Month: August 2024

Authored by Lance Roberts via RealInvestmentAdvioce.com,

The market’s 8.5% decline during August sent shockwaves through the media and investors. The drop raised concerns about whether this was the start of a larger correction or a temporary pullback. However, a powerful reversal, driven by investor buying and corporate share repurchases, halted the decline, leading many to wonder if the worst is behind us.

However, the picture becomes more nuanced as we examine the technical levels and broader market conditions. While the recent bounce suggests the market decline may be over, risks remain—particularly with the November election looming. Let’s dive into the details.

The August Decline: What Caused It?

August has historically been volatile for markets; this year was no exception. A combination of factors drove the S&P 500’s 8.5% drop:

1. Elevated Interest Rates: The Federal Reserve’s continued commitment to fighting inflation led to increased concerns about economic growth slowing. That spooked investors betting on a soft landing for the economy when recent economic data deteriorated.

2. Weak Economic Data: A string of weaker-than-expected economic reports fueled the fire, including slowing job growth and declining consumer confidence. Concerns about a potential recession started the sell-off in equities.

3. The Yen Carry Trade: A significant rise in the Japanese Yen led to a rapid unwinding of leverage used by institutions to increase portfolio returns. For more information on the carry trade, read the linked article.

4. Technically Overbought: As we discussed repeatedly in June and July, the markets were technically overbought and extended from long-term means. Only an appropriate catalyst was needed for a 5-10% market decline.

The correction, however, was unsurprising and something we repeatedly discussed in June and July.

“Reversals of overbought conditions tend to be shallow in a momentum-driven bullish market. These corrections often find support at the 20 and 50-day moving averages (DMA), but the 100 and 200-DMAs are not outside regular corrective periods.

If you remember, in March, we discussed the potential for a 5 to 10% correction due to many of the same concerns noted above. That correction of 5.5% came in April. We are again at a juncture where a 5-10% is likely. The only issue is it could come anytime between now and October.“ – June 22nd

With that 5-10% correction complete, many investors wonder what caused the rapid reversal last week, given that many factors leading up to the market decline remain.

The Reversal: Investor Buying and Share Repurchases

Despite the sharp decline, the market found support as a wave of investor buying and corporate share repurchases helped stem the losses. Here’s how these factors played out:

1. Investor Buying at Key Support Levels: The S&P 500 found support at the 5153 level, which coincides with the lows of the trading range back in April. Buyers stepped in as the market declined 3% during the “Yen Carry” blowup. From there, buying volume began to accelerate.

2. The chart shows that the S&P 500’s bounce off that support was pivotal. With the markets oversold, the reversal of the decline began. As the market low held, it provided the confidence needed for investors to step back into the market.

3. Corporate Share Repurchases: August also saw a significant increase in corporate share buybacks. With stock prices down, many companies took the opportunity to repurchase shares at a lower cost as the “blackout window” reopened, providing additional support to the market. This corporate activity helped absorb some of the selling pressure and stabilized the market.

As we noted last week, we expected the “Mega-cap” stocks to lead the way higher, and we were not disappointed.

Notably, the market leadership, primarily growth stocks, has regained its footing, suggesting that the recent correction is complete and the bull market has resumed.

However, the recent rally has been very sharp and likely needs a breather before further gains can be made.

Technical Levels to Watch

With the market rebounding, it’s crucial to identify the key technical levels that will determine the following potential entry points to increase equity exposures.

1. Resistance at 5673: The first significant resistance level for the S&P 500 is at 5673, which coincides with the recent all-time highs. If the index can break above this level, it would signal a continuation of the recovery and potentially set the stage for a continuation of the rally. However, if the S&P 500 fails to break through this resistance, it could lead to another market decline to retest current support at the 50-DMA.

2. Support at 5330: On the downside, the 5,330 level remains a critical support zone. That number will continue to adjust higher as that is the 100-DMA. However, if that level fails to hold, there is only minor support at the recent lows before a test of the 200-DMA near 5100. Investors should watch the 100-DMA level closely, as a failure to hold here could signal that the market’s recent bounce was just a temporary relief rally.

While a pullback to support levels to increase equity exposure is likely, are there more substantial risks that investors should be aware of?

The Risks Ahead: November Election and Economic Uncertainty

While the market’s recent recovery is encouraging, several risks could derail the rally over the next few months.

1. November Election: The upcoming election adds another layer of uncertainty to the market. Historically, elections tend to increase volatility as investors react to potential policy changes. We could see sharp moves in sectors like healthcare, energy, and technology depending on the outcome. That uncertainty may lead to increased selling pressure, particularly if the election results are contested or lead to a significant shift in policy.

2. Economic Data: The market will remain highly sensitive to economic data releases. Any signs of further economic weakness could reignite fears of a recession, leading to another wave of selling. In particular, investors will watch for updates on inflation, employment, and consumer spending. If weakening economic data impairs earnings estimates, the risk of market revaluation increases.

3. Federal Reserve Policy: The Fed’s decisions will also shape market sentiment. If the Fed is willing to start cutting rates, the market may temporarily see that optimistically. However, historically, a Fed rate-cutting cycle has not benefited higher asset prices, as rate cuts tend to coincide with slower economic growth.

Risk management is always crucial when managing portfolios, as “no one” knows with certainty what markets will do over the next week, much less over the next month or quarter.

Conclusion: Is the Decline Over?

The market decline in August and subsequent reversal highlight the market’s volatility and the importance of critical technical levels. While the bounce off minor support and the surge in corporate buybacks suggest that the worst may be over, significant risks remain.

With the polls now very tight between Trump and Harris, the potential for managers to “de-risk” portfolios remains elevated, given the uncertainty of outcomes. Furthermore, that potential “de-risking” process will coincide with the October blackout period for share repurchases, removing another supportive buyer of equities. That combination could set up a likely “flash point” for volatility before the November election.

We remain underweight equities and overweight cash in the near term with our core Treasury bond holdings intact to hedge against a sharp increase in volatility. That positioning is unlikely to change over the next two months, and we are willing to sacrifice some performance in exchange for control over risk.

While we have discussed these simplistic rules over the last several weeks, we continue to reiterate the need to rebalance risk if you have an allocation to equities.

1. Tighten up stop-loss levels to current support levels for each position.

2. Hedge portfolios against significant market declines.

3. Take profits in positions that have been big winners

4. Sell laggards and losers

5. Raise cash and rebalance portfolios to target weightings.

If a further correction occurs, the preparation allows you to survive the impact. Protecting capital will mean less time spent getting back to breakeven afterward. Alternatively, it is relatively easy to reallocate funds to equity risk if the market reverses and resumes its bullish trend.

