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Psaki’s “No Economist” Assertion Draws Some Inflation Dissenters

Psaki’s "No Economist" Assertion Draws Some Inflation Dissenters

Authored by Phillip Wegmann via RealClearPolitics.com,

It costs more to pay rent each month and to fill up a tank of gas every week and to put food on the table every day….

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Psaki's "No Economist" Assertion Draws Some Inflation Dissenters

Authored by Phillip Wegmann via RealClearPolitics.com,

It costs more to pay rent each month and to fill up a tank of gas every week and to put food on the table every day.

So, at a moment when the dollar doesn’t go as far as it once did, should Americans worry that injecting another $1.85 trillion into the economy might increase inflation?

No, Jen Psaki told Peter Alexander this week.

And why not?

Well, the White House press secretary explained to the NBC News correspondent, “because no economist out there is projecting that this will have a negative impact on inflation.”

Of course, that isn’t true.

There are many economists out there and some of them do warn that the Build Back Better plan will further increase the prices that dog consumers and can doom the careers of politicians. But the existence of economists with views contrary to those held by the president’s National Economic Council isn’t entirely the point. At issue more broadly is the fulfillment of something Joe Biden said back in April 2020. 

“Milton Friedman,” he said as a candidate, “isn’t running the show anymore.” And nothing could be truer now that Biden is the president.

As the first year of his administration nears completion, inflation has emerged as an unwelcome accompaniment. It has not hit the double-digit levels that propelled Friedman, the late Nobel Prize laureate who warned about the dangers of an unchecked money supply, to prominence in the late 1970s. But consumer prices jumped 6.2%, years over year, in October, the biggest such increase in three decades.

“There's no doubt inflation is high right now. It's affecting Americans' pocketbooks. It's affecting their outlook,” Brian Deese, director of the National Economic Council, told Chuck Todd on NBC’s “Meet the Press” Sunday.

“But it's important that we put this in context. When the president took office, we were facing an all-out economic crisis.”

The White House argues that those inflation numbers are transitory and will eventually come down. The temporary pain that consumers feel, they contend, is the result of pent-up demand and kinks in the supply chain, not because of excesses in government spending. Two of the president’s other economic advisers, Jared Bernstein and Ernie Tedeschi, dismissed early inflation warnings and predicted that price increases “should fade over time as the economy recovers from the pandemic.” That was in April.

But lingering inflation hasn’t lessened the administration's appetite for spending— witness the $1.2 trillion infrastructure plan signed into law this week or the $1.85 Build Back Better plan that’s still pending in Congress. The White House has shooed away concerns in recent weeks by pointing to a letter from 17 Nobel laureates who predict that the spending “will ease longer-term inflationary pressures” and to analysis by Moody’s Investor Services that reached the same conclusion.

“They're all wrong,” said Steven Hanke, a professor of applied economics at Johns Hopkins University. He doesn’t deny that supply chains are backed up or that there may be pent-up demand. But Hanke told RealClearPolitics that those are “ad hoc excuses.”

Inflation is being driven by “the money supply which has increased by over 35% since COVID, an unprecedented explosion since World War II.”

Along with John Greenwood, chief economist at the investment management company Invesco in London, Hanke likens the situation to a bathtub with three drains. The first two drains are economic growth and savings. In the absence of inflation, money that flows into the tub easily flows out of the tub through those two drains.

“But if more money is flowing in than out,” the two reasoned in a recent Wall Street Journal op-ed, “the level of money rises. It will eventually reach the overflow, which is the inflation drain.”

An alumnus of the Reagan administration and a fervent supply-sider, Hanke notes that between December 2019 and August 2021, the supply of dollars in circulation grew by $5.5 trillion, “a stunning 35.7% increase in only a year-and-a-half, driven primarily by the Federal Reserve’s purchase of Treasury and mortgage-backed securities.”

Enter Biden and his human-infrastructure package.

In Detroit on Wednesday, the president argued that his plan “is fully paid for” and does not increase the deficit “one single cent.” The spending plan would be paid for by new taxes on top earners who make more than $400,000, the administration insists. That might be true, if the bill that reaches Biden’s desk includes those tax increases, an unpopular possibility currently being debated in Congress. But that’s a big if: Sen. Joe Manchin, a linchpin for passage in the upper chamber, has repeatedly expressed his concerns.

There are other snags.

As the New York Times reports, the head of the Congressional Budget Office warned Monday that cracking down on tax evaders would produce about $120 billion, not the $400 billion Biden is relying on to cover some of the spending. While a full formal analysis is still expected, Hanke and others argue that deficit spending “makes the Fed’s job a lot more difficult” because when the Treasury Department issues new bonds to cover that debt, “what are they going to do? Say, ‘Oh, no — we’re not going to buy anymore.’ They are buying those bonds. That's why the balance sheet of the Fed gets bigger and bigger. And that's why the money supply gets bigger and bigger.”

