No Progress With Russia if “Gun At Ukraine’s Head”: Blinken

No Progress With Russia if “Gun At Ukraine’s Head”: Blinken

Authored by Dave DeCamp via AntiWar.com,

Secretary of State Antony Blinken said Wednesday that it would be hard to make progress with Russia during upcoming security talks as long as a “gun is pointed to Ukraine’s head.”

Russia denies US accusations that it is planning an invasion of Ukraine and points to US and NATO activity in the region as the source of tensions. The US and Russia are set to hold talks on the Ukraine situation and other issues on January 10th in Geneva.

Image: AFP/Getty

“I think if they’re going to bear fruit, if they’re going to show real progress, that will require de-escalation,” Blinken said of the upcoming talks. “It’s very hard to make actual progress in any of these areas in an atmosphere of escalation and threat with a gun pointed to Ukraine’s head.”

Blinken made the comments alongside German Foreign Minister Annalena Baerbock, who warned at the same press conference that a Russian invasion of Ukraine would have “severe consequences.” The US has been coordinating closely with its European allies ahead of the negotiations with Russia to present a united front.

While Baerbock warned of “severe consequences,” the Western powers have stopped short of threatening military action if Russia invades. The US has threatened major sanctions against Moscow that would aim to isolate Russia from the global financial system, which Russian President Vladimir Putin warned against during a recent call with President Biden.

Among other things, Russia wants guarantees from the US that NATO won’t expand further eastward. Since 2014, the US and NATO have significantly increased their presence in the Black Sea and other areas near Russia, and Moscow is getting tired of the Western provocations.

Further on Thursday, Russian Deputy Foreign Minister Ryabkov issued a firm statement saying “Russian demands on Ukraine must be addressed urgently” while cautioning against any “potential use of economic pressure by the US.”

Other issues are expected to be discussed, including arms control. After the US-Russia talks on January 10th, NATO will hold a meeting with Russia at the alliance’s headquarters in Brussels. On January 13th, the Vienna-based Organization for Security and Cooperation in Europe will meet.

Tyler Durden
Thu, 01/06/2022 – 12:30

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China’s Zero COVID Strategy Weighs On Oil Demand Growth 

China’s Zero COVID Strategy Weighs On Oil Demand Growth 

As the COVID-19 variant, Omicron spreads across the US, Beijing has had a strict zero-tolerance policy to mitigate the spread of the virus by locking down cities and has sparked disruptions to factory production, travel, and consumer spending, according to Bloomberg

In Xi’an, a northwest city larger than New York City, lockdowns have made it impossible to enter or go out of the metro area. According to traffic data from Baidu Inc., congestion in the city plunged 29% on Jan. 4 compared with the same day last year. However, congestion in Shanghai, Beijing’s commercial capital, and Guangzhou was slightly above average. 

With the transmission of the virus higher in the winter months, Beijing will likely keep lockdowns or at least strict public health measures in place until spring. China’s zero-Covid policy is set to weigh on economic activity and destroy demand growth for crude.

“In view of the government’s escalated mobility restrictions, IHS Markit has further lowered its projection for China’s total oil demand in the first quarter of 2022 by 420,000 barrels a day,” said Fenglei Shi, associate director of oil markets. Shi noted the revision includes 248,000 barrels-a-day of gasoline and 124,000 barrels of jet fuel. National figures show oil demand was approximately 14.2 million barrels in November. 

There’s a growing confluence among research firms that oil demand in China will slump in the first quarter. Energy Aspects Ltd. also reduced its first-quarter estimate by 110,000 barrels a day. It warned further reductions would be seen if other cities were placed into lockdown. Wood Mackenzie Ltd. is another firm that said gasoline consumption would fall by 15,000 barrels per day this quarter. 

China’s harsh measures to contain the outbreak instead of living with the virus are slowing its economy. As a result, Beijing has pledged to stabilize the economy. 

Last month, the PBOC cut the RRR by 50bps effective Dec. 15, a move that would release an abundance of liquidity into markets. Goldman Sachs expects another reduction in the RRR in the first quarter, with easing focused on credit and fiscal measures to create a soft landing. 

