Supreme Court Will Hear Trump Birthright Citizenship Case

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

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

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

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

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

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

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

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

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

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

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

No oral argument in the case has yet been scheduled.

This developing story will be updated.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Debating the Wealth Tax

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Southwest revealed in a new SEC filing:

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

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

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

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

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

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

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

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

Noem Says US Travel Ban To Expand To Over 30 Countries

Authored by Aldgra Fredly via The Epoch Times,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Part of a Broader Corporate Retreat

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

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

Disney Softens DEI Language Amid FCC Probe

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

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

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

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

Why Netflix Buying Warner Bros Would Be A Disaster For America

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

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

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

Here's a snapshot of the deal terms:

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

• Boards of both companies unanimously approved the transaction

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

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

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

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

The former WBD CEO summed things up succinctly:

If I was tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix

— Jason Kilar (@jasonkilar) December 4, 2025

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So those are the politics.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jobs Data From Alternative Sources May Drive Feds Next Move

Authored by Lance Roberts via Real Investment Advice,

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

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

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

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

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

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

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

The Fed Must Weigh Jobs Data Against Inflation Risks

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

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

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

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

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

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

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

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

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

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

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

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

What the Fed Will Likely Do Next

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

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

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

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

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

How Investors Should Prepare

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

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

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

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

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

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

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

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

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

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

Iranian military file image

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

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

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

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

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

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

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

Iran’s Revolutionary Guards Navy fired ballistic and cruise missiles at simulated targets in the Gulf during a two-day exercise meant to counter foreign threats.

The drills included mass launches of Qadr-series cruise and ballistic missiles, along with drone strikes on mock… pic.twitter.com/fUWN5d1tHp

— Clash Report (@clashreport) December 5, 2025

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

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

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

Via Headline USA,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Bloomberg

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

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

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

Source: Bloomberg

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

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

Source: Bloomberg

Independents saw long-term inflation expectations plunge...

Source: UMich

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

Source: Bloomberg

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

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

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

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

But, no bias, right?

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

Peace In Our Time? Don't Count On It

By Benjamin Picton, Senior Market Strategist at Rabobank

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Bloomberg

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

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

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

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

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

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

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

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

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

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

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

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

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

Via Remix News,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Read more here...

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

5x Leverage Is Too Much Says The SEC

Wall Street’s financial engineers thought they had found yet another way to turn financial markets into casinos.

The gimmick this time is with 3x, 4x, and even 5x leveraged ETFs tied to individual stocks and cryptocurrencies.

But, as RealInvestmentAdvice.com reports, the SEC just ruled against these new proposals, apparently drawing the line at 2x leverage as the rules state.

“We write to express concern regarding the registration of ETFs that seek to provide more than 200% (2x) leveraged exposure to underlying indices or securities”

Nine issuers filed with the SEC for 3x, 4x, and 5x ETFs, betting that the new leadership at the SEC would be more open to speculation and be willing to ignore the significant risk entailed in these securities.

Their strategy hinged on gaming the SEC’s derivatives rule - Rule 18f-4 - by changing how “risk” is measured.

Under Rule 18f-4, a leveraged or inverse ETF must run a Value-at-Risk test using the actual asset it tracks as its benchmark.

For example, if your proposed 5x ETF is based on Apple’s stock price, the risk test is anchored to Apple’s stock price.

Once you apply an apples-to-apples, no pun intended, analysis, 5x and other ETFs levered more than 2x fail the SEC test.

The issuers tried to redefine the “designated reference portfolio” (benchmark) to an asset that is less risky than the actual underlying asset.

Doing so effectively lowers the apparent risk, thus, using their logic, allowing 3x, 4x, and even 5x leverage.

The SEC’s latest comment letter shut that door. They didn’t mince words in their ruling:

Did we just reach 'peak speculation'?

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

Border Encounters Drop To Record Low In November: CBP

Authored by Kimberley Hayek via The Epoch Times,

U.S. Customs and Border Protection (CBP) reported another drop in border encounters for November, extending a streak of dips under President Donald Trump’s administration, according to preliminary data released in a statement Thursday.

The agency recorded 30,367 total encounters nationwide last month, down from October’s 30,573. The two months combined mark the lowest opening to a fiscal year on record, with 60,940 encounters throughout October and November, the statement said.

CBP maintained its streak of zero releases of apprehended individuals into the United States for the seventh straight month, processing them all according to law.

“Once again, we have a record low number of encounters at the border and the seventh straight month of zero releases. Month after month, we are delivering results that were once thought impossible: the most secure border in history and unmatched enforcement successes,” Secretary of Homeland Security Kristi Noem said in the statement.

Noem added that U.S. borders are “safer than ever.”

CBP Commissioner Rodney Scott said the agency will not be slowing down.

“These numbers reflect the tireless efforts of our agents and officers who are delivering results that redefine border security,” he said.

Border Patrol apprehensions averaged under 10,000 monthly since Trump took office for his second term, the data show. Daily southwest border apprehensions averaged 245—less than 11 per hour—a 95 percent decrease from the prior administration’s 5,110 daily average from February 2021 to December 2024.

In December 2023, apprehensions reached 336 hourly, which today would represent more than a day’s total.

Drug interdictions increased in November, with 54,947 pounds seized nationwide—an increase of 33 percent from October. Fentanyl seizures reached 1,543 pounds, a 59 percent jump from October. Methamphetamine seizures totaled 21,935 pounds, an 118 percent increase. Cocaine confiscations hit 8,240 pounds, a 40 percent increase.

Earlier in the year, July saw 24,630 nationwide encounters, a 2.4 percent fall from June and almost 90 percent below the averages under the Biden administration. June’s figures came in at 25,243 nationwide and 6,070 at the southwest border. Both June and July entailed no releases.

