In reversal, U.S. agrees to send 31 Abrams tanks to Ukraine

 The United States announced on Wednesday it will supply Ukraine with 31 advanced M1 Abrams tanks in a matter of months, a decision that helped break a diplomatic logjam with Germany over how best to help Kyiv in its war against Russia.

President Joe Biden announced the decision in remarks at the White House, saying the tanks are needed to help the Ukrainians "improve their ability to maneuver in open terrain."

Biden thanked Germany for its decision to supply Ukraine with Leopard 2 tanks. "Germany has really stepped up," he said.

"The expectation on the part of Russia is we’re going to break up,” Biden said of the U.S. and European allies. “But we are fully, totally and thoroughly united.”

The United States had been cool to the idea of deploying the difficult-to-maintain Abrams tanks but had to change tack in order to persuade Germany to send its more easily used Leopard 2 tanks to Ukraine.

Still, the Abrams -- among the most powerful U.S. tanks -- will not be heading to Ukraine anytime soon.

Senior administration officials who briefed reporters on the decision said it will take months, not weeks, for the Abrams to be delivered and described the move in terms of providing for Ukraine's long-term defense.

Members of the Ukrainian military will be trained on using the Abrams in a yet-to-be determined location. While a highly sophisticated and expensive weapon, the Abrams is difficult to maintain and provides a logistical resupply challenge because it runs on jet fuel.

The total cost of a single Abrams tanks can vary, and can be over $10 million per tanks when including training and sustainment.

The decisions by Washington and Berlin come as the Western allies help Ukraine prepare for a possible spring counter-offensive to try to drive Russia out of territory it has seized.

"There is no offensive threat to Russia," Biden said.

https://news.yahoo.com/reversal-u-agrees-send-31-170458582.html

Walgreens Weighs $2 Billion Sale of Pharmacy Automation Unit iA

 Walgreens Boots Alliance Inc. is weighing a sale of its pharmacy automation business, which could fetch up to $2 billion, according to people familiar with the matter.

The company, which is working with an advisers, is preparing to start a sales process in the next month or so for iA, said the people, who asked to not be identified because the matter is private. The unit is expected to draw interest from rival health-care companies and private equity firms, the people said. No final decision has been made and Walgreens could opt to keep the business, they added.

A representative for Walgreens declined to comment.

The potential sale comes as Walgreens considers shedding non-core businesses to raise cash for efforts including affiliate VillageMD’s $9.8 billion takeover of rival primary care provider Summit Health-CityMD, the people said. That deal was announced in November.

Merger activity in pharmacy solutions has been heating up too: shares of Becton Dickinson & Co. jumped last June after it announced a deal to acquire iA peer Parata Systems for $1.5 billion.

iA, with global headquarters in Indianapolis, helps big-box pharmacies fill prescriptions. Walgreens announced a majority investment in the company in 2021. It paid $451 million in cash for the majority equity stake, according to a March 2021 filing.

Walgreens, one of the biggest pharmacy chain operators in the US, has been pushing deeper into health care to lessen its reliance on its retail pharmacy business as online competitors like Amazon.com Inc. chip away at sales of household and beauty items.

https://finance.yahoo.com/news/walgreens-weighs-2-billion-sale-153838673.html

Novartis, in SCOTUS filing, argues 'wrongly deprived' of Gilenya patent

 After fighting for months to protect its Gilenya patent and losing in federal appeals court, Novartis has taken its complaint to the Supreme Court.

In a recent filing (PDF), the company asked the High Court to review a September decision by the U.S. Court of Appeals for the Federal Circuit that went against its favor. That month, a judicial panel overturned a prior win for Novartis and sided with Chinese generics maker HEC Pharm, finding a Gilenya patent invalid and potentially opening the door to competition.

At this juncture, Novartis is taking issue with the sequence of events that led to the decision.

After Novartis appeared set for a win in appeals court, a judge's retirement derailed its case, the company claimed in its Supreme Court filing. Originally, a panel of three judges supported the company's side of the case, but after HEC Pharm filed for a petition for rehearing, one judge retired.

That resulted in the new panel finding the patent invalid, the company said.

The company said the outcome “wrongly deprived Novartis of its patent on a groundbreaking new method for treating multiple sclerosis.”

Gilenya generated $326 million in the U.S. in the third quarter of 2022. The multiple sclerosis drug is already facing an authorized generic from Viatris, according to OptumRx.

https://www.fiercepharma.com/pharma/novartis-files-supreme-court-bid-gilenya-patent-case

20 states sue to stop Biden immigration parole program

 Texas and 19 other states sued the Biden administration Tuesday, looking to block a new program that allows up to 30,000 would-be asylum-seekers to enter the United States by air each month.

