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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
Sunday, February 28, 2021

 

 


Apple Pie Origins

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

Because the impossible has become the plausible, certain present-daygovernments must be shaking in their boots fearing a surge of social upheavaland threat to their control. If the US, a beacon of political stability andcivilized democratic practices, can come to the brink of implosion with theurging of elected political figures at the highest levels, then such aninsurrection is not only likely, rather inevitable elsewhere. Think of thissituation as the 21st century domino effect with its genesis originatingin the US.

France and Germany | Turning Point Elections

The US, a democratic empire with respect to dwarfing everyother nation in economic and military might and a longer and deeper runningdemocracy, fissures are appearing in its socio-economic-political model. Europeandemocracies such as Germany and France have their respective growing legitimatelyelected ultra-conservative political parties which are making dramatic gains ingovernment representation and have gained a certain level of respectabilitywith the mainstream.

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

And like their American counterparts who reach back to a delusionalrevisionist past chanting the mantra, “Make American Great Again”, European homegrownradicals 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 loomingon the horizon. Germany has major federal elections this fall. France’s presidentialelections are scheduled to take place in May 2022. With the departure ofGermany’s Chancellor Angela Merkel, there is no dynamically strong incumbent toserve as an anchor for democratic principles against ultra-conservative partieslike the Alternative for Germany.

In France Marine Le Pen’s popularity is surging andaccording to several highly regard polls, she’s within striking distance ofseriously 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 informing his own party and within a year of its formation had captured theElysee.

The ultra-nationalists in both countries are gainingtraction because of the pandemic-induced recession and deteriorating economies notto mention draconian lockdowns. Without a strong and noticeable economicrecovery in the near future public sentiment will doubt the ability oftraditional 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 governmentsmight be reveling in glee over the siege at the US Capitol building thatcounters the US pro-democracy advocacy, only the most near-sighted of themcan’t ignore that those mob scenes may be a preview that could occur amongtheir own citizenry. If such an insurrection could occur in Washington, DC onlarge scale and come within a whisker of harming high-level governmentofficials, then anything is possible.

In the past weeks protests have swelled across a wide political-socio-economicdemographic swath in 100 cities from Moscow to Vladivostok despite brutallycold 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 thatkeeps Putin & Company up at night. Though visually impressive, the numberof protestors doesn’t come close to threatening the present-day leadership. RatherPutin fears the erosion of political power in the upcoming legislativeelections in September 2021 for the 450 seats in the State Duma of which UnitedRussia the ruling party has 343 seats.

Strangely Putin is manifesting his own Twilight Zone déjà vudemise in the potential disintegration of his personal empire in the same wayhe witnessed the collapse of the Soviet Union. The sentencing of his political nemesisAlexi Navalry for 2½ years makes it difficult to determine how this will playout with future protests. But like all ultra-nationalists, the tighter thegrip, the more brittle the control.

With respect to security, five years ago Putin had CassandraComplex-like foresight to establish special National Guard as a counter-measurefor such contingencies. My article entitled Putin’sSS – The Kremlin’s Bodyguards published 30 December 2016 described theconsolidation of several security services to form a 350,000 man force based exclusivelyin Moscow under his direct command.

Turkey | Overlooked and Under-Appreciated

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

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

The 2020 survey, whichwould encompass pandemic related issues, won’t be released until this upcomingSeptember. For this reason the present-day economic suffering is anecdotalrather than quantitative. Although Turkey’s presidential and generalelections for the 600 member Grand National Assembly aren’t scheduled until2023, popular discontent is growing rapidly and can boil over well beforehand.

Instability in Turkey is a critical concern for the rest ofEurope because Turkey is a buffer between Europe and the anarchistic situationin 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 distributethe vaccine and continued imposition of draconian lockdowns serve as a catalystfor conspiracy theories of a masterplan orchestrated by a shadowy elite. It’sperfect public relations fodder for opposing political groups who realize thatthey won’t have a better opportunity than now to challenge and replace thepresent-day governments whether at the ballot box or otherwise.

The depth of the discontentment among a wide & deepswath of the mainstream demographic in many countries is articulated in The Atlantic’sarticle entitled TheCapitol Rioters Aren’t Like Other Extremists, published 2 February 2021. Insum 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 protestorsinclude many first-time protestors who are middle age across the politicalspectrum from Stalinists, nationalist and urban professionals, not the stereotypicalnarrowly defined reckless youth.

