'Non-Negotiable': Saudi Arabia Blasts Trump's Gaza Takeover Plan
'Non-Negotiable': Saudi Arabia Blasts Trump's Gaza Takeover Plan
The international reaction to President Trump's Tuesday declaration that the US will "take over" the Gaza Strip and that Palestinians would "love to leave" the largely destroyed enclave which has suffered in the midst of the Hamas-Israel war (though a fragile truce has held for a couple week) has been as expected. Various countries have issued condemnation, including predictably from the United Nations chief, given it smacks of ethnic cleansing of a historic territory, though few actual details have been defined in terms of how such a plan involving US troops would be executed.
Saudi Arabia has been one major US regional ally to react swiftly in condemnation. The Saudis have said Wednesday that Trump's desired 'normalization' with Israel based on the Abraham Accords would definitely be off.
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Riyadh said the Palestinians must be guaranteed an independent state if were to ever implement diplomatic relations with Israel. "The establishment of the Palestinian state is a firm, unwavering position," the Saudi Ministry of Foreign Affairs said said on X.
"His Highness [Crown Prince and Prime Minister Mohammed bin Salman] has affirmed this position in a clear and explicit manner that does not allow for any interpretation under any circumstances."
"His Highness stressed the Kingdom of Saudi Arabia will not stop its tireless work towards the establishment of an independent Palestinian state with East Jerusalem as its capital, and the Kingdom will not establish diplomatic relations with Israel without that," the statement continued.
Needless to say, a permanent removal of Palestinians from Gaza would thwart such a possibility, and other Arab states which have already made peace with Israel might reverse their position, for example the UAE. The Saudis are making clear that this stance is 'non-negotiable' - and the reality is that mass displacement of Palestinians to neighboring states would likely collapse the Hamas truce, and halt the ongoing hostage/prisoner exchange.
Russia too is another major power condemning Trump's Tuesday remarks, with top diplomat Sergei Lavrov arguing that this "culture of cancellation" is at work, suggesting that the US is seeking to 'cancel' Palestinian identity.
Lavrov said that UN National Security Council decisions were "were recognized by everyone without exception a month and a half ago as a necessary basis for actions to create a Palestinian state" and have "simply been canceled."
Arab public opinion is also clear...
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Trump said during Netanyahu's White House visit that the US "will take over" Gaza after relocating Palestinians elsewhere and that a major reconstruction plan in the Strip could turn it into "the Riviera of the Middle East."
Israeli hardliners in Netanyahu's cabinet have welcomed these 'shock' words. But without Arab capitals, including the Saudis, on board it's hard to see how it could get off the ground in any practical sense. Hamas would certainly resume fighting, and neighboring Arab militaries could be drawn in. There's also a continuing truce with Hezbollah which would likely break down.
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Wed, 02/05/2025 - 21:20
https://www.zerohedge.com/geopolitical/non-negotiable-saudi-arabia-blasts-trumps-gaza-takeover-plan
OPM Says Federal Unions Are Misinforming Workers About Voluntary Resignation Contracts
OPM Says Federal Unions Are Misinforming Workers About Voluntary Resignation Contracts
(emphasis ours),
Federal employees considering the buy-out offer initiated by President Donald Trump shortly after his inauguration should ignore “misinformation” from government worker unions, according to a U.S. Office of Personnel Management (OPM) spokesman.
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“Union leaders and politicians telling federal workers to reject this offer are doing them a serious disservice,” OPM’s Director of Communications McLaurine Pinover told The Epoch Times. “This is a rare, generous opportunity; one that was thoroughly vetted and intentionally designed to support employees through restructuring.”
“Instead of spreading misinformation and using workers as political pawns, they should be making sure federal employees have the facts and freedom to make the best decision for themselves and their families,” Pinover added.
The buyout offer allows federal workers who accept it to receive full pay and benefits coverage for eight months, exempts them from newly issued orders to return to work at their official duty stations on a daily basis, and protects them against Reductions-in-Force (RIF) processes that are expected to begin in the near future in many federal departments and agencies.
There are 2.3 million civilian federal workers, the vast majority of whom are careerists who receive above-average pay and benefits as well as a host of legal job protections overseen by OPM and the Merit Systems Protection Board (MSPB).
The average federal employee salary, https://www.pewresearch.org/short-reads/2025/01/07/what-the-data-says-about-federal-workers/#:~:text=The%20average%20annual%20pay%20across%20the%20entire%20federal,workers%20make%20between%20%2450%2C000%20and%20%24109%2C999%20a%20year.
to the U.S. Census Bureau.
The buyout offer must be accepted by Feb. 6 and OPM officials today circulated a “template contract” to all agencies and departments that will be the basis for the voluntary resignations under the “Deferred Resignation Program (DRP).”
The OPM comments came in response to multiple statements from the American Federation of Government Employees (AFGE) and Democrats in Congress saying that the buyout offer was not legal and President Donald Trump lacks the legal authority to make such a proposal.
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The union and its allies also said the new president wants to politicize the federal workforce, and that SpaceX founder Elon Musk initiated the buyout offer as part of his efforts leading the presidential advisory commission, the Department of Government Efficiency (DOGE).
“There is not yet any evidence the administration can or will uphold its end of the bargain, that Congress will go along with this unilateral massive restructuring, or that appropriated funds can be used this way, among other issues that have been raised,” AFGE told its more than 800,000 members in a Feb. 3 https://www.afge.org/publication/afge-statement-on-federal-employee-buyouts/
.
“We are encouraging AFGE members NOT to resign or respond to this email until you have received further information and clarification,” the union continued.
A senior OPM official, speaking on background, told The Epoch Times that, contrary to widespread media reports quoting representatives of the AFGE, the country’s largest civil service union, the DRP is a legal contract that “provides binding assurance they will not be subject to future RIFS, not be expected to work, and their pay will be protected even if there is a lapse in appropriations.”
The Epoch Times has reached out to the union for comment about the OPM’s complaints.
Sen. Tim Kaine (D-Va.) echoed the AFGE skepticism, https://www.instagram.com/saadia___m/reel/DFZI922JiMx/
in a Senate floor speech that “there’s no budget line item to pay people who are not showing up for work.”
“Don’t be fooled. He’s tricked hundreds of people with that offer. If you accept that offer and resign, he’ll stiff you just like he stiffed the contractors,” Kaine alleged.
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Former OPM General Counsel Joseph A. Morris told The Epoch Times today that rulings by the U.S. Supreme Court and other federal courts in recent years make clear that the president, as the chief executive of the federal government, has widespread constitutional authority to take actions to ensure efficiency and honesty in government operations, including terminating positions and offering incentives to resign.
“I am not aware of any case law before the MSPB or, more importantly, the U.S. Court of Appeals for the Federal Circuit, where an appealing employee challenged a removal, let alone did so successfully, where the removal was directly done or ordered by the president,” Morris said in an email to The Epoch Times.
Morris pointed to the Supreme Court’s https://www.supremecourt.gov/opinions/20pdf/19-422_k537.pdf
decision in 2021 that held “the President must be able to remove not just officers who disobey his commands but also those he finds ‘negligent and inefficient.’”
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Wed, 02/05/2025 - 20:55
Meet The Pro-Life Activists Set Free By Trump's Pardons
Meet The Pro-Life Activists Set Free By Trump's Pardons
(emphasis ours),
Joan Bell had just finished saying her second group rosary of the day when a fellow inmate ran into her Philadelphia prison cell and delivered unexpected news.
“‘Miss Joan’s husband’s on TV! She’s been pardoned,’” Bell, 76, recounted to The Epoch Times.
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Bell, who has been dubbed the matriarch of pro-life activism, has been to jail multiple times for “rescues”—the pro-life term for entering an abortion clinic and potentially blocking entrances in hopes of stopping procedures from occurring. This time, the president of the United States granted her a pardon.
“I didn’t think it was going to happen,” Bell said, referring to the pardon. She said she was grateful to President Donald Trump for his “great, great kindness.”
While in prison, Bell and a group of other inmates would perform Mass prayers from a missalette daily in both English and Spanish. Two groups would also pray the rosary in both languages.
She had already served more than a year in prison for an October 2020 protest at the Washington Surgi-Clinic, located in the nation’s capital.
a sentence of 27 months, was one of 23 pro-life activists prosecuted under the federal Freedom of Access to Clinic Entrances (FACE) Act. Trump pardoned each of them just three days after he was sworn in as president.
The Justice Department had also leveled charges under a conspiracy against rights statute, which was part of a post-Civil War law targeting groups such as the Ku Klux Klan. Combined, the two laws resulted in multiple defendants receiving years-long sentences. By the time Trump issued the pardons, many had already been incarcerated for more than a year.
“They should not have been prosecuted,” Trump said before signing the pardons in the Oval Office on Jan. 23. “This is a great honor to sign this.”
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From Rescued to Rescuer
Eva Edl said she could not recall who told her she had been pardoned, but she did remember her first thought.
“Praise the Lord!” she told The Epoch Times.
Edl, 89, was facing what she said “would have been a death sentence”—more than 10 years in prison for blocking the entrances to two Michigan abortion clinics. That possibility has now been erased, along with the three years of probation she was sentenced to in September 2024 for her involvement in a similar protest in Mount Juliet, Tennessee.
As a veteran abortion “rescuer,” Edl has been participating in clinic blockades since the late 1980s.
She said the government has no business deciding who lives or dies. And as the survivor of a Soviet concentration camp, she said she knows firsthand what happens when government “usurps the right” to make that determination, as her native Yugoslavian government once did.
As a little girl, Edl watched the Soviets round up her family members. Her older siblings were forced to work in a labor camp, while she and her grandmother were sent where those deemed too weak to work went—to an extermination camp.
