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Pass me some suga

Pass me some suga

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Japan to choose new Prime Minister

Financial markets limped to a neutral close on Friday after a roller-coaster week, notably on equity markets. The thrill of the amusement park rise is unlikely to subside this week though, with a packed calendar for financial markets to sink their teeth into, starting with the appointment of a new Japan Prime Minister today.

Barring any surprises, the victor should emerge as Chief Cabinet Secretary Yoshihide Suga. That decision should not be market moving as we fully expect a steady hand to remain on the tiller of Abenomics. Mr Suga has signalled that no further rises in sales tax are on the horizon, but all else should stay the same. Of more interest will be if Mr Suga signals that a new election will be held to mandate his new government. Finance Minister Aso signalled as such in recent days, although Covid-19 may affect the timing.

The central bank calendar is packed with the Bank of Japan, Federal Reserve and Bank of England all due to announce their latest rate decisions. Regionally, both Taiwan and Bank Indonesia release rate decisions. Of that esteemed grouping, the Bank of England and Bank Indonesia hold the most interest. We can expect rates to remain unchanged amongst the others, with the usual lower for longer, do whatever it takes rhetoric from them.

The Bank of England (BoE) could well signal that it intends to increase quantitative easing and may put the prospect of negative rates on the table. Readers will know that I hate negative interest rates as a policy, but the BoE may have no choice but to do both given the Brexit ructions and impending increase in unemployment on the near horizon. The odds of a hard Brexit have risen exponentially last week, as trade negotiations with the European Union have stalled. The UK government’s tabling of a bill that unilaterally changes the terms of the Brexit agreement has drawn domestic and international condemnation. The actions of the government and a probable dovish BoE will be most acutely felt in the currency markets, where the British pound is likely to remain under some severe stress.

Bank Indonesia (BI) has an altogether different set of problems that look very much like a Hobson’s choice. With Jakarta -where the author is sitting- restarting a strict Covid-19 lockdown today, the economy is almost sure to come under more downward pressure. That was evidenced by Indonesia equities being cratered after the lockdown was announced last week. Indonesia, South East Asia’s largest economy and population centre, is screaming for more rate cuts, and the central bank ostensibly has plenty of room to deliver. However, the Indonesian rupiah fell strongly last week despite plenty of BI, having been punished by investors for directly monetising some government bond issuance earlier in the year. BI’s line in the sand appears to be at a USD/IDR rate of 15,000.00, with the Rupiah closing at 14,900.00 on Friday. BI may have no choice but to reassure international investors by holding rates firm at 4.0%, even as the domestic economy sinks deeper into recession following Jakarta’s decision.

Another Asian country facing some tough choices is India, which sees the release of CPI this afternoon. The CPI print is likely to be, around 7.10% YoY, well above the Reserve Bank of India’s target. With Covid-19 rampaging across the country, India finds itself in the worst of all worlds, falling growth and rising prices. That stagflationary dark corner of economics is a dangerous one, and monetary policy cannot solve both issues simultaneously. Again, the immediate effects are likely to be felt in the currency market, and I struggle to see the Indian rupee maintaining its recent gains versus the US dollar. That would be bad news for the inflation equation, unless oil prices continue to fall on international markets. In a Covid-19 world, increasing productivity (one stagflationary solution), will be nigh on impossible. India, like Indonesia, will likely have to just wear the pain, and hope that vaccines arrive en masse in late Q4 2020; a strategy more than a few countries appear to be increasingly adopting.

In contrast, China will release Industrial Production and Retail Sales tomorrow. Industrial Production is expected to rise to 5.20% Y0Y. Retail Sales for August are expected to grow from -1.10% to 0.0%, confirming a recovery trajectory that belies the headline number. On Friday, China’s aggregate financing data for August blew expectations out of the water, rising to 3.6 trillion yuan. Even if the PBOC is keeping a firm hand on interest rates, stimulus is in full cry in China. That will be good news for regional markets exporting to China, but also for China domestic markets, where both the export and domestic sectors appear to be recovering nicely. That partially explains the firmness of the CNY of late versus the US dollar, and I expect that to be the direct reflection of the China recovery, with Chinese equities marching to their own beat.

