Individual Economists

US Durable Goods Orders Solid In September

Zero Hedge -

US Durable Goods Orders Solid In September

While 'soft' survey data has been a shitshow, 'hard' data has been stable (what little we actually had during the shutdown)...

Source: Bloomberg

Today we get more 'catch-up' data with Factory Orders and Durable Goods data for September.

US Factory Orders disappointed, rising just 0.2% MoM (+0.3% exp) and slowing notably from the +1.3% MoM jump in August (and up 3.6% YoY)...

Source: Bloomberg

Core Factory Orders (ex-Transports) also rose 0.2% MoM, up notably from the downwardly revised 0.1% MoM decline in August (but remains up over 1% YoY)...

Source: Bloomberg

The final print for Durable Goods Orders were all in line with the flash prints, with the headline rising 0.5% MoMm which helped push Orders up a solid 9.6% YoY...

Source: Bloomberg

Core Durable Goods orders rose for the 6th straight month and are up over 3% YoY...

Source: Bloomberg

Of course, this data is extremely stale now, but still it's positive overall (despite job losses in the goods-producing sector).

Tyler Durden Thu, 12/04/2025 - 10:08

Meta Shares Jump After Zuckerberg Prepares Deep Cuts To Metaverse Following Epic Flop

Zero Hedge -

Meta Shares Jump After Zuckerberg Prepares Deep Cuts To Metaverse Following Epic Flop

Meta shares jumped the most in months after a Bloomberg report said Mark Zuckerberg is preparing deep cuts to the company's metaverse ambitions. The metaverse, once pitched by Zuckerberg as the "next chapter of the internet," has been nothing more than a colossal failure.

According to Bloomberg, Meta executives have discussed slashing the metaverse budget by up to 30% for 2026, which includes the virtual-worlds product Meta Horizon Worlds and its Quest virtual-reality unit. These upcoming cuts to Reality Labs' VR operations will likely result in layoffs as early as January.

Zuckerberg has reportedly asked all divisions to find 10% savings, but the metaverse unit was asked for much deeper cuts because it has been a total flop since its introduction early in the pandemic.

Here's more from the report:

The proposed metaverse cuts are part of the company's annual budget planning for 2026, which included meetings at Zuckerberg's compound in Hawaii last month, the people said. Zuckerberg has asked Meta executives to look for 10% cuts across the board, which has been the standard request during similar budget cycles the past few years, they added.

In 2021, Zuckerberg told investors in a founder's letter that the metaverse marked "the beginning of the next chapter for the internet — and the next chapter for our company."

Zuckerberg's failures continue piling up.

News of the metaverse cuts sent Meta shares up more than 5% in premarket trading in New York...

If the gains hold during the cash session, this would be the largest intraday jump since the 11% spike in late July. Year-to-date, shares are up 9.3% as of Wednesday's close.

In 2023...

However, one area that hasn't been a failure is Meta's Ray-Ban smart glasses.

Tyler Durden Thu, 12/04/2025 - 09:55

Sam Altman Quietly Tried To Buy A Rocket Startup To Compete With Musk's SpaceX

Zero Hedge -

Sam Altman Quietly Tried To Buy A Rocket Startup To Compete With Musk's SpaceX

The relationship between the OpenAI cofounders, Sam Altman and Elon Musk, has devolved into X sparring and legal battles. As the conversation surrounding data center shifts to space, a new report specifies that Altman attempted to acquire a rocket company to compete with Musk's SpaceX.

The Wall Street Journal reports that Altman explored acquiring or partnering with rocket startup Stoke Space. This move would've put him in direct competition with SpaceX, only suggesting the rivalry between the two billionaires has no limits.

Those familiar with the Altman-Stoke Space talks said those discussions to invest billions and take a controlling stake were over the summer and have since ended.

WSJ's report comes days after OpenAI declared "code red," telling employees that ChatGPT needs significant improvement in user experience, including personalization, speed, reliability, and the ability to answer a broader range of questions.

In the companywide memo, Altman also said that OpenAI would be pushing back work on other initiatives, including advertising, AI agents for health and shopping, and a personal assistant called Pulse.

A separate report from Financial Times showed that OpenAI rivals from Google and Anthropic are quickly catching up in terms of features and popularity...

Altman's space ambitions come as Musk recently laid out his vision of humanoid robots, as well as AI data centers in low Earth orbit.

Jeff Bezos has also recognized the need for data centers in space. Also, Bezos has the rocket company Blue Origin

Given the "code red" memo Altman sent to staff earlier this week, perhaps the ChatGPT billionaire should focus on achieving AGI and keeping the AI bubble alive (read report) into next year, rather than overextending, and let Musk and Bezos figure out data centers in space with their rocket companies doing the heavy lifting.

Tyler Durden Thu, 12/04/2025 - 09:25

Treasury Boss Bessent Nukes NYT Hypocrisy Over Desperate Trump Health Smears

Zero Hedge -

Treasury Boss Bessent Nukes NYT Hypocrisy Over Desperate Trump Health Smears

Authored by Steve Watson via Modernity.news,

Treasury Secretary Scott Bessent delivered a brutal takedown of legacy media frauds Wednesday, calling out The New York Times for their shameless double standard on presidential fitness.

Fresh off a three-hour cabinet marathon with President Trump, Bessent faced down a Times hack at their own summit and laid bare the hypocrisy. The same outlet that buried Joe Biden’s dementia for years now peddles baseless panic about Trump’s vigor.

It’s the latest desperate ploy from a press corps still seething over their 2024 election wipeout, desperate to undermine a leader who’s delivering on all fronts.

The fireworks erupted Tuesday at the NYT’s glitzy DealBook Summit, where Bessent squared off against financial columnist Andrew Ross Sorkin. Sorkin, parroting his paper’s latest hit piece “Signs of Fatigue: Trump Faces Realities Of Aging in Office”, tried to corner Bessent on Trump’s supposed “mental decline” and reduced visibility. Big mistake. Bessent didn’t flinch—he fact-checked the fraud live on stage.

“You had what was one of the greatest scandals of all time, that the coverage of the Biden administration, Joe Biden’s diminished capacity, and the cover up. And that’s why it’s probably fair to raise these questions. Where was the New York Times? We just had a three-hour cabinet meeting yesterday, Andrew.”

He didn’t stop there, dismantling the 25th Amendment fever dreams, noting “For ten months, the Biden administration did not have a cabinet meeting… How are you going to invoke the 25th Amendment if the cabinet secretaries never see the president, which they didn’t?”

“I hear from people in the Treasury Building that I see President Trump more in a day than my predecessor saw Joe Biden in half a year!” Bessent urged while Sorkin squirmed, mumbling about “fair questions.”

Post-summit, Bessent doubled down in a further interview, admitting the Times’ lies hit him like a freight train. He couldn’t let it slide—not when the “paper of record” was torching its own credibility in real time.

“He immediately went into attack and gotcha mode! I couldn’t take the hypocrisy,” Bessent declared.

“He just played to the audience…the NYT are so far from the truth,” Bessent continued, noting “How are people gonna construct the narrative of this second Trump presidency when the supposed ‘paper of record’ is so far off?!”

Bessent also described Trump’s unbreakable stamina, relating “He’ll call me, ‘Scott, I didn’t wake you, did I?’ No, sir, I’m always awake at 1:52AM on a Tuesday!”

He added, “We did the trip to Alaska. We did a round trip one day, and we arrived back…our batteries are out. We land at Andrews, and the president’s like, ‘oh, it’s morning in Europe now.’ I think we had spent probably 20 hours in the air in Alaska. And he said, ‘let’s start making phone calls and call the European leaders!’ So we had to sit on the tarmac for two more hours while he made phone calls!”

“He never stops working for the American people. And it’s incredible,” Bessent urged.

Democrats and their media allies spent four years gaslighting the nation about Biden’s “sharp as a tack” facade, even as he shuffled through pressers like a man who’d lost his mind.

Now, with Trump back in the Oval Office acing cognitive tests and grinding 20-hour days, the smears fly: fatigue, decline, 25th Amendment whispers.

Trump himself torched the “crazy lunatics” in the press room, ranting: “I sit here and do four news conferences, I answer questions from very intelligent lunatics– you people.”

He mocked their flip, noting “You always find something new. Like, ‘Is he in good health? Biden was great, but is Trump in good health?!’ YOU PEOPLE ARE CRAZY!”

White House doctors backed him up with October MRI results showing “perfectly normal” cardiovascular health—no abnormalities for a 79-year-old. Press Secretary Karoline Leavitt hammered it home, noting Trump’s “the most accessible president in history,” spotted “almost every single day.” Meanwhile, Biden’s crew dodged press for eight months straight, peddling “cheap fakes” excuses for his vacant stares.

CNN’s Scott Jennings piled on, nailing the Democrats’ gall in a viral clip. “It’s astonishing, frankly, that Democrats have the gall to push conspiracies about President Trump’s health after the Biden cover-up. Sorry to disappoint Democrats, but I was in the Oval Office recently — there is nothing wrong with this man,” Jennings stressed.

“This is an attempt to create a narrative that doesn’t exist because Democrats are so butthurt living through the White House claiming Biden was fine,” Jennings asserted, adding “They want to transfer that to Trump.”

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

Tyler Durden Thu, 12/04/2025 - 09:00

'No Hire, No Fire' Economy Confirmed As US Jobless Claims & Hiring Plans Plummet

Zero Hedge -

'No Hire, No Fire' Economy Confirmed As US Jobless Claims & Hiring Plans Plummet

With the spice flowing once again (post shutdown), initial jobless claims continue to signal no labor market pain at all... plummeting last week to 191k (the lowest since Sept 2022 and before that the lowest since 1969!!)

Distortions around Thanksgiving likely skewed the reading, with California, Texas, and New York saw the largest drop in non-seasonally adjusted claims.

The drops in both California and Texas are one of the largest weekly declines seen outside of the pandemic...

It appears a lack of government firings is helping as the 'Deep Tristate' initial claims tumbled to its lowest since Nov 2024...

This lack of firing comes as ADP reports the biggest manufacturing sector job losses since COVID and Challenger, Gray & Christmas reports U.S.-based employers announced 71,321 job cuts in November, up 24% from the 57,727 job cuts announced in the same month last year.

