Zerohedge

Putin Doubles Down On Backing Maduro As US Prepares To Seize More Oil Tankers The Kremlin confirmed that Russian President Vladimir Putin spoke by phone with Venezuelan President Nicolás Maduro on Thursday and reassured him of Moscow's support, at a moment he's facing likely regime change action at the hands of US military might. Putin expressed support for Maduro's rule "in the face of growing external pressure," but they also discussed their advancing a strategic partnership and the areas of ongoing economic and energy projects. Moscow has long stood by Caracas' side throughout years of growing isolation and sanctions. The Kremlin statement added that "Putin expressed solidarity with the Venezuelan people and reaffirmed his support for the Maduro government's policy of safeguarding national interests and sovereignty amid mounting external pressure." Wednesday saw elite American special forces operators board and seize a Venezuelan oil tanker. They were filmed rappelling onto the ship's deck from a helicopter, with rifles at the ready. This has serious repercussions for Russia too, given Moscow has been a longtime trading partner with Caracas, and it raises the potential that Russian tankers in the Caribbean could be intercepted. Perhaps even more notably, Reuters reports that Washington is preparing to intercept more ships transporting Venezuelan oil following the seizure of a tanker this week, as it increases pressure on Venezuelan President Nicolas Maduro, six sources familiar with the matter said on Thursday. Further direct interventions by the U.S. are expected in the coming weeks targeting ships carrying Venezuelan oil that may also have transported oil from other countries targeted by U.S. sanctions, such as Iran, according to the sources familiar with the matter who declined to be named due to the sensitivity of the issue. Last weekend Russian Deputy Foreign Minister Sergei Ryabkov said that his country would stand "shoulder to shoulder" with Venezuela in this time of crisis, but didn't offer anything concrete. "This is primarily due to the desire to assert the unquestioning dominance of the United States in the region, this is a trademark of the Trump administration," Ryabkov explained. According to some more of the latest developments via Newsweek: Initial reports on Wednesday cited U.S. officials saying the Coast Guard carried out the tanker seizure under international maritime law, targeting vessels tied to alleged illicit PDVSA-linked crude shipments. U.S President Donald Trump later confirmed the seizure, hinting that “other things are happening,” but offered no further details. A senior Trump administration official described the move as a “judicial enforcement action on a stateless vessel” last docked in Venezuela. Oil prices jumped on the news: Brent crude rose 0.8 percent to $62.35 a barrel, and West Texas Intermediate climbed to $58.46. Analysts warn the seizure may further strain U.S.–Venezuela relations and deter shippers already wary of handling sanctioned Venezuelan crude. Maduro has long accused Washington of seeking to overthrow him and seize Venezuela’s vast oil reserves; the nation’s production has fallen from over 2 million barrels a day to roughly 1 million. The seizure comes after Trump renewed threats of intervention by land, air, or sea, including a recent U.S. fighter jet flyover near Venezuelan airspace. Caracas condemned the action as “international piracy” and “brazen theft,” accusing the U.S. of trying to control its natural resources. Trump called the tanker the “largest ever” seized by the U.S. Some hawks have long viewed Venezuela as a Latin American satellite state of Russian influence... According to this column, "In Venezuela, the Department of War is indeed playing offense, as Trump promised, but the opponent isn’t really Maduro, it's Putin" pic.twitter.com/1W0ros2WvM — Michael Tracey (@mtracey) December 7, 2025 While Russia has been a longtime ally of President Maduro, it is unlikely to come to his defense in any direct way, also given the delicate and sensitive efforts to improve bilateral ties with Washington amid talks to de-escalate the Ukraine war. This despite Caracas having formally pleaded for more help from Moscow of late, including arms deliveries. Tyler Durden Thu, 12/11/2025 - 14:00

Solid 30Y Auction Stops Through, Easing Long-End Selloff Concerns After two impressive coupon auctions ahead of yesterday's FOMC, moments ago we got the week's final auction, a sale of $22BN in 30Y paper. The auction was solid: it through, with a bounce in the bid to cover and solid buyside demand despite a modest dip in foreign bidders. Here are the details. The auction stopped at a high yield of 4.773%, up from 4.694% in November, although unlike the November auction, today's auction stopped through the 4.774% When Issued by 0.1bps. This was the first through since September, and only the second in the past 6 months. The bid to cover rose to 2.365% from 2.295% in November, and was just fractionally above the 2.355% six auction average. The internals showed continued solid buyside demand: Indirects were awarded 65.4%, down from 71.0% in November. but stripping away that one outlier auction, the foreign demand was the highest since January. And with Directs taking 23.5%, in line with the recent average of 23.9%, Dealers were left with 11.2%, down from 14.5% last month and below the six auction average of 12.5%. Overall, this was another solid auction with impressive demand and refuting creeping concerns about rapidly rising long-end yields amid a global bond selloff, one which for now at least has avoided the US. Tyler Durden Thu, 12/11/2025 - 13:30

Dems Are "Greatest Con Artists" When It Comes To Inflation Disaster Authored by Steve Watson via Modernity.news, In a fresh interview, White House Press Secretary Karoline Leavitt exposed the left’s blatant hypocrisy on economic issues that have hammered everyday Americans for years. Leavitt hammered Democrats for posing as saviors on affordability while ignoring their own role in fueling runaway inflation during the Biden era. Appearing on Fox News, Leavitt labeled Democrats “the greatest CON ARTISTS in American politics!” She zeroed in on their empty rhetoric, stating, “They are pretending to champion the issue of affordability when they themselves created the worst inflation crisis in a generation.” ? BREAKING: Karoline Leavitt NUKES Democrats as "the greatest CON ARTISTS in American politics!" "They are pretending to champion the issue of affordability when they themselves created the worst inflation crisis in a generation." "You can't create a problem and then turn… pic.twitter.com/qBjEr1jQoV — Eric Daugherty (@EricLDaugh) December 9, 2025 She drove the point home, noting “You can’t create a problem and then turn around and say, I’m the best person to fix it!” Leavitt emphasized that voters see through the charade, adding, “that’s why President Trump was reelected to fix it. And that’s exactly what he’s doing.” The press secretary urged Republicans to step up their game, noting, “So as President Trump has been screaming from the rooftops, Republicans need to remain tough and smart, and they need to be more vocal about touting the accomplishments of this administration.” She wrapped up by dismantling the Democrats’ claims to represent ordinary folks: “You can’t say you’re for the working man and woman when you vote to raise their taxes. Republicans and President Trump have a proven economic formula and agenda that’s working. It’s focused on bigger paychecks and lower prices, and that’s what President Trump will talk about tonight.” Leavitt’s comments come against the backdrop of the Biden administration’s dismal economic track record, where inflation soared to levels not seen in decades. Under Biden, the average year-over-year inflation rate hit nearly 5%, with a peak of 9.1% in mid-2022 – a far cry from the stable, low-inflation environment of Trump’s first term.  Cumulative price increases reached a staggering 21.5% over Biden’s four years, squeezing family budgets on everything from groceries to housing. This wasn’t some unavoidable global hiccup; it stemmed from reckless spending sprees and anti-energy policies that crippled domestic production. Democrats flooded the economy with trillions in unchecked stimulus, igniting price hikes that disproportionately burdened working-class Americans. Meanwhile, their war on fossil fuels drove up energy costs, amplifying the pain at every turn. Contrast that with Trump’s approach, which prioritizes unleashing U.S. energy independence and cutting red tape to boost growth. The results are already showing, proving Leavitt’s point that Republicans hold the winning formula for prosperity. Nowhere is the Trump turnaround more evident than at the gas pump, where prices have tumbled to levels unseen in decades. Americans are stunned by the rapid drop, crediting President Trump’s pro-drilling policies and focus on energy dominance. In Colorado, one driver captured the widespread disbelief: “I ain’t seen the gas $1.83 since the F-ing early 2000s! What the F goin’ on? What the hell goin’ on?!” ? WOW! Americans can't BELIEVE how cheap President Trump got gas Colorado: "I ain't seen the gas $1.83 since the F-ing early 2000s!" "What the F goin' on? What the hell goin' on?!" ??pic.twitter.com/rZfhFt9HxX — Eric Daugherty (@EricLDaugh) December 9, 2025 This sentiment echoes across the nation as Trump’s agenda slashes costs that skyrocketed under Biden. During Biden’s tenure, average gas prices hovered around $3.50 per gallon nationally, with spikes above $5 in some states – a direct hit from policies that hampered drilling and pipelines.  