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Kremlin Blasts 'Unacceptable' Western Plan For Ukraine Security Guarantees

Kremlin Blasts 'Unacceptable' Western Plan For Ukraine Security Guarantees

After earlier this week European Commission President Ursula von der Leyen boasted to The Financial Times that the European Union had "pretty precise plans" for deploying a multinational force to Ukraine, and which is backstopped by the Untied States, the Kremlin has made clear it has flatly rejected such a prospect.

Ministry of Foreign Affairs spokeswoman Maria Zakharova said Wednesday that Moscow would not even discuss or entertain in any way deployment of foreign troops in Ukraine as part of a future peace deal. There will be no international post-conflict security force "in any format" - she made clear.

"Russia is not going to discuss the fundamentally unacceptable and security-undermining foreign intervention in Ukraine in any form, in any format," Zakharova told reporters on the sidelines of the Eastern Economic Forum in Vladivostok.

Via France24

Suggesting that it's entirely a waste of time for the West to be talking about such a topic, she said "next time they aim to discuss this topic, they should have a pointer in the form of Russia’s position."

"Judging by Ukraine’s losses, the European Commission has simply outdone itself," Zakharova added, at a moment Russia's ground forces continue to make gains in the east, and even into the more central Dnipropetrovsk region.

And yet Europe is still forging ahead, with French President Emmanuel Macron hosting a summit of European leaders on Thursday. He declared, "We are ready, we the Europeans, to offer the security guarantees to Ukraine and Ukrainians the day that a peace (accord) is signed."

He called details of guarantees "extremely confidential" but indicated that the preparations had been complete. Various allied defense ministers will take up the issue in the Paris meeting on Thursday. But confidential or not, Russia has clearly already rejected whatever multinational force plan that the Western allies have on the table.

Moscow has consistently made clear its position, stretching back months or even over the last year, but this doesn't seem to have gotten through to Western capitals.

President Putin while speaking from Beijing Wednesday, after observing Xi's big military parade along with North Korea's Kim Jong Un, didn't sound like he's in a hurry to make compromises at the negotiating table.

He painted a picture of his troops having the clear battlefield momentum and upper-hand, describing that "Ukrainian combat-ready units are staffed at no more than 47-48%," in a speech. "Ukrainian military is constantly forced to redeploy units from one part of the front, to another," he said.

That's when he underscored that if the Ukraine conflict "cannot be resolved peacefully, Russia will be forced to achieve its objectives by military means."

He did say that "If Zelensky is interested in meeting, let him come to Moscow" - but that such a meeting can only happen once clear understandings are reached, and if something substantial can be agreed up, and not just for the sake of optics or having a meeting just to have it.

Tyler Durden Thu, 09/04/2025 - 09:30

Initial Jobless Claims Rise To Highest Since June

Initial Jobless Claims Rise To Highest Since June

Following an ugly JOLTS print, a weaker than expected ADP employment report, and Challenger Grey data showing the weakest hiring plans on record for an August, initial jobless claims rose modestly from 229k to 237k (more than the 230k expected) - the highest since June, but still merely in the same range it has been oscillating in for the last four years...

Source: Bloomberg

Continuing claims dipped last week, but remain above the 1.9 million American Maginot line...

Source: Bloomberg

After JOLTS showed government employment weakness, continuing jobless claims in the 'Deep TriState' are trending higher still (at highest since Dec 2021)...

Source: Bloomberg

So while jobless claims 'miss' made it 4 for 4 labor market disappointments this week, the claims print is certainly nothing to panic over.

Tyler Durden Thu, 09/04/2025 - 08:36

ADP Employment Report Disappoints in August; Hiring Plans Collapse

ADP Employment Report Disappoints in August; Hiring Plans Collapse

Ahead of Friday's all-important payrolls print (and revisions), this morning's ADP employment report may see more attention as a less 'manipulated' data point.

The headline print was expected to slow to 68k in August (from +104k in July and -23k in June) but in fact slowed further, adding just 54k jobs...

Source: Bloomberg

Leisure and hospitality and construction performed well despite a broader month-over-month slowdown in hiring.

"The year started with strong job growth, but that momentum has been whipsawed by uncertainty," according to Dr. Nela Richardson Chief Economist, ADP.

"A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers, and AI disruptions."

Goods and Services jobs both saw slowing in August...

Source: Bloomberg

Manufacturing, Transportation and Education saw job losses in August...

“I think at this point, it’s clear that the labor market is slightly cooling down,” said Nataliia Lipikhina, head of EMEA equity strategy at JPMorgan Private Bank.

“The market is now pricing a 97% chance of the Fed cut. What could change that potentially is if we have very strong inflation data, but we’re not seeing that yet.”

'Job Stayers' saw incomes rise at their slowest pace since June 2021 while 'job changers' are still seeing higher and rising incomes...

In separate figures, hiring plans fell to the weakest level for any August on record and intended job cuts mounted, according to outplacement firm Challenger, Gray & Christmas.

Tyler Durden Thu, 09/04/2025 - 08:23

US Futures Rise As Global Bond Rout Fizzles

US Futures Rise As Global Bond Rout Fizzles

US equity futures are higher, extending yesterday's gains, while the global bond rout is put on hold for the time being as traders boost wagers on a faster pace of US interest-rate cuts ahead of Friday’s pivotal jobs report. As of 8:00am ET, S&P futures are 0.1% higher, pointing to a back-to-back advance, and Nasdaq futures gain 0.25%, with Mag 7s mostly higher premarket as AMZN and TSLA add 1.3% and 1.4%, respectively. Advances were stronger in Europe, where the Stoxx 600 strengthened 0.6% and French bonds led gains across the board. Treasuries extended gains, with the yield on 10-year notes falling two basis points to 4.19% while the USD is higher. Commodities are mostly lower; oil -1.2%; gold -0.6%. Overnight, not a lot of major headlines in the US as investors are waiting for the 2x major catalysts this week (Broadcom earnings today after the close, and NFP tomorrow). Today we get the ADP Employment report at 8:15am ET (68k survey vs 104k prevsious) and ISM Services at 10am ET today (50.9 survey vs. 50.1 prior).

In premarket trading, Mag 7 stocks are mostly higher (Amazon +1.6%, Tesla +1.1%, Nvidia -0.7%, Meta +1.8%, Apple -0.3%, Microsoft -0.1%, Alphabet -0.7%). 

  • American Eagle (AEO) gains 26% after the clothing retailer reported better-than-expected 2Q revenue, boosted by demand following its Sydney Sweeney ad campaign.
  • C3.ai (AI) slumps 13% after the software company forecast revenue for the second quarter that missed the average analyst estimate. It also named Stephen Ehikian as its new CEO, replacing founder Tom Siebel, who will remain executive chairman.
  • Caleres (CAL) falls 7% after the footwear retailer reported adjusted earnings per share for the second quarter that missed the average analyst estimate.
  • Ciena (CIEN) climbs 11% after the maker of equipment used by telecom companies reported adjusted earnings per share for the third quarter that beat the average analyst estimate.
  • Credo Technology (CRDO) is up 11% after reporting adjusted earnings per share for the first quarter that beat the average analyst estimate.
  • Figma (FIG) falls 15% after the software design company forecast annual sales that failed to impress Wall Street’s lofty expectations. This was the company’s first report since it went public in late July.
  • GitLab (GTLB) is down 7% after the software company gave an outlook for third-quarter revenue that was weaker than expected. It also said that Brian Robins will step down as chief financial officer.
  • HP Enterprise (HPE) is up 3% even as the company expects narrower profit margins as it enters the next leg of AI-driven demand. Bloomberg Intelligence says that with server execution issues behind it, the company should get free cash flow back on track in fiscal 2026.
  • PagerDuty (PD) falls 3.6% after the cloud computing company trimmed the top end of its 2026 revenue guidance range. The company’s third quarter adjusted EPS view came in slightly lower than the consensus estimate.
  • Salesforce (CRM) is down 7% after the software company gave an outlook that was seen as underwhelming.
  • T. Rowe Price Group Inc. (TROW) rises 8% as Goldman Sachs Group Inc. will invest as much as $1 billion in the company and team up with the asset manager to sell private-market products to retail investors.

Calm is returning to markets after days of shifts in stocks and bonds that were driven by concerns over stretched valuations and government finances. As data continue to highlight softness in the labor market, swaps show traders are nearly fully pricing in a quarter-point rate cut this month and broadly split on the likelihood of another in October.
Until Wednesday, most traders saw a second cut only by December.

“September’s cut is a given but we don’t have any strong convictions going forward,” said Fabien Benchetrit, head of target allocation for France and southern Europe at BNP Paribas Asset Management. “As for equities, we’re on the lookout for opportunities and we would look for a temporary weakness to reinforce our positions.”

Economists project about 75,000 jobs were added in August, based on the median of a Bloomberg survey, while the jobless rate is seen at 4.3%. Four straight months of sub-100,000 payrolls growth would mark the weakest such stretch since the onset of the pandemic in 2020. Ahead of Friday’s data, the ADP Research report on Thursday showed even  slower private payroll growth in August, with jobs rising just 54K, below the 68K expectation, and down from 106K the previous month. Weekly initial jobless claims are seen little changed from the week before.

In separate figures, hiring plans fell to the weakest level for any August on record and intended job cuts mounted, according to outplacement firm Challenger, Gray & Christmas.

“I think at this point, it’s clear that the labor market is slightly cooling down,” said Nataliia Lipikhina, head of EMEA equity strategy at JPMorgan Private Bank. “The market is now pricing a 97% chance of the Fed cut. What could change that potentially is if we have very strong inflation data, but we’re not seeing that yet.”

Elsewhere, Wall Street strategists say investors are increasingly uneasy about the Fed’s independence as President Donald Trump pressures the central bank for rate cuts and seeks greater influence over its leadership. Market positioning across stocks, bonds and gold indicates investors are bracing for a potential pickup in inflation following Trump’s nomination of close adviser Stephen Miran to the Fed and his move to oust Governor Lisa Cook, JPMorgan strategists said. Meanwhile, Goldman analysts warned that mounting doubts over US institutional credibility pose “significant tail risks,” including the risk of a surge in the price of gold... supposedly much more than the one already observed. 

In Europe the Stoxx 600 strengthened 0.4%, rising for a second day as investors welcomed a further pullback in longer-dated European government bond yields. Retail and media stocks are outperforming while the travel and leisure sector is one of the few decliners as budget airlines including EasyJet and Ryanair drop after a profit warning from Jet2. Here are some of the biggest movers on Thursday:

  • Genus shares jump as much as 29% after the animal genetics specialist reported adjusted pretax profit for the full year that beat the average analyst estimate.
  • Currys shares rise as much as 24% after the electrical retailer reported a strong update.
  • SMA Solar rallies as much as 5.7% as Jefferies upgrades to hold following the significant correction in the German solar-energy equipment maker’s shares after it delivered a profit warning this week.
  • Asseco Poland surges as much as 7.8% after the IT company’s second-quarter profit beat estimates on growing demand for new software solutions to Poland’s public sector, as well as its international expansion.
  • Grafton rises as much as 5.8% as the building material supplier’s first-half profit surpasses analysts’ estimates and it confirms a recovery in current trading.
  • Sanofi shares drop as much as 10% after an experimental drug for atopic dermatitis disappointed investors in a late-stage trial.
  • Saab shares drop as much as 6.7% as Morgan Stanley initiates coverage of the Swedish defense company with an underweight rating, cautious of the market’s elevated expectations at peak multiples. Kongsberg declines as much as 3% on an equal-weight initiation.
  • Jet2 shares slump as much as 25% after the budget travel firm said it expects full-year Ebit to come in at the lower end of the consensus range.
  • Lisi shares fall as much as 14% after Peugeot Invest sold 2.7 million shares in the aircraft parts maker for €39/share, for a total amount of approximately €105 million, according to a statement.
  • CVC Capital falls as much as 5% after the private markets firm reported an adjusted Ebitda for the first half-year that slightly missed the average analyst estimate.
  • D’Ieteren drops as much as 8% after the automobile distributor delivered first-half results that disappointed analysts.

