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Exporting American Apple Pie Extremism
From:
Albert Goldson --  Cerulean Council Albert Goldson -- Cerulean Council
For Immediate Release:
Dateline: New York, NY
Tuesday, February 2, 2021

 

 


Apple Pie Origins

The “Made in America” Weimar Republic-like chaotic violence last spring and summer reached a crescendo of intensity with the dramatic assault and occupation of the US Capitol building in early last month with the temporary “planting” of the Confederate battle flag. Notwithstanding the following week the Inauguration was held, a lawful and peaceful transition but under a police state level of security underscoring the present-day brittleness of American democracy.

Because the impossible has become the plausible, certain present-day governments must be shaking in their boots fearing a surge of social upheaval and threat to their control. If the US, a beacon of political stability and civilized democratic practices, can come to the brink of implosion with the urging of elected political figures at the highest levels, then such an insurrection is not only likely, rather inevitable elsewhere. Think of this situation as the 21st century domino effect with its genesis originating in the US.

France and Germany | Turning Point Elections

The US, a democratic empire with respect to dwarfing every other nation in economic and military might and a longer and deeper running democracy, fissures are appearing in its socio-economic-political model. European democracies such as Germany and France have their respective growing legitimately elected ultra-conservative political parties which are making dramatic gains in government representation and have gained a certain level of respectability with the mainstream.

For ultra-conservative and perhaps radical political elements, America’s beacon of light has a darker and more sinister hue that has tacitly “legitimized” the next level of political aggressiveness because it is either silently supported or not challenged by their well-educated mainstream demographic.

And like their American counterparts who reach back to a delusional revisionist past chanting the mantra, “Make American Great Again”, European homegrown radicals and sympathizers espouse their own version of an undemocratic, ruthless and racist era such as the Third Reich and France’s colonial empire.

The political crossroads for Germany and France are looming on the horizon. Germany has major federal elections this fall. France’s presidential elections are scheduled to take place in May 2022. With the departure of Germany’s Chancellor Angela Merkel, there is no dynamically strong incumbent to serve as an anchor for democratic principles against ultra-conservative parties like the Alternative for Germany.

In France Marine Le Pen’s popularity is surging and according to several highly regard polls, she’s within striking distance of seriously challenging President Macron to whom she lost in a landslide in 2017. Keep in mind that President Macron was an unknown who came from nowhere in forming his own party and within a year of its formation had captured the Elysee.

The ultra-nationalists in both countries are gaining traction because of the pandemic-induced recession and deteriorating economies not to mention draconian lockdowns. Without a strong and noticeable economic recovery in the near future public sentiment will doubt the ability of traditional centrist parties and seek the alternative light, albeit a dark one, in the form of torches.

Russia | Krashing the Kremlin

Although many illiberal democracies and autocratic governments might be reveling in glee over the siege at the US Capitol building that counters the US pro-democracy advocacy, only the most near-sighted of them can’t ignore that those mob scenes may be a preview that could occur among their own citizenry. If such an insurrection could occur in Washington, DC on large scale and come within a whisker of harming high-level government officials, then anything is possible.

In the past weeks protests have swelled across a wide political-socio-economic demographic swath in 100 cities from Moscow to Vladivostok despite brutally cold weather. This has compelled Russian law enforcement to arrest and detain thousands, more than the “usual suspects” including over 80 journalists.

Nonetheless it’s not the thousands unarmed protestors that keeps Putin & Company up at night. Though visually impressive, the number of protestors doesn’t come close to threatening the present-day leadership. Rather Putin fears the erosion of political power in the upcoming legislative elections in September 2021 for the 450 seats in the State Duma of which United Russia the ruling party has 343 seats.

Strangely Putin is manifesting his own Twilight Zone déjà vu demise in the potential disintegration of his personal empire in the same way he witnessed the collapse of the Soviet Union. The sentencing of his political nemesis Alexi Navalry for 2½ years makes it difficult to determine how this will play out with future protests. But like all ultra-nationalists, the tighter the grip, the more brittle the control.

With respect to security, five years ago Putin had Cassandra Complex-like foresight to establish special National Guard as a counter-measure for such contingencies. My article entitled Putin’s SS – The Kremlin’s Bodyguards published 30 December 2016 described the consolidation of several security services to form a 350,000 man force based exclusively in Moscow under his direct command.

Turkey | Overlooked and Under-Appreciated

The country that the mainstream media frequently overlooks with respect to their socio-economic situation is the crushing poverty that the pandemic has caused the general population, pushing many in the middle class into poverty for the first time in generations. This situation is creating and stoking a potential social unrest tinderbox that Erdogan’s government is ill-equipped to resolve economically with some form of relief funds.

According to a 2019 Income and Living Conditions Survey of the Turkish Statistical Institute (TUIK) 17 million Turks live below the poverty line in a population of 81 million. The survey’s definition of “poor” is when incomes are 60% less than the median income. In Turkey that translates to 21.5 million poor families.

