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Blain: Markets Are “Distracted, Confused, & Not Seeing The Downright Obvious”

Blain: Markets Are "Distracted, Confused, & Not Seeing The Downright Obvious"

Authored by Bill Blain via MorningPorridge.com,

“ Chaos…

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Blain: Markets Are "Distracted, Confused, & Not Seeing The Downright Obvious"

Authored by Bill Blain via MorningPorridge.com,

“ Chaos is the law of nature. Order is the dream of man.”

Inflation will dominate the headlines while the US earnings season kicks off. The prospects for stocks on the back of falling numbers and crashing consumer sentiment bode ill for recovery, and strongly suggest there is further market downside to come in Q3.

Even though I am faced with this uncomfortably empty screen to fill with words of market and economic wisdom, it’s difficult to be unhappy this glorious morning. The sun is shining! I just had a great swim in the river, my wife and dog apparently love me, and I’m going on holiday next week.

As I said, the only fly in the ointment is writing this morning’s Porridge on the week ahead.

After last week’s strong US jobs report – momentarily suggesting there is less of a global recession threat – this week will reverse into rising inflation fears again, raising the higher/faster interest rate spectre. We’ve got a host of inflation numbers coming out, but also the shutdown a key Russia/Europe gas pipeline for “maintenance”, which many analysts think will crush European efforts to build winter reserves, promising further energy price spikes through the second half of this year. The talk in markets is all further China lockdowns, and Euro-dollar parity as inflation and recession look increasingly dangerous for Europe in particular.

There is so much to say about the up/down of markets, but I am not sure I can articulate it clearly! Therefore I think I shall go a bit free form this morning – throw a couple of ideas at the screen and see what happens:

Broadly, markets are distracted and confused, not seeing the downright obvious. I’m trying to figure out how vulnerable that leaves them to shock and awe surprises, the actuality of the macro-outlook, and the systemic consequences of policy mistakes. The only upside in such conditions is they do create price moves that translate into opportunities!

Last week was an extraordinary lesson in markets – watching tech stocks recover on the hope recessionary expectations would mean a slower series of interest rate rises, thus raising hopes for accommodative central banks to juice markets higher to stave off recession. Doh! Some market commentators say it’s a reverse rotation out of value/fundamental stocks back into more speculative growth stocks – saying the 9 month tech bear phase is basically played out, and it’s time to buy corrected tech names…

Really? It called talking their book.

There is an assumption the market knows best, and will set the right price of everything, based on the market being the collective intelligence of all participants. Except it is not. The market has no memory and certainly doesn’t remember making the same mistakes over and over again. The market is just a voting machine. It’s a form of popularity contest – whoever markets/plugs their ideas/positions best, wins!

A good example of the kind of hype that propels stocks in febrile markets, and ridiculous false assets like cryptos and NFTs, is investors ongoing fascination with Cathie Wood’s ARK. The narrative is simple – it must be a great investment, look what it was worth! The papers are full of stories that support it: I saw a headline on CNBC about the charts suggesting a rally (but it was behind a paywall, and it’s probably bunkum anyway). Most of the stocks in the ETF have never, and never will make a profit. Market participants believe what they want to believe, and if they believe ARK is undervalued because only Cathie perceives the future – their call.

It’s not the market that is stupid – its participants!

The reality is nothing has changed about speculative tech stock fundamentals. Food delivery companies are still struggling to deliver food at a profit. Internet warehouses and subscription services are still struggling to make all the expensive approaches work. Media manipulation companies are still trying to persuade increasingly distracted used to let them monetise us through advertising. It’s all dressed in a wash of modernity, the next-new-new-thing, but Tech stocks that sound ever so clever and remain ever so unprofitable will likely remain so. And they remain vulnerable to shocks. This morning Tencent and Alibaba are leading further collapses in value after Chinese fines on their monopolistic policies. Regulation bites.

The next shock for markets is likely to be corporate earnings. Thus far they’ve been insulated by the pandemic reopening. The Q2 numbers start this week and will likely show the impact of long-term supply shocks, energy inflation and the increase labour scarcity as workers seek better paid employment. (If they don’t, be suspicious!) Corporates will put the best possible spin on their numbers, but the macro economic reality has to bite soon. As interest rates rise, and corporate credit spreads widen faster, leverage within the corporate sector will start to take down multiple credit zombies – overly indebted companies. All these years spend borrowing money at ultra-cheap rates to finance stock-buy-back programmes will be shown to have been valueless; the company bankrupted, and the stock tanked!

