Purdue Pharma Owners Were Wary Of Lawsuits Before Moving $10 Billion From Company

Purdue Pharma Owners Were Wary Of Lawsuits Before Moving $10 Billion From Company

The Sackler family, owners of Purdue Pharma LP, have been front and center in the nation’s opioid crisis over the last decade. The crisis has taken over 450,000 lives since 1999 and prescription drugs like OxyContin and fentanyl have been the culprit in many cases.

Purdue Pharma, maker of OxyContin, has been in the midst of bankruptcy proceedings that resulted from a legal onslaught which culminated in an $8 billion settlement with the DOJ and criminal charges for misconduct relating to opioids. The Sackler family paid $225 million to settle civil claims.

New documents that have been made available during bankruptcy proceedings show the family had discussed the potential for litigation exposure as early as 2007, which Reuters noted was a full decade before the company stopped making significant financial transfers from the company totaling $10 billion – a move lawyers for creditors may allege was to shield assets. The company now faces roughly 3,000 legal actions. 

“I don’t believe anyone knew that lawsuits that really began in earnest in 2017 would be coming back in 2008,” David Sackler told congress last week. But his uncle wrote in an e-mail as far back as March 2007 that “if there’s a future perception that Purdue has screwed up on compliance, we could get murdered” and that the family was “not really braced for the emergence of numerous new lawsuits”. 

Sackler himself wrote in May 2007: “Well, I hope you’re right and under logical circumstances I’d agree with you, but we’re living in America. This is the land of the free and the home of the blameless. We will be sued. Read the op-ed stuff in these local papers and ask yourself how long it will take these lawyers to figure out that we might settle with them if they can freeze our assets and threaten us.”

His lawyers argue that this message was sent before he joined the Board, and thus, he had little insight into the company’s affairs.

The Sackler family, who moved $10 billion out of the company with Sackler controlled entities receiving about $4 billion, said: “We supported the release of documents by the court and reaffirm that members of the Sackler family who served on Purdue’s board of directors acted ethically and lawfully in every regard. These cherrypicked snippets of emails ignore the full context of what they say and the rest of the legal filings, all of which demonstrate how the fraudulent conveyance claims are entirely without merit.”

David Sackler testifying, via video

Massachusetts Attorney General Maura Healey disagreed, stating: “The Sacklers told Congress they did nothing wrong. The evidence tells a different story – they got rich fueling the opioid crisis and plan to walk away billionaires.”

The family also “pursued acquiring additional product liability insurance and explored selling Purdue outright to offload its troubles,” according to court documents. Patriarch Mortimer Sackler insisted to company president Richard Sackler in 2008 that he sell the company, writing in an email: 

“Fundamentally, we don’t want to stay in this business anymore (given the horrible risks, outlooks, difficulties, etc) and I think the majority of your family feels the same way.It is simply not prudent for us to stay in the business given the future risks we are sure to face and the impact they will have on the shareholder value of the business and hence the family’s wealth.”

“We also fully acknowledge that there is an opioid crisis that has ruined too many lives and that OxyContin addiction and abuse played a role in that. We are truly sorry to everyone who’s lost a family member or suffered from the scourge of addiction,” David Sackler told Congress last week.

Tyler Durden
Mon, 12/21/2020 – 20:00

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The 10th Annual “We Robot” Law/Robotics/AI Conference Coming to U. Miami School of Law, Sept. 23-25, 2021

I thought I’d pass this along, in case any of you folks are interested; I rarely post about forthcoming academic conferences, but this is a very big one, and very highly regarded. This year it’s being co-organized by Prof. Michael Froomkin (Miami), who has long been one of the most prominent writers on technology and the law, and it promises to be excellent.

If you’re at all interested, check out the Call for Papers, Posters, and Participation; they welcome submissions of abstracts, posters—or robots to demo—from both students and faculty. Submissions, due by Feb. 1, 2021, are subject to an intense double-blind review process.

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Khashoggi’s Fiancée Demands Biden Release CIA Report On Brutal Saudi Murder As First Act

Khashoggi’s Fiancée Demands Biden Release CIA Report On Brutal Saudi Murder As First Act

Authored by Jessica Corbett via CommonDreams.org,

Hatice Cengiz, the fiancée of Washington Post columnist and Saudi national Jamal Khashoggi, is urging US President-elect Joe Biden to fulfill his campaign promise for accountability by releasing the CIA’s classified intelligence assessment on the journalist’s 2018 assassination inside Saudi Arabia’s consulate in Istanbul.

“I am calling on the president-elect to release the CIA’s assessment and evidence. It will greatly assist in uncovering the truth about who is responsible for Jamal’s murder,” Cengiz told The Guardian in a report published Friday. She had waited outside while Khashoggi went into the consulate for paperwork for their planned marriage.

Hatice Cengiz, via Anadolu Agency/Getty Images

Earlier this year, Cengiz attended President Donald Trump’s State of the Union address as the official guest of Rep. Gerry Connolly (D-Va.), a senior member of the House Foreign Affairs Committee who hoped the move would pressure the president to hold Saudi Arabia accountable for Khashoggi’s brutal murder and dismemberment.

Trump has maintained a cozy relationship with the Saudi regime, even after the CIA concluded with “medium to high confidence” that Khashoggi’s assassination was likely ordered by Saudi Crown Prince Mohammed bin Salman, who has denied any involvement. US relations with the country are expected to shift under Biden.

Agnès Callamard, the United Nations special rapporteur on extrajudicial killings who last year put out her own damning report about Khashoggi’s killing, told The Guardian that she believes the CIA’s assessment could be released without revealing the agency’s sources or methods and that she supports its publication.

I, for one, am sick and tired of intelligence always taking precedence over justice,” Callamard said. “So much information is held by the US about the murder of journalists, including the identity of the masterminds, corrupt officials, and people who abuse their power. Surely the search for justice, the fight against impunity demand that this information be made made public.”

