Zero Hedge

National Security In A Second Trump Administration

National Security In A Second Trump Administration

Authored by Dan Greenwood via RealClearPolitics,

After a tumultuous and nearly life-ending July, Donald Trump narrowly retains his lead in the polls. Business leaders would be wise to prepare for a second Trump administration. 

As someone detailed to serve in the White House during my time in the Marine Corps, I know firsthand what national security policy means to President Trump. The 2017 National Security Strategy, Trump’s first-term policies, and his words in and out of office are the best indicators of what a second Trump administration agenda would entail. This amounts to a more expansive view of national security, one that stresses U.S. economic and technological primacy. Great power competition with China would dominate.

A Trump administration would no longer permit China to steal U.S. intellectual property or undercut our industries. Rather, the U.S. would aim to blunt Chinese control of critical minerals and commodities, and end exports here at fire sale prices. Pervasive Chinese misconduct would be met with a vigilant response. Protecting our technological advantages and economic interests would become paramount.  

The threat posed by China is already a bipartisan concern. This is one area where Republicans and Democrats have previously cooperated across the aisle.

Trump will prioritize sustaining and growing America’s technological and innovative edge. Expect him to leverage the power of government to the advantage of U.S. workers and industry, especially in manufacturing. Here, a second Trump term will likely build upon first-term tariffs and export controls.

The past stands as a prelude. In March 2018, President Trump exercised his authority under Section 232 of the Trade Expansion Act. He set a 25% tariff on steel imports and a 10% tariff on imported aluminum. His administration also imposed Section 301 tariffs on more than $300 billion worth of goods from China.

A Trump second term would likely double down on these actions. Many observers project increased tariffs on Chinese goods. A second Trump administration would also likely pressure our European and Indo-Pacific allies to mirror our export control and sanctions regimes vis-à-vis China. President Trump understands that technological supremacy is key to national security.

During his first term, he made a review by the Committee on Foreign Investment in the United States (CFIUS) a strategic imperative. In 2018, he signed into law the expansive Foreign Investment Risk Review Modernization Act (FIRRMA), the most comprehensive CFIUS reform since 2007. Among many CFIUS actions, in early March 2020, he directed a Beijing company and its Hong Kong-based subsidiary to divest their interests in StayNTouch, Inc., a U.S. mobile technology and property-management systems company.

Looking forward, a second Trump Administration would increase CFIUS investigations and declarations while expanding CFIUS oversight to include real estate near military bases and installations. As Trump sees things, China cannot be permitted to endanger national security through seemingly innocuous transactions.

Beyond that, Trump 2.0 will likely focus on Chinese efforts at intellectual espionage and influence at American universities. In 2020, Trump issued his Proclamation on the Suspension of Entry as Nonimmigrants of Certain Students and Researchers from the People’s Republic of China, aiming to prevent U.S. campuses from becoming incubators for the next generation of our adversaries. Future actions will seek to secure our national laboratories and national security-related research programs. 

Trump’s America First vision isn’t isolationism. Rather, it is a rational course of action for advancing U.S. interests while securing the country’s economic and national security priorities, and those of our allies.

If reelected, Trump will likely demand that NATO’s members increase their defense spending. But directing Europeans to take a greater role in defending themselves is different than abandoning a historic alliance, something Trump won’t do.

A Trump administration would look to build on the 2021 Trilateral agreement between Australia, the U.K., and the U.S. (AUKUS). This would bolster U.S. interests in the Pacific as we seek to stand toe-to-toe with China across a broad range of issues. The Pacific is not a Chinese lake. Expanding AUKUS to include Japan and South Korea, even if through bilateral agreements, would be likely.  

AUKUS illustrates Trump’s focus on foreign military sales (FMS) and their positive impact on the economy, the defense industrial base, and allied interoperability.

President Trump will likely demand record defense spending. Restoring America’s strength comes first; deficit hawks must take a backseat.

During his first term, President Trump stabilized and added predictability to defense spending with the 2018 Bipartisan Budget Act. Subsequent years saw ever-increasing defense funding, and this would continue in a second Trump term with particular emphasis on shipbuilding, aircraft, autonomous systems, and long-range weapons.

During his final year in office, Trump sought $34.7 billion to grow and modernize the Navy’s fleet, the largest request of its kind in more than 20 years. Trump’s America First philosophy will both continue to expand our naval capacity and reinvigorate our shipyards for defense and commercial purposes.

Trump’s defense budgets will also include robust investments in artificial intelligence and quantum sciences, areas vital for both U.S. economic and national security. A new Trump administration will invest heavily in funding critical technology research and development at the Pentagon, national laboratories, and private industry. Losing the AI and quantum races to China carries grave national security implications.

Hyperbole and rhetoric will dominate the airwaves for the final three months of the presidential campaign. But business leaders who anticipate the policy-rich national security landscape a second Trump administration promises will be well-positioned to reap the benefits. 

Dan Greenwood served as deputy assistant to President Trump and deputy director of the White House Office of Legislative Affairs from 2017-2019. He previously served as the senior director for Legislative Affairs at the National Security Council. He is a principal at the BGR Group, a Washington, D.C.–based lobbying and communications firm where he leads the Defense and Critical Technologies practice. 

Tyler Durden Wed, 08/07/2024 - 20:05

FBI Raids NY Home Of Ex-UN Weapons Inspector & Anti-War Pundit Scott Ritter

FBI Raids NY Home Of Ex-UN Weapons Inspector & Anti-War Pundit Scott Ritter

On Wednesday the upstate New York home of Scott Ritter was raided by the FBI and state police. The FBI has since confirmed in a statement that this is part of an ongoing federal investigation into Ritter.

Agents were seen entering his house in Delmar, NY in widely shared photographs and local media footage in the afternoon. It was unclear if Ritter was at home at the time and the allegations at the center of the investigation remain unknown.

WNYT Channel 13: FBI search ex-UN weapons inspect Ritter’s home.

"I can confirm FBI personnel are at a home on Dover [Drive] conducting law enforcement activity in connection with an ongoing federal investigation," a statement from the FBI's Albany office confirmed. "As the investigation is ongoing, [Department of Justice] policy prevents me from commenting further." 

Ritter became a prominent figure as the chief UN weapons inspector in the 1990s in Iraq and ex-intelligence official (Marine Corp intelligence) who publicly opposed the George W. Bush administration's drive to take the United States into war with Iraq.

He subsequently became a popular anti-war pundit and leading critic of US foreign policy. For an example of his ongoing criticisms of the US government and foreign policy, he wrote in 2019, "I love my country, but the collective ignorance of the American people empowers so-called public servants who abuse their positions of trust to push policies that further individual agendas at the expense of the nation they ostensibly serve. Fact-based logic no longer matters."

More recently he has been a fierce critic of US policy related to the war in Ukraine, having also made several trips to Russia during the course of the war which began in February 2022. 

Interestingly, just the day prior to the FBI's raid on his home, Ritter posted a photo of himself eating a burger with independent presidential candidate Robert F. Kennedy Jr. "Burgers with Bobby!" the caption reads...

Ritter recently explained during a series of podcast appearances that US Customs and Border Protection (CBP) had seized his passport when he was about to board a flight for Russia on June 3rd. This was first revealed by him days later, and he said the State Dept. had no warrant, nor did it offer an explanation upon taking the passport. A report at the time stated:

Scott Ritter, a retired intelligence officer and UN weapons inspector best known for his correct assertion ahead of the Iraq War that Iraq lacked weapons of mass destruction, as well as for his conviction for sex offenses in 2011 and the lengthy subsequent appeal, has asserted that his passport was seized on the orders of the State Department. 

The American Conservative subsequently approached the State Department for comment, and it responded: "We cannot comment on the status of the passport of a private U.S. citizen."

Ritter has offered the following comment in the wake of the Wednesday FBI raid...

Tyler Durden Wed, 08/07/2024 - 19:40

Kentucky Governor Plans To Collect Sales Tax On Gold And Silver Despite New Law

Kentucky Governor Plans To Collect Sales Tax On Gold And Silver Despite New Law

Authored by Mike Maharrey via Money Metals,

Kentucky Governor Andy Beshear has decided he's going to continue collecting sales tax on the sale of gold and silver despite a new law repealing the levy and an attorney general opinion calling his line-item veto of the provision unconstitutional.

Only five other states levy a sales tax on gold and silver.

Initially, Rep. Steven Doan and Rep. John Hodgson introduced a standalone bill to repeal the sales and use tax on gold and silver bullion. The provisions were later inserted into House Bill 8 (HB8), an omnibus revenue and tax bill. 

The provisions in HB8 define “bullion” as “bars, ingots, or coins, which are made of gold, silver, platinum, palladium, or a combination of these metals, valued based on the content of the metal and not its form and used, or have been used, as a medium of exchange, security, or commodity by any state, the United States government, or a foreign nation.” Currency is defined as “a coin or currency made of gold, silver, platinum, palladium, or other metal or paper money that is or has been used as legal tender and is sold based on its value as a collectible item rather than the value as a medium of exchange.”

The House passed the bill 87-9 and the Senate approved the measure 34-0.

Gov. Beshear signed the bill but used a line-item veto to strike out the sales tax exemption for gold and silver. 

If you own gold, you can afford to pay sales tax, Beshear wrote in his veto message. “Tangible goods are the primary basis of the sales tax.”

Unconstitutional Veto?

House and Senate leadership deemed the veto unconstitutional. Under Sec. 88 of the Kentucky Constitution, "The Governor shall have the power to disapprove any part or parts of appropriation bills embracing distinct items, and the part or parts disapproved shall not become a law unless reconsidered and passed, as in case of a bill."

In other words, the governor only has line-item veto power on appropriation (spending) bills.  A line-item veto power does not exist for revenue bills.

Instead of simply overriding the veto, Republican leadership decided to make a political statement and try to give Beshear a black eye. It asked Attorney General Russell Coleman to issue an opinion on the constitutionality of the veto, and he agreed with the legislature's assessment.

