Zero Hedge

NATO Flotilla Surrounds Chinese Ship Suspected Of Sabotaging EU Undersea Baltic Cables

NATO Flotilla Surrounds Chinese Ship Suspected Of Sabotaging EU Undersea Baltic Cables

A flotilla of NATO warships has surrounded a Chinese bulk carrier transporting Russian fertilizer for one week amid suspicions of its involvement in sabotaging two undersea fiber optic cables connecting Finland, Germany, Sweden, and Lithuania across the Baltic Sea.

According to The Wall Street Journal, the 225-meter Yi Peng 3 bulk carrier is at the center of the sabotage investigation and threatens to push the limits of maritime law after investigators believe the ship deliberately drug its anchor along the Baltic seabed for more than 100 miles.

Yi Peng 3 departed from the Russian Baltic port of Ust-Luga on Nov. 15. Investigators have shifted focus on whether Russian intelligence officials influenced the captain of the Chinese-owned ship to carry out sabotage on Europe's critical infrastructure.  

One senior European investigator said, "It's extremely unlikely that the captain would not have noticed that his ship dropped and dragged its anchor, losing speed for hours and cutting cables on the way." 

The ship tracking website MarineTraffic shows four NATO ships have surrounded the bulk carrier in the Kattegat Strait. 

We first reported the incident in the early morning hours of Nov. 17, in a note titled "Fault" Strikes Undersea Fiber Cable In Baltic Sea Connecting Finland & Germany. Days later, we reported Danish Navy Hunts Down Chinese Ship Suspected Of 'Sabotaging' Baltic Sea Cables. 

WSJ noted during the incident, "The ship's transponder, which charts its movements on the so-called Automatic Identification System, shut down in what is known as a "dark incident"... and the "ship then continued even as the dragging anchor greatly reduced its speed, according to satellite and other data reviewed by investigators." 

"Given the mild weather conditions and manageable wave heights, the likelihood of accidental anchor dragging appears minimal," analytics company Kpler wrote in a report to WSJ. 

Western intelligence officials don't believe Beijing was involved in the incident. Instead, they suspect Russian intelligence agencies... 

In response to the incident, the Kremlin press office told the Journal, "These are absurd, unsubstantiated accusations." 

More about the ongoing investigation from WSJ:

Under international maritime law, NATO ships can't force the Yi Peng 3 to sail into one of their ports. Swedish and German authorities are negotiating with the ship's owner to obtain access to the vessel and question its crew.

German police also dispatched the Bamberg, a patrol vessel, to investigate one of the incidents with underwater drones. Swedish and Danish ships have also examined the sites on the seabed.

European authorities must tread carefully because of their commitment to the freedom of navigation and upholding international law that underpins global trade, according to several European politicians, as well as security and law-enforcement officials familiar with the probe.

The incident in the Baltics comes just over a year after a Chinese-registered commercial vessel, the Newnew Polar Bear, severed the Balticconnector gas pipeline and fiber optic lines connecting Finland and Estonia with its anchor.

Tyler Durden Wed, 11/27/2024 - 11:45

Court Rejects Request To Sideline Transgender Player From Women's Volleyball Team

Court Rejects Request To Sideline Transgender Player From Women's Volleyball Team

Authored by Zachary Stieber via The Epoch Times,

A male athlete who identifies as a transgender woman can participate in a women’s volleyball tournament starting on Nov. 27, a federal appeals court ruled on Tuesday.

The athlete has been playing since 2022, undercutting an emergency motion for an injunction pending appeal, according to judges on the U.S. Court of Appeals for the 10th Circuit.

“The district court concluded that granting the requested injunctive relief at this late hour would be highly prejudicial and harmful to the defendants. Notwithstanding plaintiffs’ contentions to the contrary, that conclusion appears well supported by the district court’s factual analysis,” U.S. Circuit Judges Nancy L. Moritz and Carlos F. Lucero said.

The player is on the San Jose State University women’s volleyball team, which is taking part in the Mountain West Conference tournament that starts on Wednesday.

A U.S. district judge earlier in the week turned down an emergency request from female players and coaches, including a different player on San Jose State, to block the player from participating in the tournament on the grounds the participation violates federal law guaranteeing equal opportunities in sports.

The players and coaches “have failed to meet their burden to show irreparable harm, a likelihood of success on the merits, or that the balance of harms or equities is in their favor,” U.S. District Judge Kato Crews ruled on Nov. 25.

In an emergency motion to the 10th Circuit, lawyers for the players and coaches said that the case was not brought until recently because the Mountain West Conference (MWC) handbook did not include a “Transgender Participation Policy” (TPP) until Sept. 27.

“Plaintiffs acted appropriately by publicly protesting to bring attention to their concerns through a series of lawful boycotts. Only when the MWC ignored them did Plaintiffs bring a lawsuit, and they did so expeditiously with sufficient time for their claims to be considered in advance of the MWC tournament,” the lawyers said.

The rulings from Crews and the 10th Circuit judges only deal with the emergency motions. The case is still progressing and could lead to a ruling in favor of the plaintiffs.

“Plaintiffs’ claims appear to present a substantial question and may have merit. But plaintiffs have not established clear entitlement to relief, and however potentially meritorious, their showing does not rise to the level of clear entitlement under the appropriate standard,” Moritz and Lucero said.

William Bock, an attorney for the plaintiffs, told news outlets in a statement, “The Court of Appeal’s statement that the Plaintiffs appear to have presented a substantial and meritorious legal claim calls into question the legal reasoning of the district court and confirms Plaintiffs’ conviction that the harm caused to numerous women and women’s teams by a trans-identifying male competing in Mountain West Conference women’s college volleyball stems from illegal Conference and NCAA rules which are resulting in substantial and continuing violations of federal law.”

The National Collegiate Athletics Association (NCAA) rules allow athletes who identify as transgender to compete, provided they meet certain criteria. The MWC policy permits athletes who identify as transgender and are deemed eligible by the NCAA to compete in intraconference competitions. The policy also states that if a conference team refuses to participate in a contest due to the inclusion of a transgender athlete, the team that refuses forfeits the contest. Recently, multiple teams have forfeited matches against San Jose State.

Brock added, “Plaintiffs look forward to ultimately receiving justice in this case when they prove these legal violations in court, and Plaintiffs look forward to the day when men are no longer allowed to wreak havoc in women’s sport.”

A scheduling conference in the case has been set for Jan. 13, 2025.

A spokesperson for San Jose State told news outlets in a statement, “San Jose State University will continue to support its student-athletes and reject discrimination in all forms.”

Conference officials said in a statement earlier in the week that they are “satisfied with the denial of the preliminary injunction and will continue to uphold the policies put in place by our Board of Directors which directly align with NCAA and USA Volleyball.”

Tyler Durden Wed, 11/27/2024 - 11:25

Marc Andreessen Describes "Alarming" Meeting With Biden Admin That Prompted His Trump Endorsement

Marc Andreessen Describes "Alarming" Meeting With Biden Admin That Prompted His Trump Endorsement

Marc Andreessen, the billionaire investor and co-founder of the influential Silicon Valley venture capital firm Andreessen Horowitz, revealed in a new episode of Joe Rogan's podcast that after an "alarming" meeting with Biden administration officials earlier this year was the moment he would have no other choice but to support Donald Trump. 

For decades, Andreessen has supported Democrats, including Bill Clinton, Al Gore, John Kerry, Barack Obama, and Hillary Clinton. However, a troubling spring meeting with Biden administration officials caused major concerns. During the meeting, officials explained their plan to control AI through government regulatory capture—a strategy reminiscent of Communist policies in China.   

"We had meetings [Biden officials] this spring that were the most alarming meetings I've ever been in. Where they were taking us through their plans, and it was - basically just full government - full government control - like this sort of thing, there will be a small number of large companies that will be completely regulated and controlled by the government, they told us. They said don't even start startups - there's just no way that they can succeed - there's no way that we're going to permit that to happen." 

In mid-July, Axios reported that Marc Andreessen and Ben Horowitz had donated to President-elect Trump's campaign. At the time, their support was attributed to Trump's pro stance on crypto and AI regulation. It's another telling example of just how far-left Democrats in the White House spooked Silicon Valley heavy hitters, such as Elon Musk.

Back to the podcast, Rogan asked Andreessen: "When you leave a meeting like that, what do you do?"

Andreessen responded: "You endorse Donald Trump." 

X user Ben Averbook condensed Rogan's three-hour podcast into a series of the most important highlights: 

Andreessen told Rogan about the federal government's rogue "Operation Choke Point." He described it as a move by the Department of Justice that initially targeted marijuana businesses and gun manufacturers. He said under Biden, it was then weaponized to destroy political opponents, tech founders, and the crypto community. 

Rogan and Andreessen discussed the government workforce dilemma. 

Andreessen spoke about Elon Musk and Vivek Ramaswamy's newly created Department of Government Efficiency (DOGE) and how they may have devised a plan to reduce the government workforce.

They spoke about national security threats. 

The Make America Healthy Again movement. 

Silicon Valley's political views are fracturing.

AI censorship. 

First' Twitter Files'... YouTube files next? 

Watch the full Rogan podcast:

. . . 

Tyler Durden Wed, 11/27/2024 - 11:05

Google, DOJ Face Off During Closing Arguments In AdTech Case

Google, DOJ Face Off During Closing Arguments In AdTech Case

Authored by Sam Dorman via The Epoch Times (emphasis ours),

Attorneys for the Department of Justice (DOJ) and Google made their final arguments on Nov. 25 in a high-profile antitrust case that questions whether the tech giant violated federal law through its digital advertising practices.

The U.S. District Courthouse in Alexandria, Va., on Aug. 1, 2022. Terri Wu/The Epoch Times

The case started last year when the DOJ filed a complaint alleging that Google had engaged in anticompetitive conduct with its advertising technology platforms like Google Ads.

Closing arguments on Nov. 25 came at the end of a bench trial in Virginia that started in September and followed a major ruling against Google across the river in Washington. Both cases could bring major changes for Google and inform how future courts handle antitrust claims.

DOJ lawyer Aaron Teitelbaum told Eastern District of Virginia Judge Leonie Brinkema that Google rigged the rules of advertising auctions and generally perpetrated anticompetitive conduct across three technologies that facilitate digital ad sales.

In its closing argument, the DOJ used statements from Google employees in an attempt to show that they were focused on dominating the market in an unfair way. Among other things, Teitelbaum argued that Google pulled the levers of its various advertising technologies to strengthen its dominance and forced businesses to work with them in order to access a vast pool of demand.

Karen Dunn, a partner at Paul Weiss, represented Google and said that the DOJ had used “cherry-picked” communications from the tech giant’s employees. Overall, she said, Google’s record showed innovation in the advertising technology space in response to competitive forces.

Google’s prices decreased, she said, alongside an increase in ad spending and the number of quality transactions.

Each side clashed over whether social media platforms like Facebook represented the type of competition in advertising technology that would undermine the idea that Google exercised monopoly power.

Much of the closing arguments focused on whether the DOJ was even presenting Brinkema with the right categorization of markets for deciding whether Google engaged in anticompetitive conduct.

