Zero Hedge

California And Its Collapsing Blue-State Democrat Model

California And Its Collapsing Blue-State Democrat Model

Authored by Victor Davis Hanson via American Greatness,

While the media and the new Democrat Party grow hysterical over the Trump counter-revolution, they are missing some of the most revolutionary and insidious changes in American society of the last century.

Much has been written about the collapse of the old orthodox Democratic Party, along with the growing irrelevance and dysfunction of the legacy media, elite universities, and state and federal agencies. But their growing unattractiveness is all related and was not just the result of top-down development.

Rather, current Democrat Party radicalism, street theater, and violence were merely reflections of its own preexisting cultural antipathy toward the middle class. The party is now a pyramidal coalition of the very wealthy and professional classes comprising the capstone, resting atop a vast, expanding bottom of the subsidized and working poor, strapped pensioners and retirees, angry indebted students, 30s-something urban wannabees, impoverished immigrants—including perhaps 30 million here illegally—and, increasingly, trapped residents of a dystopian big-city America.

The collapse of the blue-state/blue-city model and those who work within and promote it reflects the radical environmentalism of the college-educated, as well as an array of high taxes, high crime, endless government regulations, housing shortages, massive homelessness, illegal immigration, critical-legal-theory prosecutors, ethnic and racial chauvinism, defund-the-police city councils, and, most importantly, chronic budget deficits and vast, unfunded pension liabilities and obligations.

In response to this progressive implosion that accounts for Democrat Party unpopularity, under the radar are historic demographic shifts. They reflect two insidious phenomena.

One, the blue-state, urban/professional/college-educated profile has become antithetical to fertility.

No one knows exactly the contributory relative roles to childlessness played by the progressive embrace of abortion on demand or secularism and atheism. Certainly, the fixations on higher education certification, massive student loan debt, years of student limbo, prohibitive housing prices, and a cultural value system that places status, titles, careers, and degrees over children all further promote a declining birthrate.

But in the end, the cause of asymmetrical fertility does not matter: red-state, traditional populations are simply growing, while blue-state fertility remains stagnant.

Second, we are witnessing the greatest internal migration in U.S. history since the post-Civil War era. Millions are leaving California, New York, New Jersey, Pennsylvania, Minnesota, Illinois, and other northern blue states. And they usually head to Florida, Texas, Tennessee, South Carolina, and other red, low- or no-tax states. So large have become the dislocations that conservative red states will in the next decade grab some 10-12 congressional seats away from liberal blue states along with some 10 or so votes in the electoral college.

The trends are not static but occurring at a geometric rate. The upper-middle and professional classes head to states with perceived lower crime, lower taxes, fewer regulations, better schools, and more affordable housing. Meanwhile, those left in blue states to pay the tab for the subsidized poor and expanding social welfare overhead shrink. For these remaining, the burdens per capita surge—in turn feeding even more exoduses.

We also may be witnessing soon the de facto implosion of a once affluent California—its growing poverty already visible in its decaying roads and infrastructure, dangerous and substandard public schools, soaring property crime, overcrowded, dysfunctional, and dangerous health care system, ethnic fragmentation, and the general bankruptcy and medievalism of San Francisco and Los Angeles.

Those left to pay for its escalating social welfare costs and debt service are beginning to lament that the advantages of the state’s climate, beauty, and once upbeat culture are no longer worth the downsides of its costs: big-city homelessness, decayed infrastructure, incompetent government workforce, crime, and general social dystopia.

In California, 50 percent of all births are now paid for by Medi-Cal, which serves 40 percent of the state. And yet the health welfare system is flat broke, nearing $7 billion in the red. California has the highest taxes in the nation at 13.3 percent (plus an additional millionaire’s tax). Its sales and gas taxes are also among the nation’s steepest, while utilities charge the highest gas and electricity rates in the continental U.S.

These disequilibria are increasingly unsustainable.

One percent of Californians pay well over 50 percent of the state’s income taxes—and is leaving in droves. Power is exorbitant, in part due to inefficient solar/wind/green mandates, restrictions on oil, natural gas, nuclear energy, and new hydroelectric production.

In addition, some 4 million—or nearly 25 percent of utility users—simply no longer pay their monthly power bills and are yet usually not subject to cutoffs of power. They in turn must be subsidized by a shrinking number whose rates climb almost yearly.

There are two general rules of California’s liberal, uni-party politics that symbolize the collapsing blue-state model: all know that the open borders and the generous welfare subsidies of the state explain why half the nation’s illegal immigrants flocked to California, almost all in need of massive government aid.

And two, given the political demographics of a minority/majority state, it is political suicide to associate that 50-year massive influx with vast unfunded social service liabilities, poorer schools, rising crime, and the creation of an all-powerful ultra-left-wing government.

The California model addresses inequality not by insisting on legal-only immigration, rapid assimilation, integration, and acculturation of immigrants. It does not acculturate by back-to-basics K-12 schooling to ensure an emerging younger workforce competent in oral and written English, math, and civic education.

Instead, any resulting disequilibria brought about by the sudden vast influx of some of the world’s poorest is explained by systemic racism and unearned “privilege”—and thus to be remedied by DEI therapeutics. Rather than fighting the left to acculturate 27 percent of the resident population that is foreign-born and prepping them to help run a once sophisticated and complex state government, each year hundreds of thousands of exasperated Californians just flee.

Moreover, California is thought to have one of the largest underground economies of the 50 states, likely reflecting that its huge foreign-born and mostly poorer population is struggling economically. In the Central Valley, it is not unusual to see thousands of residents shopping at vast weekend swap meets, eating regularly at local, ad hoc roadside canteens, and buying everything from flowers to bicycles from entrepreneurial vendors that dot almost every busy rural crossroads. Most of these exchanges are not recorded for either sales or income tax purposes and pose a huge loss of revenue for the state.

Another blue-state pathology is the asymmetrical application of the laws. And California again reflects this trend of being the most overregulated and underregulated, the most lawful and lawless state in the nation. Its upper-class coastal elite insists upon the nation’s strictest zoning and green regulations. (Gavin Newsom used the voter-approved multibillion-dollar water construction bond not to build a single reservoir as mandated, but rather to blow up four existing dams and lakes.)

The result makes it almost impossible to build new power plants, housing developments, freeways, dams, reservoirs, aqueducts, or even to either finish or quit the monstrous high-speed rail, multibillion-dollar boondoggle.

Half the state, mostly its poorer and immigrant population, largely seeks to bypass these cumbersome regulations. It is almost impossible to travel through the state’s interior and not see single-family homes with surrounding shacks, trailers, and lean-tos with substandard, illegal wiring, plumbing, and sanitation. Semi-rural homesteads that traditionally housed one family may now include four or five.

The regulatory agencies of the state exempt the poor from their massive violations of housing and building codes. They compensate for their dereliction by redirecting their energies instead to auditing the shrinking number who follow the laws and will pay fines if cited—yet another reason why the more affluent flee California.

I once asked a building inspector who arrived to certify an upgraded solar breaker box whether he was aware that a mere half-mile away, twenty or so people were living in what was once a single-house compound. Sagging Romex wire without conduit was visibly strung to a number of parked trailers, all without toilet facilities. When I asked him why not venture into that complex, he flashed, “I’m not crazy, sir.”

The result is a growing cynicism in California, as in all the blue states. Left-controlled city councils, state legislatures, universities, and executive agencies promote the narrative that the wealthy are greedy, selfish, and ‘don’t pay their fair share.’ The problem with that strategy of blame-gaming the more successful is that it is starting to run out of the more successful. As revenue shrinks and deficits climb, shouting at the increasingly diminishing upper-middle class only makes them more resentful and determined to leave.

In the current conundrum, we have forgotten completely the old themes of a blue-state Democrat Party. The 1996 Democratic National Convention manifesto that spearheaded Bill Clinton’s successful reelection emphasized secure borders, legal-only immigration, tough crime enforcement and punishment, balanced budgets, fiscal responsibility, and “personal accountability.” That agenda today in California would condemn any adherent as a racist, xenophobe, or MAGA fanatic.

In its place, the party became more intolerant, narrower in its cultural emphases, and uninterested in existential crises such as housing, secure borders, power generation, infrastructure, and crime. Without answers or correctives to the damage it inflicted, it instead focused on what was largely seen as irrelevant to the state’s struggling minority populations—LGBT advocacies, transgendered men competing in women’s sports, racial reparations, DEI-mandated programs, and boutique environmentalism.

The result may be that Californians no longer really believe there is a political solution to their crises and fleeing is becoming the only viable option—for those who can afford or are willing to move. Those left are inured to their dogmas that “they”—the allegedly culpable and greedy—will always remain so rich, so selfish, and so always a part of California, California that the government income streams will remain limitless to fund redistribution.

The only mystery is whether other blue states following California’s disastrous lead will pause and pivot, or are also already too far gone to make the necessary adjustments.

In addition, the growing dysfunction and irrelevance of the mainstream media—from network news to the old print conglomerates—of elite universities and of the federal government itself are, in part, due to their location in and symbiosis with the dead-end, blue-state model of culture, economics, and politics.

In sum, America is entering a historic reversal.

The old traditional impoverished South is becoming the engine of American prosperity. The Northern Midwest, the Northeast, and the West Coast—for a century the font of American dynamism—have become stagnant and inert, and are shrinking.

These blue loci survive for a while longer on the fumes of the work of past generations who operated under completely different assumptions and models antithetical to those of the present—and thus are regularly damned by those who squandered their once-rich inheritance.

Tyler Durden Mon, 03/24/2025 - 17:00

Dems Explode Over Leak Of Secret War Plans In Signal Chat: 'Heads Should Roll'

Dems Explode Over Leak Of Secret War Plans In Signal Chat: 'Heads Should Roll'

Jeffrey Goldberg's Monday bombshell piece in The Atlantic has been met with outrage among Congressional Democrats. In the article entitled The Trump Administration Accidentally Texted Me Its War Plans - which reproduces text messages among top Trump national security officials - Goldberg explains that "US national-security leaders included me in a group chat about upcoming military strikes in Yemen. I didn’t think it could be real. Then the bombs started falling."

Among some 18 individuals listed as members of a Signal group that the journalist was 'inadvertently' invited to included Defense Secretary Pete Hegseth, Vice President Vance, national security adviser Michael Waltz, Secretary of State is Marco Antonio Rubio, and Director of National Intelligence Tulsi Gabbard.

Image: Pool/CNP/Sipa USA

Golberg wrote, "What I will say, in order to illustrate the shocking recklessness of this Signal conversation, is that the Hegseth post contained operational details of forthcoming strikes on Yemen, including information about targets, weapons the U.S. would be deploying, and attack sequencing."

The journalist goes on to identify that it was Waltz who initially added him to the group, and that as the conversation unfolded, he was shocked and alarmed that all involved seemingly didn't notice his name was listed in the group. We should note that all of this is also very bizarre because Goldberg is so obviously and rabidly anti-Trump.

The group and thread was initially engaged in a policy conversation on how to restore US and global shipping in the Red Sea, and the question potential public backlash if a bombing campaign on Yemen once again commenced...

From The Atlantic article 

But then, later on March 15 the conversation continued and actually turned to operational planning and then debriefing after execution of new bombing raids.

"According to the lengthy Hegseth text, the first detonations in Yemen would be felt two hours hence, at 1:45 p.m. eastern time," Goldberg recalled. "So I waited in my car in a supermarket parking lot. If this Signal chat was real, I reasoned, Houthi targets would soon be bombed. At about 1:55, I checked X and searched Yemen. Explosions were then being heard across Sanaa, the capital city."

Jeffrey Goldberg's screenshot of the Signal group

    In the wake of the Atlantic author revealing and publishing these messages and more on Monday, National Security Council spokesperson Brian Hughes has offered confirmation on their authenticity.

    "At this time, the message thread that was reported appears to be authentic, and we are reviewing how an inadvertent number was added to the chain," he said in a Monday afternoon statement.

    "The thread is a demonstration of the deep and thoughtful policy coordination between senior officials. The ongoing success of the Houthi operation demonstrates that there were no threats to our servicemembers or our national security," Hughes said.

    "Send a message": the below is among the most interesting moments from the Signal thread released by Goldberg:

    Vance elsewhere is actually the only one that calls the war in Yemen "a mistake" that doesn't advance US interests, but expresses willingness to go along with the consensus

    This high-level confirmation has provoked outrage among Dems in Congress. Below are some examples via Axios:

    • "This is an outrageous national security breach and heads should roll," Rep. Chris Deluzio (D-Pa.), a member of the Armed Services Committee, said in a statement to Axios.
    • He added: "We need a full investigation and hearing into this on the House Armed Services Committee, ASAP."
    • "We can't chalk this up to a simple mistake — people should be fired for this," said Rep. Sara Jacobs (D-Calif.), another Armed Services Committee member.

    But Republicans are by and large shrugging it off. Rep. Don Bacon of Nebraska, another Armed Services Committee member and former Air Force brigadier general, was cited in Axios as saying, "I've accidentally sent the wrong person a text. We all have."

    And more reaction...

    Unfortunately, as yet none of the pushback and anger coming from Democrat leaders has focused on what we see as the real question and actual scandal--waging war in a foreign nation without Congressional approval-- instead, all seem merely focused on the breach or leak aspect itself, involving ultra-sensitive national security conversations. 

    Here's how one prominent geopolitics account on X summarized what's been gleaned from the Signal chat leak..

    So just to recap:

    -They didn’t think the Houthis were a real threat

    -They didn’t think Americans would understand the strikes

    -They did it anyway, to "send a message"

    -And they did it on an unencrypted chat app with a journalist inside the group You cannot make this up.

    This is how wars are started in 2025.

    * * *

    The question remains why? Why would Goldberg (of all people) be added to such a sensitive group chat? Here's one theory that makes sense.

    Tyler Durden Mon, 03/24/2025 - 16:40

    The Last Resort

    The Last Resort

    Authored by James Howard Kunstler,

    "What is the alternative to presidential oversight and management of the agencies listed in this branch of government? They run themselves? That claim means nothing in practice.” 

    - Jeffrey Tucker

    Surely you know the old joke: “What do you call a thousand lawyers at the bottom of the sea?” (Answer: “a good start!”). There’s a reason why lawyers are so broadly despised. Law is humanity’s instrument for creating order out of the terror and chaos of nature, where anything goes. The result of law theoretically, is a civil society, where only the good, true, and right things can go.

    These days, lawyers are hard at work to replace civilized order with the terror and chaos of nature — which is to say, the seeking of raw power: this is what I can do to you! That primal despotism is the motivating engine of the Democratic Party in its terminal phase, a feral, power-seeking monster. It was why, in case you hadn’t noticed, the essential drive of Woke politics was the sadistic pleasure it took in exacting its endless punishments — cancellation, personal ruin, censorship — not correcting alleged injustices against marginalized minorities. And that tells you, by the way, exactly why the J-6 defendants were treated so harshly by the likes of Judge James Boasberg, Tanya Chutkan, and their colleagues of the DC federal district.

    The enabling device for that monstrous power-seeking of the Democratic Party was the colossal racketeering operation they implanted in every corner of the federal government, an insidious process that accelerated during the Obama years, eluded discipline during Trump One — with the many distracting ruses such as RussiaGate — and surged into final overdrive during the perfidious term of “Joe Biden,” America’s first false-front president.

