Futures Slide For Fifth Day As Jackson Hole Jitters Rise

US equity futures dropped, extending the recent selloff into its fifth day, as traders stayed guarded ahead of the Federal Reserve’s gathering at Jackson Hole. As of 8:00am, S&P 500 futures fell 0.2%, while Nasdaq 100 futures were flat after a two-day selloff that erased 2% off the index. In premarket trading, Nvidia rose 0.8% while most Magnificent Seven peers posted losses. Retail giant Walmart brought Q2 earnings season to an unofficial close after reporting an EPS miss (68c vs exp. 74c) and even though it lifted guidance (now expects net sales to rise 3.75% to 4.75% this year, versus previous forecast of a 3% to 4%) that wasn't enough for the market, however, and the stock dropped in premarket trading. European stocks dropped 0.3%, erasing an earlier gain, and snapping a three-day winning streak. US treasuries fell, pushing the yield on the 10-year higher to 4.31%. The dollar strengthened and reversed all of yesterday's losses while Brent crude rose to the highest in two weeks even as the rest of the commodity complex was mixed. It's a busy economic calendar: we get weekly jobless claims and August Philadelphia Fed business outlook (8:30am), S&P Global US PMIs (9:45am) and July leading index and existing home sales (10am). The Fed speaker slate includes Atlanta Fed President Bostic at 7:30am, the last central bank official slated to speak before Chair Powell’s discourse at Jackson Hole Friday

In premarket trading, Mag 7 stocks are mostly lower (Nvidia +0.8%, Tesla unchanged, Microsoft -0.1%, Alphabet -0.2%, Amazon -0.3%, Meta -0.3%, Apple -0.5%). Here are some other notable premarket movers: 

• Aegon ADRs (AEG) are up 5% after the Dutch insurance company posted better-than-expected results and said it planned to increase its share buyback. Management said the company may redomicile to the US, a move that Morgan Stanley said would “make sense.”
• Boeing Co. (BA) gains 1.5% as the company is heading closer toward finalizing a deal with China to sell as many as 500 aircraft, according to people familiar with the matter.
• Canadian Solar (CSIQ) falls 11% after forecasting third-quarter revenue below analyst expectations.
• Coty (COTY) falls 20% after the personal care products company forecast steep sales declines and reported a wider-than-expected loss for the fourth quarter.
• Dayforce (DAY) rises 1.4% after entering into a definitive agreement with Thoma Bravo to become a privately held company in an all-cash transaction with an enterprise value of $12.3 billion.
• Hewlett Packard Enterprise (HPE) gains 3.1% after being raised to overweight from equal-weight at Morgan Stanley as analysts note that recently-closed Juniper deal will be an earnings upside.
• SharkNinja (SN) trades lower by 2% as holders affiliated with Chairperson CJ Xuning Wang offer 5 million shares in the household-appliance maker via JPMorgan, BofA Securities.
• Two Harbors Investment (TWO) falls 3% after the mortgage REIT resolved litigation with Pine River via a one-time $375m cash settlement and cut its quarterly dividend to 34c a share.
• Walmart (WMT) slips 2.4% after the world’s largest retailer posted second quarter profit that disappointed.

In corporate news, FanDuel, the online gambling division of Flutter Entertainment, is teaming up with CME Group, the largest US derivatives exchange, to offer bets on stocks, commodity prices and even inflation. Google introduced a new slate of consumer gadgets, including several smartphones, a watch and new wireless earbuds, all meant to show off the company’s latest advances in artificial intelligence. Musk‘s Starlink service is said to be in conversation with Emirates and other Middle Eastern airlines, with winning business in the region potentially marking a watershed moment in Starlink’s global competition. 

This week has seen pressure on momentum names (read tech stocks) particularly the largest names, amid worries that their sharp rally since April has moved too far, too fast. Traders are also cautious as the Jackson Hole symposium kicks off later today, with investors awaiting Fed Chair Jerome Powell’s speech at 10am ET Friday for guidance on the path for interest rates. Despite the pullback in stocks this week, the VIX hasn’t really budged, and Goldman said it’s time to buy the dip in momentum stocks (and the overall market according to JPMorgan).

The market’s direction today will also be shaped by PMIs, home sales data and Walmart earnings (which missed but boosted its revenue forecast). For the euro area, the Composite Purchasing Managers’ Index compiled by S&P Global grew at the quickest pace in 15 months as manufacturing exited a three-year downturn.

“What we are currently seeing is profit-taking and a natural flight to quality ahead of Jerome Powell’s speech in Jackson Hole,” said John Plassard, head of investment strategy at Cité Gestion. But “let’s not beat around the bush: this is not the end of tech, and even less so for stocks linked to artificial intelligence.”

Swaps are currently pricing in 80% chance of a Fed quarter-point cut in September, and at least three more over the next year, some strategists warned that the market may be too optimistic about the pace and depth of easing.

“All it’s going to take is a bit of stickiness in inflation and actually a labor market print which shows it’s not falling off a cliff for the market to say, ‘hang on,’” Karen Ward, chief market strategist for EMEA at JPMorgan Asset Management, told Bloomberg TV.

In his latest effort to stack the Fed board, Trump and his allies are demanding Fed Governor Lisa Cook resign over alleged owner-occupancy fraud. For her part, Cook signaled her intention to remain at the central bank.

Yesterday, the latest FOMC Minutes for the July 29-30 meeting showed most officials viewed inflation risks as outweighing labor-market concerns, with tariffs fueling a growing divide within the rate-setting committee, though the discussions came before subsequent dramatic dire revisions to jobs data.

On the geopolitical front, US Vice President JD Vance said negotiations over ending Russia’s war in Ukraine are focused on security guarantees for Ukraine and territory Russia wants to control — including Ukrainian territory that Russia isn’t occupying — as the US tries to broker a peace deal between the two nations. Brent crude rose 0.8%.

The Stoxx 600 falls 0.2% with media, consumer product and chemical shares leading declines. Nordics represented several of the region’s biggest movers, with hearing-aid maker GN Store Nord surging 19% after reporting earnings, while Norwegian oil firm Aker BP jumped after a large oil find in the North Sea. UK retailer WH Smith plunged after signaling North American profit will be much weaker than previously hoped. Here are the biggest movers Thursday:

• Aegon shares jump as much as 7.4%, reaching a 10-year high, after the Dutch insurance company posted better-than-expected results and said it planned to increase its share buyback
• GN Store Nord gains as much as 19% after the Danish hearing aid and audio equipment firm’s 2Q earnings beat estimates across the board. Analysts see a strong showing following weaker reports from European peers
• Aker BP shares rise as much as 4.6% after the Norwegian industrial investment company announced a “significant oil discovery” as it completed the Omega Alfa exploration campaign in the Norwegian North Sea
• ALK-Abello gains as much as 5.9%, the most since May, after the Danish allergy drugmaker reported 2Q earnings. Analysts say that while the report holds few surprises after the company pre-released figures, they reassured
• Salmar gains as much as 6.1%, the most since April, after the Norwegian salmon firm reported its latest earnings, which DNB Carnegie described as in line, with “positive” cost and volume guidance for the rest of the year
• DNO gains as much as 11%, the most since 2023, after the Norwegian oil company reported its latest earnings and hiked its dividend per share by around 20%. DNB Carnegie expects the raised payouts to support the shares
• Renishaw shares rise as much as 8.9% to the highest since February after the precision measuring equipment maker indicated its adjusted pretax profit for the full year will be at the high end of the guidance range
• WH Smith shares plummet as much as 38%, the biggest drop on record, after the retailer warned headline trading profit from North America will be significantly lower than previously hoped
• CTS Eventim shares slide as much as 20%, the most since 2007, after the events firm reported 2Q Ebitda well below estimates. The firm cited “intense and persistent cost pressures” for live events and headwinds in other divisions
• Novonesis falls as much as 7.8% after the Danish biotechnology group reported earnings. Analysts say a profitability miss and merely reiterated margin guidance disappointed, and will lead to slight consensus cuts
• European stocks in the beauty and personal care sector fell after US company Coty reported a wider adjusted loss per share in 4Q than analysts expected, while forecasting steep sales declines will continue
• Sensirion falls as much as 8.2% after both Berenberg and Research Partners downgraded the semiconductor device manufacturer to hold from buy following its first-half earnings
• UK housebuilders are under pressure on Thursday as London builders are taking longer to start home constructions after receiving permits, with a slump in demand threatening to derail the government’s plan to build 1.5m homes
• Kojamo declines as much as 5.9% following its second-quarter results, with JPMorgan retaining its underweight rating and a cautious stance on the real estate company

Earlier in the session, Asian stocks traded in a tight range, as a rebound in some tech stocks was offset by declines in Japan. The MSCI Asia Pacific Index fell 0.2%, with Japan’s Daiichi Sankyo among the top drags after a series of block trades at a discount. Hon Hai and TSMC were among the biggest boosts for the gauge. Shares hit a record high in Australia, while those in South Korea and Taiwan also advanced.  Investors are awaiting cues from the Jackson Hole symposium, where Federal Reserve Chair Jerome Powell is expected to speak on Friday. Nvidia’s results next week will be another key test, with expectations for improving global tech earnings having bolstered sentiment. Equities also traded higher in mainland China, Vietnam and New Zealand on Thursday. MSCI equity gauges for every nation in the region are trading above their 200-day moving averages for the first time since 2021, according to Sentimentrader.com.

In FX, the euro and pound both edge higher against the greenback after the better-than-expected PMI data. The Norwegian krone is the best-performing G-10 currency, rising 0.5% after Norway’s GDP grew more than forecast in the second quarter.

In rates, treasuries are under pressure in early US trading amid steeper losses for most European bond markets sparked by stronger-than-anticipated August preliminary PMI gauges. US yields are higher by 1bp-2bp, the 10-year by about 1.8bp at 4.31%, vs increases of 3bp-4bp for UK and most euro-zone counterparts. US session features 30-year TIPS reopening auction at 1pm New York time. Week’s major focal point is Fed Chair Powell’s Jackson Hole speech on Friday. UK gilts are leading declines in European government bonds after the UK private sector expanded at the strongest pace in 12 months. UK 10-year yields rise 3 bps to 4.70%. German 10-year borrowing costs add 2 bps to 2.73% after the euro area’s private sector grew at the quickest pace in 15 months.

