"They Must Be Eating Xanax Like Tic-Tacs..." - The Blob Has A Migraine

Authored by James Howard Kunstler,

"It's a beautiful thing to watch the Biden family destroy the Democrat Party."

- @Mazemoore on "X"

You can be sure the blobists have seen this coming from years away. The boys and girls in the agencies have behaved more than just a little badly, and they know it. They committed serious crimes against our country and its citizens under color-of-law since 2015, ranging from seditious conspiracy clear up to treason (say, just for instance, the case of Col. Alexander Vindman using his Ukraine connections to lever Mr. Trump out of the Oval Office in the 2019 impeachment scam.)

You have whole C-suites of agencies teed-up on RussiaGate for felonies, misprision of felonies, abuse of power, deprivation of rights, lying under oath, conspiracy to commit fraud, and much more. You have Judge James Boasberg playing games in the FISA Court he presided over; Robert Mueller and Andrew Weissmann running a two-and-a-half-year Chinese fire drill to cover-up years preceding of FBI / DOJ misconduct; John Brennan, James Clapper, and Gina Haspel abusing the “Five Eyes” intel arrangements to turn the CIA on innocent citizens at home; the fifty-one current and former intel agents colluding to bury Hunter’s Laptop to sway the 2020 election; the antics of Judge Emmet Sullivan in the Flynn case. . . .

And then on to a whole new round of frolics under “Joe Biden” including the malicious prosecutions of J-6 protesters; the pipe-bomb caper at the DNC; the use of several agencies to censor speech and manage the news media; the treasonous negligence of Alejandro Mayorkas on the nation’s borders; the DOJ-coordinated lawfare hounding of Mr. Trump and his adjacent lawyers; the Ukraine War project ginned up by the State Department’s Victoria Nuland and cohorts; and the sinkhole of greed, malice, and medical homicide that was the Covid-19 operation, millions killed and disabled, and likely more of that yet to come from the vaccines, trillions in wealth purloined or just plain lost, and businesses destroyed in lockdowns. It’s not a mere “swamp,” it’s a whole forbidden planet of turpitude.

Then there are the floaters and freelancers who move from one blob venue to the next, like lawfare artists Mary McCord, Norm Eisen, Marc Elias, David J. Kramer, or the girl-band of Lisa Monaco, Fiona Hill, Kathryn Ruemmler, Susan Rice, Samantha Power, Nellie Ohr. And finally, there are the real big fishes: Barack Obama, Hillary Clinton, Bill Gates, Anthony Fauci, Chris Wray, Merrick Garland, General Milley, and “Joe Biden.”

Add William Barr to that list for failing to reveal that he was in possession of Hunter’s laptop as early as the fall of 2019. Of course, it was crammed with exculpatory evidence that could have ended impeachment No. 1 on day one of the initial hearings, yet he never alerted President’s lawyers to its existence. Weird, a little bit. And also, for the effrontery of allowing Jeffrey Epstein to be killed in his Manhattan jail, and never offering the public a coherent account of how the cameras on the cellblock failed, or why the guards who fell asleep on-duty were disciplined with only 100 hours of “community service.”

My Gawd, they must be eating Xanax like tic-tacs in their drawing rooms and boudoirs as the name Kash Patel floats across their social media screens. Kash Patel, a real-live exterminating angel, will finally step in to the FBI Director’s office and turn the investigative powers of the FBI on. . . the FBI! And its parent, the DOJ. The poetic justice is sublime. You must wonder: how does Mr. Patel get through the RINO-infested Senate confirmation process? Start with: what have they got him? Answer: probably not a goshdarn thing, not a hair out of place. More to the point: what has Mr. Patel got on them? (Especially Messers Thune, Barrasso, Cornyn, and let’s just throw in the Democrat Mark Warner, VA, who was up to his eyeballs in RussiaGate as chair of the Senate Intel Committee.)

And were Mr. Patel to land in the FBI Director’s office 49 days from now, what additional info might he uncover about years of weaponized government with assistance from John Ratcliffe at the CIA and Tulsi Gabbard as DNI — who will access a pipeline to the vast national security server farm out in Bluffdale, Utah. So, in case you think that the document-shredding party currently underway in DC will conceal all that criminality, consider what lives forever in the alternate universe of cyberspace. There are additional NSA intel server farms in Fort Meade, MD, Augusta, GA, and San Antonio, TX, all with troves of agency emails and cell phone texts. Not to mention what whistleblowers-to-come might have saved on their thumb drives. And you may be sure that the whistles will be blowing, even while the culpable rat each other out. Remember too: there is the document dossier of FBI crimes that Mr. Trump had in his personal possession after leaving office— the reason for the FBI raid on Mar-a-Lago, August, 2022, and Jack Smith’s bullshit court case to justify it.

In a new wrinkle to things transitional, you have the news late Sunday that “Joe Biden” issued a blanket pardon to “the smartest person I know,” Hunter Biden, that covers every last criminal act he committed from January 1, 2014, to present, including bribery, wire fraud, money-laundering, trafficking minors for sex, handgun violations, tax evasion, crack-cocaine parties, and probably more.

“JB” assured America more than once that he would never pardon Hunter. Turned out to be the joke that all his utterances were supposedly not. But, really, did you expect anything else? Do you see now, also, why Hunter pled guilty to those tax charges in the LA federal court? I’ll tell you why: because in a trial all the mechanisms of the money transfers through a myriad of bank accounts would have been disclosed. And the money trail leads from the multiple accounts of Hunter’s Rosemont Seneca operation to the personal bank accounts of Biden family members, brother Jim and wife Sara, possibly Hunter’s half-sister Ashley, and, of course, “the Big Guy.” Where are their pardons? And where is “Joe Biden’s” pardon for Joe Biden?

It is unfortunate that the way forward (to a national government different in scale, scope, and disposition toward its citizens) will require so much consorting with what is past.

But it must be if consequence is to be restored as a basic element in our constitutional arrangements. You can’t just have people doing stuff outside the law because they feel like it.

Tyler Durden Mon, 12/02/2024 - 16:20

"Cold Weather Fails To Persist" Across Lower 48 Could Stall NatGas Rally

Goldman's Thomas Evans distributed a note to clients this morning highlighting that the latest weather models show the Arctic cold blast, in place last week, is "failing to persist" across portions of the Lower 48, which could potentially cap the recent natural gas price rally. 

"A feature of winter weather in recent years has been an inability to persist cold patterns for two weeks at a time. This looks to continue with this upcoming cool stretch giving way to broad warmth returning across East and South in the 11-15 day," Evans wrote in the note. 

He said, "The models have not broken down the strong West coast to Alaska ridging that had been instrumental in funnelling cold air from Canada into the US – and for the moment just have the cold air retreating back into Western Canada." 

"If the ridging can be maintained there's a chance for another cold pattern for the East at the end of December, however the Polar Vortex is strong, which will make it harder to see serious cold spilling down from the Arctic," Evans noted. 

The latest weather models via Bloomberg show Lower 48 average temperatures are expected to rise above a 30-year trend into the mid-point of the month after a deep chill last week across the eastern part of the US. 

Evans provided color on what's happening in NatGas markets:

The market needed to bring some production back ahead of the current cold shot, and priced to do so over the course of last week. With production >4.5 Bcf/d above it's low in early November, producers have provided some reassurance that they'll be active in cash.  This reassurance coupled with a breakdown of the colder-than-normal weather pattern is being reflected in vol market softening today. While breakevens still look a little rich, call skew still scans as the more expensive expression in the front.

Meanwhile, in fixed price, we estimate CTAs flipped from short to long over the course of the past couple weeks – that new length looks vulnerable to any further deterioration in the weather outlook. If the balance of Dec rolls forward with a warmer outlook and Jan sells off below $3, the market will still want to keep some delivery risk (storm) premium in the F/H.  With H/J already back to ~2c, this will put pressure on widening the J/F unless the market wants to take premia out of the C26.  Given the path to balance tightening with LNG growth (and no new rigs going down in Haynesville) into X25H26, this (wider spreads, elevated back end) may be the right path forward, even though J/V is already wide for this point in the season.

NatGas futures trading in New York has jumped 52% since mid-October due to cold weather trends across the Lower 48. Prices have since hit resistance around $3.50 per million British thermal units. 

Latest NatGas coverage:

• NatGas Hits Highest Price In Year On "Very Cold Pattern Developing" Across Lower 48
• Goldman: "Keep Pressing" NatGas Shorts Amid Weakest October Demand In 61 Years

Keep an eye on 6-10-day and 8-14-day temperature outlooks via NOAA. 

Tyler Durden Mon, 12/02/2024 - 15:45

Yes, Mexico Knows Exactly What It Is Doing

Authored by Victor Davis Hanson via American Greatness,

President-elect Donald Trump recently had a “talk” with newly elected Mexican President Claudia Sheinbaum about the millions who have crossed through Mexico to enter the U.S. illegally.

Afterwards, Trump reported that their conversation went well, and supposedly both had agreed to secure the U.S. border.

But given long-standing, de facto Mexican policy to rely on and profit from an open U.S. border, it was not long afterwards that Sheinbaum claimed she had not been so accommodating.

Or, as she now put it of the Trump conversation, “I give you the certainty that we would never—and we would be incapable of it—propose that we would close the border.” And of course, she is right: Mexico never would wish for a secure U.S. border, although it is wrong that she is incapable of guaranteeing one should she choose to do so.

What, then, is going on?

Over the last half-century, Mexico has gradually, even insidiously, developed both a one-sided, asymmetrical relationship with the U.S. based on professed mutual benefit and yet sought to leverage America by claiming it is supposedly guilty for two centuries of oppressive treatment.

How does the strange U.S.-Mexico supposed co-dependence seem to work?

The Mexican government has traditionally seen the U.S. as an endlessly wealthy country, liberally governed, and more or less willing to listen to Mexico’s grievances of the sort that are common in asymmetrical partnerships.

About 60 percent of the Mexican people traditionally in polls have voiced a positive view of the United States, yet a surprisingly low number when considering the millions who try to cross its border illegally each year.

Nonetheless, Mexico for decades has conveniently explained the vast influxes across the border, unaudited and illegal, as largely in America’s interests - and mirabile dictu even to Mexico’s disadvantage. Polls tell, however, a vastly different and far more accurate story.

Logically, some 61 percent of Mexicans in a recent 2024 Pew Center Research Poll voiced favorable views of the United States, whose open borders, generous welfare systems, billions of dollars in remittances, and now-defunct immigration laws they see as entirely in their interest. In contrast, 60 percent of Americans, one of the highest numbers on record, now hold unfavorable views of Mexico, perhaps because of the cynical harm it has done through a perforated border.

