Jul 6th 2019

The New Right: how a Frenchman born 150 years ago inspired the extreme nationalism behind Brexit and Donald Trump

by Pablo de Orellana and Nicholas Michelsen

Pablo de Orellanais Lecturer in International Relations, King's College London

 Nicholas Michelsen is Senior Lecturer in International Relations Theory, King's College London

 

Twitter/NigelFarage

 

Dressed in pastel-coloured Sunday best, Charles does not look like your typical far-right extremist. Yet he is a member of Génération Identitaire, a militant French youth group keen to overcome the thuggish reputation of the far right. Génération Identitaire is a key example of contemporary nationalist movements and has become particularly notorious after the attack perpetrated by one of its members in Christchurch, New Zealand.

 

Génération Identitaire’s rallies in the suburbs of French cities feature speeches lamenting the replacement of Europeans by Muslims, “métissage imposé” (forced inter-breeding), chanting “La France est à nous” (“France is ours”), and provocative marches through areas inhabited by minorities, that often descend into beatings. These young nationalists told us that they march to reclaim Europe from foreign invasion by migrants that destroy French culture, stifle their aspirations, steal their jobs, their cities, and even their women.

They also seek to demonstrate the kindness of their ideas by assisting homeless people with food, clothes and hot drinks – but only if the people they help are French and, more specifically, “français de souche”, which usually refers to having white French ancestors.

As we march through the Parisian streets, Charles explains that Génération Identitaire is fuelled by love for the “real” French. For him, it is natural that patriotism should produce love for “his” people, as we saw with the beggars, as well as hatred and violence towards foreigners and feminists. Charles, following the example of Identitarian leaders, believes that nature has already produced a perfectly functional Western culture based around white race, Christianity and a “proper” social order.

Generation Identitaire, November 7 2017. Pulek1/Wikimedia Commons, CC BY-SA

They argue that any change in that “nature”, such as inclusion of foreigners or changes to the social role of women, is bound to destroy Western cultures. This is not racist, xenophobic or even harassment, Charles reassures as the march pauses to scream at a dark-skinned young woman to “go home”.

In common with the American alt-right and many anti-migration nationalists throughout the West, Charles believes that it is only natural that an identity looks after its own kin at the expense of others. It is not hatred, Charles insists, just self-preservation.


This article is part of Conversation Insights

The Conversation’s Insights team generates long-form journalism derived from interdisciplinary research. The team is working with academics from different backgrounds who have been engaged in projects aimed at tackling societal and scientific challenges. In generating these narratives we hope to bring areas of interdisciplinary research to a wider audience.

You can read more Insights stories here.


The New Right

Nationalists such as Charles often refer to themselves as the New Right, or read thinkers who do. They are not all as radical as he is, but a diverse grouping of politicians share the stream of New Right ideas. These include Donald Trump, Brexiteers like Jacob Rees-Mogg, European nationalists like Marine Le Pen, Matteo Salvini and Viktor Orbán, and newcomers such as Santiago Abascal and his Vox party in Spain.

All of these politicians maintain informal yet relatively loyal alliances with more extreme groups like Génération Identitaire, the US alt-right, or Fratelli d’Italia. Such groups bring together young activists and champion extreme nationalist causes and campaigning. Not content with democratic engagement, they act vigorously online and in the street against those they consider as threats to their very survival: immigrants, feminists and liberals.

It is very common for liberals and leftists to accuse new nationalists like Trump or Le Pen of returning to 1930s Nazism. Such accusations of fascism are mostly aesthetic: insults hurled at nationalists by ever more outraged liberal echo chambers. To nationalists, all opponents have become communist feminists; to liberals, nationalists are all wannabe Hitlers.

 

Our new research shows that the nationalist far right arises from a deeper history. New Right ideas are clearly not a revival of 1930s fascism. Despite some similarities, today’s nationalists are more directly inspired by a late 19th-century French line of thinking.

We spent the last two years analysing hundreds of documents written by New Right thinkers and their forebears to explain how and why these ideas take root. This ideological history is important if today’s nationalists are to be understood, and if there is to be any hope of overcoming the racism and sexism inherent to their ideas.

