2025's Best (And Worst) US States For Sound Money

Authored by Jp Cortez via The Mises Institute,

The newly-released 2025 Sound Money Index has identified Wyoming, South Dakota, and Alaska as the states with the most favorable policies toward constitutional sound money, while Vermont, Maine, and California take the most hostile stances.

Released annually by the Sound Money Defense League and Money Metals Exchange, the Sound Money Index is a comprehensive scorecard evaluating how each US state promotes or impedes sound money policies. Ranked policies include sales, income, and gross revenue taxes connected with precious metals, state affirmation of gold and silver as money, strengthening protections of gold and silver clause contracts, and state precious metals depositories.

Additional criteria include issuing or investing in gold bonds, inclusion of physical gold or silver in state pension or reserve funds, state mechanisms to accept and remit taxes and other payments in gold and silver, and crippling regulatory burdens imposed on precious metals dealers and investors.

The 2025 Index saw several states improve their rankings dramatically after having enacted pro-sound money tax legislation in 2024. Nebraska’s elimination of capital gains taxes on precious metals propelled it from 22nd to 8th place, while Alabama leapt almost twenty spots from 28th to 9th place. Both of these states had already eliminated their state sales tax on purchases of gold and silver coins, bars, and rounds, so removing income taxes on sales was the next logical step. 

Louisiana jumped from 17th to 12th place after Governor Jeff Landry signed a bill reaffirming gold and silver as legal tender in the state. Wisconsin and New Jersey also saw major improvements from their previous year’s ranking after repealing sales taxes on precious metals. Wisconsin climbed from 44th to 26th place, and New Jersey moved from 49th to 39th.

“Money Metals has spent a full decade promoting state-level sound money reforms, and I’m proud to say these bills tend to be among the most popular proposals considered in recent legislative seasons,” said Stefan Gleason, CEO of Money Metals.

“For example, today there are 45 states that have partially or fully exempted sales taxes on precious metals.”

Only five states - Kentucky, Maine, Vermont, New Mexico, and Hawaii - continue to tax precious metals purchases, despite the impact on individuals, businesses, and families seeking a vehicle through which to preserve the purchasing power of their savings. However, not all precious metals sales tax exemptions are created equal.

Wisconsin Governor Tony Evers signed a full exemption on purchases of gold and silver from the state sales tax without any restrictions. The measure did not include an exemption for platinum and palladium. 

The New Jersey bill ultimately signed by the governor does not exempt purchases of “investment coin,” defined as,

…any numismatic coin manufactured of gold, silver, platinum, palladium, or any other metal, including non-precious metals, and having a fair market value of not less than $1,000. ‘Investment coin’ shall not include jewelry or works of art made of coins, nor shall it include commemorative medallions.

Inclusion of these two limited exemptions earned New Jersey only 13 points out of a possible 18 in the sales tax categories of the 2025 Sound Money Index, while Wisconsin’s partial exemption earned the state only 14 points.

Several other states also considered capital gains exemptions on precious metals this year, setting the stage for more sound money reforms in the coming years.

“The Sound Money Index continues to hold states accountable for policies that impact Americans’ ability to protect themselves from inflation and financial instability,” said Jp Cortez, Executive Director of the Sound Money Defense League. Cortez continued, "as the Federal Reserve note’s purchasing power continues to fall, Americans need more options to protect their savings. The Sound Money Index tracks the sound money movement, calling attention to states that still shackle gold and silver with regulation and taxes, and highlights the forward-thinking states that enable the metals to function as savings and money."

Tyler Durden Tue, 12/17/2024 - 15:05

Trump Might Reverse 'Very Stupid' Long-Range Strikes On Russia

Authored by Dave DeCamp via AntiWar.com,

President-elect Donald Trump suggested at a press conference at Mar-a-Lago on Monday that he could reverse President Biden’s decision to support long-range missile strikes on Russian territory.

Trump said it was a "big mistake" for the Biden administration to greenlight the escalation without asking him what he thought. When asked if he might reverse the decision, the president-elect said, "I might, yeah. I thought it was a very stupid thing to do."

The comments mark the second time in recent days that Trump expressed his concern over the long-range strikes that Ukraine has launched using US ATACMS missiles and British Storm Shadow missiles.

In an interview with Time Magazine that was published last week, Trump said that he "vehemently" disagreed with Biden’s decision. The Kremlin noted Trump’s comments and said Russia agreed with the president-elect.

"The statement in itself is fully in harmony with our position. That is, our visions of reasons behind the escalation coincide. And, of course, we like that," said Kremlin spokesman Dmitry Peskov.

Biden signed off on long-range strikes in Russia despite Moscow making it clear the escalation would risk nuclear war. In response to the step, Russian President Vladimir Putin formally changed Russia’s nuclear doctrine, which lowered the threshold for the use of nuclear weapons.

At his press conference, Trump also said that Ukrainian President Volodymyr Zelensky should be ready to make a deal with Russia to end the war. "He should be prepared to make a deal. That’s all. Too many people being killed," he said.

BREAKING: Biden just authorized the use of U.S.-supplied long-range missiles by Ukraine for strikes inside Russia.

In September, Putin said this decision would mean that "all NATO countries are officially at war with Russia."

The Dems want WWIII before Trump is sworn in. pic.twitter.com/bkGcL6C5tu

— Cillian (@CilComLFC) November 17, 2024

Trump campaigned on ending the proxy war but hasn’t articulated how he will do that. When asked if he would pressure Ukraine to cede territory, Trump wouldn’t give a direct answer.

Tyler Durden Tue, 12/17/2024 - 14:45

Some Honesty About Inflation

Authored by Jeffrey Tucker via The Epoch Times,

Inflation numbers came out last week. For once, we got some honesty from the mainstream media.

“Growing inflation poses challenges for the Fed,” said the WSJ.

“Progress on inflation stalled, complicating Republicans’ plans,” said the NYT.

That’s a major change in the tune from “it’s just transitory.”

That was Janet Yellen, four years ago!

It was a grim number, an annualized increase of 2.7 percent, which is still far over the target rate.

Those of us who watch real-time numbers knew it was coming. We’ve seen a heating up for three months. Right now, those numbers are showing a 3 percent rate of annualized inflation.

It’s been a four-year trend now toward ever higher prices, resulting in a dramatic loss of purchasing power in terms of goods and services. In this time, the dollar has lost a minimum of 25 cents of value or as much as double and triple that depending on the purchase. The result has been a loss of real income, hitting the working class and poor the hardest.

At last we are getting some honesty, probably now that it is a problem that Trump will inherit. Plenty of people out there are happy about this and have hopes that the problem with vex him as it did Biden.

We did not hear this on the campaign trail but there is not much a president can do about inflation in the short term. The usual lag between cause and effect on inflation is 12 to 18 months.

Unplugging the money-printing machine is a fix down the line. But in the short term, it has a potentially deleterious effect on macroeconomic stability that can result in obvious recession. And right now, we see all the signs of a reacceleration taking place.

The money stock as measured by M2 bottomed out in October 2023 but has since increased by $1.9 trillion. That’s a dramatic turn that only adds fuel to the inflationary fire. It’s not just the deliberate policy to loosen up via interest rate cuts but also a change in velocity combined with more bank lending. None of it looks good for stabilizing the dollar in terms of domestic purchases.

(Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)

The sticky price index has never shown much in the way of victory over the worst inflation in nearly half a century. Certainly there has never been a reason to relax, much less change posture from a restrictive policy to a more liberal one. It currently stands at 3.9 percent, which is nearly double the target rate. That’s an incredibly bad rate of inflation to start a new presidential term.

(Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)

That the central bank is primarily responsible for inflation is not unknown. The trouble with putting an end to it—which would actually be very easy—is mainly a political one. Every president wants lower interest rates in order to drive national output. They don’t like a central bank policy that is restrained with higher rates. So they typically push for lower rates.

Lower rates create conditions for more credit expansion and that adds to the money stock and fuels inflationary pressure for which the president is held responsible. However, he is also held responsible for recessions. That creates a terrible dilemma for an incoming administration that had made two grand promises: to boost economic growth and end inflation.

Absent huge structural changes in regulation and spending, it is not likely both can happen at once.

When this dilemma confronted Ronald Reagan upon taking office in 1981, the answer was to endure a recession for 18-24 months to create the conditions for future economic growth. But it was a true war against the clock, with a huge scramble to boost growth while stopping inflation. They didn’t quite make it in time and lost substantially in the midterm elections of 1982. The recovery finally arrived in time for Reagan to win a second term.

In those days, officials were much more honest with the public. It was frankly admitted that a recession was a necessary condition for renewed growth. But it has been 40 years since anyone in a position of official influence has said anything remotely like that.

We have an added problem now that full recovery from the economic calamity of 2020 has never really happened. Job openings soared after reopening but those days are over, and we’ve been on a two-year slide. Moreover, the Philadelphia Fed is dropping some truth about jobs numbers from earlier this year. To summarize: they were fake.

Looking back at output numbers with a realistic estimate of inflation reduces GDP growth in real terms to recessionary levels, though it has not been widely admitted.

Where does that put the incoming Trump administration in relation to Fed policy? It’s a genuine dilemma. Despite all the pretenses from the top that the Fed is using informed science and access to granulated data to guide its decision-making, the reality is that Fed chairman Jerome Powell has no idea what to do now. He can continue the rate-cutting and reignite inflation or freeze rates now and risk the ire of the incoming administration.

Regional presidents of Federal Reserve banks around the country are divided on what should happen. It’s a balancing act because the labor market is weak and getting worse even as inflation is worsening too. Typically, the old models on which they used to rely posited that labor markets operate in an inverse relationship with price pressure. That pattern is not part of the present reality.

One possibility is that dramatic spending cuts of the federal budget could dampen inflationary pressure. That is because a reduced rate of debt creation takes pressure off the Federal Reserve to enter the bond market to support dollar-denominated debt. Part of the job of the Department of Government Efficiency (DOGE), which is not an official agency, is to create public support for dramatic spending cuts.

Maybe that works but will it be enough? Cutting $2 trillion out of the federal budget might sound easy but nothing like this has happened in a century of government policy. Is the public sufficiently alarmed about a fiscal crisis that it can endure extreme cuts in public services?

There is no way that cuts on that level will not be felt. The Washington bureaucracies backed by the press will scream about impending disaster, starving widows and orphans, slowed down passports, cuts in staff at monuments and federal parks, and all the other usual tropes. DOGE will need to be prepared to call out all the propaganda as nothing but flimflam designed to preserve the status quo.

What we really need is a return to honesty in economics, along with an admission that we cannot defeat the inflation we despise without a period of pain. I’m aware that no one likes to speak this way and that the political culture is hyper-intolerant toward long-term solutions. The expectations for the incoming Trump administration is that it will deploy some magic cure to lower real incomes, deep indebtedness, and a failing job market. Nothing like that exists.

Economics is about wealth creation but it is also about accounting. Optimism and political exuberance are wonderful but they cannot substitute for hard choices. And that includes some measure of pain before we can get on track toward renewed economic growth. That is a lesson that the incoming Trump administration can learn from Reagan’s experience in 1981.

*  *  *

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Tue, 12/17/2024 - 14:25

"Final Big Market Cap Event Of Year": All Eyes On Novo's CagriSema GLP-1 Results

The next big market cap event for Novo Nordisk is the top-line efficacy results for its experimental obesity drug, CagriSema, with data from a late-stage trial expected by the end of the year. 

