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July Payrolls Preview: What’s Better For Markets 400K Or A Negative Print?

July Payrolls Preview: What’s Better For Markets 400K Or A Negative Print?

Heading into tomorrow’s main event – the nonfarm payrolls print…



July Payrolls Preview: What's Better For Markets 400K Or A Negative Print?

Heading into tomorrow's main event - the nonfarm payrolls print (which is the appetizer for CPI next Wednesday), JPMorgan's trading desk asked a rhetorical question: what's better for markets: 50K or 400K jobs for NFP?

It answered as follows: "50K NFP gets the Fed closer to “Mission Accomplished” as they are nearly there with housing markets (lower prices pending). I think a 400k print would have bond yields reprice higher, potentially taking the 10Y yield above 3% which has acted as a resistance point for Equities, recently."

In other words, good news is bad, and bad news is great news, precisely as we said would be the norm moments after last week's Powell presser in which he said that forward guidance is now dead and instead the Fed is data dependent.

Goldman agrees, and flow trader John Flood writes in his EOD wrap that "we are firmly in a BAD is GOOD and vice versa tape right now." He adds that whereas Goldman estimates a +225k headline print (vs +372 prior and +250k consensus). In this context:

  • The market "will get hit hard (-200bps) on a print north of 372k (>prior reading) as sooner than expected “fed pivot” convos will quickly be shelved."
  • On the other hand, "a relatively inline print (150k – 300k) mkt wont react to as traders will sit on hands and wait for CPI."
  • Finally, "if jobs are lost and we get a negative print, tape will rally 100+bps as FOMO/COVER chase will (remain) on w/ early 2023 rate cut discussions gaining more momentum."

Taking a step back, let's take a look at what Wall Street expects tomorrow courtesy of Newsquawk:

  • In July, the US economy is expected to add 250k nonfarm payrolls in July, with the pace of payroll additions cooling again amid tight labor market conditions. However, as we first observed one month ago, the slowdown in the Establishment survey has already been apparent in the Household Survey where there has been no jobs growth since March.
  • The unemployment rate is expected to be unchanged at 3.6%.
  • Average hourly earnings are expected to rise 0.3% from June and 4.9% from a year ago, down from the 5.1% increase a month earlier.

  • The July jobs report will also give us a glimpse of how the key initial data prints from Q3 are shaping up, and whether there was anything more to the ‘technical’ weakness seen in Q2. If the headline were to significantly top the consensus estimate, it would add fuel to the argument that the labor market remains strong, and provide the Fed with scope to lift rates by a larger increment if it deemed necessary.
  • Conversely, a downside surprise would add to arguments highlighting slowing growth momentum in the US, and embolden those who have suggested that the central bank will need to lower rates next year to support an economy that is falling into a recession.

Wage inflation:

  • Average hourly earnings are expected to rise by 0.3% M/M in July, matching the rate of the prior month, while the annual measure is seen easing by 0.2ppts to 4.9% Y/Y.
  • Analysts have recently noted that various measures of wage growth are sending conflicting signals: the component within the jobs report has been easing in the first half of the year, but the Atlanta Fed’s Wage Growth Tracker has been rising, for instance.
  • In terms of the Fed’s own focus, at his post-meeting press conference in July, Chair Powell flagged the Employment Cost Index series as a key metric that officials would consider when setting policy. And within the Q2 ECI report, the wages and salaries component, which analysts use as a gauge of labor market tightness, rose by 1.6% on a three-month seasonally adjusted basis, picking-up from the previous 1.3%; at an annualized rate, this equates to around 6.5% Y/Y, according to Pantheon Macroeconomics.
    • “Wage gains at this pace are far too high for the Fed, because they would require implausible rapid productivity growth in order to be consistent with the inflation target in the medium-term,” it said, “a lot more data will be released before the September Fed meeting, but this is not a great start for investors looking for the Fed to slow the pace of tightening.”
  • Going forward, Goldman Sachs (which projects nonfarm payrolls rose by 225k in July, 25k below consensus and a slowdown from the +372k pace in June) expects wage growth to begin slowing, and offers three reasons to support this argument:
    • the firmness in wage growth last year and early 2022 was likely a reflection of one-off factors related to the pandemic that are no longer relevant,
    • the breadth of wage gains has fallen in recent months,
    • forward-looking wage growth expectations have started to moderate.

