At least 19 people are unaccounted for (probably dead) after a massive explosion at a Tennessee explosives plant on Friday, while secondary blasts forced rescuers to keep their distance. 

The blast took place at Accurate Energetic Systems near Bucksnort – approximately 60 miles southwest of Nashville. The company specializes in the development, manufacture, handling and storage of explosives and other products for military, aerospace, and commercial demolition markets. 

According to WKOW, the blast occurred during a regular shift change, so there may have been more people coming and going. 

On Friday, October 10, an explosion was reported at a Tennessee explosives manufacturer in Hickman County.

The explosion took place at the Accurate Energetic Systems in the Bucksnort area. pic.twitter.com/B7MA2VJgyR

— NewsChannel 5 (@NC5) October 10, 2025

“We do have several people at this time unaccounted for. We are trying to be mindful of families and that situation,” said Humphreys County Sheriff Chris Davis, adding “We do have some that are deceased.“

Video from the scene shows flames and heavy smoke rising from a debris field, while residents from miles away reported feeling the explosion. 

Residents in Lobelville, a 20-minute drive from the scene, said they felt their homes shake and some people captured the loud boom of the explosion on their home cameras. –WaPo

“I thought the house had collapsed with me inside of it,” said resident Gentry Stover, adding “I live very close to Accurate and I realized about 30 seconds after I woke up that it had to have been that.”

Hickman County Advanced EMT David Stewart told the Washington Post that emergency crews were initially unable to enter what was left of the plant due to continuing detonations. 

After weeks of intensive interviews – some running two hours, Treasury Secretary Scott Bessent has narrowed the field for the next Federal Reserve chair down to five candidates from an initial 11, according to CNBC, citing senior Treasury officials. The group includes two current Fed policymakers, Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller; former Fed Governor Kevin Warsh; National Economic Council Director Kevin Hassett; and Rick Rieder, BlackRock’s chief investment officer for fixed income.

Bessent plans a fresh round of interviews is planned in the coming weeks and months, however given next week’s World Bank and IMF meetings in Washington, officials said the process could slip until after Thanksgiving.

The current plan under discussion would have the president first nominate the chosen candidate to the Fed’s Board of Governors and then elevate that person to chair at a later date. One consideration, officials said, is the remaining term attached to specific board seats. Outgoing Chair Jerome Powell’s seat carries roughly two years left on its 14-year term, while the seat formerly held by Adriana Kugler, now occupied by Stephen Miran, expires in January and could provide a full term for a prospective chair. Officials emphasized that the sequencing and seat choice remain fluid.

Trump has already publicly named Warsh, Hassett and Waller as finalists, making Bowman and Rieder the newest additions to the White House’s short list. The administration has adopted a more open vetting process than recent predecessors, periodically announcing names as the field has grown – and now, narrowed.

According to Polymarket, Hassett is the current favorite to be Powell’s replacement…

The search unfolds amid unusually direct criticism of Fed policy from the White House. The president has repeatedly urged sharp rate cuts and previously threatened to remove Powell. He also fired Fed Governor Lisa Cook over alleged mortgage fraud – allegations she denies. Lower courts have blocked Ms. Cook’s removal, and the Supreme Court is set to hear the case in January. Those moves have intensified concern about political pressure on the central bank and raised the stakes around the chair selection.

Waller appeared on CNBC Friday morning, where he suggested more rate cuts. 

“I want to move towards cutting rates, but you’re not going to do it aggressively and fast, in case you make a big mistake on which way that things go,” he said. 

He also suggested that “Job growth has probably been negative the last few months. it doesn’t look like it’s doing much better. I don’t hear anybody with big hiring plans.”

Fed Governor Christopher Waller: “Job growth has probably been negative the last few months. it doesn’t look like it’s doing much better. I don’t hear anybody with big hiring plans.” pic.twitter.com/aXDZPNTixq

— Aaron Rupar (@atrupar) October 10, 2025

Full interview: 

Bessent’s Criteria – and Rieder’s Appeal

Treasury officials offered the clearest view yet of what Mr. Bessent is seeking in a nominee. He wants a central banker open to fresh thinking on monetary strategy and the Fed’s institutional design, with demonstrated experience across economics, monetary policy, bank regulation and management.

Bessent recently authored an essay sharply critical of the central bank’s trajectory, calling for reviews of its policy tools, structure and mission. He has argued the Fed has grown too large and strayed beyond its core mandate, signaling a preference for scaling back its footprint and curbing reliance on extraordinary tools – particularly when it comes to quantitative easing.

No single candidate is viewed as a front-runner, officials said. Still, they acknowledged that Mr. Rieder has left a strong impression. A fixture on Wall Street and a frequent television commentator, Mr. Rieder oversees one of the industry’s largest fixed-income platforms and is known for closely tracked analysis of the bond market and the Fed. CNBC suggests that his outsider status – he is the only finalist who has never served at the central bank – could be a selling point for an administration signaling it wants change.

