On Wednesday the Federal Reserve hiked interest rates 0.25%, which has forced me to raise my second recession red flag on this historic economic recovery and expansion.
From the Federal Reserve: Indicators of economic activity and employment have continued to strengthen. Job gains have been strong in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.
The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.
The first Fed rate hike isn’t going to take us into a recession, it just raises the second of the six flags we would need to go into a recession. But looking forward, the Federal Reserve has now started to pull back from their accommodative stance because they believe the economy is too strong and the concern right now is to fight inflation with rate hikes.
From the Fed: The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.
I raised the first recession red flag when the unemployment rate got to 4% and the two-year yield got over 0.56%. Again, this red flag showed the progression of an economic expansion, and the recovery was so extreme that the unemployment rate fell very fast.
The low unemployment rate isn’t a recession factor, but all expansions end when the unemployment rate is at the lowest level. I am trying to show you the stages of an economic expansion into a recession, which is why I believe in the red-flag model.
The Russian Invasion of Ukraine is a brand new variable shock to the global economy that needs to be monitored daily. Unlike COVID-19, there is no fiscal disaster relief and no rate cuts coming. The Federal Reserve’s job is to cool down this hot economy, so the economy now has pressures on two fronts.
Recession red flag No. 3: The inverted yield curve
As I am writing this article, the 10-year yield is 2.17% and the two-year yield is 1.94% which means the inversion spread is now 0.23%. Historically speaking, when the 10-year yield and the two-year yield meet to say hello and shake hands (the inversion), the recession isn’t too far off. In the chart below, the grey shaded bars show when the economy is in a recession and the black in the middle is when the 10-year and 2-year yields shake hands.
How we get to higher yields
I am big fan of higher yields to create balance in the housing market. However, in 2021 I did not believe we had the capacity for the 10-year yield to break over 1.94%, which would get us to 4% plus mortgage rates. However, part of my 2022 forecast was that if global yields rise, especially in Japan and Germany, the 10-year can get up to 2.42% this year, which means 4% plus mortgage rates.
From the forecast: “We had a few times in the previous cycle where the 10-year yield was below 1.60% and above 3%. Regarding 4% plus mortgage rates, I can make a case for higher yields, but this would require the world economies functioning all together in a world with no pandemic. For this scenario, Japan and Germany yields need to rise, which would push our 10-year yield toward 2.42% and get mortgage rates over 4%. Current conditions don’t support this.”
The economy has been on fire for some time now, but only recently has the 10-year yield been able to breach over 1.94%. This is mainly due to global yields rising not so much of the U.S. We have the hottest economic and inflation data in decades and the 10-year yield is only at 2.17%. Now the tug of war begins: Can the U.S economic data can stay firm with all this inflation and higher rates, or will the weakening economy send yields lower again?
As someone who has been rooting for higher rates because the housing market is savagely unhealthy, I hope it can create some balance. If economic data gets weaker, I am concerned rates will go back down again. We lose our only variable that can create balance in the housing market.
I believe in economic models as they keep us in line. In this day and age of boom and bust 24/7 marketing for clicks, I understand that boring economic models might not be so sexy. However, economics isn’t supposed to be a hot summer flick. I always want to be the detective and not the troll. The main reason I continued writing after 2015 wasn’t because of the housing market work I have done — I wanted to be a source of information for the economic expansion and recession that wasn’t predicated on extreme ideological or stock trader takes. This is why I wrote the America Is Back Recovery Model on April 7, 2020.
So to wrap it all up, the second recession red flag is up, and I am keeping an eye out on the third one. Once that bridge is crossed, I will update the model accordingly. We will hold hands together as we continue this slow dance of information, and when something meaningful pops up, I will let you know about it. Buckle up for the rest of the year and root for more housing inventory; we need to get back to 1.52 – 1.93 million!
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.”
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.”genetic pandemic coronavirus covid-19 mortality
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…
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.
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.
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.
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.
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.economic recovery pandemic coronavirus covid-19 vaccine quarantine recovery canada
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.
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:
mitigation pandemic covid-19
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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