Earlier in the session, in Asia, a selloff in Chinese stocks deepened on a Bloomberg report that regulators may move to cool a rally that has added $1.2 trillion since August. Still, Asian stocks were set to snap a two-day losing streak, led by financials, as investors returned to risk assets after US jobs data boosted Fed rate-cut bets. Chinese benchmarks declined. The MSCI Asia Pacific Index gained rose 0.2%, supported by Commonwealth Bank of Australia and Mitsubishi UFJ Financial Group. SoftBank Group and Sony Group were also among key advancers. Japan led regional gains, with benchmarks in South Korea and India also moving higher. In China, stocks plunged after Bloomberg reported that regulators are muling cooling measures for the market on concerns over the speed of the recent rally. The country has also started imposing duties on additional US optical fiber imports after a months-long investigation. Benchmarks in Hong Kong and the mainland dropped more than 1%. Meanwhile, shares in India got a lift after policymakers announced a range of consumption tax cuts to boost local demand. 

In FX, the Bloomberg Dollar Spot Index is up 0.1%. The Norwegian krone leads declines among G-10 peers against the greenback, falling 0.6%. The Swiss franc falls 0.1% with little reaction seen after headline CPI matched expectations.

In rates, treasury futures hold small gains in early US session, with yields richer by 2bp-3bp, following similar price action in European bonds. Long-end gilts outperform, flattening the UK yield curve. Economic data calendar provides main focal points of US session, including ADP employment and ISM services index. US 10-year, about 2bp richer on the day near session low, slightly underperforms bunds and gilts in the sector; curve spreads are narrowly mixed, broadly within 1bp of Wednesday’s closing levels. German, French and UK 30-year borrowing costs are down some 5 bps each. Treasuries also gain, with the US 30-year yields down 2 bps to 4.88%.

In commodities, spot gold drops $20. Oil prices fall for a second day, with WTI down 1.2% to $63.20 a barrel. Bitcoin falls 1.2%.

Today's US economic data slate includes August Challenger job cuts (7:30am), August ADP employment change (8:15am), 2Q final nonfarm productivity and unit labor costs, weekly jobless claims and July trade balance (8:30am), August final S&P Global US services PMI (9:45am) and August ISM services index (10am). Fed speaker slate includes New York Fed’s Williams (12:05pm) and Chicago Fed’s Goolsbee (7pm)

Market Snapshot

  • S&P 500 mini +0.1%
  • Nasdaq 100 mini +0.2%
  • Russell 2000 mini +0.2%
  • Stoxx Europe 600 +0.4%
  • DAX +0.5%
  • CAC 40 -0.3%
  • 10-year Treasury yield -2 basis points at 4.2%
  • VIX -0.1 points at 16.29
  • Bloomberg Dollar Index +0.1% at 1206.84
  • euro -0.1% at $1.1645
  • WTI crude -1.1% at $63.26/barrel

Top Overnight News

  • US House Republicans are reportedly less than eager to extend Obamacare subsidies which expire at the end of the year, a GOP aide cited said an extension is “Incredibly unpopular within the conference, expensive, bad policy, etc.": Punchbowl
  • A federal judge barred the Trump administration from unilaterally cutting roughly $12 billion in foreign aid that Congress approved and is poised to expire by the end of September. BBG
  • US Republicans are looking into and/or speaking out against the administration's plan to use the CHIPS Act to take a stake in Intel (INTC). Senator Rounds is looking into its legality while Young is said to be sceptical: Punchbowl;
  • China’s financial regulators are considering a number of cooling measures for the stock market as they grow concerned about the speed of a $1.2 trillion rally since the start of August, people familiar with the matter said. BBG
  • A rare meeting of Chinese fiscal and monetary policymakers has prompted speculation among analysts that easing measures are on the cards that will bolster the bond market and economic growth this year. BBG
  • Japan and the United States are in the final stages of talks to implement lower tariffs on Japanese automobile imports within 10-14 days after the issuance of a U.S. presidential executive order, a Japanese government source told Reuters on Thursday. That means that a reduced U.S. tariff rate on Japanese cars, from the current 27.5% to 15%, is set to take effect by the end of this month. RTRS
  • BYD, the Chinese EV giant, has slashed its sales target for this year by as much as 16% (from ~5.5M units to ~4.6M) as demand cools and competition rises. RTRS
  • Alibaba, ByteDance and other Chinese tech firms remain keen on Nvidia's artificial intelligence chips despite regulators in Beijing strongly discouraging them from such purchases, four people with knowledge of procurement discussions said. They want reassurance that their orders of Nvidia's H20 model, which the U.S. firm in July regained permission to sell in China, are being processed, and are closely monitoring Nvidia's plans for a more powerful chip, tentatively named the B30A and which is based on its Blackwell architecture. RTRS
  • DeepSeek is building an AI model with advanced agent features to challenge rivals such as OpenAI, people familiar said. The release is planned before year-end. BBG
  • European leaders are said to be increasingly concerned that Russia will mount a new Ukraine offensive. Trump told CBS he remains committed to pursuing a peace agreement. BBG
  • Bond traders are banking on revenue from Trump’s tariffs to bolster the US’s public finances,, in a sharp switch from earlier this year when his trade war triggered a brutal sell off in the Treasury mkt.  investors are now counting on hundreds of billions of dollars raised by the remaining tariffs to offset Trump’s tax cuts and keep a lid on US borrowing. FT
  • The rally in small-cap stocks has stalled as rising yields and uncertainty over the Fed’s policy weigh on investor sentiment. The Russell 2000 Index has dropped every day so far in September. BBG
  • BofA Institute total card spending +2.8% Y/Y in week ending August 30th (vs +1.8% July average); Spending growth for pre-Labor Day at 1.9%, supporting a Q3 rebound.

Corporate News

  • Goldman Sachs Group Inc. will invest as much as $1 billion in T. Rowe Price Group Inc. and team up with the asset manager to sell private-market products to retail investors.
  • Revolut Ltd. is quietly engineering a series of transactions that would allow the fintech to stay private for longer while maintaining strict control over its registry of shareholders.
  • DeepSeek is developing an artificial intelligence model with more advanced AI agent features to compete with US rivals like OpenAI in a newer frontier of the technology, Bloomberg News has reported.
  • Sanofi’s experimental drug for the skin condition atopic dermatitis disappointed investors in a late stage trial, after the benefit of the drug was less than expected. The stock fell.
  • Tesla Inc. said it has opened its robotaxi app to the general public, suggesting the company will soon roll out the service beyond a select group of early access users in Austin, Texas.
  • Apple Inc. is planning to launch its own artificial intelligence-powered web search tool next year, stepping up competition with OpenAI and Perplexity AI Inc.
  • Salesforce Inc. shares fell 6% in premarket trading as the firm projected lackluster quarterly sales growth, suggesting its artificial intelligence product isn’t yet paying off as quickly as hoped for.
  • Hewlett Packard Enterprise Co. Chief Executive Officer Antonio Neri said the company expects to weather a slimming of profit margins as it enters a new era of artificial intelligence-driven demand.

Trade/Tariffs

  • China's Commerce Ministry announced anti-dumping duties on some types of US optical fibres, effective September 4th.
  • Japan and the US in final stage of talks to implement lower tariffs on Japanese auto imports, according to Japanese sources cited by Reuters; reductions could take effect within 10-14 days after US presidential executive order. Japan and the US to issue joint statement on July trade accord, also MoU on rules for Japan's investment package. Japan aims to secure an executive order soon after the trade negotiator arrives in Washington.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks followed suit to the mixed performance stateside, where tech and communications outperformed following the Google antitrust ruling, and participants digested dovish data and Fed rhetoric. ASX 200 advanced with the gains led higher by outperformance in the top-weighted financial sector and with tech stocks inspired by US counterparts. Nikkei 225 outperformed despite light catalysts, although Japan's trade negotiator Akazawa is scheduled to visit the US from today, while he noted that administrative issues have been resolved and will continue to push for a presidential order for what has been agreed on tariffs. Hang Seng and Shanghai Comp were pressured following a report that China is said to consider curbs on stock speculation to foster steady gains, while US-China frictions resurfaced following US President Trump's comments during the Victory Day parade and with China announcing anti-dumping duties on optical fibre from the US.

Top Asian News

  • China is said to consider curbs on stock speculation to foster steady gains, according to Bloomberg.
  • China's Global Times, on Nasdaq exchange's proposed changes to its listing standard, says “The proposed rule could be seen as targeted or discriminatory, potentially restricting Chinese companies, especially tech firms, from listing in the US,”.
  • China's DeepSeek is reportedly targeting AI agent release by year-end, according to Bloomberg.
  • UMC (2303 TT) reports August 2025 revenue -7.2% Y/Y.

European bourses (STOXX 600 +0.3%) opened mixed and traded tentatively on either side of the unchanged mark, before sentiment improved a little to now show a mostly positive picture. European sectors opened mixed but now hold a slight positive bias. Travel & Leisure is found right at the foot of the pile, and is the clear underperformer today. Downside which has been driven by Jet2 (-14%), after the Co. provided an awful trading update, where it now sees EBIT at the lower end of its guided range. Healthcare also sits towards the foot of the pile, giving back some of the prior day’s losses, but also following an update from Sanofi (-8.7%); the Co. announced that amlitelimab met all primary and key secondary endpoints in the COAST 1 phase 3 study. Though analysts highlight that the efficacy of the drug did not meet expectations.

Top European News

  • Germany's IFW says 2025 GDP expected at 0.1%, 2026 at 1.3% and 2027 at 1.2%. Unemployment expected to decline to 5.8% from 6.3% this year.
  • RWI forecasts that the German economy will grow 0.20% in 2025 (prev. saw 0.30%); sees 1.1% in 2026 (prev. saw 1.5%).
  • Ifo Institute for Economic Research lowers 2025 German economic growth forecast to 0.2% (prev. saw 0.3%); cuts 2026 forecast to 1.3% (prev. saw 1.5%).
  • BoE Monthly Decision Maker Panel data - August 2025: In the three months to August, firms reported that their year-ahead own-price inflation was expected to be 3.7%, unchanged from the three months to July. Expectations for year-ahead CPI inflation rose by 0.1 percentage points to 3.3% in the three months to August.
  • Riksbank's Jansson says underlying inflation pressures do not look too dramatic. There is a risk that temporary inflation effects could become more persistent if they find a way into price-setting behaviour, wages, and inflation expectations. A situation with higher inflation is much worse than a slightly delayed economic recovery. Being on top of the inflationary issue, "even though we are optimistic", is important. Don't need to hit 2% exactly before bank can cut, but need confirmation that inflation is temporary and, on the way, down.

FX

  • DXY is a touch higher after suffering on Thursday in the wake of a larger-than-expected decline in US job openings, which further added to the narrative that the labour market is continuing to cool. Today sees further jobs metrics from the US with ADP, weekly claims and Challenger lay-offs all due on deck. Elsewhere, ISM Services will be parsed for evidence of how tariffs are impacting the non-manufacturing industry and used as a proxy for Q3 growth. Fed speak today includes Williams, who will be speaking on the outlook for policy and the economy. Traders will also be mindful of Fed nominee Miran's appearance before the Senate Banking Committee. DXY delved as low as 98.07.
  • EUR is steady vs. the USD and holding below its 50DMA at 1.1665 after a session of slight gains yesterday. Following a non-incremental Eurozone inflation release earlier in the week, newsflow for the Bloc has slowed down. We have heard from a slew of ECB speakers covering both the dovish and hawkish ends of the spectrum. French political tensions remain a part of the market narrative ahead of next Monday's confidence vote in PM Bayrou. A softer-than-expected outturn for EZ retail had little sway on price action. EUR/USD is currently caged within Wednesday's 1.1607-82 range.
  • After clawing back some of its recent losses vs. the USD yesterday, the JPY is once again on backfoot with USD/JPY reverting back onto a 148 handle. Price action for the pair this week has been dictated by perceptions of the BoJ being non-committal to additional tightening and broader moves in the USD. JPY saw some mild support following source reporting via Reuters that Japan and the US are in the final stage of talks to implement lower tariffs on Japanese auto imports; reductions could take effect within 10-14 days after a US presidential executive order. USD/JPY has ventured as high as 148.41.
  • GBP is slightly firmer vs. the USD after a steady start to the session with little follow-through from Wednesday's BoE TSC hearing, which saw policymakers broadly (ex-Taylor) reaffirm their cautious stance on additional easing given the risks surrounding the persistence of underlying inflation. The August DMP report showed expectations for year-ahead CPI inflation rose by 0.1ppts to 3.3% in the three months to August. Cable currently sits towards the top end of Wednesday's 1.3333-1.3458 range.
  • Antipodeans are both softer vs. the broadly firmer USD after gaining vs. the greenback on Wednesday. With little follow-through seen from a larger-than-expected Australian goods balance during APAC trade, broader moves in the USD will likely dictate the state-of-play for both pairs.
  • PBoC set USD/CNY mid-point at 7.1052 vs exp. 7.1405 (Prev. 7.1108).

