There is no way for a government to enforce Diversity, Equity and Inclusion policies without also discriminating against certain groups of people.  DEI, by its very nature, is anti-merit, anti-success and pro-privilege.  Of course, the groups that are most commonly discriminated against under DEI quotas are mostly white, male and straight.  The assumption being that white dudes are widely considered “fair game” by the rest of society. 

This dynamic creates a never-ending cycle of people clamoring for oppression status rather than personal integrity and accomplishment.  To win in life, you must figure out a way to catch the government’s favor and attain that coveted prize; to rise to the top of the diversity totem pole.

This ideology has infected societies throughout most first world countries and even some developing nations.  Woke activism seems rampant in the US, but that’s because DEI faces American opposition.  The color revolution is louder because their power is failing.  For the rest of the west, however, DEI in government is an absolute.  This is a problem because it requires Americans to reconsider which countries they view as “allies.” 

The Trump Administration is adjusting to this ideological conflict quickly, and part of this change requires that the US starts openly calling out far-left governments for their destructive behaviors.

Countries enforcing DEI policies will now be at risk of the Trump Administration deeming them as human rights abusers, which upends the status quo when it comes to diplomatic relations.  The State Department is issuing new rules to all US embassies and consulates involved in compiling its annual report on global human rights violations.  

Other policies by foreign governments which US embassies will be told to categorize as human rights infringements include:     

Subsidising abortions, “as well as the total estimated number of annual abortions”     

Gender-transition surgery for children, defined by the state department as “operations involving chemical or surgical mutilation… to modify their sex.”     

Facilitating mass or illegal migration “across a country’s territory into other countries.”     

Arrests or “official investigations or warnings for speech” – a reference to the Trump administration’s opposition to internet safety laws adopted by some European countries to deter online “hate speech” (any speech which is critical of woke ideology no matter rational).  

A senior State Department official says, rather blatantly, that the new rules are “a tool to change the behavior of governments”.  That is to say, the sooner foreign governments abandon woke cultism, the easier it will be for them to engage with the US in terms of relations and trade.  

State Department deputy spokesperson Tommy Pigott said the new instructions are intended to stop “new destructive ideologies [that] have given safe harbor to human rights violations”. 

“The Trump administration will not allow these human rights violations, such as the mutilation of children, laws that infringe on free speech, and racially discriminatory employment practices, to go unchecked.” 

Leftist officials are calling the new policy an “attack on marginalized groups” and a “new low for Trump.”  But once again, there is a substantial disconnect between what leftists see as a human right versus what normal people see as a human right.

The rights that the Trump Administration is referring to include the right to free speech, the right to secure borders, the right to cultural integrity without fear of engineered cultural replacement, the protection of children from manufactured consent, the right to equal opportunities (not equal outcomes), the right to life, etc.  Many of these ideals are taken for granted in the US as the norm, but the Biden Administration revealed how fragile such standards can be.

Leftists see human rights as contingent on identity.  In other words, some people have more rights than others depending on their genetic history and gender orientation.  Bureaucrats and progressive gatekeepers have conveniently made themselves the decision makers for which groups deserve the most rights.

They see speech rights as conditional; it all depends on the ethnicity and sexual identity of the person who is talking. 

They treat national borders and national identity as a social construct that needs to be torn down (if the country rooted in western civilization).  They see the west as a global commons, an economic zone to be pillaged, not protected.

The view morality as relative, childhood as circumstantial and parental rights as an obstacle.  The grooming of children is a political imperative for leftist survival.  Questions of right and wrong never enter their minds.    

Millions of Americans united in solidarity against DEI and other mechanisms of progressive authoritarianism, turning back from the edge of utter disaster.  It makes little sense, then, to reward woke foreign governments with alliances and economic benefits after spending years struggling to defeat those same cancerous notions in the US.    

Derek Chauvin’s defense attorneys have filed a new petition that challenges the 2021 murder conviction that sent Chauvin to prison over George Floyd’s death. The petition includes over 50 former and current MPD officers who made sworn declarations that the technique Chauvin used to restrain George Floyd was part of the official training they received.

The 71-page petition was sent to Hennepin County District Court, where Attorney Greg Joseph stated that “this case simply never made sense.”  The petition asserts that the case involves two key issues: intent and causation. Did the restraint of Floyd follow policies and procedures of the Minneapolis Police Department (MPD); and, did the restraint cause Floyd’s death

In each case, the evidence is thin.  Yet, prosecutors achieved a conviction which many critics argue was pure theater – The human sacrifice of Derek Chauvin on the altar of race politics as a means to justify the mob violence of Black Lives Matter groups.  The protests (and the hysteria over the pandemic), paid for with hundreds of millions of dollars in NGO funds, brought chaos in the middle of the US election process and Democrats took full advantage of. 

The benefits behind throwing Chauvin to the wolves were many. 

During the trial, the Minneapolis Police Department denied that the specific restraint used by Derek Chauvin.  This denial came directly from MPD leadership.  If Chauvin was simply applying restraint techniques that he was trained by the MPD to use then he cannot be held accountable for any potential ill effects that the technique causes.   

The point is of course moot if the restraint had nothing to do with George Floyd’s death. 

In seeking to vacate Chauvin’s conviction, or obtain a new trial, the petition argues that Chauvin “was deprived of his right to due process under the Fourteenth Amendment of the U.S. Constitution and Article I of the Minnesota Constitution.” 

In speaking about the prosecution – and what he believes was the false testimony of MPD Inspector Katie Blackwell, Chief Medaria Arradondo, and others during Chauvin’s trial – Joseph told Alpha News, “you can only run from the truth for so long.” 