    The racketeering operation was perfectly illustrated in the DOGE’s recent deconstruction of USAID. That agency worked as a gigantic money laundering matrix to pay Democratic Party activists for the sole purpose of maintaining and expanding the party’s power — its ability to push American citizens around, control our lives, tell us how to live, how to think, and, ultimately, in the Covid-19 scam, telling us to take our shots, get lost, and die. Pitifully, a lot of those vaxx victims were the Democratic Party’s own rank and file, which shows you how psychotically suicidal the Democratic Party became.

    By and large, it was conservatives who avoided the vaxxes because they were able psychologically to entertain the evidence that Covid was a nefarious set-up and that, month-by-month, the vaxxes were proving to be both ineffective and harmful. Democrats, in their Woke fugue state, could not do that. Even today, they insist that their vaxx injuries are “long Covid” and would be worse if not for the additional boosters they took. Poor dumb bunnies.

    Mr. Trump was played masterfully in the initial 2020 Covid roll-out by the likes of Dr. Fauci, Deborah Birx, and the faithless Veep Mike Pence who directed the Coronavirus Task Force (and whoever was behind it). The president could not bring himself to oppose or cast doubt on their diktats and to this day he must remain embarrassed about how that all worked out. But he also probably learned to not be fooled again.

    And so, after the fishy 2020 election, and during the disastrous “Biden” years, Mr. Trump had time to lay careful and comprehensive plans for ending the massive racketeering and for restructuring the federal apparatus into a leaner, more efficient, and more lawful enterprise for managing the civil society known as the USA. Which brings us to the present.

    Mr. Trump’s lawfully appointed agent, Elon Musk, and his legally chartered investigative advisory unit, called DOGE, has begun making recommendations for severe cuts in agencies and employees, which have been executed by the lawfully confirmed heads of agencies, and the chief executive himself. Thus, the rapid, systematic disassembly of the Democratic Party’s grift machine and the end of its immense revenue stream. No more USAID and its thousands of NGO money laundromats. No more Department of Education and its Grant-O-Matic depredations in the universities. No more work-from home (but not really) nonsense. No more DEI reverse racism in hiring. No more flooding the swing state voting precincts with illegal aliens. No more stupid proxy war in Urkaine. No more gender pretending chaos. You see how it goes now.

    Also, thus, the Democratic Party’s last resort: the federal judiciary, 235 new judges jammed into office in the twilight weeks of “Joe Biden” (as Senate Minority Leader Schumer bragged on Sunday’s TV talk circuit), plus the ones such as Boasberg, Chutkan, et al., already on the bench, primed to thwart Mr., Trump’s efforts to govern at every turn. They are the Dem’s only remaining lever of power. And they can only be activated by lawyers filing suits against Mr. Trump — hundreds having been filed in the past eight weeks. And these, as you learned in the Friday post here, are directed by attorney lawfare field marshal Norm Eisen, senior fellow at the Brookings Institution, using the many well-paid lawfare lawyers at his disposal.

    In politics, momentous things often happen on weekends. This past Saturday, Mr. Trump released a White House memorandum directing the Attorney General and the Director of Homeland Security “to seek sanctions against attorneys and law firms who engage in frivolous, unreasonable, and vexatious litigation against the United States or in matters before executive departments and agencies of the United States.”

    More specifically, the president’s memo asserts:

    Federal Rule of Civil Procedure 11 prohibits attorneys from engaging in certain unethical conduct in Federal courts. Attorneys must not present legal filings “for improper purpose[s],” including “to harass, cause unnecessary delay, or needlessly increase the cost of litigation.” FRCP 11(b)(1). Attorneys must ensure that legal arguments are “warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.”

    This is the first time that legal discipline has been leveled directly at the lawfare lawyers themselves. (Election-rigging maestro Marc Elias is mentioned by name in the memo.) It means that after eight years of this noxious gamesmanship, they are going to have to start answering for their actions, they will have to lawyer-up on their own account, and they are going discover (the old saying goes) how the process is the punishment.

    Next, if it is not already underway at the DOJ, Mr. Trump must direct AG Bondi to explore the parties financing this lawfare — this “frivolous, unreasonable, and vexatious litigation” — and you should suppose that it has been emanating from the checkbooks of George Soros, Reid Hoffman, and other wealthy seditionists, who, likewise, will have to some serious ‘splainin’ why they should not go prison. One thing for sure: the money for all this is going to dry up.

    Tyler Durden Mon, 03/24/2025 - 16:20

    Judge Maintains Blocks On Trump Admin's Use Of Alien Enemies Act For Deportations

    Judge Maintains Blocks On Trump Admin's Use Of Alien Enemies Act For Deportations

    Authored by Sam Dorman via The Epoch Times,

    A federal judge in Washington has denied the Trump administration’s request to remove two orders blocking the administration’s ability to deport members of a Venezuelan gang under the Alien Enemies Act.

    In an opinion on March 24, U.S. District Judge James Boasberg said he had jurisdiction to adjudicate the issue and that the plaintiffs were likely to succeed in their argument that they are entitled to an individualized hearing to determine whether the Alien Enemies Act of 1798 applies to them.

    Boasberg also said the plaintiffs who challenged the Trump administration’s action couldn’t be deported until a court had ruled on the merits of their challenge. He noted that they disputed that they were, in fact, members of the Tren de Aragua terrorist group.

    Boasberg’s decision follows a contentious hearing on Friday, when he said the administration had used “intemperate” and “disrespectful” language.

    At one point, he advised Department of Justice (DOJ) attorney Drew Ensign to ensure that his team at the DOJ retained a lesson about their reputation and credibility being the most valuable treasure they possess. Boasberg and the DOJ have clashed in recent days over the nature of his authority and, in particular, whether an oral order he issued on March 15 was binding.

    In filings last week, the DOJ described Boasberg’s orders as “an affront to the President’s broad constitutional and statutory authority to protect the United States from dangerous aliens who pose grave threats to the American people.”

    Another filing on March 19 showed the administration suggesting that the case had “devolved into a picayune dispute over the micromanagement of immaterial factfinding.”

    “In a series of orders this Court has requested the Government to provide it details about the movements of aircraft outside of the United States and interactions with foreign nations which have no bearing on any legal issue at stake in the case,” it said.

    Trump, meanwhile, has called for Boasberg’s impeachment. Chief Justice John Roberts appeared to respond just hours later in a statement last week.

    “For more than two centuries, it has been established that impeachment is not an appropriate response to disagreement concerning a judicial decision,” Roberts said in a statement provided to The Epoch Times.

    On March 24, the District of Columbia U.S. Circuit Court of Appeals is expected to hear oral arguments in the case. It’s just one of many testing presidential authority and making its way through the courts under the Trump administration.

    Tyler Durden Mon, 03/24/2025 - 15:10

    Devaluing The US Dollar: How To Make America Poorer Again

    Devaluing The US Dollar: How To Make America Poorer Again

    Authored by Daniel Lacalle,

    In recent days, we have read numerous articles about a possible agreement between the US administration and its main trading partners to devalue the US dollar. It has been named “The Mar-A-Lago Accord”, a concept inspired by the Plaza Accord of 1985, which aimed to devalue the US dollar to address trade imbalances. That plan failed.

    The objective, according to the financial media, would be to weaken the US dollar, boost US export competitiveness, and rebalance global trade. Another proposal involves restructuring US debt by swapping existing obligations for longer-term bonds, such as 100-year Treasury bonds, to ease fiscal pressures. However, this would be a dangerous and potentially counterproductive idea.

    The Mar-A-Lago Accord concept starts from two wrong premises, which are to believe that US exports are not large enough due to a strong currency and that debt is too high because of a robust US dollar. Both are simply incorrect.

    US exports are relatively low compared to other nations, at 11% of GDP, compared to 42% for Germany, 29% for the UK, or 21% for Japan, for example. However, the main reasons for the US’s relatively small exports have nothing to do with the currency. The United States is an enormous market, and domestic businesses do not need to export to strengthen their earnings and sales. It is also rich in natural resources, which makes it relatively self-sufficient, reducing the need for imports and, by extension, limiting the incentive to export. The United States is the largest oil and gas producer in the world, and the estimated value of its natural resources is approximately $45 trillion. Furthermore, with 331 million people in 2023, consumer spending accounts for approximately 70% of the U.S. GDP.

    The United States is one of the largest markets in the world, but more importantly, it is the richest. Median individual consumer spending is much higher than in countries like China or India, and the top third of the income distribution accounts for about 56% of spending. At $5 trillion in 2024, it is the largest retail market in the world. Furthermore, the United States economy is mostly a services economy. Services, including professional and business services, are more difficult to export, and the size and wealth of the domestic market make it unnecessary to sell abroad in most cases.

    Manufacturing in the United States is not small, at 10% of GDP, due to a strong domestic currency but due to the burdens imposed by regulation on industries. Furthermore, artificially lowering costs with a weaker currency is a losing formula, as there is always someone else willing to destroy their currency faster.

    US manufacturing cannot compete abroad by destroying the purchasing power of the currency. It means immediate poverty for Americans. It must compete on value-added products, as the technology and other sectors have proven.

    Swapping existing short-term debt for long-term bonds is also a terrible idea because it would create the incentive for the government to increase borrowing and not address its structural spending problem. Restructuring debt by forcing an artificial depreciation of the US dollar would also scare bond investors, who would rightly fear that other administrations would resort to the same trick in the future. Why would you buy a 100-year bond from a nation that may devalue its currency regularly every time those debt challenges come back? This proposal is not a tool to keep the US dollar as the world reserve currency but a guarantee of losing its global status.

    None of the United States’ export and debt challenges would improve with a devaluation of the US dollar, and a crucial one would deteriorate: inflation.

    The United States already suffers elevated inflation due to the wrong fiscal and monetary policies. The cumulative inflation of 24% suffered by Americans in the past four years came precisely from the interventionist measures on the quantity and price of money, bloating government spending and debt, which led to a decades-high record money supply growth and, with it, the current inflationary pressures. With a devaluation, prices would immediately rise in US dollars, and the purchasing power of salaries would decline.

    Devaluation does not improve productivity or industrial added value, so any decline in costs would translate to the impoverishment of American workers and savers.

    Devaluing is a de facto default and the manifestation of the insolvency of a nation.

    You cannot expect to devalue the currency while simultaneously controlling inflation and debt. Devaluation makes the government abandon the necessary adjustment to its spending habits, and the debt sustainability problem resurfaces in a short period of time. Real wages suffer, real consumption weakens, the entire economy is made artificially poorer in US dollars as inflation rises, and only crony sectors and the government benefit because they can perpetuate their inefficiencies and imbalances in an increasingly worthless currency.

    Devaluing is not a solution to indebtedness. It incentivises more borrowing in a government that is already addicted to spending. Furthermore, it worsens the crowding-out effect, as government debt displaces private sector credit, which becomes more expensive as the currency weakens and inflation rises.

    If devaluing the currency was a real measure of competitiveness, Argentina and Venezuela would be the most competitive nations on the planet.

    Devaluing zombifies a few uncompetitive crony sectors and a fiscally irresponsible government at the expense of making everyone else poorer.

    A strong US dollar reduces inflationary pressures and keeps interest rates low. Both effects are positive for savers, workers, and families as the private economy strengthens and real wages improve. A strong US dollar is also positive for the government and companies. Capital and foreign direct investment flow to the US, and corporations and government borrowing costs are kept low by rising demand. Corporations can also make international acquisitions at a cheaper cost, both in lower rates and currency adjustments.

    A sound monetary policy and a strong currency are also essential to keep the world reserve currency status. If a small proportion of the US economic sectors suffer from a strong dollar, it is a price worth paying in exchange for being the world’s richest nation, with the most-used currency, a reserve of value, and a worthy investment for the rest of the world.

    The greatest mistake that can be made by the Trump administration is to follow beggar-thy-neighbour devaluation policies to disguise a structural government imbalance.

    Devaluation is not a tool for exports. It is a tool for cronyism and always ends with the demise of the currency as a valuable reserve.

    The United States problems are complex and there is no easy fix. It needs to address its excessive regulation and taxation that burden manufacturers, but it also needs to curb government spending and the endless monetary easing that erodes the purchasing power of salaries and makes families and small businesses suffer.

    If the current administration works to defend American jobs, workers’ wages, and families, a strong US dollar is proof that it is achieving its goals.

    A strong economy does not need a weak currency.

    Tyler Durden Mon, 03/24/2025 - 13:10

    So Much Winning: Hyundai Latest Company In A Long Line To Announce Billion Dollar Investments In U.S.

    So Much Winning: Hyundai Latest Company In A Long Line To Announce Billion Dollar Investments In U.S.

    Hyundai Motor Co. plans to invest $20 billion in the U.S., a move President Trump will highlight during a White House event with Louisiana Governor Jeff Landry, according to Bloomberg.

    A portion of the investment will fund a new steel mill in Louisiana, expected to employ 1,500 workers and supply Hyundai and Kia's American EV production. The announcement comes amid growing trade tensions, with Trump set to roll out reciprocal tariffs on April 2 targeting countries he deems unfair to U.S. trade interests.

    Hyundai’s decision mirrors a broader trend of foreign companies increasing U.S. production to avoid Trump’s escalating tariff threats.

    The Bloomberg article notes that the president has already imposed 25% tariffs on steel and aluminum and has hinted at new levies on sectors like autos, semiconductors, and pharmaceuticals. South Korea, labeled a trade abuser by Trump, may be among the nations targeted, though officials have yet to release a final list.

    Trump’s aggressive tariff agenda has injected uncertainty into global markets and rattled domestic industries, particularly autos and steel. While domestic steelmakers may see short-term gains, analysts warn that high borrowing costs, inflation, and weakening demand could dampen the benefits.

    Meanwhile, Trump has offered temporary relief to automakers on tariffs from Mexico and Canada, underlining his broader goal to localize supply chains and reduce reliance on foreign imports.

    Recall, in recent days, the Trump team is racking up victories related to bringing investment back to the United States. Among them, Rolls-Royce also announced it was going to be ramping up production in the U.S., Yahoo Finance/The Telegraph reported.

    The company, which employs 6,000 people across 11 American sites, is expediting a review that could lead to hiring more U.S. workers and expanding North American operations to avoid the brunt of rising protectionism. Insiders say the firm is "tipping the balance" toward the U.S., aligning—perhaps reluctantly—with Trump’s push to revive American manufacturing through aggressive trade policies.

    Meanwhile, the UAE has pledged to invest $1.4 trillion in the U.S. over the next decade, following a meeting between President Trump and an Emirati official, Forbes reported.

    The deal, which includes funding for AI, semiconductors, and U.S. manufacturing, marks a major expansion of existing ties and follows Emirati billionaire Hussain Sajwani’s earlier $20 billion commitment to U.S. data centers.

    Tyler Durden Mon, 03/24/2025 - 12:50

    "Tread Carefully": Pam Bondi Issues Warning To Unhinged Rep. Jasmine Crockett Over Musk "Takedown"

    "Tread Carefully": Pam Bondi Issues Warning To Unhinged Rep. Jasmine Crockett Over Musk "Takedown"

    We certainly did not have a member of Congress conspiring with radical far-left NGOs to sabotage the most made-in-America car company and critical to retirement and pension funds for millions of Americans on our 2025 bingo card. 