China announced stricter capital requirements for non-bank financial companies over the weekend. Notably, this encompasses entities such as Ant Financial and comes after the government capped lending rates by the sector two weeks ago. Ant Financial’s eagerly anticipated IPO should not be affected, though, with the government’s actions having been anticipated as a known known.

Things will get somewhat murkier for Byte Dance and its TikTok app tomorrow, which is the deadline for a sale of its US operations from the US government or be closed there. Now also needing Chinese government approval for a deal to proceed, Byte Dance has said it would not sell the core source code as part of a US divestiture. The pendulum appears to be swinging towards Byte Dance walking away from a US sale unless some sort of US extension is allowed. That may weigh on the Chinese tech sector today, emphasising as it does, the challenges China tech will have emerging from their enchanted garden behind the great firewall of China.

Japan’s SoftBank is also in the news, announcing a USD40 billion sale of its Arm Holdings chip designer to Nvidia for USD40 billion. The Financial Times is also reporting that SoftBank has revived a plan to go private. The combination is likely to lift SoftBank’s share price in Tokyo today, having been under pressure following revelations about giant positions in US tech-stock call options.

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It’s Not Coercion If We Do It…

It’s Not Coercion If We Do It…

Authored by James Howard Kunstler via Kunstler.com,

Gags and Jibes

“My law firm is currently in court…

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It's Not Coercion If We Do It...

Authored by James Howard Kunstler via Kunstler.com,

Gags and Jibes

“My law firm is currently in court fighting for free and fair elections in 52 cases across 19 states.”

- Marc Elias, DNC Lawfare Ninja, punking voters

Have you noticed how quickly our Ukraine problem went away, vanished, phhhhttttt? At least from the top of US news media websites.

The original idea, as cooked-up by departed State Department strategist Victoria Nuland, was to make Ukraine a problem for Russia, but instead we made it a problem for everybody else, especially ourselves in the USA, since it looked like an attempt to kick-start World War Three.

Now she is gone, but the plans she laid apparently live on.

Our Congress so far has resisted coughing up another $60-billion for the Ukraine project — most of it to be laundered through Raytheon (RTX), General Dynamics, and Lockheed Martin — so instead “Joe Biden” sent Ukraine’s President Zelensky a few reels of Laurel and Hardy movies. The result was last week’s prank: four groups of mixed Ukraine troops and mercenaries drawn from sundry NATO members snuck across the border into Russia’s Belgorod region to capture a nuclear weapon storage facility while Russia held its presidential election.

I suppose it looked good on the war-gaming screen.

Alas, the raid was a fiasco. Russian intel was on it like white-on-rice. The raiders met ferocious resistance and retreated into a Russian mine-field - this was the frontier, you understand, between Kharkov (Ukr) and Belgorod (Rus) - where they were annihilated. The Russian election concluded Sunday without further incident. V.V. Putin, running against three other candidates from fractional parties, won with 87 percent of the vote. He’s apparently quite popular.

“Joe Biden,” not so much here, where he is pretending to run for reelection with a party pretending to go along with the gag. Ukraine is lined up to become Afghanistan Two, another gross embarrassment for the US foreign policy establishment and “JB” personally. So, how long do you think V. Zelensky will be bopping around Kiev like Al Pacino in Scarface?

This time, poor beleaguered Ukraine won’t need America’s help plotting a coup. When that happens, as it must, since Mr. Z has nearly destroyed his country, and money from the USA for government salaries and pensions did not arrive on-time, there will be peace talks between his successors and Mr. Putin’s envoys. The optimum result for all concerned — including NATO, whether the alliance knows it or not — will be a demilitarized Ukraine, allowed to try being a nation again, though in a much-reduced condition than prior to its becoming a US bear-poking stick. It will be on a short leash within Russia’s sphere-of-influence, where it has, in fact, resided for centuries, and life will go on. Thus, has Russia at considerable cost, had to reestablish the status quo.

