Paul Tudor Jones: I Won't Own Fixed Income

Authored by Lance Roberts via RealInvestmentAdvice.com,

Paul Tudor Jones recently voiced concerns that rising U.S. deficits and debt and increasing interest rates could lead to a fiscal crisis. His perspective reflects the long-standing fear that sustained borrowing will trigger inflation, raise interest rates, and eventually overwhelm the government’s ability to manage its debt obligations. In short, his thesis is that interest rates will rise as the Government goes broke. However, a closer look at historical precedent and current fiscal dynamics suggests these concerns are overstated. Contrary to Jones’ warnings, the U.S. economy has structural strengths that make an imminent fiscal collapse unlikely.

 

Paul Tudor Jones’ warnings are not unusual, but like James Grant’s views, they are not well supported by longer-term data. The chart below shows the long-term view of short and long-bond interest rates, inflation, and GDP.

The Fundamentals Of Interest Rates

Interest rates rose during three previous periods in history.

1. During the economic/inflationary spike in the early 1860s

2. The “Golden Age” from 1900-1929 saw inflation rise as economic growth resulted from the Industrial Revolution.

3. The most recent period was the prolonged manufacturing cycle in the 1950s and 1960s. That cycle followed the end of WWII when the U.S. was the global manufacturing epicenter.

The current surge in inflation, and ultimately interest rates, was not a function of organic economic growth. It was a stimulus-driven surge in the supply/demand equation following the pandemic-driven shutdown. As those monetary and fiscal inflows reverse, that support will fade. In the future, we must understand the factors that drive rates over time: economic growth, wages, and inflation. Visually, we can create a composite index of GDP, wages, and inflation versus interest rates.

As can be seen visually, the correlation between the economic composite and rates is high. The long-term trend lines suggest normalization of the economy and rates at 2.5%, assuming no recession.

However, Jones’s primary argument for not owning debt has nothing to do with the actual drivers of interest rates.

Debt and Interest Rates: A Complex, Nonlinear Relationship

Paul Tudor Jones argues that higher debt will increase interest rates and create unsustainable borrowing costs. In the interview, he repeated the “debt bears” mantra: the U.S. will eventually go bankrupt. However, his concerns overlook several critical economic realities.

First, the U.S. is a sovereign issuer of the world’s reserve currency. As such, the U.S. government cannot run out of money in a manner that a business or individual can. Debt rollovers, global demand for Treasuries, and flexible monetary policy all work to prevent a fiscal collapse. I am not suggesting that rising deficits and debt levels are NOT challenging. As we will explain momentarily, debt impedes economic growth. However, rising debt and deficit levels do not make bankruptcy inevitable.

Secondly, rising government debt has not correlated with higher interest rates over the past few decades. Since 1980, total U.S. debt as a share of GDP has surged from 156% to nearly 353%. However, economic growth and interest rates slowed during that period. Despite increasing debt, slower economic growth reflects the diversion of productive capital into non-productive debt service. In other words, debt is “deflationary” as it retards economic prosperity.

Lastly, the U.S. is not alone in this current cycle. Major economies like Germany, Switzerland, and Japan have successfully issued long-term debt at near-zero or even negative interest rates. These cases demonstrate that investor demand for government bonds often outweighs concerns about debt levels, particularly when governments offer stability. The U.S. Treasury market is the most significant and liquid globally. That means there will likely continue to be a high demand for U.S. debt, even with increased debts and deficits. As countries seek high levels of safety and liquidity to store their fiscal reserves, the U.S. Treasury will remain the asset of choice.

Inflation Risks Remain Under Control

Jones’s concern about inflation resulting from high deficits overlooks the complex interplay of fiscal and monetary policy and structural economic factors. Inflation can indeed rise if government spending outpaces the economy’s productive capacity. However, recent inflationary pressures in the U.S. were driven largely by supply chain disruptions, energy shocks, and pandemic-related spending rather than chronic deficits.​

To understand inflation shock, we can remodel our economic composite above to represent the drivers of inflation. Wage growth provides consumers with more money to spend. As consumers spend more money, economic demand increases, increasing prices. As economic demand strengthens, borrowing costs increase to reflect stronger demand for loans, passed on through higher prices. Therefore, unsurprisingly, inflation has an 85% correlation to economic growth, rising wages, and higher rates.

The fallacy in Jones’s argument should be evident. Interest rate increases, without a subsequent rise in economic growth and wages to support higher borrowing costs, slows economic activity. Slowing economic growth leads to increased unemployment, thereby reducing inflation and interest rates.

The Japan Experience

Furthermore, Jones’ example of the “Japan experience” with debt fails to support his concerns. In Japan, high debt levels did not lead to runaway inflation or surging interest rates. Despite a 250% debt-to-GDP ratio, Japan faced persistent deflation and falling interest rates for the past 30 years. The debt problem was compounded by weak demand and an aging population. Those factors, when combined, suppressed inflationary pressures despite aggressive monetary easing​

In advanced economies with robust institutions and stable financial systems, inflation risks from deficits are more manageable than Paul Tudor Jones suggests.

I am certainly not ignoring the current fiscal challenges. Those are undeniable, with the national debt nearing 120% of GDP and deficits projected to persist due to rising healthcare and Social Security costs. However, those levels suggest economic growth will weaken, inflation will ease, and interest rates will decline over time.

Debt Rollovers and Fiscal Sustainability

Contrary to Jones’ assertion that debt will become unmanageable, debt rollovers are a standard practice for governments with large borrowing needs. The U.S. Treasury regularly issues new debt to refinance maturing obligations, spreading repayment costs over time. Historical data shows that even when debt levels rise temporarily, they can stabilize through economic growth, moderate inflation, and fiscal adjustments.​

A research paper by Paul Goldsmith-Pinkham suggests that higher debt levels do not inherently raise fiscal costs. As long as real interest rates remain below the economy’s growth rate, governments can roll over debt without increasing the debt burden. This scenario has played out in the U.S. in recent years, with strong post-pandemic growth helping to offset the cost of higher borrowing.​

Reality: The U.S. Is Unlikely to Face a Fiscal Crisis Anytime Soon

Jones’ prediction that rising debt will lead the U.S. toward financial ruin underestimates the resilience of the American economy and the tools available to policymakers. The U.S. enjoys several structural advantages—such as the global demand for Treasuries, the dollar’s reserve currency status, and the Federal Reserve’s ability to manage liquidity—that make a debt crisis highly unlikely. While rising deficits and interest rates present challenges, the U.S. has ample capacity to manage its debt sustainably, especially if economic growth remains near long-term trends.

However, given the impact of rising debt, increasing deficits, and demographic headwinds (the 3-D’s), which retards economic prosperity over time, Central Banks will continue to suppress interest rates to keep borrowing costs down.

As with James Grant’s analysis, the problem with Paul Tudor Jones’ assumption that rates MUST go higher is three-fold:

• Central Banks will continue to buy bonds to maintain the current status quo but will become more aggressive buyers during the next recession. The Fed’s next QE program to offset the next economic downturn will likely be $6 trillion or more, pushing the 10-year yield towards zero.

• All interest rates are relative. The assumption that rates in the U.S. will move substantially higher is likely wrong. Higher yields on U.S. debt attract flows of capital from countries with low to negative yields, pushing rates lower in the U.S. Given the current push by Central Banks globally to suppress interest rates to keep nascent economic growth going, an eventual one percent yield on U.S. debt is not unrealistic.

• The budget deficit balloon. Given Washington’s lack of fiscal policy controls and promises of continued largesse, the budget deficit is set to swell above $2 Trillion in coming years. This will require more government bond issuance to fund future expenditures, which will be magnified during the next recessionary spat as tax revenue falls.

If you need a roadmap, refer to the chart of Japan above.

Historical evidence suggests that interest rates will be lower, not higher, unless the Government embarks on a massive infrastructure development program. Such would potentially revitalize the American economy and lead to higher rates, more substantial wages, and a prosperous society.

However, outside of that, the path of interest rates in the future remains lower.

Tyler Durden Fri, 11/15/2024 - 11:20

Zelensky: "The War Will End Faster" Under Trump Administration

Update(1120ET): Merely a year ago or less, Ukrainian officials and Kiev's staunchest supporters essentially considered it 'treason' to even broach the possibility of peace talks with Russia. President Zelensky himself had frequently made it clear that he would not consider it so long as Putin is in power.

But on Friday, Zelensky issued some remarks which constitute a glaring 180-degree reversal, in the wake of Trump's election victory, on the prospect of peace in Ukraine. Zelensky stated that under the Trump administration "the war will end faster". He laid out the following in a fresh interview, according to a regional source:

"It is very important for us to have a just peace, so that we do not feel that we have lost our best because of the injustice that has been imposed on you. The war will end, but there is no exact date. Certainly, with the policies of this team that will now lead the White House, the war will end sooner. This is their approach, their promise to their society, and it is also very important to them," he said.

As for the earlier Putin-Scholz phone call, it ended on a note that the two leaders should talk again soon. Their discussion has been described as "frank" and "detailed" concerning the Ukraine conflict. Putin conveyed to the German leader that Russia-German relations have seen "unprecedented degradation" - according to TASS.

Below is the call summary/readout from the Russian side:

"The chancellor and the Russian president agreed to stay in contact from now on. The German government will ensure that allies and partners, as well as the EU and NATO leadership are informed," the source said.

In addition to the information released by the German government's press service after the conversation, the source said that Scholz expressed concern over reports about the alleged deployment of North Korean servicemen to Russia. According to him, this could allegedly lead to "a significant escalation and expansion of the conflict."

And most importantly the two expressed a desire for formal Ukraine talks:

Russia is open to talks to settle the conflict in Ukraine based on the proposals that were announced at the Foreign Ministry in June, Russian President Vladimir Putin told German Chancellor Olaf Scholz as they spoke by phone, the Kremlin said.

"As for the prospects for a political and diplomatic settlement of the conflict, the Russian president noted that the Russian side has never refused and remains open to the resumption of the negotiations that were interrupted by the Kiev regime," the Kremlin said in a statement. "Russia's proposals are well known and outlined, in particular, in a June speech at the Russian Foreign Ministry."

All of this - especially Zelensky's apparent change of heart (or else realization that the war is unwinnable at this point) - points to strong momentum that talks could get underway before Trump is even sworn in on Jan.20. Zelensky, when he last met Trump in New York, had described that Ukraine has "been through hell".

via dpa

* * *

Potential near-term Russia-Ukraine negotiations to end the war continue to move toward reality in the wake of Donald Trump's election win. 

German Chancellor Olaf Scholz and Russian President Vladmir Putin are planning to hold their first phone call in almost two years on Friday. 

Via Associated Press

Bloomberg was the first to report the development, citing several sources, and highlights the uncertainty felt in Europe concerning Ukraine policy over Trump's return to the White House. "Germany is Ukraine’s second-biggest supporter after the US and has pledged billions of euros in additional aid," it notes.

Scholz first announced Sunday his desire to speak to Putin "soon" about achieving peace in Ukraine, bringing the war to an end. "Yes, I decided to talk to the president of Russia at the right time. But I'm a responsible politician, I don’t do it alone," Scholz told a German broadcaster.

The timing of the German leader's words suggest Trump being in the White House provides the nudge to finally get serious about diplomacy and negotiations with Moscow:

Scholz spoke with U.S. President-elect Donald Trump on Sunday, with the German chancellor’s spokesman saying the two discussed working "toward a return to peace in Europe."

The last phone call between Putin and Scholz was all the way back in December 2022. Scholz made the call to urge that Russian troops leave Ukraine and return home, and there's been radio silence between the two throughout the war.

Since then, German Foreign Minister Annalena Baerbock has insisted that Putin was "no longer even prepared" to speak with the chancellor, amid Berlin ramping up is military support for Ukraine and drastically expanding its defense budget, reversing a posture of historic neutrality.

France's Macron had been the only European leader to hold semi-regular contact with Putin throughout the opening months of the war, but he came under severe criticism from some corners of Europe for doing so.

But the drastic political change in Washington is clearly changing the mood in war-weary Europe as well. Now, even Ukraine is getting the memo - that there's about to be a different track.

"Ukrainian officials have said for months that they would not cede territory occupied by Russia in any peace settlement. Now, as Ukraine contemplates an accelerated timetable for negotiations pushed by President-elect Donald J. Trump, it is putting at least as much importance on obtaining security guarantees as on where an eventual cease-fire line might fall," NY Times wrote Thursday.

"With Ukrainian forces steadily losing ground in the east, two senior officials said that defending Ukraine’s interests in potential talks would hinge not on territorial boundaries, which are likely to be determined by the fighting, but on what assurances are in place to make a cease-fire hold," the report continued.

