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Research: OpenText is Focused About Being Above the Pandemic Cloud

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COVID-19 Initial Impact Report​

OpenText Corporation

NASDAQ: OTEX

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Analyst Note
Updated May 26, 2020

COVID-19 Net Benefit Score: +9.01

Financial Stress Test Ratings:

Free Cash Flow: A

Interest Coverage: B

Summary

OpenText is Canada’s largest software company, an offshoot of a University of Waterloo project that saw the development of technology that aimed to index the Oxford English Dictionary some 30 years ago. The Company focuses on developing and selling enterprise information management (EIM) software and solutions; in other words, supporting businesses in their decision-making processes and/or day-to-day operations that require the unrestricted availability of knowledge. OpenText is able to overcome traditional IT-related barriers to managing information at the enterprise level, offering platform and developer extensions, process suites, emailing, content and records management, B2B integration, and business planning and modeling solutions.

Market Data

Financial Data Stated in Millions

Share
Price

36.28

Market
Capitalization

9,751

Net

Debt

-1,674

Total

Debt

2,615

Cash &

Equivalents

941

Enterprise

Value

11,427

Basic Shares

O/S

268.78

Stock Chart

opentext-chart-20200526

OpenText is Focused About Being Above the Pandemic Cloud

OpenText Corporation (“OpenText” or “the Company”) is arguably one of the best positioned companies with respect to overcoming Covid-19 pandemic-related issues. The Company earns its revenue mainly from SaaS and Cloud based operations by allowing other companies to utilize the broad array of information services it creates. As an important player in the growing world of Information Technology (IT) and Consulting, OpenText is exactly the type of business model that can both survive and thrive.

 

➤ Key Factors: The increasing WFH/SAH trends drive the greater need for reliable online access to cloud services for many different types of businesses, which is something that OpenText can undoubtedly meet. The concept of in-person business is not applicable to the Company, so for the over 12,000 people it employs worldwide there are no obvious direct contamination concerns, both from within and outside of the organization.

 

➤ Financial Stress Test: The Company shows strong cash flows and low debt levels, so can rightly be considered a low risk option and fully capable of servicing its day-to-day operations.

OpenText Pandemic Impact Factors Review

NXTanalytic considers 7 factors and 30 specific indications that we believe will impact companies during and after the Covid-19 pandemic. These factors include: Online Business Profiles, Dealing with Consumers In Person, Effect of Increased Health Regulations, Supply Chain Risks, Travel, Changes and Disruption in Tourism, Travel and Hospitality, Increased Demand for Health Care and Health Safety, WFH and SAH.

COVID-19 Factor Analysis

Net

Benefit

POSITIVE

Total Regression

Score

8.51

Covid-19

Risk Rate

-0.5

Covid-19

Benefit Rate

9.01

Pandemic Impact Factor Analysis

OpenText is expected to succeed in the face of the Covid-19 pandemic. The Company’s revenues have grown year over year in every segment (as per their annual report 2019), most crucially the ARR (Annual Recurring Revenue) (+6.2%) and Cloud Revenues (10.8%), up from 2018. It has also recognized the need to have a reliable network of qualified and trusted suppliers and partners, and on April 21, 2020, they announced that it was integrating Dun & Bradstreet data and insights in order to build trust and minimize risk in supply chains. This move is indicative of the Company having the foresight and confidence to mitigate and even capitalize on the ever-changing global business environment.

Relevant Factors

➤ Online Presence: Given its unrestricted ability to offer a wide range of proprietary technology that is highly coveted by an equally wide range of organizations (e.g. Large companies, government agencies, professional service firms), OpenText is positioned to be a company that will not be impeded by this (or even future) pandemics as it benefits from the continued upturned trend of business being done virtually.

 

➤ WFH/SAH: The Company has a direct interest in WFH & telecommuting growth trends. This was stated as one of their key drivers in a recent corporate presentation and is duly reflected in their cloud business model. This presents nothing but an upside for OpenText.

