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Wednesday, October 2, 2024

Trump and Dave Ramsey talk about '$8 eggs, $5 gas, 7% interest rates' and unaffordable housing

 Personal-finance personality Dave Ramsey interviews Donald Trump about affordability issues impacting consumers

Personal-finance author and radio host Dave Ramsey sat down with former President Donald Trump to talk to the Republican nominee about a key issue on the minds of Ramsey's followers: high prices and what can be done to bring them down.

In an interview released Tuesday, Ramsey started off by noting that his show is about money, not politics, telling his audience that "what happens in your house is more important for your success than what happens in the White House." But given the divisive nature of this election, Ramsey said, he invited the presidential candidates "to talk about ideas; talk about what's going to happen."

Ramsey, a well-known fiscally and culturally conservative talk-show host, recently said of Harris and Trump that "neither one of these people are going to be your savior," and "neither one of [them] are fiscally responsible human beings." His team reached out to both Trump and Vice President Kamala Harris for interviews; Harris's team was still reviewing the request, he said on his show Monday.

During the interview, Ramsey told Trump his audience is "not concerned with a lot of things, but they are concerned with $8 eggs, $5 gas, 7% interest rates and a house they can't afford, with wages not going up as fast as house prices. This inflation thing's a big deal."

As of August, the average price of eggs had come down to $3.20 per dozen and gas was $3.65 per gallon, according to the Bureau of Labor Statistics. Mortgage rates have also fallen after soaring to 8% in 2023; the 30-year fixed-rate mortgage averaged 6.08% as of Sept. 26, according to Freddie Mac.

Asked to comment further on the interview, a spokesperson for Trump said the delinquency rate on credit cards has skyrocketed under the Biden administration as more Americans cannot afford to make ends meet.

Here are some highlights from Ramsey's discussion with Trump, which covered energy prices, Social Security and other personal-finance topics:

Energy prices and inflation

After Ramsey asked about high prices, including for food and housing, Trump boiled down people's inflation concerns to energy prices, which are highly correlated with voter sentiment. Trump said the first thing he would do to help cut household expenses if elected would be to bring down energy prices by increasing domestic oil production. "We're going to drill, baby, drill," he told Ramsey. Lower oil prices would help bring down interest rates, he argued, because it "takes that burden off the shoulders of the economy and off the shoulders of inflation itself."

U.S. gas prices increased following pandemic disruptions and Russia's invasion of Ukraine. By August, a gallon of gas cost $3.65, an increase of more than 30% on average compared with the same month five years earlier, according to the Bureau of Labor Statistics.

Speaking on energy prices in the presidential debate last month, Harris said the Biden administration had increased domestic oil production (the U.S. has actually produced more crude oil than any other country for the past six years, according to the U.S. Energy Information Administration), that she would not ban fracking, and that "we have got to invest in diverse sources of energy so we reduce our reliance on foreign oil."

Protecting Social Security

The Social Security trust fund is expected to run out of money in eight years, "as growth in the workforce slows and more boomers collect benefits," according to the Urban Institute, a center-left think tank. Possible solutions include increasing taxes or increasing the retirement age."We have to save Social Security and keep it good and solid. I don't want to be raising ages or anything," Trump told Ramsey. Once again, Trump blamed "migrants" who receive public benefits - an argument that has repeatedly been debunked. As PolitiFact explains, immigrants who are legally qualified to work only receive Social Security retirement benefits after they've worked and paid Social Security taxes for 10 years, and immigrants who are in the U.S. illegally cannot receive Social Security retirement benefits.

Harris has proposed bolstering Social Security and Medicare "by making millionaires and billionaires pay their fair share in taxes."

Taxes and tariffs

Trump reiterated his plan to cut corporate taxes and increase tariffs. "You have to manufacture your product here, and then you pay 15% [in corporate taxes], and then I'm going to put tariffs on countries so they can't come in and steal our business, so that our businesses now can be competitive," Trump told Ramsey.

Trump's 2017 Tax Cuts and Jobs Act is expected to add nearly $2 trillion to the deficit by 2028, according to the Brookings Institution.

