Month: September 2024

The day after The Fed slashes rates by a crisis-like 50bps, jobless claims data plunges to multi-month lows signaling an economy that is anything but ‘soft landing’ let alone landing at all…

Adjusted initial claims tumbled from 231k to 219k (lowest since May) while unadjusted claims continued to tumble to 12-month lows…

Source: Bloomberg

Continuing claims also continued its (economically positive) downtrend, sliding from 1.843mm to 1.829mm Americans…

Source: Bloomberg

Finally, wtf is going on here…

Source: Bloomberg

While the official unemployment rate dipped modestly from three-year highs, jobless claims have crashed to near record lows.

Does that really look like an economy that needs a 50bps rate-cut?

As one market veteran pointed out to us this morning, “either The Fed is a bunch of idiots, or this data is total bullshit.” Fact of the matter is, Powell even admitted – after bringing up the massive revision to the payrolls data – that it is more likely the latter (bullshit data) than the former (idiots); though we suspect it’s a bit of both (blending with some political pressure).

On the heels of yesterday’s exuberant 50bps rate-cut by The Fed, Bank of England (BoE) officials (in a split decision) decided to leave the Bank Rate at 5.00% (as widely expected).

The split of the vote (8-1), however, was somewhat more hawkish than many expected with only one MPC member (Dhingra) voting for a cut.

While the MPC stuck to its meeting by meeting approach (saying “[It] will decide the appropriate degree of monetary policy restrictiveness at each meeting”), it added a new sentence saying “in the absence of material developments, a gradual approach to removing policy restraint remains appropriate”, indicating that it is not keen to cut too fast or by too much.

At this month’s decision, BoE policymakers slightly downgraded their outlook for the UK economy.

They now expect growth at 0.3% in the third quarter, slightly lower than the 0.4% forecast in August.

Laura Cooper, global investment strategist at Nuveen, said the BOE would likely catch up with the US through next year. UK growth looks sluggish and the Labour government is expected to raise taxes and cut public spending at its Oct. 30 budget, which she said could warrant a more aggressive easing cycle.

“As focus turns to the fiscal backdrop and the upcoming October budget, the Bank of England’s reluctance to follow major peers in a swifter cutting cycle will be challenged,” Cooper said.

The set statement also ended with a hawkish tone, that policy will need to remain sufficiently restrictive for sufficiently long until the risks to inflation returning sustainably to 2% have dissipated further.

Finally, we note that The BoE announced it would maintain the pace of QT (allowing £100 bn to run off its Asset Purchase Facility in the coming year against £100 bn in the year just ended).

The BOE’s quantitative tightening plan implies “a much smaller amount of active gilt sales,” said Jessica Hinds, a director in Fitch Ratings’ economics team (we estimate active sales decline from around £50 bn to £13 bn).

“While bank reserves are currently well above estimates of minimum required levels, today’s announcement suggests that the MPC wants to keep the path of total reduction predictable given the large amount of gilts maturing over the next 12 months.”

The more hawkish tone overall sent cable higher, with the pound reaching its strongest against the dollar since March 2022…

Cable has picked up some more impetus in the last six weeks or so since the respective meetings of central banks, and the growing conviction in markets about the rate paths of the two diverging.

“Everything here says it’s likely to be a gradual quarterly pace of rate cuts at best,” said Jordan Rochester, head of macro strategy at Mizuho International.

Gilts slipped and money markets pared wagers on the extent of BOE interest-rate cuts this year, with 42 basis points of easing seen through December compared with 50 basis points before the decision (a November rate-cut is still fully priced-in for the BoE and a follow-up December cut is trading around a 65% chance).

The Fed’s first (jumbo) rate cut since the depths of the covid crash resulted in mixed reaction in markets, with initial gains for stocks fizzling and ultimately tepid moves in Treasuries, corporate bonds and commodities. However, this reversal to the kneejerk reaction has also since reversed, and US stock futures are bouncing this morning, rising to new record highs, amid gains across Europe and in Asia, while gold is heading back toward a record high and copper prices hit the strongest level in two months to lead a broad rally in base metals in what appears to be a gradual awakening of the reflation trade. As of 8:00am, S&P futures are up 1.7%, and Nasdaq futures surged more than 2.1% as part of a global risk-on trade. Similar to past rate cuts in slowing macro environments, the Nasdaq and Russell are outperforming. Pre-mkt, Mag7 names are all higher by at least 1.6%, Semis are stronger too with NVDA +3.3%. Europe’s Stoxx 600 index advanced as much as 1.4%, while Asian stocks were a sea of green, as a basket of Asian currencies notched up a 14-month high even as the Japanese yen plunged with traders once again eyeing yield differentials. The yield curve is bull steepening though 30Y is unchanged and USD is flat. Commodities are higher led by the Energy complex with precious metals outperforming base (Gold +1.3%, Silver +4.0%). The macro data today (Jobless Claims, Home Starts) will be ignored given the dovish press conference from Powell; expect multiple indices and sectors to make ATHs today.

In premarket trading, cryptocurrency-linked companies rally as Bitcoin climbs with US equity futures; Coinbase, Riot Platforms, Marathon Digital and CleanSpark all rose. Here are some other notable premarket movers:

• DoorDash (DASH) gains 3.9% after BTIG upgraded the food-delivery company to buy from neutral, saying its checks signal continued strength, while touting “under-appreciated” longer term drivers.
• Mobileye (MBLY) shares rise 7.6% after Intel said it does not currently have any plans to divest a majority interest in the company.
• Steelcase (SCS) shares fall 6.9% after the maker of office furniture gave a third-quarter revenue forecast that fell short of the average analyst estimate.

In a move that Donald Trump called either political intervention or confirmation the US economy is doing much worse than indicated, the Fed cut rates by 50 basis points, a big move designed to preserve the strength of the US economy amid mounting risks to the labor market which has been flooded with illegal aliens. Jerome Powell said taking the step now would help to limit the chance of a full-blown downturn, while being careful to avoid committing to this as the new pace for rate reductions. Michelle Bowman dissented, voting for a 25-basis-point cut, the first time a Fed governor has done that since 2005.

Wednesday’s decision reinforced expectations that the US economy will escape a downturn. A survey of Bloomberg Terminal subscribers shows 75% expect the US to avoid a technical recession by the end of next year. At the same time, traders ramped up their bets on cuts to come from the Fed too, with more than 70 basis points of reductions seen for the rest of this year. That’s higher than the half-point of further easing implied by the Fed’s dot plot. A Citigroup trader called the jumbo cut, and so did JPMorgan, though the latter is less sure about what comes next. Mohamed El-Erian, meanwhile, saw the cut as dovish, while others on Wall Street suggested it indicated that the Fed regrets not cutting at its previous meeting.

