Zero Hedge

Trump's Newest Iran Sanctions Another Shot Across China's Bow

Trump's Newest Iran Sanctions Another Shot Across China's Bow

Thursday saw President Trump and the US Treasury unleash a new sanctions pile-on against Iran, with a new rollout of secondary sanctions targeting Iranian oil and petrochemical products, sending crude prices higher on the day...

"They will not be allowed to do business with the United States of America in any way, shape, or form," the President wrote on Truth Social in combination with a Treasury statement. It's as yet unclear precisely how such sanctions will be implemented, with the most extreme or 'nuclear option' being naval intervention against vessels transporting Iranian oil.

Chinese Vice Premier Ding Xuexiang meets with Iran's Foreign Minister Seyed Abbas Araghchi in Beijing last month. Yin Bogu/Xinhua via Getty Images

The main warning and teeth behind it centers on the threat that any nation buying oil or petrochemicals from the Islamic Republic will be barred from doing any business with the US.

"Any Country or person who buys ANY AMOUNT of OIL or PETROCHEMICALS from Iran will be subject to, immediately, Secondary Sanctions," Trump stated in the post. Oil had quickly jumped 2% on the mid-afternoon announcement.

Trump is clearly setting out to negotiate from a position of "strength" amid his maximum pressure campaign, aimed at getting Tehran to sign on to a fresh nuclear agreement.

Talks have apparently hit some logistical hurdles, or perhaps Trump's new secondary sanctions have resulted in jitters and renewal of anger and lack of trust from Iranian leadership:

A fourth round of Iran-US talks over Tehran's nuclear program has been postponed.

Iran said the two countries, along with facilitators Oman, had jointly decided to postpone Saturday's meeting in Rome for "logistical and technical reasons". The US said the timing of the talks had not been confirmed in the first place.

Is this an intentional stall?

Surely it's also a shot across China's bow, given that it imports over a million barrels per day from Iran, and for years amid Tehran's isolation has been the biggest buyer of Iranian crude.

As for when US-Iran talks might resume, after relatively 'positive' prior recent rounds, Iran's Foreign Minister Seyed Abbas Araghchi emphasized Thursday on X that Tehran's "determination to secure a negotiated solution" had not changed.

Kpler & TankerTrackers.com

He wrote: "In fact, we are more determined than ever to achieve a just and balanced deal: guaranteeing an end to sanctions, and creating confidence that Iran's nuclear program will forever remain peaceful while ensuring that Iranian rights are fully respected."

Tyler Durden Thu, 05/01/2025 - 22:35

Social Security Cuts Overpayment Withholding Rate To 50% Down From 100%

Social Security Cuts Overpayment Withholding Rate To 50% Down From 100%

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

The Social Security Administration (SSA) has announced a new policy that reduces the default withholding rate to 50 percent for recovering Social Security benefit overpayments under Title II, the federal program covering retirement and disability insurance.

The change, outlined in an “emergency message” dated April 25, comes less than a month after the agency raised the withholding rate to 100 percent of monthly benefits—up from a prior 10 percent—to recoup overpayments. The initial sharp increase drew criticism from some lawmakers and advocates, who warned that full withholding could harm some lower-income Americans who rely on Social Security to meet basic needs.

Under the updated directive, any overpayment notice issued on or after April 25 will automatically carry a 50 percent withholding rate. Beneficiaries will have 90 days to respond—either by contesting the overpayment, requesting a waiver, or negotiating a lower repayment rate. If no action is taken within that window, the SSA will start withholding half the monthly benefit until the overpayment is fully repaid.

The updated rules do not apply to Title XVI overpayments, such as those involving Supplemental Security Income (SSI) recipients, who still face the 10 percent withholding rate. The revised policy also excludes cases involving fraud or similar fault, which follow different recovery procedures.

The shift marks the third related policy change in just over a year. In March 2024, the agency lowered the default withholding rate from 100 percent to 10 percent, citing the wish to ease financial hardship for affected Americans.

It’s unconscionable that someone would find themselves facing homelessness or unable to pay bills, because Social Security withheld their entire payment for recovery of an overpayment,” Martin O'Malley, then Commissioner of Social Security, said at the time.

That policy was reversed last month, on March 27, when SSA reinstated full 100 percent withholding, citing fiscal responsibility and an estimated $7 billion in savings over the next decade.

We have the significant responsibility to be good stewards of the trust funds for the American people,” Lee Dudek, Acting Commissioner of Social Security, said in a statement.

Rep. John B. Larson (D-Conn.) criticized the increase as “unconscionable,” arguing that overpayments are not the fault of beneficiaries and overpaid recipients who rely on Social Security to make ends meet would face undue hardship if their entire checks were suddenly seized.

With its latest decision to cut the withholding rate in half, the SSA appears to be seeking a middle ground between fiscal responsibility and potential beneficiary hardship.

The agency disbursed roughly $1.4 trillion in benefits in fiscal year 2023 across its retirement and disability programs, according to the agency’s 2024 financial report. Of that amount, around $3.3 billion—or 0.24 percent—was classified as overpayments.

SSA’s overpayment recovery practices have come under increasing scrutiny from lawmakers and watchdogs in recent years, particularly for the stress they impose on beneficiaries who may have had little or no role in the errors.

In a November 2023 letter, Sens. Maggie Hassan (D-N.H.) and Bill Cassidy (R-La.) urged the agency to minimize overpayments and protect recipients from abrupt financial disruption, especially when the mistakes stem from agency error.

The Government Accountability Office has echoed those concerns, noting that the majority of disability beneficiaries who return to work eventually face overpayments—often amounting to thousands of dollars due to complex reporting rules and processing delays.

The SSA says it has launched an internal review and is working to expand data-sharing with payroll systems to help reduce payment errors.

Tyler Durden Thu, 05/01/2025 - 22:10

Economic Illiterate Kamala Harris Attacks Trump Tariffs As 'Absolute Chaos'

Economic Illiterate Kamala Harris Attacks Trump Tariffs As 'Absolute Chaos'

It's an old dictum but it remains true that you never want to interrupt your enemies when they are making a mistake.  That said, it's oh so tempting to analyze the behavior of the Democratic Party as a perfect representation of blind cultism.  How did they plunge from the heights of the Obama Administration and near complete control of American culture to the depths of the Biden Administration, the Kamala Harris campaign and the degeneracy of woke groomers?

One could follow the root back to the problem of absolutism; leftist never admit when they are wrong and they always double down because they think they are the ultimate arbiters of ethics.  Even with the abject failures of Kamala Harris during the 2024 elections the Democrats continue to claim that the "real reason" they lost, the real reason their public approval numbers are at historic lows, is because they "need to do the same things they've been doing, but do them harder".  

This is why the progressive movement is dead in the water.  They just can't accept that the majority of Americans fundamentally do not like them, their polices or their beliefs.  Most Americans can't connect to the hypocrisy, and they certainly don't want to hear criticisms of the Trump Administration by the same people who lied incessantly and failed the country in every way imaginable.

An army of naysayers, primarily among Democrats, have gone on the attack against Trump's tariffs using obviously scripted terminology, repeating the word "chaos" over an over again in the hopes that it will stick.  In reality, most of the "chaos" has come from the political left trying to disrupt or sabotage Trump's efforts in any way they can. It's almost like the 2024 campaign never ended, but that's how these people operate. 

Kamala Harris, an economic illiterate and possibly one of the most embarrassing candidates the Democrats have ever fielded, has suddenly slithered up from the wreckage of her recent White House bid to regurgitate the same predictable talking points.  She says the tariffs are creating chaos; she also claims that she predicted they would cause a recession and she's here to say "she told us so". 

One could argue that recession factors were already heavily present during the Biden Administration, but Democrats are hoping most people don't actually know what a recession is.

The chaos narrative is a scheme to tap into a subset of the population that innately fears change or reform.  Keep in mind, four years of Biden and Harris brought nothing but total chaos to the US, but economically they did maintain the status quo.  The status quo being the perpetual march into stagflatiory crisis, ever higher prices, ever higher taxes and less economic freedom for the average citizen. 

What the public is desperate for is to try something different, but anytime new fiscal policies are suggested they are immediately and viciously degraded as a trigger for "chaos". 

