Apple Goes MAGA: $500 Billion Investment Plan In America, 20,000 New Jobs

The latest onshoring trend, spurred by President Donald Trump's tariffs on Chinese imports, has led to a major announcement from Apple. The company has embraced "Make America Great Again" with plans to hire 20,000 US workers to manufacture high-tech AI servers in the Heartland and invest hundreds of billions of dollars in new factories. 

Bloomberg reports Apple plans to unleash a tsunami of investments in the US, upwards of $500 billion over the next four years, including a new AI server manufacturing plant in Houston, Texas, and a supplier academy in Michigan. 

This disclosure comes just days after President Trump announced that Apple CEO Tim Cook plans to relocate manufacturing operations from Mexico to the US. 

"He's investing hundreds of billions of dollars," Trump said after his meeting with Cook at the end of last week, adding that the executive is ramping up US investments because he wants to avoid tariffs. 

Earlier this month, Trump imposed a 10% US levy on Chinese imports, where Apple manufactures most of its iPhones, iPads, Macs, and other products. In a tit-for-tat effort, Beijing announced retaliatory tariffs on US goods shortly after. 

Apple's $500 billion investment and promise to add 20,000 new US jobs over Trump's second term is more evidence that corporate America is more willing to participate in onshoring efforts this time. 

Trump responded on Truth Social to the good news: 

APPLE HAS JUST ANNOUNCED A RECORD 500 BILLION DOLLAR INVESTMENT IN THE UNITED STATES OF AMERICA. THE REASON, FAITH IN WHAT WE ARE DOING, WITHOUT WITCH, THEY WOULD'NT BE INVESTING TEN CENTS. THANK YOU TIM COOK AND APPLE!!! 

CEO Cook released a statement: 

"We are bullish on the future of American innovation, and we're proud to build on our long-standing US investments with this $500 billion commitment to our country's future. We'll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation."

Apple has already increased its reliance on domestic production by partnering with Taiwan Semiconductor Manufacturing. The chipmaker is building factories in Arizona to produce semiconductors, including ones for the iPad and iWatch. 

For context, Cook met with the president at the Mar-a-Lago Club in Palm Beach, Florida, shortly after the November election and attended his inauguration in Washington last month. 

Notably, Trump's initial trade war, which started during his first term, sparked discussions among corporate America about "onshoring" trends during earnings calls.

Trump's tariff war—now driving a revival of domestic manufacturing after more than half a century of deindustrialization—could very well be the inflection point that shifts the nation out of decades of crises and into a new so-called "turning" of success, lifting the middle class into an era of sustained prosperity.

Tyler Durden Mon, 02/24/2025 - 08:50

When Markets Misbehave

Authored by Charles Hugh Smith via OfTwoMinds blog,

When Benoit Mandelbrot's book The (Mis)behavior of Markets was published in 2004, it was a revelation for many of us. I remember sitting in my car in a parking lot, unwilling to tear myself away from reading it.

Here's the super-short summary: from time to time markets crash for no visible reason. The internal dynamics of market structures are fractal, and one feature of this structure is that markets break down unpredictably. After the fact, we seek an external trigger--a Federal Reserve "policy error," inflation fears, etc.--but these post-mortem explanations gloss over the cause, which is the inherent instability of market structures.

Markets can trundle along for years appearing to be stable and controllable. Any spot of bother can be corrected with a reduction in interest rates or quantitative easing. Everything is known and controllable.

But this control is illusory. Out of the blue, markets stop behaving. They misbehave, and possibly quite badly.

Nature offers many examples. The seas are relatively calm, and suddenly an enormous rogue wave appears.

At that point, the condition of the ship matters. A sound craft will survive the rogue wave, the leaky, rotten hulk won't.

Human hubris also matters. If the passengers and crew of the hulk have been persuaded by each other's happy talk that the ship is rock-solid, then its breaking apart will come as a nasty shock.

In the current zeitgeist, the consensus is the mighty ship of the stock market is a superliner. No matter how big the rogue wave, the ship will handle it easily.

But what if the consensus is wrong, and we're all passengers on a rotting hulk gussied up with new paint? What if the consensus isn't based on the soundness of the hull, but on the self-reinforcing happy-talk around the dessert cart and bar?

The consensus is convinced the ship is unsinkable, and so the guaranteed path to profit is to "buy the dip" after the rogue wave has passed. This guarantee is not actually causal; it's recency bias, as "buy the dip" has worked like magic for 15 years.

Nobody's interested in leaving the first class casino to get in a lifeboat when guaranteed profits beckon. The question is: how sound is the hull? Who's actually checking, and who's just parroting happy-talk? Can we even tell the difference?

In a euphoric speculative bubble, the answer is "no." In a speculative bubble, "buy the dip" is all you need to know to win big, and continue winning big. So who cares about rogue waves and rotten hulls?

I often refer to this chart of the dot-com bubble because this happened not in some pre-technology era but in the technology-obsessed present. I attended Comdex in Las Vegas in the peak euphoria, and attendees were busy trading stocks online amidst the crowd. Every bubble is forever until it is no more.

Notice the numerous sharp spikes higher as the crowd "bought the dip." The initial crash was bought with all four feet, which was followed by a secondary crash to a new low, which was immediately bought, generating a euphoric spike that signaled "all clear, buy buy buy!" until it too rolled over. This was followed by one last manic "buy the dip" which resulted in a double-top. Once that petered out, a multi-year stair-step down began. The index eventually bottomed after losing about 80% of its peak valuation.

Markets misbehave, sometimes when we least expect it. How badly they misbehave depends on the soundness of the hull and the level of self-reinforcing hubris.

Tyler Durden Mon, 02/24/2025 - 08:30

Musk Warns Fed Workers - Return To Office Or Be Placed On Leave

The Department of Government Efficiency's Elon Musk wrote on X early Monday that starting this week, federal workers who fail to return to the office will be placed on administrative leave. 

"Those who ignored President Trump's executive order to return to work have now received over a month's warning," Musk wrote, adding, "Starting this week, those who still fail to return to office will be placed on administrative leave." 

Musk is referring to the "Return To In-Person Work" executive order Trump signed on day one of his second term, which states: 

"Heads of all departments and agencies in the executive branch of Government shall, as soon as practicable, take all necessary steps to terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis, provided that the department and agency heads shall make exemptions they deem necessary." 

Musk quoted a post by Ralph Norman, US Representative for South Carolina's 5th Congressional District, who posted a video of his latest interview on Fox News, describing the direct insubordination of some federal workers still refusing to return to the office

Those who ignored President Trump’s executive order to return to work have now received over a month’s warning.

Starting this week, those who still fail to return to office will be placed on administrative leave. https://t.co/7XRj6W21eX

— Elon Musk (@elonmusk) February 24, 2025

On Saturday, Musk wrote on X that federal workers received an email "requesting to understand what they got done last week," adding, "Failure to respond will be taken as a resignation." The deadline is Monday. 

Consistent with President @realDonaldTrump’s instructions, all federal employees will shortly receive an email requesting to understand what they got done last week.

Failure to respond will be taken as a resignation.

— Elon Musk (@elonmusk) February 22, 2025

By late Sunday, there was pushback on the 'accomplishments' email from several federal agencies, including the Pentagon, FBI, State Department, and various parts of the Intelligence Community... 

FBI, DoD, State Dept. Push Back On Musk's Monday Deadline For 'Accomplishments' Email https://t.co/tlEeEzfAlI

— zerohedge (@zerohedge) February 23, 2025

An insider at the Social Security Administration's headquarters in Woodlawn, Maryland, said Monday will be chaotic as employees rush into the office, given the limited availability of parking spaces.

The Department of Government Efficiency's latest move appears to create harsh working conditions that will make federal workers more inclined to quit voluntarily. As the old saying goes: "Welcome to Serbia."

Tyler Durden Mon, 02/24/2025 - 08:10

Futures Rebound From Biggest Drop Of 2025

US equity futures are higher, European bourses are mixed and Asian market are red following the worst session of the year for US stocks, as the S&P tumbled 1.7% leaving it about 2% below its ATHs. As of 7:30am, S&P futures are up 0.5% and Nasdaq futures rise 0.4%, with Mag7 names mixed as Nvidia rises in early trading; the Russell outperforms while Fins/Banks are bid this morning pointing to a rebound in Value/Cyclicals. Bond yields are 1-2bps higher with a flat USD. Commodities are mostly lower with WTI still above $70/bbl and precious metals with a slight bid sending gold to a new all time high. Weekend trade news was muted with the German election and the war in Ukraine in focus. Today’s macro data focus is on regional activity indicators.

In premarket trading, Berkshire Hathaway shares were up in the premarket on solid results boosted by a strong jump in insurance underwriting. Apple shares slid after it said it plans to spend $500 billion domestically over the next four years to hire workers and build out AI capacity. Nvidia and Amazon are leading premarket gains among the Magnificent Seven stocks on Monday; NVDA is up as much as 1.5% in early trading, days before its earnings release. Here are some other notable premarket movers:

• Hawaiian Electric which has signed settlement agreements tied to the wildfires in Maui, slips 4.6% after posting a net loss in its fourth-quarter report.
• Nike shares advance 2.5% after Jefferies upgraded the stock to buy from hold, seeing the sportswear company being positioned for a strong recovery over the next two years.
• Twilio shares rise 3.6% as Morgan Stanley upgrades to overweight from equal-weight, saying the software firm’s execution should help with growth and margin re-acceleration.

US stocks looked set to claw back ground after Friday’s sharp selloff, with Nvidia Corp. rising in early trading. German stocks gained after conservatives led by Friedrich Merz emerged as the winners in a weekend vote.

All eyes now turn to what may be the most important earnings release of the quarter when NVDA reports earnings on Wednesday: the result will be a key test of demand for US megacap stocks and the artificial intelligence frenzy that’s powered them. With recent advances in AI by China’s DeepSeek, Nvidia is under pressure to deliver blockbuster results to reassert its leadership. 

“Markets are in wait-and-see mode until we see those bellwether AI earnings as that could be a key turning point,” Laura Cooper, head of global investment strategy at Nuveen, said in an interview.

Meanwhile, doubts are starting to creep again that the exponential capex hockeystick forecast will fall well short. Last night we first reported that according to TD Cown, Microsoft has begun canceling leases for a substantial amount of datacenter capacity in the US, a move that may indicated the Mag7 giant is building more AI computing than it will need over the long term (see full report her). OpenAI’s biggest backer has voided leases totaling “a couple of hundred megawatts” of capacity, the US brokerage wrote Friday, citing channel checks or inquiries with supply chain providers. Microsoft has also stopped converting so-called statement of qualifications, which are agreements that usually lead to formal leases, TD Cowen said. That was a tactic rivals such as Meta Platforms employed previously, when it decided to cut back on capital spending, the brokerage wrote. 

A potential pullback by Microsoft on spending and datacenter construction raises questions about whether the company — one of the frontrunners among Big Tech in AI — is growing cautious about the outlook for demand. If so, then much of the AI thesis - which is based on the chart below - will go down in flames.

But even without a Mag 7 wipeout, the S&P 500 Index is trailing international peers in 2025 after years of outperformance, as investors are put off by uncertainty from President Trump’s policies on tariffs and their potential to rekindle inflation. Friday’s tumble left the S&P 500 1.7% lower on the week. That said, top Wall Street strategists say the underperformance is unlikely to last long given the robust outlook for US economic growth. 

“We’ve seen a lot of inflation fears, but now markets are shifting focus back to the potential growth effects of these US policies,” Nuveen’s Cooper said.

