Category: zerohedge

Authored by Nick Dunbar of Risky Finance

When the family office Archegos Capital abruptly imploded in late March, prompting $50 billion in block trades and $10 billion in losses at Credit Suisse, Nomura, UBS and Morgan Stanley, many bank analysts were taken by surprise. Last week, many of these analysts sounded frustrated listening to Credit Suisse’s earnings call in which senior management skirted round without giving any real detail about the disaster.

“Do you think it’s possible that this could produce a very fundamental reset in how your IRB credit risk models work?” wondered Stefan Stalmann of Autonomous Research. “I mean you have only CHF20 billion to CHF25 billion of counterparty credit risk-weighted assets on literally hundreds of billions of equity swaps and repos”.

Risky Finance shares Stalmann’s bewilderment. Expressed as a capital requirement, Credit Suisse was able to satisfy regulators with just $2 billion of capital for counterparty credit losses – the lowest among the G-SIFI banks tracked by Risky Finance. Months later it reported a loss of $4.7 billion.

It should serve as a warning. 14 years ago, obscure corners of banking businesses became hotbeds of regulatory arbitrage, speculation and leverage. The contagion of US subprime brought the financial system to its knees. Now, after years of low or negative interest rates, equity finance may have become a similar hotbed.

The business is much larger than published estimates – Risky Finance believes there are more than $3 trillion of exposures. And the pressure to grow equity finance is leading banks to exploit loopholes in Basel rules. As in 2007, this is masked by the complexity of the models that Credit Suisse and other banks used to allocate capital to their prime brokerage business.

In following articles we will try to unpick the way Archegos was so damaging, and we will give a broad brush picture of how the risk models are supposed to work. And we will showcase some new data that reveals why this business is bigger and riskier than many imagined. Lastly we will identify a list of fixes for regulators to work on.

Residents in Texas and Oklahoma are recovering Friday after major hailstorms battered portions of the states late Wednesday, destroying homes and businesses and automobiles. 

AccuWeather forecasters estimate the damage could be more than $3 billion because the devastating storms unleashed large amounts of hail in metro areas, such as Norman, Oklahoma, and San Antonio, and Fort Worth, Texas. 

AccuWeather Senior Vice President and Chief Meteorologist Jonathan Porter estimates “total damage and economic loss caused by Wednesday night’s hailstorms are predicted to be about $3.5 billion.” 

“To put the economic toll of these storms into context,” Porter continued, “AccuWeather’s estimate for Hurricane Isaias, a Category 1 storm that struck the Caribbean and moved up the Eastern Seaboard of the U.S. in July and August of 2020, was $3 billion to $5 billion. It is yet another in a series of $1 billion-plus weather disasters.”

In Hondo, Texas, located west of San Antonio, grapefruit-sized hailstones, measuring up to 4 inches in diameter, decimated everything in sight. In Norman, the diameter of hail was equivalent to baseballs and golf balls. 

Readers may recall we quoted the Storm Prediction Center, who warned hailstones up to 4 inches in diameter were headed Texas and Oklahoma. 

The hail hit with such force that one grapefruit-sized hailstone penetrated the roof of a house in Sabinal, Texas. 

One of many giant hail stones that came through the roof of my friend’s house this evening in Sabinal, Texas. @NWSSanAntonio @IanShelton1997 @TxStormChasers @Justin_Horne @ReedTimmerAccu #eWXspotter pic.twitter.com/SGO7u8VcLi

— Kris WeltensϟF (@vortexrfd) April 29, 2021

Tennis ball-sized hail rained down in North Fort Worth, creating widespread destruction. 

Anything left outside was damaged. 

In Norman, cars were severely damaged. 

Incredible vehicle damage in Norman. Talked with a Walmart employee who showed me a video of all 200 skylights breaking and hail falling into the store. The skylights are TWO layers of plexiglass. #okwx pic.twitter.com/PQk6Mqrbpp

— Andrew Justin (@andrewjustinWX) April 29, 2021

Hail damage at a car dealership in Norman. 

