I’ve had two big worries during the pandemic, starting from the very beginning and still ongoing.
Both relate to my sense that ‘coronaphobia’ has taken over as the basis of government policy in so many countries, with a complete loss of perspective that life is a balance of risks pretty much on a daily basis.
First, the extent to which dominant majorities of peoples in countries with universal literacy can be successfully terrified into surrendering their civil liberties and individual freedoms has come as a frightening shock. There is this truly confronting video of the police in Melbourne assaulting a small young woman – for not wearing a mask!
On the one hand, the evidence base for the scale and gravity of the Covid-19 pandemic is surprisingly thin in comparison to the myriad other threats to our health that we face every year. We don’t ban cars on the reasoning that every life counts and even one traffic death is one too many lives lost. Instead, we trade a level of convenience for a level of risk to life and limb.
On the other hand, the restrictions imposed on everyday life as we know it have been far more draconian than anything previously done, even during World War II or the great 1918-19 flu. In present circumstances, the argument for the crucial importance of liberties has been made most eloquently by former UK Supreme Court Justice Lord Sumption in a BBC interview on March 31st, and repeated several times since.
But it’s also an argument that Benjamin Franklin, one of the founding fathers of America (and therefore suspect in the post-Black Lives Matter and statues-toppling environment), made back in the 18th century: ‘Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety’.
Yet, the evidence for the effectiveness of draconian lockdowns is less than convincing. As one Lancet study concluded, ‘Rapid border closures, full lockdowns, and wide-spread testing were not associated with COVID-19 mortality per million people’.
Second, the coronavirus threatens to overwhelm the health and economies of many developing countries where a billion people subsist in a Hobbesian state of nature and life is ‘nasty, brutish and short’. In poor countries, the biggest numbers of deaths are caused by water-borne infectious diseases, nutritional deficiencies and neonatal and maternal complications.
The lockdown has produced its own version of Thucydides’ dictum that the strong do what they can, the weak suffer as they must. In developing countries, saving livelihoods is no less important than saving lives. The privileged jet-setters who imported the virus can utilise the private hospitals but the poor they infect have little access to decent healthcare and will be disproportionately devastated. The rich carry the virus, the poor bear the burden since staying at home means foregoing daily income. Millions ‘fear hunger may kill us before coronavirus’.
I remain very puzzled at how so many people I considered to be liberals have been so utterly indifferent to the plight of the poor and the casual labourers who do not have the luxury of working from home, nor savings to fall back on to tide their family over until they can earn an income again.
Celebrities posting videos and selfies of working from home in opulent mansions is positively obscene and revolting. Not surprisingly, given my Indian background, I was powerfully influenced by the visual images of the millions of migrant workers literally on the march by foot over thousands of kilometres trying desperately to make their way back to home villages as all work dried up.
Many died en route and the heartbreaking case of Jamlo Madkam in particular, a 12-year old girl who trekked 100km but died of exhaustion just 11km from home, has never stopped haunting me.
This is not to say that high-income Western countries are immune from the deadly effects of lockdown. But the acuteness of the harsh impacts on the poor is just unconscionable and hard to comprehend intellectually as well as emotionally.
What about AFTER this pandemic? What worries you the most?
Most of my answer to this question is anticipated in the answer to the first question: the long-term impact on the health, nutritional requirements, food security, mental wellbeing of people, etcetera. I’ve been worried from the start by the long-term impact of lockdowns over the coming decade on the lives and livelihoods of poor people in poor countries.
I wonder, too, if we have set ourselves up to repeat the folly every year with annual outbreaks of flu, especially if it is a bad flu season. If not, why not? Perhaps someone will come up with the slogan ‘Flu Lives Matter’. Or governments could just pass laws making it illegal for anyone to fall sick and die.
How and when are we going to return to the ‘new normal’ and what will it look like? Globalisation has underpinned unprecedented prosperity and the rise of educational and health outcomes for billions of people around the world, along with a dark underbelly of uncivil society. Will its discontents now throw away substantial benefits as the world retreats behind national moats once again?