"The territorial question is extremely important, but it’s still the second question," one Ukrainian official told the Times. "The first question is security guarantees."

Trump's team has been talking about pressuring Kiev to halt aspirations to join NATO for twenty years. It would likely be on that basis that Ukraine will seek pledges from Western partners for protection in the event Moscow breaks any potential deal.

Tyler Durden Fri, 11/15/2024 - 11:20

New York Relaunches Congestion Pricing With $9 Toll, But Plan Is DOA Thanks To Trump

Several months after abruptly pulling the plug on a $15 charge just hours it was set to start, arguing it would have strained working families and small businesses, New York Governor Kathy Hochul decided to strain working families and small businesses anyway, and announced plans to revive congestion pricing for drivers entering large parts of Manhattan.

Hochul announced the initiative on Thursday, this time with a $9 charge for most motorists driving into Manhattan’s central business district.  However, the proposed plan is DOA: since Donald Trump opposes the plan, the governor has limited time to implement the new charge before the Jan 20 inauguration and avoid the incoming administration stalling the program, as it did during his first term. The $9 toll could bring in revenue that the Metropolitan Transportation Authority, which runs the city’s decrepit transit network, would borrow against to modernize a more than 100-year-old system.

Gov. Kathy Hochul announced the relaunch of the congestion pricing plan... starting as early as January 2025. The plan will toll drivers that enter the busiest part of Manhattan $9. Hochul says it would save daily commuters nearly $1,500 annually. @News12 pic.twitter.com/uboN5gCDyV

— Natalie Hernandez (@nataliehertv) November 14, 2024

“Governor Hochul paused congestion pricing because a daily $15 toll was too much for hard-working New Yorkers in this economic climate,” Avi Small, a spokesperson for the governor, said in a statement. “Tomorrow, the Governor will announce the path forward to fund mass transit, unclog our streets and improve public health by reducing air pollution.”

Donald Trump immediately responded, saying that “I have great respect for the Governor of New York, Kathy Hochul, and look forward to working with her to Make New York and America Great Again. But I strongly disagree with the decision on the congestion tax."

“It has never worked, but especially so with a city, town, or village that is trying to come back from very rough times, which can certainly be said of New York City. It will put New York City at a disadvantage over competing cities and states, and businesses will flee.”

Trump, whose platform of tax breaks for workers and retirees helped secure his return to the White House, said it would be those struggling to make ends meet who would suffer most.

“Not only is this a massive tax to people coming in, it is extremely inconvenient from both driving and personal bookkeeping standards. It will be virtually impossible for New York City to come back as long as the congestion tax is in effect,” he said.

So $15 is too expensive, as Hochul herself admitted, but $9 is "just right" for working families? Meanwhile, as it pleads that the MTA is in dire straits, New York spends over $4 billion on illegal aliens: If just these funds were redirected, NYC would have more than enough to support the MTA without further financial burdens. But, alas, Democrats seem unable to do simple math.

The liberal agenda seems relentless, never giving us a moment to rest. Just as we celebrated the election of a new president, Governor Kathy Hochul reminded us of our blue-state reality by reviving the push for congestion pricing. She wants to implement this plan by the end of… pic.twitter.com/fqr2UNBIZs

— Ying Tan (@YingTanForNY) November 14, 2024

Pausing the congestion pricing opened up a $15 billion deficit in the MTA’s current capital plan and deferred signal upgrades, subway renovations, accessibility projects and purchasing 250 electric buses; it did however enable continued embezzlement, corruption and inefficiency that have marked the MTA for decades. The MTA’s next five-year $65.4 billion capital budget is also at risk as nearly half of it is unfunded. The transit provider is seeking to rehabilitate aging structures after years of neglect and improve service to attract more riders to its system of subways, buses and commuter rail lines.

Hochul’s revised plan would initially slash the prior tolling structure by 40%, with E-ZPass motorists paying $9 rather than $15 to drive south of 60th Street during peak hours, according to the people familiar.

To begin the program, Hochul needs the federal government to approve the revised tolling structure and to also sign a value pricing pilot program agreement with New York. However, it is guaranteed that the incoming Trump administration will not make those authorizations after the president said he would terminate congestion pricing in his first week back in the White House.

Even if Hochul gets federal approval - which it won't - Bloomberg reports that congestion pricing faces several lawsuits, including from New Jersey Governor Phil Murphy, who says the environmental review of the tolling program was insufficient and doesn’t show the potential impacts to some Garden State neighborhoods. A lower fee fails to make up for the failures of that review, lawyers for Murphy wrote in a letter dated Wednesday and filed to the court.

“Merely lowering the toll amount would not cure the defects in the National Environmental Policy Act review process conducted by the defendants when the Federal Highway Administration issued its Finding of No Significant Impact,” the lawyers wrote in the letter, which urges the court to make a ruling in the case.

If implemented, the toll would apply to motorists entering Manhattan’s central business district, which runs from 60th Street to the southern end of the island. New York City is the world’s most-congested urban area, according to INRIX Inc., a traffic-data analysis firm.

The goal of congestion pricing is to reduce the number of the vehicles in the district by 17% and improve air quality. It may be difficult to hit those targets with a lower $9 toll because it may fail to persuade commuters and visitors to use public transportation rather than cars to get into Manhattan.

The tolling program could still face risks even after Trump takes office. Brad Lander, New York City’s comptroller — who supports congestion pricing and has been push Hochul to restart it — warned that the incoming administration could try to end the program through litigation or administrative action.

“Theoretically in the same way that New Jersey sued, the federal government could turn around and sue to say it was done improperly,” Lander said Wednesday, speaking about the environmental review process.

Trump and Hochul have been sharply at odds over the years, but had a warm phone call after the Republican won the Nov. 5 election over Vice President Kamala Harris.

Hochul, 66, has the power to pardon Trump of his May conviction on 34 counts of falsifying business records to conceal reimbursement of 2016 hush money payments — should Judge Juan Merchan not dismiss the case outright pending sentencing later this month.

Trump’s ambitious tax-reform plans call for eliminating the $10,000 State and Local Tax (SALT) federal tax deduction cap — which hits New Yorkers particularly hard –– as well as eliminating taxes on tips, overtime and Social Security benefits.

 

 

Tyler Durden Fri, 11/15/2024 - 11:00

SpaceX Plans Tender Offer At $250 Billion Valuation

Elon Musk could be on his way to becoming the first trillionaire by the end of the decade, as two of his private companies soar in value, while his public company, Tesla, recently surpassed a trillion dollars in market capitalization. 

A new report from the Financial Times cites people familiar with the discussions, stating that Musk's SpaceX—the world leader in rocket launches and high-speed space internet (via Starlink)—is preparing to launch a tender offer in December to sell existing shares at $135 each. This indicates that the rocket company's valuation has surged by another $40 billion, reaching $250 billion, up from $210 billion earlier this year.

Starship rocket booster caught by tower pic.twitter.com/aOQmSkt6YE

— Elon Musk (@elonmusk) October 13, 2024

The people said Musk's artificial intelligence startup xAI recently raised $5 billion at a valuation of $45 billion, doubling in just a few short months. Soaring values in Musk's private companies have added to his overall net worth. 

Musk's cozy relationship with the Trump administration will likely result in Tesla winning the multi-year EV price war. A Reuters report from Thursday detailed how Donald Trump was planning to eliminate the $7,500 consumer tax credit for EVs. In return, this would destroy Musk's competition, such as Rivian, Luicid, and legacy automakers.

As we previously noted, "Musk's strategy to win the EV price war: Build the largest EV business with taxpayer dollars, popularize EVs, allow other startups and OEMs to enter the market, and then support politicians who want to end EV subsidies, crushing the competition and leaving Tesla reigning supreme."

Meanwhile, 'the Trump bump' in equity markets sent Tesla shares over the trillion-dollar market cap level this past week.

According to the Bloomberg Billionaires Index, Musk's net worth has risen to $306.5 billion, up $77.5 billion on the year - primarily because of the latest Tesla price surge. 

In September, wealth-tracking website Informa Connect published a report forecasting Musk could become the world's first trillionaire by 2027. This news is likely disheartening for struggling WeWork co-founder Adam Neumann, who famously said in 2019 that he wanted to live forever and become the first trillionaire. 

Musk's dominance in space, EVs, AI, and media—with no other billionaire even close to his level of success, and more importantly, to his contributions to the nation's success in this global technology race—has only infuriated far-left, anti-American Democrats...

If you’re wondering how bitter the Left is at @elonmusk for trying to save America, Maddow is straight up demanding the Kamala administration (not gonna happen!) cancel all SpaceX govt contracts. Because “national security.” pic.twitter.com/kihdzhkAZS

— Buck Sexton (@BuckSexton) November 5, 2024

... who are now calling for the dismantling of Musk's companies. 

Tyler Durden Fri, 11/15/2024 - 10:20

It's The Reboot Of The Jetsons

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

Commentary

The original “Jetsons” series from 1962–1963 is not easy to find in syndication. That’s too bad. It was a wonderful show. 

Mario Queiroz, Google vice president of product management, shows the new Google Home during Google I/O 2016 at Shoreline Amphitheatre in Mountain View, Calif., on May 19, 2016. Justin Sullivan/Getty Images

The theme of this animated show (“cartoon”) was that in the future the technology would make life much more convenient but all the usual problems would still be there. The kids would still be annoying and expensive but ultimately del ightful, the job still arduous even if it is only a few hours a week, the boss would still be officious, people would still get sick, and all the normal dynamics of human life would still be there. 

The original Jetsons was the opposite of transhumanism. All that would really change is that everything would be speedier. The cars would fly. We would live in the clouds. We would have a video phone. Robots would do the chores. Teachers would be electronic. We would travel with ease. Buildings would appear much more quickly, and be torn down too. 

There would still be cops on the beat, thieves on the loose, lessons to learn at school, and teenage daughters that spend too much money. Hilariously, the little robots flying around always had puffs of smoke coming out of them as if powered by natural gas. You still had to fuel them. 

That’s what made the series so delightful. The future promises to be wonderful but not solve all our problems. Human nature itself would still be present, unchanged, and present the usual challenges and dilemmas. The series both ramped up our expectations and dialed them back. 

It was oddly realistic. We did (eventually) get video phones, electronic teachers, and work itself would be lessened in physical difficulty and time spent. But that would only leave us with the same old problems of quirky personalities, family instability, problems with coworkers, and capital depreciation (everything was always being repaired). 

In that way, the series perfectly captured the culture of a time and its forward vision. 

I wrote a book about it (“It’s a Jetsons World”). It was the height of techno-enthusiasm. I tried to be realistic but I was caught up in the moment, and was a bit too optimistic and had not considered the downside of digital everything. 

In particular, I had not thought through the implications of such a speedy conversion from analogue to digital and just how fragile that would be. Nor had I considered the surveillance angle much less the way our information would become commodified and sold to governments to oppress us even more. Finally I had not imagined that the corporate leadership of the new digital world would be so compromised by involvement in government. 

It struck me that all this new technology represented nothing but liberation. I was wrong about that and had not taken seriously the first lesson of the Jetsons show, namely that all the problems would remain present despite all the technological changes. 

In my book, I mention briefly that the series was rebooted twenty years later, in the mid-eighties. It had better production values, and some new characters. The biggest change was that the mood was darker. The gadgets changed from happy and friendly to vaguely burdensome even to the point of being menacing. 

The machines started talking back and even pushing back. Humans were less in charge and machines more so. They became a source of oppression rather than a universal force of emancipation. They seemed almost to have volition. In a brilliant anticipation of “artificial intelligence” humans seemed to lose some modicum of control as the machinery became ever more imposing. 

I never liked the rebooted series probably because it was suggesting something that I did not want to hear. I did not believe back in 2011 when my book came out that my glorious phone and my wonderful websites would eventually turn on me. But, as it turns out, the reboot of the series was precisely right, as we began to learn some twenty years later. 

It’s long past time that we all take a more critical look at the technologies that define our current times. The National Security Administration and the government generally have become major customers of all the main platforms, including Amazon with its acres of servers for sale and Microsoft which sells so much to the state. 

That’s just the start of it. Big tech giants have been found to be promoting, without being asked, visions of the world that are contrary to what a majority of Americans favor, as well as engaging in censorship surrounding key elections, showing themselves to be far from neutral. 

For making available a relatively censorship-free venue, Elon Musk’s X has been pilloried by lawfare of all sorts, and became a pariah in the tech world simply by showing support for Trump over the censors. 

There are ways to push back by simply saying no. I used to love these home appliances made by Google, Amazon and the like until I realized that, of course, they are, in effect, tools of surveillance. Yes, they are always listening, else they could not hear when you call them to attention. Once you think about it, the denials are preposterous. 