    But here we are, and far-left Congresswoman Jasmine Crockett (D-TX) joined a "Tesla Takedown" teleconference last week, laughing and rooting for Tesla and Elon Musk's demise. Other revolutionaries on the call described how they wanted to "kill the Tesla brand" and "drive down the stock price" to push Tesla "into a death spiral."

    Now Attorney General Pam Bondi is getting involved, warning Crockett to "tread very carefully" following her support for the Tesla Takedown.

    "She is an elected public official, so she needs to tread very carefully because nothing will happen to Elon Musk, and we're going to fight to protect all of the Tesla owners throughout this country," Bondi said on Fox's "Sunday Morning Futures."

    Bondi's warning to the unhinged Democrat comes days after her appearance on the Tesla Takedown teleconference:

    Crockett's alliance with Tesla Takedown is alarming, considering the Soros-funded non-profit Indivisible is preparing a multi-city assault on Tesla service locations nationwide by the end of the month.

    There have been far-left terrorist attacks on Tesla service centers, showrooms, Supercharging networks, and vehicles that paint the Democratic Party as in disarray and resorting to communist revolutionary tactics.

    Polling data for the party has collapsed, while the latest ploy by the party to improve optics was entirely disproven to be "inorganic" by GPS data. 

    The American people are finally getting to see the real Democratic Party—filled with hate and violence as its revolutionaries attack Tesla, all because the owner, Elon Musk, is uncovering massive fraud and waste by the Deep State. 

    Remember when Democrats wanted to defund everything after George Floyd? Yet suddenly, now they don't. 

    Bondi ended with: "Domestic terrorism is going to come to a stop in this country." 

    Wonder who Crockett is friends with...

    *  *  *

    Tyler Durden Mon, 03/24/2025 - 12:10

    Last Looks: Mapping The Staggering Growth Of The US Government

    Last Looks: Mapping The Staggering Growth Of The US Government

    Submitted by OpenTheBooks

    Last month Open the Books auditors took a closer look at the Federal Register – the official publication of the U.S. government. It publishes every new rule and regulation, every Executive Order and Congressional hearing, and much more. It should be a reliable encyclopedia of government, but we found at least 75 of the 441 entities listed were defunct – defunded, disbanded, renamed, merged with another entity, completed their mission, etc.

    We all know waste is rampant – but this was more evidence that federal recordkeeping is also a big mess. The scope and complexity of the task before DOGE became even clearer in this context.

    So we set out to catalog every agency that reports data – not just their current costs, but the size of their staffs and spending stretching back decades. The result will be the clearest picture yet of government’s growth over time.

    We released the two batches of data in the ensuing weeks, tracking spending and headcounts for big Cabinet-level agencies like the Departments of Defense, Homeland Security, Education, and State; as well as more obscure, independent ones like the Administrative Conference of the United States.

    At agency after agency, we found spending outstripped growth of the staff and even inflation – often many times over.

    THE FINAL BATCH

    This week’s batch of agencies revealed more of the same problematic trend and the reason DOGE is needed – sure, headcounts may be flat or growing modestly, but spending continues to soar much further and faster than even inflation. In multiple instances, upticks in spending since 2021 also appear to comport with key priorities of the Biden administration.

    Click here to view the full list of agencies we’ve assessed. And keep reading for one last set of remarkable examples.

    The list now includes every Cabinet agency – this week we’ve added the Departments of Housing & Urban Development, Agriculture (USDA), Treasury and Veterans’ Affairs – as well as the Executive Office of the President. Newly added independent agencies include National Foundation on the Arts and Humanities, Council on Environmental Quality and the Social Security Administration.

    BY THE NUMBERS Department of Agriculture

    The US Department of Agriculture (USDA) is a perfect example of the staff vs. spending pattern. Since 2000, employee counts shrank from 106,715 to 92,072 in 2024. But annual spending skyrocketed in the same period: in 2000, it was $75.07 billion; by 2024, $254.78 billion – 339% higher.

    National Foundation the Arts and Humanities

    This agency includes the National Endowment for the Arts, National Endowment for the Humanities and the Institute for Museum and Library Sciences.

    Headcount has bounced back and forth between 416 and 455 since 2000, settling at 455 in 2024. But outlays have predictably soared, particularly during the Biden administration. In 2000, NEAH was spending $406 million annually; by 2024, it was spending $998 million, more than double.

    Previously Open the Books reported on off-the-wall podcasts that were funded using grants from these endowments. Just a few of many examples:

    • Subtitle ($227,420 from the National Endowment of the Humanities), about linguistics, has an episode called “the little pronoun that could” about a new gender-neutral pronoun being introduced in Swedish.

    • Sacred & Profane ($199,663 from the National Endowment of the Humanities), about American religious life, has an episode on how “Satanists play an important role in American religious and political life, showing us how ideas about religion, pluralism, and the separation of church and state are changing in the U.S.”

    • CalArts Center for New Performance Podcast ($20,000 from the National Endowment for the Arts), about new artistic works from UCLA, has an episode on “the specter of Emmett Till’s murder to create a nightmarish reverie on white violence and silence in America.”

    • Artists and Hackers ($10,000 from the National Endowment for the Arts), about the intersection of art and technology, has episodes on “Erotic Ecologies and the Fluid Relationships Between Humans and AI,” and an “AI chatbot experiment trained on erotic literature, feminist and queer theory, and an ethics of embodiment.”

    FURTHER READING: US taxpayers forked over $8.5M for government-produced podcasts: ‘Left-wing agitprop’ | New York Post | February 21, 2024

    Veterans Affairs

    The Department of Veterans’ Affairs is a somewhat unique example. Its employee ranks have understandably grown significantly since 2000, as the United States engaged in multiple kinetic wars in Iraq and Afghanistan. In 2000, there were 219,415 employees; by 2024 there were 486,522 employees. The VA had more than double its employee headcount. Over the same period, though, spending grew from $47.04 billion to $345.98 billion. Annual spending had grown 735.5% higher.

    Again, in the context of war injuries this may be completely explicable. But the VA continues to report funding shortfalls that could interrupt benefits payments to veterans in need. Congress approved an additional $3 billion in September, before the VA found it had $5 billion to carry over from the prior fiscal year which could have covered the issue. They further predicted a need for $12 billion more taxpayer dollars to be made whole for 2025.

    As reported by the Military Times, the confusion and worry has sparked criticism over VA bookkeeping and promises of closer oversight in the future.

    “VA’s inability to accurately forecast its budget needs is unacceptable,” said Rep. John Carter, R-Texas, chairman of the Military Construction and Veterans Affairs Subcommittee, part of the House Appropriations Committee.

    According to the Times, “He blasted senior leaders for stoking ‘fear that benefits and pensions would be interrupted’ and demanded better transparency in future budget requests.”

    By December, the $12 billion request had also been revised, leading Rep. Derrick Van Orden to criticize the VA for “fearmongering statements.”

    There were also troubling reports that the Biden administration had mismanaged taxpayer dollars by having some migrant medical care bills processed through the VA’s Financial Service Center for reimbursement. In effect, staff and resources were being diverted from an already-strapped VA to those in detention by Immigration and Customs Enforcement (ICE).

    “The Department of Veterans Affairs is not a tool to be wielded for political benefit, but a mechanism to protect and care for the brave servicemembers of this great nation,” Sen. Joni Ernst and her colleagues said in an August 2024 letter to then-Secretary Denis McDonough.

    Ernst, who has established herself as an advocate for veterans getting the care and benefits they’re owed, introduced legislation on the shortfall in September. The Protecting Regular Order (PRO) for Veterans Act would create a three-year requirement for the VA to “submit quarterly, in-person budget reports to Congress. Additional financial shortfalls would result in withholding bonuses for senior VA and Office of Management and Budget (OMB) personnel.”

    DOGE should examine VA bookeeping and operations, identifying efficiencies that ensure veterans get what they’re owed amid unprecedented use of benefits and medical appointments.

    Council on Environmental Quality

    This advisory council is part of the Executive Office of the President and has consistently maintained a tiny presence on the White House campus. From 2000 through 2020, there were between 1 and 3 members each year. But during the Biden administration, the number immediately started to go higher: 4 in 2022, 9 in 2023, and 17 in 2024. That’s more than five times as many staff in relatively short order.

    Spending also jumped after having been on a steady downward trajectory. In 2000, CEQ spent $22M; in 2020 it had fallen to $12 million. But by 2023 it had exploded to $45 million – and then $51 million in 2024! Since 2000, annual spending had more than doubled. But since 2020, it has more than quadrupled!

    This may be reflective of the Biden administration’s focus on “environmental justice” and “Green New Deal” style policy proposals, which received enormous funding for grantmaking through the Environmental Protection Agency via the Infrastructure Bill and the so-called Inflation Reduction Act.

    The Council on Environmental Quality advises the president on environmental policy issues both nationally and internationally, and prepares on annual report on environmental quality to Congress. It was created as part of the National Environmental Policy Act (NEPA) of 1969.

    CONCLUSION

    Time after time, at agency after agency, we see spending skyrocketing since 2000, even when headcounts grew modestly and stayed flat. In this most recent batch of examples, we also saw Biden administration spending priorities reveal themselves through the outlays at key agencies. In particular, the VA faces increasing scrutiny for its delivery of care and benefits that won’t go away as spending and staff grow to unprecedented levels.

    In the case of the National Foundation of the Arts and Humanities, it may already be in the crosshairs of DOGE. President Trump signed an executive order to slash the Institute for Museum and Library Services; he placed restrictions on grants related to “gender ideology” from the National Endowment for the Arts; and National Endowment for Humanities Chair Shelly Lowe left the fund “at the Direction of President Trump,” according to a press release.

    Even as Open the Books has documented over 200 federal agencies by headcount and annual outlays – with great historical context – there’s still more to be uncovered.

    The Federal Register lists 441 agencies, of which we found at least 75 were defunct. On top of that, there are a number of funded-only agencies. That means that although there are no federal employees at those entities, they operate using taxpayer dollars, so we still collectively pay for their activities.

    This is yet another category of spending to tackle in future reports and for DOGE to scrutinize as it goes about its project of restoring efficient, effective government for taxpayers.

    Tyler Durden Mon, 03/24/2025 - 11:50

    Roundup Weedkiller Verdict: Georgia Jury Orders Bayer To Pay $2 Billion

    Roundup Weedkiller Verdict: Georgia Jury Orders Bayer To Pay $2 Billion

    German agricultural and pharmaceutical giant Bayer fell in European trading after a Georgia jury ordered Monsanto's parent company to pay $2.1 billion in damages to a man who claimed the company's Roundup weed killer caused his cancer. 

    Late Friday, the State Court of Cobb County, Georgia, reached a verdict in favor of the plaintiff, John Barnes, who filed a lawsuit against Monsanto in 2021, seeking damages related to his non-Hodgkin's lymphoma. 

    "It's been a long road for him … and he was happy that the truth related to the product (has) been exposed," Barnes' attorney Kyle Findley stated, adding the verdict is an "important milestone" after "another example of Monsanto's refusal to accept responsibility for poisoning people with this toxic product."

    Bayer acquired Monsanto in 2018 and has since been battered with dispute claims that Roundup's key ingredient, glyphosate, causes cancer. The German company has set aside over $16 billion to settle the lawsuits. 

    Bayer responded to the penalties awarded that include $65 million in compensatory damages and $2 billion in punitive damages for the plaintiff:

    We disagree with the jury's verdict, as it conflicts with the overwhelming weight of scientific evidence and the consensus of regulatory bodies and their scientific assessments worldwide.

    We believe that we have strong arguments on appeal to get this verdict overturned and the excessive and unconstitutional damage awards eliminated or reduced.

    Earlier, Goldman's James Quigley, Rajan Sharma, and others noted that this is the first case in Georgia, "typically awards are reduced on appeal."

    Here's more from the analysts:

    Late on Friday night (post EU market close), a jury ruled against Bayer in the Barnes Roundup case, leading to an award of $2.065bn (being $2bn punitive damages and $65m compensatory damages - see here). While each case is different, and this is the first case in Georgia (see Exhibit 1), typically awards are reduced on appeal. Bayer intends to appeal the judgment. As a reminder, at the end of 2024, the provision related to glyphosate related litigation was $5.9bn.

    Bayer has been engaging with policymakers around the force of labeling regulations in the US (see here). Recently, in Georgia, both the state House and Senate approved SB 144 which ensures that any pesticide registered with the US EPA and sold under a label consistent with EPA standards, is sufficient to satisfy state label warning requirements. Bayer believes that this should prevent such state based claims from moving forward in court.

    In addition, we also note that Bayer was recently granted an extension on the filing of the Johnson case with the US Supreme Court until April 18, 2025 (see here). As discussed in our 2025 outlook note for Bayer (see here), we continue to see positive risk/ reward into a potential Supreme Court filing/ acceptance by mid-25, with a final outcome expected by the end of the 2025/26 Supreme Court session.

    Bayer glyphosate trial record

    Quigley has a "neutral" rating on Bayer shares in Germany with a 28 euro 12mo price target:

    Valuation: Our DCF is €30 per share which assumes a 10.8% WACC and TV growth rate of 1.5%, while our multiple based valuation is €28 per share, leading to our 12-month target price of €29 per share. Our target price suggests Bayer trades on c.6x 2026E P/E, with a 2026-29E PEG of around 1.0x which is below the sector average, but we think this is justified given uncertainty around the pipeline and the litigation overhang. We are Neutral rated.

    Upside/downside risks:

    1. Litigation outcomes (SCOTUS - glyphosate, Washington Supreme Court - PCB).

    2. Success of clinical development pipeline and its ability to offset patent expirations.

    3. High soft commodity price environment leading to sustained pricing power in the Crop Science division.

    4. Slower-than-anticipated realisation of the cost and operational benefits form the new DSO operating model.

    Bayer's shares are down about 5% in European trading. Zooming out, shares are trading at 2004 lows....

    . . . 

    Tyler Durden Mon, 03/24/2025 - 11:30

    Michael Saylor's Strategy Surpasses 500,000 Bitcoin With Latest Purchase

    Michael Saylor's Strategy Surpasses 500,000 Bitcoin With Latest Purchase

    Authored by Zoltan Vardai via CoinTelegraph.com,

    Michael Saylor’s Strategy has acquired over $500 million worth of Bitcoin as institutional interest and exchange-traded fund (ETF) inflows make a comeback.

    Strategy acquired 6,911 Bitcoin for over $584 million between March 17 and March 23 at an average price of $84,529 per coin, according to a March 24 filing with the US Securities and Exchange Commission (SEC). 

    Source: US SEC

    Following the latest acquisition, the company now holds more than 500,000 Bitcoin, with a total of 506,137 Bitcoin acquired at an aggregate purchase price of roughly $33.7 billion and an average purchase price of approximately $66,608 per Bitcoin, inclusive of fees and expenses.

    The milestone comes a day after Strategy co-founder Michael Saylor hinted at an impending Bitcoin investment after the company announced the pricing of its latest tranche of preferred stock on March 21.