The pandemic proves conclusively the need to demilitarise foreign policy and promote greater multilateral cooperation against grave threats that are global in nature and require global solutions. What my former boss, the late Kofi Annan, called ‘problems without passports’ require solutions without passports. The risk is instead we will move in the opposite direction and recreate regionalised balance of power systems in various hotspots around the world.
Pandemics have long been identified as one of many global challenges for which the world should have prepared in advance. Recently The Wall Street Journal had a major investigative article on the failure to do so, despite ample warnings from scientists. ‘A Deadly Coronavirus Was Inevitable. Why Was No One Ready?’ asked the authors, and quite rightly too.
Another catastrophe into which we seem to be sleepwalking is a nuclear war. And remember, the whole point of the sleepwalking analogy is that people walking in their sleep are not aware of it at the time. Other pressing global challenges include growing ecosystem imbalances and fragility, depletion of fish stocks, food and water insecurity, desertification, and of course a host of other diseases that remain the biggest killers on an annual basis.
By way of a concluding reflection, I think a common error has been to privilege the medical over all other considerations. In reality, and certainly with the benefit of hindsight but also from the very beginning in my case, this should have involved a considered assessment of what I call ‘A Balance of Interests’ (my chapter in The Oxford Handbook of Modern Diplomacy). Governments must take into account and reconcile medical, social, economic, liberal democratic, human rights and international policies in fashioning an integrated public policy response to a pandemic.
* * *
The above is extracted from a long, 3,000 word full page interview featured in a Sunday edition of the Argentine daily La Nación on August 22, 2020 (in Spanish): Hugo Alconada Mon, ‘The Tyranny of Coronaphobia’, INTERVIEW WITH RAMESH THAKUR
Since then Covid has mutated into multiple variants, mass vaccinations have been carried out in very many countries, and our understanding, data and knowledge have evolved and grown. Despite that, re-reading these two worries each about the policy responses to Covid two years ago and about the possible ramifications for what the post-Covid new normal will look like, I don’t think I would change a single word today.
I confess I still don’t understand the global outbreak of collective panic and hysteria, the shelving of all existing pandemic management plans, the failure of medical professions to speak out, and the astonishing public compliance with authoritarian policies.
Pfizer bid for sickle cell drug developer GBT said to be imminent
Pfizer is on the brink of announcing a deal to buy Global Blood Therapeutics (GBT) and its oral
The post Pfizer bid for sickle cell drug developer GBT…
Pfizer is on the brink of announcing a deal to buy Global Blood Therapeutics (GBT) and its oral therapy Oxbryta for sickle cell disease for around $5 billion, according to press reports.
A deal could be announced as early as today, when GBT is scheduled to report its second quarter results, according to a Wall Street Journal report citing people familiar with the matter. Neither GBT nor Pfizer has commented on the rumour.
If confirmed, it will be another example of Pfizer leveraging the windfall cash generated by its COVID-19 vaccine Comirnaty and oral antiviral therapy Paxlovid to beef up its pipeline of new therapies, coming a few months after it closed a $6.7 billion acquisition of Arena Pharma and made an $11.6 billion takeover bid for Biohaven.
GBT won FDA approval for Oxbryta (voxelotor) as a daily tablet for the treatment of SCD in patients aged 12 and over in 2019, extending its use to include younger children aged four and over last December, and earlier this year also got a green light from regulators in Europe for the over 12s.
The $125,000-a-year drug is a haemoglobin polymerisation inhibitor designed to prevent the deformation or ‘sickling’ of red blood cells associated with the disease, and has been tipped to become a $1 billion-plus product.
Sales of Oxbryta have been a little slow to gather momentum, mainly because of payer resistance in the US, but are picking up the pace with a 41% rise to $55 million in the first quarter of this year.
There are around 100,000 people in the US living with SCD, and more than 20 million globally, according to the FDA.
