Fed Refuses To Release 60 Pages Of Correspondence On Pandemic Trades Scandal

 Having cost the jobs of three top Fed officials, including the Dallas and Boston Fed presidents as well as that of Vice Chair Clarida, one would think that matters relating to (potentially extremely lucrative) insider trading by members of the Federal Reserve should be fully in the public domain. One would be wrong.

In response to a Reuters Freedom of Information Act, the Fed said that there are about 60 pages of correspondence between its ethics officials and policymakers regarding financial transactions conducted during the pandemic year 2020 which have become an extremely sore spot for the Fed, with members of Congress demanding full transparency as to who knew and did what, when. The only problem: nobody is allowed to see them, as the Fed "denied in full” to release the documents, citing exemptions under the information act that it said applied in this case. Exemptions traditionally involve matters of national security, so how exactly alleged insider trading by a bunch of millionaires threatens "US Democracy" is something we would love to understand.

The disclosure of trading by two regional reserve bank presidents during the pandemic led them to resign last fall, and prompted Fed chair Jerome Powell to overhaul Fed ethics rules and request the central bank's inspector general to investigate.

The FOIA responses to Reuters for the first time quantify how much back and forth may have occurred over policymakers’ personal trading in a year when markets first cratered, then rebounded on the basis of both massive federal fiscal stimulus and an aggressive rescue effort by the Fed.

Reuters reports that it had requested release under the information act of any 2020 communication "regarding the propriety of individual financial transactions" exchanged between the Fed's general counsel or ethics staff and members of the Board of Governors, then Dallas Fed president Robert Kaplan, or then Boston Fed president Eric Rosengren.

Fed FOIA officer and deputy board secretary Margaret McCloskey Shanks responded to Reuters that staff had identified "approximately 47 pages of information" involving Fed board members and around 13 pages involving either Kaplan or Rosengren. However release of the documents was denied.

"The responsive documents contain predecisional and deliberative information, as well as information that is subject to attorney-client privilege," she wrote. There was, she said, nothing in the documents that was "reasonably segregable" and not exempt from release under FOIA.

Gunita Singh, a staff attorney at the Reporters Committee for Freedom of the Press, said the FOIA exemption cited by the Fed is meant to "protect agency candor" so U.S. government staff and officials can discuss issues freely as decisions are being made.

The response from Shanks did not detail what current discussions or deliberations warranted withholding the information.

Demands for more disclosure from the Fed about the ethics scandal has been widespread, with public interest groups and elected officials including Elizabeth Warren calling on the central bank to release more details about policymakers' stock trading and the guidance or opinions provided to them by ethics officials.

The inspectors general’s investigation of Fed trading during the pandemic is still underway. The Fed is also still finalizing the procedures and rules for the new ethics regulations adopted because of the controversy.

The Fed has released the substance of one email sent from its ethics office to policymakers at the height of the crisis. In late October, after a New York Times report, the Fed released a March 23, 2020, email from its ethics officer which noted that Fed rules were meant to avoid even the appearance that officials used their access to market moving information for personal profit.

Policymakers were advised to "consider observing a trading blackout and avoid making unnecessary securities transactions for at least the next several months," or until Fed meetings and decisions moved back to normal from the emergency footing of that spring.

The advice was ignored by at least three Fed officials.

The ethics scandal blindsided the Fed last fall after reports in the Wall Street Journal and Bloomberg about Kaplan's active trading in stocks during the pandemic and Rosengren's investment in real estate securities.

That activity was noted in the annual financial disclosure reports that Fed policymakers are required to file. Both officials initially responded that their trades complied with Fed ethics rules, but said they planned to divest nevertheless. They eventually resigned.

https://www.zerohedge.com/markets/fed-refuses-release-60-pages-correspondence-pandemic-trades-scandal

S.Korea turns to self treatment as Omicron fuels soaring COVID-19 cases

 South Korea launched a self-treatment scheme for patients with mild coronavirus symptoms in order to free up medical resources for more serious cases, as new infections hit a fresh high on Thursday due to the fast spreading Omicron variant.

South Korea has largely been a COVID-19 mitigation success story, thanks to aggressive testing and tracing, social distancing and mask wearing.

But as the highly infectious but less deadly Omicron variant began spreading, the government this month started to shift its strategy away from testing and tracing and towards self-monitoring, diagnosis and at-home treatment.

