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Treasury’s final American Rescue Plan guidance means it’s time for local leaders to invest in an inclusive future

Ten months after the passage of the $1.9 trillion American Rescue Plan Act (ARP), local officials across the United States continue to possess significant opportunities to deploy the act’s $350 billion in flexible Coronavirus State and Local Fiscal…

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By Alan Berube, Eli Byerly-Duke

Ten months after the passage of the $1.9 trillion American Rescue Plan Act (ARP), local officials across the United States continue to possess significant opportunities to deploy the act’s $350 billion in flexible Coronavirus State and Local Fiscal Recovery Funds (SLFRF) to address critical priorities. And last week, these leaders received final guidance on how to use this massive investment to build an inclusive future for their communities.

Back in May 2021, the U.S. Department of the Treasury published an interim final rule laying out permitted SLFRF uses, and invited feedback from local officials and other experts. It provided state and local officials with guidance on four statutorily prescribed uses: responding to COVID-19’s public health and economic impacts; providing premium pay; investing in water, sewer, and broadband infrastructure; and replacing lost public sector revenue.

Subsequently, cities, counties, and states issued preliminary reports detailing how they intended to use SLFRF dollars. However, as we observed last fall, the lack of a final rule from Treasury on implementing the program may have discouraged some cities from making firm decisions about how they would use their funding allocations, as they awaited clarifications or assurances regarding eligible activities.

So it was welcome news on January 6 when Treasury issued the final SLFRF rule, which will officially take effect on April 1, 2022. The final rule provides useful clarifications in some areas (including a helpful Treasury overview), and substantive expansions of eligible activities in others. Critically, if an activity was eligible according to the interim rule, it almost certainly remains eligible in the final rule.

Notably, the final rule provides local officials with important new guidance on using the funds to support public sector operations. This includes establishing a $10 million floor for classifying funds as revenue replacement—most relevant for small jurisdictions—and allowing recipients to hire or rehire government employees above pre-pandemic baseline staff levels. (The National League of Cities [NLC] highlighted 10 important takeaways from the new rule for city leaders, and the National Association of Counties [NACo] provided a detailed breakdown of what’s new and notable in the rule.)

As we saw throughout the past year, many larger cities and counties remain eager to use SLFRF dollars not only to provide needed relief to families and communities still suffering from COVID-19’s impacts, but also to invest in people and places to address preexisting challenges that exacerbated the pandemic’s negative effects. We’ll be exploring these priorities in a new Local Rescue Plan Tracker, launching in late January in partnership with NLC and NACo. For now, the final rule provides helpful direction and encouragement for local leaders to invest in the present and future of lower-income families and communities.

State and local governments can provide a range of economic aid to impacted people and places

Treasury’s final rule provides additional clarification on eligible recipients of SLFRF economic aid. In general, states and localities can provide aid only to individuals and households that suffered economically due to the pandemic. As the interim rule outlined, evidence abounds that lower-income people and places faced negative economic impacts from the pandemic, both because they worked in jobs more vulnerable to public health measures (e.g., hospitality and retail) and because they had preexisting challenges that exacerbated the pandemic’s toll (e.g., unsafe housing, lack of reliable internet access or high-quality health care).

While states and localities must generally document that recipients of SLFRF economic aid suffered due to the pandemic, Treasury’s final rule stipulates that they can presume those impacts for low- and moderate-income individuals (those in families with incomes under 300% of the federal poverty line, or roughly $66,000 for a family of three), as well as individuals who qualify for certain federal benefits such as Medicaid, the Children’s Health Insurance Program (CHIP), or child care subsidies. For these individuals and households, the final rule enumerates a range of assistance types that states and localities can use SLFRF dollars to provide, such as food, housing, health insurance, job training, financial services, child care, broadband subsidies, and cash assistance. Essentially, most any state or local program that provides direct economic help to lower-income people is an eligible SLFRF use.

The interim rule identified an additional class of individuals and communities that suffered “disproportionate” negative impacts from the pandemic due to underlying economic distress. The final rule clarifies that to help these people and places, states and localities can make eligible SLFRF investments in both local services and the physical environment, including medical clinics and community health workers; removal of lead paint and other environmental remediation; improvements to vacant land and properties; and school-based facilities and services. These households and communities must have incomes (or median incomes, in the case of neighborhoods) below 185% of the federal poverty line, or roughly $40,000. The final rule maintains the interim rule’s simplifying assumption that all households living in Qualified Census Tracts (QCTs) have suffered disproportionate impact.

