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DOGE's Second Act

Zero Hedge -

DOGE's Second Act

Via OpenTheBooks.substack.com,

As Elon Musk steps back, Congress, agencies and We the People need to step up...

When Elon Musk announced on a less-than-stellar Tesla earnings call that “starting probably next month, May, my time allocation to DOGE will drop significantly,” DOGE critics rejoiced.

Yet, as Teddy Roosevelt so aptly said, it’s not the critic who counts, but the person who enters the arena.

President Trump praised Musk at his cabinet meeting marking his first 100 days and said Musk “opened up a lot of eyes as to what could be done.” 

Trump signaled DOGE’s first act was coming to a close, and its second act was about to begin.

At Open the Books, we’re committed to transparency and helping taxpayers understand what DOGE has uncovered. Taxpayers deserve to know what cuts have been made and what remains to be done. Critics have raised concerns in both good and bad faith, in my view, and we’re committed to a reality-based conversation about the data and results.

I’m appreciative of Musk’s effort because I know first-hand what it’s like to be demonized for trying to downsize the modern administrative state. As the long-time Communications Director and co-author for the late U.S. Representative and Senator Tom Coburn (R-OK), I spent nearly 15 years in constant combat with people who treated commonsense restraint as a crime against humanity.

Coburn, a practicing physician and citizen legislator, believed in radical concepts like reading bills before you voted on them and paying for bills that spent new money by spending less money elsewhere. He believed the Senate, the world’s greatest deliberative body, needed more debate not less. Instead of bending the knee to Senate norms like passing “non-controversial” bills by unanimous consent, Coburn would hold bills until savings could be discovered or at least debated. Some of his colleagues derided his desire for open debate as “obstructionism” and called him “Dr. No.”

In 2008, Coburn’s commitment to deliberation and spending offsets pushed then-Senate Majority Leader Harry Reid (D-NV) over the edge. Reid bundled 36 of Coburn’s “holds” on bills ranging from the “Captive Primate Safety Act” to the “Christopher and Dana Reeve Paralysis Act” into one package called the “Advancing America’s Priorities Act.”

During one demagogic tirade, Reid declared, “You go home and tell people in a wheelchair you voted against moving forward on something that could get them out of their wheelchair.”

In Reid’s view, wanting basic research to be fiscally sustainable and financed by cuts to lower-priority items meant you were pro-paralysis. Today, it’s DOGE’s turn to endure the ire and moral condescension of scorned spenders. If DOGE’s critics in Congress hated government waste half as much as they hate Musk our debt and deficits would have been erased long ago.

To his credit, Musk often said DOGE would make mistakes but would try to correct them as quickly as possible. His admission of fallibility was refreshing and rare in politics and could have been taken as an invitation for collaboration. Sadly, partisan tribalism blinded Musk’s critics from seeing openings to find common ground.

DOGE’s second act can succeed by focusing on two key priorities that build on lessons learned in a rapid-fire first hundred days.

First, enact real-time transparency by creating “America’s Checkbook.” The most important achievement of DOGE’s first act was arguably gaining access to the Treasury Payment system, which is the administrative state’s Holy of Holies. Opening the payment temple to all taxpayers and letting them see federal expenditures in real-time would lock in a permanent and revolutionary win. Doing so would also remove much of the uncertainty on which DOGE’s critics rely – and stoke. And why not? Ordinary Americans have the same right to see America’s bank account as they do their own. After all, it’s their money.

Our founders understood that transparency was a powerful, relentless, and subversive force for freedom. Transparency cuts through government like water cuts through stone. When its steady flow finds cracks, it can wash away mighty walls of opposition. That’s why they wrote transparency into Article I of the Constitution. Their language demanding a “regular accounting” of expenditures precedes the Bill of Rights, the First Amendment and freedom of speech. They understood that in the public square transparency is like oxygen. We can’t speak if we can’t breathe.

If Madison and our framers had access to today’s technology, they would demand real-time transparency. Fortunately, the framework for real-time transparency already exists. In 2006, Coburn teamed up with an ambitious young Senator from Illinois named Barack Obama to put all federal spending online for the first time. Our dream was to create an ecosystem of organizations and citizen activists who would crowdsource oversight and put permanent downward pressure on spending.

The Coburn-Obama bill created USASpending.gov, a platform to search past federal spending. It helped enable organizations like Open the Books, which I run, to exist along with thousands of other individual accounts on platforms like X. DOGE should urgently close the gap, and lag time, between what they can see on the Treasury Payment System and what is visible to everyone else on USASpending.gov. Leaving this gap open asks taxpayers to take DOGE’s word for it. “Trust us, we’re with the government” isn’t a winning strategy whether you’re wearing a blue jersey or red jersey. In DOGE’s defense, the lack of clarity in accounting isn’t easy to correct if it’s at the source of spending. Taxpayers and Congress need much greater clarity and insight into the nature of the problem that only transparency can correct.

DOGE’s second act also should feature much closer collaboration with legislators who have the authority to enact smart and durable cuts. We already have a permanent standing deficit reduction commission. It’s called Congress. What DOGE can do is deliver its findings to Congress, and the American people, with the same level of clarity, transparency and rigor as a prosecutor would make a case in court. Then, members of Congress will have the support they need to achieve durable savings with the force of law. Cancelling contracts and Executive Orders are reversible actions. Congress has the power to make DOGE’s actions and recommendations much harder to reverse.

DOGE has a window of opportunity to work with allies in Congress who are willing to do the work necessary to achieve savings. I recently testified before the House DOGE Subcommittee during their hearing on the federal real estate portfolio. My testimony focused on a “broken windows” argument that spending less lavishly to decorate and redecorate the administrative state’s mostly vacant buildings can usher in greater savings. When DOGE, Congress and outside groups focus on commonsense savings targets the wisdom of crowds – democracy – can prevail over the bureaucracy.

