An impossible task
By Justin Pyvis – Delivered on 23 Aug 2021
Good morning! You may have noticed we got a fresh lick of paint 🖌️. If you spot any formatting oddities (things where they probably shouldn't be), please get in touch by replying to this email. But enough about us.

The major pandemic news over the weekend was the extension of Sydney's lockdown for a month to at least the end of September. Announcing the news, Premier Gladys Berejiklian conceded that Delta is here to stay:
"None of us like to see case numbers going up, but unfortunately this is the reality of the Delta strain... We accept that Delta is here, we accept heading to zero across the nation, especially once you open up and live freely will be an impossible task."
Yep – if you don't nip the Delta variant in the bud, it's already too late. Gladys is setting herself up for an almighty clash of heads against certain state Premiers when the 70-80% vaccination target is reached, and ScoMo's handling of it could well be the difference in the forthcoming federal election.

Moving south, things got heated in Melbourne after its lockdown was widened to include regional Victoria, although they've been spared the curfew (for now 😬). Childcare centres were also closed to all but children of "authorised workers", affecting up to 170,000 kids (and their parents!).

Thousands of Melburnians subsequently took to the streets in protest...

Israel vaccine efficacy data showing Simpson's paradox That's one way to spend a Saturday. SBS/AAP
Over in the west, WA closed its border with NSW to all individuals "except in extraordinary circumstances", essentially limiting travel to government officials, politicians and "specialists".

A unified Australia by Christmas is looking more and more like an impossibility. 😔
Markets

Weekly % change

 

AUD/USD

71.5

-2.6%

 

 

10Y Bond

1.08

-11.5%

 

 

ASX200

7,461

-2.2%

 

 

Brent (bbl)

65.0

-7.9%

 

 

Gold (oz)

1,783

+0.4%

 

 

Iron ore (t)

138.9

-12.7%

 

 

Bitcoin

48,489

+1.5%

 

Note: Brent oil, gold bullion and iron ore prices are the second futures contract.

The US S&P500 added 0.81% to close out the week with decent gains to the FAANGs (Big Tech), but still ended the week in the red for the first time in three weeks.

Locally, the ASX200 (-0.05%) finished flat as iron ore prices recovered some of their huge mid-week losses, helping the likes of Fortescue to finish in the green. However, commodity producers were generally weaker as concerns about the global outlook continue to grow, led by possible financial turmoil in China.
Economy
Producer pressures: Producer prices in Korea (+7.1%) and Germany (10.5%) both came in hotter than expected in July, suggesting inflation concerns are still very much alive.

Retail slump: Sales at retail outlets in the UK fell a sharp 2.5% in July from the prior month, with the Office for National Statistics blaming heavy rainfall, the Euro 2020 boost in June (raising the base) and declining food sales as lighter restrictions "meant consumers had more opportunities to spend outside retail".

Safe as houses: Canadian house prices "accelerated again to a new record" in July, according to the Teranet-National Bank Composite House Price Index. The index is up 17.8% on an annual basis. 📈
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Feature
Counterintuitive statistics
Feature image Protection against infection is falling but not hospitalisations and deaths. FT/Oxford/ONS
Data from Israel appear to suggest declining vaccine efficacy against severe disease from the Delta variant, leading to calls for booster shots. Some policymakers have already acted – US President Biden confirmed that boosters would be offered to everyone 8 months after their second jab. Austria and Croatia will only consider people fully vaccinated if their most recent dose was within 270 days, suggesting boosters will soon be required.

Why this matters: Vaccine supply is still an issue in much of the world. While that will ease over time, in the short-term rolling out booster shots in wealthy nations is somewhat controversial – so much so that the World Health Organisation (WHO) recently called for a moratorium on boosters until the end of September.

Breaking it down: The urgency to get people booster shots may be due to counterintuitive statistics. While it's true that 60% of all patients currently hospitalised for COVID-19 in Israel are fully vaccinated, it's also true that:

– 80% of those aged over 12 are vaccinated (the denominator effect).
– 85% of those unvaccinated are aged under 50, so are less vulnerable.
– People aged over 50 are much more likely to develop respiratory problems, even in 'normal' times.

Controlling for these confounding factors shows that Pfizer is still doing its job in Israel, offering 91.8% and 85.2% protection against severe disease for those aged under and over 50, respectively (rather than 67.5% when the two cohorts are aggregated).

Israel vaccine efficacy data showing Simpson's paradox Simpson's paradox in effect. Jeffrey Morris
This counterintuitive phenomenon is called Simpson's paradox, and Jeffrey Morris did a good job explaining it in relation to the Delta variant in Israel here.

Looking forward: COVID-19 booster shots are an inevitability, just as they are with Hepatitis A, Tetanus, Typhoid,... it's a long list. But if vaccine efficacy is declining as rapidly as some influential people (perhaps mistakenly) believe, it creates problems for the world for as long as vaccine supply remains tight.

For one, it may slow down Australia's reopening plans – many of our front-line workers and most vulnerable were vaccinated as early as March, which puts them in the 8-9 month window by Christmas. Add children into the mix and just like that, the reopening timeline has blown out by another couple of months...
The Wrap Up
  • 🏉 Finals footy will be played in Tasmania for the first time, with Launceston playing host to two of the four week 1 fixtures.
  • 🥝 New Zealand's Delta variant outbreak spread to Wellington over the weekend and daily case numbers are now into the 20s...
  • 🛂 Singapore will open quarantine-free travel to fully vaccinated people from Germany and Brunei in September.
  • 🏉 The third and final Bledisloe Cup match between the Wallabies and All Blacks was cancelled after the Kiwis decided against sending their players to Perth. Rugby Australia found out via the media. 🤦‍♂️
  • ⛔ ACT chief minister Andrew Barr said authorities should wait "two to three weeks" after reaching 70-80% vaccinated before relaxing restrictions.
  • 🐱‍💻 The Swedish government seized a drug dealer's bitcoin. The price of that bitcoin increased before it was auctioned off. The Swedish government was ordered to return the difference – over $US1 million!
  • 🤖 Elon Musk announced that Tesla plans to launch a "Tesla Bot" humanoid robot prototype next year. Friendly reminder that Elon has on multiple occasions promised millions of self-driving robo-taxis – by 2020.
  • 🧒 Every state should be doing this (send nurses to the schools!): the ACT is planning to vaccinate children as young as 12 before the end of the school year.
  • 👴 In Hong Kong, just 24% of those aged 70-79 are vaccinated – the second lowest cohort. The lowest? Those aged over 80...
  • 💉 Australia's stockpile of unused AstraZeneca vaccine doses has passed 6 million.
  • 🎓 The University of Virginia disenrolled 238 students for not complying with its COVID-19 vaccine mandate.
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