The Great Sorting-Out Begins

Authored by James Howard Kunstler,

“The purpose of a pardon is to correct a miscarriage of justice, not to prevent future judicial action.”

- Dr. Joseph Sansone

This, as they say, is one of those weeks when decades happen.

You realize that under the fiends fronted by “Joe Biden,” the US government became a demon-driven machine for wrecking lives, perverting the law, and demolishing all scaffolds of decent behavior. And now, it all has to be fixed, cleaned up, fumigated, rectified, rehabilitated.

Scores of executive orders flew out of the Oval Office, rescinding four years of “Biden” regime lunacy in every direction: Censorship, dead. . . Gain of function research, killed. . . CBDCs banned. . . CBP-app for aiding illegal migrants, discontinued. . . border fortified. . . homicidal alien mutts deported. . . World Health Organization, no thanks. . . Paris Climate Accords, fuggeddabowdit. . . DEI, vacated through all of government. . . Green New Deal, scrapped. . . “pride” in mental illness, cancelled. . . Ukraine War, headed for the negotiating table. . . all in four days and so much more coming.

The DEI flimflam is particularly illustrative of the hazards still lurking. The DC blob is desperate to hide its chaos agents by switching their job titles and shuffling them around to hidey-holes in obscure precincts of this-or-that bureaucracy. Being federal employees, of course, they all have searchable names and payroll accounts, so you may be sure they’ll be discovered wherever they’re hiding-out and placed, as ordered, on “administrative leave.”

Since DEI was essentially a program to promote incompetence, these employees represent a monumental cargo of dead-weight.

So, the next task will be finding a way under the civil service codes to cashier them for good. For instance, reclassifying their job status to render them fire-able.

This is sure to be a major friction-point for the so-called “resistance,” the huge cadre of “activist” Wokesters embedded in the agencies.

Cue the army of Democratic Party lawyers who will be filing suits to prevent the chief executive from coherently managing the departments of the executive branch. But there’s a catch: this time, the White House will not be funneling scads of money directly to the NGOs that pay for these blob-adjacent lawyers, nor will they be able to redirect money out of the DOJ, FBI, and CIA for that purpose. The president may also find a way to interrupt the flow of money from foundations financed by malign freelancers such as George Soros and Linked-in founder and billionaire Reid Hoffman (who financed the E. Jean Carroll “rape” trial hoax and many more Democratic Party pranks ).

Another friction point: release of the pardoned J-6 prisoners is being loudly opposed by DC District federal judges such as Tanya Chutkan and Amy Berman Jackson.

They don’t enjoy any privilege or prerogative for voicing prejudicial opinions about vacated cases, nor for failing to comply with paperwork needed to discharge them. They can be impeached for that in the House of Representatives. Or, if they actively obstruct releases, the new-and-improved Department of Justice might consider 18 U.S.C. § 242 - Deprivation of rights under color of law.

Meanwhile, goons at the DC jail detained pardoned prisoners unlawfully this week after years of the grossest mistreatment, including solitary confinement in basement “holes” without beds, blankets, or water, and direct physical assault that could be described as “torture.”

All of this was countenanced by DC Mayor Muriel Bowser, despite plentiful public reports of abuse over the past four years. That is, she knew all about it.

This is an argument for finally rescinding Washington DC’s “home rule” status and placing the city and all its departments back under federal management.

Last night, Mr. Trump signed an order to declassify government files relating to the murders of the Kennedys and Martin Luther King. Of course, the intel agencies holding these files have had a half-century to expunge anything in the files that might reflect poorly on the intel agencies — such as, the long-trafficked rumor that the CIA was behind the killing of all three. Why would you expect to get anything like that? How could the remaining material be anything but a cover-your-ass file? Well, now we shall see. At some point in his first term, Mr. Trump allegedly saw what was in the files and demurred from his promise then to release them. Was it too shocking? Or was it the well-groomed nothingburger described above.

That’s not to say that there’s any shortage of weird, tantalizing documentation around all those cases, inexplicable doings. . . sketchy characters like Oswald, Jack Ruby, Howard Hunt, Clay Shaw, Sirhan Sirhan, Thane Eugene Cesar, James Earl Ray, “Raul” (Ray’s alleged “handler”), Frank Liberto, Loyd Jowers. . . . and curious circumstances like the so-called “magic bullet” that supposedly exited JFK and wounded Texas Governor Connolly, and was later found oddly intact on a stretcher in Parkland Hospital. I guess we’ll found out shortly.

Now, we await the confirmation of Mr. Trump’s cabinet. Pam Bondi’s USAG nomination was held up for a week by peevish freshman Senator Adam Schiff, after she called him out for being censured last year in the House for “reckless” statements — that is, she reminded the committee and the public that Mr. Schiff is a chronic liar.

There are rumblings that he will be kicked off the Senate Judiciary Committee (maybe not such a good fit for someone incapable of telling the truth).

The preemptive pardon he received last week from “Joe B” might be tested through the courts in the years just ahead. The Judiciary Committee announced that it will convene an inquiry into the whole J-6 fiasco. Do you sense that there is much to discover in that hairball of enigmatic events, hidden actions, concealed motives, and buried evidence?

All this (plus a lot I left out) and the first week isn’t even over yet!

Tyler Durden Fri, 01/24/2025 - 16:20

US Security Contractors Deploy To Gaza To Operate Key Checkpoint

The Gaza ceasefire deal has continued to hold, with Hamas expected to release a second round of hostages Saturday, to include four female Israeli captives.

While the guns have fallen silent, one of the more interesting developments is that American security contractors are expected to take over a key location on the ground inside the northern Gaza Strip.

Illustrative file image via BBC

Security contractor UG Solutions will deploy personnel to a checkpoint on the road to northern Gaza, at a corridor which splits the northern part of the Strip in half. Another US firm, Safe Reach Solutions, is also involved in the logistics and planning, Israeli press reports have identified.

CNN details, "Armed personnel from an American security contractor will man the checkpoint and will be responsible for inspecting vehicles entering northern Gaza. Palestinians returning to northern Gaza on foot will not be inspected, according to the terms of the ceasefire agreement between Israel and Hamas."

As part of the ongoing truce, Israeli forces are withdrawing from the Netzarim Corridor in central Gaza. This is expected to be complete Saturday amid the next hostage exchange. Many displaced residents of northern Gaza will for the first time check on their destroyed homes and communities.

Israeli forces are set to complete their withdrawal from the Netzarim Corridor in central Gaza on Saturday, which will allow displaced residents of northern Gaza to return to their homes – or what remains of them. American involvement in overseeing aspects of the truce appears part of the deal, but Palestinians are unlikely to be happy that Israeli troops have been exchanged for Americans (even if they are a 'private' force).

CNN further details that neither US security firm is very publicly well-known:

Neither firm has an extensive online footprint. On its website, Safe Reach Solutions says it provides “planning, logistics, and strategic expertise to organizations operating in the world’s most complex environments.”

Israel has long mulled various plans to deploy private American contractors to safeguard aid shipments in Gaza or to establish humanitarian zones that have been fully cleared of Hamas militants.

And the NY Times has noted, "The contractors have been enlisted to do weapons checks on vehicles carrying displaced Palestinians back to their homes in the north under the terms of the new cease-fire."

This practice of deploying of what amounts to American mercenaries in or near Gaza is controversial to say the least. Palestinians have warned against any foreign troop presence, and will see the US firms ultimately as part of the Israeli-American joint military machine.

US bombs and weapons have been heavily used against militants and civilians alike in Gaza since the war started in the wake of the Oct.7 terror attack. This means Palestinians will treat any US or foreign military presence with deep suspicion and hostility.

Tyler Durden Fri, 01/24/2025 - 15:45

De-Weaponizing The Federal Government

Authored by Mike McDaniel via AmericanThinker.com,

We’re going to be seeing a lot more swamp creatures quickly exiting their positions at the DOJ and throughout our intelligence apparatus.

Donald Trump, from his first day in office, has served notice he isn’t kidding. He’s taking names and he’s going to be kicking ass.

His orders are going to be obeyed or he’ll find people who will obey them. From the relevant executive order:

Sec. 2.  Policy.  It is the policy of the United States to identify and take appropriate action to correct past misconduct by the Federal Government related to the weaponization of law enforcement and the weaponization of the Intelligence Community.

Sec. 3.  Ending the Weaponization of the Federal Government.  (a)  The Attorney General, in consultation with the heads of all departments and agencies of the United States, shall take appropriate action to review the activities of all departments and agencies exercising civil or criminal enforcement authority of the United States, including, but not limited to, the Department of Justice, the Securities and Exchange Commission, and the Federal Trade Commission, over the last 4 years and identify any instances where a department’s or agency’s conduct appears to have been contrary to the purposes and policies of this order, and prepare a report to be submitted to the President, through the Deputy Chief of Staff for Policy and the Counsel to the President, with recommendations for appropriate remedial actions to be taken to fulfill the purposes and policies of this order.

Graphic: X Screenshot

That’s going to be Pam Bondi, who is going to have to clear out a lot of people determined to keep the DOJ weaponized and who plan to sabotage Trump and Bondi.

But oh, won’t such a report be something?

(b)  The Director of National Intelligence, in consultation with the heads of the appropriate departments and agencies within the Intelligence Community, shall take all appropriate action to review the activities of the Intelligence Community over the last 4 years and identify any instances where the Intelligence Community’s conduct appears to have been contrary to the purposes and policies of this order, and prepare a report to be submitted to the President, through the Deputy Chief of Staff for Policy and the National Security Advisor, with recommendations for appropriate remedial actions to be taken to fulfill the purposes and policies of this order. 