What our research shows is that we are living through the latest battle in a 300-year long ideological war over the meaning of humanity itself. On one side is the belief in a universal idea of humanity, which produced notions of equal rights, humanism and liberalism. Opposing it is the belief that marks all forms of nationalism: that humanity is not a single entity but rather, one divided by nature into national identities.

Beginnings

Nationalism is the dark cousin of liberalism. Both seek to establish freedoms and rights. If the French Revolution gave rise to the “rights of man”, Napoleon’s subsequent coup and his idea of the “nation” argued that only the French, not all men, should enjoy those rights. Half a century later, nationalism was being regularly used by politicians like Otto von Bismarck to confront expanding claims to political rights with the argument that the national necessity of a vaguely defined identity trumped granting certain rights to citizens.

Napoleon’s Return from Elba, Charles de Steuben, 1818. Wikimedia Commons

These ideas drew heavily on ethno-nationalist geopolitics, which treated each nation as a distinct species struggling for survival. International relations was viewed as a zero-sum game where the survival of a nation sometimes necessitates the destruction of others.

Then Maurice Barrès came along 1897. He was the thinker behind a very specific set of nationalist ideas that developed more restrictive definitions of national identity than those of the previous nationalist pioneers. His idea of nationalism was focused on birth and culture, rather than civil belonging (as for Napoleon) or loyalty (as for Bismarck). Our research has found that key ideas in today’s New Right find their roots in Barrès and especially retain his ideas about culture and racial birth.

French nationalist Maurice Barrès. Wikimedia Commons

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barrès theorised that the culture and integrity of a nation was “eternal”, and that any change to it, whether brought about by foreign influence or progressive politics, would bring about its demise. Any cultural change, be it to the arts, to the role of women, or to racial assumptions, was seen to erode the spirit of the nation and its way of life. Ideas about the state, belonging and politics, which emerged from Barrès and like-minded thinkers like Charles Maurras tended to advocate racial and cultural exclusion as necessary to national survival.

The key idea introduced by Barrès was the link between race and culture. It meant that culture needed to remain unchanged if it was to survive, as did the race that produced it. Even more importantly, it introduced the notion that any progressive, modern or culture-changing idea endangered the nation’s survival. This idea has found its way to the heart of New Right nationalism today, which is why they attack liberals, socialists, feminists, progressives, and their institutions as much as foreigners.

 

Fascist nationalism

Today’s New Right share much more with these 19th-century nationalists than the fascists of the 1920s and 1930s, like Benito Mussolini, Adolf Hitler, Francisco Franco and Turkey’s Mustafa Kemal. Yet it is important to understand why.

Fascists also believed that geopolitics was characterised by competition between states struggling for survival. But, rather than professing faith in the status quo, they pursued a revolution in all aspects of society to prepare for this existential struggle. They advocated radical social and even biological change. Cultural change was not avoided – as it is by nationalists today and was in the 19th century – but designed for.

Nazi propaganda photo: a mother, her daughters and her son in Hitler Youth uniform. German Federal Archives, CC BY-SA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mussolini, for example, sought to dismantle Italian family values and relations, so as to foster new relations between individuals and the state. Working Italians were organised to eat, exercise and even socialise together, rather than with their families. This proposed a huge change to everyday life, reforming the structure of society to instil loyalty to the state and its leader.

Likewise, fascists sought racial purification and expansion through modern science. In anticipation of populating huge empires after the destruction of their original populations, Nazi scientific ambitions sought to double the German population by intervening in women’s bodies to ensure each pregnancy yielded twins.

Fascist nationalism gave total control to a saviour-leader. It demanded total discipline over the entire country and all of its social, cultural, biological, economic and even artistic functions.

Nostalgia and purification

Fascist revolution is clearly not the intellectual precedent of the nationalisms of today. The fascist generation of nationalists hoped to radically change their societies. Today’s nationalists want only to stop and reverse social change.

If we explore the New Right’s reasons for wishing to do so, we find the idea, pioneered by Barrès, that cultural change signifies decadence and corruption. This is why nationalists in our time have no plans to supercharge and empower their nation. They don’t need one. They believe in the perfection of national culture, and want to set it free from any presumption of equality with other identities. Once freed in this way, they argue, culture will thrive and fulfil its innate potential.

