...Dukes says she’s seen draft plans for vaccine trials involving 6,000 to 10,000 volunteers, in which researchers estimated that as many as 3.7% of volunteers would be exposed to the virus. That means they’re expecting about 100 to 150 infections in the placebo arm and fewer, or ideally none, among those who get vaccinated. That would be statistical proof the shot works.
...“Experts keep saying we’ll have a vaccine in the fall, but we won’t even have any data by then,” says Caplan, who adds that it would be “ethically impossible” to distribute a vaccine before there’s proof it works safely.
...“If a vaccine has a good safety profile and might possibly work, you could see people on the front line getting it,” he says.
...Plotkin says the usual downfall of a vaccine is that researchers pick the wrong part of the virus to include in it or fail to inject enough of the substance. Other times it’s the biology of the virus that’s the problem—as in the case of HIV, a shape-shifter that attacks the immune system.
Photographer: Ernesto
Ryan/Getty Images South America
Mac Margolis is a
Bloomberg Opinion columnist covering Latin and South America. He was a reporter
for Newsweek and is the author of “The Last New World: The Conquest of the
Amazon Frontier.”
As the novel coronavirus cyclones through Latin
America, it has staggered almost every nation. So how to explain Uruguay? Its
infection rate of 2.1 cases per million inhabitants is the second
lowest in South America and already falling, with just 22 fatalities by May 27.
Ahead of many of its neighbors, Uruguay is already glimpsing a safe return to
economic normalcy.
It might not have turned out this way. The
nation of 3.5 million people is rife with risks. It is the Latin American nation
with the largest share of elderly, and all but 4% of the
national population lives in cities. Those are the kind of demographics made
for contagion. Uruguay is wedged between ailing giants: Brazil is the pandemic’s new epicenter, while Argentina was already
nearing economic collapse when it defaulted on its debt last week.
And yet — stricken neighbors take note — Uruguay
has not only contained the outbreak, it has done so without a lockdown, harsh
quarantines or heavy-handed policing. Most schools and restaurants closed their
doors, but shops and businesses were allowed to stay open. Unlike its outsize
neighbors who mostly flew blind into the pandemic, Uruguay built its crisis
response on proactive testing and
tracing — it has the second highest testing rate in South America — and
cajoling its citizenry to do the right thing, as in this national mask-wearing
campaign.
Its liberal social engineering strategy is
similar to Sweden’s, yet Uruguay has managed to avoid the Scandinavian
country’s soaring death toll. Its policies have drawn praise from the World Bank and earned Uruguay
favorable comparisons to New Zealand, minus the benefit of being surrounded by
ocean.
A near-universal
health care system, years in the making, has helped. So has the country’s relatively
low population density (Montevideo is about half as densely occupied as
Buenos Aires) as well as Uruguay’s overall well-being. The Boston Consulting
Group in 2018 ranked Uruguay as Latin America’s most prosperous nation.
It boasts one of the region’s highest scores on the human
development index. Extreme poverty has all but disappeared.
But perhaps Uruguay’s biggest assets are its
intangibles. Uruguayans, while hardly complacent, tend to follow rules and
heed authorities. Mind you, social distancing doesn’t come naturally to the
gregarious Charrua, as its natives call themselves. “People crowd the Rambla [a
shoreline drive] on Sunday, share the cup of mate tea and congregate for
barbecue on Sunday,” said Benjamin Gedan, deputy director of the Wilson
Center’s Latin America program.
Uruguayan voters also share a political culture
that allows adversaries to disagree without descending into toxic dissent. A
center-right political alliance narrowly won the election last year, after a
decade and a half of rule by a left-wing coalition, but the switch was not the
product of the same popular revilement that sent millions to the streets across
Latin America. “In a region roiled by political chaos and uncertainty, we have
seen social stability and a considerable degree of political consensus,” said
Ignacio Munyo, an economist who teaches at the University of Montevideo.
Tellingly, the most remarkable protest in
Uruguay was last year’s mass march for the rule of law and against a
controversial amendment to crack down on a crime surge by creating a national guard with praetorian powers.
