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Trump Shares Bizarre AI Video Of Future Gaza: ‘No More Tunnels, No More Fear’

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Trump Shares Bizarre AI Video Of Future Gaza: ‘No More Tunnels, No More Fear’

President Trump shared a wild video showing his vision for the future of the Gaza Strip on Wednesday morning. The AI video, sure to be ultra-controversial, depicts a future “Riviera of the Middle East” after Palestinians are presumably expelled from the Strip. The clip on his Truth Social platform was not accompanied by specific comments but is titled “Gaza 2025, What’s Next?”

The clip was initially created and appeared on other social media in early February. It kicks off showing people wandering through a decimated Gaza Strip, but then the scene transforms into skyscrapers and a luxury beach resort complete with palm trees and tourists relaxing. The fast-moving images depict a party atmosphere, in stark contrast to years of grinding war between Hamas and Israel.

Even more bizarre is a later scene with bearded belly dancers on the beach. Sporting green headbands, the dancers appear to be mocking Hamas fighters. Elon Musk also is shown enjoying some hummus, and “Trump” is dancing in a nightclub in a tower with the inscription “Trump Gaza”. Netanyahu is at one point depicted as sipping beverages near a swimming pool with Trump. “Donald Trump will set you free, bringing the life for all to see, no more tunnels, no more fear, Trump’s Gaza is finally here,” a song rings out in the background. “Trump’s Gaza is shining bright, golden future, a brand new life,” the lyrics continue. “Feast and dance; the deed is done. Trump Gaza number one.” Watch the crazy and highly incendiary AI-generated clip below:

Tyler Durden
Wed, 02/26/2025 – 18:00

The #1 Warning Sign Capital Controls Are Coming Soon And 3 Ways To Beat Them

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The #1 Warning Sign Capital Controls Are Coming Soon And 3 Ways To Beat Them

Authored by Nick Giambruno via InternationalMan.com,

Weekends and holidays are the perfect time to catch people off guard…

Like a street thug committing a mugging, capital controls blindside most people—otherwise, they wouldn’t be effective.

The government declares a surprise bank holiday and shuts down all the banks—mere hours after denying any such plans.

Then come the capital controls, preventing citizens from moving their money out of the country.

Cash-sniffing dogs—less friendly than drug-sniffing ones—suddenly appear at airports and border crossings.

At that point, your money is like a lobster in a trap. It doesn’t take much imagination to guess what comes next.

Once a desperate government has your money within reach, it will find a way to take as much of it as possible.

Don’t be shocked if your local currency suffers a massive devaluation, your bank deposits are suddenly worth a fraction of yesterday’s value, or an emergency tax is imposed.

Whatever the method or excuse, the outcome is always the same: a wealth transfer from you to the government.

This familiar pattern has unfolded in countless countries in recent years. No one should be surprised the next time it happens.

Governments facing financial trouble almost certainly resort to capital controls—a desperate, misguided solution with devastating consequences for ordinary people.

Just look at the recent history: Argentina, Lebanon, Venezuela, Iceland, Greece, Cyprus, Turkey, Russia, Ukraine, China, India, South Korea—and many more—have all imposed capital controls.

The lesson? Capital controls can happen anywhere, anytime.

Though unthinkable to most Americans, there’s a high chance they’re coming to the US. They’ve happened before—and could happen again soon.

Remember, in 1933, President Roosevelt’s Executive Order 6102 forced Americans to exchange their gold for US dollars under threat of a 10-year prison sentence and a $10,000 fine (over $235,000 in today’s debased confetti).

The official exchange rate? Unfavorable, of course—amounting to a 41% confiscation of purchasing power.

The US government then banned private ownership of gold bullion for 42 years—only allowing the plebs to legally own it again in 1975.

This isn’t speculation. It’s historical precedent. And history shows governments, especially in crisis, reach for capital controls.

Today, it’s clear the fiat currency system, centered on the US dollar, is crumbling.

Since Nixon severed the dollar’s last tie to gold in 1971, we’ve endured over 50 years of this experiment. Like spoiled milk left far past its expiration date, the fiat system has long outlived its shelf life.

Even the people running the system can see it—and they’re openly discussing what comes next.

That’s why there’s so much talk about resetting the monetary system… and without question, capital controls will be part of it.

All it takes is a crisis—real or manufactured—or a convenient excuse. Just a stroke of the president’s pen on a new executive order, and it’s done.

Expect it to happen.

Why and How Governments Impose Capital Controls

Capital controls are government-imposed restrictions on how people can use their money—an affront to anyone who values property rights and a free society.

Here’s how they work…

Governments may allow people to buy foreign currency (or gold) only at an “official” rate—which they set. Unsurprisingly, it’s always less favorable than the real, free-market rate. The gap between the two is nothing more than a wealth transfer to the government.

Another common tactic? Hefty taxes on international money transfers or foreign asset purchases.

Sometimes, governments go further—outright banning ownership of foreign assets or prohibiting any transfer of wealth outside the country.

No matter the form, capital controls share one goal: trap money within national borders to make it easier for the government to seize.

Of course, these measures come with a propaganda blitz designed to gaslight the public into believing capital controls are “necessary” to protect the average citizen.

Expect politicians to spin disingenuous narratives that cast them as saviors rather than aggressors.

And the mainstream media? They’ll echo these lies, demonizing anyone who dares oppose capital controls as “disloyal” or worse.

What Happens After Capital Controls

Capital controls are always a prelude to something worse.

Once governments trap money inside a country, wealth confiscation is usually just hours away. Anything they don’t steal immediately, they lock in for future grabs.