“Because the Governor’s veto power must be strictly construed, and because House Bill 8 is not an ‘appropriation bill,’ Section 88 does not empower the Governor to use his line-item veto on it. The Governor’s attempted line-item vetoes of House Bill 8 were nullities, as they exceeded his constitutional authority.”

Based on the AG's (non-binding) opinion, the legislature directed the secretary of state to ignore the veto and enroll the statute. It went into effect on August 1.

Beshear Begs to Differ

Gov. Beshear rejected the AG's opinion and has directed the Department of Revenue to collect the sales tax despite the law technically being on the books.

Beshear spokesman James Hatchett called the AG's opinion "incorrect."

"The very title of the bill at issue says it makes an appropriation. The governor properly exercised his constitutional authority to veto parts of the bill, and previous legal opinions have upheld similar line-item vetoes.”

Hatchett was referring to the first line of HB8:  "AN ACT relating to fiscal matters, making an appropriation therefor, and declaring an emergency." [Emphasis added]

The legal question boils down to whether or not a single appropriation in a revenue bill makes the bill an "appropriation bill."

The National Coin and Bullion Association issued a statement highlighting the dilemma for gold and silver dealers and buyers in Kentucky.

"Retailers are now faced with a challenging decision. Collecting sales tax could result in consumer backlash and potential class action lawsuits for overcharging, while not collecting it might lead to penalties or interest from the Kentucky Department of Revenue. Given the rapidly evolving situation, each dealer must decide whether to charge sales tax on transactions involving bullion and currency starting August 1."

Until there is a legal resolution, which will likely require a lawsuit, Money Metals plans to charge sales tax to Kentucky customers. 

Here is the official position from Money Metals:

"Despite the new tax exemption in state law, the Democrat Kentucky governor and his Department of Revenue are threatening dealers and citizens with legal action if they refuse to pay/remit sales taxes on gold and silver purchases. However, you can avoid taxes if your order is delivered to a state without sales taxes OR when you store your precious metals in your secure account at the Idaho-based Money Metals Depository."

Tyler Durden Wed, 08/07/2024 - 19:15

NASA Head Considers Elon Musk's SpaceX To Save Stranded Boeing Starliner Crew At ISS 

NASA Head Considers Elon Musk's SpaceX To Save Stranded Boeing Starliner Crew At ISS 

On Wednesday, Steve Stich, NASA's commercial crew program manager, informed reporters that mission control still needs to confirm a return date for the crew of the stranded Boeing Starliner spacecraft at the International Space Station. He mentioned that officials are carefully considering their options, including using SpaceX's Crew-9 Dragon to rescue the two astronauts. 

"Our primary option is to return Butch and Sunny on Starliner. However, we have done the requisite planning to ensure we have other options open. We have been working with SpaceX to ensure they are ready to respond with Crew-9 as a contingency," Stich told reporters. 

The two astronauts, Butch Wilmore and Suni Williams, were initially supposed to spend just a few days on the ISS. That has since turned to two months and could stretch to eight months, with a possible return date in February 2025, according to News Week

Stich pointed out, "We have not formally committed to this path, but we wanted to ensure we had all that flexibility in place."

The big story here is that, after two months, Boeing has yet to publicly ask Elon Musk's SpaceX for help. Optically, this would be a significant blow to Boeing's image, especially considering the series of mid-air mishaps involving its 737Max commercial jets. Additionally, it's an election year for the Biden administration, which has been on a crusade against Trump and his supporters, but also is very anti-Musk. Any rescue mission by SpaceX's Dragon spacecraft is undesirable news flow for Democrats.

Last Saturday, we cited a report from Ars Technica, which said there was a "greater than a 50-50 chance that the crew would come back on Dragon." 

Meanwhile, the stranded Starliner spacecraft has created a logjam on the ISS, delaying SpaceX's planned Crew-9 mission, which has been pushed from Aug. 18 to no earlier than Sept. 24, "allows more time for mission managers to finalize return planning for the agency's Boeing Crew Flight Test," NASA wrote in a blog update

Imagine that... Trump's wealthiest supporter could save the day on the ISS. 

Tyler Durden Wed, 08/07/2024 - 18:50

Global Government Is No Conspiracy Theory

Global Government Is No Conspiracy Theory

Authored by Dr. David McGrogan via DailySceptic.org,

We live in an age that is gesturing towards global government. This is not a conspiracy theory; it is something which perfectly respectable politicians, academics, policymakers and UN officials routinely talk about. What is crystallising is not exactly a single world Government, but rather a complicated mixture of aligned institutions, organisations, networks, systems and fora which has sometimes been given the fancy name of a ‘bricolage’ by international relations theorists. There is no centre, but rather a vast and nebulous conglomeration.

This does not mean, though, that global government (or ‘global governance’, as it is more commonly known) is emerging organically. It is being purposively directed. Again, this is no conspiracy theory; it is something that the people involved openly discuss – they hide their plans in perfectly plain sight. And this has been going on for a long time. In the early 1990s, when the Cold War had drawn to a close, the UN convened something called the Commission on Global Governance, which released a final report – called ‘Our Global Neighbourhood‘ – in 1995. It makes for fascinating reading as a kind of ‘playbook’ for what has followed in the field in the 30 years since – establishing as it does a clear rhetorical and argumentative pattern in favour of the global governance project that is repeated to this day.

The basic idea is as follows. In the olden days, when “faith in the ability of Governments to protect citizens and improve their lives was strong”, it was fine for the nation-state to be ‘dominant’. But now the world economy is integrated, the global capital market has vastly expanded, there has been extraordinary industrial and agricultural growth and there has been a huge population explosion. Ours is therefore a “more crowded, interdependent world with finite resources”. And this means we need “a new vision for humanity” which will “galvanise people everywhere to achieve higher levels of cooperation in areas of common concern and shared destiny” (these “areas of common concern” being “human rights, equity, democracy, meeting basic material needs, environmental protection, and demilitarisation”). We need, in short, “an agreed global framework for actions and policies to be carried out at appropriate levels” and a “multifaceted strategy for global governance”.

This is not difficult reasoning to parse. The central argument can be summarised as follows: global governance is necessary because the world is globalising, and that brings with it global problems that need solving collectively. And the logic must be impeccable in the minds of those who are engaged in the global governance project, because what they say has remained essentially the same ever since. Hence, if we fast forward from 1995 to 2024, we find world leaders finalising a revised draft of UN Secretary-General António Guterres’s proposed ‘Pact for the Future’, a memorandum of guiding principles for global governance which will be the culmination of his ‘Our Common Agenda‘ project, launched in 2021. While there is a bit more meat on the bone in this document than there may have been in Our Global Neighbourhood in terms of policy, we see a more-or-less identical argument playing out.

So, once again, we are reminded in this document that we live in “a time of profound global transformation” in which we face challenges that are “deeply interconnected” and “far exceed the capacity of any single state alone”. Since our problems can “only be addressed collectively” we therefore need “strong and sustained international cooperation guided by trust and solidarity” – stop me if you think you’ve heard this one before. Even the substantive concerns at the heart of the ‘Pact for the Future’ are largely unchanged from those cited in ‘Our Global Neighbourhood’: human rights, equity, poverty and sustainable development, the environment, peace and security – the familiar litany. The only thing that has really changed is that in 2024 there has been layered on top a tone of alarmism: “we are confronted by a growing range of catastrophic and existential risks”, the reader is told, “and if we do not change course, we risk tipping irreversibly into a future of persistent crisis and breakdown”. Better get the washing in, then.

To return to my summary from earlier on, the picture being painted by ‘Our Common Agenda’ and the ‘Pact for the Future’ is then just a slightly more elaborate copy of what was sketched out in ‘Our Global Neighbourhood’: globalisation causes certain problems to emerge that have to be governed globally, and therefore we need, so to speak, to be globally governed. And this is presented as a fait accompli; it is indeed “common sense”, as the Secretary-General calls it in ‘Our Common Agenda’. Governing globally is necessary because there are global problems, and that is that – how could one imagine things could be otherwise?

This all brings to mind Michel Foucault’s account of the emergence of the state in early modernity. Foucault describes that emergence as being, in essence, an epistemological or metaphysical phenomenon rather than a political or social one. For the medieval mind, the world’s significance was spiritual – it was a staging post before Rapture, and what mattered was salvation. The world was therefore not so much an empirical phenomenon as a theological one – it was governed not by physics but by “signs, prodigies, marvels and monstrosities that were so many threats of chastisement, promises of salvation, or marks of election”. It was not something to be altered, but was rather a “system of obedience” to God’s will.

However, beginning in the early modern period, there began a great epistemological rupture: it became possible to understand the world as having an existence independent of God, and being organised therefore by what we would nowadays call science. Now, all of a sudden (though obviously the story played out over many generations) the world became something that had temporal rather than spiritual significance, and the people in it began to be seen as not merely souls awaiting the Second Coming, but populations whose material and moral conditions could be improved by action in the world itself. And this meant that people began to imagine that a ruler’s duty was not just to be a sovereign but to ‘govern’ in the sense of making things better in this life rather than the next.

The state as we understand it today, according to Foucault, emerged within these reflections – the apparatus of armies, taxation, courts and so on all existed before this period, but it was only once government was imagined as having the role of governing that it became possible to think about and speak of the state as such; it was only then that it became a “reflective practice”. It thus became:

An object of knowledge (connaissance) and analysis… part of a reflected and concerted strategy, and… began to be called for, desired, coveted, feared, rejected, loved and hated.

The point that Foucault was keen to emphasise, though, was that while states undoubtedly existed and governed, the state was just an “episode” in government and would – the implication obviously follows – some day be superseded. To repeat: the epistemic break ushered in by early modernity, the Scientific Revolution, the Enlightenment and so on transformed the world into an empirical phenomenon, not just particular chunks of territory, and it therefore contained within it the seed of a concept of global or world government: a future in which all of ‘creation’, so to speak, could be brought under the same shared project of material and moral improvement.

