UAE Warns Israel's West Bank Annexation Is 'Red Line' - Would Destroy Abraham Accords

The United Arab Emirates (UAE) has become the first Arab country to warn Israel over the "red line" of annexing any part of the occupied West Bank. Importantly, the UAE had also been the very first country to sign on to Trump's Abraham Accords, making peace with Israel and normalizing relations back in 2020. It was then followed by Bahrain and Morocco.

The UAE's foreign ministry on Wednesday warned it could pull out of the Abraham Accords, and "end the pursuit of regional integration". Lana Nusseibeh, the foreign ministry's Assistant Minister for Political Affairs, declared that "Annexation in the West Bank would constitute a red line for the UAE."

via AFP

"It would severely undermine the vision and spirit of the Accords, end the pursuit of regional integration, and would alter the widely-shared consensus on what the trajectory of this conflict should be - two states living side by side in peace, prosperity, and security," the statement continued.

Certainly it would also jeopardize Washington's hoped-for path toward Saudi-Israeli normalization, but the Gaza war has clearly put this on the back-burner, making it a prospect possibly years or decades down the line.

The UAE is responding to several new Israeli media reports saying Prime Minister Benjamin Netanyahu is mulling major 'payback' to those countries - especially in Europe - seeking to recognize a 'State of Palestine'.

He will gather top ministers for a discussion on the implications of international recognition of a Palestinian state on Thursday, where they will consider extending Israeli sovereignty over at least some of the West Bank.

"Netanyahu will be joined by Defense Minister Israel Katz, Foreign Minister Gideon Sa’ar, Justice Minister Yariv Levin, National Security Minister Itamar Ben Gvir, and Finance Minister Bezalel Smotrich," local reports indicate.

Jerusalem Post describes that "Several Israeli officials previously reported that Israel is considering annexation in the West Bank as a possible response to France and other countries recognizing a Palestinian state."

This could include recognition over all places where there are currently Jewish settlements, or areas like the Jordan Valley - which has long been sought by Israeli hardline nationalists.

Smotrich’s “annexation plan” is nothing more than a public declaration of open-air colonialism. Standing on stolen soil, he calls on Netanyahu to make a “historic decision” to impose full Israeli sovereignty over the West Bank, erasing any pretense of negotiation and codifying… pic.twitter.com/V1kBSAzHu7

— Thomas Keith (@iwasnevrhere_) September 3, 2025

Despite Gulf states like the UAE now vigorously denouncing this possible move, they've done little to intervene politically or economically, but have only sponsored things like airdrops (especially Jordan) and humanitarian convoys for hungry Palestinians in the besieged Gaza enclave.

Tyler Durden Wed, 09/03/2025 - 16:40

Is The Fed Setting Up Trump To Be The Scapegoat?

Submitted by Shanmuganathan Nagasundaram,

In Greek mythology, Scylla and Charybdis are two mythical sea monsters guarding a narrow strait. Navigating the sail successfully would require not getting too close to one monster while trying to avoid the other. The job of the Federal Reserve has often been compared to (mistakenly, though) the above, wherein they have to navigate the economy on its dual mandate of maximum employment and price stability. The Phillips Curve is the most standard model that depicts this supposed inverse relationship between unemployment and price inflation.

Neo-Keynesian economics has broadened the interpretation of the Phillips curve from unemployment to include economic growth. So, the narrative is that if the economy is operating below potential in terms of GDP growth rate or employment, then the Federal Reserve would reduce the Fed Funds rate to stimulate the economy. If price inflation exceeds the 2% mandate, the Federal Reserve would raise the Fed Funds rate to dampen the price inflationary forces.

But what happens if the growth is below par or unemployment numbers are high, AND concurrently, price inflation numbers are high? Technically, the economic scenario is called “Stagflation”.

Just a year back, when Powell was quizzed about the possibilities, he quipped, “I don’t see the stag or the -flation, actually.” 

A short twelve months later, that is precisely the situation in front of Powell.

How do the Keynesians explain “Stagflation”?

They don’t; they hope that it doesn’t occur during their tenures.

Paul Volcker was the last Fed Chairman who had to handle a similar situation, and even he would not want to step into the shoes of Powell today. The condition is much worse on a logarithmic scale. The solution though remains the same: dramatically hike interest rates. However, it cannot be implemented today, as it would collapse the system due to the substantial debt.

But let us step back a bit and examine the entire hypothesis of this employment-price inflation tradeoff.

At the outset, followers of Austrian Economics would know that this Phillips Curve and what it represents is almost as mythical as the sea monsters. It is the combination of Cantillon effects and the misrepresentation of price inflation that creates this illusion of trade-offs between employment and price stability.

Examining the US price Index from the year 1800 to 1913 reveals a period of continuously falling prices. The price index was down by more than 40% by 1913, as compared to the starting year 1800. By some estimates, this fall in prices was even higher as the product basket was continuously becoming better and not even strictly comparable. Most major innovations we can think of – telephones, automobiles, airplanes, computers, mass production, modern medicine, military hardware, etc – happened during this period. The transition of the US from an erstwhile colony of the British Empire to the dominant superpower also occurred in this period. If falling prices had caused the Great Depression of 1929 to 1946, as is popularly believed, or as the Phillips curve implies, the entire 19th century (1801-1900) should have been an extended depression. Instead, what we actually witnessed was a boom of unparalleled proportions in modern history, except for what has happened in China starting in 1990 to date.

How does one reconcile the Phillips Curve, and indeed, Keynesian Economics, with the above? One simply cannot. So, what does all this have to do with today?

A note on the current stage, i.e., “The Oncoming Inflationary Bust,” would be in order before proceeding. The US Government has incurred unprecedented debt and liabilities since the 2008 GFC. The National debt is at $37 trillion and growing at $3+ trillion per year, while the unfunded liabilities are an additional $200+ trillion. If the Federal government were to pay its entire income towards servicing this debt (ignoring the interest part), it would take nearly 50 years to extinguish this debt. A sovereign credit rating of anything other than JUNK would be outright disregard for the fundamentals. The only way this debt is going to be resolved would be through a hyperinflationary meltdown of the economy. Barring a Milei-style presidency, that is the most probable outcome.

However, the mainstream media narrative even today is that Trump wants to lower interest rates to achieve even higher growth rates, from already what is the “best performing economy ever”. On the other hand, Powell intends to hold the rates steady to protect the purchasing power of the US Dollar. The economic truth is that both narratives are flawed.

• Even a 0% rate today cannot prevent a bust of the financial systems that is floating on a sea of asset bubbles – an AI bubble that dwarfs the NASDAQ 2000 bubble; a housing bubble that is far bigger than the 2008 housing bubble; and a US bond bubble that is bigger than these two bubbles combined. The bust at this point is inevitable and imminent – the timeframes would be a few months and not a few years.

• The current rate of 4.25% to 4.5% is way too low to contain price inflation meaningfully. The National debt is increasing at an even higher pace than before, and monetary inflation is a natural outcome, indicating that the rates are very accommodative.

Why Rate Cuts are Imminent

Whether Trump is aware of the above is debatable, but unquestionably, Powell understands the deep crisis the US Economy and the US Dollar face in the months ahead. The Fed even telegraphed the oncoming crisis in one of its own publications.

For more than 50 months in a row, the core inflation rate – the Fed’s preferred measure – has been above the target 2%. The June 2025 number was 2.82% and under normal conditions, the US Fed would have aggressively hiked the rates. The only reason why they do not do so is “Fiscal Dominance”.

What is Fiscal Dominance? It is easy to understand through the actual scenario in front of the Trump administration today. The expected National Debt by the end of FY2026 would be $40+ trillion. A 5% rate on the National rate would imply an interest outgo of more than $2 trillion, and this would be more than 40% of the expected Federal income of nearly $5 trillion. The above 5% rate would be a very low figure by historical standards, and it’s only in the post-2008 GFC that this would be considered high.

This would mean that nearly 40% of the Federal Income goes towards servicing the interest if the interest rate were just 5%. A couple of years down the line, and even without a major crisis, we could be looking at close to 50%. Given that any crisis would be a double-whammy, i.e., the Federal revenue will decline dramatically and the debt will skyrocket, this 50% is almost guaranteed under Trump 2.0.

This is Fiscal Dominance, and is the primary reason why Trump wants a reduction of 300 bps in the Fed Funds rate and why Powell will agree at least to a limited extent. Actually, “is agreeing” is a better way to look at it, as the price inflation is well above the Fed mandate for more than four years now, and Powell, despite a series of hikes, is nowhere close to meeting the target.