Under Trump, Americans are seeing multi-year lows, with Colorado’s current averages dipping below $2.50 and trending even lower in spots. These plummeting prices aren’t magic – they’re the fruit of Trump’s drill-baby-drill strategy, reopening federal lands for exploration and fast-tracking infrastructure projects.  It’s a stark rebuke to the green zealots who prioritized climate virtue-signaling over affordable energy for families. The facts are clear: When America produces its own energy, prices fall, and independence grows. Trump’s policies are restoring that edge, putting more money back in pockets and easing the affordability crunch Democrats exacerbated. Leavitt’s call for Republicans to get louder about these successes couldn’t be timelier. With Democrats scrambling to rewrite history and claim credit for fixes they obstructed, the GOP needs to own the narrative. Trump’s playbook – tax cuts, deregulation, and energy freedom – is delivering bigger paychecks and lower costs, just as promised. As inflation cools and gas flows cheaply, Americans are experiencing the tangible benefits of ditching globalist agendas for pro-worker priorities. The contrast exposes the left’s con game: They broke it, but Trump is fixing it. Democrats’ affordability charade crumbles under scrutiny, while Trump’s results speak for themselves.  Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews. Tyler Durden Thu, 12/11/2025 - 13:05

US 'Answers' China By Sending Pair Of Nuclear-Capable Bombers Over Sea Of Japan On Wednesday we detailed that Japanese and South Korean fighter jets quickly answered a joint Russian-Chinese long-range bomber flight over the Western Pacific. Chinese J-16 fighter jets, two Russian Su-30 fighters and an A-50 early-warning aircraft were part of the provocative flight, which also passed close to South Korea. Russia's Defense Ministry (MoD) had confirmed its Tu-95MS strategic bombers and China’s H-9 strategic bombers conducted the eight hour flight over the Sea of Japan, the East China Sea and the Western Pacific - but that at no time was any country's airspace violated. Washington has quickly injected itself into the ratcheting situation, coming amid a diplomatic and economic standoff between Japan and China, by sending US nuclear capable bombers on patrol over the Sea of Japan. Handout photo from Japan's Ministry of Defense  Japan's government confirmed its fighter planes joined the US bomber patrol, which was clearly a show of force signaling China and Russia. "We confirmed the strong resolve of Japan and the United States not to allow any unilateral change of the status quo by force, as well as the readiness of the Self-Defense Forces and the US military," Japan's Defense Ministry said in a statement. The fresh exercise with the US Air Force was conducted in "an increasingly severe security environment surrounding our country" - it said. The flight included a pair of US B-52 bombers, escorted by Japanese F-35 stealth fighters and three F-15 jets. Beijing had presented the prior, longer flight as routine and in accord with international law. "We consider it a grave concern from the standpoint of Japan's security," Japan's Chief of Staff, Joint Staff General Hiroaki Uchikura, commented of the prior Chinese-Russian aerial patrol. Chinese Foreign Ministry spokesperson Guo Jiakun responded dismissively, saying "The Japanese side has no need to make a fuss about nothing or to take this personally." All of this is taking place as a carrier strike group is sailing close to Japan, and after weekend PLA drills saw monitoring Japanese planes come under radar lock. The US State Department has condemned this, saying "China's actions are not conducive to regional peace and stability." Much of these tensions hearken back to Prime Minister Sanae Takaichi's words to parliament last month wherein she left open the possibility of Japan sending its military to defend Taiwan in the event of a Chinese invasion. This refers to this NYT story (https://t.co/rdFRYttqF9) in which they reveal there now exists an "overmatch brief" at the Pentagon that details China vs US military power. The name says it all... Apparently when a senior US official read the brief he “turned pale” as he realized… https://t.co/fJBKMKzR08 — Arnaud Bertrand (@RnaudBertrand) December 11, 2025 Amid economic and diplomatic retaliation, including on the tourism sector, Japan was hoping for more vocal help from the Trump administration while feeling Beijing's wrath, but alas it hasn't come in a political form. However, the US sending bombers for an 'exercise' does seem fairly muscular. Tyler Durden Thu, 12/11/2025 - 12:00

Affordability Crisis: Challenging The Poverty Line Authored by Michael Lebowtiz via RealInvestmentAdvice.com, Michael Green, Chief Strategist and Portfolio Manager at Simplify Asset Management, wrote a provocative Substack essay, Part 1: My Life Is A Lie, that is sparking a debate among economists and raising awareness of the affordability crisis. It’s not just the wonky economists debating the merits of his article; The Washington Post, CNN (News Central), FOX Business (Charles Payne), and social media are also critiquing it. Michael uses the official poverty line calculation and what he deems the “Mathematical Valley” to help his readers better appreciate why affordability is becoming a hot topic.  The Poverty Line Per Michael Green: But there was one number I had somehow never interrogated. One number that I simply accepted, the way a child accepts gravity. The poverty line. I don’t know why. It seemed apolitical, an actuarial fact calculated by serious people in government offices. A line someone else drew decades ago that we use to define who is “poor,” who is “middle class,” and who deserves help. It was infrastructure—invisible, unquestioned, foundational. This week, while trying to understand why the American middle class feels poorer each year despite healthy GDP growth and low unemployment, I came across a sentence buried in a research paper: “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.” I read it again. Three times the minimum food budget. I felt sick. This article summarizes Michael Green’s perspective and opposing arguments regarding the poverty line. Bear in mind, as you read on, that there is no “right” poverty line. However, what Michael Green has successfully done is ignite a conversation about the large number of Americans who feel left behind economically and repeatedly raise affordability as a key political issue. The 1963 Poverty Line Benchmark Green’s analysis centers on the poverty line, which was established in the early 1960s by Mollie Orshansky. The original formula she developed was simple: take the cost of a basic basket of food for a family, multiply it by three (on the assumption that food accounted for about one-third of a household’s budget), and use that as the poverty threshold. Her benchmark was then adjusted for inflation each year, but the underlying assumptions about household spending and needs haven’t been updated since. Per Green: Orshansky’s food-times-three formula was crude, but as a crisis threshold—a measure of “too little”—it roughly corresponded to reality. A family spending one-third of its income on food would spend the other two-thirds on everything else, and those proportions more or less worked. Below that line, you were in genuine crisis. Above it, you had a fighting chance. Notably, Green emphasizes that Orshansky’s poverty line served as a threshold. Those with incomes beneath this threshold were in crisis. Orshanky’s Poverty Line Is Outdated Green emphasizes the items we spend money on, and their costs compared to food prices have changed significantly since then. For example, he points out: Housing costs as a percentage of income rose significantly. Cell phones didn’t exist. Healthcare costs have become the most significant expense for most families. A second income became a necessity for many families after the formula was devised, leading to increased childcare expenses. He also notes rising college and transportation costs. Simply, feeding a family no longer constitutes a third of total family budgets.  