Month: January 2024

Authored by Venus Upadhayaya via The Epoch Times (emphasis ours),

With Taiwan’s elections just two weeks away, concerns about Chinese interference in the elections have become more prominent.

The Chinese Communist Party’s (CCP’s) fourth-ranking leader, and its lead in charge of Taiwan affairs, Wang Huning, convened a meeting of various departments in late November to discuss CCP influence operations in Taiwan. A senior Taiwanese security official shared news of the meeting with a group of selected media earlier this month, according to CNN.

A scholar from Taiwan’s Institute of National Defense and Security Research told The Epoch Times in an exclusive interview that the CCP’s agenda for manipulating the January elections has turned Taiwan into the “most dangerous place in cyberspace.”

“With fast developments in AI tools, new types of malicious software, [and the] criminal chain of Ransomware as a Service [RaaS], Taiwan is suffering from more diverse cyber attacks,” according to Wu Tsunghan, an assistant research fellow with the institute.

Mr. Wu shared his viewpoints in a conference jointly organized by New Delhi’s Jawaharlal Nehru University and the Taiwanese mission on Dec. 9. He reminded the gathering that Taiwanese businesses were attacked 3,245 times every week on average in the first half of 2023.

Overall, 15,000 cyber threats were detected every second during the same period, making Taiwan the most attacked location in Asia-Pacific cyberspace, according to Fortinet, a U.S. cybersecurity firm.

Meanwhile, the Taiwanese security expert told reporters that Mr. Wang, who became head of Taiwanese affairs earlier in 2023, has instructed officials to “step up their effectiveness” in influencing Taiwan’s public opinion, ahead of the Jan. 13 elections.

A longtime advisor to CCP head Xi Jinping, who personally chairs China’s Central Leading Group for Taiwan Affairs, Mr. Wang also acts as the deputy head of the group. He directed his staff to reduce any likelihood of external parties uncovering evidence of CCP interference in Taiwan, according to reports.

Disinformation Campaign

Mr. Wu said that Chinese meddling in Taiwanese elections most importantly includes “making confusion” by stirring up society. As an example, he cited a cyber incident in which a Dec. 6 social media post accused the Taiwanese government of monitoring the Taiwanese public.

“Is it true or not? How to verify? Who can verify? Can the verification be trusted?” said Mr. Wu during the conference.

He noted that the Chinese regime tries to use information to influence people’s minds and behavior.

“If true, it refers to [a] data leak [from] government agencies. If not true—Why at this time? Who’s operating it?” he said, adding that the purpose can be to undermine public trust in the government.

He gave the example of another disinformation campaign that accused the Taiwanese government of wanting to import Japanese nuclear waste to Taiwan.

Disinformation is spread through the Chinese-speaking world by social media platforms popular in Taiwan such as Facebook, which shared images and false information from Chinese platforms like Weibo or Douyin, according to a report by the Taiwan FactCheck Center (TFC).

“Nonetheless, while Chinese narratives attempted to feed increasing anti-Japan sentiment in China, Taiwanese ones exploited Taiwanese citizens’ long-standing concern about food safety and criticized the government led by the Democratic Progress Party (DPP) for being soft on Japan,” said the Sept. 18 report authored by Wei-Ping Li.

An erroneous narrative circulating in Taiwan concerned Yasuhiro Sonoda, a Japanese politician who was said to have died from multiple myeloma in 2020 because he drank treated wastewater from the Fukushima nuclear power plant.

“This rumor has persisted in social media like Weibo, Douyin, Facebook, and LINE, for years and has lately become prevalent again. It wasn’t until this September that Kyodo News was able to contact Mr. Sonoda confirmed he was still alive,” said the TFC report.

Something similar happened during the visit of Taiwanese vice-president, Lai Ching-te, to Paraguay in August to attend the inauguration of Paraguayan President Santiago Peña Palacios.

