In a 5-4 vote, The US Supreme Court refused to bolster President Donald Trump’s foreign-aid freeze, reinstating a lower court order that requires the quick disbursement of as much as $2 billion owed to contractors for already completed work.

Over four dissents, the justices rejected Trump’s request to toss out the trial court order, which affects money owed by the US Agency for International Development and State Department. 

The dissent by Justices Alito, Thomas, Gorsuch, and Kavanaugh was extremely strongly worded:

Does a single district-court judge who likely lacks jurisdiction have the unchecked power to compel the Government of the United States to pay out (and probably lose forever) 2 billion taxpayer dollars?

The answer to that question should be an emphatic “No,” but a majority of this Court apparently thinks otherwise.

I am stunned.

…

Today, the Court makes a most unfortunate misstep that rewards an act of judicial hubris and imposes a $2 billion penalty on American taxpayers. 

The District Court has made plain its frustration with the Government, and respondents raise serious concerns about nonpayment for completed work. But the relief ordered is, quite simply, too extreme a response. 

A federal court has many tools to address a party’s supposed nonfeasance. 

Self-aggrandizement of its jurisdiction is not one of them. 

I would chart a different path than the Court does today, so I must respectfully dissent.

Chief Justice John Roberts and Justice Barrett sided with the liberal members of the court.  

The majority told the trial judge to reset the deadlines for paying the money since his original deadline has now passed.

This decision only affects completed work, not future freezes.

The ruling compels the Government to release funds for work that had already been completed before February 13, 2025. However, it does not block the administration from continuing to pause or cut future foreign assistance. Trump’s broader agenda of cutting USAID funding may continue for projects that were not yet underway.

Key Takeaways

• The ruling forces immediate payment of $2 billion for completed work but does not prevent broader USAID cuts.

• Future freezes and funding pauses are still possible but may face legal challenges under the APA.

• The ruling does not permanently restore funding, but it creates a legal pathway for future lawsuits if the Government halts disbursements unlawfully.

• Trump’s broader foreign aid policy remains largely intact, though judicial pushback may limit some of its implementation.

We cannot wait to see how Musk and Trump respond to this fucking farcical outcome…

A spokesperson for far-left DC Mayor Muriel Bowser confirmed to the local media outlet News4 that the “BLACK LIVES MATTER” mural—painted across two blocks of 16th Street near the White House during the 2020 color revolution riots—will be replaced with a new mural designed by area schoolchildren. 

On Monday, Republican Rep. Andrew Clyde of Georgia introduced legislation that, if passed, would force Mayor Bowser to rename the BLM Plaza, which cost taxpayers around $5 million to paint several years ago.

The bill would withhold “certain apportionment funds” if the BLM mural down 16th Street is not renamed to Liberty Plaza, as well as removing all propaganda of BLM on the street. 

The area was designated as BLM Plaza after the questionable death of George Floyd in Minneapolis in 2020, which ignited nationwide BLM riots…

BLM is not ‘America First’ – in fact, this far-left group wants to destroy the country. 

DC Mayor Muriel Bowser visits Black Lives Matter mural in Washington, D.C. pic.twitter.com/pa8zBAGg6Y

— The Hill (@thehill) June 5, 2020

Black Lives Matter Global Network Foundation once trumpeted its Marxist desire to dismantle America and war on the nuclear family by saying on its website: “We disrupt the Western-prescribed nuclear family structure requirement by supporting each other as extended families and ‘villages’ that collectively care for one another.”

Bowser released a statement on X:

Mayor Bowser released the following statement on the evolution of Black Lives Matter Plaza: pic.twitter.com/6dk8Jbc5ir

— Mayor Muriel Bowser (@MayorBowser) March 4, 2025

President Trump has made it very clear that he will continue eliminating woke ideology from the federal government, military, and corporate America. He reiterated this at last night’s speech to a joint session of Congress. 

President Trump: “Our country will be woke no longer!” pic.twitter.com/vJiVr8wwWc

— Fox News (@FoxNews) March 5, 2025

It’s clear that Mayor Bowser prioritized virtue signaling and wasting taxpayer funds on painting BLM on the street instead of focusing on common-sense law and order, even as the nation’s capital descended into crisis with record spikes in homicides, carjackings, and other violent crimes

According to the latest data from ADP, hiring slowed to the smallest level of gains since July, with trade and transportation, health care and education, and information showing job losses. Small business employment also fell.

That was the biggest miss for ADP headline data since March 2023…

According to Nela Richardson, Chief Economist at ADP, “policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month. Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”

Oddly, as we noted above, job losses were concentrated in Small Businesses… (we say oddly because we have seen Small Business Optimism explode higher since Trump was elected…)?

Perhaps more odd still is the fact that goods-producing firms saw a huge jump in job additions (Trump driving confidence in manufacturing with the biggest addition since Oct 2022) while Services was job additions tumble…

On the potentially positive side of the ledger – wage growth slowed for job-changers (and was flat for job-stayers)…

But given the levels of wage inflation (and labor weakness), it still has the stench of stagflation.

So, to sum things up:

Small biz optimism is thru the roof… but small biz see the most layoffs.

…and policy uncertainty is cited as the reason for weakness BUT manufacturers (which is where all the uncertainty is) added the most jobs since Oct 2022…

Is someone trying to force a confidence collapse narrative?

US equity futures are higher following comments from Commerce Secretary Howard Lutnick who seemed to suggest that a compromise on Canadia/Mexican tariffs could be announced today; and while Trump’s speech last night doubled-down on tariffs he but did not refute Lutnick’s comments; at the same time the US/Ukraine mineral deal also appears to be moving forward providing further de-escalatory relief for markets. As such, as of 8:00am, S&P 500 futures are up 0.3% while Nasdaq 100 contracts add 0.6% (both well off session highs) with all 7 of the Mag 7 higher and Semis are bid into MRVL earnings. Chinese stocks led a rally in Asia after Beijing set an ambitious economic growth target that boosted expectations of further stimulus.Finally, European stocks are surging (Dax +3%) after Germany unveiled plans to unlock hundreds of billions of euros for defense and infrastructure investments in a dramatic policy shift which has sent German bonds plunging by a near record 22bps. US Treasury yields are flat around 4.24% while the USD is weaker and commodities are mixed. Energy is lower, Ags higher, and precious over base. Today’s macro data focus is on ISM-Srvcs, Factory Orders, Mortgage Applications (up 20.4%), and ADP.