“Layoff plans fell last month, certainly a positive sign. That said, job cuts in November have risen above 70,000 only twice since 2008: in 2022 and in 2008,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.

Continuing jobless claims continue to oscillate just above the 1.9 million Maginot Line...

Yet another alternative labor market signal points to weakness (more in line with ADP's job losses) as Revelio shows 9k job losses in November...

Hiring Plans Plummet

Through November, global outplacement and executive coaching firm Challenger, Gray & Christmas reports that U.S. employers have announced 497,151 planned hires, down 35% from the 761,954 announced at this point in 2024.

It is the lowest year-to-date total since 2010...

WARNing

Additionally, WARN notices, which have previously led unemployment claims, are rising again.

As Bloomberg's Simon White notes, The WARN Act obliges employers with more than 100 full-time workers to provide written notice to the state and the workers themselves at least 60-90 days ahead of planned plant closings and mass layoffs. It is one of the best real-time reads on the labor market, and has remained very low and steady, around an average of 220-230k, over the past two years.

As the chart below shows, WARN notices has led previous rises in claims. It has also given some false positives, but given the likely impact on yields should we see a sudden deterioration in employment, the recent rise is notable.

That the slowing in the jobs market is set to gather pace is captured in other indicators.

The NFIB small business survey polls respondents on whether they think the single most important problem they face is poor sales.

That has been rising, which often precedes the unemployment rate. Small businesses employ about half the workforce in the US and given the plunge in small business jobs reported by ADP yesterday, it seems labor market pains are starting to accelerate under the surface.

In short - the labor market remains a riddle, wrapped in a mystery, inside an enigma with every indicator pointing in different directions - choose your own adventure.

Tyler Durden Thu, 12/04/2025 - 08:58

Futures Rise, S&P Set For 8th Gain In 9 Days

Zero Hedge -

Futures Rise, S&P Set For 8th Gain In 9 Days

US equity futures rise, trading less than a percent away from a new record high amid signs of a leadership rotation with Big Tech not leading the bounce this time. As of 8:00am ET, S&P and Nasdaq 100 contracts are higher by about 0.1% after climbing in seven of the past eight sessions and extend on Wednesday's gains when bad news was good news as a soft ADP jobs report bolstered expectations for a Fed rate cut next week. Challenger job cuts data for November showed job cuts fell 53% to 71,321 last month from October, but rose 24% from the 57,727 job cuts announced in the same month last year. Pre-market, Mag 7 were up a touch, led by TSLA (+0.9%), META (+0.6%) and NVDA (+0.5%). Salesforce is higher after its forecast beat and it gave a positive view on AI adoption. Bond yields were up modestly, USD unchanged, reversing an earlier drop to a one month low. Commodities are mixed: Oil and base metals are mostly higher; gold/silver are lagging. Bitcoin trades around $93, rebounding almost $10K from its low just days ago. Today's calendar includes November Challenger jobs cuts (7:30am), weekly jobless claims (8:30am) and September factory orders (10am)

In pre-market trading, tech stocks were broadly steady with all Magnificent Seven megacaps apart from Apple posting modest gains, while Salesforce climbed on signs that customers are embracing its artificial intelligence tools. 

  • Mag 7 stocks mostly higher (Tesla +0.6%, Nvidia +0.4%, Meta +0.8%, Alphabet +0.6%, Microsoft +0.4%, Amazon +0.1%, Apple -0.04%)
  • Axogen (AXGN) rises 5% after the provider of medical and surgical instruments said the FDA approved its biologics license application for its Avance nerve graft to treat peripheral nerve discontinuities.
  • Bill Holdings Inc. (BILL) gains 3% after activist investor Barington Capital Group has taken a stake in business payments firm.
  • Costco falls (COST) 1.1% after the retailer reported total comparable sales for November that missed the average analyst estimate. 
  • Dollar General (DG) rises 4% after the company raised its full-year outlook, highlighting value-focused retailers are winning over consumers hunting for deals.
  • Guidewire (GWRE) jumps 5% after the software company’s first-quarter results and second-quarter revenue forecast topped analysts’ expectations.
  • Hormel (HRL) rises 6% after the protein producer’s 3Q adj. EPS forecast beat the company’s recently lowered guidance, as well as the Street consensus.
  • MBX Biosciences (MBX) slips 3% after Goldman Sachs initiated coverage of the drug developer with a sell rating, citing risk to the firm’s data readout in the near term.
  • Salesforce Inc. (CRM) is up 1.9% after the software company gave an outlook for revenue in the current period that topped analysts’ estimates, suggesting it is persuading customers to buy its AI tools.
  • Snowflake (SNOW) falls 8% after the software company issued a forecast for operating margin in the current quarter that fell short of the average analyst estimate. Analysts noted a deceleration in product revenue growth.
  • UiPath (PATH) rises 8% after the software company’s third-quarter results beat expectations. It also gave a forecast.
  • UniQure (QURE) falls 13% after saying the FDA indicated that data from its Phase I/II studies of an investigational gene therapy for Huntington’s disease are unlikely to provide primary evidence to support a biologics license application submission.
  • ZIM (ZIM) rises 3% after Globes reports that Hapag-Lloyd submitted a bid to purchase the shipping company, without saying where it got the information.

Fed rate-cut expectations have fueled a broad rebound after November’s slump, with investors turning to defensive and other sectors as worries over stretched tech valuations persist. The small-cap Russell 2000 index is now just shy of a record high, while the Nasdaq 100 remains about 2% below its peak.

“We’re expecting a broadening of the rally for sectors that have so far been lagging,” said Amelie Derambure, senior portfolio manager at Amundi SA in Paris. “The Russell is very sensitive to interest rates, so the figures reinforced the market’s idea that the Fed will be able to lower rates, in a non-recessionary context.”

A report on corporate job-cut announcements from Challenger, Gray & Christmas Inc. added to evidence that the US labor market is softening. Announced layoffs fell last month after surging in October, but were still the highest for any November in three years, according to the outplacement firm. Meanwhile, YTD hiring plans are the lowest since 2010.

With official data still delayed, private indicators have increasingly pointed to employment coming under pressure from company belt-tightening and weaker spending. Worries about the jobs market and expectations that President Donald Trump will choose a Fed chair who shares his dovish stance have shifted market pricing toward as many as four rate cuts through 2026. Still, with the broader economy resilient, easier policy should continue to support stocks.

“Retail momentum stocks and crypto are still way below the recent peaks, though both have recovered from the recent lows,” wrote Mohit Kumar, chief economist and strategist for Europe at Jefferies. “We see sentiment remaining positive into year-end.”

Meanwhile, Goldman Sachs is looking past this month’s decision to what it calls a “foggy” Fed rate path in 2026. Risks to its terminal-rate range are skewed to the downside amid labor-market weakness, the bank wrote. They still expect two rate cuts next year. JPMorgan strategists expect the market to be boosted by higher equity demand next year. They project a supply-demand “improvement” of around $700 billion in 2026, which would be the strongest year since 2023.

Europe's Stoxx 600 is 0.3% higher with the DAX outperforming. Autos and industrial stocks are leading the way in Europe while utilities and healthcare dip. Automakers gain as Bank of America upgrades some stocks. Here are some of the biggest movers on Thursday:

  • Mercedes, Renault gain as much as 4.4% and 4.8% respectively while holding company Porsche SE rises 5.7%, as Bank of America upgrades the stocks due to a more positive view on the European autos sector.
  • Storytel gains as much as 6.5% after SEB initiated coverage of the Swedish audiobook and publishing house with a buy rating, saying the company has improved the quality of its subscriber base and its internal efficiency.
  • Cosmo shares rise as much as 5.5%, adding to Wednesday’s 20% jump following positive late-stage trial results for the life science company’s experimental treatment for male hair loss.
  • Balfour Beatty shares rise as much as 2.4% after the engineering and construction group said it expects to grow its order book by 20% in 2025 and confirmed more buybacks are on the way in 2026.
  • Philips shares drop as much as 8.6% after Citi analysts noted tariff and China challenges for 2026.
  • Trustpilot shares fall as much as 21% after Grizzly Research published a report on the consumer-review company.

Earlier in the session, Asian stocks rose for a third straight day, led by gains in Japan as regional tech shares tracked their US peers higher. The MSCI Asia Pacific Index advanced as much as 0.9%, with SoftBank Group and Keyence among the biggest contributors. Shares fluctuated in China and Hong Kong, while South Korean stocks slipped. India’s benchmark struggled to hold early gains even as the rupee strengthened against the dollar. Sentiment across the region is improving on rising expectations of a Federal Reserve rate cut this month after the latest US jobs data. Meanwhile, a slightly weaker yen is providing an extra lift to Japanese exporters. Semiconductor shares are showing signs of weakness, with South Korea’s tech-heavy stock index slipping more than 1% as foreign funds take profit. A Microsoft Corp. update is also weighing on sentiment, after a media report that the firm lowered expectations for business customers buying on the cloud unit’s marketplace for artificial intelligence models and agents.

In FX, the dollar gives up earlier gains, Aussie outperforming on bets the central bank may pivot back to rate hikes.

In rates, global bonds weakened, driven by rising yields in Japan. Sentiment shifted as some senior government officials signaled they wouldn’t oppose a Bank of Japan rate hike this month. Treasury yields are rising across the curve. German bonds falling on growing government uncertainty. Gilts are outperforming after very weak construction activity data sparks a small increase in BOE rate-cut bets.  

In commodities, oil prices are higher, albeit with some volatility. Brent is trading around $63/barrel. Gold is recovering ground and now trading close to $4,200/oz. Bitcoin, meanwhile, held above $93,000. The dollar was little changed.