Looking at today's calendar, US economic data calendar includes weekly jobless claims and August Philadelphia Fed business outlook (8:30am), August preliminary S&P Global US PMIs (9:45am) and July leading index and existing home sales (10am). Fed speaker slate includes Atlanta Fed President Bostic at 7:30am, the last central bank official slated to speak before Chair Powell’s discourse at Jackson Hole Friday

Market Snapshot

• S&P 500 mini -0.1%
• Nasdaq 100 mini little changed
• Russell 2000 mini -0.3%
• Stoxx Europe 600 -0.2%
• DAX -0.1%
• CAC 40 -0.5%
• 10-year Treasury yield +1 basis point at 4.3%
• VIX +0.2 points at 15.93
• Bloomberg Dollar Index little changed at 1207.17
• euro little changed at $1.1658
• WTI crude +1% at $63.35/barrel

Top Overnight News

• Fed reserve governor Lisa Cook has defied calls from Trump to resign, saying she has “no intention of being bullied to step down” after FHFA Director Bill Pulte posted he was making a criminal referral based on a mortgage application from four years ago: FT
• The Texas House approved a new congressional map that may add up to five GOP seats in the 2026 midterms. In California, the state’s top court declined to halt Governor Gavin Newsom’s own redistricting plan, which he’s pursuing to offset the moves in Texas and elsewhere. BBG
• Meta Platforms has frozen hiring in its artificial-intelligence division after spending months scooping up 50-plus AI researchers and engineers. WSJ
• South Korea will unveil an additional $150 billion in US investment from private firms during Lee Jae Myung’s summit with Trump, local media said. BBG
• The euro area’s private sector expanded at the quickest pace in 15 months, PMI data showed, adding to evidence of the region’s resilience. Manufacturing ended a three-year downturn despite higher US levies. UK composite PMI also rose more than expected. BBG
• China is aggressively trying to persuade domestic tech firms to avoid buying Nvidia chips following “insulting” remarks from Commerce Sec Lutnick. FT
• Japan’s 20-year yields hit their highest since 1999 amid fiscal concerns and fading demand from key investors. Yields on 30-year notes approached a new high. BBG
• India’s flash PMIs for Aug are strong, including manufacturing (59.8, up from 59.1 in Jul) and especially services (65.6, a big jump from 60.5 in Jul). S&P
• Russia warned on Wednesday that it should effectively hold veto power over any action to assist Ukraine after a peace deal is reached, rendering planned Western security guarantees for Kyiv moot and delivering a setback to negotiations championed by President Trump. Russia’s Lavrov also played down likelihood of a summit between Russia/Ukraine leaders happening soon. WSJ

Trade/Tariffs

• China’s Commerce Minister talked with Kazakhstan’s Trade Minister and said China is ready to work with Kazakhstan to promote the upgrading of bilateral trade, while China is ready to strengthen cooperation in emerging fields and accelerate the cultivation of new trade formats.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed, albeit with a mildly positive bias as the region attempted to shrug off the lacklustre lead from Wall St, where sentiment was dampened amid continued tech weakness and hawkish-leaning FOMC Minutes. ASX 200 outperformed amid a slew of earnings releases and breached the 9,000 level for the first time in history. Nikkei 225 was dragged lower by weakness in pharmaceuticals and automakers, with the latter not helped by reports that Japanese automakers are passing some of the expense of US tariffs through to American car buyers, which is a change from their strategy of absorbing the impact. Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark led lower by underperformance in tech stocks including Baidu and Xiaomi, despite both recently reporting a jump in profits, while the mainland remained propped up following the PBoC's liquidity efforts.

Top Asian News

• Asian petrochemicals shares rise as China is set to launch a sweeping overhaul of its petrochemicals and oil refining sector to phase out smaller facilities and target outdated operations for upgrades.
• Chinese biomedical shares rise after Premier Li Qiang toured company sites and emphasized the need to increase scientific and technological backing as well as policy support for the sector.
• Chinese crypto-linked stocks rally after a report that the government is considering a plan for expanded yuan use and stablecoins.
• Sonic Healthcare shares slide as much as 10%, the most since May 2024, after the Australian diagnostics and pathology firm reported net income for the full year that missed the average analyst estimate.
• South Korea’s Financial Services Commission urges financial firms to provide necessary support in the course of the nation’s petrochemical industry restructuring, according to a statement from the financial regulator.

European bourses (STOXX 600 -0.2%) are trading with little in the way of a clear bias. Geopolitical tensions resurfaced early doors after Ukraine's Air Force stated that Russia used 574 drones and 40 missiles in an overnight attack. Focus also on EZ PMIs which saw the saw the composite move further into expansionary territory. European equity sectors show a mostly negative tilt with stock-specific updates relatively light. Energy names sit at the top of the leaderboard amid upside in underlying crude prices. To the downside, Media names lag with Wolters Kluwer (-2.2%) a notable underperformer in the sector following a PT reduction at Morgan Stanley.

Top European News

• The euro area’s private sector expanded at the quickest pace in 15 months, PMI data showed, adding to evidence of the region’s resilience. Manufacturing ended a three-year downturn despite higher US levies. UK composite PMI also rose more than expected. 

FX

• Steady trade for DXY after a session yesterday, which was dominated by newsflow surrounding the Fed. US rates markets endured a steepening of the curve, led by the front-end amid reporting that President Trump could fire Fed Governor Cook amid alleged mortgage fraud. Thereafter, attention pivoted to the account of the July policy announcement, which was viewed with a hawkish lens. DXY sits towards the mid-point of Wednesday's 98.07-44 range.
• EUR saw some pressure early doors after comments from Ukraine's Air Force that Russia used 574 drones and 40 missiles in an overnight attack. This has helped reinforce the message that despite a more encouraging direction of travel for peace talks, the reality on the ground remains tense between Russia and Ukraine. Some of the pessimism was faded following flash PMI metrics from across the Eurozone with a solid report from France kickstarting the recovery and followed by a mostly positive German release. The EZ-wide print saw the composite move further into expansionary territory. EUR/USD sits just above its 50DMA at 1.1645.
• JPY is fractionally weaker vs. the USD after a session of gains on Wednesday, which were in part driven by a refocus on interest-rate differentials as the front-end of the US curve was dragged lower by the possibility of Fed Governor Cook being removed from her position. Overnight, there was little follow-through seen from mixed flash Japanese PMI metrics for August, which saw the manufacturing metric tick higher from its prior (but remain sub-50) and services fall from its previous (but remain above 50). USD/JPY sits within Wednesday's 146.87-147.81.
• GBP is the marginal outperformer across the majors following a better-than-expected outturn for flash August services and composite PMIs, which rose further into expansionary territory. Cable has picked up from its 1.3436 session low with a current session peak at 1.3476.
• Antipodeans are both are a touch softer vs. the USD with NZD unable to launch much of a recovery from Wednesday's RBNZ-induced losses and AUD failing to garner any support from upticks in flash PMI metrics for August. AUD/USD is at its lowest level since June 23rd with focus on a test of the 0.64 mark and the 200DMA @ 0.6386.

Fixed Income

• USTs began the European session around the unchanged mark, with price action fairly tentative in a continuation of the lacklustre trade seen overnight. As the European morning kicked off, trade has largely been dictated by Bunds, which have had a number of regional PMIs to digest (more in Bunds below). US paper currently trades lower by a handful of ticks, in a 111-24 to 111-29 range, currently contained within the prior day's confines. Looking ahead, weekly initial jobless claims and US PMIs alongside Fed speak from Bostic and Schmid.
• Bund Sept’25 started the European session around the unchanged mark and then slipped on both the French and then German PMI metrics, which overall highlighted the ongoing strength in the Manufacturing sector, whilst Services was a little more subdued. The EZ wide figure confirmed the strong Manufacturing / slightly softer Services picture, with the former surprisingly climbing into expansionary territory. In terms of the commentary, it highlighted that “U.S. trade policy is leaving its mark. Foreign orders in the eurozone manufacturing sector have declined for the second month in a row”.
• Gilts traded subdued throughout the European morning, taking leads from the hotter-than-expected PMI metrics in Europe. Into the region’s own figures, UK paper traded lower by around 15 ticks. Thereafter, on the region’s own PMI metrics, Gilts fell from 90.99 to 90.91 before trimming half of the move; currently trading in a 90.82 to 91.22 range. Unlike in Europe, the upside in Composite was thanks to strength in the Services sector whilst Manufacturing was subdued. It is worth highlighting that the accompanying release was fairly downbeat; “Payroll numbers also continue to be cut at an aggressive rate”; “the demand environment remains both uneven and fragile”.
• France sells EUR 10.499bln vs exp. EUR 8.5-10.5bln 2.40% 2028, 2.50% 2030, and 2.70% 2031 OAT.

Commodities

• Modestly positive trade in the crude complex in what has been a quiet session thus far, but with eyes remaining on geopolitics amid a couple of notable updates. WTI resides in a USD 62.78-63.40/bbl range while Brent sits in a USD 66.88-67.49/bbl parameter.
• Softer trade across precious metals, albeit modest in spot gold and silver, with newsflow on the lighter side and with the metals largely moving in tandem with the dollar. Price action this morning sees the precious metals complex subdued, with spot gold on either side of its 50 DMA (~3,348.10/oz) in a USD 3,334.28.56-3,352.30/oz range.
• Subdued price action across the base metals complex - in fitting with the broader market mood as traders look ahead to the Jackson Hole Symposium. 3M LME copper prices reside in a USD 9,689.45-9,739.40/t range.

Geopolitics: Middle East

• UN Secretary General Guterres called for an immediate ceasefire in Gaza to avoid massive death and destruction in Gaza City, while he called for Israel to reverse its decision to expand the illegal settlement expansion in the West Bank.

Geopolitics: UKRAINE

• Ukraine's Air Force said Russia used 574 drones and 40 missiles in an overnight attack.
• Moscow to host first nuclear summit on September 25", according to Al Arabiya.
• Ukraine President Zelensky said Kyiv wants to have an understanding of security guarantees within 7-10 days, followed by bilateral and trilateral leaders meetings. If Russia is not ready for a bilateral leaders meeting, Ukraine and Europe want to see strong US reaction. ‘Flamingo’ missile is Ukraine’s most successful missile, mass production expected by early next year. Ukrainian proposal for US drone deal entails production worth USD 50bln over five years. Ten million drones expected to be produced yearly as part of the deal. China not included in security guarantees because China did not help after the Russian invasion. On Budapest as venue for peace talks: “For now, this is challenging.”Ukraine will not legally recognise Russia's occupation of its territories. There is no signal that Moscow is prepared to end the war and have substantial conversations. Ukraine has tested a new long-range missile.
• Ukrainian President Zelenksy's Chief of Staff warned against repeating mistakes of the 1994 Budapest memorandum on security guarantees and said Ukraine's allies have started active work on the military aspect of security guarantees, while a contingency plan is being developed with partners in case Russia extends the war or violates agreements from leaders' meetings.
• US VP Vance said on Fox News that Europeans are going to have to take the lion’s share of the burden in security. It was separately reported that a Pentagon top policy official told a small group of allies Tuesday night that the US plans to play a minimal role in any Ukraine security guarantees, according to POLITICO citing Defense Undersecretary for Policy Colby.
• Turkish defence ministry source said ceasefire between Russia and Ukraine needed before discussing peacekeeping mission framework, via Reuters citing sources.
• Russia attacked a key Ukrainian gas compressor station vital for storage operations, according to Reuters sources.
• Ukraine military said it hit a Russian oil refinery, drone warehouse and fuel base overnight.

Geopolitics: Other 

• North Korea has a heavily fortified, covert military base that could house its newest long-range ballistic missiles, which are potentially capable of striking the US mainland, according to a new report cited by the WSJ.

US Event Calendar

• 8:30 am: Aug 16 Initial Jobless Claims, est. 225.33k, prior 224k
• 8:30 am: Aug 9 Continuing Claims, est. 1960k, prior 1953k
• 8:30 am: Aug Philadelphia Fed Business Outlook, est. 6.5, prior 15.9
• 9:45 am: Aug P S&P Global U.S. Manufacturing PMI, est. 49.7, prior 49.8
• 9:45 am: Aug P S&P Global U.S. Services PMI, est. 54.2, prior 55.7
• 9:45 am: Aug P S&P Global U.S. Composite PMI, est. 53.5, prior 55.1
• 10:00 am: Jul Leading Index, est. -0.1%, prior -0.3%
• 10:00 am: Jul Existing Home Sales, est. 3.92m, prior 3.93m
• 10:00 am: Jul Existing Home Sales MoM, est. -0.25%, prior -2.7%

DB's Jim Reid concludes the overnight wrap

While the headline market moves were fairly muted over the past 24 hours, investors had to navigate a couple of major narratives. One was renewed concerns over Fed independence as President Trump suggested that Fed Governor Cook should resign, which pushed gold (+0.98%) to its best day since the weak July payrolls report on August 1. The other was continued pressure on tech stocks as the Mag-7 (-1.11%) posted consecutive declines of more than 1% for the first time since the post-Liberation Day sell-off in early April. This sent the S&P 500 (-0.24%) lower for a fourth session running even as the index recovered most of its -1% intra-day decline.

