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COVID-19 Implications: Updated Thinking

COVID-19 Implications: Updated Thinking



Heightened concerns surrounding the spread of COVID-19 and the extent of its economic impact are driving significant volatility across asset classes globally. At this point the full impact on the global economy is unknowable, as it depends on the duration and strength of the quarantine now in effect across many locations in Europe and the United States.

China may serve as a benchmark for the scale of economic disruption, and the impact is colossal.

The economic impact in China may serve as a benchmark for the scale of economic disruption, and the impact is colossal. Industrial production declined by 13.5% year-over-year in January and February. Retail sales and auto sales (included in overall retail sales) declined by 20.5% and 37.0%, respectively, during the same period. Now that the peak of the outbreak seems to have passed, economic growth is starting to recover, albeit at depressed levels.

The root cause of the market malaise is the sharp rise in the number of new cases worldwide. While estimates for the ultimate spread of the virus are uncertain, it appears that Italy is following China with a two- to three-week lag, while the United States is a further two weeks behind. This suggests that the number of new cases may start to peak in Europe within the next two to three weeks, and in the United States in the next four to six weeks.

Stocks may thus bottom when European case growth peaks, if not sooner. That said, if European curves do not follow China’s curve, quarantines will then remain in place for longer and the rout in the financial markets may be extended.

While equities have entered bear market territory across many developed and emerging markets, we expect our emphasis on owning quality companies to continue to help protect on the downside.

 We are being deliberate with the actions we are taking.

We are being deliberate with the actions we are taking in response to the COVID-19 pandemic and are evaluating opportunities across all regions and sectors by comparing current valuation levels versus our expected long-term growth outlook.

We are actively evaluating opportunities to buy great companies that are now selling below intrinsic value, as well as quality cyclicals where we deem the risk/reward is favorable and balance sheets are strong.

In order to mitigate risk in our portfolios, we are also paying special attention to companies that may have benefited from the benign economic backdrop enabled by low rates and steady (albeit low) economic growth. We are thus re-evaluating the quality of portfolio companies, with an added emphasis on balance-sheet strength. These companies are being stress-tested for the first time in years.

While the damage to the economy is sure to be substantial, monetary policy is providing enough liquidity early, reducing a risk of a funding crisis. Fiscal policy is certain to follow as measures designed to support the economy are already in the works across the globe. The specifics of this will be increasingly important to determine which companies and industries are better positioned to navigate the downturn.

For China, the full brunt of the decline is likely to be borne in the first quarter of 2020, while for both Europe and the United States the lowest levels of activity are likely to be during March and April. This means that GDP contraction (recession) is likely to be spread over the first and second quarters of 2020.

COVID-19 Update

COVID-19 infection-rate forecasts vary greatly, as the infection rate depends on the ability for the virus to infect new hosts as well as our health and behavior (including the ability to decrease the spread). The more we implement measures to stop the spread of the virus, including social distancing, the lower the infection rate will be.

If the United States and other countries succeed in implementing measures to decrease the spread of the virus, the infection rate should be on the lower end of the scale. In South Korea and China outside Wuhan, where widespread testing and social distancing were implemented, the infection rate is well below 1%. That said, we may see a small rebound of the virus when more people go back to work.

To put that into broader context, the Swine flu in 2009-2010 had an infection rate of 20% to 25%, infected 60 million people in the United States alone (18% of the population), and caused about 300,000 hospitalizations.

While probable, warmer weather is not guaranteed to slow the spread of the virus.

While it is impossible to say exactly when COVID-19’s spread will peak, it is reasonable to believe that it could follow a similar pattern as other respiratory viruses and begin to decrease in April or May because of increasing outdoor temperatures and humidity. With increasing outdoor temperatures and humidity our respiratory systems become less sensitive to respiratory infections. Moreover, our behavior changes when the weather gets warmer as we tend to spend more time outdoors, where it is more difficult for the virus to spread effectively.

While probable, warmer weather is not guaranteed to slow the spread of the virus.  Developments in the southern hemisphere should provide insight. Currently in the southern hemisphere, there is no clear evidence of general social spreading. In Brazil, for example, there are 529 cases reported. We expect cases in Brazil will start to increase in May or June when its cold season begins. However, if we see a broad spreading of cases in the southern hemisphere before the weather cools, it would be very concerning. We are thus tracking this carefully.

It is too early to say with certainty if the virus will re-emerge in the northern hemisphere in the fall and winter, but it is certainly possible. However, if the virus does re-emerge, the community should have some immunity, making the overall impact less severe. We are also working on various antiviral treatments and vaccines, some of which we hope will be available next season.

The biggest debate is that while we know all things will pass, we do not know the duration of this episode. We will keep you updated on our thoughts as events unfold.

Ken McAtamney, partner, is a portfolio manager on William Blair’s Global Equity team.

