Zero Hedge

US Designates Venezuela's "Cartel Of The Suns" As Terrorists, But Its Existence Is Dubious

US Designates Venezuela's "Cartel Of The Suns" As Terrorists, But Its Existence Is Dubious

Secretary of State Marco Rubio announced Sunday that the State Department would be designating the so-called Cartel de los Soles, or Cartel of the Suns, as a "Foreign Terrorist Organization" - though many analysts and reporters have questioned whether the group actually exists.

"Based in Venezuela, the Cartel de los Soles is headed by Nicolás Maduro and other high-ranking individuals of the illegitimate Maduro regime who have corrupted Venezuela’s military, intelligence, legislature, and judiciary," the official US statement said. "Neither Maduro nor his cronies represent Venezuela’s legitimate government."

Via Associated Press

At a moment of unprecedented US military build-up off Venezuela, including the presence of the USS Ford carrier strike group, Rubio's statement laid out, "Cartel de los Soles by and with other designated FTOs including Tren de Aragua and the Sinaloa Cartel are responsible for terrorist violence throughout our hemisphere as well as for trafficking drugs into the United States and Europe."

But AntiWar.com's Dave DeCamp outlines the case for skepticism:

The term "Cartel of the Suns" was first used in the 1990s, before Maduro’s predecessor, Hugo Chavez, came to power, to describe two Venezuelan military generals with sun insignias on their uniforms who were involved in the drug trade. One of the generals was working with the CIA at the time, according to a 1993 60 Minutes report.

Today, the term is used to describe Venezuelan military and government officials who allegedly profit from drug trafficking, but the Cartel of the Suns doesn't exist as a structured organization.

And according to the investigative source, InSight Crime, quoted in AFP: "Rather than a hierarchical organization with Maduro directing drug trafficking strategies, the Cartel of the Suns is more accurately described as a system of corruption wherein military and political officials profit by working with drug traffickers." Further: 

Yet in March, the latest US State Department report on global anti-drug operations made no mention of the "Cartel de los Soles" or any connection between Maduro and narco trafficking.

Typically mainstream media parrots whatever US national security officials say when it comes to Venezuela or any other 'official enemy'; however, there's lately been a surprising degree of MSM pushback on the "Cartel of the Suns" moniker...

Trump admin officials spent the weekend in media interviews also resurrecting the "Hezbollah in Latin America" threat, a talking point which hearkens back to when Mike Pompeo was Secretary of State during Trump's first term.

Currently Hezbollah and Iran are alleged to be colluding with alleged Venezuelan narco-trafficking in a vast global plot, but which as usual comes without much or any in the way of concrete evidence. While Hezbollah and Iran may have at one time been active in establishing working relationships in this region, the current reality is that Hezbollah's leadership was decimated starting last year in the war with Israel, and Iran too finds itself on a backfoot facing multiple crises at home.

Neither entity is likely capable of currently projecting power in the Caribbean region or stands to gain much by provoking Washington's wrath, especially with such a large American force presence. 

This weekend also saw a second round of US military exercises based out of American regional ally Trinidad and Tobago. Venezuelan President Nicolas Maduro blasted the drills as "irresponsible."

"The government of Trinidad and Tobago has once again announced irresponsible exercises, lending its waters off the coast of Sucre state for military exercises that are intended to be threatening to a republic like Venezuela, which does not allow itself to be threatened by anyone," Maduro said from Caracas.

The so-called Cartel de los Soles is a concept that is so loose that it simply encompasses the Venezuelan state leadership itself..

Via The Sun

His government has further announce a "massive" retaliatory deployment as the US carrier group arrived. This involves a large civilian militia force being put on high alert, though these are mostly unarmed and untrained local citizens.

As for the "Cartel of the Suns" designation, it is scheduled to go into effect on November 24. "Once the designation takes effect, all property and interests in property belonging to the named individuals or entities that fall under US jurisdiction will be blocked and must be reported to the Office of Foreign Assets Control (OFAC)," one international media source explains. "Entities owned 50% or more — directly or indirectly — by one or more blocked persons will also be subject to the same restrictions."

Tyler Durden Mon, 11/17/2025 - 16:40

US Designates Venezuela's "Cartel Of The Suns" As Terrorists, But Its Existence Is Dubious

US Designates Venezuela's "Cartel Of The Suns" As Terrorists, But Its Existence Is Dubious

Secretary of State Marco Rubio announced Sunday that the State Department would be designating the so-called Cartel de los Soles, or Cartel of the Suns, as a "Foreign Terrorist Organization" - though many analysts and reporters have questioned whether the group actually exists.

"Based in Venezuela, the Cartel de los Soles is headed by Nicolás Maduro and other high-ranking individuals of the illegitimate Maduro regime who have corrupted Venezuela’s military, intelligence, legislature, and judiciary," the official US statement said. "Neither Maduro nor his cronies represent Venezuela’s legitimate government."

Via Associated Press

At a moment of unprecedented US military build-up off Venezuela, including the presence of the USS Ford carrier strike group, Rubio's statement laid out, "Cartel de los Soles by and with other designated FTOs including Tren de Aragua and the Sinaloa Cartel are responsible for terrorist violence throughout our hemisphere as well as for trafficking drugs into the United States and Europe."

But AntiWar.com's Dave DeCamp outlines the case for skepticism:

The term "Cartel of the Suns" was first used in the 1990s, before Maduro’s predecessor, Hugo Chavez, came to power, to describe two Venezuelan military generals with sun insignias on their uniforms who were involved in the drug trade. One of the generals was working with the CIA at the time, according to a 1993 60 Minutes report.

Today, the term is used to describe Venezuelan military and government officials who allegedly profit from drug trafficking, but the Cartel of the Suns doesn't exist as a structured organization.

And according to the investigative source, InSight Crime, quoted in AFP: "Rather than a hierarchical organization with Maduro directing drug trafficking strategies, the Cartel of the Suns is more accurately described as a system of corruption wherein military and political officials profit by working with drug traffickers." Further: 

Yet in March, the latest US State Department report on global anti-drug operations made no mention of the "Cartel de los Soles" or any connection between Maduro and narco trafficking.

Typically mainstream media parrots whatever US national security officials say when it comes to Venezuela or any other 'official enemy'; however, there's lately been a surprising degree of MSM pushback on the "Cartel of the Suns" moniker...

Trump admin officials spent the weekend in media interviews also resurrecting the "Hezbollah in Latin America" threat, a talking point which hearkens back to when Mike Pompeo was Secretary of State during Trump's first term.

Currently Hezbollah and Iran are alleged to be colluding with alleged Venezuelan narco-trafficking in a vast global plot, but which as usual comes without much or any in the way of concrete evidence. While Hezbollah and Iran may have at one time been active in establishing working relationships in this region, the current reality is that Hezbollah's leadership was decimated starting last year in the war with Israel, and Iran too finds itself on a backfoot facing multiple crises at home.

Neither entity is likely capable of currently projecting power in the Caribbean region or stands to gain much by provoking Washington's wrath, especially with such a large American force presence. 

This weekend also saw a second round of US military exercises based out of American regional ally Trinidad and Tobago. Venezuelan President Nicolas Maduro blasted the drills as "irresponsible."

"The government of Trinidad and Tobago has once again announced irresponsible exercises, lending its waters off the coast of Sucre state for military exercises that are intended to be threatening to a republic like Venezuela, which does not allow itself to be threatened by anyone," Maduro said from Caracas.

The so-called Cartel de los Soles is a concept that is so loose that it simply encompasses the Venezuelan state leadership itself..

Via The Sun

His government has further announce a "massive" retaliatory deployment as the US carrier group arrived. This involves a large civilian militia force being put on high alert, though these are mostly unarmed and untrained local citizens.

As for the "Cartel of the Suns" designation, it is scheduled to go into effect on November 24. "Once the designation takes effect, all property and interests in property belonging to the named individuals or entities that fall under US jurisdiction will be blocked and must be reported to the Office of Foreign Assets Control (OFAC)," one international media source explains. "Entities owned 50% or more — directly or indirectly — by one or more blocked persons will also be subject to the same restrictions."

Tyler Durden Mon, 11/17/2025 - 16:40

Just Spill The Beans Already...

Just Spill The Beans Already...

Authored by James Howard Kunstler,

Isn’t it obvious what’s at the heart of this Jeffrey Epstein psychodrama?

The country is sick unto near-death with official secrecy, cover-ups, black ops, stonewalling, and never-ending games of political hide-the-salami — especially when those salamis are directed up the Republic’s own rear end. The worst victim of sexual abuse is America herself. Can’t somebody please make it stop?

And so, over the weekend, psychodrama devolved to soap opera as President Trump and Rep. Marjorie Taylor Green acted-out their lovers’ quarrel on every public channel of news and gossip until, finally, Mr. Trump pulled one of his trademark ju-jitsu moves and yielded to all that implacable forward motion to release the Epstein files.

What the public really wants is to find out which celebrities, politicians and otherwise, were having sex with underage girls so said celebrities can be frog-marched out of public life. It’s hard to not sympathize with that wish. It’s kind of fundamental that perverts and degenerates are not deserving of public trust. The people in this land who are not perverts and degenerates yearn for the reestablishment of decent behavior, and sexual indecency is only the most garish sort depravity. Beyond that lies the shadowland of grift, racketeering, sedition, and treason at issue in the ongoing decline-of-empire tragedy that’s played out for a decade. And the non-depraved long to get to the bottom of that, too.

Only tertiarily do they care that Jeffrey Epstein was some kind of agent or go-between for the US / UK / Israeli spy services, though it helps to color between the lines of all this other sketchy stuff. He brokered lots of shenanigans as far back as the Iran-Contra operation in the 1980s — big arms deals and such — and for a while was the world champion money launderer for intel gangs of every flag. All the trafficking in girls was apparently part of the package. But intel agencies always dangle women as bait (and sometimes boys, too) and Epstein’s pimpery was just an additional standard service. Whether he tasted his own product is kind of beside the point.

Anyway, everything known in the matter so far suggests that Donald Trump did not submit himself to sexual blackmail and that, long before he entered politics, it’s likely he cooperated with law enforcement to put Jeffrey Epstein in jail the first time around. Of course, it was during Mr. Trump’s first term, in 2019, that Epstein was back behind bars where, as far as the public has been told, he decided to end-it-all.

Jeffrey Epstein’s afterlife has had an impressively long run right here on planet earth, where he enjoys more attention these days than even Sidney Sweeney. He’s more alive to us than any incarnation of Dracula conjured out of Hollywood and he’s draining the blood out of what’s left of a once-workable political system. What has prevented all that hoarded evidence of Epstein’s depredations from getting released? Did Christopher Wray stuff it down the memory hole? Were there hidden cameras in his various lodgings or not? How is possible no video recordings survived?

We are still mystified by the Pam Bondi bait-and-switch dodge back in February when she handed out files of old Epstein news clippings to select reporters instead of anything fresh and substantial from the FBI vaults. And since then, the DOJ’s resistance has only hardened. There’s chatter lately that the president’s Chief-of-staff, Susie Wiles, has acted to block full disclosure on Epstein. Whatever’s going on has been the opposite of Mr. Trump’s promised “transparency,” and all the maneuvering around that broken promise has mounted to a serious political liability.

On Sunday night, Mr. Trump stepped out of the way in one of his customary Truth Social blurts. Wouldn’t it be better if he just went on-the-air with an Oval Office speech to level with the American people, telling all he knows and what the people need to know about this drawn-out Epstein business? Why wait for all the sorting through new files (if there are any)? Mr. Trump has had many years to familiarize himself with the salient details of Epstein. He must know exactly what this guy was up to, and who he catered to as a global finance figure and a trafficker of girls to the political elite. What could possibly shock anyone at this point?

Mr. Trump should give that speech whether the House and Senate vote to release the DOJ’s files or not. Above all, I’m sure you realize, the country can’t stand anymore lying, most particularly from Donald Trump and his entourage. The institutional damage is just too grave.

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

Tyler Durden Mon, 11/17/2025 - 16:20

Just Spill The Beans Already...

Just Spill The Beans Already...