The 2020 survey, which would encompass pandemic related issues, won’t be released until this upcoming September. For this reason the present-day economic suffering is anecdotal rather than quantitative. Although Turkey’s presidential and general elections for the 600 member Grand National Assembly aren’t scheduled until 2023, popular discontent is growing rapidly and can boil over well beforehand.

Instability in Turkey is a critical concern for the rest of Europe because Turkey is a buffer between Europe and the anarchistic situation in the Middle East not to mention the hundreds of thousands of refugees.

Copycat Chaos

The burning questions is, “What are we in for?” The clumsy, uncoordinated, haphazard and incompetent efforts by vaccine manufacturers and governments to distribute the vaccine and continued imposition of draconian lockdowns serve as a catalyst for conspiracy theories of a masterplan orchestrated by a shadowy elite. It’s perfect public relations fodder for opposing political groups who realize that they won’t have a better opportunity than now to challenge and replace the present-day governments whether at the ballot box or otherwise.

The depth of the discontentment among a wide & deep swath of the mainstream demographic in many countries is articulated in The Atlantic’s article entitled The Capitol Rioters Aren’t Like Other Extremists, published 2 February 2021. In sum the majority of the protestors are first-time protestors, middle age professionals, with no affiliation with ultra-conservative or radical groups.

Similarly in Russia the demographics of the protestors include many first-time protestors who are middle age across the political spectrum from Stalinists, nationalist and urban professionals, not the stereotypical narrowly defined reckless youth.

Worldwide discontent occurring simultaneously in key countries that will compel these governments to batten down the hatches and focus their efforts domestically making international cooperation more difficult. Finally international cooperation on a myriad of issues will be exacerbated should there be a dramatic change in political parties in the aforementioned countries.

 

© Copyright 2021 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

 

 

The Fifth Column Arises

An extremely dark historical déjà vu reenactment is being played out present-day in real time that is recreating events in the tumultuous year of 1968. Thousands of American extras are engaged throughout the country in sowing violence & mayhem in a reenactment of the Tet offensive but on American soil potentially at the Inauguration and certainly post-Inauguration.

Already the FBI is vetting members of the National Guard brought in from numerous states who are assigned to support local law enforcement against violent protests and any other threats during the Inauguration.

·         Firstly, it seems an impossible task to vet every one of the thousands National Guardsman thoroughly enough to pass with a high degree of certainty that a member poses no threat during the ceremony.

·         Secondly, is the FBI vetting local law enforcement from which several members were alleged to be sympathetic to the pro-Trump protestors who laid siege on the Capital building?

·         Thirdly, and not least, following the old security adage, who’s vetting the FBI?

Disturbingly neither the National Guard nor local law enforcement in any part of the country have the training and experience in riot-control or have sufficient riot-specific equipment. For this reason to compensate, the temptation to use excessive force, particularly if they feel that their lives are in danger, is extremely high.

This is why the alleged pro-Trump plan to protest at 50 state capitals regardless of the size or even non-violent protest is a devious quantitative gambit. The odds of any protest, anywhere devolving into violent confrontation is high and can trigger a cascade of escalations elsewhere thanks to social media.

US Homeland Tet Offensive

The Vietcong (VC) launched the infamous Tet Offense – the Vietnamese New Year – on January 30, 1968 with simultaneous attacks on 100 towns and cities throughout the country. Their objective was to provoke a popular uprising against the South Vietnamese government. Although despite the ferocity of their efforts the VC failed militarily but won politically in the long run because it decisively turned the American public against the US government’s involvement in Vietnam.

Jumping off the pages of a Twilight Zone script, a disturbing historical parallel is unfolding domestically in which, according to the FBI, a determined and well-supported armed anti-government movement is threatening 50 state capitals. 

January | Historical Déjà Vu

The following are the astonishing historical parallels between the Tet offensive in 1968 and the present-day violence in the US 53 years later in the same month:

·         The US was deeply divided politically and racially during the 1960s and present-day with violent protests that led up to the furious assault on government buildings.

·         The VC assault took place during Tet - their Lunar New Year - while the assault on the US Capitol building took place near our political New Year called The Inauguration in the same month of January.

·         In Vietnam and the US extremist elements surprised governmental forces.

·         Anti-government forces, VC and pro-Trump extremists, assault the US Embassy in Saigon (then South Vietnam’s capital) and the US Capitol building in Washington, DC, respectively.

·         In each assault the VC and extremists breached the outer security perimeter and had the opportunity to breach the inner sanctum to kidnap, or perhaps worse, the US Ambassador and Congressional members, respectively but never did.

·         In each assault on US territory exactly 5 Americans died.

·         Throughout Vietnam assaults against US and South Vietnamese forces raged. Present-day potential violent forces are targeting government, corporate and other important buildings.

