Month: August 2024

Bitcoin prices fell this morning in reaction to the lackluster CPI (as rate-cut expectations dipped). That selloff broke through $60,000 and accelerated further as headlines broke that the US government moved 10,000 seized Bitcoin from the Silk Road dark web marketplace to a Coinbase wallet Wednesday.

According to the onchain analytics firm, Arkham Intelligence, the funds were seized during the Silk Road raid and are currently valued at $593.91 million.

It’s not immediately clear whether the United States plans to sell or custody the assets.

The transaction follows a previous move of approximately $2 billion worth of Silk Road Bitcoin in late July.

As a reminder, the price action (dowwward) in various cryptocurrencies is front-running expectations of the creditors getting their hands back on these assets and selling them…

…the only problem with that argument is, as we detailed here, the creditors are not selling, they’re HODLing…

“Now, seeing the continued growth and acceptance of their industry, many Mt. Gox creditors may have become even stronger believers in Bitcoin and its future potential, choosing to hodl further.”

So, its really only the algos, reacting to the headlines, that is driving any dips.

“This resilience suggests that while short-term volatility is possible, the long-term impact on Bitcoin’s market dynamics will likely be minimal.”

The US government currently holds roughly 203,000 BTC valued at approximately $12 billion at the time of this writing.

The decision by the Biden/Harris administration in the last few weeks to seemingly accelerate the dumping of their ‘seized’ Bitcoin comes right as former President Trump outlined his Bitcoin strategy (including creating a Strategic Bitcoin Reserve).

The Harris campaign continues to desperately try and placate the crypto community – despite almost four years of nothing but hate for the sovereign currency and its heretical holders. Let’s see how Crypto-Kamala’s aides explain the ongoing dumping of assets.

 

Authored by James Rickards via DailyReckoning.com,

When a relatively unknown individual steps on the political stage as a candidate for high office, both sides race to “define” the candidate and stamp his image in the public mind.

Since the Democrats knew they would pick Gov. Tim Walz of Minnesota for their VP candidate, they had time to pre-produce the public image.

He’s not particularly fit or good-looking. No problem! They pushed him as a folksy, down-to-earth Midwestern type who could relate to everyday Americans and understand their problems.

Maybe he’s a bit on the heavy side but that’s OK, so are millions of Americans, and it just shows he likes to chow down on popular meals like burgers, hot dogs, chili and whatever else you might find at a barbecue.

Well, it took the Republicans a few days to catch up, do the needed research and tell us about the real Tim Walz. It turns out he is one of the most far-left radical politicians in the history of America.

Some “Moderate”

During COVID, he enforced mask mandates, vaccine mandates and lockdown rules in more draconian ways and for far longer than any other governor. He even set up a “snitch” hotline so citizens could rat out their neighbors for not wearing masks or for going outside for a walk.

This is what we came to expect in communist countries during the Cold War; and under Walz, Minnesota was no different.

He also discarded the traditional Minnesota state flag and replaced it with a new star-on-blue motif that closely resembles the national flag of Somalia (Somalis are a large part of the population of Minnesota, thanks to Obama’s policy of concentrating immigrant nationalities in targeted areas to gain political power. This is how we ended up with politicians like the Mogadishu-born Ilhan Omar.)

That’s just the beginning of how radical Walz is. He favors “abortion” up to and beyond a live birth (that’s infanticide). He lied about his military record (something called “stolen valor,” which is condemned by all who have served honorably).

He made Minnesota a “trans sanctuary” state (to permit genital mutilation of out-of-state minors without parental notification) and spent his honeymoon in Communist China.

During the George Floyd riots in 2020, Walz did nothing to stop the burning and looting and his wife even opened the windows in their home so she could enjoy the smell of burning tires.

The Democrats and the mainstream media can give you a false narrative about Walz being the “Midwest Dad.” The facts say otherwise.

Why Walz?

Why did Kamala pick Walz?

Many expected that she’d select Gov. Josh Shapiro of Pennsylvania. After all, Pennsylvania is a key swing state that could help deliver the election to the Democrats. Walz is from Minnesota, which is already a blue state (it’s possible Trump could win Minnesota, but not likely).

But Shapiro is Jewish and has publicly supported Israel in its war against Hamas in Gaza. That would have been deeply unpopular with much of the Democratic Party’s young base, which is for the most part fervently anti-Israel.

