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It is the ECB’s Turn but Little New to be Said or Done

Overview:  The S&P 500 and NASDAQ gapped higher yesterday to record-levels, and the reflation theme lifted Asia Pacific shares for the third session today.  South Korea, Taiwan, and China led the advance.  Europe’s Dow Jones Stoxx 600 gapped higher…

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Overview:  The S&P 500 and NASDAQ gapped higher yesterday to record-levels, and the reflation theme lifted Asia Pacific shares for the third session today.  South Korea, Taiwan, and China led the advance.  Europe's Dow Jones Stoxx 600 gapped higher and is consolidating, seemingly waiting for fresh directional clues from the US, where a small higher opening is anticipated.  The US 10-year yield is steady around 1.08%, while European yields are a little softer.  The US dollar is lower against nearly all the major and emerging market currencies today.  Sterling, the Norwegian krone, and the New Zealand dollar are jostling for the lead with around a 0.6% gain.  The yen and Canadian dollar are laggards.  The JP Morgan Emerging Market Currency Index is posting small gains as its advance stretches into the fourth consecutive session.  Gold extended its bounce off the week's low near $1805 and made it to around $1875 today before steadying.  The $1880 area is the halfway mark of the recent leg lower from near $1960.  Oil prices are softer but at the upper end of their recent ranges.  March WTI stalled in front of $54 a barrel last week and yesterday and has backed off today to around $52.75.  API estimated a small (2.5 mln barrel) increase in US crude inventory, which, if confirmed by the EIA later today, would be the first build of the year.  

Asia Pacific

The Bank of Japan stood pat as widely expected.  It shaved its GDP forecast for the fiscal year, ending in March to -5.6% from -5.5%.  However, it lifted the forecast for FY21 to 3.9% from 3.6%, and the FY22 GFP forecast was raised to 1.8% from 1.6%.  CPI is expected to fall by 0.5% in the current fiscal year compared with a 0.6% decline previously anticipated.  Inflation is expected to rise to 0.5% in FY21 (from 0.4% previously) while FY22 was left at 0.7%.  The takeaway is the pattern, which will likely be seen by other officials, is the near-term pessimism but the medium-term confidence encouraged by the vaccine.  

Separately, Japan reported December trade figures.  For the first time in two years, exports rose on a year-over-year basis, helped by strong Chinese demand.  The trade surplus of JPY751 bln was smaller than expected because exports were a little less than expected and imports were not quite as weak.  The average trade surplus in 2020 was JPY56.2 bln. It was the first surplus recorded on a 12-month rolling basis since October 2018.  Exports rose by 2.0% in the year through December, and imports fell by 11.6%.   Elsewhere on trade, and following on the heels of a strong export order report by Taiwan, South Korea reported its trade figures for the first 20-days of January.  Exports rose 10.6% compared with a 7.9% gain last month.  Imports also edged higher. 

Last month, Australia's grew 50k jobs, spot-on forecasts, though off the 90k growth seen in November.  The unemployment rate slipped to 6.6% from 6.8% despite the tick-up in the participation rate to 66.2%(from 66.1%).  Full-time positions rose by 35.7k, down from 84.2k., while part-time positions rose by 14.3k after a 5.8k gain in November.  The Reserve Bank of Australia meets on February 1.  No change in the stance is expected.  

The dollar had appeared to forge a shelf around JPY103.50 but slipped through it yesterday, and the losses were extended today to a little through JPY103.35.  There is an option for $940 mln at JPY103.25 that expires today, which is also roughly the (61.8%) retracement of the bounce off the January 6 low (~JPY102.60).  The Australian dollar is higher for the third consecutive session. The high since April 2018 was set on January 6 near $0.7820.  The Aussie is knocking on the $0.7780 area in the European morning.  Support is seen near $0.7740.  The PBOC set the dollar's reference rate at CNY6.4696.  The Bloomberg survey of bank models put it at CNY6.4674.  The dollar is heavy for the third-straight session but remains within the consolidative range seen recently (~CNY6.45-CNY6.50).  The PBOC left the Loan Prime Rates unchanged for the ninth month.  

