Zero Hedge

Sorry Liz; Cash - Not Crypto - Still Top Funding-Choice For Terrorists

Sorry Liz; Cash - Not Crypto - Still Top Funding-Choice For Terrorists

Authored by Arijit Sarkar via CoinTelegraph.com,

Singapore’s internal investigation into nationwide terrorism threats has revealed a significant reliance on cash transfers for fundraising. In contrast, the adoption of cryptocurrency among terrorist organizations remains low.

The Singapore terrorism threat assessment report 2024, released July 25, highlighted an elevated terrorism threat to the nation owing to global instability. The report was issued by the Internal Security Department of the Ministry of Home Affairs.

Bypassing regulations with cash

The Singapore government noted an increase in the use of cryptocurrencies to raise funds for terrorist activities by various Islamist terrorist groups. However, the Islamic State in Iraq and Syria (ISIS) continues to receive most of its funding through cash transfers.

“Although there is increasing use of cryptocurrencies, the predominant means for financial transactions by ISIS and its affiliates remain cash couriers and informal value transfer systems (hawala).”

Wire transfers through financial institutions, money service businesses and cash couriers remain the top choice for terrorist organizations to raise capital. While Singapore reported no indication of an imminent attack, the primary threat driver continues to be online self-radicalization driven by supporters of the terrorist group Hamas.

Crypto donations in terror financing

The report also noted that, in February, a Philippines-based pro-ISIS media group ran a fundraising campaign in support of the “mujahideen (fighters)” and shared posters soliciting cryptocurrency donations.

The agency reminded citizens that funding terrorism is a crime. Since 2015, 13 individuals have been convicted for terror financing, which includes three Singaporeans and 10 foreigners.

Singapore’s ongoing effort to curb terror financing through regulation

The Monetary Authority of Singapore (MAS) recently increased the risk level for crypto exchange platforms or digital payment token service providers from medium-low to medium-high as part of an update to the country’s laws on Countering the Financing of Terrorism.

Key findings of the Money Laundering National Risk Assessment in the Anti-Money Laundering landscape. Source: MAS

The change aims to prevent terrorist organizations from exploiting Singapore’s economic openness as an international financial, business and transport hub for terrorist financing purposes.

[ZH: These findings run in direct contrast to Senator Elizabeth Warren's constant diatribes against crypto.]

As Decrypt's Stephen Graves notes, her intense scrutiny of crypto mining in the U.S. comes as she faces headwinds in her campaign to impose tighter restrictions on crypto in the U.S.

Just this week, Sen. Roger Marshall (R-KS) pulled his support for Warren's Digital Asset Anti-Money Laundering Act of 2023. His withdrawal was especially notable because he co-sponsored the bill.

Crypto firms have stepped up their efforts to unseat Warren, who has linked the digital asset class to crimes including child sexual exploitationterrorist financing and the fentanyl trade.

Ripple Labs has donated $1 million to help defeat prominent crypto critic Sen. Elizabeth Warren (D-MA) this November.  A company spokesperson confirmed to Decrypt on Tuesday that it made the payment to the Commonwealth Unity Fund, a super PAC set up to support the campaign of one of Warren’s Republican challengers, crypto attorney John Deaton.  The spokesperson declined, however, to comment on whether Ripple plans to spend additional funds on the race. They also did not clarify how the company’s...

This month, Ripple Labs donated $1 million to the Commonwealth Unity Fund, a a super PAC set up to support the campaign of one of Warren’s Republican challengers, crypto attorney John Deaton.

In February, it was revealed that pro-crypto super PAC Fairshake, which has raised hundreds of millions of dollars from crypto firms, poured $10 million into attack ads directed at prominent Warren ally Katie Porter, a Democratic congresswoman currently in a four-way race for California’s open U.S. Senate seat.

Tyler Durden Fri, 07/26/2024 - 12:15

Netanyahu Angry After Meeting With Vice President Harris

Netanyahu Angry After Meeting With Vice President Harris

Israeli Prime Minister Benjamin Netanyahu was angered by Vice President Kamala Harris' on-camera statement following their Thursday meeting, and he now says the words threaten to sabotage any potential peace deal with Hamas.

Diplomats speaking with Axios said Netanyahu's criticism stems from Harris speaking as if a ceasefire and hostage exchange would mark the final end of the war in Gaza, whereas Israel's position has all along been that counter-Hamas operations could resume even if a hostage deal is reached.

Via AFP

Following the Harris-Netanyahu meeting which lasted about 40 minutes, the Vice President said "It is time for this war to end in a way where Israel is secure, all the hostages are released, the suffering of Palestinians in Gaza ends and the Palestinian people can exercise their right to freedom, dignity and self determination."

She added: "And as I just told Prime Minister Netanyahu it is time to get this deal done. Let's get the deal done. So we can get a ceasefire to end the war. Let's bring the hostages home. And let's provide much needed relief to the Palestinian people."

Israeli officials told Axios that the Biden meeting was much more constructive than the one with Harris, but that they were "caught off guard" by Harris' follow-up statement:  

  • The Israeli officials said Netanyahu and his team were caught off guard by Harris' on-camera statement and taken aback by its tone, which they said sounded much more critical than Biden's.
  • "Harris' statement after the meeting was much more critical than what she told Netanyahu in the meeting," one Israeli official claimed.

According to more, "The Israeli official also said Netanyahu was unhappy with the fact that Harris criticized Israel publicly for the humanitarian crisis in Gaza and for killing civilians, especially at the current timing amid the hostage deal negotiations."

But an aide to the vice president said he has no idea what the Israeli side is talking about and emphasized the private meeting between Harris and Netanyahu was "serious and collegial." 

So for now, it appears Netanyahu is ready to blame lack of progress in a ceasefire on VP Harris, and the current chaos of American politics after Biden bowed out of the presidential race. Israeli officials have tried to push a narrative that says a truce deal is impossible if there is any daylight in messaging between Washington and Tel Aviv.

But what Israel wants is a perpetual 'blank check' from the US taxpayer (akin to Ukraine's Zelensky), and makes a lot of noise and complains bitterly in any instance where US leadership is not 100% on board, or issues some degree of criticism of Israeli military action.

Tyler Durden Fri, 07/26/2024 - 11:55

Full Bodycam Footage From Trump Assassination Attempt Released

Full Bodycam Footage From Trump Assassination Attempt Released

Authored by Steve Watson via modernity.news,

Senator Chuck Grassley Has Released the full video taken by a police bodycam on the rooftop from which Thomas Matthew Crooks attempted to assassinate President Trump.

The footage is an extended version of video released earlier this week, obtained from the local Beaver County Emergency Services Unit.

It shows the immediate aftermath of the shooting, with Crooks’ dead body lying on the roof and several officers surrounding him, along with a federal agent.

In addition to the previously discussed comments of the officers, the footage also shows them expressing concerns about potential explosive devices, three of which were later found in Crooks’ car and home.

The officers can be heard urging the FBI to expedite their response.

In a press release, Grassley pointed to two core concerns raised by the footage.

  1. A fragmented and delayed chain of communication between local and federal law enforcement.
  2. A seemingly delayed response in identifying and disabling a potential detonator device, including a potential device located next to the deceased shooter.

“The video footage additionally records law enforcement discussing the need to use a drone to inspect and secure the water tower on site,” Grassley notes.

He adds “Records obtained by my office corroborate that USSS had assigned an Unmanned Aerial System drone operator to the event.”

As we previously highlighted, Crooks was able to fly his own drone over the rally site just hours prior to Trump taking the stage.

 

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

 

Tyler Durden Fri, 07/26/2024 - 11:35

Apple's iPhone Falls Out Of China's Top Five As Domestic Brands Soar In Popularity 

Apple's iPhone Falls Out Of China's Top Five As Domestic Brands Soar In Popularity 

New quarterly smartphone shipment data in China reveal that domestic handset makers have secured all five top spots, pushing Apple from number 5 to number 6. 

Canalys research shows China's smartphone market recorded 10% year-on-year growth in the second quarter, with shipments exceeding 70 million units.

A further breakdown of the report:

Vivo reclaimed the number one spot by shipping 13.1 million units, capturing a 19% market share. This growth, a 15% increase over the previous year, was driven by strong performance in offline channels and robust online sales during the "618" e-commerce festival. OPPO held onto second place, shipping 11.3 million units, buoyed by the launch of its new Reno 12 series. HONOR was third, with shipments of 10.7 million units, marking a 4% year-on-year increase. Huawei followed closely, taking fourth place with shipments of 10.6 million units, though its growth has slowed slightly. Xiaomi saw a 17% year-on-year increase and re-entered the top five by shipping 10 million units. The significant marketing buzz this quarter surrounding Xiaomi's first electric car, the SU7, was one of the contributors to solid sales of its K70 and flagship 14 series.

Here's the focus: 

"Apple ranked sixth with a market share of 14%, a decrease of 2% from the second quarter of the previous year." 

Canalys Research Analyst Lucas Zhong said, "It is the first quarter in history that domestic vendors dominate all the top five positions." 

Despite Apple's aggressive discounts in the world's largest smartphone market, Tim Cook & company couldn't hold on to the number five spot as market share deteriorated in the quarter.

Apple faces intense competition from Huawei, and Chinese consumers are increasingly abandoning foreign brands for domestic ones as the tech war between Washington and Beijing intensifies.

Tyler Durden Fri, 07/26/2024 - 11:15

NYU Prof: Trump, Like Hitler, Will Use Assassination Attempt For 'Authoritarian' Goals

NYU Prof: Trump, Like Hitler, Will Use Assassination Attempt For 'Authoritarian' Goals

Authored by Matt Lamb via The College Fix,

Being almost killed ‘can cause a wave of sympathy,’ professor says

President Donald Trump may take a page out of the “authoritarian playbook,” and use his assassination attempt to make himself more powerful, according to a New York University professor.

Historian Ruth Ben-Ghiat wrote in The Conversation that “assassination attempts can cause a wave of sympathy for leaders that can boost their personality cults as well.”

“And with each failed attempt, the personality cult themes about the leader’s macho toughness, resilience and invincibility gain credence among his followers,” the history professor said. “This was certainly the case with Castro and Mussolini, and it has been the case so far with former President Donald Trump.

From Mussolini and Hitler onward, strongmen have posed as victims of internal and external enemies, as well as protectors of the nation – as the only individuals who could save the people and lead them to greatness,” she said.

(This is not the first time she has compared Trump to Mussolini.)

“The effects of the assassination attempt on Trump are so far in line with authoritarian history,” she wrote, analyzing how Trump responded to being shot at. “Chief among its aftereffects is a boost to Trump’s victimhood persona.”

The professor noted that many Republicans showed solidarity with Trump after he survived an assassination attempt.

“The attack has also brought Trump even more loyalty from followers bonded to him,” she wrote. “At the [Republican National Convention], many wore ear bandages as signs of support. Trump’s wounds are their wounds too – to them, he embodies the nation, expresses their sufferings and risks his safety on their behalf.”

His campaign, according to Ben-Ghiat, “has always had vengeance and retribution for those who persecute him, in his telling, as a central theme.”

She then connected the assassination attempt and Trump’s response to the much fretted about “Project 2025,” a long white paper from the Heritage Foundation.

