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Positioned For A Historic Crash

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Positioned For A Historic Crash

Authored by James Rickards via DailyReckoning.com,

Earlier this week, Donald Trump’s victory in the 2024 presidential election was officially certified by lawmakers in a joint session of Congress.

Kamala Harris presided over the ceremony as president of the Senate and faced the awkward task as she formally certified Trump’s victory and her own loss.

Notably, the Democrats set aside some members’ views that Trump is ineligible to return to the presidency because of the Constitution’s bar on insurrectionist officeholders.

Apparently, the voice of the American people resonated in Democrat lawmaker’s ears because of Trump’s Electoral College landslide, his victory in all seven swing states, and the fact that he won a majority of the popular vote — the first Republican to do so in twenty years and only the second to do so in thirty-six years. That gives Trump both a mandate for change and the goodwill to try.

However, this decision to not challenge the certification does not mean all is well for America and the financial markets. Wall Street has challenging times ahead as shown by a shaky end to 2024. The traditional Santa Claus Rally did not materialize, which was a surprise for many investors.

Since the beginning of December, stocks of all sizes and styles have struggled, apart from shares of a few mega-cap companies that have increasingly dominated the market.

With the 2024 election in the rearview mirror and Donald Trump set to take office on January 20, a meltdown is still a threat to markets.

Here are three threats to markets as we head into 2025.

1. Market Melt-Up.

Markets are at or near all-time highs based on every available metric: P/E ratios, CAPE ratio, market cap/GDP ratio, concentration risk, etc. This is accompanied by indexing, investor complacency and analyst euphoria. When such conditions have existed in the past, they have always been followed by market crashes of 50% to 90% unfolding over several years. Examples include Dow Jones (1929), Nikkei (1989), NASDAQ (2000), and S&P 500 (2008).

We are now positioned for an historic crash. The specific cause does not matter – it could be war, natural disaster, a bank or hedge fund collapse or another unexpected event. What matters is the super-fragility of the market when the trigger is pulled. This is why Warren Buffett has over $300 billion in cash and why central banks are buying gold. Prepare now. Don’t be the last one to know.

2. A U.S. recession is coming.

There are ample signs that the economy is headed for a recession (or may already be in one) including higher unemployment, lower interest rates, flattening yield curves, negative swap spreads, collateral shortages in Eurodollar markets, reductions in China’s reserve positions (not a sign of “dumping” Treasuries but a sign of a dollar shortage and a need to provide liquidity to banks), declining oil prices (despite output reductions), and others.

The emerging recession will cause a stock market drawdown as earnings are revised downward, consumer confidence crumbles, consumer discretionary spending hits a wall and precautionary savings rise. The world will not bail-out the U.S. economy because China, Japan, Germany and the UK are all slowing economically at the same time or already in contraction.

This is problematic for stocks independent of any crash potential. A word on lower rates. Low rates are not “stimulus”. They are associated with recessions and depressions and not the sign of a thriving economy. The Fed is not leading the rate market. They are following the market down. Of course, a recession could trigger a market crash. But even if it does not, recessions are typically associated with 30% declines in stock valuations over a year or less.

3. Currency wars are back, and trade wars are coming.

The super-strong dollar today makes it difficult for other countries to buy U.S. goods. Tariffs make the global dollar shortage worse as foreign investors seek dollars to jump the tariff walls and invest directly in the U.S. Both the strong dollar and the coming U.S. tariffs invite retaliation by trading partners who will put up their own tariff walls.

The result is a global contraction in trade that could resemble the trade collapse of the 1930s during the Great Depression. U.S. stocks fell 85% from October 1929 to June 1932 during that episode of trade wars. A repeat could be on the way.

Remember, the economy goes its own way. Business cycles have not been erased. The transition from Biden to Trump will bring economic pain as Trump inherits Joe Biden’s mess.

The U.S. economy (in contrast to economists) does not pay that much attention to elections or new administrations. It’s too big and moves to its own complex tempo. Investors may cheer the Trump policies and his reelection, but it will be a very bumpy ride in the first year of Trump 2.0.