Real spending cuts are achievable in Washington. Between 2011-2013, Coburn and Tea Party-era members helped achieve the first two-year spending reductions since the end of the Korean War and saved taxpayers $150 billion; we enacted a ban on earmarks that saved about $140 billion; and we leveraged debt limit negotiations to force the Government Accountability Office to publish an annual report on duplicative programs. GAO claims those have resulted in $667 billion in savings. That comes to $957 billion saved. Had we had someone of Musk’s stature in our corner we could have accomplished so much more.

As Musk transitions away from a day-to-day role, he can still invest the currency of his celebrity in serious reform efforts and challenge the country to dream big. Rather than scaling back the scope of what DOGE can accomplish and settling for $160 billion in savings, he should go back to the much more ambitious target of more than $2 trillion in savings.

This is a realistic and necessary target. President Reagan’s Grace Commission found that one in three tax dollars is wasted. In today’s budget numbers, one-third of $6.75 trillion (last year’s spending total) is $2.25 trillion. DOGE is right to investigate fraud, and their work on that front can lead to enormous savings, but hitting this larger $2 trillion target will require Congress and the administration to reimagine how mandatory programs like Medicare, Medicaid and Social Security can better serve lower and middle-income Americans. Musk can challenge the bipartisan surrender caucus that would rather see these 90 and 60-year-old programs collapse than be renovated. When members pledge to “not touch” entitlements they are protecting themselves, not seniors or poor people. Not touching these programs guarantees their demise, American decline and weakness, and unimaginable economic suffering.

Today’s political conditions are much more favorable for fiscal reform than during the Reagan years and Tea Party era when we still made gains. In the past, demagogic attacks about hurting poor people and “keeping people in wheelchairs,” as Reid claimed, had more potency. With today’s political realignment, the GOP is now the working-class party.

Now is the time to be bold. This is a 1989 moment for America – a chance to tear down the bureaucratic wall that has separated We the People from their government for 100 years.

DOGE may be the most unifying Trump administration initiative. People hope Trump’s tariff gambit works, but they know DOGE, which is a movement more than a rebranded department, can deliver lasting change. Politicians define themselves by the hills they die on and DOGE is the high ground.

DOGE is popular because it’s rooted not just in common sense but American constitutional first principles. As Thomas Jefferson said, “The natural progress of things is for liberty to yield and government to gain ground.”

As the president said, eyes have been opened. Now it’s time to look, learn and act.

Every dollar saved in Washington is a dream realized somewhere in America. DOGE’s second act can be a time to dream new dreams and deliver real growth and opportunity.

Tyler Durden Tue, 05/13/2025 - 17:00

'Biggest Untold Story in Tech': Explosive Book Reveals How Apple Sold Out America To China

Zero Hedge -

'Biggest Untold Story in Tech': Explosive Book Reveals How Apple Sold Out America To China

Financial Times journalist Patrick McGee has released a gripping new book that meticulously exposes Apple’s deeply troubling ties with China, revealing how these connections fueled the communist regime’s rise to a global manufacturing powerhouse.

(Nikkei Montage / Reuters)

In an interview with The Free Press founder Bari Weiss, McGee revealed key insights from his new book, Apple in China, detailing Apple’s complex relationship with the country.

Presently, approximately 155 million Americans own an iPhone - a remarkable figure that McGee contends would have been unattainable without Apple’s substantial investments in China.

“I think it’s fairly straightforward that China is the only place on the planet that has the tech competence in terms of manufacturing capability, certainly the price, the cost, the quantity, the scale,” McGee told Weiss. My novel argument is that it has those skills because Apple built them there, right? It’s not that China offered something to Apple. Apple didn’t find these skills in China; it shipped people over by the plane load and created them.

“And so it’s this another layer of nuance that Apple is dependent on the very capabilities that it created. And I think this is like the biggest untold story in tech over the last 25 years. And like, my jaw was on the floor as I talked to 200 people and sort of unraveled it all. But I mean, some of the numbers— anytime you’re dealing with Apple, the numbers are just crazy. And so the two numbers that really stick out at me are that the number of people they have trained in China since 2008 is 28 million,” the Apple in China authored continued.”

That’s larger than the labor force of California. And the investments they were making in China by 2015 were $55 billion a year. And that’s such a large number that I couldn’t find any corporate equivalent,” he added. “I had to go to nation-building efforts, and I took the Marshall Plan, the most famous nation-building effort ever, converted it to 2015 dollars, and you realize that Apple’s investing in China twice that of the annual spend of the Marshall Plan. And the Marshall Plan was for 16 countries.”

McGee outlines Apple's production hurdles and economic incentives that propelled this transformative shift, which he compares to a geopolitical event as significant as the fall of the Berlin Wall.

“I have these chapters in the book where they're trying to build iPods and the Sunflower iMac. You might remember it; it sort of looks anthropomorphic, like a Pixar lamp. It's really sexy, and my God, is it a complicated product to build,” McGee said. “And so Apple's trying to do it in Taiwan, but with the help of Singapore, Japan—you know, basically all of Southeast Asia, including China. But the more you're doing things a little bit in China and comparing the costs, the flexible demand of labor, and just the armies of affordable labor, the more it looks like China is the way to go. And they just rapidly begin to consolidate in 2003.

“So, the sort of fun line I have is that in 1999, zero products from Apple were being made in China. By 2009, virtually all of them were. And that transition, I compare to a geopolitical event, like the fall of the Berlin Wall. But it took place over many years. And it's one that I don't think we've really grappled with or understood,” the author added.

Under Tim Cook’s leadership, Apple has significantly deepened its investment in China, most notably through a secretive $275 billion, five-year agreement signed in 2016 with Chinese officials to bolster the country’s economy and technological capabilities, The Information reported in 2021. The deal, aimed at mitigating regulatory threats, included commitments to build new retail stores, research and development centers, and renewable energy projects, while fostering partnerships with local suppliers like Foxconn and enhancing China’s supply chain infrastructure.