Mexico says its emigrants, along with those from Central and South America who cross its own borders with relative ease—often with tacit support—supply America with generations of industrious, low-cost labor, robbing it, in a sense, of millions of its own citizens.

It adds that the attractions of El Norte mean that Mexico must put up with human caravans crossing its own sovereign territory to supposedly meet the hungry American demand for labor, drugs, and sex. Indeed, nearly every recent Mexican president has argued that America’s thirst for lethal fentanyl is responsible for the creation of Mexican cartel lords that now run large swaths of Mexico itself.

However, the problem with such ancient and modern disingenuousness is that even if the United States accepted these excuses, apologized, and promised to close the border and keep clear of Mexican affairs, Mexico would grow even more irate. The reason why is that the current relationship has now grown unbalanced to the point of absurdity—sometimes evidenced in past polls that revealed a majority of Mexican citizens both believed in the mutually exclusive propositions that the American Southwest properly still belongs to Mexico and yet they wished to leave Mexico to emigrate to a non-Mexican northward if given the chance.

In truth, Mexico would face insolvency if it did not receive its current some $63 billion in U.S. remittances, largely sent by its own people who crossed into the U.S. illegally. Trump talks of levying a 25 percent tariff on Mexican imports should Mexico not cease undermining the American border. An additional lever would perhaps be to slap a 30 percent tax on all remittances sent from the U.S. to Mexico. That would both encourage capital to stay in the U.S. and raise over $20 billion in excise fees, more than enough proverbially to “pay for the wall.”

However, such largess is still more one-sided since much of the remittances are made available through not just the industriousness of Mexican expatriates but also the generosity of American taxpayers. Their multifaceted subsidies to the undocumented free up billions for them to help support millions of Mexico’s poor in a fashion that Mexico City apparently is either unable or unwilling to ensure.

The annual flight of millions from Mexico is a sort of updated version of Frederick Jackson Turner’s “frontier safety valve theory” of the American West. Accordingly, the Eastern poor and potentially rebellious fled westward in hopes of a new, better life rather than marching on Washington for cancellation of debts or redistribution of property. Mexico City apparently feels that without their own El Norte “frontier,” millions of southern and indigenous Mexican citizens might instead head en masse to Mexico City.

As for the cartels, Mexico knows well that China sends raw fentanyl to its country unimpeded, where cartel factories prepare it for export to America’s addicted and recreational users. There, disguised as less toxic drugs and even foodstuffs, fentanyl will end up killing up to some 100,000 Americans a year—an annual death toll nearly double the total number of U.S. fatalities in the Vietnam War.

Mexico, which also helps China avoid tariffs on its exports to the U.S. by assembling its products in NAFTA and tariff-free Mexico, certainly knows that the Chinese seek both to profit from its cartel ties and to kill Americans and undermine its security in the bargain.

The macabre gambit is likely seen as the Chinese version of an updated Opium War payback, with the twist that the former addicts are now the suppliers.

In an equally sick way, the cartels infuse into the Mexican trickle-down economy, albeit in nefarious and criminal ways, some $30 billion in additional U.S. dollars from Americans addicted to imported Mexican-made drugs tailored for the U.S. market. The presidents of Mexico usually say little about this second source of billions in U.S. foreign exchange or claim American addicts, not Mexican suppliers, explain the growing death and destruction on both sides of the border.

While in office, former President Obrador often said strange things. Two of the most pugnacious were his high-five boast that some 40 million of his own citizens had fled Mexico to cross the border: “Just imagine. There are 40 million Mexicans in the United States—40 million who were born here in Mexico, who are the children of people who were born in Mexico.” (Obrador never explained why his own citizens would willingly flee their own country to a nation habitually caricatured in the Mexican press as racist and exploitive.)

Obrador also periodically delighted in interfering in US elections by urging Mexican expatriates in the U.S. to vote against all Republicans, presumably because they seemed at times to threaten to kill the Mexican golden goose of illegal immigration.

Indeed, in 2023, Obrador urged American Hispanics to never vote for Ron DeSantis’s presidential primary campaign—an irony given Mexico’s chronic complaint of Yanqui interference in Latin American politics.

Obrador believed, as many presidents before him no doubt concurred, that the 40 million expatriates and Mexican-American children, if they were distant from Mexico long enough, would romanticize the country, and so, like most immigrants, become a powerful lobbying force on Mexico’s behalf.

In La Raza literature of the past, and in Mexico’s chauvinistic moments, illegal immigration was envisioned as the ironic response to the ancient “theft’ of the American Southwest. The problem with that thesis is that most Mexicans, as polls have shown, would prefer to live in an American Southwest than a Mexican south.

And it is also increasingly likely that Mexican-Americans will be more prone to vote for border security than open borders—again further proof that their self-interest as patriotic Americans trumps Mexico’s cynical attempts to use them as political pawns. If those trends continue, the American Left and the Mexican government may well lobby for a secure border, in fear they are only augmenting a growing MAGA constituency.

In sum, Mexico understands the myriad ways that an open border, the destruction of U.S. immigration law, illegal immigration, and emigration of millions of its own citizens to America are entirely in its own interests and so hopes to see the continuation of the Biden-Harris-Mayorkas appeasement.

But, given the huge numbers of human trafficking, the chaos, the drugs, the violence, and the financial costs of supporting millions, an open border is increasingly seen by Americans as not to their advantage—as we saw in the recent Trump victory. That reality, not the rhetoric of Mexican presidents, will govern all future negotiations—a truth that President Sheinbaum should digest before she sounds off about a border that she knows her country has done so much to deliberately destroy—and to America’s detriment.

Tyler Durden Mon, 12/02/2024 - 15:25

The Democratic Diaspora: Liberals Seek Safe Spaces After Democracy Prevailed In 2024

Authored by Jonathan Turley,

Democrats who campaigned on the need for “joy” and “saving democracy” are strikingly unjoyful about the results of the democratic process in 2024.

Before the election, slips like the one of President Joe Biden calling Trump supporters “garbage” were immediately denied or deflected. But once voters had given the Republicans control of both houses of Congress, the popular vote and the White House, leading Democratic figures and celebrities dropped all pretense of civility. They are now being open about their contempt for voters, calling them “f—-ing morons” and “arrogant, ignorant” adolescents.

After calling for Americans to come together for Kamala Harris, MSNBC’s Joy Reid sent out a heart-warming holiday message to those who voted for the GOP to “make your own dinner, MAGA. Make your own sandwiches, wipe your own tears.”

Those not wallowing in Reid’s anger are increasingly voicing themes of isolation, insurrection and secession.

For years, the contempt for Trump voters has been open and obvious in much of the media.  The “Let’s Go Brandon” movement captured the lunacy of the press and politicians simply denying what citizens could see, hear and experience for themselves.

When asked for answers on issues like the economy and immigration, Harris paraded an army of celebrities to tell the public how to vote — shiny objects that they thought would be enough for shallow American voters.

They were wrong. Now that the public has made its choice, leading figures are condemning the majority of voters as a mix of misogynists, self-haters and fascists. Whoopi Goldberg, 69, even joined the “4B” sex strike against men. Others seem to be morphing into exactly what they said Trump would become as president: isolationist and insurrectionist.

Some have responded to the losses by retreating further into echo chambers protected from opposing views. Many dumped X in favor of BlueSky, a new social media safe space for liberals who fear being triggered by opposing views. Notably, censorship advocates such as Nina Jankowisz have fled to BlueSky.

The site is portrayed as a return to the good old days when liberals controlled all of the social media and maintained a massive censorship and blacklisting system over political discourse.

New York Times tech reporter Kevin Roose wrote a column last week that offered the familiar “I can breathe again” account: “After an hour or so of scrolling through Bluesky the other night, I felt something I haven’t felt on social media in a long time: free.”

It is the ultimate irony. This election shocked many on the left precisely because they were writing and commenting on each other within their hardened media and political silos. They are unlikely to improve themselves by receding further into that safe space to rave about the “f—ing morons” who make up the majority of America.

Other Democratic politicians have moved beyond the chest-pounding of leaders like Illinois Gov. J.B. Pritzker (D) to pledges of more direct obstruction or inflammatory rhetoric.

Denver mayor Mike Johnson (D) declared that he was preparing the Mile-High City for its “Tiananmen Square moment” to fight the federal government in any attempt to deport unlawful migrants. Johnson warned that he would have not only Denver police “stationed at the county line to keep [ICE] out” but also “50,000 Denverites.”

Not long ago, Democrats were calling similar protests an “insurrection.” Johnson later walked back his remarks but insisted that his city would fight federal efforts to enforce the immigration laws.

Rather than such trench warfare, most Democratic governors and mayors are simply pledging not to cooperate with federal authorities, which is a lawful choice. The concern, however, is how others will react to the overheated rhetoric for months that this will be “our last election” and that Trump is the new Hitler.

Such rage rhetoric gives people license to say and do things they would not ordinarily say or do. Leaders calling on citizens to “fight” ICE and the “fascists” can easily inspire violence, as we have seen in past years. Indeed, that was the very premise of the criminal case against Trump supported by many of these same leaders, alleging that his calls to “fight” against certification was a call for insurrection.

Some liberals are very publicly fleeing the country. Sharon Stone (who called American voters “uneducated”) is reportedly off to Canada. Ellen DeGeneres and Portia de Rossi are off to a mansion in Cotswolds in England. Democratic megadonor Reid Hoffman is also reportedly exploring a departure from the country after his millions of dollars failed to produce a victory for Kamala Harris.

Some, however, want to take part of the country with them. New York State Sen. Liz Krueger (D-Upper East Side) has received praise for her call for New York to join Canada. Where Alexandre Dumas believed that ‘Nothing succeeds like success,” some believe that, after losing an election, nothing succeeds quite like secession.

Krueger previously sought to block Trump from the ballot in the name of protecting democracy. That would have barred the 45 percent of New Yorkers who voted for the president-elect, but those voters would find themselves either Canadians or refugees under her proposal.

Krueger suggested that secession simply makes sense when the majority of the country disagrees with you. She believes New York, Connecticut, Massachusetts and Vermont could form a new Canadian province.

“I got back some unofficial responses and heard this is probably sellable in Ottawa,” she said.

“And look, if we were Europe, in the length of time we’ve been a nation, for Canada, if we were European countries, our borders would have moved around 20 times by now, right?”

She explained that this is all just “thinking outside of the box.”

The box that she and other liberals find themselves in is called “democracy,” and they don’t like it.

Just for the record, the last time people thought “outside the box” and seceded, we got a war with roughly 700,000 people killed.