The petition argues that the methods used to examine video footage of George Floyd’s restraint and arrest by “expert” witness for the prosecution are at odds with the methods used by the medical examiner, Dr. Andrew Baker, the only doctor who conducted an actual autopsy of Floyd.  It should be noted that Baker did in fact blame the subduing of Floyd as the ultimate cause of death, even though no damage was found to Floyd that would explain the death as a homicide. 

The official autopsy performed by the Hennepin County Medical Examiner found no physical trauma, fractures, or damage to George Floyd’s trachea, larynx, hyoid bone, or surrounding throat structures. This included no bruising, lacerations, or other visible injuries in the neck area. The report explicitly noted “no life-threatening injuries identified” to the neck muscles, cartilage, bones, or soft tissues.

The autopsy, instead, said that Floyd died of severe heart disease that was “complicated” by the arrest.  Baker had told the jury “that he had certified deaths due to atherosclerotic cardiovascular disease under similar conditions.” 

Furthermore, Baker found 11 ng/mL of fentanyl in Floyd’s toxicology; this is at least twice the amount required for a common deadly dose. He was described by witnesses as erratic and ‘extremely impaired’, throwing himself around the back of the police vehicle to escape arrest. Even if Floyd was a chronic user, fentanyl is known to exacerbate heart disease. 

It should be noted that no other officer in modern history has been convicted of murder charges for a death that took place during prone restraint.  At most, Chauvin should have faced involuntary manslaughter charges. 

In other words, Derek Chauvin was convicted for the second-degree murder of Floyd because he was in the wrong place at the wrong time with the wrong suspect. He just happened to be arresting the man (who resisted arrest while he had a heart condition and poison in his veins) using a technique which MPD officers say was a part of Chauvin’s training.  The jury was reportedly lied to, and apparently coached to ignore the obvious contradictions.

If this is the case, then it confirms everyone’s suspicions:  The trial was a complete clown show – a political farce.

Things between Israel and Lebanon just escalated in a major way on Sunday, as the Israeli military launched a major attack on the capital of Beirut, in what later announced as another targeted strikes on top Hezbollah leadership.

The Israeli military (IDF) announced that it “eliminated” Hezbollah’s chief of staff Haytham Ali Tabatabai, after Lebanon’s official National News Agency (NNA) reported that two missiles were fired at an apartment building on al-Arid Street in Haret Hreik neighbourhood of Dahiyeh. 

A large plume of smoke could be seen rising above the area, said to be a Hezbollah stronghold of southern Beirut, and extensive damage to cars and surround buildings resulted.

At least five people were killed, and another 28 were wounded in the assault which came without warning, and has been strongly condemned by both Hezbollah and the Lebanese government.

An official statement from Hezbollah didn’t immediately confirm the killing of Tabatabai but said it “breaches a new red line” – following recent weeks of a series of escalating Israeli attacks in southern Lebanon, despite the ceasefire having long officially been in place.

Hezbollah’s statement alluded to the ceasefire, saying that “agreements are useless with the enemy” and that “We are coordinating with the Lebanese state to put an end to this Israeli violation.”

The New York Times too has admitted that “the attack on Sunday — the assassination of a senior Hezbollah leader near the Lebanese capital — was a new escalation.”

Al Jazeera’s Zeina Khodr has explained from Beirut, “There’s still no confirmation, but the very fact that this Israeli strike happened without an evacuation order, without a prior warning if you will, really suggests that they were after a high profile figure or a high-value target.”

A busy, densely packed neighborhood was rocked by Israeli missiles during the daytime hours of Sunday…

Israel just bombed a residential neighborhood in Beirut, violated Security Council resolution SCR 1701, the ceasefire agreement, and international law with absolutely no consequences.

This is another war crime and the International Criminal Court remains silent. pic.twitter.com/KLCeD0JDAV

— Mohamad Safa (@mhdksafa) November 23, 2025

“Israel said the person killed was Haytham Ali Tabatabai. He is believed to be the number two of the movement, one of the founding members of the organization. A very keen military figure; a man wanted by the United States, which designated him as a terrorist. There’s a $5m bounty on his whereabouts,” she added.

Khodr’s statement pointed to the likelihood of Israel still maintaining well-placed intelligence assets within Hezbollah, as she called it “a major security breach”.

Since the ‘pager attacks’ as well as the September 2024 killing of Hezbollah founder and Secretary General Hassan Nasrallah, Israel has been on a roll in terms of largely decimating Hezbollah’s leadership and capabilities.

Currently the Shia militant group with ties to Iran has been in talks with the Lebanese government to potentially disarm, at least in some areas of the country, also amid pressure from Washington.

Authored by Stuart Liess via The Epoch Times (emphasis ours),

A federal Judge has ordered a halt to the Trump administration’s deployment of National Guard in Washington, following months of keeping watch in the city.

U.S. District Judge Jia Cobb ruled on Nov. 20 that the National Guard deployment, which had been there since August, was disrupting the capital’s ability to self-govern.

The lawsuit, filed by the District of Columbia, argues that the Trump administration has exceeded its authority in deploying military forces for civil matters without the city’s request and, secondly, questions their use of troops from other states.

District of Columbia Attorney General Brian Schwalb applauded the ruling as a “victory for DC, Home Rule, and American Democracy.”

“The U.S. military should not police American citizens on American soil,” he posted in a statement on X.

The court has given the Trump administration until Dec. 11 to end the deployment, allowing them time to appeal.

White House spokeswoman Abigail Jackson said, “President Trump is well within his lawful authority to deploy the National Guard in Washington, D.C., to protect federal assets and assist law enforcement with specific tasks.”

On Aug. 11, President Donald Trump signed a memorandum deploying over 2,000 National Guard troops to the nation’s Capitol, declaring a national emergency, following a series of attacks on government staffers.