What It Means for Policy and Markets

Investors will parse the shortlist for clues about the central bank’s policy tilt and appetite for institutional reform. Bowman and Waller bring continuity and recent policy experience; Messrs. Warsh and Hassett would be viewed as policy veterans aligned with a more muscular critique of post-crisis Fed activism; Rieder would represent a market-savvy outsider with management scale and a data-driven reputation.

Authored by Lance Roberts via RealInvestmentAdvice.com,

If you want to understand where we are in the cycle, skip the noise and follow profits. Corporate profits are the lifeblood of investment, hiring, and market returns. Crucially, linkage to the real economy is very tight. In the national accounts (NIPA), the BEA’s “profits from current production” (with inventory valuation and capital consumption adjustments) rose in Q2-2025, but only modestly: up $6.8 billion from Q1, and notably revised down by $58.7 billion from the prior estimate. That’s not the surge you’d expect if we were entering a new, powerful profit upswing. The correlation is unsurprising, given that economic activity generates the revenue to obtain corporate profits.

While the revision to the third estimate of real Q2 GDP growth increased to 3.8% annualized, all was not what it seemed. The reversal of the import surge in Q1 to get ahead of tariffs did the heavy lifting in Q2. More notably, consumer spending, the main driver of economic activity, showed continued weakness. Again, the linkage between PCE and corporate profits is critical, given that spending generates corporate revenues.

The point for investors is that while the economic growth number “looks” hot, the profits revision tells a quieter story about corporate income momentum. In other words, output accelerated, but profit growth didn’t follow in lockstep. That divergence matters for equity investors who ultimately get paid in earnings, not GDP. On a level basis, after-tax corporate profits (CPATAX) stood at roughly $3.26 trillion SAAR in Q2-2025, near the high end of the post-pandemic range but not breaking decisively higher. However, net profit margins have come under pressure, and economic growth has slowed. That “plateau with wiggles” profile of the last two years remains intact, and while margins remain elevated, when margins flatten as price multiples rise, future return math tends to get harder.

Zoom in on the listed companies, and you get a similar nuance. FactSet’s S&P 500 Q2-2025 dashboard shows blended earnings growth accelerating year-over-year with net profit margins around 12.3%, still above long-run norms and reflecting solid breadth of beats. Good news, but the market had already priced a lot of good news. However, the rest of the economy is not seeing the same growth. The deviation between large public and small private net operating surpluses is quite dramatic.

Regular readers of our work at RealInvestmentAdvice will remember we’ve been writing for years that profits and the economy move together over complete cycles, and that revenue and profits don’t levitate indefinitely above economic capacity. The thread through my prior pieces, specifically on Kalecki’s profit identity, is the detachment of markets from fundamentals. The earnings-economy linkage, fiscal impulses, savings behavior, and trade balances can push profits temporarily above trend, but gravity eventually reasserts itself.

That lens is still helpful in 2025.

Profits, Prices, and Pay: How Inflation Filters Into Margins

The revival of an old debate followed the pandemic and its aftermath. Are corporate margins the cause of inflation, or the result of it? As discussed in Corporate Greed Is Not The Cause Of Inflation, corporations are victims of inflation, not the cause.

“One simply has to reason through the claim to uncover the absurdity. If corporations can willy-nilly raise prices and enjoy “excessive” profits, why don’t they do it all the time? Did corporations suddenly get greedy in 2021? And why did the Federal Reserve spend a decade fretting about inflation being ‘too low’ as it struggled to hit its 2% target? Was there not enough corporate greed before coronavirus?” – Michael Maharrey

The European Central Bank (ECB) was one of several studies confirming our previous thesis. “Profit-led inflation” can emerge when factors constrain supply but demand remains high. Fed Chair Jerome Powell also noted such:

“The ongoing episode of high inflation initially emerged from a collision between very strong demand and pandemic-constrained supply. By the time the Federal Open Market Committee raised the policy rate in March 2022, it was clear that bringing down inflation would depend on both the unwinding of the unprecedented pandemic-related demand and supply distortions and on our tightening of monetary policy, which would slow the growth of aggregate demand, allowing supply time to catch up.”

In other words, basic economics states that if the supply/demand curve shifts, inflation will be the consequence if supply constricts.

While the “greedflation” narrative resonated with media pundits, corporations struggled with a supply shortage amid a stimulus-driven demand surge. However, that tailwind for profit margins is now gone. As the San Francisco Fed noted, markup fluctuations have not driven U.S. inflation in the post-pandemic disinflation phase. As supply chains healed and demand normalized, the contribution from markups cooled. Inflation’s path has increasingly reflected costs and supply/demand rebalancing rather than persistent profit-push. The nuance matters as it tells you whether margins will keep inflating prices, or mean-revert as costs and demand fluctuate.

