... is inflation or deflation, a question which is even more critical and urgent today, yet which provokes even more market confusion, which can easily be seen in the record divergence between real rates (inflation adjusted current rates) which are at all time record lows, and breakevens (inflation expectations), which have been soaring for the past 3 months, a topic which we addressed earlier this week in "What's Behind The Bizzare Break Between Breakevens And Crashing Real Rates."
Yet one place where the all-important answer to this question that will define the global monetary system for the foreseeable future may be found is not in the US at all, but rather in China, as present in today's chart of the day, showing the uncanny correlation between China's credit impulse and (12 month lagged) US reflation, as measured by CPI-adjusted real rates.
Now, frequent Zero Hedge readers will be quite familiar with the topic of China's credit impulse which year after year we have said that it is "all the matters" whether both China and the world face a reflationary wave, as discussed in:
At the risk of repeating ourselves, this is what we said back in 2017:
... as we have explained for years, starting back in 2010, when it comes to the global credit impulse, it was, is and will be all about China: without a massive surge in debt creation over and above the prior year, and thus a boost to annual impulse, the global economy virtually always rolls over. As UBS calculates, credit impulse has a strong correlation with global domestic demand growth: the average DM correlation with domestic demand is 0.67 (and as high as 0.75 for the US) whereas for EM it's only 0.23. The correlations for Poland (0.67), Turkey (0.66), Brazil (0.6) and South Africa (0.55) are all decent but India (0.15) and China (0.1) are very low, possibly because of problems with the GDP data."
The bottom line: absent a new, and even more gargantuan credit expansion by Beijing - which is not likely to happen at a time when every single day China warns about cutting back on shadow banking and loan growth - the so-called recovery is now assured of fading. It is just a matter of time.
And so, after two years in which China's credit impulse was negative, Beijing has stimulated the economy via fiscal and monetary pathways just enough to push the credit impulse not only into positive territory, but also the highest level since 2017.
And, as the chart above shows, there is a 12 month lag between China's credit impulse and US real yields, which as we shown in recent days, determine virtually everything, from the price of gold and stocks, to the value of the dollar, to - of course - nominal interest rates.
In fact, if the correlation shown above is maintained, one can extrapolate that within the next 6 to 9 months, US real rates will soar by roughly 150bps, which if one assumes breakevens remain unchanged, will push 10Y yields north of 3%, a level that will certainly lead to a market crash (the 10Y nominal spiked above 3% in Sept 2018 when stocks crashed on fears the Fed was eager to cool the overheating economy).
Of course, a reflationary outcome is precisely what every establishment entity wants, from central banks to politicians across the globe. In fact, as BofA's Michael Hartnett writes in his latest Flow Show note "bigger government (expansion of monopolistic public sector), smaller world (breakdown of global supply chains), dollar debasement (inflation solves excess indebtedness) all secular reasons to raise inflation hedges big-time heading into 2021."
Why should ordinary equity investors care about any of this? Because as Hartnett summarizes, "consumers, China, inflation all putting upward pressure on bond yields - which is what ends bull markets."
But wait there's more, because in addition to the positive feedback loop sparked by the Fed, as PrismFP's Mark Orsley noted, Nordea's Andreas Steno Larsen today writes that the announcement of a Covid-19 vaccine could be the "reflationary event of the century." Similar to us, Larsen looks at China's credit impulse only instead of its impact on real rates, he focuses on global PMI, which naturally is expected to surge (with a 1 year delay) once the credit impulse spikes.
Translated to the US, where monetary stimulus is still potent, Larsen then predicts that this Chinese reflationary surge would "show up in markedly higher ISM readings than what we have already seen. 70-75 readings are not out of this world to think of; after all it just means that three out of four survey participants find an improving environment compared to the month prior. Not unlikely given that we were all locked into our cellars in March/April." As one would expect, there is also a very close link between the annual change in the ISM and yields (again, with a modest lag):
"So, how far can we go if the yield reflation is allowed to run its course", is the question asked by the Nordea strategist as we go back full circle to the only question that currently matters.
Well, according to Steno Larsen, "the current global PMI already points at >1.5% readings in the 10yr US Treasury yield" although as he then quickly points out, "this is probably a bit farfetched to think of as the Fed has launched a pamphlet of curve flattening measures since the outbreak of the COVID-19 crisis. Usually, we would argue that the Fed would need to massively ”outprint” the US Treasury to create a true curve-steepener environment."
