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Study: Cannabis May Cut Headache And Migraine Pain In Half

Cannabis could be used to relieve headache pain, a new study from Washington State University suggests.

Inhaled cannabis reduced self-reported headache severity by 47.3 percent and migraine severity by 49.6 percent, according to new research.

The study, conducted by Washington State University and published online in the Journal of Pain, is the first to use data from headache and migraine sufferers using cannabis in real time.

Previous studies have asked patients to recall the effect of cannabis use in the past.

“We were motivated to do this study because a substantial number of people say they use cannabis for headache and migraine, but surprisingly few studies had addressed the topic,” said Carrie Cuttler, a Washington State University assistant professor of psychology, the lead author on the paper.

Researchers analyzed data from the Strainprint app, which allows patients to track their symptoms while using medical cannabis.

Data was collected from nearly 2,000 patients who used the app almost 20,000 times to track their headache and migraine pain before and after inhaling cannabis by smoking or vaping.

The study also found no evidence that cannabis caused “overuse headache,” a pitfall of more conventional treatments which can make headaches worse over time. However, researchers did see patients using larger doses of cannabis over time, indicating they may be developing tolerance to the drug.

Cuttler did caution that there could be a placebo effect, and that further research is needed.

“I suspect there are some slight overestimates of effectiveness,” said Cuttler. “My hope is that this research will motivate researchers to take on the difficult work of conducting placebo-controlled trials.”


U.S. Banking System Now Open to Hemp Businesses

Federal financial regulatory agencies are clarifying that banks no longer have to take extra steps to track accounts for hemp-related businesses.

Before hemp and its derivatives were federally legalized under the 2018 Farm Bill, financial institutions were required to file suspicious activity reports (SARs) for accounts associated with the crop because it was a Schedule I controlled substance treated the same as marijuana.

But the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency, as well as the Conference of State Bank Supervisors, issued a statement on Tuesday updating banks on the legal status of hemp.

“Because hemp is no longer a Schedule I controlled substance under the Controlled Substances Act, banks are not required to file a Suspicious Activity Report (SAR) on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations,” the memo states. “For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants.”

In essence, the financial agencies said that while banks don’t have to accept hemp accounts, if they do, those clients shouldn’t be treated any differently than customers from any other legal industry.

“When deciding to serve hemp-related businesses, banks must comply with applicable regulatory requirements for customer identification, suspicious activity reporting, currency transaction reporting, and risk-based customer due diligence, including the collection of beneficial ownership information for legal entity customers,” they wrote.

Federal guidance on dealing with marijuana businesses, which was outlined in a 2014 Treasury Department memo, remains in place, the letter added. Banks must still file SARs for those firms, regardless of the legal status of cannabis under state law.

Senate Majority Leader Mitch McConnell (R-KY), a chief proponent of hemp legalization, took credit for the release of updated guidance. In April, he and Sen. Ron Wyden (D-OR) sent a series of letters to federal financial regulators requesting clarification on the legality of servicing hemp businesses.

“Today’s multi-agency announcement represents continued progress as we work to ensure hemp is treated just like any other legal agricultural commodity,” McConnell said in a press release on Tuesday. “Even after President Trump signed my initiative in last year’s farm bill to fully legalize hemp and remove it from the list of federally controlled substances, I heard from hemp producers around Kentucky about their ongoing challenges, including the lack of access to the financial system.”

“I’m proud federal banking regulators agreed to my request to issue new guidance that affirms hemp’s legality,” he said. “I look forward to more Kentucky producers having the ability to grow their hemp businesses with the help of the Commonwealth’s financial institutions.”

Wyden also cheered the development.

“Hemp was legalized almost a year ago, yet Oregon farmers and producers have been forced to ride the roller coaster of uncertainty,” he said in a press release. “Slowly but surely federal regulators are starting to catch up, and these new banking guidelines are an important step toward giving hemp businesses the certainty they need. The work doesn’t stop here, however, and more must be done to make sure hemp businesses are treated fairly and allowed to fully realize this legal crop’s economic potential in our state and nationwide.”

The American Bankers Association (ABA) said that the regulators’ hemp move has been “long sought” by the financial services industry.

“We are pleased that the guidance also notes that bank customers are responsible for complying with regulatory requirements surrounding hemp, not the banks who serve those customers,” ABA President Rob Nichols said. “We appreciate the steps regulators have taken today to clarify regulatory expectations for banks, and we look forward to working with them as they develop additional guidance.”