Yet, assuming New Yorkers can get used to milk in a bag and cheese curds as a snack, there may be an obvious appeal for the left in the True North. Formerly “strong and free,” Canada has become a nightmare for free speech with the ever-expanding criminalization of political speech. One professor, who said that Trump’s plans to combat censorship has left many frightened, said that if free speech protections are restored, “I will be on a plane [out of America].”

For New York Times reporters and officials alike, they will be able to “breathe again” in the controlled, regulated air of censorship countries like Canada.

The only challenge for our displaced and disgruntled diaspora will be that Canadians tend to be nice.

*  *  *

Jonathan Turley is the Shapiro professor of public interest law at George Washington University and the author of “The Indispensable Right: Free Speech in an Age of Rage.”

Tyler Durden Mon, 12/02/2024 - 14:45

Trump Warns Hamas Of "Hell To Pay" If Hostages Aren't Freed Before Inauguration

It's no secret that President-elect Donald Trump is firmly in support of Israel, despite that after a year of Israeli war in Gaza the civilian death toll is in the multiple tens of thousands. Trump has stacked key national security positions with pro-Israel hawks. 

This is why it comes as no surprise that he's already talking tough, threatening escalation if Hamas and Palestinian militants in Gaza don't immediately free the remaining Israeli hostages. "Everybody is talking about the hostages who are being held so violently, inhumanely, and against the will of the entire World, in the Middle East - But it’s all talk, and no action!" Trump began a post on his Truth Social.

He is warning that there will be "hell to pay" if Hamas doesn't release the captives. "Please let this TRUTH serve to represent that if the hostages are not released prior to January 20, 2025, the date that I proudly assume Office as President of the United States, there will be ALL HELL TO PAY in the Middle East, and for those in charge who perpetrated these atrocities against Humanity," Trump continued in the statement.

He then warned in the stern statement [emphasis ZH]:

Those responsible will be hit harder than anybody has been hit in the long and storied History of the United States of America. RELEASE THE HOSTAGES NOW!

Given broad swathes of Gaza have already been pulverized into dust, it's hard to see how the Strip could be hit any harder, also given US-supplied bunker buster bombs have been used against dense urban areas.

A total of 97 hostages remain unaccounted for, though many have been feared dead after over a year of fighting in the Strip. Israel has said that 251 Israelis and foreigners were taken on October 7, 2023.

Recent analysis in The Washington Post tallied that 117 hostages have been freed or rescued, with the bulk of this figure having come as a result of the November 2023 short-lived truce deal.

Israel's military and intelligence believes that a total of 63 hostages remain alive. They have been in captivity for over 420 days, amid worsening conditions. Israel says that 71 have been confirmed killed, but without revealing the precise circumstances of their deaths.

"The hostage whose death was most recently confirmed by Israel is Idan Shtivi," Washington Post writes. "There are 34 hostages reported killed whose bodies have not been recovered and remain in Gaza."

Prime Minister Benjamin Netanyahu will surely take this new statement as a mandate from Trump to keep fighting. Efforts at achieving a new truce completely fell apart within the last weeks, and Israel appears bent on pursuing a military solution.

Given the situation is now essentially a 'fight to the death' scenario, Hamas and Palestinian Islamic Jihad are unlikely to care much about Trump's threat. The terror groups likely see the remnant hostages as the only remaining leverage they have left.

Tyler Durden Mon, 12/02/2024 - 14:25

If Cash Is King, Is The King Dying?

Authored by Gregory Copley via The Epoch Times,

Much of the world is at a pivotal stage in the future of money. If the physical symbolism of cash is removed or diminished, so too is individual freedom and much of the inspiration for entrepreneurship.

Proposals to make cash entirely digital gives a new meaning to governments as “controllers of the currency”; it makes them controllers of the lives of individuals.

Economists, politicians, and the avaricious tend to think that cold, hard cash - the physical kind - merely gets in the way of a deal which can be “interpreted” in many invisible currency forms, such as credits, promissory notes, and abstract assets.

Nonetheless, it is currency which reflects the prestige and power - or lack of them - of a society.

The bulk of the “value” or wealth of most societies today, however, is measured not in currency or hard assets, such as real estate or manufactured items, but in the abstracts of economies, such as creditworthiness. Our wealth, somehow, is “up in the air” out there, somewhere, to a far greater degree than at any time in human history. The old control mechanism of economic leaders, money supply (the physical amount of currency notes or coins in circulation, an aspect known as M1), no longer counts for much, a reason why central banks are less than effective in controlling economic trends.

How does this augur for the future stability of economies or the security of societies?

It first must be recognized that all currencies are “artificial” forms of value exchange. A dollar is worth a dollar if we believe it represents a dollar’s worth of value. And if inflation consistently reduces the purchasing power of that dollar (or euro, or pound, and so on), then at some stage the public will lose faith in it. Significantly, that “faith” parallels and is the handmaiden of trust in the government which issues the currency. It gets down to the reality that currency, governments, prestige, and influence—strength—are all given power only by the mind.

When a society loses its belief in the value of a currency or a government, or if a nation loses its willpower or confidence, then the currency or the government or the nation collapses. And when the overwhelming amount of wealth is measured digitally, rather than in the physical imagery of printed or minted money, it is difficult for it to be seen as anything other than transitory and ephemeral.

U.S. society has had such a sentimental association with its coinage—even the one-cent (penny) piece—that successive U.S. governments have been unwilling to risk public wrath by abandoning it. And this sentimentality has played a strong role in the limiting of inflation over the decades. That may be at an end as the U.S. government has toyed with moving to forms of a digital currency which could be used to control the movement and attitudes of all citizens. This has occurred in the People’s Republic of China.

Bluntly put, the digitalization of money is a major component in the infringement of freedom, given that digital currency is controlled not only by a central (governmental) authority, which can open or close access to funds, but is also dependent upon the absolutely unbroken delivery of electricity supply through a highly-complex structure of communications and computer links. Little wonder, then, that cryptocurrencies have gained some appeal, because they are, ostensibly, outside the grasp of governments. But they are not outside their dependence on electricity.

The appeal, then, of gold as a trading currency has increased in direct proportion to the distrust in governments, but, again, gold is an artificial currency in that it only represents value because of its global recognition and relative rarity. Gold cannot be eaten; nor can it, in itself, represent shelter or security. It is another abstract, supported as a psychological hedge against the fiat currencies of governments. Gold’s value is sustained by the fact that it is one of the “noble metals”—metals which resist corrosion—but it is only one of a number of such metals, all of which have some industrial value as well.

Where there is a significant overlapping between government-issued currencies and gold or silver coins is in the prestige given to the money by the appearance of a sovereign’s head on the paper or coin. This gets back to the concept of the psychological value of currency, tying it to the prestige of the sovereign, an image above party politics. This places great importance on the design and quality of the currency, to give it—particularly in the case of coins—an intrinsic as well as symbolic value.

The United States and other republics have had prestigious coinage, and these coins have usually had an iconic leader on them, and are minted continuously after the death of the figurehead (in the United States, such figures as Washington, Lincoln, or Benjamin Franklin). They have, like the new coins and banknotes now appearing with King Charles III on them, an imagery stimulus value; in short, prestige.

The world can no longer grow consistently without abstract forms of credit and currencies, given the reality that economic growth trajectories are driven by the ability to turn money over as frequently as possible.

So it is not that a return to a physical cash economy is desirable. Rather, it is important that the basis of a country’s economic stability is intrinsically tied to the prestige which its physical currency holds.

Inflation is—or was—held in check when the values of small coins were retained.

Many of us no longer bother to keep coins in our pockets. We relegate them to a storage jar in the kitchen. Some no longer carry paper currency. We rely on credit or debit cards, or their equivalent accessed through a cellphone (good only as long as it has electrical power). Much of this is a tribute to inflation, or the relegation of purchasing power to thoughtless electronic transactions, reflecting wealth in a world which lives only as long as the electrical spark survives.

A silver Maria Theresa thaler, however, will see you fed in areas where credit cards and modern currencies have no sway, in the mountains of Oman or Ethiopia, or the vastnesses of Arabia or Africa. Empress Maria Theresa, whose face is on the coin, ruled only from 1740 to 1780. She would have died contented if she had known how her prestige governed the lives of so many people more than 200 years after her death.

*  *  *

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

Tyler Durden Mon, 12/02/2024 - 14:05

Sullivan Touts 'Massive Surge' In Arms To Ukraine With 50 Days Left In Biden's Term

National Security Adviser Jake Sullivan took to the Sunday news shows where he boasted that the White House is surging as many weapons as possible to Ukraine in the final days of the Biden administration.

He explained to ABC News that with just 50 days left in Biden's term, the White House is busy trying to "get Ukraine all the tools we possibly can to strengthen their position on the battlefield."

"President Biden directed me to oversee a massive surge in the military equipment that we are delivering to Ukraine so that we have spent every dollar that Congress has appropriated to us by the time that President Biden leaves office," he said.

NurPhoto/Reuters

Biden and his top officials have long pledged to support Ukraine with arms and funding "for as long as it takes" to defeat Russia.

But Sullivan and other defense officials have of late begun to acknowledge the inevitability of the Zelensky government having to enter negotiations with Moscow. For the time being, Sullivan said Washington aims to "give Ukraine as many tools as possible so that they could go into that negotiation and feel they could achieve the outcome that they would like to see."

Still, Sullivan sought to reiterate in the ABC appearance that the "key thing" behind potential negotiations to end the war is that Ukraine’s destiny should "not be imposed by outside powers, including the United States."

Concerning a recent NY Times report that suggested some US officials want to see nuclear weapons given to Ukraine, Sullivan dismissed this as a possibility:

Still, Sullivan debunked a report suggesting that the administration is open to returning nuclear weapons to Ukraine.

"That is not under consideration. No. What we are doing is surging various conventional capacities to Ukraine so that they can effectively defend themselves and take the fight to the Russians, not nuclear capability," he told Karl.

As for dealing with the incoming Trump administration, Sullivan confirmed there is contact on handing "off the baton" - though Trump has vowed to immediately negotiate an end to the war. 

"I've encouraged the Ukrainian team to engage the incoming team as well as to engage all of our allies and partners, because, again, on Jan. 21, the war in Ukraine doesn't just go away," Sullivan said.

Mike Waltz, the incoming National Security Advisor, says he has met with Jake Sullivan, the current National Security Advisor, and declares the Trump and Biden administrations are "hand in glove" and "one team" -- after a week in which Biden introduced huge escalations in Ukraine pic.twitter.com/4oQRQnqVCT

— Michael Tracey (@mtracey) November 24, 2024

He added: "Obviously, the new team will have its own policy, its own approach, and I can't speak to that, but what I can do is make sure that we put Ukraine in the best possible position when we hand off the baton."