On the anniversary of Khashoggi’s death this year – about a month before the November election – Biden’s campaign released a lengthy statement that said in part: “Jamal Khashoggi and his loved ones deserve accountability. Under a Biden-Harris administration, we will reassess our relationship with the Kingdom, end US support for Saudi Arabia’s war in Yemen, and make sure America does not check its values at the door to sell arms or buy oil.”

“America’s commitment to democratic values and human rights will be a priority, even with our closest security partners,” Biden vowed. “I will defend the right of activists, political dissidents, and journalists around the world to speak their minds freely without fear of persecution and violence. Jamal’s death will not be in vain, and we owe it to his memory to fight for a more just and free world.”

In a piece for the Post‘s “Global Opinions” section, columnist Josh Rogin on Thursday cited that campaign statement and detailed two separate lawsuits that are expected to soon challenge Biden’s commitment to helping shed light on the journalist’s killing.

“Biden will be forced to quickly choose between keeping his promises and standing up for American values, or perpetuating the coverup by enabling further impunity for MBS and his accomplices,” Rogin wrote. “The former and correct choice would also send a signal to all other despotic would-be journalist-killers that the free ride Trump gave them is over.”

A documentary on Khashoggi’s life and death, entitled The Dissident, is set to hit theaters on December 25 and be available for streaming on January 8.

Directed by Bryan Fogel, known for his 2017 Oscar-winning debut Icarus, the film “does not just include the harrowing tale of Khashoggi’s horrific mystery, but an in-depth look at how Crown Prince Mohammed bin Salman, who is directly accused in the film of being involved with the murder, has fostered a society that relies on silencing its critics, and manipulating people of power,” according to reviewer Nick Allen.

“The movie is also dedicated to humanizing Khashoggi, sharing with us his big smile, and the story of his relationship with his fiancée, Hatice Cengiz,” Allen noted. “Among its intense moments, The Dissident shows its big heart, which turns into its will to fight, as Hatice is shown making a speech about Khashoggi’s death at the U.N.”

Tyler Durden
Mon, 12/21/2020 – 19:40

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DeBlasio Mocks Fox, Doubles Down On ‘Mission To Redistribute Wealth’

DeBlasio Mocks Fox, Doubles Down On ‘Mission To Redistribute Wealth’

New York Mayor Bill de Blasio laughed off criticism from Fox News over Friday comments that ‘redistribution of wealth is an important factor toward ending structural racism in education,’ saying in Monday remarks that Fox “apparently was very interested” in what he had to say.

De Blasio then doubled down, quoting Fox‘s headline.

“I’m going to say it one more time in case Fox News is watching again: ‘NYC mayor sees the redistribution of wealth as an important factor toward ending structural racism in education.’ (roughly 2:45 mark)

“Exactly right. I don’t get to say it very often, but Fox News got it exactly right. Amen,” he added. “We are going to fight structural racism through redistribution, so Fox News, congratulations, fair and balanced coverage right there.”

If we think we’re going to deal with structural racism and segregation without redistribution of wealth, we’re kidding ourselves,” he continued. “Nothing changes unless you put the resources behind it.”

Tyler Durden
Mon, 12/21/2020 – 19:20

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Lockdowns Do Not Control The Coronavirus: The Evidence

Lockdowns Do Not Control The Coronavirus: The Evidence

Via The American Institute for Economic Research,

The use of universal lockdowns in the event of the appearance of a new pathogen has no precedent. It has been a science experiment in real time, with most of the human population used as lab rats. The costs are legion. 

The question is whether lockdowns worked to control the virus in a way that is scientifically verifiable. Based on the following studies, the answer is no and for a variety of reasons: bad data, no correlations, no causal demonstration, anomalous exceptions, and so on. There is no relationship between lockdowns (or whatever else people want to call them to mask their true nature) and virus control. 

Perhaps this is a shocking revelation, given that universal social and economic controls are becoming the new orthodoxy. In a saner world, the burden of proof really should belong to the lockdowners, since it is they who overthrew 100 years of public-health wisdom and replaced it with an untested, top-down imposition on freedom and human rights. They never accepted that burden. They took it as axiomatic that a virus could be intimidated and frightened by credentials, edicts, speeches, and masked gendarmes. 

The pro-lockdown evidence is shockingly thin, and based largely on comparing real-world outcomes against dire computer-generated forecasts derived from empirically untested models, and then merely positing that stringencies and “nonpharmaceutical interventions” account for the difference between the fictionalized vs. the real outcome. The anti-lockdown studies, on the other hand, are evidence-based, robust, and thorough, grappling with the data we have (with all its flaws) and looking at the results in light of controls on the population. 

Much of the following list has been put together by data engineer Ivor Cummins, who has waged a year-long educational effort to upend intellectual support for lockdowns. AIER has added its own and the summaries. The upshot is that the virus is going to do as viruses do, same as always in the history of infectious disease. We have extremely limited control over them, and that which we do have is bound up with time and place. Fear, panic, and coercion are not ideal strategies for managing viruses. Intelligence and medical therapeutics fare much better. 

(These studies are focused only on lockdown and their relationship to virus control. They do not get into the myriad associated issues that have vexed the world such as mask mandates, PCR-testing issues, death misclassification problem, or any particular issues associated with travel restrictions, restaurant closures, and hundreds of other particulars about which whole libraries will be written in the future.) 

1. “A country level analysis measuring the impact of government actions, country preparedness and socioeconomic factors on COVID-19 mortality and related health outcomes by Rabail Chaudhry, George Dranitsaris, Talha Mubashir, Justyna Bartoszko, Sheila Riazi. EClinicalMedicine 25 (2020) 100464. “[F]ull lockdowns and wide-spread COVID-19 testing were not associated with reductions in the number of critical cases or overall mortality.”

2. “Was Germany’s Corona Lockdown Necessary?” by Christof Kuhbandner, Stefan Homburg, Harald Walach, Stefan Hockertz. Advance: Sage Preprint, June 23, 2020. “Official data from Germany’s RKI agency suggest strongly that the spread of the coronavirus in Germany receded autonomously, before any interventions became effective. Several reasons for such an autonomous decline have been suggested. One is that differences in host susceptibility and behavior can result in herd immunity at a relatively low prevalence level. Accounting for individual variation in susceptibility or exposure to the coronavirus yields a maximum of 17% to 20% of the population that needs to be infected to reach herd immunity, an estimate that is empirically supported by the cohort of the Diamond Princess cruise ship. Another reason is that seasonality may also play an important role in dissipation.”