With inflation moderating, but still somewhat sticky in services, maintaining profit margins is becoming more difficult. If the economy slows as demand slows, that difficulty will increase. Crucially, unit labor costs, the most essential recurring input, increased by just 1.0% in Q2. When price growth slows while labor-cost pressures ease, margins can hold up, but only if top-line growth remains decent. That’s the narrow path corporate America is walking today, as shown in a recent analysis by Albert Edwards at Societe Generale.

“Unit labour cost inflation, which economists regard as the key source of cost push inflation, has slowed to below 1%, suggesting that the sharp fall in NFCB (non-financial corporate business) inflation is not anomalous.”

Let’s pull the macro and micro together. Corporate profit margins are still very elevated versus history. While Q2 earnings did fine, slowing economic growth is a risk. Furthermore, as inflation gravitates toward the Fed’s target range and productivity rebounds, the “easy” boost to margins from price hikes fades. Profits depend more on real demand growth, productivity gains, fiscal impulse, and mix, not just pricing power. That’s consistent with the Kalecki framework. Government “dis-saving” (deficits), household saving behavior, net investment, and trade flows explain the macro profit pool.

“The Kalecki Profit Equation clearly explains that while debts and deficits erode economic growth and are deflationary through the diversion of capital from productive investment, a reversal of deficit spending suggests risk for investors. Valuations are high, partly because investors assume elevated profit margins will persist. However, the cumulative change of the inflation-adjusted price of the market significantly exceeds the profits being generated. Previous such deviations have not ended well for investors, which is what the Kalecki equation suggests.”

If deficits shrink and households retrench, profit margins become harder to defend, no matter how clever the pricing strategy.

Valuations, Sentiment, and Profits

Now to the uncomfortable bit. Valuations and sentiment have been running ahead of the actual improvement in the profit base. As discussed in the “Bull vs Bear Case,” valuations are already elevated. Forward P/E for the S&P 500 sits at 22.5x earnings with trailing earnings at 25x. UBS notes that such readings are among the top 5% since 1985.

Furthermore, high valuations mean expectations are high and reflect investor sentiment. The risk, of course, is that if earnings disappoint, then forward valuations (expectations) must be recalculated, and currently, the margin for error is slim at best. Notably, given that earnings are derived from actual economic activity, the current gap between the annual change in earnings and GDP is notable. The long historical correlation between the two suggests that a higher risk to investors may be present more than realized.

Sentiment says the same thing. Investor sentiment readings have spent much of Q2 and Q3 above their long-term average, and “greed” metrics have frequently leaned hot, even as breadth narrows to a handful of mega-caps. When optimism, narrow leadership, and premium valuations line up, the market becomes more dependent on flawless execution from profits. Revisions don’t need to be disastrous to cause price air pockets; they only need to be “less great.”

Notably, some of this cycle’s EPS strength is still financial engineering rather than organic profit growth. Corporate buybacks remain enormous, and on pace to exceed $1 trillion in 2025. While they reduce share counts to lift per-share earnings, it also depletes capital that could have been used for more productive purposes. That’s not a moral judgment; it’s simple arithmetic. But it does mean EPS can look stronger than underlying profits, which matters when investors pay a premium multiple for that EPS.

This is why, at RIA, we’ve kept hammering on the detachment theme in 2025. When markets run far ahead of the profits-GDP complex, future returns compress, and the margin for error shrinks. That doesn’t mean an imminent crash, as bulls don’t die of old age, but it does mean risk-adjusted returns deteriorate when price outruns earnings power.

Conclusion: The Investor’s Risk Map From Here

Here are the four take aways for investors from this discussion.

• Profits are fine, not fabulous. The national accounts show profits rising slightly but being revised lower; S&P 500 margins remain high but not accelerating. That constellation is “good enough” for a range-bound market, but fragile if growth cools or if a sector with heavy index weight wobbles.

• The inflation tailwind for margins is fading. Disinflation plus a downshift in unit labor cost growth is constructive for margins, but it also takes away the easy price-pass-through that boosted 2021–22 profitability. From here, real demand and productivity have to carry the baton. Revenue growth will test today’s margins if consumer spending slows, because of resumed student loan payments, tighter credit, or slower job gains.

• Valuation risk is no longer theoretical. With forward P/E north of ~22× and sentiment often leaning greedy, the market is paying for growth, durability, and AI-era productivity gains to materialize broadly. That can work if the profits/GDP engine follows through. But it also means negative EPS revisions, narrower breadth, or even “less great” guidance can trigger outsized drawdowns.

• Financial engineering can’t do all the lifting. Buybacks will keep underpinning EPS, but they don’t expand the economy-wide profit pie. When insiders sell aggressively into repurchase programs, the optics (EPS) can look better than the underlying economics (aggregate profits), especially if the fiscal impulse fades in 2026. That’s a classic setup for multiple compression even without a profit recession.

