Hong Kong Credit Downgraded for PRC Lackeydom

♠ Posted by Emmanuel in at 4/23/2020 04:47:00 PM
To paraphrase Sting, don't stand so close to Xi...or get a credit rating downgrade.
 Apparently, the rating agency Fitch does not think much of the "one country, two systems explanation for Hong Kong's existence alongside the PRC. If you are a Hong Kong civil servant, the logic Fitch used would be especially dismaying since their rationale for downgrading your special administrative region was "guilt by association". Was it a fair process through which HK was downgraded from AA to AA-? If you ask me, no. Here's what Fitch had to say:
The anti-government protests, which grew increasingly violent in late 2019, appear to have temporarily receded amid the health crisis. At the same time, Hong Kong's deep-rooted socio-political cleavages remain unresolved, in Fitch's view. This injects lingering uncertainty into the business environment, and entrenches the risk of renewed bouts of public discontent, which could further tarnish international perceptions of the territory's governance, institutions, and political stability.

The downgrade also reflects Fitch's view that Hong Kong's gradual integration into China's (A+/Stable) national governance system and associated rise in economic, financial, and socio-political linkages with the mainland justify a closer alignment of their respective sovereign ratings. These established trends are exemplified by the central authorities taking a more vocal role in Hong Kong affairs than at any time since the 1997 handover.
This despite Fitch acknowledging Hong Kong's exemplary public financial management--protests and COVID-19 notwithstanding:
Public finances will remain a rating strength, despite the large budget deficit this year. Fitch's estimate for general government debt of 41% of GDP largely reflects outstanding liabilities used to manage the currency board, which are not fiscal in nature. Excluding these obligations, Hong Kong's government debt burden of about 3% of GDP compares favourably with the historical medians of 40% and 42% for 'AA' and 'A' rated peers, respectively. In addition, years of accumulated budget savings means the current mix of expansionary fiscal policies will be largely funded by fiscal reserves, rather than government debt issuance. Fitch projects the budget deficit will narrow to 2% of GDP in FY21, as one-off relief measures are unwound.

External finances are robust, despite a sobering hit to international trade volumes since early 2019, which will be exacerbated by the massive retrenchment in global activity currently underway. At the same time, Fitch believes these challenges are unlikely to jeopardise Hong Kong's external balance-sheet strengths. The territory is the second-largest net external creditor among Fitch-rated sovereigns (about 276% of GDP), and will likely remain so given our forecast for the current account to remain in modest surplus this year.
So it doesn't matter how well Hong Kong does by itself for as long as the PRC exerts pressure on it? That doesn't seem fair. What parallel universe does Fitch occupy in which the United States--which will run at least a $4 trillion dollar budget deficit [try this novelty source] this year--maintains an AAA rating, while Hong Kong which takes far more fiscally prudent measures gets knocked down to AA- from AA? 

COVID-19 Vaccine Development as Reality Show

♠ Posted by Emmanuel in at 4/20/2020 07:26:00 PM
This pharma reality show could use a loudmouthed, orange-faced fatty whose tagline is "You're FDA disapproved!"
Almost every conceivable activity has been turned into a reality show: (90s rap star) Vanilla Ice Goes Amish...a real-life 'Lord of the Flies' scenario where young'uns run society in Kid Nation...the list goes on and on. The age of Trump has transformed even normally staid and dignified human endeavors into, well, reality shows--and you could very plausibly argue that he's turned the entire USA into Kid Nation, but I digress.

Given Trump's incessant search for a COVID-19 miracle cure to save his political fortunes, we didn't have to wait too long before someone came up with--you guessed it--a reality show about developing a COVID-19 vaccine. Now, vaccine development is not something to be trifled with since the amounts spent and the tortuous path to commercialization--ensuring efficacy and safety--are hardly frivolous. Or maybe that was how vaccine development was like prior to November 8, 2016. Open up your LinkedIn account if you have one and you'll probably have a paid (spam) message from Johnson & Johnson hawking the program above. But it's hardly the only offender touting early-stage drugs to gain Trump's attention:
President Donald Trump’s habit of touting potential coronavirus cures during daily White House briefings has changed the game for drugmakers, who are dropping their usually secretive ways to aggressively court public opinion.

