Zero Hedge

ASPI Jumps After Clearing Hurdle To Acquire Renergen

ASPI Jumps After Clearing Hurdle To Acquire Renergen

ASPI, which we have discussed extensively both here in our premium section, has finally received all required approvals for the acquisition of South African LNG and helium production company, Renergen.

Temporary - and recurring - delays in obtaining regulatory approval for the acquisition in South Africa were starting to create doubts that the transaction would never close. But the latest announcement from ASPI has cleared the way for the transaction to be consummated after final approvals are received later this month.

The news sparked a significant jump in the stock price on a day when most other small cap, high beta stocks are again getting crushed by another day of the Oracle-inspired pukefest.

Renergen operates the Virginia Gas Project in South Africa, which has received significant funding in the hundreds of millions of dollars from the US government through the US International Development Finance Corporation (DFC). The project is producing LNG and helium, both high demand and high revenue products set to complement ASPI’s isotope production portfolio.

The merger creates a vertically integrated global leader in critical/strategically important materials. ASPI’s proprietary Aerodynamic Separation Process for enriching isotopes used in healthcare, quantum computing, and semiconductors, pairs synergistically with Renergen’s Virginia Gas Project, one of the world’s richest helium sources.

Helium, essential for MRI machines, semiconductors, and space applications, serves as a key carrier gas in ASPI’s enrichment, enabling cost reductions through captive supply amid global shortages.

ASPI also is planning to spin off subsidiary Quantum Leap Energy (QLE) in the coming months. QLE is focused on enriching lithium and uranium with laser enrichment technology, as well as acquiring critical mineral and rare earth element companies in coordination with other investors, including Eric Trump and Donald Trump Jr.

Tyler Durden Wed, 12/17/2025 - 11:25

Warner Bros. Board Urges Shareholders To Reject Paramount Hostile Takeover Bid

Warner Bros. Board Urges Shareholders To Reject Paramount Hostile Takeover Bid

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

Warner Bros. Discovery’s board of directors said on Dec. 17 that it is advising shareholders to reject Paramount Skydance’s hostile takeover bid and support Netflix’s offer.

Netflix and Warner Bros Discovery logos are seen in this illustration created on Dec. 5, 2025. Dado Ruvic/Reuters

Last week, Paramount put forward an all-cash $30‑per‑share bid valuing Warner Bros. at $108.4 billion, matching the offer it made a week earlier. CEO David Ellison argued that the proposal is superior to Netflix’s and said a Paramount–Warner Bros. merger would have better odds of clearing regulatory review.

But Samuel Di Piazza Jr., chair of the Warner Bros. Discovery board of directors, says Paramount has never presented a proposition that is superior to the Netflix offer, adding that the current offer is “inadequate, with significant risks and costs imposed on our shareholders.”

“This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals,” Di Piazza said in a news release.

“We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”

The board added that Paramount’s offer leans on more than $40 billion in non‑Ellison financing, contrary to the studio’s assurances of a “full backstop” from the family.

“Despite their own ample resources, as well as multiple assurances by PSKY [Paramount Skydance] during our strategic review process that such a commitment was forthcoming – the Ellison family has chosen not to backstop the PSKY offer,” the board told shareholders.

Shortly after the board’s remarks, Paramount affirmed its commitment to buying the company, accusing the company of misleading “its shareholders into believing this is a complicated question about legal documents.”

“WBD’s [Warner Bros. Discovery’s] own narrative of the actions that led to its inferior transaction with Netflix reveals a process which was not run to secure the best offer for WBD shareholders,” Paramount said in a statement.

“In reality, it is all quite simple: $30 in cash fully backstopped by a well-capitalized trust (in existence for approximately 40 years) of one of the most well-known founders and entrepreneurs in the world, Larry Ellison.”

In an interview with CNBC’s “Squawk Box” on Dec. 17, Di Piazza said that the board would have preferred more involvement from Larry Ellison, the billionaire co-founder of Oracle.

“We were not confident that one of the richest people in the world would be there at closing,” Di Piazza said. “Doing a deal is great, closing a deal is better.”

Streaming titan Netflix announced earlier this month that it will buy the entertainment empire in a cash-and-stock deal valued at $27.75, with a total equity value of $72 billion.

Ted Sarandos, Netflix’s co‑CEO, said in a Dec. 17 statement that he welcomed the Warner Bros. board’s endorsement, reiterating that the company’s offer is “superior” and in the best interests of stockholders.

“This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry,” Sarandos said.

Regulatory Hurdles

If regulators confirm the blockbuster agreement, Warner Bros.' film studio and streaming service would fall into the Netflix ecosystem.

Netflix’s offer “was not a hard choice,” Di Piazza told the network.

Since Netflix emerged as the victor in the dramatic bidding process, there have been growing antitrust concerns surrounding the Netflix–Warner Bros. deal.

President Donald Trump and U.S. lawmakers have criticized the proposal.

Paramount Global and Skydance logos are seen in this illustration taken on Dec. 17, 2024. Dado Ruvic/Reuters

“[Netflix has] a very big market share, and when they have Warner Bros., you know, that share goes up a lot. But it is a big market share. There’s no question. It could be a problem,” Trump told reporters on Dec. 7.

Sen. Elizabeth Warren (D-Mass.) described it as an “anti-monopoly nightmare.”

Di Piazza believes a merger with either company would face considerable regulatory scrutiny.

“Either of these deals can get done. Both of these deals will have to fight their way through the [Department of Justice],” he told CNBC.

Even if federal regulators take them to court, Netflix co-CEO Greg Peters says the company would defend the merger.

Still, Netflix thinks the regulatory process will be determined on the facts that “really support the approval of the deal,” Peters told CNBC’s “Squawk Box” on Dec. 17, adding that it is an agreement “that is good for consumers at the end of the day.”

Paramount’s Ellison, however, told the program last week that Netflix would face a difficult regulatory path because merging the top streaming service with the third-largest platform would be “anticompetitive.”

Shares of Paramount fell by more than 2 percent in premarket trading. Warner Bros. stock declined by about 1 percent, while Netflix shares climbed to almost 2 percent.

Tyler Durden Wed, 12/17/2025 - 11:15

The EU's New Policy Towards Russia's Seized Assets Isn't About Helping Ukraine

The EU's New Policy Towards Russia's Seized Assets Isn't About Helping Ukraine

Authored by Andrew Korybko via Substack,

Russia condemned the EU’s recent decision to indefinitely immobilize its seized assets, the special procedure for which scandalously circumvented member states’ veto power in an effort to prevent Hungary and Slovakia from stopping them. This move might precede the bloc either confiscating some of these funds and giving them to Ukraine and/or using them as collateral for a loan to that country. The official purpose would be to fund more arms purchases and/or assist with post-conflict reconstruction.

The first goal won’t lead Ukraine inflicting the EU’s desired strategic defeat of Russia while the second requires much more than just Russia’s seized assets to complete.

Regardless of the official purpose, confiscating Russia’s assets or using them as collateral for a loan to Ukraine would inflict irreparable harm to the EU’s financial reputation.

Foreign investors might be spooked into fearing that their assets are no longer safe and could thus pull them from EU banks and not deposit future ones there either.

The bloc might therefore ultimately lose hundreds of billions of dollars, perhaps upwards of a trillion or even more with time, all ostensibly for Ukraine’s sake even though it’s impossible for that country to strategically defeat Russia or be reconstructed entirely with its foe’s stolen funds.

There are accordingly reasonable grounds for suspecting that the EU has ulterior motives in mind for seriously contemplating this and that its new policy towards Russia’s seized assets isn’t about helping Ukraine.

The real purpose might be to prevent the US from reaching a deal with Russia per point 14 of its leaked 28-point Russian-Ukrainian peace deal framework to invest a significant sum of its (by-then former) adversary’s EU-seized assets into joint projects, likely energy and rare earths, after the conflict ends.

Such an arrangement could set those two on the path to revolutionize the global economic architecture as explained here and consequently accelerate the EU’s growing irrelevance therein.

With a view towards averting that scenario, the EU might have thus decided to indefinitely immobilize Russia’s seized assets as the first step towards “legally” asserting quasi-ownership over them, after which it might then either confiscate them and/or use them as collateral for a loan to Ukraine. The special procedure that was employed for circumventing member states’ veto power bodes ill for Hungary, Slovakia, and others concerned countries’ ability to veto the aforesaid moves that might soon follow.

The abovementioned plot could be preempted by Russia transferring legal ownership of its EU-seized assets to the US as was proposed here in April, but this is only possible if Russia and the US reach a deal on using these funds for financing joint projects, which requires rock-solid trust that doesn’t yet exist. Tangible progress on reaching a NATO-Russian Non-Aggression Pact, or at least the US managing Turkish-Russian tensions in Central Asia, could bring this about and thus ensure that these funds aren’t all stolen.

If the US obtains legal ownership of Russia’s seized assets, then Trump would have the pretext for demanding their transfer to the US under pain of sanctions, which is the only way to guarantee that they’re not given to Ukraine or remain indefinitely immobilized. The EU must therefore decide whether it’s worth the gargantuan cost of destroying its financial reputation just to impede a Russian-US rapprochement, but if it goes through with this, then those two might team up against it afterwards.

Tyler Durden Wed, 12/17/2025 - 10:45

WTI Holds 'Venezuela Blockade' Gains After Small Crude Draw, Record US Production

WTI Holds 'Venezuela Blockade' Gains After Small Crude Draw, Record US Production

Oil prices surged overnight, jumping off multi-year lows after President Trump ordered a "total and complete blockade" of oil tankers into and out of Venezuela.

That was amid hopes of a peace deal between Ukraine and Russia, among other factors including record domestic production and weakening demand in China.

But as one geopolitical risk looks set to ease, another one is ramping up. Trump said Venezuela was "completely surrounded by the largest Armada ever assembled in the History of South America," in a post on Truth Social late Tuesday.

However, the rally in oil prices may end up being short-lived unless other catalysts start to emerge.

"Ultimately, the trend is lower for oil, with it likely to persist unless there's a pick-up in global industrial activity, a bigger supply shock, or -- most likely -- intervention from OPEC to support prices," Capital.com analyst Kyle Rodda said in a note Wednesday.

But if the official data confirms API's big crude draw, we could see prices extend gains given how increasingly short crude positioning has become.

API

  • Crude -9.3mm

  • Cushing -510k

  • Gasoline +4.8mm

  • Distillates +2.5mm

DOE

  • Crude -1.27mm (-3.1mm exp)

  • Cushing -742k

  • Gasoline +4.81mm

  • Distillates +1.71mm

US crude inventories drew down modestly last week (dramatically less than API reported) while products saw stocks build for the fifth straight week...

Source: Bloomberg

US Crude production remains near record highs as rig counts continue to trend lower...

Source: Bloomberg

WTI is holding gains for now after the data...

Source: Bloomberg

Over the past few weeks, Brent crude positioning grew increasingly short. The last Commitment of Traders report, covering through December 9th, exhibited Managed Money shorts at a 98% 2-year rank.

However for the moment, Goldman Sachs traders say that a larger recovery appears warranted to cause a significant short unwind.

After incorporating the drop on December 16th, price needs to recoup ~6% before momentum signals become positive, per GS Futures Strategists' framework.

Moreover, curve tightening is modest thus far, posing a limited threat to term structure shorts.

Tyler Durden Wed, 12/17/2025 - 10:36

White House Prepping New Sanctions If Russia Rejects Latest Ukraine Ceasefire Offer

White House Prepping New Sanctions If Russia Rejects Latest Ukraine Ceasefire Offer

The White House is preparing a fresh round of sanctions on Russia's energy sector which would be implemented if Moscow rejects the Trump-proposed peace deal with Ukraine.

According to Bloomberg, this time around it is set to be even more muscular: "The US is considering options, such as targeting vessels in Russia’s so-called shadow fleet of tankers used to transport Moscow’s oil, as well as traders who facilitate the transactions, said the people who spoke on condition of anonymity to discuss private deliberations."

