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One year on from the US Capitol riot

One year on from the US Capitol riot

Our CEO and founder, Tony Nash, joins the BBC Business Matters podcast to discuss mainly the anniversary of the US Capital riot — and why most Americans don’t really care anymore. Also discussed are the patent-free Covid vax and the CES 2022 and the coolest thing in the event.

This podcast first appeared and originally published at https://www.bbc.co.uk/programmes/w172xvqrxgznjw6 on January 7, 2021.

Show Notes

FN: Let’s go to Tony and the view from Texas. And I’m just wondering, Tony, we talked about, you know, viewing this from outside the nation’s capital. What have people been talking about today?

TN: Fergus, I gotta be really honest. No, nobody cares. I talked to students. I talked to business people. I talked to people across the country, and this is a DC event, and it’s drama that DC has conjured up and nobody in the rest of the country really cares. It’s just not a big deal for people.

FN: Okay, I’ll tell you why. I find that interesting. One thing. People travel to DC, right? For this event, whether they attended the rally or whether they actually went to the capital and took part. They weren’t DC residents, all of them. And the second thing is it’s a political thing right now, surely, across the country, there are politicians running on this event as a mandate. No?

TN: I don’t think so. No, I don’t think there are politicians running on this. You may have some politicians who are trying to run on this, but honestly, I just spoke to a couple of College students an hour ago and asked them what they thought about it. They didn’t care. I spoke to business people today and they just didn’t care. And they shrug it off as just something that’s in DC, and they shrug it off as the administration trying to distract attention. That is in the middle of the country.

That is the view from Chicago down to Texas and across the middle of the country. Nobody cares. And even in the capital building. So if these guys really wanted to overthrow the government and harm Congress people, they would have gone to the administrative buildings. I mean, these aren’t stupid people, but nobody else cares.

KA: I’m sorry, that’s not accurate. They were in the capital building.

TN: It is. Absolutely. We were in the administrative building.

TN: There were Congress people who weren’t even close to the administrative building.

FN: So, demonstrators sitting in the Speaker’s chair. Right.

TN: The demonstrators were there. The Congress people weren’t there at the end of the day. Fergus, look at the end of the day here’s what we’re talking about. We’re talking about trespass and we’re talking about property crime. Okay. That’s why people don’t care.

FN: There were five fatalities.

TN: Yeah. The Capitol police shot a woman. Right.

FN: Tony, I want to pick up on your point about people in Chicago down to Houston, not caring. This is what you’re reflecting to us about. Hang on. Let me please ask. Does that mean that nobody from Houston up to Chicago, et cetera, in the middle of America believes the message that was behind this campaign because it strikes me that 48% of the Republican Party believe the message behind what happened a year ago.

TN: What message is that, Fergus?

FN: That the election was stolen. This is the message that President Trump continues. A former President Trump continues to put out and the message that those demonstrators sought to enact as they see it. When you say people don’t care, you’re suggesting that it’s done and dusted. And I’m suggesting to you that’s far from the case.

TN: I think it is done and dusted. And I think if you look at people like Ashley Babbitt, who was shot in the back as she was entering like she was unarmed and shot at the back, these were not people who were fighting for something. Right.

FN: All right. Tony, come in. You want to jump in there?

TN: Yeah. I think Rachel is absolutely right. With the Pelosi’s support of the storming of the entry into Ledgeco in 2019, I think the Apathy in the US is really just more exhaustion than anything. I think Americans are just tired of the partisan nonsense. They’re just exhausted by it. And I think people don’t care because they don’t see this coming to an end. And DC is a world unto itself. And most of America just doesn’t care anymore. Honestly.

FN: But at that point and Rachel’s point, I was just reflecting on some of Carrie Lam’s comments exactly a year ago. And this phrase double standards, she said foreign audience should set us. Do Americans recognize that as double standards?

TN: Oh, absolutely. Yes, absolutely. They do. Well, most do not all, of course. But I think most do. If you were to rewind to 2019 and show those tapes to many Americans, they would completely get it. We’re not the Cretans that everyone tries to make us out to be. We understand that.

FN: Tony Nash is with us from Houston, may well be familiar with many of the names we’ve been discussing in the last five, six minutes. Tony, let’s focus on the philanthropy first. Presumably, that’s something you recognize that when you don’t get federal funding, you don’t get the big sort of specific targeted funding that a lot of big Pharma got back at the beginning of the pandemic. You reach into donor sections.

TN: Sure. Yeah, absolutely. And I think the Baylor College of Medicine did fantastic work here with the resources they had, and everyone here is proud of them. Texas is a huge force in medical like in public health, in oncology in many areas of healthcare. And this is just a very public view, public way of doing it. I love what they’re doing. It’s hard not to love what they’re doing.

