Connect with us

Did The Fed Just Set The Stock Market Up For A Crash?

In this 11-05-21 issue of "Did The Fed Just Set The Stock Market Up For A Crash."

Market Pushes Higher As Speculation Increases
The Fed’s Third Mandate Takes Priority
Weaker Economic Growth Coming
Portfolio Positioning
Sector & Market Analysis
401k.

Published

on

In this 11-05-21 issue of “Did The Fed Just Set The Stock Market Up For A Crash.”

  • Market Pushes Higher As Speculation Increases
  • The Fed’s Third Mandate Takes Priority
  • Weaker Economic Growth Coming
  • Portfolio Positioning
  • Sector & Market Analysis
  • 401k Plan Manager

Follow Us On: Twitter, Facebook, Linked-In, Sound Cloud, Seeking Alpha


Is It Time To Get Help With Your Investing Strategy?

Whether it is complete financial, insurance, and estate planning, to a risk-managed portfolio management strategy to grow and protect your savings, whatever your needs are, we are here to help.

Schedule your “FREE” portfolio review today.


Market Back To Extreme Overbought

As noted last week, the more significant concern remains the underlying technical condition of the market. While the rally has been impressive, rising to all-time highs, the market is now back to more extreme overbought levels.

Furthermore, our “money flow buy signal” is near a peak and slightly triggered a “sell signal.” However, with the MACD still positive, the signal suggests a consolidation rather than correction. However, a confirming MACD often aligns with short-term corrections at a minimum. Therefore we will watch that signal closely. Also, this entire rally from the recent lows has been on very weak volume, which suggests a lack of commitment.

S&P 500 Market Technical View

Currently, the bulls control the market as we are in the middle of a “buying stampede.” Historically, buying stampedes last on average between 7 and 12 days. Logically, buying stampedes always get followed by selling stampedes of similar lengths. However, there are times these stampedes can last much longer than expected.

We are currently in one of those longer-term periods. As shown below, the S&P 500 has only been down in 2 of the last 18 days. How unusual is that? In the previous 20-years of the S&P 500, the number of times the market accomplished such a feat was precisely ZERO.

S&P 500 market number of down days since 2000.

Of course, that stampede gets driven by exuberance.

Irrational Exuberance

In our daily market commentary (click the banner below to subscribe for FREE morning delivery), we quoted a piece of analysis from Chartr.com. To wit:

Every week it feels like we get a new headline about financial markets doing something unusual. Just this week we’ve had:

  • A “squid game” crypto token falling 99.99% in a few minutes.
  • Tesla adding hundreds of billions of dollars in value over a deal with Hertz that hasn’t even been signed.
  • US stock markets hitting fresh all-time-highs.

“All of which begs the question: are we in a bubble?”

S&P 500 market valuations.

So where are we now?

The latest CAPE ratio for the S&P 500 Index is 38x. That’s pretty close to the all-time record, which was 44x back in 2000. For those with a short memory, that was just before the dotcom bubble burst and stock markets (particularly tech) crashed hard.”

As we have noted previously, valuations, by themselves, are a terrible timing metric. However, they tell us a great deal about expected future returns and current market psychology.

When it comes to “irrational exuberance,” there are other indicators better at revealing speculation in the markets that have preceded a stock market crash.

The CNN Fear/Greed index is now at extreme greed territory.

S&P 500 market Fear and Greed Index Over Time.
Chart courtesy of TheMarketEar via Zerohedge

Furthermore, the demand for protection against a stock market crash (put options) fell to new lows.

S&P 500 market Put options are at a record low.
Chart courtesy of TheMarketEar via Zerohedge

Historically, such periods of “speculative” activity led to a minimum of short-term stock market corrections, but a crash is not beyond the realm of possibilities.

As noted above, with the market extremely overbought, speculative activity surging, and conviction weak, taking some actions to rebalance and manage risk is warranted.

However, for now, investors have “no fear” as they believe the Fed will continue to remain accommodative.


The Fed’s Third Mandate Takes Priority

My co-portfolio manager, Michael Lebowitz, made an important observation on Thursday.

“Jerome Powell made it clear the Fed is in no hurry to raise interest rates. ‘We don’t think it’s time yet to raise interest rates. There is still ground to cover to reach maximum employment, both in terms of employment and in terms of participation.’ The Fed’s reason is the employment picture is not back to pre-pandemic levels.

