Authored by Tsvetana Paraskova via OilPrice.com,

Chinese President Xi Jinping is expected to visit Saudi Arabia by the end of this year as the world’s top oil importer and the top oil exporter strengthen energy and strategic ties while U.S.-Saudi relations are at a historically low level.   

China’s Xi is set to meet with Saudi Arabia’s Crown Prince Mohammed bin Salman during a visit to the Kingdom expected to take place this month or next, sources with knowledge of the preparations for the official visit told The Wall Street Journal on Monday.

China – the world’s largest importer of oil and a major customer of Saudi Arabian crude – and the Kingdom have deepened ties in recent years, including in the energy sector.

Last month, Saudi Arabia and China jointly stressed the importance of stable long-term crude supply to the market. Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, and Zhang Jianhua, the director of China’s National Energy Administration (NEA), have also agreed to continue cooperation in their efforts to keep the global crude oil market stable, according to the Saudi Press Agency.

Xi’s visit to Saudi Arabia at a time of major turmoil in the oil market and geopolitics with the Russian invasion of Ukraine signals China’s intention to increase its influence in the Middle East, where the U.S. was, until recently, the world superpower with the biggest influence. The Chinese president’s visit also suggests that Saudi Arabia considers its relationship with China one of strategic importance.

While the Chinese and the Saudis are strengthening their relations, U.S.-Saudi relations are at a low point, especially after the U.S. Administration slammed Saudi Arabia and the OPEC+ group for what it described as a “short-sighted” and “misguided” decision to reduce their target oil production by 2 million barrels per day (bpd) as of this month. 

Since the U.S. started criticizing the OPEC+ move, multiple OPEC+ producers, including Saudi Arabia, have defended the group’s decision to reduce production, saying it was dictated by technical analysis and had no political intentions whatsoever.

Republican members of the House Judiciary Committee released a massive report on Friday detailing whistleblower disclosures about the politicization of the Justice Department (DOJ) and FBI under Attorney General Merrick Garland and FBI Director Christopher Wray.

According to the report, Garland has been a “willing participant of the Biden Admin’s weaponization of law enforcement,” while the FBI has “abused its law-enforcement authorities for apparently political purposes.”

What followed was a laundry list of incidents and whistleblower reports illustrating how politicized federal law enforcement has become.

What’s more, the report shows that the FBI has been inflating domestic extremism figures to fit an agenda.

One of the most significant findings of the report showed that the FBI has been encouraging its agents to artificially inflate the number of domestic violent extremism (DVE) incidents.

For years, Democrats—including President Joe Biden—have claimed that DVE events comprise one of the largest threats to American national security. Specifically, Democrats have blamed conservatives and “white supremacists” for most such incidents.

During the 116th Congress, Democrats even went so far as to propose a bill that would substantially bolster DOJ resources to combat DVE. –Epoch Times

“White supremacists and other far-right-wing extremists are the most significant domestic terrorism threat facing the United States,” reads the bill.

According to the whistleblowers, however, “FBI leadership is pressuring line agents to reclassify cases as domestic violent extremism even if the matter does not meet the criteria.”

“At a time when the Biden Administration maintains that DVE is the ‘greatest threat’ facing the United States, the FBI appears to be complicit in artificially creating the Administration’s political narrative,” wrote the Republican lawmakers, who say the agency is fostering an environment that puts pressure on agents to rack up DVE case counts.

“One whistleblower explained that because agents are not finding enough DVE cases, they are encouraged and incentivized to reclassify matters as DVE cases even though there is minimal, circumstantial evidence to support the reclassification,” says the report.

The FBI has also fudged field office numbers to fit the DVE narrative – and “is misrepresenting the scale of [DVE]” by categorizing various investigations stemming from the Jan. 6 Capitol police as organic cases discovered by local field offices, rather than a single investigation of a single incident.

“In both ways, the FBI is fueling the Biden Administration’s narrative that domestic violent extremism is the biggest threat to our country,” wrote the Republicans.

The Federal Bureau of Investigation, under the stewardship of Director Christopher Wray and Attorney General Merrick Garland, is broken.