Seizing power through physical confrontation and reversing the election results is impossible. However like the VC, politically pro-Trump supporters can gain more sympathizers by planting the seeds for the GOP’s eventual return to the White House in 2024.

Because the venues for Inauguration Day are already predetermined pro-Trump supporters may encounter counter-protests at many of these venues. In other words, all hell could break loose throughout the week with the National Guard, law enforcement and citizens caught in the middle of endless riot firestorms.

The following chart entitled DC Troop Levels Five Times as High as Iraq & Afghanistan provided by the US Department of Defense, Task & Purpose, The Drive and provided by Statista, an online statistical firm, embarrassingly shows the overwhelming force required to maintain the peaceful transfer of power in the nation’s capital.

“Smile! You’re On Candid Camera!” | Citizens With Nothing to Lose

It may seem odd and ludicrous that the many pro-Trump supporters who stormed the US Capitol building not only didn’t wear masks but enthusiastically took selfies, were easily identifiable afterwards. This meant that the rioters absolutely knew beforehand that their images would be recorded by security cameras in and around Capital building but didn’t care that it would lead to criminal charges, loss of jobs or become nearly unemployable when identified.

The aforementioned is the unsettling part because it signifies that these are people who feel that they have nothing to lose and, as the adage goes, makes this group extremely dangerous. Just as the Western media is befuddled about the religious true believers in emerging and developing countries who are willing to risk everything against their respective present-day governments or join violent groups in failed states, the same is being played out domestically.

Similar to the Tet offensive, it also means that these protests will not simmer down or burn out over the course of several weeks or months, rather during the entire Biden administration until the climax of the 2024 US presidential election with the tacit support of likeminded powerful elements at the highest levels of every industry.

Interestingly there’s a stupefying weird perspective of the present-day violent surge of pro-Trump protests. During Trump’s 2016 inauguration there was a paucity of these same pro-Trump supporters to celebrate his election victory. Yet they’ve emerged from every nook & cranny in the thousands as Trump is about to leave office to fervently support him at his unabashed urging and continue the fight against the Biden Inauguration.

“Who Are Those Guys?” | Mainstream Citizens Going Mad

The following chart entitled Anti-Government Extremist Groups in the US provided by the Southern Poverty Law Center and provided by Statista, underscores the continued anti-government groups in the US. Although the number of groups have declined since the Obama administration, many of these present-day extremists – a cross-section of American society from struggling blue workers to highly-paid white collar professionals are radicalized with an unabashed willingness in committing violent acts.


The ominous coalescence of the present-day groups is that they bring a dangerous cross-section of skill sets, experience and insider knowledge from a wide variety of professions to more effectively undermine the incoming administration which makes them far more dangerous than the earlier street thuggish, anti-government groups.

Bright Light in a Narrow Tunnel

The urgency of the Biden administration is to avoid a “Dark Winter 2” in 2021-2022 at all costs. If this spring through early fall Covid cases and deaths fail to abate and supersede inoculations, and medical personnel burn-out with hospitals running out of supplies, equipment & medicine, the US could become a struggling faraway emerging country with enormous resources blocked but by incompetence and corruption.

The realpolitik is that Covid has become a sideshow, a political lightning rod for the opposition. Defeating Covid is a matter of scientific power which is slowly being accomplished.

The real issue is the faltering real economy which has enslaved millions of Americans into debt and poverty. The citizenry is infuriated because they believe that the decades-old socio-economic-political structure has failed them over the course of many administrations and caters exclusively and rather openly to the elite. To put it bluntly these citizens have many valid points. The government and corporations have the power yet lack the will to make fundamental structural changes for the public good.

With opposing sides digging in their heels unwilling to even discuss these matters in earnest, as the song goes “Something’s gotta give” but may be increasingly decided on the streets, not at the ballot box.

 

© Copyright 2021 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

 

 

Political Civil War

In a Twilight Zone déjà vu there are fascinating yet disturbing historical parallels as Inauguration Day approaches. The shot that killed the US Air Force veteran Ashli Babbitt trying to enter the US Capitol building and who now serves as the martyr rallying cry of the pro-Trump extremists, can be eerily compared to the first shot that ignited America’s Civil War at Fort Sumter in 1861, both occurring during a period of a nation deeply divided.

For some historical perspective in July 1864 Confederate Lt. General Jabal Early led a battle-hardened, grizzled military force towards Washington DC known soon to be called the Battle of Fort Stevens and almost succeeded in breaching its defenses. Fortunately for the Union, Early’s long march towards the capital under blistering summer conditions and the need to rest for several days upon arrival delayed the main assault by several days. This fortuitous delay enabled the Union Army to frantically muster enough men to carry out a canon bombardment which discouraged a main assault.