These arguments come from people (like Harris) that don't have the slightest understanding of America's financial situation.  At this stage, a recession and some moderate deflation would be a welcome development given that the Biden regime helped to inflate prices on necessities beyond what most people in the middle class can afford.  And, if Trump can actually convert tariffs into government revenues to replace the income tax as he has promised, then the economic renaissance that would result would be unmatched.

To be fair, it is in many ways a gamble.  If tariffs are applied for the long term they will require subsequent and speedy manufacturing development on US soil.  This is happening already on a limited scale.  There is also the likelihood that prices on many imported goods will rise.  However, a focus on lowering the costs of domestic necessities like food, energy and housing is what needs to be prioritized (not plastic Chinese trinkets) and sticking with the inflationary trends of globalism is not going to help.     

Harris and Democrats want to tie Trump and conservatives to the economy like an anchor and throw it overboard in the hopes that their ideological opponents will be dragged to the bottom.  They are also overestimating the public's capacity for forgiveness when it comes to the damage the Dems have already done.  At no point have they offered any practical solutions to the dangers facing the US system. Furthermore, they are greatly underestimating the American desire to see the globalist system crash and burn.  People are cheering the death of globalism, not living in fear of it.

Tyler Durden Thu, 05/01/2025 - 21:45

A Curricular Solution To The Crisis Of Civic Illiteracy

A Curricular Solution To The Crisis Of Civic Illiteracy

Authored by David Bruce Smith via RealClearPublicAffairs,

John and Abigail Adams envisioned an America with a school in every neighborhood and a well-informed citizenry that was adept in languages, literature, and music, as well as science, history, and religion. Their vision was practical until the ages recast it, little by little.

Then sometime between Joseph McCarthy and Joan Baez, the status quo of the educational system came undone.

Students who had been accustomed to a traditional 50/50 split between the humanities and the sciences were capsized academically by the surprise Sputnik launch in 1957. The U.S.’s race to space sent higher education into a tizzy, becoming fixated on improving science education above all. In the succeeding seven decades, resources have consistently risen for STEM (science, technology, engineering, and mathematics), which has been to our benefit. But this has come at an unnecessary cost: the humanities have been downplayed, devalued, and dodged.

That uneven ratio has bestowed an unfortunate historic illiteracy on three generations. Most people, for example, do not know the philosophical roots of the Declaration of Independence, their rights as laid out in the Constitution, or the civic virtues their teachers should have taught them. For these three reasons, many Americans do not vote in local, state, or national elections.

Even amid this crisis of civic illiteracy, only about 18% of colleges and universities nationwide require the study of history and government in their general education programs. In years past, when the architecture of academe was different, a plethora of institutions, such as Harvard, Rice, Notre Dame, Johns Hopkins, and William & Mary, proffered requirements for focused classes in American history. But their phase-out – begun in the 1960s – was practically completed by 2000.

According to a report from the American Council of Trustees and Alumni, nowadays, at Columbia University, “Students must take at least nine courses to graduate with a B.A. in history. Of these courses, four must be in a chosen field of geographical, chronological, or thematic specialization, and three must be outside of the specialization, including one course removed in time and two courses removed in space.” In other words, the major requires exposure to a variety of histories – none of which need touch on America.

That gap in Columbia’s history major requirements is deeply troubling, though it at least has a Contemporary Civilization requirement in its signature core curriculum for undergraduates that addresses founding documents and key concepts of United States government. Meanwhile, at Colgate University, which has no such option in its general education requirements,

“Students choose one of two pathways to graduate with a B.A. in history. Both require nine courses. The Field of Focus (FoF) Pathway requires one history workshop, seven electives….. The FoF Pathway allows students to devise individualized, intellectually coherent specializations. Possible fields of focus include environmental history, gender and sexuality, and race and racism.”

This reorientation away from the study of American history – even as a point of reference for students who are focusing their studies on other parts of the world – is now the norm in the American academy. In the 2020–21 academic year, 18 of the top 25 public universities did not have a wide-ranging American history requirement for students seeking a B.A. in history in the major or core curriculum, nor did 24 of the 25 best national schools.

Even the legendary linchpins of the liberal arts – Amherst, Swarthmore, Vassar, Smith, Williams, and Pomona – fared poorly: 21 out of 25 colleges examined did not have an American history requirement.

The consequences of forgoing the study of American history have a powerful effect on the population. Much of what is not learned – or stays uncorrected – turns into the misinformation that is so damaging in a free and democratic society.

When 8th graders were asked in 2011 to choose a “‘belief shared by most people of the United States,’ a majority (51 percent) picked ‘The government should guarantee everybody a job,’ and only a third chose the correct answer: ‘The government should be a democracy.’”

In 2015, 10% of college graduates believed Judy Sheindlin – TV’s “Judge Judy” – was a member of the Supreme Court.

In 2019, ACTA found that 18% of American adults thought New York Congresswoman Alexandria Ocasio-Cortez was the architect of the New Deal, a package of programs introduced by President Franklin Delano Roosevelt in 1933. Twenty-six percent believed Brett Kavanaugh was the current Chief Justice of the Supreme Court, along with another 14% who identified Antonin Scalia, although he had been dead for two years at the time of the survey. Only 12% knew the 13th Amendment freed the slaves in the United States. And 30% thought the Equal Rights Amendment guaranteed women the right to vote.

In 2024, an ACTA survey of college students showed that fewer than half identified ideas like “free markets” and “rule of law” as core principles of American civic life. The survey also found that 60% of American college students failed to identify term lengths for members of Congress. A shocking 68% did not know that Congress is the branch that holds the power to declare war. Seventy-one percent did not know when 18-year-olds gained the right to vote.

All of these results were based on multiple-choice questions. All the respondents had to do was select the correct option out of four possibilities.  

The late Bruce Cole, chairman of the National Endowment for the Humanities from 2001 to 2009, admonished, “Unlike a monarchy, a democracy is not automatically self-perpetuating. History and values have to be renewed from generation to generation.” Our failure to educate future citizens for informed civic participation compromises the country. Institutions need to take ACTA’s findings to heart and, starting with their requirements for the history major, embrace their obligation to address the crisis in civic education.  

David Bruce Smith is the founder of the Grateful American® Foundation and co-founder of the Grateful American® Book Prize.

Tyler Durden Thu, 05/01/2025 - 21:20

Futures Jump After China Says It Is "Evaluating" Trade Talks

Futures Jump After China Says It Is "Evaluating" Trade Talks

Update (9:20pm ET): the first reaction from the US side comes in by way of Marco Rubio who speaks in a Fox News interview, and it is very much as expected: he makes it seem that China reached out first, which to Beijing is a non-started as its specific framework is that the US was reaching out in order for Xi not to lose face:

  • RUBIO SAYS CHINA IS REACHING OUT ON ECONOMIC ISSUES
  • RUBIO: CHINESE WANT TO MEET AND TALK

And now it is up to China to respond, although since both sides can't seem to even agree on who will cede ground by reached out first, we expect this latest attempt at detente won't go too far.

* * *

Futures spiked, moving back to session highs and forgetting all about the bitter taste from disappointing results from Amazon and Apple, following news from Bloomberg that China was "assessing the possibility of trade talks with the US" the first sign since Donald Trump hiked tariffs last month that negotiations could begin between the two sides.

China’s Commerce Ministry said in a Friday statement that it had noted senior US officials repeatedly expressing their willingness to talk to Beijing about tariffs, and urged officials in Washington to show “sincerity” towards China.

“The US has recently sent messages to China through relevant parties, hoping to start talks with China,” the ministry added. “China is currently evaluating this.”

Of course, the Chinese spin is one in which the Trump admin reached out first, and which the US pro-China media will promptly use to hammer Trump with, resulting in an even quick denial by the president and thus, China, thereby erasing any hope of an overture, one which won't come until both sides are quite desperate.

For now, however, the reaction to the flashing red headline was stark as &P 500 erased early losses in Asia while a gauge of regional equities also turned positive after the statement. The offshore yuan edged stronger, while the Australian dollar, a China proxy, also extended gains.

The statement signals the stalemate between the world’s two largest economies could shift, after Trump hiked US tariffs to the highest level in a century and Beijing retaliated in kind.