Biden Isn’t Done Yet

Also, don’t underestimate what the Biden administration has been doing as they exit the White House. The fact is they can still do a lot of damage before Inauguration Day. What are they up to? Biden and company are trying to Trump-proof the presidency by signing contracts. Let me explain.

Remember the famous Inflation Reduction Act? Despite its name, the act actually increased inflation by being the Green New Scam in disguise. There was about $850 billion for garbage like windmills, solar modules, and green initiatives. A lot of the money went to the Democrat’s favorite contractors and electric vehicle makers. That passed in August of 2022, but guess what?

Most of the money hasn’t been spent yet.

So, now there is a mad scramble to sign contracts. You actually can’t spend the money that fast, but you can sign a contract with a five-year life or three-year life saying you’ll spend it over three years. And the idea is signing the contract now so that even when Trump becomes president, even though the money hasn’t been spent, it has been appropriated and it’s contractually bound.

And that’s the key. Bind the spending in contractual form so Trump can’t do anything about it.

These actions could cause havoc leading up to Trump taking office and beyond depending on how much damage they do. It won’t be a pretty picture for markets with so many companies impacted by these actions on top of a recession.

Bottom Line

After taking office, Trump’s agenda will incentivize billions of dollars of investments in U.S. energy and manufacturing jobs. He will make domestic oil drilling and refining a top priority which will provide America with energy independence. This will also benefit companies (and provide more jobs) in the energy sector.

But there will be plenty of minefields for markets to deal with in the first year as the transition takes place.

Tyler Durden
Fri, 01/10/2025 – 15:00

Arson Eyed In LA’s Kenneth Fire – Suspect Gang-Tackled By Residents

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Arson Eyed In LA’s Kenneth Fire – Suspect Gang-Tackled By Residents

Police believe a fifth brush fire that broke out in the fiery Los Angeles hellscape on Thursday afternoon may have been set intentionally — and they’ve arrested a suspect who was captured by residents. Los Angeles District Attorney Nathan Hochman indicated the suspect in the nearly-1,000-acre Kenneth fire could face murder charges, if a loss of life is linked to that blaze. “Justice will be swift. It will be firm, and the maximum punishment will be sought,” he told NewsNation‘s Ashleigh Banfield. 

An image said to show the suspect in the Kenneth fire being taken into police custody; consistent with witness accounts, the photo seemingly shows a torch on the hood of the police car. 

Potential swift justice was off to a strong start thanks to the initiative of local residents. Witnesses told LA’s KFI News radio that the suspect was seen riding a motorbike and holding an ignited torch, with three residents chasing him down and gang-tackling him in a front yard. We pause to note that portable torches have been observed in other California criminal endeavors:   

“What we know right now is that the [fire] occurred, started here, and about 20 minutes, 30 minutes later, a suspect was detained over in Woodland Hills area by citizens,” LAPD Senior Lead Officer Sean Dinsel told NewsNation’s Brian Entin on the scene. Asked if the Kenneth fire was set intentionally, Dinsel said, “At this time, that’s what we believe.” He said the fire’s suspected starting point — at the Victory Trailhead that gives access to the Upper Las Virgenes Canyon Open Space Preserve — was being treated as a “crime scene.”  

Little is known about the suspect, and his name has yet to be released. LAPD issued a statement confirming the arrest, but noting “We CANNOT confirm any connection to any fire by this suspect at this time.” Meanwhile, KFI News and others have posted photos and videos said to show him being arrested: 

The Kenneth fire began shortly after 2:30 pm in the the Woodland Hills area, near a neighborhood called Calabasas. Quickly spreading to more than 900 acres, it prompted mandatory evacuation orders in the immediate vicinity, along with evacuation warnings in adjacent Ventura county. The orders were subsequently downgraded to warnings, NBC News reports, after the fire’s progress.

While that was a rare, encouraging development for firefighters engaged in a daunting multi-front war, it was well short of a victory: As of 8pm local time, the Kenneth fire was listed as 35% contained. Late Thursday afternoon, California Gov. Gavin Newsom said 900 additional firefighters were being deployed against the blaze. 

