Relevant and even prescient commentary on news, politics and the economy.

COVID-19, Moderna Therapeutics mRNA Vaccine, and Crichton

I understood how some combinations of drugs work in attacking Covid-19 with one drug acting as an ionophore allowing another drug to enter a cell and attach to Covid RNA stopping its replication. I found this nice chart on National Geographic offering up an educational semi -medical and microbiologist depiction of how Moderna’s new vaccine mRNA gives the human body the ability to attack Covid.  I duplicated the chart with the original wording on Power Point. Click on either chart to make them larger. 

Where we are today, Some history, and Where this is going

Morderna’s mRNA has moved into a Phase III Clinical Trial stage testing in the treatment of Covid-19. It is considered to be more successful than the other drugs and it is being fast-tracked (Operation Warp-Speed [or “Tribble Infestation”]) by the administration. On May 18 of this year, Moderna Therapeutics announced preliminary findings that healthy subjects had responded to mRNA vaccine by producing “neutralizing antibodies” which is how the vaccine works in the treatment of Covid. The antibodies made by the immune system prevent infection by the coronavirus.

When a virus infects a body, the immune system scrambles to recognize and create a response. The more traditional results of vaccine development is the introduction of an inactivated or weakened form of a virus or introduce one of the virus’s viral proteins to the body. The immune system responds to the introduction by producing antibodies to counter the vaccine, recognizing particular proteins of the virus. Those antibodies can fight future infections as long as the virus does not evolve.

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The Combination of Things

What about all the forest fires in the West? The most proximate cause of these fires is high temperatures along with associated lightning and high winds; both of which, directly or indirectly, can easily ignite a fire in tinder dry forests.

Beyond beyond being dry, many western forest are far from being healthy. There are large areas in the southern Sierra Nevada Range where the forest are dead and gone; they were the first to go. There is less damage to the forest as one goes farther north; still, going east on Highway 108 up over the Sonora Pass, it is not unusual to see forest areas where upwards of half the trees are dead or dying. Most are dying from infestations of bark beetles. Healthy trees can survive bark beetles, but these trees were first weakened by long periods of drought. The damage has being worsening for decades.

Drought is not new in the West; there is ample scientific evidence of at least two extended periods of drought in California over the past 1200 hundred years. There is the possibility that we are entering such a period now. It is far more likely that what we are seeing is what has long been predicted by climate Change Models. Speaking of models, has everyone seen ProPublica’s, ‘New Climate Maps Show a Transformed United States’ https://projects.propublica.org/climate-migration/ ? Poor Texas. Near the end of the piece, future predictions down to every county in the US. And the models will only get better at predicting with more and better data.

Recently, the media has followed up Trump’s assessment that it is all a forest management problem by attributing the fires to both Climate Change and bad Forest Management Practices; i.e., by straddling the possibilities. Wouldn’t do to offend anyone, now would it? When speaking about Forest Management Practices, we hear experts, politicians and pundits speak to the need to adapt controlled burn like methodologies used by the Native Americans. That was then and this is now. Did Native Americans attempt to do controlled burning during past extended periods of drought and, if so, what were the results?

Wouldn’t it make more sense to develop Forest Management Policies based on the Climate Change Models? No doubt, there are those in the United States and California Forestry Departments doing just that.

If we ignore it?

Wouldn’t it make more sense to address the cause of all those things that were the ’cause’ of the fires? Australia doesn’t have a forest management problem; Australia is burning up because of Climate Change. California, Oregon, and Washington don’t have a forest management problem; they are burning up because of Climate Change. We are all Australians now.

It’s not going away.

Gotta say it; these are not all forest fires. Like Australia, the burn areas of the Santa Rosa and Lake Berryessa, … fires would be better described as range land than forest land. Paradise area? Both. Foothill towns in California, Oregon and Washington bordering between range land and forest, some with old narrow mining era roads, are scary places these days.

And what about the emails,” she asked? Why did she feel compelled to ask that? Did she know about Whataboutism? About the association of whataboutism with the Soviet Union that began during the Cold War? When, as the regimes of Josef Stalin and his successors were criticized by the West for human rights atrocities, the Soviet propaganda machine would be ready with a comeback alleging atrocities of equal reprehensibility for which the West was guilty. Was it to claim an equivalence? If so, an equivalence to what?