“What we are seeing is the belief that the Fed has everything under control and they are going to engineer a soft landing and therefore risk assets are moving ahead strongly,” Jon Bell, a portfolio manager at Newton Investment Management, said on Bloomberg TV.

The Fed’s first reduction in more than four years was accompanied by projections indicating an additional 50 basis points of cuts across the remaining two policy meetings this year. Fed Chair Jerome Powell said launching the unwind of the central bank’s historic tightening campaign with a big move while the US economy is still strong would help limit the chances of a downturn.

“The Fed is embarking on what I see as a series of rate cuts,” said Stephen Jen, the chief executive at Eurizon SLJ Capital. The size of the initial move “won’t make a big difference as equities should soon stabilize, bond yields will likely drift lower for good reasons — like disinflation and not a hard landing. The dollar should continue to weaken against a broad range of currencies,” he said.

It wasn’t just the Fed making waves: the pound strengthened to the highest against the dollar since March 2022, surpassing $1.33, after the Bank of England kept rates on hold Thursday, and warned investors it won’t rush to ease policy. Government bonds retreated, money markets pared wagers on 2024 rate cuts and UK stocks trimmed an advance.

“We should be able to reduce rates gradually over time,” Governor Andrew Bailey said in a statement, stressing that such a path would depend on price pressures continuing to ease. “It’s vital that inflation stays low, so we need to be careful not to cut too fast or by too much.”

Norway’s krone led gains against the dollar after the central bank kept borrowing costs unchanged and signaled no intention to cut them before next year as it contends with inflation risks. The lira rose after the Turkey’s central bank held its main interest rate at 50%, as expected, with the statement broadly unchanged, i.e. no significant softening in language as some were hoping for.

European shares jumped 1.1% to their highest in over two-weeks and near record highs, with mining and automobile shares leading gains. Telecommunications and utilities stocks are the biggest laggards. Here are the biggest movers Thursday:

• Ocado jumps as much as 16% after the grocer reported third-quarter retail sales that came ahead of consensus estimates. The company also raised its FY24 revenue guidance for Ocado Retail.
• Davide Campari-Milano rise as much as 8.3%, reversing a portion of yesterday’s sharp losses, after a Campari group holding company, Lagfin, said it would buy more shares in the Italian beverage maker
• Merck KGaA gains as much as 2.9%, the most since July, after Goldman Sachs initiated coverage of the German health-care group with a buy recommendation
• Next shares jump as much as 6.9%, hitting a fresh record high, after the clothing retailer boosted its full-year pretax profit forecast. Additionally, the company’s first-half total group sales surpassed estimates
• Babcock International climbs as much as 3.7% after the support services firm said organic revenue and underlying operating profits grew in the five months to the end of August
• Bytes Technology shares rise as much as 7.1%, the biggest jump in 11 months, after reporting strong trading in the first half of the year. Analysts at Shore and Jefferies note that recent share underperformance suggests potential for re-rating
• Air France-KLM shares rise as much as 4.3% after BNP Paribas Exane upgrades the stock to neutral from underperform. The broker notes that factors that weighed on the stock this year
• REC Silicon rallies as much as 33% after the Norwegian silicon firm announced it will supply Sila Nanotechnologies with US-produced silane for use in the production of Sila’s anode material from its manufacturing facility in Moses Lake, Washington
• Kone falls as much as 4.6% in Helsinki after announcing a new strategy for 2025-2030, including new mid-term financial targets, aiming to lead in employee and customer experience, sustainability and innovations
• Note AB falls as much as 15%, the most since December, after the Swedish electronics contract manufacturer trimmed its outlook as consumer demand continued to lag
• S4 Capital shares plunge as much as 15% to the lowest level in almost six months after the digital advertising company warned that annual like-for-like net revenue will decline more than previously anticipated

Earlier in the session, an Asia gauge of stocks rallied by the most in a week, while an index of Asian currencies rose to the strongest level in more than a year.  The MSCI Asia Pacific Index gained 1.3%, with Japanese exporters including Toyota and Hitachi among top gainers. Both stocks jumped by the most in over a month as the yen plunged having priced in a much more dovish Fed. Hong Kong’s benchmark climbed 2% to the highest level in two months, helped by gains in technology firms. Property-developers in both China and Hong Kong gained, as the latter cut its base interest rate following the Fed’s eased policy.

“I am upbeat on Asian equities following the Fed’s 50 basis points rate cut,” said Rajeev De Mello, chief investment officer at GAMA Asset Management SA. Investors will increase their expectations of a soft landing scenario and that is beneficial for emerging markets and Asia, he added. Some of the less loved asset classes, like small caps, and emerging market equities “should really take solace” that the Fed tightening cycle is over and that monetary easing has started, he said.

On the monetary policy front, Bank of Japan Governor Kazuo Ueda faces the delicate task on Friday of making sure investors are firmly aware of rate hikes to come, without ruffling markets even as he stands pat on policy. The yen swung between gains and losses in volatile trading Thursday.

In FX, a gauge of the dollar weakened 0.4%, pulling it closer to its January lows as the Bloomberg Dollar Spot Index reversed an earlier gain to fall 0.5%. The Norwegian krone has climbed to the top of the G-10 FX leader board, rising 1.4% after the Norges Bank left rates unchanged and signaled they would remain there for the rest of the year. The Aussie dollar rises 1% after jobs data impressed. The pound is up 0.5% ahead of the Bank of England decision where borrowing costs are widely seen on hold.

In rates, the treasuries curve is steeper as US trading begins, after front-end outperformance during Asia session and London morning drove 2s10s spread above 11bp to widest level since June 2022. Treasury front-end yields are richer by nearly 3bp with longer-dated yields little changed, steepening 2s10s, 5s30s spreads by 3bp and 2bp on the day; 10-year is around 3.71% with bunds and gilts in the sector lagging by ~1bp; of note here is that the last time yields rose after a 50bps rate cut was… October 2008. Something to keep in mind. Front-end gilts pared early gains after Bank of England rate decision, with the 2-year rising from to 3.885% from around 3.86%.The Bank of England left rates unchanged at 5% and said it won’t rush to ease further. US session includes weekly jobless claims data and a 10-year TIPS reopening.  

In commodities, oil advanced as the risk-on tone swept across wider markets, with traders monitoring escalating tensions in the Middle East. WTI rising 1% to $71.65 a barrel. Gold resumed its ascent back toward a record, and was last some $33 higher to around $2,592/oz; silver rallied and copper climbed to its highest level since mid-July, spurred on by the Fed’s move. Bitcoin hit a three-week high.

