Connect with us

Uncategorized

The COVID-19 RT-PCR Test: How To Mislead All Humanity Into Accepting Societal Lock-Downs

The COVID-19 RT-PCR Test: How To Mislead All Humanity Into Accepting Societal Lock-Downs

Published

on

The COVID-19 RT-PCR Test: How To Mislead All Humanity Into Accepting Societal Lock-Downs Tyler Durden Fri, 11/06/2020 - 21:00

Authored by Dr. Pascal Sacré via GlobalResearch.ca,

It is time for everyone to come out of this negative trance, this collective hysteria, because famine, poverty, massive unemployment will kill, mow down many more people than SARS-CoV-2!

Introduction: using a technique to lock down society

All current propaganda on the COVID-19 pandemic is based on an assumption that is considered obvious, true and no longer questioned:

Positive RT-PCR test means being sick with COVID. This assumption is misleading.

Very few people, including doctors, understand how a PCR test works.

RT-PCR means Real Time-Polymerase Chain Reaction.

In French, it means: Réaction de Polymérisation en Chaîne en Temps Réel.

In medicine, we use this tool mainly to diagnose a viral infection.

Starting from a clinical situation with the presence or absence of particular symptoms in a patient, we consider different diagnoses based on tests.

In the case of certain infections, particularly viral infections, we use the RT-PCR technique to confirm a diagnostic hypothesis suggested by a clinical picture.

We do not routinely perform RT-PCR on any patient who is overheated, coughing or has an inflammatory syndrome!

It is a laboratory, molecular biology technique of gene amplification because it looks for gene traces (DNA or RNA) by amplifying them.

In addition to medicine, other fields of application are genetics, research, industry and forensics.

The technique is carried out in a specialized laboratory, it cannot be done in any laboratory, even a hospital. This entails a certain cost, and a delay sometimes of several days between the sample and the result.

Today, since the emergence of the new disease called COVID-19 (COrona VIrus Disease-2019), the RT-PCR diagnostic technique is used to define positive cases, confirmed as SARS-CoV-2 (coronavirus responsible for the new acute respiratory distress syndrome called COVID-19).

These positive cases are assimilated to COVID-19 cases, some of whom are hospitalized or even admitted to intensive care units.

Official postulate of our managers: positive RT-PCR cases = COVID-19 patients.

This is the starting postulate, the premise of all official propaganda, which justifies all restrictive government measures: isolation, confinement, quarantine, mandatory masks, color codes by country and travel bans, tracking, social distances in companies, stores and even, even more importantly, in schools.

This misuse of RT-PCR technique is used as a relentless and intentional strategy by some governments, supported by scientific safety councils and by the dominant media, to justify excessive measures such as the violation of a large number of constitutional rights, the destruction of the economy with the bankruptcy of entire active sectors of society, the degradation of living conditions for a large number of ordinary citizens, under the pretext of a pandemic based on a number of positive RT-PCR tests, and not on a real number of patients.

Technical aspects: to better understand and not be manipulated

The PCR technique was developed by chemist Kary B. Mullis in 1986. Kary Mullis was awarded the Nobel Prize in Chemistry in 1993.

Although this is disputed, Kary Mullis himself is said to have criticized the interest of PCR as a diagnostic tool for an infection, especially a viral one.

He stated that if PCR was a good tool for research, it was a very bad tool in medicine, in the clinic.

Mullis was referring to the AIDS virus (HIV retrovirus or HIV), before the COVID-19 pandemic, but this opinion on the limitation of the technique in viral infections, by its creator, cannot be dismissed out of hand; it must be taken into account!

PCR was perfected in 1992.

As the analysis can be performed in real time, continuously, it becomes RT (Real-Time) – PCR, even more efficient.

It can be done from any molecule, including those of the living, the nucleic acids that make up the genes:

  • DNA (deoxyribonucleic acid)

  • RNA (Ribonucleic Acid)

Viruses are not considered as “living” beings, they are packets of information (DNA or RNA) forming a genome.

It is by an amplification technique (multiplication) that the molecule sought is highlighted and this point is very important.

RT-PCR is an amplification technique.

If there is DNA or RNA of the desired element in a sample, it is not identifiable as such.

This DNA or RNA must be amplified (multiplied) a certain number of times, sometimes a very large number of times, before it can be detected. From a minute trace, up to billions of copies of a specific sample can be obtained, but this does not mean that there is all that amount in the organism being tested.

In the case of COVID-19, the element sought by RT-PCR is SARS-CoV-2, an RNA virus.

There are DNA viruses such as Herpes and Varicella viruses.

The most well known RNA viruses, in addition to coronaviruses, are Influenza, Measles, EBOLA, ZIKA viruses.

In the case of SARS-CoV-2, RNA virus, an additional specific step is required, a transcription of RNA into DNA by means of an enzyme, Reverse Transcriptase.

This step precedes the amplification phase.

It is not the whole virus that is identified, but sequences of its viral genome.

This does not mean that this gene sequence, a fragment of the virus, is not specific to the virus being sought, but it is an important nuance nonetheless:

RT-PCR does not reveal any virus, but only parts, specific gene sequences of the virus.

At the beginning of the year, the SARS-CoV-2 genome was sequenced.

