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Target missed

Good morning! The Australian government missed its self-selected target of 4 million people vaccinated by the end March by around... 3.3 million people. When you get to select your own KPIs and still miss them by 83% it's not a great look. More on Australia's vaccine debacle in the Corona Wrap below. 👇

Please note that this will be the last Brekky Wrap until Tuesday. Have a happy Easter!

Market Wrap

Tech soars on the back of stimulus

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

The Nasdaq was the big winner in the US last night, up 1.5%, after it was revealed that the Big Biden Infrastructure Stimulus (BBIS) contains around 25% tech-related spending.

More US stimulus: The $US2 trillion (over 8 years) BBIS was announced overnight, including plenty of upgrades for "roads, bridges, and public transit", but also "takes a sweeping definition of the word 'infrastructure,' expanding long-term care for older adults through Medicaid, banning exclusionary zoning, and investing in community-based violence reduction programs, among many other things". We're not sure what a lot of that has to do with fixing up bridges but OK...

China PMIs: China's official manufacturing PMI rose to a three-month high of 51.9 in March from 50.6 in February. A reading above 50 indicates expansion, below 50 represents contraction. The sub-index for the construction sector surged to 62.3 from 54.7 in February due to warmer weather, infrastructure stimulus and a hot coastal property market (e.g. Shenzhen property prices are up 16% y/y).

Corona Wrap

Shifting the goal posts

A mostly-empty vaccine hub in Victoria.
A mostly-empty vaccine hub in Victoria. Herald Sun/ABC Melbourne

After missing its March target – which was only selected in January – the Australian government has given itself an extra month, targeting 4 million people vaccinated by the end of April. That's also when it plans to have 4,000 GP clinics administering the vaccine.

Good luck: Australia set a new daily record of around 73,000 vaccinations yesterday, which the health minister boasted was "accelerating exactly as intended". The government's new April target means it needs to administer about 110,000 vaccines per day. However, barely any vaccines are administered on holidays and we're heading into a 4-day long weekend with ANZAC day still to come, meaning a more realistic requirement is probably around 200,000 a day.

200,000 also happens to be the government's long-term daily target, under the assumption it would already have those 4,000 GP clinics up and running. That's 50 vaccinations per clinic, per day. We don't know about you, but whenever we've visited a GP clinic they're almost always behind schedule – and that's before COVID-19 vaccinations get added to their workload.

In other words, there's Buckley's chance the government get close to hitting its revised target, either. Someone should really show these people how to use a calculator.

Boggles the mind: Why does the government refuse to use Australia's network of pharmacies, which has been the most successful part of the vaccine rollout in the United States? It really is amazing how even with several months to prepare and hard, real world evidence from around the world about what works and what doesn't, they've still managed to botch it.

Elsewhere: Germany and Canada both suspended use of the AstraZeneca vaccine for people under the age of 60 and 55, respectively, because of the unproven possibility of a risk of rare blood clots that might kill some people. In the meantime, the coronavirus will keep spreading and actually kill some people. Are health authorities incapable of running a simple cost-benefit analysis?

Econ Wrap

Liquidity and leverage

Markets have become increasingly fragile.
Markets have become increasingly fragile. Disciplined Entrepreneurship/Bill Aulet

What do the collapses of billion hedge funds (e.g. Archegos), global financiers (e.g. Greensill), the ongoing GameStop fiasco, surging crypto, equity and housing prices have in common? Liquidity and leverage, according to an interesting article by Stephen Bartholomeusz yesterday:

"When you've got tens of trillions of ultra-cheap dollars (and euros and yen and other currencies) flooding the global financial system it shouldn't be surprising that they find their way into some odd corners, enabling behaviours (like securitisation of reverse-factored debt) that would have been perceived as overly risky in a pre-pandemic, let alone a pre-GFC environment."

More to come: With yields in the doldrums, investors have been incentivised to hunt capital gains in all corners of the globe, even in previously 'risky' asset classes. However, as Bartholomeusz notes, what's low-risk today could easily become risky with even small policy changes from central banks and/or governments.

The end-game: Nassim Taleb has a book called 'Antifragile', in which he writes that "depriving these systems of volatility, randomness, and stressors will harm them. They will weaken, die, or blow up. We have been fragilizing the economy, our health, political life, education, almost everything ... by suppressing randomness and volatility".

Markets may be setting new records every month but it won't take much to bring them crashing down, as the global fiscal and monetary response to the pandemic has made them exceedingly fragile.

Elsewhere: The number of people seeking bankruptcy in the US fell 22% in 2020 relative to 2019. However, commercial bankruptcy filings rose 29%. Perhaps targetted support for businesses affected by lockdowns, rather than indiscriminate cash handouts, would have been a more appropriate policy response?

Tech Wrap

Facebook slides into payments

Facebook is finally getting into fintech.
Facebook is finally getting into fintech. Financial Times

Brazil's central bank approved Facebook's request to allow WhatsApp users to send payments to each other using the Visa and Mastercard card networks. Facebook first tried back in June 2020 but was rejected, only for the central bank to launch its own instant payments system in November, called Pix.

Brazil is just the start: Facebook has been trying to get into fintech for years, even announcing a cryptocurrency called Libra in 2019 that morphed into Diem in December 2020 and then quietly faded away into obscurity. WhatsApp is Facebook's logical vessel for payments and it will be hoping to capitalise on network effects – its 2 billion global users – to finally crack the fintech scene, despite the fact its competitors (including the Brazilian central bank) have a healthy head start.


  • GameStop is taking advantage of its meme status, recruiting Amazon executive Elliott Wilke, who will serve as the company's new chief growth officer. It's a shame Prince Harry wasn't available to be the new chief impact officer.
  • Facebook and Google are building two new undersea cables, Bifrost and Echo, linking the west coast of the US to Indonesia and Singapore, via Guam. The cables will supposedly increase transpacific internet capacity by 70%. No doubt Australia can free ride on its existing Singapore connection – perfect for streaming 4k Netflix, if only the NBN were capable...