As reported by the Senate Committee on Foreign Relations on October 30, 2025

The post Why Is Healthcare Expensive? appeared first on CEPR.

US Manufacturing Surveys Mixed In October; Prices Down, Production Up

Amid the month-long vacuum of macro data, thanks to the shutdown, 'soft' survey data has become almost the only leg left standing to judge the economy by (absent the housing data).

Following better-than-expected prints across Europe, and beats in Brazil and Canada, this morning's S&P Global US Manufacturing PMI rose more than expected to 52.5 (52.2 exp), up from 52.0 - tracking hard data higher.

That signaled a third successive month that the S&P Global PMI has posted above the critical 50.0 no-change mark and indicative of a solid improvement in operating conditions that was in line with the survey’s trend pace.

The PMI was supported in October by concurrent and accelerated gains in both output and new orders.

Production was increased at a solid pace, whilst the gain in new orders was the best recorded in 20 months. Growth in new work has been registered consistently throughout the year to date, albeit to varying degrees, and panelists noted in October an uplift in market demand and success in securing new contracts. However, October’s growth was increasingly reliant on the domestic market as new export orders faltered.

BUT...

...as usual in the baffle 'em with bullshit world, ISM's US Manufacturing PMI missed expectations, falling from 49.1 to 48.7 (worse than the 49.5 exp) - the 8th straight month of contraction (below 50)

Source: Bloomberg

“US manufacturers reported a solid start to the fourth quarter with production rising at an increased rate in response to an encouragingly robust jump in new orders," according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

"However, lift the hood and the picture is not so healthy."

“Most worrying is the unprecedented rise in unsold stock reported in October, widely linked to weaker than anticipated sales to customers, especially in export markets, which could trigger a downshifting of production in the coming months unless demand revives.

Indeed, ISM shows prices falling fast and new orders and employment improving MoM (though both below 50 - contracting).

The index of prices paid for raw materials fell 3.9 points to 58, the lowest since the start of the year. Since a recent peak in April, during the height of the tariffs rollout, the price gauge has dropped nearly 12 points...

Source: Bloomberg

Companies have also become less optimistic about the year ahead, with sentiment back down close to the gloomy levels seen around the April tariff announcements.

"US trade policy uncertainties are again a big factor in dampening business spirits, with tariff policies being increasingly blamed both on rising export losses and import supply chain disruptions.

These export and import worries are being exacerbated by more domestically focused political concerns, including the federal shutdown, which are manifesting themselves most prominently in consumer-focused industries."

Tariffs remained a key source of higher input costs during October with S&P Global's latest data showing another round of historically elevated inflation – albeit the lowest since February.

Selling prices were raised markedly in response, and to a quicker degree than September’s recent low.

Finally, Williamson notes that business confidence among producers of consumer goods is now down to its lowest for two years "as firms growing increasingly worried about household spending in the US and falling sales to consumers in export markets."

Tyler Durden Mon, 11/03/2025 - 10:06

(Posted with permission). The ISM manufacturing index indicated contraction. The PMI® was at 48.7% in October, down from 49.1% in September. The employment index was at 46.0%, up from 45.3% the previous month, and the new orders index was at 49.4%, up from 48.9%.

From ISM: Manufacturing PMI® at 48.7% October 2025 ISM® Manufacturing PMI® Report

Economic activity in the manufacturing sector contracted in October for the eighth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

“The Manufacturing PMI® registered 48.7 percent in October, a 0.4-percentage point decrease compared to the reading of 49.1 percent recorded in September. The overall economy continued in expansion for the 66th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for the second month in October following one month of growth; the figure of 49.4 percent is 0.5 percentage point higher than the 48.9 percent recorded in September. The October reading of the Production Index (48.2 percent) is 2.8 percentage points lower than September’s figure of 51 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 58 percent, down 3.9 percentage points compared to the reading of 61.9 percent reported in September. The Backlog of Orders Index registered 47.9 percent, up 1.7 percentage points compared to the 46.2 percent recorded in September. The Employment Index registered 46 percent, up 0.7 percentage point from September’s figure of 45.3 percent.
emphasis added

This suggests manufacturing contracted for the eighth consecutive month in October..  This was below the consensus forecast, and employment was weak and prices very strong.

​​​​​​​Amazon & OpenAI Strike $38 Billion Compute Deal As Microsoft Exclusive Ends

The circular AI funding headline arrived 30 minutes ahead of the U.S. cash session.

And the circular funding headlines arrive

*AMAZON INKS $38 BILLION DEAL WITH OPENAI TO SUPPLY NVIDIA CHIPS

— zerohedge (@zerohedge) November 3, 2025

This time, Amazon shares jumped 6%, extending last week's post-earnings rally after news broke of a massive $38 billion deal between Amazon Web Services (AWS) and OpenAI.

*AMAZON JUMPS 6.1% ON DEAL TO SUPPLY OPENAI WITH NVIDIA CHIPS https://t.co/hubchYVq5T

— zerohedge (@zerohedge) November 3, 2025

The seven-year contract will see OpenAI run and scale its core AI workloads on AWS's cloud infrastructure, an agreement that takes effect immediately and positions AWS as a key compute provider for OpenAI's expanding portfolio of generative-AI products, including ChatGPT.

The AWS-OpenAI deal comes just one week after Microsoft's exclusive cloud rights with OpenAI expired, freeing up Sam Altman's AI chatbot startup to sign compute deals with other hyperscalers. 

Amazon said the new partnership will provide dedicated compute capacity for both AI training and inference, powering next-generation models and ChatGPT-like services:

The infrastructure deployment that AWS is building for OpenAI features a sophisticated architectural design optimized for maximum AI processing efficiency and performance. Clustering the NVIDIA GPUs—both GB200s and GB300s—via Amazon EC2 UltraServers on the same network enables low-latency performance across interconnected systems, allowing OpenAI to efficiently run workloads with optimal performance. The clusters are designed to support various workloads, from serving inference for ChatGPT to training next generation models, with the flexibility to adapt to OpenAI's evolving needs.

