'Fundamentally Flawed' New York Judge Blocks ICE Access To Rikers Island Over Alleged Adams Conflict

Authored by Jonathan Turley,

This week, New York Judge Mary Rosado issued an opinion in Council of City of N.Y. v. Adams. The court is blocking the city from allowing the federal government to maintain office space at Rikers Island. The reason is that Rosado agreed that Mayor Eric Adams had a conflict of interest and likely bargained away the access as part of a quid pro quo arrangement to get the Justice Department to drop criminal charges against him. 

The opinion is quite extraordinary and, in my view, fundamentally flawed. The opinion generated more heat than light on the proper handling of a conflict of interest.

The court recounts the testimony of Danielle R. Sassoon, Esq., Acting United States Attorney for the Southern District of New York, regarding a January 31, 2025, meeting with President Donald J. Trump’s Deputy Attorney General, Emil Bove, and the Mayor’s criminal defense counsel. She claimed that “Adams'[] attorneys repeatedly urged what amounted to a quid pro quo, indicating that Adams would be in a position to assist with [immigration] enforcement priorities only if the indictment were dismissed.”

After that meeting, on February 3, 2025, Mayor Adams’ criminal defense attorney, Alex Spiro, wrote to Bove that the prosecution of the Mayor will “become increasingly problematic as the Trump administration seeks to aggressively enforce immigration laws and remove undocumented immigrants …. [T]he federal government cannot possibly rely on Mayor Adams to be a fully effective partner in all situations in ongoing public-safety missions while he is under federal indictment ….”

Spiro further stressed that Mayor Adams’ “abilities to exercise his powers have also been complicated by his indictment” including his powers to “prevent[] the Office of the Corporation Counsel from litigating challenges to immigration enforcement, prevent[] appointed city employees from taking public stances against enforcement efforts, [and to] re-open[] the ICE office on Rikers Island ….”

One week later, on February 10, 2025, Bove directed federal prosecutors to dismiss with prejudice the pending criminal charges against Mayor Adams.

The plaintiffs allege that these negotiations traded away city policies or privileges in exchange for the dropping of the charges, a charge that Adams vehemently denies.

On February 13, 2025, after meeting with the Administration’s “Border Czar,” Thomas Homan, Mayor Adams announced that he would issue an executive order allowing federal immigration authorities to be present on Rikers Island. The next day, the Department of Justice filed a motion to dismiss all pending criminal charges against Mayor Adams.

After the announcement, a number of deputy mayors resigned in protest. Adams then appointed Randy Mastro as First Deputy and delegated to him the authority to “[p]erform any function, power or duty of the Mayor in negotiating, executing and delivering any and all agreements, instruments and any other documents necessary or desirable to effectuate any of the matters” related to public safety.

On April 8, 2025, Mastro issued Executive Order No. 50, authorizing the Department of Corrections to enter a Memorandum of Understanding with federal law enforcement agencies allowing them to maintain office space on Department of Corrections property, specifically Rikers Island.

The timing of these actions raised objections from many, both inside and outside City Hall. That included United States District Judge Dale Ho, who agreed to dismiss the criminal charges with prejudice, but not after lashing out at the administration. Ho wrote that “[e]verything here smacks of a bargain: dismissal of the [i]ndictment in exchange for immigration policy concessions.” He further warned that the suggestion “that public officials may receive special dispensation if they are compliant with the incumbent administration’s policy priorities … is fundamentally incompatible with the basic promise of equal justice under law.”

I disagreed with Judge Ho’s use of the order to opine on an alleged quid pro quo that was not established in the record or even material to his decision. Ho agreed that he could not “force the Department of Justice to prosecute a defendant” and agreed to dismiss the matter with prejudice. That was the correct and only decision that he could make. However, he further strongly suggested the need for an investigation but lamented that he “did not have the authority to appoint an independent prosecutor.”

I do not question Judge Ho’s sincere objections or the good-faith basis of many in raising this allegation. However, I do not believe that judges or justices should use their positions to opine on political or ethical issues that are not clearly before them. The issue before Judge Ho was solely the dismissal of a criminal case and he had no record, or in my view license, to hold forth on his unsupported suspicions in the case.

The matter, however, was raised and litigated directly before Judge Rosado by the city council, which sought to nullify the Executive Order as being violative of city ethical rules. Specifically, the city council cited New York City Charter § 2604(b)(3), which provides in pertinent part that “[n]o public servant shall use or attempt to use his or her position as a public servant to obtain any … privilege or other private or personal advantage, direct or indirect, for the public servant or any person or firm associated with the public servant.”

Judge Rosado found a likelihood of prevailing on the merits, citing Baker v. Marley, 8 NY2d 365, 367 (1960), that an action must be declared null and void when the action “directly or immediately affects him individually.” She specifically found:

Plaintiff-Petitioner has shown a likelihood of success in demonstrating, at a minimum, the appearance of a quid pro quo whereby Mayor Adams publicly agreed to bring Immigration and Customs Enforcement (“ICE”) back to Rikers Island in exchange for dismissal of his criminal charges. This showing is grounded in (1) Mayor Adams’ public statements; (2) Mayor Adams’ criminal defense attorney’s written overtures to the Department of Justice; (3) the temporal proximity between these overtures and Mr. Bove’s directive to dismiss the criminal charges against Mayor Adams; (4) statements from former Acting United States Attorney Danielle R. Sassoon and Assistant United States Attorney Hagan Scotten; (5) Mr. Homan’s statement that he will “be in [Mayor Adams’] office, up his b ___, saying, ‘Where the hell is the agreement we came to?'” and (6) the written findings by United States District Judge Dale Ho.

Although Defendants-Respondents deny any quid pro quo in conclusory fashion, this is insufficient, and almost expected. As wisely stated by Justice Anthony Kennedy, the quid pro quo need not be stated in express terms “for otherwise the law’s effect could be frustrated by knowing winks and nods. The inducement from the official is [violative] if it is express or if it is implied from his words and actions ….” Based on the record, Plaintiff-Petitioner has made a sufficient showing of an implied, if not an express quid pro quo based on Mayor Adams, Mr. Spiro, Mr. Bove, and Mr. Homan’s words and actions.

In my view, the decision is wrong on a number of key elements.

Who decides?

First, Judge Rosado heard this case despite the fact that there is a process for such allegations to be raised and adjudicated before the Conflict of Interest Board. Rosado recognizes the obvious problem and admits that

“[t]o be clear, the Conflicts of Interest Board is the preferred and proper forum for many garden variety conflict of interest disputes, such as those involving improper gifts, failures to disclose financial interests, and other financial conflicts.

However, the Conflicts of Interest Board is not equipped with the powers and tools to grapple with the case, which involves the promulgation of an Executive Order at lightning speed, upending a decree of New York policy barring federal law enforcement authorities from maintaining a presence on Department of Corrections property.”

I found the court’s logic on this portion of the opinion to be conclusory and counterintuitive. There is nothing in the law or regulations that defines the Board as focused on “garden-variety” conflicts. It is the system created by the city council to address conflict allegations and, while Judge Rosado believes that she can do better than the board, that is hardly a convincing basis to circumvent the process for the adjudication of such claims. Rosado ignores that this is a specialized body expressly tasked with such conflicts. It is unclear how the court is “better equipped” with its own limited staff to address such matters, other than having the ability to issue judicial injunctions.

Deception or Delegation?

Putting aside this act of judicial overreach, there is also the problem that the order was ultimately issued not by Adams but by Mastro. There are very compelling public policy reasons for taking this action. The city is struggling with the massive demands of its undocumented immigrant population. Before he was ever charged, Adams was viewed as a moderate on such questions who was open to greater federal enforcement. Many states and cities cooperate with federal authorities in this way as a matter of public policy.

Judge Rosado admits that there is a valid question of whether the delegation constituted a type of recusal or cleansing of the decision. However, she maintained that Mastro is not independent because he was appointed by Adams and reports to him. Moreover, she cited New York City Charter § 2604(b)(3), which states that delegating oversight or management does not necessarily erase a conflict of interest. She notes that Adams said publicly that he did not recuse himself and found:

“The Defendants-Respondents’ hyperbolic argument that if Mayor Adams cannot delegate to First Deputy Mayor Mastro, then there is nobody he can delegate to, is without merit. First Deputy Mayor Mastro, although an accomplished and highly educated attorney, is not independent of Mayor Adams and therefore cannot be considered impartial and free from Mayor Adams’ conflicts. First Deputy Mayor Mastro reports directly to Mayor Adams, is appointed by Mayor Adams, and can be fired by Mayor Adams. He is Mayor Adams’ agent.”

It is not clear, however, who would be sufficiently free of Adams’ authority to allow for them to make the myriad of decisions vis-a-vis federal authority. In this matter, Mastro and the Mayor’s office are arguing that he made an independent judgment on the merits of the policy. More importantly, Judge Rosado ignores the implications of her order. She never explains how the city is to function if any order dealing with the federal government could be viewed as part of a quid pro quo. There are a host of joint operations and programs with the federal government. Where does one draw the line and who then makes these decisions ranging from housing to prisons to voting? Rosado seems to shrug and say that anyone reporting to the Mayor or subject to his authority is not sufficiently independent.

The Order

Judge Rosado ultimately finds against Adams, but includes rhetoric exulting the prior pro-immigration policies that further undermines the opinion:

The Court finds that Plaintiff-Petitioner has demonstrated imminent and irreparable harm for purposes of obtaining a preliminary injunction. The harm to intangible assets such as damage to reputation, loss of goodwill, and brand tarnishment are routinely found sufficient to grant injunctive relief. New York City, which thrives as a global hub due in large part to its reputation as being a welcoming home for immigrant communities from around the world, risks having this goodwill and invaluable reputation irreparably damaged as a result of an Executive Order borne out of Mayor Adams’ alleged conflict of interest. New York City, through legislation and decades of policy, has established a reputation as a “Sanctuary City.” This reputation, and the goodwill built from decades of policy decisions, and which have provided New Yorkers with numerous intangible cultural and economic benefits, risks being irrevocably tarnished. The harm to New York City’s reputation as a Sanctuary City, and the goodwill with numerous communities that flows from that reputation, is best preserved through a preliminary injunction prohibiting Defendants-Respondents from acting on Executive Order No. 50.

...

The Court is also cognizant of threat of irreparable harm in a more concrete sense—that is the threat to detained New York State and City residents and their dignity. There is ample evidence that there is already a serious, imminent and ongoing risk that immigrant New Yorkers, and even foreign tourists to New York City, are being wrongfully detained. There are documented reports of individuals being deported to stranger third-countries, and New York City residents are taken into custody for expressing political views contrary to the federal government’s agenda. Residents who are here seeking asylum are being deported to countries they claim to have previously faced persecution for their sexuality, politics, or religion. And this concrete harm flows to the Plaintiff-Petitioner…

I was frankly astonished by the direct discussion of the Mayor’s criminal charges in the conjunction with negotiations over enhanced federal enforcement. While I understand the defense counsel’s job to seek any lawful avenue for relief, I would have immediately cut off such discussions as inappropriate from the perspective of the Justice Department. If such discussions occurred, there is a legitimate concern over a quid pro quo. However, this is not how courts should address such allegations. I believe both Judge Ho (who ruled correctly) and Judge Rosado (who did not) exceeded the parameters for their opinions with extraneous commentary. That is particularly the case with Judge Rosado. More importantly, I believe that Judge Rosado is simply wrong in circumventing the designated board for addressing conflicts of interest and issuing this sweeping opinion.

This is not an easy matter for any board or court. These meetings and the timing of these decisions raise obvious concerns. However, courts are not allowed to engage in conjecture. It is not just plausible but likely that Adams would have extended the access to Rikers Island even without any change in his criminal case.

I do not see the limiting principle in this decision. Adams is still the mayor and may have independent and good-faith reasons for orders that are favorable for the federal government. Indeed, his order was the correct one on the merits. While Judge Rosado never explores the countervailing benefits while writing at length on the costs to a city of immigrants, they are obvious and cannot be ignored. In other words, Adams had every reason to support federal enforcement as a Mayor who ran on making New York a safer city.

This matter should have been left to the Conflicts of Interest Board, and the decision itself is ill-considered and incomplete.

Tyler Durden Tue, 06/17/2025 - 13:00

Trump Swipes At Tulsi On Iran Nuke Contradictory Intel: 'I Don't Care What She Said'

President Trump while on his way back from the G7 summit in Canada, which he cut short due to the Middle East situation, said to reporters aboard Air Force One Tuesday morning that he wants "a real end" to Iran's nuclear problem. He expressed his assumption that Iran is "very close" to having nuclear weapons.

He asserted this means nothing less than Tehran "giving up entirely" its enrichment activities. "I didn't say I was looking for a ceasefire," he said. This was in follow-up to a scathing message he wrote on Truth Social, saying that French President Emmanuel Macron had "mistakenly said that I left the G7 Summit, in Canada, to go back to D.C. to work on a 'cease fire' between Israel and Iran. Wrong! He has no idea why I am now on my way to Washington, but it certainly has nothing to do with a Cease Fire. Much bigger than that."

Via Associated Press

Late yesterday Trump had issued an unprecedented written message telling some ten million Iranian inhabitants to "immediately evacuate" Tehran amid ongoing Israeli strikes, suggesting that a much bigger assault is coming - a warning made much more ominous by the open secret that Iran possesses nukes.

"You're going to find out over the next two days. You're going to find out. Nobody's slowed up so far," Trump said further, hours after the evacuation warning - which came just before 3am local time.

But he also caveated that "I may" send US Middle East Envoy Steve Witkoff or Vice President JD Vance to meet with Iranian officials to seek de-escalation and negotiations. "It depends what happens when I get back," he added.

What made the whole exchange even more interesting is that all of this was partially in response to a question regarding director of National Intelligence Tulsi Gabbard’s March testimony that Iran was not building a nuclear weapon. Here's the exchange:

CNN: You’ve always said you don’t believe Iran should have a nuke. Tulsi Gabbard testified in March that Iran wasn’t building a nuclear weapon.

Trump: I don’t care what she said. They were very close to getting a nuke.

CNN: You’ve always said you don’t believe Iran should have a nuke. Tulsi Gabbard testified in March that Iran wasn’t building a nuclear weapon.

Trump: I don’t care what she said. They were very close to getting a nuke. pic.twitter.com/YJKMGNlvlz

— Townhall.com (@townhallcom) June 17, 2025

It's also the case that the CIA's latest assessment maintains that the Islamic Republic is likely not seeking a nuclear weapon. Crucially this was part of the DNI's annual threat assessment.

