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Sweden Unexpectedly Expands QE By 40%

Sweden Unexpectedly Expands QE By 40%

Tyler Durden

Thu, 11/26/2020 – 10:25

Back in 2017, Sweden made a mistake: the Governor of the Swedish Riksbank, Stefan Ingves, described the use of negative interest rates an "experiment" never.



Sweden Unexpectedly Expands QE By 40% Tyler Durden Thu, 11/26/2020 - 10:25

Back in 2017, Sweden made a mistake: the Governor of the Swedish Riksbank, Stefan Ingves, described the use of negative interest rates an "experiment" never tried before, and with inflation in the Scandinavian country surging, he said that the experiment was officially over, with the Riksbank beginning a hiking cycle in late 2018 which pushed the Swedish repo rate back to 0 last December, and making another trip into negative rates virtually impossible without the Riksbank's reputation suffering a terminal hit.

While the impact of the negative rates on the domestic inflation rate was small (and in fact probably contributed to wholesale deflation as we have shown previously), the effects of negative rates on the housing market - where prices exploded amid the ultra-loose conditions making housing unaffordable, and on household debt levels are large. As a result, imbalances which had already begun to materialize before the Global Crisis have worsened. Real estate prices rose rapidly, contributing to rising wealth inequality (and yes, a central bank was explicitly at fault), while household debt reached record levels. Ironically, even though the exchange rate of the Swedish krona has depreciated by more than 10%, with no major impact on the domestic rate of inflation.

In short, as Professors Fredrik Andersson and Lars Jonung wrote in May, Sweden's negative rates "created an economy with signs of ‘overheating’. However, this is likely a short-run gain. The Riksbank will face a major challenge to calibrate its policy during the next downturn."

Their conclusion on Sweden's negative rates experience was simple: "Don’t do it again!"

There is just one problem: when the Riksbank resumed tightening and pushed rates back to 0%, both its and Europe's economy were recovering, and it seemed there was limited risk from another contraction. And then the covid pandemic hit, crippling both Europe - which is facing a double dip recession following the latest round of lockdowns - and Sweden's economy.

And since the world's oldest central bank could not cut rates again without risking a huge reputational and credibility blow after it triumphantly ended its "negative rates experiment" several years ago, eager to halt the dramatic appreciation in the Swedish Krone which is up more than 6% YTD, the central bank had just one option: expand QE even more.

Which is precisely what the Sweden’s central bank did this morning when it surprised markets with a bigger-than-expected expansion of its asset purchase program, and said there’s room to deliver more stimulus between scheduled meetings. Specifically, the Riksbank announced that it was expanding its quantitative easing program to 700 billion kronor ($82 billion), which is 200 billion kronor more than its earlier target. With economists at SEB predicting a 100 billion-krona QE expansion, while most others expected no change in policy, the krona immediately sank up to 0.5% against the euro although it remains dramatically higher YTD.

Meanwhile, the key interest rate was kept at zero, as expected, and will probably stay there in "the coming years," the bank said, clearly not willing to risk reversing on its promises to not go back to NIRP.

And since it no longer has the capacity to cut rates "for years" absent a complete economic crash, the Riksbank not only expanded its QE target, but also said it will step up the pace of asset purchases next quarter, as the Executive Board also decided to step up the quarter-on-quarter pace of its purchases during the first quarter of 2021, committing to buy SEK120bn over that quarter, which means QE will only keep rising as long as negative rates remain off the table.

The surprising decision to expand the asset purchase program prompted "reservations" from two Executive Board members advocating for later action: Breman advocated that the program should instead be expanded by SEK100 billion during the second half of 2021; Floden thought that the Riksbank should pledge that monetary policy will remain expansionary as long as necessary without deciding now on purchase sums for the second half of 2021. Their opposition to the QE expansion was duly noted... and ignored.

At the press briefing, Governor Stefan Ingves said the extra 200 billion kronor in QE won’t be put toward reinvestments, but also assured markets that the Riksbank will continue to reinvest in bonds affected by its program.

"If the world changes, if there’s turbulence for various reasons and if we conclude that we need to do something between meetings, we will do so," Ingves said during a virtual press briefing in Stockholm on Thursday.

As Bloomberg notes, and confirming the above, "Ingves has repeatedly underscored his preference for asset purchases over rate cuts to support the economy. The Riksbank ended half a decade of negative rates almost a year ago, and Ingves has shown a reluctance to delve below zero again, amid financial stability concerns."

Alas, Sweden shows just what happens when a central bank is virtually out of ammo, and worse - it main policy tool, interest rates, is now limited to the zero lower bound. Meanwhile, the country is now bracing for a dark winter as the pandemic spreads, intensive-care beds fill up and curbs on movement increase. The government has already warned that the next few months will be tougher on the economy than first feared.

Fearing that much worse is yet to come, the Riksbank tried to pretend as if it never said all those bad things about "experimental" negative rates, knowing full well it will have no choice but to go NIRP again, sooner or later. As a result, the Riksbank said the repo rate "can be cut if this is assessed to be an effective measure, particularly if confidence in the inflation target were to be threatened." The irony, of course, is that years of negative rates did nothing to boost inflation to hit the target; instead what NIRP did is create a massive housing and debt bubble, which the Riksbank scrambled to shortcircuit before everything came crashing down.

And now it faces a dismal dilemma: reflate the biggest asset and credit bubble ever (which even the Riksbank has admitted is it own doing), ensuring that the next crash - when it comes - will be truly devastating, or step back and allow the economy to crumble. Meanwhile, inflation remains well below the Riksbank’s 2% target, coming in at just 0.3% in October.

The Riksbank’s surprise decision to expand its stimulus program came just two weeks before the European Central Bank is expected to unveil more support measures.

"We are neighbors with an elephant and when the elephant moves it affects us,’ Ingves said. “I can’t comment on what they’ll do and in what way, but basically everything the ECB does to keep the euro zone economy running and to bring up inflation is good for Sweden as well."

“But what they’ll do and how, we’ll have to see further ahead, because we are not party to that decision-making process,” Ingves said.

Well, Stefan, we can tell you: the ECB will almost certainly expand its emergency pandemic QE by hundreds of billions in December, as today's ECB minutes hinted.

Meanwhile, In Thursday’s statement, the Riksbank cut its forecast for gross domestic product this year and now sees a contraction of 4%, compared with 3.6% previously. The rebound in 2021 will also be smaller than earlier thought, with growth seen at 2.6%, compared with the 3.7% seen earlier.

* * *

But going back to the problem at hand, the Riksbank revised down its growth forecasts to -4.0% (compared to the -3.6% forecast in September) for 2020 and 2.6% (3.7%) for 2021. At the same time, inflation will remain below the bank’s 2% target throughout the forecast period, which extends into 2023. The Riksbank expects unemployment to peak at 9.4% in 2021—a 0.2pp upward revision from the September MPR—before falling back subsequently.

Looking ahead, the MPR reiterated that the "possibility of a repo rate cut cannot be ruled out" although to do that and to crush what little credibility it has left, would require a true economic shock. The Riksbank cited the exchange rate, how fast the supply side of the economy recovers, and the pass-through of the repo rate to interest rates in the broader economy as factors it will consider when assessing the usefulness of an interest rate cut, clearly forgetting its admission as recently as 2018 that NIRP was an "experimental" mistake.

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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…



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),




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…



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.


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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