Individual Economists

Violating His Own Policy, Biden OKs Antipersonnel Mines For Ukraine

Zero Hedge -

Violating His Own Policy, Biden OKs Antipersonnel Mines For Ukraine

Determined to leave an even bloodier legacy, President Biden has violated his own policy and approved the shipment of antipersonnel mines to Ukraine, two US officials have told the Washington Post. The move -- which threatens to cause civilian injuries and deaths even after the war ends -- comes in the face of months of Russian battlefield success in which its army has posted the fastest pace of territorial gains since 2022. 

The land-mine approval is Biden's second intensification of US military support in just the last few days: Acting very much like a man whose life in politics and life on Earth are both rapidly nearing their ends, Biden over the weekend approved Ukraine's use of long-range, US-supplied, ATACMS missiles against targets deep inside Russia. Brushing aside concerns that such an escalation would nudge the world's foremost nuclear powers closer to World War III, Ukraine wasted no time flexing its new freedom, striking a Russian military facility near the city of Karachev in the Bryansk region -- about 71 miles from the Ukraine border. 

In 2022, Biden restored an Obama-era policy that bars America's provision of antipersonnel mines anywhere other than the Korean Peninsula. Biden had condemned then-President Trump as being "reckless" in nixing Obama's policy, saying "It will put more civilians at risk of being injured by unexploded mines, and is unnecessary from a military perspective.”  

Now, however, Biden has thrown that sentiment out the window. While the 164-nation Ottawa Convention bans both the use and transfer of anti-personnel mines, neither the United States nor Russia is a signatory. However, Ukraine is. 

Member-states of the ban on anti-personnel land mines are colored red on this map furnished by the International Campaign to Ban Landmines

As has been the case with various other types of weapons systems, the Biden-Harris administration had for years refused Ukrainian President Volodymyr Zelensky's pleas for anti-personnel mines -- only for Biden to now cave just two months before he turns the Oval Office over to Trump, who's promised a swift, negotiated end to the war that has raged since Russia's February 2022 invasion in support of separatists in Ukraine's eastern regions.   

One of the officials who spoke to the Post acknowledged that Biden's policy change reflected the Ukrainian army's relentless loss of territory:  

“Russia is attacking Ukrainian lines in the east with waves of troops, regardless of the casualties that they’re suffering. So the Ukrainians are obviously taking losses, and more towns and cities are at risk of falling. These mines were made specifically to combat exactly this.”

Ukraine is already among the world's most-mined countries: According to Human Rights Watch, mines cover about 30% of its territory, an expanse about as large as Florida. As of last February, 1,000 civilian deaths were attributed to land mines -- however, most of these deadly incidents involved anti-vehicle mines. Both Russia and Ukraine have liberally deployed anti-personnel mines, and Human Rights Watch had condemned Ukraine for using rocket-deployed anti-personnel mines, which litter a territory with small explosive devices which often come in colors that could invite the curiosity of children.  

Human Rights Watch says Ukraine used rockets to scatter these colorful PFM-1S "butterfly" mines around Izium in 2022 (via HRW)

Anti-personnel mines are reviled because of their inability to distinguish between combatants and innocents. Organizations that oppose their use were quick to condemn Biden's decision. “It’s a shocking and devastating development,” Mary Wareham, deputy director of the crisis, conflict and arms division at Human Rights Watch, told the Post. 

Seeking to allay concerns about anti-personnel mines' notorious record for causing civilian casualties, one of the US officials described the mines in question as being "non-persistent" -- that is, they self-destruct or run out of battery power in a way that supposedly renders them harmless. Civilians better cross their fingers and hope they're not around when these mines randomly blow up or are made to explode in some other unintended fashion -- perhaps as an ex-president Biden is simultaneously sunning on a Delaware beach. 

Tyler Durden Wed, 11/20/2024 - 11:05

WTI Dips After Small Crude Build, US Production Tumbles

Zero Hedge -

WTI Dips After Small Crude Build, US Production Tumbles

Crude prices are extending recent gains this morning - albeit modestly - as geopolitical risk premia are rebuilding amid missiles flying in Russia, MidEast tensions continuing, and Biden seems set on WW3 as his legacy.

Last night's API report showed a larger than expected crude inventory build and traders are on the lookout for whether a contango market structure is here to stay after the WTI prompt spread dipped into negative territory this week for the first time since February, signaling near-term oversupply.

API

  • Crude +4.75mm

  • Cushing -288k

  • Gasoline -2.48mm

  • Distillates -688k

DOE

  • Crude +545k (-620k exp)

  • Cushing -140k

  • Gasoline +2.05mm

  • Distillates -114k

The official DOE data was very different from the API reported data with a small crude build and large gasoline build. This is the third straight weekly crude build and the biggest gasoline build since early September...

Source: Bloomberg

The Biden admin added 1.4mm barrels to the SPR last week - the biggest addition since August - making its the fifth straight week of total crude stocks rising...

Source: Bloomberg

US Crude production plunged by 200k b/d and does not look hurricane-related...

Source: Bloomberg

WTI dipped after the data...

Source: Bloomberg

Oil investors are pricing in Trump’s foreign policy approach as bearish. Of 10 traders surveyed by Bloomberg, eight said that Trump’s proposals will limit price increases, with some suggesting a trade war with China will erode demand and potentially offset any new sanctions on Iran.

Tyler Durden Wed, 11/20/2024 - 10:40

Once You See "World War 3" Headlines You Might As Well Buy Everything Because Why Not

Zero Hedge -

Once You See "World War 3" Headlines You Might As Well Buy Everything Because Why Not

By Michael Every of Rabobank

What, me worry?

Bloomberg went with a one-word headline in Asia this morning: “Escalation”, which was what I said on Monday while proposing it might be to de-escalate in places. Bloomberg then shifted to “Shambles” to complain ‘Chaos in Rio Shows a World Untethered Even Before Trump Returns’, referring to a G20 meeting with a backdrop of North Koreans fighting in Europe, Israel resisting Middle East US ceasefire attempts, China practicing blockading Taiwan, and nuclear threats now commonplace. Yet going from “All is well (except Trump)” to “PANIC!” lacks nuance. Indeed, while I recently told clients attending our financial market outlook presentations that 2025 was ‘The Year of Living Dangerously’, not everything is worth worrying about equally. Allow a professional worrier to show you how to do it properly!

First, once you see “World War 3!” headlines you might as well go risk on because why not? Ahead of the first Ukrainian ATACMS strike in Russia proper yesterday President Putin had changed his nuclear doctrine so it can use nukes if an attack on its territory is supported by a nuclear power, which it elsewhere stated includes US ATACMS. That saw bond yields fall before reversing. So far, this Russian red line appears to have been crossed without any nuclear fallout. If that all changes, I won’t be writing this Daily, and you won’t be reading it.

‘Keep Calm and Carry On’ doesn’t apply to lower-level wars, but there’s room for optimism. In the Middle East, Hezbollah is reportedly not yet willing to sign a ceasefire allowing Israel to still defend itself, without which a pause in fighting will be used to rearm – but a deal might yet be struck. There has been a dialling down of rising tensions in the Horn of Africa. Even in Ukraine, everything is about escalating to be in the best position to de-escalate ahead.  

So, if you want to worry, look at less glamorous but arguably more significant headlines that don’t point to world war, per se, but to world disruption, and major world market volatility.

Official allegations of sabotage were made in the EU as: two of Finland’s five nuclear plants had to be shut down; a key Norwegian oilfield was shut by a power outage; the support cable on a Finnish suspension bridge broke; and two key Baltic EU data cables were severed. The Chinese vessel Yi Peng has been flagged as a possible cable culprit and at time of writing was forcibly moored in Denmark. This is likely to prompt a strong Chinese diplomatic response; and perhaps an EU one if it proves a Chinese ship damaged key seafloor infrastructure (again: this also happened to a gas pipeline between Finland and Estonia in October 2023).

Europe is already confronting China in saying its battery producers - and all green tech - can only avoid EU tariffs and set up factories benefiting from subsidies if there is tech transfer. This mirrors Chinese policy back at it, long warned as the only way to avoid deindustrialisation. China might say no, which means one set of problems. Yet even if it says yes, Europe needs huge scale, so huge subsidies, so huge changes to its fiscal rules or banking sector; and huge supplies of inputs like lithium, which “are uneconomic” to develop domestically, and tied up by China internationally. The geopolitical bifurcation of supply chains is still just beginning.  

On bifurcation, Howard Lutnick is going to be US Commerce Secretary. Although this isn’t the Treasury Secretary he’d wanted, Lutnick - as representative of US businesses - has flagged tariffs and ‘Made in the USA’ tax breaks in tandem as a policy he wants to see put in place. Again, we see a mirror of China’s strategy back at it and rapid bifurcation of global supply chains.

On The Search for Spock the US Treasury Secretary, Trump is today speaking to ex-Fed member Warsh and hedge fund manager Rowan, while Senator Haggerty and Trump economic advisor Bessent are still in the mix. For markets thinking there is a chance someone who doesn’t like tariffs might get the top role, think again: why would Trump appoint a pro-tariff Commerce Secretary, who usually opposes such measures by default, only to then select a Treasury head who would not support his trade agenda?  

Moreover, with a Trump ally urging 60% duties on Chinese goods shipped via its new port in Peru, or any port in Latin America, the US is perhaps dipping into its Monroe Doctrine economic statecraft playbook to show what it wants the new world economic geography to look like: it won’t stand for trans-shipment of Chinese goods, so people are going to have to take sides. Relatedly, if China builds a railway across the Andes from Brazil to Peru to allow iron ore and soy access to the Pacific it may trigger the US to build a larger navy to rule the waves. Given China builds far faster than the US, that requires structural changes in its economy and tying ship-building allies like South Korea and Japan into a US bloc; and for national security reasons, Japan will require the US to show a firm hand vis-à-vis Taiwan – a red line for China.

In short, try not to worry about the obvious stuff like “World War 3!” Do worry about whether we are drifting towards a world split in three, geopolitically and economically: the US and allies, China and allies, and would-be ‘neutrals’. Markets might have priced in the leading edge of the Trump Trade, but they haven’t begun to grasp what the above scenario truly looks like.

The Financial Times understands the gravity with its op-ed today explaining ‘Why Trump’s trade war will cause chaos’, and that “tariffs, especially on one country, will lead to an unholy economic and political mess.” It’s right that every Trump cabinet nomination so far shows a determined approach to up-end old ways of doing things, including trade.

That said, the hoary old textbook arguments the FT uses to make its chaos case show it still doesn’t understand international trade. It’s wrong on how comparative advantage works, which Ricardo said assumes no mobile international capital, not free-flowing, free-wheeling capital; on savings vs. investment as the driver of trade when talking about forced-savings mercantilists vs. free traders, not free traders vs. free traders; on assuming the US shifting trade from China to others is a nasty side-effect of a trade war rather than a deliberate aim of one; and on not being able to join the dots from a US no longer able to sustain its global military primacy -on which the plump, pink free-market Financial Times ultimately rests- and the US being forced to run persistent trade deficits by mercantilists which deindustrialise it.

Really: worry that some high-level people still can’t grasp key fundamentals even when they are right in front of them alongside the socio-economic and geopolitical failure of the policies they keep advocating for instead. Worse, this is the same op-ed writer, Martin Wolf, who recently claimed that ‘Market forces are not enough to halt climate change’ and ‘Investor returns imply that the welfare of future human beings is close to irrelevant’; but free trade is obviously sacrosanct. Because reasons.

You can certainly worry that these kinds of prognostications are rapidly going to look like those of holier-than-thou Professor Lichtman of the magical ’13 keys’ that didn’t unlock a Harris victory two weeks ago as expected. As another commentator put it more civilly, “The failure of Allan Lichtman's keys is not merely a personal failure; rather, it reflects the decline of the political expert class in America” as the epistemological foundations upon which these "experts" have sat crumbles away.

At the very least, you can worry that nobody in D.C. is listening to what Wolf is saying.  

