Will Pfizer’s New Vaccine Be a Blue Pill?

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November 10, 2020
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Morpheus: Unfortunately, no one can be told what the Matrix is. You have to see it for yourself. This is your last chance. After this, there is no turning back.
(In his left hand, Morpheus shows a blue pill.)
Morpheus: You take the blue pill and the story ends. You wake in your bed and believe whatever you want to believe. (a red pill is shown in his other hand) You take the red pill and you stay in Wonderland and I show you how deep the rabbit-hole goes. (Long pause; Neo begins to reach for the red pill) Remember — all I am offering is the truth, nothing more.
The Matrix (1999)

For those who believe that we really do live in The Matrix, the choice of Pfizer to announce the miracle vaccine for ‘the plague’ within a week of an Election that was largely fought over the failure of the Trump administration to ‘act’ on Covid is a deliberate ‘tell’. After all, wasn’t it Pfizer who famously invented the “Blue Pill” with viagra? As the quote from Morpheus shows, the attraction of the Blue Pill is that you wake in your bed and believe what you want to believe. There is no Trump, no plague and no more Antifa riots. Thanksgiving is around the corner and America remains a shining city on the hill. Even better, neither is there a Blue Wave, so no socialism or high taxes either. No wonder the markets jumped.

The Red Pill reality of course remains that, in Freudian terms, Donald Trump is simply the monstrous Id to America’s collective Ego with the intellectual and academic sphere acting as a guilt ridden and anxious Super-Ego for the last four years. Hating Trump has thus also been a form of self loathing, embarrassed at the crude reality he has shown. But, to return to film genres, he is Tyler Durden from Fight Club (which incidentally came out at the same time as the Matrix) or the eponymous Mr Robot from the 2015 TV series, the dissonant split personality of 21st century America, who came to not only reveal but also to disrupt and expose the faults in the system. Thus while his populism may be temporarily suppressed, it is not going away, the failure of the Blue Wave scenario highlights that. Indeed, it is not entirely flippant to suggest that he and Tucker Carlson may effectively change places for 2024.

We should also not forget that there remains a modest chance that his appeals over voting fraud may yet reverse the ‘result’. Not a large chance admittedly, but definitely a non-zero one. The fact that the media and all western globalist governments have rushed to embrace ‘President Elect Biden’ doesn’t alter the fact that due process is still underway. It also raises the question of why, when a Starling bank account can be opened in less than 5 minutes with a smartphone and photo ID, voter registration in the US (or for that matter most other places) could not be similarly ‘secure’.

One intriguing suggestion is that between now and Inauguration, Trump, with little to lose, could simply de-classify large amounts of documents pertaining to the activities of what he has always referred to as ‘The Swamp’, offering a final ‘Red Pill’ to those wanting to see “how deep the rabbit hole goes”. While he is at it, why not pardon Julian Assange and Edward Snowden? Whether the markets are prepared for that remains to be seen, however.

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Market Thinking April 2024

The rally in asset markets in Q4 has evolved into a new bull market for equities, but not for bonds, which remain in a bear phase, facing problems with both demand and supply. As such the greatest short term uncertainty and medium term risk for asset prices remains another mishap in the fixed income markets, similar to the funding crisis of last September or the distressed selling feedback loop of SVB last March. US monetary authorities are monitoring this closely. Meanwhile, politics is likely to cloud the narrative over the next few quarters with the prospect of some changes to both energy policy and foreign policy having knock on implications for markets/

Gold and Goldilocks

Bond markets are changing their views on Fed policy based on the high frequency data, seemingly unaware that the major variable the Fed is watching is the bond markets themselves. After the funding panic of last September and the regional bank wobble last March, the twin architects of US monetary policy (the Fed is now joined by the Treasury) are focussing on Bond Market stability as their primary aim. Politicians meanwhile, having seen how the bond markets ended the administration of UK Premier Liz Truss in September 2022 are keenly aware that it is not just "the Economy stupid", but the Economy and the markets that they need to manage the narrative for both voters and markets. They all need a form of Goldilocks - either good or bad, but not so good or so bad as to trigger either the markets to sell off or the authorities to react. Investors, meanwhile, conscious of the precarious balancing act Goldilocks requires, are increasingly looking at Gold.

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