The bill was defeated. A message hoisted by a lone leftist partisan in the
crowd gathered to hail conservative president-elect Luis Lacalle Pou’s victory
last November became a unifying national meme: “Congratulations. If you
fare well, so will I,” read his placard.
So far, Lacalle Pou has mostly returned the
favor. “While this is definitely a government of the right, it’s also a broad
coalition,” said Nicolas Saldias, a Latin America scholar at the Wilson Center.
“You don’t see wild policy swings. Lacalle Pou has mostly maintained the social
and labor policies from before. There’s broad agreement among political actors
despite their differences.”
Shared commitments could presage a quicker
recovery. Although the International Monetary Fund reckoned the Uruguayan
economy will shrink by 3% this year, the regional contraction
will be far more severe: 5.2%. What’s more, the fund touts Uruguay to log the
region’s sharpest rebound (5%) in 2021.
That forecast affords Uruguay a rare chance for
a reset. The economy was already in a five-year rut heading into the health
crisis. The World Economic Forum ranked Uruguay poorly in
hiring and firing policies and worker-employer cooperation, and 108th among 141
countries for overall labor flexibility. The country also must deepen pension
reform to provide for the quickly graying population. “This is the right moment
to restructure,” Munyo said. “That’s critical for putting Uruguay in the center
of multinational sights for investment.”
In this way, Uruguay’s penchant for national
accord can be good medicine. Shared sensibilities could not only help inoculate
its struggling economy with vital structural reforms but also spread a salutary
message to the rest of a region riven by politics.
This column does
not necessarily reflect the opinion of the editorial board or Bloomberg LP and
its owners.
Photographer: Ernesto
Ryan/Getty Images South America
Mac Margolis is a
Bloomberg Opinion columnist covering Latin and South America. He was a reporter
for Newsweek and is the author of “The Last New World: The Conquest of the
Amazon Frontier.”
As the novel coronavirus cyclones through Latin
America, it has staggered almost every nation. So how to explain Uruguay? Its
infection rate of 2.1 cases per million inhabitants is the second
lowest in South America and already falling, with just 22 fatalities by May 27.
Ahead of many of its neighbors, Uruguay is already glimpsing a safe return to
economic normalcy.
It might not have turned out this way. The
nation of 3.5 million people is rife with risks. It is the Latin American nation
with the largest share of elderly, and all but 4% of the
national population lives in cities. Those are the kind of demographics made
for contagion. Uruguay is wedged between ailing giants: Brazil is the pandemic’s new epicenter, while Argentina was already
nearing economic collapse when it defaulted on its debt last week.
And yet — stricken neighbors take note — Uruguay
has not only contained the outbreak, it has done so without a lockdown, harsh
quarantines or heavy-handed policing. Most schools and restaurants closed their
doors, but shops and businesses were allowed to stay open. Unlike its outsize
neighbors who mostly flew blind into the pandemic, Uruguay built its crisis
response on proactive testing and
tracing — it has the second highest testing rate in South America — and
cajoling its citizenry to do the right thing, as in this national mask-wearing
campaign.
Its liberal social engineering strategy is
similar to Sweden’s, yet Uruguay has managed to avoid the Scandinavian
country’s soaring death toll. Its policies have drawn praise from the World Bank and earned Uruguay
favorable comparisons to New Zealand, minus the benefit of being surrounded by
ocean.
A near-universal
health care system, years in the making, has helped. So has the country’s relatively
low population density (Montevideo is about half as densely occupied as
Buenos Aires) as well as Uruguay’s overall well-being. The Boston Consulting
Group in 2018 ranked Uruguay as Latin America’s most prosperous nation.
It boasts one of the region’s highest scores on the human
development index. Extreme poverty has all but disappeared.
But perhaps Uruguay’s biggest assets are its
intangibles. Uruguayans, while hardly complacent, tend to follow rules and
heed authorities. Mind you, social distancing doesn’t come naturally to the
gregarious Charrua, as its natives call themselves. “People crowd the Rambla [a
shoreline drive] on Sunday, share the cup of mate tea and congregate for
barbecue on Sunday,” said Benjamin Gedan, deputy director of the Wilson
Center’s Latin America program.