US economic calendar includes November Challenger jobs cuts (7:30am), weekly jobless claims (8:30am) and September factory orders (10am)

Market Snapshot

  • S&P 500 mini and Nasdaq 100 mini little-changed
  • Russell 2000 mini steady 
  • Stoxx Europe 600 +0.3%
  • DAX +0.8%
  • CAC 40 +0.4%
  • 10-year Treasury yield +2 basis points at 4.08%
  • VIX +0.1 points at 16.17
  • Bloomberg Dollar Index little changed at 1212.82
  • euro little changed at $1.1668
  • WTI crude +0.4% at $59.21/barrel

Top Overnight News

  • Donald Trump’s aides are considering having Scott Bessent also head the National Economic Council if Kevin Hassett becomes Fed chair, people familiar said. BBG
  • Trump's administration ordered an enhanced vetting of H-1B visa applicants, with new H-1B visa screening based on any involvement in censorship or free speech, according to the State Department memo.
  • Trump said he may work out another trade deal with Canada and Mexico. BBG
  • Vladimir Putin said Russia didn’t agree with some points of the US peace proposal for Ukraine, Tass reported, citing his interview with a local media outlet. Earlier, Trump called the meeting between Steve Witkoff and Putin “reasonably good” but next steps remain unclear. BBG
  • Emmanuel Macron met Xi Jinping in Beijing and urged China to boost investments in France, as both sides look to rebalance their economic ties. BBG
  • Cambricon plans to more than triple its production of AI chips to half a million units in 2026, people familiar said. The Beijing-based company aims to rival Huawei in China and fill a void left by Nvidia’s forced exit. BBG
  • Bank of Japan Governor Kazuo Ueda said on Thursday there was uncertainty on how far the central bank could raise interest rates due to the difficulty of estimating the country's neutral rate of interest. RTRS
  • The Indian rupee will regain some lost ground against the U.S. dollar over the next three months, but a reversal in the currency's fortunes hinges upon India and the U.S. agreeing to a trade deal. RTRS
  • Paramount more than doubled its breakup fee to $5 billion in its offer to acquire Warner Bros., signaling confidence it can clear regulatory hurdles. BBG
  • Meta Platforms Inc. has been hit by a full-scale European Union antitrust investigation over how its AI features in WhatsApp may be harming competition, in the latest probe into Big Tech’s dominance on the continent. The bloc’s digital chief signaled she wants to conclude several ongoing investigations into tech giants this month including Elon Musk’s X. BBG
  • For all the focus on ADP (historically very noisy), the Indeed Hiring Lab data actually picked back up in the last couple of weeks (need more data). Notable was the a re-acceleration in open jobs in construction (see below). What if AI adoption is slower or less transformative in the near term… the labor market re-accelerates… and inflation proves hotter in 2026? Not at all my base case but inversion an in important part of the process: Goldman

Trade/Tariffs

  • US President Trump said they will either let the USMCA expire or maybe work out another deal with Mexico and Canada.
  • US halted plans to sanction the Chinese spy agency to maintain the trade truce, and the Trump administration will also not enact any major new export controls against China, while the Trump admin is preparing to hold a high-level meeting to decide whether to provide licenses to allow NVIDIA (NVDA) to export the H200 to China, according to FT.
  • Chinese Commerce Ministry, on rare earth export controls, said as long are export license applications are for civilian use, they will be approved.
  • Chinese President Xi said in a meeting with French President Macron that China and France are far-sighted, responsible and independent major countries, while he added that China and France should uphold multilateralism and that China is willing to eliminate interferences and stick to equal dialogues with France. Xi also commented that both countries should support each other on core interests and agreed to expand practical cooperation, as well as consolidate cooperation on airspace and nuclear energy. Furthermore, he said both countries aim to expand two-way investment and that China will expand domestic demand in the 15th five-year plan and will also expand market access and opening-up.
  • India's Trade Minister said exports of autos, electronic goods, textiles and machinery to Russia are expected to increase. India also aims to expand and diversify exports to Russia to address the trade imbalances. India has secured a USD 2bln submarine deal, Bloomberg reported during the visit of Russian President Putin.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher following the positive momentum from Wall St, where all major indices rose amid a weaker dollar and softer yield environment, but with some of the gains in the region capped amid a quiet calendar and lack of major fresh macro catalysts. ASX 200 edged higher in rangebound trade with strength in materials and resources offsetting the losses in the real estate and consumer sectors, while the mining industry was among the outperformers aside from the gold-related stocks. Nikkei 225 rallied above the 50k level as the tech-related momentum in Japan continued, despite higher yields and bets for a December BoJ rate hike. Hang Seng and Shanghai Comp were mixed amid weakness in auto names and after another liquidity drain by the PBoC, while PBoC Governor Pan noted in an Op-Ed that China must maintain prudent monetary policy and should avoid excessive policy adjustments.

Top Asian News

  • PBoC Governor Pan said in a People's Daily op-ed that China must maintain prudent monetary policy and should avoid excessive policy adjustments, while he also suggested preventing overreach from leading to long-term side effects of policies.

BOJ

  • BoJ is likely to raise interest rates in December, a decision Japan's government will likely tolerate, according to sources cited by Reuters.
  • Key members of Japanese PM Takaichi's government would not try to prevent a BoJ hike in December, Bloomberg reports, citing sources.
  • BoJ is carrying out an assessment of the level of neutral interest rate, according to Jiji.
  • BoJ Governor Ueda reiterated that they can only estimate the neutral rate with a wide range thus far, while he added they cannot specify a terminal rate and are working on narrowing the estimate on the neutral interest rate, with the findings to be disclosed if successful. Furthermore, he said for now, they have to work with the current estimate set in a fairly wide range, and there is uncertainty on how far interest rates can eventually be raised.

European equities opened higher, reflecting positive APAC momentum, though morning news flow has been light. Markets expect Kevin Hassett to be named the next Fed Chair, with some concerns that he could be influenced by President Trump on rates. Meanwhile, Reuters and Bloomberg reported hawkish signals suggesting the BoJ is likely to raise rates in December with government approval. Sectors are mixed with a positive tilt: Autos, Industrial Goods & Services and Technology lead. At the bottom: Utilities, Basic Resources and Health Care.

Top European News

  • BoE Decision Maker Panel Survey (Nov): Expectations for year-ahead CPI inflation remained unchanged at 3.4%; Expected year-ahead wage growth rose slightly, by 0.1ppt to 3.8% in the three months to November

FX

  • DXY is trading near the lower end of its 98.798–99.029 intraday range, pressured by JPY strength after Reuters and Bloomberg reported the BoJ is likely to hike rates in December with government approval. Money markets were already pricing a 66% chance of a hike following Governor Ueda’s recent hawkish remarks. USD/JPY slipped from 155.54 to a 154.77 low, with next support at the 1 December trough of 154.66.
  • AUD is firmer amid continued hawkish repricing of RBA expectations.
  • G10 FX is otherwise mostly flat and taking its cue from the USD, with few fresh drivers. EUR and GBP were little moved by Construction PMI releases.
  • PBoC set USD/CNY mid-point at 7.0733 vs exp. 7.0554 (Prev. 7.0754)
  • Chinese State-owned banks reportedly bought USD on the onshore spot market this week in a bid to rein in CNY strength, according to Reuters sources.
  • RBI to tolerate a weaker rupee as dollar inflows diminish, according to Reuters sources.

Fixed Income

  • Fixed income benchmarks are lower following the hawkish BoJ reports, though the associated softening in risk sentiment has provided a modest haven bid as the morning has unfolded.
  • JGBs underperformed, falling as much as 42 ticks to a new contract low of 134.08. The move pushed the 20yr yield to its highest since June 1999 and the 30yr yield to a record high, with selling driven by reports that boosted December BoJ hike odds to above 65%.
  • The bearish tone extended into USTs and Bunds (now trading the Mar’25 contract), which hit lows of 112-27 and 128.46, down eight and 16 ticks respectively. European newsflow was limited; French and Spanish supply saw no major reaction, with Spain’s auction strong and France’s slightly softer versus prior.
  • For USTs, focus beyond the BoJ remains on the Fed Chair narrative. The FT noted bond investors have expressed concern to the Treasury over Hassett’s potential appointment due to his perceived alignment with the President. Kalshi odds for Hassett have slipped to ~75% from above 80% earlier in the week.
  • Spain sells EUR 2.88bln vs exp. EUR 2.5-3.5bln 2.70% 2030, 0.85% 2037 Bono and EUR 0.481mln vs exp. EUR 0.25-0.75bln 1.15% 2036 I/L.
  • France sells EUR 5.06bln vs exp. EUR 3.5-5.5bln 4.75% 2035, 0.50% 2040, 4.50% 2041, 3.25% 2055 OAT.
  • UK sells GBP 1bln 4.25% 2039 Gilt via tender: b/c 3.88x, average yield 4.813%.

Commodities

  • Crude benchmarks were firmer through the APAC session despite constructive comments from US and Russian officials after their recent Moscow meeting. Both benchmarks climbed to highs of USD 59.42/bbl (WTI) and USD 63.08/bbl (Brent) before easing to USD 59.11/bbl and USD 62.74/bbl as risk sentiment softened following the hawkish BoJ reports.
  • XAU posts modest gains early in APAC, reaching USD 4,217/oz before sliding to USD 4,176/oz and remaining below USD 4.2k/oz. Despite a recent soft ADP print and mixed services PMI, gold has unwound its data-driven uptick as broader risk sentiment improves.
  • 3M LME copper traded within a USD 11.43k–11.53k/t range in APAC before retreating from Wednesday’s all-time high of USD 11.54k/t, now at session lows around USD 11.35k/t. The pullback follows Rio Tinto’s raised 2025 copper production guidance and Goldman Sachs’ scepticism over the recent rally.

Geopolitics: Middle East

  • Israel identified the body of the hostage received from Gaza as Thai national Sontisek Rintalk and said the body of the last Israeli hostage, Ran Gvili, remains in Gaza.
  • Iraq has decided to freeze the money of "terrorists", including Hezbollah and the Houthis, via the Official Gazette

Geopolitics: Ukraine

  • US President Trump said the meeting between Russian President Putin, Special Envoy Witkoff and Kushner was a reasonably good meeting and "we'll see what happens", while he added that Russian President Putin wants to end the war.
  • White House official said the US and Russia had a thorough and productive meeting, while Witkoff and Kusher briefed Trump after the meeting with Putin on Tuesday and are to meet Ukrainian representatives in Miami on Thursday.
  • Russian President Putin said the meeting with US' Witkoff and Kushner was necessary and very useful, but it is "too early to say"; said Russia will take control of Donbas and Novorossiya by military means or otherwise.
  • Russian Foreign Ministry Spokesperson said the attacks on tankers in the Black Sea and CPC are aimed at disrupting the peace talks in Ukraine.
  • A Ukrainian official has reportedly cautioned that Thursday's meeting between Ukraine's Umerov and US' Witkoff is a "debrief" by the US and not "a negotiating session...", FT reported.

