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Tillman Gerngross on Omicron: ‘It is a grim situation…we’re going to see a significant drop in vaccine efficacy’

Tillman Gerngross, the rarely shy Dartmouth professor, biotech entrepreneur and antibody expert, has been warning for over a year that the virus behind Covid-19 would likely continue to mutate, potentially in ways that avoid immunity from infection and…

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Tillman Gerngross, the rarely shy Dartmouth professor, biotech entrepreneur and antibody expert, has been warning for over a year that the virus behind Covid-19 would likely continue to mutate, potentially in ways that avoid immunity from infection and the best defenses scientists developed. He spun out a company, Adagio, to build a universal antibody, one that could snuff out any potential mutation.

As the world scrambles to face a new variant, Omicron, that prediction looks particularly prescient. Remarkably little is known yet about the new variant. Companies and academic labs have not even had enough time yet to run the most basic studies in lab dishes to see whether antibody treatments and antibodies produced from vaccination can still neutralize the virus.

Jesse Bloom

But, as Gerngross explained in an interview with Endpoints News editor John Carroll late Sunday, we know from sequencing its genome that among the virus’s more than 30 mutations, are significant changes in the three regions that most neutralizing antibodies — those made in the lab and those from infection or vaccination — bind to.

That suggests, he said, that “several” of the antibody treatments now authorized in the US will have reduced efficacy. He declined to name which will be blunted, but Jesse Bloom, an evolutionary virologist at Fred Hutch, had fewer compunctions: Eli Lilly and Regeneron will be impacted, Bloom said on Twitter. Vir and AstraZeneca should fare better, Bloom said.

The impact on vaccine effectiveness should be less severe. Vaccines work not only via antibodies but also T cells and other parts of the immune cells. Still, Gerngross said, there will likely be a “significant” impact.

“I think it is super worrisome,” he said. “It is a grim situation.”

Precisely how significant? Will it drop below 50%? Gerngross wouldn’t say. But his predictions are in line with fears from others in the field. Bob Shafer, a Stanford professor tracking variants, cautioned that lab studies would tell us more, but said in an email that “based on the specific mutations in the Omicron variant, vaccine efficacy will likely decrease more than what has previously been observed with all other variants.”

Not everyone is so grim. Emory professor Boghuma Kabisen Titanji noted in an interview with The Atlantic Monday morning that over the course of the pandemics, other variants, such as Beta, partially evaded but petered out before they could make a major impact. “It’s way too early,” she said, echoing caution from other experts. “What’s known so far absolutely warrants attention—not panic.”

Kathleen Neuzil, director of the center for vaccine development and global health at Johns Hopkins, said in an email that “based on prior data, I expect some degree of protection particularly against severe disease.”

Still, the risks Omicron raises underscores what Gerngross others have been saying for months: The pandemic isn’t over. And governments need to back measures that get vaccines to the entire globe — Africa remains just 6% vaccinated — alongside other interventions, such as antiviral pills (which should still work well against Omicron) and universal antibodies that can stand up against variants.

To that end, Adagio’s antibody, now in clinical trials, appears unaffected by the variant, Gerngross added. And there’s significant sums at stake, alongside the public health crisis. Adagio’s stock soared 34% on Friday, as investors started to size up who is most likely to benefit, and who loses. — Jason Mast

John Carroll: So Tillman, we’re onto Omicron, and this one’s got everybody freaked out. I wanted to get your thoughts on that. What are you thinking right now?

Tillman Gerngross: That’s a loaded question, my friend.

JC: I hope so.

TG: Let me start with what we know, and then let me tell you, I think, how that fits into the larger narrative. So first of all, when you look at the antibody response to the exposure of a receptor binding domain, either through a natural infection or a vaccine, what we know is most antibodies don’t do anything. They bind, but they don’t neutralize. They’re kind of useless. A subset of those antibodies that bind actually neutralize. They do something useful. They prevent the virus from actually engaging ACE2 as a receptor, and then getting into cells and then infecting them.

That’s where we get the therapeutic or prophylactic benefit of an antibody. Okay? What’s extremely worrisome about this situation is that when we look at this antibody response — again, whether it’s a natural infection or whether it’s a vaccine — the vast majority of antibodies, as we have found over the past year, bind to three distinct classes, so they bind to three distinct regions. In fact, they’re so distinct that people, whether they get infected in Australia, here in the US, or in Europe, you look at the antibody sequences, they all converge around very, very similar binding events, which is unusual. That’s not what we normally see.

