It all became very clear to me sitting out there today, that every decision I’ve ever made, in my entire life, has been wrong. My life is the complete opposite of everything I want it to be. Every instinct I have, in every aspect of life, be it something to wear, something to eat… It’s all been wrong. Every one.
If every instinct you have is wrong, then the opposite would have to be right.
From the Seinfeld episode The Opposite
I was talking with a friend last week about the markets and the economy and she said she didn’t understand why the market went up after the GDP report. After all, it was the second quarter in a row of GDP contraction and that’s a recession. Shouldn’t I be selling stocks? I explained that markets are forward looking and that stocks bottom well before the end of a recession (about 4 months on average). So, I said, if you want to buy stocks near their recession lows you have to buy before the recession is over. She looked at me and said, Opposite George! As a devoted Seinfeld fan I immediately got the reference and thought, what a wonderful way to think about investing. We may not be as hapless as George Constanza when it comes to most of our life but investing? Our instincts about investing are horrendous, almost always wrong. Last year when stocks were booming and all the talk was about another Roarin’ Twenties, it was hard to resist the urge to buy. This year, when stocks are falling and we’re arguing about whether inflation or recession is the worse of the two evils we face, it is hard to resist the urge to sell.
The GDP report for the 2nd quarter was indeed negative (-0.9%) and there is now an argument about whether this constitutes a recession since Q1 was negative as well. It is mostly a political Rorschach test where Republicans are certain that it is and Democrats are just as certain that it isn’t. Mostly. For the record, I don’t know and don’t much care. The economy has certainly slowed since last year but what you call that is irrelevant. Q1 GDP fell by 1.6%, mostly due to trade which reduced it by 3.2%. That was reversed in Q2 as trade added 1.43%, pretty close to my back of the envelope calculation last week. What changed in Q2 was inventory, which subtracted 0.35% in Q1 but a full 2% in Q2. What does that tell you? Not much if you ask me. The trade figures were distorted in Q1 by, among other things, the China shutdown. The inventory figures for the first half of this year are just a correction of the large inventor build up in Q4 2021. It is just the economy trying to adjust to the end of COVID – maybe – and it isn’t easy since no one has any experience with recovering from a pandemic.
Inventories have risen recently and there has been a lot of commentary about how this will negatively impact the economy. If you follow these things you’ve probably seen a chart that looks something like this:
It certainly looks scary with inventories rising much faster than sales and there are plenty of macro gurus who are willing to tell you that production will have to be cut until inventories come back down. That means layoffs and all the other things we normally associate with recessions. Things are about to get a lot worse, right?
Here’s another chart that represents the same data. It’s a ratio called inventory/sales:
Not nearly as dramatic as that first one, huh? The ratio is about average for the data back to the early ’90s. I would also note that we entered recession in 2008 with the ratio falling and we avoided recession in 2016 despite a ratio much higher than the current one. Inventory and production decisions are not simple and they are especially difficult today. Do you really think companies are going to lay off a bunch of their workers to address a – likely – temporary inventory problem? In an economy where workers are so hard to find? What is an acceptable level of inventory in the post-COVID economy with supply chains still not back to normal? Maybe we are in recession but it isn’t because of inventories.
My outlook for the economy hasn’t changed. We came into COVID growing at an average of 2.1% over the prior decade. During COVID we didn’t do anything to improve the potential growth rate of the economy. And I don’t think we did anything that significantly reduces that potential either. What that means is that we are ultimately headed back to whence we came, a 2% growth trend. What we’re doing right now is removing the COVID distortions – from the lockdowns and the stimmie checks and the easy money policies of the Fed. What those distortions did was drive goods consumption well above trend and services consumption well below trend. As they move back to trend, the goods side of the economy will slow and the services side will rise. Forget the noise of trade and inventories everyone else is arguing about. When you look at the report, what you find is that goods consumption has subtracted from GDP and services have added to GDP over the last two quarters. And, just to be clear, services added more than goods subtracted (+1.78% vs -1.08%).