Uruguayan voters also share a political culture
that allows adversaries to disagree without descending into toxic dissent. A
center-right political alliance narrowly won the election last year, after a
decade and a half of rule by a left-wing coalition, but the switch was not the
product of the same popular revilement that sent millions to the streets across
Latin America. “In a region roiled by political chaos and uncertainty, we have
seen social stability and a considerable degree of political consensus,” said
Ignacio Munyo, an economist who teaches at the University of Montevideo.
Tellingly, the most remarkable protest in
Uruguay was last year’s mass march for the rule of law and against a
controversial amendment to crack down on a crime surge by creating a national guard with praetorian powers.
The bill was defeated. A message hoisted by a lone leftist partisan in the
crowd gathered to hail conservative president-elect Luis Lacalle Pou’s victory
last November became a unifying national meme: “Congratulations. If you
fare well, so will I,” read his placard.
So far, Lacalle Pou has mostly returned the
favor. “While this is definitely a government of the right, it’s also a broad
coalition,” said Nicolas Saldias, a Latin America scholar at the Wilson Center.
“You don’t see wild policy swings. Lacalle Pou has mostly maintained the social
and labor policies from before. There’s broad agreement among political actors
despite their differences.”
Shared commitments could presage a quicker
recovery. Although the International Monetary Fund reckoned the Uruguayan
economy will shrink by 3% this year, the regional contraction
will be far more severe: 5.2%. What’s more, the fund touts Uruguay to log the
region’s sharpest rebound (5%) in 2021.
That forecast affords Uruguay a rare chance for
a reset. The economy was already in a five-year rut heading into the health
crisis. The World Economic Forum ranked Uruguay poorly in
hiring and firing policies and worker-employer cooperation, and 108th among 141
countries for overall labor flexibility. The country also must deepen pension
reform to provide for the quickly graying population. “This is the right moment
to restructure,” Munyo said. “That’s critical for putting Uruguay in the center
of multinational sights for investment.”
In this way, Uruguay’s penchant for national
accord can be good medicine. Shared sensibilities could not only help inoculate
its struggling economy with vital structural reforms but also spread a salutary
message to the rest of a region riven by politics.
This column does
not necessarily reflect the opinion of the editorial board or Bloomberg LP and
its owners.
Niall Ferguson...Niall believes the US response to the coronavirus has turned a mid-sized pandemic into a catastrophe. Unlike war, which is typically inflationary because it stimulates demand, pandemics suppress demand. In his view, the economy will be slow to return as lockdowns end, leaving the world in a generally deflationary environment.
... out-of-consensus ideas he thinks have a better than 50% chance of occurring this year.
....Passive Investments Will Get Slaughtered. Stocks are 90% overvalued, which means they need a 50% decline. Multiple expansion was responsible for all of 2019 stock gains. We are still 18 months from the economic and market bottom.
...In a race-to-the-bottom currency war, everyone loses. Gold is the world’s best currency now.
...Oil is increasingly a technology play as getting it out of the ground becomes less expensive. Ditto for natural gas.)
In all world cultures there appears an archetype known as the Master of Animals -- or a Mistress of Animals as in Minoan Crete -- a mythological character who charms and attracts wild beasts. Think of Daniel in the lion's den from the Bible and the many paintings that show the Buddha surrounded by animals. In Hinduism the god Shiva is known as Pasupati, literally "Lord of the Animals". I am thrilled to bring to auction this lustrous gold Master of Animals that would have been worn as a pendant by a chief in Panama over 1500 years ago. He appears to be holding a cylindrical drum; so, like Orpheus in ancient Greece, perhaps music was part of what attracted the beasts to him. The braided arch around him is held in the mouth of four snakes that emanate from the sides of his head and knees.