So in this case, we have got these three classes of binding events. And I would say, I don’t know of the exact number and we’re looking into that right now, but the majority of antibodies that are generated in response to a natural infection or vaccination, bind to one of these three classes or fall into one of these three classes. And what we have now is a virus that has mutated all three of these in a way where we know that these mutations have a high probability of preventing binding of antibodies. That is why people are freaked out.

JC: What have you been able to determine over the weekend about this particular variant?

TG: What we’ve already done in advance of this, we’ve scanned, how does Adagio 20 (ADG20), our lead antibody, which particular mutations could possibly impact binding and therefore neutralization of Adagio 20? So we already know what the vulnerable sites are. And the good news is that as far as this new variant is concerned, none of them are represented in this new variant.

However, the bad news is John, several of the antibodies that are currently authorized under EUA are going to be affected.

JC: Which ones?

TG: I can’t tell you that. That’s all going to come out in the near future. But what we thought, we have got to have filled this gap, that is not going to be the case as the data comes in, is my prediction.

JC: Okay. So how closely have you been able to look at this over the weekend? What is the information that you have that allows you to make these determinations? Do you think that you’ve got a pretty good look at this thing?

TG: Yeah. It’s not just us. It’s others. People have extensively characterized the interaction of these antibodies that are currently authorized under EUA or in late-stage clinical development, and have looked at what mutations will knock these guys out. So we basically have a list for each antibody of what is going to knock out binding.

So when you now look at this new variant emerging, you can just compare that list with what the new mutations are in the new variant. And you can say, “Yep, that one’s bad, that one’s bad, that one’s bad, that one’s still going to work, that one’s bad.” So you can go through that exercise.

JC: But the question was more along the lines of, what do you know about Omicron? How much information is out there now about Omicron that allows people like you to make judgments and make determinations related to what this is?

TG: You only need one piece of information, which is what’s the sequence? Because once we know the sequence, we know what amino acids have been changed. And once we know that, we know how those amino acid changes, impact binding. And if the antibody no longer binds, it no longer neutralizes and protects.

JC: So what do you think about the vaccines?

TG: Well, there’s more bad news here, John. Because what happens is, when we looked at this … And I not going to give you the exact numbers, because I don’t know them yet, but I’ve asked my team to look into that. When you look at the response to a vaccination, or an infection for that matter, the majority of antibodies bind, they don’t do anything. Forget those.

There’s a subset that binds and neutralizes. Those are the ones we care about. And what do we have now? We have a situation where the majority of antibodies that follow this class one, two, three, no longer bind. So that means what your vaccination produces in terms of antibodies, the majority of those are not going to bind anymore. So I think or I would predict that we’re going to see a significant drop in vaccine efficacy.

JC: So to the order of what? There’s all this discussion about what order of efficacy you need. The FDA had laid out 50% plus at the beginning of this. There are those who have made arguments that you don’t need that, but in any case, didn’t really stick. But do you have any idea what order of efficacy we’re going to be seeing here?

TG: I think it’s super worrisome. If I just look at our analysis of looking at people who have been vaccinated, we look at their antibody response, we look at where they bind, and we look at how these mutations impact those binding events, it is a grim situation.

How that now translates into efficacy. I know you want a number. I’m not going to give you that number, John, because I just don’t know.

Anyone in a public health position that looks at the information that we have, and others have, and isn’t super concerned, is just not doing their job.

JC: How about above or below 50%?

TG: It’s a complicated question, John, because when you talk about efficacy, remember the first vaccine data was within the first couple of months. What we know now is, six months later, it’s already dropping no matter what the variant is. So I’ll give you below 50%, any day if you give me the liberty of choosing the date.

JC: All right. That’s interesting. So you have to be the least surprised person to see a variant coming along. We’ve seen a whole variety of variants coming along. Your whole program design is around the idea that there are going to be variants. But how surprised are you by this particular variant?

TG: Very. Normally, you see intermediates. You see a variant and then all of a sudden, maybe certain elements of different variants get combined. The fact that there’s one that comes out of the box with such a heavy mutational load and is fit and is able to spread … When we saw that, we were like, “This is fake news.” But it isn’t, so this was very surprising.

So let me say one thing. The heavy mutational load is surprising. The event in itself is not surprising. And let me just elaborate on that quickly, because I think it’s very important for people to understand that. What a virus will do is, at the beginning, any mutation that makes the virus more fit or more transmissible, the virus will take on and it will spread because it is just simply fitter and it can spread better. Okay?

That’s at the beginning. What happens in the meantime, though, is that we have a serological response, and all of a sudden, in the population, you see more and more people getting antibodies. And at that point, the virus doesn’t benefit from these transmissibility mutations anymore. At that point, it is being confronted and pressured by an immune response that either comes from vaccination or previous infections.

