Authored by Steve Watson via Modernity.news,

Leftist outlet Axios has published an article claiming that mental health experts are seeing a huge increase in patients who are Democrat voters complaining of “despair and burn out” in the wake of President Trump winning the election and taking office for the second time.

The piece claims that the worn out whiners are whinging about not being able to keep up with the pace of Trump’s “rapid fire policies.”

Mental health experts are seeing an increase in patients, largely Democrats, citing burnout and despair in part to the energy required to keep up with Trump’s rapid-fire policies.https://t.co/rUEiMsN6aC

— The Daily Beast (@thedailybeast) February 10, 2025

The article notes “Mental health professionals say even people who don’t see themselves as directly affected by administration actions are feeling frazzled by the dizzying pace and Trump’s enduring ability to command attention.”

“They may feel it through the venting of a spouse, the distress of a neighbor with a trans child or an anxious friend who works for a government contractor,” it hilariously adds.

The piece further states that Andrea Bonior, a Georgetown University psychology professor “said she’s seen an uptick in patients, particularly Democrats, expressing a sense of burnout, guilt and despair at losing an old way of life.”

It adds that “Bonior pointed to federal workers who aren’t sure if they’ll be let go as well as others concerned about their immigration status or worried about loved ones whose refugee flights were canceled.”

“It feels, no matter which way you go, you’re like, ‘Oh, my God, I’m being ruled by a very different system that I thought I was living in,’” New York-based neuropsychologist Sanam Hafeez told Axios.

Yes.

Won’t someone think of the bureaucratic federal workers and the illegal immigrants who now face “uncertainty” because borders and limits on government spending have been restored.

The world’s smallest violin is playing for them.

Diagnosis: cope and seethe complications due to TDS.

— 🥀🖋Polly Illuminaughty❤️‍🔥 (@MissPollyO) February 10, 2025

Democrats are so weak.

— JWF (@JammieWF) February 10, 2025

This is funny. Thank you for posting.

— 🥜🫃🏼💉🇺🇦🥥Hollaria Briden, Esq. (@HollyBriden) February 10, 2025

pic.twitter.com/kMtwJyZccf

— Rob (@parlfunk) February 10, 2025

This is what is called efficient governing. They’re not used to working so much.

— Rebecca (@blackviolas) February 10, 2025

Poor babies. It’s only February. 47 months to go!

— Redneck Rogue Elf, 🐿 Whisperer (@TheRogue_Elf) February 10, 2025

Perhaps these despairing Democrats need to hold some more group crying sessions and go ‘forest bathing.’

Pollster Mark Halperin previously predicted that America will experience the biggest mental health crisis in its history during a second Trump term.

Halperin urged that Trump has been so demonised for years that for tens of millions of Americans, Trump now becoming President again is “so traumatic” that it will become “impossible for even the most mentally healthy person to truly process and incorporate in the daily life.”

“They think that their fellow citizens supporting Trump is a sign of fundamental evil at the heart of their fellow citizens and of the nation,” concluded Halperin.

We’re already seeing Democrats completely losing it, screeching about Elon Musk being a Neo-Nazi and one State Rep. even saying she has sterilised herself as a protest against Trump.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

A winter blast is expected today across the Mid-Atlantic, including the Washington-Baltimore metro area, while Philadelphia and New York City could see snow. Ice storms are expected in Western North Carolina. 

“Impactful winter weather is expected today and tonight as snow and freezing rain are expected to spread across the Ohio Valley, Central Appalachians, and Mid-Atlantic states,” the NWS Weather Prediction Center wrote in an early morning update on X. 

Private weather forecaster NY NJ PA Weather noted on X, “Based on the 12Z and 18Z data, I feel confident about the current snow forecast” for the Mid-Atlantic area into the Northeast. 

Capital Weather Gang’s DC Snow Forecast:

“Over 80 million people are under winter weather alerts, spanning from coast to coast, as snow and rain are already underway in the Ohio Valley,” Fox Weather reported. 

It’s just a matter of time before FlightAware’s Misery Map of Flight Cancellations begins stacking up across the Mid-Atlantic and Northeast airports.

Meteorologist Matthew Cappucci explained in a short video that this winter storm setup is “weird.” 

DMV folks — our snowstorm is a weird setup.

We don’t have much of a surface low. Just some stubborn cold and nearby.

But moisture rides in on mild southwesterly winds at the mid levels. Then we get a temperature clash called “frontogenesis.”

Here’s how that makes snow: pic.twitter.com/fulnLFuRM6

— Matthew Cappucci (@MatthewCappucci) February 10, 2025

The question is: With USAID funds running dry for nonprofits linked to radical leftists, will they still have enough money to supply heaters for Democratic lawmakers protesting outside federal buildings about Elon Musk’s DOGE budget cuts and his efforts to make the government more efficient?

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

President Donald Trump said in a new interview that he’s serious when he talks of wanting Canada to be a part of the United States.

Trump was asked by Fox News host Bret Baier in an interview that aired ahead of the Super Bowl on Feb. 9 about comments made by Canadian Prime Minister Justin Trudeau on the issue on Feb. 7. In remarks caught on a hot mic, Trudeau told attendees at the Canada–U.S. Economic Summit in Toronto that Trump’s wish for Canada to become a part of the United States “is a real thing.”

Baier asked Trump if it is indeed a “real thing” as Trudeau suggested, to which the president responded, “Yeah, it is.”

“I think Canada would be much better off being the 51st state because we lose $200 billion a year with Canada. And I’m not going to let that happen,” Trump said. “Why are we paying $200 billion a year, essentially a subsidy to Canada?”

Trump claims his Canada as a 51st state troll is real.

We should hold provincial referendums on this. Let the provinces decide. Those who vote yes join the US, those who vote no get Canada and Carney and his WEF eco-dystopia.pic.twitter.com/rvIU8ipGF8

— Jason James (@jasonjamesbnn) February 9, 2025

Trump appeared to be referring to how the United States buys more products from Canada than Canada buys from the United States, according to remarks that he made earlier on Feb. 9. The trade deficit in goods with Canada was $63.3 billion in 2024, according to the Bureau of Economic Analysis. The White House did not immediately respond to a request for comment.

Trump has said in recent weeks that Canada would be better off being a U.S. state rather than its own country, in part because it would be more secure from a military standpoint. He has said that merging the countries, if it happens, would take place through “economic force” rather than military force.

Canadian officials have reacted negatively to Trump’s comments.

“There isn’t a snowball’s chance in hell that Canada would become part of the United States,” Trudeau wrote on social media platform X at one point.

Conservative leader Pierre Poilievre has also said that Canada would never be a U.S. state.

About one-third of Canadians and one-fifth of Americans polled in January said they think that Trump is serious about his talk of taking Canada into the United States. Some Canadians said they think Trump might resort to military force to annex Canada.

Trump told reporters as he traveled to New Orleans for the Super Bowl on Feb. 9 that Canada’s relatively low military spending levels are because of the country’s leaders’ assumption that the United States is going to protect them. Compared with U.S. spending of about 3.4 percent of its gross domestic product on its military, Canada spends about 1.3 percent of its gross domestic product on its military.

“That’s not an assumption they can make, because why are we protecting another country?” Trump said. “I love the people of Canada, we have a great relationship; but, if they became our 51st state, it would be the greatest thing they could ever do; it would be unbelievable. It would be a cherished state. And think about how beautiful that country would be without that artificial line.”

Trump also said the United States subsidizes Canada because it allows it to make vehicles and other goods sold in the United States.

