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These Are The World's Top Destinations For Wealth Migration

2026-07-04T16:19:23.442-07:00

These Are The World's Top Destinations For Wealth Migration

Countries are increasingly competing to attract wealthy individuals alongside businesses and skilled workers. For many governments, internationally mobile wealth represents a source of investment, entrepreneurship, and long-term economic growth.

This graphic, via Visual Cspitalist's Dorothy Neufeld, ranks the world’s most competitive destinations for wealth migration using data from The Henley Private Wealth Migration Report 2026, which evaluates countries across 12 factors including tax policy, investor pathways, regulatory quality, and overall business environment.

The Most Competitive Countries for Wealth Migration

Below, countries are measured by their competitiveness for attracting internationally mobile wealth.

Singapore leads globally, ahead of New Zealand and the Cayman Islands. Europe also performs strongly, with the Netherlands, Cyprus, Portugal, Italy, Switzerland, and Greece all appearing in the top 15.

Singapore’s position reflects its combination of low taxes, political stability, and business-friendly policies. Together, these strengths have made it one of the safest countries for investors, and a magnet for wealth across Asia.

Small Countries Stand Out

One of the clearest patterns is the strength of smaller economies. Overall, 11 of the 16 most competitive countries have populations under 10 million.

Many of these countries have spent decades building investor-friendly ecosystems. Singapore offers a globally connected financial hub, Cyprus provides attractive residency pathways, and Switzerland combines political stability with an established private banking industry.

Rather than relying on domestic market size, many of these countries compete by offering predictable regulation, efficient tax systems, strong legal institutions, and straightforward pathways for investors to establish residency or relocate wealth.

The U.S. Falls Behind

Despite having the world’s largest economy, the U.S. faces several structural challenges in attracting wealth.

Citizenship-based taxation, fiscal complexity, longer investor processing times, and political polarization are among the factors weighing on its score. By contrast, many higher-ranked countries offer simpler tax regimes, making them more attractive to internationally mobile wealth.

Unlike most countries, the U.S. taxes its citizens on worldwide income regardless of where they live, a feature that can increase tax burdens for internationally mobile individuals.

Why Countries Are Competing for Wealth

Countries are increasingly competing for more than businesses and skilled workers. They are also competing for private capital.

In 2025 alone, nearly 1 million people globally became millionaires, highlighting the growing pool of internationally mobile wealth.

High-net-worth individuals often relocate with businesses, investment capital, and philanthropic spending. As global wealth continues to grow, attracting even a relatively small number of affluent residents can have an outsized economic impact, particularly for smaller countries.

To learn more about this topic, check out this graphic on the world’s most powerful passports.

Tyler Durden Sat, 07/04/2026 - 16:55
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Historians Set Record Straight On 5 Events That Shaped America

2026-07-04T14:19:34.146-07:00

Historians Set Record Straight On 5 Events That Shaped America

Authored by Janice Hisle via The Epoch Times,

As America celebrates its 250th birthday, it’s prime time for historians such as Jeff Bloodworth to set the record straight.

Bloodworth, a professor at Pennsylvania’s Gannon University, noted that it had become trendy among historians to “demythologize” the Founding Fathers.

“But it has gone too far,” he told The Epoch Times. “The achievements of the Founders and the founding are obscured by the lists of sins.”

Now, he thinks “the pendulum is swinging back” toward a more balanced, nuanced, and accurate view of the Founders—and about other aspects of American history.

Through his role with Heterodox Academy—a bipartisan group advocating for open inquiry on college campuses—Bloodworth said he sees “there’s a real pushback against this stuff.”

Any fair appraisal of the Founders requires “lauding their achievements but also recognizing their omissions and their flaws and their hypocrisies,” he said.

Bloodworth and two other historians who spoke to The Epoch Times shed light on myths, misrepresentations, and misunderstandings about the nation’s foundational period; The Epoch Times also reviewed dozens of historic references for this story.

Without historical knowledge, it’s easy to “get sucked into believing things have never been worse, that there’s never been a time like this—and that just isn’t true,” Bloodworth said.