Besides lockdowns, oil demand could slip even further during the Lunar New Year, beginning on Feb. 1. 

To sum up, pandemic lockdowns, holidays, and Beijing’s clean-air orders aimed at curbing industrial production ahead of the Winter Olympics next month are expected to reduce China’s first-quarter oil demand. 

Meanwhile, OPEC+ has agreed to approve another 400,000 barrel-a-day increase scheduled for February. Now, the question is if OPEC+ will stick to the script or deviate from next month’s meeting due to a China slowdown.

Tyler Durden
Thu, 01/06/2022 – 12:10

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The Trojan Doctrine: Trademarks and the Law of the Horse

Trademark law desperately needs the Trojan Doctrine. Rather than defining the doctrine, I begin with an illustration. Magellan’s Travel (former slogan: “Safe Travel Begins at Magellan’s”) specializes in books and equipment for travelers. Magellan was a famous explorer, so on the surface the trademark makes perfect sense. Many people, when asked who Magellan was, will say that he was the first person to circumnavigate the globe.

In fact, Magellan never circumnavigated the globe, but was killed half-way across, in the Philippines. The whole voyage also managed to do in 250 out of 270 members of Magellan’s crew, apparently also the likely fate of those who shop at Magellan Travel, especially if they are carrying Amelia Earhart Luggage.

The Trojan Doctrine, I suggest, should invalidate trademarks if consumers—had they only thought hard about the phrase—wouldn’t dream of buying a product with such an inapt name. One might think of this as a sort of doctrine of “tertiary meaning.” I don’t know what precisely is harmful about such trademarks, but surely there must be something.

Consider Rembrandt Toothpaste, which supposedly whitens teeth. Sparkling teeth are good, and Rembrandt van Rijn is good. And yet Rembrandt’s paintings are mostly done in deep, dark colors. The subjects almost never show their teeth, for reasons familiar to those who know Renaissance hygiene. Are the Rembrandt Toothpaste people sending us a hidden message about the efficacy of their product? Are they trying to spread artistic illiteracy? There ought to be a law.

Other examples [including Trojan] abound.

I foolishly bought a Random House Unabridged Dictionary before thinking the matter through more deeply. On reflection, I realize that randomness is the quality I least want in a dictionary—or in a house—either in the sequence of the entries or their content. I would much prefer a Well-Organized House Unabridged Dictionary. Falsely misled, I have been irreparably harmed. I was even tempted to drive a Mitsubishi Mirage or a Chevy Nova, until I recognized that I should instead get a car that is real and doesn’t explode.

But as defective trademarks go, these are nothing compared to the mark that gives the Trojan Doctrine its name. When you think of Trojan, what do you first think of? Some say the war. Some say the USC football team. (By the way, why does USC name its football team after the losers?)

Some say the condoms, to which we will return shortly. But surely the most significant Trojan of all is the Trojan horse, the Trojan term that has even made its way into the English language itself. (It can be found immediately between “zither” and “stymie” in my Random House.)

So let us think about Trojan condoms through the deconstructive lens of our equine friend. Here, in brief, is the story of the Trojan horse. Troy withstood the Greeks’ siege for years, managing to keep the invaders outside its portals. But in a moment of weakness, seduced by the Greeks’ deception, Troy opened its gates and let in a large horse. From this horse, in the middle of the night, lots of little men flooded out and destroyed the city.

A fine name for a condom.

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The Trojan Doctrine: Trademarks and the Law of the Horse

Trademark law desperately needs the Trojan Doctrine. Rather than defining the doctrine, I begin with an illustration. Magellan’s Travel (former slogan: “Safe Travel Begins at Magellan’s”) specializes in books and equipment for travelers. Magellan was a famous explorer, so on the surface the trademark makes perfect sense. Many people, when asked who Magellan was, will say that he was the first person to circumnavigate the globe.

In fact, Magellan never circumnavigated the globe, but was killed half-way across, in the Philippines. The whole voyage also managed to do in 250 out of 270 members of Magellan’s crew, apparently also the likely fate of those who shop at Magellan Travel, especially if they are carrying Amelia Earhart Luggage.