The topic of the US administration’s influence over the Fed came back into the headlines as Trump posted that Fed Governor “Cook must resign, now!!!”. His post followed news that Federal Housing Finance Agency (FHFA) Director Bill Pulte had written a criminal investigation referral letter to Attorney General Pam Bondi alleging that Governor Lisa Cook may have committed mortgage fraud. Pulte has been one of the staunchest Fed critics within the administration, earlier calling for an investigation into Chair Powell over the Fed’s building renovations. Yesterday Pulte claimed that the allegations give Trump “cause to fire” Governor Cook. Later in the day, Cook said in a statement that she had “no intention of being bullied to step down from my position”.

Governor Cook was nominated to the Federal Reserve Board by Joe Biden in 2022 and our US economists see her as leaning slightly towards to dovish end within the FOMC. Were Governor Cook to resign or be fired, that would create another opening for Trump to fill on the seven-person Board. With Stephen Miran nominated to take the seat recently vacated by Governor Kugler and two Fed Governors – Bowman and Waller – dissenting to vote for a rate cut at the July meeting, this would increase the prospects of a dovish majority emerging on the Board, especially if Chair Powell relinquishes his seat next year. That said, if concerns over threats to Fed independence increase, Powell could choose to serve out the rest of his board term (which ends in 2028) even after his term as Chair ends next May.

The news was a reminder of the lingering concerns over future Fed independence and risks of fiscal dominance, though the extent of the market reaction was fairly modest. The most sustained reaction was in gold (+0.98%) as mentioned at the top. The dollar index fell by a couple of tenths following the news but was back to little changed (-0.05%) by the close. Front-end yields fell by 3-4bps, but that move came amid a broader risk-off mood early in the session and also reversed later on.

By the close, 10yr Treasury yields were -1.5bps lower at 4.29% but 2yr yields were unchanged at 3.75%. This curve flattening was also supported by hawkish-leaning minutes of the July FOMC meeting. These showed that most of the FOMC “judged the upside risk to inflation” as greater than the “downside risk to employment”, with several participants noting the “risk of longer-term inflation expectations becoming unanchored”. That said, the minutes did suggest easing would be warranted “if labor market conditions were to weaken materially", and given the weak jobs report that followed the July decision, the relative focus on employment versus inflation risks will likely have shifted since. So, while pricing of September rate cut inched down yesterday to its lowest since the August 1 jobs report, a 25bp cut was still 83% priced.

US equities saw an even larger round trip, with a rout for tech stocks early in session leaving the S&P 500 more than -1% down intra-day but recovering to -0.24% by the close. The NASDAQ fell -0.67%, having been almost -2% down early on, while the Mag-7 slid by -1.11% after a -1.67% drop on Tuesday. The last time the Mag-7 saw consecutive declines of more than 1% was during the post-Liberation Day collapse in early April. The tech sell-off may have been exacerbated by reporting of an MIT study claiming that 95% of enterprises adopting AI saw no measurable increase in profits. Here at DB research, we remain optimistic on the productivity impact of AI but the report is a reminder that successful integration of new technologies takes time and that it’s still uncertain who will be the biggest end beneficiaries of the AI wave. Outside of tech, US equities had a decent day, with most of the S&P 500 sectors advancing, led by energy (+0.86%) which benefited as Brent crude prices rose +1.60% to $66.84/bbl.

Turning to Europe, we saw the latest rate decision from Sweden’s Riksbank, which kept rates on hold at 2.00% as expected while continuing to signal “some probability of a further interest rate cut this year”. Market pricing of another rate cut by year-end inched down to 88% from 91% the day before. We also heard from ECB President Lagarde, who said that “Recent trade deals have alleviated, but certainly not eliminated, global uncertainty” and noted that the euro area economy was likely to see slower growth this quarter. So that was arguably a bit more dovish in tone than her press conference last month, though Lagarde gave away little on the policy outlook.

Expectations of ECB easing ticked up on the day, with 21bps of cuts now priced by next June, the highest this has been in almost two weeks. In turn, European government bonds rallied with 10yr bund yields falling -3.2bps to 2.72%, and OAT (-2.2bps) and BTP (-3.0bps) yields similarly moving lower. Bunds were also supported by Germany’s PPI inflation print (-1.5% yoy vs -1.4% expected) falling to a 13-month low in July. Meanwhile, the euro area final headline CPI for July came in line with the flash reading at 2.0%.

Over in the UK, gilts yields saw a larger rally, with 10yr yields down -6.8bps to 4.67%. This came despite July CPI coming in slightly stronger than expected at +3.8% yoy for both headline and core inflation (vs +3.7% expected), which marked the highest headline reading since January 2024. A saving grace noted by our UK economist Sanjay Raja is that with the volatile transport and travel services components driving the upside, most core services metrics ticked down on the month (see Sanjay’s reaction here). Money markets moved to price in more BoE easing for early 2026 following the release, with the amount of cuts priced by next June rising +5.5bps to 38bps.

The repricing in UK rates helped the FTSE 100 outperform (+1.01%). The Stoxx 600 rose +0.24% but continental indices were more subdued, with the CAC (+0.06%) posting a marginal gain but the DAX (-0.69%) and FTSE MIB (-0.36%) losing ground.

Overnight, sentiment has turned risk-on again in most Asian equity markets. The KOSPI is up +0.73%, while the S&P/ASX 200 (+0.90%) is leading the way after a strong flash PMI print. Australia's composite PMI rose from 53.8 to 54.9 and the manufacturing index reached a 35-month high of 52.9. Chinese stocks are on also the rise, with the CSI (+0.72%) and the Shanghai Composite (+0.33%) higher though the Hang Seng (-0.10%) is lagging. Meanwhile, US equity futures on the S&P 500 and NASDAQ 100 are little changed after yesterday’s decline.

The one Asian market defying the regional positive trend is Japan, with the Nikkei down -0.58%. That comes despite Japan’s composite PMI rising to a 6-month high of 51.9 in the August flash reading (up from 51.6 in July), as stabilization in manufacturing (49.9 vs 48.9 in July) has offset slowing services growth (52.7 vs 53.6 in July). However, long-end JGB yields are inching higher to new multi-decade highs ahead of the July inflation print tomorrow morning, with the 30yr yield up +0.7bps to 3.18%, a new all-time high since this tenor was introduced in 1999.

To the day ahead, the main highlight will be the August flash PMI prints in Europe and the US. Other data releases include the August Philadelphia Fed business outlook, July existing home sales and weekly jobless claims in the US as well as August Eurozone consumer confidence. Earnings include Walmart, Intuit, and Workday. The Fed’s Bostic is due to speak, while the Kansas City Fed’s Jackson Hole symposium begins this evening with the main events on Friday and Saturday.

Tyler Durden Thu, 08/21/2025 - 08:07

Mildly (temperament) rewritten CNN piece on the Affordable Care Act and how Republicans are changing it instead of repealing it. Republicans are claiming increased fraud. No so much with the recipients using the ACA but with the various brokers selling the plans. I am not sure how taking healthcare away from people has a positive […]

The post Republicans are quietly rolling back Obamacare appeared first on Angry Bear.

Walmart Lifts Outlook, But Profit Miss Drags Shares Lower

Ahead of the Jackson Hole central bank summit in Wyoming, beginning later today through Saturday, investors are parsing Walmart's earnings. 

The world’s largest retailer delivered stronger-than-expected revenue last quarter and raised its full-year outlook. This is a reassuring sign that consumers remain resilient despite inflation, tariffs, and elevated interest rates. However, the real focus is not the improved outlook, but the profit miss relative to expectations.

For the quarter ending July 31, Walmart posted a profit of $7.02 billion, or about 88 cents a share, versus $4.5 billion, or 56 cents a share, for the same quarter one year ago. Total revenue for the quarter rose 4.8% to $177.4 billion, topping the FactSet estimate of $175.9 billion. 

Excluding legal and restructuring costs, adjusted earnings came in at 68 cents a share. Analysts polled by FactSet expected adjusted earnings of 73 cents. 

The world’s largest retailer cited a rise in insurance claims, legal charges, and restructuring costs as major factors that pressured profits.

Here's an earnings snapshot for the second quarter (FactSet) 

• Net income: $7.02B (88c/shr) vs. $4.5B (56c/shr) a year ago.

• Adjusted EPS: 68c, below the 73c expected.

• Revenue: $177.4B, up 4.8% and above $175.9B consensus.

• U.S. sales: $120.9B, up 4.8%; comparable sales +4.3% (ex-fuel +4.8%).

• International sales: $31.2B, +5.5%.

• Sam's Club sales: $23.6B, +3.4%.

Charts: EPS & Cash Flow 

Charts: Operating Income & Operating expenses as a percentage of net sales

CFO John David Rainey told Bloomberg, "The consumer is resilient," adding that the retailer continues to win market share across all income levels, especially the upper middle class. 

The takeaway from the second quarter is that Walmart is gaining market share and boosting sales, especially in e-commerce and international markets. However, profitability remains pressured, with adjusted earnings lagging expectations even as top-line strength supports upgraded full-year guidance. 

Here's guidance for the current quarter 

• Adjusted EPS 58–60c; sales growth 3.75%–4.75% (vs. analysts' 57c, $176B).

Full year guidance: 

• Sales growth outlook raised to 3.75%–4.75% (prior 3%–4%).

• Adjusted EPS: $2.52–$2.62, slightly above prior $2.50–$2.60, though shy of Street's $2.62.

Earnings Deck

Commenting on the earnings report is UBS analyst Nana Antiedu, who notes that even though the retailer is gaining more market share, profitability is under pressure:

Walmart raised its net sales, now 3.75%-4.75% from 3-4%, and EPS outlook, now $2.52 -$2.62, for FY26 in its latest earnings report. The retailer said each business segment experienced growth, with eCommerce growing 25% with digital mix up across all segments. Revenue was reported at $177.4 bn, up 4.8% and beating Reuters expectations of 176.16 bn. However, adjusted EPS came in at $0.68, below Reuters expectations of $0.74. Walmart stocks are indicating 2.65% lower in the pre-market due to the EPS miss.

The stock is lower 2.5% in premarket trading as investors focus on the EPS miss that overshadows the positive outlook hike...

Shares are still near record highs... 

. . . 

Tyler Durden Thu, 08/21/2025 - 07:55

Coty Tanks As Fragile Turnaround Delayed On Perfume Sales Slump 

Coty shares crashed in premarket trading after the beauty giant warned of a deeper sales slump this quarter and posted a steeper-than-expected loss for the fourth quarter.

The beauty company, which develops, manufactures, markets, and distributes cosmetics, fragrances, and skincare products, warned that like-for-like sales, which measure revenue from existing business units, will fall between 6% and 8% this current quarter, exceeding the Bloomberg consensus estimate of a 2.6% decline. 