Europe's Stoxx 600 Index, and the euro, fluctuated as initial enthusiasm about Germany’s election gave way to concern the new government may lack a consensus to push through much-needed economic reforms, preventing bond yields from rising and keeping the bid in stocks in place. The DAX rises 0.9% after German conservative opposition leader Friedrich Merz said he’ll move quickly to form a new government after he won Sunday’s federal election. Mid-cap stocks outperform, with the MDAX up 2.8%. Merz emerged as the winner in Sunday’s election, but the results gave his Christian Democrat-led bloc just one clear path to power and they face intense pressure to move quickly to form a government and rally support for measures including potentially looser borrowing rules. “Centrist parties failed to retain a constitutional majority, complicating the prospects of decisive fiscal regime change,” said Apolline Menut, an economist at Carmignac. “Tricky political compromises would be required, as well as fiscal creativity.” Electrification stocks, including Siemens Energy AG, ABB Ltd and Schneider Electric SE, fell as concerns grew around data centers spending after the abovementioned report that Microsoft has begun canceling leases for a substantial amount of datacenter capacity. Here are some other notable movers: 

• European food-delivery stocks rise strongly after Prosus agreed to buy Just Eat Takeaway.com for €4.1 billion. Analysts at Bryan Garnier note this will raise speculation about bids for other firms in the sector
• Subsea 7 rises after announcing it agreed in principle to create a combined oil services company with Saipem, with an order backlog of €43 billion and expected revenue of about €20 billion. Analysts are positive
• Shares in German companies most exposed to hopes of higher government spending gain on Monday after conservative leader Friedrich Merz said he’ll move quickly to form a new government after he won Sunday’s election
• Almirall shares advance as much as 8.1%, the best performer on the Madrid Stock Exchange General Index, after the Spanish pharmaceutical company forecast Ebitda for 2025 of €220 million to €240 million
• Bank of Ireland shares rise as much as 3.7% to the highest since March 2023 after analysts at Barclays said the firm’s “strong” new guidance should lift earnings estimates. Analysts noted 2H profits were better than anticipated
• Shares of gym group Basic-Fit and food services stocks Elior and Sodexo all rise as Citi resumes coverage with buy ratings on each; Elior’s stock “does not look expensive” according to the broker
• Centrica shares rise as much as 3.6% after Jefferies raised its price target on the UK energy company’s shares, highlighting the strength of its balance sheet and possible increases to consensus earnings estimates
• National Grid shares rise as much as 1.5% after agreeing to sell its US onshore renewables unit to Brookfield Asset Management for $1.7 billion. Morgan Stanley analysts say that the deal will allow the UK electricity supplier to reinvest
• Naspers is the biggest drag by index points on South Africa’s benchmark on Monday, falling as much as much as 7.8%, the most since Jan. 7, after Prosus agreed to buy Just Eat Takeaway.com for €4.1 billion ($4.3 billion)
• B&M European shares fall as much as 6.8% after the retailer cut its earnings guidance and said CEO Alex Russo is retiring. Analysts said the weaker guidance and last year’s trading performance are disappointing

Earlier in the session, Asian equities fell, weighed by Chinese technology shares after Trump stepped up curbs on the world’s second largest economy. The MSCI Asia Pacific ex-Japan Index slipped as much as 0.7%, with TSMC, Tencent and Alibaba among the biggest drags. Japanese markets were closed for a holiday. Sentiment was cautious after US stocks had their worst session so far in 2025 following weaker-than-expected economic data and a surge in consumers’ long-run inflation views. Sino-American tensions flared up again, as Trump moved to restrict Chinese investment in some strategic US industries, while also considering further restrictions on outbound investment to Beijing in sectors including semiconductors and artificial intelligence.  A selloff in India continued on Monday even as Citigroup Inc. upgraded the country’s stocks to overweight from neutral, citing a “meaningful upside” amid less demanding valuations. In South Korea, the top financial regulator said the nation is on track to lift its ban on short selling across all stocks starting March 31. A complete resumption of short selling is necessary and any market impact is expected to be short-lived, a top official said at a regular briefing.

China’s top leaders are expected to convene next week at the annual legislative meeting to lay out the economic blueprint for this year. Investors are closely watching for any new stimulus measures. Equities in Hong Kong and mainland China slipped after fluctuating in early trading.

In FX, the EUR/USD rallied by as much as 0.7% to 1.0528, only to pare the advance and trade around 1.0470; the currency was supported after the Asia open on relief that Germany’s far right party didn’t show up much stronger than expected.  The Bloomberg Dollar Spot Index falls as much as 0.4% to the lowest since December, before erasing losses. USD/JPY reverses losses to rise 0.3% to 149.66; it earlier fell to 148.85, lowest since Dec. 3

In rates, US Treasury curve bull-steepens modestly; Treasuries trade cheaper across the curve, unwinding a portion of Friday’s steep flight-to-quality gains. Front end leads losses with yields ~2bp higher on the day, ahead of $29b 2-year note auction at 1pm New York time. 10-year yield rises 1bp to 4.44% while two-year yield is 2bps higher at 4.22%; German counterpart more than 2bp higher; Treasury 2s10s curve is ~1bp flatter on the day. Longer-dated German yields are higher after conservative opposition leader Friedrich Merz said he’ll move quickly to form a new government after winning Sunday’s federal election. This week’s Treasury auction cycle begins with 2-year notes and includes $70b 5-year and $44b 7-year note sales Tuesday and Wednesday. WI 2-year yield near 4.21% is close to January’s 4.211% result, 0.1bp higher than its WI at the bidding deadline.

In commodities, oil prices advance, with WTI rising 0.1% to $70.50 a barrel. Spot gold climbs $7 to around $2,943/oz. Bitcoin is flat near $95,700.

Looking at today's calendar, we get the January Chicago Fed national activity index (8:30am) and February Dallas Fed manufacturing activity (10:30am). Fed speaker slate empty for Monday. Logan, Barr, Barkin, Bostic, Schmid, Bowman, Hammack, Harker and Goolsbee are scheduled to appear later this week.

Market Snapshot

• S&P 500 futures up 0.6% to 6,067.25
• STOXX Europe 600 up 0.2% to 554.98
• MXAP down 0.4% to 189.89
• MXAPJ down 0.5% to 598.74
• Nikkei up 0.3% to 38,776.94
• Topix little changed at 2,736.53
• Hang Seng Index down 0.6% to 23,341.61
• Shanghai Composite down 0.2% to 3,373.03
• Sensex down 1.1% to 74,501.68
• Australia S&P/ASX 200 up 0.1% to 8,308.24
• Kospi down 0.4% to 2,645.27
• German 10Y yield little changed at 2.47%
• Euro up 0.1% to $1.0473
• Brent Futures little changed at $74.48/bbl
• Gold spot up 0.3% to $2,945.02
• US Dollar Index little changed at 106.57

Top Overnight News

• Microsoft is canceling leases for AI data centers in the US, potentially reflecting concerns about overcapacity. ZH
• President Trump said Elon Musk is doing a good job but he would like to see him get more aggressive. It was separately reported that Elon Musk said consistent with President Trump’s instructions, all federal employees will receive an email requesting to understand what they got done last week and a failure to respond will be taken as a resignation, although some agencies told workers not to reply to Musk’s email.
• Trump nominated Air Force Lt General Dan Caine as the next Chairman of the Joint Chief of Staff to replace General Brown, while several other top officials were also pushed out.
• Trump reportedly told CEOs of pharmaceutical companies during a meeting to move their production to the US.
• American Airlines (AAL) flight was diverted to Rome over ‘possible security issue." However, the airline later stated that the flight landed safely in Rome and after inspection by law enforcement was cleared to re-depart with the issue determined to be non-credible: ABC
• America’s economy is more dependent on the wealthy than ever before (the top 10% of earners, or households earning $250K+ per year, now account for nearly 50% of all spending, the highest percent ever. WSJ
• US Republican email systems were reportedly breached by Chinese hackers in summer 2024; hackers reportedly had access "for months" - WSJ
• US Senator Warren has reportedly sent a letter to the White House requesting that Trump's nominee to Chair the Council of Economic Advisers commits to Fed independence, via FT
• Apple plans to invest $500 billion in the US over the next four years, hiring 20,000 workers and producing AI servers as it seeks relief from Donald Trump’s tariffs on goods imported from China. AAPL -1% in pre. BBG
• ECB official Pierre Wunsch warns that the Eurozone risks “sleepwalking” into making too many interest rate cuts and needs to stand ready to stop lowering bowering costs soon. FT
• Europe envisions sending ~30K of its troops into Ukraine to help preserve any peace deal struck with Russia, with the US providing technical, logistics, and weapons support (but no American troops would be involved). ABC
• Germany’s conservative leader Friedrich Merz said he’ll move to form a coalition government within two months after winning yesterday’s election. He pledged to strengthen Europe to achieve “real independence” from the US. The DAX rose and the euro strengthened. BBG
• China’s local governments are set to issue an unprecedented $233 billion of bonds in the first two months of the year, exacerbating a cash squeeze in the financial system. BBG
• Alibaba said on Monday it plans to invest at least 380 billion yuan ($52.44 bn) in its cloud computing and artificial intelligence infrastructure over the next three years. RTRS
• Australian Treasurer Jim Chalmers will meet Scott Bessent in Washington as he seeks tariff exemptions. South Korea’s industry minister will visit the US as soon as this week for trade talks. BBG

German Election

• Prelim. Final Results: CDU/CSU 28.6%, AFD 20.8%, SPD 16.4%, Greens 11.6%, Die Linke 8.8%, FDP 4.3% & BSW 4.9%. This means that FDP and BSW are below the 5% threshold and as such will not be entering the Bundestag. However, given their proximity to the 5% threshold BSW will almost certainly call for a recount.
• Seat Distribution: CDU/CSU 208, AfD 152, SPD 120, Greens 85, Die Linke 64, SSW 1. (316 needed for a majority government)
• CDU/CSU leader Merz will become the next Chancellor. However, he will need to form a coalition to govern. Mathematically, the options are a Grand coalition (CDU/CSU + SPD), Kenya (CDU/CSU + SPD + Greens) or a Midnight coalition (CDU/CSU + AfD). AfD’s Weidel has said that she is open to being in the coalition but expected-Chancellor Merz has made clear this is not an option.
• The most likely outcome is a Grand coalition, though the SPD has made clear that the onus is on Merz to begin talks and find compromises for the government to work.
• Pertinently, the results mean that AfD and Die Linke command a blocking minority with over 1/3 of the Bundestag's seats. This means that the prospects of debt brake reform are reduced, though Merz may be able to come to a deal with Die Linke for non-defense spending related reform.
• Merz has said he ideally wants a functioning government by Easter. However, this is somewhat unlikely given the tense election campaign and political differences between the groups.

Tariffs/Trade

• US President Trump’s team is reportedly pushing Mexico towards tariffs on Chinese imports, according to Bloomberg.
• US President Trump said on Friday that the US will establish new rules to stop US firms from investing in industries that advance China’s national military-civil fusion strategy and will establish rules to stop China-affiliated people from buying critical US businesses and assets.
• US House Chair Jordan criticised EU tech fines and European taxes on US companies and wants the European Commission to brief the judiciary committee by March 10th and called for EU antitrust chief Ribera to clarify rules reining in big tech.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the week mixed after last Friday's sell-off on Wall St and amid holiday-quietened trade with Japanese markets closed for the Emperor's Birthday, while participants also reflected on the results from Sunday's German election. ASX 200 traded little changed as gains in financials and the defensives were counterbalanced by losses in tech and the commodity-related sectors, while there was also another deluge of earnings updates. KOSPI underperformed amid ongoing economic concerns and ahead of tomorrow's BoK rate decision. Hang Seng and Shanghai Comp were choppy but were ultimately pressured amid ongoing trade-related frictions, with the US said to be pushing Mexico towards tariffs on Chinese imports. Nonetheless, there were some encouraging reports with Chinese state-backed developers beginning to buy land at a premium again, while agricultural stocks were supported after China pledged to deepen rural reforms as part of efforts to revitalise the agricultural sector and bolster food security in the State Council's annual rural policy blueprint.

Top Asian News

• China is to further deepen rural reforms and advance rural revitalisation, while it will monitor and regulate pig production capacity to promote steady growth and will consolidate the results of soybean expansion, and expand rapeseed and peanut production. China is to improve the reward and subsidy systems for major grain-producing and increase support for large grain-producing counties. Furthermore, China will support the development of smart agriculture and expand application scenarios of technologies, while it will use monetary tools to encourage financial institutions to increase funding for rural revitalisation and will encourage local governments to pilot special loan interest subsidies for grain and oil crop cultivation, according to Xinhua.
• Chinese state-backed developers are beginning to buy land at a premium again after the government eased limits on home prices as the number of land parcels that sold for at least 20% above the asking price accounted for 37% of deals this year vs 14% for last year, according to a Bloomberg analysis of transactions worth at least CNY 1bln.
• Shein’s profit slumped in a fresh challenge to long-planned London IPO with its 2024 net profit down almost 40% to USD 1bln although FY sales rose 19% Y/Y to USD 38bln, according to FT.
• A report on Friday stated that a new coronavirus with pandemic potential was discovered in China, according to Daily Mail.
• UK and India relaunch trade talks in bid to boost investment opportunities, according to FT.
• China’s economic growth target is expected to be set at about 5% for 2025, while CPI will probably be lowered to 2% from 3% for previous years, according to a report in Securities Times on Monday, citing economists.

