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More USAID Fraud? Billions Of US Tax Dollars Are Missing From Haiti Relief Projects

More USAID Fraud? Billions Of US Tax Dollars Are Missing From Haiti Relief Projects

There are those that say all government aid is a scam in one way or another, and so far the revelations surrounding USAID are proving those people right daily.  Democrats and the establishment media, in a bid to muddy the waters and save face, continue to claim that there was never any fraud at USAID and that the Trump Administration is simply labeling projects they "disagree with" as suspect. 

Of course, spending American tax dollars on projects the public never asked for and were never told about is the epitome of fraud, and waste is never a good thing.  Beyond that, the question of billions in missing funds certainly falls into the category of criminality. 

Trump has taken a lot of heat from the media with the shut down of USAID and much of the criticism suggests that without US funds people in third world countries will fall back into desperation.  The Washington Post recently claimed that Trump's cuts to USAID are a "gift to Haitian gangs" terrorizing the locals; a typical leftist appeal to emotion that assumes most of the funds were getting to the Haitians in the first place. 

Yet another example of this problem has been revealed in a New York Post expose on the audit of USAID which shows a disturbing shortfall in funds surrounding ongoing relief projects in Haiti.  The Post notes:

"Since the 2010 earthquake in Haiti killed as many as 300,000 people, the US government has disbursed around $4.4 billion in foreign assistance to the small island nation.

At least $1.5 billion was disbursed for immediate humanitarian aid, while another $3 billion went to recovery, reconstruction and development.

Of the at least $2.13 billion in contracts and grants for Haiti-related work, less than $50 million, or 2% went to Haitian organizations or firms. By comparison, $1.3 billion, or 56%, has gone to firms located in or near the US capitol. Little wonder USAID is so threatened by the sudden scrutiny.

It remains unclear how exactly the billions have been spent and whether US tax dollars have had a sustainable impact. USAID and its vendors have generally failed to make such data public..."

The exposure of USAID by DOGE actually confirms long running suspicions of mishandled aid.  Some Haitian reporters warned about this disappearing money years ago under the Obama Administration.  USAID funds to Haiti were dispersed in part through the Clinton Foundation. 

The lack of funding transparency was also noted by the Government Accountability Office (GAO) in 2023.  Though, not surprisingly, the impotent agency did nothing about it.  The GOA stated in their analysis of USAID activities in Haiti: 

"The USAID mission in Haiti does not fully track data on its local partnerships, or its activities to strengthen local organizational capacity, which limits institutional knowledge about these efforts and understanding of results and lessons learned to inform future activities."

"The Administrator of USAID should ensure that USAID/Haiti develops a process to track and assess consistent and complete results information for infrastructure activities, such as the final outputs, outcomes, costs, time frames, and lessons learned."

"The Administrator of USAID should ensure that USAID/Haiti establishes a process to completely and consistently track and analyze data on awards made to local organizations, such as the amount and percent of total funding awarded and the percent of total awards provided to these organizations."

Of the five "recommendations for executive action" put forward by the GAO for USAID, two are marked as "completed".  Transparency was never achieved and no one was held accountable.  The question is, if only 2% of the $4.4 billion allotted for Haitian relief was actually used in Haiti, where did the rest of the money go?

As the New York Post points out, 56% went to firms located in or near the US capitol, and apparently the money stayed there.  A comprehensive forensic accounting of these funds (along with all other missing funds) needs to be undertaken and tracked to the recipients.  Not just because it is is politically advantageous for the Trump Administration, but because justice needs to be served for once in the case of government fraud.  Americans are tired of seeing bureaucratic conmen get away with it. 

The public is welcome to debate whether or not any American taxes should be spent in Haiti (proximity to the US does not mean they are entitled), but if the money was already sent and it never arrived, then whoever took it stole from both sides of the equation - Americans and Haitians. 

Tyler Durden Sun, 02/23/2025 - 16:55

Zelensky Says 'Ready' To Resign For The Sake Of Peace, NATO Membership

Zelensky Says 'Ready' To Resign For The Sake Of Peace, NATO Membership

Speaking at the "Ukraine: The Year 2025" forum on Sunday, Ukrainian President Volodymyr Zelensky told an audience of all heads of ministries, agencies, and top officials that he's ready to resign as president if it brings peace. He suggested the country be guaranteed NATO membership in exchange for his stepping down.

"I am ready to leave my post if it brings peace. Or exchange it for NATO," Zelensky said in response to journalists' questions, and at a moment he's feeling immense pressure from US President Donald Trump. Ukraine regional media Kyiv Post was among the first to report the resignation comments.

Via Associated Press

The same statement was also translated in Russian state media as follows: "If peace for Ukraine, if you really need me to leave my post, then I’m ready. I can exchange this for NATO, if there are such conditions. I am focusing on the security of Ukraine today, not in 20 years, and I do not intend to be in power for decades," Zelensky said. He still asserted that martial law has to be lifted before their can be national elections, according to Ukraine's constitution.

This comes after a week of an open spat with the White House, wherein Trump called Zelensky a 'dictator' for refusing to hold democratic elections and for criticizing US efforts at achieving peace with Moscow. Kiev complains it's been cut out of US-Russia engagement, while Trump has pointed out the Ukrainians and Europeans had three years in which they rebuffed peace openings at every turn.

Zelensky briefly addressed this tit-for-tat at the forum, saying he is not offended by Trump calling him a dictator as he's not a dictator, according to the remarks.

Zelensky tries to brush off Trump calling him a 'dictator': "Only a dictator would be offended by the word dictator."

According to Ukraine media sources, Zelensky on Sunday "also announced an important international summit on the Russo-Ukrainian war scheduled for Monday, Feb 24. Leaders from 13 partner countries will attend in person, while 24 others will join online. Zelensky hinted that major decisions could come from the meeting."

"Tomorrow’s summit is crucial. It might even be a turning point – we’ll see," he said. Zelensky in the comments affirmed that previously approved military aid continued to flow, but that Ukraine still needs 20 Patriot air defense systems.

He explained his government needs to sign agreement that will be 'win-win' for both US and Ukraine, 'pleasant' for both parties. But so far the haggling over mineral rights has been anything but pleasant.

Ukrainian Foreign Minister Andrii Sybiha addressed the same forum and said the following, "We are convinced that in this third year of brutal Russian aggression, we truly have a chance. We are telling many partners that perhaps now is the time to fasten diplomatic seat belts. We must not give in to emotions."

There have been weekend reports that the two sides are close to achieving a mineral deal. However, the US side has stuck by some demands that Zelensky and his officials previously rejected as not doable.

"Ukraine on Saturday was seriously considering a revised American proposal for its vast natural resources that contains virtually the same provisions that Kyiv previously rejected as too onerous, according to Ukrainian officials and a draft of the deal," The New York Times reports.

"In fact, some of the terms appear even tougher than in a previous draft," the report emphasizes. "The latest proposal comes after a week in which President Volodymyr Zelensky of Ukraine resisted signing the earlier version in a public dispute with President Trump."

Tyler Durden Sun, 02/23/2025 - 13:25

House Speaker Johnson Responds To The Idea Of 'DOGE Dividend' Checks

House Speaker Johnson Responds To The Idea Of 'DOGE Dividend' Checks

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

House Speaker Mike Johnson (R-La.) on Thursday appeared cool to the idea that the Trump administration could send checks to Americans based on savings related to the Department of Government Efficiency (DOGE).

House Speaker Mike Johnson (R-La.) speaks during the annual Conservative Political Action Conference (CPAC) at the Gaylord National Resort & Convention Center at National Harbor in Oxon Hill, Md., on Feb. 20, 2025. Saul Loeb/AFP via Getty Images

When discussing the prospect on Thursday, Johnson downplayed the idea in light of the budget deficit, while allowing that it would be politically beneficial to the Republican Party.

“Everybody loves a check, but ... we have a giant deficit. I think we need to pay down the credit card,” he told a crowd at the Conservative Political Action Committee (CPAC) event held in Washington on Thursday. “Fiscal responsibility is what we do,” he added, according to live streaming video of the event.

Earlier this week, President Donald Trump and Elon Musk, a Trump adviser who championed the work of DOGE, said that checks might be distributed to Americans.

A day earlier, Trump said at the FII Priority summit, an investment conference in Miami, that his administration is “thinking about giving 20 percent back to the American citizens and 20 percent back to pay down debt.”

Trump also said the potential for dividend payments would incentivize people to report wasteful spending. “They’ll be reporting it themselves,” Trump said. “They participate in the process of saving us money.”

Later, as the president flew back to Washington aboard Air Force One, a reporter asked him about the plan floated by Musk.

“I love it,” Trump said.

Earlier this week, Musk wrote on his social media platform X that he “will check with the president” in response to a suggestion that Trump and Musk should announce a “DOGE Dividend” that would send a refund to taxpayers from part of the savings resulting from DOGE’s audits of federal agencies and programs. Its efforts to downsize the government have also led to thousands of federal government employees being fired or laid off.

In a press briefing on Thursday, Trump’s deputy chief of staff for policy, Stephen Miller, said the checks would be worked on in the budget reconciliation process in Congress. He said Congress needs to pass a measure in order to send those checks.

“This is all going to be worked on in the reconciliation process that is going on right now,” Miller said.

Miller, Trump, and Musk have not provided further details about the refund proposal. The Epoch Times contacted the White House press office for comment.

In terms of cost-cutting, U.S. Treasury Secretary Scott Bessent said in a Fox News interview that about $50 billion in spending has been slashed due to DOGE’s findings since it started.

“So that’s a very good start,” Bessent said, adding that DOGE’s efforts could ultimately lead to “several percent” of the U.S. gross domestic product, or GDP, in savings.

Responding to criticism about the Musk-affiliated agency that was created by Trump in an executive order last month, Bessent said that Americans “don’t have to be concerned” about DOGE’s activity in the IRS.

DOGE and Musk have recently faced multiple lawsuits, including one filed by tax groups earlier this week that accused the advisory body of possibly violating American taxpayers’ privacy. In a separate case, meanwhile, a federal judge in Washington declined to block Musk and DOGE from accessing data or suggesting cuts at seven federal agencies.

The Associated Press contributed to this report.

Tyler Durden Sun, 02/23/2025 - 12:50

The Collapse Of The Zelensky Cult

The Collapse Of The Zelensky Cult

Authored by Jeff Carlson & Hans Mahncke via Truth Over News,

At long last, someone has said it. Trump has finally called it like it is—Zelensky is the emperor with no clothes. In fact, he’s the dictator with no clothes, propped up by Western elites who refused to see what was in plain sight. But the illusion is shattered. Trump didn’t just call him a dictator, he shut him out of peace talks and made it clear that if Zelensky wants to be taken seriously, he needs to hold elections, abandon his defiant posturing, and start behaving like a statesman rather than a petulant client.

For years, wherever Zelensky went, Western elites and their media lapdogs treated him as untouchable—questioning him was practically a crime. The adulation didn’t even begin in 2022 when full-scale war erupted. It started back in 2019, when Zelensky became the vehicle for Trump’s first impeachment, cast as the poor, beleaguered leader whom Trump had supposedly tried to extort. It was all a lie, but that didn’t matter. The media and political class needed him propped up, so they did—shielding him from scrutiny no matter how absurd his behavior became.

The arrogance and defiance Zelensky has displayed didn’t emerge in a vacuum—it was merely the latest chapter in a pattern of reckless entitlement that defined Ukraine’s political class long before he took office. To understand it, we have to go back to 2016, when Ukrainian officials blatantly interfered in the U.S. election, attacking Trump in a way that was not just unprecedented but completely beyond the norms of international relations. It’s one thing for a foreign power to quietly prefer one candidate over another—but for a small, dependent country to openly wage political warfare against the leading contender in a U.S. presidential race was madness.

Their prime minister publicly denounced Trump, claiming he “challenged the very values of the free world.” Ukraine’s Interior Minister went even further, calling Trump a “dangerous misfit” who was “dangerous both for Ukraine and for the United States to the same extent.” Their ambassador to Washington launched a blistering op-ed—something virtually unheard of in international diplomacy—and Ukraine’s intelligence services leaked a fabricated ledger to sabotage Trump’s campaign manager, Paul Manafort, in an operation that led directly to Manafort’s ouster. Even Ukraine’s equivalent of a CIA director, Valentin Nalyvaichenko, later all but admitted to the interference, stating, “Of course, they all recognize that our [anti-corruption bureau] intervened in the presidential campaign.”

