South Korea’s Constitutional Court began reviewing President Yoon Suk Yeol’s impeachment on Saturday, following a National Assembly vote that led to it. Yoon was scheduled for questioning on Sunday as part of a prosecutors’ office investigation, but he has not responded. Meanwhile, the leader of his party, who had supported the impeachment, has resigned.

NBC News reports the prosecutors’ office asked Yoon to appear for questioning on Sunday as part of an investigation over his failed attempt to declare emergency martial law earlier this month. Prosecutors will issue another summons for the president. 

On Saturday, the National Assembly voted to impeach Yoon, with 204 lawmakers in the 300-member house in favor of the motion and 85 against. Eight votes were declared invalid, while three lawmakers abstained from voting.

The vote comes a little more than a week after Yoon survived an impeachment vote, capping multi-week political turmoil in the country that borders North Korea. This follows Yoon’s declaration of the briefest martial law in South Korean history on December 3, lasting only a few hours, after accusing the opposition party of engaging in ‘anti-state activities.’

Recall, Yoon said: “I will not give up. I will do my best for our country.” And this could be why he failed to appear for questioning on Sunday.

“If Yoon continues to defy requests for questioning in the two inquiries, investigators could ask a court to issue a warrant for his arrest,” NBC noted. 

Under South Korea’s Constitution, Yoon’s impeachment has allowed Prime Minister Han Duck-soo to become interim leader.

Political instability in South Korea led to the resignation of Han Dong Hoon, the leader of Yoon’s People Power Party, on Monday morning. 

Han said he does “not regret supporting the impeachment” because the president’s use of martial law was wrong. 

“Defending illegal martial law is a betrayal of the country, the people, the conservative spirit, and the achievements of our party that achieved industrialization and democratization,” Han emphasized. 

Given that the Constitutional Court will now decide whether to reinstate or remove Yoon, Goldman’s Goohoon Kwon and Andrew Tilton provided clients with the possible transition scenarios. That process could take up to six months.

Here’s what comes next: 

Newsquawk’s latest headlines on the ongoing political turmoil: 

• South Korean MPs have successfully voted to impeach President Yoon in their second attempt, amid backlash following his brief move to impose martial law, according to BBC. Yoon was suspended from official duties at 19:24 local time on Saturday while PM Han is to continue as acting president, according to Yonhap.

• South Korea’s acting president Han vowed to leave no vacuum in state affairs, build a solid security posture, and ensure the cabinet works hard to maintain trust with the US, Japan, and other partners. He also pledged efforts to operate financial and forex markets smoothly, according to Yonhap. Acting President Han said the country will maintain preparedness to prevent North Korea from stirring up provocations, secure national interests ahead of the new US administration, and prioritise national security above all else, according to News1 and Yonhap.

• South Korea’s opposition leader Lee Jae-myung said the party has decided not to proceed with the impeachment of acting , according to Reuters.

• Bank of Korea stated it is necessary to respond more actively to the economic impact compared with past impeachment periods, given heightened challenges in external conditions. It also said it will use all available policy instruments, in conjunction with the government, to respond to and avert escalation of volatility in financial and forex markets, according to Reuters.

• South Korea’s Finance Minister said the government will continue to swiftly deploy market-stabilising measures as needed, seek more support measures for vulnerable sectors, and actively communicate with parliament to keep the economy stable. The minister also confirmed that the bi-annual economic policy plan will be announced before the end of the year, according to Reuters.

• South Korea’s financial regulator said it will expand market-stabilising funds if needed to boost liquidity in bond and short-term money markets and expects financial markets to stabilise as recent political events are temporary shocks, according to Reuters.

Also, the Goldman analysts warned of another scenario that could unfold: “… muddling through in a political gridlock.” 

Authored by James Howard Kunstler,

“Understand this deeply – you nearly lost your country and your freedom to a deranged, totalitarian-leaning enemy of our nation’s soul and destiny. Take this personally.”

– Mel K

So, you expected “Joe Biden” to serve up a neat little Christmas-time World War Three, lobbing ATACMS into Russia and all, but instead, surprise surprise, you got The War of the Worlds: mysterious drones hovering on-high over the endless muffler shops, manicure parlors, mafia palazzos, and mosques of New Jersey.

But there seems to be more to this than, say, the stunt that Orson Welles pulled in 1938, scaring a few rubes over the radio.

This ain’t no foolin’ around.

It’s been going on for weeks.

And not just in New Jersey. But around New York City, up the Hudson River Valley above Stewart Airport, over in Massachusetts, down in Pennsylvania, and out in Ohio in the vicinity of Wright-Patterson Air Force Base near Dayton Ohio.

Howls of “WTF” echo all over the cable news channels. The US government — that is, the twilighting “Joe Biden” admin — plays dumb.

Alejandro Mayorkas, our unimpeachably frank Homeland Security chief told ABC-News on Sunday “that there’s no question that drones are being sighted.” I’m sure that told you a lot. He went on to explain that the FAA changed its rules last year allowing drones to fly at night. Are we to suppose that avid US drone-owners waited until the very last month of this year to start flying their pet aircraft after dark? Pentagon spox John Kirby, added helpfully at a news conference that federal investigators had been “unable to corroborate reports of any unauthorized drones above New Jersey.”

