Nov 13

Today’s News 13th November 2023

  • Escobar: Another Snapshot Of Kiev's Military Collapse: But It Ain't Over Yet
    Escobar: Another Snapshot Of Kiev’s Military Collapse: But It Ain’t Over Yet

    Authored by Pepe Escobar,

    The spectacular “success” of Kiev’s counter-offensive, which echoed throughout the geopolitical galaxy, has predictably engendered what everyone with a brain was expecting: a dogfight…

    Enter the Zelensky-Zaluzhny Show – especially after the commander-in-chief of the Armed Forces of Ukraine (AFU) admitted on the record that the war has “reached a stalemate” – code for “we’re deeply in trouble”. He also referred to “positional defense” – code for “we’re gonna keep losing more and more territory.”

    The dogfight comes complete with Mafioso overtones, as in 39-year-old Zaluzhny assistant Gennady Chistyakov “accidentally” detonating a grenade received as a gift, seriously injuring his daughter and duly blowing himself up.

    This might be seen at face value as yet another wacky Pulp Fiction-style sketch involving the top dogs (with no Winston Wolf  to “solve problems”). But it does carry an ominous message to Zaluzhny: once again, Mafia-style, from now on he’d better beware of friends bearing gifts.

    As for the “counter-offensive”, the file, for all practical purposes, seems to be closed. There won’t be another one – because there are no more weapons, assets or troops to carry it, except the odd Ukrainian elderly citizens and unsuspecting housewives chased by the “security services” as they exit the supermarket.

    A moral-psychological debacle

    That brings us to yet another snapshot of what’s really happening on the frontlines.

    The attached document, fully verified for authenticity, is a mid-October report to the Commander of the 10th Army Corps of the AFU.

    The report states that the 116th separate mechanized brigade is “incapable of conducting offensive operations because of high losses and high numbers of soldiers that need psychological and medical assistance.”

    The 116th brigade has been deeply involved in military operations in the Zaporozhye region for 5 months already. For 3 months it had been part of the 10th Army Corps, “Tavriya”.

    The report details that the brigade’s losses are 94 soldiers dead; 1122 wounded; and 95 missing. That corresponds to 25% of the total number of personnel.

    When it comes to the moral-psychological front, at least 153 soldiers are deemed in need of immediate psychological rehabilitation.

    This brigade is a quite significant unit; what’s implied is that a moral-psychological debacle is now inbuilt as a System Error at the heart of the Ukrainian military. Consequences, short and middle term, will be dire.

    All that is happening while the flow of foreign mercenaries to the AFU is drying up. No wonder: enter the Perfect Storm of brigades being thoroughly decimated; unspeakable levels of corruption; and better career opportunities in the rekindled Forever War in Israel/Palestine.

    Civilians in Kharkov, for instance, confirm that foreign mercenaries speaking Polish or English are now “almost invisible”.

    None of the above means that things from now on will be a cakewalk for Russia. For instance, the Russian Army still has not been able to destroy the Ukrainian bridgehead on the Dnieper in Kherson.

    Further on down the road, it will be increasingly trickier to expel the Ukrainians from the eastern margin of the Dnieper.

    Russian military media, at the highest level, does its best to sharply focus on serious instances of ineptitude by the Russian Army. That’s their civic duty – and involves creating a groundswell of public opinion, forcing the Russian Army to correct its mistakes and most of all refrain from underestimating the enemy.

    After all, this is far from over – no matter the dogfight now raging in the corridors of power in Kiev.

    Tyler Durden
    Sun, 11/12/2023 – 23:20

  • Novo Nordisk's Obesity Drug Cuts Risk Of Death By 18%, But Is All The Good News Already Priced In
    Novo Nordisk’s Obesity Drug Cuts Risk Of Death By 18%, But Is All The Good News Already Priced In

    There was good news for fans of weight loss drugs this weekend, when Novo Nordisk unveiled details from a closely watched study that supports the use of Wegovy, its blockbuster weight-loss drug, to cut the risk of death by 18% in a trial that the Danish pharmaceutical company hopes will convince more health systems and insurers to pay for the treatment.

    Novo Nordisk on Saturday said the heart protective benefits of its wildly popular Wegovy obesity treatment are due to more than weight loss alone, according to new data presented at a major medical meeting on Saturday. Early data from the Danish drugmaker’s Select trial released in August demonstrated that Wegovy, which has been shown to help patients lose an average of 15% of their weight, also reduced incidence of heart attack, stroke or death from heart disease by 20%.

    The full results from the study, presented at the American Heart Association annual scientific meeting in Philadelphia in front of a standing room only crowd and published in the New England Journal of Medicine, suggest the drug has other beneficial effects beyond the known health benefits from losing weight.

    The heart risk difference between patients who received Wegovy, known chemically as semaglutide, and those on placebo began to appear almost immediately after starting treatment, researchers said.

    In the study of overweight and obese patients based on body mass index who had preexisting heart disease but not diabetes, Wegovy reduced the risk of non-fatal heart attack by 28%, non-fatal stroke by 7% and death from cardiovascular causes death by 15% compared to a placebo (though the numbers did not quite meet the bar for statistical significance).

    According to Novo, which of course is extremely incentivized to present the drug in the most favorable light so it can force insurance companies to cover the ~$1000/month drug, given that patients had not started losing weight when the cardiovascular benefits first appeared suggests the heart protection was not purely the result of weight loss. The trial also showed a 73% reduction in progression to diabetes and a 22% reduction of kidney disease, both of which significantly add to cost effectiveness of Wegovy treatment, write JPMorgan analysts including Richard Vosser in a note.

    Still, the result is hardly a shock: in August, initial data from the Select trial sent shares in Novo Nordisk up as much as 16%, as investors became excited that the results could win over any health systems and insurers reluctant to cover the new class of weight-loss drugs (Wegovy has a US list price of more than $1,300 a month). It begs the question: how much of the good news has already been priced in.

    Dr Chad Weldy, a cardiologist at Stanford University, said on the sidelines of the conference that it was important to note that the trial did not study how semaglutide might stop heart disease from happening and only looked at how to stop it from getting worse.

    Despite that, the size of the patient population covered by this trial should make doctors think about the sorts of patients who should be prescribed Wegovy based on the data.

    “Anyone who has had a heart attack or obstructive coronary disease and has a body mass index of more than 27 fits in with this study, which is a very large patient population,” he said, which of course makes sense: after all GLP-1 drugs, extremely expensive as they may be and requiring a $1000 outlay every month to keep the weigh loss results, do miracles in muting appetite and slashing excess weight.

    Dr Bruno Halpern, head of the obesity center at Hospital 9 de Julho in São Paulo, Brazil, also said at the conference that Wegovy should now be a frontline treatment for heart disease. 

    The study researchers said that while understanding of the mechanisms of the cardiovascular protection from semaglutide remain speculative, there was a consistent effect on associated risk factors that support the idea that multiple pathways are behind the drug’s clinical benefit.

    Ironically, the associated risk factors – which include inflammation, blood pressure and blood sugar control, all of which can impact heart health – can potentially be just as bad if not worse, however in the end of the day, it’s all about how the trial was structured.

    John Deanfield, one of the study’s authors and cardiology professor at University College London, said at the medical meeting that the trial data would spur a debate over where Wegovy fits into doctors’ treatments.

    “When do we start these drugs in our patients? How do we stop them? How much weight do we want them to lose to get the benefit?” he said.

    Patients on Wegovy experienced decreases in C-reactive proteins, an indication of inflammation, similar to those reported with cholesterol lowering statins, which are known to significantly lower heart risks, researchers reported.

    “The cardiovascular benefit (of Wegovy) is a combination of many factors, but I would call out glycemic (blood sugar) control, weight loss and inflammation,” Martin Lange, Novo Nordisk’s head of development, said in an interview.

    It was not all roses: in the 17,604-patient trial with a mean duration of 33 months, almost 1,500 of those taking Wegovy discontinued treatment due to adverse side effects, mostly gastrointestinal disorders like nausea and vomiting, compared to 718 patients in the placebo group, according to the study.

    Though the trial was not conducted to test weight loss, participants lost an average of nearly 10% of their total body weight. Novo said patients in the heart study were not required to track diet and exercise as they are in obesity trials.

    The study showed Wegovy to be safe and well-tolerated in line with previous semaglutide trials, Novo said. It was unclear whether the results could be applied to all GLP1-class drugs or were specific to semaglutide, Barclays analyst Emily Field said in an interview.

    Lange said he expected the company’s application to have Wegovy’s label updated to include the heart benefits to be approved in the U.S. in the first half of next year and in the EU in the second half. Drug regulators can update the information on medicine labels to include new data or reflect new indications for use after initial approval.

    U.S. and UK drug regulators approved Eli Lilly’s rival weight-loss treatment on Wednesday, which had previously been approved and marketed as Mounjaro for diabetes.

    Yet what should have been a strong week for GLP-1 and health loss drugs, as well as the healthcare sector in general, was anything but. The Healthcare sector was hammered in a tumultuous week, with underperformance leading the sector back to YTD lows in terms of relative performance vs. the market (XLV vs. SPY). At the sector level, the tail end of the 3Q earnings season has continued to skew towards near-term uncertainty + persisting headwinds into ’24 – with particular focus around updates from the Life Sciences Tools and Medtech companies through the week. Updates from biopharma were more mixed, with several notable setbacks (VTYX, AMLX, NBIX, etc) partly balanced by BMRN (news of activism) and underscored by LLY’s highly anticipated obesity approval for their GLP-1.