“If we stop allowing them” to do that, through tariffs and other measures, “they’re not viable as a country,” he said.

Trump has vowed to impose additional tariffs on steel and aluminum. Canada is the largest exporter of steel and aluminum to the United States.

Matthew Horwood contributed to this report.

US equity futures, treasuries and the dollar are all lower as the latest tariff news sparked a risk-off move, with traders also looking ahead to testimony from Jerome Powell at 10am ET today. As of 8:00am, S&P futures are down 0.2% while Nasdaq futures drop 0.5%, as Mag 7 stocks all lower with NVDA (-1.2%) and TSLA (-0.6%) underperforming; Europe’s Stoxx 600 index was held back by tumbling mining and travel shares and a gauge of Asian stocks dropped. Trump signed the 25% tariffs on all steel and aluminum imports with no exceptions after market close yesterday. Moreover, the announcement of reciprocal tariffs is expected to arrive in the next few days, which adds further uncertainty on stocks. Gold touched a fresh record high rising as high as $2942 before retracing, while an index of the dollar dropped from Monday, and treasury yields rose. Commodities are mostly higher: oil and aluminum added 1.3% and 1.2%, respectively; Ags are also higher. Today, key macro focus are Powell’s testimony, KO/GILD/SPGI earnings and any updates from Washington.

In premarket trading, Phillips 66 jumped 5% as Elliott Investment Management has built a more than $2.5 billion stake in the oil refiner; the news follows reports that Elliott had also built up a sizable stake in flailing European energy giant BP. Coca-Cola rose 3% after profit beat Wall Street expectations as shoppers paid higher prices for the company’s sodas, energy drinks and juices. Meanwhile, amazon is one of the largest decliners for the Magnificent Seven group (GOOGL -0.4%, AMZN -0.7%, AAPL -0.4%, MSFT -0.2%, META -0.3%, NVDA -0.6% and TSLA -0.4%). Here are the other notable premarket movers:

• Amkor Technology (AMKR) falls 9% after the semiconductor manufacturer’s forecast for first-quarter net sales missed the average analyst estimate.
• Astera Labs (ALAB) slips 4% after the semiconductor connectivity company reported gross margins that were slightly below analyst estimates.
• DuPont de Nemours Inc.’s (DD) rises 4% as earnings jumped on growth in the electronics market, suggesting the conglomerate’s push to cut costs and break up into smaller, more focused businesses is paying off.
• Fidelity National (FIS) drops 6% after providing a forecast for 1Q profit that missed the average analyst estimate.
• Fluence Energy (FLNC) plunges 36% after the renewable-energy equipment maker cut its total revenue guidance for the full year to a level below Wall Street estimates.
• Harmonic (HLIT) sinks 26% after the communications equipment company issued weaker-than-expected forecasts for revenue and profit for the current quarter and full year.
• Incyte (INCY) falls 3% after the drugmaker’s fourth-quarter profits fell short of estimates, and analysts pointed to disappointing guidance for its Opzelura drug, despite multiple catalysts ahead.
• Inspire Medical Systems Inc. (INSP) said in a filing that the company received a request for information from the Department of Justice. The medical device falls as much as 8% postmarket
• Lattice Semi (LSCC) rises 13% after the semiconductor device company gave reassuring 1Q guidance.
• Mitek Systems Inc. (MITK), a software company focused on digital identity verification, falls 7% after posting fiscal 1Q revenue that slightly beat estimates and reiterating year revenue guidance.
• Phillips 66 (PSX) rises 5% as Elliott Investment Management has built a more than $2.5 billion stake in the oil refiner.
• Shopify (SHOP) falls 8% after reporting quarterly results.

The latest market moves underscore how investors are struggling to gauge the potential flow-on effects from Trump’s actions for global trade, corporate earnings and inflation. The European Union said Tuesday it will respond to any tariffs the US might impose on it, escalating a potential transatlantic trade dispute.

“The best approach in terms of asset allocation is to find assets that can protect you,” said Christian Mueller-Glissmann, head of asset allocation research for Goldman Sachs, on Bloomberg Television. “The big challenge is that this is going to be much more difficult from here because the tariffs are very specific.”

Trump on Monday set 25% tariffs on steel and aluminum shipments from all countries, including major suppliers Mexico and Canada, effective March 12. The president also said he would announce reciprocal levies this week on countries that tax US imports.

Aside from the global trade picture, investors will also be focused on this week’s key inflation data and Federal Reserve Chair Jerome Powell’s testimony before Congress. Expected inflation rates over the next year and three years ahead were both unchanged in January at 3%, according to results of the New York Fed’s Survey of Consumer Expectations published Monday.

“The CPI data will be the most important this week,” said Viktor Hjort, global head of credit and equity derivatives strategy at BNP Paribas. “The risks are asymmetric; if inflation were to go higher, that’s worse for credit markets than the upside if inflation were to move lower. The selloff in Treasuries today — which is a moderate one — could easily be rationalized as positions paring ahead of a pretty important data print.”

European stocks hover near a record high as investors look ahead to the latest round of corporate earnings reports and weigh the potential for a broader trade war with the US. Energy and media sectors outperformed, while miners and travel were the biggest laggards. Among single stocks, Kering rallies after earnings showed a slight improvement, while Entain shares slide after a surprise CEO departure after just five months. Here are the most notable movers:

• Kering shares rise as much as 6.7% after the Gucci owner’s earnings showed a slight improvement. Analysts had flagged weak sentiment for the luxury goods stock ahead of its release.
• DSM-Firmenich shares gain as much as 5.5% in Amsterdam after the nutrients and flavors company agreed to sell its stake in a partnership called the Feed Enzyme Alliance to Novonesis for €1.5 billion ($1.6 billion).
• Mediobanca shares gain as much as 3.2% to the highest level in almost 18 years after the Italian lender posted 2Q profit ahead of analysts’ estimates and raised 2026 guidance.
• Var Energi shares gain as much as 4.9% after the Norwegian oil company raised its dividend policy for 2025 and lifted production guidance to above 400,000 barrels of oil equivalent per day by the end of 2025.
• AMS-Osram shares rise as much as 19% after the chipmaker says it’s expecting free cash flow to exceed €100m this year, a goal that JPMorgan says is a positive for investors after its cash outflow in 2023.
• Barco shares jump as much as 17% after the visualization specialist’s strong cost control measures helped margins come in higher than expected, resulting in annual earnings beating estimates.
• Kemira shares plunge as much as 9.3% after the Finnish company reported 4Q operating Ebitda that missed average analyst estimates.
• UniCredit shares retreat from a 14-year high as a softer outlook for lending revenue offset a beat in 4Q net income and plans to distribute €9 billion to shareholders.
• Entain shares sink as much as 11% after the sports betting company announced in a statement that CEO Gavin Isaacs is stepping down with immediate effect after five months.
• TUI shares slide as much as 8% as signs of normalizing booking trends in key markets overshadowed what analysts said was a strong first-quarter reportl
• Stora Enso shares fall as much as 5% after the paper and packaging firm said it will no longer provide annual Ebit guidance.
• Bellway shares drop as much as 6.8%, most since October, after a trading update sees Citi lower its 2026-27 earnings estimates on weaker demand. Shares of some rival UK homebuilders also decline.

