Pricing In 'Recession Fear' - Goldman Says It's Harder To Find New Macro Tailwinds

Goldman Sachs' view in recent months has been that the market could probably continue to climb the “wall of worry”.

However, their baseline forecast is still quite benign - with growth recovering in 2026 and the Fed pushing the policy rate steadily lower in the coming months.

There are pockets of frothiness across assets and the spot VIX is close to the lowest levels of the year.

But, as Goldman's Dominic Wilson highlights below, 3-month VIX futures remain above 20 and the high spread to spot VIX suggests that there may still be risk premium to squeeze out in places if we simply avoid new problems.

The VIX is approaching the year's lows, but VIX futures have been stickier, implying lingering risk premium

Source: Goldman Sachs

As the market has taken more credit for good news, however, it is getting harder to identify clear new macro tailwinds.

We think growth pricing has largely taken credit for the nearly 2% GDP growth we see through 2026 and beyond.

And while we thought the more likely macro tailwind for US equities would come from a dovish policy shift, the market has now moved in that direction too.

The big macro risk is if there is a challenge to the process of looking through spot weakness that makes the market worry more about recession risk.

Markets were quick to move from worrying about growth to welcoming Fed easing on the back of payrolls weakness.

But clearer upward pressure on the unemployment rate would likely pose a bigger challenge to equities, particularly given current pricing.

If that move coincides with higher-than-expected inflation outcomes, concerns about a constrained Fed would be an even bigger challenge.

The good news is that short-dated equity hedges and downside in front-end rates are cheaper than they have been for some time, so we continue to think hedging that recession risk into key events makes sens

Professional subscribers can read Dominic Wilson's full detailed note here...

Tyler Durden Tue, 08/19/2025 - 14:40

 – by New Deal democrat The post pandemic period has been an exception to many past relationships. This morning’s data on housing construction raises the issue as to whether housing is going to be included in those exceptions as well. That’s because the data has been classically recessionary for a number of months, and yet the […]

The post Housing remains recessionary. Why hasn’t one happened yet? appeared first on Angry Bear.

Justice Delayed: New York Appellate Court Reportedly Split Over Trump Civil Fraud Judgment

Authored by Jonathan Turley,

Some of us have expressed frustration with the ridiculous delay in the appellate court review of the absurd civil judgment against Donald Trump.

It appears to have entered some judicial black hole where neither light nor an opinion can escape.

Now, the Wall Street Journal claims that it is due to a deeply divided panel in a column titled “Court Split Leaves Trump’s Civil Fraud Appeal Stuck in Slow Lane.”

This should not be a close case and certainly should not take this long.

The case against Trump was raw lawfare, and the entire trial by Justice Arthur Engoron made a mockery of the court system, particularly his ridiculous half-a-billion-dollar judgment. 

Yet, weeks turned into months and then into years as the appellate court seemed lost in navel-gazing. There was also a concern over passive-aggressive delays; the long appeal is not only preventing Trump from moving this case toward the Supreme Court but keeps him trapped in an appellate amber.

Now the Wall Street Journal is reporting:

A five-justice panel has yet to render a decision nearly a year after taking up the case, leaving him and his business in limbo. Behind the scenes, members of the panel have been divided, and three of them have been writing opinions, according to people familiar with the matter. It couldn’t be determined how they are split. Justices do occasionally shift their positions, and the number of opinions could change, the people said.

…

The panel hearing the Trump appeal includes four judges appointed by Democratic governors and one Republican appointee, David Friedman, who is regarded as among the most conservative of the court’s 21 members. The court’s presiding justice, Renwick, also on the panel, is viewed as a stalwart liberal who has an institutional interest in seeking consensus and guarding the court’s reputation.

It is not a good thing to see a leak of this kind from any court. The United States Supreme Court was rocked by the leaking of a draft opinion of the Dobbs decision just a few years ago. No one was ever prosecuted for the leak.

It is distressing to hear that some of these judges may be striving to preserve this nonsensical opinion where Trump was hit with half a billion dollars in a case where no one lost money and the banks wanted renewed business with his company. Affirming the decision would be the final nail in the coffin for the New York legal system, which was turned into a farce by New York Attorney General Letitia James and Judge Engoron. 

Even if it is true that the judges have hopelessly fractured, they could do us all a favor and allow the case to proceed toward more competent jurists and final resolution. 

There is certainly no rush by these appellate judges to right any wrong done to Trump, who appears, again, to fall into a special category of persona non grata in the New York legal system. This appellate panel appears content to leave Trump twisting in the wind as it contemplates what to do with a defendant who garners little sympathy from its members. 

Most appeals are measured in months; this seems measured in millennia. Even with the notoriously slow New York legal system, the pendency of this appeal is becoming itself a controversy.

It is often said that justice delayed is justice denied.

However, delayed and denied justice for Trump appears to be a bedrock principle of the New York justice system.

