Archive December 31, 2020

US stocks close tumultuous year at record high

US stocks finished 2020 with a gain of more than 16 per cent — well above the historical average — after a technology sector-led rally pulled Wall Street back from a brief bear market to set a record high in defiance of pandemic, recession and political upheaval.

The Nasdaq Composite, dominated by tech giants such as Apple, Microsoft, Alphabet and Amazon, gained more than 44 per cent this year to record its best performance since 2009, as work and consumer spending moved online.

The S&P 500’s 16.3 per cent annual gain compared with an average 11.8 per cent over the previous decade. It has now recorded a positive year in 14 out of the first 21 years of the century.

“It was a usually upbeat year in stocks, in contrast to an unusually difficult year for all of us,” said Jack Ablin, chief investment officer at Cresset Capital.

Activity in New York was muted on the last trading session of 2020 on Thursday, with many investors taking time off in the week between Christmas and New Year. The S&P 500 rose 0.6 per cent, while Nasdaq was 0.1 per cent higher.

The government debt market was similarly quiet, with the yield on the 10-year Treasury note edging lower to 0.91 per cent. That figure would have seemed implausible at the start of the year, though: it began at close to 2 per cent before the coronavirus pandemic prompted the Federal Reserve to slash policy rates and pump trillions of dollars into markets to protect the financial system and support a locked-down US economy.

“If one had told us that a pandemic would hit in February of 2020 and that markets would plummet and yields collapse, we would have agreed,” said Andrew Brenner, head of international fixed income at National Alliance Securities. “If one had then added that the Fed would have come to the rescue and gone ‘all in’ we would still be with you.

“But then to add that this would be of the best markets for equities and risk that we have ever seen, then you would have lost us.”

With very low yields on safe assets, investors were willing to pay more for companies with the prospect of fast-growing cash flows, particularly those whose businesses made big leaps in 2020.

Shares in Zoom Video Communications, for example, are up close to 400 per cent as videoconferencing replaced in-person meetings and family gatherings. Amid a scramble to upgrade technology infrastructure, semiconductor companies were also big winners. AMD shares doubled this year.

Apple, which in August became the first public company ever to be worth $2tn, ended the year up 81 per cent.

And then there were stocks favoured by both retail and institutional investors. The electric car maker Tesla — closing the year on a more profitable footing, with powerful growth prospects and now a place in the S&P 500 — is up about 750 per cent.

The rally broadened beyond growth stocks to more firmly embrace economically-sensitive stocks in November, following the first Covid-19 vaccine breakthroughs.

As a result, the energy and banking sectors have been the best performers in the last two months of the year, adding 28 per cent and 20 per cent, respectively. Still, it was not enough to offset the losses the two sectors suffered earlier; financials lost 4.1 per cent in 2020 and energy was done 37.3 per cent.

After the worst oil crash in decades earlier this year, the US benchmark West Texas Intermediate ended 2020 at $48.40 a barrel, down 21 per cent since the start of the year but just above the price needed by many crude producers to keep turning a profit.

The US dollar rose 0.3 per cent on Friday, as measured against a basket of currencies, but it is almost 7 per cent lower than at the start of the year, its worst annual performance since 2017.

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US hedge fund bids for Tribune Publishing in $520m deal

Alden Global Capital, a US hedge fund known for taking over distressed American newspapers, has unveiled a bid to acquire and take private the Chicago Tribune’s owner, valuing the publishing company at about $520m. 

The hedge fund, which already owns about 32 per cent of Tribune Publishing, offered to buy the newspaper group for $14.25 a share, an 11 per cent premium on the publisher’s closing stock price on Wednesday.

Alden has helped to lead the consolidation of the local and regional newspaper industry in recent years, making deep cost cuts at its titles to boost profitability and creating controversy along the way.

Employees of its publications have described the firm as “vulture capitalists”. Political leaders, such as Senator Chuck Schumer of New York, have argued that the hedge fund’s management of local newspapers is having a negative impact on American democracy.

If the acquisition is approved, the fate of the local US news business would tilt further into the hands of financial groups, after rounds of consolidation over the past decade. The newspaper business has been shrinking for years as online media grew and frothy print advertising revenues dried up, leaving local papers as targets for hedge funds and private equity. 

Through MNG Enterprises, which is a privately owned company controlled by Alden, the hedge fund has amassed a portfolio of more than 200 newspapers, including The Denver Post and The Orange County Register in southern California. 

“We believe that, as a private company, Tribune would be able to unlock significant strategic and financial value,” said Randall Smith, Alden’s founder and a former Bear Stearns banker, in a regulatory filing issued on Thursday. 

In the filing, Alden said the deal was subject to approval by a committee of independent directors and two-thirds of Tribune’s shareholders who are not associated with Alden. Apart from Alden, the company’s second-largest shareholder is Patrick Soon-Shiong, the pharmaceuticals billionaire who bought the Los Angeles Times and owns about 24 per cent of Tribune shares. 