 

➤ In Person Businesses (Crowds & Groups): This factor in the context of OpenText is irrelevant so only adds to the “immunity” of the Company from the pandemic.

Pandemic Factor Screening and Scoring

NXTanalytic research is based on the thesis that consumer and business behaviour and practices will be changed significantly as a result of the pandemic and its aftermath. We have developed a group of seven major factors that we believe indicate whether a company has an increased risk or reward profile.

 

We approach our analysis in the context of three time periods:

 

1. Near term effect of the pandemic

2. A Resulting Recession/Bear Market

3. Longer Term Psychological Effects: Changes in consumer and business behavior and practices as a result of the pandemic.

Scoring and Rating for Factor Exposure

We objectively score businesses based on positive and negative factors and how significantly they may be affected by each applicable factor. Our model generates a total regression score by generating a coefficient of the risk and reward scores given to the company by an experienced analyst.

 

We generate a Total Regression Score, a Covid-19 Risk Rate and a Covid-19 Benefit Rate.

➤ Online Businesses: Due to social distancing and lockdowns and Work From Home, businesses that operate online, or produce the tools for companies to adapt to more demand for online services should experience a surge in demand due to the coronavirus, Covid-19 outbreak. Consumers will more rapidly move online across many categories. Trends already in place will accelerate. Companies whose businesses are online or are rapidly moving online are better prepared to serve the market while those based on bricks and mortar are more likely to be challenged. 

➤ Dealing with Consumers In Person: Businesses that deal with large numbers of people in close proximity to each other will be negatively affected long term. Regardless of how long the pandemic will continue, its psychological, economic and financial effects, have inevitably altered the perception of risk from exposure to large group settings. Consumers are going to avoid gathering in large groups – particularly individuals over 60. We believe consumers will be fearful of the virus and we are assuming that even when the rate of infection has slowed through social distancing and other “curve flattening” efforts, the virus will be a threat for more than a year or until widespread vaccination has taken place. Even after vaccination efforts minimize the immediate threat consumer behavior will be changed long term and concern over future pandemics will be heightened for many years.

➤ Increased Health Regulations and Restrictions: Restrictions on travel and trade as a result of the pandemic are likely to remain in place for months or years and public health regulations will become stricter and more widespread. It’s highly probable that enhanced screening, permit and visa requirements, reductions in ease of travel and transport of goods will be impacted or implemented. Governments, in an effort to restore consumer confidence, will enforce new regulations designed to protect consumers from the current pandemic and future pandemics will overshoot and result in impairing businesses who rely on international supply chains, movement of large numbers of people, or are otherwise perceived as presenting a high risk of infection to consumers.

➤ Supply Chain and Cross Border Risks: The fact the virus can remain alive for many days on inanimate objects and surfaces is a good example of a pending supply chain issue. Perishable product supply chains designed to move items from producer to consumer in days could be significantly impacted. Overall we believe that businesses that ship goods internationally or rely on global supply chains are at risk of business interruption as the pandemic circulates globally. Further, companies with long international supply chains in countries with poor healthcare systems will likely be pressured to replace suppliers and build new supply chains closer to home markets in order to avoid new border restrictions and the potential of localized lockdowns put in place to handle future outbreaks.

➤ Travel, Tourism, Hospitality and Entertainment: The most obviously impacted sectors are businesses on the front line of day to day consumer interaction. Restaurants, coffee shops, event venues, bars, pubs, hotels, resorts, etc could experience a prolonged or permanent change in consumer demand or be required to spend significantly on technologies and services designed to mitigate consumer concerns over health risks. Consumers will likely continue to avoid contact with crowds or reduce visits to brick and mortar hospitality and entertainment focused businesses. Companies in these sectors will need to change business practices and deploy technologies and systems designed to protect customers – many of these do not exist yet or are expensive.