The economy is growing, profits are okay, but risk is ahead as inflation cools, and labor-cost pressure eases. That mix can support near-term stability, but not complacency. If you’ve benefited from this year’s rally, think in terms of risk-budgeting: where are your exposures most tethered to unchallenged margin assumptions, optimistic revisions, and valuation premia? That’s where small disappointments can have a significant price impact. The playbook that’s worked for us all year remains intact: trim extensions, add on weakness, keep duration and factor exposures diversified, and let the data lead.

In markets, corporate profits write the checks. Make sure your portfolio is aligned with the part of the story that’s actually funding the narrative.

Venezuelan President Nicolas Maduro has condemned Washington placing Caracas in its crosshairs for a newly resurrected ‘war on drugs’ – which Maduro has said is really all about pursuing regime change.

At a moment of the Pentagon’s largest build-up of forces ever off Venezuela’s coast, Maduro is calling for an emergency UN Security Council meeting to convene, in order to condemn these “mounting threats” from the United States. This has resulted in diplomats indicating that a meeting is indeed set to take place Friday afternoon in New York.

Venezuela’s foreign ministry has said that the US military build-up, and recent strikes against at least four alleged drug-smuggling boats, endangers “peace, security and international and regional stability.”

Maduro wants the security council to hold a formal debate on the crisis and “make recommendations to curb any plans of aggression” on Washington’s part.

So far, there have been at least 21 deaths reported from the US military intervention in the southern Caribbean, and interestingly Colombia has said at least one of the boats was operated by its own traffickers.

The UN council is likely to pay special attention to the fact that President Trump informed Congress last week in a letter that the US is currently in “armed conflict” with the drug cartels.

The Trump administration has said that in reality Maduro is the de facto leader of these cartels, and so he’s not the legitimate leader of resource-rich Venezuela. On this point, the NY Times is out with the following bombshell on Friday:

Venezuelan officials, hoping to end their country’s clash with the United States, offered the Trump administration a dominant stake in Venezuela’s oil and other mineral wealth in discussions that lasted for months, according to multiple people close to the talks.

The far-reaching offer remained on the table as the Trump administration called the government of President Nicolás Maduro of Venezuela a “narco-terror cartel,” amassed warships in the Caribbean and began blowing up boats that American officials say were carrying drugs from Venezuela.

Under a deal discussed between a senior U.S. official and Mr. Maduro’s top aides, the Venezuelan strongman offered to open up all existing and future oil and gold projects to American companies, give preferential contracts to American businesses, reverse the flow of Venezuelan oil exports from China to the United States, and slash his country’s energy and mining contracts with Chinese, Iranian and Russian firms.

However, the report says that President Trump still rebuffed this offer. The consensus is that Secretary of State Marco Rubio’s hard anti-Maduro line has prevailed, also in favor of oppositive activist and leader María Corina Machado, who was just awarded the Nobel Peace Price on Friday. The Nobel was awarded, supposedly, as she has kept “the flame of democracy burning”.

Why give the Nobel Peace Prize to an opposition leader who applauds US pressure against her country when the US Navy is preparing for an attack on Venezuela?
– Is the logic that democracy delivers peace, and the US military delivers democracy through war? pic.twitter.com/6q1cUHtxFT

— Glenn Diesen (@Glenn_Diesen) October 10, 2025

“Behind the scenes, however, Venezuela’s senior officials, with Mr. Maduro’s blessing, have offered Washington far-reaching concessions that would essentially eliminate the vestiges of resource nationalism at the core of Mr. Chávez’s movement,” NY Times continues.

Apparently the US administration is currently more enticed by her own economic pitch. She has argued that only democracy, rule of law, and openness to the international community can truly allow foreign access to Venezuela’s resources, and that Maduro will not deliver:

“She argued that even greater economic wealth — $1.7 trillion in 15 years — awaited U.S. companies in Venezuela if her movement launched a political transition. (Ms. Machado was awarded the Nobel Peace Prize on Friday for what the Norwegian Nobel Committee described as “her tireless work promoting democratic rights for the people of Venezuela.”)

It is indeed curious that the Nobel Committee while denying Trump, has chosen to award a person potentially at the center of US regime change policies in Venezuela.

Celebrating “Peace” regime change according to Norway’s Nobel committee…

They’re setting up the world stage against Venezuela so everyone just accepts an invasion! Don’t fall for it https://t.co/njJMI6OKpV

— Sopo Japaridze (@sopjap) October 10, 2025

Machado’s economic adviser, Sary Levy, argued to the Trump White House that “What Maduro offers investors is not stability, it’s control — control maintained through terror.” She told the Times, “The Trump Administration has shown a clear intention to not fall for these offers of easy solutions.”