And at that point, the virus benefits very much from changing amino acids that evade the earlier immune response or evade the earlier vaccine response. And that’s what we expected, and that’s exactly what we’re seeing now. So again, super worrisome.

JC: On Friday, a very eventful day on the long weekend, we also saw Merck report that its antiviral efficacy rate plunged from about 50% down to 30%. There’s been a lot of discussion related to what Merck has and what Pfizer has. What’s your read on that? Was that surprising to you, when you saw that occur? What’s your read as it relates to the antivirals and their position here with a variant like this?

TG: Trials are trials. You’ve got to see the end of the trial, right? And at this point, unfortunately, we had interim data that looked encouraging and promising, that’s good news. And when you actually look at the whole picture, it’s just a much bleaker, bleaker reality that we’re looking at here. So I’m not sure what specifically you’re asking me other than … Look, this whole pandemic has been what looks great on Monday looks like shit on Friday, right? It’s like roller coaster after roller coaster.

And I think any rational person should understand that there are things we don’t know. But one thing I would certainly advocate for is, we need our portfolio of approaches. I think we need vaccines and we need to work on those. We need small molecule antivirals, and we need antibodies. And let’s invest in each of those three, because that’s currently the portfolio of options or tools we have, and I’m not quite seeing that yet.

I would like to see a broader investment, given that there are things we just don’t know and where this virus has repeatedly surprised us. Us, less than others, because — as you pointed out before — we’ve from the beginning, pointed out the vulnerability that these programs have with respect to variants. And now we look like geniuses because everything we said is turning out to be true.

JC: Right. So do you think that this is the last significant variant we’re going to see? Or we’re going to see some more?

TG: Oh, money-back guarantee, this is the last one. There’s not going to be one ever again. Of course, I’m joking. I’ve been saying this from the beginning: the Greek alphabet has 24 letters. We’re at letter 15 and there are going to be more, of course.

JC: Right. So I’m curious about the bigger picture and what your perspective is of that. Right now, Africa’s got a 6% vaccination rate. The affluent nations have much higher percentages, of course, but they still have a lot of vaccine resistance going on. The entire picture is quite muddled and not particularly good.

It seems like we’ve created a kind of an ideal environment for variants to occur around the globe, and to keep on coming back and coming back and coming back. So I wanted to get your own perspective related to where we’re at right now related to the pandemic fight, and whether we’ve just really dropped the ball in a global crisis.

TG: It’s a complicated question. Look, you look back and everyone looks like a genius, right? Hindsight is 20/20 and I don’t want to overplay my cards here. One thing that we have consistently said is, there will be variants and we need to prepare for that. And that’s exactly how we designed the program. And again, now that we’re onto the fifth major variant of concern, Adagio 20 has been able to neutralize every single one of those. That’s a program that if I’m the US government, you should invest in. But they haven’t. And that’s frustrating to me.

And again, it goes back to the portfolio approach. We should have significant investments in each of the three modalities that we know can have an impact. I’m convinced we’re not going to vaccinate ourselves out of the situation, not just because of anti-vaxxers and the resistance to vaccination. The vaccines are not protecting the nine million immune-compromised people that are on chemotherapy. They just are not protected. You can boost them all day long, they’re not going to be protected.

So again, for me, the question is: at what point will government officials understand that we have to have multiple options that are tailored to specific situations to cover the vast majority of people? Not just basically push this vaccine agenda, which I think is useful and has helped, but that’s not the answer. That’s not going to get us through this.

JC: So what are you doing now, as in today or tomorrow, or the day after, to determine how effective your lead program is against Omicron?

TG: That’s a relatively easy answer, John, because what we’ve already done before is, we’ve already monitored each of the positions, so we know what the effect is. And this is now just confirmatory work while we’re actually creating exactly the virus that has been described and we’re going to show that our antibody neutralizes that virus when we know that every single mutation that is present in that virus does not impact binding of Adagio 20, while it does impact the binding of many of the other antibodies that have been authorized under EUAs. So that’s the work and it’s really just confirmatory of what already know.

JC: But specifically, how do you do that? Do you do that in humans and how long does it take?

TG: No, what you do is you recreate the virus in its current form, and then you show in an in vitro assay that you are able to neutralize that virus, just like you would’ve predicted.

JC: How long does that take?

TG: That’s going to take … We are now in November. You’ll see that before the end of the year.

JC: Okay. So you had planned to file the EUA in Q2 of next year.

TG: Yes.

JC: And move from there. Does this change anything along those lines? Do you just simply add the new data to what you’ve got? Or does this change anything for you?

