and now WeChat. The Tencent App was added to the hit list this week. The clear and present danger threat continues. The anti China stance makes for great ratings in the Trump camp, masking the problems with his handling of the Covid crisis.
Sanctions were imposed this week on eleven Chinese state officials including Hong Kong leader, Carrie Lam. The Treasury department singled out Lam for her role in "overseeing and implementing Beijing's policy of freedom and democratic process."
Trade sanctions, consulates closing, social media apps banned. Chinese companies listed in the USA have been given notice of compliance with US accounting norms or face de-listing.
This week, the State Department announced the highest level visit to Taiwan in decades. The US Health Secretary is to lead a delegation to Taiwan to discuss the pandemic and to "celebrate the shared value of the two democracies".
The visit is adding to tensions between Beijing and Washington. China's ambassador to the US, Cui Tiankai, has warned military activities in the South China Sea are increasing the risk of potential confrontation. The US is garnering allies in the region. The US led "Five Eyes Alliance" including Canada, UK, Australia and New Zealand is turning its gaze to the East. New Zealand changed course last week and aligned with other alliance members in suspending the extradition treaty with Hong Kong. The move was in protest against Beijing's decision to impose the new national security law in the province.
Japan this week announced an interest in joining the alliance. Defence Minister, Taro Kono said the five members "share basic values with Japan" and Japan wants to "continue to cooperate closely with the five countries."
The clock is ticking to the election in November. TikTok goes the cold war clock. "I don't think a new cold war would serve anybody's interest" said Cui Tiankei this week, "why should we allow history repeat ... when we are faced with so many new challenges? ... why indeed ...
A flicker of life on the forecourt. Car sales were up by 11% year on year in July. Private sales were up by 20%. Fleet sales were up by 5%. Business sales were down by 20%. Time yet for those purchase orders to be signed before the end of the year.
The recovery is expected to continue. Hybrid sales increased by over 250%. Diesel sales were down by over 25%. Mike Hawes, Chief Executive of the SMMT remains cautious, "showrooms have only just opened nationwide but there is still much uncertainty about the future."
"Much uncertainty about the future perhaps", but the latest IHS Markit / CIPS data points to continued strong recovery in manufacturing, services and construction. Output in the manufacturing sector hit a three year high. The rate of growth in services and construction was the highest for five years. All sectors reported an index reading into the mid 50s, confirming a strong recovery from the Q2 setback.
Data next week is expected to confirm UK GDP fell by 20% in the second quarter. The Bank of England expects the fall for the year as a whole to be 9.5%. The bounce back in 2021 is expected to be around 9%. This is significantly better than the "Old Lady's" earlier prognosis. The V shaped recovery remains in play.
The MPC held base rate at 0.1%. The stay-cation on Planet ZIRP continues. The stock of government debt will be held at £745 billion. The Bank will continue as "buyer of last resort" to meet the extensive borrowing requirement this year. When questioned, the Governor confirmed "Negative Rates" are now in the tool box. The reassuring news, no one is reading the instruction manual, just yet.
Unemployment remains a significant concern, as the furlough scheme unwinds. The Bank expects the number out of work to be 2.5 million by the end of the year as the U-rate increases to 7.5%. The pressure is increasing on the Chancellor, Rishi Sunak, to extend the furlough scheme to the end of the year and into 2021.
It will take more than the "Eat Out to Help Out" campaign, to restore the fortunes of the leisure sector. Hopes for travel and tourism were set back, as quarantine bridges were blocked to Europe and elsewhere. News that "pubs may have to close, if schools are to re-open" just added to the mixed message confusion.
The job losses will be both structural and cyclical. The furlough scheme will have a continued role to play for those sectors, late to recovery in the cycle. For the moment, the Chancellor remains unmoved ... but back bench pressure is increasing ...
