Today’s News 23rd December 2021

• Harvard Professor Charles Lieber Convicted Of Lying About China Ties
  Harvard Professor Charles Lieber Convicted Of Lying About China Ties

  Authored by Mimi Nguyen Ly via The Epoch Times,

  A Harvard University professor was found guilty by a U.S. jury on Dec. 21 of lying to authorities about his ties to the Thousand Talents Plan, the Chinese Communist Party’s (CCP) well-financed job recruitment program.

  

  Charles Lieber, 62, former chairman of Harvard’s Department of Chemistry and Chemical Biology, was found guilty by a federal jury in Boston on all counts—six felony charges made up of two counts of making false statements, two counts of filing false tax returns, and two counts of failing to file reports for a foreign bank account in China.

  The jury arrived at the verdict after 2 hours and 45 minutes of deliberations and five days of testimony.

  Federal prosecutors alleged that Lieber agreed in 2011 to become a “strategic scientist” at the Wuhan University of Technology in China and that he had participated in the CCP’s Thousand Talents Plan while working on sensitive U.S. research. Lieber was also a contractual participant in the program from at least 2012 through 2017, according to court documents.

  Prosecutors alleged that Lieber had filed false tax returns to misrepresent the funding that he received from the Chinese regime’s program. This included $50,000 per month plus $158,000 in living expenses and more than $1.5 million in grants from the Wuhan University of Technology.

  Prosecutors also alleged that he lied about his role in the program in response to inquiries from the U.S. Defense Department and the U.S. National Institutes of Health.

  The CCP’s Thousand Talents Program has been in place since December 2008, targeting high-level overseas experts. It has been flagged by U.S. authorities over its threats to national security.

  Lieber was first charged in January 2020 and then later in June and July 2020, as part of the Department of Justice’s “China Initiative,” which was launched in 2018 under the Trump administration. The initiative sought to prosecute cases of economic espionage and research theft initiated by the CCP against the United States.

  President Joe Biden’s administration has continued the initiative, though the Justice Department has said it is reviewing its approach.

  Since Lieber’s arrest on the Harvard campus in January 2020, he has been on paid administrative leave.

  Lieber, who is currently battling late-stage lymphoma, will be sentenced at a later hearing, The Harvard Crimson reported.

  Tyler Durden
  Wed, 12/22/2021 – 23:40

• Ukraine Holds Provocative Drills Using US Missiles Near Separatist Area
  Ukraine Holds Provocative Drills Using US Missiles Near Separatist Area

  Ukraine’s leaders have made it known that they want Washington to impose new biting sanctions on Russia even before any military offensive materializes. And at a moment that it appears Russia, the US, and NATO are actually ready to enter negotiations on ‘security guarantees’ related to NATO expansion, it appears Kiev is willing to do whatever it takes to conduct some muscle-flexing, possibly toward derailing the potential for January de-escalation talks. 

  In what seems its most provocative move thus far, “Ukrainian military forces have conducted combat drills with U.S.-made Javelin anti-tank missiles in a conflict area with separatists in eastern Ukraine as tensions run high with Russia, Ukrainian Dom television channel said on Wednesday,” Reuters reports.

  

  It should be remembered that Ukraine’s receiving the Javelin missile since at least 2018 has already been a source of outrage among Moscow officials. Kiev is justifying the exercises as necessary in the face of ‘Russian aggression’ – given the widespread reports of some 70,000 to 90,000 Russian troops mustered across the border. 

  Recent reports have suggested that Ukrainian national forces have in past months used the US-supplied javelins in combat with pro-Russian separatist forces in the Donbass region.

  Ukraine’s President Volodymyr Zelensky and his top officials have charged that the Kremlin is readying a military invasion of Eastern Ukraine by the end of January, something firmly denied by Putin. 

  Interfax, meanwhile, confirmed that Russia’s military held its own drills in the region on Wednesday:

  Russia held its own military drills nearby, the Interfax news agency reported on Wednesday. SU-30 fighter jets and SU-24 bombers from the Black Sea Fleet did aerial refuelling exercises over Crimea, the Black Sea peninsula which Russia annexed from Ukraine in 2014.

  “The flights were conducted in the sky over Crimea,” Interfax quoted Russia’s Black Sea Fleet as saying. Around 20 pilots practised complex flight tasks, it said, which included mid-air refuelling at altitudes ranging from 2,000 to 6,000 meters at speeds of around 600 km/h.

  Also on Wednesday, Ukraine’s Secretary of the National Security and Defense Council Oleksiy Danilov revised numbers upward regarding Russian troop estimates Kiev believes are stationed near the border. He stated that 122,000 Russian troops remain within 200 km (124 miles) from Ukraine’s border.

  

  Above: Image of one of the Wednesday test launches posted to a Ukrainian news site.

  2018 Ukrainian Army test launches of the US-supplied Javelin missiles…

  “As regards the number of troops directly. Today, what we see is 122,000 located at a distance of 200 km and 143,500 soldiers of the Russian Federation are at a distance of 400 km in this radius from our border,” Danilov said.

  Tyler Durden
  Wed, 12/22/2021 – 23:20

• The Clouds Have Cleared In 2021, And What We Are Seeing Is A Dystopian 2022
  The Clouds Have Cleared In 2021, And What We Are Seeing Is A Dystopian 2022

  Via Birch Gold Group,

  This year was a doozy. Right out of the gate, millionaires were sounding the alarm that the markets were looking overvalued while reducing their risk exposure.

  In February we got a taste of what could be the “end game” for the U.S. dollar as we saw it lose more of its grip as global reserve currency. Of course, it won’t collapse overnight because market psychology is still propping it up (for now).

  But three big major economic influences have made 2021 one to remember. This chaotic “trifecta of market turbulence” kept the media busy and retirement savers on the edge of their seats.

  

  So without further ado, let’s dive into the first one…

  The confused Fed

  Back in 2019 when the repo markets started going crazy, we reported how the Fed’s “confused” response only added fuel to a fire that continued to burn into this year.

  And this year, one word you might have heard coming from Powell’s mouth with nauseating frequency to describe rising inflation was “transitory.” Over and over again, Powell’s confused Fed kept downplaying inflation…

  Until it was obvious to everybody that inflation wasn’t transitory any longer. When Senator Pat Toomey challenged Powell during an appearance before Congress, the Fed chairman was forced to change his tune:

  Powell explained that while the word has “different meanings to different people,” the Federal Reserve “tend to use it to mean that it won’t leave a permanent mark in the form of higher inflation.

  “I think it’s — it’s probably a good time to retire that word and try to explain more clearly what we mean,” Powell added.

  (We’ll discuss this in greater detail in a moment.)

  The Fed’s supermassive interventions blew up not only their balance sheet (566% higher than in 2007), but also a truly historic “everything bubble.”

  This remarkable house of cards has sent asset prices soaring. Stocks are overvalued more than any other time in American history. Bonds, from Treasurys to junk, have negative after-inflation yields. Nationwide, housing prices are well above the peak of the 2008 housing bubble.

  Investors became speculators and lost millions on meme stocks, and then spent millions more on cartoons of monkeys.

  2021 has been one of the most challenging periods in recent economic history to report on. Because just when you think things can’t get any more insane, events prove you wrong.

  Bloomberg’s Matt Levine put it best:

  The basic issue is that right now everything is dumb… Buy some stock in a struggling company and, instead of going out and pitching your plans to BlackRock and Vanguard, get on Reddit and say like “if my board slate is elected we’re gonna take XYZ Co. to the moon and squeeze those short sellers, rocket emoji rocket emoji rocket emoji, not a proxy solicitation, read my SEC filings for full disclosures.” Draw a picture of an ape riding a rocket and slap it on your proxy statement. Call your activist fund Diamond Hands Capital LP.

  Basically you want to buy stock in a company, push it to become a meme stock, and then sell the stock at a huge profit to people on Reddit.

  The Fed has spared no effort to create an illusion of prosperity. The only problem (other than rampant inflation) is that it simply can’t last forever.

  We believe the Federal Reserve will be forced to choose between a hard market crash or runaway inflation. They’re trying to thread the needle.

  The Fed began tapering asset purchases this month and will keep doing so into next year. Meanwhile, interest rates are still near zero, inflation continues to climb and even the most overexuberant speculators are running out of cash…

  The “confused Fed” heading into 2022: It looks as though the Fed will stick to interventions heading into the next year, and we expect at least three interest rate hikes. According to IMF spokesperson Gerry Rice, this is a “well calibrated response to price pressures.”

  But based on Powell’s prior track record, we’ll have to wait and see how he actually decides to handle “Inflation Nation.”

  And this is critical, because once the illusion of prosperity has vanished, once the dreaming millionaires wake to find themselves broke, once all the imaginary money is gone, its legacy, inflation, will still be with us…

  Not even Powell believes surging inflation is “transitory” anymore

  Since the start of Biden’s term in January 2021, consumer price inflation (CPI) has been steadily increasing each month.

  You can see the official monthly tally on the bar graph below:

  

  This “tax that no one voted for” is still increasing as you read this. One example we gave back in June about the permanent damage done to people’s wealth:

  Consider our imaginary friend Arthur. He nets $100 per month. After a year of 5% inflation, Arthur’s monthly money buys 5% less. Next year, it turns out the inflation spike really was transitory, so the inflation rate goes to 0%.

  Here’s the thing: Arthur’s monthly income STILL buys 5% less.

  It’s as if Chairman Powell reached into Arthur’s pocket and stole $5 every month. Forever.

  Of course, the wealthy elite like Powell and his buddies don’t have to worry about the impact on Arthur’s income when they intentionally “let inflation run hot” because it’s “good for the economy.” (Just not for you.)

  Back in September (when inflation was 5.3%) we said the “inflation train” wasn’t traveling at full speed yet… Here we are in December, and it still doesn’t show any signs of slowing down.

  “Inflation Nation” heading into 2022: You can see how inflation is still pulling even more money out of Americans’ pockets in the graphic below…

  

  Source

  This will not get better anytime soon.

  You’ll see mainstream media reports that try to spin inflation as a good thing. They’ll say things like:

  “Social Security’s COLA is the highest in 40 years!” (That’s because prices have gone up. In other words, COLA is not a raise.)

  “Workers’ paychecks are going up!” (Yes, they are. Companies have budgeted to raise pay 3.9% overall this year, a little less than half the rate of inflation.)

  Oddly, even Biden attempted to justify the out of control inflation by stating rather defensively:

  Americans have more money in their pockets than a year ago.

  That’s technically true. What’s equally true is that “more money” simply buys less than it did a year ago.

  In 2022, inflation could turn into a nightmare. You might expect everyone who doesn’t have a net worth in the millions to start pinching pennies. You might expect the U.S. Mint to stop even making pennies.

  Stock market mania erupted in 2021

  In what was perhaps the most bizarre investor behavior this year, partly fueled by boredom and stimulus money, stock market mania turned into an all-out casino used for entertainment.

  People with nothing to do spent their stimulus money on risky stocks. Hyper-speculative investing led to memes like Wall Street Bets, which propped up failing stocks like GameStop and AMC theaters.

  On top of that, margin debt exploded to historic levels that will be tough to surpass (see chart below):

  

  Source

  Wolf Richter even called the stock market a “zoo that has gone nuts.”

