“Trilemma” is a term in decision-making theory. Unlike a dilemma, which has two solutions, a trilemma offers three equal solutions to a complex problem. However, the options of a trilemma are conflictual because of mutual exclusivity, which makes only one option of the trilemma achievable at a given time.
From an investment perspective, there is currently a “trilemma of concerns” as depicted in the image above. Finding acceptable trade-offs between these confronting dynamics is what will shape social circumstances, economic recovery, and individual liberty in the near future.
“Much of the COVID-19 pandemic has turned into a shared experience involving a trilemma of concerns. People across the US are worried about their: (1) personal health and safety; (2) economic future and job security; and (3) individual privacy and liberty.”
– IBM Institute for Business Value
- This week the world’s number of known coronavirus cases surpassed 100 million. This official number only accounts for the known cases of Covid-19, with the actual number probably significantly higher, especially considering the absence of adequate testing and contact-tracing in many countries.
- The UK has banned flights from Dubai and the rest of the UAE, in an attempt to contain the spread of a new strain. This is the variant that was first discovered in South Africa.
- Markets have been particularly volatile this week, declining sharply on Wednesday’s only to bounce back on Thursday, but then to correct once more on Friday. Reasons for this ebb and flow were caused primarily by the Fed issuing a depressing assessment of the US economy, together with the instability that the GameStop debacle (described in more detail below), introduced into the markets.
- It would seem like former President Trump is unlikely to be convicted in his impeachment trial, as republican senators voted en masse against it. Even President Biden said that he does not think that Trump will be convicted but that the trial “has to happen”.
- The 1.9 trillion US stimulus package has been delayed in Congress as republican support diminishes. Now house democrats plan to activate a budget process to fast-track votes on parts of Biden’s strategy to fight the impact of Covid-19 on the US economy.
- Lockdown measures have caused a creativity crisis as remote work has taken a toll on collaboration. For a lengthy read on this subject, and the ways people are trying to reignite the creative work process without access to interaction, follow this link.
- Reddit and Robinhood, a no-fee trading app, have found themselves in the centre of the GameStop debacle. Reddit users coordinated a mass buying spree of GameStop stock, deliberately upending hedge fund and short sellers. The US video game retailer is up more than 1 700% since the start of January 2021. In this mission “to democratise finance for all,” Robinhood, inflicted billions of dollars in losses on hedge funds by sending stocks that those firms had shorted into the stratosphere.
- Reserve Bank Governor, Lesetja Kganyago, has said that in the event that a third wave of coronavirus infections were to occur, there is room for the Bank to provide additional stimulus. He also expressed the hope that the country’s vaccine program is rolled out by winter.
- South Africa has fast-tracked approval of the Oxford-AstraZeneca Covid-19 vaccine for emergency use. Additionally, the medicine regulator is reviewing the vaccine applications by rival manufacturers Pfizer and Johnson & Johnson.
- The International Monetary Fund (IMF) has signalled, once again, that SA’s unmanageable public wage bill and state-owned enterprises are major sources of concern.
- State Security Agency (SSA) operatives unlawfully gave firearms and ammunition to non-members. Currently, it is not known why the weapons were given away and what they were used for. This information was discovered as the SSA acting director-general Loyiso Jafta gave testimony at the Zondo Commission this week.
- The SSA also set aside millions of rand every month for alleged payments to Zuma. Part of these funds went towards funding Jacob Zuma’s personal safety (which included a toxicology unit), that cost the taxpayer at least R1.8 million a month.
- Ted Blom, an energy expert that was hired to redesign Eskom’s coal roadmap, has said that South African’s should brace themselves for 2021 to be the worst year of load shedding yet, with “Stage 8” being a possibility before the end of winter. Follow this link for the grim analysis.
- Redefine, the second-largest South African real-estate investment trust on the JSE, announced that it would not be paying a dividend in respect of its 2020 financial year-end. The property sector, especially office and retail, has been hit hard by the Covid-19pandemic.
- Ending on a relatively positive note, tax collection has been far better than the National Treasury had anticipated in October’s projections. This has raised hopes that the government’s revenue shortfall may be smaller than expected when Finance Minister, Tito Mboweni, delivers his budget speech next month. This was largely due to the economy bouncing back strongly in the third quarter of last year.
Sources: Dynasty, Reuters, Bloomberg Markets, The New York Times, Daily Maverick, and Moneyweb, etc