US Warns Israel That Carriers Can't Stay Indefinitely

 The Pentagon giveth and the Pentagon taketh away. According to Israeli media, the Netanyahu has been put on notice that US warships could soon be ordered home and that they can't stay in eastern Mediterranean waters indefinitely to protect Israel.

Israeli media is reporting Friday that with regards to a potential wider all-out regional war and Iranian attack, a message was sent that tensions need to be reduced at some stage because "the US aircraft carriers will not be able to stay in the area forever."

Currently no less than two air craft carriers — the Theodore Roosevelt and the Abraham Lincoln — along with accompanying warships are in Mideast regional waters. They were deployed there following threats from Iran weeks ago. 

The whole region braced for an Iranian response to the Israeli killing of Hamas leader outside Tehran Ismail Haniyeh on July 31st. The US moved warships closer to Israel in anticipation that the US would help shootdown potential inbound Iranian ballistic missiles and drones.

Apparently the guided-missile submarine Georgia, which can fire cruise missiles and transport Navy SEAL commandos, is also in the region.

Did Iran back off its threat for a major attack? It appears so, or else Tehran is just slow-playing the response, anticipating that the Pentagon will eventually withdraw its naval assets and that a willingness to defend Israel will subside.

All of this comes at a moment of rare US-Israel tensions, especially in the wake of Prime Minister Netanyahu declaring that efforts to achieve a ceasefire deal with Hamas are essentially dead.

"There’s not a deal in the making," he told Fox News. "Unfortunately, it’s not close." He said this during a morning Fox News live interview segment. This flatly contradicted recent White House statements and is somewhat of an embarrassment for the Biden administration.

Meanwhile divisions within the Israeli government and differences over the Gaza end-game have been growing:

Washington has sent a message to Israel that they "oppose the [potential] firing of Defense Minister Yoav Gallant," and said that they are "satisfied with the cooperation" with him, Channel 13 news reports.

The outlet says the message was "polite, but clear."

But even should the US carrier groups be recalled from the region, Washington weapons are still pouring into Israel. Some reports have said that without US arms, Israel would only be able to sustain its Gaza operations for a couple of months.

The conclusion of many analysts is that Biden could pressure Netanyahu enough to force him to strike a truce and hostage exchange deal. Instead Biden has been largely hands-off and Bibi has prioritized the military offensive to eradicate Hamas. 

USNI News Fleet and Marine Tracker as of Sept. 3, 2024

Netanyahu has laid blame on Hamas for there being no deal. He said to Fox this week that the group "don’t agree to anything. Not to the Philadelphi Corridor, not to the keys of exchanging hostages for jailed terrorists, not to anything. So that’s just a false narrative."

Mass Israeli protests in the wake of the recent recovery of six dead hostages have demanded Netanyahu's removal from office. The hostage victims' families also claim he has thwarted a truce deal for the release of the hostages at every turn, instead choosing to prioritize the military operation against Gaza militants.

https://www.zerohedge.com/military/us-warns-israel-carriers-cant-stay-indefinitely

Pa. Radical Leftist Court Delivers Another Win To Election-Meddling Dems

 by Luis Cornelio via HeadlineUSA.com,

A Pennsylvania appeals court ruled that county officials must count the provisional ballots of individuals claiming their mail-in ballots were rejected, expanding an infamous practice known as ballot curing.

The Commonwealth Court overturned a Butler County judge’s ruling that officials did not have to count the provisional ballots of individuals whose naked ballots were rejected, reported the Penn Capital-Star on Thursday.

Naked ballots refer to those submitted without the required secrecy envelope and placed directly into the return envelope. Secrecy envelopes provide a layer of privacy and prevent unauthorized individuals from seeing the voter’s choice. 

Judge Matthew S. Wolf, writing for the majority, claimed that the Butler County Board of Elections lacked the legal basis to reject counting provisional ballots. 

The Pennsylvania Republican Party and Butler County Board of Elections had contended that state election laws, known as the Election Code, prohibited voters from casting provisional ballots if their mail-in ballots were received on time.

The lower court ruled that counting these provisional ballots amounted to ballot curing, allowing voters to fix their ballots even after submission. 