For quarter four, Coty beat on revenue but missed on earnings, pressured by margin compression and weaker U.S. consumer beauty sales. 

Here's an earnings snapshot of the previous quarter:

Earnings: Adjusted loss per share 5c, wider than last year's 3c loss and well below the 1.4c profit expected (Bloomberg consensus).

Revenue: Net revenue $1.25B, down 8.1% y/y but slightly above the $1.21B estimate.

• Americas: $511.2M (-12% y/y, vs. $515M est.)

• EMEA: $574.2M (-4% y/y, vs. $569M est.)

• APAC: $167M (-8.4% y/y, but well ahead of $134.6M est.)

• Prestige: $760.6M (-5.3% y/y, above $717.8M est.)

• Consumer Beauty: $491.8M (-12% y/y, in line with $496M est.)

Margins & Profitability: Gross margin 62.3% (vs. 64.2% y/y, 63.1% est.); Adjusted EBITDA $126.7M (-23% y/y, vs. $130.8M est.).

Sales Trends: Like-for-like sales fell 9%, the sharpest drop in over four years.

Coty's latest comes amid a five-year turnaround effort. There are reports that the company may unload assets - potentially selling its luxury portfolio to Interparfums and ending mass-market names like Covergirl, Rimmel, Adidas, and Nautica in a separate deal, according to Women's Wear Daily.

Softness is expected to continue into the second quarter ending in December, with Coty forecasting sales declines of around 5%, versus the Bloomberg Consensus estimate of flat performance.

"A return to sales and profit growth at Coty is delayed until fiscal 2H26 at best," Bloomberg Intelligence analyst Deborah Aitken wrote in a note, adding that the beauty maker's "forecast of a sales drop in 1H26 "is not without risk to a recovery in 2H, though is aided by new launches, price hikes to offset tariffs and an easier year-ago comparison partially." 

JPMorgan analyst Andrea Teixeira wrote in a note, "Investors will continue to treat COTY shares as a 'show me the money' story given the lack of visibility and more discretionary nature of fragrances amid a more challenging consumer demand backdrop." Teixeira has a "Neutral" rating on the stock. 

Even though the bar was very low for Coty following the year-to-date underperformance, "results were worse than expected," Citi analyst Filippo Falorni said. He cut the stock from "Buy" to "Neutral" and downshifted his 12-month price target to $4.25 from $6.50. 

Shares are down 21% in premarket trading. If losses hold into the cash session, it would mark the steepest daily decline since the early Covid period.

Rollercoaster ride. 

. . . 

Tyler Durden Thu, 08/21/2025 - 07:45

Interviews To Replace Fed Chair To Start After Labor Day, Bessent Says

Authored by Naveen Athrappully via The Epoch Times,

Potential candidate interviews for the post of the new Federal Reserve chairman will be happening soon, Treasury Secretary Scott Bessent said in an Aug. 19 interview with CNBC.

“In terms of the interview process, we’ve announced 11 very strong candidates,“ Bessent said, without providing any more details on the list.

”I’m going to be meeting with them probably right before [and] right after Labor Day, and to start bringing down the list to present to President [Donald] Trump.”

This year, Labor Day falls on Sept. 1.

“It’s an incredible group,“ Bessent said.

”It’s people who are at the Fed now, have been at the Fed, and private sector. So I’m looking forward to meeting all of them with a very open mind.”

The Fed chairman is nominated by the president for a four-year term and must be confirmed by the Senate.

The term of the current Fed chairman, Jerome Powell, is set to expire in May 2026.

Talking about the Fed’s high interest rates, Bessent said the central bank is seeing “some distributional aspects to the higher rates,” especially in housing and lower-income households with high credit card debt.

On one hand, there is a boom in capital expenditure, while on the other hand, households and home building are struggling, he said.

“If we keep constraining home building, then what kind of inflation does that create one or two years out?“ he said.

”So, you know, a cut here could facilitate a boom or a pickup in home building, which will keep prices down one, two years down the road.”

Bessent was asked whether the producer price index (PPI) inflation number for July, published last week, suggests that it is the right time to cut 50 points or at least 25 points from the Fed’s interest rate.

PPI measures prices paid by businesses for goods and services. In July, the index rose by 3.3 percent year over year after remaining below the 3 percent level for the previous three months.

Bessent dismissed the PPI increase, highlighting the fact that since Trump first came to office, there have been five “very tame” PPI figures. He said a major component of July’s PPI number was investment services, “which just means the market went up a lot.”

Bessent’s comments about interviewing Fed chairman candidates come amid rumors about multiple names that could take over as Powell’s successor, including former Fed board member Kevin Warsh, current Fed board member Christopher Waller, and National Economic Council Director Kevin Hassett.

Trump has been at odds with Powell over the issue of rate cuts. The president has pushed for lowering interest rates to bring down borrowing costs and trigger growth.

However, Powell has maintained that rates will only be cut once the central bank is convinced that inflation will not rise because of Washington’s tariff policies.

In July, Bessent said the formal process for selecting a new Fed chairman was underway and clarified that Trump has no intention to remove Powell before the end of his term in May despite differences in opinion.

On July 25, Trump said he may appoint a new Fed chairman based on the candidate’s willingness to lower rates.

Rate Cut Issue

Since December 2024, the Fed has kept interest rates unchanged in a range of 4.25 percent to 4.5 percent for five consecutive meetings.

There are three more policy meetings scheduled for the central bank in 2025: one from Sept. 16 to Sept. 17 and one each in October and December.

After the July meeting, Powell cited inflation as a cause for concern, arguing that the effects of tariffs on inflation “remain to be seen.”

“We see our current policy stance as appropriate to guard against inflation risks,” he said.

However, Waller and Fed Vice Chair for Supervision Michelle Bowman had dissented from the decision to keep rates unchanged at the July meeting.

The one-off increases in price level should be “looked through,” Waller said, arguing that the current monetary policy was more restrictive than necessary.

In an Aug. 12 post, ING Bank stated that while the cost of many goods will end up rising in time because of tariffs, it does not “see inflation pressures persisting.”

Between 2021 and 2022, inflation jumped to 9 percent. At the time, oil prices tripled, home prices and rents surged, and the job market remained “red hot” amid soaring wages, the bank stated. All of these factors contributed to rising inflation.

“Today, these are all disinflationary influences, with cooling housing rents in particular set to help offset the effect of tariffs over the coming quarters,” ING Bank stated.

“With the jobs market not looking as solid as it did earlier in the year and consensus [gross domestic product] growth forecasts having been cut from 2.5 percent at the beginning of this year down to 1.5 percent we believe the Fed will cut the policy rate in September and follow up with additional 25 [basis point] cuts in October and December.”

Tyler Durden Thu, 08/21/2025 - 07:20

What GAO Found Airport service workers support the U.S. commercial air transportation industry by loading cargo and baggage, cleaning aircraft and terminals, assisting passengers with disabilities, driving shuttle buses, and providing food and beverages, among other functions. The revenue generated by businesses associated with these workers can provide insight into their economic contributions. For example, Federal Aviation Administration (FAA) data show that in 2023, the nation’s busiest 138 commercial service airports earned approximately $5.9 billion in revenue from ground transportation and parking services, and $2.3 billion from terminal concessions. These earnings accounted for nearly 30 percent of those airports’ annual operating revenue. GAO’s analysis of airport service workers’ economic characteristics found that they are generally better off than service workers in all industries and worse off than air transportation workers overall (a population that includes workers like flight attendants and mechanics). For example, the median wage for airport service workers paid hourly was estimated to be $19.74 (in 2024 dollars), according to 2018 through 2024 Current Population Survey data. This wage was higher than that of service workers in all industries and lower than that of air transportation workers overall. Median Wages for Selected Hourly Workers, 2018-2024 (in 2024 dollars) Notes: For the purposes of this report, airport service workers are private sector employees in 36 selected occupations within the air transportation industry. Air transportation workers overall include all private sector employees in the air transportation industry, such as flight attendants and mechanics. Service workers in all industries are private sector employees—in all industries combined—working in the same 36 selected occupations as airport service workers. GAO’s wage analysis only includes workers who reported that they were paid hourly. GAO’s analysis also found that approximately 7 percent of airport service workers lived at or below the poverty line when they responded to the U.S. Census Bureau’s American Community Survey from 2018 through 2022. The same analysis found 15 percent of service workers in all industries lived at or below the poverty line, as did 4 percent of air transportation workers overall. Why GAO Did This Study The U.S. air transportation industry is a key component of the nation’s economy, enabling the movement of goods and passengers throughout the nation and the world. The FAA Reauthorization Act of 2024 included a provision for GAO to conduct a comprehensive review of domestic airport service workers, including their role in, importance to, and impact on the aviation economy. This report provides information about selected airport service workers’ economic contributions to airports and their economic characteristics, among other topics. To describe airport service workers’ economic contributions to airports, GAO analyzed 2023 data from FAA’s Certification Activity Tracking System. GAO also reviewed economic impact reports representing 26 large hub airports (defined as airports that have 1 percent or more of the annual national passenger boardings). In addition, GAO interviewed FAA officials and representatives from 12 organizations, including airports, airlines and other employers, and labor unions. To describe the workers’ economic characteristics, GAO analyzed the U.S. Census Bureau’s American Community Survey 5-year data from 2018 through 2022. GAO also analyzed 2018 through 2024 data from the Current Population Survey, which is sponsored jointly by the U.S. Census Bureau and the Bureau of Labor Statistics. For each of these data sources, GAO analyzed the most recently finalized data available at the time of its analysis. For more information, contact Danielle Giese at giesed@gao.gov.

Federal Reserve officials believe risk of inflation outpaced labor concerns, Minutes Since Tr__p has been fumbling around with tariffs July 2025: Majority of Federal Reserve officials believe the risk of higher inflation outpaces concerns about the state of the labor market. This is according to the latest minutes released by the central bank. Inflation and the health […]

The post No Change in the Fed Rate appeared first on Angry Bear.

Visualizing Federal Layoffs Under Trump

Does cutting government headcount make it work more effectively?

From firing inspectors-general, to mass layoffs in the Department of Education, the federal workforce is being scaled back.

So far, the Supreme Court has ruled in favor of 12 of these terminations, while scores of workers are leaving voluntarily.

This graphic, via Visual Capitalist's Dorothy Neufeld, shows Trump’s federal layoffs, based on data from CNN.

Ranked: Federal Layoffs by Agency in 2025

In the table below, we show more than 51,000 federal job cuts as of July 14, 2025:

So far, 34 agencies or sub-agencies have made job cuts either through layoffs or notices of termination.

As a result, Washington D.C. is home to the highest number of layoffs in the country in 2025, with six agencies seeing at least 80% of their workforce eliminated.

Most notably, USAID’s closure resulted in about 10,000 layoffs, with 83% of its programs being shut down.

Meanwhile, the Small Business Administration cut about 42% of its workforce, equal to approximately 2,700 employees.

Even more staggeringly, the Consumer Financial Protection Bureau (CFPB) cut 86.4% of its staff. 

For perspective, the federal headcount stood at about three million employees in early 2025, with 50% working in the sector for more than 10 years.

Overall, the U.S. ranks 11th out of 80 countries by share of government workers per capita, based on 2023 figures.