OpenAI has been on a dealmaking spree, signing cloud and hardware pacts totaling a staggering $1.4 trillion with Nvidia, Broadcom, Oracle, and Google as AI data center bubble concerns mount.

ZeroHedge Premium subs have been informed about how these circular flowing deals work, described in a recent note titled The Stunning Math Behind The AI Vendor Financing "Circle Jerk"...

"OpenAI will immediately start utilizing AWS compute as part of this partnership, with all capacity targeted to be deployed before the end of 2026, and the ability to expand further into 2027 and beyond," Amazon wrote in a statement. 

The deal highlights AWS's large-scale AI infrastructure and brings it closer to frontier model developers, including clients such as Peloton, Thomson Reuters, Comscore, and Triomics. 

OpenAI co-founder and CEO Sam Altman stated, "Scaling frontier AI requires massive, reliable compute," adding, "Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone." 

However, doesn't Amazon need all these vast computing resources for its own operations, yet in this case, it serves as a seller of computing capacity... 

In recent weeks, Goldman's James Schneider told clients, "The net impact of our model updates extends the duration of peak datacenter occupancy well into 2026 (from the end of 2025 previously). After this point, we forecast a modest, but gradual loosening of supply/demand balance in 2027..."

Is this GS model wrong, and peak datacenter occupancy comes much earlier? 

Related: 

• OpenAI-Microsoft Friction Grows As ChatGPT App Growth Slows, Data Center Buildout Risks Overcapacity

The AWS-OpenAI compute deal was enough to send Amazon shares up 5% in the early cash session in New York, building on gains from last week's earnings. 

It's only a matter of time before another AI compute deal is unveiled ... you can almost guarantee it'll happen when AI stocks start to lose momentum ... like clockwork. 

Tyler Durden Mon, 11/03/2025 - 09:50

As reported by the Senate Committee on Foreign Relations on October 30, 2025

Putin And Xi Are 'Serious People' & 'Not To Be Toyed With': Trump Interview

President Trump offered some candid and revealing thoughts on his Russian and Chinese counterparts Vladimir Putin and Xi Jinping during a CBS 60 Minutes interview which aired Sunday.

Trump has not appeared on the program in a half-decade, but had much to say, especially regarding America's two top 'superpower' rivals. He called Putin and Xi "very strong leaders" who are "tough" and "smart" but which are "not to be toyed with."

AFP/Getty Images

When asked which of the two was more difficult to deal with, Trump replied "both". He described they are "Both tough. Both smart. They’re both very strong leaders. These are people not to be toyed with" - and seemed conciliatory without going on the verbal attack.

He followed with more commentary which suggested a high degree of respect for them as leaders. "They’re serious people, not the type to walk in talking about how nice the weather is," Trump conceded.

Trump also in the interview took the opportunity to reiterate that the Russia-Ukraine war would never have occurred under his leadership.

"That was a war that would’ve never happened if I was president," he said, and then noted Putin had himself acknowledged this. "I inherited a country where Putin thinks he’s winning. Joe Biden was the president when it happened."

It was at this point in the interview that Trump said he has "a very good relationship" with Putin while expressing hope that the US-Moscow relations can be turned around.

Despite setbacks, including the effective cancelation of the Budapest summit, Trump expressed he hopes to get a lasting truce in Ukraine "in a couple months" - though battlefield realities suggest this remains wishful thinking and not based in any solid developments toward peace or compromise.

"We’re gonna get it done… [Putin] wants to come in and he wants to trade with us, and he wants to make a lot of money for Russia, and I think that’s great," Trump said.

As for China, one notable moment was addressing rare-earth minerals and potential tit-for-tat amid a trade war. "We got no rare-earth threat… We have tremendous amounts of dollars pouring in, because we have very big tariffs, almost 50%," Trump explained.

Russian media has been taking note...

'Putin & Xi NOT to be toyed with' — Trump pic.twitter.com/PpS6bdjdUZ

— RT (@RT_com) November 3, 2025

This rhetoric from the president in the 60 Minutes interview seems a marked change compared to that of early September, wherein he said the following:

President Donald Trump accused Chinese President Xi Jinping on Tuesday of "conspiring against" the United States as North Korean leader Kim Jong Un and Russian President Vladimir Putin attended China's military parade commemorating the end of World War II and victory over Japan.

"May President Xi and the wonderful people of China have a great and lasting day of celebration. Please give my warmest regards to Vladimir Putin, and Kim Jong Un, as you conspire against The United States of America," Trump wrote on Truth Social.

Still, the general vibe and tone of the fresh CBS appearance seemed a return to Trump as 'peace president' who is more interested in major deal-making around the globe as opposed to starting conflicts. However, we should note that Venezuela would certainly not agree with such a characterization of Washington policy at this point.

Tyler Durden Mon, 11/03/2025 - 09:15

Altos reports that active single-family inventory was down 1.3% week-over-week.  Inventory usually starts to decline in the fall and then declines sharply during the holiday season.
The first graph shows the seasonal pattern for active single-family inventory since 2015.
Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  
Inventory was up 16.5% compared to the same week in 2024 (last week it was up 17.9%), and down 6.2% compared to the same week in 2019 (last week it was down 6.5%). 
Inventory started 2025 down 22% compared to 2019.  Inventory has closed more most of that gap, but it appears inventory will still be below 2019 levels at the end of 2025.
This second inventory graph is courtesy of Altos Research.
As of October 31st, inventory was at 857 thousand (7-day average), compared to 868 thousand the prior week.  
Mike Simonsen discusses this data and much more regularly on YouTube

My back-to-work morning train WFH reads:

• The origin of Daylight Saving Time is all about business — not farmers: Farmers actually hated Daylight Saving Time. But it was and always has been good for one thing: selling stuff. (Quartz)

• How your cognitive biases lead to terrible investing behaviors: “Let me walk you through the biggest traps that you should be aware of that are a danger to your financial wellbeing.” (Big Think)

• Why Is Everything Turning into a Casino? I share seven rules of casino management—see how many apply now to legit businesses. (The Honest Broker)