In January 2021 pro-Trump supporters had far more success with less personnel than Lt. General Early in breaching the Capitol building’s under-manned security, entered the building and came within a hairsbreadth of capturing members of Congress.as hostages

Ironically, despite pro-Trump supporters having far less firepower than Lt. General Early, the National Guard will post 20,000 in & around the city for the upcoming 2021 inauguration, slightly less than the 23,000 troops that defended Washington DC in 1864, which powerfully underscores the seriousness of the crisis.

Warlord Trump’s Werewolves

There’s no doubt that this 21st century political civil war is just getting started that will regularly go beyond heated verbal rhetoric. This third surge is undoubtedly a man-made political plague instigated by the proverbial presidential stamp of approval to not only continue rather escalate the fight well after he leaves office. The pro-Trump supporters “voted” with their military surplus boots in storming the Capitol. They may not have “captured” members of Congress but their mission was a success beyond their wildest dreams. This has only emboldened and galvanized this new movement.

More disturbingly is that this event represents a far-deeper breach into the minds of Americans and despite all its democratic laws and military might, exposes the fragility and vulnerability of America’s democracy.

Although Biden clearly won the election with the Electoral College and popular vote it was far from decisive. For this reason this non-decisive victory provides pro-Trump supporters fodder to pursue the “stolen” election claim, one that was not won “beyond a reasonable doubt”, a phrase that cannot be defined quantitatively. Only a Biden landslide would have been the coup de grâce and pre-empted mass violence at the Capitol. Interestingly the election results indicate considerably more about the weakness of Biden’s victory than of Trump’s defeat.

In war there are often a handful of violent diehard holdouts after a formal surrender encouraged by the defeated or deposed leadership. A similar situation might occur in the aftermath of Trump’s election defeat. Trump may be censored on social media yet a multitude of pro-Trump groups have already arisen to communicate his “gospel” to those who consider our constitutional laws as mere guidelines. 

In an oft-repeated historical pattern, after regimes were defeated militarily, the ousted government still held powerful political sway in present-day democracies. The US is no exception. The Trump administration and subsequent scorched earth tactics at the US Capitol building is justifiably alarming and reveals the breath & depth of his influence.

Trump’s charismatic powers run far & deep among his diehard constituency. He received over 74 million votes amongst a wide range of citizens from the unemployed, blue collar disaffected workers to the hidden, albeit wealthy and powerful, not to mention millions of sympathizers all of which represents a daunting demographic. The dramatic violent maelstrom on the Capitol building is confirmation that these 74 million strong voters have his back.

One doesn’t have to read between the lines of Trump’s public statements before, during or after the storming of the US Capitol that he’ll relish assuming the role of a post-presidential warlord and take advantage of an America, physically, economically and psychologically weakened by the pandemic.

The Two Front War

The present-day devastating pandemic surge throughout the country is a drain on the economy that threatens to blow past stress test parameters and triggers an economic seizure and possible collapse.

The incoming Biden administration, along with the “good” members of the GOP who support our democratic institutions, face a daunting two front war each of which has equal top priority:

·         The first is international, the continuing external threat primarily from the emerging troika of China, Russia and non-states, who now smell blood in the water, and intensify their cyber-intrusions.

·         The second is domestic, the internal threat from the pro-Trump continency who, aside from the violent shock troops, has hidden and powerful supporters at all levels of business and society that could undermine socio-economic recovery efforts.

The Biden administration is in an unenviable lose-lose situation that serves merely as a paper stop-gap until the decisive presidential 2024 election that will indelibly determine America’s path in the 21st century.

The Sequel | The Security Nightmare

The overwhelming attention is focused on a potential replay of violence by pro-Trump supporters not only at the inauguration rather at cities throughout the country and during the rest of this dark winter. What is overlooked or perhaps rarely mentioned, are the equally violent extreme leftist counterparts that are just itching for a “pitched battle” whether before, on or after inauguration day in any city or town in the US in a perverse re-enactment of the urban pitched battles during the Weimar Republic.

These unfolding events were articulated in my article published on 7 August 2020 entitled The Upcoming Phases of Turmoil specifying the intensity of violence before the election, the period between the election and inauguration and post-inauguration.

Furthermore the catalysts of violence are the newly inspired lone wolves and anarchists whose sole objective is violence and mayhem> They represent the accelerant that fuels the hatred by hiding under the socio-political banner of either side as they did with the nascent BLM movement.

If violent clashes escalate well past the inauguration period, there’s the potential for the state or federal government to declare a state of emergency and lockdowns. Further along should these emergency measures fail to quell the violence, they may become codified America. This step of last resort will trigger America’s descent down the slippery and often politically unrecoverable path towards a dak democracy whose constitutional rights are interpreted as privileges to be taken away selectively at the whim of the public/private, corporate/governmental masters in an organically produced domestic real-life version of the dystopian series “The Man in the High Castle”.

 

© Copyright 2021 Cerulean Council LLC

 The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

 

As approved vaccines are distributed as a priority to essential workers worldwide and soon to the general population, the decimated hospitality industry, many of whom are holding onto their fingertips at the edge of a financial abyss, will try to meet the pent-up demand by travelers whose disposable income during the lockdowns were not adversely affected and who can afford to travel.

