Zero Hedge

The War On Pete Hegseth

The War On Pete Hegseth

Authored by 'Cynical Publius' via American Greatness,

I have had enough. I can no longer sit still while the Deep State does its very best to smear Secretary of War Pete Hegseth and have him removed from his post via lies, rumors, propaganda, and innuendo. It feels exactly like version 2.0 of the “Trump/Russia Collusion” disinformation campaign, and it needs to be called out for what it is.

Enough.

I am here to defend the best Secretary of War/Defense since Caspar Weinberger.

What we have seen in the last few weeks is clearly an orchestrated, carefully constructed character assassination campaign against Hegseth.

The campaign began in the early days of November when the leaders of the Sedition 6 introduced legislation known as the “No Troops in Our Streets Act,” legislation clearly designed to undermine the roles of President Trump and Secretary Hegseth in the military chain of command. Then, of course, on November 18, the Sedition 6—led by Senators Mark Kelly and Elisa Slotkin—launched their infamous video calling (via innuendo and plausible deniability) for military members to disobey lawful orders they disagree with politically by pretending such lawful orders are “unlawful.” For the next eight days, the Deep State went into a full media onslaught that seemed designed to foment a military mutiny against Trump and Hegseth. Suddenly, these wannabe seditionists were forced to hit the brakes on their information operation, as on November 26 two West Virginia National Guard soldiers patrolling the streets of Washington, D.C., in support of anti-crime operations were shot by an Afghan civilian with former ties to the CIA, and America saw an easy connection between that attack and the calls to undermine Trump, Hegseth, and the anti-crime mission.

But the Deep State never rests and was quick to shift gears and change the subject away from their own perfidy. On November 28, the Washington Post published its anonymously sourced hit piece on Hegseth, alleging that he personally directed war crimes, and in a matter of minutes, the entire Democrat hierarchy and its minions in the national media ran with Nancy Pelosi’s beloved “wrap-up smear” in a transparent effort to remove Hegseth.

We now know, of course, it was all a lie. The Democrats and the national media want you to believe that two “fishermen” survived a first strike on their drug-laden speedboat and were then floating in the water helplessly like Rose and Jack at the end of “Titanic,” and we gunned them down as helpless victims and in violation of the Geneva Conventions. In reality, the two narco-terrorists were back on board their partially damaged boat, seeking to conduct damage control and recover their WMD cargo. The narco-terrorists and their lethal cargo were lawful targets under all U.S. laws and all treaties to which the U.S. is a party. No war crimes were involved—just an effective and entirely lawful military strike on narco-terrorists who kill thousands of Americans annually. The Washington Post lied, as is its wont in any matter involving the Trump Administration.

But the damage was done, and too many Americans are still clinging to the lies. In fact, it was an opinion piece I saw today by the desiccated remains of George Will, published in that same Washington Post and uncritically repeating all of that tabloid’s original lies, that pushed me over the edge and caused me to rise to the defense of Pete Hegseth with this article.

As a veteran of the same wars Hegseth fought in and as a retired Army colonel who also fought the Beltway wars of the Pentagon, I take the attacks on Hegseth personally, as he is trying to fix all of the ills that I saw so clearly in my time in service. My sincere belief is that at this time in American history, Pete Hegseth is the perfect person to serve as Secretary of War.

I’ll explain why.

America’s military spent 20+ years engaged in a GWOT battle that, after its first few years, became a predominantly political, economic, diplomatic, and law enforcement mission where the military was not the right tool in the DIME-FIL (DIME-FIL = The “elements of national power” under U.S. military doctrine, or diplomatic, informational, military, economic, financial, intelligence, and law enforcement) toolbox. “Nation building,” ridiculously restrictive, JAG-inspired rules of engagement, social justice experimentation, Military Transition Teams and Security Force Assistance Brigades, and the bastardization of combat arms units away from their mission-essential tasks all created a U.S. military that was risk averse to a crippling degree, lacked adequate training and equipment readiness levels for high-intensity conflict, had broken morale and poor retention/recruiting, and was more concerned about DEI than closing with and destroying the enemy.

The military that Donald Trump inherited from Joe Biden in January of this year was a broken shell of the military that entered the GWOT in 2001. It had lost its focus on lethality, valued skin color and genitalia more than warfighting competency, and was not even able to fully recognize its own missions in a world rife with peer competitors bent on high-intensity global or regional domination, such as China and Russia. Yes, low-intensity conflict was still on the menu in places like Yemen, Syria, and the battles against narco-terrorists, but a military trained for high-intensity conflict can adjust to low-intensity conflict quickly, but it does not work so well the other way around.

As Donald Trump took office, what America needed was a Secretary of War who was intimately familiar with these failures—somebody who had fought those GWOT battles and understood our failings deep in his or her soul. Such a person could not be one of the Perfumed Princes who engineered and would repeat our failures. Instead, it needed to be someone with muddy boots who had experienced the mess we had become at a deeply personal, tactical level.

Moreover, it needed to be someone who understood information operations and the climate of global, instantaneous messaging that is our new day-to-day.

This person did not need to have a comprehensive understanding of military procurement and the military/industrial complex that accompanies Beltway jockeying with Congress and defense contractors—those skills are widely available and could easily be obtained by hiring effective subordinates with the shared vision of a military that needed to be once again focused on lethality.

What might such a person have looked like?

Well, he or she would need to have the following qualifications:

  1. A military career that involved killing the enemy up close and personal in the most efficient manner possible. An infantryman, if possible. A Combat Infantryman Badge would be double plus good.

  2. Muddy boots experience leading troops in direct combat in Iraq and/or Afghanistan.

  3. Deep experience in leading one of the failed coalition training missions in Iraq or Afghanistan.

  4. Someone who shared the dark personal struggles of every veteran who had come home from our endless wars.

  5. A final military rank that meant he or she was never a Perfumed Prince and was never polluted by the Beltway mind virus that seems to infect every soldier, sailor, airman, Marine, or Guardian who ever pins on a star.

  6. Deep experience in information operations, such as being a best-selling author on military affairs or being a military expert on a major news network.

Those are the qualifications that were needed to turn America’s military around and restore it to once again being the premier warfighting force in world history. We did not need more of the same. We did not need a former Raytheon board member. We did not need a former congressman who cared more about politics than winning wars. We did not need yet another retired general who was an architect of our useless, endless wars. What we needed was someone who truly understood the errors of the GWOT, understood that the mission of the U.S. military is to close with and destroy the enemy in the most violent and expeditious manner possible, and who had the chops in the 24/7 modern information environment to wage information warfare just as effectively as his opponents.

One American and one American only had those qualifications: Pete Hegseth, and that man is doing everything I could have ever hoped for to restore the pride and skill we have lost. His focus on lethality and warfighting skill is the one and only antidote to the intentional failures that have scarred veterans like Hegseth and me over the past 24 years.

Please realize this: Hegseth is a threat to anyone who prefers the Obama/Biden vision of an impotent social justice military. He is a threat to anyone who thinks R2P (R2P = “Responsibility to Protect,” i.e., a leftist, globalist doctrine popularized under the Obama Administration that says the U.S. military has a core mission of protecting foreign populations against the deprivations of their own or neighboring governments or warlords. Although legitimate in some instances, it prioritizes the national interests and lives of foreigners over the national interests of the USA and the lives of American servicemen and servicewomen) is a core competency of the American military. He is a threat to anyone who thinks enriching the military/industrial complex is more important than winning wars. Basically, he is a threat to anyone who sees the military as a politicized force and not an effective warfighting endeavor. In other words, Hegseth is a threat to the Beltway defense establishment that has exchanged failure for dollars since the days of Robert McNamara.

Which is why it is so very, very important that the same defense establishment (elected, unelected, and media) smear him in every way imaginable and at every opportunity. When you see and hear the abject lies of the Sedition 6 and their ilk, and when you see and hear wholly fabricated, libelous stories like the “Kill Them All” Hoax, realize why this is happening. These fake news stories are designed to attack and defeat an existential threat to the leftist vision of a social justice American military that exists to enrich defense industry campaign contributors.

Like Donald Trump, Pete Hegseth is an existential threat to the leftist evils that nearly defeated America and the Constitution via Barack Obama and Joe Biden.

It takes a strong man to withstand the onslaught of the Deep State, with all of its lies, libel, and propaganda. Donald Trump is one man who withstood that fire of infamous defamation. Pete Hegseth is another.

We all owe Pete Hegseth our gratitude for the personal cost he is enduring in the name of freedom. He could be sitting at home enjoying his writings and his Fox News appearances. Instead, he is enduring the cowardly slings and arrows of powerful liars as he strives to fix the ills that have long beset our nation’s military.

The disgusting disinformation campaign against Hegseth needs to be challenged vigorously, and I encourage all of you readers to help lead the counterattack.

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

Tyler Durden Fri, 12/05/2025 - 17:40

World Risks 'Disintegration Of The International Order' As Macron Fails To Woo Xi Into Pressuring Putin

World Risks 'Disintegration Of The International Order' As Macron Fails To Woo Xi Into Pressuring Putin

"We are facing the risk of the disintegration of the international order that brought peace to the world for decades, and in this context, the dialogue between China and France is even more essential than ever," Macron said on Thursday while on a tour of China. It was his fourth state visit, and part of a renewed effort to woo Chinese President Xi Jinping to the West's side on stepping up pressure on Russian President Vladimir Putin.

"I hope that China will join our call, our efforts to achieve, as soon as possible, at the very least a ceasefire in the form of a moratorium on strikes targeting critical infrastructure," the French leader said. But the consensus is that Macron's latest effort has once again failed to gain anything in the way of a concession from Xi on the Ukraine issue. 

Xi only vaguely stated that "China supports all efforts that work towards peace" while urging a peace deal that all parties would accept, in a clear nod to Moscow's position that there are still a number of unsatisfactory aspects to the Trump-proposed peace plan.

via Reuters

President Xi also interestingly used language and themes often employed by Putin, for example stressing the needs to carry on the "banner of multilateralism" when it comes to China-France relations:

"No matter how the external environment changes, both sides as major powers should always demonstrate independence and strategic vision, show mutual understanding and mutual support for each other on core matters and major critical issues," he said.

"China and France should demonstrate their sense of responsibility, raise high the banner of multilateralism ... and firmly stand on the right side of history."

