The Biden Administration’s utterly ridiculous plan to enact a three-month holiday from the 18.4 cents per gallon Federal gas tax should be a wake-up call with respect to a far broader and more destructive threat. To wit, the US economy has lost its market-based bearings and is now behaving like a spasmodic heap of discord, dislocation and caprice owing to repeated batterings via out-of-this-world government regulatory, fiscal and tax interventions.
In combination, the Green Energy attacks, the Virus Patrol’s lockdowns and scare-mongering, the Fed’s insane money-pumping and Washington’s unprecedented $6 trillion fiscal bacchanalia of the last two years have deeply impaired normal economic function.
Accordingly, the business sector is flying blind: It can’t forecast what’s coming down the pike in the normal manner based on tried and true rules of cause and effect. In many cases, the normal market signals have gone kerflooey as exemplified by the recent big box retailers’ warnings that they are loaded with the wrong inventory and will be taking painful discounts to clear the decks.
Yet it is no wonder that they stocked up on apparel and durables, among others, after a period in which the Virus Patrol shutdown the normal social congregation venues such as movies, restaurants, bars, gyms, air travel and the like. And than Washington added fuel to the fire by pilling on trillions of spending power derived from unemployment benefits that reached to a $55,000 annual rate in some cases and the repeated stimmie checks that for larger families added up to $10,000 to $20,000.
Employed workers didn’t need the multiple $2,000 stimmie checks because in its (dubious) “wisdom” the Virus Patrol forced them to save on social congregation based spending.
Likewise, temporarily laid-off workers didn’t need the $600 per week Federal UI topper. For the most part they had access to regular UI benefits, and also suffered forced “savings” via the shutdown of restaurants, bars, movies etc. Even the so-called “uncovered” employees not eligible for regular state benefits didn’t need $600 per week of UI bennies. The targeted temporary coverages could have paid 65% of their prior wage for well less than $300 per week on average.
So what happened is that the double whammy of forced services savings and the massive flow of free stuff from Washington created a tsunami of demand that sucked the inventory system and supply chains dry.
For instance, here is the Y/Y change in inflation-adjusted PCE for apparel and footwear. The steady-state condition of the US economy for that sector oscillated right near the flat-line during 2012-2019.
Then the Washington policy hurricanes hit. During the original Q2 2020 lockdowns, real spending for apparel and footwear plunged by -27.0%, as Dr. Fauci and the Scarf Lady sent half of the American public scurrying for the fetal position in their bedrooms and man-caves.
But it didn’t take the American public long to get the joke. They soon re-cycled their restaurant spending etc. and topped it up with a tsunami of Washington’s free stuff during the 18 months ending in September 2021. That literally turned spending patterns upside down.
That is to say, the Amazon delivery boxes were declared “safe” once the CDC figured out that the virus didn’t pass on surfaces—so the public went nuts ordering apparel and footwear. By Q2 2021, especially after Biden idiotic $1.9 trillion American Rescue Act in March 2021, the Y/Y change had violently reversed to +57.1%.
That’s whip-saw with malice aforethought. Left to their own devices consumers would never yo-yo their budgets in this manner, meaning, in turn, that retail, wholesale and manufacturing suppliers had no possible way to rationally cope with the Washington-fueled supply-chain upheavals.
As is also evident from the chart, the inflation-adjusted Y/Y change in May plunged nearly back to normal—just +3.4%. Yet it will take years for supply chains and inventory levels and mixes to recover from the economic chaos generated by Washington.
Y/Y Inflation-Adjusted Change PCE for Apparel And Footwear, 2012-2022
The same story holds for durable goods—with the yo-yo amplitude even more extreme. As shown by the chart below, the trend level of growth in real PCE for durables was 3.3% per annum during the 14 year period between the pre-crisis peak in October 2007 and the pre-Covid top in February 2020. Other than during the 2008-2009 recessionary contraction, the numbers followed a stable pattern that businesses could cope with.
