Zero Hedge

150 Years Of Data Destroy Democrat Dogma On Tariffs: Fed Study Finds They Lower, Not Raise, Inflation

150 Years Of Data Destroy Democrat Dogma On Tariffs: Fed Study Finds They Lower, Not Raise, Inflation

A new historical analysis is challenging the central premise that has guided trade policy, inflation forecasting, and Federal Reserve decision-making for decades. According to the study from the Federal Reserve Bank of San Francisco spanning 150 years of tariff changes across three major Western economies, higher tariffs consistently lower inflation and raise unemployment - directly contradicting longstanding economic orthodoxy.

 

The authors, Régis Barnichon and Aayush Singh, examined tariff shifts between 1870 and 2020 in the United States, the United Kingdom, and France - and came to the conclusion that the conventional view of tariffs causing inflation does not survive empirical scrutiny.

“We find that a tariff hike raises unemployment and lowers inflation,” they write. “This goes against the predictions of standard models, whereby CPI inflation should go up in response to higher tariffs.”

The distinction is subtle but crucial. The authors are not claiming that tariff hikes reduce the price level, only that they consistently reduce CPI inflation - the rate at which prices rise - in the short run, and that the effect is sizable. If the historical evidence is correct, policymakers may have been responding to a threat that did not exist.

If this sounds familiar, SOMEONE noted this in June of 2024...

Again, there is nothing controversial about this view: it is the definition of conventional wisdom. But what is conventional wisdom is once again dead wrong as it has been for much of the past 15 years?

That is the hypothesis of none other than one of the most outspoken and contrarian Wall Street strategists, BofA's Michael Hartnett, who in his latest Flow Show writes that far from inflationary, any new trade war launched by Trump will be a substantially deflationary event. -Hartnett via ZH, June 2024

A Political Divide Becomes an Economic Experiment

The study’s central methodological insight comes from American political history. For much of the period between Reconstruction and the Great Depression, Republicans and Democrats took sharply different positions on tariff policy. Republicans, aligned with industrial interests, favored higher tariffs; Democrats, representing agricultural regions, opposed them.

Because recessions did not systematically favor one party or the other, tariff changes often occurred for political - not economic - reasons. That allowed the authors to treat these shifts as a quasi-random policy experiment. When unemployment rose, Republicans often raised tariffs and Democrats often cut them, but not because of an underlying macroeconomic theory.

“Since recessions did not favor one party over another, there was no general relation between the direction of tariff changes and the state of the economy,” the authors explain.

The researchers also examined eight major tariff reforms driven by long-term political considerations - including the McKinley Tariff of 1890 and the Trump tariffs of 2018 - and found similar effects.

A Counterintuitive Relationship

The central finding is stark: a roughly four-percentage-point increase in average tariffs lowered inflation by about two percentage points and raised unemployment by roughly one percentage point. The relationship held across eras, from the pre-1913 globalization wave to the postwar period.

This pattern runs directly counter to standard economic theory, which holds that tariffs raise costs, push up consumer prices, and depress economic output. Instead, the historical record shows tariffs acting more like a negative demand shock - simultaneously tightening financial conditions and suppressing inflation.

“These findings point towards tariff shocks acting through an aggregate demand channel,” the authors conclude.

What exactly drives that channel remains unclear. The researchers note that tariff announcements often coincide with falling stock prices and spikes in market volatility, suggesting a possible link between uncertainty and weaker economic sentiment. Tariffs may also depress asset prices or alter wage bargaining dynamics. But the paper stops short of identifying the mechanism definitively.

The authors also found that: 

  • Stock prices tend to fall after tariff hikes.
  • Market volatility tends to rise.
  • Tariff announcements may tighten financial conditions or depress household wealth.
A Blow to the Economic Establishment

The implications are far-reaching. For decades, opponents of tariffs have argued that they operate as a regressive “tax on consumers.” During the 2024 presidential campaign, Kamala Harris frequently described Trump’s proposed tariffs as a national sales tax that would raise prices for American families.

The new evidence does not support that claim.

Instead, the study suggests the core inflation argument against tariffs - long treated as dispositive in policy debates - was never empirically grounded. Barnichon and Singh note that surprisingly little macroeconomic research has been conducted on tariff effects, and that much of the conventional wisdom rested on theoretical assumptions rather than historical evidence.

The authors are careful not to endorse any political position, and do not evaluate Trump’s trade policy directly. But their findings significantly weaken the strongest criticisms leveled against Trump's tariff program: that it would intensify inflation.

Did the Fed Misread Tariffs?

The findings also raise uncomfortable questions for the Federal Reserve.

Throughout 2025, several Fed officials warned that tariff hikes risked fueling inflation, and the central bank slowed the pace of rate cuts in part because of those concerns. But if tariffs historically lower inflation, then a textbook monetary response would have been to ease, not hold firm.

While the authors acknowledge that evidence from the modern era is less precise, their overall thesis (which will probably be buried) is clear: higher tariffs correlate with lower inflation and weaker economic activity.

What emerges is a fundamentally revised picture of tariff dynamics - which poses a challenge to models used by economists and central bankers that have underpinned inflation forecasts for rate decisions. 

Tyler Durden Mon, 11/17/2025 - 12:11

Key Events This Week: Macro Returns With Payrolls Thursday, FOMC Minutes And Speakers Galore, But Nvidia Earnings Matters Most

Key Events This Week: Macro Returns With Payrolls Thursday, FOMC Minutes And Speakers Galore, But Nvidia Earnings Matters Most

After the resolution of the US government shutdown, markets face a packed calendar of delayed and scheduled releases this week, although maybe the most important event will be Nvidia’s earnings after the closing bell on Wednesday.

According to DB's Jim Reid, one of the most interesting developments last week in the world of tech was the widening out of AI related CDS spreads, something we had been warning about for the past month. For example, Oracle 5yr CDS widened +18bps to 105bps and CoreWeave around +100bps to 630bps last week even as a volatile week for the Mag-7 ended in only a small -1.19% loss. The tights for the year for both were 33bps and 360bp respectively with the CoreWeave contract only starting trading in September. Some of this is concern about AI corporate bond supply over the next few quarters after a surprise surge in recent weeks. However, it seems that they are also being used as a general hedge for all sorts of positive AI positions. There aren’t many credit names to use to hedge AI lending (private and public), or general exposure, so these are bearing the brunt.    

The US calendar dominates this week as agencies work through the backlog caused by the 43-day shutdown. The headline event is Thursday’s September employment report. DB’s economists expect payrolls to rebound sharply, with headline and private payrolls both forecast at +75k versus consensus of +50k, prior readings of +22k and +38k respectively, leaving unemployment steady at 4.3%. Indicatively, Goldman is also above consensus, at +80k. Average hourly earnings should rise 0.3%, while hours worked edge up to 34.3. If realised, these figures would lift annual nominal compensation growth to 4.9%, though quarterly growth may slow to 3.7%, its weakest pace since the pandemic.

Beyond jobs, several delayed releases will inform Q3 US GDP estimates: August construction spending (today), factory orders (Tuesday), and the trade balance (Wednesday). Earlier data suggested 2.8% annualised growth for Q3 GDP, but this week’s numbers could tilt forecasts higher. More timely indicators include the Empire State manufacturing index (today), NAHB housing market index (tomorrow), Philadelphia Fed survey and October existing home sales (both Thursday). Consumer sentiment from the University of Michigan rounds out Friday, with inflation expectations within that survey remain a key watchpoint for policymakers.

Fed communication will be another major theme. A broad slate of officials speaks throughout the week, including Vice Chair Jefferson, Governor Waller (both today), and regional presidents Williams, Kashkari (today), Barkin and Collins. Markets will scrutinise these remarks for clues on the pace of rate cuts. Jefferson may be the most interesting to see whether he continues to suggest a slowing of rate cuts as the Fed approaches neutral.  

The October FOMC minutes, due Wednesday, should shed light on internal debates and the conditions for a potential December move. Recent commentary suggests a more cautious tone, with some officials signalling that a December cut is far from assured, and on Friday December futures priced in a less than a 50% chance of a cut for the first time. ECB President Lagarde also speaks on Friday, adding a European angle to the policy debate.

Globally, attention will centre on flash November PMIs due Friday. Canadian (today) and UK (Wednesday) CPI figures are released, with UK retail sales and consumer confidence rounding out Friday. In Asia, Japan reports October CPI on Thursday, while China announces lending rates the same day. Corporate earnings will also feature prominently, with Nvidia in the spotlight on Wednesday, joined by Palo Alto Networks and major US retailers such as Walmart, Home Depot and Target. Chinese tech names Baidu and Xiaomi will also report.

Below is a day-by-day look at the week ahead, courtesy of DB.

Monday November 17

  • Data: US November Empire manufacturing index, construction spending, Japan September capacity utilisation, Canada October CPI, existing home sales, housing starts, September international securities transactions
  • Central banks: Fed's Williams and Kashkari speak, ECB's Guindos, Sleijpen, Lane and Cipollone speak, BoE's Mann speaks

Tuesday November 18

  • Data: US November New York Fed services business activity, NAHB housing market index, September total net TIC flows, Japan October trade balance, September core machine orders
  • Central banks: Fed’s Barkin speaks, ECB’s Dolenc speaks, BoE's Pill and Dhingra speak
  • Earnings: Home Depot, Baidu, Xiaomi, PDD

Wednesday November 19

  • Data: US trade balance, UK October CPI, RPI, PPI, September house price index, Italy September current account balance, ECB September current account
  • Central banks: FOMC minutes, Fed’s Williams, Barkin and Logan speak
  • Earnings: Nvidia, Palo Alto Networks, Target, Lowe’s, TJX
  • Auctions: US 20-yr Bonds ($16bn)

Thursday November 20

  • Data: US September nonfarm payrolls, unemployment rate, hourly earnings, October leading index, existing home sales, November Philadelphia Fed business outlook, Kansas City Fed manufacturing activity, Japan October national CPI, Germany October PPI, Eurozone November consumer confidence, September construction output, Canada October industrial product and raw materials price index, Denmark Q3 GDP
  • Central banks: China 1-yr and 5-yr loan prime rate, Fed's Hammack, Goolsbee and Paulson speak, BoJ's Koeda speaks, BoE's Dhingra speaks
  • Earnings: Walmart, Gap, Intuit, Copart
  • Auctions: US 10-yr TIPS (reopening, $19bn)

Friday November 21

  • Data: US, UK, Japan, Germany, France and the Eurozone flash November PMIs, US November Kansas City Fed services activity, US consumer sentiment, UK November GfK consumer confidence, October retail sales, public finances, France November manufacturing confidence, October retail sales, Canada September retail sales
  • Central banks: Fed's Williams and Logan speak, ECB's Lagarde, Guindos, Kocher, Muller and Nagel speak, BoE's Pill speaks

Finally, looking at just the US, Goldman writes that with the government now open, it expects the statistical agencies to continue updating their data release schedules over the coming days. There are several speaking engagements from Fed officials this week, including a speech on the economic outlook by Vice Chair Jefferson on Monday. The minutes to the FOMC’s October meeting will be released on Wednesday.