The Trojan Doctrine, I suggest, should invalidate trademarks if consumers—had they only thought hard about the phrase—wouldn’t dream of buying a product with such an inapt name. One might think of this as a sort of doctrine of “tertiary meaning.” I don’t know what precisely is harmful about such trademarks, but surely there must be something.

Consider Rembrandt Toothpaste, which supposedly whitens teeth. Sparkling teeth are good, and Rembrandt van Rijn is good. And yet Rembrandt’s paintings are mostly done in deep, dark colors. The subjects almost never show their teeth, for reasons familiar to those who know Renaissance hygiene. Are the Rembrandt Toothpaste people sending us a hidden message about the efficacy of their product? Are they trying to spread artistic illiteracy? There ought to be a law.

Other examples [including Trojan] abound.

I foolishly bought a Random House Unabridged Dictionary before thinking the matter through more deeply. On reflection, I realize that randomness is the quality I least want in a dictionary—or in a house—either in the sequence of the entries or their content. I would much prefer a Well-Organized House Unabridged Dictionary. Falsely misled, I have been irreparably harmed. I was even tempted to drive a Mitsubishi Mirage or a Chevy Nova, until I recognized that I should instead get a car that is real and doesn’t explode.

But as defective trademarks go, these are nothing compared to the mark that gives the Trojan Doctrine its name. When you think of Trojan, what do you first think of? Some say the war. Some say the USC football team. (By the way, why does USC name its football team after the losers?)

Some say the condoms, to which we will return shortly. But surely the most significant Trojan of all is the Trojan horse, the Trojan term that has even made its way into the English language itself. (It can be found immediately between “zither” and “stymie” in my Random House.)

So let us think about Trojan condoms through the deconstructive lens of our equine friend. Here, in brief, is the story of the Trojan horse. Troy withstood the Greeks’ siege for years, managing to keep the invaders outside its portals. But in a moment of weakness, seduced by the Greeks’ deception, Troy opened its gates and let in a large horse. From this horse, in the middle of the night, lots of little men flooded out and destroyed the city.

A fine name for a condom.

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The Homeownership Dreams Of Zoomers And Millennials Shattered By Prices

The Homeownership Dreams Of Zoomers And Millennials Shattered By Prices

Authored by Mike Shedlock via MishTalk.com,

Home prices and rent are soaring faster than wages. This shattered home buying plans of generations Y and Z and put them in a rent squeeze as well.

Dreams Change

Things have really changed in three years according to Yardi’s latest Generational Survey on Homeownership Dreams

Three years ago Yardi found that Gen Z was enthusiastic about the prospect of owning a home, whereas Millennials were pessimistic about their homeownership outlook.

Nearly two years into the COVID-19 pandemic and its economic and societal fallout Yardi has different findings.

Key Takeaways From Latest Survey

  • Affordability concerns have noticeably risen in the past 3 years, with home prices unaffordable for 66% of renters.

  • 1 in 5 adults living with family say they can’t afford rental costs while 56% of non-owners have nothing saved for down payment.

  • Gen Z’s expectations for homeownership tempered in last 3 years with increasing concerns around credit scores & job security.

  • Millennials are still behind homeownership, with 55% of them dissatisfied with their current home – the lowest of any generation.

  • Nearly 40% of Millennials & Gen Z postponed buying a home due to the pandemic.

  • Suburbia becomes top option for Gen Z and even formerly city-minded Millennials, while Gen X’s interest in rural living grows

Zoomer Stats 

  • 38% Live With Parents

  • 33% Rent

  • 29% are Homeowners 

Optimism Shattered

In the previous survey 83% of Zoomers expressed a desire and planned to buy a home within five years of 2018.

Only 29% of adult Zoomer respondents are now homeowners. 

Millennials the Most Disgruntled Generation

  • Millennials remain the most disgruntled generation, with respondents from this generation reporting the lowest levels of satisfaction with their homes (55%), as well as the highest levels of outright dissatisfaction (17%).

  • For Gen Xers, the home’s state of repairs is the most significant worry with one in five dissatisfied with it, while more than one in five Millennials and Gen Xers are unhappy with the size of their home.