On the UK monetary policy front, Bank of England rate-setter Catherine Mann said she voted for a bumper half-point interest-rate reduction at last week’s BOE meeting to “cut through the noise” after seeing more evidence of a weakening economy. The pound weakened before paring the move. Before last week, Mann was seen as the BOE’s most hawkish rate-setter and was the only member of the Monetary Policy Committee not to back either of the previous two reductions of the cutting cycle.

Earlier in the session, Asian stocks headed for a second day of losses as traders digested the impact of US President Donald Trump’s decision to impose 25% tariffs on all imports of steel and aluminum. The MSCI Asia Pacific ex-Japan Index fell as much as 0.5%, with Chinese tech shares such as Tencent and Xiaomi among the biggest drags. Benchmarks in China declined, offsetting gains in South Korea and Taiwan. Japan was closed for a holiday. The risk-off mood in Asia reflects investors’ ongoing concern about a global trade war, with the potential for other nations to roll out retaliatory tariffs against the US. It could also affect corporate earnings, inflation and the Federal Reserve’s monetary policy.

In FX, the Bloomberg Dollar Spot Index is 0.1% lower. GBP/USD was little changed at 1.2369; Bank of England voting member Catherine Mann said she voted for a bumper half-point interest-rate reduction to “cut through the noise” after seeing more evidence of a weakening economy. The euro added 0.2% and is the strongest of the G-10 currencies.

In rates, treasuries dip before Fed Chair Jerome Powell delivers his semi-annual Humphrey-Hawkins testimony on Capitol Hill at 10am ET, while US inflation data due Wednesday also coming into view. US 10-year yields rise 4 bps to 4.54%, with the yield curve steeper as US trading gets under way, extending Monday’s widening of 2s10s and 5s30s spreads. US long-end yields are 3bp-4bp higher on the day, widening 2s10s spread by nearly 3bp, 5s30s by ~1bp.  Wider losses across core European rates support higher Treasury yields ahead of Powell’s testimony. In Europe, France mandates banks for a new 30-year bond offering, adding to supply pressure. Gains in oil add to upside pressure on Treasury yields with WTI futures advancing 1.1% after rising nearly 2% Monday; commodities broadly are in focus after US President Trump set 25% tariff on steel and aluminum imports to take effect March 12. US Treasury coupon auctions resume with $58b 3-year note sale at 1pm, to be followed by $42b 10-year and $25b 30-year Wednesday and Thursday. WI 3-year yield near 4.31% is ~2bp richer than last month’s auction, which tailed by 1.2bp. 

In commodities, oil advanced from near its lowest levels this year as shrinking Russian production eased concerns over a glut; Brent crude futures rose 1.3% toward $77 a barrel, after rising 2% on Monday. Gold set a fresh peak above $2,940 an ounce, before retracing some of that advance. Bullion has surged about 11% this year, setting successive records, as Trump’s disruptive moves on trade and geopolitics reinforce its role as a store of value in uncertain times. Bitcoin rises 0.8% above $98,000.

Looking at the day ahead, US economic data calendar is blank with January CPI ahead Wednesday. Fed speaker slate includes Hammack (8:50am), Powell (10am), Williams and Bowman (3:30pm).

Market Snapshot

• S&P 500 futures down 0.3% to 6,068.25
• STOXX Europe 600 down 0.1% to 545.37
• MXAP down 0.4% to 184.65
• MXAPJ down 0.5% to 580.04
• Nikkei little changed at 38,801.17
• Topix down 0.2% to 2,733.01
• Hang Seng Index down 1.1% to 21,294.86
• Shanghai Composite down 0.1% to 3,318.06
• Sensex down 1.3% to 76,325.96
• Australia S&P/ASX 200 little changed at 8,484.00
• Kospi up 0.7% to 2,539.05
• German 10Y yield up 4 bps at 2.40%
• Euro little changed at $1.0316
• Brent Futures up 1.1% to $76.73/bbl
• Gold spot up 0.0% to $2,908.99
• US Dollar Index little changed at 108.29

Top Overnight News

• US judge temporarily blocked the Trump administration’s cuts to universities and medical centres’ research funding.
• US Speaker Johnson intends to begin presenting outlines of his budget reconciliation package today, he believes he’s “very close” to a final budget resolution: Punchbowl.
• Sam Altman said OpenAI is not for sale, rebuffing a $97.4 billion bid by an Elon Musk-led group. BBG
• South Korea’s state-run think tank cuts its growth forecast for the country and warned that Trump trade uncertainty is a downside risk. WSJ
• China’s vehicle sales fell in January, pressured by subdued demand and a front-loading effect from the previous month. Retail sales of passenger cars fell 12.1% to 1.79 million vehicles in January from a year earlier. Sales declined 32% from December, remaining at historically low levels. WSJ
• The EU vowed “firm” countermeasures to any tariffs imposed by the US. Donald Trump warned metals levies “may go higher” than his 25% charge on all US imports of steel and aluminum from March 12. The president also said he’ll be looking at tariffs on cars and chips. BBG
• The UK is set to sell a record £13 billion of 10-year bonds after attracting more than £140 billion of orders — the highest-ever demand for such securities — from investors keen to lock-in yields near multi-decade highs. BBG
• Trump and the US will consider an exemption for Australia from the 25% tariff it imposed on steel and aluminum imports this week, leaders from both countries said after a phone call. Nikkei
• Israel should call off its ceasefire deal with Hamas if hostages aren’t returned this weekend, Trump said. He threatened to cut off aid to Jordan and Egypt if they don’t take Palestinian refugees from Gaza. BBG
• Jordan’s King Abdullah II will deliver a concerted message from the Arab world that Trump needs to think again on his plans for Gaza. He’s set to meet with the president in Washington today. BBG
• JD Vance said that the Trump administration will work to make the US the “gold standard worldwide” for AI as he issued strong warnings against regulating political speech and took aim at the EU’s tough regulatory approach. BBG

Tariffs

• US President Trump signed proclamations to reimpose a 25% tariff on steel and aluminium imports and declared there are no exceptions or exemptions, effective March 12th. Trump said they are looking at tariffs on cars, pharmaceuticals and chips and will hold meetings over the next four weeks, while they will do reciprocal tariffs over the next two days. Trump also commented that tariffs on metals could go higher and he does not mind if other countries retaliate. Furthermore, it was also reported that President Trump is expected to sign executive orders on Tuesday at 15:00EST/20:00GMT.
• Canada’s Industry Minister said US tariffs on steel and aluminium are “totally unjustified”, while he is consulting with international partners on US steel and aluminium tariffs, as well as noted that the response will be “clear and calibrated”.
• Australian PM Albanese said he had a great conversation with US President Trump and they committed to working constructively to advance Australian and American interests, while he noted that President Trump agreed to consider an exemption for Australia on steel tariffs.
• Hong Kong said US tariffs are inconsistent with WTO rules and it will file a complaint on US tariffs to the WTO, while it noted the US has completely ignored the city’s status as a separate customs territory from China.
• EU Trade Ministers set to hold video conference on Wednesday after Trump confirms steel and aluminium tariffs. EU Commission President von der Leyen says unjustified tariffs on the EU will not go unanswered; they will trigger firm and proportionate countermeasures.
• EU Trade Commissioner Sefcovic says they are looking into the possibility of stronger trade ties with Gulf-nations.
• South Korean acting President says they are to prepare support for firms hit by US tariffs; to discuss response measures with Japan and the EU.
• Canadian PM Trudeau says “our response will be firm and clear and we will stand up for Canadian workers”, in relation to the new Trump tariffs.
• “Britain is not expected to join the EU in retaliating against the US after Donald Trump announced plans to hit steel imports with 25% tariffs”, according to Times’ Swinford. “The EU said it will ‘react to protect the interests’ of businesses, workers and consumers”. “But senior govt sources said that retaliatory tariffs would have little impact and would ultimately serve to provoke Trump further”. “Starmer, Reynolds and Lammy have all been very clear that Britain is philosophically opposed to tariffs of any kind”.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were ultimately mixed after the tech-led gains on Wall St and as participants digested US President Trump’s 25% tariffs on steel and aluminium which take effect from March 12th, while Japanese markets were closed for a holiday. ASX 200 closed flat with gold stocks underpinned after the precious metal extended on its record highs, while the tech sector took impetus from the strength seen in its US counterpart. Hang Seng and Shanghai Comp were subdued following US President Trump’s latest tariff actions, while he reiterated they will do reciprocal tariffs in the next two days and is also looking at tariffs on cars, pharmaceuticals and chips with meetings to take place over the next four weeks. Furthermore, Hong Kong criticised the US tariffs and will file a complaint on US tariffs to the WTO, as well as claimed that the US has completely ignored the city’s status as a separate customs territory from China.

