"More Fake News!": White House Denies WSJ Report On Executive Order To Shut Down Education Dept
"More Fake News!": White House Denies WSJ Report On Executive Order To Shut Down Education Dept
(Update: 1250ET): The White House has denied a Wall Street Journal report which states that President Trump "is expected to issue an executive order as soon as Thursday aimed at abolishing the Education Department," calling the report "More Fake News!" - and adding that "President Trump is NOT signing an Executive Order on the Department of Education today."
đ¨More Fake News! President Trump is NOT signing an Executive Order on the Department of Education today. https://t.co/oicgkJw3uI
â Karoline Leavitt (@PressSec) https://twitter.com/PressSec/status/1897677235651547471?ref_src=twsrc%5Etfw
That said, Leavitt's comment is also sleight of hand - as the report's lede was that a draft of the order had been created - and that it was to be signed on Thursday. Leavitt only refuted the part about Trump signing it, while we know Trump has discussed eliminating the department.
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In fact, leaks about the admin preparing a draft EO to eliminate the Department of Education is https://www.nbcnews.com/politics/donald-trump/white-house-preparing-executive-order-abolish-department-education-rcna190205
.
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https://www.thecollegefix.com/trump-drafts-executive-order-to-close-down-education-department-report
President Donald Trump has drafted an executive order calling for the U.S. Department of Education to be shut down, The Wall Street Journal reported late Wednesday, citing unnamed âpeople briefed on the matter.â
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A draft of the order âdirects Education Secretary Linda McMahon to âtake all necessary steps to facilitate the closure of the Education Departmentâ based on âthe maximum extent appropriate and permitted by law,'â the Journal https://www.wsj.com/politics/policy/draft-of-trump-executive-order-aims-to-eliminate-education-department-5315c3a4
.
McMahon, during her confirmation hearing last month, had stopped short of saying she would shut the department down, arguing that takes an act of Congress.
However, McMahon told staff in an email Monday â the same day she was https://www.thecollegefix.com/senate-votes-to-confirm-linda-mcmahon-as-secretary-of-education/
by the Senate â that âTrump and the American voters had âtasked us with accomplishing the elimination of the bureaucratic bloat here at the Education Departmentâa momentous final missionâquickly and responsibly,'â the Journal reported, adding:
Fully unwinding the department would require a filibuster-proof, 60-vote majority in the Senate, legal experts have said. The major programs it administersâincluding money for students with disabilities and student loansâare codified in law and have significant political constituencies. The draft order doesnât mention Congress. âŚ
With around 4,500 employees as of last year, the department is the smallest cabinet-level agency. Polls show most Americans are skeptical of eliminating the department, and Democrats have rallied in opposition to the idea.
The federal agency began in 1979 under President Jimmy Carter and https://www.thecollegefix.com/trump-considers-executive-order-to-abolish-the-education-department-reports/
has an annual budget of about $80 billion.
The department is in charge of, among other things, financial aid and student loans for college students, career and vocational education funding, Title IX regulations and oversight, and the Office for Civil Rights. It also maintains massive data records on all schools in the nation.
The departmentâs federal student loan portfolio amounts to approximately $1.6 trillion in student loan debt, and it is also responsible for the Free Application for Federal Student Aid, or FAFSA, program.
Conservatives in Washington D.C. have argued that the federal student loan programs could be moved to the Treasury Department.
McMahon, at her confirmation hearing, https://www.thecollegefix.com/linda-mcmahon-says-she-would-downsize-education-department-if-confirmed/
the Office for Civil Rights could be moved to the Justice Department and disabilities support to the Department of Health and Human Services.
As The College Fix previously reported, the Trump team has already taken major steps in the last six weeks to purge the agency of diversity, equity and inclusion https://www.thecollegefix.com/trump-admin-purges-dei-from-education-department-suspends-staff/
.
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Thu, 03/06/2025 - 12:53
Waste Of The Day: Bank CEOs Earned Millions Before Government Bailout
Waste Of The Day: Bank CEOs Earned Millions Before Government Bailout
,
Topline: The Federal Deposit Insurance Corporation was forced to spend $31.6 billion to protect customers at three failed banks in early 2023. While taxpayers footed the bill, the CEOs of the three banks made out nicely, each collecting millions in compensation right before their banks folded, according to a Feb. 20 report from the https://www.gao.gov/products/gao-25-107032
.
?itok=YjQB-OHR
Key facts: First Republic Bank gave CEO James Herbert II $17.8 million in compensation in 2021, according to the GAO. Silicon Valley Bank awarded CEO Greg Becker $9.9 million in 2022 and Signature Bank paid $8.7 million to Joseph DePaolo the same year.
All three CEOs had base salaries below $1.2 million but multiplied their earnings with performance-based incentives, mostly paid out as stock in the bank.
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All three sold off large portions of their stock in the two years leading up to their banksâ failures, the GAO found. Between 2021 and 2023, Herbert II sold $52.9 million of his stock, DePaolo sold $39.8 million and Becker sold $30.7 million.
Herbert II and Becker were still selling stock in the first quarter of 2023, just weeks before their banks closed down. They collected $5.5 million and $3.6 million, respectively, the GAO said.
Each bank had at least four other executives earning more than $1 million per year, the GAO reported.
Background: The bank failures were the https://www.bankrate.com/banking/largest-bank-failures/
in U.S. history aside from Washington Mutualâs closure in 2008.
The FDIC had to spend $31.6 billion of taxpayer money to reimburse depositors for their losses: $16.1 billion for https://www.cnn.com/2023/06/23/investing/svb-bank-fdic/index.html
.
The FDIC also reimbursed several foreign businesses. Former vice president Mike Pence wrote in an op-ed for the https://www.dailymail.co.uk/news/article-11856039/VP-MIKE-PENCE-blasts-Biden-statement-SVB-collapse-insists-president-forcing-bailout.html
that âAmericans will also be paying to guarantee the deposits of many Chinese companies that were Silicon Valley customers. We have to stop the insanity of bailing out failing businesses.â
Search all federal, state and local government salaries and vendor spending with https://www.openthebooks.com/benjaminthechatbot/
.
Critical quote: âYou were paying out bonuses until literally hours before regulators seized your assets,â Sen. Sherrod Brown told Becker during a 2023 https://www.cnn.com/2023/05/17/investing/premarket-stocks-trading/index.html
. âWorkers face consequences, executives ride off into the sunset. Only in corporate boardrooms can you run your business into the ground, take the whole economy along with you and come out ahead.â
Summary: Something is amiss when a business closure hurts the governmentâs finances more than it does the executives running the business.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
https://cms.zerohedge.com/users/tyler-durden
Thu, 03/06/2025 - 07:20
https://www.zerohedge.com/political/waste-day-bank-ceos-earned-millions-government-bailout
Watch: South Korea Fighter Jets Accidentally Drop Bombs On Small Town
Watch: South Korea Fighter Jets Accidentally Drop Bombs On Small Town
South Korean F-16 fighter jets accidentally dropped Mk82 bombs on a town near the North Korean border during a live-fire drill, injuring 15 people and damaging multiple buildings, local media reported.
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The South Korean Air Force confirmed to https://www.koreaherald.com/article/10435093
that two F-16s dropped eight unguided MK-82 bombs outside the Seungjin Training Ground area that landed in the town of Pocheon.
After reports that a shell impacted the Pocheon area in South Korea and hit a house, South Koreaâs MBC News is now reporting that 7 are injured in total. MBC News also mentioned that the incident may be the result of a âfighter jet misfireâ during joint exercises with the United⌠https://t.co/20FGxP9TBE
â OSINTdefender (@sentdefender) https://twitter.com/sentdefender/status/1897474170654744748?ref_src=twsrc%5Etfw
Officials said the fighter jets were part of Freedom Shield Exercise 2025, the annual military exercise between the South Koreans and the Americans.
Footage of the bombing near Nangyu Bridge in Nogok-ri, Idong-myeon, Pocheon, about 31 miles northeast of Seoul, surfaced on X early Thursday.
South Korean Fighter Jet Accidentally Drops Bombs on Residential Village During US-ROK Drill
During a joint US-ROK military training exercise, a South Korean fighter jet mistakenly dropped eight bombs on the residential village of Pocheon, injuring four severely and leaving⌠https://t.co/Ul95PwvqYO
â Matt Kim (@FreeMattKim) https://twitter.com/FreeMattKim/status/1897517791818952865?ref_src=twsrc%5Etfw
quoted Pocheon Mayor Baeck Young-Hyun, who described the incident as "unthinkable." He urged the military and government to implement new measures to prevent further civilian harm.
"Something that should never have happened just happened," the mayor said, adding, "The place where the bombs landed is utterly chaotic and looks like a battlefield."
Footage of the aftermath...
UPDATE: Fifteen people were injured Thursday (Mar. 6) after fighter jets mistakenly dropped bombs on https://twitter.com/hashtag/SouthKorea?src=hash&ref_src=twsrc%5Etfw
's civilian area during live-fire drills.
Two KF-16 fighter jets dropped four respective air-to-surface bombs by mistake outside a live-fire range in https://twitter.com/hashtag/Pocheon?src=hash&ref_src=twsrc%5Etfw
â ShanghaiEyeđofficial (@ShanghaiEye) https://twitter.com/ShanghaiEye/status/1897569602928009357?ref_src=twsrc%5Etfw
Images emerging from the blast site clearly show a huge explosion and serious damage has taken place in Nogok-ri, near Nangyudae Bridge in Pocheon's Idong district. Residential area appears to have taken direct hit. 7 reportedly injured. https://t.co/OzqNhtqApY
â Raphael Rashid (@koryodynasty) https://twitter.com/koryodynasty/status/1897477671032119554?ref_src=twsrc%5Etfw
đ´https://twitter.com/hashtag/URGENTE?src=hash&ref_src=twsrc%5Etfw
â Rochex R. Robinson Bonilla (@RochexRB27) https://twitter.com/RochexRB27/status/1897481437365886983?ref_src=twsrc%5Etfw
𤯠In South Korea, a plane accidentally dropped 8 bombs on a residential area, injuring 15 people
This happened in the city of Pocheon, damaging two residential buildings and a church. Two of the 15 injured suffered serious wounds, Reuters reports.