And then came the Washington ordered whipsaws. During April 2020 real PCE plunged by -17.5%from prior year, only to violently erupt by +70.5% Y/Y in April 2021. Those stimmies and forced “savings” again!
But now that’s over and done. During May 2022 the Y/Y change was -9.1%. Again, it is no wonder that businesses have the wrong inventories and supply chains have been monkey-hammered from one end of the planet to the other.
Y/Y Change In Real PCE Durables, 2007-2022
In fact, that points to another dimension of the bull-whip story. To wit, the one time conversion of manufacturing to the global supply chain had a hidden vulnerability—-ultra JIT (Just-In-Time).
That is to say, when shipping distances for goods went from 800 miles within the US to 16,000 miles (from factories in Shanghai to terminals in Chicago (or 68 days at sea), a prudent system would have built-in large amounts of redundant inventory to safeguard against the the sweeping disruptions of the past two years.
But the carry-cost of in-depth inventory redundancy would have been extremely costly. That’s owing to working capital costs and the risk of stockpiling the wrong-mix of goods. That is, potential inventory costs and merchandise discounts and write-off would have eaten heavily into the labor arbitrage.
But fueled by the Fed easy money and idiotic 2.00% inflation target, supply chains became ever more extended, brittle and vulnerable. That fact is now indisputable.
As it happened, however, the push to ultra-JIT supply chains caused a massive one-time deflation of durable goods costs. In fact, the nearly 40% contraction of the PCE deflator for durables between 1995, when the China export factories first cranked-up, and the pre-Covid level of early 2020 is one of the great aberrations of economic history.
We seriously doubt that the black line below actually happened, save for the BLS endless fiddling with hedonics and other adjustments to the CPI. Yes, toys, for instance plunged by upwards of 60% during this 25-year period, but then again did they make a whopping big negative hedonics adjustment to accounts for the China junk toy standard?
Still, the deflationary free ride is over. Already, the durables deflator is up nearly 13% from the pre-Covid low and there is far, far more ground to recoup as global supply chains rework the busted JIT models that evolved prior to 2020.
PCE Deflator for Durable Goods, 1995-2022
When it comes to Washington-induced whipsaws, however, there are few sectors that have been as battered as the air travel system. During April 2020, for instance, passenger boardings were down a staggering 96% from the corresponding pre-pandemic month, as in dead and gone. Moreover, this deep reduction pattern prevailed well into the spring of 2021.
The airline shutdowns were not necessitated by public health considerations: Frequent cabin air exchanges probably made them safer than most indoor environments.
But between the misbegotten guidelines of the CDC and the scare-mongering of the Virus Patrol, even as late as January 2022 loadings were still down 34% from pre-pandemic levels.
The industry’s infrastructure got clobbered by these kinds of operating levels. Baggage handlers, flight attendants, pilots and every function in-between suffered huge disruptions in incomes and livelihoods—-even after Washington’s generous subsidies to the airlines and their employees.
And then, insult was added to injury when pilots and other employees were threatened with termination owing to unwillingness to take the jab. The result was an industry to turmoil and sometimes even ruin.
Then the traffic came flooding back. From 70% of pre-pandemic levels in mid-winter 2021-2022, boardings have subsequently rebounded to 90% in recent months. Alas, the air travel system is severely disorganized with labor shortages of every kind imaginable, leading to schedule gaps and cancellations like rarely before.
And now the whipsaw is in the inflationary direction as desperate passengers pay previously unheard of prices to get scarce seats during the summer travel months.
As CBS News recently reported,
Airlines cancelled nearly 1,200 U.S. flights on Sunday and Monday, leaving passengers stranded and luggage piled up at airports across the the country. Thousands more trips were scrapped across the globe as the summer travel season kicks off.
Now for the bad news: Airline analysts say delays and cancellations are likely to persist, and could even get worse.
