The unique nature of BA5: https://www.cbsnews.com/news/covid-ba5-variant-omicron-strains-difference/ . This article contains much new information on BA5, but there are almost as many questions as answers. Briefly,
- As with prior variants, the increasing levels of prior infection and vaccination make the virulence of BA5 more difficult to assess;
- Continuing a trend from the BA1 wave, the hallmark symptom of loss of taste and smell appears less frequently, making the disease’s symptoms more similar to the flu;
- BA5 has highly mutated from the original COVID virus, so that while previous infection from an Omicron variant offers 76% protection from BA5, infection from pre-Omicron strains offers only 15% protection;
- BA5 may pose a greater risk of hospitalization than previous variants. BA5 has a greater ability to infect the lower respiratory tract (lung tissue) than previous variants;
- Home tests (antigen tests) may be more likely to detect BA5 than previous variants. If so, the utility of Paxlovid may increase because of earlier identification of the disease.
Again, many of these conclusions are based on limited data or data from other countries. Because prior waves have affected countries differently, data is less comparable between countries. Specifically, the UK experience is less predictive of US experience than has previously been the case.
More on the infectious nature of BA5: https://www.cbsnews.com/pittsburgh/news/covid-concerns-omicron-ba-5-what-are-these-variants-and-are-we-safe/ . As each new variant becomes dominant, we assess it to be more infectious than the prior dominant variant. Early variants were considered as or more infectious than measles. BA5 may be the most infectious virus ever seen in humans. Combining that with its greater ability to infect lung tissue may explain the greater risk of hospitalization.
WSJ: Recovering from COVID: https://www.wsj.com/articles/how-muchrestdo-you-really-need-when-you-get-covid-19-11658926557 .
Biden tests negative for COVID, ends strict isolation: https://apnews.com/article/biden-covid-health-government-and-politics-7842dd2e606bb9f6aeb15d4a8c856c97 . WSJ: More: https://www.wsj.com/articles/biden-tests-negative-on-covid-19-antigen-tests-11658932538 . Paxlovid gets more good press.
Fauci on PBS: https://apnews.com/article/biden-covid-entertainment-health-infectious-diseases-f43af7f43f5592a031ce479d3e45afa9 . Fauci also gets more good press.
IMF suggests China rethink Zero COVID: https://money.usnews.com/investing/news/articles/2022-07-27/china-needs-covid-strategy-rethink-to-limit-economic-harm-imf-official-says . Everyone except Xi knows this is the right thing to do. So it will continue to not get done.
WSJ: Meanwhile, Wuhan locks down 1 million people: https://www.wsj.com/articles/chinas-wuhan-locks-down-district-with-one-million-people-11658927565 .
Is the Macau COVID surge passing?: https://www.usnews.com/news/world/articles/2022-07-27/no-new-daily-covid-cases-in-macau-for-first-time-in-over-a-month .
US has nearly the largest number of monkeypox cases in the world: https://abcnews.go.com/Health/us-now-leads-globe-reported-monkeypox-cases-data/story?id=87442616 . WSJ: More: https://www.wsj.com/articles/monkeypox-in-us-what-to-know-about-symptoms-11658858993 . CDC corrected earlier data indicating the US was now the world leader. However, cases continue to grow and likely reflect underreporting due to social stigma. With a significant vaccine stockpile, the administration is already receiving criticism for not moving more aggressively to vaccinate high-risk individuals. Reports are that people seeking the vaccine are having trouble finding it.
Monkeypox vaccine nears additional distribution: https://apnews.com/article/covid-science-health-infectious-diseases-a96bc16dab10013a2decd585a5449899 . WSJ: More: https://www.wsj.com/articles/fda-clears-danish-monkeypox-vaccine-plant-paving-way-for-use-of-doses-in-u-s-11658952436 .
WSJ: Senate passes chip deal: https://www.wsj.com/articles/senate-approves-280-billion-bill-to-boost-u-s-science-chip-production-11658942295 .
Manchin, Schumer have deal on Democratic priorities: https://apnews.com/article/joe-manchin-budget-agreement-7b0ee6e3e0b70357288fd69f44473b9b . WSJ: More: https://www.wsj.com/articles/whats-in-joe-manchin-and-chuck-schumers-reconciliation-deal-on-climate-health-and-tax-policy-11658973323 . Still more: https://www.wsj.com/articles/joe-manchin-reaches-deal-with-chuck-schumer-on-energy-healthcare-package-11658957299 . There has undoubtedly been considerable pressure on Manchin by his Democratic colleagues to “act like a Democrat” and get some parts of the Biden agenda done. I’m not a big fan of Chuck Schumer, but he deserves considerable credit for sticking with Manchin and making a deal that looked hopeless. Also, this should help House and Senate Democrats in tough races. But they must cross the finish line on this thing and get it to Biden’s desk.
