CEOs and Scientific Founders: Tips for a Long and Successful Marriage

It seemed like the perfect match: A scientist founder from a top-tier academic institution; A technological innovation based on years and millions of dollars of federally-funded research in a university lab; And a successful entrepreneur and industry veteran named as the CEO of the startup that would take the work forward.

But soon after the scientist and CEO began working together, problems began. Feelings were hurt over who should serve as the public face of the company when talking to the press and potential funders. Bitter disputes emerged over each change to the product being developed. Worst of all, mismatched expectations about how to split the equity in the startup ended in shouting matches, from which neither party was willing to back down. Within months and well before raising any venture funding, the company had fallen apart in acrimony.

Unfortunately, I have seen this story unfold far too often. Of the 25+ startups that get launched each year based on cutting-edge scientific inventions emerging from Columbia University’s research labs, most launch successfully and go on to raise venture financing. But a disappointing number fail quickly due to these fundamentally avoidable misunderstandings and misalignments.

In 2016 alone, over 1,000 startups were founded over innovations emerging from U.S. research institutions and medical centers, according to the Association of University Technology Managers. Historically, academic startups have led to some of today’s most successful and well-known companies and products: Google, Akamai, Genentech, Duolingo, and more. In many cases, matching scientific founders with venture-backable CEOs is one of the most critically important steps to getting promising science-based startups out of the lab and into the market. Scientific founders often have the insight, tech chops, and passion to launch the company. But without a founding team that has successful business and startup experience, the company is often not fundable (and hence never gets to market) or fails in avoidable ways in the early years.

Unfortunately, CEO/founder matches too often fail over miscommunication, misunderstandings about norms, misaligned interests, bruised egos, or other avoidable issues. If these issues could be systematically addressed up front, many more of these matches could lead to great CEO/founder harmony. Here are seven of the most common sticking points and some expert advice for how to avoid them:

1. Look before you leap: Scientific founders and CEOs may feel pressure to rush into a formal relationship before they have spent enough time and effort to determine whether there is truly a good match. Given all the ups and downs that startups go through, founding teams need to both like and respect their partners. According to Marc Singer, Managing Director at Osage University Partners:

“Initial impressions can be misleading. If you are a founding principal investigator, you need to evaluate potential CEOs not only in terms of ‘hard’ skills (quality of thinking, product orientation, experience) but also ‘soft skills’ (communication style, how collaborative they are, fit with the founding scientists). Don’t rush it; this takes time. Work with them as an advisor first, with no pre-commitments. After three months, decide if this is a worthwhile partnership.”

Sal Stolfo, Professor of Computer Science at Columbia and serial cybersecurity entrepreneur (Red Balloon; Allure), agrees:

“For my recent company, I interviewed more than 16 CEO candidates until finding the one who fit the opportunity best. The key characteristics were clear reputation for integrity, breadth of relationships in the venture community as well as the business community, and a strong network of professionals in sales and marketing. But even more critically, the CEO candidate needs to be well steeped in the specific target market, not just business in general. Startups don’t have time for the CEO to ‘learn on the job.’”

In addition, Stan Reiss, a general partner of Matrix Partners, comments:

“Unfortunately, I have seen way too many technical university startups preyed on by low quality ‘leeches’ who are really good at negotiating their equity package, but aren’t and will never be stellar performers. Invest the time to get to know them, do thorough reference checks, and ask, ‘If this was a technical co-founder, would they be good enough?’”

2. Splitting the pie: Scientific founders often feel strongly that the company is being built on their insights and years of work in the lab. CEOs, meanwhile, believe the company’s future depends largely on their efforts, like raising venture funding. Issues often arise around starting equity percentages, how these should change over time, based upon what milestones, and whether equity can be revoked. Osage University Partners analyzed thousands of university startup cap tables from 2009 to 2018, and provide the following guidance for an “average” startup:

Unfortunately, these ratios will often vary based on who leads the fundraising, how much time each founder is investing, and how far the product is from commercial launch. Local startup-centric attorneys and university tech transfer offices may be able to provide guidance based on their own experiences. According to Carlo Rizzuto, a partner at Versant Ventures:

“I advise academic founders to recognize that it will take many highly-skilled people and much capital to translate an academic discovery into a successful product. It is far better to own a small piece of a large (valuable) pie than a large piece of a small pie.”

