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"The Tyranny Of Red Judges": The Rationale, Criticisms, & The Politics Of The Le Pen Verdict

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"The Tyranny Of Red Judges": The Rationale, Criticisms, & The Politics Of The Le Pen Verdict

Authored by Etienne Fauchaire via The Epoch Times,

A verdict by the Paris Criminal Court on March 31 drew strong reactions across the French political arena. Marine Le Pen, a prominent figure on the nationalist right and a three-time presidential contender, was convicted in a long-running case involving her party’s use of European Parliament funds to pay assistants. The ruling bars her from running in the 2027 presidential election.

For the first time since 1981, the Le Pen name could be absent from the ballot entirely.

The Paris court’s verdict against Marine Le Pen reverberated beyond France’s borders, drawing international criticism from prominent conservative leaders, including Hungarian Prime Minister Viktor Orbán, Italian Prime Minister Giorgia Meloni, and U.S. President Donald Trump.

Trump, writing on his social media platform Truth Social, offered his unequivocal support on April 4.

“Free Marine Le Pen!” he wrote in all caps.

At the center of the case is the use of European Parliament funds to pay staff who worked simultaneously for Rassemblement National (RN), or National Rally, members of the European Parliament, and for the party itself. The court called it embezzlement, although it acknowledged there was no personal enrichment.

Le Pen and 21 co-defendants were convicted by the trial court. She was sentenced to four years in prison—two of them suspended—to be served outside of jail under electronic monitoring, along with a five-year ban from holding public office, effective immediately.

Le Pen denounced the ruling as politically motivated.

On the French television network TF1 on the same evening, she said, “The rule of law has been completely violated.”

The next day, she went further, calling the decision “a nuclear bomb” designed to wipe her candidacy off the map.

Jordan Bardella, president of the National Rally, denounced what he called the “tyranny of red judges.” Both Bardella and Le Pen say the case involves no embezzlement but rather an “administrative disagreement.”

The court rejected that defense, stating “this was not a matter of administrative errors or a misunderstanding by the Members of Parliament of confusing European rules.”

National Rally First Vice President Louis Aliot and former party treasurer Wallerand de Saint-Just, both co-defendants, said they stand by their defense of Le Pen.

“This isn’t embezzlement; it’s an administrative dispute,” Aliot told The Epoch Times. “Had the European Parliament clearly told us, ‘You can’t do this,’ we would obviously have acted differently.”

Aliot said that the rules governing parliamentary assistants had changed repeatedly over eight legislative terms, blurring the line between party activities and parliamentary duties.

“All the other political parties have done the same thing over the past decades,” he added. “The court should have taken that into account. It did not.”

The judges, for their part, rejected any suggestion of good faith. In their ruling, they concluded that the National Rally had engaged in “embezzlement within a system set up to reduce the party’s financial burden.” The defendants appealed this verdict.

Participants stand in front of posters during a gathering in support of President of Rassemblement National parliamentary group Marine Le Pen, after she was convicted of a fake jobs scheme at the EU Parliament, in Marseille on April 5, 2025. Clement Mahoudeau/AFP via Getty Images

Bayrou ‘Troubled’

Beyond the merits of the case itself, the most contentious issue in France centers on the court’s decision to enforce Le Pen’s immediate ineligibility for public office through a measure known as exécution provisoire (provisional enforcement). The ruling, which bars her from running in the 2027 presidential election before the appeals process is complete, is viewed, particularly on the right, as politically motivated.

Across the French right, political figures from Éric Zemmour (Reconquête) and Éric Ciotti (UDR) to Laurent Wauquiez (Les Républicains) voiced strong indignation at the decision to apply the sentence provisionally.

“It is not up to judges to decide who the people should vote for,” Zemmour said in a March 31 social media post. “I regret that politicians have handed such excessive power to the judiciary. Everything will have to be changed.”

On the presidential side, French Prime Minister François Bayrou voiced his unease, saying he was “troubled” by the court’s decision. Bayrou and his party, the Democratic Movement (MoDem), are implicated in a similar case. On Feb. 5, the Paris court acquitted the MoDem president, citing a “lack of evidence.” The prosecution has since appealed the ruling.

The leader of the far-left party France Unbowed, Jean-Luc Mélenchon, is also under investigation for the alleged misuse of EU parliamentary assistant funds.

Bayrou’s concerns were not echoed within French President Emmanuel Macron’s political camp.

“When an elected official is convicted of embezzling public funds, ineligibility is automatic. It’s the law. When there is a risk of reoffending (which is the case when the defendant denies having committed the offense), provisional enforcement is ordered. It’s the law,” lawmaker Sacha Houlié wrote on X.

Bayrou’s remarks were also harshly criticized by Socialist Party leader Olivier Faure, who said he was “troubled by the prime minister’s disturbance,” lamenting that “respect for the law, the rule of law, and the separation of powers are no longer on the government’s agenda.”

This view was echoed by legal scholar Paul Cassia, a professor of law and president of French anti-corruption association Anticor. In an op-ed for Le Monde, he argued the court justified the “proportionate nature” of its decision. He also said that a presidential candidacy “cannot, in itself, constitute a privilege or a totem of immunity ... except by disregarding the principle of equal treatment under the law.”

Some legal experts dispute that interpretation. They argue that the court’s decision violates the presumption of innocence, enshrined in Article 9 of the 1789 Declaration of the Rights of Man and of the Citizen. Under French law, civil rights are not typically revoked until all appeals have been exhausted. Le Pen, they note, remains the leading contender in the 2027 presidential polls, making the immediate application of ineligibility particularly consequential and, in their view, disproportionate.

Critics also point to a perceived double standard. They argue that many of those now invoking the principle of equality before the law are the same voices who typically call for the individualization of sentences, a key concept in French criminal law often used to justify rulings perceived, particularly on the right, as lenient in cases involving insecurity and urban violence. This principle requires that sentences be tailored to the offender’s individual circumstances rather than applied mechanically.

To justify the accelerated enforcement of Le Pen’s ineligibility, the court invoked the spirit of the Sapin II law, passed in December 2016, which mandates automatic ineligibility for those convicted of misusing public funds. The events in question occurred between 2004 and early 2016, before the law was enacted.

Since judges could not legally rely on the Sapin II law itself, they instead based their decision on preexisting French legislation, which allows for ineligibility in such cases when justified. To support the provisional enforcement, the court cited two controversial arguments.

‘Risk of Recidivism’ Argument

The first justification offered by the court for the provisional enforcement of Le Pen’s ineligibility was the defendants’ “system of defense,” which it interpreted as evidence of a potential “risk of recidivism.” 

In other words, Le Pen’s refusal to admit guilt and her decision to contest the charges were taken as signs that she might reoffend.

“Since they have completely refused to acknowledge any guilt ... it is entirely legitimate to consider that they could very well reoffend, especially if they were to hold the highest offices in the country tomorrow,” Julien Boudon, professor of Public Law at Paris-Saclay University, told Le Monde.

Critics disagree. Speaking to The Epoch Times, legal scholar Ghislain Benhessa, who teaches at the University of Strasbourg, noted the court treated the National Rally’s opposition to the European Union, and in particular to the values of the rule of law promoted by the EU, as an aggravating factor.

“But Marine Le Pen has a constitutional right to defend herself and contest the charges,” he said. “You cannot, on the one hand, accuse the National Rally of undermining the rule of law, and on the other, criticize it for exercising its legal right to mount a defense.”

French lawyer Pierre Gentillet, known for his conservative views, said the court’s reasoning was “absurd.”

“The judges based their decision on intent rather than on materiality. And even if we consider intent, it was inferred simply because Marine Le Pen denied committing a crime,” Gentillet said. “At the time, she had no awareness that the actions taken under her authority might be illegal. And if we’re talking about the material risk of reoffending, how? She is no longer an MEP, nor is she the president of the National Rally.”

Risk to ‘Public Democratic Order’ Argument

Second, to argue that their decision was proportionate, the judges introduced what some describe as a novel—and legally questionable—concept: “public democratic order.”

According to the ruling, the candidacy, or eventual election, of Marine Le Pen to the presidency would constitute a “major disruption to democratic public order,” given that she has “already been convicted at first instance, notably to an additional penalty of ineligibility,” and “could later be definitively convicted.”

An attendee wearing a red Phrygian cap holds French national flags in front of the golden dome of Les Invalides, ahead of a rally in support of the president of Rassemblement National parliamentary group Marine Le Pen, in Paris on April 6, 2025. Julien de Rosa/AFP

Critics note that this concept has no legal foundation in French law.

“The court pulled it out of thin air,” Benhessa said. “And it is not the role of a trial court to invent new jurisprudential doctrines. That responsibility lies solely with the supreme courts—the Conseil d’État and the court of Cassation—who alone have the authority to shape jurisprudence in accordance with legal doctrine and the specific nature of a case.”

Former Constitutional Council member Noëlle Lenoir echoed the criticism in an op-ed for Le Figaro, stating unequivocally that “public democratic order” is an “unknown notion in the penal code” and that these judges did not base their decisions on the law.

Violation of Voter Freedom?

Just three days before the verdict, on March 28, the French Constitutional Council issued a ruling stating that ineligibility may only be applied immediately if it does not disproportionately infringe upon voters’ freedom.

While some legal scholars argue that the trial court has complied with that standard, by invoking the risk of recidivism and the concept of “public democratic order” to justify the proportionality of provisional enforcement, others strongly disagree.

In an op-ed for Marianne, Jean-Éric Schoettl, former secretary general of the Constitutional Council, accused the judges of openly defying the council’s guidance.

“They have rebelled against the Constitutional Council, and against the voters,” he wrote. “The provisional enforcement of Marine Le Pen’s ineligibility clearly has disproportionate consequences on the freedom of the voter, as it deprives millions of citizens of their natural candidate in the country’s most important election.”

Criminal lawyer Maxime Thiébaut echoed that warning, calling the court’s move a serious breach of legal norms.

“The judges have tainted their ruling with illegality,” he told The Epoch Times. “It amounts to interference in the democratic process. What legitimacy does a first-instance court have to declare that someone is unfit to run for president?”

