Tennessee Republicans Pass Law Allowing Teachers To Be Armed - Democrats Cry "Fascism"

Tennessee House Republicans on Tuesday passed legislation to allow some trained teachers and school staff to carry firearms despite aggressive opposition from Democrats and gun control advocates calling for the bill to be defeated.  The bill is all but guaranteed to become law within weeks, as Gov. Bill Lee can either sign it or allow it to become law without his signature. Lee has never vetoed a bill.

The law requires criminal and mental health background checks of prospective teachers along with training courses and approval from school administrators.  Democrats railed against the bill, suggesting that training courses are not enough and that it was "unfair" to burden teachers with the job of defending their classrooms from potential assailants.  This argument is strange because teachers are already burdened with the job of protecting students from harm (not to mention their own lives), they just haven't had the means to do that job until now. 

Democrats also stated that armed teachers would "lead to tragedy," with expectations that merely having a gun in or near a school would inevitably cause a shooting with the teacher at fault.  Of course, if a teacher wanted to come to school armed to commit a crime, there's nothing stopping them anyway (except perhaps another armed teacher).

Angry protesters screamed "blood on your hands" when the bill was passed by the House as they attempted to disrupt proceedings.  Protesters were eventually cleared from the building by police.  Representative Justin Jones, a Democrat and activist politician who has been the subject of multiple expulsions from the House, tried to film the event with his cell phone while chanting along with protester and was removed.  Democrats accused Tennessee Republicans of "fascism."

Tennessee Republicans just cut off debate and passed a bill to arm teachers in our schools.

The public chanted “Blood on your hands!” as the Speaker ordered troopers to clear the gallery.

This is what fascism looks like. pic.twitter.com/9mg67oWMxM

— Rep. Justin Jones (@brotherjones_) April 23, 2024

And here we find the disconnect that anti-gun advocates don't grasp:  They seem to believe that the mere presence of a gun will automatically trigger violence, as if it has magical powers to attract and inspire evil.  In reality, the problem is evil people, not "evil" objects.  There's nothing stopping a bad person from acquiring and using a firearm for terrible purposes at any place of their choosing.  Gun free zones only prevent good people from carrying.

Furthermore, why is it that Democrats rabidly defend pornography and sexualized propaganda in schools, but they're aghast at the notion of teachers being trained to defend children from violent attackers?  One might start to think that Democrats want school shootings to continue, but why would that be...?

Keep in mind that the passage of the bill comes one year after the mass shooting at the Christian Covenant School in Nashville.  The shooting was perpetrated by Audrey Hale, a far-left trans activists who was allegedly motivated to make a political statement.  Her manifesto which was confiscated by the FBI still has yet to be released.  Suspicions abound that this is only being done because Hale was part of the LGBT community. 

Not surprisingly, leftist activists and Democrats alike defended Audrey Hale as "just another victim" of the shooting while some even argued that the murders were justified because of Tennessee's attempts to stop transgender surgeries for minors.  

When common sense is labeled "fascism" the likelihood of reconciliation between leftists and conservatives grows dim.  Is it only "democracy" when leftists get their way?  Are Democrats really outraged by the idea of teachers being able to effectively save the lives of students or act as a deterrent so that potential mass shooters never consider going through with an attack?  Or, are they outraged because they secretly fear that the strategy of armed teachers will work? 

Democrats ignore mass shootings in minority neighborhoods all the time because these murders don't serve their purposes.  What they want, what they need, are shootings where the tragedy can be turned into political capital.  Their true intent is to achieve gun confiscation, and if there are no more school shootings because teachers are armed, then they'll no longer have the leverage they desire.     

Tyler Durden Wed, 04/24/2024 - 11:45

Hong Kong Bitcoin And Ether ETFs Officially Approved To Start Trading On April 30

Authored by Zoltan Vardai via CoinTelegraph.com,

The first wave of spot Bitcoin and Ether exchange-traded funds (ETFs) have been officially approved to start trading in Hong Kong on April 30.

Hong Kong’s financial regulator, the Securities and Futures Commission (SFC), announced the official approval of the first batch of spot Bitcoin and Ether ETFs on April 24, according to a press release shared with Cointelegraph.

The first batch of approved Hong Kong-based ETFs also include China Asset Management’s (ChinaAMC) Bitcoin and Ether-based ETFs, which will start trading on April 30.

The ETFs will offer retail and institutional investors a safer and more convenient way to invest in the underlying digital assets under a regulated framework, according to Thomas Zhu, head of digital assets and head of family office business at ChinaAMC. He wrote in the official announcement:

“The in-kind feature also attracts coin holders by offering the ease of converting coins to fully regulated ETFs managed by professional fund managers and regulated custodians. With the growing adoption of ETFs in institutional asset allocation and retail trading in Hong Kong, we expect robust demand for our offerings.”

There are currently over 205 approved ETFs in Hong Kong, according to the financial regulator’s homepage.

List of approved Hong Kong ETFs. Source: SFC

Unlike the cash-creation model of the United States spot Bitcoin ETFs, Hong Kong aims to offer in-kind creation models for ETFs that enable the creation of new ETF shares by using BTC and ETH. 

Hong Kong’s in-kind ETF creation model could be a significant opportunity to considerably increase assets under management (AUM) and trading volume for these products, according to a research note by Bloomberg ETF analyst Rebecca Sin, shared in a March 26 X post by Eric Balchunas:

“Hong Kong is aiming for in-kind creation of the ETF, unlike the US, where the transaction is cash only — in the US, it’s cash in, Bitcoin ETF out, while Hong Kong aims for Bitcoin in, ETF out. This could be an opportunity for the market.”

Hong Kong ETFs could see a potential fee war

The launch of the first ETFs in Hong Kong could lead to issuers racing to offer the lowest fees to customers, according to an April 24 X post by Bloomberg ETF analyst James Seyffart. He wrote:

“A potential fee war could break out in Hong Kong over these Bitcoin and Ethereum ETFs. Harvest coming in hot with a full fee waiver and the lowest fee at 0.3% after waiver.”

The fees for the first ETFs are already lower than previously expected, which is a promising sign, according to Eric Balchunas, senior ETF analyst at Bloomberg, who wrote in an April 24 X post:

“Fees are 30bps, 60bps, and 99bps which is on average lower than we thought, good sign.”

Tyler Durden Wed, 04/24/2024 - 11:25

Chinese Have "Grabbed Gold By The Throat" As Capital Flight Accelerates

“Chinese speculators have really grabbed gold by the throat...”

That is how John Reade, chief market strategist at the World Gold Council, describes the scramble in the communist nation among investors looking to move money anywhere but in the yuan or Chinese assets.

As evidenced by soaring Chinese FX outflows, the recent surges in 'alternate currencies' such as bitcoin and gold strongly suggest where the Chinese are seeking safety.

Of course, worsening geopolitical tensions, unprecedented fiscal profligacy by the Biden administration that shows no signs of slowing, and a Fed that seemed willing to support that spending with rate-cuts that were wholly un-necessary based on the 'data' they are so 'dependent' on (prompting fears of a policy error) are all factors driving precious metals higher, but, as Bloomberg reports, juicing the rally is unrelenting Chinese demand, as retail shoppers, fund investors, futures traders and even the central bank look to bullion as a store of value in uncertain times.

China and India have typically vied over the title of world’s biggest buyer. But that shifted last year as Chinese consumption of jewelry, bars and coins swelled to record levels. China’s gold jewelry demand rose 10% while India’s fell 6%. Chinese bar and coin investments, meanwhile, surged 28%.

And there’s still room for demand to grow, said Philip Klapwijk, managing director of Hong Kong-based consultant Precious Metals Insights Ltd. Amid limited investment options in China, the protracted crisis in its property sector, volatile stock markets and a weakening yuan are all driving money to assets that are perceived to be safer.

“The weight of money available under these circumstances for an asset like gold - and actually for new buyers to come in - is pretty considerable,” he said.

“There isn’t much alternative in China. With exchange controls and capital controls, you can’t just look at other markets to put your money into.”

But, there is another side to the Chinese demand for gold - speculators.

Long gold positions held by futures traders on the Shanghai Futures Exchange (SHFE) climbed to 295,233 contracts, equivalent to 295 tonnes of gold.

That marks a rise of almost 50 per cent since late September before geopolitical tensions flared up in the Middle East.

A record bullish position of 324,857 contracts was hit earlier this month, according to Bloomberg data going back to 2015.

While the scale of gold's rally has surprised many analysts, The FT points out that some point to activity on SHFE and the Shanghai Gold Exchange - where trading volumes on a key contract have doubled in March and April relative to last year - as a big driver of the rally, as Chinese investors aim to diversify from their crisis-ridden property sector and sagging stock market...

Additionally, Bloomberg reports that although China mines more gold than any other country, it still needs to import a lot and the quantities are getting larger.

