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Bacteria-virus arms race provides rare window into rapid and complex evolution

As conceived by Charles Darwin in the 1800s, evolution is a slow, gradual process during which species adaptations are inherited incrementally over generations….



As conceived by Charles Darwin in the 1800s, evolution is a slow, gradual process during which species adaptations are inherited incrementally over generations. However, today biologists can see how evolutionary changes unfold on much more accelerated timescales.

Credit: Josh Borin, UC San Diego

As conceived by Charles Darwin in the 1800s, evolution is a slow, gradual process during which species adaptations are inherited incrementally over generations. However, today biologists can see how evolutionary changes unfold on much more accelerated timescales.

Rather than the evocative plants and animals of the Galapagos Islands that Darwin studied in forming his theory of evolution, Postdoctoral Scholar Joshua Borin and Associate Professor Justin Meyer of UC San Diego’s School of Biological Sciences are documenting rapid evolutionary processes in simple laboratory flasks.

Borin and Meyer set bacteria and viruses together in a closed laboratory flask — just two teaspoons large — to study coevolution in action. As viruses infect their bacterial neighbors, the bacteria evolve new defensive measures to repel the attacks. The viruses then counter these adaptations with their own evolutionary changes that work around the new defensive measures.

In only three weeks, this accelerated arms race between bacteria (Escherichia coli) and viruses (bacteriophage, or “phage”) results in several generations of evolutionary adaptations. The new findings, published in the journal Science, reveal the emergence of distinct evolutionary patterns.

“In this study we show the power of evolution,” said Meyer, an associate professor in the Department of Ecology, Behavior and Evolution. “We see how coevolution between bacteria and phage drive the emergence of a highly complicated ecological network. Evolution doesn’t have to be slow and gradual as Darwin thought.”

Meyer says the new study offers fresh perspectives on how intricate ecological networks develop across disparate ecosystems, whether they are food webs across the savanna, pollinator networks in the rainforest or microbes interacting in the ocean.

As bacteria and viruses adapted to each other’s presence over time, two prominent repeating patterns emerged. These included nestedness, a development in which narrow interactions between bacteria and virus specialists are “nested” within a broader range of generalist interactions; and modularity, in which interactions between species form modules within specialized groups, but not between groups.

“We were amazed to discover that our evolution experiment in tiny flasks had recapitulated the complex patterns that had been previously observed between bacteria and viruses collected at regional and transoceanic scales,” said Borin.

“When our research team first quantified this multiscale pattern in environmental bacteria and phage interaction data, we thought the emergence of such complexity required long periods of evolution,” added study coauthor Professor Joshua Weitz from the Department of Biology at the University of Maryland.

Meyer says capturing these evolutionary developments “in action” reinforces the power of evolution, which is often underestimated. Rapid pathogenic evolution continues to shape our world in new ways. Through COVID-19 and new mutations of SARS-CoV-2, viruses have demonstrated the potent capability for evolutionary adaptations that result in new strains when they encounter antibodies, vaccines and other roadblocks that keep them from effectively infecting and spreading. Such new concepts in microbial evolution are reframing the way patients are treated.

“We show that evolution can produce complex ecological networks quickly from very little external help,” said Meyer, who indicated that examples of such external evolutionary forces include isolation via geographical distance, environmental drivers and interactions with other species. “So we can use phage and bacteria as a model system to understand general evolutionary principles and help show how life on Earth has evolved into such diverse and complex ecosystems from simple beginnings.”

In related work, Meyer and Weitz are using artificial intelligence to study how phage could be used in the growing antibiotic resistance crisis. The research includes analysis of evolutionary data to determine which mutations in phage and bacteria can lead to infection and resistance. The research also highlights a new effort supported by the Howard Hughes Medical Institute to study how “jumbo” phages could be used as new therapeutic agents.

Coauthors of the Science paper include Joshua Borin, Justin Lee, Adriana Lucia-Sanz, Krista Gerbino, Joshua Weitz and Justin Meyer.

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Popular party brand files Chapter 11 bankruptcy

A major provider of party supplies has filed for Chapter 11 bankruptcy seeking to sell its assets.



Retail suppliers are essential to the survival of retailers, since without adequate inventory to sell, stores can't generate necessary revenue to remain in business. Suppliers occasionally have hard times and sometimes need to file bankruptcy to stay afloat. Some of those suppliers will reorganize and continue operating. Others will sell their assets to a new operator or may have such severe financial distress that they will need liquidate and go out of business.

Fresno, Calif.-based Prima Wawona, the nation's largest peach producer that supplies grocers like Walmart and Kroger KR, filed for Chapter 11 on Oct. 13 seeking to sell its assets to its lenders or a third party buyer. The debtor's lenders have agreed to allow the company to use its cash to fund operations and keep paying vendors and suppliers while the bankruptcy case proceeds.