In premarket trading, Goldman and Citigroup rose more than 1%, while Tesla was poised to recover from a four-month low,  and led gains among the Magnificent Seven stocks, putting the electric-vehicle maker’s stock on track to rebound after two sessions of losses (TSLA 1.6%, NVDA +1.5%, AMZN +0.8%, META +0.5%, GOOGL +0.6%, AAPL +0.3% and MSFT +0.3%). AeroVironment (AVAV US) shares are down 20% in premarket trading after the small unmanned aircraft maker slashed its FY forecasts. It also reported third-quarter results that missed expectations. Here are some other notable movers:

• AppLovin Corp. (APP US) is downgraded to sell from neutral at Arete, which cites concerns over the firm’s e-commerce business
• Carrier Global (CARR US)shares rise as much as 2.9% in US premarket trading after JPMorgan upgrades the heating and air conditioning equipment maker to overweight from neutral, seeing the stock as cheap enough
• Moderna (MRNA US) shares rally 8.6% in premarket trading after Chief Executive Officer Stephane Bancel and Board Director Paul Sagan said they bought $6 million of stock, according to SEC filings
• Palantir Technologies Inc. (PLTR US) shares are up 2.6% in premarket trading, after William Blair upgraded the AI software company to market perform from underperform
• Shares of automakers, banks and chip firms jumped in premarket trading on Wednesday after Lutnick said the Trump administration may announce a pathway for tariff relief on goods from Canada and Mexico covered by a North American free trade agreement

US stocks capped their worst two-day slump since December on Tuesday, before the comments from Lutnick, who told Fox Business that Trump may offer a path to alleviate some tariff pressure. Traders will be watching data due later today for a snapshot of the state of the economy.

“The market doesn’t like uncertainty and tariffs will most likely continue to be an overhang risk,” Nataliia Lipikhina, EMEA equity strategy head at JPMorgan Private Bank, said on Bloomberg TV. “But if we are looking at earnings growth in the US, we actually see double-digit growth in 2025 and 2026. We are buyers of the dip at this point.”

In an address to Congress, Trump acknowledged that there may be an “adjustment period” to tariffs as he defended his policies to remake the US economy. Ten-year Treasury yields traded steady at 4.24%, while the dollar sank 0.4%.

On the corporate front, Blackrock Inc., the world’s biggest asset manager, led a consortium that will buy a controlling stake in Panama ports and a larger unit that has operations across 23 countries. It’s one of the biggest acquisitions of the year that marks a win for Trump, who had raised concerns over control of key ports near the Panama Canal.

European stocks are sharply higher on German military spending/debt brake removal, unlocking hundreds of billion of euros in defense and infrastructure spending. Shares in the region have also received a boost on hopes that the Trump administration may walk back some tariff measures and also on the increasing probability of a US/Ukraine mineral deal which is boosting the odds of a ceasefire. Construction and industrial sectors are leading the gains. Stoxx 600 rises 1.7% to 560.62 with 473 members up, 121 down and 6 unchanged. The DAX is up over 3% and set for its best day in over two years, the euro rises 0.6% and now trades above $1.07 for the first time since November. Here are some of the biggest European movers on Wednesday:

• Germany’s defense, industrial and domestic stocks rise after chancellor-in-waiting Friedrich Merz said the country would unlock hundreds of billions of euros for defense and infrastructure investments.
• European mining stocks and steelmakers are outperforming on Wednesday after commodity-hungry China set a bullish economic growth goal for 2025 and said it will cut output of steel in an attempt to ease a massive glut and restore profitability at mills.
• Bayer shares gain as much as 6.5% after the German company reported sales and earnings for the fourth quarter that were ahead of expectations.
• Campari shares rise as much as 6.3% as analysts point to the Italian spirits maker’s fourth-quarter sales beat and strength in its EMEA business and aperitifs.
• Breedon Group shares jump as much as 15% after the building materials company delivered results just ahead of expectations.
• Evonik shares jump as much as 11% after the specialty chemicals company said it expects earnings to grow in the current quarter.
• Sandoz shares gain as much as 7% as biosimilars sales of the Swiss generic drugs maker came in slightly higher than anticipated and the company reaffirmed its mid-term outlook.
• Games Workshop shares rise as much as 8.5% to hit a new record high after the Warhammer figurine maker said trading was better than expected in the first two months of 2025, which is set to see annual profit come in ahead of expectations.
• Richter shares gain as much as 3.6% after the Hungarian pharmaceutical company said it plans to pay out 30%-50% of its adjusted net income in 2025-2030, providing “significant upside” to the dividend, as it focuses strategy on managing the patent cliff for its blockbuster Cariprazine drug.
• Flutter shares rise as much as 3.4% in London after the FanDuel owner reported final results for 2024 in line with consensus and confident 2025 outlook.
• Adidas shares fall as much as 3.9% after the sportswear company forecast FY25 operating profit that missed analyst estimates.
• Lindt & Spruengli shares drop as much as 5.4% after Vontobel cut its recommendation on the chocolatier to hold from buy, citing a volatile market amid low US consumer confidence data and the strong run in the stock before results released this week.

Earlier in the session, Asian stocks rallied as China’s ambitious growth target raised prospects of more stimulus and the Trump administration indicated it may roll back some tariffs on its allies. The MSCI Asia Pacific Index rose as much as 1.1%, the most in three weeks, with Chinese technology stocks like Tencent and Meituan among the biggest boosts. Chinese stocks in Hong Kong rallied more than 3% after the National People’s Congress in Beijing set an economic growth target of about 5% for 2025, the third straight year it has maintained that goal. Stock benchmarks also rallied in Japan, Korea and Taiwan. Donald Trump’s administration showed willingness to walk back on the 25% tariff imposed on Canada and Mexico, two of its biggest trading partners. Hong Kong and China’s “major indexes do not look expensive, trading around historical means,” Citi strategists including Pierre Lau wrote in a note. “Valuations of China’s alternatives to the US’s magnificent-seven stocks look inexpensive, in our view,” he said. Elsewhere, India’s NSE Nifty 50 Index climbed, snapping a record-setting 10-day losing streak, while stocks fell in Australia.

While German and European stocks are surging, German bunds lead a near-record plunge in European government bonds after Germany unveiled plans to unlock hundreds of billions of euros for defense and infrastructure investments in a dramatic policy shift. German 10-year yields soar more than 22 bps to 2.72%, the biggest one day move since the failed bund auction in Nov 2011.

“Huge quantities of debt in the coming years is going to be quite disruptive for European bond markets, particularly the long end of the curve,” said Peter Kinsella, global head of FX strategy at Union Bancaire Privee Ubp SA in London. “We’ve not seen this type of issuance pretty much since the early 1990s when Germany was paying for reunification.

In the US, treasuries are steady as US trading gets under way with the curve steeper, as front-end yields are more than 3bps richer on the day with long end little changed. Treasury yield shift leaves 2s10s, 5s30s spreads steeper by 3bp-4bp; US 10-year yield around 4.23% is ~2bp lower on the day while Germany’s is higher by 22bp, after German policy shift to a massive debt-financed defense spending plan. US session includes February ADP employment and ISM services gauge, and possibility of Mars Inc. corporate bond sale exceeding $25 billion.

In FX, the Bloomberg Dollar Spot Index fell 0.6%, hitting its lowest since Dec. 9, led by falls versus the euro; EUR/USD jumped 0.9% to 1.0722, a level last seen on Nov. 11 after Germany pledged to unlock hundreds of billions of euros for defense and infrastructure spending; the Swedish krona takes top spot among G-10 FX, rising 1% against the greenback.

“The US economy could slow down further and force the Fed to resume its easing cycle in the second half of the year,” said Valentin Marinov, head of global FX strategy at Credit Agricole CIB. “The Fed may also have to put an end to its quantitative tightening programme to accommodate US President Donald Trump’s fiscal spending plans. This could erode the USD exceptionalism.”

In commodities, WTI falls 1.5% to $67.20 a barrel. Bitcoin rises 3% and above $90,000.