Because I was such a fan, one company kept sending more appliances to me. I had three in my home in addition to the main one, and started giving them out to friends. One day it dawned on me that this company was not being sweet and generous but rather had its own self-interest going on. I dreaded it because I had gotten used to them all, but I unplugged them all and threw them out. 

Thereafter I would have to check the time by looking instead of yelling and have to stop and start music by standing up and moving around the room. It turned out to be just fine. I missed nothing about these contraptions. In fact, it was the reverse. I found myself relaxing precisely because I did not have a surveillance device in my home! It felt private for the first time in many years. 

Try it out yourself! I took a hammer to mine. It felt good. 

I’ve turned off as many notifications as possible on my phone and experienced blessed peace as a result. I’ve learned to eschew all “smart” products and choose old-fashioned ones. I’m much happier as a result. Similarly, there is a case for storing up some silver dimes and cash in case the empire of digits goes down. 

There are many ways to secede from all the nonsense. It just takes a bit of effort. 

What I want is to go back to the first iteration of “The Jetsons” when the technology was fun while hoping to avoid the second interaction when the technology became a menacing threat to the good life. 

Speaking of which, can Trump please restore the old Smithsonian Museum of Arts and Industry in Washington, D.C.? It was the first one erected. It was a glorious homage to the practical arts that made America great. It was closed and replaced in the Obama years with a “Museum of the Future” filled with junk no one wants to see. The great things that filled the museum are now stored in a government warehouse somewhere. Maybe Trump can bring it back! 

We’ll see. I don’t believe a president can solve all the problems with technology today. That leaves it to the rest of us to be more attentive and not find ourselves blindly stumbling into a dystopian world created by a bunch of irresponsible and freedom-hating tech titans. We should be in charge of the machines and not the reverse. 

It’s good to be reminded of that from time to time. 

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 Fri, 11/15/2024 - 10:00

Musk Secretly Met With Iran's UN Ambassador, Raising Hopes Trump Will Keep Hawks At Bay

In the latest surprising development accompanying Donald Trump's return to the presidency, the New York Times has reported that Trump advisor Elon Musk quietly met with Iran's United Nations ambassador on Monday to discuss how the United States and Iran might ease tensions.  

News of Musk's peace-seeking overture came after Trump caused widespread dismay among America-First conservatives and libertarians by nominating an assortment of anti-Iran hawks and zealous backers of the State of Israel to important foreign policy and national security positions. Those selectees included Sen. Marco Rubio for Secretary of State, Fox News host Pete Hegseth for Secretary of Defense, and New York Representative and campus speech-policer Elise Stefanik for UN ambassador. 

Given Israeli Prime Minister Benjamin Netanyahu's long-held ambition to enmesh America in a war with Iran, Trump's decision to surround himself with extreme advocates for Israel dampened hopes that he would make good on his campaign pledge to bring peace to a long-smoldering Middle East that's been ravaged by escalating and widening warfare since the Oct. 7 2023 Hamas invasion of southern Israel. However, the revelation of Musk's meeting with Iranian UN Ambassador Amir Saeid Iravani bolstered hopes of an earnest Trump pursuit of "peace through strength." 

Elon Musk leaving Delaware's Court of Chancery in 2021 (Michael A. McCoy/Getty Images)

According to the Times report, which cited anonymous Iranian officials, the meeting was initiated by Musk, and was held at a secret New York location of the Iranians' choosing. The Iranians characterized the discussion as "positive" and "good news." Iravani was said to have made a direct business appeal to the world's richest man, urging him to pursue an exception to America's dense thicket of sanctions that bar companies from doing business with Iran. 

Trump communications director Steven Cheung deflected an inquiry about the meeting: “We do not comment on reports of private meetings that did or did not occur,” he said. However, transition team spokeswoman Karoline Leavitt issued a statement that seemed to implicitly confirm the meeting, telling the Times: 

"The American people re-elected President Trump because they trust him to lead our country and restore peace through strength around the world. When he returns to the White House, he will take the necessary action to do just that.”

Iranian foreign minister Abbas Araghchi took to social media on Wednesday to reiterate his government's interest in pursuing peace. Following a meeting with International Atomic Energy Agency director general Rafael Mariano Grossi, Araghchi wrote, “Differences can be resolved through cooperation and dialogue. We agreed to proceed with courage and good will. Iran has never left the negotiation table on its peaceful nuclear program.”

"The reason why Elon’s outreach is so important is that Tehran is on the cusp of deciding whether to prepare for Trump’s sanctions escalation by expanding Iran’s nuclear and missile program and potentially even retaliating against Israel’s October 26 strikes through a massive attack on the country," wrote the Quincy Institute's Trita Parsi on X. "This could, of course, set off a major war that could engulf the US."

During his first administration, Trump -- who has received $200 million in campaign contributions from pro-Israel billionaires -- withdrew the United States from a painstakingly-negotiated agreement between Iran and several Western nations that imposed unprecedented restrictions and transparency on the country's nuclear program. Iran remains a party to the Nuclear Non-Proliferation Treaty. Meanwhile, Israel -- which possesses an estimated 90 or more nuclear warheads -- has refused to join, which makes every dollar of American aid to Israel illegal under US law.    

Iranian UN Ambassador Amir Saeid Iravani met with Elon Musk on Monday (Iranian Students' News Agency)

Trump also ordered the assassination of Iranian general Qassim Suleimani, a move that was condemned at the time by Tulsi Gabbard, whom Trump this week selected to serve as his Director of National Intelligence. Calling it an "illegal and unconstitutional act of war," Gabbard asked, "Is our country’s national security better off because of Donald Trump’s actions and decision? And the answer to that is no."  

Musk's involvement in high-stakes Middle East diplomacy underscores the extraordinary role he's playing in the Trump transition, as the Times noted: 

Mr. Musk has emerged as the most powerful private citizen in the Trump transition, and has sat in on nearly every job interview. During a call last week with Ukraine’s president, Volodymyr Zelensky, the president-elect handed the phone to the billionaire. Mr. Musk has played a key role in providing communications capability to Ukraine in the war with Russia.

Given his early personnel decisions, Trump will face intense pressure from aggressive interventionists in the mold of his previous national security advisor John Bolton. To an even greater extent than before, his new administration will pit America First principles against what George Washington would have characterized as a dangerous, "passionate attachment" to Israel. 

It's something like an immovable object meeting an unstoppable force. To ensure America First prevails, here's hoping Musk can quickly demonstrate a mastery of political science that's as extraordinary as his command of the physical sciences -- millions of lives and trillions of dollars hang in the balance. 

Tyler Durden Fri, 11/15/2024 - 09:40

New York Businesses Love Trump, But US Manufacturing Contracted In October

The Empire State Fed Manufacturing Survey of general business conditions exploded higher in November. The headline general business conditions index shot up forty-three points to 31.2, its highest reading in nearly three years. New orders and shipments rose substantially

Source: Bloomberg

That is the second largest MoM jump in the survey's sentiment in history (beaten only by the massive stimmies in June 2020 of the COVID lockdowns)...

Source: Bloomberg

“Manufacturing activity grew strongly in New York State in November, with firms reporting sharp increases in new orders and shipments. Price increases remained steady and modest while firms remained optimistic about future conditions.”

~Richard Deitz, Economic Research Advisor at the New York Fed

But, while New York businesses seem to love Trump (we don't know when the survey was taken but still, it's a funny move to ascribe to a business-unfriendly Democrat win?), US Industrial Production declined 0.3% MoM in October (-0.4% exp) and was revised lower for September

Source: Bloomberg

...and Manufacturing contracted for the second straight month (4th of the last 5)...

Source: Bloomberg

Bear in mind that September's Industrial Production was revised lower - the ninth downward monthly revision in the last ten months...

Source: Bloomberg

Finally, capacity utilization tumbled to just 77.1% - its lowest since April 2021...

Source: Bloomberg

A bone for the doves!

Tyler Durden Fri, 11/15/2024 - 09:30

Earlier from the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) decreased 0.3 percent in October after declining 0.5 percent in September. A strike at a major producer of civilian aircraft held down total IP growth by an estimated 0.3 percentage point in September and 0.2 percentage point in October. Hurricane Milton and the lingering effects of Hurricane Helene together reduced October IP growth 0.1 percentage point. In October, manufacturing output moved down 0.5 percent, the index for mining rose 0.3 percent, and the index for utilities gained 0.7 percent. At 102.3 percent of its 2017 average, total IP in October was 0.3 percent below its year-earlier level. Capacity utilization moved down to 77.1 percent in October, a rate that is 2.6 percentage points below its long-run (1972–2023) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and above the level in February 2020 (pre-pandemic).

Capacity utilization at 77.1% is 2.6% below the average from 1972 to 2023.  This was below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production decreased to 102.3. This is above the pre-pandemic level.

Industrial production was below consensus expectations.
The Boeing strike and hurricanes impacted the report this month.

Vaccine Stocks Slide Further After Trump Taps RFK Jr. To Lead HHS; CNN Outraged

Shares of vaccine makers slumped in premarket trading, extending losses for a second day after President-elect Donald Trump nominated Robert F. Kennedy Jr. as the Secretary of Health and Human Services. Wall Street analysts told clients this development has sparked vast uncertainty across the biotechnology sector. 

The 70-year-old Kennedy has been a longtime health advocate, and Trump said he would let Kennedy "go wild" should he win the November 5 election.

"He's going to help make America healthy again. … He wants to do some things, and we're going to let him get to it," Trump said during his victory speech.

However, making America healthy again will require a complete overhaul of the FDA and USDA. Kennedy could dismantle the longstanding cozy relationships between big pharma and the federal government during Trump's second term. This very prospect spooked vaccine stocks in premarket trading in New York, extending losses from Thursday.

US Premarket: 

• Moderna (-2.2%), Novavax (-2.6%) and BioNTech (-2.1%) extended losses from Thursday's decline

EU Cash: 

• In Europe, shares of European vaccine makers such as Sanofi and GSK traded lower

"Healthcare/Pharma in focus this morning (GSXEPHAR), following Robert F Kennedy being confirmed as Trump's nominee for health secretary which sparked a pharma and specifically vaccine makers sell off into the close yesterday. To this point, Kennedy has been vocal on vaccines in the past, seen as one of the most prominent anti-vaxxer's in the US. Hence witnessing a -3sd move in our Pharma basket," Goldman's Martin Ehigiator told clients on Friday morning.

Deutsche Bank analyst Emmanuel Papadakis told clients this morning that his team slashed GSK's rating to "Hold" following the news. 

"We consider vaccines to be amongst the greatest scientific achievements to impact public health: unfortunately this view is not shared by the nominee," Papadakis said. 

Kennedy's track record of questioning experimental mRNA vaccines and taking on government bureaucracies overseeing the vaccine industry has caught the attention of many Americans... 

He stated earlier this year:

"Something is wrong with that whole system ... 

"When you feed a baby, Bobby, a vaccination that is like 38 different vaccines and it looks like it's meant for a horse, not a10-pound or a 20-pound baby… do you ever see the size of it, its massive, then you see the baby all of a sudden starting to change radically. I've seen it too many times."

And, of course, Kennedy taking on big pharma's corruption in federal agencies and the entire public health sector is just bad news for profits. Wall Street analysts outlined this very clearly to clients (courtesy of Bloomberg): 

RBC Capital Markets

• Analyst Brian Abrahams says Kennedy's selection may have "far- reaching and difficult-to-project implications for the biotechnology sector"
• This, Abrahams says, adds a "considerable layer of uncertainty and challenging investability until there is greater clarity on his likelihood of actually gaining the role, his directives, and who else will lead the other key federal healthcare agencies"
• There is uncertainty over whether Kennedy will ultimately take the role, and that could mitigate potential risks, though Abrahams says it looks "more likely than not he will"

JPMorgan

• Analyst Chris Schott says it is difficult to evaluate the exact impact Kennedy would have on the biopharma industry at this point, but is not surprised the sector has come under pressure due to Kennedy's previously stated views
• With the HHS secretary overseeing organizations with around 80,000 employees along with various federal and state laws, Schott expects it would take time to enact major changes

Wells Fargo

• Analyst Larry Biegelsen says Kennedy's recent policy ideas are not focused on medtech; this could result in the sector "being relatively well positioned within healthcare"
• However, while current policy ideas do not directly impact devices, they "may indirectly or they could in the future," Biegelsen says
• For example, Kennedy's concerns about vaccines may "lead to a reduction in vaccination rates which would negatively impact device companies that make the syringes for vaccines," Biegelsen says

TD Cowen

• Analyst Rick Weissenstein says he continues to believe Kennedy will not be confirmed by the Republican-controlled senate, but notes Trump could use a recess appointment to get him into office
• "If Trump manages to make a recess appointment, RFK Jr.'s term would only last for about two years at the most, though Kennedy Jr. could be appointed again through the same recess appointment or through the regular senate confirmation process"

RBC's Abrahams noted, "Whether RFK ultimately takes the seat is still uncertain," adding, "The Senate may push back." 