When Trump won anyway in 2016, he let it slide. He wasn’t going to punish Ukraine for backing the wrong horse. Instead, he sought peace—because, as the media and establishment so often overlook, the war in Ukraine didn’t begin in 2022 but in 2014, and it had long been Trump’s ambition to end it. But his hands were tied by the Russia collusion hoax, which effectively criminalized diplomacy with Moscow. Anytime he wanted to do anything, he was met by loud and hysterical screaming from the media, the establishment and Democrats. When the Russian ambassador visited the White House, as is totally customary, the media went apoplectic, accusing Trump of treason. When Trump met Putin in Helsinki in 2018, the hysteria reached off-the-charts proportions. Putin had given Trump a soccer ball from that year’s World Cup for Trump’s 12-year-old son, and the media claimed it may have been a listening device.

Trump was given no room to maneuver. Instead of pursuing peace, he was forced to arm Ukraine—a step even Obama had refused to take. Then came the impeachment hoax, with Zelensky at its center, making matters infinitely worse. Any attempt at serious negotiations—any engagement with Russia, any acknowledgment that peace requires concessions—would have been seized upon as proof that Trump was a traitor. The very idea of compromise was framed as “selling out” Ukraine, the same false charge leveled against Trump in the first place.

Wounded by the impeachment hoax, Trump was hobbled, and then came Biden. With him, Zelensky got everything he wanted—billions in weapons and reckless escalations that led directly to war.

For years we were told that NATO entry had nothing to do with the outbreak of the wider war in 2022, but now even the NATO chief admits NATO expansion was key to Russia’s invasion of Ukraine. In fact, Biden and his team of inept and corrupt comrades had all but promised Ukraine NATO entry in the lead-up to the 2022 war. Biden held out NATO membership to Ukraine in December 2021, as did his secretary of state, Antony Blinken. Defense Secretary Lloyd Austin went even further, saying the door was open to Ukraine for NATO membership during an October 2021 trip to Ukraine. And let’s not forget that Biden’s national security advisor, Jake Sullivan, was one of the chief architects of the Russia collusion hoax, which directly impeded Trump from being able to do anything during his first term.

Yet even as Biden and his team recklessly escalated tensions, Zelensky remained oblivious to the risks, convinced that the West’s blank check would never bounce. When the war exploded into a full-scale conflict in 2022, the U.S. poured hundreds of billions into Ukraine, fueling the fight with no clear strategy or exit plan.

Zelensky had one job: to prevent the war or, failing that, to end it as quickly as possible. Instead, he sold his country off—to Western cold warriors who saw Ukraine as a pawn, to proxy war zealots determined to prolong the fight, and to domestic grifters gorging on American largesse. When a real chance for peace emerged early in the war, he didn’t seize it. He threw it away at the command of Boris Johnson and Joe Biden, dragging Ukraine even deeper into a war that should never have happened.

As former German Chancellor Gerhard Schröder—one of the last of the old-guard Western leaders—later revealed, he had been mediating the Istanbul peace talks in April 2022. Ukraine and Russia had largely reached an agreement—until Johnson and Biden stepped in and told Zelensky to walk away. He obeyed, choosing war over peace at the command of those who had their own agendas—agendas that had nothing to do with the lives or deaths of hundreds of thousands of Ukrainians.

Yet even as public support waned and the global political landscape shifted, Zelensky refused to adapt—convinced that the money, weapons, and political backing would never stop flowing.

In September 2024, Zelensky came to the United States, and campaigned in Pennsylvania for Kamala Harris, completely oblivious to the possibility that she might lose. While in the United States, he also gave an interview to The New Yorker, making his feelings about Trump and JD Vance clear. Dismissing Trump outright, he claimed, “My feeling is that Trump doesn’t really know how to stop the war, even if he might think he knows how.” He was just as condescending toward Vance, calling him “too radical” and adding, “I don’t take Vance’s words seriously.” He even suggested that Vance needed to be educated by Jewish Americans, claiming they were “a strong power base in the United States.”

Those are hardly the words of a leader capable of navigating peace talks, adapting to shifting political winds, or showing even a trace of gratitude toward the American taxpayers who bankrolled his war. Instead of adjusting, Zelensky doubled down on his arrogance, blind to the fact that the very people he mocked might soon be the ones calling the shots.

Despite his endless missteps, poor political acumen, and habit of backing the wrong horse, Zelensky kept getting last chances.

Shortly after Trump’s inauguration, Treasury Secretary Scott Bessent visited Kiev to discuss financial matters. Zelensky’s response was more arrogance, refusing to agree to an arrangement to at least partly repay America’s colossal expenditures on Ukraine. And let’s not forget: U.S. taxpayers weren’t just funding the war effort. They were covering 90% of Ukraine’s media, paying Ukrainian pensions, and subsidizing their civil service. It wasn’t just about weapons—it was about propping up an entire state.

Zelensky had yet another chance to reset when he met Vance in Munich last week. He failed again. No humility, no recalibration—just the same tired routine.

Munich was likely the moment Trump and Vance concluded that as long as Zelensky remained in power, a peace deal was impossible. And how did he respond? By lashing out. Within a day of Munich, he was claiming that Trump “lives in a disinformation space,” only further cementing his own irrelevance.

For years, Zelensky behaved like a spoiled child indulged by weak-willed caretakers. Under Biden, no demand was too excessive, no tantrum too outrageous. When Trump arrived, he never adjusted and never recalibrated. And now the indulgence is over. The adults are back.

Trump made that unmistakable in a post yesterday on Truth Social, calling Zelensky what he is: a dictator. The media, Democrats, and European elites are in hysterics—but the truth is finally out. That which was once unsayable has now been said. For years, Zelensky wrapped himself in the language of democracy while shutting down opposition parties, silencing independent media, and, worst of all, canceling elections outright. That isn’t democracy—it’s dictatorship. The charade is over. And unless Zelensky undergoes a complete and immediate transformation, the war will end without him. One way or another, it is coming to a close. The show is over.

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Tyler Durden Sun, 02/23/2025 - 11:40

MSNBC Cancels Far-Left-Crazed Host Joy Reid As Woke Implosion Accelerates 

MSNBC Cancels Far-Left-Crazed Host Joy Reid As Woke Implosion Accelerates 

A major shake-up is underway at MSNBC as the network's new president has canceled far-left prime-time host Joy Reid's show, "The ReidOut," multiple sources familiar with the changes confirmed to The New York Times.

Reid's final episode is planned for sometime this week, according to sources, adding that her prime-time spot will be swapped out with several anchors, including political commentator Symone Sanders Townsend, former Democratic strategist and former chairman of the Republican National Committee Michael Steele, and journalist Alicia Menendez. 

The move signals Rebecca Kutler's effort to overhaul MSNBC after being named the network's president earlier this month. Ratings have plummeted since Trump secured the White House in last November's presidential election. Many hosts, including Reid, have been visibly struggling with severe cases of "TDS."

"Joy Reid's show getting canceled is devastating news for the left. Now where will they go for their daily dose of race-baiting lies and far-left conspiracy theories?!" journalist Breanna Morello wrote on X. 

The crazed TV host has been one of the loudest Trump bashers in corporate media and still does not have enough common sense to understand the Overton Window shifted last summer from artificially being held at the left to now center-right. 

Yet, to this day, she continues to spread far-left misinformation and disinformation propaganda, even as ratings plummet—not just for her show, but for the entire network.

Nielsen Media Research data shows that viewership for the ReidOut show has crashed 50% since Trump won the election. 

The latest cable news ratings as of Feb. 20 show that MSNBC was ahead of CNN but well behind Fox News in the prime-time news race. 

Here's some of the looney batshit crazy toxic propaganda the woke host (soon to be unemployed) pushed to the American people:

And it gets worse:

Oh - and remember when this happened?

Back to Kutler, a former senior executive at CNN, who has made it very clear that MSNBC faces severe headwinds in the Trump era. 

"Our jobs are hard on a normal day, and these are not normal times," Kutler told MSNBC employees on her first day. This comes as the dying network is being spun off by cable giant Comcast, NBCUniversal's parent company.

More shake-ups at MSNBC are ahead. NYT explained: 

Other major changes are expected at MSNBC. In January, Rachel Maddow, the network's best-known anchor, returned to hosting her 9 p.m. show five days a week during the first 100 days of the Trump administration after having scaled back to only Mondays. At the time, the network said that Alex Wagner, who had hosted the 9 p.m. show four days a week, would return at the end of April.

That is no longer the case. Instead, MSNBC is planning to appoint a new anchor to fill Ms. Wagner's spot, the two people said. A likely candidate for that hour is Jen Psaki, a former White House press secretary in the Biden administration, who hosts shows on Sunday at noon and 8 p.m. on Mondays, the people said, though adding that this decision hadn't been finalized.

This comes as dying corporate media has spent the last 15 years pushing an info war of a woke agenda on the American people to divide the nation instead of actually reporting the news. The result has been not only a collapse in public trust but also a sharp decline in ratings.

Not even the government's censorship blob could keep leftist corporate media alive, as alternative news media is set to flourish in an era under Trump's executive order called "Restoring Freedom Speech and Ending Federal Censorship."

*  *  *

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Tyler Durden Sun, 02/23/2025 - 11:05

Margin Balances Suggests Risks Are Building

Margin Balances Suggests Risks Are Building

Authored by Lance Roberts via RealInvestmentAdvice.com,

New Coronavirus Discovery Shakes Markets

Last week, we discussed that continued bullish exuberance and high levels of complacency can quickly turn into volatility. As we noted then, introducing an unexpected, exogenous event can soon lead to a price decline if investors begin to reprice forward expectations. On Friday, that unexpected event presented itself when China, and most notoriously, the Wuhan Lab, reported the discovery of a new coronavirus in bats. To wit:

“Another coronavirus feared to be powerful enough to spread through humans has been discovered in China. In scenes eerily reminiscent of the beginnings of Covid, researchers at the infamous Wuhan Institute of Virology detected the new strain living within bats.

HKU5-CoV-2 is strikingly similar to the pandemic virus, sparking fears that history could repeat itself just two years after the worst was declared over. The new virus is even closer related to MERS, a deadlier type of coronavirus that kills up to a third of people it infects. Virologist Shi Zhengli, known as ‘Batwoman’ for her work on coronaviruses, led the discovery, published in a top scientific journal.”

While this may or may not be an issue, it doesn’t take much to cause a market reversal when markets are elevated and highly bullish. As discussed last week, the market broke out of the bullish consolidation and set new record highs. However, that breakout was brief, and the news on Friday led to a retest of the 50-DMA and the triggering of the MACD “sell signal.” Such indeed suggests there could be more price pressure next week.

However, we want to give the market a few days to review the news. First, Friday was also an “options expiration” event, which added to the selling pressure in the market when the “virus” news hit. Secondly, the virus news will be thoroughly digested over the weekend and, by Monday, should be discounted in the markets. However, if the virus begins to replicate and spread, markets will have to evaluate further the risk to economic growth and earnings.

For now, we suspect markets will likely stabilize between the 50 and 100 DMA, reducing the bullish exuberance in the market. This will provide a better base on which to build as we enter the last three months of the seasonally strong period of the year. As noted previously, while there are certainly market risks, like sharp increases in leverage and speculation, there are currently no signs of that breaking—at least not yet.

Friday’s sell-off is precisely why we continue reiterating the need to rebalance risk and manage allocations.

Speaking of leverage, I want to expand on the margin debt discussion from Tuesday.

What Are Margin Balances And Why Are They Important?

On Tuesday, I touched on the continued increase in investor exuberance in the market. One sign of that exuberance is increases in margin balances. However, many may be unaware of what margin balances are and why they are noteworthy.

“Margin debt refers to the money an investor borrows from a brokerage firm to buy securities, using their existing portfolio as collateral. It allows investors to leverage their capital, meaning they can control more assets with a smaller upfront investment. While margin can amplify gains, it also increases risks, as losses are also magnified when markets decline.” – ChatGPT

When investors buy stocks on margin, they must deposit an initial amount (known as the initial margin), typically 50% of the purchase price per Regulation T set by the Federal Reserve. The brokerage firm lends the remaining balance.

For example, an investor with a $30,000 investment account invested in Apple (AAPL) can borrow up to $15,000 on margin to buy additional equities. However, using margin balances carries several risks.

  1. Margin Call – If the value of the securities drops below a certain level (the maintenance margin, usually 25%), the brokerage may issue a margin call, requiring the investor to deposit more funds or sell securities to cover losses.
  2. Amplified Losses – If an investor buys a stock on margin and it declines, they could lose more than their initial investment.
  3. Market Impact – High levels of margin debt in the market can contribute to bubbles and crashes. When markets decline sharply, forced liquidations from margin calls can lead to accelerated selling and increased volatility.