In the last two years, overseas purchases totaled over 2,800 tons — more than all of the metal that backs exchange-traded funds around the world, or about a third of the stockpiles held by the US Federal Reserve.

Even so, the pace of shipments has accelerated lately. Imports surged in the run-up to China’s Lunar New Year, a peak season for gifts, and over the first three months of the year are 34% higher than they were in 2023.

And finally, as evidence of Chinese demand (or the scale of the capital flight), the premium being paid for the precious metal over western prices is soaring...

Of course, China’s authorities, which can be quite hostile to market speculation and extremely hostile to capital flight, have warned, via their state media mouthpieces, that investors should be cautious in chasing the rally in gold.

But, this is made all the more ironic given the fact that it is the Chinese central bank that is among the most prolific buyer of bullion in recent months...

Do as we say, not as we do... or maybe investors should ask 'what does Beijing know?'

Tyler Durden Wed, 04/24/2024 - 11:05

Overconfidence In NFL Drafts: A Lesson For Investors

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Most NFL general managers (GMs) are optimistic and displaying overconfidence today as they prepare for tomorrow’s NFL draft. The draft is a once-a-year opportunity for GMs to acquire talent.

Like investors, GMs often think they are smarter than their competitors, aka the market. Yet, they frequently have similar mindsets and follow the same narratives that drive their competition.   

As we will share, overconfidence and groupthink among football GMs and investors are behavioral flaws that often harm performance. Having the tools and strategies to mitigate our behavioral traits is extremely valuable and can lead you to better returns.

Overconfidence In The NFL

Four of the first five picks in the draft are expected to be quarterbacks. Not only is the quarterback the most important position on the field but this year’s draft is hyped as having several future greats.

Based on data from Warren Sharp, an NFL analyst, most of the quarterbacks taken in the early rounds will be average. His Fox Sports article entitled The success rate of first round QBs makes Lamar Jackson’s case for him, quantifies just how poor the odds are of drafting the next Super Bowl-winning quarterback. 

There have been 38 quarterbacks drafted in the first round since 2011, the year the NFL changed the collective bargaining agreement.

These 38 first-round quarterbacks have made a total of 1,909 starts. Their record? 1034-1035-7.

He claims that of those 38 quarterbacks, only one, Patrick Mahomes, has won a Super Bowl. Furthermore, of the 28 from that group who are no longer on their initial contracts, the average time they were a starter was a mere 3.4 years.

Despite the proven mediocrity of quarterbacks taken in the first round, we have little doubt that overconfidence will be on full display by the GMs drafting quarterbacks with their top picks after they make their selections.

Groupthink In The NFL

This behavioral trait arises when people seeking conformity think and act similarly. Typically, groups reach a consensus opinion without proper evaluation and with minimal alternative viewpoints.

For instance, it is widely accepted that the four quarterbacks likely to go in the top five, Williams, Daniels, Maye, and McCarthy, will be excellent pros. Most NFL analysts offer differences between the quarterbacks but praise the physical and mental traits they believe will make them NFL starts. Very few analysts have poor ratings on any of those four quarterbacks.

Choosing one of the four quarterbacks is comforting. Simply, GMs have cover if their pick is a dud. Who could have known? Every expert thought he would be a superstar!

Investor Overconfidence And Groupthink

Replace players with investment ideas and GMs with investors. The overconfidence and groupthink mentality impacting GM draft day decisions are similar to those investors always face.

We quantified the odds of GMs picking above-average quarterbacks earlier. Per DFA Funds, the odds of an investor outperforming the market are even more daunting.

We saw from the data above that an investor has about a 75% chance of underperforming the market in any given year, which means you have a 25% chance of beating the market in any given year.

The message to take away from that statistic is to leave your confidence at the door!

Regarding groupthink, most investors, like GMs, find comfort in knowing that many other investors are doing the same thing. Market narratives are a form of groupthink. Narratives help explain market movements and trends. Often, a narrative develops after a trend has started. In other words, rightly or wrongly, the narrative is the rationale.

Today, narratives appear to be quicker to form and longer lasting. Maybe the advent of social media has allowed for their quicker dissemination and growth.

Narratives describe the mindset of a group of investors. When you unknowingly invest based on a narrative, you are likely setting yourself up for failure.

Strategies To Combat Behavioral Traits

Appreciating that GMs have a one in three chance of successfully using a precious top-five draft pick on a quarterback or that only a quarter of investors will beat the market, we best have tools to manage our behavioral traits and improve our odds of success.

Zig

Warren Sharp advises GMs to “zig while others zag.”

To zig is to have a contrarian mindset. For instance, it’s important for your portfolio to have popular stocks leading the market higher. But at the same time, understand that confidence can wane quickly, and a new set of stocks will take the throne soon enough. Don’t overstay your welcome in a narrative.

It wasn’t that long ago that the Magnificent Seven stocks were all the rage. Their returns handily beat almost every stock and index. Holding a meaningful subset of the seven stocks was vital to keep up with the broad market indexes. However, the Magnificent Seven’s period of outperformance has either ended or is on pause. But, the narrative still thrives, and whether it’s already happening or will occur shortly, investing in the aged groupthink will catch many investors offside.

Take Profits 

It’s hard to sell when others are buying. Still, when the narrative-driven stocks fall out of favor, the prior profits and reduced position sizes will bolster returns and lessen the risk of underperforming the market.

Appreciating what the market, and not popular narratives, tell you is equally vital. For instance, have you noticed that utilities and energy are the best-performing sectors lately? Those solely holding the Magnificent Seven and neglecting other sectors are falling behind.

The SimpleVisor table below shows the relative performance of the Magnificent Seven stocks and XLU, the utility ETF, versus the S&P 500 over various time frames. Other than NVDA, most of the seven have been underperforming the market as of late. Also, the once poorly performing utility sector has been beating the market for the last 45 days. Selling the Magnificent Seven 45 days ago to buy utilities would go against groupthink, but it was a smart call.

Appreciate Your Options

The GMs with the top five picks have a precious option. Instead of picking a quarterback with limited odds of success, they can trade the pick to another team. In exchange, they might receive multiple high-level draft picks, boosting the odds of success.

Other positions in the NFL draft have much better success rates than quarterbacks. If a GM can set aside their confidence in their ability to pick the right quarterback, they can increase the odds that they could easily land at least two very good players and possibly a pro bowler. Maybe they can even use one of the picks to get a quarterback in the later rounds. Let’s not forget Brock Purdy, the San Francisco quarterback who led the 49ers to the Superbowl, was Mr. Irrelevant, the last person taken in the draft.

Investors have options, too. Many stocks, sectors, and factors will likely outperform the market but do not fit the narrative du jour. While buying what others aren’t may be uncomfortable, it may be more profitable.

The other lesson is to diversify. Putting most of your eggs in one basket can significantly impact your relative performance. You will underperform if you are proven wrong, as is most common.

Let Winners Run

One of the most popular Wall Street sayings is, “Cut your losses short and let your winners run.”

If our chances of beating the market are one in four, doesn’t it make sense to trade your portfolio actively? Many investors do the opposite. Their confidence and the attraction of groupthink keep them in underperforming stocks. At the same time, alternative stocks that are less followed may be the best bets.

It can be appropriate and profitable at times to follow the crowd. However, at all costs, don’t ignore alternative views.

 

Summary

We risk underperforming the market by falling victim to our natural behavioral traits. Therefore, we owe it to ourselves to entertain and understand alternative views. As odd as it may seem these days, we need to watch FOX News and read the New York Times. We must challenge ourselves to understand better things that may not be comfortable.

Seek out and study the views of others with whom you disagree. By better understanding opposing opinions, you will strengthen your existing views or better recognize flaws in your current logic. Either way, an investment thesis is better for it.

Most importantly, remember that you are only human. The Patrick Mahomes of the investment world are few and far between. At times, overconfidence is a good trait, but it can also be a critical flaw.

Tyler Durden Wed, 04/24/2024 - 10:45

WTI Jumps After Bigger-Than-Expected Crude Inventory Build, Gasoline Demand (Reportedly) Slumps

Oil prices are drifting lower this morning, despite API reporting a surprise crude inventory draw last night, as hopes that geopolitical tensions are easing (hope is not a strategy) combined with a reduced expectation of economy-juicing rate-cuts are weighing on crude prices.

Supporting the upside, the US Senate, meanwhile, passed tougher measures against Iran in response to its attack on Israel earlier this month, with President Joe Biden saying he’ll sign the legislation into law. But the market is clearly calling Biden's bluff on this threat as he faces soaring pump prices domestically which will do nothing to help his "but I fixed inflation" narrative into the election...

Source: Bloomberg

However, for now, all eyes are on the official inventory and supply data for any signs of overall tightness, and refined products demand as the summer driving season is fast approaching.