Looking at today’s calendar, the roster of Fed speakers is empty for the day and the economic agenda is thin too, with initial jobless claims top of the bill. Darden Restaurants, the owner of the Olive Garden chain, is reporting, with logistics giant FedEx set to update after the close in New York. And there’s a policy decision from the Bank of England today (where it kept rates unchanged), ahead of the Bank of Japan on Friday and after Hong Kong cut rates for the first time since 2020.

Market Snapshot

• S&P 500 futures up 1.3% to 5,695.00
• STOXX Europe 600 up 0.9% to 519.46
• MXAP up 1.4% to 185.45
• MXAPJ up 1.1% to 578.97
• Nikkei up 2.1% to 37,155.33
• Topix up 2.0% to 2,616.87
• Hang Seng Index up 2.0% to 18,013.16
• Shanghai Composite up 0.7% to 2,736.02
• Sensex up 0.2% to 83,137.98
• Australia S&P/ASX 200 up 0.6% to 8,191.92
• Kospi up 0.2% to 2,580.80
• German 10Y yield little changed at 2.20%
• Euro up 0.4% to $1.1161
• Brent Futures up 1.1% to $74.44/bbl
• Gold spot up 0.9% to $2,583.13
• US Dollar Index little changed at 100.63

Top Overnight News

• US House defeated the Republican stopgap funding bill, while House Speaker Johnson said he will craft a new stopgap spending bill.
• Iranian cyber actors in late June and early July sent unsolicited emails to individuals then associated with Biden’s campaign that contained excerpts taken from stolen material from Trump’s campaign, while Iranian cyber actors have continued their efforts since June to send stolen material associated with Trump’s campaign to US media organisations, according to US intelligence agencies.
• China to ramp up policy steps to revive economy but no ‘bazooka’ stimulus seen. China expected to trim its Loan Prime Rate (LPR) tonight, w/the Fed’s outsized cut giving the PBOC more flexibility to ease. RTRS
• Industries such as finance, consumer tech and property — key drivers of China’s growth for much of this century — are now out of favor. Instead, the most powerful Communist Party leader since Mao Zedong is funneling resources toward endeavors such as electric vehicles and chip production. “High quality” growth is the new mantra, not “high speed.” BBG
• Brazil’s real looks set for a boost from carry trades after the central bank lifted its interest rate for the first time since 2022 and signaled more hikes are coming — just three months after halting an easing cycle. BBG
• ECB’s Centeno says the central bank may need to accelerate the pace of easing. BBG
• The BOE will probably hold its key rate at 5% today, following last month’s cut. Governor Andrew Bailey may offer more hints that it will ease again in November, though Bloomberg Economics expects officials to signal caution. BBG
• Putin under growing pressure to authorize a troop mobilization as Russia’s military loses soldiers at a faster rate than it can recruit them. WSJ
• Harris and Trump are tied nationally at 47%, but she’s leading by 4 points in PA according to new data published in the NYT. NYT
• Microsoft is working with Anduril on combat goggles for the US Army in a project that may generate as much as $21.9 billion over a decade. BBG
• Apple will face pressure from the EU to open its iOS to rivals or face sig. fines. BBG

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks were in the green as the region reacted to the Fed’s oversized 50bps rate cut. ASX 200 was underpinned and printed a fresh record high albeit despite somewhat ambiguous jobs data which showed headline Employment Change topped forecast but was entirely due to Part-Time work as Full-Time jobs contracted. Nikkei 225 outperformed and surged above the 37,000 level on the back of a weaker currency. Hang Seng and Shanghai Comp conformed to the positive mood with the former led higher by strength in tech and property after the HKMA cut rates by 50bps in lockstep with the Fed, while the mainland index was also boosted following the PBoC’s continued liquidity efforts and despite the lingering EU tariff concerns.

Top Asian News

• HKMA cut its base rate by 50bps to 5.25%, as expected in lockstep with the Fed, while it stated that the US interest rate cut will have a positive impact on the city’s economy and will provide some room for easing of local interest rates.
• China’s Commerce Minister said regarding the EU’s electric vehicle probe that China will continue to negotiate ‘until the last minute’ and the investigation has undermined ‘confidence’ of Chinese companies in investing in Europe. It was separately reported that EU capitals will not get to vote on Chinese EV duties next week with the poll removed from the committee agenda for September 25th, according to Politico.
• Chinese policymakers will likely step up measures to at least help the economy meet its 2024 growth target with more focus on boosting demand to fight deflationary pressures, “but any forceful stimulus looks unlikely”, via Reuters citing advisors/analysts. Elsewhere, the Chinese government has been urged by a think tank to strengthen coordination of policy in order to improve economic governance, via People’s Daily.
• Taiwan raises RRR by 25bps.

European bourses, Stoxx 600 (+1%) opened the session on a very strong footing, taking positive leads from firm APAC session overnight as the region digested the Fed’s decision to opt for a 50bps cut. European sectors hold a strong positive bias; Basic Resources takes the top spot alongside Tech, owing the positive risk on sentiment. Utilities and Telecoms are the laggards. US Equity Futures (ES+1.4%, NQ +1.6%, RTY +2%) are indicative of a very strong open, with clear outperformance in the economy-linked RTY, benefitting from the Fed’s decision to opt for a larger 50bps cut. Apple (AAPL) faces a warning from the EU to open up its iPhone operating system to rival technologies, according to Bloomberg; failure to comply could risk a fineFine could be up to 10% of global annual turnover.

Top European News

• Norwegian Key Policy Rate 4.5% vs. Exp. 4.5% (Prev. 4.5%); the policy rate forecast implies that the policy rate will remain at 4.5% to the end of 2024 before being gradually reduced from Q1-2025.
• ECB’s Knot says there is room for further cuts if inflation outlook holds. “More or less fine with market’s cut expectations”.
• ECB’s Schnabel slide release: sticky services inflation is keeping headline inflation at elevated level; Real wage catch-up remains incomplete in large parts of the euro area; Signs that transmission of monetary policy tightening is weakening. Labour demand remains high amid low unemployment and persisting labour shortages. Pass-through of higher wages to producer prices is stronger in the services sector. Demand for services has been resilient but is starting to weaken. Price pressures in the services sector are broad-based and global. Geopolitical uncertainty remains a key risk to the outlook.
• Swiss Government Forecasts: Sees 2024 CPI at +1.2% (prev. 1.4%), 2025 CPI seen at +0.7% (prev. 1.1%); 2024 GDP maintained at 1.2%, 2025 GDP seen at +1.6% (prev. +1.7%)
• New car registrations: -18.3% Y/Y in August 2024 (vs +0.2% in July 2024); battery electric market share 14.4% (vs 21% in August 2023), according to ACEA.