Though financial institutions are still required to file SARs for marijuana businesses, the rate of those reports being submitted seemed to level off in the last quarter.

It’s possible that’s connected to industry expectations about the potential passage of a bipartisan bill that would shield banks servicing marijuana firms from being penalized by federal regulators.

While the House overwhelmingly approved the legislation in September, that was months later than some had anticipated, and it’s possible banks had been holding off on accepting new cannabis clients and were discouraged that lawmakers hadn’t acted prior to the summer recess, as was expected.

It’s not clear whether the bill has enough support to clear the Senate, but the chair of that chamber’s Banking Committee has said he’s interested in holding a vote on it in his panel before the year’s end—and that he’d also like to see certain changes made.

Should the cannabis banking bill ultimately be enacted, it’s likely that financial services providers would eventually see a similar update on SAR reporting guidance for marijuana companies.


Blowout jobs report means Fed may sound even less likely to move on interest rates

November’s surprisingly strong jobs report makes it less likely the Fed will move to cut interest rates, and it could sound even more hawkish when it meets next week.

A so-called hawkish Fed is one that is more likely to move to tighten policy than make it looser by cutting interest rates or taking other measures. After three cuts this year, the Fed has signaled a neutral stance, where it is on hold but watching economic data.

The 266,000 jobs added in November is an important number since it defies expectations, at least for one month, that the labor market is slowing down. The report was much better than the 187,000 jobs expected by economists.

The end of the GM strike helped inflate the number, with 41,300 jobs added in motor vehicles and parts, but the overall gain in payrolls was still about 100,000 better than expected by many economists. Manufacturing gained 54,000 overall.

“The bottom line is the labor market is cooking. It clearly says the Fed should not do anything more. The Fed can now sit back on the shelf, not have to worry about having to be pestered about lower rates,” said Ward McCarthy, chief financial economist at Jefferies.

Stocks jumped and bond yields initially rose after the jobs report was released. The fed funds futures market moved to erase one rate cut that was priced in for next year, and the market was pricing just about 20 basis points of one quarter point cut in morning trading, according to Michael Schumacher, director of rates at Wells Fargo Securities.

“The Fed was made more of a sideshow with this number,” said Schumacher. “You think back to [Fed Chairman Jerome] Powell’s comments of the last month or two. It seems to me he doesn’t want to cut again. This takes away a little more impetus to cut.”

The focus of the market in the week ahead is likely to be more riveted on trade than the Fed, because of President Donald Trump’s looming Dec. 15 deadline on $156 billion in new tariffs on China, if there’s no trade deal.

Strategists expect the Fed to leave its economic forecasts and interest rate outlook little changed when it releases new projections after its Wednesday meeting. The Fed has emphasized that it is on hold as long as the economy continues to show a moderate pace of growth and low inflation.

“They’re pretty comfortable where things are at, and as long as we get a trade truce, they’re fine,” said Diane Swonk, chief economist at Grant Thornton. “There were people who wanted to sound a lot more hawkish at that last meeting. They did get two dissenters not wanting to cut rates further and many presidents going into the meeting saying we didn’t need an additional cut.”

Swonk said the jobs report showed the impact from trade, and that will be an important topic for the Fed. The gain in manufacturing, an area hit by trade wars, is still lagging, with most of the gains coming from the GM workers.

“Forty percent of the gains were in health care and leisure and hospitality, with food services driving it. Anything not affected by trade is holding up,” she said, but she added that retail is weak as online retail continues to take jobs from brick-and-mortar stores.

Ian Lyngen, head of fixed income strategy at BMO, said while it is unlikely, the strong jobs report has raised the question of whether the Fed would actually consider raising interest rates next year.

“I still think they cannot hike as long as the labor market is strong and growth is okay, but they don’t have inflation,” said Lyngen. “Inflation is a bigger deal to this Fed than what’s going on in a very tight labor market.”

Swonk said the Fed is still more likely to move to cut than raise interest rates.

“I think they will wait and see. I think much depends now whether the tariffs are rolled back. The biggest issue for the Fed is do we get more of a detente in the trade war that allows them to firmly stand on the sidelines,” Swonk said.

John Briggs, NatWest Markets head of strategy, said traders were already expecting a hawkish Fed at the meeting next week because they had expected no change in the Fed’s rate cut forecast. Now, the strong jobs number could make the Fed’s tone sound even more so, when Powell briefs the media after the meeting Wednesday afternoon.