Tyler Durden Tue, 08/19/2025 - 14:20

As ordered reported by the House Committee on Natural Resources on June 25, 2025

As ordered reported by the House Committee on Science, Space, and Technology on June 11, 2025

As ordered reported by the House Committee on Natural Resources on July 15, 2025

DOJ To Start Producing Epstein Files To Congress

Via Headline USA,

The Justice Department has agreed to provide to Congress documents from the Jeffrey Epstein sex trafficking investigation, a key House lawmaker said Monday in announcing a move that appears to avert, at least temporarily, a potential separation of powers clash.

The records are to be turned over starting Friday to the House Oversight Committee, which earlier this month issued a broad subpoena to the Justice Department about a criminal case that has long captivated public attention, recently roiled the top rungs of President Donald Trump’s administration and been a consistent magnet for conspiracy theories.

“There are many records in DOJ’s custody, and it will take the Department time to produce all the records and ensure the identification of victims and any child sexual abuse material are redacted,” Kentucky Rep. James Comer, the Republican committee chair, said in a statement.

“I appreciate the Trump Administration’s commitment to transparency and efforts to provide the American people with information about this matter."

A wealthy and well-connected financier, Epstein was found dead in his New York jail cell weeks after his 2019 arrest in what investigators ruled a suicide. His accomplice, Ghislaine Maxwell, was convicted in 2021 of helping lure teenage girls to be sexually abused by Epstein and is serving a 20-year prison sentence.

The House committee’s subpoena sought all documents and communications from the case files of Epstein and Maxwell.

It also demanded records about communications between Democratic President Joe Biden’s administration and the Justice Department regarding Epstein, as well as documents related to an earlier federal investigation into Epstein in Florida that resulted in a non-prosecution agreement.

It was not clear exactly which or how many documents might be produced or whether the cooperation with Congress reflected a broader change in posture since last month, when the FBI and Justice Department abruptly announced that they would not be releasing any additional records from the Epstein investigation after determining that no “further disclosure would be appropriate or warranted.”

That announcement put the Trump administration on the defensive, with officials since then scrambling both to tamp down angry questions from the president’s base and also laboring to appear transparent.

Deputy Attorney General Todd Blanche interviewed Maxwell at a Florida courthouse over two days last month — though no records from those conversations have been made public — and the Justice Department has also sought to unseal grand jury transcripts in the Epstein and Maxwell cases, though so far those requests have been denied.

A Justice Department spokesperson declined to comment Monday.

The House Oversight panel separately issued subpoenas to eight former law enforcement leaders as well as former Democratic President Bill Clinton and former Secretary of State Hillary Clinton.

Bill Clinton was among a number of luminaries acquainted with Epstein before the criminal investigation against him in Florida became public two decades ago.

Tyler Durden Tue, 08/19/2025 - 13:40

Since the secretary of HHS is a vaccine denialist who cannot be trusted, the American Academy of Pediatrics has this week published its own authoritative, comprehensive, science-based vaccine schedule for children and adolescents from birth to age 18. The link provides: – the schedule for routine immunizations from birth to 18 years of age; – […]

The post The AAP childhood vaccine schedule appeared first on Angry Bear.

President Trump Addresses Backfiring Green Policies Sparking Mid-Atlantic Power Bill Crisis 

President Trump weighed in on the Mid-Atlantic power crisis on Truth Social early Tuesday, echoing our warnings last week about the fallout from Democrats' multi-year "green" crusade to replace reliable, low-cost fossil fuel power plants with unreliable solar and wind amid power demand surges from AI data centers and other electrification trends. The result has been financially crushing for some residents across the Mid-Atlantic. In Maryland, Democrats' approval ratings are already tanking.

"STUPID AND UGLY WINDMILLS ARE KILLING NEW JERSEY," President Trump wrote on Truth Social moments ago. 

He continued, "Energy prices up 28% this year, and not enough electricity to take care of state. STOP THE WINDMILLS!"

Trump's use of Truth Social to address the unfolding power bill crisis in the Mid-Atlantic comes after our year-long reporting (read) on the emerging crisis, which has been amplified nationally in recent weeks...

The Trump administration needs to address the power bill crisis by showing voters in both states that a common denominator of destructive policies is driving the crisis: A disastrous green energy agenda, pushed by radical leftist lawmakers, is dismantling reliable and affordable fossil fuel power generation in favor of unstable solar and wind. This has unleashed a power bill armageddon on working-class and middle-class households, as well as mom-and-pop businesses, all while baseload power demand surges in the era of AI data centers.

Fox News jumped on the power bill crisis story last week...

You don't say... https://t.co/iX4l8J6otj pic.twitter.com/M620Jd7Pog

— zerohedge (@zerohedge) August 14, 2025

Perhaps New Jersey Gov. Phil Murphy's decision to shutter the state's nuclear and coal plants, without a one-to-one replacement for lost capacity on the grid, was a catastrophic error. His administration's prioritization of offshore wind farms and other green energy projects has left the grid more fragile than ever. 