Gabbard had previously firmly stated before the Senate Intelligence Committee that the US intelligence community "continues to assess that Iran is not building a nuclear weapon and Supreme Leader Ayatollah Ali Khamenei has not authorized the nuclear weapons program he suspended in 2003." 

And yet currently, a second US aircraft carrier, the USS Nimitz, is en route to Mideast waters, and US Air Force fuel tankers are being positioned in Europe - all for the Pentagon to ready more 'options' for President Trump should military action be initiated (Congress might want a word...).

While the tempo of the exchange of strikes have slowed, the exchange of missile fire has persisted...

⚡️Iranian missiles rain down in the vicinity of the Mossad HQ in Herzliya pic.twitter.com/TGpc7QaEvl

— War Monitor (@WarMonitors) June 17, 2025

Gabbard has in hours following Trump's comments insisted she and Trump are "on the same page" over Iran’s nuclear weapon timeline. "President Trump was saying the same thing that I said in my annual threat assessment back in March in Congress. Unfortunately, too many people in the media don’t care to actually read what I said," Gabbard told reporters as she arrived on Capitol Hill Tuesday.

Meanwhile, at the G7 which Trump left, a joint statement stress that "Iran can never have a nuclear weapons" while also urging de-escalation of the conflict. It added that Israel has a "right to defend itself" - however, made no mention of the Iranians being able to defend themselves (of course, this new war began with an Israeli aerial attack on the country).

* * *

A note on the latest from Deutsche Bank:

Yesterday became steadily more risk-on with extra momentum from a WSJ report, just under 90 minutes after the US open, which said that Iran was signalling it wanted to end hostilities and restart nuclear talks. So that led to a significant easing of the broad market stress, with the S&P 500 (+0.94%) recovering the vast majority of Friday’s -1.13% decline. Similarly, gold fell -1.37%, reversing the spike that saw it post a new record high on Friday. And in line with that theme, some of the assets most affected by the conflict did very well, with the Israeli shekel seeing its biggest daily gain against the US Dollar (+3.49%) since 1998, with Israel’s TA-35 index (+1.82%) closing at an all-time high.

However, just as markets were getting more comfortable, we've seen a bit of a reversal overnight after Trump left the G7 meeting a day early with reports that he has requested the National Security Council to convene on his return to Washington. He posted that “Everyone should immediately evacuate Tehran!” There was no extra context. In fact, as DB‘s Michael Hsueh has pointed out, the G7 leaders' statement was only 121 words, compared with June 2024's statement of 19,834 words, and Dec 2023's statement of 5,108 words. It also only discussed the Israel/Iran conflict whereas normally a whole host of topics are covered.

So we're all in a bit of a limbo in terms of whether anything substantive came out of the summit and whether Trump was alluding to new information with his post and his early G7 meeting departure.  Before his post, that WSJ headline was backed up elsewhere. For instance, Reuters reported shortly afterwards that Iran had asked Qatar, Saudi Arabia and Oman to ask President Trump to get Israel to agree to a ceasefire, in return for more flexibility from Iran in the nuclear talks. And Trump himself later said at the G7 summit that Iran would “like to talk, but they should have done that before”.

There are still big questions as to whether Israel would be receptive to a ceasefire, given that it is seeking to destroy Iran’s nuclear program. Moreover, the public rhetoric hasn’t leant that way either, and Iran’s Mehr News Agency cited a senior security official saying that it is prepared to deliver a “major blow” to Israel after its strikes. So there is maybe diplomatic movement behind the scenes but not yet in the open.

"When the missile arrived, we were in the staircase in the building." Gal told me. "The shock was so huge." pic.twitter.com/lvLgCTvCpY

— Trey Yingst (@TreyYingst) June 16, 2025

Below are more developing events & the latest via Newsquawk

Geopolitics: Latest

• CBS's Jacobs writes US President Trump said "I didn't say I was looking for a ceasefire," he said on AF1. He said he wants "a real end," with Iran "giving up entirely" on nukes." On any threat to US interests, he said Iran knows not to touch our troops. US would "come down so hard if they do anything to our people," he said. Asked his thinking on calling for Tehran to evacuate, he told me he wants "people to be safe." Asked if US involvement would destroy Iran nuclear program, hope their program "is wiped out long before that." Trump sounded undecided about sending Witkoff and/or VP Vance to meet with Iran. "I may," he said. But "it depends what happens when I get back," he said. Trump declined to say if the chairman of joint chiefs and SecDef have provided him with planning options should Iran attack U.S. bases in Middle East. "I can't tell you that," he told me. The Israelis aren't slowing up their barrage on Iran, he predicted. "You're going to find out over the next two days. You're going to find out. Nobody's slowed up so far."
• Israeli officials tell Axios that regime change isn't an official war aim, discussions about it are getting louder and more overt, via Axios.
• Politico Reports: US President Trump will convene his closest military advisers in the Situation Room this morning, where he weighs "whether to join Israel’s bombardment of Iran".
• US President Trump says he is "looking for better than a ceasefire in Iran", "not too much in the mood to negotiate with Iran".
• US President Trump says he has "not reached out to Iran for 'Peace Talks' in any way, shape, or form".
• Senior Iranian Army Commander says attacks against Israel will intensify in the next hours, new wave of drones will hit Israel, via IRNA.
• CNN, citing sources, reports that Iran was up to three years away from being able to produce a nuclear bomb, via Sky News Arabia; US official cited adds that they believe recent Israeli strikes have pushed this back by only a few months.

Strikes

• Iranian ballistic missiles reported over Tel Aviv, via Fox correspondent.
• Iranian media reported several explosions and heavy air defence fire in the capital Tehran; Several explosions east of Tehran amid air defence fire, according to Fars.
• Reports of multiple explosions in Ahvaz - in the oil-rich province of Khuzestan in southwest Iran, according to Iran International.
• Unconfirmed reports noted that three ships are on fire in the Gulf of Oman near the Strait of Hormuz, according to several social media accounts. Ambrey later said it is aware of an incident 22 nautical miles east of Khor Fakkan in UAE (close to the Strait of Hormuz). Incident in Khor Fakkan near the Strait of Hormuz seemingly was caused by two vessels colliding, according to Kpler's Bakr citing their terminal
• IAEA Director Grossi said the damage recorded at Fordow was very limited, underground spaces at the Isfahan facility do not appear to have been affected.

Diplomacy

• US President Trump directed members of his team to attempt a meeting with Iranian officials as quickly as possible, according to CNN sources.
• Trump team proposes Iran talks this week on nuclear deal and ceasefire, according to Axios. The White House is discussing with Iran the possibility of a meeting this week between U.S. envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi, according to four sources briefed on the issue.
• Israeli media reports that Trump is preparing to make a 'final offer' to Iran in the coming days, according to Spectator Index.
• US President Trump said Iran should have signed the deal, Iran wants to make a deal, according to Reuters.
• French President Macron said Americans have made an offer to meet with Iranians, now will see what happens. Macron said European partners are ready to take part in serious Iran nuclear negotiations if a ceasefire is reached. Macron said Trump told G7 leaders there were discussions to obtain a ceasefire between Israel and Iran.

According to CNN, US intelligence assessments said before Israel’s attack last week that not only was Iran not pursuing a nuclear weapon, if it chose to do so, it would have taken three years to produce and deliver one. pic.twitter.com/Ss1LBE52YT

— Dave DeCamp (@DecampDave) June 17, 2025

Trump

• US President Trump posted "Iran should have signed the “deal,” I told them to sign...IRAN CAN NOT HAVE A NUCLEAR WEAPON... Everyone should immediately evacuate Tehran!"
• US President Trump posted "AMERICA FIRST means many GREAT things, including the fact that IRAN CAN NOT HAVE A NUCLEAR WEAPON. MAKE AMERICA GREAT AGAIN!!!"
• "President Trump is leaving the G7 summit EARLY and will return to DC tonight.", according to CNN reporter; Bloomberg suggests due to the Middle East crisis.
• US President Trump requested the National Security Council be prepared in the Situation Room, according to reports citing Fox.
• "US is NOT joining Israel offensively in its military operation, per US officials. Despite reports that President Trump asked the NSC and Situation Room to be readied," according to CBS' Jacobs.
• CBS' Jacobs posted "Trump isn't leaving [right now] because of discussions for a ceasefire between Israel and Iran, I'm told...He is leaving G7 halfway through. Not entirely clear why".
• US President Trump posts that his return to Washington had nothing to do with a ceasefire.

Allies

• Trump admin reportedly told several Middle Eastern allies on Sunday that it doesn't plan to get actively involved in the war between Israel and Iran unless Iran targets Americans, according to Axios sources
• US is sending another aircraft carrier, and more warships to the Middle East, according to NBC.
• US Defense Secretary Hegseth said over the weekend he directed the deployment of additional capabilities to the US CENTCOM; additional deployments are intended to enhance the defensive posture in the region, according to Reuters.
• US Defense Secretary Hegseth said US President Trump still aims for a nuclear deal with Iran, via Fox News; assets in the region will be defended.
• White House aide said it is not true that the US is attacking Iran; says American forces are maintaining their defensive posture.
• "This may really be the last chance for the Iranians before the US actively joins", according to journalist Stein citing a US source.

Tyler Durden Tue, 06/17/2025 - 11:40

2 Chinese Nationals To Stay In Jail Facing Charge Of Smuggling Biological Material

Authored by Frank Fang via The Epoch Times (emphasis ours),

Two Chinese nationals accused of smuggling restricted biological materials into the United States will remain in custody after waiving their right to a hearing in separate court appearances in Detroit on June 13.

(Left) Chinese scientist Yunqing Jian. (Right) Chinese scientist Chengxuan Han. Sanilac County Sheriff's Office via AP

Han Chengxuan, a doctoral candidate from China’s Huazhong University of Science and Technology in central China’s Wuhan city, and Jian Yunqing, a post-doctoral research fellow at the University of Michigan, allegedly smuggled the materials for use at the University of Michigan.

On Friday, the two defendants said they would not challenge prosecutors’ request to keep them in detention while their cases progress.

“This is a constantly evolving situation involving a large number of factors,” Han’s attorney, Sara Garber, told a judge. Garber didn’t elaborate and later declined to comment.

Jian’s attorneys declined to comment Friday.

Han was arrested upon landing at the Detroit Metropolitan Airport on a flight from China on June 8. She arrived on an exchange visitor visa and planned to spend a year at the University of Michigan for a research project on roundworms.

At the airport, Han allegedly made false statements to customs officials about packages she had sent to individuals at a University of Michigan laboratory. She eventually admitted that the packages contained biological roundworm-related materials.

According to the criminal complaint, the packages did not contain the correct documentation and were not imported under the Department of Agriculture or Customs and Border Protection regulations.

In response to Han’s case, FBI Director Kash Patel called out the Chinese Communist Party (CCP) in a post on the social media platform X on June 9.

“This case is part of a broader effort from the FBI and our federal partners to heavily crack down on similar pathogeon [sic] smuggling operations, as the CCP works relentlessly to undermine America’s research institutions,” Patel wrote.

Several Republican lawmakers took to X to echo Patel’s concerns in response to Han’s case.

“Never forget: the CCP is ACTIVELY trying to undermine the U.S. and DESTROY our country,” wrote Sen. Tommy Tuberville (R-Ala.), who sits on the Senate Armed Services Committee.

Sen. Jon Ernst (R-Iowa) called Han’s alleged smuggled items “a potential bioweapon.”

“Food security is national security, and I am working to ensure America is safe from the threat posed by Communist China right here in our own backyard,” Ernst wrote, who is a member of the Senate Committee on Homeland Security and Governmental Affairs.

Rep. Dan Crenshaw (R-Texas), a member of the House Permanent Select Committee on Intelligence, said Han’s case is an example of the CCP’s “asymmetric warfare.”

“The Chinese colonels who wrote Unrestricted Warfare told us exactly how the CCP would fight: without guns, without warning, and without rules,” Crenshaw wrote. “Smuggling pathogens into U.S. labs isn’t random. It’s strategic.”

Jian, who was arrested on June 2, is charged with conspiring with her boyfriend, Liu Zunyong, to bring a fungus known as Fusarium graminearum into the United States. The fungus can devastate wheat, barley, maize, and rice and cause health problems in humans and livestock.

Liu was denied admission into the United States at the Detroit airport in July 2024 and sent back to China after authorities found “four clear plastic baggies with small clumps of reddish plant material” inside his backpack, according to a criminal complaint.

The criminal complaint also said that FBI agents found an electronic document in Jian’s cellphone “describing her membership and loyalty to the Chinese Communist Party.”

There have been previous reports stating that Chinese doctoral students were required to sign a loyalty pledge to the CCP as a condition for receiving government-funded scholarships to study abroad.

The University of Michigan has not been accused of misconduct. It said it has not received any money from Beijing related to the work of the three defendants.

In a statement, the university said it strongly condemns any actions that “seek to cause harm, threaten national security or undermine the university’s critical public mission.”

The Associated Press contributed to this report.

Tyler Durden Tue, 06/17/2025 - 11:20

Largest Russian Strikes In Months Hit Ukrainian Capital, Killing 15 & Wounding Over 100

Russia overnight unleashed one of its largest and sustained attacks on the Ukrainian capital of Kyiv in recent months, resulting in 15 people killed and over one hundred wounded.

The assault, which lasted some ten hours, involved a coordinated barrage of drones, ballistic, and cruise missiles - and severely impacted residential areas, including a direct hit on a nine-story apartment building in the city's Solomyanskyi district.

Via Al Jazeera

Part of the building collapsed after being struck by Shahed drones and a ballistic missile. Emergency crews were responding to the smoke-filled scene through the morning hours.

Mayor Vitali Klitschko said that "every minute the number of injured and dead is increasing, we cannot say for certain how many casualties there have been."

Speaking to journalists at the scene, Kyiv Mayor Vitali Klitschko said that “every minute the number of injured and dead is increasing, we cannot say for certain how many casualties there have been.” 

The aftermath of the attack has been documented at two dozen separate sites across Kyiv’s Solomianskyi, Sviatoshynskyi, Darnytskyi, Dniprovskyi, Podilskyi and Obolonskyi districts.

City authorities indicated fires raged into Tuesday in at least to locations of the capital, and further described:

"Today, the enemy spared neither drones nor missiles," Klymenko said, describing the attack as one of the largest against Kyiv since Russia launched its full-scale invasion of the country in February 2022.