Tom Homan, Trump’s border czar, highlighted in February that illegal crossings dropped 93 percent, higher than reductions seen during Trump’s first term.

“We’ve got the numbers this morning. The crossings on the border are down 93 percent,” Homan said. “That’s a bigger decrease than under the first Trump administration.”

In July, Noem said Trump had “obliterated” the border crisis. By September, the administration announced having located nearly 30,000 missing illegal immigrant children by November. ICE operations in November also arrested 1,505 alleged criminal aliens in Texas.

Drug interdictions from October 2024 to January 2025 totaled 66,500 pounds overall, lower than the previous year’s equivalent period but targeting high-threat substances. In November, a seizure of 20 pounds of methamphetamine hidden in frozen meat at an Arizona port made headlines.

Under President Joe Biden, December 2023 saw 302,000 encounters, which was a record high, while fiscal 2025 recorded the lowest number of apprehensions in more than half a century: 237,538.

Tyler Durden Fri, 12/05/2025 - 08:45

S&P Futures Rise, On Pace For 9th Gain In 10 Days

Stock futures rise as investors look ahead to Friday’s release of the Fed’s preferred inflation gauge, the core PCE, a reading that may help shape next week’s rate outlook as the BoJ charts its own divergent policy course. As of *;15am ET, S&P 500 futures were 0.2% higher and on pace for the 9th gain in 10 days; Nasdaq 100 futures are +0.3% as Mag 7 names are mostly higher premarket, led by META (+0.6%), AMZN (+0.5%) and NVDA (+0.5%). Tech sentiment got a boost after Nvidia partner Hon Hai Precision Industry reported strong sales. Moore Threads, a leading Chinese AI chipmaker, jumped 425% in its Shanghai trading debut. Netflix meanwhile, fell in the premarket after agreeing a tie-up with Warner Bros, acquiring HBO. Bond yields are modestly higher; the USD is flat. Commodities are mixed: oil and base metals are lower, while precious metals are higher. US economic calendar includes September personal income/spending and PCE inflation gauges and December preliminary University of Michigan sentiment (10am New York time) and October consumer credit (3pm

In premarket trading, Mag 7 stocks are mostly higher (Meta +0.5%, Nvidia +0.4%, Alphabet +0.4%, Microsoft +0.3%, Amazon +0.4%, Tesla unchanged, Apple unchanged).

• Cooper Cos (COO) rises 13% after the health-care company’s guidance for 2026 adjusted earnings per share topped the average analyst estimate. The company also launched a strategic review.
• Hewlett Packard Enterprise Co. (HPE) drops 8% after the company gave an outlook for sales in the current quarter that fell short of high expectations for the AI server business.
• ITT Inc. (ITT) slips 2% after agreeing to acquire industrial equipment manufacturer SPX Flow Inc. from Lone Star Funds in a $4.775 billion cash and stock deal.
• Netflix (NFLX) slips 1.3% after agreeing to buy Warner Bros. Discovery Inc. in a historic combination, joining the world’s dominant paid streaming service with one of Hollywood’s oldest and most revered studios. Shares of Warner Bros. (WBD) are up 1.5%.
• Parsons (PSN) tumbles 15% after the US Federal Aviation Administration and the Department of Transportation awarded the Brand New Air Traffic Control System contract to Peraton.
• Rubrik (RBRK) rallies 18% after the cybersecurity firm raised its revenue forecast for 2026 while narrowing its view for adjusted losses per share.
• SentinelOne (S) falls 8% after the software firm’s fourth-quarter outlook missed expectations. It also initiated a search for a new chief financial officer.
• SoFi Technologies (SOFI) is down 7% after the online lender’s offering of 54.5m shares.
• Ulta Beauty Inc. (ULTA) rises 6% after raising its full-year outlook and reporting better-than-expected results in the third quarter, a sign that consumers are overcoming any reluctance to spend and shelling out for cosmetics and hair supplies.
• Victoria’s Secret (VSCO) climbs 12% after the company reported better-than-expected sales and lifted its outlook for the year, a sign that its turnaround strategy is working.

In corporate news, Perplexity AI says billionaire Cristiano Ronaldo has become an investor. Cloudflare is investigating issues with dashboard and related APIs.

Futures on the US benchmark rose on Friday after the index closed within 0.5% of a fresh record. The gauge is set for its first back-to-back weekly gain since October, signaling that traders are shaking off recent jitters over valuations and the lack of visibility on the economy during the government shutdown. Yet in a notable change from recent trends, tech hasn’t led the recent rally, and with sector participation broadening, the market’s advance may continue - even as the economic data underpinning the move exhibits a “split screen,” with non-jobs data surprising to the upside.

With a rate cut next week largely priced in and bets pointing to further easing into 2026, investors are gearing up for a year-end rally in what is typically a supportive month for stocks. Growing confidence that the US economy remains resilient, despite softer employment, is also prompting rotations into stocks that tend to benefit from domestic strength.

"Santa will bring presents for everybody, toys for the kids and gains for investors,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “Apart from the regular seasonality there are plenty of other reasons supporting the market: rate cuts and ongoing M&A activity are some of them.”

Bloomberg Economics Chief Economist Tom Orlik expects a dovish Fed to cut rates another 100 basis points in 2026, adding support to the AI investment upswing. A bonfire of regulations will also stoke growth and together with gradual price pass-through from tariffs, these factors will keep inflation above target. Kevin Hassett said the Fed should cut rates next week and said he wanted to “get to a much lower rate” over the long run.

Later on Friday, markets will a get a dated reading on the Federal Reserve’s preferred inflation gauge. The figures will include the personal consumption expenditures price index and a core measure that excludes food and energy. Economist project a third-straight 0.2% increase in the core index for September. That would keep the year-over-year figure hovering a little below 3%, a sign that inflationary pressures are stable, yet sticky.

