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The COVID recession may kill more Americans than the COVID virus will

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The COVID recession may kill more Americans than the COVID virus will


The economic effects of COVID-19 could prove deadlier than the disease itself. 

So says just-released research, which concludes that the total lives lost to the virus in the U.S.  may “far exceed those immediately related to the acute COVID-19 critical illness…. [T]he recession caused by the pandemic can jeopardize population health for the next two decades.”

The new working paper, by authors at Duke University, Harvard Medical School, and the Johns Hopkins University business school, focuses on the almost instantaneous unemployment of millions of workers in March and April. The unemployment rate jumped from near the lowest in 50 years to the highest since the current measurement system began in 1948. While it has come down, it’s still at its highest rate since the recovery from the 2008-2009 financial crisis.  

The authors wondered how unemployment affects mortality and life expectancy years later. Little research on that question existed, so they conducted their own analysis using 67 years of data about unemployment, life expectancy, and death rates from the Bureau of Labor Statistics and the Centers for Disease Control and Prevention. They were able to separate the effects of the unprecedented 2020 unemployment spike from other factors that affect mortality and life expectancy.

Their main finding: Over the next 20 years, 1.37 million more people will die than would have died without the unemployment shock the pandemic caused, a number the researchers call “staggering.” They find also that “excess deaths will disproportionately affect African-Americans.” The implied increases in deaths per 100,000 individuals over the next 20 years are 32.6 for African-Americans vs. 24.6 for white Americans. In all, about 3.2% more people would die in the U.S. over that span than would have died without the spike in joblessness.

These new findings further complicate the excruciating quandary facing policymakers. Lockdowns and other restrictions impose economic suffering but save lives. If it turns out that the economic suffering, while saving lives in the near term, also costs lives in later years, then what is the right policy response? The researchers emphasize that “we do not want to suggest that policymakers should refrain from ordering lockdowns as necessary lifesaving measures”; rather, policy should also provide “enhanced health and economic support for the most vulnerable portions of the population.”

In the U.S., that support has been provided, at least partially, through stimulus checks, extra unemployment insurance, and other measures enacted last spring and in December. So could the new paper’s predictions of excess deaths be overblown? Maybe, but other factors suggest they could be underestimated. 

On the upside, we’ve never experienced a recession that reversed as quickly as this one, which struck suddenly but then bounced back sharply within months. The economy might now recover much faster than it did after past downturns, easing the damage to life expectancy. In addition, the researchers note, “This is the first recession with the Affordable Care Act in place, a critical resource to mitigate the effects of unemployment on citizens’ well-being.”

But the potential downside in this singular crisis is also formidable. The researchers catalog the dangers: “Based on emerging data, it is likely that the limited access to health care during the lockdown, temporary discontinuation of preventive care interventions, massive loss of employer-provided health insurance coverage, and the lingering concern of the population about seeking medical care out of fear of contracting COVID-19 will impact mortality rate and life expectancy even more severely” than predicted.

The new findings pose one more challenge for policymakers and everyone else. We mostly know who is dying of COVID-19 itself, and those depressing numbers, each accompanied by a name, drive a sense of urgency as we fight back. In coming decades, we will never know exactly whose lives have been shortened by the economic distress the pandemic caused. But that suffering will be just as real and shouldn’t be forgotten or ignored.

More health care and Big Pharma coverage from Fortune:

  • The biggest conspiracy theories of 2020 (and why they won’t die)
  • Timeline: From the first coronavirus cases to the first vaccinations
  • Trump hyped Verily’s coronavirus testing tool. It led to less than 1% of all tests in 2020
  • Commentary: Cracking the code of biological aging could solve America’s health care crisis
  • Data delays aren’t slowing the global rollout of a Chinese COVID-19 vaccine

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Business

What does big business need to do to earn your trust?

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What does big business need to do to earn your trust?


A peaceful transfer of power doesn’t mean that threats of political violence—and difficult conversations about it—have ended. Tim Ryan, the chair of PwC U.S. weighs in with some advice below. (Hint: The actual challenge leaders are facing is proving that they’re trustworthy.)

But first, here’s your Inaugural poet Amanda Gorman-inspired week in review, in Haiku.

“Where can we find light 
in this never-ending shade?”
Asked by a new voice,

in a new moment,
free from the belly of a 
beast that stalks us all.

It took a poet
to capture the promise of
a hard-won hill, climbed

by many on the 
backs of a justice-seeking
few. Unfinished, yes

we are. But here’s a
good place to start: Pay all the
poets what they’re worth.

Wishing you a lyrically peaceful weekend.