That’s why you must act before capital controls are imposed.

How much time do you have?

No one can say for sure—but acting well in advance is essential. It’s better to be a year early than a minute late.

Still, there’s one common warning sign I’ve noticed in every case of looming capital controls: It’s like someone waving a giant red flag…

A government official denying that capital controls are being considered.

Whenever a central banker or politician insists something “won’t happen,” you can almost bet it will—and soon.

In bureaucrat-speak, “No, of course not” usually means “It could happen tomorrow.”

As the old saying goes:

“Believe nothing until it has been officially denied.”

These denials aren’t random—they’re calculated. Politicians and central bankers must catch the public off guard to achieve their goals.

So when you hear the official denial, take it as your final warning: You likely have only hours left to act.

Three Ways To Beat Capital Controls

The solution is simple.

Move some of your savings outside your home country so it’s not trapped when the government imposes capital controls. You’ll have your wealth safely waiting for you on the other side.

Here are three practical ways to do that:

1. Open a foreign bank account.
Capital controls in your home country are unlikely to affect accounts held abroad. A foreign bank account ensures a portion of your wealth remains outside the reach of local authorities.

2. Invest in foreign real estate.
Real estate overseas is a powerful way to store significant capital. Your home government can’t easily seize property in another country—not without drastic measures, like an act of war.

3. Hold physical gold bullion in a non-bank vault abroad.
Storing gold in a wealth-friendly foreign jurisdiction—like Singapore, Switzerland, or the Cayman Islands—offers robust protection.

But here’s a critical warning: Do NOT store gold in a bank’s safe deposit box. Banks are prime targets when governments declare bank holidays or seize private assets. Instead, opt for private, non-bank vaults. Holding physical bullion in your possession or with a trusted vault provider ensures better security. (More details below.)

Conclusion

The dollar-based monetary system is unraveling—even the people running it know this.

They’re already preparing for what’s next with talks of a “reset.” And it’s virtually certain that capital controls will be part of the plan.

I believe this could unfold sooner than most expect—and when it does, it won’t be pretty.

We’re likely standing at the edge of a historic financial earthquake—one that could forever alter the US economy and become the biggest economic event of our lifetimes.

Yet, most people are clueless about what’s coming—and even fewer know how to prepare.

That’s why legendary investor Doug Casey and I released an urgent video revealing how to best store your gold.

Inside, we show you the most effective strategies to safeguard your savings from capital controls and looming wealth confiscations.

Capital controls are coming. Don’t be caught off guard. Click here to watch it now.

Tyler Durden
Wed, 02/26/2025 – 17:40

Not A Joke: Jake Tapper Writes Book On ‘Cover-Up’ Of Biden’s Cognitive Decline – After Covering Up Biden’s Cognitive Decline

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Not A Joke: Jake Tapper Writes Book On ‘Cover-Up’ Of Biden’s Cognitive Decline – After Covering Up Biden’s Cognitive Decline

For some reason CNN anchor Jake Tapper thought it would be a good idea to write a book on how the media covered for Joe Biden’s obvious mental decline – after he spent the last election covering for Joe Biden’s mental decline.

Except…

In 2021, former Obama White House physician Ronny Jackson said that the reason Biden had been avoiding cognitive exams is that he would have “failed miserably,” and that his team “didn’t do it because they know, if they do it, you don’t ask questions that you don’t want the answers to.”

In 2020 Biden was asked whether he would submit to a cognitive test, sending him into a rage: “C’mon man. That’s like saying, ‘You — before you got on this program you took a test where you’re taking cocaine or not, what do you think? Huh? Are you a junkie?” he replied.

Tyler Durden
Wed, 02/26/2025 – 17:20

The Party Is Over

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The Party Is Over

Authored by Jeffrey Tucker via The Brownstone Institute,

The Trump administration, pushed by the Department of Government Efficiency and deployed by the Office of Personnel Management, has sent another email to all federal employees with a normal request to present five tasks accomplished in the last week. 

It’s an easy task. It takes 5 minutes. In the service industry, this is entirely normal, even routine. Taking inventory of the workforce is standard for any new management in the private sector. 

Oddly, absolute mania broke out among the pundit class. Government unions are preparing lawsuits. The panic and frenzy is palpable. As it turns out, no new president has ever done anything like this before, no Democrat who believes in good government and no Republican who supposedly distrusts bureaucracy. 

Something dramatic has hit Washington. It’s about more than Trump. 

The party now in control of the US executive branch is a third party built out of the corpses of two existing parties. It goes by the name Republican but this is nearly a historical accident. The GOP was a vessel that was least protected against invasion and occupation. It has now been nearly taken over by outsiders who had little or no influence within the party a decade ago. 

Nearly all the top people now in power – including Trump of course but also Musk, Gabbard, Kennedy, Lutnick, and so many more, to say nothing of the voters themselves – are refugees from the Democratic Party. Coalitions have dramatically changed. Voting blocs have migrated. And policy debates and priorities are nothing like they have been in any period since the end of the Great War. 

The occupiers left a Democratic Party that was and is busy consuming itself with Rousseauian frenzies on issues about which most people do not care or are otherwise completely opposed. The legacy establishment of the Republican Party, however, never welcomed them in. They were hated and resisted at every step. 

The Kennedy Migration 

To understand the remarkable speed and trajectory of this creation of a third party within the structure of two, consider that it was not even two years ago when Robert F. Kennedy, Jr., was first contemplating running for president as a Democrat.