3. “Estimation of the current development of the SARS-CoV-2 epidemic in Germanyby Matthias an der Heiden, Osamah Hamouda. Robert Koch-Institut, April 22, 2020. “In general, however, not all infected people develop symptoms, not all those who develop symptoms go to a doctor’s office, not all who go to the doctor are tested and not all who test positive are also recorded in a data collection system. In addition, there is a certain amount of time between all these individual steps, so that no survey system, no matter how good, can make a statement about the current infection process without additional assumptions and calculations.”

4. Did COVID-19 infections decline before UK lockdown? by Simon N. Wood. Cornell University pre-print, August 8, 2020. “A Bayesian inverse problem approach applied to UK data on COVID-19 deaths and the disease duration distribution suggests that infections were in decline before full UK lockdown (24 March 2020), and that infections in Sweden started to decline only a day or two later. An analysis of UK data using the model of Flaxman et al. (2020, Nature 584) gives the same result under relaxation of its prior assumptions on R.”

5. “Comment on Flaxman et al. (2020): The illusory effects of non-pharmaceutical interventions on COVID-19 in Europe by Stefan Homburg and Christof Kuhbandner. June 17, 2020. Advance, Sage Pre-Print. “In a recent article, Flaxman et al. allege that non-pharmaceutical interventions imposed by 11 European countries saved millions of lives. We show that their methods involve circular reasoning. The purported effects are pure artefacts, which contradict the data. Moreover, we demonstrate that the United Kingdom’s lockdown was both superfluous and ineffective.”

6. Professor Ben Israel’s Analysis of virus transmission. April 16, 2020. “Some may claim that the decline in the number of additional patients every day is a result of the tight lockdown imposed by the government and health authorities. Examining the data of different countries around the world casts a heavy question mark on the above statement. It turns out that a similar pattern – rapid increase in infections that reaches a peak in the sixth week and declines from the eighth week – is common to all countries in which the disease was discovered, regardless of their response policies: some imposed a severe and immediate lockdown that included not only ‘social distancing’ and banning crowding, but also shutout of economy (like Israel); some ‘ignored’ the infection and continued almost a normal life (such as Taiwan, Korea or Sweden), and some initially adopted a lenient policy but soon reversed to a complete lockdown (such as Italy or the State of New York). Nonetheless, the data shows similar time constants amongst all these countries in regard to the initial rapid growth and the decline of the disease.”

7. “Impact of non-pharmaceutical interventions against COVID-19 in Europe: a quasi-experimental studyby Paul Raymond Hunter, Felipe Colon-Gonzalez, Julii Suzanne Brainard, Steve Rushton. MedRxiv Pre-print May 1, 2020. “The current epidemic of COVID-19 is unparalleled in recent history as are the social distancing interventions that have led to a significant halt on the economic and social life of so many countries. However, there is very little empirical evidence about which social distancing measures have the most impact… From both sets of modelling, we found that closure of education facilities, prohibiting mass gatherings and closure of some non-essential businesses were associated with reduced incidence whereas stay at home orders and closure of all non-businesses was not associated with any independent additional impact.”

8. “Full lockdown policies in Western Europe countries have no evident impacts on the COVID-19 epidemicby Thomas Meunier. MedRxiv Pre-print May 1, 2020. “This phenomenological study assesses the impacts of full lockdown strategies applied in Italy, France, Spain and United Kingdom, on the slowdown of the 2020 COVID-19 outbreak. Comparing the trajectory of the epidemic before and after the lockdown, we find no evidence of any discontinuity in the growth rate, doubling time, and reproduction number trends. Extrapolating pre-lockdown growth rate trends, we provide estimates of the death toll in the absence of any lockdown policies, and show that these strategies might not have saved any life in western Europe. We also show that neighboring countries applying less restrictive social distancing measures (as opposed to police-enforced home containment) experience a very similar time evolution of the epidemic.”

9. “Trajectory of COVID-19 epidemic in Europe by Marco Colombo, Joseph Mellor, Helen M Colhoun, M. Gabriela M. Gomes, Paul M McKeigue. MedRxiv Pre-print. Posted September 28, 2020. “The classic Susceptible-Infected-Recovered model formulated by Kermack and McKendrick assumes that all individuals in the population are equally susceptible to infection. From fitting such a model to the trajectory of mortality from COVID-19 in 11 European countries up to 4 May 2020 Flaxman et al. concluded that ‘major non-pharmaceutical interventions — and lockdowns in particular — have had a large effect on reducing transmission’. We show that relaxing the assumption of homogeneity to allow for individual variation in susceptibility or connectivity gives a model that has better fit to the data and more accurate 14-day forward prediction of mortality. Allowing for heterogeneity reduces the estimate of ‘counterfactual’ deaths that would have occurred if there had been no interventions from 3.2 million to 262,000, implying that most of the slowing and reversal of COVID-19 mortality is explained by the build-up of herd immunity. The estimate of the herd immunity threshold depends on the value specified for the infection fatality ratio (IFR): a value of 0.3% for the IFR gives 15% for the average herd immunity threshold.”

10. “Effect of school closures on mortality from coronavirus disease 2019: old and new predictionsby Ken Rice, Ben Wynne, Victoria Martin, Graeme J Ackland. British Medical Journal, September 15, 2020. “The findings of this study suggest that prompt interventions were shown to be highly effective at reducing peak demand for intensive care unit (ICU) beds but also prolong the epidemic, in some cases resulting in more deaths long term. This happens because covid-19 related mortality is highly skewed towards older age groups. In the absence of an effective vaccination programme, none of the proposed mitigation strategies in the UK would reduce the predicted total number of deaths below 200 000.”