But the Biden administration's policy has really only been a recipe for uncontrollable escalation. A 'massive surge' of new military equipment assures a prolonging of the war, even as it's become clear that Ukraine's real problem is manpower, and as Russian gains are evident in the east.

Tyler Durden Mon, 12/02/2024 - 12:25

Oil Producers Block Binding UN Treaty To Curb Plastics

Authored by Tsvetana Paraskova via OilPrice.com,

A small group of major oil-producing countries, including the leaders of the OPEC+ alliance – Saudi Arabia and Russia – have blocked a United Nations-backed summit from agreeing on a binding treaty to put limits on the production and use of plastics.

To address plastics pollution, the UN convened a summit in Busan, South Korea, where delegates have been discussing the idea of a plastics treaty since November 25.

The UN has said that the talks would be “essential” to deal with plastics pollution, but these talks and the summit adjourned without a deal being reached.

Countries negotiating a legally binding instrument on plastic pollution concluded their fifth session in the small hours of Monday in Busan, with plans to reconvene in 2025, the UN said, adding that “Despite intense discussions, delegates recognised the need for more time to address divergent views and refine the treaty’s framework.”

Oil producers, including Saudi Arabia and Russia, have balked at the idea to curb plastics.

“There should be no problem with producing plastics,” Abdulrahman Al Gwaiz, the delegate from Saudi Arabia, said during the meeting’s final plenary session.

“The problem is the pollution, not the plastics themselves,” Bloomberg quoted Abdulrahman Al Gwaiz as saying.

Russia, for its part, argued at the summit that efforts to limit plastic production were motivated by economic reasons.

Petrochemicals, from which plastics are made, are expected to drive global oil demand growth in the coming years and decades, even if demand for road transportation fuels wanes.

That’s why it is no surprise that the biggest petrostates depending on oil revenues, such as Saudi Arabia and Russia, aren’t keen on agreeing on limits to plastics production.

Moreover, lobbyists from chemicals and fossil fuel companies were heavily represented at the talks in Busan, according to an analysis by the Center for International Environmental Law (CIEL).

As many as 220 fossil fuel and chemical industry lobbyists had registered to participate in the Intergovernmental Negotiating Committee (INC-5) to advance a global plastics treaty. That was the largest single delegation at INC-5, outnumbering even the host Republic of Korea’s 140 representatives, CIEL said.

Tyler Durden Mon, 12/02/2024 - 12:05

Syrian & Russian Forces Step Up Air Raids, Slowing Jihadist Advance

Russian President Vladimir Putin on Monday spoke by phone with his Iranian counterpart Masoud Pezeshkian in talks that focused on the crisis in Syria, at a moment that Turkey-backed jihadists have threatened the central Syrian city of Hama after their shock capture of Aleppo.

"Attention was focused on the escalating situation in the Syrian Arab Republic. The major aggression of terrorist groups and gangs is views as aimed at undermining the sovereignty, political, social and economic stability of the Syrian state," a Kremlin statement said.

Both Russia and Iran pledged "unconditional support" for Damascus according to Russian state media, but there was also mention of the need to engage Turkey within the framework of the Astana agreement.

Via AFP

"We of course continue to support Bashar al-Assad and we continue contacts at the appropriate levels, we are analyzing the situation," Kremlin spokesman Dmitry Peskov told a press briefing. 

President Pezeshkian on the same day held phone talks with Syrian President Bashar Assad, who just within the last days had visited Moscow, at the moment Aleppo was being attacked.

The attack out of Idlib began on November 27 and within a few short days the major northern Syrian city, and long-time industrial hub of the country, came under the control of Al Qaeda splinter group Hayat Tahrir Al-Sham (HTS) and allied factions. 

An Al Jazeera corresponding reporting from the Syrian-Turkish border has said the HTS advance has slowed after its initial momentum against the Syrian Army.

"Syrian and Russian jets have intensified air attacks in Idlib city and positions in Aleppo as the government of President Bashar al-Assad tries to slow the advance of opposition fighters," the report says.

"The raids on Monday followed big gains by the opposition over the past few days that has greatly shifted the front line in Syria’s long-running war." According to more:

"The advances by the Syrian opposition continue on the battlefront, but not as fast as before. The acceleration is down as the diplomatic efforts to discuss the crisis have risen within the last two days," Koseoglu said.

However, opposition fighters are still on the outskirts of Hama, south of Aleppo. Elsewhere, they have seized most of the city of Tel Rifaat, where Kurdish-led Syrian Democratic Forces (SDF) are calling for a humanitarian corridor to allow Kurds to safely evacuate.

⚡️Syrian warplanes bombed Al Nusra headquarters and operations rooms in Idlib a short while ago. pic.twitter.com/aN26J57oQl

— War Monitor (@WarMonitors) December 2, 2024

In areas of northern Aleppo, Kurds reportedly been engaging the Sunni insurgents in firefights. Dozens of Iran-backed Iraqi militia units have been coming from across the border into eastern Syria, ready to support Syrian national forces.

The HTS terrorists and their political backers say they want nothing less than political transition in Syria, or essentially regime change. This has long been the goal of the anti-Assad drive for well over a decade, also generally supported by NATO intelligence services and the Gulf states.

Tyler Durden Mon, 12/02/2024 - 11:45

Rabobank: Biden's Pardon Risks Further Erosion Of Confidence In The US Government

By Benjamin Picton, Senior Macro Strategist at Rabobank

Pardon?

US stocks rose in shortened trading on Friday, with both the Dow and the S&P500 closing at fresh record highs. Consequently, November marked the best month of the year for the S&P500 as the index finished 5.73% higher, beating February’s 5.17% rise into the silver medal position.

European stocks also rose with the CAC40 up 0.78% and the German DAX up 1.03%. Confidence in Europe was buoyed slightly by a commitment from Marine Le Pen that she wouldn’t bring down Michel Barnier’s government before the weekend over deep disagreements on Barnier’s budget. Despite the stay of execution, the two sides appear to have irreconcilable views over social spending, and its hard to see a situation where Le Pen’s National Rally allows Barnier’s more neoliberal administration to survive into the new year.

Yields on 10-year OATs fell by ~5bps on Friday and French bonds underperformed German Bunds as November CPI data showed a quicker pace of disinflation in France. Nevertheless, the political instability has taken a toll on French borrowing costs as illustrated by outperformance of Greek 10-year bonds on the day and the parity between Greek and French yields (!). Bloomberg reports that some French corporates are now experiencing lower borrowing costs than the national government.

Meanwhile, over in Germany the far-right AfD published a draft policy platform outlining plans to campaign on policies to leave the EU, the Paris Climate Accord and the Euro if the party is successful in forming government at the early election expected in February. The draft policy platform also includes proposals to roll back economic sanctions on Russia and recommission the Nord Stream natural gas pipelines, but still needs to be voted on by AfD members in mid-January. The draft platform marks a break from the manifesto published ahead of EU parliament elections in June, which did not include a firm commitment to take Germany out of the EU.

USDJPY sank below the key 150 level on Friday as Tokyo CPI came in hotter than expected on both the headline and ex-fresh food measure. Even the ex-fresh food and energy measure was up 1-tick on the October reading, prompting a slight lift in futures implied probability of a rate hike at the BOJ’s policy meeting on December 19th. The OIS strip currently has a hike of 16.5bps priced in for the December meeting.

On the geopolitics front the swift dismantling of Hezbollah by Israel, and Russia’s preoccupation with its war on Ukraine appears to have come at great cost for Syria’s Bashar al-Assad. Rebel forces recaptured the country’s second largest city of Aleppo as regime troops were left somewhat stranded by Russian, Iranian and Hezbollah allies and were consequently overwhelmed by the Turkish-backed rebels.

In a situation similar to Yemen, civil war has been raging in Syria for 13 years without attracting a great deal of mainstream interest in Western media. In the case of Yemen, that all changed once the civil war impacted upon freight transits through the Suez Canal, while in Syria the ongoing competition for spheres of influence by Great Powers (Russia, USA, China, Saudi Arabia, Turkey, Iran, Israel etc) provides a useful microcosm of the new global paradigm, but only if one cares to look.

Speaking of new paradigms, Australia’s governing Labor Party struck a deal with the left-wing Greens last week to push through proposed reforms of the RBA. The reforms will create a dual board structure at the central bank, splitting responsibility for monetary policy decisions off from the operational and governance oversight of the bank. Australia’s centre-right opposition parties dealt themselves out of negotiations with the government over the reforms due to fears that the government would use the restructure to “sack (fire) and stack” the monetary policy board with political appointments who might be inclined to cut interest rates ahead of the Federal election due by May next year.

The Greens have been vocal critics of the RBA’s tightening of monetary policy and had previously said that they would only support the government’s RBA reforms if the Treasurer invoked never-before-used powers that allow him to override monetary policy decisions. Treasurer Jim Chalmers had planned to abolish that power and another provision that grants the RBA power to direct bank lending activities. Both of those powers might be useful in a world of increased geopolitical competition where free trade is taking a back seat to state aims and industrial policy is becoming de rigeur again.

Finally, the Wall Street Journal is reporting that President Joe Biden has pardoned his son, Hunter Biden, for federal gun and tax charges despite earlier vows not to intervene. President Biden said that it was clear that Hunter had been “treated differently” by the Justice Department. While this news itself is not immediately market sensitive, Biden’s suggestion that Justice Department prosecutions have not been blind to political considerations in the case of Hunter Biden perhaps risks legitimising President Trump’s claims of unfair prosecution directed against him, and further erosion of confidence in the USA’s institutions of government.

That could certainly have long-term implications for borrowing costs, transmission of monetary policy and a host of other variables.

Tyler Durden Mon, 12/02/2024 - 11:25

Great Thanksgiving Pilgrimage: Sunday Was "Busiest Day Ever For TSA"

US airlines are trading slightly higher in the early cash session after new Transportation Security Administration (TSA) checkpoint data revealed that Sunday marked the "busiest day ever" at airports nationwide.

Traffic from Reagan National Airport is backed way up onto Rt. 1 as we are in one of the busiest periods of the busiest air travel day for Thanksgiving. I took my own reporter advice & dropped someone off at Crystal City Metro- riding one stop was his only way to make his flight. pic.twitter.com/fRwuXFVabq

— Tom Roussey (@tomroussey7news) December 1, 2024

TSA checkpoint data indicated that officers screened 3,087,393 passengers across airports, a 33% jump from the same day one year ago. 

This morning I’m at @Reagan_Airport for the last busy day of traveling as Thanksgiving weekend comes to an end. So far, no canceled or delayed flights, but the TSA line is getting steadily longer, so give yourself plenty of time to get to your gate! @wusa9 pic.twitter.com/LhA8j7YJjR

— Brianna Hamblin (@BriReports) December 2, 2024

This marks a new daily record.