“We may not have seen the worst of this,” Kit Darby, founder of Kit Darby Aviation Consulting, told CBS MoneyWatch.
Right now, when you have normal things like airplane maintenance or weather, delays are much more severely felt. There are no reserved extra pilots, planes, flight attendants — and the chain is only good as the weakest link,” Darby said.
Many of these problems stem from airlines slashing staff early on in the pandemic, when air travel plummeted. Demand has since roared back faster than airlines have been able to ramp up hiring.
“The biggest issue is they don’t have the capacity. They have not been able to bring back full capacity in terms of pilots, TSA checkpoints, vendors at the airport, baggage handlers, ground staff or flight attendants,” New York Times travel editor Amy Virshup told CBS News.
Right. But what is way up now is ticket prices. After plunging by -28% in May 2020 under Fauci’s benighted orders, May prices soared by +38% on a year-over-year basis.
Again, what we have is an economy careening lower and then higher owing to massive and unnecessary government interventions. And in the case of energy, the mayhem is even more severe.
For want of doubt, however, here is the inflation-adjusted level of airline personal consumption expenditures in recent years. In 2020, the proverbial trap-door literally opened up under the industry. Real output fell by $62.3 billion or 52%, then rebounded by 63% the following year.
Real PCE for Air Transportation, 2002-2021
That’s surely some kind of destructive economic yo-yo. And it was all fueled by the Washington politicians and apparatchiks who have no clue that America’s grand $24 trillion economy is not some kind of glorified game of bumper cars.
* * *
This article is reprinted from David Stockman’s ContraCorner, which offers such analysis daily to subscribers. Pound-for-pound, Stockman’s daily analysis is the most comprehensive, salient, insightful, and data-rich of anything available today.
New Hampshire Governor Vetoes Ivermectin Bill
New Hampshire Governor Vetoes Ivermectin Bill
Authored by Alice Giordano via The Epoch Times (emphasis ours),
New Hampshire’s Republican…
Authored by Alice Giordano via The Epoch Times (emphasis ours),
New Hampshire’s Republican Gov. Chris Sununu vetoed a bill that would have made Ivermectin available without a prescription.
The Republican governor vetoed the bill on June 24, the same day that the U.S. Supreme Court overturned Roe v. Wade. Some fellow Republicans questioned the timing.
“It certainly seemed like a convenient way to bury a veto of a bill that won support from the vast majority of Republicans in New Hampshire,” JR Hoell, co-founder of the conservative watchdog group RebuildNH, told The Epoch Times.
Hoell is a former four-term House Republican planning to seek re-election after a four-year hiatus from the the New Hampshire legislature.
Earlier this year, the New Hampshire Department of Children Youth and Family (DCYF) tried to take custody of Hoell’s 13-year old son after a nurse reported him for giving human-grade ivermectin to the teen months earlier.
Several states have introduced bills to make human-grade ivermectin available without a prescription at a brick and mortar store. Currently, it can be ordered online from another country. In April, Tennessee became the the first state to sign such a measure into law. New Hampshire lawmakers were first to introduce the idea.
Both chambers of the state’s Republican controlled legislature approved the bill.
In his statement explaining the veto, Sununu noted that there are only four other controlled medications available without a prescription in New Hampshire and that each were only made available after “rigorous reviews and vetting to ensure” before being dispensed.
“Patients should always consult their doctor before taking medications so that they are fully aware of treatment options and potential unintended consequences of taking a medication that may limit other treatment options in the future,” Sununu said in his statement.
Sununu’s statement is very similar to testimony given by Paula Minnehan, senior vice president of state government regulations for the New Hampshire Hospital Association, at hearings on the bill.
Minnehan too placed emphasis on the review that went into the four prescription medications the state made available under a standing order. They include naloxone, the generic name for Narcan, which is used to counter opioid overdoses, hormone replacement therapy drugs, and a prescription-version of the morning after pill.
