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Satchu's Rich Wrap-Up
Wednesday 23rd of September 2020

World Of Finance

“Anybody can be decisive during a panic; it takes a strong man to act during a boom.” ― V.S. Naipaul, A Bend in the River

The absolute precariousness of the Global Economy is something I had not adequately comprehended

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Taiwan President @iingwen praised on Tuesday the “heroic performance” of air force pilots who have been intercepting Chinese jets that have approached the island @Reuters
Law & Politics

Visiting a major air force base on Penghu in the sensitive Taiwan Strait that divides the two sides, Tsai told pilots and engineers she was aware of their “heroic performance” when intercepting and driving away Chinese aircraft.

“I have a lot of confidence in you. As soldiers of the Republic of China, how could we let enemies strut around in our own airspace?” she said, using Taiwan’s formal name.

“I’m aware that facing the provocative behaviour of the communist planes that have encircled the island and damaged regional peace in recent days, your duty at the front line of the airspace in Penghu must be even heavier.”

Wang Chia-chu, one of the senior officers of the “Heavenly Colt” IDF squadron, told Reuters there is just five minutes’ time to scramble fighters once Chinese aircraft are spotted.

“We will defend our airspace in real time as long as there’s a threat,” Wang said.

Another senior officer, speaking on condition of anonymity, told Reuters the Penghu-based IDFs are now scrambling “almost every day” as tension run high.

Unusually, Chinese aircraft last week breached the mid line of the Taiwan Strait, an unofficial barrier for combat aircraft of both sides, although they have not flown over mainland Taiwan.

On Monday, China’s foreign ministry said the line did not exist, provoking condemnation from Taiwan Foreign Minister Joseph Wu.

In Taipei on Tuesday, Wu called the line an important “symbol” for avoiding military clashes, and urged other countries to condemn China.

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6. 1,998,897 infections registered in the seven-day spell ending September 20 The total marks a six per cent rise in a week, up from 1.84million @WHO @MailOnline

The total marks a six per cent rise in a week, up from 1.84million, and is 'the highest number of reported cases in a single week since the beginning of the epidemic', the UN agency said.

Only Africa, which has remained relatively unscathed by the pandemic, dodged the upward trend, reporting a 12 per cent drop in fresh cases from a week earlier.

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Origin of COVID-19 by Heraclitus September 6, 2020

Many questions remain unanswered about the origin of SARS-CoV-2, and we are certainly not the only scientists that have them. 

There are likely benign convincing explanations to everything, but to date we have not seen them. 

Some will say: why does knowing the origin matter? It matters for several reasons. First of all, it will help us plan for the future. If this indeed was a virus that arose from close contact with wildlife and humans, this contact in the future will have to be managed. Secondly, if in the unlikely event this was perhaps escape from a lab, then lab procedures will have to be evaluated, and lab experiments with infectious possibly pandemic viruses will have to be additionally regulated. Finally, if this again was an unlikely escape from a lab, then knowing the exact type of virus we are dealing with would help us manage the current pandemic.

The story starts, we believe, with a noble goal: to prevent the world from ever having the type of pandemic we are currently experiencing, through production of a vaccine effective against all coronaviruses past and future.

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Coronavirus vaccines can be difficult to make. In animals, while vaccines are sometimes successful, toxicity of the vaccine as well as incomplete immunity can happen.

SARS-CoV-2 (COVID19) is a lot like SARS-CoV (SARS). SARS initially hit China and East Asia in 2003, killed 774 people, infected over 8000, and scared everyone. For the past 17 years there has been an enormous effort worldwide to develop a vaccine not only against SARS but also against all coronavirus strains. As we have detailed in another post, scientists knew in 2006 that recombinant spike protein RBD vaccines to SARS didn’t protect all animals from a re-challenge from a slightly different mutated coronavirus (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7124095/pdf/978-0-387-33012-9_Chapter_101.pdf). Young animals can gain immunity, but it can be harder to get protective immunity in older animals (https://pubmed.ncbi.nlm.nih.gov/17194199/). 

Killed whole coronavirus vaccines in animal models of SARS infection demonstrated that in some animals such as ferrets, killed whole virus vaccines gave a predominant Th2 response (you want Th1) and that there was an antibody dependent enhancement (ADE) of lung toxicity in mice (https://jvi.asm.org/content/85/23/12201). This led to the idea of a live attenuated coronavirus vaccine (https://www.nature.com/articles/nrmicro3143) (https://www.nature.com/articles/nm.2972) (https://www.nature.com/articles/nbt.1635), which is a vaccine that infects and reproduces in a human, results in immunity, but does not cause severe disease.