It includes firing bureaucrats who refuse to do their jobs and implement the executive branch agenda. Former Trump officials are involved with the project, but the president himself has no involvement in it.

Nevertheless, Ben-Ghiat is concerned.

“The assassination attempt on Trump may be used as justification for these measures, just as other attacks have been used by other authoritarians in history.”

Editor’s note: The College Fix is a recipient of a grant from the Heritage Foundation for an initiative unrelated to Project 2025.

Tyler Durden Fri, 07/26/2024 - 10:55

Overly-Optimistic Investors Face Potential Disappointment

Overly-Optimistic Investors Face Potential Disappointment

Authored by Lance Roberts via RealInvestmentAdvice.com,

Overly optimistic investor expectations of market returns may be a problem. To wit:

“While consumers are not very confident about the economy, they are highly optimistic about the stock market. In that same consumer confidence report from the Conference Board, the expectations for rising stock prices over the next 12 months are near the highest on record.

Of course, after a decade of 12% returns, why should they not be optimistic that the future will be much the same as the past? A good example came from a recent discussion with an individual wanting me to review the “financial plan” for their retirement goals. The plan was generated by one of the many “off the shelf” software packages that take all the inputs of income, assets, pensions, social security, etc., and then spits out assumptions of future asset values and drawdowns in retirement.

The problem is that the return assumptions were grossly flawed.

In the vast majority of these plans, the optimistic assumption is that individuals will have a rate of return of somewhere between 6-10% annually heading into retirement and 4-8% thereafter. The first major flaw in the plan is the “compounding” of annual returns over time, which does NOT happen.

“There is a massive difference between AVERAGE and ACTUAL returns on invested capital. Thus, in any given year, the impact of losses destroys the annualized “compounding” effect of money.

The chart below shows the difference between “actual” investment returns and “average” returns over time. See the problem? The purple-shaded area and the market price graph show “average” returns of 7% annually. However, the return gap in “actual returns,” due to periods of capital destruction, is quite significant.”

The second and most important is the future expectation of individual returns over the next 10-20 years.

This second point is what I want to address today.

There are two main reasons why returns over the next decade or two are currently overestimated. The first is a “you problem,” and the second is “math.”

It’s A You Problem

Back in 2016, I wrote an article discussing a Dalbar investor study explaining why investors consistently “suck” at investing. As I detailed in that article, one of the biggest impediments to achieving long-term investment returns is the impact of emotionally driven investment mistakes.

Investor psychology helps us to understand the thoughts and actions that lead to poor decision-making. That psychology drives the “buy high/sell low” syndrome and the traps, triggers, and misconceptions that lead to irrational mistakes that reduce returns over time.

As the Dalbar study showed, nine distinct behaviors impede optimistic investors based on their personal experiences and unique personalities.

The most significant problems for individuals are the “herding effect” and “loss aversion.”

These two behaviors tend to function together compounding the issues of investor mistakes over time. As markets are rising, individuals are optimistic the current price trend will continue to last for an indefinite period. The longer the rising trend last, the more ingrained that optimistic belief becomes until the last of “holdouts” finally “buys in” as the financial markets evolve into a “euphoric state.”

As the markets decline, there is a slow realization that “this decline” is something more than a “buy the dip”opportunity. As losses mount, the anxiety of loss begins to mount until individuals seek to “avert further loss” by selling.

As shown in the chart below, this behavioral trend runs counter-intuitive to the “buy low/sell high” investment rule.”

“In the end, we are just human. Despite the best of our intentions, it is nearly impossible for an individual to be devoid of the emotional biases that inevitably lead to poor investment decision-making over time. This is why all great investors have strict investment disciplines that they follow to reduce the impact of human emotions.

More importantly, despite studies that show that “buy and hold,” and “passive indexing” strategies, do indeed work over very long periods of time; the reality is that few will ever survive the downturns in order to see the benefits.”

The impact of these emotionally driven mistakes leads to long-term underperformance below those “goal-based” financial projections.

It’s Just Math 

“But Lance, the markets has returned 10% on average over the last century, so I will probably be okay.”

True. If you can contract “vampirism,” avoid sunlight, garlic, and crosses, you can live long enough to achieve the “average annual rate of return” over the last 124 years.

For the rest of us mere mortals, and why “duration matching” is crucial, we only have between today and retirement to reach our goals. For the majority of us – that is about 15 years.

And therein lies the problem.

Despite much of the commentary that continues to suggest we are in a long-term secular bull market, the math suggests something substantially different. However, it is essential to understand that when low future rates of return are discussed, it does not mean that each year will be low, but the return for the entire period will be low. 

The charts below show the 10- and 20-year rolling REAL, inflation-adjusted returns for the markets compared to trailing valuations.

(Important note: Many advisors/analysts often pen that the market has never had a 10 or 20-year negative return. That is only nominal and should be disregarded as inflation must be included in the debate.)

There are two crucial points to take away from the data. First, there are several periods throughout history where market returns were near zero and negative. Secondly, the periods of low returns follow periods of excessive market valuations. Such suggests that betting “This time is not different” may not work well.

As David Leonhardt noted previously:

“The classic 1934 textbook ‘Security Analysis’ – by Benjamin Graham, a mentor to Warren Buffett, and David Dodd – urged investors to compare stock prices to earnings over ‘not less than five years, preferably seven or ten years.’ Ten years is enough time for the economy to go in and out of recession. It’s enough time for faddish theories about new paradigms to come and go.

History shows that valuations above 23x earnings have tended to denote secular bull market peaks. Conversely, valuations at 7x earnings or less have tended to denote secular bull market starting points.

This point is proven simply by looking at the distribution of returns as compared to valuations over time.

From current levels, history suggests that returns to investors over the next 10 and 20 years will likely be lower than higher. However, as I said, we can also prove this mathematically. As I discussed in “Rising Bullishness:”

Capital gains from markets are primarily a function of market capitalization, nominal economic growth, plus dividend yield. Using John Hussman’s formula, we can mathematically calculate returns over the next 10-year period as follows:

(1+nominal GDP growth)*(normal market cap to GDP ratio / actual market cap to GDP ratio)^(1/10)-1

Therefore, IF we assume that GDP could maintain 2% annualized growth in the future, with no recessions ever, AND IF current market cap/GDP stays flat at 2.0, AND IF the dividend yield remains at roughly 2%, we get forward returns of:

(1.02)*(1.2/1.5)^(1/10)-1+.02 = -(1.08%)

But there are a “whole lotta ifs” in that assumption. Most importantly, we must also assume the Fed can get inflation to its 2% target, reduce current interest rates, and, as stated, avoid a recession over the next decade.”

In either case, these numbers are well below most financial plan projections, leaving retirees well short of their expected retirement goals. 

 

Conclusion

While most analysis assumes that individuals should “buy and hold” indexed-based portfolios, the reality is quite different.

Retirement plans have a finite period for asset accumulation and distribution. The time lost “getting back to even” following a significant market correction should be a primary consideration.

Unfortunately, most investors remain woefully behind their promised financial plans. Given current valuations and the ongoing impact of “emotional decision-making,” the outcome will not likely improve over the next decade or two.

Markets are not cheap by any measure. If earnings growth slows, interest rates remain elevated, and demographic trends impact the economy, the bull market thesis will disappoint as “expectations” collide with “reality.” 

Such is not a dire doom and gloom prediction or a “bearish” forecast. It is just a function of how the “math works over time.”

For optimistic investors, understanding potential returns from any given valuation point is crucial when considering putting their “savings” at risk. Risk is an important concept as it is a function of “Loss.

The more risk taken within a portfolio, the greater the destruction of capital will be when reversions occur.

This time is “not different.” The only difference will be what triggers the next valuation reversion when it occurs. If the last two bear markets haven’t taught you this by now, I am unsure what will. 

Maybe the third time will be the “charm.”

Tyler Durden Fri, 07/26/2024 - 10:15

Depressed Democrats Drag UMich Consumer Sentiment Survey To 8-Month-Lows

Depressed Democrats Drag UMich Consumer Sentiment Survey To 8-Month-Lows

UMich Consumer Sentiment slumped further in July with Current Conditions plunging to their weakest since Dec 2022...

Source: Bloomberg

Confidence among Republicans picked up modestly while Democrats' sentiment slumped to its lowest since 2023...

Source: Bloomberg

Buying-Conditions crashed for everything...

Source: Bloomberg

On the bright side, inflation expectations continue to stabilize...

Source: Bloomberg

Surveys of Consumers Director Joanne Hsu noted that "continued election uncertainty is likely to generate volatility in economic attitudes in the months ahead."

Tyler Durden Fri, 07/26/2024 - 10:09

Prosecutors Charge Short Seller Andrew Left Of Citron Research With Fraud For "Misleading Statements"

Prosecutors Charge Short Seller Andrew Left Of Citron Research With Fraud For "Misleading Statements"

Federal prosecutors charged short seller Andrew Left with fraud on Friday, accusing him of making misleading statements about stocks to profit from price moves triggered by his reports, according to an exclusive by the Wall Street Journal

Known for his firm Citron Research, which targets market "lemons," Left gained fame for betting against Valeant Pharmaceuticals and for betting against GameStop during the meme stock craze, but he has seen less success in recent years.

The DOJ wrote in a press release out Friday morning:

According to the indictment, Andrew Left, 54, formerly of Beverly Hills, California, and now a resident of Boca Raton, Florida, was a securities analyst, trader, and frequent guest commentator on cable news channels such as CNBC, Fox Business, and Bloomberg Television. Left conducted business under the name “Citron Research” (Citron), an online moniker he created as a vehicle for publishing investment recommendations. Citron’s online presence included a website and a social media account on X, formerly known as Twitter.

His media presence amplified his impact, leading followers to mimic his trades, prosecutors said:

As alleged in the indictment, Left commented on publicly traded companies, asserting that the market incorrectly valued a company’s stock and advocating that the current price was too high or too low. Left’s recommendations often included an explicit or implicit representation about Citron’s trading position—which created the false pretense that Left’s economic incentives aligned with his public recommendation—and a “target price,” which Left represented as his valuation of the company’s stock. Sometimes, the commentary represented Left’s own work. Other times, Left disseminated the commentary of third parties as his own. The commentary routinely included sensationalized headlines and exaggerated language to maximize the reaction it would get from the stock market. As alleged, Left knowingly exploited his ability to move stock prices by targeting stocks popular with retail investors and posting recommendations on social media to manipulate the market and make fast, easy money.

The Wall Street Journal reported that Left faces charges of securities fraud and lying to federal investigators, with accusations of manipulating at least 15 stocks to earn $16 million over five years. Prosecutors claim he exaggerated potential stock price declines, sometimes closing positions after minimal price drops.

The press release continued: 

As further alleged in the indictment, in the leadup to publication of Citron’s commentary, Left established long or short positions in the public company on which he was commenting in his trading accounts and prepared to quickly close those positions post-publication and take profits on the short-term price movement caused by his commentary. Left allegedly used his advance knowledge and control over the timing of a market-moving event to build his positions using inexpensive, short-dated options contracts that expired from the same day that he published his commentary to within five days. Left also allegedly submitted limit orders, often prior to publication of his commentary, to close his positions as soon as the company’s shares reached a certain price and at prices vastly different from the target prices that Left recommended to the public. While Left made false representations to the public to bolster his credibility, behind the scenes, Left allegedly took contrary trading positions to reap quick profits off the stocks he either promoted or pilloried through Citron.