11. “Modeling social distancing strategies to prevent SARS-CoV2 spread in Israel- A Cost-effectiveness analysisby Amir Shlomai, Ari Leshno, Ella H Sklan, Moshe Leshno. MedRxiv Pre-Print. September 20, 2020. “A nationwide lockdown is expected to save on average 274 (median 124, interquartile range (IQR): 71-221) lives compared to the ‘testing, tracing, and isolation’ approach. However, the ICER will be on average $45,104,156 (median $ 49.6 million, IQR: 22.7-220.1) to prevent one case of death. Conclusions: A national lockdown has a moderate advantage in saving lives with tremendous costs and possible overwhelming economic effects. These findings should assist decision-makers in dealing with additional waves of this pandemic.” 

12. Too Little of a Good Thing A Paradox of Moderate Infection Control, by Ted Cohen and Marc Lipsitch. Epidemiology. 2008 Jul; 19(4): 588–589. “The link between limiting pathogen exposure and improving public health is not always so straightforward. Reducing the risk that each member of a community will be exposed to a pathogen has the attendant effect of increasing the average age at which infections occur. For pathogens that inflict greater morbidity at older ages, interventions that reduce but do not eliminate exposure can paradoxically increase the number of cases of severe disease by shifting the burden of infection toward older individuals.”

13. “Smart Thinking, Lockdown and COVID-19: Implications for Public Policy by Morris Altman. Journal of Behavioral Economics for Policy, 2020. “The response to COVID-19 has been overwhelmingly to lockdown much of the world’s economies in order to minimize death rates as well as the immediate negative effects of COVID-19. I argue that such policy is too often de-contextualized as it ignores policy externalities, assumes death rate calculations are appropriately accurate and, and as well, assumes focusing on direct Covid-19 effects to maximize human welfare is appropriate. As a result of this approach current policy can be misdirected and with highly negative effects on human welfare. Moreover, such policies can inadvertently result in not minimizing death rates (incorporating externalities) at all, especially in the long run. Such misdirected and sub-optimal policy is a product of policy makers using inappropriate mental models which are lacking in a number of key areas; the failure to take a more comprehensive macro perspective to address the virus, using bad heuristics or decision-making tools, relatedly not recognizing the differential effects of the virus, and adopting herding strategy (follow-the-leader) when developing policy. Improving the decision-making environment, inclusive of providing more comprehensive governance and improving mental models could have lockdowns throughout the world thus yielding much higher levels of human welfare.”

14. “SARS-CoV-2 waves in Europe: A 2-stratum SEIRS model solutionby Levan Djaparidze and Federico Lois. MedRxiv pre-print, October 23, 2020. “We found that 180-day of mandatory isolations to healthy <60 (i.e. schools and workplaces closed) produces more final deaths if the vaccination date is later than (Madrid: Feb 23 2021; Catalonia: Dec 28 2020; Paris: Jan 14 2021; London: Jan 22 2021). We also modeled how average isolation levels change the probability of getting infected for a single individual that isolates differently than average. That led us to realize disease damages to third parties due to virus spreading can be calculated and to postulate that an individual has the right to avoid isolation during epidemics (SARS-CoV-2 or any other).”

15. “Did Lockdown Work? An Economist’s Cross-Country Comparison by Christian Bjørnskov. SSRN working paper, August 2, 2020. “The lockdowns in most Western countries have thrown the world into the most severe recession since World War II and the most rapidly developing recession ever seen in mature market economies. They have also caused an erosion of fundamental rights and the separation of powers in a  large part of the world as both democratic and autocratic regimes have misused their emergency powers and ignored constitutional limits to policy-making (Bjørnskov and Voigt, 2020). It is therefore important to evaluate whether and to which extent the lockdowns have worked as officially intended: to suppress the spread of the SARS-CoV-2 virus and prevent deaths associated with it. Comparing weekly mortality in 24 European countries, the findings in this paper suggest that more severe lockdown policies have not been associated with lower mortality. In other words, the lockdowns have not worked as intended.”

16.”Four Stylized Facts about COVID-19” (alt-link) by Andrew Atkeson, Karen Kopecky, and Tao Zha. NBER working paper 27719, August 2020. “One of the central policy questions regarding the COVID-19 pandemic is the question of which non-pharmeceutical interventions governments might use to influence the transmission of the disease. Our ability to identify empirically which NPI’s have what impact on disease transmission depends on there being enough independent variation in both NPI’s and disease transmission across locations as well as our having robust procedures for controlling for other observed and unobserved factors that might be influencing disease transmission. The facts that we document in this paper cast doubt on this premise…. The existing literature has concluded that NPI policy and social distancing have been essential to reducing the spread of COVID-19 and the number of deaths due to this deadly pandemic. The stylized facts established in this paper challenge this conclusion.”

17. “How does Belarus have one of the lowest death rates in Europe? by Kata Karáth. British Medical Journal, September 15, 2020. “Belarus’s beleaguered government remains unfazed by covid-19. President Aleksander Lukashenko, who has been in power since 1994, has flatly denied the seriousness of the pandemic, refusing to impose a lockdown, close schools, or cancel mass events like the Belarusian football league or the Victory Day parade. Yet the country’s death rate is among the lowest in Europe—just over 700 in a population of 9.5 million with over 73 000 confirmed cases.”

18. “Association between living with children and outcomes from COVID-19: an OpenSAFELY cohort study of 12 million adults in England by Harriet Forbes, Caroline E Morton, Seb Bacon et al., by MedRxiv, November 2, 2020. “Among 9,157,814 adults ≤65 years, living with children 0-11 years was not associated with increased risks of recorded SARS-CoV-2 infection, COVID-19 related hospital or ICU admission but was associated with reduced risk of COVID-19 death (HR 0.75, 95%CI 0.62-0.92). Living with children aged 12-18 years was associated with a small increased risk of recorded SARS-CoV-2 infection (HR 1.08, 95%CI 1.03-1.13), but not associated with other COVID-19 outcomes. Living with children of any age was also associated with lower risk of dying from non-COVID-19 causes. Among 2,567,671 adults >65 years there was no association between living with children and outcomes related to SARS-CoV-2. We observed no consistent changes in risk following school closure.”