I’ve come to a very simple conclusion about economics. The reason it’s called the dismal science is it’s basically chaotic. Economics is all about analysing events to understand what happens next. But events have a path all of their own – we can plot broad expectations, but not the increasingly unpredictable consequences that ripple outwards from every decision like a nuclear chain reaction. The way in which inflation and interest rates will impact the economy is very well documented and understood by students of economic history – perhaps not so well by inexperienced investment managers – the ones who buy the hype.

One of the biggest risks to markets is always policy mistakes, the obvious one being central banks triggering a recession through the pace of interest rate hikes, or being too slow to address inflation.

But there are equal risks in politics.

There is a frightening headline on Bloomberg this morning – 4.5 million UK families are already in financial trouble as a result of financial distress. More are struggling with the consequences of higher energy and food prices. Wages have failed to address inflation, and the welfare net is full of holes. Food banks and free school dinner schemes have been instituted by concerned individuals around the country. Even the financial services industry will not be immune – the BBerg article noted workers are cutting their pension saving contributions.

Yet, the headlines in the UK are all about the multiple number of Conservative Politicians putting themselves forwards as our next prime minister. I forced myself to watch the Sunday Political Shows, and read the papers to understand their approach – and came to the conclusion most of the challengers are economically illiterate.

Only one of them seemed to connect the urgency of the situation – the need for tax cuts to boost jobs and consumer sentiment to address the looming stagflation/recession threat, but all the interviewer wanted to know about was his non-dom status 2 decades ago. Its going to be that kind of contest – how clean they are. Not how they will save the UK economy. Most of other candidates seemed blithely unaware of the reality on the streets.

The biggest threat to the UK Economy is the urgent need for decisions, but the fractured government is going to be spending the next three months listening to candidates blather about how different they are to Boris.. Words… just words.

Tyler Durden Mon, 07/11/2022 - 08:50

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How They Convinced Trump To Lock Down

How They Convinced Trump To Lock Down

Authored by Jeffrey A. Tucker via Brownstone Institute,

An enduring mystery for three years is how…

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How They Convinced Trump To Lock Down

Authored by Jeffrey A. Tucker via Brownstone Institute,

An enduring mystery for three years is how Donald Trump came to be the president who shut down American society for what turned out to be a manageable respiratory virus, setting off an unspeakable crisis with waves of destructive fallout that continue to this day. 

Let’s review the timeline and offer some well-founded speculations about what happened. 

On March 9, 2020, Trump was still of the opinion that the virus could be handled by normal means. 

Two days later, he changed his tune. He was ready to use the full power of the federal government in a war on the virus. 

What changed? Deborah Birx reports in her book that Trump had a friend die in a New York hospital and this is what shifted his opinion. Jared Kushner reports that he simply listened to reason. Mike Pence says he was persuaded that his staff would respect him more. No question (and based on all existing reports) that he found himself surrounded by “trusted advisors” amounting to about 5 or so people (including Mike Pence and Pfizer board member Scott Gottlieb)

It was only a week later when Trump issued the edict to close all “indoor and outdoor venues where people congregate,” initiating the biggest regime change in US history that flew in the face of all rights and liberties Americans had previously taken for granted. It was the ultimate in political triangulation: as John F. Kennedy cut taxes, Nixon opened China, and Clinton reformed welfare, Trump shut down the economy he promised to revive. This action confounded critics on all sides. 

A month later, Trump said his decision to have “turned off” the economy saved millions of lives, later even claiming to have saved billions. He has yet to admit error. 

Even as late as June 23rd of that year, Trump was demanding credit for having followed all of Fauci’s recommendations. Why do they love him and hate me, he wanted to know. 

Something about this story has never really added up. How could one person have been so persuaded by a handful of others such as Fauci, Birx, Pence, and Kushner and his friends? He surely had other sources of information – some other scenario or intelligence – that fed into his disastrous decision. 

