A disconcerting environment turned notably more so this week, with market instability becoming more serious. If risk aversion gathers momentum from here, it’s a short step to crisis dynamics. It’s not hyperbole to argue that an outburst of speculative deleveraging could at this critical juncture prove the death knell to a multi-decade super cycle and historic Credit and speculative Bubbles. The market narrative views market weakness as reflecting tariff angst and nervousness ahead of “liberation day.” The unappreciated, yet overarching, issue is one of a looming day of reckoning.
The longer the Trump administration ignores mounting market distress, the clearer it becomes that moving full speed ahead with agenda priorities takes precedence. In short, shock and consternation have begun to set in that the mighty stock market somehow might not be at the epicenter of the White House’s grandiose ambitions.
The Nasdaq100 (NDX) declined 2.4% this week, closing at 19,281, only 56 points, or 0.3%, above the March 13th close. From March 13th lows to this week’s (Tuesday) high, the NDX rallied about 6%, a so far notably unimpressive rally from the previous steep one-month decline (from the 22,223 February 19th high). The Bloomberg MAG7 Index closed the week only slightly above March 11th intraday lows, with the S&P500 ending the week 1.4% off March 13th trading lows. At this critical market juncture, further weakness risks acute instability.
Thursday and Friday’s combined 35 bps spike (to 377 bps) was the largest since August 1st and 2nd. High yield CDS jumped 28 bps this week – to the highest close since August 7th (382bps). This was the largest weekly gain since the bout of global deleveraging during the week of August 2nd. High yield spreads widened 18 bps Friday (23bps wider on the week) to 3.40 percentage points, the largest single-session widening since August 5th – to the high back to August 13th. Investment grade CDS rose two bps this week to 62 bps, the high since December 7, 2023. Bank CDS (JPMorgan, BofA, Goldman, Citi and Morgan Stanley) all closed the week at highs (at least) back to August. Ten-year Treasury yields were down a notable 11 bps in intense Friday safe haven buying, as the implied rate for the December Fed funds rate dropped 10 bps to 3.60% (implying 73 bps of rate reduction).
March 27 – Financial Times (Kaye Wiggins): “Private credit is ‘not a bubble’, Apollo Global Management president Jim Zelter has said, adding that he did not think adverse economic conditions would trigger ‘massive losses’ in a sector that has witnessed rapid growth in recent years. Speaking at HSBC’s investment conference in Hong Kong…, Zelter was asked how private credit would perform in an economic downturn. ‘The biggest question I get from everybody around the globe is, is private credit a bubble?’ said Zelter. ‘And I would say it’s not a bubble, but it’s certainly been long in the tooth in the cycle.’ ‘Bubble means there’s very much irrational actions, and while I think there are folks that are probably taking [a] more aggressive portfolio construction than I would take, I don’t think it’s a bubble where you’re going to find the massive losses that you saw in other bubbles since I’ve been around,’ he added.”
Over the years, I’ve viewed “can’t be a Bubble because of the lack of irrationality” – “very much irrational actions” – as Bubble analysis quackery. I’ve instead argued that Bubbles turn so pernicious specifically because of the perceived rationality of participating. Not joining in – not buying a tech stock in 1999, owning a home in 2006, and “investing” in AI, stocks and crypto in 2024 – seemed the height of irrationality.
Credit is inherently prone to Bubble dynamics. Credit growth is self-reinforcing – with Credit excess begetting Credit excess. Loose conditions, readily available Credit and strong debt growth all promote economic activity, robust corporate earnings and income growth, and strong business and consumer spending.
High risk (“subprime”) Credit is especially prone to excess begetting precarious excess. After all, few businesses offer greater initial “profit” opportunities than lending to a captive audience of risky borrowers amenable to paying exorbitant interest rates. And the more protracted the “subprime” lending boom, the more entrenched Ponzi Dynamics become. So long as conditions remain loose and loans readily available, hopelessly insolvent borrowers stay afloat borrowing from the next greater fool betting on ongoing boom times. But it’s the musical chairs predicament. Years of lending transgressions are waiting to erupt the moment the stupefying music stops and conditions tighten.
Recent years have witnessed history’s greatest subprime lending boom, dwarfing what was quite consequential high risk mortgage finance Bubble excess. “Private Credit” has been right in the thick of it. And whether the industry is beginning to appreciate it or not, that Bubble now has a big bullseye on its back.
Importantly, booms in “Private Credit” and leveraged lending, more generally, have been a prominent beneficiary of the liquidity overabundance originating from “basis trade” and “carry trade” leveraged speculation. Think of a hedge fund borrowing at 50 times leverage in the “repo” market to purchase Treasury bonds, with the sellers then directing sales proceeds into leveraged loans and related ETFs or insurance company annuity products (funding “Private Credit” high yielding consumer and business loans). The overheated high-risk lending boom is today acutely vulnerable to a destabilizing bout of deleveraging, a faltering Bubble Economy, and general instability and uncertainty.
March 28 – Bloomberg (Aaron Weinman and Gowri Gurumurthy): “Chuck E. Cheese owner CEC Entertainment is struggling to drum up enough demand for a $660 million high-yield bond sale to refinance debt it has due next year, according to people familiar… JPMorgan… and Goldman Sachs…, the banks leading the deal, had not obtained sufficient orders from investors… One of the people attributed the difficulties to a broader market rout stemming from concerns about the Trump administration’s tariff policies as well as the US economy… Other transactions in the leveraged finance market that are vulnerable to a dip in consumer spending, including casino operator Mohegan Tribal Gaming Authority, have faced investor pushback lately partly because of concerns about the US economy.”
March 21 – Los Angeles Times (Sandra MacDonald): “Several Southern California cities have the most credit card debt per household in the U.S., a new WalletHub study found. Santa Clarita ranked first out of 181 U.S. cities, with a household average of about $22,753 in credit card debt, and a total of about $1.7 billion in debt for its 228,000 residents, according to data taken from the U.S. Census Bureau and TransUnion… Chula Vista was second, with an average of $20,567 in credit card debt per household, and a total of $1.8 billion among its 275,000 residents.”
Assuming a decent percentage of households choose to carry no expensive Credit card debt, we can infer that many in these areas have accumulated debts in excess of $25,000 to $30,000. In a sign of the times, alarming data were somehow viewed positively: “But being high on the list doesn’t mean that debt is overwhelming the population, [according to] Chip Lupo, a WalletHub writer… In areas like Santa Clarita, the fast-growing suburban community in northern Los Angeles County, where the median household income is $118,489… it’s actually a sign of good credit management, he said. ‘It reflects a greater financial flexibility rather than any type of financial distress,’ Lupo said. ‘As long as interest rates are lower, borrowing costs are managed and as long as you’re paying back the debt.’”
Such high Credit card debt in wealthier communities suggests households have opted to use cash balances to play stocks and crypto, rather than pay down balances. A drop in risk asset prices concurrent with a tightening of Credit conditions will hit hard – borrower and lender. We can assume sinking stocks and stricter Credit limits will trigger a surge in non-performing loans (spurring tighter lending standards).
The U.S. Bubble Economy is today extraordinarily vulnerable to a pullback in spending by higher income households, which would quickly reverberate throughout an economy already susceptible to a tightening of Credit availability for small businesses and over-levered corporations more generally. Tariffs, trade wars, and inflation all significantly heighten systemic risk.
March 27 – Bloomberg (Alexandra Harris): “The Federal Reserve should consider setting up an emergency program that would close out highly leveraged hedge-fund trades in the event of a crisis in the $29 trillion US Treasuries market, according to a panel of financial experts. Any vicious unwinding of a swath of the estimated $1 trillion in hedge fund arbitrage bets would not only hamper the Treasuries market, but others as well — requiring Fed intervention to assure financial stability. When the US central bank did that in March 2020…, it engaged in massive outright purchases of Treasury securities, to the tune of about $1.6 trillion over several weeks… If hedge funds need to unwind their positions quickly, the danger is that bond dealers may not be able to handle the enormous sudden volume of transactions. When the Fed had to intervene in 2020, the basis trade was roughly $500 billion in total — just half today’s figure.”
Speculative leverage quickly became a pressing systemic issue during the March 2020 deleveraging episode. We can assume that speculative leverage has at least doubled in five years.
University of Michigan March (final) consumer one-year inflation expectations were reported at 5%, more than double the 2.2% level from March 2020. Core CPI (y-o-y) registered at 3.1% last month, versus a near Fed target of 2.1% in March 2020. CPI averaged 1.9% annually for the decade preceding March 2020. It has averaged 4.5% over the past four years. Tariffs and trade wars ensure that inflation prospects are highly uncertain and certainly elevated.
With deleveraging risk arguably at the highest level ever, Fed “put” ambiguity is today a critical issue. Nothing suggests the Fed is prepared for another massive balance sheet expansion. They will, of course, come to the market’s defense. But will QE come more slowly and in more limited scope than would be required by a disorderly unwind of “basis trade” and other speculative leverage? Moreover, today’s bond market is in a different state than in 2008 and 2020. Inflation is higher, foreign (including central bank) demand is uncertain, the amount of debt outstanding is much greater, and yields and market apprehension are notably higher (Treasury yields started March 2020 at 1.15%).
I began this CBB with the assertion of “shock and consternation” with the realization that the stock market is not a top Trump priority. How must the levered players feel these days? After all, they assumed they were even ahead of the equities market in the administration’s pecking order. They got their man at the helm of the Department of Treasury, along with billionaires aplenty in cabinet positions and as trusted advisors. With a pro-speculation President, pro-growth tax cuts and deregulation, a faithful Trump “put,” and a Fed with no alternative than to backstop vulnerable Bubble markets, of course you remain highly levered.
