CBO Finds Big Beautiful Bill Raises US Deficit By $2.4 Trillion, Saddles Next President With Fiscal Drag

Update (1238ET): White House Office of Management and Budget Director Russ Vought has hit back over the Congressional Budget Office's scoring of the 'Big Beautiful Bill' - writing on X:

OMB just reviewed the new CBO score of the One Big Beautiful bill. It confirms what we knew about the bill at House passage. The bill REDUCES deficits by $1.4 trillion over ten years when you adjust for CBO's one big gimmick--not using a realistic current policy baseline. It includes $1.7 trillion in mandatory savings, the most in history. If you care about deficits and debt, this bill dramatically improves the fiscal picture.

*  *  *

The Congressional Budget Office (CBO) is out with its official scoring of the Big Beautiful Bill in its current form - and it's ugly (keep in mind that the White House just called out the CBO a 'partisan and political' institution stacked with Democrats). 

Speaker of the House Mike Johnson, R-La., and President Donald Trump arrive for a House Republican conference meeting, on May 20, 2025, at the U.S. Capitol in Washington.
Julia Demaree Nikhinson—AP

For starters, the bill would boost total projected deficits from $1.7 trillion to $2.3 trillion over 10 years, and would nearly double the primary (non-interest) deficit - largely attributed to a $3.8 trillion drop in tax revenue. 

CBO out with its score of the Big, Beautiful, Budget-Buster: sees it raising US deficit by $2.4 trillion over 10 years, almost identical to what CRFB said ($2.3 trillion). This is mostly due to $3.7TN in lower tax revenues, offset by $1.25TN in lower spending pic.twitter.com/4OoxaBJjEH

— zerohedge (@zerohedge) June 4, 2025

And as a reminder, Goldman points out that the Big Beautiful Bill has tax cuts front-loaded, spending cuts back-loaded (after 2029), so the next president is stuck with the fiscal drag.

According to Bloomberg, the CBO report indicates that 10.9 million people could be left without health insurance in 2034, including 1.4 million without verified citizenship, nationality or satisfactory immigration status who would lose coverage from state-only funded programs.

The CBO's estimate comes one day after billionaire Elon Musk slammed the bill as a "disgusting abomination" that makes no effort to codify any federal savings found by DOGE, and continues America's addition to spending. Musk's pushback was met with key support by Sen. Rand Paul (R-KY), who's vowed to vote 'no' on the bill in its current form. Rep. Thomas Massie, one of two House Republicans to vote 'no' on the bill which barely passed the House, also supported Musk. 

I agree with Elon. We have both seen the massive waste in government spending and we know another $5 trillion in debt is a huge mistake.

We can and must do better. https://t.co/LwPNJZv5zo

— Rand Paul (@RandPaul) June 3, 2025

Partisan CBO?

On Tuesday, White House press secretary Karoline Leavitt claimed the CBO was "partisan and political," telling reporters: "There hasn’t been a single staffer in the entire Congressional Budget Office that has contributed to a Republican since the year 2000. But guess what? There have been many staffers within the Congressional Budget Office who have contributed to Democrat candidates and politicians every single cycle." 

"So unfortunately, this is another institution in our country that has become partisan and political, and we are very confident in our own economic analysis of this bill," Leavitt continued. 

Collins points out GOP complaints about the deficit, and Leavitt says the White House says they’re wrong — then brags no CBO staffer has donated to Republicans since 2000.

Because math and facts are overrated when you can just flex donation records. pic.twitter.com/RTAM9kICbm

— The Vivlia (@TVivlia) June 4, 2025

Heritage Foundation senior fellow Stephen Moore noted in the Daily Caller that the "CBO Almost Always Gets it Wrong" - writing in the Daily Caller:

The CBO does not measure the economy-wide benefits of lower tax rates and thus it doesn’t adjust for higher employment and growth – which happens every time we cut tax rates.

We also know that the 2017 scoring of the Trump Tax Cut has already underestimated the revenues from the first six years of the law by a massive $1 trillion or more.

Last week, President Donald Trump posted on Truth Social that "The Democrat inspired and ‘controlled’ Congressional Budget Office (CBO) purposefully gave us an EXTREMELY LOW level of Growth, 1.8% over 10 years. How ridiculous and unpatriotic is that! They did the same thing to us in 2017, and we DOUBLED their numbers."

House Speaker Mike Johnson also slammed the CBO, telling NBC's "Meet the Press" that "they always underestimate the growth that will be brought about by tax cuts and reduction in regulations."

Johnson has obviously been preparing for the CBO report - posting this clip of himself on Fox News last week, and slamming the CBO for its 'historically low growth rate of 1.8%." 

The CBO is notorious for getting things WRONG. So, what does it get wrong about the One Big Beautiful Bill? A lot.

It assumes a historically low growth rate of just 1.8%.

But POTUS’s bill will be jet fuel for America’s economy. He delivered the best economy in the world… pic.twitter.com/fl3e2AC0H8

— Speaker Mike Johnson (@SpeakerJohnson) May 25, 2025

Tyler Durden Wed, 06/04/2025 - 13:00

Marc Andreessen Predicts 'Biggest Industry In The History Of The Planet'

Billionaire venture capitalist Marc Andreessen predicts that humanoid robotics will become the most lucrative market in history, surpassing the internet’s economic impact. In an interview with Palantir co-founder Joe Lonsdale at a forum hosted by the Ronald Reagan Presidential Foundation & Institute, Andreessen urged the United States to lead the development of robot factories, positioning the nation to drive what he called the next Industrial Revolution.

“You’ve likely seen Elon Musk’s Tesla Optimus robot,” Andreessen told the audience, referencing the humanoid robot being developed at Musk’s electric vehicle company. “These humanoid robots—this general-purpose robotics trend—will take off in the next decade, and it will happen at an enormous scale.”

.@pmarca to @JTLonsdale: 'Hundreds of Billions' of Robots Coming, U.S. Can Lead Next Industrial Revolution by Building Them

"You've all probably seen, @elonmusk has this @Tesla_Optimus robot that he's building. These humanoid robots, the general-purpose robotics thing, is going… pic.twitter.com/yqbkup13TG

— Josh Caplan (@joshdcaplan) June 1, 2025

Andreessen, co-founder of the tech investment firm Andreessen Horowitz (A16Z), envisioned a future with “billions, perhaps tens of billions” of robots performing tasks from industrial production to healthcare. “I think there’s a plausible argument, which Elon also believes, that robotics is going to be the biggest industry in the history of the planet,” he said. ARK Investment Management LLC’s Big Ideas 2025 report supports this vision, forecasting a transformative robotics industry that boosts productivity across sectors. It highlights specialized robots, such as household appliances, slashing time spent on daily tasks. The report projects generalizable robotics could generate over $26 trillion in global revenue, split evenly between $13 trillion in household robotics and $13 trillion in manufacturing robotics.

The global Smart Robots Market is expected to grow from a valuation of USD 33.83 billion in 2024 to $135.83 billion by 2034, reflecting a robust CAGR of 26.5%, according to a new report by The Research Insights. Fueled by the integration of artificial intelligence and advanced sensor technologies, smart robots are expanding into diverse applications. Global demand for enhanced productivity and safety across organizations, coupled with the synergy of cognitive systems and sensor technology, is driving rapid adoption and propelling the market’s worldwide growth.

However, competition is intensifying. China’s “Made in China 2025” initiative aims to deploy millions of robots, while Japan and South Korea advance their own automation ecosystems.

“We don’t need to bring back old manufacturing jobs,” Andreessen said, dismissing labor-intensive assembly lines. Instead, he championed what Musk calls “alien dreadnought factories”—highly automated, state-of-the-art facilities producing robots, drones, and autonomous vehicles at unprecedented scale.

Subscribe to CAPITAL, the daily newsletter that cuts through the chaos of Tech, Markets, and Freedom to give you the truth. 

Andreessen described a future of transformative economic growth, with thousands of new industrial categories emerging nationwide. “Coastal tech investments will yield massive returns, but we’ll create tens or hundreds of millions of jobs in rural areas,” he said, emphasizing advanced manufacturing’s potential to revitalize America’s heartland.

This shift, he argued, would enable the U.S. to lead the “third or fourth Industrial Revolution,” setting global standards for robotics and automation while fostering widespread prosperity.

“We shouldn’t be screwing screws by hand on rubber mats for 10 hours,” the billionaire said. “We should be designing and building the future.” Andreessen warned that if the U.S. fails to rapidly scale robot factories, China could seize the lead. “We have to do this because if we don’t, China will, and we don’t want to live in that world,” he said.

Last month, Musk declared that the company’s Optimus humanoid robot, now capable of learning tasks from human instructions, will be “the biggest product of all time.” Musk argued Tesla’s unique combination of AI, manufacturing scale, and robotics expertise positions it as the only company poised to produce intelligent humanoid robots at scale. “This is a super big deal,” he added, predicting Optimus’s impact could outstrip the next biggest product by a factor of ten.