Ukraine's President Zelensky has called the current draft a "very workable version" - after he met in Berlin for two days with US envoys Steve Witkoff and Jared Kushner to work on it. Next it is expected to be presented to the Kremlin in the coming days.

August 15 Alaska summit, Getty Images

The Ukrainian leader appears somewhat satisfied as it's said to include robust security guarantees, but which stop short of plans for NATO membership. Russia on the other hand has gone so far as to demand that rejection of NATO membership be enshrined in Ukraine's national constitution. 

Zelensky said Tuesday that he worked with the American delegation "in great detail on documents that could stop the war and guarantee security" during the deliberations. "Every single detail matters because not a single detail must become a reward for Russia’s aggression," he had said while visiting The Hague afterward.

President Trump has meanwhile claimed that "we’re closer now than we have been." 

But will President Putin go for it? Here's how CNN presents one key aspect which is not likely to sit well with the Kremlin:

There are now five separate documents under discussion within the proposed peace deal – they include "legally binding" security guarantees that would be voted on by the US Congress, as well as plans for funding Ukraine’s post-war recovery.

These are the so-called Article 5-style guarantees which Russia will view as setting in place a recipe for future potential war, and a bigger one at that, between NATO and Moscow.

Moon of Alabama describes all of this as but the Flim Flam Theater Of Peace Talks On Ukraine:

The negotiations over the weekend between the U.S., Ukraine and Europe about the parameters of a ceasefire or peace agreement with Russia were surreal. The three sides are fighting each other over detailed points that Russia is sure to reject. They also left out important points which Russia had named as its priority items.

There is no way that any of this will lead to peace. Which may well be the point of the whole theater.

Commenting on German Chancellor's Friedrich Merz's claim of a ceasefire finally being "conceivable" - Moon of Alabama comments further:

No, Mr. Merz, there is no conceivable ceasefire. Russia does not want one. A ceasefire would allow Ukraine to recover and get ready for the next round of war. Russia wants a peace agreement that not only covers Ukraine but defines a new security architecture for the whole of Europe. Russia also wants physical control over the four oblast, plus Crimea, that voted to become members of the Russian Federation. It wants a Ukraine that is disarmed and denazified.

Neither seems to be on offer.

And here's the key line from the astute analysis: "Instead we get some spectacle over US 'security guarantees' conditioned on Ukrainian concessions of land. Zelenski is trying to cash in the first while not conceding the second."

Meanwhile, Washington meagerly warning of some energy sanctions just looks more symbolic than anything, given Russia has proven it has weathered robust and ratcheting efforts to isolate it economically so far.

Tyler Durden Wed, 12/17/2025 - 10:20

FBI Arrested A Fifth Trantifa Militant In NYE Bomb Plot

FBI Arrested A Fifth Trantifa Militant In NYE Bomb Plot

Authored by Steve Watson via Modernity.news,

The FBI arrested a fifth suspect in a New Year’s Eve mass bombing plot tied to the communist “decolonization” outfit known as the Turtle Island Liberation Front. This time, it’s an ex-Marine and former cop who ditched sanity for Trantifa extremism, underscoring how transgender ideology keeps fueling these deranged attacks on law enforcement and freedom.

The arrests spotlight a festering movement: violent leftists entangled with gender confusion, plotting to slaughter ICE agents and blow up key sites.

As we highlighted, Federal authorities swooped in last week, nabbing four Southern California militants from the Turtle Island Liberation Front while they allegedly headed to the desert to test homemade explosives.

The group, a far-left antifa-style cell obsessed with pro-Palestinian and anti-government rants, aimed to unleash coordinated IED attacks on five Los Angeles spots during New Year’s Eve celebrations. Their propaganda screams for violence, echoing the same unhinged calls that have sparked bloodshed before.

Among the initial arrests: Audrey Illeene Carroll, 30, who goes by the alias “Sky Miin.” Carroll, a black bloc regular, hinted at the plot months ago in online chats with a DSA activist, boasting that moves against ICE would hit the news. The individual’s own mother scrambled online for help finding her, clueless that the feds had already cuffed her daughter.

Ngo added details on Carroll’s antics: “In June, Carroll interacted with DSA activist Christopher E. Winston @OGBlackRedGuard and suggested that what she was planning against @ICEgov would be on the news. In February, she admitted going to direct actions in black bloc—Antifa’s preferred uniform.”

The other LA suspects include Zachary Aaron Page, a 32-year-old trans-identified individual; Tina Lai, 41; and Dante Gaffield, 24. They were caught red-handed en route to bomb-testing grounds, their plans to target ICE locations laid bare.

But the plot thickened with the fifth arrest in Louisiana. Ngo broke the exclusive: “I can exclusively report that the fifth unnamed arrested suspect in the Turtle Island Liberation Front New Year’s Eve mass bombing terror plot is Trantifa militant Micah James Legnon.”

Legnon, now on federal hold in Lafayette, identifies as female and floods social media with rants urging the murder of anyone branded a “fascist.” Ngo noted, “Legnon is a trans activist and identifies as a female. His social media is filled with posts calling for the m—rder of people he labels as ‘fascists.'”

Shockingly, this militant is an ex-Marine and former cop—proof that even those sworn to protect can spiral into leftist terror after embracing transgender ideology. It’s no isolated incident; it’s part of a pattern where transgender ideology intersects with violent extremism.

These radicals blend antifa tactics with gender extremism, resulting in deadly outbursts that the legacy media loves to downplay.

Tyler Robinson, the man who allegedly assassination Charlie Kirk, lived with a transgender partner, adding yet another layer to the web of radical ties.

Thomas Matthew Crooks was also into ‘furries’ and identified as they/them.

Flash back to the Nashville Covenant School massacre, where the trans shooter’s leaked manifesto exposed a hatred for “white privilege” and Christians.

Then there was the Iowa school shooting, where sick activists protested outside a Catholic school defending the trans perpetrator.

As Greg Gutfeld succinctly pointed out, Democrats have enabled this “hysteria of horror”.

 

The media plays directly into their hands.

The list of perps goes on and on…

Thanks to President Trump’s Executive order overhaul, the FBI is finally targeting real domestic terrorists instead of spying on parents at school boards. This latest plot’s disruption saved lives, but the threat lingers as long as leftist indoctrination pushes vulnerable people toward violence.

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

Tyler Durden Wed, 12/17/2025 - 10:00

Trump Weighs Limiting Defense Contractors' Shareholder Payouts, CEO Compensation

Trump Weighs Limiting Defense Contractors' Shareholder Payouts, CEO Compensation

Major defense contractors like Boeing and Raytheon depend on government contracts for at least half the dollars they take in - and times have been 'good' particularly in the last several years of geopolitical hotspots and raging wars from Ukraine to Gaza.

Contractor CEOs have as expected really been raking it in as well, though some government accountability watchdogs have long complained that huge CEO compensation, also through ample bonuses, does nothing to advance the defense of the United States.

But alas, it remains that ultimately it's the taxpayers subsidizing these more-than-ample paychecks. This trend jumped significantly starting in 2022 into 2023 - which marked the first year of the Russia-Ukraine war, and Washington's policy of arming Kiev to the teeth.

Getty Images

One industry watchdog had this to say from that year: "The United States spent more last year on defense than the next 10 nations combined. A deal just brokered by the White House and House Republicans increases that amount even further — to $886 billion. Defense contractors will pocket about half of that."

"Just eight years ago, the national defense community made do with over $300 billion less. But making do with "less" doesn’t come easy to corporate titans like Dave Calhoun, the CEO at Boeing, the nation’s second-largest defense contractor," the report added.

According to a Tuesday report from Punchbowl News, the White House is drafting an executive order that would place restrictions on stock repurchases, dividend payments, and executive pay at defense contracting firms.

Among the leading firms are Lockheed Martin, RTX (Raytheon), Boeing, L3 Harris Technologies, as well as the familiar names Northrop Grumman and General Dynamics.

The proposed order would apply to some of these largest companies which provide military equipment to the Pentagon, the report said, citing multiple sources.

"The executive order is the latest effort by the Trump administration to challenge the generational dominance of the defense prime contractors, the biggest beneficiaries of nearly $1 trillion in annual defense spending," Punchbowl writes. "But some worry that such an executive order could have a chilling effect on investments in the broader defense industrial base."

An unnamed industry official was quoted as saying, "The fear is the investors are going to leave the industry, the value of the companies is going to go down, and it’s going to be harder for them to get capital in the future" - and so "It’s not clear how they do this." However, so far the Trump admin has only said this is "speculation" when asked if an executive order is incoming.

Punchbowl adds: "The push comes as the Trump administration and the Pentagon in particular have put public pressure on longstanding defense primes. DOD officials have also prompted those companies to invest more of their own internal dollars into research and development work before receiving money from the government."

Smaller new start-ups related to defense tech have meanwhile aimed to disrupt how business with the Pentagon is typically done, vowing to be more nimble, invest their own funs up front in research and development, and to do away with "cost-plus" contracts.

Tyler Durden Wed, 12/17/2025 - 09:40

General Mills Earnings Top Expectations But CEO Warns Of 'K-Shaped' Bifurcation

General Mills Earnings Top Expectations But CEO Warns Of 'K-Shaped' Bifurcation

General Mills reported better-than-expected quarterly earnings. Organic revenue fell 1% in the fiscal second quarter, much less than the Bloomberg Consensus estimate of -2.53%, while volumes remained flat after an 8% plunge in the first quarter. Still, the packaged food giant, with more than 100 brands worldwide, cautioned that a bifurcated consumer environment persists across North America.

"While we're encouraged by the progress we're making in improving volume, we've seen a change in consumer behavior this year that is driving an increase in the cost of volume across our categories," CEO Jeff Harmening said in prepared remarks.

But Harmening warned about the "K-shaped" economy, also known as the bifurcated consumer environment, where middle-income and upper-income households are doing just fine, while lower-income, working-class households are under pressure from lingering effects of failed Bidenomics, which the Trump administration has been rushing to correct.

"More specifically, with lower- and middle-income consumers continuing to feel significant economic pressure, we've seen them make a greater proportion of their food purchases on promotion rather than at everyday prices," the CEO pointed out.

He added, "And this has not been driven by increased frequency or depth of promotions by General Mills or our competitors – those metrics are essentially unchanged from a year ago. It's simply a reflection of stressed consumers finding ways to stretch their dollars further."

It is important to note that General Mills operates as a defensive consumer staples company, with sales closely tied to household food budgets, promotion sensitivity, and supermarket behavior rather than to discretionary spending.

Some of the major brands under General Mills' umbrella include Cheerios, Lucky Charms, Cinnamon Toast Crunch, Betty Crocker, Pillsbury, Old El Paso, Nature Valley, Fiber One, and many more brands lining supermarket shelves.

Harmening said this consumer environment only means more deals are coming for cash-strapped consumers: "This is a phenomenon we'll watch closely as we move through the rest of this year. And it gives us even more confidence that our focus on delivering more value to consumers, along with amplifying the other elements of our remarkability framework, is the right one in the current environment."

Comments from the CEO on the bifurcated consumer environment are important because they serve as an almost real-time signal of consumer stress, pricing power, and food inflation dynamics. This helps explain why the Democratic Party is pushing an affordability narrative ahead of the midterms. However, Democrats have failed to tell the whole story: much of the inflation shock was self-inflicted, driven by reckless green spending and left-wing, nation-damaging policies.

However, there has been some talk of an improving consumer landscape for working-class households in 2026, from Treasury Secretary Scott Bessent to Goldman, which this week told clients to buy nicotine, energy drink, and candy stocks.

Tyler Durden Wed, 12/17/2025 - 09:05

Oracle Claims Michigan Data-Center 'On Schedule' Despite Blue Owl's Absence

Oracle Claims Michigan Data-Center 'On Schedule' Despite Blue Owl's Absence

Update (0900ET): Oracle has issued a statement claiming the deal on the Michigan data center remains on schedule (though not with Blue Owl):

“Our development partner, Related Digital, selected the best equity partner from a competitive group of options, which in this instance was not Blue Owl . . . Final negotiations for their equity deal are moving forward on schedule and according to plan.”