They’ve been making so much money, effortlessly. Playing loosely with the house’s money and caught up (along with everyone else) in post-election euphoria, the levered players pressed their big bets. These increasingly look like bad bets. They misjudged Donald Trump. They heard low taxes and pro-growth, while dismissing much of the administration’s radical far right agenda and penchant for breaking things. I can imagine the chuckles: “Ha. Can’t take him literally.” Time to. “That’s so crazy, of course he’d never do it.” He’s doing it. They’re all going to do it – full speed ahead. They need to move quickly. Flood the zone. No let ups – never turn back (see pertinent comparison to Viktor Orban under “For Posterity”). For the leveraged speculating community, this has all the makings of a rather destabilizing “HOLY CRAP” moment.
It would be nice to have a week, in my son’s verbiage, “to chill.” This was not it. “Trump says US will ‘go as far as we have to’ to get control of Greenland.” “Vance Uses Greenland Visit to Slam Denmark, Vow U.S. Takeover of Island.” “Putin’s endorsement of Trump’s Greenland takeover reflects their vision of a new world order.” “US defense chief Hegseth vows to counter ‘China’s aggression’ on first Asia visit.” “Hegseth Tells Asian Allies: We’re With You Against China.” “Hegseth Announces US Missile Plan Likely to Inflame China Tensions.” “Now Europe Knows What Trump’s Team Calls It Behind Its Back: ‘Pathetic’.” “Europe fumes at Trump team’s insults in leaked Signal chat.” “Putin Calls for Zelensky’s Removal, ‘Finish Off’ Ukrainian Troops.” “Trump threatens Iran with ‘bad things’ unless it accepts nuclear deal.”
March 26 – Bloomberg (Jordan Fabian): “President Donald Trump stressed his desire for the US to annex Greenland ahead of a contentious visit by his vice president, comments likely to further stoke anger in the Danish territory. Trump said… the mission of Vice President JD Vance and others on his team would be ‘to let them know that we need Greenland for international safety and security.’ ‘It’s an island that from a defensive posture, and even offensive posture, is something we need, especially with the world the way it is, and we’re going to have to have it,’ the president said during an interview with conservative talk show host Vince Coglianese. The remarks are Trump’s clearest statements yet about the intent of a flurry of visits from his orbit since he won the 2024 presidential election.”
President Trump (March 27, 2025): “So we’ll, I think, we’ll go as far as we have to go. We need Greenland. And the world needs us to have Greenland, including Denmark. Denmark has to have us have Greenland. And, you know, we’ll see what happens. But if we don’t have Greenland, we can’t have great international security.”
President Trump (March 28, 2025): “We need Greenland, very importantly for national security. We have to have Greenland. It’s not a question of, ‘Do you think we can do without it?’ We can’t… Greenland’s very important for the peace of the world. And I think Denmark understands, and I think the European Union understands it. And if they don’t, we’re going to have to explain it to them.”
March 28 – Daily Mail (Geoff Earle): “Defense Secretary Pete flexed his muscles in a workout with U.S. troops in the Philippines as he identified China as a threat and called for deterrence. ‘There’s a long line of countries in the past who have attempted to test U.S. resolve… We are resolved at this time… to work with our partners.’ ‘Deterrence is necessary around the world, but specifically in this region, in your country, considering the threats from the communist Chinese,’ he said. Hegseth… called for joining with allies to counter Chinese expansionist threats… ‘What we’re dealing with right now is many years of deferred maintenance, of weakness, that we need to reestablish strength and deterrence in multiple places around the globe,’ Hegseth said in response to a question about whether the U.S. would place a more visible presence in the South China Sea.”
Hegseth: “What the Trump administration will do is deliver – is to truly prioritize and shift to this region [Asia] of the world in a way that is unprecedented.”
March 28 – Associated Press (Jim Gomez): “U.S. Defense Secretary Pete Hegseth said… the Trump administration would work with allies to ramp up deterrence against threats across the world, including China’s aggression in the South China Sea. Hegseth… blamed the previous Biden administration for insufficient actions that emboldened aggressors like China over the years. He said the U.S. military was being rebuilt under President Donald Trump and was re-establishing its ‘warrior ethos’ in the region… Hegseth told a news conference with his Philippine counterpart, Gilberto Teodoro, after meeting President Ferdinand Marcos Jr…”
I’ll share excerpts from two additional news stories of intrigue.
March 27 – Axios (Hans Nichols): “President Trump’s dramatic rug pull of Rep. Elise Stefanik’s (R-N.Y.) UN ambassador nomination has given House Speaker Mike Johnson (R-La.) a new series of headaches. Why it matters: Johnson has to reassure GOP lawmakers after their president said he’s nervous about a Trump +20 district.”
March 27 – Axios (Marc Caputo and Neil Irwin): “The Trump administration is discussing a surprising option to help fulfill his campaign-trail promises: Allowing the richest Americans’ tax rates to rise in return for cutting taxes on tips, a senior White House official tells Axios. The big picture: Some White House officials believe letting income taxes on the very highest earners rise would buy breathing room on other priorities, and help blunt Democrats’ attacks as they seek to extend President Trump’s 2017 tax cuts.”
Sudden concern for Elise Stefanik’s red district seat and potentially shocking volte-face consideration of higher taxes on the rich? Is the administration sensing trouble brewing – the type of market and economic instability that would place even Stefanik’s district at risk? Trouble that would force a focus on buttressing the MAGA base at the expense of high-income taxpayers? We should all prepare for difficult times ahead.
For Posterity:
March 21 – Globe & Mail (Doug Saunders): “To many eyes, the first two months of the second Trump administration have delivered an unpredictable and unprecedented series of assaults on the judiciary, the public service, the media, universities, cities, fundamental freedoms and international alliances, all couched in an implausible online conspiracy-theory language of immigrant invaders, gender threats and menacing globalists. But that all looks eerily familiar to Hungarians. For them, this has been a fast-motion repeat of what they’ve experienced in the past 14 years under Prime Minister Viktor Orban, a similarly personality-driven leader of the extreme right – down to specific policies and to phrases Donald Trump and his administration have used to describe imagined enemies. In fact, the difference between Mr. Trump’s alarming but largely chaotic first term and his highly programmed and plot-driven second appears to be partly due to the example of Mr. Orban, who met with the Trump team multiple times over the last four years, hosting their signature Conservative Political Action Conference in 2022 and becoming the only foreign leader Mr. Trump regularly cited approvingly during his election campaign. ‘While no one could have imagined the exact pace and nature of what Trump is doing, I could have told you that it would be very quick,’ said Zsuzsanna Szelényi, a former Hungarian member of parliament. ‘This psychological element of taking power and doing everything at this overwhelming pace, this is part of the Orban game – he showed that you can go very far in changing the environment if you do it very quickly so that your critics or adversaries are basically paralyzed. That is something the Americans seem to have learned from him’… Her book Tainted Democracy: Viktor Orban and the Subversion of Hungary is a detailed chronicle of the Orban method, and outlines several tactics Mr. Trump appears to have picked up for his second term. One is the manipulation of the courts and the Constitution. Mr. Orban learned to ignore court rulings… Mr. Orban has had a parliamentary two-thirds supermajority for most of his decade-plus in power, allowing him to repeatedly rewrite Hungary’s constitution… Another example is Mr. Orban’s success in shutting down, taking over or banishing any media and educational institutions he has perceived as critical of his rule. He has used legal and financial pressure to remove owners from major media outlets…”
Journalist question (March 27, 2025): “In terms of the Signals chat controversy that’s going on, is DOJ (Department of Justice) involved at this point? If so, why, if not, why not?”
Attorney General Pam Bondi: “First, it was sensitive information, not classified – and inadvertently released. And what we should be talking about is that it was a very successful mission. Our world is now safer because of that mission. We’re not going to comment any further on that. If you want to talk about classified information, talk about what was at Hillary Clinton’s home that she was trying to bleach. Talk about classified documents in Joe Biden’s garage that Hunter Biden had access to. This was not classified information.”
Attorney General Pam Bondi (FoxNews, March 27, 2025): “Many judges need to be removed – Judge [Beryl] Howell included – Judge [Ana] Rayes, Judge [James] Boasberg. These judges obviously cannot be impartial. They cannot be objective. They are district judges trying to control our entire country – our entire country. And they’re trying to obstruct Donald Trump’s agenda.”
For the Week:
The S&P500 fell 1.5% (down 5.1% y-t-d), and the Dow lost 1.0% (down 2.3%). The Utilities were unchanged (up 5.4%). The Banks dropped 1.9% (down 5.1%), and the Broker/Dealers slumped 2.3% (up 0.9%). The Transports were little changed (down 8.2%). The S&P 400 Midcaps fell 1.0% (down 6.6%), and the small cap Russell 2000 declined 1.6% (down 9.3%). The Nasdaq100 slumped 2.4% (down 8.2%). The Semiconductors sank 6.0% (down 14.0%). The Biotechs fell 2.0% (down 0.6%). With bullion jumping $63, the HUI gold index rose 2.0% (up 30.4%).
Three-month Treasury bill rates ended the week at 4.19%. Two-year government yields declined four bps to 3.91% (down 33bps y-t-d). Five-year T-note yields slipped two bps to 3.98% (down 40bps). Ten-year Treasury yields were unchanged at 4.25% (down 32bps). Long bond yields increased four bps to 4.63% (down 15bps). Benchmark Fannie Mae MBS yields added two bps to 5.53% (down 32bps).
Italian 10-year yields dipped three bps to 3.85% (up 33bps y-t-d). Greek 10-year yields declined three bps to 3.55% (up 33bps). Spain’s 10-year yields fell five bps to 3.36% (down 30bps). German bund yields declined four bps to 2.73% (up 36bps). French yields dipped three bps to 3.43% (up 24bps). The French to German 10-year bond spread was little changed at 70 bps. U.K. 10-year gilt yields slipped two bps to 4.69% (up 13bps). U.K.’s FTSE equities index was little changed (up 5.9% y-t-d).
