Please read my December 21, 2020 post, Mutant SARS-CoV-2 Viruses, Perceived Risk, Actual Risk, which has aged reasonably well since its publication. The only factor I continue to under-estimate at all instances is the notion of “back to normal”, which from the onset of the Diamond Princess I have been consistently wrong with.
I have very consciously been trying to avoid any political discussions of COVID-19 on this site, except when things interfere with the financial markets.
For the most part, the “known unknowns” have been well priced into equities.
However, we might have a game-changer that will require some re-thinking.
Insert today’s scare headline, the B.1.1.529 variant:
The issue here is regarding the psychology of the effectiveness of COVID-19 vaccinations.
Most people believe they work. Indeed, because of this popular support, governments have been able to coerce those that do not into taking them.
The issue is that just like influenza and HIV, you might be able to take something to address the clinical symptoms (which the existing vaccinations have done) versus dealing with the transmission of SARS-CoV-2.
Without preventing the transmission of SARS-CoV-2, vaccinations to mask clinical symptoms of COVID-19 are a delaying tactic at best.
The best analogy I can make here is the advent of computer viruses and anti-virus software. Initially there were programs (McAfee and Norton Anti-virus) that you ran in MS-DOS to search executables for specific code snippets (containing viruses). They worked initially (sometimes producing false positives), and you had to get updates to tell the program the new code snippets of new viruses that were coded and spread around. However, technology advanced (such as auto-modifying code) and conventional anti-virus software is practically useless as a form of computer security (it is beyond the scope of this post to discuss this fascinating matter). Anti-virus software continues to be sold today and all it serves is to slow down the computer system and provide a false sense of protection.
Likewise in the biological world, mutations are rapidly rendering COVID-19 “anti-virus software” (vaccinations) obsolete. You might be able to protect against the “old school” strains, but for the new software versions (variants), you have much less protection.
This is the result of having a population monolithically vaccinated with the same anti-virus software. It doesn’t take much of a code modification to work around it.
What isn’t discussed about the B.1.1.529 variant is whether the severity profile is more or less severe than Delta. This remains to be seen.
Unlike computer viruses, which are engineered to have a specific impact, biological viruses are positively selected for transmissibility, and not for clinical severity. Indeed, too severe clinical symptoms would work against transmissibility, just as it did for SARS-CoV-1.
The changing psychology will be increasing public awareness that the existing COVID-19 vaccinations do a minimal job of protecting against transmission. They were fighting yesterday’s battle. It will be sold to the public as a necessary “first step” to fighting COVID-19, with much more to go, even though it is pretty evident the “vaccinate everybody” strategy that was taken has proven to be incorrect. The correct strategy was to vaccinate those that are at high risk, but now that mostly everybody is vaccinated, there is going to be a new strain that will dominate and this might be B.1.1.529. The question at this point is whether this new variant exhibits increased severity of clinical symptoms.
In the past my ability to predict public reaction to SARS-CoV-2 has been terrible. If B.1.1.529 picks up, from historical reaction over the previous 18 months, the cultural of zero risk will force more sanctions, “to prevent the spread”.
Governments always want to be seen doing something, even if their actions have no effect on the outcome (e.g. outdoor mask mandates).
They will also never admit that their past strategies have been terrible to preserve whatever credibility they have remaining to implement new measures.
My guess at present is that the Covid-sensitive sectors which got hit from March to June of 2020 will probably face another dial-back. Until I see how B.1.1.529 evolves, I’ll reserve judgement on timing.
Thanks Sacha, appreciate the thoughts.
Would love your take on shorting/put options on the vaccine makers. Kind of surprised the stocks are moving up so much on this news. Still very early, so who knows where it goes, but if this mutant does prove vaccine resistant and spreads widely I think I’m more in your camp where I would expect it to be the end of the mass vaccination campaigns.
To roll out a modified vaccine and then repeat everything we just did over the past 6-12 months for a new mutant seems…well…kind of crazy. You keep chasing mutations with new compulsory vaccines forever?
This is exactly what governments will try to do. Think of the seasonal flu shot, except with coercive backing (take it or be a second grade citizen holed up in your basement forever). Whether it works or not is ultimately up to the populace (you’re seeing some serious signs of public opposition in various jurisdictions). This is inherently political.
As for economic impact on MRNA, I don’t have a good read on this at the moment. If I was forced to play this, NVAX short is more alluring but then again, the IV there is 110%+ for a good reason.
There’s a small flaw in the analogy of COVID with computer viruses.
COVID mutations arise because the disease remains active. The Delta variant and this new variant arose in countries with low vaccination rates. Lower the disease incidence through vaccinations, and you slow/eliminate the emergence of new mutations.
Apparently the individuals identified with the variant in question were vaccinated.
Your last sentence is confusing the disease with the virus. The vaccinations appeared to reduce (but not eliminate) transmission with the initial versions of SARS-CoV-2 but with Delta the effectiveness on reducing transmission appears to be below any threshold where it is effective in preventing the spread, as is evident in case data.
All analogies have limitations, in the case of old school computer viruses, new ones had to be manually programmed and introduced, while biologically with SARS-CoV-2, the ‘programming’ is done through random changes with those that can best survive successor immune systems becoming dominant over time. It was inevitable.
I hadn’t read that the omicron patients were vaccinated. Where is the source for that?