  In April, this manic investing behavior led to a historic margin call at Archegos. Billions of dollars were lost in a fantastic market froth that will likely bubble up again at some point in the near future.

  Mania heading into 2022: You might think that knowing the market was severely overvalued and poised for a major correction would deter manic investing behavior.

  But if you thought that, you’d have been wrong, because in addition to the examples above, according to Forbes, meme stocks like AMC and GameStop might continue to get artificially inflated well into 2022:

  Although institutional investors are still worried so-called meme stocks could create risky financial bubbles, one team of experts argues the retail-trading frenzy propping up astronomical prices could very well continue into next year.

  And thanks to Facebook, something fittingly known as “Metaverse Mania” is now becoming familiar to manic investors who are looking for a high-risk fix.

  SPACs, NFTs, meme stocks and behind it all, a confused leadership we simply can’t trust to look out for our best interests.

  Make sure your savings are ready for anything

  After reviewing what transpired this year, it’s a good idea to ponder what happened and consider what might be coming up next.

  But considering that neither the U.S. Government nor the Federal Reserve could keep the dollar and economy under control, one good question to ponder would be:

  What will either the government or the Fed do differently in 2022?

  Of course this assumes they don’t keep trying to do the same thing and expect a different result. While they figure that out, it’s never the wrong time to reflect on Benjamin Graham’s words:

  In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long-run, the market is a weighing machine.

  It’s a good idea to take steps to ensure your portfolio stays as stable as possible. Take a few minutes to do your own “year-end review.” Are you “voting” or are you “weighing” with your savings? Are you taking appropriate levels of risk? Are you well-enough diversified to stay on track, regardless of what market insanity comes next?

  If you’re concerned about protecting your savings from inflation and market meltdowns, consider physical precious metals. Gold and silver both have a reliable track record of holding their value relative to inflation, and may be the safe haven you need to face the year ahead…

  We’ll have some things to say about that, so don’t forget to check back next week for our 2022 economic forecasts.

  Tyler Durden
  Wed, 12/22/2021 – 23:00

• 'Peddling' Obesity – McDonald's Customers Eat Big Macs While Riding Exercise Bikes
  ‘Peddling’ Obesity – McDonald’s Customers Eat Big Macs While Riding Exercise Bikes

  A hilarious TikTok video shows a woman downing fast food and riding an exercise bike inside a McDonald’s in China. 

  The video has clocked an astonishing 32 million views, 2.1 million likes, and 39,000 comments in just days. The woman is barely peddling while she consumes her meal. 

  

  The clip was posted by Cris13yu, who captioned the video in Portuguese as “mc da China kkkk amei a idea,” which translates into “McDonald’s in China, I loved the idea.”

  @cris13yu

  mc da China kkkk amei a ideia

  ♬ som original – cris13_u

  https://www.tiktok.com/embed.js

  TikTok users were overwhelmingly impressed by the health-conscious effort by the fast-food company to have customers burn off some calories while eating greasy food. 

  However, some said, “bad for your digestive system lol. dont do physical activites while eating, eating needs a relaxed state so it can be digested well by the GI tract.” 

  Another person said, “still more calories consumed than burned.” 

  Someone asked: “Do they wipe the equipment after use?”

  Others hinted it looks like a scene from the dystopic television series “Back Mirror.” 

  McDonald’s could be testing a new concept for stores that would bring ‘health’ in mind. We joke and say the company should change its name to “McFitness.” 

  Tyler Durden
  Wed, 12/22/2021 – 22:40

• Bitcoin: This Will Make You A Believer
  Bitcoin: This Will Make You A Believer

  Authored by Thad Beversdorf via MacroHeathen.com,

  I’ve been quietly watching the BTC market figure out how to explain why BTC is profoundly positive for society. I’ve been disappointed with the attempts I’ve seen and so I’ve decided to throw my hat in the ring. 

  

  First we should define currency strength, which so many erroneously suggest is measured against other currencies as with DXY (a dollar index measuring USD conversion rates against a basket of currencies).  Measuring a currency strength relative to other currencies is akin to a group of stage 4 cancer patients arguing who among them is the strongest. The reality is they were all stronger prior to their cancer. 

  As with each cancer patient, their strength is not meaningful as a relative measure outside of themselves.  It’s only meaningful as a measure relative to themselves on a historical basis.  That is, are they stronger today than they were last month.  In the real world to real people, currency strength too is a historical concept based on purchasing power. Since I only purchase things in USD I don’t care how much I could purchase using Sterling. I only care if I can purchase more today than I could yesterday in USD. That brings me to the point of the article – aggregate net purchasing power, also known as, wealth and the impact of currency.

  The key principle difference between USD and BTC is that the former is a depreciating currency based on a principle of inflation (i.e. increasing money supply) while the latter is an appreciating currency based on a principle of finite supply.  All the BTC magic is wrapped in the economic principle of finite supply versus dynamic demand.  Or for the finance fellas… fixed vs float.  So long as the floating demand parameter has a positive slope the asset will appreciate.  That results in deflation (i.e. the persistent increase in purchasing power).

  BTC is the antithesis of inflation, devaluation, and fiat. It is the first appreciating currency in the industrialized world. But who cares? What is the significance of deflation (appreciating currency) vs inflation (depreciating currency)?  

  Having a 10-year history now provides enough observable data to draw out some of the fundamental differences between depreciating and appreciating currencies and the profound social and economic impacts of those differences.  So let’s get started…

  There are three main points I’m going to illustrate in this article.  The first is the impact to consumers, second is to savers, and finally the impact on the structure of capital allocation. 

  Let’s start by using Big Macs to illustrate the impact on consumers.

  

  The above chart depicts the price of a Big Mac, over the past decade, in both USD (green line) and BTC (orange line).  What we see is that in 2010 a Big Mac cost $3.73 or 37 BTC.  Today a Big Mac costs $5.71 or .0001 BTC.  Let’s assume we didn’t buy the Big Macs 10 years ago and instead put $3.73 and 37 BTC in a drawer. Now let’s assume we just found those currencies in the drawer and decided to go ahead and get us a Big Mac today.  

  The $3.73 would not get us even one Big Mac while the 37 BTC would get us 323,993 Big Macs today. The former is called inflation and the latter, deflation. Economists proselytize  inflation is good and deflation is bad, however, I’ve never once seen or heard a logical proof that inflation is good for the worker or consumer, despite the incessant narrative.  The proof simply does not exist.

  Now let’s have a look at the absolute mind-blowing impact that an appreciating currency has on savers. We’ll start by looking at the federal minimum wage over the last decade.

  

  10 years ago minimum wage workers received $7.25/hr and today they receive $7.25/hr.  Let’s look at that in terms of purchasing power using Big Macs. So in 2010 an hour of work (i.e. $7.25) would have purchased 1.94 Big Macs. Today that same hour of work (i.e. $7.25 minimum wage) would purchase us 1.27 Big Macs. The lesser amount is because the USD is a depreciating asset based on the principle of inflation.  

  Let’s take a parallel economy where minimum wage workers are paid in an appreciating asset (i.e. BTC) but pegged to the USD equivalent minimum wage. That would mean in 2010 the minimum wage would have been 72.5 BTC (equivalent to $7.25 in 2010). Today, the minimum wage would be .000145 BTC (equivalent to $7.25 today). It means the purchasing power of an hour of work is the same today whether they’re paid in USD or BTC.  That is, they could buy 1.94 Big Macs in 2010 and 1.27 Big Macs today regardless of which currency they are paid in.  So the inclination is to suggest that the worker is no better off being paid in BTC than USD.  But that inclination is dead wrong.  Here’s why.

  Savings.  Imagine that each worker in the parallel economies puts 10% of their income into a retirement savings account that earns 0% interest. Let’s compare the USD paid worker vs the BTC paid worker for the past 5 years.

  

  Over the past 5 years the worker paid in BTC saves a total of .887 BTC with a USD equivalent value of around $45,000, today.  The worker paid in USD would have saved a total of $7,250, today.  It means that the BTC wage worker has 600% more purchasing power (i.e. wealth) after just 5 years.  

  The mechanism of excess wealth creation in the BTC economy is that real interest rate becomes interest rate plus appreciation rather than interest rate minus inflation. This is as profound as it gets in finance. The implications literally reshape society by reconstructing the framework of the economy.

  The profundity of that one change reaches all stakeholders. After just 5 years the BTC minimum wage worker has accumulated 600% more wealth than the USD minimum wage worker and that spread will continue to grow over time. Perhaps most explosive is that the wealth was generated without taking risk. It means that even minimum wage workers would be able to generate wealth over time. Poverty essentially disappears for anyone that is able to work in a world based on appreciating currencies. 

  Another major effect is that borrowing costs will also equal interest rate plus appreciation resulting in a higher borrowing costs leading to an economy driven by productivity rather than liquidity. Money is scarce when supply is finite and thus things like NFTs do not exist in an economy based on appreciating currency.  NFTs are derived assets to which excess liquidity can be allocated to slow hyper inflation when money supply exceeds money demand.  

  In an economy with money scarcity demand always exceeds supply resulting in further appreciation. Capital allocation is prioritized toward productive investments rather than financial investments due to scarcity.  This nurtures strong economic fundamentals, things like low debt to GDP, low debt to income, and low debt to net worth. Rome would still be an empire today if it had a BTC based economy.

  Perhaps you spotted the pattern of low debt fundamentals and that should clue you in as to why there has been an incessant opposing narrative for the past 110 years with respect to inflation and deflation. The bankers lose in an economy based on an appreciating currency because borrowing becomes less relevant to the consumer and lending becomes limited due to scarcity. 

  I’ll leave it here but understand there is infinitely more to this story.  The implications are endless and the topic could very well be a university course.  The main takeaway is that BTC, as an appreciating currency, isn’t just a cool new way to transact, but when fully adopted will quite literally and fundamentally restructure society, completely. 

  I hope to see more people begin to think about BTC in terms of how it restructures real aspects of the economy and markets and put those thoughts to paper.  

  When the benefits of appreciating currencies are understood by consumers and workers, the giant con of inflation will become apparent and change will become politically impossible to reject.  

  *  *  *

  I am the MacroHeathen and I will be writing from time to time.  You can find me at macroheathen.com.

  Tyler Durden
  Wed, 12/22/2021 – 22:20

• White House Mulling Strict Export Controls On Russia Which Resemble Iran Sanctions
  White House Mulling Strict Export Controls On Russia Which Resemble Iran Sanctions

  The Biden administration has prepared a punitive package of potential sanctions which would be ready to go in the instance of Russia invading Ukraine, which would involve tightening export controls in order to hurt Russia’s economy.

  Reuters on Tuesday cited an unnamed administration official who said the measures are under intense discussion, namely possible “extraordinary” export controls that could block Russia from importing smartphones, crucial aircraft and automobile parts, and other materials.

  

  It would be a significant step of escalation given such sanctions would begin to resemble aspects of the all-encompassing US sanctions long in place against Iran. Existing US sanctions related to Russia have merely targeted individual Kremlin officials and entities, for example, that resulted in the aftermath of the Navalny poisoning affair and his subsequent imprisonment, or also companies involved in work on Nord Stream 2.