By going with Walz, it seems the strategy was to shore up the base, while hoping the “Midwest Dad” narrative would pick off enough uncommitted voters in swing states like Wisconsin and Michigan who would otherwise vote for Trump.

Democrats would try to frame him as a moderate alternative to voters who didn’t really like Trump, but would hold their noses and vote for him anyway.

The narrative about Walz being a moderate is collapsing, as I described above, but that seems to have been the strategy. Nice job, Kamala.

North Korea-Level Propaganda

Meanwhile, the mainstream has fallen predictably into line to support her. She’s opposing Trump, so that’s to be expected. They’d literally support a corpse if the alternative was Trump. The same people who announced in 2021 that Harris was being appointed the “border czar” are now trying to tell you that she was never the border czar.

It’s North Korea-level propaganda.

All Harris did was go to Guatemala and babble about “root causes” of immigration before washing her hands of the whole thing. The catastrophic results are all around us.

Of course, if you were Kamala Harris you wouldn’t want it known that you were the border czar. She failed miserably at her supposed mission to control illegal immigration. The level of illegal immigration we’ve had under this administration is nothing short of staggering.

In that sense you can say that she actually succeeded as border czar because much of the Democratic Party wants open borders and unfettered immigration (future voters — and in many cases probably current voters!).

But you won’t hear that in the mainstream media.

The Ditz Candidate

They also like to cite questionable polls claiming that Harris is now leading Trump in certain battleground states, attempting to give the impression that she really is a strong candidate and actually popular with voters.

But not too long ago, Harris had a favorability rating of only 29% in a CNN poll. That was lower than Joe Biden himself before he announced that he won’t seek reelection! Even Joe got 39% in favorability ratings.

Harris cannot speak extemporaneously, a key skill for debaters and candidates. She resorts to third-grade baby talk about “big yellow school buses” and “the big moon up in the sky.” She laughs in a high-pitched tone at inappropriate times, no doubt a nervous tick to cover for the fact that she can’t think on her feet.

Biden may be demented, but Harris is a dunce. The Democrats will have as much difficulty covering up her low IQ as they did covering up Biden’s dementia.

That’s why they’re carefully crafting her public appearances in order to limit opportunities for her to say something embarrassing.

Will Joe Step Down?

All Harris has done since being handed the baton from Biden is to read pre-prepared remarks off a teleprompter. She’s not taking questions from reporters or doing any interviews, even from a friendly host who’d ask her softball questions.

It’s clear that she’s being coached on how to act. Her handlers know how bad the cackling makes her sound, so they’ve probably been coaching her to dial it down.

One strategy to increase Harris’ popularity going into the election would be for Biden to resign the presidency in the days ahead (for “health” reasons maybe), make Kamala the president and let her reap the benefits of running as an incumbent president instead of an anointed elite outsider.

It would also be a way for Biden to get presidential pardons for the Biden Crime Family without having to pardon himself. That’s a smart strategy. For that reason, you can count on Biden not to do it.

I’m still predicting that Trump will win in November, but you can expect the media to do everything it can to get Kamala Harris elected.

Ukrainian officials have touted that part of the success of its troop incursion into Russia’s southern Kursk region is that Moscow has been forced to divert some of its soldiers from front line fighting in the Donbass to Russia’s southern border oblasts.

“(The Russians) are now trying to stop our advance; they have pulled in reserves, which has benefited our defense forces in other areas, because it has become easier to work there,” a Ukrainian military commander identified as Dymtro Kholod told CNN Wednesday. 

But there are conflicting claims and counterclaims, with the Russian defense ministry (MoD) announcing it the latest statement that its forces continue to “repel an attempt by the Ukrainian Armed Forces to invade the territory of the Russian Federation” – now just after a week after the cross-border offensive began.

The ministry further explained that its ground troops, supported by air and drone strikes, had successfully prevented Ukrainian troops from making further advances “deep into Russian territory.” It mentioned that it defended the small settlements of Skrylevka and Levshinka, which lie about 20km from the border. “The attempts by enemy mobile units using armored equipment to break through deeper into Russian territory have been repelled,” the MoD said.

President Zelensky, however, has continued to maintain that his troops are “moving further” into Russia, which also involved major overnight drone attacks targeting four Russian airfields in the “largest attack” of its kind since the war began. 