FX

• USD is mostly lower vs. peers (CHF and JPY the exceptions), after the two-way price action seen in the aftermath of the FOMC rate decision and press conference. DXY is still holding above the YTD low printed yesterday at 100.21 in the aftermath of the 50bps cut.
• EUR is firmer vs. the USD but below yesterday’s post-FOMC best at 1.1189. Attention is on whether the decisions taken on Wednesday by the Fed will be enough to make a sustained breach of the 1.12 mark.
• GBP is firmer vs. the USD but below yesterday’s best levels which saw Cable print a fresh YTD peak before running out of steam ahead of 1.33 during Powell’s press conference. Attention today turn’s to the BoE, where it is widely-expected to keep the Base Rate at 5%, most likely via a 7-2 vote split.
• JPY is losing out to the USD despite the dollar being broadly softer vs. peers. This in part could be more a by-product of the current risk environment rather than a policy read between the Fed vs. BoJ.
• Antipodeans are both benefiting from the current risk environment whilst also digesting domestic data releases. AUD is the top performer across the majors post-strong employment data, albeit, it is worth noting that a lot of the increase was driven by part-time jobs.
• EUR/NOK fell from 11.70 to 11.6657 in an immediate reaction to the Norges Bank policy announcement before extending to an 11.6517 session low. The Bank kept rates unchanged at 4.50% (as expected), and guided the first rate cut to be in Q1’25 (prev. guided Q2’25); disappointing some expectations of potentially guiding towards Q4-2024 (i.e. December’s meeting).
• PBoC set USD/CNY mid-point at 7.0983 vs exp. 7.0924 (prev. 7.0870).
• Brazil Central Bank raised its Selic rate by 25bps to 10.75%, as expected with the decision unanimous, while it stated the pace of future adjustments and overall adjustment magnitude will be guided by the firm commitment to reaching the inflation target and that the current scenario requires more restrictive monetary policy.

Fixed Income

• USTs lifted from overnight lows but still just about in the red for today’s session as markets continue to digest the FOMC ahead of data this afternoon. Currently holding around the 115-00 mark, which is at the top-end of the day’s range and clear of the overnight 114-22 base.
• Bunds are slightly softer, in-fitting with USTs which continue to digest the FOMC, alongside supply from France and Spain which were well received but sparked no real reaction. Bunds are back above the 134.00 mark though the 134.31 peak is someway shy of Wednesday’s 134.86 best.
• Gilts are essentially flat ahead of the BoE policy announcement, where an unchanged outcome is expected though this will undoubtedly be subject to dissent with 7-2 most likely though 6-3 and 8-1 are also plausible outcomes.
• France sells EUR 12bln vs exp. EUR 10-12bln 2.50% 2027, 0.75% 2028, 2.75% 2030 and 2.00% 2032 OAT.
• Spain sells EUR 5.56bln vs exp. EUR 5-6bln 5.15% 2028, 3.10% 2031, and 3.45% 2043 Bono.

Commodities

• Firm trade in the crude complex as a function of the post-FOMC risk appetite, softer Dollar, and heightened geopolitical landscape. Brent’Nov hit a USD 74.54/bbl high following a low print of 72.91/bbl.
• Higher across precious metals, largely as a function of the Dollar, bond yields, and geopolitics. Spot silver outperforms but as it retraces the slump seen yesterday. Spot gold meanwhile found resistance as USD 2,600/oz yesterday before pulling back. XAU trades in a current USD 2,551.16-2,585.13/oz range.
• Strong performance across base metals thus far amid the jumbo Fed rate cut and softer Dollar, whilst the firm APAC performance and report of the likelihood of more Chinese stimulus only added to the tailwinds.
• Qatar set November-loading Al-Shaheen crude term price at USD 2.09/bbl above Dubai quotes which is the highest premium in five months, according to sources.
• Indian refiners using Russian insurance cover for Russian oil Cargoes priced above USD 60bbl, via Indian Gov source.

Geopolitics: Middle East

• “[Israeli PM] Netanyahu holds a security assessment session today at the headquarters of the Ministry of Defense in Tel Aviv”, according to Al Arabiya
• Israel submitted a new proposal that includes the release of all hostages at once and securing the exit of Hamas leader Sinwar from the Gaza Strip along with anyone who wishes to leave the Gaza Strip, according to Sky News Arabia citing Israeli media. Furthermore, Israel Broadcasting Corporation said the proposal includes the release of Palestinian prisoners, the disarmament of the Gaza Strip, the application of another mechanism of governance there, and an end to the war.
• Lebanon’s Foreign Minister told CNN that Hezbollah was hit hard and a response is a must for it, according to Asharq News.
• US Defence Secretary Austin spoke to Israel’s Defence Minister Gallant to review regional security developments and reiterated US support for Israel amid Iran and Hezbollah threats, according to the Pentagon.
• Japan’s Icom (6821 JT) said it was investigating facts surrounding reports that two-way radios bearing the Icom logo exploded in Lebanon, while it later stated that it is not possible to confirm whether the radio product related to Lebanon explosions was shipped by the Co. and noted that the sales of batteries required to operate the device were discontinued about 10 years ago.
• Israel army and Hezbollah exchange fire at the border, according to Walla News’ Elster.

Geopolitics: Other

• US has no immediate plans to withdraw Typhon missile system from the Philippines which is being used in joint training exercises with the US and the Philippines testing the feasibility of the system’s use in the event of a conflict, while a Philippine government source said there is strategic value in keeping the missile system in the Philippines to deter China.
• North Korea said it tested a new tactical ballistic missile on Wednesday which was a modified strategic cruise missile and used a super large warhead in the tactical ballistic missile test which was supervised by North Korean leader Kim. Furthermore, Kim said the country must maintain overwhelming attack capabilities of conventional weapons while continuing to increase nuclear capabilities, according to KCNA.

US event calendar

• 08:30: Sept. Initial Jobless Claims, est. 230,000, prior 230,000
  • Sept. Continuing Claims, est. 1.85m, prior 1.85m
• 08:30: 2Q Current Account Balance, est. -$260b, prior -$237.6b
• 08:30: Sept. Philadelphia Fed Business Outl, est. 0, prior -7.0
• 10:00: Aug. Existing Home Sales MoM, est. -1.3%, prior 1.3%
• 10:00: Aug. Leading Index, est. -0.3%, prior -0.6%

DB’s Jim Reid concludes the overnight wrap

After keeping rates on hold for 14 months, the Fed finally reversed course and delivered a 50bp cut last night, lowering the fed funds target to the 4.75-5.00% range. This was an 11-1 decision with Bowman becoming the first Fed Governor to dissent since 2005, favouring instead a 25bp cut. The larger cut came amid a dovish shift to the Fed’s inflation and unemployment projections compared to June, with 2025 PCE inflation lowered two tenths to 2.1% and unemployment raised two tenths to 4.4%. The SEP also showed a notable shift in the balance of risks, with a clear majority of the FOMC now seeing unemployment risks weighted to the upside but inflation risks as broadly balanced.