Left's indictment concludes a three-year investigation into short sellers' tactics. Prosecutors also allege Left concealed ties to hedge funds that traded on his early research, sharing profits with him. He denied these allegations to investigators in January 2021.

Despite the allegations, Left has long described himself as a publisher with research protected by free speech. However, prosecutors claim his tactics were deceptive. If convicted, Left faces up to 20 years in prison for each securities-fraud count, 25 years on another fraud charge, and five years for lying to investigators. 

Hong Kong regulators previously banned Left for five years for misleading investors about China Evergrande Group, though his claims were later validated as Evergrande faced financial collapse.

Tyler Durden Fri, 07/26/2024 - 08:50

Fed's Favorite Inflation Indicator Unexpectedly Jumped In June; Savings Rate Slumps

Fed's Favorite Inflation Indicator Unexpectedly Jumped In June; Savings Rate Slumps

The broadly weak trend of US macro data was jolted yesterday by a hotter than expected GDP print - which prompted a hawkish shift in rate-cut expectations. This morning, the doves get another chance for some 'bad news' (disinflation) to support their 'we must cut' narrative (that Dudley et al. have exposed).

The Fed's favorite inflation indicator - Core PCE - instead came in slightly hotter than expected, rising 2.6% YoY (vs +2.5% YoY exp). The headline PCE dipped to +2.5%...

Source: Bloomberg

Under the hood, durable goods deflation continues to drag Core PCE lower while Services costs continue to rise...

Source: Bloomberg

Even more notably, the so-called SuperCore PCE rose 0.2% MoM, which saw YoY rise to 3.43%... which is awkwardly stagnant at elevated levels...

Source: Bloomberg

That is the 50th straight monthly rise in SuperCore prices with Healthcare costs soaring...

Source: Bloomberg

On A MoM basis, income growth was weaker than expected (+0.2% vs +0.4% exp), while spending was +0.3% as expected...

Source: Bloomberg

On a YoY basis, spending continues to outpace incomes...

Source: Bloomberg

Which dragged the savings rate down further...

Source: Bloomberg

All of which takes place against a background of the seventh straight month of rising government handouts (well it is an election year after all)... (which means the savings rate would have puked even more without it)

Source: Bloomberg

Not enough there for the doves...

Tyler Durden Fri, 07/26/2024 - 08:46

ChatGPT Launches AI-Powered Search Engine Prototype

ChatGPT Launches AI-Powered Search Engine Prototype

Authored by Turner Wright via CoinTelegraph.com,

According to OpenAI, SearchGPT will give users a more intuitive search experience, allowing them to ask questions to refine a search as they would using ChatGPT.

OpenAI’s ChatGPT has announced the launch of a search engine, presumably as a potential rival to Google. 

In a July 25 notice, ChatGPT’s website included a page for ‘SearchGPT,’ a prototype “using the strength of our AI models to give you fast answers with clear and relevant sources.”

SearchGPT was not available for all users at the time of publication, as the platform is awaiting feedback from a small group before a full release.

According to the platform, results will be more visual than Google’s and allow follow-up questions to refine a search.

For example, SearchGPT has partnered with publishers and creators, citing sources in relevant search results.

“While this prototype is temporary, we plan to integrate the best of these features directly into ChatGPT in the future,” said OpenAI.

Tyler Durden Fri, 07/26/2024 - 08:20

Futures Rebound From Thursday Rout Ahead Of Core PCE

Futures Rebound From Thursday Rout Ahead Of Core PCE

One day after closing at the lowest level in more than a month, US equity futures have rebounded led by small-caps with tech names also in the green (NVDA +2.4%, META +2.0%, AMZN +1.2%, AAPL +97bp, GOOG/L +72bp). As of 8am ET, S&P futures are 0.8% higher while Nasdaq futs gain 1.1%, suggesting the underlying indexes will pare their weekly slump. Europe’s Stoxx 600 benchmark rose 0.5%. Treasuries and the dollar were little changed..  Bond yields are unchanged ahead of today's core PCE print which is expected to show further easing in inflation. The USD is flat. Commodities are mixed: oil is lower while base metals/gold are higher. Today the key macro focus will be July's core PCE which consensus sees dipping to 2.5% YoY vs. 2.6% prior.

In premarket trading, all the mega cap tech names are higher led by NVDA +2.4% (META +2.0%, AMZN +1.2%, AAPL +97bp, GOOG/L +72bp). 3M jumped 6% after the company raised its full-year profit forecast in a sign of progress as its new chief executive officer looks to reinvigorate the iconic manufacturer after a lengthy period of turmoil. Here are some other notable premarket movers:

  • Baker Hughes climbs 1.9% after the oil-services provider posted a 2Q earnings beat.
  • Biogen falls 6% after European drug regulators rejected an Alzheimer’s drug from the company and Eisai.
  • Bristol Myers climbs 4% as the company raised its 2024 profit forecast after demand for its new medicines helped it beat Wall Street’s 2Q sales estimates.
  • Booz Allen slips 5% after 1Q profit disappointed.
  • Charter Communications gains 11% after posting 2Q profit that beat expectations.
  • Coursera soars 26% after the online educational company reported 2Q revenue that topped the average analyst estimate.
  • Deckers Outdoor rises 11% after the shoe company reported better-than-expected net sales for the first quarter and boosted its earnings per share forecast for the full year.
  • Dexcom plunges 36% after the company cut its full-year sales forecast for the glucose monitoring devices relied upon by type 1 diabetics who need to closely track their blood sugar levels.
  • Insulet rallies 4% after the insulin delivery system maker reported preliminary revenue for the 2Q that exceeded the average analyst estimate.
  • Mohawk Industries rises 15% after the company beat Wall Street estimates for both 2Q earnings and 3Q guidance.
  • Newell Brands rises 7% after boosting its operating cash flow forecast for the full year.

Dip-buyers are finally stepping back into stocks on Friday, a sign that the selloff which took the S&P 500 down almost 2% this week may be starting to ease. High-flying tech shares have been hammered the hardest in recent days amid a broader market retreat as concerns mounted over the scope for a US economic slowdown.

“Everything AI has been sold off,” said Kamil Dimmich, a partner at London-based North of South Capital. “Some of it is definitely justified, but for some stocks there may be opportunities for the longer term investor.”

Traders are now awaiting personal spending data which is expected to show inflation coming closer to the Fed’s target, which would give officials room to cut interest rates. Core PCE inflation is likely to be near 2% on a three-month annualized basis, Bloomberg Economics predict. That said, a soft landing for the US economy could slip away if noisy data delay a rate cut beyond September, according to Bloomberg Opinion columnist Mohamed A. El-Erian.

“We certainly think there is a danger that the Fed is reacting slowly,” given the low US savings rate, said Nick Rees, a foreign-exchange analyst at Monex Europe.
Still, “we doubt today’s data will change many minds on the FOMC. We don’t think the Fed has seen enough yet to cut rates next week,” he said.

Europe's Stoxx 600 rises 0.4%, with all major markets higher, as a frenetic week of earnings is wrapping up and investors are waiting for the Fed’s inflation update. Consumer products and mining stocks lead the gains, while chemicals and food and beverage stocks are among the few sectors in the red. Among indivdual stocks, Birkin bag-maker Hermes gains as the group’s sales figures exceeded estimates, while Nestle extends losses after downgrades at Deutsche Bank and Berenberg. Here are the most notable European movers:

  • Hermès shares rise as much as 5% as the Birkin handbag maker’s earnings reassured investors with sales growth topping estimates.
  • NatWest shares rises as much as 9.1% to an eight-year high after the British bank reported second-quarter figures including a higher-than-expected pretax operating profit.
  • EssilorLuxottica shares jump as much as 8.1% in Paris after the eyewear producer confirmed that Meta Platforms is interested in buying a stake in the company.
  • Drax shares jump as much as 16%, the most since 2020, after the UK electricity generator reported first-half profit described as strong by analysts, and guided that FY24 will be toward the top end.
  • Bureau Veritas shares rise as much as 9.4% after the French goods-inspection company reported faster-than-expected sales growth in 2Q and raised its outlook for the year.
  • Valeo shares gain as much as 7.2% after the car parts manufacturer’s first-half Ebit beat expectations, with Deutsche Bank seeing modest consensus upgrades for the year.
  • Nestle shares extend declines for a fourth straight session after the consumer goods giant was downgraded to hold from buy at Deutsche Bank and Berenberg.
  • Capgemini shares slide as much as 9.4%, the biggest drop since July 2023, as it cut its growth guidance for the full year.
  • Vallourec shares drop as much as 11%, the most since March 2023, after the tubular steel company’s full-year Ebitda guidance came in below estimates.
  • Holcim shares fall as much as 3.8%, the most in a month, after the Swiss cement maker reported its latest earnings.
  • Thyssenkrupp shares fall as much as 9.4% to its lowest in over four years after the German steel producer issued a profit warning on Thursday night.
  • Signify shares decline as much as 9.3%, to a four-year low, after the lighting manufacturing company reported 2Q Ebita that missed the average analyst estimate.

Earlier in the session Asian stocks fell, set to cap a second-straight weekly decline, with heavyweight TSMC sliding as investors continued to rotate out of overheated AI trades while awaiting for key US inflation data. The MSCI Asia Pacific Index declined as much as 0.5%, to its lowest level in more than five weeks, with a gauge of tech stocks the biggest drag. Taiwan dropped the most in the region as trading resumed after disruptions caused by a typhoon. The slide offset gains in Australia, South Korea and India. Chinese shares were mixed.

In FX, the Bloomberg Dollar Spot Index is little changed; the Japanese yen falls 0.2% against the dollar, pushing USD/JPY up to ~154.20. The Swiss franc also falls 0.2%.

In rates, treasuries are steady ahead of US core PCE data for June, with US 10-year yields flat at 4.24%. Yields are mixed on the week with curve steeper as short end benefited from increased conviction on Fed rate cuts this year. Curve spreads slightly wider on the day after 2s10s, 5s30s reached least-inverted or steepest levels since May 2023 on Thursday but failed to sustain the moves and ended at flatter (or more deeply inverted) levels. Bunds underperform gilts and Treasuries across the curve. 

In commodities, oil prices decline, with WTI falling 0.4% to near $78 a barrel. Spot gold rises $8 to around $2,372/oz. Most base metals trade in the green. Bitcoin climbs above USD 67k, with Ethereum also finding its footing and now holding around USD 3.2k.

Looking at today's caendar, US economic data calendar includes June personal income and spending with PCE price indexes (8:30am), July final University of Michigan sentiment index (10am) and July Kansas City Fed services activity (11am) Fed officials have no scheduled appearances until after the next FOMC meeting ends July 31.