In our mind, there is plenty of evidence such as the outsize quits rate, rising wages, and the record number of job openings that scream the labor market is very healthy. Does Mr. Powell disagree with our assessment, or is there more to the Fed’s policy stance?

We believe he answered the question at Wednesday’s press conference. Per Jerome Powell:

The Fed’s policy actions have been guided by our mandate to promote maximum employment and stable prices for the American people along with our responsibilities to promote the stability of the financial system.‘”

The last sentence is the most important.

According to the Federal Reserve’s Congressional authorization, the Fed has only TWO mandates: price stability (inflation) and full employment.

The third mandate is a self-imposed mandate from Ben Bernanke, who was the Fed Chairman in 2010:

“This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose, and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.”

Fed Opts To Keep Markets Elevated

Jerome Powell ignored surging inflationary pressures and a robust job market in favor of supporting asset prices. With valuations surging, speculative activity rising, and investors heavily leveraged, the Fed faces a difficult choice.

There is already a decoupling of markets from consumer confidence. A stock market crash would further devastate confidence pushing the economy into recession. That is the risk the Fed cannot afford.

Consumer confidence composite vs S&P 500 market

However, while the Fed remains focused on keeping markets elevated, inflation poses a significant risk.

Currently, with PPI at the highest spread to CPI in history, it suggests producers can’t pass on costs to customers. Such equates to weaker profit margins and earnings in the future. However, if they elect to pass those costs onto consumers, such will raise living costs well above wages.

ppi vs cpi inflation spread versus gdp and the S&P 500 market

As Michael concluded:

“‘Promoting the stability of the financial system’ seems to be an unofficial mandate. Might the Fed be dragging their feet to reduce crisis-driven policy because they fear a stock market crash? More specifically, can extreme stock valuations be justified without an overly aggressive Fed?

The latest Fed meeting makes it increasingly clear that monetary policy changes are more a function of the asset markets and not the Fed’s congressionally stated mandates.”

Ignoring the inflation risk is likely unwise. Previous spikes in the inflation spread aligned with weaker economic growth, stock market contractions, or crashes.

While the Fed should be tapering monetary policy and hiking rates to prepare for the next recessionary downturn, they will opt to keep asset prices inflating. However, just as in the past, opting to keep monetary policy too loose for too long eventually triggers a more significant crisis.


In Case You Missed It

Article graphic for history of inflation and markets.

Weaker Economic Growth Coming

While the Fed is busy supporting the equity markets, overvaluations, and speculative activity, the bond market has a different message. As discussed this past week, our expectation of weaker economic growth in 2022 is coming to fruition.

“The history of stock market crashes due to the Fed’s monetary intervention schemes is evident. Not just over the last decade, but since the Fed became ‘active’ in 1980.”

Fed rate adjustments and economic GDP growth

More evidence continues to support that view, as noted by the sharp drop in productivity despite jobless claims falling back to pre-pandemic levels. Thus, while the Fed hopes for “full employment,” such remains a function of “math” as the labor force shrinks.

Productivity is driving labor force participation rates lower.

More importantly, “real wages” are not keeping up with the inflationary surge.

Bottom 80% of wage earnings losing out to inflation.

Such will inevitably weigh on consumption which will weaken economic growth.

Lower Bond Yields On The Way

Are there currently risks to the bond market that investors should be concerned about near term? Yes. The current spike in inflation will likely last longer than expected due to the break of supply lines. Furthermore, rates tend to rise when the Fed begins to discuss “tapering” their bond purchases as they are doing now.

However, both of these issues will resolve themselves going forward. Eventually, the supply chain disruption will mend, and inflation will decline as supply comes back online.

More importantly, when the Fed does begin the process of “tapering” their bond purchases, yields historically fall as investors’ “risk-preference” shifts from “risk-on” to “risk-off.”

Fed operations and the effect on bond yields.  S&P 500 market

As if always the case with investing, timing, as they say, is everything.

Such is why, particularly with the Fed set to hike rates in 2022, we are looking for our next opportunity to add duration to our bond portfolios. Moreover, with the equity market grossly overvalued, we suspect that bonds will provide a chunk of our capital gains over the next couple of years.

There is little upside to the equity market given current valuations, slowing earnings growth, a weaker economy, and less liquidity. However, whenever the next recession approaches, yields will once again likely approach zero.

Got bonds?



