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Tuesday, April 18, 2023

J&J issues cautious 2023 forecast

 Johnson & Johnson on Tuesday cautioned investors over the lingering impact of inflation-driven costs this year as the healthcare conglomerate issued a conservative full-year profit forecast, and its shares fell more than 2%.

J&J also said it expected a steep decline in sales of its blockbuster Crohn's disease drug Stelara once it loses U.S. patent protection in late 2023.

Shares were 2.4% lower at $161.71, making it the biggest decliner on the Dow Jones Industrial Average index, which was off about 0.4%.

J&J, the first large drugmaker and medical device manufacturer to report earnings, raised the midpoint of its full-year profit forecast by 10 cents despite beating first-quarter estimates by 18 cents.

The company was "responsibly optimistic" about 2023, Chief Financial Officer Joseph Wolk said on a conference call, pointing to fierce competition for cancer drug Imbruvica and inflation as some of the challenges it was facing.

"Inflation is always a concern and we think that it's going to linger for the next couple of quarters," Edward Jones analyst John Boylan said. "It may take a while perhaps on the device side to work through some of the higher input costs, but we think that the healing process is in place."

A recovery in medical procedures after being weighed down by hospital staffing shortages helped the medical device unit post sales of $7.48 billion, topping analysts' estimates of $7.31 billion.

The company reported overall sales of $24.7 billion for the quarter, but posted a net loss of $68 million due to a $6.9 billion charge related to a second bankruptcy filing by its LTL Management unit as it attempts to settle more than 38,000 lawsuits claiming its talc products cause cancer. The company has said the products are safe and do not cause cancer.

J&J said the ongoing spinoff of its consumer health unit would not be impacted by the bankruptcy filing.

More US consumers are falling behind on payments

 Consumers are starting to fall behind on their credit card and loan payments as the economy softens, according to executives at the biggest U.S. banks, although they said delinquency levels were still modest.

Profits at Bank of America Corp, JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc beat analyst forecasts as lending giants earned a windfall from rising interest rates. But industry chiefs warned that the strength would tail off this year as a recession looms and customer delinquencies climb.

"We've seen some consumer financial health trends gradually weakening from a year ago," Wells Fargo Chief Financial Officer Mike Santomassimo said on a conference call Friday to discuss its first quarter results.

While delinquencies and net charge-offs - debt owed to a bank that is unlikely to be recovered - have slowly risen as expected, consumers and businesses generally remain strong, the bank's CEO Charlie Scharf said.

The company set aside $1.2 billion in the first quarter to cover potential soured loans.

Citigroup also made larger provisions for credit losses even as it brought in more revenue from clients' interest payments on credit cards.

Delinquency rates were rising as anticipated, but still stood below normal levels in the bank's "very high quality" loan portfolio, said Mark Mason, the bank's finance chief.

"We have tightened credit standards specifically as a result of the current market environment in cards, we continue to calibrate our credit underwriting based on what we're seeing based on macroeconomic trends," Mason said.

Delinquency rates will probably return to "normal" levels of 3% to 3.5% for branded cards and 5% to 5.5% for retail services by early 2024, Mason said. Current delinquency rates are 2.8% for branded cards and 4% for retail services, according to Citi's presentation on its earnings.

Bank of America provisioned $931 million for credit losses in the quarter, much higher than the $30 million a year prior, but below fourth quarter $1.1 billion provision. Total net charge-offs with credit reached $807 million, increasing from the former quarter but still below pre-pandemic levels, the bank said in its earnings release.

Mexican president accuses Pentagon of spying; vows to restrict military information

 Mexican President Andres Manuel Lopez Obrador on Tuesday accused the Pentagon of spying on his government following leaks in U.S. media, and said he would begin classifying information from the armed forces to protect national security.

His comments came several days after the Washington Post reported on apparent tensions between Mexico's Navy and the Army, citing a U.S. military briefing revealed in online leaks of secret U.S. military records.

"We're now going to safeguard information from the Navy and the Defense Ministry, because we're being a target of spying by the Pentagon," Lopez Obrador told his daily news conference.