3. Focus: In most university startups, senior faculty members rarely leave their university positions, instead becoming part-time (<20 percent) scientific advisors on the scientific advisory board. It is also not uncommon for successful serial entrepreneurs to work with multiple early-stage startups concurrently as they gain momentum. Accordingly, CEOs can sometimes get frustrated by slow progress by the scientists, and scientists can become frustrated finding their CEO’s attention divided. Gordana Vunjak-Novakovic, a serial VC-backed scientist and entrepreneur (Tara Biosystems; Epibone; East River Bio; Immplacate) and Professor of Biomedical Engineering at Columbia, says:

“In each of my four startups, one or more graduate student and postdoc inventors have taken leadership positions in the company (CEO, CSO). I really like this model—invention and patent application, followed by a high-impact paper, and intellectual ownership of technology by trainees that they continue to develop by transitioning into the company. I am also very happy being available as a scientific advisor whenever needed, while leaving freedom to the CEO to build the business.”

On the investor side, Jim Demetriades, founder and managing partner of Kairos Ventures, says:

“We love scientific founders to remain actively involved as the invention evolves from the scientific bench to a full commercial offering. However, scientific founders need to appreciate that their startup’s success critically depends on having an experienced CEO who allocates 100 percent of their time and efforts to achieving such success. While keen technical insight and passion about the technology are excellent attributes, it is rare (but not impossible) for a newly-minted PhD student to make up for the company’s lack of business acumen and years of startup experience.”

4. Letting go: As mentioned above, scientific founders have a clear sense of the best roadmap to develop their products, but also want to be free to pursue their own unrelated academic interests. They also may want to put their time into basic research that may end up in prominent publications (one of the core functions of the modern research university), rather than using those hours to further develop their existing innovations. Meanwhile, the new CEO will likely be getting direct feedback from potential customers, industry partners, and venture investors about critical product features that must be developed. Tensions can arise in either direction: CEOs can become frustrated when the scientists won’t adjust their university research to meet the company needs (and they shouldn’t); and scientists can be offended when the CEO insists on pivoting away from the scientist’s original vision. According to Kathy Ku, the former longtime director of Stanford University’s Office of Technology Licensing:

“Faculty should focus on pushing the boundaries of knowledge, authoring important publications, and teaching the next generation. That means CEOs shouldn’t expect them to divert their research, but also means that faculty need to allow their CEOs (whether a former postdoc or external entrepreneur) to set the direction of the company’s commercial efforts.”

5. Launch velocity: One founder may prefer to raise small amounts of capital from friends, family, or angel investors (or even rely on non-dilutive funding like SBIR grants) to avoid having their shares diluted or ceding ownership. Another founder may want to raise as much money from venture capitalists as quickly as possible, or even partner with industry to benefit from their experience with manufacturing, marketing, and sales. While there is no one right answer, according to Jon Soderstrom, Managing Director of the Office of Cooperative Research at Yale University:

“Wise founders recognize the difference between smart (e.g., professional venture capital) money that brings credibility, contacts and value to a new venture and ‘friends and family’ money that may not dilute the scientific founders as much but does not help create value in the venture beyond the dollars themselves.  Founders have to choose between controlling a large stake in a venture that may not be able to later raise additional capital for growth or a smaller slice of a venture that has the possibility growing dramatically if the technology is successful.”

6. Public face: Different people may have varying comfort levels and expectations around who will become the spokesperson for the company, in terms of press interviews, meetings with potential backers, and discussions with local government officials. These issues can lead to difficult conversations among the founding team, given the need for frank feedback about sensitive topics (charm, relatability) and interest in sharing the publicity. The same debate can occur around titles, which, especially in the early years, can be amorphous.