TG: Well, look, every one of these changes that we are seeing has a broader impact. And of course, we expect regulators to pay attention to what we’ve done. They’ve been very helpful in some situations and have been very proactive in, for example, pulling forward our prevention trial.

We expect to have a series of conversations with regulators over the next month and share our data with them and make them aware of the precarious nature of the situation that we’re in. And what they will do in response, that I can’t predict, but we certainly will make an effort to inform them and to educate them.

JC: Okay. But will you push for an accelerated approval ahead of the schedule that you’ve already set out?

TG: Interesting question. Push? We will, first of all, educate them and tell them why it makes sense, and then we’ll see where that conversation goes. And if you want to describe that as pushing, that’s fine with me.

JC: Was there anything else about this situation you wanted to get into we hadn’t touched on?

TG: No. Look, you have a good understanding of the space, and I think your questions were spot on. That’s what’s going on right now. We’ve seen, with what came out today, that they expect vaccine efficacy to drop significantly. Again, if you’re a public health official … You tried to have me commit to a number which I was reluctant to do, but just look at the facts. Vaccine efficacy is going to drop. I can’t tell you how much, but it’s going to be less.

I had lunch the other day with a bunch of students at Dartmouth at the end of the term, and every single one of the students on the table either had a breakthrough infection or knew someone who had one. And I’m like, this is following, “Oh, vaccines are 95% effective.” So I think they’re definitely the tip of the spear, but there absolutely needs to be an investment in other modalities, whether it’s small molecule antivirals, or antibodies, we need to go full hog on all of these.

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Four Years Ago This Week, Freedom Was Torched

Four Years Ago This Week, Freedom Was Torched

Authored by Jeffrey Tucker via The Brownstone Institute,

"Beware the Ides of March,” Shakespeare…

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Four Years Ago This Week, Freedom Was Torched

Authored by Jeffrey Tucker via The Brownstone Institute,

"Beware the Ides of March,” Shakespeare quotes the soothsayer’s warning Julius Caesar about what turned out to be an impending assassination on March 15. The death of American liberty happened around the same time four years ago, when the orders went out from all levels of government to close all indoor and outdoor venues where people gather. 

It was not quite a law and it was never voted on by anyone. Seemingly out of nowhere, people who the public had largely ignored, the public health bureaucrats, all united to tell the executives in charge – mayors, governors, and the president – that the only way to deal with a respiratory virus was to scrap freedom and the Bill of Rights. 

And they did, not only in the US but all over the world. 

The forced closures in the US began on March 6 when the mayor of Austin, Texas, announced the shutdown of the technology and arts festival South by Southwest. Hundreds of thousands of contracts, of attendees and vendors, were instantly scrapped. The mayor said he was acting on the advice of his health experts and they in turn pointed to the CDC, which in turn pointed to the World Health Organization, which in turn pointed to member states and so on. 

There was no record of Covid in Austin, Texas, that day but they were sure they were doing their part to stop the spread. It was the first deployment of the “Zero Covid” strategy that became, for a time, official US policy, just as in China. 

It was never clear precisely who to blame or who would take responsibility, legal or otherwise. 

This Friday evening press conference in Austin was just the beginning. By the next Thursday evening, the lockdown mania reached a full crescendo. Donald Trump went on nationwide television to announce that everything was under control but that he was stopping all travel in and out of US borders, from Europe, the UK, Australia, and New Zealand. American citizens would need to return by Monday or be stuck. 

Americans abroad panicked while spending on tickets home and crowded into international airports with waits up to 8 hours standing shoulder to shoulder. It was the first clear sign: there would be no consistency in the deployment of these edicts. 

There is no historical record of any American president ever issuing global travel restrictions like this without a declaration of war. Until then, and since the age of travel began, every American had taken it for granted that he could buy a ticket and board a plane. That was no longer possible. Very quickly it became even difficult to travel state to state, as most states eventually implemented a two-week quarantine rule. 

The next day, Friday March 13, Broadway closed and New York City began to empty out as any residents who could went to summer homes or out of state. 

On that day, the Trump administration declared the national emergency by invoking the Stafford Act which triggers new powers and resources to the Federal Emergency Management Administration. 

In addition, the Department of Health and Human Services issued a classified document, only to be released to the public months later. The document initiated the lockdowns. It still does not exist on any government website.

The White House Coronavirus Response Task Force, led by the Vice President, will coordinate a whole-of-government approach, including governors, state and local officials, and members of Congress, to develop the best options for the safety, well-being, and health of the American people. HHS is the LFA [Lead Federal Agency] for coordinating the federal response to COVID-19.