Brinkema, Dunn said, would have to overrule Supreme Court precedent in order to rule in favor of the plaintiffs, which includes the DOJ and various states.

According to Dunn, the plaintiffs had failed to define the relevant market and alleged conduct that was legal under antitrust precedent—namely, that Google was refusing to deal with competitors in certain ways. She also accused the DOJ of attempting to “gerrymander” out substitutes for Google’s technology in the markets they were proposing.

Teitelbaum, meanwhile, described Google’s view of the market as amorphous and argued against taking a more theoretical approach to defining the market.

At one point, Brinkema questioned Dunn’s attempt to apply the Supreme Court’s 2018 decision in Ohio v. American Express to Google’s behavior. She noted that the case, which centered on credit card transactions, didn’t feature the same kind of dynamic or programmatic purchasing facilitated by Google’s advertising technology.

Dunn disagreed and said that in both Google’s case and that of American Express, the market involved various tools facilitating transactions between buyers and sellers.

In that case, the Supreme Court said that “credit-card networks are best understood as supplying only one product—the transaction—that is jointly consumed by a cardholder and a merchant.”

“Accordingly, the two-sided market for credit-card transactions should be analyzed as a whole,” it said.

The two sides also disagreed over whether Google’s conduct fell within what the Supreme Court considered companies’ right to refuse to deal with others. The DOJ instead proposed three markets in the advertising technology space—“publisher ad servers,” “ad exchanges,” and “advertiser ad networks.”

It’s unclear how Brinkema will rule but if she agrees that Google violated antitrust law, the company could face remedial measures. Closing arguments came as the DOJ told D.C. Judge Amit Mehta this month that Google should divest from its web browser Chrome as part of remedies in its search case.

Teitelbaum said on Nov. 25 that the plaintiffs were merely asking the court to hold Google accountable for purportedly anti-competitive conduct and denied that it would have to engage in some kind of central planning.

The DOJ’s complaint in the ad tech case, filed in January last year, requested an order requiring Google to divest from its ad manager suite, which included multiple technologies mentioned during closing arguments on Nov. 25.

It also requested “any other preliminary or permanent relief necessary and appropriate to restore competitive conditions in the markets affected by Google’s unlawful conduct.”

Tyler Durden Wed, 11/27/2024 - 10:45

WTI Dips After Smaller Than Expected Crude Draw

WTI Dips After Smaller Than Expected Crude Draw

Despite the Israel-Lebanon truce holding (for now), oil prices inched higher overnight after API reported a sizable crude draw and on speculation that OPEC+ will delay restoring output.

“On one hand, OPEC+ appears to be reluctant to unwind, given concerns over weak oil demand and market consensus that 2025 looks like a surplus year for oil balances,” Citigroup Inc. analysts including Eric Lee wrote in a note.

“On the other hand, deeper cuts also seem unlikely, with prices still above $70 Brent, global observable oil inventories relatively low, and some geopolitical risk still in the market.”

Will the official data confirm API's?

API

  • Crude -5.9mm

  • Cushing -734k

  • Gasoline +1.8mm

  • Distillates +2.5mm

DOE

  • Crude -1.844mm

  • Cushing -909k

  • Gasoline +3.314mm

  • Distillates +416k

The official data confirmed a drawdown in crude stocks and at the Cushing hub while Gasoline inventories rose the most since July...

Source: Bloomberg

Overall, including a 1.17mm barrel add to SPR, crude inventories declined 672k barrels - the most since the second week of October...

Source: Bloomberg

After last week' dip, US crude production ramped back up to record highs this week...

Source: Bloomberg

WTI dipped on the smaller than expected crude draw..

Source: Bloomberg

Price moves were exacerbated by thin pre-holiday trading, with open interest hovering near monthly lows.

Tyler Durden Wed, 11/27/2024 - 10:38

Where Trump's Legal Cases Stand After Jack Smith Moves To Drop Charges

Where Trump's Legal Cases Stand After Jack Smith Moves To Drop Charges

Authored by Jack Phillips via The Epoch Times (emphasis ours),

With special counsel Jack Smith’s decision to drop his election case and classified documents appeal against President-elect Donald Trump, the soon-to-be 47th president’s legal woes appear to be mostly behind him.

(Left) Special counsel Jack Smith in Washington on Aug. 1, 2023. (Right) Former President Donald Trump in New York City on May 31, 2024. Michael M. Santiago/Getty Images, Alex Wong/Getty Images

Smith’s decision on Nov. 25 caps a tumultuous two-year period for Trump, who was charged in four separate jurisdictions with felony counts.

Washington: Prosecutor Moves to Dismiss

In a Washington federal court, Smith filed a motion to dismiss the election case, which has to first be approved by the judge, and cited longstanding Department of Justice policy stipulating that the criminal prosecution of a sitting president would violate the U.S. Constitution by undermining the ability of the country’s chief executive to function.

“Based on the Department’s interpretation of the Constitution, the Government moves for dismissal without prejudice of the superseding indictment,” the court documents filed by Smith on Nov. 25 state.

In the case, Smith had charged Trump in Washington over his alleged efforts to overturn the 2020 election results and for his activity pertaining to the breach of the U.S. Capitol building on Jan. 6, 2021.

The president-elect’s attorneys had sought to delay the release of case materials because of the proximity of the election. However, U.S. District Judge Tanya Chutkan denied their requests, allowing Smith’s team in October to unseal a 165-page filing in the case that outlined Trump’s alleged activities after the 2020 contest.

“Working with a team of private co-conspirators, the defendant acted as a candidate when he pursued multiple criminal means to disrupt, through fraud and deceit, the government function by which votes are collected and counted—a function in which the defendant, as President, had no official role,” Smith’s office wrote.

Trump had pleaded not guilty to the charges, arguing that they were politically driven and designed to interfere with the Nov. 5 election. At the time, Trump spokesman Steven Cheung said the brief was “falsehood-ridden” and accused Smith of being “hell-bent on weaponizing the Justice Department in an attempt to cling to power.”

On social media platform Truth Social, meanwhile, Trump said the case would end with his “complete victory” during the 2024 election.

The Smith case ultimately culminated in a U.S. Supreme Court ruling in July that found that presidents should be rendered partially immune from prosecution for their official acts and duties. But Smith ultimately retooled the indictment and argued that Trump was acting in his private capacity in the election case.

Florida: Prosecutor Moves to Drop Appeal

Also on Nov. 25, Smith filed papers in an appeals court asking to dismiss an appeal of U.S. District Judge Aileen Cannon’s July order tossing the case that had accused Trump of illegally retaining classified documents after leaving the White House.

“Dismissing the appeal as to defendant Trump will leave in place the district court’s order dismissing the indictment without prejudice as to him,” Smith’s Nov. 25 filing states. However, his appeal concerning two other defendants in the case, Walt Nauta and Carlos de Oliveira, “will continue because, unlike defendant Trump, no principle of temporary immunity applies to them.”

Cannon dismissed the charges against Trump, Nauta, and de Oliveira, after agreeing with their arguments that Smith was not lawfully appointed under the U.S. Constitution.

“In ruling otherwise, the district court deviated from binding Supreme Court precedent, misconstrued the statutes that authorized the Special Counsel’s appointment, and took inadequate account of the longstanding history of Attorney General appointments of special counsels,” Cannon wrote at the time.

Weeks later, Smith filed an appeal in the U.S. Court of Appeals for the 11th Circuit to reverse Cannon’s order; Trump’s lawyers had opposed the reversal in subsequent court filings.

Cannon wrote in her order, which came after U.S. Supreme Court Justice Clarence Thomas had cast doubt in July about Smith’s appointment, that Smith was an officer of the United States, which requires that Congress authorize the attorney general to appoint Smith as special counsel.

Before Smith was named special counsel, the FBI searched Trump’s Mar-a-Lago property in August 2022 in a bid to look for classified materials. At about the same time, Trump argued that, as president, he had declassified the documents.

After Smith brought the charges against Trump, the president-elect pleaded not guilty and also accused the Justice Department of launching a politically motivated case against him.

New York: Postponed Indefinitely

A case brought against Trump in Manhattan by District Attorney Alvin Bragg, an elected Democrat, resulted in the president-elect being convicted by a jury on May 30 of 34 counts of falsifying business records. Trump had pleaded not guilty in the case and accused prosecutors, the presiding judge, and the judge’s staff of holding a bias against him.

During most of the trial, Judge Juan Merchan had a gag order in place that barred Trump from speaking about certain witnesses, the judge’s family, court staff, and Bragg’s staff—which Trump said was election interference. The president-elect had written on social media that Merchan’s daughter was a consultant for several Democratic Party heavyweights, including Vice President Kamala Harris.

On Nov. 22, Merchan indefinitely delayed sentencing for Trump in the business records case, after the president-elect’s attorneys called for its immediate dismissal because of the election results.

“Immediate dismissal of this case is mandated by the federal Constitution, the Presidential Transition Act of 1963, and the interests of justice, in order to facilitate the orderly transition of Executive power following President Trump’s overwhelming victory in the 2024 Presidential election,” Trump’s attorneys stated in a letter dated Nov. 19.

Sentencing in the case was initially scheduled for mid-July but was postponed until Nov. 26. In his order on Nov. 22, Merchan wrote that he was granting a request to adjourn that sentencing date as well.

Trump was charged with falsifying business records in connection with payments that he made years ago to adult film actress Stormy Daniels, which prosecutors alleged were designed to interfere in the 2016 election. During the trial, Daniels gave testimony in the case about an alleged affair, which Trump has categorically denied.

Georgia: Still Unclear

In Fulton County, Georgia, Trump and more than a dozen others were charged with election interference-related charges and racketeering in 2023 for their activity following the 2020 election. While several of his co-defendants, including lawyers Sidney Powell and Jenna Ellis, entered into plea agreements with Fulton County District Attorney Fani Willis’s office, a Trump co-defendant in January filed court papers revealing that Willis was in a relationship with her top prosecutor in the case.

Other notable co-defendants listed in the Georgia case include several former Trump advisers and lawyers, including former New York City Mayor Rudy Giuliani and former White House chief of staff Mark Meadows.

During a contentious court hearing, Willis confirmed that she was in a relationship with her special counsel in the case, Nathan Wade, but the pair denied claims that either had financially benefited from the arrangement. They also denied claims that their relationship took place before Wade was named as special prosecutor by Willis, although a witness who had been Willis’s landlord had testified otherwise.

Months later, Fulton County Judge Scott McAfee ruled that either Willis or Wade must leave the case, resulting in Wade’s departure soon after. In his ruling, McAfee wrote that several outstanding claims made against Willis and Wade were not resolved, saying that an “odor of mendacity“ remained over the case.

Trump and several of his co-defendants appealed McAfee’s order to the Georgia Court of Appeals, which placed the matter on pause while it hears arguments on whether to dismiss Willis.

On Nov. 18, the state appeals court canceled upcoming oral arguments that were scheduled for next month.

New York: Civil Case Still Pending

In addition to Trump’s four criminal indictments, a judge earlier this year ordered Trump to pay a $454 million penalty, ruling in a civil fraud lawsuit that he had lied about his wealth for years as he built the real estate empire that vaulted him to stardom and the White House.