USTs

  • USTS are flat/incrementally firmer. In a very thin 112-16 to 112-22 bound. Numerous updates on the trade and Fed front overnight, but nothing that has fundamentally shifted the narrative as we await the Senate hearing on Miran’s appointment to the Fed and then numerous US data prints, which include ADP National Employment, Jobless Claims, ISM Services PMI.
  • Bunds are firmer. Specifics for the region remain focussed on politics and supply. On the first point, French PM Bayrou is holding a meeting with the Socialist Party this morning, though the Socialists remain clear that they will not support Bayrou and the gathering is essentially a formality. As such, the base case firmly remains that Bayrou will lose Monday’s confidence vote, barring an 11th hour deal. On the supply front, Spain was well received and passed without incident. More pertinently, given the political situation, France sold the top-end of its forecast amount though the longer-dated cover was a little softer than is typically the case, seemingly weighing on OATs by around 10 ticks. Bunds at the upper end of a 129.27 to 129.70 band; was briefly held back on the French auction but has since continued to climb to fresh highs.
  • Gilts moved in tandem with EGBs throughout the morning. Opened higher by just under 10 ticks before extending to gains of over 40 at best. Printing a 90.66 WTD high, looking to a double-top of 90.84 from last week. Press focus remains firmly on the Deputy PM. Given this, updates around the Autumn Budget have quietened down a touch. On Wednesday, Chancellor Reeves pushed back against some forecasts that the “black hole” in UK finances is GBP 50bln in size, remarks which also saw her reiterate commitment to the fiscal rules and describe a lot of the speculation around her taxation plans as “rubbish”.
  • Spain sells EUR 5.49bln vs exp. EUR 4.5-5.5bln 1.40% 2028, 3.10% 2031, 4.20% 2037 Bono and EUR vs exp. EUR 0.25-0.75bln 1.00% 2030 I/L.
  • France sells EUR 11bln vs exp. EUR 9.5-11bln 3.50% 2035, 3.60% 2042, and 3.75% 2056 OAT.
  • UK sells GBP 800mln 0.625% 2045 I/L Gilt: b/c 3.91x (prev. 3.19x) & real yield 2.412% (prev. 2.23%).

Commodities

  • Crude remains subdued after declining yesterday on OPEC+ headlines with the group reportedly mulling another oil production hike at Sunday’s meeting but with the decision not yet made. That being said, prices this morning found a floor after Russian Deputy PM Novak clarified OPEC-8 are not discussing production increase now, and no agenda has been set for the upcoming OPEC+ meeting yet. Novak added current market conditions and forecasts are to be considered. WTI currently resides in a 63.05-63.84/bbl range while Brent sits in a USD 66.67-67.41/bbl range.
  • Softer trade across the board for precious metals despite a lack of fresh catalysts but with some possible profit-taking ahead of tomorrow's jobs report. Spot gold resides in a USD 3,511-3,564.15/oz range at the time of writing, with the next upside level being Wednesday's peak at USD 3,578.66/oz.
  • Base metals are lower across the board despite a relatively rangebound dollar and mixed risk sentiment, although Chinese markets traded with low spirit overnight which could explain the similar sentiment in industrial commodities.
  • Russian Deputy PM Novak says OPEC-8 are not discussing production increase now; no agenda has been set for the upcoming OPEC+ meeting yet; current market conditions and forecasts are to be considered.
  • OPEC+ could weigh a 12-month phase-out of the cut, delegate sources told Argus, implying monthly increments of about 137k BPD; should this go ahead they expect a cautious approach, maintaining the flexibility to increase, pause, reduce or even reverse. There are also doubts over some countries' ability to ramp up production. Kazakhstan has been consistently overproducing and is near its maximum capacity. The unwinding of the cut "will amount to nothing more than 700,000-800,000 b/d at best", a delegate said. "If we bring it in a phased process, monthly increments will be around 60,000 to 70,000 b/d. The impact will be minimal," the delegate said.
  • US Private Energy Inventories (bbls): Crude +0.6mln (exp. -2mln), Distillates +3.7mln (exp. -0.6mln), Gasoline -4.6mln (exp. -1.1mln), Cushing +2.1mln.
  • Russia's Energy Minister said Rosneft signed a deal on additional supply of 2.5mln tons of oil to China via Kazakhstan.
  • Russian Energy Minister says construction work on raising of existing Power of Siberia pipeline capacity to 44bcm (currently 38bcm) has already commenced, via Ria; adjustments to be made so maintenance does not occur in high demand periods

Geopolitics: Middle East

  • Israel reportedly conducted a strike on Hezbollah terrorist infrastructure in Ansariyah in southern Lebanon, according to Visegrad 24 via X.
  • "The "Gideon 2 vehicles" operation in Gaza may extend to a full year", via Sky News Arabia citing Yedioth Ahronoth's miliary sources

Geopolitics: Ukraine

  • US President Trump said he will find out over the next week or so how good the relationship is with Russia, while he also commented that the US will help Poland protect itself with US soldiers to remain in Poland and will put more there if they want. Furthermore, Trump said he will be talking to Ukrainian President Zelensky shortly in the next days, as well as implied 2nd and 3rd phases of Russian oil sanctions.
  • Russia said security guarantees sought by Ukraine are "guarantees of danger to the European continent". It was separately reported that a Russian Foreign Ministry spokeswoman said allegations of Russia being behind European Commission President Von der Leyen's plane incident is fake and paranoia.
  • North Korean leader Kim and Russian President Putin held a meeting in Beijing where Putin highly praised North Korean soldiers fighting in Kursk and Kim expressed thanks, while Kim told Putin that North Korea would continue to support Russia and the leaders reaffirmed they would keep bilateral relations at a high level, according to KCNA.
  • Ukrainian President Zelensky is expected to have a one-on-one meeting with US Envoy Witkoff on Thursday, according to Reuters sources.
  • WSJ's Norman posts "any claim that Europe is “ready” on its part in security guarantees is a very significant exaggeration."

US Event Calendar

 

DB's Jim Reid concludes the overnight wrap

The global bond selloff finally paused for breath yesterday, as weak US data meant investors ramped up their expectations for Fed rate cuts this year. The main catalyst was the JOLTS report for July, which showed that job openings fell to a 10-month low and exacerbated fears about a labour market slowdown. So that pushed the 2yr Treasury yield (-2.2bps) to 3.62%, whilst the 30yr yield (-6.5bps) saw an even bigger decline to 4.90%. Moreover, any fall in yields is going to ease some concern about the fiscal situation, which gave risk assets a lift as well on both sides of the Atlantic. So equities put in a decent performance, with the S&P 500 (+0.51%) moving back within 1% of its record high from last Thursday.

Perhaps the most interesting data today will be the prices paid components in the US ISM services release. As you'll see on page 41 in our pack it has a very good record of leading CPI. Last month it climbed to 69.9 which if you took at face value from the graph predicts over 5% US CPI in the coming months. Now clearly that's highly unlikely, as the prices paid is more prone to spikes than CPI, but it shows where the momentum and risks are for now. So markets do need to see this mean revert lower soon.

Back to yesterday, and it had been quite a different story at the start of the day, as right after the European open, the US 30yr yield moved within a whisker of 5% again, reaching an intraday peak of 4.9997%, a full 10bps above its closing level. But those moves then unwound, as several data releases started to come in more softly than expected. That began in Europe, where the final services and composite PMIs for August mostly saw downward revisions. For instance, the German services PMI was revised down to 49.3 (vs. flash 50.1), putting it back in contractionary territory, whilst the Euro Area services PMI came down as well to 50.5 (vs. flash at 50.7).

Those moves then got further momentum during the US session, where weak data and somewhat dovish Fed commentary pushed the rally on. Most dovish was Governor Waller, who voted for a rate cut at the most recent meeting. He reiterated his expectation that the Fed should cut at the next meeting and favoured multiple cuts over the next few months. In addition to the JOLTS release, his labour market concerns got some support from the Fed’s latest Beige Book which saw seven of the twelve Fed districts report that “firms were hesitant to hire workers because of weaker demand or uncertainty”. Separately, St Louis Fed President Musalem said he expected the labour market “to gradually cool and remain near full employment with risks tilted to the downside”. And Atlanta Fed President Bostic said that he still only favoured one cut this year, but suggested that September could be in play if economic data weakened from here.

Speaking of the Fed, we might get a better sense of the outlook today, as the Senate Banking Committee are holding the nomination hearing for Stephen Miran, who Trump has nominated to replace Adriana Kugler on the Fed’s Board of Governors. The administration are trying to get him confirmed in time for the next FOMC meeting on September 16-17. But from a market point of view, it’ll be interesting to hear senators’ questioning of Miran’s views on Fed independence as Trump seeks to reshape the makeup of the Fed’s Board and influence it to cut rates. In prepared opening remarks released yesterday ahead of the hearing, Miran says that “Independence of monetary policy is a critical element” of the Fed’s success and that “I intend to preserve that independence”. As it stands, the Republicans hold a majority in the Senate, so Miran doesn’t need any Democratic votes to be confirmed, and he was confirmed to his current position as CEA Chair by a 53-46 vote with all Republicans in support.

The topic of Governor Cook’s attempted dismissal also stayed in the headlines, with Republican Senator Thom Tillis, who’s a potential swing vote in the Senate Banking Committee on any Fed nominee, saying that he would not consider any nominee to replace Cook until the courts determined the legality of Trump’s move to fire her.

Otherwise, the bond rally got its main push from that JOLTS report yesterday, which showed the US labour market was a bit softer than expected. Notably, the number of job openings fell to a 10-month low of 7.181m (vs. 7.380m expected). So that confirmed the message from the underwhelming July jobs report, and it added to fears that the labour market was softening more significantly. Indeed, it backed up the message from Fed Chair Powell’s Jackson Hole speech that the “downside risks to employment are rising”. That meant investors moved to price in more Fed rate cuts for the months ahead, with a 25bps September rate cut now 100% priced as I type. And in turn, yields moved lower across the Treasury curve yesterday, with the 2yr down -2.2bps to 3.62%, whilst the 10yr was down -4.4bps to 4.22%, a level it's settling at in overnight trading.

Over in Europe, sovereign bonds followed a pretty similar pattern, with yields moving lower across the continent. To some extent, the moves fed upon themselves, as markets moved from a vicious circle to a virtuous one where lower yields helped to ease fears about debt sustainability and helped yields fall further. So by the close, yields on 10yr bunds (-4.6bps), OATs (-4.2bps), BTPs (-6.2bps) and gilts (-5.2bps) had all moved lower. But even with that rally, there’s still a fair amount of nervousness before Monday’s confidence vote in the French National Assembly, with the Franco-German 10yr spread closing back above 80bps again.

For equities, lower bond yields provided a decent tailwind as concerns eased about the fiscal position. So that led to a rally on both sides of the Atlantic, with the S&P 500 up +0.51%, whilst Europe’s STOXX 600 rose +0.66%. In the US, tech stocks provided a big lift that meant the Magnificent 7 surged +2.20%, aided by a very strong performance for Alphabet (+9.14%) that made it the strongest performer in the entire S&P 500. That followed the news after the previous day’s US close, that we discussed yesterday, that Google had avoided a breakup and won’t have to sell its Chrome browser.

In the commodity space, gold rose +0.74% to a new record high of $3,559/oz but has given up these gains this morning in Asia. Meanwhile, oil prices fell after Reuters reported that OPEC+ will consider further raising oil production at a meeting this Sunday, with WTI crude seeing its biggest decline in over a month (-2.47% to $63.97/bbl). Oil is extending these declines in Asia, down another -0.7%.

In Asia there is a major divide between Chinese stocks and the rest. Chinese markets are underperforming, with the CSI down by -2.47%, the Shanghai Composite declining by -1.97%, and the Hang Seng falling by -1.21%. This decline follows a report from Bloomberg indicating that China's financial regulators are contemplating measures to limit stock market speculation due to concerns regarding the rapid pace of a $1.2 trillion rally that began in early August.