If a deal is forthcoming, Pfizer would also claim inclacumab, a P-selectin inhibitor in phase 3 testing for prevention of the painful vaso-occlusive crises that afflict people living with SCD , as well as an early-stage polymerisation inhibitor called GBT021601 intended as a follow-up to Oxbryta.
Other suitors are also reported to be circling GBT however, according to Bloomberg, whose report sparked a 33% spike in GBT shares to more than $68 on Friday, not far shy of the company’s 52-week high of $73 and giving it a market capitalisation of more than $4 billion.
The post Pfizer bid for sickle cell drug developer GBT said to be imminent appeared first on .vaccine treatment testing fda therapy covid-19 europe
Here We Go Again – Monkeypox Communications Challenges
In February 2020 I published a blog posting – Emerging Pathogens, Communications – that encapsulated my observations and learnings from my years work…
In February 2020 I published a blog posting – Emerging Pathogens, Communications – that encapsulated my observations and learnings from my years work in the early years of the HIV/AIDS pandemic in the early 1980s. As we sit, possibly, on the cusp of another large scale medical challenge with monkeypox, it seemed like a good idea to revisit the topic. When there is a new and scary thing we are facing, medically speaking, there are some truisms regarding the communications environment that can inform strategic thinking about how we talk about it.
- Facts are low, speculation is high – And nature hates a vacuum and there will be many who are willing to fill the void with misinformation. People want facts, and the fact is, facts are in short supply.
- Numbers don’t mean a lot – First of all, they change quickly – and are changing very quickly with monkeypox. In addition, there is often a lack of accurate reporting for many reasons.
- Points of reference will change – What we know, and what we don’t know, will change over time as we get more experience and gain wider understanding. That might seem like a good thing, but in fact, changing stories undermine credibility.
- Fraud potential is high – There are people who will take advantage of the situation and exploit it for political and/or financial gain. That, too, impacts credibility and can confuse people.
- Policy is likely to be ham-handed – Policies may be developed quickly and without adequate information and be based on emotion and bias more than facts. This is another factor that strains credibility.
Monkeypox is not COVID, and COVID was not AIDS. They each present distinct challenges and evoke particular fears and concerns. There are big differences between the three. But they are all viruses. And when it comes to communications challenges there are many commonalities.
First and foremost, in the absence of facts, fear can drive actions. And when a pathogen is newly emerging, facts are greatly outnumbered by questions. The degree to which companies, educators, businesses and service providers may want to prepare to deal with those challenges may depend on where they are, who their stakeholders are, and how big or small they are. At this stage though, better to consider the challenges that may lay before you know, before they present themselves.
It may be that monkeypox is contained early if we are lucky. There are reported signs that transmission may be slowing in the U.K. and the trend in the graph above appears to show some deceleration. That said, the numbers have increased quickly on an extremely steep curve. That means there is an increasing amount of virus out there. The virus has mainly spread among men who have sex with men and transmission is being attributed to skin contact. But the higher the numbers go the greater potential there is for more lateral spread. A presumptive pediatric case was reported last week in California. It is also a virus that can move between people and animals.
Containment depends on systems that are able to screen, test, treat, and prevent (both by means of avoiding circumstances that can enhance transmission and by vaccination). To that end, many things are not in our favor. An extremely splintered approach at federal, state and local levels impacts the coordination of a public health response. We have COVID fatigue in the extreme. And in terms of tools, we do not have a means for screening, meaning we do not know who is infected before they exhibit symptoms which may take several days; the testing situation is complicated because there is no quick, at-home testing like there is for COVID and may be best applied when there are lesions. But people may have other symptoms such as headache, chills, muscle aches, swollen lymph nodes and exhaustion. The only FDA-approved drug to treat is approved for smallpox, but no Monkeypox and has been difficult to access. In terms of prevention, while a vaccine has been developed, supply is very short and it, too, has been hard to get.