Trump had appealed Judge Arthur Engoron’s Feb. 16 decision. The judge found that Trump, his company, and executives, including his sons Eric and Donald Trump Jr., schemed to pad his net worth by billions of dollars on financial statements given to banks, insurers, and others to make deals and secure loans.

In oral arguments held in September, several New York appeals court judges signaled that Engoron’s ruling could be reversed.

Members of the five-judge panel on the Appellate Division, the mid-level state appellate court hearing arguments in Trump’s appeal, had appeared concerned about possible overreach by New York Attorney General Letitia James, who brought the case.

“Every case that you cite involves damage to consumers, damage to the marketplace,” Justice David Friedman told Judith Vale, the attorney arguing on behalf of James’s office.

“We don’t have anything like that here,” Friedman said, saying that nobody “lost any money.”

The Associated Press and Reuters contributed to this report.

Tyler Durden Wed, 11/27/2024 - 10:20

US Durable Goods Orders Disappoint In October, Stagnant For 19 Months

US Durable Goods Orders Disappoint In October, Stagnant For 19 Months

After two months of declines, US durable goods orders rose 0.2% MoM (SA) in preliminary October data (significantly less than the expected +0.5%). Interestingly, given the recent stagnation, this blip higher pushed orders up 5.3% YoY (NSA) - the highest since Nov 2023...

Source: Bloomberg

On an SA basis, total durable goods orders have basically gone nowhere since March 2023...

Source: Bloomberg

Ex-Transportation, orders rose just 0.1% MoM and worse still, non-defense, ex-aircraft orders fell 0.2% MoM (well below the +0.1% MoM expected).

The one very modest silver lining was Capital Goods Shipments Ex Air (a figure that is used to help calculate equipment investment in the government’s GDP report) rose 0.2% MoM (better than expected).

 

 

 

 

 

 

 

Tyler Durden Wed, 11/27/2024 - 08:52

Secret Russian "Ship To Ship" Oil Switching Moves To New Greek Hotspot After Naval Drills

Secret Russian "Ship To Ship" Oil Switching Moves To New Greek Hotspot After Naval Drills

For much of the past three years, tankers carrying Russian crude oil - usually in violation of western embargo - skirted western sanctions and oversight by engaged in so-called Ship-to-Ship (STS) transfers somewhere in the open sea far from prying eyes and even further from hostile coast guard supervision.

The practice, usually carried out in secret with digital tracking beacons switched off or falsified, can help to obscure the origins of the oil, helping to beat sanctions. It also creates another layer of separation between the buyers and sellers of cargoes.

Of course, to keep STS as a viable option, the places where it takes place have to change periodically. And as Bloomberg reports, the secret switching of Russian fuel cargoes between tankers at sea has migrated to new hotspots off the coast of Greece after the European country used naval drills to try and block the activity in one location.

About 1 million barrels a month of diesel, fuel oil and other petroleum products has been getting flipped near the islands of Lesbos and Chios in the Aegean Sea, according to data from analytics firm Vortexa.

The area only became popular after Greece’s navy carried out drills around the Laconian Gulf, previously the No. 1 site for the practice in Europe.

A recent surge in ship-to-ship transfers involving Russian oil and fuel in and around Europe has raised environmental concerns because of question marks over the safety and insurance of the vessels involved. Not only that, but the fact that the activity has been soaring confirms that nobody takes the threat of western sanctions seriously any more.

Ship-to-ship switching is still happening close by the Laconian Gulf, but at a much-reduced rate since Greece’s naval drills began. The maneuvers left a narrow stretch of water unaffected and it’s in that location that they’re still taking place.

The transfers have also become regular off the Italian port of Augusta since May, when the Greek navy began its exercises. On November 14, the drills were extended until mid-March.

While the recent crackdown on Russian STS may have delayed the activity, it certainly won't stop it. And in any event, it pales in comparison to the unprecedented STS activity taking place 40 miles east off the Malaysian peninsula which is the "the world’s largest gathering point for dark fleet tankers"...

... and where millions of barrels Iranian oil are transferred to ships heading to China every day in violation of multiple western sanctions, keeping China's economy humming (see "The Clandestine Oil Shipping Hub Funneling Iranian Crude to China").

Tyler Durden Wed, 11/27/2024 - 08:45

Q3 GDP Unchanged At 2.8% In Second Estimate

Q3 GDP Unchanged At 2.8% In Second Estimate

Nobody expected today's second estimat of Q3 GDP to be a riveting print, and nobody was disappointed when it wasn't. After printing at 2.8% one month ago in the preliminary report, moments ago Biden's outgoing Bureau of Economic Analysis reported that the second estimate of growth in the quarter ended Sept 30 was unchanged, at 2.8%, and in line with estimates; it was down fractionally from the 3.0% Q2 GDP print.

Here are the Q3 GDP details:

  • Personal consumption rose annualized 3.5% q/q, below the estimate +3.7% (est. range +3.5% to +3.8%).
  • GDP price index rose annualized 1.9% q/q, above the estimate +1.8% (est. range +1.8% to +1.9%).
  • Core personal consumption rose annualized 2.1% q/q, below the estimate +2.2% (est. range +2.1% to +2.3%).
  • Gross domestic income rose annualized 2.2% q/q

According to the BEA, compared to the second quarter, the deceleration in real GDP primarily reflected a downturn in inventory investment and a larger decrease in housing investment. These movements were partly offset by accelerations in exports, consumer spending, and federal government spending. Imports accelerated.

Looking at the change between the prelim print and the second estimate, the increase in Q3 GDP "reflected increases in consumer spending, exports, federal government spending, and business investment. Imports, which are a subtraction in the calculation of GDP, increased."

Looking at the breakdown, we find the following:

  • Personal consumption contributed 2.37% to the bottom-line GDP print of 2.82%, down fractionally from 2.46% in the firs estimate
  • Fixed investment added 0.31%, up from 0.24% in the first estimate
  • The change in private inventories subtracted 0.11% from the GDP print, a reduction from the -0.17% in the first estimate.
  • Net trade was roughly flat, as net exports subtracted 0.58% from the GDP, up modestly from 0.55% in the first estimate.
  • Government consumption was also flattish at 0.83%, down from 0.85%

And visually:

While stale, some were looking at the price data for hints to the December FOMC decision (a more timely release will be released in one hour when the core PCE number is published). According to the BEA, in Q2, Gross domestic purchases prices increased 1.9% in the third quarter, after increasing 2.4% in the second quarter. Excluding food and energy, prices increased 2.4 percent, after increasing 2.6 percent.

Personal consumption expenditures (PCE) prices increased 1.5% in the third quarter, after increasing 2.5% in the second quarter. Excluding food and energy, the PCE “core” price index increased 2.1% after increasing 2.8%, this was just below the 2.2% expected.

The GDP report also provided data on corporate profits which it found had risen in prior quarter: Y/y corp. profits were up 6.1% in 3Q after rising 10.8% prior quarter. Financial industry profits declined 0.4% Q/q in 3Q after rising 7% prior quarter. Federal Reserve bank profits up 10.7% in 3Q after falling 11.5% prior quarter. Nonfinancial sector profits rose 1.1% Q/q in 3Q after rising 4.2% prior quarter.

Overall, don't expect anyone to spend too much time on this stale data as attention now turns to the core PCE report at 10am ET.

Tyler Durden Wed, 11/27/2024 - 08:44

Continuing Jobless Claims Top 1.9 Million Americans - Highest In 3 Years

Continuing Jobless Claims Top 1.9 Million Americans - Highest In 3 Years

The number of Americans filing for jobless benefits for the first time fell to 213k last week (from 215k) - the lowest since April 2024...

Source: Bloomberg

However, on a non-seasonally-adjusted basis, claims hit a four month high.

California was by far the largest single state increase in new claims while New Jersey saw a small decline...

Meanwhile continuing jobless rose to 1.907 million Americans - the highest in three years...

Source: Bloomberg

So, take your pick - the labor market is hot (claims at 7mo lows) or very cold (cont claims at 3 year highs)?

Tyler Durden Wed, 11/27/2024 - 08:39

Frexit Fears Reignite As Market "Storm" Drives Core EU Spreads To Crisis Highs

Frexit Fears Reignite As Market "Storm" Drives Core EU Spreads To Crisis Highs

Merde alors, as they say in Paris!!

Amid a battle over the country's budget and an ongoing fiscal crisis, France's 10Y yield spread to Germany's  has soared up to over 85bps - its highest since the European financial crisis - reigniting 'Frexit' fears as decoupling of the core countries accelerates...

Source: Bloomberg

The French government risks facing higher borrowing costs as its lack of a majority in Parliament makes it harder to implement spending curbs and tax hikes needed to curb a ballooning budget deficit.

Michel Barnier, right, with Finance Minister Antoine Armand in Paris on Oct. 15

French Prime Minister Michel Barnier said the country faces “storm” in financial markets if an “unlikely but possible” alliance of lawmakers across the political spectrum rejects his government’s budget proposals and votes it out of power.

“There will probably be a rather serious storm and serious turbulences in financial markets” in case of a no-confidence vote, Barnier said in an interview with French TV channel TF1.

“If the government falls, emergency measures will be taken,” which won’t cover full-year expenses. 

Specifically, as Bloomberg reports, the premier’s political survival hangs on whether French far-right leader Marine Le Pen’s will back a potential no-confidence vote when he presents final versions of the 2025 government and social-security budget bills in coming days and weeks.

Le Pen has vowed to bring down his administration if her demands to better protect household purchasing power aren’t met.

Barnier went on TV Tuesday night after his boss, President Emmanuel Macron, reportedly said he believed that Le Pen would carry out her threats, and that Barnier would soon be out. Macron’s office denied he made such comments.

Le Pen has focused her ire on the government’s plan to increase taxes on electricity, to lower reimbursements for medicine, and to postpone the indexation of pensions to inflation.

She has also demanded additional measures on immigration.

In a bid to assuage Le Pen’s party, Barnier said Tuesday that electricity prices will fall by 9% next year, “and we’ll see if we can do more to preserve the purchasing power of the French.”

Le Pen has recently hardened her tone, threatening to topple the government while playing down the negative consequences of a no-confidence vote.

“We could very well come to a situation where the government is again put into jeopardy,” said Greg Hirt, global chief investment officer for multi asset at Allianz Global Investors.

The path to installing a new government remains unclear.

It took months for Macron to appoint a prime minister this summer after losing his majority in the French parliament earlier in the year.

Emergency measures that could be taken by an interim government would prevent “neither a crisis, nor the mistrust of financial markets,” Barnier said.

There could be a new budget bill, “but we don’t have time to lose.” 

“Besides the recent political headlines underscoring that the budget agreement will become difficult and could bring the government down, the macro outlook is also deteriorating quickly,” Christoph Rieger, Commerzbank’s head of rates and credit research, wrote in a note.

France’s finances are about to face scrutiny from S&P Global Ratings on Friday, which could be the next catalyst for market moves, after both Fitch Ratings and Moody’s Ratings gave it a negative outlook last month.