This is why today’s nationalists are so nostalgic. It is also why they consistently speak of culture, not race. Indeed, they are often vocal in claiming that race is not their concern. They can do this because the idea of birth-culture inherited from Barrès is already based on race.

As their intellectual pioneer, French philosopher Alain de Benoist, argued in 1999:

Mankind as such does not exist, because their membership within humanity is always mediated by a particular cultural belonging … Biological differences are significant only in reference to social and cultural givens.

Here, race is relevant only insofar as it determines which culture an individual may belong to. Cultural belonging is underpinned by birth, which is why speaking and defending culture, as the New Right does, has powerful racial implications. But conveniently, the emphasis on culture circumvents restrictions on – and public revulsion for – overt racism.

The assumption that cultures are caught in a permanent struggle for survival is liable to tend toward extremes. Many on the alt-right in America and in movements like Génération Identitaire in Europe have already taken these beliefs to their inevitable conclusion: that a global race war needs to be fought to ensure the survival of the white race.

The gunman who attacked a mosque in Christchurch, New Zealand, like Anders Breivik in Norway in 2011 and the Charlottesville protesters in 2017 in the US, was not only a member of Génération Identitaire, but certain that his actions were the first shots in a struggle over the survival of “Europeans”.

Birth-culture

The New Right, like Barrès before them, purport that culture is biologically mediated rather than socially determined. If one is of the wrong biology then participating in another culture is difficult, if not impossible. The restoration of the nation logically requires the purification of culture and – by implication – race.

By the same token, any assumption of equality among identities is a kind of betrayal of the nation, which undermines its chances of survival. This explains all sorts of very real grievances to voters, from poverty to social frustrations. All of these are attributed to an upending of the natural order that gives equal rights to those who have no “natural” stake in a culture.

The same intellectual mechanism is responsible for the New Right’s fixation with gender. Just as biology determines which culture one may or may not belong and thrive in, biological differences between sexes are seen to determine women’s social and political role.

The liberation of women is viewed as a prime example of how liberal humanist assumptions about equality are unnatural and destroy culture. Women’s control of their reproductive functions is viewed as undermining the nation’s survival in yielding to the selfish caprice of women that refuse to play their nature-given, distinctive, part.

The Brexit referendum campaign and Salvini’s 2017 electoral campaign in Italy are excellent examples of how these ideas can unfold in practice. Leavers like Farage, for example, never argued that migration was to be limited due to racial difference, but demanded the right to “retake control of our borders” in the name of the preservation and prosperity of the nation and its culture. Salvini likewise avoids race and focuses on the right of Italians to prevent migration and ensure Italy’s survival. And, like Vox in Spain, he advocates a rollback of Italian women’s rights, beginning with contraception, to restore “the natural order”.

New Right ideas centre around the claim that nature should determine the structure of society and politics, and so their advocates seek to restore what they see as the natural state – one determined by inequality among identities. This is contrasted against liberal ideas that subvert the natural order of different genders, identities and the struggle among nations.

Alt-right meme of Christopher Colombus as an example of white birth-culture achievement. His face is Pepe the Frog, a symbol of alt-right rebelliousness. Author provided

Truth, red pills and conspiracies

The war against the rights of foreigners and of women takes us to the heart of contemporary nationalist ideas. To betray the “natural order” is a betrayal of one’s own identity and its survival. Their war is against the liberal understanding of equality.

This has implications for how the New Right think about truth. They have determined that mainstream news cannot be believed using an idea sometimes referred to as “the cathedral”. This posits that modern universities, media and cultural institutions function to establish and enforce faith in liberalism, viewed as a kind of new religion. The New Right argue that any rational questioning of liberal beliefs around gender, race or culture becomes heresy. This suggests that the New Right see themselves as the true heirs to the Enlightenment project to free humanity from ignorance and superstition.