  • 26% of all respondents who were unhappy named the home being too small as the main factor. This was closely followed by insufficient space for work and insufficient space for recreational activities, while one in five named overcrowding as the main factor. Only 3% of our pool of respondents said that their home was too large.

Covid Delays

Just over half (52%) reported no effects on their homeownership plans, while 41% of Millennials and 36% of Gen Z non-owners had to delay buying their own homes. Furthermore, 4% of all non-owners reported losing their homes due to COVID-19, with Millennials most affected at 5%.

Affordability

With the eldest Gen Xers now 56 years old, elder Millennials looking at 41 this year, and the forefront of Gen Z hitting 27 in 2022, homeownership rates among respondents from the three generations stand at 78%, 64% and 29%, respectively. 

So, what’s keeping 22% of Gen X, 36% of Millennials and 71% of adult Zoomers out of the housing market?

The main issue is affordability. Of all non-owners who participated in our survey, 53% view today’s housing market as just as inaccessible or even more inaccessible than in 2018, with Millennials most pessimistic. And, for those living with parents or other family members, the outlook is even more stark than it is for renters, with 59% of Millennials who live at home feeling that the prospect of homeownership is now even further removed.

Is Covid Responsible?

No, but it sure didn’t help either. 

The real issue is wages have not kept up with prices making saving a nonpayment difficult if not impossible.

My charts show the problem. 

Home prices have soared out of site. But rents are rising so fast that Zoomers and Millennials want out.

Home prices have seriously disconnected with rent. 

But compounding the problem for Zoomers and Millennials, rent and OER (Owners’ Equivalent Rent) have been rising way faster than the CPI and wages since 2013. 

Real Hourly Wages Have Risen Less Than a Penny a Year Since 1973

Earlier today I noted Real Hourly Wages Have Risen Less Than a Penny a Year Since 1973     

In real (inflation-adjusted) terms, people are making no more than they did 48 years ago (yellow line). 

Nominal wages have soared but have barely kept up with inflation, assuming of course you believe inflation is not understated. 

Every Measure of Real Interest Rates Shows the Fed is Out of Control.

My housing-adjusted CPI measure stands at 9.31%.

Try buying a house now on an additional half-penny per hour. It was actually possible factoring in a second wage earner per household until the year 1999 or so.

For details, please see Every Measure of Real Interest Rates Shows the Fed is Out of Control.

Meanwhile most Zoomers have to find a partner, live at home, or have roommates. I will see if I can get Yardi to conduct a survey on roommates.

*  *  *

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Tyler Durden
Thu, 01/06/2022 – 11:52

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Moscow Declares Kazakhstan Unrest “Foreign-Inspired Attempt” Of “Armed & Trained Groups” To Overthrow State

Moscow Declares Kazakhstan Unrest “Foreign-Inspired Attempt” Of “Armed & Trained Groups” To Overthrow State

Russia’s Foreign Ministry on Thursday issued its most definitive and biting criticisms of the unfolding crisis just its its south, in the large former Soviet republic of Kazakhstan, which it should be remembered is the size of Europe in terms of land mass.

Echoing statements this week from embattled strongman Kazakh president Kassym-Jomart Tokayev, who has labeled the raging and increasingly violent fuel price hike protests and riots as “terroristic” in nature and inspired by “outside” forces, Russia has described a “foreign-inspired attempt to use armed and trained groups of people” to overthrow the legitimate government. 

Kazakh security forces battle rioters in the streets, via TASS.

“We consider the recent events in a friendly country to be a foreign-inspired attempt to use armed and trained groups of people forcibly to undermine the security and integrity of the state“, Russian foreign ministry spokeswoman Maria Zakharova said in a statement

“She stressed that Russia is interested in reinstating the status quo in Kazakhstan, and will assist Kazakh authorities in stopping the violence,” Russian media further cited her as saying.

Earlier in the day relatively small deployments of Russian paratroopers were filmed boarding military transport aircraft. This after the regional Collective Security Treaty Organization (CSTO) alliance authorized a peace-keeping force on the ground. As we noted previously, there’s nothing so far to suggest that the Kremlin is deploying a very large force – also as it likely has its eyes still focused on the Ukraine crisis 2.0 and NATO eastward expansion.