The conditions were unique. He had gained an enormous following for his courage during Covid, standing up against the lockdowns, speaking out against the censorship and rights violations, and then decrying the imposition of shots that achieved nothing for public health. 

In 2023, President Biden was unpopular and not even credible as the chief executive, much less as a candidate for a second term. The thinking in the Kennedy camp at the time was that a run by Kennedy for the Democratic nomination would force an open primary and he could lead the party back to its roots, away from woke totalitarianism toward the political values of his father and uncle. 

In theory, all of this seemed plausible. His first rallies were crowded events, and the money poured in. Volunteers were signing up to work for the campaign. The first ads that appeared were nostalgic of a lost time, an America before the shattering of civic culture that came with the assassination of his uncle in 1963. The framing and even music of his campaign reflected such themes. 

If anyone could fix the Democrats, it was surely Kennedy with a lifetime of activism and experience in litigation against corporate capture of agencies, plus a recent campaign for human rights and free speech. The presumption here was that the Democrats had some base of support that still supported such values. And maybe that was right but his intentions ran headlong into the machinery of party leadership. 

His intention was to challenge Trump for the presidency, and the basis of the challenge was rather obvious. It was, after all, under Trump’s watch that the lockdowns began and the legal apparatus that led to the dangerous shots was deployed. It was Trump who kicked off the economic crisis with wave after wave of stimulus payments plus monetary expansion. As an empirical matter, he had presided over the worst invasion of rights of any president in history. 

That’s where matters stood only two years ago. When it became obvious that there would be no open primary, Kennedy was tempted by the lure of an independent run. The most immediate problem of gaining ballot access hit hard. The system, after all, is set up for two parties only and they want no competition unless such an effort works as a spoiler. That was not obvious with Kennedy – he drew equally from both sides – so everyone with power wanted him excluded. 

The other problem traces to the undeniable logic of winner-take-all elections. Under Duverger’s law, such contests tend to default to two choices only. This logic applies not just to politics but to all systems of voting. If you offer guests at a party the chance to vote on dinner, but the majority will prevail over the minority, everyone will immediately shift from voting for what they like toward voting against the food they hate the most. 

For some reason, this pattern of strategic voting is hardly mentioned in polite company but it is a reality in US politics. Voters select against the candidate they fear the most and for the person they believe can win to forestall the worst possible outcome. In the Kennedy case, then, it meant that no matter how much people loved him, they would end up supporting either Biden or Trump regardless. 

It so happened that over the summer, this logic was pressing itself heavily on the Kennedy campaign even as Trump faced astonishing levels of deep-state lawfare plus an assassination attempt, which conjured up deep family trauma in Kennedy. This provoked some discussions between the two that resulted in a historic realignment in politics. 

During these discussions, Trump was frank about what happened during the Covid period. He had been lied to by his bureaucracy, the experts who had been assigned to him to say that this virus was a bioweapon with possible cure in the form of a new vaccine. With great reluctance and only for a limited time did he approve what everyone, including family members and conservative pundits, was telling him to do. 

As for Warp Speed, Trump had always considered it to be an aggressive push for a solution. International and domestic sources named Hydroxychloroquine as a workable therapeutic, and so he ordered it for mass distribution. 

It was essentially inconceivable in those days that the deeper bureaucracy would not only remove it and other repurposed drugs from distribution but even generate fake studies warning against them, all in an effort to push the new pharmaceutical product. Trump was surely astonished to see these events unfold in a manner that he could not control. 

In that connection, both Trump and RFK, Jr. agreed on the dangers to American health from a variety of sources, including that emanating from the overuse of pharmaceuticals. Trump learned from Kennedy’s expertise on this matter, and they experienced a meeting of minds. And not only on this but on the evils of captured agencies, censorship, and deep state manipulation of public culture in general. 

They would never agree on issues of oil and gas, of course, but on that topic too Kennedy had been moved by the Covid years to reconsider the supposed science behind climate change, especially that which recommended more human suffering as a means of solving a supposed existential threat. 

We may never know the fullness of what took place over those two days but the discussions changed history, bringing together two mighty forces in American culture that had long been separated by party label and tribal identity: bourgeois nationalism vs. the haut bourgeois crunchy liberalism of the Whole Foods set. As it turned out, they had a common enemy. 

Now Kennedy is the new head of Health and Human Services under the Trump administration, which is now undertaking the largest attempt at routing the DC establishment since Andrew Jackson. His goal is to turn around the whole ship of state, industry, and science, away from fakery and industrial corruption emanating from a single focus on infectious disease toward a new focus on chronic disease with science-based and natural solutions. That is a herculean task. 

The Musk Migration 

Elon Musk is the third force within this leadership triumvirate of the new party. Before 2020, he was a politically conventional investor and entrepreneur. Mostly he associated with the default party of the elites, the Democrats. Then lockdowns came. He was the only major corporate leader in the US and probably anywhere in the industrialized world who publicly stood up in protest. He said he would sooner sleep on the floor of his factory than close it. He refused vaccine mandates in all his companies. He pulled Tesla out of California and moved it to Texas. He moved all his corporate registrations out of Delaware. 

By 2023, he was a changed man, newly aware of the threat of Leviathan, and did a deep dive into anti-statist literature. He faced his own family battles over woke ideology, and this made his intellectual transformation complete. He entered the political season with a new consciousness. Whereas he once regarded the bureaucracy as annoyingly necessary, he increasingly viewed it as the source of unchecked tyranny. 