The National Debt on ARMS

It is now almost sure that the 10-year and 30-year treasuries will diverge from the direction of the Fed Funds rate. So even if Powell indulges in 2 or 3 cuts during the rest of 2025, the direction of the long-term treasuries is unlikely to reverse and will continue to move higher. The Trump administration seems to understand this all too well. As Treasury Secretary Bessent suggested, the plan seems to involve placing the National Debt on floating rates, with the “hope” that the US Fed will not have to contend with price inflation over the next three years under Trump 2.0.

But what in effect they are doing is the equivalent of putting the National Debt on an Adjustable Rate Mortgage System (ARMS). This would effectively remove the legs from which a significant uptick in price inflation can be handled.

Despite the seeming differences, both Trump and Powell are working towards destroying the US Dollar, with Trump decidedly at a more frenzied pace than would otherwise be the case. With Trump upping the ante and threatening to fire a voting member, Ms. Lisa Cook (who, not coincidentally, is opposed to a reduction in rates at this juncture), it would not be entirely surprising if the Fed pretends to oppose the cutting of rates at a pace that would be acceptable to Trump. Trump, who can never back out of a challenge, would stage a coup of the US Fed by stealth, and the supposed independence would then appear to be compromised.

Looking ahead – What this means for different Asset Classes.

More of what has been happening since 2022, and at an accelerated pace as well. I had outlined the impact of the fiscal and monetary policies in my book, and that is summarized below.

Trump is unwittingly setting himself up to be the fall guy for what has essentially been the blunders of the US Federal Reserve.

It would be uncharacteristic of the Fed not to utilize the opportunity and pass the buck, as it has almost always done.

What about the supposed critical issue of the Fed’s Independence?

Truth to be told, the independence of the Free World’s monetary system was eliminated in 1913 with the formation of the Federal Reserve.

The Independence of the Fed was effectively abolished in 1971 when Nixon closed the Gold Window.

What Trump is doing today is just putting the final nail in the coffin of the US Dollar.

Shanmuganathan Nagasundaram is an Austrian/Libertarian Economist based in India. His latest book is ‘RIP USD: 1971 – 202X …and the Way Forward’

Tyler Durden Wed, 09/03/2025 - 16:20

Labor Market Crosses Critical Threshold: For First Time Since 2021 There Are More Unemployed Than Job Openings

Ahead of today's JOLTs reported, which as usual lags the monthly jobs report (due Friday) by one month, markets were largely focused on it as an indication of whether and how big negative prior month jobs revisions would be (as a reminder, July and June saw the biggest negative 2-month jobs revision since Covid, prompting Powell to go full dovish at Jackson Hole).

Well, moments ago the BLS reported that in July the number of job openings tumbled by another 176K from a downward revised 7.357MM(originally 7.437MM), to 7.181MM, which not only came in far below the median consensus estimate of 7.380MM and below 28 estimates from the 29 economists polled by Bloomberg...

... but was also the second lowest going back to the covid crash, with just Sept 24 lower.

Regular readers will surely recall what other notable event took place in Sept 2024 which needed a sharp deterioration in the jobs market as validation (for those who don't remember, please reread this "Brace For Another Huge Negative Payrolls Revision, Greenlighting A 50bps September Rate Cut"). Yes: that's when the "apolitical" Fed "unexpectedly" cut a jumbo 50bps, just two months before the election, and the collapsing labor market served as cover... Just as it does again now.

Going back to today's report, according to the BLS, the number of job openings decreased in health care and social assistance (-181,000); arts, entertainment, and recreation (-62,000); and mining and logging (-13,000).

Of the industries noted above, government was the highlight: as shown in the chart below, government job openings crashed to pre-covid levels as demand for parasites has evaporated.

In  the context of the broader jobs report, it appears the after four years of the US labor market dodging the bullet, luck may have run out because whereas in June the labor market was still supply-constrained, when there were 342K more openings than jobs in the US, in July we are finally back to demand constrained, with 55k fewer job openings than unemployed workers, the first negative print this series since April 2021.

As we discussed previously, The US never entered a recession in a period when there were more job openings than unemployed workers (i.e. the job market was supply constrained). As of this moment, we know it is no longer supply constrained and is instead demand constrained. 

Said otherwise, in July the number of job openings to unemployed finally dropped back under 1.0x.

While the job openings data was very ugly and potentially the first harbinger of the coming recession - things were more normal on the hiring side where the number of new hires rebounded by 41K to 5.308MM from the lowest print in a year, while at the same time the number of people quitting their jobs was unchanged at 3.208MM.

How to make sense of this ongoing deterioration in the labor market? 

It likely has to do with the DOL - which recently lost its previous commissioner after Trump fired her last month - starting to factor in the collapse in the shadow labor market, the one dominated by illegal aliens, and the replacement of illegals with legal, domestic workers which in turn is pushing the labor market into a demand-constrain imbalance. The question is how long until this appears in much weaker than expected payrolls prints - we may find out as soon as this Friday when we get the full jobs report for August, and more importantly, the full year revisions on Sept 9 just days later, which if we are correct will show another 600K-900K in jobs that were never there and were simply imagined by the Biden DOL, in the process greenlighting not only a 25bps rate cut, but potentially a jumbo 50bps... just like exactly one year ago.  

Tyler Durden Wed, 09/03/2025 - 16:11

Florida To End All Vaccine Mandates

Authored by T.J. Muscaro via The Epoch Times (emphasis ours),

Florida’s surgeon general, Dr. Joseph Ladapo, announced on Sept. 3 that he was working to eliminate all vaccine mandates from state law.

Florida Governor Ron DeSantis gestures during a news conference Tuesday, Aug. 12, 2025, in Tampa, Fla. AP Photo/Chris O'Meara

“The Florida Department of Health, in partnership with the governor, is going to be working to end all vaccine mandates in Florida law,” he said at a press conference. “All of them.”

“Every last one is wrong and drips with disdain and slavery,” Ladapo said.

“Who am I, as a government, or anyone else, or who am I as a man standing here now to tell you what you should put in your body? Who am I to tell you what your child should put in their body?

“I don’t have that right. Your body is a gift from God. What you put into your body is because of your relationship with your Body and your God.”

The surgeon general reiterated that neither he nor the government had the right to force vaccines upon people and urged those listening to take that power away from the government and make their own informed decisions.

He then said that the Florida Department of Health was able to start the process by striking down rules established by his predecessors that mandated several vaccines, and then his department would work with Florida Gov. Ron DeSantis and the state’s lawmakers to eliminate the rest of the mandates.

“We need to end it,” he said. ”It’s the right thing to do, and it'll be wonderful for Florida to be the first state to do it.”

Ladapo made his announcement as Florida Gov. Ron DeSantis announced the creation of the state’s Make America Healthy Again (MAHA) Commission and Medical Freedom Protections.

The commission will be chaired by his wife, Casey DeSantis.

Tyler Durden Wed, 09/03/2025 - 15:40

Beige Book Sees "Little Change" In Econ Activity: Notes Rising Wages As Immigrant Labor Shrinks While "Inflation" Mentions Tumble

Many were shocked (again) after the latest CPI and PPI data confirmed that the experts were once again dead wrong, and instead of the widely expected inflation tsunami, Trump's tariffs have so far sparked only sporadic disinflation, which will only become more acute as the home prices slide accelerates. And yet, anyone who read our Beige Book analysis from April (not to mention our accurate prediction from last June that "The Experts Are All Wrong About Inflation Under A Trump Presidency") would have known just that: as we laid out, "Beige Book Finds Inflation Mentions Tumble To 3 Year Low" which was the clearest indication that despite the prevailing narrative, rising prices is simply not a thing businesses across the US are worried about. We got further confirmation of this last month, when the latest Beige Book found no runaway inflation (again) but instead that sentiment in the economy splitting along party lines.

Fast forward to today when the latest, September, Beige Book was released, and it revealed that 8 of the 12 Fed districts reported "little or no change in economic activity since the prior Beige Book period" when as we reported then "economic activity increased slightly from late May through early July" , while four Districts reported "modest growth." And yes, there were no regions reporting a slowdown, hardly the apocalypse so many liberals have been expecting. This is also a solid improvement from the May period, when the Beige Book found that half of Districts reported at least slight declines in activity.

The Beige Book noted that across districts, "contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices" and "contacts frequently cited economic uncertainty and tariffs as negative factors. New York reported that “consumers were being squeezed by rising costs of insurance, utilities, and other expenses." Maybe New Yorkers should look for other cities in which to live then?

The Fed's contacts also observed the following responses to the consumer pullback: retail and hospitality sectors offered deals and promotions to help price-sensitive consumers stretch their dollars, supporting steady demand from domestic leisure tourists but not offsetting falling demand from international visitors.