Novo previously stated that CagriSema could potentially lead to 25% weight loss, compared with Wegovy's 15% weight loss.

In early November, Martin Holst Lange, Novo Nordisk's head of development, told Reuters that data from its Phase 3 trial of CagriSema is expected to reflect higher weight loss: "There has been no change in our confidence level." 

Goldman's Jack McFerran told clients Tuesday about the incoming data from Novo and told them to expect big moves in stock price.

McFerran cited Goldman's James Quigley, who is the "most bullish on the street, 27-28% weight loss." 

More from McFerran:

James Quigley is the most bullish on the street, 27-28% weight loss. The key chart to understand his view is ex9: it shows the Phase 1, the red solid line with red dots, the important analysis is that this study was not optimised for (1) male / female (2) BMIs and (3) life style modifications. The impact was more men, lower BMI starting points. He expects P3 to have higher BMi starting, more women, more follow ups. This is important when contextualised with Ex9.

The bottom dotted line.. extrapolates Ph1 using the solid orange line ie for the rest of the trial same as placebo.. conservative and the line above is how do we get from Ph1 to mgts 25% guide.. i.e. this would have to be one of the worst Ph3s. Street are at 25% (with mgt) we are 27-28%. 

The debate beyond the what digit this week debate, is will the consumer care about 25%, 26%, 28%, i.e. is this differentiated enough vs what is already in the mkt, to be super product. 

McFerran cited weight-loss outlooks and expected stock moves from Goldman's Seth James:

• Weight Loss: 23% and below – disaster, stock down 10-15%.

• Weight Loss: 24%down 5-10% but will get bought.

• Weight Loss: 25% - relief – stock up 5-10%

• Weight Loss: 26% - Up 10%

• Weight Loss: 27% - Up 15%

• Weight Loss: 28% - Up 20%

More from McFerran: 

The press release will likely be this week and only disclose the headline weight loss numbers for CagriSema and maybe Cagrilinitide monotherapy and make qualitative comments on the tolerability profile. Weight loss and tolerability for CagriSema arm is the only thing we will care about, on weight loss.

From Redditors...

Goldman recommends Novo as a "Buy" based on the expectation of "positive Phase 3 data for CagriSema as an important mechanism to attenuate the impact of the semaglutide EU/US patent expiries in 2031/32."

The analysts have a $148 12 month price target, which is about a 36% premium to the upside as of early Tuesday cash. 

Meanwhile, Jefferies analysts recently noted that consensus sales surrounding CagriSema are "overly optimistic" and don't factor in any potential revenue slide for Ozempic and Wegovy.

All eye on CagriSema's results ahead of the holidays. 

Tyler Durden Tue, 12/17/2024 - 13:40

GOP Report: Liz Cheney Should Be Investigated By FBI Over Jan. 6 Investigation

Authored by Casey Harper via The Center Square,

A new Republican oversight report accuses former Congresswoman Liz Cheney of colluding with witnesses in the Jan. 6 Select Committee investigation that she oversaw.

The bombshell report released Tuesday said Cheney should be investigated by the FBI for possible criminal activity for her role in the first committee, which was led by Democrats in the immediate aftermath of the conflict at the Capitol after now President-elect Donald Trump left office in 2021.

The Committee on House Administration's Subcommittee on Oversight Chairman Barry Loudermilk, R-Ga., released the report, his second major report on the Jan. 6 storming of the Capitol.

From the report:

Based on the evidence obtained by this Subcommittee, numerous federal laws were likely broken by Liz Cheney, the former Vice Chair of the January 6 Select Committee, and these violations should be investigated by the Federal Bureau of Investigation. Evidence uncovered by the Subcommittee revealed that former Congresswoman Liz Cheney tampered with at least one witness, Cassidy Hutchinson, by secretly communicating with Hutchinson without Hutchinson’s attorney’s knowledge. This secret communication with a witness is improper and likely violates 18 U.S.C. 1512. Such action is outside the due functioning of the legislative process and therefore not protected by the Speech and Debate clause.

The Federal Bureau of Investigation must also investigate Representative Cheney for violating 18 U.S.C. 1622, which prohibits any person from procuring another person to commit perjury. Based on the evidence obtained by this Subcommittee, Hutchinson committed perjury when she lied under oath to the Select Committee. Additionally, Hutchinson was interviewed by the FBI as part of its investigation into President Trump. This Subcommittee sought a copy of the FBI report 302, documenting this interview and Hutchinson’s statements, but the FBI has refused to produce this vital document. The FBI must immediately review the testimony given by Hutchinson in this interview to determine if she also lied in her FBI interview, and, if so, the role former Representative Cheney played in instigating Hutchinson to radically change her testimony.

Cheney has yet to publicly responded to the report.

Trump recently suggested some committee members should face jail time. 

Sen. Bernie Sanders, I-Vt., told media outlets this week that President Joe Biden should issue preemptive pardons for those members, something he is reportedly considering.

In a statement first reported by The Hill responding to Trump's jail threat, Cheney focused on Trump's role in the Jan. 6 storming of the Capitol, not her own defense.

The report raised a litany of concerns and questions about how the Jan. 6 investigation was carried out, how witnesses may have been pressured or influenced, and how records, files and other evidence was handled.

“Over the past twenty-four months of this investigation, my subcommittee staff have faced incredible obstacles in pursuit of the truth; missing and deleted documents, hidden evidence, unaccounted for video footage, and uncooperative bureaucrats,” the report said.

Loudermilk’s first report examined the security lapses at the Capitol.

After Loudermilk and his team examining thousands of hours of video and millions of pages of documents, interviewing dozens of witnesses and multiple hearings, the report found the Jan. 6 event was a result of security lapses and bad decision-making at several levels of government.

“This report reveals that there was not just one single cause for what happened at the U.S. Capitol on January 6; but it was a series of intelligence, security, and leadership failures at several levels and numerous entities,” the report said. “Even amid multiple failures, there were two common elements that significantly contributed to the security issues: an excessive amount of political influence on critical decisions, and a greater concern over the optics than for protecting life and property.”

Tyler Durden Tue, 12/17/2024 - 12:40

Asking Rents Fall 0.7% To Lowest Level Since March 2022

By Mark Worley of Redfin

The median U.S. asking rent fell 0.7% year over year in November to $1,595, the lowest level since March 2022. Rents were down 1.1% on a month-over-month basis.

The median rent is now 6.2% lower than when it hit an all-time high of $1,700 in August 2022.

Highlighting improved rental affordability, November marked the 19th consecutive month where the median asking rent price per square foot (PPSF) fell year over year, down 2.2% to $1.79. That’s the first time the median PPSF has been below $1.80 since November 2021. 

While the rental market has remained essentially flat over the past two years, rents have started to tick down slightly in recent months, thanks in part to the record number of new apartments that have been completed this year. 

Nationally, apartment completions rose 22.6% year over year to the highest level in over 12 years in the second quarter. As a result, the vacancy rate for buildings with five or more units rose to 8% in the third quarter, the highest level since early 2021.

“Renters in areas where construction has boomed are in a sweet spot right now. Affordability is improving as rents fall and wages rise, and there is increased choice with more and more new apartment buildings opening,” said Redfin Senior Economist Sheharyar Bokhari. “As construction starts to slow, rents will eventually tick back up, but 2025 is shaping up as a renter’s market with potential for the affordability gap between buying and renting to widen.”

Rents for 0-1 bedroom apartments fall to three-year low

With a major boost in supply, November marked the fifth consecutive month that asking rents fell across all bedroom counts.

Median asking rents for 0-1 bedroom apartments fell 1.7% year over year to $1,450 a month, the lowest level since November 2021. Rents for 2 bedroom apartments fell 1.1% (to $1,671) and 3+ bedroom apartments fell 2.3% (to $1,955).

On a price per square foot basis, the decline was more apparent, with 0-1 bedroom apartments falling the most (-2.5%), followed by 3+ bedroom apartments (-2.4%) and 2 bedroom apartments (-1.2%).

Austin rents drop 12%, leading a number of Sun Belt metros seeing significant declines

As has been the case for most of 2024, of the 44 major metros Redfin analyzes, Sun Belt metros saw the most significant declines in median rents, led by Austin, TX (-12.4%), Tampa, FL (-11.3%), Raleigh, NC (-8.4%), Jacksonville, FL (-7.5%) and Nashville, TN (-7%). 

Major Metros With Highest Rent Decreases

Rents rose the most in Midwest and on the East Coast metros, where there has been less new construction compared to the Sun Belt. 

Cleveland posted the biggest increase (10.6%), followed by Louisville, KY (10.2%), Baltimore (9.4%), Washington D.C. (9.4%), and Providence, RI (9.3%).

Major Metros With Highest Rent Increases

 

Tyler Durden Tue, 12/17/2024 - 12:25

Turley To Debate Karpf On ZeroHedge: Free Speech, Musk, And X

https://t.co/kikIXu9FdY

— zerohedge (@zerohedge) December 17, 2024

Elon Musk’s purchase of Twitter in late 2022 caused a media shit storm with calls for imminent bankruptcy, the infamous ADL shakedown, and disinformation alarm bells in the beltway think tank community.

Duking it out two years after the acquisition will be George Washington Professors Jonathan Turley and David Karpf. Each will join moderator Gene Epstein, director of The SoHo Forum, for a 90-minute debate broadcast live to the ZeroHedge homepage.

On the docket will be free speech, censorship, disinformation, and the government’s proper role in all this. The resolution: Elon Musk’s purchase of Twitter was a net positive for society. 

Turley for the affirmative will be making the free speech absolutist’s case in favor of Musk’s management style. The professor has lauded Musk as “the most consequential figure in free speech of our generation”:

Jonathan Turley on Elon Musk's firm stance for free speech:

“Love him or hate him, Elon Musk is, without question, the most consequential figure in free speech of our generation. I think he has done more for free speech than any living person today.

In some ways, he actually… pic.twitter.com/Fz9OFa5yzl

— ELON FACTS (@ElonFactsX) December 5, 2024

A long-time 1A bull, Turley recently authored The Indispensable Right: Free Speech in an Age of Rage.

The Anti-Elon case:

Karpf — no longer on X — posted to “Substack Notes” that Musk had broken election law and committed “glaring violations” of Federal Trade Commission (FTC) consent law. Karpf referred to him as a “ketamine-addled chump” and predicted in March of 2023 that X/Twitter would be bankrupt within 6 months.

“Musk offered to buy Twitter on a (drug-addled) lark… Zombie Twitter will stumble along at a financial loss until Elon can find a villain to hang its failure on. “

FTC head Lina Khan was accused by Rep. Jim Jordan and the House Judiciary Committee of “blatant political harassment of Musk and Twitter” when Khan’s agency appeared to fast-track a probe into the billionaire and his new company immediately following his acquisition.

In this evening’s debate, Karpf will be arguing that Musk’s purchase and management style of Twitter has been a net negative for society.

Tune in live on the top of the ZeroHedge homepage and our X, YouTube, and Rumble accounts tonight at 7pm ET.

Tyler Durden Tue, 12/17/2024 - 12:05

"We're Almost There": Congress Scrambles To Pass Stopgap Funding Bill Before Friday

With less than four days to avoid a government shutdown, House Speaker Mike Johnson, (R-LA), and congressional leaders are working to finalize a bipartisan short-term funding bill, though delays and mounting frustrations within the House Republican caucus are complicating the effort.