In 2019 Alden made a hostile takeover bid to acquire USA Today owner Gannett for about $1.4bn. After fending off Alden’s offers for months, Gannett agreed to be sold to GateHouse Media, another rival newspaper owner.

Since failing to acquire Gannett the hedge fund has been trying to take over Tribune, which also controls the New York Daily News and The Baltimore Sun. In July Tribune agreed to give Alden three out of seven board seats as part of a truce to prevent the hedge fund from increasing its stake or launching a hostile takeover until after June 2021.

Alden, which is being advised on the transaction by the boutique investment bank Moelis & Co and the law firm Akin Gump Strauss Hauer & Feld, said on Thursday that it hoped to reach a definitive agreement with Tribune within two to three weeks.

Tribune could not be reached for comment. 

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Pfizer questions UK move to lengthen gap between Covid vaccine doses

Pfizer has criticised the UK’s decision to lengthen the gap between doses of its Covid-19 vaccine, saying the “safety and efficacy” of the new schedule had not been evaluated, as infections and hospitalisations continued to soar across the UK.

The rare intervention by the US pharma company came amid growing controversy over the move, with GPs complaining that they were having to cancel appointments and reassure anxious patients who had previously been told they needed the second dose to keep them safe.

“[Our] study . . . was designed to evaluate the vaccine’s safety and efficacy following a two-dose schedule, separated by 21 days,” the company said.

“The safety and efficacy of the vaccine has not been evaluated on different dosing schedules as the majority of trial participants received the second dose within the window specified in the study design.”

The new dosing guidelines, approved by the UK’s joint committee on vaccination and immunisation and unveiled on Wednesday, allow the second dose of both the vaccine that Pfizer developed with BioNTech, and the newly approved Oxford/AstraZeneca vaccine, to be delivered as much as three months after the first.

The change is aimed at giving a first dose of vaccine to as many people as possible, in an attempt to counter spiralling case numbers caused by a viral variant of the coronavirus that has been found to be much more infectious.

There was fresh evidence on Thursday of the toll the virus is taking in the UK, with a further 964 deaths announced and fresh signs of the strain on hospitals.

NHS Providers, which represents health organisations across the UK, said Covid-19 pressures were intensifying, particularly in London and the south-east, where the surge in admissions over the past few days was “extremely worrying”.

Saffron Cordery, deputy chief executive of NHS Providers, said that as of Wednesday there were 22,713 Covid-19 patients in hospital in England — an increase of more than 27 per cent in seven days. “Over the same period the number of Covid-19 patients in critical care beds rose by 35 per cent,” she added.

Matt Hancock, UK health secretary, on Thursday sought to counter suggestions that the vaccination programme, which the government sees as vital to taming the pandemic, was falling behind schedule.

He said 944,539 people across the UK had had their first dose of a Covid-19 vaccine. “The NHS has a clear vaccine delivery plan and today’s figures show once again how our fantastic NHS has risen to this enormous task . . . Now that we have authorised a second vaccine, we can expect this number to rapidly increase in the months ahead.”

Matt Hancock said more than 940,000 people had had their first shot of a Covid-19 vaccine © Jessica Taylor/UK Parliament

Although partial protection through the vaccine appears to begin as early as 12 days after the first jab, Pfizer stressed that two doses were required to provide the maximum protection against the disease, with an efficacy figure of 95 per cent. Crucially, it said: “There are no data to demonstrate that protection after the first dose is sustained after 21 days.”

The drugmaker said decisions on alternative dosing regimens were in the hands of health authorities and that it remained committed to talking to regulators, but it stressed each recipient should be afforded the maximum possible protection, “which means immunisation with two doses of the vaccine”.

The Medicines and Healthcare products Regulatory Agency said: “The decision was made to update the dosage interval recommendations for the BioNTech/Pfizer vaccine following a thorough review of the data by the MHRA’s Covid-19 Vaccines Benefit Risk Expert Working Group. This expert group concluded that vaccine efficacy will be maintained with dosing intervals longer than 21 days.”

GPs in the UK expressed anger and concern over the switch, saying they had to spend time cancelling appointments for people who had expected to receive their top-up dose in the next few days.

Helen Salisbury, a GP in Oxford, described the situation as “a shambles” and calculated that it would take the network of practices administering the vaccine for her area 193 hours of staff time to reschedule appointments.

She questioned the judgment, and data modelling, behind the decision. “What does the science say? We don’t know.”

The British Medical Association said asking GPs to rebook appointments of tens of thousands of elderly and vulnerable patients was “unreasonable and totally unfair, and practices who honour existing appointments booked for the next few days should be supported”. 

In his new year message, Boris Johnson, UK prime minister, hailed the Oxford vaccine, saying it “offers literally a new lease of life to people in this country and around the world”.

However, he warned of “a hard struggle still ahead of us for weeks and months, because we face a new variant of the disease that requires a new vigilance”.

Four questions about the UK’s Oxford/AstraZeneca vaccine rollout

Why is there a six-day delay between regulatory approval and the
first vaccinations with the Oxford/AZ vaccine?

