G7 fail to reach an intervention deal to ease soaring dollar pain

 Japan and other countries facing the fallout from a rising U.S. dollar found little solace at last week’s meetings of global finance officials, with no sign of joint intervention after the The model of the “Plaza Accord” of 1985 underway was the horizon.

With a strong push from Japan, financial leaders of the group of seven advanced economies added in a statement on Wednesday that they will be closely monitoring “recent volatility” in markets.

But the warning and threat of another yen-buying intervention by Japanese Finance Minister Shunichi Suzuki failed to prevent the currency from slipping to fresh 32-year lows against the dollar as the week ended.

While Suzuki may have found allies grumbling about the fallout from the Federal Reserve’s aggressive rate-hiking path, he acknowledged that no plan for coordinated intervention was in the works.

“Recognizing the need for vigilance against the spillover effect of global monetary tightening, many countries mentioned currency movements in this context. But there was no discussion of what coordinated steps could be taken,” Suzuki said at a news conference Thursday after attending separate meetings of G7 and G20 finance leaders in Washington.

US Treasury Secretary Janet Yellen made it clear that Washington has no appetite for concerted action, saying the dollar’s overall strength was a “natural result of differing paces of monetary tightening in the United States and other countries.”

“I’ve said on many occasions that I think a market-driven value for the dollar is in America’s interest. And I continue to feel that way,” she said Tuesday when asked if she would consider a Plaza Accord 2.0 deal.

NO YEN SUPPORT

In 1985, a destabilizing rise in the dollar prompted five countries – France, Japan, the United Kingdom, the United States and then West Germany – to join forces to weaken the US currency and reduce the US trade deficit. After the deal, dubbed the Plaza Accord after the famous New York hotel where it was negotiated, the dollar lost about 25% of its value over the next 12 months.

With the US currently uninterested in such a deal, other countries must find ways to ease the pain caused by a strong dollar, which has forced some emerging markets to raise interest rates to defend their currencies, themselves more than they want at the expense of economic growth.

Emerging Asia has seen significant capital outflows this year that are comparable to previous episodes of stress, increasing the need for policymakers to build liquidity buffers and take other steps to prepare for turmoil, said Sanjaya Panth, deputy director for Asia and Asia Pacific International Monetary Fund Department.

“The situation for Asian economies is very different than it was 20 years ago,” as countries have accumulated foreign exchange reserves making them more resilient to external shocks, Panth told Reuters on the sidelines of the IMF-World Bank annual meeting in Washington on Thursday.

“At the same time, rising debt levels, particularly in some of the regions’ economies, are a cause for concern,” he said. “Some form of market stress cannot be ruled out.”

The Bank of Korea announced its second 50 basis point rate hike on Wednesday, highlighting that the won’s 6.5% fall against the dollar in September, which pushed up import costs, played a key role in the decision.

South Korea’s central bank governor Rhee Chang-yong said Saturday he felt no interest from US officials in curbing the dollar’s strength through joint interventions.

But he said some sort of international cooperation on the dollar might be needed “after a period of time.”

“I think too strong a dollar, especially over a longer period of time, will not be good for the United States either, and actually I’m thinking about the long-term impact on the trade deficit and maybe another global imbalance can happen,” he said .

In Japan, the government has a responsibility to deal with a renewed slump in the yen, driven in part by the policy divergence between the Federal Reserve’s determination to raise US interest rates and the Bank of Japan’s determination to keep borrowing costs extreme to keep low is caused.

At the press conference where Suzuki warned of a sharp fall in the yen, BOJ Governor Haruhiko Kuroda again ruled out the possibility of a rate hike.

The dollar rose about 1% on Friday to a fresh 32-year high of 148.86 yen, testing the authorities’ resolve to combat the Japanese currency’s unrelenting slide. The dollar/yen pair is now about 2% higher as Japan intervened on September 22nd to buy the yen for the first time since 1998.

Japanese politicians have said they will not seek to defend any particular yen level, instead focusing on smoothing volatility.

Masato Kanda, the country’s top currency diplomat, told reporters on Friday that the authorities stand ready to take “decisive action at any time” if the yen’s overly volatile moves continue.

However, even the moderation of abrupt yen moves could pose a challenge, as Kuroda’s pledge that the BOJ will keep interest rates in negative territory gives investors the green light to continue dumping the currency.

“It is impossible to reverse the yen’s downtrend with single-handed intervention,” said Daisaku Ueno, chief forex strategist at Mitsubishi UFJ Morgan Stanley Securities.