    Meanwhile, a violent sell-off in Large Biopharma on Thursday am, that quickly spread to other subsectors (XLV’s worst 1D performance YTD) as well as Novo Nordisk itself, drove a scramble by investors to identify the driver of the weakness…  without a clear smoking gun beyond the culmination of recent negative news cycle and potential angst ahead of the SELECT trial, whose favorable outcome was greatly anticipated, as it was the catalyst that initially sparked the latest frenzy around this drug class in early August.

    As Goldman concludes, debates are high ahead of this update – with potential for far reaching implications + stock moves this coming Monday – where there continues to be focus on the GLP-1 At-Risk cohort.

    Tyler Durden
    Sun, 11/12/2023 – 22:45

  • High Stakes And A Simple Choice: "I'm 94 Years Old & Saddened By What I See Happening To America"
    High Stakes And A Simple Choice: “I’m 94 Years Old & Saddened By What I See Happening To America”

    Authored by Bernie Marcus, co-founder of Home Depot, via RealClear Wire,

    I am 94 years old and like many of you, I am exhausted by politics and saddened by what I see happening to America. I had hoped it was time for me to move to the sidelines and let younger generations continue the fight to preserve America’s founding freedoms and values. But, like so many of us, I realized that I could not let myself walk away; the stakes are just too high.

    We cannot let the America we see today be what we leave to our children and grandchildren. Many of our once-great cities have devolved into lawlessness with random violent attacks on innocent people, rampant looting, and large-scale homeless encampments. There are rarely consequences for the wrongdoers because George Soros-elected prosecutors across America refuse to prosecute them.

    Moreover, our southern border is unprotected, and millions of people we know nothing about pour into our nation to receive care and benefits that we cannot afford to provide to our struggling military veterans. Worse, many of the border crossers may be gang members who commit violent crimes here. Schoolchildren across America cannot read, write, or do basic math, while our educational leaders tell us that they know better than parents how to raise our children. Working men and women are struggling to provide for their families and must raid their retirement funds just to feed, clothe, and take care of their children. These are just a few of the problems America is facing after three years of bad government policies. They cannot be our legacy.

    This should not be a partisan issue. This should be an issue for all Americans – Democrats, Republicans, and Independents – that I hope to reach with this op-ed. You enjoy the freedoms and values on which the nation was founded. Sadly, I see these freedoms and values being eroded today as government gets bigger and weaponized against its political opponents.

    I wrote this op-ed because of my love for America, not for any financial gain or advantage. I have been retired for 30 years and spend my time engaged in philanthropic causes, with which I have committed to share 90% of my net worth. I was born here and can give testimony about The American Dream. I lost my job and was broke when I was 48 years old. A dear friend of mine suggested that my misfortune presented a great opportunity to build a small business based upon an idea I had shared with him. Only in America, the land of opportunity, could being without a job and broke be a great opportunity. In 1978, my partners and I built four hardware stores, and this small business grew and is known as The Home Depot. We could only have done this in America because of America’s system of free enterprise and pro-jobs growth government policies. The state of America today, especially record inflation, government over-regulation, and the problems of the last three years, would prevent my partners and I from succeeding as we have.

    Part of our legacy must be passing on to future generations of Americans our founding freedoms and values, including The American Dream. We must change the current trajectory of the nation and solve the problems created in the last three years. We must also reject calls from some politicians to replace our free market system with big government socialism. Most of them seem to have never had a job outside of government. All they know is making government bigger and more intrusive in the lives of its citizens.       

    I wrote above that I wanted to sit on the sidelines of politics, but the stakes were too high for me just to walk away. The stakes are America’s path forward. Do we want to continue the perilous trajectory we are now on? I do not because it would be disastrous for all Americans except the political elite.

    For Democrats, the choice is simple. If you feel that you are better off now than you were three years ago, you should vote for Joe Biden or whoever is the Democrat candidate. For Republicans, the choice is also simple.  Let’s face it: Donald Trump is going to win the nomination. You should be doing all you can to ensure his winning the general election.

    I understand the frustration of some of my Republican friends who do not like or are offended by things Donald Trump does and says. I, too, have been frustrated at times, but we cannot let his brash style be the reason we walk away from his otherwise excellent stewardship of the United States during his first term in office. Now is the time for unity to save The American Dream for future generations. 

    For these reasons, I endorse Donald J. Trump as the nominee of the Republican Party and as our next President. I endorse him not only because he has the best chance of winning the general election but because he is the best person to take on and dismantle the administrative state that is strangling America. The new war in the Middle East will present great challenges for the free world for some time, especially in keeping other terrorist groups or nations out of the conflict. This will require a president with the judgment, strength, decisiveness, and courage that Donald Trump displayed in his first term when he ordered the strike that killed the Iranian terrorist Gen. Qasem Soleimani and dissuaded Russia from invading Ukraine. Many, including myself, believe that Hamas would not have unleashed its barbarism and cruelty on Israel if Donald Trump was our president today. The reason is America’s enemies respect and, more importantly, fear Donald Trump’s judgment, strength, decisiveness, and courage. It is critical that America’s next leader have these attributes in the face of Hamas murdering innocent babies, old people, including Holocaust survivors, entire families; burning alive innocent people; raping women and young girls; and other unspeakable acts.

    I urge my fellow Democrats, Republicans, and Independents to put their love for America above all else. I urge the Republican National Committee to end the Republican debates that only benefit ad makers and political consultants. They are unproductive and embarrassing.

    Tyler Durden
    Sun, 11/12/2023 – 22:10

  • Four L.A. Sheriff's Department Employees Commit Suicide In A 24 Hour Period
    Four L.A. Sheriff’s Department Employees Commit Suicide In A 24 Hour Period

    Could there be controversy brewing underneath the surface at the Los Angeles Sheriff’s Department?

    Sadly, this is the question any reasonable person is forced to ask themselves after four current and former Los Angeles Sheriff’s Department employees committed suicide over a 24 hour span, according to a new report from the LA Times.

    Sheriff Robert Luna urged his deputies to check on the health of their co-workers and friends, stating: “We are stunned to learn of these deaths, and it has sent shock waves of emotions throughout the department as we try and cope with the loss of not just one, but four beloved active and retired members of our department family.”

    “During trying times like these it’s important for personnel regardless of rank or position to check on the well-being of other colleagues and friends,” he added.

    He also claimed the department was “urgently exploring avenues to reduce work stress factors to support our employees’ work and personal lives.”

    Department sources, preferring anonymity due to the ongoing probe, indicated no connection or foul play in the recent deaths, including that of former and current employees, with three suicides occurring in a day.

    Cmdr. Darren Harris, notable for his 25-year media presence and a key department spokesperson, was among the deceased, found in his Santa Clarita home from an apparent self-inflicted gunshot. Harris’ career included roles in media relations, Transit Services Bureau, and leading the Santa Clarita station. His death, while not officially confirmed, was disclosed by sources to The Times.

    The LA Times also reported that on Monday, retired sergeant Greg Hovland was found dead at his Quartz Hill home. This was followed by another employee’s death in Stevenson Ranch after sunset, and a fourth suicide that occurred Tuesday morning at a Pomona hospital.

    These incidents highlight the growing concern of law enforcement suicides in Los Angeles and nationally, where studies show officers face higher suicide risks than the general population, often linked to job stress and public scrutiny.

     The department is offering counseling and support through its Psychological Services Bureau and Peer Support Program, as stated by Luna. Additionally, four other Sheriff’s Department employees have died by suicide this year, confirmed by spokesperson Nicole Nishida.

    Tyler Durden
    Sun, 11/12/2023 – 21:35

  • Rare Government Support Seeks To Contain China Debt Risks
    Rare Government Support Seeks To Contain China Debt Risks

    By Charlie Zhu and Helen Sun, Bloomberg Markets Live reporters and strategists

    1. Fresh signs of official support for debt-laden property firms emerged, triggering a relief rally in developers’ dollar bonds. China Vanke, a major developer recently rattled by repayment worries, received unusually strong support from officials in its hometown of Shenzhen last Monday.

    Then came a report by local media Cailian on a meeting among the central bank, other regulators and top builders including Vanke, Longfor, and Gemdale. The first two builders’ dollar notes jumped on the news.

    Market confidence in developer bonds now comes from government support – similar to those of local government financing vehicles, Ming Ming, chief economist at Citic Securities, wrote in a note. Although it takes time for the property sector to recover, vulture investors may already see value in some securities, he added.

    In a contrasting example, Country Garden Holdings’ shares plunged nearly 10% Thursday after Ping An Insurance Group denied a Reuters report that authorities asked the insurer to buy the embattled developer. Ping An itself also suffered a $5.5 billion stock selloff, indicating only the state, rather than any private-sector firm, has the capacity to bail out a company of Country Garden’s size.

    2. The People’s Bank of China also has debt-laden regions on its mind. Governor Pan Gongsheng pledged to provide emergency funding to heavily indebted local governments as needed, showing a sense of urgency on preventing repayment risks at regional authorities from derailing a patchy economic recovery.