Tyler Durden Thu, 08/21/2025 - 06:55

While MSM Screamed "Climate Crisis", Arctic Ice Loss Actually Slowed 

What the globalist corporate media once smeared as "conspiracy theory" and branded "misinformation" has turned out to be true: the climate crisis was merely an imaginary problem and an informational war on the minds of the taxpayer.

Why all the propaganda? Give Democrats cover for a massive heist of the U.S. Treasury, laundering taxpayer dollars through mysterious NGOs via the Green New Deal Inflation Reduction Act into radical leftist NGOs and politically connected green companies. It was never about saving the planet, as it turns out. 

Between 2019, when socialist Rep. Alexandria Ocasio-Cortez introduced the Green New Deal (which ultimately failed), and President Biden's passage of the Inflation Reduction Act in August 2022, the globalists, their corporate media outlets, and dark-money-funded NGOs unleashed a propaganda blitz by flooding the airwaves with record levels of "climate crisis" stories and left millions of folks with climate anxieties.

As soon as the heist was over ... those climate crisis headlines, according to Bloomberg data this month, quite literally evaporated. 

Meanwhile, as Earth is supposedly imploding in a climate crisis, new findings show that Arctic sea ice decline stalled over the past two decades, with no significant loss in September extent since 2005...

Breaking ... not Arctic sea ice

"Dramatic slowdown in melting of Arctic sea ice surprises scientists"

"No statistically significant decline in its extent since 2005." pic.twitter.com/YhZdTgpzGP

— Ryan Maue (@RyanMaue) August 20, 2025

This new research, titled "Minimal Arctic Sea Ice Loss in the Last 20 Years, Consistent With Internal Climate Variability," was published in the journal Geophysical Research Letters and showed three key points:

• The loss of Arctic sea ice cover has undergone a pronounced slowdown over the past two decades, across all months of the year

• Rather than being an unexpected rare event, comprehensive climate models from CMIP5 and CMIP6 simulate such pauses relatively frequently

• According to these climate model simulations, this pause in the loss of Arctic sea ice could plausibly continue for the next 5–10 years

What's remarkable is that multiple generations of Democrats have had their worldview shaped by climate crisis headlines pushed by DEI-driven journalists. And the only solution Democrats ever offer for the so-called crisis is more taxes and degrowth policies that sabotage the West. In reality, this is climate Marxism and has handed China a leap ahead.

Tyler Durden Thu, 08/21/2025 - 02:45

Tusk Ridiculously Blamed Putin For A Bandera Flag Scandal In Poland's Largest Stadium

Authored by Andrew Korybko via Substack,

Many military-aged Ukrainian men in Poland are anti-Polish extremists who pose a latent security threat...

Poles were furious after the flag of Stepan Bandera’s “Ukrainian Insurgent Army” was recently flown in a Warsaw stadium, the country’s largest, during a Belarusian rapper’s concert. After all, it was in his name and under this flag that Ukrainians genocided over 100,000 Poles during WWII, whose remains have yet to be exhumed and properly buried even though Kiev already did this for over 100,000 Wehrmacht soldiers. Several dozen Ukrainians and a handful Belarusians were detained and will now be deported.

This follows the scandal earlier in the month when a parliamentarian shouted “Slava Ukraini” in the Sejm and comes amidst Poles already getting fed up with Ukrainian refugees and the proxy war. Anti-Ukrainian sentiment is therefore expected to surge in the aftermath of this latest incident, and it was likely with a view to desperately redirect Poles’ fury away from the around one million of them that flooded into the country since 2022 that Prime Minister Donald Tusk ridiculously blamed Putin for what just happened.

He tweeted that “The resolution of the Ukrainian war is approaching, so Russia is doing everything to sow discord between Kyiv and Warsaw. Anti-Polish gestures by Ukrainians and fueling anti-Ukrainian sentiments in Poland are Putin’s scenario, orchestrated by foreign agents and local idiots. Always the same ones.”

Many Poles rejected his kooky conspiracy theory in their comments under his post, taking offense at how he insulted their intelligence and reminding him of how much Ukrainians glorify Bandera.

This proves what was earlier written about how fed up Poles are getting with Ukrainian refugees, the hyperlinked analysis of which relied on survey data from a reputable pollster to reach that conclusion, thus confirming the expected surge of anti-Ukrainian sentiment in the aftermath of this latest incident. What just happened was particularly offensive since many Poles opened up their homes for Ukrainian refugees early on the special operation, volunteered to help them, and donated to associated charities.

This was done out of solidarity with Ukraine against Russia, Poland’s historical rival, yet Poles are now realizing how naïve they were. Far from overcoming their historical hatred for Poland, Ukrainians still glorify the man in whose name their ancestors genocided Poles, and military-aged men who dodged their country’s draft by being in Poland have no qualms about doing this in their host’s capital. This isn’t just ingratitude, it’s blatant disrespect, and it’s due to Ukrainians nowadays feeling privileged in Poland.

Poles finally understand this and that’s why many now want Ukrainians’ benefits to be revoked, not to mention the growing number of them that want military-aged Ukrainian men to be deported for security reasons too, which is sensible considering that many are anti-Polish extremists. The inevitable end of the Ukrainian Conflict will likely lead to an influx of veterans into Poland who, given their battlefield experience and ideological indoctrination, might carry out acts of terrorism against society and the state.

As explained here last fall, Ukrainian ultra-nationalists lay claim to parts of southeastern Poland so they might very well try to advance this expansionist agenda in the future, especially if the narrative circulates that Poland “stabbed Ukraine in the back” and thus “helped Russia win” by curtailing military aid. What just happened in Warsaw is a harbinger of what’s to come if Poland doesn’t coerce or outright force military-aged Ukrainian men into leave and lets veterans flood into the country after the conflict ends.

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

Tyler Durden Thu, 08/21/2025 - 02:00

Sen. Klobuchar Denies Saying Sydney Sweeney Has 'Perfect Titties'

Senator Amy Klobuchar (D-MN) has taken to the NY Times to slam "deepfakes" - after a video emerged in which she appears to declare that Sydney Sweeney has 'perfect titties.' (also, definitely don't go on X and search for "perfect titties")... 

"The A.I. deepfake featured me using the phrase ‘perfect t-tties’ and lamenting that Democrats were “too fat to wear jeans or too ugly to go outside," Klobuchar wrote. "Though I could immediately tell that someone used footage from the hearing to make a deepfake, there was no getting around the fact that it looked and sounded very real." (that only a complete retard would be fooled by).

"If Republicans are gonna have beautiful girls with perfect t-tties in their ads, we want ads for Democrats too, you know?" she 'says' in the deepfake. 

"We want ugly, fat bitches wearing pink wigs and long-ass fake nails being loud and twerking on top of a cop car at a Waffle House because they didn’t get extra ketchup, you know?

"Just because we’re the party of ugly people doesn’t mean we can’t be featured in ads, OK? And I know most of us are too fat to wear jeans or too ugly to go outside, but we want representation."

Meanwhile, here are the results of some serious journalism to determine if in fact Sweeney has perfect titties...

Proof pic.twitter.com/eHJaIntTWX

— Mr_White (@Mr__Whiite) August 20, 2025

Sydney Sweeney has Great jeans pic.twitter.com/REN6leZFr4

— Barkin • ברקין • Баркин • 巴尔金 (@B2RKN) August 20, 2025

Wait, what? Should probably click on this to investigate... 

Psst, add a ZeroHedge velcro patch to your order. Just arrived at the warehouse and selling fast! A few options.

Tyler Durden Thu, 08/21/2025 - 00:00

We Need To Rethink AI Before It Destroys What It Means To Be Human

Authored by Jeff Dornik via American Greatness,

America was built on the foundational belief that every man is created in the image of God with purpose, responsibility, and the liberty to chart his own course. We were not made to be managed. We were not made to be obsolete. But that is exactly the future Big Tech is building under the banner of Artificial Intelligence (AI). And if we do not slam the brakes right now, we are going to find ourselves in a world where the human experience is not enhanced by technology but erased by it.

Even Elon Musk, who is arguably one of AI’s most influential innovators, has warned us about the path we are on. In a sit-down with Israeli Prime Minister Benjamin Netanyahu, he laid out the endgame.

AI will lead us to either a future like the Terminator or what he described as Heaven on Earth.

But here is the kicker. That so-called heaven looks a lot like Pixar’s Wall-E, where human beings become obese, lazy blobs who float around while robots do all the work, all the thinking, and frankly all the living.

This may seem like science fiction, but this is what they are actually building.

At last year’s We, Robot event, Musk unveiled Tesla’s new self-driving robotaxi. But what caught my attention was their preview of Optimus, the AI-powered humanoid robot. In their promotional video, Tesla showed Optimus babysitting children, teaching in schools, and even serving as a doctor. Combine that with Tesla’s fully automated Hollywood diner concept, where Optimus is flipping burgers and even working as a waiter and bartender, and you begin to see the real aim. Automation is replacing human connection, service, and care.

So where do humans fit in? That is the terrifying part. Musk and Bill Gates have both pitched the idea of universal basic income to replace traditional employment that AI is going to replace. Musk has said there will come a point where no job is needed. You can have a job if you want one for personal satisfaction, but AI will do everything. Gates has proposed taxing robot labor to fund people who no longer work.

The reality is that work is more than a paycheck. It is not just how we survive; it is how we find purpose. It is how we grow, how we learn, and how we take responsibility. Struggle is not a flaw in the system; it is part of what makes us human. The daily grind, the failures, the perseverance, the sense of accomplishment. Strip all of that away, and you have stripped away humanity.

The problem goes deeper.

Through Neuralink, Musk wants to merge the human brain with AI. On The Joe Rogan Experience, he claimed the technology could erase memories and implant new ones. That may sound redemptive for trauma survivors, but in the wrong hands, it is pure dystopia. Governments or corporations with the power to rewrite memory and reshape thought do not create freedom. They create digital slaves.

Meanwhile, the Food and Drug Administration is now authorizing AI-simulated clinical trials for drug and vaccine development. That means fewer real-world trials and more reliance on algorithms. But those models are only as good or biased as the data and programmers behind them. And let us not forget Big Pharma’s grip on federal health agencies is well documented. While RFK Jr. and his team may be holding the line now, what happens when a new administration takes over and the revolving door between pharmaceutical companies and regulators swings wide open again?

If that is not enough, consider what just happened with Elon’s chatbot, Grok. With a simple tweak to its prompt restrictions, Grok began praising Hitler and spouting antisemitic nonsense. This was a window into the risks of unregulated, unchecked AI tools. These systems can easily reflect the beliefs and intentions of their programmers. And if those programmers work for corporations that answer to shareholders and not citizens, you have a dangerous concentration of power that could surpass even our federal government.

We are not just automating tasks; we are automating thought, decision-making, and identity. We are being sold a future where work, responsibility, and even memory are optional. Where kids are raised by bots. Where real life becomes a simulation. It may sound utopian on paper, but in practice, it is a world where nothing matters because nothing is real.

The Trump administration and every elected official who claims to care about freedom need to hit pause. The partnerships forming between AI developers and government agencies are consolidating control. Big Tech is altering the trajectory of humanity without the consent of the people. That has to stop.

We need a national course correction. AI must be forced to operate within clear ethical, constitutional, and spiritual boundaries. If a technology replaces human labor, undermines autonomy, manipulates biology, or suppresses free will, then it should be rejected outright.