    Source: Saylortracker

    The preferred stock was sold at $85 per share and featured a 10% coupon. According to Strategy, the offering should bring the company approximately $711 million in revenue scheduled to settle on March 25, 2025.

    Saylor’s Strategy buys the dip despite global tariff concerns

    Strategy, the world’s largest corporate Bitcoin holder, continues buying the dips despite widespread investor fears of a premature bear market.

    Strategy’s latest investment comes amid global trade war fears, which analysts say could weigh on both traditional and digital asset markets at least through early April.

    Despite a multitude of positive crypto-specific developments, global tariff fears will continue to pressure the markets until at least April 2, according to Nicolai Sondergaard, a research analyst at Nansen.

    BTC/USD, 1-day chart. Source: Cointelegraph/TradingView

    “I’m looking forward to seeing what happens with the tariffs from April 2nd onward. Maybe we’ll see some of them dropped, but it depends if all countries can agree. That’s the biggest driver at this moment,” the analyst said during Cointelegraph’s Chainreaction daily X show on March 21.

    Risk assets may lack direction until the tariff-related concerns are resolved, which may happen between April 2 and July, presenting a positive market catalyst, he added.

    US President Donald Trump’s reciprocal tariff rates are set to take effect on April 2 despite earlier comments from Treasury Secretary Scott Bessent indicating a possible delay in their implementation.

    Tyler Durden Mon, 03/24/2025 - 11:10

    Trump: Any Country Buying Venezuelan Oil Slapped With 25% Tariff

    Trump: Any Country Buying Venezuelan Oil Slapped With 25% Tariff

    President Donald Trump is imposing a 25% 'Secondary' tariff on Venezuela, and a 25% tariff on "any Country that purchases Oil and/or Gas from Venezuela," payable to the United States "on any Trade they do with our Country."

    The tariffs, which would go into affect April 2 should Trump implement them, would cut a major source of revenue for the Maduro government - while ratcheting up pressure on China, a major purchaser of Venezuelan crude that's already looking at 20% tariffs under Trump.

    Trump cited "the fact that Venezuela has purposefully and deceitfully sent to the United States, undercover, tens of thousands of high level, and other, criminals, many of whom are murderers and people of a very violent nature," in his 25% tariff on Venezuela, and says the additional 25% tariff punishing anyone buying oil or gas will begin on April 2nd.

    Needless to say, the news sent oil immediately higher in Monday trade.

    The move would particularly affect China, which has been a major purchaser of Venezuelan crude - and it's unclear i) if China will agree to be impacted by unilateral tariffs and ii) how the US would enforce them against China.

    Venezuelan crude exports had risen to a five-year high in February before the Trump administration said it was forcing Chevron to wind down its operations by April 3. Chevron had sought more time to conclude operations with Venezuela's state-owned Petroleos de Venezuela. In canceling the deal, Trump  announced in a post on Truth Social that he was "reversing the concessions" of the "oil transaction agreement, dated November 26, 2022."

    These were concessions enacted by his Democratic predecessor Joe Biden, which had allowed Chevron Corp - active in the Latin American country for a century - to produce and sell oil in Venezuela despite sanctions.

    The news comes one day after Venezuela agreed to resume accepting US deportations of illegal immigrants, and is sure to escalate tensions with the Maduro government as Trump seeks to crack down on the Venezuelan gang, Tren de Aragua.

    The largest buyers of Venezuelan oil include US refiners, which rely on the Latin American nation's heavy grade of crude. Said US refiners include Valero Energy Corp, Phillips 66, PBF Energy and Chevron’s Pascagoula facility in Mississippi.

    Venezuela had the world’s largest proven crude oil reserves in 2023 with approximately 303 billion barrels, accounting for approximately 17% of global reserves, according to US government data. Despite the sizable reserves, Venezuela produced about 875,000 barrels a day in 2024, according to OPEC data, or about 0.9% of total global oil production in 2024. -Bloomberg

    That said, Trump didn't detail any plans to slap tariffs on sales to the US, which means crude imports from the country could continue as-is.

    What's going on here?

    * * *

    Click link & start tracking your health with simple at-home test kits...

     

    Tyler Durden Mon, 03/24/2025 - 10:55

    In Deepest Everything

    In Deepest Everything

    By Michael Every of Rabobank

    Welcome to ‘In Deepest Everything’.

    Heathrow airport had to shut down because of a single point of failure fire in an electricity substation. If you think that’s the only major G7 infrastructure held together by string at a time when serious people are talking about war and sabotage, I have a bridge we don’t have --and need-- to sell you: DM = EM. Also, as a report says everyone in the UK will be worse off by 2030, as the government now plans huge spending cuts to try to balance the budget as growth stalls. And as PM Starmer prepares another attempt to get a Coalition of the Willing together in Ukraine, a former speech-writer for Japanese PM Abe floats his country buying one of the UK aircraft carriers they can’t afford to keep at sea.

    There are more Trump tariff rumors just over a week out from April 2 “Liberation Day”. It seems sectoral and reciprocal ones won’t stack, and as already stated, reciprocal won’t be high for everyone - just those running large bilateral U.S. trade surpluses, where the market impact will be largest. But it’s all still very fluid. Indeed, Trump also reportedly floated the idea of the US becoming an associate member of the Commonwealth if King Charles asks. That’s certainly a potential bridging device to get the Anglosphere into one economic entity, as Nouriel Roubini backs the US, Canada, and Mexico embracing an economic union (add a common external tariff vs China and you aren’t far off).

    The White House has revoked the legal status of 530,000 Cubans, Haitians, Nicaraguans, and Venezuelans, who must now all self-deport; as it also sold 1,000 Gold Card visas priced $5m each in one day, according to Commerce Secretary Lutnick.

    Trump family members are planning a trip to Greenland, and some Danes call for them to be barred, as VP Vance says, “Denmark, which controls Greenland, is not doing its job, it’s not being a good ally. If that means that we need to take more territorial interests in Greenland, that is what President Trump is going to do. Because he doesn’t care about what the European scream at us.”

    Trump also launched the Boeing F-47 6G fighter jet, and says many allies want to buy it - but ‘will get a version around 10% worse than the U.S. one, because maybe they won’t always be allies’. Which is long-run US policy – you just don’t say it aloud. And that’s as US Secretary of Defence Hegseth ran a poll on renaming the Department of Defense to the "Department of War”.

    Useful, perhaps, as following bellicose comments from Iran’s supreme leader, the US orders a second carrier strike group to the Middle East from Asia, and Iran reportedly militarizes parts of the Strait of Hormuz - a gun-to-own-head threat that could disrupt global energy markets hugely, via higher insurance premiums even before any firing starts. The US is also now insisting on a full Iranian dismantlement of its nuclear program, not just scaling back of uranium enrichment; as Iran and Russia cooperate on producing electronics. How’s that Noxin strategy going?

    Nearby, the UAE joins Saudi with a pledge of $1.4 trillion multi-year investment in the US, as both Israel and Turkey enter political crises, the latter banning sort selling, and local sources in the former saying “friction” with Turkey is now inevitable in Syria.

    China is floating itself as a Ukraine peacekeeper, which could force Europe into some uncomfortable choices. And underlining how talk is cheap and fast rearmament isn’t, Sweden —one of Europe’s more credible military forces— sees its planned 2028 timeline for two new submarines, which had already incurred a five year delay, slip to “later than 2031”. Add a more bellicose US to the mix and see what the timeline slips to; as France will consider the economic ‘nuclear option’ vs the US, the EU Anti-Coercion Instrument. If that were to happen, it would have an explosive impact on US-EU relations and on markets; as it also foils an Islamist terror attacking set to use explosive drones.

    Some European central bank officials reportedly worry they can no longer rely on Fed swap lines in a crisis. Or rather, they can probably no longer rely on *apolitical* swap lines. There will be a quid pro quo for the dollars pro quids & euros. Those who don’t understand how reliant Europe is on these facilities, even if rarely used, will shrug. Those who get the geopolitical reality will duck and cover.

    The WSJ claims China is considering taking a page out of Japan’s old playbook with voluntary export restraints, compensated for by price hikes on what it can sell. Which would be inflationary abroad and deflationary for much of China, and which saw Japan blow a property bubble to compensate - China already got there, and reversed course. China also says it’s prepared for “external impacts that may exceed expectations” and will open up more sectors of the economy to international investors; as it also reveals a new deep sea cable cutting device that could threaten global communications.

    The FT notices “ships are the new chips”, amid warnings of a “trade apocalypse” as the USTR holds public sessions today over proposed port fees for Chinese-built and operated ships in fleets of those who make calls in the U.S., and on export quotas for U.S. exports on U.S.-flagged, crewed, and —soon— built ships. See In Deepest Ship for more, and note this would both hit short-haul traffic the hardest, and imply ships will make fewer port calls, bringing us back to ‘To Big to Sail’ logistical crunches we described back in 2021 as presaging a spike in inflation.  

    The also FT worries the US is losing its “exceptionalism”, as stocks and the dollar fall in tandem. Have they seen what some big EM are doing – like Indonesia, Turkey, and India?

    And Bloomberg says, “Don’t fight the Treasury” is the new mantra for some. You mean the Fed is less relevant in a geopolitical world? You mean there might be a correlation between a US admin embracing radical economic statecraft and the key market pivot point they openly say they are now focused on? “I’m shocked, shocked there is gambling going on in here.”

    Any one of these stories above could fill a Daily or a Weekly or a Monthly given the market implications: and now we get a full daily with just the barest reference to each of them. 

    Tyler Durden Mon, 03/24/2025 - 10:45

    Trump Vs The Judges: Judicial Treachery & The End Of Democracy

    Trump Vs The Judges: Judicial Treachery & The End Of Democracy

    Authored by Stephen Soukup via American Greatness,

    Democracy dies in darkness... or so the Trump-era Washington Post would have us believe. That’s a nice-sounding sentiment (and one that should have applied to the paper and its reporting long before Donald Trump arrived in the White House), but it’s also trite and naïve. It is far closer to the truth to say that democracy dies out in the open, in the daylight, right in front of our faces, and with the approval of most of the people working at The Washington Post. In reality, democracy dies in the courtrooms and judges’ quarters of our nation.

    As the Trump Administration is thwarted in its efforts to cut federal spending, bloat, and waste time and again by activist judges, the people of the country must understand what is going on and what it likely says about the nation’s future. These judges—most of whom were appointed by Democratic presidents Clinton, Obama, and Biden—have taken it upon themselves to make policy and to engage in political maneuvering to spare the political status quo the fate for which the American people voted last November. 

    Unironically and unapologetically, they are undoing the will of demos, purportedly to save democracy.

    Interestingly, the Democrats who cheer the activist judges and their rulings are open and unremorseful about their overt injection of politics into the system of judicial review. Chuck Schumer, the Senate Minority Leader, crowed to PBS “Newshour” this week that he and his fellow Democrats are responsible for “saving democracy” because they intentionally packed the courts with judges that shared their ideology and would be unafraid to apply it to any case involving President Trump. “We did put 235 judges, 235 progressive judges, judges not under the control of Trump, last year on the bench, and they are ruling against Trump time after time after time.”

    As justification for their use of the courts to stymie the will of the democratically elected administration, the Democrats (naturally) cite Marbury v. Madison, in which every schoolboy (and girl) used to be taught strengthened the concept of judicial review and established the courts as a proper constitutional check on the executive and legislative branches. The catch here is that Marbury v. Madison was decided on procedural, constitutional grounds, thereby intentionally sidestepping the contentious politics of the case. More to the point, the ruling purposefully constrained the ability of elected officials to use the courts as vehicles for their political gambits, even as it also reined in the Supreme Court itself, arguing that its actions in defense of politically stacking the judiciary were unconstitutional.

    Rather than relying on the words of Chief Justice John Marshall, the Democrats and all those who cheer their judicial strategy would do far better to read the words and heed the warnings of Carl Schmitt, the brilliant and rightly famous Weimar-era German jurist who became a rightly infamous Nazi-era German jurist, the “crown jurist” of the Third Reich.

    I have written a great deal about Schmitt over the last several years—including in these pages—largely because he was among the most prescient of the West’s philosophers of the early Twentieth century. Long before he became a Nazi, Schmitt warned about the tendency of liberal democracy to make everything, every question or concern about contemporary life into a political matter. Schmitt observed that in traditional European societies (and America as well), the state had only to deal with matters such as land, trade, finances, and family ties. Enemies of the social order were generally recognized by everyone as evil and were han­dled by communal agreement on what was commonly understood to be what was right, or moral, or in line with universally recognized truths. In the liberal democratic state, by contrast, everything had become political and subject to dispute, which led to continuous contro­versies and turmoil surrounding all aspects of social life.

    Schmitt most fully articulated his theories on the politicization of everything and the subsequent creation of “the total state” in his 1932 classic The Concept of the Political. Even before this, however, Schmitt identified universal politicization—and politicization of the judiciary, in particular—as the preeminent threat to democratic polities. Schmitt fervently disdained the idea that the judiciary could or should behave in a political manner or pursue political ends. Doing so, he argued, would corrupt the judiciary beyond repair and, in the end, destroy democracy completely. Schmitt rejected out of hand the very notion that the courts could create or enforce political positions that were ultimately unreviewable and unamendable by the people and their elected representatives. Such a doctrine would, he argued, render the people powerless.

    Schmitt argued that judicial decisions must be made in deference to the “principle of legal determination,” which is to say that they must be made in accordance with the law as written, disregarding the moral or political intentions of its authors. Political and moral calculations are not roles of the judiciary.

    For Schmitt, a legal decision was correct if “it can be assumed that another judge would have decided in the same way.” Note, he doesn’t say “another judge appointed by the same president” or “another progressive judge.” He is explicit in arguing that judges’ political sentiments should not play a role in their decisions. If they do, then they are, in the narrow sense, invalid rulings and, in the broader sense, a key cog in the creation of the total state.

    As for why anyone should pay attention to Carl Schmitt, given his eventual lapse into totalitarian madness, two reasons stand out among the rest. 

    First, as I noted above, he was prescient. His observations about politicization and the rise of the total state have been eerily accurate. He saw the flaws in post-Enlightenment liberal democracy which few others did.

    Second, as I note in The Dictatorship of Woke Capital, Schmitt was “what one might call a ‘case in point.” Schmitt predicted the fate of man in the total state, and then he lived it. “Carl Schmitt was a living, breathing oxymoron. He grew frustrated with and tired of trying to rationalize the inefficiencies and ineffective­ness of the Weimar Republic, and so he chose to pledge his allegiance to those who would restore order.”

    The erosion of the apolitical judiciary has been underway for some time—better than half a century. For most of those last fifty years, however, judges at least felt the need to fake it, to justify their decisions in constitutional, apolitical terms. That’s not necessarily the case today. Judges are openly thwarting their political opponents based on politics alone, and they’re doing so to the cheers of elected officials and others who somehow still have the gall to call themselves “defenders of democracy.” They are, of course, nothing of the sort. They are quite the opposite, in fact.