Top Asian News

• US President Trump said he had spoken to Chinese President Xi since his inauguration but didn’t provide further details.

European bourses (Stoxx 600 U/C) are mixed and trading on either side of the unchanged mark, continuing the indecisive mood in APAC trade overnight, as markets digest Trump signing a reimposition of 25% tariffs on steel and aluminium. Markets are also awaiting updates over the next few days re. tariffs on cars/pharmaceuticals/chips. In recent trade, some downside has picked up a touch. European sectors are mixed and with the breadth of the market very narrow. Media takes the top spot, joined closely by Energy; the latter is buoyed by strength in underlying oil prices. Consumer Products was initially the outperformer, lifted by post-earning strength in Kering (+2.2%) – but the upside has since mostly pared.

Top European News

• BoE’s Mann said UK inflation is less of a threat as corporate pricing power weakens and pricing is coming very close to 2% target-consistent levels in the year ahead, while she added that demand conditions are weaker than before and that she had changed my mind on that, according to FT.
• BoE’s Mann says as an activist policy maker, she opted for 50bps cut in February to 1) ‘cut through the noise’, 2) anchor expectations through the inflation hump, and 3) acknowledge structural impediments and macroeconomic volatility in longer term. On the Bank Rate: “I note that respondents in our Market Participants’ Survey have been consistent in putting this longer-run average at about 3-3½ percent. I’m more likely at the higher end of that range.” “I expect that Bank Rate will average well above the nominal equilibrium rate implied by the estimates set out in the August 2018 Inflation Report”. “it seemed to me that the two quarter-point cuts last year had not appreciably loosened financial conditions.”. “Indeed, the projections in the February Monetary Policy Report were conditioned on a path for Bank Rate that is above four percent for the entirety of the forecast horizon which, given my assessment of the UK outlook, was not consistent with achieving the 2% target sustainably.”. On being the activist policymaker, “The activist policymaker needs to maintain policy rate discipline and restrictiveness even after this immediate decision. This ensures that, as we move through the inflation hump, expectations remain anchored both in the near and longer term.”.
• BoE’s Mann says “my active rate policy does not mean cut, cut, cut”. “A 50bps cut now, 50 next time would not be a full reading of what I have said”. Looking to see that wage settlements will be moderate and that firms pricing power is moderate. Not expecting additional second-round effects.
• Barclays said UK January consumer spending rose 1.9% Y/Y which is the largest rise since March 2024 and Consumer Sentiment was at +21% which is the lowest since the series began in April 2024.
• European Commission President von der Leyen says the EU aim to mobilise EUR 200bln in AI investments in Europe

FX

• DXY is a little lower as markets digest the latest bout of tariff updates. Trump’s tariff regime remains the main focus throughout trade thus far after the President signed proclamations to reimpose a 25% tariff on steel and aluminium imports and declared there are no exceptions or exemptions, effective March 12th. Furthermore, Trump said they are looking at tariffs on cars, pharmaceuticals and chips and will hold meetings over the next four weeks, while they will do reciprocal tariffs over the next two days. US President Trump is expected to sign executive orders on Tuesday at 15:00EST/20:00GMT. A slew of Fed speakers are due to today, with Chair Powell also scheduled for 10:00EST/15:00GMT.
• EUR is trivially firmer vs. the USD after a session of shallow losses yesterday. In the early stages of the Trump Presidency, markets were relieved that no immediate action was taken against the US. However, the recent imposition of steel tariffs by the US has brought this to an end. Actions have subsequently triggered a response from the bloc with European Commission President von der Leyen stating that unjustified tariffs on the EU will not go unanswered. ECB thought-leader Schnabel due to speak at 17:00GMT. EUR/USD is holding above the 1.03 mark and within Monday’s 1.0282-1.0336 range.
• JPY saw some fleeting support vs. the USD in early European trade following as markets digested the latest ramp-up in global trade tensions. Fresh macro drivers for Japan were lacking overnight with the nation away for holiday. USD/JPY is currently tucked within Monday’s 151.17-15253.
• GBP is trivially higher vs. the USD after three sessions of losses in the wake of last week’s “dovish” cut from the BoE. 50bps dissenter Mann has been on the wires overnight and throughout the morning justifying her decision to go back a larger rate reduction. Mann noted that her decision was made on the basis that she is an activist policy maker and wished to “cut through the noise” by taking bold action. Governor Bailey is due to speak at 12:15GMT. Cable has been as high as 1.2377 but is yet to threaten the 1.24 mark.
• Antipodeans are both a touch higher vs. the USD. Focus for AUD has been on the recent imposition of steel tariffs by the US. Australian PM Albanese said President Trump agreed to consider an exemption for Australia on steel tariffs. Trump later declared no exceptions or exemptions.
• PBoC set USD/CNY mid-point at 7.1716 vs exp. 7.3067 (prev. 7.1707).

Fixed Income

• A slightly constrained start to the session on account of a Japanese holiday and as such there was no overnight cash UST trade. Nonetheless, the bias is bearish as participants digest and assess the inflation implications of Trump’s latest measures and commitments to respond from Canada and the EU. Action which has weighed on USTs to a 109-01+ trough, a tick below Monday’s base but just above the 109-01 low from Friday. Trump is set to sign an executive order at 15:00 EST, with commentary via Fed Chair Powell also due at that time.
• Bunds have moved in tandem with peers. EU Commission President von der Leyen said they will trigger firm and proportionate countermeasures while Trade Commissioner Sefcovic remarked that closer ties with Gulf nations are being looked at; remarks which have had little impact on the complex. Bunds down to a 133.04 base, have seemingly found a slight floor just above the 133.00 mark. ECB Schnabel is due later.
• Gilts are in-fitting with the above. Not quite as pressured as Bunds but not far behind, some modest recent respite has come from reporting around the 2035 Gilt syndication which just before books closed had reportedly attracted orders in excess of GBP 130bln. Prior to these reports, a length text release dropped from BoE dissenter Mann (voted for 50bps cut, decision was 25bps). A speech which sparked a modest hawkish move as the release made clear that Mann continues to favour and wants to maintain “policy rate discipline and restrictiveness”.
• Netherlands sells EUR 2bln vs exp. EUR 1.5-2.0bln 2.75% 2047 DSL: average yield 2.773% (prev. 0.403%)
• Orders for Italy’s new 15yr BTP bond exceeds EUR 83bln, spread set at +7bps over BTP maturing in 2039, via Reuters citing leads.
• UK to sell GBP 13bln of 4.5% 2035 Gilt via syndication (a record), according to a bookrunner; orders in excess of GBP 140bln.
• Germany sells EUR 3.777bln vs exp. EUR 5bln 2.40% 2030 Bobl: b/c 2.0x (prev. 2.52x), avg. yield 2.17% (prev. 2.42%) & retention 24.60% (prev. 24.14%).