  At this point their implementation is unlikely, assuming Moscow’s insistence that there is no planned Ukraine invasion in the works is true. Leaders in Kiev, as well as some of their Washington counterparts, have loudly claimed an offensive into Eastern Ukraine will happen by January.

  Meanwhile Ukraine and some other Eastern European countries are actually demanding that the US impose sanctions on Russia now, rather than waiting. This was the message issued by Polish President Andrzej Duda and Lithuanian President Gitanas Nauseda – who both met with Ukrainian President Volodymyr Zelenskyy in western Ukraine on Monday. The three leaders in the joint statement:

  “…called upon the international community to step up sanctions on the Russian Federation over its ongoing aggression against Ukraine and once again urged the Kremlin to de-escalate the situation by withdrawing its troops from the Ukrainian borders and temporarily occupied territories.”

  That’s when Zelenskyy urged “powerful preventative actions, powerful serious sanctions to exclude any thought about escalation.”

  Yet if US export controls were imposed immediately this would only ensure the total break in all dialogue between the US and Russia. Such sanctions would heighten the likelihood of actual military clashes. This at a time Moscow is still awaiting a Biden administration response to its list of security proposals centered on NATO agreeing to halt eastward expansion.

  We started with SWIFT and ended up with “extraordinary” export controls on Russia’s ability to import smartphones, key aircraft and automobile parts. This is not what’s going to deter Russia and it proves that the West isn’t ready for anything “nuclear”.https://t.co/2FnwcSOkJj

  — Dr Maria Shagina (@maria_shagina) December 22, 2021

  https://platform.twitter.com/widgets.js

  On this front, there’s some hopeful signs that the two sides are moving toward deconfliction, as The Hill reports: 

  Bilateral talks between the United States and Russia on Moscow’s recently-proposed security demands are expected to begin in January, a State Department official said Tuesday.

  Karen Donfried, assistant secretary of State for European and Eurasian Affairs, told reporters on Tuesday that the US will “decide on a date” together with Russia to begin discussions.

  For now, the US administration is likely to continue with its threats and talk of “red lines” – and warnings against Russian aggression toward Ukraine, also as a method to continue building leverage ahead of these possible January talks. 

  Tyler Durden
  Wed, 12/22/2021 – 22:00

• New York Lawmaker Pulls Public Health Detainment Bill, Blames 'Conspiracy Theorists'
  New York Lawmaker Pulls Public Health Detainment Bill, Blames ‘Conspiracy Theorists’

  Authored by Bill Pan via The Epoch Times (emphasis ours),

  A New York lawmaker has taken down a 6-year-old bill that would authorize the state to detain infected individuals and their contacts deemed a threat to public health during a pandemic, blaming “conspiracy theorists” of spreading misinformation about his proposal.

  

  The bill in question, known as A416, was first introduced by Assemblyman Nick Perry in 2015, nearly a year after the nationwide panic over a potential outbreak of Ebola in the United States. The Brooklyn Democrat said the measure was prompted by an incident in which a nurse refused to be placed in quarantine after returning from West Africa, where she’d helped treat Ebola patients.

  Like many other bills, A416 had been reintroduced year after year and died in committee. The latest version of the bill would allow the state governor, by “issuing a single order,” to “order the removal or detention” of any person or group of people deemed to be a suspected case, contact, or carrier of a contagious disease and poses “an imminent and significant threat to the public health in severe morbidity or high mortality.”

  “Such person or group of persons shall be detained in a medical facility or other appropriate facility or premises designated by the governor or his or her delegate,” it reads.

  The bill, which received little public attention over the past years, became a center of controversy when Perry once again put it up for the 2021-2022 legislative session amid the CCP (Chinese Communist Party) virus pandemic. Opponents of the measure argued that it would allow then-Gov. Andrew Cuomo to build internment camps for New Yorkers who refuse to comply with his public health policies.

  “This is straight up detention camp stuff in NY! A bill giving [Gov. Andrew Cuomo], Health Commissioner or any designated official full power to remove any person/group of people from their home if deemed contagious,” Elizabeth Joy, a Republican candidate running against Rep. Paul Tonko, wrote in January. “It’s horrifying.”

  Facing mounting opposition, Perry on Monday announced he no longer seeks to advance the bill, which he said was misinterpreted by “conspiracy theorists” and internet trolls.

  “Conspiracy theorists, and those who spread misinformation online are once again trolling on social media, posting concocted stories about A416,” he wrote in a statement on Dec. 20. “To deprive these individuals the ability to use this issue for fuel to spread their fire of lies and mistruths, I will take the appropriate legislative action to strike the bill, remove it from the calendar, thus ending all consideration and actions that could lead to passage into law,” he said. “Get vaccinated and stay safe.”

  Republican Assemb. Joe Angelino was among the opposing lawmakers who celebrated the withdrawal. He dismissed Perry’s claim, saying that there was no “misinformation” around the bill since everyone could read online what the bill was actually about.

  “The sponsor of A416 is saying we were spreading ‘misinformation,’ calling us ‘conspiracy theorists’ who were ‘concocting stories’ causing him to pull his Bill. I’m pretty sure we all can read and his intent was to haul people away for the good of all,” Angelino wrote on Facebook.

  “This is reminiscent of what happened in WW2 when someone thought it was a good idea to send Americans of Japanese descent to ‘camps’ for the duration of the war,” he said, referring to President Franklin D. Roosevelt’s order to relocate Japanese Americans to interment camps following the Pearl Harbor attack.

  Tyler Durden
  Wed, 12/22/2021 – 21:40

• US NatGas Futures Gain As Traders Price In Cold January
  US NatGas Futures Gain As Traders Price In Cold January

  US energy traders could be in the beginning stages of pricing in a cold January as natural gas futures top $4. There’s also the unresolved European energy crisis as US LNG exports increase.

  NYMEX Henry Hub natgas jumped 3.5% to $4.018 on Wednesday morning as the Northern Hemisphere winter officially began on Tuesday. Prices still trade in a month’s long horizontal flat, and there’s no confirmation on an upside breakout — yet. 

  

  One of the main drivers in today’s price action could be new long-range forecasts that point to colder temperatures for the US-Lower 48 next month. 

  12-20-21 AM #Energy Report: Discussing weekend warmer roll-forward changes + late Dec/early Jan pattern progression #natgas #oott $ng

  Update: https://t.co/Bny1qRLt7q

  DM / email Kirk@bamwx.com for a free copy of all of today’s reports + info on our service! pic.twitter.com/wf8V6Zp6Vw

  — BAMWX (@bamwxcom) December 20, 2021

  https://platform.twitter.com/widgets.js

  US-Lower 48 heating degree days shows temperatures are set to decline from Dec. 25 – Jan.6, which means energy demand will increase to heat a building structure. 

  

  Meteorologists at private weather forecasting firm BAMWX released their three and four-week forecast that shows a much cooler US through the second half of January. 

  Quick #natgas #energy take:

  🔵 New Euro weeklies moving the MJO into phase 8
  🔵 Trend vs last run for weeks 3/4 (image 2) is quite colder
  🔵 Phase 8 releases Alaska/Canada cold south

  Our new weeks 3/4 forecast is released TUE.

  DM / email Kirk@bamwx.come for a free copy #oott pic.twitter.com/pL0B1Eld50

  — Kirk 📈 Hinz | BAM Weather (@Met_khinz) December 21, 2021

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  Earlier this month, readers may recall that we noted bullish signs for natgas were emerging as forecasts pointed to colder weather for January. As forecasts become more concrete, this could suggest natgas futures have some possible upside. 

  Tyler Durden
  Wed, 12/22/2021 – 21:20

• Supreme Court Could Decide Fate Of Monsanto/Bayer RoundUp Cancer Suits
  Supreme Court Could Decide Fate Of Monsanto/Bayer RoundUp Cancer Suits

  Authored by Nathan Worcester via The Epoch Times (emphasis ours),

  On Dec. 13, the Supreme Court asked the Solicitor General to offer the United States’ views on “Monsanto vs. Hardeman”—the latest move in what could be a landmark case for multibillion-dollar litigation linking the pesticide RoundUp to non-Hodgkin’s lymphoma, if the Supreme Court agrees to review the case.

  

  After a call for the views of the solicitor general, that Justice Department official will often respond with a brief commenting on whether the Supreme Court should agree to review the case. The Epoch Times has reached out to the Solicitor General for comment.

  Monsanto, which was acquired by the German chemical company Bayer in 2018, filed its petition after a Ninth Circuit panel ruled in favor of California resident Edwin Hardeman, who claimed his non-Hodgkin’s lymphoma resulted from exposure to RoundUp.

  Ninth Circuit Judge Ryan D. Nelson, a Trump appointee, found that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) did not preempt California’s law, under which RoundUp and other products containing glyphosate must feature warnings about that ingredient’s reported cancer risk.

  While the state of California maintains that glyphosate is carcinogenic, the U.S. Environmental Protection Agency (EPA), which enforces FIFRA, maintains glyphosate is not likely to cause cancer in humans.

  Monsanto’s petition to the Supreme Court challenges the Ninth Circuit’s ruling on preemption. It also argues that the Ninth Circuit admitted low-quality expert opinions on glyphosate and cancer, deviating from the practices of other appellate courts and violating Federal Rule of Evidence 702.

  Monsanto specifically disputes Dr. Dennis Weisenburger’s testimony that Hardeman’s non-Hodgkin’s lymphoma was caused by glyphosate and not linked to his earlier diagnosis of Hepatitis C, known to be associated with non-Hodgkin’s lymphoma.

  The Epoch Times has reached out to Dr. Weisenburger for comment.

  

  Bayer responded warmly to the Supreme Court’s invitation to the Solicitor General.

  “The company has been very selective in its settlement approach since filing its Petition for a Writ of Certiorari in Hardeman. Now that the Supreme Court has requested input from the Solicitor General in this case, we will not entertain any further settlement discussions with plaintiff lawyers that are representing a substantial number of Roundup™ claims,” a Bayer spokesperson told The Epoch Times via email.

  In a separate interview, the spokesperson told The Epoch Times that it has resolved roughly 98,000 out of more than 125,000 claims linking non-Hodgkin’s lymphoma to RoundUp. While those settled claims would not be affected if SCOTUS ruled in favor of Monsanto, the 25,000+ outstanding claims could be, according to the spokesperson.

  While the spokesperson would not say how much the company had paid to date, they stated the company has established a $9.6 billion provision for current litigation and, in July 2021, a $4.5 billion provision for future cases.

  In addition, the company took a $2 billion provision for class action, which still stands despite the fact that the company withdrew its agreement in conjunction with an unfavorable ruling from U.S. District Court Judge Vince Chhabria, who said elements of Bayer’s proposal were “clearly unreasonable.”

  The Bayer spokesperson told The Epoch Times that a substantial chunk of its $16.1 billion reserves for settling claims could be affected by the Supreme Court’s decision.

  Notably, the Supreme Court case could come soon after multiple California jury verdicts that found RoundUp was not responsible for a claimant’s non-Hodgkin’s lymphoma, according to Reuters.

  California’s law, as well as Hardeman’s suit, hinges in part on a major 2015 monograph from the International Agency for Research on Cancer (IARC), which classified glyphosate as “probably carcinogenic to humans.”