The DNI would be Tulsi Gabbard, a convert to sanity and a long-serving military officer. This EO gives the DNI not only a new focus, but new power over the heads of every part of the Intelligence Community, and that report is also going to be explosive.

Graphic: X Screenshot

We can expect remedial actions will not only involve reorganization, but large-scale firings and even prosecutions.

That’s going to be a real problem for Pam Bondi. Some criminals and Biden dead-enders have already left the DOJ, but many remain behind, hoping to stay under the radar so they can stealthily sabotage everything Bondi hopes to accomplish. She’s going to have to spend a great deal of time getting rid of those enemies of liberty. At least some of them will have an inherent conflict of interest in investigating or prosecuting traitors, because they were conspiring with them. That being the case, they’re perfect blackmail targets.

The same is going to be true for Tulsi Gabbard and the heads of every government agency. They’ll need honest, patriotic subordinates who will relentlessly follow up to make sure Trump’s lawful orders are implemented and no one so much as thinks about sabotaging them.

This isn’t merely a matter of resisting Donald Trump. It’s violating the Constitution andsubverting the republic. We elect presidents and give them sole executive power to run the government and to see that the laws are faithfully executed. That’s what Joe Biden’s handlers—may we soon discover who they were—didn’t do. They stealthily ran the country instead, despite being unelected and unaccountable. Sabotaging any president’s lawful orders goes far beyond hampering him. It damages the country domestically and in the carrying out of foreign policy.

It strikes at the heart of our republic, which is no surprise as the primary goal of Democrats/socialists/communists (D/s/cs) is establishing and preserving “our democracy,” a tyranny of the majority.

President Trump has made a good beginning to restoring the republic, but relentless follow up in cleaning out nests of subversion in the government will determine whether the republic survives.

Tyler Durden Fri, 01/24/2025 - 15:25

Why Can't The Left Understand Restrictions On Immigration?

Authored by Alex Berenson via 'Unreported Truths' substack,

Donald J. Trump is keeping his word on immigration.

And Democrats, the media, and the woke left (yes, I repeat myself) are losing their collective minds.

On Monday, as one of several moves to restore order to America’s southern, northern, eastern, and western borders, Trump canceled a Biden Administration program that had allowed over 500,000 migrants a year to use a mobile application to set up (largely fictitious) claims for asylum at official ports of entry.

To be clear: Biden wasn’t trying to control the flood of migrants with the CBP One (TM) App. He just wanted to pretend the Mexican border was (slightly) under control by letting people enter the United States without giving themselves up in encounters along it that journalists might see and report.

Also to be clear, almost none of these people qualify for asylum in the traditional sense - that is, that they fear imprisonment or worse in their home countries because of their ethnicity or religion. Genocide is rare on the ground these days, fortunately.

The migrants calling themselves asylum-seekers want out because they’re poor and their countries are badly run. They think life will be better in the United States.

Those are the same reasons people have always wanted to come. They have nothing to do with the purpose of asylum. Put another way, the current crop of asylum seekers are to - say - the Rwandan Tutsis who faced genocide in 1994 as the mRNA “vaccines” are to real vaccines.

As J.D. Vance wrote on X last week of the CBP One: “They made an application to facilitate illegal immigration. It boggles the mind.”

(I’m not sure this is the MOST underreported scandal - there’s a lot of competition, but it’s definitely top 5. Maybe top 10.)

(CBP One, by the way, is separate from the Biden “humanitarian parole” program that allowed up to 30,000 people from Nicaragua, Cuba, Venezuela, and Haiti each month, another tack Biden used to allow a flood of migrants that the media and fact-checkers could then claim were not illegal. Because a made-up program, you savvy?)

Yet over the last few days, the elite media has insisted on pretending that the Trump Administration is sending migrants into the fires of Mount Doom by shutting the app. As if end of CBP One violates some sacred contract between the United States and a billion poor people globally: if you can scrape up a few hundred bucks, come on in.

Sorry. Nope.

(That’s the idea)

On Monday, the Times offered the sad story of one asylum-seeker who’d been looking forward to free healthcare for her family courtesy of California seeking refuge from unthinkable genocidal political violence:

“I am in shock,” said Maura Hernandez, who received the news on Monday morning as she arrived in Tijuana with her four small children… she had a scheduled appointment on Tuesday.

(The father, or fathers, of the Hernandez babies were not mentioned.)

I’m sorry, I don’t mean to be cruel here, but there is no other way to say this: Maura Hernandez and her four small children are not my problem, not your problem, not America’s problem.

The United States can choose to let in unskilled migrants, in numbers and at times it deems manageable. But it has no obligation to do so, and it certainly has no obligation to allow millions of them to make a mockery of its borders and laws every year.

The failure of Democrats and the media to understand this basic fact is almost surely the number-one reason that Donald Trump is president today.

What will it take for them to learn?

Tyler Durden Fri, 01/24/2025 - 14:45

Putin Ready To Meet 'Smart, Pragmatic' Trump To 'Talk Calmly' On Oil, Energy, Ukraine

Russian President Vladimir Putin has reiterated Friday that he's ready to meet with US President Donald Trump in order to hopefully find "common ground" on strategic security and economic issues, particularly related to the Ukraine war.

"It will likely be better for us to meet, and based on today’s realities, speak calmly about areas that are of interest for both the US and Russia," Putin said in televised comments. "We are ready, but this depends above all on the decision and choice of the current US administration."

The Russian leader further acknowledged that Trump is a "pragmatic" and "smart" leader. This rare moment of praise at a time US-Russia relations are at a historical low point in modern history came despite Trump's threats of new sanctions and tariffs unless Moscow quickly ends the nearly three-year long Ukraine war.

"I’ve always had a businesslike, pragmatic and even trusting relationship with the current president," Putin said in the state broadcast.

And most interestingly, he continued: "And I can’t help but agree that if his victory hadn’t been stolen in 2020, the crisis in Ukraine might not have emerged in 2022."

These words will be proverbial music to Trump's ears, which demonstrates that Putin is truly seeking for the much-anticipated meeting to happen quickly. Soon after Monday's inauguration Trump told reporters he expects to meet Putin "soon".

Putin in these latest comments painted a theme of the US shooting itself in the foot with the sanctions, which would grow worse if more extreme measures are taken by Washington against Moscow. It had "hurt US interests, undermining the dollar’s role in global financial system," Putin described as cited in the AP.

"I have a hard time imagining decisions being made that would damage the American economy," Putin added of potentially extreme fluctuations in oil prices due to America's sanctions policy and efforts to isolate Moscow.

Putin was indirectly addressing some provocative words of Trump given at the World Economic Forum in Davos on Thursday evening, wherein he laid out that OPEC should to push down global oil prices in order to hurt vital stream of revenue for the Kremlin and its military machine. "Right now the price is high enough that that war will continue," Trump had said. According to more:

Oil and gas revenues have been Russia’s most important source of cash, accounting for a third to a half of federal budget proceeds over the past decade.

On Friday, Putin downplayed Trump’s economic threats, saying "excessively" low oil prices were bad for both the US and Russia.

Markets have mostly shrugged off the back-and-forth, but oil prices dropped slightly on Putin's energy comments...

As for the practical reality of what it will take to eventually get Putin and Zelensky at the same table, or their representatives directly engaged, the Russian leader explained the following:

Putin emphasized Friday that he’s open to talks but pointed to Zelenskyy’s 2022 decision to rule out negotiations with Moscow.

"How is it possible to conduct talks if they are banned?" Putin said. "If the talks start in the existing legal framework, they would be illegitimate and the results of those talks could also be declared illegitimate."

Russian President Vladimir Putin said he’s ready to discuss crude oil prices and other energy issues at a face-to-face meeting with US leader Donald Trump (translation via AP) https://t.co/sIkbFWHugb pic.twitter.com/BrKi8vNojx

— Bloomberg (@business) January 24, 2025

But Zelensky has only within recent days begun to shift his rhetoric a little on this, which is no doubt the result of Trump entering office in expectation of a pressure campaign for peace.

At Davos yesterday...

President Trump asks Saudi Arabia and OPEC to flood the market with oil to bring down the price to undermine Russia's oil revenues, which is the chief source of funding for Putin's invasion of Ukraine. pic.twitter.com/VLvJLzNq0R

— Igor Sushko (@igorsushko) January 23, 2025

There are reports saying that Zelensky fumed with anger at not being invited or in attendance from Trump's Monday inauguration and all the ceremonies and celebrations that go along with it. Certainly Zelensky won't be happy if Trump in reaction to Putin's fresh remarks heaps praise on the Russian leader or say any level of positive things. One thing is for sure - Zelensky has lost his rock start status with a new US administration in town, and the global spotlight is now on Trump-Putin.

Tyler Durden Fri, 01/24/2025 - 14:25

Double-Digit Hike In Homeowners Insurance Rates For 2nd Consecutive Year

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

Insurance premiums of American homeowners rose last year, with rates increasing by more than 20 percent in six states, according to a recent report from S&P Global.

A State Farm insurance company sign sits amid the rubble of a building destroyed by fire in the Pacific Palisades neighborhood of Los Angeles, Calif., on Jan. 16, 2025. Frederic J. Brown / AFP via Getty Images

In 2024, insurers raised rates by 10.4 percent as of Dec. 27, which followed a 12.7 percent hike in the previous year, according to the Jan. 21 report from the company.

In total, 33 states saw premiums climb by double digits last year, with the largest spike seen in Nebraska at 22.7 percent. Premiums in Iowa, Minnesota, Montana, Utah, and Washington jumped by more than 20 percent.

Florida had the lowest premium increase at just 1 percent, followed by Texas at 3.4 percent and Nevada at 4.3 percent.