Hail damage in Norman, Ok at a car dealership. Lots of windshields smashed. pic.twitter.com/C8YTUWdiET

— Ben Latham (@photogbenlatham) April 29, 2021

Damage in Norman alone could be upwards of $500 million. 

HISTORIC HAIL: Baseball-size hail wrecked cars, windows, roofs & infrastructure in Norman, Oklahoma.

The sudden severe storm struck shortly after 9pm Wednesday.

The damage in Norman expected to near 500 million dollars. | @koconews #okwx pic.twitter.com/UVOr3WOqRx

— Christine Stanwood (@KOCOChristine) April 29, 2021

AccuWeather outlines the storm’s path of destruction. 

This would be the second billion-dollar disaster this year in Texas, following the polar vortex split in February that paralyzed the state for more than a week. 

Authored by Charles Hugh Smith via OfTwoMinds blog,

I’m sure it’s no surprise that the next five years will be risky and challenging; to the degree that we will be reliant on those closest to us, we are sharing a virtual lifeboat.

Consider a scenario in which we’re on a ship that’s sinking, and the lifeboats have been launched. Being some of the last still on board the doomed vessel, we can scan who’s in each lifeboat and choose which one we’ll clamber into.

It’s a consequential decision because the currents and weather are already separating the lifeboats, and so each lifeboat will be on its own. The seas are increasingly treacherous, and the nearby islands are surrounded by reefs which could shred the lifeboat’s hulls in seconds.

While we don’t know everyone on board, we’ve met many of the other passengers and crew and made the acquaintance of a fair number of our fellow castaways.

So who do we choose to join? Our knowledge is imperfect: we only have first impressions and intuitions about the people who will potentially impact our life in a very direct and consequential way.

Do we choose to go in the lifeboat with a friend? This is certainly more appealing than a boat full of strangers.

Do we choose a boat with an experienced sailor whose skills in the open ocean would improve our chances of surviving the ordeal ahead?

Or do we choose a boat which is already under the control of a natural leader? If we understand that dithering and unresolvable conflicts can lead to disaster by default, then having someone in charge might be worth the risk that their leadership will lead to a catastrophically bad decision.

If we feel we have the experience to take charge and bring a lifeboat to safety, then perhaps we look for the disorganized, leaderless boat.

Alternatively, we can weed out those boats we’ll avoid as potentially dangerous because of the presence of domineering individuals with traits that have poor survival outcomes.

When The Little Prince hopscotches to various planets on his way to Earth, he encounters the King who desires a subject, a conceited man, a tippler (addict), a businessman who claims all the stars as his possessions and a lamplighter busy lighting and extinguishing the lamp every minute. These are parodies of human types, of course; The Little Prince found some modest favor in the lamplighter because he was the only one who was not self-obsessed / self-absorbed.

The boats I would avoid are those with wealthy, powerful people who confuse their position and wealth with competence, when actually there is no connection to competence beyond whatever specialized niche they used to acquire wealth and power. Their assumption (a form of privilege beneath the surface) that their specialized competence grants them universal competence is disastrously wrong-headed.

These are the types who will steer the lifeboat onto a reef despite the warnings of the less wealthy/powerful because their confidence in their judgment exceeds their grasp of risk/reality and their general life competence. They fail to understand the extreme narrowness of their experience and competence and have an overly high opinion of themselves due to their success in a narrow niche.

I would also avoid boats with individuals who triggered my BS detector, our intuitive animal assessment of the trustworthiness and self-absorption of individuals. For those who don’t automatically filter out their negative assessments as “bad” and therefore “not allowed,” this assessment is remarkably rapid and remarkably accurate.

Boats filled with self-important, self-absorbed people I would avoid as death traps. I would also avoid boats with do-gooders / would-be saints whose motivation (above self-preservation, until it’s too late) is to defend the rights of the weak as the most important principle, even in life-and-death circumstances. These types are especially dangerous because their life experience is that Somebody Will Rescue Us. They thus conclude we can devote asymmetric resources to the weakest because Somebody Will Rescue Us.