(Translation: DARPA and other Pentagon ops are too busy figuring out new ways to surveil and kill you to bother with these drone swarms.)

Theories abound and multiply.

One is that these are US Govt drones seeking signals of radioactivity emanating from a nuclear bomb supposedly purloined out of Ukraine’s old Soviet arsenal — and possibly stashed in a shipping container or some-such other hidey-hole along our east coast. It’s a good story. It’s rumored that some-60 Uke nukes from that era have gone missing in the decades since. Of course, the theoretical owner of such a device would have to be pretty dumb to not stash his nuke in a lead-shielded casket to prevent detection. In the meantime, what else can be said or done? Standing by on that mushroom cloud. . . .

Blogger / Author and former White House stenographer (2002 – 2018) Mike McCormick had a neat theory: that shipping interests were testing drone deliveries of imported goods from offshore in an attempt to work-around the longshoreman’s union contract negotiations currently underway.

The union has been fighting against automation that would eliminate the good-paying jobs of 85,000 dock-workers.

Any takers on that one?

Of course, it’s difficult to swallow the govt’s statements that, basically, they dunno nuffins ‘bout no drones. There are enough of them flying over enough varied terrain that surely the USAF could find a way to shoot one down over a cow pasture in, say, Orange County, New York. I’m frankly a little surprised that some enterprising civilian marksman hasn’t popped off a few 7mm Remington mag loads into the hovering lights. At least they haven’t said it’s Santa Claus testing a new high-tech delivery system that would put his old-timey sleigh-and-reindeer out of business.

The theory I lean toward is the notion that “Joe Biden” (meaning the DC blob) is desperately seeking some way to obstruct or fend-off the January 20th inauguration of Mr. Trump. Because, well, to put it bluntly, a whole lot of blobistas are worried about going to jail when the likes of Kash Patel, John Ratcliffe, Tulsi-G, and Pam Bondi get their mitts on the levers of power and start opening up the files. They’ve got thirty-five days to. . . to do something! (Somebody, please do something!!!)

There was a lot of chatter all year long about a coming space alien emergency. I know, sounds preposterous, and even more so when you consider that the military arm of the blob would be so dumb as to try to pass off drones as alien spacecrafts — like something out of a 1950s horror movie when the “special effects” had to be done with puppets and balsa-wood models flying on wires. Maybe it’s actually come to that in this super dumbed-down age. (Are you aware that the main diminishing return of our magical computer tech is that it’s made our society an order-of-magnitude dumber across the board? Well, it has.)

The situation remains fluid, with ongoing investigations and public discourse about the implications and origins of these drone activities.

The FBI is on-the-case (so never fear!) along with Mr. Mayorkas and his outfit, and maybe even the US military.

Chill.

They got this — as Hollywood loves to say. Go shopping. Have a goshdarn eggnog. Shut up.

The month of December has already witnessed several waves of US-supplied long-range ATACMS target inside Russian territory. Many have been intercepted, but others have struck Russian bases.

Russian President Vladimir Putin on Monday addressed a meeting of his defense ministry wherein he warned that the Western allies are pushing Russia beyond a red line. He stressed that this means Moscow is pushed into a situation in which it must retaliate.

He began the comments by accusing the US of seeking “to weaken our country and inflict a strategic defeat”  by continuing “to pump a de facto illegitimate ruling regime in Kiev with weapons and money, sending mercenaries and military advisers, thereby encouraging further escalation of the conflict.”

Putin continued, according an English translation in state media, “They push us to the red line… we begin to respond, and then they frighten their population.” He said that Washington authorities in this way use “simple tactics” to keep the American population in fear, allowing escalation of threats to continue.

According to another translation by Reuters:

The Russian president said: “They [Western leaders] are simply scaring their own population that we are going to attack someone there using the pretext of the mythical Russian threat.

“The tactic is very simple: they push us to ‘a red line’, from which we can not retreat, we start to respond and then they immediately scare their population – in the old days it was with the Soviet threat and now it’s with the Russian threat.”

He not only warned that Russia and other independent nations are facing West-sponsored “hybrid wars” – but that NATO is increasing its force posture in Europe near Russia’s borders.

“The number of American service members in Europe has already exceeded 100,000 troops,“ he said, also noting that Washington’s presence in the Asia-Pacific region has increased too.

Putin in the comments further hinted that though Moscow currently abides by the INF Treaty, even after Washington pulled out, all self-imposed restrictions could immediately be lifted should the US begin deploying its medium and short-range missile systems in violation of the now defunct treaty.

“If the United States begins to deploy such systems, then all our voluntary restrictions will be lifted,” he warned. “The relocation and deployment of these missile systems in Europe and the Asia-Pacific region is already being practiced.”

President-Elect Donald Trump on Monday said that he could immediately reverse the Biden admin’s policy of allowing Kiev to hit Russia with US missiles. He has vowed to rapidly de-escalate and negotiate toward peace.

Chinese brands are targeting Apple iPhone users with low-cost, AI-equipped smartphones in the world’s largest handset market.

Apple’s delayed rollout of “Apple Intelligence” has resulted in a very uninspiring launch of the iPhone 16 in China, while domestic brands are ramping up new low-cost AI-powered smartphones to seize market share from Apple in 2025. 

