EU has drafted list of 15 nations that could be allowed to resume travel with the EU starting July 1st, and US is still not among them - press
- Canada and Japan are included on the list and China may be cleared to resume travel to the EU as well.
- The list has not been finalized but diplomatic sources say member states have been asked to approve it by Saturday evening.
Old Drugs Could Reveal a New Way to Attack the Coronavirus
Researchers found that SARS-CoV-2 hijacks tendrils that grow from infected cells and may ride them to infect others. But existing compounds might slow their roll.
IT’S NOT EASY to spot filopodia. Thin wisps of protein less than a micrometer across, they dangle from the surface of a cell, probing its surroundings much as we might grope our way around a darkened room. Usually, they help the cell explore and communicate with its neighbors. But recently, a team of researchers imaging cells infected with SARS-CoV-2 noticed some strange filopodia behavior. Seen through an electron microscope, the filopodia resembled the sprouting tubers of a long-abandoned potato. The tendrils were gnarled and extended, branching outwards at the tips. And all along them were buds of the virus. They seemed to be hitching a ride—part of their onward journey to nearby cells.
The discovery of these unusual filopodia was, according to Nevan Krogan, a systems biologist at UC San Francisco, largely by happenstance: His team had been searching for drugs that might hamper the virus’s ability to turn cells into replication factories. To do that, they look for changes that occur in infected cells—which proteins fade or multiply, which cellular processes are turned off or on—deciphering how the virus goes about its hijacking. Then they look for drugs that throw a wrench into the virus’s plans. In particular: old drugs, which have already been approved to treat other diseases or are on their way to it. The results from the team’s recent search are expected to publish Saturday in the journal Cell.
Krogan’s team—a vast collaboration that includes dozens of researchers around the world—is one of a number of groups engaged in a strategy known as drug repurposing. The idea is to short-circuit the long road to a new treatment. It works, in part, because many existing drugs are fairly blunt instruments, exploiting weaknesses that are common across different pathogens. Take remdesivir, which was developed by Gilead over a decade ago to treat Ebola patients. In that quest, it failed. But now there’s evidence it can help treat Covid-19. Other repurposing efforts take advantage of the common ways the body responds to different pathogens. That’s the story for dexamethasone, an old steroid normally used for ailments like croup that the UK’s Recovery trial recently found effective in calming the overactive immune response in critically-ill Covid-19 patients.
To find promising candidates, researchers often comb through libraries of thousands of compounds and apply doses of them to infected cells, looking for ones that get rid of the virus at a safe dosage. But Krogan argues that the process can be more targeted than that. While a brute force approach may eventually yield a hit, the less you know about how a particular drug works, the more hurdles lie ahead. He points to the antimalaria drug hydroxychloroquine, which worked well in a dish, but turned out to be no better than a placebo in preventing Covid-19 infections among exposed people. “There are thousands of people testing hydroxychloroquine without understanding what it does,” he says. “It kind of drives me crazy.” So instead, the team tries to develop leads by examining how the virus rewires a cell’s basic biology, turning off some functions while amplifying others.
In an initial study, published in April in the journal Nature, Krogan’s team examined the interactions between proteins in the virus and human cells, then looked for drugs that would interfere. They published a map of those interactions, which researchers and drug companies have scoured for candidates for further animal studies and clinical trials.
“It’s a lot more critical to identify where that drug is working, because ultimately you don't want to go blindly into a human trial or even an animal experiment,” says Jason Kindrachuk, a microbiologist at the University of Alberta who isn’t involved in the research. The approach is by no means a guarantee, but it’s a good way to generate leads that researchers can study more deeply. “All of this information is amazingly useful,” he says.
The new UCSF-led research takes a slightly different approach. This time, they measured changes in an activity called phosphorylation, which plays a role in flicking cellular processes on and off: everything from how the cell grows and divides and dies to, yes, how it develops filopodia. The activity is managed by a type of protein called kinases. The researchers infected cells from African green monkeys, known for their high susceptibility to SARS-CoV-2, and, using mass spectronomy, looked at how phosphorylation changed over time. They then mapped the activity to analogous kinases in human cells, finding substantial changes in 49 of them.
Some of the affected pathways seemed intuitive, inhibiting cell processes like division and apoptosis, or cell death. “It’s a cool snapshot,” says Julia Schaletzky, a drug discovery researcher at UC Berkeley who wasn’t involved in the study. “The virus just wants to make sure the cell starts working for you, the virus, ASAP. It drops everything except for making more particles.”