While the data is unlikely to derail a December rate cut, it “may change the tone from Chairman Powell,” said Wolf von Rotberg, equity strategist at Bank J Safra Sarasin. “If he emphasizes inflation risks in his press conference, markets may reprice the rate trajectory for 2026, thereby increasing the pressure on the long end of the curve and on equity market valuations.”

BofA strategist Michael Hartnett notes bond vigilantes have effectively become the new regulators of AI capex. 
Nvidia partner Hon Hai reported a 26% sales jump in November, suggesting robust demand for AI servers amid a broader development boom. Moore Threads Technology, a leading Chinese AI chipmaker, jumped 425% in its Shanghai trading debut after raising 8 billion yuan ($1.13 billion).

In Europe, the Stoxx 600 is up 0.3%, rising for a fourth day and hitting a three-week high in the process. Financial services, autos and construction are leading gains while energy is a drag after downgrades in the sector from JPMorgan.  Here are some of the biggest movers on Friday:

• UCB shares jump as much as 8.2% after the Belgian biopharma company lifted its guidance for the full year.
• Renk rises as much as 5.7% as Bank of America double upgrades the shares to buy, citing an attractive valuation.
• Ocado shares rise as much as 16% after the online grocer said it will receive a $350 million cash payment from Kroger to compensate for the US grocer’s decision to close three automated warehouses and to not go ahead with another.
• Trustpilot shares jump as much as 11% after Morgan Stanley raised the stock to overweight a day after the stock was targeted by short seller Grizzly Research, saying the company’s user reviews hold unique value against increasing content from generative AI.
• Swiss Re drops as much as 7.6% after announcing targets for 2026, with analysts seeing both the buyback and group net income guidance as “underwhelming.”
• Big Yellow Group shares drop as much as 6% after talks about a possible takeover offer from Blackstone collapsed.
• Baltic Classifieds shares drop as much as 5.1% after analysts cut their price target on the online platform.
• OVH Groupe shares drop as much as 15% after an investor offloaded shares in the IT services company at a discount to yesterday’s close.

Earlier in the session, Asian stocks reversed earlier losses as investors await key US economic data later Friday. Japan markets closed lower amid profit-taking following strong gains in the previous session. The MSCI Asia Pacific Index rose as much as 0.3%, boosted by TSMC, Samsung Electronics and SoftBank Group. The gauge is on track for a second straight week of gains. Shares advanced in India after the central bank cut interest rate and signaled an openness for further easing. Benchmarks in Japan fell more than 1%. Chinese chipmakers are coming into focus, with Moore Threads surging 425% in its Shanghai trading debut after raising 8 billion yuan ($1.13 billion), the second-largest onshore IPO of the year. Elsewhere in the region, Philippine inflation slowed in November, supporting another cut in benchmark interest rates as a graft scandal shattered consumer and investor confidence. Markets were closed in Thailand. 

In FX, the Bloomberg Dollar Spot Index falls 0.1%. The yen is lower, having erased an earlier gain of 0.5%, seen after Bloomberg reported reported Bank of Japan officials are ready to raise interest rates at a policy meeting later this month. The Aussie is leading gains against the greenback, up 0.4%.

In rates, treasuries drop across the curve, following similar price action across European bonds in the wake of strong October German factory orders and French industrial production data. Treasury long-end yields are about 1.5bp higher on the day, steepening curve spreads by less than a basis point. US 10-year yield is near 4.11%, about 1bp cheaper on the day, broadly in line with bunds and gilts. Focal points of US session include PCE inflation gauge derived from September personal income and spending data, in release delayed by last month’s US government shutdown. IG dollar bond issuance slate is blank so far after just one offering was priced Thursday, however $26 billion was priced over the first three days of this week by 23 issuers — one of the strongest starts to a December. Treasury auctions resume Monday with $58 billion 3-year new issue, followed by $39 billion 10-year and $22 billion 30-year reopenings Tuesday and Thursday, skipping over Wednesday’s Fed policy announcement.

In commodities, oil prices are steady, with WTI crude futures near $59.50 a barrel. Spot gold rises $18. Bitcoin falls 0.8%. 

Looking to the day ahead now, US data releases include PCE inflation for September, and the University of Michigan’s preliminary consumer sentiment index for December, all at 10am ET. We also get German factory orders and French industrial production for October, and Canada’s employment report for November. Finally from central banks, we’ll hear from the ECB’s Villeroy and Lane.

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.4%
• Russell 2000 mini little changed
• Stoxx Europe 600 +0.3%
• DAX +0.5%
• CAC 40 +0.3%
• 10-year Treasury yield +1 basis point at 4.11%
• VIX little changed at 15.75
• Bloomberg Dollar Index little changed at 1213.14
• euro little changed at $1.1652
• WTI crude -0.2% at $59.53/barrel

