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Reeling Europe Crushed By Merkel’s Catastrophic Legacy

Reeling Europe Crushed By Merkel’s Catastrophic Legacy

By Bas van Geffen and Elwin de Groot, strategists at Rabobank

Sometimes, art is more…

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Reeling Europe Crushed By Merkel's Catastrophic Legacy

By Bas van Geffen and Elwin de Groot, strategists at Rabobank

Sometimes, art is more than just the canvas or sculpture. Many will probably remember the Banksy painting that –as soon as it was sold at auction– self-destructed by means of a paper shredder that was hidden in the frame.

When she left office after 16 years, a local museum unveiled a statue of Merkel on horseback to commemorate her reign. The artist left it to the viewer whether the statue was created out of appreciation or whether it was intended to be ironic. It drew plenty of ridicule at the time.

Last week, the statue collapsed under its own weight. As with most things done during the Merkel-era, the statue was built as efficiently as possible, but not very durable: it was hollow and 3D-printed out of concrete that could neither withstand the external forces of nature, nor support its own weight. This probably wasn’t intentional, but if it were it would be a brilliant artistic rendition of Merkel’s leadership and the aftermath the country is dealing with.

Since her leadership, European has seen supply chains collapse, with the future of German industry now at risk as EU leaders scramble to source more reliable sources of energy and inputs. And thanks to the lack of a German, or European, strategic global view, external forces like China have eroded away the continent’s power on the global stage and the competitiveness of Germany’s industrial engine: the car sector.

Post-Merkel, Europe has woken up, and pushed by Germany the Commission is investigating whether government subsidies are helping cheap Chinese EVs being dumped on the European market – though one can wonder why a probe into the matter is even necessary. A Bloomberg Opinion columnist argues today that China made –and subsidized– EVs should actually be welcomed by the EU, as it also lowers the price European consumers have to pay for their cars, and may therefore lower the cost of the energy transition. Well, obviously. But as we have repeated ad nauseam in this daily, the price of EVs and the likes is comprised of so much more than simply the monetary value of the product. Germany learned that lesson the hard way when the Russian gas supply got cut off.

The inflationary effects of the energy crisis haven’t even fully faded yet, as new commodity price increases are bringing renewed inflation risks to the fore. Oil prices continued to edge higher yesterday, with the nearest Brent future piercing through the $95/bbl level. Arguably, the key driver of this development has been the decision by Saudi Arabia and Russia in June to extend their production cuts. Speaking at the 5-day World Petroleum Congress in Calgary yesterday, Saudi energy minister Prince Abdulaziz bin Salman defended that decision, arguing that it was necessary to curtail volatility.

But there is more to it. Perhaps the perceived tightness of the market (which can be gauged from the backwardation in the market: futures prices trading lower than spot and nearest future prices) is also a sign that demand in some parts of the world, such as the US, has remained more resilient than expected just a while ago. Yet there are also structural forces, as our own energy analyst Joe DeLaura points out in a Webinar for Rabobank clients today. He basically sees 2010 to 2019 as an anomaly: a time of artificially low volatility and interest rates, and an oversupply of cheap energy. He believes a dramatic shift will mark the coming decade. Underinvestment in energy supply and infrastructure forms the basis of this new period of market volatility as humanity grapples with the clash between old fossil fuels and renewable energy. Worldwide investment in new oil and gas fields, gathering systems, refineries and exploration has dropped by over one-third. The relative oversupply of the 2010s kept volatility artificially low but that era is over, according to Joe. Oil and gas is a capital intensive business on the upstream side, so rising interest rates discourage new drilling, exploration and building gathering systems or refineries that take decades to pay back.

Meanwhile, climate change leads to a rising frequency of extreme weather conditions and is impacting things like peak electricity demand (this year’s scorching summer in several parts of the world also boosted demand for air conditioning), impairs nuclear cooling capacity and leads to hydroelectric power disruptions and transport challenges caused by low water levels in key hubs such as the German Rhine river and the Panama Canal.

In other words, higher fossil fuel prices are likely to be with us for the foreseeable future. That may be another incentive to accelerate investment in alternative energy sourced but is also likely to keep (energy) inflation more elevated during this transition. Global central banks, pay attention!

These developments drove some of the weakness in market sentiment. Equity markets slipped (Euro STOXX -1.15%), whilst European rates rose with a slight bear flattening move. The (modest) increase in risk aversion was visible in a slight widening of sovereign spreads.

The 10y US Treasury yield stayed within a whisker of its recent (post-pandemic) record of 4.337%, as concerns over a possible US government shutdown over the coming months are mounting again. Yes, we hear you thinking, “hang on a minute, I thought Republicans and Democrats had reached an agreement earlier this year, so what is this fuss all about?”

Well, as our US strategist Philip Marey points out, when the US debt limit was raised early June, it was assumed that a government shutdown later this year was averted as well. After all, the debt limit deal included sequestration in the form of a 1% cut in spending if all appropriations bills for fiscal year 2024 (which starts on October 1, 2023) are not passed by the end of this calendar year. This would surely encourage both parties to compromise on the necessary spending bills before December 31. However, we still need a continuing resolution to keep the government funded from October 1 until the end of the year or at least until agreement is reached on the budget for FY2024. Given the constructive bipartisan deal in June, a continuing resolution was supposed to be a stopgap measure that both parties would agree on. However, the House Freedom Caucus now wants something in return for a continuing resolution and this could be difficult to swallow for the Democrats. On Sunday, the Freedom Caucus and the more moderate Main Street Caucus came up with their own short term proposal, which would extend government funding until October 31. Yet, this proposal would cut discretionary spending levels by about 8% for most government programs, except defence and veterans programs, and will almost certainly be rejected in the Democrat-controlled Senate and thus cause a stalemate that could ultimately lead to a government shutdown on October 1. So, a deal that wasn’t a water-tight deal after all!

Closing yesterday’s European session, Reuters startled money markets with an unexpected article on possible future ECB policy tweaks. Several policymakers suggested that the minimum reserve requirement could be increased from 1% to as much as 4% of banks’ deposits. This would raise the minimum reserves to some €660 billion from the current €165, an amount that we believe is significant enough to pressure money market rates.

When the ECB stopped paying interest on minimum reserves, we speculated that more changes could be in the cards as the ECB is looking to cut the costs of its monetary policy. At the current deposit facility rate of 4%, the €495 billion increase would save the central bank €19.8 billion in interest costs annually. However, this would shift the burden of excess liquidity to banks, who, in turn, may decide to pass on these costs in the form of higher lending rates or a lower passthrough of rate hikes to the rate banks pay on customer deposits.

Tyler Durden Tue, 09/19/2023 - 10:15

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

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

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

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

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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