Paraguay is part of a dwindling group of governments—currently only 12—that continue to have diplomatic relations with Taiwan. Mr. Peña had visited Taiwan in July and had promised President Tsai Ing-wen that his country would “stand with the people of Taiwan” during his five-year term.

Mr. Wu said a fake news report began circulating claiming that Taiwan was going to provide funding to build free housing for Paraguay.

“Sometimes providing funding to other countries … some people might [wonder why] Taiwan is providing funding to other countries when we are facing such challenges as high house prices and [when] the salary is not good,” he said, adding that this bit of misinformation directly targeted the reputation of the Taiwanese government, as well as its relationship with Paraguay.

According to Mr. Wu, such “disinformation campaigns” accelerate during times like the visit of top Taiwanese leaders to the United States and vice-versa, and during national elections.

“It really depends upon the context, purpose, and what kind of goal the attackers want to achieve,” he said. It’s difficult to find the source of disinformation campaigns like this, and by the time it is uncovered, it has already made an impact on the public and cast doubt on Taiwan’s democratic system of government.

Chinese meddling in Taiwanese elections also came up during Xi’s visit to San Francisco for the Asia-Pacific Economic Cooperation summit in November. After his meetings with the Chinese leader, President Joe Biden told reporters on Nov. 16 that he had discussed the matter with the Chinese leader.

“I made it clear: I didn’t expect any interference, any at all. And we had that discussion as—as he was leaving,” Mr. Biden said.

The SSF and Base 311

China’s cyberwar operations against Taiwan, which are currently at their peak, are managed by the People’s Liberation Army Strategic Support Force (SSF), and Base 311, a unit based in Fujian that focuses on Taiwan, Mr. Wu said.

According to Mr. Wu, Base 311 has its own media company. Dedicated to the implementation of the “Three Warfares” strategy—public opinion or media warfare, psychological warfare, and legal warfare—it creates an ecosystem that feeds media in Taiwan. Base 311 has at least six regiments overseeing the three types of warfare, as well as multiple forms of propaganda.

The latter is fed by China Huayi Broadcasting Corporation (CHBC), which the Global Taiwan Institute defines as Base 311’s commercial front.

“Its coverage of Taiwan is routinely negative, often highlighting political contention and social issues,” according to a 2017 report by the Washington-based non-profit.

Mr. Wu said China’s propaganda operations against Taiwan are encompassed by its “cyber approach” which he described as one of the means of “PLA invasion.”

“Cognitive warfare and disinformation integrates cyber, information, psychological, and social engineering attacks, and can operate in synchronization with other physical means aiming to affect attitudes and behavior of the targeted individual or group to gain advantage,” said Mr. Wu, adding that this cyber approach has been the crux of China’s pre-election influence operations.

If everyone pretends that the emperor has clothes when he’s naked, does that mean he’s not naked?  All it takes is one person to point out reality and break the collectively enabled delusion, so everyone must play along.  Why?  Because the delusion makes the emperor feel special and appeases his entitlement – Anger the emperor and he might make the whole nation miserable.  Just play along, what could it hurt?

The trans movement exists in this kind of bubble, a place where objective truth is no longer welcome and cognitive dissonance is encouraged for the sake of comfort.  And much like any oppressive environment the more people self censor to avoid rocking the boat the harder it is for individuals to speak their minds.  This is how consent is manufactured; by creating the illusion of consensus.  

Dave Chappelle is one of the few entertainers in the Hollywood arena that’s willing to point out when the emperor has no clothes, which is they the political left hates him with a seething passion.  Despite their consistent attempts to cancel his career, Chappelle is back with another Netflix special ‘The Dreamer.’  The comedian opens with guns blazing on the trans agenda…

Dave Chapelle drops truth bomb about the trans movement in his new Netflix special 🔥 pic.twitter.com/uuGMPM8gW2

— Libs of TikTok (@libsoftiktok) January 1, 2024

…infuriating the access media yet again. The accusations are flying that Chappelle likes to “punch down” which he hilariously mentions in the special as his favorite comedic pastime. 