Margin balances represent the amount of speculation occurring in the market. In other words, margin debt is the “gasoline,” which drives markets higher as the leverage provides for the additional purchasing power of assets. However, leverage also works in reverse, as it supplies the accelerant for more significant declines as lenders “force” the sale of assets to cover credit lines without regard to the borrower’s position. As noted on Tuesday, it should be unsurprising that there is a high correlation between investor sentiment and margin balances.

The last sentence is the most important. The issue with margin debt is that the unwinding of leverage is NOT at the investor’s discretion. That process is at the discretion of the broker-dealers that extended that leverage in the first place. (In other words, if you don’t sell to cover, the broker-dealer will do it for you.) When lenders fear they may not recoup their credit lines, they force the borrower to put in more cash or sell assets to cover the debt. The problem is that “margin calls” generally happen simultaneously, as falling asset prices impact all lenders simultaneously.

Margin debt is NOT an issue – until it is.

So, where are we currently?

Margin Debt Confirms The Exuberance

I want to start with what I wrote in that previous post and then expand further into margin balances and the potential warning signal for investors. Let’s start where I left off.

“When we specifically look at margin debt, a loan against underlying collateral in brokerage accounts, those debt levels have surged to a record. As shown above, the year-over-year rate of change in debt is rising sharply but certainly can go further if retail exuberance continues.”

“However, look at the red line, “free cash balances.” As noted, margin debt supports the advance when markets rise as investors can leverage additional leverage to increase buying power. Therefore, the recent rise in margin debt is unsurprising as investor exuberance climbs. The chart below shows the relationship between cash balances and the market. I have inverted free cash balances, so the relationship between increases in margin debt and the market is better represented. (Free cash balances are the difference between margin balances less cash and credit balances in margin accounts.).“

“Note that during the 1987 correction, the 2015-2016 “Brexit/Taper Tantrum,” the 2018 “Rate Hike Mistake,” and the “COVID Dip,” the market never broke its uptrend, AND cash balances never turned positive. Both a break of the rising bullish trend and positive free cash balances were the 2000 and 2008 bear market hallmarks. With negative cash balances at another all-time high, the next downturn could be another “correction.” However, if, or when, the long-term bullish trend is broken, the unwinding of margin debt will add “fuel to the fire.”

As noted, rising leverage is the “fuel” for bull market advances. What makes rising margin debt levels more dangerous is when retail exuberance feeds into all risk assets simultaneously.

While the increase in margin balances is alarming, it is even more concerning when we remember that retail investors are also piling into leverage ETFs and options (another form of leverage) at a frightening pace. As I posted on X this past week, retail investor allocations to ETFs now exceed levels seen in 2021.

In other words, the amount of leverage in the system today is far more significant than represented solely by margin balances. Nonetheless, that increase in risk-taking has fundamentally supported stock prices in recent months.

However, when discussing margin balances, I often get questions about the “rate of the increase.”

A Need For Speed

The “rate of increase” is a crucial factor concerning margin balances. If the market is rising, and margin balances are slowly increasing over time, such does not provide a good indication of “investor greed.” Margin balances should be expected to increase over time as the market grows. However, if the rate of increase is sharp, that is a stronger indication that investors are becoming exuberant, which is typical of late-stage market advances. One measure we track is the rate of change from the margin balance’s lowest point over the last 12 months. Unsurprisingly, margin balances have risen 30% from those lows. While current levels of increase are not as high as previous ones, the increase does show the rise in investor “greed” in recent months.

We can also apply technical analysis to margin balances to study the rate of change in debt levels.

Margin data goes back to 1959, giving us a lot of history to study its relationship to the market. The chart below is a “stochastic indicator” of margin debt overlaid against the S&P 500. (The stochastic indicator is a momentum indicator developed by George C. Lane in the 1950s. The analysis examines the most recent margin debt level relative to its previous high-low range. In other words, the indicator measures the momentum of margin debt by comparing the closing level with the range over the past 21 months.)

The stochastic indicator represents the speed and momentum of margin debt level changes. This means the stochastic indicator changes direction before the market, making it a leading indicator. The stochastic indicator at 100 (its maximum level) has typically preceded a market reversal and represents the sharp increase in investor risk-taking.

We see the same when we apply a Relative Strength Index to margin balances. The relative strength index (RSI)) is a momentum oscillator measuring the velocity and magnitude of changes to margin balances. Readings above 80 have typically preceded short to intermediate-term corrections or consolidations. With a current reading above 90, the increase in margin balances since October 2022 is notable.

As noted, it isn’t just investors’ “sentiment” that is exuberant. Yes, investors are very confident that stock prices will be higher. Crucially, not only are they confident, but they are aggressively allocating money toward risk and doing it with leverage.

However, that increase in leverage is essential to pushing asset prices higher.

It is also a warning.

Watching For The Warning Sign

I want to make a crucial point here. Margin debt, like valuations, is a “terrible market timing” indicator and should not be used as such.

Rising levels of margin debt measure investor confidence. Investors are more willing to take out debt against investments when shares are rising, and they have more value in their portfolios against which they can borrow. However, as noted above, the risk is when falling asset prices reduce the amount of credit available. The subsequent liquidation of assets must occur to bring the account back into balance.

I agree and disagree that margin debt levels are simply a function of market activity and have no bearing on the market outcome.

In March 2020, the double-whammy of collapsing oil prices and economic shutdown in response to the coronavirus triggered a sharp sell-off fueled by margin liquidation. Most investors have forgotten about 2020 or, worse, assume it can’t happen again for various short-sighted reasons. However, the “gas tank” is once again full as investors are more exuberant now than at the market’s peak in 2021.

One warning sign that has been a good indicator to reduce portfolio risk is when the margin balances fall below the 12-month moving average. Margin balances are well above that level, keeping portfolios allocated toward equity risk. However, previously, when that warning signal was triggered, markets spent time either consolidating or correcting.

Sure, this time could indeed be different. That has remained investors’ “siren song” throughout history. However, as Sentiment Trader summed up the last time we wrote on this topic, such is usually untrue.

“Whenever some of this data fails to lead to the expected outcome for a few weeks or more, we hear the usual chorus of opinions about why it doesn’t work anymore. This has been consistent for 20 years, like…

  • Decimalization will destroy all breadth figures (2000)
  • The terror attacks will permanently alter investors’ time preferences (2001)
  • The pricking of the internet bubble will forever change option skews (2002)
  • Easy money will render sentiment indicators useless (2007)
  • The financial crisis means relying on any historical precedents are invalid (2008)
  • The Fed’s interventions mean any indicators are no longer useful (2010 – present)

All of these sound good, and for a time it seemed like they were accurate. Then markets would revert and the arguments would get swept into the dustbins of history.”

We are not suggesting that margin balances are warning of an imminent crash. However, they indicate that investors are very exuberant about future market returns and have taken on increased risk. More notably, they are doing so this time by leveraging investments with additional leverage.

When the market does reverse, the devastation to many investors will likely be much more immense than most assume.

How We Are Trading It

While we remain long-biased in our equity portfolios, we have begun to reduce some of our big winners (take profits) and continue to add to our more defensive-oriented positions. While we certainly want to participate in the market’s current upside, we will also give up some gains to protect against the eventual reversion.

Although it certainly “feels” like the market “just won’t go down,” it is worth remembering Warren Buffett’s sage words.

“The market is a lot like sex, it feels best at the end.”

In the short term, holding higher cash levels will indeed provide some drag between our portfolio and the major market index. However, if an event hits the markets, our preparation should protect us against the initial “bite.”

We remain “bullish” on the markets, as momentum is still in play. However, we are taking precautionary actions for the “just in case” scenario.

To spin a bit of Warren’s quote:

“If you engage in the market in an unprotected fashion, you may not want the unexpected surprise.”

Given the market uncertainty, the high levels of complacency, and the risks to stability, managing portfolio risks is worth considering. That is why we have started rebalancing portfolio risk accordingly. With both technical and sentiment readings suggesting the short-term market risks are elevated, taking some “small” actions now is wise, which you will likely appreciate later.

  1. Tighten up stop-loss levels to current support levels for each position.
  2. Hedge portfolios against more significant market declines.
  3. Take profits in positions that have been big winners.
  4. Sell laggards and losers.
  5. Raise cash and rebalance portfolios to target weightings.

Therefore, from a portfolio management perspective, we have to trade the market we have rather than the one we think should be. This can make battling emotions difficult from week to week. However, as noted, we expect a correction sooner rather than later, providing a better risk/reward opportunity to increase equity exposure if needed.

Tyler Durden Sun, 02/23/2025 - 10:30

Expect Gold To Shine In 2025

Expect Gold To Shine In 2025

Authored by Michael Wilkerson via The Epoch Times,

This year has started off with a golden hue. Gold and silver have been among the best-performing asset classes in 2025, up 12 percent and 14 percent, respectively, year-to-date. Over the past two months, these precious metals have outperformed bitcoin, which was the best performing asset in 2024, and equity markets around the world. Gold looks positioned to easily top $3,000 in coming weeks, with silver similarly hitting all-time highs.

There are many reasons to believe that gold prices have further to run from here. Some of the biggest factors supporting a higher gold price include the ongoing accumulation of gold by central banks, persistent inflation, and a global supply shortage of physical gold.

Central banks, which hold as much as 20 percent of total global gold reserves, are key to the long-term growth in demand for the metal. In recent years, central banks around the world have been accumulating substantial quantities of gold. Net central bank acquisitions of gold topped 1,045 metric tons in 2024, marking the third year in a row of purchases above 1,000 metric tons. These figures reflect the publicly disclosed amounts; many observers believe that China and other countries are secretly acquiring gold well in excess of reported volumes. Most of the buying has come from outside of the United States and Western Europe. The four largest sovereign holders, the United States, Germany, France, and Italy, have been the exception to the gold rush led by the BRICS and other developing nations, and have not acquired additional reserves.

The reason for the failure of the United States and “Old Europe” nations to acquire more gold is simple. Most of them do not have the money. The United States, Italy and France are each deeply indebted, with debt to gross domestic product well in excess of 100 percent. These countries are forced to use proceeds of issuance of government securities to fund ever-growing government deficits, not to acquire gold or other valuable assets.

The rise in gold prices coincides with the decline in influence of the global reserve currency. The weaponization of the U.S. financial system which began in earnest in 2022 motivated many nations to diversify their sovereign holdings away from the U.S. dollar. Gold has been the primary beneficiary. The inverse is also true. Central bank purchases of gold have come at a cost to the U.S. dollar. For several years, countries around the world have been selling U.S. Treasuries held in their foreign reserve accounts to fund their gold purchases. This has made borrowing by the U.S. Treasury more expensive. Tying alternative payment mechanisms to gold collateral has put pressure on the U.S. dollar’s role in world markets.

Inflation has proven more persistent than central bankers are willing to admit. In the United States, January’s CPI reading came in above expectations at 3 percent, and core inflation (excluding food and energy prices) was even higher at 3.3 percent. Inflation has now run hot for over three years, with the general price level up over 20 percent since 2021. Over a longer run, the U.S. money supply has trebled since the global financial crisis of 2008, while the gold supply has grown by only 1 percent to 2 percent per year. Gold prices, which are expressed in dollar terms, have thus tripled alongside the money supply, suggesting that gold has been a more honest representation of purchasing power than the depreciating dollar.

Investment markets are speculating that the U.S. government will revalue its gold holdings, still held on the books at a historical cost of just over $42 per ounce, to the current market value of nearly $3,000. This would instantly plug a portion (potentially nearly $1 trillion) of the gaping hole in the nation’s balance sheet. President Trump has committed to auditing the U.S. government’s gold stockpile, officially on the books at 8,133 metric tons, for the first time in half a century. A successful physical audit would boost confidence in the financial position of the United States, while a shortfall would shock global financial markets and further denigrate the credibility of not just the United States but governments around the world.

There is a shortage of physical gold. The London Bullion Market Association is the center of gold trading around the world. Many nations have historically held their gold reserves with the Bank of England, but in recent years have been repatriating their holdings. This has disrupted the London markets and put pressure on prices.

In recent weeks, demand for delivery of physical gold has skyrocketed. Geopolitical concerns have led to a massive movement of physical gold out of the UK and Europe into vaults in New York and elsewhere. This has led to shortages and speculation of price manipulation. European markets have been spooked by President Trump’s saber-rattling over tariffs, and price differentials have opened up between gold markets across the Atlantic, accelerating the movement of bullion into the United States.