Tyler Durden Wed, 11/20/2024 - 10:25

MSNBC, CNBC On The Chopping Block As Comcast Greenlights $7 Billion Spinoff

Zero Hedge -

MSNBC, CNBC On The Chopping Block As Comcast Greenlights $7 Billion Spinoff

Comcast on Wednesday announced that it will move forward with plans to spin off its NBCUniversal cable TV networks - including MSNBC, CNBC, USA, Oxygen, E!, Syfy and the Golf Channel. (of course a season 2 Firefly reboot might have saved the whole thing... hint to the new buyer).

All together, the assets generated around $7 billion in revenue in the 12 months ended Sept. 30, the WSJ reports.

The company will keep Bravo - known for the "Real Housewives," as well as the Peacock streaming service and NBC broadcast network. Executives are betting that their remaining assets - including in broadcast TV, sports, movies and theme parks, will be better positioned for growth.

Of course, the decision also comes as a major source of ad revenue - pharmaceutical companies, are about to get the monkey hammer of justice from RFK Jr.

And guess who's most exposed?

Meanwhile, years of cord-cutting have taken a big toll on both subscribers and viewership - with every major media company pulling back on spending. Comcast, however, is the first to carve out nearly the entire business into a separate firm.

The transaction, structured as a tax-free spinoff to Comcast shareholders, is expected to take around a year to complete. The new cable venture will have an ownership structure that mirrors Comcast’s, with Comcast Chairman and CEO Brian Roberts holding a one-third voting stake. Roberts won’t be on the board of the new venture.

Mark Lazarus, who is currently the chairman of NBCUniversal’s media group, with oversight of TV and streaming platforms, will be named chief executive of the new venture. Anand Kini, who has served as chief financial officer of NBCUniversal, will be the CFO and operating chief of the new company. -WSJ

Other leadership changes related to the spinoff include Chief Content Officer Donna Langley transitioning to the chairman of NBCUniversal Entertainment and Studios - which will allow her greater authority to greenlight productions and more control over content spending. She will also oversee the entire entertainment portfolio's marketing efforts.

Comcast veteran Matt Strauss - who heads the direct-to-consumer business, will beecome the chairman of NBCUniversal Media Group, while Cesar Conde will remain chairman of NBCUniversal News Group, which oversees NBC News, Telemundo and local TV stations.

You're doing great guys...

Tyler Durden Wed, 11/20/2024 - 10:05

Quails On Cocaine: DOGE Shares Examples Of Gross Government Waste

Zero Hedge -

Quails On Cocaine: DOGE Shares Examples Of Gross Government Waste

Authored by Steve Watson via Modernity.news,

The newly formed Department of Government Efficiency has shared some examples of the kind of obscene government waste that it will abolish.

The X account of the department shared a video of Senator Rand Paul highlighting absolutely mental programs and studies that the US government has funded recently.

One example was pumping a hundred grand into an experiment to determine whether gin or tequila makes a sunfish more aggressive.

Another involved almost one million dollars towards a study to discover whether cocaine makes Japanese quail more “sexually promiscuous.”

The video also highlights how the government spent $750,000 to determine if Neil Armstrong said “One small step for man” or “one small step for ‘a’ man,” with the outcome determined to be “inconclusive.”

Paul also discovered that $2 million went toward the “construction of a kelp and shellfish nursery in Maine.”

Paul has been doing this for years with his ‘Festivus’ report.

DOGE also highlighted the monumental amounts of money that are unaccounted for in government.

As we previously highlighted, Vivek Ramaswarmy, who is heading up DOGE with Elon Musk, recently announced that DOGE will shut down entire government agencies as part of its effort to abolish waste.

*  *  *

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

Tyler Durden Wed, 11/20/2024 - 09:50

Bracing For Retaliation, US Shuts Embassy In Kiev Over Air Attack Risk

Zero Hedge -

Bracing For Retaliation, US Shuts Embassy In Kiev Over Air Attack Risk

Washington appears fully aware it has poked the Russian bear, after President Biden greenlighted Ukraine striking Russian territory with long-range missiles.

US officials have warned Wednesday that "potential significant air attack" on Kiev is likely coming, and have announced the closure of the US Embassy in the capital "out of an abundance of caution". This follows immediately on the heels of Ukrainian forces having struck an arms depot inside Russia with U.S.-supplied weapons, specifically the Army Tactical Missile System (ATACMS), on Tuesday.

"Embassy employees are being instructed to shelter in place," a new alert on the embassy website said. "The U.S. Embassy recommends U.S. citizens be prepared to immediately shelter in the event an air alert is announced."

Embassy diplomats and all staff are being asked to observe the following precautions:

  • Monitor local media for updates
  • Identify shelter locations in advance of any air alert
  • Immediately take shelter if an air alert is announced
  • Follow the directions of Ukrainian officials and first responders in the event of an emergency

The embassy closure is also happening the day after Putin signed a decree which updates and expands Russia's nuclear doctrine, which effectively lowers the threshold for nuclear weapons use. "As we said earlier this month, we were not surprised by Russia’s announcement that it would update its nuclear doctrine; Russia had been signaling its intent to update its doctrine for several weeks," the White House National Security Council responded in a statement.

Other Western embassies have also shuttered their operations amid air raid warnings in Kiev and other regions, including Italy, Spain, and Greece.

Al Jazeera notes that "Germany’s embassy in Kyiv remains open in a limited capacity and can still be contacted by German nationals who are in the country, a German Foreign Ministry official has said."

"We are in constant contact with our colleagues on the ground so that we can take appropriate measures if the situation changes," the official said.

Ukraine's military has since said that warnings of a large-scale missile attack from Moscow forces are likely a “psychological operation” carried out by Russia, precisely in order to instill fear and cause further embassy closures. According to the military statement:

It said Russia is conducting a “psychological attack against Ukraine”, warning of fake messages circulating on social media on alleged increased missile threats that it said were part of a “psychological operation”.

With merely two months to go until Trump is sworn into office, many Republicans have blasted the Biden administration and his national security officials for risking World War 3, and at least assuring major escalation, by at the last minute greenlighting long-range strikes on Russia--even knowing full well the Trump administration plans to pursue peace negotiations. 

Tyler Durden Wed, 11/20/2024 - 09:05

Trump Tariffs Are Inflationary Claim The Experts, But...

Zero Hedge -

Trump Tariffs Are Inflationary Claim The Experts, But...

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

  • Mark Cuban Says Trump’s Tariff Proposals Will Ramp Up Prices- Business Insider

  • Fed’s Kashkari Says Trump Tariffs Could Reheat Inflation If They Provoke Global Trade War- CNBC

  • Blanket Tariffs Would Be Incredibly Inflationary, Says Strategist- CNBC

  • Treasury Secretary Janet Yellen Warns “Sweeping Untargeted Tariffs” Would Reaccelerate Inflation- CBS News

  • Trump Tariffs Expected To Spike Inflation, Interest Rates- Business Insider

The headlines regarding Trump’s proposed tariffs and their inflationary consequences are undoubtedly worrying, but will they prove correct?

Instead of taking the “experts” word, let’s consider how tariffs may affect the prices of all goods and services, not just the items subject to tariffs. Furthermore, it’s worth discussing how tariffs could impact the economy, as economic activity greatly influences inflation. Lastly, we lean on historical precedence, capitalism, and the dollar to further evaluate how tariffs might impact inflation and economic growth.

Higher Prices And The Substitution Affect

Price changes of a good or service are primarily a function of supply and/or demand variations. However, price indexes, the basis for which economists measure inflation, are constructed on the prices of a basket of goods and services. The goods and services within the basket are weighted by the consumption of said items.

Considering the difference between the price of one good and the inflation index for an economy, let’s think about how consumers react to higher prices.

If the price of an imported good increases due to a tariff and the company selling the good commensurately increases the price, consumers respond in three ways.

  • Some consumers will decide not to pay the higher price and purchase a substitute good.

  • Others decide not to pay the higher price or buy competing goods and save their money.

  • Another group of consumers will pay the higher price, leaving them with less money to buy other goods.

Consumers buying a substitute good at a lower price will shift the composition of the inflation basket of goods, minimizing the impact of the tariff. 

Saving, thus not spending, will reduce economic activity, which is deflationary, as we will discuss when we consider how sellers might react to tariffs.  

Some consumers will pay higher prices. While this is inflationary for the tariffed item, the consumers have less money for other items, which is deflationary for those goods.

While the prices of the tariffed item and substitute items may change with demand preferences, the net effect after re-weighting the inflation basket and accounting for any broad economic impact will be minimal.

The demand for goods and the prices within the inflation pie will shift with a tariff. However, the aggregate supply and demand should be largely unaffected unless new money is injected into the economic system.

Business Owners Reaction

The prior section focused on consumers’ reactions to business owners passing on 100% of the tariff through higher prices. Typically, that does not happen unless demand is inelastic, meaning consumers have no choice but to buy a good or service.

Despite the price of the tariffed good increasing, the sellers’ profit margin does not change. However, as noted, the seller will likely lose some sales to substitute goods or savings. Accordingly, in many cases, sellers decide to eat some of the tariff costs to avoid losing sales. Doing so reduces their profit margin.

Sellers, faced with reduced profit margins and lost sales, will try to reduce expenses to offset the loss from the tariff. This means they might lay off employees, reduce capital expenditures, or choose other cost-saving methods.

The bottom line is that reduced profit margins, diminished spending, and layoffs will reduce economic activity. The economy will suffer, and demand for more than just the tariffed goods will decline. The result would be lower inflation and growth.

Retaliatory Tariffs

It’s equally important to consider that countries may not readily accept tariffs on their exports to the US. Many countries will retaliate with tariffs on US imports into their country. Such tariffs would make US-made exports more expensive and, thus, less desirable to foreign consumers.

As a result, US exports would decline, thus reducing economic growth and resulting in potential job losses and less inflation. 

With an appreciation for how tariffs can impact the economy and prices, let’s review the history books.

Smoot Hawley Tariff Act

In 1930, Herbert Hoover signed the Smoot-Hawley Tariff Act into law. The timing could not have been worse as the world was entering the Great Depression. Smoot-Hawley was intended to protect American jobs and farmers. The reaction from our trade partners was retaliatory tariffs on exported US goods.

US imports and exports were reduced by more than 50% within four years of the Act’s passage. Many Great Depression scholars blame the tariffs for playing a substantial role in amplifying the scope and duration of the Great Depression. The US paid a steep price for trying to protect its workforce through short-sighted political expedience.

While it’s hard to isolate the effect of the tariffs on the economy, GDP fell by an estimated 15% from 1930 to 1932. As a result, the unemployment rate rose to over 25%. From 1930 to 1932, the CPI index fell by 24%. The following table and graph, courtesy of Inflationdata.com, show the stunning deflation experienced in the early 1930s.

Trump 1.0 Tariffs

In 2018, Trump levied tariffs primarily aimed at China for a select group of goods. It is estimated the tariffs covered a little over $300 billion in imports. That accounted for about 12% of all imported goods. The tables below, courtesy of the Peterson Institute, show the share of the tariffs by country.

The following paragraph comes from The Impact of the 2018 Tariffs on Prices and Welfare, courtesy of the Journal of Economic Perspectives:

The figure shows a big surge in imports in the wave 1 products, washing machines and solar panels, prior to the imposition of tariffs, which was likely caused by importers moving forward import orders in order to obtain products before the imposition of the tariffs. For the remaining goods, it appears that on average their import levels were rising a little faster than for unaffected goods in the months prior to the imposition of the tariffs. In all cases, import values declined sharply after the imposition of the tariffs, typically falling 25 to 30 percent after the imposition of the tariffs. This drop is particularly striking given that imports for unaffected sectors and countries rose by about 10 percent over the same period, where this rise could in part reflect some import substitution from affected to unaffected countries and products in response to tariff changes.

As we wrote earlier, higher prices reduced the amount of imports of the tariffed goods and increased consumption of those goods not impacted by the tariffs. To this end, we just read the following headline: New York retailers stock up, switch suppliers as Trump tariffs loom

Furthermore, the article states:

Therefore, the full incidence of the tariffs has fallen on domestic consumers and importers so far, and our estimates imply a reduction in aggregate US real income of $1.4 billion per month by the end of 2018. We see similar patterns for foreign countries that have retaliated with their own tariffs against the United States, which suggests that the trade war has also reduced the real income of these other countries.

The graph below shows that US import prices fell from 2018 until the price surge due to the pandemic in late 2020.