However, accompanying the larger cut was a signal of a fundamentally strong economy with no suggestion that continued 50bp cuts were likely. Growth projections were little changed and the dot plot showed the median FOMC member expecting the fed funds range at 4.25-4.50% at year-end. That implies a total of 50bp of further easing over the November and December meetings. In the press conference, Powell repeatedly framed the decision as a “recalibration”, saying that “there is no sense that the committee is in a rush” and adding that “I do not think that anyone should look at this and say that this is the new pace” for easing going forward. Following the meeting, our US economists continue to see the Fed cutting by 25bps per meeting through to March 2025 before slowing to a quarterly pace thereafter. That would leave the fed funds rate in the 3.25-3.5% range at end-2025, near DB’s estimate of nominal neutral.

While fed fund futures had favoured a 50bp cut going into the meeting, market sentiment had showed signs of drifting back towards 25bp. The implied pricing of a 50bp cut fell to below 60% earlier in day, its lowest since the start of the week. In part that echoed comments in the morning by former Cleveland Fed president Mester, who said that “there’s a good case for just doing a series of 25s”. Indeed, our own flash poll for yesterday’s CoTD suggested that the 50bp cut might be the bigger shock to many people, with 62% of responders expecting the smaller 25bp move.

Consistent with this, rates and equities saw a strong initial reaction to the decision, but this then reversed as Powell spoke although equities are notably higher again in Asia. While December fed funds futures ended the day -4.8bps lower, reflecting the larger cut, Fed pricing for a year from now in September 2025 actually moved +2.6bps higher on the day. For Treasuries, the 2yr yield fell by 11bps after the rate announcement to trade -7bps lower on the day, but it ended the session up +1.4bps at 3.62% and is trading at 3.65% this morning as we type. Further out on the curve, 10yr yields fell -4bps to trade marginally lower on the day following the Fed decision but more than reversed the move later on, closing +5.8bps higher at 3.70%. 10yr yields are another +1.7bps higher overnight. On the whole, the rates moves were consistent with our strategists’ take earlier in the week (see here) favouring a twist steepening in the event of a 50bp cut.

On the equity side, the S&P 500 had been trading flat on the day and spiked by nearly 1% on the Fed decision. However, it gave up these gains and a bit more to close -0.29% lower on the day, ending a run of 7 consecutive gains. The NASDAQ (-0.31%) and the Mag-7 (-0.14%) also posted moderate losses, while the small cap Russell 2000 (+0.04%) saw a slight outperformance. This up-and-down move was also visible across other asset classes. The dollar fell by -0.6% against the euro intra-day but recouped those losses later on. Gold touched $2600/oz for the first time ever as Powell began to speak but was down -0.41% to $2558.91/oz by the close.

However Asia has seen a resurgence in risk appetite with S&P (+0.97%) and NASDAQ (+1.41%) futures flying this morning. The Nikkei (+2.49%) though is the star of the show helped by a -0.6% decline in the Yen as the BoJ starts its 2-day policy meeting. Elsewhere, the Hang Seng (+1.26%) is also trading sharply higher after resuming trading post this week’s holiday as the Hong Kong Monetary Authority cut its interest rate for the first time since 2020, easing by 50bps to 5.25%, mirroring the Fed’s policy easing. Elsewhere, the CSI (+0.70%) and the Shanghai Composite (+0.42%) are seeing a mild rebound from seven-month lows while the KOSPI (-0.25%) is bucking the region’s trend after trading resumed following their three-day national holiday.

Early morning data showed that Australia’s unemployment rate remained steady in August at 4.2% while the number of employed people grew by 47,500 (v/s 26,000 expected). Meanwhile, the participation rate remained at its record level of 67.1%. Following the release of the jobs data, the Australian dollar (+0.38%) is extending its gains for the fourth straight session trading at 0.6790 against the dollar. Meanwhile, yields on the 10yr Australian government bonds have moved +7.3bps higher trading at 3.94% as we go to press.

Looking forward, central banks will stay in the spotlight today, as the Bank of England are announcing their latest policy decision. They delivered an initial rate cut at their previous meeting in August, but it was a close 5-4 vote in favour, and this time around it’s widely expected that they’ll leave rates unchanged at 5%. In his preview, DB’s UK economist also thinks they’ll keep rates unchanged, but the particularly interesting feature of today’s decision will be the vote on the pace of QT for the next 12 months. He thinks that there’ll be a QT increase of around a wider range between £107-127bn, implying a quarterly sales target of £5-10bn. But the risks are skewed to them sticking to a £100bn envelope. See the full preview here

Ahead of that, we also had the UK CPI release for August yesterday, which was in line with consensus at +2.2%. The details were also as expected, with core CPI rising to +3.6%, and services CPI up to +5.6%. In turn, that led investors to dial back the probability of a rate cut at today’s meeting, which fell from 24% to 16% by the close. UK gilts underperformed as well, with the 10yr yield up +7.9bps, and sterling strengthened +0.40% against the US Dollar.

Elsewhere in European markets, there were decent losses as investors looked forward to the Fed’s decision after the close. That meant all the major equity indices lost ground, including the STOXX 600 (-0.50%), the FTSE 100 (-0.68%), the CAC 40 (-0.57%) and the DAX (-0.08%). Euro Stoxx futures are bouncing back +1.11% this morning as I type though. Euro Sovereign bonds fell back yesterday, with yields on 10yr bunds (+4.7bps), OATs (+6.1bps) and BTPs (+7.4bps) moving higher.

Finally, there were a few other US data releases yesterday. Among others, data from the Mortgage Bankers Association showed that a 30yr fixed mortgage rate was down to 6.15% in the week ending September 13, which is the lowest its been in just over two years. Otherwise, housing starts rose to an annualised pace of 1.356m in August (vs. 1.318m expected), their highest level since April. Building permits were also up to an annualised pace of 1.475m (vs. 1.410m expected), their highest since March.

To the day ahead now, and one of the main highlights will be the Bank of England’s monetary policy decision. Otherwise, we’ll hear from the ECB’s Knot, Schnabel and Nagel. Data releases include the US weekly initial jobless claims, existing home sales for August, and the Conference Board’s leading index for August. Finally, there’s an earnings release from FedEx.

Authored by Steve Watson via Modernity.news,

The AP is reporting that the FBI has uncovered evidence that Iranian hackers stole materials from the Trump campaign in the Summer and provided them to what was then the Biden/Harris campaign.

The report notes that the emails were sent to “people who were associated with Biden’s campaign” in June and July when he was still the Democratic nominee.

Perhaps it is time to start questioning this more vigorously https://t.co/6Ek0pYM8SY pic.twitter.com/tJgP3V9G8R

— Stephen L. Miller (@redsteeze) September 18, 2024

The FBI uncovered the “unsolicited” evidence as part of its efforts to investigate election interference.