Thus, many types of investments that happen under the heading of “community economic development” constitute eligible SLFRF uses, although recipients must provide some additional documentation to Treasury regarding significant capital expenditures. In this way, the final rule provides a green light to local officials seeking to invest in the long-run economic revitalization of lower-income neighborhoods.

States and localities have increased latitude to invest in small business recovery, especially in lower-income neighborhoods

Many SLFRF recipients have already dedicated a portion of their funds to assist small businesses that lost significant revenues during the pandemic. Detroit and Louisville, Ky., among many other cities, committed substantial SLFRF aid to small business recovery.

For aid to small businesses, Treasury’s final SLFRF rule clarifies a rubric similar to that for individuals, households, and communities. “Impacted” small businesses and nonprofits include those that suffered revenue declines, increased costs, or other cost challenges (rent, payroll, etc.) due to the pandemic. States and localities can provide grants, loans, and technical assistance through SLFRF to small businesses that can demonstrate such impacts.

State and local programs that distribute SLFRF dollars can further presume that small businesses and nonprofits were “disproportionately impacted” by the pandemic if they are located in QCTs. Similar to economic aid for disproportionately impacted people and places, states and localities may invest in the physical rehabilitation of these businesses and nonprofits, and the corridors in which they concentrate.

For microbusinesses (businesses with five or fewer employees, which grew substantially during the pandemic), officials may provide subsidies to offset costs such as transportation and child care. And recognizing the preexisting barriers to business formation and success in these neighborhoods, they may also support small business startup and expansion costs. In these ways, SLFRF dollars can “juice” support for entrepreneurs in lower-income communities, building on complementary ARP programs such as the State Small Business Credit Initiative.

It’s time for state and local leaders to act

Uncertainty about where the final rules would land on several key issues—and when the COVID-19 pandemic would subside—have understandably led many cities and counties to delay committing ARP dollars. Indeed, that uncertainty remains with respect to COVID-19’s prevalence.

Nevertheless, the arrival of Treasury’s final rule means that now is the time for cities, counties, and states to commit to comprehensive relief and rebuilding plans aided by SLFRF dollars. The clock is ticking: The rule confirms the statutory directive that recipients must obligate the funds by the end of 2024 and fully expend them by the end of 2026. Despite some local hopes to the contrary, it does not permit states and localities to deposit the funds into revolving finance vehicles that would extend their impact further into the future (although they can use SLFRF funds to cover the subsidy costs of longer-term loans issued from revolving vehicles).

As Brookings Metro argued in a recent piece, the ARP opportunity is now knocking for local governments. Strategic jurisdictions will use that opportunity to choose a limited number of areas for sustained, transformative impact—leveraging relationships and building capacity both inside and outside government to foster the conditions for a broad and equitable recovery. The moment demands nothing less.

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About 35% of People Who Received Placebo in Vaccine Trials Report Side Effects and More COVID-19 News

According to a recent study conducted by researchers at Harvard Medical School and Beth Israel Deaconess Medical Center, 76 percent of the adverse side effects (such as fatigue or headache) that people experienced after receiving their first COVID-19…

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About 35% of People Who Received Placebo in Vaccine Trials Report Side Effects and More COVID-19 News

The placebo effect is where a person who received a placebo instead of a drug or vaccine shows clinical signs, positive or negative, associated with the actual treatment. Much has been made about the side effects of the COVID-19 vaccines, but a new study found a startlingly high number of adverse events associated with people who received placebos in clinical trials. For that and more COVID-19 news, continue reading.

COVID-19 Vaccine Side Effects: Real or Placebo Effect?

A recent study out of Harvard Medical School and Beth Israel Deaconess Medical Center evaluated 12 COVID-19 vaccine trials with a total of 45,380 participants. The study found that 76% of the adverse side effects reported, such as fatigue or headache, after the first shot were also reported by participants who received a placebo. Mild side effects were more common in people receiving the vaccine, but a third of those given the placebo reported at least one adverse side effect. The statistics from the study showing that 35% of placebo recipients reported adverse side effects is considered unusually high. Several experts suspect that there’s such a high report of adverse events because of the amount of misinformation found on social media about the dangers of the vaccines and the amount of media coverage.

This is not to say that the adverse side effects felt by people who received the vaccines are all in their heads. People do have side effects to vaccines, but this study reports on an unusually high level of the placebo effect. Nocebo is used to describe a negative outcome associated with the placebo.

