Herd immunity claim challenged in the Amazon

. Sep 29, 2020
amazon No distancing, no masks. Manaus port. Photo: Jair Ferreira Belafacce/Shutterstock No distancing, no masks. Manaus port. Photo: Jair Ferreira Belafacce/Shutterstock

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Today, we cover the rising number of coronavirus cases in the Amazon. The disenchantment of markets with Jair Bolsonaro. The president’s son called a corrupt “ringleader.” And the possible end of Brazil’s IPO frenzy.

Amazon coronavirus herd immunity hopes at risk as cases rise

Last week, a yet-to-be-peer-reviewed study published on medical platform MedRxiv suggested that the Brazilian city of Manaus

— the biggest in the Amazon, and Brazil&#8217;s first to experience a full-scale healthcare collapse in the country — had reached the level of so-called &#8220;herd immunity&#8221; against Covid-19. University of São Paulo researchers reached that conclusion by combining data of decreasing deaths with an analysis of locals&#8217; blood samples — estimating that up to 66 percent of residents had developed coronavirus antibodies.</p> <ul><li>Now, however, cases are rising once more, challenging the researchers&#8217; conclusion. Infectious disease experts have identified a surge in cases among younger, wealthier populations.</li></ul> <p><strong>Coronavirus in the Amazon. </strong>Manaus, the biggest city in the Amazon, is a textbook example of what happens when the coronavirus is allowed to spread unchecked. The city never imposed lockdowns, and most people and businesses simply ignored social-distancing rules. At one point, the city was left without any available hospital beds, nor enough coffins to bury the dead.&nbsp;</p> <p><strong>Why it matters.</strong> The case of herd immunity in the Amazon is yet another example of how little we know about Covid-19 and the SARS-CoV-2 virus.</p> <div class="flourish-embed flourish-scatter" data-src="visualisation/3872122" data-url="https://flo.uri.sh/visualisation/3872122/embed" aria-label=""><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>1 million deaths.</strong> The world has reached the somber milestone of 1 million confirmed Covid-19 deaths, with a worrisome finding: while it took six months to reach 500,000 deaths, that amount doubled in half the time, showing that the pandemic is not slowing down.</p> <ul><li>Fourteen percent of all Covid-19 deaths worldwide occurred in Brazil. However, we will never know the full human toll, due to underreporting and undertesting.</li><li>Of the 10 countries with the highest number of coronavirus deaths per capita, five are South American nations. The list is topped by Peru, a country that took the pandemic seriously and enforced lockdown even before many European countries did so. But massive inequality and an informal economy hindered any effort to hold people in confinement in order to lower the curves.</li></ul> <div class="flourish-embed flourish-hierarchy" data-src="visualisation/3871265" data-url="https://flo.uri.sh/visualisation/3871265/embed" aria-label=""><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/3871637" data-url="https://flo.uri.sh/visualisation/3871637/embed" aria-label=""><script src="https://public.flourish.studio/resources/embed.js"></script></div> <hr class="wp-block-separator"/> <h2>Bolsonaro&#8217;s &#8220;creative accounting&#8221; spooks markets</h2> <p>On Monday, the government announced the creation of Renda Cidadã (Citizen Income), a welfare initiative slated to replace world-renowned cash-transfer program Bolsa Família. But the administration&#8217;s plan to finance the scheme came across as odd to most observers: the money would be taken from a fund to finance basic education, as well as from the postponement of so-called &#8220;<em>precatório&#8221;</em> payments, or government IOUs.</p> <p><strong>Why it matters.</strong> The move was poorly received in Congress, with many lawmakers considering the solution a way to doctor the budget — for which former President Dilma Rousseff was impeached in 2016.</p> <p><strong>Markets.</strong> On Monday, the Ibovespa stock market index dropped 2.41 percent due to investors&#8217; fears of fiscal imbalance. Since August, the index has fallen 10.3 percent. The Brazilian stock exchange has lost BRL 437 billion (USD 77.2 billion) over the last two months, as President Jair Bolsonaro hints toward a laxer fiscal policy to cater to his own electoral goals.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3872266" data-url="https://flo.uri.sh/visualisation/3872266/embed" aria-label=""><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Meanwhile … </strong>The government was unable to reach a consensus with congressional leaders around the tax reform, and is expected to delay its proposals until after municipal elections in November. That essentially buries any hope of advancing this agenda before 2021.</p> <hr class="wp-block-separator"/> <h2>President&#8217;s son to be charged with embezzlement, money laundering</h2> <p>Rio de Janeiro prosecutors have concluded their investigation into money-laundering schemes operated from within the state&#8217;s legislature and are soon expected to present charges against Senator Flávio Bolsonaro, the president&#8217;s eldest son. He served as a state lawmaker between 2003 and 2018.</p> <ul><li>Mr. Bolsonaro will be charged with embezzlement, money laundering, and criminal association. He is accused of forcing staffers to surrender part of their salaries — which were allegedly collected by his former aide, family friend and ex-military policeman Fabrício Queiroz, who will also be charged.</li></ul> <p><strong>Why it matters.