Worldwide discontent occurring simultaneously in keycountries that will compel these governments to batten down the hatches andfocus their efforts domestically making international cooperation moredifficult. Finally international cooperation on a myriad of issues will beexacerbated should there be a dramatic change in political parties in theaforementioned countries.

 

© Copyright 2021 Cerulean Council LLC

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

 

 

The Fifth Column Arises

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

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

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

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

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

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

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

US Homeland Tet Offensive

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

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

January | Historical Déjà Vu

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

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

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

·        In Vietnam and the US extremist elementssurprised governmental forces.

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

·        In each assault the VC and extremists breachedthe outer security perimeter and had the opportunity to breach the innersanctum to kidnap, or perhaps worse, the US Ambassador and Congressionalmembers, respectively but never did.

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

·        Throughout Vietnam assaults against US and SouthVietnamese forces raged. Present-day potential violent forces are targetinggovernment, corporate and other important buildings.

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

Because the venues for Inauguration Day are alreadypredetermined pro-Trump supporters may encounter counter-protests at many ofthese venues. In other words, all hell could break loose throughout the weekwith the National Guard, law enforcement and citizens caught in the middle of endlessriot firestorms.

The following chart entitled DCTroop Levels Five Times as High as Iraq & Afghanistan provided by theUS Department of Defense, Task & Purpose, The Drive and provided byStatista, an online statistical firm, embarrassingly shows the overwhelmingforce required to maintain the peaceful transfer of power in the nation’scapital.

“Smile! You’re On Candid Camera!” | Citizens With Nothingto Lose

It may seem odd and ludicrous that the many pro-Trumpsupporters who stormed the US Capitol building not only didn’t wear masks butenthusiastically took selfies, were easily identifiable afterwards. This meantthat the rioters absolutely knew beforehand that their images would be recordedby security cameras in and around Capital building but didn’t care that itwould lead to criminal charges, loss of jobs or become nearly unemployable whenidentified.

The aforementioned is the unsettling part because it signifiesthat these are people who feel that they have nothing to lose and, as the adagegoes, makes this group extremely dangerous. Just as the Western media isbefuddled about the religious true believers in emerging and developingcountries who are willing to risk everything against their respectivepresent-day governments or join violent groups in failed states, the same is beingplayed out domestically.

Similar to the Tet offensive, it also means that theseprotests will not simmer down or burn out over the course of several weeks ormonths, rather during the entire Biden administration until the climax of the2024 US presidential election with the tacit support of likeminded powerfulelements at the highest levels of every industry.

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

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

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


The ominous coalescence of the present-day groups is thatthey bring a dangerous cross-section of skill sets, experience and insiderknowledge from a wide variety of professions to more effectively undermine theincoming administration which makes them far more dangerous than the earlier streetthuggish, anti-government groups.

Bright Light in a Narrow Tunnel

The urgency of the Biden administration is to avoid a “DarkWinter 2” in 2021-2022 at all costs. If this spring through early fall Covidcases and deaths fail to abate and supersede inoculations, and medicalpersonnel burn-out with hospitals running out of supplies, equipment &medicine, the US could become a struggling faraway emerging country withenormous 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 ofscientific power which is slowly being accomplished.

The real issue is the faltering real economy which has enslavedmillions of Americans into debt and poverty. The citizenry is infuriated becausethey believe that the decades-old socio-economic-political structure has failedthem over the course of many administrations and caters exclusively and rather openlyto the elite. To put it bluntly these citizens have many valid points. Thegovernment and corporations have the power yet lack the will to make fundamentalstructural changes for the public good.

With opposing sides digging in their heels unwilling to evendiscuss these matters in earnest, as the song goes “Something’s gotta give” butmay 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 providesprescient, beyond-the-horizon, contrarian perspectives and risk assessments ongeopolitical dynamics and global urban security.

 

 

Political Civil War

In a Twilight Zone déjà vu there are fascinating yet disturbinghistorical parallels as Inauguration Day approaches. The shot that killed theUS Air Force veteran Ashli Babbitt trying to enter the US Capitol building and whonow serves as the martyr rallying cry of the pro-Trump extremists, can beeerily compared to the first shot that ignited America’s Civil War at Fort Sumterin 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 towardsWashington DC known soon to be called the Battle of Fort Stevens and almostsucceeded in breaching its defenses. Fortunately for the Union, Early’s longmarch towards the capital under blistering summer conditions and the need torest for several days upon arrival delayed the main assault by several days.This fortuitous delay enabled the Union Army to frantically muster enough men tocarry out a canon bombardment which discouraged a main assault.