Friday's commentary from Rabobank says this is all a case for pessimism when it comes to the closeness or else great distance of a potential Ukraine peace deal:

The kind of multilateralism that Xi has in mind is an important point to consider. Is Xi talking about an idealistic evolution of the United Nations where more power is given to the developing world but disputes are resolved via dialogue? Or is he talking about ending US hegemony to carve the world up into spheres of influence for regional great powers to preside over? Xi’s reluctance to get involved in brokering a peace deal in Ukraine and recent naval deployments in the wake of a diplomatic spat with Japan will make many nervous that it is the latter.

A spheres of influence paradigm is certainly favorable in the eyes of Vladimir Putin. He has reportedly rejected the latest peace overtures from US special envoy Witkoff and told India Today that Ukrainian troops will either leave the Donbas region or Russia will “liberate these territories by force”. Kremlin officials have reportedly told journalists that a peace deal remains a long way off. The Wall Street Journal editorial today says “maybe it is time to conclude that Mr. Putin doesn’t want peace” while arguing that Putin has no incentive to negotiate in good faith while he feels that he is winning.

So, peace in our time? Don’t count on it.

European leaders have not been pleased that the US plan is the first to ever seriously offer territorial concessions since the war's start. Some European officials alongside media reports in the EU have gone so far as to accuse Putin of 'faking' interest in peace efforts.

While the Kremlin has called the prior Tuesday Moscow talks involving Steve Witkoff and Jared Kushner "constructive" - it conceded that little actual progress was made toward a deal, given Russia is demanding nothing less than full legal and international recognition of the territories under its control. 

Putin has followed up with a warning that Russia is ready seize more Ukrainian territory as the 'special military operation' continues. "Either we liberate these territories by force of arms. Or Ukrainian troops leave these territories," he has freshly warned.

Images from Macron's three-day rare "sightseeing" tour of China with President Xi:

Mutual strikes on energy infrastructure are only continuing to escalate. President Putin has also warned his military is readying to expand strikes on Ukrainian ports, in retaliation for a spate of drone attacks on tankers transporting Russian oil to global markets.

With Ukraine peace being elusive, apparently, Xi and Macron handled a series of lesser matters Thursday and Friday," EuroNews reports. "They signed 12 agreements, including ones calling for cooperation on a new round of panda conservation efforts and exchanges in higher education and research." The same report notes that the European Union "ran a massive trade deficit with China of more than €300 billion last year. China alone represents 46% of France's total trade deficit."

Tyler Durden Fri, 12/05/2025 - 17:20

Watch: Biden Called For Strike Force To Crush Drug Cartels In 1989!

Watch: Biden Called For Strike Force To Crush Drug Cartels In 1989!

Authored by Steve Watson via Modernity.news,

Democrats are melting down over Trump’s targeted strikes on narco-terrorists, yet a freshly resurfaced clip shows Joe Biden demanding the same aggressive action decades ago, proving their opposition is pure partisan sabotage as cartel poison floods America unchecked.

A 1989 C-SPAN clip of then-Senator Joe Biden has gone viral amid the Trump administration’s boat strikes on drug runners, highlighting the glaring double standard from Democrats who now baselessly cry “war crimes” over actions Biden once championed.

In the speech, Biden urged, “Let’s go after the drug lords where they live with an international strike force. There must be no safe haven for these narco-terrorists …”

What changed? Under Biden’s presidency, fentanyl deaths skyrocketed, with cartels controlling swaths of the border and trafficking exploding to record levels. Now, as Trump delivers on promises to hit back hard, Dems side with the traffickers out of sheer Trump derangement.

The clip, from a February 7, 1989, Senate hearing on crime and drugs, shows Biden pushing for swift, severe punishment of dealers and international operations to dismantle cartels before they infiltrate the U.S. 

He emphasized, “We have to join together to ensure that drug dealers are punished swiftly surely and severely.”

This echoes Trump’s designation of cartels as foreign terrorist organizations, a move Biden never pursued despite his tough talk.

Fast-forward to 2025, and Trump’s team is executing precision strikes on vessels linked to Venezuela’s Maduro regime and cartel operations, destroying drug cargoes and neutralising threats in the Caribbean.

Trump security advisor Stephen Miller blasted Democrats Wednesday for their twisted priorities in an explosive interview.

Miller declared, “This is the first time I can EVER think where a major political party has sided with narco-trafficking, murdering, terrorist SCUM!”

He added, “A Democrat says ‘oh, there’s no such thing as a narco-terrorist. They’re just narco-persons!’ ISIS and these narco-terrorists in our hemisphere use the same tactics. They use r*pe as a weapon. They skin people alive. They cut off their heads. They burn them to death!”

Miller further asserted “We’re not going off running around the Middle East trying to ‘build democracies’ in caves and deserts and in distant sands that have never known democracy.”

“We’re using the military to protect American security, American prosperity, American lives right here where we live, where our children live!” he urged.

Democrats, meanwhile, are inciting military discord while soft-pedaling cartel savagery. As we covered earlier, Virginia Sen. Mark Warner echoed seditious calls on MSNBC, stating “the uniformed military may help save us from this president.”

Warner ranted, “I’m going to want to get answers on what did Pete Hegseth order? Why haven’t we seen the whole unedited video if there’s nothing inappropriate here? You could have cleared this up without the admiral coming in. He’s got a great reputation, I respect him. I want to get the truth. And I’m not sure we’ve had the truth from Hegseth yet.”

Fresh reporting dismantles media smears. The New York Times revealed Hegseth authorized a Sept. 2 strike “to kill the people on the boat, destroy the vessel, and eliminate its drug cargo,” but it “did not specifically address what to do if a first missile failed to fully accomplish these goals, and it was not based on surveillance showing at least two survivors after the initial blast.”

White House press secretary Karoline Leavitt clarified Hegseth “authorized Adm. Frank M. Bradley to conduct kinetic strikes, ensuring the boat was destroyed and the threat eliminated.”

In addition, ABC’s Martha Raddatz provided key updates on ‘World News Tonight’, noting  “According to a source familiar with the incident, the two survivors climbed back on to the boat after the initial strike. They were believed to be potentially in communication with others, and salvaging some of the drugs.”

Raddatz added, “Because of that, it was determined they were still in the fight and valid targets.”

This confirms the strikes followed rules of engagement, with legal oversight—completely debunking Dem hysteria.

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

Tyler Durden Fri, 12/05/2025 - 17:00

Was The J6 "Insurrection" A Government-Sponsored Seditious Conspiracy?

Was The J6 "Insurrection" A Government-Sponsored Seditious Conspiracy?

Authored by James Howard Kunstler,

Cold Case Heats Up

"[The current FBI] was competent at cracking the case; [Christopher Wray's] was competent at corruption and obstructing it."

- Mike Benz

Do you have any idea what tapestry of corruption and crime is attached to the little thread of the J6 / DNC / RNC pipe bomber suspect arrested yesterday by the FBI? Consider this: suspect Brian Cole, Jr., is alive and probably talking, unlike, say, Jeffrey Epstein and Thomas Matthew Crooks in other matters of public interest. Let’s hope he is under FBI protection in custody, lest something. . . say. . . happen to him.

Dressed for government work?

As of early this morning, the country knows next to nothing else about Cole and what he was up to the night of Jan. 5, 2021.

The FBI has not even said how he is employed. But his photo shows a young man dressed for office work. . . he lives in a nice house in the DC suburbs of Virginia. . .and you might infer that he is, possibly, a federal government worker. Oh, and the FBI was unable to catch him through the whole four years of “Joe Biden?”

You can suppose at this point that the story of that four-year botched investigation will be a way bigger thing than the pipe bomber’s little prank itself.

It probably leads to the story of wholesale corruption in Christopher Wray’s FBI, and even more consequentially, to the realization that the so-called J6, 2021 “insurrection” was a government op from top to bottom, aimed at eradicating Trump and Trumpism.

First, what was supposed to happen in a joint session of Congress that day?

Answer: certification of electoral college votes in the 2020 election. What else was liable to happen that day? Answer: under the Electoral Count Act of 1887 (3 U.S.C. §§ 5–6, 15–18) — as amended, and by the rules laid out in the U.S. Constitution (Article II and the 12th Amendment) — objections to several states’ slates of electors were expected to be entertained, triggering debate and possible rejection of those states’ electors on the basis that the votes were not “lawfully certified” (under 3 U.S.C. § 6), or not “regularly given” (meaning the vote was marred by fraud, corruption, or violence). Any state’s electoral votes could be rejected if both the House and Senate voted by simple majority, after up to two hours of separate debate.

At mid-day, objections meeting the written requirement (one House member + one Senator) were filed for Arizona and Pennsylvania. The objection to the Arizona vote (Rep. Paul Gosar + Sen. Ted Cruz) was the first scheduled to be debated shortly after 1:00 p.m. It was not allowed to happen. Instead, Congress evacuated the chamber. When Congress returned at 8:00 p.m., votes objecting to Arizona and Pennsylvania slates failed and no others were taken up. Senators who previously had committed to debating the votes of several other swing states demurred, citing the breach of demonstrators into the Capitol. The full tally concluded at 3:44 in the morning, Jan 7, “Joe Biden” and Kamala Harris were certified as winners of the 2020 election.

Here are some things to know about the pipe bomb subplot in the J-6 story.

Kamala Harris, vice president-elect, still a sitting Senator (CA), was not in the chamber for the certification process. She arrived at the DNC headquarters some blocks away from the Capitol by motorcade at 11:30 a.m. and stayed until she was evacuated from the DNC at 1:14 p.m. Couple of questions about that? 1) did she not want to be present in the chamber at the momentous instant that her election as veep was certified? 2) Did she not have a duty to be present for voting on any of the procedure? Weird, a little bit. She has never explained what she was doing at the DNC that day.

Kamala Harris was in the DNC building when the pipe bomb was discovered there, around 1:07 p.m. The pipe bomb at the RNC had been discovered some 20 minutes prior, and it was the discovery of that bomb, at 12:44 p.m. that prompted the evacuation of the joint House / Senate session in Congress, not any breach of the Capitol building, which did not occur until 2:13, p.m., more than an hour later.

Now, to the FBI response to all this.

They quickly collected tons of closed-circuit video of a suspect planting these pipe bombs. The footage they released showed the suspect at a one-frame-per-second recording rate which, as Mike Benz points out, is a hundred times slower than any common gas station closed circuit camera nowadays. The FBI also doctored the recordings, specifically blurring out the section of the suspect’s face at one angle captured by a CC camera about eight meters away. The rectangular blur patch over his eyes can be clearly seen. How’d that happen?