“Once the yen falls below 150 against the dollar, it’s hard to predict where its depreciation might stop as there is no technical chart support until around 160,” he said.

https://ustoday.news/analysis-g7-fail-to-reach-an-intervention-deal-to-ease-soaring-dollar-pain/

Goldman Plans Sweeping Reorganization, Combining Investment-Banking and Trading

 Goldman Sachs Group Inc. GS -2.31% plans to fold its biggest businesses into three divisions, undertaking one of biggest reshuffles in the Wall Street firm’s history.

Goldman will combine its flagship investment-banking and trading businesses into one unit, while merging asset and wealth management into another, people familiar with the matter said. Marcus, Goldman’s consumer-banking arm, will be part of the asset- and wealth-management unit, the people said.

A third division will house transaction banking, the bank’s portfolio of financial-technology platforms, specialty lender GreenSky, and its ventures with Apple Inc. and General Motors Co., the people said.

The reorganization could be announced within days, the people said. Goldman is scheduled to report third-quarter earnings Tuesday.

It is unclear how the makeover will shake up Goldman’s senior leadership team, though at least a few executives will have new roles, the people said.

Marc Nachmann, the firm’s co-head of trading, will slide over to help run the combined asset- and wealth-management arm, they said.

The reorganization is the latest step in Chief Executive David Solomon’s push to shift Goldman’s center of gravity toward businesses that generate steady fees in any environment. It also reflects the firm’s struggle to overcome skepticism, from investors and even among some of its own executives, over its ambitions for consumer banking.

The firm’s trading and investment-banking acumen has been Goldman’s calling card for decades, churning out massive profits when the markets favored risk-takers and bold deals. But investors often discounted those successes, reasoning that they are harder to sustain when market conditions turn. And in recent years, Goldman has sought to sharpen its trading arm’s focus on client service.

Following the changes, Goldman’s org chart will look more like its peers.

A slide presentation from Goldman’s 2020 investor day offered a glimpse of what a combined banking-and-trading business would look relative to peers. At Goldman, the merged group would have delivered a return on equity of 9.2% in 2019, besting Morgan Stanley and Bank of America Corp. but below what JPMorgan Chase & Co. and Citigroup Inc. earned that year.

Bloomberg News earlier reported that Goldman had planned to restructure its consumer-banking arm and was considering combining its asset- and wealth-management businesses.

Goldman’s shares have struggled to keep pace with its rivals, at least by one key measure. The firm traded at 0.9 times book value as of June, according to FactSet. That compared with 1.4 times at Morgan Stanley and 1.3 times at JPMorgan.

Goldman has sought to narrow the gap by beefing up the businesses that command higher valuations on Wall Street. Managing wealthy people’s money and overseeing funds for pensions and other deep-pocketed institutions is more profitable than other financial services, and it usually doesn’t put the firm’s balance sheet at risk. And many investors view traditional consumer banking—taking deposits and making loans—as more predictable.

Goldman has invested heavily in building its own consumer bank, and folding the unit into its asset- and wealth-management arm should create more opportunities to offer banking services to wealthy individuals.

Earlier this year, the bank said it aimed to bring in $10 billion in asset and wealth management fees by 2024.

https://finnoexpert.com/2022/10/17/wsj-news-exclusive-goldman-plans-sweeping-reorganization-combining-investment-banking-and-trading/

FDA Says These Cereals Are No Longer Healthy

 Health standards are no stranger to change. Eggs got caught in the middle early on in the ongoing debate about what is healthy and what isn’t healthy. As science evolves, we learn more about what health standards should be for the majority of the public, and health standards change. 

The understanding of eggs created a divide in what was considered healthy or not healthy. At one point, the egg yolk was considered to be the unhealthy portion of the egg because of cholesterol. Then science evolved and now the Mayo Clinic reports it is considered healthy as long as most people don’t consume more than seven eggs a week. 

One thing to consider is what is being cooked in addition to the eggs, like cheese, bacon and butter. The addition of these tasty ingredients changes what is considered healthy. Science is not static. It changes, and as bodies grow and develop differently, so do the nutrients and calories needed to be the healthiest possible.

Surprising Cereals No Longer Considered Healthy

The Food and Drug Administration is making changes as to what should be considered healthy. This created a surprising list of breakfast cereals that should no longer be considered healthy. The FDA is charged with the task of protecting the general public when it comes to health and safety, holding corporations accountable for making accurate claims about the ingredients and effects of products consumed by Americans.

While consumers are capable of reading labels and consuming products of their choice, it is important to know what is 'most' accurate. Cereals Gen X and Millennials and even Boomers have grown to believe are a healthy choice for breakfast are about to be shocked. 