It consists of about 30,000 base pairs. The nucleic acid (DNA-RNA), the component of the genes, is a sequence of bases. In comparison, the human genome has more than 3 billion base pairs.

Teams are continuously monitoring the evolution of the SARS-CoV-2 viral genome as it evolves, through the mutations it undergoes. Today, there are many variants.

By taking a few specific genes from the SARS-CoV-2 genome, it is possible to initiate RT-PCR on a sample from the respiratory tract.

For COVID-19 disease, which has a nasopharyngeal (nose) and oropharyngeal (mouth) entry point, the sample should be taken from the upper respiratory tract as deeply as possible in order to avoid contamination by saliva in particular.

All the people tested said that it is very painful.

The Gold Standard (preferred site for sampling) is the nasopharyngeal (nasal) approach, the most painful route.

If there is a contraindication to the nasal approach, or preferably to the individual being tested, depending on the official organs, the oropharyngeal approach (through the mouth) is also acceptable. The test may trigger a nausea/vomiting reflex in the individual being tested.

Normally, for the result of an RT-PCR test to be considered reliable, amplification from 3 different genes (primers) of the virus under investigation is required.

“The primers are single-stranded DNA sequences specific to the virus. They guarantee the specificity of the amplification reaction. »

“The first test developed at La Charité in Berlin by Dr. Victor Corman and his associates in January 2020 allows to highlight the RNA sequences present in 3 genes of the virus called E, RdRp and N. To know if the sequences of these genes are present in the RNA samples collected, it is necessary to amplify the sequences of these 3 genes in order to obtain a signal sufficient for their detection and quantification. ».

The essential notion of Cycle Time or Cycle Threshold or Ct positivity threshold [16].

An RT-PCR test is negative (no traces of the desired element) or positive (presence of traces of the desired element).

However, even if the desired element is present in a minute, negligible quantity, the principle of RT-PCR is to be able to finally highlight it by continuing the amplification cycles as much as necessary.

RT-PCR can push up to 60 amplification cycles, or even more!

Here is how it works:

  • Cycle 1: target x 2 (2 copies)

  • Cycle 2: target x 4 (4 copies)

  • Cycle 3: target x 8 (8 copies)

  • Cycle 4: target x 16 (16 copies)

  • Cycle 5; target x 32 (32 copies)

  • Etc exponentially up to 40 to 60 cycles!

When we say that the Ct (Cycle Time or Cycle Threshold or RT-PCR positivity threshold) is equal to 40, it means that the laboratory has used 40 amplification cycles, i.e. obtained 240 copies.

This is what underlies the sensitivity of the RT-PCR assay.

While it is true that in medicine we like to have high specificity and sensitivity of the tests to avoid false positives and false negatives, in the case of COVID-19 disease, this hypersensitivity of the RT-PCR test caused by the number of amplification cycles used has backfired.

This over-sensitivity of the RT-PCR test is deleterious and misleading!

It detaches us from the medical reality which must remain based on the real clinical state of the person: is the person ill, does he or she have symptoms?

That is the most important thing!

As I said at the beginning of the article, in medicine we always start from the person: we examine him/her, we collect his/her symptoms (complaints-anamnesis) and objective clinical signs (examination) and on the basis of a clinical reflection in which scientific knowledge and experience intervene, we make diagnostic hypotheses.

Only then do we prescribe the most appropriate tests, based on this clinical reflection.

We constantly compare the test results with the patient’s clinical condition (symptoms and signs), which takes precedence over everything else when it comes to our decisions and treatments.

Today, our governments, supported by their scientific safety advice, are making us do the opposite and put the test first, followed by a clinical reflection necessarily influenced by this prior test, whose weaknesses we have just seen, particularly its hypersensitivity.

None of my clinical colleagues can contradict me.

Apart from very special cases such as genetic screening for certain categories of populations (age groups, sex) and certain cancers or family genetic diseases, we always work in this direction: from the person (symptoms, signs) to the appropriate tests, never the other way around.

This is the conclusion of an article in the Swiss Medical Journal (RMS) published in 2007, written by doctors Katia Jaton and Gilbert Greub microbiologists from the University of Lausanne :

PCR in microbiology: from DNA amplification to result interpretation:

“To interpret the result of a PCR, it is essential that clinicians and microbiologists share their experiences, so that the analytical and clinical levels of interpretation can be combined.”

It would be indefensible to give everyone an electrocardiogram to screen everyone who might have a heart attack one day.

On the other hand, in certain clinical contexts or on the basis of specific evocative symptoms, there, yes, an electrocardiogram can be beneficial.

Back to RT-PCR and Ct (Cycle Time or Cycle Threshold).

In the case of an infectious disease, especially a viral one, the notion of contagiousness is another important element.

Since some scientific circles consider that an asymptomatic person can transmit the virus, they believe it is important to test for the presence of virus, even if the person is asymptomatic, thus extending the indication of RT-PCR to everyone.

Are RT-PCR tests good tests for contagiousness?

This question brings us back to the notion of viral load and therefore Ct.

The relationship between contagiousness and viral load is disputed by some people and no formal proof, to date, allows us to make a decision.

However, common sense gives obvious credence to the notion that the more virus a person has inside him or her, especially in the upper airways (oropharynx and nasopharynx), with symptoms such as coughing and sneezing, the higher the risk of contagiousness, proportional to the viral load and the importance of the person’s symptoms.