Related Digital said:

“This is an exceptional project that drew significant interest from equity partners. We evaluated all of our options and selected our equity partner of choice for their unparalleled expertise in the space.”

Related Digital declined to name the equity partner for the project. A person close to the company said it was in the “final stages of diligence” with the investor.

ORCL shares rebounded very modestly on the news...

*  *  *

The broad equity futures markets, most notably Nasdaq, is falling the pre-market after The FT reports that Oracle’s largest data centre partner Blue Owl Capital will not back a $10bn deal for its next facility, as the software group faces increased concerns about its rising debt and artificial intelligence spending.

The private credit provider had reportedly been in discussions with lenders and Oracle about investing in the planned 1 gigawatt data centre being built to serve OpenAI in Saline Township, Michigan. But the agreement will not go forward after negotiations stalled, according to three people familiar with the matter.

Blue Owl has been the primary backer for Oracle’s largest data centre projects in the US, investing its own money and raising billions more in debt to build the facilities, which Blue Owl typically owns and leases to Oracle.

The FT adds that people close to the Michigan deal said lenders pushed for stricter leasing and debt terms amid shifting market sentiment around enormous AI spending including Oracle’s own commitments and rising debt levels.

As a result, the deal was less attractive financially for Blue Owl than its earlier projects, according to some of the people.

One quick question... what happened in the last 7 days that changed their mind?

This sparked an immediate drop in ORCL shares..

...which knocked into the tech sector more broadly...

This could potentially be very bad news for both the data-center ecosystem within AI and ORCL itself, since, as we have detailed numerous times previously, if private credit is saying 'no mas', then no way the AI cycle will be completed...

Who could have seen this coming?

As far back as June 2024, we have warned that the debt backing of this massive capital expenditure has been an event horizon that seemed inevitable. We appear to be crossing it now...as Blue Owl has largely pioneered this type of arrangement with large tech companies that want to offset the upfront costs of enormous data center construction projects... and is now, apparently, becoming much more discerning.

Tyler Durden Wed, 12/17/2025 - 09:00

EU Will Be AIsimilated

EU Will Be AIsimilated

By Bas van Geffen, Senior Macro Strategist at Rabobank

Resistance is futile. You will be AIsimmilated. The Trump administration really wants the rest of the (Western?) world to embrace American-made artificial intelligence and technology. Last week, the US suspended the US-UK Technology Prosperity deal, reportedly because the Trump administration was frustrated about the lack of progress on trade talks.

But the Telegraph reported that this may be due to concerns that the UK’s Online Safety Act could slow development of US artificial intelligence – as the US races to stay ahead of China. That makes sense: the US government has been unhappy with European regulation in many fields, including digital services providers.

The US Trade Representative argues that this creates an unequal playing field for US companies, whereas European companies are allowed to operate freely in the US. Yesterday, Greer warned the European Union that the US could use every tool at its disposal to counter “unreasonable” regulations, naming about a dozen of European companies that might be affected.

The EU may be looking at cutting red tape in several areas, but it has so far shown little appetite for hollowing out privacy laws, for example. Meanwhile, the Trump administration has shown its willingness to coerce governments by other means. Could Brussels’ insistence on these rules lead to a new trade dispute with the US?

These threats cast new doubt over EU-US relations, after the US have also called into question the country’s commitment to Article 5 of the NATO treaty. The trade agreement reached earlier this year has clearly failed to pacify the US government, despite Brussels’ pledges to invest more in the US, and buy more American energy and defense equipment.

In the latest iteration in the Ukraine-Russia peace talks, the US is now offering Ukraine “guarantees similar to those under Article 5 of the NATO treaty.” It’s an attempt to bridge the Ukrainian demand for strong security guarantees with Russia’s demand that Ukraine does not become a NATO member.

It’s a take-it-or-leave-it offer, and one can certainly wonder whether “similar guarantees” are sufficient for Ukraine to sign up to any deal – especially after Treasury Secretary Bessent undermined Article 5 when he stated that the US would not send troops to Europe, but only sell weapons, if Russia were to attack.

Nonetheless, oil markets have been drifting lower as peace talks continue and a global glut hangs over the market. WTI fell almost 6% in the past four sessions, hitting $55 per barrel for the first time since February 2021. However, oil prices came off their fresh lows after President Trump ramped up pressure on Venezuela with a blockade of tankers.

Yesterday also saw a busy data calendar as US statistics offices are still working through their backlog of data, after the shutdown disrupted many official data releases.

This made for a very unusual Employment Report, and not only because it was released on a Tuesday. The BLS made up for missing the October report. So, we learned that non-farm payrolls declined 105,000 in October and that payrolls recovered by 64,000 in November. This means that the labor market has shown little net change since April.

Average hourly earnings for November were softer than expected, and the unemployment rate rose to 4.6% from 4.4% in September. So the overall picture remains one of a weaker labor market. That supports further monetary easing, but probably not in January. These two months of data were not so weak to instill more urgency in the FOMC.

Moreover, some of the data come with slightly bigger margins of error, as a result of the shutdown. Lack of an October report may have left traders without their entertainment on the first Friday of November. But it left statisticians with bigger problems, such as missing the usual statistical weights for the current report – which are based on prior months. So, they had to adjust their methodology for weighing individual responses into the aggregate employment statistics. Add to that a lower response rate than usual.

By contrast, the response rates for the establishment survey were higher than usual. The collection periods for the October and November surveys were extended due to the shutdown, giving employers more time to respond. This could lead to somewhat smaller revisions to yesterday’s non-farm payroll estimates in the coming months.

Meanwhile, European PMIs were a little weaker than expected. Eurozone activity has been more resilient than expected, and these data suggest that some of this resilience may now be fading. We’ve been expecting a soft patch before Eurozone growth regains momentum in the course of 2026. Nonetheless, the PMI report took some of the sting out of the market’s recent expectations of a potential rate hike by end-2026. That decline in short-term rates caused a modest steepening of the European yield curve.

Rate cut expectations are building in more earnest in sterling money markets. UK inflation undershot expectations again in November. Headline CPI slowed to 3.2% y/y. That’s below the Bank of England’s projection of 3.4% and the weakest print in eight months. Underlying inflation eased too. Core inflation fell to 3.2% y/y, the slowest in nearly two years, while services inflation declined to 4.4% y/y. The Bank also watches food price inflation closely, given its influence on household inflation expectations, and this slowed from 4.9% to 4.2% y/y.

Combined with weak activity data since the summer, rising unemployment, and a slowdown in private sector wage growth, the disinflationary narrative appears to dominate MPC discussions. And risks of persistence are easing. Overall, the data suggest the BoE has been behind the curve.

Tomorrow’s 25bp cut looks to be locked in, and further easing as early as February is starting to look very plausible. We had already penciled in a subsequent cut in February, and we see some downside risks to our forecast of a 3.25% terminal rate for next year, especially if the UK economy fails to recover from the weakness seen in the second half of this year.

Tyler Durden Wed, 12/17/2025 - 08:25

Futures Rise For First Time In 4 Days As Oil Rebounds From 4 Year Low

Futures Rise For First Time In 4 Days As Oil Rebounds From 4 Year Low

Stock futures are higher but with less than 10 full trading days left in the year, the Santa rally seems increasingly elusive, with traders struggling to find catalysts. The S&P 500 tested a key technical level on Tuesday, coming close to breaking below its 50-DMA. As of 7:15am ET, S&P 500 futures rose 0.3%, pointing to the first increase in four days for the S&P 500 as investor appetite returned after last week’s tech retreat; Nasdaq contracts +0.4%: Netflix rose 1.7% in premarket trading on bets it will prevail in its bid for Warner Bros. Discovery.Amazon rose 2% on report OpenAI is in initial discussions to raise at least $10 billion from Amazon and use its chips. Trading volumes are still relatively high, though will inevitably start to tail off as Christmas approaches. The main action today is in oil, with Brent prices bouncing 2.2% from a four year low back over $60, after Trump ordered a blockade of sanctioned tankers going into and leaving Venezuela, while the US is once again considering sanctions on Russia if Putin rejects the proposed Ukraine peace deal. Gold also jumped. 10Y treasury yields rose 3bps to 4.18% and the dollar index was at session highs. US economic calendar blank for the session. Fed speaker slate includes Waller (8:15am), Williams (9:05am) and Bostic (12:30pm)

In premarket trading, Mag 7 stocks are mostly higher: Amazon +1.9% as OpenAI is in initial discussions to raise at least $10 billion from Amazon and use its chips (Tesla +0.3%, Meta +0.3%, Alphabet +0.3%, Microsoft +0.2%, Apple +0.2%, Nvidia +0.1%)

  • Avantor (AVTR) slips 3% after Jefferies cut the life-sciences firm to underperform — a sell equivalent — from hold, citing structural headwinds with “no easy fix.”
  • Children’s Place (PLCE) slides 32% after the kids apparel retailer posted third quarter sales that fell 13% from the year-earlier period.
  • Frontier Group Holdings (ULCC) climbs 7% as the company is in merger discussions with Bankrupt Spirit Aviation Holdings Inc., according to people familiar with the matter.
  • Hut 8 (HUT) surges 21% after the Bitcoin miner and data center operator signed a 15-year, $7 billion lease with Fluidstack for 245 megawatts of IT capacity at its River Bend data center campus in Louisiana with Google backstopping.
  • Lennar (LEN) falls 4% after the homebuilder forecast first quarter orders, deliveries and margins all below expectations, signaling strains on the housing market despite a lower interest rate.
  • Netflix (NFLX) rises 1.3% as Warner Bros. Discovery plans to reject Paramount Skydance’s takeover bid due to concerns about financing and other terms. Warner Bros. (WBD) shares are down 1.4%, while Paramount (PSKY) drops 1.8%.
  • Worthington Enterprises (WOR) falls 8% after the maker of aluminum propane cylinders posted fiscal second-quarter profit that disappointed.

Tuesday’s payrolls signaled a cooling jobs market, but not weak enough to prompt major changes to rate-cut bets in the near term. Hiring was concentrated in education and health care, as well as AI-related construction, but not much else, wrote Bloomberg Economics’ Anna Wong. The CPI data due Thursday will be the last major steer of the year. Still, investors are awaiting that report mostly with a sense of apathy, with options traders betting the S&P 500 will swing just 0.7% in either direction, according to data compiled by Barclays. That’s sharply lower than the 1% average realized move spurred by 12 reports through September. There are also signs that the recent rotation trade is fading, with the Russell 2000 index of small caps down 2.8% over three sessions.

“Yesterday’s November US jobs data is more of a confirmation of the prior expected rate path rather than a new catalyst,” said Andrea Gabellone, head of global equities at KBC Global Services.

Investors are increasingly looking for opportunities beyond the US tech giants that have underpinned the S&P 500’s 16% rally so far this year. A growing chorus of Wall Street analysts are making bullish predictions for 2026 after three straight interest-rate cuts from the Federal Reserve and as nations from the US to Germany boost spending.

“I would expect more volatility because investors are differentiating more and they are not just playing one sector,” said Guy Miller, chief strategist at Zurich Insurance. “But the combination of trend-like growth, slightly lower interest rates, fiscal impulse coming through and importantly, a significant capital spending cycle kicking in, will work its way through the economy.”

Trump’s ban on sanctioned oil tankers going into and leaving Venezuela marked a major escalation and follows the seizure of an oil tanker last week by US forces off the country’s coast. Brent crude jumped 2% to $60.11 a barrel, advancing from the lowest level since 2021.

The US is also preparing for a fresh round of sanctions on Russia’s energy sector should President Vladimir Putin reject a peace agreement with Ukraine, according to people familiar with the matter, potentially adding to the uptick in geopolitical tensions.