Judicial Bias Alleged

In their interviews with The Epoch Times, both Aliot and de Saint-Just also alleged that the judiciary—prosecutors, investigating judges, and the bench—had demonstrated political bias.

For instance, they pointed out that investigating judges Claire Thépaut and Renaud Van Ruymbeke are both affiliated with the Syndicat de la Magistrature (Union of the Magistracy), a judges’ union that has openly called on magistrates to oppose the RN’s rise in the lead-up to the 2024 legislative elections.

The Syndicat de la Magistrature responded to criticism of the Paris Court’s decision, arguing that claims of “politicized justice” are “based on assumptions that verge on conspiracy theories.”

The impartiality of Judge Bénédicte de Perthuis, who delivered the verdict, has also been questioned.

Fueling further controversy, it emerged this week that Judge de Perthuis had cited Green politician and former magistrate Eva Joly as a personal source of inspiration in 2020.

Rémy Heitz, prosecutor general at the French Court of Cassation, took issue on RTL, a commercial radio station, with that line of criticism, saying this decision is the result of a “fair trial” and that it was handed down not by one but by “a panel of three independent, impartial judges.”

Race Against the Clock

On April 1, the Paris Court of Appeal announced it would fast-track its review of Le Pen’s case.

Ordinarily, appeals of this nature take between 18 and 24 months, meaning the timeline would likely have excluded Le Pen from the 2027 presidential race. In an unusual step, the court has announced its intention to deliver a ruling by the summer of 2026.

Benhessa acknowledged the exceptional nature of the move.

“This is highly unusual,” he said. “Given the media storm surrounding the first-instance ruling, I believe the Court of Appeal is trying to put the fire out. What’s striking is that they’re not just scheduling a hearing: they’re committing to a deadline.”

The main facade of the Paris courthouse (Palais de Justice), which houses the Paris Court of Appeal in Paris, France, on March 2, 2025. Milani/Hans Lucas via AFP/Getty Images

The Paris Court of Appeal declined to make any public comments on the decision.

Within the Rassemblement National, the announcement is seen as a tacit admission that the initial ruling was excessive.

“This is very good news, and I take it as a sign of the unrest the ruling has provoked,” Le Pen said.

“This shows that it’s actually the lower court’s decision that creates a disturbance to public order. The Court of Appeal has never done this for anyone,” Aliot told The Epoch Times.

The accelerated timetable should not be interpreted as a “disavowal” of the lower court’s verdict, Paris Chief Prosecutor Marie-Suzanne Le Quéau told Agence France-Presse.

Beyond France’s borders, the appeal will be closely watched, especially by conservatives and by the Trump administration, who are concerned that lawfare is rising in Europe and free speech is waning.

In Trump’s lengthy post, the president compared Le Pen’s situation to his legal battles.

“The witch hunt against Marine Le Pen is another example of European leftists using lawfare to silence free speech and censor their political opponents. ... It’s the same playbook they used against me,” he wrote.

“I don’t know Marine Le Pen, but do appreciate how hard she worked for so many years. She suffered losses, but kept on going, and now, just before what would be a Big Victory, they get her on a minor charge that she probably knew nothing about—Sounds like a ‘bookkeeping’ error to me. It is all so bad for France, and the Great French People, no matter what side they are on.”

U.S. Vice President JD Vance, who in a speech in Munich last February warned of a “retreat of Europe from some of its most fundamental values, values shared with the United States of America,” also came to Le Pen’s defense.

“The Europeans, they are absolutely, 100 percent our friends,” Vance told Newsmax on April 3. “But that relationship is going to be strained, and it’s going to be tested, if they keep trying to throw opposition leaders in jail.”

Tyler Durden Wed, 04/09/2025 - 03:30

US Space Chief Warns Congress Of China's Space Capabilities In Potential Indo–Pacific War

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US Space Chief Warns Congress Of China's Space Capabilities In Potential Indo–Pacific War

Authored by Frank Fang via The Epoch Times,

China’s ambitions in space pose a “powerful destabilizing force” to the U.S. economy and national security, according to Gen. Chance Saltzman, chief of space operations for the U.S. Space Force.

“Space has become a warfighting domain,” Saltzman told the U.S.-China Economic and Security Review Commission, a bipartisan congressional panel, in a hearing on April 3.

“Over the last two decades, our competitors, China in particular, have invested heavily in counter space threats, kinetic and non-kinetic weapons that can deny, degrade, or destroy our satellites,” Saltzman warned.

The hearing took place as tensions have mounted between China and the United States regarding trade policies and tariffs. Saltzman’s testimony sheds light on the challenges that the U.S. military could face over a potential conflict in the western Pacific, including Taiwan.

Saltzman explained that China has been able to advance its space capabilities quickly because it has a “Western Pacific mindset,” pooling all its resources and advancing all capabilities in that region. In contrast, the United States has more global concerns, according to the Space Force commander.

“The modern battlefield has to account for the space domain,“ he said. 

”If we can’t continue to protect our use of the domain and we can’t deny an adversary, it’s going to be tough to meet military objectives in any of the other domains.”

In his written testimony, Saltzman explained that the Chinese regime’s military, the People’s Liberation Army (PLA), has set out military objectives for the space domain.

“Intelligence suggests the PLA likely sees counterspace operations as a means to deter and counter U.S. military intervention in a regional conflict,” Saltzman wrote.

The general said China’s space weapons include ground-to-space missiles and ground-based lasers, the latter of which can “disrupt, degrade, or damage satellite sensors.”

“By the mid-to-late 2020s, we expect them to deploy systems high enough in power that they can physically damage satellite structures,” his testimony reads.

Currently, China’s military exercises “regularly incorporate radio frequency jammers” against space-based communications, radars, and navigation systems, according to Saltzman.

“Intelligence suggests the PLA may be developing jammers to target a greater range of frequencies, including U.S. military protected extremely-high-frequency (EHF) systems,” he said.

In 2022, China used a satellite equipped with a robotic arm to tow a defunct Chinese navigation satellite to a graveyard orbit. Saltzman said such a robot-armed satellite was an example of how satellites can have both civilian and military applications and that it is “not a science fiction” that China can use such technology to “capture enemy satellites.”

China is also practicing “dogfighting in space,” Saltzman said, saying his service has seen Chinese experimental satellites conducting “unusual, large, and rapid maneuvers” in geostationary orbit in recent years. Based on the observation, Saltzman said Beijing “is resolved to contest [U.S.] spacepower through combat operations.”

“China’s advancement in space technology, their stated desire to dominate, and Beijing’s disregard for international norms for the responsible use of space make them an incredible danger to U.S. prosperity and security,” he said.

“China’s determination to deny U.S. spacepower in the Indo–Pacific could not only degrade of [sic] our military space-based capability, but it would threaten the satellites of our allies and commercial partners as well.”

Tyler Durden Tue, 04/08/2025 - 23:25

These Are The U.S. States With The Highest And Lowest Tax Burdens

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These Are The U.S. States With The Highest And Lowest Tax Burdens

A new study looked at the highest and lowest tax burdens, per state, in the U.S.

To rank states by tax burden, WalletHub analyzed all 50 based on three factors: property taxes, income taxes, and sales/excise taxes — each measured as a share of personal income — and combined them for an overall score.

Hawaii tops the nation in total tax burden, with residents surrendering nearly 14% of their income to state and local taxes, according to the new report from WalletHub. This includes 4.2% for income taxes, 2.6% for property taxes, and a hefty 7.2% for sales and excise taxes.

At the opposite end, Alaska has the lightest tax load. With no state income tax, and modest property and sales tax burdens of 3.5% and 1.5% respectively, Alaskans pay just 4.9% of their income in total.

Wyoming and New Hampshire follow closely behind, with total tax burdens of 5.79% and 5.94%, respectively. Wyoming similarly benefits from having no income tax, while New Hampshire, despite its steep property taxes — the second highest in the nation — offsets this with extremely low sales taxes and no general sales tax at all.

Other low-burden states include Tennessee, South Dakota, and Florida, all of which also forgo a state income tax. Tennessee residents pay only 6.38% of their income in total taxes, while South Dakotans and Floridians pay slightly more at 6.46% and 6.49%, respectively. Delaware also ranks low at 6.52%, due in large part to its minimal sales tax burden — the second lowest in the country.

These states reflect a broader trend: the lowest-taxed states often avoid personal income taxes altogether and keep consumption-based taxes in check, making them attractive destinations for taxpayers seeking to maximize their earnings.

When it comes to income taxes alone, New York leads with the highest burden, taking 5.8% of residents’ income. 

Vermont ranks highest for property taxes, collecting 5% of personal income. In contrast, Alabama offers the lowest property tax burden, claiming only 1.4%.

For sales and excise taxes, Hawaii again leads, with residents paying 7.2% of their income annually. New Hampshire sits at the other extreme, with no general sales tax and minimal excise taxes, amounting to less than 1% of income.

The WalletHub report says red states have a lower tax burden than blue states, on average.

Analyst Chip Lupo commented: “It’s easy to be dismayed at tax time when you see just how much of your income you lose. Living in a state with a low tax burden can alleviate some of that stress. Some states charge no income tax or no sales tax, although all states have some form of property taxes and excise taxes.”

Tyler Durden Tue, 04/08/2025 - 23:00

At Least 12 House Republicans Consider Signing Anti-Trump Tariff Bill: Report

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At Least 12 House Republicans Consider Signing Anti-Trump Tariff Bill: Report

At least a dozen House Republicans are mulling whether to sign onto Rep. Don Back's (R-NE) bill which would restrict the White House's ability to unilaterally impose tariffs, Axios reports.

Rep. Don Bacon leaving a House Republican conference meeting on March 25. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Bacon is crafting a companion bill to the Trade Review Act of 2025 introduced by Sens. Chuck Grassley (R-IA) and Maria Cantwell (D-WA), which would require the president to notify Congress of any new tariffs within 48 hours with the administration's reasoning as well as an analysis of their economic impacts.