European bourses (STOXX 600 +0.2%) opened modestly, and on either side of the unchanged mark (though the DAX 40 outperformed after the German election). At the cash open, some pressure was seen, which then exacerbated in the hour following. Thereafter, a considerable bounce was seen across the complex; as it stands, indices are mostly firmer. European sectors are mixed; initially opened with a narrow breadth, but performance is now varied. Utilities takes the top spot, lifted by renewable names after the German Election; Merz has previously favoured their use. Strength in German auto names have lifted the Autos sector. Basic Resources is the laggard thus far, with downside attributed to mostly lower metals prices.

Top European News

• ECB's Escriva said monetary policy must be approached with caution given the current extraordinary uncertainty.
• ECB’s Villeroy reaffirmed that the ECB’s Deposit rate should be at 2% by this coming summer and said that European banking sector consolidation is generally speaking, necessary to have European banks that can compete at a global level.
• ECB's Wunsch said the ECB faces the risk of ‘sleepwalking’ into too many rate cuts, while he feels “relatively comfortable” with market expectation of 2% rates by year-end “give or take 50 basis points”, according to FT.
• Hungary's PM Orban said they are to exempt mothers of two or three children from income tax and said this will be a huge expense but the budget deficit and debt will decline, while he added the government is ready to impose food price caps unless talks with retailers on keeping prices under control succeed.
• Austria's biggest centrist parties in parliament hinted they were on the verge of agreeing to form a coalition government which would bring together Austria's conservatives, socialists and liberals, while it would sideline the far-right Freedom Party which won the election in September, according to euro news.
• EU Foreign Representative Kallas to meet with the US Foreign Secretary Rubio on Tuesday within the US.

FX

• DXY is a touch lower and showing a diverging performance vs. peers (softer vs. cyclicals, firmer vs. havens) following a shaky performance last week as soft US data points acted as a drag on the USD. In terms of US newsflow, tariff actions remain in focus with President Trump's team reportedly pushing Mexico towards tariffs on Chinese imports. However, markets place greater weight on the April 1st tariff report deadline. Geopolitical headlines remain aplenty with Ukrainian President Zelensky stating he is willing to quit the presidency if it means peace in Ukraine which he said could be exchanged for NATO membership. DXY printed a fresh YTD low overnight at 106.12 but has since returned within Friday's 106.38-106.74 range.
• EUR is one of the better performers across the majors in the wake of the German election which will likely deliver a Grand Coalition (CDU/CSU + SPD). However, such an outcome would deliver a slim majority of 328/630 seats (316 required) and fall short of the Bundestag's two-thirds majority which is required for constitutional reform (i.e. the debt brake). EUR/USD ventured as high as 1.0528 but stopped shy of the 1.0532 YTD peak and eventually returned to a 1.04 handle.
• USD/JPY printed a fresh YTD low overnight at 148.85 but has since struggled for direction amid the mixed risk appetite in Asia and the absence of Japanese participants for a holiday. To the upside, focus is on a potential reclaim of 150 to the upside.
• GBP is a little firmer vs. the USD but softer vs. the EUR. UK-specific newsflow has been light over the weekend and this week's UK data calendar is a particularly slim one. However, today sees a busy speaker slate with BoE’s Lombardelli, Pill, Ramsden and Dhingra all due on the docket and speaking at the Bank of England’s 2025 BEAR Conference. Cable printed a fresh YTD peak overnight at 1.2690 before fading upside.
• Antipodeans are both a touch higher with not much in the way of fresh newsflow for either of the antipode nations. That being said, some positivity surrounding the Chinese property market overnight (Chinese state-backed developers beginning to buy land at a premium again) is helping to underpin sentiment.
• PBoC set USD/CNY mid-point at 7.1717 vs exp. 7.2495 (prev. 7.1696).
• Barclays FX Month-End rebalancing: Weak USD buying vs. most peers, with moderate signal against the EUR and JPY, via Barclays.

Fixed Income

• Bunds opened lower by a handful of ticks after the initial election results, (details on the German Election above) before falling further to a 132.02 low on confirmation that CDU/CSU is the largest party and that both FDP and BSW will not meet the 5% threshold to enter the Bundestag. However, as the full results were released (though likely subject to a recount given BSW coming in just below the 5% threshold) a bounce was seen in Bunds, taking them from the above low to a 132.50 peak and briefly back into the green on the session. A bullish move likely driven by the presence of a blocking minority in the Bundestag, with CSU's stance against Greens being involved in the coalition also a factor.
• USTs were slightly quieter overnight owing to the absence of cash trade as Japan was on holiday. Broadly speaking, USTs have been following their German counterpart but with magnitudes more contained and the early-morning bounce not occurring to quite the same degree with USTs remaining just in the red at all times. The docket ahead is headlined by USD 69bln of 2yr supply, potential remarks from Fed’s Barr (voter) and the January National Activity Index. Currently, USTs are in the red in a narrow 109-16 to 109-21 band.
• Gilts are directionally in-fitting with Bunds though, as with USTs, magnitudes are a little more contained but with Gilts managing to hold in the green for much of the morning. Gapped higher by 18 ticks from Friday’s 92.41 close, as the mentioned bounce in Bunds had already occurred by the time Gilts commenced trade, and then extended to a 92.66 peak. Since, the benchmark has reverted back towards opening levels as we await commentary from the numerous BoE speakers at today’s conference on “The Future of the Central Bank Balance Sheet”. Pill, Ramsden, Lombardelli and Dhingra all scheduled at different points today.
• EU sells EUR 2.392bln vs exp. EUR 2.5bln 2.875% 2027 and EUR 2.277bln vs exp. EUR 2.5bln 3.375% 2039

Commodities

• Crude is a little firmer after initially trading sideways for most of the morning; traders are awaiting further updates on geopolitics and OPEC+ amid growing noise surrounding a potential delay to the unwind of voluntary cuts. In recent trade, a slight bounce has been seen in the complex, taking Brent May to a session high of USD 74.35/bbl.
• Mixed trade across precious metals with little in terms of fresh fundamentals driving price action, although spot palladium could be lagging after US President Trump reiterated the auto tariff set to kick in on April 2nd. Spot gold resides in a USD 2,921.47-2,948.88/oz range thus far.
• Subdued trade across base metals as the Dollar recovered and sentiment waned in early European trade, with tariff woes still in the background amid Trump's reiterations. Prices were unfazed by the encouraging reports overnight suggesting Chinese state-backed developers beginning to buy land at a premium again. 3M LME copper trades on either side of USD 9,500/t in a current USD 9,485.00-9,558.55/t range.
• Iraq’s Oil Minister said all procedures for exporting oil through the Turkey pipeline have been completed. It was separately reported that Kurdistan authorities agreed with the federal oil ministry to restart Kurdish crude exports based on available volumes, while Iraq denied reports that it would face US sanctions if oil exports from Kurdistan were not resumed. Furthermore, Iraq is to receive 185k BPD from the Kurdistan region in the first phase after the resumption of oil exports.
• Iraqi oil minister said exports from the Kurdish region will resume in a week. Iraq Oil Minister said they are waiting for Turkey's approval to restart oil flow, Kurdish oil exports will "hopefully be ready" in two days. Iraqi Oil Minister, when questioned if resumption of Kurdish oil exports will affect Iraq's OPEC compliance, said Iraq is committed to OPEC+ decision and exported volumes under control of ministry.
• BofA forecasts Brent crude at USD 75/bbl in 2025 and USD 73/bbl in 2026 with oil markets set to remain in a modest surplus in the near term. BofA said over the medium term, Brent should average between USD 60-80/bbl to keep the global oil market in balance.

Geopolitics: Middle East

• Israel sent tanks into the West Bank and told troops to prepare for an extended stay, according to Reuters.
• Israeli PM Netanyahu’s office said the release of Palestinian prisoners planned for Saturday was delayed until the release of the next hostages is secured with the delay due to Hamas’s repeated violations.
• Hamas strongly condemned Israel’s decision to postpone the release of Palestinian prisoners and said Israel’s claim that a handover ceremony is humiliating is false and a pretext to evade its obligations.

Geopolitics: Ukraine

• Ukraine Deputy PM said Ukrainian and US teams are in the finally stages of negotiations on the minerals deal; Kyiv is committed to complete the deal "as swiftly as possible".
• Russia's Kremlin said "we welcome and support new US approach to dialogue with Russia". Russian President Putin is to make an international phone call this morning as part of informing partners about talks with the US. Further talks with US this week will focus on eliminating irritants in ties and on work of foreign missions. "Don't see any possibility to renew dialogue with Europe at the moment; European approach contrasts with the effort we are making with the US"
• Ukrainian President Zelensky said the issue of elections is a step to apply pressure on Ukraine and he is willing to quit the presidency if it means peace in Ukraine which he said could be exchanged for NATO membership, but also commented that false statements about his ratings and the amount of US aid are dangerous steps to weaken Ukraine. Zelensky said he sees Turkey as an important security guarantor for Ukraine and that Ukraine is working on Patriot system alternatives, as well as noted if the US strikes a deal with Russia to end the war, it won’t be successful if Ukraine does not agree to its conditions.
• Ukrainian President Zelensky commented that Ukraine-US talks on a minerals deal are moving forward and all is okay, while he stated that the minerals deal draft said Ukraine should return two dollars for each dollar of aid supplied by the US. Zelensky also said the USD 500bln figure is not being considered in the minerals deal anymore and a top aide said he had a constructive new round of talks with the US on the minerals deal. It was also reported that the US could cut Ukraine’s access to Starlink internet services over minerals, according to sources cited by Reuters.
• US President Trump said he thinks the US is pretty close to a minerals deal with Ukraine and that they are asking for rare earth, oil and anything they can get from Ukraine to recoup the money the US put into Ukraine.
• US Secretary of State Rubio told Ukraine’s Foreign Minister that US President Trump remains committed to ending the conflict in Ukraine.
• US Treasury Secretary Bessent said an economic partnership will protect the Ukrainian people and the US taxpayer, while he added that Ukraine’s economic future in peace can be more prosperous than at any other point and a partnership with the US will ensure this prosperity. Furthermore, Bessent said the US-Ukraine partnership proposal is for revenue received by Ukraine from natural resources, infrastructure and assets to be allocated to a fund focused on reconstruction which the US will have the rights over investments, according to FT. It was separately reported that Bessent said he is quite hopeful when asked if he expected a minerals deal with Ukraine this week.
• US President Trump’s envoy Witkoff said there be an expectation that US companies may do business in Russia if a peace deal is reached in the Russia-Ukraine war, according to CBS News.
• Russian President Putin convened a meeting of his security council and discussed relations with post-Soviet states at the meeting, while he received reports from Foreign Minister Lavrov’s recent trips and asked him to share them with the security council, according to TASS. It was also reported that Putin said boosting Russia’s armed forces and meeting the needs of troops fighting in Ukraine are key strategic priorities.
• Russian sovereign wealth fund chief Dmitriev was appointed Special Envoy on International Economic Cooperation and his new mandate will include ties with the US.
• Russian Deputy Foreign Minister Ryabkov said a second meeting between representatives of Russia and the US is planned for the next two weeks and said that Russia will hold talks with the US to address irritants in bilateral relations, according to TASS. It was separately reported that Ryabkov said the US wants to achieve a quick ceasefire in Ukraine without long-term settlement and he explained to the US that a sole ceasefire in Ukraine is unacceptable, according to RIA.
• Russian Foreign Minister Lavrov is to visit Turkey on Monday and will discuss a range of topics including recent US talks on the Ukraine war and how Turkey can contribute.
• Russian Defence Ministry said Russian forces captured the villages of Ulakly and Novoandriivka in eastern Ukraine’s Donetsk region.
• Greek PM Mitsotakis told Ukrainian President Zelensky that it is up to Ukraine to decide on the peace framework acceptable to it and nothing can be decided without Ukraine.
• Poland’s President Duda told US President Trump that US presence in Poland and central Europe should be boosted.
• Hungary's PM Orban said Ukraine will never be a member of the EU against Hungary’s interests.
• EU Council President Costa said they decided to convene a Special European Council regarding Ukraine and EU defence on March 6th.
• Canadian PM Trudeau and US President Trump spoke on Saturday in which they discussed the war in Ukraine and combating fentanyl.
• Two EU Diplomats say EU Foreign Ministers approve 16th sanctions package against Russia.

Geopolitics: Other

• China defended its recent naval drills in the Tasman Sea and accused Australia of ‘deliberately hyping’ military exercises.