Monday, November 17 

  • 08:30 AM Empire State manufacturing survey, November (consensus +5.8, last +10.7)
  • 09:00 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver welcoming remarks at the New York Fed’s 2025 Governance and Culture Reform Conference. In an interview with the Financial Times published on November 9th, Williams described the FOMC’s interest rate decision at its December meeting as “a balancing act,” reflecting the fact that “inflation is high” while the labor market was “gradually cooling.” He noted that “Something could happen that cuts into confidence, or consumer spending growth that we’re seeing at the aggregate level may not be as robust, if you will, as it would be otherwise, given that a lot of folks are really, again, living month to month.”
  • 09:30 AM Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on the economic outlook and monetary policy at an event hosted by the Kansas City Fed. Text and moderated Q&A are expected. On November 7th, Jefferson said that it “makes sense to proceed slowly as we approach the neutral rate.” Jefferson said he takes a “meeting-by-meeting approach” to policy decisions, which he said was “especially prudent because it is unclear how much official data we will have before our December meeting.”
  • 10:00 AM Construction spending, August (GS flat, consensus -0.1%, last -0.1%)
  • 01:00 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will moderate a fireside chat with Christophe Beck, CEO of Ecolab. On November 13th, Kashkari said that “the anecdotal evidence and the data we got just implied to me underlying resilience in economic activity, more than I expected.” He said he could “make a case—depending on how the data goes—to cut [at the FOMC’s December meeting], I can make a case to hold, and we’ll have to see.”
  • 03:35 PM Fed Governor Waller speaks: Fed Governor Chris Waller will deliver a speech on the economic outlook at The Society of Professional Economists’ annual dinner. Moderated and audience Q&A and text are expected. On October 31st, Waller said that “the biggest concern we have right now is the labor market.” He added that “we know inflation is going to come back down, so this is why I’m still advocating that we cut policy rates in December, because that’s what all the data is telling me to do.”

Tuesday, November 18 

  • 08:15 AM ADP employment weekly preliminary estimate, average for the four weeks ended November 2 (last 11.25k)
  • 10:00 AM Factory orders, August (GS +1.3%, consensus +1.4%, last -1.3%); Durable goods orders, August final (GS +2.9%, consensus +2.9%, last +2.9%); Durable goods orders ex-transportation, August final (consensus +0.4%, last +0.4%); Core capital goods orders, August final (consensus +0.6%, last +0.6%); Core capital goods shipments, August final (last -0.3%)
  • 10:00 AM NAHB housing market index, November (consensus 36, last 37)
  • 10:30 AM Fed Governor Barr speaks: Fed Governor Michael Barr will deliver a speech on bank supervision at the Kogod School of Business at American University. Moderated and audience Q&A and text are expected. On October 9th, Barr said that “although several data points indicate that the labor market may be roughly in balance, we also know there has been a sharp drop in job creation since May, which suggests risks to the labor market going forward.” However, he noted that the “Federal Reserve's price stability goal faces significant risks,” adding that he is “skeptical of assurances that we should fully look through higher inflation from import tariffs.”
  • 11:00 AM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver a speech on the economic outlook at the Top of Virginia Regional Chamber at Shenandoah University. Text and audience Q&A are expected. On October 16th, Barkin said he remained “sanguine” on the economic outlook, noting that “the ground may look shaky today” but there were “countervailing forces that will limit the downside.”
  • 07:55 PM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will deliver closing remarks at the Dallas Fed’s Global Perspectives conference. On November 16th, Logan said she would find it “hard to support another rate cut unless we were to get convincing evidence that inflation is really coming down faster than my expectations or that we were seeing more than the gradual cooling that we’ve been seeing in the labor market.”

Wednesday, November 19 

  • 08:30 AM Trade balance, August (GS -$68.0bn, consensus -$60.3bn, last -$78.3bn)
  • 10:00 AM Fed Governor Miran speaks: Fed Governor Stephen Miran will deliver a speech on the US financial regulatory framework at the Bank Policy Institute. Text and moderated Q&A are expected. On November 14th, Miran said that since the September meeting (where the median projection in the Summary of Economic Projections (SEP) showed three interest rate cuts in 2025) “all the data that we’ve gotten have been dovishly inclined.” On November 10th, Miran said the FOMC should cut 25bp in December “at a minimum.”
  • 12:45 PM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver the same speech on the economic outlook that he will give on November 18th at the University of Richmond’s Jopson Alumni Center. Text and audience Q&A are expected.
  • 02:00 PM FOMC meeting minutes, October 28-29 meeting: At its October meeting, the FOMC lowered the target range for the funds rate by 25bp to 3.75-4% and announced that balance sheet runoff would end at the start of December. At the post-meeting press conference, Powell emphasized that policy is not on a preset course (“far from it”), acknowledged that there are “strongly different views” on the FOMC about a December cut, and noted that some participants might see the lack of official data as a reason not to cut in December. We suspect there is substantial opposition on the FOMC to the risk management cuts, and we expect the minutes to the FOMC’s October meeting to reflect those concerns. Powell himself noted that “there’s a growing chorus now of feeling like maybe this is where we should at least wait a cycle, something like that, … and … you can expect that in the minutes.”
  • 02:00 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver welcoming remarks at an event titled “Making Missing Markets: Connecting Communities and Capital” at the New York Fed.

Thursday, November 20 

  • 08:30 AM Initial jobless claims, week ended November 15 (GS 230k, consensus 225k, GS estimate of last 228k): Continuing jobless claims, week ended November 8 (GS estimate of last 1,936k)
  • 08:30 AM Nonfarm payroll employment, September (GS +80k, consensus +50k, last +22k): Private payroll employment, September (GS +85k, consensus +60k, last +83k); Average hourly earnings (MoM), September (GS +0.2%, consensus +0.3%, last +0.3%); Unemployment rate, September (GS 4.3%, consensus 4.3%, last 4.3%): We estimate nonfarm payrolls rose 80k in September. On the positive side, big data indicators indicated a sequentially firmer pace of private sector job growth. On the negative side, we expect a 5k decline in government payrolls, reflecting a 10k decline in federal government payrolls and a 5k increase in state and local government payrolls. We suspect August payroll growth will be revised higher, as has been typical over the last decade, though revisions so far this year have been disproportionately downward. We estimate that the unemployment rate was unchanged at 4.3% on a rounded basis, reflecting the stabilization in continuing claims over the September reference period, though the bar for rounding up to 4.4% is not high from an unrounded 4.32% in August. We estimate average hourly earnings rose 0.2% (month-over-month, seasonally adjusted), reflecting negative calendar effects.
  • 08:30 AM Philadelphia Fed manufacturing index, November (GS -1.0, consensus 2.0, last -12.8)
  • 08:45 AM Cleveland Fed President Hammack (FOMC non-voter) speaks: Cleveland Fed President Beth Hammack will deliver opening remarks at the 2025 Financial Stability Conference hosted by the Cleveland Fed. Q&A is expected. On November 13th, Hammack said that she thought the FOMC needed to “remain somewhat restrictive to continue putting pressure to bring inflation down toward our target,” which would involve keeping rates “around these [current] levels.”
  • 10:00 AM Existing home sales, October (GS flat, consensus +0.5%, last +1.5%)
  • 11:00 AM Fed Governor Cook speaks: Fed Governor Lisa Cook will take part in an event on financial stability hosted by Georgetown University. Moderated and audience Q&A and text are expected. On November 3rd, Cook said that inflation was “on track to continue on its trend toward our target of 2 percent once the tariff effects are behind us” and that “the slightly rising unemployment rate indicates the labor market is softening, but only modestly so.” Cook also noted that the labor market “can deteriorate very quickly. There can be non-linear effects. So I’m watching this very, very carefully.”
  • 12:40 PM Chicago Fed President Goolsbee (FOMC voter) speaks: Chicago Fed President Austan Goolsbee will take part in a moderated discussion at a lunch hosted by the CFA Society of Indianapolis. Moderated Q&A is expected. On November 6th, Goolsbee said that the lack of data during the government shutdown meant that if there were “problems developing on the inflation side, it’s going to be a fair amount of time before we see that,” which he said made him “even more uneasy.” Goolsbee said he “lean[s] more toward the, ‘When it’s foggy, let’s just be a little careful and slow down.’”
  • 06:15 PM Fed Governor Miran speaks: Fed Governor Stephen Miran will take part in an event hosted by the American Investment Council. Moderated Q&A is expected.
  • 06:45 PM Philadelphia Fed President Paulson (FOMC non-voter) speaks: Philadelphia Fed President Anna Paulson will deliver a speech on the economic outlook at the Philadelphia Fed’s 80th Annual Field Meeting Capstone. Text is expected. On October 13th, Paulson said she did not see “the type of conditions, especially in the labor market, which seem likely to turn tariff-induced price increases into sustained inflation.” At the same time, Paulson noted that “momentum in the labor market is to the downside.” Paulson said she viewed “easing along the lines of the median Summary of Economic Projections (SEP) policy path as appropriate” over the rest of the year.

Friday, November 21 

  • 07:30 AM New York Fed President Williams speaks: New York Fed President John Williams will deliver a keynote speech at the Annual Conference of the Central Bank of Chile. Text and Q&A are expected.
  • 08:30 AM Fed Governor Barr speaks: Fed Governor Michael Barr will deliver welcoming remarks at the Fed Challenge finals. Text is expected.
  • 08:45 AM Fed Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on financial stability at the Cleveland Fed’s 2025 Financial Stability Conference. Text and audience Q&A are expected.
  • 09:00 AM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will take part in a moderated panel at The SNB and Its Watchers 2025 conference in Zurich. Text and Q&A are expected. 
  • 09:45 AM S&P global US manufacturing PMI, November preliminary (consensus 52.0, last 52.5); S&P Global US services PMI, November preliminary (consensus 55.0, last 54.8)
  • 10:00 AM University of Michigan consumer sentiment, November final (GS 50.0, consensus 50.8, last 50.3); University of Michigan 5-10-year inflation expectations, November final (GS 3.6%, last 3.6%)

Source: DB, Goldman

Tyler Durden Mon, 11/17/2025 - 11:27

Novo Undercuts Lilly's Obesity Drug Price, Now Cheaper Than Car Payment 

Novo Undercuts Lilly's Obesity Drug Price, Now Cheaper Than Car Payment 

Just before the US cash session, Novo Nordisk A/S announced it will slash prices on Wegovy and Ozempic in a direct challenge to Eli Lilly's obesity drug, aiming to regain market share. The announcement comes just weeks after President Trump finalized a deal with Novo and Lilly to reduce costs as part of the administration's affordability push ahead of next year's midterms.

Beginning immediately, introductory doses of Wegovy and Ozempic will cost just $199 per month for the first two months for cash-pay patients. After that, the price rises to $349 per month. This makes Novo's obesity drugs approximately 30% cheaper than Lilly's low-dose Zepbound and dramatically lower than the more than $1,000 per month many patients paid last year.

In the eyes of the consumer, $1,000 monthly payments for obesity drugs made little financial sense. However, now $349 per month could be viewed as "cheap" considering the average new car payment is $749 and the average used car payment is $529, according to the latest Experian data. 