Outside of China, sentiment is much more upbeat, likely helped by the global bond rally over the past 12-24 hours. The Nikkei is up +1.52%, leading the gains, while the Topix has also increased by +0.93%. Elsewhere, the S&P/ASX 200 has climbed by +0.95%, recovering from significant losses in the previous session, after robust GDP data tempered some expectations for further interest rate reductions by the RBA. Meanwhile, the KOSPI has edged up +0.13%, marking its third consecutive session of gains following positive GDP figures released earlier in the week. S&P 500 (+0.14%) and NASDAQ 100 (+0.18%) futures are also edging up. 10 and 30yr JGB yields are -1.5bps and -3.3bps lower respectively after a 30 year auction that saw demand broadly in line with its two year average.

Early morning data revealed that Australia’s trade surplus surged to A$7.31 billion in July, (vs. A$4.90 billion expected), the highest level since February 2024. It follows an increase from the revised surplus of A$5.37 billion recorded in June.

Looking at the day ahead, data releases in Europe include Euro Area retail sales for July, whilst in the US we’ll get the ADP’s report of private payrolls for August, the weekly initial jobless claims and the ISM services for August. From central banks, we’ll hear from the Fed’s Williams and Goolsbee, and the ECB’s Cipollone. Finally, the Senate Banking Committee will hold the nomination hearing for Stephen Miran to join the Fed’s Board of Governors.

Tyler Durden Thu, 09/04/2025 - 08:21

The Return Of "Transportation" Sentencing? Australia Seeks To Ship Illegal Aliens To Small Pacific Island

The Return Of "Transportation" Sentencing? Australia Seeks To Ship Illegal Aliens To Small Pacific Island

Authored by Jonathan Turley,

It has been 157 years since the last ship taking convicts from the United Kingdom landed in Australia. 

Now, in a crushing historical irony, Australia is contracting with the small Pacific island of Nauru to resettle foreign-born criminals who the courts have ruled cannot be imprisoned indefinitely. The court rulings show how our allies are facing the same dilemma in dealing with people who enter the country illegally and then oppose efforts to deport them for years in litigation.

Starting with the “First Fleet” in 1788, English courts regularly sentenced convicts to “transportation” to Australia, where they were used for labor in the then-British colony.

For years, the British left prisoners in rotting warships called “hulks” in the Thames River.

Under Prime Minister William Pitt the Younger, the government solved the problem with the use of Australia. Convicts dreaded the common sentencing line issued by British judges:

“The sentence of the court upon you is, that you be transported beyond the seas for the term of your natural life.” It became so common that Historian K. S. Inglis noted that “The founders were not a chosen people except in the old Australian joke that they were chosen by the best judges in England.”

The current move is not to use immigrants for labor, but to remove individuals without a technical deportation.

The move follows the 2023 decision by Australia’s High Court that non-citizens who have no viable resettlement options outside of Australia must be released.

These deportees are largely individuals who engaged in criminal conduct.

However, the court ruled that some countries, such as Afghanistan, are considered unsafe for their nationals to be repatriated, while others, like Iran, simply refuse to accept them back if they are being transported involuntarily.

One such individual was identified as NZYQ in court papers and came from Myanmar through a smuggler and proceeded to rape a child soon after being released into the Australian community.

After serving a prison sentence, he was held by authorities until he was ordered to be released again into the population.

The government is reportedly moving to introduce legislation to strip the right of fairness from deportation decisions under the new Nauru deal. It would negate canceled visas that are under appeal in court.

Like Australia, the United States needs to address an immigration process that allows individuals to game the system for years despite orders of removal.

The system is simply not working and, with millions allowed into the country under the Biden Administration, Congress needs to streamline the system for expedited removals.

Tyler Durden Thu, 09/04/2025 - 08:05

American Eagle Shares Erupt As Sydney Sweeney's "Great Jeans" Fuels Sales 

American Eagle Shares Erupt As Sydney Sweeney's "Great Jeans" Fuels Sales 

American Eagle shares surged in premarket trading in New York after the clothing retailer reported second-quarter revenue that exceeded Wall Street consensus estimates, as tracked by Bloomberg. The stronger-than-expected results were primarily driven by buzz around the "Sydney Sweeney has great jeans" ad campaign launched in July.

"The fall season is off to a positive start. Fueled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce," AE CEO Jay Schottenstein wrote in a statement to investors. 

AE reported same-store sales down 1% in the second quarter that ended August 2, exceeding the average analyst estimate. Revenue also outpaced expectations. 

Here's a breakdown of second-quarter results:

  • Revenue: $1.28B, down .6% YoY but above Bloomberg consensus of $1.23B.

  • Store Count: 1,185 total stores, up .8% QoQ and slightly above estimates (1,181).

  • AE Brand Stores: 829, down 1.7% YoY but ahead of consensus (820.5).

  • New Openings: 2 AE stores opened in the quarter, a 33% YoY decline.

  • Consolidated Stores: 1,176 at the start of the period, matching estimates. Square Footage: 7.27M sq. ft., up 0.5% QoQ, topping consensus (7.25M).

Total Revs 2Q

The third quarter forecast also topped consensus estimates:

  • Operating income: $95M–$100M vs. $92.1M est.

Shares of American Eagle rose more than 24% in premarket. 

Here's what Wall Street analysts are saying (courtesy of Bloomberg):  

Bloomberg Intelligence

  • Analyst Mary Ross Gilbert says American Eagle is poised to exceed low-single-digit comparable-sales growth in 3Q, with performance likely aided by its viral Sydney Sweeney campaign and Travis Kelce collaboration

  • "Operating income guidance, which is above consensus, also has upside amid more full-price selling"

Morgan Stanley (equal-weight, PT $10)

  • Analyst Alex Straton says the company "seems to have mostly corrected 1Q25 product mis-execution quickly"

  • "Higher campaign-related SG&A (selling, general, and administrative ) spend has not come with as much potential profitability degradation as we cautioned"

Jefferies (hold, PT $11)

  • Analyst Corey Tarlowe says AEO provided 3Q and FY guidance that exceeds the Street's expectations for comp sales and operating income

  • "Overall, we are encouraged by the results and 2H guidance" 

Vital Knowledge

  • AEO reported big upside on EPS, with the beat driven by higher GMs, cost controls, and better sales (comps were -1% vs. the Street -2.6%, w/particularly robust performance at Aerie, which posted comps +3% vs. the Street -1.8% while the AE brand fell a bit short with comps -3%)," writes analyst Adam Crisafulli

  • Says that while the FQ2 results are very strong, the shortfall in AE comps and the inline F25 guide could temper investor enthusiasm

 

Corporate America, take note:

. . . 

Tyler Durden Thu, 09/04/2025 - 07:45

Europe Faces $1 Trillion Rearmament Bill As Washington Weighs Troop Cuts

Europe Faces $1 Trillion Rearmament Bill As Washington Weighs Troop Cuts

Authored by RFE/RL Staff via OilPrice.com,

  • The IISS warns Europe faces gaps in air defense, long-range missiles, and intelligence that could cost up to $1 trillion to address.

  • A U.S. defense review may cut American troop presence in Europe by up to 30%, shifting focus to Asia-Pacific.

  • European leaders are pledging billions in new defense spending but struggle with slow procurement, recruitment shortages, and strained budgets.

European nations could face a trillion-dollar rearmament bill in the face of a looming Russian threat and an imminent US defense review that could see Washington dramatically draw down forces on the continent, according to a report released on September 3.

The 106-page report, by the London-based International Institute for Strategic Studies (IISS), points to gaps across the board: in production, intelligence, and military hardware such as long-range missiles or air and missile defense.

“Chief among the reasons for this greater urgency are Russia’s military threat and uncertainty over the United States’ commitment to defending European allies,” it says.

“While strategic assessments vary across European nations about how quickly Russian forces could constitute a direct threat to NATO Europe, their time frames generally range between two and five years.”

Meanwhile, the Pentagon’s Global Force Posture Review is expected to be published this month and lay out a shift in military resources from Europe to Asia/Pacific.

“Some NATO officials believe a US troops reduction of up to 30 percent could be possible,” says the report, entitled Progress and Shortfalls in Europe’s Defense: An Assessment.

Rising Military Budgets

European leaders have made plans this year to respond to these challenges. In March, a European Union summit pledged to spend billions on defense amid what EU Commission President Ursula von der Leyen called “a watershed moment for Europe.”

EU-backed loans of up to 150 billion euros (160 billion dollars) have been made available to member states to beef up their forces, and Eurozone debt rules have been relaxed when applied to military spending.

US President Donald Trump has repeatedly criticized European NATO allies for not spending enough on defense and relying too heavily on US military power. But he has recently praised them for pledging to spend more, particularly after the NATO summit in June when members agreed to raise defense budgets to 5 percent of GDP.

But the IISS report notes that it’s not just a question of money. A key problem will be building capacity.

“Europe’s defense industries continue to face challenges in increasing production fast enough, while many European armies cannot meet their recruitment and retention targets,” it says.

The IISS report underlines Integrated air and missile defense (IAMD) as an area where Europe is particularly vulnerable. Current and serving US military commanders have also told RFE/RL that Europe's aerial shield is not prepared to meet the scale of the threat from Russia.

"You see what has happened in big cities in Ukraine. This also would happen in some of the big cities of Europe," Philip Breedlove, former NATO supreme commander in Europe, told RFE/RL in April.

Long-Range Missiles

Another weakness highlighted in the IISS report is in long-range missiles.

European countries do have highly effective air-launched cruise missiles, such as the Anglo-French Storm Shadow/Scalp missiles, or Germany’s Taurus system. Non-NATO member Ukraine has recently showcased its new Flamingo cruise missiles.

But “only a handful of European allies currently possess ground-based long-range precision-fire systems, while in the maritime domain, only France and the UK hold 1,000-kilometer-range naval land-attack cruise missiles,” says the report.

“The European Long-Range Strike Approach (ELSA) project is potentially the most significant European effort to extend its conventional land-attack capability up to and perhaps beyond 2,000 km,” it adds.

The project, launched by France, Germany, Poland, and Italy, was later joined by Britain, Sweden, and the Netherlands.

Other weaknesses noted include a lack of surveillance and intelligence aircraft, “sovereign hyperscale cloud-computing capacity,” and slow, uncoordinated procurement.

The spending requirements come as European governments are already facing intense pressures on non-military spending in sensitive areas such as health, education, and social benefits.

Meeting these challenges will, the report concludes, “require many NATO European allies to take major financial risks and make very difficult political decisions.”

Tyler Durden Thu, 09/04/2025 - 07:20

BYD Slashes Annual Sales Target As Demand Slumps, Competition Intensifies

BYD Slashes Annual Sales Target As Demand Slumps, Competition Intensifies

China's hyper-competitive electric vehicle market means that even top players, such as BYD Auto, are no longer immune, as smaller players continue to gobble up increasing market share. This comes as growth in the world's largest EV market slowed over the summer, with mounting headwinds expected this fall. 

BYD, the world's largest EV maker, slashed its full-year sales target to 4.6 million units, down a whopping 16% from its previous estimate of 5.5 million, according to a Reuters report. The downshift in forecast was attributed to intensifying competition in China's EV market from rivals such as Geely, Xpeng, and Xiaomi. BYD also reported a 30% plunge in quarterly profit and flat deliveries in July to August. 

Despite the cut, one Wall Street analyst noted that the new target is more realistic and aligns with buy-side expectations... 

Sanford C Bernstein analyst Eunice Lee told clients that a "lower target is largely in line with buy-side expectations now and should be achievable," adding, "This could also be a near-term clearing event for the stock." 

Shares fell 3% in Hong Kong trading, signaling the gloom was likely priced in. Year-to-date, shares are up about 10.5%, trading 23% below record highs reached earlier this year. 

The New York Times' Keith Bradsher, who has covered China's auto industry for over two decades, noted, "Already, fierce competition among automakers has gotten ruthless, with about 50 automakers fighting for customers by slashing prices again and again." 

Bradsher said excessive competition caught the attention of Beijing in recent months, with top officials unveiling a campaign against "involution, which they define as excessive competition." 

On July 30, President Xi Jinping declared at a Politburo meeting on the economy, "It is a must to reinforce industry self-discipline to prevent vicious 'involution' competition."

The latest figures from the China Passenger Car Association showed that China-made EV sales fell 4% in August from the same period a year ago, following an 8.4% drop in July.