New Right politicians prove their credibility through willingness to publicly depart from irrational faith in liberal ideas, so as to represent the legitimate interests of the identity that is “left behind”. This is why Michael Gove, the UK’s Secretary of State for Environment, was able to casually throw scientific expertise out the window in the Brexit referendum and why Trump survives the spectacle of issuing “alternative facts” from the White House.

For this reason, the New Right’s characteristic loathing for political correctness is not just a matter of humour and off colour jokes. It signals to supporters that their leaders are willing to transgress liberal power. Trump’s “grab them by the pussy” as well as regular chauvinistic comments from New Right politicians like Nigel Farage and Salvini play so well with supporters because they are read as a promise to return public discourse to a natural state of freedom.

New Right ideas about survival and identity coalesce in the belief that they have seen through an “unnatural” story woven by liberals. Consider the concept of the “red pill”, common in New Right online discussion threads, which refers to a scene from the Matrix in which Neo is asked whether he wishes to see harsh reality or a pleasant illusion. To be red-pilled is to see “the truth”: a world destroyed by liberal assumptions of equality, between genders and national identities, but also between weak and strong, rich and poor, masking the natural condition that rewards strength and punishes weakness.

Going mainstream

Conspiracy theories flourish today. In fact, they are now mainstream. Hitherto the fare of online cranks, frustrated teenagers and professional conspiracy theorists like Alex Jones, in the early 2010s New Right ideas began to take off thanks to specific grievances that they claimed to explain.

The online incubation of New Right ideas in the run up to Trump’s election was underwritten by the argument that gains from a millennia of white male leadership are being undermined by “libtards” (“liberal retards”) and “SJWs” (“social justice warriors”) informed by “fake news” and wracked by “white guilt” who give away the achievements of Europeans to others, and even undermine their own survival by losing control of their women.


Read more: Something's going on here: Building a comprehensive profile of conspiracy thinkers


This way of thinking is used to explain all manner of grievances ranging from shifts in the world of work, loss of control over one’s destiny, hopelessness, and community decay. If one buys into their assumptions, their ideas make sense on their own terms and seem to offer immediate solutions to these problems.

Disparate movements have united around these grievances. So New Right politicians often form strange but powerful electoral alliances. The basic template usually seeks to secure a broader vote by mainstreaming or taking over a party (as with Trump’s takeover of the Republican Party) while retaining the extremist vote through proxies that are neither overtly recognised as allies nor disavowed (the alt-right and even the KKK in Trump’s case).

This system of New Right electoral alliances clearly emerged in the Brexit referendum: despite superficial disagreements, Vote Leave, Leave.EU and UKIP never fully contradicted one another. The same is true of Trump’s Republicans and alt-right “very fine people”; Le Pen’s Front (now Rassemblement) National and Génération Identitaire; and Salvini’s Lega and Fratelli d’Italia, Forza Nuova and Casa Pound. These alliances are mostly leaderless, unstable and scarily undisciplined.

Shapeshifters

This is what makes this new generation of nationalism truly viral. Without a permanent structure, these shapeshifting alliances can dodge attacks by reinventing new coalitions of similar members, as occurred with Farage’s Brexit Party.

These coalitions depend on the continued presence of grievances that directly affect people’s lives, particularly growing poverty even when working, the collapse of stable and safe social identities linked to work, the increasing instability of employment security, and the rapid change of local communities due to emigration, migration, collapsing housing affordability, and redevelopment initiatives that displace communities. These provide precise and urgent electoral rallying points.

They are particularly effective given that so many mainstream politicians ignore these basic grievances. In recent years, the lineup of politicians opposing the New Right – Hillary Clinton, the Remain campaign, Emmanuel Macron and Matteo Renzi – have been unwilling to even recognise these structural problems. This provided the New Right the opportunity to appear credible, simply by acknowledging them. They also appear to offer elegant solutions to these societal issues – all of which are based on a return to the “natural” order.

The New Right stems from 19th-century ideas, updated for our times. It ultimately promotes a rather sad view of humanity, where everything is determined by nature, not by individual choice. A world where culture is biologically mediated, immobile and restricted, not the fruit of learning and creativity.