A number of Western observers have noted the unlikelihood of Russia getting too bogged down the Kazakhstan situation. Given the expanse of the protests and unrest, any significant deployment and crackdown against the rioting would require a huge military and logistical effort

Meanwhile, dozens of deaths and hundreds of injuries – and also thousands of arrests – are being reported in the latest:

“The interior ministry said 2,000 people were arrested on Thursday, while the police spokesperson Saltanat Azirbek told state news channel Khabar-24 that “dozens of attackers were liquidated”. There were also reports of about 400 people in hospital. City officials in Almaty said 353 police officers had been injured and 12 killed, one of whom they claimed had been found beheaded.”

In particular the country’s largest city of Almaty is now scene of running gun battles in the streets between security forces and apparently armed groups.

It’s the rapidity of the unknown rioters being able to in some instances overrun police stations that’s causing some to question whether this is a more deeply organized effort than previously thought, since protests started last Saturday.

According to The Daily Mail, citing state sources, “Officials have said more than 1,000 people had been wounded so far in the unrest, with nearly 400 hospitalised and 62 in intensive care.”

In some instances, media pundits and independent geopolitical observers have increasingly openly alleged a foreign intelligence hidden-hand behind the unrest.

And another theory that’s emerged, though it remains to be seen or proven with evidence the degree to which there could be foreign elements involved in ratcheting the intensity of what started as fuel protests…

Tyler Durden
Thu, 01/06/2022 – 11:30

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QT: Not So Cute

QT: Not So Cute

By Stefan Koopman, senior market strategist at Rabobank

As the Global Daily has highlighted time and again, inflationary shocks are not only a reality check to the strategy of an inflation-targeting central bank, but also to the power of a government. The growing protests in Kazakhstan are a good example: it started over a doubling of LPG prices after the government lifted a price cap, but quickly spilled into much broader discontent. Grievances against the country’s elites have simmered for a long time and, as we have seen during the Arab Spring, exogenous shocks like a surge in global commodity prices can inflame already unstable domestic situations. A state of emergency has now been declared in central Asia’s biggest oil producer. The government officially appealed to the Russian-led CSTO for help in suppressing the uprising, as the risk of another ‘colored revolution’ rises. The timing is rather awkward for Putin. The troops who would be used for such operations are currently positioned near the Ukrainian border, as Russia tries to obtain guarantees that NATO will not expand eastwards.

Even though this clearly could have serious and widespread ramifications, global markets largely dismiss this as an idiosyncratic risk. The focus was, for admittedly understandable reasons, entirely on the FOMC minutes. Even though the relevant meeting was in mid-December, before Covid-19 cases surged over the holidays, the minutes confirmed that the FOMC does not see omicron as a game changer. Instead, the participants noted “their continuing attention to the public’s concern about the sizable increase in the cost of living that had taken place this year and the associated burden on U.S. households, particularly those who had limited scope to pay higher prices for essential goods and services”. In particular on the first anniversary of January 6, it’s difficult to resist thinking this is not entirely unrelated to what is happening in Kazakhstan… although one could question whether raising the mortgage bill in the form of higher rates really is the solution in this case!

The FOMC already doubled the pace of tapering December and signaled that it would hike earlier and more often than previously anticipated. It now also suggests that it may reduce the balance sheet earlier and faster than last time (which was two years after the first rate hike) through quantitative tightening, or QT. Even though there was some speculation that the Fed could put a quicker move to QT on the table –as inflation is higher, the labor market stronger, and the balance sheet larger than last time– it still seems to be coming as a surprise. Please see here for Philip’s commentary on yesterday’s minutes.

Suddenly seeing balance sheet reduction on the horizon therefore spooked investors. This could very well be the FOMC’s intention: talking up early the prospect of balance sheet normalization is an easy way to tighten financial conditions without actually having to rush into this. It has optional value and provides policy makers space to discover when supply constraints start to ease and to what extent this would then lead to a decline in the price (increases) of tradable goods. Treasuries extended their slump, with yields on the 10-year note reaching 1.74%, the highest since last April. Money markets are now pricing in about a 75% chance of a rate hike in March, up more than 10%-points from yesterday, even though Tuesday’s manufacturing ISM suggested that softening inflationary pressures could nudge the FOMC to not rush into its first post-pandemic rate hike. The dollar benefited from the prospect of tighter policy: as of right now, EUR/USD trades at 1.129. This morning, global equities extended yesterday’s selloff, with multiple-dependent tech shares being among the worst performers due to the increase in yields.