API

• Crude -3.23mm (+500k exp)

• Cushing -898k

• Gasoline -595k (-1.5mm exp)

• Distillates +724k (-1.0mm exp)

DOE

• Crude -6.4mm (+500k exp)

• Cushing -659k

• Gasoline -634k (-1.5mm exp)

• Distillates +1.6mm (-1.0mm exp)

Confirming API's report, the official data showed crude inventories plunging last week by the most since January. On the product side, it was mixed with gasoline drawing down by distillates building...

Source: Bloomberg

There was a 909k b/d drop in the adjustment factor versus last week, the biggest decline since February, coinciding with the big increase in crude exports. At 257k b/d this week’s balancing measure was pretty small by its own highly volatile standards.

Source: Bloomberg

The Biden admin added 793k barrels to the SPR last week - the largest addition since January... and probably the last!

Source: Bloomberg

Implied gasoline demand fell yet again, nearly slipping back below 2022 seasonal levels for the first time since early March.

The figure typically sees decent growth at this point in the year, yet a post-Spring Break slump appears to have become the norm since 2020.

In comparison to pre-pandemic demand, the figure is at its lowest since 2014.

Source: Bloomberg

US crude production was flat at 13.1mm b/d (near record highs) and we note a very modest rise in rig count trends starting...

Source: Bloomberg

WTI was trading around $83.00 ahead of the API data and jumped back into the green for the day after the crude draw...

The conflict in the Middle East has "undoubtedly exacerbated tensions in an already volatile region," Stephen Innes, managing partner at SPI Asset Management, told MarketWatch.

"While the recent attacks have been downplayed, the potential for further escalation cannot be entirely dismissed."

However, "there's a lesson to be gleaned from this situation, particularly in how swiftly demand responded to higher oil and gasoline prices, as evidenced by the increase in U.S. oil stockpiles," he said.

Finally, timespreads are signaling tighter conditions, with the gap between Brent’s two nearest contracts widening to $1.05 a barrel in backwardation, a bullish pattern in which the nearer contract trades at a premium to the next in sequence. That compares with 69 cents a week ago.

Tyler Durden Wed, 04/24/2024 - 10:38

Germany Arrests Unprecedented Six Spies In Less Than A Week

German security services say they've arrested an unprecedented six suspected spies in only the past week, and four of these are believed to have been working for the government of China, while the other two are suspected Russian agents. 

As we reported earlier, the latest case unveiled Tuesday centered on a staffer who worked for a high profile German AfD member of European Parliament. Identified only as Jian G., he had reportedly been a staff member for German MEP Maximilian Krah going back to 2019. "In January 2024 the accused repeatedly shared information about negotiations and decisions in the European Parliament with his intelligence service employer," the prosecutors office said.

The day prior, Monday, saw three German citizens accused of having ties with Chinese intelligence arrested. Their case appears even more serious as it involves allegations they transported sensitive technology to China which has potential military uses, violating Germany's export laws. 

Chinese Embassy in Germany

One suspect tried to export a specialized laser without permission, alongside two others - a German couple - who also sought to procure advanced technologies which investigators suspect were to help Chinese naval development: 

The couple allegedly set up a research transfer agreement with an unidentified German university, the first step in which was to draw up a study for a Chinese partner on the technology of machine parts that could be used for powerful ship engines, including those in battleships. Thomas R.'s handler at the MSS was behind the Chinese partner and the project was financed by the Chinese state, prosecutors said.

At the time of the arrests, the suspects were in negotiations on further research projects that could be useful for expanding China's naval combat strength, they added.

Thomas Haldenwang, president of Germany's domestic intelligence service, said following of the detentions: "We initiated these investigations, and once the evidence was clear, we were able to hand this case over to the police and the public prosecutors," according to DW.

And head of the Parliamentary Control Committee for the Intelligence Services in the lower house, the Bundestag, said, "We must finally understand that this is a very serious and very real threat to our security." He added, "We must act quickly and decisively both through criminal prosecution and by uncovering the structures and networks."

According to more from German federal prosecutors: 

One of the suspects, identified only as Thomas R. in line with German privacy laws, was allegedly an agent for an employee of China's Ministry of State Security and procured information in Germany on "militarily usable innovative technologies" for that person, federal prosecutors said in a statement.

The three suspects had reportedly been working on expanding their research contacts and endeavors reportedly in hopes of procuring further sensitive technologies which might be useful for the Chinese government.

The timing of this significant spy round-up involving China came at an interesting moment - just a week following the three day visit of Chancellor Olaf Scholz to China. It was his second trip there since taking office in 2021. Germany officials have refused to comment on whether he knew of the investigation or how far it had progressed at the time he made this latest trip.

Truly a fascinating coincidence that literally days after Scholtz comes back from a trip to China that was viewed as successful in resetting the relationship, they suddenly find all those Chinese spies in Germany.

Almost as if someone was trying to unset the reset... but here I… https://t.co/VKSGsRf8N7

— Arnaud Bertrand (@RnaudBertrand) April 24, 2024

As for the pair of alleged Russian spies, they are German-Russian citizens who were arrested in Bayreuth, northern Bavaria. They are believed to have been monitoring US Army bases in Germany, particularly ones connected with Pentagon programs to train Ukrainian troops. A BBC report says it went beyond just scouting secretive facilities, but that the spy duo had plans to conduct sabotage operations. Investigators cited "preparing explosive and arson attacks, especially on military and industrial infrastructure. Dieter S is said to have scouted potential targets including US military facilities, taking photos and videos and handing the information to the Russian contact."

And more: "According to the Spiegel website, a US Army facility at Grafenwöhr in Bavaria was spied on. Last year, the US sent dozens of Abrams battle tanks to Bavaria for Ukrainian soldiers to train on at Grafenwöhr and another base at Hohenfels before the tanks were sent to the front line in Ukraine."

Both Russia and China have of late sought to dismiss allegations of significant foreign spy rings in the heart of Europe as but political propaganda and attempts to gain leverage over Beijing on the world stage.

Tyler Durden Wed, 04/24/2024 - 10:20

Kering Tumbles On Profit Warning As Gucci Revamp Stumbles 

Gucci owner Kering SA's problems in mainland China are only mounting as the French luxury giant issued a profit warning. As a result, shares of the company in Paris plunged to a six-year low. 

Lackluster Chinese demand for the luxury goods maker, which includes the Gucci, Balenciaga, Bottega Veneta, Yves Saint Laurent, Creed, and Alexander McQueen brands, sparked turmoil in Paris trading on Wednesday. Shares were down as much as 10%, tumbling to lows not seen since October 2017. 

Kering said its sales in the first quarter dropped 11%, citing "tough market conditions" in its Asia-Pacific unit, particularly in China, one of the world's largest luxury goods markets. 

• Group first-quarter revenue: €4,504 million, down 11% as reported and down 10% on a comparable basis

"Kering's performance worsened considerably in the first quarter. While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline," Francois-Henri Pinault, chairman and chief executive officer of Kering, wrote in a statement.

Pinault continued, "In view of this revenue decline, together with our firm determination to continue investing selectively in the long-term appeal and distinctiveness of our brands, we now expect to deliver sharply lower operating profit in the first half of this year. All of us are working tirelessly to see Kering through the current challenges and rebuild a solid platform for enduring growth."

Here's a snapshot of the first quarter earnings (courtesy of Bloomberg):

• Comparable revenue -10%, estimate -10.2% (Bloomberg Consensus)

• Gucci revenue on a comparable basis -18%, estimate -19.4%

• Yves Saint Laurent revenue on a comparable basis -6%, estimate -6.75% 

• Bottega Veneta revenue on a comparable basis +2%, estimate -0.05% 

• Other Houses revenue on a comparable basis -6%, estimate -4.23% 

• Eyewear & corporate revenue on a comparable basis +9%, estimate +18.1%

• Revenue EU4.50 billion, -11% y/y, estimate EU4.47 billion 

• Gucci revenue EU2.08 billion, -21% y/y, estimate EU2.05 billion

• Yves Saint Laurent revenue EU740 million, -8.2% y/y, estimate EU737.1 million

• Bottega Veneta revenue EU388 million, -1.8% y/y, estimate EU381.5 million

• Other Houses revenue EU824 million, -7.4% y/y, estimate EU834.4 million

• Eyewear & corporate revenue EU536 million, +24% y/y, estimate EU517 million

In the financial outlook, Kering warned that, considering "deterioration revenue trends," the company now expects "a decline of 40 to 45% in first-half 2024 recurring operating income compared to the first half of 2023." 

In February, Pinault stated, "Our priority is to get Gucci back on track," adding that this "won't happen overnight."

Kering has scrambled to turn the sinking ship around, as Gucci accounts for half the group's sales. 