Meanwhile, Saturday night, “Joe Biden” turned up at the annual Gridiron dinner thrown by the White House [News] Correspondents’ Association, where he told the ballroom of Intel Community quislings:

“You make it possible for ordinary citizens to question authority without fear or intimidation.”

The dinner, you see, is traditionally a venue for jokes and jibes. So, this must have been a gag, right? Try to imagine The New York Times questioning authority. For instance, the authority of the DOJ, the FBI, the DHS, and the DC Federal District court. Instant hilarity, right?

As it happens, though, today, Monday, March 18, 2024, attorneys for the State of Missouri (and other parties) in a lawsuit against “Joe Biden” (and other parties) will argue in the Supreme Court that those government agencies above, plus the US State Department, with assistance from the White House (and most of the White House press corps, too), were busy for years trying to prevent ordinary citizens from questioning authority.

For instance, questioning the DOD’s Covid-19 prank, the CDC’s vaccination op, the DNC’s 2020 election fraud caper, the CIA’s Frankenstein experiments in Ukraine, the J6 “insurrection,” and sundry other trips laid on the ordinary citizens of the USA.

Specifically, Missouri v. Biden is about the government’s efforts to coerce social media into censoring any and all voices that question official dogma.

The case is about birthing the new concept - new to America, anyway - known as “misinformation” - that is, truth about what our government is doing that cannot be allowed to enter the public arena, making it very difficult for ordinary citizens to question authority.

The government will apparently argue that they were not coercing, they were just trying to persuade the social media execs to do this or that.

As The Epoch Times' Jacob Burg reported, the court appeared wary of arguments by the respondents that the White House is wholesale prevented under the Constitution from recommending to social media companies to remove posts it considered harmful, in cases where the suggestions themselves didn't cross the line into "coercion."

Deputy Solicitor General for the U.S. Brian Fletcher argued that the White House's communications with news media and social media companies regarding the content promoted on their platforms do not rise to the level of governmental “coercion,” which would have been prohibited under the Constitution.

Instead, the government was merely using its "bully pulpit" to "persuade" private parties, in this case social media companies, to do what they are "lawfully allowed to do,” he said.

Louisiana Solicitor General Benjamin Aguiñaga, representing the respondents, argued that the case demonstrates “unrelenting pressure by the government to coerce social media platforms to suppress the speech of millions of Americans.”

Mr. Aguiñaga argued that the government had no right to tell social media companies what content to carry. Its only remedy in the event of genuinely false or misleading content, he said, was to counter it by putting forward "true speech."

The attorney general took pointed questions from Liberal Justice Ketanji Brown Jackson about the extent to which the government can step in to take down certain potentially harmful content. Justice Jackson raised the hypothetical of a "teen challenge that involves teens jumping out of windows at increasing elevations," asking if it would be a problem if the government tried to suppress the publication of said challenge on social media. Mr. Aguiñaga replied that those facts were different from the present case.

Justice Ketanji Brown Jackson raised the opinion that some say “the government actually has a duty to take steps to protect the citizens of this country” when it comes to monitoring the speech that is promoted on online platforms.

“So can you help me because I'm really worried about that, because you've got the First Amendment operating in an environment of threatening circumstances from the government's perspective.

“The line is, does the government pursuant to the First Amendment have a compelling interest in doing things that result in restricting speech in this way?”

Attorneys General Liz Merrill of Louisiana and Andrew Bailey of Missouri both told The Epoch Times they felt positive about the case and how the justices reacted.

"I am cautiously optimistic that we will have a majority of the court that lands where I wholeheartedly believe they should land, and that is in favor of protecting speech," Ms. Merrill said.

Journalist Jim Hoft, a party listed in the case, said, "This has to be where they put a stop to this. The government shouldn't be doing this, especially when they're wrong, and pushing their own opinion, silencing dissenting voices. Of course, it's against the Constitution. It's a no-brainer."