In his memorandum, Trump described Washington as having “a violent crime rate that is higher than some of the most dangerous places in the world.”

The National Guard is a reserve army unit that operates in each state and is usually under the governor’s command, generally serving during natural disasters and in military service abroad.

They have been called upon in recent years to serve more domestic roles, like assisting border control forces at the U.S. southern border or during the Black Lives Matter Riots in 2020.

What makes Washington unique is that it lies directly under the president’s jurisdiction; therefore, he has direct control over the city’s use of the National Guard, but deployment from other states usually would require each governor’s approval, unless in a state of emergency.

Trump has been targeting various cities with high crime statistics over the year, looking to send the National Guard to clean them up.

On Sept. 15, Trump signed an order with Tennessee Gov. Bill Lee to set up a task force, combining the National Guard with FBI, drug enforcement, and immigration authorities, to send to Memphis to clean up its historic levels of violent crime.

On Nov. 17, a Tennessee judge ruled that the state’s deployment of the National Guard violates the state’s military code, after Democrat Shelby County Mayor Lee Harris filed a lawsuit. Lee is currently appealing.

Support for Trump’s use of the National Guard across various cities in the United States runs along party lines, with Republicans in support and Democrats strongly against.

The Department of Justice is currently appealing a Nov. 16 district ruling that blocked the deployment of the National Guard to protect a U.S. Immigration and Customs Enforcement (ICE) building in Portland, Oregon.

Illinois is also in strong opposition to National Guard deployment in Chicago, with an appeal over a judge’s block currently being weighed by the Supreme Court.

Matthew Vadumn and The Associated Press contributed to this report.

Authored by Jonathan Turley,

California is facing a perfect storm in finances, with a crippling deficit and a declining tax base.

Now, a study of IRS data by the National Taxpayers Union Foundation found that California is losing a taxpayer roughly every minute, as states like Florida, Texas, and North Carolina attract new residents due to lower taxes and higher standards of living.

In comparison, Florida gains a new taxpayer every 2 minutes and 9 seconds while Texas gains one every 2 minutes and 53 seconds.

The result has been a bonanza for Florida, which is now collecting $4 billion more per year for its budget.

The states losing taxpayers at the fastest rate are California, New York, and Illinois. Here is the rate of loss:

California: every 1 minute and 44 seconds

New York: every 2 minutes and 23 seconds

Illinois: every 6 minutes and 4 seconds.

Massachusetts: every 11 minutes and 38 seconds

New Jersey: every 14 minutes and 14 seconds.

These remain high-tax states where there are even greater demands for tax increases (particularly in Illinois, California, and New York) as well as new spending demands. In Illinois, Mayor Brandon Johnson is pushing for disastrous new taxes, while in New York, incoming Zohran Mamdani is demanding new taxes to fund his free buses and other campaign promises.

In Seattle, socialist Katie Wilson won the mayoral election on the promise of new “progressive taxes” to fund an assortment of programs.

In Oregon, as Democratic politicians run on the rise in the cost of living, they just approved a gas tax hike as part of $4 billion tax and charge increases. They may be hoping that the decline in gas costs this year will make the tax less noticeable, but some citizens are pushing to place it on the ballot for voters.

In these states and cities, the assumption is that wealthy people will remain as voluntary game in a type of fiscal canned hunt as politicians discuss new wealth and other forms of taxes. They are not. They are leaving with their wealth and their tax payments.

Unions continue to push for these new taxes as high-tax-paying residents leave these states. At the same time, California and Illinois continue to push their status as sanctuary states, increasing the public burden for schools, hospitals and other programs. As they increase spending and their tax base contracts, the outcome is obvious.

Again, take California. The state experienced a $9 billion decline in taxpayer funds during 2018. That number increased to $29 billion lost in 2020.

As I discuss in my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, there is a common myth that the top five percent of this country do not “pay their fair share.” However, putting that debate aside, the question is whether it will produce more revenue than it costs the state in the long run. As these politicians campaign on clipping the “fat cats” who are not paying their fair share, many are likely to follow the exodus to lower tax states with greater fiscal discipline.

There are many in states like Florida and Texas who worry that new residents from states like New York and California will replicate their prior voting patterns and produce the same disastrous policies in their new states. I just spoke in Boise, Idaho where many are complaining that Californians are moving to the state and adopting the same policies that produced the conditions that they just left behind. The fear is that the voters will not be willing to vote for conservatives or libertarians and simply move like a liberal diaspora from state to state as they reproduce prior tax and fiscal policies.

Time will tell. However, what is clear is that Democratic states are not showing any greater fiscal discipline as they careen toward budget meltdowns.

Rep. Eric Swalwell (D-Calif.) launched his bid for governor of California this week, and he wasted no time floating a plan that could reshape elections far beyond the state’s borders. He told CNN’s Elex Michaelson on Saturday that he wants Californians to vote by phone, a proposal that fits neatly with the left’s push to loosen every guardrail that keeps our elections secure.

“I want to modernize the state,” Swalwell told him. “And, you know, [Newsom] wrote a book called Citizenville, which I read when I was up and coming. He laid out a lot of, you know, great ideas then, and he implemented some of them. And he, you know, was a modernizing force. He’s leaving. And so there is going to be a void. I want us to be able to vote by phone.”

“Vote by phone?” Michaelson asked, clearly surprised by the idea.

“Vote by phone, yeah,” Swalwell confirmed. “If we can do our taxes, do our, you know, our — make our health care appointments, you know, make, essentially, your — do your banking online. You should be able to vote by phone. Make it safe, make it secure. But it’s actually already happening all over the United States.”