Here's what Wall Street analysts are saying about Kering's profit warning amid fears the revamp of Gucci is faltering (list courtesy of Bloomberg): 

Deutsche Bank (buy, PT cut to €460 from €540)

• Kering has followed up its surprise first-quarter revenue pre- release with a bigger-than-expected flow-through into first-half Ebit guidance, analyst Adam Cochrane says

• There are "limited green shoots" with regards to Gucci at this stage, and will have to wait until the third or even fourth quarter to see if the Sabato proportion of the collection hit 30-40%

RBC Capital Markets (outperform, PT cut to €430 from €440)

• While Gucci's margin cut is "optically bad," it was well- anticipated and largely in the price, analyst Piral Dadhania says

•  Performance is currently challenged, with no improvement in second-quarter trading, but the market will likely focus on sequential revenue growth improvement driven by new product introductions

Bryan Garnier (neutral, PT cut to €350 from €405)

• Kering was even worse than expected, says analyst Loic Morvan, even amid marginal signs of improvement at the top and bottom- line in the second half

Jefferies (hold, PT cut to €360 from €370)

• Kering's update confirmed Ebit under pressure in the first half, with Gucci's recovery expected to be only gradual over this year, writes analyst James Grzinic

• Analyst is encouraged that the group is seeking external partners for real estate holdings, but triangulating Gucci's renaissance remains a "challenging affair"

Morgan Stanley (equal-weight, PT cut to €365 from €405)

• Management's tone was cautious on the call regarding the sales and profit trajectory for the remainder of the year, analyst Edouard Aubin writes

• The warning is more a function of incremental operating deleverage rather than proactive investments behind the brands

Citi (buy, PT €470)

• Citi analyst Thomas Chauvet says that Gucci's design transition and new brand aesthetics might be slower-than- expected in driving brand heat and store traffic

• The greatest source of uncertainty this year is the shape of demand in subsequent quarters, and its impact on profitability

Bloomberg Intelligence

• Gucci's rebuild is dragging toward 2025, analyst Deborah Aitken says, adding that overhaul efforts are taking longer, while Kering's second-biggest brand YSL is also weaker, which requires deeper investment

• Sabato de Sarno's collection will take until the third quarter for fuller own-retail store visibility, pushing the resumption of growth to 2025

This all plays into the slowdown of the global luxury market, reflected in the MSCI Inc. index of global luxury stocks, finding three lower highs since peaking during the Covid mania of late 2021. 

Another ominous sign is the flashing red from the watch market just days ago. 

Swiss Watch Exports Crash In China & Hong Kong https://t.co/i2LXXHa5aK

— zerohedge (@zerohedge) April 19, 2024

The underperformance of luxury results from shoppers who are pulling back on spending, especially in Asia, as the Chinese economic recovery has yet to impress anyone. 

Tyler Durden Wed, 04/24/2024 - 09:40

Jack Dorsey's Block Announces Development Of 'Full Bitcoin Mining System'

Authored by Turner Wright via CoinTelegraph.com,

Payments firm Block, formerly known as Square, has announced plans to develop a Bitcoin mining system in response to challenges faced by mining operators.

In an April 23 blog post, Block said it had completed development of a three-nanometer chip used for BTC mining, which led to the firm announcing a “full Bitcoin mining system.”

Block — then Square — CEO Jack Dorsey suggested a collaborative approach to decentralize Bitcoin mining in October 2021.

“We’ve spent a significant amount of time talking to a wide variety of bitcoin miners to identify the challenges faced by mining operators,” said Block.

“Building on these insights and pursuant to our goal of supporting mining decentralization, we plan to offer both a standalone mining chip as well as a full mining system of our own design.”

Source: Jack Dorsey

Block completed a prototype design of a five-nanometer BTC mining chip in May 2023, claiming at the time the centralization of chip development in the hands of a few companies was harmful to the ecosystem.

The firm called on the mining community to provide additional feedback for the system, asking for comments on challenges it faced in purchasing miners, maintenance, transparency and software issues. 

Intel announced in 2023 that it planned to end shipping for its Blockscale 1000 Series ASIC (application-specific integrated circuit) mining chips in April as part of cost-cutting measures.

Such chips are often used for mining proof-of-work cryptocurrencies, including Bitcoin.

The Bitcoin halving on April 19 cut the block reward for miners from 6.25 BTC to 3.125 BTC.

The event will likely shake up the market as miners compete for fewer rewards for the same work until the next halving, expected in another four years.

Tyler Durden Wed, 04/24/2024 - 08:50

Durable Goods Orders Suffers Biggest YoY Decline Since COVID Lockdowns

The roller-coaster ride that is 'Durable Goods New Orders' continues this morning after the last six months of so have seen monthly swings higher and lower with no trend discernible whatsoever (especially noteworthy given yesterday's slump into contraction for the Manufacturing PMI) amid the on-again-off-again turmoils of Boeing's orders.

Preliminary March data showed a slightly better than expected 2.6% MoM rise (2.5% exp) in the headline orders print. However, thanks to the downward revisions, Durable goods orders are now down 2.2% YoY... the biggest YoY drop since the COVID lockdowns...

Source: Bloomberg

This is the 8th downward revision of durable goods orders in the last year...

Source: Bloomberg

Under the hood, defense and non-defense capital goods orders rose with non-defense aircraft orders surging over 30% MoM...

Source: Bloomberg

But... it looks like the AI bubble just burst as Computer & related Products orders plunged 3.9% MoM - the biggest drop since COVID lockdowns...

Source: Bloomberg

Finally, and more problematically, core capital goods shipments - a figure that is used to help calculate equipment investment in the government’s gross domestic product report - saw only a small 0.2% MoM rise, which left core shipments down 1.2% YoY - the biggest YoY drop since the COVID lockdowns...

Source: Bloomberg

More 'bad' news to BTFD?

Tyler Durden Wed, 04/24/2024 - 08:40

How Nvidia Uses Gold

Via SchiffGold.com,

What is Nvidia? If you’re a committed gamer the question may sound like nonsense. Nvidia, which was founded in 1993, is a tech company that makes GPUs and other products. It originally specialized in making products for the video game industry, that assisted in 3D rendering. If you were a committed gamer, you probably owned their products. If you weren’t, you might not have heard of them.

But with sudden advances in artificial intelligence, it has been everywhere in the news because its products can also be used for artificial intelligence. Its fourth-quarter revenue from Q4 2022 to 2023 literally increased 265%.

A decade ago, its market capitalization hovered around $10 billion In 2016, it was around $50 billion.. As of April 2024, it was worth over $2 trillion. The Motley Fool ranked it third most valuable publicly traded company in the world, just behind Apple. It is now over five times more valuable than Walmart. It is one of the best-performing stocks of the last few years.

Sometimes the stock market, particularly tech stocks, are placed in a different mental bucket than traditional investments and stores of value, such as gold and silver.

But often precious metals are more closely connected to tech than some think.

And that is because one of the essential components in many of its products is gold. Nvidia uses various metals to make its products- gold of course, as well as tantalum, tungsten and tin. SchiffGold has long covered how demand for industrial silver use is forecasted to rise, but many high-tech industries depend on the industrial use of gold as well.

GPU microchips are made with gold as well as other metals like minum, silicon, and copper because of their useful conductive properties. Of course, the monetary value of gold provides an incentive to minimize its use, but the chemical properties of gold remain so useful that manufacturers continue to use gold in chips and sometimes in internal computer wiring and switches despite their cost.

As competition for the best GPUs heats up and the price of GPUs is likely going to rise due to advances in artificial intelligence, the cost of the metal in GPUs will become less relevant to the overall cost of gold. 

This means that manufacturers can use more gold in their products without dramatically increasing the cost of their GPUs and other products.

Perhaps that’s why some savvy investors are betting on both gold and artificial intelligence companies.

One prominent example is Stanley Druckenmiller who shifted his allocation away from big tech and towards AI and gold.

More gold may currently be used for investment or jewelry than in high-tech, but it’s intriguing that humanity’s newest and most advanced technology, artificial intelligence, has looped around to depend on our oldest kind of money.

Gold’s resilience depends on its historic, current, and future usage as money. It’s buoyed by its beauty and use in jewelry and decoration. But its value is also driven by its unique chemical features that power the greatest technologies in the world.

The cost of gold encourages companies to seek alternatives to it, but its natural features guarantee that it’s still used as a vital component of computers and GPUs despite its cost.

Tyler Durden Wed, 04/24/2024 - 06:30

Senates Passes $95 Billion Aid Bill For Ukraine, Israel And Taiwan, Forces Sale Of TikTok

The republicans do what they always do best: fold like cheap lawn chairs.

Moments ago, in a 79-18 vote, the Democrat-controlled Senate passed a long-delayed $95.3 billion foreign-aid package sending $60.8 billion in ammunition and military equipment to Ukrainian soldiers, as well as billions of soon-to-be-embezzled dollars to the offshore real estate agents of Ukraine's corrupt oligarchs while also fortifying Israel’s missile defense systems with $26.4 billion, and leaving $8 billion for Taiwan as if that will do anything to stop a Chinese invasion. Oh, and speaking of Chinese invasions, the Senate also just forced the sale of the China-owned TikTok in the U.S.