More details from TSA were shared on X.

BREAKING NEWS: Yesterday, December 1st was the busiest day ever for TSA - our officers screened 3.087M individuals at airports nationwide. If you're still traveling home from the Thanksgiving holiday, please arrive at the airport early. Contact @AskTSA with any travel questions. pic.twitter.com/lhzGYb2Gw6

— TSA (@TSA) December 2, 2024

In markets, the S&P 500 Passenger Airlines Index edged slightly higher on the news. While the index has not recovered to pre-pandemic levels, it has risen 57% year-to-date.

AAA projected that nearly 80 million Americans would travel more than 50 miles, either by road or air, ahead of last week's Thanksgiving holiday.

Beyond soaring air travel demand, consumers also flocked to movie theaters in record numbers.

Is America truly back after the post-Covid funk?

Tyler Durden Mon, 12/02/2024 - 11:10

"No Way Out" - French Credit Risk Spikes After Le Pen Confirms Backing Of 'No Confidence' Vote

Update (1015ET): French credit risk surged after Le Pen's opposition party National Rally confirmed it will back a no-confidence motion brought by the Left's Manot (who confirmed he will do so on national TV), after PM Barnier used article 49.3 to push through a spending bill that crossed too many red lines.

“There is no way out for a government that reconnects with the thread of Macronism, which refuses to take into account the social emergency at the end of the month and which ignores the need to relaunch growth,” National Rally President Jordan Bardella wrote on X after the announcement.

"We will vote no confidence," the RN said on X.

Le Pen's RN party is the largest single party in parliament.

The left wing is also expected to back the motion, which could be held as early as Wednesday and if successful would topple the minority government after only three months in office.

French credit spread (to Germany) snapped higher on the news (even though it was expected)

French shares are also tumbling as the country's yields are now higher than Greece's...

If Barnier is evicted from office, Macron would have to re-appoint him or pick a new premier.

But the president would face the same difficult balancing act with no possibility for fresh legislative elections until July.

Any new government that emerges would still need urgently to propose a 2025 budget.

*  *  *

France’s benchmark yield spreads have come off the day’s wides after the latest headlines show the government may have made a further compromise in its bid to save the budget.

France’s government offered a final-hour concession to Marine Le Pen on the 2025 budget, seeking to avoid being ousted from power in a no-confidence vote.

Prime Minister Michel Barnier committed to not cutting reimbursements for medicines, caving to yet another key demand from the far-right after crisis talks with Le Pen earlier Monday.

The concession is a last-ditch attempt by the French premier to keep the budget bill on track and remain in office. Without a majority in parliament, Barnier was set to resort to using Article 49.3, which allows for the adoption of the social security bill without a vote, but opens the door to no-confidence motions.

Le Pen’s National Rally party, the largest in the lower house, said earlier Monday it would ensure the government falls, barring a “miracle” compromise on their demands. Party officials did not immediately respond to requests for comment after Barnier offered the concession.

However, at 83bps (spread to Bunds), French fragmentation risk remains as high as it has been since the EU financial crisis in 2013 ahead of the critical vote...

Source: Bloomberg

How Did We Get Here...?

Before the end of today's French parliamentary session, Barnier's government must submit the social security budget details to the National Assembly. As it stands, Barnier's center-right gov't cannot pass this unless National Rally (RN) provides support or abstains. Currently. Barnier's coalition has the most seats followed by New Popular Front (NFP) and then RN.

Barnier has already made clear he plans to pass the motion via Article 49.3, which allows the gov't to pass measures without a formal parliamentary vote but at the cost of opening the door to an immediate no-confidence motion.

In recent days Barnier made concessions to RN’s Le Pen around electricity taxes and certain other issues in order to get her support and avoid losing the no-confidence motion. However, Le Pen has made clear that RN has multiple red lines which need to be removed from the budget.

On Sunday, Le Pen announced that Barnier had ended the discussion' while more recently RN’s Bardella said "a no-confidence motion will likely be passed unless there is a last minute miracle”.

Ratings

S&P affirmed France at AA- on Friday, with a Stable outlook, recognizing Barnier's austerity plan to reduce the deficit. However, the agency warned that political fragmentation and the risk of diluted reforms could threaten long-term fiscal stability, and while it is optimistic about 2025's fiscal targets, it cautioned that the future trajectory beyond 2025 remains uncertain.

What Happens Next?

On Monday, 2nd December Barnier's gov't will announce they are passing the social security budget via Article 49.3. After which, opposition parties will be entitled to table a no-confidence motion.

The left-wing alliance NFP is expected to table such a motion. As a reminder. NFP secured the most seats in June's election but President Macron decided not to select the PM from that group and instead tried to form a centrist coalition with Barnier at its helm. As such, they have committed to tabling a no-confidence motion which will pass if, and only if. RN supports it.

If tabled, the motion will likely occur on Wednesday, 4th December. After Article 49.3 is used opposition parties have up to 48-hours to table a no-confidence motion which then needs to be voted on within three days. However, there is no reason for NFP not to table the motion immediately, hence Wednesday is the most likely day. For what it's worth. RN also appears to have a no-confidence motion ready to go.

Following this, the next step goes to President Macron who will attempt to appoint a new PM. get support around them and then pass the required fiscal legislation by year end to have a workable budget for 2025 and appease the European Commission. As a reminder, the Commission placed France under excessive deficit procedures due to its deficit being well in excess of the 3% debt/GDP ratio the commission allows.

In the event that Barnier survives the confidence motion then he has to return before end-December with the management component of the budget.

A bill which would also need Article 49.3 to pass and thus will open the door to another confidence motion.

If Barnier loses the motion then Macron will need to appoint someone to serve as the new PM.

In the short-term, Barnier would likely continue as a caretaker during which there are two backup options for the government: 1) usage of special legislation to rollover the 2024 budget for a brief period of time (this would not solve the pressing budget problems); 2) usage of a gov't order to pass the budget without vote, while this would pass the budget there would be no gov't to deliver it (Barnier couldn't as caretaker), thus Macron would need to appoint a new PM.

A government which would undoubtedly face even greater pressure from NFP and RN.

Le Pen

It is somewhat unclear as to what exactly Le Pen wishes to gain from the gov't collapsing.

As parliament cannot be dissolved until June 2025 at the earliest and while the gov't collapsing will put pressure on Macron to resign, he has made clear he will not do so.

There had been speculation that Le Pen’s stance was a negotiating tactic in order to obtain some of her red lines. If this is the case, then it is going to the wire.

Finally, the impact of this is not inconsequential...

It has historically cost the French government around 50bps more to finance itself for 10 years than it has the German government. France is now the euro-area’s biggest issuer of debt (ahead of Italy) and the country ran a huge budget deficit in 2024. The political turmoil created since Macron called a snap parliamentary election has seen that spread widen to around 85 bps.

Running the wider spread through our in-house model of the euro-area economies, and assuming it remains elevated through 2025, suggests a 0.5% drag on GDP will emerge by the end of next year.

Higher borrowing costs and slower growth would be a bad combination for public finances. The danger is that spreads widen further, exacerbating these impacts and creating ever bigger fiscal risks.

Tyler Durden Mon, 12/02/2024 - 10:15

Trump Victory Sparks Renewed Optimism In Manufacturing Surveys

While Services surveys are soaring, Manufacturing continues to stagnate (below 50) despite a serial improvement in US Macro 'hard' data.

However, November saw a post-Trump resurgence in confidence with S&P Global's Manufacturing PMI rising to 49.7 (highest since June) and ISM's Manufacturing PMI jumped from 46.5 to 48.4...

Source: Bloomberg

While both of the surveys rose notably, they do both remain in contraction (sub-50).

One more silver lining is that while new orders rose, prices actually fell (for now)...

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence noted optimism is on the rise:

“The mood among US manufacturers brightened in November, though any feel-good factor has yet to feed through to higher output on the factory floor.

“Optimism about the year ahead has improved to a level not beaten in two and a half years, buoyed by the lifting of uncertainty seen in the lead up to the election, as well as the prospect of stronger economic growth and greater protectionism against foreign competition under the new Trump administration in 2025.

But, it's not all coming up roses:

“In contrast, current production levels fell for a fourth straight month in November, dropping at a rate not exceeded for nearly one and a half years. The gap between expected future output and actual current output is now the widest seen for a decade if the pandemic is excluded, underscoring the marked divergence between tough current conditions and the mounting expectation of better times to come.

“Demand conditions need to improve alongside the improvement in confidence to encourage producers to raise production. However, although export sales continue to fall sharply, we note that November’s fall in overall new orders was the smallest seen over the past five months, hinting that the downturn in domestic demand for goods is easing and could help revive the manufacturing sector as we head into 2025.

But, Manufacturers recorded a slower rise in input costs in November, and one that was only modest.

The pace of input price inflation eased for the third month running to the weakest for a year.

On the other hand, the pace of output price inflation quickened slightly and remained slightly above the pre-pandemic average.

“The promise of protectionism has meanwhile led to an increase in input buying by some US producers, as they seek to front-run price hikes on imports from threatened tariffs. One in four companies reporting higher input purchases in November attributed the rise to tariff threats, underlying US manufacturers’ concerns over the inflationary impact of tariffs.”

We shall see if that wave of inflation fears shows its ugly head...

Tyler Durden Mon, 12/02/2024 - 10:05

Key Events This Week: Payrolls, Powell, PMIs And More

As we start a new month, it is set to be a busier week after the lull of Thanksgiving, with a lot of focus on various important US employment data culminating in payrolls on Friday, a number that could influence the fairly tight December 18th Fed decision. As DB's Jim Reid notes, the US ISM indices (today and Wednesday), some global PMIs, and the University of Michigan's consumer survey (Friday) are also due with inflation expectations within the survey fascinating after last month saw the joint highest (3.2%) for the 5-10yr expectations series since 2011. From central banks, speakers include Fed Chair Powell and ECB President Lagarde (both Wednesday).

In terms of the US employment data, Deutsche Bank's forecast for Friday's payrolls is +215k (consensus +200k) with private payrolls at +185k (consensus +200k). Last month the data printed at +12k and -46k, respectively, with weather and strikes impacting the numbers. For private payrolls it was the first negative print since December 2020 during the winter Covid wave. The DB economist forecast assumes 75k of positive payback split equally between weather and returning strikers. DB and consensus expect the unemployment rate to hold at 4.1%. Prior to this we have JOLTS (tomorrow), ADP (Wednesday) and the employment components of today manufacturing ISM and Wednesday's services equivalent. JOLTS is always one month behind payrolls (e.g. October) so it will be influenced by the weather disruptions we had that month.