The next task was to find drugs that block the misbehaving kinases. “What’s so great is there are so many different drugs that work against them,” Krogan says. Many of the team’s candidates were cancer drugs, designed to quell cellular processes gone haywire. To source them, Krogan turned to a colleague at UCSF, chemist Brian Shoichet. “You go in his freezer and you can find an inhibitor for any kinase. And if he doesn’t have it, he knows how to get it,” he says.
Collaborators in Paris and New York then tested 68 compounds known to inhibit the kinases, searching for those that could eliminate the virus at a dose that didn’t also kill the monkey cells. In that respect, most didn't pass muster. But six or seven of the compounds, Krogan says, were particularly promising, including a handful that were “more potent than remdesivir,” which they used as a control.
Among them was a compound called silmitasertib, which inhibits a kinase called CK2, and is being tested as a cancer drug. The researchers had already identified it in their prior Nature study based on protein interactions. And in the course of that research, they also noted interesting structures emanating from the infected cells. They turned to yet more collaborators—this time at the University of Freiburg in Germany and at Rocky Mountain Labs in Montana—to image the infected cells in greater detail using electron microscopes. That’s when they found those unusually spindly filopodia, along with clusters of both the virus and CK2.
“It’s exciting but preliminary,” says Jenny Gallop, a biochemist at the University of Cambridge who studies filopodia. With her own lab temporarily shuttered due to the pandemic, she’d been scouring the internet for signs that filopodia might play a role in SARS-CoV-2. She had reason to suspect they might. Viruses, including Marburg and Ebola, have been found to hijack filopodia, forcing them to grow longer, branch, and ferry virus particles into their neighbors. The mechanism is especially well-studied in another virus called vaccinia, she notes, where research has suggested it plays a role in “superspreading” the virus from one cell to others.
The difficulty, Gallop says, is that imaging tiny filopodia is an arduous process. The level of detail the researchers managed in a short time is no small feat, but more experimentation and imagining is needed to confirm whether the researchers have identified the right mechanism. CK2 is an important kinase that plays a role in many cell processes, she notes; plus, other kinases have roles in filopodia development. A next logical step for firming up the link would be to see if silmitasertib, as a CK2 inhibitor, actually limits the growth of filopodia in infected cells.
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That’s one limitation of basing a search for drugs on cellular changes, Schaletzky notes. While the underlying biology can be useful, it can be hard to draw causative links because we only know so much about how cellular processes actually work. “It’s an educated guess model,” she says. “Not surprisingly, a lot of things change in the cell when you expose it to something new.” But she adds the more potent compounds in the Cell paper could be good leads for further study. “It’s exciting to see tangible outcomes from an approach like this,” she says.
Moving forward, one challenge for the kinase inhibitors, in particular, is their toxicity—they may end up interfering with processes that certain cells need to survive. Plus, some drugs might not prove appropriate in the context of Covid-19 treatment. Because much of the viral replication happens early in the disease, kinase inhibitors are more likely to work as an early intervention, Schaletzky points out. Later on in disease, the greater danger becomes inflammation from a haywire immune system reaction. (That’s one reason why steroids like dexamethasone are useful for treating the severely ill.)
“Ultimately what’s really going on during infection—which tissues are infected, the immune system reacting, the timing, the dosing—it’s a different story,” she says. What works in a dish of monkey cells may not work in a living animal, much less human lungs. “Even if you find a perfect inhibitor against some obscure kinase that might help mess up SARS-CoV-2’s plan in monkey cells, will it work in an animal model?” she asks. At a certain point, the only way to know is to test.
Krogan says he plans to do just that. Some of the compounds identified in the study are already in the clinical pipeline for Covid-19—and for those, he’s happy to have companies take on the expensive task of testing them. For the others, he says, “if they don’t, we will at some point.” Of particular interest, he adds, is testing combinations of compounds, noting the success of the three-drug cocktail currently used to treat HIV. Perhaps they’ll try one of these compounds they identified along with remdesivir, to see if it improves the virus-clearing effects at a lower dose. “By doing the biology first, you can be so much more intelligent when you get to specific combinations,” he says. “The more you know about your foe, the easier it is to defeat.”