To wit, he states: Housing now consumes 35 to 45 percent. Healthcare takes 15 to 25 percent. Childcare, for families with young children, can eat 20 to 40 percent. Michael Green’s punchline: Which means if you measured income inadequacy today the way Orshansky measured it in 1963, the threshold for a family of four wouldn’t be $31,200. It would be somewhere between $130,000 and $150,000. What does that tell you about the $31,200 line we still use? It tells you we are measuring starvation. Green’s Data Analysis Green supports his theory with a basic family budget based on national averages. He applies it to a family earning the median household income of $80,000. The results, as we share below, cast significant doubt on the value of the current $31,200 poverty line. Furthermore, they argue that at least half of the nation is “living in deep poverty.” Per Green: I wanted to see what would happen if I ignored the official stats and simply calculated the cost of existing. I built a Basic Needs budget for a family of four (two earners, two kids). No vacations, no Netflix, no luxury. Just the “Participation Tickets” required to hold a job and raise kids in 2024. Using conservative, national-average data: Childcare: $32,773 Housing: $23,267 Food: $14,717 Transportation: $14,828 Healthcare: $10,567 Other essentials: $21,857 Required net income: $118,009 Add federal, state, and FICA taxes of roughly $18,500, and you arrive at a required gross income of $136,500. The graph below shows the cumulative price growth for $1,000 across many of the spending items Michael Green identifies above. As shown, except for transportation prices, all the others have significantly outpaced food prices. Thus, to Green’s point, a poverty line based on a steady price-consumption relationship for these goods and others in relation to food prices has become grossly ineffective. Hedonics Hedonics is a statistical method used by the BLS in the CPI report to distinguish pure price changes from changes in product quality and how those changes impact value. For example, if a new laptop offers twice the performance at the same sticker price as an old one, hedonics treats that as a quality improvement and will record an effective price decline. Supporters say it prevents overstating inflation as products improve. In contrast, critics argue that it can understate inflation and relies on modeling choices that are impossible to validate. Green is a critic. As we share below, he uses landline telephones and smartphones to make his point: To function in 1955 society—to have a job, call a doctor, and be a citizen—you needed a telephone line. That “Participation Ticket” cost $5 a month. Adjusted for standard inflation, that $5 should be $58 today. But you cannot run a household in 2024 on a $58 landline. To function today—to factor authenticate your bank account, to answer work emails, to check your child’s school portal (which is now digital-only)—you need a smartphone plan and home broadband. The cost of that “Participation Ticket” for a family of four is not $58. It’s $200 a month. Green states that food prices, not hedonics, are the only primary factors used to compute the CPI for food. In his calculations, the rate of inflation across many other CPI items greatly exceeded the CPI’s reported rate, in part due to faulty hedonics. Mathematical Valley Michael Green introduces what he calls a “mathematical valley.” This idea illustrates a trap within the American economic system. The valley symbolizes the area where working families earn enough to lose government benefits but not enough to cover the actual cost of middle-class economic stability. As families move from poverty into the lower middle class—usually earning between about $40,000 and $100,000—they lose access to safety net programs like food stamps, housing subsidies, or Medicaid. Still, their wages don’t keep up with the rising costs of housing, healthcare, childcare, and transportation. As a result, climbing the economic ladder can actually make families worse off financially because the loss of benefits outweighs the income gains. This Valley creates a perverse incentive to stay poor or near-poor, traps millions in financial insecurity, and fuels widespread cynicism among the working poor who feel punished for trying to get ahead. Green’s Summary The Orshansky poverty line is based on the amount required to cover a minimum food budget times three. Since she developed her formula in 1963, the price of food has tracked below the broad CPI inflation rate. At the same time, many essential items have grown faster than food prices. To wit, food-at-home expenditures currently account for only 5 to 7 percent of spending, not the 33% assumed by Orshansky. Therefore, because food prices are used as the basis for calculating the poverty line instead of a broader range of essential expenses, which have increased much more than food prices, the $31,200 poverty line is significantly understated. Additionally, the Mathematical Valley diminishes some incentives to earn more, thus resulting in affordability issues. Arguing Against Green While Michael Green makes a strong case that the poverty rate in this country is much higher than we think, and that affordability is becoming a hot topic, other opinions on Green’s article are worth considering. We summarize a few of them below. Child Care Costs Exaggerated: While childcare is costly, it isn’t part of most budgets once their children are past the age of four or five. Stuff is also cheaper: Green harps on things we buy that are more expensive, but some necessities, like clothing and electronics, are more affordable. Real incomes are rising. While a good argument, it raises questions about whether CPI is a good indicator of actual costs. What is the poverty line? To quote Alex Tabarrok of George Mason via the Washington Post: “He takes the poverty measure — and then turns it around and turns it into a middle-class measure,” Tabarrok said. “What do you need to be comfortable or thriving or middle class? Then, of course, you get a much bigger number. But to think that we today are living in some hellish landscape compared to our parents and even our grandparents is just a complete distortion of reality.” Our Take- Summary There isn’t a single inflation rate or poverty line. We live in a diverse country with many different regional economies. Also, families have unique needs and desires that can’t be summarized in one number. That said, no matter the poverty line, many American households are struggling. Remember when Obama ran on “Change”? He was followed by Trump, who ran twice on a similar message. The economic system remains broken for many Americans, and they are voicing concerns about affordability in election polls and sentiment surveys. Look at the graph below. According to the University of Michigan, consumer sentiment is at its lowest point since at least 1960! Of course, diagnosing the affordability problem and fixing it are two different things. But it’s hard to fix the problem without being aware of it. Hopefully, Michael Green’s article is raising enough debate and awareness on affordability to inspire action. Tyler Durden Thu, 12/11/2025 - 11:05

TIME Person Of The Year Are The Architects Of AI TIME magazine has picked the 'Architects of AI' as their person of the year for 2025, when the potential for AI "roared into view" with no turning back. "For delivering the age of thinking machines, for wowing and worrying humanity, for transforming the present and transcending the possible, the Architects of AI are TIME’s 2025 Person of the Year," the magazine announced.  2025 was the year when artificial intelligence’s full potential roared into view, and when it became clear that there will be no turning back. For delivering the age of thinking machines, for wowing and worrying humanity, for transforming the present and transcending the… pic.twitter.com/mEIKRiZfLo — TIME (@TIME) December 11, 2025 Whether you use it or not, AI has dominated headlines all year. On one hand, AI has proven useful in an increasing number of applications. On the other, it's potentially rotting our brains. What's hilarious is that less than 6 months ago, TIME published a piece titled "ChatGPT May Be Eroding Critical Thinking Skills, According to a New MIT Study."  In it, MIT researchers found that "the usage of LLMs could actually harm learning, especially for younger users." "What really motivated me to put it out now before waiting for a full peer review is that I am afraid in 6-8 months, there will be some policymaker who decides, ‘let’s do GPT kindergarten.’ I think that would be absolutely bad and detrimental," said the paper’s main author Nataliya Kosmyna.  Then there's 'vibe coding' - where 'programmers' simply ask an AI to write code for them instead of programming it manually, and of course, you can't scroll Facebook now (why would you?) without running into mountains of 'AI slop' - which spans everything from fake scientific journals to brain-rotting videos seemingly designed to pull western society's average IQ into double-digits.  McDonald's has unveiled its own AI-generated Christmas ad that somehow looks even worse than Coca-Cola's. Terrible AI visuals? Check. Horrible messaging? Check. A like-to-dislike ratio that says it all? Oh, you better believe that's a check:https://t.co/XQHnVLoG5T pic.twitter.com/Vestu3uNJS — 80 LEVEL (@80Level) December 8, 2025 In 2023, Elon Musk called AI one of humanity's "biggest threats," which is why he says he set off to create a "politically neutral" and "maximally truth-seeking" chatbot (Grok) with the aim of minimal bias.  