Tyler Durden Wed, 06/04/2025 - 12:45

Rubio Condemns CCP's Tiananmen Square Massacre, Marking 36th Anniversary

Authored by Catherine Yang via The Epoch Times,

U.S. Secretary of State Marco Rubio condemned the Chinese Communist Party’s (CCP) “brutal crackdown” of the June 4, 1989, student protests in Tiananmen Square, in a social media post ahead of the anniversary.

“We remember the Chinese Communist Party’s brutal crackdown 36 years ago in Tiananmen Square and commemorate the courage of the innocent people killed and imprisoned that day. Freedom, democracy, and self-rule are human principles the CCP cannot erase,” he wrote on X.

Rubio also issued a State Department statement commemorating the students, with a rebuke to the CCP for its censorship and human rights abuses.

It noted that the pro-democracy demonstrations had begun in the spring of 1989 and “inspired a national movement.”

“Hundreds of thousands of ordinary people in the capital and throughout China took to the streets for weeks to exercise their freedoms of expression and peaceful assembly by advocating for democracy, human rights, and an end to rampant corruption,” the statement reads.

“The CCP responded with a brutal crackdown, sending the People’s Liberation Army (PLA) to open fire in an attempt to extinguish the pro-democracy sentiments of unarmed civilians gathered on Beijing’s streets and in Tiananmen Square.”

The CCP met protesters with tanks and opened fire, and protester casualties numbered in the thousands, but Chinese authorities, in one of its best-known instances of censorship, told the Chinese people that the students had been the ones to attack the soldiers.

“The CCP actively tries to censor the facts, but the world will never forget,” Rubio stated.

Rubio commemorated the bravery of the demonstrators who were killed, “as well as those who continue to suffer persecution as they seek accountability and justice for the events of June 4, 1989.”

“Their courage in the face of certain danger reminds us that the principles of freedom, democracy, and self-rule are not just American principles. They are human principles the CCP cannot erase,” Rubio said.

Then-President George H.W. Bush condemned the CCP’s actions, and the State Department has continued to do so annually.

Human rights activists around the world commemorate the anniversary of the Tiananmen Square massacre, but in China, the CCP surveils and limits the movement of known human rights advocates ahead of major anniversaries like June 4 to prevent demonstrations.

The CCP has a long record of human rights abuses, but regularly warns other nations not to broach the topic. Chinese defectors revealed two decades ago that the CCP considers some groups to be “poisonous” to its power because they may present a different vision for China: the spiritual discipline Falun Gong, Tibetans, supporters of democracy in China, supporters of Taiwan’s independence, and most recently Uyghurs, an ethnic minority the CCP persecutes in Xinjiang. The CCP terms them the “five poisons.”

Tyler Durden Wed, 06/04/2025 - 12:25

Bitcoin Becomes Safe Collateral: JPMorgan To Offer Loans Financed With Crypto Assets

Less than 8 years ago, when bitcoin was trading at $4,000 (compared to $104,000 today), Jamie Dimon demonstrated once again that he may be an ok big bank CEO (after all, without TARP JPMorgan would not exist today), but he is a terrible visionary when he warned his traders that anyone caught trading bitcoin"would be fired."

Fast forward to today, then, when not only will Jamie (who at almost 70 should really be thinking succession) not fire anyone at JPM for trading the best performing asset of the millennium, if not all time, but according to Bloomberg JPM will soon allow trading and wealth-management clients use some cryptocurrency-linked assets as collateral for loans, a major step by the biggest US bank to make inroads into an industry President Donald Trump has pledged to support.

According to the report, the firm will start providing financing against crypto exchange-traded funds, beginning with BlackRock’s iShares Bitcoin Trust (IBIT), in the coming weeks, people familiar with the matter said. The move marks the latest effort involving crypto among the biggest US banks after the Trump administration started removing regulatory barriers.

Just as importantly, JPMorgan - which until now refused to add crypto to the calculation of net worth - will also begin taking wealth-management clients’ crypto holdings into account when assessing their overall net worth and liquid assets, the people said, asking not to be named as the plans aren’t public. That means cryptocurrencies will be given similar treatment to stocks, cars or art when calculating how much a client can borrow against their assets.

Which, incidentally, is precisely what we predicted last November when we said that Bitcoin is about to become "safe collateral."

Bitcoin is about to become "safe collateral"

Cantor Fitzgerald is discussing receiving support from Tether for its planned multibillion-dollar program to lend dollars to clients who put up Bitcoin as collateral: BBG

— zerohedge (@zerohedge) November 24, 2024

JPMorgan was one of the first major banks to start using blockchain technology for services like payments, and counts crypto exchanges like Coinbase among its clients. Which is ironic because its CEO remains a vocal crypto skeptic, and while he won't fire the firm's bitcoin traders, he said as recently as the firm’s investor day in May that he’s “not a fan” of Bitcoin, but that JPMorgan would allow clients to buy it.

“I don’t think we should smoke, but I defend your right to smoke,” Dimon said at the time. “I defend your right to buy Bitcoin, go at it.”

And starting in the next few days, Dimon will start issuing cigarette-backed loans... pardon bitcoin-backed.

The fact that IBIT - and soon all other crypto assets- will be eligible collateral, means that large holders no longer need to sell when they need access to liquidity, but can simply pledge their IBIT for immediate funding needs, breaking the loop of forced liquidations which until recently allowed coordinated short attacks to pressure the market at will. In fact, with IBIT pledgable, it will allow what many have called a perpetual cycle of buying bitcoin, using it to issue loans, then using the loan proceeds to buy even more bitcoin, a cycle which was responsible for much of the cryptocurrency surge in the 2020-2021 period. 

Big banks have been making plans to give clients access to crypto this year, responding to client demand and a more favorable regulatory environment. Rival Morgan Stanley is working on a plan to add cryptocurrency trading to its E*Trade platform, Bloomberg reported last month.

It's not just bitcoin: the overhaul at JPM will also benefit holder of Ether as other crypto ETFs are expected to be included after the change is made. 

Spot-Bitcoin ETFs were introduced in the US in January 2024 and have swelled to oversee a combined $128 billion, making them one of the most successful launches ever. Meanwhile, the cryptocurrency itself has skyrocketed since Trump won the presidential election last November, reaching an all-time high of $111,980 in May. The Bloomberg report helped push the price of both bitcoin and ether near session highs.

As for what happens next, we predicted that as well last December when we said that it is just a matter of time before the "creative" bank that came up with Credit Default Swaps issues a bitcoin SPV that offers institutional buyers a 5% coupon (before leverage).

We are probably weeks away from JPMorgan offering a bitcoin SPV to institutions which pays a 5% coupon (before leverage)

— zerohedge (@zerohedge) December 5, 2024

We are confident that this will very soon happen. 

Tyler Durden Wed, 06/04/2025 - 12:05

Fink-ing About A New Globalization

By Michael Every of Rabobank

Fink-ing about a new globalisation

In a daily markets update there are many times when all that matters are the economic data. There are also days when the bigger picture matters more. The dichotomy between yesterday’s weak US factory orders (-3.7%) and the surprise increase in JOLTS (7.4m) is worth a cursory glance, as is weaker-than-expected Aussie Q1 GDP at 0.2% q-o-q vs. 0.4% expected (so, “rate cuts!”), but none of them mean much vs. what we just saw at the global strategy level.

Iran said it could accept a proposed US nuclear deal whereby a regional consortium (it, Qatar, Saudi Arabia, the UAE, and maybe Turkey) would see civilian uranium enrichment under IAEA supervision if it’s done on its soil - otherwise it will reject it, opening the door to a US or Israeli strike. Is this geopolitical out-of-the-box thinking and a Middle East Pax Americana with low (dollar-denominated) energy prices, high economic growth, and low US military presence, or a Pandora’s box? Only time will tell, but this could prove a high order geopolitical pivot point; as

The Israeli government may be close to collapse over the issue of drafting its ultra-orthodox citizens --news on that could come Wednesday-- as thousands of ex-jihadis are being brought into a new Western-accepted Syrian army: what could go wrong there looking at history?

Ukraine hit Russia again, underwater-mining the foundations of the Kerch bridge leading to Crimea. So, no ceasefire or peace, and while Russia is making slow gains on the ground in Ukraine, the latter is hitting Russia harder, something that will happen more as more advanced weapons are shipped to it. That backdrop matters to a Europe now rolling up its sleeves on the military front. Separately, Ukraine stated its grain harvest could be down 10% this year: imagine if the war were to bring that figure down further, as Russia has tried to do before. 