If their success is to be confronted, the basic grievances they claim to resolve will need to be addressed and solutions offered. But if the contradictory informal, yet powerful alliances among nationalists today are to be challenged, the working mechanics of New Right ideas must be understood.

Pablo de Orellana, Lecturer in International Relations, King's College London and Nicholas Michelsen, Senior Lecturer in International Relations Theory, King's College London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Browse articles by author

More Current Affairs

May 27th 2020
EXTRACT: "Obamagate is the latest conspiracy theory to be pushed by US president, Donald Trump. It started on the morning of May 10, when Trump retweeted the word “OBAMAGATE!” By the next day, the Obamagate hashtag had accrued over two million tweets and another four million by the end of the week. Trump has repeatedly reused the slogan on his Twitter feed since and it has been promoted by right-wing influencers including Glenn Beck, Sean Hannity and many others....You are not alone if you’re confused by what Obamagate actually is or why Trump is tweeting about it."
May 23rd 2020
EXTRACT: "Not all aspects of our near and medium-term future can be foreseen at this juncture of the Covid-19 pandemic, but we now know enough to make some hypotheses about what is likely to change, based on what has already changed. The future is sure to look very different than it did before this decade began, regardless of whether a vaccine is found. If a vaccine is found, it is unlikely to be tested, approved, manufactured, and efficiently distributed to the world’s population of nearly 8 billion people for years. Bearing in mind that there is no vaccine for any coronavirus, what is likelier is that the world will be living with Covid-19 as a part of our ecosystem for many years to come – possibly permanently. That means that our new normal is probably already here."
May 21st 2020
EXTRACT: "LONDON – The new Franco-German proposal for a €500 billion ($547 billion) European recovery fund could turn out to be the most important historic consequence of the coronavirus. It is even conceivable that the deal struck between German Chancellor Angela Merkel and French President Emmanuel Macron might one day be remembered as the European Union’s “Hamiltonian moment,” comparable to the 1790 agreement between Alexander Hamilton and Thomas Jefferson on public borrowing, which helped to turn the United States, a confederation with little central government, into a genuine political federation."
May 19th 2020
EXTRACT: "In April 2011, Donald Trump, then considering a run for the presidency the following year, said that he had sent investigators to Hawaii to check out rumors that President Barack Obama wasn’t born there, but in Kenya, which would disqualify him for the presidency. His investigators, Trump declared, “cannot believe what they’re finding.” I can find no record of Trump being challenged on this outlandish claim at the time. In the fall of 2016, Trump, now the Republican presidential nominee, was convinced by his staff that he had to abandon this “birther” nonsense. He did so reluctantly, charging – also with no evidence – that such rumors had actually been initiated by his opponent, Hillary Clinton. There, in a nutshell, is Trump’s modus operandi: he’s not just a liar but a fabulist, seemingly unconcerned with whether his fictions will be exposed. If they are, the world simply moves on as he invents fresh distractions."
May 19th 2020
EXTRACT: "Li, a doctor, was purportedly silenced and chastised by Chinese officials for warning on December 30, 2019, about a new virus in the Wuhan hospital where he worked. When it became evident that he was on to something serious – so serious, in fact, that it ultimately killed him – the Chinese government changed its tune and celebrated Li’s bravery. If only that had happened sooner, the argument goes, the world would have avoided this horrific pandemic.................... But that’s not what happened."
May 9th 2020
EXTRACT: "Jana Winter and Hunter Walker at Yahoo News broke the story that 11 Secret Service agents have tested positive for the coronavirus. Likely some of them served in the West Wing. This week it was revealed at that a US military valet who brought Trump food came down with the virus, sending Trump into a “lava level” rage. Two aides to Vice President Mike Pence have tested positive. Some observers are afraid that the virus is circulating in the West Wing itself."
May 6th 2020
EXTRACT: "There has been much debate around the world about the source of the COVID-19 pandemic, ranging from a laboratory to Wuhan’s seafood market to some other form of animal-to-human transmission. While there is no proof (yet) that the virus may have been inadvertently released from one of the two biological research laboratories located at Wuhan, there is evidence that viral release has occurred in the past, and a host of additional data that point to a laboratory connection. "