President Donald Trump has been pushing Apple to move its manufacturing away from China, primarily through aggressive tariff policies aimed at incentivizing U.S.-based production. Since his first term, Trump has consistently advocated for Apple to bring iPhone and other product manufacturing to the United States, famously vowing in 2016, “I’m going to get Apple to start making their computers and their iPhones on our land, not in China.

Apple has responded by shifting production for U.S.-bound iPhones to India and iPads, Apple Watches, and other products to Vietnam, with Cook confirming that by 2026, most iPhones sold in the U.S. will be made in India.

In February 2025, Apple announced a commitment to invest over $500 billion in the U.S. over the next four years, aimed at strengthening domestic manufacturing and advancing semiconductor production.

Tyler Durden Tue, 05/13/2025 - 16:40

Nodule Found In Biden's Prostate During Routine Exam

Zero Hedge -

Nodule Found In Biden's Prostate During Routine Exam

Authored by Zachary Stieber via The Epoch Times,

A small nodule was found in former President Joe Biden’s prostate during an exam, a spokesperson told news outlets on May 13.

“In a routine physical exam, a small nodule was found in the prostate, which necessitated further evaluation,” the Biden spokesperson said.

It’s not clear whether the additional evaluation has already taken place and, if it has, what it showed.

A nodule could indicate the presence of prostate cancer.

Out of every 100 men in America, about 13 will suffer from prostate cancer during their lifetime, according to the Centers for Disease Control and Prevention. 

Early treatment can eliminate the cancer, which is fatal in a minority of cases.

The most common risk factor is age. Biden is 82.

Biden wrote in an Aug. 20, 2024, proclamation during National Prostate Cancer Awareness Month that “we mourn all the courageous men we have tragically lost too soon to prostate cancer” and “we honor the extraordinary resilience of those currently living with and surviving this disease.”

Biden left office in January after a single term. He initially launched a reelection bid, but later dropped out under pressure from some fellow Democrats due to his advanced age. President Donald Trump, 78, beat former Vice President Kamala Harris, 60, in the 2024 election.

Dr. Kevin O‘Connor, Biden’s physician, reported in 2023 that Biden had a cancerous lesion removed from his chest. The area around the biopsy site was treated, O’Connor said, and no further treatment was required.

“The site of the biopsy has healed nicely and the President will continue dermatologic surveillance as part of his ongoing comprehensive healthcare,” he wrote at the time.

O'Connor also said in 2019 that Biden had a polyp removed from his colon, describing the polyp as “potentially pre-cancerous.”

One of Biden’s sons, Beau, died in 2015 from brain cancer.

Ahead of the election in 2024, O'Connor said that an examination showed that Biden was healthy and active.

Biden “remains fit to successfully execute the duties of the Presidency, to include those as Chief Executive, Head of State and Commander in Chief,” O'Connor wrote in a summary of the exam.

In his first interview since Trump was sworn in, Biden said recently that he did not have any cognitive issues and that he understands the concerns about his age.

“I get it,” Biden said. “I understand the concern. I really do. But the point of the matter is that I would offer specific evidence, if we had time, [of] exactly what I got done when I supposedly lost my cognitive capability.”

Tyler Durden Tue, 05/13/2025 - 16:20

Bitcoin Treasury Exposure Goes Mainstream As Coinbase Soars On Joining The S&P 500

Zero Hedge -

Bitcoin Treasury Exposure Goes Mainstream As Coinbase Soars On Joining The S&P 500

On May 19, 2025, Coinbase will officially join the S&P 500 - widely regarded as the most trusted, most tracked equity index in the world. With over $5 trillion in assets benchmarked to it, the S&P 500 isn’t just a measure of corporate strength - it’s a gravitational center of global capital allocation.

And starting next week, it will include Bitcoin treasury company.

Coinbase currently holds 9,267 BTC on its balance sheet, valued at $963.8 million at today’s price of $104,000 per Bitcoin, making it the 9th largest public corporate Bitcoin holder globally.

As Nick Ward reports for BitcoinMagazine.com, this marks a quiet turning point for Bitcoin in capital markets - one that reframes the treasury conversation and reshapes how companies think about index eligibility, institutional flows, and balance sheet strategy.

The Most Passive Flows in Finance Just Found Bitcoin

Coinbase’s addition to the index means something profound: millions of investors will soon have indirect exposure to Bitcoin—and they didn’t choose it.

Because the S&P 500 is tracked by passive strategies, funds and institutions must purchase Coinbase stock in proportion to its index weight. If Coinbase is assigned even a 0.20% weighting, that implies more than $10 billion in net inflows from index-tracking vehicles.

This is not speculative capital. This is mandatory exposure—capital governed by rules, not conviction.

And for the first time, those rules lead directly to Bitcoin.

Bitcoin Treasuries Are Now Index-Eligible

For years, Bitcoin on the corporate balance sheet was treated as a novelty—or worse, a liability. But Coinbase’s inclusion signals something different: Bitcoin exposure is now compatible with the highest standards of institutional eligibility.

It’s a powerful validation for public companies already holding Bitcoin—and a strategic consideration for those that aren’t. Index inclusion is not reserved for fiat-only treasuries. Coinbase’s addition confirms that sound operations and a Bitcoin-aligned balance sheet are not mutually exclusive.

In fact, they may now be complementary.

Strategy May Be Next to Join The S&P 500

Coinbase may be the first S&P 500 company with a Bitcoin treasury—but it likely won’t be the last.

Strategy ($MSTR), formerly MicroStrategy, is widely viewed as the next potential candidate. The company meets many of the S&P 500’s baseline criteria:

  • It is U.S.-based and publicly listed on the Nasdaq.

  • It has sufficient free float and market capitalization.

  • Its last four quarters of GAAP earnings are positive.

And perhaps most notably: Strategy is the largest corporate Bitcoin holder in the world—by far.

As of today, it holds 568,840 BTC, currently worth $59.16 billion.

Its balance sheet is no longer just Bitcoin-heavy - it is Bitcoin-native. If admitted, Strategy would represent an even deeper exposure to Bitcoin inside the world’s most influential index.