In Europe, the Dutch government collapsed over migration issues just before the upcoming NATO summit it’s hosting: a new election looms there at some point a few months from now, until which we will get a caretaker administration. 

In the UK, media underline that NATO will at that meeting force London to spend 3.5% of GDP on defense (and another 1.5% on related infrastructure) just after its Strategic Defence Review said it wouldn’t, leaving London looking silly, and having no idea how to pay for it: indeed, NATO is now seeking a fivefold boost in its ground-based air defence systems. It’s not just the UK that’s true for of course. Vast sums need to flow to armed forces globally.

In Asia, regular military high-spender South Korea’s left-leaning Lee Jae-Myung won the presidential election after his predecessor Yoon Suk Yeol’s impeachment for his declaration of martial law. The full geopolitical ramifications of that are still unclear, although Lee is certainly seen as more pro-China than Yoon.

Japan said it might join the expensive US Golden Dome anti-missile plan, which underlines which way it was always going to lean geopolitically, and shows how little optionality it has on trade – the more so given a media report underlining the accelerating fall in Japanese automakers’ market share in Thailand, a former lock-in for them for decades due to fortified layers of integrated Japan-only supply chains which has been up-ended by the entry of cheaper Chinese EVs not needing them. This underlines how technology shifts can overturn established trading patterns and economic power structures, especially for those who fall behind the curve. Still no US-Japan trade deal yet though.

President Trump signed 50% steel & aluminium tariffs but exempted the UK due to their US trade deal; and he is set to waive some legal requirements to boost US critical minerals/rare earth output, where China has a current monopoly it’s using to throttle industrial supply chains. That doesn’t show up on Bloomberg data yet, but that doesn’t mean it isn’t a critical issue. 

Treasury Secretary Bessent said Beijing has a choice on whether it’s a dependable trade partner, reiterating it must shift to a more consumption-led economy – and, presumably, to allow others to get the rare earths they need for industry.

On consumption, Elon Musk called Trump’s Big Beautiful Bill a “disgusting abomination”, as Bessent underlined in an interview that while he wants to get the fiscal deficit down, the aim is to do so via higher growth rather than a hard fiscal stop.

Meanwhile, the FBI arrested a Chinese national for allegedly smuggling a dangerous biological pathogen, fusarium graminearum, an “agroterrorism agent,” into the US to research at the University of Michigan, where she works, increasing tensions over Chinese student visas and current ‘we don’t do geopolitics’ US university research models. That’s an emerging global bifurcation with major implications. Yet while there are stories of US academics now considering moving abroad --who else has US money, labs, and academic freedoms?-- the loss of Chinese students to the US is more a geopolitical blow to Beijing (and the Ivy League) than it is an economic one to universities which reject 99% of equally-qualified applicants from other countries. 

As backdrop to all this, a Wall Street Journal op-ed argued ‘The War of Revision is Coming’, where Taiwan may be the next Ukraine, and warns: “All democratic societies will ultimately have to reckon with this unwelcome global transition from a postwar to a prewar era in world history."

But potential rate cuts are more important though, right, Mr. Market? Yes, maybe… if they help pay for stepped-up military expenditures implied by the above. Yet how do we structure our political-economies to ensure they do that and not --for a random example that would obviously never be part of any sensible government’s game-plan in the current circumstances-- push up house prices instead? *If* you believe what the Wall Street Journal op-ed says, this is an existential issue for democratic societies: but you wouldn’t think so from how many are acting. However, some key voices are talking new talk.

BlackRock CEO Larry Fink used a Financial Times op-ed to say “globalization is over” and we need a “new draft” without massive trade and financial imbalances causing inequality, and with local economies that help workers(!) The logical implications of such are staggering: no more massive trade surpluses and deficits, upending the global trading structure; no more free-wheeling global capital flows creating those trade surpluses and deficits and holdings of certain assets; more local consumption first, with what’s left exported, so less trade overall; and a reallocation of purchasing power from top income deciles to those at the bottom via more inclusive local capitalism(s) across all those taking part in the new system.

Of course, this BlackRock rhetoric could be the next ‘Build Back Better’, i.e., an empty incantation nobody actually expected to achieve anything but which sounded good to the disaffected. However, it would be hard to argue that things are currently static. Rather, they are moving fast and breaking things. 

Indeed, what Fink just said sounds a lot like some past neo-mercantilists and some interpretations of what the White House is trying to achieve. (Which doesn’t mean they will succeed but is naturally why BlackRock just said it.) 

You want to talk jolts? Look at that bigger picture, not the US (or other) data.

Tyler Durden Wed, 06/04/2025 - 11:45

Oil Prices Tumble On Report That Saudis Want To 'Super-Size' OPEC Production Hikes

Update (1130ET): Having surged overnight and extended gains on a big crude draw (and trade-talk progress with the Europeans), oil prices are tanking now as Bloomberg reports that, according to people familiar with the matter, Saudi Arabia wants OPEC+ to continue with accelerated oil supply hikes in the coming months as it puts greater importance on regaining lost market share.

The kingdom, which holds an increasingly dominant position within OPEC+, wants the group to add at least 411,000 barrels a day in August and potentially September, the people said, asking not to be named because the information was private.

Riyadh is keen to unwind its cuts as quickly as possible to take advantage of peak demand during the northern hemisphere summer, one person said.

...

...the kingdom sees no reason to slow down — as Russia, Algeria and Oman suggested at the last OPEC+ meeting — because seasonal demand will peak in the coming months, the people said.

Before the group’s most recent meeting, there had been some discussion of an even larger increase, according to people familiar with the matter.

The reaction was instant, slamming WTI down 2%...

We would imagine Russia will not be pleased at this outburst (or the US shale producers or the Kazakhs), but Trump might be happy with what his old friends in The Kingdom are saying (and doing).

*  *  *

Crude prices are higher this morning on signs of progress in trade talks between the US and EU and the API report of a major drawdown in American crude inventories (despite product builds).

Geopolitical tensions continue to drive prices more aggressively as the possibility of a Putin-Zelensky meeting came and went and Iranian peace deal talks stumble.

The big question for traders is - will the official data confirm API's drawdown?

API

• Crude -3.28mm

• Cushing +952k

• Gasoline +4.73mm

• Distillates +761k

DOE

• Crude -4.30mm

• Cushing +576k

• Gasoline +5.22mm

• Distillates +4.23mm

The official data confirmed API's report with a large crude draw offset by big draws in products...

Source: Bloomberg

Even including the 509k barrel addition to the SPR, total crude stocks fell by the most since December...

Source: Bloomberg

The rig count continues to slide (now at its lowest since Dec 2021), and despite Trump's 'Drill, Baby, Drill' push, US crude production remains well of its highs...

Source: Bloomberg

WTI extended gains after the official data confirmed API's...

Source: Bloomberg

Oil rose at the start of the week after a decision by OPEC+ to increase production in July was in line with expectations, easing concerns over a bigger hike.

However, prices are still down about 11% this year on fears around a looming supply glut, while traders continue to monitor US trade tariffs as President Donald Trump said his Chinese counterpart is “extremely hard” to make a deal with.

Saudi Arabia led increases in OPEC oil production last month as the group began its series of accelerated supply additions, according to a Bloomberg survey.

Nevertheless, the hike fell short of the full amount the kingdom could have added under the agreements.

Tyler Durden Wed, 06/04/2025 - 11:25

"Too Late!" - Trump Blasts Powell After Weakest ADP Jobs Report In Over 2 Years

Following April's weak ADP print (lowest job additions since July 2024), analysts expected a rebound in May from the "unease" before Trump paused the Liberation Day tariffs. Jobless claims, among others, have all supported signals that the labor market refuses to fold to soft data's squeamishness over Trump's policies...

Source: Bloomberg

So, against expectations of a +114k print, ADP's Employment Report came in at just +37k for May - the lowest since March 2023's decline.

Source: Bloomberg

That was a 5 standard deviation miss from expectations...

Source: Bloomberg

This is the biggest miss since August 2022...

Source: Bloomberg

Small Businesses dominated the weakness in the labor market...

Goods producing firms lost 2k jobs while Services added just 36k...

But the picture was weak across most sectors...

"After a strong start to the year, hiring is losing momentum," says Nela Richardson Chief Economist.

"ADP Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers."

Source: Bloomberg

President Trump is pissed...

But bond bulls are happy...

And 2025 rate cut expectations are (dovishly) rising...

So, what's your guess for Friday's print now?

Tyler Durden Wed, 06/04/2025 - 11:15

US Army Hits Annual Recruitment Goals 4 Months Early

Authored by Tom Ozimek via The Epoch Times,

The U.S. Army has reached its fiscal year 2025 recruitment goal of 61,000 active-duty enlistments—four months ahead of schedule—marking what officials call a pivotal moment in military readiness and national morale.