Pocheon is located about 40⌠https://t.co/ki8opjD0H3
â NEXTA (@nexta_tv) https://twitter.com/nexta_tv/status/1897530214168605183?ref_src=twsrc%5Etfw
Ahead of the accident, Seoul's Joint Chiefs of Staff said the Freedom Shield joint drills, which will run from March 10 to 20, aim to strengthen the alliance's readiness for threats like North Korea. As of Thursday, all drills are suspended while an investigation is carried out.
Maybe the South Korean fighter jet pilots need more training in the bomb-dropping department...
https://cms.zerohedge.com/users/tyler-durden
Thu, 03/06/2025 - 06:55
https://www.zerohedge.com/military/watch-south-korea-fighter-jets-accidentally-drop-bombs-small-town
Is Pakistan The Canary In China's BRI Coal Mine?
Is Pakistan The Canary In China's BRI Coal Mine?
Pakistan is failing, in large part because of its close association with Beijingâs Belt and Road Initiative (BRI).
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Because coal mines tend to emit large quantities of poisonous carbon monoxide, miners in the old days would carry a caged canary into the mine with them. The birdâs more delicate constitution would succumb to rising gas levels long before the miners and signal that human life might be in jeopardy. The birdâs death cued the miners to get out. Pakistan, as an early and enthusiastic participant in the BRI, is suffering as a consequence and may well be issuing a signal for other participants to leave this particular âmine.â
Pakistanâs biggest problem centers on the power grid built for the country by the BRI, also known as âOne Belt, One Road.â It was expensive from the start, and because China built considerably more generating capacity than Pakistan needs, the burden of debt Pakistan now faces is simply unsupportable.
Tellingly, the problem is not just an unfortunate miscalculation of the sort that occurs frequently when nations invest. More ominously for all BRI participants, it is a feature of how Beijingâs scheme works.
In the scheme, Beijing approaches a less developed nation and offers to build the kind of infrastructure that presumably will help that nation make economic gains. Beijing offers to arrange loans for the recipient to pay for the project, always from state-owned Chinese banks. It also arranges for Chinese contractors to do the construction and for Chinese management to run the project once it is complete.
All the advantages lie on Beijingâs side. If, for some reason, the recipient nation cannot meet the financial obligations of the loan, ownership will revert to Beijing. Even if the recipient nation can repay the loan, that recipient remains beholden to Beijing to sustain the project and make it worthwhile.
There is another source of difficulty. Because Chinese authorities choose the projects, always for political and diplomatic rather than economic reasons, the projects often miss the needs of the recipient nationâs economy or are too large or too small. Since Beijing is using the recipient nationâs money, albeit in a loan, it has little incentive to match the projects to needs. What makes matters worse is that the nations approached by the Chinese regime seldom have the ability to assess the economic needs accurately.
For Pakistan, Chinaâs initial offer, about a decade ago, looked attractive. The country was short of electric generating capacity. China came in and built a whole series of coal, solar, and hydroelectric plants, an effort that cost the equivalent of some $25 billion, a huge sum for Pakistan. In addition to the obligation to repay the loan in only 10 years, Pakistan also had to pledge to take all the electricity generated by the array of Chinese-managed facilities for the next 40 years and further promised the Chinese state companies running them a 34 percent return on the effort.
It should have been obvious from the start that Pakistan could never deliver on these terms. Because the calculations were political and diplomatic rather than economic, China built much more generating capacity than Pakistan will need for many years to come, by some calculations, 40 percent more. But the terms make Pakistan buy all they generate anyway.
To meet all these onerous obligations, Pakistan has raised the price of electricity to higher levels than in some developed and considerably richer nations. Electricity for a few lights, a small refrigerator, and a couple of fans can cost a Pakistani family the equivalent of $60 a month, a steep sum indeed considering that the countryâs per-capita income amounts to the equivalent of some $125 a month.
Pakistan is already the equivalent of $1.0 billion in arrears on the debt to Chinese state banks, and that does not include the $9.0 billion more it will owe on two new Chinese nuclear plants.
Pakistan is in worse shape than most other BRI participants, largely because it was an early player, not because the deals with other countries have different characters, though each has different specifics. Already, https://www.forbes.com/sites/miltonezrati/2022/11/21/chinas-vaunted-belt-and-road-initiative-seems-to-have-come-a-cropper/
just to keep several participants from backing out of the program.
If Pakistan is any indication, the BRI scheme is fundamentally flawed. What may be worse, the failing participants will force strains on Chinese finance and contractors at a time when Chinaâs debt-heavy, underperforming economy can ill afford it.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 23:50
https://www.zerohedge.com/geopolitical/pakistan-canary-chinas-bri-coal-mine
The Sahel Is The Global Epicenter For Terrorism
The Sahel Is The Global Epicenter For Terrorism
Terrorism remains a persistent threat in many countries around the world.
While there were fewer terrorism-related deaths and attacks in 2024 than in the previous year, the number of countries that experienced at least one attack rose from 58 to 68. Meanwhile, as conditions improved in 34 countries overall in 2024, they deteriorated in 45 others - the highest number since 2018.
This is according to the latest edition of the https://www.visionofhumanity.org/maps/global-terrorism-index/#/
, which measures the impact of terrorism around the world by tracking the number of incidents recorded each year. The index is published annually by the Institute for Economics & Peace (IEP), a think-tank dedicated to promoting understanding of the economic, cultural and political factors that lead to peace.
https://www.statista.com/chart/34053/share-of-deaths-from-terrorism-by-country/
data compiled by the IEP show that the Sahel remained the epicenter of terrorism in 2024, marking the second year in a row.
https://www.statista.com/chart/34053/share-of-deaths-from-terrorism-by-country/
You will find more infographics at https://www.statista.com/chartoftheday/
The region accounted for nearly half of all terrorism-related deaths last year at 3,885, which is also a ten-fold increase since 2019.
Niger was the country to see the biggest increase in terrorism deaths year-on-year, rising by 94 percent to a total of 930 people.
While far less frequent and far less deadly, terrorist attacks have also surged in Western democracies, with the number of incidents in Europe having doubled in 2024 to a total of 67.
The report states that lone actor terrorism is particularly on the rise in the West and that these acts are typically carried out by teenagers who have no formal ties to terrorist organizations but instead âbecome radicalized through online content, constructing personal ideologies that often blend conflicting viewpoints influenced via access to fringe forums, gaming environments, encrypted messaging apps and the dark web.â
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 23:00
https://www.zerohedge.com/geopolitical/sahel-global-epicenter-terrorism
Kim Jong-Un's Sister Threatens Retaliation After US Nuclear-Powered Carrier Arrives In South Korea
Kim Jong-Un's Sister Threatens Retaliation After US Nuclear-Powered Carrier Arrives In South Korea
https://libertarianinstitute.org/news/us-aircraft-carrier-arrives-in-south-korea-as-show-of-force/
The USS Carl Vinson https://www.dvidshub.net/news/491847/carl-vinson-carrier-strike-group-arrives-busan-republic-korea
in South Korea at the start of this week. The move was a show of force and drew a sharp rebuke from Pyongyang.
A Pentagon press release said the nuclear-powered aircraft carrier, which serves as the flagship of the Navyâs Carrier Strike Group One, "arrived in the Republic of Korea (ROK) for a scheduled port visit" beginning March 2, adding that "The visit to Busan exemplifies the US commitment to the region, further enhancing relationships with ROK leaders and the local population.â
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Rear Adm. Michael Wosje, commander of the strike group, said the show of force was important to US policy in the region. âAn aircraft carrier port visit demonstrates our commitment to the alliance between the US and the Republic of Korea.â He continued, âOur alliance remains the linchpin of peace and security in Northeast Asia and the Korean Peninsula, and we are dedicated to working with our ROK Navy counterparts to ensure stability in the region.â
However, deployments of advanced US military equipment to the Korean Peninsula have been repeatedly denounced by the DPRK, often prompting reciprocal shows of force from North Korea. In response to the Vinsonâs arrival in South Korea, Kim Yo-jong, the sister of Supreme Leader Kim Jong-un said, âThe United States is repeatedly committing provocative acts that ignore North Koreaâs security concerns and worsen the situation.â
âThe United States is openly demonstrating its intention to be the most hostile and confrontational toward the Democratic Peopleâs Republic of Korea through these practical actions,â she added.
âThe root of the escalation of the situation on the Korean Peninsula clearly lies with the United States and its allies, who are further intensifying their military moves to transplant NATOâs infrastructure into the region and raise the level of war preparedness,â she continued.
Pyongyangâs complaints are rooted in the fact that the Vinson, as well as a US submarine that arrived in South Korea earlier this year, are capable of delivering nuclear strikes. Kim said North Korea would continue to strengthen its nuclear program. âThe hostile policy toward North Korea pursued by the United States today, along with its actions, provides ample justification for the infinite strengthening of our nuclear war deterrence. We will not just sit back and comment on the situation,â she explained.
During Donald Trumpâs first administration, he initially took an https://libertarianinstitute.org/articles/maximum-failure-trumps-convulsive-north-korea-strategy-cant-bring-kim-to-the-table/
towards North Korea, publicly threatening âfire and fury.â However, the relationship warmed after several months and Trump met with Kim three times.
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While Trump was unable to ink an official agreement with Kim by the end of his first term, Pyongyang had limited its missile tests and worked to demilitarize the border with South Korea. After Joe Biden took over in the Oval Office, diplomacy with the DPRK ground to a halt.
Additionally, Biden worked to create a new military pact between the US, South Korea, and Japan, which was viewed as a threat by North Korea. Throughout the Biden administration, both sides escalated their provocative military drills. Those war games and missile tests have continued in the first month of the new Trump presidency.
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 15:00
Beige Book: Economic Activity, Employment And Prices Rose Since January, Economic Expectations Are "Optimistic"
Beige Book: Economic Activity, Employment And Prices Rose Since January, Economic Expectations Are "Optimistic"
Was that it for the Atlanta Fed recession (which as we described, managed to fool everyone into believing the US economy is crashing because of... https://www.zerohedge.com/markets/us-gdp-tumbles-because-soaring-gold-imports
)?
Two months after the https://www.federalreserve.gov/monetarypolicy/beigebook202501-summary.htm
or one month into Trump's 3rd 2nd presidency, economic activity actually "rose slightly since mid-January."
Reading the latest Fed report we find that six districts reported no change, four reported modest or moderate growth, and two noted slight contractions.
Here are the specific details:
Consumer spending was lower on balance, with reports of solid demand for essential goods mixed with increased price sensitivity for discretionary items, particularly among lower-income shoppers.