From Thursday, authorities will only provide care to COVID-19 patients aged 60 and older or with underlying conditions, while others monitor themselves and seek medical help from designated clinics if their conditions worsen.

Medical kits including an oxygen saturation measurement device, a thermometer and a fever remedy - previously available to all patients who treat themselves at home - would now be distributed only to priority groups.

Officials have estimated around 13.5% of new cases would be classified as high risk groups.

The government had already scrapped contact tracing and mandatory self isolation reports based on global positioning system technology.

"The previous scheme is no longer realistic in light of our limited resources, and takes massive social and economic costs compared with our medical needs," health ministry spokesman Son Young-rae told a briefing on Wednesday.

"The goal of our new Omicron response system is to minimise serious cases and deaths by focusing on diagnosing and treating high risk groups, and to prevent the saturation and collapse of our medical capacity."

South Korea's daily number of new cases hit another daily record of 54,122 for Wednesday, bringing its total infections to 1,185,361 among its 52 million people, the Korea Disease Control and Prevention Agency (KDCA) said.

https://www.yahoo.com/now/korea-turns-self-treatment-omicron-031103383.html

Tax wealth to pay for Britain’s pension and healthcare spending – think tank

 Britain should levy heavier taxes on growing levels of household wealth to fund higher spending on pensions and medical treatment, the Resolution Foundation think tank said on Thursday.

An older population and more expensive healthcare will add 76 billion pounds ($103 billion) a year to public spending by 2030, taking the size of the British state to 44% of the economy from 42% now, making it almost as big as Germany’s was before the pandemic, it said.

Dan Tomlinson, a Resolution Foundation economist, said Britain had typically funded higher spending on health, pensions and education by shrinking its army and raising social security contributions, both options that are getting harder.

“We’ll need to tax income more efficiently and fairly, and find new sources of tax revenue such as from better taxing wealth,” he said.

Britain’s household wealth has grown from three times national income in the early 1980s to almost eight times now, pushed up in large part by rising house prices and the value of pension plans.

Prime Minister Boris Johnson and finance minister Rishi Sunak have had to overcome stiff opposition from within their own Conservative Party to a planned 13 billion-pound increase in social security contributions starting in April.

Tomlinson said that was “small fry” compared with future tax decisions, especially as the phasing out of petrol and diesel-powered cars would cost 8 billion pounds a year in lost fuel tax revenues by 2030, the Resolution Foundation said.

https://wtvbam.com/2022/02/09/tax-wealth-to-pay-for-britains-pension-and-healthcare-spending-think-tank/

COVID PANDEMIC TREATY: BAN SOUGHT ON WILDLIFE MARKETS

 The European Union is pushing for a global pandemic treaty aimed at preventing new pandemics that could include a ban on wildlife markets and incentives for countries to report new viruses or variants, an EU official told Reuters.

International negotiators will meet for the first time on Wednesday to prepare talks for a potential treaty, said the official, who is not authorised to speak to media and so declined to be named.

The aim is to reach a preliminary agreement by August.

However, Brussels has so far struggled to get full backing for a new treaty from the United States and other major countries, some of which want any agreement to be non-binding.

A spokesperson for Charles Michel, the president of the European Council who in November 2020 proposed a new treaty on pandemics, said he had no fresh comment on the matter.

The White House did not immediately respond to a request for comment.

According to the most widely accepted theory, the COVID-19 pandemic began with the transmission of the SARS-CoV-2 virus from an animal to humans in a wildlife market in China.

Although Beijing was initially praised by the World Health Organization (WHO) for notifying it quickly of the new virus, the United States in particular has accused China of holding back information about the likely origins of the outbreak.

Among measures the EU wants to be included in the treaty is a gradual shutdown of wildlife markets, the EU official said.

Incentives for countries to report new viruses are also seen as crucial to help with speedy detection and avoid cover-ups.

Last year, southern African nations were hit with punishing flight restrictions after they identified the Omicron coronavirus variant, which some fear could deter reporting of future outbreaks if incentives are not attractive enough.

VACCINES FOR VIRUS ALERTS

The official said incentives could include guaranteed access to medicines and vaccines developed against new viruses, which poorer nations have struggled to obtain quickly during the COVID-19 pandemic as wealthier states rushed to secure supplies.

States that detect and report a new virus could also receive immediate support, which might involve shipments of medical equipment from a global stockpile.