The auto sector noted flat to slightly higher sales, while consumer demand increased for parts and services to repair older vehicles. Manufacturing firms reported shifting to local supply chains where feasible and often using automation to cut costs.

Curiously, the Beige Book made its first mention of AI, saying that "the push to deploy AI partly explains the surge of data center construction—a rare strength in commercial real estate noted by the Philadelphia, Cleveland, and Chicago Districts. Atlanta and Kansas City reported that data centers had increased energy demand in their Districts." Notably, it has also sent electricity prices soaring.

In one year, this will be the most popular chart on this site pic.twitter.com/h93gWXMoNL

— zerohedge (@zerohedge) August 11, 2025

Overall, sentiment was mixed among the Districts. Most firms either reported little to no change in optimism or expressed differing expectations about the direction of change from their contacts.

Focusing on labor markets, the Beige book reported the following:

• Eleven Districts described little or no net change in overall employment levels, while one District described a modest decline.
• Seven Districts noted that firms were hesitant to hire workers because of weaker demand or uncertainty.
• Moreover, contacts in two Districts reported an increase in layoffs, while contacts in multiple Districts reported reducing headcounts through attrition—encouraged, at times, by return-to-office policies and facilitated by greater automation, including new AI tools.
• Most Districts mentioned an increase in the number of people looking for jobs.

Notably, half of the Districts noted that contacts reported a reduction in the availability of immigrant labor, with New York, Richmond, St. Louis, and San Francisco highlighting its impact on the construction industry. And clearly tied to that, half of the Districts described modest growth in wages, while most of the others reported moderate growth. 

As for prices, it should come as no surprise by now that the runaway inflation everyone was expecting just isn't there. Here is Beige book confirmation

• Ten districts characterized price growth as moderate or modest. The other two Districts described strong input price growth that outpaced moderate or modest selling price growth.
• Nearly all districts noted tariff-related price increases, with contacts from many Districts reporting that tariffs were especially impactful on the prices of inputs.
• Contacts in multiple Districts also reported rising prices for insurance, utilities, and technology services.  
• While some firms reported passing through their entire cost increases to customers, some firms in nearly all Districts described at least some hesitancy in raising prices, citing customer price sensitivity, lack of pricing power, and fear of losing business.

The best part: tariff deflation: "In some cases, as highlighted by Cleveland and Minneapolis, firms reported being under pressure to lower prices because of competition, despite facing increased input costs."

In short, for yet another month, the sky is not falling.

Here is a snapshot of highlights by Fed District:

• Boston: Economic activity expanded slightly overall, but consumer spending was flat. Employment was down slightly, while wages and prices increased modestly. Home sales increased moderately from a year earlier. The outlook remained cautiously optimistic on balance, although tariff-related uncertainty dimmed the outlook for consumer spending.
• New York: Economic activity declined slightly as tariff-related uncertainty continued to weigh on businesses. Employment in the region was mostly unchanged, and wage growth remained modest. Selling prices rose at a moderate pace, marking some acceleration since the previous reporting period, and input prices rose strongly.
• Philadelphia: Business activity increased modestly in the current Beige Book period. Employment levels held steady, and wages rose at modest pre-pandemic rates. Firm prices rose moderately, straining budgets for many households and small businesses, and inflation expectations are higher still. In addition, tariffs and federal budget cuts are expected to add additional stress. Still, expectations for future growth broadened among most firms.
• Cleveland: Fourth District business activity increased slightly in recent weeks, and contacts expected activity to rise modestly in the months ahead. Manufacturers reported flat demand because of uncertainty, and retailers said sales were flat because of affordability concerns. Contacts said cost growth remained robust, while their selling prices increased modestly.
• Richmond: The regional economy grew modestly in recent weeks. Consumer spending drove the overall growth as activity in non-consumer facing sectors of the economy were flat to down slightly. In particular, manufacturing activity was down modestly this cycle. Employment levels were largely unchanged, and wage growth remained moderate. Price growth remained moderate, overall, despite some pickup in price growth in the services sector.
• Atlanta: The Sixth District economy declined slightly. Employment remained steady, and wage pressures moderated. Prices rose moderately. Consumer spending slowed, leisure travel fell, and business travel was flat. Home sales rose slightly; commercial real estate weakened. Transportation and manufacturing declined modestly. Lending at District banks increased. Energy activity rose.
• Chicago: Economic activity in the Seventh District increased modestly. Consumer spending increased moderately; manufacturing activity increased modestly; employment and business spending increased slightly; nonbusiness contacts saw no change in activity; and construction and real estate activity declined slightly. Prices rose moderately, wages rose modestly, and financial conditions loosened slightly. Prospects for 2025 farm income were unchanged.
• St. Louis: Economic activity and employment levels have remained unchanged while wages and prices have increased at a faster pace in the recent past. Contacts continue to express a high degree of uncertainty and concern about the impact of immigration policies on labor supply; they expect prices to accelerate over the next year due to tariffs. The outlook remains slightly pessimistic, but deterioration has subsided.
• Minneapolis: District economic activity contracted slightly. Employment fell as labor demand softened. Wage pressures were moderate, and prices ticked up modestly. Consumer spending fell as price sensitivity rose. Manufacturing also fell, with wide variation among contacts. Commercial and residential construction improved slightly, and home sales rose slightly. Agricultural conditions remained weak given poor commodity prices and despite good crop conditions.
• Kansas City: Economic activity was generally flat across the District. Employment declined modestly, and wage pressures remained subdued, although growth in non-wage benefit expenses caused total labor costs to rise. Input price growth was broad-based and contributed to moderate growth in selling prices, declines in profit margins, and expectations of sustained price pressures.
• Dallas: Economic activity in the Eleventh District economy rose modestly, buoyed by a pickup in nonfinancial services and manufacturing activity. Loan demand grew, but the housing market remained weak. Employment was flat and staffing firms noted slow hiring activity. Price pressures persisted, particularly in the manufacturing sector. Outlooks improved but there was widespread trepidation regarding shifting trade policy, high interest rates, and more restrictive immigration policy.
• San Francisco: Economic activity edged down slightly. Employment levels were down slightly. Wages grew somewhat, and prices rose modestly. Conditions in agriculture, retail trade, and consumer and business services sectors eased slightly. Manufacturing activity declined modestly. Conditions in residential and commercial real estate were largely unchanged, and lending activity was stable.

And finally, confirming that contrary to conventional wisdom the economic picture appears to have improved notably April, the latest Beige Book found that despite media narratives to the contrary, mentions of inflation remained near a 4 year lows, at just 8 in September, and up from the cycle low of 5 in July (effectively before the Biden inflationary explosion period) while mentions of "slow" tumbled from a two year high of 56 in July to just 34, indicating that according to the Fed respondents, neither inflation nor an economic are major concerns any more. 

All of which suggests that the US economy - while hardly on fire as it was during the hyperinflationary period of Biden's admin - continues to chug along and is hardly collapsing as so many Trump foes would like to see; and it certainly is not seeing prices explode higher.

Tyler Durden Wed, 09/03/2025 - 15:00

Crypto Yield Products Keep Disappointing Investors

Authored by Shaaran Lakshminarayanan via CoinTelegraph.com,

DeFi gold products are fundamentally broken. 

Despite Tether Gold having more than $800 million locked in tokenized gold with Paxos Gold sitting on almost as much, yields average under 1% while traditional finance generates 3%-5% on the same asset. The supposed innovation of blockchain technology somehow made gold less profitable.

It’s disappointing that DeFi promised to democratize sophisticated financial strategies, but when it comes to gold, we have watered-down products that underperform investment approaches that are a century old.

Token printing masquerades as innovation

Most DeFi gold protocols don’t generate real yield — they print tokens. Many gold-linked DeFi tokens have dangled double-digit “emission” yields to attract deposits. Those juicy annual percentage rates (APYs) rely on printing new tokens rather than generating new income, so when the token price drops or the emissions stop, yields often crash to nothing. 

The protocol wasn’t creating value but redistributing existing value through inflation, a classic Ponzi structure disguised as innovation.

This pattern repeats across gold DeFi, with protocols launching unsustainable emission rewards to attract total value locked (TVL), then watching yields crater when reality sets in. Token emissions create an illusion of productivity while destroying long-term value by diluting existing holders when protocols can’t generate real returns.

Forced complexity destroys returns

Gold investors want gold exposure. DeFi forces them into volatile asset pairs and liquidity pools that guarantee suboptimal outcomes. During gold rallies, liquidity providers suffer impermanent loss as their gold gets automatically sold for stablecoins, missing the upside they invested in gold to capture.