Maximally truth-seeking is absolutely essential to ensuring a good AI future for humanity https://t.co/6QnWy3v1AB — Elon Musk (@elonmusk) July 25, 2025 "AI is more dangerous than, say, mismanaged aircraft design or production maintenance or bad car production, in the sense that it is, it has the potential — however small one may regard that probability, but it is non-trivial - it has the potential of civilization destruction," Musk told Tucker Carlson. "A regulatory agency needs to start with a group that initially seeks insight into AI, then solicits opinion from industry, and then has proposed rule-making."  According to TIME, "It was hard to read or watch anything without being confronted with news about the rapid advancement of a technology and the people driving it. Those stories unleashed a million debates about how disruptive AI would be for our lives. No business leader could talk about the future without invoking the impact of this technological revolution. No parent or teacher could ignore how their teenager or student was using it."  "Every industry needs it, every company uses it, and every nation needs to build it," Nvidia CEO Jensen Huang told the outlet. "This is the single most impactful technology of our time." Indeed. Tyler Durden Thu, 12/11/2025 - 10:05

Australia's Social Media Ban For Under-16s Comes Into Effect Authored by Victoria Friedman via The Epoch Times (emphasis ours), A social media ban for those younger than 16 in Australia came into effect on Dec. 10, with Australian Prime Minister Anthony Albanese hailing the world’s first restriction of its kind as giving children back their childhoods. Three 11-year-old boys use their phones while sitting outside a school in Sydney on Dec. 8, 2025. Rick RycroftAP Photo As of Dec. 10, according to the Online Safety Amendment (Social Media Minimum Age) Act, social media platforms must stop under-16s in Australia from signing up for accounts and must begin phasing out existing accounts for underage children. Facebook, Instagram, Kick, Reddit, Snapchat, Threads, TikTok, Twitch, X, and YouTube are now age-restricted platforms in Australia. These platforms are expected to take “reasonable steps” to prevent those younger than age 16 in the country from having or signing up for accounts, according to the Australian eSafety Commissioner website. Companies failing in this regard face fines of up to AU$49.5 million (US$32.9 million). The restrictions were brought in amid concerns over mental health, online harms, and screen addiction affecting Australian children. “Enforcing a minimum account age of 16 will create normative change and give young people a reprieve from powerful and persuasive design features built to keep them hooked, often enabling harmful content and conduct online,” Australian eSafety Commissioner Julie Inman Grant said in a statement on Dec. 10. She said that although no single measure is a “silver bullet,” the restrictions are part of a holistic approach that includes education and outreach. The eSafety Commissioner website states that platforms must use measures for age verification that respect privacy laws and digital rights, suggesting that platforms use “age-related signals” to work out whether someone is underage, such as how long an account has been active, analysis of the user’s language level, and behavioral and interaction signals. The website states that people who do have to prove their identity will not be forced to use a government ID, saying that the Social Media Minimum Age legislation “specifically prohibits platforms from compelling Australians to provide a government-issued ID or use an Australian Government accredited digital ID service to prove their age.” Platforms may offer it as an option but must also offer a reasonable alternative. Global Issue “This is the day when Australian families are taking back power from these big tech companies, and they’re asserting the right of kids to be kids and for parents to have greater peace of mind,” Albanese told ABC News Australia on Dec. 10. When asked what advice he can give to parents and children concerned about the impact of the loss of social media profiles, the prime minister said families need to have that discussion and talk these issues through. “We understand that this is going to be difficult,” Albanese said. “But it is so important that young people are given the opportunity to actually grow as young humans and to differentiate, as well, between what is real in human interactions and what they can often be exposed to online.” Australian Prime Minister Anthony Albanese speaks to reporters during a news conference at Parliament House in Canberra, Australia, on Aug. 26, 2025. Lukas Coch/AAP Image via AP The prime minister said that although his country is the first to have enacted such legislation, the impact of social media on children is a global problem. Other countries, including Malaysia and Denmark, as well as various states across the United States, are either bringing in similar controls or attempting to. “New technology can do wonderful things, but we need to make sure that humans are in control of our own destiny, and that is what this is about, particularly focused on our youngest Australians,” Albanese said. US, Australian Parents Back Bans A recent survey found that most parents in Australia and the United States are in favor of social media bans for those younger than 16. The Family Online Safety Institute found that 65 percent of Australian parents and 58 percent of U.S. parents supported such measures. Support among children aged 10 to 17 was much lower; 38 percent of young Australians and 36 percent of young Americans were in favor. In its report, published on Dec. 9, the institute found that 52 percent of U.S. parents and 42 percent of Australian parents are confident that social media bans will protect children’s mental health. Lower percentages of American (43 percent) and Australian (33 percent) youth hold the same view. However, both age groups shared the same beliefs about whether such bans would reduce young people’s overall screen use. “Many children, 64 percent in the U.S. and 59 percent in Australia, say that with a social media ban in place, they would spend more time on other digital platforms, including video games or text messaging,” the report states. “This could indicate that total screen time could remain the same, just with a shift to different digital platforms.” Tyler Durden Thu, 12/11/2025 - 09:35

Rep Massie Introduces Bill For US To Dump 'Cold War Relic' NATO Conservative and outspoken libertarian-leaning Republican Rep. Thomas Massie of Kentucky introduced legislation Tuesday for the United States for formally withdraw from NATO. Sen. Mike Lee is also helping lead the charge, introducing companion legislation in the Senate. The bill argues that the US military cannot be seen as the police force of the world, and that given NATO was created to counter the long-gone Soviet Union, which no longer exists, American taxpayers’ money would be better spent elsewhere. "We should withdraw from NATO and use that money to defend our own country, not socialist countries… US participation has cost taxpayers trillions of dollars and continues to risk US involvement in foreign wars… America should not be the world’s security blanket - especially when wealthy countries refuse to pay for their own defense," Massie said. Getty Images That latter part is likely designed to gain Trump's attention and sympathy, given the president has been emphasizing this point all the way back to his first term. The bill if passed would require the US government to formally notify NATO that it intends to end its membership and halt the use of American funds for shared budgets. Republican Senator Lee actually introduced similar legislation earlier this year, but it stalled in committee. Of course, most Congress members have viewpoints which merely reflect the 'pro-NATO' established position of the vast majority of Western politicians generally, so it's very unlikely to ever be passed. Massie wrote on X, "NATO is a Cold War relic. The United States should withdraw from NATO and use that money to defend our country, not socialist countries. Today, I introduced HR 6508 to end our NATO membership."  "Our Constitution did not authorize permanent foreign entanglements, something our Founding Fathers explicitly warned us against," he said additionally.  The NATO Act: Requires the President to formally notify NATO of U.S. withdrawal under Article 13 of the North Atlantic Treaty. Concludes that NATO’s original Cold War purpose no longer aligns with current U.S. national security interests. Finds that European NATO members have adequate economic and military capacity to provide for their own defense. Prevents use of U.S. taxpayer funds for NATO’s common budgets, including its civil budget, military budget, and the Security Investment Program. Senator Mike Lee (R-UT) has introduced companion legislation, S.2174, in the United States Senate. The text of the NATO Act is available at this link. "If you could snap your fingers and get us out of NATO today, would you?" Sen. Mike Lee, R-Utah, asked in a post on X. "Yes," Massie replied.https://t.co/Nifjbtt7O1 — Thomas Massie (@RepThomasMassie) January 29, 2025 Under pressure from Trump, NATO members agreed this year to gradually raise their defense spending to 5% of GDP, significantly above the old 2% guideline. European leaders were finally amenable to this, despite mocking it years ago during Trump's first term, due to the Russian invasion of Ukraine and the "threat" to Europe that they perceive. Moscow has denied time and again that it has 'expansionist' ambitions - yet US and EU leaders continue to portray Putin as some who dreams of reestablishing an old empire, or else revive Soviet power and borders. Tyler Durden Thu, 12/11/2025 - 09:15