Source: BioSpace

“Negative information in the media may increase negative expectations towards the vaccines and may therefore enhance nocebo effects,” said Dr. Julia W. Haas, an investigator in the Program in Placebo Studies at Beth Israel Deaconess and the study’s lead author. “Anxiety and negative expectation can worsen the experience of side effects.”

Four Factors for Long COVID

A study published in Nature Communications identified specific antibodies in the blood of people who developed long COVID. Long COVID is not well understood and has a range of up to 50 different symptoms, and it is difficult to diagnose because there is no one test for it. The study, conducted by Dr. Onur Boyman, a researcher in the Department of Immunology at University Hospital Zurich, compared more than 500 COVID-19 patients and found several key differences in patients who went on to present with long COVID. The most obvious was a significant decrease in two immunoglobulins, IgM and IgG3. The study found that a decrease in these two immunoglobulins, which generally rise to fight infections, combined with other factors, such as middle age and a history of asthma, was 75% effective in predicting long COVID.

75% of COVID-19 ICU Survivors Show Symptoms a Year Later

A study out of the Netherlands found that a year after being released from an intensive care unit (ICU) for severe COVID-19, 75% of patients reported lingering physical symptoms, 26% reported mental symptoms, and up to 16% noted cognitive symptoms. The research was published in JAMA. The research evaluated 246 COVID-19 survivors treated in one of 11 ICUs in the Netherlands. The mental symptoms included anxiety (17.9%), depression (18.3%), PTSD (9.8%). The most common new physical symptoms were weakness (38.9%), stiff joints (26.3%), joint pain (25.5%), muscle weakness (24.8%), muscle pain (21.3%) and shortness of breath (20.8%).

Pennsylvania Averaging Most COVID-19 Deaths Per Day in a Year

In general, COVID-19 deaths are dropping across the country. However, in two states, Pennsylvania and New Jersey, the numbers are increasing. Pennsylvania is averaging 156 COVID-19 deaths per day over the past seven days, which is a 17% uptick compared to two weeks ago. The number of deaths per day in Pennsylvania is below what was hit in January 2021, largely due to the availability of vaccines. New Jersey averages 111 deaths from COVID-19 per day, an increase of 61% over the last two weeks and the highest since May 2020. Similarly, New Jersey cases and hospitalizations are declining.

Omicron Surge: Shattering Cases and Hospitalizations, but Less Severe

According to the CDC, although the current Omicron surge is setting records for positive infections and hospitalizations, it’s less severe than other waves by other metrics. Omicron has resulted in more than 1 million cases per day in the U.S. on several occasions, and reported deaths are presently higher than 15,000 per week. However, the ratio of emergency department visits and hospitalizations to case numbers is lower compared to COVID-19 waves for Delta and during the winter of 2020–21. ICU admissions, length of stay, and in-hospital deaths were all lower with Omicron. They cite vaccinations and booster shots as the likely cause. Although the overall result is that Omicron appears less severe, it’s not completely clear if that’s because the viral variant doesn’t infect the lower lung as easily as other variants, or because so much of the population has either been vaccinated or exposed to the virus already. It is clearly far more infectious than other strains, which is placing a real burden on healthcare systems. The number of emergency department visits is 86% higher than during the Delta surge.

J&J Expects Up to $3.5 Billion in COVID-19 Vaccine Sales This Year

Johnson & Johnson projected annual sales of its COVID-19 vaccine for 2022 to range from $3 billion to $3.5 billion. This was noted during the company’s fourth-quarter 2021 report. In December 2021, the U.S. Centers for Disease Control and Prevention recommended the PfizerBioNTech or Moderna shots over J&J’s due to a rare blood condition observed with the J&J shot. By comparison, Pfizer and BioNTech project their vaccine will bring in $29 billion in 2022, after having raked in almost $36 billion in 2021. Moderna expects approximately $18.5 billion this year, with about $3.5 billion from possible additional purchases. Although final figures for Moderna aren’t in yet, they projected 2021 sales between $15 and $18 billion.

BioSpace source:

https://www.biospace.com/article/about-35-percent-of-people-receiving-placebo-in-vaccine-trials-report-side-effects-and-more-covid-19-news

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Oil Could Be The Haven Stocks Traders Need To Shelter From Fed

Oil Could Be The Haven Stocks Traders Need To Shelter From Fed

By Nour Al Ali, Bloomberg Markets Live commentator and analyst

Oil is starting to look like an unlikely haven from the stocks selloff in the run-up to anticipated Fed tightening.