Tyler Durden Wed, 11/27/2024 - 08:26

Stock Futures Drop Ahead Of Data Barrage After Trump Unveils Trade Picks

Stock Futures Drop Ahead Of Data Barrage After Trump Unveils Trade Picks

Futures are lower as markets digested Trump’s latest cabinet appointments and looked ahead to a barrage of macroeconomic data ahead of the Thanksgiving holiday for clues on the outlook for interest rates. As of 8:00am ET, Nasdaq 100 futures dropped 0.3% while the S&P 500 slipped 0.1% with Mag 7 names mostly lower (NVDA -1.2% and MSFT -0.6%).  Treasuries advanced, pushing the 10-year benchmark yield down by five basis points to 4.26% with a slew of pre-Thanksgiving holiday US data expected, including the Fed's preferred inflation gauge and an update on economic growth. The dollar fell versus all Group-of-10 peers amid month-end flows while the euro rose to a fresh day high after hawkish comments from ECB Board member Isabel Schnabel. Commodities are mixed with precious metals and oil higher, while base metals are lower. Today, the main macro focus will be PCE release and Durable/Cap Goods Orders.

Among individual premarket movers, Dell shares tumbles 12% as revenue generated by the company’s PC business declined 1% in the fiscal third quarter, falling short of estimates. Peer HP also slumped 8% after sales in its PC unit missed the average analyst estimate. Similar to its peer Dell, the firm flagged a delayed PC refresh cycle. Here are some other notable premarket movers:

  • Ambarella (AMBA) climbs 21% after the semiconductor device company issued a stronger-than-anticipated revenue forecast for the current quarter.
  • Autodesk (ADSK) slides 7% after the software company posted third-quarter adjusted operating margin that fell short of expectations.
  • CrowdStrike (CRWD) drops 3% after the cybersecurity firm’s issued a weaker-than-expected earnings forecast. The outlook disappointing investors who have been watching for signs that the company has recovered from a flawed update that crashed computers around the world.
  • Guess (GES) slides 11% after the clothing company cut its full year guidance.
  • Nutanix (NTNX) gains 5% after the infrastructure software company reported first-quarter results that beat expectations.
  • Symbotic (SYM) sinks 22% after filing to delay its 10-K report.
  • Urban Outfitters (URBN) jumps 12% after the clothing retailer reported stronger-than-expected quarterly sales growth. Citi upgraded the stock to buy.
  • Workday (WDAY) drops 11% after the software company provided a forecast that is seen as disappointing. Analysts noted that investor confidence will likely be affected by slowing subscription growth.

Trump's tariffs agenda gathered further momentum, after the president-elect named Jamieson Greer as the US Trade Representative and Kevin Hassett to direct the National Economic Council. Greer was intimately involved in Trump’s first-term trade policy decisions.

“If we get close to a place where we are talking about across-the-board tariffs, I think that would be a wake-up call for risk assets, equities and credit alike,” Wei Li, global chief investment strategist at BlackRock Inc., said in an interview with Bloomberg TV. “We’re risk-on for now, but things could change.”

Investors have plowed money into US stocks this year, with inflows on course for a record and have been rewarded with a gain of 26% in the S&P 500, vindicating bets on American exceptionalism. European stocks are trading at a record 40% discount to the S&P 500 with the region’s benchmark gauge up just 5% this year. That divergence is making global stock market performance ever more polarized and that’s unlikely to change anytime soon, JPMorgan's strategist Mislav Matejka wrote.

European stocks fall for a second day as traders trim their ECB interest rate cut bets after Governing Council member Isabel Schnabel warned against lowering borrowing costs too far. The Stoxx 600 is down 0.3% with underperformance in auto shares suggesting tariff risks from the US are also still providing a drag. In France, a measure of risk on the country’s bonds rose to levels last seen during the euro-area debt crisis as a political standoff over the budget threatens to bring down the government. The market nerves reflect investor concerns over Prime Minister Michel Barnier’s ability to pass a budget for next year. French bank stocks underperform following the country’s political standoff over budget. Real estate and mining stocks are the strongest-performing sectors. Among individual stocks, EasyJet gains as the airline proposed to more than double its dividend payout for this year amid robust demand for its holiday package offerings. Here are some of the most notable premarket movers:

  • Henkel shares climb as much as 4.1% after the chemicals company was upgraded by analysts at JPMorgan, highlighting the stock trades at a sizable discount to peers despite a rebound in earnings this year.
  • Anglo American shares rise as much as 2.9% in London after the miner raised 9.6 billion rand ($530 million) from the sale of a 6.6% stake in Anglo American Platinum, a move aimed at increasing the South African unit’s free float ahead of a full exit.
  • Ackermans & Van Haaren shares gain as much as 3.1%, rallying from an almost three-month low closing price yesterday, as Berenberg slightly lifts its Street-high target on the Belgian industrial holding company.
  • EasyJet shares rise as much as 4.4% to the highest intraday level since April. The travel company more than doubled its annual dividend on the back of a strong demand outlook for next year.
  • Idorsia shares soar as much as 28% after announcing talks with an undisclosed party for the global rights to its aprocitentan (Tryvio) drug. The deal would result in a fee of $35 million.
  • French bank stocks fall as the risk premium for the country’s government bonds soared to 2012 highs amid a political standoff over the budget, which threatens to bring down the government.
  • Grifols shares slide as much as 11% after Bloomberg reported that Brookfield Asset Management is preparing to walk away from a plan to acquire the Spanish drug maker over disagreements on valuation.
  • CD Projekt shares drops as much as 3.9% in early trading as 3Q earnings triggered profit taking after strong gains on stock seen in last days.
  • Frontline shares fall as much as 12% after the Oslo-listed crude-oil shipper reported 3Q earnings described by DNB as soft on account of a weak 4Q outlook that’s likely to lead to estimate cuts.
  • Johnson Matthey shares drop as much as 7%, to the lowest since July 2009, following results from the British specialty chemicals firm which analysts see as mixed.
  • Elekta shares fall as much as 7.8% after the Swedish medical technology firm’s 2Q report fell short of expectations on most key metrics. While guidance was reiterated, it requires a big effort from the company in its 2H, analysts note.
  • Pets at Home shares slump as much as 9.8% to the lowest level since July 2020 after the company warned that the pet retail market will remain subdued for the rest of the financial year.

Earlier in the session, Asian stocks gained as Chinese shares rebounded after a recent rout, while traders continued to digest the potential impact of US president-elect Donald Trump’s policy plans. The MSCI Asia Pacific Index rose as much as 0.5%, lifted by Chinese tech giants such as Tencent and Meituan. An index of Chinese stocks in Hong Kong gained 2.6% amid speculation that authorities will unveil more stimulus at key meetings that are expected to take place next month. Elsewhere, stocks dropped in Japan and Taiwan, while Australia and New Zealand saw gains. Korean chipmaker stocks fell after one of Trump’s picks to lead the Department of Government Efficiency called Chips Act subsidies to the industry “wasteful.” Japanese automakers extended declines as the yen strengthened and after US peers fell on Trump’s tariff threats.

In rates, treasuries climb, with US 10-year yields falling 4 bps to 4.27%. Gilts and bunds also gain, although the Schnabel comments did dent German shorter-dated bonds while lifting the euro. French bond spreads widen again, hitting a yield gap to Bunds of 89bps, the widest since the 2012 European debt crisis as a political standoff over the budget threatens to bring down the government. The market nerves reflect investor concerns over Prime Minister Michel Barnier’s ability to pass a budget for next year. Back to Treasuries which hold most of their advance that sent yields toward the low end of two-week ranges, led by UK bond market, the outperformer in core European rates so far. Rally precedes a packed slate of US economic data including 3Q GDP revision, weekly jobless claims and PCE price indexes. A $44 billion 7-year note auction at 11:30am New York time concludes this week’s Treasury supply cycle, which has been well received.

In FX, the Bloomberg dollar index fell to the lowest this week, snapping a rally that’s propelled eight straight weeks of gains through Friday. The dollar is seen as one of the biggest beneficiaries of Trump’s pro-growth agenda. The euro rose after ECB Executive Board member Isabel Schnabel warned against cutting interest rates too far. The currency has been singled out as one of the most vulnerable to Trump’s tariff agenda by strategists at Goldman, JPMorgan and Citigroup. The yen tops the G-10 FX leader board, rising 1.1% against the greenback and pulling USD/JPY down to 151.40. The kiwi dollar is not far behind even after the RBNZ cut rates by 50 bps.

In commodities, oil prices advanced as traders monitor the cease-fire agreement between Israel and Hezbollah. WTI is up 0.3% at $69 a barrel. Middle East tensions abated somewhat as President Joe Biden said Israel reached a cease-fire deal with the Lebanese militant group Hezbollah after weeks of talks mediated by the US. Spot gold adds $15 to $2,648/oz.  Bitcoin rises above $93,000.

The US economic data calendar is busy and includes second estimate of 3Q GDP, October durable goods orders and weekly jobless claims (8:30am), November MNI Chicago PMI (9:45am, several minutes earlier for subscribers), October personal income/spending with PCE price indexes and October pending home sales (10am). The Fed speaker slate blank.

Market Snapshot

  • S&P 500 futures down 0.2% to 6,026.00
  • STOXX Europe 600 down 0.4% to 503.87
  • MXAP up 0.4% to 183.22
  • MXAPJ up 0.5% to 579.48
  • Nikkei down 0.8% to 38,134.97
  • Topix down 0.9% to 2,665.34
  • Hang Seng Index up 2.3% to 19,603.13
  • Shanghai Composite up 1.5% to 3,309.78
  • Sensex up 0.3% to 80,232.67
  • Australia S&P/ASX 200 up 0.6% to 8,406.67
  • Kospi down 0.7% to 2,503.06
  • German 10Y yield little changed at 2.15%
  • Euro up 0.2% to $1.0515
  • Brent Futures up 0.5% to $73.20/bbl
  • Gold spot up 0.7% to $2,650.62
  • US Dollar Index down 0.46% to 106.53

Top Overnight News

  • Chinese stocks rallied on Wed as investors speculate a critical upcoming gov’t meeting could result in more stimulus support as Beijing looks to mitigate the fallout from Trump 2.0 trade restrictions. BBG
  • China places its defense minister under investigation for corruption (this is the third consecutive serving or former defense minister to face an investigation), although the country’s foreign ministry denied the news. FT
  • Sales of foreign-branded smartphones, including Apple's iPhone, in China fell 44.25% year-on-year in October, according to data from a government-affiliated research firm released on Wednesday. RTRS
  • New Zealand’s central bank slashed its policy rate by 50bp to 4.25%, a move widely anticipated by markets. WSJ
  • The ECB needs to be wary of cutting interest rates too far as borrowing costs are already near a level that no longer restrains the economy and going lower could backfire, according to Executive Board member Isabel Schnabel. BBG
  • Trump is preparing to eliminate funding to cities that fail to participate in deportations of undocumented immigrants (he tried to do so in his first term but ran into myriad obstacles). WaPo
  • Israel and Lebanon/Hezbollah struck a ceasefire agreement on Tues, a move Biden said he hoped would yield a similar settlement w/Hamas in Gaza. NYT
  • Business leaders aren’t panicking over Trump’s tariff threats as many consider to be simply a starting point for negotiations rather than the articulation of a long-term policy. WaPo
  • Donald Trump’s tariffs agenda gained more momentum as the president-elect named Jamieson Greer, a longtime protégé of Robert Lighthizer, as the US trade representative. Kevin Hassett was picked to direct the National Economic Council, a post that doesn’t require Senate confirmation. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed following a somewhat similar performance stateside where the S&P 500 and DJIA posted fresh record highs but the small-cap Russell 2000 underperformed amid higher yields owing to Trump's recent tariff threat. ASX 200 traded higher with strength in gold, consumer discretionary, tech and financial stocks, while mixed data releases also provided some encouragement as monthly CPI printed softer-than-expected, whilst the trimmed mean metric rose and Q3 Construction Work Done topped forecasts. Nikkei 225 underperformed amid a firmer currency and with money markets leaning towards a hike by the BoJ next month. Hang Seng and Shanghai Comp were positive albeit with gains capped by a lack of major catalysts and as Industrial Profits data continued to show a double-digit percentage drop Y/Y for October although was not as steep as the prior month's decline.