The emails “contained an excerpt taken from stolen, non-public material from former President Trump’s campaign as text in the emails,” a government statement noted.

It is not known if the Biden/Harris campaign reviewed the materials.

imagine being best friends with iran https://t.co/L3NMeDecm9

— LB (@beyondreasdoubt) September 18, 2024

Hilariously, however, the Harris campaign issued a statement saying that they were “victims” of the hack.

The Harris campaign referring to itself as “victims” when they received the leaked files from Trump’s campaign, is really perfect encapsulation of both the gaslighting and the non-stop victimhood https://t.co/8gL4n0BUpa

— Sunny (@sunnyright) September 18, 2024

Last night in New York, Trump referred to the development, calling it “foreign election interference,” and charging that “Biden is working with Iran.”

President Trump: Today, three agencies of the Kamala Harris and Joe Biden administration released a report CONFIRMING that Iranian hackers hacked into Trump campaign email accounts and gave the Biden-Harris campaign stolen material.

ELECTION INTERFERENCE AT THE HIGHEST LEVEL! pic.twitter.com/e1K2nv5uJ5

— Trump War Room (@TrumpWarRoom) September 19, 2024

It is clear that there is a concerted effort to undermine Trump’s campaign, with officials revealing in August that further internal communications were hacked and provided to at least three media organisations, with the perpetrators suspected to be Iranian hackers.

Intervention in a U.S. election by an enemy of America in an effort to tilt the outcome to their favored candidate Kamala Harris. https://t.co/6QLGJFTScK

— Ronnie Whitaker (@RonnieWhitaker) September 18, 2024

As we previously highlighted, the Secret Service also uncovered an assassination plot against Trump by Iran on the same weekend as the Butler shooting in July.

remember, if a foreign adversary favors you, you are forever connected to that foreign adversary https://t.co/jPbOkvIBgo

— Joe Gabriel Simonson (@SaysSimonson) September 18, 2024

Seems a little worse than some Russians buying a few Facebook ads https://t.co/HOJoyzuU7J

— Nick Smith (@NSSmith16) September 18, 2024

How many Biden or Kamala staffers shopped oppo to the media that they originally got from Iran trying to interfere in our election? This is a massive story. https://t.co/rxjcfIFLr6

— Andrew Surabian (@Surabees) September 18, 2024

Iran and Russia endorse Kamala Harris for President. Good to know.

— Ham (@zedidutch) September 18, 2024

*  *  *

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.

The European Commission warned on Thursday that Apple must adhere to its interoperability obligations under the Digital Markets Act by allowing developers access to its iOS and iPadOS platforms or face a fresh round of antitrust penalties or fines early next year.

“Under the DMA, Apple must provide free and effective interoperability to third-party developers and businesses with hardware and software features controlled by Apple’s operating systems, iOS and iPadOS, which are designated under the DMA,” the Commission wrote in a statement. 

Antitrust regulators in Brussels stated two specification proceedings to assist Apple in complying with the DMA… 

The specification proceedings formalise the Commission’s regulatory dialogue with Apple on certain specific areas of Apple’s compliance with Article 6(7) DMA. Pursuant to Article 8(2) of the DMA, the Commission may, on its own initiative, adopt a decision specifying the measures a gatekeeper has to implement to ensure effective compliance with substantive DMA obligations, such as the interoperability obligation of Article 6(7) DMA.

• The first proceeding focuses on several iOS connectivity features and functionalities, predominantly used for and by connected devices. Connected devices are a varied, large and commercially important group of products, including smartwatches, headphones and virtual reality headsets. Companies offering these products depend on effective interoperability with smartphones and their operating systems, such as iOS. The Commission intends to specify how Apple will provide effective interoperability with functionalities such as notifications, device pairing and connectivity.

• The second proceeding focuses on the process Apple has set up to address interoperability requests submitted by developers and third parties for iOS and IPadOS. It is crucial that the request process is transparent, timely, and fair so that all developers have an effective and predictable path to interoperability and are enabled to innovate.

“Today is the first time we use specification proceedings under the DMA to guide Apple towards effective compliance with its interoperability obligations,” EU competition chief Margrethe Vestager said in a statement, adding, “Effective interoperability, for example with smartphones and their operating systems, plays an important role in this.”

Bloomberg noted, “While the announcement is a step shy of being a formal investigation, the EU aims to compel Apple to re-engineer its services to allow rival companies to access the iPhone’s and iPad operating systems.” 

Apple has six months to comply and open its iOS and iPadOS to third-party developers or face, as the Commission pointed out, the “possibility to impose fines or periodic penalty payments.” 

The EU has cracked down on Apple in recent months.

Here are the latest developments:

• Apple Hit With New Warning Over Alleged Breaches Of EU’s Digital Markets Act

• Apple Revises EU App Store After ‘Anti-Steering’ Probe

• “Big Win”: EU’s Vestager Celebrates As Apple Loses €13bn Ireland Tax Bill Case

This comes a little more than a week after Apple launched the iPhone 16, which has new AI capabilities, including Apple Intelligence. 

Asset management giant BlackRock, with over $10 trillion in assets under management, has published a new report touting Bitcoin as a unique portfolio diversifier.

This marks the latest embrace of Bitcoin from the world’s largest asset manager.

Earlier this year, BlackRock launched a Bitcoin exchange-traded fund (IBIT), rapidly becoming one of the most successful ETF launches ever.

The Bitcoin ETF already has over $21 billion in assets under management.

BlackRock CEO Larry Fink also recently changed his sceptical stance on Bitcoin, admitting he was “wrong” to dismiss it.

The firm has steadily released research explaining Bitcoin’s potential role for investors.

The new report explains that while volatile, Bitcoin is fundamentally detached from other asset classes over the long term.

It argues Bitcoin’s adoption depends on global concerns over monetary stability, geopolitics, fiscal policy, and political stability – the inverse of traditional “risk assets.”

“Bitcoin, as the first decentralized, non-sovereign monetary alternative to gain widespread global adoption, has no traditional counterparty risk, depends on no centralized system, and is not driven by any one country’s fortunes,” the report states.

As major traditional finance players like BlackRock increasingly embrace Bitcoin, its reputation and adoption will likely accelerate, bringing it further into the mainstream.

BlackRock’s continued pro-Bitcoin stance reflects growing acceptance by global financial institutions.

In the first quarter of 2024, the nationwide aggregate credit card utilization rate in the U.S. was about 23%, similar to previous quarters, according to the Federal Reserve Bank of New York.

However, as Visual Capitalist’s Kayla Zhu details below, utilization rates vary widely between individuals. About 52% of credit card users were using less than 20% of their available credit in the beginning of 2024, while 18% were using at least 90% of their available credit, which the Federal Reserve sees as being “maxed-out.”