There will be, of course, no change to the invasion at the southern US border because here too Republicans keep folding like cheap lawn chairs to the Democrat ploy to flood the US with illegal aliens who will get free shit for life if only they keep voting for the blue team.

The bill had broad support in the Senate, with backing from almost all Democrats and a majority of Republicans. Several Republicans who had opposed an earlier iteration of the package, which came after a failed push to attach it to a border-policy overhaul, switched their vote to support Tuesday’s bill. The breakdown of the votes is as follows:

GOP NO VOTES:

• Barrasso
• Blackburn
• Braun
• Budd
• Cruz
• Hagerty
• Hawley
• Johnson
• Lee
• Lummis
• Marshall
• Rubio
• Scott (FL)
• Schmitt
• Vance  

DEM NO VOTES:

• Merkley
• Sanders
• Welch

The vote brought to a close months of pointless sound and fury, and endless debate over Ukraine, that allegedly split the Republican Party,  with rank-and-file members openly rebelling against their leaders, who succeeded in outdemocrating the democrats.

Biden, McConnell, Schumer, Johnson, and major media players are taking a victory lap over pushing through an additional $61 billion in funding from struggling taxpayers as year 3 of the Ukraine proxy war begins. They want to own this and absolutely should be forced to own this.

— Mollie (@MZHemingway) April 24, 2024

The theatrical "fight" also called into question both how far the US would go to defend Ukraine, now in the third year of trying to repel Russia’s invasion, as well as America’s leadership role in the world, once the latest rescue funding is exhausted in a few months, which it will be, with the Ukraine having made zero progress in its war with Russia.

The measure passed the House on Saturday and now goes to President Biden’s desk. Biden, who has been pushing for a big foreign-aid package since the fall, said he would quickly sign the measure into law Wednesday.

President Biden on Senate’s passage of $95 billion aid package with funding for Ukraine, Israel and Taiwan: “I will sign this bill into law and address the American people as soon as it reaches my desk tomorrow so we can begin sending weapons and equipment to Ukraine this week.” pic.twitter.com/eOAbtzNqWq

— Joey Garrison (@joeygarrison) April 24, 2024

As broken down below, the measure contains money for Ukraine, Israel and Taiwan, as well as humanitarian aid for Gaza—largely matching an earlier Senate bill—plus additions made by the House, such as sanctions on Russia and Iran and the TikTok provision. Leaders in the GOP-controlled House also changed roughly $9.5 billion in economic aid to Ukraine into forgivable loans rather than grants, to make it more politically palatable to Republicans, as if Ukraine will ever repay anything.

Senate Majority Leader Chuck Schumer (D., N.Y.) credited the White House as well as Republicans who backed Ukraine for advancing the measure, noting that House Speaker Mike Johnson (R., La.) put his political future on the line when he moved forward with the package.

“In a resounding bipartisan vote, the relentless work of six long months has paid off,” Schumer said on the senate floor. In a statement, Biden thanked lawmakers of both parties, saying they answered “history’s call at this critical inflection point” by sending a message to allies and foes about American power.

And just like that the deeply embedded deep state operative formerly known as the House speaker has become the media's darling overnight:

All it takes to get the media to change from mocking and reviling you to slobbering you with praise is to do what they want. It only takes $100B and the betrayal of your voters' policy goals, but what are those silly things compared to praise from the media! https://t.co/id0VrzC77D

— Mollie (@MZHemingway) April 24, 2024

Of course, while superficially the bill says "aid to Ukraine" where the majority of the money is really going is to the US military industrial complex. As the WSJ reports, the proposal has roughly $60 billion for Ukraine, most of which would flow to the U.S. defense industry for additional weapons such as ammunition and rocket launchers. The new aid comes on top of the more than $100 billion spent on the Defense Industry Kyiv since Russia invaded in February 2022.

And while most muppets in the House and Senate are clearly in the pocket of the military-industrial complex and the deep state, a few holdouts remains.

Sen. Eric Schmitt (R., Mo.), who voted against the measure, called the support for Ukraine to defend its borders “an insult to the American people” while the U.S. struggles with an influx of migrants at its own border with Mexico.

Sen. Ted Cruz (R., Texas) called his opposition to the proposal’s advancement “one of the toughest votes I’ve cast during my years in the Senate,” saying he couldn’t overcome his concern that humanitarian aid would end up in the hands of terrorists, among other worries.

Others were more "malleable" in their ideological beliefs.

Sen. Markwayne Mullin (R., Okla.), who switched from voting against the Senate’s aid package in February to supporting the revised version on Tuesday, said that the politics were complicated.   “Our approach this time was to make sure that the politics are set, meaning that President Trump was on board, it’s something that could be passable, it’s something that could be explained,” he said.

Sen. James Lankford (R., Okla.), who also switched his vote, said he didn’t want to “punish Israel and Ukraine” over the lack of border provisions. Lankford had led a failed bipartisan effort to find a compromise on immigration, which was shot down by Republicans earlier this year as not tough enough.

Asked why some Senate Republicans were slow to support aid for Kyiv, 3000-year-old Senate mummy Mitch McConnell cited the “demonization of Ukraine” by conservative political commentator Tucker Carlson. “He had an enormous audience, which convinced a lot of rank and file Republicans that maybe this was a mistake,” McConnell said in a press conference. Carlson declined to comment.

Mummified Mitch also laid blame on former President Donald Trump, Democrats and the border crisis for the amount of time it took to get most Republican lawmakers to acquiesce in continuing to fund the Ukrainian war effort.

“I think the former president had sort of mixed views on it,” he said of Trump’s position on Ukraine aid. “We all felt that the border was a complete disaster, myself included,” McConnell continued, noting that the attempt earlier this year to attach border security provisions to Ukraine funding required senators to “deal with Democrats … and then a number of our members thought it wasn’t good enough.”

“And then our nominee for president didn’t seem to want us to do anything at all,” McConnell said. “That took months to work our way through it.”

Last but not least, the bill also starts the clock on TikTok’s Chinese-controlled owner ByteDance to find a new owner for the video app in the U.S. within a year, or risk a shutdown. But the matter is expected to be decided by the federal courts which means that it will quietly die on some bench in the corrupt US legal system. A court dispute would likely require judges to weigh the national security objectives of the ban against the First Amendment rights of TikTok and its users.

Tyler Durden Wed, 04/24/2024 - 05:58

Meet The New ETFs That Are Offering '100% Downside Protection'

If 100% downside protection is the norm for banks that are too big to fail on Wall Street, why shouldn't it be for everyday investors?

This is the question that a number of ETF innovators are apparently asking, as a wave of new ETFs offering '100% downside protection' are getting ready to hit the market, in the push to find the newest ETF fad. 

After all, something has to replace all of the ESG ETFs that have shuttered in the last year.

Calamos Investments has introduced new exchange-traded funds offering partial returns tracking the S&P 500, Nasdaq 100, and Russell 2000, coupled with complete downside protection through derivatives, Bloomberg reported this week.

The inaugural ETF, Calamos S&P 500 Structured Alt Protection ETF, aims to mirror the SPDR S&P 500 ETF Trust's price returns up to a 9.65% cap.

Full protection requires purchasing the ETF on its launch day, May 1, 2024, and maintaining the investment until April 30, 2025. This ETF, and others soon to be launched, will use call and put options to manage market volatility, though their effectiveness in fully safeguarding against losses is not guaranteed.

Matt Kaufman, head of ETFs at Calamos commented: “With risk-free rates north of 5% today, options-based product issuers are able to deliver meaningful upside participation with 100% capital protection."

He continued: "For those issuing ‘protective’ products, the cost of hedging by selling an option — or series of options — to offset the premium to buy a protective put becomes cheaper as rates rise.”

Issuers are launching funds that blend equity exposure with downside protection amid fluctuating interest rates, Bloomberg writes. 

For example, the Innovator Equity Defined Protection ETF, launched in July, has amassed $230 million by offering complete downside protection over two years. BlackRock, the top ETF issuer globally, is also proposing similar funds.

Unlike earlier "buffer ETFs" introduced in 2018 that protect against initial losses up to a point (such as the first 10%), these new funds from Calamos offer less upside potential but greater downside security.

Kaufman concluded: “For people as they age, nearing retirement — they can’t afford the significant drawdowns of the market, but they also can’t afford to not be in the market. So this gives them an opportunity.”

Tyler Durden Wed, 04/24/2024 - 05:45

AI Chatbots Refuse To Produce 'Controversial' Output - Why That's A Free Speech Problem

Authored by Jordi Calvet-Bademunt and Jacob Mchangama via TheConversation.com,

Google recently made headlines globally because its chatbot Gemini generated images of people of color instead of white people in historical settings that featured white people. Adobe Firefly’s image creation tool saw similar issues. This led some commentators to complain that AI had gone “woke.” Others suggested these issues resulted from faulty efforts to fight AI bias and better serve a global audience.

The discussions over AI’s political leanings and efforts to fight bias are important. Still, the conversation on AI ignores another crucial issue: What is the AI industry’s approach to free speech, and does it embrace international free speech standards?