Top Overnight News

• A divided Supreme Court cleared Texas to use its new Republican-drawn congressional map for the 2026 midterm election, overruling a lower court order and bolstering GOP hopes of picking up as many as five new House seats in the state. BBG
• The US is prioritizing a stable trade dynamic with China despite a push by some allies for coordinated action against Beijing, USTR Jamieson Greer said. BBG
• President Trump has issued a new national-security strategy that sharply criticizes the “unrealistic expectations” of European leaders for settling the war in Ukraine and calls for an end to NATO expansion. WSJ
• A bipartisan Senate bill seeks to block Nvidia from shipping advanced AI chips to China. The legislation proposes a 30-month halt on export licenses to US adversaries. BBG
• US Homeland Security Secretary Noem said the Trump administration is expanding the countries on the travel ban to over 30: Fox News.
• BOJ officials are ready to raise the policy rate at this month’s meeting — taking it to its highest level since 1995 — provided there’s no major shocks in the meantime, people familiar said. The yen strengthened. BBG
• China's exports likely returned to growth in November after an unexpected dip in October, as manufacturers rushed to move inventory to take advantage of a fresh tariff truce with the U.S. RTRS
• The Reserve Bank of India (RBI) cut its key repo rate by 25 basis points on Friday and left the door open for further easing as it took steps to boost banking-sector liquidity by up to $16 billion to support a "goldilocks" economy. RTRS
• The Dutch pensions overhaul looks set to push European nations to sell fewer long-dated bonds. Changes may be announced in coming weeks as governments unveil their 2026 issuance plans. BBG
• Netflix to Acquire Warner Bros. Following the Separation of Discovery Global for a Total Enterprise Value of $82.7 Billion (Equity Value of $72.0 Billion).
• Morgan Stanley forecasts a 25bps Fed cut in December (prev. forecast unchanged). Cuts in January and April 2026, a terminal of 3.00-3.25%.
• Federal Reserve Board announced a new pricing for payment services provided to banks and credit unions, effective 1st January 2026, while Fed's Bowman emphasised the importance of checks as a payment method and said the Fed cannot endorse the RFI regarding the future of check services.

Company News

• Dell (DELL) reportedly plans a price hike of 15-20% from mid-December and Lenovo (992 HK) from January 2026, according to TrendForce, citing sources.
• Cloudflare (NET) announced service issues have been resolved, according to the status page. Following issues that lasted for around 30 minutes.
• Baidu (9888 HK/ BIDU) reportedly weighs a Hong Kong IPO for its AI chip unit Kunlunxin, to rival NVIDIA (NVDA), according to Bloomberg, citing sources; unit could be valued in excess of USD 3bln
• Apple (AAPL), Google (GOOGL) and Samsung (005930 KS) have asked the Indian Government not to accept telecom proposal over privacy concerns and regulatory overreach, according to Reuters, citing sources.

Trade/Tariffs

• US Trade Representative Greer said trade with China needs to be balanced and probably needs to be smaller, while he added they want to have stability in the relationship with China, and that the US trade deficit in goods with China is down about 25%, which is the right direction.
• USTR Greer also noted there are problems with the US-Mexico-Canada Trade Agreement and that they already have adjustments to some of these challenges, as well as stated that the US wants to make sure that Canada and Mexico aren't used as an export hub for China, Vietnam or Indonesia, among others.
• China's Foreign Ministry Spokesperson said that China has repeatedly stated its position on the issue of US chip exports to China, via Global Times.
• Chinese drone maker DJI urged the Trump administration to complete audits or extend the deadline for the security review, according to a letter to Congress.
• China and France issued a joint statement on agricultural cooperation and signed an MOU on registration of infant milk powder formulas, according to Xinhua.
• Japanese Trade Minister Akazawa said they are monitoring US tariff lawsuit developments and he confirmed that Japanese companies have filed lawsuits in the US seeking refunds of additional tariffs.
• Russian President Putin said Russia is ready to provide uninterrupted fuel supplies to India. Russia and India express interest in deepening cooperation in the exploration, processing and refining technologies for critical minerals and rare earths.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed with the regional bourses mostly rangebound, amid light fresh catalysts ahead of US PCE data. ASX 200 edged higher but with gains capped as strength in the mining and materials sectors was partially offset by weakness in consumer discretionary, energy and telecoms, while price action was also contained by the absence of any pertinent data. Nikkei 225 underperformed amid the increased BoJ December rate hike bets and after dismal Household Spending data, which showed a surprise contraction. Hang Seng and Shanghai Comp saw two-way price action with early headwinds following another consecutive liquidity drain by the PBoC and reports that US senators seek to block NVIDIA (NVDA) sales of advanced chips to China for 30 months, which would target NVIDIA's H200 and Blackwell chips.

Top Asian News

• BoJ is said to likely hike this month and leave the door open to more, while the central bank is to check the data and market moves up to the final decision, according to Bloomberg.
• Japan's Chief Cabinet Secretary Kihara said they will take appropriate steps on excessive and disorderly moves in the FX market if necessary. Expects the BoJ to conduct monetary policy in an appropriate manner.
• Japan's Economy Minister Kiuchi said the inflationary impact of the stimulus package will likely be limited. The government will keep an eye on market moves with a high sense of urgency. Important for stocks, FX and bond markets to move in line with fundamentals. Specific monetary policy means is up to the BoJ, and the Government will not comment. Hopes the BoJ guides appropriate monetary policy to stably achieve the 2% inflation target.
• Hong Kong's Court endorsed a proposal allowing Country Garden Holdings (2007 HK) to extend repayment of USD 17.7bln in offshore debt.
• China's Commerce Minister said China will ramp up efforts to expand imports, via Xinhua. The Commerce Minister will also expand service consumption, increase implementation of inclusive policies that directly reach consumers, expand auto consumption and promote renewal consumption of home appliances and eliminate restrictive measures.
• RBI cut the Repurchase Rate by 25bps to 5.25%, as expected, with the decision unanimous and it maintained a neutral stance although MPC member Ram Singh wanted the stance to be changed to accommodative from neutral, while the Marginal Lending Facility Rate was lowered by 25bps to 5.50% and the Standing Deposit Facility Rate was reduced by 25bps to 5.00%.

European bourses trade modestly firmer, with little macro news to steer price action. Sentiment follows on from a mixed and quiet APAC session. European sectors mostly reside in the green, led by Financial Services, Basic Resources, Construction and Chemicals. Higher metal prices—particularly copper—help underpin sentiment in Basic Resources, while broader macro flow remains light.

Top European News

• Regulators at the BoE announce plans to support the growth of the mutuals sector. Measures include: A PRA and FCA review of mutual credit union regulations, considering more risk-based requirements for larger, complex firms and proportionality for smaller credit unions.