• Why we are not in a bubble… yet: History suggests that bubbles are often driven by exuberance that builds around a transformative technology, attracting investors, capital and new entrants. Typically, bubbles exhibit rapidly rising asset prices, extreme valuations and significant systemic risks driven by increased leverage. (Goldman Sachs)

• How Affluent Investors Are Using Options Math to Borrow on the Cheap: Box spread loans, also called synthetic borrowing, require sizable portfolios to back them and offer speed, flexibility, and often a lower cost than traditional bank credit, plus potential tax advantages. The approach is catching on among wealth advisers, with SyntheticFi bringing on over 100 financial advisers to guide clients through the process, and Vest Financial launching its synthetic-borrow platform, which delivers institutionally priced financing to the retail market. (free)(Bloomberg)

• Senate passes bill to nullify Trump’s sweeping global tariffs on more than 100 nations: Vote passes 51-47 in latest bipartisan effort to challenge tariffs, but House is unlikely to take any similar action. (The Guardian)

• We Spent the Night Shift With the Repo Man, Who Is Busier Than Ever: Car repossessions are on the rise as delinquency rates on some auto loans hit record levels; drivers hunt for cars and opportunity as business model shifts. (Wall Street Journal)

• Analysis of 150 U.S. Cities Shows One of the Greatest Drops in Gun Violence — Ever: The downward trend cuts across red and blue cities and states in every region of the country. A steep spike beginning in 2020 or slightly after, coinciding with the peak of the COVID-19 pandemic and Black Lives Matter protests. Then, a similarly high number of shootings in 2022, followed by steep decreases from 2023 on. Cities like Detroit and Philadelphia are now seeing the lowest rates of gun violence in decades. (The Trace)

• New evidence reveals dinosaurs were thriving right up to the moment the asteroid hit: Newly dated fossils from New Mexico challenge the idea that dinosaurs were in decline—and suggest instead they had formed flourishing communities. (National Geographic) see also A ferocious debate over teenage T. rex fossils may finally be settled: For decades, paleontologists debated whether fossils were of a young T. rex or a species called nanotyrannus. A new study settles it: Nanotyrannus is real. (Washington Post)

• Everybody Wants This! How a Netflix Rom-Com Went From Near Implosion to Cultural Obsession From a first season of scrapped scripts and sparring producers to a hit crackling with chemistry: The cast and creator of ‘Nobody Wants This’ reveal the backstory of fall’s most anticipated return. (Hollywood Reporter)

Be sure to check out our Masters in Business interview  this weekend with Jon Hilsenrath of Serpa Pinto Advisory. Previously, he was chief economics correspondent for Wall Street Journal for 26 years. Dubbed the “Fed Whisperer” by Wall Street traders for his scoops on the FOMC, he worked out of Hong Kong, NY, and D.C. He was part of the Pulitzer Prize-winning team for on-scene coverage of 9/11.  He is the author of “Yellen: The Trailblazing Economist Who Navigated an Era of Upheaval.”

 

Is it really a bubble?

Source: Financial Times

 

Sign up for our reads-only mailing list here.

 

 

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

Nigerian President Responds To Trump's Call For Military Action Against Christian Persecution

Authored by Jack Phillips via The Epoch Times (emphasis ours),

The Nigerian government on Sunday responded to a warning from U.S. President Donald Trump that the United States could take military action in the African nation if its government does not more to curb the persecution of Christians there by Islamic terrorists.

Nigerian President Bola Ahmed Tinubu attends an ECOWAS meeting in Abuja, Nigeria, on June 22, 2025. Olamikan Gbemiga/AP Photo

“We welcome U.S. assistance as long as it recognizes our territorial integrity,” Daniel Bwala, an adviser to Nigerian President Bola Tinubu, told Reuters.

On Saturday, Tinubu rejected accusations of religious persecution against Christians and defended Nigeria’s “sincere efforts” to protect religious freedom.

“The characterization of Nigeria as religiously intolerant does not reflect our national reality, nor does it take into consideration the consistent and sincere efforts of the government to safeguard freedom of religion and beliefs for all Nigerians,” Tinubu said in a statement released on X. “Religious freedom and tolerance have been a core tenet of our collective identity and shall always remain so. Nigeria opposes religious persecution and does not encourage it.”

He also said Nigeria is a country that also has “constitutional guarantees to protect citizens of all faiths,” adding that his government will work with the United States on this matter.

In a Saturday post on Truth Social, Trump stated that Islamic terrorists were carrying out mass killings of Christians and that the religion is “facing an existential threat” in the West African country.

“If the Nigerian Government continues to allow the killing of Christians, the U.S.A. will immediately stop all aid and assistance to Nigeria, and may very well go into that now disgraced country, ‘guns-a-blazing,’ to completely wipe out the Islamic Terrorists who are committing these horrible atrocities,” the president said. “I am hereby instructing our Department of War to prepare for possible action.”

He added: “WARNING: THE NIGERIAN GOVERNMENT BETTER MOVE FAST!”

Defense Secretary Pete Hegseth responded to Trump’s post, writing that “the killing of innocent Christians in Nigeria—and anywhere—must end immediately.”

“The Department of War is preparing for action. Either the Nigerian Government protects Christians, or we will kill the Islamic Terrorists who are committing these horrible atrocities.”

For years, human rights groups such as Amnesty International have warned that the Nigeria-based Boko Haram terrorist group and similar organizations have launched attacks and kidnappings targeting civilians namely in the northeastern part of Nigeria.

Boko Haram, which has previously explicitly stated that it is targeting Christians and churches, has killed at least 50,000 Christians in the country since its insurgency began in 2009, according to a 2023 report from the International Society for Civil Liberties and Rule of Law. Aside from Boko Haram, terrorist organization Islamic State West Africa Province has also launched attacks in the country.

Some analysts have said that Boko Haram also targets Muslims but says that it seeks to attack Christians as a cover because northeastern Nigeria is predominantly Muslim.