Japan’s Nikkei 225 Equities Index declined 1.5% (down 7.0% y-t-d). Japanese 10-year “JGB” yields added two bps to 1.54% (up 44bps y-t-d). France’s CAC40 lost 1.6% (up 7.3%). The German DAX equities index slumped 1.9% (up 12.8%). Spain’s IBEX 35 equities index slipped 0.3% (up 14.8%). Italy’s FTSE MIB index declined 0.8% (up 13.3%). EM equities were mostly lower. Brazil’s Bovespa index dipped 0.3% (up 9.7%), while Mexico’s Bolsa index gained 1.0% (up 7.4%). South Korea’s Kospi sank 3.2% (up 6.6%). India’s Sensex equities index increased 0.7% (down 1.4%). China’s Shanghai Exchange Index declined 0.4% (unchanged). Turkey’s Borsa Istanbul National 100 index rallied 6.8% (down 1.7%).
Federal Reserve Credit declined $8.7 billion last week to $6.704 TN. Fed Credit was down $2.197 TN from the June 22, 2022, peak. Over the past 289 weeks, Fed Credit expanded $2.977 TN, or 80%. Fed Credit inflated $3.893 TN, or 138%, over the past 646 weeks. Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt declined $7.1 billion last week to $3.297 TN. “Custody holdings” were down $44 billion y-o-y, or 1.3%.
Total money market fund assets increased $11.8 billion to $7.014 TN. Money funds were up $880 billion over 35 weeks (21.3% annualized) and $968 billion y-o-y (16%).
Total Commercial Paper gained $7.2 billion to $1.392 TN – the high back to 2009. CP has increased $304 billion y-t-d and $42 billion, or 3.1%, y-o-y.
Freddie Mac 30-year fixed mortgage rates slipped two bps this week to 6.65% (down 14bps y-o-y). Fifteen-year rates rose six bps to 5.89% (down 22bps). Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates down three bps to 6.79% (down 52bps).
Currency Watch:
March 25 – Financial Times (Joseph Cotterill and A. Anantha Lakshmi): “Indonesia’s rupiah fell to its weakest level against the US dollar since the Asian financial crisis of 1998 over mounting fears about the policies of President Prabowo Subianto and their impact on the fiscal position of south-east Asia’s largest economy… Bank Indonesia, the country’s central bank, told the Financial Times that it had intervened in bond and currency markets on Tuesday ‘to ensure the stability of the rupiah exchange rate and maintain the balance of foreign exchange demand and supply, thereby maintaining market confidence’.”
For the week, the U.S. Dollar Index was little changed at 104.044 (down 4.1% y-t-d). For the week on the upside, the Swedish krona increased 1.3%, the Norwegian krone 0.7%, the Canadian dollar 0.3%, the Swiss franc 0.2%, the Australian dollar 0.2%, the British pound 0.2%, and the euro 0.1%. On the downside, the South African rand declined 1.1%, the Mexican peso 0.7%, the Brazilian real 0.6%, the Singapore dollar 0.4%, the Japanese yen 0.4%, the New Zealand dollar 0.3%, and the South Korean won 0.3%. The Chinese (onshore) renminbi declined 0.14% versus the dollar (up 0.51% y-t-d).
Commodities Watch:
The Bloomberg Commodities Index added 0.5% (up 7.1% y-t-d). Spot Gold jumped another 2.1% to $3,085 (up 17.6%). Silver surged 3.3% to $34.1255 (up 18.1%). WTI crude gained $1.08, or 1.6%, to $69.36 (down 3%). Gasoline rose 1.8% (up 10%), and Natural Gas added 2.1% to $4.065 (up 13%). Copper increased 0.3% (up 27%). Wheat dropped 5.4% (down 4%), and Corn fell 2.4% (down 1%). Bitcoin declined $220, or 0.3%, to $84,000 (down 10.4%).
Trump Administration Watch:
March 25 – Bloomberg (Kate Sullivan): “President Donald Trump said he plans to limit exceptions to his tariff push, the latest cryptic hint about a planned April 2 announcement of reciprocal duties on global trading partners. US trading partners have raced to secure carveouts ahead from the levies Trump has placed at the center of his economic agenda, but the president indicated that they would be tough to secure. ‘I know there are some exceptions, and it’s an ongoing discussion, but not too many, not too many exceptions,’ Trump said… ‘No, I don’t want to have too many exceptions.’”
March 27 – Wall Street Journal (Michael R. Gordon, Nancy A. Youssef and Lindsay Wise): “Defense Secretary Pete Hegseth came under increasing scrutiny after more details emerged… showing that he posted plans of an imminent military strike against Houthi militants, including the timing and weapon systems, on an unclassified group chat used by senior administration officials. Several Democrats called for his resignation… And the chairman and ranking member of the Senate Armed Services Committee sent a letter Wednesday requesting the Pentagon inspector general to investigate the chat… ‘The information as published recently appears to me to be of such a sensitive nature that based on my knowledge, I would have wanted it classified,’ Sen. Roger Wicker (R., Miss.), who chairs the committee told reporters. ‘If mistakes were made…they should be acknowledged.’”
March 26 – Bloomberg (Jordan Fabian): “President Donald Trump stressed his desire for the US to annex Greenland ahead of a contentious visit by his vice president, comments likely to further stoke anger in the Danish territory. Trump said… that the mission of Vice President JD Vance and others on his team would be ‘to let them know that we need Greenland for international safety and security.’ ‘It’s an island that from a defensive posture, and even offensive posture, is something we need, especially with the world the way it is, and we’re going to have to have it,’ the president said during an interview with conservative talk show host Vince Coglianese… Trump said whether Greenlanders wished to become Americans or not was of secondary concern to him. ‘I don’t know. I don’t think they’re un-eager, but I think that we have to do it, and we have to convince them,’ he said.”
March 27 – ABC News (David Brennan): “President Donald Trump said the U.S. will ‘go as far as we have to go’ to get control of Greenland, ahead of a planned visit to the Arctic island by Vice President JD Vance that has prompted criticism from Greenland and Denmark… Trump showed no indication of softening his ambition to take control of the island, which is an autonomous territory but part of the Kingdom of Denmark. ‘We need Greenland for national security and international security,’ Trump said…”
March 26 – Wall Street Journal (Sune Engel Rasmussen, Natalie Andrews and Vera Bergengruen): “A planned visit to Greenland this week to be led by second lady Usha Vance was originally presented as a feel-good event to celebrate Greenlandic culture. Instead, it is stirring anger and anxiety—and testing already strained relations between the U.S. and European allies. And that was before Vice President JD Vance announced that he would be joining his wife on the trip… Greenland has denounced the visit by the delegation, which the White House said Sunday would include national security adviser Michael Waltz and Secretary of Energy Chris Wright, as a ‘highly aggressive’ move.”
March 25 – Politico (Csongor Koromi): “Denmark’s Prime Minister Mette Frederiksen lashed out at President Donald Trump’s U.S. administration for putting ‘unacceptable pressure’ on Greenland, as she slammed the upcoming visit to the Danish territory by U.S. Second Lady Usha Vance. ‘This is clearly not a visit that is about what Greenland needs or wants,’ Frederiksen said, about the scheduled trip involving Vice President JD Vance’s wife… ‘Therefore, I have to say that it is unacceptable pressure being put on Greenland and Denmark in this situation. And it’s a pressure we will stand against,’ the prime minister added.”
March 25 – Bloomberg (Kate Sullivan): “President Donald Trump said he is in favor of defunding National Public Radio and the Public Broadcasting Service, casting the outlets as unfavorable to him and a drain on taxpayer money. ‘I would love to do that,’ Trump said…, suggesting that there was no longer a need for the public broadcasters. ‘There’s plenty of coverage. It was from a different age, and they spend more money than any other network of its type ever conceived,’ he said. ‘So the kind of money that’s being wasted, and it’s a very biased view.’”
March 27 – Bloomberg (Jennifer A Dlouhy and Derek Wallbank): “President Donald Trump signed a proclamation directing the Smithsonian Institution to remove references to ‘improper ideology’ from its programs and exhibitions, the latest effort from the White House to crack down on teachings regarding race and gender. The proclamation, which Trump signed on Thursday, called for the Smithsonian — a network of museums and research centers that is not formally part of the federal government — to remove ‘ideological indoctrination or divisive narratives that distort our shared history.’”
March 25 – Bloomberg (Iain Marlow and Philip Heijmans): “The US canceled two aid projects in Cambodia in late February — one to encourage child literacy and another to improve nutrition and development for kids under five. A week later, China’s aid agency announced funding for programs to achieve almost identical goals. ‘Children are the future of the country and the nation,’ China’s ambassador to Cambodia Wang Wenbin said…, standing next to the country’s health minister and a UNICEF official. ‘We should care for the healthy growth of children together.’”
March 24 – Wall Street Journal (Allison Pohle): “Canadians have long been the top international travelers to the U.S. Now, they are staying home. After President Trump said he would impose tariffs on Canada, then-Prime Minister Justin Trudeau encouraged Canadians to change their vacation plans to focus on exploring sites within the country. It worked. Canadian residents returned from 13% fewer trips by air to the U.S. in February than they did a year ago… Land-border crossings fell… Canadian-resident return trips from the U.S. dropped 23% from a year earlier. More than the tariff threats, Canadians say Trump’s threats of annexation have infuriated and scared them…”
March 23 – Reuters (Joanna Plucinska, Doyinsola Oladipo and Ilona Wissenbach): “Danish traveller Kennet Brask loved his fishing trip to Florida two years ago and was planning to return this year. But after watching U.S. President Donald Trump’s explosive meeting with Volodymyr Zelenskiy in the White House, he called it off. ‘When I saw this meeting, I told myself, ‘I’m never going to go to the United States as long as Mr. Trump is the President there,’ Brask told Reuters… Instead, he will head to Mexico. Brask is one of a number of Danes, Germans and more broadly Europeans who are reconsidering travel plans as a result of Trump’s actions, according to five travel agents across the continent.”