The FBI also managed to botch every other aspect of the investigation into the act that actually triggered the evacuation of Congress that day — which was (repeat) not the breach of the Capitol building but the pipe bombs. In the months afterward, FBI Director Wray took agents off the case. He had in place as chief of the FBI’s Washington office an assistant director named Steven D’Antuono who had been in charge previously, as Detroit field chief, of the Gretchen Whitmer kidnapping case in which at least 12 confidential informants and three FBI agents were involved in what looked like an entrapment scheme. D’Antuono had demonstrated considerable skill in constructing skeezy FBI ops when he was put in charge of the DC office. The agency managed to lose the chain-of-custody for much of the evidence in the case, including originals of the videos, cell phone records, communications records between Capitol police, DC metropolitan police, Secret Service, and the FBI, and more.

So, the pipe bomber has been a cold case lo these many years. And now we’re informed as of yesterday’s FBI / DOJ press conference, that the FBI under Director Patel cracked the case using only information and evidence already in the FBI files. So, get this: there must be a record of exactly which agents were on the pipe bomber case those four years under Christopher Wray. There must be a record of who, by name, was in charge of chains-of-custody for all that evidence. And there must be a record of the senior agents and deputy directors who oversaw all their activities, all the way up to Director Wray. Why would they not be subject to charges of obstruction of justice?

All of this is just the pipe bomber subplot of the J6 story. There remains the weird business with then House Speaker Nancy Pelosi and her failure to request national guard protection at the US Capitol that day. And there remains the question of how many agents, assets, and confidential informants the FBI had in-place at the Capitol on J6, 2021, including Antifa members, and which actions, including the breach inside the building, they instigated. Then there is the question of the House J6 committee, how it was constructed with the help of lawfare ninja Norm Eisen, and how it deliberately destroyed all the evidence it collected over the months of its existence.

Be prepared to learn how the J6 “insurrection” was a government-sponsored seditious conspiracy and then ponder who, by name, will be held responsible for it. That’s the tapestry that Brian Cole, Jr.’s little thread leads to.

Shout out to Mike Benz for his nearly four-hour discussion about the pipe bomber case on “X”.

Tyler Durden Fri, 12/05/2025 - 16:20

Full Metal Retard: Walz Rolls Out Taxpayer-Funded Paid Leave For Illegals

Full Metal Retard: Walz Rolls Out Taxpayer-Funded Paid Leave For Illegals

Less than one week after the NY Times (of all rags) torched Minnesota governor Tim Walz over a massive and sprawling fraud scandal involving Somalians that federal prosecutors say siphoned over $1 billion from the state's social safety net programs, Walz is opening yet another avenue for fraud - giving taxpayer-funded leave illegal immigrants.

Under the Minnesota Paid Family and Medical Leave Program which Walz signed into law ahead of its Jan. 1 start date, "undocumented workers" will receive benefits, according to the Minnesota Chamber of Commerce's FAQ page. 

The program provides payments to Minnesota residents who need time away from work for "serious health" reasons, or to take care of a family member - be it an infant or an ill relative, the Washington Examiner reports. What's more, if an individual qualifies for both medical and family leave, they can "double dip" - getting taxpayer funds for a total of 20 weeks or 5.5 months, each year. These receiving benefits can also "top off" paid leave by using paid time off (PTO), sick days, and vacation hours in addition to their leave of absence. 

Program beneficiaries will receive between 55% and 90% of their regular wages while on paid leave - up to a maximum amount of $5,692 per month. 

"Are people going to abuse the program?" Walz replied when questioned on Tuesday at an event about potential fraud. "How disrespectful to people to assume that ailing Minnesotans are scamming. That’s what I hear from [critics] all the time. I trust Minnesotans."

"I believe they know you’re not gonna get rich, and it’s not your full salary. You’re not gonna scam and take time off," Walz continued. 

Meanwhile, Walz continues to downplay growing concerns after a $1 billion fraud was uncovered by City Journal, in which Somali immigrants were stealing welfare funds and funneling the money home to Somalia. 

The fraud involved a series of schemes that federal authorities say took root over the past five years, many centered within Minnesota’s Somali diaspora, where individuals established companies that billed state agencies for services that were never performed. Prosecutors say 59 people have been convicted across various cases so far, in three separate plots.

Minnesota’s fraud scandal stood out even in the context of rampant theft during the pandemic, when Americans stole tens of billions through unemployment benefits, business loans and other forms of aid, according to federal auditors. - NYT

Federal prosecutors have emphasized the seriousness of the cases being prosecuted by career federal attorney Joseph H. Thompson - who warned that the scale of fraud threatens public confidence. “No one will support these programs if they continue to be riddled with fraud,” Mr. Thompson said. “We’re losing our way of life in Minnesota in a very real way.”

Also meanwhile, Minnesota is awarding public outreach grants to community groups that are focused on "equity" and helping "priority populations" including minorities, LGBT people, immigrants, and people who can't speak English. 

Funding for the grants comes from a portion of the annual projected PFML payments. For fiscal 2026, grants will be awarded from an available fund of $1.9 million, increasing to $3.7 million the following year.

‘The next big fraud scandal in Minnesota’

Some policy experts are raising fraud-related concerns about bad actors abusing the paid leave program, especially exploiting the minimal eligibility criteria that allow illegal immigrants to benefit from the coverage plan.

“Why are Minnesota taxpayers, which I’m one, funding people who, legally speaking, should not be in America or in Minnesota?” questioned Bill Glahn, a policy fellow at the Minnesota-based Center of the American Experiment.

Proponents of PFML, however, believe that illegal migrants should reap the rewards if they pay into the program via the payroll tax, which is split between employers and employees, whose half is deducted from their wages. -Washington Examiner

Evidence continues to mount that Walz is, as President Trump claims, a complete retard. 

Tyler Durden Fri, 12/05/2025 - 15:40

Consumer Credit Below Expectations On Slowdown In Student, Auto Loans; Credit Card APRs Back To All Time High

Consumer Credit Below Expectations On Slowdown In Student, Auto Loans; Credit Card APRs Back To All Time High

After several months of wild swings, moments ago the Fed published the latest consumer credit report (G.19) and it was quite tame by recent volatile trends.

Total consumer credit rose by $9.178BN in October (which is more contemporaneous than more other data points we have received in recent weeks thanks to the govt shutdown), which was down from a downward revised $11.0BN in Sept ($13.09BN pre-revision), and below the $10.48BN median estimate. The latest monthly increase pushed the total to a new all-time high of $5.084 trillion. 

Looking at revolving credit (i.e., credit cards), the increase was $5.407BN to $1.317 trillion, the biggest monthly increase since July, if on the low side compared to the $8.7 billion average monthly increase from 2021 until the end of 2024.

Non-revolving credit (primarily auto and student loans), rose by $3.771BN, the lowest increase since February when we saw a decline of $2.4 billion. This increase brought the total nonrevolving credit to $3.767 trillion, a new record high.

While there was no detailed breakdown for October, the historical data showed that when broken down by components, student loans - now that the repayment moratorium is over - surged by $27.4 billion in Q3 to a record $1.841 trillion. As discussed previously, student loans have a magical capability of being abused for everything but college, which is why enterprising "students" binge on them any time they can to fund all their other purchases, except education-related. Meanwhile, car loans rose by a far more modest $4.0 billion to $1.564 trillion.

A few weeks ago Kelley Blue Book reported that the average new car price hit $50,000 for the first time ever. Well, as the next chart shows, there's a reason why: it's because the amount finance by new car loans also hit a new record high of $41K.

Finally, and this will come as a surprise to nobody, despite 1.50% in rate cuts by the Fed since last September, we can now confirm that rates on credit cards have gone... higher, as banks continue to bleed US consumers dry: at the start of 2025 the average rate on credit card accounts was 22.80%... and on Sept 30 the number was higher at 22.83%, just barely below the all time high of 23.37% set one year ago.

Tyler Durden Fri, 12/05/2025 - 15:30

Supreme Court Will Hear Trump Birthright Citizenship Case

Supreme Court Will Hear Trump Birthright Citizenship Case

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

The U.S. Supreme Court decided on Dec. 5 to review whether President Donald Trump’s executive order ending birthright citizenship is constitutional.

The Supreme Court in Washington on Oct. 20, 2025. Madalina Kilroy/The Epoch Times

The court’s decision took the form of an unsigned order without comment. No justices dissented. The case is known as Trump v. Barbara.

Trump’s Executive Order 14160, signed on Jan. 20, states that “the Fourteenth Amendment has never been interpreted to extend citizenship universally to everyone born within the United States.”

According to the order, an individual born in the United States is not “subject to the jurisdiction thereof” if that person’s mother was unlawfully present in the country and the individual’s father was not a U.S. citizen or lawful permanent resident at the time of the person’s birth.

It also states that the privilege of U.S. citizenship does not apply to an individual whose mother’s presence was lawful but temporary and whose father was neither a citizen nor a lawful permanent resident at the time of that individual’s birth.

The executive order has prompted debate over the meaning of the 14th Amendment’s citizenship clause, which states, “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled on July 23 that the executive order was “invalid because it contradicts the plain language of the Fourteenth Amendment’s grant of citizenship to ‘all persons born in the United States and subject to the jurisdiction thereof.’”

Before that, the U.S. District Court for the Western District of Washington ruled against the executive order on Feb. 6. That court granted a preliminary injunction blocking the order because it “subjects” the states challenging the order to “immediate economic and administrative harms.”

That court said the executive order would compel the states to disqualify many people it considers citizens and, in the process, cause them to lose federal funds they would otherwise be eligible to receive. The states are likely to succeed on their claim that the executive order violates the 14th Amendment, the court added.

No oral argument in the case has yet been scheduled.

This developing story will be updated.

Tyler Durden Fri, 12/05/2025 - 15:00

World's Billionaire Population Surges To New Record High: UBS

World's Billionaire Population Surges To New Record High: UBS

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

The ultra-rich grew even wealthier this year and the world has more billionaires than ever, according to Swiss bank UBS.

A megayacht, built by Dutch yacht builder Royal Van Lent for former Starbucks CEO Howard Schultz, is piloted past a bridge in Woubrugge, Netherlands, on May 28, 2025. Josh Walet/ANP/AFP via Getty Images

Global billionaire wealth hit a record $15.8 trillion in 2025, up by 13 percent from 2024, UBS said in its 11th Billionaire Ambitions Report, published on Dec. 4. This is the second-largest annual increase, after 2021, “lifted by existing tech billionaires’ appreciating wealth and the number of new billionaires across a range of sectors,” the report reads.

UBS’s analysis includes cash, securities, corporate ownership interests, property, and other material assets.