Novo pointed out that the price cut aligns with a recent agreement with the Trump administration to expand access to medicines for patients living with obesity and other chronic conditions like diabetes, while lowering prices in the direct-to-patient, self-pay channel for 2026, adding "Novo Nordisk is bringing these prices to consumers months in advance of that commitment." 

Earlier this month, Novo and Eli Lilly struck deals with the Trump administration to lower the prices of their blockbuster obesity drugs.

"I call it the fat drug ... we're offering it at drastic discounts," Trump told reporters at the time. 

Novo shares in Copenhagen fell on the news, down about 2%. The stock is down roughly 51% for the year.

Goldman analysts recently mapped out the next wave of obesity-drug catalysts in a report to clients (read the report). 

Tyler Durden Mon, 11/17/2025 - 11:00

Lower The Steaks, Raise The Stakes

Lower The Steaks, Raise The Stakes

By Benjamin Picton, Senior Market Strategist at Rabobank

US stocks closed mixed on Friday to cap off a week where concerns over valuations caused substantial wobbles. The NASDAQ was in the red for the week while the Dow Jones and S&P500 managed to eke out minor gains. Markets have seemingly begun to pay attention to the heroic P/E multiples that many AI-adjacent names are trading on, with more questions being raised about the ability of AI hype to be converted into tangible profits for shareholders.

Scion Capital’s Michael Burry (of Big Short fame) made headlines last week by shutting down his hedge fund, telling investors that “my estimation of value in securities is not now, and has not been for some time, in sync with the markets”. Burry had been critical of tech darlings Palantir and NVIDIA, disclosing on X that he had spent $9.2m buying up puts against Palantir stock as he questioned the economics of the AI boom and suggested that some accounting practices concerning depreciation schedules looked rubbery. News emerged this morning that Palantir co-founder Peter Thiel has sold his entire stake in NVIDIA and substantially trimmed his position in Tesla while adding to longs in Microsoft and Apple.

There was also a geopolitical element to risk-off sentiment last week. Crude oil prices lifted after Iran’s Revolutionary Guard Corps seized a tanker in the Strait of Hormuz – the first such seizure since the end of the war between Iran and Israel in June – and Donald Trump said that he had “made up [his] mind” on Venezuela, hinting that the 15,000 US troops and more than a dozen warships (including the US’s largest warship, the USS Gerald R. Ford carrier) recently moved to the area as part ‘Operation Southern Spear’ could see action to oust the Maduro regime. Maduro, clearly sensing the danger, broke into a rendition of John Lennon’s ‘Imagine’ (yes, really) at a rally on Saturday as he urged peace.

Events in the Russia-Ukraine war also added to pressure on energy markets. Ukrainian strikes on the Russian Black Sea port of Novorossiysk has reportedly interrupted up to 2% of Russian oil supply while drone strikes on a refinery near Ryazan south of Moscow put further pressure on Russia’s ability to produce refined hydrocarbons used as transport fuels. Consequently, European gasoil futures closed the week 2.86% higher.

According to the Guardian, Russia has responded to Ukrainian strikes by targeting Ukrainian rail infrastructure and train drivers. The Guardian cites a Ukrainian government Minister who says that there has been a threefold increase in strikes on the Ukrainian rail system since July. Degrading Ukrainian rail infrastructure makes it more difficult for Ukraine to move troops and supplies to the front lines, but it will also make it harder to move grain cargoes out of the country. RaboResearch’s Agri Commodity Market Research team have just published their 2026 annual outlook available here.

Geopolitical risks have also been rising elsewhere. Relations between China and Japan have deteriorated over recent comments by Japanese PM Takaichi suggesting that a Chinese strike on Taiwan could be considered “existential” for Japan, and therefore justify Japanese military intervention under the country’s pacificist constitution. Meanwhile, tensions between India and Pakistan have been rising following a series of bombings and the government of Thailand has said that it is suspending its ceasefire with Cambodia, accusing the latter of laying landmines at the border. The US has responded by suspending trade deal talks with Thailand in a bid to pressure the latter to recommit to the ceasefire.

Spot gold benefited from rising geopolitical risks to close more than 2% higher on the week at $4,082/oz. Bitcoin has been heavily sold off and is dealing just over $94,000/coin at time of writing. The DXY missed a safe-haven bid last week and US 10-year yields rose by almost 3 basis points on Friday to 4.15%. That’s a rise of just over 5 basis points on the week, but US 10s outperformed their counterparts in Australia and the UK after a strong jobs report all but dashed hopes of another rate cut in the former and the rolling political and budgetary shambles in the latter scared investors away. Yields on 10-year French OATs fell slightly on the week while Bunds performed similarly to Treasuries.

Having felt the sting of recent election losses, the Trump administration has moved quickly to shore up support via cost of living measures for America’s middle and working classes. Notable recent items include a $2,000 tariff “dividend” for low and middle-income Americans, a $1,000 tax-advantaged ‘Trump Account’ invested in US stocks for babies born from 2025 through 2028, hinted 50-year mortgages and mooted changes to health insurance arrangements to see government funding redirected from insurance companies direct to individuals’ accounts.

The administration also announced on Friday that it would be exempting certain food items from tariffs. Exempt items include beef, coffee, cocoa, bananas, tomatoes, avocadoes, coconuts, pineapples, oranges, tea, nutmeg and cinnamon. Many of these items share the characteristic of having little or no domestic supply source in the USA or, in the case of beef, supply that is heavily constrained by the lowest US herd numbers since the 1950s. Consequently, tariff protection is unlikely to induce a near-term domestic supply response and (contingent on demand elasticities) is likely to be passed through to consumers as higher prices.

The reduction in tariffs on imported foodstuffs is therefore likely to reduce inflation pressures. This will be an interesting point of consideration at the December FOMC meeting as Fed rate-setters sift through the backlog of data that had been delayed by the US government shutdown and try to guess at the path ahead for inflation, employment and growth while also weighing up threats from frothy asset markets and geopolitical risks. OIS futures are currently pricing a 41% probability of a 25bp cut at the December meeting...

... but perhaps lowering the cost of steaks raises the stakes for the FOMC?

Tyler Durden Mon, 11/17/2025 - 10:40

USPS Reports 5.7% Decline In Parcel Volumes, $9BN Loss

USPS Reports 5.7% Decline In Parcel Volumes, $9BN Loss

Submitted by Eric Kulisch of FreightWaves,

The U.S. Postal Service lost $9 billion in fiscal year 2025, a $500 million improvement from the prior year that officials attributed to greater revenue intake and reduction in transportation and workers compensation costs. But controllable loss, essentially adjusted operating income that excludes expenses such as workers compensation that are out of management’s control, worsened from $1.8 billion to $2.7 billion.

Financial results for the year ended Sept. 30 were released Friday as the Postal Service ups its tempo for the busy holiday period, when package and greeting card volumes surge. 

The U.S. Postal Service needs to “execute flawlessly” during the peak shipping season before Christmas, and beyond, to demonstrate it can sustain improved service performance and win more parcel volumes necessary for the organization’s financial recovery, Postmaster General David Steiner said in a video address to employees this week.  Service levels are steadily improving this year and the Postal Service is regularly able to achieve on-time service in the high-eighty and mid-ninety percentiles for some of our products, he told the board of governors Friday. And nearly half of the packages and mail are actually delivered earlier than the service standard.

The national post said operating revenue increased $916 million, transportation expenses fell $422 million and worker’s compensation expense declined $1.1 billion, partially offset by increased compensation and benefits expense of $1.7 billion, including a voluntary retirement program, and higher other operating expenses of $221 million.  About 10,500 employees accepted early retirement offers leading to a $167 million expense provision.

Total operating revenue was $80.5 billion, an increase of $916 million, or 1.2 percent, compared to the prior year. The increase was due largely to continued growth of USPS Ground Advantage shipping service, which replaced first-class package services in 2023 and offers two-to-five day service standards for packages up to 70 pounds, as well as price increases in both mail and shipping categories.

First-Class Mail revenue increased 1.5% ($370 million) on a 5% volume decline year over year. Marketing Mail revenue increased 2.3% ($350 million), despite a 1.3% decline in volume. Shipping and packages revenue increased 1.0% to $32.6 billion despite a 5.7% volume decline, or 415 million pieces. 

The Postal Service is seeking further administrative and legislative reforms to get rid of outdated financial and regulatory burdens that other government agencies don’t face. These reforms include: changes in retiree pension benefit funding rules for the Civil Service Retirement System benefits, diversification of pension assets, raising the statutory debt ceiling, and workers’ compensation administration reform. The Postal Service Reform Act of 2022 repealed the requirement that the USPS annually prepay future retirement health benefits, but more structural changes are needed, postal officials say. 

Steiner, who has been on the job for a little more than 100 days, said he planned to build on the Delivering for America transformation plan of his predecessor, Louis DeJoy, saying the Postal Service is “generally on the right track in terms of network modernization strategies.”

He stressed the importance of generating more revenue by attracting parcel business, which postal watchers say is one of the few tools available since most costs are fixed and difficult to lower. In a news release last month, Steiner added that he expects the Postal Service to continue gaining market share in the parcel sector.

The USPS, which delivered an average of 23.9 million packages per day in 2024, controls more than 30% of the parcel market by volume. Despite being the market share leader, it only gets about 17% of the market’s total revenue, compared to UPS’s nearly 32% of revenues and FedEx, with 25% of the available revenue, according to ShipMatrix. 

“By any standard our financial situation is precarious. No organization, even the Postal Service, can lose billions every year without consequences. Over the coming 12 months, we are going to act with urgency to get on a financially sustainable path,” Steiner said in the video.

Peak season prep

Postal service officials say they are ready for the busiest mailing period of the year. 

Over the past four years, the U.S. Postal Service has invested nearly $20 billion in its facilities, logistics and processing capabilities, to streamline its mail and package network and improve delivery reliability. 

The USPS has added 94 high-tech package sorting machines this year. The installation of 614 total automated sorters over the past five years has increased daily processing capacity from 60 million to 88 million packages. The machines have automated scanning capabilities that allow tracking visibility for customers as packages move through the postal system and can handle larger packages than legacy machines, according to the semi-private agency. 

The Postal Service is hiring 14,000 temporary employees to help handle the surge in letters and parcels, down from 40,000 a few years ago. There is less need for temporary workers after the USPS in 2020 began converting 232,000 precareer employees to full-time positions. 

This year, the national post has opened new facilities in Dallas, Phoenix; Johnson City, Tennessee; and other locations, and will soon open buildings in Memphis, Tennessee; Birmingham, Alabama; Tampa, Florida; and San Antonio, Texas.  Within the past four years, USPS has opened nine regional processing and distribution centers; 19 regional transfer hubs (which now handle two thirds of three-to-five day Ground Advantage packages); 17 local processing centers and 133 sorting and delivery centers. 

At the same time the USPS is adding more efficient infrastructure, it is closing other facilities in an effort to consolidate operations. 