This is called common sense, and although modern medicine has benefited greatly from the contribution of science through statistics and Evidence-Based Medicine (EBM), it is still based primarily on common sense, experience and empiricism.

Medicine is the art of healing.

No test measures the amount of virus in the sample!

RT-PCR is qualitative: positive (presence of the virus) or negative (absence of the virus).

This notion of quantity, therefore of viral load, can be estimated indirectly by the number of amplification cycles (Ct) used to highlight the virus sought.

  • The lower the Ct used to detect the virus fragment, the higher the viral load is considered to be (high).

  • The higher the Ct used to detect the virus fragment, the lower the viral load is considered to be (low).

Thus, the French National Reference Centre (CNR), in the acute phase of the pandemic, estimated that the peak of viral shedding occurred at the onset of symptoms, with an amount of virus corresponding to approximately 108 (100 million) copies of SARS-CoV-2 viral RNA on average (French COVID-19 cohort data) with a variable duration of shedding in the upper airways (from 5 days to more than 5 weeks) [19].

This number of 108 (100 million) copies/μl corresponds to a very low Ct.

A Ct of 32 corresponds to 10-15 copies/μl.

A Ct of 35 corresponds to about 1 copy/μl.

Above Ct 35, it becomes impossible to isolate a complete virus sequence and culture it!

In France and in most countries, Ct levels above 35, even 40, are still used even today!

The French Society of Microbiology (SFM) issued an opinion on September 25, 2020 in which it does not recommend quantitative results, and it recommends to make positive up to a Ct of 37 for a single gene [20]!

With 1 copy/μl of a sample (Ct 35), without cough, without symptoms, one can understand why all these doctors and scientists say that a positive RT-PCR test means nothing, nothing at all in terms of medicine and clinic!

Positive RT-PCR tests, without any mention of Ct or its relation to the presence or absence of symptoms, are used as is by our governments as the exclusive argument to apply and justify their policy of severity, austerity, isolation and aggression of our freedoms, with the impossibility to travel, to meet, to live normally!

There is no medical justification for these decisions, for these governmental choices!

In an article published on the website of the New York Times (NYT) on Saturday, August 29, American experts from Harvard University are surprised that RT-PCR tests as practiced can serve as tests of contagiousness, even more so as evidence of pandemic progression in the case of SARS-CoV-2 infection [21].

According to them, the threshold (Ct) considered results in positive diagnoses in people who do not represent any risk of transmitting the virus!

The binary “yes/no” answer is not enough, according to this epidemiologist from the Harvard University School of Public Health.

“It’s the amount of virus that should dictate the course of action for each patient tested. »

The amount of virus (viral load); but also and above all the clinical state, symptomatic or not of the person!

This calls into question the use of the binary result of this RT-PCR test to determine whether a person is contagious and must follow strict isolation measures.

These questions are being raised by many physicians around the world, not only in the United States but also in France, Belgium (Belgium Health Experts Demand Investigation Of WHO For Faking Coronavirus Pandemic), France, Germany, Italy, the United Kingdom, the United States and the United Kingdom. in Germany, Spain…

According to them:

We are going to put tens of thousands of people in confinement, in isolation, for nothing. » [22]. 22] And inflict suffering, anguish, economic and psychological dramas by the thousands!

Most RT-PCR tests set the Ct at 40, according to the NYT. Some set it at 37.

“Tests with such high thresholds (Ct) may not only detect live virus but also gene fragments, remnants of an old infection that do not represent any particular danger,” the experts said.

A virologist at the University of California admits that an RT-PCR test with a Ct greater than 35 is too sensitive. A more reasonable threshold would be between 30 and 35, she adds.

Almost no laboratory specifies the Ct (number of amplification cycles performed) or the number of copies of viral RNA per sample μl.

Here is an example of a laboratory result (approved by Sciensano, the Belgian national reference center) in an RT-PCR negative patient:

No mention of Ct.

In the NYT, experts compiled three datasets with officials from the states of Massachusetts, New York and Nevada that mention them.

Conclusion?

“Up to 90% of the people who tested positive did not carry a virus. »

The Wadworth Center, a New York State laboratory, analyzed the results of its July tests at the request of the NYT: 794 positive tests with a Ct of 40.

With a Ct threshold of 35, approximately half of these PCR tests would no longer be considered positive,” said the NYT.

“And about 70% would no longer be considered positive with a Ct of 30! “

In Massachusetts, between 85 and 90% of people who tested positive in July with a Ct of 40 would have been considered negative with a Ct of 30, adds the NYT. And yet, all these people had to isolate themselves, with all the dramatic psychological and economic consequences, while they were not sick and probably not contagious at all.

In France, the Centre National de Référence (CNR), the French Society of Microbiology (SFM) continue to push Ct to 37 and recommend to laboratories to use only one gene of the virus as a primer.

I remind you that from Ct 32 onwards, it becomes very difficult to culture the virus or to extract a complete sequence, which shows the completely artificial nature of this positivity of the test, with such high Ct levels, above 30.

Similar results were reported by researchers from the UK Public Health Agency in an article published on August 13 in Eurosurveillance: “The probability of culturing the virus drops to 8% in samples with Ct levels above 35.”