Europe’s Stoxx 600 Index gained 0.4%, led by the energy sector with BP and Shell rallying more than 2%, tracking gains in oil prices after Bloomberg reported the US is preparing a fresh round of sanctions on Russia’s energy sector. The UK’s FTSE 100 outperforms after inflation fell more than expected, cementing expectations for an interest-rate cut at the Bank of England on Thursday. Here are some of the biggest movers on Wednesday:

  • DBV shares soar as much as 47% in Paris, to the highest level since September 2022, after the company’s experimental skin patch met its primary endpoint in a late-stage trial for peanut-allergic children.
  • HSBC shares advance as much as 3.6% to a fresh high after KBW upgraded the lender’s shares to outperform from market perform on the strength of its Hong Kong business.
  • Serco shares jump as much as 5.6%, touching their highest level in more than 11 years, after the outsourcing services provider boosted its earnings guidance and introduced targets for 2026 that also exceeded expectations.
  • IPF shares rise as much as 8.7%, trading at their highest level since 2019, after the company extended the deadline for BasePoint to make a firm takeover offer.
  • Ariston shares gain as much as 6% after the Italian white goods and heating firm agreed to buy energy business Riello.
  • EnQuest shares rise as much as 6.1% after the oil and gas company said annual production should hit or exceed the top-end of its guidance range.
  • Hansa Biopharma shares plummet as much as 28% in Stockholm, the most since 2023, after disappointing results from a trial aimed at improving kidney function in patients with anti-glomerular basement membrane disease.
  • Suedzucker shares fall as much as 4.4% to the lowest level since 2008 after the German sugar producer said it expects a slight decrease in FY26/27 revenues as “highly challenging” conditions in the market persist.
  • Bunzl shares drop as much as 7.7%, the most since April, after the value-added distributor gave guidance for 2026 including moderate revenue growth and operating margin slightly down year-on-year.

Asian stocks edged higher, buoyed by a rebound in technology shares. Benchmarks rose in South Korea and Hong Kong. The MSCI Asia Pacific Index gained 0.3%, snapping a two-day decline. Samsung Electronics, SK Hynix and Tencent Holdings were among the biggest boosts to the gauge’s climb. Shares also rebounded in mainland China.  Sentiment around AI valuations appears to have steadied following a two-day slide that dragged the regional tech gauge down by more than 4% through Tuesday. Investors are once again focused on earnings that may provide further catalyst for shares.  Asia is seeing a busy day for stock market listings on Wednesday. Among the debuts, Chinese chipmaker MetaX Integrated Circuits Shanghai Co. soared 693%, while Japan’s SBI Shinsei Bank Ltd. and Indonesia’s digital banking firm PT Super Bank Indonesia also surged. Meanwhile, Hong Kong’s largest licensed cryptocurrency exchange HashKey Holdings Ltd. fell on its first day of trading

In FX, the Bloomberg Dollar Spot index climbs 0.3%. Cable drops 0.7% to $1.3330 with sterling at the bottom of the G-10 FX leaderboard after inflation data came in below expectations. The yen also underperforms, falling 0.5% against the greenback. The Indian rupee jumped 1% after the central bank stepped in to support it after it hit a record low amid the country's aggressive easing policies.

In rates, UK government bonds gapped higher at the open after headline, core and service CPI readings were lower-than-expected in November. Gains have pared but UK 10-year yields are still down 4 bps at 4.48%.

In commodities, WTI crude futures rise 2.4% to $56.60 a barrel while Brent crude jumped 2.2% to $60.24 a barrel, advancing from the lowest level since 2021. Trump's Venezuela move helped send gold above $4,330 an ounce, pushing it close to the record $4,381 set in October. Other precious metals were also gaining, with silver climbing to a record above $66 an ounce and platinum hitting the highest since 2008.

Bitcoin slid 1% to trade around $86,868 as the token headed for the fourth annual decline in its history.

US economic calendar blank for the session. Fed speaker slate includes Waller (8:15am), Williams (9:05am) and Bostic (12:30pm)

Market Snapshot

  • S&P 500 mini +0.3%
  • Nasdaq 100 mini +0.4%
  • Russell 2000 mini +0.3%
  • Stoxx Europe 600 +0.4%
  • DAX +0.1%
  • CAC 40 little changed
  • 10-year Treasury yield +2 basis points at 4.17%
  • VIX -0.3 points at 16.18
  • Bloomberg Dollar Index +0.3% at 1208.16
  • euro -0.2% at $1.1718
  • WTI crude +2.5% at $56.66/barrel

Top Overnight News

  • Trump on Tues ordered a “complete blockage” of sanctioned oil tankers from accessing Venezuela and labeled the Maduro gov’t a “terrorist regime.” Brent jumped and rose further on the news of potentially more Russia sanctions. RTRS
  • The US is preparing a fresh round of sanctions on Russia’s energy sector should Vladimir Putin reject a peace agreement with Ukraine, according to people familiar. The new measures may be unveiled as soon as this week. BBG
  • Trump is expected to sign an executive order as soon as this week that would fast-track reclassification of cannabis, according to NBC News.
  • US told China it's ready to defend interests in Indo-Pacific: BBG
  • Trump officials privately raise doubts about Hassett for Fed chair, with his critics saying he has not been effective as head of the National Economic Council, playing little part in driving policies: Politico
  • Amazon (AMZN +166bps premkt) is in talks to invest more then $10bn in OpenAI and sell it more chips and computing power, in the latest investment deal tying the AI start up to its infrastructure providers. FT
  • Jared Kushner’s Affinity Partners is withdrawing from the takeover battle for Warner Bros. Discovery. The studio plans to reject Paramount’s hostile bid, people familiar said, as its board sees the Netflix deal providing greater value. BBG
  • Japan’s exports gained 6.1% last month, topping estimates, with shipments to the US rising for the first time since Trump announced baseline tariffs in April. BBG
  • India’s central bank stepped in to support the rupee, propelling it to its biggest gain in seven months. BBG
  • India’s central bank governor expects the country’s interest rates to remain low for a “long period” as it enjoys robust economic growth that could soon be boosted by trade pacts being thrashed out with the US and Europe. FT
  • UK inflation slipped to the lowest level in eight months, with CPI rising 3.2% in November, less than expected. The pound weakened, and traders saw the data as all but sealing a BOE rate cut Thursday. BBG
  • European leaders rallying support for Kyiv say they are working to defend a democratic country, safeguard international law and counter Russian aggression. But there is another motivation rooted in self-interest: Europe believes a deal that favors Moscow risks a wider war that could engulf the whole continent. Cash-drained European capitals fear they would have no other choice but to massively increase military spending and defensive preparations, in the hope of preserving their deterrence. WSJ
  • Fed's Goolsbee (2025 voter, hawkish dissenter) said job market is cooling at a modest pace. Said: As we go into 2026, optimistic economy will sustain at stabilised rate.

Trade/Tariffs

  • The UK Government announces that they are to re-join the EU's Erasmus+ programme in 2027, with the deal including a 30% discount compared to the default terms. The UK and EU set a deadline to agree a food and drink trade deal and carbon markets linkage in 2026. Negotiations on electricity market integration has also been agreed. UK contribution will be about GBP 570mln for 2027.
  • UK's EU Relations Minister Thomas-Symonds is expected to announce the UK will rejoin the Erasmus student exchange program at 12:30 GMT, according to POLITICO. The Times said UK was not able to negotiate as large a discount as it wanted from the GBP 120mln/yr that was announced.
  • EU diplomats told POLITICO, regarding the Mercosur trade deal, "If a compromise emerges on safeguards, EU ambassadors are expected to vote on the overall deal (Mercosur) on Friday".
  • South Korea is to push for service sector FTA with China and CPTPP affiliation for export momentum, according to Yonhap.
  • China commerce ministry said the UN convention on cargo documents fully demonstrates China's determination and actions to uphold true multilateralism, and strive to provide public goods globally.
  • US and Japan are to consider projects that may tap the USD 550bln fund, according to Bloomberg.
  • US President Trump posted "Numbers recently released show that TARIFFS have reduced the Trade Deficit of the United States by more than half. This is larger than anyone, except ME, projected, and will only get stronger in the near future". Full post: "Numbers recently released show that TARIFFS have reduced the Trade Deficit of the United States by more than half. This is larger than anyone, except ME, projected, and will only get stronger in the near future. Everybody should pray that the United States Supreme Court has the Wisdom and Genius to allow Tariffs to GUARD our National Security, and our Financial Freedom! There are Evil, America hating Forces against us. We can not let them prevail. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!".

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were indecisive with the region lacking conviction following the uninspiring lead from Wall Street where price action was choppy as participants digested a deluge of mixed data releases. ASX 200 was subdued in the absence of bullish drivers and as gains in the mining, materials and resources sectors were offset by weakness in energy, defensives and financials. Nikkei 225 swung between gains and losses amid a choppy currency and as participants digested the better-than-expected Japanese machinery orders and exports data, but with upside limited as an anticipated BoJ rate hike looms. Hang Seng and Shanghai Comp initially traded indecisively in a narrow range with little fresh macro catalysts from China, and after the PBoC drained liquidity in its open market operations. The bourses later climbed to session highs.

Top Asian News

  • India's Finance Minister said bringing down India's debt to GDP ratio will be a core priority for the government for the next fiscal year, adds high debt to GDP ratio in some Indian states is a cause of worry.
  • Japanese PM Takaichi said Japan needs to strengthen its capacity through proactive fiscal policy rather than excessive fiscal tightening. said:. Sustainable fiscal policy and the social welfare system will be achieved by reflating the economy, improving corporate profits and raising household income through wage gains that boost tax revenues. Fiscal spending will be strategic rather than a reckless expansion.
  • Australia Treasurer Chalmers said FY27/28 budget deficit seen rising to AUD 32.6bln.
  • Former BoJ Deputy Governor Wakatabe said BoJ must raise the neutral interest rate through fiscal policy and growth strategies, adds the neutral interest rate would rise if demand for funds increases. said:. If the neutral rate rises due to fiscal policy and growth strategies, it would be natural for the Bank of Japan to raise interest rates. The Bank of Japan should avoid premature rate hikes and excessive adjustment of monetary support given the level of the neutral rate. Sanaenomics carries over elements of Abenomics, but focuses more on strengthening the supply side of the economy.
  • BoK Governor Rhee said will make sure outbound investment to US from a trade deal doesn't hurt Forex stability. said:Need to make MPS hedging strategies more flexible and less transparent to curb herd-like behaviour.
  • Bank of Korea said 2026 inflation could exceed forecasts if KRW remains weak against USD.
  • Confederation of Japan Automobile Workers’ Union president Kaneko said he’s concerned that a BoJ rate hike on Friday could weigh on companies’ ability to raise wages next fiscal year. said:“If the yen sharply strengthened after Friday’s decision, it could affect corporate sentiment”.
  • South Korea forex authority said it resumes currency swap with the Bank of Korea.

European equities are trading mostly firmer. The FTSE 100 (+1.4%) is the outperformer following cooler-than-expected CPI, which increased the odds of a December cut to near 100%. European sectors are mixed. Leading sectors are Basic Resources (+1.1%), Banks (+1.1%) and Energy (+1.1%). Sentiment for Basic Resources has been underpinned by an uptick in metal prices. Energy has been lifted by crude prices nursing the prior day's losses, fuelled by geopolitical tension between the US and Venezuela after US President Trump's announcement of a blockade of sanctioned oil tankers entering and leaving Venezuela. Furthermore, a Bloomberg report on potential Russian energy sanctions lifted crude to highs.