The U.S. Postal Service in 2021 had 427 facilities, many of them operated by contractors or under short-term leases, functioning in an uncoordinated manner. Under the transformation agenda initiated by former Postmaster General Louis DeJoy, the agency is moving to standardize operations by downsizing the network to 250 facilities — 60 regional processing and distribution centers, and 190 local  processing centers that sort letters, flats and parcels for final-mile delivery. Critics say the reorganization has negatively affected service in recent years.

Updated service standards this year allow the USPS to turn around mail within a region in two or three days, an improvement from the past, according to the USPS.

“Without a doubt, the Postal Service is in a better place today than it would have been without these initiatives. They dramatically improved our middle mile operations to transform the Postal Service into a logistics powerhouse,” Steiner said during the board meeting. “While we may change specific initiatives as we move forward and our execution needs improvement, I do not see the need for a fundamental reassessment of our processing and logistics modernization strategies at this time.”

The Postal Service said it has received nearly 29,000 new vehicles this year and deployed more than 24,000 of them on postal delivery routes. The Postal Service expects to acquire a total of 106,480 new vehicles, including 66,000 zero-emission electric vehicles, aimed at improving service reliability and reducing emissions. 

Tyler Durden Mon, 11/17/2025 - 10:00

'Goldilocks' Empire Fed Manufacturing Survey Surges To One Year High

'Goldilocks' Empire Fed Manufacturing Survey Surges To One Year High

Amid the last month's absence of hard economic data, investors have had to rely on soft survey data (and alternative providers) and that has been somewhat optimistic...

Today, we saw yet another soft survey data point beat expectations as the NY Fed's 'Empire State Manufacturing Survey' surged to +18.7 from +10.7 and smashing expectations of a +5.8 print...

“Manufacturing activity grew at a solid pace in New York State, with the survey’s headline index reaching its highest level since last November," said Richard Deitz, Economic Research Advisor at the New York Fed.

Gauges of new orders and shipments also advanced to the highest in a year.

The overall outlook over the next six months moderated but has been positive for most of the year.

A measure of factory employment edged up and a gauge of hours worked climbed to the highest since May 2022 against the backdrop of steadier demand. The outlook for employment in the next six months climbed to the highest since the start of the year.

Additionally, The Fed’s report showed gauges of prices paid for materials as well as a measure of prices received both eased. Forward-looking metrics for both also cooled.

Finally, we find it interesting that this survey soared after the election of Marxist sympathizer Mamdani as NYC mayor?

Tyler Durden Mon, 11/17/2025 - 09:30

A Very Important Week For Consumer Stocks 

A Very Important Week For Consumer Stocks 

Goldman's top sector specialist, Scott Feiler, offers four thoughts on the consumer ahead of what he calls a "very important week" for the space.

Feiler said that consumer stocks finally showed signs of life last week, helped by a few solid earnings beats, but the improvement was mostly based on market rotation as AI names dumped for three consecutive days.

He said the next round of consumer earnings, from now till Thanksgiving, should look better than the first leg of the earnings season. 

Positioning in discretionary sits at 7-year lows, he noted, adding that many traders are reluctant to pre-trade a 2026 "consumer rebound" given that the group still trades in the shadow of daily AI moves and a labor market that feels soft. 

Here's what Feiler is telling clients about consumer stocks before the week kicks off:

1. Consumer Refresh – The consumer group finally acted a little better last week. Why? It helped that the limited consumer EPS reports we got were good and were finally rewarded, as opposed to faded (ONON, REAL, DDS). We should get a run of good results this week and next from a bunch of the bellwethers. It won't be unanimous, but earnings between now and Thanksgiving should feel much better than the 1st part of the consumer earnings season.

While the better EPS results helped last week, the improved price action really just felt primarily the result of market factors.   The sector outperformed the market 3 days in a row (Tuesday to Thursday). Those 3 days just so happened to be the 3 days of the substantial AI underperformance.

2. What Next for Consumer? Hope, but Without Conviction:

It does feel like we can see some better price action in consumer until year-end. It does not feel like it can happen in a straight line though. We highlighted gross exposure last week in discretionary is at 7 year lows (GS PB) and there is still optimism about the tax refund/stimulus trade in 1H26.

3. Bellwether Week Ahead – Better Results Finally?:

  • Glass Half Full Week?: Some of the biggest consumer companies in the world report this week.  It will not be perfect but would expect this week of earnings to be better than the last few in Consumer.

  • WMT - No Change?: Given some of the recent concerns on the US consumer, there are few more important things this week than WMT. A beat and raise is expected. It is worth noting that our analyst, Kate McShane, spoke with the management 3x during September and October. Their message was always that they had seen no change to the US Consumer, despite industry concerns. COST did release October results a couple weeks after our last conversation with WMT and COST noted some slowdown at the end of October. Bottom-line, expectations are for WMT's actual results to be quite good still, but there will be a focus as to whether they saw the late October and early November slowing that others alluded to.

  • Others That Should Beat: There will be plenty of other really important ones also. Beats are expected are TJX, WSM, ROST & GAP. Then next week, beats are expected from BBY, BURL, DKS, URBN & others.

  • Home Improvement – Price Action is a Must Watch: Sentiment has cooled here very recently. Small top-line downside is expected from both HD and LOW and consensus numbers in 2026 have been moving lower. Despite some expected squishiness here, there does still seem to be investors optimism that pockets of housing are ownable into 2026 (HD especially). That is why price action will be just as telling as actual results, given few names in consumer have traded well on squishy results so far.   Our view is the price action out of HD and LOW feels like it will be more important than the actual results, absent a shock out of numbers (other than tiny top-line downside).

4. De-grossing Activity Slowed & Consumer Was Slightly Better to Buy: In last weekend's note, we highlighted how gross exposure to consumer discretionary on our PB book hit 7 year lows. This past week, the PB noted single stocks saw their largest gross trading activity in over 4 years, and Consumer Discretionary and Staples both participated in that, and were both better to buy. That's a change vs the recent trend.

The total PB book saw long buys outpacing short sales (3.4 to 1). Consumer was not alone in higher trading activity, as all sectors saw increased gross trading flow, led in $ terms by Info Tech (short sales > long buys), Industrials (long buys > short sales), Health Care (long buys > short sales).  Consumer Disc (long buys > short sales), and Staples (long buys > short sales) were close behind though.

Investor positioning within the consumer stocks that Feiler's desk tracks.

Related:

With low-income consumers certaintly pressured, the Trump administration has launched:

All eyes are on low-tier consumers. Their sentiments matter. 

Tyler Durden Mon, 11/17/2025 - 09:15

US Home Builders Offer 'Elevated' Incentives Amid Affordability Challenges

US Home Builders Offer 'Elevated' Incentives Amid Affordability Challenges

Authored by Mary Prenon via The Epoch Times (emphasis ours),

Faced with affordability constraints and cautious demand, and with abundant land in states such as Arizona, Utah, Texas, and Florida, many developers are offering enticing incentives to potential homebuyers.

A model of a new single-family home at The Ridge at Stone Butte in Phoenix, Arizona. Courtesy of RE/MAX Signature in Phoenix

A recent Redfin report indicates that builders are offering mortgage-rate buydowns, assistance with closing costs, and upgraded home amenities to attract buyers. In areas where supply exceeds demand, the report found builders offering up to $10,000 in closing costs, as well as top-of-the-line appliances or home finishes.

“New homes still make up a significantly higher portion of the single-family supply than before the pandemic,” the report states. As demand escalated during the COVID-19 pandemic, new home construction increased to approximately 35 percent in 2022, up from 20 percent in 2019.

While new construction has slowed to 27 percent in August, some markets are still experiencing a glut of leftover new homes on the market. As a result, the report indicates, builders may be cautious about starting new projects as they attempt to sell off existing inventory.

In its October report, the National Association of Home Builders’ (NAHB) housing market index (HMI) found that 38 percent of builders were reducing prices by as much as 6 percent, while 65 percent indicated they were offering sales incentives to prospective buyers.

Still, the NAHB noted that builder confidence for newly-constructed single-family homes was 37 in October—up by five points from September and the highest reading since April.

D.R. Horton, one of the country’s largest homebuilders, recently reported that its homebuilding revenue for the fiscal year ending Sept. 30 decreased by 7 percent to $31.5 billion, with homes closed dropping by 5 percent to 84,863.

In an Oct. 28 statement, the Arlington, Texas-based company indicated it had 29,600 homes in inventory, of which 19,600 were unsold as of the end of September.

David Auld, D.R. Horton’s executive chairman, said that affordability constraints and cautious consumer sentiment are still impacting new-home demand.

A newly built 3-bedroom, 2-bath home in Willis, Texas, is listed for $535,000. Courtesy of the Houston Association of Realtors ‘Incredible Deals’

Developers in Houston, Texas, are offering “incredible deals,” Houston Association of Realtors Vice Chair Kat Robinson told The Epoch Times.

“Some of them have mortgage interest rates as low as 3.99 percent—that’s unbelievable,” she said.

“So now buyers have the choice of paying around 6 percent for a resale where they may have to make some repairs, or just drive an extra 15 minutes to buy something new for a much lower rate.”

Other concessions include help with closing costs or upgrades to appliances or countertops.

“The incentive plans change about every month based on the number of units sold,” Robinson noted.

Sales of new single-family homes are comparable to last year, she said, and much better than in 2023. Pricing varies by development and location, but on average, a 1,800-square-foot new construction with three bedrooms and two baths is listed for $500,000.

Many developments offer a community center, pool, walking paths, other amenities, along with monthly homeowners association (HOA) fees.

Still, resale homes continue to draw prospective buyers.

“A lot of older neighborhoods have full-grown trees that canopy the streets and create a charming experience,” Robinson said. “A lot of people do prefer resale homes because they want trees.”

According to Robinson, the greater Houston area has more listings than ever, and buyers now have many choices and more negotiation power.

Some Areas See Higher Sales

Christy Walker, president of the Phoenix Realtors, told The Epoch Times that nearly 10 percent of the 19,200 active home listings in the greater Phoenix area are new builds, and she has seen developers offering buyer incentives.

Some of the incentives include lower interest rates of 4.5 percent on conventional loans and 4.25 percent on Federal Housing Administration (FHA) loans, according to Walker. Other incentives include assistance with closing costs or home upgrades, such as appliances or finishes.

Meanwhile, Walker has witnessed higher sales for new construction in the area.

“We have a new build that we’re selling, and appointments to see models on the new construction site were scooped up within the first hour,” she said.

“We now have over 600 on a waiting list to see them.”

Located in North Phoenix, The Ridge at Stone Butte offers single-family homes ranging from 1,600 to 4,000 square feet, featuring gourmet kitchens, spa-like bathrooms, walk-in closets, and panoramic views of the desert.

Walker noted that new construction for a 1,800-square-foot, single-family home with three bedrooms and two bathrooms typically lists in the mid-$600,000s.

“With the median sales price of about $550,000 for a similar resale home, a lot of potential homeowners are opting for a brand new home—one where they can actually save on mortgage interest costs,” she said.

Because Phoenix and its outlying regions have abundant available land, the area has traditionally been a popular place for new home development.