Over in Europe, a number of economic activity indicators are due for the main economies including factory orders (Thursday), industrial production and the trade balance for Germany (both Friday). Industrial production (Thursday) and the trade balance (Friday) are also due for France. Otherwise there will also be November CPI prints in Switzerland (Tuesday) and Sweden (Thursday).

In Asia, Japan's wages and consumption activity are out on Friday. In Australia, Q3 GDP will be released on Wednesday. Briefly rounding off with geopolitics, South Africa took over the G20 presidency from Italy yesterday and the OPEC and non-OPEC ministerial meeting (online) will be held on Thursday as supply remains in focus.

Also watch France today as the National Assembly starts to review social security within the budget bill. If Barnier uses article 49.3 to push through the bill without a vote, it is feasible a no-confidence motion could come as early as today if the premier doesn't take into account the demands of the far-left and far-right. Le Pen in particular has been very hawkish over the weekend, suggesting that her extra budget demands need to be met today.

Courtesy of DB, here is a day-by-day calendar of events

Monday December 2

• Data: US November ISM index, October construction spending, China November Caixin manufacturing PMI, UK November Lloyds Business Barometer, Japan November monetary base, Italy November manufacturing PMI, budget balance, new car registrations, October unemployment rate, Eurozone October unemployment rate, Canada November manufacturing PMI
• Central banks: Fed's Waller and Williams speak

Tuesday December 3

• Data: US October JOLTS report, November total vehicle sales, France October budget balance, Switzerland November CPI
• Central banks: Fed's Kugler and Goolsbee speak, ECB's Cipollone speaks
• Earnings: Salesforce, Marvell, Okta

Wednesday December 4

• Data: US November ADP report, ISM services, October factory orders, China November Caixin services PMI, UK November official reserves changes, Italy November services PMI, Eurozone October PPI, Canada Q3 labor productivity, November services PMI, Australia Q3 GDP
• Central banks: Fed's Beige book, Chair Powell and Musalem speak, ECB's President Lagarde, Cipollone and Nagel speak
• Earnings: Synopsis, Dollar Tree, Foot Locker
• Other: OECD economic outlook

Thursday December 5

• Data: US October trade balance, initial jobless claims, UK November new car registrations, construction PMI, Japan October labor cash earnings, household spending, Germany November construction PMI, October factory orders, France October industrial production, Eurozone October retail sales, Canada October international merchandise trade, Sweden November CPI
• Central banks: BoJ's Nakamura speaks, BoE's Greene speaks
• Earnings: Dollar General, Kroger, HPE, Lululemon

Friday December 6

• Data: US November jobs report, December University of Michigan survey, October consumer credit, Japan October leading and coincident index, Germany October trade balance, industrial production, France October current account balance, trade balance, Italy October retail sales, Canada November jobs report
• Central banks: Fed's Bowman, Goolsbee, Hammack and Daly speak

* * *

Focusing just on the US, Goldman writes that the key economic data releases this week are the ISM manufacturing index on Monday, the ISM services index on Wednesday, and the employment report on Friday. There are several speaking engagements from Fed officials this week, including a speech on the economic outlook by Governor Waller on Monday.

Monday, December 2

• 09:45 AM S&P Global US manufacturing PMI, November final (consensus 49.0, last 48.8)
• 10:00 AM Construction spending, October (GS +0.3%, consensus +0.2%, last +0.1%)
• 10:00 AM ISM manufacturing index, November (GS 47.0, consensus 47.6, last 46.5): We estimate the ISM manufacturing index rebounded in November (+0.5pt to 47.0), reflecting convergence toward the level implied by other manufacturing surveys (GS manufacturing survey tracker at 49.1) and neutral seasonality.
• 03:15 PM Fed Governor Waller speaks: Fed Governor Christopher Waller will give the keynote speech at the American Institute for Economic Research Monetary Conference.
• 04:30 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will give keynote remarks to the Queens Chamber of Commerce. Speech text and a Q&A are expected. On November 21, Williams said “Based on the cooling of the labor market in the past few years and the disinflationary progress we have made, it is pretty clear that monetary policy is restrictive today. That is why it was very appropriate to cut the federal-funds rate in our past two meetings. My guess is the fed-funds rate will be lower by the end of next year than it is today. It will depend on the data and the progress we make.”

Tuesday, December 3

• 10:00 AM JOLTS job openings, October (GS 7,600k, consensus 7,470k, last 7,443k): We estimate that JOLTS job openings rebounded slightly in October (+0.2mn to 7.6mn), reflecting convergence to the level suggested by online job postings.
• 03:45 PM Chicago Fed President Goolsbee (FOMC non-voter) speaks: Chicago Fed President Austan Goolsbee will give closing remarks at the Midwest Agriculture Conference. A livestream is expected. On November 15, Goolsbee said “I think the throughline is that as long as we continue making progress toward the 2% inflation goal, over the next 12-18 months, rates will be a lot lower than where they are now. That’s where we need to settle.” He went on to say “We’re not in a hurry to automatically get there. And I think if there’s disagreement over what’s the neutral rate, it does make sense at some point to start slowing how rapidly you’re getting there just to figure out, given the lags in monetary policy, are we at neutral? Are we getting close to neutral?”
• 05:00 PM Lightweight motor vehicle sales, November (GS 16.2mn, consensus 16.0mn, last 16.0mn)

Wednesday, December 4

• 08:15 AM ADP employment change, November (GS +135k, consensus +158k, last +233k)
• 08:45 AM St. Louis Fed President Musalem (FOMC non-voter) speaks: St. Louis Fed President Alberto Musalem will give a keynote address at the College of Central Bankers Symposium. Speech text and a Q&A are expected. On November 14, Musalem said “Further easing toward a neutral policy stance will be appropriate to support employment if inflation continues to converge toward 2%,” but cautioned that “recent information suggests that the risk of inflation ceasing to converge toward 2%, or moving higher, has risen, while the risk of an unwelcome deterioration in the labor market has remained unchanged or possibly fallen.”
• 09:45 AM S&P Global US services PMI, November final (consensus 57.0, last 57.0)
• 10:00 AM ISM services index, November (GS 55.0, consensus 55.5, last 56.0): We estimate that the ISM services index declined 1.0pt to 55.0 in November, reflecting sequential softening in our non-manufacturing survey tracker (-0.3pt to 55.0 in November) and payback for an outsized increase in the supplier deliveries component in the prior month.
• 10:00 AM Factory orders, October (GS +0.1%, consensus +0.4%, last -0.5%): Factory orders ex-transportation, October (last +0.1%)
• 02:00 PM Beige Book, December meeting period: The Fed’s Beige Book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. The Beige Book for the November FOMC meeting period noted that economic activity was roughly unchanged since September, although two districts reported modest growth. Hurricanes Helene and Milton were said to have impacted crops and “prompted pauses in business activity and tourism” in the Southeast. In this month’s Beige Book, we look for anecdotes related to the evolution of labor demand and firms’ expectations of activity growth for the remainder of the year.

Thursday, December 5

• 08:30 AM Trade balance, October (GS -$77.0bn, consensus -$74.9bn, last -$84.4bn)
• 08:30 AM Initial jobless claims, week ended November 30 (GS 210k, consensus 215k, last 213k); Continuing jobless claims, week ended November 23 (consensus 1,904k, last 1,907k): We estimate that initial jobless claims edged slightly lower in the week ended November 30th. We would note that initial claims tend to be more volatile in November and December—likely reflecting difficulties with seasonally adjustment around the holidays—and that this week’s reference period coincides with Thanksgiving, which could contribute to additional volatility.

Friday, December 6

• 08:30 AM Nonfarm payroll employment, November (GS +235k, consensus +200k, last +12k); Private payroll employment, November (GS +205k, consensus +200k, last -28k); Average hourly earnings (MoM), November (GS +0.2%, consensus +0.3%, last +0.4%); Average hourly earnings (YoY), November (GS +3.8%, consensus +3.9%, last +4.0%); Unemployment rate, November (GS 4.1%, consensus 4.1%, last 4.1%); Labor force participation rate, November (GS 62.7%, consensus 62.7%, last 62.6%): We estimate nonfarm payrolls rose 235k in November. Big Data indicators indicated a sequentially stronger pace of job creation, and we estimate that the end of the hurricanes that weighed on October job growth will likely boost November job growth by 50k. The Bureau of Labor Statistics indicated that workers returning from strikes, including those at Boeing, will boost November payroll growth by 37.5k on net. We assume above-trend (albeit moderating) contributions from the recent surge in immigration and catch-up hiring. On the negative side, we estimate that a later-than-usual Thanksgiving and Black Friday could weigh on retail hiring by roughly 15k. We estimate that the unemployment rate was unchanged at 4.1%, reflecting a rebound in the labor force participation rate and solid household employment growth. We estimate average hourly earnings rose 0.2% (month-over-month, seasonally adjusted), which would lower the year-over-year rate to 3.8%, reflecting a drag from the reversing impact of the hurricanes.
• 10:00 AM University of Michigan consumer sentiment, December preliminary (GS 72.2, consensus 73.3, last 71.8): University of Michigan 5-10-year inflation expectations, December preliminary (GS 3.1%, last 3.2%)
• 10:30 AM Chicago Fed President Goolsbee (FOMC non-voter) speaks: Chicago Fed President Austan Goolsbee will participate in a fireside chat as part of the Chicago Fed's Annual Economic Outlook Symposium. A Q&A is expected.
• 12:00 PM Cleveland Fed President Hammack (FOMC voter) speaks: Cleveland Fed President Beth Hammack will give a speech on the economic outlook. Speech text and a Q&A are expected.
• 01:00 PM San Francisco Fed President Daly (FOMC voter) speaks: San Francisco Fed President Mary Daly will speak in a moderated conversation at an event hosted by Stanford University's Hoover Institution. A Q&A is expected.

Source: DB, Goldman

Tyler Durden Mon, 12/02/2024 - 10:02

Romanian Officials Want Election "Redo" - Claim Russian Interference After Right Wing Candidate Win

When the will of the public starts to work against the designs of the progressive establishment, they lie and they cheat, and they believe they are justified in this behavior because to cheat is a "lesser evil" compared to the rise of right wing movements.  Conservatives, in their minds, are the ultimate evil.

This is how we get fabricated scandals like Russiagate and the Steele Dossier; an accusation driven circus designed to prove Russian interference led to the surprise win by Donald Trump in the 2016 elections. 

It's perhaps not surprising that the same cabal would use similar tactics in other key elections around the world as a means to thwart any voting majority that goes against them.  This seems to be the case in Romania where Calin Georgescu recently scored a surprise win in the first round of the presidential elections.  