Thirty apartments were destroyed in a single residential block, and emergency services were searching through the rubble for possible survivors, Klymenko added.

Attempting to get Washington's attention, Ukrainian Minister of Foreign Affairs Andrii Sybiha suggested the "massive and brutal strike" was deliberately timed and so is a serious insult to President Donald Trump.

Via Telegram

"Putin does this on purpose, just during the G7 summit. He sends a signal of total disrespect to the United States and other partners who have called for an end to the killing," he stated on social media. There are reports that an American citizen died in the attack.

"During the attack on Kyiv, a 62-year-old U.S. citizen died in a dwelling in the Solomianskyi district opposite where medics were providing assistance," Klitschko said. "Medics noted his clinical, biological death."

Tyler Durden Tue, 06/17/2025 - 10:35

TV Networks Face Advertising Apocalypse After Trump Admin Mulls Pharma Restrictions

Last week independent Senators Bernie Sanders (VT) and Angus King (ME) introduced legislation that would ban pharmaceutical companies from promoting prescription drugs directly to consumers - including through television, radio, print, digital platforms, and social media. 

Today, Bloomberg reports that the Trump administration is now 'discussing policies that would make it harder and more expensive for pharmaceutical companies to advertise directly to patients.'

Although the US is the only place, besides New Zealand, where pharma companies can directly advertise, banning pharma ads outright could make the administration vulnerable to lawsuits, so it’s instead focusing on cutting down on the practice by adding legal and financial hurdles, according to people familiar with the plans who weren’t authorized to speak publicly on the matter.

The two policies the administration has focused in on would be to require greater disclosures of side effects of a drug within each ad — likely making broadcast ads much longer and prohibitively expensive — or removing the industry’s ability to deduct direct-to-consumer advertising as a business expense for tax purposes, these people said.

If this happens, it would mark a major victory for Health and Human Services Secretary RFK Jr., who says he believes Americans consume more drugs than people in other countries due to the ability of US drug companies to directly advertise to consumers. 

While running for president, Mr. Kennedy said he would issue an executive order removing pharmaceutical ads from television, citing overmedication and industry influence on news coverage.

Advertising Apocalypse

As we noted last week, the move would mark a sweeping shift in the U.S. advertising landscape, where pharmaceutical companies are among the largest spenders. Prescription drug brands accounted for roughly 13 percent of all ad spending on linear television in 2025, totaling approximately $2.18 billion so far this year, according to iSpot data. In 2024, the industry spent $3.4 billion on traditional TV ads between January and August alone, according to ad-tracking data.

Since 1997, when the Food and Drug Administration relaxed disclosure requirements for DTC ads, pharmaceutical companies have increasingly leaned on consumer advertising to drive demand. Under current rules, companies need only disclose a drug’s “most important” risks during commercials.

The result has been a media environment saturated with pharmaceutical messaging. Drug ads made up 24.4 percent of all advertising minutes on evening news broadcasts across major networks — including ABC, CBS, CNN, Fox News, MSNBC, and NBC — through May of this year, according iSpot. On CBS Evening News, pharmaceutical companies appeared in more than 70 percent of commercial breaks, per Kantar Media.

Tyler Durden Tue, 06/17/2025 - 10:11

US Homebuilder Confidence Tumbles Near 13-Year-Lows

Confidence among US homebuilders fell to the lowest level since December 2022 in June, with potential buyers deterred by high mortgage rates and anxiety about tariffs and the economy.

A gauge of market conditions from the NAHB slipped 2 points to 32 this month (well below the 36 exp), back near 13 year lows...

Source: Bloomberg

All three of the overall index’s components declined, with a measure of present sales falling to the lowest level since 2012.

Gauges of traffic of prospective buyers and expected sales over the next six months are both at the lowest point in more than a year, NAHB data show.

The trade association is forecasting a decline in single-family starts this year, given weakening conditions, NAHB Chief Economist Robert Dietz said in a prepared statement.

o entice reluctant buyers, builders have increasingly relied on sales incentives and discounts. The share of respondents reporting cutting prices in June rose to 37%, the highest since NAHB started tracking it monthly in 2022.

“Rising inventory levels and prospective home buyers who are on hold waiting for affordability conditions to improve are resulting in weakening price growth in most markets and generating price declines for resales in a growing number of markets,” Dietz said.

Finally, homebuilder sentiment has a long way to go to catch down to homebuyer confidence...

Source: Bloomberg

...and don't expect a Fed rate-cut to help (as the curve is steepening).

Tyler Durden Tue, 06/17/2025 - 10:05

Senate Version Of 'Big Beautiful Bill' Sets Up Showdown With House Over Taxes, Medicaid And SALT

Senate Republicans on Monday unveiled the final and most contentious component of President Trump’s sweeping legislative package, the “Big, Beautiful Bill.” The Finance Committee’s long-awaited text - covering tax policy, Medicaid, and energy provisions - sets the stage for difficult negotiations between the Senate and the narrowly Republican-controlled House.

Senate Majority Leader John Thune (R-SD) next to Sen. John Barrasso (R-WY) center and Sen. Mike Crapo (R-ID) on June 4, 2025 (AP: Alex Brandon)

The Senate proposal scales back or reconfigures several measures passed by the House last month, particularly around health care funding and green energy. It also reveals stark policy divides that could derail GOP unity in the upper chamber.

Making the 2017 Tax Cuts Permanent - with Limits

A core pillar of the Senate’s bill is the permanent extension of key provisions from the 2017 tax overhaul. The legislation would lock in current federal tax brackets, boost the standard deduction, and continue the repeal of personal exemptions — all without expiration dates.

However, the Senate scaled back additional cuts proposed by House Republicans. Notably, the child tax credit would rise to $2,200 per child, short of the $2,500 outlined in the House bill.

New Deductions for Workers, with Caps

The bill introduces targeted deductions for tipped workers, overtime earners, and car owners — a nod to priorities championed by President Trump during his re-election campaign. But the deductions are temporary and capped.

• Tips: Deductible up to $25,000 through 2028

• Overtime Pay: Deductible up to $12,500 (or $25,000 for joint filers) through 2028

• Auto Loan Interest: Deductible up to $10,000 through 2028

While the House bill sought broader relief, Senate Republicans opted for a more measured approach.

A Sharper Knife to Medicaid

In a significant departure from the House version, the Senate bill aggressively targets Medicaid financing, particularly in states that expanded the program under the Affordable Care Act.

The legislation would reduce the allowable provider tax rate - a key funding mechanism for state Medicaid programs - from 6 percent to 3.5 percent by 2031. This reduction, phased in beginning in 2027, would apply only to expansion states.

Meanwhile, non-expansion states would be barred from introducing new provider taxes, though existing rates would be preserved. Nursing homes and intermediate care facilities are exempt from the cuts.

Unlike the House version, which protected existing hospital payment arrangements, the Senate bill eliminates some current state-directed payments altogether. The move drew immediate criticism from rural-state Republicans. Sen. Josh Hawley (R-Mo.), whose state relies heavily on provider taxes, expressed concern about the impact on hospitals.

Work Requirements, With Tighter Conditions

Both chambers support requiring certain Medicaid recipients to meet work requirements, but the Senate version goes further. Adults with children over the age of 14 would now be required to work, attend school, or perform community service at least 80 hours a month.

The House version would exempt all parents of dependent children — a difference likely to stir debate during reconciliation talks.

Green Energy Credits Rolled Back, but Less Harshly

The Senate’s approach to green energy tax credits appears less stringent than the House’s, though it still represents a rollback of the 2022 Inflation Reduction Act.

Under the Senate bill:

• Projects must begin construction in 2025 to qualify for full credits.

• Projects starting in 2026 would receive 60 percent of the credit.

• Those beginning in 2027 would receive 20 percent.

• After 2028, no credit would be available.

Unlike the House version, the Senate bill removes a requirement that projects produce electricity by 2028. It also extends eligibility to hydro, nuclear, and geothermal projects starting before 2034 — additions not included in the House’s text.

SALT Deduction Fight Reignited

The Senate text would make permanent the existing $10,000 cap on state and local tax (SALT) deductions, a dramatic rollback of a compromise secured by Speaker Mike Johnson (R-La.) with blue-state Republicans to raise the cap to $40,000 for households earning under $500,000.

Majority Whip John Thune (R-S.D.) acknowledged that the $10,000 figure is a negotiation starting point. But House moderates are not budging.

“This proposal is DEAD ON ARRIVAL,” Rep. Mike Lawler (R-NY) posted on X, adding that "$40,000" is what was agreed upon after 'good faith negotiations.' 

I, along with my fellow SALT Caucus members, are actively engaging with Senators, House Leadership, and the White House and am confident the deal as previously negotiated will be in the final bill that is signed into law. https://t.co/LZovYoFs7O pic.twitter.com/scC1jj4oXe

— Congressman Mike Lawler (@RepMikeLawler) June 16, 2025

A Larger Debt Ceiling Hike Triggers Backlash

Perhaps the most contentious provision of all: the Senate bill would increase the debt ceiling by $5 trillion, surpassing the House’s proposed $4 trillion hike.

The move drew immediate opposition from fiscal conservatives. Sen. Rand Paul (R-KY) said he had informed Senate leadership he could not support the bill with the current debt ceiling language.

Section 899

As Goldman Sachs notes, the Senate version of the “Section 899” provision to impose taxes on certain foreign individual, corporations, and governments makes four important changes from the House version:

1. The application of higher US taxes would be delayed one year until the start of 2027.
2. The same 5pp increase in tax rates but explicitly limit the total increase to 15pp after 3 years.
3. The “portfolio interest exception” would exclude individual and corporate holders from increased tax withholding on interest payments.
4. Small technical change that should result in the exclusion of foreign governments including central banks from interest withholding along with corporate and individual holders of US debt.

Collision Course Ahead

With the Senate bill now public, Republicans face an uphill climb in reconciling the two chambers’ positions. Deep ideological divisions remain on Medicaid reform, tax relief structure, and the scale of federal borrowing.

Negotiations are expected to intensify in the coming weeks as Republicans seek to deliver on Trump’s legislative priorities while avoiding a GOP family feud that could fracture the party ahead of November.

Tyler Durden Tue, 06/17/2025 - 10:00

Trump Says Trade Deal With Canada 'Achievable' Within Days Or Weeks

Authored by Carolina Avendano & Noé Chartier via The Epoch Times (emphasis ours),

BANFF, Alta.--As G7 leaders gather in Alberta for their annual summit, U.S. President Donald Trump signalled a trade deal with Canada could be reached in the coming days or weeks, provided both sides find common ground.

President Donald Trump speaks during a meeting with Canada's Prime Minister Mark Carney on the sidelines of the G7 Summit, Monday, June 16, 2025, in Kananaskis, Canada. AP Photo/Mark Schiefelbein

Trump made the comments when speaking to reporters after a bilateral meeting with Prime Minister Mark Carney on the morning of June 16.

Trump said trade with Canada would be among the key topics discussed at the summit. “I think we are going to accomplish a lot,” Trump said. “I think our primary focus will be trade, and trade with Canada, and I’m sure we can work something out.”

When asked if a potential deal could be reached within days or weeks, Trump said “it’s achievable,” while noting that “both parties have to agree.” Asked what is preventing the two nations from reaching a deal, the president pointed to the “different concepts” he and Carney hold.

“I have a tariff concept; Mark has a different concept, which is something that some people like, but we are going to see if we can get to the bottom of it today,” Trump said.

The president said he has always been a “tariff person,” because “it’s simple, it’s easy, it’s precise, and it just goes very quickly.” He said Carney has a “more complex idea, but also very good,” and that they would look at both ideas to evaluate a potential agreement.

Carney did not speak much during the scrum with reporters. In his comments, he welcomed the president to Canada, saying it was a “great honour” to receive him.

“This marks the 50th birthday of the G7, and the G7 is nothing without U.S. leadership,” Carney said, remarking on Trump’s “personal leadership” on issues such as geopolitics, the economy, and technology. Carney said Canada wants to work “hand-in-hand” with the United States on these areas.

Trump is accompanied at the summit by top U.S. officials, including Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer.

The meeting between Trump and Carney took place just before G7 leaders convened for their official welcome to the summit, which is taking place in Kananaskis, Alta., until June 17. 

The meeting between Trump and Carney was their second in-person meeting since the prime minister’s visit to the White House on May 6. The two have been regularly in touch in recent weeks as they seek to hammer out a deal involving trade and security.

Trump’s comments about a deal with Canada being achievable in the short term come after Minister Dominic LeBlanc said the talks haven’t been progressing quickly enough. LeBlanc is the minister in charge of trade relations with the United States.

“Our hope was that we would have made more progress before the president arrives in Alberta for the G7. We haven’t hit that sweet spot,” LeBlanc told Global News over the weekend.

Canada has been affected by three different sets of tariffs imposed by the Trump administration, some with carve-outs for goods falling under the United States-Mexico-Canada free trade deal (USMCA). 

One set of tariffs is the universal levies for all countries on steel and aluminum, which Trump doubled to 50 percent at the beginning of June. One set of tariffs relates to automobiles and car parts. Another set of tariffs impacts only Canada and Mexico, and is related to border security and drug trafficking concerns around their borders with the United States. 

Before the G7, the Liberal government introduced a bill in Parliament seeking to reinforce the border by giving increasing powers to security agencies and tightening immigration rules.

Carney also recently announced that Canada would be meeting the NATO defence spending guideline this year, several years before initially planned. Trump has long criticized members of the military alliance who don’t meet the defence spending target of 2 percent of GDP. Since being elected in November, Trump has also criticized Canada for not having a robust presence in the Arctic.

High-Level Meetings

Carney held bilateral meetings with other leaders on June 15, including with UK Prime Minister Keir Starmer, Australian Prime Minister Anthony Albanese, South African President Cyril Ramaphosa, and German Chancellor Friedrich Merz.

Starmer travelled to Ottawa for an official visit before attending the G7. Carney and Starmer said in a joint statement they met to “reaffirm the profound friendship and shared values” that unite both nations.

Carney has sought to reinforce the relationship with the United Kingdom amid tensions with the United States. Shortly after taking office in mid-March following his Liberal leadership win, Carney went to the United Kingdom and France. He has said Canada is the “most European of non-European countries.”

The two leaders also agreed on collaborating further on trade, science, technology, and innovation. This includes expanding trade under the Canada-UK Trade Continuity Agreement, and deepening cooperation in the development of semiconductors, quantum technologies, nuclear energy, artificial intelligence to “support national security,” biomanufacturing, and critical minerals. They also agreed to enhance defence and security partnerships.

