Macro Afternoon

Asian stock markets have rebounded after the US inflation led bounce on Wall Street overnight with the reversal in USD strength against the major risk currencies still holding, with gold hovering just below the $1800USD per ounce level. Meanwhile Bitcoin continues its little uptick above the $57K level, as it remains poised to match its previous record high at the $60K level but local resistance may yet prove too tough in the short term:

The Shanghai Composite is eking out a scratch session, up slightly to 3567 points while the Hang Seng Index was closed due to a holiday. Meanwhile Japanese markets rebounded after a minor recent pullback, with the Nikkei 225 closing 1.5% higher to 28517 points as the USDJPY pair stabilised just above the mid 113 level after short term momentum had pushed through extreme overbought levels at the start of the week:

Australian stocks were able to lift, with the ASX200 able to push back above the 7300 point level, closing 0.5% higher at 7311 points while the Australian dollar deflected the poor numberwang print, almost pushing through the 74 handle:

Eurostoxx and S&P futures are lifting slightly, with the four hourly chart of the S&P500 showing price wanting to build on its move above ATR support at the 4330 point level but this will be all dependent on earnings season reactions:

The economic calendar includes a big bunch of ECB/Fed member speeches, but also weekly initial jobless claims from the US.

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Comments

    • Table 2 infection rates – shows a higher infection rate for vaxed. This may reflect greater social interactions of the vaxed.
      Tables 3 & 4 emergency presentations and deaths – the most important metrics – shows far lower rates for vaxed.

      Presumably you’re question is focussed on Table 2. If so, why?
      You’ve said you’re experienced in complex systems and complex data. This is not in that league. Why are you appearing to struggle with it?

      • Why? My expertise is in digital signal processing not epidemiology. I wouldn’t want to draw wrong conclusions due to lack of knowledge of the subject area. I would’ve thought a really, really clever chap like you could figger that out, rather than struggling with such an obvious question.

    • Lots of potential reasons, but it comes down to the fact that we are missing LOTS of cases (a case = an infection which has been diagnosed). Not hospitalisations or deaths, but cases. Cases are like an iceberg – a lot is invisible underwater (infections not diagnosed)
      Vaccine substantially reduces serious illness – hospitalisation (table 3) and deaths (table 4).
      Vaccines don’t significantly reduce transmission – not of delta anyway, which is now the dominant strain. So cases/100,000 will not fall nearly as much as hospitalisations or deaths with vaccine

      OK, so why are cases/100,000 higher in the vaccinated? If the vaccine had zero effect, they should be the same. Not higher. Right?
      Turns out that the testing done is very selective (= not random) in nature, which creates a link between vaccination and testing
      1. At the individual level, people who chose to get vax are more likely to get tested with minor symptoms. Those not vaccinated will be less likely to bother and will shrug it off.
      2. People in UK are offered free lateral flow tests 2 x per week. Again, those concerned about Covid have got vaccinated and will do the tests.
      3. Some occupations require vaccination and also require regular screening. Another link.

      If we did random testing, the picture would be a lot clearer.

      There may also be a factor where those vaccinated socialise and get infected, while those fearful of the vaccinate stick at home.

      But I suspect it is down to sampling error.

      https://www.ft.com/content/0f11b219-0f1b-420e-8188-6651d1e749ff
      Have a look at the graph in middle – shows the extent to which vax causes cases and serious infections to decouple.

      • I think you’re overcomplicating it. But while you’re there add the fact that the unvaxed are generally much poorer, more likely to work casual, more vulnerable to exploitation and have lower education levels.

          • The vaccines are provisionally approved to reduce risk of severe disease and death.
            But they’re being mandated in the name of reducing spread among very low risk populations – they’re not approved for this purpose – if a prescription were required (consider that no doctor has prescribed you a COVID vaccine), it would be considered ‘off label’ use.
            There’s increasing scientific evidence that the COVID vaccines actually don’t reduce spread, and have in fact been associated with marginally increased rates of PCR positive cases.
            That’s the significance of these studies.

          • Correct.

            It s a strange world. The vaccines look worse than nothing for the (relatively less important) of being infected with Covid. And so you have to go looking for the biases to say that the vaccine isn’t really worse than nothing.

          • Sure, sampling bias or observer error is one hypothesis, sure. You could try controlling for that with mobility data from people’s devices where available.
            Another hypothesis, suggested by spikes in case numbers of some populations around the world in close temporal association with vaccination drives, is that of a mechanism by which the antibodies induced by the vaccines against the Wuhan spike protein are neutral, or even enhance the spread of the new variants. An assumption that the vaccines have zero effect is moot unless there is a hypothesis that they are immunologically inert. I suggest they might not have the right antigenic target anymore.

  1. The tax reform series that Fairfax are running is better than I thought it would be. It would be nice if Costello wasn’t the chairman of the company because that obviously tempers what can be written about really bad decisions made in order to buy votes.

  2. reusachtigeMEMBER

    So the relations parties have started up and are going hammer and nails! You need to prove that you are double vaccinated to protect everyone. Thankfully condoms are still optional though.

    • As a country we are very short sighted. We should be the good Stewards of the region and really show the benefit of being aligned interests wise. So yeah I agree with Penny.

    • Probably driven by CSL, they don’t want to be a licensee manufacturer. Agree that Australia has a responsibility but they should be driving it by either taking over manufacturing themselves or trying to stand up a drug manufacturer that would be ~20 P/E rather than 50 P/E.