Policy Significance:

  • Fed officials have been looking through recent growth data that showed the US economy contract for two consecutive quarters, which some define as a ‘technical’ recession. Policymakers have argued that US economic performance is not consistent with recessionary conditions, with their case heavily premised on job gains being robust in recent months, and the unemployment rate remaining low.
  • July’s data will perhaps carry more weight than in recent months since it could be more influential in determining the outcome of the September FOMC meeting. The Fed has indicated that it is now setting policy on a meeting-by-meeting basis, where incoming data will be the basis of its policy decisions; that said, the central bank has also suggested that inflation remains its primary policy focus, and it is prepared to take monetary policy into restrictive territory to cap the upside surge in prices, and accordingly, the central bank is still expected to aggressively tighten rates, with many officials noting that there is much work to be done to bring inflation back down.
  • Currently, money market pricing for the September FOMC meeting is split between a rate hike of 50bps or 75bps from the current 2.25-2.50% neutral level; beyond September, markets are betting that rates will rise to 3.25-3.50% by year-end, before easing to 2.75-3.00% over the course of 2023.

Market reaction:

  • Traders will use the data to shape expectations of how the Fed will set policy at its September meeting: the central bank is in a data-dependent, meeting-by-meeting mode, as it focuses on bringing inflation back to target.
  • Accordingly, any upside surprise for the headline and wages will give the central bank scope to move rates higher by a larger increment in September, whereas any downside surprise to the headline may indicate that the slowing growth momentum has crept into Q3, and any downside surprise in the wages component may allow the central bank to revert to a smaller increment of rate hikes.

Arguing for a weaker-than-expected report:

  • Seasonal factors. The July seasonal factors have evolved unfavorably in recent years, with a month-over-month hurdle for private payrolls of +240k in July 2021 and +209k in July 2020 compared to negative hurdles throughout the 2010s (including -54k in July 2015, which was also a 5-week July payroll months; see Exhibit 1). There is a possibility that the July seasonal factors are overfitting to the reopening-related job surges in the summer of 2020 and 2021. This higher seasonal hurdle represents a headwind of roughly 250k, in our view, other things equal. Goldman also believes a difficult seasonal factor weighed on the June report (by roughly 200k).

  • Big Data. High-frequency data on the labor market generally were mixed in July, with a solid rise in the Homebase data but outright declines in the Google and Census Pulse measures. However, Big Data measures generally understated BLS payroll growth in Q2 (which may suggest that BLS payroll data is overstated).

  • Jobless claims. Initial jobless claims increased from very low levels during the July payroll month, averaging 243k per week vs. 225k in June. Continuing claims in regular state programs increased 44k from survey week to survey week. Employer surveys. The employment components of business surveys generally decreased in July. Our services survey employment tracker decreased by 0.4pt to 54.0 and our manufacturing survey employment tracker decreased by 0.6pt to 55.2.

Arguing for a stronger-than-expected report:

  • Education seasonality. We assume +75k for the education sector in tomorrow’s report (mom sa, public and private). Education payrolls remain 200k below pre-crisis (public and private), and we expect fewer-than-normal janitors and support staff leaving for the summer.
  • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas decreased 15.0% month-over-month in July, after increasing 79.0% in June (SA by GS). Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—declined by 2.1pt to +37.8 but remained high. JOLTS job openings decreased by 605k in June to 10.7mn but remain very elevated.

Neutral/mixed factors:

  • Labor supply constraints. When the labor market is tight, job growth tends to slow but remain strong in July, as shown in Exhibit 3. This may reflect the arrival of the summer youth labor force and an associated easing in hiring difficulty.

  • ADP. The ADP report was not published this month as the company revamps their model. ADP is targeting August 31 for their next update.
Tyler Durden Thu, 08/04/2022 - 22:40

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‘The Scandal Would Be Enormous’: Pfizer Director Worried About Vax-Induced Menstrual Irregularities

‘The Scandal Would Be Enormous’: Pfizer Director Worried About Vax-Induced Menstrual Irregularities

Project Veritas on Thursday released a…



'The Scandal Would Be Enormous': Pfizer Director Worried About Vax-Induced Menstrual Irregularities

Project Veritas on Thursday released a new segment of undercover footage of Pfizer director Jordon Walker in which the Director of R&D within the company's mRNA operation expressed concern over how the COVID-19 vaccine may be affecting women's reproductive health.