“Insurgent groups such as Boko Haram and Islamic State West Africa often present their campaigns as anti-Christian, but in practice their violence is indiscriminate and devastates entire communities,” Ladd Serwat, senior Africa analyst at U.S. crisis-monitoring group Armed Conflict Location and Event Data (ACLED), told Reuters. “Islamist violence is part of the complex and often overlapping conflict dynamics in the country” due to multiple issues, including political power struggles and inter-ethnic conflicts, he added.

Trump’s call for military action to end the persecution of Christians drew praise from some celebrities, including pop star Nicki Minaj. She released a lengthy statement on X praising the president’s promise to protect Christians in Nigeria.

Open Doors, a group that monitors the persecution of Christians worldwide, says that the worst offender is North Korea, which is run by a communist dictatorship, followed by Somalia, Yemen, Libya, and Sudan.

The Chinese communist regime also ranks high on Open Doors’ list, and the International Republican Institute recently released a report regarding religious freedom in China in mid-October, saying that “Christian ministers are imprisoned for refusing to conform to [Chinese Communist Party] ideology, and public access to the Bible is banned,” alongside the persecution of other groups such as Tibetan Buddhists and Falun Gong practitioners.

Reuters contributed to this report.

Tyler Durden Mon, 11/03/2025 - 06:30

Anduril's YFQ-44 Fury "Fighter" Drone Has Flown

By Joseph Trevithick of The War Zone

Anduril’s YFQ-44A ‘fighter drone’ prototype has now made its maiden flight. The YFQ-44A is one of two designs currently being developed under the first phase, or Increment 1, of the U.S. Air Force’s Collaborative Combat Aircraft (CCA) program. The other is General Atomics’ YFQ-42A, which took to the skies for the first time earlier this year.

A TWZ reader has shared pictures with us of the YFQ-44A in flight, which were taken earlier today at Southern California Logistics Airport in Victorville, California. The drone was also seen accompanied by two L-29 Delfin trainer jets acting as chase planes. We have reached out to Anduril for more information.

The YFQ-44A Fury prototype seen in flight in Victorville, California, earlier today. TWZ ReaderThe YFQ-44A prototype seen flying alongside an L-29 chase plane. TWZ reader.

Additional imagery of the YFQ-44A in flight is now beginning to circulate online.

Last year, the Air Force announced that it trimmed back the field of prospective Increment 1 CCA designs to the proposals from Anduril and General Atomics. However, Fury’s story traces back to the late 2010s and an aggressor drone concept from a company called Blue Force Technologies, which Anduril acquired in 2023, as you can read about in extensive detail in this past War Zone feature.

“This marks another major milestone for the CCA program, now with two new uncrewed fighter aircraft going from concept to flight in less than 2 years,” the Air Force has now said in a press release confirming the YFQ-44A’s first flight. “This flight testing expands the program’s knowledge base on flight performance, autonomous behaviors, and mission system integration. By advancing multiple designs in parallel, the Air Force is gaining broader insights and refining how uncrewed aircraft will complement crewed fifth-and sixth-generation platforms in future mission environments.”

Another look at the YFQ-44A in flight.  Photo USAF

“This milestone demonstrates how competition drives innovation and accelerates delivery,” Secretary of the Air Force Troy Meink said in a statement. “These flights are giving us the hard data we need to shape requirements, reduce risk, and ensure the CCA program delivers combat capability on a pace and scale that keeps us ahead of the threat.”

Anduril and the Air Force had previously declined to provide a hard timeline for when the YFQ-44A would make its first flight.

“We have multiple vehicles at our test facility in ground testing right now, and we’re in the final stages before first flight,” Diem Salmon, Anduril’s Vice President of Air Dominance and Strike, had told TWZ and others at the Air & Space Forces Association’s 2025 Air, Space, and Cyber Conference back in September. “All in all, we’re still well ahead of the program schedule in terms of getting YFQ-44A into the air. [We] feel really confident in our ability to do so and still feel really good about the program schedule.”

At that time, Salmon, as well as Jason Levin, Anduril’s Senior Vice President of Engineering for Air Dominance and Strike, offered additional details about the plans for Fury’s first flight, including the level of autonomy the company was hoping to demonstrate, which was a key schedule driver. You can read more about that here.

“It was not a race to get to first flight as fast as humanly possible. It was, how do we field this really advanced and novel capability as fast as we can,” Salmon had said. “And with that comes the recognition that the autonomy is the hard part here, and so that’s the thing that you actually need to burn down from a technical development, testing, and risk perspective. And so that’s how we’ve approached our program.”

Secretary of the Air Force Meink had also told TWZ and others at a separate roundtable at the Air, Space, and Cyber Conference that his service was hoping to see the YFQ-44A fly by the middle of October. In a keynote address at the event, now-retired Air Force Chief of Staff Gen. David Allvin described Fury’s first flight as “imminent,” as well.

“My engineers tell me that if we push the button … [the drone] will take off, it’ll fly around, and it’ll come back home,” Anduril founder Palmer Luckey had also told reporters earlier this month, according to Breaking Defense. “The Air Force is going through a process of evaluation that is very, very reasonable, I think.”

“Obviously, now the problem is we’re into the shutdown,” Luckey added at that time. “Certainly … a lot of stuff stops moving.”

The U.S. federal government remains in a shutdown. Efforts have been made to find continued funding for various priority efforts, especially within the U.S. military.

With the YFQ-42A and the YFQ-44A now flying, “developmental flight activities continue across both vendor and government test locations, including Edwards Air Force Base [AFB], where envelope expansion and integration work will inform future experimentation,” according to the Air Force’s press release today. “The Air Force’s Experimental Operations Unit (EOU), located at Nellis AFB, will be instrumental in evaluating operational concepts as the program transitions from testing to fielding substantial operational capability for Increment 1 before the end of the decade.”

General Atomics YFQ-42A in flight. GA-ASI

How many Increment 1 CCAs the Air Force ultimately plans to acquire is not entirely clear. Air Force officials have said previously that between 100 and 150 drones could be ordered under the program’s first phase. It also remains to be seen whether the service buys YFQ-42As, YFQ-44As, or a mix of both.