The bill would cause any tariffs to expire after 40 days unless Congress passes a resolution of approval. It would also give Congress the ability to pass a resolution of disapproval which would eliminate the tariffs within the 40 day period.

According to Bacon, Reps. Jeff Hurd (R-CO) and Dan Newhouse (R-WA) along with two Democrats have signed onto the bill as co-sponsors.

"I have 10 others who want to do it but they want to talk to the trade representative first," Bacon told the outlet.

That said, some House Republicans claim (anonymously) that they would support the bill, however Trump has vowed to veto it if it comes across his desk (making the entire effort performative).

According to Bacon, he's in no rush to force the issue and bring the bill up for a vote, but he isn't ruling out an effort to bring it to the House floor.

"I don't think it's likely for this next month, maybe two months. I want that bill sitting there, and as we study the stock market, inflation, unemployment, this may be a viable way," Bacon said, adding that "there is a prospect" that he ends up instead introducing a discharge petition - a procedural maneuver that, if signed by 218 members, can bypass leadership and force a vote on any bill.

Only to face the Senate, and then get Trump's veto.

*  *  *

Michael’s new  book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

*  *  *

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This May Not Be What They Were Originally Anticipating, But A "Reset" Of The Global Economy Is Definitely Here

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This May Not Be What They Were Originally Anticipating, But A "Reset" Of The Global Economy Is Definitely Here

Authored by Michael Snyder via The End of The American Dream log,

Over the past few years, there has been a tremendous amount of buzz about an imminent “reset” of the global economy.  Well, what we are currently witnessing may not look like what they were anticipating, but a “reset” of the global economy is definitely here.  Trillions of dollars were invested to set up the global supply chains that we have today.  I have always argued that we should have never allowed ourselves to become so dependent on goods that are made elsewhere, and making more things in this country is a goal that every administration should pursue. Unfortunately, you can’t just reverse decades of investment and construct entirely new supply chains overnight.  For example, it costs approximately 10 billion dollars to build a manufacturing facility that makes computer chips, and construction time can run between 3 and 5 years. So anyone that thinks that we can just hit a “reset button” and magically make things better is simply being unrealistic.

We just witnessed the largest tariff increase in our history.  Many companies that invested enormous amounts of money into global supply chains that were carefully calculated to give them a competitive advantage have just had their businesses ruined.  At the end of last week, I wrote that the global economy “has already been moving in the wrong direction for quite some time, and now a massive amount of fuel is being poured on to that fire”.  I do not believe that the global economy is going to be able to handle a shock of this magnitude.

Wall Street was certainly not ready to have someone press the “reset” button.  At this point, investors are “selling first and asking questions later”…

The tariffs have sent shockwaves through global financial markets, raising fears of a worldwide economic downturn and sharp price hikes across sectors in the world’s biggest consumer market.

‘The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results,’ Michael Arone, investment expert at State Street Global Advisors said.

‘Investors are selling first and asking questions later.’

Hopefully you were able to get out of the stock market before the carnage started.

Many are hoping that President Trump will reverse course after witnessing what has happened on Wall Street, but we are being told that there will be no turning back…

Trump administration officials messaged that the tariffs are to be implemented, and are not up for negotiation, across the Sunday political shows.

“The tariffs are coming. He announced it and he wasn’t kidding. The tariffs are coming, of course they are,” Commerce Secretary Howard Lutnick said on CBS’s “Face the Nation.”

So get ready to see some shocking price increases.

For example, an iPhone could soon cost several hundred dollars more…

Shoppers may find their favourite electronics, including iPhones, will soon become much pricier due to the tariffs if companies pass the price onto consumers.

Despite moves to expand its supply chain, Apple still makes the vast majority of its iPhones in China, where hardware exports will be hit with a tariff totaling 54 per cent from April 9.

The cheapest iPhone 16 model was launched in the US with a sticker price of $799, but could cost as much as $1,142, per calculations based on projections from analysts at Rosenblatt Securities, who say the cost could rise by 43 per cent.

This is going to be a devastating blow to our standard of living.

Sadly, instead of seeking to negotiate with President Trump, the Chinese have decided to retaliate by hiking tariffs on U.S. goods…

China announced Friday it will impose 34% tariffs on the U.S., just days after President Donald Trump unveiled the same amount against Beijing under his reciprocal tariff plan.

The new China tariffs against the U.S. will go into effect on April 10, according to The Wall Street Journal.

“China played it wrong, they panicked — the one thing they cannot afford to do,” Trump wrote Friday on Truth Social.

So now a full-fledged trade war is raging between the largest economic power on the planet and the second largest economic power on the planet.

What do you think that is going to do to the global economy?

It doesn’t take a degree in economics to figure that one out.

The European Union has also decided to dig in for a fight…

The European Union will likely approve a first set of targeted countermeasures on up to $28 billion of U.S. imports in the coming days, Reuters reported Sunday.

The European Commission, which coordinates EU trade policy, will propose to members late on Monday a list of U.S. products to hit with extra duties in response to Trump’s steel and aluminum tariffs rather than the broader reciprocal levies.

It is set to include U.S. meat, cereals, wine, wood and clothing as well as chewing gum, dental floss, vacuum cleaners and toilet paper.

Here we go.

This is it folks.

The days ahead will be filled with pain.

At this stage, analysts at JPMorgan are telling us that there is a 60 percent chance of a recession…

Jamie Dimon finally has his hurricane. JPMorgan’s economics team has just raised their recession probability to 60% following the aggressive tariff stance announced by U.S. President Donald Trump.

In a note entitled, “there will be blood,” chief economist Bruce Kasman and his team said this year’s 22-percentage tariff increase amounts to the largest tax hike since 1968.

Personally, I think that the analysts at JPMorgan are being wildly optimistic.

There is no way that we are getting out of this unscathed.

Earlier today, I read an excellent article about how these tariffs are going to affect the big shoe companies.  They have spent billions of dollars setting up their global supply chains, and they can’t just suddenly decide to start making shoes somewhere else…

The crux of the problem is that, since the 1990s, apparel and footwear has moved abroad. As Swartz explains, performance companies in particular invested billions of dollars into the roads, ports, factories, and rail lines that make up the complex supply chain feeding Vietnamese infrastructure.

It’s in everyone’s interest to keep these factories working. Vietnam relies on the business for their economy. Corporations rely on Vietnam to produce goods. Nike, for instance, doesn’t own a single one of its factories globally.

“You can’t just call a factory in India and say can you make 20 million of shoes for me, they don’t have the capacity,” says Swartz. Idle factories don’t exist globally. An unused factory is shut down, and its staff is fired. Furthermore, specialized production methods behind modern footwear don’t exist everywhere. Sewing is simple. But injection molded foam composites, polymer production, and complex fabric weaving are other topics. A modern sneaker may have as many as 100 parts produced in different factories, and if any one component doesn’t arrive in time, everything is slowed down. Building an infrastructure of factories with interdependent specialized production methods—and with workers skilled enough to operate them—can take years.

These tariffs are going to produce winners and they are going to produce losers.

Many once thriving businesses will suddenly start going under, and we are being warned that “the next wave of corporate defaults” is right around the corner…

Donald Trump’s global trade war is already priming financial markets for the next wave of corporate defaults. A Bloomberg News measure of distressed debt worldwide swelled the most in at least 15 months this week, sending more than $43 billion of bonds and loans to levels that make it challenging to refinance.

The president had telegraphed well in advance his intention to raise tariffs ahead of the official April 2 announcement. But few had expected Washington to go after so many of its key trading partners with such high duties, especially considering the risk of upending global supply chains that entire US industries rely on.

Some Trump supporters are speculating that President Trump is disrupting the global economy and causing the financial markets to crash on purpose.

In fact, a video that discussed this theory was shared by Trump himself on Truth Social on Friday.  But now we are being told that crashing the financial markets is “not part of an intentional strategy”…

A crashing stock market is not part of an intentional strategy by President Donald Trump, White House National Economic Council director Kevin Hassett told ABC’s “This Week” on Sunday. This came after Trump shared a link to a video on his social media platform, Truth Social, which claimed the president was causing the markets to plummet on purpose as part of his broader economic plans.

The video, which initially appeared on TikTok in March, was shared by Trump on April 4, two days after his tariffs announcement.

“Trump is crashing the stock market by 20% this month, but he’s doing it on purpose. … And it could make you rich” the video said. It continued by adding that such a move by Trump would help “push cash into treasuries, which forces the Fed to slash interest rates in May. … It also weakens the dollar and drops mortgage rates. Now it’s a wild chess move, but it’s working.”

It is going to be fascinating to see how everything plays out.

By dramatically hiking tariffs, the U.S., China and the European Union are essentially taxing the living daylights out of their citizens.

They will bring in more money, our standard of living will drop quite a bit, and economic activity will slow down significantly.

If we do not reverse course, this is a story that is not going to end well.

*  *  *

Michael’s new  book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

*  *  *

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FREE SHIPPING OVER $50! Tyler Durden Tue, 04/08/2025 - 20:55

Trump Weighs Drone Strikes On Mexican Cartel Terrorists Amid Major Hemispheric Defense Push

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Trump Weighs Drone Strikes On Mexican Cartel Terrorists Amid Major Hemispheric Defense Push

After two months of U.S. military surveillance flights targeting Mexican drug cartels—with the initial phase focused on gathering signals intelligence (SIGINT) over cartel-controlled territory—a new NBC News report hints at the second phase...

The report cites six current and former U.S. military, law enforcement, and intelligence officials with knowledge of the Trump administration are considering targeted drone strikes against Mexican drug cartels - now designated Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs).

Here's more from NBC News:

Discussions among White House, Defense Department and intelligence officials, which are still at an early stage, have included possible drone strikes against cartel figures and their logistical networks in Mexico with the cooperation of Mexico's government, the sources said.

Still, the administration has made no final decision and reached no definitive agreement about countering the cartels. And unilateral covert action, without Mexico's consent, has not been ruled out and could be an option of last resort, the sources said. It is unclear whether American officials have floated the possibility of drone strikes to the Mexican government.

All six sources said SIGINT operations over Mexico have dramatically risen in recent months. A development readers have understood from the start of February:

Sources noted that Trump officials had pivoted the military, intelligence, and law enforcement resources toward combating the cartels. 