In addition, currently, the National Reference Center in France only evaluates the sensitivity of commercially available reagent kits, not their specificity: serious doubts persist about the possibility of cross-reactivity with viruses other than SARS-CoV-2, such as other benign cold coronaviruses.

It is potentially the same situation in other countries, including Belgium.

Similarly, mutations in the virus may have invalidated certain primers (genes) used to detect SARS-CoV-2: the manufacturers give no guarantees on this, and if the AFP fast-checking journalists tell you otherwise, test their good faith by asking for these guarantees, these proofs.

If they have nothing to hide and if what I say is false, this guarantee will be provided to you and will prove their good faith.

  1. We must demand that the RT-PCR results be returned mentioning the Ct used because beyond Ct 30, a positive RT-PCR test means nothing.

  2. We must listen to the scientists and doctors, specialists, virologists who recommend the use of adapted Ct, lower, at 30. An alternative is to obtain the number of copies of viral RNA/μl or /ml sample.

  3. We need to go back to the patient, to the person, to his or her clinical condition (presence or absence of symptoms) and from there to judge the appropriateness of testing and the best way to interpret the result.

Until there is a better rationale for PCR screening, with a known and appropriate Ct threshold, an asymptomatic person should not be tested in any way.

Even a symptomatic person should not automatically be tested, as long as they can place themselves in isolation for 7 days.

Let’s stop this debauchery of RT-PCR testing at too high Ct levels and return to clinical, quality medicine.

Once we understand how RT-PCR testing works, it becomes impossible to let the current government routine screening strategy, inexplicably supported by the virologists in the safety councils, continue.

My hope is that, finally, properly informed, more and more people will demand that this strategy be stopped, because it is all of us, enlightened, guided by real benevolence and common sense, who must decide our collective and individual destinies.

No one else should do it for us, especially when we realize that those who decide are no longer reasonable or rational.

Summary of important points :

  • The RT-PCR test is a laboratory diagnostic technique that is not well suited to clinical medicine.

  • It is a binary, qualitative diagnostic technique that confirms (positive test) or not (negative test) the presence of an element in the medium being analyzed. In the case of SARS-CoV-2, the element is a fragment of the viral genome, not the virus itself.

  • In medicine, even in an epidemic or pandemic situation, it is dangerous to place tests, examinations, techniques above clinical evaluation (symptoms, signs). It is the opposite that guarantees quality medicine.

  • The main limitation (weakness) of the RT-PCR test, in the current pandemic situation, is its extreme sensitivity (false positive) if a suitable threshold of positivity (Ct) is not chosen. Today, experts recommend using a maximum Ct threshold of 30.

  • This Ct threshold must be informed with the positive RT-PCR result so that the physician knows how to interpret this positive result, especially in an asymptomatic person, in order to avoid unnecessary isolation, quarantine, psychological trauma.

  • In addition to mentioning the Ct used, laboratories must continue to ensure the specificity of their detection kits for SARS-CoV-2, taking into account its most recent mutations, and must continue to use three genes from the viral genome being studied as primers or, if not, mention it.

Overall Conclusion

Is the obstinacy of governments to use the current disastrous strategy, systematic screening by RT-PCR, due to ignorance?

Is it due to stupidity?

To a kind of cognitive trap trapping their ego?

In any case, we should be able to question them, and if among the readers of this article there are still honest journalists, or naive politicians, or people who have the possibility to question our rulers, then do so, using these clear and scientific arguments.

It is all the more incomprehensible that our rulers have surrounded themselves with some of the most experienced specialists in these matters.

If I have been able to gather this information myself, shared, I remind you, by competent people above all suspicion of conspiracy, such as Hélène Banoun, Pierre Sonigo, Jean-François Toussaint, Christophe De Brouwer, whose intelligence, intellectual honesty and legitimacy cannot be questioned, then the Belgian, French and Quebec scientific advisors, etc., know all this as well.

So?

What’s going on?

Why continue in this distorted direction, obstinately making mistakes?

It is not insignificant to reimpose confinements, curfews, quarantines, reduced social bubbles, to shake up again our shaky economies, to plunge entire families into precariousness, to sow so much fear and anxiety generating a real state of post-traumatic stress worldwide, to reduce access to care for other pathologies that nevertheless reduce life expectancy much more than COVID-19!

Is there intent to harm?

Is there an intention to use the alibi of a pandemic to move humanity towards an outcome it would otherwise never have accepted? In any case, not like that!

Would this hypothesis, which modern censors will hasten to label “conspiracy”, be the most valid explanation for all this?

Indeed, if we draw a straight line from the present events, if they are maintained, we could find ourselves once again confined with hundreds, thousands of human beings forced to remain inactive, which, for the professions of catering, entertainment, sales, fairgrounds, itinerants, canvassers, risks being catastrophic with bankruptcies, unemployment, depression, suicides by the hundreds of thousands.

The impact on education, on our children, on teaching, on medicine with long planned care, operations, treatments to be cancelled, postponed, will be profound and destructive.

“We risk a looming food crisis if action is not taken quickly.”

It is time for everyone to come out of this negative trance, this collective hysteria, because famine, poverty, massive unemployment will kill, mow down many more people than SARS-CoV-2!

Does all this make sense in the face of a disease that is declining, over-diagnosed and misinterpreted by this misuse of overly sensitively calibrated PCR tests?