Announcing the milestone in a June 3 statement, Army leadership framed the achievement as a “turning point” in overcoming recent recruitment struggles, attributing the surge to a “renewed sense of patriotism and purpose among America’s youth.”

“I’m incredibly proud of our U.S. Army recruiters and drill sergeants,” Army Secretary Dan Driscoll said in a statement.

“Their colossal efforts and dedication to duty helped the U.S. Army accomplish our FY25 annual recruiting goal a full four months ahead of schedule.”

This year’s target represents a more than 10 percent increase from the 55,000 recruits enlisted in fiscal 2024. The Army said the higher bar was set to match a spike in interest and enthusiasm for military service, with daily contract signings in 2025 outpacing last year’s levels by as much as 56 percent.

Driscoll credited top-level support from President Donald Trump and Defense Secretary Pete Hegseth, praising their commitment to “equipping, training, and supporting these future Soldiers as they face a world of global uncertainty and complex threats.”

“Putting Soldiers first is having a tangible impact and shows that young people across our country want to be part of the most lethal land fighting force the world has ever seen,” Driscoll said.

Hegseth first noted the recruitment spike in February, pointing to a post-election boost that brought enlistment numbers to a 15-year high. At the time, Trump said the uptick reflected a national mood shift.

“There’s a spirit about our country that [people] haven’t seen in many, many years,” Trump said during a Feb. 5 event at the White House.

He also credited his January executive order that revoked gender identity policies in the military in favor of a renewed focus on “readiness and effectiveness.”

After years of struggling to meet quotas, the Army had only narrowly hit its 2024 goal, with just over 55,000 active-duty accessions and 11,000 enlistees in the delayed entry program. In 2023, the service brought in about 50,000 recruits, well short of its “stretch goal” of 65,000. In 2022, the Army missed its 60,000-person goal by 15,000.

Former Army Secretary Christine Wormuth had forecast in January that the Army was on track to reach 61,000 recruits by the end of fiscal year 2025—which runs through the end of September—and projected another 20,000-plus in the delayed entry pool for fiscal year 2026. That benchmark has now been exceeded.

Reacting to the achievement, Pentagon spokesperson Sean Parnell posted on social media: “The best is yet to come!”

In a Wall Street Journal op-ed, Driscoll reflected on his own Army experience:

“The values I gained—discipline, duty, honor—have shaped me into the husband, father, and citizen I am today. Choosing to serve was one of the most meaningful decisions of my life.”

The announcement comes just ahead of the Army’s 250th birthday on June 14, which will be marked by a major military parade in Washington.

Trump is scheduled to host the parade—held on both the Army’s birthday and his own 79th birthday—as the centerpiece of a broader national celebration. The parade, part of a day-long public festival on the National Mall, will feature military demonstrations, static equipment displays, live music, and culminate in an evening concert and fireworks show.

The celebration is also a key milestone in a longer campaign of patriotic events coordinated by the White House’s Task Force 250, created by executive order in January to organize festivities leading up to America’s 250th Independence Day in 2026.

Meanwhile, the U.S. Air Force has also reported a surge in recruitment, with its December-to-February numbers reaching their highest levels in 15 years.

Tyler Durden Wed, 06/04/2025 - 10:45

US Embassy Officials Warn Americans Not To Use Dating Apps To Meet People In Mexico

Authored by Jack Phillips via The Epoch Times,

U.S. embassy officials in Mexico this week confirmed reports of American citizens having been kidnapped in Mexico by people they met on dating apps.

Confirming those reports, the U.S. Consulate General Guadalajara said that U.S. citizens were kidnapped in the Puerto Vallarta and Nuevo Nayarit areas in recent months after meeting the individuals on a dating app.

“Victims and their families in the United States have at times been extorted for large sums of money to secure their release,” the Guadalajara consulate said.

“Please be aware that this type of violence is not limited to one geographic area. Travelers should use caution when meeting strangers.”

The officials did not name any specific dating apps but provided advice to people traveling to Mexico, saying that they should only “meet in public places and avoid isolated locations, such as residences or hotel rooms, where crimes are most likely to occur.”

“Tell a friend or family member of your plans, including where you are going, details of the person you are meeting, and the app you used to meet them,” the consulate said.

“Trust your instincts. If something does not feel right, do not hesitate to remove yourself from a situation. In case of emergency, call 911.”

The statement also noted that Americans should be aware of its travel advisory to Jalisco, where Puerto Vallarta is located. The state is classified as “Level 3: Reconsider Travel” due to crime and kidnappings. Nayarit state, where Nuevo Nayarit is located, is classified as “Level 2: Exercise Increased Caution” due to crime, according to the State Department.

The U.S. Embassy breaks down Mexico state-by-state, listing the states U.S. citizens should avoid or exercise caution.

Only two states—Campeche and Yucatan—are listed under the embassy’s “Level 1” designation, which is its lowest. Every other state is rated “Level 2” or greater, with Colima, Guerrero, Michoacan, Sinaloa, Tamaulipas, and Zacatecas states listed as “Level 4: Do Not Travel” due to crime and kidnappings.

According to the State Department, U.S. government workers cannot travel between Mexican cities after dark, cannot hail taxis, and must rely on dispatched vehicles.

“The U.S. government has limited ability to provide emergency services to U.S. citizens in many areas of Mexico, as travel by U.S. government employees to certain areas is prohibited or restricted. In many states, local emergency services are limited outside the state capital or major cities,” the State Department cautions on its website.

Earlier this year, U.S. officials issued “Do Not Travel” warnings to several areas near the U.S.-Mexico border due to gun battles and improvised explosive devices (IEDs) being left near roadsides.

The warning, issued in January, noted that officials are “aware of increasingly frequent gun battles occurring in and around Reynosa in the late night and early morning hours.” IEDs were found in the Reynosa, Rio Bravo, Valle Hermoso, and San Fernando areas, which border the Rio Grande Valley area in Texas.

In a report updated in February, the Council on Foreign Relations think tank said that, since 2018, more than 30,000 people have died each year due to a “crisis of kidnappings, disappearances, and other criminal violence.” It noted that drug cartels and gangs are the primary perpetrators of the country’s violence.

Tyler Durden Wed, 06/04/2025 - 10:20

Baffle 'Em With Bullshit: Services Surveys Signal Soaring & Plunging Economy

After the mixed picture from Manufacturing surveys (ISM ugly, PMI solid); both Services surveys - due this morning - were expected to rise in May.

• S&P Global US Services PMI surged to 53.7 in May, from 52.3 flash and up from 50.8 in April (second best print of the year)

• ISM Services tumbled to 49.9 in May, from 51.6 (and well below the expectation of 52.0) - lowest since June 2024

So more baffle 'em with bullshit...

Source: Bloomberg

In May, private sector output growth accelerated sharply from April’s 19-month low.

Higher activity was driven by an upturn in the services economy as manufacturing output fell marginally again.

The S&P Global US Composite PMI® recorded 53.0 in May, up from 50.6 in the previous month - leading all the other major global economies.

Source: Bloomberg

“Service sector growth has improved more than first estimated in May, with confidence about the year ahead also lifting higher, buoyed in part due to pauses on higher rate tariffs. Companies have matched that optimism with increased spending and hiring," according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

“That said, the improvements come from a low base, following a very gloomy April, which saw growth nearly stall as confidence sank to a two-and-half year low. Reports from companies underscore how uncertainty about the policy outlook continued to act as a deterrent to expansion plans in May. Output growth and confidence consequently remain subdued by standards seen last year.

“The PMI is so far indicating annualized GDP growth barely above 1% in the second quarter, so avoiding recession but adding to our expectation of only modest GDP growth in 2025 of just 1.3%."

However, as Williamson concludes, the stench of stagflation remains:

“Alongside sluggish economic growth, the survey is also signaling intensifying inflationary pressures. Rising costs in the service sector were again blamed widely on tariffs, which were in turn passed on to customers to result in the steepest rise in average prices charged since August 2022.

These rising price pressures will only add to policymaker reluctance to reduce interest rates, which we consequently expect to remain on hold until December."

So, you decide: ISM Manufacturing UGLY, ISM Services UGLY; Manufacturing PMI STRONG, Services PMI STRONG!

Tyler Durden Wed, 06/04/2025 - 10:08

Bank of Canada Keeps Rates At 2.75% As Expected, As It Waits To See Impact Of Trump Tariffs

The Bank of Canada held interest rates steady at 2.75% for a second straight meeting - matching economist and market estimates - but warned there may be a need to cut borrowing costs if the economy weakens more and inflation remains contained as US tariffs strike.  The central bank provided slight forward guidance by saying it will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.

Also, the central bank said it is "proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve".