Government, then, is not something which the State does per se, but rather something which at a particular period of time simply happened to utilise the state as its instrument. Government is in essence an epistemic phenomenon – it is that activity which conceives of the world as its field of action, as something to be known, understood, studied, manipulated and improved, in the absence or irrelevance of God. At one stage its ambition was limited territorially, chiefly because of technological constraint, but there is no inherent reason for that limit, and as technology has improved such that the globe can now be relatively easily traversed physically and communicatively, so that limitation has disappeared and government is free to imagine its project as genuinely global.

That goes a long way to explaining the first part of the conceptual dynamic that plays out in respect of the global governance project: government can now imagine the world, in a very literal sense, to be something that human reason can know and act upon, and thereby improve. As the preamble to the ‘Pact for the Future’ has it, “advances in knowledge, science, technology and innovation, if properly and equitably managed, could deliver a breakthrough to a better and more sustainable future for all… a world that is safe, sustainable, peaceful, inclusive, just, equal, orderly and resilient”. To repeat: governing is that activity which conceives of the world as its field of action, as something to be known, understood, studied, manipulated and improved, in the absence or irrelevance of God.

To understand the second part of the conceptual dynamic underlying global governance – the fact that that there are global problems that make it absolutely necessary for global governance to exist, and act – we only need to carefully read Machiavelli. Foucault puts Machiavelli at the centre of the story he tells in regard to government and the state, because Machiavelli brings the medieval or pre-modern way of thinking to a resounding end; he asks no theological questions but treats ruling as something that is done only in the name of temporal concerns. He is not interested in the next life; he is interested in this one.

And in particular he is interested in providing advice to a ruler who is taking charge of something new, or afresh – not a ruler who is established but one who has founded, usurped or conquered his throne. Hence, at the very beginning of The Prince, Machiavelli tells us – these are more or less the first words out of his mouth, as it were:

I say, then, that in hereditary states accustomed to the rule of their Prince’s family, there are far fewer difficulties in maintaining them than in new states, for it is sufficient simply not to break ancient customs, and then to suit one’s actions to unexpected events. In this way, if such a Prince is of ordinary ability he will always maintain his state… It is [only] in the new principality that difficulties arise.

So Machiavelli was not interested in providing advice to rulers who were simply maintaining the status quo; his advice was going to be provided to those who set out to rule a new principality. And here the advice is absolutely clear – the new ruler, one who does not inherit his position but somehow comes to occupy it, needs to justify his position somehow; he needs a reason why he should be in charge in the first place, and why he should remain in place. Hence, very simply and straightforwardly:

A wise ruler [in such a position] must think of a method by which his citizens will need the state and himself at all times and in every circumstance. Then they will always be loyal to him.

Governing in modernity, then – in which ‘princes’ will no longer be able to simply point to hereditary or religious justifications for their existence, and are therefore always new in the Machiavellian sense – requires what I once called a “discourse of vulnerability“. It is imperative that it presents its own existence as indeed imperative, so that can maintain its status. It always needs to be making the citizens loyal, through having an account of itself as necessary. And this means discursively constructing the vulnerable population as always in need of government for succour.

You will no doubt have joined the dots already. Since the state is a mere ‘episode’ of government, and since government will necessarily expand its ambition to the entire globe, the same logic underpinning Machiavelli’s discourse of vulnerability in the context of the modern state will also of course hold true in the global arena. It will in short be necessary for global governance to insist precisely on its own necessity at every turn: since we face all sorts of problems that are “deeply interconnected” and “far exceed the capacity of any single state alone”, and since especially we “risk tipping irreversibly into a future of persistent crisis and breakdown” if these problems are not solved, then a global governance framework simply has to come into existence and govern the globe on our behalf. And thus it retains our loyalty and legitimates itself. This is what it governs for: to present government as necessary – globally.

Now that we understand the nature of this discourse, then, we are in a position to subject it to critique.

And we can do this across three axes.

First, we can ask: are the problems identified in global governance circles actually not in the capacity of any single state alone to manage on its own behalf? Or might it be the case that individual states, responsible to their electorates and engaged in the national interest, are better placed to deal with crises that arise than nebulous, unaccountable and opaque networks of global governance actors?

I have on my bookshelf here a collection titled Legitimacy in Global Governance: Sources, Processes and Consequences, edited by Jonas Tallberg and put out by the University of Lund in 2018; its opening paragraph – absolutely standard in academic work of this kind – lists “climate change, internet communications, disease epidemics, financial markets, cultural heritage, military security, trade flows and human rights” as sources of global problems, and includes “uncoordinated climate policies, a fragmented internet, perennial financial crises, transcultural misunderstanding, arms proliferation, trade protectionism and human rights abuses” as the likely results of failing to set up appropriate institutions of global governance accordingly. Well, we might very well ask – are “trade flows” a “global challenge” requiring global coordination through the WTO, or something that individual elected governments should determine for themselves, acting perhaps through bilateral agreements? Is “transcultural misunderstanding” something that we really need global governance to manage on our behalf? Is “military security” not quintessentially a task which sovereign nation states pursue on behalf of their populations?

Second, we can ask: is it true that the problems which purportedly necessitate global governance would lead to “permanent crisis and breakdown” without it? Or is it perhaps more plausible to say that an interconnected world (and it is doubtlessly true that the world is more interconnected than it has ever been in human history) is simply going to be characterised by insoluble problems that are best dealt with as contingencies by individual states? For example, is the likelihood of pandemic disease something that global governance needs to exist in order to control, or is it just a fact of life in the modern era which is best responded to through the plans of state governments based on their particular needs and resources, on an ad hoc basis?

And third – and most importantly – we can ask: is global governance in itself a risk, or a factor which exacerbates existing risks rather than ameliorates them? On the one hand, there is no doubt that global governance, which has a tendency to crystallise groupthink among a relatively thin sliver of globalised political, academic, third sector and business circles, can lead to the worldwide, or near-worldwide, imposition of very foolish public policy. The Covid lockdowns are of course the paradigmatic example of this. To this extent global governance is inherently fragilising: it puts all of the policy eggs in one basket, and thus massively amplifies the threat of breakage.

But on the other hand, the very project of global government brings with it particular, unique risks which global governance enthusiasts naturally tend to overlook. In a recent interview with the Triggernometry podcast, Peter Thiel makes something like this point, in his observation that the biggest risk of all which humanity faces is probably a totalitarian world government which, precisely because it covers the whole world, cannot be escaped. This is the real threat posed by government as such (remembering that it is the state which is the tool of government and not vice versa), and, in representing the extinction of human freedom, it would be far more damaging than any individual pathogen, trade war, environmental disaster or financial crisis.

The question which we really need to ask, in other words, is not whether there are risks that come into existence as a result of the world becoming more interconnected, but rather what those risks really are. And sensible people would come to the conclusion that they are in fact political rather than genuinely ‘existential’ – they come not from the realm of the exogenous but rather emerge from the very project of managing existential risk through global governance itself. To put things very bluntly, a future of “permanent crisis and breakdown” is much more likely to emerge from authoritarian attempts to stave off such a future than the emergence of particular events (pandemics, financial crises, environmental disaster, etc.) in themselves. Our problem, in other words, is government – understood, at the risk of repeating myself, as that activity which conceives of the world as its field of action, as something to be known, understood, studied, manipulated and improved, in the absence or irrelevance of God – and that is precisely a problem that global governance is uniquely incapable of solving.

*  *  *

Dr. David McGrogan is an Associate Professor of Law at Northumbria Law School. You can subscribe to his Substack – News From Uncibal – here.

Tyler Durden Wed, 08/07/2024 - 17:40

Kansas Police Chief Who Led Raid Of Newspaper Violated Law: Prosecutors

Kansas Police Chief Who Led Raid Of Newspaper Violated Law: Prosecutors

Marion, Kansas – A recent investigation into a contentious raid on the Marion County Record newspaper has taken a surprising turn, as district attorneys from Sedgwick and Riley Counties have exonerated the newspaper's staff from any criminal activity - and say the police chief who led the operation broke the law by obstructing their investigation.

A stack of the Marion County Record sits in the back of the newspaper's building in a file image. (John Hanna/AP Photo)

In August, Marion County officers, led by former Marion Police Chief Gideon Cody, executed search warrants at the Marion County Record's office, the home of editor Eric Meyer, and reporter Phyllis Zorn’s residence. The warrants were based on suspicions that the newspaper staff had illegally obtained the driving record of a local restaurant owner.

The investigation revealed that the newspaper staff had not broken any laws. The district attorneys' report highlighted that the driving record, initially provided by a source, was accessed legally through the Kansas Department of Revenue's website with assistance from a department employee.

Phyllis Zorn committed no crime under Kansas law when she obtained the driving record of Kari Newell,” the prosecutors stated. They also confirmed that Meyer had committed no criminal acts.

The report further clarified that the estranged husband of restaurant owner and Marion County Councilwoman Ruth Herbel, along with another local woman who passed the driving record to Zorn and Herbel, did not violate any laws. The driving record was publicly accessible, unaltered, and not used fraudulently.

Prosecutors criticized the investigative process leading to the raid, pointing out that Marion County officers misunderstood how the Kansas Department of Revenue website worked. The officers did not wait for the Kansas Bureau of Investigation's analysis before proceeding with the warrants.

The warrants were the result of a rushed investigative process that hinged on an apparent misconception by Marion County officers about how the Kansas Department of Revenue website worked, the prosecutors determined. The process included not waiting for the Kansas Bureau of Investigation, which had been consulted by Cody, to analyze the allegations before seeking and carrying out the warrants.

Prosecutors said there was no evidence that Cody or the officers committed crimes in crafting and executing the warrants because they thought that the law had been broken. -Epoch Times

"Put another way, it is not a crime under Kansas law for a law enforcement officer to conduct a poor investigation and reach erroneous conclusions," prosecutors wrote.

That said, they did conclude that Cody obstructed justice - for which he could be charged with either a felony or a misdemeanor.