This has been an important issue since the SARS pandemic in 2003 and was reinforced by MERS epidemic in 2012. Enormous amounts of resources and human effort have been thrown at this problem, and these resources have come from just about everyone: governments, industry, NGOs, and philanthropy. 

Various live virus attenuated recombinant vaccines have two issues among many. First, these vaccines have to be able to be grown in culture in great quantity for testing and for mass production. Second, the vaccines can mutate and revert back to severe pathogenicity once administered, especially in those with weaker innate immune systems. These dual problems have confronted vaccine developers. 

To make a recombinant attenuated live coronavirus vaccine that you can grow in culture, it should be pretty obvious that (a) you have to have it gain function to make it more viable in culture; and (b) while at the same time make it less pathogenic and less able to recombine. These are somewhat contradictory goals and can be hard to do.

Live attenuated vaccines can be hard to make without them mutating a lot in culture in ways you do not expect, not being able to grow them in culture to make lots of virus to work with, and without them reverting back to a dangerous live virus once someone (animal or human) is vaccinated, as happened in 1998 with a live attenuated poliovirus vaccination on the island of Hispaniola (Haiti and the Dominican Republic) (https://pubmed.ncbi.nlm.nih.gov/11896235/).

Virologists have been making recombinant man-made coronaviruses to try to find one that is safe and will work as an attenuated vaccine for over 15 years. To do this they use “reverse genetic systems” to make the virus they want in bacteria or yeast (https://www.pnas.org/content/100/22/12995)(https://www.pnas.org/content/110/40/16157). In these reverse genetic systems, to make man-made viruses with specific functions, mutations are inserted into the DNA copies of the virus. Bacteria or yeast make lots of these DNA copies, which are added mammalian cells in culture to provide live RNA viruses in the fluid surrounding them. These fluids containing the man-made viruses can then be used to infect animals or people (https://pubmed.ncbi.nlm.nih.gov/19036930/). The goals of these experiments were likely twofold: (1) to find out how viruses like SARS can jump from bats to humans, to develop countermeasures; and (2) to develop universal vaccines to protect the world in the case of a coronavirus pandemic.

Scientists have used several man-made strategies to make viruses weaker to use as possible coronavirus vaccines. These strategies included increasing the number of attenuating mutations in the virus through alteration of a necessary viral RNA proofreading enzyme called ExoN (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3518599/), but these types of viruses were found to revert to a more aggressive phenotype with long term culture of 250 passages (https://mbio.asm.org/content/8/6/e01503-17.abstract). Viruses also were mutated to not recombine with each other (possibly increasing virulence through recombination) by changing a viral RNA “leader” sequence (ACGAAC to UGGUCGC) possibly responsible for this recombination (https://www.nature.com/articles/s42003-018-0175-7).  Additionally, there has been consideration to mutate viruses in a way, called “codon de-optimization” in which the RNA of the virus is changed to make the same viral proteins, but make them slower, and thus have slower virus growth (https://jvi.asm.org/content/89/7/3523). This has been done for multiple viruses including influenza (https://pubmed.ncbi.nlm.nih.gov/20543832/). 

As noted above, a major issue with experiments like these is that to fully examine the ways viruses jump from bats to people, and to fully develop man-made recombinant vaccines sometimes viruses are unexpectedly made that have the potential to become much more transmissible in animals and possibly in humans. These are called “gain-of-function” experiments. This appeared to happen in at least one experiment in mice published in 2015 (https://pubmed.ncbi.nlm.nih.gov/26552008/). The danger of these experiments needs to be carefully weighed against the possible costs, since leaks from laboratories of viruses are not uncommon (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC416634/), and if a gain of function strain were to escape, we could have a pandemic similar to the one we are currently experiencing.

The US scientific community held a symposium in 2014, which led to the banning of funding of these “gain of function” experiments https://mbio.asm.org/content/5/6/e02366-14. This ban was rescinded in 2016 https://osp.od.nih.gov/biotechnology/gain-of-function-research/. Minutes of the meetings of the advisory body (the National Scientific Advisory Board for Biosecurity, or NSABB) to help the NIH and Secretary of Health (at the time, Sylvia Burwell) to decide to rescind the ban were heated (https://osp.od.nih.gov/wp-content/uploads/2016/11/NSABB_January_2016_Meeting_Minutes.pdf). The NSABB members asked for multiple safety “guardrails” for this research to proceed.