Additional challenges include the fact that the course of illness runs two to four weeks. If a person must self-isolate for that length of time it is not only difficult, but there may be unintended consequences. With men who have sex with men comprising the overwhelming majority of cases, a diagnosis is the equivalent of coming out. For many gay men that is not a problem. For many others, who may have wives and children, it can be a very large one, facing a situation that may have both personal and professional peril.
At the present time, there are some states which are reporting higher numbers than others. If the numbers do continue to climb, then a larger number of geographies will be impacted and most likely a wider circle of people, raising the chances that large employers, those in specific sectors, may face communications challenges sooner rather than later such as:
- Travel and hospitality
- Schools and universities
- Institutional settings such as daycare centers, rehab and nursing homes (a case of a daycare workers was reported in Illinois last week)
What to Do
Every business, service or place of public accommodation is different. There is no one-size-fits-all approach to preparation. One must consider the size of the enterprise, the stakeholders and the level of physical contact and interaction with surfaces. That said, there are echos from both AIDS and COVID that shed light into how people may react to the emergence of another communicable condition. A few things to consider:
- Review policies and assess what may need to be changed or amended; this is not just COVID return-to-work policies, but discrimination policies as well. Re-think many of the things you have had to communicate about a virus transmitted by air, and re-fashion to think about surfaces. Monkeypox will present distinct challenges.
- Consider the questions and issues you may face. Can we catch monkeypox using the toilet? Trying on clothes? Do I have to sit next to the gay man? My co-worker says it is eczema, I’m afraid it is Monkeypox. Depending on your business, your clientele, there are different sets of questions that may arise for different settings. Think about what they might be and to what degree you are the one to have to provide the answers.
- Assess the triggers for potential fear and conflict between employees, customers and users of any service.
- Communicating in an environment where what we know changes, and what was certain yesterday may be uncertain tomorrow is always a strain on credibility. Therefore consider integrating reminders to that effect in your communications. What we know now is….
- Gather reliable resources – the obvious ones such as CDC, FDA, and Departments of Health at the state and local levels, but also consider credible grassroots organizations, particularly ones that may resonate with stakeholders, particularly those dealing with gay-related health issues and key medical societies such as the American Society for Microbiology and others.
Many people think that preparation during such a nascent phase of the outbreak is over-reacting. I hope they are right. But having lived through AIDS and COVID, and seen early numbers quickly spell a different story over a very short period of time, one may be well-served to think it through now.cdc pandemic vaccine testing fda containment spread transmission
Stocks for a recession: which companies have historically done well during recessions or are likely to this time?
Last week the Bank of England forecast a recession starting this autumn that it now expects to be deeper and longer than previously assumed. It also expects…
Last week the Bank of England forecast a recession starting this autumn that it now expects to be deeper and longer than previously assumed. It also expects inflation to hit 13% by the end of the year just months after reassuring that it didn’t expect more than modestly high figures.
Having belatedly acknowledged the extent of the inflation problem, admittedly exacerbated by the impact on energy and food prices the war in Ukraine has had, the UK’s central bank’s nine-member Monetary Policy Committee voted to raise interest rates. Thursday’s 0.5 percentage points rise, which took the BoE’s base rate to 1.75%, was the biggest single increase in 27 years.
The European Central Bank and USA’s Federal Reserve have also taken aggressive measures on rates, with the former also raising rates by 0.5% to 0%. It was the ECB’s first rates rise in 11 years. The Fed went even further, raising rates for the fourth and largest time this year with a 0.75 percentage points hike to between 2.25% and 2.5%.
Aggressive interest rate hikes alongside high levels of inflation tend to result in recession with the combination referred to as stagflation. With inflation expected to remain high next year and not dropping back towards the target 2% before 2023, we could be in for an extended period of recession.
Why stock markets fall during a recession but not all stocks do
Stock markets historically do badly during recessions for the simple reason they are a proxy for the economy and economic activity. When economic activity drops, people and companies have less money or are worried about having less money, so they spend less and companies earn less. Investors also become less optimistic about their prospects and valuations drop.