If you shift to the investment part of the GDP equation (again, ignoring inventory) we see something that is also acting just as one might expect with the Fed raising interest rates. Gross Private Domestic Investment subtracted 2.73% from Q2 GDP but we know that 2% of that was inventory. Of the -0.73% left over, -0.71% of that was residential investment – housing. Even in the non-residential side, the biggest detractor was “structures” which sounds a lot like real estate. I don’t know about you, but I’m not exactly shocked that real estate activity has slowed with higher interest rates.
The GDP report last week was a non-event. The economy is doing exactly what one would expect given these conditions. The inventory and trade figures of the last 2 quarters are nothing more than distractions for investors and the commentary nothing more than calls to your inner George Constanza to follow your instincts.
Another non-event was the Federal Reserve’s FOMC meeting that kicked the stock market rally into high gear. That was so because Jerome Powell’s press conference was widely perceived to be a message from the Fed that they are now “data dependent”. One might think that should always be so, but the Fed is in the same boat as investors, trying to interpret data from the past to predict the future. What they ought to be doing is watching the market rather than the economic data but that seems a lost cause; the Fed is always behind the curve. If the market perceives that the economy is headed for recession, short term interest rates will fall rapidly as the market prices in future Fed rate cuts, no matter what the data says about yesterday. What the market is saying today about growth is that it is slowing but not precipitously. Inflation expectations have also fallen but the Fed’s perceived dovishness on rates did cause breakevens to tick higher last week.
Will stocks keep going up? Well, obviously I don’t know the answer to that question but I can offer some data about previous periods of negative GDP growth. What should you do if we have just had 2 consecutive negative GDP quarters? History says you probably ought to think about doing some buying:
Just to be clear, I’m not saying you should back up the truck and load up on stocks. We don’t even know yet whether we really had two negative quarters in a row. GDP data has been subject to some pretty big revisions in the past and the first 2 quarters were such small contractions that either or both could be revised away. And that is especially true of Q2 since it was mostly inventories and an estimate was used for June because the data isn’t yet available. Furthermore, there’s no where near enough data here to make this meaningful from a statistical standpoint. It is interesting because of the things listed under notes as people seem to think today’s conditions are somehow unprecedented. Russia’s regular threats today about nuclear weapons pales in comparison to the Cuban Missile Crisis. But this could just as easily be similar to 2008 (from a market standpoint not an economic one) as 1975 or 2020/21.
My brief overview of markets is that large growth stocks are still overvalued even as they led the recent rally. Large value stocks are cheaper and small and mid cap stocks are cheaper still. International is very cheap but the dollar is still in an uptrend – we may be seeing a peak there but it is very premature to call that – and as long as that is the case, it’s an uphill battle. There is also the small matter of the stranglehold Russia has on Europe’s largest economy via the energy markets. I do think the recent rally probably has more to go based on my reading of sentiment. Large specs are still holding sizable short positions in the futures markets and my sense is that most people think this is a bear market rally. Put/call ratios aren’t as high as I’d like but they aren’t so low that we need fret too much either.
Don’t waste your time thinking about whether this is a recession or not, it really doesn’t matter. What does matter is that the economy is slowing just as expected and most companies are, so far, finding ways to cope with it. I know you are worried about the economy right now and you should be. We don’t know if things will get worse before they get better (and they will get better). But for goodness sakes don’t make decisions based on your “instincts” or “your guts” or because some chart charlatan scared you. Remember Opposite George!
The rising dollar/rising rate environment remains intact although both are moderating. The 10 year Treasury yield is no no higher than it was in April but it is still in an obvious uptrend when viewed from a longer perspective. The overshoot in rates this year is quite similar to the overshoot in early 2021. Once it corrected the overshoot the uptrend resumed. That could happen again but I’ll wait, as always, for evidence of that. Right now, we are still in correction mode for the 10 year rate. The 2 year rates has not corrected as much as the 10 year so the 10/2 yield curve is still inverted. As I said above, if the market perceived that the economy was very weak and headed for a bigger slowdown, the 2 year yield would be falling rapidly and that just isn’t the case. Will it do that soon? Maybe but I don’t make guesses about the future. If it does, that will affect our outlook for the economy. But just be aware that both rates can still fall quite a bit and still be in long term uptrends.