Futures Rebound From Worst Levels As Oracle Plunges 11% On Cash Burn Fears US equity futures are lower, as lousy earnings and an ugly capex forecast by Oracle reversed the market euphoria following the "more dovish than expected" Fed rate cut. As of 8:00am ET, S&P futures are down 0.2% but well off session lows, having tumbled as much as 1% earlier; Nasdaq 100 is down 0.4%, reversing earlier losses of 1.5%. In premarket trading, Mag 7 stocks underperform: NVDA -1.7%, META -1.0%, TSLA -1.0%. ORCL plunged 11.2% in premarket trading after cloud sales missed estimates with free cash flow concerns rising again amid a surge in capex at the worst possible time. Bond yields are mostly unchanged; the USD is lower. Commodities are mixed: oil is down -1.4%; base metals and Ags are lower. Bitcoin slipped nearly 2% as it approached $90,000. Today's US economic calendar includes weekly jobless claims, September trade balance (8:30am) and September final wholesale inventories (10am) In premarket trading, Nvidia leads Mag 7 names lower after Oracle’s report dampened risk appetite in the AI sector (Apple +0.4%, Alphabet -0.2%, Amazon -0.6%, Microsoft -0.5%, Tesla -0.6%, Meta -0.6%, Nvidia -1.4%) Ciena (CIEN) soars 11% after the maker of equipment used by telecom companies posted reported adjusted earnings per share for the fourth quarter that beat the average analyst estimate. Diamond Hill Investment Group Inc. (DHIL) shares are halted after Genstar Capital-backed First Eagle Investments agreed to buy the boutique asset-management firm for $473 million in cash. Eli Lilly & Co. (LLY) gains 2% after a next-generation obesity shot helped patients lose almost a quarter of their body weight in 68 weeks. Gemini Space Station Inc. (GEMI) rises 15% after its application for a derivatives exchange was approved by the Commodity Futures Trading Commission, in a move that will allow the company to join the fast-growing field of prediction markets. Oracle (ORCL) falls 11% after the company forecast 3Q cloud sales growth below analyst estimates, raising concerns that supply constraints are preventing the cloud-infrastructure provider from converting its large backlog to actual revenues. Oxford Industries (OXM) sinks 21% after the owner of the Tommy Bahama apparel brand cut its adjusted earnings per share forecast for the full year, missing the average analyst estimate. The fourth-quarter net sales outlook also missed consensus. Planet Labs (PL) gains 17% after the satellite-imaging firm raised its sales and margin outlook, boosted by new and expanded contracts. Recent wins included an expansion to a contract with NATO and a deal with National Geospatial-Intelligence Agency. Caution toward the AI space returned with a vengeance, with Nvidia Corp. down 1.4% to lead Magnificent Seven losses as Oracle, once viewed as a bellwether of the AI investment boom, sank more than 12% in premarket trading after cloud sales missed estimates and the company lifted its 2026 capital spending outlook by $15 billion to $50 billion. Oracle’s results pushed worries about tech valuations and whether heavy spending on AI infrastructure will pay off back into focus, reviving concerns that fueled weeks of volatility in November. While the sector has powered the S&P 500’s stunning rally this year, spending fears have prompted some investors to rotate into other areas as the US economic outlook remains robust. "Markets have grown far more wary of AI-related spending, which is a sharp contrast with mid-2025 when anything hinting at higher capex sparked excitement,” said Susana Cruz, a strategist at Panmure Liberum. “Oracle has been the weakest link in all this, largely because it’s funding a big chunk of its investment with debt.”  In an attempt to reboot excitement in the sector, Microsoft’s CEO said the company will unveil a new model on Friday that is “going to take agents to the next level.”  Oracle’s earnings landed after the S&P 500 closed just shy of a record on Wednesday, lifted by a Federal Reserve interest-rate cut and Chair Jerome Powell’s sanguine economic outlook. Investors had taken comfort in Fed policymakers leaving the door open to more easing next year, even though the quarter-point cut drew three dissents. Traders stuck to bets on two cuts in 2026, even as the Fed’s new projections signaled only one such move. “The Fed’s ‘hawkish-but-bullish’ cut last night reinforces this: stronger 2026 growth, faster disinflation,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “Cuts are continuing, but they’re no longer automatic — and that’s usually a constructive backdrop for equities.” “The effect of Oracle has been greater than the Fed. This already tells us everything as we’ve been witnessing a strong concentration and one theme — AI — leading the market,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “This doesn’t mean that AI is gone or it’s a bubble, but we need to focus on a wider scale.” In other assets, the IEA trimmed estimates for a global oil supply surplus this year and next for the first time in several months as demand strengthens and output growth slows. And tariffs are back in focus, with Mexican lawmakers giving final approval for new duties on Asian imports. Technology stocks dragged Asian bourses lower overnight and looked set to do the same in Europe but the Stoxx 600 is now green. Construction, retail and industrial shares are leading gains. The construction and materials sector outperforms, while utilities lag. Software stocks including SAP SE and Sage Group Plc drop after US tech giant Oracle Corp. reported disappointing cloud sales and a jump in AI-related spending. Here are some of the biggest European movers on Thursday: Schneider Electric shares climb as much as 4.4%, the most since July, after the electrical power products manufacturer announced a share buyback program as it targets growing profitability over the next five years. Nilfisk shares surge as much as 35%, the most on record, after the cleaning products manufacturer received a takeover offer from Freudenberg Group. BNP Paribas Bank Polska shares rise as much as 3.5% to a record high, after the Polish unit of BNP targeted acceleration of loan growth and net income in its 2026-2030 strategy. Carl Zeiss Meditec shares gain as much as 8.6%, the most since April, after the German medical technology firm reported earnings which included a beat on quarterly revenues. Nordex  shares rise as much as 3.9%, on course to close at their highest level since 2007, after Kepler Cheuvreux upgraded its recommendation on the wind-turbine maker to buy from hold. RS Group shares rise as much as much as 5.5%, touching their highest levels since February, after JPMorgan upgraded the stock to overweight from neutral, as it sees a better year for European business services in 2026. Entain shares slip as much as 4.1% after the gambling firm announced that Chief Financial Officer Rob Wood will step down after 13 years. Naturgy shares drop as much as 6.9%, to the lowest level since April, after BlackRock’s infrastructure arm sold a stake in the Spanish company at a 5.4% discount to Wednesday’s closing price. SAP shares drop as much as 4.3% to their lowest level since October 2024, after US peer Oracle reported disappointing cloud sales. Ceres Power shares sink as much as 15% after Grizzly Research discloses that it’s short the clean-energy technology stock. Delivery Hero shares falls as much as 6.6%, putting the firm among Thursday’s worst performers in the Stoxx 600 index, after Citi downgraded it to sell amid increasing competition in the Middle East and North Africa region. Earlier,  Asian equities erased early advances and fell, dragged by a slide in technology shares as disappointing earnings from Oracle Corp. offset optimism over the Federal Reserve’s rate cut. The MSCI Asia Pacific Index fell as much as 0.7%, after rising 0.6% in morning trading Thursday. A gauge of the region’s technology shares dropped 1.7%. SK Hynix declined after Korea Exchange issued an alert on the stock and prohibited margin trading after big gains. Equity benchmarks in Taiwan dropped more than 1%, while those in Japan and South Korea also retreated.  