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Although virologists were quick to confirm regardless of the efficacy of the vaccine, even against the so-called English variant of Covid, the market delivered his verdict.
At least the first grade. And while waiting for the resource, it is necessary to recognize that, for once, indices and spreads turned out to be more realistic than policy. It is difficult, without the reassuring moral persuasion that the authorities must exercise on public opinion in similar situations, in fact to be able to believe that it is really possible to be certain regarding the response of the serum about a mutation of the virus that is only now beginning isolate. At least outside the UK. And, above all, already in a not entirely reassuring context of emergency vaccine administration, with control authorities from half the world requesting certification in record time and with the breath of the same policy on their necks.
It is therefore necessary to take note of a more disturbing reality: the carelessness with which the British government has treated the situation until the next day, despite the health authorities. already in October they had warned compared to the aggressiveness of the ongoing mutation in the area. For Boris Johnson, however, it was “cruel to deny Christmas to citizensAnd then pubs and restaurants reopen. Loosening of the lock. Except then closing everything. Hurry, Italian style. And, as the isolated case in Celio seems to show, when the oxen seem to have escaped the compound, via Heathrow and Gatwick, but that’s not enough.
the Daily telegraph, a admittedly conservative newspaper with excellent connections and contacts in the British government, relaunched the news yesterday that the current Level 4 status expected for London and the southeast of the country – in fact, a hard lockdown – could last until Easter, before the need to vaccinate at least 20 million citizens to guarantee the minimum required of herd immunity. In short, either in Downing Street lies an irresponsible incompetent or something is wrong.
And indeed, the symbolic transposition of the impending political Brexit seems almost metaphorical, even karmic, through the forward flight of its health proxy: Britain isolated from Europe, pull apart. Almost a pandemic anticipation of the No deal increasingly likely, in view of the final deadline of December 31. Or, perhaps, this new hotbed of risk and general fear, capable of breaking the markets Despite news of the federal deal on the US stimulus package that came overnight, it could lead to another postponement, aanother stop and march over the negotiation.
Also, for the most terrifying and urgent force majeure cause of all. Without, therefore, nobody loses their face politically. Legitimate doubts, although some may mistake them for conspiracy.
Because this graph is clear:
Source: Deutsche Bank
In Deutsche Bank’s survey of 984 fund managers at the end of November and released last week, not just the top three the most feared tail risks for 2021 they were reserved for Covid in its various forms but on the highest step of the podium was the fear that is being founded in these hours: a mutation in the virus that made the vaccine ineffective (or less effective). In fact, breaking expectations of its impulse effect – already quoted by many indices and spreads, net of central banks – on the prospects for world economic recovery.
And this second graph shows how another survey of fund managers, the 200 per month surveyed by Bank of America, showed that expectations for the first concrete evidence of this leverage effect on the economy were already expected for the second quarter of 2021.
Source: Bank of America
What if by chance it turns out that the English variant is resistant to the vaccines produced and tested so far? One thing is certain: the market would not like. No way. And to confirm this, the latest report from Goldman Sachs, dedicated to the critical issues related to the very high expectations that the indices are placing in the final solution to Covid. These two graphs show so many faces of the potential risk in the markets.
Source: Goldman Sachs
Source: Goldman Sachs
If the first shows how the entire world relies on a large and diverse number of vaccines for near-global coverage, each with its own schedule and quantities available, the second graph seems the most worrying. Based on calculations made by the investment bank just two weeks ago, when it appeared that there were no real and effective criticalities regarding the serum’s effectiveness, Britain should have succeeded. 50% of the population vaccinated at the beginning of March: Already today, the health authorities speak of the risk of closing until Easter to vaccinate 20 million people of the 68 million citizens of the entire United Kingdom. Worse yet, the prospect ofEuropean Union, which, again according to projections, would not have reached that quota before mid June.
Based on in the best case, However. That is, without macroscopic and structurally sanitary hooks like the English variant, but perhaps only logistical and organizational. For the United States, however, a middle ground: Goldman Sachs predicted 50% of the vaccinated population in mid-April. Gross, however, of what has emerged in recent days. That is, difficulties in distribution and storage, side effects in vaccinated patients and, above all, a consequent increase in the rate of rejection of vaccination. Even and especially among medical and paramedical personnel, as happened at the Loretto Hospital in Chicago, where 40% of the employees refused the vaccine.
But the question seems much more widespread than the specific case recorded in Illinois: According to a national survey conducted by the American Nurses Foundation of more than 13,000 nurses, 36% of those interviewed confirmed their rejection of the vaccination hypothesis. The reason? Side effects still unknown and too quickly to get to the administration phase. A big problem.
Already contemplated by Goldman Sachs in its study, given that the last graph shows as if in emerging countries the main perceived criticality was the supply of available serum, in the developed one it would have been the call of confidence:
Source: Goldman Sachs
The risk of a low positive response to the vaccine, a deficit in demand from the population. In short, the English variant of Covid runs the risk of becoming the true black swan..
Especially in light of this graphic (POST THE VACCINE_EUPHORIA GRAPH HERE),
Source: Arbor Research & Trading
From this it can be inferred that almost all of the market rally unleashed in recent weeks, net of an almost immobile Fed and an ECB concerned only with keeping sovereign spreads stable, is due precisely to the so-called Vaccine Euphoria, transposition – at the level of call operations and increase of the profit multiples expected for 2021 – of the near certainty of a light at the end of the tunnel. To which we must always remember the great rotation away from growth and towards value that brings with it a macro perspective of normalization, further amplified by the victory of Joe Biden, immediately “greeted” by a renewed tension in the technology sector.
Today, however, it was a macro-related commodity such as oil that crashed lower: a clear symptom of a renewed fear for recovery, almost in real time with the global explosion of the British case. Is there really a totally irresponsible person in Downing Street, unable to grasp the possible consequences of his underestimation, in front of the British health authorities who had already been warning since mid-October about the increase in the contagion rate and the danger of an closing? Or this last image is really becoming the only one on which governments seem to want to focus their emergency policies of cyclical containment of the economic consequences of Covid, a continuous intervention of restrictions and openings that is very reminiscent of the controlled deflation of certain bubbles of values?
Perhaps, thus, implicitly and simultaneously, transmitting a message not even encoded to the central banks of reference: do not dare to reduce the support programs. Not surprisingly, the Fed rushed to lift the buyback ban, just two days after the board meeting in which it reiterated the criticality of the coming months and the consequent need for caution.
Dietrology and conspiracies have no residence here, the question seems very practical. Either the world is still sailing in plain sight in the worst crisis since WWII, despite the triumphalist rhetoric on vaccines, or someone is using their “blind spots” to postpone the rationem network with too many quarters of zero interest rates. and rains. Tertium non datur.