“I was only 9 years old, so I was placed in a cattle car like cattle—standing room only, where you nearly died from lack of air,” Edl said.
It was at that concentration camp that Edl found Jesus, she said, and that faith carried her through until she was rescued by her mother, who bribed a guard to allow her to escape. She immigrated to Austria and then to the United States, where she was shocked to learn about abortion.
In 1988, Edl became involved with pro-life activism after learning of demonstrations at the Democratic National Convention in Atlanta.
“I told my husband, ‘Sweetheart, this is what somebody should have done for me. May I go?’ And he let me go,” Edl said.
Edl has been arrested dozens of times for her involvement in various pro-life protests. In her eyes, the abortion clinic is no different from the concentration camp where she was held.
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“I see the sidewalk as the train tracks and the entrance to the abortion clinic as the gates to the death camp,” she told The Epoch Times. She said she wonders what might have happened if someone had blocked her train and helped her to escape.
“Somehow, another group of Christians could have come and pried open my cattle car and saved us, or at least given us a chance to be saved,” she said. “This is how I see what I’m doing now.”
The Battle Continues
Questions remain as to whether Bell, Edl, and other activists will face legal consequences for future protests.
That is why Edl and 11 of her co-defendants are calling on the president to push for the repeal of the FACE Act.
“This law was always meant to be partial toward injustice,” they wrote in a Jan. 29 letter obtained by The Epoch Times. “It was meant from the beginning to persecute pro-life Christians who love their neighbors.”
They also urged Trump to support a federal abortion ban. “Neither a heartbeat, brainwaves, viability, or other objective measurements of development determine the worth of a human being,” the letter states.
The letter’s other signatories include Dr. Coleman Boyd, Cal Zastrow, Dennis Green, Eva Zastrow, Jim Zastrow, Heather Idoni, Chester Gallagher, Paul Place, and Paul Vaughn—each of whom were charged after a protest in Tennessee. Justin Phillips and Joel Curry, who were indicted in Michigan, also signed it.
Vaughn, who was under house arrest, is hoping that the pardon he received will not render moot his pending appeal in the U.S. Court of Appeals for the Sixth Circuit. The Justice Department filed a motion on Jan. 28 to vacate Vaughn’s and others’ convictions, as well as to remand the case for dismissal at the district court level.
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Wed, 02/05/2025 - 20:05
https://www.zerohedge.com/political/meet-pro-life-activists-set-free-trumps-pardons
FCC's Brendan Carr Launches Investigation Into Soros-Backed Radio Station That Outed Undercover ICE Agents
FCC's Brendan Carr Launches Investigation Into Soros-Backed Radio Station That Outed Undercover ICE Agents
Federal Communications Commission (FCC) Chairman Brendan Carr has launched an investigation into a radio station backed by left-wing billionaire activist George Soros that broadcasted the live locations of undercover Immigration and Customs Enforcement (ICE) agents.
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San Francisco-based KCBS 740 AM, one of the 200 Audacy radio stations bought by a Soros-backed group, came under fire after broadcasting the locations of ICE agents in the San Jose area during the https://www.audacy.com/stations/kcbsradio/shows/cbs-news-weekend-roundup-c2be0?action=AUTOPLAY_FULL&actionContentId=101-365
of KCBS Radio Weekend News, where host Bret Burkhart was reporting on ICE raids in the areas. While reading a statement from San Jose Mayor Matt Mahan, Burkhart included a statement from the Santa Clara County Rapid Response Network - a left-wing "community defense project developed to protect immigrant families from deportation threats.
The Response Network reports, which Burkhart read on air, gave the color, make, and model of three unmarked vehicles as well as the specific locations of agents in the area.
At around 6:05 p.m. PT, https://twitter.com/KCBSRadio?ref_src=twsrc%5Etfw
vehicles in east San Jose, an area with violent Latino migrant gang activity.
The information put the law enforcement…
— Andy Ngo (@MrAndyNgo) https://twitter.com/MrAndyNgo/status/1883714631274795029?ref_src=twsrc%5Etfw
Chairman Carr thinks KCBS-AM may have violated licensing rules which require broadcasters to serve the public interest, and has sent a formal Letter of Inquiry to the station.
"I want to express my thanks and appreciation to DHS and ICE agents. These law enforcement professionals are honorably serving this country and carrying out vital missions. Their safety is paramount. The FCC will hold broadcasters accountable for complying with their public interest obligations," Carr told https://www.foxnews.com/media/fcc-launches-probe-soros-backed-radio-station-revealed-live-locations-undercover-ice-agents
.
As https://radioink.com/2025/02/05/fcc-investigating-audacy-am-for-airing-ice-agents-locations/
its bankruptcy case, when asked by Fox Business about the deal in November, Carr said, “There’s a petition for reconsideration pending at the FCC right now, and I want to take a very hard look at that.”
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Wed, 02/05/2025 - 19:40
California Attorney General Issues Warning On Trump's Buyout Offer
California Attorney General Issues Warning On Trump's Buyout Offer
California Attorney General Rob Bonta on Feb. 3 warned federal employees in the state about what he called the Trump administration’s “questionable ‘deferred resignation’ program.”
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Bonta said unions representing federal employees had warned their members against the buyout offer and that benefits were not guaranteed.
“I urge federal employees to heed warnings from their unions to be very cautious of any buyout offers,” he said in a statement.
The Trump administration on Jan. 28 announced the “deferred resignation” initiative offering eligible federal employees eight months of payment and benefits coverage until the end of September, if they resign by Feb. 6.
The Office of Personnel Management (OPM), which serves as the chief human resources agency and personnel policy manager for the federal government, sent out more than 2 million https://www.theepochtimes.com/us/trump-admin-offers-buyouts-to-nearly-all-federal-employees-5800390
on the same day to federal workers nationwide with the proposal.
More than 20,000 federal workers have accepted the offer, making up more than 1 percent of the workforce, according to a Trump administration official. However, the number of deferred resignations is rapidly growing, and the largest spike is expected to come 24 to 48 hours before the Feb. 6 deadline, the official said.
Bonta is one of 12 attorneys general in a coalition including New York Attorney General Letitia James in issuing a warning ahead of the buyout deadline.
“The Trump Administration’s so-called buyout offer is a pointed attack aimed at dismantling our federal workforce and sowing chaos for Americans that rely on a functioning government,” said Bonta in a statement.
OPM’s director of communications, McLaurine Pinover, https://www.theepochtimes.com/us/more-than-20000-federal-workers-have-taken-buyout-offer-surge-expected-before-friday-deadline-says-official-5804094
The Epoch Times that the buyout “is a rare, generous opportunity; one that was thoroughly vetted and intentionally designed to support employees through restructuring.”
“Instead of spreading misinformation and using workers as political pawns, they should be making sure federal employees have the facts and freedom to make the best decision for themselves and their families,” she said, referring to critics such as the American Federation of Government Employees, the largest federal employees union.
As of March 2024, California has 180,973 federal employees on OPM’s list, Pinover said.
California has the third-most federal workers in the nation behind Virginia and Washington, D.C., according to a 2023 https://ourpublicservice.org/fed-figures/a-profile-of-the-2023-federal-workforce/
by the nonpartisan nonprofit organization Partnership for Public Service.
The top five agencies with the most federal employees nationwide are Veterans Affairs, Navy, Army, Homeland Security, and the Air Force.
However, military personnel, U.S. Postal Service workers, and those who work in immigration enforcement and national security are not eligible for the buyout offer.
The report also found the government-wide attrition rate in fiscal year 2023 was 5.9 percent. In fiscal years 2022 and 2021, the rate was 7.6 percent and 6.1 percent, respectively.
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Wed, 02/05/2025 - 19:15
https://www.zerohedge.com/political/california-attorney-general-issues-warning-trumps-buyout-offer
SecDef Hegseth Declares Record Army Recruiting Under Trump After Years Of Decline
SecDef Hegseth Declares Record Army Recruiting Under Trump After Years Of Decline
"The US Army is back! Growing future lethal warriors prepared to fight and win our nations wars!"... that's the latest message from Trump's Secretary of Defense Pete Hegseth.
We have long documented the steady decline in recruiting among all national military branches over the last several years during the Biden administration. Just last year we observed the theme of recruiting decline as follows, also confirmed in a seeming myriad of mainstream media headlines: The US Army faces the most challenging recruiting environment in decades, if not ever, as America's Generation Z doesn't want to fight foreign wars driven by neocon warmongering politicians in Washington, the military-industrial complex, NATO, and mega-corporations.
But when Trump was elected with an overwhelming amount of the American voting public giving a clear mandate, there was a shift in this mentality. At least this is what the numbers show, according to a fresh statement by the US Army on its official X account, also shared by Hegseth...
.https://twitter.com/usarec?ref_src=twsrc%5Etfw
!
Our Recruiters have one of the toughest jobs - inspiring the next generation of https://twitter.com/hashtag/Soldiers?src=hash&ref_src=twsrc%5Etfw
to serve.
Congratulations and keep up the great work! https://twitter.com/hashtag/BAYCB?src=hash&ref_src=twsrc%5Etfw
— U.S. Army (@USArmy) https://twitter.com/USArmy/status/1886850031883309305?ref_src=twsrc%5Etfw
The statement announces US Army recruiting's biggest enlistment numbers in December, a month after the election, suggesting Trump's election has injected new and clear motivation for the nation's young to join up.
Nearly 350 new recruits for the Army may not seem like a lot, but it's an immense process involving background and fitness checks, as well as a lengthy visit to https://www.goarmy.com/how-to-join/steps/processing-station
- and the oath is finally taken paving the way to be shipped to boot camp. Often it takes months for a recruiter to get a single individual to sign on the dotted line.