Shopping in New York City, at least in the Before Times, was all about the schlep. The schlep—heaving heavy shopping bags across the city, often between boroughs and on several forms of public transportation—was rarely a planned activity. I think of the time, a few summers back, when I saw the most beautiful, jumbo-sized aloe plant in the window of a gardening supply store in the flower district as I was on the way to meet a friend for a drink. I ended up carrying it with me to the bar, balanced on my hip like a chubby toddler. It rolled along with us to a second location for dinner, and then rode the 7 train home. Shopping for me has never been only about the thrill of accrual (I eventually end up purging half of what I drag home); it’s about the pleasure of roaming the city, of long walks with drooping bags, of swinging your new purchases into the back of an idling cab.
I did not expect to miss the schlep when nonessential retail stores first closed down, in mid-March, as the coronavirus took hold of the city. Anything I needed I could summon to my doorstep; anything I didn’t need I was scared to let pass the threshold for fear of contamination. Self-quarantine felt, for a moment, like an opportunity to recalibrate my consumer habits. No more impulse-purchasing bodega flowers that would wilt inside my tote bag before I could get them home. No more splurging on a pair of shoes, on sale in a SoHo shop window, only to wear them once. (Remember wearing shoes?)
Online, I limited my shopping to things at least somewhat practical—bath bombs, good marmalade, whatever else seemed like it might improve life indoors. But, recently, as New York City has begun its process of reopening retail stores and other businesses, I’ve ventured out into my Brooklyn neighborhood tentatively seeking, for the first time in months, the old feeling of strolling and touching things, and maybe even acquiring something new.
It will be a long while before flânerie-style shopping will fully return to the five boroughs. While much of the rest of the country has reopened nonessential retail (a move that, given the spike in coronavirus cases in some states, may well have been premature), New York has taken a more cautious approach. On Monday, June 8th, Governor Andrew Cuomo cleared the city for “Phase I” reopening, which allowed businesses (including stores selling clothing, flowers, home goods, sporting equipment, cosmetics, luggage, and jewelry) to begin curbside or in-store pickup only. This past Monday came “Phase II,” which permits customers to enter stores in limited numbers. Still, many of the biggest stores continue to sit dormant on retail thoroughfares; on Broadway in SoHo, Nike, Victoria’s Secret, and Lululemon remain entirely shuttered. (I know this only from calling the stores to check: like many New Yorkers who don’t own a car and remain leery of the subway and cabs—and are too short to fit on a CitiBike—I could go shopping in SoHo only by trekking there on foot.)
One storefront that had its lights on was Lockwood, a home-goods and gifts shop owned by Mackenzi Farquer, who operates five businesses of the same name in Queens and Brooklyn. The store manager, Molly Morlock, was inside by herself, perched on a high stool and wearing a floral mask. A small table blocked the entrance from the street so that customers could not enter. I approached it and inquired about a cheerful rainbow wall hanging I’d noticed in the window. Morlock retrieved one for me from the back of the store. I also asked to see some throw pillows, which she picked up and displayed for me, at a distance, like showcase items on “The Price Is Right.” I left my credit card on the table and stepped back into the street while Morlock rang up the wall hanging and a gray-tasselled pillow; afterward, I cleaned my card with a Lysol wipe from my tote bag. This new retail etiquette was not much different from the choreography that most New Yorkers have learned at pharmacies or groceries in recent months, but it felt distinctly strange and indulgent: with only one customer passing through stores at a time, and no other staff members to share shifts with, retail clerks have effectively become personal shoppers.
Later, by phone, Farquer, the owner, told me that, when it came to rehiring employees, she had to think differently about what the job entailed. She needed people who “are willing to sit in a store completely alone for hours, with maybe only two or three pickups, doing a job that they were not hired to do.” Reopening, like closing down, has been improvisatory. “I am in a group text with eight other small-business owners and none of us know what the right thing to do is,” Farquer said. Mayor Bill de Blasio “hasn’t told us,” she added. “We can’t find any consistent guidelines anywhere. So we are just trying to use common sense, and pivot.”
Nearby, on Franklin Street, the luxury-shoe and leather-goods purveyor Brother Vellies was not yet officially open to the public, but four employees were inside taping up cardboard boxes. By phone afterward, the store’s owner, the designer Aurora James, told me that the group was fulfilling mail orders as part of a subscription service that she launched at the beginning of the pandemic. For thirty-five dollars a month, her two thousand subscribers receive small surprises in the mail—a terra-cotta mug, a hanging vase. “Luxury shoes and bags in a global pandemic—people are not interested, nor do I want to force consumers to be interested,” she said. Late last month, as protests against the killing of George Floyd swept the city, James launched a campaign, “15% Pledge,” calling for large retail stores to stock fifteen per cent of their products from black-owned businesses. “We represent 15% of the population and we need to represent 15% of your shelf space,” she wrote on Instagram, adding, “You want to be an ally? This is what I’m asking for.” Sephora became the first company to officially sign on, followed by Rent the Runway.