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War, peace and security: The pandemic’s impact on women and girls in Nepal and Sri Lanka

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to improve the lives of women and girls in postwar countries…



Nepalese girls rest for observation after receiving the Moderna vaccine for COVID-19 in Kathmandu, Nepal. (AP Photo/Niranjan Shrestha)

Attention to the pandemic’s impacts on women has largely focused on the Global North, ignoring countries like Nepal and Sri Lanka, which continue to deal with prolonged effects of war. While the Nepalese Civil War concluded in 2006 and the Sri Lankan Civil War concluded in 2009, internal conflicts continue.

As scholars of gender and war, our work focuses on the United Nations Security Council Resolution 1325 on women, peace and security. And our recently published paper examines COVID-19’s impacts on women and girls in Nepal and Sri Lanka, looking at policy responses and their repercussions on the women, peace and security agenda.

COVID-19 has disproportionately and negatively impacted women in part because most are the primary family caregivers and the pandemic has increased women’s caring duties.

This pattern is even more pronounced in war-affected countries where the compounding factors of war and the pandemic leave women generally more vulnerable. These nations exist at the margins of the international system and suffer from what the World Bank terms “fragility, conflict and violence.”

Women, labour and gender-based violence

Gendered labour precarity is not new to Nepal or Sri Lanka and the pandemic has only eroded women’s already poor economic prospects.

Prior to COVID-19, Tharshani (pseudonym), a Sri Lankan mother of three and head of her household, was able to make ends meet. But when the pandemic hit, lockdowns prevented Tharshani from selling the chickens she raises for market. She was forced to take loans from her neighbours and her family had to skip meals.

Some 1.7 million women in Sri Lanka work in the informal sector, where no state employment protections exist and not working means no wages. COVID-19 is exacerbating women’s struggles with poverty and forcing them to take on debilitating debts.

Although Sri Lankan men also face increased labour precarity, due to gender discrimination and sexism in the job market, women are forced into the informal sector — the jobs hardest hit by the pandemic.

Two women sit in chairs, wearing face masks
Sri Lankan women chat after getting inoculated against the coronavirus in Colombo, Sri Lanka, in August 2021. (AP Photo/Eranga Jayawardena)

The pandemic has also led to women and girls facing increased gender-based violence.

In Nepal, between March 2020 and June 2021, there was an increase in cases of gender-based violence. Over 1,750 incidents were reported in the media, of which rape and sexual assault represented 82 per cent. Pandemic lockdowns also led to new vulnerabilities for women who sought out quarantine shelters — in Lamkichuha, Nepal, a woman was allegedly gang-raped at a quarantine facility.

Gender-based violence is more prevalent among women and girls of low caste in Nepal and the pandemic has made it worse. The Samata Foundation reported 90 cases of gender-based violence faced by women and girls of low caste within the first six months of the pandemic.

What’s next?

While COVID-19 recovery efforts are generally focused on preparing for future pandemics and economic recovery, the women, peace and security agenda can also address the needs of some of those most marginalized when it comes to COVID-19 recovery.

The women, peace and security agenda promotes women’s participation in peace and security matters with a focus on helping women facing violent conflict. By incorporating women’s perspectives, issues and concerns in the context of COVID-19 recovery, policies and activities can help address issues that disproportionately impact most women in war-affected countries.

These issues are: precarious gendered labor market, a surge in care work, the rising feminization of poverty and increased gender-based violence.

A girl in a face mask stares out a window
The women, peace and security agenda can help address the needs of some of those most marginalized. (AP Photo/Niranjan Shrestha)

Policies could include efforts to create living-wage jobs for women that come with state benefits, emergency funding for women heads of household (so they can avoid taking out predatory loans) and increasing the number of resources (like shelters and legal services) for women experiencing domestic gender-based violence.

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to achieve the agenda’s aims of improving the lives of women and girls in postwar countries like Nepal and Sri Lanka.

Luna KC is a Postdoctoral Researcher at the Research Network-Women Peace Security, McGill University. This project is funded by the Government of Canada Mobilizing Insights in Defence and Security (MINDS) program.

Crystal Whetstone does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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ThreatX raises a fresh round of capital to protect APIs and web apps

ThreatX, a vendor selling API protection services to mainly enterprise clients, today announced that it raised $30 million in a Series B funding round…



ThreatX, a vendor selling API protection services to mainly enterprise clients, today announced that it raised $30 million in a Series B funding round led by Harbert Growth Partners with participation from Vistara Growth, .406 Ventures, Grotech Ventures and Access Venture Partners. With the new cash, which brings ThreatX’s total raised to $52 million, CEO Gene Fay tells TechCrunch that ThreatX will “accelerate” investments in platform development while scaling sales and marketing initiatives.

The raise highlights investors’ continued confidence in cybersecurity businesses to net returns, despite the current macroeconomic woes. While there’s some evidence that fundraising has begun to slow down, cybersecurity startups raised $2.4 billion between January and June, according to PitchBook. Companies that defend APIs from outside attack have been particularly fruitful, lately, with startups such as Ghost Security and Corsha raising tens of millions of dollars in capital.