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

Ironically, despite pro-Trump supporters having far lessfirepower than Lt. General Early, the National Guard will post 20,000 in &around the city for the upcoming 2021 inauguration, slightly less than the23,000 troops that defended Washington DC in 1864, which powerfully underscoresthe seriousness of the crisis.

Warlord Trump’s Werewolves

There’s no doubt that this 21st century politicalcivil war is just getting started that will regularly go beyond heated verbalrhetoric. This third surge is undoubtedly a man-made political plague instigatedby the proverbial presidential stamp of approval to not only continue ratherescalate 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 theirwildest dreams. This has only emboldened and galvanized this new movement.

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

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

In war there are often a handful of violent diehard holdoutsafter a formal surrender encouraged by the defeated or deposed leadership. Asimilar situation might occur in the aftermath of Trump’s election defeat. Trumpmay be censored on social media yet a multitude of pro-Trump groups havealready arisen to communicate his “gospel” to those who consider our constitutionallaws as mere guidelines. 

In an oft-repeated historical pattern, after regimes weredefeated militarily, the ousted government still held powerful political swayin present-day democracies. The US is no exception. The Trump administrationand subsequent scorched earth tactics at the US Capitol building is justifiablyalarming and reveals the breath & depth of his influence.

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

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

The Two Front War

The present-day devastating pandemic surge throughout thecountry is a drain on the economy that threatens to blow past stress testparameters 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 twofront war each of which has equal top priority:

·        The first is international, the continuingexternal threat primarily from the emerging troika of China, Russia andnon-states, who now smell blood in the water, and intensify theircyber-intrusions.

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

The Biden administration is in an unenviable lose-losesituation that serves merely as a paper stop-gap until the decisive presidential2024 election that will indelibly determine America’s path in the 21stcentury.

The Sequel | The Security Nightmare

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

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

Furthermore the catalysts of violence are the newly inspiredlone wolves and anarchists whose sole objective is violence and mayhem> Theyrepresent the accelerant that fuels the hatred by hiding under thesocio-political banner of either side as they did with the nascent BLMmovement.

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

 

© Copyright 2021 Cerulean Council LLC

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

 

As approved vaccines are distributed as a priority to essentialworkers worldwide and soon to the general population, the decimated hospitalityindustry, many of whom are holding onto their fingertips at the edge of a financialabyss, will try to meet the pent-up demand by travelers whose disposable incomeduring the lockdowns were not adversely affected and who can afford to travel.

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

The Traveler’s Perspective

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

This process was brilliantly articulated in the movie TheMatrix Reloaded in which Neo consulted the Oracle face to face. Imagineyourself as Neo talking to your friend the Oracle with respect to where youwant to go. In the scene the Oracle explains to Neo, “You didn’t come here tomake a choice. You’ve already made the choice. You’re here to understand whyyou made it.”

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

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

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

Feast or Famine

The vaccine’s uneven distribution has begun with richercountries getting priority because of money, logistical distribution whiledeveloping 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 richcountries will have difficult traveling to developing and emerging countriesmay still be banned or have limited access because of on-going high publichealth risks in developing and emerging countries. For this reason domestictourism will rebound, even flourish, well before international travel.

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

Business Travelers

Business road warriors are hospitality’s revenue and profitmargin bread & butter. Nonetheless even domestically there will be farfewer business travelers all of whom will be on limited budgets with shorterstays and lower entertainment expenditures.

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

Present-Day State of Global Tourism

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

The United Nations World Tourism Organization(UNWTO) chart entitledCovid-19’sCrushing Impact on International Tourism provided by Statista, an onlinestatistical service, articulates how the pandemic has adversely impacted theglobal hospitality industry:

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

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

With respect to the hospitality industry financially, thepandemic has been a crushing blow. The following chart developed by UNWTO andpresented by Statista entitled TourismBack to 1990 Levels as Pandemic Halts Travel powerfully underscores thisreality and the difficulty in recovery:


Zero Hour | The Re-Set

Of all the components in international tourism airlines arebest suited to adapt to the uneven recovery. Historically airlines are farbetter prepared and adaptable in adjusting to demand with fewer flights,smaller aircraft, re-routing through hubs, etc. maintain competitive pricingwhile securing a reasonable profit. On the other hand geographically fixedservices such as hotels have a fixed costs and fixed number of rooms and do nothave the means to reduce the cost of those unfilled rooms.