The 62-year-old, referred to as an 'obscure far-right populist' by the establishment media, shook the country’s political landscape by clinching the most votes and advancing to the second round to face off against reformist Elena Lasconi of the progressive Save Romania Union party.  He also beat the incumbent Prime Minister Marcel Ciolacu of the Social Democratic Party, leaving the ruling party for the first time in Romania’s 35-year post-communist history without a candidate in the runoff, set for Dec. 8. 

However, according to a report by Expert Forum, a Bucharest-based think tank, Georgescu’s TikTok account before last week’s vote saw an explosion of engagement, which it said appeared “sudden and artificial, similar to his polling results”.  Expert Forum is a leftist organization which works in collaboration with the European Commission, Council of Europe, World Bank and United Nations Development Programme, along with a multitude of NGOs.

Romanian officials have seized on the Expert Forum report, arguing that Georgescu “benefited from massive exposure due to preferential treatment” granted by TikTok.  They say Russian interference is behind Georgescu's win.  In other words, they want the public to believe that an artificial TikTok following devised by the Kremlin somehow translated into a massive shift in votes against the political left in Romania. 

Georgescu is a NATO critic and has defended Vladimir Putin as "a man that loves his country", though he holds that he is not pro-Russia.  A primary message of his campaign has been a push for peace in Ukraine and keeping Romania out of the war.

His positions include supporting Romanian farmers, reducing import dependence, and ramping up local energy and food production. He also wants to establish a “sovereign” distribution model based on participatory democracy in which “Truth, Freedom and Sovereignty are the axes of values” in Romania’s development.

Romania’s constitutional court will decide on Monday whether to annul the now controversial first round of the presidential election, held on Nov. 24. If it does, the court will almost certainly whip up public fears that the country’s widely distrusted establishment parties are trying to manipulate the electoral contest in their favor.

The decision could plunge Romania into one of its most intense crises since the fall of Communism

The prevailing narrative implicit in the interference accusations is that voters are stupid and easily influenced by social media trends that foreign governments can control.  Just as Democrats in the US wanted the public to believe that online "Russian disinformation" tricked voters into supporting Donald Trump, Romanian elites want to inject doubt into the Georgescu win. 

It's not that the people are fed up with the corruption of the progressive status quo - Rather, the establishment argues that the populace doesn't make their own decisions and they need protection from themselves.   

Tyler Durden Mon, 12/02/2024 - 09:45

Ferrari's Commitment To 'Diversity And Inclusivity' Called Out For Supreme Hypocrisy

Authored by Paul Joseph Watson via Modernity.news,

People responded to Ferrari bragging about its commitment to ‘diversity and inclusivity’ by pointing out that the luxury car manufacturer forces customers to pass a ‘social status’ background check just to be able to buy a Ferrari.

Awkward.

In the wake of the Jaguar farce, when the heritage brand launched a new commercial featuring androgynous models, thereby alienating their core customer base, Ferrari appears to have said, “Hold my beer!”

It started with a post on X in which Ferrari boasted of its, “Commitment to equality, equity, and inclusion by endorsing the new Diversity and Inclusion Charter alongside @F1 and the @fia.”

We proudly reaffirm our commitment to equality, equity, and inclusion by endorsing the new Diversity and Inclusion Charter alongside @F1 and the @fia.
Through encouraging education, breaking biases, and ensuring transparency, we’re creating a more inclusive industry. #Ferrari

— Ferrari (@Ferrari) November 26, 2024

“Through encouraging education, breaking biases, and ensuring transparency, we’re creating a more inclusive industry,” the brand smugly asserted, before getting ratioed into oblivion.

However, that “inclusivity” doesn’t appear to extend to its own potential customers.

As Nick Sortor points out, Ferrari conducts exhaustive background checks on anyone who wants to buy one of their higher end vehicles to “ensure they fit the mold of the brand and its desired image.”

Ferrari has now gone woke, and is preaching “inclusivity.”

And nothing says “inclusivity” like requiring background checks and “social status checks” for ENTIRE FAMILIES before they’re allowed to purchase your cars.

Spare us from your hypocrisy and virtue signaling, @Ferrari. pic.twitter.com/zgYHyPz5LU

— Nick Sortor (@nicksortor) November 27, 2024

“Family background, social status and additional affiliations,” are also scrutinized before Ferrari will even consider taking your cash.

That doesn’t sound very inclusive!

“Nothing says “inclusivity” like requiring background checks and “social status checks” for ENTIRE FAMILIES before they’re allowed to purchase your cars,” commented Sortor.

As we previously highlighted, Jaguar’s stock price plummeted after their woke rebrand.

Expect Ferrari, in the absence of some seriously rapid back-pedaling, to face the same fate.

*  *  *

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 Mon, 12/02/2024 - 09:32

SMCI Soars After Special Committee Finds 'No Evidence Of Misconduct'; Fires CFO

Super Micro Computer said an external review of its business found no evidence of wrongdoing and that the company will appoint new top financial leadership.

The company is looking for a new chief financial officer, chief compliance officer and general counsel, it said in a statement Monday.

On November 5, 2024, the Company announced that the Special Committee’s investigation preliminarily found that the Audit Committee had acted independently and that there was no evidence of fraud or misconduct on the part of management or the Board of Directors.

The Special Committee’s final findings support those initial findings, and the Company is now disclosing the details of the Review, along with measures recommended by the Special Committee.

The Special Committee’s investigation was intended to assess whether the information brought to the Audit Committee’s attention by EY, and certain other matters identified during the Review, raised substantial concerns about (i) the integrity of the Company’s senior management and Audit Committee, (ii) the commitment of the Company’s senior management and Audit Committee to ensuring that the Company’s financial statements are materially accurate, (iii) the Audit Committee’s independence and ability to provide proper oversight over matters relating to financial reporting, and (iv) the tone at the top of the Company with regard to rehiring certain former employees and financial reporting.

The Special Committee’s key findings are summarized as follows:

• Management and Audit Committee integrity: The evidence reviewed by the Special Committee did not raise any substantial concerns about the integrity of Supermicro’s senior management or Audit Committee, or their commitment to ensuring that the Company’s financial statements are materially accurate.

• Audit Committee independence: As to the matters investigated by the Special Committee, the Audit Committee demonstrated appropriate independence and generally provided proper oversight over matters relating to financial reporting. The Special Committee also had no reservations about the independence of the Audit Committee and each of its members.

• Appropriate tone at the top: With respect to the rehiring of former employees, the tone at the top of the Company was appropriate and fully consistent with a commitment to proper financial reporting and legal compliance.

And due to the lack of problems found, the board says no restatement of reported financials is expected.

As announced on November 18, 2024, in its compliance plan to Nasdaq, the Company believes it will be able to complete its Annual Report on Form 10-K for the year ended June 30, 2024, and its Quarterly Report on 10-Q for the fiscal quarter ended September 30, 2024 and become current with its periodic reports within the discretionary period available to the Nasdaq staff to grant.

As previously disclosed, the Company does not anticipate any restatements of its quarterly reports for the fiscal year 2024 ended June 30, 2024, or for prior fiscal years.

Specifically, with reference to Revenue recognition and sales practices

• Based on a thorough review of 52 sales transactions from April 1, 2023 to June 30, 2024, including two sales transactions specifically designated by EY, the Special Committee did not disagree with any of the Company’s revenue recognition conclusions for any quarter during this period.

• The Special Committee reviewed underlying sales transaction information (including sales orders, purchase orders, shipping documents, payment information, and the Company’s revenue recognition determinations), discussed transactions with accounting personnel, and conducted email reviews as appropriate. The sample was focused on sales that included large dollar amounts, involvement of rehires, discussions with now former auditors, customers with high sales concentrations at quarter ends, and/or changes in delivery dates.

• The Review also examined merchandise returns and warranty practices to assess if there was any pattern or practice of shipping non-working or incomplete products near quarter ends.

• Based on its investigation, the Special Committee did not disagree with the Company’s revenue recognition conclusions. Additionally, the Special Committee did not find evidence of a pattern or practice of the Company shipping incomplete products at or near quarter ends to recognize revenue.

• The evidence reviewed by the Special Committee did not give rise to any substantial concerns about the integrity of Supermicro’s senior management or Audit Committee, or their commitment to ensuring that the Company’s financial statements are materially accurate.

• The Audit Committee demonstrated appropriate independence and generally provided proper oversight over matters relating to financial reporting.

For now the market is happy about this...

Do we really trust the 'independent' investigation after an external auditor abandoned ship?

Among its findings, the independent Special Committee determined that the resignation of the Company’s former registered public accounting firm, Ernst & Young LLP (“EY”) and the conclusions EY stated in its resignation letter were not supported by the facts examined in the Review, the Special Committee’s interim findings reported to EY on October 2, 2024, or the Special Committee’s final findings.

Did EY just make it up?

That's quite a dive from $122 to $17...

And, having found no evidence of misconduct, why did the company fire CFO David Weigand, and seek a chief compliance officer, chief accounting officer, and general counsel?

Tyler Durden Mon, 12/02/2024 - 09:17

Intel CEO Pet Gelsinger Retires, Stocks Jumps

Back in April, when Intel stock was in freefall and yet still about 50% higher than where it is today, we said that it was time for the company's well-meaning if absolutely clueless CEO, Pat Gelsinger, to resign.

Pat Gelsinger, it's time pic.twitter.com/I421ZwSV9c

— zerohedge (@zerohedge) April 25, 2024

A few months later we followed up with an appeal that was pretty clear:

*INTEL SUSPENDING DIVIDEND STARTING 4Q 2024
*INTEL ANNOUNCES $10B COST REDUCTION PLAN

Someone. Fire. Gelsinger.

— zerohedge (@zerohedge) August 1, 2024

If only he had listened to us then, the once-iconic chipmaker would have been in a far better place today, and the outcome would still be the same because early on Monday Intel reported that Pat Gelsinger fired himself, when he and retired from the company and stepped down from its board of directors just as the company is in the middle of trying to execute on a turnaround plan.

Intel CFO David Zinsner and Intel Products CEO Michelle Johnston Holthaus are serving as interim co-CEOs while the board searches for Gelsinger’s replacement, the company said in a statement. Frank Yeary, independent chair of the board of Intel, will serve as interim executive chair.

Gelsinger’s departure is hitting at a tumultuous time for the US chipmaker. Once the industry leader in computer processors, the company is now working to preserve cash to fund a turnaround plan — one Gelsinger called the “most audacious rebuilding plan” in corporate history. The company has fallen out of investor favor amid a shift in the semiconductor industry toward artificial intelligence hardware. Companies are spending on computers built around accelerator chips for AI, an area where Intel’s offerings have barely made a dent.