The dollar uptrend has also started to correct, down about 3% from the recent high. To be clear though, the uptrend here is more intact than for rates. The dollar index hasn’t even traded below its 50 day MA on this move. If we break that level (about 104.75) I would expect further weakness down to 103. And for further clarity, the index could trade down to about 100 and still be in an uptrend. That’s how far and how fast the move up was and breaking that uptrend is not going to be easy.
Most markets were higher last week with Asia (China) the lone exception. We are now facing a conundrum with our portfolios. Should we continue to maintain our cash cushion or get fully invested? As one of our clients has put it to us repeatedly, you’ve done well on the downside but how will you do when things turn higher? I am always reluctant to chase big short term moves but that sentiment is still negative after a big up move may be telling us something. I want to see how the markets trade after last week but I am leaning toward adding some risk here. That doesn’t necessarily mean stocks and it certainly doesn’t mean large growth stocks. But commodities are acting well technically and real rates dropped pretty good last week. The 10 year TIPS yield is down from 89 basis points to just 20 since July 8th. That’s why gold is finding a bid and if growth holds up it will likely mean higher commodity prices as well. That’s also why I’m still a little tentative about adding stocks by the way. The market may think the Fed is pivoting to a less aggressive policy but that will only be true if inflation really does come down, something that it hasn’t done yet. Real estate is also attractive if inflation persists but it is also rate sensitive. Midcap stocks are cheap though and I think we can probably add some high quality exposure there with less risk than large caps.
There wasn’t much difference in performance between growth and value last week but growth has led this rally off the bottom. That’s another reason to be a little skeptical of the overall stock market rally. The large growth stocks are not cheap by any measure and they are mostly rallying on the back of lower rates. If rates turn up that will come undone in rapid fashion. Be careful out there if you’re trading that part of the market.
Energy stocks led the way last week and it may be that crude is done on the downside. I had thought we’d see the mid to high 80s and that is still possible but it’s looking less likely. We don’t usually buy energy stocks anyway because we have direct commodity exposure which we are busy rebalancing after the correction (we’re buying to bring our exposure back up to our target). Defensives and health care stocks were down as the market chased beta but utilities had a great week with lower rates. Cyclicals also had a good week. I guess if the Fed is slowing down investors think the odds of recession faded. I don’t give the Fed that much credit or blame but as I’ve said many times, my opinion doesn’t really matter.
Credit spreads have narrowed by a little over 100 basis points since the July 5th peak. That is a significant positive move in spreads that indicates a lessening of recession fears. Indeed, it isn’t just junk bonds rallying but high grade corporates as well. The high grade corporate bond ETF (LQD) is up over 7% since its June low. Shorter term corporates are also higher. Muni bonds have also rallied, up about 3.5% since mid-June.
One indicator going in the wrong direction is the CFNAI, the 3 month average of which fell to -0.04 last week. With 0 as trend growth, we are now just slightly below trend. But the trend is also down so we’re not out of the woods. A reading of -0.75 means we are likely in recession.
The sentiment about the economy is still quite negative but there is still little evidence of actual recession in the real world – or almost any economic statistics that aren’t sentiment surveys. The Dallas Fed Manufacturing survey from last week is a good example. The comments are the most interesting part of the report in my opinion. Here’s a sample from the July version released last week:
The concerns of a looming recession have increased over the last month. With supply-chain issues continuing, the cost of raw materials remaining high and significant interest rate hikes, overall business activity has to slow. It is just a matter of when—which I believe is soon.
We are experiencing a temporary increase in business but have a pipeline that is beginning to decline due to inflation’s impact on interest rates and slowing construction starts.