This chart uses data from the Federal Reserve Bank of New York to show the share of U.S. adults in each generation (Gen Z, Millennials, Gen X, and Baby Boomers) that have maxed-out credit cards as of Q1 2024, along with each generation’s median credit limit and median balance as of Q1 2024.

Methodology: Credit Card Utilization and Generations Defined

Credit card utilization is defined by the Federal Reserve as the share of the borrower’s aggregate credit limit being used. When borrowers are using 90% or more of their credit limit, the Federal Reserve considers them “maxed-out borrowers”.

Generations are defined by the Federal Reserve as having been born in the following years:

• Baby Boomers: 1946 to 1964

• Gen X: 1965 to 1979

• Millennials: 1980 to 1994

• Gen Z: 1995 to 2011

Which Generation Maxes Out Their Credit Card The Most?

Below, we show the percentage of U.S. adults in each generation that have maxed-out credit cards, as well as the median balance and credit limit of each generation.

Younger credit card users typically have higher utilization rates, with this trend decreasing among older generations. Over 1 in 7 Gen Z credit card users were maxed-out borrowers in the first quarter of 2024.

On the other end, fewer than 5% of Baby Boomers have maxed out their credit cards.

However, it’s important to note that Gen Z borrowers have lower median credit limits, averaging $4,500, compared to $16,300 for Millennials and $22,000 for Baby Boomers. Borrowers with lower limits generally have higher utilization rates.

This disparity is largely due to Gen Z’s shorter credit histories and generally lower income, which result in lower credit scores.

While Gen Z has the highest share of credit card delinquency (when payments are at least 30 days late) at 3.1%, Millennials aren’t far behind at 2.9% and as of Q3 2023 were the only generation exceeding their pre-pandemic delinquency levels.

To learn more about the state of debt in the United States, check out this graphic that shows the household debt of OECD countries.

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

When “The Hunger Games” first came out more than a decade ago, the dystopia it presented was compelling and sophisticated but also implausible. Lately I wondered how it held up and rewatched the first three films (I don’t know about the others).

My goodness, it was more prescient than it seemed at the time, including the stratification of wealth, the decadence of privilege, the abuse of power, and the complications of resistance. This series exists on many levels, but strikes me as one of the more revealing fictional stories that forecast the overlapping of material decadence, desperate poverty, and the use of fear as a propaganda device.

As a political allegory, it covers the same intellectual terrain as Aristotle’s “Politics,” Machiavelli’s “The Prince,” and de Jouvenel’s “On Power,” but in a way that is more penetrating for readers and viewers, and particularly relevant for our times.

The entire series deals with the greatest conflict in history, that between liberty and power. Those fortunate enough to live in District One, the center of the empire, and socialize with the best, eat well, dress in increasingly preposterous ways (hair dyed in unnatural colors), follow all the trends, go to the right parties, and try to keep with the social scene.

Each of the districts below perform their assigned economic function of keeping the center living in luxury. Borders between them are strictly enforced. Your place in the socio-political order is determined by accidents of birth with no broad economic mobility.

In order to maintain the order and keep rebellion at bay, the leaders in District One hold an annual extravaganza that combines fashion, violent games, and intense political messaging of the dangers of rebellion. Each district is required to send two randomly assigned tributes to the games where they face off in an arena in a battle for their lives with only one winner, as the people at the top watch with intense fascination.

The sheer spectator power of the event is what psychologically ties the elites to the social and political structure, while the fear of being called up as tribute for the games is what impresses upon the population the need for compliance. The scenario is consistent with Carl Schmitt’s principle of the friend/enemy distinction in his “Concept of the Political,” which, he argues, must finally be made real by the shedding of blood.

Those who have followed the story until the final installment might have supposed that the problem was rather stark. One man, President Snow, held all the power. He was a cruel man and he used every means to keep his power. He sat at the center of a capital city that pillaged the districts of resources and held power through fear.

If that is all there is to the problem, the solution would be clear: President Snow has to go. With the source of the problem out of the way, all will be well. This was the thinking of District 12 heroine Katniss Everdeen for most of the series. And one can see why she would believe this. Snow is a ghastly figure, and he was personally responsible for vast cruelty and crimes. He deserves to be overthrown and for justice to prevail.

Plus, she supposes that everyone she knows shares her vision of the final goal: a normal life without oppression, without violence, without pillaging, without rigid geographic and caste classifications, and without televised death matches orchestrated to instill fear in the population.

There was more going on beneath the surface. The capital city of Panem was an autocracy but also the center of a nation-state, which is to say that the bureaucracy, the administrative apparatus, a standing military, a media enterprise, and its methods of rule could survive the death of the leader. This is the difference between a personal state and a nation state. The power apparatus of the nation state seeks immortality, a continuing life regardless who happens to head it.

President Snow is the paranoid autocrat who, Katniss comes to discover, is himself entrapped in a system that he must maintain while seeking a successor. There are masses in the capital to keep entertained, potential betrayers within his own ranks, and rebellions constantly brewing. He knows for certain that his rule is fragile and that an iron hand is the only way to maintain this unstable system.

Another problem is that the system itself is attractive to competitors who long not for freedom as such but rather to inhabit the commanding heights. The problem of creating a world without power, then, becomes more complicated than the overthrow of the existing autocrat.

In every revolutionary situation, those who are most motivated to achieve the aim are those who seek to hold power themselves. So long as the machinery of legal violence exists, there will be those who seek to control it—and, as Hayek said, it is usually the worst who make it to the top and spend their lives seeking to get there. Therefore, it is not just those who rule but also those who seek to rule who constitute a threat to liberty. This is how the existence of powerful nation-states ends up creating multiple layers of dangers.

This is the story of how Rousseau became Robespierre, how Russian liberalism became Bolshevism, and how so many meritorious movements against colonialism and corporatism have ended in dictatorship, tyranny, and famine.

Anyone who seeks to end oppression has to keep his or her eye out for those who would use the chaos and confusion of political upheavals to seize and exercise power in the future. This is what Katniss learns, as she gradually discovers that her one-time allies had become skilled in the conduct of war, appreciative of the status that comes with leadership, and lust for exercising state power themselves.

She comes to discover this dark truth about the rebel armies when the leader herself admits that she has every intention of retaining the Hunger Games as a mechanism of control following a successful coup.

Through this shocking revelation, Katniss learns that great lesson of history: It is not just despots who need to be kept at bay, but also those who most passionately seek to overthrow despots too. In order to realize liberty, you need more than just loathing of those in charge; you need the ascendance of the love of true liberty itself and a system in place that guards that liberty against every attempt to overthrow it.

