As if GM didn’t already have enough headaches between a crippling UAW strike, and playing catch up to Tesla in the EV war, moments ago it just got hammered again on a WSJ report the Detroit auto giant has at least 20 million vehicles built with a potentially dangerous air-bag part that the government says should be recalled before more people are hurt or killed.

According to the report, the number of affected GM vehicles (a figure which has not yet been disclosed publicly) makes GM among the most exposed in a push by U.S. auto-safety regulators to recall 52 million air-bag inflators designed by Tennessee-based auto supplier ARC Automotive.

As noted previously, these inflators have been known to explode with too much force during a vehicle crash, sending metal shrapnel flying and hitting occupants in the face and neck with shards. At least two people have been killed, and several others injured in such incidents.

The National Highway Traffic Safety Administration has yet to release how many vehicles overall would be covered by a recall, or which specific models would be impacted. The number of GM cars and trucks with these inflators could be higher depending on how regulators proceed.

NHTSA is holding a public meeting Thursday on its determination that the air-bag parts are defective and should be recalled. In April, the regulatory agency sent a letter to ARC, demanding it recall the inflators, which are essentially mini-exploding devices designed to rapidly inflate the air-bag cushion in a collision.

Remarkably, ARC has refused the regulatory request, resulting in NHTSA having to take the unusual step of scheduling a hearing, which is necessary if it wants to formally order a recall. The company will make a brief statement at the meeting, a lawyer for ARC said.

The auto supplier has said extensive field tests show no defect and the air-bag ruptures that have occurred are few and isolated. Aside from GM, there are 11 other automakers that have the ARC air-bag inflators covered by NHTSA’s action, including Ford Motor, Volkswagen, Toyota Motor and Hyundai Motor.

For those who haven’t watched a certain iconic movies, here is an artist’s rendering of how NHTSA is conducting its recall cost-benefit analysis.

Some of the known air-bag explosions have occurred in GM vehicles with one resulting in a fatality and others in injuries. GM so far has done five recalls over a span of six years on vehicles that have the ARC-made air bags. The latest one was earlier this year, when it recalled nearly one million Chevrolet and Buick SUVs, after a Michigan woman was injured in a crash in March.

The problem with the inflators, made over an 18-year period starting in 2000, lies in a blockage that can develop in a vent that is designed to release stored gas, regulators say.

The clog can cause too much pressure to build up, leading it to explode when it activates during a crash, regulators say.

NHTSA estimates that one out of every 370,000 air bag inflators deployed in the future will rupture.

“This will happen again,” said Sharon Yukevich, a NHTSA investigator who has led the agency’s probe into the inflators, at the Thursday public hearing. “The timing is unpredictable, and any one of the approximately 52 million subject inflators is at risk.”

“A recall of the entire subject population will address this risk,” she said.

GM has said it continues to investigate the issue with these air-bag parts and is trying to develop a fix for those that have been recalled already. In the meantime, owners can keep driving the affected vehicles, and it will ship necessary replacement parts when a remedy is ready, the company said.

NHTSA began investigating these faulty inflators more than eight years ago, after one person was injured and another one killed by metal pieces flung into the cabin by air-bag explosions. The incidents were similar to those involving air bags made by Takata, the Japanese supplier that was at the center of a roughly 42-million vehicle recall campaign that began last decade.  

The Takata recall has cost automakers billions of dollars in repairs and has been difficult to fully address, involving many older models that have changed hands several times. Honda Motor was among the most exposed in that recall effort, having to fix about 13 million vehicles in the U.S. It set aside nearly $5 billion to cover the recall costs over a two-year period.

 Needless to say, a 20 million car recall would be among the U.S.’s largest in history, something which the market is not too happy about and GM stock is understandably sliding on the news.

There are emerging reports that Turkey just attempted a drone attack on a US-occupied oil field in northern Syria on Thursday. “A U.S. jet fighter shot down a Turkish drone on Thursday after it was deemed a threat to U.S. forces in northeast Syria, a person familiar with the episode said,” The Wall Street Journal has confirmed.

Turkey immediately claimed the drone wasn’t operated by its forces, “But one American official described it as an armed Turkish drone and said that the U.S. was aware of that before it acted,” WSJ continues. Unverified footage of the drone shootdown is widely circulating:

F-35A fighter jet of USAF from 421st EFS shot-down a Turkish Air Force’s Anka-S armed drone over Hasakah. The Turkish drone had bombed positions of SDF which are the US allies in North East of Syria.

pic.twitter.com/MuM9h4C0JG

— 301 Military (@301military) October 5, 2023

The Turkish attack was reportedly in response to a bombing in Ankara claimed by Kurdish militias. The Turkish air force then launched a series of attacks on Syria’s Hasakah governorate, which has for years been held by US-backed Syrian Democratic Forces (SDF). But Turkey has long seen the SDF, which is dominated by the Syrian Kurdish YPG, as an extension of the PKK, considered by Ankara to be a terror organization.

“Hawar News Agency reports that among the targets was an oil site in Qamishli and the Jal Agha Dam,” writes Beirut-based news source The Cradle. “Furthermore, several deaths and injuries were reported following a Turkish drone attack on the town of Tel Habash.”

Crucially, US forces have small bases scattered throughout the very areas which came under attack. SDF-aligned local officials have confirmed the “revenge” strikes by Turkey and its regional proxies. “Targeting infrastructure facilities is aggressive behavior amounts to war crimes,” an SDF affiliated statement said, saying that its facilities, including civilian infrastructure, were targeted.

SOHR: Turkey targets gas, electricity and water stations, because its real goal is to displace civilians and bring about a demographic change in the northeast Syria https://t.co/wK2FkkqgCD

— Hassan al-Ali (@han_ali23) October 5, 2023

Turkey also confirmed it conducted cross-border operations, but rejected responsibility for the drone attack:

“Our only goal is to eliminate the terrorist organizations that pose a threat to Turkey. A ground operation is one of the options to eliminate this threat, but it is not the only option for us,” a Turkish official told reporters following the latest round of airstrikes. His comments came as the Turkish army deployed ground reinforcements to areas under its control in the northwest of Syria.

The anti-Assad, UK-based monitoring group Syrian Observatory for Human Rights has also said that the US coalition shot down a Turkish drone in what marks a serious “NATO vs. NATO” escalation over Syrian skies, ironically enough.

A Turkish drone targets the Amuda power station:

At least eight people have been killed in Thursday’s Turkish strikes on Syria, reports Reuters:

At least eight people have been killed in Turkish drone strikes on Thursday on the Kurdish-held zone of northeast Syria, a war monitor and a local security source said, following Ankara’s threats against Kurdish military facilities in Syria and Iraq.

Two were killed in a strike on a car near a military facility and another six were killed in a later strike on a military post near the town of Amuda, the security source told Reuters.

#Syria #Turkey A Turkish drone targets the Odeh oil field, which is controlled by The Syrian Armed Forces, near the city of Al-Qahtaniyah. pic.twitter.com/Hu6G3Fpb2w

— The National Independent (@NationalIndNews) October 5, 2023

According to more details from WSJ, “The U.S. aircraft that downed the drone, which was armed with air-to-ground munitions, was an F-16. The action was taken as American troops were conducting operations nearby, a U.S. official said.”