Kennedy founded the nonprofit Children's Health Defense about a decade ago, one of the most well-funded organizations focusing on children's health. 

Meanwhile, CNN's Sanjay Gupta melted down over Kennedy's new possible role to head up HHS. 

"I can't think of any single individual who would be more damaging to public health than RFK," Gupta said.

CNN freaking out about @RobertKennedyJr taking over HHS: "Somebody said to me today, 'I can't think of any single individual who would be more damaging to public health than RFK'" pic.twitter.com/r4742BvIwF

— Tom Elliott (@tomselliott) November 14, 2024

In other words, Kennedy would disrupt and ban big vaccine companies from controlling the airwaves with advertising dollars, and in return, ad revenues for CNN and other MSM outlets would plummet. 

Also, Stephen Colbert threw a tantrum overnight because this meant the late-night show's ad revenues from big pharma would implode.

CNN freaking out about @RobertKennedyJr taking over HHS: "Somebody said to me today, 'I can't think of any single individual who would be more damaging to public health than RFK'" pic.twitter.com/r4742BvIwF

— Tom Elliott (@tomselliott) November 14, 2024

Colbert was big pharma's cheerleader. 

Stephen Colbert, winning hearts and minds of the vaccine hesitant pic.twitter.com/fa98vRrcRj

— Daily Caller (@DailyCaller) September 29, 2021

Before the 2020 election Stephen Colbert was doing skits encouraging people to be skeptical of Big Pharma and its motives.

After the election he was dancing like a fool while surrounded by people dressed as syringes. pic.twitter.com/9IXtxKRi7M

— MAZE (@mazemoore) March 29, 2024

Why does the only remedy for illness always seem to be vaccines and medicines from big pharma? Well, it's a big business. Eating healthy and exercising doesn't make Wall Street money. It's time for reform. 

Tyler Durden Fri, 11/15/2024 - 09:05

"What Happens When China Realizes It Has No Option But To Stimulate?"

By Russell Clark, author of the Capital Flows and Asset Markets substack

America Created The Trade Imbalance

Donald Trump has rallied against nations that run trade surpluses with the US, accusing them of stealing American jobs. Prior to the 1980s, the US ran a flat current account (of which the trade balance is the largest component). Moving from the gold standard was a key driver in the ability for trade deficits to open up. But why does only the US run such large trade deficits?

Korea offers a good explanation of how America created the trade deficit. The Korean example pretty much generalizes across east Asia, and unlike Japan in 1980s, or China now is not seen as a threat, so it allows for more rational analysis. During the boom years of Korea in the early 1990s, it was running a close to flat trade balance. It was importing as much as it was exporting.

Korea’s problem was that it had come to rely on global (read American) financing. We can most clearly see this using BIS data. This looks at claims of foreign banks by Koreans versus claims by Koreans on foreign banks. When the number rises, it means foreign banks are more heavily participating in the Korean financial system.

Surges in lending in 1997 and 2007, preceded the Asian Financial Crisis and Global Financial Crisis. When the flow of capital turned, the Korean Won suffered, and economic activity in Korea weakened dramatically.

Koreans (and in fact Asian, Latin American, Russians and most emerging markets) learned that foreign (mainly American) financing could not be relied on, so nations needed to have strong exports, and to build up foreign reserves. In this respect they were following in the steps of Japan. Prior to Japan, almost all foreign reserves were held as gold, but Japan started to build US treasury reserves, in part to try and slow the strengthening of the Yen.

The rest of the world followed suit, and by 2013, we can count 12 trillion in foreign reserves.

Talk of foreign reserves, and currency movements tend to obscure the simplicity of what is really happening. Governments learned that financial markets can be volatile, and so made a choice to reduce their consumption, and build up savings. Someone had to lend to them, and that was the US. Unlike a bank, this lending happened via trade balance, where the US consumed more that it made. The problem, as we see above with Korea, is when lending nations, like Korea also start to become borrowers. When there are only borrowers, someone is going to not get a loan, and the cycle breaks down. So far, China has been happy to be a lender, in so far it has a record trade surplus.

Trump’s trade policies seem to be focused on getting the trade surplus in balance. I can also safely assume, that he does not plan to achieve this through austerity and recession. For Asian nations they are faced with a tricky choice. Relying on exports, and building foreign reserves leaves them exposed politically, and at risk of tariffs and trade wars. The better option is to stimulate. Japan is probably ahead of the curve in this respect. They have embarked on very stimulatory policy, although relied too heavily on Yen weakness.

But despite Yen weakness Japanese foreign reserves are declining. When I was there in May, it was booming.

We have already seen an inflection in the long term trend of Treasuries versus gold. What happens when China realizes it has no option but to stimulate?

In a strange way, perhaps China’s refusal to stimulate is perhaps the most bullish thing in the market. Collapsing Chinese yields have coincided with great strength in US assets.

In contrast to China, US 30 year treasury yields are looking to test 5% again in my view.

If China chooses to stimulate to reduce its trade surplus, then even higher yields look likely to me. I think Asians have been slow to realize that the game has changed, although Shinzo Abe and Japan seemed to understand it early on.

Stimulus is the only game in town now. When China stimulates, who will be left to lend to the US?

Tyler Durden Fri, 11/15/2024 - 08:45

US Retail Sales 'Control Group' Unexpectedly Tumbled In October After Huge 'Seasonal Adjustment'

If the omniscient chaps at BofA are right, the soft landing narrative is about to crash as they forecast a well below consensus tumble in retail sales this morning...

Source: BofA

...but notably this is mainly due to seasonals, apparently. Seasonal adjustments are likely to impact the October retail sales report. The Census Bureau's projected seasonal factor (SF) for October 2024 is considerably less favorable than the October 2023 SF. Meanwhile, the October SF in the BAC card data is little changed from last year.

Source: BofA

So, given all that, what happened!?

Well, a lot!

• The headline retail sales print beat expectations rising 0.4% (+0.3% exp).

• Core retail sales (ex-autos and gas) disappointed, rising just 0.1% (+0.3% exp).

• But the Control Group - which is used for GDP calculations - tumbled 0.1% MoM (+0.3% exp).

BUT - the disappointments are likely driven by major upward revisions to the prior month

• Headline September revised up from +0.4% MoM to +0.8% MoM.

• Core revised up from +0.7% to +1.2% MoM.

• Control Group revised up from +0.7% MoM to +1.2% MoM.

Source: Bloomberg

The driver of the headline beat was all cars and food...

Core retail sales growth slowed on a YoY basis...

Source: Bloomberg

On a non-seasonally-adjusted basis, retail sales jumped 6.8% MoM...

Source: Bloomberg

A big outlier of an adjustment for an October... it's almost as if they wanted to make the numbers look bad on purpose...

This is odd: Census Bureau used a surprisingly weak - and a big negative outlier - seasonal adjustment factor for retail sales. If comparable adj factor had been used as prior Octobers, retail sales would have been a 1% increase pic.twitter.com/TbtKyyNQop

— zerohedge (@zerohedge) November 15, 2024

The Control Group data is 'noisy' - September was revised up to its strongest MoM jump since Jan 2023 (but this was the second monthly decline in nominal retail sales in three months)...

Source: Bloomberg

A real Goldilocks of a data set there - hot headline, cool core, ugly control group - take your pick, dove or hawk!

Tyler Durden Fri, 11/15/2024 - 08:39



 

This week, we speak with Colin Camerer, Robert Kirby Professor of Behavioral Finance and Economics at California Institute of Technology. Prior to joining Caltech in 1994, Camerer was a faculty member at various institutions including the University of Chicago GSB and the Kellogg Graduate School of Business at Northwestern University, and held a visiting professorship at Oxford University. He is a member of the American Academy of Arts and Sciences and holds fellowship at the Econometric Society and the Society for the Advancement of Economic Theory.

Camerer won the MacArthur Fellow (Genius award) in 2013. His book “Behavioral Game Theory: Experiments in Strategic Interaction” is credited with creating a new field of study within BeFi.

On today’s episode, we breakdown the behaviors that drive our financial decision making.

A list of his favorite books is here; A transcript of our conversation is available here Tuesday.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Corey Hoffstein, CEO/CIO Newfound Research. He is the portfolio manager of the Return Stacked ETF Suite, manging 800 million in ETF assets. Corey is an active researcher and his work has been published in the Journal of Indexing and the Journal of Alternative Investments. He is also the host of the popular quantitative investing podcast Flirting with Models.

 

 

 

 

Colin Camerer’s Book

 

Colin Camerer’s Favorite Books

 

 

Books Barry Mentioned

 

The post MiB: Colin Camerer on Neuroeconomics appeared first on The Big Picture.

On a monthly basis, retail sales increased 0.4% from September to October (seasonally adjusted), and sales were up 2.8 percent from October 2023.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for October 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $718.9 billion, an increase of 0.4 percent from the previous month, and up 2.8 percent from October 2023. ... The August 2024 to September 2024 percent change was revised from up 0.4 percen to up 0.8 percent.
emphasis added

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline was up 0.4% in October.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by 3.5% on a YoY basis.

The change in sales in October were above expectations, and sales in August and September were revised up, combined.

Futures Slide After Hawkish Powell Trims Rate Cut Odds

US equity futures drop, and global stocks slide after Fed chair Jerome Powell signaled the Federal Reserve was in no rush to cut interest rates, and unease built over the composition of Donald Trump’s cabinet. As of 8:00am ET, S&P futures were down 0.5%, off session lows; and pointing to a second day of declines; Nasdaq 100 futures were down 0.9% with Mag 7 mostly lower: AAPL, MSFT and META are all 1.0% lower. Drugmakers Moderna, Novavax and BioNTech all slid in New York premarket trading after Trump picked vaccine-skeptic RFK Jr, as his Health secretary. Domino’s Pizza Inc. was among the prominent gainers, after Buffett took a small stake in the restaurant chain. Europe’s Stoxx 600 index slipped 0.3%, on track for its fourth weekly drop, with pharma sector among the biggest laggards, while the MSCI Asia Pacific Index climbed as much as 0.7%, snapping a five-day loss. Bond yields are modestly lower, and the USD retreated, trimming its weekly gain, as some market participants took profit before key data later on Friday and ahead of speeches from Federal Reserve policymakers despite Powell's clearly hawkish comments. Commodities are mixed, with oil flat, reversing an earlier loss of -1.4%; base metals are lower, while precious metals rise.

Today, we will receive a slew of growth data: more clarity on the Fed’s path may emerge Friday, with retail sales data due and a host of Fed officials set to speak. Bank of America real-time credit and debit card data suggest a big miss in today's retail sales print. We also get the October Industrial Production data.

In pre-market trading, Moderna and other vaccine makers fell in premarket trading after President-elect Donald Trump said he was tapping vaccine skeptic Robert F. Kennedy Jr. to lead the Department of Health and Human Services. Moderna -2%, Novavax (NVAX) -1%. Domino’s Pizza rose 6% after Berkshire Hathaway bought stock in the pizza chain as Chairman Warren Buffett cut back on some long-held investments. Here are some other notable movers:

• Alibaba ADRS (BABA) rises 3% as a profit beat offset revenue that came in below analyst estimates.
• Applied Materials (AMAT) drops 8% after the semiconductor capital equipment company gave an outlook that raised concerns over chip spending.
• Despegar.com (DESP) rises 13% after the online travel booking services company reported third-quarter revenue that beat estimates.
• Palantir (PLTR) gains 2% after the AI software maker said it was transfering its stock listing to Nasdaq from NYSE.

The S&P has now given up about a third of the trough-to-peak gains notched after the US presidential election, as some of the optimism over corporate growth under Trump fades. There’s also realization that interest rates will fall less quickly than anticipated, with recent data showing still-elevated inflation pressures and Powell confirming the Fed may take its time easing policy.

“Equity markets seem to be adjusting to the new rate cut trajectory but it doesn’t seem to be a game changer,” said Mathieu Racheter, head of equity strategy at Julius Baer Group Ltd. “Some controversial cabinet announcements obviously do not help the market.”

Powell’s remarks have pushed odds on a December rate cut to less than 60% from roughly 80% a day earlier. Yields on two-year Treasuries steadied after jumping in the previous session in response. The higher-for-longer rates view is supportive for the dollar, however. The greenback stayed below two-year highs hit on Thursday, but is set for its seventh straight weekly gain. More clarity on the Fed’s path could emerge later Friday, as the US releases retail sales data and a host of Fed officials are set to speak.  