It’s comedy. Everyone gets mocked, that’s why it’s funny. No one’s too special to be made fun of.

— Erin O’Brien (@ErinobrienActor) December 31, 2023

Well nothing is more hilarious than chicks pretending to be dudes, so it sounds awesome.

— Haywood (@MaddestNachos) December 31, 2023

Activists claim punching down isn’t funny.  But is it really punching down to make fun of the trans movement?  When almost every global corporation, non-profit institution and government aggressively promotes and defends the trans ideology, wouldn’t any criticism actually be punching up?  

Also, it appears most people actually loved the show…

Ricky Gervais, who also released a special over the Christmas period, and was attacked for again not towing the woke line, is the only thing more popular on Netflix right now, prompting him to post this:

We should host The Oscars together 😂 pic.twitter.com/Uca0qNKQDW

— Ricky Gervais (@rickygervais) January 2, 2024

By Charles Kennedy for Oilprice.com

China has reinstated tariffs on coal imports from the start of this year in what could be a blow to Russian exporters.

The levies, Bloomberg notes in a report, were removed in May 2022 to avoid a supply crunch amid a surge in coal demand. Russia, as one of the biggest suppliers of the commodity benefited from the tariff-free regime thanks to China’s appetite for coal.

Following the tariff removal, Russian grew to become China’s number-two coal supplier with the two countries planning annual imports to reach 100 million tons, which may have already happened in 2023.

Yet China also has a large domestic coal industry that the tariffs seek to protect. Domestic production has been growing, with the first three quarters of last year seeing a 3% uptick in total output even as imports rose, too.

State-owned energy major Sinopec recently forecast that demand for coal in China will peak in two years, at some 4.37 billion tons. Over the couple of decades that follow, Sinopec also said, coal will be largely replaced by non-hydrocarbon sources of energy led by wind and solar, rising to the equivalent of 3 billion tons of coal.

In the meantime, however, coal use continues strong in the world’s largest user, and so do imports. To shield its local producers, China will be reimposing a 6% levy on coal imports for electricity generation and heating and a 3% tariff on coking coal that is used in steelmaking and other heavy industries.

Besides Russia, other countries that will be affected include South Africa, Mongolia, and the United States. Indonesia and Australia, on the other hand, will not be affected because of their free trade agreements with Beijing.

The tariffs only apply to importers with the status of most-favoured countries. Other importers face a much higher import tariff of 20%.

With the imminent release of roughly 10,000 pages of documents (originally scheduled for Jan. 1, 2024) – expected to be a list of 156 John Does who were sex offender Jeffrey Epstein’s friends, recruiters, and victims – former Fox News host Tucker Carlson has raised questions about the official account of the 2019 death of Epstein in federal custody.

Jeffrey Epstein died in federal prison while awaiting trial on sex trafficking charges, with the official cause of death determined as suicide by a New York City medical examiner.

In an apparent preview of a forthcoming interview with Jeffrey Epstein’s brother Mark, Carlson shared a video on social media revealing the struggles to obtain basic documents related to the incident.

Mr. Carlson expressed skepticism about the official cause of death being ruled suicide, writing:

The U.S. government claims Jeffrey Epstein killed himself in a federal detention facility in Manhattan four and a half years ago, just before his trial.

If that’s true, why are there so few records available from that night?

Here’s Mark Epstein trying to get a copy of one of the most basic documents of all, the pre-hospital care report, written by the EMS team that moved his brother’s body out of the cell.

The U.S. government claims Jeffrey Epstein killed himself in a federal detention facility in Manhattan four and a half years ago, just before his trial. If that’s true, why are there so few records available from that night? Here’s Mark Epstein trying to get a copy of one of the… pic.twitter.com/yI2RLmOUQf

— Tucker Carlson (@TuckerCarlson) January 1, 2024

Caden Pearson reports that in the video, Mark Epstein is heard asking the employee, “But as of right now, you’re telling me you can’t find the PCR report?”