“We know that we have much more work to do at the company and are committed to restoring investor confidence,” Yeary said.

“As a board, we know first and foremost that we must put our product group at the center of all we do. Our customers demand this from us, and we will deliver for them.”

It would have delivered for them long ago by firing Gelsinger, as the spike in the stock this morning makes abundantly clear.

And now just find a willing buyer since the stock is trading at a 50% discount just to the SOTP liquidation value of the foundries.

Tyler Durden Mon, 12/02/2024 - 09:07

Musk Pushes Again To Block OpenAI's "Illegal" Conversion To For-Profit Model

Authored by Brayden Lindrea via CoinTelegraph.com,

Elon Musk filed another motion to block ChatGPT-creator OpenAI from converting to a for-profit enterprise, while also alleging that it has been engaging in anti-competitive practices.

Musk accused OpenAI, its CEO Sam Altman, president Greg Brockman and stakeholder Microsoft of violating terms of Musk’s “foundational contributions to the charity,” according to his motion for a preliminary injunction filed on Nov. 30.

Musk co-founded OpenAI in 2015 and was an early board member until he left the company in 2018. 

He has since launched xAI — the firm behind AI chatbot Grok — which he said is falling victim to OpenAI’s anti-competitive practices.

“OpenAI’s path from a non-profit to for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission, and rampant self-dealing,” Musk’s lawyers wrote.

Extract from Elon Musk’s motion in the US District Court Northern District of California. Source: CourtListener

Through a “series of exclusive arrangements” with Microsoft, the two companies have engaged in “predatory practices,” enabling them to seize control of almost 70% of the generative AI market, lawyers for Musk said, adding:

“Microsoft and OpenAI now seek to cement this dominance by cutting off competitors’ access to investment capital, while continuing to benefit from years’ worth of shared competitively sensitive information during generative AI’s formative years.”

Allowing this to continue will hurt xAI and the public, which has become increasingly concerned about “rushed” and “unsafe” AI products, they added.

California law allows a nonprofit to convert to a for-profit stock corporation, but not to a limited liability company.

OpenAI said it remains nonprofit at its core but has established a for-profit subsidiary capable of issuing equity to raise capital and hire world-class talent. Still, those tasks would be administered at the direction of the nonprofit. 

An injunction to preserve what is left of OpenAI’s nonprofit character is the only “appropriate remedy,” Musk’s lawyers said.

“No objective observer can look at OpenAI today and say it bears any resemblance whatsoever to what it promised to be. Enough is enough.”

Source: Elon Musk

An OpenAI spokesperson slammed Musk’s latest attempt in a note to Cointelegraph:

“Elon’s fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit.”

In March, OpenAI leaked emails from Musk in 2015 showing support for the firm to find over $1 billion in funding to compete with the likes of Google and Facebook (now Meta).

OpenAI claimed Musk was harassing the firm in a related October filing.

“Since launching a competing artificial intelligence company, xAI, Musk has been trying to leverage the judicial system for an edge. The effort should fail; Musk’s complaint does not state a claim and should be dismissed,” OpenAI added.

In June, Musk threatened to ban Apple devices at his companies when Apple touted integrating OpenAI’s ChatGPT into its iPhone, iPad and Mac operating systems. Later, Apple launched Apple Intelligence on Oct. 28.

Tyler Durden Mon, 12/02/2024 - 09:00

Winners And Losers Of Black Friday 2024

By Daphne Howland of RetailDive,

Despite the push to move up the holiday season to ease the constraints of one of the shortest shopping windows in years, plenty of people saved their lists for after Thanksgiving Day. 

Shoppers are expected to be careful about spending again at the holidays this year. For a couple of years now, inflation has dominated the news, obscured retail sales growth, shaken up consumers and even overshadowed the presidential election that took place early this month. While inflation has eased and some retailers have made a point of slashing prices in recent weeks, budgets continue to be tight for many households. They may not get much relief if the tariffs promised by now President-elect Donald Trump come to pass.

This could have consequences for holiday sales. Nordstrom earlier this week said that sales trailed off at the start of the fourth quarter, suggesting that the momentum it experienced in Q3 may not hold up.

Still, Black Friday was busy. This year, worldwide, Black Friday hit its peak at just after 2 p.m. Eastern time, according to Block, which tracked transactions across its Square, Afterpay, and Cash App Card platforms. U.S. retail sales (excluding auto sales) were up 3.4% compared to Black Friday last year, according to Mastercard’s SpendingPulse report, which measured in-store and online retail sales, included all payment types and was not adjusted for inflation.

Buy now, pay later plans helped finance purchases, driving 8.8% more in online spend than last year, reaching $686.3 million, per Adobe Analytics, which found that to be especially true for mobile shopping, with a 79.3% share compared to desktop so far.

“Our real-time insights show that consumers are comfortably in the gift-giving spirit as price reductions and deals occur across sectors, supporting budgets for holiday shopping,” Michelle Meyer, chief economist at the Mastercard Economics Institute, said in emailed comments.

Further numbers around Thanksgiving weekend sales will continue to be crunched in coming days, but here are the ups and downs of Black Friday so far.

Winners E-commerce

Cyber Monday appears to be losing its meaning, with many shoppers using their phones and computers on Black Friday to make headway on their holiday lists.

Salesforce found that on Friday online sales in the U.S. rose 7% year over year to $17.5 billion, while Adobe found that they rose 10.2% to $10.8 billion. Between 10 a.m. and 2 p.m., $11.3 million was spent online every minute, per Adobe. 

“Crossing the $10 billion mark is a big e-commerce milestone for Black Friday, for a day that in the past was more anchored towards in-store shopping,” Vivek Pandya, lead analyst at Adobe Digital Insights, said in emailed comments. “And with consumers getting more comfortable with everything from mobile shopping to chat bots, we have tailwinds that can prop up online growth for Black Friday moving forward.” 

Chatbots and AI

The current buzz around artificial intelligence is giving rise to both fear and excitement, as questions swirl about the forward leap in tech and its effects, and they made their mark on Black Friday this year. AI and AI agents drove more than $14 billion in global online sales on Black Friday, and retailers employing generative artificial intelligence had a 9% higher conversion rate than those that didn’t, according to Salesforce.

Chatbots powered by AI were influential, as bot-driven clicks to retail sites rose by a whopping 1,800% compared to last year, Adobe found. A fifth of those surveyed by Adobe said they used chatbots to find deals, with 19% using them to find items and 15% using them for brand recommendations.

“Digital retailers who are using generative AI and agents in their customer service experiences saw a nine percent higher conversion rate compared to those who are not,” Caila Schwartz, director of consumer insights at Salesforce, said in emailed comments. “For an industry that is often concerned with margins, especially ahead of rising costs in 2025, this percent increase is a game-changer.”

Toys

The toy category has encountered some rough times lately, with an 8% downturn in sales last year. Circana analysts over the summer warned that signs of a turnaround earlier this year held no guarantees, given ongoing macroeconomic uncertainty around unemployment, record consumer debt, student loans and consumer confidence.

But toys had a good day on Black Friday, with online sales up 622% compared to average daily sales last month, according to Adobe. Top sellers included Harry Potter Lego sets; items related to the “Wicked” movie; card and board games; Disney Princess toys and dolls; and the Cookeez Makery oven playset, per that report.

Losers In-store shopping

Employing old-fashioned seasonal enticements like doorbusters and entertainment, the Mall of America said that people began lining up early afternoon on Thanksgiving Day and that it welcomed more than 13,000 shoppers in the hour after it opened at 7 a.m. on Black Friday.

In general, however, it looks like this year’s e-commerce boost came at the expense of brick-and-mortar stores. Nora Kleinewillinghoefer, a partner in the consumer practice of Kearney, noted that “Black Friday felt quieter” this year in stores, while Michael Brown, also a Kearney partner, noted a relatively subdued day at Garden State Plaza in New Jersey, though he said that shoppers included younger people and some apparel retailers were busy.

Overall, store traffic on Black Friday was down 3.2%, with footfall down 7% in the Midwest, 2.1% in the Northeast, 3.5% in the South and 3.2% in the West, according to data from RetailNext. Mastercard found that Black Friday online sales rose 14.6% year over year, while in-store sales rose just 0.7% year over year.

Moreover, online carts were more than twice the size of in-store carts, according to payment firm Block.

This is in part due to early shopping that seems to have been conducted primarily online, in a year when “the period between Black Friday and Christmas is unusually short,” according to emailed comments from Darpan Seth, CEO of omnichannel order management advisory and software firm Nextuple.

It’s also because retailers are now better at making more goods available online that in previous years may have only been available in stores, Seth said.

Prices and margins

Black Friday has long been about getting good deals, but some discounts this year were especially steep.

Categories more exposed to inflation and higher-priced items were primed for deep price cuts. Plus retailers themselves may preemptively clear out inventory that could eventually be subjected to Trump’s tariffs, according to Nextuple’s Seth.

Adobe found that “discounts exceeded expectations” and were a purchase motivator for toys (with peak discounts of 27.8% off list price), as well as for electronics (27.4% off), televisions (24.2% off), apparel (22.2% off), computers (22% off) and sporting goods (19.5% off). Discounts are expected to remain elevated through the shopping weekend, per that report.

In fact, Black Friday-esque discounts may be found throughout the holiday shopping period, according to Joe Shasteen, global manager of advanced analytics at RetailNext.

“Broader economic pressures, such as high grocery prices and the rising cost of living, may have further impacted shoppers’ behavior,” Shasteen said in emailed comments. “Inflation-fatigued consumers appear to be prioritizing essential purchases and carefully weighing discretionary spending, underscoring the continued importance of value-driven shopping decisions this holiday season. Additionally, many retailers have extended Black Friday deals to widen the shopping window, offering consumers more time to find discounts and spread out their shopping across the holiday period.”

Black Friday

Thanks once again to e-commerce, Thanksgiving Day itself is stealing Black Friday’s thunder as a red-letter retail sales day. This year, shoppers spent $6.1 billion online on Thanksgiving, a record amount that was 8.8% above last year, according to Adobe.

That growth outpaces last year, too, when Thanksgiving Day online sales grew 5.5%, per Adobe’s report. What’s more, holiday shopping in general has been spread out beyond the Thanksgiving-to-Cyber Monday period, experts said.

“With brands expanding their deals across days or even weeks, the once-frenzied in-person rush is evolving into a digital-first experience,” Kearney’s Kleinewillinghoefer said in emailed comments. “Black Friday is no longer just a single shopping event — it has become part of a broader sales extravaganza. With Cyber Monday dominating e-commerce and Travel Tuesday catering to wanderlust, the holiday season is now a crowded marketplace of endless deals.”

Tyler Durden Mon, 12/02/2024 - 07:45