Authored by James Howard Kunstler,

Isn’t it obvious what’s at the heart of this Jeffrey Epstein psychodrama?

The country is sick unto near-death with official secrecy, cover-ups, black ops, stonewalling, and never-ending games of political hide-the-salami — especially when those salamis are directed up the Republic’s own rear end. The worst victim of sexual abuse is America herself. Can’t somebody please make it stop?

And so, over the weekend, psychodrama devolved to soap opera as President Trump and Rep. Marjorie Taylor Green acted-out their lovers’ quarrel on every public channel of news and gossip until, finally, Mr. Trump pulled one of his trademark ju-jitsu moves and yielded to all that implacable forward motion to release the Epstein files.

What the public really wants is to find out which celebrities, politicians and otherwise, were having sex with underage girls so said celebrities can be frog-marched out of public life. It’s hard to not sympathize with that wish. It’s kind of fundamental that perverts and degenerates are not deserving of public trust. The people in this land who are not perverts and degenerates yearn for the reestablishment of decent behavior, and sexual indecency is only the most garish sort depravity. Beyond that lies the shadowland of grift, racketeering, sedition, and treason at issue in the ongoing decline-of-empire tragedy that’s played out for a decade. And the non-depraved long to get to the bottom of that, too.

Only tertiarily do they care that Jeffrey Epstein was some kind of agent or go-between for the US / UK / Israeli spy services, though it helps to color between the lines of all this other sketchy stuff. He brokered lots of shenanigans as far back as the Iran-Contra operation in the 1980s — big arms deals and such — and for a while was the world champion money launderer for intel gangs of every flag. All the trafficking in girls was apparently part of the package. But intel agencies always dangle women as bait (and sometimes boys, too) and Epstein’s pimpery was just an additional standard service. Whether he tasted his own product is kind of beside the point.

Anyway, everything known in the matter so far suggests that Donald Trump did not submit himself to sexual blackmail and that, long before he entered politics, it’s likely he cooperated with law enforcement to put Jeffrey Epstein in jail the first time around. Of course, it was during Mr. Trump’s first term, in 2019, that Epstein was back behind bars where, as far as the public has been told, he decided to end-it-all.

Jeffrey Epstein’s afterlife has had an impressively long run right here on planet earth, where he enjoys more attention these days than even Sidney Sweeney. He’s more alive to us than any incarnation of Dracula conjured out of Hollywood and he’s draining the blood out of what’s left of a once-workable political system. What has prevented all that hoarded evidence of Epstein’s depredations from getting released? Did Christopher Wray stuff it down the memory hole? Were there hidden cameras in his various lodgings or not? How is possible no video recordings survived?

We are still mystified by the Pam Bondi bait-and-switch dodge back in February when she handed out files of old Epstein news clippings to select reporters instead of anything fresh and substantial from the FBI vaults. And since then, the DOJ’s resistance has only hardened. There’s chatter lately that the president’s Chief-of-staff, Susie Wiles, has acted to block full disclosure on Epstein. Whatever’s going on has been the opposite of Mr. Trump’s promised “transparency,” and all the maneuvering around that broken promise has mounted to a serious political liability.

On Sunday night, Mr. Trump stepped out of the way in one of his customary Truth Social blurts. Wouldn’t it be better if he just went on-the-air with an Oval Office speech to level with the American people, telling all he knows and what the people need to know about this drawn-out Epstein business? Why wait for all the sorting through new files (if there are any)? Mr. Trump has had many years to familiarize himself with the salient details of Epstein. He must know exactly what this guy was up to, and who he catered to as a global finance figure and a trafficker of girls to the political elite. What could possibly shock anyone at this point?

Mr. Trump should give that speech whether the House and Senate vote to release the DOJ’s files or not. Above all, I’m sure you realize, the country can’t stand anymore lying, most particularly from Donald Trump and his entourage. The institutional damage is just too grave.

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

Tyler Durden Mon, 11/17/2025 - 16:20

Judge Says 'Government Misconduct' By DOJ Prosecutor May Have Tainted Comey Case

Judge Says 'Government Misconduct' By DOJ Prosecutor May Have Tainted Comey Case

A federal magistrate judge on Monday said that "government misconduct" may have tainted the DOJ's case against former FBI Director James Comey, and has ordered prosecutors to turn over records of secret grand jury proceedings to Comey's defense counsel as they seek to dismiss the false-statement and obstruction-of-Congress charges pending against him in a federal court in Alexandria, Virginia.

"The Court recognizes this is an extraordinary remedy," wrote judge William Fitzpatrick in a 24-page opinion. "but given the factually based challenges the defense has raised to the government’s conduct and the prospect that government misconduct may have tainted the grand jury proceedings, disclosure of grand jury materials under these unique circumstances is necessary."

The decision came after Fitzpatrick personally reviewed records of the grand jury proceedings that led up to Comey's Sept. 25 indictment on charges that he lied to Congress in 2020. The indictment was signed by lead prosecutor Lindsey Halligan - who Trump picked for the job, and who was installed by AG Pam Bondi after other prosecutors resisted pursuing the Comey case. 

Fitzpatrick accused the DOJ of flouting attorney-client privilege and potential "fundamental misstatements of law" - and also noted unexplained irregularities in the grand jury transcript. 

Specifically, the judge laid out a timeline of the day the two-count indictment of Comey was handed up, noting that Halligan claimed to the court that she last had contact with the grand jury at 4:28 p.m., while the panelists were deliberating.

However, the grand jury rejected one additional count against the former top lawman, necessitating prosecutors to draw up a second indictment for Halligan to sign. 

The interim US attorney’s declaration stated that she learned that one count had been rejected at 6:40 p.m. and the hearing on the return of the indictment began seven minutes later. -NY Post

Based on timing evidence, Fitzpatrick finds it nearly impossible that the prosecution team:

  • Learned of the grand jury’s vote,

  • Drafted a new indictment,

  • Presented it to the grand jury, and

  • Received a vote in the 7–12 minute window before it was filed in court.

"The short time span between the moment the prosecutor learned that the grand jury rejected one count in the original indictment and the time the prosecutor appeared in court to return the second indictment could not have been sufficient to draft the second indictment, sign the second indictment, present it to the grand jury, provide legal instructions to the grand jury, and give them an opportunity to deliberate and render a decision on the new indictment," Fitzpatrick wrote. 

"If the prosecutor is mistaken about the time she received notification of the grand jury’s vote on the original indictment, and this procedure did take place, then the transcript and audio recording provided to the Court are incomplete,” he added. “If this procedure did not take place, then the Court is in uncharted legal territory in that the indictment returned in open court was not the same charging document presented to and deliberated upon by the grand jury … and provides another genuine issue the defense may raise to challenge the manner in which the government obtained the indictment."

Warrants Under Scruitny

Fitzpatrick also criticized prosecutors' handling of four search warrants executed by the FBI in 2019 and 2020 as part of the bureau's Arctic Haze probe into how classified information was leaked from Comey's FBI to news outlets.

The warrants targeted Daniel Richman, a Columbia Law School professor and friend of Comey - and sought information from Richman's iPhone, iPad, iCloud account and hard drive. 

According to Fitzpatrick, while the government allowed Columbia, Richman and his attorney to identify privileged content among those devices and iCloud account, they "never engaged Mr. Comey in this process even though it knew that Mr. Richman represented Mr. Comey as his attorney as of May 9, 2017, and three of the four Richman Warrants authorized the government to search Mr. Richman’s devices through May 30, 2017, 21 days after an attorney-client relationship had been formed."

Will Comey get off scot-free?

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Tyler Durden Mon, 11/17/2025 - 15:40

Judge Says 'Government Misconduct' By DOJ Prosecutor May Have Tainted Comey Case

Judge Says 'Government Misconduct' By DOJ Prosecutor May Have Tainted Comey Case

A federal magistrate judge on Monday said that "government misconduct" may have tainted the DOJ's case against former FBI Director James Comey, and has ordered prosecutors to turn over records of secret grand jury proceedings to Comey's defense counsel as they seek to dismiss the false-statement and obstruction-of-Congress charges pending against him in a federal court in Alexandria, Virginia.

"The Court recognizes this is an extraordinary remedy," wrote judge William Fitzpatrick in a 24-page opinion. "but given the factually based challenges the defense has raised to the government’s conduct and the prospect that government misconduct may have tainted the grand jury proceedings, disclosure of grand jury materials under these unique circumstances is necessary."

The decision came after Fitzpatrick personally reviewed records of the grand jury proceedings that led up to Comey's Sept. 25 indictment on charges that he lied to Congress in 2020. The indictment was signed by lead prosecutor Lindsey Halligan - who Trump picked for the job, and who was installed by AG Pam Bondi after other prosecutors resisted pursuing the Comey case. 

Fitzpatrick accused the DOJ of flouting attorney-client privilege and potential "fundamental misstatements of law" - and also noted unexplained irregularities in the grand jury transcript. 

Specifically, the judge laid out a timeline of the day the two-count indictment of Comey was handed up, noting that Halligan claimed to the court that she last had contact with the grand jury at 4:28 p.m., while the panelists were deliberating.

However, the grand jury rejected one additional count against the former top lawman, necessitating prosecutors to draw up a second indictment for Halligan to sign. 

The interim US attorney’s declaration stated that she learned that one count had been rejected at 6:40 p.m. and the hearing on the return of the indictment began seven minutes later. -NY Post

Based on timing evidence, Fitzpatrick finds it nearly impossible that the prosecution team:

  • Learned of the grand jury’s vote,

  • Drafted a new indictment,

  • Presented it to the grand jury, and

  • Received a vote in the 7–12 minute window before it was filed in court.

"The short time span between the moment the prosecutor learned that the grand jury rejected one count in the original indictment and the time the prosecutor appeared in court to return the second indictment could not have been sufficient to draft the second indictment, sign the second indictment, present it to the grand jury, provide legal instructions to the grand jury, and give them an opportunity to deliberate and render a decision on the new indictment," Fitzpatrick wrote. 

"If the prosecutor is mistaken about the time she received notification of the grand jury’s vote on the original indictment, and this procedure did take place, then the transcript and audio recording provided to the Court are incomplete,” he added. “If this procedure did not take place, then the Court is in uncharted legal territory in that the indictment returned in open court was not the same charging document presented to and deliberated upon by the grand jury … and provides another genuine issue the defense may raise to challenge the manner in which the government obtained the indictment."

Warrants Under Scruitny

Fitzpatrick also criticized prosecutors' handling of four search warrants executed by the FBI in 2019 and 2020 as part of the bureau's Arctic Haze probe into how classified information was leaked from Comey's FBI to news outlets.

The warrants targeted Daniel Richman, a Columbia Law School professor and friend of Comey - and sought information from Richman's iPhone, iPad, iCloud account and hard drive. 

According to Fitzpatrick, while the government allowed Columbia, Richman and his attorney to identify privileged content among those devices and iCloud account, they "never engaged Mr. Comey in this process even though it knew that Mr. Richman represented Mr. Comey as his attorney as of May 9, 2017, and three of the four Richman Warrants authorized the government to search Mr. Richman’s devices through May 30, 2017, 21 days after an attorney-client relationship had been formed."

Will Comey get off scot-free?

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Tyler Durden Mon, 11/17/2025 - 15:40

EBITDA And The Warnings Of Charlie Munger

EBITDA And The Warnings Of Charlie Munger

Authored by Lance Roberts via RealInvestmentAdvice.com,

This past week, Greg Feirman wrote an interesting article about “The Perils Of Adjusted EBITDA.” Before we get into his discussion, let’s discuss what EBITDA is.

EBITDA is an acronym that stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” Over the years, EBITDA has become a go-to metric for evaluating corporate performance as it offers a simple way to assess a company’s profitability by removing non-cash charges and financing effects. However, the problem with EBITDA is that simplicity often comes at the cost of accuracy. Why do I say that? Because EBITDA ignores critical costs, such as depreciation, which can distort a company’s true economic picture in capital-intensive industries. When companies extend the lives of their assets to reduce depreciation expenses, EBITDA increases, even though the underlying cash outflows remain unchanged.