Trump’s tariffs were designed to boost American industry. However, despite good intentions, the broader impact was reduced economic activity, with specific sectors facing deflationary pressures.

What About The Currency?

The reaction of the US dollar versus the currency of tariffed nations is also worth considering. For this, we lean on Hudson Bay Capital.

While in principle tariffs can be noninflationary, how likely is it? In the macroeconomic data from the 2018-2019 experience, the tariffs operated pretty much as described above. The effective tariff rate on Chinese imports increased by 17.9 percentage points from the start of the trade war in 2018 to the maximum tariff rate in 2019 (see Brown, 2023). As the financial markets digested the news, the Chinese renminbi depreciated against the dollar over this period by 13.7%, so that the after-tariff USD import price rose by 4.1%. In other words, the currency move offset more than three-fourths of the tariff, explaining the negligible upward pressure on inflation. Measured from currency peak to trough (who knows exactly when the market begins to price in the news?), the move in the currency was 15%, suggesting even more offset.

Measured CPI inflation moved from slightly above 2% before the start of the trade war to roughly 2% by the armistice. Measured PCE inflation went from slightly below the Fed’s target to further below the Fed’s target. Of course, there were crosscurrents like the Fed’s tightening cycle at the time, but any inflation from this trade war was small enough that it was overwhelmed by these cross-currents. This explains the Trump camp’s view that the first U.S.-China trade war was noninflationary.

Only 11% of Chinese goods are subject to tariffs. The prices of the other 89% of non-tariffed goods fell for Americans due to the depreciation of the Chinese yuan versus the dollar. The net currency effect of prices of all goods imported from China was negative. If we could, we would edit the last line in the comments above and say the US- China trade war was deflationary.

 

Let Capitalism Work

The US is one of the world’s most productive and wealthiest countries. Consider that our poorest state, Mississippi, has a higher GDP per capita than France. Our prosperity is the result of many factors, most of which are beyond the scope of this article. However, one key factor is that we generally have less government economic interference than most other countries.

While adding tariffs to level the playing field may win votes and sound like a good idea, they are government interference. This is not to say that discussions with our trade partners shouldn’t occur or actions shouldn’t be taken, but it is to say that tariffs tend to bode poorly for the economy and result in lower prices.

Taxes, regulations, and other domestic or international governmental actions are not a recipe for more robust growth.  

Summary

Economic theory and experience tell us tariffs are not inflationary. It’s correct to claim that a tariff on a good will raise its price. However, the claim fails to consider how consumers and sellers of the goods will react to higher prices.

Once all the economic, price, behavioral, and currency impacts net out, another round of tariffs will likely prove deflationary and harmful to economic growth.

Tyler Durden Wed, 11/20/2024 - 08:45

Futures Rise Ahead Of Nvidia After Putin Says Open To Ceasefire Talks With Trump

Zero Hedge -

Futures Rise Ahead Of Nvidia After Putin Says Open To Ceasefire Talks With Trump

US equity futures are higher as traders hoped earnings from Nvidia after the close would unleash fresh buying momentum and wash away the bitter taste from Target's catastrophic earnings this morning. As of 8:00am S&P futures rose 0.2% as small caps lagged after Wall Street benchmarks recovered from a bout of volatility following the escalation in Russia’s war against Ukraine; Nasdaq futures also rose 0.2% with Mag 7 stock mixed premarket and led by MSFT (+0.6%) and NVDA (+0.5%). Sentiment was also boosted after Putin said he was open to discussing a ceasefire deal with Trump, but is ruling out any territorial concessions (Moscow would freeze the conflict along the present battlelines) and wants a guarantee that Ukraine won’t join NATO. Bloomberg’s dollar gauge rose 0.3%, rebounding from a three-day drop. The 10-year US Treasury yield climbed three basis points after falling yesterday as investors fled to haven assets. On Commodities, oil and base metals are higher while precious metals are lower; Bitcoin is back to all time highs just around $94,000. All eyes on NVDA earnings after market close. Expectations remain higher with crowding positioning (more in our preview later). JPM's TMT specialist Josh Meyers says that that “a nice beat seems widely anticipated tomorrow, with expectations for the guide starting at $38b and going up a bit from there”, but Goldman's trading desk is more cautious warning that all the good news may already be in the priced-to-perfection stock.

In premarket trading, retailer Target promptly reversed all the goodwill from yesterday's blowout Walmart earnings and crashed as much as 20% after the it trimmed its full-year outlook due to flat sales and an inventory buildup. Company executives said US consumers spent less on nonessential items such as clothes and home products - a weaker third-quarter picture than the one provided by Walmart Inc. on Tuesday. Here are some other notable premarket movers:

  • AppLovin (APP) shares rise 2.4% after Piper Sandler initiated coverage on the mobile technology company with an overweight recommendation.
  • EVgo Inc (EVGO) shares gain 3.8% after JPMorgan placed the electric vehicle charging company on a positive catalyst watch on expectation that the stock will rally on news of the closing of the Department of Energy loan.
  • Global-e Online (GLBE) shares gain 9.6% after the application software company boosted its full-year revenue forecast. Additionally, the company reported third-quarter revenue that came ahead of estimates.
  • Keysight Technologies (KEYS) shares rise 9.1% after the measurement instruments company reported fourth-quarter adjusted earnings per share that came ahead of estimates.
  • Kingsoft Cloud ADRs (KC) soar 22% after the company reported third-quarter revenue that met consensus estimates. The company said it will achieve accelerated revenue growth in the fourth quarter.
  • Lemonade (LMND) shares advance 6.3% after Morgan Stanley upgraded the online insurance company to equal-weight from underweight after an investor day event. The broker also increased its price target to a Street high of $42.
  • Newell Brands (NWL) shares gain 4.3% after Barclays upgraded the consumer-goods company to overweight from equal-weight.
  • Powell Industries (POWL) shares fall as much as 14% after fourth-quarter revenue from the electrical infrastructure company missed the average analyst estimate.
  • Wix.com (WIX) shares jump 12% after the web-platform company boosted its full-year revenue forecast. Analysts said third-quarter results showed continued momentum.

Investors will scrutinize Nvidia’s quarterly results to gauge if the world’s most valuable company can continue its remarkable run fueled by spending on artificial intelligence hardware, with the chipmaker edging higher in premarket trading after rising 4.9% in the previous session. Trading in options signals the results will be the most important catalyst left this year — more than the Federal Reserve’s December meeting, according to Barclays Plc strategists.

"The health of the market being driven by results of individual companies in itself points to a certain element of fragility," said Subitha Subramaniam, chief economist at Sarasin & Partners. “Is it sufficient that they beat, is it sufficient that they beat by a big margin? We are hanging on every statement of the CEO.”

Traders will also monitor Donald Trump’s administration picks, especially his selection for the Treasury secretary role. Former Federal Reserve Governor Kevin Warsh and Apollo Global Management’s Marc Rowan are in contention, with the FT reporting that the Apollo boss has emerged as the top contender. Meanwhile, Trump tapped Cantor Fitzgerald CEO Howard Lutnick to lead the Commerce Department, a key role to facilitate his tariff and trade policies.

“As I look at the Treasury secretary race, I want to see exactly who is in that role because the tax policies, the debt limit all come back,” Ed Mills, Washington policy analyst at Raymond James, told Bloomberg TV. “We need to see exactly how that person has a relationship with the Federal Reserve, because monetary policy will quickly figure into all of this.”

Europe’s Stoxx 600 reversed Tuesday’s fall with the Stoxx 600 up 0.6% as reports suggest Putin is willing to talk with US President-elect Trump about a cease-fire deal in Ukraine; mining, technology and construction shares lead gains. The UK's FTSE 100 underperformed after the latest inflation reading came in hotter than anticipated, with traders paring back expectations for Bank of England rate cuts. Among individual movers in Europe, Sage Group Plc was up as much as 22%, the biggest intraday gain on record, after the software firm announced a £400 million ($507 million) buyback and reported stronger revenues. La Française de Jeux SAEM shares fell as much as 6.9%, the biggest drop in seven weeks, after a shareholder sold 4.7 million shares in the gaming equipment company at a discount. Here are all the notable European movers:

  • Sage shares soar as much as 22%, the biggest intraday gain on record, after results and the announcement of a £400m buyback program.
  • Severn Trent shares gain as much as 4.3% after the UK utility reported an EPS beat, lower net debt and a reduced interest charge for the full year.
  • Rotork shares rise as much as 5.5% after the valve manufacturer reported broad-based growth in order intake across its divisions, which analysts said marked an improvement from what was delivered in the first half.
  • Dormakaba shares gain as much as 3.4% after the Swiss security company confirmed its targets, showing that the simplification of its complex structure is on track.
  • Edenred gains as much as 4.4% as Jefferies upgrades to hold from underperform, writing in note that the French payment-service provider’s shares seem to already reflect growing headwinds.
  • Cement stocks gain as JPMorgan sees further upside ahead for European heavyside building materials companies, upgrading Holcim to overweight, Buzzi to neutral and adding Heidelberg Materials to its Analyst Focus List as new top pick.
  • Avolta rises as much as 3.1% after Berenberg initiated coverage of the world’s largest duty-free operator with a recommendation of buy, saying it can continue to win market share.
  • Helios Towers shares slide as much as 6.7% after a shareholder sold a stake in the telecommunications tower operator at a discount.
  • Elior shares plunge as much as 20% after results, with analysts at Oddo BHF saying the commercial catering company is still lagging behind key competitors on some key metrics, noting a worse retention rate and drop in net new business during the recently-ended financial year.

Earlier in the session, Asian equities retreated as traders awaited Nvidia’s earnings and forecasts to gauge if spending on artificial intelligence hardware will remain strong. The MSCI Asia Pacific Index dipped 0.5% after advancing 1% in the previous session. Gains in Hong Kong, mainland China and South Korea were offset by weakness in Taiwan and Japan. Across the region, technology stocks weighed on the benchmark most, followed by financial shares.

In FX, the pound erased its post-CPI gains as dollar strength takes over. The Bloomberg Dollar Spot Index rises 0.4%. The yen is the weakest of the G-10 currencies, falling 0.7% to around 155.80 against the greenback.

“The pound was last week’s underperformer, so it does at least have some scope to reverse some of that move” with the dollar having lost momentum, said Stuart Bennett, head of G10 currency strategy at Santander CIB. “If risk improves and the market gets carried away by the data alone, last Wednesday’s high at 1.2768 looks possible for cable, but it will depend on the US dollar and risk”

In rates, treasury futures held losses accumulated during London morning, led by gilts after UK inflation quickened more than expected in October. Meanwhile, haven demand that supported Treasuries Tuesday has ebbed since reports that Russia’s Putin is open to discussing a cease-fire in Ukraine with US President-elect Trump. US yields are 2bp-3bp cheaper across a slightly steeper curve; 10-year around 4.425%, about 2.5bp higher on the day, outperforms gilts in the sector by 3bp, bunds by 1.5bp. Gilts lead a selloff in European government bonds after UK inflation accelerated more than forecast in October, prompting traders to trim bets on the Bank of England’s interest-rate cuts path. UK 10-year yields rise 5 bps to 4.49%. US session includes 20-year bond auction at 1pm New York time; the new issue has a WI yield around 4.68%, about 9bp cheaper than last month’s auction result

In commodities, oil prices rise for a third day. Spot gold falls $6 to $2,626/oz. Bitcoin rises 1% to above $93,000.

Bitcoin rises to another all-time high, rising more than 2% above $94,000 supported by a series of developments highlighting the deepening embrace of the digital-asset industry in the US under crypto cheerleader Trump.

The US economic data calendar is blank, while Fed speaker slate includes Barr (10am), Cook (11am), Bowman (12:15pm) and Collins (4pm).