Two guided-missile destroyers have recently been positioned in the region for a "southern border mission"... 

Making sense of it all: Dismantling the command-and-control structures and networks of FTO-designated drug cartels in Mexico is part of a broader mission to secure hemispheric defense. We suspect Mexican banks could be targeted next—similar to the recent anti-money laundering penalty against TD Bank—as part of efforts to clean up the financial system across North America.

This will all come to an end under Trump. 

The main concern for CIA officers or special forces units—typically operating under Joint Special Operations Command (JSOC)—who would likely be tasked with carrying out drone strikes and other targeted operations against cartels, is the risk of creating a power vacuum when cartel leadership is dismantled. The question becomes whether drone warfare is the most effective solution or if hybrid warfare tactics—similar to those used in Syria and other Middle Eastern conflicts—could be utilized to pressure or provoke rival cartels into turning on each other (save AGM-114 Hellfires for somewhere else).

Tyler Durden Tue, 04/08/2025 - 20:30

RFK Jr. Says He Will Tell CDC To Stop Recommending Fluoride In Municipal Water

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RFK Jr. Says He Will Tell CDC To Stop Recommending Fluoride In Municipal Water

Authored by Jeff Louderbeck via The Epoch Times,

Health and Human Services Secretary Robert F. Kennedy Jr. announced on April 7 that he will tell the Centers for Disease Control and Prevention (CDC) to stop recommending fluoridation in municipal water nationwide.

Kennedy also said the HHS will reconvene the Community Preventive Services Task Force, an independent panel composed of public health and prevention experts, “to study and make a new recommendation on fluoride.”

Kennedy disclosed the plans to the Associated Press on Monday during an event in Salt Lake City, where he was joined by Environmental Protection Agency (EPA) Administrator Lee Zeldin as part of a Make America Healthy Again (MAHA) tour.

The EPA said on April 7 that it is reviewing “new scientific information” on potential health risks of fluoride in drinking water. The agency has the authority to set the maximum level of fluoridation in public water systems.

Kennedy is an outspoken opponent of fluoride in water, calling it an “industrial waste” and “dangerous neurotoxin” on the presidential campaign trail last year.

Last month, Utah became the first state to prevent fluoride in public drinking water when Republican Gov. Spencer Cox signed the legislation. Water systems in communities across the state must stop adding the mineral by May 7.

Flanked by Utah legislators, Kennedy praised the state for emerging as “the leader in making America healthy again” on April 7.

“It makes no sense to have it in our water supply. And I’m very, very proud of this state for being the first state to ban it. And I hope many more will come,” Kennedy said.

Utah state Rep. Stephanie Gricius, a Republican and chief sponsor of the bill, said it allows pharmacists to prescribe fluoride for those wanting the mineral’s protection for their teeth.

“I believe in individual choice when it comes to what prescriptions we put into our bodies and fluoride is federally regulated as a prescription,” Gricius told Reuters last month. 

“Community water fluoridation and informed consent, which is foundational to good health care, cannot coexist.”

The American Dental Association (ADA), which supports widespread water fluoridation, wrote in a February letter to Cox that he should veto the bill because it is “in complete opposition” to the organization’s mission.

The ADA said the measure would “take away the most effective, efficient and equitable way for dental disease prevention.”

Lawmakers in Ohio, South Carolina, and Florida have also proposed restrictions on fluoridated water.

Though the CDC’s recommendations are generally followed, state and local governments determine if their communities will add fluoride to water. It cannot surpass the maximum number established by the EPA, which is currently 4 milligrams per liter.

In 2011, the EPA decreased the amount of allowable fluoride in water following a report from the National Academy of Sciences that discovered some thyroid and arthritic symptoms might occur under maximum limits at the time.

“As soon as I was nominated by President Trump as administrator of the EPA, the secretary instantly reached out to start talking about issues that he is so passionate about. And number one on that list was fluoride,” Zeldin said.

Lee Zeldin, then a New York congressman nominated for EPA chief, speaks during his Senate confirmation hearing on Capitol Hill on Jan. 16, 2025. Anna Moneymaker/Getty Images

Federal officials endorsed water fluoridation in 1950 to prevent tooth decay.

Drinking water is the main source of fluoride for Americans, the Associated Press reported. According to CDC data, around two-thirds of the U.S. population consumes fluoridated drinking water.

Zeldin noted that the EPA was exploring scientific studies regarding the potential health risks of fluoride in drinking water to “inform the agency’s future steps” on national standards.

“Secretary Kennedy has long been at the forefront of this issue. His advocacy was instrumental in our decision to review fluoride exposure risks, and we are committed to working alongside him, utilizing sound science as we advance our mission of protecting human health and the environment,” Zeldin said on April 7.

Days before the presidential election last November, Kennedy wrote in a post on X that one of Trump’s first acts in office would be to advise U.S. water systems to remove fluoride from public water.

Last week, the CDC’s Division of Oral Health was eliminated as part of widespread HHS staff cuts.

The division had been tasked with promoting what it deemed the safety and benefits of community water fluoridation.

Medical groups and public health experts have long claimed that fluoride can strengthen teeth and reduce cavities.

Over time, studies have documented potential problems.

A federal judge in California last year ordered the EPA to review the risks of adding fluoride to drinking water.

Since that ruling, several towns and cities have moved to end fluoridation.

Health and Human Services Secretary Robert F. Kennedy Jr., center, speaks during a press conference about Utah's new fluoride ban, food additives, and SNAP funds legislation in Salt Lake City on April 7, 2025. Melissa Majchrzak/AP Photo

On April 7, Kennedy cited a study conducted last year by the federal National Toxicology Program, which found a link between higher fluoride exposure and lower IQ in children. The agency used studies involving fluoride levels at around twice the recommended limit for drinking water.

Kennedy warned that fluoride in water can also cause hyperthyroidism and osteoarthritis, among other conditions. Adding fluoride to water “clearly is doing harm” and is undermining freedom of choice, he added.

“We shouldn’t be demanding that parents accept something for their children and in their homes, that is essentially a medication,” Kennedy said.

Tyler Durden Tue, 04/08/2025 - 20:05

Trump Wannabe Syndrome

Zero Hedge -

Trump Wannabe Syndrome

Authored by Stephen Soukup via American Greatness,

Democrats don’t hate Trump... they want to be him, mimicking his style but failing to connect with voters, exposing their desperation and lack of authenticity...

By now, everyone and his brother is familiar with Trump Derangement Syndrome, that particular pathology that drives liberals and even many conservatives absolutely batty. Not only does Trump drive his opponents and detractors to fits of apoplexy, but he also compels them to make foolish statements and to embrace positions they would otherwise never even consider. During Trump’s first presidency, at the height of the COVID panic, the left openly and ardently dismissed a vaccine as partisan quackery. Joe Biden and Kamala Harris, then running against Trump, openly warned that “his” vaccine was not to be trusted, that they would be hesitant to take it, and that they were sure the experts would not recommend it. As soon as they hit 270 electoral votes, however, that vaccine was suddenly the greatest thing in the history of ever, and you better take it…or else! And while there are good and just reasons to support Ukraine in its war with Russia, it is almost inarguable that the American Left’s obsession with the war, with Ukraine, and with Ukrainian President Volodymyr Zelensky is a byproduct of its belief that Donald Trump is on Putin’s side and, therefore, they must do precisely the opposite. Whatever he likes, they hate. Whatever he supports, they oppose. Whatever he says, they say the opposite. And so it has been for roughly a decade now.

Lately, however, a new Trump-related syndrome has begun to manifest among his opponents, one that is equally potent, equally idiocy-inducing, and equally self-defeating. This new syndrome has been prevalent among Democrats for the last several months at least, but only recently has it clearly distinguished itself from all the Democrats’ other pathologies. The key moment in the diagnosis of this syndrome came just the other night, when Congresswoman Jasmine Crockett (D, TX) spoke at a banquet in Los Angeles and referred to her state’s Governor Greg Abbott as “Governor Hot Wheels.” Abbott, of course, is wheelchair-bound after a freak accident 41 years ago left him paralyzed. Crockett insisted that she meant no offense and adamantly refused to apologize.

In the several days since the incident, critics have pilloried the Congresswoman, who had already been in the news for her brash, combative, and tacky approach to dealing with the second Trump team. Some have said that she deserves to be censured. Others have chalked her stupidity up to the above-mentioned Trump Derangement Syndrome. Still others cheer her on and hope that she remains the face of the Democratic Party for a long time to come, laughing at how terribly her antics play with ordinary voters. All of these folks have valid cases, to some degree or another, yet all seem to have missed the larger point here. Jasmine Crockett isn’t acting like this because she’s mad at Trump or because he’s driven her crazy. She’s acting this way because she admires him, at last subconsciously, and she wants to be like him, to capture some of his winning lightning in Democrats’ losing bottle. 

This isn’t a case of Trump Derangement Syndrome. It’s a case of Trump Wannabe Syndrome (TWS™).

It isn’t just Crockett. Ever since Trump and Vance won last November, Democrats have been swearing, snarling, and trying to be as crude as possible. A few weeks back, in a premeditated publicity stunt, Arizona Senator (and former astronaut) Mark Kelly (D) filmed himself with his Tesla and whined about how he could no longer stand to drive the car. Once upon a time, he said, it felt like a “rocket” to him, but now he didn’t want it around because it was “built and designed by an a**hole,” meaning DOGE boss Elon Musk. “Wow,” he assumed we’d all say, “such tough talk from an otherwise staid and cautious guy. He must be really fed up!” No one actually cared, of course, but Kelly likely didn’t realize that. He’s a Democrat, after all, which is to say that he doesn’t have a whole lot of contact with actual rank-and-file voters.

Therein lies the rub for Democrats. They see Trump out there swearing and using vulgar vernacular and maybe, once in a while, even making fun of disabled people. And then they see him winning, winning big, and winning among their erstwhile constituencies. And they think to themselves, “I can do that too, you know! In fact, I can do it better than he does it!” So, they try. And they fail. And the voters cringe.