Constitution Watch:
March 22 – New York Times (Editorial Board): “The Domino’s pizzas arrived at the homes of federal judges without explanation. The message was clear: We know where you live. The mysterious pizza deliveries are happening at the same time that President Trump, his aides and their allies have started an intimidation campaign against the legal system — through executive orders, social media posts, public comments and even articles of impeachment. The evident goal is to spread anxiety and fear among judges and keep them from fulfilling their constitutional duty to insist that the Trump administration follow the law. The campaign extends to private-sector lawyers, with Mr. Trump trying to damage the business of several firms he does not like. The scope of these tactics can sometimes get lost amid the pace of news, and we want to pause to connect the dots and explain the seriousness of what’s happening. We also want to honor the people who are taking a public stand against this campaign, including Chief Justice John Roberts, and urge more lawyers to do so in the days ahead. Every time a judge or lawyer steps forward, it becomes easier for others to speak out and harder for Mr. Trump to isolate any one person standing up for the law. He is straining the American system of checks and balances in ways it has not been tested in many decades. The most effective way to protect that system starts with courage from more people who believe in it.”
March 24 – Associated Press (Michael Kunzelman and Lindsay Whitehurst): “The Trump administration… invoked a ‘state secrets privilege’ and refused to give a federal judge any additional information about the deportation of Venezuelan migrants to El Salvador under an 18th century wartime law — a case that has become a flashpoint amid escalating tension with the federal courts. The declaration comes as U.S. District Judge James Boasberg weighs whether the government defied his order to turn around planes carrying migrants after he blocked deportations of people alleged to be gang members without due process… Government attorneys also asked an appeals court on Monday to lift Boasberg’s order and allow deportations to continue… Circuit Court Judge Patricia Millett said Nazis detained in the U.S. during World World II received better legal treatment than Venezuelan immigrants who were were deported to El Salvador this month under the same statute.”
March 24 – Bloomberg (Barbara McQuade): “President Donald Trump’s retribution tour made its latest stop late Friday with a new threat to the legal profession. Trump issued a memorandum directing Attorney General Pam Bondi and Secretary of Homeland Security Kristi Noem to prioritize the enforcement of regulations governing attorney conduct and discipline. The memo further instructs Bondi to seek sanctions against attorneys who engage in ‘frivolous litigation’ against the US ‘or in matters before executive departments and agencies of the United States.’ The attorney general also is to refer for disciplinary action lawyers who violate rules of professional conduct. Those directives alone do no more than recite the status quo.”
March 24 – Financial Times (James Fontanella-Khan, Amelia Pollard, Joe Miller and Sujeet Indap): “America’s most powerful law firms are racing to safeguard their businesses from Donald Trump’s wrath, after attempts to rally the industry and fight in unison were undermined by the surrender of Paul Weiss. Firm leaders scrambled on Monday to reassure major clients that the White House’s animosity would not impair their ability to represent them effectively. Legal practices of all sizes were ‘scared to death’ of being next in line, said one senior lawyer… ‘Everybody has to engage an outside counsel for that, and everybody has to come up with a PR statement on it,’ said a top Wall Street lawyer. ‘It’s an anxiety that’s real’. Over the past few weeks, Trump has issued executive orders targeting law firms Perkins Coie and Paul Weiss as well as a directive against Washington-based Covington & Burling.”
March 25 – Financial Times (Stefania Palma and Amelia Pollard): “Donald Trump signed an executive order targeting Jenner & Block, a law firm with ties to a former prosecutor who investigated allegations of collusion between Russia and his first presidential campaign, in the government’s latest broadside against the legal industry. The White House… said Jenner & Block was ‘yet another law firm that has abandoned the profession’s highest ideals’ and had ‘condoned partisan ‘lawfare’.’ The order said Andrew Weissmann, a former partner of the firm, engaged in ‘partisan prosecution as part of Robert Mueller’s entirely unjustified investigation’.”
March 23 – Associated Press (David Bauder): “During the first Trump administration, the biggest concern for many journalists was labels. Would they, or their news outlet, be called ‘fake news’ or an ‘enemy of the people’ by a president and his supporters? They now face a more assertive President Donald Trump. In two months, a blitz of action by the nation’s new administration — Trump, chapter two — has journalists on their heels. Lawsuits. A newly aggressive Federal Communications Commission. An effort to control the press corps that covers the president, prompting legal action by The Associated Press. A gutted Voice of America. Public data stripped from websites. And attacks, amplified anew. ‘It’s very clear what’s happening. The Trump administration is on a campaign to do everything it can to diminish and obstruct journalism in the United States,’ said Bill Grueskin, a journalism professor at Columbia University. ‘It’s really nothing like we saw in 2017,’ he said. ‘Not that there weren’t efforts to discredit the press, and not that there weren’t things that the press did to discredit themselves.’”
March 27 – CNN (Gloria Pazmino and Andy Rose): “As the sun began to set Tuesday over Somerville, Massachusetts, Turkish national Rumeysa Ozturk was on her way to meet friends at an Iftar dinner where they would break their Ramadan fast. But she would never make it to the gathering… Instead, the 30-year-old was arrested and physically restrained by immigration officers near her apartment, close to Tufts University’s Somerville campus where she was a PhD student… Six plainclothes officers surrounded Ozturk as she walked alone… The officers did not show their badges until she was restrained, the video shows… Ozturk was enrolled in a PhD program at Tufts University on a valid F-1 visa… In March 2024, Ozturk cowrote an op-ed in the school’s newspaper in which she criticized Tufts’ response to a student government group’s call for the university to divest from companies with ties to Israel because of the conflict in Gaza, among other demands.”
March 27 – Bloomberg (Courtney McBride): “Secretary of State Marco Rubio defended the Trump administration’s push to expel foreign citizens who have protested against Israel, saying the US may have revoked more than 300 visas so far. ‘Every country in the world has a right to decide who comes in and who doesn’t,’ Rubio said… ‘We’re looking every day for these lunatics that are tearing things up’… Rubio was asked to confirm reports that he may have revoked some 300 visas so far. ‘Maybe more — it might be more than 300 at this point,’ Rubio said. ‘Every time I find one of these lunatics, I take away their visa.’”
Trade War Watch:
March 24 – Wall Street Journal (Jason Douglas and Tom Fairless): “Barriers to open trade are rising across the world at a pace unseen in decades, a cascade of protectionism that harks back to the isolationist fervor that swept the globe in the 1930s and worsened the Great Depression. It isn’t just President Trump’s extensive new tariffs, which have set off a barrage of retaliatory measures across Europe, China and Canada targeting hundreds of U.S. goods. Even before Trump retook the White House, many countries were increasing trade barriers, often against China, as they tried to beat back a flood of electric cars, steel and other manufactured goods pressuring their homegrown industries. Now those efforts are proliferating as countries brace for a new wave of goods redirected across the globe by the U.S.’s rising tariff shield.”
March 26 – Financial Times (Aime Williams, Andy Bounds and Richard Milne): “The EU’s top trade negotiator expects Donald Trump to hit the bloc with tariffs of about 20% next week as the US president takes aggressive steps to cut trade deficits. Maroš Šefčovič, the EU trade commissioner, told officials that Washington’s final plan was still unclear but that tariffs would apply equally to all 27 member states after meeting senior administration figures…”
March 21 – Reuters (Bart Meijer): “The European Union is preparing its response to the new import tariffs on imported vehicles announced by U.S. President Donald Trump, the European Commission said… ‘We have this announcement on cars. Next week we understand that a new suite of measures from the U.S., what they’re calling their reciprocal tariffs, will come into force. We regret all of these, but we are preparing for all of these,’ Commission spokesman Olof Gill told reporters. ‘I can’t tell you exact timings for when our potential response to these still not implemented actions will come, but I can assure you that it will be timely, that it will be robust, that it will be well calibrated and that it will achieve the intended impact’, he added.”
March 27 – New York Times (Liz Alderman): “President Trump’s sweeping tariffs on automobiles drew a sharp reaction… from leaders in Germany and France, who called on the European Union to hit back firmly against measures that they said would harm the United States and Europe, and global trade as a whole… France would work with the European Commission on a ‘riposte,’ [Macron] added, the goal of which would be ‘to find an accord to dismantle the tariffs’ and getting the U.S. president to ‘reconsider.’ In Germany, whose auto industry is a huge exporter to the United States and faces a blow, the economy minister, Robert Habeck, said it was ‘crucial that the E.U. delivers a decisive response to the tariffs,’ adding: ‘It must be clear that we will not back down.’”
March 27 – New York Times (River Akira Davis, Emiliano Rodríguez Mega and Ian Austen): “Mexico deployed thousands of National Guard troops to the border to deter migrants from reaching the United States. South Korea said it would invest $21 billion in expanding U.S. manufacturing. Japanese officials descended on Washington, offering to invest $1 trillion in the United States and buy more American natural gas. None of that was enough to prevent one of those countries’ biggest tariff concerns from becoming a reality on Wednesday, when President Trump declared that automobiles and car parts imported to the United States would face a 25% tariff starting on April 3. Mexico, Japan and South Korea, along with Canada, account for about 75% of U.S. vehicle imports.”