Investing during periods of market uncertainty can be difficult. However, you can take steps to ensure that increased volatility is survivable.

An unexpected violent storm, which some EU media outlets described as a ‘tornado,’ sank the British-flagged superyacht “Bayesian” early Monday morning off the coast of Sicily. Local authorities confirmed one dead, and six people are missing, including British tech entrepreneur Mike Lynch and Morgan Stanley International chairman Jonathan Bloomer. Bayesian was carrying 22 people during what appears to be a ‘weather-related’ incident.

Superyacht BAYESIAN sank off Palermo after a tornado hit early this morning. 15 rescued, 6 missing, including tech tycoon Mike Lynch.

MarineTraffic data shows its last signal received via AIS at 2:06 UTC before sinking.

Read more on the story: https://t.co/WOL75loP7I pic.twitter.com/vxzVraSrIF

— MarineTraffic (@MarineTraffic) August 19, 2024

Let’s take a step back because the plot thickens here. Just days before the Bayesian sank to the ocean floor, off the coast of Porticello – a small fishing village nestled between Palermo and Cefalu on Sicily’s western shore – Lynch’s co-defendant in the US Autonomy-Hewlett-Packard fraud trial was struck and killed by a car while out for a run near his home in England on Saturday. 

Here’s more from The Independent:

Stephen Chamberlain, Autonomy’s former vice president of finance, who worked alongside chief executive Mr Lynch, was killed after being hit by a vehicle while out running on Saturday, his lawyer, Gary Lincenberg said.

…

In a statement, Mr Lincenberg said: “Our dear client and friend Steve Chamberlain was fatally struck by a car on Saturday while out running.

“He was a courageous man with unparalleled integrity. We deeply miss him. Steve fought successfully to clear his good name at trial earlier this year, and his good name now lives on through his wonderful family.”

Chamberlain faced similar fraud and conspiracy charges as his former boss, Lynch, for allegedly conspiring to inflate their company Autonomy before it was sold to Hewlett-Packard for $11 billion in 2011. 

On June 6, a federal court jury in San Francisco found Lynch and Chamberlain not guilty following an 11-week criminal trial. 

According to the Pew Research Center analysis, only 0.4% of federal criminal cases in 2022 ended in acquittal, which means the two executives were extremely lucky with the positive outcome. 

However, not so much in the last several days, with Chamberlain killed by a vehicle while on a jog and Lynch missing after a tornado hit the superyacht he was on. 

Also on the vessel was Bloomer from Morgan Stanley, who has been confirmed missing by Italian authorities. 

Here’s more from Bloomberg about Bloomer… 

Bloomer, 70, has worked in the finance industry for five decades. He’s been chairman of Morgan Stanley’s European business since 2018, and was named to lead British insurer Hiscox Ltd.’s board last year. He is a friend of Lynch and was a witness for the defense in the long-running legal battle with Hewlett Packard.

The real mystery is how Lynch and Chamberlain went from being the luckiest men—acquitted in a federal criminal fraud case—to the unlikeliest in separate, unexpected incidents just days apart. 

US equity futures are flat after another narrow overnight range, following another euphoric session on Wall Street amid bets the Fed chair Powell will signal it’s ready to start cutting interest rates as soon as this Friday’s Jackson Hole symposium. As of 7:30am ET, S&P futures were up 0.1% to 5,634 while Nasdaq futures also gained 0.1%. MSCI’s all-country stock index headed for a ninth day of increases, its longest winning streak since December. Oil halted its latest rout, treasury 10-year yields held steady around 3.87%, the Bloomberg dollar index was unchanged after sliding to the lowest since March, while gold exploded to a new record high, trading at $2525. It is a quiet session with just the Philly Fed non-mfg activity index on deck.

In premarket trading, home improvement retailer Lowe’s cut its sales and earnings forecast, blaming a frozen housing market. Hawaiian Holdings rose 10% after the US Justice Department decided against challenging its proposed tie-up with Alaska Air. Meanwhile, the European Union said it plans to introduce a 9% tariff on Teslas imported from China. Here are other notable premarket movers:

• Fabrinet shares rise 8.8% after first-quarter forecasts for adjusted earnings per share and revenue topped the average analyst estimates. Analysts note AI momentum as company issues strong outlook for the current quarter.
• FuboTV shares increase 0%, putting the online TV provider on track for its sixth consecutive session of gains. The stock got a boost this week after Fox, Warner Bros. Discovery and Walt Disney were blocked by a judge from launching their streaming sports service rival one week before its rollout
• Kymera shares slide 3.8% after the biopharmaceutical company’s offering priced at $40.75-per-share via Morgan Stanley, JPMorgan, Stifel.
• Vornado Realty Trust shares rise 1.7% after Evercore ISI upgraded the real estate investment trust to outperform from underperform.

On the corporate front, Alimentation Couche-Tard Inc.’s preliminary proposal to buy 7-Eleven owner Seven & i Holdings Co. could be worth more than ¥5.63 trillion ($38.4 billion), based on the Japanese company’s market value after news of the potential deal was disclosed. Edgar Bronfman Jr. submitted a $4.3 billion bid to take control of Paramount Global and quash an existing offer from Skydance Media, Bloomberg reported.

Traders are taking a break after Monday’s session in the US lifted the S&P 500 for an eighth straight day. Stock volumes have been trending lower with investors reluctant to place big bets before central bankers gather for the Fed’s Jackson Hole economic symposium this week.

“What we’ve seen happen is a swath of recent data, which has eased fears about slowing US growth without stoking fears of re-accelerating inflation,” said Kyle Rodda, a senior market analyst at Capital.Com Inc.

With stocks relatively flat, attention has turned now to gold where the precious metal has broken out from its range and is hitting new record highs on an almost daily basis ahead of the coming dollar debasement about to be unleash by the Kam-unist regime of Kamala Harris who plans on “fighting” food inflation with price control. Gold has gained more than 20% this year, in part driven by the view that the Fed’s pivot toward cutting rates was nearing. Banks including UBS and ANZ say that there’s scope for further gains too, not just on the Fed’s policy but on central bank buying and demand for portfolio hedges.