“We expect a good holiday season, and the job market just continues to power ahead and support the consumer,” said Briggs. “That’s been the story of 2019, and we’re finishing with the same theme — weak manufacturing and a resilient consumer.” Powell should reinforce that message.


Central Banks Set to Keep Pumping Out Cash Through 2020

Major central banks are set to keep pumping money into financial markets and economies next year, although at a slower pace than recently.

The combined monthly balance-sheet expansion of the Federal Reserve, European Central Bank and Bank of Japan will end this year at the highest level since 2017 as each sucks up bonds either to boost their economies or ease strains in money markets, according to Bloomberg.

While the rate of buying will peak at the turn of the year and slow throughout 2020, the expansion still marks a reversal from the start of this year when the total balance sheet was shrinking, with the Fed actively paring its holdings and only the BOJ adding purchases. Debatable is how potent the buying will prove as the world economy remains threatened by the U.S.-China trade war.

The Bloomberg calculations show the combined balance-sheet growth of the three biggest central banks will reach almost $100 billion a month by the end of this year. The spike will fade somewhat in 2020, reaching about $50 billion by the middle of next year.

One difference from previous episodes of QE is that although the ECB and BOJ are actively seeking to stoke economic growth by restraining market borrowing costs, the Fed argues it’s purchasing Treasury bills at an initial monthly pace of $60 billion because of recent turmoil in money markets.

“One force which is back in evidence is central-bank liquidity,” Matt King, global head of credit product strategy at Citigroup Inc., wrote in a recent note to clients. “Despite the Fed’s protestations that its adjustment to bank reserves is not QE, its turnaround this year has helped drive global central bank securities purchases from 10-year lows to decade-average levels.”

Nevertheless, investors are welcoming the extra liquidity. That’s despite Fed Chairman Jerome Powell’s protests that the new U.S. purchases are “in no sense” quantitative easing because they’re focused on very short-term assets and aimed at alleviating a cash shortage in the money markets. The MSCI World Index of stocks is up 21 this year.

“The bulk of the effect is psychological,” said Stephen Stanley, Amherst Pierpont chief economist. “The Fed is expanding the balance sheet. The public sees this as an easier monetary policy even as the Fed insists that it is not a change in policy, and thus asset prices rise.”

Whether the bigger balance sheets will actually power economic demand is still in doubt though. Global growth remains modest despite a decade of ultra-loose monetary policy.

“There is plenty of liquidity sloshing around but firms are reluctant to invest,” said Chua Hak Bin at Maybank Kim Eng Research Pte. in Singapore, pointing to the U.S.-China trade war as a source of uncertainty.

Ben Emons, managing director for global macro strategy at Medley Global Advisors in New York, is more optimistic. He argues that the renewed burst of QE will be more effective than previous cycles given the world economy isn’t in crisis, and so the liquidity is more likely to spur spending.

At the Fed, the balance sheet is growing faster than when it was first on its way to $4 trillion six years ago. The institution had been gradually shrinking its massive securities holdings, but the process drained too much cash out of the system, contributing to a spike in market rates in September. It reversed course to restore ample liquidity and officials have uniformly argued it’s not aimed at affecting asset prices.

Economists at Societe Generale SA say it’ll be less clear cut whether the new round of buying amounts to QE when the Fed replaces temporary funds with permanent purchases which could total $200 billion. The strategy of swapping maturing agency mortgage backed securities with U.S. Treasuries may also have QE-style effects, they said in a report to clients this month.

Meantime, the BOJ’s balance sheet, which has expanded rapidly since Governor Haruhiko Kuroda launched massive monetary easing in 2013, has grown 4.2% over the past year to 577 trillion yen ($5.3 trillion) as of Nov. 20, well beyond the economy’s size.

The pledge to pump cash into the economy until inflation stays above 2% in a stable manner means there’s no prospect of it shrinking any time soon. Inflation stripped of food and energy prices grew just 0.4% last month.

Over at the ECB, President Christine Lagarde is taking on a balance sheet that has soared to almost 4.7 trillion euros ($5.2 trillion), or four times the size it was prior to the global financial crisis. Much of the increase has come from quantitative easing, which spent 2.6 trillion euros from 2015 until the end of last year, and which has just resumed at 20 billion euros a month to combat renewed economic weakness.

Others may even join in. Reserve Bank of Australia Governor Philip Lowe this week delivered a speech which highlighted a reluctance for quantitative easing, yet laid out the conditions required for the unorthodox measures as well as what the RBA would buy.