Trump's proposed tariffs would reduce long-run gross domestic product by 0.8%, the capital stock by 0.7%, and hours worked by 684,000 full-time equivalent jobs, the nonpartisan Tax Foundation estimates. Researchers expect tariffs would ultimately increase prices for consumers, with the Harris campaign often citing a $4,000-a-year increase for middle-class households, the high end of estimates, according to PolitiFact.

Researchers at the Peterson Institute for International Economics said in a recently released report that Trump's proposals to increase tariffs and deport migrant workers would together increase prices for consumers, adding to inflationary concerns.

How to 'raise great kids'

While the interview never addressed child-care costs, which have increased sharply and are of growing concern to many American families, Ramsey asked Trump, "How do you raise great kids?"

His response: "The one thing I always told my kids: no drugs, no alcohol, no cigarettes." Trump talked about his late brother, Fred Trump Jr., who struggled with alcoholism. "I've never had a glass of alcohol, if you can believe it, I think largely because of my brother," he said.

As for teaching work ethic to one's children, Trump said, "They have to like what they do. ... If you don't love what you do, it's not going to work."

https://www.morningstar.com/news/marketwatch/20241002222/trump-and-dave-ramsey-talk-about-8-eggs-5-gas-7-interest-rates-and-unaffordable-housing

Grid Apocalypse Hits Carolinas: 360 Substations Down, Power Restoration Could Take "Months"

 Rep. Chuck Edwards (R-NC), representing a district in the western portion of the state battered by Hurricane Helene, released a press release Sunday detailing the infrastructure devastation. 

Edwards said power outages remain widespread in Western North Carolina as of Sunday. Fast-forward to Wednesday morning, Poweroutage.US data shows more than 400,000 residents are without power in the region. 

He explained that 360 power substations "are out," indicating that "many of these substations were completely flooded, and Duke Energy is unable to assess the damage until the flooding has lowered, the water has been pumped out, and the equipment is thoroughly dried."

What's piqued our interest is that the powering up America theme to power AI data centers and other electrification trends, such as EVs and onshoring manufacturing (as outlined in "The Next AI Trade"), has led to shortages and price increases in the transformer market. 

"Distribution transformers are a bedrock component of our energy infrastructure," National Renewable Energy Laboratory researcher Killian McKenna said, who was recently quoted by PV Magazine

McKenna pointed out, "But utilities needing to add or replace them are currently facing high prices and long wait times due to supply chain shortages. This has the potential to affect energy accessibility, reliability, affordability—everything."

Other reasons for the transformer shortages besides power grid upgrades include raw material sourcing problems, pandemic-related supply chain woes and backlogs, labor constraints, shipping issues, and geopolitical tensions. 

Given all of this, Jesse D. Jenkins, an assistant professor and macro-energy systems engineering and policy expert at Princeton University, responded to the dire situation of a grid apocalypse playing out in the Southeast US:

"This is devastating. We do NOT have 360 substations worth of transformers and other electrical equipment sitting in stockpiles waiting to be deployed. It could take a very long time to restore power to everyone. Are we facing a Hurricane Maria-type impact on grid infrastructure?" 

Making matters worse for residents of North Carolina, some X users are pointing out the Biden-Harris administration supplied transformers to Ukraine. It's unclear if these transformers were drained for US stockpiles. Meanwhile, others note that Ukraine uses a different electrical system than the US.

What's not questionable is this: Earlier this year, US ambassador to Kyiv Bridget Brink jumped for joy on X, indicating United States Agency for International Development delivered "50 voltage transformers, 9 current transformers, & 80 isolators." 

You know, just Washington elites have been prioritizing Ukraine's power grid over the US' fragile grid. 

Nathaniel Horadam, a managing consultant and automated vehicle specialist with the Atlanta-based nonprofit Center for Transportation and the Environment, wrote on X, " It's Hard to express how insane this is. With ongoing supply chain challenges facing switchgear and transformers, this could take many months to resolve." 

"There's no excess capacity to quickly replace substation infrastructure. Lower priority sites could literally take years," Horadam warned. 

Possibly summed up here...

Really big 'sigh'...