Top Asian News

  • Leaked BYD Letter Signals China EV Price War Is Set to Intensify
  • Asian Stocks Rise as Chinese Shares Rebound on Stimulus Hopes
  • Seoul Hit By Highest Snowfall in Over 100 years Causing Chaos
  • Pony AI Is Said to Raise $260 Million in US IPO Priced at Top
  • Vietnam Mogul Told to Refund Missing Billions to Save Her Life
  • Philippine VP Duterte Faces Police Charges Amid Marcos Feud
  • Yen Erases Post-US Election Drop and Hedging Costs Pick Up
  • Volkswagen Sells Xinjiang Sites to Exit Controversial Region
  • Prabowo Pick Trails in Jakarta Governor Race in Blow for Leader

European equities are on the backfoot, Stoxx 600 -0.4%, from a macro perspective the main update for the region has come via hawkish comments by ECB's Schnabel. Sectors are mixed: outperformance in Personal Care, Drug and Grocery names, whilst a pullback in yields has benefitted the Real Estate sector. Tech hit with SAP pressured after Workday numbers. US equity futures are showing a modest reversal of Tuesday's price action where small-caps lagged peers, ES -0.3%, RTY +0.6%. Focus is very much looking ahead to the day's raft of tier 1 US data points. US updates from Dell Technologies (-12.6%), HP (-10%), ADSK (-6.3%), CRWD (-5.7%) & Workday (-10%) in focus among others. CAICT says shipments of smartphones in China were up +1.8% Y/Y in October at 29.67mln (prev. -25.7% Y/Y in September). Domestic Chinese brands shipped 18.55mln phones in October (79% of the total), while foreign brands shipped 4.903mln units (-28.7% Y/Y). Shipments of foreign branded phones including Apple's (AAPL) iPhones within China were down 55.75% Y/Y in October (prev. -39.8% Y/Y), according to Reuters calculations.

Top European News

  • BoE's Lombardelli said US tariffs would pose a risk to UK economic growth and it is unclear what impact tariffs would have on UK inflation, while she added that a tight UK labour market remains a problem and is worried that services inflation remains above pre-COVID levels.
  • ECB's Schnabel says she sees only limited room for further rate cuts, via Bloomberg; estimated range for the neutral rate is 2-3%. Can gradually move rates to neutral, not lower. Shouldn't go accommodative on rates. Strong preference for a gradual approach. Need to see services inflation come down. Impact of past tightening fading visibly. May not be so far from neutral rates. Economy is stagnating, no recession risk.

FX

  • JPY outperforms with USD/JPY down to a 151.23 trough as traders continue to position for a BoJ rate hike next month following the recent fiscal stimulus announcement by the Japanese government.
  • As such, the USD has been hampered with the DXY slipping further on the 106.00 handle and down to a 106.33 base thus far. Docket ahead packed given Thanksgiving adjustments to the data schedule.
  • EUR firmer, benefitting from general USD downside and bolstered by hawkish remarks from ECB's Schnabel. Single currency as high as 1.0540, having climbed significantly an overnight 1.0474 base.
  • Fundamentals light out of the UK, GBP benefitting from the above USD action and is holding ground against the EUR for the most part thus far.
  • NZD a close second to JPY as it stands in terms of best performers, following the RBNZ's 50bps cut which while as expected saw the unwinding of some outside bets for a 75bps move. NZD topped out at 0.59 vs the USD.

Fixed Income

  • Benchmarks in the green. Spent the first part of the European morning at highs though pulled back modestly on hawkish Schnabel commentary. Since, back towards best as the risk tone continues to deteriorate.
  • USTs towards their 110-21+ peak, pulled back modestly on Schnabel but only briefly. Docket ahead is packed with PCE the highlight, and will help to inform the view into December’s FOMC, with markets leaning towards a 25bps cut (60% chance) vs unchanged (40% chance) into the releases.
  • Bunds came under pressure on a set of particularly hawkish remarks from ECB’s Schnabel; in particular, her remark on not going below the estimated 2-3% neutral rate is at odds with market pricing.
  • OATs near the unchanged mark with focus on the domestic political situation after PM Barnier's remarks around "serious turbulence on financial markets" if the gov't collapses; as such, the OAT-Bund yield spread has hit 90bps, its highest since 2012.
  • Gilts outperform, unaffected by Schnabel, specifics for the UK have been light thus far with the docket ahead also sparse.

Commodities

  • Crude modestly firmer in narrow ranges and well within familiar territory awaiting updates around the ceasefire, US data and OPEC+. Holding around USD 69/bbl and USD 73/bbl respectively for WTI and Brent.
  • Gold has gleaned support from the tepid risk tone, which has been deteriorating throughout the morning, and softer USD. As such, XAU is at a USD 2653/oz peak with resistance ahead at USD 2673/oz from November 21st.
  • Base metals in the green, despite the tepid tone, action which comes as the complex bounces back from Tuesday’s pressure. Thus far, this has taken the likes of 3M LME Copper back to yesterday's best but shy of the USD 9.1k from Monday.
  • US Private Inventory Data: Crude -5.9mln (exp. -0.6mln), Distillates +2.5mln (exp. +0.1mln), Gasoline +1.8mln (exp. -0.1mln), Cushing -0.7mln
  • Russia may lift the ban on gasoline exports from refineries for two months from December 1st to January 31st, according to Kommersant citing sources.
  • Citi Research said its base case is for OPEC+ to delay the unwind of output cuts by a quarter to April 2025.
  • JPMorgan forecasts Henry Hub prices at USD 3.50/MMBtu; TTF at EUR 41.75/MWh. Sees NatGas production likely to grow 3bcf/day in 2025 and again in 2026.

Geopolitics

  • Hamas says it is ready for truce in Gaza after the ceasefire deal between Israel and Hezbollah, according to journalist Guy Elster.
  • Israel conducted a series of raids on the town of Naqoura in southern Lebanon and Hezbollah announced targeting "sensitive" military sites in Tel Aviv with a swarm of drones in the hours prior to the ceasefire.
  • Streams of cars headed to southern Lebanon after the ceasefire came into force, according to Reuters.
  • US senior official said they must all focus on making sure Iran does not continue to use Syria as a highway for weapons into Lebanon.
  • Iran's Foreign Ministry said it welcomes the ceasefire in Lebanon and emphasises the responsibility of the international community in effectively pressuring Israel to stop the war in Gaza.
  • Syrian state agency reported six people died including two soldiers in an Israeli attack on border crossings between Syria and Lebanon in the Homs countryside.
  • Russia’s new missile fired at the Ukrainian city of Dnipro last week carried warheads without explosives causing limited damage, according to Reuters citing sources.

US Event Calendar

  • 07:00: Nov. MBA Mortgage Applications 6.3%, prior 1.7%
  • 08:30: 3Q GDP Annualized QoQ, est. 2.8%, prior 2.8%
    • 3Q Personal Consumption, est. 3.7%, prior 3.7%
    • 3Q GDP Price Index, est. 1.8%, prior 1.8%
    • 3Q Core PCE Price Index QoQ, est. 2.2%, prior 2.2%
  • 08:30: Oct. Durable Goods Orders, est. 0.5%, prior -0.7%
    • Oct. Durables Less Transportation, est. 0.1%, prior 0.5%
    • Oct. Cap Goods Ship Nondef Ex Air, est. 0.1%, prior -0.1%
    • Oct. Cap Goods Orders Nondef Ex Air, est. 0.1%, prior 0.7%
  • 08:30: Oct. Retail Inventories MoM, est. 0.5%, prior 0.8%
    • Oct. Wholesale Inventories MoM, est. 0.1%, prior -0.2%
  • 08:30: Oct. Advance Goods Trade Balance, est. -$102.7b, prior -$108.2b, revised -$108.7b
  • 08:30: Nov. Initial Jobless Claims, est. 215,000, prior 213,000
    • Nov. Continuing Claims, est. 1.89m, prior 1.91m
  • 09:45: Nov. MNI Chicago PMI, est. 45.0, prior 41.6
  • 10:00: Oct. Personal Spending, est. 0.4%, prior 0.5%
    • Oct. Personal Income, est. 0.3%, prior 0.3%
  • 10:00: Oct. PCE Price Index MoM, est. 0.2%, prior 0.2%
    • Oct. PCE Price Index YoY, est. 2.3%, prior 2.1%
    • Oct. Core PCE Price Index MoM, est. 0.3%, prior 0.3%
    • Oct. Core PCE Price Index YoY, est. 2.8%, prior 2.7%
  • Oct. Real Personal Spending, est. 0.2%, prior 0.4%
  • 10:00: Oct. Pending Home Sales (MoM), est. -2.0%, prior 7.4%
    • Oct. Pending Home Sales YoY, est. 0.2%, prior 2.2%

DB's Jim Reid concludes the overnight wrap

As the title of our World Outlook suggests, one of the main themes for 2025 will be how President-elect Trump prioritises his various policies. Indeed since we published, that’s become a little clearer for markets given the announcement of additional tariffs on Canada, Mexico and China we discussed yesterday. As a reminder, Trump said on the Truth Social platform that he’d put 10% tariffs on China, above any additional tariffs, along with 25% on Canada and Mexico on all products. And that led to a very clear reaction yesterday, with the Canadian dollar (-0.58% vs USD) as the worst-performing G10 currency, whilst the Mexican Peso was also down -1.82%. Similarly, the stock markets in the affected countries also underperformed, with Mexico’s S&P/BMV IPC down -0.93% even if Canada’s S&P/TSX Composite recovered to just make it to +0.01% after being down -0.48% initially after trading started.

Such tariffs would also have implications for the US though with our economists yesterday estimating that US core PCE inflation for 2025 could increase from 2.6% to 3.7% if fully implemented (link here), albeit with uncertain passthrough assumption that they go through. Before Trump's victory the assumption was for 2.3% inflation in 2025. On that topic remember that today sees the latest monthly core PCE inflation print with DB expecting +0.29% vs. +0.25% last month. This would take the YoY rate to 2.81% from 2.65%.