For Tesla, China is its second-largest market, after the US. It launched a refreshed version of its best-selling Model Y earlier this year; however, sales so far this year have been underwhelming, with lower deliveries in the first seven months compared to the same period last year. 

Both BYD and Tesla have underperformed this year. 

. . . 

Tyler Durden Thu, 09/04/2025 - 06:55

ECB Prepares For Europe's Next Sovereign Debt Crisis

ECB Prepares For Europe's Next Sovereign Debt Crisis

Submitted by Thomas Kolbe

Thirteen years ago, Mario Draghi, then President of the European Central Bank, opened the liquidity floodgates to prevent the eurozone from collapsing. Since then, the structural problems have remained unresolved. We are now facing the next chapter of the roughly patched-over debt crisis. It is time for the ECB to prepare its emergency toolkit.

For some time now, a worrying pattern has emerged in global financial markets: long-term government bonds are coming under selling pressure — even those of leading economies such as the U.S., Japan, the U.K., and, to a notable extent, France. As a result, yields are rising, along with the refinancing costs for already heavily indebted nations.

Financial Architecture Severely Damaged

It is the so-called long end of the yield curve that alarms both policymakers and central banks. The stability of global financial architecture rests on the long-term bonds of the U.S., Japan, and the eurozone. Banks, sovereign pension funds, and insurance systems have already paid a heavy toll from the sell-off in this segment. The structure has been severely weakened — and Europe is now facing the next debt crisis.

It can no longer be ignored: long-term government bonds, once considered safe and yielding positive real returns, have lost considerable trust. A look at France’s political turmoil and the decline of the U.K. underscores that escaping the debt spiral — with ever-growing annual deficits and collapsing social systems in an aging, migration-stressed European society — seems highly unrealistic.

The consequence: anyone not legally obligated to hold these securities is offloading them, fleeing to so-called safe havens such as precious metals or cash, often in U.S. dollars or Swiss francs — a tried-and-true pattern when times get tough.

Europe in the Crosshairs

While the yield on ten-year UK government bonds rose above 5.7% on Tuesday afternoon — the highest since 2009 — the crisis in France is intensifying dramatically. On September 8, a confidence vote on Prime Minister François Bayrou’s austerity budget is expected to fail. The country faces political chaos and a planned general strike, which, following the sad tradition of this fragmented, migration-impacted society, is likely to erupt into violent street clashes in the Banlieues.

France has long become an ungovernable state, now at risk of being the starting point for the next eurozone debt crisis.

Dark clouds are gathering over Europe — and Germany will not be spared. Once praised for its conservative fiscal policy, the country has opened the door to severe market disruptions with a trillion-euro debt program. If Germany sacrifices its creditworthiness just to buy time and a temporary fix for its social system crisis, it will drag down its EU partners. Since the start of the monetary union, markets have intertwined the community’s creditworthiness with that of Germany.

None of Europe’s crises — neither overregulation, the energy crisis, nor migration chaos — has ever been effectively controlled. The continent now stands exposed to the next debt crisis.

ECB in Action

The next debt crisis is likely to follow the pattern of its predecessor 15 years ago: contagion spreading from country to country, each tested by waves of bond sell-offs on stability and resilience. What may originate in France will eventually reach Germany via the heavily indebted southern European states. The question is: can the ECB stabilize the situation, as it did with its emergency toolkit back then?

Every sovereign debt crisis is also a banking crisis. A significant portion of government bonds is held on commercial banks’ balance sheets — and a sharp drop in market value risks dangerous over-indebtedness across the financial sector. To mitigate this, the ECB has developed an arsenal of liquidity and stabilization measures, forming the core of its emergency toolkit. These include LTROs (Long-Term Refinancing Operations) and TLTROs (Targeted Longer-Term Refinancing Operations), which provide banks with long-term, low-interest loans to ensure liquidity and maintain credit flow to businesses and households.

Highly Leveraged Fiat Credit

There is also Emergency Liquidity Assistance (ELA), a kind of safety valve for institutions under acute pressure, usually collateralized by government bonds or other so-called “high-quality assets.” The toolkit is complemented by forward guidance and interest rate policy, aimed at steering expectations and stabilizing interest rate markets — often more psychologically than materially.

Here lies a central flaw and logical inconsistency in central banking: the very assets deemed “high-quality” contributed to the crisis. Highly leveraged, virtually unsecured fiat credit — without backing in gold or energy — has turned the financial system into a Ponzi-like structure, inevitably driving massive credit expansion.

This context also includes Germany’s massive debt program and, according to EU policymakers, the ongoing proxy war in Ukraine. If the credit tap falters, the house of cards collapses.

Focus on Interest Rate Manipulation

The ECB’s main focus remains the stabilization of government bond markets — the sector most vulnerable in a crisis. Deeply entwined with the EU power center in Brussels, the central bank acts almost as a liquidity department. When panic strikes the bond market, it will start manipulating yields and clearing the market, as it did 15 years ago.

Emergency programs include the Public Sector Purchase Programme (PSPP), which buys government bonds to increase liquidity, and Outright Monetary Transactions (OMT), activated only if affected countries commit to reforms. Newly introduced is the Transmission Protection Instrument (TPI), which allows the ECB to buy bonds to reduce excessive yield differences between member states and ensure monetary transmission. This instrument operates largely clandestinely: market interventions are not always immediately visible and may be carried out gradually, even via proxy actors, to avoid market panic.

The ECB’s policy can be summarized simply: ahead of the looming debt collapse, its task is to manipulate the entire yield curve downward to maintain the illusion of controlled public debt — and to prevent private investors from panicking. The persistent operation of the ECB is evident in the yield corridors that long-term government bonds have followed for some time.

Transparency? Virtually nonexistent. Backroom dealings between the ECB and major capital pools are routine. Markets are actively managed and manipulated — the free market and the disciplining force of rising interest rates (bond vigilantes) are long gone.

Emergency Patches and Soothing Pills

Ultimately, the names of ECB instruments are irrelevant. Their core function is to smooth short-term market fluctuations and provide policymakers with repeated room to maneuver for an ever-expanding state. The ECB itself has become a malignant force within the euro system: market-based reforms are impossible as long as policymakers can rely on its backstop — whether for green climate agendas, military build-ups, or other dubious projects.

The EU Commission and ECB aim to establish a unified debt mechanism, consolidate national debts under the commission’s umbrella, and integrate the ECB as a liquidity pool to stabilize markets. Europe is thus steering toward centralized socialism, with the ECB as a key enabler.

In a systemic crisis, the eurozone’s main pillars — France, Italy, and Germany — would be drawn into the downward spiral. It would be naive to believe that the situation could be stabilized solely through ECB credit injections and short-term liquidity measures.

* * * 

About the author: Thomas Kolbe, a German graduate economist, has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Thu, 09/04/2025 - 06:30

White House Would Greenlight West Bank Annexation By Israel, Officials Claim

White House Would Greenlight West Bank Annexation By Israel, Officials Claim

Axios' global affairs correspondent Barak Ravid has cited Israeli officials who say that the White House is ready to greenlight a Netanyahu-ordered seizure of West Bank Palestinian territory.

"Rubio has signaled to Israeli officials in private meetings that he does not oppose Israel's West Bank annexations and that the Trump administration will not stand in the way," writes Ravid.

Finance Minister Bezalel Smotrich calls to annex over 80% of the West Bank. Source: Flash90/TOI

If accurate, or if this scenario comes to fruition it would be a definitive death knell for any future state of Palestine or for a two-state solution, the latter which happens to still be Washington de facto policy, and stretching back historically across several administrations. 

Despite occasional protestations from Trump over the ratcheting hunger crisis, or high civilian death toll, the US administration has really done nothing of significant pressure or with teeth to thwart the overwhelmingly destructive Gaza offensive by Israel's military. 

The White House has also said nothing, even in terms of caution, concerning to new Netanyahu-ordered offensive which will see ground forces try to take over Gaza City.

President Trump only put the following message out Wednesday on Truth Social: “Tell Hamas to IMMEDIATELY give back all 20 Hostages (Not 2 or 5 or 7!), and things will change rapidly. IT WILL END!”

Essentially he's standing by Netanyahu, who has stated time and again that the war will carry on until it ends with the complete eradication of Hamas, and to ensure it can never return to rule the Strip again.

If there is Israeli annexation of the West Bank, which has long been recognized by the UN and even the US as 'occupied' Palestinian territories, the unraveling of the Abraham Accords would surely follow. The Palestinian Authority (PA) is in charge of the Gaza Strip, and is actually a political rival to Hamas.

The UAE, for example, has already declared that this would be a 'red line' concerning its recently restored relations (in 2020) with Israel.

But here's how Axios frames the situation: "Israel is considering annexing large portions of the West Bank later this month in response to the recognition of a Palestinian state by several western countries. President Trump is likely the only foreign player who could stop it."

Indeed this is the case, but he's as yet unwilling to use the key leverage over Israel that the US possesses, and has had for a long, long time: money and weapons. Israel's military is propped up by US military hardware and ordinance, and this relationship is not going away anytime soon - especially not under Trump's watch - who long enjoyed massive contributions from the likes of the Adelson family and AIPAC.

Tyler Durden Thu, 09/04/2025 - 05:45

White House Would Greenlight West Bank Annexation By Israel, Officials Claim

White House Would Greenlight West Bank Annexation By Israel, Officials Claim

Axios' global affairs correspondent Barak Ravid has cited Israeli officials who say that the White House is ready to greenlight a Netanyahu-ordered seizure of West Bank Palestinian territory.

"Rubio has signaled to Israeli officials in private meetings that he does not oppose Israel's West Bank annexations and that the Trump administration will not stand in the way," writes Ravid.

Finance Minister Bezalel Smotrich calls to annex over 80% of the West Bank. Source: Flash90/TOI

If accurate, or if this scenario comes to fruition it would be a definitive death knell for any future state of Palestine or for a two-state solution, the latter which happens to still be Washington de facto policy, and stretching back historically across several administrations. 

Despite occasional protestations from Trump over the ratcheting hunger crisis, or high civilian death toll, the US administration has really done nothing of significant pressure or with teeth to thwart the overwhelmingly destructive Gaza offensive by Israel's military. 

The White House has also said nothing, even in terms of caution, concerning to new Netanyahu-ordered offensive which will see ground forces try to take over Gaza City.

President Trump only put the following message out Wednesday on Truth Social: “Tell Hamas to IMMEDIATELY give back all 20 Hostages (Not 2 or 5 or 7!), and things will change rapidly. IT WILL END!”

Essentially he's standing by Netanyahu, who has stated time and again that the war will carry on until it ends with the complete eradication of Hamas, and to ensure it can never return to rule the Strip again.

If there is Israeli annexation of the West Bank, which has long been recognized by the UN and even the US as 'occupied' Palestinian territories, the unraveling of the Abraham Accords would surely follow. The Palestinian Authority (PA) is in charge of the Gaza Strip, and is actually a political rival to Hamas.

The UAE, for example, has already declared that this would be a 'red line' concerning its recently restored relations (in 2020) with Israel.

But here's how Axios frames the situation: "Israel is considering annexing large portions of the West Bank later this month in response to the recognition of a Palestinian state by several western countries. President Trump is likely the only foreign player who could stop it."

Indeed this is the case, but he's as yet unwilling to use the key leverage over Israel that the US possesses, and has had for a long, long time: money and weapons. Israel's military is propped up by US military hardware and ordinance, and this relationship is not going away anytime soon - especially not under Trump's watch - who long enjoyed massive contributions from the likes of the Adelson family and AIPAC.

Tyler Durden Thu, 09/04/2025 - 05:45

The SCO & BRICS Play Complementary Roles In Gradually Transforming Global Governance

The SCO & BRICS Play Complementary Roles In Gradually Transforming Global Governance

Authored by Andrew Korybko via Substack,

The processes that are unfolding will take a lot of time to complete, perhaps even a generation or longer, so expectations of a swift transition to full-blown multipolarity should be tempered.

The recent SCO Leaders’ Summit in Tianjin drew renewed attention to this organization, which began as a means for settling border disputes between China and some former Soviet Republics but then evolved into a hybrid security-economic group. Around two dozen leaders attended the latest event, including Indian Prime Minister Narendra Modi, who paid his first visit to China in seven years. Non-Western media heralded the summit as an inflection point in the global systemic transition to multipolarity.