“In the Kursk region, we are moving further. From one to two kilometers (0.6-1.2 miles) in different areas since the beginning of the day,” Zelensky announced on social media. He claimed that “more than 100 Russian servicemen” have been captured in recent days of fighting and that this will “speed up the return home of our boys and girls.”

Amid a lot of ongoing speculation over Zelensky’s ultimate aim and motives for this cross-border operation which started on Aug.6, the Ukrainian leader unveiled on Wednesday that Ukraine is seeking to establish a “buffer zone” inside Russia to prevent attacks on Ukrainian citizens.

Interior Minister Ihor Klymenko has outlined on Telegram “The creation of a buffer zone in the Kursk region is a step to protect our border communities from daily enemy attacks.” He said that Sumy along has seen 20,000 Ukrainians evacuated through the course of the war.

Ukraine releases more footage of captured Russian soldiers in Kursk region. pic.twitter.com/gaynBt5GSF

— Clash Report (@clashreport) August 11, 2024

Surprisingly, Klymenko suggested the indefinite occupation of Kursk territory that Ukraine has captured over the past week. He asserted that Russian citizens in Kursk “were abandoned by Russia without the most necessary things” and that the Ukrainian military is looking to supply “the needs of the locals for drinking water, food, medicines and hygiene kits so that we can organize humanitarian aid as soon as possible…”

Similarly, Ukrainian Minister for Reintegration of Temporarily Occupied Territories Iryna Vereshchuk spoke the same day about establishing a “security zone” in areas which have been taken:

“There are Russian civilians within this zone. They are protected by international humanitarian law, which Ukraine fully complies with,” she said, so the Ukrainian military would “conduct humanitarian operations to support civilians within the mentioned zone” as well as open corridors for civilians to evacuate, either into Ukraine or within Russia.

One of the ironies in all of this is that previously in the war President Putin himself spoke about establishing a ‘buffer zone’ on the other side of the Ukraine border, to prevent southern Russian settlements from coming under attack.

It seems Ukraine’s offensive is coming at a very high cost, per Russian sources:

The Ukrainian armed forces lose up to 270 soldiers and 16 armored vehicles, the Russian Ministry of Defense (MoD) said on Wednesday.

“In the past day, the losses of the armed forces of Ukraine amounted to 270 military personnel and 16 armored vehicles, including two tanks, an armored personnel carrier Stryker, 13 armored combat vehicles, as well as 10 vehicles and a 122-mm D-30 howitzer,” the ministry said, adding that Russian troops repelled six Ukrainian attacks around five settlements in the region.

Ukrainian troops lost up to 2,300 servicemen and 37 tanks during their offensive in the Kursk Region, the ministry added.

A high-risk, ultra provocative PR-driven decision of Zelensky…

As I said, Kursk attack is PR-driven decision of Zelensky: “Zelenskyy: The Kursk disaster was a symbolic beginning of Putin’s rule, and now it’s end for him. “We see how Russia really moves [under Putin’s rule]: 24 years ago, there was the Kursk disaster – the symbolic beginning… pic.twitter.com/fsxHLwRjBG

— Ivan Katchanovski (@I_Katchanovski) August 12, 2024

But now, adding insult to injury, Zelensky is even reportedly talking about the imposition of martial law in Kursk areas under control of the Ukrainian army. He said later in the day Wednesday that there’s still a “good pace” of advance into Russia.

Authored by Michael Snyder via TheMostImportantNews.com,

Why are retailers closing thousands of stores if the U.S. economy is in good shape?  Of course the truth is that the U.S. economy is not in good shape at all.  The cost of living crisis is absolutely crushing working families all over the nation, and U.S. consumers simply don’t have as much discretionary income as they once did.  Needless to say, our retailers are highly dependent on discretionary spending, and many of them have been reporting very disappointing sales numbers recently.  Sadly, the problems that our retailers are experiencing are only going to intensify as U.S. economic activity continues to slow down.

According to CBS News, U.S. retailers have announced the closing of more than 3,000 locations in 2024…

The retail industry is going through a tough time as it copes with inflation-weary consumers and a rash of bankruptcies, prompting chains to announce the closures of almost 3,200 brick-and-mortar stores so far in 2024, according to a new analysis.

That’s a 24% increase from a year ago, according to a report from retail data provider CoreSight, which tracks store closures and openings across the U.S.