  A spokesperson for IARC declined to comment on Monsanto v. Hardeman but stated its results and evaluation from 2015 are still valid.

  Monsanto’s petition argues EPA and other regulators around the world have maintained a “global consensus” that glyphosate does not cause cancer.

  In 2019, after California classified glyphosate as carcinogenic, EPA issued a letter stating that California’s warning language constituted a “false and misleading statement.”

  When asked about “Monsanto vs. Hardeman,” the EPA told The Epoch Times that “as this is pending litigation, we have nothing to add.”

  Henry Darwin, who served as Acting Deputy Administrator and Chief Operating Officer of the EPA under Trump, told The Epoch Times in an exclusive interview why he hopes the Supreme Court will take the case.

  “When EPA says that there’s no cancer risk associated with this consumer product, that shouldn’t be up for challenge by an individual state or, worse yet, by an individual scientist,” Darwin said.

  “My fear is that if California is allowed to have its own conflicting opinion about something like glyphosate, it’s a slippery slope that could lead to an eroding of our confidence in EPA as a country,” he later added.

  While “Monsanto vs. Hardeman” effectively pits California’s law against the federal government’s standards, Darwin does not believe that a ruling in favor of Monsanto would undermine the proper authority of states.

  “I’m a true believer in state’s rights if the state has a right that’s unique to the state,” said Darwin. “In this instance, we’re talking about a commercial product that’s being sold throughout the country. There’s nothing unique about its use or application in California, and Congress has made it pretty clear that through FIFRA [the Federal Insecticide, Fungicide, Rodenticide Act] it is EPA’s responsibility to set the appropriate safety standards and evaluations associated with this type of consumer product.”

  Monsanto’s petition to the Supreme Court has garnered supporting briefs from the U.S. Chamber of Commerce, the Washington Legal Foundation, and the pesticide trade organization CropLife America, among other organizations.

  “The quality of decision-making in federal court hinges on the ability and willingness of trial-court judges to prevent unreliable ‘scientific’ expert evidence from ever being admitted into evidence. Unless the Supreme Court arrests the Ninth Circuit’s pattern of excusing judges from this gatekeeping duty under Rule 702, the federal judiciary’s ability to produce fair and just results will be eroded,” said Cory Andrews, General Counsel and Vice President of Litigation for the Washington Legal Foundation, in an email to The Epoch Times.

  

  In its petition, Monsanto describes the IARC’s classification as a “slender reed” for claims against Monsanto.

  Not all scientists agree.

  John Spinelli, professor emeritus of epidemiology, biostatistics, and public health practice at the University of British Columbia, was a coauthor on a 2001 study that linked non-Hodgkin’s lymphoma to the use of pesticides. It was cited in IARC’s 2015 monograph on glyphosate.

  “I am in total support of that conclusion of the IARC review,” Spinelli told The Epoch Times.

  But Paolo Boffetta, an epidemiologist and professor across multiple disciplines at the Icahn School of Public Health at Mount Sinai, told The Epoch Times that early studies linking glyphosate to non-Hodgkin’s lymphoma, such as Eriksson et al.’s study of almost 2,000 Swedish adults, have seen less support from more recent research.

  His 2021 meta-analysis concluded there was no significant association between exposure to glyphosate and overall non-Hodgkin’s lymphoma risk.

  Yet in an exclusive interview with The Epoch Times, he stressed that there are many different subtypes of the cancer, making it hard to rule out a potential link at a more granular level.

  

  “Whether we can say that for each individual subtype of lymphoma we have strong evidence that there is no association, I don’t think we should say that,” Boffetta said.

  He confirmed to The Epoch Times that he previously acted as a consultant for Monsanto, though not on anything related to glyphosate.

  Other scientists who authored research linking glyphosate with cancer either declined to comment or did not respond to requests for comment from The Epoch Times.

  Jeffrey Smith, an anti-glyphosate activist who leads the Institute for Responsible Technology, told The Epoch Times in what is so far an exclusive interview on “Monsanto vs. Hardeman” that Monsanto has a history of undermining scientists who are critical of it.

  He cited emails in the “Monsanto Papers” concerning Gilles-Éric Séralini, a French molecular biologist whose research examined the toxicity of RoundUp.

  One 2009 email released in the papers showed the editor of a journal that had received one of the scientist’s manuscripts allowed it to be reviewed by a Monsanto executive, William F. Heydens.

  “With your help the following final decision has been reached: Reject (allow resubmission),” the editor, Gio Batta Gori, wrote to Heydens.

  A spokesperson for Bayer told The Epoch Times that the “Monsanto Papers” and similar materials had not been enough to convince regulators in the United States and many other countries, including in the European Union, to consider RoundUp or glyphosate carcinogenic.

  The spokesperson cited the European Food Safety Agency’s 2017 statement on the “Monsanto Papers.”

  “The nature of the information contained within the ‘Monsanto papers’ was serious enough for EFSA to investigate their significance in relation to the EU assessment of glyphosate. Following this investigation, EFSA can confirm: that there are no grounds to suggest that industry improperly influenced the EU assessment of glyphosate; and that the role of industry and of other actors in the process was carried out according to standard procedures,” EFSA wrote.

  

  Smith said Monsanto has undermined the EPA’s approval process.

  He cited a letter from the late EPA employee Marion Copley, who wrote to EPA pesticides administrator Jess Rowland as Copley was dying of breast cancer.

  In it, she accused Rowland of playing “political conniving games with the science to favor the registrants.” She also wrote that “[it] is essentially certain that glyphosate causes cancer.”

  Bayer’s spokesperson defended the EPA, stating that the EPA said its analysis of the cancer risks from glyphosate “was ‘more robust’ and ‘more transparent’ than IARC’s review.”

  Smith said a preemption precedent favoring Monsanto would be “a tragedy and a travesty,” given what he sees as Monsanto’s undue influence over the EPA.

  “They’re now hiding behind that and hoping that the Supreme Court and that the Department of Justice blindly follow a law and give the EPA determination far more validity than it deserves,” he said.

  Tyler Durden
  Wed, 12/22/2021 – 21:00

• Michael Avenatti Lives Free In Childhood Friend's Apartment As He Spends "Prison Term" On House Arrest
  Michael Avenatti Lives Free In Childhood Friend’s Apartment As He Spends “Prison Term” On House Arrest

  One character who has mercifully faded from the media scene in the year that has passed since the November 2020 is Michael Avenatti, the attorney whose famously vain and self-indulgent representation of ex-porn star Stormy Daniels (who is now involved in a third federal case against him) led to Avenatti being fielded by CNN as a potential presidential candidate.

  

  We long suspected Avenatti’s willingness to always take urgent calls from reporter hacks like Jake Tapper, Jim Acosta or whoever needed an urgent soundbite helped endear him to the US press, particularly CNN, his biggest benefactor during his brief but spirited time in the limelight.

  Avenatti made himself famously accessible to the press. And during the three years since he was first arrested on extortion charges for allegedly attempting to shake down Nike, followed by a separate case in California accusing him of chiseling money from his clients’ settlement payments (followed by his latest case about his representation of Stormy Daniels), Avenatti’s reputation has effectively imploded. He was ultimately sentenced last year for the New York charges (which stemmed from his scheme to use a whistleblower high-school basketball coach to shine a light on allegedly untoward (and, Avenatti alleged, illegal) behavior on Nike’s part.

  But while he awaits justice in the other two cases, Avenatti, who should be serving his time in federal prison, is instead, thanks to COVID, a (mostly) free man, living under house arrest in the two bedroom apartment of an old childhood friend.

  Having so much free time on his hands now, it certainly makes sense that Avenatti would agree to participate in a profile piece for Politico, a little grist for all the Avenatti fangirls out there – and the haters who recognized the smarmy huckster for what he was immediately, even if CNN (along with other major establishment media players) acted like it had no idea.

  To the reporter’s credit, the piece does a pretty good job of skewering Avenatti. It revealed to the public the circumstances of his house arrest. Let’s just say it’s a long way from his old pre-divorce, pre-felon life.

  The last time he drove a race car, his most beloved and expensive habit, was 1,411 days ago. The last time he had a Grey Goose martini (up, two olives) and a New York strip at Craig’s, his preferred hangout in West Hollywood, was 709 days ago. The last time he wore his five-figure Patek Philippe Nautilus watch, before it was seized by the government, was 708 days ago. The last time he talked to his former client, Stormy Daniels, was February 2019. The last time a reporter asked him about running for president was March 24, 2019, the Sunday before his arrest. The last time he saw his parents was Thanksgiving 2019. His Twitter account, where he once held the attention of nearly 900,000 followers (now 680,000), sits frozen in September 2018: In the video that plays on loop in his last pinned tweet, he is on MSNBC, attacking the president and his party: “They want to make me the issue.”

  As the piece promptly admits, the old Avenatti “doesn’t exist anymore”. And for anybody who’s wondering, yes, the fact that Avenatti can no longer respond to critics, both online and on cable news, “infuriates” him.

  When I suggest to Avenatti that he could do his own live hits, launch his own podcast, reconnect with his friends at MSNBC and CNN – his old dinner partners in New York – he stops me.

  “I don’t think it would be smart. I don’t think it’d be a good look, and, you know, why risk it?” To hear other people bring up his name without being on set to challenge them, to yell like he used to –“it’s not killing me,” he says, “but it’s – it’s infuriating.”

  While he admits his unraveling was “such a gargantuan fall”…

  Avenatti always performed best with others watching, and no one has been watching for a very long time. He has endless days and weeks to think about the downward trajectory of his life, which he doesn’t like to do when he is alone, which, inconveniently, is most of the time. “If I start thinking about the relationships I had that I no longer have, the opportunities I had that I no longer have, the freedom I had that I no longer have, the wealth and things I used to have that I no longer have, the notoriety and the adoration I used to have that I no longer have — I mean, it’ll destroy me,” he says. “I have to push it out of my mind, because it’s been such a gargantuan fall.”

  …Politico says he’s becoming increasingly desperate for “validation” that he ever “mattered not as a cartoonish figure in our political circus, but as a player of substance who cannot be dismissed.”

  The scraps to which Avenatti is clinging to help buttress his sense of self-worth are comically small: According to Politico, Avenatti’s biggest accomplishment before the Stormy Daniels’ case was getting his clients on “60 Minutes” three times in 5 years. “It’s never been done before,” Avenatti reportedly gushed to Politico.

  He’s done it so many times before. Even in the beginning, when he was a little-known plaintiff’s attorney in California, before his license was suspended, he had cases appear on “60 Minutes” three times in five years. “It’s never been done,” he says. In front of a camera, he is at ease. In 2016, during his second appearance on the program, representing hospitals that claimed they’d been sold ineffective personal protective equipment, when asked to respond to one of the health care executives, he surprised himself with an ad-libbed line: “Evidently he forgot the 11th commandment,” Avenatti told Anderson Cooper. “Do not lie to ‘60 Minutes.’” As soon as he said it, he knew it would make the final cut.

  Of course, even if he is condemned to live the rest of his life as a cartoon character, he’s still sitting pretty for the moment. He has an old childhood friend looking after him (the friend took Avenatti in to live in his two-bedroom Venice apartment for the lawyer’s stint under house arrest, however long that shall be).