This appears the most significant Turkish coordinated operation in years, and is sure to ratchet already simmering tensions with Washington further.

An electrical power conversion station in #Qamishli was targeted by a #Turkish march.
Before that, there is a series of attacks on oil fields, dams, and vital service facilities along the geography of northeastern #Syria on the border with #Turkey. pic.twitter.com/mzOuQBv844

— MOHAMMAD HASAN (@MHJournalist) October 5, 2023

It also comes at a moment of internecine fighting between US-backed Kurds and Arab tribes in Syria’s Deir Ezzor region. All of this means the US occupation is facing its fiercest pressure, also at a time Damascus is maneuvering to force American forces off its sovereign territory.

Via SchiffGold.com,

Central bank gold buying continues to sizzle.

Central banks globally added a net 77 tons to their reserves in August, according to the latest data compiled by the World Gold Council.

It was the third straight month of net purchases. Over the last three months, net gold buying by central banks totaled 219 tons.

In March, April and May, central banks reported net gold sales, primarily due to Turkey selling 160 tons of gold over that three-month period. According to the World Gold Council, this was a specific response to local market dynamics and didn’t likely reflect a change in the Turkish central bank’s long-term gold strategy.

Turkey returned to buying gold in June and added another 14.7 tons in August, joining China, Poland and Uzbekistan as the biggest buyers for the month.

According to the World Gold Council, the Turkish government reinstated gold import quotas in early August. There was some speculation that domestic shortages could lead to central bank gold sales to meet demand, but this clearly wasn’t the case.

The People’s Bank of China ranked as the largest buyer in August, adding 28.9 tons of gold to its holdings. It was the 10th consecutive month of buying for the Chinese central bank. China is the largest gold buyer year-to-date, having increased its official reserves by 166 tons since the beginning of the year and 217 tons since it resumed official purchases last November. The People’s Bank of China now officially holds 2,165 tons of gold, making up 4% of its total reserves.

China has a history of adding to reserves and then going silent.

The People’s Bank of China accumulated 1,448 tons of gold between 2002 and 2019, and then reported nothing for more than two years before resuming reporting last fall.

Many speculate that the Chinese continued to add gold to its holdings off the books during those silent years.

In fact, there has always been speculation that China holds far more gold than it officially reveals. As Jim Rickards pointed out on Mises Daily back in 2015, many people speculate that China keeps several thousand tons of gold “off the books” in a separate entity called the State Administration for Foreign Exchange (SAFE).

Last year, there were large unreported increases in central bank gold holdings.  Central banks that often fail to report purchases include China and Russia. Many analysts believe China is the mystery buyer stockpiling gold to minimize exposure to the dollar.

The National Bank of Poland added 14.9 tons of gold to its reserves. That brings its year-to-date total to 88 tons.

In the fall of 2021, Bank of Poland President Adam Glapiński said the central bank planned to add 100 tons of gold to its reserves in 2022. It’s unclear why the bank didn’t follow through, but it is now just 12 tons short of that stated goal.

When he announced the plan to expand its gold reserves, Glapiński said holding gold was a matter of financial security and stability.

Gold will retain its value even when someone cuts off the power to the global financial system, destroying traditional assets based on electronic accounting records. Of course, we do not assume that this will happen. But as the saying goes – forewarned is always insured. And the central bank is required to be prepared for even the most unfavorable circumstances. That is why we see a special place for gold in our foreign exchange management process.”

India has been buying relatively small amounts of gold for the last four months. The Reserve Bank of India increased its holdings by 1.9 tons in August.

The RBI added 7 tons in Q1. Since resuming buying in late 2017, the Reserve Bank of India has purchased over 200 tons of gold. In August 2020, there were reports that the RBI was considering significantly raising its gold reserves.

Russia reported a 3.1-ton increase in its gold reserves. This brings the country’s gold holdings back to where they were at the beginning of the year. Russia was a big buyer prior to its invasion of Ukraine. Last month, there were reports that Russia would recommence the buying of foreign currency and gold in the coming months, but there were few details about the plan.

Uzbekistan has cycled back to buying with an 8.7-ton gold purchase.  It is not uncommon for banks that buy from domestic production – such as Uzbekistan and Kazakhstan – to switch between buying and selling.

Kazakhstan reported a small half-ton purchases in August.

Three other central banks bought gold in August.

• The Czech Republic – 1.7 tons

• Kyrgyz Republic – 0.7 tons

• Singapore – 1.6 tons

There were no significant sales reported in August.

Bloomberg reported that Bolivia “monetized” 17 tons of its gold reserves between May and August following the enactment of a law authorizing the central bank to utilize its gold reserves. But according to the World Gold Council, it’s unclear what is meant by “monetize.” Currently, data Central Bank of Bolivia gold reserves is not available after April.

The WGC characterized central bank gold buying as “healthy.”

Even accounting for the net sales earlier in the year, the pace of buying so far this year suggests that we are on course for another strong annual total.”

Even with Turkey’s big sales earlier this year, net central bank gold purchases totaled 387 tons through the first half of the year. That was the highest first-half total since the organization started compiling quarterly data in 2000. This continued the trend of increasing gold reserves we saw last year.

Total central bank gold buying in 2022 came in at 1,136 tons. It was the highest level of net purchases on record dating back to 1950, including since the suspension of dollar convertibility into gold in 1971. It was the 13th straight year of net central bank gold purchases.

According to the 2023 Central Bank Gold Reserve Survey recently released by the World Gold Council, 24% of central banks plan to add more gold to their reserves in the next 12 months. Seventy-one percent of central banks surveyed believe the overall level of global reserves will increase in the next 12 months. That was a 10-point increase over last year.

X users reported Wednesday night that news outlets and other media companies posting stories on the ‘free speech’ platform could no longer see links. This is a major overhaul to X and an aesthetically pleasing change for users who want to see cleaner feeds. 

In late August, Elon Musk first confirmed to Fortune that X was planning to “greatly improve the esthetics” of the platform. 

The change means that anyone sharing a link on X—from individual users to publishers—would need to manually add their own text alongside the links they share on the service; otherwise the tweet will display only an image with no context other than an overlay of the URL.

While clicking on the image will still lead to the full article on the publisher’s website, the change could have major implications for publishers who rely on social media to drive traffic to their sites as well as for advertisers. –Fortune

Axios’ Sara Fischer pointed out, “News outlets and other companies have long posted links to social media sites to drive traffic to their own websites in order to monetize user attention themselves.”

Fischer continued: “Musk insists “links don’t get as much attention,” but some journalists and other X users have noted it could cause confusion and decrease attention to links or make posts without headlines look like memes.” 

Introducing the cleaner feed comes as the Anti-Defamation League folds after Musk threatened to file a defamation lawsuit against them for alleging he failed to clamp down on hate speech on the platform.