Top European News

  • EU Climate Commissioner said they are not exempting any countries from the Carbon levy, though the UK could be exempt but only after UK carbon market linked to EU's.
  • EU Commission proposes extending carbon border levy to downstream steel and aluminium-heavy products. Would also apply it to imported washing machines and machinery. Carbon borders levy revenues from 2026-27 for fund to support EU industries. Proposes system to prevent circumvention of carbon border levy, including by applying default country emissions values if companies provide unreliable data.
  • French Socialists (PS) have reportedly outlined conditions that would enable them to abstain instead of voting against the Finance Bill, via Politico citing various press; specific demands incl. EUR 10bln in additional spending via new financing streams.
  • UK PM Starmer pushes back on delayed defence spending plan and has asked military chiefs to rework aspects of the defence investment plan, according to FT.
  • Germany is set to approve EUR 50bln in military purchases, according to FT.
  • New South Wales Premier Chris Minns said to recall state parliament to discuss legislation on firearms which will cap number of firearms that can be owned and will reclassify other types of guns, as well as reduce magazine capacity for shotgun.

FX

  • The USD is stronger against all G10FX peers following Tuesday's US data deluge, along with broad weakness across other majors, especially GBP and JPY. The session ahead sees comments from Fed second-in-command Williams, Fed Chair candidate Waller, and 2027 voter Bostic. There are no notable data releases until Thursday, November US CPI. DXY trades within a 98.17-98.64 range, with further gains in the greenback capped by its 100DMA at 98.62.
  • EUR is a little lower vs the broadly stronger USD. The single currency was little moved following the German Ifo metrics (slightly shy of exp.) and EZ HICP Finals which remained unrevised. Currently within a 1.1704 to 1.1752 range.
  • GBP underperforms vs G10 peers. Policymakers on Threadneedle Street this morning will welcome the cooler-than-expected UK inflation print for November, aligning with the BoE's view that inflation had peaked and coming in at 3.2% against the expected 3.5%, lower than October's 3.6% print. GBP, against the EUR and USD has been weakening since the 07:00 data, with further moves likely to encounter resistance at the 0.8795 and 1.33 levels respectively. Following the data, markets have moved to price an additional 10bps of easing in 2026, moving from 58bps (Tuesday) to 66bps. For the BoE confab on Thursday, expectations rose from c. 91% to a fully priced 25bps cut.
  • USD/JPY is lower today. Despite better-than-expected Japanese exports and machinery orders, the stronger USD, firmer energy benchmarks (on the day), and technicals have weighed on the haven in light newsflow. Remarks from Japanese Government panel member Nagahama did little to move the JPY, he said the BoJ's monetary policy appears to be heavily influenced by FX moves. Since the beginning of the European session, and partially coinciding with the aforementioned comments, the pair breached the psychological 155 level, last crossed on Monday. As such, USD/JPY trades within 154.52-155.59 parameters. Levels to be aware of include 21 and 50DMAs, at 155.95 and 154.25, respectively.

Fixed Income

  • Gilts are the clear outperformer this morning. Gapped higher by 73 ticks, boosted by a cooler-than-expected November CPI series. A release that cements a December cut with markets now assigning a 99% chance of such a move (vs 91% pre-release). Ahead of the data, sell-side analysts generally viewed a 5-4 vote split as the consensus; the release today could now see the split shift a bit more dovishly. The current hawks are Mann, Pill, Greene and Lombardelli; the latter has been viewed as the most likely candidate to join Bailey in cutting rates in December, with Chief Economist Pill perhaps the other member to watch. Back to price action, Gilts are currently higher by 50 ticks and at the lower end of a 91.38 to 91.78 range.
  • USTs are a touch lower this morning, pulling back after ultimately settling in the green on Tuesday. Currently trading towards the lower end of a narrow 112-11 to 112-17+ range. Ahead, US data is lacking (CPI tomorrow); before that, the POTUS will deliver remarks where he could potentially outline new policies for the new year.
  • Bunds were essentially unchanged throughout overnight trade, but then caught a bid following the release of the UK’s inflation report (see below). The German benchmark swung from troughs to peaks following the release, but have since scaled back towards the midpoint of a 127.53 to 127.79 range. No real move on the German Ifo data, which was broadly slightly shy of expectations, another disappointing release from the region. From an inflationary standpoint, a recent Bloomberg article suggested that the US is planning new energy sanctions on Russia, if they reject a peace deal with Ukraine. This sparked upside in the crude complex, putting the German benchmark under very slight pressure – albeit within ranges.

Commodities

  • Crude benchmarks have completely reversed the losses seen throughout Tuesday’s as the US blocks sanctioned oil tankers going in and out of Venezuela and recent reports, from Bloomberg sources, that the US are preparing new Russian energy sanctions if Russia rejects a Ukraine peace deal. Kremlin recently said that it had not yet seen the report, but highlighted that any sanctions will harm attempts to mend relations. As soon as the Bloomberg reports came out regarding new Russian energy sanctions, WTI lifted from USD 55.95 to a 56.74/bbl session high while Brent rose from USD 59.60 to a 60.40/bbl session high.
  • Spot XAU continued to grind higher throughout the APAC session but remains well-contained within Friday’s range of USD 4257-5354/oz. After opening just above USD 4300/oz, XAU gradually traded higher and briefly extended beyond Tuesday’s high of USD 4335/oz, peaking at USD 4342/oz, before falling back into Tuesday’s range. XAG has, in recent sessions, dragged the yellow metal higher as investors look for cheaper alternatives to gold. XAG extended to a new ATH of USD 66.52/oz in the APAC session.
  • 3M LME Copper bid higher throughout the Asia-Pac session, trending from USD 11.62k/t to a peak of USD 11.79k/t, in-line with the rest of the metals space. The red metal has slightly pulled back as the European session gets underway, dipping to a trough of USD 11.7k/t, but gains remain mostly in-tact as trade continues.
  • Kazakhstan Deputy Energy Minister said Kazakhstan oil production in the first 11 months of 2025 totalled 91.9mln tons and exports were 73.4mln tons.
  • Chevron Corp (CVX) spokesperson said operations in Venezuela continue without disruption following Trump's blockade order.
  • US Private Inventory Data (bbls): Crude -9.3mln (exp. -1.1mln), Distillate +2.5mln (exp. +1.2mln), Gasoline -4.8mln (exp. +2.1mln), Cushing -0.5mln.

Geopolitics

  • Russia's Kremlin said it is not expecting US envoy Witkoff to come to Moscow this week. As soon as the US are ready, they will inform Moscow about their talks with Ukraine.
  • US readies new Russian energy sanctions in the scenario that Russia rejects a Ukraine peace deal, according to Bloomberg sources; could potentially be announced as early as this week. Considering options such as targeting vessels in Russia’s "shadow fleet" of tankers used to transport Moscow’s oil. Crude benchmarks saw immediate upside. WTI lifted from USD 55.95 to a 56.68/bbl session high. Brent rose from USD 59.60 to a 60.33/bbl session high.
  • Ukraine's military strikes Russian oil refinery in Krasnodar region.
  • EU ambassadors convene at 08:00 GMT, to talk on frozen Russian assets; a diplomat told POLITICO it was "still quite early". Belgian Prime Minister De Wever is expected to float a legal workaround at Thursday’s summit that would allow joint EU borrowing for Ukraine, according to four diplomats. POLITICO writes that EU joint borrowing was first aired by ECB's Lagarde, and since received support from Italy, though the idea has since been disregarded with officials dismissing it as legally unviable.
  • Ukrainian drone attack on Russia's Krasnodar region injures two people and cuts power to parts of the region, according to regional authorities.
  • Israeli forces conduct raids in Al Tuffah and Al Zaytoun neighbourhoods east of Gaza City, according to Al Jazeera.

US Event Calendar

  • 4:00 am: Sep New Home Sales MoM, est. -10.82%, prior 20.5%
  • 4:00 am: Sep New Home Sales, est. 713.5k, prior 800k
  • 4:00 am: Sep Housing Starts MoM, est. 1.61%
  • 4:00 am: Sep P Building Permits, est. 1350k, prior 1330k
  • 4:00 am: Sep Housing Starts, est. 1328k, prior 1307k
  • 4:00 am: Sep Construction Spending MoM, est. 0%, prior 0.2%
  • 7:00 am: Dec 12 MBA Mortgage Applications, prior 4.8%

Central Banks (All Times ET):

  • 8:15 am: Fed’s Waller Speaks on Economic Outlook
  • 9:05 am: Fed’s Williams Delivers Opening Remarks
  • 12:30 pm: Fed’s Bostic Participates in Moderated Discussion

DB' Jim Reid concludes the overnight wrap

The mood in markets hasn't been very "Christmassy" this week with yesterday seeing the S&P 500 (-0.24%) post a third consecutive decline thanks to a US jobs report that could be interpreted in whichever way your biases were. The report was always expected to be choppy given the DOGE cuts and the government shutdown, but the rise in unemployment was even bigger than expected, reaching a four-year high of 4.6%. So on balance, investors interpreted the report in a dovish light, and Treasuries rallied in a choppy post payroll session, as investors priced in more cuts for 2026. Moreover, that risk-off mood was clear across the board, with US HY spreads (+5bps) reaching their highest in three weeks. And we saw Brent crude oil prices (-2.71%) close beneath $60/bbl for the first time since February 2021, at just $58.92/bbl, though they are +1.21% higher overnight after Trump ordered a blockade of sanctioned oil tankers in Venezuela. The move has taken Treasuries yields back higher too.  

In terms of more detail on that jobs report, the main headline was that payrolls were down by -105k in October, before rebounding by +64k in November (vs. +50k expected). That October decline was driven by a collapse in government payrolls of -157k, marking their biggest monthly slump since the pandemic-driven losses in May 2020. But it was hard for markets to take too much optimism from the November recovery, as the unemployment rate ticked up to 4.6% (vs. 4.5% expected), and the broader U6 measure (which adds in the underemployed and those marginally attached to the labour force) hit 8.7%, the highest since August 2021. Diluting some of the concern over higher unemployment was that this was driven by re-entrants to the labour market rather than permanent job losses. Another consolation was the resilience of private payrolls, up by +52k in October and +69k in November, suggesting that things were a bit stronger away from the DOGE cuts and the shutdown. The 3-month moving average for private payrolls is in fact now at a 6-month high.

Ultimately however, the higher unemployment rate confirmed existing fears about a softer labour market, and investors priced in more Fed rate cuts for 2026. Indeed, the number of cuts priced by the December 2026 meeting was up +2.4bps on the day to 59bps. And in turn, Treasuries rallied across the curve, with the 2yr yield (-1.5bps) down to 3.49%, whilst the 10yr yield (-2.8bps) fell to 4.15%. Those moves came amid ongoing headlines surrounding the Fed Chair nomination, with the Wall Street Journal reporting that Trump was going to interview Fed Governor Chris Waller today. The latest standings on Polymarket put NEC Chair Kevin Hasset at around 53%, and comfortably back in the lead, ahead of former Fed Governor Kevin Warsh at 26% and with Waller up to 16% from 7% the previous day.

Nevertheless, equities struggled against this backdrop, with the S&P 500 (-0.24%) having now posted 3 declines since its record high last Thursday. Those moves were broad-based, with around three-quarters of the index losing ground yesterday. Indeed, the losses would’ve been larger were it not for outperformance by the Mag-7 (+0.82%), which were led by Tesla (+3.07%) reaching a new record high for first time since last December. By contrast, the equal-weighted S&P 500 was down -0.71%, with energy stocks (-2.98%) leading the decline given the latest slump in oil prices.
Brent crude fell -2.71% to $58.92/bbl, its lowest since February 2021, though it is +1.21% higher overnight after President Trump posted last night that he was ordering a “BLOCKADE OF ALL SANCTIONED OIL TANKERS going into, and out of, Venezuela”. This marks the latest move by the US to raise pressure on the Maduro regime. The overnight oil rise is also helping 10yr Treasury yields (+2.5bps) reverse some of yesterday’s decline.

In Europe, markets had followed a very similar pattern yesterday, with a risk-off move that pushed equities and bond yields lower. In part, that was driven by an underwhelming set of flash PMIs for December, with the Euro Area composite reading falling back from its two-year high in November to 51.9 (vs. 52.6 expected). So that added to fears that the economy had lost some momentum into year-end, and the STOXX 600 (-0.47%) fell back, along with yields on 10yr bunds (-0.8bps), OATs (-1.7bps) and BTPs (-2.7bps).