Goldman’s Allen Chang and Verena Jeng wrote in a note to clients over the weekend that an increasing number of Chinese handset brands are releasing AI smartphones for the mid-end market for as low as $168. 

“While AI features powered by Large Language Model (LLM) were only available for high-end models in the beginning (Read more in our initial AI smartphone report in Nov 2023), in the past 12 months, Chinese smartphone brands have actively expanded the AI coverage to mid-end segment,” the analysts said. 

How can Apple compete with $168 models, with the one featured below from the Chinese brand Honor? 

“Given Chinese New Year will be around the end of January, we expect more model launches from Feb-Mar after the holiday,” the analysts said. 

Meanwhile, Counterpoint’s third quarter shows Apple’s market share fell 2.6% year-on-year to 13.5%, while domestic brands gained ground: Vivo’s share increased by 10%, Huawei jumped by 30%, and Xiaomi increased by 13%. However, Oppo and Honor experienced slight declines. 

In October, China’s third bestselling smartphone brand, Xiaomi, pointed out that its new smartphone “comprehensively surpasses” the iPhone 16 Pro in AI capabilities. 

Apple Intelligence is so far unavailable in China…

The big question for CEO Tim Cook is how Apple will compete—will the iPhone SE gain AI capabilities?—as domestic Chinese brands roll out AI-equipped smartphones in the mid-end market for as little as $168.

Authored by Onkar Singh via CoinTelegraph.com,

Key takeaways

• Cryptocurrencies like Bitcoin gain value from factors like scarcity, utility and security, not physical backing.

• Common methods to calculate intrinsic worth of a cryptocurrency include Metcalfe’s Law, cost of production and discounted utility models.

• Estimating intrinsic value is challenging due to market volatility and speculative data.

• Fiat currencies have no intrinsic value, relying on trust, while cryptocurrencies’ value is based on decentralization and scarcity.

Intrinsic value refers to the actual worth of an asset based on its fundamental characteristics, rather than its market price. For example, in traditional finance, the intrinsic value of a stock is often derived from factors such as earnings, cash flow and growth potential.

In cryptocurrencies, it’s not so straightforward. Since crypto assets are not tied to physical entities or consistent income streams like dividends, assessing their intrinsic value involves a mix of factors — technological, economic and utility-driven. In simple terms, intrinsic value answers the question: What makes this cryptocurrency valuable beyond its price on an exchange?

The intrinsic value of cryptocurrencies is derived from factors such as:

• Utility: What problems does cryptocurrency solve?

• Scarcity: Is the supply limited or inflationary?

• Network value: How large and active is the ecosystem?

• Security: How resilient is the blockchain against attacks?

For example, Bitcoin’s BTC$106,649 intrinsic value lies in its fixed supply (21 million coins), decentralized network and security powered by proof-of-work (PoW) mining. 

On the other hand, Ethereum derives much of its value from being the backbone of decentralized applications (DApps) and smart contracts. 

Did you know? A June 2024 report by Triple A reveals that global crypto ownership rose to 562 million, up from 420 million in 2023, covering 6.8% of the population, with Asia leading the growth.

How to calculate intrinsic value of cryptocurrencies: Three common methods

Let’s move beyond theory and explore three widely-used methods to estimate a cryptocurrency’s intrinsic value.

1. Metcalfe’s Law

• What it is: Metcalfe’s Law states that the value of a network is proportional to the square of its active users. Essentially, as more people use a network, its value grows exponentially.
• How to apply it: This method is particularly relevant for cryptocurrencies with strong ecosystems and active users. It is calculated using the following formula:

Example: Ethereum

Ethereum is a vast ecosystem of developers, DApps and DeFi projects. Its value is bolstered by thousands of developers actively building on its blockchain and millions of users engaging with its applications. Specifically, the number of daily active addresses can serve as a proxy for its “network size.”

As of Dec. 13, 2024, according to YCharts, Ethereum’s daily active addresses stand at 543,929. Here’s how you can apply Metcalfe’s law:

Network value = (543,929)2 = 296,086,104,841 or 296 billion units approx  (a relative measure, not in USD). 

This shows how the network value grows exponentially with the number of users. If Ethereum’s daily active addresses increase, the network’s value increases at an even faster rate.

Challenges

• Oversimplification: Metcalfe’s Law doesn’t account for the quality of user interactions. A network of 1,000 inactive users is less valuable than a smaller, highly engaged network.
• Data accuracy: Estimating the number of “active” users is tricky, especially with bots and spam accounts inflating metrics.
• Comparative limitations: Some blockchain networks may have lower user counts but offer faster transaction speeds. Metcalfe’s Law alone doesn’t capture these differentiators.

2. Cost of production

• What it is: This method calculates a cryptocurrency’s intrinsic value based on the cost to produce or mine it. For PoW blockchains like Bitcoin, this includes electricity, hardware and operational costs.
• How to apply it: Production costs act as a “floor” for the cryptocurrency’s value because miners won’t continue operations if market prices fall below their expenses.

Example: Bitcoin

Bitcoin’s intrinsic value is often anchored to its mining cost.