Read that last part again, because this is where Greg’s commentary hits home. Historically, capital expenditures tend to surge following recessions and economic downturns. This makes sense as companies expend capital to ramp up production as economic growth returns. You will notice a high correlation between economic and capital expenditures (CapEx) growth rates. Notably, this is particularly relevant in the AI sector, where firms are investing billions into chips, servers, and data centers, which will likely coincide with an increase in economic activity.

This is also where Greg’s comments are most relevant.

“On Monday morning, Michael Burry tweeted out more details about his AI Bubble thesis. He claims that the AI hyperscalers are “understating depreciation” by extending the period over which they are depreciating the Nvidia chips and all the other capital equipment they are buying to build out AI. This morning Jim Chanos applied the same logic to CoreWeave (CRWV). The first thing to understand is that Net Income is an accounting number. It is not the amount of cash that the company actually earns because it reflects certain approximations – one of the most important of which is depreciation.“

As Greg notes, a good example is CoreWeave (CRWV), which reported earnings this past week.

“Adjusted EBITDA more than doubled to $838 million from $379 million a year ago. On the surface, then, they are a profitable company – at least on this metric. But they backed out $630 billion in Depreciation and Amortization from their GAAP Net Loss of $110 million to arrive at that number. It’s only when we turn to the Cash Flow statement that we understand the how CoreWeave is financing their operations. Cash Flow from Operations in the first 9 months of 2025 was $1.5 billion. CapEx was $6.25 billion. Those are cash figures, not accounting ones. In other words, Free Cash Flow for the first nine months of the year was -$4.75 billion. That’s right: CRWV has burned up nearly $5 billion so far this year. How are they financing this? By selling debt. Essentially the whole difference is made up by their net debt issuance of ~$4.5 billion.”

This reveals the disconnect: EBITDA suggests “operating profitability looks good,” but the cash flow dynamics tell a very different story. If you rely only on EBITDA, you may miss the fact that the business is burning cash, depending on borrowing, or stretching asset lives unrealistically.

As Greg concluded:

“Clearly, the hyperscalers are spending an enormous amount of money on Nvidia chips and the other capital equipment required to build out AI. Their thesis is that the ROI on these investments over the long term will be excellent. If AI is truly the game changer many say it is, the returns may well outweigh any current concerns about the accounting. If not, a lot of this CapEx may be malinvestment and have to be written down in the future.

The overall point is that we are operating in the dark here because we don’t know the future returns on investment and we don’t know the appropriate rate to depreciate these huge Capital Expenditures to get the right Net Income numbers in the present.”

This is why investors need to be more realistic about understanding earnings reports and be cautious of the metrics they use to invest in companies. There are several pitfalls associated with EBITDA that you should be aware of. For example:

  • It ignores capital expenditures (CapEx) and replacement needs.

  • It omits changes in working capital—such as inventory, receivables, and payables—which can erode cash even when EBITDA is positive.

  • It may mask interest and debt burdens—two very real cash drains. Since interest is excluded, two companies with similar EBITDA may have vastly different risk profiles.

  • It allows for subjective “adjustments” (adjusted EBITDA) that reduce comparability across companies and time periods.

  • It may mislead in asset‑intensive sectors where hidden replacement or upgrade costs are large.

However, it isn’t just EBITDA, but earnings in general, that require closer inspection.

Earnings Aren’t What You Think

Just like the hit series “House of Cards,” Wall Street earnings season has become rife with manipulation, deceit, and obfuscation that could rival the dark corners of Washington, D.C. What is most fascinating is that so many individuals invest hard-earned capital based on these manipulated numbers. The failure to understand the “quality” of earnings, rather than the “quantity,” has always led to disappointing outcomes at some point in the future. 

As Drew Bernstein recently penned for CFO.com:

“Non-GAAP financials are not audited and are most often disclosed through earnings press releases and investor presentations, rather than in the company’s annual report filed with the Securities and Exchange Commission.

Once upon a time, non-GAAP financials were used to isolate the impact of significant one-time events like a major restructuring or sizable acquisition. In recent years, they have become increasingly prevalent and prominent, used by both the shiniest new-economy IPO companies and the old-economy stalwarts.”

In the 1980s and early 1990s, companies typically reported GAAP earnings in their quarterly releases. If an investor dug through the report, they would find “adjusted” and “pro forma” earnings buried in the back. Today, GAAP earnings are buried in the back, hoping investors will miss the ugly truth.

These “adjusted or pro forma earnings” exclude items that a company deems “special, one-time, or extraordinary.” The problem is that these “special, one-time” items appear “every” quarter, leaving investors with a muddier picture of what companies are really making. This growing divergence between the earnings calculated according to accepted accounting principles and the “earnings” touted in press releases and analyst research reports has put investors at a disadvantage in understanding precisely what they are paying for.

As BofAML stated:

“We are increasingly concerned with the number of companies (non-commodity) reporting earnings on an adjusted basis versus those that are stressing GAAP accounting, and find the divergence a consequence of less earnings power. 

Consider that when US GDP growth was averaging 3% (the 5 quarters September 2013 through September 2014) on average 80% of US HY companies reported earnings on an adjusted basis. Since September 2014, however, with US GDP averaging just 1.9%, over 87% of companies have reported on an adjusted basis. Perhaps even more telling, between the end of 2010 and 2013, the percentage of companies reporting adjusted EBITDA was relatively constant, and since 2013, the number has been on a steady rise.

So, why do companies regularly report these Non-GAAP earnings? Drew has the answer:

“When management is asked why they resort to non-GAAP reporting, the most common response is that these measures are requested by the analysts and are commonly used in earnings models employed to value the company. Indeed, sell-side analysts and funds with a long position in the stock may have incentives to encourage a more favorable alternative presentation of earnings results.”

How much of a difference are we talking about? About $3.59/share in earnings, where revenue comprises only about 25% of the result.

But here is the real question:

“If non-GAAP reporting is used as a supplemental means to help investors identify underlying trends in the business, one might reasonably expect that both favorable and unfavorable events would be “adjusted” in equal measure.”

However, research presented by the American Accounting Association suggests that companies engage in “asymmetric” non-GAAP exclusions of mostly unfavorable items as a tool to “beat” analyst earnings estimates.

So, why has there been such a rise in all these accounting gimmicks? Money, of course.

Better Earnings = Higher Stock Prices = Higher Compensation via Stock Buybacks

Why Munger Said “EBITDA is BullS***”

Wall Street is an insider system where the practice of legally manipulating earnings to create the best possible outcome and increase executive compensation has run amok. The adults in the room, a.k.a. the Securities & Exchange Commission, have “left the children in charge,” but will most assuredly leap into action to pass new regulations to rectify reckless misbehavior AFTER the next crash.

For investors, the manipulation of EBITDA and earnings not only skews valuation analysis but also specifically impacts any analysis involving earnings, such as P/E ratios, EV/EBITDA, and PEG.

Ramy Elitzur, via The Account Art Of War, expounded on the problems of using EBITDA.

“One of the things that I thought that I knew well was the importance of income-based metrics such as EBITDA, and that cash flow information is not as important. It turned out that common garden variety metrics, such as EBITDA, could be hazardous to your health.”

The article is worth reading and chock-full of good information; however, here are the four crucial points:

  1. EBITDA is not a good surrogate for cash flow analysis because it assumes that all revenues are collected immediately and all expenses are paid immediately, leading to a false sense of liquidity.

  2. Superficial common garden-variety accounting ratios will fail to detect signs of liquidity problems.

  3. Direct cash flow statements provide a more detailed insight into the operating cash flows than indirect cash flow statements. Note that the vast majority (well over 90%) of public companies use the indirect format.

  4. EBITDA, just like net income, is very sensitive to accounting manipulations.

The last point is the most critical. As Charlie Munger once stated:

“I think there are lots of troubles coming. There’s too much wretched excess. I don’t like when investment bankers talk about EBITDA, which I call bulls*** earnings. It’s ridiculous. EBITDA does not accurately reflect how much money a company makes, unlike traditional earnings. Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You’re almost announcing you’re a flake.”

In a world of adjusted earnings, where every company consistently outperforms its peers, investors often lose sight of what truly matters in investing.

“This unfortunate cycle will only be broken when the end-users of financial reporting — institutional investors, analysts, lenders, and the media — agree that we are on the verge of systemic failure in financial reporting. In the history of financial markets, such moments of mental clarity most often occur following the loss of vast sums of capital.” – American Accounting Association

Imaginary worlds are nice, but it’s just impossible to live there.

Where To Look Instead

So, if “operating earnings” and EBITDA are enough, where should you look? The answer is to focus on metrics that reflect real cash generation and sustainable operations. Free cash flow, which is operating cash flow minus capital expenditures, is one of the most important. It shows what’s left over after a business funds its maintenance and growth needs. A positive free cash flow tells you the company is generating more cash than it needs to sustain itself. A negative one warns that it’s living on borrowed money.

You should also examine trends in working capital, specifically, changes in receivables, payables, and inventory, to determine if the company is overextending itself to maintain operations. Asset lives and depreciation schedules should be realistic, not inflated to improve margins. Debt levels and interest costs matter too. EBITDA ignores both, but if a company’s cash flow can’t cover its debt service, that’s a red flag.

Here are the key metrics to prioritize over EBITDA:

  • Free Cash Flow (operating cash flow minus CapEx)
  • CapEx trends and whether they are delivering returns
  • Depreciation policy and asset life assumptions
  • Working capital changes in inventory, receivables, and payables
  • Debt and interest obligations
  • Reconciliation of EBITDA to net income and cash flow

When companies show a large gap between EBITDA and these real-world numbers, investors should be skeptical. In a capital-intensive sector like AI, where the future remains uncertain, the risks of relying on EBITDA are amplified. It may look clean on paper, but it can leave you blind to the business’s real financial health.

Tyler Durden Mon, 11/17/2025 - 14:40

Still No Deal: Rare Earth Talks Between China And U.S. Drag On With Little Tangible Progress So Far

Still No Deal: Rare Earth Talks Between China And U.S. Drag On With Little Tangible Progress So Far

The US and China are still hashing out the details of how Beijing will loosen rare-earth export restrictions, weeks after a trade truce that Washington said would boost shipments, according to Bloomberg. 

In other words, there's still no rare earth mineral trade deal, despite the "truce" between the two countries. 

Negotiators have until the end of November to finalize terms for “general licenses” China promised to issue for US-bound rare earths and other critical minerals, though the reason for the delay is unclear.

The White House framed the pledge as the “de facto removal” of China’s curbs imposed since 2023, calling it a major win for supply chains. Washington has already eased tariffs and paused some national-security measures, but China hasn’t publicly addressed the licensing promise, even as it confirmed other parts of the deal, including a one-year halt to new rare-earth controls.

Bloomberg writes that the outcome remains uncertain. Alicia Garcia Herrero said, “The deal is far from done,” noting Beijing can use licenses as leverage. Exporters say they’ve received no new guidance, with Christopher Beddor commenting, “Everyone is still in wait-and-see mode… I would not characterize the general licenses as a de facto removal of controls.”

The general-license system would allow repeated shipments over as long as three years, unlike the current requirement for case-by-case approvals. But buyers would still need to pass government vetting. The White House says these licenses will apply to restricted rare earths and metals such as gallium, germanium, antimony, tungsten, and graphite; China has also agreed to lift its ban on direct shipments to the US for the first three.

Recall days ago we wrote that disagreements were emerging over the deal and we have been skeptical that a deal would take place since the "truce" was first announced. We wrote that the so-called US–China “truce” looked far too fragile to last, and recent developments have only reinforced that view.

Even as both sides publicly celebrated their agreement, Beijing immediately began laying down new “red lines” — and Washington just as quickly took steps guaranteed to test them. Analysts, exporters, and investors all saw the same thing: a deal heavy on spin and light on substance, with China able to wield licensing power as leverage and the US racing to secure alternative supply chains.

In short, we argued that this ceasefire was never more than a temporary pause before the next escalation, and nothing since has suggested otherwise.

Tyler Durden Mon, 11/17/2025 - 13:40

Cooling Labor Market Drives Uptick In Gig-Platform Hours

Cooling Labor Market Drives Uptick In Gig-Platform Hours

We haven't heard much in corporate media about short-term, flexible, on-demand work, otherwise known as the gig economy, but a new Goldman note offers color into what's happening with these part-time jobs as the labor market cools.