19. “Exploring inter-country coronavirus mortality By Trevor Nell, Ian McGorian, Nick Hudson. Pandata, July 7, 2020. “For each country put forward as an example, usually in some pairwise comparison and with an attendant single cause explanation, there are a host of countries that fail the expectation. We set out to model the disease with every expectation of failure. In choosing variables it was obvious from the outset that there would be contradictory outcomes in the real world. But there were certain variables that appeared to be reliable markers as they had surfaced in much of the media and pre-print papers. These included age, co-morbidity prevalence and the seemingly light population mortality rates in poorer countries than that in richer countries. Even the worst among developing nations—a clutch of countries in equatorial Latin America—have seen lighter overall population mortality than the developed world. Our aim therefore was not to develop the final answer, rather to seek common cause variables that would go some way to providing an explanation and stimulating discussion. There are some very obvious outliers in this theory, not the least of these being Japan. We test and find wanting the popular notions that lockdowns with their attendant social distancing and various other NPIs confer protection.”

20. “Covid-19 Mortality: A Matter of Vulnerability Among Nations Facing Limited Margins of Adaptation by Quentin De Larochelambert, Andy Marc, Juliana Antero, Eric Le Bourg, and Jean-François Toussaint. Frontiers in Public Health, 19 November 2020. “Higher Covid death rates are observed in the [25/65°] latitude and in the [−35/−125°] longitude ranges. The national criteria most associated with death rate are life expectancy and its slowdown, public health context (metabolic and non-communicable diseases (NCD) burden vs. infectious diseases prevalence), economy (growth national product, financial support), and environment (temperature, ultra-violet index). Stringency of the measures settled to fight pandemia, including lockdown, did not appear to be linked with death rate. Countries that already experienced a stagnation or regression of life expectancy, with high income and NCD rates, had the highest price to pay. This burden was not alleviated by more stringent public decisions. Inherent factors have predetermined the Covid-19 mortality: understanding them may improve prevention strategies by increasing population resilience through better physical fitness and immunity.”

21. “States with the Fewest Coronavirus Restrictionsby Adam McCann. WalletHub, Oct 6, 2020. This study assesses and ranks stringencies in the United States by states. The results are plotted against deaths per capita and unemployment. The graphics reveal no relationship in stringency level as it relates to the death rates, but finds a clear relationship between stringency and unemployment. 

22. The Mystery of Taiwan: Commentary on the Lancet Study of Taiwan and New Zealand, by Amelia Janaskie. American Institute for Economic Research, November 2, 2020. “The Taiwanese case reveals something extraordinary about pandemic response. As much as public-health authorities imagine that the trajectory of a new virus can be influenced or even controlled by policies and responses, the current and past experiences of coronavirus illustrate a different point. The severity of a new virus might have far more to do with endogenous factors within a population rather than the political response. According to the lockdown narrative, Taiwan did almost everything ‘wrong’ but generated what might in fact be the best results in terms of public health of any country in the world.”

23. “Predicting the Trajectory of Any COVID19 Epidemic From the Best Straight Line by Michael Levitt, Andrea Scaiewicz, Francesco Zonta. MedRxiv, Pre-print, June 30, 2020. “Comparison of locations with over 50 deaths shows all outbreaks have a common feature: H(t) defined as loge(X(t)/X(t-1)) decreases linearly on a log scale, where X(t) is the total number of Cases or Deaths on day, t (we use ln for loge). The downward slopes vary by about a factor of three with time constants (1/slope) of between 1 and 3 weeks; this suggests it may be possible to predict when an outbreak will end. Is it possible to go beyond this and perform early prediction of the outcome in terms of the eventual plateau number of total confirmed cases or deaths? We test this hypothesis by showing that the trajectory of cases or deaths in any outbreak can be converted into a straight line. Specifically Y(t)≡−ln(ln(N/X(t)),is a straight line for the correct plateau value N, which is determined by a new method, Best-Line Fitting (BLF). BLF involves a straight-line facilitation extrapolation needed for prediction; it is blindingly fast and amenable to optimization. We find that in some locations that entire trajectory can be predicted early, whereas others take longer to follow this simple functional form.” 

24. “Government mandated lockdowns do not reduce Covid-19 deaths: implications for evaluating the stringent New Zealand response by John Gibson. New Zealand Economic Papers, August 25, 2020. “The New Zealand policy response to Coronavirus was the most stringent in the world during the Level 4 lockdown. Up to 10 billion dollars of output (≈3.3% of GDP) was lost in moving to Level 4 rather than staying at Level 2, according to Treasury calculations. For lockdown to be optimal requires large health benefits to offset this output loss. Forecast deaths from epidemiological models are not valid counterfactuals, due to poor identification. Instead, I use empirical data, based on variation amongst United States counties, over one-fifth of which just had social distancing rather than lockdown. Political drivers of lockdown provide identification. Lockdowns do not reduce Covid-19 deaths. This pattern is visible on each date that key lockdown decisions were made in New Zealand. The apparent ineffectiveness of lockdowns suggests that New Zealand suffered large economic costs for little benefit in terms of lives saved.”

Tyler Durden
Mon, 12/21/2020 – 19:00

via ZeroHedge News https://ift.tt/3ax2SQR Tyler Durden

SIFMA Issues Paper To Assist With Planning For Negative Rates In The US

SIFMA Issues Paper To Assist With Planning For Negative Rates In The US

If one listens to the Fed, or looks at market-implied odds of subzero rates…

… the US will – unlike Europe or Japan – avoid the devastating central bank experiment that is negative interest rates, which not only does not encourage inflation but in fact ensures even greater savings, even less spending…

… even more disinflation and even greater bank losses as yield curves pancake.

Yet is there more than meets the eye here, and behind the optimistic facade of the imminent reflation trade, are the biggest US financial institutions quietly preparing for negative rates?

This is a question that bears asking, after this morning the Securities Industry and Financial Markets Association (SIFMA) issued a white paper to assist market participants with planning for the potential of a negative interest-rate policy in the US. The paper, titled “U.S. Negative Interest Rates Policy Checklist,” is co-authored by Sifma and Ernst & Young LLP

“While Sifma is not forecasting a U.S. negative interest rates policy, near term, our members do consider the need to prepare for such a possibility,” Sifma’s Charles DeSimone said in a press release accompanying the report. “While the probability is low, the impact would be high.”