America needs new leadership. Leftist elites prioritize other countries and illegal aliens over American citizens. This is happening against the will of the American people. The Biden-Harris admin has been sailing a rudderless ship in a worsening shitstorm as the world is on fire. 

https://www.zerohedge.com/commodities/grid-apocalypse-hits-carolinas-360-substations-down-power-restoration-could-take-months

Royalty Financing Serves as Lifeline for Some Biopharma Companies in Uncertain Market

 

As traditional fundraising methods falter for smaller firms, the rise of royalty deals is reshaping how companies access capital, offering an alternative that bypasses equity dilution and debt.

The environment for biotech and smaller pharma companies to raise capital has been difficult in recent years. Investor confidence in the biotech industry has struggled since the highs seen during the pandemic, with the XBI index of stocks remaining largely flat over the last two years. Though there are signs that 2024 represents a resurgence in investment, with IPOs and M&A activity surpassing levels seen in 2023, the industry is still recovering from the flight of capital.

Life science companies have reacted to the difficulty in sourcing capital in various ways, such as the broad industry move to downsize and restructure workforces to extend available cash reserves and a trend for companies to delay potential IPOs. In the background of such strategies, there has been a shift to an alternative option for sourcing capital, through royalty financing.

Though they have been around for decades, royalty deals are a means of raising capital that involves an investor buying a percentage of future revenue from a drug manufacturer on specific single or multiple assets. In this way, a manufacturer can receive an upfront fee and potentially future milestone payments dependent on the development of the asset, which can then be used for short-term capital needs.

This type of financing is distinct from an equity deal because it offers the company a non-dilutive means of raising funds for development or commercialization costs. It can also be a more flexible arrangement than taking on debt because there are no interest payments to meet nor is the deal itself dependent on the economic environment. The latter advantage is one of the major reasons that this type of deal is on the rise and why more can be expected in the future.

George Shuster Jr., partner at law firm WilmerHale, told BioSpace that the number of such deals has grown “exponentially” in the last three years, following a steady increase over the last decade.

WilmerHale earlier this month released an analysis of the surge in royalty financing in the “difficult” life sciences fundraising environment. “As royalty financing and monetization transactions gain momentum as alternatives to traditional debt and equity financing, life sciences companies may look to take advantage of these methods of fundraising to accelerate product development, launch clinical programs, or acquire additional assets,” the report found.

Twin Drivers for Deals

Previously, these types of deals were considered highly specialized transactions that only fit a narrow set of circumstances, according to Shuster. However, with the entry of a greater number of private credit investment funds, there has been more interest in creating novel transactions to expand their portfolios and to meet demand for capital, he said.

In convergence with the rise of private investment has been the downturn in the overall market environment for supporting smaller companies and biotechs. Not surprisingly, royalty financing is a popular option for emerging biopharma.

“The market for life sciences companies in equity transactions has slowed down to a point of all but drying up—not just at the IPO level, but really all the way down to much earlier stage financings,” Shuster explained. “And as that happened, the stock price for public life sciences companies has suffered. That means not only is it harder to get the equity financing in the door, but if you are going to raise equity financing, it is at very unattractive prices that would be extremely dilutive to the existing shareholders.”

For companies seeking to complete royalty financings, part of the appeal is being able to raise capital without having to dilute existing shareholders, especially at the later stages of developing a product. For the investors, it is attractive to have a return from such deals that is not dependent on the stock market or interest rates, with the profit driven instead by the success of the product at the heart of the deal, according to Nathan Moore, partner at WilmerHale.

As a result, the number and scale of such deals is increasing, with Royalty Pharma—a specialist buyer of royalties—striking deals potentially worth close to $2 billion in May 2024 alone. In one of those deals, Royalty Pharma paid $525 million to acquire the royalties and milestones for ImmuNext’s anti-CD40 therapy frexalimab, which is currently in Phase III trials for multiple sclerosis. In return, Royalty will receive 100% of annual worldwide net royalties that ImmuNext would have received under its licensing deal with Sanofi, up to $2 billion.