Unusual weather conditions in some regions over recent weeks weakened demand for leisure and hospitality services.
Vehicle sales were modestly lower on balance.
Manufacturing activity exhibited slight to modest increases across a majority of Districts.
Contacts in manufacturing, ranging from petrochemical products to office equipment, expressed concerns over the potential impact of looming trade policy changes.
Banking activity was slightly higher on balance among Districts that reported on it.
Residential real estate markets were mixed, and reports pointed to ongoing inventory constraints.
Construction activity declined modestly for both residential and nonresidential units.
Some contacts in the sector also expressed nervousness around the impact of potential tariffs on the price of lumber and other materials.
Agricultural conditions deteriorated some among reporting Districts.
Yet despite this mixed picture, overall expectations for economic activity over the coming months were slightly optimistic.
Taking a closer at the labor market, the Beige Book found that employment nudged slightly higher on balance, with four Districts reporting a slight increase, seven reporting no change, and one reporting a slight decline.
Multiple Districts cited job growth in health care and finance, while employment declines were reported in manufacturing and information technology.
Labor availability improved for many sectors and Districts, though there were occasional reports of a tight labor market in targeted sectors or occupations.
Contacts in multiple Districts said rising uncertainty over immigration and other matters was influencing current and future labor demand.
Wages grew at a modest-to-moderate pace, which was slightly slower than the previous report, with several Districts noting that wage pressures were easing.
Turning to inflation, not surprisingly (to anyone who shops) prices increased moderately in most Districts, but several Districts reported an uptick in the pace of increase relative to the previous reporting period.
Input price pressures were generally greater than sales price pressures, particularly in manufacturing and construction.
Many Districts noted that higher prices for eggs and other food ingredients were impacting food processors and restaurants.
Reports of substantial increases in insurance and freight transportation costs were also widespread. Firms in multiple Districts noted difficulty passing input costs on to customers.
However, contacts in most Districts expected potential tariffs on inputs would lead them to raise prices, with isolated reports of firms raising prices preemptively.
Here is a snapshot of highlights by Fed District:
Boston: Economic activity increased slowly, boosted by a surge in home sales. Prices increased modestly on average, but contacts perceived that upward pressure on prices could emerge in response to tariffs. Employment declined slightly, and wages increased modestly. Expectations were mostly optimistic but marked by growing uncertainty.
New York: Regional economic activity was little changed in early 2025. Employment grew slightly and wage growth was moderate, with labor supply and labor demand coming back into balance. Selling price increases picked up to a moderate pace after some slowing last period. Many businesses noted heightened economic uncertainty and expressed concern about tariffs.
Philadelphia: Business activity declined slightly during the current Beige Book period after a slight increase last period. Employment continued to grow slightly; wages and prices grew modestly. Contacts noted that changes in fiscal and trade policies pose a risk of higher inflation. Generally, sentiment fell, but firms remain optimistic about future growth amid economic uncertainty.
Cleveland: District business activity was flat in recent weeks, although contacts expected activity to increase in the months ahead. Consumer spending was down, and some contacts noted declining consumer confidence. Employment levels remained flat. Contact reports suggest that nonlabor input costs edged up, while reported price increases continued to be modest.
Richmond: The regional economy grew modestly in recent weeks. Consumer spending increased modestly, down from the moderate rate previously reported. Nonfinancial services firms also reported modest growth while manufacturing activity was unchanged. Price growth remained moderate, but firms across sectors expressed concerns about overall uncertainty in the economy and about tariffs potentially leading to future price increases.
Atlanta: The economy of the Sixth District expanded at a modest pace. Employment was steady. Wages, input costs, and prices increased modestly. Retail sales fell slightly. Travel and tourism were steady. Home sales declined somewhat. Transportation activity grew modestly. Loan growth was moderate. Manufacturing expanded slightly. Energy demand increased modestly.
Chicago: Economic activity was little changed. Employment was up slightly; consumer and business spending were flat; nonbusiness contacts saw little change in activity; and construction and real estate and manufacturing activity decreased slightly. Prices increased modestly; wages rose moderately; and financial conditions were unchanged. Farm income in 2025 was expected to be similar to 2024.
St. Louis: Economic activity and employment have been flat. Prices continued to increase moderately but were above expectations. Contacts noted that they were holding off investment due to policy uncertainty and indicated that tariffs would result in higher prices. The outlook has declined from slightly optimistic in our previous report to neutral.
Minneapolis: Economic activity was steady. Employment grew but labor demand and hiring softened. Wage and price increases were moderate. Consumer spending was flat with improvements in travel and tourism. Manufacturing experienced modest improvements. Construction of nonresidential units slowed but accelerated modestly for residential units. Commercial real estate was mostly unchanged, and home sales improved. Agricultural conditions were flat.
Kansas City: Economic activity was unchanged on balance, but consumer spending decreased moderately. Prices rose at a moderate pace. While higher prices deterred spending, business contacts indicated they were more likely to scale back rather than take a hit on margins by softening pricing. Employment levels remained steady, though contacts noted a rise in labor force churn.
Dallas: The Eleventh District economy continued to expand moderately. Nonfinancial services activity grew while retail sales were flat, and manufacturing activity was rather volatile. Lending picked up notably and commercial real estate activity improved, though housing demand was tepid. Employment held steady, and little change was seen in wage and price growth. Contacts noted sharply higher uncertainty around the outlook.
San Francisco: Economic activity ticked down. Employment levels were stable. Price levels and wages grew slightly. Retail sales fell modestly and demand for services weakened a bit. Manufacturing activity improved somewhat, while conditions in agriculture and residential real estate softened. Commercial real estate and lending activity were steady.
Confirming that contraray to conventional wisdom the economic picture improved notably since January, the latest February Beige Book saw just 2 mentions of recessions, down sharply from 6 two months prior. But more notably, while mentions of "slow" extended their decline to 35 from 38, mentions of inflation rose to a two year high of 15, up from 11 last month...
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... suggesting that the US economy - while hardly on fire as it was during the hyperinflationary period of Biden's admin - continues to chug along and is hardly collapsing as so many Trump foes would like to see.
Source: https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20250305.pdf
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 14:44
White House Delays Canada, Mexico Automaker Tariffs For One Month Amid Trump-Trudeau Deadlock
White House Delays Canada, Mexico Automaker Tariffs For One Month Amid Trump-Trudeau Deadlock
Update (1415ET): It's official, President Trump is exempting automakers from newly imposed tariffs on Mexico and Canada for one month, the White House said Wednesday.
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"We are going to give a one month exemption on any autos coming through USMCA," said WH spox Caroline Leavitt, referring to the trade deal negotiated with Canada and Mexico in Trump's first term.
"Reciprocal tariffs will still go into effect on April, 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage."
As noted below, the announcement came after administration officials met Tuesday to discuss the matter with the heads of Ford, GM and Stellantis.
Trump and Trudeau Have It Out
noted earlier, following a phone call with Prime Minister Justin Trudeau to discuss recently imposed tariffs, President Donald Trump said he told the Canadian leader there hasnât been enough done to stem the flow of fentanyl.
Trump also accused Trudeau of using the tariff issue to âstay in power.â
Trump discussed his phone call with Trudeau in two posts made on his Truth Social platform on the afternoon of March 5.
âJustin Trudeau, of Canada, called me to ask what could be done about Tariffs,â Trump wrote. âI told him that many people have died from Fentanyl that came through the Borders of Canada and Mexico, and nothing has convinced me that it has stopped.â
Trump also wrote that the call ended in a ââsomewhat' friendly manner,â while also accusing Trudeau of using the tariff issue to hold onto power in his final days in office.
âHe was unable to tell me when the Canadian Election is taking place, which made me curious, like, whatâs going on here? I then realized he is trying to use this issue to stay in power,â Trump said.
Trumpâs social media posts came amid comments earlier that day from U.S. Commerce Secretary Howard Lutnick, who said he would announce a change to the tariffs policy.
âHeâs going to come up with a plan this afternoon, weâre going to announce that plan,â Lutnick told Bloomberg on March 5.
Repeating comments made the previous day, Lutnick mentioned finding some âmiddleâ ground on tariffs with Canada and Mexico.
âThereâs going to be 25 percent tariffs,â Lutnick clarified. âItâs not the âmiddle' as in a number. I think itâs a middle in terms of USMCA [or] not USMCA,â suggesting items covered by the free trade deal between the countries would receive a different tariff treatment.
Canada responded to the U.S. tariffs by announcing an initial CA$30 billion surtax on a variety of U.S. goods from orange juice to motorcycles. The plan is for an additional CA$125 billion of goods to be slapped with a 25 percent surtax three weeks later if U.S. tariffs remain in place.
Trump imposed 25 percent tariffs on Canadian goods and 10 percent on its energy imports on March 4, after a 30-day pause expired. The pause had been applied for the Trump administration to assess measures taken by Canada to strengthen border security and counter fentanyl trafficking.
Trump said on March 3 there was âno room leftâ for Canada and Mexico to avoid tariffs and that âvast amounts of fentanylâ is entering the United States from the bordering countries.
In reaction to the U.S. tariffs on March 4, Trudeau said he doubts fentanyl is the issue, and instead suggested Trump is using them to cause the collapse of the Canadian economy to facilitate âannexation.â
Trudeau and his ministers have said that a very small amount of fentanyl from Canada crosses into the United States and that, nonetheless, the Canadian government has stepped up measures to combat the problem. Ottawa has also stressed that both countriesâ economies are intricately linked and that consumers and businesses on both sides will lose in the trade war.
âTheyâve chosen to launch a trade war that will, first and foremost, harm American families,â Trudeau said. âTheyâve chosen to sabotage their own agenda that was supposed to usher in a new golden age for the United States and theyâve chosen to undermine the incredible work weâve done together to tackle the scourge that is fentanyl, a drug that must be wiped from the face of the earth.â
Lutnick was asked by reporters on March 4 to respond to Trudeauâs comments about annexation made earlier that day, and noted the prime minister is in his last days in office.
âJustin Trudeau is running the end of his term and I donât really want to think about the ridiculous things he said the last couple of days,â he said. âItâs sad, itâs time for him to go and letâs move on, have a new government in Canada.â
Along with the border and fentanyl-related tariffs, Canada is facing the threat of 25 percent tariffs on steel and aluminum, which Trump said would be levied against every country on March 12.