Market Snapshot

  • S&P 500 futures up 0.7% to 5,478.50
  • STOXX Europe 600 up 0.6% to 511.45
  • MXAP down 0.4% to 178.38
  • MXAPJ down 0.1% to 557.98
  • Nikkei down 0.5% to 37,667.41
  • Topix down 0.4% to 2,699.54
  • Hang Seng Index little changed at 17,021.31
  • Shanghai Composite up 0.1% to 2,890.90
  • Sensex up 1.4% to 81,132.86
  • Australia S&P/ASX 200 up 0.8% to 7,921.27
  • Kospi up 0.8% to 2,731.90
  • German 10Y yield +3.7 bps at 2.45%
  • Euro little changed at $1.0844
  • Brent Futures little changed at $82.31/bbl
  • Gold spot up 0.3% to $2,371.48
  • US Dollar Index little changed at 104.43

Top Overnight News

  • Former US President Barack Obama and Michelle Obama announce their support for Kamala Harris' candidacy for the US presidency of the Democratic Party
  • Morgan Stanley commented to institutional clients on Thursday that computer-driven macro hedge fund strategies on Wednesday sold USD 20bln in equities and are set to shed at least USD 25bln over the next week after the stock rout, in one of the largest risk-unwinding events in a decade, according to Reuters
  • While the United States has had a head start on A.I. development, China is catching up. In recent weeks, several Chinese companies have unveiled A.I. technologies that rival the leading American systems. And these technologies are already in the hands of consumers, businesses and independent software developers across the globe. NYT
  • Japan’s Tokyo CPI for Jul cools to +1.5% (ex-food/energy), down 30bp from +1.8% in June and below the Street’s +1.6% forecast. BBG  
  • Apple dropped out of the top five smartphone sellers in China for the first time in four years in the second quarter, with the iPhone losing ground to models from domestic handset makers including Huawei. FT
  • China is considering a tenfold fee increase to curtail high-frequency trading, its latest attempt to rein in some quant strategies deemed by regulators a threat to market fairness. BBG
  • Mercedes dialed back expectations for the year amid an environment characterized by softer demand and intense competition (the stock isn’t doing much as the outlook cut was modest and sentiment is already cautious toward the industry). BBG
  • Trains to and from Paris, including the Eurostar, were disrupted by what authorities called a coordinated sabotage effort ahead of the Olympic Games’ inaugural ceremony. Fires were set off at three critical rail-line nodes. Services won’t return to normal until Monday and at least 800,000 passengers will be affected. BBG
  • JPMorgan Chase has begun rolling out a generative artificial intelligence product, telling employees that its own version of OpenAI’s ChatGPT can do the work of a research analyst. The US bank has given employees of its asset and wealth management division access to a large language model the bank is calling LLM Suite. FT
  • Amazon is developing its own processors to limit its reliance on costly Nvidia chips - the so-called Nvidia tax - that power some of the artificial intelligence cloud business at its Amazon Web Services, the main growth driver. RTRS
  • Elliott published a statement after the close and reiterated its call for a new leadership team at Southwest (“this failed leadership team's announced initiatives – obvious attempts at self-preservation – are simply not credible. Too little, too late is not a strategy. It's time for new leadership”). RTRS

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as risk sentiment in Asia improved with markets finding some composure following the recent sell-off and with some encouragement from stronger-than-expected US GDP data. ASX 200 was led higher by outperformance in the commodity, materials, real estate and energy-related sectors. Nikkei 225 was choppy and briefly rose above 38,000 following mostly softer-than-expected Tokyo CPI. Hang Seng and Shanghai Comp. were varied with the former rangebound as it strived to stay above the 17,000 level, while the mainlained remained lacklustre amid lingering slowdown concerns despite another increased PBoC liquidity effort.

Top Asian News

  • China SASAC said central state-owned enterprises in China are expected to arrange total investment of about CNY 3tln in large-scale equipment upgrades over the next five years.
  • Hong Kong reappointed HKMA Chief Executive Eddie Yue for a term of 5 years effective October 1st.
  • Typhoon Gaemi will start impacting Jiangxi, Hubei, Henan and Hebei provinces over the next three days and will bring powerful storms to affected areas, according to CCTV.
  • Monetary Authority of Singapore maintained the width, centre and slope of the SGD NEER policy band, as expected. MAS said current monetary policy settings remain appropriate and the prevailing rate of appreciation of the policy band will keep a restraining effect on imported inflation. Furthermore, it noted that growth momentum in the Singapore economy should improve in the second half of 2024 and that GDP growth is likely to come in closer to its potential rate of 2–3% for the full year.
  • China reportedly weighs tenfold fee increase on high-frequency traders, according to Bloomberg sources; the final plan is still under revision. China Securities Regulatory Commission and Chinese stock exchanges have consulted some market participants on draft plans to raise a CNY 0.1 (1.4%) fee on buy and sell orders to at least CNY 1 if the transactions meet the threshold of high-frequency trading, sources stated. Accounts with a monthly turnover rate below four times their total holdings may be exempt, to avoid negatively impacting mutual funds using automated trades.
  • Japan's Ministry of Finance reportedly wants the BoJ to cut bond purchases gradually; wants the BoJ to consider bank capacity in bond plan, according to Bloomberg sources

European bourses, Stoxx 600 (+0.6%) opened the session mixed and on either side of the unchanged mark, though sentiment picked up as the session progressed and generally reside near session highs. European sectors hold a positive bias; Consumer Products takes the top spot, propped by post-earning strength in Luxury name Hermes (+3.9%). Basic Resources and Energy are benefiting from strength in underlying metal prices. Chemicals is found near the foot of the pile, after BASF (-2.7%) and Wacker Chemie (-2.1%) both reported weak earnings. US equity futures (ES +0.6%, NQ +0.9%, RTY +1.9%) are entirely in the green, with the NQ and ES regaining their composure after being the subject of heavy selling pressure amid the recent rotation play, which has seen the RTY outperform in the past week. Focus today is on the US PCE at 08:30 EDT / 13:30 BST.

Top European News

  • UK Chancellor Reeves said there is still more work to do on the 'Pillar 1' tax agreement and is optimistic for agreement by autumn, while she wants the tax burden on working people to be lower, but won't make unfunded commitments and will make a statement on Monday about the state of public finances and public spending pressures. Furthermore, Reeves said she is going to fix the fiscal mess that the Tories left and wants fairer, sustainable tax on the wealthy but needs to strike the right balance, as well as noted that Labour wants to be pro-growth and pro-wealth creation, according to Reuters.
  • UK Chancellor Reeves is expected to reveal a GBP 20bln hole in government spending for essential public services on Monday, paving the way for potential tax rises in the autumn budget, according to The Guardian

FX

  • USD is mixed vs. peers with price action a reversal of recent sessions with the dollar faring worse against risk-sensitive currencies and better against havens. DXY remains within Thursday's 104.08-45 range ahead of today's key US PCE data.
  • EUR/USD is currently respecting Thursday's 1.0826-69 parameters with yesterday's base holding above a slew of DMAs; 200 at 1.0818, 50 at 1.0810, 100 at 1.0796. Fresh EZ fundamentals are lacking in today's session with the ECB's SCE passing seeing the 12-month and 3-year projections held at prior levels.
  • GBP is a touch firmer vs. the USD after a session of losses yesterday which dragged the pair from a 1.2913 peak to a 1.2849 low.
  • USD/JPY is back on a 154 handle after Thursday's wild ride. Overnight saw an uptick in Tokyo CPI (ex-fresh food) in the run-up to next week's BoJ policy announcement, which has seen bets of potential action increase throughout the week. A 15bps hike is currently priced at 46%.
  • Both antipodeans are attempting to atone for recent heavy losses alongside a pick-up in risk sentiment

Fixed Income

  • USTs are flat and trade has been rangebound in the run-up to US PCE at 08:30 EDT / 13:30 BST. Focus is on the core metric which is seen in a 0.1% to 0.2% range, a 0.2% figure may not knock the narrative for September easing, but could impact pricing for the remainder of the year.
  • Bunds are lower to the tune of 30 ticks, but remains above Thursday's 131.95 base. There was no reaction to the ECB SCE, which saw 1 and 3-year inflation outlooks maintained.
  • Gilt price action has largely mimicked that of Bunds; currently trading to the bottom end of today's 97.46-97.77 band. Next UK-specific catalyst will be on Monday, where Chancellor Reeves will provide a fiscal update that is expected to show a GBP 20bln funding gap.

Commodities

  • Crude is slightly softer and off overnight highs, in what has been a quiet session thus far. Brent sits in an USD 82.05-71/bbl parameter.
  • Mixed trade across precious metals despite a steady USD, with modest upside seen in spot gold and palladium - albeit with gains capped ahead of US PCE- whilst spot silver underperforms. XAU sits in a current USD 2,355.87-,2379.48/oz intraday parameter.
  • Base metals are mostly firmer and to varying degrees, with risk sentiment having picked up overnight.
  • Hungarian PM aide Gulyas says the oil deliveries issue, with Ukraine, must be resolved by September and there is a risk of fuel shortages unless there is a resolution. No immediate risk to fuel supply.
  • Citi says by Q4, it sees copper back at USD 9,500/t and rallying further to USD 11k/t by early 2025

Geopolitics - Middle East

  • Israel is seeking changes to a plan for a Gaza truce and the release of hostages by Hamas which complicates a final deal, according to sources cited by Reuters. It was also reported that Israeli PM Netanyahu told hostage families that Israel will submit an updated ceasefire proposal to Hamas within two days, according to Axios.
  • US President Biden expressed the need to close the remaining gaps and finalise the Gaza deal as soon as possible during the meeting with Israeli PM Netanyahu, while he also raised the need to remove obstacles to the flow of aid to Gaza.
  • US VP Harris said she had a frank and constructive meeting with Israeli PM Netanyahu and she has unwavering commitment to Israel and its security, while she stands with families of hostages held in Gaza. Harris also expressed serious concerns about the scale of deaths in Gaza and noted that a two-state solution is the only viable path.
  • White House said gaps remain in ceasefire talks but believes they can be closed and it believes they are closer to the ceasefire and hostage deal than ever before.
  • It was expected that there would be a development in the hostage negotiations after the meeting between US President Biden and Israeli PM Netanyahu, while Netanyahu's office informed the members of the mini-ministerial council that there is progress in the swap deal negotiation, according to Al Jazeera.
  • Palestinian government said a Hamas leader in the West Bank died in Israeli captivity, according to Reuters.
  • Houthi-affiliated media reports five US-British raids on Hodeidah airport, according to Sky News Arabia.
  • Syrian Observatory said US warplanes targeted with heavy machine guns the areas of influence of pro-Iranian militias in the countryside of Deir Ezzor, eastern Syria, according to Sky News Arabia.
  • Security source noted missile shelling targeting the vicinity of Ain al-Asad base which hosts international coalition forces, according to Asharq News.

Geopolitics - Other

  • Chinese Foreign Minister Wang said in talks with his Indian counterpart that China-India relations have an important impact beyond the bilateral scope and it is in the interests of both sides to get China-India relations back on track. Wang also said they hope the two sides will work in the same direction and actively explore the correct way for the two neighbouring countries to get along.