Commodities

• Firmer trade across the crude complex this morning amid Middle Eastern geopolitical updates and in the aftermath of tariff escalations after US President Trump signed proclamations to reimpose a 25% tariff on steel and aluminium imports and declared there are no exceptions or exemptions, effective March 12th. Brent sits in a USD 75.90-76.74/bbl parameter at the time of writing.
• Mixed/mostly lower trade across precious metals with silver and palladium hampered by the implications of US levies, but spot gold trading flat. Silver has both monetary and industrial uses, with around half of its demand coming from industrial applications (electronics, solar panels, etc.). Gold is cushioned by haven properties, with the yellow metal pulling back after printing a fresh high overnight at USD 2,942.78/oz.
• Base metals are lower across the board amid the implication on demand from the aforementioned tariffs. 3M LME copper sits towards the bottom end of a USD 9,364.00-9,452.55/t range at the time of writing.
• Russia’s First Deputy Energy Minister believes sanctions won’t hinder oil trade with India and said more time is needed to assess the impact of the latest sanctions, while the official added that Russia has the technology to develop energy resources and will continue to meet market demand for energy.
• Russian Deputy PM Novak says will looking to proposals regarding possibility of gasoline export ban.

Geopolitics: Middle East

• US President Trump said if all Gaza hostages aren’t returned by noon on Saturday, he would say cancel the ceasefire and let all hell break out, while he added that Israel can override it and thinks Jordan will take refugees. Trump also said the US could withhold aid to Jordan and Egypt if they don’t take refugees, while he might talk to Israeli PM Netanyahu about the Saturday deadline.
• Al-Qassam Brigades Tulkarm said their fighters, accompanied by the Al-Quds Brigades and the Al-Aqsa Martyrs Brigades, targeted an Israeli force in the vicinity of Tulkarm camp, according to Al Jazeera.
• US President Trump said Iran is very concerned and very frightened because their defence is pretty much gone and now would love to make a deal with the US, according to an interview with Fox News cited by Iran International.
• Egyptian sources say that “Trump’s threat to cut off aid to Egypt would mean that the peace treaty between Israel and Egypt “would have no meaning,” and that the tension in relations between the United States and Egypt was the greatest in three decade”.
• Israeli “security cabinet is now convening at the Prime Minister’s Office in Jerusalem to discuss Israel’s response to Hamas’s postponement of the release of hostages”, via Times of Israel.

Geopolitics: Ukraine

• Russian Deputy Foreign Minister meets the US envoy, according to RIA.
• “A Gulfstream jet registered to a company controlled by Steve Witkoff, United States Special Envoy to the Middle East, is moments away from landing in Moscow…It is unclear if Witkoff himself is on board”, according to HuffPost’s Ali.
• Ukraine’s Energy Minister said Russia launched an air attack on Ukraine’s gas infrastructure overnight and in the morning, while emergency power restrictions were imposed to minimise possible consequences.
• Russia’s aviation watchdog suspended flights at four airports to ensure safety after officials reported drone attacks.
• Industrial facility in Russia’s Saratov region was on fire after a Ukrainian drone attack, according to the regional governor, while Russia’s Shot Telegram news channel reported explosions were heard in the area of the oil refinery in Saratov.
• US President Trump said he will speak with Ukrainian President Zelensky this week and special envoy Kellogg is going to Ukraine soon. It was also reported that the Trump administration will push European allies to purchase more US weapons for Ukraine, while weapons approved by the Biden administration are still flowing to Ukraine, according to Reuters citing sources and the US Special Ukraine Envoy.

Geopolitics: Other

• North Korea said a US nuclear submarine has arrived at a South Korean port, escalating security tensions, according to KCNA. Furthermore, North Korea said Washington’s sending of a nuclear submarine to Seoul is a serious threat.

US Event Calendar

• 06:00: Jan. SMALL BUSINESS OPTIMISM 102.8, est. 104.7, prior 105.1

Central Bank Speakers

• 08:50: Fed’s Hammack Speaks on Economic Outlook
• 10:00: Fed’s Powell Testifies to Senate Banking
• 15:30: Fed’s Bowman Speaks on Bank Regulation
• 15:30: Fed’s Williams Gives Keynote Remarks

DB’s Jim Reid concludes the overnight wrap

Morning from Heathrow as the DB outlook tour hits Brussels today before I have a dinner in Paris tonight. Thankfully the Trump 2.025 outlook we published in November is still live in terms of views. On balance the risks are perhaps skewed towards a more aggressive tariff view than we had penciled in but the reality is that we’d priced in enough to suggest that the Fed wouldn’t be able to cut rates this year due to elevated inflation and a combination of this and the data means we still believe this.

The tariff news has continued to build over the last 24 hours but risk assets got the week off to a solid start yesterday, with the S&P 500 (+0.67%) moving back to within 1% of its all-time high, while global bond markets saw muted moves. Yet despite the mostly positive headline moves, there were several mounting risks looming on the horizon, including the threat of reciprocal tariffs from the US, along with European natural gas prices at a two-year high. In both cases, the problem is that it’s reviving investors’ fears about inflation, which in turn is raising questions about whether we’re going to get the rate cuts that are currently priced in. So it meant the US 2yr inflation swap (+2.7bps) hit its highest level in nearly two years, at 2.75%, whilst gold prices (a classic inflation hedge) moved above $2,900 for the first time as well.

In terms of the latest on tariffs, shortly after the US market close yesterday Trump signed the executive order imposing 25% tariffs on US steel and aluminum imports, which will be effective from March 12. The tariffs will affect all countries, though Trump confirmed he was considering an exemption for Australia. Procedurally, the move revives and expands tariffs introduced back in 2018. Meanwhile, Trump commented that details on reciprocal tariffs would come over the next two days, while also saying that tariffs on metals “may go higher” and that his administration would be looking at chips and cars, two product groups he’s previously floated as potential tariff targets.

Our US economists published a piece suggesting that if sustained, steel and aluminium tariffs combined with reciprocal tariffs could increase core PCE in 2025 by an additional 30-40bps, depending on the ultimate passthrough to consumer prices. If the delayed Canada and Mexico tariffs were to ultimately go into effect as well, inflation in 2025 could be above 3.5%, though the assumption is that tariffs would have limited impact beyond this year. While our economists’ baseline is that the Fed would prefer to “look through” the price level impact by keeping rates steady, their ability to do so could be constrained if inflation expectations begin to rise and / or the labour market reemerges as an additional source of inflationary pressure. Recent data suggest both these outcomes cannot be fully discounted. See their piece here.

Staying on the theme, in a piece yesterday, the FX team looked at which countries would be hit most by reciprocal tariffs, but the key point is that the impact varies widely depending on how reciprocity is defined.

Meanwhile in Europe, the main story was the mounting price of natural gas, which brought back unhappy echos of the energy crisis back in 2022. In terms of the latest, natural gas futures moved up another +4.16% to €58.04/MWh, which is their highest closing level in over two years, and more than double their levels a year ago. Now admittedly, we’re still a long way from the situation in late-2022, when prices averaged above €100/MWh, but gas storage is falling right now, and is currently at its lowest level at this point in the year since 2022. And more broadly, this is adding to the risk that inflation remains sticky above target, making it more difficult for the ECB to cut rates over the rest of the year.