Europe

It is about central banks today.  Norway's central bank meeting outcome is already known.  It left policy on hold as widely expected, but it is still on track to raise rates in H1 2022.  Rather than pursue the unorthodox monetary policy, which has frankly become more standard, it tapped one of the largest sovereign wealth funds in the world.  That said, its policy rate (zero), when adjusted for inflation (~1.4%), is among the most negative among high-income countries.  

South Africa's Reserve Bank is expected to have left rates steady at 3.5%.  Note that December CPI was 3.1% year-over-year, and the core rate was at 3.3%.  Turkey's central bank also left its one-week deposit rate unchanged at 17.00%.  Despite Prime Minister Erdogan's pressure, the shift to a more orthodox monetary stance has helped stabilize the exchange rate.  The lira has risen by about 0.5% so far in 2021, making it among the better performing emerging market currencies. The dollar spiked higher on the announcement, but the greenback met sellers near TRY7.42 and quickly drove it to new session lows (below TRY7.38)

The ECB takes center stage.  However, there is not much to be seen or done here now.  No fresh policy initiatives are likely.  With the lockdowns and social restrictions being extended, the toll on the households and businesses is significant.  Lagarde is likely to play up the near-term downside risks, but she may also underscore the medium-term better outlook.  Uncertainty over the US election and Brexit has been resolved.  The EU's budget and Recovery Fund are being approved and can be operational shortly.  The ECB's Pandemic Emergency Purchase Program has been consistently buying between 57 and 68 bln euros a month of securities.  We see no compelling reason to expect this to change any time soon.  

The euro is trading within yesterday's range (~$1.2075-$1.2160), which is more or less the range since Monday.  We have been anticipating the pullback after the $1.2350 level was approached on January 6.  What level does the euro need to rise above to indicate the underlying uptrend has resumed?  A move a $1.22 would be a warning, but it probably needs to rise above the $1.2240 area to boost chances that the corrective low is in place.  For its part, sterling is at new highs since April 2018, having approached $1.3750 in the European morning. The thrust higher appears to have exhausted the bulls.  Initial support is seen in the $1.3680-$1.3700 area.  The euro is at its lowest level against sterling (~GBP0.8830) since last May.  

America

The Bank of Canada left its target rate at 25 bp yesterday.  Some, including ourselves, thought there was a chance of a small cut following comments from the Governor. When it was not delivered, the Canadian dollar extended its gains and reached its best level since April 2018.  The BoC was seemed more confident of the medium-term and hinted that as its confidence grew in the recovery, it would adjust its bond-buying, which was left at C$4 bln a week.  This could happen in Q3.  Separately, Brazil's central bank left the Selic Rate at 2%, as widely anticipated.  However, it dropped its pledge to keep rates lows for the foreseeable future, which is seen as a signal that it could lift rates later this year.  

Three new data points will be provided by the US today.  December housing starts are expected to have remained firm.  Residential investment and housing remain strong sectors of the US economy.  Ther Philadelphia Fed survey offers an early look into this month's activity.  A small gain is expected (~11.8) after the December series was revised to 9.1 from 11.1.  Recall that the Empire State manufacturing survey for January disappointed by slipping to 3.5 from 4.9.  A gain had been forecast.  Lastly, the US report weekly jobless claims, and the week covers the period in which the national jobs survey is conducted.  Recall that last week's report, for the week through January 8, saw an unexpectedly large increase of 181k to 965k, the highest since August.  A modest decline is expected (Bloomberg's survey median forecast is for 935k).  Canada has a light calendar today and reports November retail sales tomorrow.  Mexico reports December unemployment figures today.  A small decline to 4.28% is expected after November's 4.40% rate. 

The US dollar has been unable to distance itself from the CAD1.26 level approached yesterday.  There is a $555 mln option struck there that expires today, and a battle could be waged over that area today.  A break signals a test on the CAD1.2550 area, where another option for about $610 mln is struck and also expires today.  The next important chart area is closer to CAD1.25.  The Mexican peso is also edging higher, leaving the greenback at its lowest level (~MXN19.55) since last March when it saw almost MXN19.15.  Initial resistance is seen near MXN19.60.