7. Changing of the Guard: While it can be uncomfortable, it is also worth being explicit upfront that even the new CEO may not stay at the reins forever. Steve Blank, senior fellow at Columbia, and creator of the Lean Launchpad entrepreneurship methodology, makes the point that:

“At each phase of the company you need to grow the team’s skill set.  If you want to build a traditional startup powered by venture capital, the team would initially start with the Innovator – the person with the insight/invention. For science-based startups, this is typically a professor in a research lab. Think Steve Wozniak at Apple, Paul Allen at Microsoft. The entrepreneur is the person who can create the reality distortion field around the product and company. Think Steve Jobs at Apple, Bill Gates at Microsoft. The entrepreneur’s job is to raise money on just a demo and/or sparse data set, convince others to quit their good jobs to join a small team with nothing more than an idea, convince early customers to pay for and love an early, buggy, unfinished product, and most importantly hit the growth milestones that investors want. Ultimately, though, the entrepreneur is usually replaced by the executor, the person charged with scaling the company.

Each of the transitions implies a change in company culture, process, and trajectory. Each requires a different skill set. Bottom line: there is usually no single ‘right’ person to lead the company; the answer depends on the company’s needs at that moment.”

Launching a successful startup is incredibly difficult, requiring singular focus, years of hard work, and comfort with all of the challenges these scrappy companies need to overcome. Doing so without the right combination of technical and business founders lowers the odds of success, and also makes the journey even harder than necessary. We hope that by following the guidelines above, more startup teams will find themselves with the best chance of a great outcome and a team of which they can be proud!

https://xconomy.com/new-york/2018/11/13/ceos-and-scientific-founders-tips-for-a-long-and-successful-marriage/?single_page=true

Stem cell pain-relieving shots linked to bacterial infection outbreak

Health officials are reporting an outbreak of bacterial infections in patients who got injections of stems cells derived from umbilical cord blood.

At least 12 patients in three states—Florida, Texas and Arizona—became infected after getting injections for problems like joint and back pain.

All were hospitalized, three of them for a month or longer. None died.

Investigators don’t think the contamination occurred at the clinics where the shots were given, because they found bacteria in unopened vials.

The government last month sent a warning letter to Genetech Inc., the company that processed the stem cells.

Stem cells are very young cells than can develop into specialized cells. Some doctors use them to try to repair damaged or diseases tissue.

https://www.modernhealthcare.com/article/20181221/NEWS/181229983

Gene therapy could be cost effective in spinal muscular atrophy, but not at $4M

• One-time treatment with an experimental gene therapy for spinal muscular atrophy could be more cost effective than Biogen’s marketed drug Spinraza, even at a price of $2 million per treatment, according to preliminary evidence compiled by the Institute for Clinical and Economic Review and released Thursday.
• Yet both Spinraza and the gene therapy, called Zolgensma and now owned by Novartis, would exceed the commonly used cost effectiveness thresholds used by ICER, an influential U.S.-based watchdog group.
• Novartis hasn’t yet set a price for Zolgensma, which is currently under review by the Food and Drug Administration. The Swiss pharma, though, has argued the gene therapy would offer good clinical value at a price of $4 million to $5 million, given its potential to dramatically alter the course of the often fatal genetic neuromuscular disease.

ICER’s calculations, while preliminary, illustrate the tension between gene therapy’s clinical promise and its expected cost.

People born with spinal muscular atrophy (SMA) lack a crucial protein, causing progressive muscle weakness that makes sitting, swallowing and even breathing difficult. Past natural history studies have shown many patients with the severe, Type 1 form of the disease die before age two.

Zolgensma (onasemnogene abeparvovec), which Novartis acquired in its $8.7 billion buy-out of AveXis earlier this year, offers a substantial net health benefit in babies with SMA, ICER concluded in its draft report.

All 15 infants treated with Zolgensma in a study known as START were alive and off permanent ventilation at two years — milestones usually unattainable with best supportive care. Interim data on 12 patients, aged one month to eight months at the start of the trial, showed treatment with Zolgensma helped almost all sit for more than 30 seconds, eat by mouth and, in four, stand with assistance.

Zolgensma works by replacing the defective or missing primary SMN gene in SMA patients with a functional one, leading to normal production of the needed SMN protein. Novartis intends for it to be a one-time treatment, essentially positioning the therapy as a cure.

The FDA is expected to approve Zolgensma next spring, likely by May. If the regulator gives Novartis a green light, the treatment’s cost will become a flash point in how such therapies should be priced.

ICER’s findings offer some support for a high price tag. Treatment with Zolgensma yielded 11.33 incremental quality-adjusted life years (QALY) gained over best supportive care, below but in roughly the same ballpark as Novartis’ own estimate of 13.3 QALYs.