    In another sign that Beijing is tightening scrutiny of the issue, the Ministry of Finance listed eight cases of irregularities committed by local governments to build up hidden debt. The inclusion of financial institutions in the penalties issued by the ministry shows debt control will be a more comprehensive effort involving both creditors and debtors, Yang Yewei, analyst at Guosheng Securities, wrote in a note.

    Out of some 1.3 trillion yuan ($172 billion) of refinancing bonds sold by provincial authorities over the past month or so, indebted regions including Guizhou, Yunnan, and Inner Mongolia ranked as the top issuers, according to data compiled by GF Securities.

    3. Global investors turned more optimistic about Chinese assets. JPMorgan’s chief Asia & China equity strategist Wendy Liu said the bank sees increasing likelihood of a technical rebound in the country’s stock market toward the end of the year, citing improvement in risk factors from geopolitics to long-term structural growth.

    Franklin Templeton Investments President Jenny Johnson said it’s time to “wade back into China” as Chinese assets are trading cheaply. Meantime, Citadel founder Ken Griffin said global investors have to “be watching and investing” in China to tap into innovation and growth in the region.

    US-China relations though may still be a challenge. In a sign of how rocky the bilateral ties can be, Beijing accused Washington of discrediting China’s business environment, just when China booked more than 1 million tons of US soybeans in a gesture of goodwill ahead of this week’s summit between Xi Jinping and Joe Biden.

    Tyler Durden
    Sun, 11/12/2023 – 21:00

  • Australian Ports Hit By "Nationally Significant Cyber Incident" As Containers Pile Up
    Australian Ports Hit By “Nationally Significant Cyber Incident” As Containers Pile Up

    Australian Federal Police are investigating a cybersecurity incident that has paralyzed Australia’s second-largest port operator, which manages container terminals in Sydney, Melbourne, Brisbane, and Fremantle. 

    DP World Australia is responsible for 40% of Australia’s maritime freight and shuttered operations on Friday after a cybersecurity incident. 

    “The company, in collaboration with cybersecurity experts, has worked tirelessly, making significant progress in re-establishing landside freight operations at its ports,” DP World Australia said in a statement. 

    Bloomberg reported Sunday that DP World Australia has made “significant progress” after the cybersecurity incident. Still, the port operator’s main systems are down, preventing trucks from picking up or dropping off containers. However, vessels can still load and unload containers at the terminals. 

    On Saturday, Home Affairs Minister Clare O’Neil posted on X that the “cyber incident at DP World is serious and ongoing.” 

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    On Sunday, National Cyber Security Coordinator, Air Marshal Darren Goldie, said the port operator is closely working with the government to resolve a “nationally significant cyber incident.” 

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    “DP World today advised the Australian Government that the time frame for interruptions to continue is likely to be a number of days, rather than weeks,” Goldie said.

    Here’s more from the official:

    Today (Sunday 12 November 2023), I again convened the National Coordination Mechanism to bring together government agencies and the maritime and logistics sectors as part of the response to the incident. This followed earlier technical and Ministerial briefings with the company.

    DP World’s IT system remains disconnected from the internet, significantly impacting their operations in Brisbane, Sydney, Melbourne and Fremantle. Our priority remains assisting DP World to restore their systems, which will allow cargo operations to recommence.

    DP World today advised the Australian Government that the timeframe for interruptions to continue is likely to be a number of days, rather than weeks.

    They also advised that despite the disruption, they are able to access sensitive freight at the ports if necessary – for example, in a medical emergency.

    We are continuing to develop our understanding of the flow on impacts to Australia’s logistics system.

    The National Emergency Management Agency, the Department of Infrastructure, Transport, Regional Development, Communications and the Arts and the Office of Supply Chain Resilience in the Department of Industry, Science and Resources will work with DP World to ensure that government and industry stakeholders have appropriate situational awareness necessary to support the management of any disruption to Australia’s supply chains.

    While I understand there is interest in determining who may be responsible for the cyber incident, our primary focus at this time remains on resolving the incident and supporting DP World to restore their operations.

    The Australian Federal Police is continuing to investigate the incident.

    Ports Australia wrote in a statement that the disruption is only at DP World Australia terminals:

    “Australia’s ports and other terminals remain operational. We understand the importance of accurate reporting in maintaining public confidence and preventing unnecessary concern.” 

    This comes days after Chinese bank ICBC was hit with a cyberattack that reportedly affected US Treasury liquidity during a 30-year auction. And a string of cyber breaches at major ports in recent years. 

    Tyler Durden
    Sun, 11/12/2023 – 20:25

  • Morgan Stanley's 2024 Outlook: Slowing Economy, Policy Easing And Challenging Set-Up For Markets
    Morgan Stanley’s 2024 Outlook: Slowing Economy, Policy Easing And Challenging Set-Up For Markets

    By Vishwanath Tirupattur, global head of Quantitative Research at Morgan Stanley

    Later today, we will publish our year-ahead outlook. Personally, it is a milestone – it is the 20th year that I have had the privilege of being part of this annual crystal ball-gazing at Morgan Stanley Research. For those of us steeped in the daily grind of the markets, stepping back and imagining how the economies and markets evolve over the course of the year ahead is a challenging endeavor, and one we take seriously. We strive to achieve cohesion and consistency in our outlooks across economies and markets through a highly collaborative and deliberative exercise involving our economics and strategy teams globally.

    Our economists led by Seth Carpenter, Morgan Stanley’s chief global economist, expect below-trend growth in developed markets (DM) and a mixed growth picture evolving in emerging markets (EM). They see restrictive monetary policy of the last two years continuing to exert pressure on the global economic cycle over 2024. Positing that while global inflation has peaked, returning to target levels will take a period of below-par growth, they expect to see global growth slowing with most DM economies avoiding recession while taming inflation. They acknowledge that while recessions remain a risk everywhere, any recession in our baseline scenario (such as in the UK) should be shallow as inflation is falling with full employment, so real incomes hold up, leaving consumption resilient, despite more volatile investment spending.

    The risk of a debt-deflation trap remains in place for China, resulting in a subpar improvement in both growth and inflation which weighs on headline growth in EM.

    While growth remains robust in select EM economies such as India, Indonesia and the Philippines, it won’t be sufficient to offset the drag from China.

    After nearly two years of aggressive monetary policy, our economists expect policy rates across most DMs, with the notable exception of Japan, to remain broadly on hold in 1H24 and decline only gradually as inflation cools towards target levels.

    Thus, despite the start of easing. policy rates in DMs remain restrictive even at the end of 2024. Japan continues to play to a different tune, inching towards policy normalization from the other end of the policy spectrum. Our economists expect the BoJ to remove both the Negative Interest Rate Policy (NIRP) as well as Yield Curve Control (YCC) in January 2024 and hike once in July 2024.

    For markets, 2024 presents a challenging set-up. Many markets have already priced a smooth macro transition, a soft landing characterized by moderating growth and inflation and eventually easier policy.

    Thus, justifying current valuations across many asset classes requires the macro outlook to stick the landing perfectly. In that sense, there is little room for error. Unlike the last two years when we had a strong preference for RoW over US, we expect that US assets will find 2024 easier, and EM markets less so. In currencies, we expect that USD strength endures through 1Q, as growth and rate divergence continue and USD’s defensive characteristics remain alluring. JPY outperforms on the back of the BoJ exiting YCC and NIRP.

    A slowing economy and policy easing set the stage for yields to be lower in the US, Europe, the UK and the dollar bloc, and yield curves to steepen. We think that this is a good set-up for ‘income investing’. For yield-focused investors seeking 6%+ yields, we see a wide range of opportunities across high-quality fixed income – DM government bonds, IG credit, agency MBS and senior tranches of securitized credit.

    Given that there is little room for error, we lean towards a defensive posture, particularly in equities. Japan is our most preferred region while EM is our least preferred, dragged down by Asia growth. For US equities, we continue to recommend a defensive growth and late-cycle cyclicals barbell and look for a durable earnings recovery to emerge during 2024 even as we expect the earnings recession to continue in the short term. Meanwhile, we expect European equity earnings to trough in 1Q, but any recovery is likely to be L-shaped.

    2023 has been a challenging year for markets and 2024 won’t be easy either, but we expect the nature of the challenge to be different.

    You will get the full story in our global outlooks coming out later today and more detailed asset class-specific outlooks that follow. Stay tuned.

    Tyler Durden
    Sun, 11/12/2023 – 19:50

  • Drastically Different Narratives Emerge Centered On Shifa Hospital's Mounting Deaths
    Drastically Different Narratives Emerge Centered On Shifa Hospital’s Mounting Deaths

    This weekend has seen the most intense fighting in Gaza City which has centered on al-Shifa hospital and its vicinity, which is the Strip’s largest, which has for days been totally surrounded by Israeli forces, and lacking food and water.

    The hospital is “totally surrounded and bombardments are going on nearby,” its director, Mohammad Abu Salmiya, announced in a late Saturday statement. Israel has claimed that Hamas uses bunkers beneath the hospital as a command center. However, al-Shifa’s head of surgery, Dr Marwan Abusada, has told regional news sources that civilians are trapped and patients are dying.