Related: Beloved fast-food chain files for Chapter 11 bankruptcy

Instant Brands, maker of Instant Pot, Corning and Pyrex kitchenware, filed for Chapter 11 in June to seek a sale of its assets. The company, which sells its products to numerous retailers, including Walmart and Target TGT, reached an agreement in bankruptcy to sell its assets to private equity firm Centre Lane Partners. The deal is expected to close in the fourth quarter. 

Party supply retailer Party City filed Chapter 11 in January to restructure its debts after rising inflation, supply chain issues, a helium shortage and fallout from the Covid pandemic caused financial distress. The retailer emerged from bankruptcy in October. One of Party City's suppliers also ran into some financial distress that led to a bankruptcy filing.

Anagram Balloons seeks sale in Chapter 11

Party City's affiliate and a top supplier Anagram Balloons on Nov. 8 filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas in Houston seeking to sell its assets to its first-lien note lenders. The company listed $100 million to $500 million in assets and liabilities in its petition.

The Eden Prairie, Minn., balloon retailer manufactures and sells foil balloons and inflated décor domestically and internationally to party supply specialty stores, grocers, mass marketers, parks, drugstores and discount variety stores. The wholly owned subsidiary of Party City provides products directly to retailers like Walmart WMT, Dollar Treen DLTR and Canadian Tire and through domestic and international distributors. The balloon maker was not a debtor in Party City's Chapter 11.

Anagram currently employs about 350 employees and operates a 500,000 square-foot manufacturing, production and distribution facility.

Anagram has faced financial distress resulting from unsustainable debt on its balance sheet, lingering effects from the Covid-19 pandemic, global inflation and helium shortages that put strain on its balance sheet. Party City had filed a motion to reject Anagram contracts in its Chapter 11 case, but it did not follow through with that motion. Anagram sought a restructuring solution with its creditors, but was unable to reach a consensus on a reorganization transaction, according to a declaration from the company's Chief Restructuring Officer Adrian Frankum of Ankura Consulting Group. 

Debtor Anagram Holdings filed a motion seeking $22 million in senior secured debtor-in-possession financing with $10 million available immediately on approval of a interim order in order to fund the bankruptcy case and sales process. The remainder would be available on final order approval. It also seeks a $15 million first-lien asset-based loan facility from its prepetition ABL lender Wells Fargo that will roll up prepetition ABL obligations.

Anagram Balloons seeks a sale of its assets in bankruptcy.

Image source: Shuttertock

Prepetition lenders will credit bid at bankruptcy auction

The debtor's first-lien and DIP notes lender will submit a stalking horse credit bid for the full amount of the DIP and first-lien debt in a Section 363 auction of the company. It currently owes $110 million in prepetition first-lien debt, $84.7 million in Second Lien Note debt and $15 million to Wells Fargo in ABL debt.

The debtor will seek higher and better offers for its assets from potential buyers through a bankruptcy auction that is proposed for Dec. 5. The debtor is proposing to close the sale Dec. 29. A hearing is scheduled for Nov. 17 to consider the debtor's bidding procedures.

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As Recession Noise Grows, Recession Signal Is Fading

As Recession Noise Grows, Recession Signal Is Fading

Authored by Simon White, Bloomberg macro strategist,

The clamor for a US recession has…



As Recession Noise Grows, Recession Signal Is Fading

Authored by Simon White, Bloomberg macro strategist,

The clamor for a US recession has grown louder in recent weeks, but forward-looking data shows the risk of one is easing not rising.

Despite the abrupt turn in the mood music in recent weeks it is looking increasingly likely the official arbiter of US recessions, the National Bureau of Economic Research, won’t call one, leaving stocks priced for too negative an outcome.

Warning sounds about a US recession have been growing louder. But that has been fueled by principally lagging economic data telling us where the economy’s been, not where it’s going next. Leading data is inflecting higher, suggesting the US may skirt a NBER-recession for most of next year.

Academic disputes are said to matter so much as they mean so little. The same can be said for recession prediction — after all, it’s what the market does that ultimately counts for investors. Nonetheless, the recent flurry of recession chatter deserves a reply, as a close look at the data shows that a slump in the medium term is no longer the base case.

I come at this as a soft-landing skeptic. Multiple reliable data points had been pointing toward a recession, but there is now enough contrary data to sow sufficient doubt.

Before going any further we have to set the terms of reference. It can be argued the US has experienced or is already in a recession, for instance by looking at GDI, manufacturing, goods GDP, or earnings. But with no hard-and-fast definition of an economic contraction (the technical definition of two-consecutive quarters of negative growth is too simplistic), having a referee in the NBER is the best option.