BOC officials said they held borrowing costs steady as they gain more information on Trump's trade conflict, which they called “the biggest headwind facing the Canadian economy” as it slams exports and adds to uncertainties for consumers and businesses. At the same time, policymakers said the economy held up stronger than expected in the first quarter, and flagged a recent surge in core inflation measures.

“With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, governing council decided to hold the policy rate as we gain more information on US trade policy and its impacts,” policymakers said in a statement.

And while they said there was “clear consensus” amofng governing council to pause and wait for more information on how the trade dispute plays out, the bank introduced some limited guidance on where borrowing costs are likely headed.

“On balance, members thought there could be a need for a reduction in the policy rate if the economy weakens in the face of continued US tariffs and uncertainty, and cost pressures on inflation are contained,” Macklem said in his opening remarks, adding that policymakers had a “diversity” of views on the future rate path.

Some more highlights from today's decision, starting with...

Tariffs:

• Recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs. The Bank will be watching all these indicators closely to gauge how inflationary pressures are evolving.
• The outcomes of these negotiations are highly uncertain, tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high.

Economy

• The Bank's preferred measures of core inflation, as well as other measures of underlying inflation, moved up.
• The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued.

Policy

• "We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval."
• 'We will support economic growth while ensuring inflation remains well controlled."
• We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs."

As Bloomberg notes, the statement shows the central bank is comfortable waiting for clearer signals on how the trade dispute will evolve. At the same time, policymakers are actively discussing resuming monetary easing should the economy deteriorate and inflation remain under control. A weakening economy for the rest of the year is the base case in Bloomberg survey of economists, with gross domestic product forecast to contract in the middle two quarters of this year. Inflation is seen averaging around the bank's 2% target throughout 2025.

When the bank paused in April for the first time this easing cycle, it abandoned point estimates for gross domestic product and inflation for the first time since the Covid-19 crisis. Instead, central bankers offered two potential scenarios for the economy. It mentioned neither of these scenarios in the communications on Wednesday.

Trump has applied tariffs on a variety of Canadian goods, including steel, aluminum, autos and products that don’t comply with the North American trade pact. Uncertainty remains elevated as the administration appeals a court ruling that overturned many of his tariffs. That ruling did not apply to his sectoral levies, and Trump signed an order Tuesday doubling the metals tariffs to 50%.

In the statement, the bank said it would continue to monitor how tariffs reduce demand for Canadian exports and how it affects business investment, employment and household spending. Officials are also watching inflation expectations and how higher tariff costs are passed through.

Macklem said it was “still too soon to see the direct effects of retaliatory tariffs in consumer price data,” referring to the levies Prime Minister Mark Carney has levied on imports of some US goods, and which are currently tallying well below the total C$20 billion the federal government is expecting.

Core inflation measures surged to 3.2% in April, the highest in more than a year. While Macklem repeated that the bank is seeing “some unusual volatility” in core gauges, he also said that the measures “suggest underlying inflation could be firmer than we thought.” Higher food prices, brought on by trade disruption, may be partially responsible, the bank said.
At 2.75%, the benchmark overnight rate is at the midpoint of officials' estimate for the neutral range, where policymakers believe borrowing costs are neither stimulative nor restrictive.

Macklem and Senior Deputy Governor Carolyn Rogers are scheduled to speak to reporters at 10:30am Ottawa time.

In kneejerk response, there has been limited follow-through seen in CAD following the BoC's decision despite some outside bets for the Bank to pull the trigger on another 25bps rate cut on account of soft growth metrics and ongoing uncertainty presented by the trade war. Instead, the recent uptick in inflation appears to have supported the decision to leave rates unchanged. On which, Governor Macklem says there was a "clear consensus” with the board wishing to hold policy until it gains more information. Going forward, policy decisions will likely weigh the downward pressure on inflation from a weaker economy and upward pressures on inflation from higher costs. USD/CAD was little changed with the pair pivoting around the 1.37 mark. Year-end pricing for further easing by the BoC moved from around 42bps pre-release to 37bps.

Tyler Durden Wed, 06/04/2025 - 10:04

Zelensky Says More Russia Talks 'Pointless' With Current Delegations

Ukraine's President Volodymyr Zelensky said Wednesday that to continue peace talks in Istanbul between Ukraine and Russia with the current delegations is senseless, and he has again called for talks with Vladimir Putin, after complaining that the Russian leader is sending junior officials who have no decision-making capacity. 

"We are ready for exchanges, but to continue diplomatic meetings in Istanbul at a level that does not solve anything further, I think, is pointless," Zelensky said at a press conference, referring to the latest prisoner of war (POW) swaps.

Source: website of the President of Ukraine

He had described just after the Monday Istanbul meeting that the delegations “exchanged documents through the Turkish side, and we are preparing a new release of prisoners of the war."

They agreed to another large prisoner swap, but little else, as the Russian side has continued to press demands that Ukraine forces leave the four eastern territories annexed by Russia.

But it's what preceded the talks which speaks the loudest, as Ukraine launched its 'Operation Spider's Web' deep inside Russian territory, taking out many Russian aircraft including long-range strategic bombers in what was arguably Ukraine's most successful and brazen cross-border operation to day.

Over the weekend, three bridges in Russia's south were also blown up in suspected Ukrainian sabotage operations, which left trains derailed, and killed at least seven people.

Following that, on Tuesday underwater explosives damaged and briefly crippled Kerch Bridge in what Ukrainian media is calling a 'message to Putin'. So clearly by the looks of it, Ukraine doesn't seem too interested in being at the negotiating table, after complaining that it won't cede to pressure from Washington on giving up territory.

The timing of Sunday's huge drone operation strongly points to Zelensky's desire to come up with greater leverage before serious negotiations are had. For now it seems Kiev wants to sabotage the Istanbul process, while rejecting Trump efforts for a hasty settlement.

For both rounds of talks, Putin had tapped his aide and former culture minister Vladimir Medinsky to lead. From the start many Western analysts claimed this was an 'insult' given that it is not someone more senior. Medinsky, it should be remembered, oversaw the failed 2022 peace talks with Kiev in the weeks after the February invasion.

Gathered around Medinsky were a group of mid-ranking advisers, including officials from the Foreign and Defense Ministries, along with Putin aides - but there was no Lavrov there or someone equivalent to his stature.

Tyler Durden Wed, 06/04/2025 - 09:45

Nvidia's Revenue Pipeline Tops $1 Trillion, UBS Tells Clients

Following Nvidia's better-than-expected earnings report last Wednesday, UBS analysts were inundated with investor inquiries, primarily focused on the chipmaker's near-term growth visibility and the durability of its long-term revenue pipeline.

Below, UBS analyst Timothy Arcuri addressed the most frequently asked questions, unpacked key commentary from the earnings call, and provided expanded visibility into a multi-year AI infrastructure boom.

Visibility to data center revenue doubling yet again?

An area where we have received a few investor inbounds, but still seems somewhat overlooked is NVDA's commentary on its pipeline. The company noted on its FQ1:26 earnings call that it has visibility into "tens of gigawatts" of AI infrastructure projects in the "not too distant future". Assuming a "low case" pipeline of 20GW and NVDA's stated range of ~$40-50B per GW, this puts its total revenue opportunity for this pipeline at a minium of ~$1T. While the company did not specify a timeframe for this pipeline, based on our conversations, we believe these projects are likely to be rolled out over a 2-3 year period. Using the average of this timeframe, this suggests the company may effectively have "visibility" to ~$400B/yr in data center revenue, or about 2x our $233B data center revenue estimate for C2026. This is obviously very heady, but we did note in UBS' deep dive on OpenAI's Abilene AI Factory that Crusoe alone has ~20GW in project pipeline and this is just one digital infrastructure project developer. The upshot of this is that we believe investor concerns around growth sustainability should be allayed by some of this commentary from the earnings call.

The math around the rack numbers given on the call

One of the main investor questions we got coming out of the call was what NVDA was trying to imply by the GB200 rack numbers it provided on the call - which were so far above conventional wisdom that it spurred some confusion. The company said "on average major hyperscalers are each deploying nearly 1,000 NVL72 racks or 72,000 Blackwell GPUs per week and are on track to further ramp output this quarter". Taken at face value, this implies a GPU run rate of nearly 1MM/Q for each hyperscaler - so far above most consensus estimates that it was hard to foot. Therefore, we believe the company was not trying to communicate a revenue "run-rate" but simply trying to reassure investors that GB200 rack issues are resolved and a large quantity of racks are moving from the ODMs and OEMs now to customers - consistent with our commentary into the call that investor concerns about supply chain inventory were overblown. We would not try to do anything more with these numbers as we think the company meant this to be more illustrative than quantitative.

NVLink bolsters growth in Networking.