In Europe, technology and travel shares outperformed, keeping the Stoxx 600 within a whisker of recouping August’s losses as investors bet that interest rates in the US will ultimately come down. Technology is the strongest performing sector, with energy the biggest laggard as oil stocks fall on easing supply risks from a potential Gaza cease-fire. Here are some of the biggest European movers on Tuesday:

• Huber+Suhner shares rise as much as 12%, the most in almost 13 years, after the Swiss electrical products manufacturer’s first-half results beat estimates and it confirmed its full-year guidance. Analysts see continued recovery in the second half of the year and Baader says the order flow was particularly impressive.
• Antofagasta gains as much as 0.9% after the copper mine operator reported first-half Ebitda that beat analyst estimates. Citi notes that higher copper prices offset the impact from lower production and higher unit costs.
• European oil stocks are down on Tuesday as oil extended the biggest drop in two weeks after the US said Israel accepted a cease-fire proposal in Gaza, potentially easing supply risks as concerns about the global demand outlook mount. Biggest laggards in terms of index points are Shell (-1.7%), BP (-1.7%), TotalEnergies (-1.2%), Equinor (-1.7%), Aker BP (-2.7%) and Eni (-0.4%)
• BT shares slide as much as 6% amid competition worries, after Sky struck a deal to launch its broadband services on CityFibre’s network from next year.
• Coloplast falls as much as 3.5%, the most since May, after the Danish ostomy and wound care company reported 3Q margins that fell short of estimates. The miss was a key negative in an otherwise overall in-line report where it also reiterated guidance, analysts say.
• DocMorris shares plunge as much as 17% after the pharmaceutical products retailer warned it is expecting to book a bigger annual adjusted Ebitda loss than previously anticipated as it reported interim results. Analysts at Jefferies say the weaker bottom-line target was expected, but the reduced revenue growth goal is the main disappointment.
• Wood Group shares swing between gains and losses after the Scottish engineering firm published mixed first-half results. Analysts weighed goodwill impairments and the net loss against some signs of recovery and stabilization, especially as the company held its guidance steady for the year, after Sidara ended takeover interest in Wood Group this month.

The recent turmoil in financial markets has left strategists unfazed about the outlook for European stocks. The benchmark gauge is seen ending the year at 535 points — about 4.6% above Friday’s close, according to the median estimate in a Bloomberg survey of 16 strategists. Still, increasing risks to the region’s growth outlook have reinforced the case for a policy adjustment when the European Central Bank meets next month, Governing Council member Olli Rehn said. Markets are pricing in at least two more rate reductions this year.

Asian stocks gained for a third day, helped by advances in Japan and South Korea amid optimism over Fed rate cuts. The MSCI Asia Pacific Index rose as much as 0.7%, with SK Hynix, Keyence and Samsung Electronics the biggest contributors to the advance. Key gauges in Japan climbed as the yen’s rally against the dollar stalled, supporting exporters such as tech companies and automakers. South Korean and Thai equities also gained.

In FX, the Bloomberg Dollar Spot Index is also little changed, trading near a 6 month low. The kiwi dollar tops the G-10 FX leader board, rising 0.4% against the greenback. The Swedish krona rises 0.3% even after the Riksbank cut interest rates and sketched out more easing than its previous guidance.

In rates, treasuries are steady, with US 10-year yields at 3.87%. The curve is steeper, unwinding much of Monday’s flattening move in 2s10s and 5s30s spreads. Corporate new-issue calendar may dominate the session, with Kroger expected to bring one of this year’s largest deals.

In commodities, WTI fell 0.6% to $73.95 after the US said Israel accepted a cease-fire proposal in Gaza, which however has zero chance of being accepted by Hamas. Copper steadied after a recent rebound and gold jumped by $18 to a record $2,525 an ounce on expectations that the Fed is poised to cut interest rates. Bitcoin gained 2%.

It’s a quiet day: on the US economic calendar we only get the August Philadelphia Fed non-manufacturing activity at 8:30am. Fed speaker slate includes Bostic (1:35pm) and Barr (2:45pm)

Market Snapshot

• S&P 500 futures little changed at 5,631.50
• STOXX Europe 600 little changed at 514.79
• MXAP up 0.6% to 184.89
• MXAPJ up 0.4% to 576.07
• Nikkei up 1.8% to 38,062.92
• Topix up 1.1% to 2,670.54
• Hang Seng Index down 0.3% to 17,511.08
• Shanghai Composite down 0.9% to 2,866.66
• Sensex up 0.6% to 80,873.27
• Australia S&P/ASX 200 up 0.2% to 7,997.73
• Kospi up 0.8% to 2,696.63
• German 10Y yield little changed at 2.24%
• Euro little changed at $1.1084
• Brent Futures down 1.2% to $76.71/bbl
• Gold spot up 0.5% to $2,517.95
• US Dollar Index little changed at 101.79

Top Overnight News

• Former US President Trump said he would consider ending the USD 7,500 electric vehicle tax credit and if elected, he would tap Elon Musk for a cabinet or advisory role if Musk would do it, according to an interview. Trump later stated that VP Harris informed that she will not do the Fox News debate on September 4th and he will conduct a tele-town hall, according to a post on Truth Social.
• Central bankers gathering this week for one of the world’s most prominent annual economic forums are set to find themselves more divided than perhaps any time since before the pandemic.
• Increasing risks to Europe’s growth outlook have reinforced the case for a policy adjustment when the European Central Bank meets next month, according to Governing Council member Olli Rehn.
• US Secretary of State Antony Blinken said Israeli Prime Minister Benjamin Netanyahu has accepted a cease-fire proposal to halt the war in Gaza and the next step is for “Hamas to say yes,” putting the onus on the group to end the 10-month conflict even as violence continued.
• A price war is spreading across China’s new-home market, as local governments dial back on intervention and developers race to recoup cash.
• Sweden’s Riksbank lowered borrowing costs and outlined more easing than previously expected as inflation has fallen below its target and the largest Nordic economy is sputtering.
• Oil extended the biggest drop in two weeks as the US said Israel accepted a cease-fire proposal in Gaza, potentially easing supply risks as concerns about the global demand outlook mount.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed and only partially took impetus from the tech-led gains stateside amid a lack of major macro drivers. ASX 200 edged mild gains with stock news in Australia dominated by earnings releases, while the RBA Minutes noted it is possible the cash rate would have to stay steady for an extended period and members agreed a rate cut in the short term was unlikely. Nikkei 225 outperformed and reclaimed the 38,000 level despite the absence of notable catalysts. Hang Seng and Shanghai Comp. declined amid lingering economic concerns, while China also maintained its Loan Prime Rates which was widely expected after last month’s bout of cuts to key funding rates.