Ellen McGirt
@ellmcgirt
[email protected]



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Business

A Loon comes down to earth

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A Loon comes down to earth


This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox. 

It was an admittedly loony project in the first place: Loon, a much-hyped project aiming to deliver internet via helium balloons, will be shuttered, Google’s parent company Alphabet said late Thursday.

Formed nearly ten years ago within the tech giant’s “moonshot”-focused research lab, X, the hope was to use the balloons to send internet service into areas that have limited to no internet access. While the numbers are hard to come by, an estimated 3 billion to 4 billion people in the world today still can’t shop online (or read this newsletter).

So it makes sense that many tech giants and flashy billionaires view the practice as a major business opportunity: Elon Musk has Starlink; Richard Branson and SoftBank have OneWeb; Jeff Bezos’ Amazon has Project Kuiper. While the aforementioned projects have focused around sending satellites into space, Loon focused on high-altitude balloons. 

But as with moonshot bets, it doesn’t always work.

“While we’ve found a number of willing partners along the way, we haven’t found a way to get the costs low enough to build a long-term, sustainable business,” wrote Alastair Westgarth, CEO of Loon in a blog post. “Today, I’m sad to share that Loon will be winding down.”

Here’s a good Wired breakdown of the dynamics: Yes, there are many who lack internet connection in the world. But many of these underserved populations can’t afford Loon’s services or are simply uninterested in the internet. Meaning no financial merits for Alphabet—and so went the project.

But Loon’s creators were aware of this possible future. “The idea may sound a bit crazy—and that’s part of the reason we’re calling it Project Loon—but there’s solid science behind it,” wrote Mike Cassidy in 2013 of the project’s launch. Cassidy led the venture back then.

I can’t help but also wonder—what happened to the capital from its external investors? SoftBank-backed HAPSMobile injected $125 million into the business in 2019 as the duo worked on airborne internet connectivity equipment. I personally have no answers there.

Finances aside, Loon has not been without its successes. It ran a pilot project in Kenya. It also managed to create a navigation system run by A.I.

HOW CONFIDENT ARE YOU? TAKE A SURVEY: For the 12th year in a row, Term Sheet is teaming up with Semaphore to conduct its annual confidence survey of venture capital and private equity investors. In years past, hundreds of you have chimed in to share your views on investing. I’ll publish the results in February. Take it here.

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Business

Bitcoin bombs lower, touching the dreaded $30,000 range

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With $30,000 Bitcoin in sight, analysts wonder how high it could go


This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.

Happy Friday, Bull Sheeters. A risk-off mood has descended over markets as COVID worries intensify. From Tokyo to Frankfurt, there’s red on the screens, and U.S. futures aren’t doing much better. Meanwhile, the Bitcoin bears are out in force; the digital currency is having another rough session.

Below, in the weekly “By the Numbers” section, I get more into the wild ride of the crypto trade, and whether this is a mere blip, or the sign of more pain to come.

In Postscript, I make good on my promise from earlier in the week. You have homework this weekend, dear reader.

But first, let’s see what’s moving markets.

Markets update

Asia

  • The major Asia indexes are closing out the week with a whimper, with the Hang Seng down 1.6%.
  • The much anticipated Ant Group IPO could be worth less than 700 billion yuan ($108 billion)—or, half the size of what underwriters were expecting just a few months ago.
  • The China-Australia trade spat has cost the latter about $3 billion—not a huge sum, but it’s putting the pinch on Australian winemakers and other exporters.

Europe

  • The European bourses stumbled out of the gates with the Stoxx Europe 600 down 0.4% at the open.
  • The COVID numbers out of the U.K. are truly frightening, and now PM Boris Johnson is signaling the current lockdown measures could extend into the summer. The pound is lower this morning.
  • The deadly winter coronavirus surge knows no borders. France announced that any visitors from aboard—including EU nations—will have to present a negative COVID-19 test to get into the country. And Portugal has suspended all flights to and from the U.K.

U.S.

  • The U.S. futures point to a weak open after a mixed trading session on Thursday. Still, all three major exchanges look as if they’ll finish the week in the green.
  • The Nasdaq closed at a fresh all-time high yesterday, helped by big gains from Intel. Alas, the chipmaker is down 4.6% in pre-market trade this morning after disclosing mixed results—record sales, but a bottom-line miss.

Elsewhere

  • Gold is lower, trading around $1,860/ounce.
  • The dollar is up as equities falter.
  • Crude is down, with Brent steady around $55/barrel.
  • Bitcoin has had a brutal week. It’s down a further 8.7%, trading below $31,000. At one point, it had broken $30k.