Demonstrating an awareness that citizens are beyond fed up with California’s failure to provide safety and security, DA Hochman dished out tough-sounding rhetoric about the arrest of the arson suspect. “Our goal is to send this warning,” he told Banfield.” Whether it’s looting, these internet scams, robbery, or future arsons. … The day and age of a DA’s office standing on the sidelines is over. We want to bring justice, and we will.”

via CalFire

Let’s not forget what we noted on Thursday. 

. . .  

Tyler Durden
Fri, 01/10/2025 – 11:20

“Disinformation”: Trudeau Offers Laughable Excuse For His Ouster

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“Disinformation”: Trudeau Offers Laughable Excuse For His Ouster

Authored by Luis Cornelio via Headline USA,

Canadian Prime Minister Justin Trudeau blamed “right-wing attacks” and “disinformation” on Thursday as the main causes behind his long-awaited resignation. 

Trudeau announced Monday that he would step down as the Liberal Party leader, caving to pressure from his party amid growing dissatisfaction among Canadians over inflation and immigration. 

However, during an interview with CNN’s Jake Tapper on The Lead about his politically devastating poll numbers, Trudeau blamed everyone else but himself for his fall from grace

“When you get a con – you know, I was going to say conflagration – but at least an intersection of both right-wing attacks and social media, you end up with a lot of misinformation, disinformation,” Trudeau claimed. 

“Responsible governments have to stay focused on the policies that are making a difference. And that’s what we’ve been doing,” he added. 

Trudeau’s comments followed a lengthy and incoherent response to Tapper’s question about Canadian and American voters delivering a blunt verdict against leftist governance.  

Tapper noted that Canadians are concerned about high inflation, the overall economy and immigration.  

Drawing parallels with America, he added, “Those are also issues that the left-wing party in this country has faced a lot of disapproval. … It seems like voters in both of these liberal democracies are sending a message to left-wing parties, liberal parties: ‘We don’t like how you’re doing the economy when it comes to inflation. We don’t like how you’re doing immigration.’” 

Trudeau dismissed these concerns in response, claiming the polls were driven by “a lot of emotions.” 

“I mean, if you look at the actual numbers, inflation in Canada was lower, came down quicker,” he said. Later, Trudeau expanded, “Our economy is doing very well, but when someone is paying $8 for a head of lettuce, it doesn’t matter that you’re doing better than they are in Spain or somewhere else. There’s a sense that, ‘Okay. Something’s got to give.’ And that’s where incumbents are in trouble everywhere around the world, not just in our two countries.” 

Trudeau’s decision to step down also followed his failure to persuade President-elect Donald Trump not to impose tariffs on Canadian products during the incoming U.S. administration.

Following the 2024 presidential election, Trump mocked Trudeau in social media posts, referring to him as “governor” and joking that Canada could avoid tariffs if it became the 51st U.S. state.

Tyler Durden
Fri, 01/10/2025 – 11:00

“Do Not Panic Buy”: Officials Urge Calm As LA Fire Crisis Disrupts Main Fuel Pipeline To Las Vegas

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“Do Not Panic Buy”: Officials Urge Calm As LA Fire Crisis Disrupts Main Fuel Pipeline To Las Vegas

“In an abundance of caution, due to the fires in California, the main pipeline that brings gasoline and other fuels to the Las Vegas Valley looks to face temporary disruptions in service,” the City of Las Vegas announced on X late Thursday. 

The pipeline shutdown involves Kinder Morgan’s SFPP West and 566-mile CalNev pipeline system, which ships gasoline, diesel, and jet fuel from Los Angeles to Las Vegas. 

According to local media outlet KLAS 8 News Now, the CalNev pipeline system is responsible for 90% of Clark County fuel supplies.

“We want to reassure you that there is no emergency or immediate cause for concern. These measures are purely precautionary,” the Las Vegas Metropolitan Police Department wrote on X, adding, “We encourage everyone to stay informed through reliable sources and avoid unnecessary panic or misinformation. Together, we can ensure our community remains calm and prepared.”

Now Vegas residents know there’s the possibility of an impending fuel:

Clark County announced Thursday night that fuel from the pipeline will start flowing to Vegas “in the next 12-24 hours,” adding, “The public is encouraged to not panic buy at the pump.”