Let's take a look at the news cycle for mentions of "gig economy." Notice how the topic surged in the early days of the Covid pandemic, when it became all the rage as people lost their jobs due to government-mandated shutdown of the economy. Many quickly turned to gigs for supplemental income, like driving for Uber or delivering for DoorDash. Now, mentions in corporate media have fallen back to roughly 2016 levels.

However, as the labor market cools, analyst Jessica Rindels said gig-platform hours have increased, suggesting displaced or underemployed workers are turning to Uber, DoorDash, and other gig opportunities.

Estimates suggest that 5% to 15% of Americans work gig jobs, with 2% to 4% involved in platform-based gigs. Overall, gig work has grown only modestly in recent years, but platform gig work has expanded at a 5% to 8% annual pace. 

Here are the key takeaways about current gig economy trends via Rindels (full report can be viewed by ZeroHedge Pro subs in usual place): 

  • This Analyst takes a deeper look at the gig economy, including both traditional gig work as well as platform-based opportunities such as Uber. With the labor market cooling, we ask whether the gig economy provides a meaningful source of income support to those who experience job loss or reduced hours and what it can tell us about the current state of the labor market.

  • Estimates of employment in the gig economy are wide-ranging, but the most credible suggest that 5-15% of the US population participates in gig work, broadly defined as any income-generating work outside of standard, long-term, direct-hire employment. Estimates of participation in platform-based gig work such as Uber are lower at 2-4% of the population. Most surveys that have been run for multiple years suggest, perhaps surprisingly, that growth in total gig employment has been modest at best, though growth in the number of platform gig workers has been much faster at roughly 5-8% annualized over the past few years.

  • How do gig workers compare to workers in traditional jobs? Recent Fed research using the NY Fed's Survey of Informal Work Participation (SIWP) finds that gig workers are more likely to be younger, female, work part-time, and to hold multiple jobs compared to workers in traditional jobs. Unique data from Gridwise, an app that allows platform gig workers to compare potential earnings across services, show that platform gig workers spent 14 hours per week on average doing gig work this year and earned roughly $18 per hour of work.

  • How is gig work reflected in the official employment statistics? While only a subset of gig workers should be captured by the establishment survey, they should all in principle be captured by the household survey. That said, the SIWP suggests that some gig work is not reported in the household survey and that roughly 15% of people reported as unemployed or not in the labor force actually do some gig work, which implies that the employment to population ratio would be roughly 65% rather than 60% if it fully included gig workers.

  • Recent academic research shows that many lower-wage workers face high income volatility due to unpredictable changes in the weekly hours their employers give them. Does the gig economy—especially platform-based work—offer a meaningful new source of income support with a low barrier to entry to those who face job loss or reduced hours? Data from the SIWP indicate that nearly 50% of gig workers do gig work to earn extra money versus just 15% who do it as a primary source of income, and that 20% of people who took a pay cut, lost their job, or had their hours reduced took up gig work in response. However, gig workers only earn 50-65% as much per hour of work as they did in previous traditional jobs, and the support available to some workers in normal times would likely be inadequate for all job losers in a recession.

  • What can the gig economy tell us about the current state of the labor market? As the broader labor market has cooled this year, platform-based gig work opportunities have held up so far. We find that hours worked on gig platforms increased more this year in cities where payroll growth has slowed, suggesting that some workers might have taken up gig work to cushion negative labor market outcomes.

Earlier on Monday, White House economic adviser Kevin Hassett told CNBC hosts about "mixed signals in the job market ..." 

"I think that there could be a little bit of almost quiet time in the labor market because firms are finding the AI is making their workers so productive that they don't necessarily have to hire the new kids out of college," Hassett said.

This all suggests that a cooling labor market could push more workers into the gig economy, which in turn could increase the conversation around gig jobs.

Tyler Durden Mon, 11/17/2025 - 13:25

Trump Offers Lifeline To UK 'Thought Criminals'

Trump Offers Lifeline To UK 'Thought Criminals'

Authored by Steve Watson via Modernity.news,

The Trump White House is mulling political asylum for British free speech activists branded “thought criminals” under Keir Starmer’s regime, in one example offering refugee status to those prosecuted for silent protests outside abortion clinics as well as expressing online dissent.

The transatlantic intervention, said to be largely influenced by Elon Musk continually pointing to cases of the UK punishing people for “thought crimes,” signals America’s readiness to shield allies from creeping authoritarianism.

Administration insiders are intently exploring the option of offering visas and refugee status, focusing on figures like Livia Tossici-Bolt, prosecuted in March 2023 for holding a sign near a Bournemouth abortion clinic reading “Here to talk if you want,” and Adam Smith Connor, convicted for a vigil outside Poole Magistrates Court.

A source close to the process called the plan “serious,” noting officials are “beginning to consider” extending protections to gender critical activists, immigration critics, and even pro-abortion campaigners hit with “thought crimes.”

This echoes Trump’s October pledge to offer asylum to Europeans opposing mass migration, prioritising those “targeted for peaceful expression of views online.”

A source with knowledge of the decision-making affirmed: “There are some people inside the administration that are actively scouting for cases.”

Trump set a precedent earlier in the year by granting refugee status to white South Africans claiming racial discrimination, despite halting most other admissions post-January inauguration.

At the UN, Trump recently warned European officials “You’re destroying your countries. They’re being destroyed. Europe is in serious trouble. They’ve been invaded by a force of illegal aliens like nobody’s ever seen before. Illegal aliens are pouring into Europe.” He added that their countries were “going to hell” because of unchecked immigration.

In a GB News interview this past weekend, Trump once again directly tied the UK’s free speech crackdown to its immigration meltdown, declaring “If you don’t get [illegals] out, you’re not going to have a country left… You have areas in London where the police don’t even want to go anywhere near those areas. You have Sharia Law where they don’t even want to obey the laws of your country.”

The administration is also poised to revoke the visa of Imran Ahmed, boss of a Labour-linked NGO founded by Starmer’s chief of staff, after the group pushed online restrictions. Earlier, Starmer’s US trade deal bids nearly collapsed over Tossici-Bolt’s case, with a source insisting: “no free trade without free speech.”

This asylum initiative builds on Trump’s May 2025 dispatch of a U.S. Bureau of Democracy, Human Rights and Labour (DRL) team to London, led by senior adviser Samuel Samson, to meet arrested pro-life activists and affirm “the importance of freedom of expression in the UK and across Europe.”

The squad probed high-profile convictions like Lucy Connolly’s jailing for a social media post calling for asylum hotels to be set on fire after the Southport murders.

Trump’s moves expose the UK’s slide toward policing thoughts, from silent prayer bans to online censorship—offering a beacon for dissidents while pressuring allies to reclaim liberty before it’s lost to radical overreach.

* * *

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Tyler Durden Mon, 11/17/2025 - 13:05

150 Years Of Data Destroy Democrat Dogma On Tariffs: Fed Study Finds They Lower, Not Raise, Inflation

150 Years Of Data Destroy Democrat Dogma On Tariffs: Fed Study Finds They Lower, Not Raise, Inflation

A new historical analysis is challenging the central premise that has guided trade policy, inflation forecasting, and Federal Reserve decision-making for decades. According to the study from the Federal Reserve Bank of San Francisco spanning 150 years of tariff changes across three major Western economies, higher tariffs consistently lower inflation and raise unemployment - directly contradicting longstanding economic orthodoxy.

 

The authors, Régis Barnichon and Aayush Singh, examined tariff shifts between 1870 and 2020 in the United States, the United Kingdom, and France - and came to the conclusion that the conventional view of tariffs causing inflation does not survive empirical scrutiny.

“We find that a tariff hike raises unemployment and lowers inflation,” they write. “This goes against the predictions of standard models, whereby CPI inflation should go up in response to higher tariffs.”

The distinction is subtle but crucial. The authors are not claiming that tariff hikes reduce the price level, only that they consistently reduce CPI inflation - the rate at which prices rise - in the short run, and that the effect is sizable. If the historical evidence is correct, policymakers may have been responding to a threat that did not exist.

If this sounds familiar, SOMEONE noted this in June of 2024...

Again, there is nothing controversial about this view: it is the definition of conventional wisdom. But what is conventional wisdom is once again dead wrong as it has been for much of the past 15 years?

That is the hypothesis of none other than one of the most outspoken and contrarian Wall Street strategists, BofA's Michael Hartnett, who in his latest Flow Show writes that far from inflationary, any new trade war launched by Trump will be a substantially deflationary event. -Hartnett via ZH, June 2024

A Political Divide Becomes an Economic Experiment

The study’s central methodological insight comes from American political history. For much of the period between Reconstruction and the Great Depression, Republicans and Democrats took sharply different positions on tariff policy. Republicans, aligned with industrial interests, favored higher tariffs; Democrats, representing agricultural regions, opposed them.

Because recessions did not systematically favor one party or the other, tariff changes often occurred for political - not economic - reasons. That allowed the authors to treat these shifts as a quasi-random policy experiment. When unemployment rose, Republicans often raised tariffs and Democrats often cut them, but not because of an underlying macroeconomic theory.

“Since recessions did not favor one party over another, there was no general relation between the direction of tariff changes and the state of the economy,” the authors explain.

The researchers also examined eight major tariff reforms driven by long-term political considerations - including the McKinley Tariff of 1890 and the Trump tariffs of 2018 - and found similar effects.

A Counterintuitive Relationship

The central finding is stark: a roughly four-percentage-point increase in average tariffs lowered inflation by about two percentage points and raised unemployment by roughly one percentage point. The relationship held across eras, from the pre-1913 globalization wave to the postwar period.

This pattern runs directly counter to standard economic theory, which holds that tariffs raise costs, push up consumer prices, and depress economic output. Instead, the historical record shows tariffs acting more like a negative demand shock - simultaneously tightening financial conditions and suppressing inflation.

“These findings point towards tariff shocks acting through an aggregate demand channel,” the authors conclude.

What exactly drives that channel remains unclear. The researchers note that tariff announcements often coincide with falling stock prices and spikes in market volatility, suggesting a possible link between uncertainty and weaker economic sentiment. Tariffs may also depress asset prices or alter wage bargaining dynamics. But the paper stops short of identifying the mechanism definitively.

The authors also found that: 

  • Stock prices tend to fall after tariff hikes.
  • Market volatility tends to rise.
  • Tariff announcements may tighten financial conditions or depress household wealth.
A Blow to the Economic Establishment

The implications are far-reaching. For decades, opponents of tariffs have argued that they operate as a regressive “tax on consumers.” During the 2024 presidential campaign, Kamala Harris frequently described Trump’s proposed tariffs as a national sales tax that would raise prices for American families.

The new evidence does not support that claim.

Instead, the study suggests the core inflation argument against tariffs - long treated as dispositive in policy debates - was never empirically grounded. Barnichon and Singh note that surprisingly little macroeconomic research has been conducted on tariff effects, and that much of the conventional wisdom rested on theoretical assumptions rather than historical evidence.

The authors are careful not to endorse any political position, and do not evaluate Trump’s trade policy directly. But their findings significantly weaken the strongest criticisms leveled against Trump's tariff program: that it would intensify inflation.

Did the Fed Misread Tariffs?

The findings also raise uncomfortable questions for the Federal Reserve.

Throughout 2025, several Fed officials warned that tariff hikes risked fueling inflation, and the central bank slowed the pace of rate cuts in part because of those concerns. But if tariffs historically lower inflation, then a textbook monetary response would have been to ease, not hold firm.

While the authors acknowledge that evidence from the modern era is less precise, their overall thesis (which will probably be buried) is clear: higher tariffs correlate with lower inflation and weaker economic activity.

What emerges is a fundamentally revised picture of tariff dynamics - which poses a challenge to models used by economists and central bankers that have underpinned inflation forecasts for rate decisions. 

