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Inflation: What If It’s Higher For Longer? Bonds Or Stocks?

Inflation: What If It’s Higher For Longer? Bonds Or Stocks?

Authored by Bill Blain via,

“What do you mean you can’t…



Inflation: What If It's Higher For Longer? Bonds Or Stocks?

Authored by Bill Blain via,

“What do you mean you can’t swim, the fall’s going to kill you!”

There are lots of outlooks and scenarios on the inflation threat: what if its longer and turns stagflationary, and just how much more destabilising would the fraxious global economy become?

Yesterday, I spent some time with two of Shard’s senior investment professionals discussing inflation – and the contrasting outlooks for the US and Europe. They are smart guys and have rein to think outside the box – one of the key reasons I joined Shard a few years ago. Together we recorded a new Shard Lightbite Podcast on inflation expectations. (It should be available on-line later this week – I will post it.) Toward the end of the Podcast I asked them both for their views on where inflation will be at year-end 2022 and 2023, and gave them a straight choice: Bonds or Equity?

Both expect inflation to remain stubbornly high in the US and Europe, that Stagflation (recession plus inflation) is possible in the US and likely in Europe, and yet both favoured bonds (on the basis real yields may be below inflation, but at least you get your money back…) As said; the podcast will be available shortly – but broadly; persistent inflation and a stressed global economy is bad for risk assets, i.e. stocks! If they are right, and it looks to be happening… the current stock rally could still prove a massive bear trap.

(Remember – Blain’s Mantra No 1: The market has only one objective: to inflict the maximum amount of pain on the maximum number of participants.)

Of course, the recent rise in US stocks and Treasuries says otherwise! Give or take Nancy Pelosi starting a war or the San Fran Fed Head, the lines on the charts suggest markets believe US inflation will prove short-lived, recession can be avoided, and the Fed will calm the pace of anti-inflationary monetary tightening. I wrote about it yesterday and concluded the early US recovery and growth scenario makes sense – if inflation can be tamed – and that Europe faces a much tougher time.

Ding Ding Ding!… alarm bells going off in my head…

Over the nearly 40 years I’ve worked in finance I’ve come to understand the dangers of looking at the global economy and financial markets in terms of “snapshot” explanations. Typically, the market commentariat discerns the future in linear terms; how the shape of a graph describing what happened will determine what happens next by referencing what similar shapes have done in the past, what a particular number or event means for markets based on experience, and how the behaviours that drive markets are largely predictable.

Funnily enough, if enough people believe in what a chart is apparently showing them – then it can predict what happens next:  if the individual participants that make up the market collectively believe in the chart, then it’s their collective vote that determines what happens next. If I can persuade enough market participants Pelosi going to Taiwan will trigger WW3, then then the market will trade accordingly.

However, facts and beliefs don’t always coincide.

The problem with inflation is it’s not a snapshot event. It’s a trigger event for much wider consequences and fundamental change – and the effects of the current inflation shock continue to ripple out across the global economy in so many ways they become effectively impossible to predict or model – with conventional thinking.

We know this inflation event is different; triggered by the collapse of global supply chains during the pandemic, the subsequent pandemic responses and changing geopolitical tensions, all reinforced by the consequences of Russia’s invasion of Ukraine – which includes the chronic energy insecurity of Europe. But we also need to factor in other sociological factors. (Wow.. a market strategist using “sociological” in a comment.. is that a first?)

At best we can make educated guesses on the economic and behavioural events we can expect to see in coming months. We tend to think in terms of linear consequences, like price inflation driving wage demands – and rising industrial tension, but this time it could get more serious… If you want to understand where we are going, I suspect we need to look through a glass darkly:

First up is the structure of global trade and production.

Everyone assumes that Covid restrictions in China will prove short-lived, will ease, and trade and supply chains reopen. Not so. Supply chains are evolving and encountering new splits and hurdles. These are being exacerbated by rising Geopolitical tensions – such as Nancy’s shopping trip to Taipei. Global Trade and manufacturing will remain stressed for longer.

Second up is conflict.

Europe faces some ultra-bleak challenges in coming months as winter bites and gas prices rocket. Energy insecurity is going to bite across Europe – and inflict serious economic and political damage.