• As of Dec. 13, Bitcoin’s average mining cost is $86,303, while its market price was $101,523. This indicates that Bitcoin’s intrinsic value, based on mining costs, is at least $86,303. When the price exceeds this cost, mining remains profitable, incentivizing miners to secure the network. If Bitcoin’s price falls below the cost of production, miners may stop mining due to unprofitability, potentially impacting network security. The difference of $15,220 between the price and mining cost reflects a healthy market, where mining continues to be incentivized and the network remains secure.
• During the 2022 bear market, Bitcoin’s price briefly fell to $16,000, below the production cost for some miners ($20,998). This negative difference of $4,998 meant that miners were losing money for each Bitcoin they mined. When this happens, less efficient miners may be forced to shut down, reducing the network’s hashrate and security while also causing difficulty adjustments to eventually bring costs more in line with market prices.

Challenges

• Regional variance: Mining costs differ globally. For instance, miners in Kazakhstan or Texas benefit from cheap electricity, while those in Europe face higher costs. However, many miners are moving toward renewable energy sources, such as solar or wind power, to lower costs and become more environmentally sustainable.
• Market volatility: Bitcoin’s price can temporarily fall below production costs, especially during market downturns.

3. Discounted utility model

• What it is: This approach estimates a cryptocurrency’s intrinsic value by projecting its future utility, such as transaction volume or adoption, and discounting that value to the present.
• How to apply it: Analysts evaluate potential use cases, adoption rates and transaction activity, then discount the future benefits using a specific discount rate.

Example: BNB

BNB BNB$718.20 derives its intrinsic value from its role in the Binance ecosystem.

BNB is used to pay transaction fees, participate in token sales and access staking rewards. According to YCharts, as of Dec. 14, the BNB Smart Chain processes about 3.795 million transactions per day. Analysts can calculate the discounted value of these transaction fees over time to estimate BNB’s intrinsic worth.

Here’s how you can use the discounted utility model to estimate BNB’s intrinsic value:

Assuming the average fee per transaction is $0.10, the daily transaction fees total:

3,795,000 × 0.10 = $379,500 or 0.3795 million per day

This translates to an annual transaction fee of:

379,500 × 365 (non-leap year) = $138.52 million per year

To calculate the intrinsic value of BNB over the next 10 years, you could apply a 10% discount rate. Using the discounted value formula below, the total discounted value of BNB’s expected transaction fees over 10 years is $851.13 million.

Here are the discounted values for each year based on $138.52 million annual transaction fees, discounted at a 10% rate for 10 years (inputting values in the above formula):

In the example above, the hypothetical scenario was used to demonstrate how discounted utility models could be applied to estimate the intrinsic value of BNB, assuming transaction fees were constant over time. However, real-world fees vary, and factors such as BNB discounts, account level and transaction types play a crucial role in determining the exact cost.

Challenges

• Speculative data: Estimating future transaction volumes and adoption rates involves guesswork.
• Discount rate sensitivity: Small changes in the discount rate significantly impact the valuation.
• Ecosystem changes: If Binance faces regulatory issues or competition, BNB’s utility might decline, invalidating earlier projections.

Why don’t fiat currencies have intrinsic value?

Fiat currency, like the US dollar or the euro, does not have intrinsic value in the traditional sense. Unlike gold or silver, fiat money isn’t backed by a physical commodity. Its value is instead derived from factors like government decree, trust and its ability to serve as a medium of exchange. Even scholarly literature defines fiat money as “an intrinsically useless unbacked token.” 

• No tangible backing: Fiat money is not redeemable for gold, silver or any physical asset. The “gold standard” system was abandoned by most countries decades ago.
• Value based on trust: The worth of fiat depends on people’s belief in the government’s ability to manage the economy and honor its debts. For example, the US dollar is trusted because of the economic and political stability of the United States.
• Unlimited supply: Governments and central banks can print fiat money at will, which means its supply isn’t fixed, unlike BTC or gold. This makes fiat susceptible to inflation, which erodes its purchasing power over time.

You might be wondering how fiat currencies work. Let’s find out.

How is fiat value maintained?

Even without intrinsic value, fiat currency works because of:

• Legal tender laws: Governments mandate using fiat currency for taxes and debts. For example, in the UK, taxes must be paid in pounds.
• Economic utility: Fiat is highly liquid, universally accepted, and easy to use in daily transactions, making it valuable for practical purposes.
• Backing by institutions: Central banks and financial systems create “trust” by managing fiat issuance and ensuring stability.

The debate over whether fiat or crypto has “real” value often highlights the following differences:

To further understand the above distinction, let’s interpret it through the lens of the definitions provided in the Oxford Handbook of Value Theory (p.29), which defines intrinsic value as “what is valuable for its own sake, in itself, on its own, in its own right, as an end, or as such.” In contrast, extrinsic value is “what is valuable as a means, or for something else’s sake.” 

Based on the above definitions, fiat currencies have no intrinsic value; their worth comes from government backing and legal frameworks (extrinsic value). Bitcoin, however, possesses qualities that make it independently valuable through its scarcity (21 million cap), decentralization and utility as a trustless, peer-to-peer network. 

While fiat relies on centralized trust, Bitcoin’s value stems from its unique, self-sustained properties, sparking debate about its intrinsic worth.