Murphy took six power plants offline and invested a billion dollars in chasing his offshore wind dream. Mikie enabled the obsessions of climate activists by voting in favor of the trillion dollar green new scam (aka, inflation reduction act). Instead of investing in existing… https://t.co/6MXgSHbT60 pic.twitter.com/ka2EfhB9W6

— Protect Our Coast NJ (@njcoast_protect) July 29, 2025

In Maryland, the power bill crisis seems much more severe than in New Jersey!

Failed green policies are crushing the very working poor and middle class that Democrats have promised to protect. Yet the green utopia that was pitched was always a lie.  

According to Change Annapolis, a bipartisan group of taxpayers, Maryland Gov. Wes Moore's ratings plunged over a multitude of issues, including power bills: "Marylanders are tired of his presidential vanity tour, crushing tax hikes, and an energy crisis of his own making," adding, "He's polling worse than O'Malley and Glendening at this point in their terms."

The power bill crisis is still in its early stages. Goldman analyst Hongcen Wei wrote an alarming note to clients last week, warning that a majority of U.S. power grids "have already reached dangerously low spare capacity levels that are at or below the critical reliability threshold. This raises blackout threats and results in power price spikes during high-demand usage hours."

In other words, the power crisis has arrived, and it's only going to get worse from here. The Trump administration needs to effectively communicate to voters that skyrocketing power bills are the direct result of failed green policies in the age of AI data centers.

We've got bad news... read this. 

Tyler Durden Tue, 08/19/2025 - 13:20

This short YouTube will eat up less than five minutes of your time. I believe Robert is mostly correct in his regard for our current president and a failed Republican party which appears to be bought, sealed, and delivered to do his bidding. The same as in the sixties and seventies, the answer to this […]

The post Robert Reich Talking Politics appeared first on Angry Bear.

This is something I check occasionally.

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by +1.5% (+4.1 billion vehicle miles) for April 2025 as compared with April 2024. Travel for the month is estimated to be 277.3 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for April 2025 is 277.0 billion miles, a +1.3% ( 3.6 billion vehicle miles) change over April 2024. It also represents a 0.3% change (0.8 billion vehicle miles) compared with March 2025.

Cumulative Travel for 2025 changed by +0.8% (+8.3 billion vehicle miles). The cumulative estimate for the year is 1,043.5 billion vehicle miles of travel.
emphasis added

Click on graph for larger image.

This graph shows the monthly total vehicle miles driven, seasonally adjusted.

Miles driven declined sharply in March 2020, and really collapsed in April 2020.  
Miles driven are now slightly below pre-pandemic levels.

Europe To Spend $100BN It Doesn't Have, To Buy Weapons America Doesn't Have, To Arm Soldiers Ukraine Now Lacks

Part of Zelensky's motive for wearing a suit Monday to the White House has become clearer with fresh reporting in the Financial Times, which reviewed a document showing Ukraine will promise to buy $100 billion of American weapons financed by Europe in a bid to obtain robust US security guarantees.

Additionally, "Under the proposals, Kyiv and Washington would also strike a $50bn deal to produce drones with Ukrainian companies that have pioneered the technology since Russia’s full-scale invasion in 2022," the report continues. Ukraine pitched its plan during the Monday White House summit, which also involved seven EU leaders - and the $100BN arms deal became part of the key talking points pushed by the European allies.

Getty Images

This is an effort by design meant to ensure Ukraine can procure what it wants - and that its war efforts can still be funded uninterrupted - while still ultimately appeasing Trump. "We’re not giving anything. We’re selling weapons," Trump had said Monday in response to a reporter's question on the matter.

It remains very obvious that Europe's demands of keeping up huge pressure on Russia, including through sanctions, are intended to stymie any US-backed deal seen as too favorable to Moscow. The FT report comments on this as follows:

The document details how Ukraine intends to make a counter-pitch to the US after Trump appeared to align himself with Russia’s position for ending the war following his meeting with President Vladimir Putin in Alaska last week.

It reiterates Ukraine's call for a ceasefire that Trump had espoused but then dropped after his Putin meeting in favor of the pursuit of a comprehensive peace settlement.

Geopolitical analyst and commentator Glenn Diesen has pointed out, however, that Kiev is essentially attempting to create leverage out of nothing.

"Europe will spend $100 billion it does not have, to buy weapons from America that it does not have, to arm soldiers that Ukraine now lacks," he wrote, explaining further: "This is to confront Russia, which for 30 years warned it would respond to NATO militarizing its borders."

Diesen followed by doing something that Washington policy-makers refuse to do, and that is look at the big picture of how we got here [emphasis ZH]:

There was no threat to Ukraine before 2014, as only a tiny minority of Ukrainians wanted to join NATO, and Russia laid no claim to any of Ukraine's territory. Western governments then supported a coup to pull Ukraine into NATO's orbit - something that CIA Directors, Ambassadors, and Western state leaders had warned would instigate a security competition and likely trigger a war.