    Tyler Durden Mon, 03/24/2025 - 10:05

    Services PMI Soars In March, Manufacturing Tumbles Into Contraction As Inflation Fears Rise

    Services PMI Soars In March, Manufacturing Tumbles Into Contraction As Inflation Fears Rise

    The morning started off on the bright side with stocks higher (Trump de-escalating tariffs), and then The Chicago Fed National Activity Index (CFNAI) surged +0.18 in February (dramatically better than the -0.17 decline expected). This surge was driven by a big move in 'Production and Income'...

    47 of the 85 monthly individual indicators made positive contributions, while 38 indicators affected the index negatively.

    But all eyes were on S&P Global's preliminary March data for any signs of a rebound after December and January's plunge in Services.

    The good news is that there was a bounce in Services from 51.0 to 54.3 (well above the 51.0 exp) - the 26th consecutive month above 50.

    The bad news is that there was a sudden plunge in Manufacturing PMI into contraction (from 52.7 to 49.8 - below 50)...

    Source: Bloomberg

    Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said

    “A welcome upturn in service sector activity in March has helped propel stronger economic growth at the end of the first quarter. However, the survey data are indicative of the economy growing at an annualized 1.9% rate in March and just 1.5% over the quarter as a whole, pointing to a slowing of GDP growth compared to the end of 2024. 

    A little different from the 2% plus contraction in the economy that The Atlanta Fed model believes.

    "Near-term risks also seem tilted to the downside. Growth is concentrated in the service sector as manufacturing fell back into decline after the frontrunning of tariffs had temporarily boosted factory output in the first two months of the year. Similarly, some of the March upturn in services was reportedly due to business picking up after adverse weather conditions had dampened activity across many states in January and February, which could prove a temporary bounce.

    "Business confidence in the outlook has also darkened, souring further from the buoyant mood seen at the start of the year to one of the gloomiest readings seen over the past three years, largely caused by growing worries over negative impacts from recent policy initiatives from the new administration. Most widely cited were concerns about the impact of Federal spending cuts and tariffs. 

    "A key concern over tariffs is the impact on inflation, with the March survey indicating a further sharp rise in costs as suppliers pass tariff-related price hikes on to US companies. Firms' costs are now rising at the steepest rate for nearly two years, with factories increasingly passing these higher costs onto customers. Thankfully, from the Federal Reserve’s perspective, services inflation remains relatively subdued, but this reflects the need to keep prices low amid weak demand, which will harm profits."

    For now, the market is watching the surge in Services (bond yields up) and ignoring the Manufacturing side of the economy./p>

    Tyler Durden Mon, 03/24/2025 - 09:54

    Key Events This Week: Tariff Talk, Core PCE, Confidence And Global PMIs

    Key Events This Week: Tariff Talk, Core PCE, Confidence And Global PMIs

    It is the last full week before the April 2nd US tariff announcement, so expect lots of headlines on this. Indeed US equity futures are higher this morning on Friday's Bloomberg story that tariffs will be more targeted than the worst fears. Outside of trade, DB's Jim Reid notesthat inflation will take centre stage with the all-important US core PCE on Friday. Before that, UK and Australian inflation are out on Wednesday with flash French and Spanish CPI out on Friday, alongside Tokyo CPI. 

    In terms of other highlights, today’s global flash PMIs will be interesting. US and Europe bounced last month but since then the tariff rhetoric has aggressively stepped-up, but on the other hand Germany has reversed decades of fiscal conservatism. So, it’ll be interesting to see how the surveys respond to those developments. 

    Other notable US economic indicators due include the Conference Board’s consumer confidence index tomorrow following a slide in the University of Michigan gauges last week (we have the final reading for this on Friday). Talking of confidence tomorrow sees the latest German IFO so we’ll get another chance to see if the fiscal package has changed the outlook or whether the threat of tariffs dominate. The IFO is only decimals off the recent lows which were only weaker at the height of the GFC and briefly at the start of Covid. Wednesday then sees US Durable Goods and the latest Spring statement from the UK with the fiscal finances precariously balanced given the self-imposed fiscal rules. See our economists’ preview here. Thursday will see the final Q4 US GDP print and latest trade data which will both impact Q1 GDP trackers. The trade data may see an import surge ahead of likely increases in tariffs. Also of note will be the latest Congressional Budget Office Federal debt and statutory limit report as well as the long-term budget outlook (all the way to 2055) on Wednesday and Thursday, respectively.

    With regards to central banks, highlights include the summary of opinions from the March BoJ meeting on Thursday. In Europe, the ECB will publish its consumer expectations survey on Friday, the same day as Norway’s central bank will decide on rates. In China, highlights include the 1-yr MLF rate fixings tomorrow as well as industrial profits for February on Thursday. Focus will also be on the annual China Development Forum ending today in Beijing. Many CEOs of blue-chip American and European corporates are attending.

    The full day-by-day week ahead is at the end as usual but let's preview the core US PCE on Friday. Personal income (+0.2% vs. +0.9%) and consumption (+0.3% vs. -0.2%) should normalize in opposite directions but the core PCE deflator (+0.37% vs. +0.28%) is likely to edge up and and that should push the YoY rate up a tenth to 2.8%. The recent stronger-than-expected inflation readings have caused DB's economists to mark up their 2025 inflation forecasts. They now see Q4/Q4 core CPI and core PCE inflation at 3.0% and 2.7%, respectively.

    Elsewhere, over the weekend the news flow intensified in Türkiye with key opposition leader, and Istanbul mayor, Ekrem Imamoglu being jailed on corruption charges after being detained by police last week. The fact that he wasn't charged with terrorism means the news isn't as extreme as it could have been as such a move would have led to the appointment of a trustee to the Istanbul Municipality, risking more protests and unrest. The Bloomberg TRL equity index fell -17.59% last week and the central bank hiked overnight lending rates by 200bps to 46%. Last night the regulator broadened a short-selling equity ban and relaxed company share buy-back rules to try to help stabilize markets. So one to watch this morning.

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

    Monday March 24

    • Data: US, UK, Japan, Germany, France and the Eurozone flash March PMIs, US February Chicago Fed national activity index
    • Central banks: Fed’s Bostic and Barr speak, BoJ minutes of the January meeting, ECB’s Holzmann speaks, BoE’s Governor Bailey speaks
    • Earnings: BYD

    Tuesday March 25

    • Data: US March Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Philadelphia Fed non-manufacturing activity, January FHFA house price index, February new home sales, China 1-yr MLF rate, Japan February PPI services, Germany March Ifo survey, EU27 February new car registrations
    • Central banks: Fed’s Williams and Kugler speak, ECB's Kazimir, Nagel, Holzmann and Vujcic speak
    • Auctions: US 2-yr Notes ($69bn)

    Wednesday March 26

    • Data: US February durable goods orders, UK February CPI, RPI, January house price index, France March consumer confidence, Australia February CPI
    • Central banks: Fed's Musalem and Kashkari speak, ECB's Villeroy and Cipollone speak, BoC summary of deliberations from the March meeting
    • Earnings: Dollar Tree, RENK
    • Auctions: US 2-yr FRN (reopening, $28bn), US 5-yr Notes ($70bn)
    • Other: US CBO Federal Debt and the Statutory Limit report, UK spring statement

    Thursday March 27

    • Data: US February pending home sales, advance goods trade balance, wholesale inventories, March Kansas City Fed manufacturing activity, initial jobless claims, China February industrial profits, Japan March Tokyo CPI, Eurozone February M3
    • Central banks: Fed's Barkin speaks, BoJ’s summary of opinions from the March meeting, ECB's Guindos, Villeroy, Wunsch, Escriva and Schnabel speak, BoE's Dhingra speaks, Norges Bank decision
    • Earnings: H&M, Lululemon
    • Auctions: US 7-yr Notes ($44bn)
    • Other: US CBO The Long-Term Budget Outlook: 2025 to 2055

    Friday March 28

    • Data: US February PCE, personal income, personal spending, March Kansas City Fed services activity, UK February retail sales, January trade balance, Q4 current account balance, Germany April GfK consumer confidence, March unemployment claims rate, France March CPI, PPI, February consumer spending, Italy March consumer confidence index, manufacturing confidence, economic sentiment, January industrial sales, February PPI, Eurozone March economic confidence, Canada January GDP
    • Central banks: Fed's Barr and Bostic speak, ECB February consumer expectations survey

    Finally, looking at just the US, the key economic data releases this week are core PCE inflation and the University of Michigan report on Friday. There are several speaking engagements by Fed officials this week, including an event with Governor Barr on Monday.

    Monday, March 24

    • 09:45 AM S&P Global US manufacturing PMI, March preliminary (consensus 51.8, last 52.7); S&P Global US services PMI, March preliminary (consensus 51.2, last 51.0)
    • 01:45 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will be interviewed on Bloomberg Television.
    • 03:10 PM Fed Governor Barr speaks: Fed Governor Michael Barr will speak in a moderated discussion at an event hosted by the Aspen Institute.

    Tuesday, March 25

    • 09:00 AM S&P Case-Shiller 20-city home price index, January (GS +0.6%, consensus +0.4%, +0.5%)
    • 09:00 AM FHFA house price index, January (consensus +0.3%, last +0.4%)
    • 09:05 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will give opening remarks at a conference at the New York Fed. Speech text is expected. On March 4, Williams said, "I think the current stance of policy is good. I don’t see any need to change it right away." He also said, "The US economy is starting in a very good place—unemployment is at 4%, the labor market has stabilized, inflation is 2.5% and has been coming down gradually toward our 2% goal—and we have monetary policy in a very good place."
    • 10:00 AM New home sales, February (GS +2.2%, consensus +3.5%, last -10.5%)
    • 10:00 AM Conference Board consumer confidence, March (GS 93.0, consensus 93.6, last 98.3)

    Wednesday, March 26

    • 08:30 AM Durable goods orders, February preliminary (GS -2.0%, consensus -1.0%, last +3.2%); Durable goods orders ex-transportation, February preliminary (GS -0.2%, consensus +0.2%, last flat); Core capital goods orders, February preliminary (GS -0.2%, consensus flat, last +0.8%); Core capital goods shipments, February preliminary (GS +0.4%, consensus +0.2%, last -0.3%): We estimate that durable goods orders declined 2.0% in the preliminary February report (month-over-month, seasonally adjusted), reflecting a decline in commercial aircraft orders. We forecast a 0.2% decline in core capital goods orders—reflecting sharp declines in the new orders components of manufacturing surveys in February—and a 0.4% increase in core capital goods shipments—reflecting the rise in core orders in recent months.
    • 10:00 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will host a Fed Listens event in Detroit Lakes, Michigan. Q&A is expected.
    • 01:10 PM St. Louis Fed President Musalem (FOMC voter) speaks: St. Louis Fed President Alberto Musalem will speak on the US economy and monetary policy, followed by a moderated conversation. Speech text is expected. On March 3, Musalem said, "I believe a patient approach now will help us as we seek maximum employment, price stability and a durable economic expansion."

    Thursday, March 27

    • 08:30 AM GDP, Q4 third release (GS +2.3%, consensus +2.4%, last +2.3%); Personal consumption, Q4 third release (GS +4.2%, consensus +4.2%, last +3.7%); Core PCE inflation, Q4 third release (GS +2.65%, consensus +2.7%, last +2.7%): We estimate no revision on net to Q4 GDP growth at +2.3% (quarter-over-quarter annualized), reflecting downward revisions to business and residential fixed investment offset by an upward revision to exports growth.
    • 08:30 AM Advance goods trade balance, February (GS -$140.0bn, consensus -$134.5bn, last -$155.6bn): We estimate that goods trade deficit narrowed by $15.6bn to $140.0bn in the February advance report, reflecting a $10bn decline in gold imports and an $8bn increase in total imports from major Asian trading partners.
    • 08:30 AM Initial jobless claims, week ended March 22 (GS 220k, consensus 225k, last 223k): Continuing jobless claims, week ended March 15 (consensus 1,879k, last 1,892k)
    • 10:00 AM Wholesale inventories, February preliminary (consensus +1.0%, last +0.8%)
    • 10:00 AM Pending home sales, February (GS -2.0%, consensus +1.0%, last -4.6%)
    • 04:30 PM Richmond Fed President Barkin (FOMC non-voter) speaks:  Richmond Fed President Tom Barkin will give a lecture at Washington and Lee University. Speech text and Q&A are expected. On February 25, Barkin said "All this uncertainty argues for caution as we look to wrap up the inflation fight. If headwinds persist, we may well need to use policy to lean against that wind."

    Friday, March 28

    • 08:30 AM Personal income, February (GS +0.3%, consensus +0.4%, last +0.9%); Personal spending, February (GS +0.5%, consensus +0.5%, last -0.2%); Core PCE price index, February (GS +0.34%, consensus +0.3%, last +0.2%); Core PCE price index (YoY), February (GS +2.75%, consensus +2.7%, last +2.6%); PCE price index, February (GS +0.30%, consensus +0.3%, last +0.3%); PCE price index (YoY), February (GS +2.50%, consensus +2.5%, last +2.5%):  We estimate that personal income and personal spending increased by 0.3% and 0.5%, respectively, in February. We estimate that the core PCE price index rose by 0.34% in February, corresponding to a year-over-year rate of 2.75%. Additionally, we expect that the headline PCE price index increased by 0.3% from the prior month, corresponding to a year-over-year rate of 2.50%. Our forecast is consistent with a 0.20% increase in our trimmed core PCE measure (vs. 0.18% in January).
    • 10:00 AM University of Michigan consumer sentiment, March preliminary (GS 57.9, consensus 57.9, last 57.9): University of Michigan 5-10-year inflation expectations, March preliminary (GS 3.8%, last 3.9%)
    • 03:30 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will moderate a panel on US housing finance policy at an event at the Atlanta Fed.

    Source: DB, Goldman

    Tyler Durden Mon, 03/24/2025 - 09:30

    23andMe Files For Bankruptcy, CEO Resigns - Fate Of Americans' DNA Data Now In Court-Supervised Sale

    23andMe Files For Bankruptcy, CEO Resigns - Fate Of Americans' DNA Data Now In Court-Supervised Sale

    Shares of 23andMe crashed in premarket trading on Monday after the genetic testing unicorn startup filed for bankruptcy in the US Bankruptcy Court for the Eastern District of Missouri, following a slide in demand for its ancestry kits and a data breach. The bankruptcy raises one alarming question about DNA security: What will happen to the genetic data of the company's more than 15 million customers?

    23andMe announced that its CEO, Anne Wojcicki, has resigned immediately and will remain on the company's board of directors. She led the cash-burning startup that never turned a profit and once commanded a market capitalization of nearly $6 billion in late 2021. Shares plunged 44% in the premarket to $1.  

    "After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business," Mark Jensen, Chair and member of the Special Committee of the Board of Directors wrote in a statement. 

    Jensen said, "We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities. We believe in the value of our people and our assets and hope that this process allows our mission of helping people access, understand and benefit from the human genome to live on for the benefit of customers and patients."

    "We want to thank our employees for their dedication to 23andMe's mission. We are committed to supporting them as we move through the process. In addition, we are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction," he added.

    In mid-November, 23andMe laid off about 40% of its employees as part of cost-reduction measures, a decision taken amid sliding revenues. 