Talks will involve delegates from six countries, representing the world’s main regions – Japan, the Netherlands, Brazil, South Africa, Egypt and Thailand, officials said.

Brazil, which will represent northern and southern American countries, favours a non-binding treaty.

The EU, which will be represented by the Netherlands, wants to introduce legally-binding obligations to prevent and report new virus outbreaks, an EU document seen by Reuters says.

If an agreement is reached, the treaty is expected to be signed in May 2024.

As part of an overhaul of global health rules, countries are also negotiating tweaks to the International Health Regulations, a set of global rules to prevent the spread of infectious diseases.

The United States wants to strengthen rules to boost transparency and grant the WHO quick access to outbreak sites, two sources following the discussions told Reuters.

https://arynews.tv/pandemic-treaty-ban-wildlife-markets/

U.S. appeals court will not block order barring Biden federal employee COVID vaccine mandate

 A U.S. appeals court panel on Wednesday declined to block a lower court ruling that President Joe Biden could not require federal employees to be vaccinated against the coronavirus.

By a 2-1 vote, the 5th Circuit Court of Appeals declined to stay the lower-court injunction. Judge Stephen A. Higginson dissented noting a dozen district courts rejected requests to block the vaccine rule while a single district judge issued an injunction.

https://kfgo.com/2022/02/09/u-s-appeals-court-will-not-block-order-barring-biden-federal-employee-covid-vaccine-mandate/

Ford, Toyota halt some output as U.S., Canada warn on trucker protests

Ford and Toyota on Wednesday both said they were halting some production as anti-coronavirus mandate protesters blocked U.S-Canada border crossings that have prompted warnings from Washington and Ottawa of economic damage.

Many pandemic-weary Western countries will soon mark two years of restrictions as copycat protests spread to Australia, New Zealand and France now the highly infectious Omicron variant begins to ease in some places.

Horn-blaring protests have being causing gridlock in the capital Ottawa since late January and from Monday night, truckers shut inbound Canada traffic at the Ambassador Bridge, a supply route for Detroit’s carmakers and agricultural products.

A number of carmakers have now been affected by the disruption near Detroit, the historic heart of the U.S. automotive sector, but there were other factors too such as severe weather and a shortage of semi-conductor chips.

Toyota, the top U.S. seller, said it is not expected to produce vehicles at its Ontario sites for the rest of the week, output has been halted at a Ford engine plant and Chrysler-maker Stellantis has also been disrupted.

Another border crossing, in Alberta province, has been closed in both directions since late on Tuesday.

More than two-thirds of the C$650 billion ($511 billion) in goods traded annually between Canada and the United States is transported by road.

Starting as a “Freedom Convoy” occupying downtown Ottawa opposing a vaccinate-or-quarantine mandate for cross-border truckers mirrored by the U.S. government, protesters have also aired grievances about a carbon tax and other legislation.

“I think it’s important for everyone in Canada and the United States to understand what the impact of this blockage is – potential impact – on workers, on the supply chain, and that is where we’re most focused,” White House spokesperson Jen Psaki said on Wednesday.

“We’re also looking to track potential disruptions to U.S. agricultural exports from Michigan into Canada.”

Washington is working with authorities across the border to reroute traffic to the Blue Water Bridge, which links Port Huron in Michigan with Sarnia in Ontario, amid worries protests could turn violent, she told reporters.

Bank of Canada Governor Tiff Macklem called for a swift resolution.

“If there were to be prolonged blockages at key entry points into Canada that could start to have a measurable impact on economic activity,” he said.

“We’ve already got a strained global supply chain. We don’t need this.”

PROTESTS SPREAD

The protests were disrupting jobs too and “must end before further damage occurs,” Canada’s Emergency Preparedness Minister, Bill Blair, told reporters.

Ford suspended engine output in Windsor while its Oakville factory near Toronto is operating with a reduced schedule, as it warned the Ambassador Bridge closure “could have widespread impact on all automakers in the U.S. and Canada.”

Chrysler-maker Stellantis has also faced a shortage of parts at its assembly plant in Windsor, Ontario, where it had to end shifts early on Tuesday, but was able to resume production on Wednesday.

Protesters say they are peaceful, but some Ottawa residents have said they were attacked and harassed. In Toronto, streets were being blocked.

“We continue to know that science and public health rules and guidance is the best way to this pandemic is the way we’re going to get to the other side,” said Prime Minister Justin Trudeau.

