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French parliament votes to oust Michel Barnier’s government

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French parliament votes to oust Michel Barnier’s government

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The French parliament on Wednesday voted to oust Prime Minister Michel Barnier over his proposed deficit-cutting budget, plunging the country into deeper political turmoil.

A motion of no confidence was approved by 331 votes in the 577 member national assembly, as Marine Le Pen’s far-right party teamed up with a leftist bloc to bring down Barnier’s minority government.

Barnier’s administration has collapsed without adopting his contentious 2025 budget that included €60bn in tax increases and spending cuts to reduce France’s deficit, which will reach 6 per cent of GDP this year.

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President Emmanuel Macron will now have to select another prime minister, a task made difficult by a raucous parliament divided into three blocs, none of which is close to having a governing majority.

Barnier’s three-month term as prime minister was the shortest of any premier since France’s Fifth Republic was founded in 1958. It is only the second time a government has been voted down since then. 

The political tumult gripping France comes just weeks after German Chancellor Olaf Scholz’s coalition collapsed, leaving the EU’s two most powerful states in limbo.

Barnier defended his record as prime minister during a national assembly debate before the confidence vote, telling lawmakers: “I have been and am proud to act to build rather than to destroy.”

He said it was “not for pleasure” that he had presented a difficult budget. France’s fiscal “reality will not disappear by the enchantment of a motion of censure”, he added.

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Macron will have to contend with an emboldened Le Pen and her Rassemblement National party, which was decisive in removing Barnier after spurning his last-ditch attempts at a compromise on his budget.

Le Pen said her decision to censure Barnier was prompted by the “necessity to put an end to the chaos, to spare the French people from a dangerous, unfair and punitive budget”.

Macron “is largely responsible for the current situation”, Le Pen told TF1 television shortly after the vote.

When the president appoints a new prime minister, that person would work on a new budget which Rassemblement National “will construct with other forces in the national assembly”, she added.

Mathilde Panot, a leader of the far-left France Unbowed party, slammed Barnier for seeking deals with the Rassemblement National to try to stay in power.

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“Barnier tried to escape censure by choosing dishonour, he has gotten dishonour and censure,” she said.

Marie Lebec, a lawmaker from Macron’s centrist alliance and former minister, said her fellow parliamentarians should put aside party squabbling to find a way forward.

The political crisis risks further spooking financial markets. Barnier had previously warned of a financial and economic “storm” should his government fall without adopting the 2025 budget, saying borrowing costs were on track to exceed €60bn next year, more than the French defence budget.

French borrowing costs on its 10-year sovereign bond hit a 12-year high against Germany’s last week, as investors fretted about the likely failure of Barnier’s government.

After the confidence vote on Wednesday, the euro was flat against the dollar at $1.052, reflecting how the result was widely expected.

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Barnier may stay on as a caretaker premier for a short time, but it will fall to his successor to craft another 2025 budget, ahead of a year-end deadline.

In the meantime, Macron and parliament have several options to pass emergency measures that would avoid a government shutdown and keep public services funded temporarily.

But unlike previously when he procrastinated on picking premiers, Macron aimed to move quickly this time, said a person familiar with his thinking, and he has drawn up a list of potential candidates to succeed Barnier.

The Elysée said Macron would address the nation on Thursday evening in a televised speech.

Barnier was appointed by Macron in September after the president’s centrist alliance lost snap parliamentary elections, which increased the ranks of the far right and leftist parties.

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His departure is a sign of how gridlocked French institutions have become since the elections.

“It feels like a series of impasses in a parliament where no one has a workable majority,” said Bruno Cautrès, political scientist at Sciences Po. “There is a risk that a new government would fall quickly, just as Barnier has done.”

Additional reporting by Ian Smith in London

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Bears are dropping like flies

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Bears are dropping like flies

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We’ll take $1tn on “things people say at the top of the cycle”, please Alex.

Mega forces are reshaping economies and their long-term trajectories — it’s no longer about short-term fluctuations in activity leading to expansion or recession. 2024 has reinforced our view that we are not in a business cycle: AI has been a major market driver, inflation fell without a growth slowdown and typical recession signals failed. Volatility surged and narratives flipflopped as markets kept viewing new data through a business cycle lens, not one of transformation.

That’s from BlackRock’s 2025 investment outlook, published yesterday. It’s not quite Gordon Brown bragging on the eve of the financial crisis that he’d eliminated boom and bust cycles, but there are uncanny echoes.

However, BlackRock gunna BlackRock. A large investment manager is never going to sound overly negative in its big annual outlook, when the whole point is to entice punters into the building. Or as BlackRock puts it:

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This fundamentally different landscape upends the nature of investing, in our view. We think investors can find opportunities by tapping into the waves of transformation we see ahead in the real economy, with AI and the low-carbon transition requiring investment potentially on par with the Industrial Revolution.

What’s more noticeable is how many permabears are now throwing in the towel. Even Nouriel Roubini is sounding remarkably positive these days, and now David Rosenberg is publishing mea culpas (though he insists that this is not what it is).