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International

Illegal Immigrants Leave US Hospitals With Billions In Unpaid Bills

Illegal Immigrants Leave US Hospitals With Billions In Unpaid Bills

By Autumn Spredemann of The Epoch Times

Tens of thousands of illegal…

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Illegal Immigrants Leave US Hospitals With Billions In Unpaid Bills

By Autumn Spredemann of The Epoch Times

Tens of thousands of illegal immigrants are flooding into U.S. hospitals for treatment and leaving billions in uncompensated health care costs in their wake.

The House Committee on Homeland Security recently released a report illustrating that from the estimated $451 billion in annual costs stemming from the U.S. border crisis, a significant portion is going to health care for illegal immigrants.

With the majority of the illegal immigrant population lacking any kind of medical insurance, hospitals and government welfare programs such as Medicaid are feeling the weight of these unanticipated costs.

Apprehensions of illegal immigrants at the U.S. border have jumped 48 percent since the record in fiscal year 2021 and nearly tripled since fiscal year 2019, according to Customs and Border Protection data.

Last year broke a new record high for illegal border crossings, surpassing more than 3.2 million apprehensions.

And with that sea of humanity comes the need for health care and, in most cases, the inability to pay for it.

In January, CEO of Denver Health Donna Lynne told reporters that 8,000 illegal immigrants made roughly 20,000 visits to the city’s health system in 2023.

The total bill for uncompensated care costs last year to the system totaled $140 million, said Dane Roper, public information officer for Denver Health. More than $10 million of it was attributed to “care for new immigrants,” he told The Epoch Times.

Though the amount of debt assigned to illegal immigrants is a fraction of the total, uncompensated care costs in the Denver Health system have risen dramatically over the past few years.

The total uncompensated costs in 2020 came to $60 million, Mr. Roper said. In 2022, the number doubled, hitting $120 million.

He also said their city hospitals are treating issues such as “respiratory illnesses, GI [gastro-intenstinal] illnesses, dental disease, and some common chronic illnesses such as asthma and diabetes.”

“The perspective we’ve been trying to emphasize all along is that providing healthcare services for an influx of new immigrants who are unable to pay for their care is adding additional strain to an already significant uncompensated care burden,” Mr. Roper said.

He added this is why a local, state, and federal response to the needs of the new illegal immigrant population is “so important.”

Colorado is far from the only state struggling with a trail of unpaid hospital bills.

EMS medics with the Houston Fire Department transport a Mexican woman the hospital in Houston on Aug. 12, 2020. (John Moore/Getty Images)

Dr. Robert Trenschel, CEO of the Yuma Regional Medical Center situated on the Arizona–Mexico border, said on average, illegal immigrants cost up to three times more in human resources to resolve their cases and provide a safe discharge.

“Some [illegal] migrants come with minor ailments, but many of them come in with significant disease,” Dr. Trenschel said during a congressional hearing last year.

“We’ve had migrant patients on dialysis, cardiac catheterization, and in need of heart surgery. Many are very sick.”

He said many illegal immigrants who enter the country and need medical assistance end up staying in the ICU ward for 60 days or more.

A large portion of the patients are pregnant women who’ve had little to no prenatal treatment. This has resulted in an increase in babies being born that require neonatal care for 30 days or longer.

Dr. Trenschel told The Epoch Times last year that illegal immigrants were overrunning healthcare services in his town, leaving the hospital with $26 million in unpaid medical bills in just 12 months.

ER Duty to Care

The Emergency Medical Treatment and Labor Act of 1986 requires that public hospitals participating in Medicare “must medically screen all persons seeking emergency care … regardless of payment method or insurance status.”

The numbers are difficult to gauge as the policy position of the Centers for Medicare & Medicaid Services (CMS) is that it “will not require hospital staff to ask patients directly about their citizenship or immigration status.”

In southern California, again close to the border with Mexico, some hospitals are struggling with an influx of illegal immigrants.