Just when you thought it was safe to go bowling, the Prime Minister has made it clear, all bets are off. The people of Manchester and elsewhere, cannot meet with with others, at home, in the pub or in restaurants. No skating, no trips to the casinos, no facials. The army is on standby to enforce law and order. The music will be turned off at illegal raves in Manc. The flashing lights are going out at Daisy Nook. We may not see them lit, in our lifetime again, or at least before Christmas.
Matt Hancock made it clear this morning, the real problem is not the result of people going to pubs or restaurants or illegal raves for that matter. The problem is that of families visiting each other's houses. Contact tracing has shown, the vast majority of infected people, have mainly been seeing friends and extended family, living nearby. Close, close relatives in extended kinship groupings, the obvious target.
The restrictions were announced, just three hours before the start of Eid al-Adha, the "Festival of the Sacrifice". The Prime Minister was accused of discriminating against Muslims. The Grinch who stole Eid, the claim. The pub ban additionally offensive. The government response "we also screwed up Easter and may cancel Christmas as well" suggests plans are in hand to mess up with Yom Kippur, in the name of impartiality.
The second wave is coming from Europe, "we must be prepared" the warning from Johnson. The latest slogan is "hands, face and space". Be alert for more government warnings. "Hands, Knees and Bumpsadaisy" a more catchy slogan. "We apologize for bumping into you, in the name of social distancing" a more simple SOCO, the single over-riding communications objective.
So what of strategy, the underlying challenge, "the return to normality"? This is confusing setback. The Prime Minister has slammed the brakes on the easing of lock down. The risk is, he may have also hit the brakes, on the speed of the recovery ... there will be more pressure to extend the furlough scheme until the end of the year ... over one million jobs are at risk ...
Unleash The Dogs Of War ...
Peace returned to Portland this week. The Fed troops withdrew, the protestors dispersed. The President's law and order play, polled badly. A rethink was required in the White House.
Trump is trailing by ten points in the polls. Biden is ahead in Arizona, Florida and Michigan. Key states for the President are at risk. The solution from the Rose Garden ... to postpone the election.
Tweeting on Thursday, Trump attacked the idea of Mail-In voting and suggested the election should be delayed ...
"2020 will be the most inaccurate and fraudulent election in history. It will be a great embarrassment to the USA. Delay the election until people can properly, securely and safely vote". (for me)
The idea of postponing was immediately slammed by Democrats and Republicans alike. Congress alone can determine the date of the election. Trump reverted to suggestions, he may not accept the result in November, should he lose anyway!
Mike Pompeo continued his assault on China, in the latest "Wag the Dog" strategy. The consulates have now closed in Houston and Chengdu. The pressure is increasing on Huawei, The President is threatening to ban TikTok. A sale to Microsoft may follow, to save those essential video clips, for young American.
China is the enemy of the nation, Beijing, a clear and present danger. The President blames China for Covid now but in January and February he had praised Xi's response to the pandemic. Pompeo attacks China's civil rights record in Xinjiang but John Bolton has written that on two separate occasions, Trump told Xi, he should go ahead with building the Uighur camps as the "right thing to do".
Pompeo may seek to wade in on Hong Kong, but in June last year, Trump spoke with President Xi by phone, and told him he would not condemn a crackdown in Hong Kong. Trump told the press, "Hong Kong is part of China, they will have to deal with that themselves, they don't need advice".
This month Pompeo was in London to solicit support for American foreign policy but which one? Trump announced troop withdrawals from Germany and threatened to pull troops out of South Korea and Japan unless the host nations paid up.
This month China issued a warning to the UK. Stay out of Hong Kong and the South China Sea. Trade deals will be at risk if Johnson becomes a mere "Puppet of Pompeo". One Aircraft floating in a far off sea, is not a return to the glory days of Palmerston and "Civis Brittanicus Sum" ...
The Saturday Economist
John Ashcroft publishes the Saturday Economist. Join the mailing list for FREE weekly updates on the UK and World Economy.
|The Saturday Economist|
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The presentation should not be construed as the giving of investment advice.