The US economic data calendar includes mortgage applications which soared by 20.4%, after dropping 6.4% last week; February ADP employment change (8:15am), S&P Global US services PMI (9:45am), January factory orders and February ISM services index (10am). Fed releases Beige book at 2pm. Fed speaker slate empty for the session

Market Snapshot

• S&P 500 futures up 0.8% to 5,838.00
• MXAP up 1.1% to 186.59
• MXAPJ up 1.9% to 586.12
• Nikkei up 0.2% to 37,418.24
• Topix up 0.3% to 2,718.21
• Hang Seng Index up 2.8% to 23,594.21
• Shanghai Composite up 0.5% to 3,341.97
• Sensex up 1.0% to 73,718.18
• Australia S&P/ASX 200 down 0.7% to 8,141.11
• Kospi up 1.2% to 2,558.13
• STOXX Europe 600 up 1.5% to 559.12
• German 10Y yield little changed at 2.68%
• Euro up 0.9% to $1.0718
• Brent Futures down 0.6% to $70.63/bbl
• Gold spot down 0.1% to $2,915.13
• US Dollar Index down 0.82% to 104.88

Top Overnight News

• US President Trump said in his Address to the Joint Session of Congress that America is back and they have taken swift and relentless action and are just getting started. Trump announced he will create a new office of shipbuilding in the White House and will offer new tax incentives for shipbuilding, while he is fighting every day to make America affordable again and reiterated his call to drill for more oil. Furthermore, Trump said they will eliminate inflation by reducing all fraud, waste and theft of public money and stated that reciprocal tariffs will kick in on April 2nd.
• President Donald Trump’s administration is considering granting relief from his 25% tariffs on Canadian and Mexican imports to products that comply with the trade pact he negotiated with the two U.S. neighbors during his first term, Commerce Secretary Howard Lutnick said on Tuesday. RTRS
• Trump called for ending the bipartisan $52 billion chip subsidy program, saying it’s a “horrible, horrible thing.” An end to subsidies will end up benefiting the Chinese AI and semiconductor sector. BBG
• Border crossings along the US-Mexico border plummeted to the lowest level in decades during Feb, giving Trump a major victory. Axios
• German borrowing costs surged by the most in 17 years as investors bet on a big boost to the country’s ailing economy from a historic deal to fund investment in the military and infrastructure. The yield on the 10-year Bund surged 21 bps to 2.69%, its biggest one day move since 2008. FT
• Google is urging DOJ officials to back away from a push to break up the company, citing national security concerns, people familiar said. The Biden administration called for changes including the sale of its Chrome web browser, with hearings scheduled for next month. BBG
• China’s NPC numbers are largely consistent w/recent media reports, including a GDP growth objective of around 5%, inflation around 2%, and a fiscal deficit target of 4%, while officials pledged to boost domestic consumption. WSJ
• China’s Caixin services PMI comes in ahead of expectations for Feb at 51.4 (up from 51 in Jan and above the Street’s 50.7 forecast). BBG
• BOJs Uchida said the BOJ can raise interest rates at a pace in line with dominant views among financial markets and economists, keeping alive expectations that there is a chance of a near term increase in borrowing costs despite Trump tariff risks. RTRS

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the whipsawing stateside on Trump’s tariffs, subsequent retaliation and Commerce Secretary Lutnick’s suggestion of a potential rollback, while the region also digested a slew of commentary from China’s Official Work Report and President Trump’s Address to the Joint Session of Congress. ASX 200 was dragged lower by underperformance in the consumer and energy sectors, while better-than-expected Australian GDP data failed to inspire a recovery. Nikkei 225 price action was initially choppy but gradually edged higher amid a weaker currency. Hang Seng and Shanghai Comp were positive after better-than-expected Chinese Caixin Services PMI data and with the attention on the NPC and the Official Work Report in which China maintained its annual growth target of around 5% and pledged measures including a boost in spending, while there was notable outperformance in Hong Kong where CK Hutchison surged by more than 20% after agreeing to sell its Panama Canal Ports stake to BlackRock.

Top Asian News

• Foxconn (2317 TT) February revenue rose at a rate of +56.43% Y/Y (vs +3.2% Y/Y in January).
• China targets 2025 GDP growth of around 5% and CPI at around 2%, while it sees the 2025 budget deficit at 4% of GDP and said it will adopt more proactive fiscal policy. China will re-capitalise major state banks with CNY 500bln from special treasury bonds and will issue CNY 1.3tln in ultra-long-term special treasury bonds in 2025 vs CNY 1tln in 2024, while it set the 2025 quota on local government special bonds at CNY 4.4tln vs. CNY 3.9tln in 2024, according to the Official Work Report.
• China’s NDRC said it will boost domestic demand and will promote integrated advancements in technological and industrial innovation and will use monetary policy instruments to adjust both the monetary aggregate and structure, while it added that China will lower banks’ reserve requirement ratios and interest rates at the right timing. NDRC said China will support the fundraising of micro and small businesses, well accelerate efforts to foster a complete system of domestic demand and make domestic demand the main engine and anchor of economic growth.
• China’s financial regulator head said will support the property market, lengthen the white list, and ensure delivery of housing, while China will increase the supply of credit to more private enterprises and will reduce comprehensive financing costs of private enterprises. Furthermore, China approved an additional CNY 60bln of insurance funds for long-term investment in capital markets.
• China Cabinet Research Office head said fully confident in achieving the 2025 economic growth target and that China’s economy has shown steady improvement over 2025 so far, while the official added that macro policy measures will provide strong support to the economy.
• RBNZ Governor Orr resigned and Deputy Governor Hawkesby will be Acting Governor until March 31st, while RBNZ Chair Quigley said Governor Orr resigned for personal reasons and feels like ‘he’s done the job’.

European bourses (STOXX 600 +1.5%) are entirely in the green, with sentiment boosted by several factors, which include; a) Lutnick suggesting Trump will scale back Canada/Mexico tariffs, b) Germany agreeing to debt brake reform, c) China’s Official Work Report which maintained its annual growth target and pledged measures including a boost in spending. Price action today has really only been one way, and that’s upward; as it stands, indices generally reside at session highs. European sectors hold a positive bias, with the key movers today attributed to the aforementioned German debt brake reform agreement. Construction & Materials tops the pile, joined closely by Industrial Goods and Services, Autos and then Tech; the latter two, buoyed by the risk-tone given the optimism surrounding a rolling back of US tariffs on Canada/Mexico.