    We previously cited a healthcare investor named Will Manidis, who warned: 

    "The inevitable fire sale of this mess to an overseas PE firm is going to be a national security matter on the scale of which we haven't seen in healthcare in years." 

    Let's see who buys this gigantic pool of genetic data—and whatever scheme they use to monetize it. 

    Trump administration should be watching over the sale to ensure Chinese PE firms do not purchase this treasure trove of US genetic data. 

    * * *

    Click link & start tracking your health with simple at-home test kits... Tyler Durden Mon, 03/24/2025 - 09:20

    Waltz Reveals Topics Of US-Russia Meeting As It Kicks Off In Riyadh

    Waltz Reveals Topics Of US-Russia Meeting As It Kicks Off In Riyadh

    Trump's national security adviser Mike Walz has previewed what will be a main topic of discussion for Monday's next round of talks with Russia in Saudi Arabia. At this point the talks between the US and Ukrainian delegations have concluded (as of Sunday night), and up next is the separate meeting with the Russians, which has begun Monday.

    "We're moving closer and we're closer to peace than we ever have been," Walz told CBS' Face the Nation. "And now we have technical teams, actually, with Ukrainians and Russians at the same facility, conducting proximity talks."

    That's when he revealed a major new focus of negotiations for the Monday talks. "We now going to talk about a Black Sea maritime ceasefire so that both sides can move grain fuel and start conducting trade again in the Black Sea," Walz described.

    Getty Images

    Reaching a lasting ceasefire deal would allow both warring countries to "move grain, fuel, and start conducting trade" in the sea again, he said.

    Also high on the agenda will be discussions of the front line, the issue of territories, and the achievement and maintenance of sustainable peace. "We’ll talk the line of control… details of verification mechanisms, peace keeping, you know, freezing the lines where they are," Walz noted.

    The issue of "broader and permanent peace" and "security guarantees" are also on the table as the diplomatic engagements proceed.

    As the talks in Riyadh have reportedly begun Monday, the Russian ruble has continued to strengthen on to the expectation of a peace deal, by 09:30 GMT gaining over 1% against the US dollar in the over-the-counter market.

    Meanwhile, Ukraine's president Volodymyr Zelensky has condemned the continued aerial attacks on Ukraine. Overnight Ukraine's military says it shot down nearly 60 inbound Russian drones. Both sides say they've agreed to a US-brokered pause on attacks against energy infrastructure - both other attacks have persisted.

    Zelensky called on allies put more pressure on Russia "to stop this terror". He said in a fresh televised statement that "since March 11, a proposal for an unconditional ceasefire has been on the table, and these attacks could have already stopped. But it is Russia that continues all this."

    KSA, Ministry of Foreign Affairs

    "Our team is working in a fully constructive manner, and the discussion is quite useful. The work of the delegations continues," Zelensky said in reference to the Sunday Riyadh meeting with the US delegation.

    "But no matter what we’re discussing with our partners right now, Putin must be pushed to issue a real order to stop the strikes, because the one who brought this war must be the one to take it back," he added.

    * * *

    Al Jazeera has the following brief backgrounder on the national security officials leading the Russian delegation for Monday's meeting with the US in Riyadh:

    Sergei Beseda

    The 70-year-old is an adviser to FSB chief Alexander Bortnikov.

    From 2009 to last year, he was heading the FSB’s 5th service, which runs agents in former Soviet countries. Some experts believe he was closely involved in intelligence preparations for Russia’s full-scale invasion of Ukraine in 2022.

    According to Reuters, Beseda’s position appeared precarious after Ukraine fought back much more strongly than expected and Russia’s initial assault on Kyiv was beaten back, but he remained in his post.

    Ex-US Ambassador John Sullivan wrote in his memoir that Beseda also took part in negotiations with the US in 2021 on exchanging prisoners held in each other’s prisons.

    Grigory Karasin

    The 75-year-old is a former long-serving diplomat whose past posts include deputy foreign minister and ambassador to the UK.

    He is now a member of the Federation Council, the upper house of Russia’s parliament, and chairs its international affairs committee.
    Both he and Beseda have been placed under Western sanctions.

    * * *

    Below are more developing Monday geopolitical headlines via Newsquawk:

    Middle East

    • "Israeli Channel 12 on government sources: The military operation will be expanded and what we have done so far has not pushed Hamas to any understandings towards reaching a deal", according to Al Jazeera.
    • AP said Egypt has put forward a new proposal to try to put the ceasefire between Israel and Hamas back on track.
    • "There are positive indications about a new Egyptian proposal in the negotiations, but the gaps are still large", according to Israel's N12.
    • Israeli PM Netanyahu spoke with US Secretary of State Rubio and discussed regional developments including the release of hostages and resumption of fighting in Gaza.
    • Israel’s military said a projectile was launched from Yemen towards Israel which was intercepted and it conducted strikes on Rafah and Khan Younis, while Israel’s military also said the division that operated in Lebanon is preparing for Gaza activity.
    • Israel conducted an air strike which killed Hamas political leader Salah Al-Bardaweel in the southern Gaza Strip and targeted the surgery department at Gaza’s Nasser Hospital which killed Hamas political bureau member Ismail Baarhoum.
    • US peacekeepers said an escalation of the volatile situation at the Lebanon-Israel border could have serious consequences for the region, while it was reported that Israeli PM Netanyahu ordered strikes against dozens of targets in Lebanon in response to rocket fire although Hezbollah denied any link to rocket launches from southern Lebanon on Saturday.
    • White House National Security Adviser Waltz said the US took out key Houthi leadership during strikes in Yemen, as well as weapons factories and some drone facilities, while he added that the US is seeking full dismantlement of the Iranian nuclear program in a way the entire world can see.
    • US envoy Witkoff said Hamas is the aggressor here and had every opportunity to demilitarise and accept the bridging proposal but they elected not to. Witkoff also stated that their signal to Iran is let’s sit down and see if we can get to the right place through diplomacy, while he added that Iran cannot have a nuclear bomb which cannot and will not happen.
    • Iran’s Foreign Minister Araqchi said talks with the US are impossible unless Washington changes its pressure policy.
    • Iranian Foreign Ministry warned of the repercussions of the new Israeli escalation against Lebanon, according to Sky News Arabia.

    Ukraine

    • Negotiations between the delegations of the Russian Federation and the US last about two hours; "the parties do not plan to complete the meeting in the near future", according to TASS.
    • Russia's Kremlin said Saudi Arabia negotiations are underway on technical issues, there are many different aspects related to a settlement in Ukraine that need to be worked out. The Black Sea initiative is on the agenda in these talks. There is a common understanding with the US on the willingness to move towards a settlement
    • Russia's Defence Ministry says Ukraine attempted to attack an oil pumping station in Russia's Krasnodar region, according to IFAX; the station is out of operation for repairs.
    • Russia's Kremlin, on energy strike moratorium, said they are monitoring the situation after attacks by Ukraine.
    • Ukraine and US delegations began talks in Saudi Arabia, while Ukrainian President Zelensky said the Ukrainian delegation is working in a completely constructive way and the conversation is quite useful. There were also comments from the Ukrainian Defence Minister that the agenda for talks included proposals to protect energy facilities and critical infrastructure.
    • White House National Security Adviser Waltz said the US is talking through a number of confidence-building measures to end the Russia-Ukraine war including the future of Ukrainian children taken into Russia.
    • US envoy Witkoff said the US expects a lot more progress on the Russia-Ukraine conflict and that Russian President Putin does not want to take all of Europe with the situation much more different than WW2.
    • White House is aiming for a Russia-Ukraine truce agreement by April 20th, according to Bloomberg.
    • Russia’s Kremlin said the Putin-Trump call was a step towards a face-to-face meeting and talks in Saudi Arabia will be as well. It was also reported that the Russian Defence Ministry said Russian forces took control of Sribne in eastern Ukraine, according to IFAX.

    Other

    • South Korea’s Foreign Minister said sanctions against North Korea must be carried out faithfully and that North Korea should not be rewarded for its wrongdoing in the course of the war in Ukraine.
    • Venezuela’s government said it will resume repatriation flights of migrants from the US beginning on March 23rd.
    Tyler Durden Mon, 03/24/2025 - 08:40

    "This Has Become So Absurd": WaPo Comments Section Explodes After Transgender Op-Ed Reminds Democrats Why They Lost

    "This Has Become So Absurd": WaPo Comments Section Explodes After Transgender Op-Ed Reminds Democrats Why They Lost

    While Jeff Bezos is trying to rebrand the Washington Post as a more moderate rag - causing mass resignations last month at the thought of being less partisan - he might want to check in with the paper's new Opinion editor after his last one rage-quit as part of the February freakout.

    To wit, a transgender man wrote an op-ed with an absolutely retarded analogy, suggesting that  transgender individuals are like the bad guy at the end of "Scooby-Doo" that gets unmasked as his true self.

    The terrible analogy continues...

    The key word in this revelation is “really,” the adverb that means “what something is in actual fact, as opposed to what it might have been appearing, or pretending, to be.”

    I’m willing to accept the fact that Mr. Withers was not who he had been pretending to be. But in other instances, “really” has (as the “Scooby-Doo” theme song goes) “some work to do now.” Is Clark Kent “really” Superman? Is Bob Dylan “really” Robert Zimmerman? Was Mark Twain “really” Samuel Clemens?

    Is a butterfly “really” a caterpillar? -WaPo

    The author of course then jumps into "the Trump administration's attacks on us," and insists "transgender women are not “really” men. We are women. We may have different histories than other women, but then, every woman has her own history."

    Make it stop...

    Readers have had it...

    At the bottom of the article, the comments section was absolutely lit up - as leftist WaPo readers made it clear that they're over it, and this is exactly why they lost the election.

    Let's take a look...

    "Left-of-Center Moderate" (in the 4th highest 'recommended' comment) writes:

    Democrats are always accusing the Republicans of being the ones who "bring up trans issues". But yet we get essays like this. And it's not Republicans who created and regularly deploy such vocabulary as "gender assigned at birth", "pregnant people" . . . or who put their pronouns in their email signatures. And it was at the DNC a couple of months ago that a big brouhaha developed around "adequate trans representation" on the committee.

    The pendulum went way to far on this gender fluidity madness, and probably played a role in ushering in the craziness of "Trump: The Sequel". So, like, hey, thanks trans activists and to Democratic operatives and leaders who refused to stand up to it.

    "Professor Duh" writes:

    The Pronoun Police cost Democrats vast numbers of votes in 2024, thanks to all their pointless preening and posturing.

    They helped put Trumpolini back in office, god helps us all.

     "Mrs Sinkins" writes:

    Well, here we are, straight back at the definition. What is a woman? The problem starts with the idea you present of “ a lifelong sense of myself as female”. But tellingly, you don’t say why you sense that you are female. What do you believe makes you feel female when you never inhabited a female form? I have never yet seen an explanation of this from any trans-identifying person.

    Ask most natal women what makes them a woman and I would bet they would be hard pressed to tell you. Most of us never think about it, we just are. But as well as our “own history”, we share a world-wide commonality of body, of puberty, menstruation, pregnancy, motherhood, menopause, and because of those physical factors, vulnerability, which are an integral part of being a woman and which someone born male will never understand.

     "Philly Boston" writes:

    In this instance, I would say it's a matter of semantics. A woman is an adult female human just as a sow is an adult female pig and a hen is an adult female chicken. It's a matter of biology, not identity. A person can ignore gender stereotypes about clothing and names, going so far to utilize medical intervention to make physical changes to the body, but that doesn't change one's biological sex.

    I don't mean any of the above to justify discriminating against anyone, simply looking to clarify the meaning of words. A biological male may be a trans woman, but that person is not actually a woman.

    "Che Lastima" writes:

    This has become so absurd. Let any Democratic politician take the position that "a trans man or woman is an actual man or woman" and watch them lose so badly.

    Almost 80% of Americans (and 2/3 of Dems) are against trans athletes in women's sports. This issue has been litigated to death.

    "Relemtless75" writes:

    This author does not understand the seriousness of the issue.

    By capturing the Democratic Party, a small but powerful minority of closeted LGBTs, has managed to focus the Party's attention to small percentage of American population, to the detriment of everything important to Average Americans, resulting in the devastating loss to Trump.

    This has resulted in a severe backlash with devastating consequences to the LGBT movement from which recovery is nigh impossible.

     And the list goes on... But hey, at least they've identified a major problem with their party.

     

    * * *

    You can support ZeroHedge with the purchase of a high-quality, sharp, ZeroHedge Multitool.

    Click pic... add to cart... (buy 2 for free shipping)... enjoy Multitool! Satisfaction guaranteed or your money back. Tyler Durden Mon, 03/24/2025 - 08:25

    US Stock Futures Surge On Hopes Trump April 2 Tariffs Will Be "Targeted"

    US Stock Futures Surge On Hopes Trump April 2 Tariffs Will Be "Targeted"

    US equity futures have extended gains throughout the European morning, with the Nasdaq 100 outperforming compared to when we first noted on Sunday night that a risk-on push has gripped markets last night, after a Bloomberg report that Trump’s April 2 tariff package may be more “targeted” than feared. The WSJ added that the admin will "likely omit a set of industry-specific tariffs while applying reciprocal levies on a targeted set of nations...Those sector-specific tariffs, however, are now not likely to be announced on April 2, said an administration official, who said the White House is still planning to unveil the reciprocal tariff action on that day." That news was enough to send S&P futures 1.2% higher and Nasdaq futures 1.5% with all Mag 7 stocks higher this morning led by TSLA (+3.8%), META (+2.1%) and AMZN (+1.5%). Still, we are not fully in the clear because as Goldman Delta 1 trader Rich Privorotsky writes, "my presumption was that the opening salvo would have been maximalist, this seems a step back from that approach. Objectively positive if tariffs are smaller in magnitude/scope but the bigger issue is the perpetual uncertainty…seems that is not going away." Bond yields were 3-5bps higher on the flight away from safety. Commodities are mostly lower this morning, with Aluminum and Copper being down 1.4% and 0.8%, respectively. This week, the key macro focus will be flash PMIs (today) and PCE (Friday), with investors anticipating major tariff announcement next Wednesday (April 2).

    In premarket trading, Tesla led gains among the Mag 7 stocks (Alphabet +1.7%, Amazon +1.7%, Apple +0.9%, Microsoft +1%, Meta +2.7%, Nvidia +1.9% and Tesla +3.7%). Nvidia and Palantir rose amid news that Jack Ma’s Ant Group has developed AI techniques that could cut costs by 20%.

    • Cryptocurrency-exposed stocks advance as Bitcoin gains for a second straight session. Among shares gaining: Coinbase Global +4.4%, Riot Platforms +4.4%, Mara Holdings +4.6%
    • Azek (AZEK) jumps 19% after the Australian building-materials company James Hardie Industries agreed to buy the home-decking provider in a deal that valued the business at $8.75 billion in cash and stock.
    • FedEx (FDX) climbs nearly 1% after Jefferies turned bullish, confident in the parcel delivery company’s ability to continue to grow earnings regardless of top-line trends as it executes on its cost-cutting plans.
    • Lumentum Holdings (LITE) rises 4% after Raymond James upgraded the optical and photonic products company, saying that recent events from Nvidia and Corning suggest that concerns over co-packaged optics products are overblown.
    • Super Micro Computer (SMCI) falls about 1% as Goldman Sachs cuts its recommendation on the beleaguered chipmaker to sell amid AI server competition and margin pressures.
    • Viasat Inc. (VSAT) climbs 4% after Deutsche Bank upgraded the satellite communications company to buy, citing multiple paths for the company unlock value.