Swalwell continued, “I want us to be a blue state that doesn’t do just a little bit better than like Georgia or Alabama when it comes to like voting access, I want us to max out democracy. Also, as it relates to democracy, if you wait in line for 30 minutes or more, if you do want to vote in person, I think you should fine every county for every minute that a person has to wait longer.”

He added, “We have to be better, not just a little bit better than the other states.”

🚨 JUST IN: California Rep. Eric Swalwell is being TORCHED for arguing, “I want us to be able to vote by PHONE.”

“I want us to MAX OUT democracy!” 🤯

This is the worst voting idea I’ve EVER heard. That would be an abject disaster.pic.twitter.com/zm7OXUwvO5

— Eric Daugherty (@EricLDaugh) November 22, 2025

Swalwell painted his proposal as part of a broader modernization effort, citing the DMV as another area where modernization can occur.

“I don’t think Californians should have to go in person to the DMV anymore. I think we can do that virtually. I think you can have the DMV employees do it virtually, but that’s a lot of real estate.”

No one likes waiting in line at the DMV. Still, Swalwell’s vision for voting turns one of the most critical pillars of our republic into an experiment in convenience at the expense of integrity. It’s been tried before, and the vulnerabilities are well known.

The 2020 Iowa Democratic caucus exposed the risks of relying on electronic voting apps.

Technical glitches and design flaws caused delays and widespread confusion, leaving thousands of votes uncounted or misreported on caucus night, reinforcing the argument that U.S. elections are far safer and more reliable when conducted with paper ballots and in-person verification, rather than depending on untested or insecure technology.

Similarly, MIT researchers identified serious security and privacy vulnerabilities in the mobile voting app Voatz, which was used in several U.S. elections, including the 2018 West Virginia midterms. Their analysis showed that despite claims of blockchain-based security, hackers could alter or expose individual votes.

The researchers emphasized that internet voting remains insecure, stressing the importance of paper ballots and open, auditable election systems to maintain public trust.

What happens in California rarely stays in California.

If California – a state that often serves as a launchpad for progressive policies to the national level – pulls this off, other states will soon follow.

Which means Swalwell’s plan for voting by phone could pose an existential threat to election integrity nationwide.

The U.S. House of Representatives passed a bipartisan resolution condemning socialism on Friday. The resolution, introduced about a month ago by Rep. Maria Salazar (R-FL), explicitly denounces socialism in all its forms and rejects the implementation of socialist policies in America. The bill cites “more than 100 million deaths at the hands of socialist governments.” Republicans hailed the vote as an easy moral stand against a system that “crushes the human soul.”

While 86 Democrats broke ranks to support the condemnation, 98 Democrats opposed the resolution, which passed 285-98. 

In a 2023 vote, 109 Democrats voted to condemn while 86 voted against it and 14 Democrats voted present. 

This vote came hours before New York City Mayor-elect Zohran Mamdani, a self-proclaimed democratic socialist, arrived in Washington, D.C., to meet with President Donald Trump for the first time. 

Among the 86 Democrats who supported the measure were 14 congressmembers from New York and New Jersey, including House Minority Leader Hakeem Jeffries, who only endorsed Mamdani in the 11th hour of the mayoral race.

Other New Yorkers who also supported the measure included Rep. Ritchie Torres of the Bronx, Reps. Greg Meeks and Grace Meng of Queens, and Reps. Laura Gillen and Tom Suozzi of Long Island. Suozzi made a special point of distancing himself from Mamdani during the mayoral campaign.

The measure was also supported by Republican Staten Island Rep. Nicole Malliotakis, whose mother fled Cuba in 1959. She said her mother left Cuba to avoid what she called “the very things that our new socialist mayor in New York City says he wants.” -CBS News

Democrats voting against the resolution included Rep. Maxine Waters of California, who denounced it as a distraction. “I wish we were here on the House floor this morning debating solutions that would reduce grocery bills, lower housing costs, end Trump’s tariffs strangling American small businesses and manufacturers, solve the Republican health care crisis, or any legislation that allows Americans to afford [to] live through the catastrophic economic policies of Trump and the Republicans,” she said, even though symbolic resolutions are common in the House.

Republicans weren’t buying it.

“100 Democrats just refused to condemn the horrors of socialism,” Rep. Andy Biggs (R-AZ) said in a post on X. “There were no poison pills in this resolution. There are 100+ socialism sympathizers in the United States House of Representatives. Despicable.”

100 Democrats just refused to condemn the horrors of socialism.

There were no poison pills in this resolution.

There are 100+ socialism sympathizers in the United States House of Representatives.

Despicable. pic.twitter.com/v62W5ZcCtD

— Rep Andy Biggs (@RepAndyBiggsAZ) November 21, 2025

“If you needed proof that the left has gone completely insane, here it is,” Congressman Russell Fry (R-S.C) said. 

Of note, across five votes to denounce socialism since 2009, two were unanimous and three were not – including the aforementioned 2023 vote in which 86 Democrats voted against it.

Mamdani dismissed the resolution as irrelevant when asked about it in the Oval Office.

“I have to be honest with you, I focused very little on resolutions. Frankly, I’ve been focusing … on the work at hand,” he claimed. “I can tell you, I am someone who is a democratic socialist. I’ve been very open about that. And I know there might be differences about ideology, but the place of agreement is the work that needs to be done to make New York City affordable. That’s what I look forward to.”

While some may consider this to be nothing more than an ideological purity test, Mamdani’s election – and the results of this vote, clearly indicate the direction of the pendulum.

By Peter Tchir of Academy Securities

Last weekend we published Rotation, pAIn, or Smooth Sailing? following up on the prior week’s report: pAIn Ahead??? The pAIn did in fact continue with the Nasdaq 100 leading the way down over 3%. There was some further “rotation” as the S&P 500 dropped only 2% and our favorite way of expressing rotation, the S&P 500 Equal Weight, dropped “only” 0.9%.