Now, it’ll be more challenging for other members of the censorship industrial complex to argue against advertising on X, since it’s good enough for ADL, which might hint ad revs are about to surge. 

Authored by Michael Maharrey via SchiffGold.com,

I recently ran across a video produced by CNBC back in July 2020. It is titled “Why Printing Trillions of Dollars May Not Cause Inflation.”

That aged poorly, didn’t it?

And people wonder why I keep saying you should be skeptical of mainstream narratives.

The video was produced at the height of pandemic stimulus and money creation. The video notes that the Fed’s balance sheet had eclipsed $7 trillion. That was still nearly $2 trillion less than the peak at just below $9 trillion. Even today, the balance sheet remains north of $8 trillion.

The narrator begins by pointing out that some economists were worried about inflation, and she plays a clip of an economist quoting Milton Friedman, who said, “Inflation is always and everywhere a monetary phenomenon.” But the narrator goes on to assert that we really didn’t need to worry about inflation.

Supply shocks have driven up the price for some goods over the past few months. Yet recent history suggests inflation is more likely to stay low for a long time…”

Ironically, the economist who quoted Friedman later boldly proclaims, “The idea that there’s going to be an outbreak of inflation, you know, 4 percent, 5 percent that is just not on the horizon.”

And I bet that economist still has a job.

Fast forward to today — low price inflation? Not so much.

Price inflation remains stubbornly high three years after CNBC produced this video.

Definitions Matter

The problem with the video is it misdefines inflation as “an increase in the prices of goods or services over time.”

This definition of inflation muddies the water (and that’s on purpose).

The proper economic definition of inflation is an increase in the amount of money and credit — or put another way, an expansion in the money supply.

Price inflation, as Friedman alluded to, is a consequence of monetary inflation.

When you use more precise definitions, it immediately reveals the absurdity of this video. It is trying to make the case that inflation doesn’t cause inflation.

This was the generally accepted definition of inflation as late as the 1980s. But over the years, the government, along with its apologists in the corporate media and academia, altered the definition to suit government purposes. They methodically conflated monetary inflation and price inflation until there was no distinction between the two. The standard definition of inflation bandied about today is nothing more than government propaganda.

Economist Ludwig von Mises explains the problem with this change in definitions.

“People today use the term `inflation’ to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation.”

This video proves Mises’ point.

You Could See Price Inflation Coming Like a Freight Train

It’s true that monetary inflation doesn’t always manifest in price inflation. This was the case after the 2008 financial crisis. Despite three rounds of quantitative easing and a nearly $4 trillion increase in the Fed balance sheet, price inflation as measured by the CPI remained relatively tame. But that doesn’t mean there was “no inflation.” There was a massive surge of inflation to the tune of nearly $4 trillion. (Really a lot more than that when you factor in the credit expansion thanks to artificially low interest rates.) However, due to other economic factors, it didn’t primarily manifest as price inflation. Instead, we saw inflation of asset prices such as real estate, the stock market, and even art.

And the fact is, we don’t really know how the money printing after the 2008 financial crisis impacted consumer prices. Economic theory simply says monetary inflation will lead to prices across the board being higher than they otherwise would have been. Had it not been for the massive injection of money into the economy, we might have enjoyed lower prices instead of “moderate” price inflation. We’ll never know.

Regardless, the fact that CPI didn’t surge after the Great Recession monetary stimulus gave Keynsian economists married to theories rooted in “aggregate demand” a false sense of security. The video claimed, “Economists say there’s been a break in the link between money creation and inflation in recent years as the banking system has become more complex.”

Sorry. Complexity in the banking system doesn’t supersede economic laws.

The video does make a legitimate point. Money created by the Fed doesn’t go directly into the hands of consumers. It is added to bank reserves. It only circulates into the broader economy if banks choose to lend. If the newly printed money stays in the financial system it won’t show up in CPI. Instead, the inflation will manifest in asset markets as it did after the Great Recession. We even saw this in the latter part of the lockdown era as the stock market rallied despite the economy still effectively shut down.

But a lot of the pandemic-era stimulus went directly to consumers. There were generous unemployment benefits, direct stimulus checks, and all kinds of loan programs. It was pretty obvious that this monetary inflation would quickly bleed into consumer prices. And yet, virtually everybody in the mainstream missed it. Even after it started showing up in CPI, everybody swore up and down it was “transitory.”

It’s not that they were wrong. They were wildly wrong. Like, not even in the ballpark.

And economics told them it would be wrong.

Sadly, a lot of economists don’t seem to really understand economics. This is what happens when everything revolves around mathematical formulas and “observation” devoid of sound theory.

This video should give you pause when you hear the same talking heads on the same networks insisting the economy is strong, there won’t be a recession, and the Fed has won the inflation fight.

The number of Americans filing for jobless benefits for the first time remains at year-to-date lows at 207k last week (basically in line with the 205k the prior week). Un-adjusted initial claims declined to 172k, the lowest since Oct 2022…

Source: Bloomberg

Continuing claims remains well below the Maginot Line of 1.7mm Americans. (sliding to 1.664mm last week), also at year-to-date lows…

Source: Bloomberg

With regard to continuing claims, Goldman reminds us that ongoing seasonal distortions have increasingly weighed on the level of continuing claims over the last six months, and we now expect that the reversal of those distortions could exert a cumulative boost of 375k to the level of continuing claims between the end of September and March.

Finally, one doe have to wonder just what world we are living in when ADP (and BLS) jobs data has been trending weaker over the last few months, and yet initial jobless claims has been trending not just stronger, but towards its strongest on record…

Source: Bloomberg

Which pill do you want to swallow?

“This is your last chance. After this, there is no turning back. You take the blue pill – the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill – you stay in Wonderland and I show you how deep the rabbit hole goes.”

US equity futures were flat on Thursday, reversing earlier modest losses, with Asia and Europe both solidly in the green after days of losses as global markets steadied thanks to bonds halting their rout as investors looked ahead to more weak labor market data tomorrow. As of 7:45am, S&P 500 futures were unchanged at 4,298 and the yield on 10-year Treasuries was flat 4.71%. The dollar was steady while commodities extended their losses dragged by Energy. WTI has lost ~$10 in six trading sessions, -10.8%, and is virtually unchanged on the year after breaching $95 late last week. Today’s macro data focus includes Jobless Claims and Job Cuts; there are two Fed speakers and announcements on the next wave of bond auctions. Tomorrow we get the Sept NFP which according to JPM “may mean more than next week’s CPI.”