But the kind of drop in economic activity that leads to recessions is not evenly distributed across all areas of an economy. When consumers cut back on spending, they typically choose to sacrifice some things and not others, rather than applying an even haircut across all costs. And there are goods and services that people spend more on rather than less when tightening their belts.
So while the net impact of a recession has always historically been the London Stock Exchange and other major international stock markets losing market capitalisation, or value, that doesn’t mean all the stocks that constitute them go down. Some go down by more than others. And some stocks grow in value because the companies sell the categories of goods and services people spend more on when they are either poorer or worried about becoming poorer.
Should we be investing “for” a recession?
This surely means all investors need to do to mitigate against a recession is to sell out of the stocks that do badly during an economic slump and buy into those that do well? In theory, yes. In practice, doing that successfully would mean being sure a recession will take place some time before it becomes a reality and timing its onset, then the subsequent recovery, well.
That is of course far easier said than done which is why even professional fund managers don’t attempt the kind of comprehensive portfolio flip that would involve. Some investors will make big bets on events like the onset of a recession or inflation spiralling out of control.
They are the kind of bets that make for dramatic wins like those portrayed in the Hollywood film The Big Crash, which tells the story of a group of traders who predicted and bet big on the 2007 subprime mortgage implosion that triggered the international financial crisis. But as the film relies on for its dramatic tension, the big winners of The Big Crash very nearly got their timing wrong. Another few days and they would have been forced to close their positions just before market conditions turned in their favour and lost everything.
The reality is the big, risky bets that result in spectacular investment wins when they come off are usually far more likely to go wrong than right. Which is why regular investors, rather than high risk traders using leverage, shouldn’t take them. At least not with their main investment portfolio if they don’t have the luxury of being able to justify setting aside 10% to 20% of capital for highr isk-high reward bets.
If you have a well-balanced investment portfolio with a long term horizon and you are happy with the overall quality of your investments, you may choose to do nothing at all to mitigate against the recession that is almost certainly coming. If you have ten years or more until you expect to start drawing down an income from your portfolio, your investments should have plenty of time to recover from this period.
But if you do want to rebalance because you feel your portfolio is generally too heavily weighted towards the kind of growth stocks particularly vulnerable to inflation, higher interest rates and recession, you might want to consider rotating some of your capital into the kind of stocks that might do well in a recession.
How to pick stocks that will do well in a recession?
There are two ways to highlight stocks that might do well in a recession. The first is the most obvious and simplest approach – look at which did well in previous recessions. We had a very brief recession at the start of the Covid-19 pandemic and a much more significant one in 2008/09 in the wake of the international financial crisis. Which companies did well over those periods?
The second approach is to add a layer of complexity into the equation and consider how and why the coming recession might differ from the two most recent historical examples. The 2020 recession was extremely unusual in its brevity. Within a couple of months, stock markets were soaring again as people under quarantine and social distancing restrictions spent more in the digital economy and generally on services and products to enhance their experience being couped up at home.
The 2008/09 recession was also different because it was caused by a systemic failure in the financial sector. Unemployment leapt which is not expected to happen this time around with an especially tight labour market one result of the combination of the pandemic and Brexit. Many households also have higher levels of savings built up during the pandemic which a significant number of analysts believe is softening the impact of inflation.
While there are likely to be constants throughout recessions, there are also differences that should be taken into account. Normally energy companies do badly during a recession as lower economic activity means less energy being used. But energy companies are currently posting record profits because of sky-high energy prices which are one of the major factors behind the expected recession. They should continue to do well while the recession lasts as energy prices dropping again is likely to be one of the catalysts behind the recovery.
The online trading company eToro recently published two baskets of “recession winning stocks” – one made up of Wall Street-listed companies and the other companies listed in the UK. The stocks in each basket were selected because they were the biggest gainers during the last two recessions. Interestingly, they also did well during the intervening period between 2009 and 2020, as well as in the aftermath of the coronavirus crash.
The portfolio of US stocks beat the S&P 500 index of large American businesses by 60 percentage points through the financial crisis between 2007 and 2009 and by 9 percentage points during the Covid crisis in 2020.