A broader U.S. trade action is slated for April 2, with details about reciprocal tariffs expected to be announced. The Trump administration has already said it considers Canadaâs federal sales tax (GST), its Digital Services Tax aimed at tech giants, and its supply management system for goods like poultry and dairy as trade barriers acting as tariffs against the United States.
Trump and Lutnick have also spoken about bringing car manufacturing back to the United States, which could have a significant impact for the Canadian auto industry which is deeply integrated across the border.
*Â *Â *
Update (1216ET): The Trump administration is considering giving automakers a one-month reprieve from newly imposed tariffs on Mexico and Canada, after administration officials met Tuesday to discuss the matter with the heads of Ford, GM and Stellantis, Bloomberg reports, citing anonymous officials.
The major Detroit automakers have aggressively sought to halt or revise Trump's tariffs over concerns that they would have potentially catastrophic effects. (so, make your cars in the US?)
According to carmakers and experts cited, a rise in costs from the 25% tariffs imposed on US neighbors this week could send car prices skyrocketing by thousands of dollars almost immediately - and seize up supply chains.
In recent days, Commerce Secretary Howard Lutnick has hinted that there may be some carve-out exceptions to the initial tariffs - telling BBG television that the changes could be announced on Wednesday, including a potential reprieve for the auto sector in order to buy time to come up with plans to move both investments and production to the US.
The move sent both stocks and the Peso higher in mid-day trade.
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*Â *Â *
President Trump reiterated his focus on reciprocal tariffs in a speech overnight to a joint session of Congress, noting that there would be a "https://www.zerohedge.com/political/america-back-12-takeaways-trump-47s-first-major-policy-speech-congress
" but that we are "ok with that."
Global equity markets braced for a potential trade decision with Canada and Mexico overnight and into the US morning. This follows Trump https://www.zerohedge.com/markets/trade-wars-begin-all-you-need-know
on Tuesday and increased tariffs on Chinese goods to 20%, up from 10%.
On Tuesday afternoon, US Commerce Secretary Howard Lutnick stated on Fox Business, "I think the president is going to work something out with them," adding, "It's not going to be a pause, none of that pause stuff, but I think he's going to figure out, you do more, and I'll meet you in the middle some way, and we're going to probably be announcing that tomorrow."
Lutnick, speaking on Bloomberg on Wednesday morning, also reiterated that he expects a decision regarding Canada and Mexico this afternoon.
Latest trade headlines (courtesy of Bloomberg):
LUTNICK: TRUMP CANADA, MEXICO DECISION EXPECTED THIS AFTERNOON
LUTNICK: TRUMP MAYBE, MAYBE WILL CONSIDER GIVING RELIEF
LUTNICK: AIMING FOR 'SOMEWHERE IN THE MIDDLE' ON CANADA, MEXICO
Ahead of the potential trade decision with America's neighbors to the north and south, Goldman's Brooke Roach, Kate McShane, and others outlined to clients late Tuesday companies within their coverage universe that have sourcing exposure to Mexico and Canada. They pointed out that clothing company Kontoor Brands has the most exposure to Mexico, while Canada Goose has the most exposure to... you guessed it: Canada
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Roach and McShane noted that in their hardline stock universe coverage, many companies have either not disclosed their sourcing from Mexico and Canada or have a moderate level of exposure.
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The analysts also identified which companies in their softlines coverage universe are most heavily exposed to the escalating trade war with China.
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Hardlines coverage...
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Comments on tariff headwind and mitigation commentary on softline coverage.
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Comments on tariff headwind and mitigation commentary on hardline coverage.
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Canada Goose shares in New York have been battered by same-store sales, weak wholesale orders, fierce competition, and a sluggish Chinese market. Also weighing on shares have been trade war concerns, as it sources 80% of its products from Canada. Shares are trading at a five-year low, with 22.5% of the float sold short.
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The question remains for GOOS: Will positive US-Canada trade headlines be enough to ignite a squeeze?
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 14:15
New Filing In Anti-DOGE Lawsuit Cites Trump's Remarks On Musk's Role
New Filing In Anti-DOGE Lawsuit Cites Trump's Remarks On Musk's Role
Comments made by President Donald Trump on Tuesday night are being used in a lawsuit challenging the legality of his administrationâs Department of Government Efficiency (DOGE).
In a filing with the U.S. Court for the District of Columbia, the National Security Counselors, a public interest law group, highlighted remarks made by Trump during his https://www.theepochtimes.com/us/12-takeaways-from-trumps-first-major-policy-speech-to-congress-5820120
to a joint session of Congress.
âTo further combat inflation, we will not only be reducing the cost of energy, but will be ending the flagrant waste of taxpayer dollars,â Trump https://www.theepochtimes.com/epochtv/president-trump-addresses-congress-5818486
lawmakers in attendance.
âAnd to that end, I have created the brand-new Department of Government Efficiency, DOGE. Perhaps youâve heard of it.â
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Trump said DOGE, which is not an official government department, âis headed by Elon Musk, who is in the gallery tonight.â
He then went on to thank the billionaire businessman for âworking very hard.â
âHe didnât need this,â Trump said of Musk.
He added that he was sure that lawmakers from the Democratic Party also appreciated Muskâs efforts to slash wasteful government spending but âdonât want to admit that.â
Formally, the White House last week https://www.theepochtimes.com/us/amy-gleason-chosen-as-acting-doge-administrator-5816241
that Amy Gleason is the acting administrator of DOGE.
A recent court https://storage.courtlistener.com/recap/gov.uscourts.dcd.277463/gov.uscourts.dcd.277463.24.1.pdf
from the Office of Administration states that Musk is a senior adviser to the president, has no authority to make government decisions, and is not an employee of DOGE.
In their filing with the court, the National Security Counselors said Trumpâs remark âconclusively demonstrates that expedited discovery is urgently neededâ to âascertain the nature of the Department of Government Efficiency and its relationship to the United States DOGE Service.â
The filing is part of a lawsuit the National Security Counselors filed against Musk, Trump, and others in January.
It argues that DOGE is operating as a federal advisory committee, putting it in violation of the Federal Advisory Committee Act (FACA) which governs the establishment, operation, and termination of advisory committees within the executive branch of the federal government.
Lawsuit Argues DOGE Lacks Transparency
According to the lawsuit, FACA dictates that federal advisory committees must be âfairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee.â
Such committees should also maintain âfairly balancedâ membership, hold public meetings, keep detailed minutes of meetings, and file a charter, it states.
The lawsuit argues that âdue to DOGEâs lack of transparency, little is publicly known about its structure or membership,â putting it in violation of the act.
It further contends that DOGE is in violation of FACA because ânot a single member of DOGE is a federal employee or represents the perspective of federal employees, despite the evidence that DOGE intends to provide recommendations regarding federal employment practices and ways to reduce the size of the federal workforce.â
Plaintiffs are seeking an injunction barring DOGE from operating until it complies with FACA.
They have also asked the court to declare that DOGE is ânot properly constitutedâ and that any report or recommendation made by the advisory body âdoes not reflect the views of a lawfully constituted advisory committee.â
Jerald Lentini, an attorney for National Security Counselors and elected official in Manchester, Connecticut, and Joshua Erlich, an employment lawyer, are listed as co-plaintiffs in the lawsuit.
Both men sent in applications to be hired by DOGE but have yet to hear back, according to the lawsuit.
âPlaintiffs conclude that, upon information and belief, neither Lentini nor Erlich, nor anyone similarly situated who would represent the perspectives of federal employees (including national security employees), unions, or accountability and transparency advocates, will be selected for DOGE,â the lawsuit states.
The Epoch Times has contacted the White House for comment.
Last month, the Trump administration https://www.theepochtimes.com/us/white-house-reveals-receipts-of-federal-contracts-doge-has-terminated-5808928
of federal contracts that DOGE identified in its efforts to downsize government spending.
On Feb. 12, White House press secretary Karoline Leavitt said, âWe have contracts upon contracts that we can send and provide this information to you. Let me be very clear, we are not trying to hide anything. We have been incredibly transparent, and we will continue to be.â
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 13:30
https://www.zerohedge.com/political/new-filing-anti-doge-lawsuit-cites-trumps-remarks-musks-role
US Rejects Arab League's $53BN Alternative Gaza Reconstruction Plan
US Rejects Arab League's $53BN Alternative Gaza Reconstruction Plan
The United States and Israel have quickly rejected a new Gaza peace and reconstruction plan proposed by the Arab League under Egypt's leadership, which was unveiled Tuesday.
A counterproposal to Trump's provocative Gaza 'takeover' plan which advocates the removal of the Palestinian population to neighboring Arab states, the Egyptian plan would of course allow its roughly two million inhabitants to remain.
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The $53 billion plan approved by the Arab League aims to rebuild the destroyed Gaza Strip by 2030, while setting up hundreds of thousands of temporary housing units so that Palestinians won't have to leave. Arab leaders have blasted Trump's prior proposals as but greenlighting an Israeli ethnic cleansing campaign, and Jordan and Egypt in particular have vehemently rejected the possibility of resettling Palestinians in their territories.
It calls on UN Security Council to deploy an international peacekeeping force in Gaza and the occupied West Bank, which would establish security while reconstruction takes place - and foresees the recycling of rubble to expand Gaza's coastline and even "sustainable, green and walkable" housing and urban areas, also utilizing renewable energy.
Further, according to the https://apnews.com/article/israel-palestinians-hamas-war-news-ceasefire-hostages-03-04-2025-35f1959c28ad3c57a209f5464f2b5411
, "The communique said Egypt will host an international conference in cooperation with the United Nations for Gazaâs reconstruction, and a World Bank-overseen trust fund will be established to receive pledges to implement the early recovery and reconstruction plan."
Hamas has welcomed the plan, despite that it says the West Bank-based Palestinian Authority (PA) would eventually take over governance and management of the Gaza Strip.
"We welcome the Gaza reconstruction plan adopted in the summitâs final statement and call for ensuring all necessary resources for its success," the group said. The Islamist militant group further expressed support for "the formation of the Community Support Committee to oversee relief efforts, reconstruction and governance in Gaza."
An Israeli government statement said the Arab League's plan ultimately "fails to address the realities of the situation following October 7th, 2023, remaining rooted in outdated perspectives." It also blasted the Arab body for failing to condemn the Hamas Oct.7 terror attack in its statement announcing the plan.
Instead, the Israeli Foreign Ministry said, "Now, with President Trumpâs idea, there is an opportunity for the Gazans to have free choice based on their free will. This should be encouraged! Instead, Arab states have rejected this opportunity, without giving it a fair chance, and continue to level baseless accusations against Israel."