The downside is the NBER doesn’t announce recessions until after they have started, and thus is impractical for investors in real time. The utility instead comes from noting that the times the NBER deems to be recessions are when stocks have experienced their worst downturns — thus trying to figure out ahead of the NBER when there will be a contraction can save investors from considerable losses.

Since March this year, the S&P has been trading as if an NBER-recession will be avoided. Lately stocks have sold off, but they are still a long way above the median S&P in bear markets that had a recession (the blue line in the chart below). That means there is still sizable downside risk today if there is a downturn; but equivalently there is the risk from missed opportunity as stocks could eclipse their recent highs, or more, if a slump is avoided.

NBER recession dating is not an exact science. As the bureau itself puts it, “there are no fixed rules or thresholds that trigger a determination of decline.” But the research body requires a recession be durable, diffuse and deep. It also gives four of the key variables it uses as recession determinants:

  • real personal consumption expenditure (PCE)

  • payrolls

  • industrial production

  • real personal income net of transfer payments

Let’s start there. In the chart below we can see the four series over the last 50+ years. All of them contracted on an annual basis at some point during each NBER recession since 1970, apart from the one in 2001, where real PCE didn’t contract (recessions are vertical gray bars in the chart below).

Zooming in to the present in the next chart, we can see that none of the four indicators are currently contracting. Industrial production is flat-lining around zero, payrolls growth is turning lower from a high level, while real PCE and real personal income are positive and have been rising.

Not only is the NBER very unlikely to call a recession based on the current state of play, leading data shows that is unlikely to change in the next 6-9 months.

All four indicators are coincident-to-lagging, and most of them are released with a delay.

That’s why we must turn to leading data series to pre-empt the NBER. It is increasingly pointing in the direction that the current slowdown won’t last quite long enough (have the duration) or fall hard enough (have the depth) to trigger an NBER recession.

First, there is the recent upturn in the manufacturing ISM, which anticipates that industrial production should soon recover. October’s ISM disappointed to the downside, and if sustained this would cause some concern. But leading data for the ISM, such as the rising new orders-to-inventory ratio and the steepening in the global yield curve (shown below), intimate the ISM has bottomed and should continue its rise.

Second, there is the strong upturn in the US Leading Indicator (composed of leading data series such as building permits), which points to a continued rise in real retail-sales growth, and thus real PCE.

Third, real wage growth has been growing positively, keeping real income less transfer payments supported. However, of the four indicators, real income faces the most downside risk. Leading indicators for wages are rolling over, pointing to lower wage growth next year.

Finally, an inflection lower in the annual growth of unemployment claims points to eventual support for payrolls growth. WARN data (which leads claims) is also now flat again, indicating any claims growth should be contained. The jobs market should continue to slow, but leading data is showing the slowdown may not be of sufficient depth for the NBER to deem it recession worthy.

None of the indicators are screaming recession. The NBER has stated it gives more weight to real income growth and payrolls in its assessment, but even if these two end up contracting, the data is showing that the other series do not look like following them down soon. Remember, the bureau has never called a recession in the last 50 years when fewer than three of the four indicators have been contracting, and then only once.

Instead, the biggest risk to a soft landing come from two other factors: geopolitical, and credit.

I won’t dwell on the first - an unexpected escalation in global hostilities would likely hit sentiment enough to tip the US into recession.

Credit is the biggest endogenous risk facing the economy and the market. Bankruptcy filings and charge-off rates are rising, indicating underlying stress not reflected in credit spreads. Moreover, the opacity in rapidly growing private-credit markets is becoming a greater concern. Credit should be monitored closely as a fast unraveling would swiftly take the economy into recession territory.

Until then an NBER-recession looks less likely than so over the next 6-9 months. Which is not how the situation looked earlier in the summer. Abnormally high fiscal deficits; the asynchronous recovery after the pandemic disrupting the traditional interplay between the goods and services economy; and money illusion to a degree most haven’t experienced before are all factors why this time is not following the usual script.

When the leading data turns sufficiently down, the NBER will make a recession announcement in due course. But we are unlikely to hear from them for a while yet.

Tyler Durden Thu, 11/09/2023 - 12:25

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Ethereum Spikes On BlackRock ETF Filing, “Heavily Institutional” Buying Sends Bitcoin Soaring

Ethereum Spikes On BlackRock ETF Filing, "Heavily Institutional" Buying Sends Bitcoin Soaring

Update (1230ET): Shortly after Bitcoin’s huge…



Ethereum Spikes On BlackRock ETF Filing, "Heavily Institutional" Buying Sends Bitcoin Soaring

Update (1230ET): Shortly after Bitcoin's huge surge overnight, Ethereum started to spike, reversing recent weakness vs Bitcoin...