➤ Work From Home and Stay At Home: The most obvious winners are companies who enable consumer cocooning or Work From Home (WFH) and Stay at Home (SAH) behaviour. As these social and business trends become entrenched, demand for a range of new solutions for managing a distributed workforce will provide existing platform companies and new entrants with opportunities to grow market share and fill demand. Companies not offering WFH opportunities will suffer, compromising their ability to attract the best employees. The delivery economy, pioneered by the likes of Amazon.com and any company that focuses on in home exercise, consumer electronics, home entertainment and ecommerce are well positioned to profit from a long term trend towards SAH behaviour. The trend towards non-brick and mortar retail, will accelerate.

➤ Health, Medicine & Safety: Companies focused on the health and safety of consumers and crowds will be positioned to assist businesses who will require new and robust health security solutions in order to attract customers. Heightened focus on health and virus risks will likely spur expenditures on antiviral medications and treatments, vaccines, screening systems and devices, rapid testing, containment and quarantine solutions and services, and telemedicine. Demand for antimicrobial or antiviral materials or other “bio tech materials” and products is likely to be strong in a post pandemic world.

Financial Stress Test

FINANCIAL RATIOS RATINGS
letter_grade_1

Excellent
Strong
Satisfactory
Poor
Low Quality
High Risk

Free Cash Flow: A

FINANCIAL RATIOS RATINGS
letter_grade_2

Excellent
Strong
Satisfactory
Poor
Low Quality
High Risk

Interest Coverage: B

Financial Ratios

FYE –

Dec. 31st

2019 A

Financial

Leverage

2.04 X

Debt-to-

Capital

0.40 X

Debt-to-

Assets

0.33 X

Debt-to-

Equity

0.67 X

EBIT/

Interest

4.12 X

EV/

FCF

14.06 X

NXTanalytic reviews a series of financial measures designed to provide a snapshot of the company’s financial health and ability to deal with the challenges or opportunities created by the pandemic, the recession and post pandemic economic environment.

Our opinion

The Company’s business model is at a low risk for disruption (even before the pandemic) and has looked to leverage itself by way of seeking opportunities to expand upon its services; for instance, on April 30, 2020, OpenText announced a Cloud Agreement with Amazon Web Services (AWS), a collaboration that will see the expansion of workload migration options for OpenText customers whilst bringing market-leading information management applications to AWS. Such sound and globally strategic business ventures can only mean OpenText will be going from strength-to-strength.

 

The financial ratios show healthy-looking figures; Debt-to-Capital at 0.4 X, Debt-to-Equity at 0.67 X, and Debt-to-Assets at 0.33 X; all low and indicative of a company that can meet its obligations. This leaves no concerns about the leverage of the Company and its potential to seek more financing to expand or even take on more debt for a more defensive position during the pandemic (if it so wished). In addition OpenText has an interest coverage ratio of 4.12 X which is further proof that it is in good standing and is able to meet its interest expenses.

Stress Test Highlights

➤ Debt-to-Assets: OpenText has low leverage ratios that indicate good balance sheet health. The Debt-to-Assets ratio is especially positive at 0.33 X, showing that the assets of the Company are three times that of the market value of the total debt.

 

➤ EV/FCF Ratio: OpenText has a high Enterprise Value-to-Free Cash Flow ratio at 14.06 X, suggesting it is a company that is potentially overvalued (i.e. Investors may feel there is no great value or discount in purchasing its stock).

 

➤ Interest Coverage: OpenText has a high Interest Coverage ratio at 4.12 X (as per its most recent annual report in 2019). Its ability to service debt effectively and regularly is secure, lowering overall financial risk.

Financial Stress Test Analysis

NXTanalytic completes a financial analysis of each company using data taken from the most recently audited financial statements. Our goal is to provide a snapshot of a company’s financial condition and ability to survive a prolonged period of reduced growth, and/or finance growth or restructuring to take advantage of new opportunities.

Cash Flows as a Focus of Screening

Debt Servicing

➤ Interest Coverage Ratio = EBIT / Interest Expense: A powerful measurement of the ‘survivability’ of a corporation. It reflects the ability of a company to pay interest on the outstanding debt and is thus an important assessment of short-term solvency. If the ratio is underneath 1.0 X, this means that the company cannot currently cover interest charges on its debt from current operational income. This could mean that the company is funding itself through the sale of assets or further financing; which are unsustainable. The higher the ratio, the higher probability to survive in the future financial hardship.