Networking revenue grew to ~$5B in FQ1:26 (+64% Q/Q), $1B of which NVDA attributed to NVLink revenue which was up substantially Q/Q. We believe this is almost entirely tied to the ramp in shipments of GB200 NVL72 rack scale systems, each of which includes a 72-GPU NVLink domain (vs an up to 8-GPU domain for HGX systems). NVDA is recognizing NVLink revenue separately for these NVL72 systems, which is/was not the case for HGX boards where revenue has been consolidated into the Compute sub-segment of Data Center. As such, we would expect Networking revenue to track more closely to NVL72 rack shipments going forward, albeit maybe with a little bit of a lag.

Gaming growth driven by… gamers.

The sharp improvement in Gaming revenue in FQ1 (up nearly 50% Q/Q and well ahead of expectations) has prompted many investors to question whether there was some component of 50-series RTX cards being pulled into China for AI workload purposes. Though this cannot be completely discounted, we suspect any such pull-in was likely very limited due to: 1) availability of Blackwell-based RTX GPUs being still too limited in the gaming channel to enable larger-scale deployment, 2) RTX 50-series GPUs are PCIe based and do not support NVLink for scale-up, and 3) NVDA had to some degree starved the gaming channel for Blackwell out of the gate as it prioritized capacity for data center applications so the FQ1 (April) growth was driven by back-filling the channel following these severe supply shortages.

Gross margin drivers for 2H.

General improvement in Blackwell profitability and cost downs remain the primary driver to get margins back to the mid-70%s target by FYE26. Part of this, we believe, is GB300 - for which NVDA may actually recognise a small amount of revenue inside of FQ2 with the real ramp being FQ3. Longer-term, we believe pricing to value remains the key function for NVDA's margins - this comes down to both hardware and the software overlay of which the release of Dynamo at GTC is a prime example (accelerates inference on NVDA hardware by >30x).

Taken together, Nvidia's earnings, along with expanding visibility into a multi-year AI infrastructure boom via UBS, suggest that this boom is less about product cycles and more about exponential infrastructure scaling. 

Last week, UBS analysts Steven Fisher, Amit Mehrotra, and others noted that the construction boom of AI data centers is not expected to show up in the real economy or provide structural tailwinds until the second quarter of 2026.

"More slowing before reacceleration in 2026," Fisher wrote in a note, adding, "We expect stimulus and structural forces to drive the rebound, while cyclical factors remain weak."

Another UBS note outlined the bullish outlook on data center-driven power demand, particularly for natural gas-linked utilities and midstream names.

The AI data center buildout could be viewed as the digital-age cousin of the 1930s "New Deal"—but instead of highways and dams, it's GPUs and megawatts. It's reshaping American infrastructure but with Big Tech at the helm. 

Tyler Durden Wed, 06/04/2025 - 06:55

EU Tech Laws Erect Digital Iron Curtain

Authored by Cláudia Ascensão Nunes via TheDailyEconomy.org,

Over the past decades, Europe has created little of real relevance in terms of technological platforms, social networks, operating systems, or search engines.

In contrast, it has built an extensive regulatory apparatus designed to limit and punish those who have actually innovated.

Rather than producing its own alternatives to American tech giants, the EU has chosen to suffocate existing ones through regulations such as the Digital Services Act (DSA) and the Digital Markets Act (DMA).

The DSA aims to control the content and internal functioning of digital platforms, requiring the rapid removal of content deemed “inappropriate” in what amounts to a modern form of censorship, as well as the disclosure of how algorithms work and restrictions on targeted advertising. The DMA, in turn, seeks to curtail the power of so-called gatekeepers by forcing companies like Apple, Google, or Meta to open their systems to competitors, avoid self-preferencing, and separate data flows between products.

These two regulations could potentially have a greater impact on U.S. tech companies than any domestic legislation, as they are rules made in Brussels but applied to American companies in an extraterritorial manner. And they go far beyond fines: they force structural changes to the design of systems and functionalities, something that no sovereign state should be imposing on foreign private enterprise.

In April 2025, Meta was fined €200 million under the Digital Markets Act for allegedly imposing a “consent or pay” model on European users of Facebook and Instagram, without offering a real alternative. Beyond the fine, it was forced to separate data flows between platforms, thereby compromising the personalized advertising system that sustains its profitability. This was a blatant interference in its business model.

That same month, Apple was fined €500 million for preventing platforms like Spotify from informing users about alternative payment methods outside the App Store. The company was required to remove these restrictions, opening iOS to external app stores and competing payment systems. Once again, this was an unwelcome intrusion and a direct attack on the exclusivity-based model of the Apple ecosystem.

Other companies like Amazon, Google, Microsoft and even X are also under scrutiny, with the latter particularly affected by DSA rules, having been the target of a formal investigation in 2023 for alleged noncompliance in content moderation.

Big Tech, by its very nature, is the primary, focused target of this new European legal framework. These companies operate on a global scale, rely on business models centered around the collection and monetization of data, integrate multiple layers of the digital ecosystem vertically, and hold dominant positions in key areas such as search engines, social networks, and operating systems.

With around 450 million consumers and a high level of digital purchasing power, the EU is the second-largest digital market in the world. For Big Tech, leaving Europe is not an option. And that is precisely where Brussels derives its power: by imposing demanding rules, it forces global changes, since maintaining different versions of a product for each region is costly and technically unfeasible. In this way, the European Union becomes a de facto global legislator, exporting its regulatory vision to the rest of the world.

Despite living under different institutional realities, Europeans and Americans share fundamental values: individual liberty, private initiative, and open innovation. It is in the name of these values that they must now walk a common path of resistance to this regulatory overreach, reaffirming a transatlantic alliance in defense of innovation, digital sovereignty, and freedom itself.

Tyler Durden Wed, 06/04/2025 - 06:30

Number Of Zombie Properties Increase In 30 US States

The number of zombie homes - vacant properties abandoned by owners during the foreclosure process - rose in 30 U.S. states and the District of Columbia in the second quarter of this year from the previous quarter, real estate data analytics company ATTOM said in a May 29 statement.

Zombie homes, which can fall into disrepair and negatively impact the value of other properties in the neighborhood, are a sign of distress in the housing market and the broader economy.

As Naveen Athrappully reports for The Epoch Times, among states with at least 50 zombie homes, North Carolina saw the largest percentage increase in these properties year-over-year, with their numbers rising by 52.5 percent during this period.

This was followed by Iowa and Texas, both seeing an over 50 percent jump in zombie properties. South Carolina and Kansas were the next on the list.

According to ATTOM’s analysis, Peoria County in Illinois ranked at the top in the list of U.S. counties with the highest zombie foreclosure rates.

Broome County in New York came in second, followed by Cuyahoga County in Ohio, Baltimore City County in Maryland, and Indiana’s Marion County.

On a positive note, things looked better from a nationwide perspective, with only one out of every 14,207 being zombie properties in Q2, which ATTOM said was a low rate, indicating the strength of the post-pandemic U.S. housing market.

“Thankfully, we’re not seeing a lot of homes sitting vacant due to pending foreclosures, which is good for families, neighborhoods, and the market,” said Rob Barber, CEO of ATTOM. “However, foreclosure filings have shown a recent uptick—with April seeing a 14 percent increase compared to the same month last year.”

“So far, buyers seem to be scooping up these repossessed homes relatively quickly, so they aren’t sitting empty,” he added. “Nobody wants to see a return to the days of the 2008 housing crisis when vacant, blighted homes were common in many parts of the country.”

Meanwhile, the number of property foreclosures had risen by 11 percent in the first quarter of this year from the previous quarter, breaking away from the trend of three consecutive quarterly declines, ATTOM said in an April 11 statement.

“While levels remain below historical averages, the quarterly growth suggests that some homeowners may be starting to feel the pressure of ongoing economic challenges,” Barber said.

“However, strong home equity positions in many markets continue to help buffer against a more significant spike in distress.”

Consequences of Zombie Properties

According to a June 18 post by financial services company Rocket Mortgage, zombie homes can negatively affect homeowners even after they abandon the properties.

For instance, the owner may continue to owe property taxes that could end up becoming a tax lien. Similarly, the zombie property may continue accruing homeowners’ association fees, which, if unpaid, could result in a lawsuit.

“These consequences can result in a major hit to your credit score, among other financial and legal implications. This could prevent you from moving on with your life and regaining your financial footing,” said the post.

“Abandoned homes can fall into disrepair and affect the surrounding property values. A vacant property can become a shelter for squatters and attract vandalism or other crimes. This could drive away potential new residents and force current ones to reconsider whether their neighborhood is still safe to live in.”

Lawmakers are taking action to tackle the issue of zombie properties putting unnecessary burdens on people.

In mid-May, the Connecticut Senate passed SB 1336, a bill seeking to protect homeowners having “zombie mortgages,” the Connecticut Senate Democrats said in a May 15 statement.