However there are unique factors in the industry that sets it apart that will make its recovery will be extremely asymmetrical due to non-economic, non-quantitative factors.

The Traveler’s Perspective

Vacation plans for tourists, and to a lesser extent for business travelers, are heavily based on word-of-mouth references and recommendations from friends, acquaintances, and business associates. Despite the cutting-edge, marketing cyber-sophistication of the hospitality and related & supporting industries, the core fundamentals of tourism will continue to almost always be “grass roots” oriented through face-to-face conversations. Travelers use technology as a post-decision tool to secure the cheapest and most convenient way to travel, not to confirm their destination decision.

This process was brilliantly articulated in the movie The Matrix Reloaded in which Neo consulted the Oracle face to face. Imagine yourself as Neo talking to your friend the Oracle with respect to where you want to go. In the scene the Oracle explains to Neo, “You didn’t come here to make a choice. You’ve already made the choice. You’re here to understand why you made it.”

·         Firstly because of the extended lockdowns and travel restrictions no one has traveled in almost a year making references and recommendations impossible to come by.

·         Secondly, because of Covid’s fury, even older references are suspect because the status of many venues has changed dramatically, many of which have closed permanently. Everything has changed.

Once freedom of travel becomes a reality there will be limited travel choices, nothing that all the time and money can overcome which means that there’s no way to accurately predict the new tourism landscape.

Feast or Famine

The vaccine’s uneven distribution has begun with richer countries getting priority because of money, logistical distribution while developing and emerging markets, highly dependent are at the back of the line. The latter rely almost exclusively dependent on tourism for revenue.

Like the dynamics of a funnel vaccinated tourists from rich countries will have difficult traveling to developing and emerging countries may still be banned or have limited access because of on-going high public health risks in developing and emerging countries. For this reason domestic tourism will rebound, even flourish, well before international travel.

Furthermore an economy that is “opening up” is defined differently in each country and open to interpretation such as freedom of movement. Tourist may enter a country but will be restricted to specific resorts that are prison-like, gated-community. For this reason the global hospitality industry recovery will be asymmetrical and contingent on location.

Business Travelers

Business road warriors are hospitality’s revenue and profit margin bread & butter. Nonetheless even domestically there will be far fewer business travelers all of whom will be on limited budgets with shorter stays and lower entertainment expenditures.

The business traveler demographic will probably consist of the business core essentials: C-suite executives and technical/sales personnel. During the lockdowns the effectiveness of teleconferencing has been proven to resolve most issues which eliminates future business travel for mid-level personnel.

Present-Day State of Global Tourism

Global tourism is a critical component of the world’s economy. According to the World Travel and Tourism Council there are 330 million hospitality jobs worldwide which represent one-tenth of the global work force and 10.3% of the global GDP in 2019.

The United Nations World Tourism Organization(UNWTO) chart entitled Covid-19’s Crushing Impact on International Tourism provided by Statista, an online statistical service, articulates how the pandemic has adversely impacted the global hospitality industry:

“Domestically, according to the US Travel Association US travel spending is down 45% from 2019. Already 3.5 million or 40% of the travel jobs have been lost with an additional one million by year’s end.” Their forecast is that pre-pandemic levels won’t return until 2024.

Even with limited international openings, domestic tourism will far outstrip international tourism because in an increasingly unstable geopolitical world notably Americans will be more comfortable traveling in their own country with the same language, culture, and rapid ease of return travel to their hometowns in case of sudden full lockdown mandates.

With respect to the hospitality industry financially, the pandemic has been a crushing blow. The following chart developed by UNWTO and presented by Statista entitled Tourism Back to 1990 Levels as Pandemic Halts Travel powerfully underscores this reality and the difficulty in recovery:


Zero Hour | The Re-Set

Of all the components in international tourism airlines are best suited to adapt to the uneven recovery. Historically airlines are far better prepared and adaptable in adjusting to demand with fewer flights, smaller aircraft, re-routing through hubs, etc. maintain competitive pricing while securing a reasonable profit. On the other hand geographically fixed services such as hotels have a fixed costs and fixed number of rooms and do not have the means to reduce the cost of those unfilled rooms.

With respect to the international and domestic hospitality industry, the logistical challenges and manufacturing to scale of the vaccine will continue to be problematic and delay global economic recovery through most of 2021. Furthermore the continued global economic recession will depress travel & leisure demand which means that the hospitality industry recovery will be arduously slow and painful.

 

© Copyright 2021 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

 

 

The FDA and British government approvals of Covid-19 vaccines marks the beginning for the upcoming Herculean logistical effort required to inoculate billions of citizens worldwide. For this reason a robust global supply chain will be required at each stage from manufacturing to final delivery.