Complicating the US armed forces' prior recruitment woes was a steady dose of "woke" ideology being pumped out from Biden's Department of Defense. To review a few past reports:
https://www.zerohedge.com/markets/three-reasons-why-military-recruitment-crisis
https://www.zerohedge.com/political/us-army-struggling-recruit-white-soldiers-and-reason-obvious
https://www.zerohedge.com/military/army-begging-unvaccinated-soldiers-return
Indeed, Covid was another Biden disaster where many thousands of able-bodied and healthy troops were unnecessarily processed out. This decision has since been reversed, and these unfairly discharged troops are being invited back it.
The boost in confidence under the early Trump administration is likely also due to the Republican president vowing to wind down foreign adventurism abroad. For example, there are reported plans on the book to bring the troops home from Syria, and likely Iraq, as well as hopes that Trump can oversee peace in Ukraine.
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The post "Global War on Terror" GWOT legacy is also dying, given Trump has this time around refused top national security positions to the same cadre of Bush-era necons (though some of these are still around no doubt). Young people today are wary of nation-building quagmires under the old regime change and "nation-building" playbook. Trump is promising to change that. Patriotism is back among the youth.
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Wed, 02/05/2025 - 18:50
Hypersonic Overhype
Hypersonic Overhype
https://realclearwire.com/articles/2025/02/04/hypersonic_overhype_1089142.html
,
The United States has been https://secwww.jhuapl.edu/techdigest/Content/techdigest/pdf/V35-N04/35-04-Van%20Wie.pdf
in its desire to accelerate development and deployment of these systems. Arguments calling for increased funding for hypersonic weapons are gaining traction with lawmakers, based on illusory assumptions about adversaries’ capabilities and despite the absence of a compelling technical or strategic rationale for their need. Before rushing to pour additional money into these platforms, the Pentagon must make the case that hypersonics do more than simply materially match our international counterparts, but in fact further the strategic interests of the United States. Thus far, the case hasn’t been made.
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Hypersonic weapons, often collectively referred to as hypersonics, are typically divided into two primary categories: hypersonic glide vehicles (HGVs)—of which there are long-range and theater-range—and hypersonic cruise missiles (HCMs). HGVs are launched from rocket boosters into space and then reenter the atmosphere, gliding unpowered to their targets. Long-range HGVs are designed for strategic global strike missions and can operate at speeds exceeding Mach 15. In contrast, theater-range hypersonic weapons are designed for shorter-range regional missions. These systems typically operate at lower speeds, around Mach 5-10, and are intended to overcome regional missile defenses. Alternatively, HCMs are also launched from rocket boosters and are powered during part of their flight by scramjet engines that draw in air from the atmosphere to burn their fuel. They are built to operate within the Mach 5-10 range.
The common refrain in the hypersonics debate is that the United States needs these capabilities to https://www.youtube.com/watch?v=dukdASn816I
in combat.
That both China and Russia are fielding hypersonics is generating anxiety among some who feel the United States is falling behind the military-technological curve and now finds itself needing to “https://www.airandspaceforces.com/the-u-s-is-playing-catch-up-on-hypersonics-heres-how/
of the long-range Hypersonic Technology Vehicle 2, or HTV-2, the United States largely shifted away from research and development of long-range systems to focus on theater hypersonics that could serve a conventional counterforce mission, that is to say, overcome regional defenses to deliver high-accuracy conventional warheads on time-sensitive targets. This remains the primary motivation underpinning support for hypersonics in Washington today.
The DoD https://www.defense.gov/News/News-Stories/Article/Article/2514498/
to key regions. Hypersonics could theoretically provide a means to strike high-value, time-sensitive targets within these zones and provide the U.S. military with a potentially survivable option to neutralize critical elements within an adversary’s A2/AD network.
But if the United States is truly in search of a solution to what it considers its A2/AD challenge, there are existing https://thebulletin.org/2024/03/hypersonic-weapons-are-mediocre-its-time-to-stop-wasting-money-on-them/#:~:text=In%20addition%2C%20these%20maneuverable%20re,smaller%20rockets%20to%20launch%20them.
for overcoming A2/AD defenses. MaRVs can do essentially everything that hypersonics can do, are capable of fulfilling the theater mission set, and could be built sooner and at lower cost than novel hypersonic platforms. Pursuing hypersonics at the current juncture without such a comparative analysis and without addressing hypersonics’ performance would reduce U.S. military acquisition to a reactionary process rather than a rational assessment of military requirement.
To understand why, it’s essential to evaluate the technical and strategic aspects of hypersonic weapons. Doing so reveals that hypersonics’ value proposition is largely overstated.
First, hypersonics are described as being faster than other delivery systems. While they are faster than current cruise missiles, they are not faster than ballistic missiles. Hypersonic flight within the atmosphere https://www.scientificamerican.com/article/the-physics-and-hype-of-hypersonic-weapons/
, which limits the speeds of hypersonic weapons. Ballistic missiles, particularly when launched on depressed trajectories, can achieve shorter delivery times due in part to their minimal interaction with the atmosphere for the majority of their flight path. This holds true for both long-range and theater-range hypersonics. If time to target is an important metric for evaluating the necessity of a weapon system, hypersonics do not necessarily offer a strategic advantage.
Long-range hypersonic systems in particular face acute technical challenges. Sustained flight at hypersonic speeds introduces extreme https://www.scientificamerican.com/article/the-physics-and-hype-of-hypersonic-weapons/
the passage of radio signals and make it impossible to communicate with or guide the weapon in real-time prior to this point. This renders it dependent on pre-programmed instructions and less responsive to defensive countermeasures. Theater-range hypersonic weapons, which are designed for shorter distances and lower speeds, will likely not create a plasma sheath but will still encounter heating challenges.
Furthermore, the supposed stealth capabilities of hypersonic weapons may not be as robust as frequently stated. While low-altitude flight can indeed reduce their detection range by ground-based radar systems, such radars should still be able to detect them at ranges of hundreds of kilometers. Moreover, at high enough speeds, the intense heat generated by hypersonic flight in the atmosphere produces a bright infrared signature detectable by space-based early-warning satellites. But even prior to their glide phase, HGVs must first be launched using a rocket booster like that of a ballistic missile. The exhaust plumes from these launches would be likewise https://www.ucsusa.org/sites/default/files/2021-04/slowing-the-hypersonic-arms-race.pdf
by space-based detection sensors. Once picked up by early-warning satellites, the weapon’s initial direction is known, giving defenders the ability to begin judging its likely targets and determining which defenses to engage. Hypersonic weapons would not be invisible bullets.
Perhaps the holy grail of characteristics — that which separates hypersonics from traditional ballistic missiles — is their ability to maneuver during midcourse, or the middle phase of their flight. However, as with speed and stealth, the ability to maneuver has also been exaggerated. Changing trajectory during glide phase requires using https://eaglepubs.erau.edu/introductiontoaerospaceflightvehicles/chapter/flying-fast/
acting upon the vehicle. Maneuvering produces increased drag, which in turn slows the vehicle, reduces the overall range it can travel, and compounds the surface heating issue, meaning whatever the vehicle gains in evasion, it forfeits in range and speed. Thus, the idea of a hypersonic weapon free to meander throughout the atmosphere evading any and all defenses is incorrect. In reality, all hypersonics will face a tradeoff between maneuvering capability, speed and range that will inhibit their utility.
Developing hypersonic cruise missiles meanwhile faces additional challenges. The technology for scramjets is still https://www.sciencedirect.com/science/article/abs/pii/S0376042120300488?via%3Dihub
to accurately replicate the high-speed, high-temperature conditions necessary for testing HCMs and those currently under construction cannot fully recreate all aspects of hypersonic atmospheric flight. This shortage delays development, increases cost, and limits opportunities to refine and improve HCM technology.
To make matters more challenging, hypersonic weapons face electronics design and https://www.militaryaerospace.com/sensors/article/14310559/lockheed-martin-hypersonic-ruggedization-thermal-management-new-materials
Some of these issues also apply to MaRVs, although the duration of extreme heating and vibration, and the time during which communication and maneuvering is required, would be much shorter than for a hypersonic weapon.
Should these engineering and manufacturing hurdles be overcome, most hypersonic weapons will still likely be vulnerable to existing theater missile defense systems. Technical analysis https://www.c4isrnet.com/opinion/2023/12/08/drag-race-hypersonic-threats-are-slow-enough-for-us-missile-defenses/
that the U.S. Aegis Ballistic Missile Defense system and the Army’s Patriot PAC-3 can engage hypersonic weapons traveling at Mach 10 or slower when they dive from their glide altitude toward a target on the ground. This means that theater-range weapons that start gliding at around Mach 10 or slower can’t evade these defenses. Similarly, HCMs that operate below roughly Mach 7 throughout their trajectory would be too slow. Long-range HGVs could likely overcome missile defenses, but only if they were still travelling faster than approximately Mach 10 when they begin their dive toward their target. Russian and Chinese hypersonics are alleged to operate in the Mach 10-12 range, but they would experience enough atmospheric drag during flight that they would likely be slowed enough that Patriot and Aegis could intercept them.
All things considered, the case for U.S. hypersonics remains weak. But why, then, are governments such as Russia and China racing to field weapon systems they label “hypersonic?”
First, hypersonics could serve as a way to project power and claim some level of technological parity with the United States. Both Russia and China view hypersonics as having potential to offset perceived U.S. advantages in theater missile defense and precision strike capabilities and complicate U.S. defense planning — if the technological challenges can be overcome.