The bill, co-sponsored by state Sen. Pat Billie Miller, places a statute of limitations on lenders regarding the collection of long-dormant second loans on properties, also known as zombie mortgages.

It prohibits lenders from starting foreclosure proceedings on secondary mortgages 10 years after the scheduled final loan payment date or 10 years after the lender stopped communicating with the borrower.

“This bill protects our homeowners from foreclosure threats based on debt that’s been dormant for more than a decade,” Miller said. “The change puts Connecticut in alignment with national trends as states across the country move to shield consumers from the delayed impact of predatory lending practices.”

“No one making reliable payments on their primary mortgage should face foreclosure because someone made an opportunistic decision to resurrect a secondary loan, years after deciding that collection wasn’t worth the effort when property values plummeted in the aftermath of the 2008 financial crisis.”

The bill passed the House and Senate, and now needs to be signed by the state governor.

Tyler Durden Wed, 06/04/2025 - 05:45

Dutch Parliament Says 'Nyet' To NATO Defense Spending Plan Amid Chaos Of Geert Wilders Pullout

NATO aims for its members to spend at least 3.5% of their GDP on defense, but those dreams of NATO expansion - at a moment the proxy war in Ukraine is becoming dangerously close to entering hot war between the West and nuclear-armed Russia - are dying.

Dutch parliament on Tuesday slapped down a proposal to increase defense spending to 3.5% of gross domestic product (GDP), key to NATO's capability targets, in a non-binding motion.

While it doesn't have legal force at this point, this makes clear parliament's opinion, unleashing deeper tensions among NATO allies, and as the Trump White House exerts pressure to rapidly raise collective defense.

This comes at an ultra-sensitive political moment, given that as we reported earlier Dutch far-right leader Geert Wilders pulled his Party for Freedom (PVV) out of the coalition that governs the Netherlands.

This sets up the likelihood of new elections after the man dubbed the "Dutch Donald Trump", withdrew the PVV, related to immigration policy failure. 

According to the latest developments, Prime Minister Dick Schoof has just announced that he would offer his resignation from the Netherlands’ ruling coalition while continuing in a caretaker government, setting the stage for a likely snap election:

"Wilders has plunged the Netherlands into another round of political chaos," said Mujtaba Rahman, managing director for Europe at the Eurasia Group.

"The Dutch parliament can try to find a new majority or else there will be early elections. But the immediate outlook is one of chaos and uncertainty."

The country has been in turmoil since Rutte resigned in 2023 after his coalition failed to pass comprehensive immigration legislation.

Critically, the air war over Ukraine and Russia is heating up, also in the wake of Ukraine's 'Operation Spider's Web'. Funding for air defenses, particularly among 'eastern flank' NATO members is seen as paramount, from Brussels' perspective.

"NATO is asking European member states to expand ground-based air-defense capabilities fivefold as the alliance races to fill a key gap in response to the threat of Russian aggression, people familiar with the matter said," Bloomberg reports separately on Teusday.

"The ramp-up will be discussed at a gathering of North Atlantic Treaty Organization defense ministers in Brussels on Thursday, the people said on condition of anonymity as deliberations take place," the report underscores.

And who will magically step forward to fill this massive funding gap?

Dutch Lawmakers Oppose 3.5% NATO Spending Target (Dutch need to spend up to €19 Billion more to meet NATO target)

And just like that Europe's defense budget dreams go up in flames.

— zerohedge (@zerohedge) June 3, 2025

Certainly, the United Sates under the Trump administration, which has called for the bar to be raised to a whopping 5% of GDP, won't.

In the background is the fact that Western populations are 'war weary' and don't want to see escalation of NATO force strength in Ukraine. Trump himself is facing a revolt among conservative pundits on the American domestic front, as some European leaders, particularly Hungary's Orban, are warning of a protracted conflict in Eastern Europe if the West and warring parties don't climb down the escalation ladder soon.

Tyler Durden Wed, 06/04/2025 - 02:45

'Forced Mixing' Housing Plan To Integrate Migrants Pushed By Sweden's Social Democrats

Authored by Thomas Brooke via Remix News,

The Swedish Social Democratic Party has approved a new integration strategy that aims to forcibly diversify the country’s residential areas, pushing for what party officials call a “socio-economic mix” of Swedes and migrants in housing developments.

The policy, adopted at the party congress ahead of the 2026 general election, includes proposals to limit immigration to vulnerable areas and to use housing construction to engineer a more integrated society.

“We are serious about the fact that we intend to break segregation and use housing policy as an engine in that work,” said Lawen Redar, the party official responsible for designing the new platform, as cited by Aftonbladet.

Redar described the shift as a “U-turn” in the party’s approach, acknowledging that past strategies had failed.

The new policy includes scrapping the right of asylum seekers to choose their own accommodation and banning municipalities from placing new arrivals in already struggling districts. Instead, migrants will be relocated to wealthier areas in an effort to engineer demographic diversity and “repay the integration debt,” as the party put it.

Jonas Attenius, a senior party official newly elected to the executive committee and chairman of the municipal board in Gothenburg, emphasized the long-term nature of the project. “Yes, we need to mix the population in the long run. I usually say ‘in a generation’. This is long-term,” he said. He argued that integrating migrant families into more prosperous neighborhoods would be key to breaking entrenched segregation.

But critics have described the plan as ideological social engineering. Richard Jomshof, a member of parliament for the right-wing Sweden Democrats, responded sharply:

“No, we don’t need your forced mixing. What we need are closed borders and a return migration (policy) worth the name. But sure, you socialists can mix as much as you want, just pack your bags.”

On the contrary, the Sweden Democrats announced last month they will campaign in the 2026 general election on a pledge to stop migration to the country.

The plan comes amid growing concern over crime and integration failures in Sweden’s suburbs, many of which are dominated by immigrant populations. In recent years, the country has faced a wave of gang-related violence, including record numbers of explosions and shootings, often tied to second-generation migrant youth. Some suburbs now rank among the most dangerous areas in Europe.

Despite the backlash, Social Democrat officials are confident the new approach will not alienate the party’s newer, affluent urban supporters — voters it began attracting after the 2022 election, in part due to the collapse of the traditional center-right Moderates.

“I’m convinced of that,” said Attenius. “But again, this requires a strict migration policy.”

Attenius also issued an apology to migrants who had been concentrated in struggling districts. “I’m sorry,” he said. “Sorry for doing that. Now it is time for the whole of society to take over.”

Read more here...

Tyler Durden Wed, 06/04/2025 - 02:00

Will Human Error Hand AI The Key To Our Destruction?

Authored by Julio Rivera via American Greatness,

By now, the apocalyptic whispers that once belonged solely to science fiction are starting to sound more like realistic forecasts. Artificial intelligence, once hailed as the great liberator of human productivity and ingenuity, is now moonlighting as a con artist, data thief, and spy.

The machines are rising, yes—but they’re not doing it alone. As we embrace AI with reckless abandon, it’s not the code that’s dooming us. It’s the carbon-based lifeforms behind the keyboard making forehead-slapping mistakes. If civilization does collapse under the weight of digital warfare, it’ll be a joint project between rogue AI and good old-fashioned human idiocy.

Let’s talk about the Rise of the Machines, 2025 edition—not in the form of Terminators with glowing eyes, but as lines of sophisticated code hell-bent on manipulation, infiltration, and destruction. Whether we are willing to accept it or not, AI-powered cyberattacks are becoming disturbingly common and alarmingly sophisticated.

We’re seeing the proliferation of deepfake scams, hyper-personalized phishing attacks, and AI-assisted password cracking that make traditional defenses look as flimsy as a paper umbrella in a hurricane.

Take the case of deepfake fraud, where criminals now impersonate CEOs and executives with astonishing accuracy. These aren’t your cousin’s sloppy Photoshop jobs. These are full-motion, pitch-perfect, AI-generated replicas of real people, used in schemes to authorize fraudulent wire transfers, manipulate employees, or simply throw entire organizations into chaos. It’s not just unsettling. It’s an outright weaponization of trust—an erosion of reality itself.

And don’t forget AI-generated phishing emails. These aren’t the hilariously broken English scams from 2006. AI now writes flawless prose, mirroring the tone and style of your boss, your bank, or your kid’s school, tricking you into clicking that one wrong link that detonates ransomware across your organization like a digital IED. The machines aren’t playing chess anymore—they’re playing you.

But even as AI’s capabilities soar into dystopian territory, the greatest cybersecurity threat isn’t machine intelligence. It’s human incompetence. You could hand someone the most secure system in the world, and they’ll still manage to set it on fire with a reused password or a click on an “urgent invoice” from a Nigerian prince.

A report by NinjaOne drives this point home with a sledgehammer: nearly 95% of cybersecurity breaches are caused by human error. Think about that. Not Skynet, not Chinese cyber commandos or North Korean hackers in basements—but Steve in Accounting, who uses “123456” as his password and clicks on pop-ups promising free iPhones.