From Gilead releasing anecdotal results on the drug remdesivir to Johnson & Johnson’s new reality series on the making of its experimental vaccine, pharmaceutical companies are seeking to shape the narrative like never before. The PR push could raise false hope about therapies that don't end up working, or even put pressure on the Food and Drug Administration to approve drugs and vaccines whose effectiveness isn't clear.

Gilead’s unusual move last week to publish data from compassionate use of remdesivir raised eyebrows among researchers. To a trained eye, the information revealed little about the experimental drug’s safety or effectiveness — and Gilead has multiple clinical trials underway that are set to produce more definitive results in just a few weeks.

Why has normal caution been thrown out the window? A quick stock bump helps in this time of depressed equity valuations. Ask Gilead. With pharma companies of all sizes trying to conserve cash, having Trump trumpet your drug instead of having to publicize it yourself helps, too. Still, you have to be very brave indeed since the drug may fail to make it through FDA trials--like 86% of them do.  Obviously, all potential COVID-19 vaccines and treatments are early-stage drugs whose futures are uncertain. That includes Gilead's remdesivir. 

Then again, maybe we are all TV infomercial hawkers now--pharma companies notwithstanding. Ours is such a dissipated age.

Death Wish 6: Bolsonaro’s Brazilian Slaughterhouse

♠ Posted by Emmanuel in , at 4/18/2020 08:34:00 PM
"I'm sorry, some people will die. That's life." - Jair Bolsonaro.
 Charles Bronson starred in a number of increasingly formulaic action movies depicting gritty scenes of urban decay in the Death Wish series. The first of these movies actually garnered passable reviews and captured the zeitgeist of the times. By the fifth installment, though, its formula had worn out its welcome critically and commercially. That should not be especially troubling for fans of this series since a real-life Charles Bronson wannabe has been installed as a Latin American leader in Brazil. A real-life sequel appears to be unfolding in Brazil as its ultra right-wing Trump-alike Jair Bolsonaro dismisses COVID-19 as, well, a hoax.

The Death Wish series has been described as fascist in promoting dark vigilante justice.  Railing against homosexuals, left-wingers, and pretty much everyone else not aligned with his ultra right-wing agenda, Bolsonaro is a real-life personification of Charles Bronson's caricature. What better way to "cleanse" society of those weak enough to succumb to what he says is such a minor affliction? Some people will die, etc.

Unlike Trump who is occasionally swayed by reason--however fleeting--Bolsonaro is immune to persuasion by science and invents his own. (Unsurprisingly, he believes the number of cases and fatalities are being grossly inflated by political opponents.) He is one of the global "leaders" unwilling to compromise on the matter. Fortunately, Brazil's is a federal system of government, allowing saner local governments to implement quarantines and suchlike. Yet the lack of a meaningful and coordinated national-level response has invited criticism from left, center and right about Bolsonaro's competence (and sanity). According to former President Lula:
Jair Bolsonaro is leading Brazilians “to the slaughterhouse” with his irresponsible handling of coronavirus, the country’s former president Luiz InĂ¡cio Lula da Silva has said. In an impassioned interview with the Guardian – which came as Brazil’s Covid-19 death toll hit 1,924 – Lula said that by undermining social distancing and defenestrating his own health minister, Brazil’s “troglodyte” leader risked repeating the devastating scenes playing out in Ecuador where families have had to dump their loved ones’ corpses in the streets.