The lawsuit centers on the administration’s use of parole under immigration law to grant entry to the migrants, who otherwise would likely not qualify for entry visas.

“​​The Department of Homeland Security (DHS or Department), under the false pretense of preventing aliens from unlawfully crossing the border between the ports of entry, has effectively created a new visa program—without the formalities of legislation from Congress—by announcing that it will permit up to 360,000 aliens annually from Cuba, Haiti, Nicaragua, and Venezuela to be ‘paroled’ into the United States for two years or longer and with eligibility for employment authorization,” reads the lawsuit.

The Texas lawsuit comes as the Biden administration seeks to extricate the border and immigration issues from each other, creating avenues for migrants to bypass the border while cracking down on migrants who arrive unauthorized by land.

The administration’s plan to admit 30,000 Cuban, Venezuelan, Haitian and Nicaraguan migrants every month came coupled with the threat to immediately expel to Mexico an equal number of migrants from those countries apprehended at the border.

While the move is designed to ease pressure from border states by lowering foot traffic along the border, immigration hawks have balked at the plan.

“Every state in America, especially border states like Texas, is being crushed by the impacts of illegal immigration,” said Texas Attorney General Ken Paxton (R) in a statement. 

“The Biden open borders agenda has created a humanitarian crisis that is increasing crime and violence in our streets, overwhelming local communities, and worsening the opioid crisis. This unlawful amnesty program, which will invite hundreds of thousands of aliens into the U.S. every year, will only make this immigration crisis drastically worse,” he said. 

Paxton’s suit alleges that the Biden administration plan violates the precepts of immigration parole.

“The parole program established by the Department fails each of the law’s three limiting factors. It is not case-by-case, is not for urgent humanitarian reasons, and advances no significant public benefit,” reads the lawsuit.

The administration’s use of parole is unprecedented both in scale and scope — the authority has generally been used in large scale to respond to humanitarian crises, such as the 1980 Cuban Mariel boatlift.

And while immigration statute does not explicitly limit the administration’s use of parole, a 2008 DHS policy memo stated that parole “is not to be used to circumvent normal visa processes and timelines.”

According to the American Immigration Council, however, “while humanitarian parole is explicitly authorized by the [Immigration and Nationality Act] for ‘urgent humanitarian reasons,’ there is no statutory or regulatory definition of an ‘urgent humanitarian reason,'” giving the executive a wide berth in defining parole.

In his suit, Paxton asked the court to “enjoin, declare unlawful, and set aside the Department’s lawless parole program,” in part because “the Department does not have the authority to invite more than a third of a million more illegal aliens into the United States annually as it has announced with this program.”

But in the press release announcing the lawsuit, Paxton’s office wrote that the program “unlawfully creates a de facto pathway to citizenship for hundreds of thousands of aliens.”

Would-be asylum-seekers who enter the United States via air with parole would not be undocumented — or “illegal aliens,” according to statute — and would likely have an easier time than other asylum-seekers if they ultimately sought permanent residency and citizenship.

Many asylum-seekers who first enter the United States without prior authorization face bureaucratic hurdles to getting permanent residency because of their initial illegal entry.

Paxton’s lawsuit was filed in the United States District Court Southern District of Texas Victoria Division, where Trump-appointed Judge Drew Tipton in 2021 issued an unprecedented ruling in an immigration case.

Tipton’s 160-page ruling, among other things, ordered Immigration and Customs Enforcement to drop its enforcement priorities, which directed the agency to focus its resources on dangerous foreign nationals.

A three-judge 5th Circuit panel overruled most of Tipton’s ruling the following month, writing that “while the district court’s interpretation of these statutes is novel, executive branch memos listing immigration enforcement priorities are not.”

https://thehill.com/latino/3829011-texas-sues-to-stop-biden-immigration-parole-program/

Ex pandemic payout, IRS says expect smaller tax refunds

 The IRS is warning taxpayers at the opening of the 2023 tax filing season that they should expect smaller refunds due to pandemic relief measures that have been allowed to expire. 

A big reason is that there were no stimulus payments from the government to people to help get them through the pandemic in 2022. The last stimulus payments went out in 2021. 

Millions received those stimulus payments as a recovery rebate credit that was effectively given as a tax refund. 

Millions more received help through the pandemic through an expanded child tax credit (CTC) that many progressives saw as an effective and important social safety net. That credit was allowed to expire by Congress at the end of 2021. 

“Due to tax law changes such as the elimination of the Advance Child Tax Credit and no Recovery Rebate Credit this year to claim pandemic-related stimulus payments, many taxpayers may find their refunds somewhat lower this year,” the IRS said in a news release on Monday.