“CCA is part of the Next Generation Air Dominance Family of Systems and leverages the Department’s Government Reference Architectures—enabling platform-agnostic autonomy development, streamlined integration across vendor systems, and more agile capability updates over time,” the Air Force’s release also noted. “The architecture is built to integrate with Allied and Joint partners, offering common autonomy and mission system standards that support seamless interoperability and teaming across Services and coalition forces.”

A previously released photo of the YFQ-44A prototype. Courtesy photo via USAF

There are still plans for at least one more incremental CCA developmental cycle, the requirements for which have yet to be publicly disclosed. However, the submissions for Increment 2 are already expected to be significantly different from the ones for Increment 1. in September, Lockheed Martin unveiled a new CCA-type drone, called Vectis, which the company suggested could be proposed for Increment 2. This week, Aviation Week also disclosed the existence of a new drone design from Northrop Grumman subsidiary Scaled Composites, currently referred to just as Project Lotus, which that outlet described in terms of its similarities to Vectis.

Increment 2 has also long been expected to involve foreign participation. Earlier this month, authorities in the Netherlands notably announced they had signed the letter of intent about joining the CCA program.

The Air Force’s CCA effort is also directly intertwined with similar efforts underway within the U.S. Marine Corps and the U.S. Navy. The Air Force still has many general questions to answer about how its future CCA fleets, whatever they are comprised of, will be deployed, launched, recovered, supported, and otherwise operated, not to mention employed tactically.

As such, in addition to being an important milestone in Fury’s development, the YFQ-44A’s first flight is also another step forward for the Air Force’s larger CCA plans.

Update:

Anduril has now put out its own release regarding the YFQ-44A’s first flight.

YFQ-44A took flight today. Anduril has launched a new age of airpower with the push of a button.

From clean-sheet design to one-click takeoff in 556 days. pic.twitter.com/hUxIZCP8Zz

— Anduril Industries (@anduriltech) October 31, 2025

“Flight testing is where we prove to ourselves, to the Air Force, to our allies, and to our adversaries that these proclamations about game-changing technology go beyond words. They’re real, and they are taking to the skies today,” Jason Levin, Senior Vice President of Engineering for Air Dominance and Strike at Anduril, writes. “The flight testing process is where we prove that our aircraft meets the mark in terms of speed, maneuverability, autonomy, stealth, range, weapons systems integration, and more. As YFQ-44A climbs higher, we’re proving that it doesn’t merely look like a fighter, but that it performs like one.”

“Flight testing for the CCA program is also about more than simply proving raw fighter performance in a vacuum. The real step change that autonomy is driving is enabling a team of robotic aircraft to collaborate to accomplish mission objectives,” he adds. We designed YFQ-44A for a specific Air Force mission: to enhance survivability, lethality, and mission effectiveness by teaming with crewed fighter aircraft or operating independently. Through flight testing, Anduril and the Air Force are developing those collaborative, manned-unmanned teaming concepts and tactics that will inform how we integrate, fight with, and sustain truly autonomous aircraft.”

Anduril’s release also includes details about the production plans for the YFQ-44A, which tie into a “hyperscale” production facility, called Arsenal-1, that the company is now building in Ohio.

“To achieve the scale we need at the speed that the threat demands, we are building and testing a new type of production system for YFQ-44A. Through the employment of a common software backbone called ArsenalOS, our production system multiplies the effects of the thousands of design-for-manufacturing decisions made during the development of YFQ-44A,” according to Levin. “That system is underpinned by a manufacturing philosophy focused on simple, mature, and low-risk production technologies, rather than relying on manufacturing miracles. YFQ-44A will be produced at rate by a broad labor pool, commoditized supply chain, and industry-standard manufacturing processes.”

“YFQ-44A is streaking through the skies, but its next chapter will be written on the factory floors of America’s heartland. Our investment in this aircraft is the driving force behind Arsenal-1, the 5 million square foot production facility that we’re building in Columbus, Ohio,” he adds. “YFQ-44A will be the first program to move into the factory when its doors open, and we are on track to begin production of prototype CCA at Arsenal-1 in the first half of 2026.”

“We’re not waiting for Arsenal-1 to start building, though. In the meantime, we have already more than doubled our manufacturing speed for YFQ-44A by rapidly optimizing our processes and workflows, and by making hundreds of tweaks to the design of the aircraft to further enhance producibility,” Levin also notes. “Making it this far has required herculean investments from the combined Anduril-USAF team measured in time and money.”

* * * 

During a press call today, Anduril’s Jason Levin provided TWZ and other outlets with additional information about today’s first flight and future testing plans. The company has so far declined to say how long the YFQ-44A’s first flight lasted or provide other, more specific details about what it entailed.

“I don’t think I can say any specifics, but the team is very excited,” Levin said in response to a question about whether the first flight went as planned. He did say that the YFQ-44A flew today with an Anduril flight autonomy mission package, but declined to speak to what additional mission autonomy capabilities might be integrated into the drone in future test flights.

pic.twitter.com/W65ir6NRSS

— Anduril Industries (@anduriltech) October 31, 2025

“I think it’s kind of the standard buildup that you would have in in in aviation. So I think it’s just checking out subsystems, continue to burn down risk, continue to prove that systems are flight worthy and things are working as expected, matching up the simulation, and then just to continue to start to push the envelope,” he added when asked about potential hurdles to further expanding Fury’s flight envelope. “So, I don’t see any specific risk. We’ve kind of designed Fury to be a simple, low-risk, producible system on purpose, so that we didn’t have to clear any huge hurdles while progressing through the flight test program.”

“We still have a lot to do. So, we’ve shown the airplane works. We’ve shown the autonomy works. The software brain that powers it works. We have a lot to do in terms of proving out the speed, maneuverability, autonomy, stealth, weapon systems integration, and more. And that’s when we’re going to start developing the tactics with experimentation with the Air Force,” he also said. “We’ve already begun integrating weapons with YFQ-44A, and we’ll execute our first live shot next year. And then over the next year, we’ll execute multi-ship mission autonomy, deploy weapons from YFQ-44A, fly in conjunction with crewed fighters, and operate outside of test locations.”