Did you know? The 2008 global financial crisis shattered trust in the traditional banking system. It exposed reckless lending practices, flawed regulations and the fragility of institutions once deemed “too big to fail.” This erosion of trust fueled the search for alternatives, eventually paving the way for Bitcoin’s creation in 2009 as a decentralized, trustless financial system.

Why intrinsic value matters

Understanding intrinsic value helps investors separate strong projects from speculative ones. During the 2017 ICO boom, thousands of tokens were launched with little to no intrinsic value. Many collapsed because they lacked the fundamental characteristics — utility, security or scarcity — to sustain long-term demand.

By focusing on intrinsic value, you can make informed decisions and avoid falling for hype. For example, Bitcoin remains dominant because it demonstrates strong intrinsic value through scarcity, network effects and utility, while many other tokens fade away.

Finally, the key to understanding the intrinsic value of crypto versus fiat lies in grasping the correct meaning of intrinsic versus extrinsic value and how it applies to each.

Update (2:30pm ET): Canada’s CTV News reports that Prime Minister Justin Trudeau is considering interrupting Parliament (prorogation) or resignation according to unnamed sources. The sources say he has spoken to his cabinet and plans to address Parliament later on Monday. This comes after finance minister Chrystia Freeland resigned earlier on Monday citing disagreements over how to deal with tariff threats from US president-elect Donald Trump.

If confirmed, it would mean government collapse in 4 of the staunchest, and most developed “non-banana republic” Western democracies: France, Germany, South Korea and now Canada. And, of course, we use the term “non-banana republic” sarcastically.

As for Turdeau, his odds of being Tru-done just spiked to 88% on Polymarket.

Odds Trudeau is out before April just hit 88%.

Trudone? pic.twitter.com/Fo6cWd00eU

— Polymarket (@Polymarket) December 16, 2024

* *  *

In a stunning move that shakes the government, Canadian Finance Minister Chrystia Freeland has resigned from Prime Minister Justin Trudeau’s cabinet after he tried to move her to a different role.

Freeland has been the most powerful person in Trudeau’s cabinet for years, and was the point person in strategizing how to counter US President-elect Donald Trump’s threat to impose 25% tariffs.

Trudeau has now seen the departure of two finance ministers in a little more than four years.

Freeland got the job in 2020 after the prime minister had a falling out with then-Finance Minister Bill Morneau over issues such as spending on Covid-related income support programs.

Freeland released her statement in a post on X, pulling no punches (emphasis ours):

Dear Prime Minister,

It has been the honour of my life to serve in government, working for Canada and Canadians. We have accomplished a lot together.

On Friday, you told me you no longer want me to serve as your Finance Minister and offered me another position in the Cabinet.

Upon reflection, I have concluded that the only honest and viable path is for me to resign from the Cabinet.

To be effective, a Minister must speak on behalf of the Prime Minister and with his full confidence. In making your decision, you made clear that I no longer credibly enjoy that confidence and possess the authority that comes with it.

For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada.

Our country today faces a grave challenge. The incoming administration in the United States is pursuing a policy of aggressive economic nationalism, including a threat of 25 per cent tariffs.

We need to take that threat extremely seriously. That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.

That means pushing back against ‘America First’ economic nationalism with a determined effort to fight for capital and investment and the jobs they bring. That means working in good faith and humility with the Premiers of the provinces and territories of our great and diverse country, and building a true Team Canada response.

I know Canadians would recognize and respect such an approach. They know when we are working for them, and they equally know when we are focused on ourselves.

Inevitably, our time in government will come to an end. But how we deal with the threat our country currently faces will define us for a generation, and perhaps longer. Canada will win if we are strong, smart, and united.

It is this conviction which has driven my strenuous efforts this fall to manage our spending in ways that will give us the flexibility we will need to meet the serious challenges presented by the United States.

I will always be grateful for the chance to have served in government and I will always be proud of our government’s work for Canada and Canadians.

I look forward to continuing to work with my colleagues as a Liberal Member of Parliament, and I am committed to running again for my seat in Toronto in the next federal election.

Meanwhile, the Loonie has hit its weakest against the dollar since the COVID lockdown lows…

Freeland’s resignation follows that of Housing Minister Sean Fraser over the weekend, who notably doesn’t plan to run in the next federal election.

Perhaps Freeland and Fraser see the painful writing on the wall for their boss…

As we highlighted in a recent post, Turdeau’s government (sic) would have no choice but to respond if Trump simply exempted energy while hitting all other Canadian products, said Bloomberg sources, adding that’s a scenario that could prompt the use of export taxes by Canada.

But for the prime minister, going down this path would cause serious political divisions within Canada. Oil, uranium and potash production are concentrated in the western provinces of Alberta and Saskatchewan. 

Those provinces are the strongest voter base for Conservative Leader Pierre Poilievre, and their provincial governments are staunch right-wing opponents of Trudeau.

In short, while Turdeau may retaliate in a Trump trade war, such an action will likely be his last.

Authored by Simon White, Bloomber macro strategist,

The latest Federal Flow of Funds data for the third quarter was released Thursday and shows that US households are now as long equities as they ever have been, with data going back to the 1940s. 

This is another indication of the zeal for US stocks, and points to poor long-term returns.