The Republican National Committee and the Pennsylvania GOP argued at the time, “There can be no dispute that the unequivocal law of Pennsylvania is that secrecy envelopes are required, and any mail-in ballot received without a secrecy envelope cannot be counted.” 

The appeals court’s ruling marks yet another blow to election integrity measures ahead of the 2024 presidential election. On Friday, the Commonwealth Court ordered the Democratic strongholds of Philadelphia and Allegheny counties to count mismarked ballots. 

“The refusal to count undated or incorrectly dated but timely mail ballots submitted by otherwise eligible voters because of meaningless and inconsequential paperwork errors violates the fundamental right to vote recognized in the free and equal elections clause,” Judge Ellen Ceisler wrote at the time, according to Spotlight Pa.

Pennsylvania is a must-win state for Vice President Kamala Harris, President Donald Trump’s Democratic opponent.

https://www.zerohedge.com/political/pennsylvanias-radical-leftist-court-delivers-another-win-election-meddling-democrats

Russia Vows New Crackdown On US Media In Response To RT Sanctions

 Following Wednesday's announcement by Attorney General Merrick Garland of new sanctions targeting Russian state media entities, particularly media network RT, which stands charged with conspiring to commit money laundering and violating the Foreign Agents Registration Act, Moscow is promising to hit back against US journalists and media.

Garland had said, "The American people are entitled to know when a foreign power is attempting to exploit our country's free exchange of ideas in order to send around its own propaganda."

But Russia on Friday announced it is imposing new restrictions targeting American media. "A like response is not possible. There is no state news agency in the US, and there is no state TV channel in the U.S." Kremlin spokesman Dmitry Peskov was cited in RIA Novosti news agency as saying. But he said new measures targeting American media will follow.

Moscow has long acknowledged that Washington directly sponsors foreign propaganda channels abroad, such as state-run Voice of America and Radio Free Europe/Radio Liberty (RFE/RL). The latter network up until the 1970s was literally run by the CIA, after which the State Department oversaw it.

These US-funded entities were labeled foreign agents in Russia in 2017, and it was only in 2022 that they were banned from Russia altogether. These are Cold War era US stations which disseminated the American view of events abroad as part of soft power. But Moscow is set to now keep going after private media entities operating in Russia.

As for Friday's fresh announcement, Peskov continued, "But there will certainly be measures here that will restrict their media disseminating their information."

On the US government's new target list for sanctions includes RT editor-in-chief Margarita Simonyan and her deputy Elizaveta Brodskaia.

Earlier this week as part of his trip to Russia's regional ally Mongolia, President Putin told the newspaper Onoodor, "In order to hide from inconvenient facts, from truthful information, the West, which considers itself the standard of freedom, has launched an open persecution against Russian correspondents."

Despite Russia recently adding almost one hundred more journalists and entities to a growing blacklist, including members of The Wall Street Journal and Washington Post,  Putin has said Western reporters who conform to Russian law have nothing to worry about.

"The only requirement for them is compliance with Russian legislation," he said. "Foreign correspondents accredited in our country should understand this," Putin continued, as also cited in US state-run VOA.

https://www.zerohedge.com/geopolitical/russia-vows-crack-down-further-us-media-response-rt-sanctions

Kamala Karnage As Market Goes Haywire

 One month after the Aug 5 Kamala Karry Trade Krash, we got part 2...

... and boy was it an epic flush: everything - like literally everything - and certainly anything with a high beta or even a trace of momentum, imploded with a sheer violence that made Aug 5 look like amateur hour. And unlike Aug 5, the puke was only at the beginning with stocks spiking from the first moment of trading, this time it was the other way around, with stocks pushing higher to start the day before falling apart, and ending a catastrophic week in the worst way possible: on a downtick.

It all started with the August payrolls: as described earlier, the number wasn't terrible: at 142K, it missed the estimate of 165K but rebounded sharply from last month's (downward revised) 89K...

... and the unemployment rate actually dropped...

... as the number of employed workers jumped by the most since March (even if the composition was terrible, consisting entirely of part-time, illegal workers).