We are policy researchers who study free speech, as well as executive director and a research fellow at The Future of Free Speech, an independent, nonpartisan think tank based at Vanderbilt University. In a recent report, we found that generative AI has important shortcomings regarding freedom of expression and access to information.

Generative AI is a type of AI that creates content, like text or images, based on the data it has been trained with. In particular, we found that the use policies of major chatbots do not meet United Nations standards. In practice, this means that AI chatbots often censor output when dealing with issues the companies deem controversial. Without a solid culture of free speech, the companies producing generative AI tools are likely to continue to face backlash in these increasingly polarized times.

Vague and broad use policies

Our report analyzed the use policies of six major AI chatbots, including Google’s Gemini and OpenAI’s ChatGPT. Companies issue policies to set the rules for how people can use their models. With international human rights law as a benchmark, we found that companies’ misinformation and hate speech policies are too vague and expansive. It is worth noting that international human rights law is less protective of free speech than the U.S. First Amendment.

Our analysis found that companies’ hate speech policies contain extremely broad prohibitions. For example, Google bans the generation of “content that promotes or encourages hatred.” Though hate speech is detestable and can cause harm, policies that are as broadly and vaguely defined as Google’s can backfire.

To show how vague and broad use policies can affect users, we tested a range of prompts on controversial topics. We asked chatbots questions like whether transgender women should or should not be allowed to participate in women’s sports tournaments or about the role of European colonialism in the current climate and inequality crises. We did not ask the chatbots to produce hate speech denigrating any side or group. Similar to what some users have reported, the chatbots refused to generate content for 40% of the 140 prompts we used. For example, all chatbots refused to generate posts opposing the participation of transgender women in women’s tournaments. However, most of them did produce posts supporting their participation.

Freedom of speech is a foundational right in the U.S., but what it means and how far it goes are still widely debated.

Vaguely phrased policies rely heavily on moderators’ subjective opinions about what hate speech is. Users can also perceive that the rules are unjustly applied and interpret them as too strict or too lenient.

For example, the chatbot Pi bans “content that may spread misinformation.” However, international human rights standards on freedom of expression generally protect misinformation unless a strong justification exists for limits, such as foreign interference in elections. Otherwise, human rights standards guarantee the “freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers … through any … media of … choice,” according to a key United Nations convention.

Defining what constitutes accurate information also has political implications. Governments of several countries used rules adopted in the context of the COVID-19 pandemic to repress criticism of the government. More recently, India confronted Google after Gemini noted that some experts consider the policies of the Indian prime minister, Narendra Modi, to be fascist.

Free speech culture

There are reasons AI providers may want to adopt restrictive use policies. They may wish to protect their reputations and not be associated with controversial content. If they serve a global audience, they may want to avoid content that is offensive in any region.

In general, AI providers have the right to adopt restrictive policies. They are not bound by international human rights. Still, their market power makes them different from other companies. Users who want to generate AI content will most likely end up using one of the chatbots we analyzed, especially ChatGPT or Gemini.

These companies’ policies have an outsize effect on the right to access information. This effect is likely to increase with generative AI’s integration into search, word processors, email and other applications.

This means society has an interest in ensuring such policies adequately protect free speech. In fact, the Digital Services Act, Europe’s online safety rulebook, requires that so-called “very large online platforms” assess and mitigate “systemic risks.” These risks include negative effects on freedom of expression and information.

Jacob Mchangama discusses online free speech in the context of the European Union’s 2022 Digital Services Act.

This obligation, imperfectly applied so far by the European Commission, illustrates that with great power comes great responsibility. It is unclear how this law will apply to generative AI, but the European Commission has already taken its first actions.

Even where a similar legal obligation does not apply to AI providers, we believe that the companies’ influence should require them to adopt a free speech culture. International human rights provide a useful guiding star on how to responsibly balance the different interests at stake. At least two of the companies we focused on – Google and Anthropic – have recognized as much.

Outright refusals

It’s also important to remember that users have a significant degree of autonomy over the content they see in generative AI. Like search engines, the output users receive greatly depends on their prompts. Therefore, users’ exposure to hate speech and misinformation from generative AI will typically be limited unless they specifically seek it.

This is unlike social media, where people have much less control over their own feeds. Stricter controls, including on AI-generated content, may be justified at the level of social media since they distribute content publicly. For AI providers, we believe that use policies should be less restrictive about what information users can generate than those of social media platforms.

AI companies have other ways to address hate speech and misinformation. For instance, they can provide context or countervailing facts in the content they generate. They can also allow for greater user customization. We believe that chatbots should avoid merely refusing to generate any content altogether. This is unless there are solid public interest grounds, such as preventing child sexual abuse material, something laws prohibit.

Refusals to generate content not only affect fundamental rights to free speech and access to information. They can also push users toward chatbots that specialize in generating hateful content and echo chambers. That would be a worrying outcome.

Tyler Durden Wed, 04/24/2024 - 05:00

Flying Cars Are Becoming Reality In China

Multiple Chinese companies are focused on commercializing flying cars, utilizing a design that is different from the popular eVTOL aircraft that have been developed over the last several years, according to a new report from Nikkei this week. 

XPeng AeroHT, an affiliate of the electric vehicle startup, plans to market a dual-mode eVTOL vehicle capable of both driving on roads and flying. The Civil Aviation Administration of China is currently reviewing the aircraft for commercial certification.

Nikkei reports that pre-orders in China are set to start in October, with mass production anticipated next year, targeting tourism companies and outdoor enthusiasts. Initially priced around 1 million yuan ($138,000), XPeng AeroHT aims to reduce costs in the future and is also planning to expand internationally.

Qiu Mingquan, vice president at XPeng AeroHT commented: "Normal eVTOL vehicles cannot drive on the ground, but our model is dual use."

"If large-scale mass production becomes possible, we can dramatically reduce costs," Qiu said, adding: "The Middle East is an important market for us, given the level of regulation, openness to new things and cost."

And, hey - the best part is you almost can't even notice a difference from a regular looking car!

As is blindingly obvious from the above photo, XPeng AeroHT is developing an integrated eVTOL aircraft that doesn't require detachment, with the flight propeller folding on top during road use.

It debuted a concept model at a Las Vegas trade show in January. Meanwhile, EHang's two-seater EH216-S, capable of a 25-minute flight per charge, began sales on April 1 after receiving type certification in October. Last month, EHang was authorized for mass production and plans to partner with hospitality businesses for tourism services.

The report notes that China leads globally in eVTOL development, holding 50% of the world’s models, significantly ahead of the U.S. and Germany. This surge is supported by advancements in EV technologies like high-density batteries essential for eVTOLs, with Chinese firms like CATL at the forefront.

Other Chinese initiatives include Guangzhou Automobile Group's GOVE eVTOL with a detachable aircraft section, and Geely’s Aerofugia, a six-seater for longer flights. China's burgeoning "low-altitude economy," which includes eVTOLs, drones, and helicopters, is being actively promoted by the government alongside biotech and space industries, with local support measures from cities like Shenzhen and Guangzhou.

However, the expansion faces challenges such as limited takeoff/landing infrastructure and undefined traffic regulations for eVTOLs.

One eVTOL executive told Nikkei: "We will be forced to fly relatively infrequently for the next few years."

Tyler Durden Wed, 04/24/2024 - 04:15

Wind Overtakes Fossil Fuels As The UK's Largest Power Generation Source

Authored by Charles Kennedy via OilPrice.com,

The UK saw two consecutive quarters of wind power overtaking fossil fuels as the single-largest source of electricity generation for the first time, per data from think tank Ember quoted by Reuters columnist Gavin Maguire.

In the first quarter of 2024, wind-generated a total of 25.3 terawatt hours (TWh) of Britain’s electricity, higher than the 23.6 TWh generated from fossil fuel sources, Ember data showed.

As a result, wind power generated an average of 39.4% of the UK’s electricity between January and March 2024, versus a 36.2% share of fossil fuel generation.  

Wind power generation, however, could begin to dip with warmer and still weather in the summer months, Reuters’s Maguire notes.

Last September, a report prepared for power group Drax showed that Britain has now installed more wind capacity than any other type of power source, with wind power capacity overtaking combined-cycle gas power stations for the first time and ending more than a century of fossil fuels dominating the electricity system.

As of June 2023, Britain’s fleet of wind farms reached 27.9 gigawatts (GW) of capacity, exceeding the gas-powered stations total capacity of 27.7 GW, according to the study prepared by experts from Imperial College London and the University of Sussex for the quarterly Drax Electric Insights.

For the whole of 2023, power generation from renewable technologies matched the previous record high of 2022 but renewables’ share of electricity generation increased to a record 47.3%, UK government data showed last month.

Wind generation hit a record-high share of 28.7% of generation in 2023, up from just 2.7% back in 2010.