“Unfortunately I fear Brazil is going to suffer a great deal because of Bolsonaro’s recklessness … I fear that if this grows Brazil could see some cases like those horrific, monstrous images we saw in Guayaquil,” said the 74-year-old leftist.
Alike Trump, Bolsonaro does not adopt fringe positions for the heck of it. He may be delusional in downplaying the coronavirus' harms--and place millions of Brazilians in harm's way as a result--but there is a political calculation here still. He is playing to his base, and will act according to how things play out:
  • If the disease peters out (likely through restrictions on movement placed by the governors), he can say he was right all along that COVID-19 was overhyped. 
  • If the disease claims the lives of thousands more Brazilians, he can still claim to have been right since at least the economy is up and running again--providing livelihoods to tens of millions--which is the more important thing than the lives of a few thousand. 
Is Bolsonaro leading Brazil into the slaughterhouse? Bolsonaro doesn't really care, especially if those who die are the sundry "malign" elements in society who wouldn't vote for him anyway. That is modern-day fascist reasoning. What Bolsonaro believes is that, either way, his actions will play into the beliefs of his base, and that's how to win re-election. To him, it's a politically calibrated death wish absent any real talent at governing. Sounds familiar? We'll be heading back to Estados Unidos soon enough...

Trump's Art of the Oil Deal [sic]

♠ Posted by Emmanuel in , at 4/17/2020 12:07:00 PM

Trump likes to portray himself as a dealmaker par excellence, but even this Wall Street Journal article he tweeted about was fairly condescending of his abilities in this respect, saying "Donald Trump’s legendary deal-making ability during his years as a real-estate mogul is more fantasy than reality, but the president outdid himself in this weekend’s high-stakes oil diplomacy." At any rate, how's the reality of this Savior of the American Oil Industry act playing out? In the aftermath of this so-called Trump-orchestrated deal, the benchmark US grade West Texas Intermediate (WTI) crude cratered from an abysmally low $20 to $18-something. The situation was really bad before the OPEC+ deal, but it got even worse:
US crude oil prices sank to around $18 a barrel on Friday [17 April], the lowest level since 2002, as energy markets struggled to absorb a record glut created by the coronavirus pandemic. Prices have dropped this week despite a landmark US-backed deal by the Opec+ group of producers to cut production by almost a tenth. But traders have judged that the collapse in demand is much greater — with up to a third of global consumption lost to measures to restrict the virus’s spread.
That has led to volatility, as traders bet oil storage will rapidly fill up, including at the US crude benchmark’s delivery hub of Cushing, Oklahoma. The front-month West Texas Intermediate contract for May delivery, which expires early next week, lost as much as 9 per cent to trade down to $18.03 a barrel, an 18-year low.
With "deals" like Trump's, who needs deals? The heart of the matter is that while OPEC+ (including Russia) agreed to an all-time high 10 million barrel per day production cut, global demand destruction due to COVID-19 is estimated to be between 25 and 35 million bpd. Not enough has been to reduce supply to account for losses in demand, so prices will have clear at a far, far lower price. Even if the United States completely halts oil production, that would only reduce the global glut by up to 12 million bpd. It's simple economics that escapes Trump's comprehension.

4.20 UPDATE: If you thought $18/bbl WTI crude was unbelievably low, how about $3 per barrel? With Trump "saving" the American oil industry, who needs COVID-19 to finish it off? 

Boris Johnson, UK's COVID-19 Trump-Alike

♠ Posted by Emmanuel in , at 4/14/2020 07:36:00 PM
Meet that other Anglo-Saxon biggie causing unmitigated COVID-19 disaster, UK Prime Minister Boris Johnson.
 I will be upfront and say that I detest Boris Johnson at least as much as Donald Trump. He is much of the same ilk: a clownish, loud-mouthed, and obese isolationist. Johnson is the best-known proponent of that exercise in self-harm known as Brexit. Still, there may be some slight differences that are in no way substantive between these two big-bellied blond-haired buffoons. Johnson epitomizes the romanticized view of British exceptionalism, that somehow curtailing personal freedoms through, say, a lockdown, would violate some fanciful, imaginary idea of Ye Olde England:
The Sun reported the prime minister’s remarks rather differently: “Mr Johnson said he realised it went against what he called ‘the inalienable free-born right of people born in England to go to the pub’.” In this version, the freedom to go to the pub was conferred by genetics and history, not on the “people of the United Kingdom” or “the British people”, but on “people born in England”. It does not apply to Scots, Welsh or Northern Irish people and certainly not to the 9.4 million people living in the UK who were born abroad. It is a particular Anglo-Saxon privilege.