Academy also had the pleasure of doing back-to-back segments to kick off Bloomberg Surveillance on Tuesday, covering a wide range of topics, with a particularly interesting discussion on Venezuela and Mexico (talking about frying an egg with a blowtorch, believe it or not, made sense in the context).

While many of the topics discussed over the last two weeks (Bitcoin, Retail Dip Buying, Volatility, Sentiment/Inflation, Jobs, and the Fed/Bond Yields) are relevant, we are going to start somewhere else with “Free” Money.

“Free” Money

Apologies to readers who will be flagged for opening a report with “Free” Money in the title (that and “guarantee” are probably two of the quickest ways to get flagged by compliance, without using profanity).

But I want to focus on “Free” Money for a moment because it is highly relevant.

What do we even mean by “Free” Money?

• When you announce that you are going to spend X and your stock price goes up by more than X, you have generated “free” money.

If you say you are going to spend $10 billion and your stock goes up $15 billion, it seems logical that your next move would be to announce even more spending.

There are two main areas where we saw this playing out:

• AI, Data Centers, Hyperscalers, etc. Commitment to building it out (the build it, they will come adage) is no longer being rewarded. Simply announcing more spending is not translating into increases in share price. Is the next step companies scaling back their spending? Will their stocks be rewarded if they do? Something we will think out loud about in a bit.
• Crypto and specifically Digital Asset Treasury Companies. When companies like MSTR were trading at a significant premium to their crypto holdings, it was relatively straightforward (still complex, but relatively straightforward) to raise X, buy X amount of crypto, and see your share price rise by more than X. That was incredibly supportive for not just the stocks, but also for the underlying crypto markets. Why would you stop creating “free” money, or more accurately, more shareholder wealth, based on spending, while you could? The answer is, you wouldn’t, but that has become more difficult as many DATCo’s (Digital Asset Treasury Companies) trade closer to their NAV than they have recently.
• Crypto mining companies fall somewhere in between, as to some degree they act like DATs (crypto is a large percentage of their balance sheet) and many have been adding AI/Data Center elements to their business model.

We will explore each of these in more detail, but it suffices to say that during the pAIn trade, the end of “free” money has been a major factor in the downturn, and could weigh on the economy and markets going forward.

“Passive” Investing and Digital Asset Treasury Companies

As any reader knows, we’ve been annoyed about the concept of “passive” investing, when passive is bigger than so-called “active” investing. With actual indexers and closet indexers, one of the keys to success is just to get into the indices. Even more important is to make it to the top of the market weightings and generate immense inflows into your stock.

Is “passive” really “passive” when, with the Nasdaq 100 for example, you are making a conscious decision to invest 55% of every dollar in QQQ that is focused on 11 companies? When passive flows are so large, they can distort valuations, etc.

But what does this have to do with DATs? That is a great question.

The most interesting and successful DATs have (and will continue) to win investors over because they provide some combination of the following:

• Access to something difficult to get access to. That has become less relevant in the U.S. when large public companies like COIN make it easier to get that access. The growth in crypto-focused ETFs has also made this less valuable domestically, but that is not true internationally. So, access remains a compelling part of the DAT space.
• Returns otherwise not available. With crypto-like SOL and ETH, there is money made from simply “staking” the coins. With some recent legislative changes, it will be easier for ETFs to potentially offer this, but it is still an obvious and easy value for DATs to create.
• Truly unique return profiles, based on skills or technology not readily available to investors. This is ultimately the “sweet” spot of DATs. Companies that are able to use tools to generate risk profiles that are truly unique. Whether it is from capital structure, flexibility to move investments around, or being part of shaping the crypto landscape (from a technology standpoint), it allow investors access to something they could not achieve on their own.

Clearly of the “reasons” listed, the last one is the broadest, most interesting, and the one I am excited about.

On October 10th, we saw crypto take what seemed like a “surprising” hit (certainly relative to stocks, which it had been tracking reasonably well with). This graph barely does it justice, as it doesn’t seem to like including weekend price action, which is important to defi, if not tradfi.

Bitcoin struggled all day on the 10th, sliding from $122k to $112k as U.S. stocks closed. Then, sometime after 4pm, it dropped to $105k. It seemed inexplicable and had recovered most of that by the time stocks opened on the following Monday, but something appeared “broken” and crypto (and DATs) have struggled since then.

I’m being told, and it actually makes sense to me, that this performance can be tied (at least partially) to the risk that MSCI may no longer include DATs in their equity indices (the decision is not expected until January 15th).

Using GROK, the best link I could come up with was this. You can get a list of what MSCI potentially considers DATs by clicking the link embedded in that page (search Digital Asset Companies).

We’ve included this chart because it highlights how positive these types of announcements can be. Bitcoin and MSTR traded extremely well as speculation grew that MSTR would be included in the Nasdaq 100. It was announced on December 13th, 2024 and went into effect on December 23rd, 2024.

The decision by MSTR does not impact Nasdaq 100 inclusion, nor should it impact potential inclusion in the S&P 500.

But let’s not underestimate the importance of being included in these indices.

According to Bloomberg, with the most recent filings, Vanguard, Blackrock, and State Street are 3 of the top 5 holders of MSTR – fund groups that are known for their passive investments.

QQQ alone holds 5.56 million shares, or just under $1 billion of MSTR. These are not small numbers, and it demonstrates what is at stake based on the inclusion in various indices.

I expect there to be a lot of comments during MSCI’s comment period (which ends December 31st). Any decision that keeps some or all of the DATs in the indices would be “huge” for crypto since:

• It would not cause forced selling of the stocks based on inclusion.
• It would probably re-invigorate speculation that Standard and Poor’s could include some DATs in their major indices.