They are incapable of recognizing the difference between making the vulnerable/dependent as comfortable as possible given the resources available and devoting the primary effort to saving everyone but if this can’t be done, then saving as many people as possible. They are unable to recognize the need for difficult decisions that may well have asymmetric outcomes for the individuals on the boat. In demanding equal outcomes, they will lose everyone’s lives–an outcome that is certainly equal but foolish.

Choosing a boat with an experienced open-ocean sailor is an obvious choice, as the sailor has experiential skills that apply specifically to the challenge at hand. But let’s say that obvious choice means that boat is already filled to capacity.

So if the obvious best choice is not available, then what boat do we cast our lot with?

I would look for a boat with low-key individuals with high situational awareness and experience in responding to crises and danger. Combat veterans come to mind, but there are many others with training and experience (or natural abilities) that aids their situational awareness, risk assessment and responses to rapidly evolving threats. The OODA loop (Observe, Orient, Decide, Act) is an example of this process.

I would also look for a boat with the increasingly rare individuals who do what they say they’re going to do, and do it without self-obsessed drama/trauma or childish excuses. These individuals have a healthy awareness of their own limits and the limits of human nature. They don’t overpromise to make themselves larger than they really are and they won’t burden the rest of the boat with their self-absorbed histrionics or adolescent excuses.

Since I’m not qualified to lead as a sailor, and the only boat with an open-ocean sailor is full, I would look for a boat with a balance between hierarchy and self-expression / advocacy. The ideal situation is a boat in which every individual’s advocacy of a particular action or strategy is carefully considered but the consensus reaches a decision and grants leadership to those with the best qualifications and most persuasive argument for their decision.

Once the decision of a strategy has been made, then the boat unites behind pursuing this strategy.

It’s instructive to consider the greatest open-ocean, open-boat voyages that have been recorded. Some had existing military hierarchies (for example, Captain Bligh’s epic 4,000 mile voyage in a severely overloaded open launch) while others were castaways lacking a strict hierarchy.

Whether the united effort of cooperation is imposed or agreed upon, this cooperation is key, as is a strategy based on the realities and risks.

Going it alone is a high-risk strategy. So is becoming dependent on self-important, self-absorbed people who are incapable of viewing reality as anything other than It’s All About Me.

I’m sure it’s no surprise that the next five years will be risky and challenging; to the degree that we will be reliant on those closest to us, we are sharing a virtual lifeboat.

Choose your boatmates carefully.

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An underground nuclear waste storage tank in southeast Washington state is leaking radioactive waste into the ground, according to a Washington state Department of Ecology press release.

The 75-year-old tank, called B-109, at Hanford Nuclear Reservation is estimated to be leaking 3.5 gallons per day, or approximately 1,300 gallons per year of radioactive material. The tank holds around 123,000 gallons of radioactive waste dating back to when atomic bombs were being built throughout the Manhattan Project. 

The Hanford Nuclear Reservation is a decommissioned nuclear production facility operated by the federal government on the Columbia River in Benton County. The facility is about a four-hour drive east of Portland. 

“It’s a serious matter whenever a Hanford tank leaks its radioactive and dangerous chemical waste,” Ecology Director Laura Watson said. 

The B-109 tank is leaking into an area where 200,000 gallons of waste have already entered the ground. The site is miles away from the Columbia River, and the tank is only 210-240 feet above the local water table. 

Dangers Of Nuclear Fuel Leaking Into Columbia River

“This leak is adding to the estimated one million gallons of tank waste already in the soil across the Hanford site,” Watson said. “This highlights the critical need for resources to address Hanford’s aging tanks, which will continue to fail and leak over time.”

Despite the leak, Watson said:

“Based on the information we have right now, the leak poses no immediate increased risk to workers or the public, but it adds to the ongoing environmental threat at Hanford.”

This new leak puts added pressure on lawmakers on Capitol Hill to include increased funding for nuclear cleanup. 