The employee responds, “Not for the 10th of August 2019… It’s not in the fire department database,” the employee continues. “I don’t know why.”

“If it’s supposed to be there, we’ll find out. But first, you’ve got to give the letters of administration before you can take them anywhere,” he added.

Mark Epstein insists that Jeffrey was in the hospital after being found, stating that he has photographs to support his claim.

After showing the employee some paperwork and noting the date the late sex offender died, the employee suggests, “Well, then they might have taken them directly to the morgue.”

“No, he was in the hospital,” Mark Epstein insists.

“I have photographs of him in the hospital too.”

Photographs from after Jeffrey Epstein’s death show a piece of cloth tied to the cell’s bunkbed and the interior of the cell. Epstein lacked a cellmate despite being supposed to have one and had an excessive amount of cloth, investigators found. (Office of the Chief Medical Examiner, City of New York via The Epoch Times)

The government employee tells Mark Epstein that Jeffrey’s pre-hospital care report cannot be located in the computerized fire department database, even though, Mark Epstein claims, the fire department suggested he seek the report in the first place.

“Yeah, well, I don’t know what happened, but so far, he’s not in the fire department database. I don’t know why,” the employee says.

Mark Epstein insists that he spoke to a fire department personnel who “suggested I get the PCR report.”

The employee responds, “Well, they’re saying one thing, but the computer is saying something else.”

“Yeah, well, since I heard that with my own ears, I believe them, and I don’t know why someone played with the computer, and it’s not there,” Jeffrey Epstein’s brother says.

Finally, Carlson concluded the post on X by saying: “We’ll be interviewing Mark Epstein soon.”

Which will be particularly timely given that the identities of 156 people, including several prominent names, such as Britain’s Prince Andrew and former President Bill Clinton, are expected to appear in the previously redacted documents this week.

Authored by Mike Shedlock via MishTalk.com,

Income is rising and so are wages. Even real income is up. But real wages are another matter…

Personal income data from the BEA, hourly wages from the BLS, real hourly earnings and chart by Mish.

Personal Income vs Hourly Wages Notes

• DPI means Disposable Personal Income. Disposable means after taxes.

• Real DPI means inflation adjusted using the Personal Consumption Expenditures (PCE) deflator. Real DPI is a BEA calculation.

• Average hourly earning are for production and nonsupervisory workers.

• Real wages are deflated by the Consumer Price Index (CPI) not the PCE.

• The BLS does not report a real hourly wage. I used the CPI-W index for production and nonsupervisory workers, produced by the BLS, as the deflator.

Personal Income Definition

The BEA defines personal income as “Income that people get from wages and salaries, Social Security and other government benefits, dividends and interest, business ownership, and other sources.” Rental income is a part of other sources.

Three Rounds of Fiscal Stimulus

• Round 1, March 2020: $1,200 per income tax filer, $500 per child(CARES Act) – Trump

• Round 2, December 2020: $600 per income tax filer, $600 per child (Consolidated Appropriations Act, 2021) – Trump

• Round 3, March 2021: $1,400 per income tax filer, $1,400 per child (American Rescue Plan Act) – Biden

The three rounds of free money fiscal stimulus (literally a helicopter drop), plus eviction moratoriums put an unprecedented amount of money in people’s hands. In addition, unemployment insurance paid people more to not work than they received working.

The third round of stimulus under Biden was totally unwarranted. However, it is also worth noting that Trump wanted a much bigger second stimulus package than the Republican Congress gave him. Trump is no fiscal hero.

The three stimulus packages, on top of supply chain disruptions, energy disruptions due to the war in Ukraine, and Bidenomics in general, set in motion the biggest wave of inflation in over 30 years.

Income and Wage Change

• DPI rose from 116.4 pre-pandemic to 143.5 in November of 2023. That’s an increase of 27.1 percent.