Tyler Durden Tue, 06/17/2025 - 09:45

BOJ Keeps Rates On Hold, Announces Tapering Of Taper

The first central bank to announce its decision this week (ahead of the Fed and BOE), overnight the BoJ kept rates on hold at 0.5% as widely expected in a unanimous vote after a two-day policy meeting, and provided limited new guidance on their assessment of macro conditions or on the timing of further rates hikes, punting due to uncertainty over tariffs. The key tension in their outlook continues to be between domestic conditions on inflation and wage growth evolving as expected, and a still highly uncertain backdrop from US and global policy on trade and other issues. Their tone on both of these issues was broadly unchanged from previous meetings.

More importantly, the central bank announced that it intends to slow the rate at which it reduces its bond purchases next year: the BoJ signalled it would shift to a slower tapering in JGB purchases from April 2026 (also as expected), maintaining the current JGB purchase reduction guidance, reducing purchases by ¥400 bn per quarter until March 2026, and then continue reducing purchases at a slower pace of ¥200 bn per quarter, to reach around ¥2 tn per month in January-March 2027.

This action is likely aimed at minimizing market disruptions while still providing adequate support for the Japanese economy amidst economic uncertainty arising from US trade policies. Furthermore, the BOJ indicated that it will perform an interim assessment of the plan to reduce bond purchasing in June 2026. 

The JGB purchase plan for the upcoming July-September period, released at the same time, showed that the BOJ will maintain the monthly purchase for the ultra-long sectors, and reduce purchases mainly in the medium- to long-term sectors.

The board’s decision follows a recent plunge in long-dated JGBs that rippled across global debt markets.

The BOJ began to reduce its bond purchases in August, five months after ditching its negative interest rate and yield curve control program. The need to subsequently fine tune the quantitative tightening plans is a fairly common occurrence for central banks including the Federal Reserve given the need to maintain market stability and avoid upending the economy. Still, the scale of the BOJ’s balance sheet against Japan’s output stands at around 120%, far bigger than the corresponding ratios for the Fed and the European Central Bank.

“We made our decision to ensure we’re not cutting purchases too fast in a way that would cause a negative impact on the economy through abnormal volatility in yields,” Ueda said at a press briefing after the decision.

As Goldman notes, the BOJ result was announced right after PM open and the result was inline with investors' expectation.  The yen fluctuated in a relatively narrow range against the dollar following the announcement while bonds fell, nudging yields higher on debt across maturities from two- to 40-years.

While the central bank’s decision showed it is aware of the need to carefully calibrate its paring of bond purchases, it also demonstrated a determination to reduce its footprint in the debt market. In that sense, the BOJ remains firmly on a path of normalization despite the high level of uncertainties in a world shaken by trade wars and intensifying conflict in the Middle East.

The new plan helps address recent volatility in the market while maintaining some flexibility, said Shinichiro Kobayashi, chief economist at Mitsubishi UFJ Research and Consulting, noting that the plan doesn’t even take effect until next year. “While balancing those two points with this decision, the BOJ remains on its tightening path.”

In an illustration of the central bank’s intention to keep moving out of the market and to stick to a largely predictable path, it will continue cutting monthly purchases at the current quarterly pace before the new plan kicks in next April.

Traders will watch to see if the central bank’s shift to smaller reductions in next year’s plan helps calm the market. The Ministry of Finance may also offer some reassurance to investors over the coming days, if it signals a reduction in its issuance of super-long bonds, as is expected by economists. Ueda said he was in close contact with the government over the BOJ’s bond purchases.

“The ball is now on the government’s side to calm the bond market,” said Mari Iwashita, executive rates strategist at Nomura Securities Co.

As Bloomberg noes, concerns about the future trajectory of Japan’s spending plans and its bond issuance persist ahead of a national election next month. Prime Minister Shigeru Ishiba is already on the back foot with a minority government that relies on some opposition support to pass legislation. Lowering Japan’s sales tax has become a rallying call for parties outside the ruling coalition ahead of the vote, a move that would further squeeze the nation’s finances.

With next year’s bond-buying plan now out in the open, BOJ watchers also scrutinized Ueda’s comments on the timing of the next rate hike given the ongoing strength of inflation. Japan’s key monthly inflation indicator showed prices rising at 3.5% in April while rice, the nation’s staple food, has nearly doubled of late, helping harden inflationary views among households.

BOJ officials see prices rising a little stronger than they previously expected, people familiar with the matter told Bloomberg earlier this month even before oil prices surged on deepening Middle East tensions. That’s a factor that may open the door to discussions over whether to raise interest rates if the impact from global trade tensions appears manageable.

A meeting between Trump and Ishiba on Monday in Canada failed to deliver a trade deal that can reduce the uncertainties on trade. But no deal was probably preferable to a bad deal for Ishiba ahead of the election. Still, if the two sides can reach an agreement, that may open the path for the central bank to mull its next rate move.

“It’s not appropriate for me to comment on the likelihood of a rate hike in the near future, but I’d like to see how hard data pan out,” Ueda said.

“The BOJ will be watching Japan’s trade talks with Trump and Ishiba’s election as vital points but it’s hard to imagine both of them turn rosy in time for a move in July,” Iwashita said. “The moment of truth for a rate hike will probably come from around September when data will likely start to show the impact of tariffs”

Tyler Durden Tue, 06/17/2025 - 09:30

US Industrial Production Drops In May As Capacity Utilization Sinks

US Industrial Production fell 0.2% MoM in May - the second decline in the last three months. That print was weaker than expected from an upwardly revised April print and dragged the YoY change in production down to +0.6% YoY...

Source: Bloomberg

On the Manufacturing side, output rose 0.1% MoM, from a downwardly revised 0.5% decline in April

Source: Bloomberg

Interestingly, while auto retail sales dropped (as we detailed earlier), US auto production rose in May while Energy & Computer production fell...

Source: Bloomberg

Capacity Utilization slipped lower in May to 77.4%, falling for the third straight month...

Source: Bloomberg

Is today the turning point (down) in 'hard' data (as soft data has turned up)?

What will Jay Powell do with that?

Tyler Durden Tue, 06/17/2025 - 09:25

US Retail Sales Tumbled In May As Gas Prices Fell, Car-Buying Stalled

BofA's omniscient analysts warning ahead of this morning's retail sales data from the US is simple: Brace!

And after the small 0.1% MoM rise the prior month was revised to a 0.1% MoM decline, BofA was right again with Retail Sales tumbling 0.9% MoM in May - the biggest drop since March 2023...

Source: Bloomberg

The big driver of downside was a drop in Gasoline Station sales - which makes some sense as gas prices have tumbled - and an even bigger drop in Auto Sales (as the tariff front running surge evaporates)...

The tariff front-running hangover hits...

Source: Bloomberg

Ex Autos and Gas, sales fell 0.1% MoM (worse than the +0.3% expected) and Ex-Autos sales dropped 0.3% MoM (worse than the +0.2% MoM expected).

So an ugly set of data reflecting sentiment's slump?

“There was front running in autos because of tariffs in recent months and now we're getting payback," said David Russell, head of market strategy at TradeStation. 

"Data centers and tech investment are driving the economy now. Consumers are on the sidelines as the job market weakens and Americans grapple with higher prices. It could be a pause before confidence rebounds, or a warning before a broader slowdown."

As a reminder, this data is nominal, so adjusting (very roughly) for inflation, retail sales rose 0.9% YoY, back to its lowest since Oct 2024... but still positive...

While the seasonally-adjusted sales print was down, unadjusted sales were higher in May (as they have been seasonally for years)...

However, there is a silver lining as the Control Group - which feeds directly into GDP - rose 0.4% MoM (better than expected) and considerably stronger than the upwardly revised 0.1% MoM decline in April...

So, the bad news is Americans seem to be spending less... but top-down GDP will be positively impacted in Q2.

Tyler Durden Tue, 06/17/2025 - 08:43

Futures Slide, Oil Rises As Mideast Tensions Build

US stock futures and global markets are broadly lower on escalation/contagion worries in the Middle East after Trump called for the evacuation of Tehran and cut short his G-7 visit, and yet, as BBG notes, traders don’t seem too perturbed, with futures remaining solidly above last week’s lows, when the conflict between Israel and Iran started. As of  8:00am, S&P 500 futures fell 0.6% at 5:25 am in New York, with Nasdaq 100 contracts -0.6% as all Mag7/Semis are weaker. In main overnight news, Trump left the G-7 in Canada early and later told reporters on Air Force One that he is “not too much in the mood to negotiate” with Iran, and wants a deal that is better than a ceasefire. A draft of the Senate’s version of the budget/tax bill drawing complaints from fiscal hawks and Section 899 features sees its first ex-US backlash with one money manager freezing all long-term investments in the US, per BBG. Elsewhere, the USD is stronger, Treasury yields are lower and commodity prices are higher. WTI crude rose, partially erasing Monday’s loss, while gold stayed near a record high. The Energy complex continues its gains and both Base and Precious have a bid. Retail Sales is the key macro data print today where consensus sees the the ex auto print up 0.3%, an increase from the previous month but the latest BofA card data suggests a miss is on deck. 

In premarket trading, Mag 7stocks are mostly lower (Microsoft -0.9%, Tesla -0.6%, Alphabet -0.7%, Amazon -0.7%, Apple -0.4%, Meta -0.3%, Nvidia +0.8%). Here are the other notable premarket movers: 

• Solar stocks tumble after Senate Republicans released a bill that would end tax credits for wind and solar earlier than for other sources. Sunrun (RUN) -32%, Enphase (ENPH) -18%
• Digital Turbine (DYN) climbs 9% after the provider of software used in mobile phones reported fourth-quarter adjusted earnings per share above what analysts expected.
• Dyne Therapeutics (DYN) drops 24% after announcing an updated plan for obtaining US accelerated approval for DYNE-101 for the treatment of myotonic dystrophy type 1 following a meeting with the FDA and analysis of new long-term functional data.
• Immuneering (IMRX) jumps 10% after the drug developer gave data from a mid-stage trial of its investigative combination therapy to treat pancreatic cancer patients.
• Lennar (LEN) rises about 2% after a miss on the homebuilder’s new orders outlook was tempered by better-than-expected gross margins, which RBC Capital Markets said should reassure investors.
• Navitas Semiconductor (NVTS) slips 2% after Deutsche Bank downgrades the stock to hold from buy, noting the share rally that followed news the company will collaborate with Nvidia on data-center power infrastructure.
• Redwire Corp. (RDW) falls 13% after the aerospace and defense technology firm said it was offering $200 million of shares. The overnight share sale was priced at $16.75 to $17.75 per share, according to deal terms seen by Bloomberg News.
• Verve Therapeutics (VERV) soars 75% after Eli Lilly & Co. agreed to buy the company for as much as $1.3 billion.

Sentiment shifted on Tuesday as investors reacted to fast-moving developments in the Middle East and their potential impact on global markets. While traders had earlier shown confidence the conflict would be contained, oil remains in focus, with a commodity that had hovered near pandemic-era lows emerging as an unexpected source of inflation. As Israel and Iran continued to trade attacks, Trump left the Group of Seven leaders’ meeting in Canada early to deal with the crisis. Though he hasn’t outlined what comes next, Trump told reporters aboard Air Force One he was looking for “a real end, not a ceasefire” to the conflict.

"Today’s downward movement, triggered by Trump, could actually last for a few days or even a few weeks,” said Alexandre Baradez, chief market analyst at IG in Paris. “There’s been little progress on trade negotiations and now there’s an added geopolitical risk. I don’t see a selloff but the VIX could certainly move higher.”

The risk of oil-driven price pressures adds to the uncertainty facing central banks. Fed officials have signaled a prolonged pause in interest rates, and investors will be watching Chair Jerome Powell’s remarks on Wednesday for clues about what could eventually prompt a policy move, and when. 

Oil prices could spike to $120 a barrel if attacks by Iran halts traffic in the Strait of Hormuz, according to Jim Reid, global head of macro research and thematic strategy at Deutsche Bank, who agreed with an identical assessment from JPMorgan last week.  “The Fed has got so many conflicting forces at the moment,” Reid told Bloomberg TV. “Tomorrow the Fed is just going to stay put and not give too much away. The oil price would give them another reason just to sit and wait.”

 

Even as the S&P 500 Index rose Monday on hopes the conflict between Iran and Israel won’t spill over into a broader war, the trading desk at JPMorgan's markets desk shifted away from its tactically bullish view on US stocks, citing growing risks and the greater likelihood of a retreat. “While there has been a strong buy-the-dip mentality with investors having been rewarded for fading negative news this year, we think it’s best to pull back on risk,” said JPM head of market intel, Andrew Tyler; he previously correctly predicted a multi-week stock rally back in April through this point as well as the previous market high. “Positioning indicates that irrespective of Israel-Iran, the market was setting up for a pullback,” he told clients early Monday.

On the home front, Senate Republicans proposed a tax plan that would reduce taxes for households and businesses, but also cut Medicaid benefits and add to US deficits. The bill would also end tax credits for wind and solar earlier than for other sources of power, sending solar stocks lower in premarket trading.

As Bloomberg adds, evidence is emerging that the risk-on momentum that has propelled the S&P 500 to a 21% gain from its April trough is hitting a rough patch. The gauge has been sitting near the 6,000 level for a month, while the stock market’s so-called fear index, or VIX, has climbed back above 20, showing continued investor angst over geopolitical developments and other risks.

Elsewhere, BofA’s fund manager survey showed investors are the most underweight on the US dollar in 20 years. “The biggest summer pain trade is long the buck,” Michael Hartnett wrote. And Amundi expects US economic growth to slow sharply to 1.6% in 2025-2026 and equity rotation to Europe and emerging markets to continue. The BofA survey also showed that investor sentiment is back to the “Goldilocks bull” levels seen before Trump’s April tariffs. The most crowded trades are long gold (41%), long Mag 7 (23%) and short US dollar (20%). Citi, meanwhile, forecast that gold will sink back below $3,000 an ounce on weaker investment demand, improving global growth forecasts and Fed rate cuts.