The Pentagon did not immediately respond to a request for comment. It has called the leak a "deliberate, criminal act."

The Washington Post story said there was no indication the cited document came from intercepted communications of Mexican officials.

Lopez Obrador has come under pressure to hold the military accountable for years of alleged abuses, including reported disappearances and killings. Even so, he has increased the army's role in public safety and sought to put the National Guard, a militarized police force, under Army control.

On Monday, Lopez Obrador had described the U.S. intelligence in the leaks as an "abusive, overbearing intrusion that should not be accepted under any circumstance," adding that he did not plan to rebuke the U.S., but would at some point discuss "conditions for collaborative work."

When presented on Tuesday with new allegations of the use of controversial spyware Pegasus during his government, he reiterated that his administration does not spy.

Prominent Mexico-based rights group Centro Prodh on Tuesday said two of its staff had their phones targeted by Pegasus last year, according to an analysis by Toronto-based digital watchdog Citizen Lab, becoming the latest of several alleged cases of Pegasus used during Lopez Obrador's government.

https://www.yahoo.com/lifestyle/mexican-president-accuses-pentagon-spying-181451335.html

Affirming the Binary

 Evolutionary biologist and Manhattan Institute fellow Colin Wright joins Brian C. Anderson to discuss the male–female distinction and regulating gender medicine. 

Audio Transcript


Brian Anderson: Welcome back to the 10 Blocks podcast. This is Brian Anderson, the editor of City Journal. Joining me on today's show is Colin Wright. He's an evolutionary biologist and a Manhattan Institute fellow. He's the founding editor of Reality's Last Stand on Substack and an academic advisor for the Society for Evidence-Based Gender Medicine. And his work has been featured in a number of major outlets, including the Wall Street Journal, the New York Post, and Quillette, and he's also written for City Journal. He writes extensively about gender identity and the biology of sex. And today, we're going to discuss some of his recent work for CJ. So Colin, thanks very much for joining us.

Colin Wright: Thank you a lot. I appreciate being here.

Brian Anderson: So academics, activists have attacked the sex binary, something that you've written about for us, which is the division of humans into the biological categories of male and female.

Now, the gender theorists, the gender activists point to intersex conditions, which cause people to have ambiguous sexual anatomy, as proof that the sex binary is fictitious. They argue that intersex people prove that biological sex is actually a spectrum or exists on a spectrum and that the categories of male and female are a social construct, made up. So therefore, sorting people into two categories, male and female, is on their view harmful and inaccurate.

So let's start by just unpacking their reasoning. What do you think of it? And does the sex binary require that every person be unambiguously male or female?

Colin Wright: That's a great question that gets right to the fundamental aspect of everything, basically. I find that there's a lot of confusion on both sides of this debate about what the sex binary means.

You have people who are arguing for the reality of biological sex and empirical truth. And sometimes, they come across as saying that the sex binary means that every single individual today and in all of history can be unambiguously classified as either male or female.

And then you have, on the other side, these gender activists, who are trying to say that biological sex is a spectrum and that the binary necessarily entails that every single individual is classifiable. So therefore, if they can point to one single individual who is a stumper, then that means that sex is no longer binary, it exists on a spectrum. They take this small blur in the middle, and they try to extrapolate that to the entire picture.

Now, what I'm trying to convey to people in a lot of my City Journal pieces and other writings is that when biologists talk about the sex binary, they're actually saying something very simple. They're just saying that there are only two sexes that a person, or mammal, or a bird can be. It makes no statement about individual bodies, really, saying that everyone can be completely unambiguously classified as either male or female. I personally think that the overwhelmingly vast majority of people can clearly.

But the important thing to note here is that if someone were to present with a very complex case of primary sexual anatomy that seem to stump a lot of people, this ambiguity would just be sex ambiguity. It wouldn't be a third sex category. And this is because when we talk about the sex binary, the two sexes are rooted in the type of gamete that they're reproductive systems are organized around or produce. So males, they have the function of producing small gametes, which are sperm; females, large gametes, which are ova.