Second, hypersonics are a useful psychological and geopolitical tool that allow Russia and China to portray themselves as technological leaders in a domain that they believe bestows global prestige. For Russia, it is also a matter of showcasing military innovation to maintain its influence in the global arms market, even if the results of combat usage of these weapons have not met expectations. At the same time, China sees hypersonics as a possible element in its strategy to challenge U.S. naval dominance in the Indo-Pacific. Concerns https://www.cpr.org/2024/09/21/u-s-lags-behind-china-and-russia-in-hypersonic-weapons-colorado-rep-doug-lamborn-says/
by U.S. leaders further feed the perception of menace and overstate the threat from adversarial development of hypersonics, even if the challenges to such development remain daunting.
But the United States need not follow Russia and China down this costly path. It has better options for maintaining its military edge.
A 2023 https://www.cbo.gov/system/files/2023-01/58255-hypersonic.pdf
project.
Hypersonic weapons, whether of the long-range, short-range, or cruise missile variety, face technical and production challenges that make them unnecessary for the Pentagon’s stated objective of overcoming adversaries’ zones of denial.
This is not to say that hypersonics have no role to play in a future U.S. military strategy, but up to now, their value proposition has failed to clearly define their strategic benefits for the United States.
The time has come for a more critical examination of the hypersonics debate, one that prioritizes strategic value, technological feasibility and fiscal responsibility over the false allure of hypersonic speed and maneuverability.
Shawn Rostker is a Research Analyst at the Center for Arms Control and Non-Proliferation, where his work focuses on nuclear strategy, arms control and emerging technologies. He holds a Master's in Security Studies from Georgetown University and has been published in the Bulletin of the Atomic Scientists, The Diplomat. CalMatters and Asia Times.
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 18:25
Daniel Penny Hired By Andreessen Horowitz After Acquittal In Subway Case
Daniel Penny Hired By Andreessen Horowitz After Acquittal In Subway Case
Daniel Penny, the Marine veteran https://www.theepochtimes.com/us/daniel-penny-found-not-guilty-in-subway-death-of-jordan-neely-5770199
of criminally negligent homicide last year after using a chokehold to subdue a mentally ill subway passenger, has been hired by the Silicon Valley venture capital firm Andreessen Horowitz.
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Penny joined Andreessen Horowitz as a deal partner on its American Dynamism team, according to the company’s https://a16z.com/author/daniel-penny/
. It is unclear when Penny joined the investment company.
Andreessen Horowitz states on its website that the department focused on investing in companies that support the national interest, including aerospace, defense, public safety, education, housing, and industrials.
Vice President JD Vance said in a https://x.com/JDVance/status/1886928702396883241
on social media platform X on Tuesday that Penny’s hiring was “incredible news.”
Vance previously https://www.theepochtimes.com/us/jd-vance-invites-daniel-penny-as-guest-at-army-navy-game-following-acquittal-5775939
Penny as a “good guy” and invited him to the U.S. Army–Navy game after his acquittal in December 2024. Vance’s post was later shared by David Ulevitch, a general partner at Andreessen Horowitz who leads the company’s American Dynamism team.
The Epoch Times has reached out to Ulevitch for comment but did not receive a response by publication time.
Penny was found not guilty by a Manhattan jury on Dec. 9, 2024, in connection with the death of Jordan Neely. Neely was a mentally ill homeless man who died after Penny restrained him during a 2023 incident on a New York City subway.
His lawyers had argued that Penny was trying to protect himself and other passengers when he subdued Neely in a chokehold.
that Neely boarded the train and began screaming that he was ready to go back to jail. Prosecutors said that Penny’s hold on Neely had caused an asphyxial death.
Neely had previously been arrested for assaulting people at subway stations. He was diagnosed with schizophrenia and had drugs in his system at the time of his death.
Penny first spoke publicly about the case during an https://www.foxnews.com/video/6365822668112
with Fox News on Dec. 10, 2024, where he defended his actions. Penny said that he was not a “confrontational person” and that he did not “want any type of attention or praise” for his actions.
“The guilt I would have felt if someone did get hurt, if he did do what he was threatening to do, I would never be able to live with myself,” he told the news outlet. “I’ll take a million court appearances and people calling me names and people hating me just to keep one of those people from getting hurt or killed.”
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 17:40
Ford Slides 5% On Tariff Concerns, Warning Profit Could Fall $2 Billion In 2025
Ford Slides 5% On Tariff Concerns, Warning Profit Could Fall $2 Billion In 2025
In the fourth quarter of 2024, Ford posted a net income of $1.8 billion, or 45 cents per share, a strong turnaround from last year' s net loss of $526 million, or 13 cents per share. Excluding one-time charges, adjusted earnings per share came in at 39 cents. Here's the full Q4 results:
Adjusted EPS: 39c vs. 29c y/y, estimate 32c
Total revenue: $48.2 billion, +4.8% y/y
Ford Blue revenue: $27.3 billion, +4.2% y/y, estimate $25.85 billion
Ford Model e revenue: $1.4 billion, -13% y/y, estimate $1.8 billion
Ford Pro revenue: $16.2 billion, +5.2% y/y, estimate $15.57 billionAdjusted EBIT: $2.1 billion, +91% y/y, estimate $1.89 billion
Adjusted EBIT margin: 4.4% vs. 2.3% y/y, estimate 4.36%
Ford Blue EBIT: $1.58 billion, +94% y/y, estimate $1.25 billion
Ford Model e EBIT loss: $1.39 billion, -12% y/y, estimate loss $1.34 billion
Ford Pro EBIT: $1.63 billion, -10% y/y
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It is now clear that Farley faces mounting challenges, including overhauling the company’s EV strategy to curb losses and cutting high warranty repair expenses. The automaker lost a record $5.1 billion on EVs last year and expects that deficit to widen to as much as $5.5 billion in 2024.
While Farley is pushing for more affordable, longer-range models, those won’t hit the market until 2027. Meanwhile, the pressure on Ford shares continues, with the stock falling nearly 19% last year, in contrast to General Motors’ 48% surge.
Farley has emphasized the need to close Ford’s $7 billion to $8 billion cost disadvantage against competitors, largely driven by warranty costs. He has tied executive bonuses to improving quality and efficiency, with the company targeting $1 billion in cost cuts this year. “In 2025, we expect to make significantly more progress on our two biggest areas of opportunity – quality and cost,” Farley said. “We control those key profit drivers, and I am confident that we are on the right path.”
Ford’s 2025 guidance reflects headwinds, including a 2% decline in industry-wide pricing and slower sales, but does not factor in potential new tariffs under a Trump administration:
Adjusted EBIT: $7 billion to $8.5 billion, estimate $8.57 billion
Ford Pro EBIT: $7.5 billion to $8 billion
Ford Blue EBIT: $3.5 billion to $4 billion
Ford Model e EBIT loss: $5 billion to $5.5 billion
Ford Credit EBT: about $2 billion
Adjusted free cash flow: $3.5 billion to $4.5 billion
Capital expenditure: $8 billion to $9 billion, estimate $8.66 billion
Incoming CFO Sherry House said: “There is no question that 25% tariffs on Mexico and Canada would have a major impact on our industry. That said, we believe the Trump administration intends to support the American auto industry.”
Tariff concerns are also weighing on the industry. “I know tariffs are on everyone’s mind,” House added.
Trump has also pledged to eliminate federal incentives for electric vehicles, including the $7,500 tax credit that dealers consider critical for sales.
In kneejerk reaction to the disappointing guidance, Ford shares tumbled 5% after hours...
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... sliding back below $10 and the lowest level in fouf years.
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https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 17:20
Trump's Energy Dominance Agenda Looks Like Texas
Trump's Energy Dominance Agenda Looks Like Texas
,
As Trump’s energy agenda comes to focus, Texas is already leading the way.
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In his massive flurry of executive actions after being sworn in, President Donald Trump made clear that https://www.reuters.com/business/energy/trumps-energy-actions-his-first-day-2025-01-21/
based on deregulation, innovation, and exploration.
Perhaps most consequentially, he declared a national energy emergency and put permits for oil and gas infrastructure on a fast track. He also signed executive orders to roll back oil and gas restrictions in Alaska and along our nation’s coasts and restarted the approval process for liquid natural gas exports. These actions — with more certainly to come — will incentivize a marked increase in energy production and exploration here in America.
But it would be wrong to think of these actions as mere energy policy. On the campaign trail, President Trump regularly spoke about how domestic energy is the key to success on the seemingly unrelated issues of global stability, clean air, clean water, and lower prices on utilities, housing, groceries, and more.
Take inflation and the economy. Energy impacts the price of everything else because it takes energy to manufacture products, grow crops, and move goods to stores, consumers, and construction sites. High energy prices drive up the costs of transportation, groceries, housing, healthcare, and everything else the American people rely on. To solve the affordability crisis, we must solve the energy crisis.
The power of American energy can also be seen in environmental protection. The U.S. has one of the cleanest economies in the world, which means to have a clean environment we must produce as much energy as possible in the U.S. This is especially the case with https://www.realclearenergy.org/articles/2024/08/20/american_natural_gas_is_americas_clean_energy_standard_1052922.html
. When American production goes up, usage of cleaner energy goes up and dirtier energy goes down.
President Donald Trump already proved this was the case. During his first term, he cut red tape and empowered U.S. energy producers. Not only did these moves increase domestic energy production, under President Trump emissions https://abcnews.go.com/Politics/us-greenhouse-gas-emissions-drop-trump-climate-experts/story?id=74848440
. In fact, the Biden-Harris administration had higher emissions than Trump did despite years of heavy-handed green energy policies. Clearly our LNG production and export capacity is as much an environmental issue as it is an energy and cost issue.
On the foreign policy front, America’s leverage in the world plummets if other nations rely on Russia, Iran, or Venezuela for their energy needs instead of on the U.S. If we want a free and stable world, we must produce enough energy not only for ourselves, but also enough to keep our allies strong and adversaries in check.