FX

• DXY has unwound most of its earlier losses. Initially hit by a firmer JPY on the back of more hawkish BoJ sources, coupled with verbal intervention (see below for details). The JPY reaction took DXY down to a 98.805 intraday trough (vs 99.075 APAC high), although since newsflow quietened and despite a stable risk environment, the JPY waned and DXY now attempts to reclaim 99.00 to the upside at the time of writing. The index, however, remains within yesterday's 98.765-99.08 ahead of the September US PCE, which was delayed by the US government shutdown.
• JPY has surrendered most of its earlier gains after an initial surge triggered by Bloomberg sources suggesting the BoJ is likely to hike this month while keeping the door open to further tightening. The reports briefly pushed USD/JPY below 154.50. This was followed by verbal intervention from Chief Cabinet Secretary Kihara, who reiterated that authorities would take appropriate steps against excessive or disorderly FX moves if needed. USD/JPY subsequently touched a 154.34 low before rebounding and stalling just shy of 155.00, despite limited follow-through newsflow and a stable risk backdrop.
• AUD is the top gainer, lifted by a surge in copper prices and earlier USD softness, though both AUD and copper later eased off highs as the dollar attempted a recovery. The AUD/NZD cross extended its rebound, pushing back above 1.1450 and trading toward the upper end of a 1.1461–1.1484 range.
• Other G10s vary and continue to take their cue from broader USD moves, though EUR saw a couple of brief upticks after slight upward revisions to Eurozone Q3 GDP and Employment. EUR/USD now trades mid-range within 1.1640–1.1672.

Fixed Income

• USTs remain flat in a thin 112-22+ to 112-27+ band. Traders look ahead to US PCE at 15:00 GMT / 10:00 ET, a release that will feed into the debate around a potential December Fed cut. Odds of such a move have climbed above 85% in recent sessions, up from the low-60% range a month ago, aided by comments from Fed’s Williams, who said policymakers have room for another adjustment in the “near term.”
• JGBs were hit overnight on further hawkish BoJ source reports, with market-implied odds of a December hike nearing 80%. The 10yr Japanese future fell over 20 ticks to a 133.91 trough before stabilising. Since then, bonds have held in tighter ranges as attention turns to US PCE.
• Bunds were marginally softer in a 128.29–128.52 range as markets awaited the 11:30 GMT Bundestag pension vote, which is now widely expected to pass after Die Linke signalled it will abstain—lowering the effective majority threshold and reducing the relevance of dissent within the CDU/CSU’s Young Group. The vote remains a key barometer of Chancellor Merz’s coalition stability.

Commodities

• WTI and Brent continue to trade in tight ranges with European trade underway, and following an overnight session devoid of crude-specific catalysts. Early-door comments from a Kremlin aide noted that Russia and the US are progressing in Ukraine-related talks and that Moscow is ready for further engagement, though this echoed recent rhetoric and left crude benchmarks largely unreactive pending fresh developments.
• Spot Gold found support near USD 4,200/oz in early APAC trade and steadily climbed to a USD 4,231/oz peak as Europe opened. The overnight bid was helped by weakness in the Dollar, with JPY strength driven by reports of a potential December BoJ rate hike. Since the European open, the Dollar has begun to recover, but XAU continues to hold near session highs.
• 3M LME Copper extended its rally to fresh record highs after Thursday’s consolidation in a tight USD ~180/t band. The contract opened just below USD 11.45k/t before buyers immediately stepped in, driving prices to a new all-time high at USD 11.7k/t as Europe opened.
• Discounts for Russian ESPO blend crude oil delivered to China have widened to USD 5-6/bbl vs ICE Brent due to falling demand, according to Reuters

Geopolitics: Middle East

• Hamas Leader to Al-Arabiya: "The Movement Does Not Want to Continue to Rule Gaza ... We Agreed to Form a Technocratic Committee to Govern Gaza".
• US President Trump plans to announce before Christmas the transition to phase 2 of the agreement to end the war in Gaza and the establishment of the new governing body that will manage the strip, according to Axios's Ravid.

Geopolitics: Ukraine

• Russia's Kremlin said Moscow is waiting for the US reaction after Putin-Witkoff meeting, while it added that there is no plan for a Putin-Trump call for now.
• Russian Kremlin aide said Russia and the US are moving forward in talks relating to Ukraine. Ready for further work with the current US negotiating team.
• The US has urged the EU to oppose the plan to use frozen Russian central bank assets to back a massive loan to Ukraine, via Bloomberg Sources.
• UK ministers are prepared to unlock GBP 8bln of frozen Russian assets to aid Ukraine, according to The Times.

Geopolitics: Other

• US military said it conducted a lethal kinetic strike on a vessel in international waters in the eastern Pacific on Thursday.

US Event Calendar

• 10:00 am: Sep Personal Income, est. 0.3%, prior 0.4%
• 10:00 am: Sep Personal Spending, est. 0.3%, prior 0.6%
• 10:00 am: Sep Real Personal Spending, est. 0.1%, prior 0.4%
• 10:00 am: Sep PCE Price Index MoM, est. 0.3%, prior 0.3%
• 10:00 am: Sep PCE Price Index YoY, est. 2.8%, prior 2.7%
• 10:00 am: Sep Core PCE Price Index MoM, est. 0.2%, prior 0.2%
• 10:00 am: Sep Core PCE Price Index YoY, est. 2.8%, prior 2.9%
• 10:00 am: Dec P U. of Mich. Sentiment, est. 52, prior 51
• 3:00 pm: Oct Consumer Credit, est. 10.48b, prior 13.09b

DB's Jim Reid concludes the overnight wrap

Markets saw a modest risk-on move yesterday, as a decent batch of US data saw investors price in fewer rate cuts next year. That optimism meant the S&P 500 (+0.11%) advanced for a third consecutive session, closing less than half a percent beneath its record high, while the VIX index of volatility (-0.30pts) fell to a two-month low of 15.78. Moreover, futures are pointing to a further advance this morning, with those on the S&P 500 up another +0.20% overnight, which would take the index even closer to its October record.  However, more hawkish expectations meant bonds struggled, and the 10yr Treasury yield (+3.5bps) hit a two-week high of 4.10%. Meanwhile, those bond losses echoed around the world, not least after multiple reports suggested the Bank of Japan was on the verge of another rate hike in a couple of weeks’ time. So yesterday saw 10yr JGB yields close at a post-2007 high of 1.93%, and they’re up another +1.1bps this morning to 1.94%.