Meanwhile, the Citi strategists have also produced the scariest chart I have seen in a while. For many years, Tobias Levkovich, the bank’s chief U.S. equity strategist, has been keeping a “Panic/Euphoria” index. This is based on rigorously quantitative and unchanging criteria all of which are rooted in market prices (the NYSE short interest ratio, margin debt, Nasdaq daily volume as a percentage of NYSE volume, a composite average of Investors Intelligence and the American Association of Individual Investors bullishness data, retail money funds, the put/call ratio, CRB futures index, gasoline prices and the ratio of price premiums in puts versus calls). It is a contrarian indicator. When the market is in panic, you should buy. In euphoria, you should sell.
This is a mind-blowing statistic. The market is plainly behaving as though it is ready for a strong post-Covid recovery — and there are good reasons why this might happen. But the notion that the market is in a state of euphoria, now of all times, is alarming.
These Firms Are Feeding America’s Appetite for Novel Meat
By Dawn Pennington | May 26, 2020
The “Quarantine 15” myth appears to be largely that—a myth.
Internet-connected scale maker Withings says the average American weighed in 0.21 pounds heavier between March 22 and April 18. During the same time last year, we gained 0.19 pounds.
These days, we may be less active and more stressed. But judging by our recent grocery receipts, we may be offsetting those effects by eating more veggies… whether or not we planned it that way.
And it looks like some of these recent changes in our diets may become a welcome addition to our old routines, when we can finally resume them.
Planting the Seeds of Change
Our dive into the world of meat and meat shortages—whether real or perceived—evoked some great questions from readers like Annie Z. and Vince W. They asked about the shift to plant-based protein and the outlook for those providers.
Even if you have a hard time digesting the idea of alternative meat, the potential for some of the companies in this space can be pretty mouthwatering.
The plant-based meat market had just under $1 billion in sales last year. IDTechEx forecasts the “novel meat” market to top $30 billion by 2030.
But like many other trends, the coronavirus will likely pull that figure into view a lot sooner.
US shoppers—stuck at home and wondering what’s for dinner… or perhaps stuck in stores with limited quantities of conventional meat—have flocked to meatless alternatives. We bought 264% more meatless meats since March.
This is the kind of investable trend we love. Especially when visionary companies are on standby, ready and waiting to feed that need.
The whole story is that the supply chains for beef, pork, and chicken have been massively disrupted. The wholesale meat supply channels to restaurants dried up due to forced business closures. Meanwhile, meat demand at retail grocers zoomed higher.
The result was a supply-demand mismatch and temporary meat shortages across the country. These will contribute to American meat consumption falling by 4%, or about 10 pounds, in 2020.
Will We Keep Our Appetite for Novel Meat?
The fractured meat market has been a boon for companies like Beyond Meat (BYND), Impossible Foods, and Tofurky. If you couldn’t find the real deal, these were the next best thing.
And JBS S.A. (JBSAY)—the company we covered in the May 12 edition of Reality Check—has also thrown its considerable weight into the plant-based meat arena.
Planterra Foods, a JBS subsidiary, has launched a new plant-based protein brand, OZO. Its product family includes burgers, ground, and meatballs.
Beyond Meat is by far the most notable player and winner. Its shares are trading about 10% above their February 19 high, but still 40% below the July 2019 peak.
Great caution is the name of the game here. The median analyst estimate for 2020 earnings is around 20 cents. That pegs BYND’s forward P/E at an oxygen-starved 650!
Plus, Bank of America analysis pegs a pound of Beyond Meat at $12, versus $4 for regular beef, which may be hard for some families to swallow right now.
The plant protein story does not end here, however.
The High-Tech Future of Meat
Now, the little known “cultured meat” industry has thrown its hat in the ring.
Cultured meat is meat grown in a lab from cultivated animal cells.
And this is not some kind of harebrained idea. The industry has raised millions of dollars.
The California-based food technology start-up Memphis Meats recently raised $161 million. It is the largest investment in the cell-based meat industry to date.
Another start up in the cell-based meat space is Future Meat Technologies. The company raised $14 million to fund its plan to supply the hardware and cell lines to the manufacturers of lab-grown meat.
It is still very early days in this niche market, but there is one way to play it: Tyson Foods (TSN).