Market Snapshot

  • S&P 500 futures up 0.2% to 5,950.50
  • STOXX Europe 600 up 0.5% to 503.25
  • MXAP down 0.7% to 182.62
  • MXAPJ down 0.3% to 580.53
  • Nikkei down 0.2% to 38,352.34
  • Topix down 0.4% to 2,698.29
  • Hang Seng Index up 0.2% to 19,705.01
  • Shanghai Composite up 0.7% to 3,367.99
  • Sensex up 0.3% to 77,578.38
  • Australia S&P/ASX 200 down 0.6% to 8,326.29
  • Kospi up 0.4% to 2,482.29
  • German 10Y yield little changed at 2.36%
  • Euro down 0.4% to $1.0554
  • Brent Futures up 0.4% to $73.62/bbl
  • Gold spot down 0.4% to $2,622.55
  • US Dollar Index up 0.37% to 106.60

Top Overnight News

  • US companies are stocking up on inventory from China in anticipation of Trump tariffs. Already, exports from China surged last month with outbound shipments from China rising nearly 13% in October from a year earlier, well above consensus expectations and up sharply from 2.4% growth in September. WSJ
  • Japan’s exports gained 3.1% year on year in October, beating estimates. Imports posted a surprise gain and trade deficit widened. BBG
  • Putin is open to discussing a ceasefire deal w/Trump, but is ruling out any territorial concessions (Moscow would freeze the conflict along the present battlelines) and wants a guarantee that Ukraine won’t join NATO. Reuters
  • The US embassy in Kyiv closed after it was informed of a “potential significant air attack” today. BBG
  • A senior U.S. mediator said on Tuesday there was a "real opportunity" to end the conflict between Israel and Hezbollah and that gaps were narrowing, signaling progress in Washington's efforts to clinch a ceasefire. Reuters
  • Euro-zone wages jumped 5.4% from a year ago, the biggest increase since the euro was introduced. The data may complicate the ECB’s easing plans. BBG
  • Apollo’s Marc Rowan has emerged as a top contender for the Treasury Sec role, and will meet with Trump on Wednesday to discuss the position (other names being considered include Bessent, Warsh, and Hagerty). FT
  • Republicans in Congress are pushing back against the idea of paying for a giant tax bill with a massive wave of tariffs. Semafor
  • Retailers warn they will be forced to hike prices if Trump enacts an aggressive wave of tariffs. Axios
  • Economists expect Trump to impose 38% tariffs on Chinese goods early next year. Trump's proposed tariffs may cut China's 2025 growth by around 0.5-1%. China are likely to roll our more stimulus to counter these tariffs: Reuters

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the price swings seen across global markets on Tuesday in which the US indices staged a recovery from the initial risk-off conditions triggered by the Ukraine-Russia escalation, while participants now await NVIDIA's earnings. ASX 200 pulled back from recent record highs but with losses contained by a quiet calendar and light macro newsflow. Nikkei 225 traded indecisively despite the mostly better-than-expected Japanese trade data, while there were firm gains seen in Seven & I Holdings and media powerhouse Kadokawa following respective M&A-related headlines. Hang Seng and Shanghai Comp swung between gains and losses with price action indecisive following the lack of fresh major catalysts in the region, while there were also no surprises from the PBoC's announcement of the benchmark Loan Prime Rates which were maintained at their current levels following last month's 25bp cuts.

Top Asian News

  • Japanese gov't to invest JPY 200bln in Rapidus (chipmaker) in FY-2025, via Nikkei.
  • China's GDP growth seen at 4.8% in 2024, 4.5% in 2025 (unrevised from October), according to a Reuters Poll
  • Chinese Loan Prime Rate 1Y (Nov) 3.10% vs. Exp. 3.10% (Prev. 3.10%); 5Y 3.60% vs. Exp. 3.60% (Prev. 3.60%)
  • China's SCIO is reportedly to hold a briefing on Friday to outline measures for stabilising foreign trade growth, while the Vice Commerce Minister and officials from MOFA, MIIT, PBoC and Customs will attend the briefing, according to source on X.
  • US vowed more sanctions on Hong Kong officials after 45 pro-democracy activists were recently jailed, according to SCMP.
  • US Democratic Senator Blumenthal said Elon Musk's China ties are a profound threat to US national security and his business interests could be exploited by Beijing, according to SCMP.
  • China's smartphone sales -9% Y/Y during Singles' Day 2024, via Counterpoint Research. Huawei sales +7% Y/Y. Apple (AAPL) and Honor both declined by double-digit %.

European bourses opened the session entirely in the green and have generally traversed best levels throughout the morning. European sectors hold a strong positive bias, with only a couple of sectors found in negative territory. The  breadth of the market to the upside is fairly narrow, with no clear outperformer. Construction & Materials tops the pile, joined by Tech and then Basic Resources; the latter pair buoyed by the positive risk tone. Real Estate is found at the foot of the pile, given the relatively higher yield environment. US equity futures (ES +0.2%, NQ +0.2%, RTY +0.2%) are modestly firmer across the board, attempting to build on the prior day’s gains and as traders remain laser-focused on NVIDIA (+0.3% pre-market) results after-hours.

Top European News

  • UK PM Starmer is to visit Saudi Arabia and UAE to try to secure investment, according to FT.
  • The Resolution Foundation think tank says the UK's ONS may be underestimating the number of people in employment by almost 1 million and overstating the extent of the country’s inactive workforce problem, according to The Times.
  • ECB warns of bubble in AI stocks, low cash buffers at funds.
  • ECB's de Guindos says current low growth scenario has to more with structural policy; monetary policy is not almighty.
  • ECB's Escriva says floods in Spain to impact the Spanish economy by 0.2% in Q4.

FX

  • After three sessions of losses, DXY is notably higher as the USD out-muscles all peers alongside a pick-up in US yields. Fed speak today includes Barr, Cook, Bowman & Collins. DXY is currently in touching distance of yesterday's 106.63 peak.
  • EUR is swept up by the broadly firmer USD with EUR/USD's brief foray above 1.06 overnight very much in the rear-view mirror. The latest EZ wage data saw a jump in Q3 to 5.42% from 3.54% but this had little follow-through for EUR. EUR/USD is currently holding above yesterday's low at 1.0523. ECB's Lagarde and de Guindos due to speak later in the session.
  • Yesterday's geopolitically-induced support for JPY has proved to be short-lived with USD/JPY resuming its trend seen since the US election. USD/JPY has printed a fresh WTD peak at 155.84.
  • Cable vaulted higher in early trade following across-the-board hotter-than-forecast inflation metrics. GBP/USD rose from sub 1.27 levels to a peak of 1.2714. Note, the Y/Y services print was in-fitting with MPC forecasts.
  • Antipodeans are both softer vs. the broadly stronger USD and trimming recent gains with fresh macro drivers on the light side.
  • PBoC set USD/CNY mid-point at 7.1935 vs exp. 7.2386 (prev. 7.1911).

Fixed Income

  • A softer start for USTs as they continue to unwind Tuesday’s Russia-driven haven bid, taking USTs below Tuesday’s 109-19 base but still over 10 ticks clear of Monday’s 109-04+ base. Benchmark was largely unreactive to UK data or most recently EZ negotiated wages. Fed speak ahead include Barr, Bowman, Collins & Cook.
  • Bunds were directionally in-fitting with peers, but magnitudes slightly more contained going into the release of the EZ Negotiated Wage Rates (Q3); a release which saw Bunds slip back to the 132.00 mark but pared almost immediately to pre-release levels. A well received German outing had little impact on Bunds.
  • Gilts gapped lower by 48 ticks and then slipped another 23 to a 93.44 trough after hotter than expected inflation data for October. A release which has further reduced the odds of a December cut. It is worth noting that whilst the Services Y/Y figure surpassed the consensus, it matched the BoE's own forecast.
  • Germany sells EUR 0.804bln vs exp. EUR 1bln 1.80% 2053 Bund and EUR 0.818bln vs exp. EUR 1bln 0.00% 2052 Bund.

Commodities

  • WTI and Brent are in the green, having climbed to session highs in early European trade; more recently, the complex has edged off worst levels. Reuters reported that President Putin is open to talking about a ceasefire with President-elect Trump; news which ultimately had little impact on price action.
  • Gold is in the red though only modestly so, and still comfortably clear of Tuesday’s USD 2610/oz base and by extension significantly above Monday’s USD 2562/oz base.
  • Copper is firmer, but only modestly so. Benefitting from the general rebound in risk sentiment. 3M LME copper is in the green but only modestly so holding in a narrow USD 9.12-9.17k band.
  • Trading Hub Europe announces the gas storage neutrality charge from January 2025 is EUR 2.99/MWh
  • Equinor's (EQNR NO) Johan Sverdrup oilfield (775k BPD peak) output capacity is fully restored following a power outage. Producing steadily at normal levels.
  • Private inventory data (bbls): Crude +4.8mln (exp. +0.1mln), Distillate -0.7mln (exp. -0.02mln), Gasoline -2.5mln (exp. +0.9mln), Cushing -0.3mln.

Geopolitics: Middle East

  • Hezbollah's Qassem to speak in today's session (time TBC). In response to the announcement that US Envoy Hochstein will arrive in Israel this evening
  • Israeli army said Hezbollah fired 75 rockets from Lebanon towards Israel on Tuesday, according to Asharq News.
  • US Envoy Hochstein will stay in Lebanon until Wednesday and then go to Israel, while the new wording of the proposal stated that each side has the right to self-defence if attacked, provided the US guarantees that Israel does not carry out pre-emptive strikes. However, Israel's Channel 13 noted Hochstein's visit to Tel Aviv may be delayed due to large gaps between Israel and Lebanon, while the main dispute at the moment is Israel's demand to maintain freedom of military action in southern Lebanon, according to Al Jazeera.
  • Saudi representative to the Security Council said they condemn Israeli military actions against Lebanon and reject the threat to its security and stability, according to Asharq News.
  • Iranian Foreign Minister Araqchi told French Minister for Europe and Foreign Affairs Barrot that Tehran warns France, Germany and Britain about submitting a resolution against Iran at the IAEA Board of Governor's meeting, while Araqchi added the European resolution draft contradicts the 'positive atmosphere' created between Iran and the UN nuclear watchdog and will complicate matters.

Geopolitics: Ukraine

  • Russia's Kremlin says Putin constantly states that he is ready for contacts and negotiations on Ukraine; also says the option of freezing the conflict will not suit Russia.
  • Ukrainian air defence units attempted to repel a Russian air attack on Kyiv, according to Ukraine's military.
  • US State Department said the US embassy in Kyiv received specific information of a potential significant air attack on November 20th, while the Kyiv embassy will be closed and it recommended that US citizens be prepared to immediately shelter in the event an air alert is announced, according to a post on X cited by Reuters.
  • North Korean troops participated in some battles as part of Russia's airborne unit and marines in the Ukraine war, according to News1. It was also reported that North Korea shipped howitzers and multiple rocket launchers to Russia, while a South Korean lawmaker said South Korea's spy agency is still trying to determine any North Korean troop casualties and surrenders in the Ukraine war, according to Reuters.
  • Russian President Putin is reportedly open to talking about a Ukraine ceasefire with US President-elect Trump, via Reuters citing sources; but rules out making any major territorial concessions. Russia could broadly agree to freeze the front-line conflict in any deal; insists Ukraine abandons ambitions to join NATO; could be open to withdrawing from patches of territory in the Kharkiv and Mykolaiv regions. Finally, there could be negotiating room over dividing up Donetsk, Luhansk, Zaporizhzhia and Kherson.

US Event Calendar

  • 07:00: Nov. MBA Mortgage Applications 1.7%, prior 0.5%

Central Banks

  • 10:00: Fed’s Barr Testifies Before House Financial Services Committee
  • 11:00: Fed’s Cook Speaks on Economic Outlook, Policy
  • 12:15: Fed’s Bowman Speaks on Agency Policymaking
  • 16:00: Fed’s Collins Speaks on Policy, Career

DB's Jim Reid concludes the overnight wrap

Welcome to Nvidia's quarterly earnings day. They report after the bell in what is likely to be the biggest event of the week. With a market cap of $3.61tn and nearly as big as the entire DAX and CAC combined, it's going to be a big event. To give you a scale for their astonishing earnings trajectory over such a short period of time, at the recent lows in Jan 2023 Nvidia earned $4.4bn over the preceded last 12m. However, today the consensus will see them earn $61.4bn over the last 12 months. Then, by the time we hit 2027, they are expected to earn $118.1bn LTM. There has never been a large cap company like it in the history of financial markets. Last quarter, the revenue outperformance was the smallest relative to expectations in six quarters, so it wasn’t the sort of massive beat that Nvidia has often reported over the last couple of years. And in turn, their share price was down -6.38% the following day. However, since then, the share price is up around 20%, so no lasting damage was done.