We cannot find the qualified people to expand our output.
President Biden going overseas to beg for more oil supply instead of working with the domestic producers really adds uncertainty to the domestic producers and their budgets. This will affect our plans dramatically for expanding our business.
About 20 percent of our backlog was not taken by customers as ordered, but we were able find homes for that product and, therefore, continued to sell almost everything we produced. With incremental capacity coming online, we were able to grow finished-goods inventories a bit. We did see weakness in handsets and personal computers consistent with general commentary with the broader industry. Other markets are mixed; industrial markets continue to have pockets of strength, while others are beginning to show signs of weakness. We are expecting that weakness to begin to spread as we move into the second half of the year.
Broad-based inflation, together with difficulties in recruiting while our customers’ activity is strong, creates a puzzling and uncertain environment.
The economy is in shambles. There’s no way out that isn’t bad.
And my favorite comment of all:
November can’t get here fast enough.
What we see with these comments is an economy that is probably slowing – although not in all industries – but mostly expectations/concerns that things will get worse. That appears – certainly based on the last comment – to be more a political belief than one based on reality. Media bias has always existed but not to the degree we see today and not when information or disinformation could be spread so easily and quickly as it is today. What that means to me is that most survey data can be safely ignored or heavily discounted. Politics ends where the income statement starts for most businesspeople. Watch what they do, not what they say. And whatever else you do, don’t let your politics dictate your investment strategy.
Four of the highest ranking U.S. health officials—including Dr. Anthony Fauci—met in secret to discuss whether or not naturally immune people should be exempt from getting COVID-19 vaccines, The Epoch Times can reveal.
The officials brought in four outside experts to discuss whether the protection gained after recovering from COVID-19—known as natural immunity—should count as one or more vaccine doses.
“There was interest in several people in the administration in hearing basically the opinions of four immunologists in terms of what we thought about … natural infection as contributing to protection against moderate to severe disease, and to what extent that should influence dosing,” Dr. Paul Offit, one of the experts, told The Epoch Times.
Offit and another expert took the position that the naturally immune need fewer doses. The other two experts argued natural immunity shouldn’t count as anything.
The discussion did not lead to a change in U.S. vaccination policy, which has never acknowledged post-infection protection. Fauci and the other U.S. officials who heard from the experts have repeatedly downplayed that protection, claiming that it is inferior to vaccine-bestowed immunity. Most studies on the subject indicate the opposite.
The meeting, held in October 2021, was briefly discussed before on a podcast. The Epoch Times has independently confirmed the meeting took place, identified all of the participants, and uncovered other key details.
Dr. Jay Bhattacharya, a professor of medicine at Stanford University who did not participate in the meeting, criticized how such a consequential discussion took place behind closed doors with only a few people present.
“It was a really impactful decision that they made in private with a very small number of people involved. And they reached the wrong decision,” Bhattacharya told The Epoch Times.
From the government:
Fauci, the head of the U.S. National Institute of Allergy and Infectious Diseases and the chief medical adviser to President Joe Biden until the end of 2022
Dr. Vivek Murthy, the U.S. surgeon general
Dr. Rochelle Walensky, the head of U.S. Centers for Disease Control and Prevention (CDC)
Dr. Francis Collins, head of the U.S. National Institutes of Health, which includes the National Institute of Allergy and Infectious Diseases, until December 2021
Dr. Bechara Choucair, the White House vaccine coordinator until November 2021
From outside the government:
Offit, director of the Vaccine Education Center at Children’s Hospital of Philadelphia and an adviser to the U.S. Food and Drug Administration on vaccines
Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota and a former member of Biden’s COVID-19 advisory board
Akiko Iwasaki, professor of immunobiology and molecular, cellular, and developmental biology at Yale University
Dr. Peter Hotez, co-director of Texas Children’s Hospital Center for Vaccine Development and dean of the Baylor College of Medicine’s School of Tropical Medicine
Fauci and Murthy decided to hold the meeting, according to emails The Epoch Times obtained.