At one level, the meetup of Trump and Musk – like the meetup of Trump and Kennedy – was completely implausible. Musk regarded his greatest achievement as a businessman as having made the most mighty contribution to clean energy yet, having broken up the automotive monopoly and mass-produced the first commercially viable electric car. Trump, on the other hand, had sworn to smash electric car subsidies and called for deregulation of oil and gas. To link up with Trump meant having to put at risk even the tax break for consumers of EVs. 

But he was ready for that simply because, like Kennedy, he became convinced that Western civilization itself was at risk from a woke Leviathan that had shown its teeth in the most brutal way during the Covid years. His reason for purchasing Twitter for $44 billion was to bust up the censorship cartel that was constructed to enforce lockdowns and promote the vaccine. Once having taken over, he discovered the extent of government control, uprooted it, and unleashed free speech on the US. 

Here again, Musk shared this concern with Kennedy and Trump. All three linked up on the crucial issues: the desperate need to curb and crush the power and reach of the administrative state. This is an issue that crosses left and right, Democrat and Republican, liberal and conservative, and all other traditional categories. 

The Gabbard Migration 

In this connection, there was also the national security angle in which decades of neoconservative “forever wars” had bred resentment and failure abroad, thus bringing over the articulate Tulsi Gabbard from the Democrats to Trump’s side, together with other influencers like Pete Hegseth who saw traditional military concerns having given way to woke ideology that Musk despised and Kennedy found to be deeply corrupting of traditional liberal concerns. 

Their interests dovetailed with the revolt against globalism generally, which had taken the form of endless unwinnable wars, unchecked spigots of foreign aid, taxpayer pillaging in the form of subsidies to international syndicates of NGOs and agencies, plus the cruel deployment of immigration as a tool of electoral manipulation. It was the immigration point that triggered the populist push for the new nationalism that gathered in new refugees from the antiwar sectors of the left and right. 

Donald Trump himself has undergone his own migration. An industrial mercantilist from his earliest public statements, he gradually absorbed a de facto anti-statism once his ill-fated first term was subverted from within and then he faced unprecedented lawfare and even assassination attempts to stop his second term. When he told the Libertarian Party that this lawfare made him a libertarian in spirit, he was being truthful. Once it became personal, the new head of state effectively turned against the state and all its works. 

These are all circuitous paths but they reached the point of having huge influence over the public mind in the wake of the Covid years that discredited existing elites and prepared the way for a completely new way of going about government and public life. Given the meme culture of our time, this new party went by various names, first MAGA and then MAHA and then DOGE (in homage to the meme coin that started as a joke and then became real). 

MAGA/MAHA/DOGE is not exactly the catchiest name for the new ruling party but it is far more accurate than Republican, much less Democrat. It is a new party formed out of the discredited shells of the two existing parties that lost public trust over decades of misrule culminating in an ill-fated attempt to master the exigencies of the microbial kingdom. 

In a Kuhnian sense, the collapse of the orthodox paradigm (rule by administrative agencies informed by captured science) was complete by 2023, preparing the way for the pre-paradigmatic coalition of these fascinating characters, backed by popular movements that are mirrored in many lands, and generally sailing under the flag of populism. And here is the crucial fact: these leaders have their reach, influence, and power because the causes they represent have come of age with a population completely fed up with misrule by experts. 

These are new and highly promising times, as the old undergoes a merciful dismantling and something entirely new takes its place. We find the roots of the ideology of the administrative state in the works of Woodrow Wilson, and it takes only a few minutes of reading his deluded fantasies of how science and compulsion would forge a better world to see that it was only a matter of time before the whole experiment was in tatters. 

It took more than a century but that day is finally here. The paradigm has shifted. For all the messiness and frenzy – including the chaos, confusion, and betrayals – our times at least present opportunity to reassert a foundational principle of the Enlightenment; namely that the people themselves should have some fluid and influential role in shaping the workings of the regime under which they are forced to live. 

Tyler Durden
Wed, 02/26/2025 – 17:00

Nvidia Blows Away Expectations As It Sells “Billions” Of Blackwell Chips, Stock Goes Nowhere

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Nvidia Blows Away Expectations As It Sells “Billions” Of Blackwell Chips, Stock Goes Nowhere

As we previewed earlier, while expectations were still lofty, investor euphoria going into Nvidia’s fourth quarter results was far more subdued than in 2023 and 2024 (with positioning a modest 7 out of 10) according to Goldman. Not only that, but the bank warned that investors were positioned bearish into the result, suggesting that the company would not need to beat by a whole lot to trigger a stock or gamma squeeze.

As Bloomberg notes, for Nvidia over the past two years consensus numbers have mattered less than they generally do because the company has regularly beaten average Wall Street estimates by more than 20%. Anything less than a blowout has been considered disappointing. Case in point: The highest estimate for first-quarter revenue is for more than $47 billion. Still sentiment is much more cautious than just a quarter or two prior: Nvidia shares are in an interesting place ahead of its earnings report. It’s the first time since 2022 that shares have declined since the company’s latest report, and the options-implied move of 9.9% in either direction is the biggest anticipated swing in roughly the same time frame. What’s more, shares are down year-to-date — like most stocks in the Magnificent Seven — and have not yet recouped all of the losses from the January rout set off by DeepSeek.

Still, Nvidia is almost certain to meet fiscal 4Q revenue guidance and raise 1Q’s outlook amid a significant ramp up in its Blackwell GPUs, having overcome supply-chain delays and concern about hyperscaler demand in the wake of DeepSeek, according to a note by Kunjan Sobhani, a Bloomberg Intelligence technology analyst. 