After Thursday night Israel’s security cabinet formally approved Trump’s 20-point peace plan for Gaza, the ceasefire has formally taken effect Friday, and the Israel Defense Forces (IDF) reportedly completed a withdrawal to agreed-upon deployment lines within Gaza at noon.

The IDF withdrawal, which occurred under cover of artillery fire and airstrikes in some areas, starts a 72-hour countdown during which Hamas is to release all remaining hostages as part of the first phase of the US-brokered deal. The IDF released footage of its drawdown.

“CENTCOM has confirmed that the Israeli Defense Forces completed the first phase withdrawal to the yellow line at 12PM local time. The 72 hour period to release the hostages has begun,” Steve Witkoff posted on X, offering US verification.

With the withdrawal, Israel’s military now effectively controls a little over half of the Strip’s territory, but which is mostly outside urban zones.

Al Jazeera is reporting that displaced residents of the north have begun seeking to return to their largely devastated homes and communities. This as Gaza’s Government Media Office is urging Palestinians “to cooperate and be disciplined” as the resumption of aid starts flowing.

Hamas-linked Palestinian police forces in Gaza have begun moving back into areas the IDF withdrew from, saying officers will “fulfil their duties of serving and supporting citizens, and protecting public and private property.”

“We call on citizens to be extremely cautious and vigilant when returning to their homes and residential areas for the presence of suspicious objects, hazardous waste, and unexploded bombs,” it said.

In some places, fighting and shelling continued even as the historic ceasefire was announced, as Israeli media documents:

• Media outlets in Gaza reported Friday that five people were seriously injured in an IDF strike on a school that had been serving as a shelter for displaced people in Jabalia, in northern Gaza City.
• ahead of the deal taking effect, an IDF reservist soldier was killed in a Hamas sniper attack in Gaza City on Thursday afternoon.

IDF Spokesman Brig. Gen. Effie Defrin said in a video address while getting visibly emotional the ceasefire in the Gaza Strip “is an emotional moment for the people of Israel and for the IDF troops and soldiers who have fought and acted over the past two years with courage, bravery, and out of a sense of mission and dedication.”

The Red Cross in Israel is getting ready to receive the hostages, and early Hamas reportedly indicated it will not release them with any kind of ceremony or other propaganda, as it did in initial rounds.

Hamas has meanwhile said it got no clear indications on its submitted list of Palestinian prisoners it expects to be returned, instead, as Times of Israel details:

Israel has published the full list of 250 Palestinian security prisoners serving life sentences slated for release as part of the hostage-ceasefire agreement.

The list, published by the Justice Ministry, comes the morning after the cabinet approved the US-backed deal, aimed at returning the remaining hostages and permanently ending the Gaza war. Of the 250 prisoners, 15 will be freed to East Jerusalem, 100 to the West Bank and 135 are slated for deportation.

🎥WATCH: Southern Command troops in the midst of adjusting operational positions in Gaza. pic.twitter.com/P0ruvWTmQ9

— Israel Defense Forces (@IDF) October 10, 2025

Hamas wanted to see Popular Front leader Ahmad Sa’adat and senior Hamas figures Ibrahim Hamed and Hassan Salameh on the list of those to be released, but they are not.

Meanwhile Prime Minister Netanyahu has threatened that full war will return to the Gaza Strip if Hamas doesn’t fulfil its end of the deal, and if it doesn’t do things “the easy way”.

Not even brokering a historic cease-fire deal between Israel and Hamas that ended more than two years of war was enough for President Trump to secure the 2025 Nobel Peace Prize.

Early Friday, the Norwegian Nobel Committee awarded the prize to Venezuelan opposition leader María Corina Machado “for her tireless work promoting democratic rights for the people of Venezuela and for her struggle to achieve a just and peaceful transition from dictatorship to democracy.”

“Machado is receiving the Nobel Peace Prize first and foremost for her efforts to advance democracy in Venezuela. But democracy is also in retreat internationally. Democracy – understood as the right to freely express one’s opinion, to cast one’s vote and to be represented in elective government – is the foundation of peace both within countries and between countries,” Norwegian Nobel Committee wrote in a statement, adding that Machado “meets all three criteria stated in Alfred Nobel’s will for the selection of a Peace Prize laureate.” 

Jørgen Watne Frydnes, chairman of the Nobel Peace Committee, was asked by reporters about international pressure to award the prize to President Trump for his historic Israel-Hamas peace deal. He noted that “in the long history” of the Nobel Peace Prize, the committee has seen many different campaigns and “media tension,” adding that it receives letters and emails each year from people around the world expressing “what, for them, leads to peace.”

Frydnes concluded, “We base our decision only on the work and the will of Alfred Nobel.” 

It’s important to note that Barack Hussein Obama received the 2009 prize for “his extraordinary efforts to strengthen international diplomacy and cooperation between peoples.” 