American patients are enduring longer wait times for doctor appointments due to a nursing shortage in the state, two health care professionals told The Epoch Times in January.

A health care worker at a hospital in Southern California, who asked not to be named for fear of losing her job, told The Epoch Times that “the entire health care system is just being bombarded” by a steady stream of illegal immigrants.

“Our healthcare system is so overwhelmed, and then add on top of that tuberculosis, COVID-19, and other diseases from all over the world,” she said.

A Salvadorian man is aided by medical workers after cutting his leg while trying to jump on a truck in Matias Romero, Mexico, on Nov. 2, 2018. (Spencer Platt/Getty Images)

A newly-enacted law in California provides free healthcare for all illegal immigrants residing in the state. The law could cost taxpayers between $3 billion and $6 billion per year, according to recent estimates by state and federal lawmakers.

In New York, where the illegal immigration crisis has manifested most notably beyond the southern border, city and state officials have long been accommodating of illegal immigrants’ healthcare costs.

Since June 2014, when then-mayor Bill de Blasio set up The Task Force on Immigrant Health Care Access, New York City has worked to expand avenues for illegal immigrants to get free health care.

“New York City has a moral duty to ensure that all its residents have meaningful access to needed health care, regardless of their immigration status or ability to pay,” Mr. de Blasio stated in a 2015 report.

The report notes that in 2013, nearly 64 percent of illegal immigrants were uninsured. Since then, tens of thousands of illegal immigrants have settled in the city.

“The uninsured rate for undocumented immigrants is more than three times that of other noncitizens in New York City (20 percent) and more than six times greater than the uninsured rate for the rest of the city (10 percent),” the report states.

The report states that because healthcare providers don’t ask patients about documentation status, the task force lacks “data specific to undocumented patients.”

Some health care providers say a big part of the issue is that without a clear path to insurance or payment for non-emergency services, illegal immigrants are going to the hospital due to a lack of options.

“It’s insane, and it has been for years at this point,” Dana, a Texas emergency room nurse who asked to have her full name omitted, told The Epoch Times.

Working for a major hospital system in the greater Houston area, Dana has seen “a zillion” migrants pass through under her watch with “no end in sight.” She said many who are illegal immigrants arrive with treatable illnesses that require simple antibiotics. “Not a lot of GPs [general practitioners] will see you if you can’t pay and don’t have insurance.”

She said the “undocumented crowd” tends to arrive with a lot of the same conditions. Many find their way to Houston not long after crossing the southern border. Some of the common health issues Dana encounters include dehydration, unhealed fractures, respiratory illnesses, stomach ailments, and pregnancy-related concerns.

“This isn’t a new problem, it’s just worse now,” Dana said.

Emergency room nurses and EMTs tend to patients in hallways at the Houston Methodist The Woodlands Hospital in Houston on Aug. 18, 2021. (Brandon Bell/Getty Images)

Medicaid Factor

One of the main government healthcare resources illegal immigrants use is Medicaid.

All those who don’t qualify for regular Medicaid are eligible for Emergency Medicaid, regardless of immigration status. By doing this, the program helps pay for the cost of uncompensated care bills at qualifying hospitals.

However, some loopholes allow access to the regular Medicaid benefits. “Qualified noncitizens” who haven’t been granted legal status within five years still qualify if they’re listed as a refugee, an asylum seeker, or a Cuban or Haitian national.

Yet the lion’s share of Medicaid usage by illegal immigrants still comes through state-level benefits and emergency medical treatment.

A Congressional report highlighted data from the CMS, which showed total Medicaid costs for “emergency services for undocumented aliens” in fiscal year 2021 surpassed $7 billion, and totaled more than $5 billion in fiscal 2022.

Both years represent a significant spike from the $3 billion in fiscal 2020.

An employee working with Medicaid who asked to be referred to only as Jennifer out of concern for her job, told The Epoch Times that at a state level, it’s easy for an illegal immigrant to access the program benefits.

Jennifer said that when exceptions are sent from states to CMS for approval, “denial is actually super rare. It’s usually always approved.”