Tyler Durden Mon, 11/17/2025 - 12:11

Key Events This Week: Macro Returns With Payrolls Thursday, FOMC Minutes And Speakers Galore, But Nvidia Earnings Matters Most

Key Events This Week: Macro Returns With Payrolls Thursday, FOMC Minutes And Speakers Galore, But Nvidia Earnings Matters Most

After the resolution of the US government shutdown, markets face a packed calendar of delayed and scheduled releases this week, although maybe the most important event will be Nvidia’s earnings after the closing bell on Wednesday.

According to DB's Jim Reid, one of the most interesting developments last week in the world of tech was the widening out of AI related CDS spreads, something we had been warning about for the past month. For example, Oracle 5yr CDS widened +18bps to 105bps and CoreWeave around +100bps to 630bps last week even as a volatile week for the Mag-7 ended in only a small -1.19% loss. The tights for the year for both were 33bps and 360bp respectively with the CoreWeave contract only starting trading in September. Some of this is concern about AI corporate bond supply over the next few quarters after a surprise surge in recent weeks. However, it seems that they are also being used as a general hedge for all sorts of positive AI positions. There aren’t many credit names to use to hedge AI lending (private and public), or general exposure, so these are bearing the brunt.    

The US calendar dominates this week as agencies work through the backlog caused by the 43-day shutdown. The headline event is Thursday’s September employment report. DB’s economists expect payrolls to rebound sharply, with headline and private payrolls both forecast at +75k versus consensus of +50k, prior readings of +22k and +38k respectively, leaving unemployment steady at 4.3%. Indicatively, Goldman is also above consensus, at +80k. Average hourly earnings should rise 0.3%, while hours worked edge up to 34.3. If realised, these figures would lift annual nominal compensation growth to 4.9%, though quarterly growth may slow to 3.7%, its weakest pace since the pandemic.

Beyond jobs, several delayed releases will inform Q3 US GDP estimates: August construction spending (today), factory orders (Tuesday), and the trade balance (Wednesday). Earlier data suggested 2.8% annualised growth for Q3 GDP, but this week’s numbers could tilt forecasts higher. More timely indicators include the Empire State manufacturing index (today), NAHB housing market index (tomorrow), Philadelphia Fed survey and October existing home sales (both Thursday). Consumer sentiment from the University of Michigan rounds out Friday, with inflation expectations within that survey remain a key watchpoint for policymakers.

Fed communication will be another major theme. A broad slate of officials speaks throughout the week, including Vice Chair Jefferson, Governor Waller (both today), and regional presidents Williams, Kashkari (today), Barkin and Collins. Markets will scrutinise these remarks for clues on the pace of rate cuts. Jefferson may be the most interesting to see whether he continues to suggest a slowing of rate cuts as the Fed approaches neutral.  

The October FOMC minutes, due Wednesday, should shed light on internal debates and the conditions for a potential December move. Recent commentary suggests a more cautious tone, with some officials signalling that a December cut is far from assured, and on Friday December futures priced in a less than a 50% chance of a cut for the first time. ECB President Lagarde also speaks on Friday, adding a European angle to the policy debate.

Globally, attention will centre on flash November PMIs due Friday. Canadian (today) and UK (Wednesday) CPI figures are released, with UK retail sales and consumer confidence rounding out Friday. In Asia, Japan reports October CPI on Thursday, while China announces lending rates the same day. Corporate earnings will also feature prominently, with Nvidia in the spotlight on Wednesday, joined by Palo Alto Networks and major US retailers such as Walmart, Home Depot and Target. Chinese tech names Baidu and Xiaomi will also report.

Below is a day-by-day look at the week ahead, courtesy of DB.

Monday November 17

  • Data: US November Empire manufacturing index, construction spending, Japan September capacity utilisation, Canada October CPI, existing home sales, housing starts, September international securities transactions
  • Central banks: Fed's Williams and Kashkari speak, ECB's Guindos, Sleijpen, Lane and Cipollone speak, BoE's Mann speaks

Tuesday November 18

  • Data: US November New York Fed services business activity, NAHB housing market index, September total net TIC flows, Japan October trade balance, September core machine orders
  • Central banks: Fed’s Barkin speaks, ECB’s Dolenc speaks, BoE's Pill and Dhingra speak
  • Earnings: Home Depot, Baidu, Xiaomi, PDD

Wednesday November 19

  • Data: US trade balance, UK October CPI, RPI, PPI, September house price index, Italy September current account balance, ECB September current account
  • Central banks: FOMC minutes, Fed’s Williams, Barkin and Logan speak
  • Earnings: Nvidia, Palo Alto Networks, Target, Lowe’s, TJX
  • Auctions: US 20-yr Bonds ($16bn)

Thursday November 20

  • Data: US September nonfarm payrolls, unemployment rate, hourly earnings, October leading index, existing home sales, November Philadelphia Fed business outlook, Kansas City Fed manufacturing activity, Japan October national CPI, Germany October PPI, Eurozone November consumer confidence, September construction output, Canada October industrial product and raw materials price index, Denmark Q3 GDP
  • Central banks: China 1-yr and 5-yr loan prime rate, Fed's Hammack, Goolsbee and Paulson speak, BoJ's Koeda speaks, BoE's Dhingra speaks
  • Earnings: Walmart, Gap, Intuit, Copart
  • Auctions: US 10-yr TIPS (reopening, $19bn)

Friday November 21

  • Data: US, UK, Japan, Germany, France and the Eurozone flash November PMIs, US November Kansas City Fed services activity, US consumer sentiment, UK November GfK consumer confidence, October retail sales, public finances, France November manufacturing confidence, October retail sales, Canada September retail sales
  • Central banks: Fed's Williams and Logan speak, ECB's Lagarde, Guindos, Kocher, Muller and Nagel speak, BoE's Pill speaks

Finally, looking at just the US, Goldman writes that with the government now open, it expects the statistical agencies to continue updating their data release schedules over the coming days. There are several speaking engagements from Fed officials this week, including a speech on the economic outlook by Vice Chair Jefferson on Monday. The minutes to the FOMC’s October meeting will be released on Wednesday.

Monday, November 17 

  • 08:30 AM Empire State manufacturing survey, November (consensus +5.8, last +10.7)
  • 09:00 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver welcoming remarks at the New York Fed’s 2025 Governance and Culture Reform Conference. In an interview with the Financial Times published on November 9th, Williams described the FOMC’s interest rate decision at its December meeting as “a balancing act,” reflecting the fact that “inflation is high” while the labor market was “gradually cooling.” He noted that “Something could happen that cuts into confidence, or consumer spending growth that we’re seeing at the aggregate level may not be as robust, if you will, as it would be otherwise, given that a lot of folks are really, again, living month to month.”
  • 09:30 AM Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on the economic outlook and monetary policy at an event hosted by the Kansas City Fed. Text and moderated Q&A are expected. On November 7th, Jefferson said that it “makes sense to proceed slowly as we approach the neutral rate.” Jefferson said he takes a “meeting-by-meeting approach” to policy decisions, which he said was “especially prudent because it is unclear how much official data we will have before our December meeting.”
  • 10:00 AM Construction spending, August (GS flat, consensus -0.1%, last -0.1%)
  • 01:00 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will moderate a fireside chat with Christophe Beck, CEO of Ecolab. On November 13th, Kashkari said that “the anecdotal evidence and the data we got just implied to me underlying resilience in economic activity, more than I expected.” He said he could “make a case—depending on how the data goes—to cut [at the FOMC’s December meeting], I can make a case to hold, and we’ll have to see.”
  • 03:35 PM Fed Governor Waller speaks: Fed Governor Chris Waller will deliver a speech on the economic outlook at The Society of Professional Economists’ annual dinner. Moderated and audience Q&A and text are expected. On October 31st, Waller said that “the biggest concern we have right now is the labor market.” He added that “we know inflation is going to come back down, so this is why I’m still advocating that we cut policy rates in December, because that’s what all the data is telling me to do.”

Tuesday, November 18 

  • 08:15 AM ADP employment weekly preliminary estimate, average for the four weeks ended November 2 (last 11.25k)
  • 10:00 AM Factory orders, August (GS +1.3%, consensus +1.4%, last -1.3%); Durable goods orders, August final (GS +2.9%, consensus +2.9%, last +2.9%); Durable goods orders ex-transportation, August final (consensus +0.4%, last +0.4%); Core capital goods orders, August final (consensus +0.6%, last +0.6%); Core capital goods shipments, August final (last -0.3%)
  • 10:00 AM NAHB housing market index, November (consensus 36, last 37)
  • 10:30 AM Fed Governor Barr speaks: Fed Governor Michael Barr will deliver a speech on bank supervision at the Kogod School of Business at American University. Moderated and audience Q&A and text are expected. On October 9th, Barr said that “although several data points indicate that the labor market may be roughly in balance, we also know there has been a sharp drop in job creation since May, which suggests risks to the labor market going forward.” However, he noted that the “Federal Reserve's price stability goal faces significant risks,” adding that he is “skeptical of assurances that we should fully look through higher inflation from import tariffs.”
  • 11:00 AM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver a speech on the economic outlook at the Top of Virginia Regional Chamber at Shenandoah University. Text and audience Q&A are expected. On October 16th, Barkin said he remained “sanguine” on the economic outlook, noting that “the ground may look shaky today” but there were “countervailing forces that will limit the downside.”
  • 07:55 PM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will deliver closing remarks at the Dallas Fed’s Global Perspectives conference. On November 16th, Logan said she would find it “hard to support another rate cut unless we were to get convincing evidence that inflation is really coming down faster than my expectations or that we were seeing more than the gradual cooling that we’ve been seeing in the labor market.”

Wednesday, November 19 

  • 08:30 AM Trade balance, August (GS -$68.0bn, consensus -$60.3bn, last -$78.3bn)
  • 10:00 AM Fed Governor Miran speaks: Fed Governor Stephen Miran will deliver a speech on the US financial regulatory framework at the Bank Policy Institute. Text and moderated Q&A are expected. On November 14th, Miran said that since the September meeting (where the median projection in the Summary of Economic Projections (SEP) showed three interest rate cuts in 2025) “all the data that we’ve gotten have been dovishly inclined.” On November 10th, Miran said the FOMC should cut 25bp in December “at a minimum.”
  • 12:45 PM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver the same speech on the economic outlook that he will give on November 18th at the University of Richmond’s Jopson Alumni Center. Text and audience Q&A are expected.
  • 02:00 PM FOMC meeting minutes, October 28-29 meeting: At its October meeting, the FOMC lowered the target range for the funds rate by 25bp to 3.75-4% and announced that balance sheet runoff would end at the start of December. At the post-meeting press conference, Powell emphasized that policy is not on a preset course (“far from it”), acknowledged that there are “strongly different views” on the FOMC about a December cut, and noted that some participants might see the lack of official data as a reason not to cut in December. We suspect there is substantial opposition on the FOMC to the risk management cuts, and we expect the minutes to the FOMC’s October meeting to reflect those concerns. Powell himself noted that “there’s a growing chorus now of feeling like maybe this is where we should at least wait a cycle, something like that, … and … you can expect that in the minutes.”
  • 02:00 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will deliver welcoming remarks at an event titled “Making Missing Markets: Connecting Communities and Capital” at the New York Fed.