Yet despite the bad news on inflation from tariffs and higher gas prices, there was some better news from the New York Fed’s Survey of Consumer Expectations. That showed inflation expectations were broadly stable in January, with 1yr and 3yr expectations unchanged at 3.0% even if the 5 year expectation edged up three tenths to 3.0%. Importantly for markets, the overall release was a contrast to the University of Michigan’s preliminary survey for February, which showed 1yr expectations surging up to 4.3%, so it helped to reassure investors that the UMich number wasn’t being replicated more broadly. After all, if inflation expectations become unanchored, that’s a huge problem for central banks as it raises the risk of a self-fulfilling prophecy where firms set prices and workers bargain for wages according to those higher expectations. And it was a big success during the recent inflationary wave that long-term US inflation expectations remained in check, helping to prevent a repeat of the 1970s. Looking forward, the focus today will turn back to the Fed, as Fed Chair Powell is delivering his semiannual testimony before the Senate Banking Committee, ahead of the CPI release for January, which is out tomorrow, before Powell’s second congressional testimony of the week.

Even with the uncertain backdrop yesterday, the absence of definitive negative newsflow was sufficient for equities to put in a strong performance, with the major indices on both sides of the Atlantic moving higher on the day. Tech stocks outperformed, with the NASDAQ up +0.98%, though the Magnificent 7 (+0.42%) saw a more modest gain, weighed upon by a -3.01% decline for Tesla. The S&P 500 rose +0.67%, with the energy sector (+2.15%) the strongest performer as Brent crude oil rose +1.96% to $76.12/bbl amid a tighter supply outlook, including a Bloomberg report that Russia’s oil production fell below its OPEC+ quota in January. In Europe, the STOXX 600 (+0.58%), the FTSE 100 (+0.77%) and the DAX (+0.57%) all closed at record highs.

For bonds it was also a decent picture, despite the lingering concern about inflation. For Treasuries, the 2yr yield fell -1.3bps on the day to 4.28%, with a 2.6bps decline in the real yield more than offsetting higher breakevens, whilst the 10yr yield was little changed (+0.2bps to 4.50%). Meanwhile in Europe, 10yr yields also fell across the continent, with those on bunds (-1.0bps), OATs (-0.9bps) and BTPs (-1.7bps) all moving lower.

In Asia markets are quiet with Japan on holiday. Chinese stocks are slightly underperforming after climbing for several consecutive sessions with the Hang Seng (-0.33%) leading losses with the Shanghai Composite (-0.12%) trying to get back to flat. Elsewhere, the KOSPI (+0.73%) is bucking the negative trend while the S&P/ASX 200 (+0.06%) is flat. S&P 500 (-0.22%) and NASDAQ 100 (-0.28%) futures are lower with Treasuries not yet trading due to the Japanese holiday.

To the day ahead now, and there are lots of central bank speakers, including Fed Chair Powell’s testimony to the Senate Banking Committee. Otherwise, we’ll hear from the Fed’s Hammack, Williams and Bowman, the ECB’s Schnabel, BoE Governor Bailey, and the BoE’s Mann. Otherwise, data releases from the US include the NFIB’s small business optimism index. And today’s earnings releases include Coca-Cola.

Global equities are digesting the Trump administration’s latest tariff barrage on steel and aluminum. Fed Chair Jerome Powell’s Senate Banking Committee testimony begins today and continues into Wednesday, along with multiple Fed speakers and more executive orders, are keeping traders on edge. Additionally, the US CPI (read: here) will be published on Wednesday, adding to the flurry of events for investors and traders. 

In the thick of chaos, traders often lose sight of the key themes shaping the markets. To refocus, Goldman’s Oscar Ostlund outlined seven critical themes that should be top of mind for investors this week: 

1. Geopolitics are back: Aside from the onset of the Ukraine invasion, geopolitics had taken the backseat in markets for the past few years. That’s not the case anymore, as weekly tariff headlines take the driver’s seat. Trade wars are a key focus, albeit most investors see the current tariffs as relatively temporary.

2. Inflation fears are back: The biggest worry investors have regarding the US Exceptionalism theme is sticky inflation (27%). With breakevens making new highs, talks about overheating are likely to rise…

3. Gold is the ultimate USD long: While the USD stronger theme has very strong backing, nothing beats the long Gold one: bulls outnumbered bears by more than 5 to 1. With breakevens rising and trade/currency wars brewing, Gold is the ultimate safe haven.

4. China Rebound: Investors continue to have rather bullish China equity views, buoyed both by fiscal support and the local AI story. With the USD stronger theme persisting and China rates at decade lows, shorting the RMB is the favorite pair trade against the long China equities.

5. Next phase in AI: DeepSeek, combined with cloud revenue misses, punctured a tire in the AI investment thesis: capital may be no moat after all, and maybe a liability… Investors are still positive on aggregate. But ROI prospects are a growing concern (cited by 44% as the biggest risk to the AI trade) and investors are being more selective about which subsectors would benefit the most. With roughly half of respondents planning to rebalance from Mag 7 positions into defensives or international stocks (49%), the theme is normalizing. (Here is a 15min mark-to-market on sentiment and positioning for this theme).

6. Oil bearishness: Finally, investors seems to be rallying around the bearish oil view. This is actually one of the most bearish levels in our 8-year history…

7. Bitcoin institutionalization: The days of institutional investors not getting anywhere close to crypto are definitely over. It’s now fully investable and the creation of the US sovereign wealth fund may be the next catalyst…

Ostlund also provided clients with the survey results of 768 institutional investors conducted last week. The results show how smart money is mostly focused on geopolitical events.

Looking ahead to the next big geopol event… Read this: “Trump Says Hamas Must Free All Hostages By Saturday Noontime Or ‘All Hell Will Break Loose’.”

The Sarandí stream that winds through the dense outskirts of Buenos Aires, Argentina, has recently turned blood red, leading to fears of a potential industrial chemical leak. 

Local authorities are investigating the stream’s change in color following initial reports on Feb. 6.

Located near Villa Inflamable in Avellaneda, 9 miles south of the Argentine capital, Jacob Burg reports for The Epoch Times that the stream runs alongside tanneries and other industries that use chemicals to turn animal skins into leather. Residents quickly uploaded photos of the crimson stream to social media, spurring fears of the cause of the color change.

One local resident recounted waking early one morning and smelling strong odors.

“At 5:30 a.m., we already had a special and hazardous waste incinerator spewing pollutants into the air,” María Ducomls told The Associated Press. Shortly after she saw the stream, she said, “It looks like a stream of blood; we have never seen it like this.”

The stream flows into the Río de la Plata, a large body of water between Uruguay and Argentina.

Avellaneda officials believe there may be aniline in the stream’s water, a toxic substance used in medicines and dyes.

After officials took water samples, they filed a complaint with the Buenos Aires province Ministry of Infrastructure and Public Services, which will investigate the incident.

According to local residents, the stream has changed to different colors in the past, including gray, green, violet, blue, and brown, sometimes with an oily surface. These reports have led to complaints filed against local businesses since the 1990s. Some cases alleging environmental contamination are still open.

The Province of Buenos Aires’ environmental ministry said in a statement that it had responded on Feb. 6 to a report about the stream’s color change and that it had taken water samples for testing.