A tax break for charitable deductions was also allowed to expire, which could affect more taxpayers. 

“The reason people’s returns are changing this year is that they’re no longer accounting for stimulus payments and other credits,” tax expert Howard Gleckman of the Urban-Brookings Tax Policy Center said in an interview with The Hill. 

An IRS official told The Hill that not all refunds for tax year 2022 will be lower than previous years, and individual tax situations can vary.

One of the biggest changes in tax liability will result from the expiration of the expanded CTC.

The Biden administration’s American Rescue Plan increased the CTC for families making up to $150,000 a year from $2,000 per child to $3,000 per child for children older than 6, and from $2,000 to $3,600 for children younger than 6. It also raised the age limit for getting the credit from 16 to 17.

The legislation resulted in many families getting thousands of dollars more in their refunds. It also dramatically cut into U.S. child poverty rates, reducing them by about 26 percent per month — or a decline of about 3 million children living below the poverty line, according to studies by the Center on Poverty and Social Policy at Columbia University.

“The monthly anti-poverty impacts of the Child Tax Credit grew over time, as the IRS reached more eligible children as the months progressed,” Columbia researchers wrote in a paper in November. “By December 2021, the [CTC], on its own, had reduced the monthly child poverty rate by close to 30 percent, compared to what it would have been in the program’s absence.”

Critics of the CTC say it was too expensive to maintain indefinitely and was only a temporary relief measure made necessary by the coronavirus pandemic. 

Making the expanded child tax credit permanent would cost $1.6 trillion over the 10-year congressional budget window, according to an estimate by the Tax Foundation, a Washington think tank.

Other lapsed credits include an expansion of the earned income tax credit (EITC), which had its maximum amount nearly tripled in 2021 and was made to apply to both senior citizens and younger workers.

Taxpayers claiming the EITC with no children who received roughly $1,500 in 2021 will get around $500 in 2022.

“That credit provided a wage subsidy to lower income earners that phased in with earned income. So when they got a dollar of income, that was matched with extra tax credit,” tax analyst Erica York of the Tax Foundation said in an interview with The Hill. 

The child and dependent care tax credit will also dip back down this year to a maximum of $2,100 instead of the $8,000 that could be claimed last year.

For higher-income earners who own mutual funds or other common types of investment vehicles, ups and downs in the stock market may also have resulted in a higher tax liability for tax year 2022.

Declines in the S&P 500 and Dow Jones Industrial Average forced many portfolio managers to sell off stocks, incurring capital gains taxes at the time of sale even if those positions lost money over the course of 2022.

“If a stock was down $50 from its high but up $100 from when somebody bought it, a mutual fund would have to pay capital gains and they’d have to pass that on to you, as a shareholder,” Gleckman said.

https://thehill.com/policy/finance/3828849-why-the-irs-says-to-expect-smaller-tax-refunds-this-year/

"That's Highly Illogical, Captain"

 By Michael Every of Rabobank

Perhaps nobody gets original Star Trek memes anymore, and I am showing my age. Then again, it seems nobody gets original logic anymore, and trying to use any also shows one’s age.

The market continues to price for a dream scenario of inflation having peaked then coming down sharply, but not overshooting to the downside; only the very mildest of recessions by any historical standards; a rise in US unemployment to ease wage pressures and supply-side overheating globally, but again the smallest ever seen in a recession; a near-term US rates peak below 5%, despite repeated Fed calls otherwise, then rapid rate cuts; that the US keeps cutting while the rest of the world hikes; and the rest of the world doesn’t cut rates even more than the US despite net exporting to it, and the historical record that when the US sneezes, everyone else catches cold… at a time when China is still catching Covid.

As a conversation yesterday noted, partly this is due to the relatively good news that has come out in 2023 so far against 2022’s ultra-gloomy backdrop and projections. However, as was also stressed, the range of scenarios ahead is truly broad, and yet the market seems to have settled for a happy median that seems the least likely to transpire.

Spock of course knows a thing or two about probability as well as logic:

• What if unemployment is sticky, and so core services inflation is sticky, and so we see a rates pause, but then they have to go up again in H2 2023?

• What if unemployment surges after a lag like it always has done in a US downturn so far, and we get a recession and deflation as the backdrop to those ‘nice’ rate cuts?