The anticipation of this event seemed to pull markets up from their early geopolitical worries with the S&P 500 closing +0.40%, after S&P futures were down more than -1% shortly before the US open. It was a similar story for bonds, as the 10yr bund yield was initially down more than -10bps, before paring that back to just -3.4bps by the close.

The initial slump began thanks to fears of an escalation in the Russia-Ukraine conflict. Specifically, Ukraine made its first US-sourced ATACMS strike inside Russia, and President Putin signed a revision to Russia’s nuclear doctrine, allowing for a wider set of conditions under which they could use nuclear weapons.

The escalation news immediately led to a significant move into perceived safe havens, with assets like gold, sovereign bonds and the Japanese Yen all advancing. In addition, European equities were hit across the board, and the DAX was down -1.96% at its intraday low (-0.67% at the close).

But after those early losses, markets began to recover as the focus turned to Nvidia’s results. Leading up to the release, Nvidia (+4.89%) posted a strong gain yesterday, making it the top performer among the Magnificent 7 (+1.76%). That helped to lift equities more broadly, with the S&P 500 (+0.40%) managing to post a decent gain. Nevertheless, many stocks didn’t perform so well, and the equal-weighted S&P 500 was down -0.26%, which showed again how the Magnificent 7 were single-handedly driving the broader market. Meanwhile in Europe, there was a much stronger underperformance given the geopolitical developments. For instance, the STOXX 600 (-0.45%) posted a third consecutive loss, which took the index down to a 3-month low.

For sovereign bonds, there were modest gains on both sides of the Atlantic amid the broader geopolitical fears, though the rally eased off as the day went on. The 2yr Treasury yield traded as much as -7bps lower early on before closing virtually flat on the day (+0.1bps), whilst the 10yr yield fell by -1.8bps to 4.40% after earlier trading as low as 4.34%.

Over in Europe, sovereign bonds rallied across the board, with yields on 10yr bunds (-3.4bps), OATs (-2.0bps) and BTPs (-1.7bps) all moving lower. Alongside the geopolitical fears that drove the initial moves, we also had some dovish comments from the ECB’s Panetta, the Italian central bank governor. He said that “restrictive monetary conditions are no longer necessary”, and that they needed to “normalize our monetary-policy stance and move to neutral – or even expansionary territory, if necessary.”

Elsewhere in the political sphere, there’s still no confirmation of who the next US Treasury Secretary will be. The speculation so far this week has increasingly centred around former Fed Governor Kevin Warsh, although others including Scott Bessent and Apollo CEO Mark Rowan have also been widely reported as candidates with Rowan rapidly moving up the pecking order on Polymarket.com. It's all changing hour by hour. One name that had reportedly been in contention was Howard Lutnick, but yesterday it was confirmed that Lutnick had been selected as Trump’s nominee for Commerce Secretary.

Asian equity markets are trading in a relatively tight range this morning with the S&P/ASX 200 (-0.57%), the Nikkei (-0.28%) and the Hang Seng (-0.06%) are edging lower while the KOSPI (+0.58%), and the Shanghai Composite (+0.46%) are higher. US stock futures are up around a tenth of a percent.

Early morning data showed that Japan’s exports rebounded +3.1% y/y in October (v/s +1.0% expected), led by strong growth in the shipment of chip making equipment. It followed the prior month’s decline of -1.7%, which marked a 43-month low. Meanwhile, imports climbed +0.4%, compared with a -1.9% decline forecast by economists (v/s +1.8% in September). At the same time, the trade deficit widened to -¥461.2 billion from -¥294.1 billion.

In monetary policy action, the People’s Bank of China (PBOC) kept the 1-yr and 5-yr loan prime rate (LPR) intact at 3.1% and 3.6%, respectively, as Beijing continues to assess the effects of its recent stimulus measures.

There wasn’t too much data yesterday, although Canada’s CPI for October was a bit higher than expected at +2.0% (vs. +1.9% expected). Otherwise, US housing starts and building permits were both somewhat beneath expectations in October, with housing starts at an annualised pace of 1.311m (vs. 1.334m expected).

To the day ahead, and the main highlight will be Nvidia’s earnings results after the US close. Otherwise, data releases include the UK CPI report for October as we go to print. Lastly, central bank speakers include the Fed’s Barr, Cook, Bowman and Collins, the ECB’s de Guindos, Stournaras and Makhlouf, and the BoE’s Ramsden.

Tyler Durden Wed, 11/20/2024 - 08:34

'Bomb Cyclone' Blasts Pacific Northwest, Cutting Power To Over 600,000 In Washington

Zero Hedge -

'Bomb Cyclone' Blasts Pacific Northwest, Cutting Power To Over 600,000 In Washington

A massive bomb cyclone slammed into the Pacific Northwest on Tuesday night, unleashing torrential rains and tropical storm-like wind gusts up to 77 mph for certain areas. More than 600,000 customers across western Washington state are without power on Wednesday morning. 

FOX Forecast Center said the powerful atmospheric river, coupled with a bomb cyclone, will unleash heavy rains and high winds across the area through Saturday. 

"The two storms are powering the event, the first of which is a powerful bomb cyclone. The strength of the low has kicked up strong winds up and down the coast, which have caused power outages and some damage," Fox Forecast Center explained.

Early Wednesday, data from Poweroutage.US showed that over 600,000 power customers across Washington State had no power. The bulk of the outages were in King County and Snohomish County. 

FOX Forecast Center noted, "Measurements showed the storm dropped 66 millibars in pressure in 24 hours, eventually becoming a storm with a central pressure of 943 millibars - on par with a major Category 4 hurricane," adding, "It easily qualified for the title of "bomb cyclone," given when a storm strengthens about 24 millibars in 24 hours." 

Satellite imagery shows the cyclone formation of the storm as it slammed into the Pacific Northwest overnight. 

Wind damage has been reported across the Seattle metro area. 

Life-threatening blizzard warnings have been posted at higher altitudes. 

On the other side of the country, the season's first accumulating snowfall will be observed in higher altitudes across the Northeast. 

The climate continues to change. Here comes winter.

Tyler Durden Wed, 11/20/2024 - 08:10

In Chicago, Illegal Immigration Crisis Stokes Pushback From Locals

Zero Hedge -

In Chicago, Illegal Immigration Crisis Stokes Pushback From Locals

Authored by Steven Kovac via The Epoch Times (emphasis ours),

The issues arising from thousands of illegal immigrants pouring into Chicago from around the world have united many in the city’s black and Hispanic communities, who blame the government for the resultant social problems, including crime.

Illustration by The Epoch Times, Getty Images, Steven Kovac/Epoch Times

Local citizens say that their neighborhoods are less safe, their schools are overcrowded, already scarce jobs are now even harder to come by, and the distribution of municipal resources favors illegal immigrants.

“My beef is with the government, not with the migrants,” said Hector, a Hispanic pastor from Brighton Park on the city’s south side.

“There are a lot of injustices. We do not see equality. The migrants are given everything. The money is coming from our pockets.”

The city has provided housing for the new arrivals, ranging from large tents and warehouses to hotels scattered throughout the city and in some suburbs.

Chaplain Antonio, who ministers to immigrants, has observed criminal gang colors, signs, and emblems among them as he greets the newcomers on their arrival in Chicago.

“We are not against legitimate immigration, but this problem should have been stopped at the border,” he said.

Antonio also said the government is favoring the new noncitizen immigrants over people who are already here.

Chaplain Antonio, a minister to immigrants, in Chicago on Oct. 23, 2024. Steven Kovac/Epoch Times Voices From the Community

On a recent night, The Epoch Times met up with Tee and X (not their real names), two black men well-acquainted with life on Chicago’s mean streets, for a drive through some of the South Side’s deadliest neighborhoods.

X called the area “Cowboy Land,” where anything can happen at any time.

Driving through blocks of dilapidated houses and boarded-up storefronts, the pair pointed to street corner after street corner where someone had been shot to death recently.

X, who survived gang involvement well into his early 30s, said he can name 100 people killed in street violence.

Despite all that, he said, “I love my city. I wouldn’t leave. South Chicago is my land.”

Cautious in word and action, X avoided prison. Today, he lives in a small house in a neat, working-class area and works in construction. He is a single parent raising two sons.

X said he has nothing against the Venezuelans who make up the largest segment of the new arrivals. “They’re just trying to make a living,” he said.

Tee, a middle-aged elder statesman of Chicago’s gang and street life who is no stranger to the prison system, said: “Our life is hell. People are dying over here.”

Tee pointed to a woman he knew on the sidewalk. “You see that homeless woman? She’s been a resident of Hyde Park her entire life. She is a United States citizen. She fell bad on her luck. She’ll be sleeping outside tonight,” he said.

“If she were an illegal Venezuelan, she would show up at the entrance to a luxury hotel downtown or on Lake Michigan and be taken right in. They are given everything.

“When I need rent assistance, I can’t get it. But if I am Venezuelan, no problem.

“We have no problem with them being here. The problem is, they’re living here free.

“This is a sanctuary city. Yet my people live in poverty.”

According to Tee, the rising demand for housing will only get worse.

A group of illegal immigrants receives food outside the migrant landing zone during a winter storm in Chicago on Jan. 12, 2024. Kamil Krzaczynski/AFP via Getty Images

“The illegals need somewhere to live. They are not going to stay in those shelters forever,” he said.

“Some Venezuelans are squatting in run-down and abandoned residential buildings. They take them over, and nothing happens to them. They are immune from the law.

“If a black man has an old felony conviction, when he goes to apply for a benefit, he’s told, ‘Sorry, you have a prior felony that disqualifies you.’

“Yet thousands of illegals come here with no background check. Who knows what they did back home? Yet, they are signed up right away.”

Like Hector, Tee sees the government, not the Venezuelans, as the problem.

“I believe the illegal migrants are brought in by the government to displace the blacks,” he said.

“They are bringing into already impoverished cities like Chicago poor, military-age men with no women. What could go wrong?

“We’ve got no problem with people coming here the right way. What we don’t like is the government immediately handing them resources that we have to stand in line for.

“I don’t see color. I see right or wrong.”

A registered voter, Tee said he would be voting for former President Donald Trump and was strongly urging his friends to do the same.

“Trump will remove the illegal aliens from our communities,” he said.

“I like Trump. He is a felon. Everybody is against him. I like that.”

Economic Frustration

African American Pastor Dave Lowery’s ministry works out of a string of connected storefronts on the corner of 113th Street and Michigan, a rough and economically depressed section of Chicago where jobs are hard to come by.

Lowery, 67, remembers the days when there were many black-owned local businesses, whose owners taught their children to become entrepreneurs.

Pastor David Lowery and Morris Anderson in Chicago on Oct. 23, 2024. Steven Kovac/Epoch Times

“We didn’t worry about jobs because we created them ourselves,” he said.

Lowery said that when the younger generation of black politicians and community leaders abandoned that tradition and those values in favor of a culture of dependency, the change fostered an unhealthy and dangerous “hatred of self” among many black residents.

“The politicians tell black women, ‘We can’t give you welfare if your man remains in the house.' That destroyed the black family and destroyed the black economic engine,” he said.

“As capital and resources dwindled, black people turned on each other for pennies. Today, I’d have to shoot somebody to defend a business in Chicago.

“Nowadays, they don’t teach the basics in our schools. Our children have not been taught to become men and women, husbands and wives.

“It’s little wonder that we don’t do the right thing as individuals.”

Lowery is worried that the influx of illegal immigrants into the schools and neighborhoods could affect the black community “in ways they might not come back from.”

He spoke of the resentment black residents feel when, for example, “the city gives migrants free cars from the impound yard.”

Black community activist David Barnes added: “For some time, there has been a migration out by our people as soon as they can afford to do so. This has decimated communities such as Roseland. It is a dying community.

“The city of Chicago has to replace those people so it is relying on immigration.”

Lowery added, “The city is giving housing vouchers to illegal migrants and placing them in apartments at the rate of 55 [people] per day, while black citizens are struggling for their very existence.”

Unfair Competition and Favoritism

Morris Anderson is a licensed, bonded, and insured general contractor.

Anderson, an African American, said his once thriving business declined by 60 percent after the arrival of the migrants.