Vaccines have to be delivered and stored according to conditions laid down by the UK medicines regulator, the MHRA, which were not known until the approval announcement on Wednesday.

What other factors are delaying the deployment of the new vaccine?

Jonathan Van-Tam, deputy chief medical officer, said this week that “the only thing that is going to slow us down is batches of vaccine becoming available”. This, he said, was “not just about vaccine manufacture” but also about “fill and finish” — the process of putting vaccine into vials and packaging it for distribution — which he said was “a critically short resource across the globe”. The second factor delaying supplies for patients is the regulatory requirement that each batch of vaccine is checked for safety and quality before it can be given to patients.

Will the changing of the dosing regimen to one dose and a second after
12 weeks speed things up?

The decision to increase the intervals between doses, not only for the Oxford/AstraZeneca vaccine, but also the BioNTech/Pfizer version, is aimed at protecting more people, more quickly. With no need to keep back half the supply to give second doses to those who have already received a measure of protection, all the available doses can be used immediately. However, perhaps made wary by previous pandemic grand promises that did not materialise, the government and the NHS will not be drawn on how many more will be covered in a specific timescale as a result.

When will the UK be able to deliver on the target of 2m people a
week being vaccinated?

The government is standing by its promise that all over-50s, and younger people whose health is particularly vulnerable, will have been vaccinated by the end of March. Boris Johnson on Wednesday promised “tens of millions of doses” by that point. Simon Stevens, head of England’s NHS, has spoken of everyone in the priority groups being covered by “the late spring”.

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Pictures of the year | Financial Times

2020 was dominated by the coronavirus pandemic. However, other news stories made a big impact this year, most notably the Black Lives Matter protests in the wake of the death of George Floyd in Minneapolis, US. Britain left the EU in January and the transition period ends on December 31 with a trade deal agreed at the eleventh hour. Beirut was devastated by a massive explosion in August, Belarus was rocked by protests in the wake of the undemocratic re-election of President Alexander Lukashenko and Joe Biden was elected president of the US. Here is a selection of the most striking images from this year.

© Tracey Nearmy/Reuters

Nancy and Brian Allen stand outside their home as high winds push smoke and ash from the Currowan fire towards Nowra, New South Wales, Australia, on January 4. Australia experienced one of its most severe wildfire seasons in 2020.

© Timothy A Clary/AFP/Getty

Actress Rose McGowan speaks to the media after Harvey Weinstein’s arrival at the State Supreme Court in New York on January 6 on the first day of his criminal trial on charges of rape and sexual assault. Weinstein was found guilty on February 24 of sex crimes, including rape.

© Daniel Leal-OlivasAFP/Getty

A man waves Union flags from a BMW Isetta in Parliament Square, central London, on January 31, the day that the UK formally left the EU.

© AFP/Getty

Employees eat lunch at a social distance at a Dongfeng Honda car plant in Wuhan in China’s central Hubei province on March 23. Wuhan was the city where the Covid-19 coronavirus was first detected.

© Charlie Bibby/Financial Times

The empty streets of the City of London on March 17, a week before the UK government imposed a nationwide lockdown.

© Emilio Morenatti/AP

People stand on their balconies during a nationwide confinement to counter the coronavirus in Barcelona, Spain, on March 29.

© Thomas Samson/AFP/Getty

Medical staff put a patient infected with Covid-19 on board a specialised TGV high-speed train at the Gare d’Austerlitz station, Paris, on April 1 to be evacuated to another hospital in the western region of Brittany, where the outbreak was more limited.

© Daniel Castellano/AFP/Getty

A volunteer worker disinfects a public bus station in Curitiba, Brazil, on April 1. Brazil’s president, Jair Bolsonaro, dismissed the danger of the coronavirus, causing controversy by claiming that it was no more than a “little flu”.

© Kim Ludbrook/EPA/Shutterstock

A women is tested by a healthcare professional during a local government mass-testing deployment in the high-density Alexandra township on day 32 of the national lockdown in Johannesburg, South Africa, on April 27.

© Hannah McKay/Reuters

Neonatal nurse Kirsty Hartley carries newborn Theo Anderson, who was born prematurely, to his mother Kirsty Anderson, at Burnley hospital in Lancashire, UK, on May 15.

© John Minchillo/AP

Protesters in Minneapolis, US, demonstrate over the death of African-American George Floyd, who died in police custody in May.

© Kerem Yucal/AFP/Getty

A couple kneels and raises their hands at a memorial for George Floyd following a day of demonstrations in Minneapolis on June 13.

© Dylan Martinez/Reuters

A protester carries an injured counter-protester to safety near Waterloo station during a Black Lives Matter protest in London, UK, on June 13.

© Martin Bernetti/AFP/Getty

Aerial view showing the burial of a victim of Covid-19 at the general cemetery in Santiago, Chile, on June 23.

© Patrick Baz/AFP/Getty

Karina Sukkar, an architect and designer, stands on the balcony of her damaged flat overlooking the ravaged port of Beirut, Lebanon’s capital. A huge explosion on August 4 was caused by a stock of ammonium nitrate that had languished for years at a port warehouse.