“In a highly uncertain time for geopolitics and economics, entrepreneurs are innovating at scale across a range of sectors and markets,” UBS Global Wealth Management executive Benjamin Cavalli said. “They’re creating wealth as they do so.”

Inheritance was also a factor in the growth of the billionaires’ ranks.

In the 12 months through April, 91 people became billionaires through inheritance, receiving almost $298 billion, and the trend is likely to continue as the great wealth transfer intensifies.

The bank calculated that at least $5.9 trillion will be inherited by billionaire children over the next 15 years, “either directly or indirectly through spouses who inherit it first and then pass it on.”

A majority of respondents, 82 percent, said they hope that their children develop the skills and values necessary to succeed on their own without “relying solely on inherited wealth.”

The number of billionaires rose by 8.8 percent in 2025, to 2,919 from 2,682 a year earlier.

The United States has the most billionaires worldwide, with 924 individuals owning approximately $6.9 trillion. This is followed by mainland China, where 470 billionaires own about $1.8 trillion. India (188 billionaires), Germany (156), and the UK (91) rounded out the top five.

UBS said this could change, as billionaires have become more mobile amid geopolitical concerns, tax policy changes, and living standards.

Debating the Wealth Tax

For years, U.S. and European governments have debated the idea of a wealth tax, or an annual levy on net worth, to be imposed once assets minus debts exceed a threshold.

In 2024, Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) introduced legislation—the Ultra-Millionaire Tax Act—to implement a wealth tax on individuals with more than $50 million.

“All my bill is asking is that when you make it big, bigger than $50 million dollars, then on that next dollar, you pitch in 2 cents, so everyone else can have a chance,” Warren said in March 2024.

The bill stalled in both chambers. Overseas, politicians and voters have been reluctant to back similar schemes.

Billionaire businessman Elon Musk speaks during a town hall meeting at the KI Convention Center in Green Bay, Wis., on March 30, 2025. Scott Olson/Getty Images

Nearly 80 percent of Swiss voters recently turned down a proposed 50 percent tax on inherited fortunes greater than 50 million Swiss francs ($62 million).

The French Parliament rejected a proposed 2 percent tax on wealth greater than 100 million euros ($116 million) in October. Although the UK has not adopted a formal wealth tax, it has announced plans to impose higher taxes on wealthier residents.

Economists have presented divergent opinions on the concept in general. Proponents say it can improve governments’ deteriorating fiscal health and address income inequality. Critics have said that it would disincentivize wealth creation.

In June 2024, a study by French economist Gabriel Zucman estimated that a Group of 20 motion to slap a minimum 2 percent tax on the ultra-wealthy could generate $250 billion in additional revenue.

Nobel Prize-winning economist Joseph Stiglitz, speaking at a 2020 virtual event, argued that the United States needs a wealth tax.

“Where we are today in the 21st century, a basic middle-class life is not accessible to very large portions of America,” Stiglitz said. “I think a wealth tax is a good idea because we have so much inequality in wealth ... [that] even a moderate rate like 3 percent on billionaires and 2 percent on those over $50 million ... [would raise] an enormous amount of revenue.”

Economist Ludwig von Mises wrote in “Human Action” that a wealth tax would be a detriment to capital accumulation and a hindrance to wealth creation, since it would disincentivize the building of wealth.

“Capital levies, inheritance and estate taxes, and income taxes are similarly self-defeating if carried to extremes,” Von Mises wrote. “The power to tax is, as Chief Justice [John] Marshall pertinently observed, the power to destroy.”

Years later, economist Milton Friedman also said a wealth levy would punish saving and investment because it would incentivize the affluent “to dissipate wealth.”

“Where do you get the factories?” Friedman said during a university lecture in the 1970s. “Where do you get the machines? Where do you get the capital investment? Where do you get the incentive to improve technology?”

According to Friedman, a wealth tax would be on top of all the other taxes wealthier households already pay.

The Tax Foundation concluded in 2024 that wealth taxes would produce unintended consequences, including job destruction, reduced capital and innovation, slower economic activity, and higher administrative costs. This would result in little revenue being generated, it said.

Tyler Durden Fri, 12/05/2025 - 14:40

Record-Long Gov't Shutdown Forces Southwest To Cut Guidance As Airline Warnings Pile Up

Record-Long Gov't Shutdown Forces Southwest To Cut Guidance As Airline Warnings Pile Up

First, Delta Air Lines warned that the record 43-day government shutdown last month, which throttled air traffic at 40 major airports, would slash its fourth-quarter profit by about $200 million. Now Southwest Airlines is following suit, cutting its full-year profit guidance as the shutdown's ripple effects continue to weigh on major carriers.

Southwest revealed in a new SEC filing:

"As a result of lower revenue due to the government shutdown, and the impact of higher fuel prices, the Company now expects its full-year 2025 EBIT to be approximately $500 million, compared with its prior expectation of $600 million to $800 million. Following the temporary decline in demand related to the shutdown, bookings have returned to previous expectations."

The good news is that the shutdown's impact didn't spill over into December. Southwest noted in its filing that bookings have already bounced back:

Following the temporary decline in demand related to the shutdown, bookings have returned to previous expectations.

Southwest shares are down about 1.5% in premarket trading following the earnings outlook downgrade. Year-to-date (as of Thursday's close), shares are up 6.5%. The float is short 6.56%, or about 33.5 million shares.

Delta Air Lines and Alaska Air Group, which owns Alaska Airlines and Hawaiian Airlines, both disclosed Wednesday that the shutdown's disruption would dent earnings this quarter.

"When you've got the Transportation Secretary telling people, 'We don't have controllers,' questioning the safety at some level of travel, which has never before happened, people said, 'Whoa, I'm going to hold up on making decisions,'" Delta Chief Executive Ed Bastian said Wednesday at a conference.

Last month, the Federal Aviation Administration restricted flights at major US airports in response to the government shutdown, which sent some federal transportation workers home. More importantly, air-traffic controllers called out sick, causing widespread disruptions and prompting Transportation Secretary Sean Duffy to reduce flight volumes nationwide to prevent chaos across airports.

Tyler Durden Fri, 12/05/2025 - 14:20

Noem Says US Travel Ban To Expand To Over 30 Countries

Noem Says US Travel Ban To Expand To Over 30 Countries

Authored by Aldgra Fredly via The Epoch Times,

Homeland Security Secretary Kristi Noem said on Dec. 4 that the Trump administration is looking to increase the number of countries subject to the U.S. travel ban to more than 30.

The United States currently imposes full or partial suspensions of entry on nationals from 19 countries, including Afghanistan, Haiti, Iran, Cuba, Somalia, Libya, Laos, Burma (also known as Myanmar), and Sudan.

Noem said more countries will be added, but did not name any.

“I won’t be specific on the number, but it’s over 30, and the president is continuing to evaluate countries,” she said in an interview on Fox News’ “The Ingraham Angle” that aired Dec. 4.

“Listen, if they don’t have a stable government there, if they don’t have a country that can sustain itself and tell us who those individuals are and help us vet them, why should we allow people from that country to come here to the United States?”

Noem blamed the Biden administration for the asylum backlog, which she said has exceeded a million cases.

She said credible applicants were unable to get through “because the Biden administration was just allowing people to come here and allowing them a free-for-all at the United States and our territories and our country, and then they weren’t vetting them and backlogging their cases.”

The U.S. Citizenship and Immigration Services (USCIS) last week halted all asylum decisions following the Nov. 26 shooting of two National Guard members in Washington, which authorities say was carried out by an Afghan national who entered the United States in September 2021 through a Biden-era resettlement program.

Noem on Dec. 2 called for a “full travel ban” on countries she says are flooding the United States with criminals and welfare dependents following a meeting with President Donald Trump.

“Our forefathers built this nation on blood, sweat, and the unyielding love of freedom—not for foreign invaders to slaughter our heroes, suck dry our hard-earned tax dollars, or snatch the benefits owed to AMERICANS. WE DON'T WANT THEM. NOT ONE,” she stated on X.

Trump has said that his administration would work to pause immigration from “third-world countries” to allow for the U.S. system’s full recovery.

Speaking to reporters on Nov. 30, the president said that his reference to third-world countries included “people from different countries that are not friendly to us,” and “countries that are out of control themselves,” pointing to Somalia as one example.

Trump also urged to suspend all federal benefits and subsidies to noncitizens, denaturalize immigrants who undermine domestic tranquility, and deport any foreigners deemed to be “a public charge, security risk, or non-compatible with Western civilization.”

Tyler Durden Fri, 12/05/2025 - 13:20

AT&T Scraps DEI Amid Broader Corporate Shift Toward Merit-Based Policies

AT&T Scraps DEI Amid Broader Corporate Shift Toward Merit-Based Policies

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

AT&T told federal regulators this week that it has eliminated all diversity, equity, and inclusion (DEI) policies and programs across its business, becoming the latest major corporation to unwind such initiatives amid a broader shift toward merit-based employment practices and heightened scrutiny from the Trump administration.

The AT&T logo on a building in Los Angeles on Aug. 10, 2017. Mike Blake/Reuters

In a Dec. 1 letter filed with the Federal Communications Commission (FCC) as part of AT&T’s bid to acquire U.S. Cellular spectrum licenses for roughly $1 billion, the company said it is “ending DEI-related policies ... not just in name but in substance,” following recent executive orders, Supreme Court rulings, and guidance from the Equal Employment Opportunity Commission.

AT&T said it has adjusted its employment and business practices “to ensure that they comply with all applicable laws and related requirements,” AT&T wrote to FCC Chairman Brendan Carr, adding that its hiring, training, and promotion practices “are not and will not be based on or limited by race, gender, or other protected characteristics.”

The company said it removed all training related to DEI, scrubbed internal and external messaging referencing the concept, discontinued sponsorships it deemed unrelated to its business strategy, and stopped conducting employee surveys focused on protected characteristics. AT&T also said it no longer uses DEI considerations in selecting suppliers and “will not have any roles focused on DEI.”

“AT&T has always stood for merit-based opportunity, and we are pleased to reaffirm our commitment to equal employment opportunity and nondiscrimination today,” the company wrote. “Consistent with applicable law, our multi-pronged approach allows employees to thrive in an environment free from invidious discrimination.”

Carr, a Republican tapped by President Donald Trump in January to lead the FCC, praised the disclosure.

“AT&T has now memorialized its commitment to ending DEI-related policies in an FCC filing,” he wrote on X.

He added that the companywide rollback followed changes announced earlier this year after pressure from conservative activist Robby Starbuck, who urged AT&T to dismantle programs he argued were discriminatory.