The closing of 3,200 stores sounds really bad, but it is important to note that the quote above is from a CBS News story that was published on May 13th.

Since that time, there have been a lot more store closing announcements.

For example, last week we learned that Big Lots plans to close nearly 300 stores…

Two months after announcing plans to close about 40 stores nationwide due to financial woes, Big Lots has indicated on its website it intends to close almost 300 stores.

The discount retailer announced in June it was facing several areas of financial strain that would result in 35-40 stores closing across the country. However, an audit of the Big Lots website on Aug. 2 reveals almost 300 stores are slated to close in the United States, including 18 in New England.

Meanwhile, a home goods retailer that has been in business since 1890 is preparing to permanently shut down over 170 stores…

A home goods retailer is closing all of its more than 170 stores after filing for bankruptcy.

Conn’s HomePlus, based in The Woodlands, Texas, operates stores in 15 states, including 11 in Louisiana. The company began in 1890 in Beaumont, TX. The Conn’s HomePlus store on Derek Drive in Lake Charles is included in the closures.

Burdorf Interiors has been in business for even longer, but now they have also reached the end of the road…

Burdorf Interiors, a 157-year-old local business, is shutting down, according to Louisville Business First.

The company announced the closure in a news release Wednesday.

“It’s with a heavy heart that we are announcing the closing of Burdorf Interiors,” the release said. “The business has been open in several locations throughout Louisville since 1867.

Just think about that.

They opened their doors just after the end of the Civil War, and now it is all over.

Drug store chains have been hit particularly hard by our ongoing retail apocalypse.

Rite Aid was once a retail powerhouse that was expanding like crazy, but now they plan to close 780 stores…

Rite Aid, which was based in East Pennsboro Township near Camp Hill for decades and is now based in Philadelphia, filed for Chapter 11 bankruptcy in October to begin restructuring to significantly reduce its debt.

Since October, the company has announced in bankruptcy filings the closing of 780 stores.

Of course Dollar Tree has Rite Aid beat.

During the course of the next few years, Dollar Tree plans to close almost 1,000 stores…

Dollar Tree on Wednesday said it plans to close nearly 1,000 stores over the next several years, after disclosing significant losses in its latest earnings report.

The discount store chain lost $1.7 billion in the fourth quarter, down sharply from earnings of $452.2 million a year ago.

Unfortunately, this is just the beginning.

Analysts at UBS are projecting that approximately 45,000 stores will be permanently shut down in the U.S. during the years in front of us…

About 45,000 retail stores may close in the coming years as retail’s physical footprint increasingly shifts to serve as fulfillment and distribution centers, UBS analysts led by Michael Lasser said in an April 22 report.

Can you imagine what this is going to look like?

Our landscape is going to be peppered with thousands upon thousands of derelict buildings that have been boarded up to keep criminals out.

Of course some of our core urban areas already have lots and lots of empty commercial spaces that used to be thriving retail locations.

One of the primary reasons why retailers are shutting down so many locations in core urban areas is because shoplifting in this country has risen to unprecedented levels.

According to a recent survey that was conducted by LendingTree, close to a fourth of the entire population admits that they have shoplifted…

Nearly one-quarter of American adults have shoplifted, according to a new survey from LendingTree, the personal finance site. Roughly 1 in 20 consumers have shoplifted within the past year.

Shoplifting is a complicated crime. The motive can range from adolescent rebellion to adult thrill-seeking to hand-to-mouth poverty. Many of us steal things we don’t need and won’t use.

“I’ve learned that a lot of people have given shoplifting a try for lots and lots of reasons,” said Matt Schulz, chief credit analyst at LendingTree.

At this point, shoplifting has become one of our primary national pastimes.

And it is increasingly becoming a “team sport” in many parts of the nation.

On Friday night, a team of approximately 50 teens stormed a 7-Eleven in Los Angeles and completely ransacked it…

A large group of juveniles used “bodily force” to ransack a 7-Eleven store in Los Angeles Friday night, authorities said.

A Los Angeles Police Department spokesperson confirmed to KTLA that about 50 teens descended upon the 7-Eleven at the corner of Olympic and La Cienega boulevards in Pico-Robertson at 7:50 p.m.

The teens, many of whom were wearing masks, forcibly stole property from the store, the spokesperson said.

This particular incident barely made a blip in the news cycle.