Portfolio Update

The following is worth repeating:

“While anything is possible in the near term, complacency has returned to the market very quickly. However, there are numerous reasons to remain mindful of the risks.

  • Earnings and profit growth estimates are too high
  • Stagflation is becoming more prevalent (weak economic growth and rising inflation)
  • Inflation indexes are continuing to rise
  • Economic data is surprising to the downside
  • Supply chain issues are more persistent than originally believed.
  • Inventory problems continue unabated
  • Valuations are high by all measures
  • Interest rates are rising

“Furthermore, as noted above, there is limited upside as the annual rate of change in the market declines.”

As I mentioned several times this week on the RealInvestmentShow broadcast, we have started the process of reducing portfolio risk by rebalancing positions that have become grossly extended.

Let me be clear. We took profits; we did not sell the entirety of our position. Therefore, our portfolio allocations are near fully invested. However, our cash position is growing as the market becomes more aggressively extended.

S&P 500 market portfolio allocations.

I make this clarification for two reasons.

  1. Many assume that when I say we are adjusting for risk, that equals selling everyting and going to cash; and,
  2. Risk management is about small moves.

An old axiom is that football is a “game of inches.” The same holds in portfolio management. Trying to throw a “hail mary” on every down will likely wind up costing you the game. Sure, you could potentially get lucky, but eventually, luck runs out.

As Jim Cramer noted last week when discussing taking profits:

“Bulls get fat, pigs get fat, but hogs get slaughtered.”

It’s another old Wall Street axiom that often gets ignored but probably shouldn’t be.

Have a great weekend.

By Lance Roberts, CIO


Market & Sector Analysis

Analysis & Stock Screens Exclusively For RIAPro Members


S&P 500 Tear Sheet

S&P 500 Statistic Tear Sheet

Performance Analysis

S&P 500 Market Sector Relative Performance Tear Sheet

Technical Composite

The technical overbought/sold gauge comprises several price indicators (RSI, Williams %R, etc.), measured using “weekly” closing price data. Readings above “80” are considered overbought, and below “20” are oversold. The current reading is 88.67 out of a possible 100.

S&P 500 Technical Gauge

Portfolio Positioning “Fear / Greed” Gauge

Our “Fear/Greed” gauge is how individual and professional investors are “positioning” themselves in the market based on their equity exposure. From a contrarian position, the higher the allocation to equities, to more likely the market is closer to a correction than not. The gauge uses weekly closing data.

NOTE: The Fear/Greed Index measures risk from 0-100. It is a rarity that it reaches levels above 90. The current reading is 93.6 out of a possible 100.

S&P 500 Market Fear Greed Index

Sector Model Analysis & Risk Ranges

How To Read This Table

  • The table compares each sector and market to the S&P 500 index on relative performance.
  • “MA XVER” is determined by whether the short-term weekly moving average crosses positively or negatively with the long-term weekly moving average.
  • The risk range is a function of the month-end closing price and the “beta” of the sector or market. (Ranges reset on the 1st of each month)
  • Table shows the price deviation above and below the weekly moving averages.
S&P 500 relative Risk/Ranges for markets and sectors.

Weekly Stock Screens

Currently, there are four different stock screens for you to review. The first is S&P 500 based companies with a “Growth” focus, the second is a “Value” screen on the entire universe of stocks, and the last are stocks that are “Technically” strong and breaking above their respective 50-dma.

We have provided the yield of each security and a Piotroski Score ranking to help you find fundamentally strong companies on each screen. (For more on the Piotroski Score – read this report.)

S&P 500 Growth Screen

S&P 500 Market Stock Screen

Low P/B, High-Value Score, High Dividend Screen

S&P 500 Value Dividend Stock Screen

Fundamental Growth Screen

S&P 500  market fundamental growth screen

Aggressive Growth Strategy

S&P 500 market aggressive growth screen

Portfolio / Client Update

It has been a stellar few weeks in the market. The speculative frenzy quickly returned to the market, and the fear of a correction has “gone with the wind.” However, as noted, the market is now back into more extreme overbought levels. Therefore, we have started taking profits in egregiously overbought positions.

As noted last week, there was not much to do in portfolios this week. However, several stocks did exceptionally well (NVDA, F, AMD, CVS, and AMZN), which boosted the whole portfolio. These were also some of the stocks we did reduce slightly to rebalance back to our risk management sizes.