US Event Calendar

  • 08:30: June Core PCE Price Index MoM, est. 0.2%, prior 0.1%
    • June PCE Price Index MoM, est. 0.1%, prior 0%
    • June Core PCE Price Index YoY, est. 2.5%, prior 2.6%
    • June PCE Price Index YoY, est. 2.4%, prior 2.6%
    • June Personal Income, est. 0.4%, prior 0.5%
    • June Personal Spending, est. 0.3%, prior 0.2%
    • June Real Personal Spending, est. 0.3%, prior 0.3%
  • 10:00: July U. of Mich. 1 Yr Inflation, est. 2.9%, prior 2.9%
    • July U. of Mich. 5-10 Yr Inflation, est. 2.9%, prior 2.9%
    • July U. of Mich. Sentiment, est. 66.4, prior 66.0
    • July U. of Mich. Expectations, est. 67.5, prior 67.2
    • July U. of Mich. Current Conditions, est. 64.4, prior 64.1
    • 11:00: July Kansas City Fed Services Activ, prior 2

DB's Jim Reid concludes the overnight wrap

The family are going camping for the weekend today without me. This is a mums and kids trip with Dads not invited which is a blessing as my view on camping is that I haven't worked hard for nearly three decades to voluntarily sleep on grass and mud with a bad back. I would normally pack this weekend of freedom with golf but annoyingly I have yet another trapped nerve (neck and elbow) and have lost sensation in my two outer fingers. Yesterday I had about my 30th career MRI scan. All advise on anyone who has come out the other side for such a complaint greatfully received.

Scanning the market rather than my injuries, it's been a rather wild ride over the past 24 hours with a risk-off tone ultimately dominating as the S&P 500 (-0.51%) fell for the sixth time in seven sessions even if futures are making a decent amount of this back in Asia overnight. Equities had initially looked on course for a decent rebound yesterday but slumped later on as the rotation trade away from tech mega caps again took hold. The Mag-7 (-1.06% yesterday) is now down nearly -13% since its record high on July 10, with the small cap Russell 2000 (+1.26%) outperforming it by a remarkable 24pp over this period. Meanwhile, bonds rallied with the 10yr Treasury yield down -4.3bps to 4.24% as rate cut hopes continued to inch higher despite a solid set of US data.

That included a decent Q2 US GDP report, which showed growth was running at an annualised +2.8% in Q2 (vs. +2.0% expected), up from the +1.4% pace in Q1. This pushed back on a building narrative of recent days, which basically implied that the US economy was about to turn sharply lower, and that the Fed needed to cut rates swiftly to prevent that. Indeed, the details from the report were also pretty good, as final sales to private domestic purchasers (which Chair Powell has cited as a good signal of underlying demand) were up by +2.6% for a second consecutive quarter. So it wasn’t as though a good headline number was masking weakness
underneath.

There were also other less dovish data elements. For instance, the GDP release showed that core PCE inflation was running at +2.9% in Q2 (vs. +2.7% expected). So unless there are revisions to April/May, this would imply a hotter than previously expected June number when released today. This will be an important print. Meanwhile, weekly initial jobless claims were down to 235k in the week ending July 20 (vs. 238k expected), and continuing claims were down to 1.851m (vs. 1.868m expected) over the week ending July 13.

Still, viewed across the day as a whole, there was no reversal of Fed easing hopes with some probability of either a move next week or a cut of more than 25bps by the September FOMC with markets pricing in 28.6bps of cuts by then as of yesterday’s close (+0.8bps on the day before). For what it’s worth, the first rate cuts in 2001 and 2007 were both 50bps, although both of those came in the context of imminent recessions. By contrast, when the last cutting cycle began in 2019, the Fed delivered three 25bp moves, until Covid hit in 2020 when they slashed rates more aggressively.

The fact that markets ended the day pricing more cuts perhaps reflects the tightening in financial conditions we’ve seen over the last week, with Bloomberg’s index of US financial conditions falling to its least accommodative level of 2024 so far.

That said the GDP print did cause some intra-day repricing as markets started more dovishly with 31bps of YE 2024 Fed cuts priced in pre-data. The 2yr yield also traded as low as 4.34% early on, its lowest level since early February, but was ultimately unchanged on the day at 4.43% by the close. The long end of the curve did rally on the day, as the 10yr yield fell -4.3bps to 4.24%, while the 30yr yield was down -5.9bps. So there was a decent curve flattening that took the 2s10s back to -19.2bps, which marked a reversal from earlier in the session when it had got as steep as -11.3bps.

For equities, it was a similarly volatile day. They started the day on the backfoot, but the S&P 500 then rallied to as much as +1.2% intra-day before giving up the gains to close -0.51% down. With the rotation theme dominating as mentioned at the top, the headline S&P decline came even as 58% of its constituents were higher on the day, with the equal-weighted version up +0.11%. There was also sizeable sectoral divergence, with energy (+1.47%) and industrials (+0.76%) stocks posting decent gains but information technology (-1.14%) and communications services (-1.86%) slumping. The heightened volatility was little helped by the ongoing earnings season, with notable movers including a -18.36% decline for Ford which had its worst session since the GFC.

Over in Europe, the major indices were all lower, which in large part reflected a catchup to the previous day’s selloff. Indeed, the STOXX 600 was down -0.72% on
the day, but that was actually a decent recovery from earlier in the session, when it had been down -1.66%. Europe did close just before the US market peaked for  he day. The earlier mood wasn’t helped by some disappointing data releases that added to concerns over the health of the European growth cycle. In particular, the Ifo’s business climate indicator from Germany fell to 87.0 (vs. 89.0 expected), which was its third consecutive monthly decline, and the lowest reading since February. And in France, the INSEE business confidence (94 vs 99 expected) fell to its lowest level since February 2021, just before the Covid vaccine rollout.

In turn, this led investors to dial up their expectations for ECB rate cuts. By yesterday’s close, 53bps of cuts were priced by year end (+3.1bps on the day) and 111bps by the June 2025 meeting (+9.0bps). In turn, that helped sovereign bond yields to fall across the continent, with those on 10yr bunds (-2.6bps), OATs (-
2.9bps) and BTPs (-1.7bps) all moving lower.

Overnight, Asian equity markets are mostly recovering after their worst session since mid-April while shrugging off overnight weakness on Wall Street. Across the region, the KOSPI (+0.77%) is leading gains with the Nikkei (+0.50%) also edging higher. Elsewhere, the Hang Seng (+0.05%) and the CSI (+0.06%) are swinging between gains and losses while the Shanghai Composite (-0.19%) is slightly lower. S&P 500 (+0.39%) and NASDAQ 100 (+0. 45%) futures are rebounding again.

Early morning data showed that Japan’s Tokyo CPI core (excluding food) increased from +2.1% y/y to +2.2% y/y in July, in-line with market expectations and marking the third consecutive month of re-acceleration following a dip to +1.6% y/y in April. The data comes as speculation mounts that the BoJ will hike rates next week. Meanwhile, the Japanese yen (+0.08%) has stabilised near a 12-week high of 153.79 against the dollar.

To the day ahead now, and data releases include the US PCE inflation reading for June, along with personal income and personal spending. There’s also the University of Michigan’s final consumer sentiment index for July. From central banks, we’ll get the ECB’s Consumer Expectations Survey for June.

Tyler Durden Fri, 07/26/2024 - 08:05

"Coordinated Sabotage" Paralyzes France's Rail Network As Olympics Begin 

"Coordinated Sabotage" Paralyzes France's Rail Network As Olympics Begin 

A "coordinated sabotage" has paralyzed France's high-speed train network, impacting a quarter million travelers. The number is set to rise to 800k by the end of the weekend, ahead of the opening ceremony of the Paris Olympics.

In a post on X, French state railway company SNCF described the overnight fire and cutting of critical signal cables near the tracks in Courtalain, northern France, impacting services to Paris, as a "massive attack aimed at paralyzing the high-speed line network."

SNCF said a "large number of trains were diverted or canceled" and requested that "all travelers who can postpone their trip and not go to the station."

The French prime minister has pledged to "find and punish" those responsible for the attack on critical infrastructure. 

"Our intelligence services and law enforcement agencies are mobilized to find and punish the perpetrators of these criminal acts," acting prime minister Gabriel Attal said. 

It remains unclear who is behind the sabotage, but some Western media outlets have quickly suggested 'Russia - Russia - Russia.' 

"The sabotage marks a stunning breach of the sweeping security dragnet that France erected to shield the Games from myriad threats, ranging from Islamist terrorist groups to state-sponsored sabotage planned by adversaries such as Russia or Iran," The Wall Street Journal said. 

Jean de Gliniasty, the former French ambassador to Moscow, told French media outlet La Chaîne Info, "We are obviously in a situation of conflict with Russia, and Russia is obviously not going to do anything, and that's an understatement, to help these Olympic Games be a success."

However, an intelligence source told CNN that French intelligence services are also investigating 'the far left.' 

Gliniasty also addressed the far left threat: "There's a tradition in France of black blocs, every time there's a demonstration they destroy, they break things. In fact, France has been facing these problems for several years now, and we haven't managed to solve them. And so now, of course, it's getting out of hand."

Let's not forget that France and the rest of Europe have seen a significant influx of migrants from third-world countries over the years. There is a risk that some of these migrants could be members of known terrorist groups with intentions to destroy the West.

The sabotage incident, with the saboteurs unknown at this point, should be a wake-up call to the US ahead of the elections.

Tyler Durden Fri, 07/26/2024 - 07:54

'Bank Failures Are Almost Certain To Follow': The CRE Crisis Has Gone Nowhere...

'Bank Failures Are Almost Certain To Follow': The CRE Crisis Has Gone Nowhere...

Authored by Mate Suto and Tuomas Malinen via GnS Economics Substack,

Commercial real estate (CRE) issues have been getting more attention this year, causing significant headaches for the banking sector and raising questions about the severity of the situation. Rising vacancy rates, the short maturity of loans, and the loans made during low-interest periods have all contributed to escalating the current predicament. We have written about this several times, and now we aim to explore the problem through the lens of bank balance sheets to determine which ones really suffer under this issue.

To begin with, CRE loans are occupying a large portion of the U.S. banking sector’s entire portfolio (Total Assets), standing at a significant 10%. CRE loans are also regarded as the most widely held loan type among banks, which is confirmed by the fact that the majority of banks (99%) have positive CRE loans. Basically, almost every bank in the U.S. is holding some type of CRE loan on their balance sheets. Therefore, it is no surprise that this is an area warranting close observation, especially because the risks posed by CRE exposure spread quite unevenly between large and small banks.

Figure 1 illustrates the average CRE concentration for banks based on their size, as a share of loans.

Source: GnS Economics, FDIC

Community bankswhich refer to small and medium sized banksemerge as a primary source of concern due to their substantially higher exposure compared to their larger competitors. This is clearly visible in the figure, where, on average, these banks allocate 45% of their loans to CRE, while the largest banks maintain a more cautious concentration of around 12%. This difference is not unexpected, as community banks are inclined to take on more risks due to their lower capital requirements. This seemingly underscores the growing concerns surrounding community banks and their CRE portfolios, and this narrative is also heavily pushed by the media.

However, high CRE concentration alone do not inherently imply problems. The real issue arises from the combination of high concentrations, insufficient reserves, and delinquency issues. Therefore, it is essential to analyze the Coverage Ratio, which compares CRE to reserves for losses (Allowance for Loan Losses) plus Equity Capital.1 This ratio effectively measures the ‘leverage’ in the CRE portfolio. The higher the number, the higher the possible future risk.

Source: GnS Economics, FDIC

Mid-sized banks are hovering at a Coverage Ratio of 300%, while the biggest banks maintain a modest 50%. This disparity seems to strengthen the argument that community banks are the primary issue. However, there is another side to the coin, when we examine Non-Performing Loans (NPLs) in CRE loans, they paint a different picture.