    Patients & internally displaced people at Al-Shifa hospital, via APF

    “Shooting and bombardment are everywhere you hear it at every second around the al-Shifa Hospital. No one can get out. No one can come in. People who tried evacuate the hospital, they were shot at in the streets. Some got killed, some injured,” he described of the desperate situation. Some Israeli officials and media have alleged that it is in fact Hamas snipers doing the shooting, though without evidence.

    Palestinian Minister of Health Mai al-Kaila has at the same time said Israel’s military “are not evacuating people from hospitals; instead they are forcibly evicting the wounded onto the streets, leaving them to face inevitable death.”

    This was in response to the IDF announcing it would help facilitate the safe passage of babies and other wounded from the hospital. But the IDF has asserted repeatedly it is Hamas that is using civilians at the hospital as ‘human shields’ and that Hamas also hijacked inbound fuel which was meant for hospital generators. 

    The Wall Street Journal on Sunday also quoted doctors who presented a scenario of mass suffering and death unfolding:

    Doctors described an increasingly desperate situation at hospitals in northern Gaza, including the biggest one, Al-Shifa Hospital, where they said dozens of dead bodies have been left in the open and decomposing and nearly 40 prematurely born babies are without the incubators they need.

    “If we do not stop this bloodshed immediately with a ceasefire or at the bare minimum a medical evacuation of patients these hospitals will become a morgue,” Doctors Without Borders, the international healthcare charity, said Sunday.

    Competing and contrasting narratives have emerged concerning who is to blame for deaths at Shifa hospital…

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    Israel’s Foreign Ministry has said the compounding misery is being orchestrated by Hamas…

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    Meanwhile, also on Sunday fighting along the Israeli-Lebanon border is worsening following the latest wave of Hezbollah rockets, some of which reportedly scored direct hits, leaving significant casualties. 

    “At least six civilians were wounded, one critically, in an anti-tank guided missile attack by the Hezbollah terror group from Lebanon on Sunday, the military and medics said,” the Times of Israel reports.

    Hezbollah has been facing pressure from both its supporters in the region and Palestinian armed factions to ‘do more’ and escalate its attacks on northern Israel.

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    However, many of the IDF soldiers were reported as only “lightly wounded” and were evaluated at a local hospital. There are reports that Israel’s military is preparing more devastating retaliatory attacks on southern Lebanon.

    Tyler Durden
    Sun, 11/12/2023 – 19:15

  • Trump Lawyers To Mount Counterattack After Weeks Of Bruising Cross-Examination In NY Civil Case
    Trump Lawyers To Mount Counterattack After Weeks Of Bruising Cross-Examination In NY Civil Case

    Authored by Michael Washburn via The Epoch Times (emphasis ours),

    The media and public should brace themselves for the most heated phase of the civil fraud trial of former President Donald Trump when courtroom proceedings resume on Monday—if past interactions between the defense and the judge and government lawyers are any indication.

    Former President Donald Trump sits in the courtroom with attorneys Christopher Kise and Alina Habba during his civil fraud trial at New York State Supreme Court in New York City on Nov. 6, 2023. (Brendan McDermid-Pool/Getty Images)

    On Nov. 13, the defense will begin to make its case on behalf of the 45th president and 2024 candidate, as well as his two sons and daughter, who are no longer defendants in the case yet faced relentless and acrimonious cross-examination on the witness stand over the last two weeks.

    President Trump’s eldest son Donald Trump Jr. is expected to be the first to testify for the defense.

    Trump lawyer Christopher Kise and Judge Arthur Engoron feuded throughout the cross-examination of President Trump, Donald Trump Jr., Eric Trump, and Ivanka Trump. The defense attorney has objected constantly that questions posed were irrelevant to the legal issues at hand or that no one could reasonably expect the people on the stand to recall the details of documents, records, meetings, and conversations from as far back as 2012.

    As if to add further contentiousness to the proceedings, New York Attorney General Letitia James’s office on Friday sent a letter to Judge Engoron seeking to block testimony from four expert witnesses set to take the stand during the defense phase next week. Their testimony would address the accuracy of valuations contained in statements of financial condition submitted to Deutsche Bank and other firms for the purpose of securing favorable terms for loans and insurance. In the view of the attorney general’s office, such testimony is beside the point given that the judge has already ruled that Trump is guilty of fraud.

    Nor has the pro-Trump side been inactive during the run-up to the next phase of the trial. On Friday, Rep. Elise Stefanik (R-N.Y.) sent a lengthy letter to the New York State Commission on Judicial Conduct, spelling out a litany of complaints about how Judge Engoron has conducted himself and his alleged bias against the respondents in the lawsuit.

    (Left) New York Supreme Court Justice Arthur Engoron. (Dave Sanders/Pool Photo via AP) / (Right) House Republican Conference Chair Rep. Elise Stefanik (R-N.Y.). (Anna Moneymaker/Getty Images)

    “This judge’s bizarre behavior has no place in our judicial system, where Judge Engoron is not honoring the defendant’s rights to due process and a fair trial. These serious concerns are exacerbated by the fact that the defendant is the leading candidate for President of the United States, and it appears the judicial system is being politicized to affect the outcome of the campaign,” Ms. Stefanik writes.

    She then goes on to cite the judge’s reference to the former president as “just a bad guy” deserving of prosecution by the attorney general, and his blunt statement to President Trump that “we are not here to listen to what you have to say.”

    Judge Engoron also told President Trump’s attorney Mr. Kise, “I am not here to hear what he has to say, now sit down!” and said, when Mr. Kise floated the idea of requesting a directed verdict, “You better not, Chris.”

    The letter also characterizes the judge and members of his staff as “partisan Democrat donors” who, in violation of the New York Code of Judicial Conduct, have given lavishly to the party opposing President Trump.

    Mr. Stefanik’s letter concludes, “Judge Engoron’s lawlessness sends an ominous and illegal warning to New York business owners: If New York judges don’t like your politics, they will destroy your business, the livelihood of your employees, and you personally. This Commission cannot let this continue.”

    A Defense Lawyer’s Concerns

    Though Ms. Stefanik is not part of the Trump defense team in the current proceedings, her letter summarizes many of the objections that Mr. Kise has repeatedly raised over the last few weeks. Mr. Kise took exception to the frequent passing of notes between the judge and a law clerk, suggesting that the judge often made rulings favoring the plaintiffs upon reading the notes, whose contents were not disclosed to the rest of the court.

    “The rulings are frequently if not inordinately against us on every issue,” said Mr. Kise. Later on in the proceedings, he said he hoped that the defense would receive the same latitude that the judge has granted to the plaintiffs when the defense finally gets its turn the week of Nov. 13.

    Judge Engoron insisted that he had every right to send and receive as many notes as he pleased, and the validity of such courtroom procedure was not for Mr. Kise to adjudicate. At another point in the proceedings, the judge fired back at Mr. Kise, saying he vehemently objected to the suggestion that the judge held a bias in favor of the plaintiffs and was not acting in accordance with generally accepted rules and standards of courtroom conduct and decorum.

    Near the end of the Nov. 2 hearing, Assistant Attorney General Andrew Amer ridiculed the idea that bias was at work and the grounds on which Mr. Kise alleged such bias.

    “The notion that bias can be inferred by the number of notes passed between a judge and a clerk is one I have never heard of, and is frivolous,” Mr. Amer said.

    Regardless of whether the concerns of Mr. Kise and Ms. Stefanik have any basis, the proceedings that get underway in Manhattan civil court at 10:00 a.m. on Monday are likely to rise—or descend—to a level of acrimony with few parallels in any lawsuit involving a former U.S. head of state or current presidential aspirant.

    Tyler Durden
    Sun, 11/12/2023 – 18:40

  • "You Do This, Dumb B**ch!": Maryland Man Flips Out And Goes Berzerk At McDonald's Drive Thru Window
    “You Do This, Dumb B**ch!”: Maryland Man Flips Out And Goes Berzerk At McDonald’s Drive Thru Window

    A man in White Marsh, Maryland went berzerk at a McDonald’s last week, throwing drinks as workers and demanding that they turn over food to him. And of course, it was all captured on a viral Tik Tok video, The New York Post reported last week.  

    Well, at least somewhere in a server room in China, the government cybersecurity experts getting paid to review all of the U.S.’s Tik Tok footage for national security secrets got to have a laugh. 

    According to The New York Post, an unidentified man, donned in a beanie, blue polo, and sunglasses, aggressively opens the drive-thru window of a McDonald’s in White Marsh, Maryland, about 16 miles from Baltimore. He confronts an employee, harshly telling them: “You do this! You do this, dumb b—h!”

    In his rage, he snatches a serving of fries and a small beverage from the counter typically used for assembling drive-thru orders and hurls them at a staff member. Then, he took a large soda and tossed it into the eatery, causing people off-screen to react with gasps and screams. It remains unclear if anyone was injured in the incident.

    Furiously, he yells “Shut it down right now!” while attempting to dismantle the soda fountain. “Give me some food!” he demands, gesturing towards the interior of the McDonald’s, apparently targeting one of the workers.

    “I own all this stuff!” he then yells, looking at the cash register. In a fit of rage, the man wrenches the cash register from its mount, causing a cascade of registers and other equipment to topple. Frustrated, he shakes the rack, demanding “some damn real food.”

    He then aggressively insists on being served “some f—ing food,” to which a visible staff member assures him that his meal is being prepared. A woman’s voice in the background of the video, which has attracted over 69,000 views since its posting, confirms, “He’s cooking your order right now.”