Because there's only two types of gametes that exist, there's no intermediate, there really can only be two sexes. A human that would be sexually ambiguous would just be a sexually ambiguous person. Similarly, in nature, we see examples of individuals that are what are called simultaneous hermaphrodites, where they're both male and female at the same time, existing in a single body. But again, this is not a new third sex. This just affirms the sex binary, because they're both sexes. So when we use the term, "You're one, not the other, you're both, or you're neither," all of these entail the binary nature of biological sex. So I hope that's clarifying.

Brian Anderson: Yeah, I think it is. How does this intersex question intersect with the transgenderism debate that the nation is in the midst of right now?

Colin Wright: It really shouldn't be. And that's something I tried to say in my most recent piece for City Journal. I call this the “intersex trap,” and it's the tendency of a lot of arguments that gender activists are making to try to steer all these arguments about transgenderism into the weeds, into complex discussions about various intersex conditions.

Take males in female sports, for instance. You have someone like Lia Thomas, who's unambiguously male, is fully intact, is male in every sense of the word of what a male is. Now, you get a lot of people who would try to say that Lia Thomas should be able to compete as a female, and then they would point to other athletes like Caster Semenya, who has an intersex condition, and they'll point to all these other intersex conditions, these intersex athletes.

It's a red herring. They're trying to distract you away from making the easy calls on Lia Thomas, saying that Lia Thomas is unambiguously male, by just bringing up someone like Caster Semenya, getting you to mumble and stumble your way through making assessments on really complex case studies of intersex conditions.

And what I try to say is that this should be completely irrelevant. We don't need to talk about intersex conditions when we're talking about trans issues. That's only done because it makes you stumble and seem stupid if you're in a debate or something. So the correct thing we should do is completely separate the intersex question from the transgender question and don't let these things be muddled together, because there really couldn't be more distinct topics.

Brian Anderson: Onto the transgenderism issue, unlike in European countries, or at least a number of European countries, where you're seeing a more cautious approach taken to gender medicine, especially as it is pertaining to children, the American medical establishment has embraced an incredibly aggressive treatment regimen, prioritizing puberty blockers, cross-sex hormone therapy, gender transition surgeries over a psychotherapeutic approach and other less invasive treatments.

So given the consequences and controversial nature of these practices, many states, as we're seeing, have sought to curb them through policy. So I think gender medicine does need regulation. But as you've written, the good intentions of some of these states might not guarantee good results, and poorly crafted legislation could be counterproductive.

So I wonder, what is your sense of the state of play on that? What makes a good state bill regulating gender medicine from a potentially disastrous one? And what is making the bad ones unsound?

Colin Wright: Yeah. This ultimately comes down to trying to make any policy less about politics and more about the science. Florida did a really good job about this, because they involved the Florida Medical Board or Medical Association. I can't remember the exact name. And so this wasn't seen as an overtly political act. They had the authority of the state medical board behind these decisions.

They conducted a review of the evidence, a systematic review of all the evidence to find that the state of the evidence on the efficacy of gender-affirming care, really the costs seem to outweigh the benefits. This is similar to what all the European countries are now starting to do. And importantly, every single country that has performed this systematic review of the evidence has found the evidence completely lacking in terms of actual benefits to individuals who are receiving gender-affirming care, long-term outcomes, et cetera. And there's plenty of room for caution.

A lot of states, we understand that given the state of evidence, we don't have a lot of medical boards that are coming on board to this. A lot of them have seemingly been ideologically captured by this. And so rightfully, a lot of people are going to their states to try to push this through legislatively. I'm for these moves, because there needs to be some sort of stop gap. But ultimately, I think these need to try their best to use the state medical boards, try to get them to do systematic reviews of the evidence.

But there's also ways that the states can go overboard with some of their policies. Some, I believe it was Texas, they put wording in their legislation that would allow children to sue their parents if the parents allowed them to go through with gender-affirming medicine that they came to regret. Now, this has been pointed out by some people that this could actually be a double-edged sword, and this could cause kids to be able to potentially sue their parents for not gender-affirming their children as well.

Other states, Utah, I believe they had something in their bill that would ban gender-affirming care well past the age of 18. I think it was up to 25. And this undermines the argument that this is really all about children and that consenting adults who are able to understand the state of the evidence and really what they're getting into are able to do what they like.