In premarket trading, Clorox falls as much as 4.1% after the cleaning-products maker said preliminary net sales dropped by 23%-28% in the quarter ended Sept 30 after a cyberattack that disrupted production. Prior to the attack, disclosed in mid-August, Clorox had been expecting “mid-single-digits” organic sales growth in the quarter. MaxCyte owner of a platform used in the cell therapy market, slumps 22% after the company posted preliminary third-quarter revenue that disappointed as customer demand wanes. It’s London shares slumped 30%. Rivian Automotive falls as much as 8% after the electric-vehicle maker announced plans to issue $1.5 billion in convertible debt and reported preliminary third-quarter revenue. Here are some other notable premarket movers:

• BioXcel Therapeutics (BTAI) falls 6.4% after Truist Securities analyst Robyn Karnauskas downgraded the biotech firm to hold from buy.
• Cambium Networks’ (CMBM) shares are plummeting 32%, after the wireless networking infrastructure company reported preliminary third-quarter revenue that prompted at least two analyst downgrades.
• Ceridian HCM Holding Inc. (CDAY) shares are up 2.1% after Needham upgraded the human capital management software company to buy from hold.
• Clorox (CLX) — the cleaning-products maker reeling from a cyberattack that disrupted production — falls 4.4% after saying preliminary net sales dropped by 23%-28% in the quarter ended Sept. 30.
• Nanobiotix ADRs (NBTX) sink 20% after the company said 10 deaths occurred within 180 days of enrollment of a dose-expansion trial for its investigational treatment for patients with locally advanced head and neck cancer.
• Orchard Therapeutics ADRs (ORTX) surge 97% after Japan’s Kyowa Kirin agreed to acquire the UK biopharmaceutical company for $387.4 million, or $16 per American depository share.
• UWM Holdings Corp. (UWMC) shares are up 2.8% after BTIG upgraded the mortgage finance company to buy from neutral.

Investor sentiment remains fragile after a painful selloff spiked volatility across markets this week driven by US bond yields soared to multi-year highs. Weekly US jobless claims data is due later today, and the monthly payrolls report will be released on Friday, which could cement bets on a November rate hike. Currently, swaps price a one-in-four chance of a Fed move next month.

“Friday’s payrolls data, and next week’s inflation number will decide whether the 10-year Treasury yield goes up to 5% or down to 4.5%,” Societe Generale strategist Kenneth Broux said. A higher-than-forecast jobs number could trigger “another wave of dollar-buying and bond-selling,” he added.

Despite nascent signs of market calm, strategists remain skeptical about the long-term economic toll of higher-for-longer interest rates. Echoing similar concerns from JPM and Goldman, overnight Barclays analysts wrote in a note that global bonds are doomed to keep falling unless a sustained slump in equities revives the appeal of fixed-income assets.  

“There is no magic level of yields that, when reached, will automatically draw in enough buyers to spark a sustained bond rally,” analysts led by Ajay Rajadhyaksha said. “In the short term, we can think of one scenario where bonds rally materially. If risk assets fall sharply in the coming weeks.”

European stocks rose to session highs, with the Stoxx 600 rising 0.5% after a three-day decline.  Among individual movers in Europe, Alstom SA shares plunged 35% after the French train maker slashed its financial guidance due to delays on UK contracts and a rise in inventories. Here are the biggest European movers:

• Pandora shares jumped as much as 10% in Copenhagen trading after the jewelry maker presented new financial targets, indicating higher growth rates and profitability over the next three years.
• SMA Solar shares jump as much as 17%, most since June, after the maker of photovoltaic systems boosted its sales forecast for the third time this year. Oddo also upgraded the German firm to outperform.
• Sandoz shares gain as much as 5.6% after the maker of copycat medicines that was spun off from Novartis gets a new overweight rating at Morgan Stanley, an outperform recommendation at ZKB, and is started with a buy at Berenberg based on its encouraging biosimilar pipeline.
• Redcare Pharmacy shares gain as much as 6.8% after the German online pharmacy reported what analysts said was “strong growth” in its preliminary third-quarter results.
• Imperial Brands gains as much as 1.9% after the cigarette maker announced a buyback of as much as £1.1 billion. The news could help the stock rally from recent lows, with UK regulatory concerns looking “overdone,” according to Citi.
• Alstom shares plunge as much as 38%, falling to the lowest level since 2005, after the French rail-equipment maker slashed its free cash flow forecast on a jump in inventories.
• Metro Bank shares slumped as much as 29% to a record low after Bloomberg News reported the UK lender has hired Morgan Stanley to explore a potential capital raise.
• Cofinimmo falls as much as 6.2% after an offering of shares in the Belgian real estate firm prices via BNP Paribas, ING, Belfius/Kepler and KBC at €60 apiece, representing about 7% discount to last close.

Earlier in the session, Asian stocks rebounded after a three-day slide that pushed the regional benchmark into a technical correction, as risk sentiment improved following an easing of this week’s selloff in US Treasuries. The MSCI Asia Pacific Index climbed 1.5%, the most in five weeks, driven by gains in the financial and technology groups. Equity benchmarks in Japan and Taiwan were among the top performers in the region. US stocks advanced overnight after data showing job gains cooled, helping ease fears over the Federal Reserve’s policy path and halting the recent surge in bond yields. Oil fell the most in more than a year overnight, helping lessen concern over inflation.

• Hang Seng initially lagged amid very light news flow and the continued absence of mainland participants, while the latest Hong Kong PMI data printed at a deeper-than-previous contraction. However, the momentum eventually picked up in Hong Kong amid the brightened mood across regional counterparts and after Sunac China’s offshore debt restructuring plans received court approval.
• Australia’s ASX 200 was positive following mostly improved trade data and with the gains led by yield-sensitive sectors including real estate and tech.
• Nikkei 225 outperformed on bargain buying with the index set to snap a five-day losing streak.
• KOSPI gained as participants shrugged off the firmer-than-expected CPI data which the BoK expects to stabilise into year-end.

In FX, the Bloomberg Dollar Spot Index pared an earlier fall to rise 0.1% ahead of initial jobless claims data due Thursday

• EUR/USD pared earlier gains to trade little changed on the day
• GBP/USD snapped Wednesday’s gain, falling 0.1% to 1.2119
• USD/JPY dropped 0.1% to 148.98 after hitting the day’s low of 148.26

In rates, Treasuries steadied, with the benchmark 10-year note reversing an earlier move higher to trade around 4.71%, some 4bps lower on the day, and well off 16-year highs hit this week. European government bonds edged lower; 10-year gilt yields rose 5 basis points to 4.63% while 10-year bund yields were 4 basis points higher at 2.95% German and UK long-end yields are up by 5bps and 4bps respectively. US 5s30s spread exceeds 17bp, widest since May, while 2s10s inversion lessens further. Front-end swaps price in around 7bp of rate-hike premium for Fed’s November policy meeting, down from around 9bp at Monday’s close. Dollar IG issuance slate includes MuniFin 3Y; two borrowers priced combined $1b on Wednesday as issuers paid 5bps in new-issue concession on order books that were 5.9 times covered.

In commodities, oil prices add to Wednesday’s sharp decline, with WTI falling 1.2% to trade near $83.30. Spot gold is up 0.1%.

Bitcoin is subdued but remains north of $27,500 with price action uneventful.

Today’s US economic data slate includes September Challenger job cuts (7:30am), August trade balance and initial jobless claims (8:30am). Scheduled Fed speakers include Mester (9am), Kashkari (10:40am), Barkin (11:30am), Daly (12pm) and Barr (12:15pm).