“Increased capital spending guidance from Meta, Microsoft, Amazon Web Services and Google aids our confidence in near-term sales,” Sobhani said adding that “fundamentally the print and guidance should again be solid and most likely beat” analysts’ estimates. Key point of interest will be on whether 1H is likely to show strong growth or a pocket of slowdown between the Hopper and Blackwell transition.”

One number to keep an eye out for is the percentage of revenue that Nvidia gets from a small group of customers –- so-called hyperscalers – which includes Microsoft, Amazon and Alphabet Inc.’s Google. Last quarter, they accounted for more than half of of Nvidia’s data-center revenue, up from 45% in the prior period. Investors want that number to go down, to show that the use of AI is spreading across the economy.

With all that in mind, here is what Nvidia just reported for Q4:

  • Adjusted EPS 89c, beating estimate 84c
     
  • Revenue $39.33 billion, +78% y/y, beating estimates $38.25 billion
    • Data center revenue $35.6 billion, +93% y/y, beating estimates $34.09 billion
    • Compute revenue $32.56 billion vs. $15.07 billion y/y, beating estimates $30.41 billion
    • Networking revenue $3.02 billion, -9.2% y/y, missing estimate $3.51 billion
    • Gaming revenue $2.5 billion, -14% y/y, missing estimate $3.02 billion
    • Professional Visualization revenue $511 million, +10% y/y, beating estimate $507.6 million
    • Automotive revenue $570 million vs. $281 million y/y, beating estimate $460.7 million

  • Adjusted operating income $25.52 billion, +73% y/y, beating estimate $24.69 billion
    • R&D expenses $3.71 billion, +51% y/y, below estimate $3.75 billion
    • Adjusted operating expenses $3.38 billion, +53% y/y, below the estimate $3.4 billion
       
  • Adjusted gross margin 73.5% vs. 76.7% y/y, in line with estimate 73.5%
  • Free cash flow $15.52 billion, +38% y/y

But the most important data point in the release, the guidance, came in sold as Nvidia sees Q1 Revenue of $43.0BN (plus or minus 2%), above the Wall Street consensus of $42.3BN but just light of the upside whisper number. As shown below, the revenue growth is clearly moderating.

One concerning point is that networking isn’t growing in lockstep with the rest of the business.

“Networking revenue was $3.0 billion, down 9% from a year ago and down 3% sequentially,” the company said in its CFO commentary. This hiccup is being caused by a transition to new products, Nvidia said.

 company’s gross margin. The forecast calls for a further narrowing, something that analysts had expressed concern about.

Another potenial weakness is the company’s non-adjusted gross margin. The forecast calls for a further narrowing, something that analysts had expressed concern about.

Nvidia has said that’s just the price of getting new products to market and they’ll widen again. For the current quarter, the company is predicting non-GAAP gross margin of 71%, about a point shy of consensus.

But it wasn’t just the numbers that mattered: just as important was the qualitative description of ongoing events, where the company said it “delivered $11.0 billion of Blackwell architecture revenue in the fourth quarter of fiscal 2025, the fastest product ramp in our company’s history.” Nvidia said that Blackwell sales were led by “large cloud service providers which represented approximately 50% of our Data Center revenue. Data Center compute revenue was $32.6 billion, up 116% from a year ago and up 18% sequentially, driven by demand for our Blackwell computing platform and sequential growth from our H200 offering.”

Nvidia also said that it had “successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter. AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionize the largest industries.”

The CFO commentary is full of details about getting the new chip range, Blackwell, to market successfully. That was a concern before the report, specifically that the added complexity might cause delays, and that there could be a “pause” as customers stopped ordering the old gear while they waited for the new to appear in significant volumes.

In short: number were blowout – perhaps a tad less blowout then recent quarter – but still impressive especially as the company transitions to an avalanche of Blackwell orders.

Remarkably, despite the (somewhat) blowout number with straddles pricing in a 10% move after hours, the stock has gone… nowhere.

Tyler Durden
Wed, 02/26/2025 – 16:42

Iranian Nuke Sites On “High Alert” For Stealth Jet Attacks; Enriched Uranium Stockpiles Near Level For Bomb

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Iranian Nuke Sites On “High Alert” For Stealth Jet Attacks; Enriched Uranium Stockpiles Near Level For Bomb

Iran has placed its missile defense systems on high alert, anticipating potential Israeli and US airstrikes on nuclear sites, The Telegraph reported. The report follows a Bloomberg report citing the International Atomic Energy Agency, which found that Iran’s uranium stockpile has surged in recent months. 

The Telegraph cited two high-level government sources that say Tehran has been expanding missile defense coverage around nuclear and missile sites for fear of potential joint military strikes by stealth fighter jets by Israel and the US.

“They [Iranian authorities] are just waiting for the attack and are anticipating it every night and everything has been on high alert – even in sites that no one knows about,” one source told The Telegraph.

“Work to fortify nuclear sites has been ongoing for years but it has intensified over the past year, particularly since Israel launched the first attack,” he added.

“Recent developments, including Donald Trump’s comments and reports about potential plans from his administration to strike Iran, have further intensified activities.”

Iran’s nuclear sites: 

Source: Stratfor

Earlier, Bloomberg obtained a copy of a new IAEA report stating that Iran’s uranium stockpile is nearing weapons-grade levels, with a 50% increase in enriched uranium over the past three months.

“The significantly increased production and accumulation of high enriched uranium by Iran, the only non-nuclear weapon state to produce such material, is of serious concern,” IAEA Director General Rafael Mariano Grossi wrote in the report, adding that Iran’s increased production of uranium enriched to 60% levels of purity after being censured by the IAEA in November. 