Among the largest 10 private homeowners insurers in the country, American Family Insurance Group implemented the biggest premium rate hike last year at 16.5 percent. This was followed by Liberty Mutual Holding Co. Inc. and the Progressive Corp.

In July 2024, the Insurance Information Institute attributed the rise in homeowners insurance costs to a combination of high inflation and increasing natural catastrophe losses.

“Much like Americans are experiencing higher prices for virtually all material goods, a key driver for homeowners insurance has been around the likes of construction materials, which are an important element used when insurers help customers rebuild after catastrophe strikes,” said the institute’s CEO, Sean Kevelighan.

He said the institute’s analysis revealed that “cumulative replacement costs related to homeowners insurance soared 55 percent between 2020 and 2022.”

Even prior to the pandemic, insurers were struggling to remain profitable as rising costs made this challenging, the organization noted. In 2023, insurers paid out almost $1.11 in claims and expenses for every dollar they took in.

“Insurers play a vital role in the economy, protecting against financial losses due to unforeseen events such as natural disasters,” said Kevelighan. “However, if insurance companies were to become unprofitable and unable to meet their financial obligations, it leaves policyholders without coverage when they need it most.”

Elevated Insurance Costs

During an interview with The Epoch Times last year, Divya Sangameshwar, insurance spokesperson for LendingTree, said that insurance companies can refuse to renew coverage for a property for various reasons including rising home prices, higher risks, and the number of claims filed by homeowners.

“If you live near the coast, there’s been unprecedented rate hikes due to storms and flooding,” she said. “The costs can become so much of a shock that homeowners often consider moving because the insurance premiums are now making their home unaffordable.”

JoAnne Murray, president of Allan Block Insurance in Tarrytown, New York, said that “in the 40 years that I’ve been doing this, I have never seen it this bad.”

One property worth $2 million in Long Island was quoted an insurance of $48,000 per year, up from $6,000, she said. Another property in Florida valued at $7 million had a premium quoted at $340,000.

“One of the biggest factors affecting the escalating costs is wind damage. Hurricanes and tornadoes can destroy a home in just minutes. Trees falling on homes can also cause significant damage.”

The insurance situation is especially serious in California.

In 2023, around 7 percent of realtors saw deals fall through due to insurance issues, with the share jumping to 13 percent last year as of October, according the California Association of Realtors.

Jordan Levine, senior vice president of the association, said nearly a third of realtors were aware their buyers were finding it difficult to secure insurance for properties.

“Folks are already struggling because of housing supply issues and the growth of our economy and demand, so housing affordability has already deteriorated from where it was a handful of years ago,” he said.

“Now, annual carrying costs are going up substantially because of the insurance premiums … and these could be the difference maker for some folks not being able to make that leap into homeownership.”

Mary Prenon and Travis Gillmore contributed to the report.

Tyler Durden Fri, 01/24/2025 - 14:05

The Markets Are Ignoring Everything Trump Said To Focus Just On One Partial Quote

By Bas van Geffen, Senior Macro Strategist at Rabobank

Davos got hard Trump treatment yesterday. He demanded that Saudi Arabia and OPEC lower oil prices to end the Ukraine war, and a rounded up $1 trillion in Saudi investments into the US despite those lower prices. Will Trump offer a US nuclear power and defence deal, and/or dealing with Iran, as quid pro quo? 

But Trump may have another motive to encourage OPEC to lower the cost of oil: “When oil prices come down, everything is going to be cheaper for the American people.” Shortly after his demand for lower oil prices, Trump turned to the Fed, demanding that rate cuts should follow immediately after oil. And interest rates should come down “a lot.” The dollar will probably not like that: even though Trump demanded that other central banks follow suit, he has less traction over them. 

The US president is certainly trying, though. Yesterday, Trump signed an executive order on digital financial technology. The decree primarily promotes private –and dollar-based– initiatives, but it also contains some sweeping actions against the efforts to develop central bank digital currencies, and not just in the US: “(v) including by prohibiting the establishment, issuance, circulation, and use of a CBDC within the jurisdiction of the United States.” 

While this executive order technically does not seem to ban the offshore use of CBDC by US banks or multinationals (but I am not a lawyer!), I would certainly not want to be the one trying this first. That’s of course an attempt to stop the BRICS’ initiative to substitute central bank digital currencies for US dollars in their international trade.

Trump also had a message for global manufacturers: “Come make your product in the US, and we’ll give you among the lowest tax rates in any nation. But if you don’t – which is your prerogative – you will simply have to pay a tariff” that puts money in our Treasury. 

However, markets were mostly in ebullient mood, ignoring everything Trump said to focus on one partial quote: “I’d rather not tariff China.” Just like he would rather not tariff Russia but says he will if they won’t come to the peace table. All Trump is saying is “we can do this the easy way or the hard way.” The market is either calling the US president’s bluff, or only ever understands the easy way.

Elsewhere, the Bank of Japan defied Trump’s call for lower interest rates, and hiked its policy rates by 25bp. Arguably, Japan is still Trump’s low-rates utopia, with the policy rate now at just 0.5%. That said, Japanese policymakers are more constructive on the inflation outlook: the Bank of Japan now sees CPI inflation of around 2.5% for FY2025. Governor Ueda recently also noted that real interest rates had become more negative, and today the Bank stated that they were expected to remain significantly negative. So, financial conditions are still accommodative, and this will continue to firmly support economic activity. The Bank of Japan concludes that if the forecasts presented in the January Outlook report materialise, policymakers will continue to raise policy rates and adjust the degree of monetary accommodation accordingly.

Tyler Durden Fri, 01/24/2025 - 12:40

Rubio Outlines 'Sweeping Change' In Cable To U.S. Diplomats Worldwide

Authored by Philip Wegmann via RealClearPolitics,

Shortly after taking the oath of office, Secretary of State Marco Rubio sent a cable to every U.S. diplomatic and consular post worldwide. The stark message from the new diplomat: Sweeping changes are coming to a department that had mistakenly emphasized “ideology over common sense” and “misread the world.”

The lengthy cable was sent shortly after Rubio arrived at his new post in Foggy Bottom and was obtained exclusively by RealClearPolitics. It signals a fundamental shift in foreign policy and a realignment of all diplomatic efforts toward putting American needs first.

Toward this end, President Trump’s new diplomat promised to focus on mass migration, terminate DEI policies within the department, end the “censorship of the American people,” and pursue “energy dominance.”

Rubio was confirmed unanimously by the Senate the day before and is the first of Trump’s Cabinet nominees on the job. Previously, he was a senior senator from Florida, and he served on the Foreign Relations Committee for more than a decade. He developed a reputation as a China Hawk and a fierce critic of the neoliberal foreign policy consensus that emerged after the Cold War.

The United States won that conflict against the Soviet Union, Rubio has long argued, only for an out-of-touch elite to place international interest above the concerns of the country. It is this view that likely won him the job.

Before administering the oath of office inside the Eisenhower Executive Office Building adjacent to the White House, Vice President J.D. Vance praised the diplomat, saying that Rubio “more than almost anybody that I’ve met in Washington” had a deep understanding of “the distinctive priorities of President Trump.” In his subsequent cable, as he did during his confirmation hearing, the new secretary immediately defined just exactly what an America First foreign policy would look like in practice.

“Every dollar we spend, every program we fund, and every policy we pursue must be justified with the answer to three simple questions,” Rubio wrote. The questions: Does the action make America safer, stronger, and more prosperous?

To answer those questions in the affirmative and to realign the department with the mission of the new president, Rubio warned the diplomatic corps that the department will be transformed “into one that is innovative and nimble.” Said the new diplomat, “Certain priorities will be replaced, certain issues deemphasized, and some practices we will cease altogether.”

Many of his old colleagues will welcome that message. Republicans have grown frustrated with a department that they argue has become too progressive in all things. Rubio, who authored a lengthy report condemning a “woke” State Department, will be as advertised in the new post. Before Inauguration Day, a shakeup in personnel was already underway at Foggy Bottom. No less than 20 State Department officials, a mix of career diplomats and political appointees of former President Biden, reportedly received notification that their services would no longer be needed.

The first specific agenda item in the cable: stopping illegal immigration and securing the U.S. border. Rubio called tackling this issue, a Trump hallmark, “the most consequential issue of our time” and told his staff the world over that, effective immediately, “this department will no longer undertake any activities that facilitate or encourage it.”

More than 2 million illegal immigrants entered the United States each year on average under former President Biden, a historic surge. In concert with Trump’s executive orders, and lest there be any confusion, Rubio wrote, “The era of mass migration must end.”

Rubio also announced new personnel policies in line with Trump’s executive order ending so-called diversity, equity, and inclusion hiring practices. His predecessor, former Secretary of State Antony Blinken, had emphasized those ideals, requiring department officials to “advance” DEI as a prerequisite for promotion and implement an “equity action plan.” The Biden administration often emphasized that equity must be “at the center.”

Under Rubio, the byword will, instead, be equality. He warned the department will end all evaluation and promotion practices other than those based on “performance and merit,” adding that “strict meritocracy is essential to securing our nation’s future.”

Rubio previously argued while in the Senate that an emphasis on progressive policies at the department had undermined American influence abroad. In a 2023 report co-authored with Florida Rep. Brian Mast, the then-senator highlighted how Biden’s ambassador to France, in line with Blinken’s DEI policies, had “removed paintings of American Founding-era figures and replaced them with pictures of a transgender activist, a violent protester, socialist leaders, and communists in the name of diversity.”

He now has authority over all such posts and practices, and he warned that any counterproductive activities “must, and will, end.” Instead, the new secretary told a diplomatic corps that is still getting to know him that the new administration will return to what he called “the basics of diplomacy.”