In FX, the Bloomberg Dollar Spot Index is steady. The Aussie dollar is the weakest of the G-10 currencies, falling 0.3% against the greenback after soft jobs data. The Swiss franc is the best performer, rising 0.4% after the SNB left interest rates on hold. In rates, treasuries are little changed, with US 10-year yields near flat at 4.14% broadly holding Wednesday’s curve-steepening rally that followed the FOMC rate decision. OIS contracts price in around 50% odds of another 25bp rate cut in March. Trading of short-term rate products remains in focus as the Fed’s plan, also announced Wednesday, to buy $40 billion of Treasury bills per month. Yields are 1bp-2bp richer on the day with belly outperforming, steepening 5s30s spread by around 1bp. 10-year yields is near 4.135% after peaking near 4.21% Wednesday, highest since Sept. 4. The week’s Treasury auction cycle concludes with $22 billion 30-year bond reopening at 1pm New York time, following good demand for 3- and 10-year note sales Monday and Tuesday. WI 30-year yield near 4.78% is ~9bp cheaper than last month’s auction, which tailed by 1bp. In commodities, oil retreated toward the lowest since October, tracking wider losses in risk assets. WTI crude futures fall 1.3% to around $57.70 a barrel. Spot gold drops $15. Silver extended an all-time high past $62 an ounce. Bitcoin is down over 2% near $90,000. Looking ahead, today's US economic calendar includes weekly jobless claims, September trade balance (8:30am) and September final wholesale inventories (10am) Market Snapshot S&P 500 mini -0.5% Nasdaq 100 mini -0.7% Russell 2000 mini little changed Stoxx Europe 600 +0.1% DAX little changed CAC 40 +0.4% 10-year Treasury yield -1 basis point at 4.14% VIX +0.3 points at 16.1 Bloomberg Dollar Index little changed at 1209.7 euro little changed at $1.1704 WTI crude -1.6% at $57.54/barrel Top Overnight News Trump said any deal for Warner Bros. Discovery must include the sale of CNN, a potential wrinkle for Netflix’s bid. As the takeover fight plays out, the political divide grows. BBG NEC Director Hassett said the Fed has plenty of room to cut rates and probably will need to do some more, while he added that data could support a 50bps cut and they could definitely get to 50, or even more. Hassett also said a 25bps cut would be a small step in the right direction and that President Trump will make the Fed Chair choice in a week or two. US House of Representatives voted 312-112 to pass the USD 901bln defence spending bill China now has the biggest power grid the world has ever seen. Between 2010 and 2024, its power production increased by more than the rest of the world combined. Last year, China generated more than twice as much electricity as the U.S. Some Chinese data centers are now paying less than half what American ones pay for electricity. WSJ China put rate cuts in play after pledging to adopt supportive monetary and fiscal policy to bolster the economy. It will “flexibly” use interest rate and RRR cuts. Policymakers also plan to step up efforts to stabilize the housing market. BBG The BoJ sees limited need for emergency intervention to restrain rising bond yields, a move that runs counter to its effort to roll back stimulus. RTRS The SNB kept its interest rate at zero, in line with expectations, judging that a weakened inflation outlook doesn’t yet justify a return to negative borrowing costs. BBG Mexico approved tariffs of up to 50% on Chinese and other Asian imports, broadly aligning itself with US efforts targeting Beijing. China urged Mexico to “correct” its unilateral and protectionist practices. BBG Mexico’s tariff hike will affect $1 billion worth of shipments from major Indian car exporters, including Volkswagen and Hyundai. BBG Rents for Manhattan apartments surged to a record high in November. New leases were signed at a median of $4,750 in the month, up 13% from a year earlier and 3.3% from October. RTRS The United States can use other measures to recreate the roughly $200 billion in revenues it is collecting under tariffs based on a 1977 law if the Supreme Court strikes down use of that law, U.S. Trade Representative Jamieson Greer said on Wednesday. RTRS Trade/Tariffs UK pledges an additional GBP 1.5bln for NHS medicines as part of Trump tariff deal, according to FT. Britain is to reform the system to speed up investigations into unfair trade practices and is to sharpen trade defences by giving the trade secretary power to direct investigations, according to draft government guidance. Mexico approves wide-ranging tariffs of up to 50% on China, according to Bloomberg. China's Commerce Ministry later commented regarding Mexico's tariffs that it will closely monitor the implementation and will further evaluate the impact, while it added that the measures harm the interests of relevant trade partners, including China. India's CEA chief economic advisor said most trade issues with the US have been sorted out and will be surprised if there is no deal with the US by March. Mexico's tariffs to hurt Indian-made car exports of Volkswagen (VOW3 GY), Hyundai (5380 KS), Nissan (7201 JT) and Maruti Suzuki (7269 JT), according to Reuters Sources. It was earlier reported by Bloomberg that Mexico approved wide-ranging tariffs of up to 50% on China. A more detailed look at global markets courtesy of Newsquawk APAC stocks were ultimately subdued after failing to sustain the early positive momentum from the dovishly perceived FOMC where the Fed lowered rates by 25bps to between 3.50-3.75%, as expected, but with a less hawkish tilt than what Wall Street had anticipated, although much of the gains were eventually wiped out as a slump in Oracle post-earnings stoked tech and AI-related concerns. ASX 200 eked mild gains but with upside limited by the latest jobs data, which showed a surprise contraction in jobs that was solely due to a drop in full-time work. Nikkei 225 reversed its opening gains and more amid pressure from a firmer currency and as AI-exposed stocks were hit, including SoftBank. Hang Seng and Shanghai Comp gradually retreated with the mainland not helped by another liquidity drain by the PBoC, while trade-related uncertainty lingered, with China said to have held urgent discussions with major domestic tech firms on Wednesday about whether to permit purchases of NVIDIA’s H200 processors. Top Asian News HKMA cut its base rate by 25bps to 4.00%, as expected, and in lockstep with the Fed. China's Commerce Ministry said China has taken measures to grant exemptions on Nexperia chips for compliant exports intended for civilian use. China's Foreign Ministry on tensions with Japan said Japanese PM Takaichi's attitude makes it impossible to engage in dialogue. China's Commerce Ministry said non-state import quota for fuel oil in 2026 set at 20mln metric tons. China holds annual central economic work conference on Dec 10-11th, according to Xinhua; said China is to make use of RRR rate cut flexibly. Will continue to expand domestic demand. Will build strong domestic market. Will consolidate, stabilise economy. Will implement appropriately loose monetary policy. Will implement more proactive fiscal policy. Will maintain yuan exchange rate basically stable. Will step up counter-cyclical and cross-cyclical adjustment. Will optimise fiscal expenditure structure. Will emphasise resolving local fiscal difficulties. Will flexibly use policy tools including RRR, rate cuts. Will actively resolve local govt debt risks, prohibit new hidden debt. Will stabilise property market with city-specific measures. Encourages buying existing homes for social housing. Japan's Lower House passes supplementary budget bill for FY2025 to fund new economic policy package under PM Takaichi, according to Jiji. European bourses (STOXX 600 +0.2%) opened broadly lower, but managed to clamber off worst levels as the morning progressed, albeit marginally so. European sectors also held a negative bias as the open, but now display a mixed picture. Construction leads followed by Autos whilst Tech is weighed down by pressure seen in Oracle (-11% pre-market) after its earnings. Top European News ECB's Makhlouf said he is confident that medium-term inflation will be at 2%. SNB maintains its Policy Rate at 0.00% as expected; SNB reiterates it remains willing to be active in the foreign exchange market as necessary. Inflation in recent months has been slightly lower than expected. In the medium term, however, inflationary pressure is virtually unchanged compared to the last monetary policy assessment. Sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold. Although US tariffs and trade policy uncertainty weighed on the global economy, economic developments in many countries had thus far remained more resilient than had been assumed. SNB Chairman Schlegel said the Bank will continue to observe the situation and adjust monetary policy where necessary to keep price stability Banks' sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold. The low level of interest rates in Switzerland is having an effect via the exchange rate. Mid-term inflation pressure is