In 2013, six miners in Yunnan Province, 550 miles south of Wuhan, were cleaning out a copper mine of bat droppings. They all developed a severe pneumonia with symptoms very similar to SARS-CoV-2 pneumonia, and three died. During the workup of these miners it was determined that several of the miners developed antibodies to a SARS-like coronavirus (https://www.documentcloud.org/documents/6981198-Analysis-of-Six-Patients-With-Unknown-Viruses.html).

The WIV (Wuhan Institute of Virology) became involved, and in 2013-2014 isolated viruses from fecal swabs of 276 bats in the cave and found novel SARS-like coronaviruses in 138 of them. These samples were brought to Wuhan for further study. Manuscripts describing these viruses were published in 2016, but for some reason the publication left out the deaths of the miners from the cave (https://www.pnas.org/content/100/22/12995) (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7090819/).

Investigators then determined that about 9% of residents of villages around the Yunnan cave had developed antibodies to a SARS-like coronavirus, yet none of them appeared to have severe symptoms. All of these villagers described bats flying around, and none of them visited the cities where SARS was endemic in 2003, so they likely developed an asymptomatic infection (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6178078/). 

This experiment of nature likely became a matter of intense interest. How could these humans around the cave be exposed to bats carrying a supposedly lethal SARS-like coronavirus yet have no or minimal symptoms? The implications of the answers to this question were obvious: (a) bat to human transmission could be probed in depth, and (b) a live attenuated vaccine to coronavirus could be developed by mimicking the natural process that led to an attenuated virus that caused antibody production to a SARS-like coronavirus without symptoms.

It is entirely possible that investigators at the WIV could have been performing such experiments in coronavirus gain-of-function manipulation, trying to obtain a live attenuated virus for an attenuated vaccine, based on coronaviruses isolated from Yunnan province or elsewhere, when there was a laboratory accident/leak of virus sometime in the fall of 2019.

Prominent virologists argued in a letter to Nature Medicine in early March (https://www.nature.com/articles/s41591-020-0820-9) that lab escape, while not being entirely ruled out, was unlikely. Yet there are a number of unusual features of SARS-CoV-2, as well as some unusual scientific behavior of Chinese and US investigators, that requires explanation. Hopefully there are simple and trivial explanations, and that SARS-CoV-2 can be explained as a natural experiment that mimicked very closely a series of laboratory experiments performed in the exact place (Wuhan) where the virus was initially found in humans.

These questions point to a manipulated virus, which may have escaped from a WIV lab. These questions can be answered by an independent audit of the WIV P4 laboratories where the novel coronaviruses were being studied, which would have been one of the first steps international authorities usually take. Such an independent audit has not taken place, which is highly unusual scientific behavior.

Hopefully there are simple and trivial explanations, and that SARS-CoV-2 can be explained as a natural experiment that mimicked very closely a series of experiments performed in the exact place (Wuhan) where the virus was initially found in humans.

These questions, in no particular order, are as follows:

Why didn’t the investigators mention the 2013 deaths of the miners from a likely novel coronavirus in their 2016 paper describing the sequence of novel Yunnan coronaviruses (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7090819/)? This would have been a matter of intense interest worldwide.

SARS-CoV-2, from its earliest isolates, appears to have optimal spike protein binding to ACE2, with very few new receptor binding domain (RBD) mutations in SARS-CoV-2 (https://www.biorxiv.org/content/10.1101/2020.05.03.074567v2). Usually viruses like coronavirus adapt their spike protein over time to bind human ACE2 more tightly. Can this be explained naturally?

A pangolin coronavirus isolated in 2019 under study at the WIV and elsewhere appears to have an RBD of its spike protein is very close to SARS-CoV-2 (97.4% amino acid homology) where the rest of this pangolin coronavirus has less homology (85-92%) (https://www.nature.com/articles/s41586-020-2169-0). RaTG13 has a lot less homology in the RBD with SARS-CoV-2, yet is more than 96% identical to SARS-CoV-2 over the entire virus (https://www.cell.com/cell/pdf/S0092-8674(20)30262-2.pdf). Recombination to make SARS-CoV-2 from an ancestor of these two viruses would be an extremely rare one-time event. Is there a natural explanation for this?