What a shitshow unfolding across the Pacific Southwest—somewhat attributed to Los Angeles Mayor Karen Bass and Governor Gavin Newsom prioritizing a radical progressive agenda instead of actually doing their jobs. 

Tyler Durden
Fri, 01/10/2025 – 10:40

10 Dead, 10,000 Structures Burned In Los Angeles Area Inferno As Fire Damage Could Exceed $150 Billion

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10 Dead, 10,000 Structures Burned In Los Angeles Area Inferno As Fire Damage Could Exceed $150 Billion

Fires raging across the Los Angeles area entered their fourth day, killing at least ten people, forcing the evacuation of 180,000 residents, and destroying more than ten thousand structures. Preliminary estimates place damages and economic losses up to $150 billion.

As of Friday morning, five fires are burning across the LA County area. The largest, the Palisades Fire, has scorched 20,000 acres and is considered “one of the most destructive fires in the history of Los Angeles,” according to the LA fire chief on Thursday. Meanwhile, the Eaton Fire has burned 14,000 acres. The newest fires are Kenneth and Hidden Hills, which expanded in the overnight hours.

Summary of the five fires (courtesy of CBS News):

  • The Palisades Fire in Los Angeles has killed two people and grown to cover over 31 square miles, likely destroying thousands of structures, according to fire officials. It was 6% contained as of late Thursday night.

  • The Eaton Fire, in the hills above Altadena in northern Los Angeles County, has killed three people and burned more than 21 square miles. Between 4,000 and 5,000 structures were believed to have been destroyed or damaged. Cal Fire reported zero percent containment as of Thursday night.

  • The Kenneth Fire ignited in the Woodland Hills neighborhood of Los Angeles on Thursday and covered 960 acres with zero percent containment as of Thursday night, according to Cal Fire.

  • The Sunset Fire, which erupted Wednesday in Hollywood Hills, prompted a new round of mandatory evacuations and threatened iconic landmarks. By Thursday, all evacuation orders for the fire were lifted and the blaze had been fully contained, according to officials.

  • The Hurst and Lidia fires scorched at least 771 acres and 394 acres, respectively, Cal Fire said. The Hurst Fire was 37% contained and the Lidia Fire was 75% contained as of Thursday night.

Fire Map 

About 180,000 LA County residents were under evacuation orders, and nearly 200,000 residents were under evacuation warnings, the county’s Office of Emergency Management stated. In the mandatory evacuation areas, 60,120 structures were at high fire risk, while 61,288 structures were at moderate risk in areas affected by evacuation warnings.

Over 10,000 structures, including homes, businesses, and smaller buildings such as RVs and sheds, have been destroyed this week in the out-of-control blazes. 

Before-and-after satellite images from Maxar Technologies show the devastating impacts of the fires. Entire neighborhoods were burned to the ground. 

Before/After 

Other apocalyptic scenes:

The National Weather Service extended a red flag warning until late Friday evening for much of LA and Ventura counties. High winds this week have been one of the main drivers of spreading the flames. 

While corporate leftist media blames ‘climate change’ for the wildfires, there is reason to believe that epic mismanagement by LA Mayor Karen Bass and Gov. Gavin Newsom contributed to the fire disaster. 

Then there’s this…

More reports of arson:

Reports of criminal gangs targeting mansions…

The latest AccuWeather estimate for the total damage and economic loss in LA County has surged to a staggering $135 billion to $150 billion, a massive increase from Wednesday’s estimate of $52 billion to $57 billion.

Meanwhile, the insurance industry is also bracing for a significant hit, with JP Morgan analysts forecasting insured losses …

“Expectations of economic losses stemming from the fires have more than doubled since yesterday to closer to $50 billion, and we estimate that insured losses from the event could exceed $20 billion (and even more if the fires are not controlled).

“This would make this event significantly more severe than the 2018 Butte County Camp fires, the highest insured loss wildfires in California’s history previously (with insured losses of roughly $10 billion). Insured losses in the Butte Camp fire were close to two-thirds of economic losses (about $15 billion). That event impacted over 150,000 acres and affected over 18,000 houses/buildings.