FCC Commissioner Anna Gomez, a Democrat, criticized the move, saying in a social media post that AT&T’s reversal “isn’t a sudden transformation of values, but a strategic financial play to curry favor with this FCC/Administration.”

Gomez said that abandoning “fairness and inclusion for short-term gain will be a stain to their reputation long into the future.”

Part of a Broader Corporate Retreat

AT&T’s shift comes as major corporations reassess or eliminate DEI initiatives in response to new legal risks and regulatory scrutiny. Wireless carrier T-Mobile said in July it was ending its DEI programs while seeking approval for two major transactions, including a $4.4 billion deal to acquire most of U.S. Cellular’s wireless operations. Verizon agreed to end its DEI program in the context of its $20 billion acquisition bid for Frontier Communications earlier this year.

The trend also extends beyond the telecommunications sector. Ford, McDonald’s, John Deere, Walmart, Nissan, Toyota, Molson Coors, Citibank, and Meta are among the large employers that have recently rebranded, scaled back, or ended DEI programs, citing changing legal standards after the Supreme Court’s 2023 affirmative action ruling and sweeping executive actions by Trump directing federal agencies—and encouraging the private sector—to abandon race- and sex-based preferences.

Disney Softens DEI Language Amid FCC Probe

The rollback wave has reached Hollywood as well. The Walt Disney Co. removed virtually all DEI-related terminology from its 2025 annual report to the Securities and Exchange Commission—the first such omission in at least five years—even as the company faces an FCC investigation into whether its ABC and related networks violated federal equal employment opportunity rules.

Carr ordered the probe in March, citing Disney initiatives that sought to “amplify underrepresented voices” and inclusion standards requiring a high percentage of characters, writers, directors, and crew to come from “underrepresented” groups. He said the agency must ensure that such practices do not embed “identity quotas” in violation of the Communications Act.

Disney said it was reviewing the FCC’s letter and plans to cooperate.

Tyler Durden Fri, 12/05/2025 - 12:00

Why Netflix Buying Warner Bros Would Be A Disaster For America

Why Netflix Buying Warner Bros Would Be A Disaster For America

As we detailed earlier, Netflix and Warner Bros Discovery announced today a $72 billion merger, in a deal intended to consolidate Hollywood into the hands of a streaming giant.

“Our mission has always been to entertain the world,” said Ted Sarandos, co-chief executive of Netflix.

He added that the combination of the two entertainment giants together “can give audiences more of what they love and help define the next century of storytelling.”

Here's a snapshot of the deal terms:

  • Each WBD share converts into $23.25 in cash plus $4.50 in Netflix stock

  • Boards of both companies unanimously approved the transaction

  • Closing in 12–18 months, pending regulatory review and WBD shareholder approval

  • Bankers for NFLX: Moelis, Skadden; additional financing by Wells Fargo, BNP, HSBC

  • Bankers for WBD: Allen & Co., J.P. Morgan, Evercore; legal counsel Wachtell and Debevoise

Netflix outbid other offers, including those from Paramount-Skydance and Comcast, earlier this year.

The former WBD CEO summed things up succinctly:

And as Matt Stoller details below via TheBIGNewsletter.com, this deal could be a disaster for America.

Already, filmmakers are coming out anonymously saying that the streaming giant, if the deal goes through, would “Hold a Noose Around the Theatrical Marketplace.” Just the fact that creative powerful storytellers are afraid of opposing this deal publicly should tell us something. The deal looks illegal and is likely to face a merger challenge, which I’m going to go into. It may ultimately even prompt a monopolization case against Netflix.

First, let’s talk about why this deal is happening and why it’s problematic.

Warner Bros Discovery is one of five remaining major film studios and the third biggest streamer via HBO Max (after Netflix and Amazon Prime). It has a lot of great assets, including “franchises like DC’s superheroes, Harry Potter, Lord of the Rings, Game of Thrones, Looney Tunes and Scooby-Doo. It is also the distributor of Legendary’s Dune franchise and Godzilla and King Kong films.” Warner Brothers has been sold multiple times in the last 30 years under the same premise that consolidation is necessary, and every single time the merger has been a failure. Nevertheless, they are still at it.

For the last eight months, there’s been an auction of Warner Bro. Discovery. The CEO of the company, David Zaslav, is a reviled executive who has done a poor job for shareholders and filmmakers, but will nonetheless get paid $500 million if the deal closes. But Zaslav is just the help, the real power here is cable billionaire John Malone.

There were multiple bidders in the process. Comcast/NBC and Paramount were the others, they owned traditional studios. Netflix, however, is different. It doesn’t release its content into theaters, and most people think that the goal of Sarandos is to kill the entire movie theater business in favor of streaming.

One very obvious problem with this deal is that movie theaters right now are in a precarious position, and Netflix will likely push them over the edge. A theater needs a certain number of new releases to be profitable, and are very close to that line right now. Previous mergers have actually cut the number of theatrical releases. Take the last big merger, when Disney bought Fox in 2019, cutting the number of major studios from six to five. The number of theatrical releases collapsed. Here’s a chart and commentary from investment bank TD Cowen making the point.

Before Disney acquired 20th Century Fox in 2019, those two studios combined for an average of 24 wide release (1000+ theaters) films annually. Over the last three years, the merged studios have only released an average of 14 films annually – a 44% decline. In contrast, total output for the rest of the industry is roughly flat, with a small decline in output from the other major studios (Warner, Universal, Sony, Paramount, Lionsgate, and Amazon/MGM) offset by increased output from smaller studios (such as A24, Angel, Neon Rated, and Roadside Attractions).

Netflix is the number one streamer, and would be buying the number three streamer. It would also be buying a large and important content library, which would presumably then be unavailable for potential rival streaming services. A Netflix-Warner merger is a recipe for monopolization, and would be a pretty straightforward challenge for an antitrust lawyer under the Clayton Act. Judges are always a crapshoot, but the story here is clear, and recent analogies work against this deal.

Yesterday, Biden antitrust chief Jonathan Kanter went on CNBC to discuss the situation, before the deal closed. He cast doubt on all the bidders, but pointed out that Netflx probably has the biggest legal risk among all the possible buyers. It would be a big streaming combination where prices to consumers are already going up, it would also mean that a big film and TV library currently being licensed by other streamers would be locked up by Netflix.

Kanter’s main point was that even attempting a deal is dangerous, since Warner Bros Discover would have to freeze its business for a year and half while it undergoes a review. If the merger fails, then its assets will have degraded in that time period. The risks of a deal are significant, and frankly, it is irresponsible of the Warner board to try to do this kind of sale.

Republican Senator Mike Lee also warned off Netflix, saying that the possible deal raises “serious competition questions - perhaps more so than any transaction I’ve seen in about a decade.”

If the deal is illegal, why would Netflix go ahead with it? Well, it’s probably bad legal advice. Sarandos hired antitrust lawyer Steve Sunshine of Skadden, and Sunshine is a bad lawyer. He is often over-optimistic in telling his clients to go ahead with deals.

Sunshine has advised on several high-profile mergers over the past decade that faced federal challenges. In multiple cases where he represented the acquiring company, the deals were blocked or later abandoned after intervention from the Department of Justice or the Federal Trade Commission. Those included Visa’s attempted purchase of Plaid, Adobe’s effort to buy Figma, and Sabre’s proposed acquisition of Farelogix.

It’s actually worse than it looks, because Sabre and Visa, as a result of their attempted mergers, eventually also drew monopolization charges. If Netflix wanted to set itself up for a monopolization case, an ill-fated attempt to buy Warner Bros Discovery would be a good way to get a bunch of internal documents over to enforcers.

One way to understand whether this deal is legal is to look at a very similar merger than happened a few years ago, since judges work through analogy. In 2022, Judge Florence Pan blocked the largest book publisher in America, Penguin, from buying its major rival, Simon & Schuster. At the time, the lawyers for the merger said the industry had to consolidate to compete with Amazon, technology required economies of scale, yada yada. The case against the merger was pretty simple; five book publishers combining into four meant fewer opportunities to publish interesting books and less money for writers.

The attempt to merge Warner Bros Discovery with a rival is a dynamic that is very similar to Penguin/Simon & Schuster. There were five major publishers trying to consolidate to crush the bargaining power of authors, in this case there are five major studios trying to consolidate to crush the bargaining power of writers, directors, and actors. There was a “tech” argument in the form of Amazon for books, for content that argument is in the form of streaming and YouTube. Additionally, we saw what happened when the number of major book publishers dropped from six to five in a previous merger, which was a decline in bidding intensity for books. We’ve seen the same thing after the Disney/Fox combination.

After Judge Pan blocked the Penguin/Simon & Schuster, private equity giant KKR bought Simon & Schuster. And while there was a lot of concern that KKR would be a problematic owner, I’m told that what happened was the opposite. The company invested more in new imprints and titles, and Simon & Schuster is now profitable and flourishing. Meanwhile, the CEO of Penguin was fired. We don’t hear a lot about this situation, because KKR keeps the financials private. But also, Wall Street dealmakers don’t like to tell a story about the virtues of a deal that didn’t happen, the value of competition. It’s always consolidation will happen, it’s inevitable. But it’s not.

We can also look at the flip side; when Microsoft bought Activision, and a judge did not block that deal, there were mass layoffs and prices went way up for gamers.

Something similar is likely here. All of the streamers have been raising their prices, led by Netflix. That trend will accelerate with consolidation.

And that brings me to the politics. This merger will overseen by the Justice Department, foreign enforcers, and a host of state attorneys general. It’ll be a long drawn out process. If Trump decides he doesn’t like the deal, then the Antitrust Division will challenge it. But even if he doesn’t, or settles a deal in ways that are problematic, other enforcers can oppose it.

The politics of antitrust in this environment are complex, but they initially line up against this acquisition deal. In the bidding process, Paramount tried to convince Warner’s board that their Netflix’s proposal was illegal. For instance, Paramount’s David Ellison hired former Trump Antitrust Division chief Makan Delrahim, and their pitch was that the Trump administration will let them do the merger, but won’t let anyone else. You can expect meaningful GOP opposition to this deal, unless Netflix chooses to curry favor with Trump with donations, promised changes to content, and so forth, or finds a way to get his Silicon Valley advisors to persuade him to accept it.

On the other side, there was strident opposition to the GOP-leaning Paramount getting control of Warner Bros Discovery because of fear that Trump would revamp CNN in a way that would make it more right-leaning. So with Netflix buying Warner Bros Discovery, there is some softening to this merger among certain Democrats. Here, for instance, is Biden official Neera Tanden.