Johnson, who initially expected to release the text of the bill over the weekend, then on Monday, said Tuesday that it would be unveiled by the end of the day.

"We’re almost there," Johnson told reporters Tuesday following a press conference. “We do expect text today.”

The proposed legislation would keep the government funded through March 14 while addressing specific priorities, including disaster relief and $10 billion in assistance to farmers. Johnson emphasized that he intends to honor the House’s 72-hour rule, which requires time for lawmakers to review the bill before a vote. However, this would push the process close to the Friday midnight deadline for avoiding a shutdown.

Johnson said he remains focused on securing broad Republican support for the measure - which we're sure will contain more pork than a barbecue pit.

Senate Leaders Echo Urgency

In the Senate, Majority Leader Chuck Schumer, (D-NY), struck a cautiously optimistic tone but stressed the need to finalize the agreement quickly.

"There continues to be good progress, but appropriators are still working on finalizing an agreement," Schumer said Tuesday on the Senate floor. "Obviously, we’re getting closer to the December 20 deadline, so time is of the essence for Republicans to reach an agreement with us that we can act on quickly."

Both chambers of Congress are facing pressure to wrap up funding negotiations before they adjourn for the Christmas, Hanukkah, and New Year holidays.

Frustration Grows Among House Conservatives

While negotiations continue, conservative House Republicans are growing increasingly critical of Johnson’s handling of the bill and its timeline.

"This is not the way to do things," Rep. Chip Roy, (R-TX), said in a post on X.

1) We (members of Congress) haven’t seen the text yet… 2) it’s not clear it’s intended effect would work - I’ve heard many in Pharma CHEERING they’ll make MORE money… 3) PBM’s are part of the problem, not the whole problem… 4) This is not the way to do things. https://t.co/TBSM3L225a

— Chip Roy (@chiproytx) December 15, 2024

Rep. Eric Burlison, R-Mo., delivered a scathing critique, calling the emerging legislation “a total dumpster fire” and expressing deep disappointment in Johnson’s leadership.

"I think it’s garbage," Burlison told reporters. "This is why I ran for Congress, to try to stop this. And sadly, this is happening again... I’m disappointed. I think that he can do better. He can communicate better. The fact that we haven’t seen the language today and we’re supposed to vote on it this week is unacceptable.”

When asked if the situation makes him hesitant to support Johnson in the upcoming January 3rd vote for House speaker, Burlison deflected, saying, "That I won’t say."

Johnson, however, brushed aside concerns about his leadership.

"I’m not worried about the speaker vote," Johnson told reporters. "We’re governing. Everybody knows we have difficult circumstances. We’re doing the very best we can under those circumstances."

Leadership Focused on Farmers, Disaster Relief

House Majority Leader Steve Scalise, (R-LA), offered support for Johnson’s efforts, underscoring the bill’s priorities while projecting optimism about the path forward.

"We plan to pass a bill to get the government funded," Scalise said, "and ensure that we take care of disasters and our farmers here in America."

Looking ahead, Scalise emphasized the urgency of finishing the week’s work while expressing hopes for a smoother 2024.

"We have a lot to do the rest of this week, but we all look forward to getting back home to our families and enjoying a great Christmas as we get ready for what will be a very busy and productive New Year," Scalise said, standing alongside Johnson.

Stay tuned for updates...

Tyler Durden Tue, 12/17/2024 - 11:45

Trump's Return To The World Stage Is Already Claiming Numerous Victims

By Elwin de Groot, head of macro strategy at Rabobank

Trump’s return to the world stage – even though his official inauguration is on January 20 – is already claiming numerous victims. Arguably, even the fall of both the French and German government in recent months have been given some impetus by the political events in the US. But one of the clearest victims appears to be Canadian Finance Minister Chrystia Freeland, who resigned yesterday, citing differences with PM Trudeau’s Cabinet over how to prepare for a looming trade war with its big neighbour. Observers say her comments in her resignation letter on “eschewing political gimmicks” likely refer to the temporary tax cuts and pay-checks planned by the government to support consumption. She sees handing out money as fiscally imprudent. Given that she announced her decision just hours before she was due to speak in Parliament on the fiscal and economic outlook, markets reacted with a fall in the Canadian dollar (depreciating some 0.4% vis-à-vis the US dollar) and rising bond yields (some 7bp on the 10y note).

Meanwhile, data this morning showed that UK regular wages increased by 5.2% annually in the three months to October, up from 4.9% previously and surpassing the consensus forecast of 5%. Regular pay growth in the private sector, which is more sensitive to the business cycle and therefore tracked more closely by the Bank of England, even rose to 5.4% during that same period. This significant wage inflation underscores the Bank of England's dilemma, as economic growth is slowing, as indicated by Friday's production figures and yesterday’s PMI. Job growth remains weak as well. Vacancies have declined to pre-pandemic levels, while payroll employment stagnant. We remain cautious about the official employment and unemployment data, as even the ONS acknowledges that its current estimates are essentially random. Our base scenario is that the central bank will continue easing in quarterly steps. We expect rates to remain unchanged at Thursday's meeting and to decrease by 100 basis points over the course of 2025.

Turning back to Europe then, where - to no one’s surprise - German Chancellor Scholz lost yesterday’s confidence vote, putting the country on track for snap elections on February 23. The debate in the run-up to the vote was heated and was first and foremost about the dire state of the economy and the threats from the East (and arguably from the ‘West’ as well). Of course the debate was largely a show for parties to set out their key campaign themes. Scholz said “It’s high time to invest forcefully into our country. […] we must turn the switch and this means now.” Yet one may wonder whether Scholz’ call for more public spending and investment resonated with lawmakers and voters, given that his Cabinet largely failed to do exactly just that under his reign. Indeed, CDU’s Merz responded: “Were you on another planet?” Yet, here too (as well as in France) the core of the issue is whether fiscal policy can and should play a role to support sustainable growth and, if so, how?

As long as this debate is not settled, Europe is likely to remain a playball of the markets, as it has been of late; negative sentiment has driven an wedge between US and European equity prices and has driven Eurodollar near its lowest level since late 2022, when the currency union was still reeling from the energy shock. Indeed, European industry is in a difficult position. Energy-intensive and/or low-added value industries are either closing or moving location to other parts of the world. A renewed decline in the German manufacturing PMI to 42.5 and an eyewatering 41.6 (a fresh cyclical low) in France for December once again drove home that message. The overall Eurozone index stayed put at 45.2, a level normally associated with (mild) recession. 

The manufacturing sector again produced less than a month earlier, and the decline in activity was even the largest so far this year. Production is clearly being scaled back due to declining demand, which is reflected in the subpar inflow of new orders. Especially new export orders continued to decline, and this does not seem to be entirely a Trump effect. Although the fear of import tariffs may make American companies more cautious about placing international orders, the contraction in new orders was less severe than in previous months. The empty order books thus seem more a reflection of the poor competitive position of European industry in the global market. The lower demand and emptying order books are now also forcing more companies to shrink their workforce. According to the purchasing managers' survey, the number of layoffs has not been this high in the past four years as this month, particularly in Germany and France. However, that sounds worse than it is: the number of job losses is still quite limited. As far as companies were still “hoarding” staff after the earlier experience with staff shortages around the Covid pandemic, some of these layoffs will be a 'rationalization' of the number of employees. After all, keeping more employees than necessary is not cheap.

Moreover, structural and cyclical issues are often mixed up and it seems fair to say that US industry isn’t in a great state either. For example, the US manufacturing PMI for December also fell decisively below the boom-bust mark of 50. At 48.4 it is more or less the same level as the November-reading for the much longer-running ISM manufacturing index. In statistical terms the European and US manufacturing indices are actually not very different right now, the normalized difference  is currently less than 0.5 standard-deviations (to the disadvantage of the Eurozone). 

Meanwhile, the Eurozone Services PMI data seemed to confirm what we have been saying for some time, namely that these indices tend to paint too-negative picture of economic activity in the autumn, only to paint too-positive a picture during the spring. This is a ‘seasonal pattern’ where the services sector PMI peaks around mid-year and then weakens between July and November/December appears to have slipped in since 2021 (when the world was slowly recovering from the pandemic). In any case, the December readings were better than the consensus estimate, and this compensated for the weakness in industry, even though the overall picture remains one of (very) moderate growth of activity.

Despite the sluggish activity, respondents of the PMI survey report higher costs and selling prices once again. Prices are no longer rising as sharply as in 2022, but companies have increased their selling prices for the third consecutive month. This price pressure remains particularly problematic in the services sector, suggesting that costs are largely related to salaries.

This underscores the challenge for the European Central Bank once again. Just last week, President Lagarde stated that domestically-driven inflation remains high. This measure of inflation, which tries to exclude the effects of imports, was still 4.2% in October. This inflation is closely related to services inflation and labor costs, which are also decreasing very slowly. The ECB still assumes that the high wage increases and high services inflation are the result of the high inflation in recent years, leading to higher collective labor agreements now. The ECB expects this to decrease next year. The PMI survey did not provide reassurance in this regard yesterday.

Tyler Durden Tue, 12/17/2024 - 11:25

After Pardoning Hunter's Weapons Charges, Biden Renews Demands For More Gun Control After Wisconsin Shooting

Authored by Jonathan Turley,

The shooting at the Abundant Life Christian School in Madison, Wisconsin, immediately prompted renewed calls for gun control from President Joe Biden and others.

As I have previously written, these calls often appear entirely disconnected from the actual crime or the constitutional protections afforded gun owners, including President Biden demanding a ban on assault weapons after a shooting with a handgun.

President Biden’s call for greater background checks and enforcement was a bit incongruous after he pardoned his own son on gun charges. More importantly, the Wisconsin case only highlighted why these standard demands for gun control would not have impacted that case.

This was a juvenile who is believed to have used a 9mm handgun in the attack. Natalie Rupnow, 15, was not supposed to have a gun and would not have gone through background checks. While both Biden and Kamala Harris have raised limiting or banning the popular 9mm, Harris admits that she is one of millions with the weapon and it would not be subject to any of these proposals.

The president once again denounced the availability of what he collectively calls “assault weapons,” a common reference to such popular models as the AR-15. Efforts to ban this model have already failed in the courts on constitutional grounds, though litigation is continuing on that issue.

In 2008, the Supreme Court handed down a landmark ruling in District of Columbia v. Heller, recognizing the Second Amendment as encompassing an individual right to bear arms. The Supreme Court further strengthened the right in New York State Rifle & Pistol Association Inc. v. Bruen.

The AR-15 is the most popular gun in America and the number is continuing to rise rapidly, with one AR-15 purchased in every five new firearms sales. These AR-15s clearly are not being purchased for armored deer. Many are purchased for personal and home protection; it also is popular for target shooting and hunting. Many gun owners like the AR-15 because it is modular; depending on the model, you can swap out barrels, bolts and high-capacity magazines, or add a variety of accessories. While it does more damage than a typical handgun, it is not the most powerful gun sold in terms of caliber; many guns have equal or greater calibre.

That is why laws to ban or curtail sales of the AR-15 run into constitutional barriers. Even the U.S. Court of Appeals for the Ninth Circuit struck down a California ban on adults under 21 purchasing semi-automatic weapons like the AR-15.