“While the current wildfires haven’t affected as much acreage or as many houses/buildings (thus far), more of the damage is concentrated in the affluent Pacific Palisades area, which has high value residential homes (median home price >$3 million versus <$500k in Butte County). Moreover, the fires have not been contained thus far and continue to spread, implying that estimates of potential economic and insured losses are likely to increase.”

Catosphere bond news website Artemis noted, “We are still a long way off any loss estimates based on actual damage information, given the still-unfolding disaster situation in Los Angeles County.”

What an epic disaster for Democrats, who can no longer hide behind climate change to deflect from their mismanagement and horrendous policies. The pain endured by folks who lost everything, as comedian Adam Carolla suggests, could turn some of Hollywood’s wokest and leftist elites into Republicans – well, at least in local elections.

And it begins. 

*Developing 

Tyler Durden
Fri, 01/10/2025 – 10:22

UK Government Investigating Elon Musk’s Tweets About Muslim Pedophile Gangs

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UK Government Investigating Elon Musk’s Tweets About Muslim Pedophile Gangs

Authored by Steve Watson via Modernity.news,

Elon Musk’s tweets about Muslim pedophile gangs are being assessed by the UK Government’s counter-extremism unit, as a potential threat to the security of the country, it has emerged.

The Daily Mirror reports that The Home Office unit has stepped up social media monitoring of accounts with large followings, including Musk’s, as pertains to the grooming gangs issue.

Musk has posted hundreds of tweets in the past week related to the scandal, including openly calling Prime Minister Kier Starmer “evil,” accusing him of facilitating a cover up, and labelling Starmer and safeguarding minister Jess Philips as complicit in the “rape” of Britain.

The Mirror report states that the UK government’s counterterrorism unit has “been involved in content analysis and wider risk assessment.”

A government source told the Mirror “We keep a close eye on how disinformation and hate can proliferate, including online.”

John Woodcock, the government’s adviser on political violence and disruption, asserted that “Britain’s democracy isn’t a play thing for foreign billionaires – Elon Musk needs to back off and concentrate on his rockets and his cars or whatever he wants to obsess about next. Our electoral laws rightly forbid foreign donations and my recent review warns against our information channels being deliberately manipulated from abroad. We should be watching closely to ensure that doesn’t happen here.”

The government’s website states that the counter-extremism unit “focuses on the highest harm risks to the homeland, whether from terrorists, state actors, or cyber and economic criminals,”

While the tweets are being investigated, the government has rejected calls for a new national inquiry into the pedophile gangs scandal, with ministers voting down a move to legislate for an inquiry.

Ironically, the current head of counter-terrorism policing in the UK is an officer who served as Borough Commander in Rotherham, one of the areas most notorious for child sexual abuse at the hands of Muslim pedophile gangs, from 2006-2010.

In comments to GB News, former Head of the Counter Terrorist Unit at Ministry of Defence, Major General Chip Chapman suggested that Musk’s tweets could influence others to take violent action, and that there is a history of ‘conspiracy theorists’ doing that in the UK.

* * *

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.

Tyler Durden
Fri, 01/10/2025 – 10:20

Oil Surges To 3-Month-Highs As US Escalates Anti-Russia Sanctions

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Oil Surges To 3-Month-Highs As US Escalates Anti-Russia Sanctions

Oil prices are soaring this morning, with WTI hitting three month highs after reports that Indian oil refiners are bracing for new US sanctions that would hit flows from Russia.

“Additional sanctions against the Russian oil and insurance industry has added further fuel to the fire, as it raises the prospect for lower supply during a period of strong winter-related demand,” said Ole Hansen, head of commodities strategy at Saxo Bank.

While traders had tougher sanctions on their radar, the scale is considerably larger than expected. The tougher measures would target more than 180 tankers carrying Russian oil, as well as maritime insurance providers based in the country, Reuters said, citing Indian refining sources it didn’t identify.

WTI broke above its 200DMA – also driving an acceleration in price as CTAs jump on board the move…

Source: Bloomberg

The market has also been supported by dwindling US crude stockpiles, lower seaborne exports from Russia and cold weather.