“The Venezuelans hang out at the Home Depot waiting to be hired by my competitors to work under the table for a quarter of what I pay my workers,” he said.

“Only a small number of the migrants have work permits, but that doesn’t keep them from working.”

Lowery said that the city held a special event called a “hiring hall” at an area church, but when black laborers showed up, “they were met by security and were told the event was just for the immigrants.”

“That kind of thing provokes the citizens against the illegals,” Anderson said. “It could start a civil war between us and the government over how we are being treated.”

Lowery said that the influx of thousands of foreign, military-age men into Chicago neighborhoods is like “putting a bunch of lions into a small pit and throwing in one piece of meat.

“There’s a big ongoing fight over scarce resources,” he said.

He favors Trump’s plan for mass deportation and called for the elimination of Chicago’s sanctuary city status.

He also advocates for the creation of a black financial consortium and new city projects set aside for black contractors, as ways to defuse what he said could be a “terrible summer of 2025.”

Political Realignment

Devin Jones, 38, opened a Republican campaign office at the corner of South Pulaski and 85th Street on the city’s South Side because he believes the “America first” agenda would better serve the interests and meet the needs of Chicago’s African American community.

Republican activist Devin Jones in Chicago on Oct. 22, 2024. Steven Kovac/Epoch Times

Jones, a black Navy veteran who can trace his ancestry in the United States back to 1781, said: “I didn’t know there was anything but America first. I always thought it was our priority.

“It is a strange use of our tax dollars to support illegal immigrants within and foreign countries without, while the generational wealth of my people is being taxed away to pay for it.”

A GOP committeeman and local political activist, Jones said he noticed the infiltration of illegal immigrants into his majority-black neighborhood when he circulated various petitions door-to-door.

“Many people couldn’t sign because they were foreign nationals,” he said.

“Here they are, with no stake in the game, building a life on the shoulders of those of us who struggled for years to acquire and maintain a nice home and business.

“They get to live off of the fruits of our labor without having contributed anything.

“We are American citizens who just want to keep what we have earned.”

Jones, a college graduate born and raised on the South Side, where he still resides, understands the connection between a good education and upward mobility.

He said he became angry when he noticed a shift in the priorities of the already poor Chicago Public Schools away from meeting the needs of black students who are U.S. citizens in favor of “dual-language students.”

Read the rest here...

Tyler Durden Wed, 11/20/2024 - 07:50

New Treasury Rule Expands Oversight Of Foreign Land Buys Near Military Bases

Zero Hedge -

New Treasury Rule Expands Oversight Of Foreign Land Buys Near Military Bases

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

The Treasury Department is expanding the review process for land purchases around more than 60 military bases following a land-buying spree by Chinese entities.

A sign opposing a corn mill stands near 370 acres recently annexed by the city for the project in Grand Forks, N.D. Many residents don't want the project in the city because the owner has reputed ties to the Chinese Communist Party through its company chairman. Allan Stein/The Epoch Times

The department announced the new rule on Nov. 1, saying it “significantly expands its ability to review certain real estate transactions by foreign persons near more than 60 military bases and installations across 30 states.”

As chair of the Committee on Foreign Investment in the United States (CFIUS), the treasurer has the authority to recommend that the president block or undo certain real estate deals deemed to negatively impact national security.

“The Biden-Harris Administration will continue to use our strong investment screening tools to advance America’s national security and protect our military installations from external threats,” Treasury Secretary Janet Yellen said in an associated statement.

A 2018 law grants CFIUS jurisdiction over real estate transactions dealing with the foreign purchase of U.S. land in close proximity to military installations.

The new rule expands that jurisdiction, allowing CFIUS to review purchases anywhere within a one-mile radius of 40 military sites and anywhere within a 100-mile radius of 27 others.

The purchase of large amounts of farmland near U.S. military bases by Chinese entities has spooked members of the U.S. national security establishment in recent years.

Chinese holdings of U.S. agricultural lands reached more than 352,000 acres in 2020, more than 25 times the 14,000 acres owned in 2010, according to U.S. Department of Agriculture estimates.

States with the largest Chinese holdings include Texas at 159,640 acres, North Carolina at 44,776 acres, Missouri at 43,071 acres, Utah at 32,447 acres, and Virginia at 14,382 acres.

The Chinese landholdings represent just 1 percent of all the foreign-owned land in the United States. Still, there is now a fear that the Chinese Communist Party (CCP) could use access to these parcels to collect intelligence or otherwise compromise U.S. military readiness and national security.

“Certain real estate transactions near military ranges owned by each of the Armed Forces could reasonably provide a foreign person the ability to collect intelligence, perform surveillance, or otherwise expose national security activities at such installations,” the final rule reads.

The rule also comes amid another concerning trend of recent years, in which Chinese nationals have attempted to enter U.S. military bases without authorization, sometimes going so far as to attempt to drive at blistering speed through the front gate.

U.S. Navy Adm. Daryl Caudle said in May that the Navy alone now faced such incidents multiple times a week. House Oversight Committee leaders have subsequently urged the Government Accountability Office to review how the Department of Justice investigates instances of foreign nationals probing sensitive U.S. facilities.

Some Chinese nationals have likewise been prosecuted and convicted for their efforts to illegally gain access to U.S. military bases.

Numerous states are now seeking to bar the CCP and other potentially hostile entities from purchasing U.S. land. In 2023, there were some 53 related measures considered in 23 states across the nation.

Enforcement remains a key problem with any state-level legislation, however. Many local governments don’t have the resources to independently vet every land purchase near military sites in their state, particularly if the site is near a population center.

To that end, the new rule is aimed at helping to shore up a critical national security risk and decrease the ease with which foreign powers might collect information on key U.S. sites.

“This final rule will significantly increase the ability of CFIUS to thoroughly review real estate transactions near bases and will allow us to deter and stop foreign adversaries from threatening our Armed Forces, including through intelligence gathering,” Yellen said.

The new rule will go into effect in approximately 30 days.

Tyler Durden Wed, 11/20/2024 - 07:20

Vanguard Adds 3 New Proxy Vote Options, Expands Shareholder Choice Pilot

Zero Hedge -

Vanguard Adds 3 New Proxy Vote Options, Expands Shareholder Choice Pilot

In the latest evidence of the ongoing erosion of the environmental, social and governance (ESG) movement, investment titan Vanguard has doubled the amount of assets covered by a program that gives investors the power to choose a proxy-voting philosophy -- while also adding two more voting options within that program.  

“Vanguard Investor Choice is grounded in the foundational belief that empowering investors to influence how their proxies are voted helps create a healthier corporate governance ecosystem,” said John Galloway, Global Head of Investment Stewardship at Vanguard. The program will now cover nearly 4 million investors and almost $250 billion in assets -- still a small slice of the more than $10 trillion in Vanguard assets under management. 

Vanguard also announced that it is working with retirement plan sponsors to extend the pilot program's availability to 401(k) and other retirement plan participants. Here's the updated list of funds eligible for the program, with the three new additions in italics: 

  • Vanguard S&P 500 Growth Index Fund
  • Vanguard Russell 1000 Index Fund
  • Vanguard ESG U.S. Stock ETF
  • Vanguard Mega Cap Index Fund
  • Vanguard Dividend Appreciation Index Fund
  • Vanguard High Dividend Yield Index Fund 
  • Vanguard Tax-Managed Capital Appreciation Fund 
  • Vanguard Tax-Managed Small-Cap Fund

The decades-long rise of passive investing has put the Big Three indexers -- BlackRock, Vanguard and State Street --in a position of major power to steer corporate agendas. It's also put them in the crosshairs of angry investors and federal and state Republican officials who think shareholder returns should be the only consideration when voting proxies. 

Giving investors the power to choose their own proxy-voting philosophy for shares held on their behalf extricates Vanguard and other firms from competing pressures applied by ESG enthusiasts and opponents. Vanguard now provides a choice of five such proxy philosophies for funds that are covered by the expanding Investor Choice pilot program: 

  • Vanguard-Advised Funds Policy: Shares are voted "in a manner that seeks to maximize long-term shareholder returns." 

  • Company Board-Aligned: The fund investor's proportionate share of votes on each measure is cast in alignment with the recommendations of the company's board of directors

  • Glass Lewis ESG: Glass Lewis is a proxy advisor; in this option, the investor's shares go all-in on the woke agenda that emphasizes "climate action," diversity, "equity" and social issues

  • Third Party Wealth-Focused Policy:  An investor's shares are voted per the recommendation of Egan-Jones, which will focus on maximizing shareholder value without consideration of political or social factors

  • Mirror Voting Policy: Votes an investor’s proportionate shares in approximately the same proportions as the votes cast by other shareholders. (This follow-the-crowd approach replaces a "not voting" policy that directed Vanguard to not cast any vote on any proposal.)

The last two are new for the 2025 proxy-vote season. In September, Vanguard shared data on the breakdown of choices made by investors in the Investor Choice pilot using the previous set of options. Putting aside the outlier ESG US Stock ETF fund, Vanguard investors overwhelmingly favored non-ESG voting, with around 75% choosing to go with either the company board recommendation or Vanguard's judgement on the best option for shareholder returns:  

Although they've shown varying degrees of dedication to ESG, BlackRock, Vanguard and State Street are routinely lumped together and subjected to blanket condemnation for promoting the philosophy to society's detriment. However, Vanguard announced earlier this year that it didn't support a single one of 400 ESG shareholder proposals during the 2024 US proxy-vote season. 

In December 2022, Vanguard withdrew from the Net Zero Asset Managers Initiative, a coalition that once had 300 asset managers signed on to reduce greenhouse gases and lower the earth's temperature by 1.5 degrees Celsius by 2050. "[Vanguard is] not in the game of politics," CEO Tim Buckley told the Financial Times at the time. In mid-February of this year, JPMorgan and State Street quit the Climate Action 100+ pact, while BlackRock reduced its involvement in the initiative. 

Tyler Durden Wed, 11/20/2024 - 06:55

US Military Suicides Continued To Increase In 2023: Pentagon Report

Zero Hedge -

US Military Suicides Continued To Increase In 2023: Pentagon Report

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

Suicides increased among U.S. military service members in 2023, continuing a gradual rise seen over the past decade, according to the Department of Defense’s annual report on suicide in the military.

American flags on display to honor U.S. military veterans in Handy Park, in Orange, Calif., on Nov. 11, 2024. John Fredricks/The Epoch Times

A total of 523 service members—including active, reserve, and National Guard—died by suicide in 2023, up from 493 in 2022, according to the Pentagon’s report, while the total force rate of suicide deaths per 100,000 service members was 9 percent higher than in 2022, at 25.6 per 100,000.

The Pentagon’s report highlighted an upward trend since 2011 among active-duty military members: A total of 363 active-duty service members died by suicide in 2023, up from 331 in 2022 and 328 in 2021.

The report noted that military suicide rates have been comparable to those seen across the wider U.S. population between 2011 and 2022.

The findings “urgently demonstrate the need for the Department to redouble its work in the complex fields of suicide prevention and postvention. One loss to suicide is one too many,” Defense Secretary Lloyd Austin said in a Nov. 14 statement.

The defense secretary said the Pentagon is focused on long-term, sustained initiatives to prevent suicide and is taking a “comprehensive” and “integrated” approach to increasing protective factors and decreasing the risk of suicide among service members.

“Our efforts aim to meet the military community where they are in their personal and professional lives—whether through bolstering financial readiness and support, building healthy relationships, improving mental health, or supporting them through life transitions,” Austin said.

The defense secretary noted that there has been a decrease from previous years in the number of military family members (spouses and dependent children combined) who died by suicide.

A total of 146 military family members died by suicide in 2022 compared to 165 in 2021, and 200 in 2020, according to the report. Numbers for 2023 were unavailable due to the time it takes to process data for this category.

The report noted that the complexity of suicidal behavior means it is difficult to identify a single root cause that might explain the trend.

Pentagon Working to Combat Suicide Rates

Overall, in 2023, 158 deaths were attributed to suicide among active-duty Army personnel, according to the report. Another 72 were reported among active-duty members of the Air Force, 70 among Navy members, and 61 among Marine Corps members, while two suicides were reported among members of the Space Force.

Among reserve members, 44 suicides were reported in the Army, 10 in the Marine Corps, eight in the Navy, and seven in the Air Force.