Thursday, November 20 

  • 08:30 AM Initial jobless claims, week ended November 15 (GS 230k, consensus 225k, GS estimate of last 228k): Continuing jobless claims, week ended November 8 (GS estimate of last 1,936k)
  • 08:30 AM Nonfarm payroll employment, September (GS +80k, consensus +50k, last +22k): Private payroll employment, September (GS +85k, consensus +60k, last +83k); Average hourly earnings (MoM), September (GS +0.2%, consensus +0.3%, last +0.3%); Unemployment rate, September (GS 4.3%, consensus 4.3%, last 4.3%): We estimate nonfarm payrolls rose 80k in September. On the positive side, big data indicators indicated a sequentially firmer pace of private sector job growth. On the negative side, we expect a 5k decline in government payrolls, reflecting a 10k decline in federal government payrolls and a 5k increase in state and local government payrolls. We suspect August payroll growth will be revised higher, as has been typical over the last decade, though revisions so far this year have been disproportionately downward. We estimate that the unemployment rate was unchanged at 4.3% on a rounded basis, reflecting the stabilization in continuing claims over the September reference period, though the bar for rounding up to 4.4% is not high from an unrounded 4.32% in August. We estimate average hourly earnings rose 0.2% (month-over-month, seasonally adjusted), reflecting negative calendar effects.
  • 08:30 AM Philadelphia Fed manufacturing index, November (GS -1.0, consensus 2.0, last -12.8)
  • 08:45 AM Cleveland Fed President Hammack (FOMC non-voter) speaks: Cleveland Fed President Beth Hammack will deliver opening remarks at the 2025 Financial Stability Conference hosted by the Cleveland Fed. Q&A is expected. On November 13th, Hammack said that she thought the FOMC needed to “remain somewhat restrictive to continue putting pressure to bring inflation down toward our target,” which would involve keeping rates “around these [current] levels.”
  • 10:00 AM Existing home sales, October (GS flat, consensus +0.5%, last +1.5%)
  • 11:00 AM Fed Governor Cook speaks: Fed Governor Lisa Cook will take part in an event on financial stability hosted by Georgetown University. Moderated and audience Q&A and text are expected. On November 3rd, Cook said that inflation was “on track to continue on its trend toward our target of 2 percent once the tariff effects are behind us” and that “the slightly rising unemployment rate indicates the labor market is softening, but only modestly so.” Cook also noted that the labor market “can deteriorate very quickly. There can be non-linear effects. So I’m watching this very, very carefully.”
  • 12:40 PM Chicago Fed President Goolsbee (FOMC voter) speaks: Chicago Fed President Austan Goolsbee will take part in a moderated discussion at a lunch hosted by the CFA Society of Indianapolis. Moderated Q&A is expected. On November 6th, Goolsbee said that the lack of data during the government shutdown meant that if there were “problems developing on the inflation side, it’s going to be a fair amount of time before we see that,” which he said made him “even more uneasy.” Goolsbee said he “lean[s] more toward the, ‘When it’s foggy, let’s just be a little careful and slow down.’”
  • 06:15 PM Fed Governor Miran speaks: Fed Governor Stephen Miran will take part in an event hosted by the American Investment Council. Moderated Q&A is expected.
  • 06:45 PM Philadelphia Fed President Paulson (FOMC non-voter) speaks: Philadelphia Fed President Anna Paulson will deliver a speech on the economic outlook at the Philadelphia Fed’s 80th Annual Field Meeting Capstone. Text is expected. On October 13th, Paulson said she did not see “the type of conditions, especially in the labor market, which seem likely to turn tariff-induced price increases into sustained inflation.” At the same time, Paulson noted that “momentum in the labor market is to the downside.” Paulson said she viewed “easing along the lines of the median Summary of Economic Projections (SEP) policy path as appropriate” over the rest of the year.

Friday, November 21 

  • 07:30 AM New York Fed President Williams speaks: New York Fed President John Williams will deliver a keynote speech at the Annual Conference of the Central Bank of Chile. Text and Q&A are expected.
  • 08:30 AM Fed Governor Barr speaks: Fed Governor Michael Barr will deliver welcoming remarks at the Fed Challenge finals. Text is expected.
  • 08:45 AM Fed Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on financial stability at the Cleveland Fed’s 2025 Financial Stability Conference. Text and audience Q&A are expected.
  • 09:00 AM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will take part in a moderated panel at The SNB and Its Watchers 2025 conference in Zurich. Text and Q&A are expected. 
  • 09:45 AM S&P global US manufacturing PMI, November preliminary (consensus 52.0, last 52.5); S&P Global US services PMI, November preliminary (consensus 55.0, last 54.8)
  • 10:00 AM University of Michigan consumer sentiment, November final (GS 50.0, consensus 50.8, last 50.3); University of Michigan 5-10-year inflation expectations, November final (GS 3.6%, last 3.6%)

Source: DB, Goldman

Tyler Durden Mon, 11/17/2025 - 11:27

Novo Undercuts Lilly's Obesity Drug Price, Now Cheaper Than Car Payment 

Novo Undercuts Lilly's Obesity Drug Price, Now Cheaper Than Car Payment 

Just before the US cash session, Novo Nordisk A/S announced it will slash prices on Wegovy and Ozempic in a direct challenge to Eli Lilly's obesity drug, aiming to regain market share. The announcement comes just weeks after President Trump finalized a deal with Novo and Lilly to reduce costs as part of the administration's affordability push ahead of next year's midterms.

Beginning immediately, introductory doses of Wegovy and Ozempic will cost just $199 per month for the first two months for cash-pay patients. After that, the price rises to $349 per month. This makes Novo's obesity drugs approximately 30% cheaper than Lilly's low-dose Zepbound and dramatically lower than the more than $1,000 per month many patients paid last year.

In the eyes of the consumer, $1,000 monthly payments for obesity drugs made little financial sense. However, now $349 per month could be viewed as "cheap" considering the average new car payment is $749 and the average used car payment is $529, according to the latest Experian data. 

Novo pointed out that the price cut aligns with a recent agreement with the Trump administration to expand access to medicines for patients living with obesity and other chronic conditions like diabetes, while lowering prices in the direct-to-patient, self-pay channel for 2026, adding "Novo Nordisk is bringing these prices to consumers months in advance of that commitment." 

Earlier this month, Novo and Eli Lilly struck deals with the Trump administration to lower the prices of their blockbuster obesity drugs.

"I call it the fat drug ... we're offering it at drastic discounts," Trump told reporters at the time. 

Novo shares in Copenhagen fell on the news, down about 2%. The stock is down roughly 51% for the year.

Goldman analysts recently mapped out the next wave of obesity-drug catalysts in a report to clients (read the report). 

Tyler Durden Mon, 11/17/2025 - 11:00

Lower The Steaks, Raise The Stakes

Lower The Steaks, Raise The Stakes

By Benjamin Picton, Senior Market Strategist at Rabobank

US stocks closed mixed on Friday to cap off a week where concerns over valuations caused substantial wobbles. The NASDAQ was in the red for the week while the Dow Jones and S&P500 managed to eke out minor gains. Markets have seemingly begun to pay attention to the heroic P/E multiples that many AI-adjacent names are trading on, with more questions being raised about the ability of AI hype to be converted into tangible profits for shareholders.

Scion Capital’s Michael Burry (of Big Short fame) made headlines last week by shutting down his hedge fund, telling investors that “my estimation of value in securities is not now, and has not been for some time, in sync with the markets”. Burry had been critical of tech darlings Palantir and NVIDIA, disclosing on X that he had spent $9.2m buying up puts against Palantir stock as he questioned the economics of the AI boom and suggested that some accounting practices concerning depreciation schedules looked rubbery. News emerged this morning that Palantir co-founder Peter Thiel has sold his entire stake in NVIDIA and substantially trimmed his position in Tesla while adding to longs in Microsoft and Apple.

There was also a geopolitical element to risk-off sentiment last week. Crude oil prices lifted after Iran’s Revolutionary Guard Corps seized a tanker in the Strait of Hormuz – the first such seizure since the end of the war between Iran and Israel in June – and Donald Trump said that he had “made up [his] mind” on Venezuela, hinting that the 15,000 US troops and more than a dozen warships (including the US’s largest warship, the USS Gerald R. Ford carrier) recently moved to the area as part ‘Operation Southern Spear’ could see action to oust the Maduro regime. Maduro, clearly sensing the danger, broke into a rendition of John Lennon’s ‘Imagine’ (yes, really) at a rally on Saturday as he urged peace.

Events in the Russia-Ukraine war also added to pressure on energy markets. Ukrainian strikes on the Russian Black Sea port of Novorossiysk has reportedly interrupted up to 2% of Russian oil supply while drone strikes on a refinery near Ryazan south of Moscow put further pressure on Russia’s ability to produce refined hydrocarbons used as transport fuels. Consequently, European gasoil futures closed the week 2.86% higher.

According to the Guardian, Russia has responded to Ukrainian strikes by targeting Ukrainian rail infrastructure and train drivers. The Guardian cites a Ukrainian government Minister who says that there has been a threefold increase in strikes on the Ukrainian rail system since July. Degrading Ukrainian rail infrastructure makes it more difficult for Ukraine to move troops and supplies to the front lines, but it will also make it harder to move grain cargoes out of the country. RaboResearch’s Agri Commodity Market Research team have just published their 2026 annual outlook available here.

Geopolitical risks have also been rising elsewhere. Relations between China and Japan have deteriorated over recent comments by Japanese PM Takaichi suggesting that a Chinese strike on Taiwan could be considered “existential” for Japan, and therefore justify Japanese military intervention under the country’s pacificist constitution. Meanwhile, tensions between India and Pakistan have been rising following a series of bombings and the government of Thailand has said that it is suspending its ceasefire with Cambodia, accusing the latter of laying landmines at the border. The US has responded by suspending trade deal talks with Thailand in a bid to pressure the latter to recommit to the ceasefire.

Spot gold benefited from rising geopolitical risks to close more than 2% higher on the week at $4,082/oz. Bitcoin has been heavily sold off and is dealing just over $94,000/coin at time of writing. The DXY missed a safe-haven bid last week and US 10-year yields rose by almost 3 basis points on Friday to 4.15%. That’s a rise of just over 5 basis points on the week, but US 10s outperformed their counterparts in Australia and the UK after a strong jobs report all but dashed hopes of another rate cut in the former and the rolling political and budgetary shambles in the latter scared investors away. Yields on 10-year French OATs fell slightly on the week while Bunds performed similarly to Treasuries.

Having felt the sting of recent election losses, the Trump administration has moved quickly to shore up support via cost of living measures for America’s middle and working classes. Notable recent items include a $2,000 tariff “dividend” for low and middle-income Americans, a $1,000 tax-advantaged ‘Trump Account’ invested in US stocks for babies born from 2025 through 2028, hinted 50-year mortgages and mooted changes to health insurance arrangements to see government funding redirected from insurance companies direct to individuals’ accounts.

The administration also announced on Friday that it would be exempting certain food items from tariffs. Exempt items include beef, coffee, cocoa, bananas, tomatoes, avocadoes, coconuts, pineapples, oranges, tea, nutmeg and cinnamon. Many of these items share the characteristic of having little or no domestic supply source in the USA or, in the case of beef, supply that is heavily constrained by the lowest US herd numbers since the 1950s. Consequently, tariff protection is unlikely to induce a near-term domestic supply response and (contingent on demand elasticities) is likely to be passed through to consumers as higher prices.

The reduction in tariffs on imported foodstuffs is therefore likely to reduce inflation pressures. This will be an interesting point of consideration at the December FOMC meeting as Fed rate-setters sift through the backlog of data that had been delayed by the US government shutdown and try to guess at the path ahead for inflation, employment and growth while also weighing up threats from frothy asset markets and geopolitical risks. OIS futures are currently pricing a 41% probability of a 25bp cut at the December meeting...

... but perhaps lowering the cost of steaks raises the stakes for the FOMC?

Tyler Durden Mon, 11/17/2025 - 10:40

USPS Reports 5.7% Decline In Parcel Volumes, $9BN Loss

USPS Reports 5.7% Decline In Parcel Volumes, $9BN Loss

Submitted by Eric Kulisch of FreightWaves,

The U.S. Postal Service lost $9 billion in fiscal year 2025, a $500 million improvement from the prior year that officials attributed to greater revenue intake and reduction in transportation and workers compensation costs. But controllable loss, essentially adjusted operating income that excludes expenses such as workers compensation that are out of management’s control, worsened from $1.8 billion to $2.7 billion.

Financial results for the year ended Sept. 30 were released Friday as the Postal Service ups its tempo for the busy holiday period, when package and greeting card volumes surge. 

The U.S. Postal Service needs to “execute flawlessly” during the peak shipping season before Christmas, and beyond, to demonstrate it can sustain improved service performance and win more parcel volumes necessary for the organization’s financial recovery, Postmaster General David Steiner said in a video address to employees this week.  Service levels are steadily improving this year and the Postal Service is regularly able to achieve on-time service in the high-eighty and mid-ninety percentiles for some of our products, he told the board of governors Friday. And nearly half of the packages and mail are actually delivered earlier than the service standard.