Geopolitics: Other

  • Venezuela's President Maduro said he had a conversation with US President Trump about 10 days ago, while he added that steps are being taken towards a respectful dialogue between both countries.
  • China is said to be gathering military ships across East Asia in a show of maritime force, according to Reuters sources

US Event Calendar

  • 7:30 am: Nov Challenger Job Cuts YoY, est. 48%, prior 175.3%
  • 8:30 am: Nov 29 Initial Jobless Claims, est. 220k, prior 216k
  • 8:30 am: Nov 22 Continuing Claims, est. 1962.61k, prior 1960k
  • 10:00 am: Sep Factory Orders, est. 0.3%, prior 1.4%
  • 10:00 am: Sep F Durable Goods Orders, prior 0.5%
  • 10:00 am: Sep F Durables Ex Transportation, prior 0.6%
  • 10:00 am: Sep F Cap Goods Orders Nondef Ex Air, prior 0.9%
  • 10:00 am: Sep F Cap Goods Ship Nondef Ex Air, prior 0.9%

DB's Jim Reid concludes the overnight wrap

Markets continue to be in consolidation mode, with the S&P 500 (+0.30%) and the STOXX 600 (+0.10%) both posting modest gains yesterday. The session had started on the back foot as the ADP’s report of private payrolls showed the biggest monthly drop since March 2023, but most assets recovered by the end of the session, as data cemented the view that the Fed would likely cut rates at next week’s meeting. So lots of assets were up by the close, with the 10yr Treasury yield (-2.3bps) down to 4.06%, whilst Bitcoin (+2.30%) reached a two-week high of $93,722 and the small-cap Russell 2000 rose +1.91%. In Japan this morning a strong 30yr auction has led to a decent long-end rally even as other parts of the curve sell off.  

In terms of that ADP report, the headline was that private payrolls fell by -32k in November, undershooting expectations for a +10k rise. The losses were largely concentrated around small businesses (-120k), which saw their largest decline in employment since the pandemic, although payrolls from medium (+51k) and large businesses (+39k) fared better. There were also some questions about regional distortions as the aggregate decline came due to outsized losses in regions along the Atlantic coast. Still, the negative signal from the ADP report received more attention than usual because of the data backlog from the shutdown. So we aren’t getting the usual payrolls this Friday, and the ADP is one of the final pieces of information the Fed will get on the labour market ahead of next week’s decision.

That dovish momentum from the ADP report then got a further boost from the ISM services print. The headline measure was a bit stronger than expected at 52.6 (vs. 52.0 expected), but crucially, the prices paid component fell to a 7-month low of 65.4 (vs. 68.0 expected), which eased concerns about tariff-driven inflation. That component has been strongly correlated to inflation with a lag, so the bigger-than-expected decline helped solidify expectations for a Fed rate cut. Moreover, the employment component remained in contractionary territory at 48.9, so again that echoed the weaker message from the ADP print.

Those prints helped US Treasuries to rally across the curve, with the 2yr yield (-2.4bps) down to 3.49%, whilst the 10yr yield (-2.3bps) fell to 4.06%. And in turn, that saw the dollar index (-0.49%) post its worst day in seven weeks and fall to its weakest level since October 28, the day before Fed Chair Powell said that a December rate cut was “not a foregone conclusion”. This morning, 2 and 10yr US yields are back up +2bps, nearly wiping out yesterday's gains.  

Meanwhile for equities, the S&P 500 (+0.30%) continued to move higher, closing less than 1% beneath its record high from late-October. However, there were some fluctuations over the session, and Microsoft (-2.50%) shares fell after tech news outlet The Information reported that Microsoft had lowered their AI software sales quota. That was pushed back on by a spokesperson for Microsoft, and the share price recovered a bit when CNBC reported they hadn’t lowered the quotas. However, Microsoft shares then sold off again into the close, reviving investor fears about AI valuations. Nevertheless, that wasn’t enough to knock the broader market. The Magnificent 7 (+0.12%) still rose on the day thanks to a +4.08% gain for Tesla. And it was a strong day for market breadth with two thirds of the S&P 500 stocks higher on the day and the small cap Russell 2000 rising +1.91%.

Over in Europe, it was also a data heavy day with the final PMI releases. Those were broadly positive, and the final composite PMI for the Euro Area was revised up to 52.8 (vs. flash 52.4), its highest level in two-and-a-half years. So that continues the positive momentum seen in the PMIs over recent months, and helped to bolster sentiment, with upward revisions in Germany, France and the UK for the composite PMI. In turn, that helped the STOXX 600 (+0.10%) to just about post a modest gain, although it was a pretty subdued day across the continent, with the FTSE 100 (-0.10%), the CAC 40 (+0.16%), and the DAX (-0.07%) all seeing little movement.

There was also little movement in European fixed income, with 10yr bund yields (-0.2bps) barely moving. However, we did hear from ECB Chief Economist Lane, who discussed how the ECB should react to medium-sized inflation shocks, and energy price shocks in particular. He argued that inflation risk wasn’t one-way and that the bank had recently seen some upside surprises, so his comments offered support for the view that rates are likely to be kept on hold through the energy-induced inflation undershoot in 2026.

On the geopolitical front, the perception was that the prospect of a breakthrough in the talks on Ukraine continued to ebb yesterday, with the Polymarket chances of a ceasefire by end-March falling back to just 22%, having been at 27% when we went to press yesterday. In turn, there was a reaction among assets more sensitive to the conflict, with the STOXX Aerospace & Defense index up +2.26%, whilst Brent crude oil prices (+0.35%) were up to $62.67/bbl.
In Asia, Japanese stocks are leading the way, with the Nikkei rising by +2.00% and the Topix increasing by +1.86%, both outperforming their regional counterparts. The ASX (+0.27%) is also higher, with the Hang Seng flat and the Shanghai Comp -0.20% lower. The KOSPI is the largest underperformer, down -0.71%. US futures are flat.  

Early morning data revealed that Australia’s household spending significantly exceeded expectations in October, marking its largest increase since January 2024, thereby strengthening the argument for an interest rate hike next year. Spending rose by +1.3% from September, surpassing economists’ forecasts of a +0.6% increase. Year-on-year, consumption has increased by +5.6%, compared to the anticipated +4.6% rise. 2yr and 10yr Aussie yields are up +7.5bps and 6bps respectively.  

In the bond markets, Japan’s 30-year bonds gained following an auction that attracted the highest demand since 2019, as elevated yields drew in investors. The yield on the 30-year bond decreased by -3bps to 3.39% after the bid-to-cover ratio surged to 4.04, up from 3.125 at the previous auction in November. This strong outcome for the 30-year auction followed a successful sale of 10-year debt earlier in the week, which also saw robust demand. However the rally at the long end today seems to have been funded from elsewhere in the curve with the 10yr yield +3.8bps higher this morning.

To the day ahead now, and we’ll get the US weekly initial jobless claims, the November construction PMIs from the UK and Germany, and Eurozone retail sales for October. Central Bank spearers include the Fed’s Bowman, the ECB’s Kocher, Cipollone and Lane, and the BOE’s Mann. Notable earnings include Kroger, Dollar General and HPE.

Tyler Durden Thu, 12/04/2025 - 08:50

Weekly Initial Unemployment Claims Decrease to 191,000

Calculated Risk -

The DOL reported:
In the week ending November 29, the advance figure for seasonally adjusted initial claims was 191,000, a decrease of 27,000 from the previous week's revised level. This is the lowest level for initial claims since September 24, 2022 when it was 189,000. The previous week's level was revised up by 2,000 from 216,000 to 218,000. The 4-week moving average was 214,750, a decrease of 9,500 from the previous week's revised average. The previous week's average was revised up by 500 from 223,750 to 224,250.
emphasis added
The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 214,750.

Ex-Pornhub Owner Interested In Purchasing Lukoil Assets

Zero Hedge -

Ex-Pornhub Owner Interested In Purchasing Lukoil Assets

By Charles Kennedy of OilPrice.com

Austrian businessman Bernd Bergmair, former majority owner of Pornhub, has approached the U.S. Treasury about buying assets of Russian oil major Lukoil after the Trump administration sanctioned the company. 

"Obviously Lukoil International GmbH would be a great investment and anybody would be fortunate to have the privilege of owning those assets,” Bergmair told Reuters.

"I don’t comment on potential investments as a matter of course," he added.

Last month, U.S. Treasury issued the greenlight for companies to begin talks with Lukoil for its foreign assets, with U.S. oil and gas giants Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) have already expressed interest. Exxon is in talks with Iraq’s Oil Ministry to buy Lukoil’s 75% stake in the West Qurna 2 oilfield, one of the country’s largest. Iraq's oil ministry has invited several U.S. oil companies to enter negotiations over the West Qurna 2 takeover through a competitive bidding process. West Qurna-2 oilfield produces more than 400,000 bpd of crude.  The Iraqi government has taken over operations at West Qurna 2, including paying staff salaries directly.

Previously, Lukoil reached a preliminary agreement with Gunvor to buy its international assets. However, the giant commodity trader pulled the $22-billion bid after the U.S. Treasury Department expressed dissatisfaction with the deal, calling Gunvor a Russian “puppet”. 

“President Trump has been clear that the war must end immediately. As long as Putin continues the senseless killings, the Kremlin’s puppet, Gunvor, will never get a license to operate and profit,” the U.S. Treasury said in a post on X.

Unfortunately, the latest round of peace talks between Russia and Ukraine have been unfruitful after the Kremlin failed to agree to Trump’s 19-point peace plan. Some of the critical amendments in the new plan include no handover of the Donbas region to Russia for free, no automatic veto on Ukraine joining NATO in the future and provision of Article 5-style protection for Ukraine, meaning the U.S. would be bound to intervene if Russia invades in the future. A proposal for full amnesty for war crimes that was part of the first plan has also been removed. 

Ukraine has doubled down on attacks on Russian energy infrastructure, including the latest attack on a shadow fleet vessel in African waters.