May 4th 2020
EXTRACT: "A better bet is that nothing will be the same. Wealth will be destroyed on a catastrophic scale, and policymakers will need to find a way to ensure that, at least in some cases, creditors take part of the hit, a process that will play out over years of negotiation and litigation. For bankruptcy lawyers and lobbyists, it will be a bonanza, part of which will come from pressing taxpayers to honor bailout guarantees. Such a scenario would be an unholy mess."
Apr 29th 2020
EXTRACT: "We need the twenty-first century’s two superpowers, America and China, to set the example, by burying their rivalry and uniting all of humankind around a collective response to the current crisis, and to those that await us. As COVID-19 has taught us, the old international system can no longer guarantee humankind’s safety and security. We cannot afford to be taught that lesson twice."
Apr 29th 2020
EXTRACT: "It should come as no surprise that Trump has abused his power in orchestrating the federal response to the pandemic. For example, he made sure that Colorado received 100 much-needed ventilators, and made sure that Colorado voters knew it, in order to help re-elect troubled incumbent Republican senator Cory Gardner.  More alarming, Trump effectively threatened to wage germ warfare against US Postal Service workers by denying them congressionally approved virus-mitigation aid unless the USPS quadrupled rates on packages. Trump’s actual target was Jeff Bezos, the CEO of Amazon and owner of The Washington Post."
Apr 28th 2020
EXTRACT: "These ten risks, already looming large before COVID-19 struck, now threaten to fuel a perfect storm that sweeps the entire global economy into a decade of despair. By the 2030s, technology and more competent political leadership may be able to reduce, resolve, or minimize many of these problems, giving rise to a more inclusive, cooperative, and stable international order. But any happy ending assumes that we find a way to survive the coming Greater Depression."
Apr 26th 2020
EXTRACT: "In response to the COVID-19 pandemic, the US Federal Reserve will buy unlimited quantities of Treasury bonds, the Bank of England will purchase £200 billion ($250 billion) of gilts, and the European Central Bank up to €750 billion ($815 billion) of eurozone bonds. Almost certainly, central banks will end up providing monetary finance to fund fiscal deficits. The only question is whether they should make that explicit."
Apr 25th 2020
EXTRACT: "Even if you’re not enamoured with creepy crawlies, their gradual disappearance from the places they were once numerous is an ongoing crisis for the natural world. Insects and small invertebrates occupy the bottom rungs of most terrestrial ecosystems. As ecologist E.O. Wilson once observed, if you take away the “little things that run the world” then most of the creatures occupying niches further up the food chain will disappear too, and that includes humans. That’s why a 2017 study in Germany rang so many alarm bells – it reported a 75% decline over 27 years in the local biomass of all kinds of flying insects."
Apr 24th 2020
EXTRACT: "By 2000, China had already established near monopoly status on the manufacture of a whole range of products that the world rapidly consumes. Just a decade ago, 91% of all personal computers, 80% of all air conditioners, 74% of global solar cells, 71% of cell phones, and 60% of all cement were being manufactured in China. The world was hooked on Chinese-made products and the Chinese government had its way with foreign companies choosing to manufacture goods there, enforcing many draconian operating requirements in an environment that most companies would never have agreed to endure anywhere else."
Apr 20th 2020
Extracts: "Long before people and goods were traversing the globe non-stop, pandemics were already an inescapable feature of human civilization.........Nearly two millennia before London’s Great Plague, during the epidemic that killed at least one-third of Athenians near the end of the Peloponnesian War.............Epidemics not only ravage economies, but also throw societal inequalities into sharp relief, deepening deepen mistrust in the status quo........... Machiavelli, who witnessed – and probably died in – the plague in Florence in 1527, viewed the outbreak as the direct result of misrule. Criticisms of China, Trump, British Prime Minister Boris Johnson, and others have echoed this sentiment....Others view epidemics through the lens of conspiracy theories. Marcus Aurelius blamed the Christians for the Antonine Plague. In Christian Europe, the fourteenth-century Black Death was blamed on the Jews......Despite these similarities, the COVID-19 pandemic is likely to stand out in a crucial way: it is unlikely to upend the established order. The Antonine and Justinian Plagues encouraged the spread of Christianity throughout Europe. The Black Death drove people toward a less religious, more humanistic view of the world – a shift that would lead to the Renaissance. The Spanish flu prompted uprisings, massive labor strikes, and anti-imperialist protests; in India, where millions died, it helped to galvanize the independence movement."