Once Katniss catches on to what is happening around her, she has to make a decision. Does she comply with the dictates of the increasingly centralized revolutionary forces or take a different turn and go her own way? The urgency of this decision is what turns “The Hunger Games” from being a simple Manichean struggle between one good and one evil into a real-life version of a Massive Multiplayer Online game.

There are many applications to this principle in history but one might pertain to U.S. foreign policy. In the 1980s, the United States sought to drive the Soviets out of Afghanistan by supporting Islamic fundamentalists, who were then called “freedom fighters,” and they were given weapons and massive logistical support. After the Soviets left, the rebellion gradually metastasized into the Taliban, who ruled with an iron hand, and were then overthrown after 9/11, leading to 20 years of U.S. occupation, which stirred resentment among the population, and a final deal that put the Taliban back in charge, who enforce their rule with the weaponry that the United States left behind in a chaotic withdrawal.

That’s a one-paragraph summary of three decades of incredible folly.

This saga coincided with a similar situation in Iraq after 2003, following a decade of embargoes, intermittent bombing, and harsh sanctions. The overthrow of the once-allied dictator Saddam Hussein brought to power not liberty-loving constitutionalists, but rather a Shiite majority that oppressed in turn the Sunni minority that Hussein had represented. The Sunni insurgency against the Iraqi state caused a bloody civil war in Iraq that eventually spilled over into the rebellion against Syrian dictator Bashar al-Assad and mutated into the Islamic State. Over the course of 25 years, Iraq went from a defeated and relatively quiescent state to a seething hotbed of poverty, violence, and hatred.

Fast forward to the Libyan case where the overthrow of another dictator, Muammar Gaddafi, sparked what seemed like a populist blowback, but was really part of a series of “color revolutions” that manipulated social media and the mainstream press into following U.S. foreign policy priorities. Combined with all the other interventions, and alongside a surreptitious attempt to boot the Syrian overlord, the next stage saw the spread of ISIS into a region-wide insurgency that intended regional rule through bloodshed, which was finally put down by the Trump administration.

The point is that attempts to purge the world of an existing evil raise the very risky prospect of creating even more. And it’s not just about foreign regimes. A famous trait of democracy is that the urge to kick out one group of leaders is necessarily tied to bringing another group into power. The latter are often no better and sometimes worse than the former. This is one of the reasons for so much political nostalgia in U.S. politics: a look back almost always provides a better picture than a look at the present.

The simple lesson of “The Hunger Games” is that powerful people can do terrible things. We must resist in order to stop them. The more complicated lesson is that powerful institutions themselves are corrupt, and that there will always be those lacking in moral scruples who are willing to assume the mantle of power.

That is precisely why the Founding Fathers struggled so hard to put in place a framework for rule that guaranteed, as a first priority, the rights and liberties of the people: a Republic if the people can keep it.

There is general agreement today that the United States does stand at the precipice of something huge because the existing disequilibrium is simply not sustainable on multiple levels. The key question is always: what kind of society do we want to live in? Everyone needs a clear and compelling answer to that question today. There is no more standing on the sidelines to watch the action from the outside, like spectators in the Hunger Games.

At the end of the movie, we see Katniss out of battle gear, sitting in the grass, at her home, being bathed by sunlight, tending to her own life, cultivating her own personal vision of freedom, out of the limelight. Ruling herself, not others, and having regained a normal life. Perhaps that scene offers the best lesson of all.

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

Individuals and corporations use tax havens to minimize their tax burdens and protect their wealth in low-tax or no-tax jurisdictions.

This graphic, via Visual Capitalist’s Bruno Venditti, shows the top 10 countries hosting the most offshore financial wealth, according to 2022 data from the Atlas of the Offshore World.

What Is a Tax Haven?

A tax haven offers foreign businesses and individuals minimal or no tax liability, along with a politically and economically stable environment.

Entities may legally use tax havens to store money earned abroad while avoiding higher taxes in the U.S. and other countries.

For this purpose, companies often establish a shell corporation – a corporation without active business operations or significant assets in the country where it is located.

Hong Kong tops the list with over $2.8 trillion in offshore wealth. The territory boasts a robust banking infrastructure and a business-friendly environment. Additionally, its Offshore Profit Tax Claim allows offshore owners to pay 0% tax on offshore income.

That said, it remains to be seen how China’s more tight-knit control of the special administration region will affect offshore tax treatment in the long term.

After Hong Kong, Switzerland hosts the most offshore financial wealth. The country has long served as a safe haven for wealth, particularly from Western European countries.

To learn more about this topic, check out this graphic that shows where corporate taxation rates are the lowest in the world as of 2023.

Authored by Paul Joseph Watson via Modernity.news,

German train conductors in the state of Thuringia have been given permission not to check the tickets of foreign migrant passengers in an effort to reduce intimidating and violent behavior from asylum seekers.

A married couple who had recently traveled on a Süd-Thüringen-Bahn contacted the Thüringer Allgemeine newspaper to report that they had witnessed individuals who didn’t appear to be German not having their tickets checked while German citizens still had theirs scrutinized.

After the newspaper contacted the railway service provider, they initially denied the claim, insisting that all tickets were being checked.

However, after further enquiries, the company admitted that train conductors had been given powers not to check the tickets of passengers who posed a risk of being troublesome in order to de-escalate tensions.

If the conductors feel threatened or intimidated by approaching such individuals, they can bypass the ticket check and the individual effectively gets to travel for free.

The same company recently complained to Thurinigia’s left-wing Minister-President Bodo Ramelow that its staff were increasingly on the receiving end of unprecedented abuse from foreigners on public transport.

“State and federal politics repeatedly talk about “integration” and tolerance of/towards migrants/refugees. We ask you seriously, how can you expect citizens of this country to be open to the refugee policy being practiced when they have to witness – practically every day, and not just on public transport! – such violence, brutality, and absolute contempt and mockery of our laws and society, including its so-called “values”? asked the letter.

As Remix News highlights, mass migration has also heightened violence and disorder on the train network in neighboring France.

“Annual figures provided by the French interior ministry’s statistics bureau, the SSMSI, in September last year revealed that 69 percent of violent robberies and other violent crimes, including sexual assaults, on public transport in the greater Paris region of Île-de-France were perpetrated by foreign nationals.”

“A closer look at the data showed Africans alone were responsible for 52 percent of such crimes while only representing 3.2 percent of the population of France.”

“Across the whole of France, 55 percent of suspects pertaining to offenses on public transport are foreign nationals, the data indicated.”

Earlier this month, the anti-mass migration right-wing AfD party won a significant victory in the state of Thuringia’s regional election.

The German political establishment has been busy trying to outlaw the AfD, laughably, in the name of ‘protecting democracy’, despite it now being the second most popular party in Germany.

*  *  *

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.