Since the Atomic Age of the 1940s-1960s, nuclear waste, a byproduct from atomic weapons and or more current, nuclear waste from nuclear reactors, fuel processing plants, hospitals, and research facilities, has to be stored in underground facilities once the fuel is spent. A reoccurring theme of storage issues appears to be developing that structures built decades ago to hold waste breakdown over time, allowing waste to pour into the local ecosystem. 

The atomic age has scarred the ecosystem with microscopic particles of radioactive material still detected in honey.  

With billionaire Bill Gates attempting to push a new atomic age as a source of “green energy,” – it’s likely the increase of waste will just continue to be buried in underground tanks for future generations to deal with. 

Authored by MN Gordon via EconomicPrism.com,

Dr. Fauci still believes there are precarious levels of COVID-19 cases.  But he’s the only one.

By now, even the most fearful amongst us have come to a very obvious conclusion.  Fauci isn’t a real doctor.  He’s a quack.  An imposter.  A fraud.

Most people of sound mind and honest intentions are ready to move on.  Here in the ‘land of fruits and nuts’ things are even opening back up.  Governor Newsom, compelled by a recall election, is now granting some slack to the plebs.  He has to…or he’ll lose his job.

The reopening of an economy following a great plague – or even a moderate virus – is a remarkable time to be alive.  The impossible becomes possible.  DOW 36,000 is now within reach – only 22 years late.

Indeed, it feels great.  The stars have never burned brighter.  Water has never tasted sweeter.  And the first hues of sunrise have never been more colorful.

Yesterday the Commerce Department reported that Q1 GDP increased at an annualized rate of 6.4 percent.  This marks the second highest rate of quarterly growth since 2003 – exceeded only by the epic bounce in third quarter 2020.

But, alas, it did not live up to expectations.  Egghead economists surveyed by Bloomberg predicted Q1 GDP growth at an annualized rate of 6.7 percent.

Somehow $2 trillion in stimulus couldn’t nudge GDP growth above expectations.  But we’re certain the Commerce Department will make up for the 0.3 percent miss in their two scheduled forthcoming revisions to Q1 GDP growth.

Regardless, at this point who really cares.  GDP is backward looking.  What can we expect going forward?  Where are things headed next?

Dr. Copper

To answer this question, we’ll consult with a real doctor – not a quack doctor like Fauci.  Specifically, we turn to Dr. Copper for an honest answer…

Dr. Copper – the metal with a PhD in economics – is always the first to know which way the economy will go.  Copper’s broad use in industry and many different sectors of the economy, ranging from infrastructure to housing and consumer electronics, makes it a good early indicator of economic activity.

When copper prices rise, economic activity soon often follows.  When copper prices fall, the economy often then stagnates.  Over the last year, the price of copper has risen over 90 percent.

Copper is now at a 10 year high of $4.50 per pound, and just a scratch below its all-time high of $4.6255 per pound.  What’s more, the price of copper could go much higher.

Certainly, some of copper’s price rise may be attributed to rising demand for semiconductors, cellular towers, and other electronics.  But at least some of the most recent price rise is due to supply disruption.

The President of Chile, Sebastian Piner, recently had the gall to tell his country’s workers they could not make a third round of early withdrawals from their pension funds.  Piner, a Class A fuddy-duddy, still holds the antiquated belief that one must be retired to spend their pension fund.  And now this is contributing to a global copper supply crunch.

For example, this week port workers in Chile went on strike in protest of Piner’s blockage of additional early withdrawals from pension funds.  The strike threatens to disrupt copper shipments.

The reason this matters is because Chile is the world’s largest copper producer and is responsible for a quarter of the world’s copper mine production.

[Editor’s note: Paid up subscribers to the Wealth Prism Letter are sitting on 235 percent gains on shares of copper miner Freeport-McMoRan, which was recommended in February 2020.  The May edition of the Wealth Prism Letter will be published this coming Monday Morning, May 3.  Subscribe today to get first notice of our new recommendation; one with very promising prospects.]

What to make of it…

Dr. Copper is Talking, Are You Listening?

Copper’s price has been rising for much longer than port workers have been striking in Chile.  We believe it will continue to rise long after workers return to the docks.