Earlier this week, as Phase II of reopening began, I took another long walk around the neighborhood and spotted small signs of new life. On Franklin Street, the clothing boutique Alter was still open only for curbside pickup, but a few people with shopping bags tucked under their arms paused to inspect the jewelry and hand-dyed shirts in the window. Most stores still seemed caught in a state of semi-animation: there were signs in the windows thanking clientele for their patience and loyalty, or listing phone numbers that customers could call to arrange private deliveries. Shopping, for the foreseeable future, will remain more intimate and more purposeful—and more uncertain—than it used to be. “Five stores is a lot,” Farquer, of Lockwood, told me, when we spoke. “I definitely have a list of which ones we will close if there is a second wave.” A block over from her store on West Street, the plant store Greenery Unlimited had a modest line of people waiting to enter, two at a time. The space has giant, garage-style doors, which were thrust open, giving it the feel of an open-air market. I ended up waiting to go in, and purchased a sixteen-pound bag of potting soil, along with a small philodendron that I hope will wind its way across my office wall. For the duration of my twelve-minute walk home, the schlep was back.
The remote Siberian town of Verkhoyansk, three thousand miles east of Moscow and six miles north of the Arctic Circle, has long held the record, with another Siberian town, for the coldest inhabited place in the world. The record was set in 1892, when the temperature dropped to ninety below zero Fahrenheit, although these days winter temperatures are noticeably milder, hovering around fifty below. Last Saturday, Verkhoyansk claimed a new record: the hottest temperature ever recorded in the Arctic, with an observation of 100.4 degrees Fahrenheit—the same temperature was recorded that day in Las Vegas. Miami has only hit a hundred degrees once since 1896. “This has been an unusually hot spring in Siberia,” Randy Cerveny, the World Meteorological Organization’s rapporteur of weather and climate extremes, said. “The coinciding lack of underlying snow in the region, combined with over-all global temperature increases, undoubtedly helped play a critical role in causing this extreme.” Siberia, in other words, is in the midst of an astonishing and historic heat wave.
Anthropogenic climate change is causing the Arctic to heat up twice as fast as the rest of the planet. Climate models had predicted this phenomenon, known as Arctic amplification, but they did not predict how fast the warming would occur. Although Verkhoyansk has seen hot temperatures in the past, Saturday’s 100.4-degree record follows a wildly warm year across the region. Since December, temperatures in western Siberia have been eighteen degrees above normal. Since January, the mean temperature across Siberia has been at least 5.4 degrees Fahrenheit above the long-term average. As the meteorologist Jeff Berardelli reported for CBS, the heat that has fallen on Russia in 2020 “is so remarkable that it matches what’s projected to be normal by the year 2100, if current trends in heat-trapping carbon emissions continue.” By April, owing to the heat, wildfires across the region were larger and more numerous than they were at the same time last year, when the Russian government eventually had to send military aircrafts to battle vast blazes. The scale of the current wildfires—with towering plumes of smoke visible for thousands of miles on satellite images—suggest that this summer could be worse. Because of the coronavirus pandemic, they will also be more complicated to fight.
Toward the end of May, as the sun stopped dropping below the horizon, the heat continued. In the town of Khatanga, far north of the Arctic Circle, the temperature hit seventy-eight degrees Fahrenheit, or forty-six degrees above normal, topping the previous record by twenty-four degrees. The heat and fires are also hastening the dissolution of Siberian permafrost, perennially frozen ground that, when thawed, unleashes more greenhouse gases and dramatically destabilizes the land, with grave consequences. On May 29th, outside Norilsk, the northernmost city in the world, the thawing ground buckled, causing an oil-storage tank to collapse and spew more than a hundred and fifty thousand barrels, or twenty-one thousand tons, of diesel fuel into the Ambarnaya River. The spill was the largest to ever occur in the Russian Arctic.
Norilsk, which was constructed in the nineteen-thirties by prisoners of a nearby Gulag camp, Norillag, was already one of the most polluted places in the world. Most of its hundred and seventy-seven thousand residents work for Norilsk Nickel, the company that owns the collapsed oil tank. Its massive mining and metallurgy complex alone is worth two per cent of Russia’s G.D.P. The city contributes a fifth of the global nickel supply and nearly half of the world’s palladium, a metal used to make catalytic converters. Factories billow clouds of sulfur dioxide incessantly, and the resulting acid rain has turned the city and its surroundings into an industrial wasteland, with no green space or parks, just dirt and dead trees. Life expectancy in Norilsk is twenty years shorter than it is in the United States. The last time the town made the news, before the oil spill, was exactly a year ago, when an emaciated polar bear, a refugee from its melting home, was photographed rummaging through the city dump.