She also said it comes as no surprise that many of the states with the highest amount of Medicaid spending are sanctuary states, which tend to have policies and laws that shield illegal immigrants from federal immigration authorities.

Moreover, Jennifer said there are ways for states to get around CMS guidelines. “It’s not easy, but it can and has been done.”

The first generation of illegal immigrants who arrive to the United States tend to be healthy enough to pass any pre-screenings, but Jennifer has observed that the subsequent generations tend to be sicker and require more access to care. If a family is illegally present, they tend to use Emergency Medicaid or nothing at all.

The Epoch Times asked Medicaid Services to provide the most recent data for the total uncompensated care that hospitals have reported. The agency didn’t respond.

Continue reading over at The Epoch Times

Tyler Durden Fri, 03/15/2024 - 09:45

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International

Fuel poverty in England is probably 2.5 times higher than government statistics show

The top 40% most energy efficient homes aren’t counted as being in fuel poverty, no matter what their bills or income are.

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Julian Hochgesang|Unsplash

The cap set on how much UK energy suppliers can charge for domestic gas and electricity is set to fall by 15% from April 1 2024. Despite this, prices remain shockingly high. The average household energy bill in 2023 was £2,592 a year, dwarfing the pre-pandemic average of £1,308 in 2019.

The term “fuel poverty” refers to a household’s ability to afford the energy required to maintain adequate warmth and the use of other essential appliances. Quite how it is measured varies from country to country. In England, the government uses what is known as the low income low energy efficiency (Lilee) indicator.

Since energy costs started rising sharply in 2021, UK households’ spending powers have plummeted. It would be reasonable to assume that these increasingly hostile economic conditions have caused fuel poverty rates to rise.

However, according to the Lilee fuel poverty metric, in England there have only been modest changes in fuel poverty incidence year on year. In fact, government statistics show a slight decrease in the nationwide rate, from 13.2% in 2020 to 13.0% in 2023.

Our recent study suggests that these figures are incorrect. We estimate the rate of fuel poverty in England to be around 2.5 times higher than what the government’s statistics show, because the criteria underpinning the Lilee estimation process leaves out a large number of financially vulnerable households which, in reality, are unable to afford and maintain adequate warmth.

Blocks of flats in London.
Household fuel poverty in England is calculated on the basis of the energy efficiency of the home. Igor Sporynin|Unsplash

Energy security

In 2022, we undertook an in-depth analysis of Lilee fuel poverty in Greater London. First, we combined fuel poverty, housing and employment data to provide an estimate of vulnerable homes which are omitted from Lilee statistics.

We also surveyed 2,886 residents of Greater London about their experiences of fuel poverty during the winter of 2022. We wanted to gauge energy security, which refers to a type of self-reported fuel poverty. Both parts of the study aimed to demonstrate the potential flaws of the Lilee definition.

Introduced in 2019, the Lilee metric considers a household to be “fuel poor” if it meets two criteria. First, after accounting for energy expenses, its income must fall below the poverty line (which is 60% of median income).

Second, the property must have an energy performance certificate (EPC) rating of D–G (the lowest four ratings). The government’s apparent logic for the Lilee metric is to quicken the net-zero transition of the housing sector.

In Sustainable Warmth, the policy paper that defined the Lilee approach, the government says that EPC A–C-rated homes “will not significantly benefit from energy-efficiency measures”. Hence, the focus on fuel poverty in D–G-rated properties.

Generally speaking, EPC A–C-rated homes (those with the highest three ratings) are considered energy efficient, while D–G-rated homes are deemed inefficient. The problem with how Lilee fuel poverty is measured is that the process assumes that EPC A–C-rated homes are too “energy efficient” to be considered fuel poor: the main focus of the fuel poverty assessment is a characteristic of the property, not the occupant’s financial situation.

In other words, by this metric, anyone living in an energy-efficient home cannot be considered to be in fuel poverty, no matter their financial situation. There is an obvious flaw here.

Around 40% of homes in England have an EPC rating of A–C. According to the Lilee definition, none of these homes can or ever will be classed as fuel poor. Even though energy prices are going through the roof, a single-parent household with dependent children whose only income is universal credit (or some other form of benefits) will still not be considered to be living in fuel poverty if their home is rated A-C.