Jeff Bloodworth, professor of history, holds up a copy of his book

Stanley Schwartz, a professor at Cedarville University in Ohio, echoed many of Bloodworth’s observations.

Stanley Schwartz, assistant professor of history at Cedarville University in Cedarville, Ohio. Courtesy of Cedarville University

When students question how early American history relates to them, he responds that issues the Founders faced remain relevant. Those include “how to govern well,” he said, along with “how to relate to foreign powers.”

Many students who expected to be bored in class end up realizing that history “speaks to a person, helps you find your roots, find your place in the world,” Schwartz said.

Anna Vincenzi, a professor at Hillsdale College in Michigan, said learning about America’s history fulfills “a deeply human need ... to know the truth about where we came from.” That knowledge helps people understand “the good things about the history that has brought us here, and also the origin of the problems.”

The Boston Tea Party and Why It Happened

On Dec. 16, 1773, hundreds of angry colonists—many disguised as Native Americans—dumped 92,000 pounds of tea into Boston Harbor.

The Boston Tea Party thus became one of the most iconic acts of defiance in U.S. history. Yet modern Americans often misconstrue the reasons for the protest and overestimate its aftereffects, historians say.

Yes, the British Parliament’s passage of the Tea Act of 1773 sparked the protest. But contrary to popular modern belief, the act resulted in lower tea prices.

So why did the act anger the colonists so much?

Part of the reason: It reinforced an existing import tax on tea.

Another factor: Drinking tea is so quintessentially British that “taxing tea is ... like making them feel like they’re not quite British,” Vincenzi said. “It was perceived as a statement on their status as British citizens.”

A work of art by Nathaniel Currier depicts the 1773 Boston Tea Party, entitled “The Destruction of Tea at Boston Harbor,” created in 1846. Colonists known as the “Sons of Liberty” dressed as Mohawk American Indians and smashed 342 chests of tea and emptied the contents—valued at nearly $2 million today—on Dec. 16, 1773. Public Domain

The larger issue, however, was that colonists had no representation in the British Parliament. Yet Parliament repeatedly imposed policies “without the consent of the people through their representatives, in a way that they say is violating the rights and liberties of a British citizen,” Vincenzi said.

Those actions conflicted with the British constitution’s traditional limits on the king’s power, dating to the 13th century, she said.

At the time of the tea party, American colonists were drinking about 1.2 million pounds of tea each year. Much of it came from England and was subject to taxes imposed by the Townshend Revenue Act, according to the Boston Tea Party Ships and Museum.

American colonists started smuggling lower-priced tea from the Dutch and other European markets.

In response, Parliament imposed the Tea Act, which helped a private British company, the East India Tea Company, undercut prices of the smuggled tea. If colonists bought that cheaper, British-subsidized tea, they still would be forced to pay the Townshend Act’s import duty.

Thus, many colonists feared that acquiescing would embolden the British government to impose even more taxes.

The Sons of Liberty—some of whom were tea smugglers—began organizing meetings to address “the tea crisis.”

Up to 6,000 people met on Nov. 29, 1773, after the first shipload of unwanted tea docked in Boston Harbor. Attendees reached a consensus: The tea would be sent back to England and no tax would be paid.

An engraving made by John Karst in 1865 depicts John Lamb, a Sons of Liberty leader, reading the British Parliament’s Tea Act of of 1773 at New York City Hall on Dec. 17, 1773. Colonists took issue with the Act as they had no representation in the British Parliament. John Karst/Public Domain

After exhausting all legal remedies to achieve those goals, leaders executed their last-ditch secret plan: trashing the tea.

Protesters donned wool blankets, grabbed tomahawks, and smeared coal dust on their faces—called “Indian dress” then. The disguises weren’t meant to be convincing; they mostly served to conceal identities so protesters could avoid punishment.

Tea partiers smashed 342 chests of tea and emptied the contents—valued at nearly $2 million today.

The protest had an impact—but not in the way many people might think.

“While the Tea Party itself didn’t mobilize Americans en masse, it was Parliament’s reaction to it that did,” according to a History.com article.