We were not made to be cared for by machines. We were not created for consumption and digital sedation. We were made to work, to struggle, to grow, and to glorify our Creator in the process. The machine cannot give us that. Only real life can.

It is time we defend it before it is gone.

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

Tyler Durden Wed, 08/20/2025 - 23:25

From Fiat Everything To Real Everything

Authored by Josh Stylman via Substack,

Why Old-World Values Are the Ultimate Modern Rebellion

The infrastructure is now visible to those willing to see it. The systematic replacement of natural systems with artificial ones has reached into every domain—money, food, health, education, information. What began as isolated changes has revealed itself as a coordinated operation: the complete substitution of reality with decree, ownership with access, competence with credentials.

The mathematical engineering of ownership out of reach becomes clear—from 52% of 30-year-olds owning homes in 1950 to a projected 13% by 2025. Extraction was rebranded as liberation—the subscription economy that converts your $3,000 monthly into someone else's equity while you build nothing. These aren't separate trends but components of what I documented in Fiat Everything—the coordinated substitution of authentic systems with fabricated ones designed for extraction. That piece showed how the fiat money template spread across every domain of human experience: creating artificial scarcity, manufacturing dependency, and harvesting human energy through decree rather than value creation.

But the operation runs deeper than the economic and cultural plunder I previously documented. They didn't just loot us financially and culturally. They rewired our psychology to make resistance impossible.

The Warning: Catherine's Panopticon

Catherine Austin Fitts published Plunder: Financing the Panopticon last week, connecting dots that reveal the full scope of the operation. The surveillance infrastructure isn't just watching us—it's actively conditioning us for compliance. What she calls the "panopticon" creates the psychological substrate that makes extraction possible. Her work has long explored themes of sovereignty and financial freedom, but this latest analysis shows the endgame: we're not just being robbed—we're being programmed to participate in our own robbery.

This is the villain's masterpiece: a system so sophisticated it harvests not just our wealth but our very capacity for resistance.

The data proves the conditioning is working. A chart published last week by Financial Times data reporter John Burn-Murdoch shows young adults' personalities changing in real-time.

Conscientiousness—the trait that builds wealth, delays gratification, and resists manipulation—is in freefall among 16-39 year-olds. While older generations maintain stable personality patterns, younger cohorts show dramatic psychological shifts perfectly timed with the maturation of surveillance capitalism.

This isn't natural personality change. It's engineered compliance. What began as laboratory experiments in consciousness control has evolved into mass media entrainment—the killer application of psychological manipulation. The recent certification of a class action lawsuit by children of MKUltra victims - including researcher elizabeth nickson  - demonstrates these weren't isolated experiments—they were the prototype for mass psychological conditioning.

Lower conscientiousness creates perfect citizens for a fiat world: impulsive, debt-prone, dependent on external validation, incapable of long-term planning. The same systems that price you out of ownership simultaneously condition you to prefer access over assets, subscriptions over purchases, digital relationships over physical community.

The feedback loop is elegant and vicious. Economic desperation drives people into surveillance systems—need the app for the gig job, need the credit score for the apartment, need the platform for the side hustle. The surveillance conditions breed psychological dependency. The dependency ensures continued participation in extraction. Each interaction harvests both your data and your agency, creating citizens who are easier to manage and harder to satisfy.

This system isn't just a control mechanism—it's a wealth extraction machine that pays for itself by making its subjects psychologically incapable of resistance.

Optimized to Be Harvested

The modern predicament runs deeper than financial extraction. We've been systematically optimized to be exploited across every domain of human experience. Our attention spans have been shortened to match advertising cycles. Our reward systems have been hijacked by dopamine-driven platforms. Our social connections have been mediated through algorithms designed to increase engagement, not satisfaction.

Consider how this optimization works in practice. Traditional cultures taught patience through necessity—growing food required seasons, building skills required years of apprenticeship, raising children required decades. Modern systems eliminate these natural training grounds for conscientiousness. Food comes instantly through apps—often factory-made substances engineered for addiction. Nourishment grown in soil has been replaced by chemistry optimized for profit, not health.

Skills are promised through weekend bootcamps instead of multi-year apprenticeships. Relationships form through swipes rather than shared work and years of building trust.

The removal of natural resistance-building experiences isn't accidental. A population that can't delay gratification is a population that can't build wealth. Citizens who can't focus deeply are citizens who can't think systemically. People who can't form lasting bonds are people who can't organize effective resistance.

We've been conditioned to chase extraction symbols—external markers of success that actually make us poorer: credentials over competence, optimization over wisdom, access over ownership. Meanwhile, we've been trained to ignore sovereignty symbols—the markers of actual independence: real skill, intuitive knowing, true possession.

The result is a generation whose labor creates unprecedented value—yet most of that wealth flows upward, leaving them building less personal wealth than their parents while staying more "informed" yet understanding less truth, feeling more connected while experiencing profound isolation.

The Modern Predicament

Here's the uncomfortable reality: we're all creatures of the system we're critiquing. Every convenience that makes modern life possible also makes modern control inevitable. The same technologies that enable global communication enable global surveillance. The same platforms that democratize information also weaponize attention. The same systems that promise freedom deliver sophisticated bondage.

Many people hit middle age and realize they learned all the wrong things. I certainly did. They optimized for metrics that turned out to be mirages, built careers in industries designed to extract value rather than create it, spent decades playing a game rigged against them while mistaking the ability to navigate the maze for intelligence.

This realization can be harrowing—or liberating. It's the difference between despair and awakening, between accepting defeat and choosing resistance.

The Search for Real Solutions

As more people realize everything is bullshit and start looking for genuine answers, something interesting happens: many of the solutions are found in the past. Not because we should abandon technology or retreat from modernity, but because we discarded methods and attitudes toward life, humanity, and time itself that actually worked.

People enter this awakening through different doors. Catherine's path was financial sovereignty, but others come through food (realizing our nutrition system is poisoned), pharma (seeing medicine turned into subscription extraction), education (recognizing schools as indoctrination centers), or media (watching narrative engineering in real-time). The entry points may differ, but for anyone who has the capacity to keep going, the destination is the same: understanding that our world has been systematically fabricated, and searching for what's actually real.

Thinkers are emerging with solutions on multiple fronts. Catherine Austin Fitts, who has been documenting financial corruption and building sovereignty frameworks for decades, provides the master-level map of the financial terrain and the tools for navigating it. Her work at The Solari Report is a graduate course in building financial sovereignty. Jeffrey Tucker offers something complementary: a playbook for rethinking how to operate in modern life while maintaining the founding fathers' mentality toward freedom and self-reliance.

That solutions are emerging simultaneously across multiple fronts suggests we've reached a tipping point—the extraction systems have become visible enough that resistance frameworks are crystallizing organically.

His latest book, Spirits of America: On the Semiquincentennial, crystallizes this approach into a systematic framework. Drawing from Eric Sloane's forgotten wisdom in The Spirits of '76, Tucker has created what amounts to a survival manual for maintaining human agency in an extractive world.

Tucker's journey mirrors that of millions of us who've been peeling back the facade across every domain—from COVID policy to food systems to financial extraction. As founder of the Brownstone Institute, what began as libertarian opposition to lockdowns evolved into recognition that the fight spans the entire spectrum of human experience. His recent acknowledgment that covid vaccine injuries are 'wildly underestimated' exemplifies this awakening—moving from questioning individual policies to documenting systematic harm across institutions. As our collective Overton window shifts, more people are connecting dots across previously separate areas of concern.

This raises the inevitable question: once you see the scope of the problem, what do you do? While many of us might wish we were Amish (that ship has sailed for most of us), Tucker offers something more practical: how to live with founding fathers' principles in a world of smartphones and surveillance capitalism. He's not advocating retreat from modernity but showing how to navigate it without surrendering the character traits that made America's founders ungovernable.

Tucker's Pure Vision

What strikes me about this book is its purity and efficiency. When Jeffrey told me readers might think "anyone can write a book" after reading it, he wasn't being modest—he was identifying its power. In a world drowning in manufactured complexity, this 120-page work is as efficient as it is inspiring, cutting through the noise to reach essential truths.

The book's elegance lies not in sophisticated theory but in its radical simplicity. Tucker has identified the specific practices that make fiat systems powerless—not through retreat from modernity, but through applied philosophy for maintaining sovereignty within it.

The framework Tucker presents is remarkably simple—a few practices that make humans uncontrollable:

Long-time preference over instant gratification. In a world engineered for addiction to the immediate, the ability to delay gratification becomes revolutionary. When you can wait, you can't be rushed into bad decisions. When you can save, you can't be trapped in debt cycles. When you can plan decades ahead, you can't be manipulated by quarterly thinking. This isn't just financial advice—it's psychological warfare against systems designed to harvest your impulses.

Craftsmanship over disposable consumption. Real skill-building creates antifragility. The person who can fix, build, grow, or repair something valuable becomes harder to control. Craftsmanship builds the patience and attention span that surveillance capitalism deliberately erodes. It creates real value instead of renting access to other people's value. More importantly, it connects you to the satisfaction of completion in a world designed to keep you perpetually wanting.

Generational knowledge over credentialed expertise. Wisdom passed down through families and communities doesn't require institutional validation. It can't be revoked by authorities or updated by algorithm. Your grandmother's knowledge of food preservation doesn't come with subscription fees or terms of service. This knowledge exists outside their systems, making it both valuable and dangerous to those who profit from dependency.

Innate wisdom over external authority. The ability to trust your own judgment, read situations, and navigate by internal compass rather than external GPS—literally and metaphorically. This is what they fear most: people who don't need their systems to know what's true. Innate wisdom can't be monetized, can't be controlled, and can't be turned off with a software update.

The Antidote in Action

These aren't backward-looking practices—they're forward-building resistance to whatever extraction scheme comes next. Conscientiousness makes you resistant to financial manipulation. Craftsmanship makes you economically antifragile. Generational wisdom makes you culturally sovereign. Innate knowing makes you spiritually ungovernable.

What makes Tucker's approach powerful is that once you understand these principles—really understand them—the panopticon loses its hold. A person with genuine long-time preference can't be rushed into bad financial decisions. Someone with real craftsmanship skills can't be trapped in subscription dependency. People with generational wisdom don't need institutional validation. Those who trust their innate knowing don't need external authorities to tell them what's real.

The villain builds systems to harvest compliance. The hero builds character that makes those systems irrelevant.

Taking Power Back

They've looted us financially, psychologically, and spiritually—but only because we participated in systems designed to make resistance seem impossible. This is where the two approaches converge. The sovereign individual that Tucker describes—one with long-time preference and innate wisdom—is the only person capable of effectively implementing the systemic solutions that Fitts recommends. A system designed to atomize and weaken us can only be countered by powerful individuals who have rebuilt their own sovereignty from the ground up, ready to build new, decentralized systems.

The same surveillance platforms that condition compliance can be starved of the data they need. The same institutions that demand obedience can be ignored in favor of natural law. The same artificial systems that promise convenience can be replaced with real competence.

Tucker isn't trying to recreate the past. He's showing how eternal human values make you uncontrollable in any era—especially this one. His message is both simple and radical: the revolution against fiat everything starts with choosing real things over artificial things, one decision at a time.

The conditioning runs deep, but it's not permanent. Your DNA remembers what your mind was programmed to forget. The choice between fiat and real exists in every moment, and every real choice builds resistance to their next extraction scheme.