Trump has repeatedly said President Xi Jinping needs to contact him in order to begin tariff talks and earlier this week, Treasury Secretary Scott Bessent said it’s up to Beijing to take the first step to de-escalate the dispute; China has done the same.

Tyler Durden Thu, 05/01/2025 - 21:09

State Department Instructs Employees To Report Anti-Christian Bias

State Department Instructs Employees To Report Anti-Christian Bias

Authored by Zachary Stieber via The Epoch Times,

The State Department recently instructed employees to report workers who exhibited anti-religious bias, including bias against Christians, according to a cable obtained by The Epoch Times.

Secretary of State Marco Rubio in the April 11 cable directed State Department employees to a reporting form and instructed them to provide “information regarding any Department or individual practices involving anti-religious bias during the last presidential administration (2021-2025); and recommendations to the Secretary of State to remedy any anti-religious bias at the Department.”

The cable was obtained by The Epoch Times via a Freedom of Information Act request.

Employees could provide information anonymously, Rubio said.

The submitted information would be collated, he said, to help the department contribute to an interagency report required by President Donald Trump’s February order aimed at halting anti-Christian discrimination.

“It is the policy of the United States, and the purpose of this order, to protect the religious freedoms of Americans and end the anti-Christian weaponization of government,” Trump wrote in the order, which alleged that during the Biden administration, government officials “engaged in an egregious pattern of targeting peaceful Christians, while ignoring violent, anti-Christian offenses,” such as bringing charges against people who demonstrated outside facilities that perform abortions.

Rubio said that while the order focused on anti-Christian bias, targeting anyone for their religious beliefs violates the Constitution, so people can report other instances of anti-religious bias.

The cable listed examples such as being mistreated for requesting religious exemptions from mandatory vaccination or observing religious holidays; being forced to remove displays of religious faith from desks and clothing; and being mistreated for refusing to participate in activities with themes that ran counter to religious beliefs, such as those “related to preferred personal pronouns.”

The State Department declined to say whether any employees have been fired or otherwise disciplined for exhibiting bias against Christians. “As a general practice, we do not comment on internal personnel matters,” a spokesperson told The Epoch Times in an email on April 30.

Last week, Rubio participated in the first meeting of the Task Force to Eradicate Anti-Christian Bias in the federal government, which was created by a Trump executive order.

During that meeting, Rubio raised some of the reported allegations of bias, including claims that Christian Foreign Service officers who homeschooled their children were either reported to the IRS or threatened with a child abuse investigation, according to a Department of Justice readout.

He also disclosed that State Department employees were called “murderers” and “troublemakers” for opposing the government’s COVID-19 vaccine mandate on religious grounds.

“In one instance, an ambassador yelled at an employee, accusing the employee of wanting to kill the ambassador’s mother despite her being back in the States,” the readout stated.

Attorney General Pam Bondi said in an April 22 statement that “Biden’s Department of Justice abused and targeted peaceful Christians while ignoring violent, anti-Christian offenses,” adding, “Thanks to President Trump, we have ended those abuses, and we will continue to work closely with every member of this Task Force to protect every American’s right to speak and worship freely.”

Tyler Durden Thu, 05/01/2025 - 20:30

'Very, Very Wrong': Expert Warns China Showing Signs Of 'End-Of-Regime Conduct'

'Very, Very Wrong': Expert Warns China Showing Signs Of 'End-Of-Regime Conduct'

A China politics expert warns that the communist regime shows signs of potential collapse, driven by a worsening economy exacerbated by Trump’s aggressive tariff policies.

"At a time when China needs friends because it's not selling goods to the U.S., it is going out of its way to antagonize not just the Philippines, not just Taiwan, but also South Korea and Australia," Gordon Chang, senior fellow with the Gatestone Institute, told the Fox Business Network.

"This shows that... this is end-of-regime conduct, because Xi Jinping, he can't appear to be giving in to the U.S.," he added. "This is really very perplexing behavior, and it shows that something is very, very wrong in Beijing right now."

Trump has shown little sign of backing down from his trade war with China, slapping a 145% tariff on Chinese imports. Beijing retaliated with 125% duties on U.S. goods. Trump insists his administration is actively negotiating with Beijing officials, but China’s Foreign Ministry has flatly denied any talks, accusing the U.S. of spreading “baseless rumors.”

The White House argues these tariffs are necessary to protect American workers and counter China’s unfair trade practices, while critics warn of skyrocketing prices, empty shelves, and a looming recession.

The Wall Street Journal reported over the weekend that Chinese authorities have quietly waived some of the 125% retaliatory tariffs on certain U.S. imports, including semiconductors, chipmaking equipment, medical products, and aviation parts. This move signals Beijing's concern about the economic fallout from the ongoing U.S.-China trade war. While China has not publicly confirmed these exemptions.

As we reported earlier:

On Tuesday morning, U.S. Commerce Secretary Howard Lutnick provided clarity on the highly anticipated auto tariff relief, confirming it will apply to all U.S.-built vehicles.

Lutnick said tariffs will apply to those produced by foreign automakers with plants in the US. He added that the relief would be phased in over three years, giving manufacturers time to shift their supply chains back to the U.S.

The Wall Street Journal offered details regarding how relief would resemble:

The decision will mean that automakers paying Trump's automotive tariffs won't also be charged for other duties, such as those on steel and aluminum, according to people familiar with the policy.

The move would be retroactive, the people said, meaning that automakers could be reimbursed for such tariffs already paid. The 25% tariff on finished foreign-made cars went into effect early this month.

The administration will also modify its tariffs on foreign auto parts—slated to be 25% and effective May 3—allowing automakers to be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year. The reimbursement would fall to 2.5% of the car's value in a second year, and then be phased out altogether.

Ford CEO Jim Farley lauded the move, providing the following statement to WSJ: “Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers and consumers. We will continue to work closely with the administration in support of the president's vision for a healthy and growing auto industry in America. Ford sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential.”

Tyler Durden Thu, 05/01/2025 - 20:05

The California Bullet Train Is A Good Lesson In Political Deception

The California Bullet Train Is A Good Lesson In Political Deception

Authored by William Anderson via The Mises Institute,

This week, my wife and I have traveled Amtrak’s route to and from Bakersfield, California, with the Amtrak line running down the state’s Central Valley past cities like Fresno and Modesto. As our train sped down the tracks at speeds of up to 83 mph, we could see construction of the much-hyped boondoggle known simply as the California Bullet Train.

Much has been written about the proposed (and proposed really is an understatement) project, which is supposed to run entirely by electricity created from renewable resources. In 2008, California voters approved a bond issue of $9.9 billion to determine the feasibility of the proposed high-speed railroad that would link San Francisco and Los Angeles with a then-$33 billion price tag. I have weighed in myself on this project and its spiraling costs (the present estimated total cost being $135 billion…and rising), writing:

If one tries to make sense of an exercise in spending billions of dollars for a Train to Nowhere, one cannot use conventional financial logic. There is a logical process at work, but it is a logic of a different sort than what appeals to a typical reader of this page. Political logic, especially in a state like California where progressive politics dominates, veers sharply from economic and business logic.

But what does the Central Valley have to do with linking the two California cities, both of which are on the Pacific coast far away from the likes of Bakersfield and Fresno? 

There already exists a rail link between LA and San Francisco, but it is the slow-moving Amtrak that must make its way through the Coastal Range that runs down the western part of the state. 

(An aspiring rail rider would board a CalTrans train from San Francisco to San Jose, then hop aboard Amtrak’s Coast Starlight there as it passes through once a day).

It seems that the promoters of the Bullet Train also are having to bow to the state’s varied geography, which brings us back to construction in the Central Valley. As we looked out the window in the brand-new Amtrak passenger cars recently manufactured for the San Joaquins route, we saw huge concrete viaducts in various stages of completion between Bakersfield and Merced—and that was all the construction we would be able to see, since there is no construction anywhere else on the proposed route.

Understand that no private firm would build a railroad like this because it could never recoup its original costs. 

The current projected outlay of $135 billion almost surely will grow, as the project continues to miss its goals and run into more difficulties. It will be mathematically impossible for the rail line ever to turn a profit, even if it ever is completed—which is highly doubtful.