The national post said operating revenue increased $916 million, transportation expenses fell $422 million and worker’s compensation expense declined $1.1 billion, partially offset by increased compensation and benefits expense of $1.7 billion, including a voluntary retirement program, and higher other operating expenses of $221 million.  About 10,500 employees accepted early retirement offers leading to a $167 million expense provision.

Total operating revenue was $80.5 billion, an increase of $916 million, or 1.2 percent, compared to the prior year. The increase was due largely to continued growth of USPS Ground Advantage shipping service, which replaced first-class package services in 2023 and offers two-to-five day service standards for packages up to 70 pounds, as well as price increases in both mail and shipping categories.

First-Class Mail revenue increased 1.5% ($370 million) on a 5% volume decline year over year. Marketing Mail revenue increased 2.3% ($350 million), despite a 1.3% decline in volume. Shipping and packages revenue increased 1.0% to $32.6 billion despite a 5.7% volume decline, or 415 million pieces. 

The Postal Service is seeking further administrative and legislative reforms to get rid of outdated financial and regulatory burdens that other government agencies don’t face. These reforms include: changes in retiree pension benefit funding rules for the Civil Service Retirement System benefits, diversification of pension assets, raising the statutory debt ceiling, and workers’ compensation administration reform. The Postal Service Reform Act of 2022 repealed the requirement that the USPS annually prepay future retirement health benefits, but more structural changes are needed, postal officials say. 

Steiner, who has been on the job for a little more than 100 days, said he planned to build on the Delivering for America transformation plan of his predecessor, Louis DeJoy, saying the Postal Service is “generally on the right track in terms of network modernization strategies.”

He stressed the importance of generating more revenue by attracting parcel business, which postal watchers say is one of the few tools available since most costs are fixed and difficult to lower. In a news release last month, Steiner added that he expects the Postal Service to continue gaining market share in the parcel sector.

The USPS, which delivered an average of 23.9 million packages per day in 2024, controls more than 30% of the parcel market by volume. Despite being the market share leader, it only gets about 17% of the market’s total revenue, compared to UPS’s nearly 32% of revenues and FedEx, with 25% of the available revenue, according to ShipMatrix. 

“By any standard our financial situation is precarious. No organization, even the Postal Service, can lose billions every year without consequences. Over the coming 12 months, we are going to act with urgency to get on a financially sustainable path,” Steiner said in the video.

Peak season prep

Postal service officials say they are ready for the busiest mailing period of the year. 

Over the past four years, the U.S. Postal Service has invested nearly $20 billion in its facilities, logistics and processing capabilities, to streamline its mail and package network and improve delivery reliability. 

The USPS has added 94 high-tech package sorting machines this year. The installation of 614 total automated sorters over the past five years has increased daily processing capacity from 60 million to 88 million packages. The machines have automated scanning capabilities that allow tracking visibility for customers as packages move through the postal system and can handle larger packages than legacy machines, according to the semi-private agency. 

The Postal Service is hiring 14,000 temporary employees to help handle the surge in letters and parcels, down from 40,000 a few years ago. There is less need for temporary workers after the USPS in 2020 began converting 232,000 precareer employees to full-time positions. 

This year, the national post has opened new facilities in Dallas, Phoenix; Johnson City, Tennessee; and other locations, and will soon open buildings in Memphis, Tennessee; Birmingham, Alabama; Tampa, Florida; and San Antonio, Texas.  Within the past four years, USPS has opened nine regional processing and distribution centers; 19 regional transfer hubs (which now handle two thirds of three-to-five day Ground Advantage packages); 17 local processing centers and 133 sorting and delivery centers. 

At the same time the USPS is adding more efficient infrastructure, it is closing other facilities in an effort to consolidate operations. 

The U.S. Postal Service in 2021 had 427 facilities, many of them operated by contractors or under short-term leases, functioning in an uncoordinated manner. Under the transformation agenda initiated by former Postmaster General Louis DeJoy, the agency is moving to standardize operations by downsizing the network to 250 facilities — 60 regional processing and distribution centers, and 190 local  processing centers that sort letters, flats and parcels for final-mile delivery. Critics say the reorganization has negatively affected service in recent years.

Updated service standards this year allow the USPS to turn around mail within a region in two or three days, an improvement from the past, according to the USPS.

“Without a doubt, the Postal Service is in a better place today than it would have been without these initiatives. They dramatically improved our middle mile operations to transform the Postal Service into a logistics powerhouse,” Steiner said during the board meeting. “While we may change specific initiatives as we move forward and our execution needs improvement, I do not see the need for a fundamental reassessment of our processing and logistics modernization strategies at this time.”

The Postal Service said it has received nearly 29,000 new vehicles this year and deployed more than 24,000 of them on postal delivery routes. The Postal Service expects to acquire a total of 106,480 new vehicles, including 66,000 zero-emission electric vehicles, aimed at improving service reliability and reducing emissions. 

Tyler Durden Mon, 11/17/2025 - 10:00

'Goldilocks' Empire Fed Manufacturing Survey Surges To One Year High

'Goldilocks' Empire Fed Manufacturing Survey Surges To One Year High

Amid the last month's absence of hard economic data, investors have had to rely on soft survey data (and alternative providers) and that has been somewhat optimistic...

Today, we saw yet another soft survey data point beat expectations as the NY Fed's 'Empire State Manufacturing Survey' surged to +18.7 from +10.7 and smashing expectations of a +5.8 print...

“Manufacturing activity grew at a solid pace in New York State, with the survey’s headline index reaching its highest level since last November," said Richard Deitz, Economic Research Advisor at the New York Fed.

Gauges of new orders and shipments also advanced to the highest in a year.

The overall outlook over the next six months moderated but has been positive for most of the year.

A measure of factory employment edged up and a gauge of hours worked climbed to the highest since May 2022 against the backdrop of steadier demand. The outlook for employment in the next six months climbed to the highest since the start of the year.

Additionally, The Fed’s report showed gauges of prices paid for materials as well as a measure of prices received both eased. Forward-looking metrics for both also cooled.

Finally, we find it interesting that this survey soared after the election of Marxist sympathizer Mamdani as NYC mayor?

Tyler Durden Mon, 11/17/2025 - 09:30

A Very Important Week For Consumer Stocks 

A Very Important Week For Consumer Stocks 

Goldman's top sector specialist, Scott Feiler, offers four thoughts on the consumer ahead of what he calls a "very important week" for the space.

Feiler said that consumer stocks finally showed signs of life last week, helped by a few solid earnings beats, but the improvement was mostly based on market rotation as AI names dumped for three consecutive days.

He said the next round of consumer earnings, from now till Thanksgiving, should look better than the first leg of the earnings season. 

Positioning in discretionary sits at 7-year lows, he noted, adding that many traders are reluctant to pre-trade a 2026 "consumer rebound" given that the group still trades in the shadow of daily AI moves and a labor market that feels soft. 

Here's what Feiler is telling clients about consumer stocks before the week kicks off:

1. Consumer Refresh – The consumer group finally acted a little better last week. Why? It helped that the limited consumer EPS reports we got were good and were finally rewarded, as opposed to faded (ONON, REAL, DDS). We should get a run of good results this week and next from a bunch of the bellwethers. It won't be unanimous, but earnings between now and Thanksgiving should feel much better than the 1st part of the consumer earnings season.

While the better EPS results helped last week, the improved price action really just felt primarily the result of market factors.   The sector outperformed the market 3 days in a row (Tuesday to Thursday). Those 3 days just so happened to be the 3 days of the substantial AI underperformance.

2. What Next for Consumer? Hope, but Without Conviction:

It does feel like we can see some better price action in consumer until year-end. It does not feel like it can happen in a straight line though. We highlighted gross exposure last week in discretionary is at 7 year lows (GS PB) and there is still optimism about the tax refund/stimulus trade in 1H26.

3. Bellwether Week Ahead – Better Results Finally?:

  • Glass Half Full Week?: Some of the biggest consumer companies in the world report this week.  It will not be perfect but would expect this week of earnings to be better than the last few in Consumer.

  • WMT - No Change?: Given some of the recent concerns on the US consumer, there are few more important things this week than WMT. A beat and raise is expected. It is worth noting that our analyst, Kate McShane, spoke with the management 3x during September and October. Their message was always that they had seen no change to the US Consumer, despite industry concerns. COST did release October results a couple weeks after our last conversation with WMT and COST noted some slowdown at the end of October. Bottom-line, expectations are for WMT's actual results to be quite good still, but there will be a focus as to whether they saw the late October and early November slowing that others alluded to.

  • Others That Should Beat: There will be plenty of other really important ones also. Beats are expected are TJX, WSM, ROST & GAP. Then next week, beats are expected from BBY, BURL, DKS, URBN & others.

  • Home Improvement – Price Action is a Must Watch: Sentiment has cooled here very recently. Small top-line downside is expected from both HD and LOW and consensus numbers in 2026 have been moving lower. Despite some expected squishiness here, there does still seem to be investors optimism that pockets of housing are ownable into 2026 (HD especially). That is why price action will be just as telling as actual results, given few names in consumer have traded well on squishy results so far.   Our view is the price action out of HD and LOW feels like it will be more important than the actual results, absent a shock out of numbers (other than tiny top-line downside).

4. De-grossing Activity Slowed & Consumer Was Slightly Better to Buy: In last weekend's note, we highlighted how gross exposure to consumer discretionary on our PB book hit 7 year lows. This past week, the PB noted single stocks saw their largest gross trading activity in over 4 years, and Consumer Discretionary and Staples both participated in that, and were both better to buy. That's a change vs the recent trend.

The total PB book saw long buys outpacing short sales (3.4 to 1). Consumer was not alone in higher trading activity, as all sectors saw increased gross trading flow, led in $ terms by Info Tech (short sales > long buys), Industrials (long buys > short sales), Health Care (long buys > short sales).  Consumer Disc (long buys > short sales), and Staples (long buys > short sales) were close behind though.

Investor positioning within the consumer stocks that Feiler's desk tracks.

Related:

With low-income consumers certaintly pressured, the Trump administration has launched:

All eyes are on low-tier consumers. Their sentiments matter. 

Tyler Durden Mon, 11/17/2025 - 09:15

US Home Builders Offer 'Elevated' Incentives Amid Affordability Challenges

US Home Builders Offer 'Elevated' Incentives Amid Affordability Challenges

Authored by Mary Prenon via The Epoch Times (emphasis ours),

Faced with affordability constraints and cautious demand, and with abundant land in states such as Arizona, Utah, Texas, and Florida, many developers are offering enticing incentives to potential homebuyers.

A model of a new single-family home at The Ridge at Stone Butte in Phoenix, Arizona. Courtesy of RE/MAX Signature in Phoenix

A recent Redfin report indicates that builders are offering mortgage-rate buydowns, assistance with closing costs, and upgraded home amenities to attract buyers. In areas where supply exceeds demand, the report found builders offering up to $10,000 in closing costs, as well as top-of-the-line appliances or home finishes.

“New homes still make up a significantly higher portion of the single-family supply than before the pandemic,” the report states. As demand escalated during the COVID-19 pandemic, new home construction increased to approximately 35 percent in 2022, up from 20 percent in 2019.

While new construction has slowed to 27 percent in August, some markets are still experiencing a glut of leftover new homes on the market. As a result, the report indicates, builders may be cautious about starting new projects as they attempt to sell off existing inventory.

In its October report, the National Association of Home Builders’ (NAHB) housing market index (HMI) found that 38 percent of builders were reducing prices by as much as 6 percent, while 65 percent indicated they were offering sales incentives to prospective buyers.

Still, the NAHB noted that builder confidence for newly-constructed single-family homes was 37 in October—up by five points from September and the highest reading since April.

D.R. Horton, one of the country’s largest homebuilders, recently reported that its homebuilding revenue for the fiscal year ending Sept. 30 decreased by 7 percent to $31.5 billion, with homes closed dropping by 5 percent to 84,863.

In an Oct. 28 statement, the Arlington, Texas-based company indicated it had 29,600 homes in inventory, of which 19,600 were unsold as of the end of September.

David Auld, D.R. Horton’s executive chairman, said that affordability constraints and cautious consumer sentiment are still impacting new-home demand.