March 25 – Financial Times (Cheng Leng, Zijing Wu and Michael Acton): “Beijing has introduced energy efficiency rules for the use of advanced chips that would prevent Chinese companies from buying Nvidia’s best-selling processors in the country if implemented strictly. The National Development and Reform Commission, China’s top economic planner, is advising Chinese groups to use chips that meet stringent requirements in new data centres and expansion of existing facilities, according to documents… Nvidia’s H20 chip… currently fails to satisfy the commission’s new rules…”
March 23 – Bloomberg: “An American senator said China must halt the flow of fentanyl ingredients into the US before any trade negotiations, a demand that clouds the prospect of imminent leaders’ talks to ease tensions between the world’s two largest economies. Steve Daines, a close ally of President Donald Trump, laid out the condition in meetings with Chinese officials in Beijing over the weekend. The Republican lawmaker said he hopes a leadership meeting will take place before the end of the year… ‘It’ll be difficult to have any conversation about tariffs and non-tariff barriers until the fentanyl precursor issue is resolved,’ Daines said…”
Budget Watch:
March 25 – Bloomberg (Erik Wasson, Billy House and Daniel Flatley): “Republican leaders say they are getting close to agreeing on a plan to pass an extension of President Donald Trump’s 2017 tax cuts and an increase to the debt ceiling, as Congress looks to approve an economic package by the end of May. ‘I don’t want to get out in front of what the Senate is going to do. But it sounds like we will not be far apart, and that’s a good thing, so we’ll be able to move,’ House Speaker Mike Johnson told reporters… Johnson said the Senate was ‘coming around’ to supporting a debt ceiling increase as part of the legislation. Senate Majority Leader John Thune said he believes ‘there’s consensus forming around’ the debt ceiling plan, an issue that had been a key sticking point between the two chambers for weeks.”
March 26 – Associated Press (Fatima Hussein and Kevin Freking): “The United States is on track to hit its statutory debt ceiling — the so-called X-date when the country runs short of money to pay its bills— as early as August without a deal between lawmakers and the White House, according to a Congressional Budget Office report… By that time, the government would no longer have enough of a financial cushion to pay all its bills after exhausting its ‘extraordinary measures’ the accounting maneuvers used to stretch existing funds. Washington would risk defaulting on its debt unless Congress and Republican President Donald Trump agree to lift the borrowing limit or abolish the debt ceiling concept altogether… ‘The Treasury has already reached the current debt limit of $36.1 trillion, so it has no room to borrow under its standard operating procedures,’ according to the CBO report.”
March 27 – Reuters (Richard Cowan): “The U.S. Congressional Budget Office… projected significant increases in federal budget deficits and debt over the next 30 years, in part due to rapidly rising interest costs… The CBO’s latest long-term budget projections show federal deficits accelerating to 7.3% of the economy in fiscal year 2055 from 6.2% in 2025. That is up from the 30-year average from 1995 to 2024 of 3.9%. The U.S. public debt meanwhile is seen rising alarmingly, to 156% of GDP in 2055 from 100% in 2025… Of particular note, government interest payments on its ballooning debt were projected at 5.4% of GDP in fiscal year 2055, up from the anticipated 3.2% in the current fiscal year that ends on September 30.”
Canada Friend and Ally Watch:
March 27 – Financial Times (Ilya Gridneff): “Prime Minister Mark Carney said… Canada’s old relationship with the US was ‘over’ and vowed that there would be a ‘broad renegotiation’ of the trade agreement between the countries. Speaking in Ottawa after meeting the nation’s provincial premiers, Carney said the tariffs imposed by US President Donald Trump would force Canada to rethink and reshape its economy and seek ‘reliable’ trading partners. ‘The old relationship we had with the United States, based on deepening integration of our economies and tight security and military co-operations, is over,’ he told reporters. ‘The time will come for a broad renegotiation of our security and trade relationship.’”
March 23 – Wall Street Journal (Ilya Gridneff): “Prime Minister Mark Carney… announced a national election would be held on April 28 as Canada faced ‘the most significant crisis of our lifetime’ caused by US President Donald Trump. Carney called the poll a fortnight after replacing Justin Trudeau as head of Canada’s Liberal party and two months since stepping into the leadership race. Carney, a former Bank of Canada and Bank of England central bank governor, pledged a ‘middle class tax cut’, a national dental plan and called for unity in a time of crisis.”
March 25 – Axios (Rebecca Falconer): “Canada has updated its travel advisory for the U.S. following the Trump administration’s immigration crackdown. The update on a registration rule for visitors to the U.S. comes after several European nations changed their advisories in response to Trump administration rollbacks on transgender rights and as Canadians and other foreign nationals have been detained by U.S. immigration authorities over travel visa issues. The new interim rule — set to take effect April 11 — requires Canadians staying in the U.S. for longer than 30 days to register with the U.S. government. It comes amid a Trump administration trade war with Canada and the president’s talk of annexing the North American ally.”
New World Disorder Watch:
March 26 – Associated Press: “Sweden’s prime minister said… his government aims to ramp up defense spending to a target of 3.5% of the Nordic country’s gross domestic product, marking its largest military buildup since the Cold War. Ulf Kristersson said the figure was based on an assessment of a new political and security backdrop in Europe in light of Russia’s invasion of Ukraine three years ago and the prevailing ‘uncertainty’ about the transatlantic relationship.”
March 28 – Bloomberg (Ugur Yilmaz): “Ekrem Imamoglu, the Turkish opposition figure whose detention this month triggered mass protests and a market selloff, criticized Western leaders for their muted response to his arrest. In a piece published in The New York Times…, President Recep Tayyip Erdogan’s main political rival accused the US and Europe of prioritizing geopolitical interests over democratic values. ‘Their silence is deafening,’ Imamoglu wrote of world governments. ‘Washington merely expressed ‘concerns regarding recent arrests and protests’ in Turkey. With few exceptions, European leaders have failed to offer a strong response.’”
Ukraine War Watch:
March 24 – Politico (Veronika Melkozerova): “Ukrainian President Volodymyr Zelenskyy said he was defending Ukraine’s honor when he argued with both U.S. President Donald Trump and Vice President JD Vance in a disastrous Oval Office meeting last month. ‘Why did the Ukrainians defend themselves at the start of this war? It was because of dignity,’ Zelenskyy said… ‘We do not consider ourselves some kind of superpower,’ Zelenskyy said. On the contrary, Ukrainians ‘are very emotional, and when it comes to our sense of dignity, freedom, democracy, our people rise up and unite.’”
March 27 – Financial Times (Christopher Miller and Paola Tamma): “The US is pushing for a sweeping new deal to control Ukraine’s critical minerals and energy assets, while offering Kyiv no security guarantees in return, in an aggressive expansion of its previous demands. The new draft deal sent to Kyiv… goes well beyond an initial joint economic accord hammered out last month, as part of US President Donald Trump’s efforts to end Russia’s invasion of Ukraine and recoup billions of dollars’ worth of military assistance. Senior Ukrainian officials said the proposal could undermine their nation’s sovereignty, route profits abroad and deepen its dependence on Washington. The draft deal marks a dramatic escalation of the Trump administration’s efforts to seize control of Ukraine’s lucrative natural resources as it presses to bring the conflict to an end.”
March 25 – Bloomberg: “The US said Russia and Ukraine agreed to a ceasefire in the Black Sea, even as the Kremlin said its involvement would depend on a series of preconditions, including sanctions relief. In separate statements, the White House said… three days of technical-level talks in Saudi Arabia with teams from Russia and Ukraine had yielded agreements ‘to ensure safe navigation’ in the Black Sea. The sides had also agreed to prevent the use of commercial shipping for military purposes, it said.”
March 27 – Associated Press (John Leicester, Samuel Petrequin and Brian Melley): “France and Britain will continue to forge ahead with plans to deploy troops in Ukraine to defend an eventual peace deal with Russia but only some other nations want to take part, French President Emmanuel Macron said… after a summit of countries that have been mulling the proposal. The French leader said ‘several’ nations other than France and Britain want to be part of the armed force but added, ‘It is not unanimous.’ Paris and London say such a force would aim to secure any peace deal by dissuading Russia from attacking Ukraine again. ‘We do not need unanimity to achieve it,’ Macron said.”
March 25 – Bloomberg (Kate Sullivan): “President Donald Trump said it was possible that Vladimir Putin was avoiding finalizing a ceasefire agreement, but that he remained confident the Russian leader intended to strike a deal. ‘I think that Russia wants to see an end to it, but it could be they’re dragging their feet,” Trump said… ‘I’ve done it over the years. You know, I don’t want to sign a contract. I want to sort of stay in the game, but maybe I don’t want to do it quite — I’m not sure.”
March 23 – BBC (James Landale): “Sir Keir Starmer’s plan for an international force to support a ceasefire in Ukraine has been dismissed as ‘a posture and a pose’ by Donald Trump’s special envoy. Steve Witkoff said the idea was based on a ‘simplistic’ notion of the UK prime minister and other European leaders thinking ‘we have all got to be like Winston Churchill’. In an interview with pro-Trump journalist Tucker Carlson, Witkoff praised Vladimir Putin, saying he ‘liked’ the Russian president. ‘I don’t regard Putin as a bad guy,’ he said. ‘He’s super smart.’”
Middle East Watch:
March 27 – Wall Street Journal (Benoit Faucon): “The U.S. has deployed heavy, radar-evading B-2 bombers to the Diego Garcia base in the Indian Ocean, a warning to Iran and Yemen’s Houthi militia that American airstrikes could become more intense if Houthi attacks on Israel and Red Sea shipping don’t stop. The B-2 Spirit bombers arrived this week from their base in Missouri… The bombers are part of the Pentagon’s efforts ‘to deter, detect and, if necessary, defeat strategic attacks against the United States and its allies,’ the spokesperson said.”