This matters. Because it signals that Bitcoin is becoming a foundational component of corporate capital formation—not an outlier.

From Signal to Strategy: A New Corporate Playbook

Coinbase’s entry - and Strategy’s potential follow-on - reinforces an emerging thesis: a Bitcoin treasury can enhance a company’s capital profile—not detract from it.

Here’s why:

  • Visibility: Index inclusion provides perpetual exposure to new capital.

  • Flows: Passive funds are forced buyers—providing liquidity and price support.

  • Perception: Bitcoin is no longer a reputational liability—it’s becoming a marker of long-term vision and resilience.

In this context, treasury strategy becomes a capital markets strategy. Holding Bitcoin isn’t just about hedging inflation or diversifying reserves—it’s about aligning your company with where capital is flowing.

BFC Perspective: The Bridge Has Been Crossed

From a Bitcoin For Corporations standpoint, this is not just news—it’s a case study in what institutional acceptance looks like.

Coinbase has:

  • Navigated the public markets as a Bitcoin-native company,

  • Maintained a material Bitcoin treasury position, and

  • Demonstrated that such positioning is not a barrier to index inclusion—it can be a feature.

And Strategy, with its commanding treasury and growing influence, may soon follow—cementing Bitcoin’s place at the core of U.S. corporate indices.

This should embolden public companies and pre-IPO candidates alike. It’s proof that Bitcoin alignment doesn’t isolate you from the traditional system—it can embed you deeper into it.

This is the BFC thesis in action: Bitcoin-native capital structures are compatible with institutional legitimacy.

What Comes Next: Bitcoin Is Entering the Core Portfolio

With Coinbase’s S&P 500 inclusion and Strategy potentially next, the implications are clear:

  • Bitcoin is no longer confined to speculative portfolios.

  • Bitcoin treasuries are now appearing in default asset allocations.

  • The passive indexing era is now passively onboarding Bitcoin—whether the end investor realizes it or not.

For CFOs and capital allocators, the takeaway is simple: Bitcoin on the balance sheet is no longer a bet - it’s a bridge. To the index. To the allocators. To the long game.

With Coinbase joining the S&P 500, Bitcoin exposure is entering the core of institutional portfolios—not through a financial product, but via a public company’s balance sheet. As Strategy positions to follow, this marks a broader shift: Bitcoin treasury strategy is becoming part of the mainstream capital structure.

Tyler Durden Tue, 05/13/2025 - 15:52

Divide between Democracy and Oligarchy

Angry Bear -

“The single stupidest statement about Trump ever made,” Robert Reich RFK Jr: ”Elizabeth Warren or Robert Reich saying that President Trump is on the side of the oligarchs, there has never been a president more willing to stand up to the oligarchs than President Donald Trump.” Friends, I can take only so much sycophantic bullsh*t […]

The post Divide between Democracy and Oligarchy appeared first on Angry Bear.

Trade Truce Set To Ignite "Red Hot" Front-Running Of Chinese Exports To US; Goldman

Zero Hedge -

Trade Truce Set To Ignite "Red Hot" Front-Running Of Chinese Exports To US; Goldman

The so-called "breakthrough" trade deal between the U.S. and China on Monday slashes reciprocal tariffs and sets off a 90-day cooling period—one that Goldman analyst Philip Sun says will likely spark a surge of imports into U.S. ports. Far from the doom-and-gloom headlines pushed by leftist corporate media about "empty ports" and "empty shelves," the incoming round of frontrunning by importers exposes those narratives as little more than misinformation and disinformation. 

The 90-day pause begins on Wednesday. This means President Trump's 145% tariffs on Chinese imports will be slashed to 30%, while Beijing will reduce its levies from 125% to 10%. The breakthrough in trade talks follows U.S. Treasury Secretary Scott Bessent's high-stakes meeting with Chinese trade representatives in Switzerland over the weekend.

Now that U.S. importers have a clear runway of dramatically reduced import costs for three months, Goldman's Sun asked Tuesday: "Just imagine: given the 90-day tariff pause, how eager the Chinese exporters and American importers would be in rushing the orders?" 

The analyst followed up with another question: "We live in a highly uncertain world. Who knows what might happen after 90 days? (or even within). Should the Wal-Marts of the world try to stock up as many Christmas items as possible, perhaps not only for 2025, maybe even for 2026, too?" 

All great questions.

Sun answered his own question with a bold forecast: "China's exports will be RED HOT in the next 90 days. Frontrunning would be the key word." 

In a separate note, Jefferies analysts pointed out that freight rates on the trans-Pacific shipping route between China and the U.S. have soared from $2,000 per forty-foot equivalent unit in mid-April to around $2,500 this week. 

"The container sector is positioned for a meaningful improvement in spot rates on two fundamental fronts: a resumption of normal volumes and the beginnings of peak season, which typically commences by July," Jefferies analysts said, adding, "Given the tighter capacity on the transpacific, ocean carriers are in the driver's seat to push freight rates meaningfully higher."

Freight forwarders, such as CMA CGM SA, called the 90-day pause and the move down in the tariff rate between China and the U.S. as "good news." 

A Maersk spokesman told Bloomberg: "Right now, our customers have gotten 90 days of clarity with reduced tariffs, and we are working hard to help them make the best use of this window."

"As many exporters might have held up their shipments to the US in April, the substantial tariff rollback is likely to spur a wave of pent-up exports," Nomura chief China economist Lu Ting wrote in a note on Monday. 

Here's a live shot of all container ships with a port calling in the U.S. 

The incoming 90-day frontrunning of tariffs will merely destroy the far-left corporate media's obsession with gloom and doom: "empty ports, empty shelves." 

Tyler Durden Tue, 05/13/2025 - 14:25

'Dark Stablecoins' Could Emerge As Regulations Tighten

Zero Hedge -

'Dark Stablecoins' Could Emerge As Regulations Tighten

Authored by Stephen Katte via CoinTelegraph.com,

Censorship-resistant “dark stablecoins” could come in increasing demand as governments tighten their oversight of the industry. 