Russia predictably reacted fiercely. Ever since then, the only acceptable narrative has been that Russia wants to restore the Soviet Union and that Putin is Hitler. Any dissent is labelled as "disinformation", "propaganda", "hybrid warfare", or even treason.

The war has now been lost, and the Americans are pulling away from it, asking the Europeans to absorb the consequences. How do the Europeans respond? By doubling down on this madness, which will destroy Ukraine, our economies, and our relevance in the world - and possibly trigger a nuclear war. - What is the strategy? More of the same? The best thing for Ukraine is to remove it from the frontlines of the geopolitical struggle over where to draw the new dividing lines in Europe: End the war, rebuild Ukraine, and replace expansionist military blocs with the principle of indivisible security.

Arestovych throws up his arms, says Russia was right all along about Ukraine neutrality:

In conclusion, the fundamental challenge for Ukraine lies not in tactical maneuvers but in recognizing the strategic perspective: the necessity of reimagining its role as a neutral,… https://t.co/ZyKFLoXlfc

— Chebureki Man (@CheburekiMan) August 19, 2025

This week, as negotiations proceed and Europe keeps up its drive to pile more and more pressure on Putin, the big question will be whether the Western side can indeed understand that it has lost the proxy war.

Many immense hurdles remain, and one could also point out there are too many cooks in the kitchen (judging by the over a half-dozen European leaders present in the Oval yesterday), making things all the more unnecessarily complicated - and that's probably by design.

* * * 

Glenn Greenwald agrees with this bleak assessment of Europe's role in thwarting peace...

DC foreign policy elites now know that Ukraine cannot win, but they would rather continue fueling a fruitless and deadly war than admit they were wrong and delusional about Ukraine's prospects against Russia. @ggreenwald on the Ukraine war: pic.twitter.com/tUyLtjGG8V

— System Update (@SystemUpdate_) August 19, 2025

Tyler Durden Tue, 08/19/2025 - 12:00

Home Depot Misses Across The Board But Stock Jumps On Sticky Guidance

Home Depot's sales improved during its fiscal second quarter as consumers remained focused on smaller projects amid cost concerns and economic uncertainty, but its performance missed Wall Street's expectations.

Revenue for the three months ended August 3 climbed to $45.28 billion from $43.18 billion, but fell short of the $45.41 billion estimated by about 30bps. Gross margins beta by 20 bps and operating margins were largely in-line. Comp store sales rose 1%, also missing the 1.3% estimate. In the U.S., comp store sales increased 1.4%. According to Goldman, "comp sales were about 30 bps light and exactly what almost all previews and inbounds suggested."  While customer transactions declined ~1% in the quarter, the amount shoppers spent rose to $90.01 per average receipt from $88.90 in the prior-year period.

Q2 EPS of $4.68 also missed consensus $4.72. The company earned $4.55 billion, or $4.58 per share, for the second quarter. A year ago, the Atlanta-based company earned $4.56 billion, or $4.60 per share.

Here is a snapshot of Goldman's first take analysis (full note available to pro subs):

• Average ticket increased +1.2% y/y to $90.0 from $88.9 in the prior year, while

• Total customer transactions decreased -0.9% y/y to $446.8mn from $451.0mn in the prior year. Management noted that trends that began in the 2H of last year continued through the 1H of this year as customers engaged more broadly in smaller home improvement projects.

• Gross margin increased +2 bps y/y to 33.4%, above GS/consensus estimates of 33.2%/33.3%.

• Total operating expenses increased +8.2% y/y to $8.4bn, while total operating expenses as a % of sales increased +57 bps y/y to 18.6%.

• Adjusted operating margin decreased -56 bps y/y to 14.8%, below thenGS/consensus estimates of 15.1%/14.9%, and adjusted operating profit of $6.7bn compares to $6.6bn in the prior year (+1.1%).

• Inventory increased +7.7% y/y (vs. +14.9% in 1Q) which we note compares to the sales increase of 4.9%. The company’s payable ratio of 52.7% increased

And here is a snapshot of the company results vs Goldman estimates:

“Our second quarter results were in line with our expectations," Chair and CEO Ted Decker said in a statement. "The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects.”

The print was in line with buyside whisper expectations of a small miss, with Goldman writing that the direction of the stock today likely won’t be too heavily influenced by this exact result, which does not feel like thesis changing.

More importantly, the company reaffirmed full year guidance, with commentary on the call about improved trajectory to end the quarter after some weather headwinds earlier in the quarter: The company reaffirmed its fiscal 2025 forecast for total sales growth of about 2.8%. It still expects adjusted earnings to decline about 2% from $15.24 per share a year earlier, although it cited momentum continuing that started to build in 2H prior year.

Neil Saunders, managing director of GlobalData, said that Home Depot saw consumers concentrating on smaller projects and gardening during the quarter: “As the largest improvement player, Home Depot is getting the lion’s share of this growth and remains the number one destination for consumers due to strong customer service, a comprehensive range, and sharp pricing,” he said. “The latter factor will serve it well as consumers become more price conscious.”