© Getty Images

People pass a giant television screen as Japan’s prime minister, Shinzo Abe, announces his resignation in Tokyo on August 28.

© Tut.By/AP

A woman argues with a policeman during a protest in Minsk, Belarus, on September 1. Several hundred students marched through the city centre, demanding the resignation of the country’s authoritarian leader, Alexander Lukashenko, after an election that the opposition denounced as rigged.

© Luke Dray/Getty

Migrants pack on to a small inflatable boat in an attempt to cross the English Channel off the coast of Dover, UK, on September 7.

© Leah Millis/Reuters

The shadow of President Donald Trump is cast on Air Force One as he arrives for a campaign rally at Duluth International Airport in Duluth, Minnesota, US, on September 30. Mr Trump tested positive for Covid-19 two days later.

© AP

A family has lunch in the town of Martuni, the separatist region of Nagorno-Karabakh, on October 14. In 2020, the conflict between Armenia and Azerbaijan escalated, with both sides exchanging accusations and claims over the territory.

© Jim Bourg/Reuters

Democratic presidential nominee Joe Biden and his wife Jill, and vice-presidential nominee Kamala Harris and her husband Doug, at an election rally in Wilmington, Delaware, after the media announced that Mr Biden had won the US election on November 7.

© Hollie Adams/Bloomberg

Dominic Cummings, who quit as special adviser to the UK prime minister, Boris Johnson, waits with a box of possessions in Whitehall after departing from 10 Downing Street, London, on November 13.

© Lillian Suwanrumpha/AFP/Getty

A pro-democracy protester during an anti-government rally outside the headquarters of Siam Commercial Bank in Bangkok, Thailand, on November 25. The ducks have become a symbol of the pro-democracy movement.

© Nariman El-Mofty/AP

Refugees from Tigray who fled the conflict in Ethiopia on board a bus going to the Village 8 temporary shelter, near the Sudan-Ethiopia border, in Hamdayet, eastern Sudan, on December 1.

© Jacob King/Pool/AFP/Getty

Margaret Keenan, aged 90, is applauded by staff as she returns to her ward after becoming the first person to receive the BioNTech/Pfizer Covid-19 vaccine at University Hospital in Coventry, UK, on December 8.

© Leon Neal/Pool/AP

UK chief trade negotiator David Frost looks on as Britain’s Prime Minister Boris Johnson signs the EU-UK Trade and Cooperation Agreement at 10 Downing Street in London on December 30.

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How viruses have shaped the world

I want to tell you a story about a virus. This one does not infect humans, but a humble alga that lives in the surface waters of the oceans, where it feasts on sunlight. This particular alga is called Emiliania huxleyi — Ehux to its friends — and it is a beautiful little being. Less than one hundredth of a millimetre in diameter, this lifeform fabricates dozens of tiny, ornate scales, which it uses as an outer covering, as an alternative to a shell. The scales are made of the mineral calcite, a form of limestone, and they are called coccoliths, from the Greek for “stone grains”. The group of lifeforms that it belongs to are known as coccolithophores — “bearers of coccoliths”.

When times are good, these algae can reach staggeringly large numbers. In the north Atlantic in 1998, an Ehux bloom extended over almost 1m square kilometres — that’s an area four times larger than the UK — and blooms covering thousands of square kilometres are common. When this happens, the seas turn milky, forming patches that are easily visible from space. Not bad when you consider that to see any single individual of this species, you would need a microscope.

Ehux has viruses, known as EhVs. As viruses go, these are huge — each one may have a diameter of around one ten-thousandth of a millimetre, which is tiny from a human perspective, but far more massive than most of their kind. Scanned with an electron microscope, they look like 20-sided dice. 

When Ehux blooms, outbreaks of these viruses help to bring those blooms to an end. Infected algae split apart, their cells ruptured, their lives over. Their tiny stone scales drift down to the seafloor, where they accumulate. And accumulate.

Dutch microbiologist Martinus Beijerinck who in the late 19th Century was a pioneer in investigating the tobacco mosaic virus; it resembles a ‘cigarette shaped’ rod when viewed under an electron microscope © Alamy

The world’s largest accumulations of coccoliths are plain to see. The white cliffs of Dover, of the German island of Rügen, of the Normandy coast of France, of the Smoky Hill River of Kansas in the US — these are all built of chalk, and chalk is composed mostly of coccoliths that accumulated ages ago, in ancient seas, when what is now land was beneath the waves. 

Perhaps few geological formations give such a dizzying sense of the vastness of time. The bulk of the planet’s chalk formations were deposited more than 65m years ago, during the late Cretaceous — creta is Latin for chalk — and took many million years to build up. Back then, Earth was a different world: dinosaurs were stomping about, flowering plants had only recently evolved into bloom, and the lofty peaks of the Himalayas had not yet been upheaved. And as I behold these cliffs, I find myself wondering whether viruses were the chief cause of death for the coccolithophores of the Cretaceous seas, as they are today — and whether viruses are, therefore, implicated in the making of the chalk. 