These LP structures are also capital inefficient, forcing half of an investor’s funds into low-yield stablecoins instead of gold exposure. The risk-reward calculation becomes absurd. Investors accept impermanent loss risk and reduced gold exposure for yields barely exceeding what they could earn holding stablecoins directly.

Missing the real opportunity

DeFi protocols lack the infrastructure to replicate traditional finance’s strategies at scale. Gold futures often trade at premiums to spot prices, especially in contango markets. Sophisticated traders can capture this spread by holding physical gold and shorting futures contracts, precisely what DeFi should excel at automating.

The result: Institutional players continue earning attractive returns on gold while DeFi investors get stuck with inflationary rewards and forced complexity. Real money stays in traditional finance while DeFi fights over scraps.

The path forward

New protocols finally address these fundamental flaws through market-neutral arbitrage strategies instead of token printing. Because of this shift, they generate real yield by capturing contango spreads.

Investors can get pure gold exposure with institutional-grade returns. This approach democratizes strategies that previously required $5 million minimums and direct institutional relationships, making hedge fund opportunities accessible with just $1,000 and a wallet.

Keeping it simple

The best DeFi products eliminate unnecessary complexity, giving gold investors exposure without forced diversification. Single-sided staking preserves investment thesis while generating yield through arbitrage strategies. 

This explains why tokenized gold underperforms decades-old physical gold strategies. The industry prioritized rapid deployment over sustainable economics, TVL growth over actual returns.

Market consequences

The gold DeFi failure reflects broader issues with how we think about yield generation. Too many protocols prioritize TVL growth over sustainable economics and optimize for launch metrics instead of long-term value creation. 

Real solutions require infrastructure investment in proper derivatives trading capabilities, risk management systems and institutional-grade execution. That’s a lot harder than launching another liquidity mining program.

The market is maturing, however, as investors increasingly recognize the difference between real yield and token emissions, demanding actual value creation over higher APY numbers.

The adoption catalyst

The next wave of DeFi adoption will come from real yield, not speculation, as traditional finance faces increasing regulatory pressure and institutional investors seek alternatives that deliver comparable returns with better transparency. Gold represents the perfect testing ground with its well-understood asset class, documented arbitrage opportunities, and proven demand for yield.

The question isn’t whether gold DeFi will work. It’s which protocols will finally deliver on the original promise with existing technology, proven strategies, and a ready market.

The gold rush continues, but this time it just might strike gold.

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

Tyler Durden Wed, 09/03/2025 - 14:40

Valuations Are Extreme: Navigating A Bubble

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Some pundits warn that, given extremely high stock valuations, one should sell everything. Yet, despite having the same information, other pundits show little concern and believe the bull market has further to run. The stark contradiction of opinions in today’s market leaves many investors understandably confused and anxious about what to do.

Based on valuations, there’s no denying we’re in a bubble. That’s noteworthy by itself, but it doesn’t tell us what will happen next. Tomorrow could be the day when valuations start returning to their historical norms. Or, valuations might become even more extreme, and the bull market could surpass all expectations before finally falling back to reality. 

We believe that in this kind of environment, an active investment approach is preferable. Such an approach recognizes that as valuations increase, the risk/reward ratio worsens for investors, making adherence to technical analysis, risk tolerances, investment rules, and trading signals increasingly important. With this understanding of the growing risks, along with the potential for high short-term returns and the tools to navigate and limit downturns, we can continue to realize gains during strong bull markets and shift to a protective mode when a bear market begins.

We start by warning you about today’s high valuations. Then, we take a U-turn and explain why selling now might not be the best move.

Valuations In Perspective

The first graph below shows that P/E and CAPE (P/E based on the last 10 years of earnings) are significantly higher than all other levels since 1950, except for 1999. They now match those from 2022. Although not shown, they are also well above the peak of 1929.

The following graph from our Bull/Bear Report shows that average valuations, as measured by an index of eight ratios, are at their highest level ever.

Slightly different from the previous graph, but the next graph delivers the same message.

66 of the 100 largest stocks by market cap (S&P 100) have P/Es over 30, and more than a quarter have a P/E over 50.

The Warren Buffett indicator, which measures the ratio of total market capitalization to GDP, is at an all-time high.

The equity risk premium is close to zero, meaning the reward for holding stocks over bonds is negligible.

After reviewing those graphs, it’s tempting to sell. The issue is that all the valuation metrics we use, along with many others, are unreliable trading tools. In the long term, high valuations often predict poor returns; however, in the short term, expensive valuations can become even more expensive.

Valuations Are Poor Timing Tools

In August 1997, the CAPE ratio reached 32.77, matching the previous record high set just before the Great Depression. While some experts at the time warned that the market would crash, as it did in 1929, the bull market largely ignored these fears. From August 1997 to the peak of the dot-com bubble in 2000, the market increased by more than 50%. Moreover, the extremely high CAPE ratio soared past the former peak to 44.

Those who exited the market in 1997 were ultimately rewarded in 2003 when the S&P 500 traded at a price below their selling point. However, an investor with a strong set of trading tools could have participated in most of the 50% increase, mitigated a good portion of the ensuing decline, and ended up well ahead of those who moved to cash early.

To demonstrate how a simple strategy might work, we use one of our trusted tools: the weekly 13- and 34-week moving averages. When the shorter-term average is above the longer-term average, the market is in a bullish trend. Conversely, it’s time to reduce risk when the shorter average drops below the longer-term average. The graph below shows the 1997 valuation record, market peak, and the activation of the sell signal.

From 1997 to the peak in 2000, our indicator issued three sell signals. As a result, reducing risk in late 1998 would have caused brief underperformance. The second signal, which appeared in late 1999, was short-lived and had minimal impact on overall performance. The third, and most significant, signal occurred after the S&P index dropped from 1,550 to 1,400. Holding onto stocks past the peak would have meant sacrificing some gains. However, the sell signal prevented much of the 50% decline. Despite the volatility in returns, this trading strategy would have outperformed staying in cash from 1997 to 2003.

Predicting Returns

Valuations serve as necessary wealth management tools when considering long-term perspectives. The graph below illustrates the monthly relationship between the CAPE ratio and the forward ten-year annualized returns. It demonstrates that, over ten-year periods, investors tend to benefit from purchasing at low valuations and face poor outcomes when buying at high valuations. As indicated by the red shading, the current CAPE suggests a bleak ten-year outlook, particularly since an investor can buy a risk-free 10-year Treasury note yielding over 4%.

While history suggests that total returns over the next ten years will likely be poor, it doesn’t reveal the path of those returns. Could the market decline by 60% in 2026, followed by a sustained bullish run for the remaining nine years, or might it rally for five more years before encountering turbulence?

The scatter plot below indicates that returns over the next six months are unpredictable, with no resemblance to those for the ten-year time frame. As we highlight, annualized returns from prior instances with similar valuations to today’s ranged from nearly -30% to +30%.

Summary

Records are meant to be broken, as they say. Just because valuations are reaching prior records doesn’t mean they won’t surpass them. They did in 1929 and 1999, and they may do it again soon. Conversely, given our current high valuations, we should expect poor future returns. This juxtaposition of statements leads us to take a cautious approach.

We understand both sides of the coin. While risks are increasing, there is a secondary risk for those not participating that markets could continue to steam ahead. Given the uncertainty, we prefer to stick with the trend. That doesn’t mean we are blindly buying the market. No, we are long the market and keeping a keen eye on our many indicators. We are able and willing to sell and reduce our risks when the time presents itself.

We will not call the top perfectly. And anyone who claims they can is lying. Our goal is to ride out the bull to and likely slightly past its peak, reduce our exposure, and remain underallocated to stocks until the market shows clear signs of a bottoming process. We do not know when the market will peak or how deep the correction will be. However, we are comforted that we have the right tools and rules to help us gain most of the upside and limit much of the downside.

Tyler Durden Wed, 09/03/2025 - 14:00

Beige Book - August 2025

Most of the twelve Federal Reserve Districts reported little or no change in economic activity since the prior Beige Book period—the four Districts that differed reported modest growth. Across Districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices. Contacts frequently cited economic uncertainty and tariffs as negative factors. New York reported that "consumers were being squeezed by rising costs of insurance, utilities, and other expenses." Contacts observed the following responses to the consumer pullback. Retail and hospitality sectors offered deals and promotions to help price-sensitive consumers stretch their dollars—supporting steady demand from domestic leisure tourists but not offsetting falling demand from international visitors. The auto sector noted flat to slightly higher sales, while consumer demand increased for parts and services to repair older vehicles. Manufacturing firms reported shifting to local supply chains where feasible and often using automation to cut costs. The push to deploy AI partly explains the surge of data center construction—a rare strength in commercial real estate noted by the Philadelphia, Cleveland, and Chicago Districts. Atlanta and Kansas City reported that data centers had increased energy demand in their Districts. Overall, sentiment was mixed among the Districts. Most firms either reported little to no change in optimism or expressed differing expectations about the direction of change from their contacts.