Tyler Durden Thu, 12/04/2025 - 08:05

Goldman Warns Copper's Parabolic Breakout Lacks Stability

Zero Hedge -

Goldman Warns Copper's Parabolic Breakout Lacks Stability

Copper futures on the London Metal Exchange opened the week with a breakout to new record highs (see report). On Wednesday, we highlighted a Goldman note detailing the "circular melt-up" mechanics driving the move higher. By Thursday, a separate Goldman analyst was cautioning clients that the parabolic move above $11,000/ton is unlikely to last.

At 6:30 ET, LME copper futures hit a fresh record at $11,575/ton, driven by a scramble to move metal into the US warehouses ahead of potential Trump-era import tariffs and a burst of demand from Asia. The combination has intensified global tightening fears amid soaring AI data center buildouts and massive power grid upgrades.

The question now is how long this breakout into record territory can last, and whether the momentum will carry into 2026. To address that question, a team of Goldman analysts led by Aurelia Waltham published an overnight note titled "Copper: Our Favourite Industrial Metal."

"For 2026, we hold a selective outlook for industrial metals. Copper is our 'favourite' industrial metal as constrained mine supply growth and structural demand growth from grid & power infrastructure move the market towards balanced in 2026, from oversupplied in 2025," Waltham told clients.

She continued, "Additionally, higher ex-US premia and conversations with physical traders point to a larger-than-expected reacceleration of copper flows into the US in H1 2026 ahead of a potential tariff, which should further tighten the ex-US market. As a result, we lift our average H1 2026 LME copper price forecast to $10,710 (from $10,415)."

Waltham addressed the ongoing parabolic price surge on the LME this week with a clear note of caution for clients:

That said, we do not expect the market to enter a period of material tightness until the end of the decade. Already-stretched speculative length means that we do not expect the current breakout above $11,000 to be sustained (as was the case in October). Most of the recent price increase has been driven by expectations of future market tightness, rather than current fundamentals (Exhibit 4).

The analyst noted:

While our much smaller 2026 surplus of 160kt moves the market closer to balanced, it means that we do not expect the global copper market to enter a shortage any time soon.

Beyond Waltham's view, super-bull Kostas Bintas of Mercuria recently told Bloomberg, "If the world keeps going like this we will be left without copper cathodes in the rest of the world."

Bintas warned, "Just looking at the facts, mathematically… what is going to happen if all of this continues? There's only one answer: there will be tightness and a higher price."

Li Xuezhi, head of research at Chaos Ternary Futures, a unit of a commodities hedge fund in Shanghai, said, "The rally has just started, we remain bullish on copper prices."

The takeaway: LME copper futures look firmly pointed up and to the right for years to come, but the pace of the move is where some analysts' views sharply diverge.

If you've been putting off those copper gutters or pipes for your next home-improvement project, you should lock them in sooner rather than later.

ZeroHedge Pro subs can read the full note in the usual place. 

Tyler Durden Thu, 12/04/2025 - 07:45

Clear That 'Something Behind The Scenes Is Breaking' Holter Warns, We're Headed For A Derivative Meltdown

Zero Hedge -

Clear That 'Something Behind The Scenes Is Breaking' Holter Warns, We're Headed For A Derivative Meltdown

Authored by Greg Hunter’s USAWatchdog.com 

Financial writer and precious metals expert Bill Holter (aka Mr. Gold) said at the beginning of November that there was “more risk in the financial system now than any time ever.”  

There are so many ways the system can break down it’s hard to keep track, but let’s start with exploding silver prices that happened at the end of last week.  Holter says,

“In a 48-hour period of time, silver was up over $5 per ounce.  It’s pretty clear and pretty obvious that something behind the scenes is breaking. 

We know that the lease rates have exploded.  We know that the borrow rates on SLV have exploded. 

We also know that in the last 5 to 7 years, silver has been in a deficit... At this point, you are looking at a 400-million-ounce deficit on an annual basis, and global production is 850 million ounces...

The rumor is somebody has put in a $20 billion order, which would mean 400 million ounces. 

If that is the case, that order cannot be met, and that will create shark infested waters...

If somebody stands for delivery and it looks like it may be difficult for them to get delivery, then everybody is going to stand for delivery because they know that their contracts are worthless.”

What would happen if there is an actual failure to deliver in the silver market?  Mr. Gold says,

“If that gets confirmed, then that one day you will see a huge spike, but markets won’t open after that.  That will cascade.  What will happen is all the COMEX contracts for both silver and gold will default. 

That will spill over to the rest of the CME (Chicago Mercantile Exchange).  It has contracts on US Treasuries and stocks.  They have contracts on everything.  If the silver contracts blow up and the gold contracts blow up, how much confidence are you going to have on pork bellies or stocks...

The derivative market is $2 quadrillion.  In the future, you are going to measure your wealth by how many ounces of silver and how many ounces of gold you own...

Once you get a failure to deliver, you will get a Mad Max scenario.  Failure to deliver will melt down all derivatives. 

The world runs on credit, and credit runs on faith.  If you break faith, then you have a real problem in the financial markets and the real economy.”

In closing, Holter warns, “The problem is there is very little collateral left.  Everything has been borrowed against already.” 

Holter is not alone in his thinking about huge risk in the system.  It appears billionaire investors Jeff Gundlach and Ray Dalio agree with Holter, and they are warning of liquidity problems.  For the first time in their successful careers, they are both buying physical gold.

On a total system stopping derivative meltdown, Holter says, “Most people think it is not possible, and it can’t happen.  Mathematically, a meltdown in derivatives that melts everything down is coming.  It’s over.  Mathematically, it’s over.”

There is much more in the 41-minute interview.

Join Greg Hunter of USAWatchdog as he goes One-on-One with financial writer and precious metals expert Bill Holter/Mr. Gold as the risk in the financial system increases for 12.2.25. 

To Donate to USAWatchdog Click Here

Tyler Durden Thu, 12/04/2025 - 07:20

European Carmakers Surge After Trump Rolls Back Fuel Rules

Zero Hedge -

European Carmakers Surge After Trump Rolls Back Fuel Rules

European automaker shares rose sharply on Thursday after President Donald Trump moved to roll back U.S. fuel economy limits established under Joe Biden, according to Reuters. The administration framed the proposal as a way to lower consumer costs by making it easier for companies to sell gasoline-powered vehicles.

By mid-morning, Porsche shares were up more than 5%, Mercedes-Benz and Volvo Car gained nearly 4%, Renault rose 3.3%, and Stellantis climbed around 2.7% after an 8% rally the previous day.

Speaking from the Oval Office alongside industry executives and lawmakers, Trump announced the reversal of the Biden-era rules, saying, “We’re officially terminating Joe Biden’s ridiculously burdensome, horrible, actually, CAFE standards that impose expensive restrictions and all sorts of problems — gave all sorts of problems to automakers. And we’re not only talking about here, we’re talking about outside of our country.”

He also said his administration would revoke California’s emission waivers, following a Senate vote earlier this year to overturn them. A White House official said the reset could save Americans up to $109 billion.

Reuters writes that automakers responded favorably. Ford CEO Jim Farley said the move aligns regulations with market conditions, adding, “We can make real progress on carbon emissions and energy efficiency while still giving customers choice and affordability.”

Stellantis CEO Antonio Filosa said the company supports policies that are “environmentally responsible” but also allow consumers “the freedom to choose the vehicles they want at prices they can afford.” General Motors backed the idea of a single national standard and said it remains committed to offering both electric and gasoline-powered models.

Volvo Cars said it is too early to assess the effects of the regulatory shift. Although aiming to reach net-zero emissions by 2040, the company has already announced plans to expand hybrid production in the United States, with new models scheduled as late as 2029.

Market analysts said the rollback had been widely anticipated. Martino De Ambroggi of Equita noted that the change should benefit the industry and pointed to reports that the European Union may loosen or revise its planned 2035 ban on combustion-engine car sales. Industry sources said this week that the European Commission could delay announcing its support package for the region’s carmakers.

The move is expected to intensify debate over whether weaker standards actually reduce costs for drivers. Consumer Reports found “no systemic, statistically significant increase” in inflation-adjusted vehicle prices from 2003 to 2021, while fuel economy improved 30% over the same period.

The organization estimated that consumers saved “$7,000 in per-vehicle lifetime fuel savings for model year 2021 vehicles compared with model year 2003.”

Environmental groups criticized the policy shift, arguing it will raise long-term fuel expenses and emissions. Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign, said, “In one stroke Trump is worsening three of our nation’s most vexing problems: the thirst for oil, high gas pump costs and global warming.” He said stronger standards are essential to U.S. competitiveness, warning that Trump’s action “will feed America’s destructive use of oil, while hamstringing us in the green tech race.”

Tyler Durden Thu, 12/04/2025 - 06:55

10 Thursday AM Reads

The Big Picture -

My morning train WFH reads:

• Time to admit the truth: Brexit has been an unmitigated economic failure: Leaving the EU has reduced Britain’s GDP by up to 8pc, according to a devastating US study. GDP down up to 8%; Investment down 18%; Productivity down 4%; Employment down 4%; No upside whatsoever. (The Telegraph)

• Office-to-Residential Conversions Are Booming and New York Is the Epicenter: A tour of Manhattan buildings you can now call home, and a peek inside the architectural hacks that make transformations possible. (Wall Street Journal) see also When Home Sellers Set Prices Too High, They’re Paying for It: More than half of homes sold in 2025 through October had at least one price cut. (Wall Street Journal)

• America is Flying Blind on Immigration: Nobody Knows How Many Immigrant Workers Have Left the US Amidst Trump’s Mass Deportations. That’s Incredibly Bad. (Apricitas Economics)

• I love AI. Why doesn’t everyone? Anti-AI sentiment might or might not be rational, but it certainly relies on a lot of bad arguments. (Noahpinion)

• Inside the Ostrich Effect: How Ignorance Has Become a Survival Strategy: Research suggests our tendency to ignore bad news isn’t irrational — it’s self-preservation, and could help explain why older people are often happier. (Bloomberg)

• Cities Panic Over Having to Release Mass Surveillance Recordings: Flock’s ‘licence plate readers’ read much more than license plates. A judge says what they record must be released. (God’s Spies)

• The Data on Self-Driving Cars Is Clear. We Have to Change Course. If Waymo’s results are indicative of the broader future of autonomous vehicles, we may be on the path to eliminating traffic deaths as a leading cause of mortality in the United States. (New York Times)

• What Is the “Bean Soup Theory” on TikTok? Bean soup is sparking conversations about the rise of egocentrism. (Inside Hook)

• Russia Gains the Upper Hand in the Drone Battle, Once Ukraine’s Forte: Moscow’s military has gotten better at using the war’s deadliest weapons: small, cheap drones. (Wall Street Journal)

• Pete Hegseth Needs to Go—Now: A man with such contempt for the military should not run the Pentagon. (The Atlantic) see also Hegseth, with White House help, tries to distance himself from boat strike fallout: As Congress vows accountability, the Trump administration emphasized it was a top military commander — not the defense secretary — who directed the engagement. (Washington Post)

Be sure to check out our Masters in Business interview this weekend with Paul Zummo, Chief Investment Officer and Co-founder of JPMorgan Alternative Asset Management. The JPM group manages $35 billion in external hedge fund solutions for institutional and high-net worth investors. He also heads the Portfolio Management Group, and is a member of the JPMAAM Investment Committee.

