Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Panic! At the petrol station

Written by Maria Julia Pieraccioni, associate
Edited by Tom Gillingham, associated partner
14 May 2021

Good morning,

1973 was a big year: bell bottom jeans, long hair, and unnecessarily oversized shirt collars were in. Nixon had just announced the suspension of American offensives in the Vietnam War and the American Supreme Court had ruled to legalise abortion. It was also the year of the OPEC oil embargo that knocked petrol-dependent countries to their knees.

Then something economically paradoxical happened: as petrol prices soared, so did panic-buying.

A similar phenomenon occurred earlier this week when cyberhackers were able to access and cut off the Coastline Pipeline oil supply in the US. Americans were once again sent into a frenzy. Meg Jacobs, in a CNN opinion piece, stated she waited in line for 45 minutes at a petrol station and when it was finally her turn, it had run out. People had evidently stockpiled $3 per gallon petrol.

Jacobs attributes the fear of petrol running out to a concoction of factors: for Americans, driving is often associated with personal freedom and liberty. Practically, it is also often one of the only ways to get anywhere in the US’s sprawling suburban landscapes. However, panic buying petrol could also reveal something inherently cynical about our confidence in, and commitment to, climate action.

Survey data from the Yale Program on Climate Change might clarify the link between panic buying petrol and believing that human activity causes climate change. The states that were worst affected by the petrol shortage were North Carolina, Georgia, Virginia and South Carolina, followed by Tennessee and Florida. Incidentally, those are also Republican strongholds, where only 52% of respondents of the Yale survey agreed with the statement that global warming is caused by human activity.

Regardless, the ways we commit to climate action—recycling plastics is important, switching to electric cars is expensive—can be disingenuous, especially when it comes to the way we travel. Controversy about COP26 being an in-person event reignited again, when The Sun reported that Alok Sharma is expected to maintain the event as is rather than move it online. Since preparations for COP began, critics have posited that flying to the event would set a bad example for a conference that’s committed to finding the solution to climate change once and for all.

A little over two years ago, Greta Thunberg delivered a scathing speech to members of the UK Parliament, beckoning her audience to lean into her message. “Did you hear what I just said? Is my English ok? Is the microphone on? Because I’m beginning to wonder”. What Thunberg might more aptly wonder now is, are we merely nodding along while in reality so many of us are still inextricably attached to fossil fuels?

News

The number of confirmed UK cases of the covid-19 variant from India, have more than doubled this week, from 520 to 1313 cases. The variant seems to be spreading faster than other strains; however, there are hopes a rapid vaccination rollout and attentive monitoring can counter the effects of a mass infection.

Radovan Karadciz, convicted of the Srebrenica genocide, will be transferred to a UK prison to serve the rest of his sentence. In 2016, he was found guilty of genocide and crimes against humanity and sentenced to 40 years in prison. UK Foreign Secretary Dominic Raab responded remarking how “Britain has supported the 30-year pursuit of justice for his heinous crimes”.

Famous academic, historian, and broadcaster Mary Beard is to retire from Cambridge University next year and will leave an £80,000 fund to support two classics students from under-represented groups. The fund will be known as the Joyce Reynolds award, named after one of the world’s leading ancient historians who taught Beard. The move comes as the University has struggled to ensure representation in its classrooms.

Business and economy

The newly appointed shadow chancellor, Rachel Reeves is expected to consult President Biden’s economic team on Labour’s economic offer and voter disenfranchisement. Before the next election, Reeves is set to learn from Biden’s election and consult with his team on how to create a bold offer that can appease and appeal both “blue-collar voters and urban graduates”.

Tesla has stopped accepting Bitcoin as payment for its vehicles, due to the unsustainable energy consumption needed to “mine” the cryptocurrency. As a result, the currency’s value traded below $50,000 on the crypto exchange Binance. Others, such as former Bank of England governor Mark Carney, welcomed the news, calling for a “resilient, high-performance and carbon-free” alternative payments system to Bitcoin. (£)

Alibaba has reported its first loss since listing as a public company. The Chinese conglomerate reported a net loss of $836 million, citing the antitrust fine Chinese regulators levied on the group as the biggest weight. (£)

Columns of note

Two-party political systems that alternate governance every election cycle are often scrutinised and compared. How did Margaret Thatcher’s Conservative government compare to Boris Johnson’s? The answer so far has been elusive. The Economist points out that “Johnsonism” has been obscured by Brexit and the Covid-19 pandemic. What is starting to emerge is his premiership’s espousal of “a combination of cultural conservatism and statist economics that has more in common with Gaullism or Eisenhower’s ‘modern Republicanism’” than his homegrown predecessors. The Queen’s Speech to Parliament on 11 May crystallised that. (£)

That France needs Britain more than Britain needs France, is a position often thought but seldomly spoken or written about. The Spectator used the recent neighbourly dispute over fishing rights in the Channel Islands to make that point. Behind the façade of gesture politics, Britain and France are military and diplomatic allies bound by shared and wide-ranging geopolitical and security interests. However, to succeed in promoting its own foreign policy interests, this article suggests that the French have always needed British weight—or at least have them jump on the French bandwagon. (£)

Cartoon source: The New Yorker

Markets

What happened yesterday?

After a rocky start to the week, amidst fears that central banks would withdraw crisis-era support following a surge in inflation, Wall Street stocks recovered on Thursday. The S&P 500 index closed up 1.2%, led by financial and industrial stock, while the tech-heavy Nasdaq Composite rose 0.7%.

Data released Wednesday showed that US inflation rose 4.2% year-on-year in April, a faster price raise that economists had forecasted.

Meanwhile in Europe, the Stoxx 600 index closed trading at 0.1% lower than the previous day. The FTSE 100 Index also closed in negative territory, trading at 0.59% lower than Wednesday.

Sterling was weaker as well, ending trading 0.12% lower against the dollar at $1.40, and losing 0.2% on the euro to hit €1.16.

What’s happening today?

Finals
Gulf Marine Services

Q1 Results
Electrica Regs

Romgaz S

Ten Life

AGMs

Derwent London

Digitalbox

JP Morgan American

Menzies

Phoenix Group Holdings

Pittards

Sabre Insur

Spectris

St James Place

Tasty

Triple Pnt Soc

Wishbone

Final Dividend Payment Date

Alpha Fx Group.

Antofagasta

Aviva

Drax

Emis

Hunting

Ibstock

IMI

John Laing

Jpmorg.us

Jupiter Fund Management

Kerry

Quixant

Schroder Asian

Taylor Wimpey

Ultra Electronics

Vitec

Interim Dividend Payment Date

Ab Dynamics

Finsbury Growth

Nb Global

Prudential

Schroder Orient

Seneca B

Smiths Group

Softcat

Quarterly Payment Date

Jpm Jap Sml G$i

Marsh&mclennan

Tufton Oceanic.

Special Dividend Payment Date

John Laing

Jupiter Fund Management

International Economic Announcements

(13:30) Retail Sales (US)

(13:30) Import and Export Price Indices (US)

(14:15) Industrial Production (US)

(14:15) Capacity Utilisation (US)

(15:00) U. of Michigan Confidence (Prelim) (US)

(15:00) Business Inventories (US)

Source: Financial Times

did you know

After the 1745 uprising in favour of Bonnie Prince Charlie, a court in York ruled in October 1746 that bagpipes were an instrument of war. [source: Scotia Pipers]

Parliamentary highlights

House of Commons

The House of Commons is not sitting and will next sit on 17 May 2021.

House of Lords 

The House of Lords is not sitting and will next sit on 17 May 2021.

Scottish Parliament 

Election of the Deputy Presiding Officers.

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