Why?

These days, giant mobs loot stores so frequently that this sort of thing isn’t even considered to be very newsworthy anymore.

The thin veneer of civilization that we are all depend upon is disintegrating right in front of our eyes, and our once great country is descending into complete and utter chaos.

If things are this bad now, what will our cities look like once economic conditions become far more painful than they are currently?

*  *  *

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Dolton Deputy Police Chief Lewis Lacey, who works in the same town as “America’s Worst Mayor” who we highlighted just yesterday, was indicted on Monday of this week for bankruptcy fraud. 

Prosecutors have charged a 61-year-old Matteson resident with bankruptcy fraud, making false statements, and perjury, each carrying up to five years in prison, according to ABC Chicago.

They allege that since the 1980s, Lacey has filed multiple bankruptcy cases, including in 2019 and 2020, to avoid paying a $43,000 settlement. He is also accused of lying about his income, bank accounts, and marital status in these filings. At the time of the alleged offenses, Lacey was a police officer in Dolton.

A Justice Department press release stated he was “allegedly engaging in a scheme to conceal assets and income from creditors and prevent payment of the settlement of a lawsuit.”

“According to the indictment, Lacey since the 1980s has filed numerous personal bankruptcy cases in the U.S. Bankruptcy Court for the Northern District of Illinois, including petitions in 2019 and 2020,” it continued.

“The recent petitions automatically stayed enforcement of a settlement agreement Lacey had reached in 2017 with the plaintiff in a lawsuit in state court.  The indictment alleges that Lacey filed the 2019 bankruptcy petition shortly after the plaintiff moved to enforce the settlement agreement, accusing Lacey of still owing $43,000 of the $55,000 settlement.”

“The indictment alleges that Lacey made several materially false and fraudulent representations in oral statements and documents submitted in the bankruptcy cases, including underreporting his monthly income and concealing bank accounts that he controlled,” it says. 

His lawyer told ABC “The government and some people in Dolton have it out for the mayor. And so they decided to go and try to get to the mayor through other people that served under her,” the report says. 

Recall yesterday we wrote about Dolton mayor Tiffany Aiesha Henyard, who disappeared after an investigation into the village’s spending revealed more than $3.5 million in debt, “out of control” credit card spending and $40,000 spend on Amazon purchases in one day. 

Village trustees hired Lightfoot to address concerns about excessive spending, including taxpayer-funded billboards, ads, lavish dinners, and trips, according to CBS. Earlier this year it was reported Henyard spent $7,650 on hair and makeup after taking office and billed the city for it. 

Authored by Andrew Korybko via substack,

Ukraine’s sneak attack against Russia’s Kursk Region was the subject of Putin’s meeting with leading government officials and the governors of three western border regions on Monday. His remarks were concise but still conveyed a lot of important information. He began by reminding everyone that “the main objective for the Defence Ministry is to force the adversary to withdraw from our territory and reliably secure our state border by working together with the Border Service.”

To that end, “The Federal Security Service must work with the National Guard as part of the counter-terrorist regime and effectively counter the enemy’s sabotage and reconnaissance groups. The National Guard has its own combat objectives too.”

This aligns with last week’s announcement by the National Antiterrorism Committee of a new counterterrorism operation in Bryansk, Kursk, and Belgorod Regions. Putin thus only considers this attack to be an act of terrorism and not a full-fledged invasion for now.

Officially recognizing it as an invasion would prompt the question of why a state of war hasn’t been declared in response, which in turn could put pressure upon the authorities to mobilize the population through mandatory conscription, at least in the affected regions. Putin is reluctant to further inconvenience the populace and is also presumably being advised that this isn’t necessary, hence the decision behind describing everything that way that he did.

He then segued into sharing his well-known view that the West is using Ukraine as its proxy for waging war on Russia, adding that in this particular context the aim is “to strengthen their negotiating position for the future.” This was followed by him ruling out any talks so long as they continue targeting civilians and threatening nuclear power plants. The innuendo is that Ukraine must accept his ceasefire proposal from earlier this summer, or be forced to do so by its patrons, as the basis for resuming negotiations.

The next point that Putin made was to draw attention to Kiev’s “primary military objective” in Kursk, which he said is “to halt the advance of our forces” in Donbass, where they’ve increased the pace of their gains by fifty percent along the entire front. This conforms with the assessment of most analysts. After that, he shared his opinion that the final goal behind its sneak attack was “to create discord and division in our society”, though this failed and actually had the opposite effect of strengthening resolve.

