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Peter Schiff: Jerome Powell Isn’t Qualified To Be In Any Economic Club

Peter Schiff: Jerome Powell Isn’t Qualified To Be In Any Economic Club


Last week, Federal Reserve Chairman Jerome Powell…



Peter Schiff: Jerome Powell Isn't Qualified To Be In Any Economic Club


Last week, Federal Reserve Chairman Jerome Powell delivered a speech at the Economic Club of New York luncheon. In his podcast, Peter Schiff broke down some of the Fed chair’s comments and concluded that Powell is not qualified to be a member of any economic club.

Peter opened the discussion by saying Powell is not the person to bring in if you want accurate answers about the economy.

He doesn’t know what’s going on. And if he does, he’s not going to be honest. He’s going to lie. He probably doesn’t know. He’s clueless. And he lies on top of that.”

Peter said that if the Economic Club of New York asked him all the same questions they asked Powell, all of his answers would be the exact opposite.

I’m sure that most of the members of the Economic Club of New York, maybe all the members, know more about economics than Jerome Powell. Because you have to flunk a test about economics in order to qualify to be a member of the Federal Reserve. In fact, you probably can’t even get to be a Federal Open Market Committee member if you actually know anything about economics.”

There are a number of things Powell said that seem to support Peter’s assertion.

The Economy Isn’t Spending

Powell claimed the Fed needs to weaken the economy in order to bring down inflation. Peter said the notion that economic growth causes inflation is a “complete fallacy” and a “Keynesian myth.”

The problem is that Powell and many others in the mainstream misdefine economic growth. When they say, “economic growth,” they really mean consumer spending. They’re looking at metrics such as retail sales and GDP growth.

That’s not economic growth. That’s just spending. That’s not growing the economy. That’s spending what a growing economy produces.”

When you look at retail sales numbers, much of that increase is due to rising prices. And to maintain the spending spree, Americans are borrowing a lot of money. In fact, the “unsinkable” American consumer is growing in debt. Meanwhile, many people have taken on second and third jobs just to make ends meet.

If you’re just looking at the spending, and you think, ‘Oh, we have this really strong economy,’ No! It’s not a strong economy. You’re looking at inflation! … Inflation is driving this spending.”

That means you don’t have to “weaken” the economy to reduce inflation. You just need to reduce spending. You certainly don’t want people to stop working. If they aren’t working, they aren’t producing.

That means there’s less stuff. That puts upward pressure on prices. We want everybody to keep working. We just want them to stop spending everything they earn. They need to take some of their paychecks and save it — put it in the bank.”

But Powell thinks spending is the economy and the consumer drives things by buying stuff.

No! The consumer is the caboose. He’s driven by the real engine of the economy, which is production. That’s what we need more of. We need a stronger economy, but we need less spending, less consumption, more savings, more investment.”

The Pandemic Caused Inflation?

Powell also claimed the pandemic caused price inflation. He acts as if everything was fine until the pandemic and then prices just started going up.

The pandemic is not why we have inflation. The Fed is why we have inflation. Congress, the president are why we have inflation. And not just Biden, but Trump and the presidents before him. They were all contributing to the inflation problem that we’re dealing with today.”

It is true that the inflation problem got worse during COVID. But it wasn’t the pandemic. It was the government response to the pandemic.

The pandemic was a health problem. What the government did was turn it into an inflation problem. Because they overreacted, number one. They forced people to stop working. And then they ran huge deficits to send people stimulus checks to buy stuff that they weren’t making. It was the worst combination of monetary and fiscal policy ever devised.”

That raises a question. If Powell doesn’t know where price inflation came from, how is he going to get rid of it?

The Banking Crisis Isn’t Over

Referencing the collapse of Silicon Valley Bank and other financial institutions last spring, Powell was asked if the banking crisis is over. He said we handled it and it’s basically behind us.

Peter disagreed.

It’s just getting started. That was the tip of the iceberg.”

Peter said all you have to do to see the underlying problem is to look at how much value banks of lost on their mortgage-backed securities and Treasuries since the March bailout.