“We have a lot of out-of-state buyers looking for more affordable options, as well as some local move-up and first-time buyers,” Walker noted.

New Construction in 2026

In its Emerging Real Estate Trends for 2026 report, PCW and the Urban Land Institute forecast that builders are looking to the future with cautious optimism. While new homes and resale inventory are increasing, some builders are shifting to single-family rental partnerships and slowing down on major land purchases.

“Affordability remains the greatest challenge and is being addressed by constructing smaller, lower-spec homes, as most buyers are willing to sacrifice size and finishes for price relief,” the report states.

The report suggests one method builders could use to make homes more affordable is to build smaller ones. The average size of a new single-family home fell to 2,386 square feet in the second quarter from a peak of 2,692 square feet in 2016.

Other builders say they plan to lower the ceiling height, provide fewer windows, and add lower-finish countertops to save costs.

Some builders surveyed believe rising costs in labor and materials could be challenging over the next two years. Almost all stressed the need for collaboration with local municipalities to allow for increased density, thereby reducing housing costs and streamlining the permitting process and project approvals.

In an earlier report this year, the National Association of Realtors found that the South is experiencing some of the best deals in new home construction. It named the five markets with the largest declines in new home prices: Little Rock, Arkansas, with a 15.6 percent drop; Austin, Texas, 8.5 percent lower; Wichita, Kansas; Jacksonville and Cape Coral, Florida, all at more than 7 percent declines.

“We expect our sales incentives to remain elevated in fiscal 2026, the extent to which will depend on market conditions throughout the year,” he said.

Auld said that the company has expanded its new home construction into seven new states and 38 markets.

 

 

Tyler Durden Mon, 11/17/2025 - 09:00

Loomered: Trump Withdraws Nominee For Top IRS Lawyer

Loomered: Trump Withdraws Nominee For Top IRS Lawyer

President Donald Trump on Friday withdrew the nomination of veteran tax attorney Donald L. Korb to serve as the top lawyer for the Internal Revenue Service (IRS), right as the Senate was preparing to vote on his nomination for assistant general counsel - which provides legal advice and support to departmental officials, including how the government interprets tax codes and defends their positions in US Tax Court.

The Internal Revenue Service (IRS) in Washington on March 10, 2025. Madalina Vasiliu/The Epoch Times

While Trump gave no explanation for the move - writing only on Truth social "Please be advised that I am withdrawing the nomination of Donald Korb to be Assistant General Counsel in the Department of the Treasury," it comes after activist and Trump ally Laura Loomer alleged "major red flags" that disqualify him.

As the Epoch Times notes, days before Trump pulled Korb’s nomination, the veteran tax attorney came under fire by right-wing activist and Trump ally Laura Loomer, who alleged he had “several major red flags that disqualify him from assuming his role under the Trump administration.” In a post on social media, Loomer said Korb had too much past association with Democrats.

After the president withdrew Korb’s nomination, Loomer took credit in a post on X.

Korb did not respond to a request for comment by publication time.

The president has pulled multiple nominees in recent months as he continues to fill critical positions in his second administration.

On Sept. 19, Trump withdrew the nomination of Erik Siebert to serve as U.S. attorney for the Eastern District of Virginia. Siebert had been leading the probe into New York Attorney General Letitia James’s mortgage fraud case, but his office did not find “incriminating evidence” to bring charges, according to a joint statement by Sens. Mark Warner (D-Va.) and Tim Kaine (D-Va.).

The following day, Trump said he had appointed his former attorney, Lindsey Halligan, to serve in the role as U.S. attorney for the Eastern District of Virginia.

The White House announced on Sept. 30 that it had withdrawn economist EJ Antoni’s nomination to lead the Bureau of Labor Statistics.

“Dr. EJ Antoni is a brilliant economist and an American patriot that will continue to do good work on behalf of our great country,” a White House official said. “President Trump is committed to fixing the longstanding failures at the BLS that have undermined the public’s trust in critical economic data.”

Aldgra Fredly and Andrew Moran contributed to this report.

Tyler Durden Sun, 11/16/2025 - 19:15

Japan Summons Chinese Ambassador Over Online Threats Against Prime Minister

Japan Summons Chinese Ambassador Over Online Threats Against Prime Minister

Authored by Dorothy Li via The Epoch Times (emphasis ours),

Japan has demanded action from Beijing over violent threats made by a Chinese envoy against Japanese Prime Minister Sanae Takaichi as the Chinese regime ramps up pressure and threats against Tokyo.

Japan's Prime Minister Sanae Takaichi (C) answers a question during a session of the House of Councillors Budget Committee at the National Diet in Tokyo on Nov. 12, 2025. Kazuhiro NOGI/AFP via Getty Images

Japan’s foreign ministry said on Nov. 14 that it summoned China’s ambassador to lodge strong protests regarding the “highly inappropriate” statements by Consul General Xue Jian of the Chinese Consulate General in Osaka, the largest metropolis in western Japan.

On Nov. 8, Xue shared a local media report about Takaichi’s claim that a Taiwan conflict involving the use of force would likely constitute “a survival-threatening situation” for Japan, a classification that could compel Tokyo to mobilize its military to intervene.

“The dirty neck that sticks itself in must be cut off,” Xue wrote in Japanese in a now-deleted post on X, according to a screenshot shared by U.S. Ambassador to Japan George Glass.

In a subsequent post, the Chinese diplomat said viewing an attack on Taiwan as a threat to Tokyo is “a path of death” that some “stupid politicians in Japan would choose.”

Xue’s comments have triggered a formal protest from Tokyo. Lawmakers from the ruling and opposition parties have urged the government to expel the Chinese diplomat. On Nov. 14, the Osaka city council adopted a resolution demanding a formal apology from the Chinese authorities.

In Beijing, the communist regime has dialed up pressure on Takaichi, demanding a retraction of her Taiwan statement, which they claimed soured bilateral relations.

On Nov. 13, the regime’s vice foreign minister, Sun Weidong, called in the Japanese ambassador in China, voicing Beijing’s “strong dissatisfaction and opposition” to Takaichi’s remarks on Taiwan, the regime’s ministry said on Nov. 14.

The Chinese regime has cautioned Chinese citizens against traveling to Japan. In a notice issued late on Nov. 14, the regime’s foreign ministry and its embassy in Japan claimed that the Japanese leader’s recent remarks on Taiwan “severely damaged” the atmosphere for people-to-people exchanges and posed “significant risks” to the safety and security of its nationals.

Hours later, the three largest airlines in mainland China—Air China, China Southern, and China Eastern—said in separate notices that they will offer full refunds for flights to Japan from Nov. 15 to Dec. 31.

A member of security stands guard at the Japanese embassy in Beijing on Nov. 14, 2025. -/AFP via Getty Images

Takaichi defended her position on Nov. 10, saying that her initial remarks were based on the assumption of a “worst case” scenario.

“It is in line with conventional government views,” she told a parliament committee, adding that she would not retract her statements but would avoid making similar remarks in future sessions.

Japan’s Ministry of Foreign Affairs also rejected Beijing’s interpretation of Takaichi’s words, telling reporters several times this week that its official stance on Taiwan remains unchanged.

Despite the Japanese government’s clarification, China’s state media has unleashed a barrage of editorials and articles this week lambasting the Japanese prime minister for “crossing the line” with Beijing.

The latest commentary by People’s Daily, the Chinese Communist Party’s (CCP) flagship newspaper, published on Nov. 14, accused Takaichi of threatening China with military intentions over the Taiwan issue.

Taiwan

At a press conference on Nov. 14, China’s defense ministry accused Japan of meddling in its internal affairs, saying that if Tokyo tries to use forces to intervene in Taiwan, it would face a “crushing defeat” and “pay a heavy price.”

The CCP has never ruled Taiwan before but  views the self-ruled democracy as part of its territory to be taken by force if necessary. Taiwan rejects such claims, with its president saying that the future of Taiwan can only be decided by its 230 million people.

To pressure Taiwan to accept communist rule, the regime has been flying warplanes near the island on a nearly daily basis and carrying out large-scale military exercises in the Taiwan Strait, heightening international concerns about a potential Chinese invasion.

Japan, with its westernmost island of Yonaguni just 110 km (68 miles) from Taiwan, is anxious that any conflict in the Taiwan Strait could spill over into its own territory. Japan also hosts more than 50,000 American troops along with advanced U.S. military aircraft.

A Japan Coast Guard vessel patrolling the waters off Yonaguni Island, Japan, on Aug. 18, 2022. Philip Fong/ AFP via Getty Images

“The peace and stability of [the] Taiwan Strait is important not only for the security of Japan but for the stability of the global community,” Japanese Foreign Minister Toshimitsu Motegi told a regular press conference via interpreter on Nov. 14.

“We truly hope that the issues regarding Taiwan will be peacefully resolved through dialogue,” he said. “And this has been the consistent and unchanging position of the government of Japan.”

On Nov. 15, the Chinese regime’s Maritime Safety Administration said a three-day live-fire drill would be held in parts of the central Yellow Sea, starting from Nov. 17.

Pointing to Beijing’s military exercises and travel bans against Japan, Taiwan’s president’s office on Nov. 15 expressed concerns about regional stability.

“The Chinese authorities’ politically motivated, multifaceted threats against Japan pose a grave danger to security and stability in the Indo-Pacific,” said Karen Kuo, spokesperson for the Presidential Office, according to Taiwan’s official Central News Agency.

Taiwan called on the CCP to cease such “inappropriate unilateral actions immediately” and refrain from becoming a “troublemaker in the international community,” Kuo said.

Tyler Durden Sun, 11/16/2025 - 18:40

Corporate Bankruptcies On Pace For 15-Year High As More "Isolated Incidents" To Occur 

Corporate Bankruptcies On Pace For 15-Year High As More "Isolated Incidents" To Occur 

First came the spectacular implosions of subprime auto lender Tricolor and auto-parts supplier First Brands. Then came the regional-bank fiasco, prompting JPMorgan CEO Jamie Dimon to warn that more late-cycle accidents may be ahead. Add in signs that lower-income consumers are tapped out, frothy valuations across the AI equity sphere, and even Bitcoin sliding below $100,000, and it's no surprise that many are beginning to wonder whether mounting financial stress signals the early stages of a broader downturn.

Another flashing red warning sign is new data from S&P Global this past week, showing that through October, 655 companies have filed for bankruptcy, nearly matching the 687 total for all of 2024.

S&P Global data showed that in October alone, there were 68 new corporate bankruptcies filings. In August, there were 76 filings, the highest monthly tally since at least 2020.

Industrials lead the charge with 98 filings, reflecting the group's vulnerability to snarled supply chains related to tariffs. Then, consumer discretionary firms followed with 80 bankruptcies so far this year. 

At current pace, corporate bankruptcies could reach a 15-year high by year's end. 

The Tricolor and First Brands implosions earlier this fall were certaintly a wake-up call. Regional bank woes and now lower- and middle-income consumers are exhausted, all combined, suggesting softening of the economy in the late year. The record 43-day government shutdown certainly compounded problems. 