Yet, while on the surface the jobs number was strong enough to eliminate the odds of a 50bps rate cut, the market did not take it that way - perhaps as a result of the massive historical revisions - and odds of a 50bps cut in two weeks first spiked, before reversing... only to spike again after Fed gov Waller said he would "advocate" front-loading rate cuts if that is appropriate, wrong-footing markets again, and sending odds of a 50bps cut as high as 65%... before a tweet from the WSJ's Fed leaker Nick Timiraos interpreted the Fed's speech as much more hawkish than it appeared, saying that "Fed governor Chris Waller’s speech doesn’t explicitly say “25” or “50” but it leans into endorsing a 25 bps cut to start, explicitly reserving the option to go faster “as appropriate” if “new data” show more deterioration."

He also said that "Waller pats the Fed on the back for not overreacting to the banking crisis, the lower inflation prints of 2H 23, the higher prints of Q1 24. Then he says, “Based on the evidence I see, I do not believe the economy is in a recession or necessarily headed for one." So after all that, we saw what may have been a rate expectation reversal for the ages, with odds of 2 cuts first jumping from 40% to 60% before reversing back to 40%, only to surge to 65% before finally plunging to 25%, all in the span of a few minutes!

This epic, frenzied activity meant, in which nobody had any idea what is going on, meant Trading in fed funds futures surged to a record Friday. According to Bloomberg, volumes in the second generic fed funds future, typically the most active, reached 900,000 as of 1pm ET, the highest for any contract since their inception in 1988. Trading volume in the October contract surpasses previous record from March 2023, when collapse of Silicon Valley Bank reverberated through financial markets!

And while we don't know for a fact if that's what happened, it seems fair to guess that these unprecedented, wild swings in what is the market's most important pricing indicator, sparked a relentless liquidation across all assets, which hit - in no particular order - stocks...

... oil

... bitcoin

... USDJPY

... and even gold was not immune, and after briefly reaching for new all time highs in the aftermath of the payrolls scare, it then proceeded to slide to session lows.

In fact, the only asset class that showed some semblance of rationality was bonds, where yields first dumped, then spiked, then dumped again, only to close near session highs, perhaps realizing that the faster the Fed cuts, the faster it will spark another inflationary conflagration.

Putting today - and this week's - rout in context, one can argue that it was even worse than the Aug 5 debacle, because while that was just one day of acute pain, by the end of that particular week, stocks had largely rebounded. This time, however, the pain is just getting started, and what started off as an ugly week, ended up much uglier with widespread liquidations...

... and even more remarkably, a non-stop attempt by the 0DTE crowd to kickstart an intraday reversal in the form of a record delta flow divergence from the S&P, ended up achieving absolutely nothing.

And how could it when everyone's favorite high beta momentum stock, NVDA, resumed its plunge and just barely managed to remain above $100, and now down more 30% from its all time high hit all the way back in June...

... and not just NVDA, but the entire Mag 7 sector is now back to levels last seen just after the Aug 5 freakout...

... which may largely be due to charts like this one from Goldman, suggesting that the AI bubble has burst with a bang.

And while it is easy to speculate and assign a narrative to what happened based on prices, it is just as likely that today's - and this week's - price action is precisely what was expected to happen: as the following chart from Goldman makes clear, in presidential election years, stocks peak just before Labor day, before dumping all the way until the election, before blasting off higher once more. Well, you are here!

 https://www.zerohedge.com/markets/kamala-karnage-market-goes-haywire

China detains AstraZeneca workers in data, imports probe

 AstraZeneca has confirmed that some of its current and former employees have been taken into custody in China as part of an investigation into data privacy breaches and the import of unlicensed medicines.

The probe reportedly started earlier this summer and involved around five Chinese nationals who were involved in the marketing of oncology drugs within China, according to a Bloomberg News report.

The suggestion in the report – which cites people familiar with the matter – is that police in the Shenzhen region are looking into the importation of a liver cancer drug that is not approved for distribution in China, as well as the collection of patient data that may have broken Chinese privacy laws.

"We are aware a small number of our employees in China are under investigation and we have no further information to share at this point," said AZ in a statement.

The detentions come against a backdrop of a major crackdown by the Chinese government on corruption in the healthcare sector, that has reportedly led to a number of investigations against public health officials, healthcare professionals, and employees of domestic drugmakers.

Shares in AZ – which in recent weeks became the UK's first £200 billion company – dipped more than 6% yesterday after the news emerged but closed down around 3%.