Trump has unleashed the “maximum pressure” strategy on Tehran to drive its oil exports to zero and crash the Persian Gulf nation’s economy. This could be the early beginnings of regime change. 

Our latest reporting on Trump’s maximum-pressure strategy:

And this.

There are plenty of Iran hawks in the Trump administration, but the question will be whether the non-interventionist-leaning officials, such as Director of National Intelligence Tulsi Gabbard, win out.

If not…

.. then traders will have to start thinking about pricing in a war-risk premium into Brent.

Tyler Durden
Wed, 02/26/2025 – 14:05

Behavioral Economics: Managing Your Inner Voice

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Behavioral Economics: Managing Your Inner Voice

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

The combination of extremely rich equity valuations, high interest rates, and a new President taking bold actions will likely continue to whip stocks around for the foreseeable future. Alongside those volatility-provoking factors is that the S&P 500 just posted two annual twenty-plus percent gains in a row. Accordingly, seeing average or below-average returns this year and volatility spikes should not be surprising. If we are correct about volatility, it’s entirely possible that our worst behavioral traits as investors will be provoked. Given this possibility, it’s worth taking a break from our typical market or economic topics and focusing on behavioral economics.

Turn on CNBC or Bloomberg, and commentators discuss the economy, corporate earnings, and politics. They present those topics and many others as the rationale to explain why specific markets, asset classes, and individual securities behave as they do. While they have merit, investor behavioral instincts are the most critical driver of short-term gyrations and the least discussed by the media. Given psychology’s outsized yet underappreciated role in financial markets, let’s learn how to better govern our inner voice, leading to more rational decision-making.

What Is Behavioral Economics?

Behavioral economics studies individual and group psychology in relation to traditional economic and market theories. The goal is to understand better how individuals make investment decisions.

Traditional economics and most market theories assume that people are rational. Furthermore, because they are rational, they must always make decisions in their best interest. Conversely, behavioral economics acknowledges that humans are irrational and frequently influenced by cognitive biases and emotions that often work against their best interests.

Behavioral economics helps explain why markets sometimes behave unpredictably and why “rational” investors make seemingly irrational choices.

Key Theories in Behavioral Economics

The following paragraphs describe a few crucial biases and thought processes that we all harbor and play a role in our investment decision-making. As you read them, consider how they may apply to you.

Bounded Rationality

This concept, introduced by economist and Nobel prize winner Herbert Simon, suggests that individuals have limited cognitive resources and cannot process all the information required to make perfectly rational decisions. Simply, we have limited bandwidth.

To overcome this failure, we often use shortcuts to make decisions that are “good enough.” Simon called this adaptive process “satisficing.” The term comes from the words “satisfy” and “suffice.”

Prospect Theory

Developed by Nobel prize winners Daniel Kahneman and Amos Tversky, this theory describes how people evaluate potential losses and gains unequally. Many studies have found that most people are susceptible to loss aversion. In other words, we are more sensitive to losses than to profits. This bias leads to risk-averse behaviors when facing potential gains and risk-seeking behaviors when facing potential losses. In other words, we are more likely to double down on a losing position than a winning position.

Anchoring

This cognitive bias occurs when individuals rely too heavily on an initial piece of information (the “anchor”) when making decisions. For example, many investors stay fixated on the price at which they bought an asset. In such a case, they may consider that to be the stock’s fair value even if conditions change. Thus, if the stock falls, they may perceive it as undervalued regardless of why the price declined.

Overconfidence

Many professional and retail investors overestimate their knowledge and ability to predict market movements. This overconfidence can lead to excessive trading and risk-taking, often resulting in suboptimal investment outcomes.

Casinos and sports gambling sites prey on this bias. By default, the odds are less than fifty percent that a gambler will win a bet or hand. The more they play or bet, the better the odds they will lose money. So why do so many people bet and gamble? They have confidence that they have some knowledge or skill that others don’t. This same behavioral trait holds for many investors.

Herd Behavior

People often follow the actions of others, especially those deemed “experts” or viewed as popular. The social media term influencer applies to many in the financial media. The more uncertain the situation, the more this bias takes hold. Herd behavior, when strong enough, can lead to bubbles and crashes as investors push prices up or down based on the behavior of others.

If this weren’t the case, stock valuations would remain stable. Sellers would emerge when valuations became rich, and buyers would step in when they became cheap. Today, valuations are at record levels despite growing concern about the market’s fundamental economic underpinnings.

Let’s focus on how those five concepts can impact financial markets.

How Behavioral Economics Affects Financial Markets

Behavioral economics has underappreciated implications for financial markets. By understanding the psychological factors that influence investor behavior, we can better explain market anomalies and develop strategies to mitigate their impact on our returns.

Bubbles and Crashes

Traditional economic theories don’t explain why asset bubbles form and why they ultimately burst. If every investor was rational and fully aware of all available information, who would overpay for stocks, thus causing bubbles? Similarly, why do investors sell instead of buy once stocks become cheap?

Herding and overconfidence can be a winning combination in upward-trending markets. However, these behaviors often come at a steep cost. The combination of a belief that one can generate above historical returns over long periods and similar sentiment from the masses can put markets and individual asset prices way above rational valuations.

The process can be circular. As investors become enamored with their gains, confidence grows. In the process, they become less rational. Conversely, when stocks are cheap after a crash, many investors may have lost their confidence but cannot take advantage due to their loss aversion. In fact, many investors panic and sell when prices are at cheap valuations.  