And yet, it’s not like the Democrats as a whole are going to be favorable. Hollywood creatives dislike Netflix’s acquisition, and they are likely to determine how Democrats respond. More broadly, Democrats are coming to understand that consolidation is a problem. Yesterday, Jane Fonda put out a piece in The Ankler making that very point, noting “how this administration has used anticipated mergers as tools of political pressure and censorship.” She cited using antitrust hurdles to change news coverage, as well as the attempt to fire Jimmy Kimmel. And called up antitrust enforcers to protect free speech.

And we must demand that the Justice Department and state attorneys general evaluate every proposed entertainment merger for compliance with antitrust laws. These reviews cannot be treated as procedural formalities or political leverage; they are the last line of defense against media consolidation that threatens competition, creative freedom, and democratic discourse.

So those are the politics.

What’s odd about this situation is that the Warner board just doesn’t seem to consider running Warner Bros Discovery as a profitable company making good movies and TV shows, even though that’s a perfectly viable path. Hollywood worked for a hundred years with that model. And that’s what Simon & Schuster is doing now in book publishing.

So why this aggressive attempt to sell the corporation? A big reason is that Zazlav will be paid $500 million for closing the deal. But behind that payday is that the financiers who run Hollywood simply don’t believe the movie business can offer the kind of returns they see their monopolist peers in tech getting. And they lack any capacity for creativity or leadership.

That’s why antitrust laws exist, to prevent people like this from ruining important corporations. Ultimately, this story of consolidation in Hollywood has been longstanding, and it intersects with deregulation. The old Hollywood model was to make TV shows and movies, and to sell them through multiple channels; good content made good money. But starting 20 years ago, the price signals that used to communicate what consumers liked and didn’t like started breaking down, so making good content stopped translating into profits.

Why did they break down? Well, in 2019, I started tracing the collapse of the industry to the end of the regulations that prohibited vertical integration of TV and film. These were known as financial syndication rules in TV and the Paramount decrees in movies. In this framework, TV networks couldn’t make their own prime time shows, but had to buy them from others. Similarly movie theaters and studios had to be separated. These rules created an open market for content, and linked consumer preferences with quality content.

When these rules went away, Disney bought ABC/ESPN, then we had the Marvel universe dominating everything, then Peak TV as streamers tried to lock in market power. Today, dominant streaming giants and the end of open markets for content is destroying the industry. The lack of fair rules is why prices are going up, but also why quality is down, and why it’s harder for innovative content models to emerge.

The right way to fix this situation is, as Jon Voigt proposed, to restore the prohibitions against vertical integration, a streaming version of the financial syndication rules. But financiers like Sarandos, Malone and Zazlav hate that idea, and think the answer is consolidation. They figure that consumers will then have no choice but to pay more for streaming, regardless of quality. Netflix in particular seems to have a model of importing foreign content, which will ultimately end the American film industry entirely. That might get the return on capital they want, but probably not.

I still find this situation odd. There are many ways to make money, you can try to profit by making great movies, you can also try to profit by burning down studios and squeezing Americans with streaming price hikes. It’s bizarre that our financiers have convinced themselves the only way to do well is through arson. It’s especially weird they are doing it by trying to buy Warner, which Wall Street has sold many times to different companies. And it never works out.

The financiers who push the ‘consolidation is inevitable’ line are wrong. And it’s not just Simon & Schuster showing that. There are many examples of successful merger challenges leading to healthier market structures, such as ARM-Nvidia, Visa-Plaid, or Figma-Adobe. Nvidia is particularly interesting; instead of being tied up with consultants trying to merge a giant chip blueprint producer, it became the biggest company in the world.

Unfortunately, Warner Bros Discovery board members are trying to sell their company in an illegal deal. The ideal scenario now is a trial that puts the secrets of Hollywood executives and financiers on display, and crushes the financiers who think mergers are the only move in business. Then Hollywood can get back to the business of making good tv shows and movies.

Tyler Durden Fri, 12/05/2025 - 11:45

"No Longer Gold's Quiet Sidecar": Silver Surges To Record High As China Demand Exacerbates Squeeze

"No Longer Gold's Quiet Sidecar": Silver Surges To Record High As China Demand Exacerbates Squeeze

As we have detailed extensively recently (here, here, and here), silver's latest breakneck surge to record highs was in large part due to collapsing inventories of the precious metal in Chinese warehouses linked to the Shanghai Futures Exchange, which just hit the lowest level since 2015. 

The squeeze continues to accelerate and this morning the white metal topped $59 - a new record high...

...as rising rate-cut odds support the buying...

...and Chinese demand continues to build back inventories...

Strong inflows to exchange-traded funds added more impetus to a scorching rally, as Bloomberg reports, total additions to silver-backed ETFs in the four days through Thursday are already the highest for any full week since July, a strong signal of investor appetite despite signs silver’s gains may be overdone.

As Goldman notes, key catalysts for silver's recent rise include a depletion of Shanghai Futures Exchange inventories plus growing expectations for a dovish, Trump-backed Fed Chair.

“These flows can quickly amplify price moves and trigger short-term short squeezes,” said Dilin Wu, research strategist at Pepperstone Group Ltd.

Silver prices have roughly doubled this year, outpacing a 60% rise in gold. The rally accelerated in the last two months, in part thanks to a historic squeeze in London. While that crunch has eased in recent weeks as more metal was shipped to the world’s biggest silver trading hub, other markets are now seeing supply constraints. Chinese inventories are near their lowest in a decade.

“Silver’s outsized rally signals it’s no longer gold’s quiet sidecar,” said Hebe Chen, an analyst at Vantage Markets in Melbourne.

“The market is waking up to structural scarcity and fast-rising industrial demand, not just the haven story.”

Silver could rise to $62 an ounce in the coming three months “on the back of Fed cuts, robust investment demand, and physical deficit,” Citigroup Inc. analysts including Max Layton wrote in a note.

Additionally, in the latest note from UBS, Dominic Schnider and Wayne Gordon raised their silver price forecasts by USD 5–8/oz, projecting average prices of USD 60/oz in 2026, with upside excursions toward USD 65/oz possible but unlikely to persist. 

“From a macro perspective, silver should benefit from the same drivers expected to support gold – a softer US dollar, Fed rate cuts, and renewed appetite for safe-haven assets amid geopolitical concerns,” said Ewa Manthey, a commodity strategist at ING Bank.

It's not all easy riding from here though, as a "hawkish cut" could spur some profit-taking, and Goldman's Robert Quinn notes that the annual commodity index rebalance looms with potential outflows representing 7-8% of total open interest.

Tyler Durden Fri, 12/05/2025 - 11:40

Jobs Data From Alternative Sources May Drive Feds Next Move

Jobs Data From Alternative Sources May Drive Feds Next Move

Authored by Lance Roberts via Real Investment Advice,

With the federal government shutdown delaying critical economic reports, the official jobs data remains incomplete. Last week, the Bureau of Labor Statistics (BLS) released the September jobs report. However, the October report, originally expected earlier this month, remains in limbo, potentially permanently. The reason is due to the shutdown, as the BLS was unable to conduct the household survey. As such, the Fed will have to rely on alternative data for perspective on the strength or weakness of the labor market.

Therefore, in the absence of official jobs data, private-sector reports have become the best available gauge of labor market conditions. For example, the most recent ADP report showed only 42,000 private-sector jobs added in October. Crucially, it isn’t the “monthly number” that is crucial to consider, but the trend of the data. While there are undoubtedly many hopes for a resurgence of economic activity in 2026, the trend of employment data certainly doesn’t suggest that will be the case. At least not at the moment.

Another “real-time” source of jobs data is from Revelio Labs, which monitors job trends through company records and employee profiles. The most recent report from Revelio estimates a net decline of more than 9,000 jobs.

LinkUp, which tracks job listings, also reported a loss of 5,000 jobs in October.

While that data is certainly concerning on its own, according to the job posting site Indeed, the number of jobs being posted is also rolling over, with listings now back to 2021 levels, and year-over-year declines in postings in almost every sector they track.

While the BLS employment report is heavily flawed, it remains the standard by which the markets and the Fed act. However, the alternative shows that the slowdown in employment is widespread and not just a function of the Government shutdown. There is evidence of both job losses and a retraction of job openings across the entire economy. This includes logistics to healthcare, retail, and professional services. The hiring freezes are not isolated events, but reflect a structural shift in demand.

None of this indicates a labor collapse. But the shift in momentum is significant, and job creation is stalling with openings shrinking and layoffs rising. This slowdown often precedes broader economic weakness, suggesting that the Federal Reserve’s next monetary policy moves may be more focused on job creation than on concerns about inflation.

The Fed Must Weigh Jobs Data Against Inflation Risks

The Fed’s dual mandate, which is to achieve full employment and price stability, puts it in a difficult position right now. As noted above, there is clear evidence that economic weakness is increasing, with jobs data showing signs of weakening. On the other hand, inflation remains elevated, particularly in the services sector, with inflation expectations still above the Fed’s target.

For example, Fed Chair Jerome H. Powell recently said:

“In the near term, risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation…we remain committed to supporting maximum employment, bringing inflation sustainably to our 2 percent goal.”

At this juncture, the Fed must carefully assess the risks of its next policy moves. While softening jobs data suggests the employment objective is under threat, cutting rates and increasing monetary accommodation may spark a resurgence of inflation. However, if inflation remains high, the price-stability objective is under pressure; but higher inflation slows economic activity and employment. As President Mary C. Daly recently put it:

“At this point … the risks to the inflation side of our mandate and the risk to the employment side of our mandate are in better balance. And so, we have to be thoughtful about not loosening too early, but we have to be thoughtful about not holding too long.”

The Fed will likely place greater emphasis on alternative job data, wage trends, and inflation indicators in its next policy steps. Suppose these alternative signals continue to indicate a softening job market without wage inflation escalating. In that case, the Fed’s bias will likely tilt toward easing policy to prevent a sharper economic slowdown.

Looking back, the Fed has confronted similar scenarios when job growth weakened while inflation remained above target. In the minutes of a prior meeting, the Fed noted:

“A number of participants noted … although the labor market remained strong, … there was some risk that further cooling in labor market conditions could be associated with an increased pace of layoffs.”

In a more recent context, Powell said at the March 2025 Monetary Policy Forum:

“If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

That statement highlighted conditionality—policy is not on a preset course but rather depends on the data. However, it is a balancing act between cutting too much and not enough. Unfortunately, the Fed has a long history of doing both at the wrong times.