Check it out:

The bottom line: One can reasonably debate whether the stock market has risen exponentially but there is no arguing that the surge in the S&P 500 these past two years has been nothing short of extraordinary. And it has clearly gone much further than I thought it would, especially in these past twelve months, and so at this point, it is worth the time and effort to discuss and interpret the message from the market; tip the hat to the bulls who have, after all, been on the right side of the trade, and provide some rationale behind this powerful surge. This is not some attempt at a mea culpa or a throwing in of any towel, as much as the lament of a bear who has come to grips with the premise that while the market has definitely been exuberant, it may not actually be altogether that irrational.

Rosenberg’s über-bear credentials have been well-established for several decades. He’s your favourite bearish analyst’s favourite bear. As recently as last month he was recommending people get into cash because he felt pretty much everything was overvalued. So Rosenberg’s shift is . . . interesting.

His whole argument is worth reading, as some of the thoughtful bearishness still lingers. For example, Rosenberg still reckons that there could be a correction sometime soon, perhaps triggered by a more hawkish Federal Reserve. But he thinks that the response will and should probably be to “buy the dip”.

This bit stood out for us, as FTAV never thought we’d hear Rosenberg unironically say anything like “this time is different”:

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I do hate to ever use the term “new era” or “it’s different this time,” but we do not have a large sample size of data points historically on such major inflection points on the technology curve. But when they do occur, what you do find is what we have on our hands today, which, once again, is an investment community lengthening their investment horizons and rendering classic valuation metrics obsolete (at least for the environment we find ourselves in currently). That’s the major point.

This is the kind of stuff that mostly happens just before major market turns. Thankfully Albert Edwards is as resolutely gloomy as ever, because if he changes his mind all hell will probably break loose.

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Security expert shocked health care CEO didn't have security when he was killed | Fox News Video

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Security expert shocked health care CEO didn't have security when he was killed | Fox News Video
Klein Investigations CEO Philip Klein joined ‘Fox & Friends First’ to discuss why it was ‘completely unusual’ that UnitedHealthcare CEO Brian Thompson didn’t have personal security at the time of the murder as the perpetrator remains on the loose.
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Trump picks Musk ally David Sacks as crypto and AI tsar

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Trump picks Musk ally David Sacks as crypto and AI tsar

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President-elect Donald Trump has named venture capitalist David Sacks as the White House’s artificial intelligence and cryptocurrency tsar, the latest confidant of Elon Musk to receive a top appointment in the new government.

Sacks, who was an early employee alongside Musk at PayPal, is a co-host of the All-In podcast and emerged as one of the earliest and most vocal Silicon Valley supporters of Trump, hosting a fundraiser for the candidate in San Francisco in June.

“David has the knowledge, business experience, intelligence and pragmatism to MAKE AMERICA GREAT in these two critical technologies,” Trump posted on his social media platform, Truth Social.

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“He will work on a legal framework so the Crypto industry has the clarity it has been asking for, and can thrive in the US,” he added.

AI and crypto regulation are two of the incoming administration’s most pressing priorities.

Crypto investors and founders hope Trump will take a more favourable approach to the sector than Joe Biden’s administration, after the president-elect offered vocal support for digital currencies during his campaign.

This week Trump nominated Paul Atkins, who is sympathetic to the sector, to head the Securities and Exchange Commission. The price of bitcoin, which has soared since the election, climbed past $100,000 for the first time on Thursday after Atkins’ selection.

Trump’s position on AI is less clear, but in his first term he issued an executive order “committed to strengthening American leadership in AI” and many in the sector anticipate lighter regulation.

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Sacks threw his weight behind the candidate on social media and via his podcast during the campaign. His support earned him a speaking slot at the Republican National Convention in July.

He has been vocal on foreign policy issues as well as tech concerns, including repeatedly criticising President Biden’s approach to Russia’s invasion of Ukraine. Sacks has argued instead for Kyiv to “cut a deal” to ensure a swift ceasefire with Moscow.

His appointment creates another bond between Trump’s Republican party and Silicon Valley, which has historically been a Democratic stronghold.

Musk is the most prominent member of the tech elite to have taken a role in the incoming administration, but other high-profile figures such as venture capital Marc Andreessen have played informal roles such as helping to find candidates for the ‘department of government efficiency’.

Sacks is part of a so-called PayPal mafia, a group of founders and early employees at the payments company that includes Musk, Palantir co-founder Peter Thiel, LinkedIn co-founder Reid Hoffman and Sequoia managing partner Roelof Botha.

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He has deepened his connection to Musk by backing a number of the entrepreneur’s companies, including xAI, X and SpaceX, through his venture capital firm Craft Ventures.

Sacks in May launched his own AI chat platform called Glue.

Sacks’s firm said his new position will not conflict with his existing positions.

“The tsar is an advisory role and has the same government classification as ‘doge’, which does not require David to leave Craft,” the firm said.

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