• Real DPI rose from 110.7 pre-pandemic to 117.7 in November of 2023. That’s an increase of 27.1 percent. That’s an increase of 6.3 percent. But much of that income increase is in the form of interest income, dividends, and rent. The average joe does not have much interest income or dividends. The average Joe does not collect rent. The average Joe pays rent.

• Average hourly earnings for production and nonsupervisory workers rose from 110.2 to 134.3. That’s an increase of 21.9 percent. But as the next line show, that big boost in wages did not buy much.

• Real average hourly earnings rose from 101.7 to 103.5. That’s an increase of 1.8 percent. But all of it came early. Hourly earnings rose in the recession because the lowest paid workers were the first to lose their jobs.

The index of real hourly wages peaked at 106.1 in the recession, declined a bit, then hit 106.1 again in December of 2021.

In the last two years (minus a month), real hourly earnings are down by 2.5 percent.

Rent Jumps Another 0.5 Percent

CPI month-over-month data from the BLS, chart by Mish

Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.5 percent in November.

Rent, which is sticky, rose at least 0.4 percent for the 28th consecutive month.

For discussion, please see Rent Jumps Another 0.5 Percent, Only a Decline in Gasoline Prevents a Hot CPI

The average Joe does not collect rental income. The average Joe pays rent, up at least 0.4 percent for 28 months.

Although wages are up 21.9 percent in nominal terms, real wages are down 2.5 percent in the last two years.

Free money to Israel and Ukraine does not help. And neither does the border.

One week ago we explained why the “most consensus trade” of 2024 – namely long Treasurys in expectation of lower yields – will blow up in the market’s face. Now, it’s the turn of Bloomberg Markets Live reporter and strategist, Ven Ram, to do the same.

The trouble with Treasuries after their humongous rally of the past two months is that they have priced in all the good news. That is especially so at the front end of the curve, which sets them up for a reality check as traders return to their desks this week to confront ISM manufacturing data to Fed minutes to non-farm payrolls.

Two-year Treasury yields slumped almost 45 basis points just last month, making it their best December in more than two decades. Looking at the more than 80-basis point decline in yields over the past two months, one is reminded of the steep decline in the first quarter of 2020. Back then, yields were sliding so imperiously in response to the pandemic that the Fed slashed its benchmark rate by a phenomenal 150 basis points in just one month — March — that year.

Except that the US economy now is in a far different shape, and in zero need of any rescue hand from the central bank. If anything, the inordinate loosening of financial conditions since the release of the December dot plot has perhaps had the effect of a de facto rate cut or two.

If the street’s forecasts of what is to come this week are right, we will see an improvement in the ISM manufacturing numbers for December, continued expansion in the ADP as well as non-farm payrolls data and a jobless rate still well below 4%. None of them spells like an imminent rate cut to me, which makes it more likely that the next 25-basis point move in front-end Treasuries will be higher rather than lower.

The Fed’s minutes will be keenly parsed for one cue more than any other: about when its members thought a rate cut could start. After all, Chair Jerome Powell commented at last month’s review that the policy committee discussed the timing of policy easing. Consistent with the pushback from several Fed officials afterward, I am inclined to think that March wasn’t what they were thinking — another factor that is likely to set up two-year notes for a correction.

There are breaking reports via Lebanese state media and AFP saying that Israel has conducted a strike against a Hamas office in a Beirut suburb. 

Lebanese security sources have said a senior Palestinian official was killed in an explosion in Beirut’s southern suburbs, which is also considered a Hezbollah stronghold. However, there is little that is verified at this point.

Unconfirmed reports that a drone hit a car in Dahiyeh, the southern suburb of Beirut. #Lebanon pic.twitter.com/L0Y5Zck71n

— Sharmine Narwani (@snarwani) January 2, 2024

Washington Post Beirut correspondent Sarah Dadouch has confirmed there was a large explosion in Beirut’s Dahieh neighborhood, writing that “a Hezbollah spokesman told me a Palestinian official headquarters was targeted in Dahieh.