After past tragedies, some of us have cautioned that there is a limited range of options for gun bans, given constitutional protections. There also are practical barriers, with an estimated 393 million guns in the United States and an estimated 72 million gun owners; three out of ten Americans say they have guns. Indeed, gun ownership rose during the pandemic. When former Texas congressman and U.S. Senate candidate Beto O’Rourke declared, “Hell yes, we are going to take your AR-15,” he was widely celebrated on the left. However, even seizing that one type of gun would require confiscation of as many as 15 million weapons.

These calls for greater gun controls remain either factually ambiguous or legally dubious.

For example, former FBI Deputy Director Andrew McCabe declared after the Wisconsin shooting that it is time to “change the context of gun ownership.”

While admitting that he did not know all of the facts, McCabe said:

We’re [going] nowhere because it keeps happening. We know it’s going to happen again. It’s happening today. It’s going to happen again in the near future. I can guarantee you that and every time it happens, we do just about nothing. That doesn’t mean there aren’t things we can’t do. We could do things. We could — we could support and enact legislation that changes the — the — the context of gun ownership in this country and emphasizes gun safety and responsibility with the firearms that you own and keeping them out of the hands of children and doing — and really vigorous, consistent background checks across the country. We could stop selling people — stop — you — eliminate the ability to purchase guns without a background check.

It is unclear what “changing the context” means, particularly when the context is first and foremost constitutional.

Likewise, Rep. Mark Pocan (D-WI) called for his House colleagues to “stand up to gun manufacturers” but stopped short of explaining what that would actually mean:

Thoughts and prayers without action means more school shootings, more dead kids.

More ACTION is needed by our elected officials.

And more BACKBONE to stand up to gun manufacturers.

This is uniquely a United States problem that doesn't have to happen.

— Rep. Mark Pocan (@RepMarkPocan) December 16, 2024

Pocan has previously called for “common sense” laws without tackling the more difficult question of how to produce the sweeping changes given the narrow scope of constitutional limits for an individual right.

Wisconsin has robust gun control laws that did not prevent this shooting because Rupnow was not subject to the background checks and other regulations. She was not supposed to have the weapon and 9mm is not one of the guns that Democrats are calling to ban.

None of this means that people of good faith should not work on new initiatives and measures to combat gun violence. However, politicians like President Biden have misled the public for years about the narrow range of constitutional options for gun control legislation. The suggestion is that “this did not have to happen” despite the fact that none of these proposals would have stopped this from happening.

In a tragedy of this magnitude, our leaders have a duty, first and foremost, of honesty in speaking with the public.

Tyler Durden Tue, 12/17/2024 - 10:45

Boeing's Failed Plea Deal: What Happens Next

Authored by Jacob Burg via The Epoch Times (emphasis ours),

Months after the Department of Justice (DOJ) offered Boeing a plea deal to avoid criminal fraud charges, a U.S. judge threw a curveball in the case, rejecting the deal after taking issue with a “diversity and inclusion” provision in selecting a monitor to supervise the company’s safety practices, along with how the court would participate in that process.

The Boeing logo is displayed at the company's factory in Renton, Wash., on Sept. 24, 2024. Lindsey Wasson/AP Photo

The United States charged Boeing with fraud on Jan. 7, 2021, following the 2018 and 2019 737 MAX 8 crashes, which killed all 346 people onboard both flights. The DOJ accused the aerospace company of deliberately hiding its Maneuvering Characteristics Augmentation System software, which caused both planes to stall midair and fall to the ground, from Federal Aviation Administration regulators.

To avoid criminal charges, the DOJ offered Boeing a deferred prosecution agreement: a criminal settlement that required the plane manufacturer to pay a total of $2.5 billion in damages, including a $243.6 million penalty and a $500 million fund to compensate families of the 737 Max crash victims.

Boeing had to remain in compliance for three years after the agreement was signed—which ended on Jan. 7. But, two days prior, a door panel ripped off an Alaska Airlines Boeing 737 MAX 9 flight midair, changing the company’s fortunes overnight and thrusting its safety practices back into public scrutiny.

After the DOJ wrote in a May 14 court filing that Boeing had violated the criminal settlement, which the company denied, Boeing then pleaded guilty to defrauding the United States over the 737 MAX 8 crashes. The plea deal would have required Boeing to pay an additional $243.6 million fine, invest $455 million into safety and compliance programs, and submit to three years of independent monitoring over its safety and quality control.

Now that U.S. District Judge Reed O’Connor has rejected the deal, the aerospace giant faces several possible outcomes, aside from appealing the ruling, aviation and legal experts told The Epoch Times.

“[The DOJ] can sit down with Boeing and rework the plea deal so that the monitor selection process is more acceptable to the court. Or they can take Boeing to trial on the conspiracy charge,” Erin Applebaum, a partner at Kreindler & Kreindler LLP, which represents 34 families who lost loved ones on Ethiopian Airlines Flight 302, told The Epoch Times.

“I have no doubt that the first option is what will happen. I fully expect that DOJ and Boeing will rewrite the plea so that its terms are more favorable to the court.”

Judge Objects to ‘Diversity’ Provision

O’Connor wrote in a Dec. 5 order that he had concerns about a diversity and inclusion provision in Boeing’s plea deal with the DOJ. He targeted a single sentence in the plea agreement that referenced the DOJ’s diversity policy in selecting an independent monitor to monitor Boeing’s safety compliance practices.

“In a case of this magnitude, it is in the utmost interest of justice that the public is confident this monitor selection is done based solely on competency,” O'Connor wrote. “The parties’ DEI efforts only serve to undermine this confidence in the Government and Boeing’s ethics and anti-fraud efforts.”

Shawn Pruchnicki, aviation safety expert and assistant professor at Ohio State University’s Center for Aviation Studies, said the monitor had an “amazingly important task” of supervising the company’s safety compliance practices.

“I stand fully behind [diversity], but I think many of us in aerospace and certainly in aviation, just like we do on the flight deck ... we want someone who is qualified, that can meet the same requirements that we get,” Pruchnicki told The Epoch Times.

Applebaum said she and the victims’ families are very appreciative of the court’s mandating that the DOJ and Boeing improve the monitor selection process.

“Though there is still much work to be done, the imposition of a highly qualified monitor who will hold Boeing’s feet to the fire is a good first step towards strengthening aviation safety and ensuring that there are no more Boeing crashes,” she said.

Other Plea Deal Objections

In rejecting the deal, O’Connor also criticized how the DOJ positioned the court in the monitor selection process.

“At this point, the public interest requires the Court to step in,” he wrote in his order.

“Marginalizing the Court in the selection and monitoring of the independent monitor as the plea agreement does undermines public confidence in Boeing’s probation, fails to promote respect for the law, and is therefore not in the public interest.”

He also noted that the families of the 737 MAX 8 crash victims took issue with the government’s role in the plea deal.

“They argue, in essence, that the Government has monitored Boeing since the case was filed and yet failed to ensure Boeing’s compliance,” O'Connor wrote. “Because of this failure, they contend the monitor should be selected by and report to the Court to guarantee compliance.”

Michael Stumo, who lost his daughter in the Ethiopian Airlines crash, told The Epoch Times earlier this year that he strongly objected to the deal the DOJ had offered Boeing.

“It’s a weak slap on the wrist for one of the biggest corporate death cases in U.S. history,” Stumo said.

In a Dec. 5 post on social media platform X, he said he was “very glad” the judge had rejected the deal.

“DOJ’s ‘coddling corporate criminals’ policy just got ... nailed,” he wrote.

Boeing and the DOJ now have 30 days to respond to the court on how they plan to proceed with the case, O’Connor said.

What Happens Next

Vikramaditya Khanna, a corporate law professor at the University of Michigan, told The Epoch Times that Boeing and the DOJ may go back to the negotiating table but that an appeal could be difficult given the trial court’s discretion in approving a settlement.

“I’m not sure if this affects Boeing’s government contracts—I presume they will be likely to renegotiate the plea, and that will likely include things on government contracts,” he said.

“If there is no plea, then there are several questions about government contracts if Boeing were to be found liable for fraud at some point.”

Applebaum said that Boeing’s sentence could change if the DOJ decides to take the company to trial on the conspiracy charge and convict it. Otherwise, the manufacturer would face the same charges after losing the plea deal.

“In a perfect world, the families would see Boeing executives put on trial and held accountable for the deaths of their loved ones. But we have accepted the reality that this outcome is unrealistic,” she said.

“The families want Boeing to significantly improve its safety and compliance culture. A weak plea deal will do nothing to effectuate major change within the company, which is why the families pushed so hard for DOJ to include stringent and punitive terms as part of the plea agreement.”

Pruchnicki, who testified before the U.S. Senate in April about the issues with Boeing’s safety culture, said individuals at the company should still be held accountable and there should not be a plea deal.

“This is what it comes down to at the end of the day; the DPA, the deferred prosecution agreement, they clearly, without a doubt, [violated it],” he told The Epoch Times.

“They need to be held accountable for that. It was an absolute joke with what they came up with, completely insulting to the American public and completely insulting to the courts.”

Sam Dorman contributed to this report.

Tyler Durden Tue, 12/17/2024 - 09:35

US Industrial Production Tumbled For The 3rd Straight Month As Capacity Utilization Craters

US Industrial Production tumbled for the third straight month in November (and 4th of the last 5). The 0.1% MoM decline (vs +0.3% exp) - following a downwardly revised 0.4% drop the month prior - dragged production down 0.9% YoY (the worst drop since January)...

Source: Bloomberg

Factory Orders rose 0.2% MoM - after a downwardly revised 0.7% slide a month earlier - (considerably weaker than the +0.5% MoM expected)...

Source: Bloomberg

Ex-Transportation, the picture was a little more rosy with core factory orders up a modest 0.13% MoM rise lifting YoY production by 1.13%...

Source: Bloomberg

Output at utilities fell by the most in four months, while mining posted the largest decline since May.

Finally, capacity utilization fell to 76.8% (the lowest since April 2021) and well below expectations...

Source: Bloomberg

...but, but, but it's not a recession!

Tyler Durden Tue, 12/17/2024 - 09:27

Surging Car Sales Spark Upside Surprise For Retail Spending In November

BofA's omniscient forecasters were - for a change - more or less in line with consensus for retail sales in November...

The actual print was mixed with the headline retail sales rising 0.7% MoM (hotter than expected), while core retail sales disappointed. The headline beat pushed sales up 3.8% YoY - the highest since Dec 2023...

Source: Bloomberg

Motor Vehicle & Parts were the biggest driver of the upside surprise...

Sales were also helped by online retailers...

Motor Vehicle & Parts Dealers sales surged for the second month to a new record high...

The key 'Control Group' saw sales rise 0.4% MoM (as expected) providing support for GDP...

Source: Bloomberg

BofA notes that the robust spending that we saw around Thanksgiving continued through Cyber Monday week.

We can’t learn much from year-over-year growth rates, since they were heavily impacted by the calendar shift. Therefore, we compare spending to the analogous period in 2023.

We find that spending on holiday items in the two weeks ending Dec 7 in 2024 was 6.1% higher than in the two weeks ending the Saturday after Cyber Monday in 2023.