Seth Stern, director of the Freedom of the Press Foundation, argued that Cody should face additional charges. “The raid itself was criminal,” Stern stated. “And Cody is far from the only one at fault here.”

Tyler Durden Wed, 08/07/2024 - 17:20

'State Of Emergency' Declared In Russia's Kursk Region After Ukraine Attack, Locals Angry At Security Failure

'State Of Emergency' Declared In Russia's Kursk Region After Ukraine Attack, Locals Angry At Security Failure

Update(1658ET): The governor of the Russian border region of Kursk on Wednesday declared a "state of emergency" - and also tightened security around a nearby nuclear plant - amid a major ground and cross-border incursion by Ukrainian forces, led by fast moving armored vehicles, all of which kicked off early the day prior.

"To eliminate the consequences of enemy forces coming into the region, I took the decision to introduce a state of emergency in the Kursk region from 7 August," Kursk's acting Governor Alexei Smirnov said Wednesday evening.

The Russian Defense Ministry has described that "the enemy's movement further into Russian territory has been prevented" but that "the operation for the destruction of Ukrainian army units is continuing."

The offensive has been ongoing since Tuesday morning, with Russian officials saying that up to 1,000 Ukrainian troops are involved. While few details have been able to be confirmed, some unverified reports have suggested Ukraine forces plunged as deep as 20km into Russia. Other regional reports say it was a few hundred Ukrainian soldiers leading the incursion.

Damage and civilian casualties on the Russian side are significant enough for locals to be openly angry at the border security failure

A Moscow Times reporter saw residents of border areas in the Kursk region accusing officials of not doing enough to help them on social media.

“Nobody cared about us... the refugees from that ‘country’ [Ukraine] were given everything at once... and [local] people left for nowhere and with nothing,” wrote Lika Ivanova from Sudzha, a town in the Kursk region that came under massive shelling on Tuesday.

Why did our state allow this? If you can't protect your people, do an evacuation. As a result, there are victims again,” Kursk resident Andrei Nezlobin posted on the VKontakte social media platform.

Regional governor Smirnov has confirmed that at this point thousands of people have been successfully evacuated from dozens of towns and villages along the border.

As we reported below, as of Wednesday evening Ukrainian MP Oleksiy Honcharenko announced that the Ukrainian army established control over the Sudzha gas hub, sending EU natural gas prices soaring.

* * *

The Kremlin has announced that its forces thwarted a major ground assault from Ukraine forces into Russia's southwestern Kursk region. President Vladimir Putin called it a "large-scale provocation" which is being defended against for a second day. While the Ukrainian side has remained silent, that fighting in the area of the incursion has raged for two days straight does indeed suggest an attack which is large in scope.

Putin further described the "indiscriminate shelling of civilian buildings, residential houses, ambulances with different types of weapons" amid the assault, and called an emergency meeting of his top defense and security officials. The military is further sending assistance to the Kursk region, which lies over 300 miles from Moscow.

Russian state media has detailed that the cross-border assault began at 5:30am Tuesday morning and involved in initial wave of up to 1,000 militants. Kremlin sources further say that the Ukrainian side suffered at least 315 casualties, including at least 100 killed and 215 wounded.

The chief of the Russian General Staff, Valery Gerasimov, in a briefing given to Putin said the goal of the Ukrainian operation was to take over the Sudzhinsky district of Kursk Region.

There are meanwhile breaking reports the Ukrainian Armed Forces have captured the Sudzha gas measurement station, which is in the center of Sudzhinsky district, according to source RybarEU. European NatGas prices jumped on the news (to their highest since Dec 2023)...

EU Natural Gas

Throughout the war there have been at least two other significant cross-border ground raids involving Ukrainian paramilitaries, but if the numbers are confirmed, this one is by far the largest.

...And clearly the operation had a specifically geopolitical goal related to Russia's hold over European gas (and as evidenced by the following chart, European gas prices are surging relative to US gas)...

In this case, the incursion appears to have been launched utilizing Ukrainian army regular forces and heavy equipment, with the possibility that West-supplied weapons systems were used.

"Ukraine also lost 54 armored vehicles, including seven tanks," Gen. Gerasimov's briefing noted.

Via AP

There does appear to be significant damage and some civilian casualties in the Kursk Region as a result, as Associated Press reports:

The head of the region urged residents to donate blood due to the intense fighting. “In the last 24 hours, our region has been heroically resisting attacks” by Ukrainian fighters, acting Gov. Alexei Smirnov said on Telegram, adding that all emergency services were on high alert.

The same sources is reporting that the Ukrainian shelling has killed at least two people — a paramedic and an ambulance driver — and wounded 24, based on a Russian foreign ministry briefing.

Thousands of Russians have reportedly fled the assault, and the region is still in chaos and under constant shelling.

Ukraine forces have reportedly seized the gas measuring station "Sudzha" on the western outskirts of the city of the same name. Gas is pumped there for transit to Europe.

developing...

Tyler Durden Wed, 08/07/2024 - 16:58

'Do Not Fly' Alert Over Iran Issued For Airlines During Oddly Specific Night Hours

'Do Not Fly' Alert Over Iran Issued For Airlines During Oddly Specific Night Hours

Egypt has just issued a rare and oddly specific NOTAM, or Notice to Air Missions alert, instructing all of its airlines to avoid Iranian airspace for a 3-hour period in the overnight and early morning hours of Thursday. Some other countries have since followed in issuing similar do not fly alerts, including the UK.

"All Egyptian carriers shall avoid overflying Tehran. No flight plan will be accepted overflying such territory," the notice says. Specifically the instructions are valid from 01:00 to 04:00GMT (or 9pm to 12am US Eastern). Will the big expected Iranian retaliation be tonight? Zero hour may be approaching fast.

Tehran file image

NOTAMS alert aircraft pilots to potential hazards along flight paths, and are internationally recognized among aviation authorities.

Reuters has picked up on and reported the NOTAM as well, saying based on Egyptian government sources that Cairo was notified by Iranian authorities that airlines should avoid traversing Iranian airspace due to overnight "military exercises"

According to the citation in Reuters:

"Based on a report from Iranian authorities to all civil aviation companies, flights over Iranian airspace are to be avoided," the unnamed official was quoted as saying.

Many airlines are revising their schedules to avoid Iranian and Lebanese airspace while also calling off flights to Israel and Lebanon as many fear a possible broader conflict after the killing of senior members of militant groups Hamas and Hezbollah.

A flight risk monitor identified as OPSGROUP has further told the same publication that "Such a NOTAM from Egypt is very unusual."

The aviation industry group explained further that "It is possible that this is an indicator of an Iranian response to Israel, and in turn a potentially large set of air space disruptions - at the same time, there may be another reason."

Iran on Wednesday had called an emergency meeting of the 57-member Organization of Islamic Cooperation (OIC), which met in the Saudi city of Jeddah. 

An OIC statement said the assassination of Hamas leader Ismail Haniyeh on Iranian soil on July 31st risks sparking a wider war. "This heinous act serves only to escalate the existing tensions potentially leading to a wider conflict that could involve the entire region," the OIC chair said. Haniyeh’s killing "will not quell the Palestinian cause but rather it amplifies it, underscoring the urgency for justice and human rights for the Palestinian people," it added.

Amid several days of an anticipated major Iranian response against Israel, once it was known earlier in the week that the Islamic Cooperation council meeting had been called for Wednesday, most analysts took that as a sign that ballistic missiles wouldn't be flying at least until then. But with the meeting now concluded, tonight could be the night.

Tyler Durden Wed, 08/07/2024 - 16:40

Jurisdiction-Stripping Or Court-Killing? The "No Kings Act" Is A Decapitation Of The Constitution

Jurisdiction-Stripping Or Court-Killing? The "No Kings Act" Is A Decapitation Of The Constitution

Authored by Jonathan Turley,

Senate Majority Leader Chuck Schumer (D., N.Y.) has introduced the “No Kings Act” with great fanfare and the support of most of his Democratic colleagues. Liberal groups have heralded the measure to legislatively reverse the ruling in Trump v. United States. 

It is obviously popular with the press and pundits. It is also entirely unconstitutional in my view.

The “No Kings Act” is not just a cynical abdication of responsibility by Democrats, but would constitute the virtual decapitation of the Constitution.

I have previously written about the false claims made about the Supreme Court’s decision by President Joe Biden, Vice President Kamala Harris and other leading democrats. The press and pundits have reached a new level of sensationalism and hysteria in the coverage with MSNBC’s Rachel Maddow even claiming that it was a “death squad ruling.”

The Trump Decision

The Court actually rejected the most extreme positions of both the Trump team and the lower courts.

As it has in the past, the Court adopted a three-tiered approach to presidential powers based on the source of a presidential action. Chief Justice John Roberts cited Youngstown Sheet and Tube Co. v. Sawyer, in which the court ruled against President Harry Truman’s takeover of steel mills.

In his famous concurrence to Youngstown, Justice Robert Jackson broke down the balance of executive and legislative authority between three types of actions. In the first, a president acts with express or implied authority from Congress. In the second, he acts where Congress is silent (“the zone of twilight” area). In the third, the president acts in defiance of Congress.

In this decision, the court adopted a similar sliding scale. It held that presidents enjoy absolute immunity for actions that fall within their “exclusive sphere of constitutional authority” while they enjoy presumptive immunity for other official acts. They do not enjoy immunity for unofficial or private actions.

Where the coverage has been wildly inaccurate, the No Kings Act is cynically dishonest.

To his credit, President Joe Biden was at least honest in proposing a constitutional amendment to overturn the decision in Trump.  However, that was dead on arrival in Congress since under Article V it would require a two-thirds majority vote in both houses and then ratification by three-fourths of the states.

The Democrats are seeking to circumvent that process with simple majority votes with the No Kings Act.

The bill is being presented as a jurisdiction-stripping measure, not an effort to dictate outcomes.

Congress does have authority to change the jurisdiction of the federal courts.  That authority was recognized by the Court itself in Ex parte McCardle (1869). Chief Justice Salmon Chase ruled that it did have the authority “to make exceptions to the appellate jurisdiction of this court.”