"I view those few incidents as idiosyncratic but expect more of these 'isolated incidents' to occur, potentially in other sectors like software, which has increased leverage in that market while capital flows to AI capex," Clayton Triick, head of portfolio management of public strategies at Angel Oak Capital Advisors, told S&P Global Market Intelligence. 

Here are the notable bankruptcies this year. 

In mid-October, JPM CEO Jamie Dimon sparked some controversy in banking and finance circles with this comment: "My antenna goes up when things like that happen. I probably shouldn't say this, but when you see one cockroach, there are probably more."

UBS analysts, led by Jonathan Pingle, told clients days ago, "Our base case is that an equity market drawdown is avoided. Households suffer for the next two quarters."

However, Pingle noted that a $55 billion boost to disposable income in 2Q 2026 from retroactive tax relief in the One Big Beautiful Bill Act (OBBBA) will lift consumer sentiment in the early spring. Plus, all the infrastructure buildouts, reshoring, data center construction, and the list goes on and on, will likely begin to filter into the real economy early next year - all in time for midterms. 

So from now until economic tailwinds emerge, the Trump administration has launched Operation Affordability, focusing on lowering prices to lift low-income consumers and improve sentiment ahead of the midterms.

Tyler Durden Sun, 11/16/2025 - 18:05

After Tucker Carlson Exposé, FBI Director Patel Says Trump Rally Shooter Thomas Crooks Acted Alone

After Tucker Carlson Exposé, FBI Director Patel Says Trump Rally Shooter Thomas Crooks Acted Alone

The same day that Tucker Carlson told America more than the FBI has about Donald Trump's attempted assassin, Thomas Crooks, FBI Director Kash Patel announced that Crooks 'acted alone' in planning and conducting the attack. 

FBI director Kash Patel (L) and White House press secretary Karoline Leavitt (R) speak during a press briefing at the White House in Washington on Nov. 12, 2025. Madalina Kilroy/The Epoch Times

Patel posted to X on Friday: 

"Over 480 FBI employees were involved in the Thomas Crooks investigation. Employees conducted over 1,000 interviews, addressed over 2,000 public tips, analyzed data extracted from 13 seized digital devices, reviewed nearly 500,000 digital files, collected, processed, and synchronized hundreds of hours of video footage, analyzed financial activity from 10 different accounts, and examined data associated with 25 social media or online forum accounts.

The FBI’s investigation into Thomas Crooks identified and examined over 20 online accounts, data extracted from over a dozen electronic devices, examination of numerous financial accounts, and over 1,000 interviews and 2000 public tips."

While Patel was seemingly responding to Tucker's claim that the government originally said Crooks had virtually no online footprint, that's not the point. If all of what Patel says is true, why don't we know any of it? Why did it take an anonymous tip to Tucker Carlson to provide the public with Crooks' public shift from Trump supporter to Trump hater to failed assassin? The public has an interest in this and a right to know.

In late September, Carlson's team received an anonymous tip from someone who said they had gained access to some of Crooks' online accounts, which he found using 'tools commonly used by private investigators' after obtaining Crooks' phone number and gmail address from public documents. He then traced that to two encrypted foreign email accounts (bcook[at]mailfence.com and americangamer[at]gmx.com). He also had a snapchat account, a Venmo, Zelle and PayPal account among several others. 

"It turns out that Crooks was hardly an online ghost," Carlson reports. "And yet, federal investigators lied and told us there was no trace of him online."

The source was able to obtain all materials from Crooks' deactivated YouTube account - which includes his search history, watch history, and 737 public comments. 

When Carlson's team asked the FBI why they hadn't shared this information with the public, the agency replied by asking if they could verify the authenticity of the shooter's account. 

As the Epoch Times notes further, in the July 13, 2024, attack in Butler, Pennsylvania, Crooks fired eight shots from a rooftop, grazing Trump’s ear, killing one attendee, and wounding two others before being fatally shot by Secret Service agents. Patel’s statement aligns with earlier FBI briefings, but also provides new details on the investigation’s depth.

Little is known about Crooks, who lived in Bethel Park and was a registered Republican who donated $15 to a progressive group in 2021. Neighbors said they were shocked to learn that he was behind the assassination attempt, describing him as quiet and unassuming.

FBI officials previously revealed that Crooks searched more than 60 topics related to Trump and President Joe Biden in the month before the attack, especially as they related to rally details and explosive devices. His digital activity included encrypted overseas accounts, prompting suspicions of foreign involvement, but Patel’s social media post dismissed these concerns.

The deceased victim, Corey Comperatore, died shielding his family from gunfire, while Marine veteran David Dutch, 54, survived after being shot in the chest and liver. Another man, James Copenhaver, sustained life-altering injuries. David Dutch, 54, was also injured.

Patel’s post is the first major update on the case since he assumed leadership of the FBI, and some lawmakers and critics are demanding more information, including access to Crooks’s online posts.

In the weeks after the assassination attempt, congressional hearings criticized Secret Service protocols, resulting in the resignation of its director. A bipartisan task force is currently investigating systemic failures.

A watchdog group is suing the Secret Service and Department of Homeland Security for records regarding security lapses that allowed Crooks to climb onto the rooftop with a rifle after being seen by rallygoers and police.

Tyler Durden Sun, 11/16/2025 - 17:35

US Debt Rose By $620 Billion During The Government Shutdown

US Debt Rose By $620 Billion During The Government Shutdown

By Eric Peters, CIO of One River Asset Management

“This package demonstrates that we can govern without surrendering to big spending or letting Democrats dictate priorities,” wrote the House Freedom Caucus in some talking points released to the media.

“We successfully stiff-armed a massive omnibus spending bill; locked in disciplined, flat spending levels; preserved President Trump’s policy priorities… and kept our leverage for the next round in January.”

People can say whatever they want, but I’m pretty sure our politicians closed the US government for a record 42 days and changed absolutely nothing. That’s quite an accomplishment. Sublime ineptitude. Congressional approval ratings supposedly declined 11pts to 15% during the period. Remarkable.

If a trader knew that 85% of his decisions were losers, he’d become the richest man on earth by simply doing the exact opposite of his instinct. I’m guessing Pelosi made good money trading the chop, but the broad equity market ended the shutdown period roughly a percent higher than where it started.

Extrapolating the recent pace of deficit spending, the Federal government accumulated another $600bln of debt during the shutdown, adding more leverage to the system, sustaining the economy, supporting asset values.

But even so, 10yr treasury yields are unchanged from where they were before the shutdown.

Crypto prices got smoked, with bitcoin down roughly 16% for no particularly good reason, even as gold rose 5%.

Liquidity trades often need momentum to sustain them, and the hot money has been chasing AI and gold.

Beijing added roughly 62 gigawatts of electrical generation capacity to China’s grid while Washington remained closed. That’s roughly the generation capacity of the entire UK, once the world’s greatest power.

80% of China’s new generation capacity is renewables, which means that once its built, it requires no coal, gas, or oil imports to power data centers. That’s quite a competitive advantage in this existential race toward AGI.

But at least we have our democracy, which we’ve been told is the worst system except for all the others.

Tyler Durden Sun, 11/16/2025 - 16:55

US Installed Nearly 26 GW Of New Generating Capacity From January To August

US Installed Nearly 26 GW Of New Generating Capacity From January To August

By Meris Lutz of UtilityDive

Summary

  • The U.S. installed nearly 26 GW of new generation capacity between January and August 2025, up slightly from the approximately 23 GW installed over the same period last year, according to the most recent monthly infrastructure report from the Federal Energy Regulatory Commission.

  • As it has for most of the past two years, solar continued to dominate new generation resources, accounting for 2.7 GW out of 4 GW brought online in August alone, and 19 GW — about three-quarters — of generation capacity additions this year. 

  • The report also says FERC reissued a certificate for Williams Companies to construct and operate its Northeast Supply Enhancement Project. That expansion of the Transco gas pipeline from New Jersey to New York was revived following talks between President Donald Trump and Gov. Kathy Hochul in May after the Trump administration briefly froze the Empire Wind project. The White House and the developer of the wind project have told journalists the two sides reached a gas-for-wind deal, while Hochul has denied striking such a bargain.

Solar dominated capacity additions, according to FERC’s monthly report, while a controversial gas pipeline project from New Jersey to New York got a green light.

The report shows momentum for renewables continuing, despite the federal government’s emphasis on fossil fuels and nuclear. FERC lists 136 GW of “high probability additions” through August 2028, with renewables, led by solar and followed by wind, accounting for nearly 84%. Natural gas accounts for about 15% of high probability additions.

“Notwithstanding impediments created by the Trump Administration and the Republican-controlled Congress, solar and wind continue to add more generating capacity than fossil fuels and nuclear power,” the Sun Day Campaign’s executive director Ken Bossong said in a statement. “And FERC foresees renewable energy’s role expanding in the next three years while the shares provided by coal, oil, natural gas, and nuclear all contract.”

Large renewable projects that began operating in August include Hecate Energy’s 517-MW Outpost solar and storage project in Webb County, Texas; Gibson Solar’s 280-MW project in Gibson County, Indiana; and expansions at the Roadrunner Crossing Wind Farm in Eastland County, Texas, totaling 254 MW. 

While solar and wind made up most of the new generation added in August, a number of smaller gas generators also came online that month, totaling 888 MW. They include: Southern Indiana Gas & Electric Co’s 248-MW A.B. Brown expansion project in Posey County, Indiana; Basin Electric Power Coop’s 245-MW Pioneer Generation Station expansion in Williams County, North Dakota; and Lower Colorado River Authority’s 188-MW Maxwell Peaker Plant in Caldwell County, Texas.

Tyler Durden Sun, 11/16/2025 - 16:20

ICE & Border Patrol Begin Sweeping Deportation Raids On Criminal Illegals In Charlotte

ICE & Border Patrol Begin Sweeping Deportation Raids On Criminal Illegals In Charlotte

Federal officers from Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection (CBP) carried out large-scale raids across Charlotte on Saturday as part of President Trump's push to deport criminal illegal aliens. 

Charlotte Mayor Vi Lyles, Mecklenburg County Board Chair Mark Jerrell, and Charlotte-Mecklenburg school board member Stephanie Sneed wrote in a statement that they will "protect the rights of all people who call Charlotte and Mecklenburg County home." 

What they really mean is to protect illegal aliens at all costs. Why? Because illegals are politically valuable, both as a future voting bloc and as a demographic booster for the next Census, which directly benefits the Democratic Party, now taken over by far-left DSA-ers. 

“Americans should be able to live without fear of violent criminal illegal aliens hurting them, their families, or their neighbors,” Assistant Homeland Security Secretary Tricia McLaughlin said in a press statement on Saturday.

“We are surging DHS law enforcement to Charlotte to ensure Americans are safe and public safety threats are removed.”

City and county officials have criticized the enhanced federal immigration enforcement operations.

“The expected ... operations are causing unnecessary fear and uncertainty in our community as recent operations in other cities have resulted in people without criminal records being detained and violent protests being the result of unwarranted actions,” read a Saturday statement prepared by Charlotte Mayor Vi Lyles, Mecklenburg Board of County Commissioners Chair Mark Jerrell, and Charlotte-Mecklenberg Education Board Chair Stephanie Sneed.