Free Cash Flow Valuation

➤ Interest Coverage Ratio = EBIT / Interest Expense: A powerful measurement of the ‘survivability’ of a corporation. It reflects the ability of a company to pay interest on its outstanding debt and is thus an important assessment of short-term solvency. If the ratio is underneath 1.0 X, it indicates the company cannot currently cover interest charges on its debt from operational income. This could mean that the company is funding itself through the sale of assets or further financing; which are unsustainable measures. The higher the ratio, the higher the company’s ability to survive financial hardship.

➤ EV/FCF Ratio = Enterprise Value / Free Cash Flow: Based on our debt servicing thesis we primarily value companies based on their cash flows. We rely on the EV/FCF ratio to assess the total valuation of the company in relation to its ability to generate cash flows. Enterprise Value is the value of the entire company, both its debt and traded equity. When this is divided by its Free Cash Flow we see how much we are paying to buy that cash flow. The lower the ratio the cheaper it is to “buy” the cash flows of the company.

Leverage Ratios

Debt ratios are classic balance sheet health measuring tools used to indicate potential risks to future financing ability (ie. violating debt covenants) or as a barometer of the defensive position of the company if cash flows are ever an issue. They are long-term solvency metrics and reflect the degree to which the company is financing its operation through debt versus equity. If a company has poor leverage ratios (too much debt), it might need to aggressively finance its growth through debt and as a result require more and more cash flow from operations to adequately service its debt. Our view is that companies with less debt are more likely to be able to withstand challenges or fund opportunities created by the pandemic.

➤ Financial Leverage Ratio = Total Debt / Total Equity: The Financial Leverage Ratio is a measure of the degree to which a company is financing its operations through debt. More specifically, it reflects the ability of shareholder equity to cover all outstanding debts in the event of a business downturn.

➤ Debt-to-Capital Ratio = Total Debt / (Total Debt + Total Shareholder’s Equity): The Debt-to-Capital ratio measures the amount of financial leverage in a company. This tells us whether a company is prone to using debt financing or equity financing. A company with a high Debt-to-Capital ratio, compared to a general or industry average, may be impared due to the cost of servicing debt and therefore increasing its default risk.

➤ Debt-to-Equity Ratio = Total Debt / Total Shareholder’s Equity: A high Debt-to-Equity ratio generally indicates that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of additional interest expense. If the company’s interest expense grows too high, it may increase the company’s chances of a default or bankruptcy.

➤ Debt-to-Assets Ratio = Total Debt / Total Assets: The Debt-to-Assets ratio shows the degree to which a company has used debt to finance its assets. This ratio can be used to evaluate whether a company has enough assets to meet its debt obligations. A ratio greater than 1 indicates that the entire company’s assets are worth less than its debt.

CONFLICT OWNERSHIP RELATED DISCLOSURES

Does the Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer?

No

Does the Analyst or household member serve as a Director or Officer or Advisory Board Member of the issuer?

No

Does NXTanalytic or the Analyst have any actual material conflicts of interest with the issuer?

No

Does NXTanalytic and/or one or more entities affiliated with NXTanalytic beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer?

No

Has the Analyst had an onsite visit with the Issuer within the last 12 months?

No

Has the Analyst been compensated for travel expenses incurred as a result of an onsite visit with the Issuer within the last 12 months?

No

Has the Analyst received any compensation from the subject company in the past 12 months?

No

U.K. DISCLOSURES

This research report was prepared by NXTanalytic Inc., which is not a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. NXTANALYTIC IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. The contents hereof are intended solely for the use of, and may only be issued or passed onto persons with which NXTanalytic has given consent. This report does not constitute advice, an offer to sell or the solicitation of an offer to buy any of the securities discussed herein.