Tyson has invested in Future Meat through the venture capital arm of the company.
Tyson is also plowing money and clout into the plant-based meat market. It recently debuted a new brand, Raised & Rooted, that offers plant-based proteins.
This makes Tyson the largest US meat company to enter the space with its own brand.
Shares are off 36% from their recent high. At $60 per share, that puts its P/E at a very reasonable 11 (ttm), and the stock offers a dividend yield of nearly 3%.
Look for more meatless protein options from Kellogg (K) with its “Incogmeato” burger, Nestle (NSRGY) with its “Awesome Burger,” and Tyson’s plant-based shrimp via its investment in San Francisco-based startup New Wave Foods.
Fun fact: Tyson invested in Beyond Meat in 2016 but sold its share last year. Could faux shellfish be its next prescient bet?
Here are some other juicy nuggets in the news.
Here’s the beef: Danish restaurant Noma is ditching its prepaid reservations and $400 dishes to reopen as a $15 burger joint. The vegetarian version is made from quinoa, tempeh, and “fermentation liquids.”
This childhood game is making a sweet comeback: If someone rings your doorbell and leaves you a box of Hostess Brands (TWNK) Ding Dongs, then you’re the newest player in a game of “Ding Dong Ditch.” Be sure to pay it forward!
Homesick for airline food?: Imperfect Foods is playing the role of flight attendant by selling JetBlue’s (JBLU)cheese and snack trays to US customers. It’s the perfect complement for anyone who wants to simulate a canceled 15-hour flight like this family did.
....For Howell, the nature of the imbalance is different, although his theory appears consistent with that of Klein and Pettis. As he expresses it, the U.S. has an overdeveloped financial sector and an underdeveloped industrial sector, while China is the other way around. Fixing this involves risks and difficulty for those in power; China needs to financialize, so that it no longer needs to import American capital, while the U.S. needs to re-industrialize, so that it no longer needs to import cheap Chinese goods. It is very difficult for these things to happen unless they happen at once.
...The risk is that the coronavirus gives an incentive for China to keep pumping more out of its industry, and importing capital from the U.S., whose banking sector will be happy to provide it given lack of consumption at home.
Chances are you don’t have many summer vacation plans for 2020, and even if you do, they probably won’t look anything like past excursions to far-off lands.
When and where people will be able to travel again—if they feel comfortable doing so—is unclear, but countries that depend on tourism are devising strategies to welcome foreign visitors amidst the coronavirus pandemic. Luring guests may not be easy and providing arrangements that protect both tourists and locals will be a logistical feat.
These efforts come as the trillion-dollar international tourism industry is poised for its worst performance since 1950, according to a United Nations World Tourism Organization report. Tourist trips globally could drop this year 58% to 78% compared with 2019 and destinations could lose up to $1 trillion in tourism income—ending a decade of continuous growth. Figures for the first quarter of the year show that tourism is on track for the organization’s ominous scenarios, with trips down 57% in the month of March alone and a total of $80 billion in income already lost.
Tourism’s Collapse
Destinations will see a drop in tourism arrivals and income after years of growth
Estimates and
scenario-based data
Income
(nominal)
Arrivals
1.5B
$1.5T
1.0
1.0
0.5
0.5
0.0
0.0
2003
SARS
epidemic
2009
Great
Recession
2020 scenarios
Coronavirus
pandemic
2003
2009
2020 scenarios
+$50B
(–1.4%)*
–$88B
(–5.4%)*
–$910B to –$1,170B
(–62% to –79%)
–3M
(–0.4%)
from the
year before
–37M
(–4%)
–850M to –1,140M
(–58% to –78%)
Note: UNWTO’s three scenarios for 2020 model the impact of a possible removal of travel bans and restrictions at national borders in July, September and December. *Percent change in income from the year before is adjusted for inflation, except for 2020. Per UNWTO calculations, a 4.5% drop in nominal values in 2015 translates to a 3.6% growth after adjusting for inflation.
