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Retail Investors Swarm The Market – Please Stay Seated, the Ride is not Over

Powerful corrective forces continue to grip the market.  After a large rally to start the New Year, the correction is punishing.

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This article was originally published by Marc To Market.

Overview: Powerful corrective forces continue to grip the market.  After a large rally to start the New Year, the correction is punishing. Most Asia Pacific equities markets were off again today to bring the week's loss to 2.5% to 5.5% throughout the region.  Europe's Dow Jones Stoxx 600 is a little more than 1% lower on the day.  The 2.4% loss for the week would be the largest since October and wipes out the month's gain.  US shares are trading heavily, and the S&P futures point to around a 1% drop, which is marginally lower for the year.  Bond markets are not drawing a safe-haven bid, and yields are mostly 2-4 bp higher.  Italian bonds are performing best as the market anticipates some kind of resolution to the political turmoil without resort to disruptive and distracting elections.  The 10-year US Treasury yield is about 1.07%, a four basis point increase on the week.  Only the Norwegian krone is stronger against the dollar today among the major currencies.  Of note, despite risk-off, the weakest of the major currencies today are the Australian dollar and Japanese yen, off around 0.5%.  Emerging market currencies are mixed, and the JP Morgan Emerging Market Currency Index is up a little today but is still off about 0.25% for the week.  If sustained, it would be the sixth consecutive weekly decline.   Gold is firm but continues to consolidate around $1850 (200-day moving average).  Silver has reportedly drawn interest from the swarm of retail investors.  The metal was up nearly 5% yesterday and is up nearly another 1% today.  Near $27.10, silver at three-week highs.   March WTI is little changed and is in the lower end of its recent consolidative range ($52-$54). Asia Pacific Japan's economy finished 2020 on a weak note.  Retail sales fell by 0.8% in December, a little more than expected, and follows a 2.1% decline in November.  Industrial output tumbled 1.6% in December for a 3.2% year-over-year contraction.  Unemployment was unchanged at 2.9%.   The preliminary PMIs show economic activity is still contracting, and areas that account for around 60% of GDP are in a formal state of emergency.  The BOJ does not meet until March. Talk that it would pull back from its ETF buying has been dampened by the recent volatility, while some speculate that officials could tolerate a wider range for the 10-year yield. South Korea and Taiwan data points point to a regional recovery, despite Japanese woes.  Seoul reported a 3.7% jump in December industrial output, a multiple of what was expected.  Taipei reported Q4 GDP rose 4.9% year-over-year, making it one of the few economies to expand in 2020.   Over the weekend, China's PMI will be released, and a little softening is expected within the expansion. The Japanese yen's safe-haven appeal always seemed more complicated to us than "buy yen when there is trouble".  We often saw it linked to unwinding its funding role (borrowed and sold to finance the purchase of higher beta assets, and when those assets go south, which they invariably do, the trade is unwound the funding currency has to be bought back too).  Despite the dramatic equity reversal, the yen is at its weakest level against the dollar since mid-November.  The greenback has risen more than 0.5% against the yen today, its third consecutive advancing session.  It appears that participants turned more cautious as the JPY105-level came into view.  Three-month implied volatility is firm just below 6%, which is still soft.  The 100-day average is closer to 6.8%.   We suspect the spot move today is exhausted or nearly so.  Support now is seen in the JPY104.40-JPY104.60 area. The Australian dollar recovered smartly yesterday after dipping below $0.7600 briefly and reached almost $0.77 late in North America.  However, there has been no follow-through selling, and the Aussie is on its backfoot.  Recall that it finished last year just below $0.7700.  A  convincing break of $0.7600 now points to $0.7500. The PBOC's dollar reference rate was set at CNY6.4709, which was weaker than the bank model's suggested.  In recent days, the reference rate was set higher than the models projected.  We have been following for you the snugging--tightening financial conditions short of a formal rate hike-- by the PBOC.  It continues even though officials injected liquidity for the first time this week.  The overnight repo rate rose 28 bp to 3.33% today, a nearly six-year high. Month-end and tax payments have increased the demand for liquidity as the PBOC withdrew it.    It hit a low last month of about 60 bp.  It appears that officials are trying to force de-levering ahead of the Lunar New Year when it will likely pump in more liquidity.  