For many, the continuous wearing of the mask seems to have become a new norm.

Even if it is constantly downplayed by some health professionals and fact-checking journalists, other doctors warn of the harmful consequences, both medical and psychological, of this hygienic obsession which, maintained permanently, is in fact an abnormality!

What a hindrance to social relations, which are the true foundation of a physically and psychologically healthy humanity!

Some dare to find all this normal, or a lesser price to pay in the face of the pandemic of positive PCR tests.

Isolation, distancing, masking of the face, impoverishment of emotional communication, fear of touching and kissing even within families, communities, between relatives…

Spontaneous gestures of daily life hindered and replaced by mechanical and controlled gestures …

Terrified children, kept in permanent fear and guilt…

All this will have a deep, lasting and negative impact on human organisms, in their physical, mental, emotional and representation of the world and society.

This is not normal!

We cannot let our rulers, for whatever reason, organize our collective suicide any longer.

Translated from French by Global Research. Original source: Mondialisation.ca

Dr Pascal Sacré is a physician specialized in critical care, author and renowned public health analyst, Charleroi, Belgium. He is a Research Associate of the  entre for Research on Globalization (CRG)

*  *  *

Professionals whose references and comments are the basis of this article in its scientific aspect (especially and mainly on RT-PCR):

1) Hélène Banoun

https://www.researchgate.net/profile/Helene_Banoun

PhD, Pharmacist biologist

Former INSERM Research Officer

Former intern at the Paris Hospitals

2) Pierre Sonigo

Virologist

Research Director INSERM, worked at the Pasteur Institute

Heads the Virus Genetics Laboratory in Cochin, Paris.

Participated in 1985 in the sequencing of the AIDS virus.

3) Christophe De Brouwer

PhD in Public Health Science

Honorary Professor at the School of Public Health at ULB, Belgium

4) Jean-François Toussaint

Doctor, Professor of Physiology at the University of Paris-Descartes

Director of IRMES, Institute for BioMedical Research and Sports Epidemiology

Former member of the High Council of Public Health

Read More

Continue Reading

Uncategorized

Stock indexes are breaking records and crossing milestones – making many investors feel wealthier

The S&P 500 topped 5,000 on Feb. 9, 2024, for the first time. The Dow Jones Industrial Average will probably hit a new big round number soon t…

Published

on

By

Major stock indexes were hitting or nearing records in February 2024, as they were in early 2020 when this TV chyron appeared. AP Photo/Richard Drew

The S&P 500 stock index topped 5,000 for the first time on Feb. 9, 2024, exciting some investors and garnering a flurry of media coverage. The Conversation asked Alexander Kurov, a financial markets scholar, to explain what stock indexes are and to say whether this kind of milestone is a big deal or not.

What are stock indexes?

Stock indexes measure the performance of a group of stocks. When prices rise or fall overall for the shares of those companies, so do stock indexes. The number of stocks in those baskets varies, as does the system for how this mix of shares gets updated.

The Dow Jones Industrial Average, also known as the Dow, includes shares in the 30 U.S. companies with the largest market capitalization – meaning the total value of all the stock belonging to shareholders. That list currently spans companies from Apple to Walt Disney Co.

The S&P 500 tracks shares in 500 of the largest U.S. publicly traded companies.

The Nasdaq composite tracks performance of more than 2,500 stocks listed on the Nasdaq stock exchange.

The DJIA, launched on May 26, 1896, is the oldest of these three popular indexes, and it was one of the first established.

Two enterprising journalists, Charles H. Dow and Edward Jones, had created a different index tied to the railroad industry a dozen years earlier. Most of the 12 stocks the DJIA originally included wouldn’t ring many bells today, such as Chicago Gas and National Lead. But one company that only got booted in 2018 had stayed on the list for 120 years: General Electric.

The S&P 500 index was introduced in 1957 because many investors wanted an option that was more representative of the overall U.S. stock market. The Nasdaq composite was launched in 1971.

You can buy shares in an index fund that mirrors a particular index. This approach can diversify your investments and make them less prone to big losses.

Index funds, which have only existed since Vanguard Group founder John Bogle launched the first one in 1976, now hold trillions of dollars .

Why are there so many?

There are hundreds of stock indexes in the world, but only about 50 major ones.

Most of them, including the Nasdaq composite and the S&P 500, are value-weighted. That means stocks with larger market values account for a larger share of the index’s performance.

In addition to these broad-based indexes, there are many less prominent ones. Many of those emphasize a niche by tracking stocks of companies in specific industries like energy or finance.

Do these milestones matter?

Stock prices move constantly in response to corporate, economic and political news, as well as changes in investor psychology. Because company profits will typically grow gradually over time, the market usually fluctuates in the short term, while increasing in value over the long term.

The DJIA first reached 1,000 in November 1972, and it crossed the 10,000 mark on March 29, 1999. On Jan. 22, 2024, it surpassed 38,000 for the first time. Investors and the media will treat the new record set when it gets to another round number – 40,000 – as a milestone.

The S&P 500 index had never hit 5,000 before. But it had already been breaking records for several weeks.

Because there’s a lot of randomness in financial markets, the significance of round-number milestones is mostly psychological. There is no evidence they portend any further gains.