In Europe, the Stoxx 600 dropped 0.7% on drags from German, French, Italian and Spanish equities. Health care stocks extend their decline after President Donald Trump said tariffs on the sector are coming. The UK’s FTSE 100 relatively outperforms with a 0.5% drop, offset by gains for oil majors BP and Shell. Here are the biggest movers Tuesday:

• Energy stocks extend gains, bucking losses across the broader European market, as the Israel-Iran conflict fanned fears of crude supply disruptions, lifting oil prices
• FDJ United advances as much as 4.6%, to touch the highest in more than three months, as JPMorgan says the French lottery and sports betting company sits at an attractive entry point and starts coverage with an overweight recommendation
• Rusta rises as much as 13%, the most since March 2024, following fourth-quarter results from the department store owner which showed growth in sales and better profitability
• Renishaw shares rise as much as 2.8% after the precision measurement and calibration equipment maker said it plans to cut £20 million in yearly labor costs and introduce a new reporting structure ahead of its capital markets day in Wales
• ITM Power shares rise as much as 12% after the company was selected for two new projects in the UK, including a sizable hydrogen project
• RWS Holdings gains as much as 9.2% after delivering a trading update on Tuesday, with Berenberg describing the translation services firm’s new go-to-market strategy as “compelling”
• Clean energy stocks including Vestas and Orsted fall in Europe after US Senate Republicans released a bill that would end tax credits for wind and solar earlier than for other sources, and make only modest changes to most other incentives
• Ashtead shares give up initial gains to trade as much as 2.2% lower after the equipment rental specialist’s subdued guidance for this year was seen leading to consensus cuts
• Lenzing slides as much as 12%, the most in five months, as Oddo BHF downgrades the stock to underperform from neutral, noting that the textile producer is “still not out of the woods” in terms of its debt burden
• Deutsche Telekom shares drop as much as 3% after Softbank Group offloaded shares in T-Mobile US, in which the German firm is the biggest investor, at a discount

Earlier in the session, Asian equities traded in a narrow range, as concerns over the Israel-Iran conflict countered gains in technology shares on optimism over artificial intelligence. The MSCI Asia Pacific Index swung between a gain of as much as 0.3% and loss of 0.2%. A sub-gauge of technology shares extended its recent outperformance, with chipmakers TSMC and Samsung among the biggest boosts Tuesday. Stocks rose in Taiwan, South Korea and Japan while Chinese shares drifted lower. In key regional news, the Bank of Japan maintained its benchmark interest rate at 0.5%, as expected. It also confirmed it will taper its bond purchases at a slower pace starting next April.

Overnight the Bank of Japan (BOJ) has left short-term interest rates at 0.5% as widely expected in a unanimous vote after a two-day policy meeting. More importantly, it announced that it intends to slow the rate at which it reduces its bond purchases next year. Beginning in April 2026, it will decrease its bond purchases by approximately 200 billion yen per quarter, down from the current rate of 400 billion yen per quarter. This action is likely aimed at minimizing market disruptions while still providing adequate support for the Japanese economy amidst economic uncertainty arising from US trade policies. Furthermore, the BOJ indicated that it will perform an interim assessment of the plan to reduce bond purchasing in June 2026. Looking ahead, attention is now directed towards BOJ Governor Kazuo Ueda post meeting comments. 5-year and 10-year Japanese Government Bonds (JGB) have increased by +4.3bps and +5.5bps respectively split before and after the meeting.

In FX, the Bloomberg Dollar Spot Index is little changed, though all G-10 peers are lower versus the US currency. Yen weakens to 144.89/USD after the Bank of Japan kept rates at 0.5% and said it will step back from the bond market at a slower pace from next year as expected.

In rates, treasuries yields are lower across maturities, outperforming European bonds after US President Trump played down the likelihood of a ceasefire in Israel’s war with Iran. S&P 500 futures are falling, adding to downside pressure on yields. Treasury yields are lower by 2bp-3bp with curve spreads little changed; 10-year is down about 3bp at 4.42%, outperforming bunds and gilts in the sector by 3bp-4bp. Money markets continue to price in less than two quarter-point Fed cuts by the end of the year. US session includes retail sales data and supply, particularly Hyundai Capital America 7-part bond offering and Treasury’s 5-year TIPS reopening. 

In commodities, brent crude gained 1.8%, extending oil’s advance since hostilities started to more than 7% as traders parsed comments from President Trump on the Israel-Iran conflict and remain on edge about potential supply disruptions. Spot gold falls roughly $5 to trade near $3,380/oz.

Looking at today's calendar, US economic data slate includes May retail sales and import/export price indexes and June New York Fed services business activity (8:30am), May industrial production (9:15am), and April business inventories and June NAHB housing market index (10am).

Market Snapshot

• S&P 500 mini -0.6%
• Nasdaq 100 mini -0.6%
• Russell 2000 mini -0.9%
• Stoxx Europe 600 -0.8%
• DAX -1.3%, CAC 40 -0.9%
• 10-year Treasury yield -2 basis points at 4.43%
• VIX +1.5 points at 20.63
• Bloomberg Dollar Index little changed at 1203.26
• euro little changed at $1.1555
• WTI crude +1.4% at $72.79/barrel

Top Overnight News

• Donald Trump left the G-7 leaders meeting a day early but denied it was to work on a ceasefire between Israel and Iran, adding later he was looking for something “better.” The president earlier called for the evacuation of Tehran. BBG
• The Senate’s draft tax bill calls for increasing an investment credit for semiconductor manufacturers, a potential boon for chipmakers that the Trump administration is urging to increase the size of their US projects. The measure would increase the tax credit to 30% of investments in plants, up from 25%. BBG
• The US and Japan failed to reach an agreement on a trade package on the sidelines of the G7 summit, an outcome that leaves the Asian nation inching closer to a possible recession as the pain of US tariffs hits its economy. BBG
• OpenAI and Microsoft tensions are reaching a boiling point: "The startup, growing frustrated with its partner, has discussed making antitrust complaints to regulators". OpenAI seeks new financial concessions from Microsoft (MSFT), according to The Information. OpenAI wants to modify existing clauses in the contract with Microsoft that give the Co. exclusive rights to host OpenAI models in its cloud. OpenAI wants Microsoft to have a roughly 33% stake in reshaped units in exchange for foregoing its rights to future profits: WSJ
• Final Senate passage vote on the GENIUS Act scheduled for Tuesday at 16:30 EDT.
• China’s auto OEMs plan to begin utilizing 100% domestic chips as soon as 2026 as the gov’t proceeds with a plan to reduce the country’s reliance on Western technology. Nikkei
• China is set to see its oil consumption peak in 2027 following a surge in EV sales and the continued deployment of high-speed rail and trucks running on natural gas. IEA
• The BOJ will cut its bond purchases by ¥200 billion ($1.34 billion) per quarter starting next year, versus the current reduction of ¥400 billion per quarter. It stood pat on rates, as expected. JGB futures slid and the yen erased losses. BBG
• White House has proposed a meeting this week between Iran’s foreign minister and Steve Witkoff as Trump looks to a diplomatic solution to ending the war. FT
• UK Chancellor Rachel Reeves is considering reversing a decision to charge inheritance tax on non-domiciled residents’ overseas assets in a bid to stem the current wealth exodus. FT
• Eli Lilly is buying  gene-editing startup Verve Therapeutics for up to ~$1.3 billion (Deal Terms: $10.50/SHR + $3 CVR). Verve shares soared as much as 112% premarket. BBG

Tariffs/Trade

• US President Trump said he signed a document finalising a trade deal with Britain (as expected). US President Trump said the UK is protected (regarding tariffs) because he likes the UK. US tariff on UK steel to remain at 25% for now, according to Bloomberg citing a UK official. Imports of automobiles within tariff-rate quota that would otherwise be subject to a 25% tariff shall instead be subject to a combined tariff of 10%. The US and UK committed to strengthening aerospace and aircraft manufacturing supply chains by establishing tariff-free bilateral trade in certain aerospace products. The US intends to promptly construct a quota at most-favoured-nation rates for steel and aluminium articles and certain derivative steel and aluminium articles that are products of the UK. The US and UK committed to negotiate significantly preferential treatment outcomes on pharmaceuticals and ingredients of the UK, contingent on findings of an investigation. The US intends to create an annual quota of 100,000 vehicles for United Kingdom automotive imports at a 10 per cent tariff rate.
• US President Trump says the EU is not yet offering a fair deal, there is a chance of a deal with Japan but they are "tough". Could do a separate deal with Canada on the Golden Dome. Pharma tariffs are coming "very soon".
• US President Trump met with European Commission President von der Leyen per her request, according to CBS' Jacobs.
• EU and US leaders reportedly instructed teams to accelerate work on trade, according to Bloomberg citing European Commission President von der Leyen
• Canadian PM Carney and US President Trump agreed to pursue negotiations toward a new economic and security relationship within the coming 30 days, according to the Canadian PM's office.
• Japanese PM Ishiba and US President Trump did not reach a tariff agreement; but confirmed they are to continue tariff talks, according to Fuji TV. Japan Finance Minister Kato said no fixed plan right now to hold further talks with US Treasury Secretary Bessent.
• White House said, concerning steel and aluminium, Secretary Lutnick will determine the quota of products that can enter the US without being subject to 25% Section 232 tariffs, according to Reuters.
• FBN's Gasparino posted "“As of today Xi and Trump have not talked about the fate of TikTok US. It’s last on the list. Most likely get punted for another 75 days on June 19th. The AI chip sales to China are emerging as a much bigger issue”.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed/mostly lower with the region failing to coattail on Wall Street's gains, as geopolitical angst kept risk subdued, namely after US President Trump posted that "Everyone should immediately evacuate Tehran!" before cutting his G7 trip short, stoking fears of a US military offensive. Sentiment later stabilised after CBS reported that the US is not joining Israel offensively in its military operations against Iran, with US officials also backing a defensive stance amid assets in the region. ASX 200 traded slightly softer and in a narrow range, with upside in gold miners cushioning losses for the index. Nikkei 225 was kept afloat amid the softer JPY after the US and Japan failed to reach an agreement. The index saw a modest hawkish reaction to the BoJ decision which reduced the pace of JGB purchases as telegraphed. Hang Seng and Shanghai Comp opened flat before tilting lower in overall uneventful trade across the Chinese bourses amid the cautious risk tone with the immediate focus largely on geopolitics.

Top Asian News

• PBoC injected CNY 197.3bln via 7-day reverse repos with the rate maintained at 1.40%.

BOJ Announcement

• BoJ maintained its interest rate at 0.5% as expected through a unanimous vote. The Bank has also decided to reduce the amount of its monthly JGB purchases by about JPY 200bln each quarter starting from April 2026, in line with source reports.
• The decision on the bond taper plan was made with an 8-1 vote, with Board member Tamura dissenting. Tamura dissented, arguing that the Bank should allow long-term interest rates to be determined by the market and its participants. He proposed that the Bank reduce its monthly outright purchases of JGBs by about 400bln yen each calendar quarter until January-March 2027 in principle, but this proposal was defeated by a majority vote.
• As part of the taper plan, Japan will continue to reduce JGB purchases by JPY 400bln per month until March 2026. From April 2026 onwards, the amount of monthly JGB purchases will be reduced by about JPY 200bln per quarter, with the total monthly purchases expected to be around JPY 2tln by January-March 2027. An interim assessment of the bond taper plan for the period starting in April 2026 will take place at the June 2026 policy meeting, and Japan is prepared to amend the taper plan at future policy meetings if necessary. The BoJ’s holdings of JGBs are expected to decrease by roughly 16-17% by March 2027 compared to June 2024 levels.
• BoJ said the frequency of auctions will be changed from four times a month to three times a month in principle for JGBs with shorter maturities; the frequency of auctions for JGBs with longer maturities has been maintained.
• Regarding economic conditions, Japan has maintained its economic assessment, noting that the economy has recovered moderately despite some areas of weakness. However, uncertainty remains high, particularly over the impact of trade policies, which are a key focus. The BoJ emphasised the necessity of paying attention to the potential effects of trade policies on financial and foreign exchange markets. Inflation expectations have risen moderately, but it remains extremely uncertain how global trade policies will evolve and how overseas economic activities will respond.

BOJ - Ueda conference

• BoJ Governor Ueda says it is too quick tapering of bonds could result in unexpected effects in the market. Do not see much negative impact of reducing tapering on the economy. Judged that downside risks are bigger for the economy and prices. Inflation expectations are still not anchored to 2% in Japan. Expects the impact of trade policies to become more evident. Will not rule out any tools, when questioned on YCC

European bourses (STOXX 600 -0.8%) opened lower across the board and sentiment continued to wane as the morning progressed; the complex currently just off worst levels. Sentiment today has been hit amid the currently tumultuous geopolitical environment in the Middle East. Iran and Israel have continued to strike each other overnight and US President Trump said "Everyone should immediately evacuate Tehran!", while also cutting his G7 trip short. European sectors hold a strong negative bias with only handful of sectors in positive territory. Unsurprisingly, Energy takes the top spot with the complex boosted by the ongoing strength in oil prices amid geopolitical uncertainty in the Middle East. Banks sit at the foot of the pile, joined closely by Telecoms and then Media.

Top European News

• ECB President Lagarde, in an FT Opinion piece, said Europe faces structural challenges. Its growth remains persistently low.
• ECB Stournaras says the ECB has reached a "first point of equilibrium" and any further rate cuts depend on data, speaking to Greek media.
• EU has refused to hold a flagship economic meeting with Beijing ahead of a leaders' summit next month, according to FT.
• UK Chancellor Reeves is exploring reversing a decision to charge UK inheritance tax on the global assets of non-doms, according to FT.

FX

• DXY is flat and trading in a tight 98.06-98.21 range. The news cycle remains fixated on the ongoing conflict between Iran-Israel. However, the latest reporting suggests that the US is looking to make a deal with Iran and will not be joining the Israeli offensive. Those hoping for a breakthrough on trade at the G7 summit have been left disappointed after Trump cut his visit short to head back to Washington. Albeit, Treasury Secretary Bessent is staying behind at the summit. Now focus turns to US Retail Sales later.
• EUR is flat vs. the USD as the pair struggles to hold above the 1.16 mark. In terms of recent newsflow, traders await any progress on the trade front between the EU and US after reports that leaders instructed teams to accelerate work on trade. However, in recent trade, US President Trump has stated that the EU is not yet offering a fair deal.
• USD/JPY was initially lifted during APAC trade with haven flows from geopolitics short-lived as Japanese PM Ishiba and US President Trump failed to reach a tariff agreement. Additionally, Japanese Finance Minister Kato added that there is no fixed plan right now to hold further talks with US Treasury Secretary Bessent. Thereafter, the pair saw downticks on the BoJ decision which saw the Bank stand pat on policy (as expected) and announce a reduction in the amount of monthly JGB purchases by about JPY 200bln each quarter from April 2026 onward. Some drew attention to the hawkish dissent from Tamura as well as a near-term increase in the taper of short-term JGBs. During Ueda's press conference, JPY strength faded with the CB head stating that the Bank judged that downside risks are bigger for the economy and prices. USD/JPY currently sits towards the middle of its 144.41-145.11 range.
• GBP is fractionally softer vs. the USD and EUR after seeing some choppy price action following the US and the UK formally signing their trade agreement. The details of which mean that the US tariff on UK steel is to remain at 25%, for now. Inflation data for May hits on Wednesday and is expected to show headline Y/Y CPI hold steady at 3.5%, with the services component set to decline to 5.0% from 5.4%. GBP/USD is currently contained within Monday's 1.3535-1.3622 range.
• Fell overnight on the BoJ which was largely as expected, with rates left unchanged and the taper pace trimmed to JPY 200bln a quarter (currently JPY 400bln) from April 2026 onwards. and at the top of the G10 leaderboard in an extension of the price action with both risk-sensitive currencies overlooking the downside in stocks.
• PBoC set USD/CNY mid-point at 7.1746 vs exp. 7.1820 (prev. 7.1789); strongest CNY fix since March 19.