Market Snapshot

• S&P 500 futures little changed at 4,294.50
• STOXX Europe 600 up 0.5% to 442.16
• MXAP up 1.1% to 154.02
• MXAPJ up 0.6% to 482.08
• Nikkei up 1.8% to 31,075.36
• Topix up 2.0% to 2,263.76
• Hang Seng Index up 0.1% to 17,213.87
• Shanghai Composite up 0.1% to 3,110.48
• Sensex up 0.7% to 65,692.31
• Australia S&P/ASX 200 up 0.5% to 6,925.49
• Kospi little changed at 2,403.60
• German 10Y yield little changed at 2.94%
• Euro up 0.1% to $1.0515
• Brent Futures up 0.1% to $85.93/bbl
• Gold spot up 0.0% to $1,821.90
• U.S. Dollar Index little changed at 106.72

Top Overnight News

1. Taiwan’s headline CPI climbs to +2.93% in Sept (up from +2.53% in Aug and above the Street’s +2.5% forecast) while core eases to +2.48% (down from +2.57% in Aug). South Korea’s core CPI was flat M/M and inline w/the Street at +3.3%, but the headline number rose to +3.7%, up from +3.4% in Aug and ahead of the Street’s +3.5% forecast. WSJ   
2. Belgium’s intelligence service has been monitoring Alibaba’s main logistics hub in Europe for espionage following suspicions Beijing has been exploiting its growing economic presence in the west. FT
3. UK construction activity fell more than expected in September and posted its biggest slide since May 2020, driven by a steep downturn in housing, according to a closely watched survey. FT
4. Germany’s trade numbers for Aug fall short of expectations, with exports -1.2% (vs. the Street -0.6%) and imports -0.4% (vs. the Street +0.5%). RTRS  
5. Vladimir Putin’s cabinet is turning to increasingly irregular revenue-raising measures to fund a rapid rise in defense spending, which has tripled since Russia’s full-scale invasion of Ukraine. The Russian government has said it aims to spend a staggering Rbs10.8tn ($108bn) on defense next year, three times the amount allocated in 2021, the last year before the invasion, and 70 per cent more than was planned for this year. FT
6. Ukrainian president Volodymyr Zelenskyy has said he is confident he still has broad US backing despite “strange” voices in Congress and the exclusion of more aid for Kyiv from a US spending deal. FT
7. Deficits suddenly matter – it’s been decades since investors had to grapple with elevated spending/debt pushing Treasury yields higher, but this is now a growing part of the present narrative. WSJ
8. JPMorgan Chase has stepped up the pace at which it is securitising billions of dollars of its loan portfolio in anticipation of proposed new US capital requirements for large banks, according to people familiar with the matter. FT
9. Amazon and Microsoft’s cloud services face a UK antitrust probe into whether they made it hard for customers to switch or mix providers. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded higher as risk assets found reprieve after yields eased back from recent peaks following weak US ADP jobs data and a slump in oil prices. ASX 200 was positive following mostly improved trade data and with the gains led by yield-sensitive sectors including real estate and tech. Nikkei 225 outperformed on bargain buying with the index set to snap a five-day losing streak. KOSPI gained as participants shrugged off the firmer-than-expected CPI data which the BoK expects to stabilise into year-end. Hang Seng initially lagged amid very light news flow and the continued absence of mainland participants, while the latest Hong Kong PMI data printed at a deeper-than-previous contraction. However, the momentum eventually picked up in Hong Kong amid the brightened mood across regional counterparts and after Sunac China’s offshore debt restructuring plans received court approval.

Top Asian News

• Alibaba’s (9988 HK) logistics arm in Liege, Belgium is under scrutiny from Belgian intelligence over the use of sensitive data, according to FT.
• Sunac China’s (1918 HK) offshore debt restructuring plans received approval from a Hong Kong court.
• US Commerce Secretary Raimondo said TikTok poses national security risks, while she hopes to make some chips funding announcements this fall, according to Reuters.
• Taiwan is to probe four firms accused of helping Huawei build chip plants although Taipei said no violations of US trade sanctions have been confirmed so far, according to Nikkei.
• Apple (AAPL) supplier Foxconn (2317 TW) says Q4 is expected to grow significantly compared to Q3; with H2 a traditional peak season for the ICT industry, operations will ramp up sequentially. New product launch in September led to a strong revenue growth compared to prev. quarter, but the revenue experienced a decline YoY due to a high base. In Q3 for cloud and networking products, due to conservative customers pull-in revenue experienced a decline YY. For September, due to increasing allocations in smart consumer electronics products and rising shipment in auto components, revenue for components and other products showed significant growth YY, according to Reuters.

European bourses are choppy but ultimately trade flat at the time of writing in what has thus far been a session void of incremental macro news. Sectors in Europe are mixed, with outperformance in the Travel & Leisure sector as airlines welcome yesterday’s pullback in crude prices. Conversely, to the downside, Energy names lag. US futures saw broad-based losses with sentiment turning sour since the European cash open, coinciding with a slight rise in yields.

Top European News

• ECB’s Kazimir said September EZ core inflation confirmed ECB expectations and reiterated that he believes the last rate hike was the final one. He said we need to be convinced we are at the top of the rate cycle based on data available in December and March meetings, and when asked what would trigger a December hike, said this is not a scenario I’d like. He added we are trajectory of declining inflation, and inflation decline is taking somewhat longer. Kazimir added we should not at the moment use other tools such as balance sheet until we are certain we do not need to hike rates further, according to Reuters.
• ECB’s de Guindos said the current level of interest rates to help tame inflation; adding “we’re data dependent”. He added it is premature to discuss rate cuts.
• Low water levels after recent dry weather are preventing cargo vessels from sailing fully loaded on the Rhine river in Germany, with surcharges added to usual freight rates, according to traders cited by Reuters.
• BoE Monthly Decision Maker Panel data – September 2023: One-year ahead CPI inflation expectations increased slightly to 4.9% in September, up from 4.8% in August. Three-year ahead CPI inflation expectations remained flat at 3.2% in September. Expected year-ahead wage growth remained unchanged at 5.1% on a three-month moving average basis, though the single month reading for September at 5.2% was 0.2 percentage points higher than in August.

FX

• DXY index remains relatively contained between 106.500-840 confines and the Buck stayed broadly softer awaiting Challenger Layoffs, jobless claims and NFP on Friday for the next major fundamental driver.
• Antipodeans narrowly outperform with the AUD gleaning support from a wider-than-expected trade surplus.
• Pound was flagging even before a more contractionary than feared UK construction PMI. Cable remains capped by the 10 DMA and retreated towards 1.2100.
• Fix demand and exporter supply underpinned the Yen on the way from sub-149.00 to 148.27, and before the upturn in yields.

Fixed Income

• Having bounced further Wednesday’s lows, bonds are showing traits of fatigue and a reversion to the bear trend that was in place before their midweek reprieve.
• Bunds have regrouped after their retreat to 127.21 and are back above par alongside Eurozone peers bar Bonos.
• Gilts are underwater following a reverse from 92.37 to 91.94, irrespective of a deeper than anticipated contraction in the UK construction PMI.
• T-notes are lagging within a 107-09/106-31+ range ahead of Challenger Layoffs, jobless claims, trade and another busy slate of Fed orators.
• France sold EUR 9.94bln vs exp. EUR 9-10.5bln 3.50% 2033, 2.50% 2043, and 3.00% 2054 OAT.
• Spain sold EUR 6.44bln vs exp. EUR 5.5-6.5bln 3.50% 2029, 2.35% 2033 and 1.00% 2042 Bono.