 

Money-Market Assets Rise to Record $8 Trillion


Source: Bloomberg

 

Sign up for our reads-only mailing list here.

 

 

The post 10 Thursday AM Reads appeared first on The Big Picture.

America's Great Build-A-Thon Comes With A Price Tag

Zero Hedge -

America's Great Build-A-Thon Comes With A Price Tag

Authored by David Parsons via BondVigilantes.com,

The United States is on the brink of an industrial transformation that could redefine its economic trajectory. Inward investment is surging, driven by a wave of new manufacturing plants, onshoring and reshoring initiatives, and a parallel boom in data centre and power generation construction. This is not incremental change; it is a structural shift that will demand vast amounts of labour, raw materials, and productive capacity. The question for investors and policymakers is whether this investment renaissance will reignite inflationary pressures which might lead to a newly reconstituted Federal Reserve signalling a willingness to run the economy “hot”.

The scale of manufacturing investment alone is extraordinary. Semiconductor fabrication plants, battery gigafactories, and advanced automotive plants are being announced at a pace unseen in decades. Industry estimates suggest that annual construction outlays for manufacturing could exceed an estimated $250 billion in both 2026 and 2027, as companies seek to localise and secure supply chains. These projects are not confined to the technology sector; they span electronics, pharmaceuticals, and heavy industry, creating a broad-based surge in demand for skilled labour and specialised materials. This manufacturing wave is additive to the already intense pressure from hyperscale data centre construction, which has become a defining feature of the digital economy. With AI and cloud computing hyperscalers expected to drive driving unprecedented demand for processing power, data centre investment is projected to account for half of the projected $1.2 trillion global data centre capital expenditure by 2029, while power generation projects will similarly scramble to keep pace with the energy requirements of this new infrastructure which are forecast to more than double over the next 10 years.

Source: DC Byte, Bloomberg NEF. Reported as of 15/04/2025. IT capacity is the amount of power a data centre needs for computing, network and storage

The implications for the labour market are huge. The construction sector already faces a shortfall of nearly half a million workers, and the competition for skilled trades, engineers, and project managers will only intensify as manufacturing and technology projects converge. Wage inflation is inevitable. In hotspots where multiple megaprojects collide, wage growth could easily outstrip national averages, creating ripple effects across the broader economy. Immigration constraints and demographic trends exacerbate the problem, and will leave employers with few options beyond aggressive pay increases and retention incentives. This is not a temporary squeeze; it is a structural challenge that will persist as long as the investment pipeline remains full.

Raw materials tell a similar story. Steel, aluminium, copper, and cement are all set to experience sustained demand shocks as the buildout progresses. Tariffs and supply chain fragmentation have already pushed input costs higher, and the synchronised surge in construction activity will amplify these pressures. Equipment lead times are lengthening, and logistical bottlenecks remain unresolved. The result is a cost base that is not just rising but likely to sharply accelerate, with regional disparities adding complexity for project planners and investors alike.

Source: Bloomberg, Bureau of Labour Statistics

Overlay this with monetary policy, and the picture becomes even more concerning . The Federal Reserve has signalled a more accommodative stance for some time, tolerating inflation above its long-term target in the interest of sustaining growth and employment. This willingness to let the economy run hot serves a dual purpose: lower rates support the industrial build-out and, as a by-product, higher inflation erodes the real value of the US government’s $38 trillion debt mountain. For policymakers, this is a calculated risk; for bond investors, it is a warning shot. A period of elevated inflation may be politically palatable and even strategically desirable, but it comes at the expense of real returns and introduces volatility into rate expectations. If the Fed cuts too aggressively while fiscal incentives continue to flow, the combination of easy money and surging real-economy demand could create a perfect storm for inflation in 2026 and 2027.

The broader macroeconomic consequences are clear. A synchronised boom in manufacturing, data centres, and power generation will strain every aspect of productive capacity. Labour markets will tighten further, wages will rise, and material costs will climb. These sector-specific pressures will bleed into headline inflation, challenging the narrative of a smooth return to price stability. For investors, the message is simple: the risk premium for inflation is back, and positioning for real assets, pricing power, and inflation-linked instruments will be critical. For policymakers, the challenge is to harness the benefits of reindustrialisation without igniting an inflationary spiral that undermines financial stability.

America’s great build-out will test the limits of labour supply, material availability, and monetary policy flexibility. If the Fed remains tolerant and the economy runs hot, the debt mountain may shrink in real terms—but so too will the purchasing power of every dollar in circulation. For bond investors this industrial renaissance may be good for growth, but it could also be the spark that reignites inflationary fire.

Tyler Durden Thu, 12/04/2025 - 06:30

Victor Davis Hanson Proclaims "The End Of Climate Change"

Zero Hedge -

Victor Davis Hanson Proclaims "The End Of Climate Change"

Decades of 'consensus' around so-called climate catastrophe are now running into new economic, technological, and geopolitical realities.

Mix in AI and its unprecedented demand for large-scale electricity generation, and we have a global climate conversation that demands to be reckoned with.

Victor Davis Hanson breaks down how the foundations of decades of “green orthodoxy” are shifting:

For decades, the narrative demanded radical economic shifts from fossil fuels to renewables like wind and solar, but recent skepticism is growing due to inconsistencies in temperature records and cyclical changes; Hanson notes, "I didn't think in my lifetime that I would see an end to that dominance, even though there were inconsistencies."

Artificial intelligence requires unprecedented electricity, far beyond what wind and solar can provide, necessitating 100 gigawatt plants annually equivalent to nuclear or fossil fuels; as Hanson cites Sam Altman, "we're going to have to build 100 [one gigawatt plants] per year or the equivalent of clean coal or natural gas."

Figures like Sweden's King Gustaf XVI and Bill Gates have publicly questioned the crisis, while Trump's energy policies end subsidies for failed green projects like California's high-speed rail; Hanson highlights Gates' recent pivot, "he no longer believes that there is an impending climate change crisis."

Elite hypocrisy is everywhere as Hanson notes “the people who have been the avatars of climate change, never suffer the consequences of their own ideology."

"Barack Obama said the planet would be inundated pretty soon, if we didn't address global climate change. Why would he buy a seaside estate at Martha's Vineyard or one on the beach of Hawaii if he really did believe that the oceans would rise and flood his multimillion-dollar investment?

“The inconsistency of the global warming narrative, the self-interest in the people who promote it, and the logic that they have not presented, empirically, any evidence that would convince us that we have to radically transform our economies," leaves Hanson questioning whether AI's demand shift has permanently crushed the ideology of so-called 'climate change.'

(0:00) Introduction

(0:58) Shifting Perspectives on Climate Change

(2:28) Global Skepticism

(5:12) Geopolitical Factors

(6:16) Third World Demands

(8:30) Hypocrisy Among Climate Change Advocates

(9:49) Conclusion

Watch the full breakdown here...

Tyler Durden Thu, 12/04/2025 - 05:45

Macron Wants To Go Full "Ministry Of Truth" With Draconian Censorship Grab

Zero Hedge -

Macron Wants To Go Full "Ministry Of Truth" With Draconian Censorship Grab

French President Emmanuel Macron is facing fierce pushback from conservative voices within France over his renewed drive to grant the state sweeping new censorship powers, Barron’s reports.

On Friday, Macron once again raised the alarm about so-called “disinformation” spreading on social media, insisting that parliament grant authorities the ability to immediately block content deemed “false information.” As if the existing arsenal of censorship tools weren’t enough, the left-wing president now wants to establish a “professional certification” system that would effectively create an official, state-approved class of media outlets—separating those that toe the government’s ethical line from those that refuse to do so.

France’s right-wing press has reacted with outrage, with Vincent Bolloré’s Journal du Dimanche denouncing Macron’s “totalitarian drift” on free speech and warning of “the temptation of a ministry of truth.”

Bolloré-owned CNews and Europe 1 were equally scathing, with popular presenter Pascal Praud accusing the president of acting out of personal resentment, declaring the initiative comes from a “president unhappy with his treatment by the media and who wants to impose a single narrative.”

National Rally leader Jordan Bardella also delivered a blistering rebuke, saying in a statement, “Tampering with freedom of expression is an authoritarian temptation, which corresponds to the solitude of a man... who has lost power and seeks to maintain it by controlling information.”

Bruno Retailleau, head of the Republicans in the Senate, echoed the warning on X: “[N]o government has the right to filter the media or dictate the truth.”

In an unusual move, the Élysée account fired back on social media, posting clips of Praud and other conservative commentators under the sarcastic headline “attention false information.”

At Wednesday’s cabinet meeting, Macron insisted no limitation on free speech was planned and explicitly ruled out any state-issued media label, Barron’s said. “As the president of the republic noted at the start of the cabinet meeting, there is not going to be a state label, and even less a ‘ministry of truth,’” Macron’s spokesperson claimed.

Tyler Durden Thu, 12/04/2025 - 04:15

The "Community Of Central Asia" Could Reduce Russia's Regional Influence

Zero Hedge -

The "Community Of Central Asia" Could Reduce Russia's Regional Influence

Authored by Andrew Korybko via Substack,

The Central Asian Republics (CARs) fall within Russia’s “sphere of influence” for historical, economic, and security reasons.