Over/Underreaction to News

Sometimes, markets overreact to new information, causing prices to adjust quickly and often more than is warranted by the news. In such circumstances, prices will frequently reverse some of the overreaction and adjust accordingly. Some investors have a three-day rule to avoid overreacting. They wait to see the market or asset price action for three days before acting. However, in strong trends, the rule can be harmful. Consistent overreaction to certain news and underreaction to other news, alongside herding, can extend prices well above what should be expected. In these cases, adjustments will occur but can take longer than many expect. 

Other times, markets underreact to new information. Bounded rationality helps explain this phenomenon. At times, investors do not fully process, understand, or appreciate the implications of new information immediately. As a result, prices may gradually adjust as more investors become aware of the news and its impact.

Behavioral Trading And Portfolio Management Tips

With some behavioral biases in mind, it is worth sharing a few tips to help avoid being too reactionary or complacent during periods of high volatility.

Avoid Overtrading

No one is smarter than Mr. Market, goes a Wall Street adage. Overconfidence can lead to trading more frequently than is optimal. Accordingly, the more trades you conduct, the higher the likelihood that Mr. Market will get the best of you.

Warren Buffett takes the logic to an extreme.

“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

We believe overtrading can harm returns, and a strict passive buy-and-hold approach has drawbacks. Active portfolio management is essential as economic and market conditions change. The tricky part is learning when a trade makes sense and is logical versus when our biases get the best of us and force a trade. 

Home/Familiarity Bias

Investors tend to favor domestic over foreign investments, a phenomenon known as home bias. They also prefer certain stock factors over others. For instance, the chase has recently been on for mega-cap stocks. As a result, some very cheap and poorly performing small-cap stocks are ripe for investment.

Succumbing to these biases can leave a portfolio inadequately diversified, thus offering more risk. Reducing or avoiding our home and familiarity bias opens the door to more extensive potential investments. Think outside of your comfort box.

Disposition Effect

The disposition effect refers to the tendency of investors to sell winning investments too early and hold onto losing investments for too long. This behavior is driven by loss aversion and the desire to avoid realizing losses. As a result, investors may miss out on potential gains and incur more considerable losses. Further, investors may miss out on better opportunities as their money and mind are tied up.

Behavioral Portfolio Theory (BPT)

This theory, developed by Hersh Shefrin and Meir Statman, suggests that investors often create portfolios that reflect their psychological preferences and biases. By understanding these preferences, investors can better appreciate their blind spots.

The theory makes a case for investment advisors. Hiring someone to manage your money helps avoid a portfolio regulated by your biases. This is not to say that professionals don’t harbor similar biases, but some are more adept at understanding their biases and working around them. Furthermore, while they have biases, they differ from yours and weirdly create diversification from the rest of your assets.

Summary

Behavioral economics provides valuable insights into the psychological factors influencing investment decision-making. Taming these flaws, or at least better appreciating them, should give us more comfort. Further, it will allow us to walk the fine line of active investing, where we are not overly active yet not excessively passive.

By acknowledging that we are not always rational and are subject to cognitive biases, we can better understand market anomalies and develop strategies to mitigate and even take advantage of their impact.

Tyler Durden
Wed, 02/26/2025 – 13:45

7Y Auction Stops Through Despite Muted Foreign Demand

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7Y Auction Stops Through Despite Muted Foreign Demand

After two consecutive stellar auctions, moments ago the Treasury concluded the week’s schedule of coupon sale when it auctioned off $44BN in 7Y paper, and just like the week’s previous auctions, this one too was very strong.

Pricing at a high yield of 4.194%, the yield was 26bps lower than last month’s and was the lowest since September; and like the week’s previous two coupon auctions, this one too stopped through the When Issued 4.203% by 0.9bps.

The bid to cover was 2.64, virtually unchanged from last month’s 2.643 and just below the six-auction average of 2.66.

However, unlike the week’s previous two coupon auctions which saw a surge in foreign demand, today’s sale was in line with recent performance as indirect bidders took down 66.1%, down from 67.1% and the lowest since November; And with Directs awarded 25.2% or the highest since November, Dealers were left holding just 8.8%, the lowest since October.

Overall, this was yet another solid auction and one which comes as yields continue to tumble – thus without any concession – which shows just how much demand there suddenly is for US paper. Sure enough, yields dropped to another session low after the auction results hit the tape. Then again, once sentiment flips and yields blow out again, which they will, everyone who bought at today’s yield will be underwater. Until then, however, let the party continue.

Tyler Durden
Wed, 02/26/2025 – 13:30

Ukraine Can Forget About NATO, Says Trump: ‘That’s Probably The Reason Why The War Started’

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Ukraine Can Forget About NATO, Says Trump: ‘That’s Probably The Reason Why The War Started’

Huge and unprecedented words issued by America’s Commander-in-Chief in a press briefing on Thursday…

Trump says Ukraine can “forget about” joining NATO: “That is probably the reason why the whole thing started.”

Of course, Vice President J.D. Vance earlier this month voiced this point of view of the administration while addressing a gathering of defense leaders in Brussels. But never before has a US president so forcefully voiced that a path to NATO membership simply won’t happen.

This also marks the most directly Trump has ever said NATO expansion is a key reason for the tragic war, which has taken hundreds of thousands of lives, having started in the first place. 

Mainstream media fact-checkers have been out in force, decrying this perspective as ‘Russian propaganda’. But is this really the case?

The head of NATO itself in the recent past said the quiet part out loud and fully admitted that constant NATO expansion to Russia’s doorstep was a central driving factor:

From the start of the Russian invasion of Ukraine, we’ve been told that the issue of NATO expansion is irrelevant to the war, and that anyone bringing it up is, at best, unwittingly parroting Kremlin propaganda, at worst, apologizing for or justifying the war.