If i) the global PMI rebounds, ii) the Fed and the ECB keep buying and iii) issuance targets prove to be (too) elevated, then we may have the perfect steepener cocktail in the making. We are at least starting to convince ourselves of such a story into Q4, even if flatteners looked yummy before the summer. This is a counterargument to the “supply crowd” that would usually see the world upside down compared to this argument. Nonetheless, we have empiricism on our side.
Larsen's conclusion is that if the above materialize, then 2s10s could steepen as much as 100 bp before the turn of the year "a pretty big deal, one must admit."
At that point another question emerges, namely whether the Fed will allow it, and whether Powell will launch Yield Curve Control once Nominal rates hit 1%, 2% or 3% (after which it is game over).
While the answer remains unclear (and any attempt to hammer nominal yields simply means that the divergence between real rates and breakevens will explode), Nordea has "turned substantially more bearish on duration over the past couple of weeks. Steep, steeper, steepest!"
And judging by the reflationary tsunami that has been unleashed by China, we don't disagree. In fact, no matter who wins the US presidential election in November, 2021 promises to be a very "hot" year indeed.
In this specific predicament, U.S. officials have to choose a strategy to deliver the aid without the perception of benefiting Hamas, a group the U.S. and Israel both classify as a terrorist organization.
When aiding people in war zones, you can’t just send money, a development strategy called “cash transfers” that has become increasingly popular due to its efficiency. Sending money can boost the supply of locally produced goods and services and help people on the ground pay for what they need most. But injecting cash into an economy so completely cut off from the world would only stoke inflation.
So the aid must consist of goods that have to be brought into Gaza, and services provided by people working as part of an aid mission. Humanitarian aid can include food and water; health, sanitation and hygiene supplies and services; and tents and other materials for shelter and settlement.
Due to the closure of the border with Israel, aid can arrive in Gaza only via the Rafah crossing on the Egyptian border.
The U.S. Agency for International Development, or USAID, will likely turn to its longtime partner on the ground, the United Nations Relief and Works Agency, or UNRWA, to serve as supply depots and distribute goods. That agency, originally founded in 1949 as a temporary measure until a two-state solution could be found, serves in effect as a parallel yet unelected government for Palestinian refugees.
USAID will likely want to tap into UNRWA’s network of 284 schools – many of which are now transformed into humanitarian shelters housing two-thirds of the estimated 1 million people displaced by Israeli airstrikes – and 22 hospitals to expedite distribution.
Since Biden took office, total yearly U.S. assistance for the Palestinian territories has totaled around $150 million, restored from just $8 million in 2020 under the Trump administration. During the Obama administration, however, the U.S. was providing more aid to the territories than it is now, with $1 billion disbursed in the 2013 fiscal year.
The United Nations Relief and Works Agency is a U.N. organization. It’s not run by Hamas, unlike, for instance, the Gaza Ministry of Health. However, Hamas has frequently undermined UNRWA’s efforts and diverted international aid for military purposes.
Humanitarian aid professionals regularly have to contend with these trade-offs when deciding to what extent they can work with governments and local authorities that commit violent acts. They need to do so in exchange for the access required to help civilians under their control.
Similarly, Biden has had to make concessions to Israel while brokering for the freedom to send humanitarian aid to Gaza. For example, he has assured Israel that if any of the aid is diverted by Hamas, the operation will cease.
This promise may have been politically necessary. But if Biden already believes Hamas to be uncaring about civilian welfare, he may not expect the group to refrain from taking what they can.
Security best practices
What can be done to protect the security of humanitarian aid operations that take place in the midst of dangerous conflicts?
Under International Humanitarian Law, local authorities have the primary responsibility for ensuring the delivery of aid – even when they aren’t carrying out that task. To increase the chances that the local authorities will not attack them, aid groups can give “humanitarian notification” and voluntarily alert the local government as to where they will be operating.
Under the current agreement between the U.S., Israel and Egypt, the convoy will raise the U.N. flag. International inspectors will make sure no weapons are on board the vehicles before crossing over from Arish, Egypt, to Rafah, a city located on the Gaza Strip’s border with Egypt.
The aid convoy will likely cross without militarized security. This puts it at some danger of diversion once inside Gaza. But whether the aid convoy is attacked, seized or left alone, the Biden administration will have demonstrated its willingness to attempt a humanitarian relief operation. In this sense, a relatively small first convoy bearing water, medical supplies and food, among other items, serves as a test balloon for a sustained operation to follow soon after.
In that case, the presence of U.S. armed forces might provoke attacks on Gaza-bound aid convoys by Hamas and Islamic jihad fighters that otherwise would not have occurred. Combined with the mobilization of two U.S. Navy carrier groups in the eastern Mediterranean Sea, I’d be concerned that such a move might also stoke regional anger. It would undermine the Biden administration’s attempts to cool the situation.