Home improvement retailers like Home Depot have been dealing with homeowners putting off bigger projects because of increased borrowing costs and lingering concerns about inflation. 

The US housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. Sales of existing homes have slumped as elevated mortgage rates and rising prices discourage home shoppers.  Sales of such homes in the U.S. slid in June to the slowest pace since last September as mortgage rates remained high and the national median sales price climbed to an all-time high of $435,300.

After initially sliding as much as 5%, Home Depot stock eventually surged over 4% in early Tuesday trading and was responsible for about half of all the DJIA gains.

Tyler Durden Tue, 08/19/2025 - 11:20

U.S. East Coast On Alert As Powerful Hurricane Erin Approaches

The U.S. East Coast dodged a massive bullet this week as powerful Category 3 Hurricane Erin passed near the Bahamas on Tuesday morning. Instead of making landfall, Erin is expected to unleash rough surf from Central Florida to Canada before curving out into the western Atlantic later this week. This has certaintly brought excitement for East Coast surfers. 

At 0500 ET, Erin was approximately 700 miles southwest of Bermuda and 750 miles south-southeast of Cape Hatteras. 

"Erin forecast to substantially grow in size while moving over the western Atlantic through the week," National Hurricane Center Meteorologist Robbie Berg wrote in a note, warning, "Dangerous rip currents expected along U.S. East Coast beaches." 

Tropical storm and storm surge watches have been issued for the Outer Banks of North Carolina all the way up to the Mid-Atlantic states. 

Local media outlets reported that evacuations are underway in the Outer Banks area as the storm approaches. 

Here's the latest forecast track (East Coast dodged a bullet):

The most active part of the Atlantic Hurricane season has arrived after a relatively quiet first half. 

. . .

Tyler Durden Tue, 08/19/2025 - 11:00

CBO provides an overview of the main components of greenhouse gas emissions from agriculture, recent trends in those emissions, and projections of future emissions.

Small Business Lending Faces Mixed Signals Amid Economic Shifts

Authored by Andrew Moran via The Epoch Times (emphasis ours),

Small businesses in the United States encountered growing challenges accessing credit in June, according to Equifax’s latest small-business lending index.

People walk past small businesses in Doylestown, Pa., on Nov. 4, 2021. Matt Rourke/AP Photo

Lending volumes fell by 3.3 percent month over month, although they remained up by more than 2 percent from the same period in 2024, according to the report released on Aug. 18.

The index’s three-month moving average jumped to 1 percent, fueled by robust lending activity volumes in April that have since eroded.

Regionally, 23 states experienced year-over-year declines in 12-month rolling lending volumes, with California (minus 10 percent), Nevada (minus 9 percent), and Georgia (minus 6 percent) leading the decline.

Across industries, nominal (noninflation-adjusted) lending decreased in six of the 17 sectors tracked. Accommodation and food services experienced the sharpest decline, while construction, finance and insurance, and retail lending remained stable.

Credit conditions showed signs of stabilization in the wake of President Donald Trump’s tariff agenda, the report reads.

The small-business delinquency index (31 to 90 days past due) edged up by nearly 2 percent, or three basis points, from May. The index was little changed from June 2024.

Additionally, the default index fell by more than 3 percent, down by seven basis points month over month.

Despite national improvements, 34 states reported year-over-year increases in default rates. Maine stood out with a 35 percent spike, the highest in the country. Delinquency rates rose or held steady in five industries, with wholesale trade posting the largest monthly increase of 2 percent.

In the coming months, a boost to small-business lending is expected to unfold in the third and fourth quarters.

Wall Street overwhelmingly anticipates that the Federal Reserve will lower interest rates beginning in September. The Fed’s periodic Summary of Economic Projections—a survey of policymakers’ expectations for the economy and interest rates in the future—points to two rate cuts this year.

The federal funds rate—a key policy rate that influences business, consumer, and government borrowing costs—has been unchanged in a target range of 4.25 percent to 4.5 percent since January.

However, although a rate cut is considered a boon for the credit industry, the report states that easing monetary policy could “exacerbate inflationary pressures.”

Last week, the annual inflation rate for July came in at 2.7 percent for the second straight month, lower than the market’s estimate of 2.8 percent. However, key pipeline inflation indicators—the producer price index and import prices—topped economists’ expectations, signaling that the current administration’s trade agenda could be igniting renewed price pressures.

The U.S. central bank will host its annual Jackson Hole Economic Symposium from Aug. 21 to Aug. 23, with Fed Chairman Jerome Powell delivering the keynote address on Aug. 22.

Lenders Signal Optimism

Despite the slowdown in small-business lending, a recent industry survey suggests that lenders remain optimistic, citing improved business conditions.

The Federal Reserve in Washington on July 21, 2025. Madalina Kilroy/The Epoch Times

According to the American Financial Services Association’s latest consumer credit conditions index for the second quarter, shared with The Epoch Times, the business environment was positive on balance.