Finally, as a reminder, retail sales data is 'nominal' so a quick sleight of hand using CPI data as a rough indication of inflation and we see that in fact, real retail sales have basically oscillated around the flatline for the last 30-months-plus...

Source: Bloomberg

So another data point for The Fed that clearly signals no need for rate-cuts! Does this look like an economy dealing with 'restrictive' rates?

Tyler Durden Tue, 12/17/2024 - 08:39

Futures Drop As Global Selloff Reaches The US

There is only so much the US can "exceptionally" decouple from the rest of the world, and on Tuesday US futures finally succumbed to the persistent selling in markets around the world, as traders awaited the Federal Reserve’s final interest-rate decision for 2024 and its monetary policy forecasts. As of 8:00am, S&P futures dropped 0.3%, while Nasdaq 100 futs eased back 0.2% after the relentless rally in tech stocks pushed the gauge to a fresh all-time high on Monday as AAPL/GOOGL/AMZN/TSLA/AVGO all reached new ATHs. TSLA (+3% pre-mkt) on an u/g away while NVDA (-1.5% pre mkt) continues to be under pressure. Europe’s Stoxx 600 fell 0.4% as weaker crude prices weighed on oil-related stocks (FTSE -70bps/DAX +15bps/CAC +30bps). A key Asian gauge dropped 0.5% after erasing gains as concerns over China’s economy persist (Shanghai -73bps/Hang Seng -48bps/Nikkei -24bps). US rates rose with 10Y TSY yields rising +4bps @ 4.43%. The Bloomberg Dollar Spot Index adds 0.1%. The Aussie dollar is the weakest of the G-10 currencies, losing 0.5%. The yen outperforms with a 0.2% gain. Crude oil extended its drop as WTI dropped 0.8% to $70.15. Meanwhile, Bitcoin adds another +90bps to $107,040 as global equities chop around ahead of a slew of central bank rate decisions the next few days (FOMC tomorrow). There is a busy macro calendar today with retail sales, industrial/mfg production, business inventories and the NAHB housing index all on deck.

In premarket trading, Pfizer rose 2% after the company forecast 2025 sales and earnings in line with analysts’ projections, a step toward fending off an activist investor’s claims that the drugmaker is being mismanaged. Here are some other notable premarket movers:

• Mitek (MITK) rallies 15% after the identity verification software company reported fourth quarter revenue and earnings that beat the average analyst estimate.
• Pacs Group (PACS) slips 3% as JPMorgan issued a downgrade after nursing home operator said it received investigative demands over its reimbursement and referral practices.
• Rockwell Medical (RMTI) climbs 14% after the manufacturer of hemodialysis products entered into a supply pact with a provider of dialysis products and services.
• Shoals Technologies (SHLS) climbs 8% as Morgan Stanley upgraded the renewable energy equipment company to overweight citing increased confidence in the earnings outlook heading into 2025.
• Tesla shares rise as much as 3.4% in premarket trading on Tuesday as Mizuho Securities upgrades to outperform from neutral citing an improved outlook under the new administration.
• Shares in electric-vehicle and charging station companies may be active on Tuesday after Reuters reported that Donald Trump’s transition team plans changes that would redirect funding from EV and charging stations markers to national-defense priorities.

As equity markets head into the final weeks of 2024, US stocks have significantly outperformed their peers for the year as optimism about artificial intelligence and falling rates fuel investor confidence. Traders are now focusing on Wednesday’s Fed announcement, with Chair Jerome Powell widely expected to deliver a quarter-point of easing.

What happens in the following months remains less clear. While the US economy is resilient, the prospect of inflationary import tariffs threatened by the incoming administration of Donald Trump may give Fed officials pause about the pace of further moves. Money markets are seeing an 80% chance of three cuts next year, compared to the small probability of a fourth reduction seen at the start of the month. “There is also the Fed, which stirs some uncertainty,” said Alexandre Baradez, chief market analyst at IG in Paris. “My scenario is for a hawkish cut with a much more cautious narrative.”

Bank of America strategists cautioned that fund managers have been reducing cash holdings to a record low and pouring money into US stocks, triggering a metric that could be a signal to sell global equities. Cash as a percentage of total assets under management fell below 4%, a move that in the past has been followed by stock market losses.

In Europe, the Stoxx 600 fell for a fourth consecutive session, as political upheaval in the region weighs on sentiment, with traders also bracing for Eurozone inflation data and a US rate decision due tomorrow. Technology and automakers are among gainers while energy and telecom sectors lead declines. Here are some of the biggest movers on Tuesday:

• Airbus shares rise as much as 1.9% after Deutsche Bank upgraded the planemaker to buy from hold, saying it is better positioned for 2025 and is trading at a relatively affordable valuation.
• Jungheinrich gains as much as 4.9% after Citi upgrades the intralogistics solutions provider to buy from neutral, saying the stock is too cheap to ignore after prolonged underperformance.
• Goodwin shares rise as much as 18% after the UK mechanical and refractory engineering company reports what Shore Capital describes as “excellent” interim results.
• Thyssenkrupp Nucera shares gain as much as 9.3% after full-year earnings from the German green hydrogen technology firm revealed encouraging developments in the pipeline and funding potential, according to Citi.
• Hollywood Bowl shares drop as much as 11%, their worst day in over four years, after the bowling center operator reported a slide in pretax profit as well as flagging an impact of £1.2 million when UK National Insurance changes are implemented next year.
• Bunzl drops as much as 5.7% after the year-end trading update reports revenue that fell below consensus as Jefferies analyst says the update flags “continued top-line weakness.”
• Capita drops as much as 11% after the outsourcing specialist issued a trading update that showed an 8% adjusted-revenue decline and flagged a further slide in revenue growth next year.
• Chemring shares fall as much as 11% as the British defense firm decided not to renew its share buyback program and said its margin has fallen due to operational challenges.
• JDE Peet’s falls as much as 5% to hit a record low, after Goldman Sachs re-initiated coverage of the Dutch coffee and tea company with a sell rating, noting that a sharp uptick in coffee prices could hit sales, potentially putting at risk its presence in equity indexes.
• UCB shares slip as much as 3.6% after a proof-of-concept study for its experimental drug minzasolmin developed in partnership with Novartis for Parkinson’s disease didn’t meet primary and secondary clinical endpoints.

Earlier in the session, HK/China closed lower despite a midday spike following a Reuters headline that placed China’s 2025 GDP growth and fiscal deficit targets at the upper bound of investor expectations. Small caps caught the most weakness today, suggesting that retail investors are taking a breather after being better buyers over the past few sessions. Meanwhile, Samsung Electronics 00597230 KS caught selling after GIR cut its price targets, while ASIC names in Taiwan were well bid after Broadcom AVGO US rallied again overnight.

• Australia: S&P/ASX 200 +0.78%, snapping a five-day losing streak. The index took cues from Wall Street, where Tech shares delivered strong performance, bolstering sentiment. Investors are bracing for an expected interest rate cut from the US Fed Reserve later this week, with much of the focus shifting to the Fed's outlook for 2025. Notable performers were Commonwealth Bank CBA AU +1.6%, NA Bank NAB +1.5%.
• Taiwan: TAIEX -0.09%. Market opened higher but gradually lost steam over the day. TSMC 2330 TT retreated 0.9% and is just 3 ticks short of another A-T-H. United Microelectronics Corp UMC + 2.7% after the biggest morning headlines were focused on their reported securing advanced packaging orders from Qualcomm. The ASIC theme was also very strong again, as Broadcom gained another 11% overnight with the local ASIC names benefiting again, including Alchip limit up, GUC 3443 TT +8.8%, and Faraday 3035 TT +5.2%.
• Korea: KOSPI -1.29%. It opened weak and dipped lower further into the afternoon on accelerated foreign outflows with the bulk of the selling coming from program trades which indicated passive, systematic driven selling while locals (institutios, retail) were on the receiving end of the supply. Tech was an underperformer today whereas within semis - Samsung and Hynix saw divergence again while the EV names were notably weaker following potential tariff headwinds.
• Japan: Nikkei 225 -0.23%. Market opened with risk on mode led by momentum trades. Investors preferred popular themes like defense names, AI related names. Investors shifted their positions from cyclicals to defensives, from high vol names to low vol names, value names to growth names. Shares of Advantest 6857 JP tumbled 9.1% as the unveiling of its latest testing solutions for advanced applications. Meanwhile, SoftBank Group 9984 JP +4.3% after CEO Masayoshi Son announced plans to invest $100 bn in the US.
• China: SHSZ300 +0.26% but A-shares in other indices took another leg lower weighed weighed by small and micro cap names. Headlines from Reuters that China GDP growth target set at 5% for next year, and budgeted fiscal deficit 4% hit the tape at noon. Growth target is in line (and deemed aggressive by many; GSe: 4.5%), and fiscal target to the upper bound of expectation. The news spurred a quick spike in the PM session, but tapered soon.
• Hong Kong: HSI -0.22%. Markets saw a sharp spike in PM inline with onshore, but soon faded marking the 3rd straight session of losses as most sectors retreated - particularly property, consumers, and tech. Sluggish activity data for Nov in China continued to weigh on sentiment, with retail sales growth unexpectedly slowing while industrial output rose at a relatively similar pace to October. Notable decliners include Techtronic Inds. 669 HK -2.4%, JD Logistics 2618 HK -1.58%, Wuxi Biologics 2269 HK -2.66%.

In FX, Bloomberg’s dollar gauge was little changed. An index of Asian currencies fell to the lowest in more than two years amid pessimism over China’s economic outlook and expectations that Trump policies will drive gains in the greenback. The yen snapped a six-day losing streak after weakening beyond the 154 level versus the dollar overnight. The yen’s rapid decline in the past week had strategists warning that further weakness may trigger verbal intervention from authorities and add pressure on the Bank of Japan to hike rates. Traders are pricing in a less than 20% chance of a rate hike in December, according to swaps market pricing. The pound erased a small loss while gilt yields rose as traders scaled back bets on Bank of England rate cuts after UK wage growth accelerated for the first time in more than year. The implied chance of three quarter-point cuts in 2025 fell to around 55%, down from 90% before the report. The yuan was little changed in both onshore and overseas trading, as markets shrugged off news that Chinese leaders were planning to set an annual growth goal of about 5% for next year and raise the budget deficit.

In rates, yields on US Treasuries advanced across the curve, with the US 10-year yield rising 3bps to 4.432%, cheapest since Nov. 21. UK government bonds fall as traders pare bets on interest-rate cuts by the Bank of England after UK wage growth accelerated for the first time in more than a year. UK 10-year yields rise 6 bps to 4.50% although the pound has given back its earlier advance versus the dollar. OIS swaps price in about 60bps of easing through December 2025 vs around 75bp at Monday’s close. The US Treasury sells $13 billion of 20-year bonds in a reopening at 1pm New York time; WI yield near 4.72% is ~4bp cheaper than November’s new-issue sale, which tailed by 1.5bp.

The 10Y yield may climb to 6% as US fiscal woes worsen and Trump’s policies help keep inflation elevated, according to T. Rowe Price. “Is a 6% 10‑year Treasury yield possible? Why not? But we can consider that when we move through 5%,” Arif Husain, chief investment officer of fixed-income, wrote in a report. “The transition period in US politics is an opportunity to position for increasing longer‑term Treasury yields and a steeper yield curve.”

In commodities, oil prices dropped with WTI falling 1% to $70 a barrel. Spot gold drops $11 to around $2,641/oz.