Commodities

• Crude futures remain on the backfoot following yesterday’s mammoth decline which saw both contracts settle lower by over USD 5/bbl apiece.
• Dutch TTF is softer despite a twist in the Australian LNG saga in which unions are likely to vote to resume strikes at Chevron facilities after Australia’s Offshore Alliance said Chevron reneged on commitment given to FWC
• Spot gold is flat intraday awaiting tomorrow’s US labour market report, with the yellow metal uneventful within yesterday’s USD 1,815.50-30.39/oz parameters.
• Australian Union Representative said members are likely to vote to resume strikes at Chevron (CVX) facilities in meetings commencing later tonight, according to Reuters. Australia’s Offshore Alliance said Chevron reneged on the commitment given to FWC to incorporate recommendations into Co’s EBA’s for Wheatstone and Gorgon facilities; members called a meeting at 19:00 tonight for all members on a day shift or off-facility.
• Turkish Energy Minister said the Iraq-Turkey pipeline is operational as of Wednesday and no obstacle to shipping oil to global markets; when asked about oil flows started on the pipeline, and added that Turkey stands ready to ship incoming oil, via NTV.
• Russia’s President Putin ordered to consider the introduction of regulated fuel oil prices during the heating season, via Tass.

US Event Calendar

• 07:30: Sept. Challenger Job Cuts +58.2% YoY, prior 266.9%
• 08:30: Sept. Initial Jobless Claims, est. 210,000, prior 204,000
• 08:30: Sept. Continuing Claims, est. 1.67m, prior 1.67m
• 08:30: Aug. Trade Balance, est. -$59.8b, prior -$65b

Central Bank Speakers

• 09:00: Fed’s Mester Speaks at Chicago Payments Symposium
• 10:40: Fed’s Kashkari Moderates Q&A at Conference
• 11:30: Fed’s Barkin Speaks on Economic Outlook
• 12:00: Fed’s Daly Speaks at Economic Club of New York
• 12:15: Fed’s Barr Speaks on Cyber Risk in the Banking Sector

DB’s Jim Reid concludes the overnight wrap

Morning from Berlin. I nearly didn’t get here as I was held at airport security for 30 minutes as my bag repeatedly set off their alarm when they swabbed it. I got my bag completely emptied and turned upside down, was given a full body search, got interrogated about where I was going, where I lived and where I worked. The only thing they didn’t ask me is why bonds keep selling off? I can only think the kids spilt some gunk or glue on my bag leaving some suspicious residue.

With much relief and just before last call, they gave me the all clear and let me go. Relief also extended across financial markets yesterday, as after a fraught start we saw bonds and equities rally back following a tough few days. However, the recovery accelerated with bad employment data, so the answer to how to get out of the recent rout was clearly the return of bad news is good news.

Things looked very different an hour after we went to print yesterday. The bond rout had intensified at an alarming rate, which given recent moves is an impressive thing to say, especially given the time of the day. At this point, the 30yr Treasury yield surpassed 5%, whilst the 10yr Treasury yield hit an intraday high of 4.88%, which we haven’t seen since 8 August 2007, the day before BNP Paribas froze €1.6bn worth of funds due to issues among US subprime mortgages. That’s often taken to be one of the first tremors of the global financial crisis, so in some ways you could say the 10yr yield was finally back to levels seen prior to the GFC. But after reaching those highs in the European morning, we then had a sharp reversal of more than -10bps intraday, with the 10yr yield ending the session -6.3bps lower at 4.73%, which has been followed by a further -2.3bps fall overnight to 4.71% this morning. Meanwhile, 2yr yields (-9.8bps) saw their largest decline since late August. And 30yr yields closed at 4.86% after poking their head above 5% for the first time since 2007 for just a few minutes.

There were also violent moves elsewhere, none more so than oil, with Brent Crude down -5.62% to $85.81/bbl, its largest daily decline in over a year. Bear in mind it was only last Friday that Brent closed at $95.31/bbl, so its losses for the week already stand at -9.97% over just three days so far. If that holds, it would be the worst weekly performance for oil since the banking turmoil back in March. That trend lower is in line with other cyclical commodities over recent days, and copper (-0.88%) fell to a 4-month low as well yesterday.

Back to the bond turnaround, where the rally from the London breakfast yield highs got extra legs after some weaker-than-expected data on the US labour market, as the ADP’s report of private payrolls showed just +89k jobs were added in September (vs. +150k expected). That’s the weakest number since January 2021, and raised concerns about what that might mean for tomorrow’s jobs report, even if the correlation has been weak month-to-month between the two. They could be moving in the same general direction though, and remember the payrolls trend over recent months has been decisively lower, with the 3-month average now standing at a post-pandemic low of +150k. Shortly after ADP, we then got the ISM services for September, which came in broadly as expected at 53.6 (vs. 53.5 expected). However, the new orders subcomponent fell to its lowest so far in 2023, at just 51.8. For markets, the weak data led investors to dial back the chances of another rate hike from the Fed this year, which fell from 52% beforehand to 42% by the close yesterday.

That said, even as Treasuries managed to rally, we got fresh evidence yesterday about how the recent rise in rates was already filtering through to the real economy. For instance, data from the Mortgage Bankers Association showed the 30yr fixed mortgage rate was up to 7.53% in the week ending September 29. That’s an increase of 12bps on the previous week, and the highest they’ve been since 2000. Furthermore, the index of home purchase applications fell to fresh “not since 1995” lows.

Yields also opened at new highs in Europe as well, with the 10yr bund yield trading above 3% for the first time since 2011. But as with the US, they came off those highs during the session, with yields on 10yr bunds (-4.9bps), OATs (-5.1bps) and BTPs (-7.5bps) all falling back. Even so, that wasn’t much help for European equities, and the STOXX 600 fell another -0.14% on the day to a fresh 6-month low.

US equities managed to post a much better performance and close around the highs for the session. The S&P 500 managed to gain +0.81%, its strongest advance in nearly three weeks, with most of the increase coming in the final hour or two of the US session. Megacap tech stocks led the way, as the NASDAQ (+1.35%) and the Magnificent Seven (+2.21%) saw stronger advances. The S&P 500’s advance was a broad one, though energy stocks (-3.36%) suffered amidst the oil weakness. Small caps also underperformed, with the Russell 2000 index only up a modest +0.11%, leaving it -1.83% down YTD.

That recovery has continued in Asia overnight, with equities posting a very strong performance. For instance in Japan, the Nikkei (+1.67%) is currently on track to end a run of 5 consecutive declines, with its best daily performance since August, whilst the TOPIX (+2.00%) is on track for its best performance of 2023 so far. Elsewhere, the KOSPI (+0.76%) and the Hang Seng (+0.76%) have also posted a decent advance, whilst markets in mainland China remain closed for a holiday. Looking forward, US equity futures are steady this morning, with those on the S&P 500 up +0.03%.