So it was curious to see NATO Secretary General Jens Stoltenberg earlier this month say explicitly that Russian president Vladimir Putin launched his criminal war as a reaction to the possibility of NATO expanding into Ukraine, and the alliance’s refusal to swear it off — not once or twice, but three separate times.

“President Putin declared in the autumn of 2021, and actually sent a draft treaty that they wanted NATO to sign, to promise no more NATO enlargement,” Stoltenberg told a joint committee meeting of the European Parliament on September 7. “That was what he sent us. And [that] was a pre-condition for not invade [sic] Ukraine. Of course we didn’t sign that.”

“He went to war to prevent NATO, more NATO, close to his borders. He has got the exact opposite,” Stoltenberg reiterated, referring to the accession of Sweden and Finland into the alliance in response to Putin’s invasion. Their entry, he later insisted, “demonstrates that when President Putin invaded a European country to prevent more NATO, he’s getting the exact opposite.”

How much clearer could the then NATO Secretary-General have said it (in the Sept. 2023 comments)? Here’s the clip below:

Trump also on Wednesday blasted the European Union…

“The European Union was formed in order to screw the United States, that’s the purpose of it. And they’ve done a good job of it. But now I’m president.”

Among other things, Europe has lately been accused of seeking to thwart Trump’s peace plan for Ukraine, even offering a rival rare earth minerals deal. The Europeans and Ukrainians have been cut out of direct negotiations with Moscow under Rubio.

As for former NATO chief Stoltenberg’s remarks which fully vouch for and back Trump’s point of view on the cause of the Russia-Ukraine war, they can be accessed at NATO’s website. The full transcript is here.

Tyler Durden
Wed, 02/26/2025 – 13:25

The Trump 2.0 Put: Got Bonds?

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The Trump 2.0 Put: Got Bonds?

Via RealInvestmentAdvice.com,

During Donald Trump’s first term, some investors bought into the Trump 1.0 Put. The trade was based on the market’s belief that Trump believed the stock market’s performance was a referendum on his presidency. Accordingly, investors thought that Trump would do everything he could to backstop the stock market if it fell. Thus, some investors thought it worthwhile to sell puts, collect the proceeds, and sit back comfortably, not fearing losses. According to a Bloomberg article, US Treasury Yields Offer A Scorecard For The White House’s Cost Cutting Vows, Trump’s second term proxy may be the Trump 2.0 Put. 

The Trump 2.0 Put has a similar meaning to the 1.0 Put, except it pertains to the bond market. Per Bloomberg:

Trump has famously obsessed with the stock market as a real-time referendum on his presidency. 

But now, with Musk and Treasury Secretary Scott Bessent in his ear at the start of his second term, much of the attention has shifted to another benchmark — the 10-year Treasury bond yield.

Trump made a fortune in real estate. As such, he is keenly aware that interest rates and leverage greatly impact economic growth. 

The administration seems to appreciate that Powell has little control over longer-term rates that are much more impactful on economic activity. As such, Trump, with the guidance of Treasury Secretary Scott Bessent, is focused on lowering long-term interest rates. To do this, they must first get bond investors to reduce or eliminate their fears of high deficits and inflation. These fears manifest themselves in the bond term premium. 

If the Trump plan effectively reduces yields, those writing puts on bonds or outright long bonds may benefit from the Trump 2.0 Put.

Market Trading Update

Yesterday, we discussed that the recent weakness was part of a corrective cycle and could last longer. We have recently discussed money flows, which have continued to support the market over the last month; however, that has changed. As we saw on Monday and Tuesday, money flows have peaked and turned lower as selling pressure continues to build in the market. More importantly, there has been a clear risk-off rotation, with money flowing into bonds and out of high-beta areas like technology and bitcoin.

That rotation has pushed Treasury bonds, as represented by TLT, above their 100-DMA and the downtrend line from last October. While bonds are getting overbought short-term, they remain on a buy signal and now have a higher year-to-date return than the S&P 500 index. I expect to see a pullback and retest of support at the rising trend line, but if the breakout above the 100-DMA holds, we could see a further move. Such will be particularly the case if economic data continues to weaken.

Another aspect of the rotation in Treasury bonds suggests that recent equity market weakness may not be over yet. As such, bonds’ hedging value remains key to a risk-managed portfolio. If you are long Treasury bonds, continue to hold them for now and take profits if you own them as a trading position. If you are looking for an entry point be patient and buy pullbacks that don’t violate the rising trend line from the 2025 lows.

House Buying Conditions

Not surprisingly, 6-7% mortgage rates and stubbornly high home prices make it financially challenging to buy a home. The first graph below, courtesy of Bravo Research, shows that home-buying conditions have been the worst since at least 1960. 

Making matters worse, high mortgage rates have precluded many potential sellers from selling. Consequently, the supply of homes for sale remains low. We are not breaking news with our commentary thus far.

However, where this gets very interesting is in the ages of buyers. As the Koyfin graph shows, in just a few years, the median age of homebuyers has risen by about 7 to 8 years to 56. The median age for first-time buyers is 38. Affordability is a problem, and as the data show, older people, who are most likely more financially established, are the dominant transactors in the current market. Home prices and/or mortgage rates must fall to improve the housing market’s health. 

Until then, expect the number of homes selling to stay near 20+ year lows. Moreover, older people will likely remain the dominant transactors.

Tyler Durden
Wed, 02/26/2025 – 13:05