The rest of the transcript concerns the reports that Putin received from the high-ranking attendees, including about the ongoing evacuation of nearly 200,000 people, with the only important insight that he added was to warn the Governor of Bryansk Region not to take his region’s calmness for granted. This hints that he’s not ruling out more cross-border incursions, or rather acts of terrorism as they’re officially referred to by the Kremlin for now, thus meaning that Russia shouldn’t let its guard down anytime soon.

Left unstated throughout the meeting is what’s being planned once “the main objective” of “forc[ing] the adversary to withdraw” is achieved, which can be interpreted as a sign that they’re not ready to consider that just yet since they might expect it to still be some time before that happens. This contrasts with Putin’s warning earlier this spring of a buffer zone to protect Belgorod Region, which led to Russia’s push into Ukraine’s Kharkov Region, so the same might not be attempted in Ukraine’s Sumy Region.

From this, it can be intuited that the aforesaid push didn’t adequately meet Russia’s envisaged goal, which isn’t to imply that it failed but just that changing circumstances impeded its success. Accordingly, the decision might have been made to either temporarily hold off on replicating this model there until “the main objective” is achieved or to do away with it completely in favor of something else, whatever that might be. Either way, it’s worth wondering what’ll follow Ukraine’s expulsion from Kursk Region.

The least likely scenarios are that another speculative ‘gentleman’s agreement’ with the US over the security of Russia’s western regions will be reached or that Russia will launch a full-fledged offensive into Ukraine’s neighboring Chernigov, Sumy, and/or Kharkov Regions. About those two, they were touched upon in an intriguing analysis for RT by Sergey Poletaev titled “Kursk attack: This is why Zelensky felt emboldened”. Here are the relevant excerpts from his piece:

“The relative calm along the 1,000-kilometer border for two and a half years likely wasn’t coincidental. We can suggest there were agreements between Moscow and Washington, specifically with the administration of US President Joe Biden.

…

Under the Kremlin’s strategy, there is no clear-cut response to such a bold raid – the answer since February 2022 involves using all available resources while avoiding general mobilization or self-depletion. Moscow does not have another army ready and standing by to occupy newly vulnerable border areas.”

The first suggestion is surprising since Putin candidly admitted last December how naïve he was about the West in the years before he was forced into ordering the special operation. The possibility that he was “led around by the nose” yet again after that is difficult to fathom, but maybe he finally learned his lesson if it’s true. As regards the second suggestion, Russia’s limited push into Kharkov Region lends credence to the claim that it indeed “does not have another army ready” to carve out more buffer zones.

That could change if the military-strategic dynamics of this conflict, which have thus far been in Russia’s favor the entire year, suddenly turn against it. That’s not expected to happen barring a black swan, however, so no mobilization of the sort required for carving out more buffer zones is foreseen. Unless Ukraine firmly entrenches itself in Kursk Region and/or has success in launching more sneak attacks against other Russian regions and/or Belarus, then Russia should continue gaining ground in Donbass.

In that scenario, either the tempo of that front will remain the same until winter at least, or Russia might finally achieve a military breakthrough that enables it to force Ukraine into accepting most (if not all) of its terms for peace. By officially regarding the latest cross-border incursion as an act of terrorism instead of a military invasion, Putin signaled that he’s holding off on diverting forces from that front, which thus prevents Kiev from achieving its “primary military objective”.

For that reason, it can be concluded that he’s intent on staying the course and won’t let events in Kursk distract him from that. He correctly senses that the conflict might soon be approaching an inflection point after which everything could then accelerate if the Ukrainian front lines in Donbass collapse like he hopes will happen. Unless a black swan appears, Russia will therefore keep pursuing its maximum goals in the conflict, which rest in forcing Ukraine to agree to all of its military, political, and strategic demands.

The opposition and Saudi-affiliated Iran International is reporting that the Central Bank of Iran has been hit with a large-scale cyber attack which is caused major disruption to the banking system across the Islamic Republic.

The outlet says the impact of the attack if far-reaching, suggesting it could be one of the largest cyberattacks on Iran’s state infrastructure to date, coming amid soaring regional tensions with Israel.