Top European News

• UK Treasury has earmarked several billion pounds of draft spending cuts to welfare and other departments, via BBC citing sources; Treasury will inform the OBR of its “major measures” on Wednesday.
• UK Chancellor Reeves is set to submit plans this week to the OBR detailing billions of GBP of spending reductions, according to the FT.
• German new passenger car registrations (Feb) -6.4% to 203,434, according to KBA

FX

• DXY is extending its downside for a third consecutive session as gains in the EUR act as a drag on the index. DXY has fallen from the 107.56 level seen at the start of the week to a current session trough at 104.85, taking out its 200DMA at 105.00 in the process. Headwinds for the DXY aren’t just a case of EUR strength, it is also in the context of domestic weakness following a recent run of soft data prints. And on the trade front, US Commerce Secretary Lutnick suggested Trump could potentially reduce tariffs on Canada and Mexico, perhaps as soon as Wednesday. Today’s data slate sees US ADP and ISM services PMI with the former taking place in the context of Friday’s NFP print.
• EUR is the clear outperformer across the majors with the obvious catalyst for recent price action being the latest updates out of Germany. To recap, the measures announced by Merz and others include a special EUR 500bln 10yr fund for infrastructure investments, changes to the debt brake to exempt defence spending of more than 1% of GDP, a loosening of the regional balanced budget requirement and a new instrument to provide EUR 150bln of loans. Subsequently, EUR/USD has surged from the circa 1.0388 level seen at the start of the week to a multi-month peak at 1.0722, brining it in touching distance of its 200DMA at 1.0725.
• JPY is firmer vs. the broadly weaker USD. On the domestic front, BoJ Governor Ueda noted that diverging monetary policy stance among countries could potentially increase volatility, have destabilising effects on exchange-rate dynamics. Elsewhere, BoJ Deputy Governor Uchida said he does not have a preset idea in mind on the pace of future rate hikes and does not think it is good communication for the BoJ to judge whether market pricing of future moves are appropriate or not. USD/JPY has delved as low as 149.11 but stayed clear of yesterday’s 148.08 YTD trough.
• Cable is up for a third session in a row, clearing the 1.28 mark and its 200DMA at 1.2803, printing a fresh YTD peak at 1.2854. Newsflow for the UK remains on the light side asides from reporting via the BBC that the Treasury will inform the OBR of its “major measures” on Wednesday aimed at reducing spending by billions pounds.
• Antipodeans both faded some of their recent gains as the greenback recouped lost ground and amid the mixed risk sentiment in Asia, while there was little reaction seen following better-than-expected Australian GDP data or from the announcement that RBNZ Governor Orr resigned.
• Hotter-than-expected Swiss inflation metrics from Switzerland triggered a knee-jerk lower in EUR/CHF from 0.9470 to 0.9453 before paring almost all of the move. The release exceeded expectations but fell in-line with the SNB’s Q1 projection of 0.3%.
• PBoC set USD/CNY mid-point at 7.1714 vs exp. 7.2575 (prev. 7.1739).

Fixed Income

• Bunds are under marked pressure following the CDU, CSU and SPD leaders announcing an agreement on the first phase of debt break reform which they hope to pass in the next week as such get through under the current Bundestag configuration where a two-thirds majority for constitutional reform can be attained. At most, the planned reform has weighed on Bunds by over 250 ticks to a 129.66 trough vs Tuesday’s 132.24 close. Since, Bunds have made their way off the 129.66 base and are back above 130.00 with support coming via downward revisions to some Final PMIs this morning, as the equity rally took a slight breather and on profit taking from the marked bearish action.
• USTs are under modest pressure, following the lead from Bunds, but to a much lesser degree. Due to the German measures not having any direct fiscal implications for the US and as the region remains more focused on growth concerns; ISM Services & Factory Orders are the next points to watch on this alongside ADP ahead of Friday’s Payrolls. USTs have been down to a 110-27 base but have spent much of the European morning and APAC session holding at the 111-00 mark.
• US yields are bid across the curve with the belly leading, as has been the case in recent sessions. On the trade front, US Commerce Secretary Lutnick suggested Trump could scale back the Mexican/Canada tariffs, and could be announced on Wednesday.
• Gilts are softer following the lead from Bunds. Trading much closer to Bunds than USTs in terms of magnitudes with Gilts down to a 92.11 low at worst vs the 93.50 close on Tuesday. Pressure which comes as Gilts play catchup to the Merz announcement, with USTs having already reacted in Tuesday’s session, and as the focus returns to the UK’s own fiscal fortunes. On this, multiple outlets have reported that Chancellor Reeves is to present the OBR with her latest potential fiscal adjustments which the BBC, citing sources, reports include several billion pounds of draft spending cuts to welfare & other departments. Most recently, no move to a strong UK auction which saw a b/c in excess of 3x.
• UK sells GBP 4.25bln 4.375% 2030 Gilt: b/c 3.39x (prev. 3.05x), average yield 4.311% (prev. 4.276%) & tail 0.3bps (prev. 0.5bps)

Commodities

• Crude is on the backfoot, continuing the pressure seen in overnight trade which failed to materially benefit from the latest private sector inventory data which showed a surprise draw in headline crude. A softer Dollar, positive risk tone and China pledging to boost spending has failed to lift sentiment in the complex; focus may be on Ukrainian President Zelensky who said that Ukraine is ready to come back to the table to sign a minerals deal – tariff uncertainty and recent OPEC+ action also factor. Brent and WTI trading at USD 67.47/bbl and USD 70.55/bbl respectively.
• Precious metals are mixed, with gold flat whilst Silver gains; the softer Dollar and China’s Official Growth Report manages to keep the yellow-metal afloat, despite the risk-on mood. Gold trades indecisively but towards its USD 2,922/oz high, after remaining above the USD 2,900/oz mark for most of Monday’s session.
• Base metals are entirely in the green, with the complex boosted after China’s Official Growth Report which maintained a growth target of around 5% and pledged measures to boost spending. 3M LME Copper above the USD 9.5k mark compared to Tuesday’s USD 9.34k close.
• Private inventory data (bbls): Crude -1.5mln (exp. +0.3mln), Distillate +1.1mln (exp. +0.2mln), Gasoline -1.2mln (exp. -0.4mln), Cushing +1.6mln.
• 5.6 magnitude earthquake in Oaxaca, Mexico, via GFZ.

Geopolitics: Middle East

• White House said the Gaza reconstruction plan adopted by Arab states does not address the reality that Gaza is ‘currently uninhabitable’ and that President Trump stands by his proposal to rebuild Gaza ‘free from Hamas’.
• Russian President Putin agreed to act as a mediator between Iran and the US, according to Zvezda citing the Kremlin. It was also reported that a Kremlin aide said Iran was discussed at Russia-US talks in Riyadh and that Russia and the US agreed to hold separate talks on Iran, according to Interfax.

Geopolitics: Ukraine

• US President Trump said in his Congress address that he received an important letter from Ukrainian President Zelensky who said he is ready to come back to the table and Ukraine is ready to sign a minerals deal.
• US and Ukraine plan to sign minerals deal and President Trump has told advisers he wanted to announce the Ukraine minerals deal during Tuesday’s speech to Congress, according to sources cited by Reuters although they cautioned that the deal had yet to be signed and the situation could change.

Geopolitics: Other

• China’s Coast Guard said the Philippines sent a civilian boat to deliver supplies to its ‘illegally grounded’ warship at Second Thomas Shoal, while China urged the Philippines to honour its commitments and work with China to manage the maritime situation.