“…with Delta the effectiveness on reducing transmission appears to be below any threshold where it is effective in preventing the spread, as is evident in case data.”
Can you give me a source? Genuinely interested in what the data says. My impression was that places that saw a spike in cases (e.g. Manitoba, and B.C.) a few months ago were those that had lower vaccination rates than in say, Ontario.
https://www.timesofisrael.com/israel-detects-first-case-of-new-highly-mutated-covid-19-strain/
I don’t read Hebrew so you’ll have to fetch the Israel ministry of health source. Apparently there was a fourth that went back to Hong Kong as well from South Africa and they are only allowed to travel while fully vaccinated (in addition to testing negative on the PCR test before getting on a plane).
These are the reported cases. It could be (with high probability) that this ‘brewed’ initially in unvaccinated individual(s) especially given South Africa’s vaccination rate, but the whole point is that the existing vaccination status of people appear to convey a less than comprehensive protection against transmissibility of B.1.1.529.
Thanks for the source! I see now there’s also a report that one of the UK cases was also vaccinated.
p.s. it didn’t take long – we now officially have two cases in Canada.
Considering that the initial work done on establishing the existence of the variant happened nearly three weeks ago, it isn’t surprising that a dominant strain will literally be global at this point. Stopping international flights at this point invokes the cliche of closing the barn doors after the horses have escaped.
Yeah, it’s the barn door for sure. We might get a week of extra breathing room but that’s about it.
It makes sense that the new strain is highly transmissible. In S. Africa the vaccination rate is not high at all, but likely it is high enough to exert evolutionary pressure on the virus towards higher transmissibility. Fortunately there is nothing that is exerting pressure for higher morbidity, so if we’re lucky omicron won’t be a scarier virus.
This does raise a delicate political question though – if the virus is “mild” what’s the vaccine policy going to be? Half measures would just add more of the same evolutionary pressure on omicron. But full measures are only effective if it’s global.
There’s a business in my city that fired all unvaxed employees. A month later they have had 3 covid outbreaks all amongst vaxxed people. Seems the vax is like the masks more about people feeling safe then actually being safer. Byram Brittle, virologist at U of Guelph talked about how those blue masks aren’t capable of stopping covid. Took over a year for Tam to acknowledge the masks we’re wearing aren’t that useful.
I have no agenda I support people that are vaxxed just pointing out what I’ve witnessed.
It should be self-evident that medical masks convey very little (if not zero) protection aside from very short-term cases (e.g. if you are directly in the line of fire of somebody sneezing at you, then obviously you’d want them to be wearing a mask). Exhalation still escapes readily with contaminants. Properly fitted N95 masks will process this properly but they get very uncomfortable to wear after an hour or so and they need to be kept properly clean.
What is not discussed is the biological costs of wearing masks – you’re reducing your O2 intake from 21% to about 15% if you wear a mask properly, and about 16-17% if you are ‘loose’ with it (which totally defeats the purpose of wearing one in the first place) and your CO2 intake spikes up considerably. Your body has mechanisms to adapt to this but it does come at a cost. The narrative says that masks are zero-cost protection but this is quite incorrect.
The existing vaccinations offer some degree of effectiveness against severe disease but their advertised effectiveness against transmission was complete BS. Whether there will be the same effectiveness against severe disease with variants remains to be seen.
Well put. Just a little story about the impacts of masks. My wife works in the lab at the local hospital. They received new machines for measuring oxygen in blood and they use the workers as the baseline when they set the machines up to check calibration. This happened after the masks mandates. They all had low levels of O2 because everyone was wearing masks. So I agree there is a hidden risk to the masks but you’ll never hear that from the talking heads.
Thanks for all the work you put in Sacha, hoping one of these days I can stay awake long enough to make the zoom call.
The CDC advertises that the vaccine reduces transmission that’s true. Where is the evidence that they are wrong?
I never made such a claim. The direction of my claims is that the reduction of transmission itself is reduced to a point (primarily with variants) that makes vaccinations much less effective in this respect.
Vaccinations also appear to reduce symptomatic severity, one question is whether this will also wane over time with Omicron, and/or the ‘organic’ severity of symptomatic SARS-CoV-2. Time will tell.
Illuminating post Sacha thank you. I’m saying prayers and keeping fingers crossed for my Canadian E&P stocks 🙂
The new Omicron variant of the coronavirus results in mild disease, without prominent syndromes
said the chairwoman of the South African Medical Association
http://timesofindia.indiatimes.com/articleshow/87949404.cms
omicron is an anagram of moronic
The very sketchy preliminary indications at this point suggest that this is a high transmissibility, low severity virus, which if that is the case is the best possible news and probably the worst case for the pharma companies (they profit from deaths and severe disease, not coughs and a few days of bedrest).
This thread has some interesting (though early) speculation on omicron’s transmissbility vs immune escape profile. (from epidemologist Trevor Bedford who has proven to be pretty competent and level-headed throughout the pandemic).
https://twitter.com/trvrb/status/1466076761427304453
tldir – if his guesses are right, and I’m reading it correctly, there will be a lot more breakthrough cases.
Big missing question here is severity of disease, both in vaccinated and non-vaccinated.
For sure. I’ve been searching for the morbidity stats from S. Africa but no luck. They also say they’ll have the results of the antibody study within a couple of weeks.