What exactly were those “extraordinary efforts”? By the time Obama won the prize, he accomplished very little; in fact, in the years ahead, the former left-wing president went on to drop 26,000 drone strike bombs across seven countries and stoked racial divisions in America to unprecedented levels. 

Obama was given the Nobel Peace Prize for getting elected as a black man

He then went on to drop 26,000+ drone strike bombs in more than 7 countries and deepened racial divisions in America to unprecedented levels

Trump has signed more peace deals and stopped more wars than… https://t.co/GIIbsgdNOA

— DC_Draino (@DC_Draino) October 9, 2025

“The Nobel Prize is sorely tarnished from giving it to unworthy scoundrels like Obama,” Dinesh D’Souza wrote on X.

Trump on Obama’s prize…

FACT CHECK: TRUE! 😂

President Trump on Obama’s Nobel Peace Prize:

“They gave it to Obama for doing absolutely NOTHING but destroying our country.” pic.twitter.com/dOZwEIBAvh

— Trump War Room (@TrumpWarRoom) October 9, 2025

What’s laughable is that globalists award themselves and their friends fancy prizes for doing “God’s work” – yet under their decades of rule, they’ve managed to spark endless wars, implement failed Keynesian economics that fueled a global debt crisis, push toxic Marxist-inspired social, criminal justice reforms and other policies, and enforce nation-killing open borders, among countless other disastrous ideas that have sown chaos worldwide. Yet when Trump comes to power to correct these failed globalist policies, the same liberal elites label him a “threat to democracy,” a “fascist,” a “Nazi,” and every other insult in the dictionary. Maybe it’s time for a new Nobel Prize system, just like Elon Musk is about to usher in a new Wikipedia-like platform, called Grokipedia. 

After a week of political chaos and a rollercoaster ride in French stocks, French President Emmanuel Macron is expected to appoint a new prime minister on Friday in a last-ditch effort to end more than a year of political paralysis and economic turmoil, marked by surging debt, rising poverty, and deeply divided parliament – all of which have pushed his second term to the brink of collapse.

To start the week, outgoing Prime Minister Sébastien Lecornu abruptly resigned on Monday, shortly after unveiling a new Cabinet, fueling a political crisis and turmoil in regional markets. The move triggered a surge in calls for Macron’s resignation or new elections. In response to save face, Macron has vowed to name a successor by the end of today. 

According to AFP News sources, Macron is expected to meet with leaders from the right-leaning National Rally (RN) and the radical left France Unbowed party at the presidential palace. Those sources confirmed that Macron will announce a new prime minister by evening. 

Neither Macron nor Lecornu has offered any color or clues over who is in the running to be the next premier. 

However, cryptocurrency-based prediction market Polymarket has socialist prime minister Bernard Cazeneuve at 30% odds, with Jean-Louis Borloo at 22.9%, and Pierre Moscovici at 13.3%. 

Macron faces a massive fork in the road: appoint either a leftist or a technocratic leader to break the impasse of a deeply divided parliament. Either option will require compromises to avoid a no-confidence vote and could force the abandonment of Macron’s unpopular pension reform. 

Macron’s 2024 snap election bet ultimately failed and produced a hung parliament and shattered his centrist bloc’s dominance. Repeated government collapses, along with failed budget negotiations and internal rivalries, have left France’s political system gridlocked and its economy in turmoil.

France’s public debt has surged to 114% of GDP, while poverty reached 15.4% in 2023, marking the highest rate since records began – all suggest Macron is a horrible globalist leader. The European Commission and ratings agencies warned Paris to dial back spending and align with EU debt rules… 

In markets, the CAC 40, the benchmark French stock market index, initially dropped 2% on the political turmoil earlier this week but has since clawed back those losses. 

Marine Le Pen, a prominent figure on the nationalist right and a three-time presidential contender, said earlier this week that she would thwart all action by any new government and would “vote against everything.” 

Headline from FT…

We’ll end the note with commentary from UBS analyst Simon Penn, who has been covering developments out of France all week.

Penn told clients earlier that political and economic turbulence facing France and the UK this year echoes Britain’s 1970s struggles, an era defined by populist backlash, failed reform attempts… 

In the 1970s, Britain went through a period of political turmoil and industrial unrest. The economic policies the government attempted to implement at the beginning of the decade were rejected by voters. It took almost a decade for the country to realise “there was no alternative”. Today, both the French and British governments find themselves in circumstances where voters are rejecting their ideas and are instead being lured by populist policies that appear to have all the gain with none of the pain.

This is about political sequencing rather than direct economic parallels. The economies and markets of 2025 are very different from those of fifty or so years ago. But voter demands and political responses are similar. In 1979, new British Conservative Prime Minister Margaret Thatcher stood for election on a series of economic policies that were very similar to those proposed by the previous Conservative PM Edward Health in 1970. In between, the UK endured general strikes, a three-day week and an IMF bailout.