CANADIAN & U.S. DISCLOSURES

This research report was prepared by NXTanalytic, which is not a registrant nor is it a member of the Investment Industry Regulatory Organization of Canada. This report does not constitute advice, an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. NXTanalytic is not a registered broker-dealer in the United States or any country. The firm that prepared this report may not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts.

INFORMATION & INTELLECTUAL PROPERTY

All information used in the publication of this report has been compiled from publicly available sources that NXTanalytic believes to be reliable. The opinions, estimates, and projections contained in this report are those of NXTanalytic Inc. (“NXT”) as of the date hereof and are subject to change without notice. NXT makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; however, NXT makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained herein and accepts no liability whatsoever for any loss arising from any use of or reliance on this report or its contents. Information may be available to NXT that is not herein. This report is provided, for informational purposes only and does not constitute advice, an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction. Its research is not an offer to sell or solicitation to buy any securities at any time now, or in the future. Neither NXT nor any person employed by NXTanalytic accepts any liability whatsoever for any direct or indirect loss resulting from any use of its research or information it contains. This report may not be reproduced, distributed, or published without any the written expressed permission of NXTanalytic Inc. and/or its principals.

 

©2020, NXTanalytic. All rights reserved.

 
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Government

CDC Warns Thousands Of Children Sent To ER After Taking Common Sleep Aid

CDC Warns Thousands Of Children Sent To ER After Taking Common Sleep Aid

Authored by Jack Phillips via The Epoch Times (emphasis ours),

A…

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CDC Warns Thousands Of Children Sent To ER After Taking Common Sleep Aid

Authored by Jack Phillips via The Epoch Times (emphasis ours),

A U.S. Centers for Disease Control (CDC) paper released Thursday found that thousands of young children have been taken to the emergency room over the past several years after taking the very common sleep-aid supplement melatonin.

The Centers for Disease Control and Prevention (CDC) headquarters in Atlanta, Georgia, on April 23, 2020. (Tami Chappell/AFP via Getty Images)

The agency said that melatonin, which can come in gummies that are meant for adults, was implicated in about 7 percent of all emergency room visits for young children and infants “for unsupervised medication ingestions,” adding that many incidents were linked to the ingestion of gummy formulations that were flavored. Those incidents occurred between the years 2019 and 2022.

Melatonin is a hormone produced by the human body to regulate its sleep cycle. Supplements, which are sold in a number of different formulas, are generally taken before falling asleep and are popular among people suffering from insomnia, jet lag, chronic pain, or other problems.

The supplement isn’t regulated by the U.S. Food and Drug Administration and does not require child-resistant packaging. However, a number of supplement companies include caps or lids that are difficult for children to open.

The CDC report said that a significant number of melatonin-ingestion cases among young children were due to the children opening bottles that had not been properly closed or were within their reach. Thursday’s report, the agency said, “highlights the importance of educating parents and other caregivers about keeping all medications and supplements (including gummies) out of children’s reach and sight,” including melatonin.

The approximately 11,000 emergency department visits for unsupervised melatonin ingestions by infants and young children during 2019–2022 highlight the importance of educating parents and other caregivers about keeping all medications and supplements (including gummies) out of children’s reach and sight.

The CDC notes that melatonin use among Americans has increased five-fold over the past 25 years or so. That has coincided with a 530 percent increase in poison center calls for melatonin exposures to children between 2012 and 2021, it said, as well as a 420 percent increase in emergency visits for unsupervised melatonin ingestion by young children or infants between 2009 and 2020.

Some health officials advise that children under the age of 3 should avoid taking melatonin unless a doctor says otherwise. Side effects include drowsiness, headaches, agitation, dizziness, and bed wetting.

Other symptoms of too much melatonin include nausea, diarrhea, joint pain, anxiety, and irritability. The supplement can also impact blood pressure.

However, there is no established threshold for a melatonin overdose, officials have said. Most adult melatonin supplements contain a maximum of 10 milligrams of melatonin per serving, and some contain less.