"There is something irregular about the menstrual cycles. So, people will have to investigate that down the line," Walker told an undercover journalist he thought he was on a date with.

"The [COVID] vaccine shouldn’t be interfering with that [menstrual cycles]. So, we don’t really know," he added.

Walker also hopes we don't discover that "somehow this mRNA lingers in the body and like -- because it has to be affecting something hormonal to impact menstrual cycles," adding "I hope we don’t discover something really bad down the line…If something were to happen downstream and it was, like, really bad? I mean, the scale of that scandal would be enormous."



Tyler Durden Thu, 02/02/2023 - 19:30

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Growing Number Of Doctors Say They Won’t Get COVID-19 Booster Shots

Growing Number Of Doctors Say They Won’t Get COVID-19 Booster Shots

Authored by Zachary Stieber via The Epoch Times (emphasis ours),




Growing Number Of Doctors Say They Won’t Get COVID-19 Booster Shots

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

A growing number of doctors say that they will not get COVID-19 vaccine boosters, citing a lack of clinical trial evidence.

I have taken my last COVID vaccine without RCT level evidence it will reduce my risk of severe disease,” Dr. Todd Lee, an infectious disease expert at McGill University, wrote on Twitter.

A vial of the Pfizer-BioNTech COVID-19 vaccine is seen in a file photograph. (Justin Sullivan/Getty Images)

Lee was pointing to the lack of randomized clinical trial (RCT) results for the updated boosters, which were cleared in the United States and Canada in the fall of 2022 primarily based on data from experiments with mice.

Lee, who has received three vaccine doses, noted that he was infected with the Omicron virus variant—the vaccines provide little protection against infection—and described himself as a healthy male in his 40s.

Dr. Vinay Prasad, a professor of epidemiology and biostatics at the University of California, San Francisco, also said he wouldn’t take any additional shots until clinical trial data become available.

“I took at least 1 dose against my will. It was unethical and scientifically bankrupt,” he said.

Allison Krug, an epidemiologist who co-authored a study that found teenage boys were more likely to suffer heart inflammation after COVID-19 vaccination than COVID-19 infection, recounted explaining to her doctor why she was refusing a booster and said her doctor agreed with her position.

She called on people to “join the movement to demand appropriate evidence,” pointing to a blog post from Prasad.

“Pay close attention to note this isn’t anti-vaccine sentiment. This is ‘provide [hard] evidence of benefit to justify ongoing use’ which is very different. It is only fair for a 30 billion dollar a year product given to hundreds of millions,” Lee said.

Dr. Mark Silverberg, who founded the Toronto Immune and Digestive Health Institute; Kevin Bass, a medical student; and Dr. Tracy Høeg, an epidemiologist at the University of California, San Francisco, joined Lee and Prasad in stating their opposition to more boosters, at least for now.

Høeg said she did not need clinical trials to know she’s not getting any boosters after receiving a two-dose primary series, adding that she took the second dose “against my will.”

I also had an adverse reaction to dose 1 moderna and, if I could do it again, I would not have had any covid vaccines,” she said on Twitter. “I was glad my parents in their 70s could get covid vaccinated but have yet to see non-confounded data to advise them about the bivalent booster. I would have liked to see an RCT for the bivalent for people their age and for adults with health conditions that put them at risk.”

The U.S. Food and Drug Administration (FDA) granted emergency use authorization to updated boosters, or bivalent shots, from Pfizer and Moderna in August 2022 despite there being no human data.

Observational data suggests the boosters provide little protection against infection and solid shielding against severe illness, at least initially.

Five months after the authorization was granted, no clinical trial data has been made available for the bivalents, which target the Wuhan strain as well as the BA.4 and BA.5 subvariants of Omicron. Moderna presented efficacy estimates for a different bivalent, which has never been used in the United States, during a recent meeting. The company estimated the booster increased protection against infection by just 10 percent.