Back to the tariffs, clearly at one end of the scale we don't know how much of the rhetoric is a negotiating tactic, but at the other end we don't know how other countries might retaliate if it's not, particularly if that leads to a global trade war. For instance, Mexican President Sheinbaum said yesterday that “one tariff will come in response to another, and so on until we put shared companies at risk”. And we know from both the first Trump and the Biden administrations that others have been willing to react against protectionist policies, so this is set to be a very important part of the outlook for 2025 and beyond. Overnight Trump has nominated Jamieson Greer for the role of Trade Representative which confirms the direction of travel as he served as Chief of Staff under Lighthizer who had the job in Trump's first administration. He also announced Kevin Hassett to lead the National Economic Council. During the last Trump administration, Hassett was a senior adviser to Trump and the chair of the Council of Economic Advisers. He has backed the President-elect’s tariffs proposals in the past.

Despite the tariff threats, US equities held up fairly well yesterday, with the S&P 500 (+0.57%) advancing for a 7th consecutive session as US exceptionalism continued. That said, those companies more exposed to trade saw a clear underperformance. For instance, the NASDAQ Golden Dragon China Index (which includes companies publicly traded in the US where the majority of their business is in China) fell -0.84%, and the Philadelphia Semiconductor Index was also down -1.21%. Similarly in Europe, the STOXX 600 saw a -0.57% fall, but the automobiles and parts component was down by a larger -1.71%.

One factor that supported US equities yesterday was strong data releases. For instance, the Conference Board’s consumer confidence measure was up to a 16-month high of 111.7 in November, whilst the expectations component was up to its highest in nearly 3 years, at 92.3. Moreover, there was also an improvement in their labour market indicators, with the gap between those saying jobs were plentiful and hard to get widening for a second month running.

The FOMC minutes from the November 6-7 meeting showed that committee members thought that “ with inflation continuing to move down sustainably to 2% and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time.” “Many” officials noted that ongoing uncertainty around what the neutral rate should be, "made it appropriate to reduce policy restraint gradually.” That represented an increase after the previous minutes referenced “some” officials. The staff upgraded both growth and inflation forecasts from the prior meeting, this can also be seen from fewer members being concerned with the risk of growth slowing. Last meeting, “most remarked that the downside risks to employment had increased,” but this meeting, “some participants judged that downside risks to economic activity or the labor market had diminished.”

Overall, the minutes gave slightly more credence to a rate cut next month with fed futures now pricing a 63% chance. That’s the most in nearly two weeks. The 2yr yield fell (-3.7bps) into the close from an intraday high of 4.2932% just four minutes before the Fed minutes were released to close -1.2bps lower on the day. 10yr yields were less impacted by the Fed minutes, and finished +3.3bps higher on the day at 4.306% but are back around 4.29% in Asia this morning.

Whilst there’s still a question mark about whether the Fed cut rates in December, there’s little doubt among investors that the ECB will continue on the path downwards. That was confirmed yesterday by ECB Vice President de Guindos, who said in an interview published yesterday that if their projections were confirmed, “we will continue making our monetary policy stance less restrictive.” In light of that, yields on 10yr bunds fell back -2.3bps, but there was also a notable widening in spreads across the continent. For instance, the Franco-German 10yr spread moved up to 86.3bps, which is its highest level since 26 July 2012, the day that Mario Draghi delivered the famous “whatever it takes” speech.

A reminder that we have the passing of the French budget coming to a head in the next few weeks with some concern of a government shutdown if it's not passed. See “Focus Europe: France Budget 2025: Tensions could mount as endgame approaches” (link here) for more. Last night, French Prime Minister Barnier warned that “there will probably be a rather serious storm and serious turbulences in financial markets” if there were to be a no-confidence vote when he presents the 2025 budget. This followed reports, which President’s office Macron later denied, that President Macron expected the government to dissolve.

Elsewhere, Israeli Prime Minister Netanyahu announced a cease-fire agreement with Hezbollah in Lebanon, with President Biden later confirming the ceasefire arrangement and stating that it would start at 4am local time. Brent crude oil prices fell -2.47% intraday around the news before grinding higher into the close to finish down -0.04% to $72.98/bbl yesterday following Prime Minister Netanyahu’s press conference announcing the cabinet vote.

Asian equity markets are mixed this morning and trying to decipher all the tariff related stories. The Nikkei (-1.07%) and the KOSPI (-0.67%) are lower. Elsewhere, Chinese stocks are outperforming with the CSI (+0.64%) leading gains followed by the Shanghai Composite (+0.37%) and the Hang Seng (+0.36%). The S&P/ASX 200 (+0.57%) is also seeing decent gains. US stock futures are slightly lower.

In monetary policy action, the Reserve Bank of New Zealand (RBNZ) lowered the cash rate by half a percentage point to 4.25%. It was the second straight cut of 50bps as the RBNZ seeks to revive the economy now that inflation is under control, making it one of the most aggressive cutters among its western peers. RBNZ Governor Adrian Orr indicated that another 50bps cut is coming in February if the economy evolves as expected.

Early morning data showed that Australia’s headline inflation rate remained well within the RBA’s target band in October, as the CPI was +2.1% higher than a year ago (v/s +2.3% expected), holding steady at its lowest level since July 2021. However, the trimmed mean, or underlying inflation rate, came in at 3.5%. In September, that measure was 3.2%.

Looking at yesterday’s other data, US new home sales in October were at their lowest since November 2022, at an annualised rate of 610k (vs. 725k expected). Separately, the Richmond Fed’s manufacturing index remained at -14 in November (vs. -11 expected).

To the day ahead now, and US data releases include the PCE data for October, the weekly initial jobless claims, the second estimate of Q3 GDP, and the preliminary reading of durable goods orders for October. Central bank speakers include the ECB’s Lane. Finally in the political sphere, the European Parliament will vote on whether to approve the new College of Commissioners.

Tyler Durden Wed, 11/27/2024 - 08:22

Dell, HP Shares Plunge After AI Fails To Ignite "PC Refresh Cycle"

Dell, HP Shares Plunge After AI Fails To Ignite "PC Refresh Cycle"

Shares of Dell Technologies and HP tumbled in premarket trading on Wednesday after both companies reported quarterly financial results, underscoring a lackluster personal computer upgrade cycle. Meanwhile, the highly anticipated upgrade supercycle for AI-enabled Apple iPhones has also been underwhelming.

Dell shares fell as much as 12% in premarket trading after the computer hardware company reported revenue that missed the Bloomberg Consensus. 

"The PC refresh cycle is pushing into next year," Dell CFO Yvonne McGill told analysts on a Tuesday call following the results.

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

  • Infrastructure Solutions Group net revenue $11.37 billion, +34% y/y, estimate $11.34 billion (Bloomberg Consensus)

  • Servers and Networking revenue $7.36 billion, +58% y/y, estimate $7.53 billion

  • Storage revenue $4.00 billion, +4.2% y/y, estimate $3.83 billion

  • Adjusted EPS $2.15 vs. $1.88 y/y, estimate $2.05

  • Total net revenue $24.37 billion, +9.5% y/y, estimate $24.59 billion

  • Client Solutions Group net revenue $12.13 billion, -1.2% y/y, estimate $12.42 billion

  • Commercial revenue $10.14 billion, +3.1% y/y, estimate $10.5 billion

  • Consumer revenue $1.99 billion, -18% y/y, estimate $2.02 billion

  • Adjusted operating income $2.20 billion, +12% y/y, estimate $2.16 billion

Commentary from institutional desks on Dell's earnings (courtesy of Bloomberg): 

Morgan Stanley analyst Erik Woodring (overweight, PT $154)

  • Dell missed estimates on its Client Solutions Group (CSG) business and the management seems conservative with the 4Q forecast

  • The post-earnings stock reaction seems "overdone"

Barclays analyst Tim Long (equal weight, PT to $115 from $106)

  • Dell reported a slight miss in revenues and its forecast was a little light

  • "AI server revenues were in​-​line, but guided slightly lower into the January quarter despite positive comments around the pipeline"

Citi analyst Asiya Merchant (buy, PT to $156 from $160)

  • Dell's forecast missed expectations on "lumpy AI revenues" and dependent on timing of customer acceptance

  • Its CSG business underperformed given more muted PCs

More softness in the PC market was realized after HP's outlook for the first quarter, more specifically, adjusted earnings per share that missed the Bloomberg Consensus.

In an interview, HP CEO Enrique Lores said that Microsoft's new Windows software has not sparked a boom in PC sales from corporate clients. 

"Weaker-than-expected Personal Systems sales and profit were the biggest drag on HP's fiscal 4Q results, and its below-consensus 1Q EPS guidance suggests little improvement in PC demand in the seasonally stronger December quarter," Bloomberg Intelligence Woo Jin Ho wrote in a note. 

Here's a snapshot of the fourth quarter:

  • Adjusted EPS 93c vs. 90c y/y, estimate 93c

  • Net revenue $14.06 billion, +1.7% y/y, estimate $14 billion

  • Personal systems revenue $9.59 billion, +2.1% y/y, estimate $9.74 billion

  • Printing revenue $4.45 billion, +0.8% y/y, estimate $4.25 billion

  • Adjusted operating margin 8.5% vs. 9% y/y, estimate 8.66%

  • Free cash flow $1.5 billion, -21% y/y, estimate $1.56 billion

  • Repurchase of common stock $900 million

  • Share repurchased 25.4 million

HP's outlook for the first quarter failed to impress Wall Street analysts, many of whom had predicted a PC demand boom fueled by AI heading into the new year

  • Sees adjusted EPS 70c to 76c, estimate 86c (Bloomberg Consensus)

More color on HP's earnings report via Wall Street analysts:

JPMorgan analyst Samik Chatterjee (overweight, PT to $40 from $41)

  • HP's PC margin pressures make FY25 forecast "more contingent on volume cycle"

  • While the "challenging near-term fundamentals for the PC market are already well understood," the company is facing greater headwinds in relation to competitive pricing dynamics in the market

  • "While there are limited details around implementation of additional tariffs, the company reiterated that it is in a much more favorable position relative to a few years ago after its focus on supply chain resiliency"

Evercore ISI analyst Amit Daryanani (outperform, PT $40)

  • HP reported solid results considering PC market softness during the quarter

  • There are some concerns surrounding a below seasonal 1Q EPS forecast and "the H2 skewed guide appears appropriate considering industry dynamics"

Morgan Stanley analyst Erik Woodring (equal-weight, PT $36)

  • HP's in-line FY25 forecast coupled with a very sub-seasonal 1Q EPS outlook "means 2025 will be more back-half loaded than ever before"

  • "Similar to DELL, HPQ noted a delayed PC refresh, which creates 2H-weighted PC revenue ramp"

In premarket trading, Dell shares dropped 12%, while HP shares are down 8%

Separately, market tracker IDC reported that the AI-enabled Apple iPhone 16 upgrade supercycle was pretty much a dud. 