“The cold spell in the US and Europe could disrupt supply if refiners are affected and demand for heating oil is naturally rising. Stock draws in distillates in the coming weeks cannot be ruled out. Sanction-related declines in Iranian and Russian crude oil exports force China to seek suitable alternatives,” PVM Oil Associates noted.

Uncertainty over how aggressively the Trump administration will move to curtail Iranian crude flows is also providing support, they said. “Asian buyers have already been looking for alternative grades from the Middle East, with broader sanctions against Russia and Iran making this oil flow more difficult,” the strategists wrote.

“Sentiment remains positive on the back of colder weather across parts of the Northern Hemisphere, which is likely to boost oil demand. In addition, spot Asian LNG (liquefied natural gas) is trading at a premium to oil, increasing the risk of substitution,” Warren Patterson and Ewa Manthey, commodities strategists at ING, said in a note.

The additional sanctions also follow on this week’s decision by a major Chinese port operator to ban sanctioned tankers from Russia and Iran.

Tyler Durden
Fri, 01/10/2025 – 09:14

Rate-Cut Hopes Plummet After Strong Payrolls

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Rate-Cut Hopes Plummet After Strong Payrolls

Authored by Peter Tchir via Academy Securities,

Look out above… for yields

The headlines look very strong.

  • Big beat (256k vs 165k expectations) on the Establishment data. The beat was all in private payrolls (very good). Downward revisions, but only 8k (not bad).

  • Unemployment rate drops to 4.1% (the Household survey added 478k – which catches up on some recent weak prints relative to the Establishment Survey).

  • Annual earnings ticked down marginally, but hours worked remained the same – call it a “wash”?

I continue to believe that seasonal adjustment factors overstate data this time of the year (our main reason for thinking we would get a strong report), but in any case markets will have to react to this data.

With signs that inflation is stubborn, if not turning higher (in response to people buying goods ahead of potential tariffs, etc.), with limited hopes of containing the deficit, and a labor market, that at least officially, remains strong, the Fed will be very slow to make the next cut.

We have argued that the neutral rate may well be as high as 4% in this environment, and see no reason to lower that.

The front end of the curve needs to continue to price in a slow Fed, that is almost done.

The long end of the curve needs to price in deficits, supply and the risk that foreign buyers don’t buy as much debt as some may not like the rhetoric coming out of D.C. (a minor, maybe even trivial issue at the moment, but one that bears watching).

Can stocks do well if 10’s get into a 4.8% to 5% range?

Possibly, but only if the belief that the market positive plans of the new administration seem likely to get implemented on a timely basis. The jury is still out there. Lots of reasons to still believe, but so much got priced in, that any doubt creeping in, will impact stocks negatively.

I see 10’s 4.7% to 4.9% (and am starting to get an itchy trigger finger to buy long dated bonds).

Equities should see a pull back, but this will be a “messy” traders oriented market, so will likely add some equity risk on a dip of 2% or more (if we get that far today).

Tyler Durden
Fri, 01/10/2025 – 09:06

Could Judge Merchan Pull A Bait-&-Switch At Today’s Trump Sentencing?

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Could Judge Merchan Pull A Bait-&-Switch At Today’s Trump Sentencing?

Authored by Jonathan Turley,

The Supreme Court voted 5-4 to allow the sentencing of President-elect Donald Trump to go forward today. The bare majority was secured when Chief Justice John Roberts and Associate Justice Amy Coney Barrett voted with their liberal colleagues, Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. However, part of the rationale for the decision was that Acting New York Justice Juan Merchan indicated that he was going to issue an unconditional discharge without any jail or probation. The question is whether Merchan could pull a bait-and-switch and decide to impose punishment. It is highly unlikely but intriguing.

President-elect Donald Trump struck the right note and declined to criticize the Court. He simply stated that “This is a long way from finished and I respect the court’s opinion.”

Some of us predicted this result and specifically noted that Chief Justice Roberts would not want to issue a stay. Roberts prefers regular order and, like many jurists, prefers for cases to be finalized to allow for a complete appellate review. They tend to oppose interlocutory appeals for that reason.