The problem for the Fed, as noted above, is that two mandates of full employment and price stability work against one another. To achieve full employment, prices will rise as economic activity increases. To reduce inflation, economic activity must slow, which in turn leads to fewer jobs being created. This is why the Fed consistently gets itself trapped in providing increasing or reducing accommodation to solve one problem, but creates a problem with the other.

What the Fed Will Likely Do Next

The Federal Reserve is staring at a familiar dilemma with the jobs data cooling and inflation remaining above target. Furthermore, it appears, at least outside the stock market, that traditional policy tools are becoming less effective in their impact.

We expect that over the coming months, the Fed will likely continue easing monetary policy at a cautious pace while reassuring the markets that it is remaining “data-driven.” The reality is that they are cutting policy in the hopes of stimulating economic growth, which could spark an inflationary uptick. However, with the risks of a deflationary impact from the onset of AI, demographic trends, and rising non-productive debt levels, the Fed continues to “push on a string.” While the October rate cut was a clear sign that officials are willing to respond to weakening economic conditions, the bar for navigating the current environment without a policy misstep remains exceptionally high.

However, we expect that the most likely path forward includes:

  • Cut rates in December, unless inflation readings rise meaningfully.
  • A return of focus to the BLS Employment reports
  • Consider a second 25 bps cut in early 2026 if wage growth continues to decelerate, quits remain low, and layoffs continue to rise.
  • Avoid aggressive rate cuts unless recession risks rise sharply. As Fed Chair Powell emphasized, the Fed won’t act prematurely: “We have to be careful not to move too soon or too late.”
  • Continue to balance downside risks with increased attention to credit conditions, consumer delinquencies, and business investment data.

The Fed will avoid rushing into a complete easing cycle unless both components of its mandate, employment and inflation, clearly support that move. Right now, the labor market is flashing yellow, but not red. Inflation is sticky, but no longer accelerating; therefore, we expect the Fed’s policy approach to reflect this.

How Investors Should Prepare

Investors should expect volatility. With conflicting economic signals, markets are vulnerable to sharp swings in response to Federal Reserve comments, inflation reports, and any new labor market indications. The path forward is not linear.

Here’s what to watch for and how to position:

  • Watch yield curves: If short-term yields fall further while long-term yields stabilize, the bond market is pricing in slower growth with softer inflation. This benefits duration-sensitive assets.
  • Favor high-quality fixed income: Slower job growth and lower inflation expectations improve the risk/reward profile of investment-grade credit and Treasuries.
  • Avoid chasing speculative assets: If the Fed remains cautious, liquidity conditions will stay tight. High-beta equities, unprofitable tech companies, and cryptocurrencies remain vulnerable.
  • Look for relative value in defensive sectors: Healthcare, consumer staples, and utilities offer protection if economic weakness deepens.
  • Stay flexible on equity allocation: Earnings forecasts may still be too optimistic. Slower jobs data often precedes revenue and margin pressure. Valuations remain elevated in many areas.
  • Watch small-business indicators: Job postings, wage plans, and hiring intentions in the NFIB and other surveys will be critical signals of broader labor market trends.

More broadly, investors should prepare for a period where monetary policy lacks a clear anchor. With a Fed that’s hesitant to act too aggressively, markets will likely overreact to soft guidance, regional inflation trends, and real-time labor indicators.

The economy is not falling off a cliff, but the momentum is clearly weakening, and the job market’s directional change is real. That weakness also suggests that inflation is no longer the problem. For the first time in nearly two years, the Fed’s focus is shifting, slowly, from restraining prices to protecting employment. Unfortunately, at least from a historical view, they have not managed such a shift without negative consequences.

While “this time could be different,” I wouldn’t make aggressive bets on that outcome.

Tyler Durden Fri, 12/05/2025 - 11:30

Iran Launches Live Fire Drills In Gulf, Flexing Reconstituted Missile Arsenal 

Iran Launches Live Fire Drills In Gulf, Flexing Reconstituted Missile Arsenal 

Iran's elite Revolutionary Guards (IRGC) Navy launched ballistic and cruise missiles at mock targets in the Persian Gulf on Friday as part of an announced two-day military drill designed to demonstrate its readiness against external threats, state media indicates, at a time the region is still on edge following the last June 12-day war involving Iran, Israel, and the United States.

Tehran is seeking to signal to its enemies that it has both regrouped and reconstituted its missiles and military assets after many hundreds of drones and ballistic missiles - including potentially hypersonic projectiles - were expended against Israel.

Iranian military file image

The new exercise includes 'live fire' drills, as the navy is launching volleys of ballistic and cruise missiles aimed at targets in the Oman Sea, state media reported on Friday. State media has identified that Qadr 110, Qadr 380 and Qadir cruise missiles, along with the 303 ballistic missile, have also been fired from inside Iran against sea targets off the coast.

Drone waves are also being deployed again mock enemy bases and targets, with part of the exercises focused on how to quickly respond to aerial threats against fast boats and coastal positions. One new aspect to the drills is that commanders are now touting AI-based operational capabilities.

Iran's military has been busy seeking to demonstrate its capabilities of late, as earlier this week Iran conducted an anti-terrorism exercise in East Azerbaijan province alongside members of the Shanghai Cooperation Organization. Press TV said the drills are a warning to adversaries that "any miscalculation would receive a decisive response."

According to some recent conclusions in the wake of the June war, the establishment think tank Soufan Center writes:

  • Iran shows no signs of altering its core policies despite the damage done by Israel and the United States to Iran’s strategic architecture.
  • A continuation of Iran’s existing policies is unlikely to bring the sanctions relief that moderate leaders such as elected President Masoud Pezeshkian deem vital to addressing economic deterioration.
  • Iran is resisting Trump’s pressure to dismantle its uranium enrichment infrastructure while leaving the door open to renewed diplomacy with the U.S. and its European allies.
  • Tehran is developing new methods and routes to resupply its Axis of Resistance partners, particularly Lebanese Hezbollah and the Houthis in Yemen.

On Friday Iranian lawmaker Fada-Hossein Maleki was quoted in international press reports as saying that the Trump administration had reached out, saying the US is open to new negotiations. He said whether to engage or not is the Supreme Leader's final decisions, while noting that "we tried every path, but in the end it led to war and the wall of distrust only grew higher."

Iranian state media put out footage of the new Gulf area drills Friday:

Maleki warned that Iran remains ready for any possible escalation. "We are far more prepared than before," he said.  Maleki admitted that while Iran suffered significant losses in the opening hours of the June surprise attack from Israel, at least "the enemy knows our readiness now."

Tyler Durden Fri, 12/05/2025 - 11:20

Supreme Court Allows Texas To Use A Congressional Map Favorable To Republicans In 2026

Supreme Court Allows Texas To Use A Congressional Map Favorable To Republicans In 2026

Via Headline USA,

A divided Supreme Court on Thursday came to the rescue of Texas Republicans, allowing next year’s elections to be held under the state’s congressional redistricting plan favorable to the GOP and pushed by President Donald Trump. 

With conservative justices in the majority, the court acted on an emergency request from Texas for quick action because qualifying in the new districts already has begun, with primary elections in March.

The Supreme Court’s order puts the 2-1 ruling blocking the map on hold at least until after the high court issues a final decision in the case.

Justice Samuel Alito had previously temporarily blocked the order while the full court considered the Texas appeal.

The justices cast doubt on the lower-court finding that race played a role in the new map, saying in an unsigned statement that Texas lawmakers had “avowedly partisan goals.”

In dissent, Justice Elena Kagan wrote for the three liberal justices that her colleagues should not have intervened at this point. Doing so, she wrote, “ensures that many Texas citizens, for no good reason, will be placed in electoral districts because of their race. And that result, as this Court has pronounced year in and year out, is a violation of the Constitution.”

The Texas congressional map enacted last summer was engineered to give Republicans five additional House seats.

The effort to preserve a slim Republican majority in the House in next year’s elections touched off a nationwide redistricting battle.

Texas was the first state to meet Trump’s demands in what has become an expanding national battle over redistricting.

Republicans drew the state’s new map to give the GOP five additional seats, and Missouri and North Carolina followed with new maps adding an additional Republican seat each. To counter those moves, California voters approved a ballot initiative to give Democrats an additional five seats there.

The redrawn maps are facing court challenges in California and Missouri.

A three-judge panel allowed the new North Carolina map to be used in the 2026 elections.

The Trump administration is suing to block the new California maps, but it called for the Supreme Court to keep the redrawn Texas districts in place.

The justices are separately considering a case from Louisiana that could further limit race-based districts under Section 2 of the Voting Rights Act. It’s unclear how the current round of redistricting would be affected by the outcome in the Louisiana case.

Texas Attorney General Ken Paxton said the Supreme Court’s order “defended Texas’s fundamental right to draw a map that ensures we are represented by Republicans.” He called the redistricting law “the Big Beautiful Map.”

“Texas is paving the way as we take our country back, district by district, state by state,” Paxton said in a statement.

“This map reflects the political climate of our state and is a massive win for Texas and every conservative who is tired of watching the left try to upend the political system with bogus lawsuits.”

Texas Gov. Greg Abbott issued a statement saying: “We won! Texas is officially — and legally — more red.”

U.S. Attorney General Pam Bondi hailed Thursday’s Supreme Court stay, posting on X, “Federal courts have no right to interfere with a State’s decision to redraw legislative maps for partisan reasons.” 

Tyler Durden Fri, 12/05/2025 - 10:45

According To Democrats, Current Economic Conditions Have Never (Ever) Been Worse

According To Democrats, Current Economic Conditions Have Never (Ever) Been Worse

Consumer confidence data from the University of Michigan showed an impressive (and surprising) rebound in preliminary December data with the headline print rising from near record lows at 51.0 to 53.3 (well above the 52.0 exp)...

Source: Bloomberg

This month’s increase was concentrated primarily among younger consumers. Overall, while views of current conditions were little changed, expectations improved, led by a 13% rise in expected personal finances, with improvements visible across age, income, education, and political affiliation.

Labor market expectations improved - 63% of consumers expect unemployment to rise in the year ahead, still much higher than the 40% seen a year ago, according to Surveys of Consumers Director Joanne Hsu.

After UMich respondents proclaimed their fear of losing their jobs last month was as high as during the peak of COVID and the GFC, this month saw those fears collapse...

Source: Bloomberg

Most notably, reality is finally starting to hit for the Democrats who were fearmongered into believing inflation would explode under Trump.