Earlier Wednesday, Iran’s Supreme leader, Ayatollah Ali Khamenei, warned the country about threats of irregular warfare, stating, “The exaggeration of our enemies’ capabilities is intended to spread fear among our people by the US, Britain, and the Zionists. The enemies’ hand is not as strong as it is publicized. We must rely on ourselves.”

He continued, “The enemy’s goal is to spread psychological warfare to push us into political and economic retreat and achieve its objectives.”

Could this reported major cyber attack be the work of Israeli intelligence? Likely many in Iran believe so.

Ironically it comes on the heels of claims by US officials and in Western media that Iranian state hackers are actively working to influence and interfere in the upcoming US elections.

However, there has been no proof of these allegations, but only references to poorly made spoof websites which seek to influence either conservative or liberal voters.

As for these Wednesday reports of a major cyber attack targeting Iranian banking, a story picked up in Israeli media as well, Iranian officials have not given official confirmation and state media sources remain silent thus far.

Last December, a major cyber attack took out a significant part of the country’s gas stations, as it targeted widely used payment software, and Tehran attributed the disruption to Israel and the US.

#BREAKING A major cyberattack has targeted the Central Bank of Iran (CBI) and several other banks, leading to widespread disruptions in the country’s banking system, @IranIntl has learned. Initial assessments indicate this could be one of the largest cyberattacks ever against… pic.twitter.com/6TiuNrxosL

— Iran International English (@IranIntl_En) August 14, 2024

Israel has long been known to target Iran’s nuclear program with cyber attacks, some of which have reportedly been successful in crippling the operations of key sites in the past.

Two weeks have passed since Haniyeh’s killing and Israeli leaders are still bracing for some kind of potential big retaliation from Iran. If it is accurate that Iran’s central bank has been crippled in the attack, and if Israel is behind it, this could convince Tehran to finally pull the trigger on its long awaited retaliation.

By Stefan Koopman, Senior Macro Strategist at Rabobank

Buyer’s Market

US producer price inflation was soft in July. Both headline (0.1% m/m and 2.2% y/y) and core (0.0% m/m and 2.4% y/y) PPI inflation came in below expectations. Goods prices rose by 0.6% m/m, while services fell by 0.2% m/m, suggesting that a fall in retail markups drove down this otherwise hotter report. This indicates that retail firms are losing pricing power and are discounting more heavily, as reflected in various company earnings reports.

The components of the PPI that feed into the PCE price gauge, due later this month, were also relatively benign, adding to the case for investors betting on lower interest rates from September onwards. Following this muted report, stocks ended the US session firmly higher, with the S&P 500 and Nasdaq 100 posting 1.5-week highs and adding further to the market’s recovery from the early-month selloff. Bond yields fell, with the 10-year UST yielding 3.84%, down 5 bps from before the report. In Europe, the German 10-year rate has fallen to 2.18%. The dollar softened, with the DXY at 102.69 and EUR/USD just below the 1.10 handle.

Earlier yesterday, the NFIB small business optimism index surged to a two-year high in July, driven by expectations of an improving economy. This optimism is likely influenced by confidence in a Trump victory following President Biden’s weak performances and the ensuing uncertainty about the Democratic presidential candidate during much of July. However, this optimism may have waned by the time the August survey is conducted. The survey also showed that the share of firms planning price increases fell to 24%, the lowest since April 2023, though still historically elevated. Businesses are increasingly concerned about softening demand amid persistent input price pressures, and less so about labor shortages. This ongoing transition from seller’s markets to buyer’s markets marks a post-COVID priority change. The survey indicates that businesses are dealing with margin squeezes more by slowing wage increases rather than resorting to layoffs.

The UK is also transitioning from seller’s markets to buyer’s markets. The headline CPI ticked up slightly this morning, from 2% to 2.2%, but this was a tenth less than expected. The rise in the annual rate is mainly due to energy prices, which fell less than they did a year ago. This was somewhat offset by hotel prices, which saw a monthly fall of 6.4% compared with a rise of 8.2% a year ago. This print helped lower the services inflation figure, suggesting that June’s elevated services print, which raised doubts about an interest rate cut ahead of the August MPC, was driven by one-offs. Indeed, both core CPI and services CPI, which are more indicative of pricing power, fell more than expected, to 3.3% and 5.2% y/y respectively.