In his earlier order, Merchan discussed various options and only said “an unconditional discharge appears to be the most viable solution to ensure finality and allow Defendant to pursue his appellate options.”

That is where some of us said that this case would land after the conviction. After the election, such a sentence became all but certain. It is the only option that would avoid the constitutional problems — and likely reversal — for Merchan.

The majority took that as a done deal and noted that the President-elect would not have to attend in person and would not face any punishment. The Court may believe that it has sealed Merchan’s suggestion in legal amber.  There is little likelihood that Merchan will depart from the course, but could he?

The answer is probably yes. The Supreme Court did not issue a conditional order that the sentencing is allowed if it is unconditional.

That makes this notably informal. Defendants are allowed to address the court before sentencing and no sentence is finalized until the sentencing hearing. What if Trump came in and expressed open contempt for Merchan and mocked the case? Some judges might take such an allocution moment to increase punishment.  Merchan could threaten contempt but that increasing punishment would go against the operating assumption of the Court’s 5-4 decision.

The Supreme Court decision itself does not order Merchan to issue an unconditional discharge. It simply treats it as a done deal.

It is not as a legal matter, but it is as a practical matter.

Today, we will see the ignoble end to a raw form of lawfare by one of its most committed warriors. After millions in costs and years of litigation, it will result in no punishment. What the left will get is the labeling of Trump as a convicted felon, a fact that will then be repeated like a mantra by the media. Merchan can be expected to add to that rhetoric with punishment soundbites, as he has in the past.

However, the result shows how this case was more inflated by the Goodyear blimp. It will be punishment by soundbite in a case based on a ridiculous criminal theory. He will be sentenced without our even knowing what jurors concluded happened in the case since Merchan did not require them to agree on the specific motivation or purpose of underlying acts.

The benefit for President Trump is that he can finally appeal this case. While expectations are low for the New York court system which failed to prevent the political weaponization of its criminal justice system, it can now be reviewed in its totality and eventually go back the United States Supreme Court.

Tyler Durden
Fri, 01/10/2025 – 09:00

Scorching Hot Payrolls Smash Estimates As US Unexpectedly Adds Massive 256K Jobs In December As Unemployment Rate Drops

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Scorching Hot Payrolls Smash Estimates As US Unexpectedly Adds Massive 256K Jobs In December As Unemployment Rate Drops

With consensus expecting a 165K print today, and the whisper number coming in about 20K higher at 187K, traders were expecting a cooler than last month’s 227K – but not too cool – and certainly not hot, jobs number this morning. Instead they got a red hot print at 256K, nearly 100K higher above the median estimate of 165K, with just one forecaster (Bloomberg’s econ team) expecting a higher number at 268k.

The beat, which as noted was higher than all but one forecast, was a 4 sigma beat to estimates.

The change in total nonfarm payroll employment for October was revised up by 7,000, from +36,000 to +43,000, but the change for November was revised down more, by 15,000, from +227,000 to +212,000. With these revisions, employment in October and November combined is 8,000 lower than previously reported.

The number of employed workers surged from 161.183 million to 161.661 million, up 478K, while the number of unemployed workers dipped by almost 250K, from 7.121 million to 6.886 million, a drop of 235K, leading to both a convergence in the spread between the number of payrolls and Americans employed, and a decline in the unemployment rate.

Indeed, just in case the smoking hot payrolls print wasn’t enough, the unemployment rate should have ended any hope of a rate cut in the coming quarters, as it printed down to 4.1% from 4.2%, below estimates of a 4.2% print. The unemployment rate for Whites (3.6 percent) edged down in December. The jobless rates for adult men (3.7 percent), adult women (3.8 percent), teenagers (12.4 percent), Blacks (6.1 percent), Asians (3.5 percent), and Hispanics (5.1 percent) changed little over the month.

The underemployment rate, tumbling to 7.5% from 7.8%, and a 6 month low, was even hotter.

In fact the only aspect of today’s report that was not red hot, was average hourly earnings, which at 0.3% MoM came in line, and in fact missed fractionally on the YoY, printing at 3.9%, down from 4.0% and below estimates of an unchanged print.

Developing.

Tyler Durden
Fri, 01/10/2025 – 08:43

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