We also are continuing to watch interest rates closely. While the Fed did proceed with their balance sheet taper announcement, they avoided discussing rate hikes. That will change as we move into 2022. Both of these actions will slow economic growth leading to a decline in yields. As a result, we patiently wait for another “buy point” to further increase our bond holdings’ duration.

Again, while it may seem counter-intuitive at the moment, the current bout of inflation will turn into deflation next year as liquidity gets drained from the system. Therefore, we continue to manage the deflationary side of our portfolio closely.

As noted, while there seems to be minimal risk in the market, don’t be misled. There are numerous risks we are watching that could lead us to reverse course rapidly. Our job remains to protect your capital first and foremost, but we want to capture gains when we can.

Portfolio Changes

During the past week, we made minor changes to portfolios. In addition, we post all trades in real-time at RIAPRO.NET.

*** Trading Update – Equity and Sector Models ***

“As noted earlier this week, with the market back to extreme overbought and extended levels, and individual names making outsized moves, we are taking some small profits out of our most egregiously extended positions.

In the equity model, we are reducing CVS Health (CVS) from 3.5% of the portfolio to 3%.” – 11/04/21

Equity Model

  • Reduce CVS from 3.5% to 3.0% of the portfolio.

“The market is now back to extreme overbought and extended levels. As such, we are now taking some small profits out of our most egregiously extended positions.

In the equity model, we are taking some profits in F, NVDA, ALB, and NFLX back to model weights. We are also selling all of SBUX after it violated our stop levels.

In the sector model, we are reducing LIT by 0.5% as it is overbought like ALB. We remain decently overweight in the basic materials sector.” – 11/02/21

Equity Model

  • Reduce to model weight F, NVDA, ALB, and NFLX
  • Sell 100% of SBUX

ETF Model

  • Reduce LIT by 0.5% of the portfolio weight.

As always, our short-term concern remains the protection of your portfolio. Accordingly, we remain focused on the differentials between underlying fundamentals and market over-valuations.

Lance Roberts, CIO


THE REAL 401k PLAN MANAGER

A Conservative Strategy For Long-Term Investors



Attention: The 401k plan manager will no longer appear in the newsletter in the next couple of weeks. However, the link to the website will remain for your convenience. Be sure to bookmark it in your browser.

S&P 500 Market 401k Plan Manager Chart 110521

Commentary

The bull market continued again this week, pushing into more extreme overbought territory. While there is little reason to be concerned about a more significant correction at this juncture, a period of weakness would not be surprising. With the mutual fund distribution season approaching, such could weigh on the markets in the first two weeks of December. However, such would set the market up for the traditional “Santa Claus” rally.

Therefore, if you have taken no action over the last couple of weeks, we suggest rebalancing your holdings and reducing portfolio risk. Most likely, your equity exposure is above target allocations, with bonds under-allocated. In the short term, we suggest maintaining exposures in plan portfolios but continue putting new contributions back into cash or stable value holdings for now.

While we have not removed international, emerging, small and mid-cap funds from the allocation model, we suggest avoiding these areas for now and moving those allocations to domestic large-cap.

If you are close to retirement or are concerned about a pickup in volatility, there is nothing wrong with being underweight equities. However, there is likely not a lot of upside in markets heading into next year.

Model Descriptions

401k Plan Manager Model Descriptions

Choose The Model That FIts Your Goals

401k Plan Manager Portfolio Models

Model Allocations

401k Plan Manager Model Allocations By Asset Class and Weightings

If you need help after reading the alert, do not hesitate to contact me.

Or, let us manage it for you automatically.


401k Model Performance Analysis

Model performance is a two-asset model of stocks and bonds relative to the weighting changes made each week in the newsletter. Such is strictly for informational and educational purposes only, and one should not rely on it for any reason. Past performance is not a guarantee of future results. Use at your own risk and peril.

401k Plan Manager Historical Performance Table.

Have a great week!

The post Did The Fed Just Set The Stock Market Up For A Crash? appeared first on RIA.

Read More

Continue Reading

Government

Is the National Guard a solution to school violence?

School board members in one Massachusetts district have called for the National Guard to address student misbehavior. Does their request have merit? A…

Published

on

By

Every now and then, an elected official will suggest bringing in the National Guard to deal with violence that seems out of control.

A city council member in Washington suggested doing so in 2023 to combat the city’s rising violence. So did a Pennsylvania representative concerned about violence in Philadelphia in 2022.

In February 2024, officials in Massachusetts requested the National Guard be deployed to a more unexpected location – to a high school.