If this article is to be believed, Israel is gearing up to re-invade and occupy Gaza even more ruthlessly than they did before, empowered by the backing of Trump, whose Gaza takeover plan they are taking very "seriously" -- not just as some vague "negotiating" feint https://t.co/Y1FFRDv6tm
â Michael Tracey (@mtracey) https://twitter.com/mtracey/status/1895483386036363593?ref_src=twsrc%5Etfw
The White House also responded negatively, with White House National Security Council spokesman Brian Hughes asserting that the Arab plan did "not address the reality that Gaza is currently uninhabitable and residents cannot humanely live in a territory covered in debris and unexploded ordnance."
"President Trump stands by his vision to rebuild Gaza free from Hamas. We look forward to further talks to bring peace and prosperity to the region," he added.
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Wed, 03/05/2025 - 13:10
Trump Warns He'll Block Funding To Any Colleges That Have 'Illegal Protests'
Trump Warns He'll Block Funding To Any Colleges That Have 'Illegal Protests'
(emphasis ours),
President Donald Trump warned Tuesday that his administration will stop federal funding to colleges that allow âillegal protestsâ and will deport foreign students who participate.
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âAll Federal Funding will STOP for any College, School, or University that allows illegal protests,â Trump https://truthsocial.com/@realDonaldTrump/posts/114104167452161158
in a post on Truth Social. âAgitators will be imprisoned/or permanently sent back to the country from which they came. American students will be permanently expelled or, depending on ... the crime, arrested. NO MASKS! Thank you for your attention to this matter.â
Other than saying protesters should not wear masks, Trump did not go into detail about what could render a protest illegal.
The message comes a day after the Trump administration https://www.hhs.gov/about/news/2025/03/03/hhs-ed-gsa-announce-additional-measures-end-anti-semitic-harassment-college-campuses.html
federal agencies to review their financial ties with Columbia University in New York City and consider cutting tens of millions of dollars in grants and contracts over what officials say was the schoolâs inability to deal with anti-Semitism in the wake of the Oct. 7, 2023, Hamas terrorist attack on Israel.
U.S. Health Secretary Robert F. Kennedy Jr., one of the administrators tasked with reviewing Columbia Universityâs grants, said in a statement that âanti-Semitism ... is a spiritual and moral malady that sickens societies and kills people with lethalities comparable to historyâs most deadly plagues,â adding that âmaking America healthy means building communities of trust and mutual respect, based on speech freedom and open debate.â
In response to the directive, Columbia University said in a https://communications.news.columbia.edu/news/statement-notice-federal-agencies
that it is âfully committed to combatting antisemitismâ on its campus and is reviewing statements made by the Trump administration.
âWe look forward to ongoing work with the new federal administration to fight antisemitism, and we will continue to make all efforts to ensure the safety and wellbeing of our students, faculty, and staff,â the school said.
Columbia University has been the site of numerous demonstrations against Israel since the Hamas attacks. Last spring, a number of students camped out on school property and, at one point, took over a school building.
A school group that was involved in organizing the protests, Columbia University Apartheid Divest, said https://x.com/ColumbiaBDS/status/1896586564597432375/photo/1
a federal task force to investigate 10 universities, including Columbia, that had âincidents of Antisemitism.â
His latest post came days after Barnard College, an affiliate of Columbia University, saw pro-Palestinian protesters injure an employee, who later went to the hospital, as they tried to get into a building.
Meanwhile, the White House https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-president-donald-j-trump-takes-forceful-and-unprecedented-steps-to-combat-anti-semitism/
in January that the administration could deport âresident aliens who joined in the pro-jihadist protestsâ at colleges starting after the October 2023 terrorist attack in Israelâif they continued to partake in such activities. âI will also quickly cancel the student visas of all Hamas sympathizers on college campuses, which have been infested with radicalism like never before,â Trump also said.
Toward the end of the first Trump administration, in 2020, cities and colleges across the United States faced months of Black Lives Matter protests and riots in the wake of George Floydâs death.
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Wed, 03/05/2025 - 12:50
Democrats Refuse To Applaud Black Cancer Kid, Rep. Al Green Booted For Temper Tantrum During Trump Speech
Democrats Refuse To Applaud Black Cancer Kid, Rep. Al Green Booted For Temper Tantrum During Trump Speech
Last night, Democrats completely lost the plot during Trump's address to Congress.
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For starters, Rep. Al Green (D-TX) was https://pjmedia.com/matt-margolis/2025/03/05/al-green-explains-his-childish-outburst-during-trumps-speech-n4937586
for an 'old man shakes cane' stunt shortly after Trump began.
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An old man waving a cane and booing is a good rebranding for the Dems.
â Mary Katharine Ham (@mkhammer) https://twitter.com/mkhammer/status/1897110691758383331?ref_src=twsrc%5Etfw
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Meanwhile, Democrats were wearing pink shirts for feminism or some such malarkey - the day after they voted to https://www.cbsnews.com/news/senate-democrats-block-bill-ban-transgender-students-girls-sports/
that prevents transgender dudes from smoking actual females in sports (concussions, new records, dreams broken, etc).
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They were of course fuming when President Trump said that schools that allow a "man" to join the "girls' team, the school will lose all federal funding - simple!"
17/ TRUMP: BANNING TRANSGENDER ATHLETES FROM WOMENâS SPORTS
"If a man joins the girlsâ team, the school will lose all federal fundingâsimple!" https://t.co/fKvBkTBGc8
â Mario Nawfal (@MarioNawfal) https://twitter.com/MarioNawfal/status/1897187662450319432?ref_src=twsrc%5Etfw
They also held up stupid signs reading 'Elon Steals.'
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But the most egregious part of Democrats' Tuesday night tantrum was their refusal to stand, or clap, for a 13-year-old kid who survived brain cancer, and became an honorary Secret Service agent.
Watch this clip of President Trump honoring DJ and naming him as a secret service agent, and try not to tear up when this kid realizes what just happened. https://t.co/m6ww7AVnpv
â Jason Rantz on KTTH Radio (@jasonrantz) https://twitter.com/jasonrantz/status/1897128270422008141?ref_src=twsrc%5Etfw
They even refused to clap for this brave young man with brain cancer. I was taken aback by their ghastly behavior. https://t.co/o9s82p07IE
â Swig đşđ¸ (@OldRowSwig) https://twitter.com/OldRowSwig/status/1897131155029418383?ref_src=twsrc%5Etfw
"If you canât stand up and cheer for a kid with brain cancer being made an honorary member of the Secret Service, then you might be a deeply disturbed and fucked up person!!!" posted Donald Trump Jr. on X.
If you can't stand up and cheer for a kid with brain cancer being made an honorary member of the Secret Service, then you might be a deeply disturbed and fucked up person!!!
â Donald Trump Jr. (@DonaldJTrumpJr) https://twitter.com/DonaldJTrumpJr/status/1897128747691860346?ref_src=twsrc%5Etfw
"They could not even clap for a child battling cancer, or mothers who lost their children," said White House Press Secretary Karoline Leavitt on X, adding "Tonight, President Trump absolutely owned the moment. He showed the world why the American people overwhelmingly re-elected him to serve in the highest office in the land⌠President Trump is restoring common sense. The renewal of the American Dream is well underway, and we are just getting started!"
13-year-old DJ Daniel: âI had 13 brain surgeries and that's how many times my personality has changed.â
âThat's something that you don't hear from a terminally ill child.â
âI'm gonna keep on going into my gas tank runs out. And that's when God calls you home. You never know⌠https://t.co/aAipcIrxaq
â Collin Rugg (@CollinRugg) https://twitter.com/CollinRugg/status/1897290236658598356?ref_src=twsrc%5Etfw
Then there are these crones; with MSNBC's Nicolle Wallace suggested that the kid might commit suicide if he has to face Trump supporters at the Capitol, while Rachel Maddow called it "disgusting" that Trump celebrated a child who battled cancer.
This is genuinely the most repulsive comment I've heard in a very long time from anyone on television.
MSNBCâs Nicolle Wallace politicizes young DJâs moment at Trumpâs speech:
âI hope he has a long life as a law enforcement officer, but I hope he never has to defend the United⌠https://t.co/fcPA26djrx
â Charlie Kirk (@charliekirk11) https://twitter.com/charliekirk11/status/1897142653684502622?ref_src=twsrc%5Etfw
Rachel Maddow says itâs âdisgustingâ that Trump celebrated a young child who battled cancer
Democrats are evil. https://t.co/FNp2cTnW4N
â Libs of TikTok (@libsoftiktok) https://twitter.com/libsoftiktok/status/1897148754106704060?ref_src=twsrc%5Etfw
The Trump White House slammed Democrats following the speech, saying in a statement "Democrats Showed Whose Side Theyâre On â And itâs Not the American People."
Overall, Trump gave an entertaining yet fairly restrained speech. He stuck mostly to his talking points - and when he did stray, it was to crack a joke that landed well, such as calling Liz Warren 'Pocahontas' because she wants to be in Ukraine for another five years.
*Â *Â *
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Wed, 03/05/2025 - 12:30
German Swap Spreads Crash To Record Lows As Market Panics Over "Whatever It Takes" Fiscal Package
German Swap Spreads Crash To Record Lows As Market Panics Over "Whatever It Takes" Fiscal Package
Update (1145ET): While some have tried to claim today's record surge in German bond yields is due to 'optimism', it is debatable how much of the "defense" spending will trickle down to growth at the Federal level.
one thing is certain: German deficits and debt are about to explode.
Indeed, a closely-watched gauge of the attractiveness of German debt fell to the most negative on record as German policymakers unveiled their unprecedented "whatever it takes" fiscal package meant supposedly to fund "defense" spending, but really just using the recent Ukraine fiasco as a pretext to flood the economy with debt.
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As shown above, the German 10-year bond yield hit a record 12 basis points above comparable swaps, the most in data going back to 2007.
The difference between yields and swap rates, known as the the swap spread, is a key yardstick of future issuance because bonds tend to weaken relative to swaps as the market anticipates more sales.
As Goldman Sachs Alberto Bacis highlights, what is happening today is AUTOMATICALLY LIMITING the leveraging exercise.
They announced 100s of billions in new expenditures yesterday...
...the leverage works when the financing cost works...
...there are levels where cost of funding is just too high and the exercise does not work.
Another day like today and the numbers announced yesterday must be scaled down by 25% just to reflect higher borrowing costs.