And since we are in the terrain of the ludicrous, the Sun’s version actually made more sense. There is, of course, no ancient and absolute right to go to the pub – inns and public houses have been regulated in England at least since the 15th century. But what Johnson was really evoking was a very specific English sense of exceptionalism, a fantasy of personal freedom as a marker of ethnic and national identity.

That exceptionalism is not, alas, mere rhetorical self-indulgence. It helped to shape official policy towards the Covid-19 crisis. It lies behind both the idea that there should be a distinctive British response to this global challenge, and the assumption that there was something peculiarly unnatural in expecting Brits to obey drastic restrictions. Its legacy is the globally discredited policy of “herd immunity” and the late introduction, squandering Britain’s head start, of the lockdown.
What is the result of having this other joke of an Anglo-Saxon "leader", erm, "dealing" with Britain's COVID-19 response? Contrast the UK's slow-footed response with neighboring Ireland's:
At the time of writing, 365 people have died in Ireland of Covid-19 and 11,329 have died in the UK. Adjusted for population, there have been 7.4 deaths in Ireland for every 100,000 people. In the UK, there have been 17 deaths per 100,000. In other words, people are dying of coronavirus in the UK at more than twice the rate they are dying in Ireland. Yet, despite Ireland being your closest neighbour, this has barely been mentioned in the British press...

We knew of the measures and plans the Irish government was putting in place to protect us and we knew how far your government was slipping behind. When our taoiseach was closing our schools and universities, your prime minister was still telling you to wash your hands. When our government cancelled St Patrick’s Day celebrations, yours allowed the Cheltenham Festival to go ahead and, with it, a potentially massive multi-day super-spreading event of over 250,000 people. The contrast was disorientating.
Nor is it a case of apples and oranges comparing Ireland with the UK:
Comparisons between countries inevitably run into difficulties. Overall, Ireland has a lower population density than the UK, which arguably slowed transmission of the virus. However, a larger proportion of the Irish population is centred around the capital city: 39% of us live in the Greater Dublin area, whereas Greater London holds 16% of the population of England.

We’re a highly connected population, concentrated to the east of the country, all of which works against us in a pandemic. Given the ease of transmission of the coronavirus within the family home, another factor becomes relevant: the average household in Ireland is larger than that in the UK. Other comparators are more grimly equivalent: both Ireland and the UK began the pandemic with roughly equivalent levels of ICU beds, just over half the EU average.
There are consequences for electing "leaders" like Trump and Johnson,. People will needlessly die because of their buffoonery. What's more, people like the rotund Johnson strain health services while attempting to cope with the consequences of their poor health. Unfortunately, just as nearly every other American is obese, the UK sits at the top of Western European obesity league tables at 28.7%.

American Obesity Supersizes COVID-19's Impact

♠ Posted by Emmanuel in , at 4/07/2020 08:51:00 PM
Physique-wise, Trump is the perfect embodiment of the country he "leads".
The French author Joseph de Maistre famously said that "Every nation gets the leader it deserves." With the obese fraudster Donald Trump, the United States gets a leader whose bulbous, Jabba the Hutt-like physique mirrors the unhealthiness of its general population. To be sure, Trump's slothful response the COVID-19 outbreak Stateside is nothing short of disastrous--but what exactly did you expect? (See de Maistre's statement above.) From stating there's nothing to worry about with the coronavirus to downplaying the virus as a hoax meant to harm his political prospects, Trump is behaving true to form--a snake oil salesman to the last.

As I write, the United States now has the highest number of cases of COVID-19 of any country on Earth. To be fair to Trump, however, the United States' situation is not entirely down to the federal government's ineptitude. Often forgotten is that a nation's susceptibility to pandemics not only depends on the quality of its health system--a significant determinant of which is state action--but also the underlying health of its people. In 2004, Greg Critser described the United States as Fat Land. The title was true enough back then when the US obesity rate was around 30%. That statistic was, for me and many non-Americans, mind-boggling even then. Imagine now that the US obesity rate is 42.4%. 42.4! More than 4 in 10 Americans are at least as fat as their "leader".