Read our 1,000 page report on just how bad it is. https://t.co/fKmSYWBdLb

— Rep. Jim Jordan (@Jim_Jordan) November 4, 2022

More via The Epoch Times;

Incidents Manufactured

In at least one case of DVE, the attempted kidnapping of Michigan Gov. Gretchen Whitmer, the FBI played a much more active role.

Ahead of the 2020 election, a plot was uncovered to kidnap Whitmer, whose COVID policies sparked intense national debates before the election.

The alleged would-be kidnappers were right wing, and originally reports suggested that the plot had developed organically.

But during the trial for the men, it became obvious that this was not the case: defense attorneys argued that their clients were pushed into crime by the FBI. According to defense attorneys during the trial, at least 12 FBI informants and agents were involved in the plot.

Despite the legal questions raised by defense attorneys, the three men were later convicted.

GOP efforts to get answers about the incident were met with silence, the report noted. Thus, the FBI’s motives in assisting the plot remain unclear.

Targeting Conservatives

To bolster their claims of politicization by the FBI, Republicans cited several incidents involving targeted use of federal resources against conservatives.

For instance, Republicans noted Garland’s infamous “school board memo” as a case in point.

In a September 2021 letter to President Joe Biden, the National School Boards Association (NSBA) characterized disruptions at school board meetings across the nation as “a form of domestic terrorism and hate crime.”

Specifically, the NSBA was referencing an increasing number of parents across the United States attending school board meetings to voice their opposition to the content being taught their children—including controversial, Marxism-inspired critical race theory, far-left-wing positions on sexuality and gender, and, in some cases, even explicit or pornographic sexual images.

The NSBA proceeded to ask for federal assistance in dealing with these frustrated, outspoken parents—assistance that Attorney General Merrick Garland promptly provided.

Days after the NSBA letter, Garland issued a memo directing federal law enforcement to help address the alleged “disturbing spike in harassment, intimidation, and threats of violence” against teachers and school leaders. Garland’s response immediately raised suspicions among some Republican members of Congress, who have sought to keep the issue alive and have responded with promises like a “parents’ bill of rights” if they take Congress next year.

In their report, Republicans called this affair “unacceptable.”

“As the radical left continued to push a woke agenda on America’s children, parents across the country started to speak out at school board meetings against critical race theory, mask mandates, and controversial curricula,” they wrote. “As more parents spoke out, the [NSBA] and the Biden Administration colluded to create a justification, articulated in an October 4 memorandum from Attorney General Garland, to use federal law-enforcement tools to silence parents.

“Committee Republicans have repeatedly called on Attorney General Garland to rescind his ill-conceived memorandum that brought the heavy hand of federal law enforcement down upon America’s parents,” they added.

These calls have of course gone unanswered.

“It is unacceptable for the Biden Administration to use federal domestic terrorism resources to target American parents,” the lawmakers said. “The use of these resources chills protected First Amendment activity as parents rightfully fear that their passionate advocacy for their children could result in a visit from federal law enforcement.”

Republicans have made clear that they aren’t finished with the issue: on Oct. 13, Judiciary Committee Ranking Member Jim Jordan warned Garland to preserve all documents related to the memo in preparation for further GOP investigation.

Also mentioned in the report was the shocking decision by the FBI to mount an unprecedented raid on President Donald Trump’s Mar-a-Lago Florida home.

The raid was allegedly seeking classified documents that Trump had brought with him from the White House.

However, Republicans insisted that such an unprecedented raid should not have been undertaken lightly, and Republicans have pointed to the raid as another instance of political bias by federal law enforcement.

Suppressing Opposition Reports

Additionally, the report notes the FBI’s role in suppressing the since-authenticated story about Hunter Biden’s laptop, with Republicans saying that Biden has received “preferential treatment from federal law enforcement.”

The contents of the laptop included several photos of Hunter Biden in sexual situations, sometimes with people who appeared to be substantially younger than 18. Others showed the president’s son using drugs like crack cocaine. Still, other sections of the laptop’s contents raised questions about the Bidens’ business dealings, with some emails and texts suggesting that Hunter Biden may have peddled his father’s prestige and influence for pecuniary gain.

The story was discovered by the New York Post, a conservative-leaning media outlet founded by Alexander Hamilton. After posting the story to their Twitter page, the New York Post was suspended pending the removal of the story. Similar suppression followed with other media outlets who reported on the contents of Hunter Biden’s laptop.