The FDA is preparing to order all Pfizer and Moderna COVID-19 vaccines be replaced with the bivalents. The U.S. Centers for Disease Control and Prevention, which issues recommendations on vaccines, continues advising virtually all Americans to get a primary series and multiple boosters.

Professor Calls for Halt to Messenger RNA Vaccines

A professor, meanwhile, became the latest to call for a halt to the Pfizer and Moderna vaccines, which are both based on messenger RNA technology.

At this point in time, all COVID mRNA vaccination program[s] should stop immediately,” Retsef Levi, a professor of operations management at the Massachusetts Institute of Technology, said in a video statement. “They should stop because they completely failed to fulfill any of their advertised promise[s] regarding efficacy. And more importantly, they should stop because of the mounting and indisputable evidence that they cause unprecedented level of harm, including the death of young people and children.”

Levi was referring to post-vaccination heart inflammation, or myocarditis. The condition is one of the few that authorities have acknowledged is caused by the messenger RNA vaccines.

Read more here...

Tyler Durden Thu, 02/02/2023 - 19:10

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Inside The Secret Government Meeting On COVID-19 Natural Immunity

Inside The Secret Government Meeting On COVID-19 Natural Immunity

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Four of…



Inside The Secret Government Meeting On COVID-19 Natural Immunity

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Four of the highest ranking U.S. health officials—including Dr. Anthony Fauci—met in secret to discuss whether or not naturally immune people should be exempt from getting COVID-19 vaccines, The Epoch Times can reveal.

National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci during a Senate hearing in Washington on May 17, 2022. (Shawn Thew/Pool/AFP via Getty Images)

The officials brought in four outside experts to discuss whether the protection gained after recovering from COVID-19—known as natural immunity—should count as one or more vaccine doses.

“There was interest in several people in the administration in hearing basically the opinions of four immunologists in terms of what we thought about … natural infection as contributing to protection against moderate to severe disease, and to what extent that should influence dosing,” Dr. Paul Offit, one of the experts, told The Epoch Times.

Offit and another expert took the position that the naturally immune need fewer doses. The other two experts argued natural immunity shouldn’t count as anything.

The discussion did not lead to a change in U.S. vaccination policy, which has never acknowledged post-infection protection. Fauci and the other U.S. officials who heard from the experts have repeatedly downplayed that protection, claiming that it is inferior to vaccine-bestowed immunity. Most studies on the subject indicate the opposite.

The meeting, held in October 2021, was briefly discussed before on a podcast. The Epoch Times has independently confirmed the meeting took place, identified all of the participants, and uncovered other key details.

Dr. Jay Bhattacharya, a professor of medicine at Stanford University who did not participate in the meeting, criticized how such a consequential discussion took place behind closed doors with only a few people present.

“It was a really impactful decision that they made in private with a very small number of people involved. And they reached the wrong decision,” Bhattacharya told The Epoch Times.

An email obtained by The Epoch Times shows Dr. Vivek Murthy contacting colleagues to arrange the meeting. (The Epoch Times)

The Participants

From the government:

  • Fauci, the head of the U.S. National Institute of Allergy and Infectious Diseases and the chief medical adviser to President Joe Biden until the end of 2022
  • Dr. Vivek Murthy, the U.S. surgeon general
  • Dr. Rochelle Walensky, the head of U.S. Centers for Disease Control and Prevention (CDC)
  • Dr. Francis Collins, head of the U.S. National Institutes of Health, which includes the National Institute of Allergy and Infectious Diseases, until December 2021
  • Dr. Bechara Choucair, the White House vaccine coordinator until November 2021

From outside the government:

  • Offit, director of the Vaccine Education Center at Children’s Hospital of Philadelphia and an adviser to the U.S. Food and Drug Administration on vaccines
  • Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota and a former member of Biden’s COVID-19 advisory board
  • Akiko Iwasaki, professor of immunobiology and molecular, cellular, and developmental biology at Yale University
  • Dr. Peter Hotez, co-director of Texas Children’s Hospital Center for Vaccine Development and dean of the Baylor College of Medicine’s School of Tropical Medicine

Fauci and Murthy decided to hold the meeting, according to emails The Epoch Times obtained.