Closures were guaranteed:

Recommend significantly limiting public gatherings and cancellation of almost all sporting events, performances, and public and private meetings that cannot be convened by phone. Consider school closures. Issue widespread ‘stay at home’ directives for public and private organizations, with nearly 100% telework for some, although critical public services and infrastructure may need to retain skeleton crews. Law enforcement could shift to focus more on crime prevention, as routine monitoring of storefronts could be important.

In this vision of turnkey totalitarian control of society, the vaccine was pre-approved: “Partner with pharmaceutical industry to produce anti-virals and vaccine.”

The National Security Council was put in charge of policy making. The CDC was just the marketing operation. That’s why it felt like martial law. Without using those words, that’s what was being declared. It even urged information management, with censorship strongly implied.

The timing here is fascinating. This document came out on a Friday. But according to every autobiographical account – from Mike Pence and Scott Gottlieb to Deborah Birx and Jared Kushner – the gathered team did not meet with Trump himself until the weekend of the 14th and 15th, Saturday and Sunday. 

According to their account, this was his first real encounter with the urge that he lock down the whole country. He reluctantly agreed to 15 days to flatten the curve. He announced this on Monday the 16th with the famous line: “All public and private venues where people gather should be closed.”

This makes no sense. The decision had already been made and all enabling documents were already in circulation. 

There are only two possibilities. 

One: the Department of Homeland Security issued this March 13 HHS document without Trump’s knowledge or authority. That seems unlikely. 

Two: Kushner, Birx, Pence, and Gottlieb are lying. They decided on a story and they are sticking to it. 

Trump himself has never explained the timeline or precisely when he decided to greenlight the lockdowns. To this day, he avoids the issue beyond his constant claim that he doesn’t get enough credit for his handling of the pandemic.

With Nixon, the famous question was always what did he know and when did he know it? When it comes to Trump and insofar as concerns Covid lockdowns – unlike the fake allegations of collusion with Russia – we have no investigations. To this day, no one in the corporate media seems even slightly interested in why, how, or when human rights got abolished by bureaucratic edict. 

As part of the lockdowns, the Cybersecurity and Infrastructure Security Agency, which was and is part of the Department of Homeland Security, as set up in 2018, broke the entire American labor force into essential and nonessential.

They also set up and enforced censorship protocols, which is why it seemed like so few objected. In addition, CISA was tasked with overseeing mail-in ballots. 

Only 8 days into the 15, Trump announced that he wanted to open the country by Easter, which was on April 12. His announcement on March 24 was treated as outrageous and irresponsible by the national press but keep in mind: Easter would already take us beyond the initial two-week lockdown. What seemed to be an opening was an extension of closing. 

This announcement by Trump encouraged Birx and Fauci to ask for an additional 30 days of lockdown, which Trump granted. Even on April 23, Trump told Georgia and Florida, which had made noises about reopening, that “It’s too soon.” He publicly fought with the governor of Georgia, who was first to open his state. 

Before the 15 days was over, Congress passed and the president signed the 880-page CARES Act, which authorized the distribution of $2 trillion to states, businesses, and individuals, thus guaranteeing that lockdowns would continue for the duration. 

There was never a stated exit plan beyond Birx’s public statements that she wanted zero cases of Covid in the country. That was never going to happen. It is very likely that the virus had already been circulating in the US and Canada from October 2019. A famous seroprevalence study by Jay Bhattacharya came out in May 2020 discerning that infections and immunity were already widespread in the California county they examined. 

What that implied was two crucial points: there was zero hope for the Zero Covid mission and this pandemic would end as they all did, through endemicity via exposure, not from a vaccine as such. That was certainly not the message that was being broadcast from Washington. The growing sense at the time was that we all had to sit tight and just wait for the inoculation on which pharmaceutical companies were working. 

By summer 2020, you recall what happened. A restless generation of kids fed up with this stay-at-home nonsense seized on the opportunity to protest racial injustice in the killing of George Floyd. Public health officials approved of these gatherings – unlike protests against lockdowns – on grounds that racism was a virus even more serious than Covid. Some of these protests got out of hand and became violent and destructive. 

Meanwhile, substance abuse rage – the liquor and weed stores never closed – and immune systems were being degraded by lack of normal exposure, exactly as the Bakersfield doctors had predicted. Millions of small businesses had closed. The learning losses from school closures were mounting, as it turned out that Zoom school was near worthless. 

It was about this time that Trump seemed to figure out – thanks to the wise council of Dr. Scott Atlas – that he had been played and started urging states to reopen. But it was strange: he seemed to be less in the position of being a president in charge and more of a public pundit, Tweeting out his wishes until his account was banned. He was unable to put the worms back in the can that he had approved opening. 