The US economic data calendar includes November retail sales and December New York Fed services business activity (8:30am), November industrial production (9:15am), and October business inventories and December NAHB housing market index (10am)

Market Snapshot

• S&P 500 futures down 0.3% to 6,062.00
• STOXX Europe 600 down 0.4% to 513.83
• MXAP down 0.5% to 183.86
• MXAPJ down 0.6% to 579.67
• Nikkei down 0.2% to 39,364.68
• Topix down 0.4% to 2,728.20
• Hang Seng Index down 0.5% to 19,700.48
• Shanghai Composite down 0.7% to 3,361.49
• Sensex down 1.2% to 80,747.70
• Australia S&P/ASX 200 up 0.8% to 8,314.00
• Kospi down 1.3% to 2,456.81
• German 10Y yield down 2 bps at 2.23%
• Euro down 0.3% to $1.0482
• Brent Futures down 0.6% to $73.47/bbl
• Brent Futures down 0.6% to $73.47/bbl
• Gold spot down 0.4% to $2,641.97
• US Dollar Index up 0.18% to 107.05

Top Overnight News

• China suffered the biggest outflow on record from its financial markets last month as the prospect of higher US tariffs posed more risks for the world’s second-largest economy. Domestic banks wired a net $45.7 billion of funds overseas on behalf of their clients for securities investment. BBG
• China will keep its growth target of about 5% next year and agreed to increase its fiscal deficit target to 4% of GDP in 2025, up 1% from 2024’s 3% goal and consistent with the recent pledge to adopt a more proactive fiscal policy. RTRS
• BABA (Alibaba) to book a $1B loss on the sale of its department-store chain Intime. WSJ
• Ukraine said it killed a senior Russian general in a Moscow bombing after a device planted in a scooter exploded early Tuesday, a rare targeted assassination of a high-profile military official in the capital. Ukraine accuses the general of committing chemical weapons crimes. WSJ
• The White House reiterated its position that it’s up to Volodymyr Zelenskiy to choose the timing and terms of talks with Russia, after Trump said Kyiv must make a deal to end the war. BBG
• Senior U.S. officials say Turkey and its militia allies are building up forces along the border with Syria, raising alarm that Ankara is preparing for a large-scale incursion into territory held by American-backed Syrian Kurds
• US retail sales are expected to rise 0.6% in November, compared with 0.4% the prior month, as companies lured bargain-hunters with discounts and tariff-wary shoppers pulled forward big-ticket purchases. BBG
• Fund managers have been reducing cash holdings to a record low and pouring money into US stocks. Cash as a percentage of total AUM fell below 4%, a move that in the past has been followed by losses. BBG
• Ten-year Treasury yields may climb to 6% for the first time since 2000 on Donald Trump’s inflationary policies. The benchmark may reach 5% in the first quarter. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks eventually traded mixed after the region initially showed a positive bias, taking cues from Wall Street, and in the absence of macro newsflow with looming risk events. ASX 200 firmed with banks underpinning the index, with Westpac among the gainers while its CFO announced plans to retire. Nikkei 225 trimmed earlier upside as traders were cautious ahead of the BoJ, with the decision contingent on the FOMC's announcement hours beforehand. Hang Seng and Shanghai Comp traded within narrow parameters in uneventful trade amid quiet newsflow, with participants remaining non-committal ahead of major risk events.

Top Asian News

• China is to maintain a growth target of "around 5%" for 2025, according to Reuters sources. China is to target a budget deficit of 4% in 2025 (vs 3% initially). More stimulus will be funded through issuing off-budget special bonds, sources added.
• New Zealand sees 2024/25 operating balance before gains, losses at NZD -17.32 bln (budget NZD -13.37 bln), according to Reuters.
• New Zealand Debt Management Office says 2024/25 gross bond issuance increases to NZD 40 bln from NZD 38 bln in May, according to Reuters.
• Alibaba Group (9988 HK/ BABA) sells Intime; Expected gross proceeds to Alibaba from Intime sale is approximately RMB 7.4bln; Alibaba expects to record losses of approximately RMB 9.3bln as a result of the sale of Intime.
• PBoC injected CNY 355.4 bln via 7-day reverse repos with the rate maintained at 1.50%, according to Reuters.
• South Korean acting President Han says South Korea is to implement the budget on Jan 1st; South Korea to allocate budget promptly for economic revitalisation, according to Reuters.
• Magnitude 7.4 quake has struck Port-Vila in the Vanuatu region, according to USGS.

European bourses began the session entirely in the red and have mostly resided in negative territory throughout the European morning, but have attempted to edge a little higher in recent trade, with some indices managing to climb incrementally into the green. German Ifo data confirmed the dire situation in the region, whilst ZEW surprised to the upside; metrics which sparked little price action. European sectors are almost entirely in the red, given the slip in risk sentiment in today’s session thus far. Tech is marginally in positive territory, alongside Consumer Products and Services. Energy is the clear underperformer joined by Basic Resources, attributed to the losses seen in underlying commodity prices today. US equity futures are modestly in negative territory, in-fitting with the losses seen in Europe and the general risk tone; a slight turn in fortunes in comparison to the gains seen in the prior session.

Top European News

• French Central Bank Forecasts: 2024 Growth seen at 1.1% (unchanged), 2025 seen at 0.9% (prev. 1.2% in Sept.); 2026 at 1.3% (prev. 1.5%), 2027% at 1.3%. HICP inflation 1.6% in 2025, 1.7% in 2026 and 1.9% in 2027.
• ECB's Rehn says data to decide speed and scale of rate cuts; scale and speed of rate cuts will be determined in each meeting on the basis of incoming data and comprehensive analysis; Euro area inflation starting to stabilise at ECB's 2% target. Monetary policy will cease to be restrictive in the later winter, early spring period (i.e. between January and June 2025)
• ECB's Kazimir says inflation risks are well balanced, via Bloomberg. Will discuss the neutral rate when they approach 2.5%.
• ECB keeps capital requirements broadly steady for 2025, reflecting strong bank performance amid heightened geopolitical risks

FX

• DXY is on a firmer footing and topped 107.00 in early European trade, to currently trade at the top-end of a 107.05-106.69 range. Should the upside continue, the Dollar index could see a potential test of the prior day’s best at 107.16, and then 107.18 from Friday 13th December. The North American day sees the release of US retail sales, which are expected to rise +0.5% M/M in November.
• EUR is on the backfoot vs the Dollar, after posting modest gains in the prior session. German Ifo figures were mixed, with the Business Climate and Expectations components printed below expectations whilst the Current conditions improved a touch. Overall the figures only further confirmed the dire situation in the region. German ZEW was a little more optimistic, which helped to lift the Single-Currency a touch, but ultimately proved fleeting. Currently trading near session troughs at 1.0480.
• GBP is on a firmer footing and one of the better G10 performers today, as traders trim their bets for more cuts in the coming year following today’s hot jobs reports, with particular focus in the wages components which surpassed the top end analyst expectations. Cable briefly topped 1.27 before then paring the upside to a current 1.2687.
• The JPY is the best G10 performer thus far, in contrast to the losses seen in the prior day. USD/JPY currently trades in a 153.76-154.34 range, and just within the confines made on Monday.
• Antipodeans are on the backfoot and in-fact the worst G10 performers, given the subdued risk sentiment and losses in commodity prices.
• PBoC sets USD/CNY mid-point at 7.1891 vs exp. 7.2842 (prev. 7.1882)
• RBI likely sold USD via state-run banks at 84.92-84.93, according to Reuters citing traders.
• Barclays Month- & Quarter-end Rebalancing: USD neutral.

Fixed Income

• USTs are in the red but only modestly so, moving in tandem with the morning’s data release out of the UK and Germany but in relatively thin 109-21 to 109-29+ parameters. US Retail Sales precedes a 20yr auction later today.
• Bunds came under pressure on the morning’s UK wage data (see Gilts for details) with leads bearish in-fitting with contained/softer UST action overnight. However, this proved relatively short-lived as Bunds were sent back into positive territory to a 134.94 session high on Germany’s 13% Y/Y lower 2025 issuance intentions, and the mixed but ultimately softer German Ifo release. On the data front, Ifo figures were poor whilst the ZEW was a little more optimistic on the economy and helped to spark some short-lived upside.
• Gilts are underperforming after the day's jobs data, with the wages components have taken centre stage with the hot metrics essentially removing any chance of easing on Thursday with just 1bps implied (c. 4bps pre-release. Though, we await CPI on Wednesday. A release which caused Gilts to gap lower by 47 ticks at the open and then slip further to an initial 93.27 trough. The 2029 outing saw a softer cover than the prior, which led Gilts down to a new 93.23 trough.
• German Finance Agency intends to issue around EUR 380bln via Federal debt sales in 2025, -13% Y/Y. Plus two syndications.
• Italy PM calls for discussions on common EU bonds to fund defence spending.
• UK sells GBP 3.75bln 4.125% 2029 Gilt: 2.9x (prev. 3.05x), avg yield 4.348% (prev. 4.148%) & tail 0.8bps (prev. 0.8bps)

Commodities

• WTI and Brent came under pressure early-doors despite a lack of fresh fundamental drivers at the time. Pressure which took the benchmarks to fresh lows for the week and back towards the troughs from Friday; though, well within last week’s circa. USD 5/bbl parameters. Brent'Feb 25 currently sits near session lows at USD 73.35/bbl.
• Gold is softer, pressured by continued USD advances which has taken the DXY above the 107.00 mark. Yellow metal has been waning gradually in European hours, as the region's risk tone meanders higher. Thus far, down to a USD 2641/oz base.
• Base metals spent APAC trade in very thin ranges but have since slipped to the lower-end of those and modestly into the red. Pressure which comes despite the modest inch higher in the European risk tone.

Geopolitics: Middle East

• "The IDF has approved plans for major strikes in Yemen, and is prepared to act pending government approval", via Open Source Intel citing N12 News
• US military said it conducted an airstrike against Houthis in Yemen, according to Reuters.
• Syria's rebel leader said factions would be 'disbanded' and fighters would join the army, according to AFP.

Geopolitics: Other

• Russia may increase the frequency of missile testing as external threats grow, according to Russian state news agencies citing the commander of Russian strategic missile forces. Russia may also increase the number of nuclear warheads on deployed carriers in response to similar actions by the US. Mobile-based missile systems, the commander noted, will be decisive means of inflicting devastating enemy damage in a potential retaliatory nuclear attack. Russia’s strategic missile forces plan maximum-range launches as part of state testing of prospective new systems. Additionally, Russia and the US give each other at least a day's warning about planned launches of intercontinental ballistic missiles.
• Russian lieutenant general Kirillov and his associate killed in explosion in Moscow, according to RT sources; Kirillov is listed as Chief of Radiological, Chemical and Biological Defence of Russian Armed Forces.
• Senior US officials say Turkey and its militia allies are building up forces along the border with Syria, raising alarm that Ankara is preparing for a large-scale incursion into territory held by American-backed Syrian Kurds, according to WSJ.