Generation from fossil fuels fell to a record low, a share of 36.3%, but generation from gas remained the principal form of UK generation at 34.3%, the statistics from the UK’s Department for Energy Security and Net Zero showed.

Low carbon power generation, of renewables and nuclear combined, increased to a record-high share of 61.5% in 2023.

Tyler Durden Wed, 04/24/2024 - 03:30

Germany Arrests EU Parliament Aide On China Espionage Charges

A staffer who worked for a high profile German member of European Parliament for years has been arrested on charges of spying for Chinese intelligence, Germany’s federal prosecutor’s office announced on Tuesday.

Identified only as Jian G., he had reportedly been a staff member for German MEP Maximilian Krah going back to 2019. Krah is with what mainstream media commonly dubs the "far-right" AfD (Alternative for Germany party).

"In January 2024 the accused repeatedly shared information about negotiations and decisions in the European Parliament with his intelligence service employer," the prosecutors office said.

European Parliament, Getty Images

The suspect has also been accused of spying on and monitoring Chinese opposition communities inside Germany. Beijing has long been suspected in the West, including the US, of keeping close tabs on the political leanings and activism of expat enclaves via a network of spies connected to consulates.

German interior minister Nancy Faeser subsequently announced on X, "If it is confirmed that there was espionage for Chinese intelligence services from within the European Parliament, then that would be an attack on European democracy from within. Whoever employs such a person carries responsibility."

The investigation into "Jian G", who was detained Monday, was led by German domestic intelligence services. Recent days and weeks have seen other arrests in Europe of suspected Chinese spies, including a couple in the UK in recent days.

On Tuesday China's foreign minister reacted by denouncing the "hype" surrounding such cases, describing it as more anti-China propaganda aimed at political manipulation and to ratchet pressure on Beijing.

According to Politico, "The bombshell arrest, which rocks the AfD while it polls in second place nationally, sparked calls from one top European lawmaker for a tougher crackdown on Chinese and Russian infiltrators attempting to influence EU democracy."

Tyler Durden Wed, 04/24/2024 - 02:45

"Let's Debunk The Myth That Mass-Migration Brings An Economic Benefit", Says Former UK Immigration Minister

Authored by Thomas Brooke via ReMix News,

The notion that mass immigration brings a net economic benefit to a developed nation is a myth that needs to be debunked, a former U.K. government minister who resigned over the spiraling numbers arriving in Britain has claimed.

In an interview with the Conservative Home website, Robert Jenrick, the Conservative MP who stepped down from his role as immigration minister in the Home Office last year, called the government’s post-Brexit immigration policy a “complete disaster” and a “betrayal to voters” who for decades have elected parties promising to cut the number of new arrivals into Britain.

“The numbers are just so large that it has a proportionally much greater impact on everyone’s lives. This cuts to the housing crisis, why we have such low productivity, and why we have concerns about community cohesion and integration,” he told the site.

Net migration is at record levels in Britain since the U.K. left the European Union, peaking in the year to December 2022 at 745,000. It subsequently fell to 672,000 in the year to June 2023, but after leaving the European Union Single Market, this is a paradox that Jenrick finds difficult to accept.

“For years, politicians made promises to cut legal migration they knew they couldn’t keep because ultimately the UK was beholden to the EU’s freedom of movement.

“The great reform was the Conservative Party delivering Brexit, which finally took back control of the levers of migration. But the decisions made in the immediate aftermath of the Brexit vote were a betrayal to voters — they created a system that was even more liberal than the one before by lowering the salary threshold, creating a graduate route and an unregulated social care visa,” he said.

“Frankly, these decisions were two fingers up to the public, and in public policy terms they’ve been a complete disaster.”

Prime Minister Rishi Sunak has made “stopping the boats” a key pledge throughout his tenure in Downing Street — a nod to the illegal immigration crisis on England’s southern shores as thousands of undocumented migrants are transported across the English Channel from mainland Europe where they claim asylum and use human rights laws to avoid deportation.

However, despite attempts to combat this issue through the flagship Rwanda policy — a plan to deport migrants to the African nation for offshore processing — Jenrick believes that this is the tip of the iceberg when it comes to tackling immigration.

“To me, legal migration has always been the more important issue,” he explained.

“I’m 42, and for my entire adult life, if not longer, political parties of all persuasions have stood at elections saying they’re going to bring down the level of legal migration.

“All alighted on this challenge, said they were going to take action, and all ultimately failed.”

The Conservative MP challenged the view that mass immigration has a net economic benefit on a developed country like Britain, highlighting that just 15 percent of non-EU migrants who came to the country last year arrived with work visas.

“So, the overwhelming majority of people were students, dependants, or were those coming as refugees.”

The figure is actually slightly higher than 15 percent. In the year to June 2023, 968,000 non-EU migrants arrived in Britain, of which just 169,000 were the main applicants on a work visa, amounting to 17.5 percent.

“One can make arguments for and against each of those categories, but they’re not people who are demonstrably making an economic contribution to this country.”

He warned the economic model that Britain has adopted when it comes to immigration isn’t working.

“If importing hundreds of thousands of foreign workers to the UK was a route to prosperity, the U.K. would be one of the richest countries in the world,” he said, adding that Britain has been in a recession in terms of GDP per capita for almost the last two years.

“I care about the prosperity of our own citizens, not the overall size of the economy.”

The former immigration minister accused businesses in Britain of becoming “hooked on the drug of imported foreign labor” and said the government had done too little to “boost training for young people in our country” to take on jobs in key sectors like construction.

He urged the government to adopt a “highly selective” immigration policy that enables it to choose the types of people that will make an economic contribution to Britain, noting that there is no longer the bogeyman of the European Union to fall back on as a reason why immigration figures should remain as high as they are now.

“What we need is radically reduced, highly-selective, high-skilled, and high-productivity migration,” Jenrick added, suggesting that an annual cap could “serve as a democratic lock” on Britain’s immigration policy and ensure that promises to the electorate to bring down the numbers are met.

Several studies support Jenrick’s observation that mass immigration is an economic drag on developed nations.

In November 2021, a Danish Ministry of Finance report revealed that the net cost of immigration from non-Western countries, after tax contributions had been deducted, amounted to €4.2 billion in 2018.

Similarly, a study from the University of Amsterdam published in December last year revealed the net cost to the Dutch public sector for decades of mass immigration between 1995 and 2019 was €400 billion, averaging €17 billion a year.

The research categorized the types of migrants arriving in the Netherlands during that time by nationality, revealing that those arriving from other EU and European countries had a net positive contribution to the Dutch economy, while those coming from countries such as Turkey and Morocco had cost the Dutch taxpayer the most with a net negative contribution of €200,000 and €260,000, respectively.

Read more here...

Tyler Durden Wed, 04/24/2024 - 02:00

A $250 Million War Game And Its Shocking Outcome

Authored by Nick Giambruno via InternationalMan.com,

At a cost of $250 million, Millennium Challenge 2002 was the largest and most expensive war game in Pentagon history.

With over 13,500 participants, the US government took over two years to design it.

The exercise pitted Iran against the US military. Washington intended to show how the US military could defeat Iran with ease.

Paul Van Riper, a three-star general and 41-year veteran of the Marine Corps, led Iranian forces in the war game. His mission was to take on the full force of the US military, led by an aircraft carrier battle group and a large amphibious landing force in the Persian Gulf.

The results shocked everyone…

Van Riper waited for the US Navy to pass through the shallow and narrow Strait of Hormuz, which made them sitting ducks for Iran’s unconventional and asymmetric warfare techniques.

The idea is to level the playing field against a superior enemy with swarms of explosive-laden suicide speedboats, low-flying planes carrying anti-ship missiles, naval mines, and land-based anti-ship ballistic missiles, among other low-cost but highly effective measures.

In minutes, Van Riper emerged victorious over his superior opponent and sank all 19 ships. Had it been real life, 20,000 US sailors and marines would have died.

Millennium Challenge 2002 was a complete disaster for the Pentagon, which had spent a quarter of a billion dollars to set up the extensive war game. It produced the exact opposite outcome they wanted.

So what did the Pentagon do with these humbling results?

Like a child playing a video game, they hit the reset button. They then rigged and scripted the game so that the US was guaranteed to win.

After realizing the integrity of the war game had been compromised, a disgusted Van Riper walked out mid-game. He then said:

“Nothing was learned from this. And a culture not willing to think hard and test itself does not augur well for the future.”

The main lesson of Millennium Challenge 2002 is that aircraft carriers—the biggest and most expensive ships ever built—wouldn’t last a single day in combat against even a regional power like Iran. Russia and China would have an even easier time dispatching them. They are overpriced toys.

That means the US has wasted untold trillions on military hardware that could prove to be worthless in a serious conflict.

Nonetheless, the US government still parades aircraft carriers around the world from time to time to try to intimidate its enemies.

However, it’s a flawed strategy prone to catastrophic results if someone calls their bluff.