The attack vectors are depressingly mundane: downloading unsafe software, failing to update systems, weak passwords, falling for phishing scams, and misconfigured security settings.

It’s like locking your house with a deadbolt and then leaving the window wide open with a neon sign that says, “Come on in!” And yet, these mistakes are committed daily in both small businesses and Fortune 500 firms alike.

Compounding this mess is the cyber climate we find ourselves in. While the Biden administration made a lot of noise about cybersecurity (including a 2021 executive order that read like a cyber-fantasy novel), the reality has been more bark than bite. The cyber talent shortage identified during his term is still here. In fact, it’s worse.

Across the board, we are woefully understaffed. The Cybersecurity and Infrastructure Security Agency (CISA), for example, is running with fewer hands. Meanwhile, budget cuts threaten to kneecap already stretched-thin federal cyber teams. But here’s the catch: this isn’t a dig at DOGE. Frankly, it’s not the government’s fight alone.

In an era where the bureaucracy is clearly not nimble or robust enough to be the cyber bodyguard of every business, school district, and hospital, it’s time for individuals and private entities to shoulder the digital shield. The idea that Uncle Sam can magically protect every database, email server, and Wi-Fi-enabled lightbulb from hostile AI is, quite frankly, a joke—and not a funny one.

So, where does that leave us?

It means that responsibility, like it or not, is decentralized. Your small business, your city council, your local school, and yes, your grandma’s Wi-Fi router all play a role in national cyber resilience. Everyone from the CEO to the intern must realize that the click of a mouse can ignite a digital inferno.

This isn’t paranoia. This is math. The AI-fueled cybercriminals don’t sleep, don’t blink, and don’t need to take lunch breaks. They can run cyber threats around the clock, generating thousands of enticing money-related phishing schemes per second or trying billions of password combinations while sipping binary lattes. The only thing stopping them is us—and right now, “us” is losing.

The solution isn’t some magical new firewall or sexy blockchain band-aid. It’s basic digital hygiene. It’s updating software. It’s using multi-factor authentication. It’s protecting social media accounts and credentials. It’s training staff not to download every sketchy app they’re offered, like over-caffeinated lab rats. It’s investing in AI-powered defense tools to fight fire with fire—automated threat detection, behavioral analysis, and predictive breach detection. In other words, if the machines are evolving, so must we.

But none of this works without awareness. The greatest virus we face isn’t malware. It’s apathy. Too many Americans still treat cybersecurity like flossing—important, sure, but something they’ll get around to eventually. Meanwhile, AI doesn’t wait. It doesn’t procrastinate. It hunts.

So yes, the rise of the machines may well usher in the end of civilization—but only if we stand by and let it happen. The antidote isn’t panic. It’s preparation. It’s competence. It’s proper AI oversight. And it’s waking up to the fact that we are all soldiers in a quiet war where the front lines are firewalls, not foxholes.

Because at the end of the day, the machines aren’t coming to destroy us.

We’re just really, really good at destroying ourselves.

Tyler Durden Tue, 06/03/2025 - 23:50

Beijing Furious After Europe Uses "International Procurement Instrument" For First Time In Escalating Trade War With China

When it comes to its trade war with the US, Brussels is quick to parade just how anti-Trump it is, how unfair US trade practices are (just ignore the fact that Europe was far more protectionist for decades) and how much it loves free trade, honest. But in Europe's growing trade war with China (you don't really hear much about it because the media would rather public attention be soaked up by the far less important transatlantic feud, and away from the far more important Chinese trade war) thing are rapidly disintegrating. 

As Rabobank's Michael Every points out, the "We Love Free Trade" EU just used its International Procurement Instrument for the first time to freeze Chinese medical devices out of its public procurement markets for five years unless China opens its market to EU equivalents. As Every notes, "that’s economic statecraft with muscle, underlining that there are lots of tools in the mercantilist toolkit besides tariffs."

In response, Beijing took some time away from its constant criticism of US trade policy to also criticize as protectionist the European Union’s plan to curb Chinese medical device manufacturers’ access to public procurement contracts, and vowed to take action to protect the country’s interests, Bloomberg reports.

China urged the EU to handle any differences through dialog and cooperation to safeguard trade relations, the Commerce Ministry said in a statement on Tuesday. “China will closely monitor the EU’s follow-up actions” and will take measures to protect the rights and interests of Chinese enterprises, the ministry said.

Beijing’s comments come after EU member states overwhelmingly agreed to the curb, which would represent the first use of its International Procurement Instrument, a 2022 law that’s meant to promote reciprocity in access to public procurement markets, and represents a unique slant on how creative mercantilists can and will get when their markets are threatened. It allows the EU’s executive arm to impose various restrictions on firms seeking to participate in procurements, ranging from score adjustments in tenders to an outright ban from public contracts above €5 million ($5.7 million).

The dispute adds another irritant to relations and comes just as Beijing seeks to shore up ties with the EU, positioning itself as a more reliable partner as Donald Trump alienates the bloc over issues from tariffs to defense. In reality, when it comes to capturing market share, the only thing mercantilists are "reliable" in doing is slashing prices to boost exports. 

Chinese Commerce Minister Wang Wentao is due to meet with EU trade officials early this month in Paris, where he may address the bloc’s trade grievances including a lack of fair access to China’s own procurement market. European leaders will travel to Beijing for a summit next month with their Chinese counterparts. 

“At first glance recent EU moves relating to China seem a bit contradictory, reviving senior level interaction while taking measures against unfair imports,” said Wendy Cutler, a former senior US trade negotiator now at the Asia Society Policy Institute.

“But, in light of different types of pressures from member states, Brussels needs to navigate carefully when it comes to China,” she said. “It has no choice but to look for avenues of cooperation while sending a clear signal that the EU will stand up for European companies that are facing unfair competition.”

Only problem is that from China's point of view, the competition is completely fair, and it will retaliate accordingly.

Indeed, a Chinese business lobby group warned earlier that EU’s plans would hurt trade ties and the China Chamber of Commerce to the EU expressed “profound disappointment” over the move, according to a statement on Monday.

“Its targeted application against Chinese enterprises sends a troubling signal—not only adding new complexity to China-EU economic and trade relations, but also contradicting the EU’s stated principles of openness, fairness, and non-discrimination in market access,” said the organization, whose members include the Bank of China, Cosco Shipping Holdings Co. and BYD Co.

“Beijing appears to be sending a warning to all advanced economies that actions against China will have consequences,” said Gerard DiPippo, associate director of the RAND China Research Center. “The odds of an EU-China rapprochement are lower than some speculated after the trade war with the US started.”

Which, of course, will be music to Trump's ears, even if it will be difficult for the mainstream media to explain to its naive audience how the global trade war which it had repeatedly portrayed as "Trump against everyone", was really "everyone against everyone."

In response to a question on the EU’s move, Chinese Foreign Ministry spokesman Lin Jian on Tuesday called on the bloc to stand by its commitment to market rules. 

The EU launched an investigation into China’s procurement of medical devices last April, with the probe finding in January that Beijing discriminated against foreign firms. Consultations failed to find alternative solutions, Bloomberg previously reported.

The Chinese commerce chamber argued that market reciprocity must be based on “an accurate understanding of historical and practical realities.”

“For years, European medical device companies have enjoyed significant access to the Chinese market, playing a key role in supporting the modernization of China’s healthcare system and achieving substantial growth,” it said. “The EU’s current decision fails to acknowledge this context and undermines the spirit of balanced engagement and mutual benefit.” 

Tyler Durden Tue, 06/03/2025 - 23:25

55 Tons Of Meth Ingredient From China Bound For Mexican Drug Cartel Seized In California

By Noi Mahoney of FreightWaves

Authorities at the Port of Long Beach on Friday seized 55 tons of dicumyl peroxide, a chemical used to make methamphetamine.

The shipment originated in China and was destined for the Sinaloa drug cartel in Mexico, according to a news release from U.S. Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection.

The dicumyl peroxide was identified as a result of an initiative launched by ICE in 2019 to identify suspicious shipments of chemical precursors from China, India and other source countries that are destined for drug cartels in Mexico.

Since the initiative was launched, it has led to the interdiction of almost 1,900 tons of chemicals used to manufacture methamphetamines and fentanyl. 

In March, it led to the seizure of about 44 tons of glacial acetic acid at Port Houston, which was also destined for the Sinaloa cartel, ICE said.

“This initiative provides Homeland Security Investigations (HSI) with a game-changing method to stay one step ahead of the cartels by disrupting the flow of chemicals that they depend on to produce illicit narcotics,” Chad Plantz, ICE HSI-Houston special agent in charge, said in a statement.

Tyler Durden Tue, 06/03/2025 - 23:00