“Would you be available tonight from 9-9:30 for a call with a few other scientific colleagues on infection-induced immunity? Tony and I just discussed and were hoping to do this sooner rather than later if possible,” Murthy wrote in one missive to Fauci, Walensky, and Collins.
All three quickly said they could make it.
Walensky asked who would be there.
Murthy listed the participants. “I think you know all of them right?” he said.
Walensky said she knew all but one person. “Sounds like a good crew,” she added.
During the meeting, Offit put forth his position—that natural immunity should count as two doses.
At the time, the CDC recommended three shots—a two-dose primary series and a booster—for many Americans 18 and older, soon expanding that advice to all adults, even though trials of the boosters only analyzed immunogenicity and efficacy among those without evidence of prior infection.
Osterholm sided with Offit, but thought that having recovered from COVID-19 should only count as a single dose.
“I added my voice at the meeting to count an infection as equivalent to a dose of vaccine! I’ve always believed hybrid immunity likely provides the most protection,” Osterholm told The Epoch Times via email.
Hybrid immunity refers to getting a vaccine after recovering from COVID-19.
Some papers havefound vaccination after recovery boosts antibodies, which are believed to be a correlate of protection. Other research hasshown that the naturally immune have a higher risk of side effects than those who haven’t recovered from infection. Some experts believe the risk is worth the benefit but others do not.
Hotez and Iwasaki, meanwhile, made the case that natural immunity should not count as any dose—as has been the case in virtually the entire United States since the COVID-19 vaccines were first rolled out.
Iwasaki referred to a British preprint study, soon after published in Nature, that concluded, based on survey data, that the protection from the Pfizer and AstraZeneca vaccines was heightened among people with evidence of prior infection. She also noted a study she worked on that found the naturally immune had higher antibody titers than the vaccinated, but that the vaccinated “reached comparable levels of neutralization responses to the ancestral strain after the second vaccine dose.” The researchers also discovered T cells—thought to protect against severe illness—were boosted by vaccination.
There’s a “clear benefit” to boosting regardless of prior infection, Iwasaki, who has since received more than $2 million in grants from the National Institutes of Health (NIH), told participants after the meeting in an email obtained by The Epoch Times. Hotez received $789,000 in grants from the NIH in fiscal year 2020, and has received other grants totaling millions in previous years. Offit, who co-invented the rotavirus vaccine, received $3.5 million in NIH grants from 1985 through 2004.
Hotez declined interview requests through a spokesperson. Iwasaki did not respond to requests for comment.
No participants represented experts like Bhattacharya who say that the naturally immune generally don’t need any doses at all.
In public, Hotez repeatedly portrayed natural immunity as worse than vaccination, including citing the widely criticized CDC paper, which drew from just two months of testing in a single state.
In one post on Twitter on Oct. 29, 2021, he referred to another CDC study, which concluded that the naturally immune were five times as likely to test positive compared to vaccinated people with no prior infection, and stated: “Still more evidence, this time from @CDCMMWR showing that vaccine-induced immunity is way better than infection and recovery, what some call weirdly ‘natural immunity’. The antivaccine and far right groups go ballistic, but it’s the reality.”
That same day, the CDC issued a “science brief” that detailed the agency’s position on natural immunity versus the protection from vaccines. The brief, which has never been updated, says that available evidence shows both the vaccinated and naturally immune “have a low risk of subsequent infection for at least 6 months” but that “the body of evidence for infection-induced immunity is more limited than that for vaccine-induced immunity.”
Evidence shows that vaccination after infection, or hybrid immunity, “significantly enhances protection and further reduces risk of reinfection” and is the foundation of the CDC’s recommendations, the agency said.
Several months later, the CDC acknowledged that natural immunity was superior to vaccination against the Delta variant, which was displaced in late 2021 by Omicron. The CDC, which has made misleading representations before on the evidence supporting vaccination of the naturally immune, did not respond to a request for comment regarding whether the agency will ever update the brief.