Similar to previous years, the majority of the deaths (around 60 percent) were among males under the age of 30, the Pentagon report found.

Firearms were the primary method of suicide deaths for service members and their families, according to the Pentagon, which noted the importance of promoting awareness regarding safely securing and storing firearms.

Speaking on Thursday, Austin touted the work the Pentagon is doing to tackle rising suicide rates among military personnel, including establishing the Suicide Prevention Response and Independent Review Committee in 2022 to conduct a review of clinical and nonclinical suicide prevention and response programs.

That review has resulted in more than 100 recommendations so far, Austin said.

In 2025, the Department of Defense also plans to invest $250 million in suicide prevention, Austin and other officials noted.

“We are dedicated to fighting for our Service members by fostering supportive team cultures and tackling the stigma of asking for help and other barriers to care,” Austin said.

“We continue working hard to improve the delivery of mental health care, bolster suicide prevention training, and educate people about lethal means safety. There’s still much more work to do, and we won’t let up.”

If you or someone you know is experiencing a mental health crisis, considering suicide, or engaging in substance abuse, dial or text the U.S. Suicide & Crisis Lifeline at 988 to speak with a counselor. If you’re in the UK, call the Samaritans at 116123.

Tyler Durden Wed, 11/20/2024 - 06:30

Natural Gas Prices In US Northwest And Western Canada At Record Lows

Zero Hedge -

Natural Gas Prices In US Northwest And Western Canada At Record Lows

The prices of natural gas at the key regional hubs in the U.S. Pacific Northwest and Western Canada have hit this year the lowest level on record, amid rising production in the Western Canadian Sedimentary Basin (WCSB) and high inventory levels in these regions.

Monthly average natural gas spot prices at the northwestern U.S. and western Canada border pricing hubs reached historic lows in the first ten months of 2024, the U.S. Energy Information Administration (EIA) said on Tuesday, citing data from Natural Gas Intelligence.

The Western Canada benchmark, Westcoast Station 2, saw the daily spot natural gas price average $1.04 per million British thermal units (MMBtu) through October, with the lowest monthly average of $0.31 per MMBtu in September.

The Westcoast Station 2 pricing hub is near Fort St. John, British Columbia, close to natural gas production activities in the Western Canadian Sedimentary Basin.

At the key pricing hub for the U.S. Pacific Northwest, Northwest Sumas, the daily spot price averaged $1.87 per MMBtu in 2024 through October and reached its lowest monthly average this year of $0.97 per MMBtu in May. The monthly average price at Northwest Sumas for the first 10 months of this year was the lowest for this period of any year since the EIA began collecting data for this hub in 1998.

As Charles Kennedy writes at OilPrice.com,  the key reasons for the low regional gas prices were the high natural gas production in the WCSB since the end of 2022 and relatively high natural gas exports into the western United States.

To compare, the monthly average of the U.S. benchmark, Henry Hub, daily spot price was at $2.20 per MMBtu in October 2024, the EIA’s latest Short-Term Energy Outlook (STEO) showed earlier this month.

The U.S. administration expects the Henry Hub price to average around $2.90 per MMBtu in 2025, as global demand for U.S. LNG exports, a component of U.S. natural gas demand, continues to increase.

Tyler Durden Wed, 11/20/2024 - 05:45

Europe Braces For War As Biden Shovels More Fuel On The Fire

Zero Hedge -

Europe Braces For War As Biden Shovels More Fuel On The Fire

Authored by Sam Faddis via AND Magazine,

As the mainstream press in the United States continues to obsess with imaginary threats from Trump’s army of “fascist” supporters, the Europeans are focused on the very real possibility that the Biden–Harris administration is going to start World War III on its way out the door. All over the continent, military and civilian authorities are working hard on civil defense preparations and planning for armed conflict with Russia.

Illustration via LBC

Sweden is sending out five million pamphlets to its citizens telling them how to prepare. The pamphlets include instructions on stockpiling food and finding shelter during a nuclear attack. Excerpts from the document include:

“An insecure world requires preparedness. The military threat to Sweden has increased and we must prepare for the worst - an armed attack.”

“The global security situation increases the risks that nuclear weapons could be used. In the event of an attack with nuclear, biological, or chemical weapons, take cover in the same way as in an air attack.”

“Shelter provides the best protection. After a couple of days, the radiation has decreased significantly.”

“If Sweden is attacked by another country, we will never give up. All information to the effect that resistance is to cease is false.”

The Swedes are not alone. Norway and Finland are doing the same thing, preparing their populations for nuclear war.

Finland has launched a new website advising people on how to prepare, and the Norwegians recently mailed out their own booklet giving people tips on how to prepare for the end of the world. The Norwegian booklet includes advice on how citizens should prepare themselves to live self-sufficiently for a week, with a list of long-life items to keep such as cans of beans, energy bars and pasta, and medicines in case of a nuclear event.

The Finnish website includes detailed instructions on how Finns should react in the event of war:

“The warning signal is a regularly rising and falling sound that lasts for one minute used to warn people of an immediate outdoor hazard.

In the event of a war, the signal is used to alert people about incidents as well as air strikes, for example.

In case of a military attack, you must immediately seek shelter in the nearest civil defence shelter or the best available shelter.”

The website also provides detailed guidance on how to try to continue to live in an area that has been irradiated.

“Prepare for a radiation hazard as follows:

  • Learn the steps to seek shelter indoors and how to carry them out at home. Also learn them together with family members.

  • Learn how to switch off ventilation at home.

  • Make sure you have durable tape at home that you can use to seal off windows, doors and other areas with air flow.

  • Know which communication channels are used: the 112 application, television, radio and the websites of the authorities

  • Buy medicine iodine tablets at home according to the recommendation.”

The Germans are making their own preparations for the coming apocalypse. The German military is now advising companies on something called Operations Plan Germany. The paper is a thousand pages long and classified, but details have begun to leak publicly. For example, it lists all buildings and infrastructure facilities to be protected for national security reasons. It also provides significant detail on how Germany will transport hundreds of thousands of soldiers east to engage with Russian forces.

In Prague, a network of Cold War-era bunkers has now seen renewed interest. A spokeswoman from the Czech Republic's Fire Rescue Service told RFE/RL recently that, beginning in 2023, the service began updating "requirements for the shelter system and the shelters themselves." She did not elaborate on what those updates were.

Meanwhile, wasting no time after Biden’s approval of the use of American-made ballistic missiles against targets deep into Russian territory, Ukraine attacked a military installation in Russia’s western Bryansk region. "For the first time, Ukraine's Defense Forces struck Russian territory with ATACMS ballistic missiles." 

Putin, for his part, made good on his pledge to respond. He signed a decree updating and expanding Moscow's nuclear doctrine to allow for the use of atomic weapons in case of an attack on Russia by a nonnuclear actor that is backed by a nuclear power. The updated doctrine says Russia would consider using nuclear weapons after receiving “reliable information about the launching of a massive attack against it and missiles crossing the Russian border."

Lest anyone think that the prospect of a Russian nuclear attack on Europe is purely the stuff of science fiction, we should recall that secret documents obtained earlier this year by the Financial Times revealed an extensive Russian plan to target strategic sites deep inside Europe with nuclear missiles. This plan was part of a broader strategy to overwhelm NATO forces and win a conflict with the alliance. The documents included maps of targets in countries such as the United Kingdom and France.

The Europeans understand exactly what is happening and are bracing for what may now be inevitable. Joe and Kamala, and whoever advises them, are shoveling more fuel on the fire and doing their level best to start a world war as they head for the door.

Tyler Durden Wed, 11/20/2024 - 05:00

The Link Between Blood Types And Risks of COVID-19, Cancer, And Other Diseases

Zero Hedge -

The Link Between Blood Types And Risks of COVID-19, Cancer, And Other Diseases

Authored by Ellen Wan via The Epoch Times (emphasis ours),

Blood types play a crucial role not only in ensuring safe blood transfusions but also in influencing various health risks. Numerous studies suggest that genetically determined blood types may increase susceptibility to both infectious and non-infectious diseases, including COVID-19, heart disease, and allergies.

chemical industry/Shutterstock

Blood is categorized into four main types—A, B, AB, or O—based on the types of antigens present on the surface of red blood cells. Antigens are proteins found on red blood cells that trigger an immune response when encountering unfamiliar substances, such as certain bacteria, Dr. Douglas Eric Guggenheim, a physician at the Abramson Cancer Center at the University of Pennsylvania Hospital, explained in a 2020 Penn Medicine article.

Increased Risk of Viral Infections

A 2023 study from Harvard Medical School, published in the journal Blood, found that the SARS-CoV-2 virus, which causes COVID-19, preferentially targets type A blood cells.

“We show that the part of the SARS-CoV-2 spike protein that’s key to enabling the virus to invade cells displays affinity for blood group A cells, and the virus in turn also shows a preferential ability to infect blood group A cells,” Dr. Sean R. Stowell, of Harvard Medical School and Brigham and Women’s Hospital, said in a press release.

Type A blood cells are more susceptible to SARS-CoV-2 infection than type O blood cells, Stowell noted. “Among a group of several thousand people, some studies suggest that those with blood group A may be 20 percent more likely to be infected after exposure to SARS-CoV-2 compared with those who have blood group O.” Subsequent experiments indicated that the Omicron variant demonstrated an even stronger preference for infecting type A blood cells than the original virus.

Other recent studies have explored the mechanisms linking blood type to susceptibility to SARS-CoV-2.  One study showed that levels of ACE2 protein, the receptor that the virus binds to for cell entry, were significantly higher in people with type A blood compared to other blood types. The researchers also found that the binding rate of the spike protein to red blood cells was highest in people with type A blood and lowest in people with type O.

Despite these associations, when assessing a person’s risk of severe SARS-CoV-2 infection, factors such as age and pre-existing chronic conditions, like heart disease, tend to have more significant effects on the risk of severe SARS-CoV-2 infection than blood type.

Increased Risk of Cancer

Pancreatic cancer is one of the deadliest types of cancer because it tends to grow quickly, can rapidly invade surrounding organs, and is often difficult to detect early. One study found a statistically significant association between ABO blood group and pancreatic cancer risk. Compared to people with type O blood, those with blood types A, AB, and B had a 32, 51, and 72 percent higher risk of developing pancreatic cancer, respectively.

Additionally, a comprehensive review found that people with type A blood were more susceptible to Helicobacter pylori, a known risk factor for stomach cancer, thus increasing their likelihood of developing the disease. In contrast, type O blood was associated with a lower risk of several cancers, including colorectal, gastric, and breast cancer.

Higher Risk of Other Serious Conditions

Blood type has been found to be associated with an increased risk of other several serious health conditions.

Increased Risk of Heart Disease

Blood type may also be linked to the risk of developing heart disease. A meta-analysis from the Harvard T.H. Chan School of Public Health, analyzing health data from nearly 90,000 individuals over more than 20 years, found that people with type O blood had the lowest risk of developing coronary heart disease. After adjusting for cardiovascular risk factors, participants with blood types A, B, and AB had an increased risk of coronary heart disease by 6, 15, and 23 percent, respectively, when compared to people with type O blood.

Increased Risk of Allergic Diseases

There is also a clear association between blood type and allergic diseases. A review found that people with type O blood were more prone to allergic rhinitis and asthma compared to those with non-O blood group. In contrast, people with non-O blood types had a higher likelihood of developing atopic dermatitis, with the highest prevalence among those with type B blood, followed by type A.

Read the rest here...

Tyler Durden Tue, 11/19/2024 - 22:35

Visualizing The Distribution Of Global Wealth

Zero Hedge -

Visualizing The Distribution Of Global Wealth

Wealth distribution varies significantly across the world’s regions, reflecting the economic disparities shaped by differences in development, resource availability, and financial access.

This graphic, via Visual Capitalist's Kayla Zhu, visualizes the share of adults in each global region who fall into four wealth bands (figures in USD):

  • Under $10K

  • $10K to $100K

  • $100K to $1M

  • Over $1M

The data comes from the UBS Global Wealth Report 2024 and encompasses 56 markets representing an estimated 92.2% of total global wealth.

The UBS report’s data does not include a majority of African countries.