The first stems from their shared history under the Russian Empire and USSR, the second from the Russian-led Eurasian Economic Union (EAEU) in which Kazakhstan and Kyrgyzstan participate, while the third relates to the Russian-led Collective Security Treaty Organization (CSTO) that includes them and Tajikistan. Russia’s influence, however, has waned in recent years.

Its understandable prioritization of the special operation created the opportunity for Turkiye to expand its influence through the “Organization of Turkic States” (OTS) in which Kazakhstan, Kyrgyzstan, and Uzbekistan participate with Turkmenistan as an observer. The OTS began as a socio-cultural integration group that now also promotes economic and even security cooperation, thus challenging the EAEU and CSTO. The US also made major trade inroads there earlier this month during the latest C5+1 Summit.

These developments were greatly facilitated by the US-mediated normalization of Armenian-Azerbaijani ties and the attendant “Trump Route for International Peace & Prosperity” (TRIPP) that was unveiled during their three leaders’ White House Summit in early August.

This will essentially lead to Turkiye injecting Western influence along Russia’s entire southern periphery, especially through the expected ramping up of military exports there, which threatens to pose serious latent challenges to Russia.

The latest move on this front was the CARs inviting Azerbaijan to join their annual Consultative Meeting of Heads of State and then rebranding as the “Community of Central Asia” (CCA), coincidentally right after their meeting with Trump. Regional integration is always positive, but in this case, it could also reduce Russia’s regional influence.

That’s because all six might deal with Russia as a group instead of individually. This could lead to tougher negotiating stances if they’re emboldened by Turkiye and the US.

Azerbaijan’s inclusion suggests that it’ll share its experiences managing this summer’s tensions with Russia and serve as its Turkish ally’s supervisor within the CCA to align it as closely as possible with the OTS (remembering that non-Turkic Tajikistan isn’t a member).

This likely role coupled with the timing of the CCA’s announcement right after the C5+1 and three months after TRIPP’s unveiling suggests that they want to rebalance ties with Russia and could rely on Azerbaijan’s guidance if this results in tensions.

Russia still plays an enormous economic role in the five CARs and ensures three of the CCA’s six members’ security through their membership in the CSTO. Putin also hosted the CARs leaders in early October during the Second Russia-Central Asia Summit where he committed to scaling up investments. Concrete limits therefore exist in terms of how far and fast the CCA could rebalance ties with Russia, so nothing dramatic is expected anytime soon, but some reduction of Russian influence might be inevitable.

That’s because the CCA could foster a stronger sense of regional identity, even ethnic in the pan-Turkic sense (Tajikistan being the exception), than the one that they share with Russia through their Imperial- and Soviet-era pasts with all that entails for future policymaking.

This aligns with Turkiye’s interests, which envisages becoming a Eurasian Great Power through its new influence in Central Asia via TRIPP and the OTS, and that in turn advances the US’ grand strategic goal of containing Russia.

Tyler Durden Thu, 12/04/2025 - 03:30

German Army Launches Major Security Probe After 20,000 Rounds Stolen From Civilian Truck In Unsecured Parking Lot

Zero Hedge -

German Army Launches Major Security Probe After 20,000 Rounds Stolen From Civilian Truck In Unsecured Parking Lot

Authored by Thomas Brooke via Remix News,

Approximately 20,000 rounds of Bundeswehr ammunition were stolen from a civilian transport truck after the driver parked overnight in an unsecured industrial-area lot near Burg, outside Magdeburg, the German defense ministry confirmed on Monday.

The incident, first reported by the platform Meetingpoint Jerichower Land and developed by Der Spiegel, has prompted a joint investigation by the Bundeswehr and local police amid concerns the theft was not random but carried out by perpetrators who may have been monitoring the vehicle.

According to the ministry, the driver — employed by a civilian company contracted to move ammunition for the armed forces — opted to stop for the night and reportedly checked into a hotel, leaving the cargo unattended. When he arrived at a nearby barracks the following morning, soldiers immediately noticed signs of tampering and reviewed the manifests.

An initial assessment found that approximately 10,000 live 9mm pistol rounds, 9,900 blank rifle cartridges, and several smoke grenades were missing in what officials described as a serious security breach.

“A particular danger comes from 9mm cartridges: This is the most widely used caliber worldwide for pistols and submachine guns. It is live, lethal ammunition,” Meetingpoint wrote.

“We are taking the incident very seriously and are thoroughly investigating the matter. We are supporting the investigating authorities in all further steps,” a spokesperson for the Bundeswehr’s support division told the site.

According to Der Spiegel, early findings suggest the transport company violated Bundeswehr safety protocols. Contracts require that ammunition transports be staffed with two drivers, ensuring one is continuously observing the vehicle during any stop. In this case, investigators say the unplanned overnight stop was not authorized and security rules were not followed.

Bundeswehr sources believe the theft was unlikely to be opportunistic. Instead, they fear the cargo may have been targeted, with the offenders waiting for the moment the vehicle was left unattended.

The police investigation is ongoing, and the ministry has not yet commented on whether organized crime or extremist groups are suspected.

The driver has not been publicly identified, and neither Germany’s federal defense ministry nor investigators have disclosed whether disciplinary or contractual measures will follow against the transport company.

Read more here...

Tyler Durden Thu, 12/04/2025 - 02:00

How Obama Paved The Way For Trump's Venezuelan Killings

Zero Hedge -

How Obama Paved The Way For Trump's Venezuelan Killings

Authored by Jim Bovard

The Trump administration’s killings of scores of Venezuelans are justifiably provoking outrage. Secretary of War Pete Hegseth recently proclaimed, "We have only just begun to kill narco-terrorists." Donald Trump and Hegseth are cashing a blank check for carnage that was written years earlier by President Barack Obama.

In his 2017 farewell address, Obama boasted, "We have taken out tens of thousands of terrorists." Drone strikes increased tenfold under Obama, helping fuel anti-US backlashes in several nations.

As he campaigned for the presidency in 2007, then-Senator Barack Obama declared, "We will again set an example for the world that the law is not subject to the whims of stubborn rulers." Many Americans who voted for Obama in 2008 expected a seachange in Washington. However, from his first weeks in office, Obama authorized widespread secret attacks against foreign suspects, some of which spurred headlines when drones slaughtered wedding parties or other innocents.

On February 3, 2010, Obama’s Director of National Intelligence Dennis Blair stunned Washington by announcing that the administration was also targeting Americans for killing. Blair revealed to a congressional committee the new standard for extrajudicial killings:

“Whether that American is involved in a group that is trying to attack us, whether that American has—is a threat to other Americans. We don’t target people for free speech. We target them for taking action that threatens Americans.”

But “involved” is a vague standard—as is “action that threatens Americans.” Blair stated that “if we think that direct action will involve killing an American, we get specific permission to do that.” Permission from who?

via Reuters

Obama’s first high-profile American target was Anwar Awlaki, a cleric born in New Mexico. After the 9/11 attacks, Awlaki was showcased as a model moderate Muslim. The New York Times noted that Awlaki “gave interviews to the national news media, preached at the Capitol in Washington and attended a breakfast with Pentagon officials.” He became more radical after he concluded that the Geoge W. Bush administration’s Global War on Terror was actually a war on Islam. After the FBI sought to squeeze him into becoming an informant against other Muslims, Awlaki fled the country. He arrived in Yemen and was arrested and reportedly tortured at the behest of the U.S. government. After he was released from prison eighteen months later, his attitude had worsened and his sermons became more bloodthirsty.

After the Obama administration announced plans to kill Awlaki, his father hired a lawyer to file a challenge in federal court. The ACLU joined the lawsuit, seeking to compel the government “to disclose the legal standard it uses to place U.S. citizens on government kill lists.” The Obama administration labeled the entire case a “State Secret.” This meant that the administration did not even have to explain why federal law no longer constrained its killings. The administration could have indicted Awlaki on numerous charges but it did not want to provide him any traction in federal court.

In September 2010, The New York Times reported that “there is widespread agreement among the administration’s legal team that it is lawful for President Obama to authorize the killing of someone like Mr. Awlaki.” It was comforting to know that top political appointees concurred that Obama could justifiably kill Americans. But that was the same “legal standard” the Bush team used to justify torture.   

The Obama administration asserted a right to kill U.S. citizens without trial, without notice, and without any chance for the marked men to legally object. In November 2010, Justice Department attorney Douglas Letter announced in federal court that no judge had legal authority to be “looking over the shoulder” of Obama’s targeted killing. Letter declared that the program involves “the very core powers of the president as commander in chief.”

The following month, federal judge John Bates dismissed the ACLU’s lawsuit because “there are circumstances in which the Executive’s unilateral decision to kill a U.S. citizen overseas” is “judicially unreviewable.” Bates declared that targeted killing was a “political question” outside the court’s jurisdiction. His deference was stunning: no judge had ever presumed that killing Americans was simply another “political question.” The Obama administration’s position “would allow the executive unreviewable authority to target and kill any U.S. citizen it deems a suspect of terrorism anywhere,” according to Center for Constitutional Rights attorney Pardiss Kebriae.

On September 30, 2011, a U.S. drone attack killed Awlaki along with another American citizen, Samir Khan, who was editing an online Al Qaeda magazine. Obama bragged about the lethal operation at a military base later that day. A few days later, administration officials gave a New York Times reporter extracts a peek at the fifty-page secret Justice Department memo. The Times noted, “The secret document provided the justification for [killing Awlaki] despite an executive order banning assassinations, a federal law against murder, protections in the Bill of Rights and various strictures of the international laws of war, according to people familiar with the analysis.” The legal case for killing Awlaki was so airtight that it did not even need to be disclosed to the American public.

Two weeks after killing Awlaki, Obama authorized a drone attack that killed his son and six other people as they sat at an outdoor café in Yemen. Anonymous administration officials quickly assured the media that Abdulrahman Awlaki was a 21-year-old Al Qaeda fighter and thus fair game. Four days later, The Washington Post published a birth certificate proving that Awlaki’s son was only 16-years old and had been born in Denver. Nor did the boy have any connection with Al Qaeda or any other terrorist group. Robert Gibbs, Obama’s former White House press secretary and a top advisor for Obama’s reelection campaign, later shrugged that the 16-year-old should have had “a far more responsible father.”