While the SCO is more invigorated than ever given the nascent Sino-Indo rapprochement that the US was inadvertently responsible for, and BRICS is nowadays a household name across the world, both organizations will only gradually transform global governance instead of abruptly like some expect. For starters, they’re comprised of very diverse members who can only realistically agree on broad points of cooperation, which are in any case strictly voluntary since nothing that they declare is legally binding.

What brings SCO and BRICS countries together, and there’s a growing overlap between them (both in terms of members and partners), is their shared goal of breaking the West’s de facto monopoly over global governance so that everything becomes fairer for the World Majority. To that end, they seek to accelerate financial multipolarity processes via BRICS so as to acquire the tangible influence required for implementing reforms, but this also requires averting future domestic instability scenarios via the SCO.

Nevertheless, the BRICS Bank complies with the West’s anti-Russian sanctions due to most members’ complex economic interdependence with it, and there’s also reluctance to hasten de-dollarization for precisely that reason. As for the SCO, its intelligence-sharing mechanisms only concern unconventional threats (i.e. terrorism, separatism, and extremism) and are hamstrung to a large degree by the Indo-Pak rivalry, while sovereignty-related concerns prevent the group from becoming another “Warsaw Pact”.

Despite these limitations, the World Majority is still working more closely together than ever in pursuit of their goal of gradually transforming global governance, which has become especially urgent due to Trump 2.0’s casual use of force (against Iran and as threatened against Venezuela) and tariff wars. China is at the center of these efforts, but that doesn’t mean that it’ll dominate them, otherwise proudly sovereign India and Russia wouldn’t have gone along with this if they expected that to be the case.

The processes that are unfolding will take a lot of time to complete, perhaps even a generation or longer, due in no small part to leading countries like China’s and India’s complex economic interdependence with the West that can’t abruptly be ended without dealing immense damage to their own interests.

Observers should therefore temper any wishful thinking hopes of a swift transition to full-blown multipolarity in order to avoid being deeply disappointed and possibly becoming despondent as a result.

Looking forward, the future of global governance will be shaped by the struggle between the West and the World Majority, which respectively want to retain their de facto monopoly and gradually reform this system so that it returns to its UN-centric roots (albeit with some changes). Neither maximalist scenario might ultimately enter into force, however, so alternative institutions centered on specific regions like the SCO vis-à-vis Eurasia and the AU vis-à-vis Africa might gradually replace the UN in some regards.

Tyler Durden Thu, 09/04/2025 - 05:00

The SCO & BRICS Play Complementary Roles In Gradually Transforming Global Governance

The SCO & BRICS Play Complementary Roles In Gradually Transforming Global Governance

Authored by Andrew Korybko via Substack,

The processes that are unfolding will take a lot of time to complete, perhaps even a generation or longer, so expectations of a swift transition to full-blown multipolarity should be tempered.

The recent SCO Leaders’ Summit in Tianjin drew renewed attention to this organization, which began as a means for settling border disputes between China and some former Soviet Republics but then evolved into a hybrid security-economic group. Around two dozen leaders attended the latest event, including Indian Prime Minister Narendra Modi, who paid his first visit to China in seven years. Non-Western media heralded the summit as an inflection point in the global systemic transition to multipolarity.

While the SCO is more invigorated than ever given the nascent Sino-Indo rapprochement that the US was inadvertently responsible for, and BRICS is nowadays a household name across the world, both organizations will only gradually transform global governance instead of abruptly like some expect. For starters, they’re comprised of very diverse members who can only realistically agree on broad points of cooperation, which are in any case strictly voluntary since nothing that they declare is legally binding.

What brings SCO and BRICS countries together, and there’s a growing overlap between them (both in terms of members and partners), is their shared goal of breaking the West’s de facto monopoly over global governance so that everything becomes fairer for the World Majority. To that end, they seek to accelerate financial multipolarity processes via BRICS so as to acquire the tangible influence required for implementing reforms, but this also requires averting future domestic instability scenarios via the SCO.

Nevertheless, the BRICS Bank complies with the West’s anti-Russian sanctions due to most members’ complex economic interdependence with it, and there’s also reluctance to hasten de-dollarization for precisely that reason. As for the SCO, its intelligence-sharing mechanisms only concern unconventional threats (i.e. terrorism, separatism, and extremism) and are hamstrung to a large degree by the Indo-Pak rivalry, while sovereignty-related concerns prevent the group from becoming another “Warsaw Pact”.

Despite these limitations, the World Majority is still working more closely together than ever in pursuit of their goal of gradually transforming global governance, which has become especially urgent due to Trump 2.0’s casual use of force (against Iran and as threatened against Venezuela) and tariff wars. China is at the center of these efforts, but that doesn’t mean that it’ll dominate them, otherwise proudly sovereign India and Russia wouldn’t have gone along with this if they expected that to be the case.

The processes that are unfolding will take a lot of time to complete, perhaps even a generation or longer, due in no small part to leading countries like China’s and India’s complex economic interdependence with the West that can’t abruptly be ended without dealing immense damage to their own interests.

Observers should therefore temper any wishful thinking hopes of a swift transition to full-blown multipolarity in order to avoid being deeply disappointed and possibly becoming despondent as a result.

Looking forward, the future of global governance will be shaped by the struggle between the West and the World Majority, which respectively want to retain their de facto monopoly and gradually reform this system so that it returns to its UN-centric roots (albeit with some changes). Neither maximalist scenario might ultimately enter into force, however, so alternative institutions centered on specific regions like the SCO vis-à-vis Eurasia and the AU vis-à-vis Africa might gradually replace the UN in some regards.

Tyler Durden Thu, 09/04/2025 - 05:00

New Greek Law Promises Prison For Rejected Asylum-Seekers

New Greek Law Promises Prison For Rejected Asylum-Seekers

In the latest example of a European government taking stronger measures to curb illegal immigration, the Greek Parliament on Wednesday passed a law that promises lengthy prison sentences for migrants who stay in the country after their asylum requests have been rejected. 

In 2022, this fishing boat that traveled from Libya -- crammed with 483 people -- went adrift off Crete before being rescued (via AP)

“The Greek state does not accept you. You only have one choice: to go back. You’re not welcome," said Migration Minister Thanos Plevris after the bill passed. The new law is the second major tightening of Greek immigration in the last two months. On July 9, conservative Prime Minister Kyriakos Mitsotakis completely suspended asylum applications for three months, saying he was effectively notifying human smugglers that “the passage to Greece is closed.”

The two moves came after the pace of illegal-immigrant arrivals on Crete reached crisis levels this summer, with the number of illegals landing on the island in the first six months of 2025 tripling over the same period last year. The last straw that prompted Mitsotakis' three-month asylum ban was the arrival of more than 2,600 illegals on Crete just during the first week of July. The move quickly paid off, slashing arrivals to just 500 over the first 27 days of August.

Under the new law, which was championed by Mitsotakis, migrants who fail to leave the country after their asylum request is rejected face up to five years in prison and fines of up to 30,000 euros. The penalty for illegal entry is tripled to 10,000 euros. The deadline for leaving after being rejected was slashed from 25 days to 14, and authorities are now authorized to outfit rejected applicants with ankle monitors so they can be tracked until they leave, the New York Times reports. The law also abolished illegal immigrants' previous privilege of applying for residence after they'd been in Greece for seven years. 

During parliamentary debate on Tuesday, Plevris said asylum-seekers fell into two categories:  

“There are those who are downtrodden, and then there are some who are spoiled, who think that Europe owes them. We need to put emphasis on the voluntary returns, but there will be consequences for those who do not choose to return to their countries.”

A boatload of illegal immigrants from Libya who were intercepted near Crete in July (AP via The Independent

Crete became a preferred dumping ground for migrant-smugglers after other European countries imposed tougher asylum processes or increased their offshore patrols and other security measures. When asylum requests were barred, Plevris told a reporter: 

"All European countries now understand that it is not possible to have open borders, it's not possible to welcome illegal migrants with flowers. There should be a clear message that countries have borders, (that) Europe has exceeded its capabilities and will not accept any more illegal migrants."

In one of the continuing consequences of Barak Obama and Hillary Clinton's utterly catastrophic regime-change operation, most of the diversity landing on the shores of Crete this year has come from Libya. Cursed by geography, Greece has long suffered from the effects of US-led destabilization campaigns, particularly in 2015-16, when hundreds of thousands of people fleeing the Middle East, Afghanistan and Africa flowed through the country.  

Tyler Durden Thu, 09/04/2025 - 04:15

Germany's "Skills Shortage" Scam: Open Borders, Job Losses, And Economic Collapse

Germany's "Skills Shortage" Scam: Open Borders, Job Losses, And Economic Collapse

Submitted by Thomas Kolbe

The ideology of open external borders has become a core element of Brussels policymaking. When Angela Merkel extended her 2015 invitation to millions, it merely confirmed a policy already long embedded. The claim that this had anything to do with combating the “skills shortage” was always a convenient fiction.

Germany’s economy is now in free fall. Years of overregulation, crushing fiscal burdens, and a self-inflicted energy crisis have scarred the labor market deeply. Since 2019, roughly 700,000 jobs have vanished in the private sector.

State Expansion Hides Collapse

During the same period, the government itself added nearly half a million public sector jobs. That means the real destruction in the productive economy totals around 1.2 million jobs. In 2025 alone, another 100,000 cuts are looming—an alarming verdict on Berlin’s socialist-style, centrally planned economic course. It is also the logical result of believing a subsidy-driven “Green Transition” can substitute for a private economy shaped by capital markets, competition, and innovation.

This decline is structural. Since 2018, productivity has been sliding, year after year. The German growth model has broken. In 2024, €64.5 billion in net direct investment left the country, much of it flowing to the United States, where reindustrialization, deregulation, and energy abundance make the business climate more attractive. Germany, once the world’s export engine, is bleeding capital and know-how.

The Labor Market Turns

Investment inside Germany has stalled. According to official data, the number of job openings in July fell by almost 11 percent compared to a year before, to just 628,000. Facing those positions are millions of unemployed, both Germans and migrants. Two causes stand out: state-run education systematically produces graduates misaligned with market demand, and a lavish welfare state discourages individuals from adapting and seeking productive work.

The true scale of unemployment is obscured. Hundreds of thousands are hidden in short-time work schemes, “training” programs, or statistical loopholes designed to minimize the numbers. The workers exist. And yet, media and politics never tire of repeating the warning of an acute shortage of skilled labor.

Virtually no corporate speech or think-tank study avoids the cliché of missing workers. The Cologne-based Institute for the German Economy warns of a shortage of over 530,000 skilled workers, claiming competitiveness is “dramatically endangered.” The state-owned KfW bank calls it “Germany’s biggest economic risk” and predicts “decades of weak growth” without reform. The official “solution” offered is always the same: open the borders wider, in the hope that somewhere in the tidal wave of migration a fraction of suitable candidates might be found.

The Business Reality

But the practical recruitment of skilled personnel has always been a core responsibility of management. No successful company relies on the state to provide qualified applicants. Instead, they create attractive conditions: competitive salaries, promotion prospects, and opportunities for development. They scout for talent worldwide, targeting the actual pools of expertise. They invest in integration and retention, knowing that skilled workers are in global demand.

Proactive firms go to international trade fairs, use specialized recruiters, and place ads in technical media. They recruit at schools and universities to secure their pipeline. None of this relies on state-run job agencies, symbolic “initiatives,” or the influx of unqualified economic migrants.

That German companies remain largely silent about the failures of open-border policy, just as they remain silent about the absurdities of the Green Transition, reveals the corporatist spirit now binding business and politics.

Two Camps Defend Open Borders

The narrative of “demographics” and “skills shortage” is sustained by two camps. The first are the naïve idealists, clinging to the belief that Germany’s collapsing demographics can be offset by inflows from impoverished regions. They remain blind to the cultural consequences of mass Islamization, ignore the reality of social fragmentation, and cite the United States as a model—ignoring that U.S. immigration in the 19th century was overwhelmingly European, culturally compatible, and forced into assimilation by the absence of a welfare state.

For them, Frontex—the EU’s border guard—is little more than a fig leaf for the abandoned external borders of the Union.

The second camp follows a more calculated political strategy. As in the U.S., mass immigration from impoverished, unstable regions translates into higher vote shares for the Left. They, too, invoke “demographic collapse” and “skills shortages” as justification. With media support, they have succeeded in stigmatizing any criticism of open-border policy as fascist or reactionary.