“Would you be available tonight from 9-9:30 for a call with a few other scientific colleagues on infection-induced immunity? Tony and I just discussed and were hoping to do this sooner rather than later if possible,” Murthy wrote in one missive to Fauci, Walensky, and Collins.

All three quickly said they could make it.

Walensky asked who would be there.

Murthy listed the participants. “I think you know all of them right?” he said.

Walensky said she knew all but one person. “Sounds like a good crew,” she added.

From top left, clockwise: Dr. Vivek Murthy, Dr. Francis Collins, Dr. Anthony Fauci, and Dr. Rochelle Walensky. (Getty Images)

‘Clear Benefit’

During the meeting, Offit put forth his position—that natural immunity should count as two doses.

At the time, the CDC recommended three shots—a two-dose primary series and a booster—for many Americans 18 and older, soon expanding that advice to all adults, even though trials of the boosters only analyzed immunogenicity and efficacy among those without evidence of prior infection.

Research indicated that natural immunity was long-lasting and superior to vaccination. On the other hand, the CDC published a paper in its quasi-journal that concluded vaccination was better.

Osterholm sided with Offit, but thought that having recovered from COVID-19 should only count as a single dose.

“I added my voice at the meeting to count an infection as equivalent to a dose of vaccine! I’ve always believed hybrid immunity likely provides the most protection,” Osterholm told The Epoch Times via email.

Hybrid immunity refers to getting a vaccine after recovering from COVID-19.

Some papers have found vaccination after recovery boosts antibodies, which are believed to be a correlate of protection. Other research has shown that the naturally immune have a higher risk of side effects than those who haven’t recovered from infection. Some experts believe the risk is worth the benefit but others do not.

Hotez and Iwasaki, meanwhile, made the case that natural immunity should not count as any dose—as has been the case in virtually the entire United States since the COVID-19 vaccines were first rolled out.

Iwasaki referred to a British preprint study, soon after published in Nature, that concluded, based on survey data, that the protection from the Pfizer and AstraZeneca vaccines was heightened among people with evidence of prior infection. She also noted a study she worked on that found the naturally immune had higher antibody titers than the vaccinated, but that the vaccinated “reached comparable levels of neutralization responses to the ancestral strain after the second vaccine dose.” The researchers also discovered T cells—thought to protect against severe illness—were boosted by vaccination.

There’s a “clear benefit” to boosting regardless of prior infection, Iwasaki, who has since received more than $2 million in grants from the National Institutes of Health (NIH), told participants after the meeting in an email obtained by The Epoch Times. Hotez received $789,000 in grants from the NIH in fiscal year 2020, and has received other grants totaling millions in previous years. Offit, who co-invented the rotavirus vaccine, received $3.5 million in NIH grants from 1985 through 2004.

Hotez declined interview requests through a spokesperson. Iwasaki did not respond to requests for comment.

No participants represented experts like Bhattacharya who say that the naturally immune generally don’t need any doses at all.

In an email obtained by The Epoch Times, Akiko Iwasaki wrote to other meeting participants shortly after the meeting ended. (The Epoch Times)

Public Statements

In public, Hotez repeatedly portrayed natural immunity as worse than vaccination, including citing the widely criticized CDC paper, which drew from just two months of testing in a single state.

In one post on Twitter on Oct. 29, 2021, he referred to another CDC study, which concluded that the naturally immune were five times as likely to test positive compared to vaccinated people with no prior infection, and stated: “Still more evidence, this time from @CDCMMWR showing that vaccine-induced immunity is way better than infection and recovery, what some call weirdly ‘natural immunity’. The antivaccine and far right groups go ballistic, but it’s the reality.”

That same day, the CDC issued a “science brief” that detailed the agency’s position on natural immunity versus the protection from vaccines. The brief, which has never been updated, says that available evidence shows both the vaccinated and naturally immune “have a low risk of subsequent infection for at least 6 months” but that “the body of evidence for infection-induced immunity is more limited than that for vaccine-induced immunity.”

Evidence shows that vaccination after infection, or hybrid immunity, “significantly enhances protection and further reduces risk of reinfection” and is the foundation of the CDC’s recommendations, the agency said.