Stalking viruses into deep time is tricky; their direct fossil record is scant and enigmatic. After all, you’re not hunting for T-Rex skeletons; you’re trying to find specks that are, at their most gigantic, around one thousandth of a millimetre in diameter. Experiments show that viruses can fossilise; in some circumstances, minerals precipitate directly on top of virus particles, thus generating ultra tiny stone structures. But detecting such things in old rocks takes a fancy microscope. And even if you find some, it’s hard to be certain what you’re looking at. Nanofossils are notoriously difficult to interpret, and at least to my untutored eye, images of putative fossil viruses from ancient rocks amount to a kind of inkblot test.

But while the fossil evidence is uncertain, genetic evidence supports the view that viruses are old. Indeed, viruses of some sort are thought to be ancient, to have evolved in tandem with, or soon after, the first lifeforms, sometime around 4bn years ago. EhVs themselves belong to a group that seems to have evolved on to the scene more than 1.5bn years ago — far earlier than coccolithophores, which only began to leave traces in rocks around 225m years ago. Besides, today, all lifeforms have viruses that infect them, and there is no reason to suppose that this has been different in the past.

Which would mean that it was not simply millions of years of coccolithophore blooms and milky seas, but also millions of years of viral infections bringing those blooms to a close. Perhaps it’s not the white cliffs of Dover so much as the white cliffs of Doom. Yet I find it wondrous to consider that, together, such small entities, the coccolithophores and their viral companions, could have altered the fabric of the planet, leaving behind a tangible legacy of such magnitude. 

The chalk cliffs of Seine-Maritime along the northern coast of France; and the algal lifeforms known as coccolithophores whose fossilised coverings are a large component of these limestone rocks © Getty Images

I want to tell you another story about a virus. This one infects tobacco plants, causing the leaves to become blotchy and deformed, and stunting the plants’ growth. Known as the tobacco mosaic virus, it is something of a celebrity: a decade ago, plant pathologists voted it the most important plant virus. Its popularity does not arise from the disease it causes, but from the central role it has played in the accumulation of knowledge over the past 120 years. 

Looking back from today, there is no moment in the history of science when viruses were discovered. Instead, their existence and strange nature emerged slowly from the shadows in a process that took several decades. By the end of the 19th century, it was clear that the mosaic disease of tobacco was caused by an infectious entity so small that it passed through filters that strained out all known bacteria. 

In 1898, a Dutch microbiologist, Martinus Beijerinck, suggested that this invisible entity was not a minute organism, but something else, something fundamentally different in character. At the time, his ideas did not take hold. But back then, the available technology severely restricted the means by which these entities could be probed. 

By the end of the 1920s, the situation had begun to change. The new tools of molecular biology revealed tobacco mosaic virus to be a biological particle of some sort, although exactly what sort remained unclear. Then, for the first time, a team of German scientists rendered the invisible visible.

In 1939, they deployed the newly invented electron microscope, or “Übermikroskop”, to examine two plant viruses, one of which was tobacco mosaic. They discovered that it resembled a tiny stick, or as one researcher later described it, a “cigarette-shaped” rod. (The other, a virus that infects potatoes, looked like a small piece of string.) Subsequent workers would find viruses shaped like tiny moon landers, bottles, even lemons — not to mention the spiky spheres of coronaviruses or the 20-sided dice of the EhVs. 

As time went on, it gradually became clear that viruses are a distinct class of biological entity. They lack the structures of living cells, and they have no metabolism. In other words, viruses neither eat nor excrete. They do not breathe. They do not grow. Instead, all virus particles consist of a small packet that contains genetic material. The packet is made of proteins (in some cases, it may then be enclosed in a fatty envelope). The genetic material is either DNA, or its sister molecule RNA, depending on the virus. 

Out in the world on their own, virus particles are inert. They only become troublesome when they bump into a suitable lifeform, and the genetic material from the virus enters the host cell. What happens next depends on both the virus and the host; but at some point, the infected cell may begin to use the genetic material from the virus to make new virus particles, a process that is often lethal to the host. 

In the early years, viruses were seen simply as bad news. And certainly, Covid-19 is just the latest addition to a long and gloomy list of human maladies caused by viruses. Smallpox, chickenpox, measles, mumps, rubella, polio, influenza, rabies, yellow fever, dengue, Ebola, Aids, West Nile fever, Zika fever, even most forms of cervical cancer — I could go on.

But as the ability to peer inside cells has grown, it has become clear that, as a group, viruses are far more than agents of sickness and death. They are also one of the most creative forces in the history of life. Part of this derives directly from the harm they cause: any lifeforms that can defend themselves against one virus or another will tend to leave more descendants than less fortunate beings. 

Viruses have, therefore, led lifeforms to evolve an impressive array of antivirus defences. These run from the mundane to the exotic. Among the mundane: some bacteria have evolved mechanical protections that reduce the odds of getting infected in the first place — the microbial equivalent of mask-wearing. Some researchers have suggested a similar role for coccoliths, though the idea has not yet been confirmed. 