Source: United Nations World Tourism Organization
Epic Tourism Decline
Saint Lucia, where income from inbound international travel represents more than half of gross domestic product, is among the first countries in the Caribbean to announce a plan to reopen. In the first phase, U.S. tourists will be allowed to visit the island-state beginning June 4, and 1,500 hotel rooms are being prepared to comply with a Covid-19 certification process. The abrupt halt of tourism in the Caribbean, where many of the island nations haven’t fully recovered from hurricanes Irma and Maria in 2017, will result in the region’s deepest recession in more than a half-century, the International Monetary Fund estimates.
In the European Union, a ban on all travelers outside the Schengen Zone, which includes 30 European countries, is set to expire June 15. Most member-states are planning to relax lockdown measures and reinstate travel within the block. Still, the GDP of their most tourism-reliant countries—Greece, Portugal, Cyprus, Malta and Croatia—is forecast to plunge between 5.8% and 9.7% in 2020.
Most Vulnerable 👆
Dependency on tourism income varies across economies
Tourism receipts as a share of GDP
0-5%
6-15
16-30
31-50
More than 50%
Note: Only countries with data for the most recent year available (2018) are shown.
Source: UNWTO
Greece reopened organized beaches earlier this month and will allow direct international flights from 19 countries starting June 15 without a testing or quarantine requirement. In Croatia restrictions regarding business and leisure travel have been relaxed and the border will reopen May 29 for travelers from four countries. And in Cyprus tourists from 19 countries will be allowed to enter starting June 9 on the condition they test negative three days before visiting, as hotels and restaurants are among the businesses that will reopen between June and July.
Other popular destinations in the EU—home to nine of the 20 most-visited countries globally in 2018—want to reopen for tourists, too. Italy—among the countries in Europe hardest-hit by the virus—is lifting an unofficial border closure on June 3 for tourists from the Schengen Zone and scrapping a 14-day quarantine requirement. Spain is considering reopening its border to Schengen passengers in early July, while a two-week isolation for all visitors is due to end in May.
Easing travel restrictions in the U.S. will depend on the health protocols of partner countries and whether or not they will allow Americans to visit, according to Reuters. In China—where foreign airlines are permitted to a limited flight schedule only—another outbreak of the virus prompted the government to reintroduce a lockdown for some 108 million people in the northeast. And in the U.K., a mandatory 14-day quarantine for all arrivals, including returning British holidaymakers, will be implemented from June 8. The move may deal a blow to the U.K. tourism industry as well as to the prospects of some European countries where Britons make up a crucial share of all visitors.
Allowing tourists from nearby countries that have managed to contain the virus is another way to reboot the industry; Australia and New Zealand in the Pacific, Estonia, Latvia and Lithuania in Europe, and China and South Korea in Asia have introduced such so-called ‘travel corridors’.
Globally, the travel and tourism sectors generated 330 million direct and indirect jobs in 2019, according to the World Travel and Tourism Council. However, their recent research suggests the industry is on track to lose more than 100 million jobs because of the pandemic, with 75% of them likely to come from G20 economies. Already 25 million jobs were lost in one month as of late April, WTTC research shows.
Airlines and hotels were the first to experience the economic impact of the pandemic. Scheduled flights globally plunged in April 61% compared with 2019, to 1.6 million, according to figures from OAG. Airlines worldwide are estimated to lose this year $314 billion in passenger revenue this year, a 55% drop compared with 2019, according to the International Air Transport Association, and as of early May airlines in Europe, the U.S. and Asia have secured more than $85 billion in state aid.
Confirmed reservations for April through September declined an average of 37% for each week of March and April compared with a year ago, according to a survey of hotels and resorts from Duetto. In recent earnings announcements, Marriott International and Hilton Worldwide both reported a 90% drop in revenue per available room in April.
Even after travelers feel comfortable booking trips again, the virus’s impact on tourism is likely to last. According to WTTC, the ‘new normal’ in travel will comprise additional standards and protocols in airports and hotels: tests before flying and upon arrival; contact tracing; improved hygiene and cleaning procedures on-board and during stays; and increased use of contactless check-ins and payments.