“Far too much of America’s diplomacy is focused on pushing political and cultural causes that are divisive at home and deeply unpopular abroad,” he wrote. “This creates unnecessary friction with other nations and obstructs our ability to conduct a pragmatic foreign policy and work cooperatively with other nations to advance our core national interests.”

Another thorny issue that Rubio highlighted is how the State Department combats misinformation and disinformation. He condemned in this cable the “agencies and programs of our own government” that have engaged “in censorship, suppression, and misinformation of their own.”

During the Biden administration, Republicans bristled at the Global Engagement Center, an effort spearheaded by the State Department, which conservatives charged was engaged in censorship of Americans and blacklisting of domestic media organizations. Notably, Elon Musk called the center “the worst offender in U.S. government censorship and media.”

While Rubio said that the department will remain vigilant and continue to combat “enemy propaganda,” any programs under his jurisdiction that “lead or in any way open the door to censorship of the American people will be terminated.”

Biden had previously dubbed climate change an existential threat and a top priority, directing the State Department to put the issue front and center. Again, Rubio said this was a mistake, writing that “much of American foreign policy has been reoriented around climate policies that weakened America.” The department, he added, “will not ignore threats to our natural environment” but will remain focused instead on the stated mission of the new president: “energy dominance.”

Rubio now inherits a world, if not on fire, still smoldering. The land war in Ukraine continues. Tensions remain high in the Middle East despite a ceasefire between the terrorist organization Hamas and Israel. China, meanwhile, is as aggressive as ever in the Indo-Pacific. The new secretary of state will confront it all, and to do so, he began by remaking the department in an America First image.

“Our department will take the lead in revitalizing alliances, strengthening ties with other partners and allies, and countering the malign activities of our adversaries. We will refocus American foreign policy on the realities of today’s reemerging great power rivalry,” Rubio wrote. “And we will explore and creatively exploit the many new and unexpected opportunities that this changing world affords our nation.”

Tyler Durden Fri, 01/24/2025 - 12:00

Texas Instruments’ Bearish Outlook Indicates "Auto & Industrials Have Not Bottomed Yet"

Texas Instruments issued a weaker-than-expected earnings forecast for the first quarter, signaling continued softness in key end markets. Goldman analysts reiterated a "Sell" rating on TXN, citing concerns over elevated valuations, lower fab utilization, and record-high inventory levels that may further pressure margins. 

TXN expects first-quarter 2025 revenue between $3.74 billion and $4.06 billion, compared with the Bloomberg Consensus estimate of $3.88 billion. Expected earnings per share range from 94 cents to $1.16, missing the analyst estimate of $1.17. The outlook indicates that TXN's efforts to boost manufacturing capacity will weigh on profitability. Additionally, the broader electronics industry remains in a slump, contributing to nine consecutive quarters of declining sales.

Here is the first quarter forecast (courtesy of Bloomberg): 

• Sees revenue $3.74 billion to $4.06 billion, estimate $3.88 billion (Bloomberg Consensus)

• Sees EPS 94c to $1.16, estimate $1.17

• Sees effective tax rate about 12%, estimate 12.9%

TXN is the largest producer of basic semiconductors used in electric systems, including electric vehicles, industrial robots, solar panels, and satellites. Three months ago, management warned that some end markets were experiencing slowdowns, resulting in an inventory chip glut. 

In contrast with the gloomy forecast, TXN's fourth-quarter results beat Bloomberg Consensus estimates. Though sales declined 1.7% to $4.01 billion, analysts had projected $3.86 billion. Profit was $1.30 a share, compared with the forecast of $1.21. 

Here's a snapshot of fourth-quarter results: 

EPS $1.30 vs. $1.49 y/y, estimate $1.21

Revenue $4.01 billion, -1.7% y/y, estimate $3.86 billion

• Analog revenue $3.17 billion, +1.7% y/y, estimate $3.07 billion
• Embedded processing revenue $613 million, -18% y/y, estimate $620.6 million
• Other revenue $220 million, +7.3% y/y, estimate $233 million

Operating profit $1.38 billion, -10% y/y, estimate $1.3 billion

Capital expenditure $1.19 billion, +3.8% y/y, estimate $1.3 billion

Free cash flow $806 million, +3.9% y/y, estimate $613.7 million

R&D expenses $491 million, +6.7% y/y, estimate $498.2 million

Cash and cash equivalents $3.20 billion, +8% y/y, estimate $2.28 billion

Commenting on the earnings, Goldman analysts Toshiya Hari, Chris Kress, and others maintained a "Sell" rating on TXN, noting that valuations remain elevated relative to the higher depreciation costs and lower fab utilization, both of which are expected to pressure margins this quarter.

Hari outlined the tailwinds for TXN: 

1. China strength: China revenue increased yoy for the second consecutive quarter in 4Q24. Automotive was an area of particular strength as revenue grew high-single digits (%) on a sequential basis driven by sustained strength in EVs. Note Auto revenue outside of China declined high-single digits (%) qoq.

2. We believe TI is shipping below trend in Analog and Embedded Processing: while Analog revenue increased 2% yoy in 4Q24 (following 8 consecutive quarters of yoy declines), TI's Analog business remains well below trend as illustrated in Exhibit 2 as is the case with its Embedded Processing business (Exhibit 3). We believe this is a positive set-up as we look ahead into 2H25 and 2026 given historical precedent of volumes and revenue ultimately reverting toward trend.

3. Low cancellation rates and upside in turns are positive signs: although none of the end-markets that TI serves have yet to experience an inflection in demand, we view low (and stable) cancellation rates combined with an improvement in turns (i.e. revenue that is booked in the same quarter) as a precursor to a cyclical recovery.

4. Improving FCF generation: TI generated $806mn in FCF in 4Q24, the highest since 4Q22. Looking ahead, while the big inflection is likely to happen in 2026 (when we forecast a ~$3bn yoy decrease in capital spending), we do expect a gradual recovery in FCF over the next several quarters on an improving net income and working capital outlook.

And her concerns:

1. Timing and magnitude of recovery remain uncertain: despite our belief that TI and the rest of the industry is nearing a cyclical bottom, we acknowledge that the shape of the recovery remains uncertain given the fluid macroeconomic and geopolitical backdrop.

2. Compression in gross margin: in 4Q24, gross margin declined 190bps qoq to 57.7% due to lower volumes, higher depreciation and reduced factory loadings. Gross margin is expected to decline again in 1Q25 by a few hundred bps on a sequential basis, per management, on lower revenue and further cuts to production.

3. Record high inventory: while management remains content with its balance sheet, inventory grew further and reached a new all-time high of $4.5bn (+5% qoq, +13% yoy), while days of inventory increased 10 days qoq to 241 days at the end of 4Q24 or above the high-end of the company's target range of 130 to >200 days. Management reiterated its emphasis on reducing factory loadings in 1Q25, and we expect inventory dynamics to weigh on near-term gross margins.

Given that TXN is a bellwether for the global economy, the record-high inventory of its chips is a very deep concern on the global macro level:

Here's an update to the analysts' estimates for 2025 and 2026:

We tweak our 2025/26 revenue estimates by <+1%/-1%, respectively. We reduce our 2025/26 operating EPS forecasts by 5%/11% to $5.06/$5.96 from $5.34/$6.71, respectively, on lower gross margin and marginally higher opex. Note we also introduce 2027 estimates in conjunction with this note.

Hari noted that TXN's valuation is rich at these levels. 

Her 12-month price target for TXN has been shifted down from $190 to $186. 

Here's what other Wall Street analysts are saying (courtesy of Bloomberg):

Morgan Stanley analyst Joseph Moore (underweight, PT $165)

• Texas Instruments' lower gross margins in the quarter pressure EPS
• The company will "see gross margins underperform peers through CY26"

JPMorgan analyst Harlan Sur (overweight, PT $230)

• Cyclical trends are slowly improving for Texas Instruments but industria and auto end-markets continue "to weigh on slope of recovery"
• The company's free cash flow "remains muted" on strong capital expenditure and slower end market recovery

Bloomberg Intelligence analyst Kunjan Sobhani

• Texas Instruments "continues to seek a bottom, prompting further production cuts and pricing actions, which will shave gross margin and lead to softer 1Q earnings per share"
• Industrial and auto "could bottom by mid-2025," given the turmoil in the sector and uncertainty around global trade

Truist Securities (hold, PT to $195 from $199)

• "TXN makes it clear" that "autos & industrial have not bottomed yet"
• "Profitability is under incremental pressure from a combination of lower utilization, steady OpEx, and lower interest income"

Vital Knowledge

• The results show "solid upside" on earnings and sales, but guidance mid-points for 1Q are "mixed," with revenue roughly in line and earnings below expectations

TXN shares rejected the $200 handle. 

As for the broader chip industry, sentiment around Trump's Stargate project sent the PHLX Semiconductor Sector higher on the year, yet still remains below a 2024 peak. 

 

Maybe an improving industrial capacity utliazaiton in China will help TXN. 

The takeaway is that TXN's outlook highlights an uneven recovery across the sector, while companies supplying data center chips remain in focus with bulls. Meanwhile, persistent weakness in the automotive and industrial markets suggests more headwinds ahead for TXN. 

Tyler Durden Fri, 01/24/2025 - 11:45

Do Money Supply, Deficits, & QE Create Inflation?