In 1774, the British enacted “punitive measures meant to teach the rebellious colonists who was boss,” the article said. The British closed Boston Harbor, replaced Boston’s elected officials with the king’s appointees, and forced private citizens to quarter British troops in their homes.

Those actions inspired colonists to hold the first Continental Congress meeting.

“Revolution was officially in the air,” the article said.

Colonial fife and drum corps play in front of the Old South Meeting House during the Boston Tea Party 250th Anniversary celebration, in Boston in 2023. The Boston Tea Party has became one of the most iconic acts of defiance in American history. Courtesy of Caroline Talbot/December 16.org

Patriot Paul Revere and ‘The British Are Coming!’

Revere was among “many messengers spreading the alarm” across the Massachusetts countryside on April 18 and 19, 1775, according to the National Park Service.

The Revere-as-lone-rider myth arose partly from the celebrated poem “Paul Revere’s Ride” by Henry Wadsworth Longfellow. It omits any mention that other horsemen helped alert townspeople about British soldiers heading toward Concord.

There, the soldiers intended “to arrest patriots and seize colonial militia stockpiles,” the CIA said in an April 2026 article.

Notably, before his famous ride, Revere and others formed “the first Patriot intelligence group on record,” the CIA said in a report about the role intelligence played in the American Revolution.

Called “The Mechanics” or “The Liberty Boys,” the secret group of about 30 men grew out of the old Sons of Liberty organization that opposed British taxes on colonists, the CIA said.

A statue of Paul Revere near Old North Church in Boston on April 8, 2026. Historical records from that era suggest that Revere did not shout “The British are coming!” Instead he warned, “The regulars are coming!” The term, “regulars,” referred to the British professional soldiers. Samira Bouaou/The Epoch Times

Starting in late 1774, the group gathered information to oppose British authority. In 1775, operatives exposed “the cover story the British had devised to mask their march on Lexington and Concord,” the CIA said.

That information laid the foundation for Revere’s ride.

As he rode, Revere never shouted, “The British are coming!”

That phrase “would not have made sense at the time,” because many of Revere’s fellow colonists considered themselves to be British, according to the Paul Revere House website.

Historical records from that era suggest that Revere instead warned, “The regulars are coming!” The term “regulars” referred to the British professional soldiers.

According to the Paul Revere House, the enduring but inaccurate “British are coming” phrase appears to have originated during a dinner party in 1822—nearly a half-century after Revere galloped into history.

(Top) The Marrett and Nathan Munroe House in Lexington, Mass., on March 26, 2025. (Bottom) The Buckman Tavern on the Lexington Battle Green. The Battle of Lexington, which began the American Revolution, took place in this area. Learner Liu/The Epoch Times

‘The Shot Heard ’Round the World’ and Its Origin

Historians still disagree over who fired the first shot in the initial clash between British troops and Patriots.

They do agree that the first volleys were fired at Lexington, but the next ones fired at Concord reverberated more loudly in history.

Weeks before those pivotal confrontations, Revere’s secret group had forewarned Patriots about British Gen. Thomas Gage’s plans to send troops to Lexington and Concord.

Late on April 18, 1775, about 800 British regulars started their 20-mile march toward Concord, according to the American Battlefield Trust.

After covering about 12 miles, the soldiers reached Lexington as the sun rose the next morning and confronted about 70 armed colonists on the town green.

Although the rebels began dispersing under their commander’s order, “at some point a shot rang out,” the trust said.

“The nervous British soldiers fired a volley, killing seven and mortally wounding one of the retreating militiamen. The British column moved on towards Concord, leaving the dead, wounded, and dying in their wake.”

An oil painting by William Barnes Wollen created in 1910 depicts the Battle of Lexington on April 19, 1775. About 800 British soldiers reached Lexington as the sun rose on April 19, 1775, and confronted about 70 armed colonists on the town green. Public Domain

In Concord, because of warnings from Revere’s secret group, colonists had hidden or relocated most of their stockpile before the redcoats arrived, the park service notes.