Anyways, I felt it was important to discuss this, because crypto is increasingly tied to equities.

Correlations and Volatility

Crypto has the potential to influence other markets in a variety of ways:

• Bitcoin had a market cap of almost $2.5 trillion as recently as early October, and it is now down to $1.85 trillion. Still hefty, but a loss of $650 billion may leave a mark on the global economy.
• At one time, it was easy (in fact necessary) to separate your crypto holdings from your other holdings. You could mentally (and physically) allocate say 10% to crypto and 90% to stocks. You could pull up your crypto holdings and see their performance, and pull up your equities and track them. With ETFs (and to some extent the DATs) you could “mentally” separate your allocations, but increasingly, when you pull up your equity holdings, it is all mixed in. I think, for many, it was easier to HODL when it was very separate. For many investors, especially in the ETF, they might find it more difficult to HODL (not sell) as they see it shrinking their entire portfolio, rather than just the portion of the portfolio that they had felt comfortable with. Might seem like a silly view on my part, but I think it is human nature.

• If I had the time and energy I would look at all Bitcoin ETFs and would try to account for the fact that GBTC, as a trust, had a huge impact on the flows in and around ETFs, once it converted to ETF form. But for now, this seems reasonable to me.
• From IBIT’s inception, on January 10th, 2024 (it seems longer than that), it reached 760 million shares by November 2024. It got to over 1.4 billion shares outstanding by April 2024. It peaked at over 1.4 billion shares. Almost every purchase since then is down. About half of the shares outstanding were issued to buyers above today’s prices. That could cause some selling pressure.
• As many of you know, I often look at ARKK as a “proxy” for disruption. It too is down around 20% in the past month or so. That correlation, at least to me, seems “rational.” We have clearly seen a connection to “momentum” trades, including those “lottery tickets” that can play a role in your ProSec™ portfolio.
• What also caught our eye, and supports our view, was a tweet by an acclaimed investor who was surprised by how correlated a couple of his investments had become with bitcoin, despite no logical linkage. Presumably just a “similar” investor group that was selling other holdings to create liquidity?

Until crypto stabilizes, we could see an impact in all markets.

The money that has been lost is material and is likely leading to liquidity-raising trades in other markets, particularly those that have not fallen as much or are easier to execute. Remember this is also my one small concern about “public” credit, where fear in “private” credit might be causing some desire to reduce exposure to credit and it is generally easier to reduce exposure in public credit funds than in private credit ones.

Realized vol for the Nasdaq 100, for 10 and 30-day horizons, fell, but VIX remains above 20.

The MOVE Index (a measure of bond market volatility) fell, and is “reasonable” around 80, but I think the combination of higher correlations between asset classes (stocks, crypto, even commodities) and higher vol may cause some selling in the “risk parity” world – which would weigh on all markets.

WIRP Volatility – Whether to Laugh or Cry?

I don’t remember a time when I’ve seen predictions for the next Fed meeting swing so wildly. We are back to a 63% chance of a cut at the December meeting, up from 34% (checks notes) the day before! It is still slightly lower than the 67% on November 11.

With a lack of data, the Fed has to decide – do they want to give some insurance against stocks falling further? The minutes would indicate otherwise, but Williams’s comments give credence to that view. There really isn’t enough on the jobs front – the old NFP was released with better jobs, but a worse unemployment rate, though primarily due to more worker participation.

Is the economy cooling enough that inflation should not be viewed as a risk?

If the end of the “free money” trade starts to slow the data center AI spend, then we don’t need to worry about inflation.

I’d cut, but I’m not convinced the Fed will. My expectation remains that we will see 3% before next summer.

The 10-year yield rallied this week, primarily as a “safe haven” or “traditional” risk off hedge (which will help risk parity strategies avoid de-grossing in a meaningful way).

I am keeping an eye on Japanese bond yields, with the 30-year yield at 3.3% (probably the highest since shorting the JGB market was nicknamed the “widow maker”).

Over time, that yield in their home currency should create demand for JGBs at the expense of Treasuries. The strength of the dollar, versus yen, will mitigate that pressure, but something to keep an eye on.

Why Don’t I Read Other Research?

There are a lot of reasons why I don’t read much research from other sources. Sure, part of it is probably laziness. Part of it is also that I enjoy exploring and at Academy, we are in a unique position to form our own opinions as:

• We have a pretty broad-based macro understanding, with credit (one of the more difficult asset classes to understand) as the backdrop.
• The Geopolitical Intelligence Group has a lot of insights into the inner workings of what is going on domestically and globally.
• We also spend so much time virtually and in person visiting and talking to such a range of clients (including corporations, private equity, hedge funds, traditional asset managers, and some of the largest and most important states and municipal bond issuers in the country) that we have a lot of information coming to us from sources we understand.

Then, there are the other reasons:

If I know someone has written a piece on something I agree with, I become unmotivated to peck away at the keyboard, even if my rationale is different – so not knowing helps.

Then, and this is by far the biggest reason, if I see something I really disagree with, I want to write about it, even if I know I shouldn’t. Here is a case in point.

A Hedge Against AI Crash Emerges…

I know there is a cottage industry around predicting the “next big short.” I rail against it periodically. I may even be able to understand not liking the credit profile of the company in question, but thinking it is a “hedge” against an AI Crash is ludicrous

• The equity valuations of many companies in the space can go down significantly before credit risk becomes even a minor concern (again, think about how long companies that were struggling took to default – Toys R Us and Radio Shack as two examples).
• The BBB tranches, composed of BBB tranches of mortgages (the infamous ABX trade of big short fame) were unique in that they were inexpensive to short, and due to a variety of factors, were likely to have no recovery if triggered – not true of corporate debt.
• We have seen time and again and we have written about it on GE (the $100 Billion Credit in the Room) and credit more generally (2019 – The Year of the Debt Diet) – that companies will respond to pressure on their credit, and reduce that pressure.