Year-ahead inflation expectations decreased from 4.5% last month to 4.1% this month, the lowest reading since January 2025. This marks four consecutive months of declines. Additionally, long-run inflation expectations softened from 3.4% last month to 3.2% in December, matching the January 2025 reading

Source: Bloomberg

Independents saw long-term inflation expectations plunge...

Source: UMich

But it was the Democrats that really came to their senses...

Source: Bloomberg

Simply put, UMich's Hsu is forced to admit that consumers have noted that the soaring inflation they feared in April and May 2025 at the height of tariff developments has not come to fruition at this time.

Hsu couldn't help but play down the improvements with her concluding remarks: 

"Consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices."

Finally, according to UMich Democratic respondents, current conditions sentiment has never been worse...ever... and the gap between Republican and Democrat confidence has never been wider...

But, no bias, right?

Tyler Durden Fri, 12/05/2025 - 10:30

Peace In Our Time? Don't Count On It

Peace In Our Time? Don't Count On It

By Benjamin Picton, Senior Market Strategist at Rabobank

US equities closed mixed on Thursday, despite solid leads from European markets where all of the major indices closed higher. Bond yields were mostly higher with US 10s pushing up 3.5bps to 4.09% and the 2-year yield lifting by almost 4bps to 3.52%. There was notable price action in the Aussie market where 2-year yields rose by 7.5bps to 3.98% after the Wall Street Journal reported that a number of local banks are considering updating their forecasts to project an RBA rate hike as early as February. 

The rate hike chatter down under has been egged-on by a run of higher-than-expected inflation, strong household consumption figures and a lift in activity in Australia’s invincible housing market since the RBA began cutting interest rates back in February. A weaker-than-expected Q3 GDP result that showed growth of 0.4% in the quarter – compared to estimates of 0.7% - wasn’t enough to derail the push higher in yields as commentators pointed out that domestic final demand was strong and that the growth miss was largely attributable to a drawdown in inventories by mining companies. 

We’re a little more circumspect on the prospect for hikes early next year in Aussie. The latest GDP figures confirmed that year-on-year productivity growth (as measured by GDP per hour worked) rose from 0.2% in Q2 to 0.8% in Q3, which raises the prospect that productivity growth might exceed the RBA’s 0.9% year-end forecast and thereby imply a higher potential growth rate for the economy. Similarly, the household savings ratio was upgraded substantially to levels that now exceed those observed in pre-Covid times and substantially exceed the RBA’s projections issued last month. That suggests that the intertemporal rate of substitution was more skewed towards saving (rather than spending) than the RBA thought, and implies that monetary policy may have been more restrictive than thought. That’s as growth gross national expenditure remains in-line with the RBA forecasts, the labour market continues to soften, Aussie equities underperform global peers and growth in rents continues to moderate.

If all of that isn’t reason enough to be skeptical of a February rate hike, the trade-weighted AUD already exceeds RBA forecasts even as the US Fed looks poised to cut rates next week, the JPY remains in a weakening trend and the PBOC begins fixing the CNY weaker than estimates. A February rate hike course reversal from one of the most notoriously staid central banks while all of that is going on? The 2-year yield might say yes, but don’t count on it.

While Australia navel-gazes over local issues, the economic picture elsewhere seems to be deteriorating. As noted yesterday, the US ADP employment survey for November was a miss, recording a loss of 32,000 jobs. Similarly, the Challenger job cuts figures released overnight show that in the year to November this year has seen more job losses than any non-recession year except 2002. The UK construction PMI printed at an abysmal 39.4 to follow Canada’s dreadful services PMI of 44.3 and a decent drop in US capacity utilization reported the day before that makes today’s PCE inflation release all the more interesting.

One bright spot seems to be US weekly jobless claims, where the number of new claimants fell to just 191,000 and the four-week average fell by approximately 10,000 to 215,000 – the lowest level since January. So, more job cuts but less claimants. Can we chalk that dynamic up to the activities of ICE? Axios today reports that daily arrests are surging, and the Wall Street Journal reports that the Trump administration is preparing to further tighten controls over the work rights of legal immigrants. Fewer jobless claims despite fewer jobs does seem to suggest a shrinking labor pool.

In geopolitical news the FT reports that French President Macron has warned of a risk of the “disintegration of the international order” following a meeting with Xi Jinping. Such revelations will not be news to regular readers of this missive – we have been warning of this since 2016 at least, but European politicians have been a little slow to catch on. President Xi, who has repeatedly criticized the international order as a US-led order that is too Western-centric and marginalizes the global South, encouraged Macron to “hold high the banner of multilateralism” as the two sides made all the right noises on mutual investment.

The kind of multilateralism that Xi has in mind is an important point to consider. Is Xi talking about an idealistic evolution of the United Nations where more power is given to the developing world but disputes are resolved via dialogue? Or is he talking about ending US hegemony to carve the world up into spheres of influence for regional great powers to preside over? Xi’s reluctance to get involved in brokering a peace deal in Ukraine and recent naval deployments in the wake of a diplomatic spat with Japan will make many nervous that it is the latter.

A spheres of influence paradigm is certainly favorable in the eyes of Vladimir Putin. He has reportedly rejected the latest peace overtures from US special envoy Witkoff and told India Today that Ukrainian troops will either leave the Donbas region or Russia will “liberate these territories by force”. Kremlin officials have reportedly told journalists that a peace deal remains a long way off. The Wall Street Journal editorial today says “maybe it is time to conclude that Mr. Putin doesn’t want peace” while arguing that Putin has no incentive to negotiate in good faith while he feels that he is winning.

So, peace in our time? Don’t count on it.

Tyler Durden Fri, 12/05/2025 - 10:20

Fed's Favorite Inflation Indicator Continues To Show No Signs Of Runaway Tariff Costs

Fed's Favorite Inflation Indicator Continues To Show No Signs Of Runaway Tariff Costs

First things first, this is September data... so horribly lagged/stale... but, it's all we have, so let's dive in.

The Fed's favorite inflation indicator - Core PCE - rose 0.2% MoM (as expected), which leave it up 2.8% YoY (as expected), slightly lower than August +2.9%...

Source: Bloomberg

On an annual basis, the headline PCE rose 2.8%, up modestly from 2.7% YoY in August (as expected). That is the highest since April 2024, but again remains in the range of the last two years...

...showing no signs at all of the runaway tariff-driven costs that so many establishment economists proclaimed was imminent.

Services costs (not tariff-related directly) attributed the most to the rising costs while Goods prices were barely positive...

The closely-watched SuperCore PCE slipped to +3.25% YoY...

... as Financial Services and Food Service/Accommodations stalled out.

Also trending lower overall, ruining the 'Trump will kill us all with tariffs' narrative.

Meanwhile, amid rising prices, income growth outpaced spending growth for a change...

This left the savings rate at 4.7%, unchanged from August and at lowest since Dec 2024...

One place where there continues to be tangible improvement is the divergence between private and government sector wage growth in September: 

  • Private worker wages up 5.8% in Sept, up from 5.2% and highest since March 2024
  • Govt worker wages up 4.2% in Sept, unch vs August and lowest since August 2021

TL/DR: while this data is admittedly stale, it shows no signs of 1) tariff-driven inflation or 2) a suffering consumer.

Tyler Durden Fri, 12/05/2025 - 10:15

Court Eases Sentence For Afghan Who 'Showed Restraint' After 'Only' Stabbing Teacher Six Times

Court Eases Sentence For Afghan Who 'Showed Restraint' After 'Only' Stabbing Teacher Six Times

Via Remix News,

A 29-year-old Afghan migrant has been sentenced to six years in prison for stabbing a 27-year-old teacher at random on the street, in the middle of the day, in the German city of Kirchheim unter Teck.

However, despite stabbing his victim four times in the back and twice in the thigh, the fact that the Afghan stopped stabbing her once she screamed was enough to convince the court in Stuttgart to drop the attempted murder charge.

On March 14 of this year, the teacher was seriously injured while walking home from work. The 29-year-old, who did not know his victim, walked up to her from behind in a residential area and grabbed her neck. With his other hand, he began stabbing her in the back with a 9.5-centimeter knife four times. He then stabbed her twice in her thigh.

The woman began screaming, at which time, her attacker let her go and ran away.

Based on the fact that he stopped stabbing her and ran away, the court claimed this was a “withdrawal from attempted murder,” according to reporting from Yvonne Kussman for Aktuelle Informiert. Therefore, since the man could have kept stabbing her but stopped, he was only convicted of the lesser crime of previous bodily harm.

A similar legal ruling was recently applied to another controversial case in Germany involving SPD Mayor Iris Stalze, who was tortured and stabbed by her adopted daughter from Africa, to the point that she almost died. In that case as well, the ruling of a “withdrawal” was also issued, and no arrest was even made, with legal experts calling the ruling into question.

Regarding the details of this case involving the Afghan stabbing, it is worth noting that this “withdrawal” clause in the German legal system can only be invoked when there is a “genuine” withdrawal.

As Remix News cited: “If the perpetrator believes they have done everything necessary for the victim to die, they must then perform a voluntary and genuine counter-act that causes the prevention of the victim’s death.”

In other words, while the Afghan stopped, the question is what motivated his “withdrawal.” Did he truly not want to kill her? A “genuine” withdrawal, in German legal tradition, would have likely meant he stopped stabbing the woman and then began treating her wounds and called the police. Instead, he just stabbed her and ran away, raising questions about whether this should constitute a “genuine” withdrawal of attempted murder. Nevertheless, that is how the court ruled.

The 27-year-old teacher suffered serious injuries, but they were not life-threatening and she was able to leave the hospital after three days. She also did not suffer from any permanent damage.

However, she is reportedly left with serious psychological damage from the attack.

“I can no longer leave the house alone, I have no stamina, and my mobility is limited,” she said after the attack, adding, “My life has been turned upside down.”

The defendant denied that he stabbed the woman; however, DNA traces of his were found on the teacher’s clothing. He was also found with the knife used in the crime.

The Afghan man has no certificate proving he even graduated from high school nor vocational training. He left Afghanistan in 2018 and entered several European countries. He was in Germany briefly in 2023, left, and then came back again to apply for asylum.

Despite receiving social benefits, he broke into a bank branch in Kirchheim unter Teck after hours and stole a small amount of cash. While in custody, his DNA was linked to the stabbing of the teacher.

He has been sentenced to six years in prison for the stabbing attack and an additional year and a half in prison for the bank robberies.

Read more here...

Tyler Durden Fri, 12/05/2025 - 09:25

Pages