The household sector’s stock ownership is now at 39% of financial assets, exceeding the high reached in 2021.

US households are the largest owners of stocks, owning 44% of the outstanding supply.

It’s not just households though, the cross-sector (households, corporates, financials and foreigners) ownership of equities also hit an all-time high compared to financial assets held.

When everybody is already long, it’s harder for prices to keep appreciating indefinitely.

President-elect Donald Trump is poised to spark what we’re calling “Dronegate,” alleging on Monday afternoon that the Biden administration is fully aware of the mysterious drone sightings over New Jersey. Trump accused the administration of fueling the mass hysteria that has gripped the nation. 

“The gov’t knows what is happening … look … our military knows where they took off from … and for some reason, they don’t want to comment. And I think they would better off commenting on what it is … our military knows and our president knows … and for some reason they want to keep people in suspense,” Trump told reporters. 

Trump said, “I can’t imagine it was the enemy because if it was the enemy, we would blast it. Something strange is going on and for some reason they don’t want to tell the people.” 

“I decided to cancel my trip to Bedminster (Trump National Golf Club Bedminster),” he said. 

He told the press he did not want to comment on the intelligence briefing about the drones. 

🚨 JUST IN: Trump says the White House KNOWS where the drones are coming from, but are hiding it from the public

“The government knows what is happening. Our military knows where they took off from. They know where it came from and where it went.”

“Something strange is going… pic.twitter.com/RtREXWzPpq

— Nick Sortor (@nicksortor) December 16, 2024

Meanwhile, DHS Secretary Alejandro Mayorkas told the American people on Sunday, “We know of no foreign involvement with respect to the sightings in the Northeast.”

“There’s no question that people are seeing drones. And I want to assure the American public that we, in the federal government, have deployed additional resources, personnel, technology, to assist the New Jersey State Police in addressing the drone sightings,” Mayorkas said.

On Saturday, we explained one theory of how the purported drone sightings could be psyop to manipulate lawmakers into passing the new H.R.8610 (Counter-UAS Authority Security, Safety, and Reauthorization Act of 2024), which will include appropriations and enhanced government counter-drone powers. 

Coincidentally, a Homeland Security joint subcommittee held a hearing on H.R.860 last week. This bill would renew current counter-UAS legal authorities and strengthen the FAA’s oversight powers of drones, which expires on Friday. 

NJ Drone ‘Invasion’ Just In Time For Congress To Reauthorize Orwellian Law https://t.co/6tLkbDAP8u

— zerohedge (@zerohedge) December 14, 2024

A separate but less likely theory comes from Saxon Aerospace’s John Ferguson: “My belief is that these drones are trying to smell something on the ground – if that’s gas leaks or radioactive material – or whatever.” 

New Theory: NJ Drone Sightings May Be “Nuclear Sniffers” Following Elevated NYC Radiation Levels https://t.co/4K9GTgNBYt

— zerohedge (@zerohedge) December 15, 2024

Hmm. 

New Jersey Receives Report Radioactive Medical Device “Lost In Transit” https://t.co/wq6zM8O7OG

— zerohedge (@zerohedge) December 16, 2024

Even the Washington Post’s Josh Rogin called out Biden for “the lack of disclosure is damaging public trust.” He added that it’s time for the feds “to come clean.” 

If these really are Defense Department drones doing radiation sniffing for possible dirty bombs, one could understand why they wouldn’t want to admit that & panic people. But at this point, the lack of disclosure is damaging public trust. Time to come clean.

— Josh Rogin (@joshrogin) December 15, 2024

This administration needs more transparency with the American people. With Trump, the American people are hopeful for more openness and accountability. The feds putting the American people in weeks of ‘suspense’ is unacceptable.

Update: 

A law enforcement source told ABC News on Monday morning that the FBI and the Department of Homeland Security have deployed infrared cameras and other drone detection sensors across New Jersey and New York to capture clear footage of the reported drone sightings. 

Additional color on the situation from ABC’s source:

The agencies are also looking at social media and other photos to determine what exactly is in the photos. Most of the photos and video depict manned aircraft, according to a law enforcement source.

There have also been no reports from pilots about seeing any drones in the sky, according to the source.

Another other issue federal authorities are dealing with: over-reporting of potentially seeing drones, according to the source. In the New York-New Jersey area, where they are being spotted, there are very few restrictions.

There have been over 1,000 reported sightings in New Jersey, with some witnesses saying they’ve spotted ‘truck-sized’ drones.

As we’ve previously noted: “NJ Drone ‘Invasion’ Just In Time For Congress To Reauthorize Orwellian Law.”

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Authored by Melanie Sun via The Epoch Times,

Senate majority leader Chuck Schumer (D-N.Y.) on Sunday called for the federal government to use its powers to identify who is behind the mysterious drones being reported hovering in U.S. airspace above concerned residents.

“New Yorkers have tremendous questions about it. We are going to get the answers for them,” Schumer told reporters after he asked the U.S. Department of Homeland Security (DHS) to deploy their drone-tracking technology to identify the unidentified drones and their operators.

He suggested the federal government use a recently declassified radio wave technology to investigate the flying objects. The radio wave detector can be attached to a drone or airplane and can determine whether another flying object is a bird or a drone, read its electronic registration, and follow it back to its landing place.