Norilsk Nickel’s executives have tried to skirt responsibility for the oil spill by blaming the thawing permafrost—or, as a press release stated, “a sudden sinking of the storage tank’s pillars, which served accident-free for more than thirty years.” But the thaw did not happen unexpectedly, out of nowhere. Buildings in Norilsk have collapsed because of the sagging ground. Russian and international experts have been aware of the risks that rapidly thawing permafrost represents for more than a decade. A 2017 report from an Arctic Council working group said that “communities and infrastructure built on frozen soils are significantly affected by thawing permafrost, one of the most economically costly impacts of climate change in the Arctic.” They found that thawing permafrost could contaminate freshwater, when previously frozen industrial and municipal waste is released, and that the bearing capacity of building foundations has declined by forty to fifty per cent in some Siberian settlements since the nineteen-sixties. They also noted that “the vast Bovanenkovo gas field in western Siberia has seen a recent increase in landslides related to thawing permafrost.” The authors of a 2018 paper, published in Nature Communications, found that “45% of the hydrocarbon extraction fields in the Russian Arctic are in regions where thaw-related ground instability can cause severe damage to the built environment.” The paper continued, “Alarmingly, these figures are not reduced substantially even if the climate change targets of the Paris Agreement are reached.”
The company’s initial response efforts—floating booms to contain the spill—largely failed. By June 9th, the oil had entered the forty-three-mile-long Lake Pyasino, which borders a nature preserve and flows into the Pyasino River. “Once it enters that river system, it can’t be stopped,” Rob Huebert, an Arctic expert at the University of Calgary, said. “The oil could then make its way to the Arctic Ocean.” On June 11th, Russia’s investigative committee charged Norilsk’s mayor with criminal negligence, for his botched response to the disaster. Last Friday, in another video call, Putin’s emergencies minister reported that response teams had collected 3.6 million cubic feet of polluted soil and 1.1 million cubic feet of contaminated water. The company will construct a pipeline to pump the contaminated muck to unspecified disposal sites. But the region will remain toxic. Diesel oil seeps into river banks. Even if the oil is contained to the lake, the contamination can never be fully removed. Some of it will make its way through the food chain. Wildlife—fish, birds, reindeer—could suffer for decades. “You can’t ever really clean a spill up,” Huebert said. Putin, in the call, emphasized that work must continue until the damage is remedied. “Obviously, the disaster has brought dire consequences for the environment and severely impacted biodiversity in water bodies,” he said. “It will take a lot of time to reclaim and restore the environment.”
Putin, however, is not known for his environmentalism. His anger and concern about the Norilsk oil spill might have more to do with how much it exposed his government, making visible the overwhelming economic and environmental risks facing oil, gas, and mineral development in Siberia if temperatures there continue to rise. “The Russians’ continued development of oil and gas in the central Arctic region is their economic future,” Huebert said. “The Russians’ interest in all this is to keep the oil flowing, whatever it takes.” But sixty per cent of Russia is permafrost. Although much of the newest oil and gas infrastructure in the Far North has been engineered with climate change in mind, temperatures are currently on track to far exceed projections. Perhaps that is why the Kremlin did, finally, officially ratify the Paris accord last October. And yet the Kremlin continues to incentivize increased oil and gas development in eastern Siberia and the Arctic, which will lead to more greenhouse-gas emissions, which will continue speeding up the permafrost thaw.