Global Wealth by Region in 2023

The majority of adults in the lowest wealth bracket (under $10K) are concentrated in the Asia-Pacific (APAC) region, where nearly 70% of people in this wealth bracket being from the region.

On the other end, the highest wealth bracket (over $1M) is dominated by the Americas along with the grouped region of Europe, the Middle East, and Africa (EMEA).

The Americas, which includes North and South America, have the highest share (42.7%) of global adults with wealth over $1 million, showing a concentration of high net worth individuals in this region.

At the country level, the U.S is home to nearly 22 million people with a wealth exceeding one million dollars, the highest number of millionaires in any country according to analysis by UBS.

This means that in 2023, the U.S. hosted 38% of the world’s millionaires.

Mainland China ranked second with just over 6 million millionaires, almost twice the number of the third-ranked country, the United Kingdom.

To see the global distribution of the ultra-wealthy, check out this graphic that visualizes where the 626,619 individuals with a net worth of $30 million or more live.

Tyler Durden Tue, 11/19/2024 - 22:10

Andrew Jackson In The 21st Century

Zero Hedge -

Andrew Jackson In The 21st Century

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

Trying to gain a greater understanding of what is happening in the United States today, history provides some guidance.

We can skip most of the presidencies of the 20th century for comparison.

A statue of the seventh President of the US Andrew Jackson is seen in Lafayette Park across from the White House on Oct. 30, 2008. Karen Bleier/AFP via Getty Images

Ronald Reagan was more in the mold that Donald Trump is breaking.

Richard Nixon was popular but was hamstrung by the Vietnam War and the dollar crisis.

FDR was popular but his sweeping victory in 1936 reflected economic panic. While he had the House and Senate, he faced a hard barrier with the Supreme Court that struck down his beloved legislation.

Woodrow Wilson won in 1912 only because the opposition was split.

There is a greater prospect of fundamental change with the second Trump term than in any living memory.

For an illuminating comparison, let’s return to the year 1824. Andrew Jackson ran for president and won a plurality of the popular and electoral votes. But he did not get the majority. The election was thrown to the House of Representatives, which produced a surprising result: John Quincy Adams became president thanks to the support of Henry Clay who was promised the position of Secretary of State.

That sense of being robbed of the presidency festered deeply among Jackson’s fan base and he came back four years later, more fired up than ever. The election of 1828 was utterly sweeping. He ran an unapologetic populist campaign against the national bank and corrupt insiders in Washington. The turnout broke all records, and so did the results. Jackson won by a landslide, securing 178 electoral votes against John Adams’ 83.

With this mandate, Jackson and his followers utterly destabilized Washington, firing vast numbers of executive bureaucrats who were considered disloyal, and fought the national bank while pushing for gold and silver as money. His hiring of loyalists to top positions was decried as the “spoils system” that was ended fully by the Progressive Era, which amounted to a revenge of the professional bureaucrats.

The policies he pursued–keeping the government mostly constrained by the Constitution, keeping the peoples’ interests front and center, and devolving power to the states–prepared the ground for the United States to rise from a small post-colonial outpost to the world’s greatest economic and military power by century’s end.

There were two major missteps that have ruined his reputation in the history books. Jackson was a states’ right guy on all matters but for matters of the tariffs (he threatened an invasion of South Carolina during the so-called Nullification Crisis) and, in addition, he pursued a cruel policy regarding Native lands, which he ordered to be taken, leading to ghastly humanitarian results including the famous Trail of Tears.

That said, he did return government to the people and his impact on Washington was enormous, especially as regards his fight against the National Bank and paper money.

Murray Rothbard summarizes Jackson’s presidency as follows:

“It is difficult to generalize about Jackson; his fiery temperament, his capacity for bitter personal hatred, his autocratic taste for personal power which blossomed in his early military campaigns, and his weak grasp of political principles led him into many inconsistent and wrong-headed acts. Underneath these weaknesses, petty whims, hatreds, and inconsistencies, however, there is clearly discernible a basic set of political and economic principles. These were, in brief, the principles of pure Jeffersonian Democracy: thorough-going ‘hard money,’ with the eradication of inflationary paper money and reliance on gold and silver; laissez-faire-strict adherence to free enterprise in a market unhampered by government subsidies, tariffs, heavy bureaucratic expenditures, special privileges, or heavy taxation; firm insistence on states’ rights. In foreign policy, the guide is America first, last, and always, with no entangling alliances and an attitude of firmness, cordiality, but profound suspicion toward all foreign countries, particularly Great Britain.”

Rothbard concludes: “Jackson deserves a cherished place in the hearts of all Americans: By the time Jackson left office, for the first time and the last time in the history of America, we had wiped out all of our public debt. Old Hickory’s success in liquidating the national debt is one of the most glorious accomplishments in American annals. And it provides us with a vital clue to the true nature of his political philosophy.”

This is the strongest historical precedent we have for the meaning of what is happening right now. Donald Trump astonished the world with his victory in 2016. His loss four years later followed the calamitous policy response to the arrival of a respiratory virus. Trump initially pushed for lockdowns. Once having changed his mind about the policy, he was unable to restrain the bureaucracies that had been unleashed on the population with the ostensible goal of minimizing infection and then forcing public adoption of an experimental shot.

There was a widespread belief among his supporters that something was sketchy about the 2020 results, which had been unduly influenced by mail-in ballots pushed by the CDC, which had said that standing in voting lines was too dangerous for the spread of the virus. Trump himself never tired of arguing that the election itself was stolen. While that claim was inadmissible in polite society, and never seriously considered by the courts, Trump’s team and his followers were thoroughly convinced that he otherwise would have won.

For four years, Team Trump plotted their return, with an election strategy based on three key pillars. First, they would work to minimize voter fraud and mail-in ballots, urging the passage of voter ID laws and cracking down on possible corruption of the rolls. Second, they would push disenfranchised voter blocs among men under 40 to get themselves registered and vote. Third, they would work to create a mass cultural movement deploying Trump to do what he does best, which is to rally people at mass events.

Later in the campaign, the Trump coalition grew dramatically with the inclusion of a parallel effort by Robert F. Kennedy, Jr. A lifetime litigator, RFK had written the most compelling books to explain how it is that Trump’s first term came to be subverted by the pharmaceutical industry in combination with national-security bureaucracies. His broader interests have long concerned health freedom and the elimination of subsidies for big agricultural interests that had driven smaller and organic farmers to the margins of food suppliers.

Kennedy attempted to challenge sitting president Joseph Biden for the nomination but found himself locked out. Next he attempted an independent bid but found himself blocked at every turn, plus worried that his presence in the election would operate as a spoiler bloc that could put Biden back in power.

Once he decided to link up with Trump over issues of food and medical freedom, they both found common interests in battling Big-Tech censorship, which in turn attracted the interests of Elon Musk. This disruptive entrepreneur had purchased Twitter with the goal of turning it into a free-speech platform in defiance of all the throttling and bans of the years prior.

This combination of RFK, Jr., Trump, and Musk amounts to one of the biggest realignments in modern American history. It combines 1990s-era “crunchy liberalism,” with a pro-peace America First foreign policy, with a 2000s-era disruptive tech focus, with a populist push against big everything (media, government, academia, medicine, corporations, finance).

Much of this realignment comes in the wake of the tumultuous years of COVID, in which businesses, schools, churches, and travel were shut in the name of health, with the very opposite result.

The modern incarnation of the Jacksonian movement has embodied itself in a series of popular acronyms that summarize the agenda: MAHA (Make America Healthy Again), MAGA (Make America Great Again), and DOGE (Department of Government Efficiency).

There is simply no chance that even the finest political prognosticator could have anticipated this merger of interests in defiance of all the old categories of left and right. As regards the old categories of race and religion, there has never been a popular political movement to draw from such a wide diversity of people, united more in their celebration of working-class interests than in opposition to professional and overclass hegemony.

Something very similar came together in the coalition that brought Andrew Jackson to power in 1828, complete with a storied past of struggle and triumph and a hard-core promise to return government to the people while taking it away from the privileged special interests. So far Trump’s picks for his cabinet posts seem to be following the Jacksonian script as well: people loved by the base but loathed by the establishment. Jackson got away with the same mainly by leveraging his personal popularity and carefully deploying that political capital against all resistors.

Jackson made some terrible errors but also did good as president. There is much from which the Trump team can learn from this experience. There is every reason to believe that the next four years could be equally as disruptive and leave a permanent mark on the history of this nation.

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

Tyler Durden Tue, 11/19/2024 - 21:45

China's Economy Is Larger Than 30 Asian Economies Combined

Zero Hedge -

China's Economy Is Larger Than 30 Asian Economies Combined

The world’s second-largest economy sometimes suffers from its own success: it’s hard to comprehend how big it really is.

To help put things in perspective, this map, via Visual Capitalist's Pallavi Rao, compares China’s economy with East, Southeast, South, and Central Asia: a combined entity of 30 other countries labeled as “Rest of Asia”.

Data is sourced from the UN and the IMF as of 2024. Countries from Western Asia (i.e. the Middle East) and Russia (which spans Europe and Asian continents) haven’t been included, and data was unavailable for North Korea.

How China Stacks Up vs. Asian Economies

With an $18 trillion economic output in 2024, China’s GDP is nearly $2 trillion larger than 30 economies combined: $16.5 trillion.

That list of 30 countries includes other Asian heavyweights like: Japan ($4.1 trillion), India ($3.9 trillion), and South Korea ($1.87 trillion), the world’s 4th, 5th, and 12th largest economies.

More than 2.9 billion people inhabit this bloc of countries, compared to China’s 1.4 billion residents. The per capita GDP reveals the imbalance in productivity: $12,870 for China versus $5,583 for the rest of Asia.

Why the Chinese Economy Slowdown Matters

Now that comprehending the size of China’s economy is somewhat more feasible, it makes more sense why the post-pandemic slowdown has rung alarm bells for economists around the world.

It’s easier to think of it less as one country in an economic slump, and more as, say, 30 countries in a bit of a bother.

Since 2010, China’s economy has added roughly $1 trillion—the size of Saudi Arabia—every single year. From 2012–2021, China contributed nearly 39% to global growth by itself, more than the G7 countries combined.

It’s not an exaggeration to say the world economy would look very different without China—especially for the manufacturing and industrial sectors, where it commands a dominant market position.

Falling Chinese demand hurts all the countries who export to China—and this includes large parts of Asia and Africa.

Meanwhile, in an effort to sell elsewhere, Chinese businesses have shifted focus to international markets, already putting them in confrontational crosshairs with the U.S. and EU over unfair trade practices. More tariffs could raise the cost of goods and services to consumers around the world.

This map is part of a series where we visualize how different countries around the world stack up against their neighbors. Check out how Germany Compares to Half of Europe, or How Africa Can Be Divided into Two Halves for more interesting conversation starters.

Tyler Durden Tue, 11/19/2024 - 21:20

Musk Goes All In On 'Judge Dredd' Matt Gaetz, Notes 'Douchebag' Garland Never Brought Charges

Zero Hedge -

Musk Goes All In On 'Judge Dredd' Matt Gaetz, Notes 'Douchebag' Garland Never Brought Charges

Elon Musk has come out swinging for Rep. Matt Gaetz, as the Florida lawmaker and President-elect Donald Trump's pick for attorney general faces scrutiny over sexual misconduct allegations that may throw his Senate confirmation into disarray.

"Matt Gaetz has 3 critical assets that are needed for the AG role: a big brain, a spine of steel and an axe to grind," Musk wrote in a Tuesday post on X. "He is the Judge Dredd America needs to clean up a corrupt system and put powerful bad actors in prison," Musk continued, adding "Gaetz will be our Hammer of Justice."

Musk also addressed the allegations, saying he considers them "worth less than nothing," as "Under our laws, a man is considered innocent until proven guilty.

"If AG Garland (an unprincipled douchebag) could have secured a conviction against Gaetz, he would have, but he knew he could not.

"Case closed."

Senators on both sides of the aisle are requesting more information into a House ethics probe of Gaetz which allegedly contains accusations that Gaetz paid for sex with a woman who was 17 at the time. The DOJ investigated the allegations, but decided in February of 2023 not to file any charges against him. Gaetz has denied the allegations.

 

Tyler Durden Tue, 11/19/2024 - 20:45

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