And while Sifma – which is the biggest industry trade group representing securities firms, banks, and asset management companies – may not be forecasting negative rates, it was explicit enough in its intro to make it clear that NIRP remains a distinct possibility for the US:

The potential impact of a negative interest rate (NIR) policy in the US continues to be discussed by market participants. Federal Reserve Chairman Jerome H. Powell has previously stated that the US does not see negative interest rates as an appropriate policy response to economic disruption caused by the pandemic. However, the uncertainty of US economic recovery and the current 0% to 0.25% monetary policy target range for the federal funds rate continues to lead market participants to consider the future possibility of an NIR policy in the US.

Then, in a moment of bizarre absurdity, next to a photo of a jenga tower that is about to collapse (think The Big Short), the paper describes how certain capital markets products may be impacted in the event of negative interest rates in the US, followed by a checklist of considerations that can be used by firms seeking to mobilize negative interest readiness programs within their institutions. The checklist is structured across the following key themes: US NIR program governance and mobilization; financial exposure analysis; contract and counterparty customer analysis; portfolio strategies and profitability; technology and operations; finance, tax and accounting; and regulatory and policy considerations.

While we have discussed the myriad negative consequences that would result from NIRP previously, the paper did recap some of the potential horror stories that it now appears may be coming to the US (because otherwise, this paper would never have been published):

  • NIR could result in derivative product floating rate payments (inclusive of any spread) becoming negative. For products such as swaps, this could result in one party having to pay (or receive) on both legs (i.e., the fixed leg and the absolute value of the floating leg)… Further, derivative trade capture and pricing models may need significant enhancements to account for negative payments, forward curves and negative strikes, and other models such as prepayment models and market risk, counterparty risk and margin models may need enhancements to handle negative rates. The impacts to third parties such as central clearing parties and exchanges will also need to be understood and addressed.
  • Given that the repo rate is typically set based on a market benchmark interest rate, there is potential that repo rates could go negative if the US were to adopt an NIR policy. There is precedence of repo rates falling into negative territory in the US, but the driver historically has been high market demand of certain collateral (i.e., repo special issue trading). So, while operations and technology systems may have been tested and workarounds created for such events, additional challenges may arise if those solutions are not scalable or cannot handle large volumes of negative rate repos, as would be expected in an NIR environment.
  • In a negative rate environment, clients could experience a negative yield on sweep balances, while additional management fees or expenses would further reduce incentives for investors to hold excess cash in such sweep products. Customers may chase yield and avoid sweep products with negative interest rates by moving funds to free credit balances, other sweep vehicles or products with a higher risk profile.

Read the full paper here.

Tyler Durden
Mon, 12/21/2020 – 18:40

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When Market Ebullience Meets A Left Hook

When Market Ebullience Meets A Left Hook

Peter Boockvar, CIO of Bleakley Advisory Group, joins Real Vision editor Jack Farley to break down his market outlook as stimulus talks draw to a close and an alarming new strain of COVID-19 spreads throughout the United Kingdom. Boockvar makes his case for why inflation will continue to rise alongside nominal yields in 2021, and he explains why this macro outlook leads him to look favorably upon commodities and value stocks that trade at significantly low price/earnings multiples since he expects multiples to compress across the equity landscape as nominal yields rise. Boockvar gives a strategic update on the state of the Fed’s QE programs and argues that the expiration of the Fed’s emergency lending programs is not unwelcome and, in fact, is overdue. Lastly, Boockvar shares with Farley several stocks on his radar, such as CVS Health Corp ($CVS) and Walgreens Boots Alliance Inc ($WBA) as well as evaluates their future business prospect. In the intro, Real Vision’s Haley Draznin monitors the markets as stimulus relief package passes in the US and a new strain of the coronavirus emerged in England, prompting fresh travel restrictions across Europe.

Tyler Durden
Mon, 12/21/2020 – 18:30

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Red And Blue States: It’s Time For A Multistate Solution

Red And Blue States: It’s Time For A Multistate Solution

Authored by James Ketler via The Mises Institute,

Far from being a unitive force, powerful, centralized government only serves to pit blocs of the electorate against each other. Division grows in lockstep with the ceaseless expansion of federal power, and the 2020 presidential election was a mere symptom of how heated that division has become. How much worse can it get? That remains to be seen. After Joe Biden’s contested presidential win, the country may have to break apart into multiple independent political units if it is to avert further social disintegration.

Power and Polarization

To win elections, candidates must pander to the lowest common political denominator; i.e., they must promise to expand wide-reaching projects like social security, public healthcare, economic stimulus, and the military. In fact, candidates are incentivized to outpromise one another and when in power to follow through on carrying out at least some of those promises in the interest of reelection. The mass-democratic structure lubricates this process, as costs are distributed across the entire population and thus become more or less “hidden.” That’s led to a constant, creeping growth in government power, behind which Republicans and Democrats almost always form a united front. As Tom Woods says: “No matter who you vote for, you always wind up getting John McCain.” Within that statist unity, however, exist the seeds of electoral division.

Old, widely accepted government programs are used by politicians as a springboard for new, more expansive powers. Consider, for instance, the Green New Deal; it could only have been seriously proposed because of the broad-based support the New Deal programs have today. Each new law, regulation, bureau, and program is like a brick on top of which many others can be laid. Government seldom abrogates any of its power, tending instead towards constantly expanding it. That raises the stakes higher and higher with each successive election, with the winning party taking office with more power than ever before.

Centrally, as vote seekers, candidates must always work to demonize the opposition and distance themselves from them. To safeguard their own interests, voters must factionalize behind one candidate or the other, often coming to develop a deep, politico-cultural affinity with their choice, though they may only be the “lesser of two evils.” This drives a sharp wedge down the center of the political spectrum, pushing both sides further and further apart. As competing ideologies vie for control of the system, smaller and more amicable politico-cultural disputes thus become the faultlines of national fractionation. Many nuanced opinions are pounded into the ground and replaced, instead, by the Republican-Democrat binary. These two sides look at politics with irreconcilable politico-cultural presuppositions, driving each side—as both fight for control of the same system—to hate the other.