It also includes a collection of smoking cessation therapy drugs like Chantix, which has been linked to suicide, depression, and other neuropsychiatric conditions. Last year, Pfizer, the leading maker of the FDA-approved drug, conducted a voluntarily recall of Chantix. Narcan has also been linked to deaths caused by severe withdrawals that have led to acute respiratory distress.
Rep. Melissa Blasek, a Republican co-sponsor of the New Hampshire ivermectin bill, told The Epoch Times, that one could veto any drug-related bill under the pretense of overdose concerns.
“The reality is you can overdose on Tylenol,” she said. “Ivermectin has one of the safest track records of any drug.”
The use of human-grade ivermectin became controversial when some doctors began promoting it for the treatment and prevention of COVID-19. Government agencies including the FDA and CDC issued warnings against its use while groups like Front Line COVID-19 Critical Care Alliance (FLCCC) heavily promoted it.
Some doctors were disciplined for prescribing human-grade ivermectin for COVID-19 including a Maine doctor whose medical license was suspended by the state.
Read more here...
The Jaws Of Trade Squeezing The Supply Chain
The Jaws Of Trade Squeezing The Supply Chain
The jaws of the supply chain vise are squeezing trade so tight that the headache…
The jaws of the supply chain vise are squeezing trade so tight that the headache it is creating will be a whopper for logistics managers this peak season. Port congestion is growing again as a result of labor and equipment inefficiencies. Trade requires people, and what we see in the CNBC Supply Chain Heat Maps is the people component in trade is behind this latest squeeze.
Shanghai is still in the process of reopening, and while there are more green lights on the screen, the supplying of drivers and people to move and make the product is slower than normal. This is affecting the delivery of critical medical devices.
“The manufacturing plant in Shanghai was down for 75 days because of the ‘zero-COVID’ restrictions,” explained Gerry LoDuca, president of Dukal, which sells infection-control products and has manufacturing plants in Shanghai, Wuhan and Xingtai, China. “They are now operating 24/7 and they will be caught up by the end of July. Then the products will need to be packed up, shipped to Shanghai port and moved by vessel.”
Unfortunately, this delay is one of many being experienced by global importers.
Another vise squeezing trade is Europe.
Labor strife between the German trade union ver.di and the Central Association of German Seaport Companies (ZDS) is white-hot. Almost all ports in the German Northern Sea were impacted by a second warning strike last week that lasted 24 hours.
According to sources, a final offer of a wage increase of up to 11% in 18 months was offered. Some hope for a conciliation procedure in which politicians or a neutral person become involved in mediation.
The delays created by the latest warning strike have added to the congestion already plaguing the German ports. Container ships are currently delayed by several weeks at some German ports. Logistics executives are concerned the congestion is going to get worse, as will the availability of empty containers to be filled with trade.
“The overall situation in North European ports is deteriorating,” warned Andreas Braun, EMEA ocean product director for Crane Worldwide Logistics. “Port congestion is on the increase as well as yard occupancy. The first shipping lines like MSC are reacting to the current scenario with emergency storage surcharges for both imports and exports. These surcharges will be applied after exceeding the standard storage free time and are in addition to the standard tariffs. Although this surcharge is currently limited to Dutch ports only, and to date only MSC has circulated communication relating to the additional fees, we can assume that other ports and shipping lines will follow.”
Ocean carrier Hapag-Lloyd issued a notice on the increased demand on trucks as a result of this labor slowdown. And Maersk reported it would “absorb” the stoppage at its German terminals, telling customers that “in the interest of minimizing any further disruption to your supply chain, we will be keeping a close eye on developments up to and during the next round of meetings between trade union ver.di and ZDS, acknowledging that further strike action is possible.”
The U.S. logistics system continues to have its own host of issues with the persistent rail problems, chassis shortages and warehouses at capacity.