***

By the numbers

26.2%

Bitcoin bulls, I’ll give you the good news first. The notoriously volatile digital currency, is up 6.3% so far in 2021. Before you get out the cigars, take a peek at the past two weeks. Since hitting its all-time high of $41,940 on Jan. 8, it’s down 26.2%. That’s solidly in bear market territory. The rapid plunge has triggered all kinds of warnings about how low it could go. But cryptocurrency investors aren’t sweating it—they’ve lived through wild swings in the past. Some even see the swoon as a perfectly understandable and necessary correction. With all this in mind, Fortune‘s Robert Hackett answers the question on a lot of investors’ minds these days: Should you add Bitcoin to your portfolio in 2021?

97,528,800

Tomorrow marks the one-year anniversary of the Wuhan lockdown, a news headline that shocked the world at the time. Now stay-at-home orders, border closures and travel restrictions are commonplace the world over. According to the New York Times COVID-19 tracker, official reports show 97,528,800 people have been sickened around the world with at least 2,090,500 deaths. The numbers are worse than anybody thought in those early days. And the near future doesn’t look much better, with the U.S. Centers for Disease Control and Prevention warning of a further 100,000 deaths over the next few weeks. The stock market rally aside, it’s been a brutal year.

44.4%

There’s another recent milestone that means a lot to me. Jan. 21, 2020 was the launch date of the Bull Sheet. The Nasdaq closed that day at 9,370.21, which means the tech-heavy index is up 44.4% since I’ve been writing this newsletter. Had you put 10 grand on QQQ that day, you’d be looking at a pretty impressive return… I want to thank you all for your support in year one. I’m looking forward to the ride in 2021.

***

Postscript

As I mentioned earlier this week, my inbox filled up with requests for our ribollita recipe. I’m a man of my word.

Before I share the ribollita recipe, I should explain a bit about its origin. It falls squarely in the cibo povero, or peasant food, category. And it’s Tuscan through and through. You may find something similar across the border in Umbria or here in Lazio, but the Tuscans perfected it.

We pay homage to all those nonne toscane in strictly sticking to the Tuscan version. Our recipe was inspired by the version you find in and around Pienza (I can smell the pecorino cheese whenever I think of that gem of a hill town).

Here goes:

First, a warning… this is a recipe that may trip up kitchen novices. But don’t get discouraged. You’ll earn serious points with loved ones for the effort. And once you’ve perfected it, you’ll be the envy of your investing club.

Ingredients: jar of passata di pomodoro (tomato paste) 400g, white beans (dry) 350-400g, leeks 250g, carrots 80g, 2-3 potatoes, green cabbage 250g, chard 300g, Italian black cabbage 300g, pig bone, laurel leaf, sprigs of fresh rosemary+sage+marjoram, salt.

Step one: the night before you decide to cook the ribollita, soak your white beans overnight.

Step two: You’ll need two big pots. Put your soaked white beans + pig bone + laurel leaf in one of the two big pots. Let’s call this Pot 1. Fill with 2 liters of water and cook over medium heat. Skim off the muck that floats to the top every now and then.

Step two: about 45 minutes later, you can start on your second pot. Let’s call this Pot 2. You start here with your sofrito. Pour in olive oil and cubes of your leeks, carrots and potatoes, plus salt. Let them cook for a bit, then pour in the jar of passata del pomodoro. A good five minutes later, your mix will have thickened.

Step 3: Ladle the boiled broth from the Pot 1 into Pot 2. Add the rest of your cabbages, diced, into Pot 2. Add the sprigs of fresh rosemary+sage+marjoram at the end. We usually tie the sprigs together on a thin string that we can then fish out of the cooking broth at the end. I usually sprinkle a bit more salt in Pot 2 at this point.

Step 4: After you’ve ladled out all the broth from Pot 1, you’ll be left with the pig bone and the white beans. Discard the bone. Scoop out the remainder of the white beans and blend half of those white beans into a paste. Add the white bean paste and the remainder of the whole white beans into Pot 2.

Step 5: At this point, you’re down to a single pot, Pot 2. Let Pot 2 cook for another 45-60 minutes under medium heat.

Serve: Place into your bowl a big slice of toast or, even better, a piece of stale bread; then pour your soup on top. Add a bit of pecorino romano shavings, and a dollop of olive oil.

Pair with Sangiovese or Montepulciano d’Abruzzo, a big-bodied Italian red. You won’t find me drinking a Pino with this dish.

Please share your ribollita photos with me!

***

Have a nice weekend, everyone… But first, there’s more news below.

Bernhard Warner
@BernhardWarner
[email protected]

As always, you can write to [email protected] or reply to this email with suggestions and feedback.



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