Perhaps Dr. Copper is telling us the economy is on the up and up.  That a new building boom has commenced.  That we’re entering a post-COVID-19 period of renewed prosperity. 

Yet if you close your eyes and put your ear to the ground you’ll hear Dr. Copper telling something much, much more.

Specifically, you’ll hear Dr. Copper telling you that money supply inflation leads to asset price inflation, and commodity price inflation, and consumer price inflation, and, ultimately, complete societal breakdown.

The Federal Reserve’s balance sheet has doubled over the last 18-months.  Similarly, the price of copper is up over 90 percent over the last 12 months.  What’s next?

Are you ready for your grocery bill to double over the next year?

You should be.  Crop prices are now at an 8 year high.

Without question, rising consumer prices will amp up to a fever pitch over the hot summer months.  That’s when it will become apparent that the post-pandemic economic rebound was nothing more than an inflation surge.  Copper is telegraphing this.  Agriculture prices are too.

Gold and silver, confounded by enthusiasm for cryptocurrencies, have been left behind.  All the reason to add more to your stash…while you still can.

A top Israeli intelligence official has warned that if the end result of the Vienna talks is a return to the JCPOA nuclear deal, then war between Iran and Israeli will very likely follow.

Israeli Intelligence Minister Eli Cohen in Thursday comments said that “A bad deal will send the region spiralling into war” while repeating Tel Aviv’s position that it will not consider itself bound politically by the terms of any future US-Iran agreement. Tel Aviv has long viewed the 2015 nuclear deal as allowing Iran’s ‘path to a bomb’ – and so deems no part of it salvageable or valid.

“Anyone seeking short-term benefits should be mindful of the longer-term,” Cohen told Reuters. “Israel will not allow Iran to attain nuclear arms. Iran has no immunity anywhere.”

And this is where his remarks became particularly bellicose and threatening, saying next that “Our planes can reach everywhere in the Middle East – and certainly Iran.”

The Likid member of Knesset and Minister of Intelligence further highlighted the Islamic Republic’s ballistic missile program which must be stopped along with its “destabilizing other countries” and funding proxy militants throughout the region, primarily a reference to Hezbollah and allied forces in Syria.

The remarks show that Israel is certainly spooked by widespread reports of progress at Vienna, and most especially by the latest reports that Biden is mulling a “wholesale rollback” in Trump-era sanctions on Iran in order to restore the nuke deal. 

Israel’s consistent position through the years has been that the Obama-brokered JCPOA would be used as cover for Tehran to secretly pursue atomic bomb capability, which the Iranians have denied, asserting the program is only for peaceful domestic energy purposes, along with the Ayatollah issuing fatwas that say nuclear weapons are “un-Islamic”. 

Mossad has been allegedly engaged in a covert sabotage campaign to derail both Iran’s uranium enrichment facilities, and the Vienna talks themselves – but so far to no avail. Instead the attacks such as at Natanz on April 11 appear to have only hardened the Islamic Republic’s resolve to strike an agreement with the Biden administration. 

Meanwhile the Israelis are lobbying hard for the Biden administration to halt the talks via meetings in Washington with Secretary of State Blinken. Mossad chief Yossi Cohen and Israel’s ambassador Gilad Erdan are currently arguing for a new stringent deal which would make Iranian pursuit of nukes an impossibility; however, Iran has long warned that any entirely “new deal” is a non-starter. But that’s precisely the point: Israeli wants to see no rapprochement between Washington and Tehran whatsoever.

Authored by Paul Joseph Watson via Summit News,

A man was kicked off a Southwest Airlines flight because he didn’t wear his mask in between eating bites of food, which according to the TSA is now a federal mandate.

Yes, really.

“I, Avi Mandel, just got kicked off a plane because I wasn’t wearing my mask in between bites while I was eating,” said Mandel in a video shot immediately after the incident, which occurred while the plane was waiting to take off from Thurgood Marshall Baltimore Washington International Airport.