US Event Calendar

• 07:00: Feb. MBA Mortgage Applications, prior -1.2%
• 08:15: Feb. ADP Employment Change 77,000, est. 140,000, prior 183,000
• 09:45: Feb. S&P Global US Composite PMI, est. 50.4, prior 50.4
  • Feb. S&P Global US Services PMI, est. 49.7, prior 49.7
• 10:00: Jan. Factory Orders, est. 1.7%, prior -0.9%
  • Jan. Factory Orders Ex Trans, est. 0.2%, prior 0.3%
• 10:00: Jan. Durable Goods Orders, est. 3.1%, prior 3.1%
  • 10:00: Jan. Durables-Less Transportation, est. 0%, prior 0%
• 10:00: Jan. Cap Goods Ship Nondef Ex Air, est. -0.3%, prior -0.3%
  • Jan. Cap Goods Orders Nondef Ex Air, est. 0.8%, prior 0.8%
• 10:00: Feb. ISM Services Index, est. 52.5, prior 52.8
• 14:00: Federal Reserve Releases Beige Book

DB’s Jim Reid concludes the overnight wrap

We’ve used the tagline that these are “days where decades are happening” in recent weeks and although that perhaps seems like an exaggeration, yesterday I truly believe it wasn’t as last night Germany announced plans for one of the largest fiscal regime shifts in post-war history, perhaps with reunification 35 years ago being the only rival. Everything you thought you knew about Germany’s economic prospects 3 months ago, or even 3 weeks ago, should be ripped up and you should start your analysis from fresh. This is game changing if it goes through.

As Merz himself said last night, “whatever it takes”. More on this later but even before this it was a crazy day of volatility after the 25% Mexican and Canadian tariffs went through. The S&P 500 traded as low as -2.00% early in the session but was then +0.26% higher with 35 minutes of trading left before slumping again and closing -1.22% lower, wiping out its post election gains. Meanwhile the DAX (-3.54%) posted its worst day since 2022, having just experienced its strongest session since late-2022 (+2.64%) the previous day. DAX futures are back up +2.04% as I type this morning.

Meanwhile S&P 500 futures are trading +0.67% as I type, on the back Commerce Secretary Lutnick’s comments shortly after the US close yesterday that Trump might announce a pathway for some tariff relief on Mexico and Canada as soon as today. Lutnick said that with both Mexico and Canada “trying to show that they’ll do better”, Trump could decide to “meet in the middle some way and we’re going to probably announce that tomorrow “. That said, he appeared to rule out a full rollback or pause to the tariffs.

There was little softening in the tone on tariffs in Trump’s eagerly anticipated speech to Congress overnight. Trump said that “we need Mexico and Canada to do much more than they have done” on fentanyl, while also focusing on the April 2 date for reciprocal tariffs. When it comes to potential disruptions, Trump said “There’ll be a little disturbance, but we’re okay with that”. In other economic matters, Trump called for end to subsidies under the CHIPS Act, touted new energy and minerals projects and mentioned the goal of a balanced budget. But overall there were few striking announcements with Trump’s comments ranging from immigration to a new missile defence shield to suggesting that the US will get Greenland “one way or another”. On Ukraine, Trump acknowledged Zelenskiy’s comments earlier on Tuesday that Ukraine was ready to come to the negotiating table. However, Trump did not confirm if the minerals resource agreement would be revived, which reporting earlier in the day suggested he might do.

Turning back to the seismic fiscal news out of Germany last night. The leaders of the CSU/CSU and SPD announced an agreement to approve three material changes to the debt brake before the end of the outgoing parliament in which the centrist parties still hold a constitutional majority. Specifically , this includes a EUR 500bn SPV for infrastructure investment, an exemption from the debt brake for defense spending above 1% of GDP and a rise in the net borrowing cap for federal states from 0% to 0.35% of GDP. While recent reporting pointed to increased prospects of a change, the magnitude of the proposal, including the open-ended borrowing room for defence, is well beyond expectations. With party leaders explicitly referring to a “whatever it takes” moment and a determination to “rearm completely”, our Germany economists think German defence spending could rise to at least 3% of GDP perhaps as early as next year. See their reaction here for more. One potential catch is that the Greens, whose support is needed for the constitutional majority, have not yet confirmed if they will support these changes. But our team strongly assumes that this will be the case, not least given the large infrastructure fund proposal.

Earlier in the day we also had an EU announcement on a new defence package ahead of the EU leaders summit tomorrow. The proposals would allow member states to significantly increase defence spending without triggering the EU’s deficit rules, and they also proposed a new instrument that would provide €150bn of loans for defence investment. While much less dramatic than the German news later in the day, this added to the sense of a developing paradigm shift in European defence. You can see our European economists’ take on the announcement here.

In terms of market implications, the German fiscal announcement has led our FX strategists to take an outright bullish view on the euro, targeting a 1.10 level against the dollar (link here), while our rates strategists see the much looser fiscal policy as favouring a short Bund view (link here) with a 10yr target of 3.0%. Meanwhile, our equity strategists (link here) see the events as confirming their case for an ongoing overweight of European equities, despite these having already posted the strongest outperformance versus the US at the start of a year since 2000. These moves have began to emerge in markets, with the euro ending yesterday’s session above 1.06 against the dollar for the first time since November, STOXX 50 futures trading +1.76% higher overnight and yields on bund futures around +10bps higher.

Moving on to review the different market moves yesterday that are now slightly out of date. Equities took a big hit as markets started to price in more aggressive tariff policies around the world. That included another slump for the S&P 500 (-1.22%), building on its -1.76% move the previous day. And in turn, the VIX index of volatility rose another +0.73pts to 23.51pts, its highest level of 2025 so far. The selloff was broad-based with the equal weighted S&P 500 (-1.63%) seeing its worst day of 2025 so far. Cyclical sectors underperformed, and banks took a particularly large hit, with the KBW Bank Index (-4.56%) posting its biggest daily decline since the regional bank turmoil of March 2023. The Magnificent-7 (-0.64%) and the small-cap Russell 2000 (-1.08%) saw more modest declines, though this still leaves the Mag-7 a full -15% beneath its post-election high.

Volatility was also visible in rate markets. A strong initial rally on the back of tariff news reversed over the course of the day, helped along by the German fiscal news and Lutnick’s comments. The amount of Fed rate cuts priced by year-end had spiked by more than 13bps to 85bps intra-day but reversed later on, with pricing down to 74bps as I type. Treasury yields saw a similar roundtrip , with 2yr yields down -11bps intra-day early in the US session but +4.1bps to 3.99% by the close, while 10yr yields closed +8.9bps higher at 4.245%. Earlier on in Europe, yields had been more steady, with those on 10yr bunds (+0.4bps) broadly flat, whilst those on 10yr OATs (+1.4bps) and BTPs (+2.4bps) moved higher.

European equities had seen a major slump yesterday, which saw the STOXX 600 (-2.14%) post its worst daily performance since early August. Most tariff-sensitive sectors saw a huge slump, with the STOXX Automobiles and Parts Index (-5.39%) suffering its worst daily performance since March 2022, just after Russia had launched their full-scale invasion of Ukraine. Obviously there are lots of moving part but German assets are likely to rebound strongly today.

Much of Asia is also bouncing with the Hang Seng (+1.72%) leading gains, rebounding strongly from the previous session losses after the National People’s Congress in Beijing set a 5% economic growth target for 2025, maintaining the target for a third consecutive year while laying out stimulus measures to boost its economy amid escalating trade tensions with the US (more below). Meanwhile, the KOSPI (+1.20%) is also strong but the Nikkei (+0.10%) and the Shanghai Composite (+0.10%) are only just higher. The S&P/ASX 200 (-0.69%) is bucking the regional positive trend despite economy picking up pace in the final three months of the year.