So far, briefings by government officials regarding drones sightings reported in multiple locations across the United States have added little clarity to the situation.

“There’s no question that people are seeing drones,” U.S. Homeland Security Secretary Alejandro Mayorkas told ABC’s George Stephanopoulos on Sunday. “But I want to assure the American public that we are on it. We are working in close coordination with state and local authorities.”

Some of the drones reported in parts of New York and New Jersey have turned out to be “manned aircraft that are commonly mistaken for drones,” Mayorkas said. “We know of no foreign involvement with respect to the sightings in the Northeast. And we are vigilant in investigating this matter.”

Mayorkas said that certain agencies within DHS have the power to “incapacitate” drones. “But we need those authorities expanded,” he said.

Members of Congress from both political parties are demanding transparency, better technology, and more power to deal with the drones. Schumer noted that state and local authorities do not have the authority to track drones.

Many are voicing support for passing the Counter-UAS Authority Security, Safety, and Reauthorization Act to strengthen FAA oversight of drones and extend authorities to track drones to state and local authorities. UAS stands for unmanned aerial vehicle.

Over the last month, dozens of unidentified drone-like objects have been reported flying in from the ocean over parts of New Jersey, including residential areas, each night, raising concerns about safety and national security. Initial reports had the objects flying near Picatinny Arsenal, a U.S. military research and manufacturing facility.

This week, more potential sightings were reported along the northern East Coast, as well as in other parts of the country like California, according to news reports. While some sightings were actually of commercial planes mistaken for drones, others have been confirmed as sightings of unidentified drones.

Drones are legal in the state as long as they comply with local and Federal Aviation Administration (FAA) regulations and flight restrictions. Operators must also be FAA certified.

Last year, federal aviation rules also began requiring that drones weighing 0.55 pounds (250 grams) or more broadcast real-time their remote identification, including the location of their operators, to improve the safety and security of U.S. airspace.

“What the drone issue points out are gaps in our agencies, gaps in our authorities between the Department of Homeland Security, local law enforcement, the Defense Department,” Rep. Mike Waltz (R-Fla.), who has been chosen to serve as President-elect Donald Trump’s national security adviser, said on CBS’s “Face the Nation” on Sunday.

“Americans are finding it hard to believe we can’t figure out where these are coming from.’’

The top Democrat on the House Intelligence Committee Rep. Jim Himes (D-Conn.) also said on “Fox News Sunday,” “There’s a lot of us who are pretty frustrated right now.”

“‘We don’t know’ is not a good enough answer.”

On Saturday, Rep. Nicole Malliotakis (R-N.Y.) said he believes that the source of drone activity was the U.S. government, and urged for transparency with the public over the mysterious aerial activity, which has also been reported at U.S. military facilities overseas, including the U.S. Air Force base at Ramstein, Germany.

“I don’t believe that they’re commercial,” Malliotakis told “Fox Report” on Saturday, saying that it was unlikely commercial flights are violating FAA regulations by flying late at night.

“I would think that if it was a foreign government, with our military capabilities, we would be taking significant action. It does seem to me that this would be activity from our own government. I’m not sure if it’s related to counterterrorism efforts or what exactly is the purpose, but they should be honest and just tell the public.

“When people are nervous, when people are concerned, it leads to all sorts of theories, all sorts of misinformation being spread, and that is exactly what you’re seeing take place.”

New York Gov. Kathy Hochul said on Sunday that the Biden Administration has agreed to send a drone detection system to her state.

“I am grateful for the support, but we need more. Congress must pass a law that will give us the power to deal directly with the drones,” she said on X.

New Jersey Gov. Phil Murphy also asked the Biden administration for more resources to investigate the drones.

White House national security communications advisor John Kirby previously said the drones reported in New Jersey are not a threat to national security.

“We have no evidence at this time that the reported drone sightings pose a national security, or a public safety threat, or have a foreign nexus,” White House national security spokesman John Kirby said during a Dec. 12 press briefing.

Trump has called for U.S. officials to provide transparency to the American people about the origin of the drones.

“Otherwise, shoot them down!!!” the president-elect wrote on social media on Dec. 13.

Europe is disintegrating as legacy political regimes are collapsing over across the world.

Just one week after Marine Le Pen precipitated the collapse of the French government, on Monday, Chancellor Olaf Scholz lost a confidence vote in the German Parliament on Monday, a defeat that effectively ended the increasingly unpopular government he has led since 2021 and ushered in elections early next year.

German lawmakers voted to dissolve the existing government by a vote of 394 to 207, with 116 abstaining.

The collapse of the government just nine months before elections had been scheduled was an extraordinary moment for Germany, once Europe’s powerhouse but now a laughingstock at the mercy of both China and Russia. This will be only the fourth snap election in the 75 years since the modern state was founded, and it reflected a new era of more fractious and unstable politics in a country long known for durable coalitions built on plodding consensus.

The confidence vote, in the same month that the French government fell, deepens a crisis of leadership in Europe at a time of mounting economic and security challenges. The war in Ukraine has reached a pivotal moment, with Russia set to make decisive territorial gains and perhaps even push on toward Kiev, while president-elect Donald J. Trump is set to take office in the United States. And now, Europe’s largest and second largest economies are in the hands of a caretaker governments, as the continent is sent reeling in a tailspin of chaos and revulsion to the status quo.