ThreatX was co-founded in 2014 by Bret Settle and Andrius Useckas. Prior to starting ThreatX, Settle was VP of enterprise architecture at BMC; Useckas had worked with Bret at BMC, where he was an enterprise security architect. The two were also colleagues at Corporate Express, which was acquired by Staples in 2008, where Useckas came in as an external pen tester.

“Over the course of working together for several years, Settle and Andrius saw a massive gap in the market in terms of solutions to protect BMC’s application portfolio,” said Fay, who was appointed CEO of ThreatX in 2020. “The products available required endless tuning and rule-writing and returned piles of false positives. Through all of this, the notion of innovating in the space — and ThreatX — was born.”

ThreatX offers API protection, bot and DDoS mitigation and traditional web application firewalls (WAF) for first- and third-party web apps. The platform builds a profile of threat actors, leveraging a detection and correlation engine to show which actors are actively attacking and which might pose the greatest threat.

Image Credits: ThreatX

Fay sees ThreatX competing primarily with two categories of cybersecurity vendors. The first are newer API observability tools such as Salt Security and Noname. The second are bot management platforms like Cequence and WAF players such as Akamai, F5 and Imperva, which generally rely on applying rules-based protection to web apps and APIs.

Fay argues that the former group — the bot management and WAF vendors —  tend to offer capabilities that came together through acquisition, so they’re less integrated. As for the latter — the API observability tools — Fay asserts that they often don’t offer web app or bot protection and require offline analysis, which precludes the ability to block attacks in real time.

“The bottom line is that to protect APIs, you must be able to block attacks in real time,” Fay said. “Grabbing data through observation and analyzing it after the fact may be interesting, but it does little from an immediate security standpoint. For our customers, the number one priority is protection — in real time, all the time. That is the value proposition we offer to our customers.”

Real-time protection or no, it’s true that API attacks are a growing cyber threat. Gartner predicts that by 2022, API attacks will become the most frequent attack vector, causing data breaches for enterprise web software.

“The COVID-19 pandemic accelerated use of APIs as companies looked at how they might provide new services to deliver value — and derive revenue — from customers,” Fay added. “As people — both as consumers and professionals — turned to technology to get more done, reliance on both APIs and web applications grew substantially. That, in turn, has increased the need for security in this context — which presents a ton of opportunity for ThreatX.

While Fay demurred when asked about financials, he said that ThreatX currently has “more than” 100 customers. He declined to name any names.

When reached for comment, Harbert Growth Partners general partner Tom Roberts said in a statement:

APIs are a strategic priority for businesses of all sizes and have become a primary target for threat actors. Organizations are now contending with constant threats and require API and web application protection capabilities that can identify and respond to attacks in real time. This need for “real-time attack protection” is driving the API security market toward an aggressive pivot. Based on ThreatX’s strong customer traction and unique product capabilities, we believe the company is well positioned to meet this shift head-on as a valuable partner to businesses looking to secure their attack surface.

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CDC Announces Overhaul After Botching Pandemic

CDC Announces Overhaul After Botching Pandemic

After more than two years of missteps and backpedaling over Covid-19 guidance that had a profound…



CDC Announces Overhaul After Botching Pandemic

After more than two years of missteps and backpedaling over Covid-19 guidance that had a profound effect on Americans' lives, the Centers for Disease Control (CDC) announced on Wednesday that the agency would undergo a complete overhaul - and will revamp everything from its operations to its culture after failing to meet expectations during the pandemic, Bloomberg reports.

Director Rochelle Walensky began telling CDC’s staff Wednesday that the changes are aimed at replacing the agency’s insular, academic culture with one that’s quicker to respond to emergencies. That will mean more rapidly turning research into health recommendations, working better with other parts of government and improving how the CDC communicates with the public. -Bloomberg

"For 75 years, CDC and public health have been preparing for Covid-19, and in our big moment, our performance did not reliably meet expectations," said Director Rochelle Walensky. "I want us all to do better and it starts with CDC leading the way.  My goal is a new, public health action-oriented culture at CDC that emphasizes accountability, collaboration, communication and timeliness."

As Bloomberg further notes, The agency has been faulted for an inadequate testing and surveillance program, for not collecting important data on how the virus was spreading and how vaccines were performing, for being too under the influence of the White House during the Trump administration and for repeated challenges communicating to a politically divided and sometimes skeptical public."

A few examples:

Walensky made the announcement in a Wednesday morning video message to CDC staff, where she said that the US has 'significant work to do' in order to improve the country's public health defenses.

"Prior to this pandemic, our infrastructure within the agency and around the country was too frail to tackle what we confronted with Covid-19," she said. "To be frank, we are responsible for some pretty dramatic, pretty public mistakes — from testing, to data, to communications."

The CDC overhaul comes on the heels of the agency admitting that "unvaccinated people now have the same guidance as vaccinated people" - and that those exposed to COVID-19 are no longer required to quarantine.

Tyler Durden Wed, 08/17/2022 - 12:22

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