For example, the Nasdaq composite first hit 5,000 on March 10, 2000, at the end of the dot-com bubble.

The index then plunged by almost 80% by October 2002. It took 15 years – until March 3, 2015 – for it return to 5,000.

By mid-February 2024, the Nasdaq composite was nearing its prior record high of 16,057 set on Nov. 19, 2021.

Index milestones matter to the extent they pique investors’ attention and boost market sentiment.

Investors afflicted with a fear of missing out may then invest more in stocks, pushing stock prices to new highs. Chasing after stock trends may destabilize markets by moving prices away from their underlying values.

When a stock index passes a new milestone, investors become more aware of their growing portfolios. Feeling richer can lead them to spend more.

This is called the wealth effect. Many economists believe that the consumption boost that arises in response to a buoyant stock market can make the economy stronger.

Is there a best stock index to follow?

Not really. They all measure somewhat different things and have their own quirks.

For example, the S&P 500 tracks many different industries. However, because it is value-weighted, it’s heavily influenced by only seven stocks with very large market values.

Known as the “Magnificent Seven,” shares in Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia and Tesla now account for over one-fourth of the S&P 500’s value. Nearly all are in the tech sector, and they played a big role in pushing the S&P across the 5,000 mark.

This makes the index more concentrated on a single sector than it appears.

But if you check out several stock indexes rather than just one, you’ll get a good sense of how the market is doing. If they’re all rising quickly or breaking records, that’s a clear sign that the market as a whole is gaining.

Sometimes the smartest thing is to not pay too much attention to any of them.

For example, after hitting record highs on Feb. 19, 2020, the S&P 500 plunged by 34% in just 23 trading days due to concerns about what COVID-19 would do to the economy. But the market rebounded, with stock indexes hitting new milestones and notching new highs by the end of that year.

Panicking in response to short-term market swings would have made investors more likely to sell off their investments in too big a hurry – a move they might have later regretted. This is why I believe advice from the immensely successful investor and fan of stock index funds Warren Buffett is worth heeding.

Buffett, whose stock-selecting prowess has made him one of the world’s 10 richest people, likes to say “Don’t watch the market closely.”

If you’re reading this because stock prices are falling and you’re wondering if you should be worried about that, consider something else Buffett has said: “The light can at any time go from green to red without pausing at yellow.”

And the opposite is true as well.

Alexander Kurov does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Read More

Continue Reading

Uncategorized

Marriage is not as effective an anti-poverty strategy as you’ve been led to believe

Marriage on its own won’t do away with child poverty, and in fact it can create even more instability for low-income families.

Published

on

Despite the popular guidance, marriage can be an economic risk for single parents with unstable partners. simarik/iStock/Getty Images Plus

Brides.com predicts that 2024 will be the “year of the proposal” as engagements tick back up after a pandemic-driven slowdown.

Meanwhile, support for marriage has found new grist in recent books, including sociologist Brad Wilcox’s “Get Married: Why Americans Must Defy the Elites, Forge Strong Families and Save Civilization” and economist Melissa Kearney’s “The Two-Parent Privilege.”

Kearney’s book was hailed by economist Tyler Cowen as possibly “the most important economics and policy book of this year.” This is not because it treads new ground but because, as author Kay Hymowitz writes, it breaks the supposed “taboo about an honest accounting of family decline.”

These developments are good news for the marriage promotion movement, which for decades has claimed that marriage supports children’s well-being and combats poverty. The movement dates back at least to the U.S. Department of Labor’s Moynihan Report of 1965, which argued that family structure aggravated Black poverty.

Forty years after the Moynihan Report, George W. Bush-era programs such as the Healthy Marriage Initiative sought to enlist churches and other community groups in an effort to channel childbearing back into marriage. These initiatives continue today, with the federally subsidized Healthy Marriage and Responsible Fatherhood programs.

Still, nearly 30% of U.S. children live in single-parent homes today, compared with 10% in 1965.

We are law professors who have written extensively about family structure and poverty. We, and others, have found that there is almost no evidence that federal programs that promote marriage have made a difference in encouraging two-parent households. That’s in large part because they forgo effective solutions that directly address poverty for measures that embrace the culture wars.

Child hangs upside down on playground equipment
Having a parent who has a college degree makes kids less likely to live in poverty than having parents who are married. Mayur Kakade/Moment Collection via Getty Images

Marriage and social class

Today’s marriage promoters claim that marriage should not be just for elites. The emergence of marriage as a marker of class, they believe, is a sign of societal dysfunction.

According to census data released in 2021, 9.5% of children living with two parents – and 7.5% with married parents – lived below the poverty level, compared with 31.7% of children living with a single parent.

Kearney’s argument comes down to: 1 + 1 = 2. Two parents have more resources, including money and time to spend with children, than one. She marshals extensive research designed to show that children from married couple families are more likely to graduate from high school, complete college and earn higher incomes as adults than the children of single parents.

It is undoubtedly true that two parents – that is, two nonviolent parents with reliable incomes and cooperative behavior – have more resources for their children than one parent who has to work two jobs to pay the rent. However, this equation does not address causation. In other words, parents who have stable incomes and behaviors are more likely to stay together than parents who don’t.

Ethnographic studies indicate, for example, that the most common reasons unmarried women are no longer with the fathers of their children are the men’s violent behavior, infidelity and substance abuse.

