Round the World in Markets – Economy Down, Stock Up
Protestors in Michigan against social distancing swarmed the Capitol on Thursday. Many were openly carrying rifles and sidearms as they occupied the Capitol lawn and attempted to enter the House chamber. Over 4,000 in Michigan have died from COVID-19.
Other protestors in Sacramento, California surrounded the state capitol to voice similar concerns. The California Highway Patrol did not disperse the protests despite its unauthorized status and the social distancing guidelines set forth by California’s governor, Gavin Newsom. The virus has killed more than 2,000 people in California.
The downturn in the oil market has hit the revenue of Brazil. The oil giant Petrobras currently has a break even cost of $25 per barrel of oil while the price of oil on Friday was $19.70. To combat this the Brazillian government has released a stimulus package roughly half the size of the United States. Export oil sales are down 45% from April of last year.
Similarly, the European Union is seeing a drop in revenue. It’s GDP has contracted 3.5% during the first quarter of 2020. The European Commission, the executive arm of the EU, has pledged financial support for the countries most financially affected by COVID-19 although as of this week the details had yet to be finalized. Whether the support will arrive as a loan or a grant is still being debated as most of the countries receiving aid already have large outstanding debts to their neighbors.
The African nation is taking the initiative with regards to its food and supply chain issues. The World Food Program has published a report calling for an increase in local food production in order to alleviate the dependence on foreign foods. Ghana’s minister of food and agriculture, Dr. Owusu Afriyie Akoto, has led efforts to increase local rice production from 150,000 to 655,000 metric tonnes between 2016 and 2019. This was largely accomplished through better agricultural practices and using genetically modified seeds.
The World Health Organization (WHO) has been left out of an investigation into the origin of the coronavirus. This comes after President Trump’s assertion that the virus originated again that the virus came from the Wuhan Institute of Virology in China, which has denied the allegations. President Trump this week openly blamed China for the virus as did Germany, England, and Australia. On Monday the US cut all funding to the WHO.
(Image Courtesy of: Enzo Life Sciences)
The antibody test is the latest tool to strike back against the coronavirus. Unlike other available tests, these tests do not confirm if someone has the virus, but instead determines if someone has contracted and recovered from COVID-19. The current understanding, and one that has been proven throughout medical history, is that those who have recovered from a specific virus will develop a strong immune response to be able to resist future viral infections. These potentially immune individuals would be able to go back to work and would presumably not be carriers of the virus. Without a successful treatment for the coronavirus or a vaccine, antibody tests remain a hopeful mechanism to allow states to reopen businesses.
Antibodies are specific proteins within our bodies that work as part of our immune systems. These Y-shaped molecules bind onto the invading pathogen a couple of weeks following the initial infection after the body has adapted to the threat. By testing for antibodies, authorities can gain a better understanding of how many people have been infected. This is a useful metric in tracking the infection rate, though it is not without drawbacks. Speaking from the UCSF, virologist Dr. Melanie Ott cautioned that antibodies take time to be produced in our bodies “If it’s the beginning of the infection, you don’t pick it up, it’s something that only develops later.”
While the mainstream media has reported that individuals with COVID-19 antibodies can go back to work without fear of reinfection, the truth is not as straightforward. The current test only measures the presence of antibodies and not their health or how many are present. Lisa Gralinski PhD and virologist at Chale Hill in North Carolina states in regards to the tests “They’re not telling us anything about the quality of those antibodies, so we don’t know if they’re neutralizing.” Furthermore, since the coronavirus is novel, or never been seen before, we have no way of knowing how long the antibodies remain in the body post-recovery. Even if large amounts of antibodies are recovered and administered to the uninfected, additional “booster shots” may need to be delivered at a later date.
The growing number of studies concerning the coronavirus is drawing more eyes as the national lockdown continues, with some producing conflicting evidence regarding the antibody tests. Bloomberg reports that in April, China revealed it found zero COVID-19 antibodies in 6% of 175 recovered patients it tested. The same study found other recovered patients with elevated levels. Dr. Anthony Fauci is skeptical about the lack of antibodies, stating “Before anybody tells me that there is no antibody, I want to make sure that it was measured with a validated test.” If the tests were valid, it could lend credence that the antibodies do not last a very long time. Typically antibodies last a lifetime in a healthy adult as long as the related virus does not mutate over time. The common cold and flu viruses mutate constantly which makes developing a vaccine next to impossible. In order for antibodies to be effective the virus would need to remain in its original state. This is how a chicken pox vaccine is able to remain effective over years since the virus responsible does not mutate enough to evolve past the vaccine.
Despite these misgivings, the FDA has been quick to allow over 150 manufacturers to use these tests for the public. Officially the FDA has only approved 9 tests. In order to distribute these tests as quickly as possible, the FDA has allowed manufacturers to conduct their own quality control instead of using the government’s testing process. This has resulted in a number of “false positives,” or inaccurate results, from the unapproved tests. The issue is not confined to a small supply. Last week the New York City Health Department warned against using these tests outright. While getting tests to public agencies is supremely important the lack of oversight and veracity of the tests could do more harm than good, considering that health officials like Dr. Fauci have warned that a second wave of infections is inevitable. Sending people back to work without confirming they are immune is not only irresponsible, it will cause unnecessary deaths.
Expansion of Savings, Contraction in Economy
On Wednesday the Commerce Department revealed that the GDP had contracted by 4.8% in the first 3 months of 2020. This drop represents the largest decrease in GDP since the 2008 financial crisis.
