Oriens #192
Noise
Markets are rising!!!!!! It’s a brand new week!!!!! Japan’s Topix 500 and the S&P Asia 50 climbed 1.10% and 0.31%, respectively. Europe’s Stoxx 50 climbed 0.87% at 7:47 a.m. EST. S&P 500 and NASDAQ 100 futures climbed 0.38% and 0.26%, respectively, at 7:52 a.m. EST.
On the virus et al.:
A new Moderna phase 2 study shows that half doses create immunity.
The humidity resulting from wearing masks may be one of the factors protecting mask wearers from being infected, according to the NIH.
Above the Noise
The World’s CO2 emissions closed 2020 slightly above their 2019 levels. We shut down the entire economy for months and enacted partial lockdowns around the World, and the impact on pollution was really minimal.
We can look at this by country or by sectors. Let’s start with countries. The most important story is China, whose CO2 emissions have been comfortably above 2019 since October, while most countries closed 2020 below or at 2019 levels. Hindsight is always 20/20, but it’s probably time to admit that China was right on how to deal with the virus: the dilemma between the economy and public health was always a false one. China fully locked down the economy for three months and reopened fully afterwards, and now enacts located lockdowns whenever there’s a burst of the virus. We are as skeptical about China’s official statistics as anybody, but if China’s mortality rates were close to, say, the U.S. we’d be talking about 5 or 10 million dead individuals, which no propaganda or censorship apparatus would be able to hide. Japan was another country that realized that the dilemma between lives and profits was nonsensical, and its GDP roared in Q4.
Let’s now look at emissions by sectors. The collapse in airline emissions is obviously real, but they’re so small in the aggregate, that their contribution to emissions reduction was negligible. The larger contributors to CO2 emissions really are the power and the industrial sector, particularly fossil-fuel energy generation, and the manufacturing of cement, steel and aluminum. On cement, steel, and aluminum, if we’re serious about climate change, we either green their production, or then we need to rethink real estate, infrastructure, and the entire construction sector. Here’s a proposal by the FT (long read) on how to produce “green steel”.
This Astral Codex post presents a series of fictional cryptocurrencies. Some of them sound ridiculous, but so did Dogecoin up to a month ago and it’s now going to the moon. This is obviously not investment or programming advice. Also on utopianism, the FT thinks that the empty shops in the UK will be repurposed as libraries, flats that alleviate housing shortages, and public libraries when the lockdowns end. In our view, a significant portion of urban real estate will be repurposed as Amazon warehouses or data centers.
Ruchir Sharma from Morgan Stanley Investment Management authored an OpEd at the FT making the optimistic case for emerging markets. His argument is based on the fact that emerging markets will have lower government debt levels than their advanced economies peers and a few of them are enacting some supply side reforms.
Sun Ray
Four pigs - Hamlet, Omelette, Ebony and Ivory - were trained to use an arcade-style joystick to steer an on-screen cursor into walls.
Pigs can play video games with their snout, scientists find
#govegan
Long Reads for the Weekend Stack
We strongly recommend this WSJ piece on micro nuclear reactors (MNRs). Nuclear is our preferred source of clean energy and MNRs are the best shot that the industry to reinvent itself and be less threatening to the public. During the last 18 months of his term, President Trump silently enacted the largest push of nuclear energy in recent memory and, if the price of the the URNM ETF is any guide, some gains were already made. We think the sector is poised for growth, particularly as MNRs become more widely adopted. Also by the WSJ, this piece presents companies and technologies to turn garbage into low emissions fuels.