Many people can tolerate even relatively large doses of melatonin without significant harm, officials say. But there is no antidote for an overdose. In cases of a child accidentally ingesting melatonin, doctors often ask a reliable adult to monitor them at home.

Dr. Cora Collette Breuner, with the Seattle Children’s Hospital at the University of Washington, told CNN that parents should speak with a doctor before giving their children the supplement.

“I also tell families, this is not something your child should take forever. Nobody knows what the long-term effects of taking this is on your child’s growth and development,” she told the outlet. “Taking away blue-light-emitting smartphones, tablets, laptops, and television at least two hours before bed will keep melatonin production humming along, as will reading or listening to bedtime stories in a softly lit room, taking a warm bath, or doing light stretches.”

In 2022, researchers found that in 2021, U.S. poison control centers received more than 52,000 calls about children consuming worrisome amounts of the dietary supplement. That’s a six-fold increase from about a decade earlier. Most such calls are about young children who accidentally got into bottles of melatonin, some of which come in the form of gummies for kids, the report said.

Dr. Karima Lelak, an emergency physician at Children’s Hospital of Michigan and the lead author of the study published in 2022 by the CDC, found that in about 83 percent of those calls, the children did not show any symptoms.

However, other children had vomiting, altered breathing, or other symptoms. Over the 10 years studied, more than 4,000 children were hospitalized, five were put on machines to help them breathe, and two children under the age of two died. Most of the hospitalized children were teenagers, and many of those ingestions were thought to be suicide attempts.

Those researchers also suggested that COVID-19 lockdowns and virtual learning forced more children to be at home all day, meaning there were more opportunities for kids to access melatonin. Also, those restrictions may have caused sleep-disrupting stress and anxiety, leading more families to consider melatonin, they suggested.

The Associated Press contributed to this report.

Tyler Durden Mon, 03/11/2024 - 21:40

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International

Red Candle In The Wind

Red Candle In The Wind

By Benjamin PIcton of Rabobank

February non-farm payrolls superficially exceeded market expectations on Friday by…

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Red Candle In The Wind

By Benjamin PIcton of Rabobank

February non-farm payrolls superficially exceeded market expectations on Friday by printing at 275,000 against a consensus call of 200,000. We say superficially, because the downward revisions to prior months totalled 167,000 for December and January, taking the total change in employed persons well below the implied forecast, and helping the unemployment rate to pop two-ticks to 3.9%. The U6 underemployment rate also rose from 7.2% to 7.3%, while average hourly earnings growth fell to 0.2% m-o-m and average weekly hours worked languished at 34.3, equalling pre-pandemic lows.

Undeterred by the devil in the detail, the algos sprang into action once exchanges opened. Market darling NVIDIA hit a new intraday high of $974 before (presumably) the humans took over and sold the stock down more than 10% to close at $875.28. If our suspicions are correct that it was the AIs buying before the humans started selling (no doubt triggering trailing stops on the way down), the irony is not lost on us.

The 1-day chart for NVIDIA now makes for interesting viewing, because the red candle posted on Friday presents quite a strong bearish engulfing signal. Volume traded on the day was almost double the 15-day simple moving average, and similar price action is observable on the 1-day charts for both Intel and AMD. Regular readers will be aware that we have expressed incredulity in the past about the durability the AI thematic melt-up, so it will be interesting to see whether Friday’s sell off is just a profit-taking blip, or a genuine trend reversal.

AI equities aside, this week ought to be important for markets because the BTFP program expires today. That means that the Fed will no longer be loaning cash to the banking system in exchange for collateral pledged at-par. The KBW Regional Banking index has so far taken this in its stride and is trading 30% above the lows established during the mini banking crisis of this time last year, but the Fed’s liquidity facility was effectively an exercise in can-kicking that makes regional banks a sector of the market worth paying attention to in the weeks ahead. Even here in Sydney, regulators are warning of external risks posed to the banking sector from scheduled refinancing of commercial real estate loans following sharp falls in valuations.