Labor Markets

Eleven Districts described little or no net change in overall employment levels, while one District described a modest decline. Seven Districts noted that firms were hesitant to hire workers because of weaker demand or uncertainty. Moreover, contacts in two Districts reported an increase in layoffs, while contacts in multiple Districts reported reducing headcounts through attrition—encouraged, at times, by return-to-office policies and facilitated, at times, by greater automation, including new AI tools. In turn, most Districts mentioned an increase in the number of people looking for jobs. However, half of the Districts noted that contacts reported a reduction in the availability of immigrant labor, with New York, Richmond, St. Louis, and San Francisco highlighting its impact on the construction industry. Half of the Districts described modest growth in wages, while most of the others reported moderate growth. Two Districts noted little or no change in wages.

Prices

Ten Districts characterized price growth as moderate or modest. The other two Districts described strong input price growth that outpaced moderate or modest selling price growth. Nearly all Districts noted tariff-related price increases, with contacts from many Districts reporting that tariffs were especially impactful on the prices of inputs. Contacts in multiple Districts also reported rising prices for insurance, utilities, and technology services. While some firms reported passing through their entire cost increases to customers, some firms in nearly all Districts described at least some hesitancy in raising prices, citing customer price sensitivity, lack of pricing power, and fear of losing business. In some cases, as highlighted by Cleveland and Minneapolis, firms reported being under pressure to lower prices because of competition, despite facing increased input costs. Most Districts reported that their firms were expecting price increases to continue in the months ahead, with three of those Districts noting that the pace of price increases was expected to rise further.
emphasis added

Polymarket Cleared For US Adoption After CFTC Ruling, CEO Says

Just weeks after Donald Trump Jr. invested in Polymarket and joined the advisory board, the crypto-based prediction markets platform - that rose to prominence during the 2024 presidential election - has reportedly been cleared to enter the United States.

"Polymarket is the largest prediction market in the world, and the U.S. needs access to this important platform," said Donald Trump Jr in mid-August

 "Polymarket cuts through media spin and so-called 'expert' opinion by letting people bet on what they actually believe will happen in the world... bringing truth and transparency to everyone – including the U.S."

And now, according to a post on X by Polymarket CEO Shane Coplan, "Polymarket has been given the green light to go live in the USA by the CFTC"

"Credit to the Commission and Staff for their impressive work.

This process has been accomplished in record timing.

Stay tuned"

As The Block reports, the Commodity Futures Trading Commission’s Division of Market Oversight and the Division of Clearing and Risk said Wednesday they have taken a no-action position regarding swap data reporting and recordkeeping regulations for event contracts in response to a request from QCX, a designated contract market, and QC Clearing, a derivatives clearing organization.

The no-action letter applies in "narrow circumstances", the statement said, and is comparable to no-action letters issued for other similarly situated designated contract markets and derivatives clearing organizations.

After a federal investigation was dropped earlier this summer, Polymarket said in July it planned to re-enter the U.S. with the acquisition of derivatives exchange QCEX.

"The divisions will not recommend the CFTC initiate an enforcement action against either entity or their participants for failure to comply with certain swap-related recordkeeping requirements and for failure to report to swap data repositories data associated with binary option transactions and variable payout contract transactions executed on or subject to the rules of QCX LLC and cleared through QC Clearing LLC, subject to the terms of the no-action letter," the statement said.

The number of new markets on Polymarket surged in July, with over 11,500 markets representing a 44% month-over-month increase...

...although a far cry from their January peak. But maybe now that Americans don't need VPNs to access it, things will change.

Additionally, in June, Elon Musk’s X said it was “joining forces” with the prediction platform, and accessibility to the US market directly will surely build that conduit.

Tyler Durden Wed, 09/03/2025 - 13:40

IAEA Discovers Traces Of Depleted Uranium At Syrian Sites Bombed By Israel

Via The Cradle

The International Atomic Energy Agency (IAEA) has detected uranium traces in Syria during inspections of a site Israel destroyed in 2007, according to a confidential report circulated to member states this week.

The samples, taken last year from one of three unnamed sites "allegedly functionally related" to Deir Ezzor, contained a large quantity of natural uranium particles, the report seen by Reuters said. 

Image: Reuters

It explained that the particles were of anthropogenic origin, meaning, though not enriched, they had undergone chemical processing.

The report said Syrian authorities told inspectors they had "no information that might explain the presence of such uranium particles," while confirming that the current government granted the IAEA renewed access to the site in June to collect further samples.

IAEA Director-General Rafael Grossi met Syrian President Ahmad al-Sharaa the same month. The report states that "Syria agreed to cooperate with the Agency, through full transparency, to address Syria’s past nuclear activities."

Grossi asked for Syrian help to return to Deir Ezzor "in the next few months" to review documentation and interview those linked to earlier projects.

The nuclear watchdog said it intends to proceed with visits to Deir Ezzor and will evaluate results from other environmental samples. 

"Once this process has been completed and the results evaluated, there will be an opportunity to clarify and resolve the outstanding safeguards issues related to Syria's past nuclear activities and to bring the matter to a close," the report noted.

The government of former Syrian president Bashar al-Assad had maintained that the Deir Ezzor site was a conventional military base. 

However, in 2011, the agency concluded the structure was "very likely" an undeclared reactor that Damascus should have declared.

The IAEA’s report comes amid wider concerns over Israel’s use of uranium-based weapons in other West Asian theaters. Scientific studies have documented abnormal uranium residues across West Asia in the aftermath of US and Israeli bombardments. 

Measurements by Green Audit in Fallujah, Lebanon, and Gaza revealed isotope ratios inconsistent with those of natural uranium. These findings were later confirmed by independent laboratories in Europe and the UK. 

Tests detected enriched uranium in soil, bomb craters, air filter dust, and biological samples. In 2021, a study published in Nature reported a marked rise in uranium enrichment levels in Gaza’s environment since 2008.

Researchers concluded that enriched uranium, a substance that does not occur in nature, must have originated from weapons deployed by the US in Iraq and Israel in Lebanon and Gaza.

Some sources are alleging the detected uranium particles are due to a prior secretive nuclear program under the Assad government...

The IAEA found processed uranium particles at a Syrian site bombed by Israel in 2007, contradicting Assad’s claim it was only a military base. Syria’s new leadership has allowed further tests, and IAEA chief Rafael Grossi is pushing for deeper investigations to uncover the truth… pic.twitter.com/L8IbW4GWMI

— Open Source Intel (@Osint613) September 2, 2025

Further reports reinforce these findings. In October 2024, Lebanese health official Raif Reda said Israel bombed Beirut’s southern suburbs with uranium-based munitions and urged that samples be sent to the UN for investigation. 

Lebanese outlets noted the use of BLU-109 missiles, whose casings could contain depleted uranium. In June 2025, Fars News Agency reported that Israeli bombs dropped on Iran during the 12-day war left debris showing preliminary signs of depleted uranium. 

In Gaza, a UN Human Rights Commission report documented Israeli strikes with GBU-31, GBU-32, and GBU-39 bombs between 9 October and 2 December 2023 against residential buildings, a school, refugee camps, and a market - guided munitions that can be manufactured with depleted uranium casings.

Tyler Durden Wed, 09/03/2025 - 13:20

ConocoPhillips To Slash Up To 25% Of Workforce

ConocoPhillips, one of the largest independent exploration and production (E&P) companies in the U.S., told employees earlier that it plans to reduce its overall workforce by around 25%. The announcement comes as U.S. economic data show signs of softening, such as the disappointing jobs figures earlier today, which have pushed the odds of a 25-basis-point interest rate cut later this month to nearly 96%. WTI crude prices are trading lower amid increased concerns about OPEC supply. 

A company spokesperson confirmed to Reuters that ConocoPhillips will cut its workforce by 20% to 25%. At the end of 2024, the company employed 11,800 people globally. A 25% reduction would put nearly 3,000 jobs at risk.

Here's more from Reuters:

Employees received an email this morning containing a video message from CEO Ryan Lance detailing the plans, three sources told Reuters. The company is set to hold a townhall meeting on Thursday morning at 9 a.m. central time, the sources said.

ConocoPhillips provided no details on the reasoning behind the upcoming cuts. However, JOLTS data released earlier today suggest that a 25-basis-point interest rate cut on Sept. 17 may be justified, given the continued deterioration in the labor market.