It’s been an enormous collapse. And so the banks today are in far worse shape than they were back in March when Silicon Valley Bank failed. The Fed should know this because the Fed is the biggest loser of them all. The Fed has more Treasuries and mortgage-backed securities on its balance sheet than anybody else. So, the Fed is the biggest loser, and somehow they think the crisis is behind us when it’s all out in front of us, and it’s about to be playing out in front of their eyes.”

The “Problem” of Low Inflation

Powell worried out loud that inflation could potentially get too low. He said that was the problem in the past and now we have the problem of high inflation.

Peter said “low” inflation was never a problem.

That was a made-up problem so they could have an excuse to create more inflation. Now we’ve got a real problem of inflation being too high.”

In 2020, Powell started talking about inflation averaging. Instead of targeting 2%, Fed officials pivoted to an average 2% target over time.

They wanted to justify letting inflation get to two-and-a-quarter, two-and-a-half. They didn’t want to have to put in the brakes when we hit two. They wanted to make up for all the years where we were below two. So, they redefined their target to an average inflation rate of 2%. No one talks about that now. I mean, they haven’t officially changed that, but how many years are we going to have to have 1% inflation to average it down to two?

In fact, we really need falling prices in order to get the average back to 2%. But the central bankers never want to do that. They just want to average up.

Powell Doesn’t Consider Fiscal Policy

When asked about government borrowing and spending, and the massive budget deficits, Powell said he doesn’t consider fiscal policy at all when developing monetary policy. He also insisted the Fed doesn’t change monetary policy based on fiscal policy. He talked as if fiscal policy isn’t part of the central bank’s mandate.

Peter said it has everything to do with their mandate.

Where’s the inflation coming from? It’s coming from the budget deficits that he monetizes. And government spending is driving inflation. If you’re trying to ‘slow down’ the economy, or just trying to cool consumption, if the government is increasing spending, that is counteracting what you’re trying to do. How could you avoid that? How can you not care about that?”

Peter said the whole idea behind Fed independence is so the central bank can push back against reckless fiscal policy.

The Fed is supposed the be the chaperone here at this spending party, and if Congress is spending too much money, well, jack up rates. Make it harder for them to do that. Raise the cost of borrowing so that they cut back.”

Peter said it’s like a doctor ignoring a patient’s symptoms and prescribing whatever treatment he fancies.

Tyler Durden Tue, 10/24/2023 - 14:20

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Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide…



Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide Black Lives Matter riots in the summer of 2020, some elite colleges and universities shredded testing requirements for admission. Several years later, the test-optional admission has yet to produce the promising results for racial and class-based equity that many woke academic institutions wished.

The failure of test-optional admission policies has forced Dartmouth College to reinstate standardized test scores for admission starting next year. This should never have been eliminated, as merit will always prevail. 

"Nearly four years later, having studied the role of testing in our admissions process as well as its value as a predictor of student success at Dartmouth, we are removing the extended pause and reactivating the standardized testing requirement for undergraduate admission, effective with the Class of 2029," Dartmouth wrote in a press release Monday morning. 

"For Dartmouth, the evidence supporting our reactivation of a required testing policy is clear. Our bottom line is simple: we believe a standardized testing requirement will improve—not detract from—our ability to bring the most promising and diverse students to our campus," the elite college said. 

Who would've thought eliminating standardized tests for admission because a fringe minority said they were instruments of racism and a biased system was ever a good idea? 

Also, it doesn't take a rocket scientist to figure this out. More from Dartmouth, who commissioned the research: 

They also found that test scores represent an especially valuable tool to identify high-achieving applicants from low and middle-income backgrounds; who are first-generation college-bound; as well as students from urban and rural backgrounds.

All the colleges and universities that quickly adopted test-optional admissions in 2020 experienced a surge in applications. Perhaps the push for test-optional was under the guise of woke equality but was nothing more than protecting the bottom line for these institutions. 

A glimpse of sanity returns to woke schools: Admit qualified kids. Next up is corporate America and all tiers of the US government. 