Once one party seizes control of the federal apparatus, it tries to solidify support from independents and moderates, while also working to “punish” its political rivals. From the enlightened, liberal principles that originally drove its adoption in the West, democracy has melted and deformed—as it was always inevitably bound to—into an arena of open-faced realpolitik. Both parties seek to win by any means necessary, and the losers must always “accept the results of the election”—that is, have the will of the majority imposed upon them. It’s a system that neither side can consistently accept and that both—for the good of the people—must agree to reject.

America’s Division Crisis

Nearly eight in ten Republican voters agree that this year’s presidential election was rigged against President Trump through the perpetration of widespread voter fraud. Biden’s “win” was, as they see it, a fait accompli—predetermined before the first vote was cast. The legitimacy of the past few elections have been widely contested, moreover, as with, for instance, the Democrats’ accusations of Russian interference in 2016. After years of investigations and hearings, at least, those accusations were proven false, but this time around, further inquiry into the Republicans’ claims of voter fraud have been blocked by the mainstream media and the Washington establishment. With just cause, therefore, Trump loyalists have grasped at every legal recourse they can find in hopes that something will stick. But the bid to overturn the election was, from its inception, a long shot. On January 20, the 74 million Americans who voted for Trump will be forced under the yoke of a Biden presidency, which will only serve to turn up the heat in the country even more.

Nevertheless, Joe Biden has continuously tried to position himself as a moral leader who will “unite” the nation. In his November 7 victory address, he said, “I will govern as an American president. I’ll work as hard for those who didn’t vote for me as those who did.” Does anyone, though, actually believe that? Biden’s politics have differed over the years, but it’s clear that his 2020 agenda is by far further to the left than that of any other president in American history. At his side is Kamala Harris, who was rated the most progressive senator in all of Congress last year. How can anyone pretend to imagine that the next administration will be at all “unifying”? Better yet, how can anyone think any modern presidency will bring America together? Since 2016, the Democratic Party has freely embraced the tenets of socialism and radical progressive politics, while the rise of Trump helped fuel the growth of a new “America First” nationalist populism in the Republican Party. In just the past four years, the two parties have aggressively shifted away from each other and toward their ideological fringes. Moving forward, that split will likely only widen further.

On the campaign trail, Biden identified himself as a “transition candidate” for a deeper, more radical leftism coming down the line. First, the likes of Kamala Harris will take the reins of the country; then, AOC and “the Squad. The Constitution-bashing, history-flipping platform of these soon-to-be party leaders will only exacerbate left-right tensions even further as they deal the coup de grâce to America’s founding principles. On the conservative side, Trump insiders have already pointed to the possibility of the outgoing president staging a comeback campaign in 2024. And if he doesn’t run himself, it’ll be one of his children, or his closest allies in Congress—perhaps Tom Cotton or Matt Gaetz. The “Trump brand” looks like it’s here to stay in the Republican Party, and, if it is, it will continue to focus on carrying out the MAGA agenda. In fact, after four years of Biden, the Trump camp may be more energized than ever before. As the national consciousness continues to fork apart all the more diametrically, friends and neighbors will become—in the affairs of state, at least—ever more bitter enemies, and the dream of a “united” US will fall further out of reach.

With that in mind, we must ask: Why should America be a single country at all? The states have for years already been working to nullify federal legislation on guns, drugs, healthcare, immigration, the environment, and police militarization. Why hold the states together in a union whose diktats they each want to escape? That steady resistance is unlikely to do anything but grow. Last month, after one of Biden’s top covid policy advisors called for a national lockdown, more than a dozen Republican governors expressed their refusal to comply. How much more will it take before states decide to just walk away entirely?

Secession would give states full sovereignty over their own affairs, so that voters could live under policies more friendly and suitable to their own local and regional interests. There would no longer be a system of national politics, through which voters control and domineer others hundreds of miles away. From the very earliest years of the republic, secession was considered a viable possibility. The United States was not considered a single, monolithic blob, as it often is today, but rather a voluntary confederation of free and independent states associated for the preservation of the common good. If the political tides turned and the Union ceased to be beneficial to its constituent parts, each was free to leave it. In 1816, Thomas Jefferson made this clear:

“[I]f any state in the union will declare that it prefers separation….I have no hesitation in saying ‘let us separate.’ I would rather the states should withdraw, which are for unlimited commerce & war, and confederate with those alone which are for peace & agriculture.”

Though the public perception of secession has been radically altered since the Civil War, America’s founding principles respect the right of every state to leave the Union. At this point, the states’ reassertion of that right has been long overdue. Secession is now the only way for the millions of tired and fed-up Americans to protect their interests against federal tyranny. Without it, nothing else can prevent the eventual breakdown of the social order, which is looming in the country’s future.

Just this past summer, far-left looters clashed violently with right-wing groups and police in city streets across the nation from Portland to Kenosha. Some of the postelection “Stop the Steal” rallies have themselves led to dangerous confrontations, including stabbings in Washington, DC, and a shooting in Washington State. Indeed, a poll from September revealed that around 20 percent of voters in general would eagerly support the use of violence against their political opponents. Although the pivotal spark may have not yet arrived, the scaffolding for potential civil disaster is already in place. When the last straw breaks, will America spiral into chaos and insurrection, or will cooler heads agree to peaceful separation?