    Demanding fries, he points through the window, threatening, “Give me that bag of fries right there,” and repeats his demand with an added threat towards an employee.

    The man was charged that day, according to ABC. 

    You can watch the entire wonderful exchange here:

    https://www.tiktok.com/embed.js

    Tyler Durden
    Sun, 11/12/2023 – 18:05

  • Trump's Veterans Day Message Was Quite Different From Biden's
    Trump’s Veterans Day Message Was Quite Different From Biden’s

    Authored by Jack Phillips via The Epoch Times,

    President Joe Biden and former President Donald Trump both released differing messages on Nov. 11, Veteran’s Day.

    “Today, we honor the story of our veterans – the story of our nation at its best,” President Biden wrote on X.

    “On Veterans Day, let’s recommit to fulfilling our one sacred obligation as a nation: to prepare those we send into harm’s way and care for them and their families when they come home.”

    In a Veterans Day speech at the Memorial Amphitheater in Arlington National Cemetery, President Biden made reference to “those who have always, always kept the light of liberty shining bright across the world,” while making reference to his late son, Beau, who was deployed to Iraq about 15 years ago.

    “We come together today to once again honor the generations of Americans who stood on the front lines of freedom … to once again bear witness to the great deeds of a noble few who risked everything, everything, to give us a better future,” President Biden also said.

    During the event, president was joined by first lady Jill Biden, Vice President Kamala Harris, and second gentleman Douglas Emhoff. Several members of his cabinet also joined.

    On Saturday, President Biden announced that military veterans who were exposed to toxins could be able to enroll in no-cost health care starting next year.

    President Trump marked Veterans Day with a message on his Truth Social social media platform:

    “To our heroic veterans, I am grateful for your service to our country and honored to wish you a Happy Veterans Day.”

    He added that there is “no greater act of selfless service than defending America’s God-given freedoms and liberty.”

    Hours later, he wrote a message on the platform noting that in “honor of our great veterans on Veteran’s Day, we pledge to you that we will root out the communists, Marxists, fascists, and radical left thugs that live like vermin within the confines of our country.”

    They will “do anything possible, whether legally or illegally, to destroy America, and the American dream,” added President Trump, who was later seen at a UFC fight in New York on Saturday.

    “The threat from outside forces is far less sinister, dangerous, and grave, than the threat from within,” the former president also wrote.

    “Despite the hatred and anger of the radical left lunatics who want to destroy our country, we will make America great again!”

    Two GOP presidential candidates issued Veterans Day messages to underscore their military ties.

    “Proud of my veteran Michael Haley and the many men and women who have served to defend our freedoms,” former U.N. ambassador Nikki Haley wrote on X, along with a photo of her husband Michael, a National Guard officer.

    And Florida Gov. Ron DeSantis, a former Judge Advocate General (JAG), sent this thanks to “all who have worn the cloth of our country.”

    He added, “As a veteran myself, I am honored by the unwavering support we receive. I will always have the backs of our vets.”

    Nov. 11, once known as Armistice Day, is the anniversary of the armistice that ended World War I in 1918. According to the Department of Veterans Affairs, the first celebration that used the term Veterans Day occurred in Birmingham, Alabama, in 1947.

    World War II veteran Raymond Weeks had set up a “National Veterans Day,” which included a parade and other events to honor veterans. It has held on Nov. 11.

    “In 1954, after the return of service personnel from both World War II and the Korean War, U.S. President Dwight D. Eisenhower signed a bill rededicating Nov. 11 as Veterans Day, encouraging Americans to commit themselves to the cause of peace and to honor America’s veterans for their courage, honor, patriotism and sacrifice,” according to the National World War I Museum.

    Tyler Durden
    Sun, 11/12/2023 – 17:30

  • "Antisemitism Has No Place Here" – Harvard President Condemns "From The River To The Sea" Phrase After 1600 Jewish Alum Pull Donations
    “Antisemitism Has No Place Here” – Harvard President Condemns “From The River To The Sea” Phrase After 1600 Jewish Alum Pull Donations

    Following enormous backlash against the University over its initial statement about Hamas’ Oct. 7 attack on Israel – with critics condemning Harvard President Claudine Gay’s statement for failing to explicitly denounce Hamas and lack of response to a controversial joint letter by Harvard student groups in support of Palestine that called Israel “entirely responsible” for the violence – Harvard has just announced that it will work with its newly established antisemitism advisory group to implement antisemitism education and training for affiliates.

    “I affirm our commitment to protecting all members of our community from harassment and marginalization, and our commitment to meeting antisemitism head-on, with the determination it demands,” Gay wrote.

    “Antisemitism has no place at Harvard,” Gay added. “We are committed to doing the hard work to address this scourge.”

    Harvard President Claudine Gay announced plans to implement training around antisemitism in a Thursday email.

    Additionally, in her email, Gay explicitly condemned the use of the phrase “from the river to the sea” – a pro-Palestine slogan that prominent alumni have called “eliminationist” and antisemitic.

    “Our community must understand that phrases such as ‘from the river to the sea’ bear specific historical meanings that to a great many people imply the eradication of Jews from Israel and engender both pain and existential fears within our Jewish community,” Gay wrote.

    “I condemn this phrase and any similarly hurtful phrases.”

    The Crimson reports that Gay’s decision to single out the phrase “from the river to the sea” – which is frequently chanted by the Harvard Undergraduate Palestine Solidarity Committee and other pro-Palestine student groups – almost immediately received backlash from some Harvard affiliates.

    Kirsten A. Weld, a professor of History at Harvard, criticized Gay’s decision to denounce a specific phrase used by student activists.

    “Can’t recall any prior instance of a contested phrase/idea receiving official condemnation like this, or having one singular ‘specific historical meaning’ imputed to it, in my 11 years on this campus,” Weld wrote in a post on X.

    Gay, standing next to Harvard Chabad President Rabbi Hirschy Zarchi, views an Shabbat table installation in the Yard symbolizing the hundreds of hostages held by Hamas.

    Gay also confirmed that the FBI and HUPD are investigating a video taken during the Oct. 18 pro-Palestine “die-in” protest at Harvard Business School depicting several protesters confronting a man and escorting him away after he filmed protester’s faces.

    The protesters shouted “shame” after the man, who other media outlets later identified as an Israeli student.

    What could have caused such a sudden and considerable ‘flip’ in Gay’s perspective (or silence) on the jew-hatred being seen at Harvard – and across many so-called ‘Ivy League’ schools? Doesn’t she realize the world is binary – oppressor vs oppressed, victimizer vs victims?

    We are sure it is simply a realization that principles matter (and terrorism is bad), and has nothing at all to do with the fact that 1600 wealthy jewish alumni have withdrawn their donations from the once-prestigious learning academy.

    As CNN reports, high-profile billionaire alumni like Pershing Square founder Bill Ackman and former Victoria’s Secret CEO Leslie Wexner have already said that if Harvard doesn’t take steps to fix the problem they could face a donor exodus, but now the largest group yet of alumni – most of whom do not have billionaire status – are threatening to withdraw their donations.

    “We never thought that, at Harvard College, we would have to argue the point that terrorism against civilians demands immediate and unequivocal condemnation,” wrote members of the Harvard College Jewish Alumni Association (HCJAA) in an open letter to President Claudine Gay and Dean of Harvard College Rakesh Khurana.

    “We never thought we would have to argue for recognition of our own humanity.”

    Philanthropy is the single largest contributor to revenue at Harvard, accounting for 45% of the university’s $5.8 billion in income last year. Philanthropic gifts accounted for 9% of the university’s operating budget last year and 36% of its $51 billion endowment amassed over decades.

    Tyler Durden
    Sun, 11/12/2023 – 16:55

  • Los Angeles County Approves New 'Office Of Food Equity'
    Los Angeles County Approves New ‘Office Of Food Equity’

    Authored by Jill McLaughlin via The Epoch Times,

    The Los Angeles County Board of Supervisors unanimously approved a plan this week to create a new Office of Food Equity to address what they call a growing problem of food insecurity in the region.

    The measure, authored by Supervisors Janice Hahn and Lindsey Horvath, will build on the county’s Food Equity Roundtable, created in 2021 to bring together food companies with private and public charity groups. The coalition was funded by the Annenberg, the California Community, and the Weingart foundations.

    According to Ms. Hahn, the new office will allow the county to improve the county’s food system.

    “By creating the first-ever LA County Office of Food Equity, we can build on the work we already started with our partners, modernize our food system, and work toward a future where everyone in LA County can get the healthy food they need,” she said in a statement Nov. 7.

    The roundtable, a two-year pilot program, integrates the county’s solutions for chronic food insecurity based on the principle that “just and equitable access to healthy and nutritious food is a human right.”

    In a December 2022 report, the program compiled a list of recommendations to improve food access—such as addressing structural racism, ageism, and overall inequity—and identified populations who organizers say are disproportionately more vulnerable to food insecurity, including immigrant and transgender communities.

    California residents living in poverty or who have lost jobs are already eligible for the federal Supplemental Nutrition Assistance Program (SNAP), which provides monthly funds to buy food. In 2022, more than 4.6 million California residents—or about 1 in 8 people—received SNAP benefits, according to a report by the Center on Budget and Policy Priorities, a nonpartisan research and policy institute.