Not to mention according to the International Energy Agency, AI, cryptocurrency, and data centers could https://www.iea.org/reports/electricity-2024/executive-summary
their 2022 energy consumption levels by 2026. To take advantage of these technologies that will drive American prosperity in the next generation, we must increase energy production substantially.
Simply put, America’s strength at home and abroad demands more energy, and Trump is already starting to deliver.
If President Trump’s pro-energy agenda — an agenda that drives down prices, promotes global stability, fuels technological innovation, and delivers a cleaner environment — sounds familiar, that’s because it’s exactly what Texas has been doing for decades.
Texas is the friendliest state for energy production. We are the https://www.eia.gov/state/print.php?sid=TX
, and in 2023, we produced 27% of our nation’s clean natural gas. We have long-welcomed energy exploration, offshore drilling, and innovative extraction techniques like horizontal drilling and hydraulic fracturing.
But we also haven’t rested on our laurels on oil and gas. With regard to renewable sources, we have the https://bkvenergy.com/learning-center/how-much-solar-power-is-generated-in-texas/
Texans.
With our all-of-the-above energy approach, Texas has already proven that Trump’s energy agenda will be a success. In recent years, https://gov.texas.gov/news/post/texas-economy-expands-faster-than-nation#:~:text=The%20Texas%20economy%20expanded%20at,America%2C%E2%80%9D%20said%20Governor%20Abbott.
. Costs are down, economic strength is up, and our environment is clean.
Texans know that when our energy industry thrives, our citizens thrive. As President Trump continues to embrace the full potential of American energy, our nation as a whole will start to experience the Texas success story.
Catherine Frazier is a communications strategist based in Texas and founder of Eberly Advisors. She previously served in senior roles for Texas Gov. Rick Perry and U.S. Sen. Ted Cruz.
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Wed, 02/05/2025 - 17:00
https://www.zerohedge.com/energy/trumps-energy-dominance-agenda-looks-texas
She Had Sex With 1000 Men For Nothing...
She Had Sex With 1000 Men For Nothing...
https://modernity.news/2025/02/05/she-had-sex-with-1000-men-for-nothing
An Only Fans thot who banged over 1000 men in the space of 12 hours in an attempt to gain more subscribers can’t even post the video on the platform, meaning she essentially carried out the stunt for nothing.
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As we previously highlighted, OF ‘creator’ Bonnie Blue posted a video on social media bragging about breaking the most disgusting world record in history, claiming that a total of 1,057 men had their way with her.
“This is what my face looks like after taking 1,000 men less than 12 hours ago,” she announced, claiming that she slept with a different guy every 41 seconds.
Now, Only Fans has banned the video, reasoning that it cannot verify the age of all the participants.
A statement from the pornography company reads “OF is a platform designed for creators who have completed our comprehensive onboarding process and choose to monetize their content.”
“To keep our community safe, OF also verifies the age, identity, and consent of all parties featured in explicit content on OF,” it continues, adding “We do not allow a large number of non-OF creators to be featured on an account even where release forms have been provided.”
Imagine being so disgusting that the biggest porn site in the world takes the moral high ground and refuses to host the content.
Because the footage has never seen the light of day, many Only Fans coomers are suggesting the entire stunt never happened.
Some might call it the ultimate anticlimax.
* * *
Your support is crucial in helping us defeat mass censorship. Please consider donating via https://pauljosephwatson.locals.com/support
.
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 16:20
https://www.zerohedge.com/personal-finance/she-had-sex-1000-men-nothing
Crypto Regulatory Pivot Accelerates: FDIC Releases 790 Pages Of Letters; SEC Dials Down Oversight, Reassigns Lawyers
Crypto Regulatory Pivot Accelerates: FDIC Releases 790 Pages Of Letters; SEC Dials Down Oversight, Reassigns Lawyers
That's quite a pivot...
The Federal Deposit Insurance Corporation (FDIC), the regulatory body overseeing banks in the United States, has released 790 pages of additional correspondence related to firms offering crypto services to clients.
According to the https://www.fdic.gov/news/press-releases/2025/fdic-releases-documents-related-supervision-crypto-related-activities
show requests from banks and other institutions to offer crypto services to clients were almost always met with resistance, delays, constant requests for more information and pause letters.
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https://cointelegraph.com/news/fdic-releases-790-pages-crypto-letters-regulatory
the newly revealed document tranche included previously released correspondence from 24 banking firms and additional correspondence from other firms that requested permission to offer crypto-related services.
“Looking forward, we are actively reevaluating our supervisory approach to crypto-related activities,” FDIC Acting Chairman Travis Hill wrote, marking a seismic shift in the government agency’s stance toward the crypto industry.
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Additional FDIC document relating to crypto services. Source: https://www.fdic.gov/foia/correspondence-related-crypto-related-activities
FDIC exposed in Freedom of Information Act request
Coinbase filed two Freedom of Information Act (FOIA) https://cointelegraph.com/news/coinbase-files-two-new-foias-against-us-regulators
in October 2024.
One of the requests sought documentation relating to a 15% cap on bank deposits from crypto-related companies.
A US court https://cointelegraph.com/news/us-fdic-banks-pause-crypto-activities-court-docs
in December 2024, which included several heavily redacted pause letters sent to banks offering crypto services or products to clients.
Following the public release of the documents, US Judge Ana Reyes https://cointelegraph.com/news/fdic-ordered-amend-redactions-crypto-pause-letters
for the heavy redactions and ordered the agency to produce more transparent documents.
The FDIC “cannot simply blanket redact everything that is not an article or preposition,” Judge Reyes wrote in a Dec. 12 order, which characterized the redactions as a “lack of good-faith effort.”
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Senator Lummis’ letter to the FDIC instructing them to preserve records related to crypto enforcement. Source: https://www.lummis.senate.gov/wp-content/uploads/1.16_Sen.-Lummis-FDIC-Doc-Preservation-Letter2.pdf
Wyoming Senator Cynthia Lummis https://cointelegraph.com/news/senator-lummis-fdic-destroyed-chokepoint-docs
related to Operation Chokepoint 2.0 in January 2025 and instructed the agency to preserve all records relating to “digital asset activities” from 2022 onward.
Senator Lummis also threatened to make criminal referrals to the US Department of Justice if the destruction of evidence by FDIC employees was discovered by the Senate Banking Committee.
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At the same time, https://decrypt.co/304501/sec-dials-down-crypto-oversight-reassigns-agency-lawyers-report
that the U.S. Securities and Exchange Commission (SEC) is cutting back its specialized crypto enforcement unit, reassigning more than 50 lawyers and staff members focused on regulating digital assets as a changing landscape under President Donald Trump takes root.
Several members of the crypto unit have been shifted to different departments within the agency, according to a Tuesday https://www.nytimes.com/2025/02/04/business/sec-crypto-task-force.html#:~:text=The%20Securities%20and%20Exchange%20Commission%20is%20moving%20to%20scale%20back,knowledge%20of%20the%20matter%20said.
by The New York Times, which cited several anonymous sources.
At least one senior lawyer was removed from the enforcement division altogether - a move some insiders described as an “unfair demotion,” per the report.
The crypto unit overhaul is part of the Trump administration’s efforts to curtail government intervention in digital assets. Trump has vowed to curb regulatory oversight in the crypto sector since his Presidential campaign and make the U.S. a global leader in digital assets.
SEC Commissioner Hester Peirce, who long ago earned the nickname "Crypto Mom," has laid out how the watchdog will regulate the digital asset industry with its new crypto task force—and did so in a letter that blasted the previous administration's approach. Peirce, who was announced as the new task force's boss last month, wrote Tuesday that the SEC would take a while to get on track and regulate a fast-moving and arcane industry. "It took us a long time to get into this mess, and it is going to...
While the SEC has not yet responded to requests for comments from Decrypt on the restructuring, Commissioner Hester Peirce, who now leads the agency’s newly formed crypto task force, has signaled a significant shift in the agency’s priorities.
Peirce, a longtime advocate for clearer crypto guidelines, https://decrypt.co/304395/trump-sec-crypto-task-force-priorities-mess
Tuesday, calling it “marked by legal imprecision and commercial impracticality.”
Known affectionately by those within the industry as “Crypto Mom,” Peirce likened the agency’s past treatment of digital assets to “a car careening down the road” and vowed to introduce a more balanced framework.
The staff reassignment also raises questions about ongoing SEC lawsuits against major crypto firms, including crypto giant Coinbase. The SEC https://www.sec.gov/newsroom/press-releases/2023-102
the exchange in 2023, alleging it operated as an unregistered securities platform.
That case became a litmus test for former Chair Gary Gensler’s assertion that most cryptos should be classified as securities.
During Gensler’s tenure, multiple industry leaders shot back, accusing the SEC of attempting to “https://decrypt.co/294465/coinbase-cuts-ties-with-law-firms-hiring-anti-crypto-sec-officials
” the crypto industry while refusing to provide clear regulatory guidelines.
On Thursday, the U.S. Securities and Exchange Commission expedited approval for the Bitwise Bitcoin and Ethereum ETF, allowing it to be listed and traded on NYSE Arca. Bitwise’s hybrid ETF will offer investors direct exposure to Bitcoin (BTC) and Ethereum (ETH) in a single fund with Coinbase’s custody business to oversee the fund’s holdings.
“I really want to interpret this as a sign the new SEC will be faster, but no way to know really,” Bloomberg senior ETF analyst Eric Balchunas wrote on X,...
The SEC’s overhaul is just one piece of the Trump administration’s broader effort to rewrite the rulebook on crypto.
Last month, the agency https://decrypt.co/302510/sec-rescinds-controversial-crypto-accounting-rule-signals-regulatory-shift
Staff Accounting Bulletin No. 121 (SAB121), a controversial policy that forced firms to treat customer-held crypto as a liability.
Critics, including Peirce, said the rule unfairly burdened banks and kept them from embracing digital assets.