And by the way, it is renamed the Inflation Reduction Act specifically because Manchin has stated inflation was his priority. He is now getting a deliverable to West Virginia voters. Manchin is also repairing a lot of bridges with this deal, including with Schumer and his Senate colleagues. More: https://www.msn.com/en-us/news/politics/high-level-democratic-talks-with-manchin-were-so-secretive-that-even-chuck-schumer-s-no-2-deputy-said-he-was-surprised-by-the-deal/ar-AA102Txb?cvid=b83cf02b75ba42c2b3acd3c578ae526a .
WSJ: The long-term growth of the federal deficit: https://www.wsj.com/articles/cbo-expects-significant-rise-in-public-debt-burden-deficit-11658944927 . As the Joe Manchin deal just dented this CBO analysis, we must keep in mind that volatility and long-term projections are not a great mix. However, we do have to fix climate change, and that is not free.
Fed raises interest rates by the expected 75 basis points: https://www.nbcnews.com/business/economy/federal-reserve-raises-key-interest-rate-to-fight-inflation-rcna40142 . As noted yesterday, some veteran Wall Streeters had wildly different views of the market’s future. The guy who said the Fed was going to cave, buy bonds? Nope. With all this wild talk, I don’t think much has changed from yesterday. Here’s why.
For September, the Fed has at most 5 possible rate increases: 0, 25, 50, 75 or 100 basis points. Today’s 75 basis point action ruled out 100. Even if the Fed is undershooting inflation, 100 would look like panic. Similarly, 0 is out unless the inflation data moves radically in 2 months. 0 would look like they overshot with the 150 basis points in June and July.
Of the 3 remaining possibilities, 75 is the least likely. I think inflation will begin to come down by September, and the Fed wants to look like their policy up to now is working. 25 will happen only if inflation has dropped substantially in two months. While gasoline is now on a downward trajectory, natural gas prices blew up today as Russia tries to squeeze Western Europe: https://www.wsj.com/articles/energy-prices-in-europe-surge-after-russia-slashes-gas-flows-11658922623 . We are still looking at 50 basis points under most scenarios.
Also, the Fed’s argument that a recession has not occurred because job creation is strong is baloney. Remember that the pandemic caused massive employment loss just now ending. Also, the tight job market has led to the Great Resignation, and millions are switching jobs for higher pay. Those inflationary pay increases will increase prices.
Lastly, rapid rent increases plus rapidly rising interest rates will sink a lot of struggling small businesses. Be prepared for significant loss of small businesses in the next 6 months. I believe that a recession is already here (we get second quarter numbers on Thursday), and that the third quarter will produce additional contraction.
More on the recession: https://www.marketwatch.com/story/it-will-be-mostly-a-white-collar-recession-milken-institute-economist-william-lee-on-how-the-next-downturn-will-be-different-11658935183 . In my view this analysis is correct, and we are already beginning to see these job losses in tech.
Russia struggles to repair inoperable military equipment: https://news.yahoo.com/russia-struggles-to-repair-thousands-of-destroyed-combat-vehicles-says-british-intelligence-180643464.html . This suggests that manpower shortages are now intersecting with materiel shortages. Also, the Ukrainians are effectively using US precision long-range artillery to knock out Russian ammo dumps and supply depots. Supply chain problems doomed the Russian attack in Kyiv, and may turn the tide in eastern and southern Ukraine.
WSJ: Ukrainians strike crucial bridge near Kherson: https://www.wsj.com/articles/ukraine-strikes-crucial-bridge-in-russian-occupied-south-11658920502 . Kherson is the only regional capital taken so far by Russia. Is the Ukrainian counterattack in the south beginning?
WSJ: Evergrande faces more questions from offshore investors: https://www.wsj.com/articles/evergrande-creditors-demand-further-explanation-for-billions-in-seized-cash-11658959897 .
DOJ January 6 grand jury is investigating Orange Julius’ actions: https://www.aol.com/news/u-justice-department-probing-trumps-001144226-113327870.html . Following DOJ policy, Attorney General Garland has confirmed that there will be no indictment of OJ prior to the November elections. As such, media interest has turned to the grand jury convened by DOJ.
January 6 insurrectionist gets 63 months in prison: https://www.nbcnews.com/politics/justice-department/trump-supporter-assaulted-cops-capitol-sentenced-five-years-prison-rcna40081 . Sentences are now creeping above 5 years for the most violent protestors. This suggests DOJ is indeed creeping up the chain from the “little guys” to the more severe cases.
The Bannon conviction remains incomplete: https://www.msn.com/en-us/news/us/u-s-judge-declines-to-acquit-ex-trump-adviser-bannon-but-mulls-dismissing-charges/ar-AA101WeX?cvid=f8974f642b79473fab4282dd4c25d5b4 . It would be really weird to dismiss the charges after the jury verdict. I hope the judge is just crossing the t’s and dotting the i’s here.
Religious fundamentalism and brain damage: https://www.alternet.org/2022/07/scientists-establish-link-between-religious-fundamentalism-and-brain-damage/ . Ahem. Well, this article does detail interesting research. Including the picture of the Supreme Court justices’ prayer meeting strikes me as inflammatory, although Amy Coney Barrett … I wonder what would happen if the same analysis was done on Fox “News” viewers.