Lyles, Jerrell, and Sneed went on to state that the Charlotte-Mecklenburg Police Department doesn’t assist with federal immigration enforcement operations.

Lastly, the city and county officials called on those considering protesting to remain peaceful.

“We do not want to see violence like many witnessed in other cities. We can stand up for what we believe in without resorting to violence,” the statement reads.

Let's not forget unhinged Mayor Vi Lyles faced backlash after calling for "compassion" toward the violent madman accused of slaughtering Ukrainian refugee Iryna Zarutska on the city's light rail.

Deadly stabbing on NC train Aug. 22, 2025 (WCNC:Charlotte Area Transit System per CNN Newsource)

Meanwhile...

Fun facts about the area: Approximately 58,000 illegals are living in Mecklenburg County, and an estimated 325,000 in North Carolina (data found here). 

X user Cynical Publius has three suggestions for the White House that would end the nation-killing rule Democrats and their globalist allies have imposed, a sinister rule marked not only by an open-border invasion of tens of millions of illegals designed to disenfranchise native-born voters, but also by an invisible insurrection carried out through color-revolution-style operations against Trump and 'America First' via a dark web of nonprofits... 

The Democrat Party as we know it today would cease to exist if the following three measures were implemented:

  1. Nationwide voter ID with in-person, same-day voting except for true absentee situations.

  2. End tax exempt status for ALL 501(c)(X)s (even religious, because if we leave that they will abuse it).

  3. Continue Trump's enforcement of existing immigration laws until we have rolled back all damage done over the last ten years.

Related:

The illegal-alien invasion facilitated by Democrats and their globalist allies shows no respect for borders or the rule of law. And without the rule of law, there is no country. All indications now point to a rise in deportations.

Tyler Durden Sun, 11/16/2025 - 15:45

Record Numbers Of Young Women Want To Leave The US

Record Numbers Of Young Women Want To Leave The US

By Benedict Vigers of Gallup,

For the second straight year, about one in five Americans say they would like to leave the U.S. and move permanently to another country if they could. This heightened desire to migrate is driven primarily by younger women.

In 2025, 40% of women aged 15 to 44 say they would move abroad permanently if they had the opportunity. The current figure is four times higher than the 10% who shared this desire in 2014, when it was generally in line with other age and gender groups.

The percentage of younger women wanting to move to another country first rose decisively in 2016, the final year of President Barack Obama's second term. That year, Gallup surveyed the U.S. in June and July, after both parties’ presumptive nominees were set for the November election, which Donald Trump went on to win. Desire to migrate continued to climb afterward, hitting 44% in President Joe Biden’s last year in office and remaining near that level in 2025. This suggests a broader shift in opinion among younger women, rather than a solely partisan one.

The sharp rise in younger women wanting to leave the U.S. has created a large gender gap between them and their male counterparts. Today’s 21-percentage-point gap between younger men (19%) and women (40%) wanting to leave the U.S. is the widest Gallup has recorded on this trend.

Since Gallup began measuring this question globally in 2007, few countries have shown gender gaps this wide in the desire to migrate. Before the U.S. in 2025, no country had recorded a gap of 20 points or more between younger men and women.

Gallup’s question asks about desire to migrate, so these findings reflect aspirations rather than intentions. Previous Gallup research shows not everyone who wants to move will move. Still, the data indicate that millions of younger American women are increasingly imagining their futures elsewhere.

While the desire to move for good is currently elevated among U.S. men as well as women under age 45, it remains relatively flat at low levels among their counterparts aged 45 and older.

What has not changed is where these younger women would like to go. Canada remains the top preferred destination for younger American women looking to leave, with 11% of those in the years since 2022 mentioning Canada as their top destination, ahead of New Zealand, Italy and Japan (all 5%).

Young Women in Other Advanced Economies Don’t Share the Desire to Move

The growing trend in younger women in the U.S. looking to leave their country is not evident in other advanced economies. Across 38 member countries of the Organisation for Economic Co-operation and Development (OECD), the percentage of younger women who say they would like to migrate has held relatively steady for years, typically averaging between 20% and 30%.

For much of the late 2000s and early 2010s, younger U.S. women were less likely than their peers abroad to want to move. That changed around 2016. Since then, they have been more likely than younger women in other wealthy countries to say they would leave their homeland for good. By contrast, U.S. men aged 15 to 44 continue to be less likely than average to want to migrate compared with their peers in the OECD.

Politics Plays a Role Alongside Age and Gender

Rising interest in leaving the U.S. is shaped not only by age and gender but also by political attitudes. In 2025, there is a 25-point gap in the desire to migrate between Americans who approve and those who disapprove of the country’s leadership.

Desire to permanently leave the U.S. was not always such a politicized issue. Between 2008 and 2016, migration aspirations were similar regardless of views toward the country’s leadership. After Trump’s election, 2017 marked the first time this gap exceeded 10 points. During Trump’s first term, the difference in migration aspirations between those approving and disapproving of national leadership averaged 14 points. Under Biden, the gap narrowed to eight points, before climbing to 25 points in 2025, the first year of Trump’s second term in office.

Younger women’s much stronger orientation to the Democratic Party than other age and gender groups exhibit helps explain some of the differences in desire to move abroad. So far in 2025, 59% of women aged 18 to 44 identify as or lean Democratic, compared with 39% of younger men, 53% of older women and 37% of older men.

Desire to Migrate Rises Among Single and Married Women Alike

The people most likely to express a desire to migrate are typically those who have greater mobility, such as the unmarried, those without children at home and younger adults. However, among American women aged 18 to 44, the desire to migrate has risen regardless of marital status.

Between 2024 and 2025, at least two in five younger women — 41% of those who are married and 45% of those who are single — said they would like to move abroad permanently if given the chance. This is the narrowest gap by marital status among younger women in desire to move that Gallup has recorded since first asking the question, suggesting that younger married women increasingly do not view marriage as a barrier to migration.

The same pattern is true for having young children at home. Among younger women with children living at home, 40% say they would like to leave the U.S. for good, on par with the percentage among those without children (44%). Were these women to follow through on their desire to migrate, it is likely that they would take the next generation with them.

Younger Women Lose Faith in America’s Institutions

Across demographic groups, Americans with lower confidence in institutions such as the government, judicial system, military and integrity of elections are consistently more likely to express a desire to leave the country.

Over the past decade, younger women have not only shown the largest increase in wanting to move abroad but also have experienced the steepest drop in institutional confidence of any age or gender group.

In 2015, women aged 15 to 44 scored an average of 57 on Gallup’s National Institutions Index, which measures confidence in the national government, military, judiciary and honesty of elections.

Since then, younger women’s scores have fallen by 17 points — a sharper decline than seen for any other demographic — and dropped during both the Trump and Biden administrations. By comparison, women aged 45 and older and men aged 15 to 44 have remained broadly stable in their confidence in institutions, while the score among men aged 45 and older has increased by 15 points.

The Supreme Court’s 2022 Dobbs v. Jackson Women’s Health Organization decision, which overturned the constitutional right to abortion, may have contributed to the drop in younger women’s National Institutions Index score — particularly the steep decline in their confidence in the judicial system, which fell from 55% in 2015 to 32% in 2025, more than any other age group. However, when it comes to desire to migrate, the Dobbs decision alone may have played a more limited role, given that the trend in wanting to leave began years before the ruling.

Bottom Line

More Americans than at any time in the past two decades say they would like to move away from the U.S. permanently, with the sentiment becoming increasingly politicized since 2017. Younger American women’s desire to leave the U.S. has surged to unprecedented levels in recent years, widening the gender divide to more than 20 points, the widest recorded for any country in the World Poll.

Unlike their peers in other advanced economies, younger American women now stand apart from the rest of the U.S. in several respects. They increasingly lack faith in national institutions and picture their futures beyond America’s borders.

Tyler Durden Sun, 11/16/2025 - 15:10

Rotation, pAIn, Or Smooth Sailing?

Rotation, pAIn, Or Smooth Sailing?

Submitted by Peter Tchir of Academy Securities

pAIn Ahead?

Last weekend we published pAIn Ahead? which had two major problems:

  1. It is a bad idea to start a title with a small letter, as our publishing system is designed to force Capital Letters in titles, including the first word of the report.

  2. It is more than a little embarrassing to have a title “pAIn Ahead” out there as stocks opened strong and went higher throughout the next few days with the Nasdaq 100 closing up 790 points!

But, on the week, the index fell slightly, making last weekend’s report far less misplaced than where it started the week. If we hadn’t had a major “buy the dip” moment on Friday at its lows, the Nasdaq could have closed down 2% on the week.

Since we had a small loss on the week, a 4.4% pullback from its high on Monday to its low on Friday, it makes sense to revisit the points we made when expressing concern about the potential for an AI- driven pullback.

  • Bitcoin. Whether it is leading the market or just going along with the “momentum” stocks, crypto had a tough week, with Bitcoin dropping from $104k last Friday to $94k this Friday. It is rebounding a bit this weekend, and is worth watching as virtually every regulatory and administration headline remains positive, but it cannot seem to rally significantly. I think it is safe to say that everyone keeps an eye on Bitcoin as a barometer for risk assets, especially on weekends, when markets are closed, but the news flow doesn’t stop.

  • Retail Dip Buying. I remain suspicious that the longs are held by “pros” at this stage as I’ve seen evidence of profit taking by retail. Having said that, the “retail” favorite names and ETFs had a very volatile week (even more so than the market as a whole) and we did see some inflows into some of the most “beat up” names. Maybe it was retail that led the surge, but it could have also been pro traders getting “cute” and trying to anticipate positive weekend news (the admin has been quick to provide positive headlines, especially over the weekend and on Monday morning, when stocks stumble). We will see what happens, but I think the almost 1% late-day fade off of the highs is telling. Of late, dip buying isn’t always providing instant gratification.

  • Volatility. VIX inched higher on the week, while realized stock market volatility rose rather aggressively. The MOVE Index (a measure of bond market volatility) rose more rapidly than the VIX. Higher overall volatility can force some “risk parity” strategies to de-risk. Any shift in correlations between major asset classes can cause them to reduce as well. This could be happening already, but I doubt it has been meaningful. Another week like the past week (especially if the net result is more to the downside) could cause real de-risking.

  • Sentiment and Inflation. The admin is dialing back tariffs on many agricultural goods. Coffee is high on my list. I’m having difficulty wrapping my head around the fact that the admin is signaling that they are championing lower prices by eliminating these tariffs.

    • Hmmmm…this admin put the tariffs in place, so not sure how much credit they deserve for removing them. I think it is good that they are changing policy, but it always seemed weird to tariff things that we don’t grow or produce domestically (and have climate limitations to doing so).

    • Hmmmm…is this a low-key acknowledgement that on some goods, where there is no obvious replacement, tariffs get paid for by the consumer? This has been pretty clear since day 1, so it is good that it is being acknowledged, if only tacitly, but how many other tariffs are finding their way to the consumer? We suspect that number is still small, but growing over time.

  • There is a lot of rhetoric about affordability, and that is only increasing as both sides dig in to fight over costs and who is responsible.