Moreover, income volatility disproportionately affects parents who don’t go to college. So while they may have more money to invest in children together than apart, when one of these parents experiences a substantial drop in income, the other parent may have to decide whether to support the partner or the children on what is often a meager income.

The impact of having single parents also plays out differently by race and class. As sociologist and researcher Christina Cross explains, “Living apart from a biological parent does not carry the same cost for Black youths as for their white peers, and being raised in a two-parent family is not equally beneficial.”

For example, Cross found that living in a single-mother family is less likely to affect high school completion rates for Black children than for white children. Also, Black families tend to be more embedded in extended family than white families, and this additional support system may help protect children from negative outcomes associated with single-parent households.

Making men more ‘marriageable’

Kearney, to her credit, does note that economic insecurity largely explains what is happening to working-class families, and that no parent should have to tolerate violence or substance abuse. But she doubles down on the need to restore a norm of two-parent families.

Many of her policy prescriptions are sensible. She advocates for better opportunities for low-income men – to make them, in the words of sociologist William Julius Wilson, “marriageable.” Such policies would include wage subsidies to improve their job opportunities, investment in community colleges that provide skills training, and the removal of questions about criminal histories from job applications, so that candidates who have previously been incarcerated are not immediately disqualified.

A new marriage model

What marriage promotion efforts overlook, however, are the underlying changes in what marriage has become – both legally and practically.

The new marriage model rests on three premises.

The first is a moral command: Have sex if you want to, but don’t have children until you are ready. While the shotgun marriage once served as the primary response to unplanned pregnancy, such marriages today often derail education and careers and are more likely to result in divorce than other marriages. Research shows that lower-income women’s pregnancies are much more likely to be unplanned.

The second is the ability to pick a partner who will support you and assume joint responsibility for parenting. As women have attained more economic independence, they are less in need of men to raise children, particularly if their partners are insensitive or abusive. With healthy relationships, couples pick partners based on trust, commitment and equal respect. This is more difficult to do in communities with high rates of incarceration and few opportunities for stable employment.

And the third is economic and behavioral stability. Instability undermines even committed unions. Parents who wait until they find the right partner and have stable lives bring a lot more to parenting, whether they marry or not.

We believe that creating opportunities for low-income parents to reach this middle-class model is likely to be the most effective marriage promotion policy.

Economic support is key

In relationships that fall outside of these premises, 1 + 1 often becomes 1 + -1, which equals 0.

Being committed to a partner who can’t pay speeding tickets, runs up credit card bills, comes home drunk or can’t be relied on to pick up the children after school is not a recipe for success.

Economic principles suggest that businesses with more volatile income streams need a stronger capital base to withstand the downturns. Working-class couples who face economic insecurity see commitment as similarly misguided; without a capital base, a downturn for one partner can wipe out the other.

The Biden administration’s child tax credit expansion included in the American Rescue Plan Act of 2021 helped cut the child poverty rate – after accounting for government assistance – to a record low that year. It did more to address child poverty than marriage promotion efforts have ever done.

Researchers have described such income-support policies as the “ultimate multipurpose policy instrument.” They improve the economic circumstances of single-parent families and, in doing so, may also provide greater support for two-parent relationships.

Policymakers know how to solve child poverty – and these measures are far more effective than efforts to put two married parents in every household.

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

Read More

Continue Reading

Uncategorized

Divergences And Other Technical Warnings

While the bulls remain entirely in control of the market narrative, divergences and other technical warnings suggest becoming more cautious may be prudent….

Published

on

While the bulls remain entirely in control of the market narrative, divergences and other technical warnings suggest becoming more cautious may be prudent.

In January 2020, we discussed why we were taking profits and reducing risk in our portfolios. At the time, the market was surging, and there was no reason for concern. However, just over a month later, the markets fell sharply as the “pandemic” set in. While there was no evidence at the time that such an event would occur, the markets were so exuberant that only a trigger was needed to spark a correction.

“When you sit down with your portfolio management team, and the first comment made is ‘this is nuts,’ it’s probably time to think about your overall portfolio risk. On Friday, that was how the investment committee both started and ended – ‘this is nuts.'”January 11th, 2020.

As the S&P 500 index approaches another psychological milestone of 5000, we again see numerous warning signs emerging that suggest the risk of a correction is elevated. Does that mean a correction will ensue tomorrow? Of course not. As the old saying goes, “Markets can remain irrational longer than you can remain solvent.” However, just as in 2020, it took more than a month before the warnings became reality.

While discussing the risk of a correction, it was just last October that we discussed why a rally was likely. The reasons at that time were almost precisely the opposite of what we see today. There was extremely bearish investor sentiment combined with negative divergences of technical indicators, and analysts could not cut year-end price targets fast enough.

What happened next was the longest win streak in 52 years that pushed the market to new all-time highs.

The last time we saw such a rally was between November 1971 and February 1972. Of course, the “Nifty Fifty” rally preceded the 1973-74 bear market. Then, like today, a handful of stocks were driving the markets higher as interest rates were elevated along with inflation.

That 70s show

While there are many differences today versus then, there are reasons for concern.

The “New Nifty 50”

My colleague Albert Edwards at Societe Generale recently discussed the rising capitalization of the technology market.