This spike in demand for physical gold, and resulting logistical bottlenecks, are not only pressuring gold prices but potentially creating a demand spiral. Analogous to a deposit run on a bank, gold customers concerned about the security of their holdings may accelerate demands to withdraw them. This could further squeeze physical supply and quickly boost prices. Many gold derivative contracts are linked to underlying physical collateral. If this collateral can’t be secured, the contracts can fail. This is one reason why holding physical gold is vastly superior to exchange-traded funds or other investment contracts that can’t guarantee delivery of the collateral on demand.

Some gold industry observers have argued that there is evidence that the handful of large banks that issue most of the gold derivatives contracts have acted in concert to manipulate the price of gold. An illegal pricing cartel among the banks would not be unprecedented. The public discovered similar practices in the mortgage securities fraud leading up to the global financial crisis and in the manipulation of LIBOR (the interest rate at which banks lend to one another) uncovered a few years later.

The recent sharp rise in gold prices may put pressure on these banks and lead to instability in any price fixing arrangement. If the cartel unwinds, it could come quickly and violently. There would be winners and losers, and potential contagion into other markets. In other words, gold derivatives may become the epicenter of the next financial crisis. In such an event, demand for physical gold would spike further, as would prices.

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

Tyler Durden Sun, 02/23/2025 - 09:20

Trump Admin Goes To War With Zelensky & Europe In UN Resolution Showdown

Trump Admin Goes To War With Zelensky & Europe In UN Resolution Showdown

As the war of words between the Trump and Zelensky administrations has grown, so has a diplomatic war and rift at the United Nations in New York. It has resulted in a crisis which may result in deadlock over a planned statement commemorating the Ukraine war's three-year mark.

The United States is seeking to stymie a draft resolution Ukraine prepared to bring before the UN Security Council and General Assembly. The Ukraine resolution has support from European nations, which is intended to call out three years since the Russian invasion, and condemn Moscow.

The Ukrainian proposed text blames Russia for starting the war and calls for its swift end. "In a note to capitals, seen by The Wall Street Journal, U.S. diplomats told European counterparts over the past day that Washington would oppose the Ukrainian resolution if it advances and pressed the Europeans to persuade Kyiv to withdraw its text," WSJ writes.

A Saturday statement on X by Ukraine's Foreign Minister Andrii Sybiha blasted efforts to alter any resolution in a way that deflects blame from Russia. "The root causes of this war are Putin's denial of Ukraine's right to exist and his wish to destroy our nation," he posted. "This is why Russia started this war, commits atrocities, and tries to change borders by force."

The chief complaint is that the US version makes no reference to who started it.

The Trump administration is reportedly mulling a change proposed by Russia, which is a permanent member of the security council, and this has set off fierce diplomatic conflict, per Reuters:

The U.S. text mourns the loss of life during the "Russia-Ukraine conflict" and reiterates "that the principal purpose of the United Nations is to maintain international peace and security and to peacefully settle disputes."

It also "implores a swift end to the conflict and further urges a lasting peace between Ukraine and Russia."

Russia has proposed an amendment to that line - to be voted on by the General Assembly - so it reads "implores a swift end to the conflict, including by addressing its root causes, and further urges a lasting peace between Ukraine and Russia."

For Russia, key among the root causes is NATO expansion and Western efforts to militarize Ukraine, as well as Kiev's anti-Russia actions in the predominantly speaking Donbass region.

The WSJ underscores that in Trump playing nice with Russia, "The clash pits the U.S. and Russia on one side against Ukraine and Europe on the other, in the most dramatic display of trans-Atlantic tensions in years."

Apparently the US side isn't budging even if the face of strong European push-back and pressure:

The diplomats said the U.S. on Friday asked Ukrainian officials to withdraw their resolution. Ukraine refused. Meanwhile, British and French officials asked Washington to amend its draft. The U.S. said it wouldn’t, the diplomats said. 

And the Trump administration is not going to back down, to be sure, as has been evident within only the first month of the Republican president returning to office.

In siding with the Moscow-proposed change to the resolution, the US side is being accused by Europe and Ukraine as essentially caving to Russian demands. "We urge all U.N. member states to join the United States in this solemn pursuit," Rubio has said of efforts to quickly negotiate peace.

Ukraine's FM Sybiha has meanwhile stated that in conversions with Rubio and American diplomats, “I stressed that Russian responsibility for the war cannot be put into question."

* * *

Below is a full statement from Secretary of State Marco Rubio stating that The UN Must Act to Bring Peace to Europe:

"President Trump is committed to ending the Russia-Ukraine war and to a resolution that leads to a lasting peace, not just a temporary pause. This Monday, February 24, will mark three years of the Russia-Ukraine war.  This war has now dragged on for far too long, and at far too terrible a cost to Ukraine and Russia.

The United States has proposed a simple, historic resolution in the United Nations that we urge all member states to support in order to chart a path to peace.  This resolution is consistent with President Trump’s view that the UN must return to its founding purpose, as enshrined in the UN Charter, to maintain international peace and security, including through the peaceful settlement of disputes.  If the United Nations is truly committed to its original purpose, we must acknowledge that while challenges may arise, the goal of lasting peace remains achievable.  Through support of this resolution, we affirm that this conflict is awful, that the UN can help end it, and that peace is possible.

We strongly believe that this is the moment to commit to ending the war. This is our opportunity to build real momentum toward peace.  We urge all UN member states to join the United States in this solemn pursuit."

Tyler Durden Sun, 02/23/2025 - 08:45

Commercial Flights Diverted After CCP Warships Begin Surprise Live-Fire Exercise Near Australia

Commercial Flights Diverted After CCP Warships Begin Surprise Live-Fire Exercise Near Australia

Authored by Rex Widerstrom and Daniel Y. Teng via The Epoch Times (emphasis ours),

Commercial flight paths between Australia and New Zealand have been disrupted after Chinese warships began preparing to fire live ammunition as part of an apparent military exercise.

Chinese People's Liberation Army-Navy Jiangkai-class frigate, Hengyang, sailing within Australia's Exclusive Economic Zone, provided on Feb. 11, 2025. Courtesy of the Australian Department of Defence

The three People’s Liberation Army Navy (PLAN) vessels have traversed the Australian coastline for the past week with no indication of their motives, and came within 150 nautical miles (277 kilometres on land) of Sydney on Feb. 19.

Several flight have been re-routed, including Qantas and Emirates aircraft, following advice that the Chinese Communist Party (CCP) warships had been “live firing in international waters” on Feb. 21.

“As a precaution, we have advised airlines with flights planned in the area,” an Airservices Australia spokesperson said.

“We are also working together to coordinate advice to operators and pilots.”

Australian and New Zealand Defence Forces have been tracking the flotilla since last week.

The weapons firing is understood to be taking place 346 nautical miles (640 kilometres) off Eden, south of Sydney in New South Wales, according to a Defence Department spokesperson.

In a statement, Air New Zealand said it “has modified flight paths as needed to avoid the area, with no impact on our operations.”

Qantas and its subsidiary Jetstar told RNZ they are working with the Australian government to monitor the situation.

The small fleet called Task Group 107, includes the heavily armed Renhai-class cruiser (named Zunyi), a Jiangkai-class frigate (Hengyang), and the Fuchi-class replenishment vessel Weishanhu.

The type 055 guide missile destroyer (Renhai-class), Nanchang, of the Chinese People's Liberation Army (PLA) Navy participates in a naval parade in the sea near Qingdao, in eastern China's Shandong province on April 23, 2019. Mark Schiefelbein/AFP via Getty Images Australia’s Defence Department Not Officially Notified

The Australian Defence Department said it was not notified of the Chinese fleet’s intent to conduct the activity, and that the only notice came via a verbal radio broadcast to civilian aircraft.

“The process undertaken by the PLAN to inform of the live fire activity was conducted in accordance with applicable international law conventions,” a Defence spokesperson told The Epoch Times.

“However, to minimise disruption to aircraft and vessels, best practice is the establishment of Notice to Airmen or Notice to Mariners [a formal notice to a local authority about potential hazards], which the Australian Defence Force would typically release 24 to 48 hours prior to a live firing activity on the high seas.

“Defence is not aware of a Notice to Airmen or Notice to Mariners for this activity having been submitted or requested by the PLAN.”

Defence said despite moving into firing formation, no weapons were seen or heard to be fired, and the floating firing target was later recovered.

“Defence will continue to monitor the [PLAN] Task Group while it remains in the vicinity of Australia’s maritime approaches.”

Australian Foreign Minister to Discuss With CCP Counterpart

Australia’s Foreign Affairs Minister Penny Wong told the ABC that the events would be discussed with Beijing.

“We already have at official level in relation to the notice given and the transparency provided in relation to these exercises, particularly the live fire exercises,” she said.

“Obviously, this is an evolving situation, but it would be normal practice where a task group is engaging in exercises for there to be advice given to vessels and aircraft in the area, and Airservices Australia is doing what it should do, which is to give that advice.

“We are aware of this task group, we are monitoring this task group very closely. It is, as I understand it, operating in international waters.”

Senator Wong is expected to meet with CCP Foreign Minister Wang Yi on Feb. 21, for a scheduled meeting on the sidelines of the G20.

Royal Australian Navy sailors on HMAS Arunta keeping watch on People's Liberation Army-Navy (PLA-N) Fuchi-class replenishment vessel, Weishanhu, and Jiangkai-class frigate, Hengyang, in the Tasman Sea. Courtesy of the Australian Department of Defence Calls for More Direct Action Against Beijing

Lincoln Parker, former chair of the Liberal Party’s Defence and National Security Policy Branch, called for stronger action.

“Chinese warships brazenly conducting live-fire exercises off Australia’s coast—right between us and New Zealand— forcing flight diversions, is nothing short of incendiary, dangerous, and unacceptable,” he told The Epoch Times.

“China has attacked Australian Navy divers, our planes, and now is firing live ordnance in our waters! What’s next?”

The shadow defence spokesman, Andrew Hastie, said the Labor government needed to be more direct with the CCP leadership.

“The Chinese government has built a blue-water navy to project power into the Pacific region. They are now using gunboat diplomacy to test US allies like Australia,” he said in a statement.

“This latest provocation by the Chinese navy comes after continued weakness from the prime minister.

“Our Australian Defence Force personnel on routine lawful patrols in the region have been targeted by the People’s Liberation Army with dangerous and provocative manoeuvres with flares, chaff, and sonar.”

*  *  *

Speaking of Australians and weapons and whatnot... THIS is a knife...

*  *  *

Tyler Durden Sun, 02/23/2025 - 08:10

US Border Czar: "We're Going To Wipe Drug Cartels Off The Face Of Earth"

US Border Czar: "We're Going To Wipe Drug Cartels Off The Face Of Earth"

US Border Czar Tom Homan told Fox News' Jesse Watters that President Donald Trump intends to dismantle the command and control centers of Mexican drug cartels, vowing to "put them out of business" and "wipe them off the face of the Earth." These are strong words against cartels that have fueled a drug overdose crisis responsible for the deaths of 100,000 Americans each year.

Watters asked Homan how cartels have adapted in the last 30 days since Trump's 'America First' border policies of placing the military by the thousands on the southern border... 

Homan responded: "Look, they're going maritime. We knew they would. That's why Coast Guard patrols increased by three times. So we're going to shut them down maritime too."

"We're going to put them out of business. President Trump does not mess around with criminal terror organizations. These cartels have killed more Americans than every terror organization combined," the official said. 

He continued: "President Trump will end up wiping the cartels off the face of the Earth - putting them out of business. If you put them out of business - you take their money away - they can't buy or bribe Mexican officials. Without money, they have no power. 

"We're not just going to attack in Mexico, the Jalisco cartel. We're going to attack them in the 43 countries they have operations currently. We're going to attack them worldwide," the border emphasized. 

Watters ended with, "That's a bold statement." ... 

Catching up with the latest 'America First' headlines on the border crisis:

Readers should understand that the disrupt-and-dismantle strategy is broad, targeting not only Mexican cartels but also transnational criminal organizations spanning from Canada to China.

This is what 'America First' looks like. It's time to stop the drug death overdose crisis in America that kills 100,000 per year. 

We must caution that the fight against cartels could get messy, considering the Biden-Harris regime intentionally flooded the nation with thousands of Tren de Aragua terrorists.  