According to the report, some of this may not have been organic behavior by social media platforms.

The Judiciary Republicans noted that, during an August 2022 appearance on Joe Rogan’s podcast, Meta CEO Mark Zuckerberg admitted that Facebook had suppressed the story at the FBI’s urging.

At the same time, dozens of national security and federal law enforcement agents signed a letter at the time claiming that the story was Russian disinformation—a claim which has since been shown to be patently untrue.

Around the same time, Republicans unveiled a report showing that the FBI had been aware of the allegations surrounding Biden’s business dealings with Chinese and Ukrainian interests for years, but had not taken action to look into the potential national security threat.

Republican efforts to get answers for this apparently significant oversight by the DOJ and FBI were met with silence. But GOP findings do provide some clues.

According to the report, a whistleblower allegation “suggests that FBI leadership in Washington may be the reason why the FBI seems to have provided Hunter Biden with special treatment.”

Specifically, a whistleblower told investigating Republicans that ASAC Tim Thibault of the FBI’s Washington Field Office ordered the investigation canned in July 2022.

According to Senate Judiciary Committee Ranking Member Chuck Grassley (R-Iowa), who discovered the role played by Thibault, the agent did not give proper reason for closing the investigation under FBI rules of conduct. Thibault’s motivation in closing the case remains unclear.

Prologue to Further Investigations

The report is likely a taste of the investigations that Americans can expect if Republicans retake at least the House in the midterm elections, as pundits predict will be the most likely outcome.

Beyond the FBI and DOJ, Republicans have indicated several topics they may look into as the majority.

Read more here…

By Simon White, Bloomberg Markets Live reporter and analyst

The dollar’s sharp selloff on Friday, overbought extremes and seasonality point to further downside in the coming weeks.

US jobs data on Friday triggered an aggressive drop in the dollar. The DXY fell 1.8% – that might not sound much, but it’s in the bottom 0.2% of all moves in the DXY going back to 1970. Generally, such moves see follow-through: when the DXY sells off by at least 1.8% in a single day, it goes on to fall an average of 0.2% over the next five days. Over the next 30 days it is approximately flat, but over the next 100 days the average fall is 2.2%.

This accords with breadth data for the DXY, which is at extremes. All currencies that are part of the DXY basket are rising on a six-month basis. As the chart below shows, such extremes almost always mark interim peaks in the dollar.

Moreover, seasonals start to shift against the dollar into year-end. November has a small positive seasonal bias for the DXY, but December sees a large negative bias.

Speculators (according to CoT data) have started to get net long EUR/USD. The euro makes up almost 60% of the DXY basket so sentiment for the common currency is pivotal for the behavior of the DXY.

As the ECB inches up its hawkish rhetoric, European assets are looking more attractive. While the more aggressive Fed hiking cycle has made FX-hedged USTs a losing proposition compared to local debt for Japanese investors, European debt still offers a positive pick-up versus JGBs (even if the pick-up has been falling). Near-term risk for the euro has also eased at it looks like Europe will avoid some of the worst-case scenarios imagined for an energy crisis this winter.

On the other hand, the risk has risen that the Fed now disappoints versus expectations. Last week’s Fed meeting saw the expected peak Fed rate rise, but the bank intimated it will move more slowly to get there. More time means more opportunity for growth to disappoint, or inflation to slow –- as leading indicators anticipate –- leaving markets, including the dollar, more sensitive to a change in Fed’s direction.

With soaring borrowing costs, the Federal Reserve has slammed the brakes on the once-booming used car market. The latest data on wholesale used-vehicle prices show October’s decline on a year-over-year basis was the worst since the financial crisis over a decade ago. 

The Manheim Used Vehicle Value Index for October declined to 200, or about 10.6%, the worst decline since December 2008 when the global economy was melting down (and the 5th largest decline ever)… 

The Fed’s rapid pace of rate hikes this year is slowing demand, as Edmunds data showed the average annual percentage rate on used-car loans was a staggering 10% for some borrowers. 

Average financing rates right now:

New cars: 6.27%

Used cars: 10.33% !!!!

(source: Edmunds)

— CarDealershipGuy (@GuyDealership) November 2, 2022

The index that tracks the price of what car dealerships pay at auto auctions has slid for 8 of the nine months and declined for the 5th straight month. 