Kellogg's  (K)  cereals Special K, Frosted Mini Wheats, and Raisin Bran are included in the list by the FDA as no longer being considered a healthy choice for breakfast. These cereals have added sugars and more sodium than the new FDA proposed health standard. Raisin Bran has 9 grams of added sugar and Frosted Mini Wheats has 12 grams of added sugars, while Special K only has 4 grams of added sugar, but also has 270 milligrams of sodium. 

General Mills'  (GIS)  cereals that made the FDA's list were Honey Nut Cheerios and Corn Flakes. These have long been considered healthy options when considering cereals for breakfast. Honey Nut Cheerios has 12 grams of added sugars and Corn Flakes only has 4 grams of added sugars but has 300 milligrams of sodium. 

Post Holding Co's  (POST)  Honey Bunches of Oats, Honey Roasted made the FDA's list because it has 8 grams of added sugars, and a PepsiCo  (PEP)  subsidiary Quaker Oats's Life cereal made the list with 8 grams of added sugars. 

To the layman, these terms may not make a lot of sense. So to break it down, the standard for sodium intake for one meal is 230 milligrams and only 2.5 added grams of sugars. The FDA is making an effort to curb the general consumer's understanding of what is healthy versus what appears to be healthy choices. 

Making the Most Out of the Important Meal of the Day 

Most cereals are rarely healthy, but some are healthier than others, and while the FDA is marking these breakfast favorites as 'not healthy' they are still healthier than other cereal choices. One of the worst breakfast cereals out there is Post Consumer Brands' Golden Crisp. It is mostly made up of sugar and corn syrup. It has 18 grams of sugar per serving. For the mathematicians that's over seven times the new FDA's healthy standard. 

A few well-balanced breakfasts, according to the Harvard Health Publishing, would be plain yogurt with fruit and nuts, oatmeal with fruit and nuts or whole wheat or rye toast with a nut butter. Starting the day with protein and minimal carbohydrates is a good breakfast choice, it said. A good rule of thumb is the less processed a food is, the better it is for you. While not true in all instances, it's still pretty consistent when you don't want to spend time reading ingredients and box labels before every meal. 

https://www.thestreet.com/investing/fda-cereal-unhealthy-kellogg-post-general-mills

'Policy Makers May Feel They Have Control, But Are Nevertheless No Longer In Control'

 By Eric Peters, CIO of One River Asset Management

 “We’ve announced we will be out by the end of this week. My message to the pension funds is you’ve got three days left,” said Bank of England governor Andrew Bailey, explaining his intention to end support for the price of Britain’s government bonds. Prices fell and investors raced to hit the central bank’s bid before it disappeared.

What made Bailey’s statement of great significance, is that for over a decade, each successive central bank and government intervention seemed to never end. And even when a program did wind down, its sequel was waiting anxiously in the wings. But here was Bailey, ending a program that had only just started on September 28th, following the catastrophic mini budget. To halt the ensuing bond crash, Bailey had pledged to buy UK government debt “on whatever scale is necessary.”

Naturally, limited intervention is the only path a prudent government should take. And had policy makers restrained themselves during these past fifteen years, we would not have hyper-financialized our economies, and would thus be unlikely to find ourselves in today’s predicament. This trap of our own creation requires central banks to tighten policy hard enough to restrain inflation, which in turn creates a level of financial instability that requires central banks to ease policy.

The UK is a rather poorly run nation, so it is unsurprising that the architecture of this circular trap should first be revealed there. But after decades of growing monetary policy homogeneity across the developed world, what we are seeing now in the UK will manifest broadly before this cycle is over.

Bailey correctly realized that he cannot credibly tighten and ease policy simultaneously. But what he does not yet appreciate is that we have entered the stage in this cycle where policy makers may feel they have control, but they are nevertheless no longer in control. 

https://www.zerohedge.com/markets/we-have-entered-stage-where-policy-makers-may-feel-they-have-control-are-nevertheless-no

Walmart Launches Healthcare Research Institute As Provider Footprint Grows

 Walmart is launching a healthcare research arm as the retailer adds more medical care services and works to address health equity and access for medically underserved populations.

The retail giant Tuesday said the Walmart Healthcare Research Institute is designed to increase community access to the latest “interventions and medications” that can make a difference for “older adults, rural residents, women and minority populations” considered underrepresented. In particular, the Institute’s early focus will be on making sure these populations will be included in studies on treatments for chronic conditions and other diseases.