There was a much more limited market reaction to the bumper ADP number, earlier on Wednesday. The payroll services provider reported much stronger employment growth than expected, with 807K new jobs in December. The improvement was widespread, with leisure and hospitality the largest contributor with 246K new jobs. In recent months, ADP has been more upbeat than the BLS report although it has never been particularly useful in predicting Friday’s number. That said, the Homebase employment figures, which only have a very short track record, suggest payroll growth may even top a million. If these two data points are anything to go by, and this is a big if, there’s upside risk in tomorrow’s numbers. Finally, it’s also worth noting that the impact of omicron is likely to affect the January data rather than December.

Tyler Durden
Thu, 01/06/2022 – 11:11

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Don’t Make Every Day January 6


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Today is the one-year anniversary of the Capitol riot: On January 6, 2021, hundreds of President Donald Trump’s most militant supporters overran the police, smashed the windows of the building, and forced their way inside. They vandalized congressional offices and halted the certification of Joe Biden’s win.

It was an embarrassing spectacle, and one for which Trump bears significant responsibility. Not antifa, not Democrats, not the deep state, but Trump. For weeks, he had made false statements about the election outcome and asserted his loss was illegitimate. He fed his voters lies and promised them that the results could be overturned—perhaps by the Supreme Court, perhaps by Vice President Mike Pence. On January 6, he spoke to the crowds in Washington, D.C., and told his supporters “we will never give up, we will never concede.” He said “we will stop the steal,” and encouraged his people to march to the Capitol and “give our Republicans…the kind of pride and boldness that they need to take back our country.”

What followed was certainly bold: Among the thousands gathered, a smaller number stormed the Capitol and trashed it. The incident was so humiliating and seemingly counterproductive that many conservative media figures firmly entrenched in MAGA world privately reached out to Trump to demand that he stop it while it was happening. Indeed, members of Trump’s own family were concerned: Donald Trump Jr. texted his father’s chief of staff, Mark Meadows, and begged him to ask the president to denounce the out-of-control violence and destruction. They all knew—or at least, they presumed—that mob violence, stoked by Trump, would destroy his legacy and prevent him from ever running for president again.

That prediction has proven to be wrong. One year later, Trump still enjoys tremendous support from the Republican Party. Many Republican figures who condemned the rioting, on the other hand, have paid a steep price.

Certainly, the McConnells and Pences of the world would have preferred for Trump to go away voluntarily and quietly. He has refused to do so, and has given every indication that he will run again in 2024.

The surest option for preventing him from returning to the Oval Office was conviction during his second impeachment trial, but the 57–43 vote in the Senate (which did attract some Republican support) fell 10 votes short. A conviction for inciting the riot would have correctly located significant responsibility for the chaos where it belonged—with Trump.

Alas, this did not happen. Instead, the U.S. House of Representatives convened a select committee—the U.S. House Select Committee to Investigate the January 6th Attack on the United States Capitol—that continues to search for new answers and information, and seeks to question figures like Steve Bannon, Devin Nunes, and Katrina Pierson, and also tangential figures from outside the administration, like Alex Jones and Roger Stone. By demanding testimony and records from people who were not government figures at the time of the riot—and had the First Amendment right to organize peacefully in opposition to the election results—the committee’s work should be of increasing concern to civil libertarians. In any case, there is no mystery to solve: Trump should have been held accountable, but given the failed Senate vote to convict, there’s nothing more to be done.

As for the individuals who entered the Capitol and engaged in property destruction, they should face charges that are in line with their actual crimes. Like Trump, they should be held responsible for their actions. But on this front, many Democratic politicians (unlike the Department of Justice as it weighs sentences) have given every indication of following a post-9/11 script, treating the criminals as not mere vandals but as domestic terrorists of a sort. Senate Majority Leader Chuck Schumer (D–N.Y.), for instance, called on the Department of Homeland Security to add January 6 protesters to the no-fly list, a “civil liberties nightmare,” as Reason‘s C.J. Ciaramella explained at the time. Some January 6 detainees have been held in jail awaiting trial for months, subjected—in some cases—to solitary confinement for 23 hours each day.