Scholz had little choice but to take the unusual step of calling for the confidence vote after his three-party coalition splintered in November, ending months of bitter internal squabbling and leaving him without a parliamentary majority to pass laws or a budget. And now, the political uncertainty could last for months. The elections are expected to be held on Feb. 23, but even if, as expected, his party does not finish first, Scholz would remain in place as a caretaker chancellor until weeks after that. He would step down only after a new coalition forms, which will probably not happen until April or May according to the NYT..

Seven parties will go into the campaign for Parliament with a realistic chance of gaining seats, and some on – especially on the right – are poised for very strong showings, according to polls.

The campaign is likely to be dominated by several issues that have roiled Europe in recent years. Germany and France, traditionally the two most influential countries in the European Union, are mired in debates over how best to revive their struggling economies, breach growing social divides, ease voter anxieties over immigration and buttress national defense.

Meanwhile, the establishment EU partners are looking warily toward Russia, where Putin has escalated threats about the use of nuclear weapons amid Moscow’s war against Ukraine, and where states like Germany have been providing Kiev with long-range missiles to be used deep inside Russia, in the process ensuring that relations with Moscow are abysmal for years to come.

And in typical social-democrat fashion, the leading European politicians have also been vexed by their deteriorating economic relationship with China, which has grown into a formidable competitor for many of their most important industries but has not become the booming consumer market for European products that leaders long envisioned. Instead, China has promptly become the world’s biggest producer of cars, making a mockery of what was once Germany’s most important and profitable industry, and no lies in tatters.

And they are bracing for the start of the new presidential term for Trump, who has threatened a trade war and the end of the United States’ commitment to the NATO alliance that has guaranteed Europe’s security for 75 years.

The combination of challenges has proved politically catastrophic for Europe’s legacy powers. French President Emmanuel Macron on Friday named his fourth prime minister in a year and is under mounting pressure to resign. Macron says he will stay in office and try to repair the deep fissures in his government over the 2025 budget. Scholz’s government faced similar budget challenges, along with growing concerns about how to rebuild the German military in the face of a belligerent Russia and Trump’s criticism of NATO.

As even the liberal NYT admits, it is an inopportune time for Germany to be plunged into a grueling winter election campaign and a political freeze that could last until a new government takes power.

The even more liberal Bloomberg News, made a stunning admission that “Germany’s Economy Is Unraveling Just as Europe Needs It Most”, and notes that “Germany is reaching a point of no return. Business leaders know it, the people in the country feel it, but politicians haven’t come up with answers.”

That has set Europe’s largest economy on a path of decline that threatens to become irreversible.

Following five years of stagnation, Germany’s economy is now 5% smaller than it would have been if the pre-pandemic growth trend had been maintained.

In short, Germany is heading straight for a historic economic and political collapse.

“The timing is absolutely terrible for the E.U. — basically, these multiple crises are hitting the E.U. at the worst possible time, because the bloc’s traditional engine is busy with itself,” Jana Puglierin, of the European Council on Foreign Relations, said, referring to Germany and France.

The war in Ukraine and the need to bolster Germany’s military — and what that will cost — will be among the urgent issues likely to dominate the election campaign, along with the floundering economy, failing infrastructure, immigration and the rise of the political extremes. Badly behind in the polls, Scholz is planning to highlight his caution when supplying Ukraine with weapons, especially sophisticated offensive hardware. Which, of course, is a U-turn to Germany’s legacy position which was literally the opposite, and took advantage of every opportunity to arm Zelensky and deposit more euros into his slush fund.

In any case, Scholz will have to fight hard to persuade voters to give him another chance. For now, it is Mr. Merz, a longtime figure on the political stage, who is widely expected to be the next chancellor, given his party’s strong lead in polls.

The three other mainstream parties are also led by well-known politicians, two of whom held important posts in the government: Christian Lindner, leader of the pro-business Free Democrats, whose falling out with the chancellor helped precipitate the collapse of the coalition; and Robert Habeck, the economic minister and lead candidate for the left-leaning Greens.

But in Germany’s fractious political landscape, no single party is likely to win an outright majority, leading to potentially tricky negotiations to build a coalition more functional and durable than the one that failed.

That necessity probably means that opponents cannot be criticized too heavily because they are all potential coalition partners. But it may also present mainstream parties with difficult decisions about whom they chose to work with.

All of the mainstream parties have said they would refuse to partner with the conservative Alternative for Germany, parts of which are being monitored as a threat to the Constitution by the domestic security services. Nonetheless, the party, which is known as the AfD and is ascendant in the polls with 18 percent approval, continues to gain ground.

As noted at the time, in the closely watched state elections in September, both the AfD and a newer, extreme-left party, the Sahra Wagenknecht Alliance, had their best showings ever. But mainstream parties still consider them an anathema, making it hard to form governing coalitions in those states. The results could portend equally messy coalition haggling in Berlin after a national vote, though the political fringes are less popular nationally than they are in those eastern states.

But given the likely vote tally, many political watchers predict a return of the grand coalition of the center between the conservative CDU and the progressive Social Democratic Party, which governed Germany for 12 of the past 20 years.