So I think that we need to focus really on the pediatric gender medicine, because really, honestly, kids sometimes are getting these interventions as early as nine years old in terms of puberty blockers, and then the surgeries can be as young as 12, 13 when they begin. So we need to focus really on the pediatric side of things. And then we also need to make sure that it's, to the best of its ability, grounded in evidence and trying to get states to work with their medical boards to do these systematic reviews of the evidence.

Brian Anderson: Issues of gender medicine and transgenderism have ascended really with unbelievable rapidity to the forefront of American policy and culture. So policymakers, commentators, parents, they're all being asked to make and act on judgment calls involving what are, as you've just suggested, complex medical questions.

As an evolutionary biologist, you're bringing, I think, very valuable scientific insight to this debate, as you've done in your pieces for us and on the Substack. How did you begin to focus, and this is really a personal question, on the gender identity debate and the biology of sex, and what drew you into the public debate? And second, relatedly, how does your training as a scientist inform your understanding of these issues?

Colin Wright: So I could not have imagined that this is what I would be doing full-time now. My work as an academic was investigating the collective personalities of insect and arachnid societies, so vastly different from what I'm doing now.

I had always been very interested in debunking pseudoscience. I had a blog before my Substack, so I had a blog in the late 2000s, early 2010s that was dedicated to debunking a lot of what was at the time this anti-evolution sentiment, intelligent design and creationism. And so I, as a hobby, would write essays debunking some of these things to stand up for biological reality.

And then when I was in grad school, I did less of that, because I was focused just on getting my Ph.D and graduating. And then I saw these narratives bubbling up about biological sex. And people were saying that there's five sexes, because they read something that Anne Fausto-Sterling wrote in the New York Times. There were articles coming out in Nature that talked about how biologists think that male and female is overly simplistic and that there's a spectrum. And this was followed by Scientific American, a very popular article about the sex spectrum, with this really big diagram of the spectrum.

And I just knew, given my training as a behavioral ecologist at the time, because we know that sex differences are some of the biggest behavioral differences out there. And so we study a lot about the fundamental aspect of what it means for individuals to be male or female across the entire animal kingdom. And I just knew that they were making a very simple mistake about what it means to be male or female.

And so initially, my articles were really focused on just, "I'm just going to make this scientific argument, because that's what scientists do. And then my colleagues are going to then neither agree or disagree. And if they disagree, they're going to make calm, scientific arguments in response."

And what I found was that, unlike any on other topic, that was not the case. The responses I got were not dealing with any of the scientific arguments. It was just straight to, "You're a bigoted transphobe. You're oppressing people. This is outdated." They would even throw in things like white supremacist, all that type of stuff.

And so I really just couldn't stop focusing on that, because my reason for being a scientist was I thought the halls of academia is where you're supposed to be able to ask deep, important questions and debate anything using logic and reason and evidence. And I realized that that was no longer the case.

Long story short, there was a big cancellation campaign around me that eventually drove me away from academia to work full time in this space where I can't be canceled anymore. My Substack is helping me do that.

And I think that I'm really glad I'm able to bring my expertise as a biologist to this topic. I do miss studying insects and spiders to some degree, but I think this is just a much more important topic. It's a fascinating topic. It's culturally relevant. It ticks all the boxes for something that I can be very interested in and write about. And I hope, I suppose, that I'm doing a good job of educating the masses to give them a better grasp on what this biological sex is, and how to see what the activists are saying, and how to deconstruct it, and how to respond effectively.

https://www.city-journal.org/multimedia/affirming-the-binary

Federal watchdog finds HHS secretary violated Hatch Act

 A federal watchdog on Tuesday informed the White House that Health and Human Services Secretary Xavier Becerra violated the Hatch Act at an awards gala last September.

The Office of Special Counsel (OSC) submitted a report to President Biden detailing that Becerra was found to have violated the ethics law when he said at a Congressional Hispanic Caucus event he would vote for Sen. Alex Padilla (D-Calif.) in the midterm elections.