This leaves us with the line between Bakersfield and Merced, which is not scheduled for completion before 2030 and probably won’t be available until 2033. To understand the absurdity of the whole thing, one should remember that this original Bakersfield-Merced line is being built first because it has the friendliest geography—the Central Valley being flat—which means the trains can run for miles on straight tracks, avoiding the hairpin turns through the mountains that would be a feature elsewhere in the state.

(I have ridden Amtrak many times in California, including going over the Sierra Nevada and in and around the Coastal Range south of San Jose. High-speed rail could not function in these places).

But, even given the flat terrain, much of the Bakersfield-Merced line will have to run on huge concrete viaducts that are extremely costly and will take years to complete. To put it another way, if the lowest-hanging fruit for a rail line has been extremely costly, think what will be the case if they ever try to carve a path around and through the mountains that surround Los Angeles.

To put it another way, as we looked at the ongoing construction of this rail line, we were not looking at success, but rather a huge governmental failure. One would think this would be obvious to nearly everyone, but when California Governor Gavin Newsom and local politicians dedicated this rail line, the rhetoric was so delusional that it was comical. Here are some snippets:

Members of the community and Gov. Gavin Newsom gathered in Kern County where the initial operating segment is taking place. Leticia Perez, chairwoman of the Kern County board of supervisors, said that this project is important for residents of California’s rural Central Valley, providing a 171-mile system from Merced to Bakersfield.

“What is represented today is a game changer, a transformative moment for the Kern County workforce - our access to UC Merced, our access to other parts of the state,” Perez said.

“As a resident of Fresno County, the high-speed rail built right here in the valley has been a dream come true,” said Structures Superintendent Anthony Canales who has been working on the project since 2015. “This is not just a transportation program; it’s a transformation project.”

However, the Central Valley already has passenger rail courtesy of Amtrak and if what we saw on our trip with near-empty cars is an indication of the Amtrak ridership of that area, one seriously doubts that high-speed rail—while a curiosity—will make a difference for people in that valley. The local political rhetoric notwithstanding, even if this monstrosity is completed, it won’t be a “game changer” but rather a conversation piece at best.

The longevity of this failed project is a testament both to political inertia and to the love affair that progressives have with both central government economic planning and especially the high-speed rail. It is a massive malinvestment that is saddling California with huge debts that its taxpayers—most of whom will gain no benefit from the bullet train—will have to shoulder in the future. Those politicians and politically-connected contractors most responsible for this boondoggle will gain the benefits (and get to ride for free), while the victims will have to pay.

Tyler Durden Thu, 05/01/2025 - 19:40

Hegseth Threatens Iran Over Houthi Support: 'You Will Pay'

Hegseth Threatens Iran Over Houthi Support: 'You Will Pay'

The start of this week began badly for the Pentagon, as it revealed it had 'lost' a fighter jet in the Red Sea amid the ongoing Yemen bombing campaign. A US Navy F/A-18 Super Hornet fighter jet "fell overboard from the USS Harry S. Truman aircraft carrier while it was being towed on board" - the US military said, and supposedly while the large carrier was making an evasive turn amid inbound Houthi drones or missiles.

The Houthis have been celebrating this as a 'win'. But Defense Secretary Pete Hegseth has on Thursday put Iran on notice, alleging close support from Tehran to the Houthis, saying it 'will pay'.

Via Associated Press

Hegseth addressed the Iranians in a fresh message on X, saying: "We see your lethal support to the Houthis. We know exactly what you are doing."

"You know very well what the US military is capable of — and you were warned. You will pay the consequence at the time and place of our choosing," he continued.

Hegseth as part of the message shared a screenshot of a prior Trump post on his Truth Social, originally written in mid-March, in which the president charged that Iran is "dictating every move" the Houthis make as well as providing arms and intelligence. 

"Every shot fired by the Houthis will be looked upon, from this point forward, as being a shot fired from the weapons and leadership of Iran," the president wrote at the time.

But the Islamic Republic has firmly rejected the accusations, highlighting that the Houthis are a political and military movement which acts independently and makes its own decisions, especially on the battlefield.

"Ansar Allah (the Houthis), as the representative of the Yemenis, makes its own strategic decisions, and Iran has no role in setting the national or operational policies of any movement in the resistance front," Iran’s Revolutionary Guard Corps (IRGC) Commander Hossein Salami said soon after the US renewed its bombing campaign on March 15.

The Houthis have pledged not to stop attacks on Western warships in the Red Sea as well as Israel, so long as Israel's military remains active in Gaza. The Red Sea conflict started again almost immediately after the Hamas-Israel ceasefire and hostage exchange deal collapsed.

International shipping through the vital water-way has been essentially blocked for well over a year, and the industry has been forced to adjust. Russian and Chinese commercial vessels have been allowed safe-passage by the Houthis.

Hegseth's fresh threat toward Iran strongly suggests the Iran debate is still alive and well within the administration. Trump has been urging Iran to sign a fresh nuclear deal or else face possible bombing campaign by the US, and likely Israel. Hegseth has previously been reported to be on DNI Tulsi Gabbard's side - against the hawks and desiring climb-down in terms of Iran tensions. 

Tyler Durden Thu, 05/01/2025 - 19:15

Tether Plans US Stablecoin Launch As Soon As This Year; Report

Tether Plans US Stablecoin Launch As Soon As This Year; Report

Authored by Alex O'Donnell via CoinTelegraph.com,

Tether plans to launch a stablecoin product in the United States as soon as this year, the stablecoin issuer’s CEO, Paul Ardoino, said in an April 30 CNBC interview.

Tether’s flagship stablecoin, USDt, is already the US dollar’s top “exporter,” Ardoino told CNBC. 

It has a market capitalization of nearly $150 billion, according to data from CoinGecko. 

Now, Tether is preparing to expand into the US market “by the end of this year or early next year, at the fastest,” Ardoino said, adding that the timing depends on US lawmakers’ progress on stablecoin legislation.

The stablecoin issuer is working to woo US regulators by proactively collaborating with law enforcement and highlighting USDt’s benefits for the US economy.

"We are just exporters of what we believe to be the best product the United States ever created — that is, the US dollar,” the CEO said.

Tether's USDT has 66% of the stablecoin market share. Source: Nansen

Market leader

As of April 25, USDt commanded a roughly 66% market share among stablecoins, according to Nansen, a Web3 researcher. 

Tether is also the most profitable stablecoin issuer, logging a net income of nearly $14 billion in 2024. 

It earns revenue by accepting US dollars to mint USDt and then investing those dollars into highly liquid, yield-bearing instruments such as US Treasury bills. Still, USDt’s popularity is largely limited to users outside of the United States, where rival stablecoin USDC is dominant.

Tether designed USDt “for the people that live in small villages in Africa... [or] a shop owner in Istanbul,” Ardoino told CNBC, adding that Tether is developing a “different product” for the US.

Adoption of USDC has accelerated in the wake of US President Donald Trump’s November election win, Nansen said in an April 25 report. Circle’s USDC has a market capitalization of more than $60 billion, CoinGecko data shows. 

However, USDt is still likely to maintain its leading position in the stablecoin market.  “Despite the potential dispersion in stables, we inevitably believe this is a ‘winner-takes-most’ market dynamic,” the Web3 researcher added. 

Tyler Durden Thu, 05/01/2025 - 18:50

US House Passes Resolution To Stop California From Banning Gas-Powered Cars

US House Passes Resolution To Stop California From Banning Gas-Powered Cars

The U.S. House of Representatives passed (245-164) Rep. John Joyce's (R-PA) H.J. Res.88, a resolution blocking the Biden Environmental Protection Agency's waiver that would let California ban petrol-powered cars and trucks and force dystopian electric vehicle mandates nationwide. 

H.J. Res. 88 seeks to overturn a Biden-era EPA decision that granted California a waiver to ban the sale of new petrol-powered vehicles by 2035. This mandate would've had massive ripples far beyond the progressive state's borders, forcing automakers to comply nationwide with EV mandates, thus leading to a surge in driving costs for all working families. Without intervention, California's toxic climate policy could effectively dictate EV mandates nationwide. 

"Today, the House passed RepJohnJoyce's H.J.Res.88 to reverse a Biden-era regulation that requires all of the vehicles in America to be emission-free," House Republicans wrote on X, adding this repeal would be some of the first steps in "reversing Biden's disastrous EV mandates and giving power back to consumers to decide which cars they want to drive." 