Outlook and Consequences

While the United States under Donald Trump executed the most radical immigration reversal imaginable—zero tolerance, mass deportations, and enforcement—the European Union drifts toward chaos. The rise of right-wing parties such as AfD in Germany, Fidesz in Hungary, Fratelli d’Italia under Giorgia Meloni, and Marine Le Pen’s Rassemblement National in France signals public resistance. But despite the surge, there is still no credible reversal in EU migration policy.

As long as symbolic gestures—such as a single deportation flight or a brief border check—are enough to calm the press and stabilize polling for the Left (and its so-called “conservative” allies), Brussels bureaucrats keep a tight grip on policy.

Meanwhile, the real solutions are being pursued not by governments but by companies: Mittelstand firms, retailers, industrial champions, and family-owned businesses. They recruit abroad, invest in training, cooperate with schools and universities, and build the pipelines the state has destroyed with its failed education system. Germany’s labor market is being salvaged not by open-border politics, but by the initiative of the very private sector that politicians continue to undermine.

* * * 

About the author: Thomas Kolbe, a German graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Thu, 09/04/2025 - 03:30

IDF Moves Deeper Into Gaza City, Won't Stop Until 'Hamas Totally Defeated'

IDF Moves Deeper Into Gaza City, Won't Stop Until 'Hamas Totally Defeated'

Israel's military (IDF) on Wednesday plunged deeper into Gaza City, after the day prior IDF Chief of Staff Lt. Gen. Eyal Zamir confirmed that the offensive to conquer the Strip's largest city is underway, as tens of thousands of additional Israeli reservists began to report for duty for the operation.

"We are going to increase and enhance the strikes of our operation, and that is why we called you," Zamir announced from Nachshonim military base in central Israel. "We have already begun the ground operation in Gaza [City]."

IDF Chief of Staff Lt. Gen. Eyal Zamir. Source: IDF

"We will not stop the war until we defeat this enemy," he emphasized, in line with Prime Minister Netanyahu's priory of inflicting a total military defeat on the Islamist group behind the Oct.7, 2023 terror attack.

Soldiers and tanks were spotted pushing into Sheikh Radwan, one of the urban center's largest and most crowded neighborhoods, on Wednesday - with so far at least 24 Palestinians, some of them children, reported killed across the Gaza Strip.

For nearly two years there have been sprawling tent encampments on the edges of and within Gaza city, housing thousands of displaced, and these have been destroyed in the fresh military assault.

Addressing reservists at Nachshonim base, Zamir continued his his speech, "Hamas will have no place to hide from us. Wherever we locate them, whether they are senior or junior figures – we strike them all, all the time."

He described, "We have already begun the Gaza maneuver. We are already entering places we have never entered before and operating there with courage, strength, valor, and an extraordinary spirit."

The Gaza City assault is expected to worsen the Strip's already horrific internal refugee crisis and food crisis, after the UN and various monitoring groups have confirmed famine in some sectors. Dozens if not hundreds of civilians have already died of starvation.

Interestingly, amid anti-Netanyahu protests in major cities and even near his personal residence, some Israeli reservists are revolting, intentionally failing to report for duty. Haaretz reported that some 350 Israeli reservists signed a statement opposing the takeover of Gaza City and renewed military assault there.

"The decision to launch a military operation for the complete occupation of Gaza City is blatantly illegal and will put hostages, soldiers and civilians at risk," said Ron Feiner, a reservist and member of the organization Soldiers for the Hostages, as cited in Israeli media. "If we are called up for reserve duty, we will not report."

Tyler Durden Thu, 09/04/2025 - 02:45

Britain's Descent Towards Civil War Is No Accident

Britain's Descent Towards Civil War Is No Accident

Authored by Michael Rainsborough via The Daily Sceptic,

Having lived in Australia for the past three years, I sense that this country is the least advanced down the road towards the multicultural dystopia confronting much of Europe.

That is not to say there is room for complacency: Australia has its own canaries in the coal mine, echoing trends observable across the Western world. Yet relative prosperity, firm immigration policies, a distinct welfare regime (mandatory health insurance, means tested pensions), a robust federal system, and above all a unique electoral framework of three-year cycles and compulsory voting all help, willy-nilly, to keep politicians on a short leash and broadly tethered to the popular will.

The greatest safeguard against social fracture and disintegration in Australia, however, is not institutional design but rather watching Britain implode in real time. Many Australians, still bound by ties of kinship and tradition to the old country, see in the United Kingdom both a cautionary tale and an anti-role model: a once-settled, relatively harmonious state busily teaching the world how to dismantle itself through the enthusiastic embrace of liberal dogma.

As an observer no longer resident in Britain, I am reluctant to pontificate on the fate of my homeland. Yet it is a sight to behold: an establishment seemingly bent on self-destruction, clinging to an incontinent immigration system and an almost devotional attachment to international and human rights laws that disadvantage its own citizens. The Epping hotel protests — complete with the Home Office’s recourse to legal appeals — illustrate the point. No doubt the legal complexities are real, as David McGrogan rightly pointed out in these pages, but such manoeuvres only pour petrol on an already combustible national mood.

One is left to wonder whether Britain’s Labour Party, now so hopelessly enthralled by socially progressive ideology, will ever rediscover the ability to represent anything resembling national sentiment — or whether it will, like the Conservatives, simply perfect the art of political self-evisceration.

On Civil Strife and Academic Exile

It should surprise no one that talk of civil strife and even civil war has been in the air for months. Into this debate I enter only on the edges, sitting in the cheap seats, offering a few side notes alongside far more insightful voices.

My former colleague at King’s College London, David Betz, has recently emerged as the primus inter pares in the debate about the possibility of civil war in Britain. Back in early 2019, we co-authored an essay examining the grim prospects for British democracy and the road to internal conflict that already loomed on the horizon.

That essay, The British Road to Dirty War, explored the hollowing out of British democratic institutions — a long-running process that had by then left politics little more than a façade. The Brexit psychodrama exposed the extent of the rot. The political class, determined to thwart the referendum result, behaved with a deranged mixture of denial and contempt for the electorate. We saw in this not merely a passing convulsion but the symptom of a chronic condition — one destined, sooner or later, to end badly, Brexit or no Brexit.

For me, the article was merely the latest offence in a long career of thought criminality — though until then I had usually managed to get away with it, courtesy of the last tattered vestiges of pluralism in British universities. This time was different. The arraignment came swiftly. Confronted with unwelcome facts, several so-called colleagues — fluent in sanctimony, illiterate in reality — filed their denunciations, East German–style. Readers may recall that I recounted the episode in the Daily Sceptic under the title ‘What I Learned from My College Stasi File‘.

This was, in the end, the proximate cause of my ousting as head of the Department of War Studies and my departure for Australia. Yet distance brings a certain clarity. It exposed, with brutal simplicity, not just the barren and increasingly authoritarian nature of British higher education, but the slow unravelling of a once-settled nation — methodically dismantling the very foundations on which its stability once rested.

Enter the Civil Wars Debate

Viewing Britain from afar is sobering: the decline of a nation under the stewardship of its self-anointed managerial and political elite — a class long sustained by illusions of mastery, even as the evidence mounts to the contrary. Into this breach, David Betz took up the ‘civil wars’ thesis and carried it forward. He did the heavy lifting: assembling the scholarly scaffolding, laying out the nuts and bolts of the argument, and presenting it with a careful authority that is both brave and necessary. His work is rightly receiving the attention it deserves, recognition for both intellectual rigour and the courage to say what the political classes would prefer unsaid.

The prospect of civil conflict is no longer whispered in private but debated openly. This is a healthy development. Britain and Europe are grappling with the results of elite overreach — economic stagnation, political paralysis, social fragmentation — and the question is no longer whether such conditions exist, but what their long-term trajectory will be. Far better, then, that the discussion takes place in public than festers underground, smothered by nervous institutions. Thanks to outlets such as the excellent Military Strategy Magazine and the unruly but indispensable independent podcasters, the necessary debate has been given air and light.

More recently, James Alexander has added his voice in the Daily Sceptic, drawing a distinction between the writings of David Betz and those of David A. Hughes. He discerns a contrast between what he sees as Betz’s view — that the country is stumbling toward civil war through elite incompetence and mismanagement — and Hughes’s contention that the road to conflict is intentional, a deliberate course imposed upon society.

I confess I have not yet encountered Hughes’s work, but Alexander suggests he is among the vanishingly small number of truly dissenting academics. If so, that alone marks him out as worth reading: in the present climate, dissent is the rarest form of intellectual courage.

On Dichotomies and Deliberate Designs

Alexander’s treatment is thoughtful and nuanced, and he is right to insist that both vantage points deserve consideration, particularly Hughes’s radical reframing of political reality. Yet his depiction of the dichotomy is flawed. To suggest that Betz’s survival within academia implies he is not fundamentally challenging its ideology is, frankly, a misreading. Survival in that system is not comfort or acceptance; it is endurance at the margins. David and I both narrowly survived our purging after publishing ‘The British Road to Dirty War’. In my case, ‘survival’ amounted to a kind of neo-transportation — admittedly more gilded than the original, but no less real for that.

Nor is it accurate to claim that Betz merely observes elites ignoring the breakdown of civilisation while Hughes contends they actively intend it. That is too neat, too binary. Having written extensively with David Betz, I can say our position has never been that elites are simply incompetent — though many, of course, demonstrably are. Rather, their actions form a discernible pattern, and patterns imply purpose. Whether or not the chaos we now endure is consciously engineered at every turn is almost beside the point: the consequences are here, and we must all live with them.

The record of intentionality, in fact, is undeniable. Under Tony Blair, the Labour government pursued a policy of demographic transformation. As Andrew Neather — then a speechwriter and adviser to Blair — acknowledged in the Evening Standard in 2009, that immigration policy was shaped in part by the desire “to rub the Right’s nose in diversity“. That was no accident, no bureaucratic mishap. It was an explicit goal, and its consequences are now written across Britain’s social fabric. Likewise, the current Labour leadership under Sir Keir Starmer operates from a post-nationalist outlook, one that treats the very idea of nationhood as negotiable, even alien, to the political class.

David and I set out this argument in 2020 in a short article, ‘Empires of “Progress”‘, where we identified a clear elite strategy of re-importing techniques of imperial governance into the domestic realm. The aim was to rule by division: to fracture society into communities, reward loyal in-groups and discriminate against the majority through a two-tier system of justice, policing and social policy. In other words, to adapt the colonial logic of ‘divide and rule’ for use at home. This was not incompetence. It was contrivance.

Meet the New Imperialists

Who are these new imperialists? They appear under fresh guises — ‘diversity coordinators’, anti-racism activists, curriculum decolonisers, climate campaigners — but their mission is unchanged: to manage society by division. Their worldview is relentlessly categorical: race, religion, identity. Favoured minorities and immigrant groups, often not oppressed in any meaningful sense, are elevated into protected castes, while the majority is relegated to second-class status. This is not progress; it is imperial management in modern dress. Like their predecessors, they are buoyed by moral certainty and a conviction of their right to rule.

Meet the new imperialists: same as the old imperialists.

Western societies have not, therefore, polarised by chance. A movement — most visible on the progressive Left — embraces a radical perspectivism that seeks to manufacture conflict and destabilise once-stable societies. This is no startling discovery. Peter Collier and David Horowitz documented it decades ago: the student radicals of the 1960s sought revolution, not reform. They demanded constitutional rights even as they denounced the constitutional order, exploiting democracy’s tolerance to undermine it. When they tired of being outsiders, they burrowed into the institutions — universities, bureaucracies — and entrenched themselves. It was, as Collier and Horowitz observed, a deeply cynical strategy: use democracy’s freedoms to dissolve democracy itself.

Today, with the maturation of the boomer generation, those same radicals — or their intellectual heirs — occupy positions of power. They are the imperial managers of our age. To call this the product of bumbling incompetence is naïve. It was strategy, not accident.

Where it may yet unravel is in the arrogance of the new imperium. They imagine themselves clever enough — and the public credulous enough — that such policies can be pursued without provoking resistance. But arrogance is no substitute for foresight. Once matters tip into open conflict, escalation takes on its own momentum. Anger is already stirring — and anger, once roused, is the fuse of history.