The portfolio of UK stocks beat FTSE-100 by 35 percentage points during the financial crisis and by 17 percentage points in the Covid crash. Since 2007, the US portfolio has gained 834%, more than twice the return of the Nasdaq and about five times that of the S&P 500. The UK portfolio’s 129% return is eight times more than the FTSE 100’s, excluding dividends.
“Well represented segments included discount and everyday-low-price retailers as consumers trade down, like Walmart (WMT), Ross Stores (ROST) and Dollar Tree (DLTR).”
“Fast food McDonalds (MCD) is related. Similarly, home DIY, like Home Depot (HD) Lowe’s (LOWE), and auto repair parts stocks Autozone (AZO) and O’Reilly (ORLY). Health care and big biotech is well-represented as inelastic non-discretionary purchases, like Abbott (ABT), Amgen (AMGN), Vertex (VRTX).”
“Also, domestic comforts from toys (Hasbro, HAS) to candy (Hershey, HSY), and getting more from your money and tax (H&R Block, HRB), and educating yourself (2U, TWOU).”
The UK portfolio included the drug makers AstraZeneca and GlaxoSmithKline, which did well because spending money on healthcare and medicines is essential and families don’t tend to cut back even when struggling financially.
The cigarette makers British American Tobacco and Imperial Brands also don’t usually see any downturn in demand because they benefit from a customer base addicted to their products. Both companies pay high and rising dividends. Consumer goods firms such as Unilever and Premier Foods also typically do well because they own strong brands that people bought even after price rises have been passed on.
Proactive Investor also picks out a range of London-listed stocks it expects to do well over the next year or so. In the energy sector that is doing so well at the moment it highlights Harbour Energy as a “core sector stock” and Diversified Energy Company as having “one of the lowest-risk free cash flow profiles in the sector”, while Energean (a client) provides “excellent visibility on multi-decade cash flows”.
Another difference to recent recessions could be how miners do during the one expected from autumn. Normally lower economic activity reduces for demand for commodities but the sector is also facing supply constraints that should see prices supported or rebound quickly.
Copper, mineral sands and diamonds look among the commodities most constrained in terms of supply, with limited supply growth under development. Mining and commodity stocks to look at are suggested as:
“Atalaya Mining (AIM:ATYM, TSX:AYM), Central Asia Metals, Kenmare Resources, Petra Diamonds and Antofagasta, with Tharisa PLC (LSE:THS, JSE:THA) tagged on as platinum group output to be in focus as automotive sales recover.”
“Gold stocks are seen as outperforming the market during the pullback phase, as in March 2020 and in the initial stages of a rebound, with top picks currently Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF), Pure Gold Mining Inc (TSX-V:PGM, LSE:PUR, OTC:LRTNF), Wheaton Precious Metals and Yamana Gold (TSX:YRI, LSE:AUY).”
Credit Suisse has also picked out stocks that have historically outperformed during recessions, highlighting:
“London Stock Exchange Group PLC (LSE:LSEG), RELX PLC (LSE:REL), Experian (LSE:EXPN) PLC, Microsoft Corporation (NASDAQ:MSFT) and Visa Inc (NYSE:V).”
While there is nothing wrong with doing some periodic portfolio rebalancing and potentially rotating more assets into stocks seen as likely to thrive in a recession, don’t panic. Recessions have always come and gone as part of the economic cycle and stock markets traditionally go on to greater heights during the subsequent recovery.
That means the chances are your portfolio will regain its losses and add new gains over the years ahead. Buying cheap growth stocks seen as likely candidates to flourish again during the recovery could be seen as just as sensible a tactic as rotating into recession-proof stocks. But if you do decide to reposition to some extent, look for stocks that have not only historically done well during recessions, or could be expected to during this one ahead, but are also healthy companies you would expect to keep doing well when markets recover. Then your success won’t come down to the fickle fate of whether or not you get your timing right.
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