  3. Hugh PavletichMEMBER

    New Zealand: Dumb good luck approach to Covid – 19 management continues in the ‘Hermit Kingdom’ (term by former PM Sir John Key) …

    Once Covid-Free, New Zealand Prepares for 5,000 Cases a Week … Ainsley Thomson… Bloomberg

    https://www.bloomberg.com/news/articles/2021-10-14/new-zealand-prepares-health-system-for-surge-in-covid-19-cases

    Once the envy of the world for its handling of the pandemic, New Zealand is now preparing its health system for an influx of Covid-19 patients as it pivots away from its elimination strategy.

    Health Ministry modeling forecasts more than 5,000 cases per week in the Auckland and Northland regions next year, even assuming 90% of the eligible population is vaccinated, Health Minister Andrew Little said on Thursday. The figure does not include the rest of the country, where modeling is still being conducted.

    “That’s the worst-case scenario, but even at that level the vast bulk of people who would get infected would recover at home, or somewhere else in the community, because the majority will be vaccinated and won’t suffer as badly as those who are unvaccinated,” Little said in an interview with Radio New Zealand. …

    … concluding …

    … New Zealand’s slow vaccine rollout has seen it slide down Bloomberg’s Covid Resilience Ranking. For a long time it held the top spot; now it is 38th, one place ahead of Bangladesh.

    Still, just 28 people have died of Covid so far.

    The Best and Worst Places to Be as We Learn to Live With Delta … Bloomberg

    https://www.bloomberg.com/graphics/covid-resilience-ranking/

    New Zealand modelling shows Covid cases could peak at 5,300 a week in Auckland next year … Eva Corlett … The Guardian

    https://www.theguardian.com/world/2021/oct/14/new-zealand-modelling-shows-covid-cases-could-peak-at-5300-a-week-in-auckland-next-year

    Watch: Health Minister Andrew Little on hospital preparedness for Covid-19 … Radio New Zealand

    https://www.rnz.co.nz/news/covid-19/453503/watch-health-minister-andrew-little-on-hospital-preparedness-for-covid-19

  4. If anyone thinks Europe will condemn China, think again (we are on our own, with just a few friends) – “‘The United States wants to confront China. The European Union wants to engage China,’ Mr. Le Maire, a close ally of President Emmanuel Macron of France, said… https://www.zerohedge.com/economics/french-finance-minister-issues-declaration-independence-us

    Relying on the French was always a bad idea… their form of multiculturalism disastrous experiment. Islam incompatible.

    • Sigh … to the historically challenged … because Europe and the East are natural trading partners, not to mention multiculturalism has been around since the advent of the city/nation state.

        • So is endless wars and phosphorous rained down on whole cities to get a few bad sorts or drones on nuptials getting red misted … then again who set those extremists and fundamentalists in the first silly place … eh …

          • Facts and if your not aware …. https://www.nakedcapitalism.com/2021/10/michael-hudson-super-imperialism-3rd-edition.html

            This highly respected study of U.S. financial diplomacy explores the faults built into the core of the World Bank and the IMF at their inception. Forensic detail reveals how the world’s core economic functions were sculpted to preserve US financial hegemony. Difficult to detect at the time, these problems have since become explicit as the failure of the international economic order has become apparent; the IMF and World Bank were set up to give aid to developing countries, but instead many of the world’s poorest countries have been plunged into insurmountable debt crises.

            The book became famous for detailing how the removal of the gold standard left the world’s central banks with only one alternative vehicle: to hold their international reserves in U.S. Treasury securities.

            The result was a self-financing circular flow of U.S. military spending and the investment takeover of foreign economies. The larger America’s balance-of-payments deficit grew, the more dollars ended up in the hands of central banks and sovereign wealth funds. Machiavelli could not have planned it better. By participating in this circular flow, nations in effect financed their own economic and military encirclement.

            Hudson’s critique of the destructive course of the international economic system provides important insights into the real motivations at the heart of these institutions – and the increasing tide of opposition that they face around the world.

            Ann Pettifor:

            In this book Michael Hudson illuminates one of the most powerful forces in global economics – one which is hidden, and widely misunderstood. It is the use by the United States of a “money-pump” – an economic contraption which liberally pumps out money to finance extravagant US consumption and spending. This “money-pump” works at almost no cost to Americans, and at considerable cost to those who pour dollars into the “pump” – the rest of us. That is why this book is vital reading.

            This magisterial account of US imperialism is extraordinary in its range and immediacy. It was clearly written at a time when the events were still fresh in the memory of the author, and so has an authenticity missing in later accounts of the US’s decisive changes to the global economy.” – snip

            So if you want to base good and bad on body counts have a care ….

  5. Hugh PavletichMEMBER

    China …

    China state-owned shipbuilder goes bankrupt as failing to pay $141.5 million debt trap … CN News … Youtube

    https://www.youtube.com/watch?v=cOH11FAE7ao

    Korean companies leave China, thousands of unemployed cry, China’s economy crumbles … Today News Post … Youtube

    https://www.youtube.com/watch?v=mD429OJDNh8

    China’s Companies In Huge Losses in Foreign Countries | China Economic Fallout … The Specifications … Youtube

    https://www.youtube.com/watch?v=YDMlAFOOc4U

    ‘We can only hope’ China’s internal problems halt plans to retake Taiwan … SkyNews Australia

    https://www.youtube.com/watch?v=wceTE-8TUrc

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