A newly built 3-bedroom, 2-bath home in Willis, Texas, is listed for $535,000. Courtesy of the Houston Association of Realtors ‘Incredible Deals’

Developers in Houston, Texas, are offering “incredible deals,” Houston Association of Realtors Vice Chair Kat Robinson told The Epoch Times.

“Some of them have mortgage interest rates as low as 3.99 percent—that’s unbelievable,” she said.

“So now buyers have the choice of paying around 6 percent for a resale where they may have to make some repairs, or just drive an extra 15 minutes to buy something new for a much lower rate.”

Other concessions include help with closing costs or upgrades to appliances or countertops.

“The incentive plans change about every month based on the number of units sold,” Robinson noted.

Sales of new single-family homes are comparable to last year, she said, and much better than in 2023. Pricing varies by development and location, but on average, a 1,800-square-foot new construction with three bedrooms and two baths is listed for $500,000.

Many developments offer a community center, pool, walking paths, other amenities, along with monthly homeowners association (HOA) fees.

Still, resale homes continue to draw prospective buyers.

“A lot of older neighborhoods have full-grown trees that canopy the streets and create a charming experience,” Robinson said. “A lot of people do prefer resale homes because they want trees.”

According to Robinson, the greater Houston area has more listings than ever, and buyers now have many choices and more negotiation power.

Some Areas See Higher Sales

Christy Walker, president of the Phoenix Realtors, told The Epoch Times that nearly 10 percent of the 19,200 active home listings in the greater Phoenix area are new builds, and she has seen developers offering buyer incentives.

Some of the incentives include lower interest rates of 4.5 percent on conventional loans and 4.25 percent on Federal Housing Administration (FHA) loans, according to Walker. Other incentives include assistance with closing costs or home upgrades, such as appliances or finishes.

Meanwhile, Walker has witnessed higher sales for new construction in the area.

“We have a new build that we’re selling, and appointments to see models on the new construction site were scooped up within the first hour,” she said.

“We now have over 600 on a waiting list to see them.”

Located in North Phoenix, The Ridge at Stone Butte offers single-family homes ranging from 1,600 to 4,000 square feet, featuring gourmet kitchens, spa-like bathrooms, walk-in closets, and panoramic views of the desert.

Walker noted that new construction for a 1,800-square-foot, single-family home with three bedrooms and two bathrooms typically lists in the mid-$600,000s.

“With the median sales price of about $550,000 for a similar resale home, a lot of potential homeowners are opting for a brand new home—one where they can actually save on mortgage interest costs,” she said.

Because Phoenix and its outlying regions have abundant available land, the area has traditionally been a popular place for new home development.

“We have a lot of out-of-state buyers looking for more affordable options, as well as some local move-up and first-time buyers,” Walker noted.

New Construction in 2026

In its Emerging Real Estate Trends for 2026 report, PCW and the Urban Land Institute forecast that builders are looking to the future with cautious optimism. While new homes and resale inventory are increasing, some builders are shifting to single-family rental partnerships and slowing down on major land purchases.

“Affordability remains the greatest challenge and is being addressed by constructing smaller, lower-spec homes, as most buyers are willing to sacrifice size and finishes for price relief,” the report states.

The report suggests one method builders could use to make homes more affordable is to build smaller ones. The average size of a new single-family home fell to 2,386 square feet in the second quarter from a peak of 2,692 square feet in 2016.

Other builders say they plan to lower the ceiling height, provide fewer windows, and add lower-finish countertops to save costs.

Some builders surveyed believe rising costs in labor and materials could be challenging over the next two years. Almost all stressed the need for collaboration with local municipalities to allow for increased density, thereby reducing housing costs and streamlining the permitting process and project approvals.

In an earlier report this year, the National Association of Realtors found that the South is experiencing some of the best deals in new home construction. It named the five markets with the largest declines in new home prices: Little Rock, Arkansas, with a 15.6 percent drop; Austin, Texas, 8.5 percent lower; Wichita, Kansas; Jacksonville and Cape Coral, Florida, all at more than 7 percent declines.

“We expect our sales incentives to remain elevated in fiscal 2026, the extent to which will depend on market conditions throughout the year,” he said.

Auld said that the company has expanded its new home construction into seven new states and 38 markets.

 

 

Tyler Durden Mon, 11/17/2025 - 09:00

Loomered: Trump Withdraws Nominee For Top IRS Lawyer

Loomered: Trump Withdraws Nominee For Top IRS Lawyer

President Donald Trump on Friday withdrew the nomination of veteran tax attorney Donald L. Korb to serve as the top lawyer for the Internal Revenue Service (IRS), right as the Senate was preparing to vote on his nomination for assistant general counsel - which provides legal advice and support to departmental officials, including how the government interprets tax codes and defends their positions in US Tax Court.

The Internal Revenue Service (IRS) in Washington on March 10, 2025. Madalina Vasiliu/The Epoch Times

While Trump gave no explanation for the move - writing only on Truth social "Please be advised that I am withdrawing the nomination of Donald Korb to be Assistant General Counsel in the Department of the Treasury," it comes after activist and Trump ally Laura Loomer alleged "major red flags" that disqualify him.

As the Epoch Times notes, days before Trump pulled Korb’s nomination, the veteran tax attorney came under fire by right-wing activist and Trump ally Laura Loomer, who alleged he had “several major red flags that disqualify him from assuming his role under the Trump administration.” In a post on social media, Loomer said Korb had too much past association with Democrats.

After the president withdrew Korb’s nomination, Loomer took credit in a post on X.

Korb did not respond to a request for comment by publication time.

The president has pulled multiple nominees in recent months as he continues to fill critical positions in his second administration.

On Sept. 19, Trump withdrew the nomination of Erik Siebert to serve as U.S. attorney for the Eastern District of Virginia. Siebert had been leading the probe into New York Attorney General Letitia James’s mortgage fraud case, but his office did not find “incriminating evidence” to bring charges, according to a joint statement by Sens. Mark Warner (D-Va.) and Tim Kaine (D-Va.).

The following day, Trump said he had appointed his former attorney, Lindsey Halligan, to serve in the role as U.S. attorney for the Eastern District of Virginia.

The White House announced on Sept. 30 that it had withdrawn economist EJ Antoni’s nomination to lead the Bureau of Labor Statistics.

“Dr. EJ Antoni is a brilliant economist and an American patriot that will continue to do good work on behalf of our great country,” a White House official said. “President Trump is committed to fixing the longstanding failures at the BLS that have undermined the public’s trust in critical economic data.”

Aldgra Fredly and Andrew Moran contributed to this report.

Tyler Durden Sun, 11/16/2025 - 19:15

Japan Summons Chinese Ambassador Over Online Threats Against Prime Minister

Japan Summons Chinese Ambassador Over Online Threats Against Prime Minister

Authored by Dorothy Li via The Epoch Times (emphasis ours),

Japan has demanded action from Beijing over violent threats made by a Chinese envoy against Japanese Prime Minister Sanae Takaichi as the Chinese regime ramps up pressure and threats against Tokyo.

Japan's Prime Minister Sanae Takaichi (C) answers a question during a session of the House of Councillors Budget Committee at the National Diet in Tokyo on Nov. 12, 2025. Kazuhiro NOGI/AFP via Getty Images

Japan’s foreign ministry said on Nov. 14 that it summoned China’s ambassador to lodge strong protests regarding the “highly inappropriate” statements by Consul General Xue Jian of the Chinese Consulate General in Osaka, the largest metropolis in western Japan.

On Nov. 8, Xue shared a local media report about Takaichi’s claim that a Taiwan conflict involving the use of force would likely constitute “a survival-threatening situation” for Japan, a classification that could compel Tokyo to mobilize its military to intervene.

“The dirty neck that sticks itself in must be cut off,” Xue wrote in Japanese in a now-deleted post on X, according to a screenshot shared by U.S. Ambassador to Japan George Glass.

In a subsequent post, the Chinese diplomat said viewing an attack on Taiwan as a threat to Tokyo is “a path of death” that some “stupid politicians in Japan would choose.”

Xue’s comments have triggered a formal protest from Tokyo. Lawmakers from the ruling and opposition parties have urged the government to expel the Chinese diplomat. On Nov. 14, the Osaka city council adopted a resolution demanding a formal apology from the Chinese authorities.

In Beijing, the communist regime has dialed up pressure on Takaichi, demanding a retraction of her Taiwan statement, which they claimed soured bilateral relations.

On Nov. 13, the regime’s vice foreign minister, Sun Weidong, called in the Japanese ambassador in China, voicing Beijing’s “strong dissatisfaction and opposition” to Takaichi’s remarks on Taiwan, the regime’s ministry said on Nov. 14.

The Chinese regime has cautioned Chinese citizens against traveling to Japan. In a notice issued late on Nov. 14, the regime’s foreign ministry and its embassy in Japan claimed that the Japanese leader’s recent remarks on Taiwan “severely damaged” the atmosphere for people-to-people exchanges and posed “significant risks” to the safety and security of its nationals.

Hours later, the three largest airlines in mainland China—Air China, China Southern, and China Eastern—said in separate notices that they will offer full refunds for flights to Japan from Nov. 15 to Dec. 31.

A member of security stands guard at the Japanese embassy in Beijing on Nov. 14, 2025. -/AFP via Getty Images

Takaichi defended her position on Nov. 10, saying that her initial remarks were based on the assumption of a “worst case” scenario.

“It is in line with conventional government views,” she told a parliament committee, adding that she would not retract her statements but would avoid making similar remarks in future sessions.

Japan’s Ministry of Foreign Affairs also rejected Beijing’s interpretation of Takaichi’s words, telling reporters several times this week that its official stance on Taiwan remains unchanged.

Despite the Japanese government’s clarification, China’s state media has unleashed a barrage of editorials and articles this week lambasting the Japanese prime minister for “crossing the line” with Beijing.

The latest commentary by People’s Daily, the Chinese Communist Party’s (CCP) flagship newspaper, published on Nov. 14, accused Takaichi of threatening China with military intentions over the Taiwan issue.

Taiwan

At a press conference on Nov. 14, China’s defense ministry accused Japan of meddling in its internal affairs, saying that if Tokyo tries to use forces to intervene in Taiwan, it would face a “crushing defeat” and “pay a heavy price.”

The CCP has never ruled Taiwan before but  views the self-ruled democracy as part of its territory to be taken by force if necessary. Taiwan rejects such claims, with its president saying that the future of Taiwan can only be decided by its 230 million people.

To pressure Taiwan to accept communist rule, the regime has been flying warplanes near the island on a nearly daily basis and carrying out large-scale military exercises in the Taiwan Strait, heightening international concerns about a potential Chinese invasion.

Japan, with its westernmost island of Yonaguni just 110 km (68 miles) from Taiwan, is anxious that any conflict in the Taiwan Strait could spill over into its own territory. Japan also hosts more than 50,000 American troops along with advanced U.S. military aircraft.

A Japan Coast Guard vessel patrolling the waters off Yonaguni Island, Japan, on Aug. 18, 2022. Philip Fong/ AFP via Getty Images

“The peace and stability of [the] Taiwan Strait is important not only for the security of Japan but for the stability of the global community,” Japanese Foreign Minister Toshimitsu Motegi told a regular press conference via interpreter on Nov. 14.

“We truly hope that the issues regarding Taiwan will be peacefully resolved through dialogue,” he said. “And this has been the consistent and unchanging position of the government of Japan.”

On Nov. 15, the Chinese regime’s Maritime Safety Administration said a three-day live-fire drill would be held in parts of the central Yellow Sea, starting from Nov. 17.

Pointing to Beijing’s military exercises and travel bans against Japan, Taiwan’s president’s office on Nov. 15 expressed concerns about regional stability.

“The Chinese authorities’ politically motivated, multifaceted threats against Japan pose a grave danger to security and stability in the Indo-Pacific,” said Karen Kuo, spokesperson for the Presidential Office, according to Taiwan’s official Central News Agency.

Taiwan called on the CCP to cease such “inappropriate unilateral actions immediately” and refrain from becoming a “troublemaker in the international community,” Kuo said.

Tyler Durden Sun, 11/16/2025 - 18:40

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