Lest you think I'm just being mean, it's relatively uncontested that risk factors associated with obesity such as cardiovascular disease, diabetes, and respiratory illness have been found to exacerbate the severity of COVID-19 infection:
The huge burden of obesity and other chronic conditions among Americans puts most of us at direct risk. In fact, with obesity rates in the United States much higher than affected countries like South Korea and China, our outcomes — economic- and health-wise — could be much worse...

 Data from China suggest that many chronic health problems increase the likelihood of a bad outcome, including cardiovascular disease, which affects nearly half the adults in the United States in some form, and diabetes, which affects about 10 percent. In Italy, 99 percent of the fatalities were people with pre-existing medical problems, especially hypertension...

Moreover, in the United States, obesity-related metabolic conditions may put the public at exceptional risk. Today, more than two of three adults have high body weight, and 42 percent have obesity, among the highest rates in the world. Almost two in 10 children have obesity. Excessive weight, and the poor-quality diet that causes it, is strongly associated with insulin resistance, chronic inflammation and other abnormalities that may lower immunity to viral respiratory infection or predispose to complications.
Preliminary studies from China certainly do not contradict this assessment, which is proving uncannily accurate of where the US is headed. Speaking of which, early observations suggest that obese Yanks will not fare any better:
In a report from the CDC’s Morbidity and Mortality Weekly Report (MMWR) published Thursday, researchers conclude that Americans with diabetes, chronic lung disease and cardiovascular disease — all diseases linked to obesity — are at higher risk of experiencing a severe infection due to COVID-19.

The study analyzed more than 7,000 cases of coronavirus from February 12 to March 28. Out of the 457 individuals admitted to the ICU in that time, 358 — or 78 percent — reported having one or more underlying health conditions. Nearly 11 percent of the ICU-admitted individuals listed diabetes, followed by 9.2 percent reporting chronic lung disease and 9 percent reporting cardiovascular disease. Less than 30 percent of COVID-19 patients who recovered without hospitalization reported having an underlying health condition.
Also read the full report to get a better picture of what's happening Stateside:
What is already known about this topic?
Published reports from China and Italy suggest that risk factors for severe COVID-19 disease include underlying health conditions, but data describing underlying health conditions among U.S. COVID-19 patients have not yet been reported.
What is added by this report?
Based on preliminary U.S. data, persons with underlying health conditions such as diabetes mellitus, chronic lung disease, and cardiovascular disease, appear to be at higher risk for severe COVID-19–associated disease than persons without these conditions.
What are the implications for public health practice?
Strategies to protect all persons and especially those with underlying health conditions, including social distancing and handwashing, should be implemented by all communities and all persons to help slow the spread of COVID-19.
Let's skip the fancy terms here: In plain English, there would be far fewer Americans with "underlying health conditions" that exacerbate COVID-19's impact if they simply weren't so fat. Trump's buffoonery has undoubtedly contributed to the United States' mounting death toll--near the top of global league tables already. However, Americans being as outrageously fat as he is should be noted as an extenuating factor.

As bad as things are Stateside, they are likely to get even worse when more cases pop up not in relatively healthier coastal cities but in the heartland where people are fatter and have a higher death rate as a result:
The coronavirus has been a far deadlier threat in New Orleans than the rest of the United States, with a per-capita death rate twice that of New York City. Doctors, public health officials and available data say the Big Easy’s high levels of obesity and related ailments may be part of the problem.

“We’re just sicker,” said Rebekah Gee, who until January was the health secretary for Louisiana and now heads Louisiana State University’s healthcare services division. “We already had tremendous healthcare disparities before this pandemic – one can only imagine they are being amplified now...”

New Orleans residents suffer from obesity, diabetes and hypertension at rates higher than the national average, conditions that doctors and public health officials say can make patients more vulnerable to COVID-19, the highly contagious respiratory disease caused by the coronavirus.  
And which places voted for Trump? In the end, you indeed get the leader you deserve.