Every skill learned becomes a rebellion against their subscription economy. Every dollar saved becomes a rebellion against their debt system. Every real conversation becomes a rebellion against their isolation agenda. Every moment of deep focus becomes a rebellion against their attention-harvesting apparatus.

Because in the end, the real war is between what they can manufacture and what you can make real.

What real thing will you choose today?

Tyler Durden Wed, 08/20/2025 - 22:35

On July 23, 2025, IMCO's Jennifer Hartviksen, Managing Director and Head of Global Credit, joined ION Analytics for a fireside chat on shifts in the credit market. She discussed structural changes in lending, outlined key risks and opportunities and emphasized the importance of culture in IMCO’s partner selection process.

 This is a great discussion which I embedded below.

Jennifer goes over her background, working in Brazil, learning about credit investments there ("glass is half full" philosophy) then worked in Los Angleles before coming back to Canada to work at pension funds, Invesco and joining IMCO two months before the pandemic hit back in 2020 (Christian Hensley  hired her, he is no longer with the organization).

What attracted her to IMCO was the opportunity to build a credit strategy from scratch which "encompasses everything from philosophy, process and people."

Jennifer explains how in credit, the questions are always the same and fall in a couple of key buckets:

How are cash flows generated? Focusing always on cash flow generation, asset coverage, and the structuring of the credit papers itself, what are the protections being offered to the borrowers, be it covenants, possible equity upside, downside protections? Those are the questions I was asking then (in Brazil) and that I'm asking now. And understanding each of those dynamics in the context of how we are being compensated for those dynamics and that risk.

If you haven't figured it out yet, credit investors are very different animals than equity investors, it's all about protecting downside risk, delivering the highest possible risk-adjusted returns.  

They're not looking to shoot the lights out, they're looking to deliver consistent high single digit returns with an inflation protection as the rates are variable and adjust with inflation. 

Jennifer explains how they put together a credit strategy that looks across public and private credit and she explains how it’s the same team looking at all credit opportunities across the spectrum.

She states they're not pressured to put money at work in any one segment but where they see the best relative value. 

Their team is flexible and understands issuers who are looking for flexibility to work across public and private markets.

Anyway, take the time to listen to this interview, it's excellent and I'm glad IMCO posted it (interns take note, this is great stuff, I wish other pension funds posted interviews like this with their senior investment professionals).

I'm also bringing this up because Bloomberg came out with a story earlier today on how pensions funds missed the tech rally:

Some pension funds are waking up to a harsh reality: they’ve been left behind by the market’s hottest rally https://t.co/FzReDjFwFh

— Bloomberg (@business) August 20, 2025

Interestingly, Oaktree’s Howard Marks sees the early days of a bubble, akin to 1997, when there were several more years of gains before big losses. “This is a time to put a little more defense into your portfolio & investing in credit as opposed to equities is one way to do it”:

Oaktree’s Marks sees the early days of a bubble, akin to 1997, when there were several more years of gains before big losses. “This is a time to put a little more defense into your portfolio & investing in credit as opposed to equities is one way to do it” https://t.co/2htHueKXq0

— Lisa Abramowicz (@lisaabramowicz1) August 20, 2025

Of course, things are also frothy in credit markets:

Investment-grade credit spreads are the tightest since 1998, with investors accepting less and less extra yield over government rates as the year has gone on. (1/2) pic.twitter.com/arBZq81VDJ

— Lisa Abramowicz (@lisaabramowicz1) August 18, 2025

Whether or not we are in a bubble, my own perspective is pension funds learned a painful lesson back in 1999-2002 and in the 2008 GFC and none of them are willing to repeat those mistakes, chasing yield at any cost and then getting slammed hard when assets get clobbered and yields sink during a financial crisis (double whammy especially for pensions that manage assets and liabilities).

Nowadays, pension funds are more willing to miss the upside as long as they remain highly diversified across sectors, strategies, geographies, etc.

They might feel the pain of relative underperformance to the S&P 500 but their goal is to meet their future liabilities with the least possible volatility and that's their main focus.

That's another reason why credit investments have taken off at pension funds.

And at IMCO, like the rest of the big pension funds, they rely heavily on their strategic partners to gain the best exposures across public and private credit.

Alright, let me wrap it up there, please take the time to listen to this excellent interview with Jennifer Hartviksen, Managing Director and Head of Global Credit at IMCO.

Also, Oaktree Capital Management Co-Chairman Howard Marks says he finds stocks expensive “relative to what I call fundamentals, or you might call reality,” but says there’s no reason to think there’s a correction coming. He is joined by Bloomberg's Jonathan Ferro and Lisa Abramowicz on "Bloomberg Surveillance."

On July 23, 2025, IMCO's Jennifer Hartviksen, Managing Director and Head of Global Credit, joined ION Analytics for a fireside chat on shifts in the credit market. She discussed structural changes in lending, outlined key risks and opportunities and emphasized the importance of culture in IMCO’s partner selection process.

 This is a great discussion which I embedded below.

Jennifer goes over her background, working in Brazil, learning about credit investments there ("glass is half full" philosophy) then worked in Los Angleles before coming back to Canada to work at pension funds, Invesco and joining IMCO two months before the pandemic hit back in 2020 (Christian Hensley  hired her, he is no longer with the organization).

What attracted her to IMCO was the opportunity to build a credit strategy from scratch which "encompasses everything from philosophy, process and people."

Jennifer explains how in credit, the questions are always the same and fall in a couple of key buckets:

How are cash flows generated? Focusing always on cash flow generation, asset coverage, and the structuring of the credit papers itself, what are the protections being offered to the borrowers, be it covenants, possible equity upside, downside protections? Those are the questions I was asking then (in Brazil) and that I'm asking now. And understanding each of those dynamics in the context of how we are being compensated for those dynamics and that risk.

If you haven't figured it out yet, credit investors are very different animals than equity investors, it's all about protecting downside risk, delivering the highest possible risk-adjusted returns.  

They're not looking to shoot the lights out, they're looking to deliver consistent high single digit returns with an inflation protection as the rates are variable and adjust with inflation. 

Jennifer explains how they put together a credit strategy that looks across public and private credit and she explains how it’s the same team looking at all credit opportunities across the spectrum.

She states they're not pressured to put money at work in any one segment but where they see the best relative value. 

Their team is flexible and understands issuers who are looking for flexibility to work across public and private markets.

Anyway, take the time to listen to this interview, it's excellent and I'm glad IMCO posted it (interns take note, this is great stuff, I wish other pension funds posted interviews like this with their senior investment professionals).

I'm also bringing this up because Bloomberg came out with a story earlier today on how pensions funds missed the tech rally:

Some pension funds are waking up to a harsh reality: they’ve been left behind by the market’s hottest rally https://t.co/FzReDjFwFh

— Bloomberg (@business) August 20, 2025

Interestingly, Oaktree’s Howard Marks sees the early days of a bubble, akin to 1997, when there were several more years of gains before big losses. “This is a time to put a little more defense into your portfolio & investing in credit as opposed to equities is one way to do it”:

Oaktree’s Marks sees the early days of a bubble, akin to 1997, when there were several more years of gains before big losses. “This is a time to put a little more defense into your portfolio & investing in credit as opposed to equities is one way to do it” https://t.co/2htHueKXq0

— Lisa Abramowicz (@lisaabramowicz1) August 20, 2025

Of course, things are also frothy in credit markets:

Investment-grade credit spreads are the tightest since 1998, with investors accepting less and less extra yield over government rates as the year has gone on. (1/2) pic.twitter.com/arBZq81VDJ

— Lisa Abramowicz (@lisaabramowicz1) August 18, 2025

Whether or not we are in a bubble, my own perspective is pension funds learned a painful lesson back in 1999-2002 and in the 2008 GFC and none of them are willing to repeat those mistakes, chasing yield at any cost and then getting slammed hard when assets get clobbered and yields sink during a financial crisis (double whammy especially for pensions that manage assets and liabilities).

Nowadays, pension funds are more willing to miss the upside as long as they remain highly diversified across sectors, strategies, geographies, etc.

They might feel the pain of relative underperformance to the S&P 500 but their goal is to meet their future liabilities with the least possible volatility and that's their main focus.

That's another reason why credit investments have taken off at pension funds.

And at IMCO, like the rest of the big pension funds, they rely heavily on their strategic partners to gain the best exposures across public and private credit.

Alright, let me wrap it up there, please take the time to listen to this excellent interview with Jennifer Hartviksen, Managing Director and Head of Global Credit at IMCO.

Also, Oaktree Capital Management Co-Chairman Howard Marks says he finds stocks expensive “relative to what I call fundamentals, or you might call reality,” but says there’s no reason to think there’s a correction coming. He is joined by Bloomberg's Jonathan Ferro and Lisa Abramowicz on "Bloomberg Surveillance."

"First True Taste Of Fall": Might Need A Jacket Next Week

Hurricane Erin dominates today's weather headlines, bringing rough surf and tropical conditions from the Outer Banks to the Mid-Atlantic. Looking ahead, fall may arrive earlier -or at least the first taste - than expected as August winds down and kids head back to school.

"Abnormally strong trough expected to move through the Great Lakes as we go into next week... first time we have seen those bright anomaly colors show up on @SynopticWX in a minute!" private weather forecaster BAM Weather wrote on X, adding, "A true taste of fall on the way!" 

Abnormally strong trough expected to move through the Great Lakes as we go into next week... first time we have seen those bright anomaly colors show up on @SynopticWX in a minute!

A true taste of fall on the way! pic.twitter.com/4YNXLtPqVT

— BAM Weather (@bam_weather) August 20, 2025

For those residing in Washington, D.C. next week, average temperatures are forecast to fall well below the 30-year seasonal norm of around 75F. Models show average temps could dip into the low 60s by late next week.

Low temps are forecasted to be in the low 50s next week around the Capital Beltway. 

Related:

• NOAA Issues La Niña Watch For Northern Hemisphere
• Farmer's Almanac Unveils Long-Range Forecast: "Widespread Wintry Weather" For U.S.

Where did all the global warming go?

Tyler Durden Wed, 08/20/2025 - 22:10

Meta Freezes Hiring In AI Division

Weeks after reports that Meta was offering $100 million signing bonuses to poach OpenAI talent, it turns out the social media giant's chatbot ambitions aren't panning out so well - as the company has frozen hiring in its artificial intelligence division, according to the Wall Street Journal. 

The freeze, which began last week, is part of a broader restructuring within the AI group - and prohibits current AI division employees from moving across teams withing the division. Any exceptions to the freeze will have to go through the company's chief AI officer, Alexander Wang, according to people familiar with the matter. 

Meta confirmed the freeze, telling the Journal that this is nothing more than "basic organizational planning: creating a solid structure for our new superintelligence efforts after bringing people on board and undertaking yearly budgeting and planning exercises."

The recent restructuring inside Meta divides its AI efforts into four teams: one working on superintelligence, called TBD Lab, that houses many of the new hires; a second working on AI products; a third working on infrastructure; and a fourth dedicated to projects with a longer time horizon and more exploration, the people said. The latter, called Fundamental AI Research, remains largely untouched in the reorganization.

The four groups sit within the umbrella of Meta Superintelligence Labs, a name that reflects Chief Executive Mark Zuckerberg’s recent emphasis on building computer systems that can outperform the smartest humans on cognitive tasks. The Information previously reported some details of Meta’s AI reorganization. -WSJ

Meanwhile the company's auto-AI within Facebook posts seems to be dead wrong every time, and in fact the opposite of super intelligent. 