I never thought we would get back to the point where the value of the US tech sector once again comprised an incredible one third of the US equity market. This just pips the previous all-time peak seen on 17 July 2000 at the height of the Nasdaq tech bubble.

What’s more, this high has been reached with only three of the ‘Magnificant-7’ internet stocks actually being in the tech sector (Apple, Microsoft, and Nvidia)! If you add in the market cap of Amazon, Meta, Alphabet (Google) and Tesla, then the IT and ‘internet’ stocks dominate like never before.”

US Technology Market Cap

Of course, there are undoubtedly important differences between today and the “Dot.com” era. The most obvious is that, unlike then, technology companies generate enormous revenues and profits. However, this was the same with the “Nifty-50” in the early 70s. The problem is always two-fold: 1) the sustainability of those earnings and growth rates and 2) the valuations paid for them. If something occurs that slows earnings growth, the valuation multiples will get revised lower.

While the economic backdrop has seemingly not caught up with technology companies yet, the divergence of corporate profits between the Technology sector and the rest of the market is likely unsustainable.

Technology EPS vs rest of the market

That inability to match the pace of expectations is already occurring. That divergence poses a substantial risk to investors.

US Trailing Technology EPS not keeping pace with estimates

Again, while the risk is somewhat evident, the “bullishness” of the market can last much longer than logic would predict. Valuations, as always, are a terrible market timing device; however, they tell you a lot about long-term returns from markets. Currently, the valuations paid for technology stocks are alarming and hard to justify.

However, despite valuations, those stocks can keep ramping higher in the short term (6-18 months) as the speculative flows continue.

Tech sector absorbing all market inflows.

However, over the next few months, some divergences and indicators suggest caution is advisable.

Technical Divergences Add To The Risk

Each weekend in the BullBearReport, investor sentiment is something that we track closely. The reason is that when investor sentiment is extremely bullish or bearish, such is the point where reversals have occurred. As Sam Stovall, the investment strategist for Standard & Poor’s, once stated:

“If everybody’s optimistic, who is left to buy? If everybody’s pessimistic, who’s left to sell?”

Currently, everyone is very optimistic about the market. Bank of America, one of the world’s largest asset custodians, monitors risk positioning across equities. Currently, “risk love” is in the 83rd percentile and at levels that have generally preceded short-term corrective actions.

Global Equity risk

At the same time, retail and professional investors are also exuberant, as noted on Tuesday.

“Another measure of bullish sentiment is comparing investor sentiment to the volatility index. Low levels of volatility exist when there is little concern about a market correction. Low volatility and bullish sentiment are often cozy roommates. The chart below compares the VIX/Sentiment ratio to the S&P Index. Once again, this measure suggests that markets are at risk of a short-term price correction.”

Sentiment / Vix ratio versus the market.

However, while everyone is exceedingly bullish on the market, the internal divergence of stocks sends warning signals. Andrei Sota recently showed that market breadth is weakening despite record highs. Note that prior market peaks were accompanied by peaks in the percentage of stocks above their 20, 50, and 200-day moving averages. To further hammer home this point, consider the following Tweet from Jason Goepfert of Sentimentrader:

Man, this is weird. The S&P 500 is within .35% of a 3-year high. Fewer than 40% of its stocks are above their 10-day avg, fewer than 60% above their 50-day, and fewer than 70% above their 200-day. Since 1928, that’s only happened once before: August 8, 1929.

market breadth

That negative divergence between stocks making new highs and the underlying breadth is a good reason to be more cautious with allocations currently.

As I started this commentary, “This is nuts.”

So Why Not Go To Cash

This analysis raises an obvious question.

“Well, if this is nuts, why not go to cash and wait out the correction and then buy back in.”

The best answer to that question came from Albert Edwards this week.

“I cast my mind back to 2000 where the narrative around the then IT bubble was incredibly persuasive, just as it is now. But the problem that skeptical investors have now, as they did in 1999, is that selling, or underweighting US IT, can destroy performance if one exits too early.”

Regarding speculative bull markets, as noted above, the “this is nuts” part can remain “nuts” for much longer than you think. Therefore, given that we have to generate returns for our clients or suffer career risk, we must be careful not to exit the markets too early…or too late.

Therefore, regardless of your personal views, the bull market that started in October remains intact. The speculative frenzy is still present. As such, we are reducing equity exposure modestly and rebalancing risk by following our basic procedures.

  1. Trim Winning Positions back to their original portfolio weightings. (ie. Take profits)
  2. Sell Those Positions That Aren’t Working. If they don’t rally with the market during a bounce, they will decline when it sells off again.
  3. Move Trailing Stop Losses Up to new levels.
  4. Review Your Portfolio Allocation Relative To Your Risk Tolerance. If you have an aggressive allocation to equities at this point of the market cycle, you may want to try to recall how you felt during 2008. Raise cash levels and increase fixed income accordingly to reduce relative market exposure.

Could I be wrong? Absolutely.

But a host of indicators are sending us an early warning.

What’s worse:

  1. Missing out temporarily on some additional short-term gains or
  2. Spending time getting back to even which is not the same as making money.

Opportunities are made up far easier than lost capital.” – Todd Harrison

The post Divergences And Other Technical Warnings appeared first on RIA.

Read More

Continue Reading

Trending