Since the Fed hasn’t blinked (yet) and borrowing costs continue to skyrocket, wholesale used-vehicle prices could cool significantly more. 

The slump in wholesale used-vehicle prices could be a harbinger of when the Fed begins to hike interest rates at a slower pace. 

“Used car prices, once considered the barometer of how bad inflation has become, are now moderating. In fact, they have been dropping for a year. As supply-chain shortages moderate, this closely-watched gauge will likely continue to decline, helping curb overall inflation. The move may also support the narrative that the Fed can scale back its rate increases, boosting stocks,” Bloomberg’s MLIV Vincent Cignarella wrote. 

The bad news about sliding wholesale used-vehicle prices is when they crush the retail market, there will be so many new buyers underwater in their vehicle loans. 

Signs of distress are already materializing for consumers with subprime and deep subprime credit scores, according to Mish Talk. 

As delinquencies rise and the layoff cycle begins, the repossession wave has already started.

The Car Market Is Collapsing

sound … pic.twitter.com/apxRchrNwE

— Wall Street Silver (@WallStreetSilv) November 5, 2022

And the used car bubble could cascade into the structured product segment of the financial market as big banks hold a lot of consumer debt. 

Bullish for CLOs… pic.twitter.com/mrd5XtBjPq

— Wall Street Bearish Bull (@govadm) November 7, 2022

Meanwhile, shares of Carvana crashed 24% Monday after the company missed Wall Street’s top- and bottom-line expectations for the third quarter as the demand for used cars plummeted. 

Last month, the largest US chain of car dealerships, AutoNation, whose CEO, Mike Manley, warned the used car market showed signs of imploding. 

Separately, Hertz Global Holdings reported its third-quarter earnings that showed depreciation costs were rising due to its used car prices at auction fetching lower values. 

Readers may recall it was back in April when we asked a straightforward question: “Are Used Car Prices About To Peak For Real This Time?” 

… and with a little bit of time, we were right. We expect deals, especially in the used car luxury segment, to materialize in 2023. 

Authored by Jonathan Turley,

Below is a slightly expanded version of my Hill column on the widespread claims that democracy is in peril if the GOP prevails in the midterm elections. On the eve of the midterm elections, one would think that our constitutional system has only days to live.

Indeed, on Fox Sunday, House Majority Whip James Clyburn declared:

“I’ve studied history all of my life. I taught history. And I’m telling you, what I see here are parallels to what the history was in this world back in the 1930s in Germany. This country is on track to repeat what happened in Germany when it was the greatest democracy going, when it elected a chancellor that then co-opted the media.”

In other words, the Republicans are like Nazis about to overthrow democracy, an analogy to the rise of Adolph Hitler.

It is notable that Democrats, including President Biden, are now arguing that the media is pro-Trump or coopted by the Republicans.

Here is the column:

If a single moment could sum up the growing hysteria heading into the midterm elections, it was the appearance of historian Michael Beschloss on MSNBC this week when he warned that, if the Republicans prevail, we could see “our children … arrested and conceivably killed.”

In other words, it is not gas prices, the economy or crime that once again are the top polling issues for voters. Instead, it is democracy or death, gas or grandchildren — you choose.

The drum major in this parade of horribles has been President Biden, who was widely criticized for an earlier Philadelphia speech that denounced his political opponents as fascists plotting to overthrow democracy.

Biden returned to this theme in what White House chief of staff Ron Klain called his “final warning” to voters. The president ominously cautioned voters who might be thinking of voting for Republicans that, “make no mistake, democracy is on the ballot for all of us.” In other words, be afraid, be very afraid.

President Biden and others have returned to that theme as Democrats appear to be losing ground even in traditional blue states. Among others, Hillary Clinton warned that the GOP is trying to “steal” the election and that “they’re going after democracy.”

The president’s attacks do not appear to be gaining much traction, with polls showing that most people view him as inciting political unrest. Nevertheless, on almost every network and cable news program, the mantra seems unrelenting: If the GOP prevails in the midterms, democracy could be lost.

Whereas the media once pushed a false Russia collusion claim in the 2016 election, this time it is pushing a claim that the GOP itself represents the threat to our liberties and very lives.