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

 

© Copyright 2021 Cerulean Council LLC

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

 

 

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

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

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

Investment Opportunities in Air Cargo Transport

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

Airlines

The following three major US airlines at the forefront totransport 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 alreadyspecialize in transporting pharmaceuticals but now must do it at scale as apriority are:

1.   Fedex [NYSE: FDX]

2.   UPS [NYSE: UPS]

3.   DHL [OTC MKTS: DPSGY]

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

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

Air Cargo Freighter Shortage

Securing the numerous mothballed aircraft configured andcertified for air cargo (cargo freighters) is easier said than done. Even ifall the available air cargo freighters were in operation right now, theirnumbers fall far short of what is required for the global transport of thevaccine.

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

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

Qualified Pilot Shortage

Another challenge is the severe shortage of pilots. Becauseof lockdowns and an almost cessation of air travel, many pilots were eitherfurloughed, let go (younger pilots) or offered early retirement packagessenior pilots).

The next step is to (re)hire pilots who are experiencedflying air cargo freighters and train those who haven’t. Unlike a truck driverwho can learn quickly on a different model truck without passing aregulatory-mandated check ride, pilots must be certified on the particular typeof air cargo aircraft. The shortage of air cargo freighters andqualified/certified pilots compounds the problem to distribute the vaccine atscale.

The following chart entitled Thousandsof US Pilots Face Furlough This Fall provided by CBS News and presented byStatista, an online statistical firm, highlights the challenge of pilotcallbacks to meet the surge in demand for vaccine air delivery. What should notbe overlooked are the critical support services required including maintenancepersonnel who are also on furlough.

 

Stress Test for Global Supply Chain

Air cargo comprises less than one percent of transportedgoods with pharmaceuticals being one of those goods that are usually airshipped. Pharmaceutical companies have established supply chains but they arenot designed for mass global distribution. For this reason its architecturalstructure must be heavily modified, expanded and made a priority over theshipment of regular prescription drugs such as those for high cholesterol, highblood pressure, and anti-depressants.

Early Pandemic-RelatedCompany Investment Recommendations

With respect topandemic-related products & services and stock recommended track record, myearlier SA article entitled SA article 25 March 2020 entitled USA:A Brutal Coronavirus Economic Reset published 25 March 2020, I wasextremely bullish and recommended a strong buy for Moderna Inc. [MRNA: NASDAQ]in the biotech section who had just begun developing a vaccine. Present-daytheir vaccine is on the cusp of FDA approval and their stock price has explodedfrom $27.13 on 25 March 2020 (the publication date of my article) to $125.73 on22 December 2020.

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

Outlook

Because of the aforementioned aviation logistical challengesI forecast that these air transport equipment and professional servicesshortages will push back the overly ambitious mass distribution and inoculationschedule well into the late summer and fall of 2021. I project that thistransportation demand will continue unabated well into 2022 particularly tolesser developed countries and geographically difficult to reach regions.

Ironically the approval of additional vaccines in latewinter and spring will not ease the distribution problem because they willoffset the difficulties in the mass production of upcoming newly-approvedvaccines. This will create an even larger ready-to-ship inventory which willoutstrip the increased availability of air cargo transport equipment andprofessional services not to mention the stockpiling of vaccines. For thisreason 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 providesprescient, beyond-the-horizon, contrarian perspectives and risk assessments ongeopolitical dynamics and global urban security.

 





 

 

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

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

Small Business’ Last Stand

Some “vigilante” small businesses, particularly the lowprofit margin eateries and bars, remain open in defiance of government mandateswith respect to indoor and outdoor dining restrictions. Then there are thelucky ones in some municipalities in which the restrictions are on the booksyet unenforced.

Understandably from the small business perspective it’sprofits over pandemics for the purposes of survival – for the owners, not justthe business - because the governmental restrictions, not the virus, representan existential threat. They know that the cavalry is not coming because governmentbailouts are only for big businesses. In fact the government is seen not as therescuing and protective cavalry of the small business owner, rather as rapturousraiders who have historically decimated their profits through capricious regulationsand 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 ignorethe economic rubble with the brief spurt in consumer spending that will give themainstream media the illusion of a V-shaped recovery underway. This ultra-short-term jump in consumer spending is just that, V-shaped spendingbut not V-shaped recovery. Recovery is sustainable over manymonths or years. The mass inoculation gives consumers freedom of movement butbecause of continued mass unemployment, will be still imprisoned by debt.

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

The following chart entitled ServiceSector Struggles to Recover Lost Jobs provided by the US Bureau of LaborStatistics and presented by Statista, an online statistical firm, shows thedire situation of the leisure & hospitality sector which has lost almost3.5 million jobs. The sectors that have suffered the most are the ones that arelabor-intensive, difficult to automat and the last ones to make considerablerecoveries.