Top Asian news

• Chinese Loan Prime Rate 1Y (Aug) 3.35% vs. Exp. 3.35% (Prev. 3.35%); 5Y 3.85% vs. Exp. 3.85% (Prev. 3.85%)
• China is unleashing billions of dollars of lending to technology start-ups and other small companies using their intellectual property as collateral as Beijing seeks to revive demand for loans and stimulate a lagging economy, according to FT.
• RBA Minutes from the August 5th-6th meeting stated the board considered the case to raise rates but decided a steady outcome better balanced the risks and it is possible the cash rate would have to stay steady for an extended period. Members agreed it is unlikely rates would be cut in the short term and they need to be vigilant to upside risks to inflation, while policy would need to remain restrictive and it was noted that an immediate hike in rates could be justified if risks to inflation had increased materially. Furthermore, members also observed that holding the cash rate target steady at its current level for a longer period than currently implied by market pricing may be sufficient to return inflation to target in a reasonable timeframe, but the Board will need to reassess this possibility at future meetings.
• China is said to be mulling allowing local governments to issue bonds for home purchases, according to Bloomberg sources.

European bourses, Stoxx 600 (+0.1%) are mostly, but modestly firmer (ex-FTSE 100), continuing the strength seen on Wall St in the prior session. FTSE 100 (-0.6%) is the worst performing index in Europe, weighed on by losses in Energy names amid the broader weakness in underlying oil prices; Shell (-1.8%), BP (-1.6%). European sectors are mixed; Tech takes the top spot, continuing the strength seen in the US on Monday. Travel & Leisure is also one of the better performers, benefiting from the recent drop in oil prices – as such, Energy is found at the foot of the pile. US Equity Futures (ES U/C, NQ U/C, RTY U/C) are flat, taking a breather following the significant strength seen in the prior session.

Top European news

• ECB’s Rehn said there are no clear signs of a pick-up in the manufacturing sector, while he added the recent increase in negative growth risks in the euro area has reinforced the case for a rate cut at the next ECB monetary policy meeting in September.
• Riksbank cuts its Rate by 25bps as expected to 3.50% (prev. 3.75%); Policy rate can be cut two or three more times this year – somewhat faster than the Board expected in June.
• Riksbank’s Governor Thedeen says moving gradually with rates is part of central bank strategy. There are good reasons to keep SEK on the Riksbank’s radar. Inflation is not under target, it is currently in line with target.

FX

• DXY is flat with the dollar showing mixed performance vs. peers. DXY remains stuck below the 102.00 mark in catalyst light trade as investors eye key risk events later in the week, including Jackson Hole and FOMC Minutes.
• EUR is flat vs. the USD in quiet newsflow. EUR on Monday was able to extend its advance on a 1.10 handle and has today printed a fresh YTD high at 1.1088.
• Cable has managed to poke its head above the 1.30 mark for the first time since July 18th, despite the lack of clear UK-specific catalysts.
• JPY is flat with USD/JPY well within yesterday’s 145.19-148.05 range with newsflow out of Japan and the US on the light side in the run up to the Jackson Hole event later in the week and BoJ Governor Ueda’s appearance before Parliament on the 23rd August.
• AUD is steady vs. the USD after a recent run of gains which has seen the pair gain a firm footing on a 0.67 handle and top out today at 0.6738.
• CAD is broadly steady vs. the USD in the run up to Canadian inflation metrics which are expected to see a pullback in the Y/Y rate and an increase in the M/M print.
• SEK was fairly unreactive to the Riksbank decision to cut rates by 25bps to 3.50%. The guidance for “two or three more times this year” in terms of policy cuts is a dovish shift vs the guidance seen at the last gathering for “two or three times in H2”, as it opens the door to a cut per meeting in H2.
• PBoC set USD/CNY mid-point at 7.1325 vs exp. 7.1317 (prev. 7.1415).

Fixed Income

• USTs are contained within a thin six-tick range with the benchmark yet to lastingly deviate from the unchanged mark. Data docket remains light, but Fed speak sees Barr and Bostic later today.
• A firmer start with EGBs finding a grinding bid early doors, but a slight dip to the 134.09 low was seen on German Producer Price metrics which ticked up from the prior Y/Y.
• Bunds then edged higher throughout the morning, to a 134.41 peak, approaching Monday’s 134.62 best; but some modest pressure was seen following Bloomberg reports that China is said to be considering allowing local gov’ts to issue bonds for home buying. Bunds were unreactive to the Green Bund auction.
• Gilts are modestly firmer in a narrow 99.74-99.88 band, which is entirely within the parameters of both Monday and Friday.
• Germany sells EUR 0.734bln vs exp. EUR 0.75bln 2.30% 2033 Green Bund & EUR 0.727bln vs exp. EUR 0.75bln 0.00% 2050 Green Bund. Sells EUR 0.734bln 2.30% 2033: b/c 3.3x (prev. 3.4x), average yield 2.16% (prev. 2.51%) & retention 2.13% (prev. 15.4%). Sells EUR 0.727bln 0.00% 2050: b/c 1.6x (prev. 2.2x), average yield 2.42% (prev. 2.41%) & retention 3.07% (prev. 20.2%)

Commodities

• Crude is softer intraday and continuing the price action seen on Monday, with focus on continued Gaza ceasefire talks and a weak Chinese economy. Brent October sits towards the lower end of a USD 76.55-77.77/bbl parameter.
• Precious metals are firmer across the board with broad-based modest gains against the backdrop of a subdued Dollar and with geopolitical risks looming. Spot gold printed a fresh all-time-high at USD 2,521.30/oz (vs low USD 2,497.51/oz).
• Base metals are mostly firmer across the board but to varying degrees, with copper prices somewhat flat intraday with some suggesting a short-covering rally ended amid China growth woes.
• LME Stocks: Copper +11975 (prev. -975).
• Equinor (EQNR NO) has commenced work to resume oil and gas output from Norway’s Gullfaks C platform.