So much for AI driving consumer demand for new devices.

Tyler Durden Wed, 11/27/2024 - 08:10

Schiff Vs. Breedlove: Gold Will Thrive In A Digital Future

Schiff Vs. Breedlove: Gold Will Thrive In A Digital Future

Via SchiffGold.com,

Last week, Peter participated in a ZeroHedge debate moderated by Keith Knight (who also interviewed Peter recently). He faced off against Bitcoin advocate Robert Breedlove on his show, “What is Money?”  Peter and Robert discuss the future use cases of Bitcoin and gold, the philosophy and economics behind money, and what it would take for each other to change their minds and renounce their preferred sound money.

Keith has the debaters start with common ground. The state is the source and cause of inflation, and inflation is a devastating tax on consumers:

The effect of that [inflation] is that prices go up. It offsets the decline in prices that might otherwise have resulted from an efficient, growing, free-market economy, where the tendency is for prices to come down over time. Governments can rob people of those benefits by creating inflation. Inflation is not just how much prices go up, and that’s not just the result. It’s how much they might have otherwise gone down, had the government not created the inflation that caused them to go down less or to go up.

As they move into the debate, Peter presents the Austrian school of economics’ explanation for the origin of money. Notably, precious metals needed some non-monetary use before they were used as a medium of exchange:

Before money, people traded goods, but it was cumbersome because you needed a coincidence of needs. … But man eventually found out that they could have one commodity that could be used in exchange for all other commodities. And gold was basically the commodity that ended up being money. Other commodities have been money, and they can be money, but gold just fulfills that role very well for a lot of the properties that Bitcoin copied. … And what gives gold value is the fact that it’s a precious metal that we need because it, you know, it does a lot of things.

Peter contends that even if cryptocurrencies are eventually used as money, there’s no good reason to think Bitcoin will out-compete other coins, especially in the future:

There’s nothing unique about Bitcoin. You say Bitcoin is the only thing. There’s tens of thousands of other tokens that I could create, that have been created, that will be created. There is nothing special about Bitcoin that anybody else can’t copy or replicate.

All that it has is that it has more people who believe in it right now. You have more computer capacity behind it. But that could change.

The odds that anyone’s even going to care about Bitcoin in 10 years, I think, are pretty low.

The fervor around Bitcoin today is driven by speculation. Most retail investors in Bitcoin are not Bitcoin maximalists who actually expect it to function as a medium of exchange:

The main driver is speculation. In fact, the main buying right now for Bitcoin is coming from ETFs. … They’re buying it because they think the price of this ETF is going to go up.

It has got nothing to do with Bitcoin as money… It’s just that people are buying that particular speculative asset in their brokerage accounts instead of some other speculative asset because, for the moment, they think there’s upside.

Robert raises the problem of counterparty risk, which Bitcoin solves under some circumstances. Peter counters by pointing out counterparty risk is inherent in a market economy. Even Robert tolerates counterparty risk, and market forces tend to minimize its effect:

Your main problem then with gold … is you’re saying that you don’t trust the custodian. That the custodian is going to loan out or embezzle my gold, or they’re going to do something. And so gold can’t work in the electronic world of the future because you can’t trust counterparties, that we’re all criminals, and capitalism doesn’t really work in that respect because there’s no way to know who’s honest and who’s a crook. And you can’t trust counterparties. Let me ask you, Rob, do you have any insurance at all? Like life insurance, fire insurance, health insurance, auto insurance—do you have any insurance?

In Peter’s closing segment, he argues that future technology will enhance gold’s monetary properties rather than supplant them. Moving back to metals, not crypto, is the path forward:

Gold, you know, has worked for thousands of years, and the technology associated with digitization, the internet, and computers doesn’t make gold obsolete or diminish its role in any way. In fact, it makes gold perform all of the functions it has performed so successfully over the centuries that much better. Rather than trying to reinvent the wheel and getting people to think, ‘Oh, let’s just create this new money out of thin air and pretend it has value,’ like Bitcoin, efforts and resources should be spent trying to move the world back to a gold standard and away from fiat money.

Earlier this fall, Peter also debated Bitcoiner Jack Mallers on Bitcoin. Make sure to check it out!

Tyler Durden Wed, 11/27/2024 - 07:20

The War On Froot Loops

The War On Froot Loops

The road ahead for food manufacturer Kellogg may have just gotten rockier. 

The maker of Froot Loops has faced criticism for using artificial food dyes that some say cause health problems in children. Now-incoming HHS secretary Robert F. Kennedy Jr., a vocal critic of processed foods, argues that companies opt for artificial dyes because they're cheaper than natural alternatives, despite potential health risks, according to the Wall Street Journal. 

Kellogg maintains that the colors used in its cereals are considered safe by scientific bodies worldwide. And therein lies, as WSJ puts it, "how Froot Loops landed at the center of U.S. food politics".

Because now President-elect Trump has given Kennedy a platform to tackle chronic disease by targeting harmful chemicals in food. Kennedy often criticizes companies for using artificial dyes, which he says are cheaper but problematic for health.

These dyes, found in products like Froot Loops and M&M’s, enhance appearance but are restricted in some countries. While some U.S. brands offer dye-free versions abroad, efforts to replace dyes domestically have met resistance from consumers favoring the original look and taste.

The Wall Street Journal reported that critics argue Kennedy’s stance lacks scientific backing, while consumer advocates support his push to ban synthetic dyes, especially in foods marketed to children. 

Artificial dyes are pervasive in U.S. grocery stores but restricted in some countries, where companies like Kellogg already offer dye-free versions. Efforts to eliminate dyes in the U.S. have faced resistance from consumers preferring the appearance and taste of artificially colored foods.

California’s recent bans on certain food additives, including artificial dyes, have intensified pressure on food manufacturers like Kellogg, Mars, and General Mills. While Kellogg maintains its dyes meet global safety standards, critics accuse it of prioritizing profits over health by marketing “inferior” U.S. products.

Activists like Vani Hari and Jason Karp have urged Kellogg to ditch dyes entirely, organizing protests and delivering petitions to its headquarters, highlighting the stark difference between U.S. and international offerings.

Many companies, including Mars and General Mills, attempted to phase out dyes in the past but reversed course due to consumer backlash over taste and appearance. California’s laws, however, are forcing companies to revisit the issue.

As the food industry navigates evolving regulations and Kennedy’s potential influence, manufacturers appear hesitant to make major changes until clearer federal policies emerge under the new administration.

“They get brighter colors in Froot Loops, but it’s literally poisoning our kids,” Kennedy is quoted as saying on Fox News earlier this year. 

Tyler Durden Wed, 11/27/2024 - 06:55

Turkey Demands Russia Sanctions Waiver From US For NatGas Ahead Of Winter

Turkey Demands Russia Sanctions Waiver From US For NatGas Ahead Of Winter

The US and UK have this month been stepping up efforts to thwart Russia's sanctions evading efforts when it comes to energy exports.

This week the British government sanctioned 30 ships involved in Russia's shadow fleet to disrupt its oil trade, and last week the Untied States moved against Russia's largest remaining non-sanctioned bank, Gazprombank.

Gazprombank is known to handle payments from foreign customers related to those Russian natural gas supplies still going to Europe.

Turkey this week is seeking a sanctions waiver from Washington, arguing that it is essential for the country to keep importing Russian gas. It is warning of far-reaching repercussions to the economy if this energy lifeline is cut off.

"These sanctions will affect Türkiye. We cannot pay, if we cannot pay we cannot buy the goods. The Foreign Ministry is in talks," Energy and Natural Resources Minister Bayraktar told a press briefing Monday.

Bayraktar said that a regular supply of natural gas is crucial headed into winter, and the country has long relied heavily on gas imports.

"Our industry and households need gas," the energy minister said. "Within the framework of supply security, we depend on Russian gas."

He specifically added that Turkey needs a waiver to make its payments through Gazprombank in order to secure necessary supplies.

"If such an exemption is not granted to Türkiye, it will directly impact us. At this point Russia is not the target, Türkiye is the direct target (of these sanctions)."

Interestingly, Bayraktar also lashed out at the lame-duck Biden administration for the poor timing of the sanctions. "The problem with sanctions is that they can be imposed overnight, but lifting them takes much longer," he said, suggesting that this was done with an intent to thwart expected Trump efforts to deescalate with Russia.

 "Their internal politics are not my concern. My priority is to ensure my country gets the gas it needs," Bayraktar continued in reference to the recent US election. Russia remains Turkey's top natural gas supplier.

Tyler Durden Wed, 11/27/2024 - 02:45

Trump Transition Team Signs Modified White House Agreement, Without Govt Technology To Conduct Surveillance

Trump Transition Team Signs Modified White House Agreement, Without Govt Technology To Conduct Surveillance

Authored by 'sundance' via The Last Refuge,

The President Trump transition team has signed a Memorandum of Understanding (MOU) to start the process of transferring control of the federal government.  The landing teams from each of the cabinets will now begin to engage with their exiting counterparts.

There were many articles written about the delays in signing the agreements.  However, President Trump waited until he has his cabinet fully assembled before signing the first part that permits the landing teams to engage.  The second part with government provided offices and technology is NOT being accepted.

President Trump’s Chief of Staff, Susie Wiles, announced the Trump transition team has refused to sign an MOU with the Government Services Administration (GSA), and will not be using cell phones, computers, offices or “any technology” provided by the GSA.  This is a smart move to avoid the Deep State surveillance situation that was faced in the first term.

In the first Trump administration, the GSA had wiretaps, office bugs, and gave all the electronic communication information from the Trump transition to the FBI, IC and later Robert Mueller. In essence, the GSA spied on the Trump team, then gave all the data to the operatives who were in place to target them.  The Trump team is not making this mistake again.

The Trump transition team is also not going to use the office space provided by the GSA and will instead have their own offices and security systems in place to coordinate the transition to power.

WASHINGTON DC – […] The Trump team’s unprecedented delay in signing these agreements, weeks after being declared the winner of the election, had alarmed former officials and ethics experts who warned it could lead to conflicts of interest and leave the new government unprepared to govern on Day One.

In the Tuesday announcement, Wiles suggested the Trump transition will not sign a separate agreement with the General Services Administration, which would have allowed them to receive federal funding, cybersecurity support and government office space, pledging instead to fund the transition with private dollars, run it out of private facilities, and deploy their own “existing security and information protections” for sensitive data.

The transition, Wiles said, “will operate as a self-sufficient organization, adding that declining government funding will “save taxpayers’ hard-earned money.”

And while Wiles also pledged in the Tuesday statement to publicly disclose the private donors to the transition and “not accept foreign donations,” there will be no legal mechanism to enforce those promises of transparency.

The lack of federal cybersecurity support could also make the Trump transition a softer target for foreign hackers — who already successfully penetrated the campaign earlier this year.

“That’s something that in 2020 was maybe the single most important worry of the [Biden] transition team — that they would be hacked, and all of this information, including intelligence information, personal information about job applicants, would be threatened,” said Heath Brown, an associate professor of public policy at CUNY’s John Jay College who wrote a book about Biden’s transition. “It’s imperative that the Trump Transition Team has installed the proper procedures to protect itself.”