FN: In terms of the generic issue. We’ve heard a lot about big Pharma is, I guess, easy to demonize, because a lot of the companies are making some very big returns on vaccines, and these people seem to be ready to maybe not give up the whole game, but essentially go for the generic version so that it can be spread more quickly and more cheaply.

TN: Well, all of the private sector vaccine developers, I think they got $20 billion from the US government in 2020, so those medicines have been paid for. They should give them out for free. All their IP should be open source. There should be nothing secret. The American people paid for the ones that were developed in the US. And I think as a foreign policy, we should open source that and let every country develop it at whatever cost they can.

FN: It would be a fantastic kind of diplomatic soft power, too. Wouldn’t it be?

TN: Absolutely would.

FN: And, Tony, I’m not sure how much you heard. There a quick thought from you as we end the program on the survival of Tech despite the pandemic?

TN: I think tech has thrived in the pandemic. And I’m glad to see shows like CES happening where people can go in person or be remote. I think it’s great to be in person. So I’m really happy to see it. And the coolest thing I saw at CES was a car that could change color because of nanotechnology in the paint. That was the coolest thing I saw there.

FN: Yeah, I saw that one online as well. That’s the purple thing I was referring to. Kind of Sci-Fi is real, I guess. All right, Tony, thank you very much. Indeed. Glad we got you back. Briefly. Sorry we lost the line halfway through there.

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QuickHit Visual (Videos)

QuickHit: Permanent demand destruction in fuels markets

Patrick De Haan, Head of Petroleum Analysis at GasBuddy, joins us for this week’s QuickHit episode where he discusses the loss of demand in gasoline (petrol) and fuels markets in the wake of Covid-19. How much gasoline demand has been lost and when will it recover? How far have prices fallen – and how long will they remain low? Patrick explains the dark clouds that have formed around petroleum and when we’ll get back to a “sense of normal.”

 

GasBuddy helps motorists save at the pump by showing low gas prices across North America and down under in Australia. Patrick has been with GasBuddy for over a decade basically helping millions of users understand what goes into what they’re paying at the pump and to understand how complex issues can influence their annual fuel bill.

Follow Tony on Twitter: https://twitter.com/TonyNashNerd

Follow Patrick on Twitter: https://twitter.com/GasBuddyGuy

Check out the CI Futures platform to forecast currencies, commodities, and equity indices: https://www.completeintel.com/ci-futures/

 

***This QuickHit episode was recorded on September 16, 2020.

Last week’s QuickHit was with TankerTrackers.com co-founder Samir Madani explaining half a billion barrels of oil going to China right now.

 

The views and opinions expressed in this QuickHit episode are those of the guests and do not necessarily reflect the official policy or position of Complete Intelligence. Any content provided by our guests are of their opinion and are not intended to malign any political party, religion, ethnic group, club, organization, company, individual or anyone or anything.

 

Show Notes:

 

TN: I was following you particularly in the last couple of weeks going into the U.S. Labor Day weekend in early September and then coming out of it. It seemed to me that consumption going into Labor Day seems pretty strong but coming out of it seemed like things really fell off even on an annualized basis. Can you talk us through what is that telling you if anything meaningful and is that telling you anything about the recovery from COVID, the consumption recovery?

 

 

PD: We’re just entering this post-summer time of year. That we really get a good idea of where we’re going and obviously, COVID19 has really influenced every angle of what’s normal for this time of year.

 

 

What’s normal is that demand for gasoline typically drops off notably. Kids are back in school. Vacations are done. Americans are staying closer to home. But this year, a lot of what we’re seeing in the media, the current events headlines are playing into how Americans are feeling and that plays into where they go. How often they do and so all of this is really factored in and probably one of the top economic indicators of what to expect.

 

 

And so far in the week after Labor Day, we did see a nice run up to Labor Day. I think it was probably one of the best summer holidays, which gave us some glimmer of optimism. But now, we’re coming down from the sugar crash and we are starting to see demand fall off. Where we go from here? I think, we’re at a turning point. Will we see demand continue to kind of plunge or will we start to see a little bit more optimism? I think obviously a vaccine would be the holy grail. But for now, really we’re kind of looking at seasonal trends that may be enhanced by a lot of the restrictions motorists are contending with state by state.

 

 

TN: Next to my office is a commuter lot, and that commuter lot has been closed. We’re outside of Houston. So, people get on a bus to go into downtown Houston for work. That’s been closed since February. Yesterday, I noticed they’re mowing the lawn. They’re getting it ready to reopen. How much of an impact are those commuters, who are driving, who would normally use bus into a downtown? Is that having an impact on the consumption and on the demand or is it pretty marginal at this point?