“What we are trying to do is get individuals in the community adequately represented,” Walmart’s chief medical officer, Dr. John Wigneswaran said in an interview. “It’s really about health equity and access. We know our customers are interested in participating in healthcare research, but many have not had access until now.”

Walmart’s effort comes as the U.S. Food and Drug Administration and the Biden White House look to improve drug research and patient health outcomes by enrolling more Americans from underrepresented racial and ethnic populations into U.S. clinical trials.

Given the increasing number of Americans who are seeking care at retail health clinics and pharmacies, Walmart and rivals that include CVS Health and Walgreens say they want to play a role in improving health outcomes for the increasing number of patients they are seeing. Walmart rival Walgreens earlier this year launched a clinical trial business, hoping to increase racial and ethnic diversity for patients in drug research.

The FDA has acknowledged that racial and ethnic minorities are “frequently underrepresented in biomedical research,” the agency said earlier this year when outlining the government’s steps to improve diversity in clinical trials given an estimated one in five drugs have varied responses in ethnic groups yet most clinical trial participants are white.

In Walmart’s case, the healthcare research institute is working with study partners that include: “clinical research organizations, pharmaceutical companies and leading academic medical centers, including CTI Clinical Trial & Consulting Services, and Laina Enterprises.”

Wigneswaran said about 4,000 of Walmart’s stores are in underrepresented areas of the U.S. so the retailer will play a key role in identifying patients for research. “We’re not going to be conducting clinical trials, but we can identify patients who can benefit,” Wigneswaran said.

Bill Hawkins, chairman of the board of Duke University Health said Walmart’s efforts “in research are innovative and impactful” as well as “support individual patient health as well as the health of numerous communities home to Walmart stores.”

Walmart this year is opening six new doctor-staffed “Walmart Health” centers in Florida as the retail giant looks to expand low-cost healthcare services to tens of thousands of its customers. Walmart says it now has 32 Walmart Health centers across Arkansas, Georgia, Illinois and Texas, featuring an array of primary medical services, urgent care including X-ray services, dental and eye care, and behavioral health services as part of a new model being replicated into other markets.

Walmart has also made strides to reach medically underserved Americans who cannot afford treatments or medications. Last year, the retailer launched its own private brand insulin. And more than a decade ago grabbed headlines for rolling out hundreds of generic prescriptions for just $4.

“This is a remarkable initiative by Walmart, addressing a critically important issue by leveraging their reach, resources, and influence,” said Dr. Harlan Krumholz of the Yale New Haven Hospital Center for Outcomes Research and Evaluation. “As a trusted brand, I am hopeful that their efforts will make research more readily available to so many who have not had the opportunity to participate and also produce progress toward greater health equity.”

https://www.forbes.com/sites/brucejapsen/2022/10/11/walmart-starts-healthcare-research-institute-as-provider-footprint-grows/

Japan Considers Removing 60 Year Limit On Nuclear Plant Operations

 Nuclear continues to be on an upswing globally.

Most recently we learned that Japan is now considering extending its 60 year limit on the operation of plants and is even considering submitting legislation on the issue as soon as next year, according to U.S. News and Nikkei. 

The rules could allow "repeated extensions", should they be approved by the country's Nuclear Regulation Authority. 

Currently, regulations put in place in reaction to the Fukushima disaster say that reactors "can be operated for 40 years, followed by a 20-year extension if approved by regulators". As of now, four of the country's 33 reactors have been approved for up to 60 years. 

Japan has not been immune to the energy crisis that has made its way across the globe this year, facing headwinds in both the availability of supplies and rising prices. 

Recall, just days ago we reported that even the woke-ness goddess herself, Greta Thunberg, wasn't against shutting down nuclear plants in favor of coal. Thunberg said that it is a "bad idea" to turn off nuclear power stations if it means switching to coal, according to Politico on Tuesday. 

"It depends. If they are already running, I think it would be a mistake to shut them down and turn to coal," she said about nuclear plants. 

Nowhere is the nuclear agenda more important than in Germany, a country that had planned to close its 3 remaining nuclear plants at the end of the year before it was launched into a massive energy crisis with skyrocketing prices as a result of the Russia/Ukraine war. They have now decided to extend the life of 2 of the plants.

The additional collateral damage of planning to shut down the nuclear plants has results in Germany also reviving several dormant coal plants, the report says. Nuclear has been such a hot-button issue in the country that "the public discourse over extending the reactors, even for a few months, has been far more controversial than rebooting highly polluting coal plants," Politico says. 