As Democratic alarm over a GOP win in both houses of Congress has increased with polling in the past two weeks, so has the alarming rhetoric. Beschloss, for instance, warned that not only may democracy have just a few days left but there may be no one allowed to record its fall: “Fifty years from now, if historians are allowed to write in this country and if there are still free publishing houses and a free press — which I’m not certain of, but if that is true — a historian will say what was at stake … was the fact whether we will be a democracy in the future, whether our children will be arrested and conceivably killed.”

The Democratic campaign against GOP candidates as extremists and election deniers is breathtakingly dishonest. Democratic leaders like Rep. Sean Patrick Maloney (D-N.Y.), head of the Democratic Congressional Campaign Committee (DCCC), have been accused of deceptive practices in spending tens of millions to support the most conservative candidates in Republican primaries. Those candidates — now denounced by Democrats as “extremists” — prevailed in their primaries with the Democrats’ support and could now win in states like New Hampshire.

At the same time, Democrats and the House’s Jan. 6 select committee are pursuing those who engaged in similarly inflammatory rhetoric leading up to the Jan. 6, 2021, Capitol riot — just as the airways are filled with Trump-like warnings that the midterm elections are about to be “stolen.” Likewise, just as some on the left claim there may be no more real history books after the midterms, others are campaigning to ban books by figures like Supreme Court Justice Amy Coney Barrett in the name of protecting free speech.

What leaders like President Biden seem to forget is that our Constitution not only was written for times like this, it was written in a time like this. Federalists and Jeffersonians actually — not just figuratively — tried to kill each other with the use of laws like the Alien and Sedition Acts.

But James Madison crafted a Constitution for the worst of times — and the worst of leaders. He famously observed that we needed a system that did not depend on the good intentions or motivations of our rulers: “If men were angels, no government would be necessary.” So he created a system that contains a series of checks and balances to prevent the concentration — and the abuse — of power.

There has been a growing crisis of faith on the left as leaders and pundits  have attacked our Constitution and its institutions, including the Supreme Court. These objections appear to be based not on the Constitution failing to resist extraconstitutional demands but on it failing to yield to such demands. These figures apparently are upset that the democratic process or the Supreme Court have not given them what they demand. Thus, the Constitution or the court must go.

Widespread references to Jan. 6 should inspire greater confidence in our constitutional system and dispel the doubts being voiced by President  Biden and others. The Capitol riot was denounced by most Americans; Republican leaders like Vice President Pence and Senate GOP Leader Mitch McConnell (R-Ky.) carried out their constitutional duties. Federal judges (including many appointed by then-President Trump) uniformly rejected challenges to the election; the Supreme Court, with six conservative justices, repeatedly ruled against Trump — including all three of his appointees.

The Constitution has weathered every storm in our history, including a Civil War and a “war” over civil rights. We’ve tackled everything from a depression to desegregation; we’ve faced periods of violence and vitriol that tore us apart. And yet, we remain.

The U.S. Constitution is not an elegant or poetic document, but it has one thing to commend it: It is designed to survive the worst of times and the worst of leaders, and it has done just that.

The Democrats’ democracy-or-death mantra is not just demagoguery. It is defamation of a constitutional system that has proven itself, time and again, to be up to any challenge. Democrats indeed may be in danger in this midterm — but democracy is not.

Authored by Jesse Felder via TheFelderReport.com,

The following is an excerpt from a recent report featured on The Felder Report PREMIUM.

Despite all the worries over the possibility of a recession in the quarters ahead, the stock market seems to have priced in a “soft landing” for the economy.

The cyclicals-to-defensives ratio has yet to really react even to the slowdown in the economy we have already seen over the past year or so as indicated by the reversal in the ISM Manufacturing PMI. If the latter continues to deteriorate in the months ahead, cyclicals (like the tech and consumer discretionary sectors) could have a great deal of pain still in front of them.

So it’s interesting to note that the rapid rise in the dollar, interest rates and oil prices we have seen over the past two years points to a rapidly deteriorating economy in the months ahead.

In fact, as the chart above suggests, the composite of these three major economic inputs suggests that the decline in ISM Manufacturing PMI is going to accelerate over the next nine months or so, a development that would fly in the face of the soft landing narrative and likely play catalyst for the next phase of the bear market in equities.