In one version of events, his advisors simply pointed to the supposed success of Xi Jinping in enacting lockdowns in Wuhan, which the World Health Organization claimed had stopped infections and brought the virus under control. Perhaps his advisors flattered Trump with the observation that he is at least as great as the president of China so he should be bold and enact the same policies here. 

One problem with this scenario is timing. The Oval Office meetings that preceded his March 16, 2020, edict took place the weekend of the 14th and 15th, Friday and Saturday. It was already clear by the 11th that Trump was ready for lockdowns. This was the same day as Fauci’s deliberately misleading testimony to the House Oversight Committee in which he rattled the room with predictions of Hollywood-style carnage. 

On the 12th, Trump shut all travel from Europe, the UK, and Australia, causing huge human pile-ups at international airports. On the 13th, the Department of Health and Human Services issued a classified document that transferred control of pandemic policy from the CDC to the National Security Council and eventually the Department of Homeland Security. By the time that Trump met with Fauci and Birx in that legendary weekend, the country was already under quasi-martial law. 

Isolating the date in the trajectory here, it is apparent that whatever happened to change Trump occurred on March 10, 2020, the day after his Tweet saying there should be no shutdowns and one day before Fauci’s testimony. 

That something very likely revolves around the most substantial discovery we’ve made in three years of investigations. It was Debbie Lerman who first cracked the code: Covid policy was forged not by the public-health bureaucracies but by the national-security sector of the administrative state. She has further explained that this occurred because of two critical features of the response: 1) the belief that this virus came from a lab leak, and 2) the vaccine was the biosecurity countermeasure pushed by the same people as the fix. 

Knowing this, we gain greater insight into 1) why Trump changed his mind, 2) why he has never explained this momentous decision and otherwise completely avoids the topic, and 3) why it has been so unbearably difficult to find out any information about these mysterious few days other than the pablum served up in books designed to earn royalties for authors like Birx, Pence, and Kushner. 

Based on a number of second-hand reports, all available clues we have assembled, and the context of the times, the following scenario seems most likely. On March 10, and in response to Trump’s dismissive tweet the day before, some trusted sources within and around the National Security Council (Matthew Pottinger and Michael Callahan, for example), and probably involving some from military command and others, came to Trump to let him know a highly classified secret. 

Imagine a scene from Get Smart with the Cone of Silence, for example. These are the events in the life of statecraft that infuse powerful people with a sense of their personal awesomeness. The fate of all of society rests on their shoulders and the decisions they make at this point. Of course they are sworn to intense secrecy following the great reveal. 

The revelation was that the virus was not a textbook virus but something far more threatening and terrible. It came from a research lab in Wuhan. It might in fact be a bioweapon. This is why Xi had to do extreme things to protect his people. The US should do the same, they said, and there is a fix available too and it is being carefully guarded by the military. 

It seems that the virus had already been mapped in order to make a vaccine to protect the population. Thanks to 20 years of research on mRNA platforms, they told him,  this vaccine can be rolled out in months, not years. That means that Trump can lock down and distribute vaccines to save everyone from the China virus, all in time for the election. Doing this would not only assure his reelection but guarantee that he would go down in history as one of the greatest US presidents of all time. 

This meeting might only have lasted an hour or two – and might have included a parade of people with the highest-level security clearances – but it was enough to convince Trump. After all, he had battled China for two previous years, imposing tariffs and making all sorts of threats. It was easy to believe at that point that China might have initiated biological warfare as retaliation. That’s why he made the decision to use all the power of the presidency to push a lockdown under emergency rule. 

To be sure, the Constitution does not allow him to override the discretion of the states but with the weight of the office complete with enough funding and persuasion, he could make it happen. And thus did he make the fateful decision that not only wrecked his presidency but the country too, imposing harms that will last a generation. 

It only took a few weeks for Trump to become suspicious about what happened. For weeks and months, he toggled between believing that he was tricked and believing that he did the right thing. He had already approved another 30 days of lockdowns and even inveighed against Georgia and later Florida for opening. He went so far as to claim that no state could open without his approval. 

He did not fully change his mind until August, when Scott Atlas revealed the whole con to him. 