What the Democrats don’t understand is that Trump’s appeal has nothing to do with being crass. There is no doubt that he is crass sometimes, but that’s a function of his personality. It just flows from him, and while it may make the cocktail-party set wince a bit, it nevertheless fits him and seems perfectly natural.

Like all supremely successful politicians, Trump has a gift, an uncanny ability to connect with people in a way that transcends politics and ideology. Ronald Reagan had the gift. Bill Clinton had it too. Even Barack Obama, the Condescender-in-Chief, showed flashes of the gift on occasion. 

It’s worth noting that the gift is not something one can fake, learn, or imitate. You either have it or you don’t.

Jasmine Crockett doesn’t have it. 

Mark Kelly doesn’t have it. 

Alexandria Ocasio-Cortez doesn’t have it.

Nancy Pelosi and Chuck Schumer sure as heck don’t have it. 

And the more they try to fake it, the more grotesque and cringeworthy they appear.

Love him or hate him, Donald Trump represents something extraordinary in American politics. His connection to average voters, in spite of his vast fortune and privileged life, is as remarkable as it is inexplicable. His Democratic opponents have lost their ability to connect to average folks through policy and rhetoric, and they want desperately to recapture what they once had. Rather than put in the hard work of listening to voters and resisting special interest groups, however, they seek a quick fix. 

They seek what Donald Trump has. They don’t hate him. They want to be him when they grow up.

Tyler Durden Tue, 04/08/2025 - 19:15

Will Trump End The Fed Or Put Himself In Charge Of It?

Zero Hedge -

Will Trump End The Fed Or Put Himself In Charge Of It?

Authored by George Ford Smith via The Mises Institute,

On February 18, 2025 President Trump issued an executive order titled, “Ensuring Accountability for all Agencies,” in which he says,

…previous administrations have allowed so-called “independent regulatory agencies” to operate with minimal Presidential supervision. These regulatory agencies currently exercise substantial executive authority without sufficient accountability to the President, and through him, to the American people.

This is a good idea. As Americans, ruled by an elite in Washington, we would really like to know who’s doing what to whom, why, and for how long they’ve been doing it. Most importantly, where they’re getting the money to do it. Money—however thieving means the bureaucrats can get it—is their god, without which they wouldn’t exist.

The problems are enormous for such an undertaking, the biggest one being the issue of trust. Who are you going to believe? Even if the appointees in Trump’s administration are trustworthy individuals, by virtue of their appointments they’ve been coaxed into a corrupt social apparatus. It is corrupt because it is funded entirely on stolen wealth, with the theft not merely getting a pass but hailed far and wide as the bedrock of civilization.

Arguments over taxation almost always center on rates and who should pay, never on taxes as such. But what are they exactly? Taxes are “a sum of money demanded by a government . . .” (infoplease.com). At least they’re honest; taxes are demands. But then we find this: Taxes are “a contribution for the support of a government . . .” (ahdictionary.com). A contribution. As the former Third Reich minister of propaganda once remarked, “A lie told once remains a lie but a lie told a thousand times becomes the truth.”

The bigger lie is the one not told—the inflation tax—because it is still largely a mystery to the public.

As it stands, by an implicit moral code of Western Civilization found in the Bible and in the works of Aquinas, Locke, Adam Smith, Paine, Rothbard, and many others, government, by its nature, is and always has been inimical to human well-being.

Thus, in ensuring accountability, Trump’s team is doing the best it can in an environment hostile not only to him personally but to the principles of good faith and trust. In reading the executive order we find that,

…all executive departments and agencies, including so-called independent agencies, shall submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President before publication in the Federal Register.

Superficially, it sounds good but wait—it said “all.” Does he mean it? “This order shall not apply to the Board of Governors of the Federal Reserve System or to the Federal Open Market Committee in its conduct of monetary policy.” We think of the president as the Chief Executive, but a hands-off-the-Fed approach tells us otherwise.

For the moment the Fed might be untouchable. But its creator was the state, and all it takes is courage to do away with it, which is why it’s been wreaking havoc for over a century.

According to a March 6, 2025 article in International Banker, Trump’s allies have devised a plan that would oust current Fed chair Jerome Powell before his term is up in 2026 and,

…give the US president a role in monetary-policy making. The new chair would regularly seek Trump’s views on interest-rate policy and then negotiate with the FOMC to steer policy on the president’s behalf. This would be a radical change from the current practice whereby the US president is not involved in monetary policy and is not even expected to comment on the decisions made by the FOMC.

Given Trump’s personality—variously described as impulsive, charismatic, and resilient—it’s almost a given that a plan such as this would effectively make him the Chairman of the FOMC. Trump wants lower interest rates to go “hand-in-hand” with his tariffs, whether the free market wants them or not.

As of late February, “Interest-rate futures contracts are now pricing in a more than 70% chance that the Fed will reduce its policy rate by a quarter of a percentage point at its June meeting, to a range of 4.00%-4.25%, and cut it again as soon as September.” In his address to Congress on March 4, 2025 Trump was happy about the current trend, saying, “And today, interest rates took a beautiful drop. Big, beautiful drop. It’s about time.”

Apparently, Trump is unaware of the Austrian School position that “easy money” causes booms that inevitably show up in busts, such as the two major disasters (1930s and 2008), and that no learned bureaucracy such as the FOMC or even Trump personally can know what the interest rate should be, which is why it should be left to market forces exclusively.

Meanwhile, two Republican politicians—Utah Sen. Mike Lee and Kentucky Rep. Thomas Massie—are introducing legislation on March 6, 2025 to “dissolve the Board of Governors of the Federal Reserve System and each Federal Reserve bank with a one-year timeframe,” and repeal the Federal Reserve Act of 1913. Said Mike Lee:

The Federal Reserve has not only failed to achieve its mandate, it has become an economic manipulator, directly contributing to the financial instability many Americans face today. We need to protect our economic future, end the monetization of federal debt that fuels unchecked federal spending, and put American money on solid ground. We need to end the Fed.

At this point, it sounds like Trump wants to be a one-man FOMC while significant others who supported him want to do away with the Fed altogether. Is it a fight between tariffs/low interest rates versus free markets? Or is Trump clever enough to get one now and the other later?

In 1962, Mises wrote Planning for Freedom—a collection of 12 essays and addresses demonstrating the futility of government interference with the market. Let’s hope someone sends a copy to Trump.

Tyler Durden Tue, 04/08/2025 - 18:25

Netanyahu Says Iran Should Blow Up Own Nuclear Sites Under US Supervision

Zero Hedge -

Netanyahu Says Iran Should Blow Up Own Nuclear Sites Under US Supervision

Israeli Prime Minister Benjamin Netanyahu said Tuesday that if US 'indirect' talks with Iran over its nuclear program fail, then a military attack becomes 'inevitable'. He issued the warning fresh off his Monday Oval Office visit with President Trump, wherein the US leader announced for the first time that Saturday talks with the Iranians will be hosted in Oman. 

Netanyahu said in the new video statement, "“We agree that Iran will not have nuclear weapons. This can be done in an agreement, but only if... they go in, blow up (Iran's) facilities, dismantle all the equipment, under American supervision." And he added: "If talks drag on, then the military option becomes inevitable." Watch the Tuesday video message below:

Trump himself appeared to allude to this either/or scenario, or ultimatum to Tehran, when he said Monday, "I think everybody agrees that doing a deal would be preferable to doing the obvious. And the obvious is not something that I want to be involved with, or frankly that Israel wants to be involved with, if they can avoid it.”

Trump then admitted, "But it's getting to be very dangerous territory, and hopefully those talks will be successful."

And after alluding to the worst case scenario, he offered a bright spot: "We’re having direct talks with Iran and they’ve started, it'll go on Saturday. We have a very big meeting and we’ll see what can happen."

Netanyahu's interesting description of blowing up or exploding Iran's nuclear sites appears akin to what the US under George W. Bush offered Libya's Muammar Gaddafi. The strongman had famously 'come in from the cold' and gave up all WMD programs in return for an end to global isolation and Western sanctions.

Bush had at the time reportedly warned Gaddafi that "either you get rid of your weapons of mass destruction or [the United States] will personally destroy them and destroy everything with no discussion." In the end Gaddafi did just that, which didn't get him too far.

This seems to be the rhetoric that Netanyahu is echoing now. It should be remembered, however, that Gaddafi was still toppled due to US-NATO military intervention in 2011. Again, this after he gave up his advanced weapons program, leaving Libya more vulnerable to West-sponsored regime change.

A Maxar closeup satellite imagery of the Parchin Military Complex in Iran from Nov. 2022 Axios/Maxar Technologies

Meanwhile journalist Ken Klippenstein has pointed out that the Pentagon has prepared for Trump to go berserk on Iran if he gives the order...

In the largest single deployment of stealth bombers in U.S. history, the Pentagon has sent six B-2 “Spirit” aircraft to Diego Garcia in the Indian Ocean.

The long-range bombers, which are uniquely suited to evade Iranian air defenses and can carry America’s most potent bunker busting weapons, flew in from Missouri last week in a little noticed operation.

The B-2s carry not just bombs, but a message for Iran: “do you see our sword?,” as one retired general told Newsmax this week.

If this happens it would likely be a highly unpopular move among the American people and Trump voters, given he is supposed to he the peace president, and starting another 'war of choice' in the Middle East is the last thing Americans want.

Tyler Durden Tue, 04/08/2025 - 18:00

Why Doubts Over The Fed's Swap Lines Are Such A Big Deal

Zero Hedge -

Why Doubts Over The Fed's Swap Lines Are Such A Big Deal

Over the last few days, we have noted some cracks/leaks (choose your analogy) appearing in the plumbing of the market.

Cross-currency basis swap spreads started to blow out...

...suggesting a huge and sudden demand for US dollars.

Additionally, SOFR swap spreads hit record wides...

...suggesting some credit risk fears building in the markets.

These two events stabilized a little today as markets rallied, but it got us thinking if there is something else going on, and that is where Robert McCauley comes in, wirting an op-ed for The Financial Times explaining why doubts over the Fed’s dollar swap lines are such a big deal.