Stablecoins have been used for various groups to store assets due to a lack of government interference; however, with regulations pending, that could soon change, Ki Young Ju, CEO of crypto analytics firm CryptoQuant, said in a May 11 X post.

“Soon, any stablecoin issued by a country could face strict govt regulation, similar to traditional banks. Transfers might automatically trigger tax collection through smart contracts, and wallets could be frozen or require paperwork based on government rules,” he said.

“People who used stablecoins for big international transfers might start looking for censorship-resistant dark stablecoins instead.”

On the heels of US President Donald Trump’s crypto-friendly administration assuming power earlier this year, lawmakers are weighing stablecoin legislation, which seeks to regulate US stablecoins, ensuring their legal use for payments. 

The European Union has already brought in its Markets in Crypto-Assets (MiCA) regulation, which, among other measures, mandates that stablecoins be regulated and transparent.

Source: Ki Young Ju

Ju speculates that a dark or private stablecoin could be created as an algorithmic stablecoin, with the value maintained through algorithmic mechanisms rather than being pegged to an external asset like gold, which makes it susceptible to interference from authorities. 

“One possible example could be a decentralized stablecoin that follows the price of regulated coins like USDC using data oracles like Chainlink,” he said.

Another way would be stablecoins issued by countries that don’t censor financial transactions, or, for example, if Tether chooses not to comply with US government regulations in the future.

“USDT itself used to be considered a censorship-resistant stablecoin. If Tether chooses not to comply with US government regulations under a future Trump administration, it could become a dark stablecoin in an increasingly censored internet economy,” Ju said.

Privacy technology in crypto is already being used

Zcash and Monero — while they aren’t stablecoins —already shield transactions and allow users to send and receive funds without revealing their transaction data on the blockchain.

Several projects are also working on using similar technology for stablecoins, such as Zephyr Protocol, a Monero fork that hides transactions from being revealed on the blockchain. PARScoin also hides user identities, transaction values, and links to past transactions.

The market cap of US dollar-denominated stablecoins has continued to grow, crossing $230 billion in April,report from investment banking giant Citigroup found. That’s an increase of 54% since last year, with Tether and USDC dominating 90% of the market.

Meanwhile, total stablecoin volumes hit $27.6 trillion in 2024, surpassing the combined volumes of Visa and Mastercard by 7.7%. 

Tyler Durden Tue, 05/13/2025 - 14:05

"A Complete Surrender" - Germany Stops Spying On AfD Party After US Pressure

Zero Hedge -

"A Complete Surrender" - Germany Stops Spying On AfD Party After US Pressure

Via Remix News,

Germany’s domestic spy agency has suspended authoritarian surveillance methods of the anti-immigration Alternative for Germany (AfD) party, and U.S. pressure may have played a role.

The German Federal Office for the Protection of the Constitution (BfV), the country’s powerful domestic spy agency, had labeled the AfD a “confirmed far-right organization” before suspending this designation last week. The main reason presented was that the AfD is appealing the designation in court and the agency would wait until this appeal is concluded to decide whether to keep the designation.

However, Germany’s ally, the United States, immediately criticized the designation in some of the harshest language possible, with Secretary of State Marco Rubio calling it “tyranny in disguise.” That was not all, though. U.S. Senator Tom Cotton, chairman of the powerful U.S. Senate Intelligence Committee, then asked Director of National Intelligence Tulsi Gabbard (DNI) to suspend intelligence cooperation between the United States and Germany.

According to Cotton, the German authorities’ politically motivated surveillance activities resemble methods used by dictatorships that are unbecoming of a democratic ally.

“Rather than trying to undermine the AfD using the tools of authoritarian states, Germany’s incoming government might be better advised to consider why the AfD continues to gain electoral ground,” he wrote.

This would have represented a drastic break between the two allies and even a threat to Germany’s national security, which raised the stakes in Germany’s authoritarian move to stifle the political opposition. Currently, the AfD is the largest opposition party in the country and for the first time ever, polled in first place last month.

The developments have also caused a major stir in Germany. Alice Weidel, co-chair of the AfD, said American pressure was behind the BfV’s withdrawal of its designation label on the AfD. In addition, Joachim Steinhöfel, a lawyer defending freedom of speech, told NIUS that the move by the BfV is “a complete surrender by the German domestic intelligence service.” He also noted that U.S. influence was vital.

“We also have to thank the Americans for exerting massive pressure,” he added.

Germany often relies on external partners to spy on its own citizens, as Germany features very strict privacy laws. The NSA is thought to be especially active watching Germans. As a result, any U.S. withdrawal from intelligence sharing could have been disastrous for Germany.

The temporary removal of the designation was warmly welcomed by the AfD, as it gives the party breathing room. For one, a vote on the ban of the party has little chance of moving forward without the designation. Second, the designation offered the BfV the legal means to surveil the entire party and its membership without a warrant, including reading emails and chats, as well as flood the party with informants.

Now, German intelligence is being forced to rethink its surveillance policy as political divisions grow. However, if the appeal court agrees with the BfV that the AfD can be labeled right-wing extremist, the same issue may rear its head again. It is unclear how long this appeals process will take, whether months or even years; however, there is a growing chorus from Germany’s left, as well as the Christian Democratic Union (CDU), to ban the entire AfD party.

If that happens, tensions between the U.S. and Germany could soar to new heights.

Read more here...

Tyler Durden Tue, 05/13/2025 - 12:45

Vietnam and U.S. Tariffs

Angry Bear -

If you travel in Asia, you can find knock-off products which are very similar to the original product with minor differences . . . wear and tear could be one of the differences. Of course, the cost would be far less and the product may look a bit different. In China, one could visit the […]

The post Vietnam and U.S. Tariffs appeared first on Angry Bear.

Cleveland Fed: Median CPI increased 0.3% and Trimmed-mean CPI increased 0.2% in April

Calculated Risk -

The Cleveland Fed released the median CPI and the trimmed-mean CPI.