Tobacco leaves being inspected for ripeness in April in Zimbabwe; the tobacco mosaic virus can infect the plants © Jekesai Njikzana/AFP

More exotic defences include molecular scissors that chop up offending viral genes, as well as the complex immune systems of mammals and birds. (Molecular scissors, by the way, are now an essential tool in biomedical research, and their discovery has led to Nobel prizes.) Viruses may, in turn, evolve to evade these defences, generating an ongoing evolutionary dance — and, over time, molecular interactions of fantastic complexity. 

But the deeper creativity of viruses comes from something altogether more strange. Viral genetic material can be incorporated into the genetic material of the host. Sometimes it stays there, and the viral genes become a permanent part of the host’s genetic endowment. By some estimates, as much as 8 per cent of the human genome has been accumulated this way (most of the incorporations took place deep in the evolutionary past).

Over time, most of these viral genes decay, becoming ghosts harmlessly haunting the genomes of their hosts. But from time to time, some of these once-viral-genes become repurposed, evolving new functions within the lifeform that they are now part of. Indeed, the development of the human placenta depends, in part, on a gene that was once part of a virus. 

Viruses can also acquire genes from their hosts — as an infected cell begins to make new virus particles, some of its own genetic material may be added to that of the virus. If the virus goes on to infect another cell, these “extra” genes are transmitted too, potentially bestowing new genetic powers upon the recipient. It’s a kind of inheritance, but not the normal, parent-to-child sort. 

And here’s the thing. The language of genes is universal: all lifeforms interpret genetic material in essentially the same way. A virus that can infect lifeforms that are only distantly related may sometimes, therefore, move genes across the tree of life. Such happenings accelerate evolution: lifeforms acquire new traits wholesale, rather than having to wait for them to come about. To give an example: some of the genes that allow organisms to convert the energy in sunlight into chemical energy appear to have moved around the tree of life in this way. But perhaps this is less surprising than it seems: because viruses are so numerous, and Earth history so long, events of this kind are bound to have happened from time to time.

Today, viruses are the planet’s most abundant biological entities. A droplet of seawater may contain more than 100m of them; a gram of soil, around 1bn. You can find viruses in sediments at the bottom of the ocean, in hot springs, and high in the air. Although only a few thousand have been formally described, there are thought to be millions of different kinds. Happily, the great bulk of these do not infect humans, but bacteria — which are themselves extremely numerous and diverse.

Ever since Beijerinck proposed that the mosaic disease of tobacco was caused by a new kind of entity, people have argued about whether viruses are alive. I have argued about it myself. I used to put them on the “life” side of the ledger. But now I would say it this way: viruses are of life, and they interact with life, but they are not alive. For one thing, all lifeforms can trace their origins back, across 4bn years, to a single common ancestor. Viruses cannot: they appear to have arisen several times independently. Coronaviruses and EhVs, for example, belong to groups that do not share an origin. When and how, and how often, new viral groups originate from scratch is, however, unknown. 

In the midst of a global pandemic, such reflections are, perhaps, cold comfort. But I think it is fair to say that, had viruses never existed, we humans would not be here either. For better and for worse, they have helped to make our world.

Olivia Judson is the author of ‘Dr Tatiana’s Sex Advice to All Creation’ (Vintage). She is presently writing a history of life and Earth

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Spain and UK agree deal to keep Gibraltar land border open

Spain and the UK have reached an agreement in principle on the free movement between the British overseas territory of Gibraltar and Spain, less than a day before the frontier would have become the only hard land border created by Brexit.

“The border gate will be lifted and controls between Gibraltar and Spain will be able to be abolished,” Arancha González Laya, Spain’s foreign minister, said on Thursday.

“We’re going to avert the worst effects of a hard Brexit,” Fabian Picardo, Gibraltar chief minister, said shortly after.

Dominic Raab, the UK foreign secretary, said the agreement would form the basis of a separate treaty between the UK and the EU regarding Gibraltar, adding “we remain steadfast in our support for Gibraltar and its sovereignty is safeguarded”.

The agreement will in effect make Gibraltar part of the Schengen free-movement area and convert Gibraltar’s airport and port into the EU frontier. More than 90 per cent of Gibraltarians voted to remain in the EU in the Brexit referendum and since then Gibraltar has sought closer ties with the EU than it had pre-Brexit. Similarly, Ms González has said the Spanish “vision” was to “remove the border fence”.

But six months of negotiations over the free movement agreement stalled over how entrance into the Schengen zone, now to be inside the British overseas territory, would be policed.

Madrid had signalled that it would be willing to have officers from the EU border agency Frontex control passage through the airport and port as a temporary confidence-building measure, but it insisted that Spain, as an EU member, would be in charge of the external EU border. The Gibraltar government, for its part, was clear that it would not accept Spanish officials controlling its borders.

The issue is especially sensitive because of the sovereignty dispute that has continued since Gibraltar was ceded to Britain under the 1713 Treaty of Utrecht.