Non-Performing Loans are defined as loans that are either in non-accrual status or 90 days past due. The occurrence of NPLs is increasing across various bank portfolios, and the big banks are not excluded from this trend. The following figure presents the average CRE NPL percentage in CRE loans, categorized by the same bank sizes as previously analyzed.

Source: GnS Economics, FDIC

The biggest banks are definitely the ones which are having NPL issues at the moment, which is even more visible when we look at the Non-farm Nonresidential Non-owner occupied component of CRE. This component is crucial, because a CRE loan is classified as a Non-farm Nonresidential Non-owner occupied if the borrower is making payments primarily from rental income, hence this category is very sensitive to any issue in the sector.

Source: GnS Economics, FDIC

NPLs in the Non-owner component have reached worryingly high levels among big banks, while for the remaining sector, it stands at normal levels for now. As the largest component of commercial real estate loans, the significant spikes in NPLs among big banks will undoubtedly worsen credit conditions in the already troubled CRE market.

Conclusions

The issues with CRE loans have been circulating for some time, but the narrative often focuses on community banks. However, as we observed, identifying the weak links in the banking sector is not straightforward. Small and medium banks undeniably have a higher exposure to commercial real estate (CRE) compared to large banks, but they also have lower levels of non-performing loans.

Nevertheless, the situation is expected to soon reveal its impact. Banks facing increasing problems will raise their provisions, negatively affecting their profitability and, more importantly, the credit market. Bank failures are almost certain to follow, as warned by the Chairman of the Fed, Jerome Powell. Buckle up!

Tyler Durden Fri, 07/26/2024 - 07:20

"She Has Our Full Support": Obamas Endorse Kamala Harris For President

"She Has Our Full Support": Obamas Endorse Kamala Harris For President

With the Democratic corporate media machine fully propping up Vice President Kamala Harris (see: here & here & here) following President Biden's shock announcement on Sunday that he's abandoning his 2024 presidential campaign, it was only a matter of time before former President Obama and former first lady Michelle Obama endorsed VP Harris as the Democratic presidential nominee. 

"Earlier this week, Michelle and I called our friend @KamalaHarris . We told her we think she'll make a fantastic President of the United States, and that she has our full support," Barack Obama posted on X on Friday morning at 0501 ET. 

Barack Obama continued, "At this critical moment for our country, we're going to do everything we can to make sure she wins in November. We hope you'll join us." 

With the Obamas now officially endorsing VP Harris, Axios noted, "All the biggest names in Democratic politics are now officially backing Harris, who is cruising to the nomination just days after President Biden dropped out and endorsed her."

An AP News survey from Tuesday shows that VP Harris has secured the support of enough Democratic delegates to become her party's nominee. Saturday marks 100 days until the November presidential election. 

However, not everyone on the left is enthusiastic about VP Harris becoming the next Democratic presidential nominee.

Black Lives Matter wrote a scathing press release earlier this week, demanding the Democratic National Committee host an informal, virtual snap primary across the country ahead of the DNC convention in August because the installation of VP Harris as the presumptive Democratic nominee, without any public voting process threatens "the integrity of our democracy and the voices of Black voters." 

This week, the Democrat corporate media machine has been running a massive propaganda campaign to sell VP Harris to the American people as a way to 'save democracy'. In doing so and attempting to change the conversation or skew perceptions, media outlets have been oversampling Democrats in national polls to produce favorable outcomes:

Rewriting history to ensure the American people don't remember VP Harris was 'Border Czar' during the worst illegal alien invasion this nation has ever seen. 

The media has been performing triage for VP Harris, who simply doesn't vibe or resonate with the majority of American people. 

Even to the extent that GovTrack - which tracks the voting records of House and Senate lawmakers, has scrubbed a 2019 analysis which ranked then-Sen. Harris as the "most liberalUS Senator.

In the betting odds market, using data provided by PredicIt, the election odds for former President Trump stand around 56, while those for VP Harris are 46. 

And Harris it is... 

Tyler Durden Fri, 07/26/2024 - 06:55

African Countries Are Turning To Gold

African Countries Are Turning To Gold

Authored by Mike Maharrey via MoneyMetals.com,

A growing number of African countries are turning to gold to hedge geopolitical risk and protect against currency losses.

Nigeria, Uganda, Zimbabwe, Madagascar, and several other African nations have made moves to increase gold reserves, bring their gold home, and even back their currencies with the yellow metal. 

South Sudan is the latest country to turn to gold. Last weekend, the country’s central bank governor said he plans to expand the country’s gold reserves.

“We are in the stage of preparing policy documents and studying examples of other countries and lessons drawn.”

Earlier this month, the Ugandan central bank announced a domestic gold-buying program to purchase gold directly from local artisanal miners to help “address the risks in the international financial markets.”

In June, Tanzania announced a plan to spend $400 million on six tons of gold. Tanzania Finance Minister Dr. Mwigulu Nchemba also issued a directive to curb the widespread use of the U.S. dollar in the country.

Nigeria has launched a domestic gold-buying plan to bolster its reserves. In addition to buying locally sourced gold, the Nigerian central bank has announced plans to bring its existing gold reserves back into the country “to mitigate risks associated with the weakening U.S. economy.”

“Economic indicators such as rising inflation, escalating debt levels, and geopolitical tensions have raised apprehensions among Nigerian policymakers about the stability of the U.S. financial system.” 

Last year, the Central Bank of Madagascar implemented a domestic gold purchases program as income from vanilla exports declined.

As an analyst explained to Bloomberg, “Central banks can add gold to their official reserves using their local currency, allowing them to grow reserve assets without having to sacrifice other hard-currency reserves.”

Meanwhile, a presidential candidate in Ghana recently said he would back the country’s currency with gold if he wins the election.

“Ultimately, my goal is that we are going to back our currency with gold and that is where I want us to go, increasingly backing our currency with gold.”

This would follow the lead of Zimbabwe, which created a gold-backed currency earlier this year. The ZiG (Zimbabwe gold; ZiG; ZWG) replaced the Zimbabwean dollar (RTGS; 1980-2008: ZWL). The currency is a “structured currency” backed primarily by gold but also by other forex reserves including U.S. dollars (USD).

To some degree, African leaders and central bankers are trying to fix problems they created by printing too much money and running up dollar-denominated debt.

But they are also concerned about America’s weaponization of the dollar and other risks associated with the greenback including the profligate spending and growing national debt.

A Tellimer (Dubai) emerging market equity strategy told Bloomberg the move makes sense. 

“For countries taking a view that either the price of gold is going to go up, the price of the U.S. dollar is going to go down, or their access to U.S. dollars may be compromised by sanctions then increasing the allocation of gold in their reserves might make sense.”

Tyler Durden Fri, 07/26/2024 - 06:30

These Are America's Cheapest Sources Of Electricity In 2024

These Are America's Cheapest Sources Of Electricity In 2024

In the evolving global energy landscape, renewable sources are becoming increasingly cost effective. Even without subsidies, renewables are often the cheapest option available.

This chart, created by Visual Capitalist's Selin Oguz and Ryan Bellafontaine, in partnership with the National Public Utilities Council, shows which electricity sources are the most and least expensive in 2024, using data by Lazard.

Onshore Wind and Solar: A Bargain with Subsidies

Onshore wind power effectively costs $0 per megawatt-hour (MWh) when subsidies included in the Inflation Reduction Act, such as the Investment Tax Credit, Production Tax Credit, and Energy Community Adder, are applied.

Demand for storage solutions is rising quickly. If storage is included, the minimum cost for onshore wind increases to $8 per MWh. Offshore wind, while more expensive, still presents a competitive option at a minimum of $71 per MWh with subsidies.

*2020 LCOE adjusted for inflation

Solar photovoltaics (PV) have similarly attractive economics.

With subsidies, the minimum cost is $6 per MWh. When including storage, $38 per MWh. Notably, the maximum cost of solar PV with storage has significantly increased from $102 in 2023 to $210 in 2024, although the cost of solar alone is still 83% cheaper in 2024 than it was in 2009, according to Lazard.

The inflation of 2022–2023 took a toll on solar PV and onshore wind, pushing their maximum unsubsidized costs back up to where they were in 2013 and 2015, respectively. However, solar PV dropped by $4 and onshore wind by $2 from 2023–2024.

Fossil Fuels

For gas-combined cycle plants, which combine natural gas and steam turbines for efficient electricity generation, the maximum price has climbed $7 year-over-year to $108 per MWh.

*2020 LCOE adjusted for inflation

Gas peaking plants, used to meet peak electricity demands, remain the most expensive option with a maximum cost of $228 per MWh. Interestingly, the minimum price for these plants has seen a slight dip from $115 to $110 per MWh compared to last year.

The Strange Case of Nuclear Energy

Nuclear energy presents a unique cost structure with the highest minimum cost among all energy sources at $142 per MWh.

However, the economics improve significantly with lifetime extensions of nuclear plants. These extensions reduce the minimum marginal cost of nuclear electricity to $32 per MWh, a cost reduction that 95% of U.S. nuclear plants benefit from.

The cost dynamics of energy production are shifting towards renewables, driven by market forces, technological advancements, and government subsidies, according to Lazard. As renewables become cheaper, they are poised to play a dominant role in the future energy mix, providing both economic and environmental benefits.

Tyler Durden Fri, 07/26/2024 - 05:45

How Freight Fraud Became The Perfect Crime

How Freight Fraud Became The Perfect Crime

By Grace Sharkey of Freightwaves

Freight fraud has become an all-too-familiar term in the transportation and logistics sectors in recent years. Although fraud has long been a challenge in the field, industry experts observe that these criminals have evolved alongside FreightTech, leaving supply chain participants uncertain about who will bear the burden of finding solutions.

Recently, FreightWaves has received numerous reports of sophisticated freight fraud schemes. 

There is the classic double-brokering scheme, in which a carrier who accepted a load from a broker re-brokers it to another carrier without the original broker’s consent, leading to payment disputes, delays and liability issues.

Double brokering can also help fraudulent carriers or brokers steal loads of freight, leaving shippers and logistics providers high and dry when insurance claims are denied.

Retailers are plagued by organized crime rings throughout their supply chains as well.

In the 2023 National Retail Federation Retail Theft study, the group found that retail shrink, or loss of inventory, totaled over $112 billion in 2022, with theft making up two-thirds of that. Seventy-eight percent of retailers in the survey also noted that solving organized retail crime was more of a priority for them than it was a year earlier.

To pull off organized freight crimes, fraudsters have become more adept at identity theft, stealing business information by using phishing emails and taking over load board accounts or even creating new ones to plot and manage these criminal acts.

Most recently, FreightWaves has received reports from multiple carriers showcasing ways scammers are attempting to steal Department of Transportation PINs. This has surfaced in new carrier onboarding tools of fraudulent brokers and a fake New Entrant Safety Audit email purportedly from the Federal Motor Carrier Safety Administration.

“These scams are designed for you to click the link in the email and provide personal information in which the scammer steals info like the DOT PIN and is able to change company information on file with the FMCSA,” said Adam Wingfield, founder of Innovative Logistics Group.

Fraud is not new, but it has evolved

While freight fraud has gained a high level of attention in the media and elsewhere recently, it is not even close to being a new industry phenomenon.