As of May, eleven U.S. states have adopted California's plan to phase out the sale of gasoline and diesel-powered vehicles. These states include New York, Massachusetts, Oregon, Washington, Vermont, New Jersey, Maryland, Delaware, New Mexico, Colorado, and Virginia. Together, these states account for about 40% of the U.S. auto market.

"Proud to see my bill to protect consumer choice in the automobile market pass the House in a bipartisan fashion," Rep. Joyce wrote on X.

The Republican representative from Pennsylvania noted, "Congress cannot allow California to set national policy. I urge my Senate colleagues to pass this legislation so @POTUS can protect the freedom of the open road for the American people."

Dismantling California's EV mandates is a top priority for President Trump. This week, the Western world was served a sobering reminder of the consequences tied to the aggressive march toward net zero death: 

Action on the measure now moves to the Senate.

Tyler Durden Thu, 05/01/2025 - 18:25

What We Know About The Illegal Immigrant Allegedly Helped By A Wisconsin Judge To Evade ICE

What We Know About The Illegal Immigrant Allegedly Helped By A Wisconsin Judge To Evade ICE

Authored by Janice Hisle and Savannah Hulsey Pointer via The Epoch Times,

The man arrested by immigration authorities in Milwaukee - despite a Wisconsin judge’s alleged attempt to shield him - is being held in a neighboring county’s jail as controversy continues to swirl around the case.

Eduardo Flores Ruiz, 30, was locked up in the Ozaukee County Jail awaiting further court action as of April 30.

He is accused of injuring three people in a recent domestic dispute, online records show.

The Mexico native is the defendant whom Judge Hannah Dugan is accused of assisting in an April 18 incident at the Milwaukee County Circuit Court.

Flores Ruiz appeared at the court for a hearing on that date, but it didn’t proceed, federal authorities say, after Dugan allegedly took actions to thwart Immigration and Customs Enforcement (ICE) officers who were poised to arrest the defendant and begin deportation proceedings.

Federal officials accuse the judge of helping Flores Ruiz and his lawyer to exit through a restricted-use door. Officers, however, were able to arrest him after a foot chase outside the courthouse.

He was previously deported to his home country in 2013, before being accused in the domestic violence case that was assigned to Dugan, officials said.

The state Supreme Court suspended Dugan while she contests charges of concealing Flores Ruiz and obstructing ICE.

Dugan, who was arrested on April 25, is set for her next court hearing as a defendant on May 15 in Milwaukee federal court.

This 2016 photo shows Judge Hannah Dugan in Milwaukee, Wis. Lee Matz/Milwaukee Independent via AP

Milwaukee County court and police records reveal more information about the incident that landed Flores Ruiz in Dugan’s court on three domestic abuse-battery charges.

Three people told police that Flores Ruiz injured them during a March 12 verbal and physical altercation, after which two of them sought hospital treatment.

Miguel Mendoza-Figueroa alleged that Flores Ruiz “intentionally ... struck him multiple times in his body and face, causing pain and scratches during a verbal argument about loud music,” the police report says. 

The man reported being punched about 30 times.

When Deyci Torres Sierra, identified as Miguel’s girlfriend, tried to intervene, Flores Ruiz “struck her multiple times in her head” with his fist, inflicting pain, the report says.

A second woman, Maria Sierra Chihuahua, said she, too, tried to break up the fight, and Flores Ruiz “elbowed her in her upper left arm.”

Police said that, when questioned at the scene, Flores Ruiz described the incident as “a mutual fight” between himself and Mendoza-Figueroa, a court record shows.

The defendant is set to appear on the three charges in the county court again on May 14. Each of the charges is a Class A Misdemeanor, punishable upon conviction by a fine of up to $10,000 and nine months behind bars.

Dugan remains in online records as the judge assigned to his case, despite her temporary suspension from duty. The Epoch Times was unable to reach the court’s chief justice for clarification.

The Epoch Times sought comment from Flores Ruiz’s lawyer, Mercedes de la Rosa, and the local prosecutor handling the case, Kylan Reilly, and received no reply prior to publication.

Tyler Durden Thu, 05/01/2025 - 18:00

Apple Slides On China Sales Slump And Soft Service Revenue, Despite Tariff Frontrunning Revenue Boost And New $100BN Buyback

Apple Slides On China Sales Slump And Soft Service Revenue, Despite Tariff Frontrunning Revenue Boost And New $100BN Buyback

Ahead of Apple's earnings report this afternoon, which concludes the results from big 4 group of the Mag 7 (including MSFT, META and AMZN) UBS said that sentiment was a 5/10, with the bank's analyst expecting some pull-forward offsetting soft demand, while creating tougher 2H compares with the consensus too optimistic. UBS, which has a $210 price target, reiterated its $210 price target (Neutral) warnings that although the rich valuation remains a perennial overhang, sentiment is more cautious given the ongoing tariff and market share headwinds. The bottom line: with the mild short bias ahead of the print, there was a decent chance for a tactical bounce due to pull-ins, but probably not enough to alleviate the ongoing concerns.

And sure enough, 30 minutes after AMZN disappointed with lackluster AWS profit margins and a soft operating profit forecast, it would be 2 for 2 for the bears, with AAPL stock sliding on disappointing China sales even as tariff fears sent iPhone purchases across the world into overdrive. Here are the details:

  • Adjusted EPS $1.65 vs. $1.53 y/y, beating estimate $1.62
  • Total revenue $95.36 billion, +5.1% y/y, beating estimate $94.59 billion
  • Products revenue $68.71 billion, +2.7% y/y, beating estimate $67.84 billion
    • IPhone revenue $46.84 billion, +1.9% y/y, beating estimate $45.94 billion
    • Mac revenue $7.95 billion, +6.7% y/y, beating estimate $7.75 billion
    • IPad revenue $6.40 billion, +15% y/y, beating estimate $6.12 billion
    • Wearables, home and accessories $7.52 billion, -4.9% y/y, missing estimate $8.05 billion
  • Service revenue $26.65 billion, +12% y/y, missing estimates if $26.72 billion - this was the first red flag.

The second, and even bigger, red flag was the usual suspect: China, where revenues unexpectedly slumped, sliding 2.3%, while Wall Street was expecting a mid-single digit growth

  • Greater China rev. $16.00 billion, -2.3% y/y, missing estimates of $16.83 billion

Going down the line:

  • Total operating expenses $15.28 billion, +6.3% y/y, higher than estimate $15.17 billion
  • Gross margin $44.87 billion, +6.1% y/y, higher than estimate $44.58 billion
  • Cash and cash equivalents $28.16 billion, -14% y/y, missing estimates of $32.73 billion
  • Cost of sales $50.49 billion, +4.1% y/y, higher than estimate $50.23 billion

And so on:

Looking at a breakdown of sales by product category it was a generally solid report, although that was to be expected as a result of pulled forward demand for iPhones ahead of tariffs which would likely push prices sharply higher. Here are the details: .

  • IPhone revenue $46.84 billion, +1.9% y/y, beating estimates $45.94 billion but much of this was due to pulled forward sales ahead of tariffs
  • Mac revenue $7.95 billion, +6.7% y/y, beating estimates of $7.75 billion, same logic here
  • IPad revenue $6.40 billion, +15% y/y, beating estimates of $6.12 billion
  • Wearables, home and accessories $7.52 billion, -4.9% y/y, big miss to estimate $8.05 billion

Bottom line, while most segments came in stronger than expected, much of this will likely reverse in Q3 when tariffs push prices higher (because tariffs are inflationary right), meanwhile, Apple’s wearables segment (where one can find the Vision Pro disaster) remains a big disappointment, and the new low-end AirPods and hearing features for the AirPods Pro apparently did not draw much interest.

Here is the full revenue breakdown by product:

But if iPhone sales was solid (if transitory) the devastation that is China sales was catastrophic: contrary to expectations for a modest rebound, as China sales declined for a seventh consecutive quarter, down 2.3%, and printing at only $16BN, below the $16.9BN estimate.The rest of the world saw growth, modest in the Americas at 8.2%, and stronger in Japan and APAC, while Europe barely grew.