  He still has to be tried and, if convicted (or if he should change his plea, possibly as part of a deal), sentenced in two other federal cases. So, at this rate, the pandemic would need to drag on for years, maybe the rest of the decade, for Avenatti to avoid serving any of his sentence in federal custody.

  But still, imagine, for a second, how this case might have been treated if Avenatti was a black defendant accused of perhaps a non-violent drug-trafficking related felony rather than being a white, well-to-do lawyer.

  Tyler Durden
  Wed, 12/22/2021 – 20:40

• University Of California Fires Director Of Ethics Program for Defying COVID-19 Vaccine Mandate
  University Of California Fires Director Of Ethics Program for Defying COVID-19 Vaccine Mandate

  Authored by Joseph M. Hanneman via The Epoch Times (emphasis ours),

  Dr. Aaron Kheriaty, the longtime professor of psychiatry at the University of California-Irvine School of Medicine who sued the university over its COVID-19 vaccine mandate because it made no exceptions for natural immunity, has been fired by the institution for refusing the vaccine.

  

  In a blog post titled “Farewell, University of California,” Dr. Kheriaty said he received notice of what he called his “arbitrary and capricious” firing on Dec. 16. It was effective the same day. The termination ends his UCI medical teaching career and his longtime role as director of the Medical Ethics Program at UCI Health.

  Kheriaty said he worked unpaid nights helping the UCI president’s office draft triage guidelines for scarce resources and vaccines during the pandemic. When N-95 masks were so scarce that hospitals kept them under lock and key, Kheriaty said he found a supply at a local construction company and provided them to doctors and nurses.

  “Everyone at the university seemed to be a fan of my work, until suddenly they were not,” Kheriaty wrote. “Once I challenged one of their policies, I immediately became a ‘threat to the health and safety of the community.’ No amount of empirical evidence about natural immunity or vaccine safety and efficacy mattered at all.

  “The University’s leadership was not interested in scientific debate or ethical deliberation,” Kheriaty wrote. “When I was placed on unpaid suspension, I was not permitted to use my paid time off—that is to say, I was ordered to stay off campus because I was not vaccinated, but I also could not take vacation at home because… I was not vaccinated.”

  Kheriaty said the university tried to prevent him from doing any professional work while he was on unpaid suspension, in an effort to pressure him to resign from a job he held for 15 years. He said he was not allowed on campus except to move out of his office. Kheriaty was also restricted from making money off-campus. “It was dizzying and, at times, surreal,” he wrote.

  The firing decision, he said, was not made by the psychiatry department but by the UCI president’s office. Asked by The Epoch Times for more information about Dr. Kheriaty’s firing, UCI spokesman Tom Vasich wrote, “UCI does not comment on personnel issues.” Kheriaty was on unpaid suspension after initially being placed on “investigatory leave.”

  “Now it’s officially over,” Kheriaty wrote on his blog. “I do not regret my time at the university. Indeed, I will miss my colleagues, the residents, and the medical students. I will miss teaching and supervising and doing ethics consults on some of the most challenging cases in the hospital.”

  Kheriaty sued the University of California Board of Regents in federal court on Aug. 18, alleging the university’s vaccine mandate violates the Equal Protection Clause of the 14th Amendment to the U.S. Constitution. In July 2020, Kheriaty contracted COVID-19, so he now has natural immunity that he argues is likely superior to protection from a vaccine. His lawsuit is working its way through U.S. District Court.

  

  The U.S. District Court for the Central District of California refused Kheriaty’s motion for a preliminary injunction against the vaccine mandate. In his lawsuit, he highlighted the failure of vaccine mandates to account for the likely superior immunity possessed by COVID-19 survivors. His faculty colleagues at the University of California filed a 187-page declaration supporting the efficacy of natural immunity.

  As a COVID-19 survivor, Kheriaty said, his immunity to the disease is between 95 and 99 percent effective. There is not one case on record of someone who recovered from COVID-19 and then was re-infected and transmitted the virus to someone else, he said in October. This sterilizing immunity is an advantage the human immune system has over any COVID-19 vaccine, he argued, noting the declining efficacy of the mRNA vaccines over time.

  Reflecting on the pandemic, Kheriaty recalled how pregnant medical residents were concerned about doing consults on COVID-19 patients. “The administration reassured these residents that they had no elevated risks from COVID—a claim without any evidential basis at the time, and which we now know to be false. I saw the COVID consults for these worried residents, even when I was not covering the consult service.”

  He said he worked every day during the pandemic, seeing regular patients and COVID patients in the emergency room, the clinic, psychiatric wards, and hospital wards.

  “As our chief ethics consultant, I had countless conversations with families of patients dying of COVID, and tried my best to console and guide them in their grief,” he wrote.

  Tyler Durden
  Wed, 12/22/2021 – 20:20

• Albert Edwards' 2022 Outlook: Four Big Surprises… And Lots Of Pain
  Albert Edwards’ 2022 Outlook: Four Big Surprises… And Lots Of Pain

  One month ago, just after all the Wall Street banks come out with glowing year-ahead outlooks and market forecasts, we observed a funny irony: the arrival of a new covid strain threw everyone in for a loop, one which would only get much worse a few weeks later when Biden’s Build Back Better stimulus collapsed.

  Just days after all the banks sent out their cheerful 2022 Economic outlook pieces, everything goes to hell.

  — zerohedge (@zerohedge) November 19, 2021

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  Since then things have gotten quite embarrassing for the likes of Goldman (and most of its bullish peers), which promptly slashed its GDP forecast over the weekend to just 2.0% from 3.0% and from much higher earlier in the year.

  However, one strategist who isn’t concerned about how to quietly goalseek the downward revision to his 2022 outlook, is SocGen’s in-house bear, Albert Edwards for the simple reason that he sees (saw, and will see) nothing but pain in the coming year.

  As a reminder, two weeks ago Albert penned a rather doomsday forecast about the future of the market-leading “generals”, the FAAMGs, or as they are better known now, the GAMMA stocks, warning that despite the sharply declining EPS of the broader IT sector, the FAANGs continue to trade at a “nosebleed PE valuation at 30x which looks vulnerable vs the market’s 22x – the widest gap since the Nasdaq bubble.” This is happening just as forward IT PEs are starting to rerate lower.

  

  Fast forward to this week when Albert summarizes the current market state as follows: “as we end the year, markets are becoming increasingly nervous that US equities – and the US tech sector specifically – are having the rug pulled out from under them. Market internals are also giving out loud warnings. Just as in 2001, could the unraveling of the recent tech bubble trigger the Vortex of Debility that destroys all before it?“

  Picking up on his recent warning, Edwards writes that the US tech sector that has so dominated this bull market in one form (the IT sector) or another (the FAANGs) “seems to be pretty invulnerable in the face of some of the major threats it is now facing. But we have seen a similar Vortex of Debility before, most recently just ahead of the Lehman bankruptcy and written up here by Paul Murphy at the FT.”

  How does that play into the SocGen strategist’s year-ahead outlook?

  Well, as he notes “it’s the time of year when strategists publish huge tomes to give their year-ahead views” but, he adds, “readers will be relieved to know that I can summarize my 2022 outlook in a few lines” and four surprises.

  As the first “big surprise” of the coming year, Edwards expects that equity markets will startle most investors when they “fall sharply as US tech unravels in the first half.”  Presenting a slightly different chart from the one he showed two weeks ago, Edwards then addresses the elephant in the room, namely the FAAMGs again, and writes that “unsupported by earnings growth (see chart below) and with poor market breadth (see inside), it may not be higher bond yields that burst this tech bubble.”

  

  Edwards then echoes what Morgan Stanley’s Mike Wilson said last week, and lays out what he believes will be the “second surprise” for next year: if an all-out equity bear market unfolds, “investors will find that while the Powell Put still exists, the strike price may be a lot lower for equities than it was at end 2018.” This is almost a carbon copy of what Wilson said last week when he predicted that “the Fed put still exists but the strike price is much lower now, in our view. If we had to guess, it’s down 20% rather than down 10% unless credit markets or economic data really start to wobble.”

  Why? Because as Edwards explains, “policymakers globally now understand that QE creates as many problems (mainly distributional) as it solves, and that fiscal policy must do more of the stimulus work.” He then asks a rhetorical question: “Would the Fed really hold back if the S&P was down 30% plus? And wouldn’t that be one huge surprise for investors?.” Here we disagree with Edwards: it is our view is that no matter what, the Fed will always panic when stocks are down 15-20% – after all so much of the US wealth effect and household net worth is now tied into stocks, that Powell will not dare risk an all out collapse…

  

  … but maybe this time is truly different.

  His “third surprise” may be, well, the most surprising – Edwards expects that easing supply bottlenecks combine with soggy commodity prices to drive US headline CPI inflation back well below 2% (this is also the inventory glut thesis floated by Morgan Stanley and Deutsche Bank). Hence, the SocGen skeptic expects “current inflation fears to evaporate as H1 unfolds and bond yields to decline sharply.”

  The “fourth and final surprise” will come out of China, where after continued growth disappointments in the face of tight money (that has helped weaken industrial commodity prices in H2 2021), Beijing will be forced to launch a Powell-like policy pivot (we have already seen the early signs of this in the past few weeks) and the Chinese monetary floodgates are re-opened – including a burst in China’s credit impulse and rapid renminbi devaluation .

  * * *

  Digging a bit deeper into these four key forecasts/surprises, and starting with the pivotal role that the giga-tech stocks will play, Edwards repeats what he said two weeks ago, and notes that as “we move into next year the US tech sector (and also the FAANGs) could hold the key for markets.” Unlike any other major equity market, the S&P is dominated by these stocks and if they go belly up, inevitably so too does the whole market. As the “floating on air” chart above shows, while until recently there had been a supportive underlying earnings story, now the sector has become reliant on massive multiple expansion relative to the rest of the market (also see chart below).

  

  Edwards then points out something we noted last week when we showed that barely 40% of the Nasdaq’s 3000 stocks are trading above their 200-DMA (a catastrophic breadth which prompted even the traditionally cheerful Goldman Sachs to issue a warning that this is unsustainable)…

  

  … and leads him to conclude that “the sickly aroma of fear is beginning to invade the nostrils of investors. Certainly, this may be one explanation why real yields remain so low and why implied 5y inflation expectations in 5 years have begun to slide to 2021 lows – all but ignoring the recent very high CPI data.”

  

  There is another reason why Edwards believes that we may soon look fondly upon the days of soaring inflation: pointing to one of our own recent charts, the SocGen strategist writes that “the Fed’s newfound hawkishness (as they admit that maybe higher inflation is not so transitory after all) is underpinning a buoyant dollar. This together with the tightness of the China Credit impulse this year has taken the shine off commodities. Zero Hedge notes that an important uptrend has now been breached which may in itself trigger even lower prices.”

  

  There is, however, a glimmer of hope: China. Whereas China’s credit impulse had been sliding for much of the year (as we warned exactly one year ago), it has now officially bottomed and posted its first uptick in 8 months. From here, it will only go higher thanks to the recent burst of stimulus being unleashed by Beijing in the coming months.