    Volunteers at Laguna Niguel Presbyterian work with San Clemente-based Family Assistance Ministries in handing out food donations to a line of cars in Laguna Niguel, Calif., on Dec. 23, 2021. (John Fredricks/The Epoch Times)

    The state received nearly $14.5 billion in such benefits in 2022—about 142 percent more than in 2019.

    However, food insecurity was much higher last year in Los Angeles County compared to the rest of the United States, according to the latest county and federal statistics.

    In Los Angeles County, about 24 percent of households—nearly 1 in 4—were food insecure as of July 2022, statistics show.

    “We know the need has only grown, particularly for communities of color who lack access to fresh food,” Ms. Horvath said in the Nov. 7 statement. “The Office of Food Equity will build on this successful public-private partnership model to continue to provide nutritious food to residents who are counting on us.”

    Federal statistics show the number of households in the U.S. that were food insecure grew substantially in 2022 to 12.8 percent, or 17 million households. That meant 3.5 million more households were lacking food compared to the year before, when 10.2 percent reported food insecurity, according to the U.S. Department of Agriculture.

    Food insecurity in the U.S. declined in 2018, decreasing for the first time to 2007 levels, the USDA reported. Only 11 percent of U.S. households were food insecure in 2018, a decline from 11.8 in 2017, according to the agency.

    Cinny Kennard, executive director of the Annenberg Foundation, said she hoped the new office would ensure all people get the food they need.

    “This motion approved by the Board of Supervisors will ensure the new office of Food Equity is staffed and supported so that we can together begin to work to get all people much needed quality, affordable, and healthy food,” she said in the statement.

    Ms. Kennard is also a former media executive and co-chair of the food roundtable.

    Tyler Durden
    Sun, 11/12/2023 – 16:20

  • Palestinians 'Disappointed' Hezbollah Hasn't Escalated A Northern War On Israel
    Palestinians ‘Disappointed’ Hezbollah Hasn’t Escalated A Northern War On Israel

    On Saturday Hezbollah leader Hassan Nasrallah gave his second speech since the Gaza War began, and there was little new that signaled he’s ready to escalate; instead, it was mostly a reiteration of ‘red lines’ and more threats of possible future action.

    He did emphasize that the war against Israel will be long and that “victory” would “take years” to achieve, after Hezbollah has already lost at least 63 of its fighters. He did pledge that “This front will remain active,” in reference to southern Lebanon. 

    In response, Israeli Defense Minister Yoav Gallant told his troops who are deployed to the northern border, “Hezbollah is dragging Lebanon into a war that might happen.” The two sides have exchanged daily rocket and mortar fire, but there’s yet to be the kind of all-out battle that many have been fearing.

    “It is making mistakes and … those who will pay the price are first and foremost Lebanon’s citizens. What we are doing in Gaza we can do in Beirut,” Gallant said additionally.

    But many Palestinians were hoping that Nasrallah would have declared war by now, and they are said to be “disappointed” this hasn’t happened. This is true also of Palestinians in refugee camps in Lebanon, some of which were interviewed by Al Jazeera: 

    His message fell short for many Palestinians in Sabra and Shatila, a Palestinian refugee camp that sprawls out across two Beirut neighborhoods.

    “I wanted him to open up the war completely,” said Abdallah, 25, one of the Palestinians who gathered anxiously at a sidewalk cafe in Sabra and Shatila to watch the speech.

    And others echoed the same:

    “Hezbollah is fighting and they’re trying, but we want them to make more happen,” said Abdallah.

    Some Palestinians in Lebanon believe that Hezbollah should take the fight to Israel first.

    But feelings are much more mixed among Lebanese themselves, who remember much of the country being bombed in 2006, including Beirut’s international airport. But unlike the situation in 2006, Lebanon’s economy is currently in tailspin, amid other worsening societal woes. 

    There are fears that a full Hezbollah assault would drag the entire country into war with Israel, and it remains that the Lebanese Army doesn’t have much of an air force or proper anti-air defenses to speak of if Israel chooses to bomb the whole country “back to the stone age” – as Israeli leaders past and present have frequently vowed.

    https://platform.twitter.com/widgets.js

    So far both Hezbollah and the IDF have exercised some degree of restraint in order to keep the exchanges of fire “limited” – despite casualties on either side the border. The IDF has meanwhile been forced to divert a significant amount of troops, tanks and other armor to the north in order to deal with the Hezbollah threat.

    Tyler Durden
    Sun, 11/12/2023 – 15:45

  • WaPo Drops Bombshell On The Nord Stream Pipeline Sabotage Narrative: A Ukrainian Colonel, Covert Ops, & The CIA's Shadow
    WaPo Drops Bombshell On The Nord Stream Pipeline Sabotage Narrative: A Ukrainian Colonel, Covert Ops, & The CIA’s Shadow

    Consider the source (and the timing)…

    No lesser deep-state mouthpiece than The Washington Post just dropped a bombshell with the revelation that Ukrainian Colonel Roman Chervinsky “was integral to the brazen sabotage operation” on the Nord Stream pipeline, “according to officials in Ukraine and elsewhere in Europe, as well as other people knowledgeable about the details of the covert operation.”

    The bombing, dubbed a “dangerous assault on Europe’s energy infrastructure” by US and Western officials at the time, marked a critical juncture in the ongoing tensions between Russia and the West. By targeting the pipeline, the operatives (whoever they were) struck a blow to a critical artery of Russian energy exports, a sector that has been at the heart of European-Russian economic relations.

    Additionally, as the Goebbels-ian narrative that ‘Russia did it’ was pushed by mainstream media (and politicians), it enabled further ‘aid’ to be sent to Ukraine, to ‘protect interests’.

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    Chervinsky, a senior figure within Ukraine’s Special Operations Forces, was allegedly the “coordinator” of the attack on the Nord Stream pipeline. The operation, executed with precision and secrecy, involved deep-sea diving and explosive charges, ultimately resulting in substantial damage to the pipeline which Ukraine had long complained would allow Russia to bypass Ukrainian pipes, depriving Kyiv of huge transit revenue.

    Of course, as one would expect, the Ukrainian Colonel, via his counsel, refutes any involvement in the pipeline sabotage, blaming Russia for this accusation.

    “Without merit, Russian propaganda is spreading all rumors regarding my participation in the assault on Nord Stream,” Chervinsky stated in a written statement to The Washington Post and Der Spiegel, which jointly investigated his activities.

    It would not have been out of character as WaPo reports that Chervinsky is a decorated officer with extensive experience in covert operations, reportedly including plans to ensnare Russian Wagner mercenaries and targeting pro-Russian separatists, highlighting a pattern of aggressive, high-stakes operations against Russian interests.

    Furthermore, WaPo reports that Chervinsky did not act alone and he did not plan the operation, again “according to the people familiar with his role,” but instead took orders from more senior Ukrainian officials, who ultimately reported to Gen. Valery Zaluzhny, Ukraine’s highest-ranking military officer, “according to people familiar with how the operation was carried out.”

    More problematically, Chervinsky’s involvement in the Nord Stream assault is in direct opposition to Zelensky’s public denials regarding Ukraine’s involvement.

    “I am president and I give orders accordingly,” Zelensky said in press interview in June, responding to a report by the Post that the U.S. Central Intelligence Agency had learned of Ukraine’s plans before the attack.

    “Nothing of the sort has been done by Ukraine. I would never act that way,” Zelensky said.

    Interestingly, WaPo reports that Chervinsky is being held in a Kyiv jail on charges that he abused his power stemming from a plot to lure a Russian pilot to defect to Ukraine in July 2022. Authorities allege that Chervinsky, who was arrested in April, acted without permission and that the operation gave away the coordinates of a Ukrainian airfield, prompting a Russian rocket attack that killed a soldier and injured 17 others.

    This WaPo report comes at a crucial time in the geopolitical chess-game, as the desire for more spending in what appears to be a lost cause in Ukraine is fading fast among Western populations (most notably US), and perhaps offers President Biden an ‘excuse’ to reduce aid in light of this ‘shocking development’ – which, of course, Washington has vehemently denied any involvement in (and denounced as a “reckless act”.

    But the twists and turns do not stop there as the backdrop to this unfolding drama includes Seymour Hersh’s explosive allegations regarding the CIA and the US Navy’s covert activities.

    Throughout “all of this scheming,” the source said, “some working guys in the CIA and the State Department were saying, ‘Don’t do this. It’s stupid and will be a political nightmare if it comes out.’”

    Nevertheless, in early 2022, the CIA working group reported back to Sullivan’s interagency group: “We have a way to blow up the pipelines.”

    Hersh, a renowned investigative journalist – who broke such well-known stories as the My Lai massacre and Abu Ghraib scandal and has long been known for impeccable insider sources – has previously reported on the deep entanglement of US intelligence in various global hotspots, hinting strongly at the complex interplay between Ukrainian ambitions and broader Western strategic objectives.

    The broader geopolitical context cannot be ignored.

    The US and NATO have been deeply involved in supporting Ukraine against Russian aggression, but the extent of their involvement in covert operations remains a subject of intense debate and speculation. The Nord Stream bombing, if indeed orchestrated by a faction within the Ukrainian military, could be seen as an extension of this proxy conflict, where Ukraine serves as a frontline in a larger strategic contest between Russia and the West, with CIA pulling the strings (just as Hersh concludes).

