Like cats stuck in a tree
By Justin Pyvis – Delivered on 18 Oct 2021

Good morning! Congratulations to those in Victoria, where the latest lockdown will finally end on Thursday night as the state approaches the 70% fully vaccinated mark (people aged 16+). 👏 A bunch of restrictions will also be eased earlier than initially expected due to "revised Burnet [Institute] modelling", such as larger patron caps for certain businesses.

There was also further good news in NSW, which hit the 80% second dose mark (those aged 16+) on the weekend. That means from today restrictions will ease further, although regional travel has been delayed until 1 November to give them a chance to catch up to the city folk.

But the good news didn't stop there: the NSW government announced it will do away with quarantine – zero, zip, zilch, nada, nothing – for fully vaccinated travellers on 1 November, which is also when the international borders will open to fully vaccinated Australians and their families. For the first time parents of Australian citizens and permanent residents will also be included in the government's definition of "immediate family", making Christmas and New Year reunions possible.

Finally, Hobart's 3-day snap lockdown should end today if no further cases are discovered. For those unaware, Hobart was locked down after a 31 year-old man from NSW somehow fled hotel quarantine, subsequently tested positive for COVID-19 and showed an "unwillingness to cooperate with contact tracers". 🤦‍♂️

Fully vaccinated population (aged 12+)

NSW
ACT
TAS
VIC
NT
SA
QLD
WA
Markets

Daily % change

AUD/USD

74.1

-0.1%

AU Yield (%)

1.66

+3.4%

US Yield (%)

1.58

+3.8%

ASX200

7,362

+0.7%

S&P500

4,471

+0.7%

Brent (bbl)

84.8

+0.7%

Gold (oz)

1,768

-1.6%

Iron ore (t)

123.0

-0.5%

Bitcoin

59,572

+3.6%

Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries.

The US S&P500 added 0.75% on Friday on the back of strong gains to the big banks following the release of extremely positive September quarter reports. The rise meant the S&P500 had its best day since March and its best week since late July.

Locally, the ASX200 finished the week 0.69% stronger due to the NSW reopening optimism, stronger commodity prices and rising US futures late in the day.

Economy

Downbeat: Consumer confidence in the US fell again in October but remains slightly above the 10-year low set in August. Inflation expectations rose in the short-term (4.8% over the next year) but fell over a 5-year timeframe to 2.8%, although that's still 0.5 percentage points above where it was pre-pandemic.

Perhaps most interestingly, the Biden administration's honeymoon appears to be over as "confidence in government economic policies has significantly declined during the past six months".

Crypto climbing : The price of a bitcoin hit $US60,000 for the first time since April, as rumours circulate that the US Securities and Exchange Commission could soon approve the first bitcoin futures exchange-traded fund.

Retail lift: US retail sales unexpectedly increased 0.7% in September, reflecting "consumer resilience and escalating prices" (this series is not inflation-adjusted).

Feature
Like cats stuck in a tree

The United States led the world in vaccinating its population against COVID-19 until July 2021, at which point just about every other developed country overtook it in terms of the share of their populations fully vaccinated. In the coming days, even Australia will move ahead of the US!

Stepping back: Sociologist Zeynep Tufekci recently detailed several possible reasons for vaccine hesitancy in the US, but we're just going to focus on three.

One, mistrust in institutions and authorities leading to questions such as "I'm not sure it's safe. Was it developed too fast? Do we know enough?", along with concerns about side effects and yet-undiscovered dangers.

Two, the relatively poor state of the US healthcare system, where 25% of the US population lack a "primary health care provider to turn to for trusted advice". Going to the doctor can be "stress-inducing" in a system where having "even a minor illness can produce unpredictable and potentially huge expenses". Tufekci believes this is particularly true for "Black people (and other minorities)", which might explain some of their relatively low rate of vaccination.

Three, "some of the unvaccinated are a bit like cats stuck in a tree. They've made bad decisions earlier and now may be frozen, part in fear, and unable to admit their initial hesitancy wasn't a good idea, so they may come back with a version of how they are just doing 'more research'".

Tufekci cites this final reason as to why vaccine mandates have been working quite well – most people don't "truly believe" the vaccines are dangerous, or they would have quit when their jobs mandated it. Instead they provide "people previously frozen in fear to cross the line", "a face-saving" excuse to get vaccinated.

Why this matters: Only about 4% of the US population surveyed said they didn't think they would benefit from a vaccine, yet around 25% of adults are still unvaccinated. Not understanding why those people remain on the fence could "play into the hands of those who'd like to reduce all this to a shouting match".

Looking forward: Thankfully Australia appears immune to many of the pitfalls that, at least at first glance, look unique to America. For example, some Australian states are already miles ahead of the US – in NSW nearly 80% of the total population have already received a first dose (91% of those aged 12+).

However, vaccine hesitancy could still take hold in COVID-free states such as WA, where the self-interest incentive to get vaccinated is not as strong. There's a risk that the longer people wait, the more likely they are to join so many Americans in falling into the trap of becoming "like cats stuck in a tree".

The Wrap Up
    🏎️The 2022 Australian Formula One Grand Prix will return to Melbourne, having been cancelled in 2020 and 2021 due to the COVID-19 pandemic.
    🌍ScoMo announced he will now be attending the COP26 climate change summit in Glasgow next month, having previously said he was on the fence because "I've spent a lot of time in quarantine".
    🏭Australia's Deputy PM Barnaby Joyce said it's "highly unlikely" his party, the Nationals, will agree to Australia significantly increasing its 2030 emissions reduction target.
    🥝The Australian travel bubble (NSW and VIC only) with New Zealand's south island will resume tomorrow night.
    🗳️Former NSW Labor leader Jodi McKay will resign from Parliament after 15 years, becoming the fifth NSW MP to resign within a month.
    💊Not wanting to be left behind again, the Australian government secured 500,000 courses of Pfizer's yet-to-be-approved COVID-19 oral antiviral drug, along with another 15,000 doses of antibody-based therapy Ronapreve.
    💉The US will accept travellers with 'mixed-dose' vaccinations, as the practice is "increasingly common in other countries so should be accepted for the interpretation of vaccine records".
    🧙‍♂️After 23 years in the job, the city of Christchurch cancelled its contract with The Wizard of New Zealand, the only state-appointed wizard in the world.
    ☢️Finland joined France, Poland, Hungary and the Czech Republic in lobbying the European Union to categorise nuclear power as sustainable.
    🛂Australia's new international travel vaccine passport will be available on MyGov from tomorrow.
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