A very senior minister in that first Thatcher government once said that many of the economic policies introduced by Thatcher weren’t actually original, mostly they were inspired by those of Heath nine years earlier. His point was that the country hadn’t been ready for those policies earlier in the decade and needed to learn what the alternative route looked like before being willing to accept them.

What unites the 1970s UK to the UK of today, and also current French and British politics, is a statement and a question. In the wake of the Global Financial Crisis, then Luxembourg PM Jean-Claude Juncker said “We all know what to do, but we don’t know how to get re-elected once we have done it.” In 1974, having faced a backlash from voters, PM Heath asked the UK in the run up to a general election “Who governs Britain?” – the answer being a choice between government (his) or the unions (the allies of his Labour opponents).  He lost and the country opted for a new Labour government. Margret Thatcher essentially asked the same question in 1979, and won. Applying Juncker’s phrase to that period in the 1970s, to get elected afterwards voters have to experience the alternative for themselves.

President Macron is facing Juncker’s statement and grappling with the decision as to whether to ask the country, as Heath did, and risk the consequences of the answer. What Macron needs his government to find is a policy route out of a near 114% debt/GDP ratio (on course for 125% in five years time); and a projected 5.4% of GDP budget deficit this year. The budget plans of his last three PM’s have all been similar:  departmental spending cuts, higher taxes, pension reform; and recently a proposal to abolish two public holidays.

Heath favoured free markets. He wanted to curb the power of the unions and end prior policies of state intervention in failing businesses and industries.  During his first two years, from 1970 to 1972 he struggled to achieve his policy objectives and in 1972 he performed a U-turn. His Chancellor Anthony Barber cut taxes, increased spending and recommitted to assisting failing industry.  By late 1973 Heath had been unable to appease the unions and in the midst of general strikes, the power workers walked out. The problems were exacerbated by the 1973 OPEC oil crisis and Heath ordered the country into a three-day week in an effort to reduce energy usage. In February 1974 he called an election, lost swathes of seats, failed to create a governing coalition, and eventually handed the administration over to a minority Labour government. Initially Labour were able to make some compromises with the unions, but as time passed the unions pushed their demands further and further. By the late 1970s the country was again on strike and had been forced to apply to the IMF for financial assistance.

What’s interesting looking back at the UK towards the end of the 1970s was that two Labour governments, run by prime ministers that were sympathetic to unions, were unable to work with them. To overlay a present day term on the politics of 50 years ago, the public came to see that that the extreme demands of “populists” could not be satisfied.

The Conservative campaign of 1979 borrowed very heavily from Heath’s manifesto of a decade earlier. It sought to curb union power, reduce taxes, reduce government borrowing, encourage free-markets and also self-reliance. Margret Thatcher had many other ideas and also employed aggressive marketing, but at the heart of her manifesto were the same policies Heath had attempted to deliver.

France and the UK face familiar political pressures then. For Macron the circumstances might be more acute than for Starmer, but even in the UK there is plenty of talk as to how he could be ousted and who could take over. A pivot by either Macron or Starmer, to either swing policy to placate voters with “easy” policy or in the case of France roll the dice with an election, could go very wrong.

What the IMF was to the UK in 1976, could become the ECB to France if voters reject Macron and the policies that are needed. The UK’s next election isn’t due until 2028, but the circumstances look similar. The unfortunate lesson from the UK in the 1970s is that the required policies are right there. It’s just a question of time and pain until they are accepted.

. . .

Authored by Steve Watson via Modernity.news,

A massive three quarters of British people agree the country is “broken” according to a major new poll.

The survey for the i newspaper by pollster JL Partners reveals that “Britain today is broken” is a statement that garners overwhelming support in the country.

A majority voters of every political party, age group, and region agree with the sentiment.

An overall total of 74 percent of British people, when told they “must choose” an answer, agreed with the statement. 

While voters of outsider parties were more inclined to agree, the poll found that even those who support the establishment parties think Britain is fucked.

NEW in @theipaper:

Which of the following comes closest to your view?

Britain today is broken: 74%
Britain today is not broken: 26%

🔴 Labour ‘24 voters: Broken 59% / Not broken 41%
🔵 Tory: 76% / 24%
🟣 Reform: 91% / 9%
🟡 Lib Dem: 66% / 34%

1,006 UK adults, 03/10-06/10

— JLP (@JLPartnersPolls) October 8, 2025

Among leftist Labour Party voters in the 2024 election, 59 percent believe the country is broken. Similarly, 66 percent of Liberal Democrat voters and 76 percent of Conservative voters, despite their parties’ traditional support for the status quo, also view Britain as broken.

While likely for very different reasons to 91 percent of Reform supporters, extreme leftist supporters of the Green Party, 87 percent of them to be precise, also believe the notion to be accurate.

Among young people, a majority of 56 percent see the country as damaged.