Markets are sending signals in other sectors, too. Gold closed at a new record-high of $2178/oz on Friday after trading above $2200/oz briefly. Gold has been going ballistic since the Friday before last, posting gains even on days where 2-year Treasury yields have risen. Gold bugs are buying as real yields fall from the October highs and inflation breakevens creep higher. This is particularly interesting as gold ETFs have been recording net outflows; suggesting that price gains aren’t being driven by a retail pile-in. Are gold buyers now betting on a stagflationary outcome where the Fed cuts without inflation being anchored at the 2% target? The price action around the US CPI release tomorrow ought to be illuminating.

Leaving the day-to-day movements to one side, we are also seeing further signs of structural change at the macro level. The UK budget last week included a provision for the creation of a British ISA. That is, an Individual Savings Account that provides tax breaks to savers who invest their money in the stock of British companies. This follows moves last year to encourage pension funds to head up the risk curve by allocating 5% of their capital to unlisted investments.

As a Hail Mary option for a government cruising toward an electoral drubbing it’s a curious choice, but it’s worth highlighting as cash-strapped governments increasingly see private savings pools as a funding solution for their spending priorities.

Of course, the UK is not alone in making creeping moves towards financial repression. In contrast to announcements today of increased trade liberalisation, Australian Treasurer Jim Chalmers has in the recent past flagged his interest in tapping private pension savings to fund state spending priorities, including defence, public housing and renewable energy projects. Both the UK and Australia appear intent on finding ways to open up the lungs of their economies, but government wants more say in directing private capital flows for state goals.

So, how far is the blurring of the lines between free markets and state planning likely to go? Given the immense and varied budgetary (and security) pressures that governments are facing, could we see a re-up of WWII-era Victory bonds, where private investors are encouraged to do their patriotic duty by directly financing government at negative real rates?

That would really light a fire under the gold market.

Tyler Durden Mon, 03/11/2024 - 19:00

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Spread & Containment

Fauci Deputy Warned Him Against Vaccine Mandates: Email

Fauci Deputy Warned Him Against Vaccine Mandates: Email

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

Mandating COVID-19…

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Fauci Deputy Warned Him Against Vaccine Mandates: Email

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

Mandating COVID-19 vaccination was a mistake due to ethical and other concerns, a top government doctor warned Dr. Anthony Fauci after Dr. Fauci promoted mass vaccination.

Coercing or forcing people to take a vaccine can have negative consequences from a biological, sociological, psychological, economical, and ethical standpoint and is not worth the cost even if the vaccine is 100% safe,” Dr. Matthew Memoli, director of the Laboratory of Infectious Diseases clinical studies unit at the U.S. National Institute of Allergy and Infectious Diseases (NIAID), told Dr. Fauci in an email.

“A more prudent approach that considers these issues would be to focus our efforts on those at high risk of severe disease and death, such as the elderly and obese, and do not push vaccination on the young and healthy any further.”

Dr. Anthony Fauci, ex-director of the National Institute of Allergy and Infectious Diseases (NIAID. in Washington on Jan. 8, 2024. (Madalina Vasiliu/The Epoch Times)

Employing that strategy would help prevent loss of public trust and political capital, Dr. Memoli said.

The email was sent on July 30, 2021, after Dr. Fauci, director of the NIAID, claimed that communities would be safer if more people received one of the COVID-19 vaccines and that mass vaccination would lead to the end of the COVID-19 pandemic.

“We’re on a really good track now to really crush this outbreak, and the more people we get vaccinated, the more assuredness that we’re going to have that we’re going to be able to do that,” Dr. Fauci said on CNN the month prior.

Dr. Memoli, who has studied influenza vaccination for years, disagreed, telling Dr. Fauci that research in the field has indicated yearly shots sometimes drive the evolution of influenza.

Vaccinating people who have not been infected with COVID-19, he said, could potentially impact the evolution of the virus that causes COVID-19 in unexpected ways.