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Oil Could Be The Haven Stocks Traders Need To Shelter From Fed

By Nour Al Ali, Bloomberg Markets Live commentator and analyst

Oil is starting to look like an unlikely haven from the stocks selloff in the run-up to anticipated Fed tightening.

Traders are pricing lower volatility in the commodity than in the Nasdaq and S&P 500. Barometers of market anxiety for both indexes have shot up recently, suggesting trader sentiment is souring. Meanwhile, the CBOE Crude Oil Volatility Index, which measures the market’s expectation of 30-day volatility of crude oil prices applying the VIX methodology to USO options, shows that oil prices are expected to remain relatively muted in comparison.

With a producer cartel to support prices, the outlook for oil is more sanguine, even if the Fed raises rates. The commodity has ample support, with global oil demand expected to reach pre-pandemic levels by the end of this year. The U.S. administration has been pushing oil-producing nations under the OPEC+ cartel to ramp up output, while the group has stuck to a modest production-increase plan and is expected to rubber-stamp another 400k b/d output hike when they meet next week. This means that oil is likely to stay a lot more stable than in recent years.

The relatively low correlation between the asset classes provide diversification benefits. The relationship between the S&P 500 and the global oil benchmark is weak and lacks conviction; it’s even weaker between the Nasdaq 100 and Brent crude contracts. The divergence in price action this week could indicate that stocks have been tumbling in fear of a hawkish Feb, more so than geopolitical risk alone. That would perhaps offer traders an opportunity to seek shelter amid stock volatility in anticipation of the Fed’s next move.

Oil might have tracked the decline in stocks at the beginning of this week, but the commodity is back to its highs now. It’s up close to 15% this year, while the S&P 500 is struggling to reclaim its footing after plunging as much as 10%.

Tyler Durden Wed, 01/26/2022 - 13:45

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Economics

AT&T down 10% despite topping estimates

AT&T (NYSE: T) has revealed that Q4 results indicated continued users for the HBO MAX, wireless and fiber segments. In addition, the company gained more postpaid phone users for the whole year than the last ten years adding one million fiber subscribe

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AT&T (NYSE: T) has revealed that Q4 results indicated continued users for the HBO MAX, wireless and fiber segments. In addition, the company gained more postpaid phone users for the whole year than the last ten years adding one million fiber subscribers. Similarly, the company beat its high-end outlook for international HBO Max and HBO users with almost 74 million subscribers as of December 31, 2021.

CEO John Stankey said:

We ended 2021 the way we started it – by growing our customer relationships, running our operations more effectively and efficiently, and sharpening our focus. Our momentum is strong and we’re confident there is more opportunity to continue to grow our customer base and drive costs from the business.

Q4 2021 revenue dropped 10% YoY

Consolidated revenue in Q4 2021 was $40.96 billion beating consensus estimates $40.68 but dropping 10% YoY, which reflects the impact of divested segments and low Business Wireline revenues. In the third quarter, the company divested US Videos, and in Q4, it divested Vrio. The drop was partially offset by high Warner Media revenues, recovery from pandemic impacts, and high Consumer Wireline and Mobility revenues. Stankey commented:

We’re at the dawn of a new age of connectivity. Our focus now is to be America’s best connectivity provider and also ensure our media assets are positioned to grow and truly become a global media distribution leader. Once we do this, we’ll unlock the true value of these businesses and provide a great opportunity for shareholders.

AT&T reported Q4 net income (loss) attributable to $5 billion or $0.69 per diluted shared share. On an adjusted basis, including merger-amortization fees, a share of DirecTV intangible amortization, gain on benefit plans, and related items, the company had an EPS of $0.78 topping consensus estimate of $0.76 per share.

AT&T had total revenue of $168.9 billion in 2021

AT&T’s consolidated revenues were $168.9 billion in 2021, compared to $171.8 billion a year ago, reflecting the split of the U.S Video division in Q3 2021, as well as the effects of other divested operations. However, higher revenues in WarnerMedia and Communications somewhat offset these declines.

For the full-year, net income (loss) attributable to commons shares was $19.9 billion or $2.76 p were per diluted share. On an adjusted basis, FY 2021 earnings per share were $3.4.

La notizia AT&T down 10% despite topping estimates era stato segnalata su Invezz.

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