In the April–June period, the net increasing index—a measure spotlighting the difference between the percentage of lenders who said loan performance conditions got better and those who said they got worse—reached the highest level in the survey’s six-quarter history.

In addition, 26 percent more respondents reported that funding costs improved in the second quarter than those who said they worsened. Meanwhile, 18 percent reported an improvement in the performance of their outstanding loans, compared with those who said it worsened.

Despite broad-based improvements, more auto lenders reported that business conditions weakened in the second quarter than those who reported improvements. Auto lenders also anticipate weaker overall conditions over the next six months.

Caution Ahead

Demand for loans from commercial and industrial companies has weakened, according to the New York Fed’s Senior Loan Officer Opinion Survey on bank lending. Banks, according to the report, also found weaker demand for credit and other loans from consumers.

Despite slowing credit demand, the findings indicated that credit supply through banking lending standards had not tightened significantly.

Bipan Rai, managing director at BMO, said that ultimately, the latest figures reveal both the good and the bad.

“Empirically, we know that a deterioration in the credit cycle is consistent with a general slowing of the real economy,” Rai said in an Aug. 11 note.

“A silver lining in the [Senior Loan Officer Opinion Survey] release is that credit supply ... has not tightened materially. Typically, a slowing in the credit cycle would be more concerning if falling demand came as a result of tighter lending standards.”

Although the trade situation has stabilized since the April peak of uncertainty, businesses and consumers are seeking greater policy clarity, a recent survey highlighted.

The American Bankers Association’s latest credit conditions index—a quarterly outlook for credit markets—declined for the second consecutive quarter. The headline reading came in at 32.1—anything lower indicates expected deterioration—and the index fell to 35.7 for businesses and 28.6 for consumers.

Trade negotiations and passage of the One Big Beautiful Bill Act have offered some reassurance, but tariff-related uncertainty is still a headwind for credit conditions and the broader economy, according to Sayee Srinivasan, the association’s chief economist.

“'Hard data’ suggest the economy remains on solid footing, but consumer and business sentiment indicate that policy uncertainty remains elevated and is causing some firms and households to adopt a cautious approach to hiring, spending and investment,” Srinivasan said in the report.

The White House recently imposed higher reciprocal tariffs, ranging from 10 percent to 50 percent, on almost 70 U.S. trading partners. The president is expected to announce tariffs on imports of chips, semiconductors, and pharmaceuticals soon.

Still, small-business optimism has improved and is above the National Federation of Independent Business’s long-term average.

Bill Dunkelberg, the group’s chief economist, said that uncertainty persists but business owners are “reporting more positive expectations on business conditions and expansion opportunities.”

Tyler Durden Tue, 08/19/2025 - 10:40

Nvidia Is Developing New AI Chip For China That Outperforms H20

Having recently agreed on a China "revenue-share" deal with the Trump admin, the world's leader in chatbot chip production, Nvidia, is developing a new AI chip especially for China based on its latest Blackwell architecture that will be more powerful than the H20 model it is currently allowed to sell there, Reuters reported citing sources. 

The new chip, tentatively known as the B30A, will use a single-die design that is likely to deliver half the raw computing power of the more sophisticated dual-die configuration in Nvidia's flagship B300 accelerator card, the sources said.
A single-die design is when all the main parts of an integrated circuit are made on one continuous piece of silicon rather than split across multiple dies.

The new chip would have high-bandwidth memory and Nvidia's NVLink technology for fast data transmission between processors, features that are also in the H20 - a chip based on the company's older Hopper architecture. While the chip's specifications are not completely finalized Nvidia hopes to deliver samples to Chinese clients for testing as early as next month.

Last week Trump opened the door to the possibility of more advanced Nvidia chips being sold in China. But the sources noted U.S. regulatory approval is far from guaranteed amid deep-seated fears in Washington about giving China too much access to U.S. artificial intelligence technology.

When reached by Reuters, Nvidia said in a statement: "We evaluate a variety of products for our roadmap, so that we can be prepared to compete to the extent that governments allow."

"Everything we offer is with the full approval of the applicable authorities and designed solely for beneficial commercial use," it said.

The extent to which China, which generated 13% of Nvidia's revenue in the past financial year, can have access to cutting-edge AI chips is one of the biggest flashpoints in U.S.-Sino trade tensions. Nvidia only received permission in July to recommence sales of the H20. It was developed specifically for China after export restrictions were put in place in 2023, but company was abruptly ordered to stop sales in April.

Last week Trump said he might allow Nvidia to sell a scaled-down version of its next-generation chip in China after announcing an unprecedented deal that will see Nvidia and rival give the U.S. government 15% of revenue from sales of some advanced chips in China.

A new Nvidia chip for China might have "30% to 50% off", he suggested in an apparent reference to the chip's computing power, adding that the H20 was "obsolete".

US legislators have worried that access to even scaled-down versions of flagship AI chips will impede U.S. efforts to maintain its lead in artificial intelligence. But Nvidia and others argue that it is important to retain Chinese interest in its chips - which work with Nvidia's software tools - so that developers do not completely switch over to offerings from rivals like Huawei.