US Event Calendar

• 08:30: Jan. Chicago Fed Nat Activity Index, est. -0.05, prior 0.15
• 10:30: Feb. Dallas Fed Manf. Activity, est. 6.4, prior 14.1

DB's Jim Reid concludes the overnight wrap

Five years ago today, global markets first began to panic after a weekend that saw 11 Italian towns emerge from it in Covid lockdown. Five years later we had a mini panic on Friday as attention focused on a report earlier in the week about a new coronavirus discovery in bats, from the infamous Wuhan lab, with similar properties to Covid-19. Note there has been no reported transmission to humans as yet and as far as we know it's just been found in a lab. We're all probably paranoid and it's difficult to know what to do with that information but ahead of a weekend, and with memories of that fateful weekend five years ago, it was no surprise people wanted to lighten up with the S&P 500 (-1.71%) seeing its worst day of the year so far, extending declines after earlier stagflationary data that we'll discuss at the end. In overnight trading, US stock futures are back up with those on the S&P 500 (+0.49%) and NASDAQ 100 (+0.48%) higher.

Talking of five years, will the German election be seen as a pivotal moment when we look back on it in 2030? For financial markets the make-up of the Bundestag was probably as important as the overall results and the one line summary is that the centre-right and centre-left should have sufficient seats to form a grand coalition but overall the centrist parties are short of a two-thirds majority. This latter means that any future reforms of the debt break will be challenging and may require compromise and horse trading.

In terms of the details, the provisional results confirm a victory for the centre-right CDU/CSU (28.6%), followed by the far-right AfD (20.8%), centre-left SPD (16.4%) and Greens (11.6%). Of the smaller partis, the leftist Linke (8.8%) comfortably exceeded the 5% threshold, but the far-left BSW (4.97%) and liberal FDP (4.3%) fell short. BSW’s narrow failure to enter the Bundestag, which may take a few days to be definitively confirmed, has the important consequence of leaving the CDU/CSU and SPD combined with a projected 52% of the seats. That leaves the grand coalition as the most likely outcome, being the only option to avoid the need for three-party coalition given that mainstream parties have ruled out partnering with the AfD. Our Germany economists see the prospect of a two-party coalition led by a strong CDU/CSU as a positive for Germany's corporate sector, promising less policy gridlock and uncertainty than under the outgoing government. See their reaction here for more. Earlier in the night, CDU leader Merz said he wanted to form a coalition within the next two months.

While the outcome may reduce the risks of particularly fractious coalition talks, it still confirms an ongoing anti-establishment trend that has been visible both in Germany and Europe as a whole. The result marks the lowest ever vote share for the two major parties, even as the turnout (82.5%) was the highest since at least 1990. And it leaves the centrist parties short of a 2/3rds constitutional majority, with the CDU/CSU, SPD and Greens jointly at just under 66% of seats. That means any debt brake reform, including for defence spending, would require support from one of the fringe parties. This may not be impossible, but it would require significant political compromises.

After a nervy night, European assets gained traction as the likelihood of simple ‘grand coalition’ majority emerged. The euro is trading +0.58% higher this morning, touching a one-month high against the dollar, while DAX futures are up just over a percent and Euro Stoxx 50 futures are +0.46% higher. Meanwhile Bund futures are slightly down as I check my screens.

In terms of other events this week, Nvidia's earnings on Wednesday could be the biggest mover of markets. Interestingly of the 62 analysts who cover the stock on Bloomberg, 56 have a buy rating with only one sell. DB are currently one of only 5 with a hold rating. Outside of that inflation takes centre stage with US core PCE, German, French and Italian flash CPI, as well as Tokyo CPI all out on Friday with Spain's equivalent coming out on Thursday. In terms of the rest of the main global releases, the German Ifo survey today will be less relevant given the election but later we have the Dallas and Chicago Fed manufacturing surveys. Tomorrow sees the US Conference Board consumer confidence release which will be interesting after Friday's weak UoM equivalent. Wednesday sees US new home sales and Australian inflation. Thursday sees US durable goods and the ECB account of their January meeting and Friday sees US personal income and spending data and the ECB consumer expectations survey. There are also lots of central bank speakers through the week, including at the G20 central bankers and finance minister meeting in Cape Town on Wednesday and Thursday. You can see the main ones detailed in the day-by-day calendar at the end as usual, along with key earnings releases and all the other data.

Digging into the main US data this week now. According to our economists, Friday's personal income (+0.3% forecast vs +0.4% previously) and consumption (+0.2% vs. +0.7%) will likely be softer due to the LA wildfires and poor weather with the all-important core PCE deflator (+0.27% vs. +0.16%) higher but not as extreme as CPI due to softer subcomponents in the subsequent PPI. This would lower the YoY core PCE two tenths to 2.6%. In the US consumer confidence tomorrow, the jobs-plentiful / jobs hard-to-get series is important as a good proxy for the unemployment rate. For claims on Thursday our economists are looking to the DC area in particular given press reports of substantial federal government layoffs. Around 20% of the ~2.3mn federal government employees live in Washington DC, Maryland and Virginia. Our estimates are that there have been roughly 14k potential federal layoffs since the Trump Administration took office with another 12k pending the resolution of court cases. Clearly this is just within the first month.

Asian equity markets are mostly drifting lower at the start of the week following Friday’s significant losses on Wall Street. Across the region, the Hang Seng (-0.64%) with the Shanghai Composite (-0.26%) is also down. The KOSPI is -0.42% lower. Japanese markets are closed for a public holiday but Nikkei futures are around a percent lower. With this holiday there is no cash Treasuries trading in Asia.

Now recapping last week, which ended with a big risk-off move on Friday following more stagflationary US data alongside some scares around the reporting of the new coronavirus discovered by researchers at the Wuhan Institute of Virology. On the fifth anniversary of the first proper slump in markets associated with Covid that's the last thing the world wanted to hear. According to the journal that reported the story as long ago as last Friday the virus hasn't been detected in humans yet but this virus apparently enters cells using the same gateway as the Covid-19 virus. So that scared markets a bit and led to a spike in vaccine stocks like Moderna (+5.34% on Friday) just around the time Europe closed for the day.

However, the earlier data started the softness. First were the February flash PMIs, which saw the headline services reading (49.7 vs 53.0 expected) slump into contractionary territory for the first time in 13 months. At the same time, the PMI manufacturing input prices soared to their highest since October 2022 (+6.1pts to 63.5). Then 15 minutes later, the final University of Michigan consumer survey showed 5-10 year median inflation expectations spiking to a post-1995 high of 3.5% (up from 3.3% in the flash release), even as headline consumer sentiment slumped to a 15-month low. So that added to concerns over the US consumer that had emerged with a weak January retail sales print the previous Friday and Walmart’s disappointing results on Thursday morning. As ever we note that for long-term inflation expectations, the results are extreme along party lines with Democrat supporters expect 4.2% and Republicans 1.5%.

Nevertheless the overall backdrop weighed on risk assets, with the S&P 500 (-1.71%) posting its worst day of 2025 so far, leaving it -1.66% lower on the week. Most affected were small caps, with the Russell 2000 slumping -2.94% on Friday (-3.71% on the week), as well as tech stocks, with the Mag-7 down -2.51% (-3.52% on the week). Both indices fell into negative territory YTD. By contrast, in Europe equity markets closed before the worst of the US slump with the Stoxx 600 (+0.52% Friday) just about posting a ninth consecutive weekly gain (+0.26%).

Other risk assets also suffered on Friday, with US high yield credit spreads seeing their biggest daily spike YTD (+10bps to 271bps). And in the commodity space, Brent crude saw its largest decline since October (-2.97%), leaving it -0.71% down on the week to $74.21/bbl. However, gold advanced +1.86% on week to $2,936/oz despite a marginal retreat on Friday (-0.10%) from Thursday’s all-time high.

Bonds rallied amid Friday’s risk-off environment, with 10yr Treasury yields falling -7.4bps to 4.43% and posting a sixth consecutive weekly decline (-4.5bps). Over in Europe, 10yr bund yields also fell -6.4bps on Friday, but were still +3.7bs higher on the week to 2.47% after an earlier rise amid increased expectations of higher European defence spending.

Tyler Durden Mon, 02/24/2025 - 07:59

Illegal Aliens Loot US Trains In Mojave Desert For High-Value Nike Sneakers

Organized criminal gangs have carried out a series of sophisticated train heists targeting BNSF freight trains in the Mojave Desert along the California-Arizona corridor. The thieves have targeted double-stack container cars, specifically containers carrying high-value Nike sneakers.

Los Angeles Times reported thieves stealthily boarded eastbound freight trains in the lonely stretches of the Mojave Desert at least ten times and stole millions of dollars in sneakers and other goods since last March. Nike sneaker thefts have topped $2 million. 

Here's more from the report:

New sneaker releases may have touched off at least some of the recent incidents. In Perrin, Ariz., thieves allegedly cut an air brake hose on a BNSF freight train on Jan. 13 and unloaded 1,985 pairs of unreleased Nikes worth more than $440,000, according to a criminal complaint filed in US District Court in Phoenix. Many were Nigel Sylvester x Air Jordan 4s, which won't be available to the public until March 14 and are expected to retail at $225 per pair, the complaint states.

Keith Lewis, vice president of operations at Verisk's CargoNet and a deputy sheriff in Arizona, explained to the newspaper how the whole theft operation works:

Theft crews typically scout high-value merchandise on rail lines that parallel Interstate 40 by boarding slow-moving trains, such as when they are changing tracks and opening containers. 

Lewis said the thieves are sometimes tipped off to valuable shipments by confederates working at warehouses or trucking companies. Other times they simply look for containers with high-security locks, which they cut with reciprocating saws or bolt cutters, a Homeland Security Investigations special agent said in affidavits filed in federal court.

Once the desired loot is found, the thieves alert "follow vehicles," which track the train. The stolen goods are tossed off the train after it comes to a halt — either for a scheduled stop or because an air hose has been cut or control wires inside signal boxes have been sabotaged, said the federal agent, Brynna Cooke.

The cargo is then loaded into box trucks, or hidden in nearby brush until they arrive — provided the surveillance crews that are following the train don't detect law enforcement, Cooke said. These tactics are often employed by transnational criminal groups that consist primarily of Mexican citizens from Sinaloa, she said.

The latest figures from the Association of American Railroads show that railroad thefts surged to 65,000 in 2024, a 40% increase from the previous year, costing major railroads $100 million.

According to a recent release from the US Attorney's Office, District of Arizona, illegal aliens from Mexico have been responsible for some of these train thefts: 

Criminal organizations that specialize in stealing from trains, which consist primarily of Mexican citizens with connections to the Mexican State of Sinaloa... 

In other words, cartels... 

President Trump and Border Czar Tom Homan have made it clear that they will not tolerate cartels that jeopardize national security. Deploying US military forces to secure the border is the first line of defense in restoring law and order. 

Tyler Durden Mon, 02/24/2025 - 07:45

DC Mayor Bowser Rejects Trump's Suggestion That Federal Government Take Over The City

Authored by Stacy Robinson via The Epoch Times (emphasis ours),

Washington Mayor Muriel Bowser spoke out on Feb. 20 against President Donald Trump’s suggestion that the federal government should assume control of the city she governs.

Washington, D.C. Mayor Muriel Bowser speaks during a press conference as emergency response units continue to search the crash site of the American Airlines plane on the Potomac River in Arlington, Va., on Jan. 30, 2025. Kayla Bartkowski/Getty Images

“Of course, it’s frustrating, and we think it’s also wrong,” Bowser said at a press conference.

Bowser’s response comes one day after Trump’s comments, made amid criticisms of the high rate of crime, graffiti, and homelessness in the United States’ capital city.

“I think we should take over Washington, D.C. … I think that we should run it strong, run it with law and order, make it flawlessly beautiful,” he told reporters on Air Force One on Feb. 19.

The District of Columbia is currently governed by the mayor and its City Council, whose legislative and budget decisions are subject to the oversight of Congress. This form of government was established by the Home Rule Act, passed in 1973.

To wrest control of the city from the mayor would take another act of Congress. On Feb. 6, Sen. Mike Lee (R-Utah) and Rep. Andy Ogles (R-Tenn.) introduced legislation to do just that.

The Bringing Oversight to Washington and Safety to Every Resident (BOWSER) Act would end Home Rule in the District, one year after its passage.

“Washington is now known for its homicides, rapes, drug overdoses, violence, theft, and homelessness,” Ogles said in a statement criticizing the city’s leadership.