Geopolitics – Middle East

• US President Biden says Hamas is ‘backing down’ from Gaza deal, according to AFP cited by Sky News Arabia.
• “[Israel-Hamas ceasefire] Negotiations scheduled in Cairo are expected to be postponed until the end of the week due to lack of progress in contacts”, according to Sky News Arabia citing Israeli official and diplomats via Israeli Broadcasting Corp
• Israeli PM Netanyahu accepted the updated proposal that includes some of his new demands because he knew that Hamas would reject it, according to Al Jazeera citing Axios quoting Israeli officials.
• US Secretary of State Blinken made it clear to Israeli PM Netanyahu that the US expects negotiations to continue until an agreement is reached, according to Al Jazeera citing Axios sources.
• Hamas senior official Hamdan said they confirmed to mediators that they don’t need new Gaza negotiations and what they need is to agree on an implementation mechanism. Hamdan added that US Secretary of State Blinken’s statement that Netanyahu accepted an updated proposal ‘raises many ambiguities’ since it is not what was presented to them and not what was agreed on, according to Reuters.
• Iran’s Foreign Ministry said they affirm the right to respond to the attack on their sovereignty and will do so at the appropriate time.
• Iran’s mission to the UN said they have no intention to interfere in US elections and demanded evidence from Washington after Tehran was accused of targeting the Trump campaign electronically.

Geopolitics – Ukraine

• Ukrainian military said its forces experienced repeated attacks in the Toretsk zone, Donetsk region and that its forces were under heavy Russian attack around Pokrovsk, eastern Ukraine. Ukrainian military later announced that air defence units were engaged in repelling a Russian air attack on Kyiv.
• Russia on Monday ruled out any peace talks with Ukraine despite Kyiv raising pressure on the Kremlin by claiming fresh advances in its offensive into Russian territory, according to AFP.
• US and South Korea are holding joint air drills to counter North Korean threat, according to Reuters.

US Event Calendar

• 08:30: Aug. Philadelphia Fed Non-mfg, prior -19.1

Central Bank Speakers

• 13:35: Fed’s Bostic on Innovating for Inclusion
• 14:45: Fed’s Barr Speaks on Cybersecurity

The European Commission announced this AM that, in its ongoing findings of an anti-subsidy investigation into Chinese imports of battery electric vehicles, all Tesla vehicles imported from China will be subject to a 9% tariff. Proposed tariffs on other EV companies were revised slightly ahead of what could become EU trade policy later this year.

Of all the proposed duties on Chinese EVs imported to the EU, Tesla appears to be the big winner and will pay the lowest rate of 9%. Reuters noted the EU “set a new reduced rate of 9% for Tesla, lower than the 20.8% it had indicated in July.” 

As for MG maker SAIC Motor Corp., Volvo Car AB parent Geely, and BYD Co., each of these companies face duties of 36.3%, 19.3%, and 17%, respectively. 

Other cooperating companies would be subject to a 21.3% tariff, while non-cooperating companies would be slapped with a 36.3% rate. These rates would be added to the current 10% duty faced by Chinese exporters. 

EU officials explained that Beijing’s apparent lack of subsidies for foreign-owned companies was one factor in the tariff calculation. 

The revised draft tariff decision burdens companies that make EVs in China and export them to Europe. The current duty is around 10%. 

The duties are part of an anti-subsidy investigation launched earlier this year. About 100 firms were investigated. The big finding included market-distorting subsidies across China’s entire EV supply chain. 

The Commission said EV companies subjected to proposed tariffs have ten days until Aug. 30 to provide comments and request hearings. If a qualified EU majority votes in favor of the final regulation, the tariffs could become law by Oct. 30 and remain in effect for five years, with the option extensions upon review. 

Meanwhile, Brussels and Beijing have been locked in technical talks to find an alternative solution. Any solution would need to comply with the World Trade Organization. 

“The EU is open to reaching an alternative solution on the position of the duties that would be effective and WTO [World Trade Organization] compatible. It would align with WTO rules and provide a solution to the problems we find,” a senior EU official told the South China Morning Post. 

SCMP noted, “In other words: the ball is in Beijing’s court to come up with something that would have the same desired effect as the duties.” 

Beijing has claimed that the proposed duties are protectionist and has threatened trade retaliations. They’ve threatened to impose duties on EU imports of luxury vehicles, engines, pork, and spirits. Beijing is also challenging the proposed tariffs at the WTO. 

Tesla is the big winner, with the lowest tariff rate. 

Authored by Daniel Lacalle,

Price controls, higher taxes, government intervention, and subsidies paid for by printing a constantly devalued currency.

These are the essential pillars of “21st century socialism” and the radical left Peronism that obliterated Argentina. These are also the main elements of the economic plan presented by Kamala Harris and the Democratic Party. Undoubtedly, this is the most radical socialist economic plan ever announced by the Democrats.

According to the Committee for a Responsible Federal Budget (CRFB), Harris’s proposals will cost $1.95 trillion over 10 years. However, it emphasizes that if certain measures become permanent, this figure could increase to $2.25 trillion.

The Harris campaign has stated that these costs will be offset by a classic excuse of socialism in any election: “higher taxes on corporations and high earners.” This is, obviously, ludicrous, because there is no revenue measure that will cover the already bloated $2 trillion annual deficit and an added $2 trillion. The mantra of “higher taxes for the rich” always means higher taxes and more inflation, a hidden tax, for you.

The Congressional Budget Office (CBO) has already warned of the fiscal disaster of the United States, with an annual deficit of 6% of GDP. Despite not accounting for a recession and projecting record tax revenues from 2024 to 2034, the CBO predicts an explosion in the budget deficit from $1.9 trillion to $2.8 trillion by 2034, even before factoring in Harris’s new spending plan. This means that the adjusted deficit will rise above 6.9 percent of GDP by 2034, almost twice the average of 3.7 percent over the previous 50 years.

Following the Harris plan, the United States public debt will likely increase by $24 trillion in a decade. As I have explained, there is no set of revenue measures that can bring $2 trillion per year in additional tax receipts, and tax hikes will harm both investment and growth.

An economy that generates an annual deficit of 6 percent of GDP to achieve a mere 2 percent annual growth is already on a dangerous path, and Harris’ plan would make it even worse.

Kamala Harris promises to cut inflation by spending and printing more money, reducing competition, and attacking businesses. It has never worked and never will because it is upside-down economics. Welcome to the U.S. “Peronism.”.

Imagine all those United States citizens who have escaped Latin American or European economies impoverished by interventionism to find a better opportunity in the United States only to find that the same policies will be implemented by Harris.

The narrative of price gouging and greedflation is simply false. In 2023, profit margins in the grocery industry hit the lowest level since 2019, at 1.6%, according to the IMF. Corporations, even if they were stupid and reckless, cannot make all prices rise constantly. Competition would eat away at their market share; newcomers would eliminate them, and aggregate prices would fall. Furthermore, stores and businesses cannot make aggregate prices soar, maintain the increase, and consolidate it, which is the measure of inflation (CPI) we read every month. The only thing that can make all prices rise and continue increasing at a slower pace is printing money and eroding the purchasing power of the currency.