    In an interview with WaPo in June of this year, Zaluzhny said the CIA had never asked him directly about any attack on Nord Stream. He said that after the explosions, in September 2022, he received a phone call from then-U. S. Chairman of the Joint Chiefs, Gen. Mark A. Milley.

    “He asked me, ‘Did you have anything to do with it?’ I said, ‘No’. A lot of operations are planned, a lot of operations are going on, but we have nothing to do with it, nothing at all.”

    Some of those who described Chervinsky’s participation in the Nord Stream attack defended the veteran intelligence officer as acting in Ukraine’s best interests.

    So, why now? Suddenly various ‘sources’ come forward to offer a scapegoat for this “reckless act”?

    A distraction from potential confirmation of Washington’s involvement? … A potential release valve on the ‘blame Russia’ narrative enabling ‘peace’ conversations to take place? … An opportune excuse to curb ‘aid’ (pending an investigation)given the involvement of Gen. Valery Zaluzhny, Ukraine’s top military officer (and Zelensky’s denial) prompting questions of discord within the Ukrainian chain of command?

    Tyler Durden
    Sun, 11/12/2023 – 15:25

  • The House 'Concentrates The Mind' Of Hunter Biden With A Game-Changing Subpoena
    The House ‘Concentrates The Mind’ Of Hunter Biden With A Game-Changing Subpoena

    Authored by Jonathan Turley,

    Below is my column in the Messenger on the issuance of House subpoenas to the Biden family, including Hunter Biden. The move dramatically changes the profile of the investigation and the perils for the Biden family. After these subpoenas were issued, the House also subpoenaed an array of Biden associates connected to his alleged influence peddling or his art sales. After following the transfer of millions in foreign money, the Committee is drawing closer to the epicenter of the Biden family.

    Here is the column:

    The great English writer Samuel Johnson once told a friend, “Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.”

    The quote came to mind after reading the response of Abbe Lowell, legal counsel for Hunter Biden, to the issuance of subpoenas for Hunter and other family members by the House Oversight Committee. Lowell said that “Hunter is eager to have the opportunity, in a public forum” — but premised that on the condition that it be “the right time” for Hunter to speak. He also dismissed the committee investigation as a “political stunt.”

    It appears that further concentration is warranted.

    A congressional subpoena is really not an invitation for a sit-down at a convenient time.

    Hunter has spent years relying on denial and delay to fend off inquiries. With this subpoena, he will now have to choose between cooperation or contempt … on the committee’s schedule.

    The issuance of subpoenas to Hunter, his uncle, James Biden, and Biden family associate Rob Walker, changes the entire threat — and the range of options — for the Bidens. Attorney General Merrick Garland moved quickly and aggressively to prosecute Trump associates such as Steve Bannon who failed to appear or cooperate with Congress. The public will demand the same vigorous prosecution in the face of any similar contempt by Biden associates.

    Moreover, Hunter has tried a wide array of approaches to these allegations of influence peddling, from a plea for sympathy to threats of litigation. Too many in the media have been willing enablers of these shifting claims, including figures like Jimmy Kimmel who conducted a softball interview that portrayed Hunter as a hero rather than an alleged influence peddler.

    That may now change. If Hunter lies to congressional investigators, he can be charged with a federal crime. While the Justice Department allowed the statutes of limitations to run on various felonies, Hunter would be faced with a new set of charges with years for criminal charges to be brought by prosecutors.

    The situation is equally serious for the president’s brother, James, who has long been accused by House Republicans of influence peddling. Most recently, House investigators disclosed that, in 2018, James Biden received two loans totaling $600,000 from Americore Health, which they described as “a financially distressed and failing rural hospital operator.” The company has been referenced in past reports of alleged influence peddling by James Biden.

    According to the company’s bankruptcy proceedings, it made the loans “based upon representations that his last name, ‘Biden,’ could ‘open doors’” to new overseas investors. On the day he received the second loan transfer, James Biden allegedly sent a check for the same amount — $200,000 — to Joe Biden as a “loan reimbursement.”

    The House committee also reports finding a $40,000 check from James Biden and his wife to Joe Biden. Again, it was marked as a “loan reimbursement.”

    Congressional interviews can be perilous, but they are far more so when your client’s interview will cover years of transactions and statements. It presents a target-rich environment for investigators and ample opportunities for witnesses to make misleading or false statements.

    Hunter and his uncle may soon have company. In addition to a subpoena for Biden family associate Rob Walker, the House committee has requested voluntary transcripted interviews with Sara Biden, Hallie Biden, Elizabeth Secundy, Melissa Cohen and onetime Hunter business associate Tony Bobulinski.

    Figures like Bobulinski are likely to cooperate. He already has accused President Biden of lying about his lack of knowledge of foreign dealings, including giving detailed accounts of meeting with Joe Biden in a hotel.

    However, committees often first request voluntary interviews before issuing subpoenas. As with Hunter and James Biden, the committee has ample grounds to demand these interviews as part of both its impeachment inquiry and its oversight authority.

    In anticipation, perhaps, Hunter is reviving his addiction defense, even claiming that the investigations into his conduct are a blow against anyone who is fighting addiction. It is a curious effort since his counsel recently claimed that federal gun charges are invalid because his client had a period of sobriety just in time to sign the allegedly false gun application. That is the type of fluid, conflicted narrative that can produce criminal charges in congressional investigations.

    Samuel Johnson’s observation is particularly poignant in this case, given the subject. It was a reference to William Dodd, an Anglican clergyman, accused of being a spendthrift who became indebted due to his extravagant lifestyle. He forged a document to secure a “loan” to help clear his debts. Johnson tried unsuccessfully to keep him from the gallows, but he wrote a sermon before his death, titled, “The Convict’s Address to his unhappy Brethren.” Johnson was widely believed to have been the true author and defended his friend by saying that the hanging brought out the best of him.

    It remains to be seen if these subpoenas will bring out the best or worst of Hunter Biden. Thus far, he has received every break from federal prosecutors, from expired statutes of limitations to reported tip-offs on investigators’ interviews. That will now change. Either Hunter will concentrate his mind, or congressional investigators will do it for him.

    Tyler Durden
    Sun, 11/12/2023 – 15:10

  • San Francisco: Clean For Xi, Not For Thee
    San Francisco: Clean For Xi, Not For Thee

    Now wait just a damn minute…

    For decades, and with increasing severity, residents of San Francisco have been forced to navigate through shit-covered streets, drug dens and criminal elements, all while the city feigned the inability to do anything about it (despite employing 6-figure ‘poop patrollers’ to regularly pressure-wash the sidewalks).

    Now, with the announcement that the world’s top commie, Chinese President Xi Jinping, will meet with President Joe Biden in The Golden City, and San Francisco was miraculously able to clean itself up, seemingly overnight.

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    Needless to say, people are asking questions, as not only does San Francisco clearly have the capability to clean up its streets, it waited to do so until the president of China came to town.

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    Some locals say the homeless have just been ‘herded’ to a different part of town.

    Others noted that San Francisco is treating a foreign leader better than their own citizens. 

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    Again, WTF!?

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    Tyler Durden
    Sun, 11/12/2023 – 14:35

  • The "Safety" Dance
    The “Safety” Dance

    By Peter Tchir of Academy Securities

    On Wednesday, November 8th, Academy Asset Management (an affiliate of Academy Securities) celebrated the VETZ Veteran Impact ETF and Veterans Day at the New York Stock Exchange by ringing the closing bell. Safety was a big topic of conversation last week, and was highlighted during the geopolitical roundtable that Academy held at the NYSE. Issues covered included:

    • Geopolitical and physical safety
    • Investment safety
    • Cyber security (or safety to fit within our theme)
    • “Safe” assets
    • Technological, economic, and trade “safety”

    It doesn’t hurt that bringing up “The Safety Dance” brings back some good memories of a road trip to Montreal where we got to see Bootsauce live (a local up-and-upcoming band at the time). We all need some good things to reflect on when “safety” and “security” are top of mind.

    It was nice that markets cooperated with the Bottom Line from last weekend’s What a Fire (some “consolidation” with a bias towards owning the “everything rally”).

    We also got to discuss a variety of subjects (including “safety”) on Bloomberg TV on Wednesday (starts at around the 1:42:45 mark). Apparently, based on a lot of feedback, it was an interesting interview and worth watching. That feedback is at least partially supported by the fact that Bloomberg made a quick clip out of the Pain Trade portion of the interview and they used our line from the piece titled “Analysts Who Cried Recession” in the headline of a written report. Bloomberg also aired a replay of the energy discussion we had.

    However, let’s get back to the issue of “safety.”

    Geopolitical and Physical Safety

    The battles between Israel and Hamas have intensified. As our Geopolitical Intelligence Group (“GIG”) has repeated over and over, it will be very difficult for Israel to eradicate Hamas as a threat. The complex tunnel network makes the urban fighting even more difficult than what the U.S. experienced in Fallujah. Setting up operations and command & control centers in and around civilian facilities (like schools and hospitals, which is prohibited by the Geneva Convention) makes the fighting more challenging.