As a result, “the mission to destroy military goods in Concord turned out to be a miserable failure for the British,” the park service said.

The British soldiers also encountered a much larger contingent in Concord.

Within 24 hours, “more than 70 of the King’s finest troops lay dead and many more wounded,” along with 49 militiamen, the park service said. “Following a horrific day of bloodshed, the war General Gage hoped to avoid arrived at his doorstep.”

Many years later, a poem immortalized Concord as the site where a ragtag bunch of farmers, merchants, and blacksmiths stunned the world by overcoming the sophisticated redcoats.

“Concord Hymn” by Ralph Waldo Emerson debuted July 4, 1837, during the dedication of a Battle of Concord monument. The poem’s second line reads, “Here once the embattled farmers stood/ And fired the shot heard ‘round the world.”

Decades later, the 1970s educational cartoon series “Schoolhouse Rock” inspired children across the United States to sing “Shot Heard ’Round the World,” a song that retraces early U.S. history. Today, it still sparks nostalgia among Americans who grew up at that time—and amusement among younger generations.

(Top and Bottom) The Lexington Battle Green, where the Battles of Lexington and Concord started, in Lexington, Mass., on March 26, 2025. In Concord, because of warnings from Revere’s secret group, colonists had hidden or relocated most of their stockpile before the redcoats arrived. Learner Liu/The Epoch Times

Why the Revolution Started and How It Evolved

Although the colonists’ war would later be called “the Revolution” and “the war for American independence from Britain,” it was neither revolutionary nor independence-focused at the outset, historians say.

Schwartz said his Cedarville students will sometimes say that the Revolution centered on “destroying things to make everyone equal.”

That’s not so. Harvard University historian Bernard Bailyn pointed out that “things were already a lot more equal in the colonies than they were in Great Britain,” Schwartz said.

“In America, it was a lot easier to have the right to vote, a lot easier to own land ... to participate in society,” Schwartz said.

Colonists saw the British Crown trying to take away those advances.

“So the American Revolution wasn’t about tearing down old structures to get to equality,” he said. “It was about preserving healthy traditions of equality in the community that already existed.”

Vincenzi said her research challenges popular impressions of the nation’s early history.

“I do think Americans think of the American Revolution as more revolutionary ... more of a break from the British political tradition than it actually was,” said the Italian-born professor.

A still taken from video of Bernard Bailyn, Harvard University professor and historian, as he delivers a lecture at Brown University in Providence, R.I., on June 7, 2012. Bailyn pointed out that “things were already a lot more equal in the colonies than they were in Great Britain.” Screenshot via Brown University/CC BY 3.0

“That’s not a bad thing. There is a richness of tradition to be rediscovered there. ... It speaks to the wisdom of the Founders; they knew that starting something on a blank slate is more dangerous than building on a very rich tradition of thought.”

And the “revolutionists” weren’t initially focused on breaking free from England, either.

When the first shots rang out at Lexington and Concord, militiamen still considered themselves “loyal subjects to England’s King George the III,” the park service said. “Independence was the furthest thing from their minds.”

Rather, they “assembled to defend their rights, as they perceived them under English law.”

Vincenzi said she often reminds her Hillsdale students that Revolutionary-era Americans “wanted to be British, and to look British.”

They bought porcelain tea sets that looked “as aristocratic and as British as possible,” Vincenzi said. They also admired and emulated British fashion, portrait styles, and architectural designs.

Calls for independence finally surfaced in 1776.

Until then, “Americans felt British,” Vincenzi said. Yet the British treated the colonists as second-class citizens.

“And that is what eventually ... pushes them to consider independence,” she said.

Had that not been the case, “Americans could still be carrying a British passport,” Vincenzi said, echoing a statement she heard from noted historian Jack Greene.

Lexington Minute Men gather for a battle reenactment of the Battle of Lexington and Concord as part of Patriot's Day celebrations in Lexington, Mass., on April 18, 2026. The following day marks the 251st anniversary of the Battle of Lexington and Concord, the first major military actions between the British Army and the Colonial American militias during the American Revolutionary War. Joseph Prezioso / AFP via Getty Images

The Founding Documents and Whom to Credit for Them

Some people mistakenly believe that Thomas Jefferson penned the entire Declaration of Independence by himself in a single night before Congress ratified the document unanimously on July 4, 1776.