Germany's Finance Minister Christian Lindner said of Thunberg's comments: "...in this energy war, everything that creates electricity capacity has to be connected to the grid. The reasons speak for themselves — economically and physically."

https://www.zerohedge.com/markets/japan-considers-removing-60-year-limit-nuclear-plant-operations

Flu predictions usually meaningless

 No one needs to be reminded of the negative impact the COVID-19 pandemic has had on our lives. But one could argue that the SARS-CoV-2 virus had one benefit: It sent influenza viruses (and some others) packing. Global influenza activity was historically low through 2020 and 2021, likely because people wore masks or stayed home. Influenza has only started picking up again this year.

So where does that leave us as we head into the 2022-2023 northern hemisphere flu season and what should we expect?

The entirely unsatisfactory answer is that no one knows. Predicting the nature of influenza seasons is a global public health challenge. While the World Health Organizations' Global Influenza Surveillance and Response System (GISRS) and its more than 150 laboratories around the world -- who incidentally are celebrating their 70th birthday this year -- track and anticipate the evolution of the virus, our ability to predict the magnitude of an upcoming influenza season is poor. The COVID-19 pandemic has made this even more challenging. For starters, one sure bet used to be that we would have an influenza season, but that has not necessarily been the case of late.

So, what do we know? Unlike last year's northern hemisphere season, we know that influenza is back. The southern hemisphere flu season, which occurs while those of us in the north enjoy summer, was a mixed bag. But in countries such as Australia and New Zealand, influenza returned with activity at or even above pre-2020 levels. While the magnitude of influenza activity in countries south of the equator doesn't necessarily foretell of similar trends north, the more widespread activity cannot be ignored.

The influenza virus' reappearance, combined with the return of international travel, ensures that northern hemisphere countries, except maybe those who still have tightly controlled borders, will have influenza viruses arrive at their doorstep. They probably already have. The CDC website showed during the week ending September 24, 2022, there was a small but steady rise in the number of influenza cases detected nationally. The early rise of case numbers in the U.S. was something experienced by some southern hemisphere countries who recorded very early influenza seasons, some weeks earlier than usual. One factor that likely contributed to this atypical seasonality is a change in population immunity to the influenza virus. Every year, somewhere between 10 to 30% of the population gets exposed to the influenza virus and, in doing so, get a bump in their immunity. We have now gone through a couple of years where, while vaccinations have continued, widespread natural infections haven't. It is again difficult to quantify this lower immunity and conclude what impact it may have, but there is enough evidence to suggest that it could lead to atypical peaks of activity and potentially a more susceptible population. A more susceptible population would equate to more influenza activity.

Perhaps the biggest variable that will dictate the upcoming influenza season is the SARS-CoV-2 virus itself. The factors that drove influenza activity to low levels during the past 2 years likely included masking, social distancing, lack of international travel, and school closures, but also direct virus-virus interference with rampant SARS-CoV-2 spread keeping the lid on influenza virus transmission at the population level. There are biologic and immunologic phenomena that might explain why this is the case. Influenza virus activity was starting to pick up in the U.S. in early 2022 when the Omicron SARS-CoV-2 variant emerged and started rapidly spreading. Once that started, influenza activity dropped off.

I, for one, am becoming more inclined to believe we are less likely to see the "twindemic" of rampant COVID-19 and influenza at the same time. One may follow the other, but an overlap in peak activities might be biologically less likely. With several mutations starting to appear in the Omicron variants, and winter conditions such as crowding and other more favorable conditions for transmission coming, we may well experience another COVID-19 wave. If this occurs all bets are off as to what will happen to influenza activity.

Coming back to the question at hand, where does that leave us as we head into the 2022-2023 northern hemisphere flu season and what should we expect? There is a considerable amount of gazing into a crystal ball in these following comments. But I do believe we will have an influenza season, one that will be more like pre-pandemic seasons than post-pandemic. There is also a good chance the season will be early. The biggest unknown that could make a mockery of these predictions is SARS-CoV-2. If this virus comes roaring back with another variant and another wave, the crystal ball shatters.

I have left the "what can we do?" question until last. The answer is simple: Get vaccinated and encourage your patients to do so too. Make sure they get them both -- influenza and COVID-19 (including all boosters for which they're eligible). We are poor at predicting epidemic magnitude, but as cliched as it is, preparing for the worst and hoping for the best is prudent. Vaccination is central to preparing.

Richard J. Webby, PhD, is an influenza specialist at St. Jude Children's Research Hospital, and a member of the WHO Global Influenza Surveillance and Response System network.

https://www.medpagetoday.com/opinion/second-opinions/101236