Mounting economic uncertainty, combined with the Trump administration's push to "Drill Baby Drill" mandate to unlock America's fullest energy potential and drive down costs, along with steady OPEC supply, has weighed on WTI prices, which dipped into the $63/bbl range by the lunch hour.

. . . 

Tyler Durden Wed, 09/03/2025 - 12:20

Schumer, Jeffries Call For Bipartisanship To Avoid Government Shutdown

Authored by Jackson Richman via The Epoch Times (emphasis ours),

Democratic leaders in the Senate and House are calling for bipartisanship to avoid a government shutdown.

Senate Minority Leader Chuck Schumer (D-N.Y.), joined by Sen. Ben Ray Lujan (D-N.M.) , speaks to reporters at the Capitol, in Washington on April 4, 2025. AP Photo/J. Scott Applewhite

Congress returned this week from its August recess, and government funding runs out at the end of the month.

“The only way to avoid a shutdown is to work in a bipartisan way, with a bill that can get both Republican and Democratic votes in the Senate,” Senate Minority Leader Chuck Schumer (D-N.Y.) wrote in a Sept. 2 letter to colleagues.

Schumer accused GOP lawmakers of wanting to “go-at-it-alone.”

House Minority Leader Hakeem Jeffries (D-N.Y.) also warned of a government shutdown if Republicans don’t work with Democrats.

“House Democrats are very clear: We’re not down with that,” he said. “And so if what we see next month is simply a continuation of that reckless right-wing Republican approach, we won’t be down with it next month either.”

The National Republican Congressional Committee, the main fundraising and campaign arm of the House GOP, criticized Jeffries for threatening a government shutdown.

“Democrat ‘Leader’ Hakeem Jeffries admitted his radical party is plotting another government shutdown because they’d rather play politics than govern,” the group’s spokesperson, Mike Marinella, said in a statement.

“While Republicans are focused on keeping the government open and working for the American people, Democrats are threatening chaos to protect their extremist agenda.”

In his letter, Schumer criticized the Trump administration for seeking to unilaterally undo government funding.

“With the Trump Administration’s attempt of the so-called ’pocket rescission,' it is clear that Republicans are prioritizing chaos over governing, partisanship over partnership, and their own power over the American people,” he wrote.

In accordance with the Impoundment Control Act, a rescission is when the White House requests Congress to reverse government funding that has been appropriated by Congress. It must be approved within 45 days of the request being sent to Congress, or else the money must be spent. With the fiscal year set to end on Sept. 30, a rescission request would take effect without Congress approving it.

The Trump administration sent a request to Congress to rescind $4.9 billion in foreign assistance.

“Last night, President Trump cancelled $4.9 billion in America Last foreign aid using a pocket rescission,” the Office of Management and Budget wrote on X on Aug. 29.

Senate Appropriations Committee Chairwoman Patty Murray (D-Wash.) said that the request was a way for the administration to go around Congress.

“Republicans should not accept Russ Vought’s brazen attempt to usurp their own power,” she said in an Aug. 29 statement, referring to the director of the Office of Management and Budget.

“No president has a line item veto—and certainly not a retroactive line item veto.

“Congress should reject this request and this ridiculous, illegal maneuver—and instead insist on making decisions over spending through the bipartisan appropriations process.”

In his letter, Schumer said Democrats are ready to work with Republicans to fund the government.

“Senate Democrats have shown firsthand that we are willing to work in a bipartisan way to keep our government open by advancing bipartisan appropriations bills,” he wrote.

“However, the Trump administration is waging an all-out war against Congress’ Article I authority and the constitutional balance of power. Senate Republicans must decide: stand up for the legislative branch or enable Trump’s slide toward authoritarianism.”

Schumer said that he has spoken with Jeffries and the two “are aligned on our shared priorities for September: where Republicans obstruct, we press forward; where they sow division, we answer with unity; where they threaten shutdown, we hold them accountable.”

Tyler Durden Wed, 09/03/2025 - 12:00

Today, in the Calculated Risk Real Estate Newsletter: Q2 Update: Delinquencies, Foreclosures and REO

A brief excerpt:

Even with the recent weakness in house prices, it is important to note that there will NOT be a surge in foreclosures that could lead to cascading house price declines (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.

With substantial equity, and low mortgage rates (mostly at a fixed rates), few homeowners will have financial difficulties.

But it is still important to track delinquencies and foreclosures.
...
This graph shows the nominal dollar value of Residential REO for FDIC insured institutions based on the Q2 FDIC Quarterly Banking Profile released last week. Note: The FDIC reports the dollar value and not the total number of REOs.

The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) was up 15% YOY from $766 million in Q2 2024 to $852 million in Q2 2025. This is still historically extremely low.

There is much more in the article.

New Card Data Shows Exactly Why Cracker Barrel Pivoted Back To Old Logo 

Shareholders of Cracker Barrel Old Country Store learned very abruptly last month just how toxic wokeism - what many call the "woke mind virus" - has infected top levels of management, becoming a major liability for the brand and potentially threatening the very existence of the restaurant chain.

CEO Julie Felss Masino's attempt to strip the beloved American aesthetic from Cracker Barrel's logo with a soulless rebrand sparked backlash nationwide.

It took less than a week for the restaurant chain to pivot back, and it is yet another marketing blunder for corporate America. 

We're not questioning Masino's intelligence, but many in corporate America have already learned, after Bud Light nearly destroyed itself a few years ago with an ad campaign featuring a male TikToker pretending to be a woman. The saying goes, "go woke, go broke." 

This brings us to new data from Bloomberg Second Measure on debit and credit cards, showing that Masino's decision to abandon the restaurant chain's half-century-old logo - long a symbol of rural Americana and the "old country store" experience - sparked the beginning of a boycott.

According to Second Measure, Cracker Barrel's declining sales during the political firestorm, which even drew posts from President Trump and fiery commentary from rival chain Steak' n Shake, "weren't due to a seasonal or industrywide trend but rather to the logo change."

The series of events: 

• August 21: Cracker Barrel Faces "Bud Light" Moment

• August 22: Cracker Barrel's Board Should Fire The CEO Immediately

• August 26: Cracker Barrel Nukes Woke Logo, Brings Back "Old Timer" In MAGA Cultural War Victory

Steak' n Shake... 

Logo is a symptom of a bigger problem!

The $700 million remodel is insane! It's bland, soulless, and an unnecessary waste of money. Instead, use this money to keep prices down to support American families. And while you're at it, go back to making fresh biscuits every day.… https://t.co/HFGe5G7cqy

— Steak 'n Shake (@SteaknShake) August 26, 2025

That said, had Cracker Barrel remained defiant and refused to bend the knee, the boycott could have been far more severe and potentially ruined the brand. Even the company's founder called Masino's rebrand "crazy."

The takeaway is that those infected with the woke mind virus in corporate America are becoming massive liabilities to shareholders.

And as for all those college kids with freshly minted woke degrees from the Ivy Leagues, well, good luck.

Tyler Durden Wed, 09/03/2025 - 11:40

Appeals Court Allows EPA To Cancel $16 Billion In Climate Grants

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

A divided federal appeals court on Sept. 2 ruled that the Trump administration may terminate $16 billion in grants to nonprofits intended to finance climate-related projects.

Environmental Protection Agency Administrator Lee Zeldin testifies before the House Subcommittee on Environment on Capitol Hill in Washington on May 20, 2025. (Madalina Vasiliu/The Epoch Times) (Environmental Protection Agency Administrator Lee Zeldin

The three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit voted 2–1 to reverse U.S. District Judge Tanya Chutkan’s injunction preventing the federal government from withholding the funds.

In the case Climate United Fund v. Citibank, environmentalists sued the Environmental Protection Agency (EPA)—which had custody of the funds—and its administrator, Lee Zeldin.

The groups said they were unlawfully denied access to the funds that were previously awarded to them and that the funding freeze created hardships by making it difficult for them to operate.

In March, the EPA terminated the grants amid concerns about a lack of oversight and transparency. The program, known as the Greenhouse Gas Reduction Fund or “green bank,” was approved under the 2022 Inflation Reduction Act and saw the EPA award $20 billion in grants to eight entities to launch climate-related projects.

In announcing the cancellation of the program, Zeldin described it as a “gold bar” scheme.

He said the decision to end the program was based on “substantial concerns regarding program integrity, objections to the award process, programmatic fraud, waste and abuse, and misalignment with the agency’s priorities.”

Writing for the majority, Circuit Judge Noemi Rao said the nonprofits’ arguments did not belong in federal district court.

The district court lacked jurisdiction, or authority, “to hear claims that the federal government terminated a grant agreement arbitrarily or with impunity,” the judge said.