In Europe the Stoxx 600 index slipped 0.3%, on track for its fourth weekly drop, with pharma sector among the biggest laggards, after Trump named RFK Jr to the top health-policy role. Vaccine makers Sanofi, GSK Plc and AstraZeneca Plc fell after the news. Generali and Aegon are both among the biggest gainers, both on their respective solid earnings. Here are the biggest movers Friday:

• Generali advance as much as 5.7%, the best performing stock on the Stoxx 600 Insurance Index, after the Italian insurer beat profit estimates and analysts said it’s on track to meet targets
• Aegon shares rise as much as 4.1% to hit their highest level since May, after the financial services and insurance company lifted its operating-capital generation guidance for the full year
• Evotec surges as much as 23% after the German drug developer received a non-binding proposal from Halozyme Therapeutics to acquire the company for €11 per share, valuing the firm at €2b
• Continental shares rise as much as 3% to their highest intraday value since June as UBS says the planned spinoff of the German car parts firm’s automotive division looks increasingly likely
• Land Securities shares rise as much as 3% after the property investment firm upgraded its guidance. Shore Capital noted management is more confident about an improvement in rental growth
• TT Electronics jumps as much as 39%, the biggest gain in four years, after rejecting takeover proposals tabled by fellow London-listed firm Volex, which has slumped as much as 11% this morning
• InterContinental Hotels edge up as much as 1.1%, hitting a new record-high, after analysts at Barclays upgraded the stock and said they now prefer the hotelier over its rival Whitbread
• European vaccine makers trade lower on Friday, weighing on the broader healthcare sector, after US President-elect Donald Trump said he’s tapping Robert F. Kennedy Jr. to run the Department of Health and Human Services
• Cargotec falls as much as 9.5% after the Helsinki-listed company signed an agreement to sell its MacGregor business to funds managed by Triton for an enterprise value of €480m

Earlier, in Asia the MSCI Asia Pacific Index climbed as much as 0.7%, snapping a five-day loss. Samsung Electronics provided the biggest boost as the South Korean chipmaker rose the most in four years. Mizuho Financial Group and Toyota Motor were among the other notable contributors to the advance. China’s CSI 300 Index dropped despite signs of resilience in the nation’s economy as concerns over a deepening rift with the US outweighed signs of economic stabilization. “Concerns over the Trump administration continue to suppress market risk appetite,” said Ken Chen, an analyst at KGI Securities, referring to Chinese equities. “In addition, some investors interpreted authorities’ appeal to build a slow bull market as an intention to cool down the rally, so they chose to take profit when they can.”

The dollar retreated, trimming its weekly gain, as some market participants took profit before key data later on Friday and ahead of speeches from Federal Reserve policymakers. The market pivoted from Trump trades to the Fed’s cautious tone on interest-rate cuts. Traders pared back December Fed rate-cut odds after Chair Powell’s remarks on economic resilience, stabilizing Treasury yields after Thursday’s swings. The yen outperformed G-10 FX near 155.20/USD on intervention speculation.

In rates, treasuries are mixed with front-end outperforming, recouping some of the losses from late Thursday after comments by Powell curbed wagers on a December rate cut. The yield curve is steeper, likewise reversing part of the flattening reaction to Powell. Front-end yields are richer by more than 3bp with 30-year slightly cheaper on the day; 2s10s and 5s30s curves are nearly 3bp steeper near session wides, erasing about half of Thursday’s flattening. Two-year USTs outperform comparable bunds and gilts, with US yields down 2bps to 4.32%; the US 10-year is little changed around 4.43%, Germany’s also little changed while UK 10-year yield is ~1bp lower on the day. Friday’s US session includes four Fed speakers and retail sales data.  

In commodities, oil and gold headed for a weekly drop, weighed down by the stronger dollar. WTI crude drops 1.1% to $67.94, gold steadies at $2,566/oz.

Another of the so-called Trump trades, Bitcoin, also gave up some gains. It hit a record $93,000 level earlier this week on hopes of crypto-friendly policies from the new US administration, but has since dipped back to $87,000.  “Much of the good news is already priced into Bitcoin. What the market needs now are concrete political steps from the Trump administration,” said Jochen Stanzl, Chief Market Analyst at CMC Markets. “Otherwise, as with many US equities, a cooling-off is overdue for this ‘Trump trade’ as well.”

Looking at today's US economic data calendar we get November Empire manufacturing, October retail sales and import/export price indexes (8:30am New York time), October industrial production (9:15am) and September business inventories (10am). Fed speaker slate includes Goolsbee (8:30am, 2:05pm), Collins (9am, 10:30am), Williams (1:15pm) and Barkin (3pm)

Market Snapshot

• S&P 500 futures down 0.6% to 5,940.50
• MXAP up 0.4% to 182.01
• MXAPJ up 0.2% to 575.59
• Nikkei up 0.3% to 38,642.91
• Topix up 0.4% to 2,711.64
• Hang Seng Index little changed at 19,426.34
• Shanghai Composite down 1.5% to 3,330.73
• Sensex down 0.1% to 77,580.31
• Australia S&P/ASX 200 up 0.7% to 8,285.15
• Kospi little changed at 2,416.86
• STOXX Europe 600 down 0.4% to 504.95
• German 10Y yield little changed at 2.35%
• Euro up 0.4% to $1.0571
• Brent Futures down 1.1% to $71.79/bbl
• Gold spot up 0.0% to $2,565.78
• US Dollar Index down 0.13% to 106.53

Top Overnight News

• US President-elect Trump picked RFK Jr to be Health and Human Services Secretary and said North Dakota Governor Burgum will be the Interior Secretary. It was separately reported that a US private funds group asked Trump to review harmful rules, preserve pro-growth taxes and promote alternative assets: Reuters.
• China’s October economic data was mixed, with solid retail sales (+4.8% Y/Y, about 100bp ahead of the Street’s +3.8% forecast and up from +3.2% in Sept) but soft industrial production (+5.3% vs. the Street +5.6%) and continued pressure in real estate. Reuters
• Japan’s Q3 GDP slowed vs. Q3, but it still came in ahead of expectations while consumption rebounded, keeping the BOJ on track to continue tightening policy. WSJ
• Kazuo Ueda will speak on Monday in what may be his last major scheduled speech before next month’s BOJ meeting. The head of one of Japan’s largest labor unions said workers need to see consistent gains in real wages for the BOJ to continue raising interest rates. BBG
• Musk met with Iran’s UN Ambassador and discussed ways for Tehran and Washington to defuse tensions. NYT
• The UK economy cooled by more than expected last quarter, with most industries experiencing subdued growth amid growing concerns over Labour’s first budget. In September, GDP shrank 0.1% — consensus was for 0.2% growth. BBG
• The euro area’s GDP will increase by 1.3% next year and 1.6% in 2026, the European Commission said. That’s slightly stronger than what the IMF predicted last month and notably higher than the 0.8% seen by officials for 2024. BBG
• Senate Republicans are skeptical of Donald Trump’s aggressive new tariff plans — especially lawmakers from states with large agriculture industries that could bear the brunt of likely foreign retaliation. Politico
• Franklin Resources will begin taking over parts of its Western Asset Mgmt. and cutting costs following a recent exodus of assets. BBG
• Gold’s decline may continue on momentum-driving sales before bottoming, MLIV said. CTAs could sell an additional 15% of their holdings in the coming sessions, TD Securities said. Gold ticked up on the day. BBG
• Fed's Collins (2025 voter) says a December rate cut is "certainly on the table but is not a done deal", according to WSJ. Expects lower rates will be warranted. Says Fed policy is restrictive. Does not see signs of new price pressures. There will be more data between now and December meeting.
• US Treasury's semi-annual currency report found no major US trading partners manipulated currency to gain unfair trade advantage in four quarters through June 2024 as no major trading partners met all three criteria for enhanced analysis during the review period. However, the monitoring list of trading partners whose currency practices 'merit close attention' includes China, Japan, South Korea, Singapore, Taiwan, Vietnam and Germany.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded with a predominantly positive bias albeit with gains capped following the uninspiring handover from Wall Street and as participants digested recent earnings releases and mixed Chinese activity data. ASX 200 was led by outperformance in Utilities and with gains in nearly all sectors aside from Healthcare amid headwinds for the latter following pressure in the industry stateside after US President-elect Trump picked vaccine sceptic RFK Jr as HHS Secretary. Nikkei 225 rallied on the back of recent currency weakness and with outperformance seen in some financial names after Japanese megabanks' earnings results, while GDP data was mostly either inline or better than expected. Hang Seng and Shanghai Comp ultimately gained but saw mixed price action throughout the day after various data releases in which Industrial Production disappointed but Retail Sales topped forecasts, while Chinese Home Prices showed a steeper Y/Y drop although the M/M decline moderated. Participants also digested tech earnings and the PBoC's largest daily liquidity injection via reverse repos in over four years which is meant to counteract factors including maturing MLF loans and tax payments.

Top Asian news

• China's Finance Ministry will reduce export tax rebate rate for refined oil products, photovoltaics, batteries, and select non-metallic mineral products from 13-9% from Dec 2024. Will cancel the export tax rebate for aluminium and copper products, and chemically modified animal, plant, or microbial oils and fats.
• Alibaba (BABA/ 9988 HK) reportedly mulling offering USD 5bln in bonds.
• China's MOFCOM is releasing a dual-use item export control list, which will be effective from December 1st; does not involve adj. to specific scope of export control.
• Hong Kong revises 2024 GDP forecast to 2.5% (prev. forecast at 2.5-3.0%)
• PBoC injected CNY 981bln via 7-day reverse repos with the rate at 1.50% which was the largest daily cash injection through reverse repos since February 2020, while it stated that Friday's cash injection through reverse repos was meant to counteract factors including maturing MLF loans and tax payments.
• China's stats bureau said domestic demand is still insufficient but noted major economic indicators recovered 'markedly' in October and China's consumer expectations improved, while they will consolidate the trend in economic recovery, step up policy adjustments and expand domestic demand. Furthermore, it stated that recent policies have shown positive effects on the economy and it is increasingly confident of achieving the 2024 economic growth target but noted that consumption growth still faces some constraints.
• Japanese Finance Minister Kato said they will take appropriate action against excessive FX moves, while he added that one-sided, sharp moves were seen in the FX market and it is important for FX rates to move stably reflecting fundamentals.

European bourses began the session on a mostly lower footing, in a continuation of the losses seen on Wall St. in the prior session; a paring of the strength seen in Europe on Thursday may also be at play. Since the cash open, sentiment gradually improved, but indices now display a mixed picture in Europe. European sectors are mixed vs initially opening with a strong negative bias. Energy is towards the top of the pile, with Banks and Insurance following just behind. Healthcare is by far the clear underperformer, with several heavyweights within the sector seeing notable downside after US President-elect Trump picked vaccine sceptic RFK Jr as HHS Secretary. US equity futures are entirely in the red, with slight underperformance in the tech-heavy NQ, in a continuation of the negative price action seen in the prior session; which was ultimately sparked by a hawkish-leaning Powell. US finalises USD 6.6bln chips subsidy award for TSMC, according to the US Commerce Department.

Top European news

• European Commissions sees EZ economic growth at 0.8% in 2024, 1.35% in 2025, 1.6% in 2026. Sees EZ inflation at 2.4% in 2024, 2.1% in 2025, 1.9% in 2026. Sees German GDP to expand by 0.7% in 2025 (prev. forecast 1.0%). GDP growth expected to accelerate to 1.3% in 2026 (remains below EZ avg. of 1.6%). German economy contract 0.1% this year vs 0.1% growth in spring forecast.
• Germany's SPD leader says they do not need to wait for a new gov't to begin debt brake reform, willingness to reform from the opposition leader is a good starting point, via Handelsblatt.

FX

• DXY is pulling back after another surge on Thursday which saw a high of 107.07, with hawkish Powell keeping the buck afloat in late hours. Ahead, US retail sales and a number of Fed speakers. Comments from Fed's Collins who noted that a December rate cut is "certainly on the table but is not a done deal", had little impact on the index.
• EUR is benefitting from a softer Dollar and seeing a rebound from yesterday's worst levels (1.0496 low) as the pair attempts to climb back to yesterday's best (1.0582).
• GBP is relatively flat and unable to benefit from the pullback in the Dollar following downbeat GDP data across the board.
• JPY is the G10 outperformer after a week of underperformance with desks citing pre-weekend profit-taking, whilst Japanese GDP data mostly matched or topped estimates. USD/JPY overnight hit a fresh weekly high of 156.74 before pulling back to a current 155.40 low.
• Antipodeans are modestly firmer as DXY pulls back from its weekly highs, in turn offering some reprieve to peers alongside the base metals complex.
• PBoC set USD/CNY mid-point at 7.1992 vs exp. 7.2482 (prev. 7.1966).
• Indonesia's Central Bank says it has conducted "triple intervention" within the FX market to maintain market confidence.