A seasoned freight professional, who asked to remain anonymous for business reasons, told FreightWaves he has been dealing with many of today’s common freight schemes for decades.

The professional entered the industry in the mid-1980s and has held various leadership roles, including as a dispatch manager, operations manager and brokerage manager working at container terminals, tanker divisions, and refrigerated and dry van operations.

He explained that even in the ’80s, double brokering was a major problem even for the load board operations that were posted at individual truck stops.

Christopher McLoughlin, director of compliance at Uber Freight, explained a similar concept.
“We have seen double brokering in different ways,” said McLoughlin, who has decades of risk and operations experience at C.H. Robinson and American Backhaulers. “Sometimes they were doing it to just keep the funds that the broker would pay them and not pay the carrier that actually delivered the load. Sometimes they would double broker just to augment their capacity to fulfill a commitment they can’t live up to. Now we are seeing that same schematic, but not only are they stealing the money on the load but they are now stealing the load itself.”

The anonymous professional and McLoughlin agreed that the current digital environment has created a lack of transparency, enabling fraudulent behavior.

“There is no transparency on who you are engaging with, and there are also high-volume transactions happening and people want to do everything super fast and super quick with no general awareness of who you are engaging with,” McLoughlin explained. 

Added the anonymous freight professional, “We have evolved to the point where they can commit fraud easily online, create a fake insurance company, fake certificates that pass off as real, and now the poor legit broker is liable for the lost cargo and the double freight payment.”

Can it be solved?

Over the past few years, a number of identity and validation technologies have come out, receiving large investments for their promise of helping to mitigate these crimes. Companies like Highway, Carrier Assure, Verified Carrier and FreightValidate offer different strategies to help shippers and brokers make educated decisions and bring the transparency that McLoughlin and the freight veteran both mention.

Most individuals FreightWaves spoke to have found that while these technologies can help, they are not solving the problem.

Don Everhart, chief technology officer at FreightVana and a past tech leader at Knight-Swift Transportation, explained that his current company has adopted an approach of using everything at his disposal to de-risk against fraud and other cybersecurity issues.

“Adoption of a zero-trust framework has helped bridge that gap as we work to verify identity authorization on every interaction,” Everhart told FreightWaves. “We use several platforms in the space that have their specific strengths and weaknesses. In my personal network, I can’t think of a single company only utilizing one fraud prevention or vetting platform.”

Is the government helping?

While the technology is working toward providing the industry relief, leaders have been looking to regulators for answers.

The FMCSA, an agency of the U.S. Department of Transportation, oversees double-brokering schemes. Through the 2012 Motor Carrier Protection Act, also known as MAP-21, it gained the authority to assess civil penalties of up to $10,000 per incident.

But a court decision in 2019 has made the situation more complicated.

Known as the Riojas decision, a case centered around violations by a motor carrier company raised questions about appropriate enforcement and prosecution authority. The FMCSA typically handled regulatory compliance and civil enforcement, but the nature of the violations in this case necessitated criminal prosecution.

The court’s interpretation emphasized that the FMCSA, while capable of imposing civil penalties, did not have the legal infrastructure to handle criminal cases. The DOJ, with its legal expertise and resources, was deemed the appropriate authority for such matters.

“Without statutory authority to assess civil penalties administratively for violations of FMCSA’s commercial regulations, the FMCSA’s ability to effectively enforce these regulations is significantly limited,” said the agency in its recent “Unlawful Brokerage Activities Report.” “Unless a regulated entity that violates FMCSA’s commercial regulations voluntarily resolves its noncompliance, FMCSA must refer cases to the [Department of Justice] for enforcement of those regulations. The need to refer cases to the DOJ complicates and hampers the ability of FMCSA to enforce the Agency’s commercial regulations, including those regarding unauthorized brokerage.”

The FMCSA did note that even with its limited authority, it reviewed 35 household goods brokers in four states in 2023, finding 166 violations, closed over 540 complaints and issued 17 letters of probable violations.

Until its ability to assess civil penalties was curtailed, it did issue 20 notices and penalties between 2014 to 2019.

FreightWaves reached out to both the FMCSA and the DOJ to learn more about how these notices are shared with the public and how both entities plan to increase public outreach on fraud-related issues. Neither responded prior to publication.

The comment in FMCSA’s report that confused most leaders FreightWaves spoke to, though, was this:

“FMCSA is still assessing the relationship between motor carrier safety and incidence of unlawful brokerage. While the Agency has received multiple expressions of concern from stakeholders regarding fraud related to ‘double brokering,’ it lacks data to quantify or confirm a safety impact.”

“I disagree completely with the statement,” said Everhart. “The industry is happy to provide data; the challenge to the agency is what recourse do they have?”

Said McLoughlin: “We’ve been working with the [Transportation Intermediaries Association], and when we have double-brokering incidents, we are reporting them through the clearinghouse. … We’re willing to work with [FMSCA] if there’s specific data points that they need to know that we’re not providing. We’d love to have feedback. The TIA has fed tens of thousands of these reports into that clearinghouse, and we have yet to see action on a single one. So if we’re continuing to put these reports in and we’re not providing the right information, I’d love to have that conversation of what information is necessary to gain that transparency.”

The Owner-Operator Independent Drivers Association told FreightWaves it found the response comical, stating FMCSA plays a role in creating the problem.

“It’s infuriating but also kind of the way it is. When the industry was deregulated, they opened the doors to everyone – good and not so good,” said Todd Spencer, president of OOIDA. “The ball is missed by not doing more upfront scrutiny of those you grant authority to do business.”

Is it the perfect crime?

With a lack of technology to find these bad actors and policing agencies pointing the finger at each other’s jurisdictions, has freight fraud become the perfect crime?

FreightWaves discussed the evolution of freight crimes with another technology leader and expert in the industry who wished to stay anonymous for fear of retaliation.

“Unfortunately, in many cases it is viewed as a victimless crime because it is B2B, jurisdiction is rarely clear, and no specific entity is handling all the caseload,” the source explained. “Depending on the fraud vector and specific crime, it may be handled by local law enforcement, a sheriff’s department or the FBI. Another challenge is that many times it gets grouped with cybercrime because of the nature of the attacks, which has an overwhelming case volume and limited resources.”

Even McLoughlin shared that Uber Freight has a little over 50 people who focus on deterring these crimes. While FreightWaves was not able to verify the number of representatives at the FMCSA or the DOJ working to fight freight crime, McLoughlin and co-worker Bill McDermott, a freight investigator for Uber Freight with 20 years of experience with the FBI, agreed it would take more resources than the policing authorities are currently using.

“It’d be a great opportunity for a public-private partnership. But like everything I’ve ever worked on in the federal government, it’s about whose name is going to be at the top of that letterhead. At this point in the game, it shouldn’t matter. If one group can come out and try to coordinate this and get that plan sprinkled across the different agencies, we would have a better result in the end,” he said.

Spencer also noted that OOIDA is doing its best to push House Bill HR 8505, which would expand the authority of the FMCSA to assess penalties again.

“These are important issues that won’t be solved without government intervention. Our challenge here at OOIDA is to find the ways to inform and motivate truckers to be politically engaged on these issues. Make the phone calls, send the emails, be persistent,” said Spencer.

Addressing these problems today

If local law enforcement, federal agencies and FreightTech entrepreneurs are of limited help, how do stakeholders prevent freight fraud today?

Everyone FreightWaves spoke to came to the same conclusion: collaboration and transparency at all costs.

McDermott explained that this might mean fessing up when something goes wrong.

“People get embarrassed and don’t want to say, ‘Hey, I’m a victim,’” he said. “Here we take our victories but we take our lumps as well and we try to learn from each scenario. I fall back on the training, experience and connections I made within the bureau and other federal agencies to say, ‘This is what we saw. This was their source and their methods, and this is how they perpetrated the scam. Where have you seen this before?’ From there we can narrow our focus and establish our own internal trip wires.”

The anonymous industry professional explained he would love to see load board providers take a better approach toward verifying users and more quickly removing those who draw complaints. He also said taking an extra step to educate shippers could help prevent a lot of fraud.

“Your shippers need to help verify the carrier that is supposed to be there for pickup. A lot of shippers are also in a hurry to turn loads out. You have to build a relationship with the shipper and explain to them the importance of verifying that it is the correct carrier and the documents and certificates that you shared with them match what the driver has on hand. You want to have another layer of verification in person,” he said.

Nonetheless, the technology expert believes until the crime becomes unappealing to fraudsters, not much will change.

“The way to prevent freight fraud is simple. As an industry, we must make it less economically attractive to the bad actors. As long as the reward outweighs the risk, it will remain attractive,” he said.

 

 

 

 

 

 

 

 

 

 

 

Tyler Durden Fri, 07/26/2024 - 05:00

Artificial Intelligence Is Sparking A Copper-Boom In Zambia

Artificial Intelligence Is Sparking A Copper-Boom In Zambia

Authored by Felicity Bradstock via OilPrice.com,

  •  Zambia's copper reserves, boosted by AI-driven exploration, are set to play a crucial role in meeting the surging global demand for electric vehicles and renewable energy.

  • The country has the potential to become a major supplier of copper, reducing reliance on other nations and contributing significantly to its economy.

  • To maximize the benefits of this mining boom, Zambia needs to invest in downstream industries and improve its investment climate to attract further foreign investment.

Zambia is attracting the attention of the world’s energy and mining companies as it shows significant potential for critical mineral extraction. Innovative technologies have helped uncover massive deposits of copper in Zambia, which could help massively expand the country’s mining industry over the next decade. This discovery could help provide the resources needed for the massive clean tech pipeline and make Zambia a critical minerals hub for years to come. 

The digital exploration company KoBold Metals has spent several years developing complex artificial intelligence (AI) technology to enhance mineral exploration activities around the globe. This month, KoBold announced it had likely made the largest copper discovery in over a decade thanks to this technology. The find in Zambia could contribute to the production of 300,000 tonnes of copper annually, worth billions of dollars. When developed, two decades of production in KoBold’s discovery region could provide enough copper to manufacture around 100 million electric vehicles (EVs). A third-party company corroborated KoBold’s claims, agreeing there is significant potential for using AI technology for exploration activities. KoBold hopes to develop a $2.3 billion copper mine in Zambia to commence production by the early 2030s. 

The demand for copper and other critical minerals has been rapidly growing in recent years, a trend that shows no sign of slowing as countries around the globe increase their renewable energy capacity and roll out clean technologies. In 2023, the total copper mine production was estimated at around 22 million metric tonnes, marking a significant increase from 16 million metric tonnes in 2010. Production is expected to increase to around 30 million metric tonnes a year by 2036 as the global demand grows. However, there are fears that this increase in supply will not be enough to meet the rapidly rising demand for the critical mineral.  

In addition to renewable energy development, the demand for copper is expected to increase significantly with the rollout of new technologies, such as AI. Data centres will require vast amounts of copper and other critical minerals in the coming years. This is expected to boost the value of copper substantially. According to Bank of America, supply shortages and the growth in demand could increase the price of copper by 11 percent, to $5.44 per pound by 2026. This is bad news for renewable energy producers but great news for countries with untapped copper deposits, just as Zambia.