“Consumer trends are changing,” explained Spencer Shute, senior consultant at Proxima. “Buying patterns have shifted from home, electronics, casual apparel to more services. We are seeing buying apparel for travel and cosmetics coming back to pre-pandemic levels. Luggage, sunscreen, bug spray, these are items in higher demand because consumers need them in their experience pursuits. Larger appliances are not being purchased anymore. It’s an interesting dynamic to see how quickly the consumer has flipped considering what is going on in the economy.”
Despite the historic volume of containers, a pullback is expected as future orders for Chinese manufacturing have dropped anywhere from 20% to 30%, according to shippers surveyed. Lumber orders have been cut along with orders for furniture, appliances and DIY products.
“But for other sectors like garments, sporting goods and e-commerce, they are still seeing strong demands,” explained Akhil Nair, senior vice president of products for Asia-Pacific at Seko Logistics.
Steve Lamar, CEO of the American Apparel and Footwear Association, explained the continued strength in orders is a result of consumers looking to outfit themselves for experiences like back to school, back to in-office work and travel. But despite this demand, the impact of inflation is a top worry.
“We remain deeply concerned that persistently high prices — in our sector and throughout the economy — will begin to dampen consumer spending and harm American families,” Lamar said. “That is why, with consumers still being a driver for economic growth in our economy, we continue to push for the [Biden] administration to avail itself of all its own inflation-cutting tools, including relief from the high and regressive tariffs that are currently being charged on products in our industry.”
Alan Baer, CEO of OL USA, tells American Shipper the decrease in container volume is being seen.
“We are seeing drops by some customers from 30-50 FEU per week down to 10 FEU per week,” Baer said.
The squeeze is on. Time to pop that aspirin.
5 Top Biotech Stocks To Watch In July 2022
Amid choppy markets, could there be potential in these top biotech stocks?
The post 5 Top Biotech Stocks To Watch In July 2022 appeared first on Stock…
Should Investors Be Watching These Top Biotech Stocks In The Stock Market Now?
Just as most people think that pandemic woes are behind us, we now have the emergence of the monkeypox. While this virus may not be as contagious as the coronavirus, there is still a real cause for concern. On Tuesday, the Centers for Disease Control and Prevention (CDC) announced the activation of an emergency operations unit for monkeypox. This signals the initial stages of a public health concern. Epidemiologist Dr. Eric Feigl-Ding believes that the number of cases could reach 100,000 worldwide by August. In light of these circumstances, biotech stocks could be gaining more attention in the stock market.
Furthermore, the coronavirus is not going away anytime soon. Recently, the U.S. Food and Drug Administration (FDA) Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted that there is a need to modify the current strain composition of available COVID-19 vaccines to target the Omicron variant. If this is approved, vaccine makers such as Pfizer/BioNTech, and Moderna (NASDAQ: MRNA) will need to provide modified boosters of their coronavirus vaccines. In fact, Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) just announced a new vaccine supply agreement with the U.S. government. Under the agreement, the U.S. government will receive 105 million doses with an option of up to 195 million additional doses. With all this in mind, here are five of the top biotech stocks to note in the stock market today.
Biotech Stocks For Your July 2022 Watchlist
- Regeneron Pharmaceuticals Inc (NASDAQ: REGN)
- Sanofi SA (NASDAQ: SNY)
- Novavax, Inc. (NASDAQ: NVAX)
- Arrowhead Pharmaceuticals Inc (NASDAQ: ARWR)
- Global Blood Therapeutics Inc (NASDAQ: GBT)
First up, we have the integrated biotech company, Regeneron Pharmaceuticals. Essentially, the company discovers, invents, manufactures, and commercializes medicines for serious diseases. For the most part, its medicines and products aim to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular, and metabolic diseases. REGN stock has been trading sideways over the past year.