Brockton High School has been struggling with student fights, drug use and disrespect toward staff. One school staffer said she was trampled by a crowd rushing to see a fight. Many teachers call in sick to work each day, leaving the school understaffed.

As a researcher who studies school discipline, I know Brockton’s situation is part of a national trend of principals and teachers who have been struggling to deal with perceived increases in student misbehavior since the pandemic.

A review of how the National Guard has been deployed to schools in the past shows the guard can provide service to schools in cases of exceptional need. Yet, doing so does not always end well.

How have schools used the National Guard before?

In 1957, the National Guard blocked nine Black students’ attempts to desegregate Central High School in Little Rock, Arkansas. While the governor claimed this was for safety, the National Guard effectively delayed desegregation of the school – as did the mobs of white individuals outside. Ironically, weeks later, the National Guard and the U.S. Army would enforce integration and the safety of the “Little Rock Nine” on orders from President Dwight Eisenhower.

Three men from the mob around Little Rock’s Central High School are driven from the area at bayonet-point by soldiers of the 101st Airborne Division on Sept. 25, 1957. The presence of the troops permitted the nine Black students to enter the school with only minor background incidents. Bettmann via Getty Images

One of the most tragic cases of the National Guard in an educational setting came in 1970 at Kent State University. The National Guard was brought to campus to respond to protests over American involvement in the Vietnam War. The guardsmen fatally shot four students.

In 2012, then-Sen. Barbara Boxer, a Democrat from California, proposed funding to use the National Guard to provide school security in the wake of the Sandy Hook school shooting. The bill was not passed.

More recently, the National Guard filled teacher shortages in New Mexico’s K-12 schools during the quarantines and sickness of the pandemic. While the idea did not catch on nationally, teachers and school personnel in New Mexico generally reported positive experiences.

Can the National Guard address school discipline?

The National Guard’s mission includes responding to domestic emergencies. Members of the guard are part-time service members who maintain civilian lives. Some are students themselves in colleges and universities. Does this mission and training position the National Guard to respond to incidents of student misbehavior and school violence?

On the one hand, New Mexico’s pandemic experience shows the National Guard could be a stopgap to staffing shortages in unusual circumstances. Similarly, the guards’ eventual role in ensuring student safety during school desegregation in Arkansas demonstrates their potential to address exceptional cases in schools, such as racially motivated mob violence. And, of course, many schools have had military personnel teaching and mentoring through Junior ROTC programs for years.

Those seeking to bring the National Guard to Brockton High School have made similar arguments. They note that staffing shortages have contributed to behavior problems.

One school board member stated: “I know that the first thought that comes to mind when you hear ‘National Guard’ is uniform and arms, and that’s not the case. They’re people like us. They’re educated. They’re trained, and we just need their assistance right now. … We need more staff to support our staff and help the students learn (and) have a safe environment.”

Yet, there are reasons to question whether calls for the National Guard are the best way to address school misconduct and behavior. First, the National Guard is a temporary measure that does little to address the underlying causes of student misbehavior and school violence.

Research has shown that students benefit from effective teaching, meaningful and sustained relationships with school personnel and positive school environments. Such educative and supportive environments have been linked to safer schools. National Guard members are not trained as educators or counselors and, as a temporary measure, would not remain in the school to establish durable relationships with students.

What is more, a military presence – particularly if uniformed or armed – may make students feel less welcome at school or escalate situations.

Schools have already seen an increase in militarization. For example, school police departments have gone so far as to acquire grenade launchers and mine-resistant armored vehicles.

Research has found that school police make students more likely to be suspended and to be arrested. Similarly, while a National Guard presence may address misbehavior temporarily, their presence could similarly result in students experiencing punitive or exclusionary responses to behavior.

Students deserve a solution other than the guard

School violence and disruptions are serious problems that can harm students. Unfortunately, schools and educators have increasingly viewed student misbehavior as a problem to be dealt with through suspensions and police involvement.

A number of people – from the NAACP to the local mayor and other members of the school board – have criticized Brockton’s request for the National Guard. Governor Maura Healey has said she will not deploy the guard to the school.

However, the case of Brockton High School points to real needs. Educators there, like in other schools nationally, are facing a tough situation and perceive a lack of support and resources.

Many schools need more teachers and staff. Students need access to mentors and counselors. With these resources, schools can better ensure educators are able to do their jobs without military intervention.