Tyler Durden Sun, 02/23/2025 - 07:35

Trump Is Unlikely To Pull All US Troops Out Of Central Europe Or Abandon NATO's Article 5

Trump Is Unlikely To Pull All US Troops Out Of Central Europe Or Abandon NATO's Article 5

Authored by Andrew Korybko via substack,

Germany’s Bild cited unnamed members of Western security services to sensationally report that Trump is allegedly planning to pull all US troops out of Central Europe in compliance with one of the security guarantee requests that Putin put forth in December 2021 as an attempt to avert the special operation. 

Friedrich Merz, the frontrunner to become Germany’s next Chancellor, shortly thereafter publicly declared that his country must prepare for the possibility that Trump abandons NATO’s Article 5.

He's unlikely to do either of these things, but American policy towards NATO will certainly change in the coming future, which will likely take the form of what was detailed in the policy brief that was published at the Trump-affiliated Center for Renewing America in February 2023.

Titled “Pivoting the US Away from Europe to a Dormant NATO”, it describes how the US can get the EU to defend Europe while the US focuses on containing China in Asia and was analyzed here last July, which readers should review.

This goal explains why Trump is demanding that all NATO allies spend 5% of GDP on defense and accounts for the nascent Russian-US “New Détente”. Brokering an armistice or peace deal between Russia and Ukraine is meant to free up some of the US’ forces in Central Europe, which includes Germany, for redeployment to Asia. Forcing the Europeans to accept what had practically been their worst nightmare for the past three years should then motivate them to increase defense spending.

New US Secretary of Defense Pete Hegseth praised Poland as “the model ally on the continent” during his trip to Warsaw earlier this month and Trump sought to make Poland the US’ top ally there during his first term so he probably won’t pull out of there. In fact, “Poland Is Once Again Poised To Become The US’ Top Partner In Europe” for the reasons explained in the preceding hyperlinked analysis, which boil down to restoring its historical geopolitical role as a wedge between Germany and Russia.

The Baltics might not fare the same though since they have nowhere near the same regional significance as Poland does and they could try to provoke a war with Russia in order to drag the US in via NATO. Accordingly, Trump might calculate that it’s better to withdraw some or even all American troops from there while conveying to them that the US won’t come to their aid if they instigate a regional conflict, which could be expressed either behind the scenes or through one of his characteristic pronouncements.

The newfound US-German political tensions could even possibly see the US redeploy some troops from there to Poland, which in the most extreme scenario could result in transferring the headquarters of its European Command from Stuttgart to some Polish city, though it’s too early to say for certain. After all, something as serious as the second-mentioned requires a lot of work, and Trump might also wager that it’s better to keep the headquarters where they’re at in order to not lose more influence in Germany.

In any case, redeploying US troops from Europe to Asia would likely please Russia even if some are transferred from Germany to Poland, especially if Trump makes it clear that NATO members can’t provoke a conflict with Russia and expect America to ride to their rescue via Article 5. Retaining some troops in Europe alongside the integrity of Article 5 amidst the aforesaid conditions could be a pragmatic compromise between the US and Russia’s security interests.

The purpose would be to alleviate their security dilemma that was worsened by NATO’s eastward expansion after the end of the Old Cold War all while maintaining some American military influence on the continent as the US “Pivots (back) to Asia” to more muscularly contain China. The era of Europe freeloading off of the US and its liberal-globalists manipulating it into doing their geopolitical bidding against Russia would end to the benefit of peace-loving people and businessmen on all three sides.

Tyler Durden Sun, 02/23/2025 - 07:00

It All Comes Down To Accounting

It All Comes Down To Accounting

Authored by Jeffrey Tucker via The Epoch Times,

There are two portals of money in every institution: money coming in and money going out. Keeping track of that in both directions is the key to operations. The final number can reveal profits or losses, surpluses or deficits. Regardless, the accounting books are the beating heart of every institution.

Accounting means accountability, holding people to account for their work.

This is why the Department of Government Efficiency (DOGE), formed by Elon Musk with a business-based mindset, sets its sights on two primary institutions in the federal government: the U.S. Treasury payment systems and the revenue agency. That is where the money goes out and where the money comes in.

Tying these together and tracing the funds with normal accounting standards is the key to eliminating waste, fraud, and abuse. This is all about verifying what is true. It’s not enough just to look at printouts of Congressional budgets or long spreadsheets published by some other agency. The only way to discern what is absolutely true is to go to the source.

The penetration of both ends of this have generated astonishing results, among which that many millions of Social Security recipients are apparently not alive. Or maybe they are and this is just a recordkeeping error. They are going to find out one way or another.

The most shocking revelation from the very limited look at the U.S. Treasury books that judges have permitted DOGE concerns proper tagging of expenditures. They have documented that $4.7 trillion in government spending is not tagged with what’s called a Treasury Access Symbol (TAS) that ties the spending to a Congressional authorization.

Those are huge numbers. Maybe all these expenditures are legitimate and authorized. Or maybe not. Without the TAS tag, there is no way to know. That change in the books has now been made mandatory so that at least we have the beginnings of a valid and verifiable system of accounting in government.

One does wonder. Every year, Congress debates the budget and there is horse trading all around with every politician fighting for a share of the loot. They estimate revenues. They forecast deficits and debts. After a version is produced that includes both the House and Senate, the final result is sent to the President for a signature.

From there, we’ve always just assumed that the deeper machinery of the bureaucracy takes it from there. But what if there is no real and necessary relationship between what Congress authorizes and what the President approves and what actually happens on the expenditure and revenue side? This seems to be the situation.

How long has this gone on? Five former Secretaries of the Treasury have said that it has been almost 80 years since elected officials and their appointees have had access to the payment systems. They have been controlled for all living memory by a small group of civil servants who have long walled themselves off from the electorate. This is a stunning realization, one of many that has been unearthed by the forensics being undertaken by DOGE. It remains entirely possible that once this group of appointed outsiders have completed their work, which is in two years, the budget will be balanced even with lower taxes.

That might sound crazy but it is entirely possible.

To be sure, many administrations have come and gone that swore to get to the bottom of the budget problem, to eliminate waste and fraud and make sure that the government is a better steward of public resources. But think about it. If they never really had certifiable access to the real-time sources of collecting and spending, what good could they actually do? This time does seem to be different.

It fascinates me that the real battles of our time really do come down to something as granular and seemingly mundane as accounting. One hundred years ago, a big debate broke out within economics and political science over accounting and its role. This debate spoke directly to the issue of economic systems and which would be best for society.

The socialists in those days said that they would implement their vision with collective ownership of the means of production and the assignment of experts at the top to direct the use of resources. Economist Ludwig von Mises in 1920 made the salient point. He said that with collective ownership, there would be no operational markets for capital goods and thus no market prices for them.

Market prices are essential for calculating profit and loss through means of double-entry bookkeeping. Without that, even the smartest central planning would lack access to data concerning the wisest use of scarce resources. They would have no idea what consumers valued relative to other options and no idea what kinds of materials were available to meet those needs.

For this reason, Mises said, socialism would institutionalize economic irrationality. Creating an actual economy—meaning an environment in which resources were deployed to their most socially optimal ends—would be impossible. The unfolding of events in Russia proved his point. The experience of socialism in every country would always end up the same: despots at the top squandering resources until the whole society sank into desperate poverty.

Mises concluded from his deductions that the only real system that allows for rational economizing is the market economy with private property in the capital-good sectors. His argument was shocking, and debated for 20 years following, simply because he was bringing cold hard truths to a subject that had been dominated for far too long by airy philosophy that had nothing to do with the realities of the material world.

Similarly, government has always had an accounting problem. It does not know what to charge for goods and services and its decisions about revenue were ultimately arbitrary. The larger the government budget, the more irrationality itself is baked into economic structures. That is a given.

That said, there at least should be some attempt to keep track by creating a web of relationships between what is approved, where the money comes from, and how it is used. This is just normal bookkeeping, without which fraudsters and corruption run rampant.

It truly boggles the mind that fully $4.7 trillion in federal expenditures have routinely taken place without any real obligation to attach that spending to an authorized source. It makes one wonder if all the debates about the budget and all the voting and signing ceremonies have been nothing but theater for generations.

What also intrigues me about this line of thinking and work is how, in the end, this is not really about big ideological and philosophical debates about the purposes and scope of government. This is really about something very simple: how the nation goes about balancing its checkbook. Until we get that part right, all the rest of the debates are so much hot air.

No matter your political outlook, you should be grateful that DOGE seems finally to be setting things right in the operations of government. There absolutely must be a standard of compliance with accounting practices that every single business, nonprofit, or household has to use in order to maintain economic viability. After DOGE does its work, government should continue to practice the precedent established in these days, weeks, and months.

The whole reason for accounting and careful audits is to verify what is true and thus enhance public trust in their own government. Again, we can argue all day about what the government should and should not do, but until we know for certain what is actually going on, such debates mean nothing.

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

Tyler Durden Sat, 02/22/2025 - 22:10

Efforts To Arrange Trump–Putin Meeting Underway, Moscow Says

Efforts To Arrange Trump–Putin Meeting Underway, Moscow Says

Authored by Ryan Morgan via The Epoch Times,

Moscow is working to arrange a face-to-face meeting between Russian President Vladimir Putin and U.S. President Donald Trump, Russian Deputy Foreign Minister Sergei Ryabkov announced on Feb. 22.

In remarks he shared with Russian state media, Ryabkov indicated that efforts to arrange the meeting have begun in earnest but will require “the most intensive preparatory work.”

The Russian official said U.S. and Russian envoys could meet “within the next two weeks” to lay the groundwork for the eventual talks between the two leaders.

If Washington and Moscow can arrange for the two leaders to meet, it will mark the first time that a U.S. president and a Russian president met directly since June 2021, when Putin met with then-U.S. President Joe Biden in Geneva, Switzerland.

Such a meeting would also mark the first in-person between the leaders of the United States and Russia since Moscow’s troops marched on Ukraine three years ago.

The Ukraine conflict has strained already contentious U.S.–Russia relations. The United States has been Ukraine’s foremost supporter, providing the most funding for Ukraine-related assistance of any country that has supported Kyiv throughout the conflict.

The Trump administration has sought to pair negotiations for a peace settlement in the Ukraine conflict with a broader effort to improve U.S.–Russia relations.

A U.S. delegation comprised of Secretary of State Marco Rubio, White House national security adviser Mike Waltz, and special presidential envoy Steve Witkoff met with a Russian delegation in Riyadh, Saudi Arabia, on Feb. 18 as part of the ongoing Trump administration efforts to reestablish regular dialogue with Moscow.

Following the Riyadh meeting, Rubio announced both delegations had agreed to appoint high-level teams to work together to settle the Ukraine conflict. Rubio also said the two delegations agreed to establish a mechanism to address strains in U.S.–Russia relations and lay the groundwork for possible future cooperation between the two countries on areas of shared geopolitical and economic interests.

In his remarks to the press after the Riyadh meeting, Rubio said cooperation between the United States and Russia on geopolitical and economic issues would be contingent on a successful and enduring peace settlement in the Ukraine conflict.

In a Feb. 20 interview, journalist Catherine Herridge asked Rubio what the potential timeline is for a sit-down meeting between Trump and Putin. Rubio responded: 

“There isn’t going to be a meeting until we know what the meeting is going to be about.

“I think when that meeting happens will largely depend on whether we can make any progress on ending the war in Ukraine, and if we can, and that meeting is what seals the deal.”

While the Trump administration has tried to open up lines of communication with Moscow, it has also had to contend with frustration from Ukrainian President Volodymyr Zelenskyy. Trump and Zelenskyy traded barbs this week, with Trump calling Zelenskyy a dictator and Zelenskyy accusing Trump of being swayed by Russian disinformation.

At a White House press availability on Feb. 21, Trump faced questions about his comment that Zelenskyy was a dictator and whether he should apply the same label against Putin. Trump didn’t directly answer the question but instead said Putin and Zelenskyy should eventually engage with one another more directly as part of the effort to reach a peace settlement.

“I think that President Putin and President Zelenskyy are going to have to get together because, you know what, we want to stop killing millions of people,” Trump said.

Twice during his remarks on Friday, Trump denied reports that he plans to travel to Moscow to meet with Putin on May 9.

Tyler Durden Sat, 02/22/2025 - 21:35

Federal Judge Rules In Favor Of Trump Government Layoffs

Federal Judge Rules In Favor Of Trump Government Layoffs

Authored by Eric Lendrum via American Greatness,

On Thursday, a federal judge ruled that the Trump Administration can proceed with plans to carry out mass firings of federal employees.