Tyson Foods CFO John R. Tyson, son of board chairman John H. Tyson, was arrested early Sunday morning after he got drunk, broke into a random woman’s home, and fell asleep in her bed, Fox16 reports.

According to a preliminary arrest report, at approximately 2:05 a.m. on Sunday, Nov. 6, Tyson, 32, was found asleep in a woman’s bed at her home, located at 445 N Mock Ave. The woman called police when she arrived and found Tyson, whom she did not know.

She told dispatchers that she believes the front door was left unlocked and that is how he gained entry. Upon arrival, police located Tyson in the back bedroom with his clothes in front of the bed and identified him through his driver’s license. -Fox16

When police arrived and tried to wake Tyson up, he could not verbally respond and attempted to fall back asleep after briefly sitting up. 

According to the police report, his breath reeked of alcohol and his movements appeared ‘sluggish and uncoordinated.’

He was arrested for Criminal Trespass and Public Intoxication, and booked into the Washington County Detention Center where he was released Sunday evening.

Tyson was appointed as CFO on Oct. 2, and is also an executive VP.

By Michael Every of Rabobank

It would be so easy at the start of a week like this to just convey to readers that X went up y% on Friday, and A went down b%, and add a schedule for what data will be released today. That might well be what you are looking for – in which case, you are in the wrong place. This Daily says NO to that kind of thing! That’s because lots of others say no to lots of other things.

NO PIVOT

We got another strong US (and Canadian) payrolls report on Friday. This week also sees US CPI, where there is a good risk the print comes in hotter than consensus yet again. Yes, there are real questions about the reliability of both of these data sets, but can we please drop the endless attempts to self-servingly sell an imminent Fed pivot?

Yet I suspect we will still get more pivot messaging – from the Fed itself, or parts of it. If you think ‘pro-MMT’ Brainard, pro-Wall Street others, and ‘New Volcker’ Powell see eye to eye on Fed Funds going over 5%, as is entirely possible if we get hot CPI on top of hot payrolls, then you don’t understand the real world. “A split in the Fed? A politicized Fed? A Fed backing special interests? Surely not!” Yes, this is how central banks operate, especially under duress. The BOE Governor last week had to appear on TV and underline he hadn’t helped carry out a coup vs. his own prime minister(!), ironically demonstrating the extent to which DM now act like EM, and that, as in EM, nothing is considered true until it has been officially denied.

NO REOPENING

Friday saw wild trading and sharp drop in the dollar despite payrolls due to rumours China would soon reopen. This was based on one report from a retired Chinese health official and an anonymous screen shot. People who know something about China were deeply sceptical. And lo and behold, China held a press conference on Saturday and shot down the idea of an end to Covid Zero. That also shoots down the recent bullish trend, and the credibility of many ‘China watchers’; and it shows how susceptible fools are to shills. I also reiterate if China reopens in 2023, then we will get a huge surge in supply-side inflation – in which case the Fed is hiking even more.

NO ENDORSEMENTS

A flurry of economic news over the weekend makes the complete opposite case to China bulls. PBOC Vie-Governor Fan Yifei is under serious disciplinary investigation, which alongside rumours that Governor Yi Gang may soon step down too, would underline Western-trained/friendly technocrats are being replaced. China is reviving its pre-reform state sales and marketing co-operatives. Beijing will establish new central SOEs to service its strategic goals, including in international trade, linking upstream to downstream, and by implication the private sector too. Moreover, the CCP insists “Celebrities should consciously practice socialist core values in their advertising endorsements; activities should confirm to social morals and traditional virtues.” Relatedly, Xi stated: “We need to educate people, especially the youths… that China’s socialism is won by hard work, struggles, and even sacrifice of lives. This was not only true in the past but also true in the new era.”

Even October trade data were weak: imports were -0.7% y-o-y and exports -0.3% to boot.

NO HUGS

‘Military build-up needed to protect China’s overseas interests, officials say’, as the Chinse constitution is revised to insist that the country holds world class armed forces. At the same time, the Washington Post quotes “an American who knows the Chinese leadership well” saying Xi is convinced China and the US are heading towards war. From the US side, its nuclear forces chief says Ukraine is ‘just the warmup’ for a larger crisis; “The big one is coming, and it isn’t going to be very long before we’re going to get tested in ways that we haven’t been tested a long time.”