Coming back to China, Premier Li Qiang in a speech at the at the opening session of the National People’s Congress (NPC), acknowledged challenges posed by trade tensions as well as problems facing the Chinese economy. Meanwhile, the government report outlined plans to issue 1.3 trillion yuan ($179 billion) in ultra-long-term special treasury bonds in 2025 and another 500 billion yuan worth of special treasury bonds will be issued this year to support large state-owned commercial banks in replenishing capital. At the same time, Beijing raised its budget deficit target to 4% of GDP, from 3% last year, in line with our expectations. Additionally, Beijing revised down its annual consumer price inflation target to “around 2%” this year — the lowest in more than two decades — from 3% or higher in prior years.

Elsewhere, Australia’s GDP rose +0.6% q/q in the fourth quarter, in-line with market expectations while picking up from the +0.3% growth seen in the prior quarter, aided by robust public and private spending, along with a rebound in export demand. This strength in the Australian economy gives the RBA more headroom to keep rates high, given that inflation still remained sticky in the fourth quarter.

To the day ahead now, and data releases from the US include the ISM services index for February, the ADP’s report of private payrolls for February, and factory orders for January. Otherwise, we’ll get the final services and composite PMIs for February from around the world. From central banks, we’ll hear from BoE Governor Bailey, along with the BoE’s Pill, Greene and Taylor. And we’ll also get the latest Beige Book from the Federal Reserve.

Authored by Kit Knightly via Off-Guardian.org,

There was a fight in the Oval Office!

Former actor and comedian President Zelensky and former reality television presenter Donald Trump went at it.

Trump made fun of his clothes, Zelensky warned that war would come to the US if Ukraine fell and called Vice-President JD Vance “bitch”.

Zelensky disrespected the office of the President or was bullied by big meanies depending on which color you voted for.

It’s all very serious, real stuff.

As serious and real as the traumatised faces Zelenksy and his First Lady were making during their Vogue photoshoot in 2022.

The track-suited former “peace candidate” then either left the White House voluntarily or was told to leave, again depending who you voted for.

He then immediately flew to England for an “emergency last minute” meeting with Prime Minister Sir Keir Starmer and a totally off-the-cuff audience with His Majesty.

Then all the leaders of Western Europe – plus Justin Trudeau, who is still in office despite resigning weeks ago – had a big old struggle session with the new “leader of the free world”, and decided they don’t want to be friends with America anymore!

All this was impromptu and extempore.

Like the perfectly identical messages posted to the official Twitter accounts of multiple European political leaders later that day at almost the exact same time.

The leaders of Europe are shocked – shocked! – that Trump would treat a “hero” like Zelensky so shabbily and will gladly pay to guarantee Ukraine’s security.

Starmer has even offered to put British boots on the ground and planes in the air to secure a ceasefire:

The jingoism is at a fever pitch, with the usual warmongers and reality-deniers salivating at the idea of young men who don’t know each other shooting each other for no reason.

This is what everybody wants you to think about. 

It has flooded the news and social media world like nothing has since the early days of Covid. 

And, not since those early Covid days, has the truth/coverage ratio been so low.

Even more so than most news, no reality makes it into the discourse, rather there is simply an endless exchanges of one set of myths banging against another. Two teams fighting with invisible swords.

Nobody is even mentioning nuclear war, except in stories about surviving it or rebuilding after it, which is weird.

But what do we think is really going on? Are we really headed to World War III?

Or is this the managed-decline of America is simply taking another step forward while the financial burden of the forever-war necessary to secure a dystopian global state is being shifted to the EU?

Whether that’s the only aim or not, it’s certainly what’s about to happen.

Predictably, all the “anti-billionaire”, “save the planet”, “eat the rich” pretend liberals are cheering it on.

Because they don’t really care about the billionaires who own Boeing or Lockheed Martin raking in their tax revenue, they don’t really care about the impact of war on the environment, and they don’t really care about the corrupt rich making bank on both sides of the supposed “conflict”.

They are just Pavlov’s Pundits, conditioned to disapprove of everything Donald Trump says he wants just because he says he wants it. Even peace.

Which isn’t to say Trump really wants peace. But you know what I mean.

Also, I wouldn’t rule out a “nuclear near miss” or a “limited nuclear engagement” to try and scare people into global cooperation or something. When the media gets this hysterical, everything is on the table.

President Trump may be handed a major geopolitical victory concerning the Panama Canal, as a new report indicates that a BlackRock-led consortium has agreed to purchase key ports near the canal currently operated by Hong Kong-based conglomerate CK Hutchison Holdings Ltd. The report follows Trump’s repeated warnings about China’s growing influence over the strategic waterway and comes one month after US Secretary of State Marco Rubio criticized the Panamanian government for allowing Beijing to expand its influence in the region. 

Bloomberg provided more color on BlackRock’s deal to purchase the critical ports near the canal: 

The agreement was reached alongside a deal in principle for BlackRock and its Global Infrastructure Partners unit, along with Mediterranean Shipping Co.’s ports division, to acquire units that hold 80% of the Hutchison Ports group, which operates 43 ports in 23 countries, the company said Tuesday in a statement.

The consortium will also acquire 90% of Panama Ports Co., which operates the two entryways in Balboa and Cristobal. CK Hutchison said it would receive cash proceeds of about $19 billion from the broader ports deal.

. . .

The deal includes the bulk of CK Hutchison’s ports division, which produced 20% of the conglomerates earnings before interest and tax in the first half of last year and was the company’s third-biggest business.

The port deal represents the largest infrastructure deal in BlackRock’s history after it purchased Global Infrastructure Partners last year, marking a new move for the asset manager in critical infrastructure investing across developed and emerging markets.

Earlier, BlackRock CEO Larry Fink told the RBC Capital Markets conference audience that the port deal was a great opportunity and highlighted the company’s “long relationship” with CK Hutchison. 

Public forensics analysis of CK Hutchison shows several key risk factors, including forced labor concerns and high political exposure to Chinese state-owned enterprises. 

Here’s the upstream ownership profile of CK Hutchison Holdings. Notice some familiar names? Yes, BlackRock, hence Fink’s comment at the RBC conference… 

Here is more color on those direct owners and shareholders of the HK-based holdings company.

Trump’s concerns about Beijing’s encroachment on the canal may soon be diminished after the BlackRock deal (as we’ve previously noted). Trump has complained that China has jeopardized US national security interests in the region. Hutchison’s potential link to the Chinese Communist Party is shown above. 

Latin America Research Professor Evan Ellis with the US Army War College told Bloomberg, “Hutchison could see the writing on the wall, that strategically it was best for them as well for Panama to pursue its interests elsewhere.” 

Risa Grais-Targow, director for Latin America at Eurasia Group, said the BlackRock deal to purchase the HK-owned ports and “diminish Chinese footprint in Panama” is a massive positive. 

BlackRock told Bloomberg that the acquisition of the ports would require government approval. This might not be difficult to secure given the Panamanian government’s urgent need to ease tensions with Trump.