    On the “bright” side of things (to the extent that there is a bright side), so far there has been no escalation by other groups or countries in the region. That threat does exist, and will remain high while the fighting continues. This is a very tricky situation, but it has (so far) not escalated to the point of being a major global economic issue. However, I am hearing chatter about supply chain issues. The supply chain issues are centered around goods produced by Israel. There is also concern around the ability to ship things through the region (e.g. the Suez Canal) because the risk of escalation or even “accidents” is greatly increased.

    Ukraine’s “counteroffensive” is all but over, and it seems like Russia may be turning the tide. The likelihood of the “stalemate” continuing seems high (though presumably, the Russians will attempt another winter offensive once the ground freezes). Support for weapons deliveries is now far from universal. However, while the quality and types of weapons being delivered are superior to what was delivered early in the war, many members of the GIG question whether it is enough to allow Ukraine to push Russian forces back across their border. Nothing good is happening in the war which, paradoxically, may be a good thing as it could push both sides to the table (though that is not likely until the spring). It is still unclear to me if this would result in much of an immediate impact to the global economy or even the inflationary pressures in Europe (Ride of the Valkyries).

    “Safety” in Markets

    As stocks seemed to defy gravity (or at least higher bond yields) on Friday to finish the day and the week up (1.3% to 2.4%, depending on the index you track), many are looking at “hedges.” That is in the “normal” realm of discussion topics. What is abnormal is this background buzz about whether Treasuries are “safe” assets.

    The 10-year auction did well, but the 30-year auction struggled. That had absolutely nothing to do with the Fed. Yes, Powell spoke hawkish, but what else was he going to do or say? It has everything to do with:

    • Higher inflation expectations. The concepts of geopolitical inflation, ESG inflation, and supply chain inflation are now widely held views. We continue to expect 3% to 5% inflation over the next 3 to 5 years from these various forces. However, we don’t think that the Fed will react aggressively to persistent inflation near 3%, precisely because of where it’s coming from. It would be good to see better messaging out of D.C. regarding why this sort of inflation (which goes hand in hand with creating a safer and more secure economy) is not only necessary, but good for us longer-term!
    • Lack of control, discipline, and responsibility out of D.C. We discussed this in U.S. Credit on the back of some actions by the NRSROs (often referred to as rating agencies). Now, we are all watching the nation’s cost of borrowing rise rapidly as the combination of rising yields and more total debt becomes problematic. Some are using words other than “problematic” to describe the situation, but that is premature. Yes, we are on a bad trajectory, but both supply and the average coupon paid take time to reset significantly higher and too much is already priced in.

    Treasuries are still “safe,” but in no way as “safe” as they were a year or two ago. Why would we even bother discussing the difference between “safe” and “still safe, but not as safe as before?” That is probably a good question, but I also wanted to point out that certain mathematicians have varying degrees of “infinite.” How can something that is infinite be bigger or smaller than something else that is infinite? Well, it can be, and I think that logic (although it hurts my head) is why it is appropriate to think about what is “safe.”

    • I’m leaning towards being overweight floating rate assets. SOFR (for all intents and purposes) is set by the government/Fed. Sure it can spike for a day or two, but there are tools and policy support steps in place to keep it stable. The same cannot be said for longer-dated bonds. Longer-dated bonds, especially in this algo driven “faux” liquidity (Voldemort) environment, are susceptible to large moves. The risk of stops being triggered is real. Bond investors typically lose far more money from forced selling than they do from defaults. I think that being overweight floating debt (or short-term debt) could put you in a position to capture some “weird” days in bonds, where we get a large move in bond yields (3 or more standard deviations).
    • Corporates (and Munis) versus government debt. Municipalities typically must operate with a balanced budget. In addition, corporations have governance. I really like the front end (5-years and in, with some floaters) of high-quality IG (A or better, I wanted to say BBB or better, but figured that I’d get too much push back) as spreads will do well as some choose corporates over government debt.
    • Crypto. There, I said it! I’m not even sure that I really believe it, though it is coming up more often in discussions about “what is safe.” Clearly Bitcoin has surged recently and is back above $37,000. Other parts of the market have also done well. Certainly, hopes of a “spot” ETF have fueled those gains. Geopolitical unrest across the globe is likely helping as well, but I suspect that part of this rise is driven by investors looking for something “safe.” I’m not there yet (in terms of thinking that crypto is “safe”), but clearly others are and at least from a trading perspective, this theme could have legs as others think about what is “safe” or not.
    • Stocks. In a world where we don’t “trust” the “safe” asset, maybe something that tends to benefit from government spending is “safer.” The one flaw here is that the debt that is increasing due to higher borrowing costs only really helps the savers, so I’m not sure how well that translates into corporate earnings or multiples that investors will pay.

    Applying degrees of safety to government debt seems awkward, but we are there and not turning back any time soon.

    Cyber Safety

    We will be publishing some new “X Reports” (cyber, AI, and space focused) in the coming weeks, but two things really stuck out at the cyber/AI panel from Wednesday.

    • Quantum computing. The potential obsolescence of existing encryption.
    • How dangerous is the cyber world. Somehow the conversation on Wednesday turned to “number of attacks.” While some of the specific numbers are classified, the panelists seemed comfortable trying to point out that however high “we” (the audience) thought the numbers were, the real number was significantly higher. One example that was brought up, if I understood correctly, is that the NSA has a list of known malicious websites to which it helps block inadvertent access. This list is apparently in the billions! I started thinking about various letter and number combinations, and a billion seems like a lot. To put this in perspective, 1 million seconds is a bit less than 12 days. A billion seconds is over 31 years!

    Very little about the cyber panel was comforting. In addition, this week a ransomware attack on a foreign financial institution caused some disruption in the U.S. Treasury market. However, the fact that companies and countries are acutely aware of the risks (and are working to stop them) is good. Also, we don’t hear much about the “successes” because that is the nature of cyber “warfare.”

    Economic Safety

    One thing that I could see happening is that the U.S. could reach some sort of “accord” with China in the coming weeks or months.

    With so many “hot spots” across the globe, we could look to reduce tensions with China. Maybe we could back off on tariffs? We could also make some changes to what technology is prohibited from being traded.

    I suspect that any such deal would cause us some longer-term problems as it would considerably help the “Made by China” story (which is gaining traction) and increase the risk of China gaining access to technology that we are trying to prevent them from accessing. Of note, the latest phones in China use chips that are thinner than the U.S. expected them to have at this point.

    In the near-term, this kind of news would likely spark a major rally in risk assets.

    Again, it seems convoluted that something that I don’t like long-term would help in the short-term. However, it does seem like the U.S. currently holds the “weaker hand” in trade negotiations with China (despite the obvious evidence of their economy slowing).

    Bottom Line

    Add some equity hedges and favor the “everything rally.” If nothing else, let’s not forget that:

    “We can dance if we want to
    We can leave your friends behind
    Because your friends don’t dance
    And if they don’t dance
    Well, they’re no friends of mine.”

    I write this knowing that I am a horrible dancer but wanted to end on a positive note because while we need to worry about “safety,” we also need to enjoy life!

    Tyler Durden
    Sun, 11/12/2023 – 14:00

  • Russia Begins Evacuating Some 600 Citizens From Gaza Strip
    Russia Begins Evacuating Some 600 Citizens From Gaza Strip

    Russia has announced it has begun evacuating its citizens who have been trapped in the besieged Gaza Strip belatedly now that there has been more access through the Rafah Crossing. “The Emergency Situations Ministry together with Russian diplomats have organized the evacuation of civilians from the Gaza Strip,” a statement posted to Telegram indicated.

    “Over the past week, the operational group of the Emergency Situations Ministry of Russia has been working to coordinate the procedure and routes for the evacuation of Russian citizens trapped in the area of the Palestinian-Israeli conflict,” it continued.

    Starting last week, two Russian Il-76 transport planes have been parked in Cairo on standby in order to evacuate Russians from the Gaza Strip, state-run TASS has confirmed.

    Russian Emergencies Ministry, via AFP

    Russian diplomats cited in state media earlier this month estimated there are almost 600 Russian citizens seeking to evacuate Gaza. They’ve been prevented from leaving until now, as it has been the countries of the US, Israel, Egypt and Qatar involved in discussions overseeing evacuations through Rafah.

    Already a reported 60 Russian nationals have entered Egypt as of this weekend – this after over 80 were given Israel’s approval to leave, per RIA Novosti news agency. They are being sent to Cairo to be assessed by Russian emergency crews.

    The United States has so far evacuated hundreds of its dual citizens through Rafah, as many other countries have for weeks been scrambling to get theirs out too.

    The crossing has been subject to frequent, unannounced closures – and its vicinity even at times pummeled by Israeli airstrikes. Egypt is concerned over seeing a massive Palestinian refugee influx into its country. There’s been some limited numbers of medical evacuees.

    According to The Wall Street Journal, “Fewer than 50 people, including foreign passport holders, Egyptians and five wounded Palestinians, had entered Egypt on Friday before the crossings were halted” – after in total, “More than 2,000 people have crossed the border at Rafah since limited evacuations from Gaza to Egypt began on Nov. 1. The evacuations have been suspended a few times due to strikes.”

    Due to Washington’s closeness with Israel, there’s a widespread perception that the US has been given priority in terms of safely getting its hundreds of passport holders out of the war-ravaged Strip first.

    Tyler Durden
    Sun, 11/12/2023 – 13:25

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