March 24 – Wall Street Journal (Dov Lieber and Anat Peled): “Israeli Prime Minister Benjamin Netanyahu and his new national-security team are planning a major ground offensive in Gaza in the belief that capturing and holding swaths of territory will allow them to finally defeat Palestinian Islamist militant group Hamas, according to people familiar… On Sunday, Israel sent infantry into the northern part of the Gaza Strip and areas around Rafah in the south. Israel has also deployed troops in the so-called Netzarim corridor, which bisects the Palestinian enclave, returning to areas it had withdrawn from as part of a cease-fire deal. Israel also has targeted a series of Hamas’s Gaza-based political leaders in recent days.”
U.S./Russia/China/Europe Watch:
March 25 – Associated Press (Jill Lawless, Emma Burrows and Nicholas Riccardi): “As wake-up calls go, the alarms don’t get much louder. Allies of the United States see the group chat between top U.S. officials about a planned attack in Yemen that accidentally included a journalist as a jaw-dropping security breach which casts doubt on intelligence-sharing with Washington and the security of joint military operations. ‘Scary’ and ‘reckless’ was the verdict of one European diplomat about the discussion on the Signal messaging app about strikes on Houthi rebels. Neil Melvin, a security expert at defense think tank the Royal United Services Institute, called it ‘pretty shocking.’ ‘It’s some of the most high-ranking U.S. officials seeming to display a complete disregard for the normal security protocols,’ he said.”
March 26 – Reuters (Michael Martina, Patricia Zengerle and Erin Banco): “China remains the top military and cyber threat to the U.S., according to a report by U.S. intelligence agencies… that said Beijing was making ‘steady but uneven’ progress on capabilities it could use to capture Taiwan. China has the ability to hit the United States with conventional weapons; compromise U.S. infrastructure through cyber attacks; and target its assets in space, the Annual Threat Assessment by the intelligence community said… Russia, along with Iran, North Korea and China, seeks to challenge the U.S. through deliberate campaigns to gain an advantage, with Moscow’s war in Ukraine affording a ‘wealth of lessons regarding combat against Western weapons and intelligence in a large-scale war,’ the report said.”
March 21 – Bloomberg (Bei Hu): “China revealed for the first time that it has developed a compact deep-sea cable cutting device that is powerful enough to severe communication lines… The tool is able to operate at a depth of up to 13,123 feet and has been designed for use with the country’s advanced manned or unmanned submersible vehicles…”
Taiwan Watch:
March 25 – Financial Times (Michael Schiffer): “For decades, the US has relied on a policy of strategic ambiguity to deter conflict across the Taiwan Strait. By deliberately leaving uncertain how Washington would respond to a Chinese attack on Taiwan, the aim was to deter Beijing from aggression while also discouraging Taipei from declaring formal independence. For much of the post-cold war period, this approach succeeded. But that era is over. With the Trump administration’s frontal assault on the post-second world war order, strategic ambiguity is no longer a sustainable or effective policy. A new framework that combines strategic clarity with a comprehensive approach to maintaining peace in the Taiwan Strait is essential to prevent so-called greyzone coercion flaring into outright war.”
Market Instability Watch:
March 25 – Bloomberg (Michael Mackenzie): “The fiscal strength of the United States is stuck in a multi-year slide and ‘has deteriorated further’ after the country’s sovereign rating received a negative outlook in late 2023, Moody’s Ratings said. ‘Higher interest rates have markedly weakened debt affordability, accelerating the decline in fiscal strength,’ analysts led by William Foster wrote… The company said debt affordability is ‘the most important determinant of our assessment of US fiscal strength,’ and that is derived from the metrics of interest payments-to-revenue and interest payments-to-GDP.”
March 27 – Bloomberg (Carter Johnson and Alexandra Harris): “The withdrawal of a time-tested liquidity backstop offered by the Federal Reserve would represent the greatest risk to the dollar’s status as a reserve currency since the end of World War II, according to Deutsche Bank. European central banking and supervisory officials have held informal discussions about the possibility that the Trump administration will push the Fed to step back from global funding markets in times of market stress, Reuters reported this week, citing unnamed sources.”
March 26 – Bloomberg (Jessica Menton): “Worries over the economic effects of the global trade war are sapping liquidity in US stocks, creating a headache for institutional investors that could also boost volatility in broader markets. Liquidity — the ease of buying or selling an asset without affecting its price — has been dwindling for years due to factors such as tighter regulations and the rise of automatic trading… Liquidity in S&P 500 stock-index futures, as measured in the most active contract, stands at a two-year low, data compiled by Deutsche Bank AG show. Meanwhile, the five-day moving average of Citigroup Inc.’s liquidity index, which is based on futures volumes for the S&P 500, is also hovering near its lowest level in two years.”
March 24 – Reuters (Elisa Martinuzzi, Jesús Aguado, Balazs Koranyi, Stefania Spezzati and John O’Donnell): “Some European central banking and supervisory officials are questioning whether they can still rely on the U.S. Federal Reserve to provide dollar funding in times of market stress, six people familiar with the matter said, casting some doubt over what has been a bedrock of financial stability… They consider it highly unlikely the Fed would not honour its funding backstops — and the U.S. central bank itself has given no signals to suggest that. But the European officials have held informal discussions about this possibility… because their trust in the United States government has been shaken by some of the Trump administration’s policies.”
Global Credit and Financial Bubble Watch:
March 25 – Telegraph (Alex Singleton): “Donald Trump’s trade war will weaken America’s economic strength and fuel concerns about the country’s ballooning deficit, an influential credit rating agency said. In a stark warning to investors, Moody’s said that Mr Trump’s tariff policy would ‘weigh on business investment, dampen consumer confidence and prevent the Fed from reducing interest rates’. It also warned that the affordability of the US government debt is ‘materially weaker’ than it has been over the past two decades and worse than other nations with higher quality credit ratings. ‘Because the US is home to the world’s dominant reserve currency, we acknowledge the exceptionally high demand for US Treasury debt and consider it to have significantly higher capacity to carry a larger debt burden than most countries,’ the agency said. ‘The potential negative credit impact of sustained high tariffs, unfunded tax cuts and significant tail risks to the economy have diminished prospects that these formidable strengths will continue to offset widening fiscal deficits and declining debt affordability. In fact, fiscal weakening will likely persist even in very favourable economic and financial scenarios.’”
March 27 – Bloomberg (Yizhu Wang and Weihua Li): “One of American banks’ fastest-growing businesses is lending to the very companies trying to grab their market share. Traditional bank lending to non-bank financial institutions like private equity firms, hedge funds and private credit shops more than doubled in the past five years… That 16% annualized rate far surpassed their lending to categories including agriculture, credit cards, commercial and industrial companies as well as foreign governments… The phenomenon underscores the seismic shift taking hold in US finance, where less-regulated lenders have stepped into a void opened up after the financial crisis prompted banks to slow certain types of lending.”
AI Bubble Watch:
March 26 – Bloomberg (Saritha Rai and Yazhou Sun): “DeepSeek did more than just show the AI industry you don’t have to spend billions to build artificial intelligence. It fired up a long-dormant Chinese tech industry — and now Western names from OpenAI Inc. to Nvidia Corp. may pay the price. Since DeepSeek upstaged OpenAI in January with a powerful model that purportedly cost just several million dollars to build, China’s tech leaders have flooded the market with a rapid succession of low-cost AI services, undercutting premium offerings from the likes of OpenAI and Alphabet Inc.’s Google. Chinese companies have in the past two weeks rolled out no fewer than 10 major product updates or releases — and that’s just the big names.”
March 25 – Bloomberg (Luz Ding): “Alibaba Group Holding Ltd. Chairman Joe Tsai warned of a potential bubble forming in data center construction, arguing that the pace of that buildout may outstrip initial demand for AI services. A rush by big tech firms, investment funds and other entities to erect server bases from the US to Asia is starting to look indiscriminate, the billionaire executive and financier said. Many of those projects are built without clear customers in mind, Tsai told the HSBC Global Investment Summit in Hong Kong…”
March 26 – Bloomberg (Matt Day and Ryan Vlastelica): “Microsoft Corp. has walked away from new data center projects in the US and Europe that had been set to consume 2 gigawatts of electricity, according to TD Cowen analysts, who attributed the pullback to an oversupply of the clusters of computers that power artificial intelligence. The analysts, who rattled investors with a February note highlighting leases Microsoft had abandoned in the US, said the latest move also reflected the company’s choice to forgo some new business from ChatGPT maker OpenAI, which it has backed with some $13 billion.”
Bubble and Mania Watch:
March 26 – Bloomberg (Katie Roof): “Startup acquisitions have boomed so far this year, capped by last week’s massive $32 billion deal for cybersecurity startup Wiz… There have been 11 startup sales of more than $1 billion announced so far this year, cumulatively worth $54.5 billion — a total that easily surpasses previous records for comparable quarterly totals, according to data compiled by CB Insights. By contrast, in the first quarter of last year, there were only two startup acquisitions of more than $1 billion, which together brought in just $3.2 billion.”
March 24 – Bloomberg (Yiqin Shen): “An unusual rise in funding costs tied to hundreds of billions of dollars’ worth of equity investments is squeezing some hedge funds and money managers, while presenting cash-rich market players with an opportunity to rake in profits. So-called financing spreads on S&P 500 Index futures — a cost embedded in the price of derivatives that allow investors to gain exposure to stocks without buying shares outright — have climbed markedly during the recent bull market… It’s happening as equity financing plays an increasingly crucial role in the market, with hedge funds and other big-money players making bets that seek to ride momentum without tying up too much capital. By using futures, they can achieve similar market exposure without paying the full price upfront.”