US Event Calendar

• 08:30: Nov. Retail Sales Advance MoM, est. 0.6%, prior 0.4%
  • Nov. Retail Sales Ex Auto MoM, est. 0.4%, prior 0.1%
  • Nov. Retail Sales Control Group, est. 0.4%, prior -0.1%
• 08:30: Dec. New York Fed Services Business, prior -0.5
• 09:15: Nov. Industrial Production MoM, est. 0.3%, prior -0.3%
  • Nov. Manufacturing (SIC) Production, est. 0.5%, prior -0.5%
  • Nov. Capacity Utilization, est. 77.3%, prior 77.1%
• 10:00: Oct. Business Inventories, est. 0.1%, prior 0.1%
• 10:00: Dec. NAHB Housing Market Index, est. 47, prior 46

DB's Jim Reid concludes the overnight wrap

In what should be a quiet week given the time of year there is still a lot going on in markets as we build up to the FOMC that concludes tomorrow. The S&P 500 (+0.38%) ended the session just beneath its all-time high from earlier in the month but with the number of decliners (321) in the index exceeding advancers (182) for a remarkable 11th session in a row. On my calculations this is the longest such run for 40 years. Elsewhere French assets under-performed a touch after the Moody’s downgrade on Friday night, whilst the Canadian Dollar hit its weakest intraday level in four-and-a-half years after the country’s finance minister resigned heaping pressure on Trudeau as the political instability in several G7 countries seen over the last few months continues.

Talking of which, the other main story of the day centred around Germany as the government lost a no-confidence vote as expected that paves the way for an early election to happen. By way of background, Chancellor Scholz had led a three-party coalition of his own SPD, the Greens and the FDP. But the coalition collapsed after Scholz fired the FDP leader and finance minister Christian Lindner because of a budget dispute. Under the German system, the Chancellor can’t simply call an early election at the time of their own choosing. However, they can ask the President for an early election if they lose a vote of no confidence, so this one was tabled deliberately by the government in order to bring forward the election date. The election is expected to take place in February, and the conservative CDU/CSU bloc currently have a clear lead in opinion polls. Today they will release their manifesto with the leaks suggesting no plans to reform the debt brake. However part of this is likely to help ensure they have a stronger negotiating position in coalition talks. See Robin Winkler's latest piece yesterday looking at DB's latest thoughts.

In the meantime, there were also big developments in Canadian politics yesterday, as Finance Minister and Deputy PM Chrystia Freeland resigned from the cabinet. In her resignation letter, she said that the threat of US tariffs meant Canada should be “keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war.” The move came just hours before Freeland was set to deliver an economic update, and Canadian assets struggled following the resignation, with equities around half a percent lower and the Canadian Dollar weakening. Canada’s next election is due by October 2025, but the governing Liberal Party under Justin Trudeau are lagging well behind the opposition Conservatives, and CBC News’ poll tracker points to a high chance of a Conservative majority based on current polls. The question after this is whether Trudeau can ride this out until next October or will have to go to the polls earlier.

Moving on to France, there was an underperformance in the country’s markets following the credit rating downgrade from Moody’s on Friday. For instance, the CAC 40 (-0.71%) was the worst performer among the big European indices, well beneath the Europe-wide STOXX 600 (-0.12%). In addition, the Franco-German 10yr spread widened by +1.4bps to 79.9bps, which is its 5th consecutive move wider. Remember the downgrade only bring Moody's into line with S&P and Fitch so it aligns the main agencies rather than creates an incremental move away from the pack. Otherwise, there wasn’t much in the way of concrete political news, but the new PM François Bayrou met with Marine Le Pen, who said after the meeting that “It’s perhaps a little early to say if we were heard, but we were listened to.”

Elsewhere in Europe, there was a bit more optimism yesterday as the December flash PMIs were slightly better than expected. Now admittedly, the Euro Area composite PMI was still in contractionary territory at 49.5, so it was hardly a stellar performance. But that was stronger than the 48.2 print expected, and the services PMI was back in expansionary territory at 51.4 (vs. 49.5 expected). From a market perspective however, there wasn’t much to shift the dial for the ECB, who are still widely expected to keep cutting rates in 2025. And sovereign bonds were broadly steady yesterday, with 10yr bund yields (-1.0bps) coming down slightly to 2.24%.

The modest rally in European bonds also came as ECB President Lagarde followed through on some of the more dovish signals seen at last week’s press conference, saying that the ECB is looking to deliver an “appropriate” policy stance and that “If the incoming data continue to confirm our baseline, the direction of travel is clear and we expect to lower interest rates further”. Meanwhile, Schnabel, one of more hawkish ECB voices, noted that “lowering policy rates gradually towards a neutral level is the most appropriate course of action”, so some implicit pushback against the possibility of the ECB having to move rates below neutral.

Over in the US, the theme of American exceptionalism continued as the flash PMIs were notably stronger than expected. Indeed, the composite PMI was up to 56.6, which is its highest since March 2022 when the Fed started to hike rates again. In turn, that contributed to a selloff among US Treasuries, which pared back their initial gains to leave the 10yr yield little changed (+0.1bps) at 4.40%. At the same time, there was a notable outperformance from US equities, with the S&P 500 (+0.38%) ending the session just -0.27% beneath its all-time high. As mentioned at the top the breadth was again a negative as more stocks fell than rose for an eleventh day with the equal weight index down -0.36%. So the advance was driven by the Magnificent 7 (+2.07%), which hit another all-time high. Health care stocks (-1.24%) were among the underperformers as Trump commented that he plans to “knock out the middleman” in the sector during a wide-ranging press Q&A.

In Asia the main headline just coming through is Reuters reporting that China is set to announce a 5% growth target for 2025 along with a 4% budget deficit. There has been talk of such an expanded deficit number in the last couple of weeks but if that is the growth target the market will likely conclude that the authorities will have to be serious about stimulus. After the story's release Chinese equities have rallied several tenths of a percent with the Shanghai Comp now "only" -0.16% lower on the day. The Hang Seng is +0.2% higher having spent most of the session notably lower. The Nikkei (+0.20%) and the ASX (+0.78%) are higher but the KOSPI (-1.0%) is the biggest underperformer as the country continues to digest the weekend impeachment news. US futures are flat.

Bitcoin (+0.41%) is advancing for the third straight session, hitting a record high of $106,511 as the incoming Trump administration is seen as being far more friendly towards cryptocurrencies.

To the day ahead now, and data releases in the US include retail sales and industrial production for November, in Canada there’s the November CPI print, in Germany there’s the Ifo’s business climate indicator and the ZEW survey for December, and in the UK we’ll get unemployment for October. Central bank speakers include the ECB’s Kazimir and Rehn.

Tyler Durden Tue, 12/17/2024 - 08:26

For 2nd Trump Term, America Must Unite Around Progress Mindset

Authored by Clay Routledge via RealClearPolitics,

In the middle of a Trump transition, the “Resistance 2.0,” and the inevitable partisan mud-slinging, it is easy to lose faith in humanity’s future. Polls show growing pessimism about everything from democracy to economic mobility to climate change.

Yet the major challenges we face demand something different from us: a progress mindset. 

Our team at Archbridge Institute’s Human Flourishing Lab recently launched Progress Pulse, a new research initiative to study the attitudes, knowledge, motives, and goals that individuals hold regarding progress. In our first Progress Pulse survey, the results from over 2,000 U.S. adults reveal a stark divide: 52% believe we will make significant progress and create a better world for future generations, while 48% expect failure and decline.

Particularly concerning is our finding that young Americans are the most cynical about the future. Among adults aged 18 to 34, only 47% believe life will be better for future generations, while 53% expect decline. This drops to 42% when looking specifically at Gen Z (adults under 28). In other words, nearly 60% of Gen Z believes we will fail to improve the world and that life will be worse in the future. This stands in stark contrast to older Americans: Among those 65 and older, 60% believe in a better future, with only 40% expecting decline. 

This generational divide should worry us all, given that young adults will be at the forefront of solving tomorrow’s challenges. We cannot afford for them to have a negative outlook.

Some might argue that negativity is actually needed to drive progress. I frequently come across the view that positive feelings – from happiness to hope – are signs of people putting their heads in the sand or living blissfully unaware. The slogan, “If you’re not outraged, you’re not paying attention,” captures the sentiment that negative feelings are necessary for driving change.

But this view fundamentally misunderstands human psychology. Negative feelings such as anxiety often make us more psychologically defensive. While this can be useful when we need to protect ourselves from immediate physical, social, or financial threats, it also orients us away from the creative, innovative thinking and action that progress requires. For instance, research finds that the more anxious people are, the less likely they are to engage in entrepreneurial activities. Whether we are building businesses, families, friendships, or the broader institutions that advance civilization, negative thoughts and feelings are barriers to success.

Positive mental states, not negative ones, tend to push us outward toward solving problems and improving the world. This is because positive emotions promote a more expansive mindset, leading to greater willingness to take risks and explore new possibilities, which is crucial for addressing complex societal challenges. 

Take hope, for example. Hope is a positive and action-oriented mental state. Behavioral sciences research shows that when people are hopeful, they have a firm confidence in themselves and an unwavering belief that they will attain positive change in their lives. This allows them to persist through adversity. Hopeful people are flexible in finding effective paths toward their goals and can quickly adjust their approach when they encounter obstacles. Hopeful individuals are also more motivated to want to improve the world and they show greater creativity and tolerance for different perspectives – essential qualities for addressing the major challenges of our time.

The good news? Hope is contagious. Hopeful individuals inspire others to adopt more positive and action-oriented mindsets. They create ripple effects of positive change in their communities and organizations.

Right now, we need hope to spread. Our public discourse is saturated with negativity. Research finds that a growing proportion of news headlines convey anger, fear, disgust, and sadness. And we are part of the problem: Research also shows that when individuals engage with news online, they give more clicks to negative headlines. All of this is taking a toll on our nation’s psyche. 

As we confront the challenges of our time, we face a choice: Succumb to negativity or embrace a progress mindset. The evidence is clear – if we want to solve big problems and create a better future, we need to adopt a positive outlook.

The future remains unwritten. The challenges we face are real, but so is our capacity to overcome them. The first step is believing we can.

Clay Routledge is vice president of Research and director of the Human Flourishing Lab at the Archbridge Institute.

Tyler Durden Tue, 12/17/2024 - 07:20

China Is Now 39% Of Global Auto Production; Dominating Europe, Japan, U.S.

China has transformed itself from a minor player in the auto industry two decades ago to the world leader in car production and exports, particularly in electric vehicles (EVs), the New York Times reported late last month.

But the trend of China's impact on the global auto market has been best characterized by this chart, published over the weekend, showing how Chinese car production has gone from 1% to 39% of global production in 20 years.

The rapid ascent was fueled by significant government investment, advancements in automation, and the growth of its domestic market, which is now the largest globally.

The NYT piece said that as domestic sales have slowed due to economic headwinds, China has increasingly turned to international markets to sell its cars, especially EVs.

Chinese brands like BYD have gained global recognition for offering advanced electric cars at highly competitive prices, exporting more EVs than any other country. Major markets include Europe, where compact models are popular, and Southeast Asia, where affordability drives demand.

We wrote back in November that China was even dethroning many of its long-rivaled Japanese competitors. Between 2019 and 2024, Japanese automakers experienced the steepest market share declines in China, Singapore, Thailand, Malaysia, and Indonesia, according to Bloomberg's analysis of sales and registration data.

Japanese automakers aren't just losing ground across Asian countries, with all six tracked by Bloomberg experiencing declines in China - but also globally as shown in the above chart.