Jacob Chansley, the “QAnon Shaman” whose horns and lack of a shirt drew the media’s attention and made him the riot’s de facto leader, was sentenced to 41 months in prison—after already spending 10 months in solitary confinement. Chansley had no real opportunity to prove his innocence in court. Faced with a potential 20-year sentence, he made the wise decision to plead guilty, as virtually all defendants do.

The events of January 6 were tragic and disturbing. It was beyond the pale for the sitting president to falsely contend that he won reelection and encourage his supporters in a violent fury that culminated in vandalism at the nation’s Capitol. It’s important not to understate the damage done by both the mob and by Trump himself.

But it’s also important for the government to avoid overreaction. The 9/11 terror attacks inspired the Bush administration to launch a disastrous war on terror, invade sovereign nations, kill American citizens abroad and engage in routine surveillance of Americans domestically, and violate civil liberties in a dozen other far-reaching ways. Frustratingly, mainstream media outlets have given every indication that they would provide intellectual cover to any Biden administration effort to respond to January 6 in a similarly extreme way. “Every Day Is Jan. 6 Now,” wrote the New York Times editorial board. Let’s hope not.

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Beijing Expected To Keep ‘Zero COVID’ Policy For At Least Another Year

Beijing Expected To Keep ‘Zero COVID’ Policy For At Least Another Year

With China facing the prospect of an omicron-driven wave of COVID cases that’s worse than anything the country has seen since it first unleashed SARS-CoV-2 upon the world, analysts on Wall Street are trying to suss out exactly what all this could mean for China’s economy, and by extension, the world.

It’s clear that an outbreak carries economic costs. Spending on COVID prevention measures could crowd out spending on manufacturing and infrastructure.

Taking into consideration the economic risks and political considerations, a team of analysts at Goldman Sachs expects Beijing to maintain its zero-COVID policy – or ZCP – through late 2022 at the very least. So far, China’s outbreaks have been concentrated in a small number of provinces, as the charts below reflect.

Now, Goldman’s team acknowledges that the advent of the omicron variant has already prompted its economists to lower their expectations for global growth. And it’s not only China that’s imposing more restrictions on both travel and its domestic economy. The Netherlands and South Korea are just two examples of countries that have adopted lockdowns to try and stop the spread of omicron.

As far as China’s policymakers are concerned, the Zero COVID Policy has a few major benefits, and a few major costs. The benefits are as follows: 1) domestic containment of COVID — few new cases, hospitalizations or deaths, with social order under control; 2) less squeeze on domestic healthcare resources, and 3) a favorable environment for manufacturing production and goods exports.

It also carries clear economic costs, including: 1) constant disruptions to the recovery of close-contact services sectors; 2) weakening the multiplier effect of fiscal expenditure as spending on some COVID prevention measures may crowd out some infrastructure spending, with the former usually less effective than the latter in boosting private consumption and investment, 3) relative isolation from the rest of the world due to substantially less cross-border passenger flows for economic and cultural cooperation.

Taking all this into consideration, the Goldman team expects Beijing to maintain its ZCP through at least late 2022 – so the better part of a year.

But already, China’s tourism industry is already struggling from the ZCP.

The Goldman team has sketched a rough analysis of what’s to be expected should their base case come true. They have also worked up a “downside” and a “severe downside” scenario as the bank tries to keep ahead of the worst-case scenario.

  • Baseline: The current approach is still effective in containing small occasional Omicron outbreaks in only a few cities. In this case, our ELI stays at 10 in Q1, followed by a gradual decline towards year-end.
  • Downside: Omicron cases spread to multiple provinces, the same as the wave in August 2021, with the epicenter in a densely-populated coastal province Jiangsu. In this case, we assume our ELI increases to an average of 20 in Q1, similar to its level in August 2021, before moderating to around 5 in Q4 this year.
  • Severe downside: Community transmission of Omicron cases happens in most provinces, leading to a national lockdown in Q1 (comparable to the initial Covid-19 outbreak across the country during February-March 2020). Given the high transmissibility of the Omicron variant, some social distancing measures may remain in place until the end of 2022. In this case, our ELI increases sharply to a peak of 80 in January before normalizing gradually to around 10 in late 2022.