And in dollar terms:

Needless to say, China continues to be a very weak spot for Apple and the company hasn’t done much to push new products, pricing and initiatives in that market -- or other emerging areas -- to offset the issues.  The weakness there, which Apple will try to explain away in its conference call, is because of a combination of nationalism and interest in local products, whose designs are getting better. The local players are also trying new things like foldables while Apple continues to use the same design it rolled out five years ago. Oh, and Trump's trade war which is getting worse by the day, isn't helping.

The result: revenues declining now for an unprecedented 7 quarters!

There was more: Service revenue, which for many years was the only golden goose left in AAPL's roster, is starting to sputter, and even though it rose to a new record $26.65 billion, this missed estimates of $26.72 billion and the growth rate was the lowest in two years.

The company has been contending with multiple challenges, beyond just the looming tariffs. Apple is playing catch-up in artificial intelligence, forcing it to shuffle management in recent weeks. It’s also under mounting regulatory pressure in the EU and its home country. On Wednesday, a federal judge demanded that the company open up its App Store to third-party payment options and stop charging commissions on outside purchases.

But tariffs remain one of the biggest question marks. Though Apple is likely to sidestep the 145% China levy that the administration originally proposed, new tariffs on electronics are still coming. The turmoil threatens to upend the company’s supply chain and potentially force it to raise prices. Already, Apple is looking to make more of its US-bound iPhones in India rather than China. Ironically, it was tariffs that helped the company revenues beat estimates as customers flooded Apple retail stores to buy new iPhones and other products out of fear that price hikes were coming.

In the press release, CEO Tim Cook tried hard to stay positive, but failed.

“Today Apple is reporting strong quarterly results, including double-digit growth in Services,” said Tim Cook, Apple’s CEO. “We were happy to welcome iPhone 16e to our lineup, and to introduce powerful new Macs and iPads that take advantage of the extraordinary capabilities of Apple silicon. And we were proud to announce that we’ve cut our carbon emissions by 60 percent over the past decade.”

The bigger problem is what he said on the conference call, where it said that he hadn't seen excess pull forward demand in Q1 (it did)...

  • COOK: DIDN'T SEE EXTRA DEMAND IN MARCH QUARTER ON TARIFFS

...  and pretended not to know what the tariff impact will be:

  • COOK: NOT SURE WHAT TARIFF IMPACT WILL BE AFTER JUNE QUARTER

Trump's tariff policy may be unclear to Cook, but what is clear to everyone, is that growth for AAPL is slowing fast:

  • *APPLE CFO: Q3 REVENUE TO GROW LOW TO MID-SINGLE DIGITS YOY

Which was the same guidance as the current quarter, and the market is starting to realize Cook isn't sandbagging... instead the debate what is the right multiple on a company that has now officially flatlined. To be sure the kneejerk reaction was not happy, with AAPL stocks sliding about 3% after hours, the second consecutive quarter in which the market punished AAPL earnings, to just above $206 after closing today at the highest price since Trump's Liberation Day.

Not even the news that the iPhone maker authorized a new $100 billion stock buyback and boosted its quarterly dividend 4% to 26 cents a share, was enough to prop up the stock.

Tyler Durden Thu, 05/01/2025 - 17:42

Walmart Increases Support For USA-Made Products

Walmart Increases Support For USA-Made Products

At a time when American consumers are increasingly interested in what products are actually "Made in the USA"—as evidenced by a recent report showing a surge in related internet searches—the nation's largest retailer announced plans this week to boost its support for American-made goods through new initiatives.

Walmart has launched a new initiative called "Grow with US," offering tools and support to small businesses, especially those producing American-made goods. The program is designed to strengthen the U.S. economy, which is largely driven by small businesses. 

"We're unveiling Grow with US, a new program designed to provide U.S. small businesses with the training, mentorship and resources they need to grow with Walmart," Walmart's U.S. CEO and president, John Furner, wrote in a press release.

The CEO pointed out that over 60% of Walmart's U.S. suppliers are small businesses. With the ongoing trade war with China, domestic sourcing for the mega-retailer might increase. Currently, the Trump administration has 145% tariffs on all Chinese goods entering the U.S. 

"More than 40 years ago, Mr. Sam set a priority that still drives us today: supporting American-made products and the small businesses behind them. Simply put, we want small businesses to work with Walmart, but we know getting started can feel complex," the CEO said. 

At the start of March, Furner announced a new commitment: "First, we're announcing a new commitment: over the next ten years, Walmart will spend an additional $350 billion on items made, grown or assembled in the U.S. We estimate that this spend will support more than 750,000 new American jobs." 

Walmart's expanded commitment to America's thousands of small businesses offering domestically produced goods is fantastic news as the Trump administration works to restore the nation's manufacturing base via a trade war with China to re-shore critical supply chains that will be needed before the 2030s kick-off

In line with Walmart's commitment to "Made in the USA," we're proud to launch a new partnership this Friday with the Beef Initiative. The goal is to connect consumers with mom-and-pop ranchers producing clean, locally sourced beef that aligns with the "Make America Healthy Again" protocols. This grassroots effort aims to help rebuild America's mom-and-pop ranchers and farmers one beef cut at a time: Shop Clean Beef.

Let's remember that none of this would have been possible without President Trump's relentless push to reshore supply chains and rebuild America's hallowed manufacturing core. There will be plenty of opportunities ahead—right here at home.

Tyler Durden Thu, 05/01/2025 - 17:20

Syria Unravels Further As Jolani's Army Attacks Another Religious Minority

Syria Unravels Further As Jolani's Army Attacks Another Religious Minority

Authored by Jason Ditz via AntiWar.com,

Sectarian fighting in the Damascus suburb of Jaramana left dozens killed, and Israel is already looking to parlay that into a new excuse for military action against the Syrian government, with the idea that they need to "protect" the Druze minority militarily.

The Israeli military reported attacking the Damascus suburb of Sahnaya, and that they targeted an “extremist group” that was planning new attacks on the Druze. Prime Minister Netanyahu and Defense Minister Katz issued statements demanding the Syrian government take action to prevent further attacks on the Druze.

Via AFP

Details of the strike are still scant. Indeed, Syria’s Interior Ministry said they had yet to receive word that the Israeli attack even took place at all. Since Israel launches a large number of attacks inside Syria regularly, it’s not necessarily improbable that they launched one on Sahnaya, but it appears not to have been particularly large.

Israeli Army chief Eyal Zamir has threatened to carry out attacks across Syria if the attacks on the Druze don’t stop, and said that he has ordered his staff to prepare for targets in Syria to that end.

Though the HTS has already promised investigations into what happened Tuesday in the Druze community in Jaramana, it’s not clear Israeli threats will mean much at any rate, since Israel is already actively attacking Syria at any rate, and this is just the latest pretext for continuing that.

Also, using the Druze as an excuse isn’t even new, it’s more being revived. In early March, a smaller clash in Jaramana led to Israel similarly vowing to protect the Druze, imposing a ban on all Syrian military assets south of Damascus, and offering to give Syrian Druze in the newly occupied parts of Syria "work permits" to go into Israel to work, an offer that was later rescinded.

Israeli Druze are going along with this, carrying out a demonstration near Acre which Israeli police declared "illegal". Druze make up about 2% of Israel’s population, and about 3%-4% of Syria’s population, centered mainly on the Suwayda Governorate.

Tuesday into Wednesday gunbattles were fueled by an audio clip which went viral online. The audio was of someone insulting the Muslim Prophet Muhammed, and was purported to be a Syrian Druze person speaking. It has not been verified that was actually the origin.

Indeed, many people are speculating this was an effort at "incitement" against the Druze minority in Syria, and it certainly seems to have worked, at least for a time.

Syria’s Islamist government has promised to investigate this possibility, and some are suggesting it may be an external effort to fuel unrest within Syria.

Tyler Durden Thu, 05/01/2025 - 17:00

Amazon Tumbles On Soft AWS Revenue, Disappointing Profit Forecast

Amazon Tumbles On Soft AWS Revenue, Disappointing Profit Forecast

Ahead of Amazon's earnings, and following two blowout results from the first two giga-cap companies MSFT and META, UBS said that the "fast money seems to be short Amazon into the quarter on AWS and North America sales growth, with no upward revisions on the print." Meanwhile, the longer duration money "continues to like the story around AWS reacceleration, potential EBIT upside to Street, compelling valuation and potential AI theme around core ecommerce." In short, there was a tension between the short-term traders and long-term HODLers.