Tyler Durden Mon, 02/05/2024 - 17:20

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Four burning questions about the future of the $16.5B Novo-Catalent deal

To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.
Beyond spending billions of dollars to expand…



To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.

Beyond spending billions of dollars to expand its own production capacity for its weight loss drugs, the Danish drugmaker said Monday it will pay $11 billion to acquire three manufacturing plants from Catalent. It’s part of a broader $16.5 billion deal with Novo Holdings, the investment arm of the pharma’s parent group, which agreed to acquire the contract manufacturer and take it private.

It’s a big deal for all parties, with potential ripple effects across the biotech ecosystem. Here’s a look at some of the most pressing questions to watch after Monday’s announcement.

Why did Novo do this?

Novo Holdings isn’t the most obvious buyer for Catalent, particularly after last year’s on-and-off M&A interest from the serial acquirer Danaher. But the deal could benefit both Novo Holdings and Novo Nordisk.

Novo Nordisk’s biggest challenge has been simply making enough of the weight loss drug Wegovy and diabetes therapy Ozempic. On last week’s earnings call, Novo Nordisk CEO Lars Fruergaard Jørgensen said the company isn’t constrained by capital in its efforts to boost manufacturing. Rather, the main challenge is the limited amount of capabilities out there, he said.

“Most pharmaceutical companies in the world would be shopping among the same manufacturers,” he said. “There’s not an unlimited amount of machinery and people to build it.”

While Novo was already one of Catalent’s major customers, the manufacturer has been hamstrung by its own balance sheet. With roughly $5 billion in debt on its books, it’s had to juggle paying down debt with sufficiently investing in its facilities. That’s been particularly challenging in keeping pace with soaring demand for GLP-1 drugs.

Novo, on the other hand, has the balance sheet to funnel as much money as needed into the plants in Italy, Belgium, and Indiana. It’s also struggled to make enough of its popular GLP-1 drugs to meet their soaring demand, with documented shortages of both Ozempic and Wegovy.

The impact won’t be immediate. The parties expect the deal to close near the end of 2024. Novo Nordisk said it expects the three new sites to “gradually increase Novo Nordisk’s filling capacity from 2026 and onwards.”

As for the rest of Catalent — nearly 50 other sites employing thousands of workers — Novo Holdings will take control. The group previously acquired Altasciences in 2021 and Ritedose in 2022, so the Catalent deal builds on a core investing interest in biopharma services, Novo Holdings CEO Kasim Kutay told Endpoints News.

Kasim Kutay

When asked about possible site closures or layoffs, Kutay said the team hasn’t thought about that.

“That’s not our track record. Our track record is to invest in quality businesses and help them grow,” he said. “There’s always stuff to do with any asset you own, but we haven’t bought this company to do some of the stuff you’re talking about.”

What does it mean for Catalent’s customers? 

Until the deal closes, Catalent will operate as a standalone business. After it closes, Novo Nordisk said it will honor its customer obligations at the three sites, a spokesperson said. But they didn’t answer a question about what happens when those contracts expire.

The wrinkle is the long-term future of the three plants that Novo Nordisk is paying for. Those sites don’t exclusively pump out Wegovy, but that could be the logical long-term aim for the Danish drugmaker.

The ideal scenario is that pricing and timelines remain the same for customers, said Nicole Paulk, CEO of the gene therapy startup Siren Biotechnology.

Nicole Paulk

“The name of the group that you’re going to send your check to is now going to be Novo Holdings instead of Catalent, but otherwise everything remains the same,” Paulk told Endpoints. “That’s the best-case scenario.”

In a worst case, Paulk said she feared the new owners could wind up closing sites or laying off Catalent groups. That could create some uncertainty for customers looking for a long-term manufacturing partner.

Are shareholders and regulators happy? 

The pandemic was a wild ride for Catalent’s stock, with shares surging from about $40 to $140 and then crashing back to earth. The $63.50 share price for the takeover is a happy ending depending on the investor.