Authored by Lance Roberts via RealInvestmentAdvice.com,

I recently debated with Michael Pento, who made an interesting statement that increases in the money supply, the deficit, and a return to quantitative easing (QE) will lead to 1970s-style inflation. The recent experience of inflation in 2021 and 2022 would seem to justify such a view. However, is that historically the case, or was the recent inflationary surge due to a different set of drivers? In today’s post, we will examine the money supply represented by M2, the Federal budget deficit, the Fed’s previous adventures with QE, and the correlation to inflation.

Let’s begin with the money supply. One common mistake the “inflation is coming back” crowd makes is focusing on increases in the money supply. Their key argument is that the government is “printing money out of thin air, destroying the dollar’s value.” This argument has two fallacies.

The first is to view the inflation-adjusted value of the dollar and claim it has less purchasing power today than in 1900. While this is a true statement, it assumes that the U.S. is the only country in the world that has experienced inflation over the last 125 years. In other words, the value of the U.S. dollar has declined relative to every other currency in the world as the money supply has grown. However, that has not been the case. The chart below shows the 5-year annual % change of the U.S. dollar on a trade-weighted basis versus the money supply. Today’s dollar has roughly the same value as in 1980, and the money supply has increased. Notably, increases in the money supply, on a rate of change basis, typically correlate to a stronger, not weaker, dollar.

The second flaw is that increases in the money supply create inflation. Historically, money supply changes have not led to inflation increases, except for the COVID-19 pandemic, where the supply/demand balance was shifted. (We will discuss that in detail momentarily.) Outside of that singular and unique event, increases in the money supply have generally coincided with recessionary and deflationary events like the “Dot.com crash” and “Financial Crisis.” However, since the turn of the century, the inflation rate has remained fairly stable, averaging roughly 2.6%, with M2 growing at 3.8%. Most notably, from 2009 to 2019, the average inflation rate was below the long-term average despite increased money supply levels. In other words, the increased money supply did not lead to inflation.

While Michael argued during the debate that increased “money printing” would lead to higher inflation and interest rates, there is a reason that hasn’t occurred outside of the Pandemic shutdown. The reason is that the government is not “printing” money.

“All money is lent into existence.”

Read that again.

When the government needs to pay for obligations that exceed current revenues, the U.S. Treasury issues debt. That debt is sold to the primary dealers, who purchase it and provide capital for the Government to meet its obligations. If the Treasury Department could just “print” money, there would be no need to issue debt. This is why debt issuance has increased over the last four decades: to meet the continued shortfall between government spending and incoming revenue, known as the “federal deficit.”

The Federal Deficit Is Deflationary

Michael’s second argument was that the deficit would lead to inflation and higher interest rates. This argument has several problems, but first, we must understand how the deficit is derived. Here is a current breakdown of the Federal budget and deficit spending requirements through the end of 2023 (the data for 2024 is not available at the time of this publication.)

According to the Center On Budget & Policy Priorities, in 2023, roughly 90% of every tax dollar went to non-productive spending. 

“In fiscal year 2023, the federal government spent $6.1 trillion, amounting to 22.7 percent of the nation’s gross domestic product (GDP). About nine-tenths of the total went toward federal programs; the remainder went toward interest payments on the federal debt. Of that $6.1 trillion, only $4.4 trillion was financed by federal revenues. The remaining amount was financed by borrowing.”

Think about that for a minute. In 2023, 90% of all expenditures went to social welfare, non-productive spending, and interest on the debt. Those payments required $6.1 trillion, roughly 138% more than the tax dollars collected.

The problem with “non-productive spending” is that it has a zero to negative multiplier on economic growth.

“History teaches us that although investments in productive capacity can in principle raise potential growth and r* in such a way that the debt incurred to finance fiscal stimulus is paid down over time (r-g<0), it turns out that there is little evidence that it has ever been achieved in the past.

 Rising federal debt as a percentage of GDP has historically been associated with declines in estimates of r* – the need to save to service debt depresses potential growth. The broad point is that aggressive spending is necessary, but not sufficient. Spending must be designed to raise productive capacity, potential growth, and r*. Absent true investment, public spending can lower r*, passively tightening for a fixed monetary stance.” – Stuart Sparks, Deutsche Bank

We can see this visually by comparing the Federal debt as a percentage of GDP to potential economic growth. Since government spending is primarily non-productive, it should be unsurprising that increases in debt do foster stronger economic activity.

That last sentence is the most crucial. Inflation comes from increases in demand,d which is reflected by increases in economic activity. However, since 1985, the annual inflation rate has decreased while the Federal deficit has increased. What should be noted is that inflation tends to rise when the federal deficit declines. That correlation makes sense, as the deficit decreases when tax revenues increase due to more substantial economic growth rates.

However, when economic activity slows, the federal deficit must increase to offset the decline in tax revenues to meet the required government spending. As such, increases in the deficit are directly correlated to slowing economic activity and declining inflation.

The crucial conclusion is that today’s backdrop of higher inflation is radically different, unlike the 1970s, when inflation was a function of surging commodity prices due to the Iranian oil embargo. A reversal in demographic trends, elevated debt levels, and a shift from manufacturing to services suggest the long-term trend growth rate of the economy and inflation will be lower, and so will inflation.

But what about the Federal Reserve?

QE Doesn’t Create Inflation

Michael’s final argument was that the Federal Reserve “learned its lesson in 2020”.As such, the Fed would be reticent to do “Quantitative Easing (QE)” in the future due to inflation concerns. The Federal Reserve is well aware of what caused inflation in 2020 and that it wasn’t QE that caused it.

However, to understand why, we must return to how the Government funds its deficit. When the government issues debt, the major banks or “primary dealers” must buy that debt. If the Federal Reserve engages in a QE program, it issues a notice of what bonds it buys. The primary dealers can then submit those bonds to the Federal Reserve for a “credit” to their reserve account. This exchange DOES NOT increase the money supply; instead, it is an asset swap between the bank and the Fed. This is why M2 and debt are highly correlated when you look at them as a percentage of GDP. It would have been noticeable if the Federal Reserve had added to the money supply.

As noted above, “Money is lent into existence.”

As such, an asset swap, in this case, a digital accounting mechanism, does not create money. However, it does boost reserves to the financial system, as shown below. While banks should lend those reserves to the economy, that has not happened. Instead, those reserves have found their way back into the financial markets.

However, increasing bank reserves is not inflationary, particularly when, as noted, those reserves are not lent to the economy to create activity. This is why, despite repeated rounds of QE, the annual inflation rate moderated around the Fed’s 2% target until early 2020.

Therefore, if QE does not create inflation by stimulating economic activity, why did inflation surge in 2020? For that answer, we must return to the very basic principles of economics.

Why We Had Inflation And Why It’s Not Coming Back

In economics, inflation is a general increase in the prices of goods and services. Changes in inflation are a function of fluctuations in actual demand for goods and services (also known as demand shocks, including changes in fiscal or monetary policy or recession), changes in available supplies such as during energy crises (also known as supply shocks), or changes in inflation expectations, which may be self-fulfilling. Note that supply and demand are key facets of the inflation equation.

Basic economics states prices will be set at a level where the supply of goods or services meets consumer demand.

There was no better example of what happens with prices than the massive Government interventions in 2020 and 2021. During that period, the Government sent rounds of checks to households (creating demand) during an economic shutdown (shuttering supply). The economic illustration shows this basic principle taught in every “Econ 101” class. Unsurprisingly, in 2020, inflation was the consequence of restricting supply and massively increasing demand.

That massive surge in stimulus sent directly to households resulted in an unprecedented spike in “savings,” creating artificial demand. As shown, the “pig in the python” effect is evident. Over the next two years, that “bulge” of excess liquidity has reverted to the previous growth trend. Given that economic growth lags behind the reversion in savings by about 12 months, we should continue to see economic growth slow into 2025. Notably, that “lag effect” is critical to the “inflation is returning” thesis.

Understanding that inflation is solely a function of supply and demand, reversing monetary liquidity will erode future economic activity. Notably, what caused the inflation spike post-2020 was not an increase in the debt or the Federal Reserve but rather the temporary increase in the money supply caused by sending checks to households. Therefore, unless the Government passes a new infrastructure spending bill of massive proportions or sends another round of stimulus to households, no factor is available to restart the inflation process of increased demand.

Over the coming decades, the massive surge in unproductive debt will increase deflationary pressures and slower economic growth. These issues are not new but have plagued economic growth for the last 40-years. The result is that debts and deficits will continue to detract from rather than contribute to economic growth. As shown, the surge in debt and deficits coincides with a peak in the 10-year average economic growth rate.

The decline in economic prosperity adds deflationary pressures on the economy. Such requires continued government deficit spending to sustain the demands on the welfare system.

The reality is that despite mainstream thinking that inflation will resurge due to rising debts, deficits, or Federal Reserve interventions, the historical evidence does not support such claims. The negative impact of debt on the economy is evident. Furthermore, the negative correlation between the size of the government and economic growth suggests the most likely outcome in the future is deflation.

Could something else happen? Absolutely. However, another inflationary surge will require an event that causes a massive distortion in supply and demand. Until such an imbalance occurs, the biggest risk for investors to focus on remains disinflation, which ultimately impacts earnings growth.

Tyler Durden Fri, 01/24/2025 - 11:25

Major Russian Microchip Factory Which Supplies Military Halts Production After Drone Attack

Ukrainian sources say that Russia was hit with over 50 explosions at oil and industrial targets as it launched a massive new drone attack Friday. This included a direct overnight hit on Russia's Ryazan Oil Refinery and the Ryazan Thermal Power Plant, leaving parts of them on fire.

"As a result of the strikes, fires broke out at the production facilities of the Ryazan Oil Refining Company and at the Ryazan oil pumping station," a statement from the General Staff of Ukraine's Armed Forces said. This is Russia's largest refinery as it has capacity of 17 million metric tons of oil annually. Ryazan lies a little over 300 miles from the Ukraine border.