Fixed Income

• USTs are under slight pressure as markets continue to digest the hawkish tone from Powell. As it stands, USTs have climbed above the overnight low at 109-06, and currently sits below its session high at 109-16+. Yields are currently firmer across the curve with the short-end leading after the Fed Chair. US Retail Sales and Fed speak is due.
• Bunds spent first part of the morning with a very slight negative bias, in-fitting with USTs. Benchmarks seemingly derived some support most recently from the latest Commission forecasts. EZ-specific updates have been fairly limited, but the docket ahead sees Lane, Cipollone & Panetta.
• Gilts are the modest outperformer as the morning’s GDP data serves as a dovish impetus. Though, market pricing hasn’t really changed with just a ~20% chance of a December cut. Up to a 93.89 peak, having surpassed the 93.85 from Thursday but is yet to test the 94.00 mark.
• UK DMO plans to hold three syndicated Gilt sales in the January-March 2025 period; intends to sell a new 10yr Gilt and 20-25yr I/L syndication in February and March.

Commodities

• Crude is lower across the board heading into the end of the week amid efforts to reach a ceasefire between Israel and Lebanon whilst Iran attempts to cool tensions with the US. Brent Jan also trades towards the lower end of its USD 71.33-72.39/bbl range.
• Mixed trade across precious metals this morning despite the substantial pullback in the Dollar, with some potential tailwinds emanating from attempts to cool geopolitical tensions amid efforts to reach a ceasefire between Israel and Lebanon whilst Iran attempts to cool tensions with the US. Spot gold yesterday briefly dipped under its 100 DMA (2,545.21/oz) to a USD 2,536.71/oz low.
• Mixed trade across base metals with a positive bias in recent trade as prices recover alongside the pullback in the Dollar. 3M LME copper trades on either side of USD 9,000/t in a current USD 8,997.50-9,077.50/t range. Copper caught a slight bid following news that China's Finance Ministry will cancel the export tax rebate for aluminium and copper products.

Geopolitics: Middle East

• The Senior Advisor to Iran's Khamenei says "we support any ceasefire decision taken by the Lebanese government and resistance".
• Israeli source says Hezbollah's response to the American outline is expected "within days", according to Kann News.
• Iran provided written assurances to the US administration in October that it was not seeking to kill Presidential contender Trump, via WSJ citing a US official; assurances which were intended to cool tensions between the US and Iran.
• Iran is preparing for Operation Sincere Promise 3 to respond to the Israeli attack, according to Sky News Arabia citing a Member of the Expediency in Iran.
• Israeli army issues new warnings to evacuate buildings in Burj al-Barajneh and Ghobeiry in the southern suburb of Beirut, according to Sky News Arabia.
• Israeli forces push deeper into Lebanon in a widening war campaign, while the expanding ground operation risks protracted conflict but could build leverage for ceasefire talks, according to WSJ.
• Hezbollah said it targeted a military base in Israel's Tel Aviv and targeted a gathering of Israeli enemy forces in the Kiryat Shmona settlement with a barrage of rockets, according to Sky News Arabia.
• Elon Musk and Iran's ambassador reportedly discussed how to ease US and Iran tensions, according to NYT. Iran's ambassador told Musk during the meeting on Monday that sanctions waivers should be obtained from the Treasury Department, while Iranian sources said the meeting was positive, according to Al Arabiya.

Geopolitics: Other

• US President-elect Trump said they will avoid what happened before with their military in Afghanistan and will deal with the situation in Ukraine better, as well as work to reach a solution to the crisis.
• US President Biden administration official said the US must be prepared to expand its nuclear weapons force, while the decision on expanding US nuclear force will be left to President-elect Trump, according to WSJ.
• US and UK brought into force an amendment to the 1958 agreement between the two countries for cooperation in the uses of atomic energy in defence which will make the agreement enduring in its entirety, according to the US State Department.
• North Korean leader Kim guided a test of attack drones and ordered the mass production of suicide drones.
• Taiwan President Lai is planning to stop in Hawaii and maybe Guam during a visit to Pacific allies in the coming weeks, according to sources cited by Reuters.
• China's Coast Guard said with China’s permission, the Philippines sent a civilian ship to transport supplies to its 'illegally' beached warship at the Second Thomas Shoal.
• The US plans additional sanctions to restrict Russia's energy trade, plans to prohibit banks from dealing with Gazprombank, according to Nikkei.

US Event Calendar

• 08:30: Oct. Retail Sales Advance MoM, est. 0.3%, prior 0.4%
  • Oct. Retail Sales Ex Auto MoM, est. 0.3%, prior 0.5%
  • Oct. Retail Sales Control Group, est. 0.3%, prior 0.7%
• 08:30: Oct. Import Price Index MoM, est. -0.1%, prior -0.4%
  • Oct. Import Price Index YoY, est. 0.3%, prior -0.1%
  • Oct. Export Price Index MoM, est. -0.1%, prior -0.7%
  • Oct. Export Price Index YoY, est. -1.7%, prior -2.1%
• 08:30: Nov. Empire Manufacturing, est. 0, prior -11.9
• 09:15: Oct. Industrial Production MoM, est. -0.3%, prior -0.3%
  • Oct. Capacity Utilization, est. 77.1%, prior 77.5%
  • Oct. Manufacturing (SIC) Production, est. -0.5%, prior -0.4%
• 10:00: Sept. Business Inventories, est. 0.2%, prior 0.3%

Central Bank speakers

• 08:30: Fed’s Goolsbee on CNBC
• 09:00: Fed’s Collins Gives Opening Remarks
• 10:30: Fed’s Collins Appears on Bloomberg TV
• 13:15: Fed’s Williams Gives Opening Remarks

DB's Jim Reid concludes the overnight wrap

Risk assets struggled for momentum yesterday, with the S&P 500 (-0.60%) losing ground as investors reflected on some sticky inflation data and increasingly elevated valuations. The initial catalyst for that was the US PPI inflation for October, where the core PPI reading was stronger than expected, which added to fears that inflation could become stuck above the Fed’s target. Then later in the session, that narrative was reinforced by some hawkish comments from Fed Chair Powell, which added fresh doubts about the likelihood of a December rate cut. By the close, that meant futures had dialled back the probability of a December cut to 62%, down from more than 82% the previous day. Moreover, those moves have seen further momentum overnight, with the probability of a December cut down to 59% this morning, whilst the 10yr Treasury yield is currently at a 4-month high of 4.46%, and S&P 500 futures (-0.32%) are pointing to further losses.

In terms of Powell’s remarks, he explicitly said that the economy “is not sending any signals that we need to be in a hurry to lower rates”, and that its strength “gives us the ability to approach our decisions carefully”. Indeed, yesterday we found out that the weekly initial jobless claims fell to their lowest level since May, at 217k. So there was plenty of support for that message of economic strength, and it was a much more hawkish message from Powell relative his Jackson Hole speech in August, where he said that the “time has come for policy to adjust”. He also noted that yesterday’s PPI data was stronger than the Fed had pencilled in, seeing the data as consistent with a +2.8% yoy core PCE print.

Whilst the PPI data wasn’t that alarming by the standards of the high inflation of 2022-23, the problem was it showed inflation remaining stubbornly above levels consistent with the Fed’s target. For instance, the core PPI reading was at +0.3% (vs. +0.2% expected), which pushed up the year-on-year measure to +3.1% (vs. +3.0% expected). Moreover, that comes on the back of core CPI staying at +0.3% for a third month running, so the concern is that inflation is getting stuck at those levels. Now it’s worth noting that the Fed officially target the PCE measure of inflation, rather than the CPI or PPI measures, and we don’t get the PCE numbers until the end of the month. But we know several categories from the PPI release feed into the PCE, and those were on the stronger side, with sizeable increases in airfares and portfolio management prices. So one to look out for when the October PCE is released on November 27.

Against that backdrop, there were growing signs that investors were becoming more concerned about inflation. For instance, the US 2yr inflation swap up +0.7bps on the day to 2.63%, which is its highest in almost six months. In turn, that led to a notable rise in front-end Treasury yields, with the 2yr yield (+5.9bps) closing at 4.35%, its highest since July, having been near flat on the day before Powell’s comments. However, yields declined at the long end, with 10yr and 30yr yields -1.5bps and -4.9bps lower, respectively. So in some ways it was a mirror image of the curve steepening seen the previous day. One theme that persisted was dollar strength however, and the dollar index (+0.18%) posted a fifth consecutive advance to reach a one-year high.

For US equities, Powell’s comments reinforced what had already been a more challenging day, with the S&P 500 (-0.60%) seeing its largest decline so far this month. The NASDAQ (-0.64%) and the Magnificent 7 (-1.30%) saw sizeable declines, with Rivian (-14.30%) and Tesla (-5.77%) among the worst performers after Reuters reported that president-elect Trump plans to eliminate the consumer tax credit for electric vehicles. The small-cap Russell 2000 (-1.37%) lost ground for a third consecutive day, which marked its worst 3-day run since early August. By contrast in Europe, equities saw a strong rebound from the last couple of days, with the STOXX 600 up +1.08%, alongside gains for the DAX (+1.37%), the CAC 40 (+1.32%) and the FTSE MIB (+1.93%).

On the rates side in Europe, sovereign bond yields saw consistent declines, with those on 10yr bunds (-4.6bps), OATs (-5.6bps) and BTPs (-8.6bps) all moving lower. That also followed the release of the accounts from the ECB’s October meeting, where they delivered another 25bp rate cut. It said that if the slowdown in various indicators were just temporary, then an October rate cut would be like bringing forward a December cut, and so “there was little risk associated with cutting, especially given that interest rates would remain in restrictive territory”.

Overnight in Asia, we’ve had a mixed set of data out of China this morning. On the positive side, retail sales came in stronger than expected, with a +4.8% year-on-year reading in October (vs. +3.8% expected). However, industrial production was a bit weaker than expected at +5.3% year-on-year (v.s +5.6% expected). So Chinese equities have been steady against that backdrop, with the CSI 300 (-0.03%) and the Shanghai Comp (+0.02%) hovering either side of unchanged.

Elsewhere in Asia, we also had Japan’s Q3 GDP data overnight, which was a bit faster than expected with an annualised quarterly gain of +0.9% (vs. +0.7% expected). That’s helped support the Nikkei (+0.87%) to a stronger gain this morning, although it wasn’t all good news in the release, as Q2 growth was revised down to an annualised pace of +2.2% (vs. +2.9% previously). In turn, the Japanese Yen is losing ground for a 5th consecutive day against the US dollar, and this morning is trading at 156.45, which is its weakest level since July.

To the day ahead now, and data releases include US retail sales, industrial production and capacity utilization for October, along with UK GDP for Q3. Central bank speakers include the Fed’s Collins and Williams, and the ECB’s Lane and Cipollone. Lastly, the European Commission will release their latest economic forecasts.

Tyler Durden Fri, 11/15/2024 - 08:19

Smithfield Hit With Fine For Employing Children At Minnesota Meat Factory 

Chinese-owned meat processing giant Smithfield has been fined $2 million to resolve a child labor compliance dispute with the Minnesota Department of Labor and Industry.

Local paper Minnesota Reformer reports a Minnesota DLI investigation from 2021 and 2023 found at least 11 children between the ages of 14 and 17 worked at Smithfield's St. James area plant.

"It is unacceptable for a company to employ minor children to perform hazardous work late at night. This illegal behavior impacts children's health, safety and well-being and their ability to focus on their education and their future," DLI Commissioner Nicole Blissenbach wrote in a statement, adding, "Combatting unlawful child labor in Minnesota is a priority for DLI and it will continue to devote resources to addressing and resolving these violations."

Smithfield released a statement denying "that we knowingly hired anyone under the age of 18 to work in our St. James facility. We have not admitted liability as part of this settlement; however, in the interest of preventing the distraction of prolonged litigation, we have agreed to settle this matter."

The meatpacker noted that it utilizes E-Verify, a Department of Homeland Security database, to determine the eligibility of workers who are US or foreign citizens. 

"Each of the 11 alleged underage individuals passed the E-Verify system by using false identification. Each used a different name to obtain employment with Smithfield than the name by which DLI identified them to Smithfield," the company said.

The Chinese-owned company noted it is opposed to child labor and has "taken proactive steps to enforce our policy prohibiting the employment of minors."