Having said that, the company received a boost on Wednesday as the U.S. FDA has accepted for review the EYLEA Injection supplemental Biologics License Application for every 16-week 2 mg dosing regimen. This specifically caters to patients with diabetic retinopathy. Should this go according to plan, the 16-week dosing regimen could offer patients a potentially longer treatment interval. Also, it will allow doctors to have greater flexibility to individualize treatment. Given such a positive development, should investors be paying more attention to REGN stock?
Another top biotech name making waves this week is Sanofi. The France-based company engages in the research, development, and marketing of therapeutic solutions. Over the past week, there have been several key developments that could potentially excite investors. For starters, the company and GSK (NYSE: GSK) announced positive data from their vaccine trial last Friday. The vaccine candidate is the first to ever demonstrate efficacy in a placebo-controlled trial in an environment of high Omicron variant circulation.
Furthermore, Sanofi’s Nexviadyme (avalglucosidase alfa) has recently gained marketing authorization from the European Commission. For the uninitiated, this is an enzyme replacement therapy for long-term treatment of both late-onset and infantile-onset Pompe disease. This is a significant development because Nexviadyme is the first and only newly approved medicine for Pompe disease in Europe since 2006. On that note, would you say that SNY stock is a top biotech stock to watch?
Following that, let us look at the biotech company, Novavax. In detail, it promotes improved health globally through the discovery, development, and commercialization of vaccines to prevent serious infectious diseases. Its recombinant technology platform harnesses the power and speed of genetic engineering. As a result, the company produces immunogenic nanoparticles designed to address urgent global health needs. That said, NVAX stock has been struggling to find its footing since the start of the year.
During the VRBPAC meeting, Novavax highlighted data showing that its protein-based coronavirus vaccine showed epitopes across both the original strain and emerging variants. Therefore, it will be able to contribute to the generation of broadly cross-reacting antibodies. The company also provided pre-clinical data that suggests boosting with Novavax’s Omicron or prototype vaccine will induce an immune response against Omicron variants. Overall, there are reasons to believe that Novavax will close the second half of the year on a better note. With that in mind, would you consider adding NVAX stock to the top of your watchlist?
Arrowhead Pharmaceuticals develops medicines that treat intractable diseases by silencing the genes that cause them. It uses a portfolio of ribonucleic acid (RNA) chemistries and modes of delivery. Most of its therapies trigger the RNA interference mechanism to induce rapid, deep, and durable knockdown of target genes. Those following the medical space would notice that gene therapies have been gaining popularity within the industry over the past few years. Hence, it would not be surprising if investors are taking note of Arrowhead.
As a matter of fact, the company recently claimed that its experimental drug fazirsiran can reduce the accumulation of mutant protein known as Z-AAT by 83%. This result is based on an open-label phase 2 trial involving 16 volunteers with alpha1-antitrypsin deficiency disease. For now, there is still no approved treatment for such genetic liver disease. All in all, Arrowhead appears to be making strides in the right direction. Thus, should you be keeping a closer tab on ARWR stock?
Global Blood Therapeutics
To sum it all up, we have the biopharmaceutical company, Global Blood Therapeutics. As its name suggests, this is a company that specializes in blood-related treatments. The company is currently focused on Oxbryta, an FDA-approved medicine that inhibits sickle hemoglobin polymerization. In addition, it is also advancing its pipeline program in Sickle Cell Disease with inclacumab, and GBT021601. Impressively, GBT stock has been on bullish momentum lately, rising more than 28% within the past month.
Not to mention, the company announced on Thursday that it initiated the Phase 2 portion of its Phase 2/3 trial of GBT021601. The study aims to evaluate the safety, tolerability, efficacy, pharmacokinetics, and pharmacodynamics of the drug. So far, the preclinical results and data have been encouraging. Smith-Whitley, the company’s head of research and development, believes the drug has “the potential to improve on the clinical results achieved with Oxbryta® at a lower daily dose.” If so, this would be a huge boost for the company as it continues to work towards its long-term goals. All things considered, is GBT stock a buy right now?
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