“The way I was treated was absolutely absurd. It was crazy and it wasn’t fair,” Mandel subsequently told WJZ, explaining that he had opened a pack of Twizzlers but was then told to mask up by a flight attendant who immediately “ran away.”

A loudspeaker announcement was then made to all passengers telling them, “Everyone who’s eating has to wear masks in between bites.”

The plane then returned to the terminal and Mendel, who said he remained calm throughout the incident, was escorted off by security.

“That is so wrong. He did nothing wrong. Wow!” passenger Stephanie Misiaszek commented during Mandel’s removal.

The most stunning aspect of this story is not that flight attendants were pedantically enforcing a stupid rule made up on a whim, but that this ludicrous practice is now a federal mandate.

After Mandel emailed Southwest, he was told that it is now official TSA policy.

“According to the Transportation Security Administration, passengers may remove masks while eating, drinking or taking medications but must put them on between bites and sips — and cannot leave them off for “prolonged periods,” reports the New York Post.

“If I knew this rule ahead of time, I would have happily listened, but I had no clue,” said Mandel, who has vowed never to fly with Southwest again.

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Palladium futures climbed Friday to over $3,000 an ounce for the first time as the market is worried about a shortage of the precious metal used mainly by automakers in exhaust systems and green technologies such as hydrogen power. 

Palladium briefly rose above $3,000 an ounce around 0445 ET. As of 0828 ET, palladium was up 1% at $2,981.

Prices have erupted since March 16, up more than 20% since Nornickel, a Russian nickel and palladium mining and smelting company, announced flooding at two of its mines. 

Since the COVID low in March 2020, palladium prices have jumped more than 100%.

“Many people thought palladium at $1,000 was a bubble. Wow was that wrong,” R. Michael Jones, chief executive officer at Platinum Group Metals Ltd. PLG, told MarketWatch. “As the world economy emerges from a COVID economic lockdown, personal transport will almost certainly be very popular.”

Given that, “palladium looks very good here in the short and medium-term,” Jones said.” Long term new applications for palladium and the other platinum group metals look interesting” in terms of the energy transition from hydrogen to batteries, he added.

UBS analyst Giovanni Staunovo told Reuters that palladium has been in a “structural deficit for ten years. We have seen above ground inventories falling to very low levels.” 

Lower inventories of the precious metal come as the global economy, supercharged by central banks and governments unleashing trillions of dollars into financial markets and real economies, has produced a demand surge from consumer and industrial goods.

Chris Blasi, president and chairman at Neptune Global, told MarketWatch that “increased automobile production directly drives increased demand for palladium, which is drawing on a strategic metal whose annual industrial demand has outstripped mine output for several years.”

Palladium is primarily used in catalytic converters in fossil fuel burning vehicles to help control emissions. Earlier this year, we noted catalytic converter thefts across the US skyrocketed as thieves take advantage of higher prices at scrap yards. 

Platinum is another precious metal used in catalytic converters that have seen prices soar to a six-year amid supply shortages. 

On a per announce basis, palladium is strongly outpacing gold in hopes that more stimulus will create a more robust industrial rebound. 

So the combination of an actual shortage of the precious metal, an artificially supercharged global economy, a green transition for hydrogen technologies, and, of course, momentum traders and anyone trying to make a quick buck has pushed Palladium prices to the moon. 

Via Global Macro Monitor,

This should dispel the notion…

Watch Jay Pow stumble over this question of why they are buying $40 billion a month in mortgages when there is a dearth of supply in housing.

Yikes @RudyHavenstein pic.twitter.com/50XeVGJhVL

— Tyler Neville (@Tyler_Neville_) April 28, 2021

Can’t wait to hear the Chairman justify zero rate policy and deficit monetization with inflation roaring at > 5 percent. It would be entertaining, if it weren’t so damaging.

The price of Lumber is 5x higher than it was 10 years ago.

Fed: “Ignore, Just Transitory.” pic.twitter.com/ffR2CKvvQZ

— Charlie Bilello (@charliebilello) April 29, 2021

Where To Inflation?