Admittedly, European assets were supported by signs of progress on the Ukraine negotiations, and the impact was clear in assets sensitive to the conflict. In addition to the decline in oil, the 10yr yield on Ukraine’s dollar bond (-28.4bps) fell back to 13.77%, its lowest level since March, whilst the STOXX Aerospace & Defense index (-1.79%) underperformed. Yet despite hopes for a ceasefire in the coming months, that still wasn’t enough to outweigh the broader negativity for European equities from the US jobs report and the weaker PMIs.

One exception to that pattern came in the UK, where gilts struggled after yesterday’s data leant in a hawkish direction. For instance, wage growth was up by +4.7% in the three months to October (vs. +4.4% expected), and the flash composite PMI also moved up to 52.1 in December (vs. 51.5 expected). So collectively, that suggested inflationary pressures might be stronger than thought, and 10yr gilt yields (+2.3bps) moved back up to 4.52%. Remember as well that we’ll get the UK CPI print for November shortly after this goes to press, so the focus will be on whether that continues its downward trajectory. Then the BoE meeting tomorrow.  

This morning, Asian equity markets are stabilising, led by the KOSPI, which is up +0.95%. The Hang Seng (+0.22%) and the Nikkei (+0.15%) are also higher. In mainland China, both the CSI (+0.58%) and the Shanghai Composite (+0.18%) are also trading in positive territory, fueled by expectations of additional fiscal stimulus from Beijing, especially in the wake of several weaker-than-expected economic indicators for November. In contrast, the S&P/ASX 200 in Australia is bucking this regional trend, currently down -0.16%. US equity futures are down a tenth.  

In Japan, exports in November recorded their fastest growth in nine months this year, increasing by an impressive 6.1% y/y. This significantly surpassed market expectations of a +5.0% rise and was also a marked improvement from the 3.6% increase observed in the preceding month. This strong export performance was underpinned by a +3.6% increase in goods shipped to Western Europe and an +8.8% surge in exports to the United States, Japan's second-largest trading partner. Notably, this marks the first time that exports from Japan to the US have increased since March. Concurrently, imports into Japan rose by +1.3% in November, which was below the anticipated +2.5% increase. As a result, Japan's trade balance for November amounted to a surplus of 322.3 billion yen, far exceeding the projected 72.6 billion yen surplus and representing a significant turnaround from the 226.1 billion yen deficit recorded in the prior month.

Elsewhere yesterday, we had a few other data releases, including the delayed US retail sales for October. They were unchanged (vs. +0.1% expected), but the measure excluding autos and gas stations was up +0.5% (vs. +0.4% expected), and retail control, which feeds into GDP, was up +0.8%, much higher than the +0.4% expected. Meanwhile in Germany, the expectations component of the ZEW survey moved up to a 5-month high of 45.8 (vs. 38.4 expected), although the current situation fell back to a 7-month low of -81.0 (vs. -80.0 expected).

Tyler Durden Wed, 12/17/2025 - 08:11

Capital-Hungry OpenAI Discussing $10 Billion Investment From Amazon

Capital-Hungry OpenAI Discussing $10 Billion Investment From Amazon

Amazon is in talks with ChatGPT-maker OpenAI to invest more than $10 billion, The Information reported, citing multiple people familiar with the discussions. The proposed round would value OpenAI at half a trillion dollars, underlining just how capital-hungry Sam Altman’s chatbot company has become, as it expects to burn through more than $100 billion over the next four years.

The Amazon investment would help OpenAI fund large-scale cloud-computing commitments and potentially broaden Amazon’s role in the AI sphere.

Here's more from the report:

OpenAI last month announced it would spend $38 billion renting servers from AWS over the next seven years, making AWS one of at least five cloud providers OpenAI uses to develop its artificial intelligence.

The deal could also help Amazon find a new customer for its Trainium AI server chips, which compete with the Nvidia AI chips that OpenAI primarily uses today. As part of the deal under discussion, OpenAI plans to use Trainium chips, two people said.

Amazon has discussed potential commercial partnerships, including OpenAI’s plan to turn ChatGPT into a shopping and referral platform and to sell an enterprise version of ChatGPT to Amazon. However, that remains unclear because Amazon will not be able to sell OpenAI models to its cloud customers, as Microsoft, which owns about 27% of OpenAI equity, has secured an exclusive right to do so.

The people noted that Amazon financing could prompt additional fundraising rounds with more investors for the capital-hungry chatbot company, which is expected to burn more than $100 billion over the next four years.  

OpenAI told investors months ago that its 2027 fundraising target is $90 billion, earmarked for investments in talent, servers, and data centers. 

The Information noted, "That could theoretically include an initial public offering." 

Ahead of the new year, spending commitments for Altman's company have been piling up. OpenAI plans to spend hundreds of billions of dollars on Microsoft and Oracle - something we have described as "circular." It also struck deals to rent servers from Google, a major rival in developing AI, and AI cloud provider CoreWeave.

Let's see how the circular part looks on paper: 

OpenAI has also said it will invest billions in developing its own data centers and may rent servers from other companies.

The Information noted, "For Amazon, an OpenAI deal would mirror Microsoft's approach, its fiercest cloud-services rival. After Microsoft made large equity investments in OpenAI, it recently announced an investment in rival AI developer Anthropic and agreed to use that company’s AI."

Tyler Durden Wed, 12/17/2025 - 07:45

Euroclear: The Line Europe Can't Cross Without Breaking Global Trust

Euroclear: The Line Europe Can't Cross Without Breaking Global Trust

Submitted by Thomas Kolbe

Euroclear and the Looming Breach of Trust

The alliance financing the war in Ukraine is facing a new problem. Seven members of the European Union want to block the expropriation of the Russian central bank assets held at Euroclear. This puts the continuation of war financing at risk. At the same time, the specter of a financial crisis looms—one that would once again leave taxpayers footing the bill.

The negotiation marathon between representatives of Ukraine, the EU and the United Kingdom, with a US delegation acting as mediator, continues in Berlin. As usual, it is accompanied by familiar phrases about “progress” on the road to peace and assurances that roughly 90 percent of the target has already been reached.

How much weight this interim result actually deserves will become clear in the coming days. Expect a frantic ramp-up of the propaganda machine, drones over airports (and over Wolfram Weimer’s residence), and growing pressure on US President Donald Trump. The militarily precarious situation of Ukraine’s armed forces is now colliding with an almost equally dramatic financial situation among Kyiv’s creditors.

Everything points to mounting pressure to cut the Gordian knot—sooner rather than later—as war costs on both sides threaten to spiral out of control.

This brings the latest developments in the debate over the expropriation of the Russian central bank and its assets parked at Euroclear back into sharp focus.

A Critical Demarcation Line

Euroclear could turn into a personal Waterloo for EU Commission President Ursula von der Leyen. She is working at full throttle to convert the current crisis into a massive expansion of power for Brussels—and thus for her Commission.

Hungary, Slovakia and Belgium—already outspoken critics of expropriating Russian assets—are now joined by Italy, Bulgaria, Malta and Cyprus. Resistance to Brussels’ escalation push is growing by the day.

Notably, this resistance coincides with a clear shift in timing. Since the United States effectively withdrew from financing Ukraine, Europe’s financial reality has come into view without cosmetic filters. Without access to roughly €210 billion in Russian assets—about €25 billion of which are spread across various EU states—continued financing of this war of attrition appears barely feasible.

All major creditors—Germany, France and the United Kingdom—have long overstretched their budgets and are running new debt levels between four and six percent. The Ukraine project is on the brink of fiscal collapse.

The Illusion of Expropriation as a Lifeline

What is being attempted is as simple as it is dangerous. These assets—partly government bonds, partly matured bond holdings in foreign currencies—are to be used as collateral for further loans. Europe is already trapped in a debt spiral and is tapping every remaining source of funding. Even the enemy is no longer off-limits for the London-Brussels tandem.

Observers with a sensitivity for political phraseology and grandiosity understood as early as April 2022 what was unfolding: in a state of euphoric overconfidence, decision-makers catastrophically miscalculated and constructed a scenario in which a defeated Russia would be forced to pay for the entire war. This would have allowed Europe to neatly extract its own banks—deeply entangled in Ukraine’s financing—from the equation.

History offers a familiar pattern: bankers and politicians working hand in hand, this time in Kyiv. Many were already anticipating the day of Putin’s submission, followed by regime change in Moscow and the launch of large-scale extraction of Russia’s immense raw-material wealth. Europe’s banking system would have been recapitalized to the rooftops, and the energy problem solved once and for all.

That calculation has clearly failed. Instead, the taxpayer will bear the losses.

Ukraine as a Systemic Risk

Without credit guarantees, Ukraine would already be insolvent. A disorderly collapse of the state would hit the European banking system like a nuclear detonation. There is no realistic way around the public sector eventually absorbing these massive loan liabilities.

This inevitably brings the debate over expanding Eurobonds—formally prohibited under EU law—back to center stage, potentially reintroduced outright as European war bonds.

With the “NextGenerationEU” program, this supposedly forbidden practice has already become de facto reality. Brussels has raised €800 billion on capital markets through this mechanism. These funds fuel the EU’s bloated subsidy machine and are now structurally embedded in its power architecture, always backstopped by the ECB.

Brussels is already acting as a sovereign bond issuer in its own right, further increasing member states’ liability exposure and debt levels. Europe has maneuvered itself into both a geopolitical and financial dead end—an outcome that has been foreseeable for years.

Euroclear and the Looming Breach of Trust

The chronic reality denial and embedded incompetence of EU and UK political leadership defy rational explanation. All the more notable is the emerging resistance around Euroclear—even as Brussels searches for ways to force the decision through by simple majority if necessary.

There is reason for cautious optimism that countries like Italy understand what expropriating Russian central bank assets at Euroclear would mean for the eurozone’s financial stability. Italian Prime Minister Giorgia Meloni’s initiative to discreetly safeguard Italy’s central-bank gold against potential ECB access underscores that Rome knows exactly what is at stake. Italy would be well positioned for a potential reboot of a sovereign currency.

The damage caused by expropriating Russian assets would be maximal: a financial super-GAU, a total loss of credibility and of the merchant-law principles indispensable to banking and international transactions. The entire global financial system—transaction settlement and custodial asset holding—rests on trust: on the absolute stability of its core pillars.

Institutions like Euroclear are among those pillars. They do not merely safeguard international transaction flows—they make them possible in the first place. Once this foundation is damaged, far more than a political signal is at risk. The stability of the entire system is on the line.

Tyler Durden Wed, 12/17/2025 - 07:20

"Buy Nicotine, Energy Drink, Candy Stocks": Goldman Tells Clients Get Ready For Party In USA 

"Buy Nicotine, Energy Drink, Candy Stocks": Goldman Tells Clients Get Ready For Party In USA 

Bonnie Herzog, managing director and senior consumer analyst at Goldman Sachs, told clients Tuesday that, after consumer staples' underperformance in 2025, it is time to buy nicotine, energy drink, candy, and beauty stocks heading into 2026 as a stronger consumer backdrop emerges.

Herzog wrote:

Our View -- 2025 has been another year of underperformance by Consumer Staples with all but Nicotine stocks lagging the market as concerns around the health of the US consumer (owing to macro uncertainty, geopolitical tensions, tariffs, layoffs, etc.) which weighed on consumption trends and drove value-seeking behavior amongst consumers during the year.

Heading into 2026, we expect a more constructive US consumer backdrop (esp. middle-income cohorts) given a pickup in real income growth (aided by job growth, tax cuts, and fading tariff-related inflation) to support a discretionary over defensive approach, which will likely weigh on Staples' performance again next year. Irrespective of Staples' trajectory, we see an encouraging backdrop for stock picking in 2026. We continue to encourage investors to put new money to work in stocks with exposure to categories with attractive and profitable growth that should outpace broader Staples such as energy drinks, nicotine, candy, and beauty.