By that time, and by all accounts, Trump was convinced that the whole effort was a mistake, that he had been trolled into wrecking the country he promised to make great. It was too late. Mail-in ballots had been widely approved, the country was in shambles, the media and public health bureaucrats were ruling the airwaves, and his final months of the campaign failed even to come to grips with the reality on the ground. 

At the time, many people had predicted that once Biden took office and the vaccine was released, Covid would be declared to have been beaten. But that didn’t happen and mainly for one reason: resistance to the vaccine was more intense than anyone had predicted. The Biden administration attempted to impose mandates on the entire US workforce. Thanks to a Supreme Court ruling, that effort was thwarted but not before HR departments around the country had already implemented them. 

As the months rolled on – and four major cities closed all public accommodations to the unvaccinated, who were being demonized for prolonging the pandemic – it became clear that the vaccine could not and would not stop infection or transmission, which means that this shot could not be classified as a public health benefit. Even as a private benefit, the evidence was mixed. Any protection it provided was short-lived and reports of vaccine injury began to mount. Even now, we cannot gain full clarity on the scale of the problem because essential data and documentation remains classified. 

After four years, we find ourselves in a strange position. We still do not know precisely what unfolded in mid-March 2020: who made what decisions, when, and why. There has been no serious attempt at any high level to provide a clear accounting much less assign blame. 

Not even Tucker Carlson, who reportedly played a crucial role in getting Trump to panic over the virus, will tell us the source of his own information or what his source told him. There have been a series of valuable hearings in the House and Senate but they have received little to no press attention, and none have focus on the lockdown orders themselves. 

The prevailing attitude in public life is just to forget the whole thing. And yet we live now in a country very different from the one we inhabited five years ago. Our media is captured. Social media is widely censored in violation of the First Amendment, a problem being taken up by the Supreme Court this month with no certainty of the outcome. The administrative state that seized control has not given up power. Crime has been normalized. Art and music institutions are on the rocks. Public trust in all official institutions is at rock bottom. We don’t even know if we can trust the elections anymore. 

In the early days of lockdown, Henry Kissinger warned that if the mitigation plan does not go well, the world will find itself set “on fire.” He died in 2023. Meanwhile, the world is indeed on fire. The essential struggle in every country on earth today concerns the battle between the authority and power of permanent administration apparatus of the state – the very one that took total control in lockdowns – and the enlightenment ideal of a government that is responsible to the will of the people and the moral demand for freedom and rights. 

How this struggle turns out is the essential story of our times. 

CODA: I’m embedding a copy of PanCAP Adapted, as annotated by Debbie Lerman. You might need to download the whole thing to see the annotations. If you can help with research, please do.

*  *  *

Jeffrey Tucker is the author of the excellent new book 'Life After Lock-Down'

Tyler Durden Mon, 03/11/2024 - 23:40

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Red Candle In The Wind

Red Candle In The Wind

By Benjamin PIcton of Rabobank

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

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Red Candle In The Wind

By Benjamin PIcton of Rabobank

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

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

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

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

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

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

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

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

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

That would really light a fire under the gold market.

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

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Trump “Clearly Hasn’t Learned From His COVID-Era Mistakes”, RFK Jr. Says

Trump "Clearly Hasn’t Learned From His COVID-Era Mistakes", RFK Jr. Says

Authored by Jeff Louderback via The Epoch Times (emphasis ours),

President…

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Trump "Clearly Hasn't Learned From His COVID-Era Mistakes", RFK Jr. Says

Authored by Jeff Louderback via The Epoch Times (emphasis ours),

President Joe Biden claimed that COVID vaccines are now helping cancer patients during his State of the Union address on March 7, but it was a response on Truth Social from former President Donald Trump that drew the ire of independent presidential candidate Robert F. Kennedy Jr.

Robert F. Kennedy Jr. holds a voter rally in Grand Rapids, Mich., on Feb. 10, 2024. (Mitch Ranger for The Epoch Times)

During the address, President Biden said: “The pandemic no longer controls our lives. The vaccines that saved us from COVID are now being used to help beat cancer, turning setback into comeback. That’s what America does.”

President Trump wrote: “The Pandemic no longer controls our lives. The VACCINES that saved us from COVID are now being used to help beat cancer—turning setback into comeback. YOU’RE WELCOME JOE. NINE-MONTH APPROVAL TIME VS. 12 YEARS THAT IT WOULD HAVE TAKEN YOU.”