As reported by The Hill, U.S. District Judge Christopher Cooper, who was appointed by Barack Obama, ruled that the labor unions which filed the lawsuit against the government layoffs had to take their case before the Federal Labor Relations Authority (FLRA) rather than a federal court.

“The first month of President Trump’s second administration has been defined by an onslaught of executive actions that have caused, some say by design, disruption and even chaos in widespread quarters of American society,” said Judge Cooper.

“Affected citizens and their advocates have challenged many of these actions on an emergency basis in this Court and others across the country. Certain of the President’s actions have been temporarily halted; others have been permitted to proceed, at least for the time being. These mixed results should surprise no one.”

Following through on another campaign promise, President Donald Trump has been firing thousands of federal workers, across all agencies, in an effort to shrink the size of the federal bureaucracy.

To this end, President Trump also offered an unprecedented buyout offer, known as the “Fork in the Road” initiative, granting up to 8 months of paid vacation to all federal employees who submitted their immediate resignation. 

Over 75,000 employees accepted the offer before its expiration deadline. 

Several attempts to block the buyout offer ultimately failed in court.

The most recent case, which led to Judge Cooper’s ruling, was brought by a coalition of labor unions representing federal workers, including the National Treasury Employees Union (NTEU), the National Federation of Federal Employees (NFFE), the International Association of Machinists and Aerospace Workers (IAMAW), the International Federation of Professional and Technical Engineers (IFPTE), and the United Auto Workers (UAW).

Judge Cooper ultimately did not rule on the validity of the unions’ argument, which claimed that the executive branch’s actions are in violation of the separation of powers, but instead told the unions to make their case in a different setting.

“The Court acknowledges that district court review of these sweeping executive actions may be more expedient,” the judge wrote.

“But NTEU provides no reason why it could not seek relief from the FLRA on behalf of a class of plaintiffs and admits that it would ask other agencies to follow an administrative judge’s ruling in its favor.”

Tyler Durden Sat, 02/22/2025 - 20:25

How Many Federal Government Workers Has Trump Fired So Far?

How Many Federal Government Workers Has Trump Fired So Far?

The first month of Donald Trump's second term has been a hurricane of activity, with Elon Musk's DOGE pursuing a scorched earth policy on government waste.  Despite continuing disruptions by Democrats and activist judges the audits of federal government agencies continue.  Trump's executive orders are likely designed to catch the bureaucracy off guard so they don't have time to hide their mismanagement.  However, in all that beautiful mayhem many in the public are confused as to what cuts have actually been made.

Establishment economists are predicting a recession for the Washington DC area due to the mass layoffs (which is not necessarily a bad thing).  The concern over recession within the financial media helps to illustrate how real the cuts are and how worried the progressives have become.  Some argue that conservative employees will be caught up in the cleansing along with their leftist counterparts, however, looking at the voting record of the population of DC it's not much of a threat. 

Over 92% of the district voted for Kamala Harris in 2024.  Only one Republican candidate has ever won more than 20% of the DC vote (Richard Nixon in 1972).  The town is crawling with leftists, many of them working within the bowels of the government.  No tears should be shed over rising unemployment in Washington.

The federal government employs 3 million civilian workers today - A massive number.  The last time the government had this many employees was in 1994.  The foundation for ever growing government was established in 1933 under Democrat President Franklin D. Roosevelt's "New Deal"; social programs and debt spending became the norm.  The national debt grew by 50% in only three years after the New Deal was passed and, contrary to the propaganda, it accomplished little in the way of solving the problems at the root of the Great Depression. 

Trump's federal cuts, if he follows through as he has promised, could mean the smallest federal government apparatus in almost a century.  Here is a list of agencies that have received pink slips so far...

USAID

Trump now has the legal go-ahead to gut USAID.  The organization has at least 10,000 employees and most of them will be fired in the coming weeks.  So far 2000 are being put on leave while others are being reviewed to determine if they are essential.  It is expected that Trump will ultimately keep less than 300.  

Deferred Resignations

The White House offered a “deferred resignation” proposal in exchange for financial incentives to almost all federal employees who opted to leave their jobs by February 6th.  But a federal judge blocked Trump’s plan, wanting to hear arguments from the administration and the labor unions.  According to the Office of Personnel Management, about 75,000 federal employees had accepted the offer.

Probationary Employee Layoffs

Federal workers with less than one year on the job are subject to immediate layoffs.  All agencies have been ordered to fire such employees, meaning up to 220,000 are let go.  Many of these probationary workers are included in the general cuts for institutions like the Department of Defense.

IRS

Trump is moving ahead with layoffs within the IRS.  The agency employs at least 100,000 people and Trump's cuts only affect 6000 of them.  However, questions are swirling over Trump's intentions to eliminate the IRS entirely, a move which most Americans would welcome.   

Department of Homeland Security and TSA

The DHS has executed only 400 layoffs so far, all of them considered "non-mission critical" personnel.

FAA

The FAA has fired 400 staff according to the union representing the employees.  DOGE has also been ordered to further investigate and streamline the efficiency of the agency.

Consumer Financial Protection Bureau

100 workers have been fired from the CFPB.

Department of Education

The battle over the Dept. of Education is ongoing.  No measurable layoffs have been executed yet, but Trump says he intends on removing the agency entirely, which would mean 4400 worker layoffs.

Department of Energy

The department famous under the Biden Administration for hiring a trans activist official that liked to steal women's luggage from airports.  Approximately 2000 personnel have been fired so far.

Department of Health and Human Services

Thousands of probationary employees were cut from the HHS and NIH along with 700 employees fired from the CDC.

Department of Land Management

At least 2300 employees have been let go including 800 from BLM and 1000 from the National Park Service.

EPA

Around 500 staff have been terminated from the EPA after an efficiency review, including the entire staff of the EPA's Diversity and Inclusion office.

Small Business Administration

720 SBA employees were fired, including hundreds of probationary workers. 

US Forest Service

Around 3400 employees have been terminated from the Forest Service, at least 10% of the total staff.  Much griping has been made in the media about these job losses, though many of them involved positions in "climate change education" and DEI initiatives.  The layoffs do not include firefighters, law enforcement officers, bridge inspectors or meteorologists.

Inspectors General

Each of the federal government’s largest agencies has its own independent inspector general who is supposed to conduct objective audits, prevent fraud and promote efficiency.  Trump has fired at least 17 of them and it's understandable why.  With the amount of fraud and waste DOGE has found so far, it's difficult to justify their continued employment.  What a surprise, the bureaucrats policing the bureaucrats doesn't work.

Department of Justice

Trump is firing all Biden era attorneys from the DOJ, including those that hounded him over the last four years.  The Justice Department said last month that it had fired more than a dozen employees who worked on criminal prosecutions of Trump by special counsel Jack Smith’s team.

State Department

A large number of senior career diplomats who served in politically appointed leadership positions, as well as in lower-level posts at the State Department, left their jobs at the demand of the new administration.  It was not immediately clear how many nonpolitical appointees were being asked to leave.

DOGE's Window Of Opportunity

Given that Trump has faced ongoing legal challenges on his crusade to reduce the size of government, the level of cuts is still extensive.  DOGE is a limited program that ends in 18 months, just in time for Mid-Term elections where Trump will need to solidify the conservative control of the Congress and Senate while also booting out those pesky deep state Neo-Cons still haunting the the halls.  Whatever layoffs they plan to enforce will all be done in the next year.

This means the whirlwind will continue. Legal opposition will likely wane as it becomes clear to Democrats that there's nothing they can do to stop the policies that the American people voted for.  It will be interesting to see what the federal government looks like in 2026.        

Tyler Durden Sat, 02/22/2025 - 19:50

Trump & Russia: Is This Good Or Bad For Markets?

Trump & Russia: Is This Good Or Bad For Markets?

Authored by Russell Clark via Capital Flows & Asset Markets blog,

Trump has done exactly what he said he was going to do, and negotiated with Russia directly to end the war in Ukraine. The Trump deal with Russia could be very bullish for Europe, as it could see Russian sanctions lifted, and oil and gas prices fall. This would be particularly bullish for Germany, as it has suffered from high energy prices. Although far less than in 2022, European energy prices are far higher than in the US or Russia.

Likewise, increased food supply from Ukraine and Russia could be bring down food prices - which would be bullish.

After decades of stagnation, Europe has broken out of its range, even as the Trump deal with Putin would seemingly be a negative.

It is easy to argue the opposite way. Generally speaking, when a dictator has succeeded in using force to increase their power and prestige, it is difficult for them to give up the gun, and the Baltics, like Ukraine used to be part of the Soviet Union. It is hard to find any equity weakness in this area. MSCI Baltics has ripped.

My best guess for all this bullishness would be the likelihood that the German government is going to abandon is fiscal austerity, and move to a more US style fiscal expansion - which should be good for equities and bad for bonds. That is Trump abandoning Ukraine has forced Germany to abandon austerity - and that is bullish.

The more interesting question is whether this is good for China or bad for China? On first blush, the market has decided it good. To be fair, for the Chinese tech sector we have also seen the emergence of DeepSeek and the rehabilitation of Jack Ma, and so the Hang Seng Tech index has doubled in 6 months.

On a more geo-political view, the implication is that President Trump is moving to a sphere of influence model - where Europe has to deal with Russia and its neighbours, while the US deals with its neighbours how it sees fit. The logic then is that China is free to deal with its neighbours how it sees fit too - and will not suffer consequences. In other words, China can harass and absorb Taiwan with impunity. For investors in Chinese assets this is bullish as you can now discount the risk of sanctions - which is what hurt foreign investors into Russia assets. Gazprom London listing is an example of this risk.

If Kissinger, who talked to Trump extensively during his first time, was still alive, then I would say this was unequivocally bad for China. “How so?” you might ask? Kissinger was instrumental in the ping pong diplomacy of the 1970s, that saw China and the US establish diplomatic relationships. For those you who learn history from popular culture (I learnt more about the royal family from “The Crown” that I ever learnt from any history class), Forrest Gump playing table tennis in China was basically seen as a way for the US to reach out to China. Kissinger was a prime mover in this. The driver of this détente was to isolate USSR- and from a economic point of view, betting on China versus Russia from this point of time made you a sure fire winner.

First of all there are two things to remember - China and Russia will always be important nations, by dint of the their population and land mass respectively. When they are aligned, they are very difficult to defeat, as we have seen in Ukraine, where Chinese technology has kept Russia in the game. But China and Russia are not natural allies - for most of their history they have faced off against each other. Hard to believe now, but the Soviet Union was not even that supportive of the Chinese Communist Party in its civil war for control of China, at least until the end of the Second World War. Prior to this, China/Russian relations has been defined by battle for control of the far east. If the US can bring Russia into the fold, then China become extremely exposed on oil imports, just at the US was in the 1970s.

China like the US in the 1970s is now heavily reliant on the Middle East for its oil. Bringing Russia into the fold would make energy a choke point for the Chinese economy.

Kissinger is no longer with us - so I don’t know if this is part of the plan. But Trump has always signalled that China is the true enemy of the US, not Russia. And a secure Russia would probably go along with a strategy that weakened China, if only to prove the importance of Russia to both the US and China. The thing is Kissinger had a clear aim of avoiding an open clash between the USSR and USA. Trumps aims tend to be less clear, at least to me. If it is the Kissinger line of thinking, then the current rally in Chinese tech is clear trap. But if we are moving to sphere of influence, and deal with China, then perhaps they are a buy. I find geo-politics difficult to read - but all I know is that government spending is going to go up globally - and that is bad for bonds. Japanese bonds continue to be weak.

Politics is a funny thing I have found. It is not always clear how politicians are going to behave - which I why I suspect voters loved the move to free markets in the 1980s and 1990s - it was a move away from domineering politicians. Having fallen out of love with free markets - we are moving back to domineering politicians. Markets think a deal with Russia is bad for oil prices and good for China - but I could see the reverse being true.

Tyler Durden Sat, 02/22/2025 - 16:55

Netanyahu Vows Revenge On Hamas for Returning Wrong Body: 'Unspeakably Cynical'

Netanyahu Vows Revenge On Hamas for Returning Wrong Body: 'Unspeakably Cynical'

One of the four deceased hostages handed over by Hamas on Thursday was the wrong body, according to an Israeli government forensics investigation. As part of phase one of the ceasefire deal several rounds of hostage releases have occurred successfully.