“I can’t talk to the specific build-up to firing a missile, but you can kind of imagine it’s not going to be too dissimilar from any aircraft doing a first shot. So we’re just going to build up in terms of flying, integrating systems, and testing them out,” he added when asked to elaborate on the weapon testing plans. “We have a test planning collaboration with the Air Force for things like that.”

It also gives us the hard data we need to shape requirements, reduce risk, and ensure the CCA program delivers combat capability on a pace and scale that keeps us ahead of the threat (2/2). https://t.co/qoCd9PY3do

— Office of the Secretary of the Air Force (@SecAFOfficial) October 31, 2025

He offered a similar response when asked about the plans for multi-ship flight testing, which is set to be conducted in coordination with crewed fighters.

“We have a flight test kind of procedure that I think is going to move quite rapidly, because we’ve built out a lot of the autonomy, so we can start hitting the other test points and showing the capability of the aircraft much quicker,” Levin said, speaking more generally. “And so we feel confident that’ll get us pretty quickly into the live shot, multi-ship autonomous flight, and then autonomous flight with crewed aircraft.”

“We’ve [got] currently multiple Fury fully-built aircraft in testing, as well as multiple aircraft in various stages of the manufacturing process,” he also noted. Anduril had previously disclosed this at the Air & Space Forces Association’s 2025 Air, Space, and Cyber Conference in September.

“Arsenal-1, it is going to open next year, and it can support the increment one demand that the U.S. Air Force has for CCA,” he added. “And so we’re scaling up that facility to build hundreds of aircraft.”

"> Tyler Durden Mon, 11/03/2025 - 05:00

Seattle Paying Up To 53% More Than The National Average For Gasoline

Gas prices are falling across much of the United States, but Seattle drivers are still paying a premium, according to Fox 13 Seattle.

The national average for a gallon of gas is $3.066. In Washington state, the average jumps to $4.388 per gallon. In the Seattle–Bellevue–Everett metro area, the price is $4.648 per gallon, and in King County it reaches $4.732 per gallon.

AAA says some Seattleites are paying as much as 53% above the U.S. norm for gasoline.

Fox writes that the national average continues a slow decline, heading toward the $3-a-gallon mark for the first time in nearly four years. Lower demand, cheaper crude oil, and the switch to less-expensive winter-blend gasoline are helping drive that trend. A year ago, the national average was $3.163 per gallon, while Washington’s statewide average was $4.068 — a gap of just 32 cents that has now widened dramatically.

In other words: while the gasoline might be a little cheaper soon for some, in Seattle the pain at the pump is still real — and the cost of owning a home here keeps climbing or at best holding steady high.

Gas prices in Seattle are far higher than the national average mainly because Washington imposes some of the highest fuel taxes and climate-related fees in the country.

The state’s carbon pricing policy increases the cost per gallon before it ever reaches a pump. Seattle is also geographically distant from major oil production regions and relies on a limited number of local refineries and tanker deliveries, meaning there’s less competition and higher transportation and production costs.

On top of that, the region’s overall cost of doing business is elevated, with pricier labor, logistics, and real estate all filtering into what drivers pay. Even when national fuel prices drop, these structural factors keep Seattle’s gas among the most expensive in the U.S., leaving local motorists paying a premium simply to stay on the road.

Tyler Durden Mon, 11/03/2025 - 04:15

How Canada Built, Then Broke, The World's Best Immigration System

Via Thehub.ca,

Welcome immigrants. Many, but not too many. Mostly educated and skilled. Always legal.

That is the answer. Or at least a short version of an answer. What’s the question? I’m coming to that.

Members of the crowd during a Canada Day parade in Montreal, July 1, 2018. Graham Hughes/The Canadian Press.

For decades, Canada enjoyed all-party, across-the-spectrum support for immigration. The arrival of new people at consistently higher rates than in Western Europe or the United States did not drive political polarization. This country took in far more immigrants than America relative to the size of its population, and had been doing so for decades, without signs of backlash. Instead of a Left-Right clash on immigration, there was a boring all-party consensus.

When Donald Trump won the U.S. presidency for the first time, visceral anger over immigration was central to his campaign. Perhaps his success with so many voters should not have surprised. By 2016, the share of the American population born outside the country was 13.5 percent, the highest level in more than a century. Maybe a backlash was inevitable.

In Canada, however, it has been well over a century since immigrants were that low a share of the population. In 2016, immigrants were 22 percent of Canadians and rising. That was higher than the U.S. at any time since the Civil War.

Yet in Canada in the mid-2010s, there wasn’t much evidence of a groundswell of popular opposition to immigration, nor were there signs of a political crackup over the issue. Between the Liberal governments of Jean Chrétien and Paul Martin and Stephen Harper’s Conservatives, there hadn’t been much daylight on immigration—not in the shared positive attitude toward legal immigration, nor in their common concern to limit illegal and irregular immigration, nor in the actual numbers of immigrants accepted each year. Governments of different ideological stripes struck roughly the same course for a quarter of a century. The broad strokes of Canadian immigration policy did not whipsaw when the party in power changed.

Immigration sparked conflict in other lands, but something about this nation, or how it did immigration, had delivered a different outcome.

From the start of the century until the early 2020s, the statement “there is too much immigration” was agreed with by only around a third of Canadians, versus two-thirds in disagreement.

A 2018 Pew poll found that 68 percent of Canadians said that immigrants “make our country stronger”—the highest level in the developed world. Just 27 percent said that immigrants “are a burden”—the lowest level in the developed world.

A 2019 Gallup survey found that Canada had the world’s most welcoming and positive attitude toward immigrants. In the U.S., the survey found support for immigration declined with age; in Canada, Gallup found no differences by age group. The most pro-immigration Americans were those in their teens and twenties, but even they were not as pro-immigration as Canadian seniors.