Fixed Income

• JGBs fell overnight on the BoJ which was largely as expected, with rates left unchanged and the taper pace trimmed to JPY 200bln a quarter (currently JPY 400bln) from April 2026 onwards. The hawkish impulse came from Tamura’s dissent, who favoured maintaining the old pace of tapering until end-Q1 2027.
• USTs are firmer, but only modestly so. In a relatively thin 110-15+ to 110-23 band. Overnight, the 20yr auction was better than the prior, but roughly in-line with the six auction average. More recently, USTs saw some modest movements alongside JGBs. Overall, the benchmark is awaiting US data and clarity on a number of moving parts.
• Bunds are also contained, but with a modest bearish bias in play. A bias which potentially comes ahead of supply, though the German outing today is small and size and thus shouldn’t be exerting too much influence. Initially saw some pressure on the lack of EU-US progress at the G7. However, the subsequent meeting between Trump and Commission President von der Leyen, and then von der Leyen posting that on trade they “instructed the teams to accelerate their work to strike a good and fair deal.”, offset some pressure.
• Gilts are trading in tandem with Bunds, but with the benchmark under slightly more pressure. But, as above, today’s range is limited and Gilts have been a little choppy within it, though the bias is more bearish than peers. A direction potentially exacerbated by the morning’s supply as the DMO is set to sell GBP 4.5bln 4.375% 2030 Gilt. The auction was well received, featuring a better b/c and smaller tails than the prior, but failed to spur any upside.
• Saudi National Bank is "teeing" up a USD-denominated debt sale, according to Bloomberg; said to be a 10yr with IPTs circa 235bps over USTs.
• UK sells GBP 4.5bln 4.375% 2030 Gilt: b/c 3.26x (prev. 3.23x), average yield 4.06% (prev. 3.977%) & tail 0.2bps (prev. 0.4bps).
• Germany sells EUR 0.988bln vs exp. EUR 1.0bln 2.10% 2029 and EUR 0.497bln vs exp. EUR 0.5bln 2.30% 2033 Green Bund.

Commodities

• Crude is higher by around USD 1.10/bbl with the complex continuing to remain bid given the continued Iran-Israel strikes and hawkish comments via US President Trump. Most pertinently, he posted that "Everyone should immediately evacuate Tehran!" - later he posted that he has "not reached out to Iran for 'Peace Talks' in any way, shape, or form". Brent Sep'25 currently trades around USD 74.50/bbl.
• Spot gold is flat on the day, with Trump’s Tehran warning and the CBS interview failing to boost haven demand, and amid a flat Dollar.
• Copper trades indecisively amid the broader cautious risk tone following Israel-Iran updates.
• Russia's Novak, on the need to change OPEC+ decision on oil production increase, says the world needs new volumes, but OPEC+ is ready to be flexible, via RIA. Global oil prices are not appropriate for most of the key oil producers.
• IEA OMR: World Oil Supply to rise by 1.8mln bpd in 2025 (prev. forecast rise of 1.6mln bpd); 2025 oil demand growth forecast to 720k bpd (prev. forecast 740k)

Geopolitics: Latest

• CBS's Jacobs writes US President Trump said "I didn't say I was looking for a ceasefire," he said on AF1. He said he wants "a real end," with Iran "giving up entirely" on nukes." On any threat to US interests, he said Iran knows not to touch our troops. US would "come down so hard if they do anything to our people," he said. Asked his thinking on calling for Tehran to evacuate, he told me he wants "people to be safe." Asked if US involvement would destroy Iran nuclear program, hope their program "is wiped out long before that." Trump sounded undecided about sending Witkoff and/or VP Vance to meet with Iran. "I may," he said. But "it depends what happens when I get back," he said. Trump declined to say if the chairman of joint chiefs and SecDef have provided him with planning options should Iran attack U.S. bases in Middle East. "I can't tell you that," he told me. The Israelis aren't slowing up their barrage on Iran, he predicted. "You're going to find out over the next two days. You're going to find out. Nobody's slowed up so far."
• Israeli officials tell Axios that regime change isn't an official war aim, discussions about it are getting louder and more overt, via Axios.
• Politico Reports: US President Trump will convene his closest military advisers in the Situation Room this morning, where he weighs "whether to join Israel’s bombardment of Iran".
• US President Trump says he is "looking for better than a ceasefire in Iran", "not too much in the mood to negotiate with Iran".
• US President Trump says he has "not reached out to Iran for 'Peace Talks' in any way, shape, or form".
• Senior Iranian Army Commander says attacks against Israel will intensify in the next hours, new wave of drones will hit Israel, via IRNA.
• CNN, citing sources, reports that Iran was up to three years away from being able to produce a nuclear bomb, via Sky News Arabia; US official cited adds that they believe recent Israeli strikes have pushed this back by only a few months.

Geopolitics: Strikes

• Iranian ballistic missiles reported over Tel Aviv, via Fox correspondent.
• Iranian media reported several explosions and heavy air defence fire in the capital Tehran; Several explosions east of Tehran amid air defence fire, according to Fars.
• Reports of multiple explosions in Ahvaz - in the oil-rich province of Khuzestan in southwest Iran, according to Iran International.
• Unconfirmed reports noted that three ships are on fire in the Gulf of Oman near the Strait of Hormuz, according to several social media accounts. Ambrey later said it is aware of an incident 22 nautical miles east of Khor Fakkan in UAE (close to the Strait of Hormuz). Incident in Khor Fakkan near the Strait of Hormuz seemingly was caused by two vessels colliding, according to Kpler's Bakr citing their terminal
• IAEA Director Grossi said the damage recorded at Fordow was very limited, underground spaces at the Isfahan facility do not appear to have been affected.

Geopolitics: Diplomacy

• US President Trump directed members of his team to attempt a meeting with Iranian officials as quickly as possible, according to CNN sources.
• Trump team proposes Iran talks this week on nuclear deal and ceasefire, according to Axios. The White House is discussing with Iran the possibility of a meeting this week between U.S. envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi, according to four sources briefed on the issue.
• Israeli media reports that Trump is preparing to make a 'final offer' to Iran in the coming days, according to Spectator Index.
• US President Trump said Iran should have signed the deal, Iran wants to make a deal, according to Reuters.
• French President Macron said Americans have made an offer to meet with Iranians, now will see what happens. Macron said European partners are ready to take part in serious Iran nuclear negotiations if a ceasefire is reached. Macron said Trump told G7 leaders there were discussions to obtain a ceasefire between Israel and Iran.

Geopolitics: Trump

• US President Trump posted "Iran should have signed the “deal,” I told them to sign...IRAN CAN NOT HAVE A NUCLEAR WEAPON... Everyone should immediately evacuate Tehran!"
• US President Trump posted "AMERICA FIRST means many GREAT things, including the fact that IRAN CAN NOT HAVE A NUCLEAR WEAPON. MAKE AMERICA GREAT AGAIN!!!"
• "President Trump is leaving the G7 summit EARLY and will return to DC tonight.", according to CNN reporter; Bloomberg suggests due to the Middle East crisis.
• US President Trump requested the National Security Council be prepared in the Situation Room, according to reports citing Fox.
• "US is NOT joining Israel offensively in its military operation, per US officials. Despite reports that President Trump asked the NSC and Situation Room to be readied," according to CBS' Jacobs.
• CBS' Jacobs posted "Trump isn't leaving [right now] because of discussions for a ceasefire between Israel and Iran, I'm told...He is leaving G7 halfway through. Not entirely clear why".
• US President Trump posts that his return to Washington had nothing to do with a ceasefire.

Geopolitics: Allies

• Trump admin reportedly told several Middle Eastern allies on Sunday that it doesn't plan to get actively involved in the war between Israel and Iran unless Iran targets Americans, according to Axios sources
• US is sending another aircraft carrier, and more warships to the Middle East, according to NBC.
• US Defense Secretary Hegseth said over the weekend he directed the deployment of additional capabilities to the US CENTCOM; additional deployments are intended to enhance the defensive posture in the region, according to Reuters.
• US Defense Secretary Hegseth said US President Trump still aims for a nuclear deal with Iran, via Fox News; assets in the region will be defended.
• White House aide said it is not true that the US is attacking Iran; says American forces are maintaining their defensive posture.
• "This may really be the last chance for the Iranians before the US actively joins", according to journalist Stein citing a US source.

US Event Calendar

• 8:30 am: May Retail Sales Advance MoM, est. -0.6%, prior 0.1%
• 8:30 am: May Retail Sales Ex Auto and Gas, est. 0.3%, prior 0.2%
• 8:30 am: May Retail Sales Ex Auto MoM, est. 0.2%, prior 0.1%
• 8:30 am: May Import Price Index MoM, est. -0.2%, prior 0.1%
• 8:30 am: May Import Price Index YoY, est. 0.04%, prior 0.1%
• 9:15 am: May Industrial Production MoM, est. 0%, prior 0%
• 9:15 am: May Capacity Utilization, est. 77.7%, prior 77.7%
• 10:00 am: Apr Business Inventories, est. 0%, prior 0.1%
• 10:00 am: Jun NAHB Housing Market Index, est. 36, prior 34

DB's Jim Reid concldues the overnight wrap

After a weekend during which Israel and Iran continued to trade strikes, it was noticeable that Israel hadn't directly targeted oil production and transportation facilities, and Iran showed little sign that it was considering closing the Strait of Hormuz or targeting US interests in the region. So it felt yesterday that to get an additional and notable risk-off we needed further escalations.

As such, yesterday became steadily more risk-on with extra momentum from a WSJ report, just under 90 minutes after the US open, which said that Iran was signalling it wanted to end hostilities and restart nuclear talks. So that led to a significant easing of the broad market stress, with the S&P 500 (+0.94%) recovering the vast majority of Friday’s -1.13% decline. Similarly, gold fell -1.37%, reversing the spike that saw it post a new record high on Friday. And in line with that theme, some of the assets most affected by the conflict did very well, with the Israeli shekel seeing its biggest daily gain against the US Dollar (+3.49%) since 1998, with Israel’s TA-35 index (+1.82%) closing at an all-time high.

However, just as markets were getting more comfortable, we've seen a bit of a reversal overnight after Trump left the G7 meeting a day early with reports that he has requested the National Security Council to convene on his return to Washington. He posted that “Everyone should immediately evacuate Tehran!” There was no extra context. In fact, as DB‘s Michael Hsueh has pointed out, the G7 leaders' statement was only 121 words, compared with June 2024's statement of 19,834 words, and Dec 2023's statement of 5,108 words. It also only discussed the Israel/Iran conflict whereas normally a whole host of topics are covered.

So we're all in a bit of a limbo in terms of whether anything substantive came out of the summit and whether Trump was alluding to new information with his post and his early G7 meeting departure.  Before his post, that WSJ headline was backed up elsewhere. For instance, Reuters reported shortly afterwards that Iran had asked Qatar, Saudi Arabia and Oman to ask President Trump to get Israel to agree to a ceasefire, in return for more flexibility from Iran in the nuclear talks. And Trump himself later said at the G7 summit that Iran would “like to talk, but they should have done that before”.

There are still big questions as to whether Israel would be receptive to a ceasefire, given that it is seeking to destroy Iran’s nuclear program. Moreover, the public rhetoric hasn’t leant that way either, and Iran’s Mehr News Agency cited a senior security official saying that it is prepared to deliver a “major blow” to Israel after its strikes. So there is maybe diplomatic movement behind the scenes but not yet in the open.

Indeed, there have been no signs of de-escalation in the aerial war, with reports of explosions against in Tehran overnight, while Iran launched more missiles into Israel. Oil is back up around half a percent this morning after closing at $73.23/bbl, down -1.35% on the day and nearly -7% from the intraday peak of $78.50/bbl on Friday after the initial attacks. It is still around +7.7% higher since renewed fears of escalation emerged last Wednesday.

Amidst all the news, global equities put in a solid session yesterday, with the S&P 500 (+0.94%) advancing, whilst the STOXX 600 (+0.36%) finally ended a run of 5 consecutive declines. In both cases, it was the more cyclical sectors that led the advance, and every one of the Magnificent 7 (+1.57%) advanced on the day as well. Other signs of market stress eased too, with the VIX index down -1.71pts to 19.11pts, whilst US HY spreads tightened -11bps. S&P (-0.41%) and Nasdaq (-0.47%) futures are lower this morning though.

We have still seen only a minimal reaction in equities so far and perhaps that's because absent a serious escalation, markets are aware of the historical playbook around geopolitical shocks. I looked at this in my chart of the day yesterday (link here), which shows how the usual pattern is for a short, sharp shock that then reverses. Moreover, this time our strategists have argued the bar for a significant sell-off was higher, since equity positioning was already quite light. If you look at the geopolitical shocks that have had a bigger and more sustained market impact, it’s generally the stagflation shocks that cause a simultaneous inflation spike alongside a hit to growth. Henry took a look at those in a piece yesterday (link here), with the biggest impacts coming from the oil shocks of the 1970s, the Gulf War in 1990, and Russia’s invasion of Ukraine in 2022. Those cases all led to a huge oil price spike, whereas today’s move still leaves prices beneath their 2024 average.

In other news, Senate Republicans released their version of the budget bill last night. Compared with the bill passed in the House last month, the Senate version makes permanent three business tax breaks and scales back a proposed tax on university endowments. It also includes a placeholder $10k cap on the state and local tax deduction ($40k in the House version), as Republicans remain divided over the level of this tax break.