While not completely relevant, I think people forget that:

1. It costs money, even at 100 bps, to be short.
2. 2. To keep the duration on a spread widening you constantly need to roll to the new 5- year CDS, which is costly over time.
3. 3. Credit in general, CDS in particular, is susceptible to being pushed, so timing the turn is difficult, but the corollary is that sometimes spreads that don’t make sense occur, because they can, not because it is a realistic assessment of risk.

Needless to say, you can probably tell what CDS I would be selling (i.e., taking credit risk on) right now, if I was in position to do so. Take into account this is coming from someone who still thinks there might be more pAIn ahead (stock weakness due to AI/Data Centers) and thinks credit spreads as a whole could leak a little, from a combination of factors.

Bottom Line

We didn’t talk much about ProSec though I could fill a page with links to reports I’ve received pointing out actions that all support the importance of Production for Security and why it will gain in importance for markets and the economy. We will do a deeper dive into ProSec later this week.

I think the economy is at a greater risk than we’ve seen in some time.

The AI/Data Center build-out could possibly slow, and that seems plausible given how the stocks have been reacting to spending (given how important that spending has been to the economy). The end of “free” money is probably worth more than the small pullback we’ve seen, but again, not an alarming turn of events.

The wealth effect of some of the high-flying names and asset classes is potentially an issue for the economy. The crypto/disruption wealth effect is clearly top of mind for me.

I’d cut, but I’m not sure the Fed will, but in any case, I think the risk-reward at the long end of the curve remains biased to higher yields, unless stocks decline by more than I expect – I still think this is more about rotation than a real, across the board, need to sell (QQQ vs RSP).

Safe travels and have a great Thanksgiving, though I hope to get one more T-Report out before you sit down for your Thanksgiving meal!

Officials from the United States, Europe, and Ukraine met in Geneva on Nov. 23 to discuss Washington’s draft plan to end Russia’s war in Ukraine.

President Trump said on Nov. 21 that Ukrainian President Volodymyr Zelenskyy had until Thursday to approve the 28-point plan, which would compel Ukraine to renounce ambitions to join NATO, accept limits on its military, and cede territory.

European allies said they were not consulted while Washington was drafting the plan, leading to some confusion as to which parties were involved in formulating it.

Rep. Eugene Vindman (D-Va.) told MSNBC that he believed the plan was “basically drafted by Putin.”

As Ryan Morgan reports for The Epoch Times, Secretary of State Marco Rubio, on Nov. 22, disputed claims that President Donald Trump’s latest plan to end the fighting in Ukraine amounts to a wish list for Russia.

“The peace proposal was authored by the U.S.,” Rubio wrote in a post on X on Saturday evening.

Rubio added that the proposal incorporated input from both the Russian and Ukrainian sides in the conflict, but his choice of words was careful:

“It is based on input from the Russian side. But it is also based on previous and ongoing input from Ukraine.”

Earlier on Saturday, PBS NewsHour correspondent Nick Schifrin reported that Rubio had made indications to Sens. Mike Rounds (R-S.D.) and Angus King (I-Maine) that a leaked version of the 28-point proposal was not produced by the Trump administration.

“MORE from [King]: ‘The leaked 28-point plan, which, according to [Rubio], is not of the administration’s position–it is essentially the wish list of the Russians,” Schifrin wrote in a post on X on Saturday night.

Even before Rubio responded, State Department deputy spokesman Tommy Pigott said the allegations Schifrin was raising were “blatantly false.”

“As Secretary Rubio and the entire Administration has consistently maintained, this plan was authored by the United States, with input from both the Russians and Ukrainians,” Pigott wrote in an X post.

While the White House has yet to formally release the proposal, The Associated Press and other publications have published draft versions of the 28-point plan.

As we detailed previously, among other items, the published draft points indicated the United States would recognize Crimea, Luhansk, and Donetsk as de facto territories of Russia, and freeze the conflict along the current battle lines in Kherson and Zaporizhzhia, effectively locking in Russian territorial gains throughout the course of the nearly four-year conflict.

The plan also appears to rule out Ukrainian entry into the North Atlantic Treaty Organization (NATO), and NATO will agree not to expand any further, while Russia will agree not to invade any more countries. Further, the plan states Ukraine will receive security guarantees, but will also have to cap the size of its military force.

Zelenskyy celebrated Sunday’s meeting in Geneva and said, “It is good that diplomacy has been reinvigorated and that the conversation can be constructive.”

“The Ukrainian and American teams, as well as the teams of our European partners, are in close contact, and I do hope that there will be a result. The bloodshed must be stopped, and we must ensure that the war is never reignited,” he wrote on social media.

“I am awaiting the results of today’s talks and hope that all participants will be constructive. We all need a positive outcome.”

The Ukrainian president had individually thanked all of Kyiv’s allies present at the meeting in Geneva in various posts on X late Saturday and early on Sunday.

Turkish President Tayyip Erdogan said he would have a phone call with Putin on Monday to discuss efforts to end the war in Ukraine, adding that he would also request the resumption of a deal for safe passage of grains in the Black Sea. Turkey, a NATO member, has kept up cordial relations with both Ukraine and Russia during the nearly four-year-long war, offering military assistance to Ukraine but not joining the West in sanctioning Moscow. Turkey has hosted three rounds of peace negotiations between Moscow and Kyiv in Istanbul and has offered to also host a leaders meeting. During a press conference at the G20 summit in South Africa on Sunday, Erdogan said the 2022 Black Sea grain deal that was negotiated between Turkey and the United Nations could demonstrate a path forward for a peaceful end to the war in Ukraine.