In announcing the agreement in principle, Ms González insisted that Spain would be the responsible party for the oversight of Schengen, but said that Frontex agents would assist with border controls during a four-year transition period. She declined to specify where Spanish customs and police agents would be during or after that period.

Mr Picardo insisted “people should absolutely not be concerned” that Spain’s Guardia Civil would be coming to Gibraltar.

It should take about six months to convert the deal into an EU-UK treaty, Ms González said, during which time frontier controls along the current Spain-Gibraltar border would be managed in line with Schengen regulations.

The free movement of people between the two territories is particularly important for workers in the region. About 15,000 people cross the border to work every day — most of them passing from the Spanish to the Gibraltarian side. Damage to the regional economy caused by a hard border would have devastated these workers, as job prospects are scarce in the Spanish frontier area of the Campo de Gibraltar, where unemployment is close to 40 per cent.

The New Year’s Eve deal will “pull down barriers to create a zone of shared prosperity”, Ms González said. “Without this agreement in principle, Gibraltar would have been the only location of a hard Brexit, and that concern weighed on the negotiations.”

Mr Picardo said: “This has not been easy, and we have gone to the wire. In fact I think we felt the wire cutting into our flesh as we finalised the agreement.” 

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New US jobless claims fall below 800,000

Another 787,000 Americans applied for unemployment benefits last week, down 19,000 from the week before and the lowest rate since November.

The figure represented the second consecutive drop in the number of initial jobless claims, but the rate remains historically elevated and some economists warned that the true number of Americans put out of work last week could be higher, as the Christmas holiday may have led some to wait to apply for benefits.

Claims numbers also dipped in the week of the Thanksgiving holiday only to rise the week after. The number of initial claims last week was expected to rise to 833,000.

On top of the new claimants, 5.2m Americans are receiving unemployment benefits, down from 5.3m the week before.

Economists fear that an expected surge in Covid-19 cases following Christmas celebrations could prompt further business closures and push more Americans out of work.

A $900n relief package signed by President Donald Trump at the weekend extended jobless benefits and provided funds for businesses and efforts to tackle the pandemic, which will boost the job market but take time to feed through to the economy.

Thursday’s report covered the week ending on December 26.

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Hong Kong media mogul Jimmy Lai sent back to jail

Hong Kong media tycoon and pro-democracy activist Jimmy Lai has been sent back to jail after the territory’s top court rescinded his bail, in one of the highest-profile cases in the territory under Beijing’s sweeping new national security law.

Mr Lai, one of Hong Kong’s most outspoken critics of China’s ruling Communist party, had been released on HK$10m ($1.3m) bail last week. He was put under house arrest and instructed to avoid giving interviews and using social media.

But the Court of Final Appeal on Thursday said he must be detained while prosecutors’ appeal was being considered, calling the lower court’s ruling to grant Mr Lai bail “erroneous”. Mr Lai will remain in custody until his bail hearing on February 1.

The decision comes just days after the People’s Daily, the Chinese Communist party mouthpiece, lambasted the decision to grant bail and raised the spectre of his case being transferred to the mainland.

The comments compounded fears about the independence of Hong Kong’s judiciary as Beijing mounts a crackdown against dissidents and pro-democracy activists in the wake of last year’s protests.

Mr Lai was arrested earlier this month and faces fraud charges for allegedly misusing a businesses premises under the terms of its lease. He was previously arrested in August and charged under Beijing’s new national security law for allegedly colluding with foreign powers. He denies the allegations.

Benedict Rogers, founder of Hong Kong Watch, a UK-based campaign group, condemned the court’s decision. “Judicial independence trampled on, the rule of law further undermined, and yet another outrageous assault on #HongKongers,” he wrote on Twitter.

Mr Lai, 73, has been a longstanding target of Beijing. His Apple Daily newspaper is Hong Kong’s biggest pro-democracy tabloid and was often waved by protesters at anti-government demonstrations.

He is an ardent supporter of US president Donald Trump’s hardline approach to Beijing and met with senior US officials, including Mike Pence, vice-president, and Mike Pompeo, secretary of state, in Washington last year.

Mr Lai stepped down as chairman and executive director of Next Media, the media conglomerate he founded, last week. The company said the decision was “in order to spend more time dealing with his personal affairs”.

The decision to rescind Mr Lai’s bail comes a day after a court in Shenzhen sentenced 10 Hong Kong protesters to between seven months and three years in prison in mainland China for violating border restrictions. The group were captured by Chinese officials in August while attempting to flee to Taiwan by speedboat to avoid national security law charges. The group had been held for four months and prevented from choosing their own legal representation.

An additional two members of the group, who were aged 16 and 17 at the time of their arrest at sea, also pleaded guilty but were remanded into Hong Kong police custody without standing trial. They are expected to face further charges in Hong Kong.

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SEC officials were absent in Robinhood settlement

Two US Securities and Exchange Commission members with personal ties to Robinhood employees sat out the agency’s enforcement settlement with the popular trading app this month. 

The SEC’s outgoing chairman, Jay Clayton, and its current acting chief, Elad Roisman, did not participate in Robinhood’s $65m settlement of charges that it failed to provide its customers with the best prices for trades on its platform, according to agency disclosures.