This Whatabout came at the end of a news story that wasn’t about Hillary’s emails; it was about the other side’s candidate. Was the Whatabout meant to show impartiality? Must news be impartial? How can news be equivalent?

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Real retail sales gains join industrial production in sharp deceleration

Real retail sales gains join industrial production in sharp deceleration

Two days ago we saw that gains in industrial production had decelerated sharply in August. This morning we saw the same thing with real retail sales, one of my favorite indicators.

Nominal retail sales were up +0.6% in August. Meanwhile, July’s reading was revised downward by -0.3%. Since in July and August consumer inflation was up +0.6% and +0.4%, respectively, that means revised *real* retail sales rose +0.3% in July and +0.2% in August. This means that the net result over two months was lower than previously thought for the month of July alone.

Nevertheless real retails sales did establish a new record high, above any reading from before the pandemic:

Historically consumption has led employment (/2) by several months (albeit with lots of noise), and has an even closer relationship with aggregate hours (all shown YoY below):

 

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Jones v USPS

In Jones v USPS, the Postal Service provided weekly service performance data since the beginning of the year. This is the most complete picture of on-time performance that we’ve seen since the mail delays became an issue earlier this summer. The data set is discussed in this post. There was also a hearing today in the Jones case. We hope to have more on that later.

In the Washington case, an amicus brief was filed by the County of Santa Clara, the City of Columbus, and Thirty-Eight Local and Tribal Governments. The brief argues that the operational changes made by the Postal Service impede delivery and receipt of vote-by-mail, absentee, replacement, emergency, military, and overseas ballots, voter registration material, and outreach and education efforts. They also create significant burdens for officials administering elections and interfere with tribal government functions.

In the Washington case, the Postal Service filed a brief in opposition to the plaintiff’s motion for a preliminary injunction. As noted on Law360,”Between arguing that the states’ concerns were overblown and pointing to regulations that say the Postal Regulatory Commission and the Washington D.C. Circuit Court have exclusive jurisdiction over such complaints, the USPS said the court should not grant the proposed injunction to undo changes that have already been made.”

“This case is now about plaintiffs’ attempts to have this court oversee the day-to-day operations of USPS, based on a claim that courts have analogized to a ‘Hail Mary,’ to right wrongs that do not exist,” the brief said. “Plaintiffs’ legally deficient claims, arising from unsupported fears about the potential actions of USPS, do not warrant the extraordinary relief it seeks.” See the Law360 article for more details.

Lawsuits against DeJoy, USPS & Trump over mail delays and election mail, Save The Post Office, Steve Hutkins, September 16, 2020

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Industrial production improves in August, but with sharp deceleration

Industrial production improves in August, but with sharp deceleration

If the jobs report is the Queen of Coincident Indicators, industrial production is the King. It, more than any other metric, is found at the turning points where recessions both begin and end.

This morning’s report of industrial production for August shows that the recovery from the bottom of the coronavirus recession has come close to stalling out.

Overall industrial production grew by 0.4%, while July was revised higher by 0.5%. Manufacturing production grew just under 1.0%.  July was likewise revised higher by 0.6%. Here are the overall totals:

The good news is that manufacturing production has gained back almost 70% of its decline from March. Overall production has gained a little over half of its decline.

 

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The Seven-Percent Solution: The Not-So-Secret Plan to Downsize the Postal Service

Steve Hutkins authors Save the Post Office on issues affecting the Post Office.

First, a disclaimer. The following analysis is largely speculative. It’s not based on insider information. The evidence comes from news articles, government reports, legal filings, and a few leaked internal USPS documents that were published on postal news sites. The analysis could be totally wrong.

The hypothesis is simply this: The Postal Service has embarked on a plan to reduce labor costs by about 7 percent. That represents approximately 67 million workhours, or the equivalent of about 33,000 jobs.

The analysis will also suggest that all the things we saw earlier this summer — the removal of blue collection boxes, the decommissioning of over 700 sorting machines, trucks leaving plants partially loaded or empty, letter carriers heading out on their routes with mail left behind, a presentation saying that overtime was being eliminated, post offices closing for lunch or earlier in the day, rumors of post offices closing completely — were not, as the Postal Service claimed, isolated incidents, business as usual, or the result of miscommunication between headquarters and local managers.