F. Chris Curran has received funding from the US Department of Justice, the Bureau of Justice Assistance, and the American Civil Liberties Union for work on school safety and discipline.

Read More

Continue Reading

Government

Chinese migration to US is nothing new – but the reasons for recent surge at Southern border are

A gloomier economic outlook in China and tightening state control have combined with the influence of social media in encouraging migration.

Published

on

By

Chinese migrants wait for a boat after having walked across the Darien Gap from Colombia to Panama. AP Photo/Natacha Pisarenko

The brief closure of the Darien Gap – a perilous 66-mile jungle journey linking South American and Central America – in February 2024 temporarily halted one of the Western Hemisphere’s busiest migration routes. It also highlighted its importance to a small but growing group of people that depend on that pass to make it to the U.S.: Chinese migrants.

While a record 2.5 million migrants were detained at the United States’ southwestern land border in 2023, only about 37,000 were from China.

I’m a scholar of migration and China. What I find most remarkable in these figures is the speed with which the number of Chinese migrants is growing. Nearly 10 times as many Chinese migrants crossed the southern border in 2023 as in 2022. In December 2023 alone, U.S. Border Patrol officials reported encounters with about 6,000 Chinese migrants, in contrast to the 900 they reported a year earlier in December 2022.

The dramatic uptick is the result of a confluence of factors that range from a slowing Chinese economy and tightening political control by President Xi Jinping to the easy access to online information on Chinese social media about how to make the trip.

Middle-class migrants

Journalists reporting from the border have generalized that Chinese migrants come largely from the self-employed middle class. They are not rich enough to use education or work opportunities as a means of entry, but they can afford to fly across the world.

According to a report from Reuters, in many cases those attempting to make the crossing are small-business owners who saw irreparable damage to their primary or sole source of income due to China’s “zero COVID” policies. The migrants are women, men and, in some cases, children accompanying parents from all over China.

Chinese nationals have long made the journey to the United States seeking economic opportunity or political freedom. Based on recent media interviews with migrants coming by way of South America and the U.S.’s southern border, the increase in numbers seems driven by two factors.

First, the most common path for immigration for Chinese nationals is through a student visa or H1-B visa for skilled workers. But travel restrictions during the early months of the pandemic temporarily stalled migration from China. Immigrant visas are out of reach for many Chinese nationals without family or vocation-based preferences, and tourist visas require a personal interview with a U.S. consulate to gauge the likelihood of the traveler returning to China.

Social media tutorials

Second, with the legal routes for immigration difficult to follow, social media accounts have outlined alternatives for Chinese who feel an urgent need to emigrate. Accounts on Douyin, the TikTok clone available in mainland China, document locations open for visa-free travel by Chinese passport holders. On TikTok itself, migrants could find information on where to cross the border, as well as information about transportation and smugglers, commonly known as “snakeheads,” who are experienced with bringing migrants on the journey north.

With virtual private networks, immigrants can also gather information from U.S. apps such as X, YouTube, Facebook and other sites that are otherwise blocked by Chinese censors.

Inspired by social media posts that both offer practical guides and celebrate the journey, thousands of Chinese migrants have been flying to Ecuador, which allows visa-free travel for Chinese citizens, and then making their way over land to the U.S.-Mexican border.

This journey involves trekking through the Darien Gap, which despite its notoriety as a dangerous crossing has become an increasingly common route for migrants from Venezuela, Colombia and all over the world.

In addition to information about crossing the Darien Gap, these social media posts highlight the best places to cross the border. This has led to a large share of Chinese asylum seekers following the same path to Mexico’s Baja California to cross the border near San Diego.

Chinese migration to US is nothing new

The rapid increase in numbers and the ease of accessing information via social media on their smartphones are new innovations. But there is a longer history of Chinese migration to the U.S. over the southern border – and at the hands of smugglers.

From 1882 to 1943, the United States banned all immigration by male Chinese laborers and most Chinese women. A combination of economic competition and racist concerns about Chinese culture and assimilability ensured that the Chinese would be the first ethnic group to enter the United States illegally.

With legal options for arrival eliminated, some Chinese migrants took advantage of the relative ease of movement between the U.S. and Mexico during those years. While some migrants adopted Mexican names and spoke enough Spanish to pass as migrant workers, others used borrowed identities or paperwork from Chinese people with a right of entry, like U.S.-born citizens. Similarly to what we are seeing today, it was middle- and working-class Chinese who more frequently turned to illegal means. Those with money and education were able to circumvent the law by arriving as students or members of the merchant class, both exceptions to the exclusion law.