In 2018, experiments with a novel recombinant SARS coronavirus substituted the typical TRS transcription leader and body sequences with a novel sequence (UGGUCGC) in an attempt to further reduce recombination in animal models as a live vaccine candidate (https://www.nature.com/articles/s42003-018-0175-7#Sec7). This TRS leader sequence, supposedly novel, is found starting at nucleotide 1465 in SARS-CoV-2 and could result, if utilized, in a novel viral RNA transcript that deletes part of the nsp2 protein of the ORF 1ab polyprotein. It is also found at nucleotide 1446 in RaTG13, one of the viruses found in the Yunnan cave in 2013, which has been proposed as a precursor to SARS-CoV-2. It is found in that area in no other coronavirus. This novel TRS sequence is also found in the 3’ ends of viral spike RNA transcripts of SARS-CoV. Why was this not mentioned in the 2018 paper describing the novel TRS sequence recombinant viruses? Is there an explanation for this? 

A recombinant SARS-like coronavirus (SHC015-MA15) containing a human SARS Urbani spike protein sequence inserted into a mouse adapted SARS-like coronavirus was found to develop increased pathogenicity during infection of aged but not young mice compared to the parent MA15 strain in a 2015 publication (https://www.nature.com/articles/nm.3985). The RNA sequence of this recombinant manipulated coronavirus was not deposited in Genbank until May 2020, five years later (https://www.nature.com/articles/s41591-020-0924-2). This is highly unusual behavior. Is there an explanation for this?

In the publication of SHC015-MA15 above in November 2015, the attribution of funding of Shi Zheng Li by the US NIAID was initially left out (https://www.nature.com/articles/nm0416-446d).  It was reinstated in the publication in 2016 in a corrigendum, perhaps after the meeting in January 2016 to possibly reinstate NIH funding for gain of function virus research. This is also unusual scientific behavior. Is there an explanation for this?

After amino acid 604 of the spike protein of RaTG13, there is no difference between the spike of RaTG13 and SARS-CoV-2, yet other coronaviruses have multiple differences in this area (https://www.cell.com/cell/pdf/S0092-8674(20)30262-2.pdf).  The only difference between these two viruses is in the PRRA furin cleavage site, and there are novel nucleotide changes apparently inserted into SARS-CoV-2 that allow insertion of this furin cleavage site into RaTG13 (https://medium.com/@yurideigin/lab-made-cov2-genealogy-through-the-lens-of-gain-of-function-research-f96dd7413748).  Is there a natural explanation for this?

There are quite possibly very simple and very benign explanations for all of these questions as well as others. They likely can be answered by a simple independent audit of the WIV P4 laboratories where the novel coronaviruses were being studied. This is one of the first steps international authorities usually take. Such an independent audit has not taken place, which is highly unusual scientific behavior.

The origin of the virus is extremely important in helping us determine what is going to happen going forward in the pandemic, as well as to suggest what possible therapies could have activity. 

It is therefore critical that we determine a precisely as we can the origin of the virus.

We are not the only scientists considering this.

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.@WHO experts will travel to #China this weekend to work together with their Chinese counterparts to prepare scientific plans for identifying the zoonotic source of #COVID19. @DrTedros

“An inquiry that presupposes — without evidence — that the virus entered humans through a natural zoonotic spillover and that fails to address the alternative possibility that the virus entered humans through a laboratory accident, will have no credibility,” said Richard Ebright, a molecular biologist at Rutgers University in New Jersey.

“To have any credibility and any value, an investigation must address the possibility that the virus entered humans through a laboratory accident and must also address the further possibility that the ability of the virus to infect humans was enhanced through laboratory manipulation — ‘gain-of-function research of concern’.”

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However, after sequencing the full genome for RaTG13 the lab’s sample of the virus disintegrated, he said. “I think they tried to culture it but they were unable to, so that sample, I think, has gone.”

According to Daszak, the mine sample had been stored in Wuhan for six years. Its scientists “went back to that sample in 2020, in early January or maybe even at the end of last year, I don’t know. They tried to get full genome sequencing, which is important to find out the whole diversity of the viral genome.”

However, after sequencing the full genome for RaTG13 the lab’s sample of the virus disintegrated, he said. “I think they tried to culture it but they were unable to, so that sample, I think, has gone.”

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Deutsche Bank 1/2: Moving forward, the key variable for the global economy is now how swiftly a vaccine becomes widely available.
World Of Finance

We expect widespread vaccination to begin by next summer and to proceed over the following year or more. 