The Kremniy El microchip, western Bryansk region. Source: bryansk.news

While oil depots and energy infrastructure have been a frequent target of drone attacks on Russian territory throughout much of the war, the attack included rare serious damage to a chip plant which supplies the Russian military and weapons systems.

"Also, the microelectronics plant 'Kremniy El' in Bryansk was hit. This is one of the key enterprises of the microelectronics industry of Russia," the Ukraine military statement indicated.

Representatives of the Kremniy El microchip plant subsequently confirmed the strike which resulted in damage, halting production. "Six drones [struck Kremniy El] on the night of Jan. 24, damaging part of the production facilities and the finished products warehouse," the plant’s press service told TASS.

The statement indicated further the attack disrupted the plant’s power supply and assembly lines, but there have been no reports of casualties. There were two prior drone strikes on the facility earlier in the nearly three-year long war.

According to background on the plant from a regional source:

Kremniy El, one of Russia’s largest microelectronics manufacturers, employs 1,700 people and has an annual production volume of 3.9 billion rubles ($39.7 million).

The plant supplies 94% of its production to the Russian Defense Ministry, including components for the Pantsir and S-500 missile systems, as well as Kalibr cruise missiles, according to local media reports.

A statement from the Russian Defense Ministry described that at least 121 Ukrainian drones were intercepted overnight by air defense systems, with a big concentration of them being over the Bryansk region.

Massive blasts rocked the sprawling Ryazan oil refinery overnight:

While Ukraine is losing ground along the frontlines in Donetsk region, it has upped its large-scale drone and missile operations on Russian territory - but this has made no real strategic difference on the battlefield.

Still, Ukraine's military in a statement added that the "systematic and targeted destruction of facilities" supplying the Russian military will continue "until the Russian Federation's armed aggression against Ukraine is completely stopped."

Ukraine wants to degrade and destroy Russia's military-industrial defense sector, but overall the sector remains vast enough that such cross-border drone attacks will barely put a dent in it. However, these attacks do make life harder on the population, and may present a long-term economic toll.

Tyler Durden Fri, 01/24/2025 - 11:05

Watch: Davos Globalists Admit "We Have Lost To Trump"

Authored by Steve Watson via Modernity.news,

A panel of globalists at the World Economic Forum meeting in Davos remarkably admitted that President Trump and his America first movement has defeated their agenda.

In a segment of their discussion focusing on Trump’s election victory, former Defense Department official Graham Allison, now a professor at Harvard, remarked “We shouldn’t normalize Trump. Trump has done something no person in the world has ever done before. A dead man, a dead politician, has risen.”

“This is the greatest comeback in political history for a politician, and therefore he thinks he can do anything. There’s a supreme confidence now about that,” Allison continued.

“This is a phenomenon we shouldn’t try to understand only in the terms we traditionally accept. We should say something strange, new, and amazing is happening here, and we should study it,” Allison further urged.

Yale University Professor Walter Reed emphasised “I think we need to also factor in not only who has won (Trump) but also who has lost, which is to say us.”

“By ‘us,’ I mean the general intellectual, professional, managerial people who believed history was over, and we were merely administering and managing things according to clear and known rules,” Reed explained.

“Something new, not necessarily better, but new, is moving into the center,” he added.

Ian Bremmer, president of political consulting firm Eurasia Group remarked:

“Anti-establishment forces in the United States are growing, and their momentum is undeniable.”

Trump himself addressed the globalists at Davos today by video link and put them on blast that America is back.

“I’m pleased to report that America is a free nation once again,” Trump announced, adding “On day one, I signed an executive order to stop all government censorship.”

“No longer will our government label the speech of our own citizens as misinformation or disinformation, which are the favorite words of censors and those who wish to stop the free exchange of ideas and, frankly, progress,” Trump asserted, adding “We have saved free speech in America, and we’ve saved it strongly.”

Trump: I'm pleased to report that America is also a free nation once again. On day one, I signed an executive order to stop all government censorship. No longer will our government label the speech of our own citizens as misinformation or disinformation, pic.twitter.com/xUx6LiS0PU

— Acyn (@Acyn) January 23, 2025

Trump also stated that “With another historic executive order this week, I also ended the weaponization of law enforcement against the American people and frankly, against politicians, and restored the fair, equal, and impartial rule of law.”

Klaus Schwab sounded like he was biting his own tongue off when announcing Trump as the President of the United States.

Here are Trump’s full comments.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Fri, 01/24/2025 - 10:45

2024 US Existing Home Sales Lowest Since 1995

US Existing Home Sales rose for the third straight month in December (longest streak since late 2021), rising 2.2% MoM and up 9.3% YoY - the best annual shift since June 2021...

Source: Bloomberg

Contract closings increased in three of four US regions, led by a nearly 4% rise in the Northeast

“Home sales in the final months of the year showed solid recovery despite elevated mortgage rates,” NAR Chief Economist Lawrence Yun said in a prepared statement.

However, despite the last rebound, for all of 2024, sales reached the lowest since 1995, when the US had about 70 million fewer people.

Source: Bloomberg

It marked the third straight annual decline, stretches only ever seen in the 2006 housing crisis as well as the recessions around the early 1980s and 1990s.

While sales volume declined, the median sale price, climbed 6% over the past 12 months to $404,400, reflecting more sales activity in the upper end of the market. That helped propel prices for the entire year to a record.

Source: Bloomberg

First-time buyers made up 31% of purchases in December, but NAR said the annual share was 24%, the lowest on record.

But, with a 3mo lag, mortgage rates have risen dramatically since, suggesting the euphoric renaissance of the US housing market will be short-lived once again...

Source: Bloomberg

...and Powell is in no mood to be cutting rates anytime soon (except for the pressure Trump will put on him).

Treasury yields are still elevated as investors brace for the cost of President Donald Trump’s policies and price pressures are cooling only somewhat. That’s projected to keep mortgage rates on average above 6% through at least 2027, according to some estimates.

Are homebuyers pulling for a recession to drag long-end yields lower and rescue affordability? Be careful what you wish for...

Tyler Durden Fri, 01/24/2025 - 10:30

Jim Acosta Absent From New CNN Program Schedule

Authored by Eric Lendrum via American Greatness,

On Thursday, the newly-announced program lineup for CNN noticeably did not include at least one prominent figure on the network: Anchor Jim Acosta.

As Fox News reports, the 10 AM slot previously occupied by Acosta’s show is now being replaced with “The Situation Room with Wolf Blitzer and Pamela Brown.”

While CNN has changed its scheduling several times in the last few years, this marks the first time that Acosta’s name has not been included.

“We are in active discussions with Jim about a new time slot and will have more information to share soon,” a CNN spokesman said in a statement.

Elsewhere in the lineup, Jake Tapper has been moved to a two-hour show from 5-7 PM. The primetime lineup from 8-11 PM remains unchanged, headlined by Anderson Cooper, Kaitlan Collins, and Abby Phillip, respectively.

Last week, it was first reported that Acosta may have been moved from his one-hour weekly show to a two-hour show that airs at midnight, in a move apparently pitched by CNN CEO Mark Thompson.

“Acosta is a talented broadcaster who could handle any slot on the network,” an anonymous CNN staffer said to Fox. “The midnight thing is shocking, but it is what it is.”

Acosta gained notoriety as CNN’s White House Correspondent during the first Trump Administration. He repeatedly asked loaded, combative questions of President Trump, with tensions peaking during a briefing where Acosta got into a brief physical confrontation with a female White House intern. Acosta’s White House press credentials were briefly revoked following the incident.

The absence of Acosta from the line-up comes just days after he was pwned by Rep. Tim Burchett, R-Tenn.

“This is this is not Fox, congressman. You can’t just spin a tale and pull the wool over people’s eyes. This is CNN,” Acosta said.

“This is the news. We are asking you to come on and tell the truth.”

Burchett shot back, “And that’s why more people are watching the Cartoon Network and SpongeBob reruns right now.”

Acosta blurted out, “That’s not the case at all!” — but CNN’s post-election coverage got crushed by networks including Food Network and the Hallmark Channel, Fox News reported in December 2024.

OUCH. @TimBurchett absolutely bodies CNN's Jim Acosta as the network losing to Spongebob reruns....

Acosta: "This is this is not Fox, congressman. You can't just spin a tale and pull the wool over people's eyes. This is CNN. This is the news. We are asking you to come on and… pic.twitter.com/AUfWPwPH49

— Curtis Houck (@CurtisHouck) January 22, 2025

CNN’s lineup change comes shortly after an announcement that the network plans to lay off at least 6% of its workforce, which will result in hundreds of jobs being slashed.

Tyler Durden Fri, 01/24/2025 - 10:20

UMich Inflation Expectations Soar As Democrats Panic

In the final data for UMich Consumer Sentiment survey, inflation expectations (both short- and long-term) surged higher in January...

Source: Bloomberg

...but it's all Democrats who see prices up 4.2% in the next year (while Republicans expect barely any change in prices)...

Source: Bloomberg

Concerns over the future trajectory of inflation were visible throughout the interviews and were tied to beliefs about anticipated policies like tariffs.

Consumers continued to spontaneously express motives for buying-in-advance to avoid future price increases, and robust auto and retail sales data suggest that consumers are indeed acting on these views.

Overall, this led to the headline sentiment index's first MoM decline in six months...

Source: Bloomberg

While assessments of personal finances inched up for the fifth consecutive month, all other index components pulled back. Indeed, sentiment declines were broad based and seen across incomes, wealth, and age groups.