However, Chase also emphasized that the law did “not affect the jurisdiction which was previously exercised” so that prior decisions would remain fully enforceable.

Moreover, shortly after McCardle, the Court ruled in United States v. Klein (1871), that Congress may not use its authority of court jurisdiction to lay out a “rule of decision” for the Supreme Court, or effectively dictate results in court cases.

The No Kings Act

The No Kings Act does more than just strip jurisdiction and makes no secret of its purpose in dictating the outcome of future cases.

It purports in Section 2 to “clarify that a President or Vice President is not entitled to any form of immunity from criminal prosecution for violations of the criminal laws of the United States unless specified by Congress.”

That is a rather Orwellian view of “clarification” since it directly contradicts the opinion in declaring in the very next section that “[a] President, former President, Vice President, or former Vice President shall not be entitled to any form of immunity (whether absolute, presumptive, or otherwise) from criminal laws of the United States unless specified by Congress.”

Schumer and most of the Democratic senators actually believe that they can simply instruct lower courts to ignore a Supreme Court ruling on the meaning of the Constitution. It would undermine the basis of  Marbury v. Madison after 221 years.

To be sure, it is stated in strictly jurisdictional terms. Yet, it crafts the jurisdictional changes to mirror the decision and future immunity claims.

The bill declares that federal courts “may not consider whether an alleged violation of any criminal laws of the United States committed by a President or Vice President was within the conclusive or preclusive constitutional authority of a President or Vice President or was related to the official duties of a President or Vice President unless directed by Congress.”

But the Democrats are not done yet. Section 4 actually removes the Supreme Court from such questions and makes appellate courts the effective highest courts of the land when it comes to presidential immunity:

“The Supreme Court of the United States shall have no appellate jurisdiction, on the basis that an alleged criminal act was within the conclusive or preclusive constitutional authority of a President or Vice President or on the basis that an alleged criminal act was related to the official duties of a President or Vice President.”

Notably, this is one of the wacky ideas put forward by the President’s Supreme Court Commission. After all, why pack the Court if you can just gut it?

Of course, some sponsors like Elizabeth Warren (D., Mass.) want to both pack the Court and strip it of authority. Presumably, once packed, the authority to act as a court would be at least restored with the liberal majority.

By making the D.C. Circuit (where most of these cases are likely to be litigated) the highest court of the land on the question, the Democrats are engaging in the rawest form of forum shopping. The D.C. Circuit is expected to remain in the control of Democratic appointees for years. (The Act expressly makes the D.C. courts the only place to bring a civil action in this area and states that “a decision of the United States Court of Appeals for the District of Columbia Circuit shall be final and not appealable to the Supreme Court of the United States.”)

The Supreme Court of the United States shall have no appellate jurisdiction to declare any provision of this Act (including this section) unconstitutional or to bar or restrain the enforcement or application of any provision of this Act (including this section) on the ground of its unconstitutionality.

But wait there is more.

The No Kings Act reads like a fairy tale read by Democratic senators to their grandchildren at night. Not only would the evil conservative justices be vanquished by a lower court controlled by Democratic appointees, but the bill is filled with other wish list items from the far left. It would strip the Court of the ability to take other cases, to dismiss a criminal proceeding, to suppress evidence, and to grant a writ of habeas corpus, or “the Great Writ” that is the foundation of Anglo-American law for centuries.

The Democrats even legislatively dictate that any review of the law must meet a standard of its choosing. They dictate that “[a] court of the United States shall presume that a provision of this Act (including this section) or the enforcement or application of any such provision is constitutional unless it is demonstrated by clear and convincing evidence that such provision or its enforcement or application is unconstitutional.”  Thus, even the clear and convincing provision of the Act must be subject to a clear and convincing evidence review.

The Death of Marbury?

Again, Democrats are insisting that they are merely changing the jurisdiction of the Court and not ordering outcomes. However, the sponsors make clear that this is meant to “reaffirm that the President is not immune to legal accountability.” Sponsors like Sen. Sheldon Whitehouse (D., R.I.) declared that “Congress has the power to undo the damage of this decision” by a “captured Court.”

The greatest irony is that the Democrats are practically reverting to the position of critics of Marbury v. Madison, who argued that the Framers never intended the Supreme Court to be the final arbiter of what the law means. That principle has been the touchstone of American law since 1803, but the Democrats would now effectively revert to the English approach under the guise of jurisdiction stripping legislation. Before the Revolution, the Parliament could dictate what the law meant on such cases, overriding the courts. On a practical level, the Democrats would regress to that pre-Marbury approach.

Marbury introduced a critical stabilizing element in our system that contributed greatly to the oldest and most successful constitutional system in history. Democrats would now toss much of that aside in a spasm of partisan anger. Calling the No Kings Act a jurisdiction stripping bill does not conceal its intent or its implications for our system.

It is all a rather curious position for the party that claims to be defending the rule of law. The No Kings Act would constitute a radical change in our constitutional system to allow popular justice to be meted out through legislative fiat.

Sponsors like Sen. Jeanne Shaheen, D-N.H., previously promised a “revolution” if the conservatives did not rule as the Democrats demanded. They have now fulfilled those threats, though few expected that they would undo the work following our own Revolution.

Just to be sure that the sponsorship of this infamous legislation is not soon forgotten, here are the senators willing to adopt this Constitution-destroying measure:

Chuck Schumer (D-NY), Mazie Hirono (D-HI), Brian Schatz (D-HI), Ben Ray Luján (D-NM), Jack Reed (D-RI), Richard Blumenthal (D-CT), Tom Carper (D-DE), Peter Welch (D-VT), John Hickenlooper (D-CO), Bob Casey (D-PA), Chris Coons (D-DE), Jeanne Shaheen (D-NH), Tammy Baldwin (D-WI), Jeff Merkley (D-OR), Ben Cardin (D-MD), Dick Durbin (D-IL), Elizabeth Warren (D-MA), Patty Murray (D-WA), Chris Van Hollen (D-MD), Ed Markey (D-MA), Tammy Duckworth (D-IL), Amy Klobuchar (D-MN), Laphonza Butler (D-CA), Sheldon Whitehouse (D-RI), Bernie Sanders (I-VT), Cory Booker (D-NJ), Kirsten Gillibrand (D-NY), Ron Wyden (D-OR), Angus King (I-ME), Martin Heinrich (D-NM), Debbie Stabenow (D-MI), Alex Padilla (D-CA), Gary Peters (D-MI), and Raphael Warnock (D-GA).

*  *  *

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of “The Indispensable Right: Free Speech in an Age of Rage” (Simon & Schuster).

Tyler Durden Wed, 08/07/2024 - 16:20

Stocks Puke Back Overnight Dovish BoJ Gains; Bond Yields & Black Gold Rise

Stocks Puke Back Overnight Dovish BoJ Gains; Bond Yields & Black Gold Rise

For a few brief hours overnight, everything was awesome again after the BoJ folded like a broken lawnchair, dovishly backing away from any rate-hikes until market stability resumed.

USDJPY spiked, equity futures spiked higher, and da bullz jumped in with both hands and feet. All that lasted until the US cash equity market opened and the selling began... was escalated by an ugly 10Y auction, and increasing tensions in Ukraine/Russia and the MidEast.

By the close, all the majors were at the lows of the day with Small Caps and Nasdaq the biggest losers (swinging from +2% to -1%)...

...with US equities and USDJPY completely decoupling...

Source: Bloomberg

Nasdaq/Russell 2000 remains back in its recent range with the rebound stalling...

Source: Bloomberg

The S&P 500 tested up to its 100DMA this morning then plunged back lower...

The Dow actually tested above its 50DMA at the open today, but was them pummeled back below its 100DMA...

Mag7 and 'Most Shorted' stocks were both sold out of the gate after gapping higher at the open.

Goldman's trading desk noted that volumes were muted (tracking -20% vs the trailing 5%) and S&P top of book (liquidity) continues to be extremely poor, sitting around to $4mm level -63% vs the 20dma.

Overall floor is flat, with HFs and LOs both skewing better for sale.

  • LOs better to buy across Tech, Hcare, and Macro Products vs selling Consumer Discretionary and Fins.

  • HFs are better sellers across Hcare, Fins, and Industrial, with short ratios extremely elevated within macro products. HFs buying tech and Comms Svcs.

VIX pushed back higher once again, testing up towards 30...

Source: Bloomberg

Treasury yields were higher across the board today with the long-end unperforming (30Y +8bps, 2Y +3bps), not helped by a very ugly tail at the 10Y auction. Since payrolls, yield have basically roundtripped to unchanged (aside from the 2Y)...

Source: Bloomberg

The 2Y yield was stuck at 4.00% once again...

Source: Bloomberg

Rate-cut expectations dropped for 2025 but were flat for 2024...

Source: Bloomberg

Crude oil pries rallied today with WTI testing up toward $76, well off the six-month lows set earlier in the week...

Source: Bloomberg

The dollar managed modest gains today thanks to the JPY weakness but there was no follow-through...

Source: Bloomberg

The small gain for the dollar meant a small loss for gold on the day (with the precious metal unable to hold above $2400)...

Source: Bloomberg

Bitcoin tested up to around $58,000 overnight but selling pressure hit during the US session...

Source: Bloomberg

Finally, the carnage in commodities continues to send warning messages...

Source: Bloomberg

...with spot commodity prices one-percent away from three year lows, it's not a message of a 'soft landing'.

Tyler Durden Wed, 08/07/2024 - 16:00

On Verge Of Credit Shock: Credit Card Debt Posts Biggest Drop Since Covid Crash As Rates Hit Record High

On Verge Of Credit Shock: Credit Card Debt Posts Biggest Drop Since Covid Crash As Rates Hit Record High

On a day when an early attempt by the BOJ to kickstart the global carry trade by capitulating on Japan's recent mistimed foray into rate hikes, has crashed and burned with stocks tumbling, amid renewed concerns that the US economy is slowing (at least until next week's "surprising" CPI beat), moments ago the Fed poured gasoline on the rising flames when it reported June consumer credit data that was atrocious,  and confirmed our worst fears: the consumer has hit a brick wall.