Looking at yesterday’s other data, US factory orders were stronger than expected in August, with a +1.2% gain (vs. +0.3% expected). However, Euro Area retail sales in August were worse than expected, with a -1.2% contraction (vs. -0.5% expected). Otherwise, the final composite PMI numbers were slightly better than the initial flash prints, with the Euro Area number at 47.2 (vs. flash 47.1) and the US number at 50.2 (vs. flash 50.1).

To the day ahead now, and data releases from the US include weekly initial jobless claims and the August trade balance. Over in Europe, there’s also French industrial production for August, and the September construction PMIs from Germany and the UK. From central banks, we’ll hear from the Fed’s Mester, Kashkari, Barkin, Daly and Barr, ECB Vice President de Guindos, and the ECB’s Kazimir, Lane and Nagel, along with BoE Deputy Governor Broadbent.

“This is not about NATO expansion!”… the Western public has been told over and over again of the war in Ukraine, now in its 20th month. “Never about NATO… Nothing to do with NATO” – has been the constant refrain from US officials and media “authorities”. Below is a video compilation by Matt Orfalea showing Western media personalities and analysts claiming that the war in Ukraine had nothing to do with NATO expansion… but then oops… only this last month NATO Secretary General Jens Stoltenberg clearly and repeatedly acknowledged that Putin made the decision to invade Ukraine because of fears of NATO expansionism in a speech before the EU Parliament’s foreign affairs committee.

For a trip down memory lane, and more importantly so this epic compilation of clips highlighting the MSM drumbeat of lies doesn’t get memory-holed, watch the below compilation by Matt Orfalea…

Stoltenberg’s September 7th speech laid out in reference to Vladimir Putin, “He wanted us to sign that promise, never to enlarge NATO. He wanted us to remove our military infrastructure in all Allies that have joined NATO since 1997, meaning half of NATO, all the Central and Eastern Europe, we should remove NATO from that part of our Alliance, introducing some kind of B, or second class membership.”

Stoltenberg then emphasized in what constitutes a rare moment of agreement with Professor John Mearsheimer (unintentional perhaps)  

“We [NATO] rejected that. So he went to war to prevent NATO, more NATO, close to his borders.”  

Below is the original Stoltenberg footage from early September in full…

NATO Sec-Gen Jens Stoltenberg declares the Ukraine proxy war a fight for NATO expansion and the limitless right to place military installations on Russia’s frontiers – something no Western power would accept from an adversary pic.twitter.com/ZaJFBjQnre

— Max Blumenthal (@MaxBlumenthal) September 22, 2023

Authored by Michael Snyder via TheMostImportantNews.com,

Artificial intelligence is changing our world at a pace that is absolutely breathtaking.  If you would have asked me a decade ago if I would live to see artificial intelligence create a world class piece of art or a full-length feature film, I would have said no way.  But now those are simple tasks for artificial intelligence to accomplish.  So what is going to happen once AI becomes millions of times smarter and millions of times more powerful than it is today?  Given enough time, AI would take over every area of our lives.  Our world is definitely crazy right now, but fifty years from now it would resemble something out of an extremely bizarre science fiction novel if AI is allowed to continue to develop at an exponential rate.

Unfortunately, only a very small minority of the population is even concerned about the potential dangers posed by AI, and that is a problem.

Needless to say, the growth of AI has enormous implications for our economy.

AI can already perform most simple tasks much better and much faster than human workers can, and multiple studies have concluded that millions of jobs are at risk of being lost.  The following comes from Fox News…

For example, in March 2023, technology firm OpenAI released a report that found at least 80% of the U.S. labor force could have at least 10% of their work-related tasks affected by the introduction of GPT, while another 19% of employees may see at least 50% of these work-related tasks impacted. While GPT influence impacts all wage levels, the higher-income jobs potentially face the greatest exposure, concludes OpenAI.

Also in March 2023, researchers at investment banker Goldman Sachs, after collecting data on occupationally-oriented tasks in Europe and the U.S., found that roughly two-thirds of current occupations are exposed to varying degrees of generative AI automation (such as found in ChatGPT), and that AI could substitute for nearly one-fourth of current work performed.

In July 2023, the McKinsey Global Institute issued a report estimating that without generative AI, automation could take over tasks accounting for 21.5% of the hours worked in the U,S. economy by 2030; but with generative AI, that share increased to 29.5%.

So what would happen to all of the workers that would no longer be needed once AI starts taking over most of our jobs?

I think that is a question that all of us should be asking.

Artificial intelligence also threatens to transform our personal relationships.

“AI girlfriends” are proving to be immensely popular with young men, and we are being warned about the “severe consequences” that this is likely to cause…

The rise of virtual artificial intelligence (AI) girlfriends is enabling the silent epidemic of loneliness in an entire generation of young men. It is also having severe consequences for America’s future.

How is something that seems so ridiculous — a virtual AI girlfriend — causing a future crisis among Americans? Well, with millions of users, apps have created virtual girlfriends that talk to you, love you, allow you to live out your erotic fantasies, and learn, through data, exactly what you like and what you don’t like, creating the “perfect” relationship.

Who wouldn’t want a “perfect” relationship?

In the real world, people have flaws, and so there is no such thing as a “perfect” relationship.

So if AI can create a girlfriend that is ideal for you all the time, I can see why a lot of people would be attracted to that.

And this is really happening.  In fact, an AI girlfriend that is based on a real life social media influencer already has more than 1,000 users…

These virtual girlfriends can even be based on real people. One influencer created an AI bot of herself named Caryn, then gained over 1,000 users (i.e. real boyfriends) in less than a week and a waitlist of more than 15,000 people.

An AI girlfriend might sound enticing. You get to connect with a super hot girl who listens to you and appreciates you, 24/7. Beyond choosing physical attributes, down to the size of her rear end, you can pick her personality. You prefer “hot, funny, and bold”? That’s what she will be. Or if “cute, shy, and modest” is more your cup of tea, she’s got you covered.

Of course it isn’t just lonely young men that are getting pulled into this world.

In my next book, I discuss a woman that has actually married her AI boyfriend, and she insists that she is happier than she has ever been before.

But what is the cost?

What will this do to our society?

There is already a raging epidemic of loneliness among our young men, and it is getting worse with each passing day…

Let’s look at the hard numbers. More than 60 percent of young men (ages 18-30) are single, compared to only 30 percent of women the same age. One in five men report not having a single close friend, a number that has quadrupled in the last 30 years. The amount of social engagement with friends dropped by 20 hours per month over the pandemic and is still decreasing.

AI is also starting to be used in our churches.

Last month, a Methodist church in Texas made headlines all over the world when the pastor conducted an entire “worship service” using AI technology…

On September 17, 2023, the Violet Crown City Church, a Methodist church in North Austin, US, transformed the tradition of Sunday service into the new age with Artificial Intelligence.