“We were able to succeed in this up to a certain point and it did not continue after. Now, during the discussions we will have tomorrow, I will again ask Mr. Putin about this. I think it would be very beneficial if we can start this process,” he said.

Faced with a Thanksgiving holiday deadline, European officials are racing to buy Ukrainian President Volodymyr Zelenskiy more time with their own counter-proposal.

@DD_Geopolitics has posted the full text of Europe’s 24-point counter-proposal for a “peace plan.”

1. End the war and create arrangements meant to prevent any repeat, establishing a permanent framework for “lasting peace and security.”

2. Both sides commit to a full, unconditional ceasefire — in the air, on land, and at sea.

3. Immediate talks begin on the technical setup for monitoring the ceasefire, with U.S. and European participation.

4. A U.S.-led international monitoring mission is introduced, relying mainly on satellites, drones, and remote tools, with an on-the-ground component to investigate alleged violations.

5. A mechanism is created for filing and investigating ceasefire violations and discussing “corrective measures.”

6. Russia must “unconditionally” return all deported or “illegally displaced” Ukrainian children, under international supervision.

7. Full prisoner exchange under the “all for all” principle. Russia must also release all civilian detainees.

8. After the ceasefire stabilizes, both sides take humanitarian steps, including allowing family visits across the line of contact.

9. Ukraine’s sovereignty is reaffirmed; Ukraine cannot be forced into neutrality.

10. Ukraine receives legally binding security guarantees from the U.S. and others — effectively an Article 5-style arrangement.

11. No restrictions are placed on Ukraine’s armed forces or its defense industry, including foreign military cooperation.

12. Security guarantors form an ad-hoc group of European and willing non-European states. Ukraine decides which foreign forces, weapons, and missions it allows on its territory.

13. Ukraine’s NATO membership depends only on internal Alliance consensus.

14. Ukraine becomes an EU member.

15. Ukraine remains a non-nuclear state under the NPT.

16. Territorial issues are addressed only after a full unconditional ceasefire.

17. Territorial negotiations start from the current line of control.

18. Once agreed, neither Russia nor Ukraine may alter territorial arrangements by force.

19. Ukraine regains control of the Zaporozhye Nuclear Power Plant (with U.S. involvement) and the Kakhovka Dam, under a special transfer mechanism.

20. Ukraine receives unhindered access on the Dnieper River and control of the Kinburn Spit.

21. Ukraine and its partners conduct unrestricted economic cooperation.

22. Ukraine is fully rebuilt and financially compensated — including through frozen Russian sovereign assets, which remain blocked until Russia pays compensation.

23. Sanctions imposed on Russia since 2014 may be partially and gradually eased only after a “sustainable peace,” with automatic snap-back if the deal is violated.

24. Separate talks begin on European security architecture with all OSCE states.

@DD_Geopolitics editorial seemed to sum thinsg up well:

“As delusional as you’d expect from Delulu Land. They still haven’t grasped that the side losing the war isn’t the one that gets to make demands.”

Meanwhile, Zelenskiy is battling a corruption scandal that threatens to engulf his powerful chief of staff, Andriy Yermak. So he’s feeling the heat, too, back home.

Finally, while speaking with reporters earlier in the day, Trump said the current plan doesn’t represent his final offer.

Authored by Jacki Thrapp via The Epoch Times,

A board member who was part of Cracker Barrel’s controversial and short-lived rebrand has resigned.

Multicultural marketing expert Gilbert Dávila stepped down from his seat on the board of directors for Cracker Barrel Old Country Store Inc. on Nov. 20 as shareholders voted to shrink the governing body from 10 to nine directors.

“We thank our shareholders for their strong show of support today, electing 9 of 10 of the Company’s recommended director nominees, including the Company’s CEO, Julie Masino,” according to a statement issued on Nov. 20.

The Tennessee-based company’s 2025 Annual Meeting on Nov. 20 passed “every” proposal submitted to shareholders, including its incentive plan and executive compensation practices.

However, when the plan was made public, it was revealed that Dávila no longer had a seat at the table. Investors criticized Dávila for being part of a rebranding attempt that backfired over the summer, according to a filing with the U.S. Securities and Exchange Commission (SEC).

The board of directors thanked Dávila for being a part of the team since 2020.

“We also thank outgoing independent director, Gilbert Dávila, who has been a valued member of the Board through his five years of service to Cracker Barrel,” the Cracker Barrel board wrote in the Nov. 20 statement.

“Over that time, Gilbert helped oversee the formation of our strategic plan and led our Compensation Committee with skill and dedication. We are grateful for his many contributions.”

The statement did not explain exactly why Dávila is stepping down.

“We are more focused than ever on delivering high-quality food and experiences to our guests while staying true to the heritage that makes Cracker Barrel so special, ensuring we are here to welcome families around our table for generations to come,” the company added.

The Epoch Times has reached out to Dávila for comment.

Dávila’s departure from the company is a partial win for Cracker Barrel investor Sardar Biglari, who criticized the former board member and CEO Julie Felss Masino for what he called a “rebranding and remodeling fiasco.”

The rebranding outraged consumers beginning on Aug. 19 when Cracker Barrel announced it would remove the farmer leaning on a barrel from its logo.

The company’s market capitalization crashed by almost $100 million in 24 hours, prompting it to reverse its announcement and keep the original logo.

“The board has failed in every acquisition and in the opening of new stores, hired the wrong CEO, and approved a ‘Strategic Transformation Plan’ that has not only failed but has subjected the company to market ridicule and set the company back years in terms of its financial and stock price performance,” Biglari alleged in a letter filed with the SEC on Nov. 6.