At statement in Lebanese state media further says it was an Israeli drone that targeted the Hamas office in Dahieh. Lebanese News Agency is reporting 4 dead and several wounded in the attack, as emergency personnel respond.

In prior major flare-ups in fighting between Palestinians and Israel, Israel’s military has conducted such targeted operations on offices in Beirut, but this certainly will be seen as a major escalation by Hezbollah, which offers these Palestinian groups protection.

Seeing more indications from a few reliable sources on social media that the explosion tonight in Dahiyeh, a #Hezbollah stronghold, may have been targeting a Palestinian HVT. Lots of #Hamas and Palestinian Islamic Jihad commanders frequent Beirut. pic.twitter.com/U2xNnYo8m7

— Jason Brodsky (@JasonMBrodsky) January 2, 2024

developing…

Authored by Steve Watson via Modernity.news,

The Methodist Church in the UK has issued an ‘inclusive language’ guide, advising followers to refrain from using terms such as ‘husband’, ‘wife’, ‘brother’, and ‘sister’, reasoning that some people might find them “hurtful”.

The Christian Post reports  that the guide lists extensive categories of people with whom Methodists are advised to use “sensitive and inclusive” language when addressing minorities that have been “marginalised and/or demonised by common culture.”

The guide notes that “As Christians, we need to have the courage for conversations that can sometimes be difficult, to recognise that we sometimes exclude people, to listen with humility, to repent of any hurtful language and to take care with how we listen and what we say or write, in the Spirit of Christ.”

It continues, “There is infinite variety in the way that God’s creation is expressed in human life. This is worth bearing in mind as we speak and write. Terminology such as ‘husband’ and ‘wife’ may sound inoffensive but it makes assumptions about a family or personal life that is not the reality for many people.”

It adds that “The words ‘parent,’ ‘partner’, and ‘child’ are a good place to start. ‘Carer’ is also a neutral yet understandable way to refer to the primary carer of a child, who may or may not be their parent.”

Not ‘mother’ or ‘father’ then.

The Methodist newspeak guide also clarifies that “Language such as ‘brothers and sisters,’ while intended to be inclusive and friendly, doesn’t take into account our non-binary friends.”

It further states that “using a person’s chosen pronouns is helpful as it honours their identity.”

The guide also encourages congregations to “share your own pronouns in conversation,” before directing them to radical leftist LGBTQ+ activist groups, including Stonewall and GLAAD, as well as TikTok trans-activist Jeffrey Marsh, who was recently accused of sexually grooming children.

Jeffrey Marsh promotes his Patreon to minors on TikTok, where he coaches them behind a paywall on how to remove their parents from their lives. This is the definition of grooming.

Marsh hates his family and won’t feel fulfilled until more confused and pic.twitter.com/IeCBk6LDn9…

— Gays Against Groomers (@againstgrmrs) March 3, 2023

British Old Catholic cleric and conservative commentator Father Calvin Robinson slammed the Methodist Church over the guidance, noting “This is not Christianity. It is Critical Theories: ‘smash heteronormativity.’ It is no longer enough to acknowledge disordered lifestyles. Everything normative and ordered must be demolished for fear of causing offense.”

“Critical Theories is neo-Marxism,” he continued, adding “It is a communist ideology, antithetical to the Christian faith. It is not possible to be a communist *and* a Christian. One must make a choice. Embrace the ways of this trendy yet toxic ideology, or embrace God’s order.”

Critical Theories is neo-Marxism. It is a communist ideology, antithetical to the Christian faith.

It is not possible to be a communist *and* a Christian. One must make a choice. Embrace the ways of this trendy yet toxic ideology, or embrace God’s order.@MethodistGB pick one☝️

— Fr Calvin Robinson (@calvinrobinson) December 28, 2023

The devil uses Liberalism to pry open the hatches to squeeze Marxism in, which is a direct attack on God’s order.

