Inmune

I am fairly convinced that Alzheimer’s Disease is an auto-immune condition. I am totally convinced that it is the most economically costly disease which is facing the world right now. INmune Bio, Inc. has an FDA approved treatment. The FDA approve drugs based on their not being harmful, rather than on their being actually effective, which should dampen anyone’s enthusiasm. A lot of other biotech firms are working along the same lines as INmune, it seems.

The problem with biotech is that you have to spend a decade studying molecular biology at university to have a hope of understanding what they are doing, let alone decide if it is going to work, and (even more importantly) lead to a treatment that is superior to their competitors. Even with lots of data, the future performance radically uncertain.

Investing in INmune Bio therefore is more like buying an out-of-the-money option. But with such radical uncertainty around this field, it may well that this option is under priced.

Job shortages in the US

The US has more jobs than workers. This is a good thing, for labour. Maybe not such a good thing for capital. I cannot see how this will not give rise to inflation. It feels like the late 1940s, ‘50s, where National Service and the slow release of labour from the conscripted army kept wages high and inflation up. Just as then, the government had borrowed far too much, such that the lenders (largely UK savers) would have to take the pain. Now it is the Bank of England, but in reality that’s just us anyway, so the pain will be more evenly spread. Of course, the pensioners will not be spared, but that’s OK, they have had a good run.

This is not an original idea. The Economist has been pointing it out for a long time. Here is another article on the same topic.

Chinese Internet stocks getting hammered

With what has happened to Jack Ma, plus Didi getting pulled from the Chinese app store, it’s not suprising that $KWEB is being hammered. Down 44% from its ATH in Feb this year, it has further to go, IMHO.

Real yields on US Junk Bonds has turned negative

For the first time ever.

How long this can go on is anyone’s guess. But it can’t go on forever.

Now people are flying again, airline stocks finally start on a descent path

Weekly wrap

Yields continue to decline, and with them USD.JPY. Oil prices have been weak, in spite of support from declining inventories. Probably a reaction to OPEC decisions (whatever they were). Precious metals showed some signs of life, but their price action is definitely not healthy. Global equities had a short lived dip on Thursday but bounced back rapidly. Equity vols spiked in sympathy, but soon dropped again by Friday.