Huawei has made great strides in chip development, with its latest models said to be on par with Nvidia in some aspects like computing power, though analysts say it lags in key areas such as software ecosystem support and memory bandwidth capabilities. That said, last week China's AI leader DeepSeek was forced to revert to Nvidia for its R2 model after Huawei's AI chip failed. As the FT reported, after the successful launch of its R1 model in January, DeepSeek found itself under pressure from China to champion the national cause. The message was clear: use Huawei’s chips, not Nvidia’s. But when it came to actually training their new R2 model, DeepSeek ran into “persistent technical issues” with Huawei’s AI chips. The problems were so fundamental that the project ground to a halt. A person with knowledge of the situation said this was the main reason the model’s planned launch in May was scrapped, putting the company on the back foot in a market that waits for no-one.

Complicating Nvidia's efforts to retain market share in China, Chinese state media have also in recent weeks alleged that the U.S firm's chips could pose security risks, and authorities have cautioned Chinese tech firms about purchasing the H20. Nvidia says its chips carry no backdoor risks.

Nvidia is also preparing to start delivering a separate new China-specific chip based on its Blackwell architecture and designed primarily for AI inference tasks, according to two other people familiar with those plans. Reuters reported in May that this chip, currently dubbed the RTX6000D, will sell for less than the H20, reflecting weaker specifications and simpler manufacturing requirements.

The chip is designed to fall under thresholds set by the U.S. government. It uses conventional GDDR memory and features memory bandwidth of 1,398 gigabytes per second, just below the 1.4 terabyte threshold established by restrictions introduced in April that led to the initial H20 ban.  Nvidia is set to deliver small batches of RTX6000D to Chinese clients in September. 

Tyler Durden Tue, 08/19/2025 - 09:45

UK Agrees To Drop Demand For Apple To Create Backdoor Access: Gabbard

Authored by Aldgra Fredly via The Epoch Times,

The UK government has agreed to drop its request that Apple provide it with backdoor access to user data, U.S. Director of National Intelligence Tulsi Gabbard said on Monday.

Gabbard stated on X that the agreement came after months of working with UK partners, alongside President Donald Trump, and Vice President JD Vance, to ensure Americans’ private data and civil liberties are protected

“As a result, the UK has agreed to drop its mandate for Apple to provide a ‘back door’ that would have enabled access to the protected encrypted data of American citizens and encroached on our civil liberties,” she said.

Earlier this year, reports emerged that the UK government had issued Apple a “technical capability notice,” requiring the company to provide access to encrypted user data under the Investigatory Powers Act of 2016. In response, Apple halted its Advanced Data Protection (ADP) feature for users in the UK, citing concerns over data breaches.

The iPhone maker stated in a Feb. 24 blog post that it has “never built a backdoor or master key to any of our products or services and we never will.”

The ADP feature provides end-to-end encryption for iCloud storage, preventing non-account holders—including governments and hackers—from accessing data such as photos, documents, and notes. Without ADP, certain types of iCloud data will no longer be fully encrypted, making it potentially accessible to third parties with the proper legal authority.

“Apple remains committed to offering our users the highest level of security for their personal data and we are hopeful that we will be able to do so in the future in the United Kingdom,” Apple stated at the time.

In May, U.S. House Judiciary Committee Chair Jim Jordan and U.S. House Foreign Affairs Committee Chair Brian Mast sent a letter to UK Home Secretary Yvette Cooper, urging her to allow Apple to disclose the order’s existence to the U.S. Department of Justice so the department can assess whether the order complies with a U.S.-UK bilateral agreement under the CLOUD Act, which prohibits orders requiring companies to decrypt data.

According to the letter, U.S. companies are prohibited under UK laws to disclose or confirm the existence of such an order, and doing so constitutes a criminal offense, even if the disclosure is made to the company’s home government.

The U.S. lawmakers warned that the UK’s order for Apple to create a backdoor could lead to some implications, as it might be exploited by cybercriminals and authoritarian regimes.

Director of National Intelligence Tulsi Gabbard speaks to reporters during a briefing at the White House in Washington on July 23, 2025. Travis Gillmore/The Epoch Times

“These vulnerabilities would not only affect UK users but also American citizens and others worldwide, given the global nature of Apple’s services,” they stated in the letter.

The UK’s Home Office and Apple did not return requests for comment by publication time.

Tyler Durden Tue, 08/19/2025 - 09:25

Today, in the Calculated Risk Real Estate Newsletter: Housing Starts Increased to 1.428 million Annual Rate in July

A brief excerpt:

Total housing starts in July were well above expectations and starts in May and June were revised up.

The third graph shows the month-to-month comparison for total starts between 2024 (blue) and 2025 (red).

Total starts were up 12.9% in July compared to July 2024. Note that July was the weakest month in 2024, so this was an easy comparison.

Year-to-date (YTD) starts are up 1.6% compared to the same period in 2024. Single family starts are down 4.2% YTD and multi-family up 18.1% YTD.