In Ukraine, Pepe Escobar –a serious analyst in the same manner as Lord Haw-Haw, but a useful an indicator for that– is now shrilling Russia will be forced to move against Odessa by Spring. Which is when the bulls say China will open up: which would rather push commodity prices up; and so Fed Funds. There are also whispers that the US wants Zelensky to negotiate.

Serious US strategists underline that due to military scarcity there needs to be an imminent withdrawal of US forces from Europe and reallocation to the Indo-Pacific, with Europe stepping up to the task at hand. Which the comfortable Western part patting itself on the back that climate change has tempered its energy crisis so far refuses to do; and as German industry needed to do so decamps abroad – including to China; and as Chancellor Scholz pens an op-ed saying Berlin will adapt to a multipolar world, rather than openly supporting the US-backed order it has flourished under. (Meaning sell cars to all sides?)

NO PRODUCTION

Pentagon acquisition chief Bill LaPlante now says Ukraine has helped him understand what really matters: “Production.” That is GDP by supply, not GDP by demand: commodities, industry, and logistics, not services and finance. Who knew?

“We as a country did our best to not do production. We all accepted that just in time was the way to go. That is why the US cannot produce Stinger missiles fast enough: production was shut down in 2008… I challenge all of you to ask about that if somebody give you a really cool liquored up story… – ask them when it’s entering production, ask them about numbers… is it going to work well against China? Don’t tell me it’s got AI and quantum, I don’t care…. The sausage making is still going on…. we need to do multiyear procurements for munitions.” He adds that NATO standards don’t get to the point of “interchangeable,” and an industry executive told him that they would have to force companies to do so because it makes firms less competitive.

I have stressed for some time that you won’t see Western firms forced to do things by the likes of Jeremy Corbyn or Bernie Sanders, but you will by guys like LaPlante, who concludes: “The tech bros aren’t helping us too much.” On which…

NO TWITS?

US payrolls didn’t show it, but up to 1/2 of all the well-paid roles at Twitter are apparently going. (And Meta is following the lead; and others will follow.) This matters, and not just for another stab at the Fed pivot play.

Twitter is the modern Town Square for the Western elite. It’s now been bought by one of their own, who says he will back free speech and make ‘blue tick’ status something anyone can buy rather than earn by propagating the ‘right message’. As a result, corporate advertisers are walking away. The same corporations who deal with noxious global regimes are not prepared to associate with a platform sticking to the US First Amendment right to free speech. Even the UN High Commissioner for Human Rights has stepped in(!) Elon, clearly nobody in power is in favour of free speech; or of free markets; or even free trade if they are the net importer; but they are all interested in free money, which Twitter can no longer rely on.

NO MAJORITY

Tomorrow is the US midterm elections. Market analysts who think reading fivethirtyeight.com gives them political insight, or that polling firms are not as biased as central banks, are waking up to the fact that the Blue bounce in the summer was a mirage and that Republicans are likely to see a Red Tsunami that wipes out the Democrats’ House majority and 50-50 Senate tie. It would also strongly suggest a strong Red base for a presidential win in 2024 with an even larger Congressional majority… and, yes, led by Donald Trump, as potential rivals already start to drop out, and shots are taken across the bows of others.

The implications of this week’s election will be manifold, even if hysterical claims about the end of democracy look as tragicomically wide of the mark as they are with Twitter. They include that President Biden may become a lame (and impeached?) duck that will only leave him foreign policy to focus on for two years. What that implies against the current geopolitical backdrop, and his recent claim that he wishes to see the people of Iran “freed”, is anyone’s guess. We are also likely to see a continued US trend towards populism, and industrial policy, and neo-mercantilism.

What might this mean for fiscal and monetary policy as interest payments on federal debt soars, but the need for an even more powerful military does in tandem? What you are thinking is probably wrong if you try to frame things in a traditional manner.