Hamas agreed to release the body of slain hostage Shiri Bibas and her two young deceased children. "Following the identification process at the Institute of Forensic Medicine, we received this morning the news we had dreaded — our Shiri was murdered in captivity and has now returned home to her sons, husband, sister, and all her family for rest," the family said in an initial statement.

However, outrage in Israel has ensued after it was revealed that the casket marked with Shiri's remains was actually an unidentified deceased person.

Via Sky News, Israeli media

Israeli Prime Minister Benjamin Netanyahu said Friday that Israel would make Hamas pay for failing to return Shiri's remains.

"We will act with determination to bring Shiri home along with all our hostages — both living and dead — and ensure Hamas pays the full price for this cruel and evil violation of the agreement," he said in a video statement.

Israel says the body is likely that of an unidentified Palestinian woman, after the two young sons, Kfir and Ariel were handed over and identified.

Netanyahu blasted Hamas for acting "in an unspeakably cynical manner" by placing the body of a Gaza woman in the coffin instead of Shiri. Her husband Yarden had also been kidnapped from a kibbutz in southern Israel on Oct.7 - but was released in the first exchange of this current truce deal.

NBC details, "Hamas leader Mahmoud Mardawi told media outlet Al Arabiya that Bibas' remains had now been returned, and the International Red Cross said that it has received a set of human remains and transferred them to Israeli officials."

According to a statement: 

In announcing that testing showed the first remains were not that of Shiri Bibas, the IDF said the remains also did not match any other hostage held by Hamas. “It is an anonymous body without identification,” it said.

Hamas has not commented on the charge, but did follow through with the agreed upon Saturday exchange, which saw the release of the last six living Israeli hostages in return for Israel freeing nearly 500 Palestinians from Israeli prisons.

The ceasefire will ender phase two, but it's anything but certain whether the truce will hold, given the growing accusations. Hamas has said the Israel has killed some 100 Palestinians even while the ceasefire was on.

Tyler Durden Sat, 02/22/2025 - 16:20

Kash Patel Is Already Making Huge Changes At The FBI

Kash Patel Is Already Making Huge Changes At The FBI

Authored by Matt Margolis via PJMedia.com,

Newly confirmed FBI Director Kash Patel is on fire. 

After his swearing-in, he gave a not-so-subtle speech, showing that he’s ready to handle the media’s smears.

“I know the media's in here, and if you have a target, that target’s right here,” he said, pointing to himself. 

“It's not the men and women at the FBI.” 

“You've written everything you possibly can about me that's fake, malicious, slanderous, and defamatory," he continued. 

"Keep it coming — bring it on. But leave the men and women, the FBI out of it. They deserve better.”

He also promised that a new day at the FBI has started. 

“I promise you the following, there will be accountability within the FBI and outside of the FBI, and we will do it through rigorous constitutional oversight — starting this weekend.”

Kash continued, “I am living the American dream, and anyone that thinks the American dream is dead, just look right here. You're talking to a first-generation Indian kid who's about to lead the law enforcement community, the greatest nation on God's green earth.”

He wasted no time turning his bold rhetoric into action. Following his blistering speech on Friday, he ordered the transfer of 1,500 agents and staff from the bureau’s Washington, D.C., headquarters to field offices across the country. 

Roughly 1,000 will be sent to high-crime cities that the Trump administration designated, where they can focus on fighting crime instead of political games. Another 500 will be reassigned to Huntsville, Ala., which is widely seen as D.C.’s version of exile.

This is just Patel’s first move, and if any Democrats want to shed a bunch of tears over the move, they can, but they can’t claim they shouldn’t have expected it. As the Washington Post reported, Patel made this plan known during his confirmation hearings.

Patel, in his 2023 book, vowed to shutter the Hoover headquarters building and turn it into a “museum to the Deep State.” He’s made similar recommendations at his confirmation hearing and in appearances on conservative TV news shows.

“One of my biggest personal recommendations is … you send those 7,000 agents in the headquarters building down range to chase down rapists, to chase down murderers, to chase down drug traffickers and let the cops be cops on the streets across America,” Patel said during an August appearance on “Stinchfiled Tonight.”

During his confirmation hearing last month, Patel was asked about his previous comments suggesting he wanted the FBI’s headquarters emptied out and shuttered. His responses did not directly address whether he would actually shut the building down or seek to transform it into a museum, but suggested that he believes the FBI’s workforce in Washington should go out into the country.

“A third of the workforce for the FBI works in Washington, D.C.,” Patel said. “I am fully committed to having that workforce go out into the interior of the country, where I live west of the Mississippi, and work with sheriff’s departments and local officers.”

It's day one and he’s already making changes. It’s glorious to see.

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Tyler Durden Sat, 02/22/2025 - 15:45

California's High Speed Rail To Face Audit, US Transportation Chief Says

California's High Speed Rail To Face Audit, US Transportation Chief Says

Authored by Beige Luciano-Adams via The Epoch Times (emphasis ours),

LOS ANGELES—Transportation Secretary Sean Duffy announced he would direct the Federal Rail Administration (FRA) to conduct a compliance review of funding allocated to California’s long-embattled high-speed rail—and determine whether the project is worthy of continued federal investment.

Secretary of Transportation Sean Duffy speaks during a press conference at Union Station in downtown Los Angeles on Feb. 20, 2025. Patrick T. Fallon/AFP via Getty Images

“President [Donald] Trump has thought about this project,” Duffy said Feb. 20 during a press conference with elected officials at Los Angeles’s historic Union Station. “I think he was very kind when he said this project has been mismanaged. I would agree.”

Duffy said California’s high-speed rail has so far consumed nearly $16 billion in 16 years, with almost nothing to show for it, while timelines and budgets have mushroomed, more than tripling since the project was introduced in 2008. The state rail authority reports it has spent $13 billion from July 2006 through June 2024, while recent estimates for completion run as high as $130 billion.

The rail authority’s inspector general in a Feb. 3 report anticipated further delays and a $6.5-billon funding gap in the 171-mile stretch currently under construction from Bakersfield to Merced in the state’s Central Valley region—an interior segment of the envisioned 400-mile track from Los Angeles to San Francisco.

Duffy said he would direct the FRA to focus on the $4 billion promised by the Biden administration to fund two construction projects planned for this segment.

The investigation, which will review how federal money has been spent and whether the state is in compliance with federal agreements, will help determine whether billions in taxpayer dollars should remain committed, Duffy said.

“We want to make sure the California taxpayer understands that even though they might be excited about this project, [it’s] not going to happen,” Duffy said. “There is no timeline in which you’re going to have a high-speed rail that goes from L.A. to San Francisco.”

If California wants to continue to fund the rail, Duffy said, it can do so. “But we in the Trump administration are going to take a look at whether this project is worthy of continual investment.”

Elected leaders were interrupted by a small but boisterous chorus of protesters.

“The California High-Speed Rail is a long-term project that should not be obstructed by oligarchs who only care about profits in the short term,” Jeff Zhang, 24, told The Epoch Times, suggesting delays are just “part of the cost” of the trial and error involved in building what will be the first major bullet train project in the country.

Protesters hold signs at Union Station in downtown Los Angeles on Feb. 20, 2025. Patrick T. Fallon/AFP via Getty ImagesProtesters at Union Station in Los Angeles on Feb. 20, 2025. Patrick T. Fallon/AFP via Getty Images

“This is nothing more than a sham investigation,” Eli Lipmann, executive director of transit advocacy organization Move LA, told The Epoch Times. “Yes, the project is behind,” but, he said, the project has created jobs and will play an integral role in future infrastructure.

Pausing funding for high-speed rail, he suggested, will also put other infrastructure projects in jeopardy.

“L.A. County has almost $1.2 billion in grants—signed, sealed, and delivered—that we need to ensure are coming, everything from better bus connections to less traffic on roads to rail projects like the Purple Line, which I took here today.”

Pointing to a recent Emmerson poll showing 55 percent of Californians still support the project, Lipmann said the federal government should be accelerating, rather than pausing, building high-quality transportation.

“What are they going to do during the investigation? They’re not going to give California money, they’re going to put a pause on it. And then they’re going to say this project is over budget,” Lipmann said.

Rep. Doug LaMalfa (R-Richvale) had a different view. The rail’s runaway costs, he suggested during the press conference, would be better spent on agriculture, water infrastructure, and other “things people need.”

LaMalfa said “dribs and drabs” of $4 billion from the feds would never add up to the $110 billion needed to make it to the finish line.

“It was a nice thought,” he said. “It’s failed.”

Secretary of Transportation Sean Duffy speaks at Union Station on Feb. 20, 2025. Patrick T. Fallon/AFP via Getty Images

Rep. Kevin Kiley (R-Rocklin) said the project symbolizes the “decline of modern California” under current leadership.

Kiley told The Epoch Times his primary focus is to preclude the possibility that a future administration will pick up the mantle. “Once we cut off the federal funding, we can kill the project and focus on things that will actually improve people’s lives.”

Republican leaders are also taking aim at the state budget, including with efforts to redirect the $1 billion California spends each year on the rail project to wildfire prevention and water storage.

Former state lawmaker and current Rep. Vince Fong (R-Bakersfield) had introduced such a bill, which is now being carried by California Assemblywoman Alexandra Macedo (R-Tulare).

“There have been eight business plans, and the inspector general has outlined all the structural mismanagement,” Fong told The Epoch Times. “So we have all the data we need. It’s just, does the governor and his state legislator—the ruling party—do they have the political will to stop this project and put it into other things?”

While announcing the review, Duffy also suggested potential fraud and waste was California’s problem, and an audit should be led by Gov. Gavin Newsom.

“I can’t make decisions for the great state of California, but we do have to be responsible for the tax dollars that are spent from the federal government,” he said.

The bullet train was among a flurry of targets Trump took aim at when he assumed office last month, promising on social media that an investigation would be forthcoming.

Duffy pointed to high-speed rail projects with “great timelines” and “great budgets” currently being proposed to the Federal Rail Administration that he said have a realistic shot at completion—such as the privately funded Brightline West, which will connect Los Angeles and Las Vegas and currently and is due to finish in a few years.

“That seems like a project that is worthy of investment,” he said.

Transportation chief Sean Duffy speaks at Union Station in downtown Los Angeles on Feb. 20, 2025. Patrick T. Fallon/AFP via Getty ImagesProtesters hold signs during the press conference at Union Station on Feb. 20, 2025. Beige Luciano-Adams/The Epoch Times

Several protesters said California has fallen behind other developed nations in public transportation and infrastructure.

“That’s a problem,” said one, of the delays and bleeding costs. “And I also think it needs to get done. We’ve invested so much already. ... It’s not just for California, it’s for the whole country.”

Former Rep. Michelle Steel dismissed any parallels to countries such as Spain, France, China, and Japan, where bullet train projects have succeeded.

“I was raised in Japan. It works in Japan because you can get off from the highway public transportation and you can hop on, you can go to the city. For this one costing $128 or $140 billion, going nowhere to nowhere, we don’t need this kind of wasting taxpayers’ money.”

Marc Joffe, a visiting fellow at the California Policy Center and a longtime critic of California’s high-speed rail, in a conversation with The Epoch Times pointed to the state’s uniquely challenging business climate.

“Lots of high-speed rails in other countries were built a long time ago. China built an enormous amount recently, but they don’t have the private property protections and labor rules like we have here.

“And I don’t think anyone wants to use Chinese standards for property acquisition, or labor.”

State Sen. Shannon Grove (R-Bakersfield), meanwhile, suggested the project has benefited from plenty of preferential treatment and fast-tracking, noting its exemption from California Environmental Quality Act (CEQA) review.

California's High Speed Rail Project announced the completion of a section of bridgework in Madera County in May 2023, as the first major milestone of the project's completion. California High Speed Rail Authority

“It’s proven that the Central Valley is sinking, and they’re building this monstrosity on top of the sinking valley with all that weight of concrete and rail structure,” she told The Epoch Times.

Referring to one part of the project’s Central Valley segment, Grove said:

“You can walk across this thing in 10 minutes, and they spent $13 billion on it. It’s ridiculous.”

In response to the press conference, the rail authority said on social media platform X on Thursday, “We welcome this investigation & look forward to working with federal partners.”

“CA High-Speed Rail has been audited over 100 [times], every dollar is accounted for & progress is real—50 structures built, 14,600 jobs created & 171 miles under construction.”