“In doing so, Secretary Becerra violated the Hatch Act’s prohibition against using his official authority or influence to affect the result of an election,” the OSC report stated.

Becerra told the federal office that his comments about Padilla were “off-the-cuff” and reflected his “longstanding personal relationship” with the senator.

OSC indicated in its report that its findings about Becerra should serve as a reminder for federal officials about proper conduct as the 2024 election season approaches.

Becerra is one of a handful of Biden administration officials to be cited for violating the Hatch Act, which prohibits federal government employees from engaging in campaign activity in their official capacity. The Hatch Act does not apply to the president or vice president.

Former White House press secretary Jen Psaki, former chief of staff Ron Klain, and Secretary of Housing and Urban Development Marcia Fudge all have been warned for making comments about candidates or an election.

The Trump administration was the subject of numerous Hatch Act complaints during its four years in power. 

An outside government watchdog levied complaints against then-White House press secretaries Sarah Huckabee Sanders and Kayleigh McEnany, White House deputy press secretary Hogan Gidley, Trump chief of staff Mark Meadows and other staffers for violating the law.

The Office of Special Counsel recommended in 2019 that then-White House counselor Kellyanne Conway be fired for being a repeat offender, an extraordinary step that then-President Trump declined to take.

https://thehill.com/homenews/administration/3957113-federal-watchdog-finds-hhs-secretary-violated-hatch-act/

Intuitive Surgical Stock Climbs 8% on Robotic Surgery System Growth

 Shares of Intuitive Surgical Inc. on Tuesday climbed 8% to $291 in after-hours trading after the provider of robotic-assisted surgical solutions and invasive care posted strong revenue growth from its robotic surgery system.

The company said first-quarter revenue climbed 14% to $1.7 billion on the back of higher da Vinci procedure volume. Analysts polled by FactSet had forecast revenue of $1.59 billion.

Intuitive Surgical saw installations of its da Vinci surgical system increase to 7,779 systems as of March 31, up 12% from a year earlier, it said.

The company's da Vinci revenue growth comes as worldwide procedures using its da Vinci system rose about 26% in the period, it added.

Intuitive Surgical's profit, on the other hand, fell to $355.3 million, or $1 a share, compared with $365.6 million, or $1 a share, for the same period a year earlier.

https://www.marketscreener.com/quote/stock/INTUITIVE-SURGICAL-INC-9740/news/Intuitive-Surgical-Stock-Climbs-8-on-Robotic-Surgery-System-Growth-43535660/

Fed's Bullard discounts recession talk, favors more rate hikes, 'higher for longer'

 The U.S. central bank should continue raising interest rates on the back of recent data showing inflation remains persistent while the broader economy seems poised to continue growing, even if slowly, St. Louis Federal Reserve President James Bullard said.

In comments countering views that the U.S. is heading towards a banking crisis, a recession, or both in the near future, Bullard told Reuters in an interview: "Wall Street's very engaged in the idea there's going to be a recession in six months or something, but that isn't really the way you would read an expansion like this."

Investors may see rate cuts in the Fed's near future, part of a recession-breeds-accommodation view of the world, but "the labor market just seems very, very strong. And the conventional wisdom is that if you have a strong labor market that feeds into strong consumption ... and that's a big chunk of the economy ... it doesn't seem like the moment to be predicting that you have a recession in the second half of 2023," he said.

Despite the current 3.5% unemployment rate, Fed staff at the central bank's March 21-22 policy meeting said they also anticipate a "mild recession" this year, while Bullard's colleagues have penciled in an economic outlook that indicates zero growth or a contraction for much of the rest of the year after a relatively strong first quarter.

In the case of the staff forecast, the fallout from recent stress in the banking sector seemed to tip the scales.

But if two U.S. bank failures last month were going to spark a crisis, Bullard said, it'd likely be showing up in things like the St. Louis Fed's financial stress index. The index did spike after the March 10 collapse of Silicon Valley Bank, but it quickly reverted to a normal reading.

"If you were really going to get a major financial crisis out of this, that index would spike up to a four or five. It's zero now. So it doesn't look, as of this moment, like too much is happening," Bullard said.