*Â *Â *
last night saw Germany announce plans for one of its largest fiscal regime shifts in post-war history.
The leaders of CDU/CSU and SPD this evening https://www.faz.net/aktuell/politik/inland/sondierungen-union-und-spd-wollen-finanzpaket-in-milliardenhoehe-110335851.html
an agreement on an even more significant fiscal expansion than what anyone had expected at the beginning of the week. The plan is to make three material changes to the debt brake in the very near term, convening the outgoing parliament in which the centrist parties still hold a constitutional majority:
A EUR 500bn (11.6% of GDP in 2024) special purpose off-budget vehicle for infrastructure investment, that is planned to be disbursed over the next 10 years, and which amounts to roughly 1% of GDP in annual infrastructure spending (of which EUR 100bn will be allocated to the federal states).
A reform of the debt brake to exempt any defense spending in the main budgetâs "Einzelplan 14", the budget of the Ministry of Defence, over and above 1% of GDP, effectively permitting open-ended borrowing for defense. Currently the Einzelplan 14 amounts to EUR 53.25bn (1.25% of nominal GDP in 2024). The current off-budget fund adds another EUR 25bn of defence funding but this would not be relevant for this part of the proposal. Thus apart from removing any constitutional limit on additional defence spending, 0.25% of GDP (EUR 11bn) of spending in Einzelplan 14 that surpasses the 1% threshold is freed up to fund other measures, for example tax reductions.
An increase in the structural deficit allowed for the states (Länder) from the current level of 0.0% of GDP to 0.35%, the same proportion as the federal level. Furthermore the proposal includes the formation of an expert commission tasked with creating a long-term reform proposal to structurally reform the debt brake by the end of 2025. This would have to be passed by the newly elected 21st Bundestag. It remains unclear if this reform proposal would supersede the announced measures to be passed in the 20th Bundestag or would add to them.
All elements require a two-thirds constitutional supermajority. The parties want to pass the agreed measures with the old 20th Bundestag parliament, before the newly elected 21st Bundestag (where the AfD has a potential blocking minority) is convened on March 25.
In keeping with recycled European aphorisms, party leaders, especially the Conservatives, explicitly referred to this decision as a "whatever it takes" moment and a determination to "rearm completely". According to DB's reading, tonight's robust rhetoric implies that the open-ended borrowing room for defense will be used at a pace that could bring German defence spending to at least 3% perhaps as early as next year (although the exact target may only be defined after the NATO summit in June).
Assuming it goes through, Deutsche Bank's Jim Reid warns that everything you thought you knew about Germany's economic prospects 3 months ago, or even 3 weeks ago, should be ripped up and you should start your analysis from fresh.
Todayâs CoTD simply looks at Germanyâs fiscal deficit through time and assumes an extra 3% deficit phased in over the next decade from current levels.
This is incredibly back of the envelope, but puts the planned move in some historical perspective.
Of course, if growth rebounds then this may reduce the deficit so there are a lot of moving parts. However, this could easily be a sustained fiscal stimulus unparalleled in Germanyâs history. Germany will still likely have the lowest debt/GDP in the G7 as far as the eye can see.
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We estimated that Germany could spend around $1.6tn before its debt/GDP equalled the second lowest (the US) in the G7.
This package has the potential to be in the magnitude of around $1tn over time and the US wonât stand still in terms of its debt over this period.
If you want a bit of fun, Germany could spend $8.5tn before its debt/GDP equalled Japanâs!
So donât underestimate how important this news is. Your portfolio over time will thank you for it.
Indeed it will, if you were long bunds as zee bond vigilantes just sent Bund yields higher by over 24bps...
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...the biggest yield jump in history for the German bond market...
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that investors said the bond sell-off did not reflect concerns about the sustainability of Berlinâs debt, which at around 63 per cent of GDP is far lower than the level in other big western economies such as France, the UK and the US.
In contrast with recent rises in borrowing costs in countries such as the UK, which have threatened their fiscal plans, markets were pricing in a better growth trajectory that was boosting risky assets such as stocks at the expense of ultra-safe government debt.
âYields are rising because of the perception that Germany is turning on the growth tap. It is very risk-positive,â said Karen Ward, a strategist at JPMorgan Asset Management.
We are not sure we're buying what these analysts are selling on this one - especially as we noted overnight that https://cms.zerohedge.com/markets/germany-unveils-historic-whatever-it-takes-fiscal-package-sending-swap-spreads-crashing
And remember, Europe is well-known for suffering sovereign debt crises at the worst possible time, and should inflation remain stubbornly sticky, the yield on new German debt may soon become unmanageable... which means the ECB will have to step in and monetize German deficit spending, as it did for much of the past decade. The only problem: it will first need a market and/or deflationary shock to greenlight such an intervention. Although in light of events in the past 5 years, we doubt very much that the Frankfurt-based central bank will have any problems coming up with yet another fake crisis to capitalize on.
This sudden (and urgent) surge in borrowing comes after Zelensky publicly snubbed Trump's deal in The Oval Office - prompting VP Vance to explain that this was a done deal... "someone got to him... likely it was our European allies"...
Yes! Lost in the temper tantrum thrown by pissy pants Zelensky is that this was a DONE DEAL. The signing was pro forma. Someone got to him. Likely it was our âEuropean allies.âhttps://t.co/FwJujQHchA
â Cernovich (@Cernovich) https://twitter.com/Cernovich/status/1896751830379733394?ref_src=twsrc%5Etfw
Are we giving zee Germans too much credit for a 4D-Chess move? Did our "allies" force Zelensky to tank the deal with Trump at the last minute, to prompt a new 'crisis' (it worked with COVID, remember), enabling them to bypass the debt brake in the name of security, freedom, and whatever patriotic, democracy-saving narrative they choose next? Perhaps, but if the shoe fits (mixing analogies unapologetically) as the deadline for government change in Germany (March 24th) looms and the AfD's ability block this massive debt plan looms even larger indeed.
And finally, who could have seen this coming?
More (defense) spending coming -> more debt issuance -> higher yields -> more QE.
Rinse repeat https://t.co/wWQofr1Ogb
â zerohedge (@zerohedge) https://twitter.com/zerohedge/status/1893716791295193596?ref_src=twsrc%5Etfw
We are at the "higher yields" step. https://t.co/d1CoEXDI4K
â zerohedge (@zerohedge) https://twitter.com/zerohedge/status/1897292101173567688?ref_src=twsrc%5Etfw
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 11:45
Democrats Refuse To Applaud Black Cancer Kid, Rep. Al Green Booted For Temper Tantrum During Trump Speech
Democrats Refuse To Applaud Black Cancer Kid, Rep. Al Green Booted For Temper Tantrum During Trump Speech
Last night, Democrats completely lost the plot during Trump's address to Congress.
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For starters, Rep. Al Green (D-TX) was https://pjmedia.com/matt-margolis/2025/03/05/al-green-explains-his-childish-outburst-during-trumps-speech-n4937586
for an 'old man shakes cane' stunt shortly after Trump began.
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An old man waving a cane and booing is a good rebranding for the Dems.
â Mary Katharine Ham (@mkhammer) https://twitter.com/mkhammer/status/1897110691758383331?ref_src=twsrc%5Etfw
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Meanwhile, Democrats were wearing pink shirts for feminism or some such malarkey - the day after they voted to https://www.cbsnews.com/news/senate-democrats-block-bill-ban-transgender-students-girls-sports/
that prevents transgender dudes from smoking actual females in sports (concussions, new records, dreams broken, etc).
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They were of course fuming when President Trump said that schools that allow a "man" to join the "girls' team, the school will lose all federal funding - simple!"
17/ TRUMP: BANNING TRANSGENDER ATHLETES FROM WOMENâS SPORTS
"If a man joins the girlsâ team, the school will lose all federal fundingâsimple!" https://t.co/fKvBkTBGc8
â Mario Nawfal (@MarioNawfal) https://twitter.com/MarioNawfal/status/1897187662450319432?ref_src=twsrc%5Etfw
They also held up stupid signs reading 'Elon Steals.'
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But the most egregious part of Democrats' Tuesday night tantrum was their refusal to stand, or clap, for a 13-year-old kid who survived brain cancer, and became an honorary Secret Service agent.
Watch this clip of President Trump honoring DJ and naming him as a secret service agent, and try not to tear up when this kid realizes what just happened. https://t.co/m6ww7AVnpv
â Jason Rantz on KTTH Radio (@jasonrantz) https://twitter.com/jasonrantz/status/1897128270422008141?ref_src=twsrc%5Etfw
They even refused to clap for this brave young man with brain cancer. I was taken aback by their ghastly behavior. https://t.co/o9s82p07IE
â Swig đşđ¸ (@OldRowSwig) https://twitter.com/OldRowSwig/status/1897131155029418383?ref_src=twsrc%5Etfw
"If you canât stand up and cheer for a kid with brain cancer being made an honorary member of the Secret Service, then you might be a deeply disturbed and fucked up person!!!" posted Donald Trump Jr. on X.
If you can't stand up and cheer for a kid with brain cancer being made an honorary member of the Secret Service, then you might be a deeply disturbed and fucked up person!!!
â Donald Trump Jr. (@DonaldJTrumpJr) https://twitter.com/DonaldJTrumpJr/status/1897128747691860346?ref_src=twsrc%5Etfw
"They could not even clap for a child battling cancer, or mothers who lost their children," said White House Press Secretary Karoline Leavitt on X, adding "Tonight, President Trump absolutely owned the moment. He showed the world why the American people overwhelmingly re-elected him to serve in the highest office in the land⌠President Trump is restoring common sense. The renewal of the American Dream is well underway, and we are just getting started!"
13-year-old DJ Daniel: âI had 13 brain surgeries and that's how many times my personality has changed.â
âThat's something that you don't hear from a terminally ill child.â
âI'm gonna keep on going into my gas tank runs out. And that's when God calls you home. You never know⌠https://t.co/aAipcIrxaq
â Collin Rugg (@CollinRugg) https://twitter.com/CollinRugg/status/1897290236658598356?ref_src=twsrc%5Etfw
The Trump White House slammed Democrats following the speech, saying in a statement "Democrats Showed Whose Side Theyâre On â And itâs Not the American People."
Overall, Trump gave an entertaining yet fairly restrained speech. He stuck mostly to his talking points - and when he did stray, it was to crack a joke that landed well, such as calling Liz Warren 'Pocahontas' because she wants to be in Ukraine for another five years.
asdf
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 11:20
Some Room Left?