Herzog even noted that next year could be considered "the year of beer stocks":

Furthermore, we believe 2026 could be the year of beer stocks as we expect headwinds to abate and see a few tailwinds such as the lapping of easy comps, better weather (we hope), and increased consumption occasions given a trifecta of events next year including the FIFA World Cup, the Olympics, and the 250th anniversary of the US, which we believe should support greater beer consumption in the year.

Amid the growing specter of a "K-shaped" economy, core retail sales growth was strong in October. Whether that strength reflects inflation or real economic growth, the consumer is holding up in aggregate. With tailwinds expected to emerge in the economy early next year, as Treasury Secretary Scott Bessent recently outlined, Herzog's bullish call to buy nicotine, energy drink, candy, and beauty stocks appears to reflect that improving backdrop.

Here is Herzog's bull call (summary):

  • Market share gainers and strong topline performers: Philip Morris International and Monster Beverage

  • Where bearishness appears overdone: PepsiCo, e.l.f. Beauty, Celsius Holdings, Hershey, and Sprouts Farmers Market

  • Beer recovery beneficiaries: Constellation Brands and Molson Coors

  • Growth-advantaged emerging market exposure: Philip Morris International, Mondelez International, and Colgate-Palmolive

  • Easing cost pressure beneficiary: Hershey

  • GLP-1 and better-for-you positioning: Sprouts Farmers Market

Is next year going to be like .... ?

For the full note and a much more granular breakdown of this bull case, ZeroHedge Pro subscribers can read it in the usual place.

Tyler Durden Wed, 12/17/2025 - 06:55

US, Mexico Reach Agreement To Fix Tijuana River Sewage Crisis: EPA

US, Mexico Reach Agreement To Fix Tijuana River Sewage Crisis: EPA

Authored by Melanie Sun via The Epoch Times (emphasis ours),

The Trump administration has signed a new binational agreement with Mexico, advancing efforts to solve a decades-long sewage crisis plaguing residents both north and south of the transnational Tijuana River.

Trash lines the beaches near the Tijuana River mouth outside of San Diego, Calif., on Sept. 19, 2024. John Fredricks/The Epoch Times

The U.S. Environmental Protection Agency (EPA) said on Dec. 15 that the United States and Mexico have signed a “historic new agreement” called Minute 333. The binational agreement saw both nations agree to additional actions that the EPA said will “progress to permanently and urgently end the decades-long Tijuana River sewage crisis.”

The majority of the 120-mile Tijuana River lies south of the U.S.–Mexico border in the Mexican state of Baja California. Only the last five miles are on the U.S. side of the border, flowing to San Diego and emptying into the Pacific Ocean. The San Diego City Council first declared a state of emergency because of the pollution—ranging from raw sewage to industrial runoff—in 1993.

A list of actions outlined in the new agreement includes Mexico developing a water infrastructure plan for Tijuana within six months, creating plans to ensure the proper operation and maintenance of critical systems, and determining the feasibility of a new ocean outfall for the San Antonio de los Buenos Wastewater Treatment Plant, as well as expanding the plant’s capacity by at least 25 million gallons per day (MGD).

The plant is currently operational after being shut down due to long-term disrepair from 2015 until early 2025. It currently has a capacity of 18 MGD, or about 800 liters per second, but receives 40–45 MGD, leading to sewage overflows, according to the EPA.

All plans are to account for future population growth in Tijuana, a key component that was missing from previous agreements made prior to the Trump administration being in office, the EPA said.

Other actions include Mexico’s agreement to construct a sediment basin near the international boundary at Matadero Canyon, also known as Smuggler’s Gulch, before the 2026–2027 rainy season, and a Tecolote-La Gloria Wastewater Treatment Plant in Tijuana, which is 5 miles south of the U.S.–Mexico border, by December 2028. The plant will have a capacity of 3 MGD and treat wastewater that is currently flowing untreated into the Pacific Ocean in Mexico, causing pollution issues on both sides of the border.

Across the region, deterioration of Tijuana’s water treatment infrastructure, compounded by the city’s fast-growing population, has created a health crisis in recent years. In 2015, Mexico’s San Antonio de los Buenos Wastewater Treatment Facility broke down, which led to the daily release of millions of gallons of untreated sewage, trash, and industrial waste into the Tijuana River.

Residents around San Diego have faced major water quality and public health concerns, with the transboundary pollution from Mexico causing the release of noxious gases such as hydrogen sulfide and hydrogen cyanide from the Tijuana River. Residents in affected communities were advised to use air purifiers and filters.

Trash builds up along the Tijuana River outside of San Diego, Calif., on Sept. 19, 2024. John Fredricks/The Epoch Times

San Diego’s beaches have been closed, and even Naval in-water training has been suspended due to dangerously high concentrations of bacteria from the river entering the Pacific Ocean.

“Through this agreement, a set of technical, financial, and governance actions is established to carry out concrete sanitation works in Tijuana, including new treatment infrastructure and sediment control, which will have a positive impact on public health, the environment, and the beaches of Tijuana and San Diego,” Mexico’s Ministry of Foreign Affairs said in a statement.

“It should be noted that the United States will assume shared financial responsibility, through the North American Development Bank (NADB), to ensure the operation and maintenance of the infrastructure on the Mexican side and to prevent its deterioration over time.”

According to the EPA, Minute 333 does not obligate “any additional U.S. taxpayer funding, including for Mexican-side projects.” U.S. funds to the NADB for the Border Water Infrastructure Program are appropriated by Congress every year, and are contingent on confirmation that Mexico’s projects—as outlined in the minutes—are on schedule to complete construction.

Water flows along the Tijuana River outside of San Diego, Calif., on Sept. 19, 2024. John Fredricks/The Epoch Times

EPA Administrator Lee Zeldin said that Minute 333 sets the “framework for tremendous steps to be made” and that his agency looks forward to “very quickly hitting the ground running to implement the mutually agreed upon actions.”

“I saw the frustration of San Diego area residents firsthand when I visited in April,” he said. “I promised them a 100 percent solution to this issue, and the Trump EPA is doing its part to deliver.”

Minute 333 builds on a memorandum of understanding (MOU) signed by Zeldin and Mexican Environment Minister Alicia Bárcena in July, in which Mexico agreed to expedite the expenditure of $93 million worth of improvements to the Tijuana sewage system and commit to several projects to account for future population growth and maintenance.

It codifies all actions listed in Section 4 of the MOU, which were “specifically designed to account for future population growth in Tijuana and the broader region,” the EPA said.

Tyler Durden Wed, 12/17/2025 - 06:30

Iran's Economy Struggles Amid High Inflation

Iran's Economy Struggles Amid High Inflation

Since early December 2025, a wave of protests has swept across Iran, ranging from human rights campaigns in major urban areas to labor strikes in industrial hubs.

As Statista's Tristan Gaudiat reports, part of the growing popular unrest concerns the accelerating use of the death penalty by the Iranian regime (more than 1,000 executions documented so far in 2025), while the country's economic situation has significantly deteriorated.

Iran is currently facing one of its most severe economic and social crises of the decade, as the country grapples with near-zero GDP growth, soaring inflation and escalating social and geopolitical tensions.

According to the IMF's latest projection (October 2025), Iran’s real GDP is expected to grow by just 0.6 percent in 2025, a sharp decline from previous years (+3.7 percent in 2024, +5.3 percent in 2023).

Inflation, meanwhile, is forecast to surge to 43.3 percent, one of the highest rates in the world, as the national currency (rial) continues its dramatic depreciation.

Iran's Economy Struggles Amid High Inflation | Statista

You will find more infographics at Statista
 

This grim outlook underscores the depth of Iran’s economic issues, driven by a combination of chronic mismanagement, systemic corruption and the impact of international sanctions.

The escalation of the conflict with Israel and the United States this year has further deteriorated the situation.

After a brief but intense war in June 2025, causing billions of dollars in damage in Iran, the United States imposed additional sanctions, targeting Iran’s oil, banking and shipping sectors.

The reimposition of the United Nations' “snapback” sanctions in late 2025 has also added to the pressure.

Tyler Durden Wed, 12/17/2025 - 04:15

The Folly Of Establishing A US Military Base In Damascus

The Folly Of Establishing A US Military Base In Damascus

Authored by José Niño via The Libertarian Institute

Recent reports indicate the United States is preparing to establish a military presence at an airbase in Damascus, allegedly to facilitate a security agreement between Syria and Israel. This development represents yet another misguided expansion of American military overreach in a region where Washington has already caused tremendous damage through decades of failed interventionist policies.

The United States currently operates approximately 750 to 877 military installations across roughly eighty countries worldwide. This staggering number represents about 70 to 85% of all foreign military bases globally. To put this in perspective, the next eighteen countries with foreign bases combined maintain only 370 installations total. Russia has just twenty-nine foreign bases, and China operates merely six. The American empire of bases already dwarfs every other nation combined, and the financial burden is crushing. Washington spends approximately $65 billion annually just to build and maintain these overseas installations, with total spending on foreign bases and personnel reaching over $94 billion per year.

These figures are not abstract accounting entries. They translate directly into American lives placed in volatile environments, as demonstrated by the recent insider attack in the ancient Syrian city of Palmyra, where a purported "ISIS infiltrator" embedded in local government security forces turned his weapon on a joint U.S. Syrian patrol, killing two U.S. soldiers and one U.S. civilian during what was described as a routine field tour. The incident underscores how the sprawling U.S. basing network increasingly exposes American personnel to unpredictable and lethal blowback in unstable theaters far from home.

Syria itself already hosts between 1,500 and 2,000 American troops, primarily concentrated in the northeastern Hasakah province and at the Al Tanf base in the Syrian Desert. The Pentagon recently announced plans to reduce this presence to fewer than 1,000 personnel and consolidated operations from eight installations to just three. Yet now, despite this supposed drawdown, Washington reportedly plans to establish a new presence in Damascus itself, either at Mezzeh Air Base or Al Seen Military Airport. This contradictory expansion reveals the hollow nature of promises to reduce American military commitments abroad.

Since the fall of Bashar al Assad in December 2024, Israel has conducted hundreds of airstrikes on Syrian military and civilian infrastructure while occupying parts of southern Syria including Quneitra and Daraa. Israel has systematically violated the 1974 disengagement agreement and expanded control over buffer zones. These actions align disturbingly well with the Yinon Plan, a 1982 Israeli strategic document by Israeli foreign policy official Oded Yinon that envisions the dissolution of surrounding Arab states into smaller ethnic and religious entities. The plan explicitly calls for fragmenting Syria along its ethnic and religious lines to prevent a strong centralized government that could challenge Israeli interests.

A permanent American military presence in Damascus would effectively serve as a tripwire guaranteeing continued U.S. involvement in securing Israeli strategic objectives in the Levant. Rather than protecting American interests or enhancing national security, such a base would entrench Washington deeper into regional conflicts that have consistently proven disastrous for both American taxpayers and Middle Eastern populations.

The human cost of American intervention in Syria should give any policymaker pause. The Syrian proxy war has resulted in between 617,000 and 656,000 deaths, including civilians, rebels, and government forces. More than 7.4 million people remain internally displaced within Syria, while approximately 6.3 million Syrian refugees live abroad. This catastrophic toll stems partly from Operation Timber Sycamore, the CIA covert program that ran from 2012 to 2017 to train and equip Syrian rebel forces.

Timber Sycamore represented a joint effort involving American intelligence services along with Saudi Arabia, Jordan, Qatar, Turkey, and the United Kingdom. The CIA ran secret training camps in Jordan and Turkey, providing rebels with small arms, ammunition, trucks, and eventually advanced weaponry like BGM 71 TOW anti-tank missiles. Saudi Arabia provided significant funding while the United States supplied training and logistical support.