At an assumed cost of $2 million, the group calculated Zolgensma would cost $247,000 per QALY — above the common threshold of $150,000 per QALY.

That ratio, however, was well below the $728,000 per QALY gained for Biogen’s Spinraza (nusinersen) in presymptomatic SMA patients, the population in which that drug is typically used. Spinraza costs $750,000 for the first year of treatment, and then $375,000 per year thereafter.

At higher QALY ratios, which Novartis argues are best used for ultra-rare conditions like SMA, Zolgensma would be cost-effective at a price above $2 million.

“We are encouraged that the Institute for Clinical and Economic Review (ICER) draft evidence report affirms our initial assessments of the value of our investigational product [Zolgensma] for the treatment of spinal muscular atrophy (SMA) Type 1 at $2 million, and up to $4–$5 million at the appropriate ultra-rare disease threshold,” wrote Novartis in an emailed statement.

Longer-term questions

There are notable limitations to ICER’s findings that could alter how cost-effective the therapies are in real-world use.

“In particular, for both interventions, the narrow eligibility criteria of trials and the limited sample size (especially for Zolgensma) raises concerns about generalizability of results to the wider population of patients with SMA,” ICER wrote in its draft evidence report.

How long Zolgensma’s benefit lasts is another key unknown. Gene therapy is intended as a one-time treatment, but without long-term data, it’s not clear whether efficacy will wane.

ICER did present an analysis in which use of Zolgensma could offset the costs of Spinraza, but advised against its use as Spinraza is new and not considered cost-effective by the group.

That didn’t stop Leerink analyst Geoffrey Porges from suggesting ICER’s numbers, if confirmed in a final report due in March, could prove helpful for Novartis.

“While ICER undercut both of Novartis’ estimates, the high cost/QALY of Spinraza in Type I SMA patients offers Novartis bargaining power with payers if the company can argue Spinraza use could be reduced or eliminated to offset total costs,” noted Leerink analyst Geoffrey Porges in a Dec. 21 report.

Novartis has made a major bet on complex but costly therapies like Zolgensma and its cancer cell therapy Kymriah (tisagenlecleucel). Such treatments hold out the promise of real benefit over current options, but the prices — cost-effective or not — could force a broader re-evaluation of how medicines are paid for.

https://www.biopharmadive.com/news/gene-therapy-could-be-cost-effective-in-sma-but-not-at-4m/544969/

Valsartan Recall Expanded, FDA Probing Products From Outside China

More valsartan products are under recall, according to an announcement from the FDA.

Added to the list of products under recall are valsartan-containing products manufactured by Hetero Labs Limited in India, labeled as Camber Pharmaceuticals in the U.S. However, not all Camber valsartan products distributed in the U.S. are being recalled, the agency noted in an updated statement.

The trouble stems from the discovery of N-Nitrosodimethylamine (NDMA) impurities in the recalled Camber products. Hetero Labs makes the active pharmaceutical ingredient for these valsartan products using a process akin to that of Zhejiang Huahai Pharmaceuticals, the Chinese supplier to affected companies in the first round of valsartan recalls announced in mid-July.

NDMA is a probable human carcinogen, according to lab tests.

Hetero Labs tests show that their valsartan has too much NDMA, albeit at levels that are generally lower than what was discovered in the active pharmaceutical ingredient manufactured by Zhejiang.

FDA is testing valsartan products for NDMA and working with other manufacturers of valsartan active pharmaceutical ingredient to see if they might be at risk of NDMA formation in their manufacturing processes. Additionally, the agency is investigating whether other angiotensin II receptor blockers are also at risk of NDMA contamination.

Warnings of NDMA impurities in valsartan first emerged in Europe and the U.K. in early July.

https://www.medpagetoday.com/cardiology/hypertension/77082

Regular Exercise Boosts Executive Function in Adults at Risk for Dementia

Target Audience and Goal Statement:

Internists, family medicine specialists, neurologists, and cardiologists

The goal of the study was to determine whether older adults with mild cognitive impairment but no dementia and cardiovascular risk factors can improve executive functioning, memory, and verbal fluency by adding moderate, regular aerobic exercise, and/or the the Dietary Approaches to Stop Hypertension (DASH) diet.