Apr 17th 2020
EXTRACT: "From peddling disinformation about the virus to disbanding the National Security Council directorate overseeing pandemic threats, Trump has squandered multiple opportunities to get ahead of the COVID-19 crisis. The health and economic consequences that we are now experiencing have long been predicted. US intelligence analysts were warning about precisely this scenario for at least 12 years. But even they could not foresee that America would end up with a president willing to sacrifice so many lives on the altar of his ego."
Apr 9th 2020
EXTRACTS: ".........[1] The average bankruptcy takes 260 days to work out. During that period, businesses will have a hard time rebuilding.......[2]...consider the complexity of the global supply chain. More than 90% of Fortune 1,000 companies have at least one tier-2 (secondary) supplier in Hubei, the Chinese province around Wuhan.........[3]...disturbingly, 40% of all US corporate debt was rated BBB, just above junk, going into the crisis, while only 30% of the world’s outstanding stock of non-financial corporate bonds were rated A or above..........[4] Despite central bank interest-rate cuts, borrowing costs for companies are now rising dramatically. With further downgrades from credit ratings agencies all but guaranteed, especially with many big earnings announcements due after Easter, some companies will lose access to credit altogether. Moody’s estimates that the default rate for junk-rated companies could hit an astounding 10%, compared to a historical average of 4%......[5]...flu vaccines are relatively ineffective. They reduce your risk of becoming ill by 40% to 60%, compared to 97% for measles vaccines and 88% for mumps........[6] Lockdowns might end, while other measures like social distancing, limits on gatherings and travel restrictions continue – perhaps on a seasonal basis......[7] South Korea could be a glimpse into the future. It has so far avoided an Italian-style health crisis without a lockdown, but has still imposed various restrictions on the economy."
Apr 8th 2020
EXTRACT: "A recent study, published in the British Medical Journal, suggested that 78% of people with COVID-19 have no symptoms. The findings are in line with research from an Italian village at the epicentre of the outbreak showing that 50%-75% were asymptomatic, but represented “a formidable source” of contagion. A recent Icelandic study also showed that around 50% of those who tested positive to COVID-19 in a large-scale testing exercise were asymptomatic. Meanwhile, a WHO report found that “80% of infections are mild or asymptomatic, 15% are severe infections and 5% are critical infections................The new BMJ study is seemingly different to the findings of studies from earlier in the pandemic, which suggested that the completely asymptomatic proportion of COVID-19 is small: 17.9% on the Diamond Princess Cruise Ship and 33.3% in Japanese people who were evacuated from Wuhan.”
Apr 8th 2020
EXTRACT: "Spooked by COVID-19, Americans not only stripped supermarket shelves of toilet paper and pasta, but also drove gun sales higher than ever. Apparently, many of these recent gun buyers never purchased a firearm before. Lobbyists for the US gun industry want gun stores to be counted as “essential” businesses, like food shops and pharmacies. A number of states have readily complied, as has the Department of Homeland Security. Jay Pritzker, Governor of Illinois, declared that “firearm and ammunition suppliers and retailers, for purposes of safety and security” should indeed be allowed to continue supplying these alleged necessities."
Apr 8th 2020
EXTRACT: "........until the health crisis is resolved, the economic situation will look exceedingly grim. And even after an economic restart, the damage to businesses and debt markets will have lingering effects, especially considering that global debt was already at record-breaking levels before the crisis began..............Given that the 2008 financial crisis produced deep political paralysis and nurtured a crop of anti-technocratic populist leaders, we can expect the COVID-19 crisis to lead to even more extreme disruptions. ............it is possible that stock-market losses so far have been less than those of 2008 only because everyone remembers how values shot back up during the recovery. But if that crisis does turn out to have been a mere dry run for this one, investors shouldn’t expect a quick rebound."