On U.N.-approved missions, aid delivery may be secured by third-party peacekeepers – meaning, in this case, personnel who are neither Israeli nor Palestinian – with the U.N. Security Council’s blessing. In this case, tragically, it’s unlikely that such a resolution could conceivably pass such a vote, much less quickly enough to make a difference.
Topher L. McDougal does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”
Credit: 2023 Barbarewicz et al.
“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”
BUFFALO, NY- October 20, 2023 – A new research perspective was published in Oncoscience (Volume 10) on October 4, 2023, entitled, “Diagnosis and management of postoperative wound infections in the head and neck region.”
In everyday clinical practice at a department for oral and maxillofacial surgery, a large number of surgical procedures in the head and neck region take place under both outpatient and inpatient conditions. The basis of every surgical intervention is the patient’s consent to the respective procedure. Particular attention is drawn to the general and operation-specific risks.
Particularly in the case of soft tissue procedures in the facial region, bleeding, secondary bleeding, scarring and infection of the surgical area are among the most common complications/risks, depending on the respective procedure. In their new perspective, researchers Filip Barbarewicz, Kai-Olaf Henkel and Florian Dudde from Army Hospital Hamburg in Germany discuss the diagnosis and management of postoperative infections in the head and neck region.
“In order to minimize the wound infections/surgical site infections, aseptic operating conditions with maximum sterility are required.”
Furthermore, depending on the extent of the surgical procedure and the patient‘s previous illnesses, peri- and/or postoperative antibiotics should be considered in order to avoid postoperative surgical site infection. Abscesses, cellulitis, phlegmone and (depending on the location of the procedure) empyema are among the most common postoperative infections in the respective surgical area. The main pathogens of these infections are staphylococci, although mixed (germ) patterns are also possible.
“Risk factors for the development of a postoperative surgical site infection include, in particular, increased age, smoking, multiple comorbidities and/or systemic diseases (e.g., diabetes mellitus type II) as well as congenital and/ or acquired immune deficiency [10, 11].”
Continue reading the paper: DOI:https://doi.org/10.18632/oncoscience.589
Correspondence to: Florian Dudde
Keywords: surgical site infection, head and neck surgery
Oncoscience is a peer-reviewed, open-access, traditional journal covering the rapidly growing field of cancer research, especially emergent topics not currently covered by other journals. This journal has a special mission: Freeing oncology from publication cost. It is free for the readers and the authors.
To learn more about Oncoscience, visit Oncoscience.us and connect with us on social media:
G77 Nations, China, Push Back On U.S. "Loss And Damage" Climate Fund In Days Leading Up To UN Summit
As was the case in primary school with bringing in presents, make sure you bring enough for the rest of the class, otherwise people get ornery...
This age old rule looks like it could be rearing its head in the days leading up to the UN COP 28 climate summit, set to take place in the United Arab Emirates in about six weeks.
At the prior UN COP 27, which took place in Egypt last year, the U.S. pushed an idea for a new World Bank "loss and damage" climate slush fund to help poor countries with climate change. But the G77 nations plus China, including many developing countries, are pushing back on the idea, according to a new report from the Financial Times.
The goal was to arrange how the fund would operate and where the money would come from for the "particularly vulnerable" nations who would have access to it prior to the upcoming summit in UAE.
But as FT notes, Pedro Luis Pedroso Cuesta, the Cuban chair of the G77 plus China group, has said that talks about these details were instead "deadlocked" over issues of - you guessed it - where the money is going and the governance of the fund.
The U.S.'s proposal for the fund to be governed by the World Bank has been rejected by the G77 after "extensive" discussions, the report says. Cuesta has said that the nations seek to have the fund managed elsewhere, but that the U.S. wasn't open to such arrangements.
Cuesta said: “We have been confronted with an elephant in the room, and that elephant is the US. We have been faced with a very closed position that it is [the World Bank] or nothing.”
Christina Chan, a senior adviser to US climate envoy John Kerry, responded: “We have been working diligently at every turn to address concerns, problem-solve, and find landing zones.” She said the U.S. has been "clear and consistent" in their messaging on the need for the fund.
Cuesta contends that the World Bank, known for lending to less affluent nations, lacks a "climate culture" and often delays decision-making, hindering quick responses to climate emergencies like Pakistan's recent severe flooding.
The G77 coalition voiced concerns about the World Bank's legal framework potentially limiting the fund's ability to accept diverse funding sources like philanthropic donations or to access capital markets.
With just days left before the UN COP 28 summit, the World Bank insists that combating climate change is integral to its mission and vows to collaborate on structuring the fund.