Here’s a pretty good theoretical model (follow the entire thread) estimating that U.S. inflation may reach double digits by Q1 2022. One of the premises is that monetary authorities have no way out of this rabbit hole and are constrained by the risk of severely disrupting financial markets in an asset dependent economy.

Recall our view that deflation/inflation is a corner solution and Wall Street’s “Goldilocks” scenario is still just a marketing gimmick. Deflation as markets try to move back to mean valuations – a lot lower – or inflation, and lots of it.

19/n

What this simulation tells us is that we should see a very, very sharp increase in US inflation in the coming months and inflation could be heading above 12% by the end of the year.

— Lars Christensen (@MaMoMVPY) April 29, 2021

h/t CG

Anyone with a better model, lay it on the table. Stop with the “fake news” or “don’t worry” nonsense. CPI prints > 4 percent in May and you heard it here first.

As shortages of COVID-19 vaccine supplies force more countries stretch the time between the first and second vaccine doses to try and vaccinate more people, the latest data out of a UK study of vaccination rates has stumbled on a disturbing finding: the study found that people who have had one dose are still at risk from mutated strains of the virus.

The study, published Friday afternoon in London by Imperial College London and published in the journal Science, examined the immune responses of health-care workers following their first dose of the Pfizer jab.

It found that people who had previously been infected saw significantly enhanced protection against mutant strains of the virus typically referred to as “variants”. Those who only received the jab, but weren’t previously infected, showed an immune response that was “less strong after a first dose, potentially leaving them at risk from variants.” The findings show that those who have received the Pfizer jab aren’t “fully protected” from COVID-19 variants.

Professor Rosemary Boyton, Professor of Immunology and Respiratory Medicine at Imperial College London, who led the research, said: “Our findings show that people who have had their first dose of vaccine, and who have not previously been infected with SARS-CoV-2, are not fully protected against the circulating variants of concern. This study highlights the importance of getting second doses of the vaccine rolled out to protect the population.”

Imperial College published the results in full on its website.

Meanwhile, another study released Friday came to a similar conclusion, showing that some patients who have received their first dose still wind up in the hospital with COVID symptoms.

The news appeared to weigh on US stocks, which tumbled to their lows of the session shortly after the news broke. Analysts claimed the study is a problem for the global growth outlook – which has already taken a hit thanks to to the latest data out of China – as countries like Canada aim to stagger doses by months to try and make the most out of limited supplies.

According to the latest data released on Friday, 65% of British adults have already received at least one dose, while 3,736,654 people were vaccinated in the past 7 days. More than 25% of adults in the country, meanwhile, have received both doses. 48,748,962 doses of COVID-19 vaccine have now been administered in the UK, while the US just announced that 100M Americans have now been fully vaccinated.

But the latest study data available suggests that patients who have received only one shot are still vulnerable. Researchers say the findings are reassuring because vaccines are never 100% perfect and failures are expected. But others have said that the most vulnerable patients may be letting their guard down too soon after one vaccine.

The study analyzed a quarter of all hospital patients in England, Scotland and Wales between early December and early April, and is one of the first to look at the impact of vaccinations on the numbers of people subsequently admitted to hospital.

Prof Calum Semple, study leader from the University of Liverpool, told the BBC that this data represented strong real-world evidence of few vaccine failures.

“It’s reassuring that the numbers admitted are very, very small – and mostly in those at risk of severe disease,” he said.

Meanwhile, Dr. Annemarie Docherty, a study co-author and honorary consultant in critical care, warned that this is just the latest sign that patients are assuming they’re “safe” immediately after being vaccinated, rather than weeks later.

“It’s entirely possible that elderly people will catch coronavirus again and may die,” she said.

In the study, 526 people who tested positive for coronavirus were admitted to hospital from 21 days after one vaccine dose, and 113 died – out of more than 3,500 hospitalised patients in the study. The data comes from the ISARIC/CO-CIN study, which has been presented to the government’s scientific advisers, Sage, but not yet reviewed by other experts. More complete NHS hospital data is set to be released in due course.