In one of his first executive orders, the President https://decrypt.co/302490/trump-executive-order-federal-crypto-reserve-no-bitoin
a presidential working group on crypto policy and outright banned the creation of a central bank digital currency (CBDC)—a clear rejection of a government-issued “digital dollar.”
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 14:20
Embraer Inks Largest-Ever Private Jet Order, Shares Soar To 1995 Highs
Embraer Inks Largest-Ever Private Jet Order, Shares Soar To 1995 Highs
Brazilian planemaker Embraer has signed its largest-ever deal with Flexjet, the second-largest operator of commercial private jets, to supply 182 aircraft with an option for 30 additional units. The new fleet will include Praetor 600, Praetor 500, and Phenom 300E models.
"This is the largest order placed by Flexjet in its 30-year history and is also the largest firm order for Embraer's executive aircraft," Embraer wrote in a statement. Flexjet operates within the fractional jet ownership segment.
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Citigroup analyst Stephen Trent commented on the order, telling clients: "Although an order of this size very likely includes discounting, the depth and breadth of this order looks robust, in terms of what it means for the company's backlog and jet delivery stream."
Embraer shares on the Ibovespa stock index jumped 10%, with 7x trading volume compared with the 20-day average. Shares have hit the highest on record dating back to the mid-1990s.
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"We see the announcement as positive, not only because it reinforces its solid operational momentum in Executive Aviation, but also because it corroborates the long-term delivery outlook following Embraer's current capacity expansion," XP Inc. analyst Lucas Laghi told clients.
Embraer Executive Jets' CEO Michael Amalfitano wrote: "We are very pleased with Flexjet's renewed commitment to Embraer through this comprehensive purchase agreement, which further strengthens our more than 20-year strategic partnership."
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Embraer has outperformed Boeing and Airbus shares in the last year.
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 14:00
https://www.zerohedge.com/markets/embraer-inks-largest-ever-private-jet-order-shares-soar-1995-highs
Trump To Sign Order Barring Men From Women's Sports
Trump To Sign Order Barring Men From Women's Sports
https://www.theepochtimes.com/us/trump-set-to-sign-order-barring-men-from-womens-sports-5804709
(emphasis ours),
President Donald Trump will sign an executive order on Wednesday calling for the end of men playing in women’s sports.
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The “Keeping Men Out of Women’s Sports” order is aimed at upholding federal Title IX rules—established in 1972 to set a level playing field for women’s athletics programs.
It will put a stop to “dangerous and unfair” situations where males compete against females in school and amateur athletics, according to a White House official.
The new guidelines are intended to “preserve the rights and dignity for women, opportunities for young girls.”
Trump is demanding that women be provided equal opportunities in terms of safety, fairness, and privacy. His order points to the benefits of athletics for young girls, including higher self-esteem and fewer instances of drug use, obesity, and teenage pregnancy.
Schools that fail to comply will face investigations by the U.S. Department of Education and could lose federal funding, according to the new order.
Denver East High School is one such school, the White House official said. Investigators are looking into decisions it made to eliminate some women’s restrooms and turn them into coed spaces.
Funds provided through Title IX are dependent on a school’s commitment to preventing discrimination based on sex, among other things.
"Gender ideology insanity is over."
White House Press Secretary https://twitter.com/karolineleavitt?ref_src=twsrc%5Etfw
— Sky News (@SkyNews) https://twitter.com/SkyNews/status/1887206342512787757?ref_src=twsrc%5Etfw
The Trump administration says it is working with sporting bodies, including a host of associations and organizations, to collectively identify ways to protect women.
Officials are asking the National Collegiate Athletics Association to review its policies. More than 7,000 female collegiate athletes have come forward demanding that male athletes be removed from their competitions, the order notes.
A group of state attorneys general will convene at the White House soon to discuss how state laws on the issue can be enforced, the official said.
Schools and universities that allow men who identify as women to compete in female athletics could face lawsuits from female students who say they have been negatively affected, the official noted.
Nearly 900 medals in women’s sports were awarded to male competitors in recent years, the White House said, noting that this has cost girls scholarship opportunities and other important mental and emotional milestones.
In some instances, sexual assault survivors have been forced to shower and share locker rooms with male athletes, officials said.
In 2022, a male volleyball player in a high school varsity match in North Carolina https://www.theepochtimes.com/us/congresswoman-says-transgender-athletes-dont-hurt-anyone-former-volleyball-player-disagrees-5612944
into Payton McNabb’s head, knocking her unconscious.
McNabb said she suffered from a neck injury, concussion, lasting vision impairment, and partial paralysis in the right side of her body, as well as mental anguish.
The previous administration interpreted Title IX regulations quite differently.
President Joe Biden signed an executive order on his first day in office to allow men to compete in women’s programs. He equated gender identity with biological sex, citing the U.S. Supreme Court’s 2020 ruling in Bostock v. Clayton County, which held that Title VII of the Civil Rights Act of 1964 protects employees against discrimination because of sexuality or gender identity.
“Every person should be treated with respect and dignity and should be able to live without fear, no matter who they are or whom they love,” Biden’s executive order reads. “Children should be able to learn without worrying about whether they will be denied access to the restroom, the locker room, or school sports.”
This effectively made women’s sports co-ed programs, thus “erasing women’s sports and women’s spaces,” the current White House official said, adding that it was a “slap in the face to the countless female athletes who dedicate tremendous effort to be the best in their sport, only to be forced to compete against biological men.”
In April 2024, a federal appeals court overturned West Virginia’s “Save Women’s Sports Act,” a law barring males from competing in female competitions. The Biden administration had argued against the law.
Trump’s team says it will also work with the United Nations to find solutions, pointing to a U.N. report that found women need single-sex spaces.
While critics have said that the president is attempting to ban transgenders in sports, the White House says the rules have “nothing to do with that” and suggests that transgender athletes could play in a coed program or on male squads.
On his first day in office, Trump signed an https://www.whitehouse.gov/presidential-actions/2025/01/defending-women-from-gender-ideology-extremism-and-restoring-biological-truth-to-the-federal-government/
addressing gender identity.
“It is the policy of the United States to recognize two sexes, male and female,” the order states. “These sexes are not changeable and are grounded in fundamental and incontrovertible reality. Under my direction, the Executive Branch will enforce all sex-protective laws to promote this reality.”
The U.S. House of Representatives also recently passed a bill that would ban men from competing in women’s sports.
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 13:40
https://www.zerohedge.com/political/trump-sign-order-barring-men-womens-sports
US Diplomats Warn Trump That Sending Gazans To Egypt Will Destabilize Sisi Regime
US Diplomats Warn Trump That Sending Gazans To Egypt Will Destabilize Sisi Regime
Egypt will not be swayed to take in Palestinians from the Gaza Strip, US officials in the region have told the White House in recent days as they brace for the Trump administration to ramp up pressure on Cairo, Middle East Eye can reveal.
Trump has also said that Jordan will take in Palestinians ahead of King Abdullah II’s visit to Washington next week. The growing divide between diplomats and the White House has heightened tensions, pitting President Donald Trump and his closest advisers against career diplomats in the region, who are ferrying messages to Arab officials.
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In the case of Egypt, US officials warned the White House that the controversial proposal could destabilize a close ally and that Egypt would not be susceptible to financial incentives, a senior US diplomat in the region told MEE.
The notion that Palestinians can be moved to Egypt, Jordan or any third country is widely regarded as ethnic cleansing of the besieged enclave and would likely violate international law.
Another mid-level US diplomat in the region working on this issue told MEE that the White House appeared “tone deaf” to the assessments of US diplomats and remained intent on pursuing the plan to send Palestinians to Egypt.
Last week, US Secretary of State Marco Rubio raised the topic in a phone call with his Egyptian counterpart, Badr Abdelatty, one of the officials told MEE. Both US officials say they expect the rift between US embassies in the region and the White House to widen following Israeli Prime Minister Benjamin Netanyahu’s meeting with Trump on Tuesday.
'Pure demolition site'
Ahead of his meeting with Netanyahu at the White House, Trump reiterated his stance on Gaza, calling it a “demolition site” and saying that the best solution would be to “just clean out that whole thing”.
"It's a pure demolition site. If we could find the right piece of land, or numerous pieces of land, and build them some really nice places with plenty of money in the area, that's for sure. I think that would be a lot better than going back to Gaza," he told reporters.
Steve Witkoff, Trump’s Middle East envoy, said on Tuesday that “solving where people will go” had become a “big issue”. Trump had initially said Egypt could take in refugees temporarily, but Witkoff indicated otherwise. "It is unfair to have explained to Palestinians that they might be back in five years. That's just preposterous,” he said.
Both Trump and members of his administration said on Tuesday that it would take 10 to 15 years to rebuild Gaza, with Trump saying that it is "inhumane" to make people live in a place that's "uninhabitable".
Israel has made no secret of its desire for Egypt to accept Palestinian refugees from Gaza following its offensive on the enclave in response to the Hamas-led 7 October attacks. Egyptian officials at the time said accepting forcibly displaced Palestinians was a “red line”, and the discussion faded.
However, the ceasefire has shifted Israel’s priorities and the Trump administration’s public backing of the idea has emboldened Israel’s leadership. Trump’s son-in-law and former adviser, Jared Kushner, first proposed the forced displacement of Palestinians from Gaza in March 2024.
Egyptian officials remain publicly resolute in their refusal to accept Palestinians. President Abdel Fattah el-Sisi said last week that it was “an injustice that we cannot take part in”.
Egypt braced for cut in military aid
An Egyptian diplomat told MEE that Cairo is taking Trump’s rhetoric seriously and is preparing for the possibility that the $1.3bn in annual US security assistance could be suspended if the Trump administration attempts to use it as leverage.