New exploration technologies are helping mining companies improve their prospects, advancing exploration practices that have remained relatively unchanged over the last century. In addition, as the U.S. is concerned about its heavy reliance on China for critical minerals, new technologies could help American companies boost their mining capacity and ensure the country’s energy security. Connie Chan, a partner at venture capital firm Andreessen Horowitz, stated, “The more you realize how dependent we are on these technologies, the more you ask: How the hell were we so slow to the fact that we needed vast amounts of raw material to make it all possible?” 

Recent estimates suggest that Zambia was the world’s 10th largest copper producer in 2023, producing around 4 percent of the world’s copper and increasing its output by 4 percent between 2022 and 2023. Production in the southern African country increased at a CAGR of 2.68 percent between 2017 and 2022 and is expected to grow at a CAGR of 2 percent between 2023 and 2027. Chile, Peru, the Democratic Republic of the Congo (DRC) and China are currently the world’s biggest copper producers, but there is major potential for Zambia to further develop its resources. First Quantum Minerals, Barrick Gold and Glencore are among the major producers operating in Zambia. 

Copper exports contribute over $6 billion of Zambia’s annual revenue. However, there is great potential for growth according to a recent report from the London School of Economics' International Growth Centre (IGC). The industry mainly centres around extraction and early-stage refinement at present, but greater value could be added through the development of Zambia’s downstream activities. Most of Zambia’s copper comes from 10 mines in its Copperbelt province, with new discoveries slowly expanding production to other areas of the country. The IGC suggests that Zambia could attract higher levels of foreign investment in its minerals industry by improving its tax regime, which is currently unstable, and has deterred investors in the past. The IGC report also encourages Zambia to deepen ties with neighbouring DRC to establish a special economic zone (SEZ) to attract investment and create a manufacturing sector to add greater value. 

Zambia’s copper mining industry is expected to grow significantly in the coming years, following several successful production years. New technologies, like the AI tech being used by KoBold, could help enhance exploration activities in Zambia to boost production as the global demand for copper rises. In addition, there is significant potential to add value to the sector through the development of its downstream activities and greater collaboration with neighbouring producers the DRC.

Tyler Durden Fri, 07/26/2024 - 04:15

To Hell With The Will Of The People...

To Hell With The Will Of The People...

Via ReMix News,

The globalist left is increasingly unscrupulous in its disregard for the voters’ choice.

The third-strongest faction, the Patriots for Europe, will not have a single official in the European Parliament. It won’t happen, because the globalist-Jacobin majority —which, for the sake of simplicity, is mostly called “the left” — is violating all written rules and customary law and ignoring the will of the people and has now prevented it. The Ursulas announced that, in their opinion, the sovereigntist faction — largely created by Viktor Orbán— is far-right and, as such, anti-Europe, anti-progress and anti-humanity, and therefore should be quarantined, isolated and suffocated. 

There is no talk of their deportation yet, but based on the dynamics of events, this may even happen in a few years.

Germany's Manfred Weber, of the group of the European People's Party listens during a press briefing at the European Parliament in Strasbourg. (AP Photo/Jean-Francois Badias)

So the Patriots get nothing, let alone positions — perhaps even eventually a few bullets, like Fico and Trump. This is how people’s representation “works” for the champions of democracy in Brussels.

In fact, one of the pillars of Ursula von der Leyen’s forthcoming five-year EU commission presidency will be to break down resistance to the imperialism of the EU, to remove the veto of small states, especially the meddling Hungary. If there is no veto, everyone will do what the big ones want. In other words: “Shut up!”

Now, imagine for a moment that in the Hungarian parliament, opposition parties could not nominate vice-presidents to head the House, could not have committee chairs and vice-chairs. Obviously, the problem is with the Hungarian conception of democracy, but in this country such a thing has not even been thought of — neither during the period of left-wing nor right-wing governments did anyone think of such a despicable act, such disregard for the will of the electorate. But Brussels has done so without scruples. They take part in this disgusting act and in the meantime, act as if nothing had happened, as they continue lecturing us about democracy, the rule of law, checks and balances.

Where is the respect for the will of the voters? The rule of the people? The principle of popular sovereignty? Of course, we Hungarians have a dictatorship on the rampage, where even with a two-thirds majority from Fidesz, there is always an opposition leader (this time Zoltán Sas, a Jobbik member of the National Security Committee), not to mention the opposition deputy speakers of the National Assembly and many other officials.

So goes the trampling of voters by the European People’s Party (EPP). In order to give the globalists a majority, Manfred Weber, with the spine of a snail, has teamed up with the Bolsheviks — as if he had just been ordered to do so by text message. He lured the more naive right-wingers to his side with blatant lies and nationalist promises, only to be swept away by the left’s agenda.

Even though his voters are fed up with illegal migrants, Weber and his crew do not care — with their approval they will continue to fly and ship millions of Africans and Asians into the continent because the population replacement must continue. Weber is like a hijacker: He has hijacked the right-wing vote. If I say that this figure is a fraud, a scoundrel traitor, a moral lunatic, I am certainly putting it too mildly.

But it’s not just the will of the voters that globalists ignore. A few years ago, during one of the hearings of the show trials against Hungary, the European Parliament failed to get the necessary number of votes for the next “yes” vote, so the vote was repeated the next day, citing “technical reasons.” So it was done. Ursula can roll her dice all she wants at home until she gets the position she wants, it’s a private matter. But the Union is not a flea circus, and we didn’t join it to be the playthings of evil villains who wipe their muddy boots on us every day.

The same was done when the Sargentini report was adopted: Abstentions were not taken into account, in violation of the EU treaties and the European Parliament’s Rules of Procedure, because that was the only way to force through the opening of Article 7 proceedings against our country. Of course, the European Court of Justice later legalized this breach of the law, but there is nothing surprising in that. The law is just a front for them; they are in fact the people’s commissioners of the open society. See their latest gigantic penalty against Hungary in the quota case.

The Ursulas are just puppets, doing whatever the Democratic puppet masters in Washington want them to do. It is therefore theoretically impossible for them to carry out what the majority of European voters want and what they are supposed to have been entrusted with. They are not interested in, and are even irritated by, the fact that the majority of Europeans do not want population replacement, multiculturalism, war, sanctions and war inflation.

In the autumn of 2022, German Foreign Minister Annalena Baerbock summed up perfectly the Western elite’s view of democracy: “But if I promise the people of Ukraine that we will be on their side for as long as they need us, I intend to deliver. No matter what my German voters think.” Really, what do the voters’ opinions matter, right? The will of the people. The people are stupid, but the clever Baerbocks will do it for them. And if all these “smart” Baerbocks happen to start a world conflagration (apparently that’s their goal), so be it. We would have liked to have launched these half-wits into space in time.

Even in the supposed home of democracy, the United States, much is made of the opinion of the electorate, respecting the will of the people. For months, for years, people have been saying how healthy, how fresh and fresh in spirit President (Biden) is. Their soapboxes have been slamming the table, repeating that Biden is not lost in his own backyard, that he is not dozing off during a meeting, that it is all a lie of right-wing propaganda.

My favorite is the “fact-finding” by the Soros group Lakmusz, in which they proved, even in the moments before the fall, that footage of the president wandering around was manipulated.

Then Biden was pushed back from the presidential nomination like a draft. But the operators of the Biden remote control are betting big that millions of Americans put their faith in this old man in the Democratic primaries this spring after all. And when he was put in the Democratic seat, they knew exactly what a desperate state he was in: He was no less stammering and rambling then than he is now. So they had to have it, and the will of the people should be respected. By the way, if Biden is as unfit to run for president as he is now said to be — and as he was in 2020, by the way, but his caretakers denied it then — is he not unfit to run for president for the remaining six months?

It is getting more and more hypocritical, more and more shabby, both over there and here in Brussels. The way they blather on about democracy, the rule of law, diversity and solidarity.

The way they try to make you believe that they are democrats, while if you dare to say anything different from them, they threaten you, blackmail you, take your money and send you to Kyiv. Lately they’ve been talking about expelling us.

Elina Valtonen, the Finnish foreign minister, recently predicted that “Hungary should think about whether it is right for it to be a member of the EU, given its different values.”

OK, we will think about it.

There can be only one thing of value: what they have.

Only one opinion: theirs.

And only one party: the socialist-green-communist-democratic-rainbow coalition.

The future Party.

Everyone else is a Nazi. The cheeky people too, because despite the brainwashing they no longer applaud enthusiastically enough.

Tyler Durden Fri, 07/26/2024 - 03:30

Eight EU Countries Urge Renewed Ties With Assad To Stem Syrian Refugee Tide

Eight EU Countries Urge Renewed Ties With Assad To Stem Syrian Refugee Tide

The last two years have seen a handful of regional Middle East countries reestablish official relations with Syrian President Bashar al-Assad, after launching a decade-long proxy war against him. For example, in May 2023 he was welcomed to Saudi Arabia on an official visit for the first time since the war started, and given the red carpet treatment by the Saudi kingdom. And the UAE is among those which have reopened an embassy in Damascus after nearly 13 years of severed ties.

But the West, led by the US and UK, have still waged a maximum pressure campaign against the Syrian state after Assad emerged victorious in the war which sought to topple him. This has included greatly ratcheted sanctions, especially on energy imports, which has decimated the economy and unleashed runaway inflation. 

Washington has meanwhile under multiple administrations tried to lobby foreign allies to stay the course in isolating Damascus and keeping up the sanctions, despite an occasional Iranian oil tanker offloading to Syria's Mediterranean ports.

Russia's Putin hosted Syria's Assad in Moscow on Thursday, Anadolu via Getty Images

But the tide appears to be turning as a number of European countries, many in the EU and NATO, are increasingly acknowledging that Assad is 'here to stay' and thus they must work with Syria instead of warring against it.

A fresh report in Israel's YNet News says "Foreign ministers from Italy, Cyprus, Slovenia, Slovakia, Austria, the Czech Republic, Greece and Croatia have drafted a position paper calling for a change in the European Union’s approach to Syria, namely lifting sanctions and renewing diplomatic ties with the regime of President Bashar al-Assad."

"Italian Foreign Minister Antonio Tajani and his counterparts argue that the EU’s humanitarian aid policy has failed," the report underscores.

According to some key lines of the document submitted to EU High Representative Josep Borrell:

"After 13 years of war and EU aid, 90% of Syria's population lives below the poverty line, and seven out of ten residents need humanitarian assistance."

"Humanitarian aid alone is not enough. The EU must lift some sanctions against President Assad's regime and engage in diplomatic relations with him. Over the past two years, this issue has been overshadowed by the wars in Ukraine and Gaza, but we must return to it."

Longtime critics of the West's drive for regime change have pointed out the years-long contradiction in policy: the EU allowed arms and ammo to be shipped into Syria (into the hands of anti-Assad jihadist insurgents), all while hand-wringing about the humanitarian and migrant crisis that resulted.

But increasingly these same powers are admitting that sanctions have only served to starve and compound the suffering for the common populace, and have in no way actually weakened the government's grip on the country.

In the oil and gas rich northeast of Syria, a US military occupation has persisted, which former President Trump has admitted was all about 'stealing the oil.' But the Biden administration has consistently said it has no plans to pull troops. Perhaps a future Trump administration might finally get the US out of Syria?

Tyler Durden Fri, 07/26/2024 - 02:45

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