That US data helped to drive the hawkish repricing, because it suggested the labour market was in a more robust position than previously thought. For instance, the weekly initial jobless claims fell to just 191k in the week ending November 29 (vs. 220k expected). Clearly it’s worth noting that we often see distortions in these numbers around the Thanksgiving holiday, so we shouldn’t overegg the improvement, but it was still a promising sign. Indeed, the 4-week moving average fell to its lowest since January, at just 214.75k. And in other news, the report on announced layoffs from Challenger, Gray & Christmas found there were fewer layoffs than expected, with a rise of +23.5% year-on-year in November (vs. +48.0% expected). So collectively, those releases suggested the US labour market was in a slightly better position than previously thought, despite the broader signs of softening we’ve seen recently. In addition, those releases matter more than usual for the Fed next week, because the data backlog from the shutdown means we won’t get the November jobs report as originally scheduled today, and instead have to wait until December 16.

With that in mind, investors adjusted their expectations in a hawkish direction for the coming months. For instance, even though a December cut is priced above 90%, there was growing scepticism that would be followed up by another, with the total amount of cuts priced by March 2026 down -1.8bps on the day to 39bps. And looking further out, the amount of rate cuts priced by the December 2026 meeting came down -5.2bps on the day to 86bps. So that shift in expectations meant Treasuries lost ground across the curve, with the 2yr yield (+3.8bps) up to 3.52%, whilst the 10yr yield (+3.5bps) rose to 4.10%.

In the meantime, the newsflow out of Japan also goes some way to explaining the latest bond selloff, as markets have become increasingly confident the BoJ will hike again this month. First, there was a Reuters report shortly before we went to press yesterday, which said the BoJ would likely hike rates this month, and the government would tolerate the move. Then a few hours later, Bloomberg similarly reported that key members of the government wouldn’t try to stop the BoJ from hiking in December. So that meant the Japanese yen strengthened against other major currencies yesterday, and this morning it’s strengthened back above 155 per dollar to 154.89.

That newsflow has continued overnight, with Bloomberg reporting this morning that BoJ officials are ready to hike rates at the next meeting, “provided there’s no major shock to the economy or financial markets in the meantime”. Moreover, the article said that the BoJ would indicate that further rate hikes would follow if its outlook for the economy were realised. So if they do proceed, that would take the policy rate up to 0.75%, the highest since 1995. That’s led to a hawkish reaction among Japanese assets, with the yen strengthening +0.18% this morning against the US Dollar, whilst the Nikkei is down -1.29%. And the yield curve has steepened as well, with the 5yr yield (+2.2bps) up to a post-2008 high of 1.42% this morning.

Elsewhere in Asia, we’ve seen a more mixed performance this morning. So the KOSPI (+1.23%) has posted a strong advance, but the CSI 300 (+0.11%) and the Shanghai Comp (+0.05%) have only posted a modest gain, whilst the Hang Seng (-0.06%) is slightly lower. Meanwhile in India, the central bank cut rates by 25bps in line with expectations, taking the repurchase rate down to 5.25%.

All that follows on from a pretty subdued session for US equities yesterday, with the S&P 500 (+0.11%) posting a third consecutive advance. That left the index just -0.49% beneath its record closing high from late-October, whilst other indices like the NASDAQ (+0.22%) and the Magnificent 7 (+0.53%) also moved higher. In terms of specifics, Meta (+3.43%) rose after a Bloomberg report said that executives were considering budget cuts up to as much as 30% for the metaverse group. Meanwhile, Dollar General (+14.01%) was the top performer in the S&P after raising their full-year outlook. However, some of the more defensive sectors in the S&P 500 struggled, with consumer staples (-0.73%) and healthcare (-0.73%) both losing ground. Futures on the S&P 500 are pointing to further gains this morning, with a +0.20% advance.

Earlier in Europe, equities had put in an even stronger performance, with the STOXX 600 (+0.45%) closing less than 1% beneath its own record high. That was echoed across the continent, where the DAX (+0.79%) and the CAC 40 (+0.43%) also rose, whilst Spain’s IBEX 35 (+0.97%) hit an all-time high. As in the US however, sovereign bonds struggled, with yields on 10yr bunds (+2.4bps), OATs (+3.2bps) and BTPs (+2.2bps) all moving higher. Finally in the commodity space, Brent crude rose +1.02% to $63.31/bbl as investors weighed ongoing risks to Russian oil supply. 

To the day ahead now, and US data releases include PCE inflation for September, and the University of Michigan’s preliminary consumer sentiment index for December. Otherwise, we’ll get German factory orders and French industrial production for October, and Canada’s employment report for November. Finally from central banks, we’ll hear from the ECB’s Villeroy and Lane.

Tyler Durden Fri, 12/05/2025 - 08:38

Economic Confidence Slips To 17-Month Low, Holiday Spending Plans Weaken

Authored by Tom Ozimek via The Epoch Times,

A new Gallup poll shows that U.S. consumer confidence deteriorated sharply in November, falling to its weakest level in 17 months as households contended with a protracted federal government shutdown, volatile financial markets, cooling job prospects, and renewed inflation anxiety.