 

 

PD: At this point, we’ve seen a lot of demand come back. We were at one point down 55% in March or April and basically everyone stayed home. Now we have rebounded. We’re still down about 15 to 20% compared to last year. But it’s that last 15% percent that’s probably going to take more than a year, maybe, two years to fully come back as businesses slowly reopen. That’s a really good benchmark of how quickly that last 15 percent in demand is going to take and I think at this case, it’s going to take quite a long time for people to be comfortable getting on mass transit.

 

 

I have the same thing here in Chicago. I was recently down in Northwest Indiana. There’s a lot of commuters that come up from Indiana during the day. And again a massive parking lot satellite imagery shows that parking lot filled for the last 10 years consistently, suddenly it’s empty. Some of the big businesses, they’re not really talking about getting a lot of people back into the offices by the end of the year. All the focus really is going to be on early next year or if there’s a major disruption like a vaccine that would cause businesses to move their timelines up. But for now, when it comes to gasoline, distillates even jet fuel, it looks rather bleak.

 

 

TN: Yeah, I think so and I think we’re getting to that point of the year. Even if there was a vaccine tomorrow, I don’t know if people would necessarily call everyone back before the end of the year. It just seems like we’re getting into a really awkward time where it’s hard to tell people to come back. Is that the sense you get as well? I mean JP Morgan aside, right? You know, they’ve called everyone back on September 21st but do you see, are you seeing much activity around other people heading back into the office?

 

 

PD: Not a whole lot. It’s really interesting actually. I was talking to my wife this morning, who does investment bacon and she said that some of the JP Morgan traders had been called back earlier only to be now sent back home because of a coronavirus in the office. That’s kind of the risk that businesses are taking here. That’s why it’s going to take a while for us to get that confidence back to go in offices.

 

 

Now even more so than ever, businesses are becoming accustomed to this new era and telecommuting is likely to really surge. That could mean a permanent demand destruction of at least 5% maybe even more than that. Maybe we don’t get 10% of demand back and it takes years for us to start building up our confidence to get back on planes, to get back on trains and that’s where the dark clouds are forming for petroleum is that the longer we remain in this era, the longer it’s going to take us to get that confidence back to go back to some sort of sense of normal.

 

 

TN: Since you focus on gas prices, petrol prices. What does that do if we don’t recover that 10% in commuter consumption or driver consumption? Putting even the jet fuel stuff aside. What does that do for overall gasoline pricing in the U.S.? Are we at a kind of a step lower than we’ve normally been or do we still see say intermittent seasonal volatility where we go up to normal prices? What does that look like for the average consumer?

 

 

PD: I think it was back in 2015 at some point when OPEC opened the Spigot up and oil prices were low. We all had this phrase “it was lower for longer.” That’s a phrase that may be in a different use here but that’s what we may be looking at for both gasoline and distillate prices lower for longer because of this very slow return of demand. And so I foresee that gasoline prices will struggle for quite some time. Maybe, a period of years to get kind of back into where they normally would go and it’s because of this demand destruction that could stick around. I think most of this winter motorists will be looking at prices under $2 a gallon. Of course barring the traditional high-taxed, high-priced states like California and Hawaii where the sun is shining and unfortunately right now they have a lot of forest fires but for everyone else it’s going to be a sub $2 gallon winter. Next summer is probably going to be another good one. But the future next summer does get a little murky if we do get some demand back. Keep in mind that we’re making a lot of permanent decisions today on the era wherein that is oil production has been shut down, drilling is offline, even some refineries in Europe are shutting down. And if we do get some sort of bounce, that could lead these shutdowns today, could lead to higher prices whenever we do turn that corner.

 

 

TN: Just for context when you say sub $2 a gallon? How much is that off of normal prices? What are normal prices? Is it 2.53 dollars?

 

 

PD: It typically is in the last few years we’ve held remarkably stable somewhere in the mid to upper two dollar gallon range nationally. So, very, very rarely with the exception of I believe early 2016 and early 2015 have we seen the national average spend a considerable amount of time under two dollars.

 

 

TN: So you’re saying 30% off of what had been traditionally normal prices? Is that fair to say for the next maybe 12 months or something?

 

 

PD: Yeah, I think six to 12 months and potentially beyond that and the amazing thing about those prices is before this, that would entice motors to hit the road. Now, it’s not really doing a whole lot.

 

 

TN: If gasoline prices are 30% off of normal but commuting is down these sorts of things. Is there an upside? What are you telling your clients about this?

 

 

PD: The upside here potentially and my clients at GasBuddy members so we’re looking at this a little bit differently. Is that low prices probably here to stick around? I think given the situation, low prices will actually keep America using more petroleum than the early era 2014, 2013 when motorists were really looking at Prius’s, EVs. I think that’s going to really slow down given the environment of low prices kind of incentivizing motorists not to ditch their fossil fuel cars at this point.