  

  Edwards then shares a second “shocking chart”, and this has to do with the soaring Chinese yuan, and Edwards prediction that it is now far too strong and will lead to devaluation one way or another: “we all know that the renminbi has been pari-passu against a robust US dollar, but the officially targeted trade-weighted renminbi is through the roof this year and stands at an equivalent Rmb6.00/$. At a time when Chinese credit conditions are too tight, this is simply intolerable. Despite Chinese exports remaining robust, investors should be on the alert for a 2015-like surprise renminbi devaluation.“

  

  Edwards then spends some time looking at what shadow fed funds rate the Fed’s hiking cycle will conclude (details in his full note inside, available to professional subs) before concluding dramatically that “we are transitioning away from The Ice Age (due primarily to turbo-charged fiscal policy), and ultimately short and long rates will exceed the peak of the previous cycle” but in the near-term, “the Fed may inadvertently burst the Nasdaq bubble pretty soon with just a few taps of their foot on the brake (or less gas).”

  And just as the last recession surprised by being one of the shortest in history, maybe the fifth, and biggest surprise of 2022, will be that this expansion could yet end up as one of the shortest ever, forcing the Fed to revert to easing mode (lower rates, more QE, NIRP, etc) in just a few months…

  Tyler Durden
  Wed, 12/22/2021 – 20:00

• 24 States Sue Biden Admin Over COVID-19 Mandates For Children, Staff In 'Head Start' Education Program
  24 States Sue Biden Admin Over COVID-19 Mandates For Children, Staff In ‘Head Start’ Education Program

  Authored by Isabel van Brugen via The Epoch Times (emphasis ours),

  Attorneys general (AG) from 24 states have filed a lawsuit against the Biden administration challenging COVID-19 vaccine mandates for early education staff, and mask mandates for young children.

  

  Led by Louisiana AG Jeff Landry, the lawsuit (pdf) argues that the mandates involving Head Start, the country’s largest early education program, are unlawful, and exceed President Joe Biden’s statutory authority.

  Biden’s mandate, issued last month, applies to all preschool programs funded by the federal Head Start program, and affects hundreds of thousands of staff, volunteers, and preschool students across the country. It mandates vaccinations for staff, volunteers, and others in contact with students by the end of January, and masks for all adults and children aged two and above.

  The mandate offers no alternative to vaccinations, and for those granted exemptions, funds are not provided for regular testing. It applies to staff regardless of whether they work in-person or remotely.

  The Department of Health and Human Services provides funding to low-income families of preschool-age children under the federal Head Start program.

  The lawsuit argues that the president’s mandate is projected to lead to tens of thousands of Head Start agency staff losing their jobs and will cause programs to close or reduce capacity.

  “Like all of his other unlawful attempts to impose medical decisions on Americans, Biden’s overreaching orders to mask two-year-olds and force vaccinate teachers in our underserved communities will cost jobs and impede child development,” Louisiana Attorney General Jeff Landry said in a statement on Tuesday. “If enacted, Biden’s authoritarianism will cut funding, programs, and childcare that working families, single mothers, and elderly raising grandchildren rely on desperately.”

  The 24 states are seeking to block the Biden administration’s mandate, arguing that it is “arbitrary and capricious” and violates the Congressional Review Act and the Tenth Amendment.

  The requirements also violate the Administrative Procedure Act’s Notice-and-Comment Requirement, the Nondelegation Doctrine, the Anti-Commandeering Doctrine, the Spending Clause, and the Treasury and General Government Appropriations Act of 1999, according to the lawsuit.

  “Our Nation’s children have faced enough setbacks and difficulties during the last two years; they cannot afford another government attack on their development,” Landry said. “My office has had great success in blocking Biden’s mandates on many hard-working Americans, and we will work tirelessly to achieve the same victories for toddlers and teachers.”

  The lawsuit was filed by the AGs of Louisiana, Alabama, Alaska, Arkansas, Arizona, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Wyoming, and West Virginia.

  It argues that staff and volunteers will likely leave the Head Start program as a result of the mandate.

  “As a natural and foreseeable result, certain providers will close and children from low-income families in affected areas will be denied access to the preschool education that Congress guaranteed them, and children who are denied access to preschool education will miss out on crucial years of development,” it states.

  It also cites recommendations from the the World Health Organization that “based on the safety and overall interest of the child and the capacity to appropriately use a mask,” “children aged 5 years and under should not be required to wear masks.”

  The complaint cites pediatric nurse Anthony Luczak, who says a toddler mask mandate may cause psychological and health problems.

  The “reinforcement of wearing masks because of the threat of the pandemic is a reinforcement of fear that directly is triggering a toxic stress in children’s lives,” she said.

  It argues that because the federal program does not clearly authorize the mandate, the Biden administration “has acted ‘in excess’ of its constitutional and statutory authority.”

  “As a mother, I am very concerned about the latest federal mandates being forced on Head Start staff and students—children as young as two-years old will be required to wear masks and teachers will be forced to receive a vaccination against their will,” Florida AG Ashley Mood said in a statement. “I am fighting to stop this federal overreach, just as I have fought to protect Floridians against the previous unlawful mandates forced on us by the federal government.”

  Texas AG Ken Paxton said earlier this month that he will “not allow Texans to be coerced into getting a vaccine because the federal government is giving them an ultimatum to choose between their health or their child’s preschool education.”

  “These unconstitutional mandates have no place in our country, and they are not welcomed here in Texas,” he said.

  The Epoch Times has contacted the Biden administration for comment.

  Tyler Durden
  Wed, 12/22/2021 – 19:40

• Alex Berenson Sues Twitter, Says Company Acted 'On Behalf' Of Biden Administration
  Alex Berenson Sues Twitter, Says Company Acted ‘On Behalf’ Of Biden Administration

  Former NY Times reporter and author (check out those five-star reviews), Alex Berenson has taken Twitter to court, after the social media giant banned him from their platform after he suggested that the Covid-19 vaccine was ‘at best – a therapeutic with a limited window of efficacy and terrible side effect profile…”

  

  In a 70-page complaint filed on Monday in the Northern District of California, Berenson accused Twitter of violating his First Amendment rights, and claims that a Twitter executive assured him on multiple occasions that he would be free to express his opinions on the platform without fear of punishment.

  “Despite the controversy around his statements, a senior Twitter executive repeatedly assured Mr. Berenson that the company backed his right to free expression and that he would continue to enjoy access to the platform,” reads the complaint.

  Berenson also argues that Twitter was acting on behalf of the Biden administration by censoring his content, specifically that he has a “a uniquely viable claim that Twitter acted on behalf of the federal government in censoring and barring him from to its platform.”

  The ban came just days after Biden administration officials – as well as Biden himself – called for a crackdown on Covid-19 misinformation on social media.

  According to the complaint, Twitter is subject to a California law which applies to “common carriers,” a provision which dates back to 1872 and regulates companies that “offer to the public to carry persons, property, or messages.”

  His lawyers argue that the “courts have repeatedly applied the 1872 law to telephone companies and other technologies that did not exist at the time it was enacted.”

  Responding to Twitter lawyers, Berenson laid out why his suit has legs in a Tuesday blog post:

  * * *

  So over on Twitter, one of America’s Finest Legal Scholars (TM) is taking time out from his busy practice to rebut the complaint pro malo.

  He must have a lot to do because he’s spent most of the last day on this; I wonder which client he’s billing, or if he’s “between clients” at the moment. Anyway, you can tell he’s a serious guy because he throws up memes with every tweet! Just like Brandeis.

  What’s fascinating is that despite his endless tweets, he somehow has not managed to grasp one of the core arguments – simple in theory, though complex in its details – that the complaint raises.

  For those of you who have neither the time nor the inclination to wade through the argument, it goes like this:

  1. Twitter is indisputably a messenger service. A longstanding California law regulates messenger services as “common carriers.” This means that they must accept all messages they receive. Twitter thus must accept all tweets it receives. It has no First Amendment rights to refuse them on the basis that it does not agree with them.

  2. A federal law commonly called Section 230 “preempts” the California law, giving Twitter the right to reject tweets or ban users. (Whether that right is universal or whether Twitter must act in “good faith” in restricting service is a separate question; whether Twitter acted in “good faith” in this case is still another question. But put those issues aside for the moment.)

  3. Section 230 is what enables Twitter to claim a First Amendment privilege that supersedes the California law and restrict my own First Amendment right to speak; thus federal courts have the right to review 230 on First Amendment grounds. Eugene Volokh, who is a top constitutional scholar, was among the first people to raise this possibility. If you want to know more about about the argument, you can find it here: https://reason.com/volokh/2021/01/23/might-federal-preemption-of-speech…

  4. Defenders of Twitter and other social media behemoths have successfully confused courts and lawmakers about the distinction between Twitter the company and Twitter the platform. Under the First Amendment, Twitter the company is of course free to say whatever it likes – on its platform, in ads, through lobbyists, or anywhere else.

  5. But Twitter the platform should be open to all under California law; and even if the courts find that Section 230’s preemption of California law is consistent with the First Amendment and allows Twitter the company to set rules on who can use the platform, those rules cannot be completely arbitrary or discriminatory.

  6. Twitter itself acknowledges this fact in explaining its rules, and acknowledged it further in creating its “five-strike” policy around Covid-19 “misinformation.” Twitter is legally liable for failing to follow its own rules and contractual obligations in my case.

  7. The complaint has many other factual and legal arguments; I’m not going to go into them here. I am also not going to pull back even further and walk through exactly why the Section 230 as it has been interpreted is so dangerous – that’s an broader argument that belongs in an op-ed for a major newspaper (in the unlikely event they’ll have me). But I hope this helps everyone understand the complaint a little better.

  Tyler Durden
  Wed, 12/22/2021 – 19:20

• Air Force Allows Use Of Pronouns In Signatures
  Air Force Allows Use Of Pronouns In Signatures

  Authored by Ken Silva via The Epoch Times (emphasis ours),

  The Secretary of Air Force Public Affairs announced Dec. 20 that Airmen and the Space Force Guardians are now allowed to include pronouns in their signature block.

  “Official signature blocks should include name, rank, service affiliation, duty title, organization name, phone numbers and social media contact information. Pronouns such as he/him, she/her, or they/them are now authorized but not required,” the announcement said.

  “Pronouns can be placed immediately after the name in parentheses or on separate lines within the signature block.”

  

  The change was made via an update to Air Force writing guide The Tongue and Quill, which provides formatting standards and guidelines for a number of official documents, including email, memoranda, letters and papers. The changes were spearheaded by the LGBTQ Initiatives Team, created in April to works on issues that disproportionately impact LGBTQ Airmen and Guardians.

  “The change request was driven by awareness of a restrictive policy that was being used against transgender Airmen and Guardians who were authentically representing themselves,” Lt. Col. Bree Fram, a LIT Transgender Policy Team co-lead, said in the announcement. “It was also important for many individuals often confused as being a different gender in their communications.”

  Master Sgt. Jamie Hash, the other LIT Transgender Policy Team co-lead, said in the announcement that the change was a request she started from her installation’s Diversity and Inclusion committee.

  “The LIT provided an opportunity to streamline the process for this change,” Hash said. “It is an example of how the DAFBAWG [Department of the Air Force’s Barrier Analysis Working Group] teams are addressing barriers, collaborating, and executing solutions in ways that have not been seen before to help Airmen and Guardians thrive.”