Trump has generally maintained good relations with Sisi, whom he famously referred to as his “favorite dictator” in 2019.
According to the diplomat, Sisi has actually benefited from Trump’s rhetoric, as it has allowed him to embrace the popular Palestinian cause at a time when Egypt is struggling with debilitating economic crises.
The country has been grappling with currency devaluation and inflation. Last year, it secured a $7.6bn aid package from the European Union, split between grants and favorable loans.
Egyptian security services organized rare protests at the Rafah border crossing with Gaza on Friday in a show of defiance against Trump’s plea. The protests came two days after the US ambassador to Egypt, Herro Mustafa Garg, a career diplomat, visited the crossing.
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Egypt has already taken in about 200,000 Palestinians from Gaza since the start of Israel's war on Gaza, the source said. A neighborhood referred to as "Little Gaza" has sprung up in Cairo.
The Palestinian ambassador in Cairo put the official number lower, https://www.middleeasteye.net/live-blog/live-blog-update/over-80000-palestinians-have-fled-egypt-ambassador-says
between 80,000 and 100,000 Palestinians had entered Egypt. The Egyptian diplomat also told MEE that Cairo is considering organizing protests in front of the US embassy as well.
Sisi rules Egypt with an iron fist and popular protests are not tolerated. Sisi came to power in a 2013 coup that toppled Egypt’s first democratically elected president, Mohamed Morsi.
"If I were to ask this of the Egyptian people, all of them would take to the streets to say ‘no’," Sisi said last week. One Egyptian official with knowledge of the matter told MEE that while Sisi and his closest advisors have privately entertained the idea of accepting more Palestinians from Gaza, Egypt's military establishment is adamantly opposed to any discussion.
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Wed, 02/05/2025 - 13:25
"We Are Watching A Rapid Re-Ordering Of How The World Works"
"We Are Watching A Rapid Re-Ordering Of How The World Works"
By Benjamin Picton and Michael Every of Rabobank
The USA’s 10% additional tariffs on imports from China – described by Donald Trump as an “opening salvo” - took effect yesterday. China retaliated swiftly by announcing 15% tariffs on US coal and LNG, and 10% tariffs on crude oil, agricultural machinery and large engine cars. Those retaliatory tariffs only effect a small proportion of US exports, but they are surgically designed to cause maximum discomfort for iconic US companies like Chevrolet and Ford.
To prove that they know where the sensitivities lay, China has also launched anti-trust investigations into Google and NVIDIA, and is considering fresh scrutiny of Intel. Additionally, new export controls on critical minerals that are needed for the manufacture of high-tech products, and for which China dominates global production, have been announced.
Despite the tit-for-tat between the world’s two largest economies, which seems likely to escalate further, markets were still luxuriating in their relief that a North American trade war has been averted for at least the next 30 days. Consequently, 10-year Treasury yields fell 4.5bps to 4.51%, the Bloomberg Dollar Spot Index fell almost 1% to be back below 108, and US stocks rallied with gains led by the NASDAQ – up 1.35%.
A soggy JOLTS report that showed job openings falling by more than 500,000 from November to December also contributed to the softer Dollar and lower bond yields, but market pricing for the path of Fed policy rates is little changed. Layoffs fell from November’s upwardly-revised figure of 1.8mn to 1.77m, but this was still well above the 1.74m median estimate on the Bloomberg survey.
European equities shrugged off early wobbles following China’s tariff announcements to get in on the rally. The EuroStoxx 50 gained 0.89%, the CAC40 was up 0.66% and the German DAX rose 0.36%. Britain’s FTSE100 was conspicuous as one of the few losers on the day.
Crude oil prices continued a recent run of divergence as the WTI front future fell 0.66% to $72.70/bbl (thanks to the China tariffs), but the more international Brent crude front future rose 0.32% to $75.96, in part due to President Trump signing an executive order directing “maximum pressure” on Iran to prevent Iranian acquisition of a nuclear weapon and to drive Iranian oil exports down to zero! Sensationally, Trump also let slip that he has left instructions for Iran to be “obliterated” if he happens to be assassinated by an Iranian agent. All of this is apparently only worth a small uptick in Brent prices.
The differing price action in WTI and Brent is interesting as an illustration of the effects of tariff barriers on globalised markets. Are we going to see more and more basis effects introduced into financial instruments? Probably. This will create new headaches for financial risk managers to go alongside the headaches faced by supply chain managers.
Also notable for its price action on the day was gold. It hit a fresh all-time high of $2,842/oz, continuing a stellar run since mid-December and a longer-term bull market that stretches back to mid-2022 (rate hikes at the time notwithstanding). This is interesting for loads of reasons, whether it be the buying of foreign central banks who want to get out of reach of US sanctions by holding a no-counterparty asset, or investors buying up the yellow metal as an inflation hedge. There is also an interesting divergence occurring between the copper/gold ratio and US 10-year treasury yields. Does this divergence close at some point for the historical correlation to resume? If so, does that happen via lower gold prices (central banks may have to become sellers), lower yields (in a world of rising tariffs?), higher copper prices (perhaps courtesy of massive energy investment?) or some combination of all of the above?
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Equity markets may be choosing to accentuate the positives, but clearly we are watching a rapid re-ordering of how the world works. Somewhat lost in the hubbub around Trump tariffs being delayed and China imposing its own fresh duties was news of Elon Musk’s progress in closing down USAID and firing thousands of federal workers, comments from Trump’s crypto Czar David Sacks that the administration is still examining the feasibility of establishing a strategic Bitcoin reserve, and news that the United States would be removing the $800 de minimis exemption from tariffs for low value packages being shipped from China to the USA. That final point is a big deal for Chinese e-tailers Shein and Temu, and a strategic free kick for US competitor Amazon.
On top of that, Bloomberg is reporting that Panama may be poised to cancel contracts with Hutchison Ports, the Hong Kong domiciled operator of two of the five ports adjacent to the Panama Canal. This follows bellicose rhetoric from President Trump regarding China’s influence over the canal, and comments from Secretary of State Marco Rubio who described China’s interest in a piece of infrastructure that is vital to US strategic interests as “unacceptable”.
As if all of that wasn’t geopolitical turbulence enough, Gaza is back in the headlines and maybe takes the cake for the most consequential news of the past 24 hours.
In a joint press conference with Israeli Prime Minister Netanyahu, President Trump said that the USA will be taking some form of ownership over Gaza; redeveloping it into a "Rivieria" to bring jobs and peace. This will involve relocating the Gazan population to Jordan and Egypt - both of whom are not thrilled by this idea - before they can eventually return.
This comes at a time when the Houthis had been making some conciliatory noises about allowing resumption of Western shipping (ex-Israel) through the Red Sea, but now surely raises the prospect of further ongoing disruptions to the Suez Canal.
Within four weeks the U.S. will announce its new stance over the Israel-Palestine issue, with the implication that a two-state solution may no longer be on the table. This is all floated as opening the door to Israel-Saudi normalisation - which the Israeli press has suggested actually depends on the U.S. and/or Israel striking Iran to remove its nuclear threat (!).
At the same time, Turkey is close to striking a deal for defense bases in its former Ottoman territory, the now Islamist-led Syria.
In short, welcome to the era of conspicuous volatility and conspicuous statecraft.
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 12:45
https://www.zerohedge.com/markets/we-are-watching-rapid-re-ordering-how-world-works
Military Plane Carries Indian Migrants Back From US In Furthest Deportation Flight Yet
Military Plane Carries Indian Migrants Back From US In Furthest Deportation Flight Yet
Indian media is reporting an unprecedented first - that US military flights are being used to deport illegal migrants from India.
Regional reports are citing a US official who say this is the furthest such flight involving military transport flights for migrants, also amid reports that illegals are also being flown to the US Army's base at Guantanamo Bay Cuba. Here's what the English-language Times of India says in an unconfirmedhttps://timesofindia.indiatimes.com/india/us-sends-back-illegal-indian-migrants-in-military-aircraft/articleshow/117925897.cms
:
In the first such operation of its kind involving India since the return of Donald Trump to the White Hosue, the US dispatched a C17 miliary aircraft carrying an unspecified number of illegal Indian migrants to India. Anonymous US officials were quoted as saying dozens had been deported, and unconfirmed reports put the number of number of deportees at north of 200, but there is no confirmation about the same by either county.
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The report continues, "The people who are returning, all verified Indian nationals, are among the thousands of Indians identified for deportation under the Biden administration."
This after President Trump previewed last month, "For the first time in history, we are locating and loading illegal aliens into military aircraft and flying them back to the places from which they came," according to a press briefing issued by Trump last month.
:
Like several other nations, India is working behind the scenes to appease the Trump administration and avoid the brunt of its trade threats. In the last few weeks, India’s Prime Minister Narendra Modi has delivered a series of concessions to the White House on issues core to Trump’s agenda. Modi is expected to meet Trump in Washington next week.
India’s Ministry of External Affairs did not offer an immediate comment. Bloomberg earlier reported that the South Asian nation is willing to take back 18,000 undocumented Indian migrants from the US.
But we should note that a couple hundred illegal undocumented Indian migrants at this point is but a very small political concession by Modi. Trump and the Indian leader have had very warm relations in the past, and during Trump's first administration.
Currently, all eyes are focused on flights to central America, but it could demonstrate how far the new president is willing to go, in terms of costly cross-continental flights all the way to southern Asia.
Bloomberg has noted that India's own numbers are likely an underestimate. "While the total number of undocumented Indian migrants in the US isn’t certain, a report published last year by the Department of Homeland Security pegged the number at around 220,000 as of 2022," the publication wrote.