According to the Federal Reserve's monthly consumer credit report, in June total consumer credit rose just $8.9 billion, below the median estimate of $10 billion, and a material drop from the upward revised May print of $13.9 billion.

But while the total number was not shocking, if confirming the recent declining trend which always signals economic contraction (since without credit, US consumers simply can't spend), it was the composition that was a big surprise.

On one hand, non-revolving credit - which consists of student and auto loans - rose by $10.6 billion, which was the biggest monthly increase since last June.

However, a closer look here reveals that the entire increase here was due entirely to student loans, which are once again being repaid after the Biden repayment moratorium ended in late 2023. Meanwhile, car loans which are critical to keep the US automotive industry in gear, has flatlined. As shown in the chart below, in Q2, student loans increased by $10.7 billion, the biggest quarterly increase since Q3 2023, while car loans actually declined by $9.0 billion, the biggest quarterly decline since Q3 2023.

But while non-revolving credit saw a sizable increase, if entirely due to student loans finally catching up to where they should have been 3 years ago, it was revolving credit (i.e., credit card debt) that was the real shocked, because in June, revolving credit unexpectedly tumbled by a whopping $1.7 billion, the biggest drop since the covid collapse...

... and more ominously, every time there is a sizable drop in this category, some economic calamity either follows or has already started.

To get a sense just how rare it is to get a negative credit card debt monthly change, consider that in the six years prior to the covid crash, the US had recorded just 5 months of negative prints, and all tended to precede major drawdowns in the economy. We expect no less this time.

Of course with the Fed refusing to cut rates - for good reason - the brutal slowdown in new credit card debt is hardly a surprise because in Q2 the average rate interest-bearing credit card accounts just hit a new record high of 22.76%, which is a vivid reminder that while banks are happy to hike credit card rates, they rarely if ever cut them.

Yet with consumers ever more strapped for actual cash and equity, as the personal savings rate in the US has collapsed from over 5% to 3.4% - the lowest since 2022 - in just a few months...

... there is only so much more credit card maxing out that can take place before reality finally sets in, as can be seen in the next and perhaps most striking chart yet: total credit card debt is at an all-time high while the personal savings rate is record low!

Then again, with an election on the horizon - one which ensures that any credit-card fueled spending must be encouraged - don't be surprised if the White House directly orders banks to just ignore soaring delinquency and charge-off rates...

... only for the credit shock hammer to fall on the first day of Trump's new presidency.

Tyler Durden Wed, 08/07/2024 - 15:36

No Debate Required With Natural Gas

No Debate Required With Natural Gas

Authored by David Callahan via RealClearEnergy,

It often feels like common ground is a rare commodity in today’s highly charged political climate, where heated debate emphasizes our differences more often than our shared values. As policy solutions are advanced in the coming months of the election season on key issues related to the economy, national security and the environment, we are reminded that not everything has to be partisan or divisive.

Natural gas transcends political boundaries and arches political divides by providing economic growth, advancing U.S. energy security and making substantial environmental progress. By recognizing the many benefits of this critical energy source, we can forge a path forward that unites perspectives in pursuit of a stronger America.

Nowhere in the country is this partnership, and the opportunities it creates, more apparent than in Pennsylvania.

Producing nearly 20% of America’s natural gas, Pennsylvania exemplifies how embracing natural gas leads to generational economic, consumer and environmental progress. In the twenty years since the first horizontal well tapped into the Marcellus, our state's natural gas resources have attracted new opportunities to our region and uplifted existing industries, all while reducing energy costs, emissions and reliability concerns.

Perhaps it’s the 123,000 high-paying Pennsylvania jobs, $40 billion in a year of economic activity and more than $6 billion paid to landowners in royalties that unites political polar opposites.

It could also be because natural gas drove the largest year-over-year decline in the state’s power sector emissions,  underscoring its importance to a lower carbon future.

As Pennsylvania Governor Josh Shapiro told POLITICO, “it is a false choice to say we have to choose between protecting our planet and protecting our jobs. We can have both.”

Similarly, Pennsylvania State Senator Gene Yaw, who chairs the Senate’s Environmental Resources & Energy Committee, says the state’s natural gas sector “has been a great partner in ensuring consumers have access to the affordable, reliable energy they depend on, along with creating new jobs and economic opportunities.”

Data proves natural gas is a “rare bipartisan issue” for the Keystone State, pollsters at Axis Research said, noting over 68% of Republicans and Democrats in Pennsylvania support continued investment in natural gas.

There’s strong support for the industry in the Commonwealth, because when Pennsylvania’s natural gas sector thrives, so do the people. A good example of the benefits is the more than $2.7 billion generated by the tax on natural gas development that has been distributed to communities in each county, regardless of industry activity.

Consider, for example, that Philadelphia is a direct beneficiary of  the energy produced in Washington, Lycoming or Susquehanna County, receiving approximately $18 million for infrastructure, community development and emergency preparedness yielded since 2012, not to mention the millions in annual home energy savings.

Southeastern Pennsylvania could further benefit from the energy abundance by serving as an LNG export hub, giving the world access to more reliable, low-cost and clean natural gas. After all, natural gas produced under Pennsylvania’s strong environmental regulations, coupled with operator best practices and continuous innovation, is poised to play an even greater role in the global call for low-emissions energy as international buyers seek a certifiably cleaner product.

The Appalachian Basin being the largest and cleanest source of natural gas in the country, if not the world, firmly positions us at the forefront of America’s clean energy advantage with significant job-creating and revenue-boosting potential, especially for workers in the building trades.

To further capitalize on this incredible asset, America elected officials must address stifling regulatory hurdles, tax inequalities and other challenges that hold back the expansion of natural gas development and usage.

And as world events in the past several years have shown, energy and national security are inextricably linked. It is imperative we develop a forward-thinking vision for America's energy future that leverages our natural gas abundance to ensure our nation’s energy security, sustainability, and prosperity.

Of this, there should be no debate.

David Callahan is President of the Pittsburgh, Pennsylvania-based Marcellus Shale Coalition. Learn more at marcelluscoalition.org

Tyler Durden Wed, 08/07/2024 - 14:45

'Stolen Valor': Walz Under Fire For Bailing On Iraq Tour, Then Lying About Combat Deployment

'Stolen Valor': Walz Under Fire For Bailing On Iraq Tour, Then Lying About Combat Deployment

Kamala Harris' VP pick Tim Walz has come under fire over his extreme left-wing policies, from joking about helping illegal immigrants into the country by investing in a 'ladder company,' to signing a law that gives them driver's licenses, to delaying the deployment of the National Guard during the Georger Floyd riots.

Photo by Jim WATSON / AFP via Getty Images

And while there's much more to discuss, Walz has come under the most intense scrutiny for embellishing his military record, when in reality he bailed on his National Guard battalion - instead running off to Congress after learning that he would be deployed to Iraq.

"On May 16th, 2005, [Walz] quit, betraying his country, leaving the 1-125th Field Artillery Battalion and its Soldiers hanging; without its senior Non-Commissioned Officer, as the battalion prepared for war," wrote retired Command Sergeants Major Thomas Behrends and Paul Herr in a 2018 letter posted to Facebook.

The pair further criticized Walz for abandoning the National Guard for Congress despite being fully aware that he could have requested permission from the Pentagon to seek office while on active duty.

And instead of filing the proper paperwork to ensure a smooth transition out of the military, Walz "instead ... slithered out the door," the letter reads, adding that Walz "embellished and selectively omitted facts of his military career for years."

Trump VP pick JD Vance ripped Walz in a press conference, saying "What bothers me about Tim Walz is the stolen valor garbage. Do not pretend to be something you’re not. And if he wants to criticize me for getting an Ivy League education, I'm proud [...] I was able to make something of myself and I would be ashamed if I was him and I lied about my military service like he did." (X via @townhallcom)

What's more, Walz lied - telling a crowd that he was in fact deployed.

"I carried weapons of war in war," he said.

Walz insists he has an "honorable record." 

Tyler Durden Wed, 08/07/2024 - 14:25

Combatting China's Legacy Chip Threat: Time To Revive Section 421

Combatting China's Legacy Chip Threat: Time To Revive Section 421

Authroed by Jonathan Harman & Lillian Ellis via RealClearDefense,

The People’s Republic of China (PRC) has long sought to make geopolitical competitors dependent on it for materials necessary for national security by oversaturating the market with cheap Chinese products. Using that same strategy, the PRC is now looking to gain a monopoly on legacy chips—less advanced microchips required for both civilian and military technology. To combat this and future Chinese market threats to American national security, Congress should reinstate and modernize Section 421 of the 1974 Trade Act to allow the federal government to evaluate and recommend tariffs to the President for specific Chinese imports. 

The PRC has long achieved dominance in international markets by subsidizing strategic industries to overproduce and flood the market with cheap products. Take rare earths as an example. Beginning in the 1980s, cheap Chinese labor and production costs drove out nearly all competing rare earth mines in the United States and abroad. Chinese rare earths now comprise nearly 80 percent of U.S. rare earth imports. 

While China struggles to produce advanced chips that companies like TSMC in Taiwan manufactures, the Chinese Communist Party (CCP) hopes to eventually dominate low-end legacy chip production—chips that are used in everything from everyday appliances to military technology. 

The PRC’s “Made in China 2025” plan, created in 2015, continues to use government subsidies to fund production in strategic industries, like legacy chips, beyond market demand while exporting them at much cheaper prices—with hopes that these market distortions will help realize “the great rejuvenation of the Chinese nation.” 

With the world’s largest capacity for legacy chip production, China’s plan is on track to succeed. In the first quarter of 2024, Chinese legacy chip manufacturing increased by 40 percent and is set to account for 33 percent of the global market by 2027. That figure, according to U.S. Commerce Secretary Gina Raimondo, will likely grow to 60 percent over the next few years.