  Hash said the explicit permission to use pronouns helps the Air Force by further “explicitly acknowledging the existence and dignity of non-binary military members and civilians.” She also said the change eliminates confusion for people with non-Anglo/Western or gender-neutral names.

  “A foundational competency of the [Air Force] is to foster inclusion,” Fram added. “The use of correct pronouns is an easy way to show care and respect for Airmen and Guardians as individuals, and can help the [Air Force] retain highly qualified individuals.

  “Allowing pronouns in an individual’s signature block is a quick and simple way to eliminate confusion and promote a more inclusive culture.”

  The Air Force’s announcement came the same day the Department of Defense released its plan to combat extremism in the military.

  The Biden administration has touted diversity initiatives as a way to improve cohesion within the military, but some lawmakers and military officials worry that the Pentagon is prioritizing social issues at the expense of military preparedness. Republican lawmakers released a congressionally commissioned report in July, making that argument.

  Drawing on interviews with 77 Navy personnel, the report found “a broad consensus across interviewees on numerous cultural and structural issues that impact the morale and readiness of the Navy’s surface force.”

  Along with identifying general problems associated with a bloated bureaucracy, the report focuses on the more recent trend of Navy leadership becoming entranced by social issues. Programs to encourage diversity, suicide prevention, sexual assault, and other issues have their value—but an overfocus on those areas comes at a cost, the report said, quoting numerous officers.

  “We’ve got so many messages about X, Y, Z appreciation month, or sexual assault prevention, or you name it. We don’t even have close to that same level of emphasis on actual warfighting,” said an unidentified recent destroyer captain.

  “Sometimes, I think we care more about whether we have enough diversity officers than if we’ll survive a fight with the Chinese navy,” said an active-duty lieutenant. “It’s criminal. They think my only value is as a black woman. But you cut our ship open with a missile, and we’ll all bleed the same color.”

  Tyler Durden
  Wed, 12/22/2021 – 19:00

• Top 10 Themes For 2022: Part 1
  Top 10 Themes For 2022: Part 1

  In its comprehensive take of the top 10 themes for 2022, Deutsche Bank’s Luke Templeman asks if covid is the only theme that matters? He correctly responds that “that is not the right question. In fact, covid is now not so much a theme as it is the backdrop against which most things are evolving in economics, finance, and corporates.”

  So what themes matter in 2022?

  As part of Deutsche Bank’s look ahead analysis, Templeman, director of the bank’s thematic research group, addresses the big macro topics – the risk of the global economy overheating given stimulus measures and the change in attitude of central banks towards employment goals. Then there is how tight labor markets may further boost inflation. A flow on is higher bond yields and the end of free money that has propped up markets since the financial crisis. As he notes, while “stock markets may not crash, they could witness the return of fundamental investing.” It certainly would be welcomed… even if it comes with the S&P several hundred/thousand point lower.

  Some more observations from Tempelman’s summary:

  Corporates, in 2022, will struggle with new issues – in addition to labor shortages. For two decades, returns have been generated by rising profit margins and cheap debt. Now both those things are looking to reverse in 2022. Competition regulators are flexing their muscle and, to compensate, managers will have to rediscover their operational mojo. That means generating more sales from existing assets.

  Does any corporate theme matter in a shortage economy? A good question with a contrarian answer. Basically, we see an inventory glut in 2022. Manufacturers are going full tilt, while retailers are beginning to over-order.

  Then there is ESG, which for better or worse has been turbo-charged by covid. The momentum is fully behind ESG bonds, particularly sustainability-linked bonds: “Investors love the story, customers love the story, and corporates are piling on board.”

  Away from the spotlight, several other themes could have serious repercussions in 2022, according to Deutsche Bank. One is that central bank digital currencies will take a massive step forward with some countries planning to go live in 2022. Meanwhile, the DB strategist argues that most people underestimate how the growing militarization of space will ratchet up geo-political tensions. Between anti-satellite missiles and growing budgets for military space divisions, the worrying thing is that the benefits of space supremacy are now so great that there are reasons why countries may push back against any new treaty.

  * * *

  We split DB’s “Top 10 Themes” into two posts, each covering 5 of the biggest themes the bank believes will define the coming year. Part 1 will cover 1) An overheating economy; 2) Covid optimism; 3) A hypersonic labor market and inflation; 4) Corporate focus on asset efficiency; 5). Inventory glut. The second part, which we will publish tomorrow will turn to 1) Antitrust (or competition) renaissance; 2. The end of free money in stock markets; 3) Space: a worrying geopolitical frontier; 4) Central Bank Digital Currencies: Growing into reality; 5) ESG bonds go mainstream.

  So without further ado, here is theme #1 for 2022…

  1. An overheating economy, by Jim Reid

  While some commentators worry about stagflation in 2022, it is far more likely that the US economy will encounter overheating risks. Of course, many economies are still recovering from covid with the current winter wave plus Omicron providing obvious risks. However, unless the new variant completely rewrites the path of the pandemic, next year should be a better year on the pandemic front. Meanwhile, the huge stimulus that remains in the system, alongside easy policy conditions, will continue to ensure both inflation and growth stay high.

  The result is likely to be a “growthflationary” environment in 2022. In turn, the Fed will likely become more aggressive in 2022 in order to curb inflation. This will tighten financial conditions for a period while investors become used to the new regime. Growth should survive this in 2022 as policy and financial conditions will likely stabilize at still accommodative levels as the adjustment takes place. However, should the economy overheat, and the pace of tightening outweigh the historically easy level of financial conditions, the cycle’s end could be brought into sharper focus with a recession in 2023 or 2024 increasingly debated.

  Indeed the starting point is that the spot real federal funds rate is now more negative than it has been at any time since the 1950s. Money supply has exploded in a way it did not after the financial crisis when the world was deleveraging and thus offsetting extreme monetary policy. A lack of deleveraging in this cycle and helicopter money has left a monetary overhang this time round that will continue to encourage high growth and inflation. Potential political gridlock after the mid-terms will not change the legacy fiscal stimulus still working its way through the system in 2022.

  Overheating risks have been amplified by the recent change in the Fed’s attitude towards maximum employment. Maybe history will suggest that the Fed was unfortunate in its timing to move to average inflation targeting just as helicopter money finally arrived that removed the necessity for the policy change. It is arguably fighting the battle of the last cycle. By waiting to see actual gains in employment rather than respond to the clear labor market tightness, albeit exaggerated by the pandemic, it has arguably fallen too far behind the curve.

  One of the biggest differences between this cycle and the last is the US output and employment gap. After the financial crisis both took eight years to close. That was the slowest recovery in history so with hindsight it is quite easy to see why we did not see inflation. In this cycle the gaps will close over the next quarter which will be one of the quickest recoveries in history. So the US economy will be bumping against its inflationary speed limit in 2022 with huge stimulus still working through the system.

  

  Some argue that stagflation is a bigger threat than overheating. The reality is that most economies are still a long way from it. If DB’s growth forecasts prove correct, then most of the G7 economies will still generate economic growth of at least three per cent next year. This is some way above trend and inconsistent with ‘stagflationary’ dynamics.

  We can therefore expect robust growth, and elevated inflation. This makes the overheating of the global economy a key risk in 2022. Consider that in 2021, investors went from not pricing in a hike until 2024 to expecting as many as three next year. The risk lies in central banks, led by the US, being forced enact yet more.

  * * *

  2. Covid optimism. – Henry Allen

  The covid outlook for the northern hemisphere winter is deeply concerning. Numerous countries are moving into fresh lockdowns, and the arrival of the Omicron variant has led to new travel restrictions and another bout of financial market turmoil. Nevertheless, there are credible reasons to be optimistic about how the pandemic may evolve in 2022. Critically, improved medicines will hopefully become mainstream. At the same time, an expected increase in the availability of several covid vaccines means that those populations without access should finally receive it. And as the world begins to manage covid, it is likely that benefits will be found in some neglected areas of society upon which the pandemic has thrown a light.

  The biggest game-changer of 2022 will likely be antiviral pills. These promise to diminish hospitalizations and fatalities and already there are two encouraging candidates. Trials of the Merck pill suggest it cuts the risk of hospitalization and death by 30 per cent. Meanwhile, the Pfizer pill appears to reduce hospitalization and deaths among high-risk adults by 89 per cent. Both have applied to US regulators for authorization and Merck’s pill has already been approved in the UK.

  Apart from pills, treatments are broadening. For example, the US Coronavirus Treatment Acceleration Program is supporting a range of therapies in development, such as antiviral pills, neutralizing antibodies, and also immunomodulators that reduce the immune reaction to the virus and prevent it going into harmful overdrive.

  

  Vaccine manufacturing will also accelerate in 2022. The production of the Pfizer vaccine is expected to increase by a third to 4bn doses. Moderna will also increase supply. A chunk of this inventory is likely to be distributed in the developing world where vaccine access has, so far, been poor. Moreover, the extension of the vaccine to younger age groups will push developed countries closer to herd immunity. The US has already authorized the Pfizer vaccine for children aged 5-11. Other countries are following suit.

  Taking a step back, the tragedy of covid has forced societies to reckon with difficult issues that have been neglected for too long. As they begin to manage the virus more effectively, this offers hope that areas such as tackling educational inequalities or greater support for mental health are given greater attention.

  The pandemic has also helped us become more inventive in how we can prevent such crises in the future. The importance of a quick reaction has been fully accepted. Indeed, leaders at a recent G20 summit pledged to enhance early detection and warning systems, as well as shorten the development cycle for vaccines and therapeutics. At a smaller scale, buildings and schools are starting to plan better ventilation systems.

  Of course, new variants still pose a risk, and the arrival of the new Omicron variant has demonstrated this once again. Yet over the medium term, history shows that many viruses can become less dangerous over time, which was what happened with the H1N1 virus that was responsible for the Spanish Flu in 1918. And with the advantages of modern medicine and the array of treatments in the development pipeline, we can be confident that eventually, humanity will move past this virus too.

  * * *

  3. A hypersonic labour market and inflation,  Olga Cotaga

  Just as hypersonic missiles are stirring geopolitical tensions, the hypersonic recovery of the labor market is stirring inflationary concerns. That will likely be exacerbated in 2022 as workers that are upskilling themselves leave their current roles in search of a better job.

  The big difference in this labor market recovery is its breath-taking speed. After a normal recession, it usually takes between four to seven years for the labor market to recover. This time, it is recuperating much faster. The US unemployment rate has now returned to 4.2 per cent, not far from the 3.5 per cent seen just before covid. In France and Spain labour force participation is already higher than prior to covid.

  Whilst it is a relief that people are back in work, the speed of the recovery does contain some hidden dangers. This is because history shows the unemployment rate tends to decrease for the length of an economic cycle. Given this economic cycle has only just begun, and cycles in recent decades have been lasting longer, that implies the labour market may continue to tighten for years. Exacerbating this tightness is the fact that not everyone has returned to work. Indeed, in the US, more than 4m people left their job since covid and have not come back. More than half of those have retired early.

  An outlook for an unusually tight labor market is a perfect recipe for wage-driven price growth. Our economists have previously commented that excluding the stagflation period of the late-1970s and early- 1980s there is a decent correlation (41 per cent) between unemployment and inflation, although the correlation has weakened over time.