In response to a question from Brett Kavanaugh, an associate justice of the Supreme Court, Louisiana Solicitor General Benjamin Aguiñaga said the "government is not helpless" when it comes to countering factually inaccurate speech.

Precedent before the court suggests the government can and should counter false speech with true speech, Mr. Aguiñaga said.

"Censorship has never been the default remedy for perceived First Amendment violation," Mr. Aguiñaga said.

Maybe one of the justices might ask how it came to be that a Chief Counsel of the FBI, James Baker, after a brief rest-stop at a DC think tank, happened to take the job as Chief Counsel at Twitter in 2020.

That was a mighty strange switcheroo, don’t you think?

And ordinary citizens were not generally informed of it until the fall of 2022, when Elon Musk bought Twitter and delved into its workings.

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

Tyler Durden Mon, 03/18/2024 - 16:20

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A popular vacation destination is about to get much more expensive

The entry fee to this destination known for its fauna has been unchanged since 1998.

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When visiting certain islands and other remote parts of the world, travelers need to be prepared to pay more than just the plane ticket and accommodation costs.

Particularly for smaller places grappling with overtourism, local governments will often introduce "tourist taxes" to go toward things like reversing ecological degradation and keeping popular attractions clean and safe.

Related: A popular European city is introducing the highest 'tourist tax' yet

Located 900 kilometers off the coast of Ecuador and often associated with the many species of giant turtles who call it home, the Galápagos Islands are not easy to get to (visitors from the U.S. often pass through Quito and then get on a charter flight to the islands) but are often a dream destination for those interested in seeing rare animal species in an unspoiled environment.

The Galápagos Islands are home to many animal species that exist nowhere else in the world.

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This is how much you'll have to pay to visit the Galápagos Islands

While local authorities have been charging a $100 USD entry fee for all visitors to the islands since 1998, Ecuador's Ministry of Tourism announced that this number would rise to $200 for adults starting from August 1, 2024. 

More Travel:

According to the local tourism board, the increase has been prompted by the fact that record numbers of visitors since the pandemic have started taking a toll on the local environment. The islands are home to just 30,000 people but have been seeing nearly 300,000 visitors each year.

"It is our collective responsibility to protect and preserve this unparalleled ecosystem for future generations," Ecuador's Minister of Tourism Niels Olsen said in a statement. "The adjustment in the entry fee, the first in 26 years, is a necessary measure to ensure that tourism in the Galápagos remains sustainable and mutually beneficial to both the environment and our local communities."

These are the other countries which are raising (or adding) their tourist taxes

While the $200 applies to most international adult arrivals, there are some exceptions that can make one eligible for a lower rate. Adult citizens of the countries that make up the South American treaty bloc Mercosur will pay a $100 fee while children from any country will also get a discounted rate that is currently set at $50. Children under the age of two will continue to get free access.

In recent years, multiple countries and destinations have either raised or introduced new taxes for visitors. Thailand recently started charging all international visitors between 150 and 300 baht (up to $9 USD) that are put toward a sustainability budget while the Italian city of Venice is running a test in which it charges those coming into the city during the most popular summer weekends five euros.

Places such as Bali, the Maldives and New Zealand have been charging international arrivals a fee for years while Iceland's Prime Minister Katrín Jakobsdóttir hinted at plans to introduce something similar at the United Nations Climate Ambition Summit in 2023.

"Tourism has really grown exponentially in Iceland in the last decade and that obviously is not just creating effects on the climate," Jakobsdóttir told a Bloomberg reporter. "Most of our guests visit our unspoiled nature and obviously that creates a pressure."

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Merck’s six-year deal strategy could deliver a blockbuster if hypertension drug is OK’d this month

With an FDA decision expected next week for its blood pressure drug sotatercept, Merck is hoping that its bundle of acquisitions in recent years will lead…

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With an FDA decision expected next week for its blood pressure drug sotatercept, Merck is hoping that its bundle of acquisitions in recent years will lead to multiple approvals and late-stage clinical wins.