“At best what we are doing with mandated mass vaccination does nothing and the variants emerge evading immunity anyway as they would have without the vaccine,” Dr. Memoli wrote. “At worst it drives evolution of the virus in a way that is different from nature and possibly detrimental, prolonging the pandemic or causing more morbidity and mortality than it should.”

The vaccination strategy was flawed because it relied on a single antigen, introducing immunity that only lasted for a certain period of time, Dr. Memoli said. When the immunity weakened, the virus was given an opportunity to evolve.

Some other experts, including virologist Geert Vanden Bossche, have offered similar views. Others in the scientific community, such as U.S. Centers for Disease Control and Prevention scientists, say vaccination prevents virus evolution, though the agency has acknowledged it doesn’t have records supporting its position.

Other Messages

Dr. Memoli sent the email to Dr. Fauci and two other top NIAID officials, Drs. Hugh Auchincloss and Clifford Lane. The message was first reported by the Wall Street Journal, though the publication did not publish the message. The Epoch Times obtained the email and 199 other pages of Dr. Memoli’s emails through a Freedom of Information Act request. There were no indications that Dr. Fauci ever responded to Dr. Memoli.

Later in 2021, the NIAID’s parent agency, the U.S. National Institutes of Health (NIH), and all other federal government agencies began requiring COVID-19 vaccination, under direction from President Joe Biden.

In other messages, Dr. Memoli said the mandates were unethical and that he was hopeful legal cases brought against the mandates would ultimately let people “make their own healthcare decisions.”

“I am certainly doing everything in my power to influence that,” he wrote on Nov. 2, 2021, to an unknown recipient. Dr. Memoli also disclosed that both he and his wife had applied for exemptions from the mandates imposed by the NIH and his wife’s employer. While her request had been granted, his had not as of yet, Dr. Memoli said. It’s not clear if it ever was.

According to Dr. Memoli, officials had not gone over the bioethics of the mandates. He wrote to the NIH’s Department of Bioethics, pointing out that the protection from the vaccines waned over time, that the shots can cause serious health issues such as myocarditis, or heart inflammation, and that vaccinated people were just as likely to spread COVID-19 as unvaccinated people.

He cited multiple studies in his emails, including one that found a resurgence of COVID-19 cases in a California health care system despite a high rate of vaccination and another that showed transmission rates were similar among the vaccinated and unvaccinated.

Dr. Memoli said he was “particularly interested in the bioethics of a mandate when the vaccine doesn’t have the ability to stop spread of the disease, which is the purpose of the mandate.”

The message led to Dr. Memoli speaking during an NIH event in December 2021, several weeks after he went public with his concerns about mandating vaccines.

“Vaccine mandates should be rare and considered only with a strong justification,” Dr. Memoli said in the debate. He suggested that the justification was not there for COVID-19 vaccines, given their fleeting effectiveness.

Julie Ledgerwood, another NIAID official who also spoke at the event, said that the vaccines were highly effective and that the side effects that had been detected were not significant. She did acknowledge that vaccinated people needed boosters after a period of time.

The NIH, and many other government agencies, removed their mandates in 2023 with the end of the COVID-19 public health emergency.

A request for comment from Dr. Fauci was not returned. Dr. Memoli told The Epoch Times in an email he was “happy to answer any questions you have” but that he needed clearance from the NIAID’s media office. That office then refused to give clearance.

Dr. Jay Bhattacharya, a professor of health policy at Stanford University, said that Dr. Memoli showed bravery when he warned Dr. Fauci against mandates.

“Those mandates have done more to demolish public trust in public health than any single action by public health officials in my professional career, including diminishing public trust in all vaccines.” Dr. Bhattacharya, a frequent critic of the U.S. response to COVID-19, told The Epoch Times via email. “It was risky for Dr. Memoli to speak publicly since he works at the NIH, and the culture of the NIH punishes those who cross powerful scientific bureaucrats like Dr. Fauci or his former boss, Dr. Francis Collins.”

Tyler Durden Mon, 03/11/2024 - 17:40

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