The only thing that can make aggregate prices rise constantly is the destruction of the purchasing power of the currency, which comes from massive government spending and printing currency to disguise fiscal imbalances.

Kamala Harris and her team know that their spending plan will make the national debt soar and that price controls do not reduce prices. In fact, these should not be called “price controls” but “limits to competition.” If corporations were the cause of inflation and price controls were the solution, Peronist Argentina would have enjoyed the lowest inflation in the world in the past decades.

Harris’ proposals to forgive debt are profoundly anti-social. They do not forgive any debt; they just add it to the national debt and make you pay for it. This enormous increase in public debt will be a burden for every American, particularly the poorest, with persistent inflation and lower real wages. US citizens have already endured negative real wage growth since January 2021, when Biden took office, according to the Federal reserve of St Louis. Expect worse.

Why does Harris promote the same policies that have failed everywhere? Promising free stuff and blaming others for the negative consequences is the defining strategy of socialist politicians.

Are you surprised to see how Germany, France, and other historically rich nations slump into stagnation, high debt, persistent inflation, enormous taxes, and the destruction of the middle class? Those policies are what Harris is promising. Who benefits? The vast government and its surrounding corporations reap the benefits.

Many people hold the belief that a nation cannot be considered socialist if it contains private companies. It makes no sense. State control does not limit itself to capital ownership but also to the imposition of increasingly restrictive laws, regulations, and confiscatory taxes. In fact, the government likes to absorb most of the wealth created by the private sector without the inconvenience of managing the businesses. Huerta de Soto defines socialism as “any system of institutional, methodical aggression against the free exercise of entrepreneurship” and that is precisely what Harris promises.

Higher taxes and more debt.

The government will print money to provide subsidies in a currency that is constantly losing value. It will blame stores and businesses for inflation. Interventionist policies will continue to erode the private sector. And they will repeat.

The makers of these policies are aware that they will negatively impact the economy, yet they will also engender a substantial number of enslaved citizens who rely on the government and must abide by its decisions. Voters see an alleged tsunami of free money but ignore the fact that they will pay for it through higher inflation, lower real wages, and diminishing opportunities for small businesses and families.

The Harris team believes deficits do not matter and that the Federal Reserve can always disguise any budget imbalance. However, cracks have already appeared. Persistent inflation is the consequence of years of excessive spending and monetization. The next step is the risk of losing the U.S. dollar as the world reserve currency when the world stops accepting the ever-increasing debt.

BurgerFi’s financial situation is only getting worse.

It expects to report net losses of $18.4 million for the quarter ending July 1 compared to a $6 million loss during the same period in 2023. The increase was driven primarily due to lower operating income, higher general and administrative expenses and larger restructuring costs.

The company had $4.4 million in cash and cash equivalents as of Aug. 14.

As Julie Littman reports for RestaurantDive, the chain also expects to report restaurant sales declines of $1.8 million, or 4% year-over-year, last quarter.

This was driven largely by same-store sales declines at BurgerFi and sister brand Anthony’s Coal Fired Pizza and Wings.

The company said it closed underperforming BurgerFi- corporate locations, but the filing didn’t say how many locations were shuttered.

If the company’s senior lender declares that debt is due and payable immediately, the company would be unable to repay, and “the lender could foreclose on its security interest and liquidate or take possession of some or all of the assets of the company and its subsidiaries,” according to the filing.

This would require the company to curtail or cease operations.

“There is no assurance that the Company will be able to restructure its obligations, obtain additional financing, and/or sell assets on terms and conditions that will permit the Company to meet its current obligations,” BurgerFi added.

The chain secured an emergency protective advanced agreement with its lenders of $2.5 million earlier this month, but that is nowhere near enough to sustain operations with growing losses.

BurgerFi, which went public in 2020 following a merger with a SPAC, has struggled during the last few years as its net losses have persisted. In 2022, net losses topped $100 million, before improving to $30 million last year.  

In 2023, the chain hired Carl Bachmann as CEO and Christopher Jones as CFO to help turn around the business.

Authored by Jonathan Turley,

Eighty years ago, the U.S. government launched a war bond campaign featuring a painting by artist Norman Rockwell in the struggle against the authoritarian threat from Europe. The picture they chose was Rockwell’s Freedom of Speech depicting a man rising to speak his mind at a local council meeting in Vermont. The image rallied the nation around what Louis Brandeis called our “indispensable right.”

Now, that very right is again under attack from another European government, which is claiming the right to censor what Americans are allowed to say about politics, science and other subjects.

Indeed, the threat from the European Union may succeed in curtailing American freedom to an extent that the Axis powers could not have imagined. They may win, and our leaders have not said a thing yet about it.

In my book “The Indispensable Right: Free Speech in an Age of Rage,” I discuss the inspiration for Rockwell’s painting: a young selectman in Vermont named James “Buddy” Edgerton. The descendent of a Revolutionary War hero, Edgerton stood up as the lone dissenter to a plan to build a new schoolhouse over the lack of funding for such construction.

For Rockwell, the scene was a riveting example of how one man in this country can stand alone and be heard despite overwhelming opposition to his views. It was, for Rockwell (and for many of us), the quintessential American moment.

In the 1940s, people like Edgerton had to travel to small board meetings or public spaces to speak their mind.

Today, the vast majority of political speech occurs over the Internet and specifically social media.

That is why the internet is the single greatest advancement for free speech since the printing press.

It is also the reason governments have spent decades seeking to control speech over the internet, to regulate what people can say or read.

One of the greatest threats to free speech today is the European Digital Services Act. The act bars speech that is viewed as “disinformation” or “incitement.” European Commission Executive Vice President Margrethe Vestager celebrated its passage by declaring that it is “not a slogan anymore, that what is illegal offline should also be seen and dealt with as illegal online. Now it is a real thing. Democracy’s back.”

In Europe, free speech is in free fall. Germany, France, the United Kingdom and other countries have eviscerated free speech by criminalizing speech deemed inciteful or degrading to individuals or groups. The result had made little difference to the neo-Nazi movement in countries like Germany, which is reaching record numbers. It has, however, silenced the rest of society.

According to polling, only 18 percent of Germans feel free to express their opinions in public.

Fifty-nine percent of Germans do not even feel free expressing themselves in private among friends. Only 17 percent feel free to express themselves on the internet.