The gloomier mood—reflected in Gallup’s Dec. 4 poll and aligning with several other major sentiment surveys—coincided with a pullback in Americans’ holiday spending plans, raising concerns about softer momentum heading into the final weeks of 2025.

Gallup’s economic confidence index fell seven points to –30 in November, its weakest reading since July 2024. The drop reflected dimmer views of both current conditions and the outlook: 21 percent of Americans called the economy “excellent” or “good,” while 40 percent said it is “poor.”

Expectations slipped further, with just 27 percent saying the economy is improving—down from 31 percent in October—and 68 percent saying it is getting worse.

The downturn marks a notable reversal from the relative stability seen for much of the year.

After improving through late 2024 on post-election optimism, the index had hovered between –14 and –22 for most of 2025 before slipping in October and then tumbling last month. At -30, November’s sentiment reading is well above the recent low of -58 notched in June 2022, when inflation soared to a recent peak of 9 percent and sent confidence plummeting. The lowest the gauge has ever hit is -72, in October 2008, during the financial crisis.

Historic Pullback in Holiday Spending Plans

Consumers’ heightened economic anxiety in November translated into a far smaller appetite for holiday gift spending than earlier in the season. Gallup found that Americans have cut their expected holiday budgets by $229 since October - the largest midseason drop the organization has ever recorded, surpassing even the $185 decline during the 2008 financial crisis.

Despite the sharp contraction in projected spending, only 29 percent of Americans say they plan to spend less than last year, up from 23 percent in October but still far below the 46 percent who reported plans to cut back in November 2008.

Labor market sentiment also softened meaningfully. Just a third of Americans (33 percent) said it is a good time to find a quality job, the weakest reading since January 2021, when COVID-19 lockdowns were pressuring labor markets. Views on job availability have worsened steadily through the fall, mirroring private-sector payroll data showing a broad pullback in hiring.

ADP Research reported this week that the private sector shed 32,000 jobs in November—the weakest showing since early 2023—driven largely by steep losses at small firms. Wage gains continued to cool, with year-over-year pay growth easing to 4.4 percent in November from the prior month’s 4.5 percent pace of growth.

Other gauges of economic activity suggest a mixed backdrop. The Conference Board’s consumer confidence gauge slid to 88.7, its lowest since April, and expectations remained mired below the recession-warning threshold for a tenth consecutive month.

Michigan’s sentiment survey showed a double-digit plunge in current conditions and weaker buying plans for big-ticket goods. JPMorganChase Institute data showed real household income growth slowed to 1.6 percent in October, leaving consumers heading into the holidays with flat bank balances and limited purchasing-power gains.

These readings reflect sentiment shaped by the 43-day federal government shutdown, which delayed pay for federal workers, disrupted flights, and halted key benefit programs, adding strain to household finances. Michigan’s consumer sentiment index fell to 50.3 in November, its lowest since June 2022, as respondents reported worsening personal finances and growing anxiety about the shutdown’s broader economic fallout.

Retail Spending Cools but Continues to Grow

Retail activity has cooled, though it has continued to expand. The latest government data—interrupted by the shutdown—indicate slower sales in September, and while private-sector card spending figures from the Bank of America Institute show relatively solid year-over-year gains in October, some of that strength was buoyed by higher prices rather than higher volumes.

Despite the sour near-term mood, forecasters remain cautiously optimistic about next year. A recent National Association for Business Economics outlook sees 2026 growth improving to 2 percent, supported by resilient consumer spending and firmer business investment.

Similarly, the Organisation for Economic Co-operation and Development (OECD) has raised its U.S. growth forecast, with the 38-country group saying the upgrade reflects exceptional rates of investment in information processing equipment, software, and data center construction, helping offset cooling job growth and other headwinds.

Tyler Durden Fri, 12/05/2025 - 08:25

Netflix To Buy Warner Bros In $72 Billion Deal; Hollywood Goes Into Panic Mode

Netflix will acquire Warner Bros., including its film and TV studios, HBO, and HBO Max, in a cash-and-stock transaction valuing WBD at an enterprise value of $82.7 billion (equity value $72 billion), or $27.75 per share. The deal is expected to close in 3Q26, following WBD's planned spinoff of its Global Networks division into a separate public company ("Discovery Global"). The move comes just months after Paramount-Skydance made its own bid for WBD.

The Netflix-WBD deal unites the streaming platform with a century-deep library and franchises such as DC, Harry Potter, Game of Thrones, The Sopranos, and The Big Bang Theory.

Netflix wrote in a statement that the deal will boost its content offering, expand production capacity, and improve long-term growth:

By offering members a wider selection of quality series and films, Netflix expects to attract and retain more members, drive more engagement, and generate incremental revenue and operating income. The company also expects to realize at least $2–3 billion of cost savings per year by the third year and expects the transaction to be accretive to GAAP earnings per share by year two.

Here's a snapshot of the deal terms:

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

• Boards of both companies unanimously approved the transaction

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

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

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

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

Bloomberg noted that Hollywood is far from thrilled about this new Netflix–WBD marriage:

And the winner is… Netflix.

Warner Bros. Discovery began exclusive negotiations to sell its film and TV studios and HBO Max to Netflix, people familiar said — a sign that the streaming giant pulled ahead of Paramount-Skydance and Comcast. A deal would reshape the entertainment landscape and mark a major strategic shift for Netflix, already Hollywood's most valuable company. Paramount called the sale process "tainted," while two-time Oscar-winner Jane Fonda used a stronger word for its likely impact on the industry: "catastrophic."

Former WBD CEO...

If I was tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix

— Jason Kilar (@jasonkilar) December 4, 2025

Netflix shares moved lower in the early cash session, down around 2%.