Back to markets and the renewed focus on US fiscal coupled with still elevated oil prices but a reduction in flight to quality, put pressure on Treasuries yesterday, with 10yr Treasury yields rising +4.7bps on the day to 4.45%, while 30yr yields (+6.1bps to 4.96%) moved back to within touching distance of 5%. Much of that rise in yields played out in the latter part of the US session, and in Europe yields on 10yr bunds (-0.9bps), OATs (-1.9bps) and BTPs (-3.0bps) had all closed lower.

Overnight the Bank of Japan (BOJ) has left short-term interest rates at 0.5% as widely expected in a unanimous vote after a two-day policy meeting. More importantly, it announced that it intends to slow the rate at which it reduces its bond purchases next year. Beginning in April 2026, it will decrease its bond purchases by approximately 200 billion yen per quarter, down from the current rate of 400 billion yen per quarter. This action is likely aimed at minimizing market disruptions while still providing adequate support for the Japanese economy amidst economic uncertainty arising from US trade policies. Furthermore, the BOJ indicated that it will perform an interim assessment of the plan to reduce bond purchasing in June 2026. Looking ahead, attention is now directed towards BOJ Governor Kazuo Ueda post meeting comments. 5-year and 10-year Japanese Government Bonds (JGB) have increased by +4.3bps and +5.5bps respectively split before and after the meeting.

In Asian equity markets, the Hang Seng (-0.12%), the CSI (-0.15%), the Shanghai Composite (-0.18%), and the S&P/ASX 200 (-0.15%) are all experiencing slight declines. Conversely, the Nikkei (+0.55%) and the KOSPI (+0.30%) are stronger.

Elsewhere, there was very little data of note yesterday. One release was the Empire State manufacturing survey for June, which unexpectedly fell to -16.0 (vs. -6.0 expected), beneath every economist’s expectation on Bloomberg. However, there was a bit more optimism on the forward-looking indicators, and the expectations component for general business conditions moved up to a 4-month high of 21.2.

To the day ahead now, and data releases include US retail sales, industrial production and capacity utilisation for May, the NAHB’s housing market index for June, as well as Germany’s ZEW survey for June. Otherwise, central bank speakers include the ECB’s Villeroy and Centeno.

Tyler Durden Tue, 06/17/2025 - 08:29

Green Energy Stocks Puke As Senate Bill Targets Early End To Tax Credits

Solar and renewable energy stocks crashed in premarket trading after Senate Republicans unveiled a draft of a bill that would end wind and solar tax credits by 2028, while providing incentives for other energy sources like nuclear, hydropower, and geothermal (which would extend to 2036).

According to Reuters, the draft tax bill released by Senate Finance Committee Chair Mike Crapo (R-Idaho) proposes an accelerated phaseout of clean energy subsidies established under the Biden-Harris regime's 2022 Inflation Reduction Act. Specifically, the legislation would significantly dial back solar and wind tax credits to 60% of their original value starting in 2026, with complete elimination by 2028. Under current law, these credits are scheduled to begin phasing out in 2032, meaning the proposal would effectively shorten the incentive window. 

Crapo stated in a press release that this draft bill "achieves significant savings by slashing Green New Deal spending and targeting waste, fraud and abuse in spending programs while preserving and protecting them for the most vulnerable."

Nuclear Support...

The summary of the legislation stated that tax breaks for other sources of power, such as nuclear, hydropower, and geothermal, would remain in place until 2036. How to play the nuclear trade.

Major provisions in the Senate bill:

• Ends $7,500 EV tax credit 180 days after passage (faster than House version)

• Eliminates $3/kg hydrogen production credit, despite industry lobbying

• Removes solar tax credits for both leased and purchased rooftop systems

• Retains nuclear credit without the House's 2028 construction deadline

• Does not include House's 60-day construction rule or credit resale restrictions, slightly easing compliance

The shortened window significantly alters the financial outlook for renewable energy developers, which only sent solar stocks crashing in premarket trading in New York: Sunrun -29%, SolarEdge -24%, and Enphase -18%. 

There will be many failures. Remember the Solyndra failure? Multiply that by many...

Green Energy Bubble: Hype to Bust via Shares Global Clean Energy ETF | ICLN 

Just remember it was all one big climate MSM propaganda scam to swindle taxpayers.  

Goldman Sachs analysts, led by Brian Lee, provided clients with a framework outlining the potential stock implications of the newly proposed Senate tax bill. The analysis provides a structured view of how accelerated clean energy credit phaseouts and other provisions could impact green stocks in their coverage: 

While we take no view on the final outcome of the bill, we view the Senate proposal as relatively positive for FSLR, NXT, and ARRY as these companies have exposure primarily to 45X manufacturing tax credits, which are relatively unchanged and thus more intact through the end of 2031.

We view RUN, ENPH, and SEDG are the most negatively impacted by the proposed bill as the revision specifically calls out leasing and rental models which will not be eligible for tax credits starting in 2026.

We view CCJ and SMR as a potential beneficiary given positive commentary around nuclear PTC and ITCs and relatively longer runway availability for these credits for nuclear.

The bill is part of President Trump's broader economic package and may still see revisions before a targeted July 4 vote in the House.

Tyler Durden Tue, 06/17/2025 - 08:05

Only Bitcoin & Gold Can Stop Governments From Destroying The Currency

Authored by Daniel Lacalle,

Allow me to remind you of a few uncomfortable truths.

Government spending is out of control in developed nations. Furthermore, no interventionist government wants to cut spending or balance the budget. Government spending empowers politicians, and reducing it means losing the grip on the economy.

Interventionist governments aren’t concerned about debts, deficits, or inflation. Inflation is a deliberate policy, and interventionist governments seek to nationalize the economy while imposing total control over productive sectors by issuing continuously devalued currencies.

Government spending is printing money. Politicians are happy to promise more free stuff by endlessly spending because they know they won’t pay for it and that it will make citizens and businesses more dependent and submissive to political power. No government can truly reduce debt without cutting spending.

Inflation is evidence of the loss of solvency for the issuer of money. It is a de facto slow default. Inflation serves as a policy that justifies and perpetuates significant government imbalances, shifting the financial burden onto real wages and deposit savings.

The fallacy of balancing the budget through higher taxes leads to economic stagnation and more debt. High taxes are not a tool to reduce debt but to justify high indebtedness. Tax receipts are cyclical whereas government expenditures are consolidated and annualised.

No interventionist government is going to willingly act to reduce debt and spending because they can always tax more and blame others for their problems. Furthermore, central banks have stopped playing the essential role of curbing fiscal excess to become enablers of rising fiscal imbalances.

Central banks play a crucial role in the fiat world due to the intertwining of monetary and fiscal policy. The system will gradually collapse if central banks do not stop the growth of government fiscal imbalances.

However, the independence of central banks is diminishing daily, and their policies tend to conceal excessive government spending and debt. Meanwhile, governments ignore the fact that they have surpassed the three limits of government debt: economic, fiscal, and inflationary. More government debt means lower growth, more taxes generate weaker receipts, and more government spending perpetuates inflation.

Now that central banks have stopped being the essential limit to government excess, there are only two alternatives: gold and Bitcoin.

Gold has already overtaken the euro as the second largest asset after the US dollar in global central banks. In a few months, it will be the largest asset. Global central banks have lost confidence in sovereign debt from developed countries as a reserve asset. Thus, developed nations’ long-term bond yields rise above inflation rate expectations.

Bitcoin, on the other hand, has shown investors and citizens that a decentralised currency can gradually become a low-volatility reserve asset, a generalised means of payment, and a unit of measurement. As global citizens see Bitcoin as an increasingly viable alternative to fiat money, more are using it to store value and protect themselves against inflation.

Investors do not trust developed economies to maintain their solvency. Gold and Bitcoin are now playing the role that central banks have abandoned: reminding governments that they cannot spend and print currency forever. Bitcoin may be a teenager and more volatile, but the powerful message to the world is clear: the years of uncontrolled government spending and printing are over.

Obviously, governments do not like this. And central banks that have stopped being as independent as they should be, like the ECB, are looking to eliminate the risk of independent currencies taking away the monopoly of money by issuing a legally imposed central bank digital currency (CBDC). Interestingly, the U.S. administration is doing the opposite, banning CBDCs and embracing crypto as the next monetary revolution.

The ECB is admitting the euro’s enormous loss of utilisation in global transactions and panicking by issuing a surveillance tool disguised as money, the CBDC. The US administration wants to cement the dollar’s reserve status by attracting global investment in crypto.

Bitcoin and gold are now playing the essential role that independent central banks should be enforcing. Central banks are unnecessarily dovish and continue to disguise bloated government imbalances. Gold and Bitcoin are essential parts of the answer to the inflationary temptations of governments. The only things that will save us from government excesses are decentralisation and independent money.

Tyler Durden Tue, 06/17/2025 - 07:45

These Are America's Cheapest New Cars

• Finding a new car for under $20,000 is becoming increasingly difficult, with only 3 models below the threshold

• The average price of a new car in the U.S. is around $48,000

Car prices in the U.S. have increased significantly since the COVID-19 pandemic, squeezing budget-conscious buyers. In 2025, things are getting even tougher, with only three models starting below $20,000 when new.

To help you find your next vehicle, Visual Capitalist's Marcus Lu has highlighted America’s cheapest new cars that are available today.

Data & Discussion

The data for this visualization comes from Car and Driver. It highlights the 10 cheapest new sedans or hatchbacks in America by their starting MSRP, all of which come from Asian and European automakers.

Sub-$20K Cars Are Nearly Extinct

Only three vehicles—two versions of the Mitsubishi Mirage and the Nissan Versa—are priced under $20,000.

Buyers looking at a Mirage should be aware that both models are ranked very poorly by Car and Driver (2.5 to 3 out of 10) due to their unrefined powertrains and cheap interiors.

The Mitsubishi Mirage offers an impressive warranty and surprising fuel efficiency, even if it somehow feels even cheaper than its low price suggests.

Note that the Mirage has been discontinued in the U.S., though dealers are expected to have stock until the end of summer 2025.

Asian Brands Dominate the List

Nine of the 10 cheapest models come from Japanese or South Korean brands, reflecting their ability to produce cheaper, value-driven vehicles.

U.S. auto tariffs, however, are going to make it harder for these brands to succeed. Estimates from Goldman Sachs predict that Mazda could see a massive 59% profit reduction due to the tariffs, while Nissan could see a 56% drop.

Toyota and Honda, two of America’s top automakers by market share, will avoid most of the damage due to their well-established U.S. manufacturing bases.

If you enjoyed today’s post, check out The Most Reliable Car Brands of 2025 on Voronoi, the new app from Visual Capitalist.

Tyler Durden Tue, 06/17/2025 - 06:55

BritCard: Inside Labour's "Progressive" Digital ID

Authored by Kit Knightly via Off-Guardian.org,

A new report from a British government think tank offers some clear insights into the Starmer administration’s plan to introduce a universal digital ID.

That digital ID – in one form or another – is a major part of the endgame is not any kind of revelation. We’ve known that was the plan for years, but the report tells us quite a lot about how it’s going to be sold to the public.

I guess we should go ahead and dive in.

The Thinktank

The report was published just this week by Labour Together – formerly “The Common Good” – a thinktank founded in “Labour’s wilderness years” to help “make Labour electable again”, according to their about page.

Translation: They’re centrist globalist Blairite shills who helped undermine and destroy the only vaguely genuine movement in the last 50 years of British “democracy” and now publish reports to push a globalist agenda.

According to the Electoral Commission, they received over £ 9 million in donations last year (from only 234 donors), much of which seems to have been “donated” by Labour Together Limited, a for-profit company. The murky world of Westminster finances is not my focus, however, and I’m sure it’s at least passably legal and no more corrupt than is standard practice in those circles.

Exactly how a think tank with eighteen employees, ten advisors, four policy fellows and five board members manages to spend 9 million pounds writing a newsletter a week, a report every two months and doing some online polls I have no idea.

It’s a good question for another time, perhaps. For now, we know everything we need to know – Labour Together are old-fashioned New Labour types shilling for globalist tyranny.

The Authors

We won’t talk long about the authors, because there’s not much point. They’re names on a title a page, and while I’m sure they believe in the words they write (or at least, asked ChatGPT to write), it’s also true their job requires they believe it.

I just wanted to point out that the three supposed authors of this work on technology have no tech backgrounds at all. The closest any of them comes is Laurel Boxall, the “about the authors” section of the report proudly declares she has a Masters from Cambridge “focusing on AI”, but a bit a of digging reveals it’s a Masters in “Digital Humanities” with a focus on fictional portrayals of AI in media. Apparently, that qualifies you to become a “tech policy advisor”.

Which is interesting, because it demonstrates that they consider fictional portrayals of AI to be as relevant to this work as real AI experience. An apposite commentary on the state of society in general.

The Name

They’re calling it “Britcard”, probably because the massively out-of-touch market relations types who end up naming these things thought it sounded friendly.

The prefix “Brit” makes things sound familiar and non-threatening. “Britcard”. So much better than mandatory government-issued digital identity papers. (“Britcoin”, too, down the line, instead of programmable digital currency…but that’s another article for another time).

You can sort of see what they’re going for, the kind of knowingly cringe, ironically patriotic self self-aware Britishness that was the hallmark of New Labour in the halcyon days of Blair pre-Iraq.

That’s very much the crux of it – Blair.

Digital ID is Blair’s baby. One of the authors works for the Tony Blair Institute. Labour Together was founded by Blairite MPs and is staffed with ex-members of Blair’s cabinet.

The name is old-style Cool Britannia soft authoritarianism. The informal tyrant who isn’t afraid of having a jam sesh and getting down with the kids. The “cool” teacher who let’s you use his first name, undoes his top button and plays the guitar at weekends.

The Report

Published just a few days ago, the report is titled…

BritCard: A progressive digital identity for Britain

…which tells you most of what you need to know, without even bothering to read the body of the text. But, unfortunately, “bothering to read the body of the text” is a pretty accurate summary of my job description, so on we must plough.

I would note that even in using the word “progressive”, the authors demonstrate a remarkable ability to be out of touch. That word’s hay day is long over, and it has been regarded with scepticism if not outright suspicion by most thinking people for a long time. As we mentioned above, it betrays an almost old-fashioned tone more in keeping with the politics of a previous generation.