On that point, the investing giant Elliott Investment Management is satisfied. Marc Steinberg, a partner at Elliott, called the agreement “an outstanding outcome” that “clearly maximizes value for Catalent stockholders” in a statement.

Elliott helped kick off a strategic review last August that culminated in the sale agreement. Compared to Catalent’s stock price before that review started, the deal pays a nearly 40% premium.

Alessandro Maselli

But this is hardly a victory lap for CEO Alessandro Maselli, who took over in July 2022 when Catalent’s stock price was north of $100. Novo’s takeover is a tacit acknowledgment that Maselli could never fully right the ship, as operational problems plagued the company throughout 2023 while it was limited by its debt.

Additional regulatory filings in the next few weeks could give insight into just how competitive the sale process was. William Blair analysts said they don’t expect a competing bidder “given the organic investments already being pursued at other leading CDMOs and the breadth and scale of Catalent’s operations.”

The Blair analysts also noted the companies likely “expect to spend some time educating relevant government agencies” about the deal, given the lengthy closing timeline. Given Novo Nordisk’s ascent — it’s now one of Europe’s most valuable companies — paired with the limited number of large contract manufacturers, antitrust regulators could be interested in taking a close look.

Are Catalent’s problems finally a thing of the past?

Catalent ran into a mix of financial and operational problems over the past year that played no small part in attracting the interest of an activist like Elliott.

Now with a deal in place, how quickly can Novo rectify those problems? Some of the challenges were driven by the demands of being a publicly traded company, like failing to meet investors’ revenue expectations or even filing earnings reports on time.

But Catalent also struggled with its business at times, with a range of manufacturing delays, inspection reports and occasionally writing down acquisitions that didn’t pan out. Novo’s deep pockets will go a long way to a turnaround, but only the future will tell if all these issues are fixed.

Kutay said his team is excited by the opportunity and was satisfied with the due diligence it did on the company.

“We believe we’re buying a strong company with a good management team and good prospects,” Kutay said. “If that wasn’t the case, I don’t think we’d be here.”

Amber Tong and Reynald Castañeda contributed reporting.

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Petrina Kamya, Ph.D., Head of AI Platforms at Insilico Medicine, presents at BIO CEO & Investor Conference

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb….



Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

Credit: Insilico Medicine

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

The session will look at how the latest artificial intelligence (AI) tools – including generative AI and large language models – are currently being used to advance the discovery and design of new drugs, and which technologies are still in development. 

The BIO CEO & Investor Conference brings together over 1,000 attendees and more than 700 companies across industry and institutional investment to discuss the future investment landscape of biotechnology. Sessions focus on topics such as therapeutic advancements, market outlook, and policy priorities.

Insilico Medicine is a leading, clinical stage AI-driven drug discovery company that has raised over $400m in investments since it was founded in 2014. Dr. Kamya leads the development of the Company’s end-to-end generative AI platform, Pharma.AI from Insilico’s AI R&D Center in Montreal. Using modern machine learning techniques in the context of chemistry and biology, the platform has driven the discovery and design of 30+ new therapies, with five in clinical stages – for cancer, fibrosis, inflammatory bowel disease (IBD), and COVID-19. The Company’s lead drug, for the chronic, rare lung condition idiopathic pulmonary fibrosis, is the first AI-designed drug for an AI-discovered target to reach Phase II clinical trials with patients. Nine of the top 20 pharmaceutical companies have used Insilico’s AI platform to advance their programs, and the Company has a number of major strategic licensing deals around its AI-designed therapeutic assets, including with Sanofi, Exelixis and Menarini. 


About Insilico Medicine

Insilico Medicine, a global clinical stage biotechnology company powered by generative AI, is connecting biology, chemistry, and clinical trials analysis using next-generation AI systems. The company has developed AI platforms that utilize deep generative models, reinforcement learning, transformers, and other modern machine learning techniques for novel target discovery and the generation of novel molecular structures with desired properties. Insilico Medicine is developing breakthrough solutions to discover and develop innovative drugs for cancer, fibrosis, immunity, central nervous system diseases, infectious diseases, autoimmune diseases, and aging-related diseases. 

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