The leaders of CDU/CSU and SPD this evening announced an agreement on an even more significant fiscal expansion than what anyone had expected at the beginning of the week. The plan is to make three material changes to the debt brake in the very near term, convening the outgoing parliament in which the centrist parties still hold a constitutional majority:

• A EUR 500bn (11.6% of GDP in 2024) special purpose off-budget vehicle for infrastructure investment, that is planned to be disbursed over the next 10 years, and which amounts to roughly 1% of GDP in annual infrastructure spending (of which EUR 100bn will be allocated to the federal states).
• A reform of the debt brake to exempt any defense spending in the main budget’s “Einzelplan 14”, the budget of the Ministry of Defence, over and above 1% of GDP, effectively permitting open-ended borrowing for defense. Currently the Einzelplan 14 amounts to EUR 53.25bn (1.25% of nominal GDP in 2024). The current off-budget fund adds another EUR 25bn of defence funding but this would not be relevant for this part of the proposal. Thus apart from removing any constitutional limit on additional defence spending, 0.25% of GDP (EUR 11bn) of spending in Einzelplan 14 that surpasses the 1% threshold is freed up to fund other measures, for example tax reductions.
• An increase in the structural deficit allowed for the states (Länder) from the current level of 0.0% of GDP to 0.35%, the same proportion as the federal level. Furthermore the proposal includes the formation of an expert commission tasked with creating a long-term reform proposal to structurally reform the debt brake by the end of 2025. This would have to be passed by the newly elected 21st Bundestag. It remains unclear if this reform proposal would supersede the announced measures to be passed in the 20th Bundestag or would add to them.

All elements require a two-thirds constitutional supermajority. The parties want to pass the agreed measures with the old 20th Bundestag parliament, before the newly elected 21st Bundestag (where the AfD has a potential blocking minority) is convened on March 25.

In keeping with recycled European aphorisms, party leaders, especially the Conservatives, explicitly referred to this decision as a “whatever it takes” moment and a determination to “rearm completely”. According to DB’s reading, tonight’s robust rhetoric implies that the open-ended borrowing room for defense will be used at a pace that could bring German defence spending to at least 3% perhaps as early as next year (although the exact target may only be defined after the NATO summit in June).

There is, however, a catch and in this case it is that it has not yet been confirmed whether the Greens will agree to these constitutional changes. Still, DB assumes that this will be the case, with the infrastructure fund likely to satisfy their demands. After all it’s only (lots and lots of) debt. It is also unlikely that CDU/CSU and SPD would have made this announcement without green-lighting it with the Greens. Nonetheless, this is an important source of uncertainty at the time of writing.

According to DB’s Winker, and pending more clarity on this issue while being mindful of some execution risk, the German bank’s strategists believe “this is one of the most historic paradigm shifts in German postwar history.” Both the speed at which this is happening and the magnitude of the prospective fiscal expansion is reminiscent of German reunification — though the underlying geopolitical shift driving today’s developments is far less benign than 35 years ago.

As a result of this paradigm shift, DB says that it will soon update its growth forecasts for the German economy once there is more clarity in the coming days, although it clarifies that at the time of writing “there is now meaningful upside risk to our 1.0% growth forecast for 2026.” That said, the outlook for 2025 will likely be dominated by global trade policy, where the risks remain skewed to the downside of DB’s 0.5% forecast.

Goldman agrees, writing that the agreed measures imply significant upside risks to the bank’s growth, deficit and debt forecasts, even under gradual implementation…

… but while it is debatable how much of the “defense” spending will trickle down to growth at the Federal level, one thing is certain: German deficits and debt are about to explode.

Indeed, a closely-watched gauge of the attractiveness of German debt fell to the most negative on record as German policymakers unveiled their unprecedented “whatever it takes” fiscal package meant supposedly to fund “defense” spending, but really just using the recent Ukraine fiasco as a pretext to flood the economy with debt.

As shown below, the German 10-year bond yield hit a record six basis points above comparable swaps, the most in data going back to 2007. The difference between yields and swap rates, known as the the swap spread, is a key yardstick of future issuance because bonds tend to weaken relative to swaps as the market anticipates more sales.

While some bond investors say Germany’s relatively small debt pile means it has the capacity to borrow more, they want higher yields to compensate for increased bonds outstanding. The latest leg of the move comes at a time when as noted above, Germany appears to have locked-in a gargantuan spending package equal to more than 10% of GDP!

“The German election aftermath is made more interesting by the twist from Merz that the outgoing parliament could be used to create space for extra borrowing,” according to Citigroup Inc. analysts, including Jamie Searle. “This keeps the near-term spotlight on funding for defense, which looks set to weigh further on swap spreads.”

Ironically, the German plans benefited from the catastrophic meeting last Friday between Zelensky and Trump, when it appears that the last bridge between the US and Ukraine had been burned, and Germany was on its own to fund the further defense of Ukraine. Well, now that we are hearing speculation that the US may implicitly provide security guarantees to Kiev under the guise of a commercial mineral development deal, suddenly the German plans looks far less solid: will the German people, famous for shunning any massive and not so massive new debt incurrence, agree to what is sure to be surge in the country’s sovereign debt load if Trump would end up footing the bill for Ukraine anyway and Zelensky agrees with Trump’s terms. We will find out in the next three weeks: the collapsed coalition only has until March 24 to pass the package before the new legislature sits for the first time, with the AfD now benefitting from a blocking position.

Investors had already started to price in the prospect of Germany dialing back its tight fiscal rules following the election, with the 10-year spread with swaps flipping negative for the first time in November. The 30-year swap spread, the equivalent gauge for ultra-long bonds, moved to more-deeply negative territory at about minus 50 basis points, compared to minus 46 basis points at Friday’s close.

The moves also reflect the growing volume of bonds that private investors must absorb as the ECB, once a major price-insensitive buyer, shrinks its crisis-era bond portfolios.

There also remains skepticism that Merz will be able to implement the debt brake reform in the near-future given political fragmentation. As noted above, the Left is in favor of ditching the debt brake entirely and kickstarting investment in infrastructure, but also wants to lower the defense budget. So only the possibility of horse trading that saddles Germany with even more debt is the most likely outcome.

Bottom line: Europe is well-known for suffering sovereign debt crises at the worst possible time, and should inflation remain stubbornly sticky, the yield on new German debt may soon become unmanageable… which means the ECB will have to step in and monetize German deficit spending, as it did for much of the past decade. The only problem: it will first need a market and/or deflationary shock to greenlight such an intervention. Although in light of events in the past 5 years, we doubt very much that the Frankfurt-based central bank will have any problems coming up with yet another fake crisis to capitalize on.

More in the full notes from Goldman and Deutsche Bank available to pro subscribers.

Authored by Paul Joseph Watson via Modernity.news,

A top academic and government advisor warns that the UK will experience a civil war within the next five years caused by the “destruction of legitimacy” brought about by the government’s failure to secure the border.

Professor David Betz made the comments during a podcast appearance with journalist and author Louise Perry.

Betz teaches at Kings College London and has advised or worked with the UK MOD and GCHQ as well as being a Senior Fellow of the Foreign Policy Research Institute.

The professor, who describes himself as a “classic member of the establishment,” told Perry that British society is now “explosively configured” to suffer mass unrest.

He said the fallout began with the fracture of the social contract after the political establishment in the UK tried to subvert the Brexit vote.

Subsequent years have brought about a “destruction of legitimacy” as a result of successive governments’ open border policy and their inability to protect children from grooming gangs, in addition to a two-tier justice system presided over by a highly-politicised judiciary.