Bowser said she is not sure if the legislation would make it through both chambers of Congress, despite Republican majorities.

“Look, most of the people in the Congress know this: that we are a well-run city. We balance our budgets. We have triple-A bond rating. We have the No. 1 park system. We have the fastest-improving urban school district.”

While she wouldn’t go into specifics about her conversations with Trump, Bowser said she had previously expressed to him that she believed the current system of governance was best, and that she walked away from those meetings with the impression that his main concerns were “infrastructure and homelessness and—to a lesser degree—public safety.”

“There is really not a lot of space between us on focusing on holding violent offenders accountable in the District of Columbia,” she said.

She also noted that when Trump departed the district in 2020, the city was still dealing with the ravages of the COVID-19 pandemic.

“I think he still has a picture of COVID-era D.C., and he returns to a D.C. that is … very much a post-COVID environment where the issues with homeless encampments is much diminished—not completely solved—but much diminished from the D.C. that he left,” she said.

She said the city has cut the number of homeless encampments in half since last year.

Trump and Bowser’s comments highlight an ongoing tug-of-war between those who share the president’s view, and those who—like Bowser—want the district to become the 51st state, with full autonomy.

“The only way we’re not in this position is when we become a state,” she said.

“As long as we have limited Home Rule in this city—yes you have elected officials—but as long as we have limited Home Rule, we’re always vulnerable to the whims of the Congress or a president.”

Tyler Durden Mon, 02/24/2025 - 07:20

Xi & Putin Hold Call On Ukraine War Anniversary Amid Signs Of Peace Talks

Chinese President Xi Jinping spoke with Russian President Vladimir Putin by phone on Monday, according to Chinese state media, as the third anniversary of Russia's invasion of Ukraine is today. The conversation occurred just a day after Ukrainian President Volodymyr Zelensky reached out to President Donald Trump, requesting a meeting to secure a mineral deal amid increasing prospects for a peace deal.

Bloomberg cited state broadcaster China Central Television, which said that Xi and Putin spoke via telephone on Monday afternoon "at the request of the latter." 

CCTV quoted Xi as saying that China and Russia share a "unique strategic value" that is "not aimed at any third party or influenced by any third party."

Recall that China and Russia formed a "no limits" partnership in the days before Putin invaded Ukraine in February 2022. Xi considers Putin an "ally," and the two have met dozens of times over the past decade. 

The call comes one day after Zelensky spoke at a forum in Kyiv about Ukraine's future. He called for Trump to solidify a mineral deal with his country. The Ukrainian president would step down if a peace deal materializes or his country is accepted into NATO. 

Zelensky also demanded that Trump visit Kyiv first before meeting with Putin. If Trump were to meet with Putin first, Zelensky cautioned, "there would be disbelief in the United States… It would be bad for US society."

With preparations underway for a face-to-face meeting between Trump and Putin, this would mark a massive shift from warmongering Western officials who have attempted to isolate Moscow from the world's global economy over its invasion of Ukraine. And these officials were hellbent on sparking World War III.

"The question is about starting to move toward normalizing relations between our countries, finding ways to resolve the most acute and potentially very, very dangerous situations, of which there are many, Ukraine among them," Russia's deputy foreign minister Sergei Ryabkov told reporters on Saturday. 

Bloomberg noted, "The readout of Monday's call said Beijing was happy to see the efforts made by Moscow to resolve the war in Ukraine." 

Chinese Foreign Minister Wang Yi told reporters over the weekend that Beijing would welcome direct communications between Putin and Trump and that the "window for peace is opening up." 

The "no limits" partnership between China and Russia remains a significant concern for the West, as the Biden-Harris regime's weak foreign policy only pushed the two great powers closer, economically and militarily.

 

 

Tyler Durden Mon, 02/24/2025 - 06:55

Store Closures Outpace Openings Amid "Historic Shift" To Service-Based Tenants

By Nate Selesline of RetailDive

As closures accelerate, service-based tenants are expected to lease more retail space in the coming year than goods-based tenants, a trend that JLL called “a historic shift in the retail property sector.”

Coresight Research also forecast that store closings may reach 15,000 this year, while openings will hold steady at about 5,800.

JLL said this shift has been underway for a decade, but is now accelerating. 

Service-based tenants interested in retail spaces include quick-service and fast-casual restaurants, fitness clubs, and healthcare, financial and personal care services.

“While the momentum of this growth was short-circuited by COVID, the last three years have seen a recalibration of this trend,” JLL said.

On the retail side, grocery stores, discount and dollar stores are seeing positive opening trends. The closing retailers are typically big-box or junior anchors. JLL cited Party City, Walgreens and Rite Aid as examples. These stores typically occupy 10,000- to 20,000-square-foot spaces. Nearly 2,700 stores in this category are closing or will close.

About 1,528 big-box stores, with 20,000 to 50,000 square feet of space, will close. These locations are favored by retailers like now-shuttered 99 Cents Only Stores and Big Lots, which filed for Chapter 11 bankruptcy in September. 

However, JLL said there’s an upside to the industry’s real estate crunch, as the movement may free up nearly 140 million square feet of retail space. Space availability is currently at 4.7%, which makes finding desirable locations challenging. In addition, nearly 30% of available space is located in Class C retail properties and less than 25% was built this century, which leaves fewer options for expanding retailers. At the same time, construction activity remains minimal and annual construction starts are the lowest in 15 years.

Macy’s ongoing plans to drastically shrink its footprint may also present a quandary for malls. The company said it plans to close 66 of its namesake department stores this year, which would equate to about 12 million square feet of anchor space opening up in malls. 

In response to this move, mall owners “will have to decide between redeveloping the space and possibly adding a mixed-use component or backfilling the anchor with one or more retailers.” JLL said entertainment businesses, fitness centers, grocery stores, home improvement, furniture and other department store chains are filling these vacant spaces.

Tyler Durden Mon, 02/24/2025 - 06:30

How Health Savings Accounts Can Aid Your Retirement Planning

Though their name advertises a principal purpose, Health Savings Accounts can also be used to strengthen your retirement planning -- thanks to their unique tax benefits and flexible withdrawal rules. Unlike other tax-favored accounts, HSAs offer the potential for a uniquely beneficial double-whammy: tax-free contributions and tax-free withdrawals -- provided those withdrawals are used for health expenses. 

During your working years, withdrawals that aren't used for health expenses are generally subject to ordinary income tax, plus a whopping 20% penalty tax. However, once you hit age 65, the penalty disappears, which means you can use the money for whatever you like and simply pay ordinary income tax.

Of course, health expenses figure heavily in most people's retirement spending projections, which means you'll likely have ample opportunity to make tax-free HSA withdrawals after you retire. That's especially true when you consider that long-term care costs and Medicare Part B, Part D and Medicare Advantage premiums are among the many expenses that qualify for tax-free treatment. 

To contribute to an HSA, you must be enrolled in a high-deductible health plan. In 2025, that means a deductible of at least $1,650 for self-only coverage or $3,300 for family coverage. The plan must limit total out-of-pocket expenses to $8,300 for self-only or $16,000 for family coverage.  

For the 2024 tax year, you can contribute up to $4,150 if you're single, or $8,300 if you have family coverage. For 2025, the limits are $4,300 and $8,550, respectively. If you're 55 or older, you can contribute an additional $1,000. Like IRAs, the deadline for contributing to an HSA for the 2024 tax year is April 15. 

You can invest your HSA money in a variety of ways, from cash and money market accounts to mutual funds. If you expect to withdraw your money soon, you may not want to expose it to market volatility. However, if you're funding an HSA with the intention of not tapping it until years later, you might take a more aggressive stance. The choice of an HSA custodian is an important one, with maintenance fees, investment options and interest rates varying widely. 

You can roll over an existing HSA to a different custodian without tax consequences. Even if you don't want to invest your HSA in mutual funds, a rollover could still deliver a substantial boost to your returns, as some bank custodians are only paying 0.20% on HSA cash. A rollover to Fidelity's HSA would let you use the Fidelity Government Money Market Fund, which has a 4.00% 7-day yield. 

Unlike traditional IRAs and 401k's, HSA's don't have required minimum distributions. As for estate planning, spouses who are named as beneficiaries can inherit HSAs and treat them as if they were their own. In one disadvantage relative to IRAs, non-spouse beneficiaries have to immediately cash out the account and pay income tax on the balance -- they don't get to spread the withdrawals over 10 years.  

Sen. Rand Paul is pushing for all Americans to have access to Health Savings Accounts, regardless of the specifications of their insurance coverage

Americans had 38 million HSA accounts with $137 billion in assets as of mid-year 2024. Kentucky Sen. Rand Paul -- an ophthalmologist who's demonstrated a keen interest in lowering the cost of US health care -- wants to pump those numbers up by killing the HSA eligibility requirements. In November, Paul introduced the Health Savings Accounts for All Act, which would let every American contribute to an HSA, regardless of insurance coverage or income. It would also increase HSA contribution limits, making them equal to the 401k limits -- $23,500, with catch-up contributions for those over 50.

Tyler Durden Mon, 02/24/2025 - 05:45

GameStop Shuttering Canadian And French Locations, Citing "High Taxes, Liberalism, Wokeness And DEI"

GameStop Corp. announced last week it will divest its Canadian and French operations, citing political correctness in both regions as part of a broader review of its international assets.

CEO Ryan Cohen criticized the "sociopolitical climates" of both countries and took to Twitter (“X”) to invite buyers, adding: "High taxes, Liberalism, Socialism, Progressivism, Wokeness and DEI included at no additional cost if you buy today!"

GameStop’s decision to exit Canada and France aligns with CEO Ryan Cohen’s strategy to streamline operations, cut costs, and boost long-term profitability. Since taking over in 2023, Cohen has focused on downsizing the company’s physical store presence, acknowledging the decline of physical game sales, much like the fate of VHS retailers such as Blockbuster, according to Western Standard.

Before the announcement, GameStop operated 203 stores in Canada and 647 across Europe.

The company’s financial performance remains under scrutiny. In its third quarter, it reported a $17.4 million net income, reversing a prior-year loss, but sales fell to $860.3 million, reflecting ongoing retail challenges.

Cohen’s remarks also echo a growing sentiment among business leaders who see progressive policies and DEI initiatives as harmful to corporate efficiency and shareholder value.

The Western Standard report says that Canada accounted for about 5% of GameStop’s revenue ($46.3 million), while Europe contributed around 20% ($173 million). The company has not disclosed the potential value of these operations or its asking price.

GameStop gained notoriety in early 2021 during the meme stock frenzy, when Reddit-driven retail investors sent its stock soaring past $500 per share, at one point doubling within 90 minutes.

Tyler Durden Mon, 02/24/2025 - 04:15

Global Gas Prices Surge Anticipating Summer Scramble To Refill Storage

By John Kemp, energy analyst and founder of JKempEnergy

Spot market gas prices around the world have doubled over the last twelve months as reported inventories in all the major consuming regions have fallen to multi-year lows, signalling the refill season will be much tougher in 2025.

Sharply higher prices will encourage electricity generators to switch to alternative fuels and force energy-intensive industries in Europe and price-sensitive utilities in South and Southeast Asia to cut use wherever possible.

Combined inventories across the European Union, the United Kingdom, Ukraine and the United States are 400 terawatt-hours (1,446 billion cubic feet or 32 million tonnes of LNG) lower than they were a year ago:

• EU and UK inventories were 266 TWh (961 bcf or 21 million tonnes) below prior-year levels on February 19.[1]  
• Ukraine’s inventories were 28 TWh (103 bcf or 2 million tonnes) below year-ago levels on the same date.[2]
• U.S. inventories were 106 TWh (386 bcf or 8 million tonnes) below prior-year levels on February 14.[3]

Japan’s inventories were also 6 TWh (22 bcf or 0.5 million tonnes) below prior-year levels at the end of October, the most recent data available, and have likely remained below year-ago levels since then.[4]

Since the second quarter of 2024, consumption has grown faster than production as a result of record gas-fired generation and lower drilling in the United States, a colder winter in North America and Northwest Europe, and sanctions on Russia.

As a result, surplus gas inventories carried over from a mild winter in North America and Northwest Europe in 2023/24 have been entirely used up over the course of winter 2024/25.

But the rapid emptying of storage has become unsustainable and prices have climbed steeply to rein in consumption and encourage more drilling to conserve the remaining stocks.

Front-month futures prices have doubled over the last year in North America and Northwest Europe and are up by 75% in Northeast Asia compared with the same point in 2024.