Despite reporting stronger incomes this month, concerns about unemployment rose; about 47% of consumers expect unemployment to rise in the year ahead, the highest since the pandemic recession.

Tyler Durden Fri, 01/24/2025 - 10:09

Novo Shares Ignite After Next-Gen Shot Shows 22% Weight Loss

Shares of Novo Nordisk A/S surged in European trading after the Danish pharmaceutical giant announced promising early-stage trial results for its next-generation obesity treatment called "amycretin," which demonstrated 22% weight loss. The positive data helped reverse negative sentiment surrounding Novo after disappointing trial results from another weightloss drug in December.

According to early-stage trial results published on Novo's website, the once-weekly amycretin obesity drug, administered via injection, helped patients lose 22% of their body weight over 36 weeks. In contrast, patients who received a placebo gained about 2% over the same timeframe. 

"We are very encouraged by the subcutaneous phase 1b/2a results for amycretin in people living with overweight or obesity," Martin Lange, executive vice president for Development at Novo, wrote in a statement. 

Lange said, "The results seen in the trial support the weight lowering potential of this novel unimolecular GLP-1 and amylin receptor agonist, amycretin, that we have previously seen with the oral formulation."

Shares of the pharmaceutical giant jumped as much as 14% in Copenhagen, the largest intra-day gain since August 8, 2023. 

Shares have been nearly halved (-46%) since peaking around 1,000 Danish krone in June 2024. 

Novo super bull, Goldman's James Quigley, provided more color on amycretin's results.

He outlined how the storm clouds over Novo could soon be lifting following "disappointments around CagriSema's" results last month:

Overall, we see the headline weight loss result as potentially best in class and although we need to see detailed data on weight loss curves, safety and tolerability, we believe further weight loss can likely be shown above 22% over a longer time period in a higher baseline BMI population assuming the Phase 3 trial does not contain similar flexible dosing protocol as in REDEFINE-1. Confirmation of a potential acceleration into phase 3 could improve sentiment for Novo and extend the obesity franchise value post sema patent expiry (2031 EU, 2032 US), following disappointments around CagriSema.

Quigley's chart showing amycretin's results and how it compares with competitors: 

Quigley & his team maintained a "Buy" rating on Novo with an 875 Danish krone price target over the next 12 months. 

As a result, our 12-month price target is DKK 875. Our ADR PT is set with reference to the Danish line, translated at the current FX rate, leading to an ADR PT of $124. Key risks to our view and price target include (1) clinical risks if CagriSema and/or Amycretin development was unsuccessful, (2) slower-than-expected scale up in manufacturing for Wegovy/Ozempic, slowing sales trajectory, (3) stronger-than-anticipated competitor obesity data, particularly oral small molecule GLP-1 based assets, and (4) deeper and sustained price pressure.

In a separate note, Barclays analyst Emily Field stated, "This news finally breaks the tide of negative sentiment" for Novo, adding that the data was "on par with the best" results achieved at this stage for weight loss drugs.

Unlike Novo's CagriSema, which fell short of Novo's analyst expectations last month ...

Novo Nordisk Crashes Most On Record After CagriSema GLP-1 Results Disappoint https://t.co/vn3LGUaJ7M

— zerohedge (@zerohedge) December 20, 2024

... Bloomberg noted, "amycretin combines two mechanisms for weight loss in a single molecule. It mimics both GLP-1 — the ingredient that powers Ozempic and Wegovy — and another gut hormone called amylin." 

Meanwhile, Goldman's GLP-1 Winner Basket is underperforming its Loser Basket, reflecting the deflating obesity drug bubble. This shift comes ahead of Trump 2.0, with Robert F. Kennedy Jr. likely to head the Department of Health and Human Services. 

Will amycretin re-excite Novo bulls? 

Tyler Durden Fri, 01/24/2025 - 10:00

US Services PMI Pukes In Preliminary January Data, Manufacturing Back In Expansion

With expectations mixed (Services down, Manufacturing up) amid a rebound in 'hard data', preliminary January PMIs moved as expected but with considerably more magnitude.

• S&P Global US Manufacturing PMI jumped back above 50 (50.1) from 49.4 (better than the 49.8 expected).

• S&P Global US Services PMI tumbled to 52.8 from 56.8 (well below the 56.5 expected).

Source: Bloomberg

A return to growth in the manufacturing sector for the first time in six months was accompanied by sustained, but slower, service sector growth.

Firms' expectations of output in the coming year meanwhile continued to run at a level not surpassed since May 2022, buoyed by optimism about the new government's policies, encouraging firms to take on staff at the steepest rate for two-and-a-half years.

However, inflationary pressures intensified to a four-month high, with both input costs and selling prices rising at increased rates across both manufacturing and services.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:

“US businesses are starting 2025 in an upbeat mood on hopes that the new administration will help drive stronger economic growth. Rising optimism is most notable in the manufacturing sector, where expectations of growth over the coming year have surged higher as factories await support from the new policies of the Trump administration, though service providers are also entering 2025 in good spirits.

"Although output growth slowed slightly in January, sustained confidence suggests that this slowdown might be short-lived. Especially encouraging is the upturn in hiring that has been fueled by the improved business outlook, with jobs being created at a rate not seen for two-and-a-half years.

"However, rising price pressures are a concern, with companies reporting supplier-driven price hikes as well as wage growth amid poor staff availability. Higher input cost and selling price inflation was broad-based across goods and services and, if sustained, could add to worries that a combination of robust economic growth, a strong job market, and higher inflation could encourage a more hawkish policy approach from the Fed."

So overall growth down but prices up... smells like stagflation taking hold.

Tyler Durden Fri, 01/24/2025 - 09:50

"Reactive And Myopic" Fed Obsession Has Broken Fundamentals; Kantro-King Debate Highlights

Central bank flows dominate markets. This may not come as a shock to many ZeroHedge readers but was refreshing to hear from two institutional heavyweights like Piper Sandler’s Michael “Kantro” Kantrowitz and Matt King (formerly Citi's top global strategist and now runs Satori Insights), panelists at last night’s ZH Debate.

CB dominance and ever-forward-looking market participants has created a paradigm where bad news for the economy is good news for markets — because it means a sooner return of the Fed's rescue liquidity. This was the perspective of the cautiously bullish Kantro. King, on the other hand, sees private capital flows as significant and credits them for buoying markets during the Fed’s most recent tightening cycle. Still, he does not like the direction flows are headed.

They talked Fed, Trump, tariffs, and analyzed a shit ton of charts.

Moderated by the great Ash Bennington of Real Vision, here are the key insights for those who missed it, and be sure to check out the full debate.

It’s All Money Flows: King

Citi’s King described his journey that ultimately led him to one answer: flows. Traditional financial indicators, he said, started to breakdown in the Obama-Bernanke years.

“About 2012, all my favorite fundamental indicators — in credit, in equities, for risk assets especially — basically broke down,” King said. “Interest rates didn't seem to have the impact that they used to on either markets or, for that matter, the economy.”

After the shift, “markets seem to be driving the economy more than the conventional view of the economy driving markets.” King now follows a simple methodology: watch the Fed’s balance sheet.

“[Central banks are] where over the last 12 years or so, the biggest changes in money creation have been coming from,” King said. “I shouldn't be able to explain market moves to the extent that I can just by looking at stupid line items on the central bank balance sheets... nevertheless, these reserves changes often correlated really well, both with the long term moves and with the short term moves.”

If that’s the case, why didn’t equities take a hit during the recent Fed tightening cycle (however short lived)? “Massive” private inflows in U.S. equities, King says.

“That influence from central bank money creation has, especially over the last year, been overshadowed by a massive rising tide of inflows to US equity funds… central banks were withdrawing liquidity, but we as investors decided, ‘We're going to pile in anyway.’”

pic.twitter.com/ahn88ypcUp

— ZeroHedge Debates (@zerohedgeDebate) January 24, 2025

The Bullish Case: Kantro

Compartmentalized speculation and record-high profitability in the S&P may not send markets another 20% higher by year-end but should allow them to continue to “chug along” says Piper Sandler’s Kantro, pointing out key differentiators from past speculative fervors:

“In 2000, we had a market that was really full of junk and speculation, far more than we have today.”

Highlighting the billion-dollar market cap of “Fartcoin”, Kantro posited that most speculative capital has funneled into crypto rather than equities and thus likely does not pose a widespread risk.

More good news is the representation of public companies that “lose the most money” is at a record low. Meaning the S&P 500 is dominated with profitable firms more so than at any time in the past, as Kantro highlights in the chart below.

Lastly, high PEs (price-to-earnings ratios) do not scare Kantro as technology has evolved from the “old economy cyclicality”. Large companies are reaching more customers at lower costs, something AI will accelerate further.

“In 2007, financials, industrials, energy, and materials added up to half the market. If you have a market that basically looks like Canada — those four sectors — you're damn right, you should have a low PE.”

pic.twitter.com/0aWpQjCOU7

— ZeroHedge Debates (@zerohedgeDebate) January 24, 2025

We’re All Fed Watchers Now

Both strategists agreed that economics are largely irrelevant to stock prices. It’s reactions to econ data that matter. And no reaction matters more than Jerome Powell’s.

King sees money creation dwindling, thus equities are likely to fall which could usher in a recession like in 2000 (where, he argues, crashing markets ushered in the recession and not the other way around).

Kantro, however, views recession risk through the bad-news-is-good-news lens that Fed dominance has necessitated:

“My whole bullish case… was that the markets are going to go up more because the economy is going to soften more,” he said. “In other words, the unemployment rate is going to go up — which it did — and eventually got the Fed to cut.”