“If you want to create domestic turmoil in a society, then what the British government has been doing is almost textbook exactly what you would do,” said the professor.

Betz said that the situation is now “too far gone” and that a national eruption which will outstrip last summer’s riots is likely to happen within half a decade.

Writing on his Substack, Paul Embery outlined some of the other arguments Betz made during the podcast that led the professor to make his fateful prediction.

Betz contends that we now live in a deeply fractured nation and one that has much less connection to those aspects of its history which previously made it content and well governed. The nefarious activities of certain individuals and groups serve to exacerbate and magnify our divisions.

So, can a society in which such realities are playing out be said to be destined for civil war? Well, here comes the interesting bit. Betz explains that highly-heterogenous societies (those comprised of many different social, cultural and ethnic groups) in which there is no single dominant cohort are not especially prone to civil war. That is because no group has enough power or status to co-ordinate a widespread revolt. Similarly, highly-homogenous, or ‘unfactionated’, societies are not particularly vulnerable on account of the fact that it is generally easy to arrive at consensus positions. The danger area, Betz asserts, is in the middle – societies that are becoming more heterogenous and in which a previously dominant social majority fears that it is losing its place. In such societies, a nativist sentiment manifests in a narrative of what Betz calls ‘downgrading’ and ‘displacement’ – the most powerful causes of civil conflict. Throw in long-term structural economic decline and the apparent inability of the government to offer ‘bread and circuses’, and the sense of dispossession deepens.

He also addressed the phenomenon of ‘asymmetric multiculturalism’ in which ‘in-group preference, ethnic pride, and group solidarity – notably in voting – are acceptable for all groups except whites, for whom such things are considered to represent supremacist attitudes that are anathematic to social order’. This ‘provides an argument for revolt on the part of the white majority (or large minority) that is rooted in stirring language of justice’.

On the surface, the United Kingdom would seem like the least likely country to be susceptible to mass civil disorder, but thanks to years of societal malaise and mass immigration, it unfortunately feels like we’re on the brink of experiencing just that.

*  *  *

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Authored by Andrew Korybko via substack,

Russian Permanent UN Representative Vasily Nebenzia pulled no punches at the UNSC last month when responding to the Secretary General’s latest report on terrorism. 

He called the West out for using such groups “to achieve their geopolitical goals, including the overthrow of inconvenient Governments and the creation and maintenance of hotbeds of regional instability.” 

He also claimed that they’re “cultivating a terrorist hydra” to justify aggression against the afflicted countries and their occupation.

This led to Nebenzia discussing the growth of terrorism in West Africa, which he said isn’t due to Burkina Faso, Mali, and Niger fighting more robustly against this scourge like the Secretary General’s report claimed, but NATO’s war on Libya as well as recent Western and Ukrainian support for such groups. 

On the topic of Ukraine, he mentioned how it “had previously been used as a staging ground for foreign terrorist fighters, and now it has morphed into a logistical hub”. 

Nebenzia also tied this to USAID.

Afghanistan was the next place that he talked about in this context, reminding everyone of how “NATO troops abandoned vast quantities of weapons and equipment there, which then fell into the hands of ISIL inter alia.” 

This explains the explosion of terrorism there over the past few years. He didn’t say as much, but it can be understood that this was part of a cunning plan to indirectly worsen security along Russia’s southern flank in Central Asia, all with the intent of distracting from its military focus on NATO.

Nebenzia then turned to West Asia for the final part of his speech where he talked about how Western countries don’t want to repatriate their foreign fighters nor their family members, unlike Russia which has already done so with more than 500 of them.

Keeping them in camps there creates “hotbeds of radicalization and are used by terrorists to recruit new fighters.” 

This observation cynically suggests that the West will continue weaponizing terrorism in the region in pursuit of its political goals.

The importance of his speech is that it summarizes the West’s role in the global growth of terrorism, which that New Cold War bloc dishonestly blames on some of the countries fighting against such groups like those in the Sahelian Alliance/Confederation. Just like USAID was mostly just a cover for laundering funds to anti-government groups and infiltrating foreign agents into those countries, so too were the West’s “anti-terrorist” operations actually meant to create and maintain hotbeds of regional instability.

Neither aimed to achieve what they officially set out to do, which is improve living standards and fight terrorism respectively, with each really doing the opposite of what they claimed. 

The combination of USAID and “anti-terrorist” operations is largely responsible for the chaos that’s spread across the world from 2011 onward beginning with the theater-wide Color Revolutions known as the “Arab Spring”. 

It’s only after acknowledging these facts that the world can finally work towards repairing the damage.

Can Democrats learn to admit when they’re wrong?  It might depend on the variety of Democrat.  Woke activists have proven time after time that they will double down on every incorrect position because they don’t care at all about being right; they only care about winning and destroying anyone who stands in their way.  But this is psychopathic behavior that should be common only among the fringes of ideological debate. 

Are all Democrats woke and crazy, or do a lot of them go along with the extremist mob because they’re too afraid to speak against their own side?  Or, perhaps a lot of people that lean to the left of the political spectrum have a habit of blindly following the lemmings in front of them, even if it means going off a cliff in the end. 

Whether it was psychopathy, cowardice or trend chasing, millions of US voters thought it was a good idea to jump on the woke bandwagon and support authoritarianism, collectivism and moral relativism for at least a solid four years.  No moderation was allowed.  No nuance was discussed.  No centrist ideals entertained.  During the Biden Administration and the Kamala Harris campaign ESG, CRT, DEI, LGBT and Net Zero were the message and the madness.  It was everywhere and there was no escape.  

Not surprisingly, the zealotry of the political left created massive blowback that they just could not comprehend.  Using billions in government funds from agencies like USAID to saturate the culture with race communism and trans cultism did not help them in the long run.  In fact, most of the population became fed up and angry.   The Democratic Party fully embraced the woke militants and ended up alienating half of their own voter base.

After the Democratic Party’s well-publicized setbacks during the November elections, a recent national poll indicates 45% of Democrats want their party to go moderate and move away from the terminally woke.  That’s up 11 points from 2021.

Only 31% of respondents in a Quinnipiac University survey conducted last month had a favorable opinion of the Democratic Party, with 57% seeing the party in an unfavorable light.

Polls also show that Democrats in congress hit an all-time-low approval rating last month as the party is finding it increasingly difficult to counter Donald Trump’s government accountability message.  To oppose government audits suggests they have something to hide.

Democrat politicians have come out publicly in recent weeks to admit that overt “wokeism” is ruining the party.  Senator Mark Warner, a Virginia Democrat, asserts:

“I think the Democrats’ brand is really bad, and I think this was an election based on culture. And the Democrats’ failure to connect on a cultural basis with a wide swath of Americans is hugely problematic…”

“I think the majority of the party realizes that the ideological purity of some of the groups is a recipe for disaster and that, candidly, the attack on over-the-top wokeism was a valid attack.”

In other words, Get Woke – Go Broke.

It took several years and a severe beat down in the elections to draw out even a modicum of awareness from leftists and it’s unlikely that they will abandon identity politics in the near term.  But, if the polls are correct then nearly half of Democrats are burnt out on the wacky Manson Family behavior of their activist counterparts.  This means that without dramatic changes, the Dems will not be winning any elections anytime soon.