  Amplifying the issue is that covid has inspired people to upskill and find a better-suited and better-paid job. Indeed, more than two-thirds of workers globally are willing to retrain for new jobs.1 Meanwhile, a third of people who have ever registered on a ‘Massive Open Online Course’ platform joined in 2020.2 A global survey of nearly 6,000 people found that 40 per cent are at least somewhat likely to leave their current jobs.

  

  The issue is dominating corporate discussion, as seen in the chart above, and pushing companies to be more proactive. Alphabet, Amazon, IBM, Walmart and many other large companies are introducing training programs. Some now pay for higher education. Corporates are also spending more on wages and salaries because of labor shortages.

  While avoiding mass unemployment was one of the great successes of covid-policy, there is a catch. After all, hypersonic missiles would not be as much of a threat if they travelled at slower speeds (they would just be missiles). If we are at the start of a new economic cycle that lasts as long as the others of the last four decades, wage inflation will likely continue.

  * * *

  4. Corporate focus on asset efficiency, Luke Templeman

  Investors have not needed to care about bloated companies until now. After all, for the last decade or so, corporate returns were juiced by rising profit margins and super-cheap debt. Companies grew through acquisitions and ignored their asset efficiency. Indeed the median S&P 500 company earned $1 in sales for every $1 it held in assets in the early 2000s. It now earns just 60 cents.

  In 2022, the focus on asset efficiency is set to return as the two other sources of returns on equity – profit margins and leverage – are coming under significant pressure.

  Profit margins will be squeezed as workers increasingly demand higher wages and benefits. The trend towards this began in earnest in 2021; in 2022 it will likely continue as worker shortages persist (see our theme A hypersonic labour market and inflation). Also pressuring margins will be policies that aim to arrest the decline in corporate competition. Indeed, President Biden, and leaders in other developed countries, have lamented how the decline of corporate competition has helped firms over workers.

  Leverage, too, appears set to drop in 2022. Possible interest rate rises will make debt more expensive and, if some level of higher inflation proves permanent, companies can expect higher debt costs in the medium term. Already, companies have been curtailing their leverage. Since it hit a multi-decade peak in mid-last year, leverage in the median S&P 500 company has dropped eight per cent and now sits at 2016 levels.

  

  There are initial signs that asset efficiency is hitting managers’ radar. Over the last three quarters, the asset turnover ratio of S&P 500 companies has risen quicker than at any time since the financial crisis. This is good news. If asset turnover returns to pre-financial crisis levels, returns on equity would theoretically increase by two-thirds.

  Some high-profile companies are already slimming down. Johnson & Johnson, General Electric, and Toshiba have all recently announced plans to split their firms. That comes as our analysis shows that stock market returns of asset-light companies have outperformed asset-heavy companies over the last decade. Private equity will have a field day – they love acquiring unloved spin-offs.

  From an investor’s point of view, if companies do not slim down, they will have to make their existing assets work harder. This will not be easy. It requires someone skilled in turnaround management and the type of structural change that not only consumes a lot of management attention, but also creates ructions amongst staff.

  Just as 2022 will likely usher in the return of investor focus on asset efficiency, it will separate companies into three groups: those that are already asset efficient, those that ignore the issue, and those that are inefficient but addressing the problem. The latter group may provide investors with the most value. And as they do, they will likely penalize those companies that continue to meander along with a bloated balance sheet.

  * * *

  5. Inventory glut, Olga Cotaga

  In 2022, we are going to have a lot of stuff. Everywhere. Supply chain disruptions, coupled with an imperfect market, are likely to lead retailers and manufactures to being stuck with abundant inventories. A slower than expected release of pent-up demand, as well as a focus on experiences over goods, will likely exacerbate the glut. Marie Kondo would not approve.

  An inventory glut will follow the fact that retailers do not want to be caught off guard with a lack of product as they have been last year and this. Although their inventories are currently low (partly due to the auto shortage), there are signs that retailers are over-ordering ahead of the busy holiday period. All the while, manufacturers are already producing and holding far more inventory than they did before covid.

  

  This means 2022 is set for the “bullwhip” effect – where retailers and manufacturers respond to each other by under- and then over-ordering. Shortages are followed by gluts and then shortages until equilibrium is finally established.

  Third-quarter earnings results showed the highest number of S&P 500 companies discussing “supply chains” in a decade.

  Exacerbating the problem are concerns that customer demand does not recover as quickly as corporates think. Our latest presentation on pent-up demand, shows that people expect their spending to rise. But each month so far, those expectations have failed to materialize. Specifically, Americans have been spending less but expect to spend more. This is why expectations of a release of pent-up demand may not materialise. That will leave a glut of inventory either in warehouses or on the shop floor.

  One important factor behind demand not materializing is people’s appetite for savings. The US still has the highest level of covid savings of large economies, at about $1.2tn, but Europeans have arguably saved more. Savings of about six per cent of 2019 GDP are slightly higher than in the US. On top of that, more Europeans think their savings will increase in the next 12 months, compared with the beginning of last year.

  Equally as important for inventories is the fact that, so far, people have shown a preference for experiences over goods. Indeed, the upwards trajectory in spending since the beginning of 2021 has been the sharpest in the out-of-home entertainment, such as restaurant meals, theater, or cinema. This has little to do with inventories.

  The swings in the availability of goods will continue back and forth until an equilibrium is eventually established. In other words, the “bullwhip” effect is likely to continue to dominate the supply chains in 2022 and lead to a surplus of inventories. In that case, Marie Kondo’s organizational techniques may prove useful.

  Tyler Durden
  Wed, 12/22/2021 – 18:45

• Firm Tasked With Disbursing $40 Million From Musk's SEC Settlement Hasn't Filed Required Statements, Judge Says
  Firm Tasked With Disbursing $40 Million From Musk’s SEC Settlement Hasn’t Filed Required Statements, Judge Says

  As a part of Elon Musk’s settlement with the SEC over his questionable Tweets – namely, one enormously questionable one wherein he faked an $80 billion buyout for his company – a $40 million fund had been set up from fines that Musk had to fork over.

  The fund was set up to be disbursed to those harmed by Musk’s statements, but U.S. District Judge Alison Nathan – who recently has had her hands full with the Ghislaine Maxwell trial – issued an order this week noting that the firm set up to manage the funds wasn’t holding up its end of the bargain. 

  

  On Tuesday of this week, Nathan noted that a firm appointed in May to manage the distributions hadn’t “filed required accounting statements”, according to Bloomberg. Nathan ordered that Rust Consulting submit a status report to the court by January 7. 

  The settlement between Musk and the SEC was reached back in September of 2018. Musk’s settlement didn’t include an admission of wrongdoing, but did result in the SEC setting up a Fair Fund to repay investors.

  Since the settlement, Musk has referred to the SEC as the “shortseller enrichment commission” and has invited the agency – in not so many words – to fellate him. 

  Tyler Durden
  Wed, 12/22/2021 – 18:40

• Former Trump Adviser Michael Flynn Sues Jan. 6 Committee Over Subpoenas
  Former Trump Adviser Michael Flynn Sues Jan. 6 Committee Over Subpoenas

  Authored by Isabel van Brugen via The Epoch Times (emphasis ours),

  Former Trump adviser and retired Lt. Gen. Michael Flynn on Tuesday sued the House Select Committee investigating the Jan. 6 breach of the U.S. Capitol, seeking to block the panel from obtaining his phone records.

  

  In a lawsuit filed in federal court in Florida, Flynn alleged that the subpoena issued to him by the committee last month was too broad in scope and punishes him for constitutionally protected speech he engaged in as a private citizen.

  “Flynn has raised significant Constitutional and practical concerns that preclude his compliance with the subpoena without clarification of its scope and terms by the Select Committee,” the lawsuit states.

  The former head of the Defense Intelligence Agency and former President Donald Trump’s national security adviser also alleged in the lawsuit that the congressional committee “has no authority to conduct business because it is not a duly constituted Select Committee.”

  An appeals court has rejected that argument, ruling on Dec. 9 that the committee was valid and entitled to see White House records Trump has tried to shield from public view.

  The House Select Committee has requested that Flynn testify before the panel, and that he hand over documents about a “command center” at Washington’s Willard Hotel the committee alleges was set up to steer efforts to deny Democrat Joe Biden his November 2020 election win.

  “Without intervention by this Court, General Flynn faces the harm of being irreparably and illegally coerced to produce information and testimony in violation of the law and his constitutional rights,” the lawsuit says. “He will also illegally and irreparably harmed by the Select Committee’s unlawful and secret seizure of his and his family’s personal information from their telecommunications and/or electronic mail service providers.”

  Flynn’s lawsuit comes nearly a week after freelance photojournalist Amy Harris filed a lawsuit against the committee in federal court in Washington, seeking to block a subpoena. Her lawsuit argues that demanding her phone records violates her right not to reveal confidential sources.

  Trump’s former chief of staff Mark Meadows also sued the House of Representatives panel this month after they said they would move to hold him in contempt of Congress for refusing to appear for a deposition at the request of the committee.

  Meadows’s lawsuit, filed in a Washington, D.C. federal court, asks a judge to invalidate two subpoenas that he says are “overly broad and unduly burdensome.” It accuses the committee of overreaching by issuing a subpoena to Verizon for his cellphone records.

  The Epoch Times has contacted the Jan. 6 Select Committee for comment.

  Reuters contributed to this report.

  Tyler Durden
  Wed, 12/22/2021 – 18:20

• FDA Releases More Data On "Adverse Reactions" To Pfizer Vaccine
  FDA Releases More Data On “Adverse Reactions” To Pfizer Vaccine

  As the FDA prepares to approve Pfizer’s new pill for treating high-risk patients infected with COVID, more information about dangerous side effects tied to its vaccine are coming to light.

  Just yesterday, we reported another death tied to the vaccine in New Zealand. Now, documents released by the FDA reveal that drugmaker Pfizer recorded nearly 160K adverse reactions to its COVID vaccine in the initial months of its rollout.

  

  The data were obtained by a group of doctors, professors, and journalists calling themselves Public Health and Medical Professionals for Transparency. They filed a Freedom of Information Act request with the FDA asking for their release. And the first tranche of documents revealed that, as of February 2021, when Pfizer’s shot was being rolled out worldwide on an emergency basis, the drugmaker had compiled more than 42K case reports detailing nearly 160K individual adverse reactions to the vaccine.

  The data show the bulk of the adverse event cases, both serious and non-serious, were classified as “general disorders”.

  

  Among the more common conditions reported were fevers (pyrexia), fatigue, and diarrhea, among others.

  But perhaps the most surprising number in the entire report is that more than 1K of these cases were fatal in the US. All told, more than 3K deaths have been linked to the vaccine, something that’s in line with the company’s own data. Critics have argued that some of the deaths can’t be conclusively linked to the vaccine, but others have instead insisted that the number of deaths might still be underreported.

  Keep in mind, these data were used by the FDA to declare the Pfizer jab safe, which it did for Americans aged 16 and older in August. It has since been approved for children as young as five, along with booster doses for people aged 16 and up as of last week.

  Readers can find the complete breakdown of data from Public Health and Medical Professionals For Transparency below:

  5.3.6 Postmarketing Experience on Scribd

  Tyler Durden
  Wed, 12/22/2021 – 18:00

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