This global inoculation effort is unprecedented. Past inoculation efforts have been country-specific or regional to combat epidemics, not pandemics, and not without its share of complexities and inevitable difficulties. Even if one uses those earlier efforts as operational templates, the sheer depth & breadth of the forthcoming global distribution effort is far more overwhelming logistically, economically and politically. It’s one thing to have an approved and safe product, it’s another to manufacture it to scale and safely distribute it globally requiring the most stringent requirements.

Just imagine trying to supply vaccines to one city, akin to the 1947 Berlin airlift which took place over many months and saved German citizens from starvation. A similar logistical effort but on a global scale will be required to save the world from economic collapse. For this reason this is why air cargo is a key component in the critical path of this supply chain/distribution process.

Investment Opportunities in Air Cargo Transport

The major airlines will play a major role in the transport of vaccines worldwide and investment in any specific airline stock will provide a good return on investment based on a growing and long-term sustained demand for worldwide distribution. The following are the types of air companies that will literally do the heavy-lifting:

Airlines

The following three major US airlines at the forefront to transport the vaccine worldwide are:

1.    American Airlines [NASDQ: AAL]

2.    United Airlines [NASDQ: UAL]

3.    Delta Airlines [NYSE: DAL]

Airfreight Cargo

The three major airfreight cargo companies who already specialize in transporting pharmaceuticals but now must do it at scale as a priority are:

1.    Fedex [NYSE: FDX]

2.    UPS [NYSE: UPS]

3.    DHL [OTC MKTS: DPSGY]

My investment preference is Air Transport Services Group (ATSG: NASDAQ) because of their broad-based worldwide provider of air cargo. According to their website, “ATSG is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and operator of converted Boeing 767 freighter aircraft.” Their services encompass four tenets: (1) leasing, (2) operating, (3) maintenance, repair and overhaul and (4) flight & ground support. Furthermore because of their wide range of services they have more aviation logistic partners.

However the following are present-day aviation logistical challenges against the background of a strong demand that far exceeds supply:

Air Cargo Freighter Shortage

Securing the numerous mothballed aircraft configured and certified for air cargo (cargo freighters) is easier said than done. Even if all the available air cargo freighters were in operation right now, their numbers fall far short of what is required for the global transport of the vaccine.

To offset this shortage air companies are converting passenger jets to cargo freighters, the best suited being wide-bodied, long haul models. One such example is the conversion of the new but economically disappointing passenger A-380 which has a 50-ton cargo capacity.

Furthermore these large aircraft can only fulfill cargo flights between major hubs with long runways that can handle this type aircraft. Smaller air cargo aircraft will be required to transport the vaccine to secondary urban areas, non-urban areas and more remote areas.

Qualified Pilot Shortage

Another challenge is the severe shortage of pilots. Because of lockdowns and an almost cessation of air travel, many pilots were either furloughed, let go (younger pilots) or offered early retirement packages (senior pilots).

The next step is to (re)hire pilots who are experienced flying air cargo freighters and train those who haven’t. Unlike a truck driver who can learn quickly on a different model truck without passing a regulatory-mandated check ride, pilots must be certified on the particular type of air cargo aircraft. The shortage of air cargo freighters and qualified/certified pilots compounds the problem to distribute the vaccine at scale.

The following chart entitled Thousands of US Pilots Face Furlough This Fall provided by CBS News and presented by Statista, an online statistical firm, highlights the challenge of pilot callbacks to meet the surge in demand for vaccine air delivery. What should not be overlooked are the critical support services required including maintenance personnel who are also on furlough.

 

Stress Test for Global Supply Chain

Air cargo comprises less than one percent of transported goods with pharmaceuticals being one of those goods that are usually air shipped. Pharmaceutical companies have established supply chains but they are not designed for mass global distribution. For this reason its architectural structure must be heavily modified, expanded and made a priority over the shipment of regular prescription drugs such as those for high cholesterol, high blood pressure, and anti-depressants.

Early Pandemic-Related Company Investment Recommendations

With respect to pandemic-related products & services and stock recommended track record, my earlier SA article entitled SA article 25 March 2020 entitled USA: A Brutal Coronavirus Economic Reset published 25 March 2020, I was extremely bullish and recommended a strong buy for Moderna Inc. [MRNA: NASDAQ] in the biotech section who had just begun developing a vaccine. Present-day their vaccine is on the cusp of FDA approval and their stock price has exploded from $27.13 on 25 March 2020 (the publication date of my article) to $125.73 on 22 December 2020.

The logistics and air transport are unlikely to provide the explosive returns as Moderna, I believe that it’s immediate to long-term prospects for steady growth are excellent.

Outlook

Because of the aforementioned aviation logistical challenges I forecast that these air transport equipment and professional services shortages will push back the overly ambitious mass distribution and inoculation schedule well into the late summer and fall of 2021. I project that this transportation demand will continue unabated well into 2022 particularly to lesser developed countries and geographically difficult to reach regions.