Though these Chinese exclusion laws officially ended in 1943, restrictions on migration from Asia continued until Congress revised U.S. immigration law in the Hart-Celler Act in 1965. New priorities for immigrant visas that stressed vocational skills as well as family reunification, alongside then Chinese leader Deng Xiaoping’s policies of “reform and opening,” helped many Chinese migrants make their way legally to the U.S. in the 1980s and 1990s.

Even after the restrictive immigration laws ended, Chinese migrants without the education or family connections often needed for U.S. visas continued to take dangerous routes with the help of “snakeheads.”

One notorious incident occurred in 1993, when a ship called the Golden Venture ran aground near New York, resulting in the drowning deaths of 10 Chinese migrants and the arrest and conviction of the snakeheads attempting to smuggle hundreds of Chinese migrants into the United States.

Existing tensions

Though there is plenty of precedent for Chinese migrants arriving without documentation, Chinese asylum seekers have better odds of success than many of the other migrants making the dangerous journey north.

An estimated 55% of Chinese asylum seekers are successful in making their claims, often citing political oppression and lack of religious freedom in China as motivations. By contrast, only 29% of Venezuelans seeking asylum in the U.S. have their claim granted, and the number is even lower for Colombians, at 19%.

The new halt on the migratory highway from the south has affected thousands of new migrants seeking refuge in the U.S. But the mix of push factors from their home country and encouragement on social media means that Chinese migrants will continue to seek routes to America.

And with both migration and the perceived threat from China likely to be features of the upcoming U.S. election, there is a risk that increased Chinese migration could become politicized, leaning further into existing tensions between Washington and Beijing.

Meredith Oyen 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.

Read More

Continue Reading

Government

Vaccine-skeptical mothers say bad health care experiences made them distrust the medical system

Vaccine skepticism, and the broader medical mistrust and far-reaching anxieties it reflects, is not just a fringe position in the 21st century.

Women's own negative medical experiences influence their vaccine decisions for their kids. AP Photo/Ted S. Warren

Why would a mother reject safe, potentially lifesaving vaccines for her child?

Popular writing on vaccine skepticism often denigrates white and middle-class mothers who reject some or all recommended vaccines as hysterical, misinformed, zealous or ignorant. Mainstream media and medical providers increasingly dismiss vaccine refusal as a hallmark of American fringe ideology, far-right radicalization or anti-intellectualism.

But vaccine skepticism, and the broader medical mistrust and far-reaching anxieties it reflects, is not just a fringe position.

Pediatric vaccination rates had already fallen sharply before the COVID-19 pandemic, ushering in the return of measles, mumps and chickenpox to the U.S. in 2019. Four years after the pandemic’s onset, a growing number of Americans doubt the safety, efficacy and necessity of routine vaccines. Childhood vaccination rates have declined substantially across the U.S., which public health officials attribute to a “spillover” effect from pandemic-related vaccine skepticism and blame for the recent measles outbreak. Almost half of American mothers rated the risk of side effects from the MMR vaccine as medium or high in a 2023 survey by Pew Research.

Recommended vaccines go through rigorous testing and evaluation, and the most infamous charges of vaccine-induced injury have been thoroughly debunked. How do so many mothers – primary caregivers and health care decision-makers for their families – become wary of U.S. health care and one of its most proven preventive technologies?

I’m a cultural anthropologist who studies the ways feelings and beliefs circulate in American society. To investigate what’s behind mothers’ vaccine skepticism, I interviewed vaccine-skeptical mothers about their perceptions of existing and novel vaccines. What they told me complicates sweeping and overly simplified portrayals of their misgivings by pointing to the U.S. health care system itself. The medical system’s failures and harms against women gave rise to their pervasive vaccine skepticism and generalized medical mistrust.

The seeds of women’s skepticism

I conducted this ethnographic research in Oregon from 2020 to 2021 with predominantly white mothers between the ages of 25 and 60. My findings reveal new insights about the origins of vaccine skepticism among this demographic. These women traced their distrust of vaccines, and of U.S. health care more generally, to ongoing and repeated instances of medical harm they experienced from childhood through childbirth.

girl sitting on exam table faces a doctor viewer can see from behind
A woman’s own childhood mistreatment by a doctor can shape her health care decisions for the next generation. FatCamera/E+ via Getty Images

As young girls in medical offices, they were touched without consent, yelled at, disbelieved or threatened. One mother, Susan, recalled her pediatrician abruptly lying her down and performing a rectal exam without her consent at the age of 12. Another mother, Luna, shared how a pediatrician once threatened to have her institutionalized when she voiced anxiety at a routine physical.