There was no word on the citizenship status of the minors. However, we suspect some of those underage individuals were probably migrants. After all, many of the migrants - and illegal aliens - the Biden-Harris team allowed to flood the nation ended up somewhere in America's food supply chain - this is no secret. 

This brings us to an entirely different issue: the exploitation of migrant children by mega-corporations...

"This shadow work force extends across industries in every state, flouting child labor laws that have been in place for nearly a century. Twelve-year-old roofers in Florida and Tennessee. Underage slaughterhouse workers in Delaware, Mississippi and North Carolina. Children sawing planks of wood on overnight shifts in South Dakota," a recent New York Times article stated. 

Earlier this week, we informed readers that at least one non-profit was funneling migrants into mega corps. 

Dear Border Czar: This Nonprofit Boasts A List Of 400 Companies That Employ Migrants https://t.co/LuwWdgOzgD

— zerohedge (@zerohedge) November 14, 2024

The reports of trafficking networks and labor mules across the country because of Biden-Harris' open southern borders are disturbing. 

"No Americans": Insider Of Alleged Trafficking Network Reveals How Migrants Ended Up At Charleroi, PA Factory https://t.co/FUSMbqyB7E

— zerohedge (@zerohedge) September 21, 2024

Incoming "border czar," Tom Homan, noted earlier this week: "Where do we find most victims of sex trafficking and forced labor trafficking? At worksites." 

NEW: Trump's 'border czar' Tom Homan says the administration will conduct workplace immigration raids; 'The Biden-Harris Adm. has lost over 300,000 children'

"Worksite operations have to happen. Here’s why...

Where do we find most victims of s-x trafficking and forced labor… pic.twitter.com/2D6YGdE1F7

— Unlimited L's (@unlimited_ls) November 11, 2024

Lining America's food supply chain with migrants - some of which are illegal... This should be one of the biggest national security stories of the decade. 

Tyler Durden Fri, 11/15/2024 - 07:45

How Much Do Americans Spend On Groceries In Each State

Since August 2020, prices for “food at home” (groceries) have increased by 20% according to data from the Bureau of Labor Statistics, the steepest inflation seen since the 1970s.

On average, American households are paying about $270 per week ($1,080 a month) for groceries, according to Delish, which sourced their findings from the latest Census Bureau estimates.

But how does this change across the country? From the same source, Visuali Capitalist's Pallavi Rao maps the weekly grocery bill for an American household by each state. Figures are rounded.

Ranked: U.S. States by Weekly Grocery Bills

Hawaii and Alaska, the two non-mainland states, have the highest grocery costs for an average American household: both topping $300 a week, or about $1,200 a month.

Shipping is the primary reason for driving up prices, and neither state produces enough food locally to offset the import costs.

Rank State State Code Weekly Spend 1 Hawaii HI $334 2 Alaska AK $329 3 California CA $298 4 Nevada NV $295 5 Mississippi MS $291 6 Washington WA $288 7 Florida FL $287 8 New Mexico NM $286 9 Texas TX $286 10 Louisiana LA $283 11 Colorado CO $280 12 Oklahoma OK $279 13 Georgia GA $278 14 Utah UT $278 15 New Jersey NJ $275 16 Alabama AL $272 17 Arizona AZ $272 18 Massachusetts MA $272 19 Tennessee TN $270 20 Illinois IL $269 21 Connecticut CT $266 22 Maryland MD $266 23 New York NY $266 24 North Carolina NC $266 25 North Dakota ND $265 26 Arkansas AR $261 27 Virginia VA $260 28 Idaho ID $258 29 Rhode Island RI $256 30 South Dakota SD $256 31 Kentucky KY $255 32 Washington, D.C. DC $255 33 Ohio OH $254 34 South Carolina SC $254 35 Wyoming WY $254 36 Kansas KS $251 37 Minnesota MN $251 38 Maine ME $250 39 Oregon OR $249 40 Pennsylvania PA $249 41 Vermont VT $249 42 Delaware DE $246 43 Montana MT $246 44 Missouri MO $244 45 Indiana IN $239 46 New Hampshire NH $239 47 West Virginia WV $239 48 Michigan MI $236 49 Nebraska NE $235 50 Iowa IA $227 51 Wisconsin WI $221 N/A National Average   $270

For what it’s worth, Alaskans pay very low taxes (no income, nor inheritance tax, and a very low sales tax) so the higher grocery bill may be far more affordable than other states with lower bills.

Meanwhile, the Midwest has some of the lowest grocery costs across the country. These state economies are often tied to farming and food production, helping keep grocery prices down.

There is some correlation between places (like California, Washington, and New York) with higher grocery prices, and, well, higher prices generally—where $100 doesn’t go as far as it does in the rest of the country.

However, in Mississippi, New Mexico, and Arizona—where living costs are lower—food prices remain in the top half of the ranking. This indicates a greater financial strain for food despite lower overall living expenses.

Eating out hasn’t been spared inflation’s effect either. Check out Charted: Inflation Across U.S. Fast Food Chains (2014-2024) to see how the occasional McDonald’s cheat meal is taking more out of your pocket.

Tyler Durden Fri, 11/15/2024 - 06:55

Los Angeles Mayor Pushes For Official Sanctuary City Status Before Trump Assumes Office

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Los Angeles Mayor Karen Bass said on Monday that her city doesn’t have a law officially designating it as a “sanctuary” for illegal immigrants and that this should be changed quickly before President-elect Donald Trump assumes office.

Los Angeles Mayor Karen Bass speaks in Studio City, Calif., on Jan. 30, 2024. John Fredricks/The Epoch Times

Trump has vowed to carry out mass deportations of illegal immigrants and said he would push Congress to adopt legislation outlawing sanctuary cities, which enact policies that shield illegal immigrants from federal immigration authorities.

In a Nov. 11 interview on KNX News, a local radio station, Bass said past policies related to the status of Los Angeles as a sanctuary were never codified into law. She pledged to push for a City Council vote that would formally designate Los Angeles as a sanctuary city before the end of the year.

“I imagine that the council will be voting on sanctuary cities hopefully very, very soon,” she told the outlet. “We will stand with the immigrant community and whatever policy they put forward, we will make sure that people in Los Angeles are not hurt and families are not separated.”

The City Council approved a motion in July 2023 calling on various city departments to take steps for Los Angeles to formally become a sanctuary city, which would prohibit city cooperation with federal immigration authorities.

Later, in September 2024, several City Council members introduced a motion for a new sanctuary city law to legally codify Los Angeles’ status as a sanctuary city. The law has not yet returned to the council for a vote.

In addition to advocating for the City Council to finalize and enact the law before Trump assumes office, Bass also expressed doubt that the president-elect’s pledge to deport millions of illegal immigrants could be implemented.

Trump, who won the race for the White House vowing a vast crackdown on illegal immigration, said last week that his incoming administration has “no choice” but to press ahead with the deportations, regardless of the cost.

“It’s not a question of a price tag,” Trump told NBC News on Nov. 8, adding that “really, we have no choice.”

“When people have [been] killed and murdered, when drug lords have destroyed countries,“ Trump continued. ”And now they’re going to go back to those countries because they’re not staying here. There is no price tag.”

It’s unclear how many illegal immigrants there are in the United States, with estimates ranging from around 10 million to more than 20 million and beyond. American Immigration Council, an immigrant advocacy group, recently estimated that the cost of deporting 13 million immigrants residing in the United States illegally could total $968 billion over a little more than a decade.

Trump recently tapped Tom Homan, former acting director of U.S. Immigration and Customs Enforcement (ICE), to serve as the incoming administration’s border czar in charge of mass deportations. Homan said in an October interview that the scale of the deportations would depend on the available budget, detention space, and officers assigned to the project. After Trump nominated Homan to oversee border security, the former acting ICE chief said that the effort would prioritize the removal of criminals and gang members who are in the country unlawfully.

In the meantime, Homan urged other illegal immigrants to self-deport, saying it’s just a matter of time before they’re caught and removed from the country.

“Criminals and gang members get no grace period,” Homan told Fox News on Nov. 11. “While we’re out prioritizing the public safety threats and national security threats, if you want to self-deport, you should self-deport because, again, we know who you are, and we’re going to come and find you.”

Trump has also vowed to use federal power against sanctuary cities. During a campaign speech in North Carolina at the end of September, Trump said he would push Congress to pass a law banning sanctuary cities nationwide.

In 2017, Trump signed an executive order that called on federal agencies to withhold funds from sanctuary jurisdictions. The order made federal money to state and local governments conditional upon their giving immigration officials access to their jails and advance notice when illegal immigrants were being released from custody.

Shortly after taking office, President Joe Biden rescinded Trump’s executive order.

Tyler Durden Fri, 11/15/2024 - 06:30

Totalitarianism Begins With A Denial Of Economics

Authored by Michael Njuko via The Mises Institute,

In the history of the social sciences, no other field of study has attracted so great a level of hostility as the science of economics. Since the inception of the science, the onslaught against it has been on the rise, extending across individuals and groups. And the outlook for a favorable reception of the science is bleak, given that a significant number of people are incapable of following through the extended chains of reasoning required for comprehending economic arguments.

Economics takes ends and goals of action as a given and—in matters of value judgments—it assumes neutrality (i.e., non-normativity), which is characteristic of a science. However, questions of suitability of means and various policies adopted to attain chosen ends are not beyond the scope of economic analysis.

The “Dismal” Task of the Economist

The competent economist—when presented with a proposed plan of action—always asks: Is the means adopted suitable for the attainment of the end in view? He critically analyzes the means in question and declares their fitness or unfitness on the basis of logical demonstrations that are unassailable and apodictly true. This peculiar task of the economist is often misapprehended as an expression of his value judgments and an attempt to frustrate the attainment of ends chosen. Thus, the economist is often met with disapproval.

More significant in the history of the science are the several attempts to discredit the economists through a denial of economics as a universally-valid science, applicable for all peoples, times, and places. This is a pernicious attempt because the social, political, and economic consequences tend to be disastrously far-reaching. This article attempts to establish a connection between a denial of economics and the emergence of totalitarianism.

Historicism as a Precursor of Totalitarianism 

Historicism was one of such concerted attempts at denying the universal validity of the body of economic theorems. The historicists advanced the view that economic theories are not valid for all peoples, places, and times; and thus, are only relevant to the specific historical conditions of their authors. The German Historical School’s rejection of the free trade theories, propounded by the classical economists, was not on grounds of inherent inadequacies in these theories—given that they never unmasked any logical errors as to the untenability of these theories—but motivated by ideological pre-possessions. Mises puts it very succinctly in Epistemological Problems of Economics: 

The historian must never forget that the most momentous occurrence in the history of the last hundred years, the attack launched against the universally valid science of human action and its hitherto best developed branch, economics, was motivated from the very beginning not by scientific ideas but by political considerations.

Historicism is bound to lead to some form of logical relativism, and it is not surprising that the doctrine of racial polylogism gained a general acceptance among many Germans in the early twentieth century. In order to invalidate the relevance of a theory on grounds of historical or racial origins of the author, one has to proceed with the indefensible assumption of differences in the logical character of the human mind amongst different peoples and within the same people at different historical epochs. But in fact, there is no scientific evidence as to the existence of these differences in the logical structure of the human mind. Thus the historicists’ arguments against the universal validity of economic theory are unfounded.

The social, economic, and political significance of a denial of economics would also imply the denial of insights from economics about the preservation of society—concerted action in voluntary cooperation. Economic theory asserts that there is greater productivity to be obtained from social organization under the division of labor than would be obtained in individual self-sufficiency. The Ricardian Law of Association explains the tendency of humans to intensify cooperation given a rightly-understood interest in better satisfying wants under the social order of the division of labor. While there are many ways for people to coexist in the world, there are fewer ways for them to coexist peacefully and prosperously. This is the central lesson of classical economics about human society.

Historicism’s denial of the universal validity of these theories on non-logical grounds betrays a prejudice for policies aimed at attaining the alternative of autarkic self-sufficiency and the substitution of the social apparatus with coercion and compulsion. In fact, the Nazi totalitarian regime, whose intellectual precursor was German historicism, never relented in applying force to induce cooperation while simultaneously pursuing autarkic self-sufficiency by means of disastrous policies. Thus, German historicism, in denying the universal validity of economic theory and the general laws of human action as advanced by praxeology, played a causal role by creating a favorable intellectual climate for arbitrariness and the subsequent emergence of Nazi totalitarianism.

Marxism as Pseudo-Economics

Marxist socialism, on the other hand, denies the validity of economic theories on grounds of the “class origins” of the economists. Like historicism, it subscribes to a variant of polylogism in which it asserts the existence of a difference in the logical structure of mind for the respective social classes—even though Marx never defined what he meant by “class.” Consequently, for the Marxians, the science of economics becomes mere ideological expression of the class interest of the exploiting class—the bourgeoisie.