White House spokesperson Saloni Sharma said the Biden administration is concerned about the ramifications of their successors forgoing GSA support, but remains “committed to an orderly transition.”

“While we do not agree with the Trump transition team’s decision to forgo signing the GSA MOU, we will follow the purpose of the Presidential Transition Act which clearly states that ‘any disruption occasioned by the transfer of the executive power could produce results detrimental to the safety and wellbeing of the United States and its people,’” she said.

In the White House memo, Sharma added, the Trump transition “agreed to important safeguards to protect non-public information and prevent conflicts of interest, including who has access to the information and how the information is shared,” and also agreed to publicly share the ethics agreements it is imposing on its own employees.

(read more)

Tyler Durden Tue, 11/26/2024 - 22:35

Winds Of Change Might Blow Through Crypto Sector During Trump's 2nd Term

Winds Of Change Might Blow Through Crypto Sector During Trump's 2nd Term

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

Securities and Exchange Commission (SEC) Chair Gary Gensler’s departure in January could transform the U.S. cryptocurrency regulatory landscape.

An image of Bitcoin and U.S. currencies are displayed on a screen as delegates listen to speakers during the Interpol World Congress in Singapore on July 4, 2017. Dominic Gwinn/AFP via Getty Images

Gensler, a staunch critic of the digital assets industry, confirmed on social media platform X last week that he will resign from his role the day of President-elect Donald Trump’s inauguration.

Trump and Gensler possess contrasting views of crypto.

Gensler has cracked down on the crypto industry since he was appointed head of the SEC in 2021.

Speaking at the Piper Sandler Global Exchange and FinTech Conference in New York City last year, the outgoing SEC chief said the crypto frenzy has been rife with “Hucksters. Fraudsters. Scam artists. Ponzi schemes.”

“The crypto securities markets should not be allowed to undermine the well-earned trust the public has in the capital markets,” Gensler said. “The crypto markets should not be allowed to harm investors.”

President-elect Donald Trump has pledged to herald a change in federal crypto policy.

While he promised to fire Gensler on his first day in the White House, Trump has also proposed a plethora of pro-Bitcoin measures.

He wants to establish a national Bitcoin reserve, create a presidential crypto advisory council, and ensure all remaining Bitcoin is mined domestically.

“For too long, our government has violated the cardinal rule that every Bitcoiner knows by heart: Never sell your Bitcoin,” Trump said during a keynote address at the largest industry conference this past summer.

This is a reversal from Trump, who has called it a scam and a threat to the U.S. dollar.

“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” Trump said in social media posts in 2019.

“Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

Now that the new administration features pro-crypto officials, will the SEC’s regulatory pursuits change?

Winds of Regulatory Change

The agency’s fiscal year 2024 enforcement in the crypto industry resulted in fines and investor relief totaling $8.2 billion.

With the record-high penalties, the number of cases tumbled 26 percent compared to the previous year.

“The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable,” Gensler said in a statement attached to the announcement.

This comes as the SEC outlined its aims for the new year.

In October, the SEC’s Division of Examinations published its Fiscal Year 2025 Examination Priorities.

The report reiterated the SEC’s position to continue monitoring the crypto sector, including investment advisers, broker-dealers, and other financial intermediaries that sell digital assets or facilitate transactions.

The U.S. Securities and Exchange Commission in Washington on Sept. 18, 2008. Chip Somodevilla/Getty Images

“Examinations of registrants will focus on the offer, sale, recommendation, advice, trading, and other activities involving crypto assets that are offered and sold as securities or related products, such as spot bitcoin or ether exchange-traded products,” the report stated.

With a new regime set to take the reins, market watchers are bracing for change, especially with prominent crypto advocates leading various departments, including Scott Bessent as treasury secretary and Howard Lutnick as commerce secretary.

For now, industry experts are submitting recommendations in the suggestions box.

Stuart Alderoty, the chief legal officer of blockchain-based digital payment company Ripple, outlined several priorities the Trump transition team should consider when choosing the next SEC head.

On the new administration’s first day, Alderoty thinks the federal government should end non-fraud crypto litigation and ensure commissioners Mark Uyeda and Hester Peirce remain at the regulatory body, he said on X.

Uyeda and Peirce have been crypto’s allies at the SEC.

Uyeda, in an interview with FOX Business’s “Varney & Co.,” agreed with the president-elect that the “war on crypto needs to stop.”

“There are a number of things that we can do with respect to crypto to help make America one of the global leaders in crypto,” he said.

The SEC needs to provide clarity, produce safe harbors and regulatory sandboxes for investors, and advocate for a whole-of-government “cohesive and comprehensive approach to crypto,” Uyeda said.

“President Trump and the American electorate have sent a clear message. Starting in 2025, the SEC’s role is to carry out that mandate,” he said.

Peirce, speaking on the “CryptoCounsel” podcast this month, has touted more open dialogue between the crypto industry and SEC regulators.

The Ripple CLO has echoed this sentiment, supporting improved relations between lawmakers, regulators, and market participants.

“Collaborate with all financial regulators and Congress on clear and simple rules for crypto, but without presuming that those rules give the SEC primary jurisdiction over anything,” Alderoty wrote.

“Guarantee accountability and restore public trust by addressing past issues within the SEC by emboldening the Office of Inspector General.”

Alderoty also proposed rescinding the SEC’s 2019 Framework for Investment Contract Analysis of Digital Assets, which was published after the industry called for better regulatory clarity between securities laws and blockchain-based tokens.

This guidance, which is neither a rule nor a regulation, offers a blueprint for determining whether a digital asset possesses the characteristics of an investment contract (security).

With Republican control of Congress, lawmakers are likely to adopt a “principles and disclosure-based” approach to policymaking, says Dorothy DeWitt, a former director of market oversight at the U.S. Commodity Futures Trading Commission.

Enforcement will also likely target high-risk areas of the crypto market, such as national security, fraud, and misconduct, she said.

“Finally, a path to regulatory clarity will almost certainly involve registration of exchanges, intermediaries and digital assets securities, and implementation of more extensive disclosure standards as well as formal compliance with agency-prescribed principles,” DeWitt said in a Nov. 18 post for the Official Monetary and Financial Institutions Forum.

Despite the winds of change expected to blow through the crypto sector, industry parties should not anticipate significant policy and regulatory changes immediately.

Instead, DeWitt notes, these adjustments could “take place over a year or more, not months.”

Since Trump’s electoral victory, Bitcoin prices have rocketed to all-time highs and were a few hundred dollars short of reaching $100,000.

The growth in the chief cryptocurrency, which controls 58 percent of the market, has lifted other digital tokens, from stablecoins to altcoins.

A spokesperson for Securities and Exchange Commission declined a request for comment.

Tyler Durden Tue, 11/26/2024 - 20:55

Niall Ferguson, Scott Horton To Debate Ukraine War Tomorrow Evening In ZeroHedge Exclusive

Niall Ferguson, Scott Horton To Debate Ukraine War Tomorrow Evening In ZeroHedge Exclusive

Despite Trump’s promises to bring a swift end to the war in Ukraine by negotiating with Russia, the war has escalated to a dangerous inflection point with long-range U.S., British, and French missiles being deployed deep in Russian territory and talks of deploying NATO troops in Ukraine. That… and anonymous officials in the New York Times saying what is impossible to believe:

"Several officials even suggested that Mr. Biden could return nuclear weapons to Ukraine that were taken from it after the fall of the Soviet Union. That would be an instant and enormous deterrent. But such a step would be complicated and have serious implications," the newspaper wrote.

Amid the chaos, ZeroHedge will be hosting preeminent historians Sir Niall Ferguson and Scott Horton to debate the history of the conflict and U.S. policy in the region. They will be joined by the Hoover Institute's Peter Robinson (if you’ve seen a Thomas Sowell interview, it was probably his).

Join us at 7pm ET right here on the ZeroHedge homepage (as well as Twitter/X and YouTube channels) for an epic matchup that you won’t find anywhere else.

Ferguson is a senior fellow at the Hoover Institution and at the Belfer Center for Science and International Affairs at Harvard University. He’s written over a dozen books on geopolitical and monetary history.

Horton is the founder of the Libertarian Institute and recently published his book, Provoked, on the history of the war in Ukraine and decades of rising tensions between the U.S. and Russia.

We hope you’ll join us on the eve of Thanksgiving. Recent war context included below:

***

Nukes for Ukraine?!

Days ago, The NY Times revealed that US and European officials have discussed a range of options they believe will deter Russia from taking more Ukrainian territory, including the possibility of providing Kiev with nuclear weapons. "US and European officials are discussing deterrence as a possible security guarantee for Ukraine, such as stockpiling a conventional arsenal sufficient to strike a punishing blow if Russia violates a cease-fire," the report said.

The article then stated, "Several officials even suggested that Mr. Biden could return nuclear weapons to Ukraine that were taken from it after the fall of the Soviet Union."

Former Russian president and current deputy chairman of the Security Counsel Dmitry Medvedev has responded by pointing out that if the West actually went forward with transferring nukes to Ukraine, this would be seen as tantamount to an attack on Russia. He explained that this is a key aspect of Russia's newly expanded nuclear doctrine.

Image source: Presidency of Russia

In a Telegram post on Tuesday, Medvedev specifically referenced the recent NY Times report, and said: "Looks like my sad joke about crazy senile Biden, who’s eager to go out with a bang and take a substantial part of humanity with him, is becoming dangerously real."

Medvedev then stressed that "giving nukes to a country that’s at war with the greatest nuclear power" is so absurd that Biden and any of his officials considering it must have "massive paranoid psychosis."

His biggest and most specific threat came as follows: 

"The fact of transferring such weapons may be considered as the launch of an attack against our country in accordance with Paragraph 19 of the ‘Basic Principles of State Policy on Nuclear Deterrence’," Medvedev wrote.

Talk of NATO Troops

Prominent French publication Le Monde on Monday followed by saying serious discussions over injecting Western troops into the war have intensified in the last days: 

As the conflict in Ukraine enters a new phase of escalation, discussions over sending Western troops and private defense companies to Ukraine have been revived, Le Monde has learned from corroborating sources. These are sensitive discussions, most of which are classified – relaunched in light of a potential American withdrawal of support for Kyiv once Donald Trump takes office on January 20, 2025.

Britain is once again at the forefront of urging NATO's deeper involvement in the war, which threatens at any moment to explode into WW3 among nuclear-armed powers. Enter Keir Starmer... in the hawkish footsteps of Boris Johnson:

However, it was relaunched in recent weeks thanks to the visit to France of the UK prime minister, Keir Starmer, for the November 11th commemorations. "Discussions are underway between the UK and France on defense cooperation, particularly with a view to creating a hard core of allies in Europe, focused on Ukraine and wider European security," confided a British military source to Le Monde.

Jean-Noël Barro's aforementioned words about 'no options' ruled out appears to have been a reflection on these continued 'sensitive' conversations.

There have been more reports of US-supplied ATACMS launches on Russian territory since their initial use last week:

Tyler Durden Tue, 11/26/2024 - 20:30

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