Ironically the approval of additional vaccines in late winter and spring will not ease the distribution problem because they will offset the difficulties in the mass production of upcoming newly-approved vaccines. This will create an even larger ready-to-ship inventory which will outstrip the increased availability of air cargo transport equipment and professional services not to mention the stockpiling of vaccines. For this reason the need for air cargo transport services will continue well into 2022.

  

© Copyright 2020 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

 





 

 

It is an open secret of the extreme disconnect between the surge in the stock market erroneously labeled as an “economic recovery” that’s underway and the brutal suffering and reality of the common working man and woman.

Indeed there is a psychological pent-up demand, a nostalgic desire to return to the old normal in a new normal era. For this reason once the vaccine is widely distributed there will be an economic spike fueled by consumer demand but it will be short-lived as the reality of a continued broken economy and broken personal finances set in. Even your currently employed consumer will realize his limited post-pandemic financial resources because of the changing work dynamics and even pay cut if he decides to continue to work remotely.

Small Business’ Last Stand

Some “vigilante” small businesses, particularly the low profit margin eateries and bars, remain open in defiance of government mandates with respect to indoor and outdoor dining restrictions. Then there are the lucky ones in some municipalities in which the restrictions are on the books yet unenforced.

Understandably from the small business perspective it’s profits over pandemics for the purposes of survival – for the owners, not just the business - because the governmental restrictions, not the virus, represent an existential threat. They know that the cavalry is not coming because government bailouts are only for big businesses. In fact the government is seen not as the rescuing and protective cavalry of the small business owner, rather as rapturous raiders who have historically decimated their profits through capricious regulations and high taxes. For the little guy there are no parachutes. It’s “go for broke” and “go down swinging.”

How It Plays Out

The emergence from the “Dark Winter” of 2020-2021 will ignore the economic rubble with the brief spurt in consumer spending that will give the mainstream media the illusion of a V-shaped recovery underway. This ultra- short-term jump in consumer spending is just that, V-shaped spending but not V-shaped recovery. Recovery is sustainable over many months or years. The mass inoculation gives consumers freedom of movement but because of continued mass unemployment, will be still imprisoned by debt.

For this reason the markets will push further into record territory as the black-clad Pied Piper leading investors merrily over the edge because of this misread, and for others who do recognize it, pure greed thinking they can exit before it crashes. As I’ve always stated, regardless how quickly you exit is meaningless when the entire building is collapsing.

The following chart entitled Service Sector Struggles to Recover Lost Jobs provided by the US Bureau of Labor Statistics and presented by Statista, an online statistical firm, shows the dire situation of the leisure & hospitality sector which has lost almost 3.5 million jobs. The sectors that have suffered the most are the ones that are labor-intensive, difficult to automat and the last ones to make considerable recoveries.

 


These job losses are far too severe for even the most robust V-shaped economic recovery to bring it back close to pre-pandemic levels even by end of 2021. Mass unemployment, corporate reconfiguration and overhauling 2021 budgets to adapt to a less intense work environment, robotics/automation, high level of flexibility indicate a cautious, uneven, drawn out economic recovery. Corporate financial projections beyond 3 years are not better than using a dart board.

Time Compression | Short-Term is the New Long-Term

Not only immediate (or near) post-pandemic rather medium-term consumer behavior during unprecedented times. We’ve endured three catastrophes in the 21st century in less than a generation: 9/11, the Great Recession and Covid-19, all of which has directly or indirectly affected most of the world’s population.

These aforementioned catastrophes mirror the more often occurring “once-in-a-century” occurrence which has now become a misnomer. Because the intensity of these oft-occurring catastrophes are uncontrollable and unpredictable, it’s near impossible economically and psychologically to prepare properly for every type of catastrophe.

Imagine the possibility of a future far worse pandemic (Covid-19’s ease of transmission with Ebola’s lethality) or a market crash occurring in short order and longer lasting than their predecessors.

For these reasons it may prompt a redefinition of how short, medium and long-term are defined. In broad terms, when people think of long-term one imagines 10, 15 or 20 years. Using the first 20 years of this century as a baseline, short-term may now be one year, medium term 2-5 years and long-term 5-10 years – in other words a time compression outlook.

As the impossible has become the plausible, personal, business and government expenditures may take on a new dynamic with a radically different projections and risk assessment models.

 

© Copyright 2020 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

 

 

 

The pandemic has exiled many workers into the cloud – a de facto digital Off-World colony as in the dystopic movie Blade Runner which has redefined how workers communicate. The parallel to the movie, which ironically was released in 2019, the same year in which Covid appeared, is unerring to the present-day crisis. In the movie those who were could not pass the medical remained in a hyper-dense, environmental petri dish. In 2020 those whose professions require hands-on work such as essential workers in the medical field and support services as well as those in retail and blue-collar jobs, must also toil in a viral toxic environment.