A country that tends to humblebrag about its modest successes had a not-so modest success. The ultimate mark of achievement was that Canadians were not preoccupied with immigration. Public disinterest was a sign of public trust. The subject was usually as newsworthy as functioning plumbing.

Until, that is, everything changed.

The italicized credo that I opened with is the short answer to this question: What is the recipe for a successful immigration system?

Or to flesh it out a bit more: What is the recipe for an immigration system that is likely to deliver long-term and widely shared economic benefits to the receiving country; offers immigrants good odds of success; is genuinely welcoming; is seen as fair and meritocratic; is likely to produce more benefits than costs; builds solidarity and citizenship between native-born and newcomers; and is likely to earn a high level of public acceptance?

Read the rest here...

Tyler Durden Mon, 11/03/2025 - 03:30

War Intensifies: October Marked High Point For Russian Missiles Fired On Ukraine

Just as US-Russia talks related to Ukraine have recently hit a stoppage and potential breaking point - with the cancelation of the Budapest summit - Russia has been significantly upping its missile and drone strikes across Ukraine.

The fact that Ukraine's energy grid is long struggling to keep up with power demand, also as vital infrastructure keeps getting pummeled amid rolling blackouts, means the country is in for a very tough winter. Fresh data demonstrates that October represented a high point in terms of the rate of Russian missile attacks on Ukraine.

"Russia fired more missiles at Ukraine in October than in any month since at least the start of 2023, an AFP analysis of Ukrainian data showed," the outlet has found.

Source: Russian Defense Ministry Press Service

That record shows that "Russia’s army fired 270 missiles in October, up 46% on the previous month, according to an AFP analysis of daily data published by Ukraine’s air force."

The Ukrainian government had only started publishing detailed statistics of these strikes at the beginning of 2023, and 270 strikes marks the highest-one month tally since.

President Zelensky has commented, "Russia's task is to create chaos and apply psychological pressure on the population through strikes on energy facilities and railways."

As for drone attacks, this number is in the thousands - with many of these likely being decoy drones, but also highly destructive suicide drones which often come in waves, overwhelming Ukraine's air defenses.

"Russia also fired 5,298 long-range drones at Ukraine in October, the same data showed, down by around six percent on the number it fired in September but still close to record highs," AFP found.

The number of Ukrainian drones sent on Russian territory is also likely in the thousands. These have actually been highly effective in damaging dozens of Russian oil refineries and defense sector factories in the last several months - with some of the same oil sites having been hit more than once.

More attacks into the weekend...

BREAKING:

Major blackouts in the suburbs of Moscow after Ukraine largest one of the largest drone swarm attack of this war against Russian energy infrastructure in thr Moscow region pic.twitter.com/MeWz1iwjeX

— Visegrád 24 (@visegrad24) October 31, 2025

Kiev's strategy is to attempt to cripple Putin's military machine by impacting cash flow to the defense ministry via oil exports - though so far this has appeared limited in its effect, also as Moscow keeps finding ways to also circumvent Western sanctions.

Tyler Durden Mon, 11/03/2025 - 02:45

Stellantis Expands In The US, As Germany's Deindustrialization Accelerates

Submitted by Thomas Kolbe 

Automotive giant Stellantis is expanding its U.S. operations. Any sign of an investment turnaround in Germany, which Chancellor Friedrich Merz touted just weeks ago, is nowhere to be seen.

Investment Freeze at Stellantis – in Germany at Least 

The European carmaker, home to brands like Opel, Peugeot, and Citroën, is turning away from its European sites. On Monday, Stellantis announced it will invest $13 billion in the U.S. over the next four years, increasing American production by 50%. The expansion will create 5,000 new jobs across plants in Illinois, Ohio, Michigan, and Indiana.

Stellantis said it would resume operations at its plant in Belvidere, Ill

The concrete impact on German production remains unclear. Stellantis offered no comments on potential layoffs, but it’s safe to assume significant parts of production will shift to the U.S. in the coming years. High energy costs and U.S. tariffs likely influenced this decision.

CEO Antonio Filosa emphasized that this largest investment in company history will create American jobs and systematically expand U.S. manufacturing. The U.S. will now be Stellantis’ top priority.

Germany Avoided 

Stellantis’ damning verdict, especially for its German production sites, is just the tip of the iceberg in an accelerated capital flight from Germany. Major German automakers are increasingly relocating production abroad: BMW to Debrecen, Hungary—and Mercedes-Benz to Kecskemét, Hungary.

Industry is abandoning Germany. The manufacture of energy-intensive products, electrical engineering, machinery, and raw materials is no longer profitable under current conditions. It seems almost comical—if it weren’t so tragic—when Minister of Economic Affairs Katherina Reiche, noting Germany’s lack of competitiveness, forms a task force to develop strategies out of the crisis.

A quick ten-second search on „Grok“ could illuminate the issues—the problems are already well known.

The Green Deal Remains the Golden Calf 

Meanwhile, Chancellor Merz made clear during the EU summit that all options are being considered—except tackling the root cause: the grotesque European climate policy that largely triggered this industrial collapse.

The reflexive defense of Brussels’ climate consensus under all circumstances shows Berlin fully understands what’s driving Germany’s economic collapse. Yet the government pins its last hope on a massive debt package that will pour roughly €50 billion in additional annual spending across the country. Finance Minister Lars Klingbeil expressed hope at the UN summit that private industry will invest now that the state is taking the lead.

The response should be: far from it, Mr. Minister. You misread economic reality. The fact that U.S. chipmaker Intel rejected a €10 billion subsidy to set up in Magdeburg shows the problems run much deeper—and cannot be fixed with handouts. Keynesian “voodoo economics” has reached its limits. Germany is on sale; industrial investors have already passed judgment.

Rust Belt on the Horizon 

Political ignorance will cost dearly. Losing the industrial base triggers massive societal distortions. Recent industrial history provides several illustrative examples: the decline of the English textile industry, Argentina’s machinery sector—or closer to home, the collapse of coal and steel in the Ruhr.