The biggest increases have come in near-dated futures contracts to conserve the remaining stocks as much as possible and curb consumption over the summer of 2025 to enable stocks to be rebuilt ahead of winter 2025/26.

With the United States, the European Union, Ukraine and Japan all needing to rebuild inventories faster-than-average over the summer of 2025 there will be fierce competition for gas over the eight months to October.

Energy-intensive industrial users in Europe and price-sensitive buyers in South and Southeast Asia are likely to be priced out, as they were during the first summer after Russia’s invasion of Ukraine in 2022.

In the event of a persistent summer heatwave over North America, Northwest Europe, Northeast or South and Southeast Asia driving higher-than-normal airconditioning loads, the scramble for gas could become intense.

Anticipating tight supplies and a tough refill season, portfolio investors have alreadyamassed exceptionally large bullish positions in futures and options based on gas prices in both North America and Northwest Europe.

In North America, hedge funds and other money managers have accumulated a net long position equivalent to 2,975 billion cubic feet, the highest for more than three years and in the 91st percentile for all weeks since 2010.

In Northwest Europe, investment funds had amassed a near-record bullish net long position equivalent to 292 TWh by the first week of February, before selling 34 TWh to realise some profits in the second week of the month.

Fund buying has anticipated, accelerated and amplified market tightness and price rises this summer, enforcing an early adjustment by encouraging fuel switching in favour of coal and fuel oil and compelling more industrial closures.

Europe’s policymakers, facing another year of painfully high prices for households and industry, will be tempted to blame hedge funds and other speculators (as is always the case when prices escalate rapidly).

But the reality is that the global market will be much tighter this summer than it was in 2024 and 2023 and prices have to rise to restore balance by curbing consumption and encouraging a return to production growth in the United States.

[1] Aggregated Gas Storage Inventory (Gas Infrastructure Europe, February 21, 2025).
[2] Aggregated Gas Storage Inventory (Gas Infrastructure Europe, February 21, 2025).
[3] Weekly Natural Gas Storage Report (U.S. Energy Information Administration, February 20, 2025).
[4] Trend of Natural Gas and LNG Prices (Japan Organization for Metals and Energy Security, January 30, 2025).

Tyler Durden Mon, 02/24/2025 - 03:30

Cocoa Slides To Multi-Month Low As Demand Destruction Fears Overshadow Tight Supplies

Cocoa futures in New York tumbled to a two-and-a-half-month low last week as demand destruction concerns continue to flourish this month, overshadowing concerns about poor output in West Africa. 

Bloomberg reported Thursday that the top bean growers in the Ivory Coast had a very slow start to next season's harvest, which begins in October. The slow start has been blamed on pricier hedges for traders, with prices hovering over $10,000 a ton for the last few months. Higher bean prices and increased volatility also forced the exchange to raise margin costs. 

Executives from Hershey and Mondelez warned last week that bean prices could move higher amid emerging signs of demand destruction for their sugary products.

Earlier this month, Piper Sandler analyst Michael Lavery asked Hershey CEO Michele Buck about the consumer environment for chocolate...

Buck responded that higher bean prices have "created some demand destruction in the market."

Mondelez CFO Luca Zaramella recently said, "We are seeing signs, particularly in parts of the world like North America, where cocoa consumption is coming down."

To close the week, demand destruction fears drove cocoa futures in New York down to $8,934 per ton, a two-and-a-half-month low. However, prices remain extraordinarily elevated compared to early 2023 levels.

Judy Ganes, president of New York-based J. Ganes Consulting, explained to Bloomberg that traders were operating under the assumption that chocolate demand would hold up through the holiday season into the first quarter. Yet she pointed out that does not appear to be the case.

Traders were wrestling between structural output challenges in the West African cocoa market while weighing news concerns over demand destruction. 

We wonder if Goldman's commodity derivatives analyst Hugo Fuentes is still "go long cocoa" based on "structural supply deficits, under-hedged consumers, and historically low warehouse stocks." 

What about Pierre Andurand, founder of Andurand Capital Management LLP? Is he still cocoa's biggest bull?

 

 

 

Tyler Durden Mon, 02/24/2025 - 02:45

Trump Policy Will Embolden Developing World To Reject Climate Agenda

Authored by Vijay Jayaraj via RealClearEnergy,

President Donald. J. Trump’s seismic shift in energy policy will be felt far beyond U.S. borders. His withdrawing from the Paris Agreement, expanding American oil and gas exports, terminating the Green New Deal and eliminating the prospect of carbon tariffs offers a lifeline todeveloping nations grappling with chronic energy poverty.

When the United States pivots sharply, other nations reassess their positions. Nowhere will a change in the dynamics of energy policy be more welcome than in developing nations whose imperative to increase access to energy conflicts with pressures to submit to Western climate lords’ anti-growth, anti-humanistic, and dystopian Paris climate agreement.

Many developing nations have long expressed frustration with the climate agenda’s constraints on their economic growth. India and China, for instance, have consistently maintained that they need flexibility to determine their own domestic energy mix, emphasizing that access toaffordable fossil fuels is crucial for lifting millions out of poverty.

Similarly, nations across Africa have argued that their development priorities must include utilizing their natural resources – including coal, oil and natural gas – to meet people’s basic needs. 

Take Nigeria, for example. With its significant natural gas reserves, the country has been caught between international pressure to limit the use of hydrocarbons and the urgent need to provide electricity to its growing population. International financial markets friendlier to fossil fuels could accelerate Nigeria's plans to monetize its natural gas resources and expand domestic power generation.

As Yemi Osinbajo, a former Nigerian vice president, said, “Africans need more than just lights at home. We want abundant energy at scale so as to create industrial and commercial jobs. To participate fully in the global economy, we will need reliable, low-cost power.” 

Global Implications of U.S. Energy Expansion

One of the most notable effects of Trump’s energy policy is an anticipated surge in exports of liquefied natural gas (LNG) from the U.S., which is to resume processing permit applications for new LNG projects interrupted by former President Biden. 

For developing countries, this means reliable energy at competitive prices – a stark contrast to the intermittent power of solar and wind projects that have been favored by climate-compliant financial institutions.

Energy poverty remains a crippling obstacle in many parts of sub-Saharan Africa, South Asia and Latin America. According to the InternationalEnergy Agency (IEA), nearly 800 million people worldwide are without electricity, while 3 billion rely on smoky biomass for cooking. 

By moving to increase the global supply of LNG, Trump offers an avenue for these nations to transition toward cleaner-burning natural gas. Benefits will include less deforestation, less indoor air pollution and a chance for more economic growth.

India has already invested in LNG terminals in the U.S. and will be increasing imports as demand grows from its population of 1.4 billion. 

Moreover, an increased supply of LNG will stabilize global reserves and reduce the vulnerability of energy-importing nations to geopolitical disruptions. Energy abundance is a prerequisite for stability and prosperity – a reality that developing countries know all too well and the climate obsessed seemingly undervalue.

No Carbon Tariffs: A Boon for Developing Economies

While many pundits harp on Trump’s proposed tariffs on imports, they don’t recognize – or at least fail to acknowledge – that many in the developing world are likely to be happy that carbon tariffs of the climate agenda won’t be part of Trump’s tax regime. 

Carbon tariffs, a darling of the climate crowd on both sides of the Atlantic, are designed to penalize the producers – and users – of carbon-intensive goods. In practice, however, they act as a regressive tax on developing nations, many of which lack the financial and technological means to “decarbonize” their industries.

For countries like India, which Foreign Minister S. Jaishankar has argued must prioritize economic growth over rigid climate targets, the carbon tax-free future represents a much-needed reprieve. It levels the playing field, allowing developing economies to compete in global markets without bearing the disproportionate burden of forced emissions reductions. Yes, Trump has threatened other tariffs, but those can be resolved through diplomacy.

Fossil fuels still account for over 80% of the world’s primary energy consumption, with countries like China, India and Indonesia expanding their infrastructures to produce, import and use hydrocarbons despite pledges to meet impossible climate goals.

With Trump’s bold move, these nations will no longer feel the need to hide behind the veneer of climate appeasement. 

Trump’s rejection of climate orthodoxy matches the aspirations of developing nations striving to ensure energy security and overcome poverty. Expect these countries to be emboldened to more openly pursue their preferred energy strategies and leave the Paris agreement themselves.

Vijay Jayaraj is a Science and Research Associate at the CO2 Coalition, Fairfax, Virginia. He holds an M.S. in environmental sciences from the University of East Anglia, U.K., a postgraduate degree in energy management from Robert Gordon University U.K., and a bachelor’s in engineering from Anna University, India. 

Tyler Durden Mon, 02/24/2025 - 02:00

FBI Freak Out As Dan Bongino Named Deputy Director

On Sunday evening, President Donald Trump announced that former Secret Service agent and conservative talk show host Dan Bongino will become the new deputy director of the FBI - the agency that helped Obama and Hillary Clinton set Donald Trump us with the Russia Collusion hoax - which included leaks to the press, fabricating evidence, and die-hard deep state servants who vowed to destroy our president.

And now - Bongino and newly minted FBI Director Kash Patel are in charge...

Thank you Mr. President, Attorney General Bondi, and Director Patel. pic.twitter.com/bJqIDbWLEE

— Dan Bongino (@dbongino) February 24, 2025

...which is not sitting well with current and former agency officials - or deep state journalists like NBC's Ken Dilanian, who reports that the FBI Agents Association struck out against Bongino's selection. 

Without naming Bongino directly, the Association lashed out over the fact that the Deputy Director has typically been an active Special Agent.

"The FBI Deputy Director should continue to be an on-board, active Special Agent—as has been the case for 117 years for many compelling reasons, including operational expertise and experience, as well as the trust of our Special Agent population," reads a memo obtained by WNBC's Jonathan Dienst.

As the WSJ notes,

The announcement sent shock waves through the FBI, whose new director Kash Patel had offered Republican senators private assurances that he would name a special agent with bureau experience to be his deputy, rather than a political outsider. Patel was sworn in at the White House on Friday.

Leaders of the FBI Agents Association, who met with Patel in January, said the new director had agreed that the deputy should be a current special agent...

Ken Dilanian echoed this sentiment, complaining on X that Bongino "has never spent a day working at the FBI, but he has spent many hours spouting baseless falsehoods about the bureau."

A few minutes before Trump made his announcement, my colleague @jonathan4ny obtained a memo from the FBI agents association which said in part:

“The FBI Deputy Director should continue to be an on-board, active Special Agent—as has been the case for 117 years for many compelling… https://t.co/vnc80obNYs

— Ken Dilanian (@KenDilanianNBC) February 24, 2025

In other words, the right people are freaking out right now.

Ken is still furious that Kash looks different than every other FBI Director.

The “traditionally” argument is a call for the elites to stay in charge. https://t.co/f7QlLDHyHq

— Richard Grenell (@RichardGrenell) February 24, 2025

Bongino is part of the Russiagate corner—he knows this stuff from our side of the fence. No classified briefings, no peeking under redactions—just the hard grind of piecing it all together. Now he’s a co-keeper of the holy grail and we’re about to see it all. It’s all coming out.

— Hans Mahncke (@HansMahncke) February 24, 2025

Oh man they are so f’d https://t.co/QXKqQL7QZQ pic.twitter.com/L01po49seI

— David Steinberg (@realDSteinberg) February 24, 2025

*  *  *

You can support ZeroHedge and longtime reader and patriot John O. by purchasing one of these amazing wooden flags that look great on any wall. Shipping included in the price to the lower 48.

 

Tyler Durden Sun, 02/23/2025 - 23:20

FBI, DoD, State Dept. Push Back On Musk's Monday Deadline For 'Accomplishments' Email

Update (1647ET): Following Elon Musk's Saturday tweet instructing federal workers to list at least five accomplishments over the past week by Monday at midnight, or face termination - which was followed up by an actual email from the Office of Personnel Management (OPM), several agencies issued statements telling their employees to pump the brakes.

So far the Pentagon, FBI, State Department, and various parts of the Intelligence Community have told their employees to hold off.

"When and if required, the Department will coordinate responses to the email you have received from OPM. For now, please pause any response to the OPM email titled ‘What did you do last week," said DoD Under Secretary of Defense for Personnel and Readiness Darin Selnick in a statement.

That followed a similar statement by FBI Director Kash Patel, who told the bureau that they would conduct their own employee reviews that align with the agency's procedures.

The State Department told its employees; "The State Department will respond on behalf of the Department. No employee is obligated to report their activities outside of their Department chain of command."