Some Room Left?
By Benjamin Picton of Rabobank
Some Room Left?
President Trumpâs tariffs on Canada and Mexico, and an additional 10% tariff on imports from China took effect yesterday. Trump had said on Monday that there was âno room leftâ for those countries to negotiate on trade, but Commerce Secretary Howard Lutnick walked back the hawkishness late on Tuesday by suggesting that some wiggle room may exist to reduce duties on goods covered by the USMCA trade agreement. Earlier in the week Mexico floated a proposition to apply 25% tariffs to imports from China as a quid-pro-quo for continued US market access. Could we see a united trade front against China on the table as the Trump Administrationâs price for watering down duties on Canada and Mexico?
Lutnick said that Trump is considering lowering the 25% tariff rate if USMCA rules are followed, but threw a jab at the USAâs northern neighbours by saying that Canadians âlike to cheatâ. Similar accusations of foul play have previously been levelled by trade advisor Peter Navarro against Australia, specifically in relation to aluminium exports that were granted exemptions to trade restrictions during the first Trump term through a handshake agreement that Australian exports of aluminium to the USA would be informally restricted.
Canada and China have been swift to retaliate to the new tariff measures, in defiance of the orthodox economic prescription that tariffs are entirely self-defeating. Canadian Prime Minister Trudeau addressed Trump directly, saying that âeven though youâre a very smart guy, this is a very dumb thing to doâ, a comment that perhaps holds some irony given that Trudeau was in the process of confirming tariff measures of his own when he made it. Trudeau went even further to suggest that President Trump is attempting to crash the Canadian economy as a precursor to annexation(!).
China announced tariffs of 15% on US exports of chicken, wheat, corn and cotton, and 10% tariffs on soybeans, sorghum, beef, fish, fruit, vegetables and dairy. Chinaâs Ministry of Commerce also said that it had added an additional 15 US companies to an export control list, and that additional US firms had been added to the âunreliable entityâ list that effectively serves as a sanctions registry for entities perceived to pose a threat to Chinaâs national security.
Early this morning China announced that it is setting its economic growth target for 2025 at 5%, and its CPI inflation target at 2%. The fiscal deficit will widen to around 4% of GDP, which is the largest in over 30 years. The increased fiscal stimulus goes hand-in-hand with a loosening in the monetary policy stance from âprudentâ to âmoderately looseâ â the first time that China had adopted such accommodative policy in 14 years -that was announced in December. By contrast, Donald Trump used his address to Congress yesterday to say that his Administration will aim to balance the Federal budget without giving firm details on how that would be achieved.
The Treasury curve bear-steepened on Tuesday with the 10-year yield rising 8.9bps to 4.25% and the 2-year up 4.1bps to 3.99%. The Canadian sovereign curve shifted even further upwards, while European yields fell at the short end and posted mixed-results further out the term structure.
Of course, despite the hints at dĂŠtente from Lutnick, further salvos in the developing trade war are likely imminent. Trump used his address to Congress to indicate that reciprocal tariffs and tariffs on agricultural imports will apply from April 2nd:
"whatever they tariff us, we tariff them. Whatever they tax us, we tax them. If they do non-monetary tariffs to keep us out of their market, then we do non-monetary barriers to keep them out of our market. We will take in trillions of dollars and create jobs like we have never seen before."
Some countries may stand to benefit in the short run from a reshuffling of the global trade deck, but all of this is likely to be bad news for growth in its totality. Speaking in Sydney, RBA Deputy Governor Andrew Hauser (formerly of the Bank of England) noted that there is now a chance that first quarter GDP growth in the USA prints negative. This lines up with the signal from the Atlanta Fedâs GDP nowcast model, which is signalling a contraction of 2.8% in the first quarter, versus a previous forecast of 2.3% expansion as recently as February 26th.
Hauser said:
âif companies and households come to conclude that trade policy uncertainty isnât âclassical uncertaintyâ (i.e. âcarry on until the fog lifts) - but genuine ambiguity- i.e. âanything could happenâ â then they may choose to just batten down the hatches, postponing planned spending, particularly on long-term investment, until things become clearer. This sort of watchful waiting is pretty sensible, individually, but for an economy it can be bad news. As The Economist put it recently âtariff uncertainty can be as ruinous as tariffs themselvesâ.â
This echoes recent comments made by one of our favourite bears, Jeremy Grantham, on Bloombergâs âMerryn Talks Moneyâ podcast. Grantham paraphrased John Maynard Keynes to point out that animal spirits are incredibly important to economic performance:
âYou could line up all your economic stimuli, everything a wonderful plan, but if for whatever reason people become pessimistic, they sat on their money and they did not spend, youâre toast...â
Now that major US stock indices are all in the red year-to-date, the likelihood of creeping pessimism would appear to be growing.
On that theme, the âtake Trump seriously, but not literallyâ meme that had been compressing equity risk premia and sending US stocks into the stratosphere late last year seems to be rolling over in Europe. Growing realisation that Trump means what he says and says what he means on trade sent European stocks sharply lower yesterday, while news that the USA would be halting arms supplies to Ukraine helped to continue the outperformance of European defence names.
European Commission President Ursula von der Leyen announced a new lending instrument to provide EUR 150bn of loans to member states for defense investment. The new facility is expected to improve coordination and quality of expenditure on pan-European priorities (artillery, drones etc). The facility is also expected to help improve inter-operability, create economies of scale for new defence procurement and support a significant step-up in support for Ukraine.
Von der Leyen also announced the activation of an escape clause within the Stability and Growth Pact that will allow for defense spending to increase by 1.5% of GDP without triggering excessive deficit procedures. This relaxation of fiscal rules could be worth up to EUR 650bn over four years. In a similar vein, Germany is set to create a new EUR 500bn fund for defense and infrastructure spending, and to exempt defense spending of more than 1% of GDP from debt-brake rules.
Fresh from being feted by international leaders after his confrontation with Trump and Vance last week, Ukrainian President Zelenskyy struck a conciliatory tone with the Administration yesterday by saying that he was ready to work under Trumpâs âstrong leadershipâ and that it was âtime to make things right.â âWe are ready to work fast to end the war...and to work with the US to agree a strong final deal.â
President Zelenskyy appears to recognise that European pledges of support are nice, but it is real production and real firepower that really matters. On that score, the USA is still the only game in town.
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 11:00
WTI Extends Losses To 6-Month Lows After Surprise Crude Build
WTI Extends Losses To 6-Month Lows After Surprise Crude Build
Oil prices extended their losses overnight to the lowest in almost six months as traders wrestle with conflicting signals on the longevity and effects of US tariffs on the countryâs two largest external crude suppliers.
A mixed bag from API last night did not help but all eyes on the official data this morning for any signs of life.
API
Crude -1.5mm
Cushing +1.6mm
Gasoline -1.2mm
Distillates +1.1mm
DOE
Crude +3.614mm
Cushing +1.124mm
Gasoline -1.433mm
Distillates -1.318mm
US crude inventories rose for the 5th week in the last 6, with stocks at the crucial Cushing Hub rising for the 4th straight week. On the product side, both gasoline and distillates saw drawdowns...
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Source: Bloomberg
For the third week in a row, the Trump administration did not add to the SPR...
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Source: Bloomberg
US crude production remained near record higher as Trump's 'drill baby drill' plan prompted a jump in the rig count...
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Source: Bloomberg
WTI traded back near 6-month lows on the surprise crude build...
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Crude has trended lower since mid-January as Trumpâs policies raise fears of multiple trade wars potentially hitting energy demand.
âTrump acknowledges that there will be an adjustment period for the tariffs,â said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management.
âThis points to continued volatility and uncertainty in the economy and in financial markets over the coming months.â
Oil options traders are the most bearish in five months amid concerns about the fallout from tariffs and OPEC+âs plans to revive halted production, while volumes of bearish put contracts surged Tuesday.
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 10:41
https://www.zerohedge.com/energy/wti-extends-losses-6-month-lows-after-surprise-crude-build
US Services Sector Surveys Beat Expectations In February As Jobs & New Orders Jump
US Services Sector Surveys Beat Expectations In February As Jobs & New Orders Jump
With 'hard' data in decline, and US https://www.zerohedge.com/economics/us-manufacturing-survey-signals-continued-expansion-inflation-fears-soar
, the US Services sector data this morning is sure to provide just as little clarity.
S&P Global's US Services PMI fell from 52.9 (January) to 51.0 (final February) - better than the expected 49.7 and still in expansion (just) but the weakest since April 2024. Of note this is a big bump higher from the 49.7 flash print (contraction) for February.
ISM Services also beat expectations, rising from 52.8 to 53.5, against expectations of a small decline to 52.5
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Source: Bloomberg
So just as mixed as the Manufacturing data, but opposite (PMI down, ISM up).
Under the hood, Orders, Employment, and Prices Paid rose on the month with employment at it highest since Dec 2021!!
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February was the third month in a row with all four subindexes that directly factor into the Services PMI - Business Activity, New Orders, Employment and Supplier Deliveries - in expansion territory, the first time this has happened since May 2022.
"Slightly slower growth in the Business Activity Index was more than offset by growth in the other three subindexes.
Anxiety continues; however, over the potential impact of tariffs.
Some respondents indicated that federal spending cuts are having negative impacts on their business forecasts.â
The S&P Global US Composite PMI Output Index fell to 51.6 in February, down from 52.7 in January. It was the second successive month in which the PMI has fallen, and the latest reading was the lowest since last April.
Divergent trends were, however, seen at the broad sector level. Manufacturing output rose markedly, but service sector growth softened to a 15-month low.
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Chris Williamson, https://www.pmi.spglobal.com/Public/Home/PressRelease/a72e85e7707f495f914475e2b63bb2ef
"The final PMI is an improvement on the earlier flash reading but still paints a worryingly weak picture of service sector business conditions compared to the buoyancy recorded late last year.
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"Current output growth has downshifted markedly so far this year from a booming rate of expansion in December to a disappointingly sluggish pace in February.
S&P Global was careful to decouple Biden (current conditions) from Trump (future terrible, horrible world):
"Expectations for output growth have also been revised sharply lower as service providers have become increasingly worried over signs of slower demand growth and uncertainty over the impact of new government policies, ranging from tariffs and trade policy to federal budget cutting.
"The strong private sector hiring seen late last year has consequently gone into reverse, with a steep fall in backlogs of work hinting at further job losses to come.