Bottom line: Goldman expects scattered outbreaks to shave 0.9% of GDP growth off during the coming year as Beijing stands by its “Zero COVID” policy.

The worst case scenario would see 3.3% taken off the country’s growth forecast. 

Not that it matters much, but popular opinion is already growing weary of the latest lockdowns. Is there any chance that the CCP listens to its people and decides that ZCP simply isn’t sustainable?

Tyler Durden
Thu, 01/06/2022 – 10:49

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India Won’t Add Merck’s COVID-19 Pill To National Treatment Protocol, Citing Safety Concerns

India Won’t Add Merck’s COVID-19 Pill To National Treatment Protocol, Citing Safety Concerns

Authored by Katabella Roberts via The Epoch Times,

India’s top health research body announced on Wednesday that it won’t be adding Merck’s COVID-19 antiviral pill molnupiravir to its national treatment protocol, citing concerns over its safety.

The state-run Indian Council of Medical Research (ICMR) said it had become aware of “major safety concerns” that prompted the decision, despite India’s drug regulator in December approving the drug for emergency use.

It comes after France in December also canceled its order for the drug, developed by Merck and Ridgeback Biotherapeutics, following disappointing trial data suggesting its drug was markedly less effective than previously thought.

“Molnupiravir has major safety concerns including teratogenicity, mutagenicity, muscle and bone damage. If this drug is given, contraception must be done for three months as the child may have problems,” ICMR Director-General Balram Bhargava told local media on Wednesday.

Bhargava noted that the United States Food and Drug Administration (FDA) issued an emergency use authorization for Merck’s COVID-19 pill based on 1,433 patients with a 3 percent reduction in moderate disease when given in mild cases.

Members of the FDA’s Antimicrobial Drugs Advisory Committee in November voted 13 for and 10 against the emergency use authorization for molnupiravir, agreeing with the idea that the drug’s benefits outweigh its potential risks, including concerns about potential birth defects.

However, “we must remember that this drug has major safety concerns,” Bhargava said, adding that the drug causes teratogenicity, or the ability to cause defects in a developing fetus, mutagenicity, or permanent transmissible changes in the structure of genetic material of cells, cartilage damage, and can also be damaging to muscles.

Moreover, Bhargava said contraception would also have to be given to individuals who take the drug—regardless of whether they are male or female— because “the child born could be problematic with teratogenic influences.”

“The WHO has not included it, the UK has not included it as of now. As of now, the current recommendation stands that it is not part of the national taskforce treatment,” Bhargava said.

However, Bhargava said that experts will continue to discuss the potential use of the treatment in the country, where virus case numbers are currently surging.

Molnupiravir is intended for use at home by adults with mild to moderate COVID-19 who are at high risk of developing severe disease. The drug is taken orally in pill form, twice a day for five days, within five days of symptoms onset.

Both FDA staff scientists and Merck have suggested the drug should not be recommended during pregnancy. Company studies in rats showed that the drug caused birth defects when given at very high doses. FDA staffers concluded the data “suggest that molnupiravir may cause fetal harm when administered to pregnant individuals.”

Merck says that there is “no available human data on the use of molnupiravir in pregnant individuals to evaluate the risk of major birth defects, miscarriage or adverse maternal or fetal outcomes.”

Around 13 Indian companies, including Cipla, Sun Pharma, and BDR, are manufacturing molnupiravir.

Indian multinational pharmaceutical company Dr. Reddy’s Laboratories was set to roll out a generic version of the oral antiviral medication starting from next week at an extremely affordable treatment rate of 1,400 rupees ($18.84), 37 times cheaper than in the United States.

The Epoch Times has contacted Dr. Reddy’s Laboratories and Merck for comment.

Tyler Durden
Thu, 01/06/2022 – 10:34

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