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Currency Markets at a Glance WSJ
World Currencies

Euro 1.1683

Dollar Index 94.193

Japan Yen 105.12

Swiss Franc 0.9217

Pound 1.2703

Aussie 0.7120

India Rupee 73.6355

South Korea Won 1164.75

Brazil Real 5.4723

Egypt Pound 15.75

South Africa Rand 16.8549

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It's a Weird World Where FANGs Are a Haven Asset @markets
World Of Finance

What was going on? FANG popularity in large part rests on the perception that they are defensive. Thanks to their entrenched competitive position, and relative immunity to the pandemic, they are thought to offer safety. Meanwhile, the banks are the polar opposite. Aided by a positive economic cycle, banks also benefit from higher bond yields, which are nowhere to be seen. This weekend brought news of a fresh dose of scandal, with leaks of filings to the U.S. Treasury detailing some $2 trillion in suspicious transactions. That helped bring U.S. banks’ share prices back down. European banks, which had been performing slightly better, had an even more brutal day:

Thus it makes sense to look at Monday’s trading as a return to caution over the economy, after a few days when the move out of the FANGs had, counterintuitively, indicated cautious optimism. Meanwhile the bond market remained spectacularly calm. There was great excitement in March when the 10-year Treasury yield hit the “devil’s number” of 0.666% on the anniversary of the day in 2009 when the S&P 500 hit its low for this century of 666. Since then, the 10-year yield has oscillated ever more tightly around that 0.666% level:

This is strange because the Federal Reserve isn’t yet formally attempting to control 10-year yields, despite widespread speculation that it will start to do so before long. And views on inflation, usually a key component of nominal 10-year yields, have gone through huge changes during the .666 era. The following chart shows breakeven inflation rates for the next 10 years, and the 5-year 5-year forward rate, which shows expected inflation for 2025 to 2030:

survey found that on a range of “optimism” indicators, investors were as hopeful as they had been since the end of 2016, at the beginning of the Trump presidency:

There is still no coronavirus vaccine (and the latest news has been discouraging). A much-feared “second wave” appears to be under way in Europe. Can people really be this optimistic? 

Maybe not. David Bowers of Absolute Strategy suggests the survey shouldn’t be taken as signaling a true belief in a reflation trade. Instead, it shows investors are looking for how to hedge any possibility that the Fed is successful. As he puts it, this is about answering the question: “How do I make myself safe?” (Much the same was true of the rush to the FANGs earlier in the year.) 

Meanwhile, the most critical question concerning the chance of a strong economic recovery is approaching an answer: Will there be a “second wave” of the coronavirus? 

The question is much subtler than it was six months ago, when it was probably correct for a blindsided world to respond to a new and fast-spreading disease by shutting down. Now, there is greater knowledge, and much more complexity. So it is perhaps a little unnerving that the key test case on the “second wave” will be decided on by the U.K.’s prime minister, Boris Johnson.

To simplify a sprawling debate, the case for a lockdown is contained in these figures, shown here in a chart from Capital Economics. New Covid cases per capita are higher than they were at the worst of the spring in both Spain and France while they are rising menacingly in the U.K.:

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#Zambia has just asked Eurobond holders if it can delay some upcoming interest payments until mid-April next year. @TheTerminal @markets @PaulWallace123
World Of Finance

A restructuring was expected (Zambia's finances are in a bad way). But the bonds are still dropping on the news. 

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Nigeria Central Bank cuts its key rate for the second time this year by 100bps down to 11.5%. @akcakmak
World Of Finance

Must have been a tough decision given stubbornly high inflation around 13%, long-awaited Naira devaluation (or, convergence of different rates) and slow/negative economic growth.

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Angola negotiates $6.2 billion debt relief from creditors: IMF

Angola will receive $6.2 billion in debt relief over the next three years thanks to agreements lined up with three of its major creditors, the International Monetary Fund (IMF) said in a report released on Monday.

Angola said it was close to striking debt agreements with a number of Chinese banks and government agencies.

The African oil exporter has buckled under a rising debt burden following a sharp decline in crude prices and amid the economic fallout from the coronavirus pandemic.

“Although debt is sustainable, significant vulnerabilities remain,” the IMF said in its report. “Debt dynamics are highly sensitive to further oil-price volatility.”

In a letter included in the report, the Angolan government, which has already sought relief from official bilateral creditors under an initiative backed by the Group of 20 (G20) wealthy economies, acknowledged its precarious position.

“To the extent that unforeseen risks to achieving the medium-term debt target materialise, we will act to mitigate those risks, including by seeking additional debt relief from a wider group of creditors,” it said.

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by Aly Khan Satchu (www.rich.co.ke)
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September 2020

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