There is much more in the article.

New Yorkers: Pay Attention To What's Happening In Chicago

Authored by Daniel Idfresne , Micky Horstman via RealClearPolitics,

Zohran Mamdani attributes his Democratic nomination for New York City mayor to the confidence he has inspired in younger voters.

“I’ve been heartened in many of my conversations with older New Yorkers, who’ve told me they were introduced to the campaign by their son or their daughter,” Mamdani quipped. “I think it’s indicative of a new generation of leadership.”

His social media-savvy campaign promises to make NYC affordable and pursue social justice.

We get the appeal as Gen Zers – the generation who led Mamdani to triumph over Cuomo in the primary. We’re part of the most housing-burdened generation, and increasingly reliant on public transit.

But young voters shouldn’t be fooled by Mamdani’s vision. These lofty promises aren’t new. After all, Chicago Mayor Brandon Johnson has battle-tested Mamdani’s proposed solutions to housing, crime, and public transit – and failed to deliver a safer, more affordable city.

In 2023, Johnson campaigned on building affordable housing and enacting rent stabilization laws. Yet, Chicago experienced the highest annual rent hike compared to other metro areas, at 5.9%. And what about Johnson’s promise to build affordable units? Chicago spent $300 million in government subsidies with only 500 new units to show for it.

After failing to pass his more progressive policies, Johnson recently adopted proven, free-market solutions to combat rising housing costs, such as eliminating parking requirements near public transportation stops and cutting government red tape.

Mamdani should be championing his pro-growth solutions, but instead his leading proposal is $100 billion in taxpayer funds to create 200,000 housing units over the next decade. New Yorkers should be skeptical: If Chicago couldn’t muster at least 500 units after burning $300 million in subsidies, why would NYC fare differently? 

Mamdani also proposes to freeze rent for rent-stabilized apartments. This tried-and-failed approach to affordability will lead to more vacancies, deteriorate housing quality, and create a spill-over demand in market-rate apartments.

Our Gen Z peers are now opting for Austin, Raleigh, and Baltimore for lower housing costs.

Mamdani’s vision to create a “Department of Community Safety” instead of empowering the NYPD isn’t “new leadership” either. Johnson enacted similar boutique police reforms during his tenure with dismal results.

The former teachers’ union lobbyist opted to override the City Council and terminate the Chicago police-approved ShotSpotter – a gunshot detection system – for more “holistic” solutions. He stripped police officers from schools to end the “school-to-prison pipeline” and eliminated over 2000 police positions.

The city leads America in homicides and mass shootings despite crime rates falling nationwide. Chicagoans have moved on from solving the “root problems” of crime, and now rank it as the preeminent issue facing the city. They voted out the progressive, “soft on crime” state’s attorney, and have expressed support for more police, not less.

New Yorkers agree with Chicagoans – they support more policing – but Mamdani’s proposed reforms are still rooted in these luxury beliefs. He argued that social workers, not the NYPD, should respond to domestic violence calls. He called for defunding the police in 2020. Mamdani may have walked back his rhetoric, but his $1.1 billion proposal rests on the same assumptions that guided Johnson’s failures.

If you thought the subway was overrun with crime and homelessness, just wait until New York State follows through with Mamdani’s plan to make buses fare-free.

Riders on the Chicago Transit Authority have seen dramatic scheduling delays since the pandemic, and homelessness, smoking, and crime dominate train cars. Ridership recovery lags behind other major cities. This decline has added up to a deficit of over $500 million. The NYC Metropolitan Transit Authority faces a similar crisis: a projected $900 million deficit.

Unlike us, Mamdani and Johnson aren’t transit users. They don’t rely on clean, well-managed trains to get to work. They get the privilege of casting societal failures on transit, when everyday riders just want to get home quickly and safely. Instead of relying on the state to bail out the struggling systems, riders in New York and Chicago would benefit from a thorough police presence that enforces fares and prevents anti-social behavior. Instead, Johnson and Mamdani’s solution is to put social workers on the trains.

Chicago’s rejection of Johnson’s progressive policies should have inspired a course correction. Instead, Johnson advised Mamdani to double down.

“What has happened historically, particularly for candidates like myself or even Mamdani, when we win, sometimes the movement doesn’t always show up after the win, right? So, we just have to stay committed as progressives to our values, and even when it gets bumpy a little bit, it doesn’t mean that we’re doing everything wrong.”

Young New Yorkers should pay attention. Like many of our peers, we want safe, affordable cities. But, Chicago’s experiment in progressive governance is already unraveling – and New Yorkers should think twice before importing the same failed blueprint.

Daniel Idfresne is a student at Syracuse University, a Young Voices writer, and a former intern for “The Story with Martha MacCallum.” Find him on Instagram and X.

Micky Horstman is the communications associate for the Illinois Policy Institute and a social mobility fellow for Young Voices. 

Tyler Durden Tue, 08/19/2025 - 08:55