Left behind are true Rust Belts, as in the U.S. Detroit, once America’s wealthiest city, fell as its auto industry collapsed, allowing other hubs, particularly in Japan and China, to rise.

The industrial foundation is key to understanding economy and prosperity. Statistically, one industrial job creates four or five additional jobs in supply chains, services, and consumption. Industrial jobs are typically above-average paying; losing them sparks a chain reaction of social and economic decay.

UK as a Case Study 

The U.K. provides a textbook case. Once at the peak of global industrial output, the empire financed massive overseas infrastructure projects. Imperial overstretch followed, investments collapsed, and industrial decline set in. Other industrial centers, notably the U.S., rose.

Left behind was the City of London: a global financial hub surrounded by a powerful insurance architecture across former empire trade routes. A dual society emerged: the finance center exercising global influence, and “Little Britain,” trapped in poverty. Could Germany face the same fate, minus colonial flows of finance and power?

Time Window Closing 

Currently, around 5.4 million Germans still work in industry—autos, machinery, electrical engineering. Since 2018, their number has fallen by roughly 250,000. Industrial output has dropped by an average of 23%, representing at least €35 billion in lost annual value creation.

There is still time to counteract—so far, mostly lower-value production has been outsourced or shut. There is still time to preserve both Germany’s industrial and social foundations in urban regions.

Yet deindustrialization now shows on the municipal level. Regions dependent on autos are seeing local finances collapse amid the catastrophe facing German carmakers. Too much responsibility is centralized; now funds for schools, kindergartens, cultural institutions, and hospitals are missing. Cities like Stuttgart and Wolfsburg, once automotive strongholds, are fiscally drained.

With industry also disappears private patronage. Germany is losing its millionaires and economically successful elite faster than ever. This year, at least 400 wealthy individuals will likely leave, removing over €2 billion in private capital.

Last year, €64.5 billion in corporate direct investment was shifted abroad—much of it to the U.S. This is capital translating directly into economic activity, not stock market circulation.

History teaches: if elites lose faith in a society or business location, social crisis inevitably grows from that vacuum.

Tyler Durden Mon, 11/03/2025 - 02:00

Weekend:
• Schedule for Week of November 2, 2025

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for October.  The consensus is for 49.2, up from 49.1. 

• Also at 10:00 AM, Construction Spending for September.

• At 2:00 PM, Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) for October.

• All day: Light vehicle sales for October.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 11 and DOW futures are up 58 (fair value).

Oil prices were down over the last week with WTI futures at $60.98 per barrel and Brent at $64.77 per barrel. A year ago, WTI was at $70, and Brent was at $74 - so WTI oil prices are down about 13% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.00 per gallon. A year ago, prices were at $3.06 per gallon, so gasoline prices are down $0.06 year-over-year.

The perception being, citizens are viewing it as not as serious for a second year. “Crime in U.S. Seen as Less Serious for Second Straight Year,” GALLUP WASHINGTON, D.C. — Building on last year’s less-negative assessments of crime in the U.S., Americans’ perceptions have again improved in 2025. Less than half, 49%, now say crime is an […]

The post Maybe Crime is Not as Serious in the US Now? appeared first on Angry Bear.

White House Unveils Details Of U.S.-China Deal, Including Resolution To Nexperia Auto Chip Crisis

The White House on Saturday unveiled a comprehensive breakdown of the U.S.-China trade and economic deal reached by President Donald Trump and President Xi Jinping while on the sidelines of the Asia-Pacific Economic Cooperation summit last week. 

The deal restores stability to global markets, strengthens U.S. industry, and marks a geopolitical win for Washington, according to the White House. 

Here are the key commitments:

• Fentanyl Crackdown: Halt exports of chemical precursors used to make fentanyl and tighten global export controls on designated substances.

• Critical Minerals: Suspend and effectively eliminate new and existing export controls on rare earths, gallium, germanium, antimony, and graphite, allowing unrestricted global supply to U.S. industries.

• Trade Retaliation Rollback: Remove all tariffs and non-tariff countermeasures imposed since March 2025, including those targeting U.S. agriculture and technology firms.

• Agricultural Purchases: Commit to buy 12 million metric tons of U.S. soybeans by year-end, and 25 MMT annually through 2028, alongside renewed imports of sorghum and hardwood logs.

• Semiconductor Resolution: Ensure Nexperia's China facilities can resume exporting legacy automotive chips, easing global supply chain strain.

• Industrial Policy Reversal: Terminate investigations targeting U.S. semiconductor and logistics firms and lift sanctions on maritime and shipping entities.

• Tariff Exemptions Extended: Keep U.S. import exclusions active through 2026, signaling policy de-escalation.

Focusing on the semiconductor resolution commitment, the standoff between the EU, U.S., and China over Netherlands-based Nexperia appears to have resolved, one that could've thrown the global auto supply chain into total dysfunction. 

Recall that in October, the Dutch government seized control of Nexperia, owned by China's Wingtech Technology, over national security concerns. Beijing retaliated by blocking Nexperia's exports from China, disrupting European and some Asian auto supply chains. 

Disruptions:

• VW Halts Golf Production In Wolfsburg As Chip Shortage Worsens

• Nexperia-Linked Chip Shortages Ripple Through Global Auto Supply Chain, From Germany To Japan

For now, trade tensions between the U.S. and China have subsided. In fact, the recent tit-for-tat measures were about each side gaining leverage before Trump and Xi sat down at the negotiating table last week. This resolution on multiple fronts, including the Nexperia chip dispute, is a big sigh of relief.

Tyler Durden Sun, 11/02/2025 - 15:45

The post Weakening Labor Market, the Price of Eggs, and Circular Deals Fueling the AI Bubble appeared first on CEPR.

Tariffs do not make the United States secure. Many countries like to sell and supply to the US because it is a large market. The people are more secure and can afford many things. The US relies on foreign countries to supply many different things to it. Some of the hazards of such a reliance […]

The post An Insecure Supply and Supply Chain Made Even More Insecure appeared first on Angry Bear.