An outspoken critic of President Trump’s COVID response, and the Operation Warp Speed program that escalated the availability of COVID vaccines, Mr. Kennedy said on X, formerly known as Twitter, that “Donald Trump clearly hasn’t learned from his COVID-era mistakes.”

“He fails to recognize how ineffective his warp speed vaccine is as the ninth shot is being recommended to seniors. Even more troubling is the documented harm being caused by the shot to so many innocent children and adults who are suffering myocarditis, pericarditis, and brain inflammation,” Mr. Kennedy remarked.

“This has been confirmed by a CDC-funded study of 99 million people. Instead of bragging about its speedy approval, we should be honestly and transparently debating the abundant evidence that this vaccine may have caused more harm than good.

“I look forward to debating both Trump and Biden on Sept. 16 in San Marcos, Texas.”

Mr. Kennedy announced in April 2023 that he would challenge President Biden for the 2024 Democratic Party presidential nomination before declaring his run as an independent last October, claiming that the Democrat National Committee was “rigging the primary.”

Since the early stages of his campaign, Mr. Kennedy has generated more support than pundits expected from conservatives, moderates, and independents resulting in speculation that he could take votes away from President Trump.

Many Republicans continue to seek a reckoning over the government-imposed pandemic lockdowns and vaccine mandates.

President Trump’s defense of Operation Warp Speed, the program he rolled out in May 2020 to spur the development and distribution of COVID-19 vaccines amid the pandemic, remains a sticking point for some of his supporters.

Vice President Mike Pence (L) and President Donald Trump deliver an update on Operation Warp Speed in the Rose Garden of the White House in Washington on Nov. 13, 2020. (Mandel Ngan/AFP via Getty Images)

Operation Warp Speed featured a partnership between the government, the military, and the private sector, with the government paying for millions of vaccine doses to be produced.

President Trump released a statement in March 2021 saying: “I hope everyone remembers when they’re getting the COVID-19 Vaccine, that if I wasn’t President, you wouldn’t be getting that beautiful ‘shot’ for 5 years, at best, and probably wouldn’t be getting it at all. I hope everyone remembers!”

President Trump said about the COVID-19 vaccine in an interview on Fox News in March 2021: “It works incredibly well. Ninety-five percent, maybe even more than that. I would recommend it, and I would recommend it to a lot of people that don’t want to get it and a lot of those people voted for me, frankly.

“But again, we have our freedoms and we have to live by that and I agree with that also. But it’s a great vaccine, it’s a safe vaccine, and it’s something that works.”

On many occasions, President Trump has said that he is not in favor of vaccine mandates.

An environmental attorney, Mr. Kennedy founded Children’s Health Defense, a nonprofit that aims to end childhood health epidemics by promoting vaccine safeguards, among other initiatives.

Last year, Mr. Kennedy told podcaster Joe Rogan that ivermectin was suppressed by the FDA so that the COVID-19 vaccines could be granted emergency use authorization.

He has criticized Big Pharma, vaccine safety, and government mandates for years.

Since launching his presidential campaign, Mr. Kennedy has made his stances on the COVID-19 vaccines, and vaccines in general, a frequent talking point.

“I would argue that the science is very clear right now that they [vaccines] caused a lot more problems than they averted,” Mr. Kennedy said on Piers Morgan Uncensored last April.

“And if you look at the countries that did not vaccinate, they had the lowest death rates, they had the lowest COVID and infection rates.”

Additional data show a “direct correlation” between excess deaths and high vaccination rates in developed countries, he said.

President Trump and Mr. Kennedy have similar views on topics like protecting the U.S.-Mexico border and ending the Russia-Ukraine war.

COVID-19 is the topic where Mr. Kennedy and President Trump seem to differ the most.

Former President Donald Trump intended to “drain the swamp” when he took office in 2017, but he was “intimidated by bureaucrats” at federal agencies and did not accomplish that objective, Mr. Kennedy said on Feb. 5.

Speaking at a voter rally in Tucson, where he collected signatures to get on the Arizona ballot, the independent presidential candidate said President Trump was “earnest” when he vowed to “drain the swamp,” but it was “business as usual” during his term.

John Bolton, who President Trump appointed as a national security adviser, is “the template for a swamp creature,” Mr. Kennedy said.

Scott Gottlieb, who President Trump named to run the FDA, “was Pfizer’s business partner” and eventually returned to Pfizer, Mr. Kennedy said.

Mr. Kennedy said that President Trump had more lobbyists running federal agencies than any president in U.S. history.

“You can’t reform them when you’ve got the swamp creatures running them, and I’m not going to do that. I’m going to do something different,” Mr. Kennedy said.