Yesterday’s UK labor market figures showed that regular pay growth slowed to 5.4% y/y, in line with expectations. Total pay growth, including bonuses, slowed significantly to 4.5% from 5.7%, with last year’s one-off NHS bonuses affecting the y/y comparison. Meanwhile, the number of job openings continues to decline and is now at 884,000, barely above pre-COVID levels. This all suggests a labor market that is gradually transitioning into a buyer’s market too. Based on the relationship between vacancies and unemployment, we expect regular wage growth to fall further towards the 4-4.5% range in the coming months.

The MPC welcomes these numbers, as it ex-post validates their narrow decision to cut rates by 25bp. We don’t see this immediately leading to another 25bp cut at the forthcoming meeting, as this month’s 5-4 split and the current guidance clearly suggests that the MPC wants to take a gradual approach. It does, however, set us up for another Bank of England cut come November.

Speaking of cuts, the RBNZ today lowered the official cash rate (OCR) by 25 bps to 5.25%. We had previously forecasted a cut this month, but recently pushed this call to October due to resilience in non-tradable inflation. However, the RBNZ indicated that the output gap appears more negative than previously thought, with downside risks to employment and growth becoming more apparent. The RBNZ now forecasts a recession in the second half of this year, with the published OCR track implying a little over two rate cuts before Christmas and a terminal rate of 2.98% in Q3 2027.

We have long held the view that the New Zealand economy is weakening quickly and that rate cuts would need to come sooner rather than later (until recently, the market consensus was for cuts to begin in 2025). Nevertheless, we believe the RBNZ’s estimates of the terminal rate published today look low compared to comparable economies. Our forecast is that the RBNZ will cut rates five times in total, reaching an OCR of 4.25% by July next year. This is partially informed by our belief that the R* is higher than the RBNZ’s estimates and our expectations of persistent supply-side inflationary pressures. However, we agree that the risk skew for this forecast is to the downside.

One of the largest food industry mega-deals in nearly a decade was unveiled as snack giant Mars announced a deal to purchase food maker Kellanova for nearly $30 billion. This marks one of the biggest M&A deals this year, second to Capital One Financial’s agreement to purchase Discover Financial Services for $35 billion in February. 

Family-owned Mars agreed to pay $83.50 per share in cash for all outstanding equity of Kellanova, representing a total enterprise value of $35.9 billion. 

“All of Kellanova’s brands, assets and operations, including its snacking brands, portfolio of international cereal and noodles, North American plant-based foods and frozen breakfast are included in the transaction,” Mars noted in a press release, adding it “intends to fully finance the acquisition through a combination of cash-on-hand and new debt, for which commitments have been secured.” 

Late last year, WK Kellogg Co. spun off Kellanova, the company behind Pringles, Cheez-It, Pop-Tarts, Eggo, MorningStar Farms, and other brands that include cereals and noodles. Kellanova has been outperforming many of its peers, raising its full-year guidance as new products and marketing efforts boosted sales in the second quarter. 

Buying Kellanova will allow Mars, known for its chocolate-heavy portfolio, including brands such as Dove Chocolate, M&Ms, Life Savers, Skittles, Starburst, Twix, Orbit, and Milky Way, to expand into the chips and crackers aisles at grocery stores. In other words, Mars will take a more significant market share of the snacking pie as consumers eat fewer sit-down meals and graze on junk food throughout the day. 

“In welcoming Kellanova’s portfolio of growing global brands, we have a substantial opportunity for Mars to further develop a sustainable snacking business that is fit for the future,” Mars Chief Executive Poul Weihrauch wrote in a statement. 

Bloomberg Intelligence analyst Jennifer Bartashus said the deal is the “largest packaged-food deal in nearly a decade and could spur more M&A in the sector.” 

Shares of Kellanova were higher at the start of the cash session, up above 7.5% to the $80 handle.

“We are excited for Kellanova’s next chapter as part of Mars, which will bring together both companies’ world-class talent and capabilities and our shared commitment to helping our communities thrive,” said Kellanova CEO Steve Cahillane. 

Jefferies analyst Rob Dickerson told clients, “Mars enhances its global snacking business, possibly raising competitive levels for other large food players.” 

If the deal fails to secure regulatory approval, Mars must pay Kellanova a termination fee of $1.25 billion. 

This mega deal in the junk food space suggests these companies aren’t afraid of GLP-1s.