AZ has a strong presence in China – the largest of any foreign pharma group – with a headquarters and R&D centre in Shanghai and a network of supply sites in Wuxi, Taizhou, and Qingdao, employing around 16,000 people.

China has expanded rapidly in recent years to become the second-largest pharma market globally after the US, driven by a massive ageing population with rising spending power as well as efforts by state and regional governments to speed up access to new therapies – particularly in oncology, where AZ is very strong.

The company recently completed the construction of a new manufacturing site in Qingdao for inhaled medicines and is also increasingly tapping China's biotech industry for new drug candidates with recent deals including a $1.2 billion takeover of cell therapy developer Gracell Technologies.

The country has been a major source of revenue growth for AZ for many years – with sales there reaching $5.9 billion last year, around 13% of group revenues – although there has been a slowdown in growth of late in part as a result of the country's volume-based procurement (VBP) initiative.

The VBP is essentially a bulk-buy scheme for medicine supplied to hospitals, which has been instrumental in driving down prices for many biopharma and medtech companies. AZ thinks that its big-selling Farxiga (dapagliflozin) product for diabetes, heart failure, and chronic kidney disease may be included in the next VBP round in the second half of 2024.

Last year, there were reports that AZ has been considering spinning out its Chinese business and listing it in Hong Kong or Shanghai to insulate it from rising geopolitical tensions over trade sanctions, the status of Taiwan, territorial disputes with the Philippines, and tacit support to Russia in its invasion of Ukraine.

https://pharmaphorum.com/news/china-detains-astrazeneca-workers-data-imports-probe

Kudlow: Trump gave an optimistic, pro-growth, aspirational speech

 Donald Trump gave an optimistic, pro-growth, aspirational speech on the success that could happen in his second term. That is the subject of the riff.  

Speaking to the New York Economic Club, former President Trump delivered an optimistic, pro-growth, aspirational speech, and it amounted to a call for American renewal. That's how I saw it.  

He began with the promise of low taxes, low regulations, low energy costs, lower interest rates, secure borders, low crime and surging incomes for citizens of every race, religion, color and creed. He ended the speech with a promise to "unleash a new era of safety, prosperity and success for our workers, our families, and our businesses, and I've done it before." 

In the middle, he was highly critical of how Kamala Harris and Joe Biden ruined his economic miracle. Take a listen to this:  

TRUMP: "We delivered an economic miracle, which Kamala and Joe turned into an economic disaster, just like they turned the border and indeed the whole world into a catastrophic surrender. Starting on day one, Kamala launched a war on American energy and orchestrated a nation-wrecking border invasion with illegal aliens pouring in from countries all over the world that came in, from countries that nobody ever heard the name of that country, those countries, from their prisons and jails. There is a difference. From mental institutions and insane asylums, as well as record numbers of terrorists, human traffickers and sex traffickers. Numbers that we've never seen before taking place over the last three and a half years. Then Kamala cast the deciding vote on trillions of dollars in wasteful spending, which, together with their terrible energy policies, gave us the worst inflation, perhaps, in the history of our country." 

Tough stuff. Now, he pledged to liberate the economy from crippling regulation and perhaps the biggest applause line came from his mention of Elon Musk and a new efficiency commission. Take a listen to this one: 

TRUMP: "Fourth, at the suggestion of Elon Musk, who has given me his complete and total endorsement - that's a nice, smart guy, he knows what he's doing. He knows what he's doing. It's very, very much appreciated. I will create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms. We need to do it. Can't go on the way we are now and Elon, because he's not very busy, has agreed to head that task force. Be interesting if he has the time. Have a good one to do it, but he's agreed to do it. In 2022, fraud and improper payments alone cost taxpayers an estimated hundreds of billions of dollars. As the first order of business, this commission will develop an action plan to totally eliminate fraud and improper payments within six months. This will save trillions of dollars. Trillions! It's massive. For the same service that you have right now. Trillions of dollars is wasted and gone and nobody knows where it went. Further taming inflation and bringing prices way down." 

By the way, this is all very reminiscent of Ronald Reagan forty-some odd years ago, who appointed famous businessman Peter Grace to the Grace Commission, which combed the federal government for, in those days, hundreds of billions of dollars, which is a big number. He had people from all over the industry, famous CEOs and executives and so forth and so on, and I think this shows Mr. Trump's bona fides as somebody who wants to restrain federal spending and get rid of waste, fraud, abuse, and, as he says, corruption.  