 


These job losses are far too severe for even the most robustV-shaped economic recovery to bring it back close to pre-pandemic levels evenby end of 2021. Mass unemployment, corporate reconfiguration and overhauling2021 budgets to adapt to a less intense work environment, robotics/automation,high level of flexibility indicate a cautious, uneven, drawn out economicrecovery. Corporate financial projections beyond 3 years are not better thanusing a dart board.

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

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

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

Imagine the possibility of a future far worse pandemic (Covid-19’sease of transmission with Ebola’s lethality) or a market crash occurring inshort 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 oflong-term one imagines 10, 15 or 20 years. Using the first 20 years of thiscentury as a baseline, short-term may now be one year, medium term 2-5 yearsand 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 radicallydifferent projections and risk assessment models.

 

© Copyright 2020 Cerulean Council LLC

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

 

 

 

The pandemic has exiled many workers into the cloud – a de factodigital Off-World colony as in the dystopic movie Blade Runner which hasredefined how workers communicate. The parallel to the movie, which ironicallywas released in 2019, the same year in which Covid appeared, is unerring to thepresent-day crisis. In the movie those who were could not pass the medicalremained in a hyper-dense, environmental petri dish. In 2020 those whoseprofessions require hands-on work such as essential workers in the medicalfield 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 atwork with respect to body language determined whether the worker’s bodylanguage was (in)congruent with their words.

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

We Are All Digital Ambassadors

Since March those fortunate to work remotely have communicatedvia Zoom or similar software. Regardless of their title or positions, theworker has seized the initiative to take advantage in becoming their own moviedirector and producer by leveraging their home as their Hollywood studio withcomplete control of what viewers see.

Human contact is paramount and provides a modicum of warmth eventhe most austere and sterile designed office space. Remote work offers a psychologicalsabbatical for many workers with respect to having total control over theirwork environment for several reasons. Job satisfaction has been declining foryears as management imposes greater demands, longer work hours, greaterresponsibility but stagnant pay, and limited promotional opportunitiesparticularly for middle age workers who are trapped under the invisible glassof age-discrimination. In other words the digital workplace provides a certain albeittemporary level of empowerment.

Inception Meets The Matrix

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

Because video meetings are usually pre-scheduled, theyprovide the worker more time to literally “set the stage” and prepare his workand personal presentation which eliminates the sudden impromptu face-to-facemeeting. This allows the worker to gradually develop an Academy Award worthy performancein 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-personalityis the only way to go.

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

Digital Body Language | The New Baseline

Determining the new body language baseline in the digitalworld is far more challenging for several reasons. The primary difficult isthat many workers are reinventing themselves on camera because of their remotelocation 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 somewhatdifferently in person vs on the phone vs teleconferencing in which older quirksare not visible or suppressed and new ones are accentuated.

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

Because of the aforementioned reasons, the digitalarrangement forces reading body language far more challenging because thebaseline has shifted dramatically.

Group View vs Group Think

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

Face-to-face meetings often feature several members ofvarying seniority of a specific unit, department or division. Each individualprovides his own unique specific body language baseline signature. Using these behavioralbaselines, tells determine whether everybody in the unit is onboard with anidea. An example could be a manager’s effusive proposal genuinely supported byhis body language yet betrayed by his underlings’ body language that conveyprofound reservations.

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

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

Remote meetings eliminate the power dynamics of the seatingarrangements which provide a strong signal as to which persons have the mostinfluence regardless of official title.

On the bright side for workers, remote meetings prevent asenior member from using psychological leverage (aka intimidation or bullying) notonly in physical space but also in power settings like their office or anexecutive conference room.

The C-Suite Dilemma | Lost in Translation

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

The C-suite needs to know in their gut whether theirunderlings genuinely believe the figures they’ve presented, particularly withgroup presentations. Because of a fragile economy there’s far more at stakethan market share and profitability to the point that their decisions will determineif the firm survives. This is why face-to-face meetings are more invaluable furtherup the corporate command chain.

In-Person Meetings On-Demand

Some firms in professions that can easily operate profitablywith a large portion of their staff working remotely will begin to re-think whetherimportant meetings are best held in-person rather than remotely. In particularin high stakes, highly competitive fields, the savvy C-suite executive may insistthat his direct reports be in the office full-time and insist that they in turndo the same for their important internal meetings. The post-pandemic economiclandscape 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 providesprescient, beyond-the-horizon, contrarian perspectives and risk assessments ongeopolitical dynamics and global urban security.

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