There is another fascinating feature to this entirely plausible scenario. Even as Trump’s advisors were telling him that this could be a bioweapon leaked from the lab in China, we had Anthony Fauci and his cronies going to great lengths to deny it was a lab leak (even if they believed that it was). This created an interesting situation. The NIH and those surrounding Fauci were publicly insisting that the virus was of zoonotic origin, even as Trump’s circle was telling the president that it should be regarded as a bioweapon. 

Fauci belonged to both camps, which suggests that Trump very likely knew of Fauci’s deception all along: the “noble lie” to protect the public from knowing the truth. Trump had to be fine with that. 

Gradually following the lockdown edicts and the takeover by the Department of Homeland Security, in cooperation with a very hostile CDC, Trump lost power and influence over his own government, which is why his later Tweets urging a reopening fell on deaf ears. To top it off, the vaccine failed to arrive in time for the election. This is because Fauci himself delayed the rollout until after the election, claiming that the trials were not racially diverse enough. Thus Trump’s gambit completely failed, despite all the promises of those around him that it was a guaranteed way to win reelection.

To be sure, this scenario cannot be proven because the entire event – certainly the most dramatic political move in at least a generation and one with unspeakable costs for the country – remains cloaked in secrecy. Not even Senator Rand Paul can get the information he needs because it remains classified. If anyone thinks the Biden approval of releasing documents will show what we need, that person is naive. Still, the above scenario fits all available facts and it is confirmed by second-hand reports from inside the White House. 

It’s enough for a great movie or a play of Shakespearean levels of tragedy. And to this day, none of the main players are speaking openly about it. 

Jeffrey A. Tucker is Founder and President of the Brownstone Institute. He is also Senior Economics Columnist for Epoch Times, author of 10 books, including Liberty or Lockdown, and thousands of articles in the scholarly and popular press. He speaks widely on topics of economics, technology, social philosophy, and culture.

Tyler Durden Fri, 03/24/2023 - 17:40

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Could the common cold give children immunity against COVID? Our research offers clues

Certain immune cells acquired from a coronavirus that causes the common cold appear to react to COVID – but more so in children that adults.

Rawpixel.com/Shuttersock

Why children are less likely to become severely ill with COVID compared with adults is not clear. Some have suggested that it might be because children are less likely to have diseases, such as type 2 diabetes and high blood pressure, that are known to be linked to more severe COVID. Others have suggested that it could be because of a difference in ACE2 receptors in children – ACE2 receptors being the route through which the virus enters our cells.

Some scientists have also suggested that children may have a higher level of existing immunity to COVID compared with adults. In particular, this immunity is thought to come from memory T cells (immune cells that help your body remember invading germs and destroy them) generated by common colds – some of which are caused by coronaviruses.

We put this theory to the test in a recent study. We found that T cells previously activated by a coronavirus that causes the common cold recognise SARS-CoV-2 (the virus that causes COVID) in children. And these responses declined with age.


Read more: Does COVID really damage your immune system and make you more vulnerable to infections? The evidence is lacking


Early in the pandemic, scientists observed the presence of memory T cells able to recognise SARS-CoV-2 in people who had never been exposed to the virus. Such cells are often called cross-reactive T cells, as they stem from past infections due to pathogens other than SARS-CoV-2. Research has suggested these cells may provide some protection against COVID, and even enhance responses to COVID vaccines.

What we did

We used blood samples from children, sampled at age two and then again at age six, before the pandemic. We also included adults, none of whom had previously been infected with SARS-CoV-2.

In these blood samples, we looked for T cells specific to one of the coronaviruses that causes the common cold (called OC43) and for T cells that reacted against SARS-CoV-2.

We used an advanced technique called high-dimensional flow cytometry, which enabled us to identify T cells and characterise their state in significant detail. In particular, we looked at T cells’ reactivity against OC43 and SARS-CoV-2.

We found SARS-CoV-2 cross-reactive T cells were closely linked to the frequency of OC43-specific memory T cells, which was higher in children than in adults. The cross-reactive T cell response was evident in two-year-olds, strongest at age six, and then subsequently became weaker with advancing age.

We don’t know for sure if the presence of these T cells translates to protection against COVID, or how much. But this existing immunity, which appears to be especially potent in early life, could go some way to explaining why children tend to fare better than adults with a COVID infection.