The lack of protection afforded to these households against an extremely volatile energy market is highly concerning.

In our study, we estimate that 4.4% of London’s homes are rated A-C and also financially vulnerable. That is around 171,091 households, which are currently omitted by the Lilee metric but remain highly likely to be unable to afford adequate energy.

In most other European nations, what is known as the 10% indicator is used to gauge fuel poverty. This metric, which was also used in England from the 1990s until the mid 2010s, considers a home to be fuel poor if more than 10% of income is spent on energy. Here, the main focus of the fuel poverty assessment is the occupant’s financial situation, not the property.

Were such alternative fuel poverty metrics to be employed, a significant portion of those 171,091 households in London would almost certainly qualify as fuel poor.

This is confirmed by the findings of our survey. Our data shows that 28.2% of the 2,886 people who responded were “energy insecure”. This includes being unable to afford energy, making involuntary spending trade-offs between food and energy, and falling behind on energy payments.

Worryingly, we found that the rate of energy insecurity in the survey sample is around 2.5 times higher than the official rate of fuel poverty in London (11.5%), as assessed according to the Lilee metric.

It is likely that this figure can be extrapolated for the rest of England. If anything, energy insecurity may be even higher in other regions, given that Londoners tend to have higher-than-average household income.

The UK government is wrongly omitting hundreds of thousands of English households from fuel poverty statistics. Without a more accurate measure, vulnerable households will continue to be overlooked and not get the assistance they desperately need to stay warm.

Torran Semple receives funding from Engineering and Physical Sciences Research Council (EPSRC) grant EP/S023305/1.

John Harvey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Looking Back At COVID’s Authoritarian Regimes

After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked,…

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After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked, in March 2020, when President Trump and most US governors imposed heavy restrictions on people’s freedom. The purpose, said Trump and his COVID-19 advisers, was to “flatten the curve”: shut down people’s mobility for two weeks so that hospitals could catch up with the expected demand from COVID patients. In her book Silent Invasion, Dr. Deborah Birx, the coordinator of the White House Coronavirus Task Force, admitted that she was scrambling during those two weeks to come up with a reason to extend the lockdowns for much longer. As she put it, “I didn’t have the numbers in front of me yet to make the case for extending it longer, but I had two weeks to get them.” In short, she chose the goal and then tried to find the data to justify the goal. This, by the way, was from someone who, along with her task force colleague Dr. Anthony Fauci, kept talking about the importance of the scientific method. By the end of April 2020, the term “flatten the curve” had all but disappeared from public discussion.

Now that we are four years past that awful time, it makes sense to look back and see whether those heavy restrictions on the lives of people of all ages made sense. I’ll save you the suspense. They didn’t. The damage to the economy was huge. Remember that “the economy” is not a term used to describe a big machine; it’s a shorthand for the trillions of interactions among hundreds of millions of people. The lockdowns and the subsequent federal spending ballooned the budget deficit and consequent federal debt. The effect on children’s learning, not just in school but outside of school, was huge. These effects will be with us for a long time. It’s not as if there wasn’t another way to go. The people who came up with the idea of lockdowns did so on the basis of abstract models that had not been tested. They ignored a model of human behavior, which I’ll call Hayekian, that is tested every day.

These are the opening two paragraphs of my latest Defining Ideas article, “Looking Back at COVID’s Authoritarian Regimes,” Defining Ideas, March 14, 2024.

Another excerpt:

That wasn’t the only uncertainty. My daughter Karen lived in San Francisco and made her living teaching Pilates. San Francisco mayor London Breed shut down all the gyms, and so there went my daughter’s business. (The good news was that she quickly got online and shifted many of her clients to virtual Pilates. But that’s another story.) We tried to see her every six weeks or so, whether that meant our driving up to San Fran or her driving down to Monterey. But were we allowed to drive to see her? In that first month and a half, we simply didn’t know.

Read the whole thing, which is longer than usual.

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