Just three of the SEC’s five members approved the Robinhood settlement. The Robinhood case was the only SEC settlement in 2020 that had two commissioners not participate in a vote, the disclosures show.

While the SEC declined to comment about why Mr Clayton and Mr Roisman did not participate, both have ties to people hired by Robinhood this year. Commissioners will recuse themselves from enforcement matters when there are potential conflicts of interest.

Robinhood hired Lucas Moskowitz, who had previously been Mr Clayton’s chief of staff at the SEC, in August to join its regulatory affairs team. In May it recruited a former SEC commissioner, Dan Gallagher, to be its chief legal officer. While at the SEC, Mr Gallagher hired Mr Roisman as a counsel.

The company declined to comment. Robinhood has been staffing up with former regulators as scrutiny of its business has intensified, following a period of intense growth.

The app, founded in 2013, had been the driver of a boom in retail investor trading that has helped to propel financial markets — and tech stocks in particular — higher this year. It is now looking to go public itself in 2021. 

Robinhood repeatedly failed to disclose that it receives payments from market making firms in return for routing its customers’ orders to the firms, according to the SEC settlement. Customers would have achieved significantly better prices for their trades if they had been routed to other brokers, the SEC found. 

The regulator’s settlement with Robinhood was announced six days before Mr Clayton stepped down after more than three years as SEC chairman. The agreement did not include some of the agency’s harsher enforcement tools such as requiring a company to admit to wrongdoing or individual sanctions for executives.

Robinhood was also sued this month by the securities regulator in Massachusetts. The state alleged Robinhood acted “without regard for the best interests of its customers” by using aggressive marketing and “gamifying” investing.

The company also failed to properly maintain the systems supporting its swelling customer base, leading to as many as 70 disruptions or outages between January and November, Massachusetts said.

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Pandemic threatens lucrative US college football tradition

US universities are struggling to field teams for lucrative end-of-season American football matches as Covid-19 spreads across the country, putting at risk hundreds of millions of dollars of revenue for the schools that play in the holiday “bowl” games and the cities that host them.

Televised college football bowl games are a traditional feature of the US Christmas holiday season. Dozens are staged, often with corporate sponsors and preceded by elaborate parades. Some of the games are also part of a playoff system for selecting a national college football champion.

Although some teams are healthy enough to participate in bowls, the pandemic has forced the cancellation this week of such contests as the Union Home Mortgage Gasparilla Bowl in Tampa, Florida, and the TransPerfect Music City Bowl in Nashville, Tennessee — the elaborate names reflecting the rush in recent years for sponsorship.

That is scrambling the financial picture not only for the regional conferences that organise bowl matchups and distribute the revenue to universities, but for hosts of the events themselves.

The contract between the college football playoff system and its broadcaster, ESPN, is worth $7.3bn over 12 years, according to the Knight Commission on Intercollegiate Athletics. Schools with large fan bases such as Notre Dame automatically earn $3.2m for qualifying for a playoff spot, while the baseline payout for other playoff-eligible schools is $300,000.

“Each of these conferences have their financial agreements with bowl games, and all of those have been scrapped this year, renegotiating for this year only,” said Nick Carparelli, executive director of the advocating body for the college football postseason, Bowl Season. 

While he did not give an estimate for the total financial impact of the changes to the 2020 postseason schedule, he added that “there will not be as much profitability, with bowls dipping into their reserves” to help finance travel costs for teams healthy enough to participate in the one-off games.

Last year, the college football playoff generated $460m in payouts to participating conferences and their universities, according to the Knight Commission.

This year, 44 postseason matches had been scheduled, with the top four teams from the regular season invited to a playoff on New Year’s Day. The winners advance to a national championship game on January 11. 

In addition to being a television ratings bonanza, bowl games are large tourist draws, luring sports fans to largely temperate locales to celebrate the new year and their favourite team. 

The Music City Bowl, an annual fixture in Nashville since 1998, was cancelled on Sunday because of rising Covid-19 cases among one of the teams scheduled to participate, the University of Missouri. Since its inception, the game has provided a $350m boost to the local economy, organisers say.

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The 130-year-old Rose Bowl in Pasadena, California, was relocated to Texas because of the spread of Covid-19 in southern California. Organisers estimate the game and its affiliated parade generated $200m for the local economy in 2018 alone.

The winter coronavirus surge has also forced some prominent football programmes to withdraw from the holiday bowl tradition. Stanford University, which had difficulty playing its remaining football games in December after municipal authorities prohibited contact sports in the Palo Alto area, decided to end its season just before the Christmas break.

“As much as many of us in our hearts would love to potentially play the bowl game, I don’t see how we could do it,” said Stanford football director David Shaw. “It did not seem practical.”

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The FT holds its Business of Football Summit on February 17-18 2021, featuring sessions with Manchester United striker and food poverty campaigner Marcus Rashford, Fifa general secretary Fatma Samoura, player super-agent Jonathan Barnett, and many more. Register for the event here.

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