Founded as a DVD-by-mail service, Netflix first crushed video chain Blockbuster - and is now doing the same to Hollywood by largely refusing to release films in theaters. The deal would position Netflix as a true studio heavyweight. Of course, all of this still hinges on regulatory approval, with California Republican Darrell Issa already objecting to any potential Netflix takeover of Warner Bros.

Tyler Durden Fri, 12/05/2025 - 08:00

As AI Booms, US Ignores One Threat That Could Turn Off Everything

Authored by Richard Porter via RealClearPolitics.com,

We are now well past dawn in the age of artificial intelligence: According to a recent survey by Pew Research Center 62% of respondents say they interact with AI a least several times a week. Nearly every company in the U.S. is now urgently evaluating the ways in which AI can be deployed to lower costs, improve products and services, and ultimately to increase profits. Some, such as Elon Musk, are predicting AI and robots will generate such abundance that in 10 to 20 years, work will become optional and money irrelevant.

Hundreds of billions of dollars are being poured into building new data centers to house the computers to meet expected demand as AI becomes ubiquitous, not just in the U.S., but around the world. Some see a 25% growth in U.S. electricity demand over the next five years as these data centers come online, and predict consumer electricity prices will go at least 40% higher, too.

Our economy, our money, our livelihoods, our lives are increasingly virtual and online; our dependence on electricity and access to data processing cannot be overstated. Just over 140 years since the commercialization of electricity, just 75 years after the first commercial computer was introduced, and just over 30 years since the Internet was opened to the public, human civilization in the U.S. and much of the world depends on the continuous flow of electrons through circuits.

While there’s been much handwringing over the risk that AI will take over the world, as in “The Terminator” series of movies (Google’s AI estimates there have been hundreds of thousands or more articles on this topic), perhaps we should focus more attention on the opposite risk.

What if AI, the computers, indeed all electricity and electric circuits are suddenly turned off? What happens if the continuous flow of electrons through circuits upon which our civilization increasingly depends just – ends?

How could this happen? Wires and circuits are designed to carry a certain voltage and amperage: Volts measure pressure on electrons and amps measure the volume or flow of electrons. When volts or amps are too high for the wire or circuit, it overheats, melts, or catches fire. So, for example, when lightning strikes an electronic device, the wires in the device act as antennae and pick up the electric charge from the lightning, which causes the voltage on the wire to surge millions of times higher than typical voltage. 

Lightning rods, invented by Ben Franklin in 1753, and Faraday cages, invented by Michael Faraday in 1836, have long been used to protect structures and electronic devices from the regularly and naturally occurring risk of lightning and ambient electromagnetic waves from the sun or other sources, by redirecting the electricity caused by these phenomenon.

So, how might the entire flow of electricity upon which our civilization depends ever just be turned off?  There are two types of relatively low-probability events that could cause a massive electromagnetic pulse directing millions of volts onto wires, thereby destroying unprotected electronic devices in the U.S.

• The first is a massive solar storm called a “Carrington event” after the astronomer who observed the largest geomagnetic storm ever recorded in 1859 – a storm hundreds of times larger than “typical” solar storms – that destroyed telegraph systems in Britain and the U.S.

• The second is the creation of electromagnetic pulses by detonating a nuclear device high in the atmosphere above the U.S., called a HEMP, or high-altitude electromagnetic pulse.

While no one knows for sure the odds of either event occurring in the next 10 years, some have put the odds for each at 10-12%. In any event, the risk is non-trivial and the consequences to life in the United States of either event continue to grow every day as our reliance on AI, computers, robots, and the electricity that makes it all possible, grows. 

Our government formed a commission to assess this risk in 2001, which reported in 2008 that 90% of Americans would likely be dead 6 months after a HEMP attack on the U.S. – because our modern civilization operates as a system of systems, but all of the systems require electricity and electric components to function.

Americans are even more dependent on electricity today than we were 17 years ago, and our dependence on electricity will grow even deeper as we integrate AI into our lives.

So, as we depend more on electricity and AI, the policy question is: Are we actually implementing strategies for mitigating EMP risk, as the expected cost of this known risk is massive and continues to grow?

Note in this regard that triggering a HEMP is actually the easiest type of nuclear attack a rogue state or actor could launch against us – because a missile only has to go up and explode over the U.S. and does not have to be targeted back to a particular location on earth. It’s also relatively “clean” in that radiation fallout to the ground is lower the higher the bomb is detonated. Some scholars believe that HEMP weapons are central to China’s nuclear and cyber strategy against the U.S.

It’s uncomfortable to consider this risk, and it’s human nature to sometimes ignore small risks with major consequences, but a rational policymaker should increase investments to mitigate this risk as the expected cost of the risk increases.

Are we doing this? How many of the new, massive data centers are incorporating protections against EMP in their design and construction? As utilities build new power plants and upgrade the aging, unprotected grid, are they planning and designing to mitigate EMP risk? And what of our transportation equipment and infrastructure?

Ubiquitous, reliable, low-cost electric energy has been our greatest strength, but it’s also become our Achilles heel in the nuclear age. We know this to be true.

Last March, President Trump ordered the creation of a National Resilience Strategy by July and a National Critical Infrastructure Policy by October to address risks such as these, but neither the follow-up strategy nor the policy contemplated by the order appears to have been published. While empowering states and localities to deal with these risks may be efficient, it’s unclear whether states are seriously taking on this task either.   

In Aesop’s fable of the wild boar and the fox, the fox questions why the boar sharpens its tusks, and the boar replies it would be foolish not to get ready when you can for what comes. I fear we are not giving this well-known, truly-existential, but oft-ignored risk the attention, planning, oversight, and investment it deserves as electric infrastructure spending soars in pursuit of AI.

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

Tyler Durden Fri, 12/05/2025 - 07:20