Questions Addressed:

What are the independent and additive effects of aerobic exercise (AE) and the DASH diet on executive functioning (primary endpoint), and on measures of language/verbal fluency and memory (secondary endpoint) in adults at risk for cardiovascular disease and who have mild cognitive impairment?

Study Synopsis and Perspective:

In a randomized clinical trial of exercise and diet in 160 sedentary adults with mild cognitive impairment but no dementia (CIND) and cardiovascular risk factors, regular aerobic exercise three times a week for 6 months resulted in significant improvements in executive function, but not in memory or language/verbal fluency domains, James Blumenthal, PhD, of Duke University Medical Center in Durham, N.C., and colleagues for the ENLIGHTEN trial reported.

The researchers employed a 2-by-2 factorial design (exercise/no exercise and DASH/no DASH) to compare the independent effects of exercise and diet on a range of cognitive abilities. At baseline, participants had subjective memory complaints, objective evidence of cognitive impairment, and at least one additional cardiovascular disease risk factor besides being sedentary. They had a mean age of 65.4, and 66% were female.

The team randomly assigned 160 inactive men and women to 6 months of either exercise alone (n=41), DASH diet alone (n=41), combined exercise and DASH diet (n=40), or a no-exercise, no-diet control group that received weekly phone calls about health-related topics (n=38). Effect sizes were measured with the Cohen’s d to indicate the difference between means.

Participants in the exercise group worked out under supervision three times a week for 35 minutes at 70% to 85% of their initial peak heart rate reserve for 3 months, then continued exercising at that rate at home, documenting activity in weekly exercise logs. DASH diet group members received education about the DASH diet and frequent feedback about adherence from a nutritionist.

At the end of 6 months, individuals who engaged regularly in aerobic exercise (beta coefficient 4.2, 95% CI 0.2-8.2, d=0.32, P=0.046), not those only in the DASH group (beta coefficient 3.7, 95% CI −0.2 to 7.7, d=0.30, P=0.059), demonstrated significant improvements in the executive function domain. There were no significant improvements in the memory or language/verbal fluency domains, however.

The largest improvements in executive functioning occurred for participants in the combined exercise and DASH diet group (d=0.40, P=0.012) compared with controls. To illustrate the potential clinical significance of this, the authors estimated that participants had average scores for select subtests of executive function consistent with 93-year-old people at baseline — 28 years older than their chronological age. After 6 months, people who exercised and followed the DASH diet had average executive function scores corresponding to 84-year-olds, a 9-year improvement. In contrast, executive function scores for control group participants worsened by a half year (which actually was the duration of the study).

Follow up examination of specific CVD risk factors showed that participants on the DASH diet had reductions in total cholesterol, reduced weight and LDL lipoprotein, and a reduction in the number of hypertensive medications taken. There were no significant differences in systolic blood pressure. Individuals in the exercise and exercise + DASH diet showed greater improvements in insulin compared with those who did not exercise.

Regarding neurocognitive function, while researchers saw no significant changes in executive function for those on the DASH diet, those in the aerobic arm of the trial saw significant improvement in executive function. Reduced sodium intake was also associated with improved executive function, changes in potassium, magnesium, and calcium were not related to executive function.

“Individuals with CIND — cognitive impairment, no dementia — are at risk for developing dementia over time,” Blumenthal said. “Currently there are no known treatments to prevent the progression of this disorder, so findings from this study are very important by suggesting that regular exercise can improve cognitive function and potentially delay the onset of dementia in these individuals.”

Although study researchers conducted APOe4 genotyping, they did not comment on genotype status and outcomes for individuals, although they did control for APOE genotype as well as education and CVD medication burden, and long-term use of anti-inflammatory medications. Participants were evenly divided between whites and minorities.

Source Reference: Neurology Dec. 19, 2018; DOI:10.1212/WNL.0000000000006784

Study Highlights: Explanation of Findings

In the ENLIGHTEN trial, 6 months of regular aerobic exercise led to improved executive functioning in adults at risk for cognitive decline, researchers reported. And while the DASH diet boosted the executive functioning benefits of exercise, it did not show any cognitive function benefit by itself, the study authors wrote in Neurology.