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% in April. The 16% trimmed-mean Consumer Price Index increased 0.2%. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Inflation Measures Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 
On a year-over-year basis, the median CPI rose 3.5% (unchanged from 3.5% YoY in March), the trimmed-mean CPI rose 3.0% (unchanged from 3.0%), and the CPI less food and energy rose 2.8% (unchanged from 2.8%). 
Core PCE is for March was up 2.7% YoY, down from 2.8% in February.  
Based on the CPI report this morning, Core PCE is expected to decline to 2.6% YoY in April.

Trump Not Going To Istanbul, As Kremlin Downplays 'Direct' Ukraine Peace Talks

Zero Hedge -

Trump Not Going To Istanbul, As Kremlin Downplays 'Direct' Ukraine Peace Talks

The Kremlin on Tuesday affirmed that "the Russian side continues to prepare for the negotiations that are scheduled to take place on Thursday." This after on Sunday Russian President Vladimir Putin offered to resume direct negotiations with Kiev, and proposed the Istanbul talks.

Ukrainian President Zelensky then made a performative gesture - likely more meant to prove to the White House that he's 'willing' - saying he's ready to fly to Istanbul in person and urged Putin to do the same.

Putin spokesman Dimitry Peskov when grilled by reporters on Tuesday downplayed the whole event, describing that direct talks between Russia and Ukraine in Istanbul later this week are merely "still possible".

As for revealing the line-up for the Russian delegation, and who is expected lead, Peskov said "we will announce it as soon as the president [Putin] deems it necessary."

Despite some sensational recent headlines and statements, one thing we can be sure will not happen is President Putin's personal presence. And per the latest from Reuters, President Trump is not going to be there in Turkey either (after on Monday he actually floated the possibility):

  • KELLOGG, WITKOFF ARE HEADING TO ISTANBUL THIS WEEK: REUTERS
  • FORMAT OF TALKS IN TURKEY WITH KELLOGG, WITKOFF UNCLEAR: REUTERS

"All of us in Ukraine would appreciate it if President Trump could be there with us at this meeting in Turkey. This is the right idea. We can change a lot," Zelensky had said.

And Trump had responded by saying he was "thinking about actually flying over" – which would have to happen immediately on the heels of his big Gulf visit to Saudi Arabia, Qatar, and UAE.

Zelensky has meanwhile insisted that any talks should be preceded by the start of a 30-day ceasefire – which Washington appears to be backing, but which the Kremlin has already rejected.

Really, all the talk of pushing to get Putin in Istanbul to negotiate in person was about generating mainstream media headlines like the following:

Moscow worries that such a lengthy pause in fighting would only be used by Ukrainian forces to rearm and regroup along the front lines, at a moment they are exhausted and steadily losing ground.

Peskov told reporters further, "[Western] Europe is, after all, entirely on Ukraine’s side. It cannot claim to have an unbiased approach… Its approach is not balanced, it is rather pro-war, aimed at continuing the fighting, which is in sharp contrast to the approach demonstrated, for example, by Moscow or Washington," according to Russian media.

Tyler Durden Tue, 05/13/2025 - 11:45

The Merch-Can-'Til-Lists

Zero Hedge -

The Merch-Can-'Til-Lists

By Michael Every of Rabobank

The Merch-Can-'Til-Lists

Equity markets soared, as did bond yields and the US dollar, while gold and Bitcoin dropped following the US and China taking down their tariffs by 115 percentage points to 30% for the US (on top of legacy 25% Trump 1/Biden tariffs on 2/3rds of Chinese goods and 25% sectoral tariffs) and to 10% for China for 90 days.

Some say President Trump folded, “because markets.” Or “because neo-mercantilism” as there is nothing market-like in China’s dominance of the production and the staggering trade surpluses it runs. Yet there’s certainly dotted lines being drawn on things to show where folds could go.

On the other hand, markets soared despite tariffs that were unthinkable six months ago. Moreover, Trump claimed China has agreed to remove all non-tariff barriers -- like massive direct and indirect state subsidies and infrastructure -- and underlined that tariffs can go back up again, if not to 145%, if a deal isn’t done by 10 August.

Yet trade partners just saw pushing back at the US can work: why rush to sign a deal like the UK’s --which aims to freeze China out of supply chains-- to then see the US say it doesn’t want to decouple from Beijing, or only in key sectors? That suggests the White House is going to have to breathe fire at someone to make their point. The candidate who fits that bill best might be the EU --if Japan, South Korea, or Canada don’t get there first-- and now the US will be forcing its prescription drug prices down by executive order, with parties like Europe facing higher prices as a result, there are even more issues to clash over. In short, the trade war isn’t over.

At the meta level, we just published a report on neo-mercantilist ideology, which includes both China and Trumpism. Markets are caught between ‘Merch-can-‘til-Lists’, as China cementing itself into supply chains and de-risking from the West remains its grand macro strategy, and acting against it is the US equivalent. Indeed, markets cheering the victory of a non-market economy over a market-driven one, because the latter was mirroring the former, fail to see what’s happening.

The Financial Times reports US Treasury Secretary Bessent secretly met China’s Finance Minister Lan Fo’an in a basement after the IMF meeting three weeks ago: recall laughter at the US claiming to have made contact with China? Apologise if you were one of them.

Oren Cass, also in the FT, underlines liberal neo-mercantilists think the US needs tariffs to push back against state-backed champions supported by illiberal neo-mercantilists: “Perhaps the free-traders are betting on the latter, and would abandon American-style capitalism altogether before allowing so blasphemous a word as “protection” to pass their lips. What they cannot have, in the modern world, no matter how ideal in theory, is free trade and a free market at the same time.” Echoing @izakaminska, he says if the US wins this trade war, we might get free and fair trade in places; and if it loses, we won’t get it anywhere. That markets either don’t see this or don’t care, “because cheap stuff/asset prices” is worth thinking about. A lot.