Kindleberger’s Trap is the danger that a fading hegemon lacks the ability but the ascendant one lacks the will to supply the world economy with vital public goods — such as a reserve currency. In the 1930s, the Bank of England lacked the ability to continue to serve as international lender of last resort, and the ascendant Federal Reserve lacked the will to do so. 

As a result, crisis spread from Austria to Germany and Britain and ultimately reached the US, turning the post-1929 slump into an era-defining economic collapse. The Kindleberger Trap led to “the world in depression”, as Charles Kindleberger titled his seminal book. 

This is why worries over whether the Federal Reserve will continue to supply dollars to overseas central banks at times of financial strife are such a big deal. As Reuters reported last month: 

Some European central banking and supervisory officials are questioning whether they can still rely on the U.S. Federal Reserve to provide dollar funding in times of market stress, six people familiar with the matter said, casting some doubt over what has been a bedrock of financial stability. 

The sources told Reuters they consider it highly unlikely the Fed would not honour its funding backstops — and the U.S. central bank itself has given no signals to suggest that. 

But the European officials have held informal discussions about this possibility — which Reuters is reporting for the first time — because their trust in the United States government has been shaken by some of the Trump administration’s policies. 

These concerns are warranted, both in light of the Trump administration’s distaste for America’s traditional alliances and the centrality of the Fed’s swap lines to global financial stability. 

As Deutsche Bank’s chief FX strategist George Saravelos highlighted in a recent report on the topic, doubts over the Fed’s willingness or ability to step up when needed on is a “nuclear button” for the dollar’s future: 

Ultimately, a withdrawal of the Fed as the international lender of last resort is equivalent to a suspension of the dollar’s role as the safest of global currencies. Doubts about a commitment from the Fed to maintain dollar liquidity — especially against major allies — would accelerate efforts by other countries to reduce their dependence on the US financial system. It would ultimately lead to lower foreign ownership of US assets and a broad-based weakening of the dollar’s role in the global financial system.

In the 2008 and 2020 dollar panics, the Fed wisely told 14 central banks that the buck starts here. Through official swap lines the Fed could extend its credit to each central bank against domestic currency as collateral. 

Each central bank could in turn lend the dollars to banks in its market against domestic collateral.

Reaching outstandings as high as $598bn in 2008 and $449bn in 2020, the swaps succeeded in stabilising global dollar markets. The amounts were not small, but offshore dollar lending — both on- and off-balance sheet — is measured in the tens of trillions of dollars. Thus, with pennies on the dollar lent and repaid with interest, co-operating central banks calmed these potentially destructive dollar panics. 

The US also won from the Fed’s international provision of dollars. Crucially, the swaps reversed market-driven interest rate hikes on Libor-priced US corporate loans and mortgages, which in turn would have hammered US jobs and consumption. As Saravelos pointed out: 

Had the Fed not stepped in during the 2008/9 financial crisis and Covid pandemic, the reserves of foreign central banks and international lenders like the IMF would unlikely have been sufficient to meet global dollar demand, leading to an even greater surge in dollar borrowing costs than occurred at the time, defaults, and potentially systemic implications for the global financial system. 

What if a crisis like 2008 or 2020 happens and the Fed does not swap dollars? Central bankers would not be doing their jobs if they weren’t asking this question. 

If it came to such a scenario of “politicise[d] . . . recourse to the dollar swap lines,“ the Fed would have the ability but not the will, as in 1931. Any other single central bank might have the will but not the ability. 

However, central bankers could form a dollar coalition of the willing. 

The central fact is that the 14 central banks that had standing and temporary Fed swaps in 2008 and 2020 collectively hold lots of dollars. Their collective holdings of US safe assets amounted to an estimated $1.9tn at the end of 2021. (Their total foreign exchange reserves at the end of 2024 were about double that sum.) That $1.9tn is big money. It’s triple the previous maximum drawing on the Fed swap lines in 2008, and four times larger than the peak 2020 usage. 

© Deutsche Bank 

Leadership could arise among the Fed’s standing swap partners, the European Central Bank, Bank of Japan, Swiss National Bank, Bank of England, and Bank of Canada. The ECB and BoJ were the largest users of the Fed swap lines in 2008 and 2020, respectively. During the 2023 run on Credit Suisse, the SNB acquired unique experience in tapping the New York Fed for $60bn against US Treasury collateral under the FIMA (foreign and international monetary authorities) repo facility.

The coalition could enlist the Bank for International Settlements for technical support as agent as European central banks did in 1973-95. Or the BIS could serve as intermediary, as it did when the New York Fed lent dollars through the BIS to offshore banks in the 1960s to prevent funding crunches. 

However, there is a major wrinkle: the $1.9tn is invested, and a crisis calls for cash dollars. In a world where the Federal Reserve refuses to allow access to its swap lines, would the New York Fed continue to provide same-day FIMA repo funding against Treasuries held in custody? 

If it did, the coalition could arrange to access hundreds of billions of dollars in same-day funds. If the Fed did not, then it would end up providing ad hoc funding. 

Without the FIMA backstop, heavy central bank sales of US Treasuries would rock the US bond market. Such selling could prod the Fed into the market as buyer of last resort — as in March 2020, before the FIMA repo was introduced. 

Without the FIMA backstop, the Fed similarly would have to cap market repo rates if central banks sought to repo Treasuries for cash in size. However, the recent benchmark rate shift from dollar Libor to repo-based Sofer means that the Fed’s own domestic monetary transmission requires well-behaved repo rates. 

One way or another, the coalition would need to work with the Fed to manage any “dash for cash.” Even a large pool of dollar reserves would not stack up to “whatever it takes” Fed swaps. Limits excite. It may be, as Eurosystem sources grimly noted to Reuters, that “there is no good substitute to the Fed.”  

Nonetheless, a dollar coalition of the willing could pool trillions of dollars to backstop global dollar funding with no more than self-interested Fed help. An inferior lender of last resort beats no lender of last resort.

Tyler Durden Tue, 04/08/2025 - 17:40

"Navarro Is Truly A Moron": Musk Slams Trump Trade Czar In Ongoing Tariff Feud

Zero Hedge -

"Navarro Is Truly A Moron": Musk Slams Trump Trade Czar In Ongoing Tariff Feud

Elon Musk and Trump trade adviser Peter Navarro don't like each other.

It all started on Saturday when Musk - who's not a fan of the Trump tariffs, responded to a video on X of Navarro defending how the Trump administration calculated its tariffs on various countries' goods (with crayons?), suggesting that Navarro's "PhD in Econ from Harvard is a bad thing, not a good thing," adding in a now-deleted tweet that Navarro "ain't built shit."

When asked by Fox News on Sunday about the beef, Navarro said the relationship is "fine," adding "there's no rift here."

Yet, Navarro still hit back -  saying "Elon, when in his DOGE lane, is great," adding that the billionaire "sells cars" and is "simply protecting his own interest" by opposing him and Trump's tariffs "as any business person would do."

Then on Monday, Navarro said "We all understand in the White House (and the American people understand) that Elon's a car manufacturer. But he's not a car manufacturer — He's a car assembler," adding "In many cases, if you go to his Texas plant, a good part of the engines that he gets (which in the EV case are the batteries) come from Japan and come from China. The electronics come from Taiwan..."

"what we want — and the difference is in our thinking and Elon's on this — is that we want the tires made in Akron. We want the transmissions made in Indianapolis. We want the engines made in Flint and Saginaw. And we want the cars manufactured here," Navarro continued.

To which Musk replied that Navarro is "truly a moron," adding "What he says here is demonstrably false."

"Tesla has the most American-made cars. Navarro is dumber than a sack of bricks," Musk continued, linking to a Kelly Blue Book report, and adding "By any definition whatsoever, Tesla is the most vertically integrated auto manufacturer in America with the highest percentage of US content."

Musk then called him "Peter Retarrdo":

While Tesla is the most 'American' manufactured car, Musk acknowledged last month that "The tariff impact on Tesla is still significant."

Indeed...

NHTSA Filing:

Indeed, according to a late 2024 NHTSA filing of which vehicles contain the most North American parts, Tesla's vehicles were found to contain the most.

Via Not a tesla app

Meanwhile, a Ford F-150 Lightning contains just 29% North American parts.

*  *  *

Best sellers at ZH Store last week:

FREE SHIPPING OVER $50!

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Tyler Durden Tue, 04/08/2025 - 17:35

Record-Breaking $1 Trillion Defense Budget: Trump, Hegseth Say It's Happening

Zero Hedge -

Record-Breaking $1 Trillion Defense Budget: Trump, Hegseth Say It's Happening

With much of the globe and American public focused exclusively on tariff mania, President Trump as well as Secretary of Defense Pete Hegseth unveiled massive news on Monday, which would have normally made a bigger impact in headlines.

The Pentagon will soon have its first $1 trillion budget. President Trump said while hosting Israeli Prime Minister Benjamin Netanyahu at the White House, "Nobody’s seen anything like it. We have to build out military, and we’re very cost-conscious, but the military is something we have to build, and we have to be strong."

But ironically the announcement comes as the administration has been aggressively seeking to root out government waste and excess spending. The reality is that for decades both sides of the aisle have allowed defense spending to balloon unchecked. That looks to continue, and the big winner remains the military-industrial complex even amid a DOGE crackdown.

Hegseth too made the announcement on X while sharing the video of Trump praising the future one trillion dollar budget. "Thank you Mr. President! COMING SOON: the first TRILLION dollar [Defense Department] budget," the Pentagon chief said.

Even though the Department of Defense (DoD) has never had an official budget which reached that figure, it remains the actual cost of total US military spending has for several years running actually exceeded $1 trillion.

Biden's 2025 National Defense Authorization Act (NDAA) totaled $895 billion, so a trillion appears the next natural progression, given the out of control nature of defense spending.

Commenting on a possible timeline for the 2026 budget rollout, Breaking Defense writes:

Exactly when the FY26 budget will drop, or what shape it will take, remains unclear. There has been talk of a “skinny budget” with few details coming first, and rumors that May is when budgets will be officially released, but nothing confirmed from the White House or Pentagon.