Tyler Durden Sat, 02/22/2025 - 14:35

Berkshire Cash Hits All-Time High $334BN Even After Paying Record $27BN In Taxes: Shareholder Letter Highlights

Berkshire Cash Hits All-Time High $334BN Even After Paying Record $27BN In Taxes: Shareholder Letter Highlights

One of the longest running traditions in modern finance is that every year, one Saturday morning in late February, the world's financial class - from refined professionals to rancid amateurs - sit down as they have for the past 66 or so years - for an hour and read the latest Berkshire annual letter written by Warren Buffett in which the man seen by many as the world's greatest investor writes down his reflections, observations, aphorisms and other thoughts for the past year, which are closely parsed and analyzed for insight into what he may do next, what he thinks of the current economy and market climate, or simply for insights into how to become a better investor. And with Buffett's long-time investing partner, Charlie Munger, having one year ago passed away just shy of his 100th birthday and Buffett himself now 94, every such letter may well be the last, which is why - even though their informational content and signal-to-noise ratio has been severely diluted over the year - they are read just as obsessively as they were when Buffett was in his prime.

Which brings us to the latest Berkshire annual report and accompanying letter, which - at 13 pages clocks in three pages less than last year's edition and one of the shortest ever - was somewhat of a downer as the Omaha billionaire said that even though Berkshire did "better than I expected", a majority, or 53% of Berkshire's 189 operating businesses, reported a decline in earnings. The offset? The company's staggering cash pile (more on that in a second) which is invested in T-Bills and which generates about a 4.5% in interest income: "We were aided by a predictable large gain in investment income as Treasury Bill yields improved and we substantially increased our holdings of these highly-liquid short-term securities."

Buffett also said that Berkshire's insurance business also delivered a major increase in earnings, led by the performance of GEICO, whose "2024 improvement was spectacular", while property-casualty insurance pricing strengthened during 2024, "reflecting a major increase in damage from convective storms." GEICO was also the main contributor to Berkshire’s insurance results, with its pretax underwriting earnings more than doubling to $7.8 billion in 2024. The auto insurer successfully added new clients in the second half, reversing a years-long trend that previously weighed on its performance.

Buffett also exposed his liberal roots (readers may forget that the folksy Omaha billionaire was one of the loudest and most virtue-signaling Hillary Clinton donors) saying that "climate change may have been announcing its arrival", yet even Buffett admits that "no 'monster' event occurred during 2024." That said, "someday, any day, a truly staggering insurance loss will occur – and there is no guarantee that there will be only one per annum." Additionally, Berkshire’s railroad and utility operations, the conglomerate's largest businesses outside of insurance, also improved their aggregate earnings. 

All told, Berkshire recorded operating earnings of $14.5 billion in Q4, up 71% from $8.5 billion a year ago, as higher interest rates lifted the conglomerate’s investment income and, while Berkshire's insurance business scored a 48% jump in insurance investment income, to $4.1 billion, amid higher interest rates. Earnings also got a significant boost from a strong recovery in the firm’s insurance underwriting business, with operating earnings quadrupling over the period to $3.4 billion.

All told, in 2024 Berkshire earned $47.4 billion in operating earnings, the third straight record operating profit (Buffett will never tire of emphasizing this measure "rather than GAAP-mandated earnings".) Here’s a breakdown of the 2023-24 earnings as Berkshire reported them. 

That said, Berkshire said it expects pretax losses of approximately $1.3 billion from the wildfires that ravaged entire parts of Los Angeles last month. Net income for the full year totaled $89 billion, including gains from Berkshire's common stock investments such as Apple and American Express; for Q4, Berkshire reported that net income more than doubled to $37.574 billion, or $26,043 per Class A share, from $18.8 billion, or $12,355 per share, a year earlier.

Meanwhile, the otherwise acquisitive Berkshire refused to pursue any M&A for yet another quarter, and Buffett’s cash hoard grew for the 10th quarter in a row, to a record $334.2 billion at the end of 2024, as the billionaire continued to refrain from major stock transactions in the fourth quarter.

Still, Buffett said his company will continue to prefer owning equities, primarily U.S. stocks, over cash, adding Berkshire is "not finished."

Going back to Q4, the firm was a net seller of $6.7 billion worth of shares; this marked the 9th consecutive quarter in which Berkshire has been selling stock (Berkshire has not made a major purchase of an entire company since 2016), the longest stretch by far in the company's history...

... and even though Berkshire did not sell any Apple this quarter (having previously slashed his holdings in the smartphone giant by more than half), in Q4 Berkshire did continue to aggressively sell down its financial holdings such as BofA, Citi and Capital One, as discussed in our breakdown of the company's 13F last week.


"Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities," Buffett wrote.

And, for the second straight quarter, Buffett also did not find Berkshire stock itself to be attractive, buying back zero shares in Q4, the same amount as in Q3. Berkshire’s market capitalization has been hovering above $1 trillion since late last month, and according to Buffett it is perfectly fairly valued here. 



The company's stock price has risen 15% in the last year, while the S&P 500 rose 18%. Over the last decade, Berkshire's stock price has risen 225%, while the index rose 241% including dividends and 185% excluding dividends, Reuters data show.

"They will have lots of buying opportunities but Berkshire will never be the large double-digit compounder it had been," said Bill Smead, chief investment office at Smead Capital Management in Phoenix. "Berkshire will be a solid way of participating in owning major companies, and avoiding trouble."

The lack of any attractive mergers is a problem that Buffett has been staring down for almost a decade as the growth of Berkshire’s operations and cash levels have compounded. In his annual letter to shareholders, Buffett addressed concerns that Berkshire is hoarding cash and reminded investors that the great majority of the firm’s money remains invested in equities, both public and private, and that this won’t change.

“Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned,” Buffett said in the letter.

Buffett also said the value of the Berkshire’s private equity holdings increased and remained “far greater than the value of the marketable portfolio” last year. Over the same period, Berkshire’s ownership of public equities declined 23%, to $272 billion. 

The billionaire said Berkshire could increase “over time” its long-time holdings in Itochu, Marubeni, Mitsui, Mitsubishi and Sumitomo, Japan’s five largest trading houses. While Berkshire initially intended to keep its stake below the 10% threshold, the five companies have agreed to “moderately relax the ceiling” as the conglomerate approaches it.

The 94-year-old Buffett also acknowledged his advanced age in the letter, telling shareholders he now uses a cane and will spend less time fielding their questions at Berkshire's annual meeting in May. He nonetheless assured shareholders they would be in good hands after he turns over the conglomerate's reins to Vice Chairman Greg Abel, saying the 62-year-old Abel has "vividly shown his ability" to deploy capital.

Among other topics discussed in his letter, Buffett he sent a cautionary message to Washington, lamenting how capitalism "has its faults and abuses--in certain respects more egregious now than ever," with malfeasance by "scoundrels and promoters" in full force.

"But even with such malfeasance – which remains in full force today – and also much deployment of capital that eventually  floundered because of brutal competition or disruptive innovation" Buffett said that "the savings of Americans has delivered a quantity and quality of output beyond the dreams of any colonist."

The billionaire also urged lawmakers to help preserve a stable U.S. dollar, saying "paper money can see its value evaporate if fiscal folly prevails," and that the United States has in its history "come close to the edge.  Fixed-coupon bonds provide no protection against runaway currency."

The warning comes at a time of ever louder rumblings about a Mar-A-Lago accord, in which the Trump admin will stealthily devalue the dollar against all other currencies in a bid to kickstart US manufacturing, but will only succeed in sending gold and crypto to new all time highs. 

Buffett said long-term success of Berkshire and the American economy, which he called the "American miracle," has depended on people's ability to participate. That, he said, is something Uncle Sam can encourage, or take away.

"Take care of the many who, for no fault of their own, get the short straws in life," Buffett wrote, addressing the government. "They deserve better. And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part."

To be sure, this was more than just some folksy aphorism. According to Cathy Seifert, a CFRA analyst who rates Berkshire "hold", "talking about the business of America being messy was his way of addressing the political landscape and its impact on the macroeconomic environment. He is warning Washington: Be careful where you tread."

At the annual meeting, which tens of thousands of people attend, Buffett will spend less time on the stage where he, Abel and Berkshire Vice Chairman Ajit Jain answer shareholder questions. Buffett told Fortune magazine last month that he was still having fun and able to do a few things reasonably well, while other activities had been "eliminated or greatly minimized."

The meeting will also not feature the traditional movie created by Buffett's daughter Susie.

In discussing his age, Buffett said he talks regularly on Sundays with his 91-year-old sister Bertie, using an old-fashioned phone.

"We cover the joys of old age and discuss such exciting topics as the relative merits of our canes," he said. "In my case, the utility is limited to the avoidance of falling flat on my face."

Beside the company's record cash hoard, there was another notable record revealed in this year's letter: Buffett said the company has paid the US government more than $101 billion in taxes since he took the helm 60 years ago, more than any other company in history.

Buffett’s comments come as President Donald Trump has vowed to cut corporate taxes further after slashing them to 21% during his first term in 2017. Trump wants to reduce the corporate tax rate to 15%.

Berkshire paid $26.8 billion in taxes in 2024 alone. Buffett said that “record-shattering” figure amounts to roughly 5% of the total taxes paid by US companies last year, and excludes state taxes and taxes paid to foreign governments. 

“If Berkshire had sent the Treasury a $1 million check every 20 minutes throughout all of 2024 – visualize 366 days and nights because 2024 was a leap year – we still would have owed the federal government a significant sum at yearend,” Buffett wrote, and what is remarkable, is that he is actually proud of enabling the unprecedented grift, corruption and inefficiency that DOGE - and so many others - have unearthed over the years. 

Berkshire’s 2024 tax bill exceeded that of the previous five years combined, owing in part to his significant sales last year of two of its biggest holdings, Apple and Bank of America, according to Edward Jones analyst Jim Shanahan. In the letter, Buffett said that when he took control of Berkshire Hathaway company in 1965, it was a struggling textile operation that paid zero in income taxes that year, and hadn’t for much of the previous decade.

“That sort of economic behavior may be understandable for glamorous startups, but it’s a blinking yellow light when it happens at a venerable pillar of American industry,” Buffett wrote. “Berkshire was headed for the ash can.”

Finally, for all those who are bored to death by the above, here is an AI chatbot summary of all you need to know:

  • Summary of Berkshire Hathaway's 2024 Annual ReportChairman’s Letter Highlights
    • Performance & Strategy: Berkshire Hathaway delivered stronger-than-expected results in 2024, despite 53% of its 189 operating businesses reporting earnings declines.
    • Insurance Business: The insurance segment, led by GEICO and property-casualty underwriting, saw a significant earnings boost. The company anticipates increased insurance risk due to climate-related disasters.
    • Investment Income: Rising Treasury yields contributed to a major gain in investment income.
    • Major Acquisitions: Increased ownership of Berkshire Hathaway Energy from 92% to 100% for $3.9 billion.
    • Mistakes & Learning: Warren Buffett candidly discusses past investment misjudgments and the importance of correcting errors swiftly.
    • Succession Planning: Greg Abel is set to take over as CEO, emphasizing a commitment to transparency and shareholder value.
    • Berkshire’s Tax Impact: The company paid a record-breaking $26.8 billion in U.S. corporate taxes in 2024.
  • Financial Performance
    • Operating Earnings: Increased to $47.4 billion in 2024 from $37.35 billion in 2023.
    • Investment Portfolio: Berkshire’s partial ownership in leading companies like Apple, American Express, and Coca-Cola was valued at $272 billion.
    • Cash Reserves: While holding a significant cash position, Buffett reinforced the company’s long-term commitment to equities, primarily in the U.S.
  • Japanese Investments
    • Expanded stakes in five Japanese trading companies: ITOCHU, Marubeni, Mitsubishi, Mitsui, and Sumitomo.
    • Current investment worth $23.5 billion, up from a $13.8 billion cost basis.
    • Plans to continue long-term investment strategy in Japan.
  • Property-Casualty Insurance & Risk
    • Berkshire’s P/C insurance sector remains its core business, benefitting from strong underwriting and investment income.
    • The company takes on large-scale risks that competitors often avoid but remains disciplined in pricing.
  • Future Outlook
    • Buffett maintains optimism about capitalism and America’s long-term growth potential.
    • The company will continue prioritizing equity investments and disciplined capital allocation.
    • Plans to deploy capital in large, high-return opportunities as they arise.
  • Shareholder Events
    • The 2025 annual shareholder meeting will take place on May 3 in Omaha, featuring a Q&A session with Buffett and Greg Abel.
    • This report reflects Buffett’s characteristic mix of financial insight, candid reflections, and long-term optimism for Berkshire Hathaway’s future.

More in the full Berkshire shareholder letter available here.

Tyler Durden Sat, 02/22/2025 - 14:00

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