China gaining dominance in legacy chip manufacturing poses risks to U.S. national security as it creates critical vulnerabilities in U.S. defense industry supply chains. Legacy chips, while rudimentary, are necessary for everything from cars to F-35 fighter jets.

While the U.S. government has taken steps to prevent the PRC from obtaining the tools to produce more advanced chips through the CHIPS Act, it has not addressed Chinese legacy chip production. One way the federal government can curb China’s progress in this industry is by reinstating and modernizing Section 421.

Congress added Section 421 to the US-China Relations Act of 2000—the act that normalized trade with China as it entered the World Trade Organization (WTO)—to establish a “safeguard” against potential disruptions to U.S. producers. This safeguard, which expired in 2013, allowed the U.S. International Trade Commission (ITC) to determine whether specific imports from China posed a significant threat to U.S. domestic industry and recommend tariffs for the President to implement. 

Section 421’s definition of a “threat” is intentionally broad, stating that if a Chinese product is imported into the U.S. “under such conditions as to cause or threaten to cause market disruption to the domestic producers of a like or directly competitive product, the President shall … proclaim increased duties or other import restrictions.” The case for Chinese legacy chips easily satisfies these requirements.

Imposing sanctions does not come without costs. In 2009, President Obama implemented Section 421 on Chinese tire imports—the only time a President has implemented Section 421 recommendations. These tariffs, while successfully reducing Chinese tire imports by 30 percent, led to higher costs for U.S. consumers while companies sourced tires from other global suppliers. 

However, because microchips play such a critical role in U.S. national security, the benefits of Section 421 far outweigh the usual drawbacks of protectionist policy. Indeed, because China’s share of global microchip production is still in its infancy, it is in America’s interest to decouple sooner rather than later. As Liza Tobin, Senior Director for Economy at the Special Competitive Studies Project, noted at the Global Taiwan Institute’s 2023 Symposium: “We in the West have learned the hard way that efficiency maximization shouldn't be the only criteria that determines our trade and investment decisions.” 

While testifying before Congress, Scott Paul, president of Alliance for American Manufacturing recommended reviving Section 421, saying “it would be a smart move by congress.”

Support for Section 421 is bipartisan. Last December, the Select Committee on the CCP released a joint report that recommended restoring Section 421 given its PRC-specific safeguards, explaining that the section does not require the explicit evidence of an unfair trade practice. As ranking member Representative Krishnamoorthi (D-IL) stated, in reference to Section 421: “It’s a trade tool that allows us to impose targeted, quicker counter measures against CCP market disruptions … it is time to revive and modernize Section 421.”

To ensure that a restored Section 421 is successful, it should be coupled with policies that promote domestic industry. As Riley Walters, a senior fellow at the Hudson Institute, said in an email on July 19th, tariffs are generally “a bit of a vicious cycle unless the root of the problem (Chinese overproduction) is addressed.” In the case of legacy chips, Section 421 tariffs could work in tandem with the $2 billion set aside in the CHIPS Act to build up domestic legacy chip manufacturing.

To get around Section 421 tariffs, the PRC could still produce Chinese-made chips elsewhere—a problem the Biden Administration had to resolve after implementing the CHIPS Act. To ensure tariffs are effective, a modernized Section 421 will likewise need to address these potential loopholes. 

While politicians and experts should cautiously proceed with implementing any sort of protectionist policy, a modernized Section 421 would present a unique mechanism for securing America’s supply chains while promoting U.S. producers. The federal government should take these steps now to prevent the U.S. from becoming dependent on its greatest geopolitical rival for legacy chips as well as other products necessary for national security in the future.

Jonathan Harman is a Summer Fellow at the Global Taiwan Institute and student at Brigham Young University. He was previously an intern at the Heritage Foundation’s Center for National Defense.

Lillian Ellis is an intern at the Global Taiwan Institute. She is a recent graduate from Scripps College, where she majored in Politics and minored in Chinese. She has previously worked as a campaign manager in Washington state and as an intern for The Borgen Project.

Tyler Durden Wed, 08/07/2024 - 14:05

I Thought Gold Was A Safe Haven! Why Did It Tank With Stocks?

I Thought Gold Was A Safe Haven! Why Did It Tank With Stocks?

Authored by Mike Maharrey via Money Metals,

And in the blink of an eye, the expectation of a “soft” landing turned into worries about a crash landing!

It was a bloody Monday in the stock market as analysts digested the dreary jobs report released Friday and suddenly discovered the rot in the economy’s foundation.

They fretted that the Federal Reserve waited too long to cut interest rates and worried its lallygagging would tip the economy into a recession.

(I have argued for months that the problem started long before the first Fed rate hike. It began when the central bank decided to keep the easy money spigot wide open for more than a decade. You can read more about that HERE.)

The carnage in the U.S. stock market was widespread.

  • Dow Jones: -1033.99/ -2.6 percent
  • NASDAQ: -576.08/ -3.43 percent
  • S&P 500: -160.23/ -3 percent
  • Russell 2000: -70.15/ -3.33 percent

The selloff wasn’t limited to the U.S. Markets around the globe bled red ink. Some $6.4 trillion was wiped off global stock markets. For instance, Japan’s Nikkei 225 Index plunged 13.2 percent as investors absorbed the recent interest rate hike.

It just goes to show how quickly market sentiment can shift. 

The reasons for the global selloff went beyond worries about the U.S. economy. As a Bloomberg article put it, investors are coming to terms with the fact that they were operating under a lot of erroneous assumptions.

“One thing is clear: the pillars that had underpinned financial-market gains for years — a series of key assumptions that investors across the world were banking on — have been shaken.

They look, in hindsight, a bit naïve: the U.S. economy is unstoppable; artificial intelligence will quickly revolutionize business everywhere; Japan will never hike interest rates — or not enough to really matter.”

So, What Happened to Gold? 

Gold and silver didn’t escape the carnage. 

At its low, the price of gold was down 3.2 percent before rallying later in the day to recover the $2,400 an ounce level. Nevertheless, the yellow metal finished down 1.3 percent on the day.

Silver got pounded even harder, dropping as much as 7.2 percent at its intraday low. Worries about an economic slowdown and an ensuing decrease in silver demand hammered the silver price down.

You might be wondering why gold – supposedly a safe haven – dropped during the broader selloff. Shouldn’t a good haven do well amid market chaos?

In fact, the plunge in the price of gold was perfectly normal given the market conditions. Gold often sells off early in a bear market for stocks.

In 2020, gold had a 3 percent decline multiple times in the early days of the pandemic selloff. In October 2008, gold plunged by more than 7 percent in the early days of the financial crisis.

But why? 

Precisely because gold serves as a hedge.

Investors often liquidate winning gold positions during a sharp downturn to cover stock losses. But gold generally falls less sharply and recovers more quickly – exactly the scenario that played out on Monday.

Here’s how an analyst explained it to Bloomberg: 

Virtually every time there is marked equities weakness, investors who hold gold as a risk hedge will liquidate part of their holdings to raise liquidity against any potential margin calls. When the dust settles, they almost invariably buy it back.”

Margin calls are a big problem for investors during a sharp stock market downturn.

When an account falls below a certain threshold, brokers demand additional deposits of money or securities to bring the account balance up to a required minimum level.

Given gold’s liquidity, investors can quickly sell to raise the cash necessary to cover margin calls.

It’s important to put Monday’s gold selloff into perspective. Even with the downturn, gold hit a record just a few weeks ago, and the yellow metal is still up well over 15 percent on the year with bullish factors firmly in place. 

A recession would likely mean deeper and quicker interest rate cuts. As a non-yielding asset, the mainstream tends to view lower interest rates as positive for gold.

And of course, a return to easy money is a surrender to inflation. In other words, the inflation dragon will likely be resurrected (if you actually believe he is dead).

As far as silver, an economic downturn would temper industrial demand, and the white metal is much more volatile than gold.

But silver is fundamentally a monetary metal, and it tends to track with gold over time. In fact, silver has historically outperformed gold in a gold bull market. For example, during the pandemic, gold increased by about 40 percent, while silver increased by 141 percent.

Whether Monday’s selloff was just a tremor before the earthquake, or the beginning of the great unwind, there are plenty of reasons to be bullish on both gold and silver.

These price dips could be viewed as a buying opportunity.

Tyler Durden Wed, 08/07/2024 - 13:25

Stocks Plunge After Ugly 10Y Auction Tails Bigly

Stocks Plunge After Ugly 10Y Auction Tails Bigly

Amid all the chaos in markets over the past few days, it is perhaps no surprise that 'demand' for bonds would be somewhat weaker. However, today's 10Y auction was very ugly.

The sale stopped at 3.96%, tailing by a little more than 3 bps...

...as bid/cover of 2.32 was the lowest since December of 2022.

In fairness, indirects took down 66.2%, a fairly standard ratio, so there wasn’t a total buyer’s strike from the investor class. With directs taking a somewhat below-average 16%, this left dealers with a higher-than-usual 17.9%.

The 10Y yield broke above its pre-payrolls levels...

...and the surge in yields sent stocks lower, erasing most (or all for The Dow and Small Caps) of the overnight dovish-BoJ gains...

Needless to say, as Bloomberg's Cameron Crise noted, the apparent revulsion for paper below 4% is not bullish, and raises the question of whether bond operators will be happy digesting tomorrow’s $25 billion 30-year sale.

Not helping matters were comments from JPMorgan Chairman and CEO Jamie Dimon, who told CNBC that he was "skeptical that inflation will get back to 2%," adding that a 50bps cut by The Fed "doesn't matter as much as people think."

Tyler Durden Wed, 08/07/2024 - 13:17

White House Believes Iran Backing Down From Israel Strike After Diplomatic 'Blitz'

White House Believes Iran Backing Down From Israel Strike After Diplomatic 'Blitz'

The Washington Post has said that intensive international diplomatic efforts to get Iran to step back from launching a new attack on Israel may be having an effect.