practically unchanged since the previous quarter. Ready to intervene in the FX market if necessary. Policy continues to be expansionary, and supports inflation and the economy. Cannot say lower CPI outlook makes NIRP more likely. ECB proposes expanding the existing small banks regime to include more banks for supervision purposes. Recommends merging bank capital stack into 2 elements; a releasable and a non-releasable buffer. The non-binding pillar 2 guidance would be kept separate, on top of the releasable buffer. ECB design or role of additional tier 1 instruments could be adjusted to enhance loss absorption capacity. BoE's Bailey said BoE should not have interest rate risk on its balance sheet, the question is how fast to remove it. FX DXY attempted a recovery from the post-FOMC slump, which saw the index fall to a 98.592 low yesterday before extending lower to 98.537; though the index is now flat. A floor was found during APAC trade as risk began to wane. To recap, the Fed cut rates by 25bps to 3.5-3.75%, as expected, but in a dovish 9-3 vote split - Goolsbee and Schmid voted to leave rates unchanged, while Miran wanted a larger 50bps reduction. In terms of the session ahead stateside, weekly initial jobless claims (for the week of 6th December) are seen rising to 220k from 191k (last week's low reading was largely due to seasonal adjustment factors); continuing claims (for the week of 29th November) are seen ticking up to 1.947mln from 1.939mln. Wholesale sales and inventory revisions are also due today. High beta FX (CAD, GBP, NZD, AUD) are all softer, with state-side sentiment also lower following the Fed and Oracle earnings. AUD is the laggard following the Aussie jobs report overnight, which showed a surprise contraction in jobs that was solely due to a drop in full-time work. Little move was seen on China's Economic Work conference readout, which noted that China is to make use of RRR rate cut flexibly. EUR/USD is uneventful around the 1.1700 mark in a narrow 1.1683-1.1707 parameter. CHF was unmoved by the SNB rate decision, which was overall as expected with no fireworks (some expected a return to NIRP). SNB kept rates at 0.00% and reiterated its language on FX, that it “remains willing to be active in the foreign exchange market as necessary”. In terms of inflation projections, 2025 was unchanged, whilst 2026 and 2027 were revised a touch lower. The CHF, however, saw mild strength during the press conference, in which he said he cannot say whether a lower CPI outlook makes NIRP more likely. USD/CHF dipped as low as 0.7979 (vs high 0.8001). RBI likely selling USD to help INR avert a sharp fall, according to traders cited by Reuters Fixed Income USTs continue to build on the post-FOMC upside; in brief, the FOMC cut rates by 25bps to 3.50-3.75%, as expected, while the vote split was a bit more dovish than expected. For US paper specifically, the Fed also said it will start technical buying of Treasury bills to manage market liquidity, in which the initial round will total around USD 40bln in Treasury bills per month to help manage market liquidity levels. Currently trading in a 112-11 to 112-18+ range, and another leg higher would see a retest of the high from 8th December at 112-19. From a yield perspective, the FOMC sparked a bull steepening, which has continued into today. Now attention turns to a number of US data points, incl. Jobless Claims, Wholesale Sales and then a 30-year auction, which follows on from a strong 3yr and mostly positive 10yr. Bunds follow USTs, and are now flat to trade in a current 127.36 to 127.77 range. Newsflow is incredibly light this morning, with price action essentially a paring of some of the upside seen following the FOMC. Elsewhere, UBS analysts recommend a long 10yr Bund trade, target 2.75% yield; said term premia priced by markets are too high – for reference, current 10yr yield is at 2.85%. Elsewhere, Gilts remain bid, as UK paper plays catch-up to peers – price action muted and within a narrow 91.22 to 91.38 range. Italy sells EUR 5bln vs exp. EUR 4.0-5.0bln 2.35% 2029, 3.00% 2029, 2.70% 2030 BTP Commodities Crude benchmarks have sold off throughout the APAC session and into the European session as risk tone sours across equity markets despite an FOMC cut that was perceived dovish. After opening at USD 58.92/bbl and USD 62.43/bbl respectively, WTI and Brent trended c. USD 1.30/bbl lower to session lows of USD 57.57/bbl and USD 61.20/bbl as equities sold off. The selloff completely reversed Wednesday's gains following the seizure of an oil tanker off the coast of Venezuela. Spot XAU peaked to USD 4248/oz early in the APAC session as the metal continued its gains following the dovish FOMC announcement. As the APAC session continued, however, XAU reversed lower as the dollar began to strengthen and equities sold off. In past sessions, XAU has been moving in-tandem with equities despite its safe haven characteristics, perhaps explaining the selloff in the APAC session. 3M LME Copper gapped higher and drove higher to a peak of USD 11.72k/t, USD 30/t shy of ATHs, before falling back lower as global risk tone soured. The red metal stabilised at USD 11.58k/t and has since remained in a tight USD 60/t band. Russia's Energy Ministry expects oil refining and gas and coal production to remain at 2024 levels in 2025, via RIA. Geopolitics: Middle East US officials discussed hitting the UN Palestinian refugee agency with terrorism-related sanctions, according to sources cited by Reuters. US State Department condemned the Houthis' ongoing unlawful detention of current and former local staff of US missions to Yemen. Geopolitics: Ukraine Ukrainian navy drones in the Black Sea struck the "Dashan" vessel that is part of Russia's shadow fleet, while the attack led to the tanker being disabled. The EU is looking to reach an agreement by Friday to lengthen the freeze on Russian assets using emergency powers, according to Bloomberg citing people familiar. Russia's Lavrov said Russia wants a package of documents on a long term sustainable peace for Ukraine. Should be security guarantees for all sides. Ukrainian drones struck Lukoil's oil extraction platform in the Caspian sea, according to SBU source cited by Reuters; oil and gas production halted. Russia’s Lavrov said European peacekeepers in Ukraine "will Be A Target ", via Interfax. Geopolitics: Other US seized an oil tanker off the coast of Venezuela, while President Trump said the vessel was seized for a very good reason, and Attorney General Bondi said the oil tanker was used to transport sanctioned oil from Venezuela and Iran. Furthermore, Guyana's government said the oil tanker seized by the US was falsely flying a Guyana flag and that it will take action against the unauthorised use of the Guyanese flag. Russia's Kremlin said President Putin plans to meet Turkey's President Erdogan during his visit to Turkmenistan. Russia's Kremlin said Russia remains open to investment. It was reported by the WSJ that US companies could invest in strategic sectors from rare-earth extraction to drilling for oil in the Arctic and help restore Russian energy flows to Western Europe and rest of the world. US Event Calendar 8:30 am: Dec 6 Initial Jobless Claims, est. 220k, prior 191k 8:30 am: Nov 29 Continuing Claims, est. 1938k, prior 1939k 8:30 am: Sep Trade Balance, est. -63.1b, prior -59.6b 10:00 am: Sep F Wholesale Inventories MoM, est. 0.1% DB's Jim Ried concludes the overnight wrap Last night saw the market rally resume after the Fed cut rates by 25bps, which included enough dovish hints to pare back the hawkish repricing over recent days. So the S&P 500 (+0.67%) closed less than 0.1% beneath its record high, whilst 2yr Treasury yields (-7.7bps) saw their best day in two months. However, that momentum behind risk assets has been lost overnight, as disappointing results from Oracle after the US close pushed their shares down -11.52% in after-hours trading. And in turn, S&P 500 futures are down -0.90% this morning, with those on the NASDAQ 100 down -1.20%. So even as investors were reassured by the Fed’s latest rate cut, familiar concerns about AI are still very much top of mind right now.  