Rather, they were part of a comprehensive plan to eliminate tens of millions of workhours and downsize the Postal Service in significant ways.

The Seven-Percent Solution

According to its 10-K financial report, in FY 2019 the Postal Service experienced a total “controllable” loss of $3.4 billion. That doesn’t include another $5 billion or so in losses related to pension and retiree health care costs that the Postal Service didn’t pay.

To balance the books, the Postal Service can increase revenues, raise prices or cut costs. Revenue increases are difficult, since First Class letter volumes are falling and Congress has limited what new forms of business the Postal Service can expand into.

The Postal Service has already introduced a temporary rate increase on commercial parcels through the holidays, and it will raise rates again next year. But price increases on letters and flats are limited by law and increases on parcels are constrained by competition in the marketplace. In the past, increasing rates has basically helped the Postal Service keep up with rising costs but done little to reduce the losses.

That leaves cutting costs as the only way to make significant inroads. Given that nearly 80 percent of the Postal Service’s expenses are related to labor, cost cutting means one thing, reducing workhours.

In FY 2019, compensation and benefits costs totaled $47.5 billion. To offset a loss of $3.4 billion, the Postal Service would need to reduce these costs by about 7 percent.

Back in July, District Managers and Plant Managers around the country began sharing Standup Talks in which they outlined the downsizing plan to employees. The talks identify exactly how many workhours need to be eliminated in each district in the three areas of postal operations: mail processing, delivery, and post offices.

The talks indicate that there is a comprehensive plan to reduce workhours across the board by about 7 percent. Even though it hasn’t been stated outright, that goal appears to be a key element of the Postmaster General’s transformative plan for the Postal Service.

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Is Mail Delivery Taking Longer?

Is U.S. mail delivery becoming slower for First Class mail? A New York Times analysis of more than 28 million pieces of mail found that on-time delivery declined noticeably in July and August. This comes after PMG Louis DeJoy put cost-cutting measures in place. Delivery has sped up slightly since the summer but remains slower than earlier this year. Twenty-eight million pieces of first-class letters were tracked by SnailWorks. The results of the analysis shows how on-time delivery declined noticeably in July after the arrival of the new and politically aligned PMG Louis DeJoy and the start of his mandated policies to trim transportation costs.

It appears mail delivery did slow down in July and August.

As you already know, timely mail delivery has become a key part of the 2020 election outcome due to an unprecedented number of Americans who are likely to vote by mail to avoid visiting a polling place during the pandemic.

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Coronavirus dashboard for September 14: cases in the Midwest surge; the Northeast still lags Canada

Coronavirus dashboard for September 14: cases in the Midwest surge; the Northeast still lags Canada

 

Total US cases: 6,519,573
Average cases last 7 days: 34,744
Total US deaths: 194,071
Average deaths last 7 days: 733

 Source: COVID Tracking Project

I continue to expect the pandemic to wax and wane in relative terms at least until next January 20, as the public reaction in various States varies between panic and complacency.

Let’s start by comparing the rates of cases and deaths in the US with the North American standard – Canada:

In contrast with the US, Canada averaged 18 cases per day per million people in the last 7 days (vs. 105 for the US), and 0.1 deaths (vs. 2.2 for the US). That is what we could have as well if there were competent Federal leadership.

 

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The 2020 Presidential and Senate nowcast: the races congeal

The 2020 Presidential and Senate nowcast: the races congeal

 

Here is my weekly update on the 2020 elections, based on State rather than national polling in the past 30 days, since that directly reflects what is likely to happen in the Electoral College. Remember that polls are really only nowcasts, not forecasts. They are snapshots of the present; there is no guarantee they will be identical or nearly identical in early November.

Let’s begin with Trump’s approval. After several weeks of improvement, this week Trump’s approval eroded very slightly – but remains right in its normal range for the past 3 1/2 years:

 

It is safe to say that Trump’s post-convention, “law and order” bounce has plateaued (note there have not been any big BLM demonstrations in the past week that have produced pictures of burned-out businesses).

In any event, here is the updated map through September 5. To refresh, here is how  it works:

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