Other rivers in the area have faced similar environmental issues. The Matanza-Riachuelo River basin has been named one of Latin America’s most polluted waterways, leading to officials planning public works projects to prevent the dumping of sewage and industrial discharge into the basin.

By Charles Kennedy of OilPrice.com

Amid cold winter weather and fast-depleting inventories, Europe’s natural gas prices jumped on Monday to a two-year high to levels of over $100 per barrel oil equivalent, which now makes burning oil for industrial use more cost-effective.

Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, surged by 4% in Amsterdam on Monday, to the highest level since February 2023. The first proper winter in Europe with prolonged periods of cold snaps since the 2022 energy crisis is depleting the EU stockpiles of natural gas, which have dropped to the lowest level since the crisis for this time of the year.

As a result, European prices are rallying, and with most of Europe now relying on LNG imports for its natural gas supply, it has recently become more efficient for industries to burn oil and coal – wherever possible – as they are cheaper feedstocks than gas right now.

“We have already seen increased gas-to-fuel oil switching and gas-to-gasoil is next,” said Eugene Lindell, head of refined products at consultancy FGE. “This is one of the pillars of gasoil strength right now.”

The gas-to-oil switch could boost oil demand in Europe, and also in Asia, in the first quarter, potentially giving more room and reason for OPEC+ to return more barrels to the market.

The high natural gas price is a bullish tailwind for oil, Bjarne Schieldrop, Chief Analyst Commodities at SEB bank, said in a note on Monday.

Even 10ppm diesel is now cheaper than natural gas. Consumers of natural gas all over the world will now opt for any kind of oil product rather than gas if their natural gas price is set by in the LNG market, Schieldrop said.

“Europe and Asia will all lean towards consuming more oil and more coal if they in any way can do so.”

The surge in European natural gas prices comes as storage levels are tightening faster than in the past two years.

Stockpiles are already at their lowest for this time of year since 2022, according to ING analysts.

“Inventories are only 49% full compared with 67% at the same time last year,” ING’s commodities strategists Warren Patterson and Ewa Manthey said.

Several bombshell claims were made on Tucker Carlson’s show while he interviewed Lt. Col. Daniel Davis, a retired United States Army officer who was awarded a Bronze Star for valor in Afghanistan.

Carlson stated that billions of dollars’ worth of US arms are being siphoned off and sold to America’s enemies. While the black market arms trade in Ukraine during the war has long been documented, including in mainstream media sources, Carlson and his guest Col. Davis agreed that many weapons have made it into the hands of Mexican drug cartels, among other criminal organizations.

Ukraine receives American weapons, they are skimmed by Ukrainian military officials, who then sell them to the cartels, the show asserted.

“They sell weapons to drug cartels… the fact is that the Ukrainian military sells a huge percentage, up to half of the weapons we send them. And this is not my guess. This is a fact. Not speculation. They sell it, and a lot of it ends up with drug cartels on our border. So this is a crime,” Carlson said, quoted by RIA Novosti.

“They’re selling it, and a lot of it winds up with the drug cartels on our border,” he also said.

Tucker Carlson EXPOSES a major scandal:

Up to 50% of U.S. weapons sent to Ukraine are being resold on the black market—some ending up with Mexican drug cartels.

Not only is this wasting billions in U.S. tax dollars, but it’s also arming criminals at our border. pic.twitter.com/RBL4jeyCzw

— Libs of TikTok (@libsoftiktok) February 10, 2025

However, the claim has come under fire and much scrutiny online, particularly the statement that “half” of all US-provided arms end up with the cartels, given no particular evidence for this was presented in the show.

Given many tens of billions worth of US and Western arms have been sent over the nearly 3-year course of the Ukraine war, this would be an immense amount of weaponry requiring large military transport planes or else steady streams of trucks going back across Ukraine’s border to foreign destinations. This level of illicit arms trade would require immense logistics and would be incredibly difficult to conceal. Carlson suggested CIA assistance or profiting from the scheme, however.

But certainly it’s easy enough to believe that at least some quantities of black market US-provided arms or ammo have gone from Ukraine into an array of criminal networks worldwide, including possibly to the Mexican cartels just south of the US border.

The Blaze has meanwhile reviewed of the Ukraine to Mexico arms pipeline reporting as follows:

However, multiple reports have denied that this was evidence of any nefarious use of the money. Outlet Voice of America painted the claim as Russian propaganda, while PolitiFact claimed any accusations were based on a misunderstanding of how the aid has been distributed.

At the same time, a June 2024 study by Harvard said it was “highly likely that some weapons will go missing over the course of the conflict” but admitted it would be hard to prove the extent of which illicit weapons were being sold.

Harvard, too, stated that sales of arms to sources like “Finnish gangsters, French rioters, Nigerian fighters, and Mexican cartels” were debunked as “Russian propaganda” and cited a report from the Global Initiatives Against Transnational Organized Crime as evidence.

Watch the full interview here:

The Ukrainian military is selling American weapons systems on the black market, including to drug cartels. This war is killing the United States. Col. Daniel Davis on how Donald Trump can end it.

(0:00) Why Crimea Is So Pivotal
(13:17) Ukraine Is Powerless Without the US
(31:16)… pic.twitter.com/PgL3og9lTE

— Tucker Carlson (@TuckerCarlson) February 10, 2025

In 2023, the Pentagon’s Office of Defense Cooperation-Kyiv admitted after conducting an investigation that it “was unable to conduct required [end-use monitoring] of military equipment that the United States provided to Ukraine in FY 2022.”

“The inability of DoD personnel to visit areas where equipment provided to Ukraine was being used or stored significantly hampered ODC-Kyiv’s ability to execute” the monitoring, the report stated. Reports have since shown that the lack of monitoring and tracking situation has grown even worse since then.

Submitted by Preston Byrne

Friday’s edition of the Washington Post reveals that the United Kingdom has served Apple with a secret order, a so-called capability notice under the Investigatory Powers Act 2016, demanding that Apple create a backdoor to its encrypted cloud storage systems that would permit access on-demand by UK government officials.

The Post also reports that, in response, Apple is likely to withdraw its services from the UK rather than comply. Apple told Parliament, in March of last year, that “[t]here is no reason why the U.K. should have the authority to decide for the citizens of the world whether they can avail themselves of the proven security benefits that flow from end-to-end encryption.”

Those of us with an English law education will recall Sir Ivor Jennings’ famous quip – “if Parliament enacts that smoking in the streets of Paris is an offence, then it is an offence” – as an illustration of the theoretically absolute power of the King-in-Parliament.

Our world is a very different place than Sir Ivor’s: for, when Apple turns off its services in the UK in defiance of a Home Office capability order, it may violate British rules, it will also undermine British authority. The streets of Paris are hundreds of miles away; the Internet is at our fingertips and, if formally blocked by the government, informally accessible via VPN.

So far, UK politicians have not appeared to have the stomach to regulate VPNs; by attempting to legislate over that which they do not control, they risk weakening public faith in the law.

This is the latest in a long line of proto-totalitarian conduct emanating from the UK’s security services with which the Americans are growing increasingly impatient. Nor is the Investigatory Powers Act the only law on the UK’s books which threatens global companies with fines, or worse, if they fail to act as the UK security state’s proxy arm. Popular U.S. encryption company Signal said in 2023 that if the content moderation requirements of the Online Safety Act – with which Signal necessarily cannot comply because it is end-to-end encrypted – required it to decrypt messages to carry out the mandatory content-policing functions called for by the law, Signal would “absolutely 100% walk” away from the United Kingdom rather than obey.