Pastor Jay Cooper, of Violet Crown City Church, decided to debut an AI-generated worship service for his congregation.

This is so wrong.

But it is inevitable that more churches will start doing this.

Pastor Cooper asked Chat GPT to create an entire service for his congregation, and it spit out “prayers, a sermon, and an original song based on the sermon itself”…

Jay came across this idea of using AI to worship God through using Chat GPT himself for personal use such as writing humorous country music lyrics for fun, and thought it would be a great way to move his congregation into the 21st-century by introducing them to AI in a way that still lets them worship God.

Using AI, Jay recorded the service while letting the artificial intelligence generator conduct the service, with AI being able to create prayers, a sermon, and an original song based on the sermon itself.

But what kind of “spiritual content” should we expect from a machine?

Ultimately, all AI programs are going to mirror the values of those that created them and those that are using them.

In this case, current societal values were clearly reflected in this “worship service”.  The following is how the “sermon” began…

“Come, all who are weary, come all who are heavy-laden,

“For in this place, we find rest for our souls.

“Come, people of all backgrounds and walks of life,

“For here, we celebrate the diversity of God’s creation.

“Come, seekers of justice and peace,

“For together, we strive to make the world a better place.”

Seriously?

Several politically-correct buzzwords are used within the first six sentences, and it is obvious what this AI “sermon” is trying to communicate.

Of course this wasn’t the first church service that was created by artificial intelligence.

As I have written about previously, the very first church service that was created by artificial intelligence was conducted at St. Paul’s Church in Bavaria, Germany…

Early in the summer of 2023, robots projected on a screen delivered sermons to about 300 congregants at St. Paul’s Church in Bavaria, Germany. Created by ChatGPT and Jonas Simmerlein, a theologian and philosopher from the University of Vienna, the experimental church service drew immense interest.

It is just a matter of time before more churches jump on the bandwagon.

And other religions are now making use of cutting edge technology as well.

If you can believe it, multilingual robots have been deployed at the Grand Mosque in Saudi Arabia…

Consider the recent robotic initiatives at the Grand Mosque in Saudi Arabia. At this mosque, multilingual robots are being deployed for multiple purposes, including providing answers to questions related to ritual performances in 11 languages.

Notably, while these robots stationed at the Grand Mosque can recite the Holy Quran, they also provide visitors with connections to local imams. Their touch-screen interfaces are equipped with bar codes, allowing users to learn more about the weekly schedules of mosque staff, including clerics who lead Friday sermons. In addition, these robots can connect visitors with Islamic scholars via video interactions to answer their queries around the clock.

If this is what is happening today, what do you think our world would look like 20 or 30 years down the road?

The good news, if you want to call it that, is that I don’t think we are going to get the chance to find out.

The clock is ticking, and humanity is quickly running out of time.

So we may never get to see all of the horrors that artificial intelligence would unleash upon our society.

But the changes that we have seen so far are certainly bad enough, but most of the population still does not seem too alarmed by any of this.

*  *  *

Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

There’s clearly been a Ukraine war narrative shift among media and pundits in the West, as we’ve been covering, but for the first time this week President Zelensky himself has admitted that “fatigue” is setting in more broadly amid the war effort. This is leading Western advisers and military strategists to float ‘solutions’ toward winding down the conflict: 

According to Teona Lavrelashvili, an analyst at the European Politics Centre, they could signal that several allies are ready for a “pragmatic solution” to the end of the war,.

But Kyiv will be “worried but not panicking” by the growing sense that some traditional allies have “fallen out of step”, said Sean Hanley, an associate professor in Comparative Central and East European Politics at University College London.

To recount, just over the last several days Ukraine aid was dropped from the stop-gap budget bill in US Congress, Poland declared it would cease arming Kiev amid the row over grain imports, a Moscow-friendly politician has been elected to lead Slovakia, and most recently Britain’s military has said it’s run out of vital arms to give Kiev.

All of this has led Zelensky to admit “There is fatigue” – but he pivoted quickly to citing a “slowly” progressing counteroffensive. 

He told an Italian broadcaster in a fresh interview, “There is fatigue but we will do everything to win against our enemy, and our counter-offensive goes ahead, even if slowly we do everything to repel the enemy.” And on the billions in future US aid held up and potentially canceled:

He said Ukraine felt support from the United States in “these very difficult times” and was convinced this would be the case in the future despite the delay in the approval of US financial aid due to the political bickering in Washington, DC.

But there’s no evidence of any “progressing” Ukraine offensive. For example the The Economist documented that “Ukraine has liberated less than 0.25% of the territory that Russia occupied in June.” The establishment publication noted, “The 1,000km front line has barely shifted.”

And on whether the supply of Western advanced arms has made a difference, The New York Times recently observed that in first two weeks of the counteroffensive “as much as 20% of the weaponry Ukraine sent to the battlefield was damaged or destroyed, according to US and European officials.”

Sign of the times: neocon pivot to “it’s all about China”…

Lindsey Graham giving another impassioned defense of the top foreign policy priority of Biden, US liberals, Raytheon and CIA.

I love how – seeing support rapidly erode for Ukraine, especially among the right – they just started cynically claiming it’s necessary to fight China. https://t.co/AjEij2rRgH

— Glenn Greenwald (@ggreenwald) October 2, 2023

Sending a “message to China”…

THE NEOLIBERAL MIND WILL DESTROY US ALL pic.twitter.com/0XwHeYPWvs

— The_Real_Fly (@The_Real_Fly) October 2, 2023

…or else pivot to “it’s all about American jobs”:

saw this on CNN the other day. pic.twitter.com/GJhkW78SbE

— a newsman (@a_newsman) October 1, 2023

“Time is not our friend,” Kirby has admitted, vowing to not let Putin outlast US will…

This is the statement of a Biden White House that knows it has lost this proxy war but is desperate to keep it going so as to avoid a public capitulation.
Russia will continue to go slow and grind down the NATO proxy. The slower this goes, the faster the collective west… pic.twitter.com/a4vs0EIezd

— Alex Christoforou (@AXChristoforou) October 3, 2023

Meanwhile, fresh analysis in UnHerd has explained why even if Biden can eventually push his new Ukraine funding through, the political winds are likely to continue blowing strongly against Kiev…

But even if that happens, the White House will still face an increasingly uphill struggle in mustering political support for its strategy of open-ended assistance to Ukraine. Not only is Trump, with his anti-war stance, continuing to rise in the polls, but even the more hawkish elements of the US and Western establishment are starting to rethink their stance on Ukraine.

Indeed, it seems to finally be dawning on them that, as one leading commentator wrote in Newsweek, “there is no realistic basis to believe that Ukraine has the capacity to attain its stated strategic objective to reclaim all its territory, including Crimea”. A correspondent at The Wall Street Journal, meanwhile, recently noted that Ukraine’s goal of retaking all the territory it lost now “appears a distant prospect”.

Interestingly, the title of the piece spells out that if there is escalation, “Nato won’t win a long war in Ukraine” and that “An Afghanistan-style conflict could cripple Europe.”