    Investors are taking comfort from reports by both BBG and WSJ that President Donald Trump’s coming wave of tariffs is poised to be more targeted than the barrage he has occasionally threatened. The administration is not planning separate, sectoral-specific tariffs to be unveiled at the same event on April 2, officials said.

    “This raises the possibility that some sectors and countries may fare better than others, helping explain market optimism,” said Daniel Murray, chief executive officer of EFG Asset Management in Zurich.

    With much of Wall Street hitting peak bear in recent weeks, Morgan Stanley strategists were among those who see a turnaround on the horizon for US stocks. A dollar that’s down 3.8% from its January peak and signs of a bottoming out for Magnificent Seven earnings could attract flows back to the US, they told clients. 

    Elsewhere, investors were keeping an eye on Turkey where the arrest of Ekrem Imamoglu, President Recep Tayyip Erdogan’s main political rival, could spark nationwide protests. The lira fell 0.6% against the dollar, trading near record lows. Meanwhile, the dollar weakened and Treasury yields ticked higher (see more below).

    Clues on the state of the US economy will come later from purchasing managers indexes. The US print is expected to show the economy remains in expansion mode.

    European indexes were little changed. The Stoxx 600 rose 0.1% to 550.19 erasing earlier gains with health care, food and beverages and real estate sectors lagging, while tariff-sensitive miners outperformed. German software developer SAP SE took the spot as Europe’s most-valuable public company, unseating Danish weight-loss drug maker Novo Nordisk A/S, whose shares have declined 18% this year. Here are some of the biggest movers on Monday:

    • European mining stocks are the best performers as industrial metal prices climb on hopes US President Donald Trump’s next round of tariffs will be more targeted than previously suggested.
    • Saab gains as much as 6.5% as UBS upgrades the defense firm to buy, along with Thales, which rises as much as 3.8%.
    • S4 Capital rises as much as 15% after the advertising and marketing firm’s full-year results beat estimates, with the decline in like-for-like sales decelerating significantly in the final quarter.
    • Wood Group shares rise as much as 11%, before paring gains, after the engineering company agreed to extend the deadline by which Sidara must table a firm offer or walk away.
    • Deutsche Bank shares climb as much as 3.6% after RBC Capital Markets raised the price target on the German lender to match a street-high of €26.
    • EQT shares gain as much as 4.3% after the Swedish private equity firm was upgraded to buy from hold at ABG Sundal Collier.
    • RWE gains as much as 3.8% after activist investor Elliott Investment Management disclosed it has bought a sizable stake in the German utility company and called on management to increase and accelerate its share buyback program.
    • Wilhelmsen gains as much as 8.2% after the Norwegian shipping company announced strengthening its partnership with an established auto original equipment manufacturer and enters a 10-year contract extension.
    • Bayer shares drop as much as 8.9% in German trading after a jury in the US state of Georgia ordered the company to pay about $2.1 billion to a plaintiff who claimed its Roundup weedkiller caused cancer.
    • Kering shares fall as much as 3.8% as analysts cut their estimates ahead of the luxury firm’s first-quarter earnings due April 23, citing lack of momentum at key brand Gucci.
    • Hochtief shares drop as much as 4.6% after BofA Global Research downgraded the construction company, warning that the “tide could be turning” after a strong run.
    • Vodafone falls as much as 3.4% as BofA Global Research cuts its recommendation to neutral, citing a dilutive UK deal and competition in Germany.

    Earlier in the session, Asian equities erased losses, boosted by surge in the region’s heavyweight markets of China and India. The MSCI Asia Pacific Index traded little changed after falling as much as 0.5%. Chinese technology firms gave the biggest boosts to benchmark, with Alibaba and Xiaomi among the top contributers. Mainland China and Hong Kong benchmarks rose, boosted by a rotation from small-cap stocks to their larger peers as concerns rise over earnings.
    India’s NSE Nifty 50 Index was on pace to erase its loss for the year after rallying more than 1% amid early signs of a pickup in government spending and monetary easing. Japan’s Topix fell for the first time in eight sessions, after soft domestic economic data dented sentiment. Indonesia’s JCI Index recouped most of its losses after sliding to its lowest level since 2021 early in the session. Stock benchmarks also closed lower in Taiwan and South Korea. Despite the recovery, investors remain cautious ahead US reciprocal levies scheduled to go into effect next week, even after President Donald Trump indicated a more targeted approach than previously threatened. 

    In FX, the Bloomberg Dollar spot index fell 0.2%, while Treasury yields rose across the curve; as 10-year yield pushed 5bps higher to 4.29%. Havens JPY and CHF are the weakest performers in G-10 FX. The pound rose to session high after March PMIs indicated the UK economy showed signs of improvement. The euro stayed higher after business activity in the euro area reached its highest level in seven months as manufacturers recovered more than expected. The yen dropped as much as 0.4% to 149.85 after BOJ Deputy Governor Shinichi Uchida said on Monday that the bank will keep monitoring the economy and financial markets and raise interest rates if the bank’s economic outlook is realized. There’s a chance that “US tariff policy, which is scheduled for April 2, may be revised to a more flexible content,” says Hiroyuki Machida, director of Japan FX and commodities sales at Australia & New Zealand Banking Group in Tokyo.

    In rates, US bonds underperformed gilts and bunds across the curve, with the 10-year Treasuries yield up more than 4 bps to 4.29%. Treasuries were pressured lower as US stock futures advanced after report that President Donald Trump’s coming wave of tariffs is poised to be more targeted. Intermediates lead losses on the day, steepening 2s10s spread which remains near top of Friday’s range. This week also includes duration risk through 2-, 5- and 7-year auctions starting Tuesday. Around $30 billion of corporate issuance is also expected. Treasury yields cheaper by 3bp to 4.5bp across the curve, with the 2s10s spread steeper by around 1bp on the day; US 10-year yields around 4.285% with bunds and gilts outperforming by 2bp and 6bp in the sector. Gilts notably outperform following earlier manufacturing PMI data, while Bank of England Governor Andrew Bailey will speak at 2 p.m. New York time on “growth in the UK economy.” Peripheral spreads tightened to Germany with 10y BTP/Bund narrowing ~2bps to 110bps

    In commodities, spot gold is little changed at $3,023/oz. WTI trades within Friday’s range, adding 0.4% to trade around $68.53. Most base metals trade in the green; LME lead rises 2%, outperforming peers.

    Looking at today's calendar, the US data slate includes February Chicago Fed national activity index (8:30am) and March manufacturing PMI (9:45am); Fed speaker slate includes Bostic (1:45pm) and Barr (3:10pm). This Week: SPX implied move through 3/28 is 2.23%. Less catalysts to watch into next week; focus will be on Consumer Confidence (Tues), final 4Q GDP reading (Thurs), and PCE/U Mich data (Fri), as well as $183bn in Treasury supply across 2, 5, and 7-year notes.

    Market Snapshot

    • S&P 500 futures up 1.2% to 5,783
    • STOXX Europe 600 up 0.3% to 551.48
    • MXAP up 0.1% to 189.22
    • MXAPJ up 0.6% to 591.91
    • Nikkei down 0.2% to 37,608.49
    • Topix down 0.5% to 2,790.88
    • Hang Seng Index up 0.9% to 23,905.56
    • Shanghai Composite up 0.2% to 3,370.03
    • Sensex up 1.4% to 77,985.57
    • Australia S&P/ASX 200 little changed at 7,936.89
    • Kospi down 0.4% to 2,632.07
    • German 10Y yield little changed at 2.77%
    • Euro up 0.2% to $1.0844
    • Brent Futures little changed at $72.11/bbl
    • Brent Futures little changed at $72.13/bbl
    • Gold spot up 0.1% to $3,025.66
    • US Dollar Index down 0.13% to 103.96

    Top Overnight News

    • President Trump reportedly plans his tariff 'Liberation Day' with a more targeted push, according to Bloomberg citing officials, while it was noted that Trump will announce widespread reciprocal tariffs on nations or blocs but is set to exclude some and the administration is currently not planning separate, sectoral-specific tariffs to be unveiled at the same event as Trump had once signalled. Furthermore, WSJ also reported that the "White House Narrows April 2 Tariffs" and that tariffs on industrial sectors such as cars and microchips are no longer expected to be announced although major trading partners will still be hit with reciprocal tariffs. The news has been a relief for markets gripped by anxiety about an all-out tariff war.
    • Trump signed a memorandum aimed at preventing abuses of the legal system and federal courts and directed the Attorney General to seek sanctions against lawyers and law firms that engage in frivolous unreasonable and vexatious litigation against the US government or departments and agencies of the government.
    • US President Trump’s administration revoked temporary legal status for 530k Cubans, Haitians, Nicaraguans and Venezuelans in the US effective April 24th.
    • US Treasury is considering streamlining bank regulators, according to Semafor; Treasury is drafting recommendations on OCC and FDIC.
    • A US proposal to levy Chinese-built ships docking in America would spark a trade “apocalypse” and has the potential to be devastating for the US economy, maritime experts warned. A two-day USTR hearing in Washington starts today. BBG
    • Ant built AI models that cost 20% less using Chinese-made chips with results similar to those from Nvidia. BBG
    • China said it was ready for any “unexpected shocks” ahead of US President Donald Trump imposing higher tariffs on the world’s second-biggest economy. FT
    • The PBOC will inject 450 billion yuan ($62 billion) of liquidity into the market through one-year medium-term lending facility tomorrow. BBG
    • Japan’s services PMI sank in Mar, with manufacturing coming in at 48.3 (down from 49 in Feb) and services at 49.5 (down from 53.7 in Feb). RTRS
    • India’s equity rout is starting to worry its legion of retail investors. Inflows into domestic mutual funds have dropped about 30% from October’s record and the influx of new entrants has slowed to a two-year low. BBG
    • Eurozone flash PMIs for Mar are mixed, with decent performance on manufacturing (48.7, up from 47.6 in Feb and above the Street’s 48.2) but weakness in services (50.3, down from 50.6 in Feb and below the Street’s 51.1). BBG
    • The UK economy showed signs of improvement, with S&P Global’s purchasing managers’ index jumping to a six-month high of 52 in March. BBG
    • Turkish court formally arrested Istanbul Mayor Imamoglu after prosecutors asked the court to keep Imamoglu and four aides in jail pending their trial on terrorism and corruption charges. It was also reported that Turkey’s Central Bank Governor said in a meeting with bank executives that the central bank will do whatever is necessary within market rules, while the Capital Markets Board announced a ban on short selling on the Istanbul Stock Exchange until April 25th, eased the equity ratio requirement for credit capital markets transactions and removed the maximum limit for the total amount to be used for share buybacks of listed companies.

    Tariffs/Trade

    • US President Trump reportedly plans his tariff 'Liberation Day' with a more targeted push, according to Bloomberg citing officials, while it was noted that Trump will announce widespread reciprocal tariffs on nations or blocs but is set to exclude some and the administration is currently not planning separate, sectoral-specific tariffs to be unveiled at the same event as Trump had once signalled. Furthermore, WSJ also reported that the "White House Narrows April 2 Tariffs" and that tariffs on industrial sectors such as cars and microchips are no longer expected to be announced although major trading partners will still be hit with reciprocal tariffs.
    • Canadian PM Carney said they aim to have free internal trade by Canada Day on July 1st and can increase GDP by CAD 150bln by reducing internal trade barriers between provinces, while he added they will allow businesses to defer corporate income tax payments and GST and HST remittance due to new US tariffs. Furthermore, PM Carney called for a general election on April 28th and proposed a middle-class tax cut to reduce the lowest tax bracket by 1%, as well as noted that Trump’s tariffs and threat actions create the most significant crisis of our lifetime and said Trump wants to break them so the US can own them.
    • China reportedly explores limiting exports to mollify US President Trump and may offer to curb the quantity of certain goods exported to the US, according to WSJ citing advisers to the Chinese government. Furthermore, it was also reported that Trump directed US federal agencies to assess the economic relationship between the US and China with the review due in early April.
    • China’s Foreign Minister Wang said China wants to pursue trade talks with other countries.
    • Malaysia is to crack down on NVIDIA (NVDA) chip flows under US pressure, while Malaysia's Trade Minister said Washington suspects high-end semiconductors are making it to China despite trade controls, according to FT.

    A more detailed look at global markets courtesy of Newsquawk

    APAC stocks traded mixed in a rangebound fashion amid tariff and trade-related uncertainty, while weekend newflow was mostly centred around geopolitics although there were some reports that suggested the potential for a more focused approach by US President Trump regarding April 2nd 'Liberation Day' reciprocal tariffs. ASX 200 was little changed as strength in financials and consumer discretionary offset the underperformance in  consumer staples and tech, while the latest flash PMI data from Australia accelerated. Nikkei 225 swung between gains and losses with price action indecisive amid a weaker currency and a deterioration in Japanese flash PMIs which all printed in contraction territory. Hang Seng and Shanghai Comp conformed to the lacklustre mood amid lingering frictions although Chinese Premier Li stated at a business forum it is necessary for countries to open up their markets in an increasingly fragmented world and that China was ready for any unexpected shocks, while the PBoC reiterated its pledge to cut rates and RRR at an appropriate time during its quarterly meeting on Friday.

    Top Asian News

    • PBoC to conduct CNY 450bln of 1-year MLF operation on Tuesday. MLF operation to be carried out by adopting a fixed quantity, interest rate bidding, and multiple price bidding method.
    • Chinese Premier Li said at a business forum it is necessary for countries to open up their markets in an increasingly fragmented world and countries must work to resist risks and challenges from rising instability and uncertainty. Li also stated that China was ready for bigger than expected external shocks and will focus on combining policy intensification with stimulating market forces, as well as deepening reform of the economic system and will strive to open up chokepoints of the economic cycle.
    • US GOP Senator Daines met with Chinese Vice Premier He Lifeng on Saturday and noted that they are at a time when they have important issues to discuss between the two countries, while Senator Daines also met with Premier Li Qiang on Sunday in Beijing.
    • BoJ Governor Ueda said they cannot sell long-term JGB holdings immediately and have been gradually tapering long-term JGB holdings now. Ueda said the purpose of BoJ policy is to achieve stable prices and will not be disturbed by consideration for state finances, while he reiterated that the BoJ will adjust the degree of monetary easing if the 2% inflation target is likely to be achieved. Ueda said will not rule out the possibility of selling BoJ's government bond holdings.
    • Japanese Finance Minister Kato said it is important for currencies to move in a stable manner reflecting fundamentals and they will take appropriate action against excessive moves.
    • South Korea's Constitutional Court overturned the impeachment of Prime Minister Han, while Han stated he will address urgent issues of trade as a priority after being reinstated as the acting President.