They have silenced the wrong people, but there is now a massive censorship bureaucracy in Europe and the desire to silence opposing voices has become insatiable.

Some in this country have the same taste for speech-regulation. After Elon Musk bought Twitter and dismantled most of the company’s censorship program, many on the left went bonkers. That fury only increased when Musk released the “Twitter files,” confirming the long-denied coordination and support by the government in targeting and suppressing speech.

In response, Hillary Clinton and other Democratic figures turned to Europe and called upon them to use their Digital Services Act to force censorship against Americans.

The EU immediately responded by threatening Musk with confiscatory penalties against not just his company but himself. He would have to resume massive censorship or else face ruin.

It was a case of the irresistible force meeting the immovable object. The anti-free speech movement had finally found the one man who could not be bullied, coerced or threatened into submission.

Musk’s defiance has only magnified the unrelenting attacks against him in the media, academia and government. If Musk can be broken, these figures will once again exercise effective control over a large swath of speech globally.

This campaign recently came to a head when Musk had the audacity to interview former president Donald Trump. In anticipation of the interview, one of the most notorious anti-free speech figures in the world went ballistic.

European Commissioner for Internal Markets and Services Thierry Breton issued a threatening message to Musk, “We are monitoring the potential risks in the EU associated with the dissemination of content that may incite violence, hate and racism in conjunction with major political — or societal — events around the world, including debates and interviews in the context of elections.”

While offering a passing nod to the freedom of speech, he warned Musk that “all proportionate and effective mitigation measures are put in place regarding the amplification of harmful content in connection with relevant events.” In other words, be afraid, be very afraid.

Musk responded with “Bonjour!” and then suggested that Breton perform a physically challenging sexual act.

To recap, the EU is now moving to force censorship upon American citizens to meet its own demands of what is false, demeaning or inciting. And that includes censorship even of our leading political candidates for the presidency.

The response from the Biden administration was not a presidential statement warning any foreign government from seeking to limit our rights or even Secretary of State Antony Blinken calling the EU ambassador to his office for an expression of displeasure.

That’s because Biden and Harris are not displeased with but supportive of letting the EU do what they are barred from doing under our Constitution. This administration is arguably the most anti-free speech government since John Adams signed the Sedition Act. They have supported a massive system of censorship, blacklisting and targeting of opposing voices. Democratic members have given full-throated support for censorship, including pushing social media companies to expand in areas ranging from climate control to gender identity.

So, after only 80 years, our leaders are silent as a European government threatens to reduce our political speech to the lowest common denominator, which they will set according to their own values. Not a shot will be fired as Biden and Harris simply yield our rights to a global governing system.

But we do not have to go quietly into this night. Free speech remains a human right that is part of our DNA as Americans. We can fight back and protect millions of Edgertons who want to express their views regardless of the judgment of the majority.

I previously called for legislation to get the U.S. government out of the censorship business domestically. We also need new legislation to keep other countries from regulating the speech of our own citizens and companies. While this country has long threatened retaliation in combatting market barriers in other countries, we need to do the same thing for free speech. We need a federal law that opposes the intrusion of the Digital Services Act into the U.S.

If free speech is truly the “indispensable right” of all Americans, we need to treat this threat as an attack on our very existence. It is not only the rawest form of foreign intervention into an election, but a foreign attack on our very freedoms. This is why we must pass a Digital Freedom Act.

*  * *

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of “The Indispensable Right: Free Speech in an Age of Rage” (Simon & Schuster).

Metrics assessing women’s safety, inclusion, and access to justice vary greatly by country and region.

In this graphic, Visual Capitalist’s Julia Wendling ranked the top 10 nations for women, using the 2023 Women Peace and Security Index scores from the Georgetown Institute for Women, Peace and Security.

Countries are given an index score out of 1.0 that is derived based on the following components:

• Inclusion: education, employment, financial inclusion, cell phone use, parliamentary representation

• Justice: absence of legal discrimination, access to justice, maternal mortality ratio, son bias

• Safety: intimate partner violence, community safety, political violence targeting women, and proximity to conflict

Which Are the Best Countries for Women? 

All of the top 10 countries for women received index scores above 0.9, significantly higher than the global average of 0.65. Nine of them are located in Europe, with New Zealand (#10) representing the only regional outlier.

The highest-ranked country was Denmark, which scored particularly well across inclusion (such as financial inclusion and parliamentary representation) and justice (such as absence of legal discrimination and access to justice) metrics. Its Scandinavian peers—Sweden (#3) and Norway (#7)—followed closely behind.

Overall, the group of best countries for women feature low maternal mortality, high education rates, and a lack of political violence against women and proximity to conflict.

Other Takeaways 

Canada (#17), the UK (#26), and the U.S. (#37) all rank relatively high but didn’t make the top 10 list. Lower rankings for parliamentary representation, maternal mortality, and community safety dragged the score for the U.S. down to lower than European counterparts.

If you found this interesting, check out this visualization that looks at the countries with the most gender-equal pay among OECD countries.

By Tor Vollalokken. The blog appeared earlier this month as an op-ed in Dagens Næringsliv. Tor Vollalokken enjoyed more than fifteen years as an Investment Banker and thirty years as an independent analyst and advisor to sovereigns, hedge funds, fund managers, family offices, and energy companies worldwide, focusing on Scandinavian currencies.

NOK’s structural challenge

The weakening of the krona in recent years is, for me, explained through two structural factors:

1. A large capital outflow in kroner is caused by an import surplus in the goods trade balance (the petroleum sector is left out, since it is essentially a currency balance).

This negative krone balance has been there for a long time, though has accelerated somewhat in recent years. Both the Ministry of Finance and Norges Bank are, of course, aware of this negative balance, but they probably see the funding of the budget deficit – which is a krone inflow – as matching this krone capital outflow – and to a large extent it has.

2. The relatively new problem lies in the securities balance, where over the past four years Norwegians have invested significantly more in foreign equities and bonds than foreigners have in Norway.

This has resulted in a large krone capital flight out of Norway, so much that it explains the broader part of the krone’s weakening.

Some of the investments Norwegians do abroad are currency hedged, and this reduces the krone output somewhat.

The reasons foreigners do not invest more than they do and, why Norwegians invest as much abroad as they do, are certainly several.

I am not a politician, and therefore I do not have any opinions about it. I am only making a few assumptions about whether changes in taxes, regulatory conditions and ambitions can be expected, that will either strengthen or weaken the krone. As I see it today, such changes are few and probably for some time into the future. I therefore assume that the structural capital outflow in kroner in the next few years will continue at approximately the same level as what has been seen since 2020, and it will therefore be a source of further krone weakening.