And soaring prices are all Trump's fault... even though the tariffs literally just went into place:
"Adding to the gloomier picture in February was a sharp rise in costs, which companies were often unable to pass on to customers due to weak demand. While this reduced pricing power is good news for inflation, itâs potentially bad news for profitability."
So to sum up:
Services - both expanding (PMI down, ISM up)
Manufacturing - both expanding (PMI up, ISM down)
Baffle 'em with bullshit continues
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 10:09
Bond Vigilantes Blow Up German Bond Market After "Whatever It Takes" Fiscal Package
Bond Vigilantes Blow Up German Bond Market After "Whatever It Takes" Fiscal Package
last night saw Germany announce plans for one of its largest fiscal regime shifts in post-war history.
The leaders of CDU/CSU and SPD this evening https://www.faz.net/aktuell/politik/inland/sondierungen-union-und-spd-wollen-finanzpaket-in-milliardenhoehe-110335851.html
an agreement on an even more significant fiscal expansion than what anyone had expected at the beginning of the week. The plan is to make three material changes to the debt brake in the very near term, convening the outgoing parliament in which the centrist parties still hold a constitutional majority:
A EUR 500bn (11.6% of GDP in 2024) special purpose off-budget vehicle for infrastructure investment, that is planned to be disbursed over the next 10 years, and which amounts to roughly 1% of GDP in annual infrastructure spending (of which EUR 100bn will be allocated to the federal states).
A reform of the debt brake to exempt any defense spending in the main budgetâs "Einzelplan 14", the budget of the Ministry of Defence, over and above 1% of GDP, effectively permitting open-ended borrowing for defense. Currently the Einzelplan 14 amounts to EUR 53.25bn (1.25% of nominal GDP in 2024). The current off-budget fund adds another EUR 25bn of defence funding but this would not be relevant for this part of the proposal. Thus apart from removing any constitutional limit on additional defence spending, 0.25% of GDP (EUR 11bn) of spending in Einzelplan 14 that surpasses the 1% threshold is freed up to fund other measures, for example tax reductions.
An increase in the structural deficit allowed for the states (Länder) from the current level of 0.0% of GDP to 0.35%, the same proportion as the federal level. Furthermore the proposal includes the formation of an expert commission tasked with creating a long-term reform proposal to structurally reform the debt brake by the end of 2025. This would have to be passed by the newly elected 21st Bundestag. It remains unclear if this reform proposal would supersede the announced measures to be passed in the 20th Bundestag or would add to them.
All elements require a two-thirds constitutional supermajority. The parties want to pass the agreed measures with the old 20th Bundestag parliament, before the newly elected 21st Bundestag (where the AfD has a potential blocking minority) is convened on March 25.
In keeping with recycled European aphorisms, party leaders, especially the Conservatives, explicitly referred to this decision as a "whatever it takes" moment and a determination to "rearm completely". According to DB's reading, tonight's robust rhetoric implies that the open-ended borrowing room for defense will be used at a pace that could bring German defence spending to at least 3% perhaps as early as next year (although the exact target may only be defined after the NATO summit in June).
Assuming it goes through, Deutsche Bank's Jim Reid warns that everything you thought you knew about Germany's economic prospects 3 months ago, or even 3 weeks ago, should be ripped up and you should start your analysis from fresh.
Todayâs CoTD simply looks at Germanyâs fiscal deficit through time and assumes an extra 3% deficit phased in over the next decade from current levels.
This is incredibly back of the envelope, but puts the planned move in some historical perspective.
Of course, if growth rebounds then this may reduce the deficit so there are a lot of moving parts. However, this could easily be a sustained fiscal stimulus unparalleled in Germanyâs history. Germany will still likely have the lowest debt/GDP in the G7 as far as the eye can see.
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We estimated that Germany could spend around $1.6tn before its debt/GDP equalled the second lowest (the US) in the G7.
This package has the potential to be in the magnitude of around $1tn over time and the US wonât stand still in terms of its debt over this period.
If you want a bit of fun, Germany could spend $8.5tn before its debt/GDP equalled Japanâs!
So donât underestimate how important this news is. Your portfolio over time will thank you for it.
Indeed it will, if you were long bunds as zee bond vigilantes just sent Bund yields higher by over 24bps...
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...the biggest yield jump in history for the German bond market...
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that investors said the bond sell-off did not reflect concerns about the sustainability of Berlinâs debt, which at around 63 per cent of GDP is far lower than the level in other big western economies such as France, the UK and the US.
In contrast with recent rises in borrowing costs in countries such as the UK, which have threatened their fiscal plans, markets were pricing in a better growth trajectory that was boosting risky assets such as stocks at the expense of ultra-safe government debt.
âYields are rising because of the perception that Germany is turning on the growth tap. It is very risk-positive,â said Karen Ward, a strategist at JPMorgan Asset Management.
We are not sure we're buying what these analysts are selling on this one - especially as we noted overnight that https://cms.zerohedge.com/markets/germany-unveils-historic-whatever-it-takes-fiscal-package-sending-swap-spreads-crashing
And remember, Europe is well-known for suffering sovereign debt crises at the worst possible time, and should inflation remain stubbornly sticky, the yield on new German debt may soon become unmanageable... which means the ECB will have to step in and monetize German deficit spending, as it did for much of the past decade. The only problem: it will first need a market and/or deflationary shock to greenlight such an intervention. Although in light of events in the past 5 years, we doubt very much that the Frankfurt-based central bank will have any problems coming up with yet another fake crisis to capitalize on.
This sudden (and urgent) surge in borrowing comes after Zelensky publicly snubbed Trump's deal in The Oval Office - prompting VP Vance to explain that this was a done deal... "someone got to him... likely it was our European allies"...
Yes! Lost in the temper tantrum thrown by pissy pants Zelensky is that this was a DONE DEAL. The signing was pro forma. Someone got to him. Likely it was our âEuropean allies.âhttps://t.co/FwJujQHchA
â Cernovich (@Cernovich) https://twitter.com/Cernovich/status/1896751830379733394?ref_src=twsrc%5Etfw
Are we giving zee Germans too much credit for a 4D-Chess move? Did our "allies" force Zelensky to tank the deal with Trump at the last minute, to prompt a new 'crisis' (it worked with COVID, remember), enabling them to bypass the debt brake in the name of security, freedom, and whatever patriotic, democracy-saving narrative they choose next? Perhaps, but if the shoe fits (mixing analogies unapologetically) as the deadline for government change in Germany (March 24th) looms and the AfD's ability block this massive debt plan looms even larger indeed.
And finally, who could have seen this coming?
More (defense) spending coming -> more debt issuance -> higher yields -> more QE.
Rinse repeat https://t.co/wWQofr1Ogb
â zerohedge (@zerohedge) https://twitter.com/zerohedge/status/1893716791295193596?ref_src=twsrc%5Etfw
We are at the "higher yields" step. https://t.co/d1CoEXDI4K
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 09:25
Supreme Court Blocks Trump's USAID Foreign-Aid Freeze
Supreme Court Blocks Trump's USAID Foreign-Aid Freeze
Well maybe this explains why Justice Gorsuch was such a bitch last night when Trump tried to shake his hand (and why Justices Jackson and Sotomayor never turned up for the president's speech:
*SUPREME COURT REJECTS TRUMP ON USAID FOREIGN-AID FREEZE
*SUPREME COURT REINSTATES ORDER REQUIRING FOREIGN-AID PAYMENTS
We cannot wait to see how Musk and Trump respond to this fucking farcical outcome...
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Developing...
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 09:08
https://www.zerohedge.com/political/supreme-court-blocks-trumps-usaid-foreign-aid-freeze
Far-Left DC Mayor Bends Knee, Plans To Rename Black Lives Matter Plaza After GOP Bill
Far-Left DC Mayor Bends Knee, Plans To Rename Black Lives Matter Plaza After GOP Bill
A spokesperson for far-left DC Mayor Muriel Bowser confirmed to the local media outlet https://www.nbcwashington.com/news/local/black-lives-matter-plaza-being-renamed-after-gop-rep-introduced-bill/3858417/
that the "BLACK LIVES MATTER" muralâpainted across two blocks of 16th Street near the White House during the 2020 color revolution riotsâwill be replaced with a new mural designed by area schoolchildren.
On Monday, Republican Rep. Andrew Clyde of Georgia introduced legislation that, if passed, would force Mayor Bowser to rename the BLM Plaza, which cost taxpayers around $5 million to paint several years ago.
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would withhold "certain apportionment funds" if the BLM mural down 16th Street is not renamed to Liberty Plaza, as well as removing all propaganda of BLM on the street.
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The area was designated as BLM Plaza after the questionable death of George Floyd in Minneapolis in 2020, which ignited nationwide BLM riots...
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BLM is not 'America First' - in fact, this far-left group wants to destroy the country.
DC Mayor Muriel Bowser visits Black Lives Matter mural in Washington, D.C. https://t.co/pa8zBAGg6Y
â The Hill (@thehill) https://twitter.com/thehill/status/1268955368614494208?ref_src=twsrc%5Etfw
Black Lives Matter Global Network Foundation once trumpeted its Marxist desire to dismantle America and war on the nuclear family by saying on its website: "We disrupt the Western-prescribed nuclear family structure requirement by supporting each other as extended families and 'villages' that collectively care for one another."
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Bowser released a statement on X:
Mayor Bowser released the following statement on the evolution of Black Lives Matter Plaza: https://t.co/6dk8Jbc5ir
â Mayor Muriel Bowser (@MayorBowser) https://twitter.com/MayorBowser/status/1897039109434364388?ref_src=twsrc%5Etfw
President Trump has made it very clear that he will continue eliminating woke ideology from the federal government, military, and corporate America. He reiterated this at https://www.zerohedge.com/political/america-back-12-takeaways-trump-47s-first-major-policy-speech-congress
.
President Trump: "Our country will be woke no longer!" https://t.co/vJiVr8wwWc
â Fox News (@FoxNews) https://twitter.com/FoxNews/status/1897114373916910000?ref_src=twsrc%5Etfw
It's clear that Mayor Bowser prioritized virtue signaling and wasting taxpayer funds on painting BLM on the street instead of focusing on common-sense law and order, even as the nation's capital descended into crisis with record spikes in homicides, carjackings, and other violent crimes
https://cms.zerohedge.com/users/tyler-durden
Wed, 03/05/2025 - 08:35