Third up is Society.

Since the global financial crisis that began in 2008 we’ve seen extraordinary monetary experimentation by Central Banks to sustain the global economy – with the bonus effect of boosting markets. Almost immediately, smart traders realised Central Banks distorting cash and liquidity was a free-good for markets. So it proved: from 2010-2022 the value of every single financial asset (stocks, shares, you name it) went up, fuelled by the cheapness of money.

The result was a massive reallocation of wealth across the global economy towards the owners of financial assets. Wealth became increasingly concentrated in very few hands. Asset owners and the C-Suites saw their wealth multiply, while real incomes stagnated, middle classes were asset stripped, and new generations of workers find themselves with lower disposable incomes, no chance of climbing on the prosperity ladder, and increasing resentments towards a society that looks to be failing them. The rich can afford private doctors, the rest of us queue for weeks in failing bureaucracies.

I don’t believe in dystopian outcomes, but I do expect folk to become increasingly angry. Angry voters vote for populists who make grandiose promises, struggle to deliver them, and then have to distract the masses. That makes the world increasingly less secure.

To illustrate the point, let’s switch to the UK. The National Institute of Economic and Social Research – NIESR – sees a deepening cost-of-living crisis, 5.3 million more UK households finding themselves with zero fall-back savings, and rising food and energy prices putting more low-income families into poverty. It notes the high savings accumulated during pandemic lockdown are distributed “highly unevenly”.

In five weeks we will get a new UK Prime Minister, likely to be Liz Truss. I have no idea if she will be good/bad/indifferent. But I’m pretty sure nothing will really change before the next election in 2024 and the UK electorate will be looking for someone to blame. She is darn lucky the Labour opposition is so ditheringly week they can’t exploit it. In short, I don’t see any sign of a UK political fix – a necessary precondition for a sustained UK economy recovery – any time soon.

Tyler Durden Wed, 08/03/2022 - 09:00

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Exosomes Could Improve Inhaled Therapeutics

Instead of disguising vaccines in synthetic lipid nanoparticles, researchers used exosomes as their drug delivery vehicles to the lung. The exosomes are…



For respiratory diseases, from asthma to COVID-19, inhaled treatments can quickly deliver a drug to the desired target, the lungs. Global health depends on such treatments. As Kristen Popowski, a PhD candidate in comparative biomedical sciences at the North Carolina State University’s College of Veterinary Medicine in Raleigh, and her colleagues wrote: “Respiratory diseases are among the leading causes of morbidity and mortality worldwide, with coronavirus disease 2019 (COVID-19) remaining prevalent in the ongoing pandemic.”

Kristen Popowski [North Carolina State University]
Although lipid nanoparticles offer one delivery vehicle for such treatments, nature creates an obstacle. “The lung has natural defense mechanisms against inhaled particulates, and traditional lipid-nanoparticle vaccines present challenges in cytotoxicity and respiratory clearance,” says Popowski. “A nanoparticle formulation that can withstand these defense mechanisms remains a critical challenge.” So, Popowski and her colleagues explored an alternative approach.

“Instead of disguising vaccines in synthetic lipid nanoparticles, we utilize cell-secreted nanoparticles called exosomes as our drug delivery vehicles to the lung,” Popowski explains. “Our exosomes are secreted from native lung cells and are recognizable by the lung.”

Consequently, she says, “We can minimize pulmonary toxicity and clearance to better deliver and retain vaccines.” In addition, the exosome-based treatments developed by Popowski and her colleagues can be formulated as a dry powder that requires no refrigeration and can have a shelf life of 28 days.

Despite the incentives to take an exosome-based approach to inhaled treatments for respiratory diseases, turning that into a part of bioprocessing requires more research.

“Although commercial manufacturing of exosomes has recently shown extensive improvement, optimization of mRNA loading into exosomes remains a challenge,” Popowski says. “Endogenous mRNA expression through exosome engineering would likely be necessary for large-scale production.”

The post Exosomes Could Improve Inhaled Therapeutics appeared first on GEN - Genetic Engineering and Biotechnology News.

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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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