A Secessionist Moment

The idea of secession is, thankfully, neither alien nor farfetched to voters. In fact, widespread calls for secession have already been made in response to recent presidential elections. After Obama’s reelection, the White House’s “We the People” initiative was inundated by petitions from all fifty states to be granted the right of unilateral secession. When Trump was elected, Democrats in Oregon and California organized serious mass secessionist movements that almost led to both states holding referenda on the topic. With each new election, the politico-cultural divide in America grows deeper and a national breakup looks all the more alluring. The impending Biden presidency may be the drop that spills the bucket.

poll from Hofstra University this past September found that 44 percent of Republican respondents were open to the possibility of seceding if Joe Biden was elected. For millions of Trump voters, self-determination is an essential component to preserving their families, finances, and ways of life. Even Rush Limbaugh—the “king of conservative talk radio”—recently pondered whether, without secession, right-wing ideals can ever truly “win” again. If some Republican-majority states managed to leave the Union, that might mean lower taxes, fewer regulations, the repeal of gun laws, a new gold standard, school choice, abortion bans, and a more free healthcare market across the board. As independent states, they may discover that Trumpian politics doesn’t actually represent them after all and instead forge paths more in line with their own local traditions. At last, political diversity would be allowed to emerge and flourish in these smaller, decentralized states, keeping the government more homegrown and orienting politics more toward the interests of the people.

What’s most promising is that a few recent murmurings of secession have actually come from GOP lawmakers. After the election, Price Wallace, a state congressman from Mississippi, expressed his interest in secession, followed by Congressman Randy Weber, who succeeded Ron Paul for Texas’s fourteenth congressional district seat. Weber’s secessionist endorsement helped generate attention for the Texas Nationalist Movement (or “Texit”), including a sudden spike in the group’s membership registrations. Weeks later, Texas state congressman Kyle Biedermann announced that when the Texas House resumes session in January, he’ll introduce a bill to allow a popular referendum on the question of secession. Seemingly in support of Biedermann’s proposal, the chairman of the Texas Republican Party, Allen West, then commented, “Perhaps law-abiding states should bond together and form a union of states that will abide by the constitution.” Evidently, state legislators are entertaining the notion, many with considerable interest.

America may be on the brink of a “secessionist moment,” and if it is, the time to dismount the surly tiger of big government is now. Like dominoes, the process need only begin with one single state and many more will surely follow. After everything, that’s the only real solution left for America—shaking hands, splitting up, and staying friends from afar, for clearly the country has already split apart in heart, mind, and soul, and at last this internal reality must be reflected in the legal reality.

Tyler Durden
Mon, 12/21/2020 – 18:20

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Bank Of America Expects 1.1BN People Will Be Vaccinated For COVID By Late 2020

Bank Of America Expects 1.1BN People Will Be Vaccinated For COVID By Late 2020

If 2020 has been a year to remember, then it has also been a year filled with surprises, where nothing really worked out like investors had anticipated. Following one of the fastest wipeouts in modern history, markets around the world have rebounded and according to Bank of America, global equity market cap has topped $100TN, soaring $40TN from the lows seen in March.

According to BofA, the rebound in stocks has been one of the strongest of the last century.

But as markets showed again on Monday, anything that upsets the outlook on the vaccination timeline, whether by calling the efficacy of vaccines into question, or by hinting at a new version of the virus that could spread more quickly (or, in theory, could kill more efficiently), can deliver a shock to markets, prompting a selloff (if a brief one).

According to official forecasts from Operation Warp Speed, some 50 million Americans are expected to have been inoculated by the end of January, according to DHHS.

Looking even further down the line, analysts at Bank of America projected that 1.1BN people will be vaccinated by the end of 2021, a figure that dwarfs the 75MM who contracted the virus – or who at least tested positive, or were diagnosed, with the virus

When it comes to consumer goods, inflation hasn’t been as pronounced. But as far as asset price go, valuations are so stretched…

…BofA’s “Main Street Inequality” index has surged to 6.3x in 2020.

The only problem is as vaccinations continue and the US nears the 50%-70% area, the Fed will likely face some pressure from savers to start allowing interest rates to rise to benefit savers. At what point will the central bank acquiesce, feeling that the real economy is finally resilient enough to withstand a steep drop in stocks.

Tyler Durden
Mon, 12/21/2020 – 18:00

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Pork City: Here Are The Most Ridiculous Pet Projects In $900 Billion Stimulus Package

Pork City: Here Are The Most Ridiculous Pet Projects In $900 Billion Stimulus Package

As Congress prepares to pass a $900 billion COVID-19 stimulus bill rolled into a consolidated appropriations package – with funding for assistance for households and businesses, along with vaccine distribution and other pandemic-related measures, the bill also includes a ton of pork per usual.

We already know about the $600 checks for each adult and dependent. This time, however, ‘mixed-status’ households where eligible citizens live with illegal immigrants, will not only receive payments – they can retroactively claim benefits after being left out of the last round.

The bill also includes $300 per week in enhanced unemployment benefits, and would extend unemployment to 50 weeks for both state and federal programs, vs. the standard 26 weeks.

Illustration via WSJ.com

And now, on to the pork… which includes billions to foreign countries, US military weapons purchases which go above and beyond their budgets, $40 million for the Kennedy Center, and nearly $200 million so that federal HIV/AIDS workers overseas can buy cars and car insurance, among other things.

FOREIGN HANDOUTS:

A minimum of $3.3 billion in grants to Israel.

Also included is $453 million to Ukraine, on top of the $400 million Trump eventually released. No word on how much of that goes to the ‘big guy.’

$10 million for “gender programs” in Pakistan.

$1.3 billion to Egypt, and $700 million to Sudan.

$135 million to Burma, $85.5 million to Cambodia, $1.4 billion for an “Asia Reassurance Initiative Act,” and $130 million to Nepal.

BOMBS AWAY

$4 billion for Navy weapons procurement, $2 billion for Space Force and $2 billion for Air Force missiles.

BUREAUCRATIC BONANZA AND OTHER MALARKEY

$208 million to upgrade the Census Bureau’s computer systems (which couldn’t have waited until the next count in 2030?).

$40 million for the Kennedy Center, and funding to discourage teenagers from drinking and hooking up.

$193 million for federal HIV/AIDS workers to buy cars and car insurance overseas, and a feminist museum.

Funding for a commission to educate consumers “about the dangers associated with using or storing portable fuel containers for flammable liquids near an open flame.” (What?)

Just remember, $600 is a significant amount…

Tyler Durden
Mon, 12/21/2020 – 17:40

via ZeroHedge News https://ift.tt/3pbHLro Tyler Durden