As women giving birth, they often felt managed, pressured or discounted. One mother, Meryl, told me, “I felt like I was coerced under distress into Pitocin and induction” during labor. Another mother, Hallie, shared, “I really battled with my provider” throughout the childbirth experience.

Together with the convoluted bureaucracy of for-profit health care, experiences of medical harm contributed to “one million little touch points of information,” in one mother’s phrase, that underscored the untrustworthiness and harmful effects of U.S. health care writ large.

A system that doesn’t serve them

Many mothers I interviewed rejected the premise that public health entities such as the Centers for Disease Control and Prevention and the Food and Drug Administration had their children’s best interests at heart. Instead, they tied childhood vaccination and the more recent development of COVID-19 vaccines to a bloated pharmaceutical industry and for-profit health care model. As one mother explained, “The FDA is not looking out for our health. They’re looking out for their wealth.”

After ongoing negative medical encounters, the women I interviewed lost trust not only in providers but the medical system. Frustrating experiences prompted them to “do their own research” in the name of bodily autonomy. Such research often included books, articles and podcasts deeply critical of vaccines, public health care and drug companies.

These materials, which have proliferated since 2020, cast light on past vaccine trials gone awry, broader histories of medical harm and abuse, the rapid growth of the recommended vaccine schedule in the late 20th century and the massive profits reaped from drug development and for-profit health care. They confirmed and hardened women’s suspicions about U.S. health care.

hands point to a handwritten vaccination record
The number of recommended childhood vaccines has increased over time. Mike Adaskaveg/MediaNews Group/Boston Herald via Getty Images

The stories these women told me add nuance to existing academic research into vaccine skepticism. Most studies have considered vaccine skepticism among primarily white and middle-class parents to be an outgrowth of today’s neoliberal parenting and intensive mothering. Researchers have theorized vaccine skepticism among white and well-off mothers to be an outcome of consumer health care and its emphasis on individual choice and risk reduction. Other researchers highlight vaccine skepticism as a collective identity that can provide mothers with a sense of belonging.

Seeing medical care as a threat to health

The perceptions mothers shared are far from isolated or fringe, and they are not unreasonable. Rather, they represent a growing population of Americans who hold the pervasive belief that U.S. health care harms more than it helps.

Data suggests that the number of Americans harmed in the course of treatment remains high, with incidents of medical error in the U.S. outnumbering those in peer countries, despite more money being spent per capita on health care. One 2023 study found that diagnostic error, one kind of medical error, accounted for 371,000 deaths and 424,000 permanent disabilities among Americans every year.

Studies reveal particularly high rates of medical error in the treatment of vulnerable communities, including women, people of color, disabled, poor, LGBTQ+ and gender-nonconforming individuals and the elderly. The number of U.S. women who have died because of pregnancy-related causes has increased substantially in recent years, with maternal death rates doubling between 1999 and 2019.

The prevalence of medical harm points to the relevance of philosopher Ivan Illich’s manifesto against the “disease of medical progress.” In his 1982 book “Medical Nemesis,” he insisted that rather than being incidental, harm flows inevitably from the structure of institutionalized and for-profit health care itself. Illich wrote, “The medical establishment has become a major threat to health,” and has created its own “epidemic” of iatrogenic illness – that is, illness caused by a physician or the health care system itself.

Four decades later, medical mistrust among Americans remains alarmingly high. Only 23% of Americans express high confidence in the medical system. The United States ranks 24th out of 29 peer high-income countries for the level of public trust in medical providers.

For people like the mothers I interviewed, who have experienced real or perceived harm at the hands of medical providers; have felt belittled, dismissed or disbelieved in a doctor’s office; or spent countless hours fighting to pay for, understand or use health benefits, skepticism and distrust are rational responses to lived experience. These attitudes do not emerge solely from ignorance, conspiracy thinking, far-right extremism or hysteria, but rather the historical and ongoing harms endemic to the U.S. health care system itself.

Johanna Richlin 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.

Read More

Continue Reading

Trending