The report is 28 pages long, but once you remove the double-talk and graphs, it can essentially be summed up in three bullet points:

1. Digital ID will help control illegal immigration.

2. It can then be expanded to other things, too.

3. Polls say everyone is fine with this.

Points 1 & 2 tell us how this rollout is going to go. The “BritCard” will be introduced, primarily, as a part of a “strategy to tackle illegal migration” [page 8]:

Given the very significant political and delivery benefits, moderate costs and the deliverability of this policy, the Government should announce as early as possible in Summer 2025 its intention to explore introducing a digital right-to-work and right-to-rent credential, as part of its plan to tackle illegal migration.

This will include the new legislation required that will make “BritCard” the only way to apply for a job or find a place to live [page 25]. Employers and landlords will be forced to use it.

Then, once that is in place, it will expand to include other services [page 14]:

Over time, the same system used to support the right-to-work and right-to-rent credentials could underpin many other features, allowing users to access and use a wide range of data and attributes generated by interacting with the public sector. For instance, the digital driving license and associated data, a proof of age feature, and healthcare records could be accessed and shared at the user’s discretion via BritCard.

Much like the smoking ban, the plan is to introduce it gradually…

The BritCard would be made available from a given date (say 1 September 2027), and made compulsory for all workers, tenants, employers and landlords to use from a later date (say 1 March 2028). It would have a gradual effect since only a small proportion of the population signs a new employment contract or rental agreement each year. We recommend that the credential is made mandatory for new employment and rental contracts signed following the introduction date. We do not recommend obliging employers and landlords to re-check all existing employees and tenants, to avoid creating unnecessary disruption and costs

What’s interesting is that, while this is supposedly a report written by “tech advisors”, in many ways it’s more like an internal memo from an advertising agency. It’s about selling a system that essentially already exists in piecemeal form under a unifying rebrand to make it seem “eye-catching”.

To support better awareness and uptake of the new credentials, the Gov.UK App and Gov.UK Wallet could be relaunched as the “BritCard App”. This would create an eye-catching, memorable brand

All the while, pump the media space with marketing to sell the concept as normal or even “familiar”:

By introducing a mandatory, universal, national identity credential the Labour Government has the opportunity to build a new piece of civic infrastructure, something that would become a familiar feature of daily life for everyone in the country.

That kind of sentiment – the casual creepiness of the liberal tyrant – is interspersed throughout. Phrases that no doubt seemed benign to the author in the writing, but appear decidedly ominous in the reading.

This, for example:

For a progressive society to work, it needs to be able to collectively agree who is allowed to join it

Disregarding the very poor English, the sentiment is…off-putting.

Very poor English is another recurring theme. It is, honestly, barely literate in places, to the point it is entirely believable it was AI-generated using prompts.

As for the polls showing “widespread public support” for the plan, well, we can disregard them.

Polls are malleable. They are a tool to market pre-existing policy rather than steer undecided policy. Labour Together apparently did their own polling and – shockingly – found that most people agree with them.

Those are the general points; in terms of specifics, the report is fairly threadbare. There is very little in the way of technical analysis; indeed, there’s very little in the way of understanding of reality.

For example, the report stresses – multiple times – that the proposed digital identity would be “mandatory, universal and free of charge”, without ever processing that you can’t make a smartphone app mandatory without making smartphones themselves mandatory. And while they may be ubiquitous, they are currently far from universal.

The report pays lip service to “in person support channels” for “non-smartphone owners and those with low digital-skills”, but doesn’t ever actually try to explain how that could practically work.

But of course none of that really matters to the intended audience.

Reports like this don’t exist to inform or convince, they’re only meant to echo the opinions of people who already agree with their conclusions. They don’t really exist to be read at all, they exist to be referenced.

A jumping off point for articles like Polly Toynbee’s in yesterday’s Guardian.

It is not an argument, it is an excuse to turn a made-up poll into a hyperlink. A source for source’s sake. A Wikipedia footnote they know most people will never click.

Further, it is a part of a process that must be seen to take place to maintain the illusion of political cause and effect. If it appears slapdash and lazy, that’s largely because it is. A token effort required to tick a box.

This is our desired outcome, we need some research to recommend that we do it.

And, hey presto, here it is.

Summary

In closing, we should ask “what does this report tell us about digital ID we didn’t already know?”

And the answer is a little, not a lot. We already new digital ID schemes were inevitable, and would likely be pushed through (in the UK anyway) as an answer to illegal immigration.

What this report shows us is the marketing strategy for the coming year, and it’s fairly simple:

• Rebrand digital ID to a friendly-sounding name.

• Introduce it for a specific purpose on a hot-button issue.

• Make it mandatory for that purpose.

• Slowly add more optional services.

• Gradually make them mandatory too.

Which we could probably have figured out, but it’s always nice to get things in writing.

One more thing…

I want to leave you with a simple question. The final sentence of the report is a recommendation that the government should…

Hire a very senior, high-profile and experienced political figure head or tech sector professional to be the cross-government champion and external face of its digital identity programme

I know enough about the workings of these things to know that this sentence would not be there if the author(s) didn’t have a shortlist of names in mind, if not one specific person.

Who do you think the high-profile political “figure head”(sic) could be?

Tyler Durden Tue, 06/17/2025 - 05:00

Visualizing The Economic Value Of The Arctic

The Arctic is gaining global attention as melting ice unlocks access to vast natural resources. From “ecosystem services” like climate regulation to lucrative mineral and oil reserves, this chilly region’s economic value is surprisingly large.

In this graphic, Visual Capitalist's Marcus Lu breaks down the Arctic’s annual economic value based on the results of a 2017 study from Tanya O’Garra titled Economic Value of Ecosystem Services, Minerals, and Oil in a Melting Arctic.

Data and Methodology

The economic values of various Arctic resources were estimated using a combination of biophysical data and economic valuation techniques.

For climate regulation, the study assessed the Arctic’s role in carbon sequestration and its impact on global climate systems, assigning value based on the cost of carbon emissions and the benefits of climate stabilization.

Cultural values were evaluated through contingent valuation methods, which estimate individuals’ willingness to pay for the preservation of cultural and spiritual benefits associated with the Arctic environment.

The valuation of oil and minerals involved analyzing market prices, extraction costs, and the quantity of known reserves. Given the large variation in production costs for mining, it was assumed that 50% of mining revenue comprises costs.

Climate Change’s Impact on Economic Value

Global warming is expected to have varied effects on the Arctic’s economic value.

For example, retreating sea-ice could open up new shipping routes, fishing grounds, and areas for mineral exploration. On the flipside, increased resource extraction from the Arctic could also lead to more environmental disasters (e.g. pipeline leaks) and pollution.

Geopolitical competition is also ramping up in the region, as major economic powers like China, Russia, and the U.S. seek to secure shipping routes and resource access.

If you enjoyed this post, check out Countries With the Most Freshwater Resources on Voronoi, the new app from Visual Capitalist.

Tyler Durden Tue, 06/17/2025 - 04:15

UK Gold Mining Company Bluebird To Convert Revenues Into Bitcoin

Authored by Oscar Zarraga Perez via BitcoinMagazione.com,

Bluebird Mining Ventures Ltd., a pan Asian gold project development company, recently announced a major strategic shift.

It plans to convert future revenues from its gold mining projects into bitcoin and adopt bitcoin as a treasury reserve asset. 

Strategy shift to covert gold into digital gold - #bitcoin #goldmining #goldequities #investinbitcoin #investingold
"Combining income streams from gold mining projects and recycling these revenues into a proactive "Bitcoin in Treasury" management approach, whilst maintaining a… pic.twitter.com/BpJA6hFU9Y

— Bluebird Mining Ventures Ltd (LSE:BMV.L) (@bluebirdIR) June 5, 2025

“By adopting a ‘gold plus a digital gold’ strategy, it offers the Company an opportunity to turn the page and look to the future and seek to attract a new type of shareholder,” said the Executive Director and CEO of Bluebird Aidan Bishop.

“Under the leadership of a new CEO, once identified, it is my sincere hope that Bluebird will finally realise its ambitions for which it was initially established for.”

The announcement comes as Bluebird progresses towards a key agreement on its flagship Philippine project. The company expects to finalize a deal in the coming weeks that will grant it a net profit interest throughout the life of the mine, with no ongoing capital costs. The company said it believes bitcoin offers a modern alternative to traditional store of value assets like gold.

“I am very pleased with the progress of discussions in the Philippines which are looking very positive and will enable, if successfully completed, Bluebird to maintain an ongoing exposure with zero future cash commitments,” stated Bishop.

Bluebird plans to recycle revenues from its mining operations directly into bitcoin, aligning with what they describe as an innovative treasury approach. The company cited bitcoin’s fixed supply of 21 million, increasing global adoption, and role as a hedge against inflation and monetary instability as key reasons for its decision.

“Combining income streams from gold mining projects and recycling these revenues into a proactive ‘Bitcoin in Treasury’ management approach…” the company said. “Companies that have adopted bitcoin into their treasury strategy globally across public markets have been enjoying significant investor interest as well as substantial premiums to Net Asset Value (NAV) that have challenged traditional financial metrics as a basis of valuation.”

To lead this new phase, Bluebird is actively searching for a new CEO with experience in digital assets.

“On a personal level, I embarked some time ago on a journey to understand and learn about bitcoin,” added Bishop. “I am convinced that we are witnessing a tectonic shift in global markets and that bitcoin will reshape the landscape of financial markets on every level.”

Tyler Durden Tue, 06/17/2025 - 03:30

How Can Europe Replace US Support For Ukraine?

The Kiel Institute for the World Economy has released a new report outlining how Europe could replace U.S. support for Ukraine both financially and militarily.

The organization has calculated that European governments as a whole will need to nearly double their aid flow from the current €44 billion per year to €82 billion per year, which equates to an increase from roughly 0.1 percent of their combined GDP to 0.21 percent of GDP.

Statista's Anna Fleck reports that analysts say this is within Europe’s capacity, highlighting how a handful of countries, including Denmark, the Baltics, Sweden and Norway are all already contributing more than 0.3 percent of their GDP each year to Ukraine’s defense.

According to the IfW Kiel’s proposed scenario, the biggest economies and institutions will need to play the biggest role in upping their financial aid to Ukraine, led by the EU (Commission and EIB), with an increase from the current €16 billion to €36 billion per year.

You will find more infographics at Statista

It would be followed by Germany with an increase in support from €6 billion to €9 billion per year, the United Kingdom (up from €5 billion to €6.5 billion per year) and France (up from €1.5 billion to €6 billion per year).

Tyler Durden Tue, 06/17/2025 - 02:45

UK Turning Into 'National Health State', Says Think Tank

Authored by Victoria Friedman via The Epoch Times,

The UK is turning into a “National Health State,” the Resolution Foundation has said, after Chancellor Rachel Reeves announced a £29 billion annual increase in NHS funding.

The think tank’s analysis of Reeves’s Spending Review estimates that by the end of financial year 2028–29, the health service will account for half (49 percent) of all day-to-day public services spending, up from 34 percent in 2009–10.

On Wednesday, the chancellor announced a record £29 billion funding injection, which the Treasury said will deliver on the government’s promise to cut waiting lists, improve patient care, and modernise services.

Resolution Foundation Chief Executive Ruth Curtice said in a statement, “Health accounted for 90 per cent of the extra public service spending, continuing a trend that is seeing the British state morph into a National Health State, with half of public service spending set to be on health by the end of the decade.”

The Institute for Fiscal Studies (IFS) noted in its initial response to the Spending Review that the funding increase for the NHS was substantial, but questioned whether it will be enough to get the health service back to meeting its 18-week target for hospital waiting times within this Parliament, something which the think tank said was “enormously ambitious.”

£6 Billion to Speed up Tests and Treatments

After the Spending Review, Reeves announced that £6 billion of the allocated funds will be used to deliver up to four million additional NHS tests, scans, and procedures over the next five years.

This will be spent on ambulances, new scanners, increasing diagnostic centre capacity, and more Urgent Treatment Centres.

The government will also invest £30 billion in day-to-day maintenance and repair of the NHS estate, with over £5 billion allocated for critical repairs over the next five years.

Health Secretary Wes Streeting and Chancellor of the Exchequer Rachel Reeves meet staff in the outpatients department during a visit to St. Thomas's Hospital in London, on June 11, 2025. Carl Court/PA Wire

Under the Plan for Change, the government has promised that 92 percent of treatments will be carried out within 18 weeks.

However, industry professionals have expressed scepticism that this target can be met.

Matthew Taylor, chief executive of the NHS Confederation, said that while the funding boost is welcomed, “difficult decisions will still need to be made as this additional £29 billion won’t be enough to cover the increasing cost of new treatments, with staff pay likely to account for a large proportion of it.”

“So on its own, this won’t guarantee that waiting time targets are met,” he added.

Taylor said that NHS leaders will need continued backing from the government to balance budgets and redesign services, including moving more services into the community.

‘Confident’ Target Can Be Met

Sarah Woolnough, chief executive of the health care think tank The King’s Fund, said, “It is hard to see how all the things [Reeves] mentions—faster ambulance times, more GP appointments, adequate mental health services, and more—can be met by this settlement alone, particularly when large parts of this additional funding will be absorbed by rising costs, such as the higher cost of medicines which are currently being negotiated, and staff pay deals.”

After she announced the details of the review in the House of Commons, Reeves told Sky News she was confident the government could deliver on the 18-week pledge by the end of this Parliament.

She said: “We’ve already delivered around three-and-a-half million additional appointments since we came to office last July.

“Waiting lists are already down by 200,000, so we are confident that we can meet our Plan for Change commitments because of the 3 percent annual increase in funding for the National Health Service.”

NHS Waiting List Falls

The latest NHS data published on Thursday revealed that the waiting list for treatment has fallen to its lowest level in two years.

The number waiting has fallen to 7.39 million treatments at the end of April, down from 7.42 million at the end of March.

The health service said that patients are being seen faster owing to the NHS’s productivity drive, which has seen hospitals working differently, more evening and weekend appointments, and GPs and community services delivering more appointments.

The average patient waiting time for planned treatment has also fallen to the lowest level since July 2022 (13.3 weeks). This was despite services facing higher demand, with 2.3 percent more patients being added to the waiting list per working day on last year.

Health and Social Care Secretary Wes Streeting said, “This is just the start.”

He said, “We are putting the NHS on the road to recovery after years of soaring waiting times, by providing record investment and fundamental NHS reform.”

“We’ve delivered millions of extra appointments since July, we are pushing on with our mission to get the NHS working for patients once again as we deliver our Plan for Change,” Streeting added.

Tyler Durden Tue, 06/17/2025 - 02:00