The district court “abused its discretion in issuing the injunction,” and the grantees are unlikely to win their case on the merits “because their claims are essentially contractual,” she said.

The case should have been brought in the U.S. Court of Federal Claims, which has exclusive jurisdiction to hear such cases, Rao said.

Katabella Roberts contributed to this report.

Tyler Durden Wed, 09/03/2025 - 11:20

German Elections Thrown Into 'Immense Chaos' After Wave Of AfD Deaths Rises To Seven

German elections in the western state of North Rhine-Westphalia have been thrown into chaos ahead of a Sept. 14 election - after a spate of candidates for Germany's right-wing AfD have died in recent weeks - with the total now at seven. And while local authorities say there is no evidence of foul play, officials are now scrambling to shred and reprint ballots as campaigns for the deceased have been suspended. 

According to Welt, Hans-Joachim Kind, 80, a direct candidate in the Kremenholl district, died of natural causes. There has been no cause of death disclosed for four other candidates in the region that has a population of 18 million - as police told Germany's DPA news agency that the initial four were either from natural causes, or were not being divulged for over privacy concerns.

Two reserve candidates died following the initial four, followed by the death of Kind. The reserve candidates were René Herford, who had a pre-existing liver condition and died of kidney failure, and Patrick Tietze, who committed suicide.

Now, ballots must be reprinted and successors appointed, causing what WELT described as "immense chaos." 

AfD co-leader Alice Weidel reposted a claim by retired economist Stefan Homburg that the number of candidates' deaths was "statistically almost impossible."

4 tote AfD-Kandidaten innerhalb von 2 Wochen bei den NRW-Kommunalwahlen: Wolfgang Seitz (Rheinberg), Ralph Lange (Blomberg), Stefan Berendes (Bad Lippspringe), Wolfgang Klinger /Schwerte), alle 4 starben plötzlich und unerwartet.
Eine erstaunliche Häufung von Todesfällen, oder? pic.twitter.com/RoqbLf8tJ3

— Peter Borbe (@PeterBorbe) August 30, 2025

AfD deputy state chairman in North Rhine-Westphalia, Kay Gottschalk, told WELT, that "We will, of course, investigate these cases with the necessary sensitivity and care," however there is "no indication" that this is "murder or anything similar," as some of the deceased had "pre-existing medical conditions." 

The party - which Germany's domestic spy agency classified as a 'right-wing extremist organization' in May, grew to Germany's second-largest in February's federal elections, before pausing that description due to an appeal pending in court. 

In 2022, AfD polled at just 5.4% in a region that's home to Germany's industrial base in the Ruhr valley - and which has suffered steep job losses. Now, the party polled at 16.8% in state federal elections last February, while more recent polls suggest the party could nearly match that today. 

"Either Germany votes AfD, or it is the end of Germany," said tech billionaire Elon Musk, who threw his support behind AfD in recent days.

Tyler Durden Wed, 09/03/2025 - 11:00

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was little changed at 7.2 million in July, the U.S. Bureau of Labor Statistics reported today. Over the month, both hires and total separations were unchanged at 5.3 million. Within separations, both quits (3.2 million) and layoffs and discharges (1.8 million) were unchanged.
emphasis added

The following graph shows job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for July; the employment report this Friday will be for August.

Click on graph for larger image.

Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

The spike in layoffs and discharges in March 2020 is labeled, but off the chart to better show the usual data.

Jobs openings decreased in July to 7.18 million from 7.36 million in June.
The number of job openings (black) were down 4% year-over-year. 

Quits were down 5% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").

White House Has Backup Strategy If Trump's Tariffs Are Overturned: Bessent

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

Treasury Secretary Scott Bessent said the White House has plenty of tools at its disposal to implement President Donald Trump’s global tariffs if the Supreme Court does not uphold his use of a 1977 emergency powers law.

Treasury Secretary Scott Bessent speaks to reporters during a briefing at the White House on April 29, 2025. Travis Gillmore/The Epoch Times

The U.S. Court of Appeals for the Federal Circuit ruled 7–4 on Aug. 29 against the current administration’s decision to invoke the International Emergency Economic Powers Act (IEEPA) as justification for levies on foreign goods unveiled in April. The court’s decision does not take effect until Oct. 14, allowing the White House ample time to appeal the decision to the Supreme Court.

The IEEPA grants the president broad authority to regulate international economic transactions—regulating imports and exports, freezing foreign assets, or halting financial transactions—after declaring a national emergency.

In a Labor Day interview with Reuters, Bessent stated that while he is confident the high court will uphold the president’s reciprocal tariff agenda, the administration has various options available.

“I’m confident the Supreme Court ... will uphold the president’s authority to use IEEPA. And there are lots of other authorities that can be used—not as efficient, not as powerful,” Bessent said.

He referred to Section 338 of the Tariff Act of 1930, also known as the Smoot-Hawley Tariff Act. It contains a trade provision that authorizes the president to impose new tariffs or additional duties of up to 50 percent on foreign products entering the United States for a period of five months if they are determined to threaten domestic commerce.

Bessent said he is planning a legal brief for the U.S. Solicitor General to highlight the urgency of stopping the flow of fentanyl into the country. Pointing to the approximately 70,000 fentanyl-linked deaths per year in the United States, he questioned what would be considered an emergency.

“If this is not a national emergency, what is?“ he said. ”When can you use IEEPA if not for fentanyl?”

The senior administration official also intends to argue that persistent trade imbalances will ultimately reach a critical threshold, triggering more immense consequences for the U.S. economy.

“We’ve had these trade deficits for years, but they keep getting bigger and bigger,” he said. “We are approaching a tipping point ... so preventing a calamity is an emergency.”

The last time the United States registered a trade surplus was in 1975.

In July, the U.S. goods trade deficit widened by $18.7 billion to $103.6 billion, the largest gap in four months. Imports rose by more than 7 percent to $281.5 billion while exports dipped 0.1 percent to $178 billion.

Long-term U.S. Treasury yields popped on Sept. 2, driven by concerns that the federal government will be forced to repay tariff income and forego potentially trillions of dollars in tariff revenues.

Yields on the 20- and 30-year government bonds surged about 5 basis points to around 4.92 percent and 4.98 percent, respectively.

“Global trading partners will no doubt find it premature to be celebrating just yet, but we'll be interested in seeing whether the Treasury market comes under any further pressure if the US has to hand back already received tariff revenues,” ING economists said in a Sept. 1 note.

In this fiscal year, the federal government has collected $183.1 billion in tariff revenues, including $31 billion in August.

Wall Street in New York City on April 4, 2025. Samira Bouaou/The Epoch Times

Looking ahead, according to projections from the Committee for a Responsible Federal Budget, tariff revenues could rise to as much as $50 billion per month, or 1.5 percent of GDP, “before declining some as supply chains adjust.”

The Yale Budget Lab estimates the effective U.S. tariff rate is 18.6 percent, the highest since 1933.

‘Performative’ Relationships

Bessent also shrugged off the apparent cordial relations between China, India, and Russia at the recent Shanghai Cooperation Organization as “performative.”

“It’s more of the same,” Bessent said, adding that Beijing and New Delhi are “fueling the Russian war machine.”

“I think at a point we and the allies are going to step up,” he said.

Last week, the president’s additional 25 percent tariff on India went into effect, bringing the total import duty to 50 percent on many imports entering the United States. The administration doubled down on punitive levies over India’s enormous purchases of Russian crude oil.

Trump, writing in a Sept. 1 Truth Social post, stated that India has offered to reduce its tariffs to zero percent.

“India buys most of its oil and military products from Russia, very little from the U.S.,” Trump said. “They have now offered to cut their tariffs to nothing, but it’s getting late. They should have done so years ago. Just some simple facts for people to ponder!”

He noted that the United States does “very little business with India, but they do a tremendous amount of business with us.”

According to the U.S. Trade Representative’s Office, the U.S. goods trade deficit with India was $45.8 billion last year, up 5.9 percent from 2023.

India, the only nation slapped with secondary tariffs for Russian oil purchases, has been surpassed by China as the world’s largest buyer of discounted petroleum products from Moscow.

Bessent defended the administration’s decision not to impose secondary tariffs on Beijing. In an Aug. 19 interview with CNBC’s “Squawk Box,” Bessent stated that China was already the Russian energy sector’s client.

“China importing it is suboptimal,” Bessent said. “But if you go back and look pre-2022, pre-invasion, 13 percent of China’s oil was already coming from Russia. Now it’s 16 [percent]. So, China has a diversified input of their oil.”

India, on the other hand, dramatically accelerated its purchasing following the breakout of the war in Ukraine, Bessent noted.