In a note to investors, TD Cowen analyst Roman Schweizer wrote that “based on last year’s Green Book, we assume this means a $50B increase for 050 National Defense, which was projected at $951B for the FY26 request.”

The Washington Post via Getty Images

Critics of US foreign policy have ripped Trump for the move. For example, independent geopolitical analyst Tim Anderson writes, "Add another trillion to the US debt. None of the budget cuts in Washington have reached the Pentagon, which does precisely nothing to 'defend' the USA. The US military exclusively interferes in other countries."

Tyler Durden Tue, 04/08/2025 - 17:20

Micron Prepares To Slap Tariff-Related Charge On Customers 

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Micron Prepares To Slap Tariff-Related Charge On Customers 

President Trump's targeted reciprocal tariffs on countries with which the U.S. runs its largest trade deficits will take effect at 12:01 a.m. ET on Wednesday. In anticipation of the next round of tariffs, U.S. memory chipmaker Micron Technology plans to impose a tariff surcharge on customers.

Four sources familiar with the situation told Reuters that these incoming tariffs have prompted Micron to issue a surcharge on some products starting Wednesday. 

Here's more color:

The company notified its customers in a letter that while Trump's announcement last week exempted semiconductors, which account for part of Micron's portfolio, the tariffs applied to memory modules and solid-state drives (SSDs), the sources said. Those products, used to store data in various products from cars to laptops and data center servers, would now be subject to a surcharge, they said.

Micron's overseas factories are spread out across Asia, including China, Taiwan, Japan, Malaysia, India, and Singapore, according to the latest trade data. 

Bloomberg data maps out Micron's suppliers and customers...

By midnight, these countries will be hit with some of the highest of Trump's so-called "Liberation Day" tariffs. Several of them—including countries deeply embedded in Micron's supply chain—face double-digit tariff rates between 10% and 34%. This is on top of Trump's unilateral 10% tariff on all imports for all countries on Saturday. 

Data from Goldman's research desk... 

Reuters quoted a top-level executive at an Asian NAND module manufacturer as saying that a similar approach to Micron will be taken for U.S. customers this week. 

"If they don't want to bear the taxes, we cannot ship the products. We cannot be held accountable for the decisions made by your government," the executive said, adding, "With this kind of tax rate, no company can generously say, 'I'll take on the burden.'"

Tyler Durden Tue, 04/08/2025 - 16:40

The Five-Year Anniversary Of COVID Lockdowns

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The Five-Year Anniversary Of COVID Lockdowns

Authored by Jennifer Sey via The Brownstone Institute,

We are just at about the 5-year anniversary of lockdowns. In the Bay Area, where I lived at the time that Covid took over the hysterical media’s every utterance, lockdowns went into effect on March 16, 2020. 

The official line now is that lockdowns in California and the Bay Area continued until mid-May. 

The reality is they went on much longer. 

Public schools were closed until September 2021. 

Playgrounds in San Francisco were closed until October 2020. Let that sink in. Outdoor playgrounds were closed for 7 months. Once opened, they closed again, then reopened. While open (in the beginning) these were the rules: you could only stay for 1/2 hour, no eating, no drinking water (because 2-year-olds would need to remove their masks to do so), line up for the activities/climbing structures, kids (toddlers!) always 6 feet apart, if your child cries you have to leave (they might spew droplets and Covid). Sounds like fun, right?

Basketball hoops were boarded over and stayed that way for well over a year. Some longer because they were just forgotten about.

Skate ramps at skate parks were filled with sand.

Restaurants didn’t open until September 30. 

They’d open, then close again, then open again, at the whim of the red/orange/green system implemented by the city’s public health bureaucrats. 

Once the city’s parks opened, people were forced to sit in chalk circles to maintain distancing.

It was truly the dumbest time. 

I could go on. But I won’t. 

Along with all of these constantly changing ridiculous rules, the citizens of San Francisco were encouraged to rat out their neighbors through a special 311 hotline set up for precisely that purpose. See something say something 2020 version had all the virtue-signaling and intrigue of 2001’s launch campaign, but this time people were encouraged to turn in their friends and neighbors rather than suspected terrorists. 

See someone entering a neighbor’s home that doesn’t live there? Text the number! See people from different households mixing outside at the park, text the number! See someone maskless or a child playing at a playground with yellow caution tape around the swings? Text the number! And sure enough, a police officer who couldn’t be bothered to help with the heroin addict vomiting on your doorstep would be happy to interrogate you about who was inside your apartment. And ticket you if you dared exercise beyond a one-mile radius outside your home. 

And people did it! The citizenry of San Francisco took great pride in turning in their friends and neighbors for perceived violations. And I learned that the vast majority of people I’d considered “my people” for decades would have been snitches for the Stasi and pointed directly to where Anne Frank and her family hid in Amsterdam. 

As I’ve written about extensively, my husband and I resisted and shouted and raged about all of this from day 1. And we paid a heavy price. We left San Francisco in February 2021, a city I’d lived in and loved for over 30 years. We lost friends and I lost my professional reputation as one of the best in the business — a reputation that I’d spent decades building. And despite my rightness about it all, my good standing has not been restored. 

I won’t forgive these psychopaths/pathetic cowards/aggressive virtue-signaling conformists. Ever. 

And now, on the eve of the 5-year anniversary of the lockdowns, there is a book about to come out about how wrong it all was. Sort of. 

By this account/review of the book, public health officials failed to follow pre-pandemic guidelines. And not only that, they censored and silenced anyone who might have reminded the public of that. People like Fauci — Fauci first and foremost, in fact — squelched any dissent, took down anyone who challenged (who could forget the “swift and devastating takedown” of Jay Bhattacharya?) and the press and academics failed to hold them to account. 

You might think I’d be happy that a book like this is coming out. I’m not. 

I find it enraging, in fact. According to the review in the Boston Globe, experts betrayed the actual science. And the system failed. 

But the reviewer says the authors are a bit “overwrought” in their telling of what happened. And they offset their critique with a series of “Yeah buts…” such as Trump said we should all drink bleach. He didn’t. Their list of yeah buts is short but meant to leave room for “Well, we did the best we could given the Trumpian brand of crazy.” 

In my view, the book leaves way too much room for an Emily Oster-type view that We need a pandemic amnesty because we all did the best we could. 

The authors themselves admit to bleaching their groceries. Is there any indictment of themselves, or do they train their ire only at Fauci? A little introspection about how wrong they were would be nice and go a long way in giving permission to others to do the same. But I doubt they do that (I’ll admit I’ve not read it, only this review).

It reminds me of what USA Gymnastics did regarding Larry Nassar, the infamous pedophile who abused over 500 athletes. At first, they denied it. When they couldn’t any longer, they did the whole “one bad apple” defense. He’s gone! We did our part! The sport is perfect without him! No. The sport is toxic. The training environment is abusive. And Nassar was able to abuse for three decades because the whole thing was rotten to the core, and the institutions (USAG, USOPC) covered for him. 

Covid was not a one-man problem. And Fauci being out of a job doesn’t solve what went wrong. 

And the fact is, the mainstream view is still largely centered on the idea that the Covid alarmists were mostly right. Sure schools could have opened sooner, but other than that, Fauci and his ilk were right about everything. This view is best represented by the alarmist to beat all alarmists, David Wallace-Wells with his New York Times piece just a few weeks ago called: The Covid Alarmists Were Closer to the Truth than Everyone Else. 

Wallace-Wells bemoans the current situation that “Covid minimizers and vaccine skeptics now run the country’s health agencies, but the backlash isn’t just on the right. Many states have tied the hands of public health authorities in dealing with future pandemic threats, and mask bans have been put in place in states as blue as New York.”

To that I say: Thank fucking goodness. 

But I do not trust it won’t happen again. 

Wallace-Wells is screeching that it must, in fact, only harsher, longer, “better.”

We’ve seen the attempt at a similar media/public health panic with Bird flu. And before that, monkeypox. We’ve seen schools closed for all manner of reasons, from migrants being housed in public schools to eclipses and “bad air.” School closures are a “tool in the tool box” now, and it’s not a good one. 

The alarmists continue to insist that we need to do better next time — lock down harder and sooner and implement more censorship. And there have been no apologies. None to people like me (not to be too self-centered, but you’ll pardon using me as an example) who lost our lives as we knew them. For saying everything just a few years too soon. We are not un-canceled. We are still heretics who may have been right but for all the wrong reasons. And the Faucis of the world may have gotten some stuff wrong but for all the right reasons. They are still the good people, and we are still the bad ones in the court of public opinion and the mainstream media. 

There are glimmers of hope. Dr. Jay Bhattacharya is one. He was one of the authors of the Great Barrington Declaration in October 2020 which advocated for basic principles of pre-pandemic planning: Don’t shut down the world; protect the vulnerable and let everyone else live their lives; don’t shut down the economy for it will lead to crushing inflation (correct) and starvation in third world countries; it will lead to child abuse, and child marriage and decimation of the most vulnerable. Correct on all counts. 

As Dr. Jay has said: lockdowns were trickle-down epidemiology and “the lockdowns, if they were to benefit anybody, [. . .] benefited members of the laptop class who actually had the wherewithal to stay home, stay safe while the rest of the population served them.” Basically, lockdowns benefitted the rich and ruined the poor and the vulnerable, the class they were purported to save. 

Jay was right. And now he will be the director of the National Institutes of Health, the organization that orchestrated the swift and devastating takedown of him in 2020. It does feel like a bit of redemption for us all. 

Notably, in his confirmation hearing, he was not asked a single question by the Democrats about his views on lockdowns, which were formerly considered “contrarian.” A win? I’d say so. They knew this line of questioning was a loser. 

But I’m left feeling very little comfort. 

People like me have received no apology. We are not released from our canceled status. We are left to make our own way, still ousted from the mainstream despite having been right. 

And the book blames Fauci to shield everyone else in the machine from blame. And Fauci is gone now, so it would seem to suggest we’re safe. 