  • Bonds and the Fed. The probability of a Fed cut has moved from over 60% to “only” 43% according to Bloomberg’s WIRP function. Now that the probability has dropped below 50% the Fed may lean towards not cutting, since the market isn’t “forcing” their hand. Yes, the Fed will make its own deliberations, but it does pay attention to the market. A lot could still happen between now and the December 10th meeting, but this is yet another indicator of dialing back cuts until the new year. I’m told much of the recent selling was triggered by the concern that the Fed could be less aggressive. I could see that being a part of the whole discussion, but we are susceptible in so many ways that it didn’t take much to shake our belief in the biggest momentum trades of the year. The “old” 10- year (August 2035 maturity) rose from 4.10% to close out the week at 4.14%, though it briefly got to 4.05% on Friday morning (around the timing of OPEX). I continue to expect more downside for Treasuries with the 10-year yield to approach 4.3%. That will weigh on stocks if it turns out to be correct.

Rotation

There is certainly a rotation trade and I think it will continue to work.

For this trade, I like the S&P 500 equal weight versus the Nasdaq 100. In the past year, QQQ (a Nasdaq 100 ETF), is up about 20% while RSP (a S&P 500 equal weight ETF) is up only 4.5%. There is room for significant outperformance on this relative value trade.

Bottom Line

Sticking to our ProSec (Production for Security) themes. See any of our recent reports at Academy Macro. Look for the “rotation” to continue.

Also, I think the pain continues. The Nasdaq 100 is down on the month and the issues facing it (discussed above and detailed last weekend), have not been resolved. If anything, the big move on Monday and then the fierce dip buying on Friday may well have left a lot of short-term “trading” longs exposed to a further pullback.

I don’t like Treasuries (targeting at least 4.25% on 10s).

We continue to think credit spreads will remain under a bit of pressure. Nothing major, but the combination of:

  • Some private credit “fiascos” (not sure what else you can call something that seemed to go from par to default almost overnight). Again, I don’t think there are a lot of “cockroaches” out there, but it is weighing on the market – and I believe this is making it more difficult for small companies to access credit – which is a real-world problem.

  • Increasing “concern” about how much debt needs to be raised to build out data centers, AI, and the electricity generation capacity to power those data centers. Not alarming and will play out over time, but this will weigh on credit spreads.

  • The low income consumer. Increasing concerns about delinquencies and the fact that the number of households having delinquencies may be set to rise.

It was a very memorable Veterans Day week here at Academy, and now we set our sights on Thanksgiving with friends and family! In the meantime:

  • Rotation? Yes.

  • pAIn Ahead? Likely

  • Smooth Sailing? Unlikely

This is a “normal” or even “run of the mill” adjustment to valuations, current conditions, and various outlooks. Certainly not alarming, but not yet time to fully reload into the momentum names.

Tyler Durden Sun, 11/16/2025 - 14:00

Virginia Neighborhood Shocked By Massive Home Addition Built For Three-Generation Family

Virginia Neighborhood Shocked By Massive Home Addition Built For Three-Generation Family

Multigenerational living has surged to a record high, with 17% of 2024 buyers purchasing homes designed for multiple generations, according to the National Association of Realtors. 

Families are increasingly combining households to cope with elevated living costs, caregiving demands, and even the need to reconnect as a family unit. This trend is being fueled by a housing market that remains frozen for many first-time buyers - caught between high mortgage rates and record high prices - pushing more families to pool resources and live under one roof.

The multigenerational home trend is being fueled by a "Silver Tsunami" of Baby Boomers entering their 70s and 80s. As this cohort ages, millions will downsize, retire, move into multigenerational homes, require caregiving, or transition to assisted-living or aging-in-place arrangements.

Evidence of this trend recently surfaced in a quiet northern Virginia neighborhood, where a newly built home addition has sparked outrage, according to FOX 5's Bob Barnard.

Another view.

Barnard said a three-story addition to a single-story home is set to house three generations of one family. He noted that the builders met all zoning requirements, but the neighborhood is outraged because the addition resembles a small multifamily apartment building.

Given that the Silver Tsunami is underway and much of the real estate industry isn't prepared, additions like the one seen in the northern Virginia neighborhood will continue to startle communities.

Tyler Durden Sun, 11/16/2025 - 13:25

The Debt-Reduction Playbook: Can Today's Governments Learn From The Past?

The Debt-Reduction Playbook: Can Today's Governments Learn From The Past?

Authored by Joe Sullivan-Bissett via BondVigiliantes.com,

Government debt levels continue to linger in uncomfortable territory across developed markets, with fiscal deficits stubbornly high despite reasonably resilient growth and employment – especially when compared to past norms. This is not a post-crisis or post-war moment, yet debt levels resemble those of an economy fighting its way out of recession.

Runaway levels of debt, and the question of how they can be contained, could well be the defining macro story of the next decade. This not only has implications for public finances, but also the trajectory of yields, inflation, and the credibility of future policy.

High debt is not new, with history being full of examples of governments facing daunting fiscal positions, and each era has found its own way out: sometimes through discipline, sometimes through inflation, and sometimes through quiet financial engineering. Earlier this year, Rob Burrows explored options for dealing with debt in this blog.

Following on from that, below I explore if there are any useful lessons in history which could provide a solution for today’s backdrop.

Financial repression: The silent partner in debt reduction

After World War II, both the US and the UK emerged with debt-to-GDP ratios well above 100%, with the latter at 250%. Yet over the following decades, those burdens shrank dramatically, and without large fiscal surpluses or deep austerity. The solution was financial repression.

Governments and central banks effectively capped interest rates while letting inflation run high. With capital controls in place and a banking system that was required to hold government paper, real interest rates stayed negative for years. Investors earned less than inflation, and debt quietly melted away in real terms.

Source: Bank of England’s Eight centuries of global real interest rates, R-G, and the ‘suprasecular’ decline, 1311–2018

By the mid-1970s, the UK’s debt ratio fell to roughly 50% of GDP. Much of that adjustment came not from paying debt down, but from the erosion of its real value.

Could it work today? Not easily. Financial repression relies on closed capital systems and willing domestic savers, both of which are in short supply today. In open markets with moveable capital, measures such as yield caps or mandated sovereign debt holding would likely require complex regulatory interventions or indirect support from central banks. Such policies would be difficult in a globalised, market-oriented system.

Growth as the denominator: Britain after the Napoleonic Wars

After the Napoleonic Wars, Britain’s public debt exceeded 200% of GDP. Over the next half-century, it fell steadily, not through inflation (the gold standard ruled that out) but through real growth and persistent, if modest, budget surpluses.

The Industrial Revolution transformed output and tax revenues, while the state held spending flat. The result was a slow but powerful denominator effect: GDP grew faster than the debt stock, even as prices remained stable or fell.

Source: https://ourworldindata.org/

* Definition of ‘International $’ on which this data set is based, can be found here:https://ourworldindata.org/international-dollars

Could governments grow themselves out of debt again? That depends on whether today’s economy can find an equivalent productivity revolution. Demographics, slower innovation diffusion, and lower investment all weigh against it. Unless of course, AI proves to be the answer…

Inflation: The blunt instrument

Inflation has historically been one of the fastest ways to reduce debt. Weimar Germany in the 1920s and Japan in the immediate post-war years both saw real debts wiped away by surging prices. Even moderate inflation, sustained over time, can do significant work: in the 1970s, UK debt ratios fell sharply again as inflation outpaced borrowing costs.

Could governments inflate their way out today? Using inflation to reduce debt today is less straightforward, given that central banks are independent and focused on keeping inflation close to 2%. The recent post-pandemic inflation spike showed how higher inflation can create economic and social pressures, and how institutions respond to keep it in check. If inflation stays above target for too long, it could affect the credibility of monetary policy. Still, a period of slightly higher inflation alongside nominal growth might be seen as a practical path if political constraints make fiscal tightening difficult.

So are there any useful lessons from history?

Perhaps not. Each historical escape route looks less accessible today:

  • Lowering debt through austerity is politically challenging, especially in societies already weary from years of spending restraint and rising inequality

  • Inflation is broadly constrained through central bank objectives

  • Growth remains elusive, unless technology delivers a genuine productivity revolution

  • Financial repression, while possible in partial form, risks distorting markets and undermining investor confidence.

That leaves a muddle-through scenario: persistent deficits, modestly higher inflation tolerance, and debt ratios that stabilise rather than fall. Markets may increasingly price this as the new normal: A world of structurally higher term premia and periodic fiscal scares.

History suggests that when governments can’t grow, tax, or inflate their way out, they simply wait it out: relying on time, moderate nominal growth, and the slow erosion of debt through steady, incremental policy.

It’s not a dramatic ending to this episode, but it may be the most realistic one.

Tyler Durden Sun, 11/16/2025 - 12:50

US 'In Trouble' - Ford CEO Can't Find 5,000 Mechanics For $120k Jobs

US 'In Trouble' - Ford CEO Can't Find 5,000 Mechanics For $120k Jobs

Ford Motor Company CEO Jim Farley has sounded an alarm about the state of the US job market, saying Ford has been unable to fill 5,000 mechanic jobs paying $120,000 a year. Those $120,000 salaries are nearly double the US average. 

“We are in trouble in our country. We are not talking about this enough,” said Farley in an appearance last week on the Office Hours: Business Edition podcast. He said the shortage of qualified manual laborers isn't confined to Ford, but is something businesses across the nation are struggling with. 

“We have over a million openings in critical jobs, emergency services, trucking, factory workers, plumbers, electricians and tradesmen. It's a very serious thing. We do not have trade schools. We are not investing in educating a next generation of people like my grandfather who had nothing, who built a middle class life and a future for his family.

Those jobs are out there. Mechanics in a Ford dealership -- as of this morning, we had 5,000 openings. A bay with a lift and tools and no one working in it. $120,000-a-year job, but it takes you five years to learn it. To take a diesel out of a Super Duty, it takes a lot of skill. You need to know what you're doing." 

"We are in trouble in our country," said Ford CEO Jim Farley in his appearance on Office Hours: Business Edition. 

Rich Garrity, a National Association of Manufacturers board member, expanded on Farley's lament about the country's deficit in training programs, telling the New York Post:  

“We’re not just missing bodies, but we’re really missing ... skill sets that can connect to 21st-century manufacturing needs. The community colleges, the career tech programs do a solid job in providing foundational training, but we often see that they’re out of date when it comes to keeping up with how fast things are moving from a technology standpoint." 

Social media is awash in testimonials from young college grads bemoaning their inability to find jobs. Meanwhile, in August, BLS reported that America had over 400,000 available manufacturing jobs. There's an obvious disconnect, but, on a bright note, the long-running over-emphasis on college education may finally be waning. Trade school enrollment soared 16% in 2024, while college enrollment growth has been negligible in recent years.  

“For many years in the US, it was, you go to a four-year college and things are set up for you,” Farley said. "And the reality is, that path is not necessarily what it used to be. A more valuable path, in many cases, is getting a technical college or apprenticeship and starting to learn certain skills very early on.”

Tyler Durden Sun, 11/16/2025 - 12:15

Pages