Even Toyota, the global leader in car volume, has seen its sales stagnate. In Southeast Asia, a traditional stronghold for Japanese brands, market share has dropped sharply.

In Thailand and Singapore, Japanese carmakers now control just 35% of the market, down from over 50% in 2019, while streets once dominated by Nissan and Mazda are increasingly filled with Chinese brands.

China’s leadership in EVs is the result of over a decade of focused government support, including subsidies, tax breaks, low-interest loans, and heavy investment in battery technology.

Since 2009, over $230 billion has been funneled into the EV and battery sectors, the New York Times reported.

Chinese automakers also maintain a significant cost advantage over their global competitors. Cars made by Chinese companies cost roughly 30% less to assemble, largely due to control over the battery supply chain, lower labor costs, and more efficient production processes.

However, China’s dominance has raised concerns globally. Countries like the U.S. and the European Union have imposed tariffs on Chinese EVs, citing unfair subsidies and the potential threat to local industries. Despite these trade barriers, Chinese vehicles remain competitive because of their lower prices and comparable quality.

China’s heavy investment and technological edge position it to continue dominating the global auto market. Even with intensifying international pushback, its production capacity, cost advantages, and leadership in EV technology suggest that its influence will persist for years to come.

Recall just days ago we wrote that GM was taking a more than $5 billion charge and closing plants to address its declining business in China.

Tyler Durden Tue, 12/17/2024 - 06:55

Biden Lied About Everything: Philly Fed Finds All Jobs "Created" In Q2 Were Fake

Back in August, many were surprised by the accuracy of our forecast, when we predicted that in its annual revision, the Biden Bureau of Labor Statistics would revise jobs for the April 2023-March 2024 period by "up to 1 million", something which we said would mean that all job report "beats" recorded in the past year will have been misses and the US labor market is in far worse shape than the admin would admit.

On Wednesday, the Bureau of Labor Statistics will downward revise jobs for the April 2023-March 2024 period by up to 1 million. This means that all "beats" recorded in the past year will have been misses and the US job market is in far worse shape than the admin would admit.

— zerohedge (@zerohedge) August 18, 2024

The final results, as everyone knows by now, was a shocking 818K revision lower, just as the Philadelphia Fed had predicted 6 months prior, in March, when it calculated correctly that the Biden Department of Goalseeking Propaganda had overstated payrolls by "at least 800,000."

Philadelphia Fed Admits US Payrolls Overstated By At Least 800,000 https://t.co/JZZxweddh9

— zerohedge (@zerohedge) March 28, 2024

The answer ended up 818,000 for the 12 month period ended March 31 (or about 68,000 per month) and the implied sharp deterioration to the job market was the main scapegoat used by the Fed to launch its easing cycle with a jumbo 50bps rate cut (now that "suddenly" the economic golden age pushed by the Biden propaganda regime, and trillions in debt, had just collapsed).

We mention all of this up because on Friday, the Philly Fed served up its latest shocker: not only did the Biden admin lie again, but the collapse in the labor market that had been covered up for much of the past year and was only exposed with the annual benchmark revision, extended into the second quarter.

"Estimates by the Federal Reserve Bank of Philadelphia indicate that the employment changes from March through June 2024 were significantly different" - read lower - "in 27 states compared with preliminary state estimates from the Bureau of Labor Statistics’ (BLS) Current Employment Statistics (CES)", the Philly Fed said on December 12.

"According to the early benchmark (EB) estimates conducted by the Phily Fed, employment was lower in 25 states, higher in two states, and lesser changes in the remaining 23 states and the District of Columbia."

Translation: 23 states unchanged, 1 revised higher...  and 25 lower. The breakdown is shown below.

Maybe someone can calculate what the odds of that distribution occurring naturally are, but here is our guess: virtually nil. Which is why would make such a loud stink every month after the Biden BLS revised jobs data lower month after month after month. The whole point was to make the labor market appear stronger than it was, then to gradually revised it all away. And now the Philadelphia Fed confirms - again - that we were right all along.

And so, after it first revised the 12 months ending March 31 by 818K, the downgrads extended into the second quarter of 2024, when the Philadelphia Fed early benchmark estimates showed that instead of the 1.1% gain shown initially by the BLS, payroll jobs in the 50 states and the District of Columbia were actually down 0.1%!

By state, the regional Fed bank estimates that largest revision of employment for the nine-month period ended in June will come from California, where it sees a downward revision of 172,700 jobs. Payrolls in Texas may be revised down by 112,100. An extended forecast by the BLS to the third quarter show further declines as well.

And while we don't yet know the specifics of the revisions - those will be revealed on Feb 7, 2025 when the final numbers are published - at the national level, we do know that all the jobs reportedly "created" in the second quarter, were actually fake, there were no net jobs created at all, and in fact, the US lost jobs in Q2!

Translation: in his latest attempt to create an impression of economic growth, Biden lied about everything, again.

Source: Philly Fed

Tyler Durden Tue, 12/17/2024 - 06:44

Waste Of The Day: $267 Million Spent On Fighting "Misinformation"

Authored by Jeremy Portnoy via RealClearInvestigations,

Topline: The federal government has recently spent $267 million on grants meant to suppress supposed “misinformation,” according to a new report from OpenTheBooks.com. 

Of course, federal bureaucrats themselves get to decide what is and isn’t misinformation.

Key facts: Misinformation spending soared in 2021 as the government worked with social media companies to restrict the views of those questioning federal Covid-19 policies online. Facebook CEO Mark Zuckerberg has since admitted it was “wrong” to censor varying opinions on vaccines, mask-wearing and social distancing. 

The U.S. House Committee on the Judiciary and the Select Subcommittee on the Weaponization of the Federal Government later accused the National Science Foundation of creating “AI-powered censorship and propaganda tools” at a cost of $13 million.

Another $200,000 was awarded to George Washington University to study how populist leaders spread misinformation. Researchers used government funds to analyze politicians who allegedly divided society during the pandemic, focusing on Donald Trump and three other world leaders.

In total, $127 million of the misinformation grants were related to Covid-19.

Other spending included $300,000 from the Department of Health and Human Services to create Innov8AI, which can “capture medical misinformation in social media for targeted interdiction using an advanced AI solution set.”

Trump’s administration spent $7 million on combating misinformation during his first term.

Background: Suppressing speech of any kind brings up potential First Amendment issues, and it runs the risk of erasing narratives that are actually true.

In October, reports emerged that Federal Emergency Management Agency workers were intentionally withholding financial aid from hurricane victims in Florida that had “Trump for President” signs on their lawns. Many news networks gave the story a “misinformation” label — until it turned out to be true and a Congressional investigation was launched.

Even the prediction that President Joe Biden would drop out of the presidential race was deemed a “conspiracy theory” from the “GOP fantasy crowd” by Politico in February. Months later, Biden stepped down from the ticket.

Summary: Americans can make up their own minds, they don’t need the government to do that for them. The best solution for bad speech isn’t censorship, it’s more speech.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

Tyler Durden Tue, 12/17/2024 - 06:30

Bullish Cattle Bets Soar As US Herd Crisis Sparks Breakout To Record High Price

Institutional investors are increasing bullish bets on live cattle futures, pushing them to their highest levels in five years, as America's herd size dwindles to its lowest point in more than six decades.

The latest CFTC data via Bloomberg shows money managers boosted bullish live cattle bets by 3,908 net-long positions to 126,308 last week, the most bullish in over five years. 

Additional CFTC data (courtesy of Bloomberg): 

• Long-only positions rose 5,781 lots to 140,036 in the week ending Dec. 10

• The long-only total was the highest in more than five years

• Short-only positions rose 1,873 lots to 13,728

• The short-only total was the highest in three weeks

Chicago Mercantile Exchange live cattle futures are reaching new highs, driven by technical trading, anticipation of strong consumer demand heading into holidays, and the alarming decline in overall herd size.

The shrinking beef supply has pushed the nation's herd size to its smallest level since 1961. With severe droughts, high interest rates, costly feed prices, sliding farm income, surging farm debt, and a shifting consumer preference toward cheaper chicken, struggling ranchers have been culling heifers, preventing any meaningful recovery in the number of calves necessary to expand the nation's herds.

On top of all this, the nation's cattle crisis is set to worsen with new pressures: first, President-elect Trump's anticipated tariff war 2.0, which is expected to tighten domestic beef supplies, and second, immigration reform.

"All of the things he is talking about have potentially negative consequences more so than anything positive," Derrell Peel, a professor of agricultural economics at Oklahoma State University, told Bloomberg, adding, "Our fate's pretty well determined in the cattle industry in the US for the next two to four years – and it's not looking good."

In February, the United States Department of Agriculture projected that the cattle herd could begin rebuilding by 2025. However, that timeline has since shifted to 2027. The reason is primarily because of high interest rates and poor pasture conditions in the Midwest. 

"Even as the beef industry has experienced periods of growth over the past decades, the animal count has dropped almost 40% since a peak in 1975. During the current downcycle, which started in 2020, the herd has been shrinking at the fastest pace since the big farm crisis of the 1980s," Bloomberg noted.

If Trump introduces new tariffs, it could disrupt the flow of imported beef, further tightening domestic supplies, which will mean supermarket prices of ground beef are set to rise even higher in 2025. 

All things point to higher beef prices in 2025.

Tyler Durden Tue, 12/17/2024 - 04:15

UK Govt Approves Sale Of Royal Mail To Czech Billionaire

Authored by Thomas Brooke via Remix News,

The British government has approved the £3.6 billion (€4.34 billion) sale of International Distribution Services (IDS), the parent company of Royal Mail, to EP Group, owned by Czech billionaire Daniel Křetínský.

The decision, announced on Monday by IDS on the London Stock Exchange, makes Křetínský the new owner of the historic Royal Mail after 500 years of British ownership.

The government will retain a “golden share” in the company, ensuring its control over key decisions, such as changes to ownership, tax residency, or the headquarters location.

Royal Mail, which employs over 150,000 people, will continue operating under strict conditions agreed upon by EP Group.

These include maintaining its Universal Service Obligation (USO), which guarantees letter delivery six days a week and parcel delivery Monday to Friday across the U.K. at a standard price.

Additionally, the agreement ensures that Royal Mail’s brand, headquarters, and tax residency will remain in the U.K. for at least five years. Workers will also benefit, with a commitment to allocate 10 percent of dividends paid to Křetínský to employees, alongside the establishment of a worker’s council to provide staff with a stronger voice in the company’s operations.

Daniel Křetínský, who has held a 27.5 percent stake in IDS since 2022, emphasized EP Group’s long-term commitment to preserving Royal Mail’s legacy while modernizing its operations.

“EP Group is a long-term and committed investor with a mission to make Royal Mail a successful modern postal operator with high-quality service and products for its customers,” Křetínský said.

He also acknowledged the historical significance of Royal Mail, stating he holds “maximum respect” for its tradition.

The acquisition was reviewed under national security laws due to Royal Mail’s status as critical national infrastructure due to Křetínský’s involvement in a gas transmission service that continues to transport reduced volumes of Russian gas to Europe under EU-approved terms.

The acquisition adds to Křetínský’s growing portfolio in the U.K., which includes a 27 percent stake in West Ham United Football Club and a 10 percent share in Sainsbury’s.

Read more here...

Tyler Durden Tue, 12/17/2024 - 03:30