    STOXX 600 began the week on a firmer footing before trimming opening gains after a mixed APAC handover, which saw the Hang Seng close higher by almost 1% ahead of BYD earnings, the company holding a 2.8% weighting in the index, and other indices uneventful. Sentiment in Europe remains capped by ongoing geopolitics, with Russia-US talks in Ukraine ongoing in Riyadh, while Israel increases its offensive in Gaza and Lebanon. Sectors are mixed, after opening almost entirely in the green. Healthcare is the clear underperformer, led by losses in Bayer, which is down -7.4% at the time of writing. On the flip side, the best performing sector is Basic Resources, after JPMorgan gave a “Double Upgrade" to the Mining sector, which sees the likes of London-listed Antofagasta and Anglo American up 2.6% and 3.7% respectively.

    Top European News

    • UK Chancellor Reeves ordered GBP 2bln of Whitehall cuts to help fix the nation’s finances, according to FT. It was separately reported that Reeves said the UK will cut 10,000 civil service jobs, according to Bloomberg. Furthermore, Reeves will stick to fiscal rules despite global turmoil which raises the prospect of belt-tightening measures in the budget update this week, according to Reuters.
    • ECB's Cipollone said key elements strengthen the case for further interest rate cuts; "recent data suggests we might reach the inflation target sooner than expected", via Expansion.
    • Czech Republic is to rescue Radio Free Europe after US President Trump’s funding cuts, according to FT.

    Geopolitics: Middle East

    • "Israeli Channel 12 on government sources: The military operation will be expanded and what we have done so far has not pushed Hamas to any understandings towards reaching a deal", according to Al Jazeera.
    • AP said Egypt has put forward a new proposal to try to put the ceasefire between Israel and Hamas back on track.
    • "There are positive indications about a new Egyptian proposal in the negotiations, but the gaps are still large", according to Israel's N12.
    • Israeli PM Netanyahu spoke with US Secretary of State Rubio and discussed regional developments including the release of hostages and resumption of fighting in Gaza.
    • Israel’s military said a projectile was launched from Yemen towards Israel which was intercepted and it conducted strikes on Rafah and Khan Younis, while Israel’s military also said the division that operated in Lebanon is preparing for Gaza activity.
    • Israel conducted an air strike which killed Hamas political leader Salah Al-Bardaweel in the southern Gaza Strip and targeted the surgery department at Gaza’s Nasser Hospital which killed Hamas political bureau member Ismail Baarhoum.
    • US peacekeepers said an escalation of the volatile situation at the Lebanon-Israel border could have serious consequences for the region, while it was reported that Israeli PM Netanyahu ordered strikes against dozens of targets in Lebanon in response to rocket fire although Hezbollah denied any link to rocket launches from southern Lebanon on Saturday.
    • White House National Security Adviser Waltz said the US took out key Houthi leadership during strikes in Yemen, as well as weapons factories and some drone facilities, while he added that the US is seeking full dismantlement of the Iranian nuclear program in a way the entire world can see.
    • US envoy Witkoff said Hamas is the aggressor here and had every opportunity to demilitarise and accept the bridging proposal but they elected not to. Witkoff also stated that their signal to Iran is let’s sit down and see if we can get to the right place through diplomacy, while he added that Iran cannot have a nuclear bomb which cannot and will not happen.
    • Iran’s Foreign Minister Araqchi said talks with the US are impossible unless Washington changes its pressure policy.
    • Iranian Foreign Ministry warned of the repercussions of the new Israeli escalation against Lebanon, according to Sky News Arabia.

    Geopolitics: Ukraine

    • Negotiations between the delegations of the Russian Federation and the US last about two hours; "the parties do not plan to complete the meeting in the near future", according to TASS.
    • Russia's Kremlin said Saudi Arabia negotiations are underway on technical issues, there are many different aspects related to a settlement in Ukraine that need to be worked out. The Black Sea initiative is on the agenda in these talks. There is a common understanding with the US on the willingness to move towards a settlement
    • Russia's Defence Ministry says Ukraine attempted to attack an oil pumping station in Russia's Krasnodar region, according to IFAX; the station is out of operation for repairs.
    • Russia's Kremlin, on energy strike moratorium, said they are monitoring the situation after attacks by Ukraine.
    • Ukraine and US delegations began talks in Saudi Arabia, while Ukrainian President Zelensky said the Ukrainian delegation is working in a completely constructive way and the conversation is quite useful. There were also comments from the Ukrainian Defence Minister that the agenda for talks included proposals to protect energy facilities and critical infrastructure.
    • White House National Security Adviser Waltz said the US is talking through a number of confidence-building measures to end the Russia-Ukraine war including the future of Ukrainian children taken into Russia.
    • US envoy Witkoff said the US expects a lot more progress on the Russia-Ukraine conflict and that Russian President Putin does not want to take all of Europe with the situation much more different than WW2.
    • White House is aiming for a Russia-Ukraine truce agreement by April 20th, according to Bloomberg.
    • Russia’s Kremlin said the Putin-Trump call was a step towards a face-to-face meeting and talks in Saudi Arabia will be as well. It was also reported that the Russian Defence Ministry said Russian forces took control of Sribne in eastern Ukraine, according to IFAX.

    Geopolitics: Other

    • South Korea’s Foreign Minister said sanctions against North Korea must be carried out faithfully and that North Korea should not be rewarded for its wrongdoing in the course of the war in Ukraine.
    • Venezuela’s government said it will resume repatriation flights of migrants from the US beginning on March 23rd.

    US Event Calendar

    • 08:30: Feb. Chicago Fed Nat Activity Index, est. -0.17, prior -0.03
    • 09:45: March S&P Global US Composite PMI, est. 51.3, prior 51.6
    • 09:45: March S&P Global US Services PMI, est. 51.0, prior 51.0
    • 09:45: March S&P Global US Manufacturing PM, est. 51.8, prior 52.7

    DB's Jim Reid concludes the overnight wrap

    I hope you had a good weekend. I'm off to New York after sending this to print, assuming Heathrow is open. I thought I had a proud parenting moment to share this morning. Maisie entered a poetry competition across several schools a few weeks ago and on Friday we got a letter saying that her poem is going to be published in a book. I helped her with one line of it and I nodded with approval at the judge's verdict. My suspicions were raised when the letter also said you could buy as many copies of the book as you wanted for relatives at £20 a pop. I then heard from other parents that unless the poem was truly awful or contained profanities then virtually all get published. Sounds like a great business model.

    Talking of great publications, our German economics team have now updated their economic forecasts (link here) after the debt break reform passed its final legislative challenge in the Bundesrat on Friday. There remains a lot of uncertainty on the magnitude and timing of the fiscal expansion to come but they now expect real GDP growth to accelerate to 1.5% in 2026 and 2.0% in 2027 even as they lower 2025 two-tenths to 0.3%. A point we already stressed in the inaugural paper for the DBRI (see here) is that we would expect a deficit-fuelled growth spurt to fizzle out after 2027. While productivity-enhancing investments in defence and infrastructure could raise potential growth, it would take deep structural reforms to get German growth rates back to 2% sustainably. So the trillion-euro question is whether Germany will use the sugar rush recovery to implement much needed reforms or whether the stronger growth will actually make it feel less pressing and politically more difficult. My view is that we will probably see the positive growth impacts before we know if they will fail to do the reforms. So momentum still remains in the German risk trade for now in my opinion.

    Looking to this week now, it will be the last full week before the April 2nd US tariff announcement. So expect lots of headlines on this. Indeed US equity futures are higher this morning on Friday's story that tariffs will be more targeted than the worst fears.

    Outside of trade, inflation will take centre stage with the all-important US core PCE on Friday. Before that, UK and Australian inflation are out on Wednesday with flash French and Spanish CPI out on Friday, alongside Tokyo CPI. In terms of other highlights, today’s global flash PMIs will be interesting. US and Europe bounced last month but since then the tariff rhetoric has aggressively stepped-up, but on the other hand Germany has reversed decades of fiscal conservatism. So, it’ll be interesting to see how the surveys respond to those developments. Other notable US economic indicators due include the Conference Board’s consumer confidence index tomorrow following a slide in the University of Michigan gauges last week (we have the final reading for this on Friday). Talking of confidence tomorrow sees the latest German IFO so we’ll get another chance to see if the fiscal package has changed the outlook or whether the threat of tariffs dominate. The IFO is only decimals off the recent lows which were only weaker at the height of the GFC and briefly at the start of Covid. Wednesday then sees US Durable Goods and the latest Spring statement from the UK with the fiscal finances precariously balanced given the self-imposed fiscal rules. See our economists’ preview here. Thursday will see the final Q4 US GDP print and latest trade data which will both impact Q1 GDP trackers. The trade data may see an import surge ahead of likely increases in tariffs. Also of note will be the latest Congressional Budget Office Federal debt and statutory limit report as well as the long-term budget outlook (all the way to 2055) on Wednesday and Thursday, respectively.

    With regards to central banks, highlights include the summary of opinions from the March BoJ meeting on Thursday. In Europe, the ECB will publish its consumer expectations survey on Friday, the same day as Norway’s central bank will decide on rates. In China, highlights include the 1-yr MLF rate fixings tomorrow as well as industrial profits for February on Thursday. Focus will also be on the annual China Development Forum ending today in Beijing. Many CEOs of blue-chip American and European corporates are attending.

    The full day-by-day week ahead is at the end as usual but let's preview the core US PCE on Friday. Personal income (+0.2% vs. +0.9%) and consumption (+0.3% vs. -0.2%) should normalise in opposite directions but the core PCE deflator (+0.37% vs. +0.28%) is likely to edge up and if we're correct that will push the YoY rate up a tenth to 2.8%. The recent stronger-than-expected inflation readings have caused our economists to mark up their 2025 inflation forecasts. They now see Q4/Q4 core CPI and core PCE inflation at 3.0% and 2.7%, respectively.

    Over the weekend the news flow intensified in Türkiye with key opposition leader, and Istanbul mayor, Ekrem Imamoglu being jailed on corruption charges after being detained by police last week. The fact that he wasn't charged with terrorism means the news isn't as extreme as it could have been as such a move would have led to the appointment of a trustee to the Istanbul Municipality, risking more protests and unrest. The Bloomberg TRL equity index fell -17.59% last week and the central bank hiked overnight lending rates by 200bps to 46%. Last night the regulator broadened a short-selling equity ban and relaxed company share buy-back rules to try to help stabilise markets. So one to watch this morning.

    Asian equity markets are generally lower this morning with US equity futures the bigger movers on tariffs hopes. S&P (+0.66%) and Nasdaq (+0.79%) contracts are leading the way. Elsewhere the Shanghai Comp (-0.40%), KOSPI (-0.27%), Hang Seng (-0.12%) and the Nikkei (-0.07%) are slightly lower. Yields on 10yr USTs (+3.4bps) have climbed to 4.28%.

    Early morning data showed that the Japanese au Jibun Bank manufacturing PMI fell to 48.3 in March from 49.0 in February, contracting for a ninth consecutive month. The decline was led by softer overseas demand for goods. At the same time, service activity shrank for the first time in 5 months, falling to 49.5 in March from 53.7 in the prior month. Following the data release, the Japanese yen (-0.34%) is drifting lower for the third successive day trading at 149.83 against the dollar.

    Looking back at last week now, and a more positive market tone just about dominated with the S&P 500 (+0.51%) rising for the first time in five weeks. Earlier in Friday’s session, the index had been on course to post another weekly decline but recovered to close +0.08% higher on the day in part thanks to more sanguine comments from President Trump who said that “there’ll be flexibility” in the upcoming reciprocal tariff plans though he appeared to oppose any outright exemptions. Sectorally, rotation away from tech mega caps continued, with the Mag-7 down -0.63% on the week, though it did see a sizeable +1.41% jump on Friday.

    In Europe, equities also saw modest gains with the Stoxx 600 +0.56% higher on the week, despite Friday’s -0.60% retreat. Southern Europe led the weekly gains with Italy’ FSTEMIB (+0.98%) and Spain’s IBEX (+2.65%) reaching their highest levels since 2007 and 2008 respectively. Germany’s DAX (-0.41% on the week due to a -0.47% fall on Friday) saw a modest decline for a second week running, though it is still +14.98% higher YTD.

    Bond markets mostly posted steady gains, with 10yr Treasury yields falling -6.6bps to 4.25% (+0.9bps Friday), supported by Powell’s dovish undertones at the latest Fed meeting. Money markets ended the week pricing 70bps of Fed cuts by year end, up +5.6bps on the week. In Europe, bonds saw a similar rally with 10yr bund yields falling -11.0bps to 2.76% (-1.5bps Friday) even as the outgoing German parliament approved the constitutional amendment to loosen the debt brake.

    Finally, commodities posted gains, with Brent crude oil seeing its largest rise in ten weeks (+2.24% to $72.16/bbl) amid increased supply uncertainty, while copper rose +4.48% to within 1% of its May 2024 record high. And gold again touched new record highs, up +1.27% to $3,022/oz (-0.75% Friday).

    Tyler Durden Mon, 03/24/2025 - 08:22

    There's An iPhone Moment Happening With Humanoids

    There's An iPhone Moment Happening With Humanoids

    By Eric Peters, CIO of One River Asset Management

    “There’s an iPhone moment happening with humanoids,” said Brett Adcock, founder of Figure, a humanoid robotics company in California. “It’s going to happen right now,” added the serial entrepreneur, his robots already working on the production line in BMW’s Spartanburg factory. Another major corporate customer is trialing his robots for warehouse work. “To succeed at this, you have to do three things that have never been done before. And you have to get all three of them right within the next 5yrs or you’re going to fail for sure.”

    The first thing is you have to build hardware for humanoids that’s incredibly complex and can never fail, and it’s got to work at human speeds with human range of motion,” explained Adcock. “The second thing is a neural net problem, not a control systems problem. You can’t code your way out of this problem. You need to have a robot that can ingest human-like data through a neural net and it has to be able to imitate what humans do. Humanoid robots are not like arms bolted to a factory table. None of those robots have AI.”

    “The third problem is that you then have to generalize. This is the holy grail of robotics,” explained Adcock. “To have a robot look at something it’s never seen before, or heard through speech, and to be able to tell a robot how to do it, and then have it be able to complete that task end to end with one neural net,” he said. “If you can solve those three things, then you’re in the right decade and you’re at the iPhone moment,” he said. “And we can confidently say we have solved or are making major progress on all three problems.”

    “If we had 100,000 robots today that all worked, our two commercial customers would take them all,” said Adcock, not able to leverage scaled up supply chains because they do not yet exist, it’s still early. Which nation wins remains up for grabs. “And we could sign on fifty Fortune 100 companies by the weekend. We are bombarded by demand. The supply of humans is going down.” The working age population is in steep decline across the developed world. “There is unbounded demand. We could ship 1-million robots this month if they were all ready to go.”

    I asked Perplexity to tell me about the leading companies that are producing humanoid robots. Perplexity is an AI that excels in searching the web for the most up-to-date information. I now use different robots depending on the type of task. I’d guess that someday soon we’ll all have multiple robots. Anyhow, Perplexity gave me the top ten companies. Brett Adcock’s Figure, Boston Dynamics, many others I’d never heard of. Tesla made the list of course, its Optimus humanoid robot, run on a proprietary AI, getting smarter every day I drive.

    Tyler Durden Mon, 03/24/2025 - 08:05

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