The surge takes Ethereum to its highest since April...

With market participants pointing to BlackRock's filing for an Ethereum Trust ETF...

*  *  *

Bitcoin prices have exploded higher overnight, nearing $38,000, with the renewed bullish tone attributed to a combination of factors, including resurgent institutional interest, growing adoption, and a favorable macroeconomic climate.

Source: Bloomberg

For context, this price move has now erased the losses since the Terra stablecoin crisis 18 months ago...

Source: Bloomberg

As CoinTelegraph reports, while not expected until 2024, today, Nov. 9, marks the start of the period during which the long-awaited spot Bitcoin ETF approval announcement from regulators could theoretically come.

“We still believe 90% chance by Jan 10 for spot Bitcoin ETF approvals,” James Seyffart, research analyst at Bloomberg Intelligence, wrote on the topic.

“But if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur.”

Reacting to Seyffart, financial commentator Tedtalksmacro agreed.

“BTC sure is trading like an ETF decision is due any moment,” part of his own commentary read.

However, Bloomberg's Seyffart noted that even if 19b-4 is approved, an S-1 approval could take weeks or months between approval and launch.

A total of 12 asset managers have filed for a spot Bitcoin ETF with the SEC.

Additionally, short-sellers might be exiting positions, fueling the move higher.

As CoinDesk reports, data shows just under $50 million in liquidations occurred in a four-hour period during early Asian trading hours, creating a "short squeeze"

Most notably, as Goldman Sachs' Crypto team points out, initial market data suggests that market activity was heavily institutional with four main indicators:

1. In October, we saw approximately $437m of inflows into BTC exchange - traded products (Bloomberg). On a weekly basis, BTC-based digital asset investment products led the largest single-week inflows into crypto funds since July 2022, for the week ending 27 Oct 2023. BTC-based funds accounted for 90% of the total crypto fund inflows, totaling $296m ( Bloomberg ).

2. Most noticeable change was on CME, where Bitcoin futures open interest notched to an all-time high of 20,369 contracts on 25 Oct 2023 ( CME Group ), and 6 of the top 10 open interest days for bitcoin futures occurred between 20 and 27 Oct 2023. Total open interest on CME hit $3.58b on 30 Oct 2023. In October, CME surpassed the 100k BTC mark for the first time, overtaking Bybit and OKX to rank second behind only Binance ( CoinDesk ) among exchanges offering standard Bitcoin futures and perpetual futures. The daily traded volume for the front 3 - month expiries on CME also notched a YTD high of 25,185 contracts on 25 Oct 2023

3. In addition, the open interest across BTC options also reached an all - time high of $15.4b on 27 Oct 2023 ( The Block Data

4. On - chain activity remains muted relative to rest of the year, with daily active address count of 1.1m (vs 950k addresses (annual average in 2023) ( Coinmetrics ) and DEX to CEX spot trade volume at 13% (vs May’23 21%) ( The Block Data ).

James Van Straten, research and data analyst at crypto insights firm CryptoSlate, wrote in part of his latest research, referencing data from on-chain analytics firm Glassnode, which showed U.S. buyers sustaining the rally.

“Americans carrying this thing,” William Clemente, co-founder of crypto research firm Reflexivity added.

The $37,000 milestone sets up the more significant $40,000 psychological barrier to be broken, instilling a renewed sense of optimism in the cryptocurrency community.

“It’s always gonna be this” way, said Zaheer Ebtikar, founder of crypto fund Split Capital.

“People can’t help it. [Crypto] is literally the most FOMO industry ever.”

Meanwhile, Ethereum is also soaring higher, touching $2000 for the first time since July as interest in DeFi, and more specifically 'yield farming' begins to emerge once again...

As Bloomberg reports, yield farming was once a popular method for crypto projects to bootstrap new users in a short amount of time. It was especially popular in the ultra-low-interest-rate environment during the Covid-19 pandemic. That changed when crypto prices tumbled and traditional interest rates rose. 

“It just took the industry a bit of time to adjust to a regime of high tradfi yields with low crypto volumes, and being able to create competitive product in that space,” said Leo Mizuhara, founder and CEO of DeFi institutional asset manager Hashnote. Tradfi is a popular term used to describe traditional finance.

The surge in ETH has reverted its recent weakness against BTC...

As we tweeted on Oct 20th, the ETH/BTC cross was at a critical support level and today's price action suggests a push back above that...

The key question on investors’ minds now is whether the market has structurally changed?

Tyler Durden Thu, 11/09/2023 - 12:35

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