Judging by the kneejerk reaction to Q1 earnings just released, the short-termers were right, with the stock dumping after reporting mixed Q1 earnings but it was the guidance that was really disappointing. 

Here are the details:

  • EPS $1.59 vs. $1.86 q/q, beating estimate $1.36

  • Net sales $155.67 billion, +8.6% y/y, beating estimates of $155.16 billion

    • Online stores net sales $57.41 billion, +5% y/y, beating estimates of $56.85 billion

    • Physical Stores net sales $5.53 billion, +6.4% y/y, beating estimates of $5.41 billion

    • Third-Party Seller Services net sales $36.51 billion, +5.5% y/y, missing estimates of  $36.98 billion

      • Subscription Services net sales $11.72 billion, +9.3% y/y, beating estimates of $11.65 billion

    • North America net sales $92.89 billion, +7.6% y/y, beating estimate $92.63 billion

    • International net sales $33.51 billion, +4.9% y/y, beating estimate $33.07 billion

    • Third-party seller services net sales excluding F/X +7% vs. +16% y/y, beating estimate +6.92%

      • Subscription services net sales excluding F/X +11% vs. +11% y/y, beating estimate +8.86%

So far so good (with some exceptions).

But what first caught the market's attention first was Amazon's AWS revenue, which came in just below estimates:

  • Amazon Web Service net sales $29.27 billion, +17% y/y, missing estimates $29.36 billion

  • Amazon Web Services net sales excluding F/X +17% vs. +17% y/y, also missing estimates +17.2%

Turning to operating profits, here the results were uniformly solid:

  • AWS operating profit 39.45%, up sequentially from 36.83% and smashing estimates of 35.25%

  • Operating income $18.41 billion, +20% y/y, beating estimate $17.51 billion

    • Operating margin 11.8% vs. 10.7% y/y, beating estimate 11.2%

    • North America operating margin +6.3% vs. +5.8% y/y, missing estimate +6.65%

    • International operating margin 3% vs. 2.8% y/y, beating estimate 2.96%

As for fulfillment expenses, these came in slightly above estimates, while the seller unit mix was slightly worse than expected. These will likely rise quite a bit in a tariff regime:

  • Fulfillment expense $24.59 billion, +10% y/y, higher than estimate $23.78 billion

  • Seller unit mix 61% vs. 61% y/y, worse than estimate 61.8%

Of the above, the most notable highlight - as per our preview - was AWS which grew revenue by 17% to $29.27BN, just below the sellside estimate of $29.36BN, and the first notable slowdown in the topline in two years.

Still, if revenue growth for AWS was a bit light, the record 39.5% margin more than offset it, beating estimates of 35.35%. Elsewhere, North American profit rose to $5.84 billion, resulting in a profit of 6.29%, if below the estimate of 6.65%. Meanwhile, international margins rose to 3.30% from 3.03%.

As a result of the jump in AWS profits, Amazon's consolidated operating margin continued to grow impressively and in Q1 grew for a 4th consecutive quarter to a new all time high of 11.8%.

However, while the above data was mixed if generally solid, it was the company's guidance that led to an after hours drop in the stock; that's because the company projected profit and revenue in the current quarter both of which were seen as coming in soft vs Wall Street expectations:

  • Sees net sales $159.0 billion to $164.0 billion, in line with the estimate of $161.4 billion

  • Sees operating income $13.0 billion to $17.50 billion, below the estimate $17.82 billion, vs $14.7 billion in Q2 2024.

  • Guidance sees impact of about 10 basis points from FX

If accurate, that would mean that after revenue grew at the slowest pace since 2022 in Q1, the outlook sees revenue growth post a modest improvement, rising just over 9% in Q2.

But again, it was the subpar operating income forecast that was the big disappointment.

In response to the soft guidance and the disappointing AWS revenue growth, the stock initially pumped but then dumped...

Tyler Durden Thu, 05/01/2025 - 16:39

The Trump Counterrevolution & The Moral Ledger

The Trump Counterrevolution & The Moral Ledger

Authored by Victor Davis Hanson via American Greatness,

Despite the media hysteria, Trump’s counterrevolution remains on course.

Its ultimate fate will probably rest with the state of the economy by the November 2026 midterm elections. 

But its success also hinges on accomplishing what is right and long overdue—and then making such reforms quietly, compassionately, and methodically.

No country can long endure without sovereignty and security—or with 10 to 12 million illegal immigrants crossing the border and half a million criminal foreign nationals roaming freely.

The prior administration found that it was easy to destroy the border and welcome the influx. But it is far harder for its successor to restore security, find those who broke the law, and insist on legal-only immigration. Trump is on the right side of all these issues and making substantial progress.

Everyone knew that a $2 trillion budget deficit, a $37 trillion national debt, and a $1.2 trillion trade deficit in goods were ultimately unsustainable.

Yet all prior politicians of the 21st century winced at the mere thought of reducing debts and deficits, given that it proved much easier just to print and spread around federal money. As long as the Trump administration dutifully cuts the budget, sends its regrets to displaced federal employees, seeks to expand private sector reemployment, and quietly presses ahead, it retains the moral high ground.

The elite universities have long hidden things from the American people that otherwise would have lost them all public support.

They deliberately sought to neuter Supreme Court rulings banning race-based preferences by stealthily continuing their often-segregated policies on campuses, from admissions and hiring to dorms and graduations.

They have taken billions of dollars from autocracies, such as communist China and Qatar. And they have partnered abroad with their foreign illiberal institutions and then disguised their quid pro quo subservience.

These supposedly prestigious universities have previously made no real effort either to stop or even hide their own campus epidemics of anti-Semitism.

They have spiked their tuition and costs higher than the annual rate of inflation, assured that the tottering $1.7 trillion guaranteed student loan portfolio would always send them guaranteed cash flows.

They have gouged taxpayers by charging exorbitant surcharges on federal grants from 40 to 60 percent. And they make no effort to offer students intellectual, ideological, or political diversity.

So, even our most prestigious universities seem to have no real moral compass. Accordingly, as long as Trump retains the high ground, the public, too, will demand either reform in higher education or a cessation of federal support to it.

The economy remains strong, but its ultimate health depends on reaching a trade deal with a handful of nations that account for our $1.2 trillion trade deficit in goods: China, the EU, Canada, Mexico, the Southeast Asian trade bloc, and Taiwan, Japan, and South Korea.

These nations all know that their tariffs are not symmetrical. But our trade partners will not willingly change. They apparently, but wrongly, believe that the U.S. either welcomes its trade deficits, naively thinks they’re irrelevant, or is too wedded to libertarian trade ideology to demand accountability.

So, too, on trade, the Trump administration is in the right.

Its only challenge is to avoid envisioning tariffs as a new, get-rich source of massive revenue. Data does not support the idea of such large tariff incomes.

The American people signed on for symmetry, fairness, and reciprocity in trade, not tariffing those who run deficits with us or seeing high tariffs as a cash cow to fund our out-of-control government.

Enraged Democrats still offer no substantial alternatives to the Trump agenda.

There are no shadow-government Democratic leaders with new policy initiatives. They flee from the Biden record on the border, the prior massive deficits and inflation, the disaster in Afghanistan, two theater-wide wars that broke out on Biden’s watch, and the shameless conspiracy to hide the prior president’s increasing dementia.

Instead, the Left has descended into thinly veiled threats of organized disruption in the streets. It embraces potty-mouth public profanity, profane and unhinged videos, nihilistic filibusters, congressional outbursts, and increasingly dangerous threats to the persons of Elon Musk and Donald Trump.

All that frenzy is not a sign that the Trump counterrevolution is failing. It is good evidence that it is advancing forward, and its ethically bankrupt opposition has no idea how, or whether even, to stop it.

Tyler Durden Thu, 05/01/2025 - 16:15

Watch: Illegal Alien Smugglers' Boat Rammed By CBP Off California Coast

Watch: Illegal Alien Smugglers' Boat Rammed By CBP Off California Coast

Authored by Steve Watson via Modernity.news,

Dramatic footage shows agents with US Customs and Border Protection Air and Marine Operations halting an attempt by human traffickers to smuggle a boat full of illegals into the country earlier this week.