NO NONSENSE

To summarise the state of flux we are all in, the Financial Times points to the appeal of neo-Marxism in Japan under the new label of “degrowth”; alongside neo-Marxism in China (which may also mean low growth). It also carries a remarkable op-ed from Jajan Ganesh calling for an end to intra-elite sniping –pointing to Rishi Sunak having a go at cosmopolitan “North London”– because if the mob comes, it won’t be able to differentiate between liberal, rich North and conservative, rich West London. He concludes, “There is a non-trivial chance of civil unrest against the haves in the coming years. How sweet to think that you will be spared because you are merely rich, rather than rich and interesting.” And this is in the FT, not the Morning Star!

NO ATTENDANCE

COP27 is taking place in Sham el-Chic. Some fossil fuel fans are skipping. The government leaders who are there are burning more fossil fuels than ever. And Greta is trying to get rich from her book telling us how we need to destroy capitalism.

NO EASY ANSWERS

I am not going to tell you exactly what to buy or sell against this slide into metacrisis, just as I am not going to tell you exactly what went up or down. What I can point out is that there are no easy answers and no easy trades anymore. Anyone who tells you otherwise needs to be told “NO!”

The world’s richest man is likely making no new friends among the liberati and mainstream media this morning after he tweeted a recommendation that “indepedent-minded voters” should vote for a Republican Congress to ensure checdks and balances on the extreme policies on both sides of the political divide in America…

To independent-minded voters:

Shared power curbs the worst excesses of both parties, therefore I recommend voting for a Republican Congress, given that the Presidency is Democratic.

— Elon Musk (@elonmusk) November 7, 2022

Musk added that:

“Hardcore Democrats or Republicans never vote for the other side, so independent voters are the ones who actually decide who’s in charge!”

How long before we hear outrage that a billionaire owner of a giant social media company would utter such obviously political rhetoric.

Remember this is very different from Mark Zuckerberg, Jeff Bezos, Bill Gates, Reed Hastings, Marc Benioff, or even Jack Dorsey funding 100s of millions of dollars into the ‘right’ political party, and aggressively censoring any dissenting view.

Who could have seen that coming…

Telling people to vote republican isn’t balanced. Owners of social media platforms shouldn’t be political activists telling people who to vote for with their massive platform

— Tangerine Memez (@Tangerinememez) November 7, 2022

Right now a million virtue-signaling Tesla owners are angrily looking up the Return Policy.

By Jan-Patrick Barnert, Bloomberg Markets Live reporter and analyst

A rebound in Chinese stocks built on flimsy evidence, a Federal Reserve not ready to turn dovish and an unconvincing earnings season. Yet, investors are chasing another bear market rally.

With so much negativity priced in over the past months, and positioning so light, any kind of vaguely positive news seems enough to extend the rebound. Last week’s Fed meeting might have pointed to no imminent turn in rates, but just the idea of the central bank going a touch slower was enough for the market to brush off its initial disappointment.

Since hitting its lowest in almost two years in late September, the Stoxx Europe 600 Index has risen for four weeks in five, rallying about 9% in the process. Even Friday’s data showing a still strong labor market and signaling no end to the Fed’s aggressive hiking path wasn’t enough to halt the rebound.

Momentum certainly favors almost all major benchmarks right now, with Asian markets the latest to join the party last week after a flurry of market-friendly headlines — along with unverified talk of a China reopening — drove risk assets.

While officials at China’s National Health Commission sought to dispel wild rumors of Covid-zero exit over the weekend, the reopening speculation has offered just the excuse that weary traders needed to buy stocks after suffering months of losses, with Hong Kong’s Hang Seng Index up 3.1% on Monday.

A poll of JPMorgan clients from last week showed that equity positioning among investors is neither super bearish nor overly bullish. Among those surveyed, 47% plan to increase equity exposure in coming days and weeks.

The current earnings season has mainly been supportive of the rally, according to JPMorgan analysts led by Marko Kolanovic. In Europe, 62% of Stoxx 600 companies that reported so far have beaten estimates, the firm’s strategists say.

To be sure, investors are fleeing to the safety of cash funds at the fastest pace since the coronavirus pandemic, with inflows of $194 billion since the start of October, according to EPFR Global data cited by Bank of America on Friday.

“Many investors are at risk of being trapped in their under-positioning into year-end,” says Nomura’s Charlie McElligott. Those that don’t begin to cover shorts or buy the dip might have to do so if stocks keep trending higher, he says.