The report cited a "blitz" of diplomatic interventions with both Tehran and Tel Aviv. "It’s urgent that everyone in the region take stock of the situation, understand the risk of miscalculation, and make decisions that will calm tensions, not exacerbate them," US Secretary of State Antony Blinken said following a meeting with Australian Foreign Minister Penny Wong and Defense Minister Richard Marles.

Via AFP

"We’ve been engaged in intense diplomacy with allies and partners, communicating that message directly to Iran. We’ve communicated that message directly to Israel," he described.

Defense Secretary Lloyd Austin coming out of the same meeting Tuesday described that the Pentagon is still on alert, with the possibility still high for an Iranian attack, and with American naval and aerial assets still on standby in the region.

"What I’ve been focused on is making sure that we’re doing everything we can to put measures in place to protect our troops and also make sure that we’re in a good position to aid in the defense of Israel, if called upon to do that," Austin said.

But the White House's messaging of late has been more than just a message of defending Israel "if called upon"; instead, President Biden has definitively promised to come to Israel's military aid in the scenario of a major Iranian and Hezbollah attack.

And US administration officials believe this muscle-flexing on behalf of Israel has caused Tehran leaders to "think twice"

Washington’s willingness to flex its military muscles in the region may also be causing Iran to think twice, according to one senior Biden administration official, who told the Post that Iran "understands clearly that the United States is unwavering in its defense of our interests, our partners and our people."

US Defense Secretary Lloyd Austin has laid out several US military steps in recent days to help defend Israel from possible attacks by Iran and its proxies, and to safeguard US troops, including the deployments of additional fighter jets. He also said the USS Abraham Lincoln aircraft carrier will replace the USS Theodore Roosevelt in the region “later this month.”

Additionally, it has been newly revealed that a dozen F/A-18 fighter jets and an E-2D Hawkeye surveillance aircraft from the USS Theodore Roosevelt have moved from Gulf waters more inward in the Middle East region upon the start of this week.

The past days have also seen sporadic renewed attacks on US bases in Iraq. Austin addressed this threat in his Tuesday remarks, saying "Make no mistake, the United States will not tolerate attacks on our personnel in the region." He additionally asserted that "we remain ready to deploy on short notice to meet the evolving threats to our security, our partners or our interests."

Russia too has joined in the efforts to prevent a regional war from exploding:

Russian President Vladimir Putin has asked Iran’s supreme leader Ayatollah Ali Khamenei for a restrained response to Israel’s suspected killing of the leader of Hamas, advising against attacks on Israeli civilians, two senior Iranian sources told Reuters.

The message, according to the sources, was delivered on Monday by Sergei Shoigu, a senior ally of the Kremlin leader, in meetings with top Iranian officials as the Islamic Republic weighs its response to the assassination of Hamas terror group leader Ismail Haniyeh.

On Wednesday, in a fresh call with France's Macron new Iranian President Pezeshkian has said that if Western countries are truly desirous of preventing war, they must force Israel to halt the "genocide" in Gaza and accept a ceasefire, state media reported.

Tyler Durden Wed, 08/07/2024 - 11:05

Airbnb Shares Plunge On Slowing US Demand As Consumer Downturn Worsens

Airbnb Shares Plunge On Slowing US Demand As Consumer Downturn Worsens

Shares of Airbnb plummeted in premarket trading in New York after the company reported disappointing second-quarter earnings, falling short of Wall Street's expectations, and issued a warning about slowing demand from US vacationers. This development comes amid rising recession risks in the US, with the consumer downturn worsening for the working poor and middle class due to elevated inflation and high interest rates. 

Airbnb warned that it is "seeing shorter booking lead times globally and some signs of slowing demand from US guests." 

Bookings increased 8.7% in the second quarter to 125.1 million, missing analysts' estimates of 126.33 million. Airbnb expects "sequential moderation" of booking growth in the third quarter

In a consumer downturn, vacation spending is some of the first discretionary spending households cut to preserve cash. The problem is, as we've already cited numerous Goldman notes, explaining low/mid-income consumers are under severe financial stress. Airbnb's earnings and dismal outlook are ominous signs that the consumer slowdown will likely worsen through the end of the year. 

Here's a snapshot of second-quarter earnings (courtesy of Bloomberg):

  • Revenue $2.75 billion, +11% y/y, estimate $2.74 billion

  • Gross booking value $21.2 billion, +11% y/y, estimate $21.23 billion

  • Adjusted Ebitda $894 million, +9.2% y/y, estimate $862.3 million

  • Adjusted Ebitda margin 33%, estimate 31.4%

  • EPS 86c vs. 98c y/y

  • Nights and experiences booked 125.1 million, +8.7% y/y, estimate 126.33 million

  • Gross booking value per nights and experiences booked $169.53, +2.1% y/y, estimate $167.96

  • Free cash flow $1.04 billion, +16% y/y, estimate $788 million

Third-quarter estimates reveal "sequential moderation" in booking growth, an indication of consumers pulling back: 

  • Sees revenue $3.67 billion to $3.73 billion, estimate $3.84 billion (Bloomberg Consensus)

  • Sees ADR up modestly Y/Y

  • Sees Adj Ebitda similar to 3Q23 on a nominal basisSees Adj Ebitda margin down relative to 3Q23

Airbnb's shares plunged 15% in premarket trading early Wednesday. If the intraday declines exceed 16%, shares would record the largest-ever intraday decline.

RBC Capital Markets analysts led by Brad Erickson commented on Airbnb's outlook that it "will likely only further stoke the soft consumer thesis." 

Here's what other Wall Street analysts are saying about the earnings report (courtesy of Bloomberg):

Morgan Stanley (underweight)

  • Airbnb's 3Q guidance for room night deceleration and higher marketing spend are important, analyst Brian Nowak says

  • Nowak adds that it speaks "to the choppiness and slowing in overall macro travel demand" as well as the rising cost to forward the company's growth

  • While Airbnb is a well-run company, Nowak says it is continuing to look similar to Booking Holdings, in terms of slowing room night growth, higher marketing spend and investment needed to grow

  • PT cut to $115 from $130

Barclays (underweight)

  • Consensus estimates are likely coming down due to the softer outlook and higher level of marketing in 2H, analyst Trevor Young writes

  • "Normalization in travel demand, some relative val. premium coming out informed our UW, and that seems to be playing out"

  • PT cut to $100 from $110

Baird (neutral)

  • Analyst Colin Sebastian continues to view Airbnb as one of the best-managed and most compelling online marketplaces, but headwinds from current macro conditions challenge visibility

  • That, along with possible margin contraction on incremental marketing investments, leads Sebastian to anticipate "choppy trading" until the short-term market stabilizes

  • PT cut to $120 from $140

Evercore ISI (in line)

  • Both revenue and Ebitda guidance for 3Q were softer than expected due to factors including shorter booking lead times globally as well as signs of slowing demand in the US, analyst Mark Mahaney says

  • PT cut to $125 from $140

Bloomberg Intelligence

  • "Airbnb's guidance for a further deceleration in room-night growth to around mid-single digits in 3Q, after missing 2Q consensus, suggests tapering demand with average daily rates unlikely to be a tailwind for the top line in 2H," analyst Mandeep Singh writes

Meanwhile, just last week, travel website Booking Holdings reported worse-than-expected guidance, pointing out a "mild moderation" across the European travel industry and consumers seeking lower-star hotels and shorter stays (mainly in the US). 

Airbnb's earnings report just confirms that the consumer downturn theme is gaining momentum.

It's only a matter of time before Goldman tells clients to start shorting stocks with exposure to upper-income folks. The bank's analysts have already told clients to short companies with low/mid-consumer exposure

Tyler Durden Wed, 08/07/2024 - 09:05

Knives For Netflix? The Unusual Proposal By German Police Union Chief To Reduce Crime

Knives For Netflix? The Unusual Proposal By German Police Union Chief To Reduce Crime

Authored by Thomas Brooke via ReMix News,

A German police union chief has urged the government to consider a proposal for criminals who hand in knives to receive substantial rewards, including a year’s subscription to the Netflix streaming service.

Jochen Kopelke, the chairman of the police union (GdP), expressed his concern about the rising knife crime epidemic enveloping German cities and called on the federal left-wing administration to think outside the box to tackle the issue effectively.

He proposed an amnesty for all those in possession of a knife willing to hand in their weapons but suggested that a material reward was necessary to incentivize youths in particular to do so.

“For this measure to be effective, the federal government must create serious incentives for those who donate,” said Jochen Kopelke.

“Specifically, that could mean a year of Netflix for the delivery of a banned butterfly knife,” he added.

German law prohibits possession of a knife with a blade length of 12 cm or greater. However, butterfly knives have become the go-to weapon for many, and knife crime has spiraled in recent years.

On Tuesday, surgeons at Berlin’s university hospital, Charité, revealed they treated more victims of knife crime in the first half of this year than they did in the whole of 2023.

The injuries are also more serious with multiple and deeper stab wounds, often inflicted by larger knives, according to Ulrich Stöckle, managing director of the Center for Musculoskeletal Surgery.

“Why is there this increasing trend of violence?” he asked.

One indisputable fact from recently published interior ministry data is that foreign nationals are disproportionately represented in crime stats. Put simply, the sky-high immigration experienced by Germany in recent years has led to higher levels of crime.

Foreign nationals represented 41 percent of all crime suspects in 2023, despite comprising 15 percent of the population.

Specifically analyzing the levels of violent crime for which knife-related attacks fall, a total of 214,000 violent crimes were registered across Germany last year, up 8.6 percent on the previous year.

Last year was also a record for cases involving dangerous and grievous bodily harm reaching 154,000, up 6.8 percent.

It is important to note that anyone who has been naturalized as a German citizen, even if they were born abroad, does not count towards the crime committed by foreigners.

The federal government recently introduced reforms to the country’s citizenship laws to expedite the naturalization process.

Read more here...

Tyler Durden Wed, 08/07/2024 - 08:45

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