The video posted to X shows the moment the agents rammed into the boat in an incident off the coast of California.

Border Patrol Chief Michael Banks stated that the CBP was alerted by the Mexican Navy that the vessel had refused to stop for them and the U.S. Coast Guard in a previous encounter.

Banks noted that AMO agents attempted to stop the boat near the San Diego coastline, but the driver refused to heave, forcing the escalated action.

The agents rammed the boat and disabled it, allowing them to detain two alleged human smugglers.

“Even in the open ocean, the border has a line- and we will defend it,” Banks urged.

Last week, Banks revealed that another vessel was intercepted carrying 19 illegal aliens, three of whom are thought to be traffickers.

Such incursions are increasing in frequency now the land borders have been completely locked down by the Trump administration.

*  *  *

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

Tyler Durden Thu, 05/01/2025 - 15:45

Amazon Announces $4 Billion Rural Delivery Network, Estimates 100,000 New Jobs

Amazon Announces $4 Billion Rural Delivery Network, Estimates 100,000 New Jobs

Authored by Naveen Athrappully via The Epoch Times,

Amazon will invest $4 billion by 2026 to expand its network in rural America for delivering packages faster in densely populated areas, the company said in an April 30 statement.

“This investment will also grow our rural delivery network’s footprint to over 200 delivery stations, and we estimate it will create over 100,000 new jobs and driving opportunities through a wide range of full-time, part-time, and flexible positions in our buildings and on the roads,” the company said.

“Once this expansion is complete, our network will be able to deliver over a billion more packages each year to customers living in over 13,000 zip codes spanning 1,200,000 square miles—an area the size of Alaska, California, and Texas combined.”

The effort focuses on small towns in the United States. Amazon plans on expanding at a time when many logistics providers “have backed away from investing in rural customers and communities.”

Amazon estimates that by the end of next year, its rural delivery network will triple in size, with average delivery times being cut in half.

For each new facility opened as part of expansion, an estimated 170 new jobs on average shall be created at the delivery station level, Amazon said, adding that other job opportunities would be extra, such as those created via the Delivery Service Partner (DSP) and Amazon Flex programs.

DSP is a program in which small businesses set up delivery services to transport Amazon goods. Flex is aimed at individuals who want to make some extra money delivering Amazon packages using their own vehicles.

The flex program has been caught up in legal conflicts involving driver contracts.

In June last year, lawyers representing thousands of Amazon Flex drivers announced they filed legal claims alleging the company wrongly classified the drivers as independent contractors rather than employees, which led to them being deprived of various financial benefits and worker protections.

“As Amazon exerts considerable control over the Flex drivers in their deliveries and the deliveries are part of Amazon’s usual business, the drivers qualify as Amazon employees, not independent contractors, and should be paid accordingly,” Joseph Sellers, partner at Cohen Milstein Sellers & Toll PLLC and attorney for the drivers, said at the time.

In an emailed statement to The Epoch Times, an Amazon spokesperson said the Flex program enables individuals to make “competitive pay” while setting their own schedules and being their own boss.

“We hear from most of the Amazon Flex delivery partners that they love the flexibility of the program, and we’re proud of the work they do on behalf of customers every day,” the spokesperson said.

In its April 30 statement, Amazon said it is the leading job creator in the United States, having created more than 500,000 jobs over the past five years.

The company cited a study by Amazon economists, the University of Pennsylvania, and The Wharton School, which found that “when Amazon opens a facility, median household incomes in the county increase by $1,225 per year and poverty rates fall by as much as 3.3 percent on average,” the statement said.

UPS Delivery Cut, Tariff Rumor

Amazon’s decision to expand rural delivery comes as the United Parcel Service (UPS) recently said it was aiming to cut half of its Amazon business by the second half of the year.

During a Jan. 30 earnings call, UPS CEO Carol Tome said the company was concerned about the volume and revenue concentration that was tied up with its Amazon delivery operations.

“Our contract with Amazon came up this year, and so we said it’s time to step back for a moment and reassess our relationship because if we take no action, it will likely result in diminishing returns,” she said.

In an April 29 conference call with Wall Street analysts, Tome said she was pleased with the ongoing efforts to reduce the company’s reliance on Amazon’s business.

“This volume is not a healthy fit for our network. The Amazon volume we plan to keep is profitable and is a healthy volume,” she said, adding that Amazon currently makes up 11.7 percent of UPS revenue.

Meanwhile, Amazon recently responded to a report that it was planning to display the cost of U.S. tariffs next to the price of products on its website.

The report had triggered comments from the White House, with press secretary Karoline Leavitt saying on April 29 that such a move would amount to a “hostile and political act.”

“Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?” she said.

Amazon denied that it would be carrying out the plan, saying it never considered displaying tariff information on its website.

“The team that runs our ultra-low cost Amazon Haul store considered the idea of listing import charges on certain products. This was never approved and is not going to happen,” Amazon spokesperson Tim Doyle said in an emailed statement to The Epoch Times.

Tyler Durden Thu, 05/01/2025 - 15:05

The Potential Winners And Losers In Reshoring Supply Chains

The Potential Winners And Losers In Reshoring Supply Chains

Authored by Charles Hugh Smith via OfTwoMinds blog,

Until values, priorities and incentives change, "the lifestyle you ordered is currently out of stock and on back order, with no estimate of a future delivery date."

The ultimate winners and losers in reshoring supply chains to North America have yet to be determined, and may change depending on the time frame. In the short-term, there are ample reasons to reckon consumers will be the losers as shortages and price-gouging ("it's the tariffs" will be the excuse given for profiteering) take their toll.

Matt Stoller has posted two comprehensive essays on these topics:

How Monopolies Could Exploit the Tariff Shock

How to Prepare for the Coming Supply Chain Shock

In the longer term, however, consumers could be winners as reshored supply chains will be more stable and predictable than globalized supply chains. Stability has a value that isn't recognized until it's absent--as do durability and quality.

One set of potential winners might be large retail corporations that choose to switch from "horizontal" global supply chains to vertically integrated domestic production, in which raw materials are turned into finished products in one production facility.

Ford Motor Company was an early adopter of this model, constructing the immense Ford River Rouge complex from 1917 to 1928 that turned iron ore into finished automobiles in one integrated production process.

"With its own docks in the dredged Rouge River, 100 miles (160 km) of interior railroad track, its own electricity plant, and integrated steel mill, the titanic Rouge was able to turn raw materials into running vehicles within this single complex, a prime example of vertical-integration production."

While it can be argued that vertical integration is less efficient in terms of cost, once again the value of complete control, stability and predictability is not included in spreadsheets, though it becomes readily apparent when long single-source global supply chains break down or are crippled by bottlenecks, artificial scarcities triggered by geopolitical blackmail or a host of other causal factors.

Establishing domestic sources for materials, tooling, robotics, etc. would remove many of the uncertainties that are inherent in a global supply chain breaking down along geopolitical, regional and national lines.

Were unions to regain wide public support, industrial unions might be winners should the public support unionizing new production facilities. The sustained erosion of labor's share of the nation's income over the past five decades might finally gain recognition as a core driver of wealth-income inequality and unionized labor might be understood as a necessary rebalancing of an economy that has favored finance and capital over labor for nearly three generations.

Were the public to begin valuing local production and jobs over "lower prices" and equally low quality, local supply chains might become winners. Note that I've mentioned the public's values and priorities as key drivers changing economic incentives and policies. In the current zeitgeist, the public is assumed to be "rational economic robots" who respond solely to price.

Once the full banquet of consequences of rampant hyper-financialization and hyper-globalization has played out, the public might begin to grasp the importance of valuing something other than low prices (and the low quality that comes with low prices). As a general rule, the public leads the private sector and government, not the other way round.

For example, the public might start valuing national security, which is ultimately dependent on stable, predictable domestic production supply chains owned and controlled by domestic companies.

Until values, priorities and incentives change, the lifestyle you ordered is currently out of stock and on back order, with no estimate of a future delivery date.

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Tyler Durden Thu, 05/01/2025 - 13:05

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