The regulator is set to decide whether to approve the pulmonary arterial hypertension drug known as sotatercept by March 26. If approved, the drug could generate $1.9 billion in sales in 2025, according to Leerink Partners analyst Daina Graybosch.

The subcutaneous treatment came to Merck by way of its $11.5 billion acquisition of Acceleron in 2021.

Sunil Patel

“We viewed [Acceleron] as a great Merck-type company to own, especially with their legacy of R&D,” Sunil Patel, Merck’s head of corporate development and business development & licensing, said in an interview.

For the past few years, the pharma giant has been amassing help from external biotechs to broaden its pipeline and prepare for the looming patent deadline for Keytruda, the cancer immunotherapy that had $25 billion in sales last year. It’s Merck’s most notable treatment to come from external innovation; Organon made the drug, known then as pembrolizumab, and was bought by Schering-Plough, which merged with Merck in 2009.

Now, Merck is once again hoping a drug that it bet billions of dollars on will lead a spate of approvals out of its promising late-stage pipeline. The company has put at least $50 billion toward business development since 2018. Aside from Covid-19 treatment Lagevrio, which was authorized in late 2021 and developed with Ridgeback Biotherapeutics, Merck’s dealmaking over the past few years has not produced another blockbuster medicine.

In three months, Merck could have another approval in patritumab deruxtecan, an antibody-drug conjugate it’s developing with Daiichi Sankyo, in certain forms of non-small cell lung cancer. The FDA set a decision date of June 26. As part of the $4 billion upfront deal, Merck is co-developing and co-commercializing three antibody-drug conjugates with the ADC powerhouse.

Merck also expects a late-stage race with Roche in the inflammatory market, stemming from its $10.8 billion acquisition of Prometheus Biosciences last year. It began a Phase III of Prometheus’ lead drug, now called tulisokibart or MK-7240, in ulcerative colitis last fall. Meanwhile, the company also bagged a Phase I/II cancer drug via its more relatively modest $680 million acquisition of Harpoon Therapeutics earlier this year.

The acquisitions are likely to keep coming. Merck CEO Rob Davis said earlier this year the pharma is willing to spend as much as $15 billion on M&A.

It’s made more than 20 biotech acquisitions in the past 10 years, and that has led to at least 17 compounds that have been approved or are in mid- and late-stage development, Patel said.

“This current management team is deeply rooted in the legacy of this company. They understand the importance of building a long-term sustainable future, and they’re just not afraid to make the bold scientific bets,” he said.

Last year, Merck adjusted the way it calculates R&D spending to factor in M&A and licensing costs, and doing so catapulted the company to the top of Endpoints News 2023 pharma R&D expenditure list.

But not all deals have been smooth. Merck discontinued a Covid-19 treatment candidate from its 2020 acquisition of OncoImmune. And a chronic cough drug that it gained through its 2016 acquisition of Afferent Pharmaceuticals has twice been rejected by the FDA. The drug has been approved in Europe, Switzerland and Japan.

All told, Merck inks about 80 to 100 business development transactions per year, Patel said. That includes licensing pacts and early-stage collaborations, like a $1 billion biobuck-loaded deal for new biologics with Pearl Bio that it announced last week.

“Once we get through the science, we act decisively and very rapidly to bring the right type of BD structure,” said Patel, who’s been at Merck Research Laboratories for 25 years.

Dean Li

About 80 employees search and evaluate potential transactions, which are then presented to a committee led by Dean Li, president of Merck Research Laboratories. Li joined Merck in 2017 from the University of Utah Health, where he co-founded biotechs such as Recursion and Hydra Biosciences.

“It’s seamless between Merck Research Labs and the BD unit. We’re just one simple group that operates with the one pipeline mentality,” Patel said.

About 60% of the Acceleron team remains at Merck.

“That’s a testament to how we can integrate these teams and how we embrace the science that we’re acquiring,” he said.

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