The notion that increased government spending doesn’t carry the risk of inflation, said Michael Jay Boskin, an economics professor at Stanford University's Hoover Institution, “is economically illiterate.” Increased government spending adds to the total demand for goods and services, he added, “such that we are risking inflation, and the Biden administration seems to be trying divert attention. There is a risk that inflation may become entrenched. It's hard to imagine a worse outcome than an inflation spiral.”

Chairman of the president’s Council of Economic Advisers from 1989 to 1993, Boskin notes that “a very large fraction” of the relief payments the federal government sent out in 2020 and 2021 was either saved or has yet to be spent. “That is a lot of government spending floating around the system now in the pockets of consumers and the budgets of state and local governments,” waiting to further flood the economy.

On the question of inflation, illustrations of the concept abound. A flood of dollars chasing too few goods. The monetary supply as an overflowing bathtub. But anti-tax conservative Stephen Moore prefers a more colorful one: “dumping gasoline on a forest fire.” A member of former President Trump’s economic task force, Moore questions the Biden administration’s explanation for inflation, specifically the idea that the problem is pent up demand post-pandemic. “Because if that’s the case, why did we spend $2 trillion earlier this year,” he said of the American Rescue Plan. “It doesn’t make any sense.”

The White House likely won’t heed his warnings or those of any naysayers. Analysis from Reagan and Bush alumni — let alone Trump advisers — certainly isn’t in fashion in this administration, especially since, as Biden noted more than a year ago, Milton Friedman “isn’t running the show anymore.”

Tyler Durden Fri, 11/19/2021 - 15:01

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Spread & Containment

TV Show Mysteriously Deletes Poll After Vast Majority Oppose Mandatory Vaccination

TV Show Mysteriously Deletes Poll After Vast Majority Oppose Mandatory Vaccination

Authored by Paul Joseph Watson via Summit News,

A major morning television show in the UK deleted a Twitter poll asking if vaccines should be made mandatory..

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TV Show Mysteriously Deletes Poll After Vast Majority Oppose Mandatory Vaccination

Authored by Paul Joseph Watson via Summit News,

A major morning television show in the UK deleted a Twitter poll asking if vaccines should be made mandatory after the results showed that 89% of respondents oppose compulsory shots.

Yes, really.

Good Morning Britain, which often tries to set the news agenda, posted the poll which asked the public, “With Omicron cases doubling every two days, is it time to make vaccines mandatory?”

The last screenshots Twitter users were able to obtain before the poll was wiped showed 89% oppose mandatory vaccinations, with just 11% in favor after a total of over 42,000 votes.

People demanded to know why the poll had been pulled, although it wasn’t exactly hard to guess.

Why did you delete this poll, is it because you were asked? Or because it shows the people don’t support this s**t, this tyrannical future your colleagues seem to want. We see you,” commented one respondent.

“Guess that wasn’t the answer they were looking for,” remarked another.

Good Morning Britain has failed to explain why it removed the poll.

However, it’s unsurprising given that the broadcast has been a vehicle for pushing pro-lockdown messaging since the start of the pandemic.

For most of that time, it was hosted by Piers Morgan, an aggressive proponent of lockdowns, mandatory vaccines and face masks.

The show also regularly features Dr. Hillary Jones, someone who at the start of the pandemic warned that face masks could make the spread of the virus worse, before getting the memo and doing a complete 180.

*  *  *

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Tyler Durden Thu, 12/09/2021 - 03:30

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Science

Life Sciences Expansions Take Off as 2021 Wraps Up

Several life sciences companies and life science-focused real estate firms announced expansion plans as 2021 comes to an end.

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Life Sciences Expansions Take Off as 2021 Wraps Up

Several life sciences companies and life science-focused real estate firms have announced expansion plans as 2021 comes to an end. Here’s a look.

Novavax to Expand Maryland Campus

Novavax, on the cusp of getting its COVID-19 vaccine authorized in numerous countries around the world, is expanding its footprint in Gaithersburg, Md., where it is headquartered. The European Medicines Agency (EMA) is expected to authorize the company’s vaccine soon, and so is the U.S. Food and Drug Administration (FDA). Czechia has already ordered 370,000 doses, with deliveries expected at the beginning of 2022. The company also has a deal with Fujifilm Diosynth Biotechnologies to manufacture millions of doses of the Novavax vaccines at its facilities in Billingham, U.K., with a £400 million investment in expansion.

Four Corners Acquired 150,000-Square-Foot Complex in Belmont, Calif.

Four Corners Properties acquired a 150,000-square-foot office building in Belmont, Calif., called the Shoreway Innovation Center. The seller was Westlake Group. Westlake bought it in 2016 for $61 million. The company plans to expand its use for life sciences, noting that 82% of it is currently leased to a mix of tenants with an average of less than three years lease term remaining.

“Shoreway Innovation Center offers the opportunity to bring office and life sciences space to a market where tenant demand is far outpacing available supply,” said Mike Taquino, executive vice president of CBRE’s Northern California Capital Markets team.