In a report based on 2022 data, management consulting firm ZS found that over the preceding four years, the average value of royalty deals increased more than twice as fast compared with other financing types, with the total value of royalty deals growing at a compound annual growth rate of 45%, compared with 25% for equity deals. “This suggests greater resilience against the macroeconomic factors impacting today’s equity market,” ZS concluded.

Big Pharma on Sidelines

Traditionally, it has been Big Pharma stepping in to snap up the rights to assets that are closing in on commercialization. Private investment companies entering into the market to swoop for these potential products would seem to be encroaching on this territory. Any products that proved to have potential in key therapeutic areas would then have a less attractive revenue potential for any would-be buyers.

Shuster instead suggested that Big Pharma has been happy to take a backseat and allow other companies to take a risk in the short term, permitting private investments to fill the financial hole needed to get assets over the line. In this way, there is less pressure for Big Pharma to spread its investments across too many assets, and they still retain the opportunity to swoop in to acquire the company or product should it prove to be successful.

With the economic environment being such a driver for these royalty deals, the question remains as to whether this trend will continue if the market becomes more friendly to traditional forms of investment. While a more open equity market could potentially see the need for this type of investment reduced, Shuster contends that it would not see completely disappear as a financing option.

“This investment product will be sustained at levels above where it used to be because now there is a group of lenders who know how to do these transactions, and who know the pros and cons of these transactions,” Shuster concluded. “These companies know how to fit this in with other equity and debt financing strategies that they may have—once you have the tool in the toolbox, you’re going to continue to use it.”

https://www.biospace.com/deals/royalty-financing-serves-as-lifeline-for-some-biopharma-companies-in-uncertain-market

Modivcare Credit Agreement Amendment and Cash Collections Update

 ModivCare Inc. (“Modivcare” or the “Company”) (Nasdaq: MODV), a technology-enabled healthcare services company that provides a platform of integrated supportive care solutions focused on improving health outcomes, today announced that it has amended its Credit Agreement, dated February 3, 2022 (as amended to date, the “Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent, along with other key lenders.

Key Amendment Highlights:

  • Total Net Leverage Ratio Covenant: Increased for the quarter ended September 30, 2024, to 6.50x from 5.25x.
  • Minimum Interest Coverage Ratio Covenant: Reduced for the quarter ended September 30, 2024, to 2.00x from 2.75x.

This amendment ensures in advance that the Company will maintain its compliance with all of its covenants under the Credit Agreement for the Company’s last completed fiscal quarter. In consideration, the Company has agreed to increase its interest rate margin by 25 basis points until it delivers the required financial statements and compliance certificate for the fiscal year ending December 31, 2024.

In addition to today's amendment, the Company will continue discussions with its bank group on a collaborative long-term relief amendment, anticipated to be finalized in the near term, intended to support ongoing compliance with its financial covenants.

The Company is pleased to announce that it has successfully collected all of the approximately $60 million in contract receivables that were previously reported as delayed (per Form 8-K filed on September 16, 2024). These amounts are in addition to normal course cash collections.

https://www.businesswire.com/news/home/20241001735164/en

Amdocs started at Buy by Stifel

 Target $100

https://finviz.com/quote.ashx?t=DOX&ty=c&ta=1&p=d

Recursion: FDA OKs Application for Degrader for Biomarker-Enriched Solid Tumors and Lymphoma

 

  • First program to combine Recursion’s end-to-end suite of AI-enabled active learning modules, resulting in target identification to IND enabling studies in under 18 months

  • Plan to initiate dosing of Phase 1/2 in Q4 2024 to evaluate REC-1245 in a biomarker enriched patient population, including patients with solid tumors and lymphoma

Gilead Signs Royalty-Free Voluntary Licensing Agreements for 6 HIV Prep Generics

 – License for Companies to Manufacture and Supply High-Quality, Low-Cost Versions of Lenacapavir for 120 Primarily Low- and Lower-Middle Income Countries –

– Gilead Plans to Price Product at No Profit to the Company and Supply Lenacapavir Until Generic Manufacturers Fully Support Demand –

– Agreements Also Cover Lenacapavir for HIV Treatment in Heavily Treatment-Experienced Adults with Multi-Drug Resistant HIV –

https://www.businesswire.com/news/home/20241001289353/en