March 26 – Reuters (Saeed Azhar): “Wall Street banker bonuses rose 31.5% to an average $244,700 last year as dealmaking rebounded, but the boom times may wane as economic uncertainty rises, New York State Comptroller Thomas DiNapoli said…”
March 25 – Wall Street Journal (Vicky Ge Huang): “The Trump family’s World Liberty Financial is launching a stablecoin, its latest bid to capitalize on a crypto-market revival kindled by the president’s election… The token will be issued on the Ethereum network and a blockchain created by Binance, the crypto exchange that has sought to forge closer ties to the president’s family… World Liberty’s stablecoin project marks the Trump family’s latest push into crypto, and comes as the president’s administration has sought to make the U.S. a more-welcoming market for digital assets. Earlier this month, Trump pledged to make the U.S. the ‘undisputed bitcoin superpower and the crypto capital of the world.’”
De-globalization Watch:
March 26 – Wall Street Journal (Daniel Michaels, Laurence Norman and Matthew Dalton): “European leaders had hoped that Vice President JD Vance’s antagonism was a political show to build domestic support. Now, after Vance expressed disdain for Europe in a private text chat about Yemen attack details, officials are coming to terms with a vocal vice president whose antipathy for Europe appears to run deep. ‘I just hate bailing Europe out again,’ he said regarding planned U.S. strikes against Houthi rebels… He told fellow administration officials that the U.S. was ‘making a mistake’ by hitting the Houthis, whose attacks on Red Sea shipping have scrambled global shipping routes. He noted that only ‘3 percent of US trade runs through the Suez. 40 percent of European trade does.’ Defense Secretary Pete Hegseth replied to Vance’s comments: ‘I fully share your loathing of European free-loading. It’s PATHETIC.’”
Inflation Watch:
March 28 – CNBC (Jeff Cox): “The Federal Reserve’s key inflation measure rose more than expected in February… The core personal consumption expenditures price index showed a 0.4% increase for the month, the biggest monthly gain since January 2024, putting the 12-month inflation rate at 2.8%. Economists… had been looking for respective numbers of 0.3% and 2.7%. Core inflation excludes volatile food and energy prices and is generally considered a better indicator of long-term inflation trends. In the all-items measure, the price index rose 0.3% on the month and 2.5% from a year ago, both in line with forecasts.”
March 27 – Bloomberg (S’thembile Cele, Ntando Thukwana and Alister Bull): “US President Donald Trump’s trade war risks turning powerful influences that helped ease inflation over decades in the opposite direction. ‘Some of the forces that helped the disinflation in the 1990s and the 1980s and the 2000s will be going into reverse,’ Donald Kohn, a former vice chairman of the Federal Reserve, said… ‘We see already adverse supply shocks, and the threats of adverse supply shocks, from the tariffs threatened by the Trump administration,’ Kohn told a conference in Cape Town. ‘The tailwinds that helped with the disinflation earlier are turning potentially into headwinds and that’s going to present some difficult decisions for the Fed.’”
March 23 – Bloomberg (Laura Curtis, Weilun Soon, and James Attwood): “For a symbol of the chaos engulfing world trade since the Trump administration walked into the White House, look no further than a pile of 16,000 metric tons of steel pipes. Stevedores in Germany should be preparing to load the first batch on a ship bound for a massive energy project in Louisiana. Instead the cargo is sitting in a German warehouse after Washington proposed putting million-dollar levies on Chinese ships docking in the US. Talks over the terms for shipping the pipes were put on hold until there’s more clarity, said Jose Severin, a business development manager for Mercury Group… For that particular route across the Atlantic, 80% of the ship owner’s vessels were built in China, meaning a shipment would be subject to a surcharge of between $1 million and $3 million.”
Federal Reserve Watch:
March 26 – Bloomberg (Jonnelle Marte): “Federal Reserve Bank of St. Louis President Alberto Musalem said it’s not clear any inflationary impact from tariffs will prove temporary, and he cautioned that secondary effects could prompt officials to hold interest rates steady for longer. Musalem said there is a greater risk inflation could stall above the Fed’s 2% goal or move higher because of changes to tariffs and other factors, reiterating it’s vital for inflation expectations to remain stable. ‘I would be wary of assuming that the impact of tariff increases on inflation will be entirely temporary, or that a full ‘look-through’ strategy will necessarily be appropriate,’ Musalem said… ‘I would be especially vigilant about indirect, second-round effects on inflation.’”
March 24 – Financial Times (Jonnelle Marte, Michael McKee and Catarina Saraiva): “Federal Reserve Bank of Atlanta President Raphael Bostic said he now sees just one interest-rate cut as likely this year, rather than two, with tariff hikes impeding progress on disinflation. ‘I moved to one mainly because I think we’re going to see inflation be very bumpy and not move dramatically and in a clear way to the 2% target,’ Bostic said… ‘Because that’s being pushed back, I think the appropriate path for policy is also going to have to be pushed back.’”
March 25 – Financial Times (Claire Jones): “Signs that investors in the US bond market are baking in higher inflation would be a ‘major red flag’ that could upend policymakers’ plans to cut interest rates, a top Federal Reserve official warned. The remarks from Austan Goolsbee, president of the Chicago Fed…, come just over a week after a closely watched University of Michigan poll showed households’ long-term inflation projections hit the highest level since 1993. ‘If you start seeing market-based long-run inflation expectations start behaving the way these surveys have done in the last two months, I would view that as a major red flag area of concern,’ Goolsbee told the Financial Times.”
U.S. Economic Bubble Watch:
March 25 – New York Times (Danielle Kaye): “Americans are increasingly anxious about their jobs and finances as the Trump administration’s trade policies and government cutbacks stoke concern about the economy. Consumer confidence tumbled this month to its lowest level since January 2021, the Conference Board reported… The short-term outlook for ‘income, business and labor market conditions’ fell to its lowest reading in 12 years, the business group reported, signaling consumer angst about a deterioration in economic conditions in the coming year. Economists have warned that Mr. Trump’s plans for sweeping tariffs on the United States’ biggest trading partners could reignite inflation.”
March 26 – Bloomberg (Alexandre Tanzi): “The richest half of American families owned about 97.5% of national wealth as of the end of 2024, while the bottom half held 2.5%, according to… the Federal Reserve. The lower 50% of the distribution saw their wealth share improve marginally during President Joe Biden’s term in office, climbing from 2.2%. The 66.6 million households in that group collectively owned about $4 trillion in net wealth at the end of last year, an increase of $1.25 trillion from four years earlier. Over the same period, America’s richest households — the 133,000 that make up the top 0.1% — gained more than $6 trillion in net wealth… This group holds around one quarter of all US equities…”
March 24 – Wall Street Journal (Joshua Kirby): “U.S. economic activity expanded at a faster pace in March as strength in services offset an unexpected downturn in manufacturing, but price pressures continue to mount, according to monthly business surveys… The S&P Global Flash U.S. Composite PMI–which gauges activity in the manufacturing and services sectors–rose to 53.5 this month from 51.6 in February… The services index accelerated to 54.3 in March from 51.0 in February, a sharper rise than economists had expected…”
March 24 – Bloomberg (Vince Golle): “US manufacturing slipped back into contraction territory this month, plagued by a tariff-related rise in materials costs… The S&P Global flash March factory index dropped nearly 3 points to 49.8 from the highest level since mid-2022… ‘A key concern over tariffs is the impact on inflation, with the March survey indicating a further sharp rise in costs as suppliers pass tariff-related price hikes on to US companies,’ Chris Williamson, chief business economist at S&P Global Market Intelligence, said… ‘Firms’ costs are now rising at the steepest rate for nearly two years, with factories increasingly passing these higher costs onto customers,’ Williamson said. The report showed prices received by manufacturers rose at the fastest rate since February 2023.”
March 27 – Associated Press (Matt Ott): “U.S. applications for unemployment benefits held steady last week… Jobless claim filings ticked down by 1,000 to 224,000 for the week ending March 22… That’s mostly in line with the 225,000… forecast… The total number of Americans receiving unemployment benefits for the week of March 15 declined by 25,000 to 1.86 million.”
March 26 – CNBC (Diana Olick): “Mortgage rates barely budged last week, but homebuyers may be inching back to the market despite strong spring headwinds… Applications for a mortgage to purchase a home rose 1% for the week and were 7% higher than the same week one year ago. That small gain, after weeks of declines, was enough to put demand at the highest level in nearly two months.”
March 25 – Yahoo Finance (Claire Boston): “Home prices rose in January, but the pace of that growth slowed, reflecting a softening in the real estate market in the back half of 2024. The S&P CoreLogic Case-Shiller National Home Price Index, a closely watched price benchmark, jumped 4.1% from a year earlier, just ahead of December’s 4% gain… Home prices in 20 metro areas rose 4.7% year over year, compared with a 4.5% annual increase in December.”
March 26 – Bloomberg (Claire Ballentine): “Car repossessions surged last year to the most since 2009, a sign that mounting consumer stress is reverberating through the US economy. In 2024, roughly 1.73 million vehicles were seized, according to… Cox Automotive, up 16% from the year prior and 43% compared with 2022. The last time repos hit this level the US economy was reeling from the financial crisis. The figures are another indication that consumers are struggling to keep up with their monthly bills, thanks to both elevated interest rates and the lingering effects of higher car prices.”
China Watch:
March 23 – Bloomberg: “Chinese Premier Li Qiang said the country is prepared for ‘shocks that exceed expectations’ as the world braces for US President Donald Trump to announce more tariffs on its trading partners next month. Countries should open up markets in the face of growing economic fragmentation, Li told a gathering of global business leaders… at the start of the China Development Forum in Beijing… ‘Instability and uncertainty are on the upswing,’ Li said. ‘At this time, I think it is even more important for each of our countries to open up markets more, and for all of our businesses to share their resources more.’”