The poll’s findings highlight a rare consensus across ideological divides. The widespread perception of a fractured nation, shared across political affiliations, age groups, and regions, serves as a scathing rebuke to Prime Minister Keir Starmer’s leadership.

The fact that even 59 percent of Labour’s own 2024 voters agree Britain is broken highlights a rapid disillusionment, suggesting Starmer’s administration is perceived not as a fresh start but as a continuation of systemic failures, alienating the very base that propelled him to power.

The migrant crisis—characterized by record illegal Channel crossings and strained public services—has fueled public frustration, with many viewing the government’s response as wholly inadequate or mismanaged.

The proposed Digital ID system, touted as a solution to illegal immigration, has instead sparked fierce backlash, perceived as a technocratic overreach that threatens individual liberties.

It represents a further erosion of rights, compounding public discontent with Starmer’s inability to address the root causes of immigration concerns while appearing to prioritize control over personal freedoms.

This pervasive sense of a “broken” Britain is further aggravated by growing concerns over attacks on freedom of speech, which have intensified under Starmer’s government, which faces accusations of authoritarian tendencies through aggressive policing of online dissent and proposed regulations that stifle criticism of policies like immigration handling.

Policies and actions perceived as criminalising certain forms of expression have alienated a broad spectrum of the population.

Against this backdrop, Starmer’s premiership appears increasingly out of touch, failing to bridge the gap between public sentiment and policy outcomes. The Digital ID initiative, rather than restoring trust, has deepened skepticism, casting Starmer’s government as emblematic of a disconnected elite unable to address the nation’s fractured state.

Instead of addressing these concerns, Starmer has gone down the road of attacking his biggest threat, Nigel Farage as “negative,” as if somehow the problems he continually raises are not real or not as bad as he makes out.

During the Labour Party conference recently, Starmer even suggested those who acknowledge that Britain has big problems want the country to fail.

“They all do,” Starmer said, adding “They want to turn this country, this proud, self-reliant country, into a competition of victims. Saying to you, to working people, don’t trust in each other, we can’t fix this, this is not a great country.”

He added, “decline is good for their business. I mean, think about it. When was the last time that you heard Nigel Farage say anything positive about Britain’s future? He can’t. He doesn’t like Britain, doesn’t believe in Britain, wants you to doubt it just as much as he does. So he resorts to grievance.”

Thus Starmer is directly targeting those pointing out the country has been decimated by years of government neglect and attacks on British culture, and the very people expressing a desire for change in order to turn it around.

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To end the week, Chinese A-shares retreated, with the SHCOMP down around 1% and the SZCOMP nearly 2% lower, as markets reopened following the Oct. 1–8 “Golden Week” public holiday.

Two notable headlines from China hit the wires overnight: first, Beijing’s new export controls targeting parts of the battery supply chain; and second, a crackdown on chip imports aimed at steering domestic firms away from Nvidia’s artificial intelligence chips.

Bloomberg added more color on the expanded export controls on lithium-ion batteries in a report, noting that:

Exports of some lithium-ion batteries, along with some cathode and graphite anode materials, will need government permits from Nov. 8, the Ministry of Commerce said Thursday. Certain related technology and equipment will also be subject to controls, it said, in a move that followed Beijing’s announcement of wider restrictions for rare earths.

Beijing’s tougher export regime comes ahead of a high-stakes meeting this month between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, in South Korea to hammer out a trade deal. Washington expanded its sanctions last week to target a broader range of companies from its geopolitical rival.

In a note to clients, Citigroup analyst Jack Shang commented on the news:

“We believe the government wants to preserve Chinese technology leadership on the battery supply chain. With the new mechanism, the government will have the means to manage exports should it consider it necessary.” 

Bloomberg’s graphic shows China dominates the global battery supply chain…

The second headline comes from the Financial Times, citing sources that said China intensified enforcement of chip import controls in an effort to reduce domestic reliance on U.S. chips, particularly Nvidia’s AI processors. They noted that customs teams have been deployed at major ports to conduct stringent inspections of chip shipments.

Initially focused on halting Chinese firms from purchasing China-specific H20 and RTX Pro 6000D chips, the crackdown expanded in recent weeks to include all advanced AI chips.

Just a day earlier, China also tightened export controls on rare earths. Beijing has already slowed shipments to the West since last year through new restrictions requiring proof that the materials won’t be used for military purposes.

In markets, the Hang Seng Index leads global equities with a 38% year-to-date gain, while the S&P 500 is up 15.9%. On average, global stocks are up around 21.8% this year.

All these developments (read market wrap via Newsquawk) come just weeks ahead of a potential meeting between President Trump and his Chinese counterpart, Xi Jinping, expected to take place on the sidelines of the Asia-Pacific Economic Cooperation forum in Gyeongju, South Korea. The game for both Trump and Xi is to have leverage and cards to play while negotiating a trade deal.