The fallout of such policies will most immediately affect the health and survival of local communities. By 2050, according to the Nature Communications report, the loss of ground stability will affect at least a third of the infrastructure in the Arctic’s permafrost zone, and the lives of nearly four million people. But these policies also have dire global implications. With its abundant plant life, the Arctic, for tens of thousands of years, was a carbon sink for the rest of the planet. Permafrost across the Arctic and boreal regions contains between 1.46 trillion and 1.6 trillion tons of organic carbon, which is almost twice the amount present in the atmosphere today. This carbon includes hidden pouches of ancient methane, plus long-frozen organic matter (akin to a frozen compost pile) that can release carbon and methane once microbial life awakens in the warming ground. With rising temperatures, researchers have recently found, more and more of this carbon is being released, turning the Arctic into a carbon source. Sue Natali, a scientist at the Woods Hole Research Center, told me that, even though climate change has caused an increase in summertime Arctic plant life, which absorbs carbon dioxide, it is not enough. The warmth also increases the microbial decomposition of soil and plants in the winter, resulting in a higher annual release of carbon. “While the plants may have been ramping up,” she said, “in the wintertime, the microbes are keeping pace and actually exceeding them.” This cycle creates a terrifying feedback loop: more warming releases more carbon from the permafrost, which creates more warming. A study that Natali co-authored last fall projected that, if business continues as usual (in terms of emissions), by 2100, the Arctic could emit forty-one per cent more carbon each winter than it does now. That amount equals the emissions from two hundred and sixty-six million cars, nearly as many as are currently on the road in the United States.
The permafrost found in the area surrounding Verkhoyansk is some of the deepest and oldest in the world, descending as much as five thousand feet. Closer to the surface, a type of ice-rich permafrost known as yedoma is particularly vulnerable to rapid thaws. The result is thermokarst, the strange and sometimes shocking topography that forms as the land slides, sags, and sinks. Mysterious sinkholes suddenly appear, drunken forests fall, and hillocks destroy farmland. One of Russia’s most extreme examples of thermokarst, known as the Batagay megaslump, is a two-hundred-and-eighty-foot-deep, half-mile-wide depression, situated just outside Verkhoyansk. It first began forming as a small gully in the nineteen-sixties, because of deforestation, but has grown significantly in recent years, exposing the remains of ancient creatures, including musk ox, a cave lion, a Pleistocene wolf, a woolly mammoth, and an almost perfectly preserved, forty-thousand-year-old foal. While exciting for scientists and tusk hunters, the megaslump is another sign of the challenges that people in the region—home to several indigenous cultures and languages, including Sakha, Evenki, Even, and others—face if they want to remain on their land. Some locals call it a gateway to the underworld, which seems appropriate, as the slump releases more and more methane. Researchers who have been to the slump say that they can hear the thuds, booms, and cracks of the thawing ice. This summer, the sound will be especially loud.
V-Shaped Narrative Dies As Commercial Real Estate Bust Accelerates
The last week of June marks the time when investors lost hope for a V-shaped economic recovery as confirmed COVID-19 cases are exponentially rising in Texas, Florida, and California, and the Tri-state area imposed quarantine restrictions on travelers. Reopening in some of these states has also been delayed as retailers close up brick and mortar shops for a second time.
With that being said - the V-shaped recovery narrative is imploding - as many on Wall Street indiscriminately bought stocks (some used picking Scrabble letters to buy) as their belief in the Federal Reserve's money-printing would lift the economy out of one of the worst downturns since the 1930s.
Though the economy was never lifted in a V-shaped formation, instead, the stock market rose to new highs as wreckless financial speculation led to an army of Robinhood daytraders buying bankrupted companies.
With the euphoric period likely behind us, notably, because the Fed's balance sheet has contracted over the last several weeks and virus cases across the country are soaring - we now turn our attention to the commercial real estate bust.
During euphoric periods, like what's happened over the last several months in financial markets, the bad news is usually overpowered with happy stories (sometimes from Larry Kudlow) - but as sentiment shifts - we must not lose track of the instabilities that can wreck the financial system.
Bloomberg cites a new report via real estate research firm Savills, which details how the Manhattan commercial real estate industry could be headed for a prolonged downturn if there's no V-shaped recovery in the economy.
The report says Manhattan's office rents are likely headed to their lowest levels since 2012, that is if the economy doesn't have a speedy recovery. That means asking rents could drop by 26% to about $62.47 a square foot, the real estate services firm said.
A speedy recovery or not - the trend in corporate America is to work from home - companies have found ways to implement remote access for employees - and this trend will only gain momentum.
That being said, the office market in New York City is headed for a serious bust - with recovery years away.
"Many assume that when the stay-at-home measures are lifted, there will still be Covid-19 fears that will continue to materially influence behaviors and the economy," Savills said. "These fears will likely remain until a vaccine or antibody therapy is developed and widely available, which experts currently estimate is at least 12 months away."
It's not just the office market that is in trouble - we noted this week that one-third of hotels in the city could go bankrupt.
The cracks in commercial real estate have already emerged, in early June, there was a massive jump in CMBS delinquencies, suggesting the bust has only begun.
For more clarity on the recovery timeframes - UCLA Anderson Forecast's latest report suggests 2023.