The truth: Jefferson worked with four other committee members. They chose him to write the first draft—a process that took three weeks, followed by 86 edits from committee members and the Continental Congress, the National Park Service said.

“He was especially sorry they removed the part blaming King George III for the slave trade, although he knew the time wasn’t right to deal with the issue,” a National Archives article said.

The Declaration listed grievances against the British government and outlined core principles of the fledgling nation.

Years after defeating the British, America’s leaders met to establish the Constitution, which remains the supreme law of the land today.

Jefferson, however, never signed the document.

“This is the most popular myth at the National Constitution Center, especially when visitors enter our Signers’ Hall, [comprising] statues of the Constitution’s different signers—and ask where the Jefferson statue is,” the center’s website said.

Life-sized statues of the signers of the Constitution in Signers' Hall at the National Constitution Center, in Philadelphia, on July 18, 2012. Thomas Jefferson did not sign the Constitution–he was in Paris as the U.S. envoy to France at the time. Ziko van Dijk/CC BY-SA 3.0

Jefferson, the U.S. envoy to France, was in Paris when the Constitutional Convention met in Philadelphia in 1787.

When people think about crafting the Constitution, “we emphasize the two bright young men, James Madison and Alexander Hamilton,” Schwartz said. Both deserve credit for major roles in shaping the document. But in doing so, “we overlook a lot of the compromisers, the deal-makers, the older statesmen” whose influence was less obvious but essential, he said.

Those delegates “took Madison and Hamilton’s ideas, made them workable, built compromises out of them, and often changed them completely or went a completely new direction,” Schwartz said.

Those lesser-known contributors include Roger Sherman and Oliver Ellsworth. The two Connecticut delegates helped bridge an impasse over the rights of small states versus large states. The Great Compromise provided equal representation for each state in the Senate and population-based seats in the House of Representatives.

Sherman is among six Founders who signed both the Declaration of Independence and the Constitution. The other five were George Clymer, Benjamin Franklin, Robert Morris, George Read, and James Wilson.

John Trumbull's painting, “Declaration of Independence,” depicts the five-man drafting committee of the Declaration of Independence presenting their work to the Congress. The painting can be found on the back of the $2 bill. The original hangs in the U.S. Capitol rotunda. It does not represent a real ceremony; the characters portrayed were never in the same room at the same time. Another Believer/CC BY-SA 3.0

Schwartz emphasized that the Founders weren’t “just this collection of really intelligent people.” Many members of the Constitutional Convention had business experience, had traveled the world, and were “middle-aged or a little bit older.”

Thus, “they had wisdom, a lot of practical experience,” Schwartz said, which strengthened the Constitution.

Many people don’t realize that beyond the “young firebrands” known for their constitutional contributions, quiet leadership came from delegates such as George Washington, an elder statesman and war hero who became the first president.

“Just by being there and overseeing the proceedings, he’s adding a lot to it,” Schwartz said.

Without Washington and lesser-known delegates such as Ellsworth and Sherman, America would have ended up with a very different Constitution, he said.

“That’s a lesson that’s relevant for us today. We have a lot of people in our current politics who say, ‘Hey, I’m young. I want to charge to the front of this scene,’” Schwartz said.

“I think the Founders show us a different path. ... It’s good to have big ideas, but you also need people who are going to work hard behind the scenes and get things done.”

A sculpture by Adolph Alexander Weinman depicts the Committee of Five, on the pediment of the Jefferson Memorial in Washington. The committee was composed of John Adams, Benjamin Franklin, Thomas Jefferson, Robert Livingston, and Roger Sherman. They drafted and presented to the full Congress in Pennsylvania State House what would become the U.S. Declaration of Independence of July 4, 1776. Another Believer/CC BY-SA 3.0

Slavery and How the Founders Saw It

In recent years, young Americans have been taught that the Founding Fathers “were all pro-slavery, they all owned slaves, they all thought slavery was a good thing—and that’s just not true,” Schwartz said. “That’s a big myth and a big mistake that we have to deal with in today’s society.”