Policy tools

Norges Bank only has the policy rate as tools to achieve its inflation target, and has also shown no desire to use other tools.

It is critical for the inflation target that the krone does not weaken further. The krone will probably have to regain some ground from its current level, for Norges Bank’s inflation projection in September not to be adjusted upwards.

This summer I expressed in “Dagens Næringsliv” that Norges Bank is “cornered.” By that I mean that it will be the krone exchange rate that determines the future interest rate level in Norway. I think this is unfortunate. The interest rate should be set based on the inflation target and desired developments for business and households, including achieving high employment.

The krone’s structural problem can be fixed.

This can happen through political decisions that stimulate increased investment in Norway from abroad or reduce Norwegians’ appetite for foreign investment. Again: It’s not my table.

Alternatively, speculative investors can buy the kroner as a counterweight to the kroner capital outflow. I would have great reservations in my clients becoming a solution to the krone’s speculative problem. They are big enough in total for a short-term solution, but with a strong profit motive, they will only buy krone when a number of parameters are in place, and the krone interest rate is only one of them.

Fed to the rescue?

The most important incentive is actually the outlook for the dollar and the dollar interest rate – which is completely outside Norges Bank’s control. Should my clients first buy the krone, and then choose not to sell the krone again after an appreciation in the exchange rate, they would want to be paid well. That means an interest rate differential to currencies of trading partners, which we are quite far away from today.

I think it is sad that Norges Bank makes itself dependent on speculative investors. The krone’s structural problem should not be solved by them.

Norges Bank needs instead extended use of measures to prevent an undesirably high level for interest rates. I have therefore proposed that a small part of the Oil Fund to be currency hedged, in order to neutralize the krone capital outflow. Its purpose is to ensure far less volatility in the krone exchange rate and an exchange rate level that does not threaten the inflation target or financial calculability for businesses and households.

The oil fund is a resource that no other country has. It is more than 20 times Norges Bank’s currency reserves. Lack of success for currency interventions on previous occasions or for other countries is therefore, in my opinion, not very relevant.

Not expanding the use of instruments means while not setting interest rates at uncomfortably high levels means Norges Bank relying on other central banks cutting interest rates – and a lot.

In practice that is monetary policy largely based on luck.

A massive, early-stage lithium mining project in Serbia faces huge and animated public opposition, casting some doubt on the viability of a key component of Western Europe’s push for a “green transition” away from fossil fuels. Opposition to the Rio Tinto Group project is powered by a hybrid engine fueled by environmentalism and nationalism. 

The size and intensity of the opposition was on full display earlier this month, as an estimated 24,000 to 27,000 marching protesters filled wide boulevards in Belgrade, chanting “Rio Tinto get out of Serbia” and “you will not dig,” and carrying signs saying “We do not give Serbia away.” Others disrupted train travel by filling two of the city’s stations, with some blocking the tracks. 

Over the past few years, the mine project has been a stop-and-go affair. After Rio Tinto’s license was given the green light in 2019, it was revoked in 2022 amid the final run-up to Serbia’s general election — following months of enormous protests like the one seen a few weeks ago. Then-Prime Minister Ana Brnabic said the decision was made in deference to the protesters, and declared, “We put an end to Riot Tinto in Serbia.” 

This July, however, a court ruled the revocation was unconstitutional, and the license was restored shortly after. Pressure from the European Union likely figured in the change of course — Serbia wants to join the EU. 

If it proceeds to production, Rio Tinto’s $2.55 billion Jadar Valley mine in the western part of the country would be the largest lithium mine in Europe, with the potential to fill 90% of Europe’s current lithium demand. It would also assure Rio Tinto a spot among the global leaders of the mineral that’s a critical ingredient of lithium-ion batteries.

Farmers and activists in Serbia have sparked nationwide protests to stop the building of Rio Tinto’s first European lithium mine, warning it would pollute their land and endanger public health https://t.co/QXyP6MuH0l pic.twitter.com/6LCy2skmSP

— Reuters Business (@ReutersBiz) August 9, 2024

“There is no green transition in Europe without this lithium,” Rio Tinto’s top dog in Serbia, Chad Blewitt, told the New York Times. His company has spent more than a half-billion on land acquisitions and exploration already, and it could be another two years until production is underway. Rio Tinto (RIO) shares closed Friday at $61.28, and have traded between $59 and $75 over the past 52 weeks. 

Opposition groups want a permanent, countrywide ban on lithium and boron mining. “We are not going to give up. The mine cannot be built on agricultural land,” 63-year-old protester Mica Miliovanovic told Reuters. “This does not have anything to do with politics.” Separately, 25-year-old Angela Rojovic told the Times, “I don’t need green cars. I need green apples and green grass.”

In a promotional video that aims to reassure Serbians of the mine’s economic benefits and minimal environmental impact, Rio Tinto says “the critical minerals are found below the surface, separated from water sources. Around 200 kilometers of tunnels will link underground mining operations…while farming continues above the mine.” 

Nonetheless, some Serbians say their land is being exploited and their health jeopardized to advance the aims of people outside the country. “[We] fear Serbia will be sacrificed to provide lithium for electric vehicles that pretty much nobody in Serbia can afford,” Green-Left Movement co-director Biljana Djordjevic told the BBC. 

There’s also a geopolitical element: For some, the mine is a litmus test separating those who want to align the country with the United States and Western Europe against those who want to maintain a relationship with Russia. When the latest round of protests erupted, officials claimed the real objective was toppling the government of President Aleksandar Vucic — who himself said intelligence from the Russian Federation indicated a coup was in the works.

In addition to environmentalists, members of the ultranationalist, Russia-friendly People’s Patrol have also joined in the anti-mine protests.  When Vucic decided to back the mine in July at the urging of the EU, it was seen as an indication of his intent to disengage from Russia.   

German officials have been pushing the project hard, with Chancellor Olaf Scholz and Mercedes Benz executives visiting Belgrade last month. However, the German element ruffles some feathers in Serbia. Dragan Karajcic, a politician leading villages in the vicinity of the mine, told the Times he was seething when the Germans assured Serbians the mine would be safe. He pointed to Nazi atrocities that took place in nearby Draginac in 1941, with thousands of civilian executions following similar assurances of the locals’ safety.

Nebojsa Petkovic, a villager who traveled to Belgrade to lead the August 10 protests, told the Times, “Let the Germans save the planet. We need to save ourselves.”