Iwasaki had initially been open to curbing the number of doses for the naturally immune—”I think this supports the idea of just giving one dose to people who had covid19,” she said in response to one Twitter post in early 2021, which is restricted from view—but later came to argue that each person who is infected has a different immune response, and that the natural immunity, even if strong initially, wanes over time.
Osterholm has knocked people who claim natural immunity is weak or non-existent, but has also claimed that vaccine-bestowed immunity is better. Osterholm also changed the stance he took in the meeting just several months later, saying in February 2022 that “we’ve got to make three doses the actual standard” while also “trying to understand what kind of immunity we get from a previous infection.”
Offit has been the leading critic on the Vaccines and Related Biological Products Advisory Committee, which advises U.S. regulators on vaccines, over their authorizations of COVID-19 boosters. Offit has said boosters are unnecessary for the young and healthy because they don’t add much to the primary series. He also criticized regulators for authorizing updated shots without consulting the committee and absent clinical data. Two of the top U.S. Food and Drug Administration (FDA) officials resigned over the booster push. No FDA officials were listed on invitations to the secret meeting on natural immunity.
Fauci and Walensky Downplay Natural Immunity
Fauci and Walensky, two of the most visible U.S. health officials during the pandemic, have repeatedly downplayed natural immunity.
Fauci, who said in an email in March 2020 that he assumed there would be “substantial immunity post infection,” would say later that natural immunity was real but that the durability was uncertain. He noted the studies finding higher antibody levels from hybrid immunity.
In September 2021, months after claiming that vaccinated people “can feel safe that they are not going to get infected,” Fauci said that he did not have “a really firm answer” on whether the naturally immune should get vaccinated.
“It is conceivable that you got infected, you’re protected—but you may not be protected for an indefinite period of time,” Fauci said on CNN when pressed on the issue. “So I think that is something that we need to sit down and discuss seriously.”
After the meeting, Fauci would say that natural immunity and vaccine-bestowed immunity both wane, and that people should get vaccinated regardless of prior infection to boost their protection.
Walensky, before she became CDC director, signed a document called the John Snow Memorandum in response to the Great Barrington Declaration, which Bhattacharya coauthored. The declaration called for focused protection of the elderly and otherwise infirm, stating, “The most compassionate approach that balances the risks and benefits of reaching herd immunity, is to allow those who are at minimal risk of death to live their lives normally to build up immunity to the virus through natural infection, while better protecting those who are at highest risk.”
The memorandum, in contrast, said there was “no evidence for lasting protective immunity to SARS-CoV-2 following natural infection” and supported the harsh lockdown measures that had been imposed in the United States and elsewhere.
In March 2021, after becoming director, Walensky released recommendations that the naturally immune get vaccinated, noting that there was “substantial durability” of protection six months after infection but that “rare cases of reinfection” had been reported.
Walensky hyped the CDC study on natural immunity in August 2021, and the second study in October 2021. But when the third paper came out concluding natural immunity was superior, she did not issue a statement. Walensky later told a blog that the study found natural immunity provided strong protection, “perhaps even more so than those who had been vaccinated and not yet boosted.”
But, because it came before Omicron, she said, “it’s not entirely clear how that protection works in the context of Omicron and boosting.”
Walensky, Murthy, and Collins did not respond to requests for interviews. Fauci, who stepped down from his positions in late 2022, could not be reached.
Murthy and Collins also portrayed natural immunity as inferior. “From the studies about natural immunity, we are seeing more and more data that tells us that while you get some protection from natural infection, it’s not nearly as strong as what you get from the vaccine,” Murthy said on CNN about two months before the meeting. Collins, in a series of blog posts, highlighted the studies showing higher antibody levels after vaccination and urged people to get vaccinated. He also voiced support for vaccine mandates.