March 26 – Bloomberg (Courtney McBride): “China ramped up debt issuance this quarter, a move that both signals authorities’ priority on stimulating growth and efforts to prevent a repeat of an overheated bond market. The finance ministry has raised a net 1.45 trillion yuan ($200bn) via sovereign notes so far this year, triple the amount for the same period a year ago and marking a record for any first quarter… The spike in debt financing underscores Beijing’s urgency to expand fiscal spending…”
March 25 – Financial Times (Thomas Hale): “Sunac, one of China’s biggest property developers, has launched a second restructuring of its offshore debt in an unprecedented move that shows the country’s real estate slowdown is dragging on longer than expected. The developer had unveiled its first offshore restructuring of around $10bn in debt in late 2023, bolstering hopes of recovery nearly two years after the default of its peer Evergrande ignited a sector-wide cash crunch. But Sunac recently warned that it was struggling to make offshore payments and faces a fresh winding-up petition from the Hong Kong arm of Cinda Asset Management, one of China’s four main state-owned ‘bad banks’ set up to acquire uncollectable debts.”
Europe Watch:
March 24 – Reuters (Indradip Ghosh): “Euro zone business activity grew at its fastest pace in seven months in March… The improving business climate in the common currency bloc could gain more traction over the coming months as plans for a spending splurge in infrastructure and defence, particularly in Germany, raise optimism for a turnaround in Europe’s economic fortunes. HCOB’s preliminary composite euro zone Purchasing Managers’ Index, compiled by S&P Global, rose to 50.4 this month from February’s 50.2, its highest since August.”
March 22 – Bloomberg (William Horobin): “Morningstar DBRS put a negative outlook on its assessment of France’s creditworthiness, adding to warnings over the country’s debt burden amid growing demands for defense spending and persistent risks of political instability. The change in outlook reflects ‘higher execution risks regarding France’s capacity to reduce its large fiscal deficit and high public debt ratio in the coming years, not least related to rising debt interest costs,’ the ratings firm said…”
EM Watch:
March 24 – Financial Times (Ayla Jean Yackley and John Paul Rathbone): “As the protesters marched towards Istanbul’s City Hall, the Ramadan lights strung between the minarets of the Süleymaniye mosque above them spelt out a portentous message: ‘Are you ready for the afterlife?’ But for the thousands of young demonstrators facing off with riot police below the 16th-century mosque, the most urgent question concerned something far more immediate: can Turkey remain a democracy? ‘A threshold has been crossed,’ said Seçkin, a 37-year-old photographer who… ‘We can no longer remain silent. Everyone is fed up.’ Tens of thousands of people have demonstrated across Turkey since Ekrem İmamoğlu, the mayor of Istanbul and the opposition’s star politician, was arrested at his home on Wednesday on corruption charges, which he denies.”
March 26 – Bloomberg (Kerim Karakaya, Tugce Ozsoy, Asli Kandemir and Beril Akman): “Turkish financial markets steadied as US President Donald Trump endorsed his counterpart Recep Tayyip Erdogan and the central bank pledged to further tighten policy if needed… Trump praised President Erdogan, confirming investor expectations that Turkey was likely to face little external political pressure after Ekrem Imamoglu, the popular mayor of Istanbul and the head of state’s main political rival, was detained and then jailed. ‘Good place, good leader, too,’ Trump said…”
March 24 – Bloomberg (Kerim Karakaya, Donal Griffin and William Shaw): “When Wall Street banks and hedge funds gathered in Istanbul last Wednesday with a top Turkish economist, they were prepared to hear about the country’s improved stability. Then they glanced at their phones. The Turkish lira was plunging against the US dollar, fueled by that morning’s detention of Istanbul mayor Ekrem Imamoglu — the biggest rival of President Recep Tayyip Erdogan. The group… were shocked and couldn’t take their eyes off their screens… Within about half an hour, investors around the world had dumped huge volumes of lira, slashing its value by 10% to a record low… Hedge funds spurred the selling, swapping their lira for dollars in increasing volumes…”
March 28 – Financial Times (Christine Murray): “Mexico’s economy is slowing sharply and will soon fall into recession, several economists predict, as Donald Trump’s changing tariff plans cast uncertainty over the relationship with its largest trading partner. Mexico is one of the countries most vulnerable to the US president’s drive to reshore investment and close trade deficits. The country’s economy was already fragile, with the government cutting spending due to a gaping budget deficit and investors spooked by its radical judicial reforms. Mexico’s GDP shrank 0.6% in the fourth quarter of last year from the previous three months, while economic activity fell 0.2% in January.”
Japan Watch:
March 25 – Bloomberg (Toru Fujioka and Erica Yokoyama): “Bank of Japan Governor Kazuo Ueda indicated he aims to keep his options open ahead of the bank’s next policy meeting, as traders searched for hints on the next rate hike timing during three hours of questioning in parliament… ‘Our projection is that the underlying price trend will broadly reach 2% in the second half of our outlook period,’ Ueda said. ‘Of course monetary policy can be adjusted in line with that outlook, but if the trend overshoots, we would adjust policy more strongly.’”
March 27 – Bloomberg (Toru Fujioka and Yoshiaki Nohara): “The cost of living in Tokyo rose more than anticipated from the previous month, keeping the Bank of Japan on track for further interest rate hikes. Consumer prices excluding fresh food rose 2.4% in March from a year earlier as inflation in processed food accelerated…”
March 24 – Financial Times (Roula Khalaf and Leo Lewis): “Japan has not yet beaten deflation despite years of persistently rising consumer prices and the largest round of annual wage increases in three decades, the country’s finance minister has warned… ‘I believe we need to judge carefully whether Japan has broken away from deflation by not only looking at the consumer prices, but looking at underlying prices and background in a comprehensive fashion… it is our judgment at present that Japan has not overcome deflation,” Kato said.”
Leveraged Speculation Watch:
March 27 – Reuters (Summer Zhen): “Big swings in stock markets and hedge fund activity have propelled Hong Kong’s derivative trading to unprecedented highs. The number of outstanding futures and options contracts on the city’s bourse has reached 22 million so far this year, surpassing the record set in 2024 by 70% in less than three months. Analysts and investors attribute the sharp rise in the use of derivatives this year to the craze around Chinese technology firms and the growing use of hedging tools by long-short funds to navigate geopolitical and tariff uncertainties.”
Social, Political, Environmental, Cybersecurity Instability Watch:
March 23 – Financial Times (Michael Peel): “The annual Nobel Prizes must ‘stand up’ for scientific learning and free inquiry in an age when both are under growing threat, the new head of the foundation that oversees the honours has warned. The 124-year-old awards’ task was ever more crucial because the spread of disinformation was undermining knowledge acquired by research, said Hanna Stjärne, Nobel Foundation executive director. While Stjärne did not criticise President Donald Trump’s administration directly, her remarks come in the context of a widening US official crackdown on leading research agencies… ‘Our mission will always be to stand up for knowledge, and to stand up for the profound work that scientists do,’ Stjärne said… ‘This task is even more important than it used to be, because in turbulent times people are seeking hope.’”
March 24 – Reuters (Sybille de La Hamaide): “Highly pathogenic avian influenza, commonly called bird flu, has increasingly spread to mammals and infected hundreds of people, raising concerns that it may lead to human-to-human transmission and turn into a new pandemic. Cases of the disease in mammals have mostly been detected in the Americas and Europe. Sheep were added to the list on Monday… Some of the mammals such as dairy cows and sheep are farmed and so interact closely with humans, increasing the threat of transmission… Pigs represent a particular concern for the spread of bird flu because they can become co-infected with bird and human viruses, which could swap genes to form a new, more dangerous virus that can more easily infect humans.”
March 24 – Wall Street Journal (Giulia Petroni): “Global energy demand surged at a faster pace last year as record-high temperatures fueled the need for cooling systems, underscoring the growing impact of extreme weather on energy consumption patterns, the International Energy Agency said. Last year was the hottest on record. Intense heat waves in China and India significantly pushed up coal use, contributing to a 2.2% increase in the world’s energy demand compared with an average rise of 1.3% seen in the 2013-2023 period. ‘The sharp increase in the world’s electricity use last year was driven by record global temperatures, which boosted demand for cooling in many countries, as well as by rising consumption from industry, the electrification of transport, and the growth of data centers and artificial intelligence,’ the Paris-based agency said…”
March 27 – Wall Street Journal (Soobin Kim and Gareth Vipers): “Raging wildfires have killed dozens of people, destroyed centuries-old temples and displaced tens of thousands from their homes in South Korea’s southeast. The fires… mark the country’s worst natural fire disaster, said Han Duck-soo, the country’s acting president and prime minister. More than 24,000 residents were evacuated… as firefighters struggled to contain the blazes that destroyed homes and heritage sites in Gyeongsang province. ‘We are fighting the worst-ever wildfire with all the manpower and equipment we can muster, but it’s an extraordinary situation,’ Han said…”
Geopolitical Watch:
March 23 – Financial Times (Charles Clover, Laura Pitel, Raphael Minder, Leo Lewis, Christian Davies and Song Jung-a): “During the cold war, the US and the Soviet Union were at least able to agree on one thing: nuclear proliferation was bad for everyone. ‘Haunted’ by the thought of a ‘spiralling nuclear arms race’ around the world, US President John F Kennedy initiated talks in the 1960s on what would become the Non-Proliferation Treaty, a bargain between superpowers that has kept nuclear weapons states in single digits to this day… Denis Healey, the late British minister, quipped that US nuclear policy only required ‘5% credibility to deter the Russians, but 95% to reassure the Europeans’. Now, under Donald Trump, that assurance has never appeared weaker. The US president’s pivot to Moscow and scathing disregard for Nato has prompted old allies — from Berlin and Warsaw to Seoul and Tokyo — to confront what was seemingly unthinkable: how to prepare for a potential withdrawal of their US nuclear shield.”