I’m left with the feeling that we have not scratched the surface of all the blame that must be laid down. Not out of vengeance but accountability. And as a way to clearly signal: These people failed to do their jobs. This can never happen again. 

The vast majority of people who led lockdowns at the state and local level are still in their jobs despite having failed miserably. The vast majority of journalists who spread fear and failed to hold power to account are still in their roles (Apoorva Mandavilli?). The people who made sure schools would remain closed are still in power — Randi Weingarten at the top of that list. And now Randi is moaning about the harms to poor children if the Department of Education is shuttered. She certainly didn’t care about poor children back in 2020-2021. She is a politician and a hypocrite of the highest order. 

We are not done. Not by a long shot. What went wrong was EVERYTHING. And I, for one, won’t stop shouting about it until that is acknowledged, apologized for, and until those people who did the wrong thing over and over again are defanged and declawed.

Republished from the author’s Substack

Tyler Durden Tue, 04/08/2025 - 16:20

Appeals Court Clears Way For DOGE To Access Data At 2 Agencies

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Appeals Court Clears Way For DOGE To Access Data At 2 Agencies

Authored by Jack Phillips via The Epoch Times,

A divided federal appeals court panel on April 7 ruled that the Department of Government Efficiency (DOGE) can access records in two federal agencies, reversing a lower court order.

In a 2–1 opinion, the U.S. Court of Appeals for the Fourth Circuit panel lifted the injunction imposed by U.S. District Judge Deborah Boardman in Maryland that barred DOGE from accessing personal records in the Education Department and the Office of Personnel Management (OPM).

The Virginia-based appeals court also voted 8–7 against taking up the issue “en banc,” in which all judges on the court would decide.

Boardman’s order in March also restricted DOGE’s access to the Treasury Department. An injunction issued by another district judge in New York that blocked the organization’s access to Treasury data remains in effect.

Groups including the American Federation of Teachers sued to prevent DOGE personnel from reviewing data such as Social Security numbers, birth dates, addresses, income, citizenship status, and student loans for millions of Americans. They argued that DOGE’s access would violate federal laws including the Privacy Act of 1974.

On March 24, Boardman ruled that DOGE could not access data within the three agencies and barred agency officials from handing over any personal identifying information to DOGE.

“Enacted 50 years ago, the Privacy Act protects from unauthorized disclosure the massive amounts of personal information that the federal government collects from large swaths of the public,” Boardman wrote.

“Those concerns are just as salient today. No matter how important or urgent the President’s DOGE agenda may be, federal agencies must execute it in accordance with the law. That likely did not happen in this case.”

Individuals affiliated with DOGE were given access to systems that contain personal information, including Social Security numbers, banking information, home addresses, dates of birth, and other data such as citizenship and marital status, according to Boardman’s order.

The Department of Justice (DOJ), arguing on behalf of DOGE and the sued agencies, said that the plaintiffs lack standing to file a lawsuit and are not likely to succeed on the merits of their legal challenge.

“Plaintiffs lack standing because they have not suffered any cognizable ... injury” and have engaged merely in speculation that “has not shown that they likely face imminent irreparable harm,” government attorneys argued.

“[The] equities and the public interest support permitting the government to exercise its lawful authority to hire employees and give those employees access to systems as required for their job duties,” the DOJ attorneys said.

The appeals court’s April 7 order sided with the DOJ, agreeing that the plaintiffs appear to lack standing.

“I am deeply skeptical that the district court remained within its discretion when finding that the plaintiffs were likely to prevail. ... and with such certainty that they were likely to succeed overall,” Fourth Circuit Judge G. Steven Agee wrote for the majority.

“In light of the plaintiffs’ multiplicative problem, the government has made a strong showing that it will prevail on the merits.”

Created by President Donald Trump via executive order, DOGE is tasked with downsizing the federal government and finding fraud, waste, and abuse.

The organization has faced several lawsuits in recent months. 

A separate federal judge in March blocked DOGE’s access to Social Security Administration databases on similar privacy grounds.

“The DOGE Team is essentially engaged in a fishing expedition at SSA, in search of a fraud epidemic, based on little more than suspicion,” U.S. District Judge Ellen Hollander wrote on March 21.

Meanwhile, some courts have ruled in favor of the Trump administration and DOGE. 

In late March, an appeals court lifted an order blocking DOGE from recommending cuts to the U.S. Agency for International Development, which the administration has sought to break up.

Tyler Durden Tue, 04/08/2025 - 15:50

IRS To Provide Illegal Immigrants' Data To ICE Under New Agreement

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IRS To Provide Illegal Immigrants' Data To ICE Under New Agreement

The IRS has reached an agreement with the Department of Homeland Security (DHS) to share the personal information of illegal immigrants who have filed tax returns.

The Internal Revenue Service Building is seen, Feb. 20, 2025 in Washington.
Tasos Katopodis/Getty Images

According to a new court filing, "DHS can legally request return information relating to individuals under criminal investigation, and the IRS must provide it," meaning that ICE would be able to check the names and addresses of illegal immigrants against IRS taxpayer records.

"Each request will attest that [redacted] information will only be used by officers and employees of ICE solely for the preparation for judicial or administrative proceedings or investigation that may lead to such proceedings," reads the memorandum of understanding (MOU).

According to a Treasury Department official, "The bases for this MOU are founded in longstanding authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals. "After four years of Joe Biden flooding the nation with illegal aliens, President Trump's highest priority is to ensure the safety of the American people."

Consistent with IRS privacy protection laws, specifically Internal Revenue Code Section 6103, the Treasury Department is committed to protecting the taxpayer data of lawfully abiding persons, the official said.

However, Section 6103 has a criminal exemption. This exemption obligates the IRS to assist law enforcement in the pursuit of criminals and will be used against any migrant who has overstayed for more than 90 days as part of the carveout. -ABC News

Border Czar Tom Homan tells Axios that the deal is about protecting social security from illegals who are collecting benefits using social security numbers.

"This is about protecting social security for American people," he said, adding "Illegal aliens use the social security numbers of American people everyday."

A senior DHS official told ABC News that under the Trump administration, "the government is finally doing what it should have all along: sharing information across the federal government to solve problems."Information sharing across agencies is essential to identify who is in our country, including violent criminals, determine what public safety and terror threats may exist so we can neutralize them, scrub these individuals from voter rolls, as well as identify what public benefits these aliens are using at taxpayer expense."

"Biden not only allowed millions of illegal aliens to flood into our country -- he lost them due to incompetence and improper processing," the official said. "

According to the Bipartisan Policy Center, illegal immigrants have contributed $25.7 billion in Social Security taxes using borrowed or fraudulent Social Security numbers.

Tyler Durden Tue, 04/08/2025 - 15:25

New Research Confirms Standardized Tests Are Predictor Of 'College Success - Without Bias'

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New Research Confirms Standardized Tests Are Predictor Of 'College Success - Without Bias'

Authored by Lauren Boyer via The College Fix,

A research team is on the cusp of releasing a new study that may contribute to the discussion about whether standardized test scores should have a place in the college admissions process.

An abstract for the working paper, published on the National Bureau of Economic Research website, states the researchers analyzed the relationship between students’ standardized test scores, their grades in high school, and grades in college.

“Standardized test scores predict academic outcomes with a normalized slope four times greater than that from high school GPA, all conditional on students’ race, gender, and socioeconomic status,” the researchers wrote.

Some universities recently began requiring SAT or ACT scores from applicants after dropping the requirement during the COVID-19 pandemic. Some scholars advocated for the testing requirement to be removed permanently – bringing up issues like systemic bias and racial inequality.

But the new research indicates that standardized tests are not biased and may even have the opposite effect.

Lead author Professor John Friedman, who teaches economics at Brown University, shared with The College Fix some of the details of his team’s work.

Regarding the research sample, Friedman said the team used data from first-year students at “multiple Ivy-plus colleges.”

“The choice to look at first year scores was entirely driven by data, in that we were able to collect comparable data on first year grades from our partner institutions but not for longer-term grades,” Friedman explained to The Fix in a recent interview. “We’ve looked at grades in later years of college within individual schools, and the broad pattern (test scores are predictive, high school GPA is not) remains.”

“In a separate paper, I have also shown that test scores but not high school GPA predict students’ post-college outcomes, including earning higher incomes, attending elite graduate schools, and working at prestigious firms,” the professor said.

“So while this is a limitation for this specific paper, I’m not concerned that the effects would be very different if we looked at longer-term outcomes,” he said.

As for the study’s findings on “race, gender, and socioeconomic status,” Friedman told The Fix:

“We are measuring the predictive power of both test scores and GPA among students with the same race, gender, and socioeconomic status … Importantly, this is not about comparing test scores and grades between students from different racial group groups, genders, or classes.”

Adam Kissel, a visiting fellow in education policy at the Heritage Foundation and former U.S. Department of Education official, also spoke with The Fix about the implications of Friedman’s team’s findings.

“Standardized tests designed to test college aptitude actually do predict college success—without bias,” Kissel wrote recently on X, linking to the working study.

In a recent interview with The Fix, Kissel elaborated, “This study shows that standardized tests are highly predictive of college success at more selective colleges. Selective colleges that went test-optional have been learning that they have done a worse job at admitting students who are likely to succeed, and this study helps show why.”

Concerning colleges, Kissel advised, “Highly selective colleges that want their students to succeed should heavily rely on standardized test scores as a first approximation of scholastic aptitude, regardless of group identity.”

With respect to prospective students, Kissel’s advice was specific to the selectivity of the school.

“This study notes other literature suggesting that test scores are less predictive of success at less-selective colleges,” he said. “Going test-optional is unwise for selective universities but not as big a mistake for other ones.

“Students should share their test scores, especially when applying to selective colleges, unless the scores are very low compared with published test score ranges or with the student’s GPA,” Kissel said.

It will be a little while yet before the full results of the research will be published.

As Friedman told The Fix, “Our paper (or, to be precise, a slightly shorter version of it given space constraints in the publication) will be published in the AEA Papers and Proceedings for the 2025 Annual Conference, which (I think) will come out in May.”

Tyler Durden Tue, 04/08/2025 - 15:05

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