Continued on my Substack:https://t.co/584R5Fj0Ld

— Fr Calvin Robinson (@calvinrobinson) December 28, 2023

While the Methodist Church is of Protestant denomination, the Catholic Church of England has also become so infested with wokery to the point that it has considered dropping the phrase “our Father” from the start of the Lord’s Prayer, and instructing clergy to refrain from using male pronouns when talking about God.

Some churches have gone as far as erasing references to the nativity and Jesus in a Christmas carol and replacing them with a celebration of “queer” people.

In July last year, the Church of England refused to define what a woman was, saying they had no definition of it on their books, despite still ostensibly opposing same sex marriage.

Islam looking more and more appealing with each passing day. pic.twitter.com/pLG9eS82JQ

— Paul Joseph Watson (@PrisonPlanet) February 7, 2023

The Church has even appointed a transgender archdeacon, and those within who express disagreement with such moves are shunned and punished.

In 2021, the CofE also announced it was introducing quotas for black and ethnic clergy to pave the way for ‘anti-racism training’ in the Church, as well as ‘contextualising church statues that may cause offence.”

Telegraph: “The Church of England will introduce a quota for black and minority ethnic (BAME) clergy, roll out anti-racism training & contextualise church statues “that may cause pain or offence.”

BAME quota goal is 30%. Last census showed UK is 87.2% white.

— Paul Joseph Watson (@PrisonPlanet) March 20, 2021

Earlier this year the CofE also established a £100 million fund to “address past wrongs of slavery,” even as some church buildings are literally falling apart.

*  *  *

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Apple shares fell in the early US cash session following a downgrade by Barclays analysts, who are cautioning about a slowdown in the sales of iPhones and MacBooks. 

Barclays analyst Tim Long slashed Apple from “Equal-Weight” to “Underweight” with a slight downshift in price target, from $161 to $160. The price target indicates Long expects a 17% share decline this year. 

“We expect reversion after a year when most quarters were missed, and the stock outperformed,” Long said. Tens of billions of dollars in stock buybacks could explain four quarters of revenue declines but rising share price. 

Long said, “We are slightly lowering our AAPL estimates following another round of checks. We are still picking up a weakness on iPhone volumes and mix, as well as a lack of bounce-back in Macs, iPads, and wearables.” Those checks include a worsening downturn in demand for the iPhone 15 out of China, the analyst continued, adding “together with developed markets remaining soft.” 

Long’s view of a weakening outlook for Apple products is based on these factors: 

1.  Expect continued iPhone weakness through the launch of the iPhone 16. Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling.

2. Believe Mac and iPad need to revert further to pre-Covid levels. These two products combined were basically showing no growth pre-Covid, but are still running 20-30% above those levels despite the rest of the industry correcting.

3. See growth deceleration in Services, with regulatory risk ramping. We model ~10% and ~8%growth in Services in FY24 and FY25, well below prior growth estimate of ~20%. In 2024, we should get an initial determination on the Google TAC, and some app store investigations could intensify.

4. Valuation stretched, particularly after several weak quarters. AAPL stock was a strong performer in CY23, but EPS declined through the year, so it was all multiple expansion. Given that We believe numbers will not be moving higher, we see P/E multiple pressure going into the new year. 

5. Longer term, diminishing returns on the ecosystem. AAPL remains a very strong ecosystem,moving from Mac-driven to iPhone-driven over the last decade. We believe there is a less ecosystem pull-through with new products/services, which will make growth harder over the next several years.

Apple shares recorded a monster gain in 2023, rising nearly 50%. However, Long warned: “A continued period of weak results coupled with multiple expansion is not sustainable.” 

Apple shares fell 3% on the downgrade. 

This is bad news for overall US equity indexes – because the Magnificent Seven (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla) have been responsible for about two-thirds of the S&P 500 Index’s advance last year. 

Full downgrade note available to pro subs in the usual place.