The Chinese yuan has appreciated by about 1.35% against the US dollar on the month, making it among the strongest emerging market currencies. Europe The preliminary estimates of Q4 GDP for Germany, France, and Spain were all a little better than expected.  However, the limited market impact is reasonable given the risks of contraction in Q1.  Germany's GDP rose by 0.1%.  Most were looking for stagnation.  Year-over-year, the world's fourth-largest economy contracted by 2.9%.  Separately, it also reported that January unemployment was steady at 6.0%. Helped by a surge in consumer spending in December (23%), France's Q4 GDP fell by 1.3%, considerably better than the median forecast (Bloomberg survey) of a 4% contraction.  A recovery in Spain's retail sales also helped Q4 GDP.  Rather than contract, like nearly everyone expected, the economy grew by a modest 0.4%. Spain also reported preliminary January CPI figures.  Following Germany, VAT-led surge in prices, Spain's January CPI slipped 0.3% on the month, but due to the base effect (January 2019, it fell by 1.4%) rose by 0.6% year-over-year, the highest since last February. A recent flurry of comments about the euro and the possibility of cutting rates has spurred talk of the forever currency wars.  It is a mistake.  Was there any talk of currency wars when Trump or Mnuchin tried talking the dollar down?  There have been several other countries, mostly emerging market countries, that have intervened.  One major country, Sweden, announced a program to buy foreign currencies, but that is designed to shift the funding of its reserves to SEK borrowing.  Reports that measure the dollar's sell-off since March are cherry-picking the spike high during the early days of the pandemic.  Claims that Yellen rejected the strong dollar policy are in error.  Even though she did not use the loaded phrase, she articulated its spirit.  The US would not seek to purposely devalue the dollar to gain competitive advantage, and it wants other countries to do the same.  Lastly, the ECB did not talk about a rate cut; a couple members did.  Lagarde, though, at the recent ECB meeting was clear.  All of the ECB's tools are available and can be adjusted in several dimensions.   Given ECB's Makhlouf's comments, playing down the need for a rate cut seems like there is an internal debate at the ECB that bled into the public space. The euro is trading quietly in about a 35 tick range today within yesterday's range, which was within Wednesday's range (~$1.2060-$1.2170).  It finished last week near $1.2170 and ended last year near $1.2215.  The intraday technical readings are stretched.  Immediate resistance is seen around $1.2140.  Sterling is trading quietly but lower within the well-worn ranges seen over the past couple of weeks.  It has closed below $1.36 since January 18.  The top end of the range is not as clear.  It reached almost $1.3760 in the middle of the week.  It finished last week near $1.3685. America The US reports December personal income and consumption data today, but there really is no new information in it.  Yesterday's Q4 GDP estimate (4%) incorporated today's reports.  One interesting note from the GDP report was that consumer spending on services rose 4% while goods purchases slipped by 0.4%.  The monthly PCE deflator may draw some attention, but there is still little in the hard data to justify elevated concerns despite the rise in inflation expectations.  The headline deflator, which the Fed targets at an average rate of 2%, may have ticked up to 1.2% from 1.1%.  The core rate, which the Fed talks about but does not target, may have slipped to 1.3% from 1.4%. Canada reports November GDP figures today.  The economy is expected to have expanded by 0.4% in November as it did in October.  It would leave the Canadian economy about 3.2% smaller than November 2019.  Next week, Canada reports the January jobs data.  The labor market is expected to have stabilized after losing almost 53k jobs last month.  Mexico reported a record trade surplus in December yesterday ($6.2 bln vs. expectations for $4.6 bln).  It suggests upside risk to the Q4 GDP report today.  The median forecast (Bloomberg survey) is for a 3.1% expansion after 12.1% in Q3. The US dollar reached CAD1.2880 yesterday, its highest level since December 23.  The weakness in equities and risk-off took a toll.  The greenback has pared yesterday's gains and was sold to almost CAD1.2815.  Although some more slippage is possible with support seen around CAD1.2800, the intraday technical readings suggest the downside may be limited.  The US dollar finished last week near CAD1.2735.  This would be the third consecutive weekly advance, and it could be the largest since last October.  The greenback rose to a new high for the year against the Mexican peso yesterday (~MXN20.46), just shy of our MXN20.50 target.  Like the Canadian dollar, the peso has been better bid in Europe today.  However, the intraday technical indicators are stretched.  Look for the US dollar to find support ahead of MXN20.12.   Disclaimer

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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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