The Shadow of Dirty War

How this will ultimately unfold is impossible to foresee. In our first exploration of this terrain, David and I sketched the prospect of Britain’s descent into what we termed dirty war.

Dirty war refers to a pattern of internal repression, most notoriously in Latin America during the 1970s: years of vicious but low-intensity strife in which regimes and insurgents alike turned their weapons on segments of their own people. Such struggles are rarely declared openly, nor bound by convention. They are fought in the shadows. The boundary between combatant and civilian dissolves; violence becomes selective, targeted, concealed.

On the surface, life may appear undisturbed — whole regions untouched. Yet beneath the façade a subterranean struggle rages: militias manipulated, opponents assassinated, hostages taken, clandestine detentions and disappearances. Almost inevitably, this is accompanied by crackdowns on free speech and civil liberties — the indispensable handmaidens of dirty war. To deny that the architecture for such measures is already taking shape in Western democracies, Britain included, is wilful blindness.

Over time, brutality becomes ordinary; the ‘unspeakable’ seeps into common knowledge. Secrets circulate, perpetrators protest innocence, but rumour, testimony and leakage of truth expose what everyone already suspects.

Whether Britain is embarked upon such a path is speculation. Betz has outlined scenarios ranging from an urban-rural clash to targeted strikes on critical infrastructure. These are hypotheses, not predictions. Yet precedent is sobering. Argentina’s dirty war was prefigured by deep fissures within Peronism itself, as conservative and radical factions — most notably the Montoneros — splintered, then unleashed assassination and counter-assassination, spawning death squads that soon engulfed the state.

At present, it is difficult to imagine such violence in Britain, cushioned as it is by democratic traditions and institutional inertia. But ‘difficult to imagine’ is not the same as ‘impossible’. Already the taste for direct action is evident in extreme-Left circles, and politically motivated violence has re-emerged across the Atlantic. In North America, radicals steeped in progressive dogma have attempted to assassinate Presidential candidatesmurdered local politicians and carried out school shootings in the name of ideological crusades. To assume Britain is immune to such contagion is to mistake habit for destiny.

On Shifting Ground

If Britain does not slide into a dirty war outright, a more plausible prospect is Balkanisation — or, in the local idiom, Ulsterisation. We need not speculate abstractly: within living memory the United Kingdom has already endured its own version in Northern Ireland.

The signs are visible. The recent flag protests in England reflect a deeper hostility toward the political class, which has systematically negated English self-expression and indulged in a ritual of national self-abnegation that contrasts sharply with the celebration of every other identity. Public spaces are festooned with Pride flags, Palestinian flags, Ukrainian flags — anything, it seems, but the Cross of St George.

The message is unmistakable. The majority population, already disregarded on questions such as immigration, is told that its own symbols of belonging must be hidden, while the emblems of others are to be privileged and extolled. The protests are not simply a reaction to hypocrisy, but the eruption of a resentment long bred by neglect, exclusion and the steady withering of a people’s right to recognise themselves.

And once flags become tribal markers of territory and ideology, they also become precursors of deeper division, escalating tensions, and — if the authorities persist in denying the causes — violence of an infernal kind. Northern Ireland has already shown us where such dynamics lead: bombings, assassinations, even Latin American-style disappearances (this time carried out not by the state but by the IRA and other republican groups).

Let us assume, for the moment, that Britain is still some way off from such an outcome, and that the system retains just enough vitality to adapt, however fitfully, to the popular will. Even so, faith in system stability — the belief that traditions of peaceful, constitutional change can mediate deep divisions — has been badly undermined. That corrosion has been accelerated, intentionally, by the outsourcing of sovereignty to supranational bodies: human rights courts, international bureaucracies, institutions whose rulings dilute and often override domestic consent.

Of course, political commentary is littered with failed prophecies, and one should resist the temptation to indulge in historical clairvoyance. History rarely moves in straight lines; contingency rules. As with earthquakes, we cannot predict the exact timing of the rupture. What we can do — what Betz and others are attempting to do — is map the tectonics.

And Britain’s political ground is not solid rock. It is fault lines all the way down.

Tyler Durden Thu, 09/04/2025 - 02:00

Trump Escalates Tariff Fight To Supreme Court, Seeks Expedited Review

Trump Escalates Tariff Fight To Supreme Court, Seeks Expedited Review

President Trump has asked the Supreme Court to maintain his tariffs after a lower court invalidated them.

"The Federal Circuit’s decision casts doubt upon the President’s most significant economic and foreign-affairs policy—a policy that implicates sensitive, ongoing foreign negotiations and urgent national-security concerns," wrote Solicitor General D. John Sauer in the DOJ's Supreme Court petition, which has yet to be publicly docketed but was obtained by The Hill

Last week the U.S. Court of Appeals for the Federal Circuit struck down most of Trump's tariffs in a 7-4 decision - finding that the president can't use emergency powers to enact levies on various trading partners. 

The admin has asked the SCOTUS to expedite their review - and has asked for an announcement by next Wednesday as to whether the highest court in the land will take up the dispute and schedule oral arguments for the first week in November. 

Several small businesses and Democratic-led states who filed the lawsuit in question say they have no problem with the Supremes taking up the case or the expedited schedule. 

The tariffs will remain in place until the Supreme Court decides

Trump slapped various significant tariffs on countries around the world - largely doing so by invoking the International Emergency Economic Powers Act (IEEPA), a 1977 law that authorizes the president to impose necessary economic sanctions during an emergency to combat an “unusual and extraordinary threat," The Hill notes. 

Citing an emergency over fentanyl, Trump has imposed a series of tariffs on China, Canada and Mexico dating back to February. He later invoked the law for his “Liberation Day” tariffs, citing an emergency over trade deficits to issue levies on goods from dozens of countries. 

Trump’s tariffs face roughly a dozen lawsuits across the country. The battle at the Supreme Court comes in response to two underlying cases filed by a group of small businesses and Democratic state attorneys general. 

"Both federal courts that considered the issue agreed that IEEPA does not give the President unchecked tariff authority," said Liberty Justice Center senior counsel, Jeffrey Schwab, an attorney on the case. "We are confident that our legal arguments against the so‑called ‘Liberation Day’ tariffs will ultimately prevail."

"These unlawful tariffs are inflicting serious harm on small businesses and jeopardizing their survival. We hope for a prompt resolution of this case for our clients."

The Trump administration, meanwhile, has warned the courts not to second-guess his decision as it will undermine his ability to use tariffs as leverage in negotiating trade deals. 

Tariff Vos Selections Cert Petition by Zerohedge Janitor

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

The Transgender Shooter, The Socialist Rifle Association, And The Alarming Rise Of Far-Left Militancy

The Transgender Shooter, The Socialist Rifle Association, And The Alarming Rise Of Far-Left Militancy

Submitted by Jason Curtis Anderson of One City Rising

Last week, Minneapolis was the scene of a nightmare. A transgender shooter stormed into a church, murdered two children, and then turned the gun on himself. Tragedy struck at the intersection of ideology and violence, but while the mainstream press will quietly move on from this story, the details demand closer inspection.

In the aftermath, investigators uncovered the shooter's personal journal. On it, a sticker of a gay pride flag emblazoned with an assault rifle and the words "defend equality." That very same flag is also displayed by the Minneapolis chapter of the Socialist Rifle Association (SRA), a self-proclaimed left-wing gun club that advocates armed struggle. Andy Ngo shared the images here.

pic

Say what you will about America's increasingly bitter culture wars, but we cannot ignore the fact that much of the rhetoric surrounding the modern trans movement isn't just about self-defense, but about "fighting back," like this flyer, advocating for a trans day of vengeance. 

What exactly do you think they mean by that? 

The Socialist Rifle Association has more than 50 chapters nationwide, with several states hosting multiple chapters. We've been told for decades that America's great domestic terror threat comes from far-right militias in camo gear. But there is obviously a militant movement on the other side of the spectrum: a growing network of far-left militias preparing for what they themselves call "the revolution."

The connections between the SRA and the Democratic Socialists of America (DSA)—a group with 201 elected officials in office—are especially troubling. In February 2025, the DSA narrowly voted against a resolution to merge with the SRA. The debate was heated. Following the vote, members of both organizations spilled online to express their frustrations. Some DSA members called it a betrayal. Others celebrated the split, but still acknowledged shared values.

What matters most is that these two groups are not strangers. Their affiliations go back years. As far back as 2018, the Socialist Rifle Association openly collaborated with DSA chapters. In 2024, the Maryland SRA and Baltimore DSA even hosted a drag show fundraiser for weapons training. And in some states, there's already overlapping membership.

This is not abstract theory. It is not memes on Twitter or LARPing in the woods. In Salem, Oregon, an alleged SRA member was accused of firebombing a Tesla dealership. Court filings in that case describe the SRA as "well-practiced" with firearms and trained in "combat scenarios." These are not hobbyists. These are ideologues sharpening their tools.

That raises the uncomfortable question: how many "self-defense training sessions" across the country are really just grooming grounds for political violence? And how many shootings like Minneapolis will it take before we finally acknowledge the seriousness of far-left extremism in America?

The DSA, meanwhile, has proven to be the political wing of this movement. Back in 2019, the DSA even voted to adopt ANTIFA as an official arm of the organization. Today, they are poised to capture the New York City mayor's office—America's crown jewel. From that position, the levers of power shift dramatically. This is not theoretical; it is a pipeline of ideology to authority.

And the intentions of these groups are not hidden. Just this past July, the New York City DSA chapter held a public meeting about disrupting the U.S. military supply chain. Not reforming it. Not lobbying against it. Disrupting it. That's a polite euphemism for sabotage.

When you connect the dots, the picture is clear:

  • A transgender shooter inspired by militant rhetoric murders children in Minneapolis.

  • A gun club with 50+ chapters preaches "defend equality" with assault rifles.

  • The Democratic Socialists of America, with hundreds of elected officials, keeps flirting with this group.

  • And activists openly talk about disrupting the military supply chain.

It doesn't take a conspiracy theorist to see the trajectory here. The American left has developed its own armed wing, and it is radicalizing fast.

For years, establishment voices assured us that "ANTIFA is just an idea," that the far left was harmless cosplay. But the church in Minneapolis is stained with blood. Tesla dealerships are burning. And groups with real political clout are running drag show fundraisers to bankroll weapons training.

The press will not say it, but the truth is unavoidable: the far left is not preparing to share power. It is preparing to seize it—or, failing that, to destroy society itself.

The only question left is how much longer the rest of the country will look the other way.

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

Tyler Durden Wed, 09/03/2025 - 23:25

Seattle's UW Professors Shift To Private Emails To Hide Their Political Campaigning

Seattle's UW Professors Shift To Private Emails To Hide Their Political Campaigning

In a new op-ed Seattle talk radio host Jason Rantz exposes how University of Washington faculty—through the American Association of University Professors (AAUP)—are deliberately trying to keep their political organizing out of public view. The evidence comes from an email circulated by Abraham Flaxman, a UW professor, forwarding AAUP leadership’s warning that:

“Emails that are sent to an employer-issued email address could be accessed by the employer or be subject to records requests from legislators or members of the public, putting our members’ privacy at risk.”

As Rantz points out, this isn’t about privacy in the ordinary sense—it’s about making sure “taxpayers—or the media—[don’t learn] about the ideological activism they push under the guise of academic freedom.”

770AM's Jason Rantz

The AAUP even pushed faculty to update their contact information with personal emails and cell phone numbers for “rapid response work.” That’s not academic discourse—it’s political campaigning. Rantz rightly concludes:

“In other words, they want to be nimble in organizing political activism—just not where anyone can hold them accountable for it.”

This shows the hypocrisy of faculty who constantly talk about “transparency” but recoil the second their activism risks public exposure. As Rantz notes, the irony is that the listserv itself is hosted by UW—so much of this supposed secrecy may not even protect them from records laws.

KTTH 770AM's Rantz says that the larger point is clear:

“When the AAUP warns its members that ‘messages we send to .edu addresses could be accessed,’ it’s not about protecting sensitive research or academic discourse. It’s about shielding the political machinations of professors who increasingly see themselves less as educators and more as activists.”

Rantz is right to sound the alarm here. If these professors truly believed their activism was principled and defensible, they wouldn’t be trying to hide it from the public that pays their salaries. Instead, they act like political operatives in academic robes, using taxpayer-funded institutions while dodging accountability.

Tyler Durden Wed, 09/03/2025 - 23:00

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