During the COVID-19 pandemic, President Trump “did not ask the questions that he should have,” he believes.

President Trump “knew that lockdowns were wrong” and then “agreed to lockdowns,” Mr. Kennedy said.

He also “knew that hydroxychloroquine worked, he said it,” Mr. Kennedy explained, adding that he was eventually “rolled over” by Dr. Anthony Fauci and his advisers.

President Donald Trump greets the crowd before he leaves at the Operation Warp Speed Vaccine Summit in Washington on Dec. 8, 2020. (Tasos Katopodis/Getty Images)

MaryJo Perry, a longtime advocate for vaccine choice and a Trump supporter, thinks votes will be at a premium come Election Day, particularly because the independent and third-party field is becoming more competitive.

Ms. Perry, president of Mississippi Parents for Vaccine Rights, believes advocates for medical freedom could determine who is ultimately president.

She believes that Mr. Kennedy is “pulling votes from Trump” because of the former president’s stance on the vaccines.

“People care about medical freedom. It’s an important issue here in Mississippi, and across the country,” Ms. Perry told The Epoch Times.

“Trump should admit he was wrong about Operation Warp Speed and that COVID vaccines have been dangerous. That would make a difference among people he has offended.”

President Trump won’t lose enough votes to Mr. Kennedy about Operation Warp Speed and COVID vaccines to have a significant impact on the election, Ohio Republican strategist Wes Farno told The Epoch Times.

President Trump won in Ohio by eight percentage points in both 2016 and 2020. The Ohio Republican Party endorsed President Trump for the nomination in 2024.

“The positives of a Trump presidency far outweigh the negatives,” Mr. Farno said. “People are more concerned about their wallet and the economy.

“They are asking themselves if they were better off during President Trump’s term compared to since President Biden took office. The answer to that question is obvious because many Americans are struggling to afford groceries, gas, mortgages, and rent payments.

“America needs President Trump.”

Multiple national polls back Mr. Farno’s view.

As of March 6, the RealClearPolitics average of polls indicates that President Trump has 41.8 percent support in a five-way race that includes President Biden (38.4 percent), Mr. Kennedy (12.7 percent), independent Cornel West (2.6 percent), and Green Party nominee Jill Stein (1.7 percent).

A Pew Research Center study conducted among 10,133 U.S. adults from Feb. 7 to Feb. 11 showed that Democrats and Democrat-leaning independents (42 percent) are more likely than Republicans and GOP-leaning independents (15 percent) to say they have received an updated COVID vaccine.

The poll also reported that just 28 percent of adults say they have received the updated COVID inoculation.

The peer-reviewed multinational study of more than 99 million vaccinated people that Mr. Kennedy referenced in his X post on March 7 was published in the Vaccine journal on Feb. 12.

It aimed to evaluate the risk of 13 adverse events of special interest (AESI) following COVID-19 vaccination. The AESIs spanned three categories—neurological, hematologic (blood), and cardiovascular.

The study reviewed data collected from more than 99 million vaccinated people from eight nations—Argentina, Australia, Canada, Denmark, Finland, France, New Zealand, and Scotland—looking at risks up to 42 days after getting the shots.

Three vaccines—Pfizer and Moderna’s mRNA vaccines as well as AstraZeneca’s viral vector jab—were examined in the study.

Researchers found higher-than-expected cases that they deemed met the threshold to be potential safety signals for multiple AESIs, including for Guillain-Barre syndrome (GBS), cerebral venous sinus thrombosis (CVST), myocarditis, and pericarditis.

A safety signal refers to information that could suggest a potential risk or harm that may be associated with a medical product.

The study identified higher incidences of neurological, cardiovascular, and blood disorder complications than what the researchers expected.

President Trump’s role in Operation Warp Speed, and his continued praise of the COVID vaccine, remains a concern for some voters, including those who still support him.

Krista Cobb is a 40-year-old mother in western Ohio. She voted for President Trump in 2020 and said she would cast her vote for him this November, but she was stunned when she saw his response to President Biden about the COVID-19 vaccine during the State of the Union address.

I love President Trump and support his policies, but at this point, he has to know they [advisers and health officials] lied about the shot,” Ms. Cobb told The Epoch Times.

“If he continues to promote it, especially after all of the hearings they’ve had about it in Congress, the side effects, and cover-ups on Capitol Hill, at what point does he become the same as the people who have lied?” Ms. Cobb added.

“I think he should distance himself from talk about Operation Warp Speed and even admit that he was wrong—that the vaccines have not had the impact he was told they would have. If he did that, people would respect him even more.”

Tyler Durden Mon, 03/11/2024 - 17:00

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