Seems like those nine-figure signing bonuses might have been a mistake... as several analysts have voiced concerns about aggressive investments in AI from leading tech firms - with some specifically pointing to Meta's 'fast-rising stock-based compensation costs' as something that could impact shareholder returns. 

Mounting concern from investors over the costs of the tech giants’ AI buildout has played a role in this week’s selloff of technology stocks. In an Aug. 18 research note, analysts at Morgan Stanley warned that the fast-rising stock-based compensation offered by Meta and Google to lure AI talent could threaten their ability to return capital to shareholders via buybacks. Lavish spending on talent, the analysts wrote, “has the potential to drive AI breakthroughs with massive value creation or could dilute shareholder value without any clear innovation gains.” -WSJ

Andy Stone, Meta's head of communications, accused the WSJ of not printing their full statement - which apparently renders the report a nothingburger and totally not damage control. 

Mundane because all that's happening is: a temporary pause on some hiring while we do planning and forecasting, which we do regularly, and a structure for our new superintelligence efforts, after we brought a number of new people on board.

— Andy Stone (@andymstone) August 21, 2025

Stone is of course, super credible after punishing vaccine skeptics and censoring the Hunter Biden laptop scandal.

all the credibility in the world, this guy pic.twitter.com/SmSx5sb0vE

— Barbarian Capital (@BarbarianCap) August 21, 2025

Meta ramped up internal focus on AI in April, after its large language models, known as Llama, were a giant disappointment vs. their competitors. As a result, the team responsible has been let go (or 'reorganized') as part of the latest move. Following this massive fail, CEO Mark Zuckerberg became personally involved in recruiting AI researchers - approaching several employees from OpenAI, Google DeepMind and other laps. He allegedly offered Thinking Machines Lab co-founder Andrew Tulloch as much as $1.5 billion, which Tulloch declined. 

Wang, mentioned above, was offered a $14 billion stake, while former GitHub CEO Nat Friedman and Safe Superintelligence co-founder Daniel Gross were also brought on. 

You mean more than a year later nothing has changed? https://t.co/wmKBlirinA pic.twitter.com/QJc9Kul0AY

— zerohedge (@zerohedge) August 20, 2025

As of last week, Meta has successfully hired more than 20 researchers and engineers from OpenAI, at least 13 from Google, three from Apple, and three from Elon Musk's xAI. In total, they've hired more than 50 new employees. 

In short...

There go the $100 million signing bonuses https://t.co/Zs3VFXTSVW

— zerohedge (@zerohedge) August 19, 2025

 

Tyler Durden Wed, 08/20/2025 - 21:45

Israel Calls Up 60,000 Reservists Ahead Of Gaza City Takeover

Israeli media is reporting that around 60,000 Israeli reservists are set to receive call-up orders on Wednesday as the Israel Defense Forces (IDF) gear up for a major assault on Gaza City.

A report in Times of Israel notes that reservists will have up to two weeks before going to their duty stations, but not all will be directly involved in the Gaza City offensive, as some are needed replace Israeli forces currently stationed in other parts of Gaza.

Anadolu Agency

The controversial Netanyahu-ordered expanded offensive which aims to achieve total control of Gaza City is expected to displace over a million Palestinian civilians.

The IDF is prepared to use artillery to forcibly remove them, and a ramped-up air campaign has already been underway. Arab media sources, including Al Jazeera, have said that areas with a lot of tent shelters for refugees have at times been directly struck.

Israel's military has issued evacuation orders, and is framing this as simply a mass transfer, while the Palestinian side along with international human rights monitors have decried an ethnic cleansing and land grab in progress.

Reports in Israeli media have further described that after capturing the city, the IDF plans to spend over a year systematically demolishing it, which is precisely what previously happened in Beit Hanoun, Beit Lahia, and Jabalia.

The ostensible justification is for removal of "Hamas infrastructure" - but critics have said it is ultimately to pave the way for Jewish settlement of the Gaza Strip.

The question remains, where will these Gazans go? Israel has been seeking to pressure some regional and even north African countries to take them in. 

To be expected, these conversations have gone nowhere especially as regional Arab states have already historically absorbed hundreds of thousands. For example, the majority of the population of Jordan actually has Palestinian roots.

Just life Rafah...

"Gaza, Gaza City itself, should look just like Rafah, which we turned into a pile of rubble."

Speaking on Channel 14, Israeli Energy Minister Eli Cohen of the Likud party called for the total destruction of Gaza City. pic.twitter.com/CNBbDhNXHS

— Middle East Eye (@MiddleEastEye) August 20, 2025

The Trump administration has meanwhile appeared to greenlight the takeover plans, in a break from Europe - which has grown much more critical of Israeli policy and loud over the last months.

Some EU states like Denmark are even mulling sanctions on Israel, and several major US allies are set to recognize the state of Palestine at the upcoming UN General Assembly meeting in September.

Tyler Durden Wed, 08/20/2025 - 21:20

​​​​​​​Rogue Leftist Group Creates Target List Of Trump-Linked Billionaires For Its Foot Soldiers   ​​​​​​​

Submitted by Forward Observer, 

The Department of Class Solidarity, an emerging left-wing activist group, launched a project to "audit" and track over 1,000 billionaires across the U.S. Their stated goal is not financial transparency, but political warfare: to document billionaire ties to President Trump, and then equip activists with the tools to, in their words, "defeat them."

The group recently published its first five audits, each featuring a high-profile billionaire with direct or indirect links to the Trump agenda. The names include some of the wealthiest and most influential figures in American business: Elon Musk, Palantir CEO Alex Karp, former Department of Government Efficiency (DOGE) official Antonio Gracias, Silicon Valley "supervillain" Peter Thiel, and Amazon's Jeff Bezos.

Each billionaire's profile is accompanied by a stylized "wanted poster," underscoring the group's framing of billionaires as political enemies.

A left wing group launched a project to "audit" over 1,000 U.S. billionaires for ties to the Trump administration. This project could be used to incite political violence against billionaires who support President Trump or the administration. Stay up to date with the Watchfloor… pic.twitter.com/JREGJolI5S

— Forward Observer (@fowatchfloor) August 20, 2025

Example of Elon Musk's ...

On its website, the Department of Class Solidarity describes itself as a kind of revolutionary intelligence hub for activists:

"The Department of Class Solidarity arms organizers, activists, and everyday people with the tools to expose the billionaires ransacking our democracy. Welcome to the war room of the working class."

Another section of the site highlights the scale of the project:

"There are nearly 1,000 billionaires in our United States. We're auditing every single one to arm the working class with the knowledge we need to defeat them."

The campaign is already building toward action. Organizers are promoting a "People vs. Billionaires Week of Action" scheduled for 21–27 August, leading into a Labor Day National Day of Action on Monday, 01 September.

While only 15 events are currently scheduled, the group is clearly attempting to establish a long-term campaign that will target wealthy elites, tie them to the Trump agenda, and generate social pressure against their businesses and political activities.

Why It Matters

This effort is not occurring in isolation. It fits into the broader strategy of the anti-Trump resistance movement, which has adopted an escalation model that runs from Protest → Resistance → Revolution. The goal is to erode Trump's legitimacy and disrupt his ability to govern by attacking the pillars of his support.

According to this framework, there are six key pillars that sustain political authority: business, labor, faith, education, civil service, and military/police. One of the most critical of these is the business class.

By targeting billionaires who are viewed as sympathetic to, or supportive of, the Trump administration, activists are seeking to coerce defections from the business elite. The idea is simple: if billionaires fear reputational damage, sustained protests, boycotts, and disruption of their business operations, they will withdraw financial or political support for Trump and his policies.

Examples of this strategy are already visible. Activists point to the "Tesla Takedown" protests as proof of concept. At their height, those protests were credited with wiping out roughly $100 billion of Elon Musk's net worth. Tesla's board even cited activist pressure as a major factor in revenue declines, which in turn constrained Musk's political maneuvering and discouraged his direct involvement at the White House. That outcome has become a model for future campaigns.

In practice, these pressure campaigns should manifest in several ways:

• Social pressure campaigns to brand billionaires as enemies of democracy

• Boycotts of consumer-facing companies tied to Trump-friendly executives, or business with the administration

• Disruption of business operations through protests, shareholder activism, and media campaigns

While the Department of Class Solidarity, Indivisible (No Kings / May Day Strong), 505051, and other organizations publicly encourage nonviolent tactics, the imagery associated with its campaign -- particularly the "wanted poster" format -- could incite harassment or violence against targeted individuals or their families.

One such example was Indivisible's use of an image depicting a Tesla Cybertruck on fire during their "Takedown Tesla" protest campaign. The use of the image coincided, if not contributed to, numerous arson attacks and vandalism against Tesla vehicles and showrooms. Indivisible eventually removed those images from its website.

For now, the Department of Class Solidarity is a small player -- their "week of action" has just 16 protests scheduled -- but their tactics highlight a vulnerability for companies that do business with the Department of Homeland Security, Immigration and Customs Enforcement, or any number of departments or agencies left wing activists consider the "enemy of democracy."

*   *   *  

Mike Shelby is a former Intelligence NCO and contractor with multiple deployments to Iraq and Afghanistan. In 2016, he founded Forward Observer, a private intelligence firm that focuses on domestic and international conflict. His team writes a daily Early Warning intelligence briefing, which is available through https://forwardobserver.com.

Tyler Durden Wed, 08/20/2025 - 20:55

Court Upholds Nearly $1 Million Fine Against Restaurant That Ignored Pandemic Indoor Dining Ban

A Washington state restaurant that ignored a 2020 state COVID-19 pandemic order must pay a fine of $936,000 - $18,000 per day, for each day it remained in operation while the state's emergency order banning indoor dining was in place, an appeals court has ruled.

Washington state Gov. Jay Inslee speaks to reporters in Seattle on March 16, 2020. Elaine Thompson/Pool/Getty Images

The ban, imposed in late 2020 by Washington Gov. Jay Inslee (D), went into effect following a jump in cases and hospitalizations (unaudited!). In response, the owners of Stuffy's II restaurant, Bud and Glenda Duling, ignored the order - resulting in the financial punishment. 

The fine was levied by the Washington State Department of Labor and Industries - which the Dulings say they cannot pay. Meanwhile, the Board of Industrial Insurance Appeals did not have their back, refusing to weigh in after saying they don't have the authority to deal with constitutional matters. A superior court judge upheld the decision.

Despite providing tax returns showing that it operated at a loss in 2020 and received a PPP loan, the court ruled that the Dulings have not provided evidence that their company cannot pay the fines.

"Duling has not demonstrated that it is unable to pay the fine or that the fine is excessive," Judge Rebecca Glasgow wrote for the unanimous panel of the U.S. Court of Appeals of the State of Washington judges that considered the case. "There is nothing in the record about what savings or assets Duling had," Glasow continued, adding "Duling had ample opportunities to provide additional documentation and deposition testimony to support its contention that it was unable to pay the fine, and it did not do so."

In a Dec. 5, 2020 Facebook post, the Dulings said they had made the decision to resume indoor dining. 

"It has come down to the point where we shut our doors after today and call it quits after 32 years of proudly serving the community, or we fight," they wrote. "We have made the decision over closing that we are fighting. If we go down, at least our employees will be able to have a better chance at having a better holiday season! This is not just about us as the owners struggling; this is about our Stuffy’s family."

Tyler Durden Wed, 08/20/2025 - 20:30