Now, another big applause line came with Mr. Trump's support of cryptocurrencies. Take a listen to this: 

TRUMP: "And instead of attacking industries of the future, we will embrace them, including making America the world capital for crypto and Bitcoin."   

There you have it – crypto and Bitcoin. Then the applause continued when he talked about making the Trump tax cuts permanent and then outlined his Tax Cuts 2.0. Mr. Trump pledged to reduce the corporate tax rate from 21% to 15% for companies that make their products in America.  

He blasted Kamala Harris for her $5 trillion tax hike and how it's going to affect small business, corporations, capital gains, even a wealth tax on unrealized capital gains. He seemed to introduce the concept of "smart tariffs," where you pay a tariff if the product comes in from another country, but you get a 15% tax rate plus 100% bonus depreciation expensing if the product comes from America. He calls this a pro-American trade policy, and he argued that everyone in the world would want to produce here in America. Here's how Mr. Trump described it:

TRUMP: "Smart tariffs will not create inflation, they will combat inflation. I had almost no inflation and I had the highest tariffs that anyone’s seen, and they were going a lot higher. Foreign nations will pay us hundreds of billions of dollars, reducing the deficit and driving inflation down to largely reduce our deficit. In my first term, we imposed historic tariffs with no effect on consumer prices or inflation. A combination of fair trade, tax cuts, regulatory cuts and energy abundance will allow us to produce more goods better and cheaper right here in the USA than we've ever done before, and foreign nations will respect us again." 

Now, during the Q & A, Mr. Trump outlined a very strong America First foreign policy. He wants to win back the respect of the world, not for the purpose of starting new wars, but for peace through strength, including a military buildup. That answer was also received with a lot of applause from the group. Purposefully, Mr. Trump ended his tour de force speech on a very upbeat, optimistic note.  

Here's the vision: inflation conquered, energy unleashed. Economy set free, sovereignty restored. Citizens will thrive. Growth comes roaring back. America's future brighter than ever and, as he has said before, he did it once, and he can do it again.  

https://www.foxbusiness.com/media/larry-kudlow-donald-trump-gave-optimistic-pro-growth-aspirational-speech

China Creates Its Largest Brokerage to Take On Wall Street

 China is combining two of its largest state-backed brokerages to create a new behemoth as it seeks to consolidate the $1.7 trillion sector and build stronger investment banks to compete with overseas financial firms.

Guotai Junan Securities Co. will merge with smaller rival Haitong Securities Co. through a share swap, according to statements from both companies on Thursday. The combination of the firms, both partly owned by Shanghai’s state assets administrator, will create a new entity with assets of 1.6 trillion yuan ($230 billion), topping Citic Securities Co. as the largest brokerage.

The merger is pending approval from the companies’ boards and shareholders, as well as regulatory authorities.

The deal comes a year after President Xi Jinping urged financial regulators to cultivate a few top-ranked investment banks to compete with Wall Street firms expanding in China. Shares of local brokerages surged on Friday morning.

The nation’s securities watchdog has also voiced its support for consolidation, with a goal of having two to three investment banks that can compete globally by 2035. China had about 145 securities firms at the end of 2023, with combined assets of 11.8 trillion yuan, according to official data.

“The combination is conducive to building a first-class investment bank and promoting the high-quality development of the industry,” according to the statements.

Profits Decline

The sector has been hampered by a slump in deals and sluggish capital markets as stocks flounder on weak economic growth. Profits have declined in the past few years, and the outlook for earnings remains bleak after industry heavyweights China International Capital Corp. and Citic Securities posted declines in first-half results.

Haitong, valued at HK$106 billion ($13.6 billion) in Hong Kong, reported a 75% decrease in profit for the first half, while its shares are down 12% on the year.

“The merger will potentially resolve” Haitong’s business concerns, Hua Chuang Securities said in a report. “The overall quality of the underlying assets is not very healthy, which also leads to the low valuation,” it said, adding that the merger may also lead to job cuts with the industry hit by a drought of companies going public.

https://finance.yahoo.com/news/china-merges-two-brokerages-create-153218025.html