It is precisely the fact that Marxism rejects the essential teachings of economics in favor of utopian ideas which fail to achieve the ends sought wherever it was tried. The ultimate goals of Marxians—improvement in material and social conditions of its adherents—are no different from those of their liberal counterparts of the late eighteenth and early nineteenth centuries who enjoyed considerable improvements in standard of living; it is in the choices of means that they differ. But it is the unsuitability of the means adopted by the Marxians that always and everywhere frustrated the attainment of ends sought by Marxism.

Furthermore, as with the capitalist system, based on private ownership of the means of production, the pure socialist commonwealth must be faced with the problem of allocation of resources in view of satisfying the most urgent wants of its citizens. And in this regard, Mises, in his irrefutable criticism of the socialist commonwealth, exposes the impossibility of socialism. He argues that, given the absence of a price structure for factors of production, the problem of impracticality of economic calculation must emerge in a socialist community. The planner, without recourse to tools of economic calculation, would be lost amid the sea of economic possibilities.

That capitalism has succeeded in improving the lives of men wherever its institutions are left unhampered is because those societies recognize the validity of economic theory about the potential benefits of the free market. They did not adopt arbitrary policies that economists declared unfit for the ends they sought to attain. Thus, the horrors brought about by the series of abortive attempts to implement the utopian ideas of socialist thinkers are the logical consequences of a denial of economics.

The Middle-of-the-Road Policy Leads to Totalitarianism

The doctrine of interventionism wrongly conceives of a compatibility of the market and violent interventions by the state, between social cooperation and the apparatus of coercion and compulsion. It purports to be a third economic system—a compromise between capitalism and socialism. But, as the logical demonstrations of the economists show us over and over, interventionism, so-called middle-of-the-road policy, inevitably leads to socialism. Interventionism is, in fact, a denial of economics in that economics recognizes that interventions of any sort in the market tend to produce outcomes that—judged from the point of view of their initiators—are even more dissatisfactory than the previous problems that they pretend to fix.

Mises clearly remarks in his short book The Historical Setting of the Austrian School of Economics that “the worst illusion of our age is the superstitious confidence placed in panaceas, which—as the economists have irrefutably demonstrated—are contrary to purpose.” Interventionism, carried to its logical conclusion, is bound to lead to totalitarianism, given that the more its policies fail to produce the desired outcomes, the more the statesmen who wrongly believe in the appropriateness of interventionist measures find it necessary to employ the coercive state apparatus to compensate for their failures.

Economics and the Free-Market System

The science of economics is a rational science that recognizes the primacy of the laws of human society. Economics teaches that the market is a system of logically necessary relations brought about by the actions of individuals seeking to satisfy their most urgent wants. It teaches that any instance of coercion aimed at influencing the actions of individuals is disruptive to the market process. A denial of these teachings would inevitably lead to the state of affairs in which force becomes the only means of eliciting the cooperation of individuals in society.

Tyler Durden Fri, 11/15/2024 - 05:00

How Trump Could Transform Indo–Pacific Policy

Authored by Andrew Thornebrooke via The Epoch Times (emphasis ours),

President-elect Donald Trump’s second term in office will likely bring sweeping changes to the nation’s Indo–Pacific policy and ongoing strategic competition with China.

Taiwan's armed forces hold two days of routine drills to show combat readiness ahead of Lunar New Year holidays at a military base in Kaohsiung, Taiwan, on Jan. 11, 2023. The self-ruled island of Taiwan continues to hold defensive drills, as tensions remain high in the Taiwan Strait. Annabelle Chih/Getty Images

Leaders throughout Congress and the national security space are therefore preparing for an era marked by increased confrontation as the administration pushes back on the Chinese regime’s aggression in the region.

Rep. John Moolenaar (R-Mich.), chair of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, said he expects a second Trump administration to adopt a firm approach to foreign policy in the Indo–Pacific.

“During Trump’s first administration, peace through strength was at the forefront of American foreign policy,” Moolenaar said in a statement shared with The Epoch Times by the committee’s staff.

That strength, Moolenaar suggests, would extend to the U.S. allies throughout the Indo–Pacific, where Trump is expected to push regional partners to increase their defense spending in order to receive continued U.S. support.

“The entire free world must act with urgency to invest in its collective military power in order to deter conflict, support global prosperity, and defend our values against CCP [Chinese Communist Party] aggression,” Moolenaar said.

Those increased expectations of Washington’s allies could bring both risk and opportunities to U.S. relations in the region as the nation attempts to pressure regional partners into adopting a more forward-facing defense posture.

They will also likely bring increased volatility to the United States’ relationship with China and the CCP, including by shaping the potential for an armed conflict between the two superpowers over the future of Taiwan.

Taiwan Flashpoint

The CCP claims that Taiwan is part of its territory. Though the communist regime has never controlled the island, CCP leader Xi Jinping has made unifying Taiwan with the mainland a legacy issue of his rule and has ordered the Party’s military wing to prepare for a potential conflict by 2027.

The United States does not officially support Taiwanese independence or the forceful unification of the two territories. But, since 1979, Washington has maintained obligations to sell Taiwan the arms it needs to maintain its self-defense.

Likewise, the United States has maintained a policy of so-called strategic ambiguity since 1979, in which it will neither confirm nor deny its willingness to enter a military conflict to defend Taiwan from CCP aggression.

However, U.S. political and military leadership have signaled that they are preparing for such an eventuality. To that end, Chief of Naval Operations Adm. Lisa Franchetti issued a guidance document in September ordering the Navy to prepare for war with China by 2027.

The United States is not interested in preserving Taiwan’s independence simply because of its democratic government. The island nation is responsible for manufacturing more than half of the world’s semiconductors and nearly 90 percent of the globe’s advanced semiconductors, used in electronic components for everything from laptops to pickup trucks to hypersonic missiles.

To that end, Trump’s transactional approach to international security deals has thrown Taiwan’s central role in the global economy into question.

In July, for example, Trump called for Taiwan to pay more for its defense, though the island is already one of the largest purchasers of arms from the United States.

Since 1950, Taiwan has spent more than $50 billion on U.S. weapons, making it the fourth largest purchaser of U.S. arms behind Japan, Israel, and Saudi Arabia, according to the Council on Foreign Relations.

Trump has also suggested that military force would not be necessary to protect Taiwan from the CCP and has instead claimed that a severe enough economic threat to China would prevent an invasion of Taiwan.

Russell Hsiao, executive director of the Global Taiwan Institute think tank, told The Epoch Times that Trump’s ambiguous stance on Taiwan’s defense could invite further CCP attempts to sway American and Taiwanese decision-makers away from aggressively defending the island’s de facto independence.

“The president-elect has already indicated that he would be less clear than President Biden as to whether he thought the United States had an obligation to come to Taiwan’s defense if China decided to invade the island,” Hsiao said.

“Washington and Taipei should be prepared for Beijing to exploit this in its cognitive warfare campaigns and quickly develop their own counter-strategies.”

Hsiao noted, however, that Trump was “unencumbered by past precedents and norms,” which could help him to strengthen the bilateral relationship by overcoming the self-imposed restrictions of the past that have limited U.S. involvement with Taiwan on the international stage.

As such, he said, asking for Taiwan to accept a larger share of the financial burden for its defense could be an opportunity for Taiwanese leaders to demonstrate their resolve and, in the process, garner renewed U.S. support through access to increased arms sales.

“President-elect Trump is expected to emphasize burden-sharing in security ties with allies and partners,” Hsiao said.

“While this may be generally seen in a negative light by most allies and partners, it should be noted that this could lead to it being more forward-leaning in providing a wider variety of arms to Taiwan suited to a range of potential contingencies.”

Trump Expected to Deliver Security—at a Price

Taiwanese leadership responded by saying the island was committed to taking on more responsibility and defending itself from CCP aggression.

Taiwanese leadership may consider making a substantial arms purchase early on in the second Trump administration as a sort of down payment to demonstrate its resolve to the administration.

John Mills, former cybersecurity chief in the Office of the Secretary of Defense, said that ensuring a robust defense budget would help Taiwan to make sure U.S. support did not flag and that military expenditure was “the primary metric” used by Trump to determine an ally’s willingness to defend itself.

“We have a very poor track record when we carry the burden for other countries,” Mills said.

“All that is being asked is at least 2 percent of GDP spent on defense and, in reality, 4 to 5 percent is the new 2 percent.”

At present, Taiwan spends about 2.4 percent of its GDP on defense, according to data compiled by the CIA.

Other U.S. allies in the region are more varied. South Korea spends about 2.7 percent of its GDP on defense, and the Philippines spends only about 1.5 percent. Japan is in a unique situation because it is currently spending 1.4 percent but is in the middle of a historic reform of its military policy and strategy, which will see that figure rise to at least 2 percent in the coming years.

Yet none of those numbers at their current levels are likely to please the incoming Trump administration if it is truly so set on encouraging the nation’s allies in the Indo–Pacific to take point on confronting the Chinese regime’s global expansion.

There may be some wiggle room, however, as the administration looks to use less traditional pathways to secure its international interests.

Sam Kessler, a geopolitical analyst at the North Star Support Group risk advisory company, said that a hallmark of the first Trump administration was its ability to think outside of the box, and that would likely only increase now, given Trump’s growing distance from the old guard of the Republican Party.

“The Trump administration in the first term was innovative, proactive, and resourceful in the deals and agreements they crafted, so expect something similar, as well as a little predicted unpredictability, too,” Kessler told The Epoch Times.

“This may be done in the form of trade deals, security arrangements, foreign investments, and policies that may help reduce the threat levels, too. It could be a wide range of things that could be utilized.”

On that note, Kessler suggests that Trump would revisit trade deals and strong economic measures when confronting China and might prove surprisingly willing to take a proactive stance in the bilateral relationship with China.

Such economic deals, he said, could have the secondary objective of smoothing out regional tensions and preserving allied security while holding the CCP accountable economically.

“We may end up witnessing a series of deals and agreements that may be related to multiple issues that are non-related to the original purpose of a negotiation in order to reduce tensions between multiple parties in other areas,” Kessler said.

In all, it is clear that U.S. allies in the Indo–Pacific will be expected to contribute more to the common defense in the region, and such efforts will not go unseen.

With that much in mind, Mills said that he believes the likelihood of an armed conflict would drop, as Trump’s expectations for all nations in the Indo–Pacific would be clear.

“The likelihood of conflict in the western Pacific decreases significantly under Trump,” Mills said.

“Why? Because he’s showing clarity and resolve at all times. Clarity and resolve help prevent war. Lack of clarity and resolve creates war.”

Tyler Durden Thu, 11/14/2024 - 23:50

Tennessee Official Warns: Venezuelan Gangsters "Back In All Of Our Major Cities" 

The American people are expressing joy about President-elect Trump's selection of Tom Homan as the incoming "border czar" to combat Biden-Harris' illegal alien invasion at the open southern border, which has been linked to thousands of armed Venezuela prison gang Tren de Aragua members storming communities nationwide.

Tennessee Bureau of Investigation Director David Rausch is the latest official to warn about TdA members taking over his cities. He said these illegal alien criminals have been spotted in all major cities in Tennessee. 

Local media outlet WVLT News quoted Rausch, who warned that TdA members have been involved in human trafficking within the state. 

"They are back in all of our major cities. They are running human trafficking operations, and that's where they start," said Rausch.

Rausch told Governor Bill Lee on Tuesday that the foreign prison gang was active across the state in 2023, but after a number of arrests, activity slumped. However, he said, in just the past few months, TdA activity has surged once again. 

The TBI director said TdA members were also involved in organized retail theft and drug crimes within the state. 

"They will not hesitate to attack their opponents in public or in broad daylight," Rausch warned. 

A recently leaked US Army North Division report showed an estimated 5,000 TdA members running amok nationwide. 

TdA members have caused chaos in Aurora, Colorado to Texas to New York.

These disastrous globalist policies pushed by the far-left Biden-Harris admin neglected to uphold national security for citizens while ten-plus million unvetted illegal aliens stormed the nation. 

Tennessee voters shifted toward Trump in last week's presidential election, signaling frustration with the globalist in the White House.

Months ago, Homan had a message to the illegals...

This is Tom Homan, President Trump's Border Czar. His message to all the illegals who crossed the border will give you goosebumps, "You better start packing now... cause you're going home."

And to the cartels, he said, "Trump will wipe you off the face of the Earth! YOU'RE… pic.twitter.com/ygZICaVVJb

— George (@BehizyTweets) November 11, 2024

The restoration of national security is only months away. 

Tyler Durden Thu, 11/14/2024 - 23:25