The program proved to be counterproductive. Jordanian intelligence officers stole and sold millions of dollars worth of weapons intended for rebels on the black market. Even worse, U.S.-supplied weapons regularly fell into the hands of the al Nusra Front, al-Qaeda’s Syrian affiliate, and ISIS itself. The program strengthened the very extremists Washington was ostensibly fighting.

The failure of Timber Sycamore illustrates a fundamental problem with American interventionism in Syria. Washington has pursued regime change in Damascus in various forms for decades, yet these efforts have consistently backfired, creating power vacuums filled by jihadist groups and prolonging devastating conflicts. The current enthusiasm for establishing a military presence in Damascus suggests American policymakers have learned absolutely nothing from these failures.

The figure now leading Syria exemplifies the moral bankruptcy of this entire enterprise. Ahmed al Sharaa, better known by his nom de guerre Abu Mohammad al Julani, currently serves as president of Syria’s interim government. This represents a stunning rehabilitation for a man who founded al Nusra Front in 2012 as an al-Qaeda affiliate and later formed Hayat Tahrir al Sham (HTS) by merging various rebel factions. Under the name Abu Mohammad al Julani, he was designated a Specially Designated Global Terrorist by the United States on July 24, 2013, with a $10 million bounty maintained on his head.

Al Sharaa’s terrorist designation stemmed from his leadership of al Nusra Front, which perpetrated numerous war crimes including suicide bombings, forced conversions, ethnic cleansing, and sectarian massacres against Christian, Alawite, Shia, and Druze minorities. He fought with al-Qaeda in Iraq, spent time imprisoned at Camp Bucca between 2006 and 2010, and was dispatched to Syria by Abu Bakr al Baghdadi in 2011 with $50,000 to establish al Nusra. His close associates have faced accusations from the United States of overseeing torture, kidnappings, trafficking, ransom schemes, and displacing residents to seize property. The New York Times reported that his group was accused of initially operating under al-Qaeda’s umbrella.

Yet in November 2025, the United Nations Security Council adopted resolution 2799, removing al Sharaa and Interior Minister Anas Khattab from the ISIL and al-Qaeda sanctions list. The U.S. Treasury Department followed suit, delisting him from the Specially Designated Global Terrorist registry. This reversal came after the State Department revoked HTS’s Foreign Terrorist Organization designation in July 2025. Washington essentially decided that a former al-Qaeda commander who oversaw sectarian massacres was now a legitimate partner worthy of American military support. This absurd rehabilitation demonstrates how completely untethered American foreign policy has become from any coherent moral framework or strategic logic.

Critics rightly question whether al Sharaa has truly broken from his extremist roots or merely engaged in calculated political rebranding. The speed with which Washington embraced him as a legitimate leader suggests American policymakers care far more about advancing Israeli interests and maintaining regional influence than about genuine counterterrorism or protecting religious minorities.

The United States needs to pursue a fundamentally different approach to foreign policy. Rather than establishing yet another military base to advance Israeli strategic objectives in Syria, Washington should implement a comprehensive drawdown of overseas military commitments. The hundreds of foreign bases it maintains abroad represent an unsustainable burden that diverts resources from genuine national security priorities like border security and stability in the Western Hemisphere. American taxpayers deserve better than footing the bill for an empire that consistently fails to advance their interests while enriching defense contractors and serving foreign powers.

Syria offers a perfect case study in the futility of American interventionism. Decades of attempts at regime change through covert programs like Timber Sycamore and direct military presence have produced nothing but chaos, empowered jihadist groups, created millions of refugees, and cost hundreds of thousands of lives. The rehabilitation of a former al-Qaeda commander into Syria’s president illustrates how divorced American policy has become from any coherent strategy or values.

Rather than doubling down on failed policies, the United States should pursue strategic restraint, scale back its sprawling network of foreign bases, and allow regional powers to sort out their own affairs without American military involvement. That represents the path toward a more sustainable, affordable, and morally defensible foreign policy. The Damascus base proposal deserves to be rejected outright as yet another wasteful expansion of an already overextended military empire.

Tyler Durden Wed, 12/17/2025 - 03:30

Europe Establishes Hague-Based Reparations Commission For Ukraine

Europe Establishes Hague-Based Reparations Commission For Ukraine

Top European officials met on Tuesday in The Hague in order to establish an international commission to oversee eventual reparations to compensate Ukraine for Russia's military invasion. President Volodymyr Zelensky and EU foreign policy chief Kaja Kallas were present for the high level talks in The Netherlands.

The International Claims Commission for Ukraine will assess and decide on claims for reparations, and will determine and discharge any amount to be paid out. This is likely to see hundreds of billions of dollars eventually flow to Ukraine for the sake of rebuilding and keeping the civic services sector afloat after nearly four years of war.

via European Union

The treaty to establish the commission has been signed by 35 countries at Tuesday's conference. It also has the involvement of Strasbourg-based Council of Europe, which is a 46-nation group protecting human rights on the continent. The new commission is going to be based in The Hague.

Zelensky welcomed the newly established mechanism, declaring that Russia "paying for its crimes" was "exactly where the real path to peace begins." He added: "This war and Russia’s responsibility for it must become a clear example so that others learn not to choose aggression," and followed with, "We must make Russia accept that there are rules in the world."

Dutch Foreign Minister David van Weel agreed, explaining that "Without accountability, a conflict cannot be fully resolved. And part of that accountability is also paying damages that have been done."

All this comes as EU leadership is trying to push through a scheme not just to permanently freeze Russian assets held chiefly in Belgium, but to use the funds for Ukraine's long-term defense and reconstruction.

But Russia’s Central Bank has this week filed a lawsuit seeking 18.2 trillion rubles ($229 billion) in damages from Belgium-based Euroclear, which is meant as a loud shot across Brussels' bow.

The EU's Kallas has lately admitted that the issue of using Russian frozen assets had become "increasingly difficult" ahead of a summit of European leaders which is set for Thursday. The EU is seeking to bypass obvious objectors such as Hungary, and is seeking legal loopholes which would allow a plan to pass based on simple majority vote among EU members.

The World Bank has estimated the cost of reconstruction due to the war, only figuring in numbers up to December 2024, at $524 billion.

Tyler Durden Wed, 12/17/2025 - 02:45

The Military Story Ken Burns Missed In The Revolution

The Military Story Ken Burns Missed In The Revolution

Authored by David Stewart via RealClearDefense,

Ken Burns’ documentary on the American Revolution has generated much commentary, some supportive and some critical. Across social media, complaints abound that he paid too much, or too little, attention to the traditional Founding Fathers—Washington, Hamilton, Monroe, Jefferson. Critics pillory him for overemphasizing one specific type of history—military, political, economic, or social—while minimizing or ignoring the other types. In nearly every interview, Ken Burns repeatedly asserts that he sought to complicate the traditional narrative about the Revolution, to insert more nuance into the conversation, and these various criticisms from across the ideological spectrum might seem to suggest he has done so.

The major flaw in the documentary, however, is not that he presented the Founders in the wrong light nor that he complicated the traditional story. Rather, in his attempt to invoke a more nuanced narrative, Burns in fact obscured the most important elements of that narrative.

Some conservative commentators object, for example, to the documentary discussing Major-General Horatio Gates’ actions after the Battle of Camden. In August 1780, Gates’ 4.000-man American army suffered a crushing defeat at the hands of Lieutenant-General Cornwallis’ 2.000 British in the South Carolina midlands. In the waning moments of the battle, Gates abandoned his army, riding almost 200 miles before stopping near Durham, North Carolina. Does this make Gates look bad? Yes; deservedly so. Is it the whole story, or even the most important element? Not at all.

Congress quickly replaced Gates, appointing Major-General Nathanael Greene to command the Southern Department. He inherited a remnant army of fewer than 2.000 soldiers—isolated, defeated, and out of supply. Over the next several months, Greene doubled the size of his army as he slowly withdrew northward, drawing Cornwallis after him. As they moved north, the Americans fought a series of skirmishes and battles, losing almost every encounter—a process of strategic retreats Greene famously summarized as “we get beat, rise, and fight again.” But in this series of defeats, the Americans drew Cornwallis far beyond his supply lines, leading him to abandon the Carolinas completely and to march on Yorktown.

Notably, Greene had far more men in his army by the Fall of 1781 than he had inherited a year earlier. This strongly suggests some important values drove those American soldiers, that they fought for more than money. They did not endure a year of hard marching, a string of tactical defeats, constant food shortages, chronic undersupply, and hundreds of casualties in the hope that this feeble army or a fragile government would someday reward them with land or cash. Those men believed in some higher cause, fought for principles. This is the story Burns’ documentary should emphasize—the context that frames Gates’ cowardice.

The soldiers at Valley Forge spoke a variety of languages—that’s interesting. But why did they suffer through that winter? Why did men dive repeatedly into a frozen Hudson River in January 1776? Why did soldiers volunteer to lead a forlorn hope at Stony Point? Why did three hundred Maryland riflemen choose to die rather than retreat during as the American army crumbled in the Battle of Brooklyn? We can all easily understand why men lie, embezzle, flee, or compromise their principles. It is heroism and self-sacrifice that demand explanation, and Burns’ documentary deserves criticism for failing to explain the extraordinary.

As a trained military historian, I’ve limited my comments to military history. Other scholars, far more qualified than I, have suggested similar reservations about the documentary’s discussions of Native Americans, Blacks, women, political thought, and economic history.

Ken Burns did not make General Gates look bad—Gates did that himself. My objection is that Burns, rather than nuancing or complicating the story of the Revolution, simply marginalized one set of much-discussed actors and substituted a new set, and thereby missed the real story.

David Stewart is a professor of history at Hillsdale College and a founding faculty member of the college’s Center for Military History and Grand Strategy.

Tyler Durden Tue, 12/16/2025 - 23:25

Hegseth Planning Massive Overhaul Of US Commands, Fewer Generals, Smaller Presence In Europe

Hegseth Planning Massive Overhaul Of US Commands, Fewer Generals, Smaller Presence In Europe

More major Pentagon reshuffling is coming down the line, driven by Secretary of War Pete Hegseth, but this time it's being reported this will involve far more than just staffing and personnel changes - it will impact the entire US global command and headquarters structure.

Washington Post reports this week that the Pentagon is drafting a sweeping overhaul of American military command structures that would downgrade several major headquarters and reshape the balance of influence among senior generals.

via Associated Press

The plan is reportedly being driven in large part by Hegseth’s pledge to "break the status quo" and reduce the number of four-star generals across the armed forces, sources quoted in WaPo say. He's also long been talking about purging the 'woke agenda' from within military ranks.

The restructuring would diminish the standing of US Central Command, US European Command, and US Africa Command by bringing these theatres under a newly created entity called US International Command.

Also of note will be the creation of an "Americom," according to the report. Currently it is US Southern Command and US Northern Command which are responsible for military operations across the Western Hemisphere, but now these will be placed under the US Americas Command.

"To ensure that America remains the world's strongest, richest, most powerful, and most successful country for decades to come, our country needs a coherent, focused strategy for how we interact with the world … The US must be preeminent in the Western Hemisphere as a condition of our security and prosperity," the strategy says, based on the report. 

According to another interesting note in the WaPo report:

"Pentagon officials also discussed creating a US Arctic Command that would report to Americom, but that idea appears to have been abandoned."

This comes on the heels of the recently published new National Security Strategy issued by the White House.

Within the 33-page national security document is the laying out of a "Trump Corollary" to the Monroe Doctrine: "The United States must be preeminent in the Western Hemisphere as a condition of our security and prosperity — a condition that allows us to assert ourselves confidently where and when we need to in the region," the document states.

"The terms of our alliances, and the terms upon which we provide any kind of aid, must be contingent on winding down adversarial outside influence — from control of military installations, ports, and key infrastructure to the purchase of strategic assets broadly defined," it adds.

One thing the potential revamping of conventional global command sectors does is to provide a more centralized structure under Pentagon top leadership, and it seems this is what Hegseth is aiming for.

Tyler Durden Tue, 12/16/2025 - 23:00

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