UNIVERSITY PARK, Pa. — Waaahhh! While babies have a natural mechanism for alerting their parents that they need a diaper change, a new sensor developed by researchers at Penn State could help workers in daycares, hospitals and other settings provide more immediate care to their charges.
Credit: Huanyu “Larry” Cheng/Penn State
UNIVERSITY PARK, Pa. — Waaahhh! While babies have a natural mechanism for alerting their parents that they need a diaper change, a new sensor developed by researchers at Penn State could help workers in daycares, hospitals and other settings provide more immediate care to their charges.
The new sensor — so cheap and simple to produce that it can be hand-drawn with a pencil onto paper treated with sodium chloride — could clear the way for wearable, self-powered health monitors for use not only in “smart diapers” but also to predict major health concerns like cardiac arrest and pneumonia.
“Our team has been focused on developing devices that can capture vital information for human health,” said Huanyu “Larry” Cheng, the James L. Henderson, Jr. Memorial Associate Professor of Engineering Science and Mechanics at Penn State. “The goal is early prediction for disease conditions and health situations, to spot problems before it is too late.”
Cheng is the lead author on a new study, published in the journal Nano Letters, which describes the design and fabrication process for a reliable, hand-drawn electrode sensor. The sensor is created using a pencil, drawn on paper treated with a sodium chloride solution. The hydration sensor is highly sensitive to changes in humidity and provides accurate readings over a wide range of relative humidity levels, from 5.6% to 90%.
Research into wearable sensors has been gaining momentum because of their wide-ranging applications in medical health, disaster warning and military defense, Cheng explained. Flexible humidity sensors have become increasingly necessary in health care, for uses such as respiratory monitoring and skin humidity detection, but it is still challenging to achieve high sensitivity and easy disposal with simple, low-cost fabrication processes, he added.
“We wanted to develop something low-cost that people would understand how to make and use — and you can’t get more accessible than pencil and paper,” said Li Yang, professor in the School of Artificial Intelligence at China’s Hebei University of Technology. “You don’t need to have some piece of multi-million-dollar equipment for fabrication. You just need to be able to draw within the lines of a pre-drawn electrode on a treated piece of paper. It can be done simply and quickly.”
The device takes advantage of the way paper naturally reacts to changes in humidity and uses the graphite in the pencil to interact with water molecules and the sodium chloride solution. As water molecules are absorbed by the paper, the solution becomes ionized and electrons begin to flow to the graphite in the pencil, setting off the sensor, which detects those changes in humidity in the environment and sends a signal to a smartphone, which displays and records the data.
Essentially, drawing on the pre-treated paper within pre-treated lines creates a miniaturized paper circuit board. The paper can be connected to a computer with copper wires and conductive silver paste to act as an environmental humidity detector. For wireless application, such as “smart diapers” and mask-based respiration monitoring, the drawing is connected to a tiny lithium battery which powers data transmission to a smartphone via Bluetooth.
For the respiration monitor, the team drew the electrode directly on a solution-treated face mask. The sensor easily differentiated mouth breathing from nose breathing and was able to classify three breathing states: deep, regular and rapid. Cheng explained that the data collected could be used to detect the onset of various disease conditions, such as respiratory arrest and shortness of breath and provide opportunities in the smart internet of things and telemedicine.
He added that respiratory rate is a fundamental vital sign and research has shown it to be an early indicator of a variety of pathological conditions such as cardiac events, pneumonia and clinical deterioration. It can also indicate emotional stressors like cognitive load, heat, cold, physical effort and exercise-induced fatigue.
Compared with breath, the human skin exhibits a smaller change in humidity, but the researchers were still able to detect changes using their pencil-on-paper humidity sensor, even after test subjects applied lotion or exercised. Skin is the body’s largest organ, Cheng explained, so if it is not processing moisture correctly, that could indicate that some other health issue is going on.
“Different types of disease conditions result in different rates of water loss on our skin,” he said. “The skin will function differently based on those underlying conditions, which we will be able to flag and possibly characterize using the sensor.”