• What if supply-side goods inflation picks up again before services inflation cools? After all, China is reopening, and its appetite for commodities may grow again; the Ukraine war is about to enter a new phase, perhaps disrupting agri-commodity flows, as the US and Germany agree to both send tanks – but Germany is only sending 14(!), the kind of deliberate inaction that still risks a longer, grinding war with more destabilising effects; and won’t energy prices rise as the US Strategic Petroleum Reserve is rebuilt, and far more so if energy demand doesn’t fall back because we don’t have a recession?

• What if current market pricing for rate cuts pushes commodity prices higher as the US dollar falls, and as commodities emerge as a geopolitical/inflation hedge?

• What if the Fed actually wants to see lower asset prices and keeps acting until it does, the inverse of the past pattern?

• What if the US stumbles into recession, but others globally outright crumble?

None of this is being answered substantively by markets, where the possibly correct expectations for any one asset class are not being carried over with any kind of internal logic to all others. Then again, they can’t even get the NYSE to work properly now, so why listen to them anyway?

I don’t know how much more often or how much higher I can raise one eyebrow, original Nimoy-Spock style. (On which note, Nimoy wrote two autobiographies: “I am not Spock” in 1975, and “I am Spock” in 1995.) However, it seems I will have to keep practising as the market keeps indulging in highly illogical and improbable thinking. Indeed, let’s recall some classical logic errors evident almost every day in markets:

1. This is true because it has not yet been proven false.

2. This must be true because if it were false that would be horrible.

3. This is true because people say it's true.

4. That idea is bad because bad people believe it.

5. This is true because that smart person says it's true.

6. If this is not 100% true, then it must be 100% false.

7. This happened after that, therefore that caused this.

For one example, global yesterday’s PMIs can be seen as backing a stagflationary view of the world, not a happier outcome. That was not how they were dressed up by markets.

For a second example, in New Zealand we see a Bloomberg headline this morning saying, ‘Kiwi Bonds Surge After NZ CPI’. All well, and good. Except that CPI number was 1.4% q-o-q in Q4, down from 2.2%, but higher than the 1.3% expectation; y-o-y inflation was an unchanged 7.2%, a tick higher than expected; tradeable CPI was 1.4% q-o-q vs. just 0.8% expected, despite lower commodity prices in Q4 already being reversed in 2023 as China reopens; and only non-tradeable CPI was 2 ticks weaker than expected at a still staggering 1.5% q-o-q, so 6% annualised, or three times the RBNZ’s CPI target. Yet the tiny Kiwi bond market indeed surged before someone who has watched original Star Trek started to sell. How many of the above logic errors were made in that early trading and pre-release market consensus call?

For third example, Aussie Q4 CPI was far higher than expected, making a mockery of claims that Down Under inflation is over. Instead, we saw q-o-q CPI hit 1.9%, almost a y-o-y figure, and well above 1.6% consensus. The y-o-y rate hit 7.8%, up from 7.3%, and vs. a 7.6% expectation. More worrying, the trimmed mean was 1.7% q-o-q and 6.9% y-o-y, the weighted median was 1.6% q-o-q and 5.8% y-o-y, and December m-o-m CPI was 8.4% y-o-y vs. a 7.7% market call. Worse, this was all before China reopened, before commodity prices started to push higher again, and before yields dipped, breathing new life into local ‘buy the housing dip’ headlines. But don’t worry, Aussie rates will still peak at a low enough level not to harm the housing market,… right? Perhaps, but it’s both highly illogical and improbable, Captain.

If only I could give markets the Vulcan nerve pinch – but more Aussie data like today will do the job for me, I think.

https://www.zerohedge.com/markets/thats-highly-illogical-captain

ANNOVIS OPENS PHASE 3 STUDY OF BUNTANETAP FOR PARKINSON'S

  Annovis Bio, Inc. (NYSE: ANVS) ("Annovis" or the "Company"), a clinical-stage drug platform company addressing neurodegenerative diseases, today provided a patient enrollment update for the Company's ongoing Phase 3 study of buntanetap for the treatment of Parkinson's disease ("PD").

Based on the current enrollment, the Company anticipates having a sufficient number of patients who have received two months of therapy to conduct an interim analysis in the second quarter of 2023. The purpose of the interim analysis is to determine if the Company's original estimates for patient enrollment in the Phase 3 trial (150 patients per arm) will be sufficient to observe a statistically significant treatment effect in both scales between the active arms and the control arm of the study after six months of treatment.

More specifically, the interim analysis could confirm that 150 patients is the optimal number, or it could inform that less patients are needed (the efficacy is better than expected) or that more patients are needed (the efficacy is less than expected). The boundaries of the extent to which we will decrease or increase the number of patients is +/- 25% or between 112 and 200 patients per arm.

https://finance.yahoo.com/news/annovis-bio-announces-patient-enrollment-123000901.html