</strong> Jair Bolsonaro ran for office in 2018 on an anti-corruption platform. Now, prosecutors are about to declare his eldest son the &#8220;ringleader&#8221; of a corrupt ploy.</p> <p><strong>Cash.</strong> The senator is believed to have pocketed at least BRL 2.7 million in cash from the scheme.</p> <hr class="wp-block-separator"/> <h2>Brazil&#8217;s IPO frenzy cooling off</h2> <p>The Brazilian market for initial public offerings was booming this year —&nbsp;despite the pandemic. In July, as many as <a href="https://brazilian.report/newsletters/brazil-weekly/2020/07/13/scientists-in-brazil-kick-off-groundbreaking-covid-19-research/">50 companies were preparing to go public</a>. By August, companies had raised <a href="https://6minutos.uol.com.br/minhas-financas/empresas-ja-captaram-r-103-bi-com-ipos-em-2020-mais-que-2019-inteiro/">more money</a> through IPOs than in the entirety of 2019. However, the winds seem to have changed, and many big groups are giving up on their plans to sell stock.&nbsp;</p> <ul><li>On Monday, energy conglomerate Cosan announced it was pulling the plug on the IPO of gas unit Compass after demand appeared to be underwhelming. Last week, state-owned bank Caixa called off the long-awaited IPO of Caixa Seguridade, its insurance subsidiary, while investment bank BR Partners postponed its offering.</li><li>Other firms, such as home builder Cury, reduced share prices in order to appeal to investors.</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/3872340" data-url="https://flo.uri.sh/visualisation/3872340/embed" aria-label=""><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>What they are saying.</strong> Companies cite &#8220;unfavorable market conditions&#8221; when justifying their decisions to postpone IPOs.</p> <p><strong>Why it matters.</strong> Financial markets around the world appeared to be largely unaffected by the sanitary and economic conditions created during the Covid-19 pandemic, but fears of a second wave in multiple countries has, once again, made investors jittery.</p> <p><strong>Competition.</strong> Marco Harbich, a strategist at Terra Investimentos and a columnist for <strong>The Brazilian Report</strong>, also points out that with so many companies going public, investors are getting pickier about where they put their money.</p> <ul><li>As Brazil&#8217;s benchmark interest rates are at their lowest ever, appetite for riskier investments has grown. Seventeen Brazilian companies have made their debuts on the stock market so far this year, with another 17 holding follow-on offerings. Still, there are another 31 IPOs being analyzed by the Brazilian Securities Commission (CVM).</li></ul> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Environment.</strong> After promising to &#8220;run the cattle herd&#8221; through Brazil&#8217;s Amazon — as well as over environmental regulations —, Environment Minister Ricardo Salles approved the extinction of two resolutions protecting mangroves and sandbanks near Brazil&#8217;s coast. These areas will now be opened up for real estate and other commercial ventures.</li><li><strong>Startups.</strong> VTEX, a systems supplier for <a href="https://brazilian.report/tech/2020/08/21/how-brazilian-e-commerce-survives-postal-workers-strike/">e-commerce</a>, is now valued over USD 1 billion, making it Brazil&#8217;s latest unicorn. The company&#8217;s last investment round raised USD 225 million, pushing VTEX&#8217;s valuation up to USD 1.7 billion. VTEX&#8217;s surge happened as retail companies push to digitize their sales systems amid the Covid-19 pandemic. Its client list includes giants such as AB Inbev, Nestlé, and Walmart.</li><li><strong>Election. </strong>After Brazil&#8217;s leading media group Globo said it would only hold <a href="https://brazilian.report/newsletters/brazil-daily/2020/09/15/two-months-until-brazil-2020-election-day-what-is-at-stake/">mayoral debates</a> in cities where parties agree to a limited number of participants — citing fears of coronavirus infections — another major media company will also pass on showing televised debates. Network SBT said it wouldn&#8217;t host any first-round debates due to the sheer number of candidates (in São Paulo alone, there are 14 contestants). SBT, however, will go ahead with plans for a November 21 debate during the runoff stage.&nbsp;&nbsp;</li><li><strong>Oil and gas. </strong>State-controlled oil firm <a href="https://www.investing.com/equities/petrobras-pn-historical-data">Petrobras</a> informed in a securities filing that it has reached a deal with Total to take over the French company&#8217;s operations in deepwater oil reserves 120 kilometers from the coast of Amapá, in the North of Brazil. The reserves were being operated by a consortium made up of Petrobras (30 percent), Total (40 percent), and BP (30 percent). Now, Petrobras&#8217; stake could reach 70 percent if BP shows no interest in raising its involvement.</li><li><strong>Election.</strong> Prosecutor General <a href="https://brazilian.report/power/2020/09/24/brazil-prosecutor-general-unbiased-professional-bolsonaro-lackey/">Augusto Aras</a> asked the Supreme Court to investigate Congresswoman Joice Hasselmann — a mayoral candidate in São Paulo —&nbsp;for allegedly creating fake social media accounts in order to attack political adversaries. In April, an audio message in which Ms. Hasselmann instructed an aide to &#8220;create several profiles and go in &#8216;studs up&#8217; on Twitter and Instagram&#8221; was leaked. The congresswoman has been one of the most outspoken critics of what she calls the Bolsonaro family&#8217;s &#8220;social media militia.&#8221;

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