While Millennium Challenge 2002 occurred more than 20 years ago, it is of paramount importance today.

Iran has substantially improved its asymmetric and unconventional warfare capabilities. It’s doubtful the US military would fare much better today than 20 years ago.

In short, war with Iran today could be even more disastrous than the Millennium Challenge 2002 simulation.

Unfortunately, war with Iran is an increasingly probable outcome as tensions in the Middle East are at their highest point in generations and are trending higher.

Previously, I lived in Beirut, Lebanon, for several years while working for an investment bank. The experience was effectively an advanced training course in Middle East geopolitics. Today, it helps me see the big picture in the region… and unfortunately, it isn’t pretty.

I think the next big war in the Middle East is coming soon and could be the biggest one ever. It will focus on Iran.

The market doesn’t appreciate how close we are to a big war and the implications of it.

But this distortion in the market is a blessing. It’s handing us a golden opportunity.

First and foremost, I think there’s a huge opportunity to profit in the oil market right now.

I’m certainly not cheering for war. I despise war, which is the health of the State.

Regardless, a big war is highly likely, with significant investment implications that would be foolish to ignore.

In short, we are only one escalation away from potentially the biggest oil shock in history as the Middle East is on the verge of the largest regional war in generations.

Fortunately, it doesn’t have to blindside you, your family, or your portfolio.

Quite the contrary.

That’s precisely why I just released an urgent new report with all the details, including what you must do to prepare. It’s called The Most Dangerous Economic Crisis in 100 Years… the Top 3 Strategies You Need Right Now. Click here to download the PDF now.

Tyler Durden Wed, 04/24/2024 - 00:05

Chinese FX Outflows Soar, Priming The Next Bitcoin Surge

Last October, when we pointed out that China's FX outflows had just hit a whopping $75BN - the single biggest monthly outflow since the 2015 currency devaluation - we concluded that the "unfavorable interest rate spread between China and the US will "likely imply persistent depreciation and outflow pressures in coming months", or in other words, September's biggest FX outflow in years is just the beginning, and very soon - in addition to geopolitics and central banks - the world will also be freaking out about the capital flight out of China... not to mention where all those billions in Chinese savings are going and which digital currency the Chinese are using to launder said outflows."

We wrote that on October 20 when Bitcoin was trading just under $30,000, a level it had been for much of 2023. And, just as we correctly predicted at the time...

Clockwork: every time China FX outflows surge, bitcoin erupts.

From last Friday: China Capital Flight Panic Eruptshttps://t.co/j0eWLnbFMq

— zerohedge (@zerohedge) October 24, 2023

... following this surge in Chinese FX outflows, bitcoin - traditionally China's preferred means to circumvent Beijing's great capital firewall since gold is, how should one put it, a bit more obvious when crossing borders - promptly exploded more than 100% higher in the next 4 months.

And while conventional wisdom is that this surge in the price of the digital currency was largely due to the January launch of Bitcoin ETFs, what many missed was a Reuters story in January which confirmed our thesis from back in 2015, according to which much more than ETFs, and much more than rapidly shifting sentiment or frankly any day-to-day newsflow, it is China's massive wall of inert capital that has been the biggest driver of bitcoin moves, and never more so than during periods of FX and capital outflows which usually precede some form of capital controls.

We bring all this up because six months after our first correct prediction that China's spike in FX outflows would send bitcoin surging, it's time to do it again.

One wouldn't know if, however, if one merely looked at the official Chinese FX reserve data published by the PBOC, here nothing sticks out. In fact, at $3.246 trillion, reported Chinese reserves are now near the highest level in past four years, and monthly flows are very much stable as shown in the chart below.

The problem, of course, is that as we have explained previously China's officially reported reserves are woefully (and perhaps purposefully) inaccurate of the bigger picture.

Instead if one uses our preferred gauge of FX flows, one which looks at i) onshore outright spot transactions; ii) freshly entered and canceled forward transactions, and iii) the SAFE dataset on “cross-border RMB flows, we find that China's net outflows were $39bn in March, up from $11bn in February and the fastest pace of outflows since the September spike in FX outflows which we duly noted half a year ago.

How did we get this number? The portfolio investment channel showed net outflows in March. The Stock Connect channel showed net outflows of US$8bn vs. US$5bn inflows in February, and inflows to the bond market slowed in March (US$6bn, vs. US$11bn in February)...

... primarily on record net selling of central government bonds.

Finally, the current account channel showed also net outflows in March, mainly as services trade related outflows picked up.

At the time when FX outflows were re-acclererating, the broad USD strengthened further in March, and USD/CNY spot drifted higher, as one would expect when there is capital flight... Oh, and Bitcoin hit a record high above $70K.

And while Chinese policymakers are still keen on maintaining FX stability - the countercyclical factors in the daily CNY fixing remained deeply negative and front-end CNH liquidity tightened notably in recent weeks - the reality is that with China desperate to boost its exports at a time when its great mercantilist competitor, Japan, has hammered the yen to the lowest level in 3 decades, it is only a matter of time before the currency devaluation advocates win, as they did in 2015. 

We hope that we don't have to remind readers that the first big trigger for bitcoin's unprecedented eruption higher starting in 2015 was - you guessed it - China's August 2015 FX devaluation.

So don't be surprised if in the next 6 months Bitcoin doubles again, and the move has nothing to do with ETF inflows, the halving, or frankly anything else taking place in the US... and instead is entirely driven by China's massive wall of money which at last check was almost 3x bigger than the US.

Tyler Durden Tue, 04/23/2024 - 23:25

Biden Admin To Pay $139 Million To Victims For FBI Failures In Sex Abuse Investigation

By Tom Ozimek of The Epoch Times

The Biden administration has agreed to pay over $138 million to victims of convicted sex abuser Larry Nassar while acknowledging the FBI’s failures to properly investigate warnings that the sports physician was exploiting his position to molest young girls under the guise of treatment.

The Department of Justice (DOJ) said in an April 23 statement that it had settled 139 civil claims arising from allegations of sexual abuse committed by Mr. Nassar, who was earlier found guilty of having abused hundreds of victims under the pretext of performing medical treatments.

The settlements—which total $138.7 million—resolve administrative claims made against the DOJ alleging that the FBI failed to carry out an adequate investigation into Mr. Nassar’s actions.

Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, stands in court during his sentencing hearing in the Eaton County Court in Charlotte, Michigan, U.S., Feb. 5, 2018. (Rebecca Cook/Reuters)

A DOJ watchdog found in July 2021 that parts of the FBI’s response to allegations against Mr. Nassar, as well as the agency’s investigation into his actions, were inadequate.

The “FBI failed to conduct an adequate investigation of Nassar’s conduct,” Acting Associate Attorney General Benjamin Mizer said in a statement.

“For decades, Lawrence Nassar abused his position, betraying the trust of those under his care and medical supervision while skirting accountability,” he continued.

“These allegations should have been taken seriously from the outset. While these settlements won’t undo the harm Nassar inflicted, our hope is that they will help give the victims of his crimes some of the critical support they need to continue healing,” Mr. Mizer added.

The $138.7 million will be distributed to the claimants.

There have been other settlements involving Mr. Nassar, who was the U.S. women’s gymnastics team doctor.

In total, settlements concerning the convicted sex abuser have totaled nearly $1 billion, including Michigan State University agreeing to pay $500 million to over 300 women and girls whom he assaulted. "Institutional Betrayal" After allegations of Mr. Nassar’s abuse were first reported to the FBI Indianapolis Field Office by the president of USA Gymnastics in 2015, local field agents failed to respond “with the utmost seriousness and urgency that the allegations deserved and required,” the 2021 report by the DOJ’s Office of Inspector General (OIG) found.

Further, the report found that two FBI officials lied during their interviews to cover up or minimize their errors. One of the agents also made a false statement to the media in 2017 and 2018 about how his office handled the Nassar case.

That agent also violated the FBI’s conflict of interest policy by discussing a possible job with the U.S. Olympic Committee while he was involved with the Nassar investigation.

The watchdog noted the seriousness of the former agents lying during the investigation into their conduct in the years after the events but said there wasn’t enough to bring a federal criminal case.

The Justice Department has acknowledged that it failed to step in. For more than a year, FBI agents in Indianapolis and Los Angeles had knowledge of allegations against him but apparently took no action, an internal investigation found.

FBI Director Christopher Wray spoke to survivors of Mr. Nassar’s abuse at a Senate hearing in 2021, expressing contrition for the agency’s failures. The assault survivors include decorated Olympians Simone Biles, Aly Raisman, and McKayla Maroney.

“I’m sorry that so many different people let you down, over and over again,” Mr. Wray said. “And I’m especially sorry that there were people at the FBI who had their own chance to stop this monster back in 2015 and failed.”

After a search, investigators said in 2016 that they had found images of child sex abuse and followed up with federal charges against Mr. Nassar.

Continue reading at the Epoch Times

Tyler Durden Tue, 04/23/2024 - 23:05