Blumenthal and colleagues observed that this trial may be the first randomized study to investigate the independent and combined effects of a diet and aerobic exercise on neurocognitive function in older adults at elevated risk for progressive decline in cognitive functioning. Results of previous meta-analyses of randomized trials have been inconsistent, they noted.

“An interesting finding is that the DASH diet alone did not provide any benefit for cognitive function, even though the DASH diet did improve cardiovascular health,” observed Teresa Liu-Ambrose, PhD, PT, of the University of British Columbia in Vancouver, who was not involved with the study. “However, it should be noted that aerobic exercise not only improves cardiovascular health, but also induces the release of growth factors that are beneficial for neuronal health.”

While participants who engaged in both aerobic exercise and DASH demonstrated the most improvement in executive functions, the difference in the magnitude of benefit — of exercise alone vs exercise plus DASH — was 25%, Liu-Ambrose told MedPage Today. “As adoption and adherence to health habits is often a challenge for individuals, one may consider adopting one habit first, i.e., exercise, and then slowly incorporating the second habit, i.e., diet,” she said. In the combined exercise and DASH group, greater aerobic fitness, reduced cardiovascular disease (CVD) risk, and reduced sodium intake were associated with executive function improvements.

Researchers pointed out that “because there is considerable overlap in risk factors for CVD and dementia, strategies designed to reduce CVD risk may also be effective in improving neurocognition and reducing the risk of developing dementia.”

“These findings raise the possibility that adopting a healthy lifestyle of diet and exercise can not only reduce the risk of heart disease, but also reduce the risk of developing dementia later in life,” he added. “Future studies, with larger samples followed over more extended time periods are needed, along with studies that examine the mechanisms by which these lifestyle modifications improve cognitive functioning,” he told MedPage Today.

The ENLIGHTEN trial may have been underpowered to detect differences between aerobic exercise and DASH diet alone, Blumenthal and co-authors noted; because of this potential limitation, they provided limited evidence of the relative benefits of these two interventions. The study also was only 6 months long and longer-term effects of exercise and diet on cognitive outcomes are unknown. No one dropped out of the study and trial results may not apply to less motivated groups, they added.

Judy George wrote the original story for MedPage Today

• Reviewed by Robert Jasmer, MD Associate Clinical Professor of Medicine, University of California, San Francisco and Dorothy Caputo, MA, BSN, RN, Nurse Planner

LAST UPDATED 12.21.2018

• Primary Source

  Neurology

  Source Reference: Blumenthal J, et al “Lifestyle and neurocognition in older adults with cognitive impairments: a randomized trial” Neurology 2019; DOI:10.1212/WNL.0000000000006784.

https://www.medpagetoday.com/neurology/dementia/77091

Blood test co Sight Diagnostics raises $28m

Clal Biotechnology Industries Ltd. (TASE: CBI) today announced that Sight Diagnostics, a portfolio company of Anatomy, Clal Biotechnology’s investment fund for medical devices, had raised $28 million. When the round is completed, Anatomy’s stake in Sight Diagnostics will be 7%. Clal Biotechnology holds 50% of Anatomy.

Clal Biotechnology’s share price fell 8% today, despite the announcement, pushing its market cap down to NIS 425 million. Today’s drop is probably a result of falls in the US biotech market, also reflected in the share prices of public companies in which Clal Biotechnology has holdings: Gamida Cell Ltd. (Nasdaq: GMDA), MediWound Ltd, (Nasdaq: MDWD), and Neon Therapeutics (NasdaNTGN).

https://www.marketscreener.com/CLAL-BIOTECHNOLOGY-INDUST-10620293/news/Blood-test-co-Sight-Diagnostics-raises-28m-27793599/

Not Just Trump: A Wall Street Chorus Is Calling For Powell’s Scalp

Pity Jerome Powell.

The Fed Chairman, who as a reminder has been at his job for less than a year, inherited a legacy of poor choices and even worse consequences. As One River Asset Management correctly wrote in its weekly note, Powell’s predecessors left him with mission impossible: the Fed chair faces a dire dilemma of on one hand either continuing the failed policies of the past decade that have resulted in the “everything bubble”…

… or biting the bullet and at least trying to stick with the painful “renormalization” pathway of rising rates, and shrinking balance sheet that has already resulted in the biggest market crash since the financial crisis, and has reportedly promptly calls by president Trump for Powell’s head.