Top leadership at the State Department has instructed its employees to ignore @elonmusk’s productivity inquiry, saying, essentially—we will evaluate our own people. A sign not all Trump officials are on board with Musk’s DOGE email. pic.twitter.com/9tsufc1rXA

— Yamiche Alcindor (@Yamiche) February 23, 2025

While National Intelligence Director Tulsi Gabbard told employees of agencies she oversees in the Intelligence Community (IC): "Given the inherently sensitive and classified nature of our work, I.C. employees should not respond to the OPM email," according to The Hill.

Meanwhile, Everett Kelley, the national president of the American Federation of Government Employees (AFGE), wrote a letter to Musk and OPM acting director Charles Ezell, directing its 800,000 members to defy the demand.

"Federal employees report to their respective agencies through their established chains of command; they do not report to OPM," said Kelly, adding that the demand was "irresponsible" and a "sophomoric attempt" to cause confusion and intimidate federal workers.

"I am also requesting that OPM rescind the email and apologize to all federal employees," he said.

Musk has defended the 'accomplishments' email, saying that it was designed to weed out "non-existent people or the identities of dead people" who are collecting government checks. He also agreed with commentator and author Mike Cernovich that this also helps to identify high-performing employees.

I have a a few friends who are government employees wrapped up in the DOGE "chaos." And unlike what is being reported in the media, they are ecstatic...

Deep down, most (good) people want to feel like their job has meaning and purpose.

They've been spinning their wheels in…

— John LeFevre (@JohnLeFevre) February 23, 2025

I have a a few friends who are government employees wrapped up in the DOGE "chaos." And unlike what is being reported in the media, they are ecstatic...

Deep down, most (good) people want to feel like their job has meaning and purpose.

They've been spinning their wheels in…

— John LeFevre (@JohnLeFevre) February 23, 2025

*  *  *

 You can support ZeroHedge by purchasing one of these high-quality, sharp, kickass ZeroHedge Multitools which comes with belt pouch. On sale until Monday!

Satisfaction guaranteed or your money back.

*  *  *

Update (1118ET): After panic swept through Washington over Elon Musk's email requiring all federal employees to send an email by Monday at midnight with five bullet points explaining what they got done last week, Musk explained the reasoning behind the last minute demand: "immense fraud."

"The reason this matters is that a significant number of people who are supposed to be working for the government are doing so little work that they are not checking their email at all!" Musk wrote on X. "In some cases, we believe non-existent people or the identities of dead people are being used to collect paychecks. In other words, there is outright fraud."

The reason this matters is that a significant number of people who are supposed to be working for the government are doing so little work that they are not checking their email at all!

In some cases, we believe non-existent people or the identities of dead people are being used… https://t.co/Rj5Xe6vYZB

— Elon Musk (@elonmusk) February 23, 2025

Musk then said that the email is "a very basic pulse check," adding in a subsequent post "They are covering immense fraud."

This email is a very basic pulse check https://t.co/4qEKErwSuE

— Elon Musk (@elonmusk) February 23, 2025

*  *  *

Update (2356ET): Panic has predictably ensued over Elon Musk's requirement that all federal employees provide a five bullet point summary of what they accomplished last week, due by midnight on Monday (full details below).

 

While newly minted FBI Director Kash Patel exempted agency employees from the requirement (with much of the intelligence community reportedly set to get the same pass), there's a lot of upset feds out there.

A DHS employee emails, re Elon's latest: "Not answering that email, due with baby in three days and already having to use sick leave because of the stress... I hope they fire me at this point can't wait to sue them"

— Sam Stein (@samstein) February 23, 2025

Senator Tina Smith (D-MN) lashed out, posting to X, "This is the ultimate dick boss move from Musk - except he isn’t even the boss, he’s just a dick." (she said on the heels of a coordinated campaign to brand him 'Co-President Musk')

To which Musk replied, "What did you accomplish this week?"

What did you get done last week?

— Elon Musk (@elonmusk) February 23, 2025

Indeed, this takes less than 5 mins https://t.co/N9F53zxfbz

— Elon Musk (@elonmusk) February 23, 2025

The Rapid Response team, which posts daily information about the Trump agenda, was happy to oblige.

An incredible week! https://t.co/D3AlfUfdeQ

— Elon Musk (@elonmusk) February 23, 2025

Stay tuned for more...

* * *

Update (2308ET): New FBI Director Kash Patel sent an email to all agency employees on Saturday night instructing them to "pause any responses" to Elon Musk's request that all federal employees provide summaries of their accomplishments over the past week or face termination.

"The FBI, through the Office of the Director, is in charge of all of our review processes, and will conduct reviews in accordance with FBI procedures," reads the note from Patel. "When and if further information is required, we will coordinate the responses. For now, please pause any responses."

The power struggles begin.

FBI Director Kash Patel tonight has instructed his employees to ignore ⁦@elonmusk⁩’s productivity inquiry, saying, essentially—we will evaluate our own people, thanks. pic.twitter.com/BkisigRPNq

— Ken Dilanian (@KenDilanianNBC) February 23, 2025

Meanwhile, at least one federal employee apparently don't have time to answer the email - but did have time to complain to a MSM reporter about having to do it.

First off, if this federal employee had time to email a left-wing reporter, surely she had time to email her manager about what she accomplished last week. Also, she took sick leave last week so she can just say that she took the week off from work. Why is this all so dramatic? https://t.co/A2AjlWf2H3

— Mollie (@MZHemingway) February 23, 2025

*  *  *

Elon Musk is 'running the Twitter playbook on the government,' after writing in a Saturday post on X that all federal employees will be receiving an email "shortly" requesting to "understand what they got done last week."

Those who fail to reply "will be taken as a resignation."

Consistent with President @realDonaldTrump’s instructions, all federal employees will shortly receive an email requesting to understand what they got done last week.

Failure to respond will be taken as a resignation.

— Elon Musk (@elonmusk) February 22, 2025

And there it is (though no mention of the implied resignations for failure to respond):

New: America's diplomats serving around the world have now received Elon Musk's email asking them to explain their work, per a diplomatic source. Here it is, subject line: "What did you do last week?" https://t.co/4bOxUGpSF7 pic.twitter.com/3sXspFUB1C

— John Hudson (@John_Hudson) February 22, 2025

When X user 'The Rabbit Hole' commented that Musk is "running the Twitter playbook on the government," Musk replied: "It works."

It works https://t.co/TFkpHlJa7a

— Elon Musk (@elonmusk) February 22, 2025

The post came hours after President Donald Trump encouraged Musk to "get more aggressive" with the Department of Government Efficiency (DOGE), adding "REMEMBER, WE HAVE A COUNTRY TO SAVE."

So awesome https://t.co/t2yAXh8qFZ

— Elon Musk (@elonmusk) February 22, 2025

Musk's email comes after roughly 77,000 federal employees accepted DOGE's "Fork in the Road" email offering roughly 8 months of pay in exchange for resigning. After that, DOGE moved to fire thousands of employees across various agencies - mostly those in a probationary period who have been in their jobs for less than one year.

It also comes after the Trump administration scored a legal victory when a judge allowed Musk and crew to continue accessing federal data and arranging for mass layoffs.

Last week, Trump signed an executive order directing agencies to work with DOGE to make "preparations to initiate large-scale reductions in force."

*  *  *

 

Tyler Durden Sun, 02/23/2025 - 22:57

Trump's Overhaul Of The ATF Could Make Firearms Suppressors Easier To Purchase

On Friday, February 7th, 2025, President Trump signed the first pro-Second Amendment Executive Order in US history - The order effectively reverses the unconstitutional firearm restrictions imposed by the Biden administration and empowers Attorney General Pam Bondi to conduct a review of all executive actions, regulations, guidance, and policies implemented under the previous administration through the ATF.

Another stunning development is the announcement that recently confirmed FBI Director Kash Patel will also be the acting head of the ATF as the agency is put under review.  Acting directors are usually installed for a little over a year until a permanent replacement is found.  That said, the decision may hint at a future deconstruction of the ATF and a reduction in their scope and power (dissolving the ATF completely is unlikely, but anything is possible with Trump).

In the meantime, by March 10th, 2025 the DOJ must present a plan to the President outlining steps to safeguard the Second Amendment rights of all Americans.  The order also includes a review of a 100-year-old law passed during the prohibition era which makes transfer applications for certain categories of firearms and firearms parts incredibly difficult.  Form 4 applications for suppressors would be a key subject of this review. 

For decades gun rights advocates have tried and failed to reduce the red tape surrounding suppressors (sometimes referred to as "silencers").  For most buyers, the cost of the muzzle device becomes prohibitive, in part due to bureaucratic limitations on manufacturers, background checks, a tax stamp and long wait times for ATF approval.  For most individual buyers the cost of a suppressor runs in the $1000 - $1500 range along with the $200 stamp, all paid up front.  Then, there's a wait time of a year on average before the buyer can hold the device in his hands.  

The obstacles involved are entirely artificial and are obviously designed to dissuade most gun owners from bothering; but why?  

 

Some gun rights advocates argue that the ATF and anti-gun politicians do not understand what suppressors are and how they work because they get most of their information from Hollywood films. The assumption among anti-2A activists and bureaucrats is that a suppressor is simply screwed onto the muzzle of any gun and that gun will then become silent.  They also assume that only "assassins" would have any use for such a device.  This is simply not true.

In reality, suppressors do not silence most firearms.  They do reduce the effect of gunshots on the shooter's hearing, but any supersonic round fired from a suppressed weapon will still make a very audible explosive bang.  The more quiet gunfire commonly seen in movies and TV would require specialized subsonic rounds with far less powder through a suppressed muzzle.  The downside of shooting subsonic ammo is that range, accuracy and sometimes effectiveness on target are sacrificed. 

Subsonic rounds have a muzzle velocity of 1050 fps or less, compared to the average 5.56 round which has a muzzle velocity of around 3000 fps.  Subsonic rounds also have a common problem of "keyholing"; the bullet does not stabilize properly and spins in flight ruining its accuracy.  Not to mention, adding any device to the muzzle of a gun can cause dramatic impact shift, which needs to be taken into account.

 

In other words, using a suppressor beyond short range requires extensive knowledge of ballistics, barrel harmonics, twist rates and reloading experience.  It's not something the average low IQ criminal is going to take advantage of (or something a low IQ ATF bureaucrat is going to understand).  

The US military recommends and issues suppressors for many combat troops, but not so much for going quiet.  Instead, suppressors help cut down on muzzle flash, limit sound pressure waves when room clearing and help to hide thermal signature from gun shots.

In some European countries suppressors are easy to buy (compared to purchasing a firearm) and are actually required by law for outdoor shooting.  In the US the exact opposite is true.        

Numerous gun rights groups are anxiously waiting for the Attorney General's review of ATF restrictions with specific interest in suppressors.  The level of red tape surrounding this gear is absurd and should have been reformed years ago.  Thousands of dollars in cost on top of a year long wait time makes little sense other than to make life difficult for firearms enthusiasts.

Tyler Durden Sun, 02/23/2025 - 22:45

Cyberattack Hits Maryland County That's Home To NSA Headquarters

Anne Arundel County, Maryland—home to several federal agencies and the US Naval Academy—has been hit with a multi-day cybersecurity attack blamed on "external origin." 

"The county is taking the most proactive approach to ensure our systems are safe. Precautionary measures include limiting access to the Internet until we are able to return to full operations," the Anne Arundel County Government posted on X.

The county said, "Based on our conversations with cyber specialists, this is a multi-day event. We do not have a timeline for full service restoration yet," adding, "We are engaging with each department to identify and discuss their current state of operational needs."

Based on our conversations with cyber specialists, this is a multi-day event. We do not have a timeline for full service restoration yet.

We are engaging with each department to identify and discuss their current state of operational needs.

— Anne Arundel County Government (@AACountyGovt) February 23, 2025

Details on which public services have been disrupted remain scant. However, the county has assured the public that "911 remains operational for emergencies, and 311 remains available for non-emergency reports."

The county is located about 30 miles east of Washington, DC, and is home to key federal agencies, particularly those related to defense, cybersecurity, and law enforcement:

Defense and Intelligence Agencies:

1. National Security Agency (NSA) – Located at Fort Meade, the NSA is responsible for signals intelligence (SIGINT) and cybersecurity operations.
2. U.S. Cyber Command (USCYBERCOM) – Also at Fort Meade, this command is tasked with defending military networks and conducting cyber operations.
3. Defense Information Systems Agency (DISA) – Provides IT and communications support for the Department of Defense (DoD).
4. Defense Media Activity (DMA) – Handles DoD media operations, including Armed Forces Network (AFN) and military public affairs.
5. Defense Courier Service (DCS) – A secure courier service for classified DoD materials.