Looking through history, “equity markets all bottom with rates peaking” between 1970 – 1991. With 'rates peaking' meaning 'when Fed is done hiking'. Kantro thinks the recent Fed pivot is the green light to investors.

And to sum up investor sentiment rather perfectly…

Kantro: “Every client meeting I had people were asking me, ‘Is the Fed going to raise rates?’ It just shows you how quickly the sentiment has shifted. And the Fed being data dependent has only made everything much more reactive and myopic.”

pic.twitter.com/qMWvNofP8M

— ZeroHedge Debates (@zerohedgeDebate) January 24, 2025

Check out the full debate here to hear more insights and fascinating charts.

Find King’s research at Satori Insights. Accredited investors can find Kantro’s research through Piper Sandler and everyone can tune into his new podcast “What’s Next For Markets?”.

These debates would not be possible without support from JM Bullion. Visit https://www.JMBullion.com to purchase gold and silver at competitive prices along with exclusive ZeroHedge-branded coins.

Tyler Durden Fri, 01/24/2025 - 09:30

Group Launches New Recall Effort To Remove California Governor

Authored by Jill McLaughlin via The Epoch Times (emphasis ours),

A new coalition of Californians, named Saving California, publicly announced a new effort to recall Gov. Gavin Newsom on Jan. 23.

California Gov. Gavin Newsom (R) surveys damage in Pacific Palisades with CalFire's Nick Schuler during the Palisades Fire, in Pacific Palisades, Calif., on Jan. 8, 2025 Jeff Gritchen/The Orange County Register via AP

The group launched the effort at a retail store in Los Angeles on Thursday, with several speakers scheduled as they planned to collect at least 50 signatures to begin the recall.

“We can’t afford two more years of Gavin Newsom ... we just can’t,” Saving California Chairman Randy Economy told The Epoch Times on Wednesday. “High priority right now is not California.”

Economy, who was involved in a previously unsuccessful September 2021 recall campaign despite gathering enough signatures to hold an election, said he felt the governor was not performing for California residents.

“He’s not a hands-on governor,” Economy said.

Recall supporters who were expected to speak on Thursday and sign the intent letter included Economy; Bishop Juan Carlos, founder of Churches in Action; Robert Kennedy III; Fraser Ross, owner of Kitson; and Chef Andrew Gruel, an Orange County-based chef and television personality who helped feed and provide services to fire evacuees this month.

In the letter of intent, organizers say Newsom’s time in office has been marked by a “series of catastrophic failures“ that ”directly impact” their daily lives.

“His gross mismanagement during the Los Angeles County fires, with inadequate resources and delayed responses, left communities devastated,” the group wrote in the letter.

Saving California also mentioned soaring crime rates, a rise in the cost of living, the increase in homelessness, the drug epidemic, and border issues as reasons for the recall.

“The recall will happen this time as the incompetence of Gavin Newsom, along with other political leaders, cannot be tolerated anymore,” Ross said in a statement on Wednesday. “The destruction of California is at an all-time high; I’ve had to deal with shoplifting at all my Kitson stores and take matters into my own hands, and truly I just have had enough now.”

Newsom has served half of his second term. Saving California plans to serve the governor with the letter of intent this week.

Newsom’s political team responded to the recall campaign announcement on Wednesday afternoon, pointing out multiple failed attempts in the past.

Randy Economy, senior adviser and official spokesman to RecallGavin2020, during an interview with The Epoch Times. Economy is serving as the chairman of a new effort to recall California's governor. Screenshot/The Epoch Times

“Governor Newsom is focused on the fires and marshaling resources for the extensive recovery—not politics,” political spokesman Nathan Click told The Epoch Times in an email.

Click serves as the governor’s political adviser and led communications efforts for Newsom during the last recall effort in 2021.

“The same group of far right Trump acolytes have launched [seven] different recall attempts against the governor since he’s taken office, each of which have failed spectacularly,” Click said. “Even Republican Party leaders have criticized these repeated attempts as a brazen campaign finance ‘grift,’ and the recall organizers have been sued by their own donors for pocketing funds raised previously.”

The progressive California governor has been under scrutiny by the public after several major fires broke out in Los Angeles County this month.

During the Palisades fire, crews reported finding dry fire hydrants and an empty reservoir on Jan. 7 as thousands of homes in Pacific Palisades began to burn to the ground.

“The water system got low on us—on firefighters—so when they were out fighting the fire, there were times when they had very low water pressure,” San Digiovanna, chief of the Verdugo Fire Academy in Glendale, told The Epoch Times during the fires.

Newsom announced on Jan. 10 that he was calling for an independent investigation into the loss of water pressure to local fire hydrants and the reported lack of water supplies from the Santa Ynez Reservoir.

“We need answers to ensure this does not happen again and we have every resource available to fight these catastrophic fires,” Newsom wrote in an X post.

If the group is successful, Newsom would become the second California governor to be officially removed from office by voters.

In 2003, Gov. Gray Davis, a Democrat, was recalled by voters with 55 percent of the vote following a public outcry over how he handled the state’s electricity industry. Gov. Arnold Schwarzenegger, a Republican, was elected as his replacement.

Former California Gov. Gray Davis (L) and chairman and CEO of Showtime, Matt Blank, attend the after party for the film premiere of "Spinning Boris" at the Paramount Theatre, in Los Angeles on March 3, 2004. Davis was recalled in 2003. Frederick M. Brown/Getty Images

Since 1913, there have been 181 recall attempts of state elected officials in California, according to the secretary of state’s office. Eleven recall efforts collected enough signatures to qualify for the ballot, resulting in the recall of six officials.

Saving California’s recall campaign is in the beginning stages and would still require collecting signatures and many other steps before appearing on a ballot, but organizers believe they will be successful.

“This is a democracy we live in,” Economy said. “He works for the people, and I think he forgets that, and he does what he does.

“This time is different.”

Tyler Durden Fri, 01/24/2025 - 09:10

BlackRock CEO Wants SEC To "Rapidly Approve" Tokenization Of Bonds & Stocks

Larry Fink, CEO of the world’s largest fund manager BlackRock, has expressed his hope that the US Securities and Exchange Commission (SEC) will swiftly approve the tokenization of bonds and stocks.

During a CNBC interview on Jan. 23, Fink strongly endorsed digital assets, underscoring their potential to democratize investments.

Larry Fink, @BlackRock's CEO, just said live on @CNBC that, as a huge believer in blockchain, he wants "the SEC to rapidly approve the tokenization of bonds and stocks."

Ondo is proud to be at the forefront of a seismic shift in the global economy. pic.twitter.com/87iaAlwswV

— Ondo Finance (@OndoFinance) January 23, 2025

But, as CoinTelegraph's Marcel Pechman notes, the open question is whether this shift toward tokenizing traditional assets can benefit cryptocurrencies, which sectors might flourish, and which projects might face heightened competition.

There is no doubt that 24-hour worldwide trading and the transparency of blockchain technology bring advantages to assets such as bonds and stocks. However, this move relies on regulatory updates and approvals from relevant government agencies. More importantly, regulated assets may not align well with decentralized finance (DeFi).

Tokenization’s impact on stablecoins, memecoins, DeFi and decentralized oracles

Tokenizing bonds that produce stable yields could pose a challenge to stablecoins by providing a digital asset tied to real-world interest rates. This development would introduce new instruments into financial markets, competing for liquidity and user confidence as investors seek tangible returns.

Similarly, tokenized stocks like GameStop or AMC could function as onchain assets with volatile price fluctuations, backed by communities in a manner reminiscent of memecoins. This evolution might affect retail trading platforms as investors gravitate toward regulated but still speculative stock tokens rather than purely speculative memecoins.

GameStop (GME) and AMC Networks (AMC) in 2021. Source: TradingView / Cointelegraph

The integration of tokenized bonds and stocks also broadens the offerings on established DeFi platforms, potentially driving higher total value locked. It would impact decentralized exchanges and lending protocols, as they could incorporate traditional asset classes to create new revenue streams.

By tokenizing real-world assets, direct ownership and pricing data can be embedded within a token’s native structure, reducing the need for external oracles. This shift also affects blockchain data providers, as onchain assets inherently include their own data.

Basic decentralized oracles workflow. Source: Pontem Network

The tokenization of bonds and stocks greatly expands the pool of assets available for onchain derivatives, influencing decentralized exchanges and lending platforms looking to offer diverse markets. Synthetic tokens that mirror these securities could also bypass certain regulatory barriers, opening new opportunities for margin trading and yield generation.

Stocks and bond tokenization could take longer than anticipated

Despite these benefits, tokenized securities must navigate regulatory hurdles such as Know Your Customer (KYC) mandates, accredited investor restrictions, and securities law compliance. Region-specific rules and listing limitations hamper accessibility, while partial onchain data coverage still requires oracles.

Additionally, legal uncertainties and potential vulnerabilities in smart contracts can erode investor trust. As a result, many DeFi protocols are forced to impose stricter oversight, limiting the free-flow nature typically associated with cryptocurrencies and slowing widespread adoption.

US Senator Cynthia Lummis’s appointment as chair of the Senate Banking Subcommittee on Digital Assets on Jan. 23 could accelerate legislation for stock and bond tokenization.

Known for her pro-crypto stance, Lummis is expected to foster cooperation among the SEC, the Department of the Treasury, CFTC, FINRA, and state securities regulators.

Still, one should consider BlackRock CEO Larry Fink’s statements with caution since the firm holds a major interest in tokenizing real-world assets. Such changes could broaden the base of buyers for US-listed stocks and bonds, in which BlackRock is among the top investors. Moreover, the company might serve as an intermediary, handling custody or administrative functions.

Tyler Durden Fri, 01/24/2025 - 08:50