Only it’s not just Trump: so habituated is the market to the constant presence of the Fed’s training wheels that one week after the op-ed by prominent “hawks” Stanley Druckenmiller and Kevin Warsh urging the Fed to halt its tightening cycle, a chorus of cautions has emerged on Wall Street, warning that the Fed has done a “policy error”, while calls that the Fed may have gone too far in raising borrowing costs are gathering momentum, with some going so far as accusing Powell of being at “peak error” right now.

Courtesy of Bloomberg, here’s a collection of those of who have been sounding the alarm on Fed policy beyond Trump:

Priya Misra, head of global rates strategy at TD Securities LLC in New York

“I think it’s a notion of a Fed policy mistake. The Fed is signaling continued hikes, which is a mistake. The market was already worried about that. Unfortunately the Fed didn’t alleviate many of those fears.”

Scott Minerd, chief investment officer at Guggenheim Partners

“As the curve keeps flattening on us, it’s telling us that monetary policy is being too restrictive and that we don’t have enough reserves in the system to stimulate the economy.”

Donald Selkin, chief market strategist at Newbridge Securities, in an interview earlier this week

“The issue is whether the Fed is providing tough love to the market. He’s saying everything is great, the economy is doing great, but the market, which is forward looking, is dropping. Something’s not right. The Fed has made many policy mistakes in the past. I guess when the fourth quarter earnings come out, whether there’s lower guidance, that’s what everyone will look for.”

David Bianco, chief investment officer at Deutsche Asset Management, in a note to clients

“The Fed must make the right decision for the economy, not its credibility or autonomy. The ability to raise interest rates is an awesome power and no hike should be made without careful consideration of the risks to growth, wealth and the jobs at stake. This new Fed Chair and committee must stop treating higher rates as no big deal and more clearly answer these questions to regain market confidence: What are the benefits of further hikes? What are the risks? Which inflation indicator gives you the most concern?”

Gene Tannuzzo, deputy global head of fixed income for Columbia Threadneedle Investments

“I think they’ve done bit of a disservice by trying to minimize the impact of the balance sheet that’s going on in the background.”

Jim Bianco, president of Bianco Research LLC in Chicago

“The Fed sees the market is solidly screaming at them ’wrong policy’ and they are trying to understand that. Not Trump. And if they do not get the messaging to the markets right, stock go down further and Wall Street will turn on Powell.

Michael Churchill, research analyst at Churchill Research

The Fed is “probably at peak error right now,” he wrote in a note. “The Fed’s intellectual and policy posture is so bad now that it can probably only get better. The Fed’s errors are easy to demonstrate, which makes it likely they will be rectified sooner rather than later.”

Of course, the simple truth is that it’s not Powell who is at peak error: Powell is merely on the receiving end of a late-cycle expansion which after initially levitating thanks to trillions in easy monetary policy, was artificially boosted for the past two years with the tailwind of Trump’s fiscal stimulus which however is not only fading now, but leaving the economy facing the pernicious consequences of accelerating (and delayed) wage growth and a labor market in which there are simply not enough vacant positions, while stocks are pricing in the tighter financial conditions that accompany central banks soaking up liquidity.

The result is that Powell is now blamed for the sins of his predecessors, and that his forced departure would only make matters worse sending stocks crashing even more, ultimately culminating with Trump becoming the fall guy for years and decades of disastrous monetary policy which started with Alan Greenspan’s bubble blowing ways and extended not just with Bernanke and Yellen, but spread globally into China’s unprecedented credit expansion as well as the ultra-easy monetary policies of the ECB, BOE, SNB and so on.

Alas the party is now ending, whether with or without Powell, and the only hope Trump may have to kick the can a little but longer and have the Fed launch one final QE episode, is to crush the market, unleashing another round of ultra-easy policy. Considering the overnight events, Trump may have finally figured out that to save the market, he will first have to destroy it.

https://www.zerohedge.com/news/2018-12-23/its-not-just-trump-wall-street-chorus-calling-powells-scalp