Law Enforcement and Investigative Agencies:

1. Federal Bureau of Investigation (FBI) - Baltimore Field Office (Resident Agency) – Handles federal law enforcement operations for the region.
2. Naval Criminal Investigative Service (NCIS) - Washington Field Office – Investigates crimes related to the Navy and Marine Corps.

Military Installations:

1. Fort George G. Meade – A major U.S. Army installation housing intelligence and cybersecurity units.
2. Naval Support Activity Annapolis (NSA Annapolis) – Provides base support for the U.S. Naval Academy.
3. U.S. Naval Academy (USNA) – A premier military academy training future naval officers.

Other Federal Agencies:

1. National Cryptologic Museum (NSA-affiliated) – A public museum focused on cryptography and intelligence history.
2. U.S. Department of Homeland Security (DHS) - Various Cybersecurity & Infrastructure Security Agency (CISA) offices – Engaged in national cyber defense.

Local media Baltimore Banner's Rick Hutzell was told by Renesha Alphonso, a spokeswoman for County Executive Steuart Pittman, that the "full picture of the impact" is still being determined. She added that service disruption started early Saturday. 

WBAL's Torrey Snow jokingly wrote on X: "Was somebody promised a fortune by a desperate Nigerian princess?" 

Tyler Durden Sun, 02/23/2025 - 22:10

Maryland Democrats' 'Extremist' Green Agenda Sparks Power Bill Crisis Crippling Households

Apocalyptic environmentalism by Maryland's far-left Democratic leadership in Annapolis has plunged the state into a severe energy crisis, with power bills doubling in some cases and 20% of households in Central Maryland now behind on payments.

The worsening power crisis was detailed at length in a note last year titled Maryland "Can't Import Itself Out Of Energy Crisis" Amid Urgent Need To Boost In-State Power Generation ...

Maryland "Can't Import Itself Out Of Energy Crisis" Amid Urgent Need To Boost In-State Power Generation https://t.co/koca85kmfY

— zerohedge (@zerohedge) July 13, 2024

The takeaway is that Maryland's far-left leadership is more focused on apocalyptic environmentalism—inherently de-growth and pro-inflation in nature—while also prioritizing illegal aliens over their citizens. This represents a major violation of their oath of office, which requires them to uphold the general welfare of citizens.

Marylanders are quickly learning that local elections matter. Electing far-left activists into positions of power who have no business being in managerial roles has severe consequences, and the most immediate one is the pocketbook. 

This comes from the local media outlet WMAR:

1.3 million BGE electric customers in Central Maryland, just over half of them also paying for natural gas, and more than 264,000 of them are behind on their bills

Last August, Goldman Sachs warned clients about Maryland's deteriorating power grid situation: "After a series of auction delays and relatively low clears (see chart below), PJM capacity prices appear to have finally caught up with the generative AI data center load growth story that has been central to parts of PJM."

Goldman Says Mid-Atlantic Power Prices "Finally Caught Up To AI Data Center Load Growth Story" https://t.co/6BInBek7Zz

— zerohedge (@zerohedge) August 4, 2024

The headlines from local media outlets capture the power crisis of exploding power bills, which is not just figuratively crushing pocketbooks but also resulting in anger and disgust for Democrats who have failed the state. 

If you search "Maryland power bill" on Facebook, you'll find many frustrated residents voicing their outrage ...

"Energy Bills are ballooning out of control due to EXTREMIST ENVIROMENTAL MANDATES!" Republican Delegate Brian Chisholm wrote on Facebook. 

Resident Ronald Coster said: "The reason why our electricity bills are going so high,Maryland has to buy 40%of the power needed from surrounding states. Gov. Moore and the Democrat politicians will not allow new power plants." 

Marylanders must discuss with their neighbors whether Annapolis lawmakers are incompetent or deliberately sabotaging the state by bankrupting their residents with toxic green inflationary policies.

A recent conversation with a major asset management firm in the region revealed that Maryland's financial situation is so dire that they no longer recommend the state's municipal bonds to their clients—and have even advised some clients to leave due to fears of out-of-control tax hikes.

On top of this all, Democrats and Gov. Wes Moore have placed the state in a death spiral with a budget crisis that has arrived and risks a "deep recession." 

Maryland's Death Spiral: Reckless Democratic Lawmakers Spark Budget Crisis Fears As "Deep Recession" Looms https://t.co/reReKpxTsN

— zerohedge (@zerohedge) November 28, 2024

All you need to know about Wes Moore. Agent of Soros?

Here’s all you need to know about why Maryland is FORCING wind energy, EV mandates, higher taxes, @VinSchiraldi and illegal immigrants on us: pic.twitter.com/roCOI7RIeb

— Wes Moore’s Bronze Star (@Patrick88297358) January 25, 2025

Maryland's financial troubles were festering under the surface well before Trump. The state's economy doesn't produce much but relies heavily on government services. Now, with DOGE draining the swamp and hundreds of thousands of federal workers being laid off, a perfect storm of pain has unfolded.

"Government Recession Begins": DC Active Home Listings Soar, Jobless Claims Spike As DOGE Drains Swamp https://t.co/1vP15sKxff

— zerohedge (@zerohedge) February 16, 2025

Maryland's conservatives in the House of Delegates have jumped into action to protect residents while Democrats are still focusing on making sure ICE doesn't arrest illegal alien criminals.

Can't make this up. Maryland Democrats are focusing on condoms for kindergarteners rather than tackling the power crisis. 

Condoms for Kindergarteners — this is the priority of @mddems. Rather than supplying the grid with more power and lowering electric bills, or giving children stuck in failed schools a better option, Annapolis Democrats want to put condoms in kindergarten classrooms. Sad. pic.twitter.com/rpBog5jkgd

— Mark Fisher (@fisher4maryland) February 21, 2025

Marylanders are in for a period of pain—but that may be just enough to fuel grassroots efforts over the next election cycle or two to elect common-sense lawmakers who put "Maryland First." 

Tyler Durden Sun, 02/23/2025 - 21:00

NYC Suspected Migrant Gang Members Arrested On Gun Charges, But Released On Reduced Charges

Two men arrested in a Feb. 5 gun and drug raid at a New York City auto repair shop were later released on reduced charges that may not lead to prosecution, according to police and court records - despite being suspected members of the Venezuelan Tren de Aragua (TdA) gang, which has been spreading violence across the country.

Jose Tamaronis-Caldera, 27, and Richard Garcia, 33, were taken into custody after authorities seized a Glock handgun, two imitation pistols, and a significant amount of drugs. While sources told the New York Post of their gang ties, the NYPD has not confirmed their affiliation, according to Fox News.

Rafael Nieves, 54, the alleged owner of V&R Auto and Collision in Woodside, Queens, was also arrested during the raid. Initially facing felony drug and gun charges, his charges were later reduced to criminal possession of a firearm, an imitation handgun, and a controlled substance in the seventh degree, none of which qualify for bail.

Prosecutors noted the gun was unloaded with no ammunition nearby, and the drugs—cocaine and oxycodone—were found in an office area. 

Photo: NY Post

Jose Tamaronis-Caldera and Richard Garcia, who were also arrested, saw their charges downgraded to two misdemeanors—possession of an air pistol or rifle and possession of an imitation firearm—allowing them to be released without bail. Under an adjournment in contemplation of compliance (ACD), their charges will be dismissed after Aug. 5 if they avoid further offenses.

The Fox News report says that the Queens DA's Office defended the handling of the case, stating, "The DA's office reviews all evidence and charges as warranted. In this case, the weapon charge against defendant Nieves is for an unloaded firearm and is not bail-eligible. Our office asked for supervised release, and the judge granted supervised release."

Prosecutors also noted that charges against Garcia and Tamaronis-Caldera were limited to air pistol possession, making them ineligible for bail.

Tamaronis-Caldera and Nieves reside at the Crowne Plaza JFK Airport migrant shelter, while Garcia lives at the Roosevelt Hotel shelter in Manhattan, police said. Both Tamaronis-Caldera and Garcia crossed the U.S. border illegally in 2023 but were later released, according to federal immigration sources.

A law enforcement official criticized the leniency, telling the New York Post, "These are not misguided individuals. They’re documented members of a known violent criminal enterprise... and the best we can do is let them out?"

Migrant-related crime has surged under the Biden administration amid record border crossings. Last month, Department of Homeland Security Secretary Kristi Noem revealed that a TdA gang leader arrested in the Bronx had attempted to buy grenades after a weapons deal. "Why would anybody in this country need to buy a grenade and go out and perpetuate violence?" Noem said.

Tyler Durden Sun, 02/23/2025 - 19:50

Tax-Cutting Governors Experience Growth

Authored by Jonathan Williams & Joshua Meyer via RealClearPolicy,

Americans tend to vote with their feet. Moving from one state to the next depends on which state offers them the best opportunity to thrive. Tax structures, regulations, and business climates - all handed down by their local elected officials - directly impact their decision-making process. After the US Census Bureau released its latest net domestic migration report last month, it’s become clear that elected officials from the low tax states made the right call.

Texas led the nation with the highest net in-migration from July 2023 to July 2024, gaining over 85,000 people. It was followed by North Carolina, South Carolina, Florida, and Tennessee. Together these states added nearly 350,000 new residents. What do they have in common? Low taxes, fewer burdensome regulations, and policies that foster economic opportunity. Those attributes attract individuals and businesses seeking a free enterprise environment where economic opportunity may thrive.

In stark contrast, states with policies that stifle competition and impose high costs on businesses continue to lose residents. For the fourth consecutive year, California experienced the largest net outflow, with nearly a quarter of a million people leaving during the 12-month period. In the last five years, the Golden State has lost more than 1.4 million people on net. That loss represents not only a dwindling population but a profound economic loss. Taxpayers, businesses, and jobs leaving the state compound the fiscal difficulties California is already juggling. In 2024, this contributed to a $47 billion budget deficit, forcing policymakers to deplete their rainy-day fund and raise taxes.

California’s struggles are not unique. Other high tax states like New York, Illinois, New Jersey, and Massachusetts are also experiencing significant outmigration. Combined, these five states lost nearly 500,000 residents on net according to the Census Bureau report. The common thread is an overreliance on high taxes, excessive regulation, and policies that discourage business growth. The irony is that the promise of fairness and security often produces the conditions that drive away those the states hope to serve.

Working with Dr. Arthur Laffer and Steve Moore over the past 17 years, and we have compiled the Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, ranking states based on key economic policies. We’ve identified 15 policy variables—such as income taxes, property taxes, spending, and regulatory policies —that influence migration patterns. Our findings are clear: states with economically competitive policies attract the most people. In 2024, the top 15 states in our rankings all saw net domestic in-migration, proving that sound economic policies can help drive success.

West Virginia provides a striking example of how policy reform can reverse a state’s fortunes. Once known for economic decline and outmigration, West Virginia has seen a remarkable turnaround in the past few years. In 2008, the state ranked 38th in Economic Outlook in Rich States, Poor States. By 2024, it had improved to 23rd, and, more importantly, it had experienced four consecutive years of net in-migration (after decades of consistent out-migration). This success is largely due to policy changes that create a more competitive environment, including a reduction in personal income taxes, protecting workers with Right-to-Work legislation, and a strong emphasis on education freedom. West Virginia’s turnaround has inspired other states, with 12 adopting similar education reforms and 25 reducing income taxes since 2021.

The success of West Virginia and others demonstrates that both economic and educational freedom are powerful drivers of growth –especially so when a state pursues both. Four of the ten states attracting the most people have no income tax, and another four have flat personal income taxes.

The lesson for policymakers is clear: your policies have a significant impact on whether your state attracts or loses residents. States that embrace low taxes, minimize burdensome regulation, and foster individual freedom create environments where people and businesses thrive. In contrast, states that burden their residents with high taxes and stifling regulations will continue to see their citizens leave for more competitive states.

As we look ahead to 2025, it’s evident that the future belongs to states that prioritize economic and educational freedom. These states will attract growth, create opportunity, and foster the conditions necessary for long-term prosperity. The key to success lies in the understanding that sound policies are what truly drive economic progress. For hardworking taxpayers across America, that’s exactly what they voted for in November and what they will demand going forward.

Jonathan Williams is the President and Chief Economist of the American Legislative Exchange Council. Joshua Meyers is the Tax and Fiscal Policy Task Force Director of the American Legislative Exchange Council

Tyler Durden Sun, 02/23/2025 - 18:40