A little boy sleeps with a teddy bear.
Children are less likely to get very sick from COVID than adults. Dragana Gordic/Shutterstock

Some limitations

Our study is based on samples from adults (26-83 years old) and children at age two and six. We didn’t analyse samples from children of other ages, which will be important to further understand age differences, especially considering that the mortality rate from COVID in children is lowest from ages five to nine, and higher in younger children. We also didn’t have samples from teenagers or adults younger than 26.

In addition, our study investigated T cells circulating in the blood. But immune cells are also found in other parts of the body. It remains to be determined whether the age differences we observed in our study would be similar in samples from the lower respiratory tract or tonsil tissue, for example, in which T cells reactive against SARS-CoV-2 have also been detected in adults who haven’t been exposed to the virus.


Read more: Colds, flu and COVID: how diet and lifestyle can boost your immune system


Nonetheless, this study provides new insights into T cells in the context of COVID in children and adults. Advancing our understanding of memory T cell development and maturation could help guide future vaccines and therapies.

Marion Humbert received funding from KI Foundation for Virus Research (Karolinsk Institutet, Sweden) and Läkare mot AIDS (Sweden).

Annika Karlsson receives funding from the Swedish Research Council (Dnr 2020-02033), CIMED project grant, senior (Dnr: 20190495), and Karolinska Institutet (Dnr: 2019-00931 and 2020-01599).

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Where there’s smoke, there’s thiocyanate: McMaster researchers find tobacco users in Canada are exposed to higher levels of cyanide than other regions

HAMILTON, ON – Mar 24, 2024 – Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a…

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HAMILTON, ON – Mar 24, 2024 Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a large-scale population health study from McMaster University.

Credit: McMaster University

HAMILTON, ON – Mar 24, 2024 Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a large-scale population health study from McMaster University.

Scientists made the discovery while investigating the molecule thiocyanate – a detoxified metabolite excreted by the body after cyanide inhalation. It was measured as a urinary biomarker of tobacco use in a study of self-reported smokers and non-smokers from 14 countries of varying socioeconomic status.

“We expected the urinary thiocyanate levels would be similar across regions and reflect primarily smoking intensity. However, we noticed significant elevation of thiocyanate in smokers from high-income countries even after adjusting for differences in the number of cigarettes smoked per day,” says Philip Britz-McKibbin, co-author of the study and a professor of chemistry and chemical biology at McMaster.

Tobacco-related illness remains the leading cause of preventable illness and premature death in Canada, contributing to approximately 48,000 deaths annually. According to researchers, the findings could be caused by the type of cigarettes smoked in high-income countries like Canada.

“The cigarettes commonly consumed in Canada are highly engineered products with lower tar and nicotine content to imply they’re less harmful. Heavy smokers with nicotine dependence compensate by smoking more aggressively with more frequent and deeper inhalations that may elicit more harm, such as greater exposure to the respiratory and cardiotoxin, cyanide.”

Smoking rates in Canada have declined from 26 per cent in 2001 to 13 per cent in 2020. But participation in smoking cessation programs has declined during the COVID-19 pandemic, leading to concern about a potential uptick in smoking rates, including cannabis use and a plethora of vaping of products popular among young adults.

Researchers say urinary thiocyanate can serve as a robust biomarker of the harms of tobacco smoke that will aid future research on the global tobacco picture, since most smokers now reside in developing countries. As smoking rates have decreased here in Canada, at-risk groups like youth and pregnant women have been prone to underreport their tobacco use when surveyed, making a reliable biomarker more valuable.

“Historically assessing tobacco behaviors have relied on questionnaires that are prone to bias, especially when comparing different countries and local cultures. The idea is to find robust methods that can quantify recent tobacco smoke exposure more reliably and objectively, which may better predict disease risk and prioritize interventions for smoking cessation.” says Britz-Mckibbin.

The study was published in the latest issue of Nicotine and Tobacco Research and received funding from the Natural Sciences and Engineering Research Council of Canada, Genome Canada, the Canada Foundation for Innovation, Hamilton Health Sciences New Investigator Fund, and an internal grant from the Population Health Research Institute.

 

-30-

 

For more information please contact:

Matt Innes-Leroux

Media Relations

McMaster University

647-921-5461 (c)

leroum2@mcmaster.ca

 

Photos of Philip Britz-McKibbin can be found here

Credit: McMaster University


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