In terms of the Fed decision, the FOMC delivered a third consecutive cut that took the target range for the fed funds rate down to 3.50-3.75%. This was a 9-3 decision, with Governor Miran again advocating for a larger 50bp cut, whereas regional Fed presidents Goolsbee and Schmid favoured no change. The cut was accompanied by implicit signals that the Fed could remain on hold in early 2026. For instance, the dot plot showed the median participant only expecting one more rate cut in 2026, while new wording on “the extent and timing” of further rate adjustments signaled a possible pause ahead. Powell also emphasised that the FOMC was “well positioned to wait and see how the economy evolves” as recent easing had brought the policy stance “within a broad range of estimates of neutral”. However, this cautious guidance was accompanied by several dovish-leaning elements. Notably, the updated economic projections struck a sanguine tone, with real GDP revised higher across the 2025-27 period, whilst 2026 headline and core PCE inflation were revised -0.1pp and -0.2pp lower to 2.4% and 2.5% respectively. The statement also dialed up the tone on the recent uptick in unemployment while Powell sounded a bit more sanguine on upside inflation risks, saying that “inflation has come in a touch lower” recently and that “most of the inflation overshoot is from tariffs”. Our US economists’ base case remains that Powell has now delivered the last rate cut of his tenure as chair, but continued labor market weakness could swing the FOMC to cut again in the next few months (see their full reaction note here). Away from rates policy, the Fed also announced they’ll begin reserve-management purchases of Treasury bills. Those will start at $40bn a month from next week and are expected to “remain elevated for a few months” before slowing significantly after the April tax payment window. This will mark the first sustained increase in the size of the Fed balance sheet since the Fed ended QE in spring 2022. And it was a slight surprise this was announced at yesterday’s meeting, even if a shift towards more active liquidity management had been expected by early 2026. After the decision, markets saw the FOMC’s signal as favourable to expectations of a 2026 rate cut. So even though a rate cut is only priced at 20% by the next meeting in late-January, futures currently signal a 52% chance of a cut by March as we go to press this morning. Moreover, there was a dovish shift in the futures curve, with the rate priced by the December meeting down -6.6bps on the day, meaning that 55bps of cuts were priced for next year by the close. In turn, that meant 2yr Treasury yields fell by 5 to 6bps intraday after the FOMC to register their biggest daily decline in two months (-7.7bps to 3.54%), and 10yr yields fell by -4.1bps on the day to 4.15%. That trend has continued overnight as well, with the 10yr yield down another -2.1bps to 4.13%. And this also weighed on the dollar index, which fell -0.44% yesterday to a six-week low. Although the Fed’s decision helped to support equities, with the S&P 500 (+0.67%) closing just -0.06% below its all-time high, it’s been a very different story overnight following Oracle’s earnings. They reported after the US close, but their revenues fell short of analysts’ estimates, with their share price down -11.52% in after-hours trading. So that’s pushed US equity futures lower this morning, with those on the S&P 500 down -0.90%, whilst those on the NASDAQ 100 have fallen -1.20%. That more negative trend has continued in Asia overnight, where there’ve been losses across the major indices. So the Nikkei (-0.97%), the Shanghai Comp (-0.75%), the CSI 300 (-0.52%), the Hang Seng (-0.22%) and the KOSPI (-0.20%) are all lower this morning. And those losses have been particularly sharp for tech stocks, with the Hang Seng Tech index down -1.12%. Bond yields have also moved lower, which partly reflects the Fed and the wider risk-off tone this morning, but we also saw Japan’s 20yr auction have its strongest demand since 2020. Moreover, the latest employment data from Australia showed an unexpected contraction of -21.3k in November (vs. +20.0k expected), which has raised doubts about the likelihood of a near-term rate hike by the RBA. Indeed, yields on 10yr Australian government bonds are down -8.9bps this morning, and the Australian dollar is the worst-performing G10 currency, down -0.59% against the US dollar. Before the Fed and Oracle’s earnings, investors had priced in a growing chance of an ECB rate hike for 2026, which is now seen as a 40% chance. That gave the European bond selloff a fresh dose of momentum, which was particularly clear at the front end of the curve. For instance, the 2yr German yield (+2.2bps) rose to 2.17%, its highest level since the fiscal stimulus announcements were made in March. And that was echoed across the continent, with yields on 2yr French (+2.4bps) and Italian (+1.6bps) debt also at their highest in months. However, the long-end was more subdued, with yields on 10yr bunds (+0.1bps), OATs (+1.2bps) and BTPs (+0.3bps) seeing smaller increases that still left them beneath their closing level on Monday. In the meantime, equities saw a relatively stronger performance, with the STOXX 600 (+0.07%) inching up after three consecutive declines. On the theme of central banks, yesterday also brought the Bank of Canada’s decision, who held their policy rate at 2.25% as expected. This followed rate cuts at the previous two meetings, but this time their statement said that if the economy and inflation evolved in line with their October projections, then they felt rates were “at about the right level”. In turn, Canadian government bond yields fell back, with the 2yr yield down -6.0bps on the day, whilst the 10yr fell -4.4bps. Finally, there wasn’t too much data yesterday, although we did get the Employment Cost Index (ECI) from the US for Q3. That came in a bit softer than expected at +0.8% (vs. +0.9% expected), and it was also the slowest pace since Q3 last year. So that helped to ease fears about inflationary pressures, particularly with the year-on-year pace now down to +3.5%, the slowest since Q2 2021. To the day ahead now, and data releases include the US weekly initial jobless claims, along with the trade balance for September. Otherwise from central banks, we’ll hear from BoE Governor Bailey. Tyler Durden Thu, 12/11/2025 - 08:39

The Orbital Data Center Space Race Has Officially Begun We've highlighted a new theme: data centers in low Earth orbit, or at least the race to get these AI chips into space. Week after week, the news flow shows a new space race taking shape, as Elon Musk, Jeff Bezos, and Sam Altman appear to be the major players in the scramble to get chips into orbit - almost certainly joined by other billionaires quietly working behind the scenes. The latest news on the AI chips-in-space theme comes from a Bloomberg report that Musk's SpaceX is planning to raise $30 billion at a $1.5 trillion valuation, with some of the proceeds expected to be used for space-based data centers. We must note that Musk has the only capable space program that could rapidly deploy space-based data centers at scale; neither China nor Russia, nor even Bezos' Blue Origin, currently has this capability. Meanwhile, ChatGPT founder Sam Altman attempted to buy rocket startup Stoke Space this past summer, with the intent of joining the space race to launch AI chips into orbit. A new Wall Street Journal report on Wednesday afternoon added more color about the Musk-Bezos space-based data center race: Bezos' Blue Origin has had a team working for more than a year on technology needed for orbital AI data centers, a person familiar with the matter said. Musk's SpaceX plans to use an upgraded version of its Starlink satellites to host AI computing payloads, pitching the technology as part of a share sale that could value the company at $800 billion, according to people involved in the discussions. The push to move data centers into low Earth orbit is all about sidestepping Earth's power constraints and soaking up precious resources, harnessing essentially limitless solar energy, and leveraging space's near-zero thermal environment to keep advanced AI chips cool. "Taking resource-intensive infrastructure off Earth has been an idea for years, but it has required launch and satellite costs to come down. We are nearing that point," Will Marshall, CEO of satellite operator and builder Planet Labs, told WSJ. Making spaceflight affordable has been SpaceX's focus with its reusable rockets, and once Starship becomes commercialized, costs should drop even further. Let's remind readers that SpaceX is effectively America's rocket program - and it leads the world by light-years. This makes Musk and xAI uniquely positioned to scale data centers quickly. SpaceX also leads in terms of spacecraft upmass... WSJ noted that Google and Planet Labs plan to conduct a 2027 space test using satellites equipped with Google AI chips. Early tests aim to demonstrate feasibility, while full-scale systems will require thousands of satellites to match a single large terrestrial data center. Latest from Musk about data centers in space.  The lowest cost place for data centers is space when 300 GW of computer data center you can power and cool in space when you have continuous solar and no batteries needed. @elonmusk pic.twitter.com/J5EMJt8rRw — Marc Benioff (@Benioff) November 19, 2025 And Bezos.  Jeff Bezos plans to build a data center in space within the next 10+ years. Unlimited solar energy available 24/7, space is an ideal location for data centers.$AMZN AWS is set to make major moves out there. pic.twitter.com/KJCEO973eQ — Bourbon Capital (@BourbonCap) October 3, 2025 Why stop with data centers in low Earth orbit? How about on the moon? We're sure Starlink's in-space mesh network can help with that... So crypto mining on the moon as well? All things space are about to kick off with SpaceX's IPO slated for next year.  Tyler Durden Thu, 12/11/2025 - 08:25