Regardless of that boy’s killing, the media often portrayed Obama and his drones as infallible. A Washington Post poll a few months later revealed that 83% of Americans approved of Obama’s drone killing policy. It made almost no difference whether the suspected terrorists were American citizens; 79% of respondents approved of preemptively killing their fellow countrymen, no judicial niceties required. The Post noted that “77 percent of liberal Democrats endorse the use of drones, meaning that Obama is unlikely to suffer any political consequences as a result of his policy in this election year.” The poll results were largely an echo of official propaganda. Most folks “knew” only what the government wanted them to hear regarding drones. Thanks to pervasive secrecy, top government officials could kill who they chose and say what they pleased. The fact that the federal government had failed to substantiate more than 90% of its terrorist accusations since 9/11 was irrelevant since the president was omniscient.

On March 6, 2012, Attorney General Eric Holder, in a speech on targeted killings to a college audience, declared, “Due process and judicial process are not one and the same, particularly when it comes to national security. The Constitution guarantees due process, it does not guarantee judicial process.” TV comedian Stephen Colbert mocked Holder, quipping “Trial by jury, trial by fire, rock, paper scissors, who cares? Due process just means that there is a process that you do.” One purpose of due process is to allow evidence to be critically examined. But there was no opportunity to debunk statements from anonymous White House officials. For the Obama administration, “due process” meant little more than reciting certain phrases in secret memos prior to executions.

Holder declared that the drone attacks “are not [assassinations], and the use of that loaded term is misplaced; assassinations are unlawful killings. Here, for the reasons I have given, the U.S. government’s use of lethal force in self-defense.” Any termination secretly approved by the president or his top advisers was automatically a “lawful killing.” Holder reassured Americans that Congress was overseeing the targeted killing program. But no one on Capitol Hill demanded a hearing or investigation after U.S. drones killed American citizens in Yemen. The prevailing attitude was exemplified by House Homeland Security Committee Chairman Peter King (R-NY): 

“Drones aren’t evil, people are evil. We are a force of good and we are using those drones to carry out the policy of righteousness and goodness.”

Obama told White House aides that it “turns out I’m really good at killing people. Didn’t know that was gonna be a strong suit of mine.” In April 2012, The New York Times was granted access for a laudatory inside look at “Terror Tuesday” meetings in the White House:

“Every week or so, more than 100 members of the government’s sprawling national security apparatus gather, by secure video teleconference, to pore over terrorist suspects’ biographies and recommend to the president who should be the next to die.”

It was a PowerPoint death parade. The Times stressed that Obama personally selected who to kill next:

“The control he exercises also appears to reflect Mr. Obama’s striking self-confidence: he believes, according to several people who have worked closely with him, that his own judgment should be brought to bear on strikes.”

Commenting on the Times’ revelations, author Tom Engelhardt observed, “We are surely at a new stage in the history of the imperial presidency when a president (or his election team) assembles his aides, advisors and associates to foster a story that’s meant to broadcast the group’s collective pride in the new position of assassin-in-chief.”

On May 23, 2013, Obama, in a speech on his targeted killing program at the National Defense University in Washington, told his fellow Americans that “we know a price must be paid for freedom”—such as permitting the president untrammeled authority to kill threats to freedom. The president declared that “before any strike is taken, there must be near-certainty that no civilians will be killed or injured—the highest standard we can set.”

Since almost all the data on victims was confidential, it was tricky to prove otherwise. But NBC News acquired classified documents revealing that the CIA was often clueless about who it was killing. NBC noted, “Even while admitting that the identities of many killed by drones were not known, the CIA documents asserted that all those dead were enemy combatants. The logic is twisted: If we kill you, then you were an enemy combatant.” Killings are also exonerated by counting “all military-age males in a strike zone as combatants…unless there is explicit intelligence posthumously proving them innocent.” And U.S. bureaucrats have no incentive to track down evidence exposing their fatal errors. The New York Times revealed that U.S. “counterterrorism officials insist…people in an area of known terrorist activity…are probably up to no good.” The “probably up to no good” standard absolved almost any drone killing within thousands of square miles in Pakistan, Yemen, and Somalia. Daniel Hale, a former Air Force intelligence analyst, leaked information revealing that nearly 90% of people who were killed in drone strikes were not the intended targets. Joe Biden’s Justice Department responded by coercing Hale into pleading guilty to “retention and transmission of national security information,” and he was sent to prison in 2021.

Sovereign immunity entitles presidents to kill with impunity. Or at least that is what presidents have presumed for most of the past century. If the Trump administration can establish a prerogative to preemptively kill anyone suspected of transporting illicit narcotics, millions of Americans could be in the federal cross-hairs. But the Trump administration is already having trouble preserving total secrecy thanks to controversies over who ordered alleged war crimes. Will Trump’s anti-drug carnage end up torpedoing his beloved Secretary of War Hegseth and his own credibility with Congress, the judiciary, and hundreds of millions of Americans who do not view White House statements as divine revelations handed down from Mt. Sinai?

Tyler Durden Wed, 12/03/2025 - 23:25

Japan's Sanae Takaichi Seeks To Ease Deepening Row With China, Reaffirms Taiwan Status Quo

Zero Hedge -

Japan's Sanae Takaichi Seeks To Ease Deepening Row With China, Reaffirms Taiwan Status Quo

Japanese Prime Minister Sanae Takaichi finally appears to be backing down amid recent escalating punitive measures imposed on Tokyo by China in the areas of trade, diplomacy, and tourism. Beijing has been dialing up the pressure for weeks, after the new prime minister nearly a month ago told Japanese parliament an attack on Taiwan by the People's Liberation Army could pose a "survival-threatening situation" for which Tokyo would be justified in intervening militarily. 

Feeling immense pressure and blowback from the provocative prior comments, Takaichi on Wednesday while again addressing parliament reverted back to providing clarity that Japan's official position on the self-ruled island remains unchanged. "The Japanese government's basic position regarding Taiwan remains as stated in the 1972 Japan-China Joint Communique, and there has been no change to this position," Takaichi said.

Prime Minister Sanae Takaichi, pool image/NY Times

The historic 1972 communique spells out that "the government of the People’s Republic of China reiterates that Taiwan is an inalienable part of the territory of the People’s Republic of China" before affirming that the Japanese government "fully understands and respects this stand."

The communique further states that Japan "firmly maintains its stand under Article 8 of the Potsdam Declaration." China also often cites the Cairo Declaration of November 1943 as having the legal status of a binding treaty. The Cairo Declaration requires that Japan return any territory seized from China during war. The two documents formed the basis of the 20th century post-war WW2 era normalization of ties between the two historic enemies and rivals.

Since last month, China's Foreign Ministry has been insisting on a full retraction and apology from PM Takaichi over her 'defend Taiwan' remarks - which drew a sharp rebuke from ministry spokesperson Mao Ning. "Stop crossing the line and playing with fire, retract the wrongful remarks and deeds and honor its commitments to China with real action," Ning said at the time. 

On Monday ministry spokesperson Lin Jian repeated the demand, urging Japan to "learn the lessons of history, do soul searching, take seriously what it has heard from the Chinese side, simply retract the erroneous remarks as it should and take practical steps to honor its political commitments to China." Takaichi's fresh remarks recognizing the status quo on Taiwan, which was spurred by questions from lawmakers, could soften the crisis - yet Beijing is likely to still keep up the pressure given her words stopped short of a formal retraction and apology.

"President Xi is trying to stir up trouble wherever he can and intimidate countries like Japan," Senator John Cornyn (R-TX) told ZeroHedge on Wednesday, calling Japan an important US ally. He described that he views the US stance of Strategic Ambiguity on Taiwan as "not necessarily a bad thing" because "we want President Xi to think not just once or not just twice but many times before he pulls the trigger which unfortunately I think is preparing to do."

Sen. Josh Hawley (R-MO) also responded on the question of allowing China to believe that it owns Taiwan. "We shouldn't do that," he told us. "Taiwan has a right to be independent, they are a free and independent nation, they should remain that way. Whether we given them security guarantees if a different question."

"We should tell them 'you don't have any right to conquer them'. It plays into China's hands to treat the Taiwanese as if they're owned by China," Hawley emphasized, declaring further that "we ought to be clear about it."

Getty Images/Fox News

China of course remains Japan's biggest trading partner, and has already taken harsh retaliatory measures including the curbing of Japanese seafood imports, the cancellation of films and concerts - as well as cultural exchange programs, as well as the drastic move of urging Chinese citizens to avoid all travel to Japan.

In addition to Japan's vital seafood industry being impacted, the restaurant scene is also feeling the fallout:

Diners once had to book weeks in advance to secure a table at Toya, a popular Japanese restaurant in Beijing.

But business has taken a sharp turn, with more than 60 reservations cancelled since mid-November, said owner Kazuyuki Tanioka, who has served omakase menus in the Chinese capital for over a decade.

And the film industry, per the same report: 

The spat has also led to the postponement of Japanese film releases in China, the abrupt cancellation of concerts by Japanese musicians and the suspension of official exchanges.

A frequent traveller to Japan, Yan Jun, faced a dilemma when China advised its citizens to avoid visiting Japan. Chinese airlines proceeded to cut hundreds of Japan-bound flights this month.

China's PLA Navy and Coast Guard have also increased their presence near Taiwan and in and near disputed islands and waters. The latest incident involving Japanese and Chinese vessels happened near a group of geopolitically sensitive islands in the East China Sea on Tuesday, as we documented previously.

Chinese state media is also meanwhile highlighting that Takaichi faces backlash from within Japan as well. "Several Japanese lawmakers and prominent scholars gathered Tuesday evening at the Members' Office Building of the House of Councillors to urge Prime Minister Sanae Takaichi to retract her recent erroneous remarks on Taiwan," Xinhua writes Wednesday.

"The meeting was held under the theme of demanding Takaichi withdraw her remarks linking a 'survival-threatening situation' for Japan to the Taiwan question and return to the starting point of the normalization of Japan-China relations," the report notes. If Takaichi does in the end back down, offering the requested retraction and apology, it will be seen in the region as a huge diplomatic 'win' for China after flexing considerable economic might. 

Liam Cosgrove contributed to this report.

Tyler Durden Wed, 12/03/2025 - 23:00

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