The Federal Reserve on Wednesday stated it would be maintaining its historically low interest rate at 0 to 0.25 percent until further notice. As economists keep an eye out for negative interest rates, which have yet to be adopted in the US, the current interest rate is expected to remain low until the US has economically recovered. The Fed’s key performance indicators will include employment rate, inflation expectations, and the labor market conditions. The stock market rally may be short-lived or a “dead cat bounce.”
US personal income and spending dropped significantly in March as people scrimp and save during the coronavirus pandemic. Store shelves are back to being stocked and restaurants are seeing a sharp decrease in business as people turn to cooking to cut down on costs. For the first time since 1981 the savings rate is just over 13%. The double impact of increased savings and decreased spending does not bode well short-term for an economy built on the model of infinite growth. Once businesses open back up we will likely see a sharp increase in spending, although there will undoubtedly be a population that continues to save for the next inevitable pandemic.✓
Op-Ed: A New Works Progress Administration
(Image Courtesy of: Winnipeg Free Press)
With unemployment continuing through double digits and consumer spending at the lowest time in a decade, this could be a perfect time to restart the Works Progress Administration (WPA) from the Great Depression and put the country back to work.
The WPA ran from 1935 – 1945 with the original intent to provide work for those affected by the Great Depression while improving infrastructure. This work included building new bridges, roads, schools, hospitals, and dams. At the same time, it provided useful vocational training. The program was a massively popular part of President Roosevelt’s “New Deal” and led to the creation of several state projects of similar design.
For a country as large as the US, our infrastructure as a nation is terrible. The last report specific to the subject gave the US a D +. Yikes. 80% of Americans want better infrastructure as it impacts nearly every aspect of our lives including supply chain, energy, water treatment, etc.
If the lights are on, infrastructure helped.
If the roads are functional, infrastructure helped.
Hospitals have supplies, infrastructure.
Watching “Friends” on Netflix, still infrastructure.
By the way, who are these people who don’t want better infrastructure? Have they never hit a pothole or had their power go out? Must be nice.
Denver is already thinking about similar plans and creating a “Health Force.” Senator Michael Bennet is actively channeling the WPA and calling for a state-funded program to give thousands of unemployed jobs in the healthcare industry. Bennet would see the CDC provide the necessary 100 hours of training for sanitary practices, vaccine distribution, and more: “We’ve got millions of young people across the country with a variety of different backgrounds sitting home, their studies and careers potentially frozen in place.” The bill calls for $110 billion over two years, which Senator Bennet hopes to slot into the next national relief package expected to be passed sometime in May.
If successful, the Denver plan could see wider adoption. By providing grants to states with solid WPA plans we could see private enterprise step in to handle the tasks. This would also allow companies the opportunity to build goodwill in their communities, similar to how Domino’s Pizza handled basic road repair back in 2018 for its “Paving for Pizza” campaign. Yes, that happened. I’d love to see a Samsung help strengthen the electric grid or Microsoft offer free software training for the growing work-at-home crowd.
Reinventing successful public works programs is not a new phenomenon. The most recent “New Deal” proposal was the largely-criticized “Green New Deal,” which focused primarily on renewable energy and creating a path away from fossil fuels. While it gained a modest amount of publicity and shared similar promises of being a job creator, the bill ultimately lacked the necessary support. The world still relies on oil from everything from plastic and polymer production to transportation, supply chains, and agriculture. Restarting the WPA would be a better way to invoke the “can do” attitude of the country while at the same time rebuilding the foundation upon which our nation is built.
Tytan’s Top 10 Weekly Reads
In this section, Tytan has listed the top 10 articles that he believes to be the most impactful to your learning.
Building the Decentralized Web
By Brad Kam, Co-Founder at Unstoppable Domains
Currently, when you access a website, you type in yournews.com, for example, and are routed to a website stored on a hosting service like Amazon Web Services. You then receive content that can be censored and shut down by the hosting provider or by court order. The content you read is sourced from centralized authorities that are keen to comply with third parties and registrars like GoDaddy, that have full control over the domain. In this world, browsers point to traditional DNS servers and only ICANN approves who has the right to launch a domain extension.
Now imagine a decentralized internet in which content is hosted on a distributed system like IPFS and your domain is stored by you and not a custodian. No one can take it down without access to your private keys and your voice becomes uncensorable. If every website becomes decentralized, all content will be owned independently by users and every person will be able to publish and transact online without fear of censorship. Browsers will support blockchain-based extensions such as .crypto and .zil and the internet will become a safe haven for free speech. With the decentralized web, everything changes.
Blockchain domains + decentralized hosting = censorship resistance. We think a censorship-resistant internet is particularly important in a time of crisis where misinformation has complicated efforts to slow the spread COVID-19. We have seen decentralized websites pop up with educational resources that were previously banned in China.
Reaching the decentralized web is made possible by the Unstoppable Chrome extension as well as support from Opera’s Android mobile app, giving more than 80 million people access to a censorship-resistant web. Kyber.crypto, Switcheo.crypto, and MyEtherWallet.crypto are among the first pioneers, and with over 2,000 other decentralized websites launched on IPFS, the decentralized web is just getting started.
To aid those in need, you can donate funds to COVID19.crypto, in partnership with The Giving Block’s #cryptoCOVID19 initiative, to assist nonprofits on the frontlines.
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