Genentech Leases Building Under Construction in South San Francisco

Source: BioSpace

Boston Properties and Alexandria Real Estate Equities are leasing a building under construction in South San Francisco to Genentech. It will be the first phase of a life sciences campus. The building is at 751 Gateway and is 229,000 square feet. The campus will be called Gateway Commons and is a joint venture between the two real estate firms. They expect initial occupancy toward the end of 2024. Genentech has been headquartered in South San Francisco for forty years, with a large corporate headquarters made up of 4.7 million square feet of five neighborhood hubs. The new site is about one mile’s distance from their main campus.

Mispro Biotech to Open New Facility in North Carolina in Early 2022

Mispro Biotech Services plans to open a new facility in Research Triangle Park (RTP), N.C., in early 2022. Mispro is a leading contract vivarium organization (CVO). The new facility, a full-service vivarium research facility, will be central to one of RTP’s biopark campuses.

“Since we first opened our doors here in 2013, we have seen incredible growth in the RTP cluster,” said Philippe Lamarre, chief executive officer of Mispro. “The time was right to expand into a new facility with more space and modern amenities where we can support the influx of biotechs who are seeking in vivo lab space.”

Laura Gunter, president of NCBIO, representing the life sciences industry in North Carolina, noted, “Mispro has become a cornerstone of the Triangle ecosystem as contract research and support companies are finding increased favor. Biotechs of all sizes and therapeutic disciplines are focusing more on their core competencies, which is opening the door to innovation like Mispro’s contract vivarium option. We are pleased to see their decision to expand here and support more North Carolina companies.”

BioSpace source:

https://www.biospace.com/article/life-science-companies-announce-expansion-plans-as-they-wrap-up-2021

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Government

Over 170 companies delisted from major U.S. stock exchanges in 12 months

  Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies….

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Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies.

According to data acquired by Finbold, a total of 179 companies have been delisted from the major United States exchanges between 2020 and 2021. In 2021, the number of companies on Nasdaq and the New York Stock Exchange (NYSE) stands at 6,000, dropping 2.89% from last year’s figure of 6,179. In 2019, the listed companies stood at 5,454.

NYSE recorded the highest delisting with companies on the platform, dropping 15.28% year-over-year from 2,873 to 2,434. Elsewhere, Nasdaq listed companies grew 7.86% from 3,306 to 3,566. Data on the number of listed companies on NASDAQ and NYSE is provided by The World Federation of Exchanges.

The delisting of the companies is potentially guided by basic factors such as violating listing regulations and failing to meet minimum financial standards like the inability to maintain a minimum share price, financial ratios, and sales levels. Additionally, some companies might opt for voluntary delisting motivated by the desire to trade on other exchanges.

Furthermore, the delisting on U.S. major exchanges might be due to the emergence of new alternative markets, especially in Asia. China and Hong Kong markets have become more appealing, with regulators making local listings more attractive. Over the years, exchanges in the region have strived to emerge as key players amid dominance by U.S. equity markets. As per a previous report, the U.S. controls 56% of the global stock market value.

A significant portion of the delisted companies also stems from the regulatory perspective pitting U.S. agencies and their Chinese counterparts. For instance, China Mobile Ltd, China Unicom, and China Telecom Corp announced their delisting from NYSE, citing investment restrictions dating from 2020.

Worth noting is that the delisting of firms was initiated due to strict measures put in place by the Trump administration. The current administration has left the regulations in place while proposing additional regulations. For instance, a recent regulation update by the Securities Exchange Commission requiring US-listed Chinese companies to disclose their ownership structure has led to the exit of cab-hailing company Didi from the NYSE.

Impact of pandemic on the listing of companies

The delisting also comes in the wake of the Covid-19 pandemic that resulted in economic turmoil. With the shutdown of the economy, most companies entered into bankruptcies as the stock market crashed to historical lows.

Lower stock prices translate to less wealth for businesses, pension funds, and individual investors, and listed companies could not get the much-needed funding for their normal operations.

At the same time, the focus on more companies going public over the last year can be highlighted by firms on the Nasdaq exchange. Worth noting is that in 2020, there was tremendous growth in special purpose acquisition companies (SPACs), mainly driven by the impact of the coronavirus pandemic. With the uncertainty of raising money through the traditional means, SPACs found a perfect role to inject more funds into capital-starving companies to go public.

From the data, foreign companies listing in the United States have grown steadily, with the business aiming to leverage the benefits of operating in the country. Notably, listing on U.S. exchanges guarantees companies liquidity and high potential to raise capital. Furthermore, listing on either NYSE or Nasdaq comes with the needed credibility to attract more investors. The companies are generally viewed as a home for established, respected, and successful global companies.

In general, over the past year, factors like the pandemic have altered the face of stock exchanges to some point threatening the continued dominance of major U.S. exchanges. Tensions between the US and China are contributing to the crisis which will eventually impact the number of listed companies.

 

Courtesy of Finbold.

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