At the macro level China is accelerating efforts to strip foreign firms from its supply chains. US bookings for Chinese cargo just leaped 35% and firms will surge inventory; but all will be looking for alternative supply to ensure there’s no repeat of the recent de facto embargo. Taiwan’s president just proposed a global “non-Red” supply chain ex-China: but has he looked at his own recently?

In short, a 90-day trade ceasefire is likely to restock/rearm and prepare for round 2: just like the Russia-Ukraine version will be.

On which note, Trump says he may join the Russia-Ukraine ceasefire talks to be held Thursday in Istanbul…if he’s wanted there more than he is between India and Pakistan, where both sides have claimed victory in their recent military clashes, but the former has clearly set new rules of engagement and things remain tense.

Trump is in Riyadh today. Rumors are he may meet Syria’s ex-Islamist president, whom the US designates a terrorist, and who’s reportedly offering to build a Trump Tower in Damascus - if tall enough, it might be visible from the outer suburbs where government attacks against ethnic minorities are taking place. What other headline-grabbing moves will be made, with what market impact? One thing is for sure: it will be all about geopolitics, realpolitik, and fossil fuels rather than the ‘Liberal World Order’ (LWO) and all things green.

Nearby, the New York Times explains ‘Why Trump Suddenly Declared Victory Over the Houthi Militia’, claiming the Pentagon spent $1bn in 30 days, lost two F-18A fighter jets and seven $30m drones, almost shot down an F-35, and used so many precision munitions it was worrying contingency planners, with CENTCOM’s metric of success being “bombs dropped.” This is an institutional mindset that assumes infinite supply chains and budget deficit and debt limits as if we were still had vintage LWO QE, negative rates, and either total US integration with the Chinese economy or a totally different US economy. The fact we have none of them --and that the US couldn’t defeat the modern equivalent of the Barbary Pirates, whom the infinitely less powerful early 19th-century US could-- should worry markets vastly more than it seems to be doing.     

As another indicator of the shift away from the LWO, the UK Labour Party’s PM Starmer yesterday stated mass immigration has failed economically and politically, with declining GDP per capita, lower productivity, and a greater net strain on state finances, while threatening to make Britain “an island of strangers.” This obviously copies rhetoric from the anti-immigration Reform Party now leading the opinion polls. However, the rules and legislation Starmer is proposing will only slow the pace of British net immigration to a still-high level while infuriating left-wing voters, his own MPs, and UK industries from care homes to universities. Meanwhile, counter-terror police are investigating three potential cases of arson linked to Starmer: at his London home, which is let out; another property linked to him; and on in his old car.

Simultaneously, UK pension funds are to unlock up to £50bn of investments, with half reserved for UK firms, under a new “Mansion House accord” with the government. Expect to see a lot more of this “what is GDP *for*?” state leaning on private capital ahead: as our report on neo-mercantilism shows, it’s as much a part of that ideology as tariffs.

There’s less sign of that in the US budget bill emerging from Congress, however, or at least how to pay for it. So far, it seems to be rejecting higher taxes for the wealthy and removing the carried interest loophole “because lobbyists”, while adding no tax on tips and overtime and social security, plus more defense spending, meaning around $1.5 - 2 trillion on top of US fiscal deficits over the next decade.

Tyler Durden Tue, 05/13/2025 - 11:25

NY Fed Q1 Report: Change in Household Debt Balances Mixed; Student Loan Delinquencies Rise Sharply

Calculated Risk -

From the NY Fed: Change in Household Debt Balances Mixed; Student Loan Delinquencies Rise Sharply
The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The report shows total household debt increased by $167 billion (0.9%) in Q1 2025, to $18.20 trillion. The report is based on data from the New York Fed’s nationally representative Consumer Credit Panel. It includes a one-page summary of key takeaways and their supporting data points.

The New York Fed also issued an accompanying Liberty Street Economics blog post examining student loan delinquency, including which borrowers were past due in the first quarter and implications for their access to other credit.

“Transition rates into serious delinquency have leveled off for credit card and auto loans over the past year,” said Daniel Mangrum, Research Economist at the New York Fed. “However, the first batch of past due student loans were reported in the first quarter of 2025, resulting in a large jump in seriously delinquent borrowers.”

Credit card balances fell by $29 billion from the previous quarter and stood at $1.18 trillion at the end of March 2025. Auto loan balances also declined by $13 billion, representing the second drop from one subsequent quarter since 2011, and totaled $1.64 trillion. Mortgage balances grew by $199 billion and stood at $12.80 trillion. HELOC balances rose by $6 billion to $402 billion, representing the twelfth consecutive quarterly increase. Student loan balances grew by $16 billion and now stand at $1.63 trillion. Other balances, which include retail cards and other consumer loans, fell by $12 billion.

The pace of mortgage originations increased slightly, with $426 billion newly originated mortgages in Q1 2025. Aggregate limits on credit card accounts increased moderately by $77 billion, representing a 1.5% increase from the previous quarter.

Aggregate delinquency rates increased from the previous quarter, with 4.3% of outstanding debt in some stage of delinquency. Transition into early delinquency held steady for nearly all debt types, with the exception of student loans. Student loans saw a large uptick in the rate at which balances went from current to delinquent due to the resumption of reporting of delinquent student loans on credit reports after a nearly five-year pause due to the pandemic. Transition into serious delinquency remained stable for auto loans, credit cards, and other debt.
emphasis added
Total Household Debt Click on graph for larger image.

Here are three graphs from the report:

The first graph shows household debt increased in Q1.  Household debt previously peaked in 2008 and bottomed in Q3 2013. Unlike following the great recession, there wasn't a decline in debt during the pandemic.

From the NY Fed:
Aggregate nominal household debt balances increased by $167 billion in the first quarter of 2025, a 0.9% rise from 2024Q4. Balances now stand at $18.20 trillion and have increased by $4.06 trillion since the end of 2019, just before the pandemic recession.
Delinquency Status The second graph shows the percent of debt in delinquency.