In 2021, India imported $2.31 billion of Russian crude oil, according to United Nations COMTRADE data. By 2024, imports surged to almost $53 billion.

The tariff pause between the United States and China, meanwhile, was extended last month until Nov. 10.

Tyler Durden Wed, 09/03/2025 - 09:25

EU Accelerating Toward Collapse: Merz, Draghi, And Lagarde Reveal Europe's Crisis Path

Submitted by Thomas Kolbe

The Chancellor seems to have collided with reality during the summer break. Merz sees the German social system in deep crisis. Meanwhile, his political allies in Brussels are calling for an increase in the very dose of poison that is making Europe sick.

Let’s be blunt: Large parts of the political elite have a fractured relationship with reality. This applies equally to the economic decay of Germany and the EU, as well as to the public communication of strategic political goals, which are systematically obscured. Open criticism of the course could cause the political fairy tale to collapse faster than reality seeps into public opinion.

Merz and the Welfare State

All the more remarkable are the warning words of Chancellor Friedrich Merz during his Saturday appearance at the CDU state party conference in Lower Saxony. “I am not satisfied with what we have achieved so far – it must be more, it must be better.”

Hear that! A faint tremor of self-criticism from the Chancellor. Rare, indeed. Yet the statement raises the question: what exactly does Merz mean by “achievements”? Is he referring to the so-called investment booster, supposedly providing marginal relief to the German economy while it teeters on collapse? Or does he mean the massive debt packages and widening financing gaps, most likely to be closed with tax hikes?

In his speech in Osnabrück, Merz later spoke unusually clearly about the state of the welfare system: “The welfare state, as we have it today, is no longer financially sustainable given what we can deliver economically.” A blunt diagnosis, leaving little to be desired in clarity.

There was, however, no mention of a market-oriented turn, trust in individual solutions, personal responsibility, or rapid bureaucratic reduction. The message seems to be: stay the course.

Moments of Honesty

Merz also spoke unequivocally about citizen welfare payments: it cannot continue like this. 5.6 million people receive the payments. Many could work but do not, he said. A reality that politics usually avoids.

A tentative attempt to openly name the precarious state of German social insurance. In times when political sugar-coating is routine, it’s almost a stroke of luck when a leading politician at least partially acknowledges economic realities.

Have the latest economic data perhaps shaken Merz and his colleagues in Berlin? GDP shrank again in the second quarter, and the outlook remains bleak. With the state intervening via massive credit programs and new debt hitting about 3.5% this year, the private economy is contracting at 4–5%. Calling this a recession would be euphemistic — we are in a depression.

More EU Centralism

While the Chancellor stumbled through Germany’s harsh economic reality, EU representatives launched media trial balloons.

It was Mario Draghi, the EU’s political all-rounder, who easily alternates between former Italian PM and ECB chief, presenting yet another report.

He reiterated his familiar demand: the European Union must act more cohesively, like a single state, if it wants to retain a geopolitical role.

More of the medicine that made Europe sick: more centralization, less subsidiarity, and intensified technocratic rule. Draghi once again demonstrates Brussels’ plan — as during the sovereign debt crisis 15 years ago: power concentrated in Brussels, decisions outside democratic control, enforced by a political apparatus orchestrating media narratives. Strict censorship, media manipulation — dirty tools to silence opposition to centralization. The same authoritarian logic that worked then is being revived.

Lagarde and Migration

Draghi’s ally, ECB President Christine Lagarde, also hit the media circuit. She touched on migration, a topic skillfully avoided or distorted in German politics and media.

Lagarde floated a trial balloon at the Federal Reserve meeting in Jackson Hole, subtly testing Europe’s mood. According to her, Europe could no longer grow without massive migration (of which growth exactly?). She claimed Germany’s GDP would be roughly six percent lower today than in 2019 without foreign workers.

That the country has been in a depression for some time seems not to have reached the ECB leadership. Then came the familiar trump card: without migration, the labor shortage cannot be addressed. No mention of technological advances via AI or robotics, which could offset labor shortages. No mention of migration as a security risk, of cultural conflicts, or a political Islam incompatible with European values.

Lagarde’s stance was particularly striking as the U.S. begins repatriating illegal migrants, ending the Europeanization of American policy. Her speech in the land of rational awakening and political turnaround likely caused nothing but raised eyebrows.

Jackson Hole highlighted the EU’s trajectory: open borders, elites ignoring risks, while the left expands its voter base at Europe’s cultural and economic expense.

Bitter Balance

Combine the three events — Merz’s speech, Lagarde in Jackson Hole, and Draghi’s latest report — and the conclusion is alarming: the economy is accelerating toward collapse due to a self-inflicted energy crisis and overregulation. Social funds, strained by mass illegal migration, risk implosion. The proposed solution? Centralization, regulation, and continued unchecked migration.

Even Finance Minister Lars Klingbeil’s usual tax hike debates fit seamlessly: the individual counts for nothing, the state controls everything, increasingly burdening citizens. The audacity to attack private property and raise taxes further is staggering, meeting little resistance. The Merz CDU has become a paper-thin bourgeois protective wall of hot air.

Tyler Durden Wed, 09/03/2025 - 09:11

The Quiet Rebranding Of CBDCs As "Digital-ID"

Authored by Mark Jeftovic via BombThrower.com,

Let’s call them for what they are: Social Credit systems.

We know that “CBDC” stands for Central Bank Digital Currencies – and we have long held our hypothesis on what those entail (the TL;DR is that they will either launch as, or morph into, China-style social credit systems).

We’ve seen an Executive Order expressly ruling out CBDCs in the US, but as I keep warning readers: we’re seeing components we’d expect to see under a CBDC system appearing – only they aren’t originating at The Fed (who has never really expressed an interest in them, anyway).

Now the US Treasury Department is seeking comments on Digital ID as it relates to DeFi:

“The Department of the Treasury has filed a request for public comments to provide input on the use of “innovative or novel methods to detect and mitigate illicit finance risks involving digital assets” in accordance with the GENIUS Act, as well as in accordance with Donald Trump’s policy to support “the responsible growth and use of digital assets,” as outlined in the President’s Executive Order to strengthen US leadership in digital financial technology.”

— TheRage.co

The areas covered range from:

“the use of APIs “to help enforce strict access controls, monitor transactions and activities, and bolster security and integrity of financial institutions providing digital asset services”, the use of Artificial Intelligence to “make predictions, recommendations or decisions” to “effectively identify illicit finance patterns, risks, trends, and typologies”, and blockchain monitoring to “evaluate high-risk counterparties and activities, analyze transactions across multiple blockchains,trace or monitor transaction activities, and identify patterns that indicate potential illicit transactions.”

As well as Digital ID (which I think is the catch-phrase we’re going to see a lot of in the future, that will capture a lot of the objectives of CBDCs)

“the treasury is also seeking comments on the introduction of “portable digital identity credentials designed to support various elements of AML/CFT and sanctions compliance, maximize user privacy, and reduce compliance burden on financial institutions” to potentially be used “by decentralized finance (DeFi) services’ smart contracts to automatically check for a credential before executing a user’s transaction.”

Sounds similar to what the Bank of International Settlements (BIS) wants to do in terms of rating individual crypto wallets for AML compliance.

In a white paper titled An approach to anti-money laundering compliance for cryptoassets they propose to:

“leverag[e] the provenance and history of any particular unit or balance of a cryptoasset, including stablecoins”

In order to assign an “AML compliance score”.

That score would be based on:

‘the likelihood that a particular cryptoasset unit or balance is linked with illicit activity may be referenced at points of contact with the banking system (“off-ramps”)’

In this way, authorities could enforce a “duty of care” among “crypto market participants”.

Coverage from The Rage (again) pulls out some of the juicier tidbits from the white paper:

“An AML compliance score that references the UTXOs for bitcoins or wallets for stablecoins could use the information on the blockchain, including the full history of transactions and the wallets they have passed through”

It basically sounds like a social credit score, for crypto wallets:

None of the above should surprise anybody (unless you really believed that there would be no CBDCs in the US).

We’ve long said we expect the on-ramps and off-ramps to be heavily regulated and KYC-ed as the crypto-economy becomes a bigger component of the global financial system.

Remember the flip side of that: we also expect more capital flowing into the crypto-economy to be on a one-way trip.

Today’s post was excerpted from the Eye on Evilcoin section of this month’s Bitcoin Capitalist. Every month we cover the roll-out of social credit systems under the guise of CBDCs, “Health Passes” and Digital-ID. Bombthrower readers can get a special trial offer here. 

If you’re not on the Bombthrower list, sign up here, free and get a copy of The CBDC Survival Guide when it comes out.

Tyler Durden Wed, 09/03/2025 - 08:05