During the carefree pre-pandemic era, the visual cues at work with respect to body language determined whether the worker’s body language was (in)congruent with their words.

Since the digital world has dominated communications since March and will continue well into 2021, the ability to accurately read body language has greatly diminished. With far fewer visual ‘tells’ remote work has become literally remote communication in the non-technical sense.

We Are All Digital Ambassadors

Since March those fortunate to work remotely have communicated via Zoom or similar software. Regardless of their title or positions, the worker has seized the initiative to take advantage in becoming their own movie director and producer by leveraging their home as their Hollywood studio with complete control of what viewers see.

Human contact is paramount and provides a modicum of warmth even the most austere and sterile designed office space. Remote work offers a psychological sabbatical for many workers with respect to having total control over their work environment for several reasons. Job satisfaction has been declining for years as management imposes greater demands, longer work hours, greater responsibility but stagnant pay, and limited promotional opportunities particularly for middle age workers who are trapped under the invisible glass of age-discrimination. In other words the digital workplace provides a certain albeit temporary level of empowerment.

Inception Meets The Matrix

The virtual cloud allows the ability to merge the visual special effects of the movies: The Matrix meets Inception. As a creator the worker creates and customizes his own environment and reality to “get ready for his close-up.”

Because video meetings are usually pre-scheduled, they provide the worker more time to literally “set the stage” and prepare his work and personal presentation which eliminates the sudden impromptu face-to-face meeting. This allows the worker to gradually develop an Academy Award worthy performance in a familiar and customized setting. Off-screen is “out of sight, out of mind” but beware the ‘hot’ mic. In this era of the split screen, a split-personality is the only way to go.

Putting this same high-level, on-screen performance in person at the office all day, every day is exhausting. Murphy’s Law dictates than any slip-up will occur at the wrong place, at the wrong time in the presence of the wrong person or group.

Digital Body Language | The New Baseline

Determining the new body language baseline in the digital world is far more challenging for several reasons. The primary difficult is that many workers are reinventing themselves on camera because of their remote location in their fortress home and can confidently establish new personas.

Although one can use vocal cues such as inflections, tonality, and cadence as a guide, some people verbally communicate somewhat differently in person vs on the phone vs teleconferencing in which older quirks are not visible or suppressed and new ones are accentuated.

With respect to visual cues, a considerable component of body language has been removed because one only views the upper body or perhaps only the head of the person on screen. Nervous tics, gestures, and tells can be more easily hidden by creative camera angles, lighting and positioning or simply filling the screen with the person’s face.

Because of the aforementioned reasons, the digital arrangement forces reading body language far more challenging because the baseline has shifted dramatically.

Group View vs Group Think

Body language is an important component in the face-to-face business world. However the present-day necessity and convenience of digital communications has eliminated a critical element – the collective group body language - whether internally (in-house) or externally in negotiating with an outside firm.

Face-to-face meetings often feature several members of varying seniority of a specific unit, department or division. Each individual provides his own unique specific body language baseline signature. Using these behavioral baselines, tells determine whether everybody in the unit is onboard with an idea. An example could be a manager’s effusive proposal genuinely supported by his body language yet betrayed by his underlings’ body language that convey profound reservations.

However in remote meetings, there’s only one view of each member of a group as separate individuals, not as a collective as it would be in person. To the untrained eye in remote viewing it’s impossible to determine whether the group’s body language moves in harmony or independently.

Because of this digital silo effect, monitoring the screens in which this group appears and correctly ascertaining the group dynamic is difficult by the highly controlled environment each person has created for himself for purposes of career/job self-preservation.

Remote meetings eliminate the power dynamics of the seating arrangements which provide a strong signal as to which persons have the most influence regardless of official title.

On the bright side for workers, remote meetings prevent a senior member from using psychological leverage (aka intimidation or bullying) not only in physical space but also in power settings like their office or an executive conference room.

The C-Suite Dilemma | Lost in Translation

Executives get paid the big bucks because they are the decision-makers. However because they rely heavily on face-to-face visual cues to determine the level of certainty on information provided, remote communication makes this much harder to assess despite state-of-the-art, computer-driven data.

The C-suite needs to know in their gut whether their underlings genuinely believe the figures they’ve presented, particularly with group presentations. Because of a fragile economy there’s far more at stake than market share and profitability to the point that their decisions will determine if the firm survives. This is why face-to-face meetings are more invaluable further up the corporate command chain.

In-Person Meetings On-Demand

Some firms in professions that can easily operate profitably with a large portion of their staff working remotely will begin to re-think whether important meetings are best held in-person rather than remotely. In particular in high stakes, highly competitive fields, the savvy C-suite executive may insist that his direct reports be in the office full-time and insist that they in turn do the same for their important internal meetings. The post-pandemic economic landscape is about to get rougher and seeing whether someone sweats or stays “cool, calm and collective” may make the biggest difference.

 

© Copyright 2020 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

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