First U.S. military flight deports Indian migrants under https://twitter.com/hashtag/DonaldTrump?src=hash&ref_src=twsrc%5Etfw
— The Times Of India (@timesofindia) https://twitter.com/timesofindia/status/1886682352434229347?ref_src=twsrc%5Etfw
"An aircraft with around 200 people residing illegally in the US will land on Wednesday in Amritsar in India’s northern state of Punjab, according to people familiar with the matter, who asked not to be identified because the details aren’t public," Bloomberg reported further.
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Wed, 02/05/2025 - 07:45
China Finds Leverage Ahead Of Trade Talks: Beijing Mulls Probe Into Apple's App Store Practices
China Finds Leverage Ahead Of Trade Talks: Beijing Mulls Probe Into Apple's App Store Practices
Beijing appears to be reviving several antitrust investigations against US big tech companies.
https://www.ft.com/content/2ec45e79-9502-4ffd-82e8-888d9283c776
now reports that China's antitrust watchdog is mulling over opening a formal probe against Apple. These investigations should be viewed as a strategic move by Beijing to increase leverage ahead of upcoming trade talks between President Xi Jinping and President Donald Trump.
Bloomberg, citing sources familiar with the matter, reported that China's State Administration for Market Regulation (SAMR) is considering a potential probe into the world's most valuable company over the 30% fee it charges app developers. The potential investigation will also review how Apple blocks third-party payment services in the App Store.
The report continued:
The conversations stem from long-running disputes between Apple and developers such as Tencent Holdings Ltd. and ByteDance Ltd. over iOS store policies — a source of tension between the US company and regulators worldwide.
...
Chinese regulators believe that Apple may be charging local developers unreasonably high fees, the people said. They think the barring of third-party app stores and payment methods also hinders competition and hurts local consumers, the people said. If Apple resists making changes, the government may launch a formal investigation, the people added.
"Last year, the company revamped its store practices in the European Union to meet the requirements of the Digital Markets Act. That's led to third-party app marketplaces and outside payment methods," Bloomberg noted.
The news follows an FT report one day ago on SAMR opening up a competition investigation into Google. The report did not clearly state the scope of the investigation into Nvidia.
The tech investigations show that Beijing seeks leverage ahead of Xi's trade talks with Trump. On Tuesday morning, US tariffs of 10% went into effect, with https://www.zerohedge.com/geopolitical/tit-tat-china-strikes-back-tariffs-us-goods-google-probe
. Separately, Trump struck multiple deals with Canada and Mexico to delay imposing 25% tariffs.
In markets, Apple shares in New York slid nearly 3%...
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If trade talks between the US and China sour, China will likely open an official probe into Apple, which would be yet another headache for Tim Cook. The CEO is already dealing with https://www.zerohedge.com/markets/apple-slides-after-iphone-sales-miss-china-revenues-unexpectedly-tumble
in the world's largest handset market.
https://cms.zerohedge.com/users/tyler-durden
Wed, 02/05/2025 - 07:20
De Beers CEO Signals US Diamond Recovery, Criticizes China's Fake Stones Grown "In Microwaves"
De Beers CEO Signals US Diamond Recovery, Criticizes China's Fake Stones Grown "In Microwaves"
De Beers Chief Executive Officer Al Cook spoke with https://www.bloomberg.com/news/articles/2025-02-04/de-beers-ceo-says-us-diamond-demand-shows-signs-of-recovery
from cash-strapped consumers, while a surge in lab-grown diamonds from China has sent prices tumbling.
"So we saw some good signs in demand just before Christmas. In November and December, we saw demand for diamond jewelry in the US up around 8% year on year. So, there are some encouraging signals. Demand in the US has been reduced by lab-grown diamonds," Cook said.
He explained, "We have to tell the story of natural diamonds far better than we have. Lab-grown diamonds are like taking a poster of the Mona Lisa and putting it up in an art gallery and telling people it's the real thing. It's not - a natural diamond is created over a billion years, while lab-grown diamonds are created in a microwave in China in three weeks."
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Separately, Bloomberg noted:
Anglo American Plc CEO Duncan Wanblad said on Monday that the mining giant won't let its struggling De Beers diamond business be a drag on its restructuring. Wanblad said the company intended to exit De Beers by the end of this year, but given the state of the market that could spill over into 2026.
The diamond industry has been hammered by a twin crisis: cash-strapped consumers amid a luxury downturn and the proliferation of lab-grown diamonds flooding the world by China.
Cook pointed out in the interview that India has overtaken China to become the second-biggest market. He commented: "But we see growth, the regrowth of Chinese demand being a longer-term story," adding, "The good news is that India has taken over where China was."
According to Bloomberg data, citing the Diamond Standard Index, diamond prices have plunged to the lowest on record, with data going back to early 2002.
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Diamond deflation.
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Wed, 02/05/2025 - 06:55
US Postal Service Suspends Shipments Of Parcels From China, Hong Kong
US Postal Service Suspends Shipments Of Parcels From China, Hong Kong
The US Postal Service has suspending inbound international packages from China and Hong Kong Posts, delaying or blocking shipments from giant online retailers, and Amazon competitors, like Shein and PDD’s Temu. USPS said letters and flat mail from China and Hong Kong would not be affected, according to a statement on its website.
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Potential reasons behind the suspension could be to ensure the tariff is enforced and not bypassed by potential loopholes such as exporting multiple packages of smaller value items (https://waysandmeans.house.gov/2025/02/04/trump-administration-closes-the-door-on-china-skirting-u-s-tariffs-through-de-minimis-shipments/
). While it’s not clear what prompted the move, it followed Trump's decision to revoke a “de minimis” rule for China, which previously allowed small packages under $800 to enter the US duty-free. This exemption, often used by Chinese-linked e-commerce companies, was removed as part of a new 10% tariff on goods from China and Hong Kong, which took effect just after midnight Tuesday Washington time.
Washington is cracking down on a loophole that retailers like Temu and Shein have used for years to expand in the US, allowing them to ship high volumes of small packages and gain an edge over competitors like Amazon.com Inc. Critics say the flood of parcels from China is difficult to track and may contain illegal or dangerous goods.
According to US Customs and Border Protection data quoted by Bloomberg, the total volume of de minimis shipments into the US hit 1.4 billion packages in fiscal year 2024, about double the number in 2022. Predictably, discount online retailers like Temu and Shein contributed significantly to the spike in volume.
However, disruptions from the move may be more limited now than it would have been in previous years, as other postal operators have taken over the USPS’s role in handling cross-border lightweight e-commerce packages, including those from China, according to a US Office of Inspector General report in May 2023.
US officials have alleged that parcel mail, direct from China and via third-party countries, is a gateway for illicit drugs, including deadly fentanyl. “What the cartels in China have done is exploit that loophole to smuggle in not just fentanyl but all sorts of drugs,” White House trade adviser Peter Navarro told Politico in an event in Washington Tuesday.
The China tariff order took effect even as two others, for Mexico and Canada, were put on hold. Trump has hinted at a possible call with Chinese leadership this week, though details remain unclear. While the White House has not ruled out a deal to pause the Chinese tariffs, which could also impact the Postal Service’s ban, nothing has been confirmed yet.
Shares of Alibaba fell more than 2% in Hong Kong, while JD.com tumbled more than 5%, while the Hang Seng China index losses also extend, down 1.8% now.
In a Goldman note published late on Tuesday, the bank tried to assess the impact of Trump's removal of the de-minimis exemption on China's e-commerce platforms, where PDD's Temu has the highest US exposure amongst China cross-border players. Here are some of the highlights from the report (full note available to pro subs in the usual place).
For PDD, US contributes to around ~40% of GMV for Temu, while Temu was a 10% loss drag to PDD group profit in FY24E (and with minimal valuation implied by PDD's current market cap). Despite the new regulations, Goldman believes cost advantages of eCommerce platforms vs. US offline retailers will continue given the lower cost structures for online businesses (fewer layers between factories and end consumers), while Chinese platforms will continue to diversify their merchant bases beyond China to local merchants.
An evolving Temu business model and global diversification prior to these developments in tariff policy development, where Goldman has seen:
1) Temu's geographical diversification with the US contribution to Temu's global MAU from 100% at the time of launch in early-2023, down to its latest at 15% of Temu's global MAU as of Dec 2024 as per the latest eCommerce tracker, with fast expansions in South America and the Middle East;
2) Temu's ongoing US business model evolve from full-entrusted model (direct air freight shipments that enjoy de-minimis exemptions), to a rapidly growing semi-entrusted model that has recently reached 25% of Temu US GMV as of Sept-2024 (where merchants ship products by sea freight under traditional trade ahead of time); and,
3) Temu's business model has expanded beyond air freight direct shipments, with the semi-entrusted models launched in 19 countries as of Jan-2025 that do not depend on de-minimis.
The limited value that has been ascribed by the market to the Temu business in PDD's current market cap, as investors have been anticipating pending regulatory clarity around U.S. tariffs, multiple countries' de-minimis rules, personal data, etc. before being willing to ascribe any meaningful value to the Temu business, despite the fact that the Temu app reached 350mn MAU in Dec 2024.
Looking ahead, the key to watch will be any further tariffs/tax applied for cross-border eCommerce goods, and development of any risks related to targeted tariffs on China imports/app bans/expansion of the Uyghur Forced Labor Prevention Act (UFLPA) Entity List etc. that could pose a potential impact to Temu's US operations. Meanwhile, Goldman expects ongoing geographical diversification away from the U.S. and business model shifts, including further expanding the launch of its 3P marketplace to local US merchants (local-to-local sourcing) and semi-entrusted model for cross-border eCommerce platforms. Of course, none of that will help Temu if other countries piggyback on similar sanctions as the US.
More in the full Goldman note available to pro subs.
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Tue, 02/04/2025 - 23:49
https://www.zerohedge.com/markets/us-postal-service-suspends-shipments-parcels-china-hong-kong