The overall delinquency rate increased in Q1.  From the NY Fed:
Aggregate delinquency rates increased in the first quarter of 2025. As of the end of March, 4.3 percent of outstanding debt was in some stage of delinquency, up from 3.6 percent in the fourth quarter. Transition into early delinquency held steady for nearly all debt types; the exception was for student loans, which saw a large uptick in the rate at which balances went from current to delinquent due to the resumption of reporting of delinquent student loans on credit reports after a nearly 5-year pause due to the pandemic. Transition rates into serious delinquency, defined as 90 or more days past due, remained stable for auto loans and credit cards, and saw increases for mortgages, HELOCs, and student loans.
Mortgage Originations by Credit Score The third graph shows Mortgage Originations by Credit Score.

From the NY Fed:
The volume of mortgage originations, measured as appearances of new mortgages on consumer credit reports and including both refinance and purchase originations, increased slightly with $426 billion newly originated in 2025Q1. ... Home equity lines of credit (HELOC) limits continued to rise and saw a $3 billion increase.
There is much more in the report.

Microsoft Reportedly Slashing 3% Of Global Workforce

Zero Hedge -

Microsoft Reportedly Slashing 3% Of Global Workforce

A new report hit the wires late Tuesday morning in New York, revealing that Microsoft plans to implement "organizational changes" impacting about 3% of its global workforce, spanning all levels, teams, and regions.

"We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace," a Microsoft spokesperson told CNBC in a statement. 

The Microsoft spokesperson did not specify the number of job cuts or the timing of the changes.

Data from Bloomberg shows Microsoft employed about 228,000 employees worldwide at the end of 2024, implying total cuts could top 7,000

The report is puzzling since Microsoft reported better-than-expected third-quarter results, which ended on March 31, driven by its Azure cloud business, and issued strong guidance. 

MSFT beat on everything...

However, in the first three months of 2025, Microsoft spent $21.4 billion on Capital expenditures, including assets acquired under finance leases, down more than $1 billion from the previous quarter (and below the $22.56 billion consensus).

The spokesperson told CNBC that the latest round of proposed job cuts is unrelated to performance

In early 2023, Microsoft laid off 10,000 employees. Total workforce growth has stalled since 2022 after exploding every year since 2016. 

Meanwhile, MSFT shares are back at record highs ....

Several reports have suggested that Microsoft is scaling back on data center projects, yet the big tech firm has rejected those reports.

Tyler Durden Tue, 05/13/2025 - 11:05

MBA: Mortgage Delinquencies Increased Slightly in Q1 2025

Calculated Risk -

Today, in the Calculated Risk Real Estate Newsletter: MBA: Mortgage Delinquencies Increased Slightly in Q1 2025

A brief excerpt:
From the MBA: Mortgage Delinquencies Increase Slightly in the First Quarter of 2025
The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.04 percent of all loans outstanding at the end of the first quarter of 2025, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
MBA National Delinquency SurveyThe following graph shows the percent of loans delinquent by days past due. Overall delinquencies increased in Q2. The sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).

The percent of loans in the foreclosure process increased year-over-year from 0.46 percent in Q1 2024 to 0.49 percent in Q1 2025 (red) but remains historically low.
...
The primary concern is the increase in FHA and VA delinquency rates. Some of the recent increase is probably due to the hurricanes last year and wildfires in California.
There is much more in the article.

YoY Measures of Inflation: Services, Goods and Shelter

Calculated Risk -

Here are a few measures of inflation:

The first graph is the one Fed Chair Powell had mentioned two years ago when services less rent of shelter was up around 8% year-over-year.  This declined and is now up 3.3% YoY.

Services ex-ShelterClick on graph for larger image.

This graph shows the YoY price change for Services and Services less rent of shelter through April 2025.
Services were up 3.7% YoY as of April 2025, unchanged from 3.7% YoY in March.

Services less rent of shelter was up 3.3% YoY in April, unchanged from 3.3% YoY in March.
Goods CPIThe second graph shows that goods prices started to increase year-over-year (YoY) in 2020 and accelerated in 2021 due to both strong demand and supply chain disruptions.

Durables were at -1.4% YoY as of April 2025, down from -1.0% YoY in March.

Commodities less food and energy commodities were at 0.2% YoY in April, up from 0.0% YoY in March.
ShelterHere is a graph of the year-over-year change in shelter from the CPI report (through April) and housing from the PCE report (through March)

Shelter was up 4.0% year-over-year in April, unchanged from 4.0% in March. Housing (PCE) was up 4.3% YoY in March, unchanged from 4.3% in February.
This is still catching up with private new lease data.
Core CPI ex-shelter was up 1.8% YoY in April.  This key measure has been at or below the Fed's target for 8 of the last 12 months.

BLS: CPI Increased 0.2% in April; Core CPI increased 0.2%

Calculated Risk -

From the BLS:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis in April, after falling 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.3 percent before seasonal adjustment.

The index for shelter rose 0.3 percent in April, accounting for more than half of the all items monthly increase. The energy index also increased over the month, rising 0.7 percent as increases in the natural gas index and the electricity index more than offset a decline in the gasoline index. The index for food, in contrast, fell 0.1 percent in April as the food at home index decreased 0.4 percent and the food away from home index rose 0.4 percent over the month.

The index for all items less food and energy rose 0.2 percent in April, following a 0.1-percent increase in March. Indexes that increased over the month include household furnishings and operations, medical care, motor vehicle insurance, education, and personal care. The indexes for airline fares, used cars and trucks, communication, and apparel were among the major indexes that decreased in April.

The all items index rose 2.3 percent for the 12 months ending April, after rising 2.4 percent over the 12 months ending March. The April change was the smallest 12-month increase in the all items index since February 2021. The all items less food and energy index rose 2.8 percent over the last 12 months. The energy index decreased 3.7 percent for the 12 months ending April. The food index increased 2.8 percent over the last year.
emphasis added
The change in CPI was below expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

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