The team also integrated four humidity sensors between the absorbent layers of a diaper to create a “smart diaper,” capable of detecting wetness and alerting for a change.
“That application was actually born out of personal experience,” said Cheng, who is the father of two young children. “There’s no easy way to know how wet is wet, and that information could be really valuable for parents. The sensor can provide data in the short-term, to alert for diaper changes, but also in the long-term, to show patterns that can inform parents about the overall health of their child.”
The applications of the humidity sensor go beyond “smart diapers” and monitoring for respiration and perspiration, Cheng explained. The team also deployed the sensor as a noncontact switch, which could sense the humidity changes in the air from the presence of a finger without the finger touching the sensor. The team used the noncontact switch to operate a small-scale elevator, play a keyboard and light up an LED array.
“The atoms on the finger don’t need to touch the button, they only need to be near the surface to diffuse the water molecules and trigger the signal,” Cheng said. “When we think about what we learned from the pandemic about the need to limit the body’s contact with shared surfaces, a sensor like this could be an important tool to stop potential contamination.”
Other authors on the study are Penn State doctoral candidate Ankan Dutta as well as Guangyu Niu, Zihan Wang, Ye Xue, Jiayi Yan, Xue Chen, Ya Wang, Chaosai Liu, Shuaijie Du Langang Guo of the Hebei University of Technology. Peng Zhou of Tianjin Tianzhong Yimai Technology Development Co. Ltd. also contributed to the research.
Cheng’s work was funded by the National Institutes of Health, the National Science Foundation and Penn State.
Method of Research
Subject of Research
Pencil-on-Paper Humidity Sensor Treated with NaCl Solution for Health Monitoring and Skin Characterization
Adani Contagion Spreads As Citi Halts Margin Loans On Debt
Indian billionaire Gautam Adani's corporate empire is crumbling. A deeper selloff forced Adani Enterprises Ltd. to pull a stock sale in the final minute. Two banks have rejected bonds tied to Adani companies as collateral for client trades. And the turmoil has pushed MSCI India Index to the brink of a technical correction.
Adani Enterprises plunged 27% on Thursday in Mumbai trading after it was revealed late Wednesday that it abandoned a $2.4 billion follow-on share sale. Today's losses added to a 28% tumble in the previous session.
The decision to pull the share offering comes as more than $100 billion in market cap has been wiped out in Adani group's stocks following a scathing report from Hindenburg Research last Tuesday. Dollar bonds tied to the companies are also plunging into the distressed territory, raising the risk of default.
Yesterday, Bloomberg reported that Credit Suisse designated a zero lending value for bonds sold by Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Electricity Mumbai. Now Citi's wealth management arm has done the same.
The meltdown in Adani shares has significant implications for Indian stocks:
"This is potentially a bigger problem for Indian equities, which have done so well during the pandemic as China pursued its Covid Zero policy."
"The long-term ramifications could be quite negative," said Peter Garnry, head of equity strategy at Saxo Bank A/S in Hellerup, Denmark.
The implosion of the Adani companies, which accounted for almost one out of every $10 invested in Indian stocks at the group's peak in September, has provided a catalyst for investors complaining about the nation's expensive valuations to trim their holdings. The fallout is likely to make it harder for other Indian corporations to raise funds, put them under increased regulatory scrutiny, while also testing the faith voters have in Prime Minister Narendra Modi.
The turmoil has helped push MSCI India Index to the brink of a technical correction.
Meanwhile, global funds have yanked a net $2 billion out of Indian equities in the three days through Tuesday. Funds are selling now, and asking questions later.
"The Adani-related headlines are generating a high level of negative attention, which could dampen investor appetite for Indian stocks," said Jian Shi Cortesi, who manages China and Asia equity funds at GAM Investment Management in Zurich.
One major risk we see is the deterioration in access to financing for Adani companies, some of which are highly leveraged.
Even after the latest slide in Adani group shares, Bloomberg Intelligence's Nitin Chanduka believes there is more downside ahead.