Several months later, the CDC acknowledged that natural immunity was superior to vaccination against the Delta variant, which was displaced in late 2021 by Omicron. The CDC, which has made misleading representations before on the evidence supporting vaccination of the naturally immune, did not respond to a request for comment regarding whether the agency will ever update the brief.

Iwasaki had initially been open to curbing the number of doses for the naturally immune—”I think this supports the idea of just giving one dose to people who had covid19,” she said in response to one Twitter post in early 2021, which is restricted from view—but later came to argue that each person who is infected has a different immune response, and that the natural immunity, even if strong initially, wanes over time.

Osterholm has knocked people who claim natural immunity is weak or non-existent, but has also claimed that vaccine-bestowed immunity is better. Osterholm also changed the stance he took in the meeting just several months later, saying in February 2022 that “we’ve got to make three doses the actual standard” while also “trying to understand what kind of immunity we get from a previous infection.”

Offit has been the leading critic on the Vaccines and Related Biological Products Advisory Committee, which advises U.S. regulators on vaccines, over their authorizations of COVID-19 boosters. Offit has said boosters are unnecessary for the young and healthy because they don’t add much to the primary series. He also criticized regulators for authorizing updated shots without consulting the committee and absent clinical data. Two of the top U.S. Food and Drug Administration (FDA) officials resigned over the booster push. No FDA officials were listed on invitations to the secret meeting on natural immunity.

Fauci and Walensky Downplay Natural Immunity

Fauci and Walensky, two of the most visible U.S. health officials during the pandemic, have repeatedly downplayed natural immunity.

Fauci, who said in an email in March 2020 that he assumed there would be “substantial immunity post infection,” would say later that natural immunity was real but that the durability was uncertain. He noted the studies finding higher antibody levels from hybrid immunity.

In September 2021, months after claiming that vaccinated people “can feel safe that they are not going to get infected,” Fauci said that he did not have “a really firm answer” on whether the naturally immune should get vaccinated.

“It is conceivable that you got infected, you’re protected—but you may not be protected for an indefinite period of time,” Fauci said on CNN when pressed on the issue. “So I think that is something that we need to sit down and discuss seriously.”

After the meeting, Fauci would say that natural immunity and vaccine-bestowed immunity both wane, and that people should get vaccinated regardless of prior infection to boost their protection.

Walensky, before she became CDC director, signed a document called the John Snow Memorandum in response to the Great Barrington Declaration, which Bhattacharya coauthored. The declaration called for focused protection of the elderly and otherwise infirm, stating, “The most compassionate approach that balances the risks and benefits of reaching herd immunity, is to allow those who are at minimal risk of death to live their lives normally to build up immunity to the virus through natural infection, while better protecting those who are at highest risk.”

The memorandum, in contrast, said there was “no evidence for lasting protective immunity to SARS-CoV-2 following natural infection” and supported the harsh lockdown measures that had been imposed in the United States and elsewhere.

In March 2021, after becoming director, Walensky released recommendations that the naturally immune get vaccinated, noting that there was “substantial durability” of protection six months after infection but that “rare cases of reinfection” had been reported.

Walensky hyped the CDC study on natural immunity in August 2021, and the second study in October 2021. But when the third paper came out concluding natural immunity was superior, she did not issue a statement. Walensky later told a blog that the study found natural immunity provided strong protection, “perhaps even more so than those who had been vaccinated and not yet boosted.”

But, because it came before Omicron, she said, “it’s not entirely clear how that protection works in the context of Omicron and boosting.”

Walensky, Murthy, and Collins did not respond to requests for interviews. Fauci, who stepped down from his positions in late 2022, could not be reached.

Murthy and Collins also portrayed natural immunity as inferior. “From the studies about natural immunity, we are seeing more and more data that tells us that while you get some protection from natural infection, it’s not nearly as strong as what you get from the vaccine,” Murthy said on CNN about two months before the meeting. Collins, in a series of blog posts, highlighted the studies showing higher antibody levels after vaccination and urged people to get vaccinated. He also voiced support for vaccine mandates.

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Tyler Durden Thu, 02/02/2023 - 21:10

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