The issue has caused a sharp split between the ruling Liberals and the opposition Conservatives, many of whom have expressed open support for the protesters in Ottawa and accuse Trudeau of using the mandates issue for political purposes.

In the United States, prosecutors in Missouri and Texas will probe crowd funding service GoFundMe over the decision to take down a page for a campaign in support of the drivers after some Republicans vowed to investigate.

Downtown Ottawa residents criticized police for their initially permissive attitude toward the blockade, but authorities began trying to take back control Sunday night with the seizure of thousands of liters of fuel and the removal of an oil tanker truck.

Police have asked for reinforcements – both officers and people with legal expertise in insurance and licensing – suggesting intentions to pursue enforcement through commercial vehicle licenses.

But as the authorities attempt to quell demonstrations in one area, they pop up elsewhere.

“Even as we have made some headway in Ottawa, we’ve seen an illegal blockade emerge in Windsor,” said Public Safety Minister Marco Mendicino.

https://nationalpost.com/pmn/news-pmn/crime-pmn/ford-toyota-halt-some-output-as-u-s-canada-warn-on-trucker-protests

CVS Health stock tumbles as investors weigh an expected decline of COVID-related sales in FY22 (CVS)

 Shares of CVS Health (CVS -5%) are taking a tumble today although the company topped analyst expectations in its Q4 report. The drug store giant tends to provide guidance updates for its current fiscal year and the following fiscal year after its Q3 earnings report, so many of the primary metrics posted in Q4 were expected. This cycle, a month after issuing FY21 guidance in early November, CVS raised its FY21 guidance while giving investors FY22 EPS predictions for the first time. Then, in early January, CVS again raised its FY21 earnings guidance while reaffirming FY22 guidance.

As a result, CVS beating the high-end of its Q4 adjusted EPS forecast by $0.03 and delivering 2.4% higher revenues than the company anticipated while also reaffirming its FY22 guidance once again is not wowing investors.

Instead, investors may be focused on other weak points from Q4, such as CVS trimming the low-end of its FY22 cash flow from operations guidance by $500 mln. Also, after topping expectations in Q4, FY22's earnings guidance of $8.10-8.30 now translates to a slightly wider yr/yr decline of (4)-(1)%, rather than the (3)-(1)% projection based on January's updated guidance, so perhaps investors wanted to see CVS raise its FY22 guidance given Q4's ultimate results. Finally, CVS expects COVID-related sales, which contributed around 30% of total sales in FY21, to decline sharply in 2022. More specifically, CVS predicts a vaccine volume decline of 70-80% yr/yr, an in-store testing volumes decline of 40-50%, and only modest volume growth for OTC testing kits.

Nonetheless, CVS's Q4 earnings should not be easily brushed to the side.

• For starters, Pharmacy Services came in strong in Q4, growing 8.2% yr/yr to $39.3 bln. Perhaps more notably, CVS expects similar Pharmacy Services sales growth in FY22, guiding to growth of +6-8% yr/yr.
• Retail and Long-Term Care sales were similarly strong in Q4, climbing 12.7% yr/yr to $27.1 bln. However, most of the sales growth can be attributed to COVID-19 vaccine administration and testing kit demand. As a result, CVS is not expecting the same level of growth in FY22, but it still guided retail sales to a respectable +8.8-10.8%.
• Lastly, as CVS outlined during Investor Day in December, expanding its current primary care services is a focal point going forward. The announcement was well-received, as Walgreens Boots Alliance (WBA) is also aggressively stepping up its foray into the primary care space. Although CVS did not dive into this venture much during its Q4 earnings call, it did state that coverage is its main focus. Currently, CVS covers slightly under half the US population with its HealthHub and MinuteClinics locations.

Overall, despite the solid numbers put up by CVS in Q4, investors appear to be focusing more on the anticipated deceleration in COVID-related sales in FY22. However, we do not think Q4's outperformance should be so quickly overlooked. CVS has mightily outpaced rivals WBA and Rite Aid (RAD) over the past five years. Accordingly, CVS shares jumped over 50% in that span (including dividends) while WBA fell around 30% (including dividend payments) and RAD dropped by over 90%. Therefore, even though CVS's forward P/E ratio of 13x trades at a slight premium to WBA at 10x, we remain bullish on CVS for long-term investors, especially as it expands its primary care network.

https://www.briefing.com/story-stocks