Similarly, the UK’s official broadsides against social media companies in the wake of the Southport riots, and arrests of social media users, were pilloried by millions of social media users in America, and regarded with considerable suspicion by the US tech industry. Considering that preeminent tech VC Marc Andreessen has been a vocal opponent of online censorship, both in the US and in the UK, it is not a stretch to think that Andreessen Horowitz’s closure of its UK office two weeks ago – effectively that firm saying that the UK is an uninvestable country – is related to the UK’s heavy-handed approach to political freedoms on the Internet.

The UK has not, as yet, attempted to wield the Online Safety Act quite that aggressively. Given that a Labour government is in power – and, as Labour’s leaders come neither from the technology sector nor global business, they do not understand what leverage they truly have in either domain  –  I am confident that, at some point, they will attempt to do so.

The inescapable reality they will face at that juncture is that tech capital is highly mobile, as the ASI has shown in recent research showing that millionaires are leaving the country in droves, and that the UK is not an especially large digital market compared to the United States or even compared to the neighboring EU. If the UK government’s feature requests are likely to scare off users in these larger jurisdictions, companies are likely to jettison UK business, and their executives likely to avoid traveling through Heathrow, before they will comply with orders that compromise their users’ freedoms or their privacy.

If Kamala Harris had won the U.S. election in November, we would doubtlessly be looking at a very different playing field for UK Internet regulators. The Biden Administration was highly sympathetic to technology companies who were willing to censor their users for traditionally left-coded political ends, as was revealed in the Twitter Files disclosures by Matt Taibbi and Mike Shellenberger after Elon Musk’s acquisition of that website. We also now know that government funding was used to fund counter-disinformation and pro-U.S. propaganda apparatuses abroad, including efforts to study how to censor U.S.-based platforms and their users under the guise of academic research.

There is new management in America, however, and the extent to which taxpayer dollars were deployed for use in partisan political fights was so offensive to the incoming administration that they are planning immediate reductions-in-force of up to 70%. Entire agencies, like USAID, the Department of Education, and possibly many others, have been deemed too politicized to be worth saving – and are being deleted wholesale.

Put differently, the permanent bureaucracy in the United States which might otherwise have helped the UK apply informal pressure on Americans who dared to disobey its decryption and censorship edicts – none of which, it bears mentioning, are enforceable against an American who refuses them and is happy to avoid setting foot in British territory – is gone.

If the UK chooses to be the worst place for an AI company, or a social media company, or a digital asset company to incorporate and do business, it will find that it has very few such companies. Regardless of your opinions on how British society should be structured, the NHS, immigration, or the appropriate quantum of social welfare, if you don’t have high tech employers generating revenues and paying taxes, social programs become very difficult to pay for.

If the United Kingdom wants to be a technology backwater, that is its choice. I am not optimistic that decades of bad policy, practically all of which was enacted by the Conservatives, can be reversed, even where it is patently obvious that these policies will be rather straightforwardly ignored, either by companies throwing these orders in the trash can when received in the post in America, or by simply cutting off their world-beating tech security services to UK nationals.

Either outcome is a terrible result for the British people, as it leaves the entire UK more vulnerable to scammers, criminals, and foreign adversaries than they otherwise would be – not because of corporate disobedience, but because the only services UK nationals will have access to will be ones which compromise user security and safety for the sake of British politics, something all of the best companies will be unwilling to do.

Those of us who have been around for a minute recall the brief moment between 2019 and 2021 when there was a broad consensus across the leaders of the western world that the Internet needed to be censored for public safety reasons. That moment has passed, and the biggest market in the world – the United States – is now charting a different course.

The UK’s tech sector is smaller, slower, and less well-funded than America’s – for very easy-to-understand reasons. If it wants to compete with America, it has to become more American than America. This is something the Conservatives broke and, based on their current policy platform, have no desire to fix. The only question is who will change the UK’s posture on tech regulation – Reform or Labour – and whether they’ll be able to get the changes done in time to avoid being left floundering in America’s wake.

The Russian government has confirmed that hundreds of its wounded soldiers have been taken from the battlefield in Ukraine and Kursk and are being treated in North Korean hospitals.

Russia’s ambassador in Pyongyang Alexander Matsegora said in an interview published Sunday, “The treatment, the care, the food – everything related to staying in North Korea was absolutely free.”

“When we offered to compensate our [North Korean] friends for at least part of their expenses, they were genuinely offended and asked us never to do it again,” Matsegora added.

This is yet another sign of deepened cooperation between Moscow and Pyongyang following Putin and Kim Jong Un signing a defense pact last summer, which has seen North Korea reportedly send some 10,000 of its troops to assist in helping Russia regain its southern Kursk territory.

The two countries actually share a tiny border in the far east, comprising about 11 miles of terrestrial border and 12 nautical miles of maritime border. Oil, guns, artillery, and missiles have been exchanged by rail – a trend which has greatly alarmed Washington and the West.

Last month Ukraine claimed that North Korean troops had been withdrawn or “disappeared” from the front lines in Kursk, but on Friday President Zelensky described the Russian army had “brought back in North Korean soldiers” who were carrying out “new assaults” in the region. Ukraine has partially occupied Kursk for over six months, since last August.

Zelensky claimed in the address that “hundreds of Russian and North Korean military” personnel had been “destroyed”. Western intelligence officials have claimed that at least 1,000 DPRK troops had been killed since being introduced on the battlefield.

Reports in The Guardian and other Western outlets have offered some anecdotal and eyewitness evidence of significant amounts of North Koreans being treated for injuries in Kursk:

At dusk one afternoon last week, two dozen wounded North Korean soldiers were brought to one of the main hospitals in the Russian city of Kursk.

They were ushered into a specially designated floor, guarded by police, with access limited to translators and medical personnel.

“We were told in the morning to prepare for a special type of patient,” said one of the medical staff at the hospital who treated North Koreans.

“We’d heard rumours that North Koreans were fighting there, but I didn’t believe it. No one had actually seen them before,” the medic said. “I thought it was all fake news until they arrived,” the medic said, adding that most of them had shrapnel injuries.

A second medic at the scene said communication with the North Koreans was “impossible” without translators. They added that some North Koreans looked “frightened and nervous”.

On the battlefield itself, Russian units have complained about lack of easy communication with their North Korean allies, which has led to confusion and inefficiency.

North Korea uses Ukraine as a testing ground for its missiles,”
South Korea’s representative to the UN said……😂 pic.twitter.com/dXsjISP5uI

— Zlatti71 (@Zlatti_71) January 10, 2024

It’s expected that Russia and North Korea will continue cooperating on multiple levels. For example, regional media recalls the following:

Matsegora also said that orphans of Russian soldiers killed in Ukraine were hosted at the Songdowon International Children’s Camp in North Korea last summer. Russian President Vladimir Putin personally thanked “comrade” Kim Jong Un for organizing the children’s stay during his visit to Pyongyang in June.

Both countries are of course nuclear-armed, as well as highly sanctioned by the West. President Trump has lately said he’s committed to seeing de-nuclearization on the Korean peninsula, but there’s yet to be any real diplomatic breakthrough on the level of the face-to-face meetings with Kim during his first term in office.

Pyongyang’s role in the Ukraine conflict has certainly complicated the potential for renewing dialogue with Trump, but the pressure could lessen if Trump-sponsored peace talks between Moscow and Kiev actually get off the ground.