Actually, the Founders were divided over slavery; some were very much against it. However, they didn’t insist on action in the Constitution, Schwartz said, because they believed people could see it was dehumanizing—which would lead to its abolishment.

He and Bloodworth concurred on that point.

While it is “appalling” that people could “own other human beings,” Bloodworth said, it’s essential to remember that “slavery was the norm” at the time.

“The past is ‘another country,’ and we have to understand it on its own terms,” he said. “Too often, contextualizing is seen as ‘excuse-making,’ which it’s not the same thing.”

He credits the Founders for embedding “the logic of racial equality” into America’s foundational documents, even though many weren’t yet ready to fully embrace it.

The opening words of the U.S. Constitution are displayed on the exterior of the National Constitution Center in Philadelphia, on Sept. 15, 2003. Roger Sherman is among six Founders who signed both the Declaration and the Constitution. Jeffrey M. Vinocur/CC BY 2.5

“Many of the Founders’ documents indicate that they most certainly believed that slavery was going to ... die a slow death,” Bloodworth said.

Significantly, Washington freed his slaves upon his death.

“It doesn’t erase the fact that he owned slaves,” Bloodworth said, but that “momentous” act set the tone for others to follow suit.

Vincenzi warns against “over-simplified” views of the debate over slavery during the age of the nation’s founding.

“It’s complicated,” she said.

A significant number of delegates to the Constitutional Convention were determined to defend slavery. Many others wanted slavery to be abolished, yet they worried that “the sudden abolition of slavery could create a lot of problems,” Vincenzi said.

They asked questions such as “If you treat people as non-people for decades, how are they going to live once they’re emancipated?”

The slavery issue was a pivotal one that perhaps made a big compromise at the Constitutional Convention inevitable “for the sake of establishing a union that otherwise would have probably not been born,” she said.

Tyler Durden Sat, 07/04/2026 - 16:20
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'Gave Iran Week Off Because We're Nice': Trump References Ayatollah Funeral In Rushmore Speech

2026-07-04T14:19:33.145-07:00

'Gave Iran Week Off Because We're Nice': Trump References Ayatollah Funeral In Rushmore Speech

On Friday President Trump delivered a speech at Mount Rushmore to kick off the nation's 250th anniversary celebrations, and in it he confirmed that everything regarding Iran - whether on the military or diplomatic fronts - have been paused to allow for the Islamic Republic to bury its late supreme leader Ali Khamenei.

Trump said Washington "knocked the hell out of Iran" and that the country was "dying to settle". He also made comparisons between the lengthy Iran conflict and the brief US operation to overthrow Maduro of Venezuela.

"We beat Venezuela in one day, and we knocked the hell out of Iran," he said. That's when he claimed that the current US posture and pause in action is all about allowing the Iranians time to conduct a week-long funeral for the slain Khamenei, killed during the opening day of Operation Epic Fury.

"We gave them a week off for a funeral because we're nice," he said.

Bloomberg News

The funeral ceremonies began in Tehran on Friday, with government representatives from dozens of countries paying respects, and with the public multi-city procession in full swing on Saturday, amid a heavy Iranian security presence.

While the US administration is touting its Iran 'excursion' as a 'win' - the reality is that it is looking more like a quagmire with each passing week.

Iran is no closer to abandoning its nuclear program, it is proclaiming its own control over the Strait of Hormuz under Iranian protocol, and its ruling clerics and IRGC military apparatus are firmly in place. Trump and White House officials had from day one vowed a rapid engagement, saying repeatedly it would end 'fast' - and had even initially touted that regime change would be imminent - but now it's been 127 days since the conflict's start.

Trump in his Rushmore speech didn't dwell long on the Iran (mis)adventure, but moved on rather quickly to themes of American exceptionalism.

"Americans honor excellence; we admire boldness; we respect ambition," Trump said. "We are a nation of dreamers and believers, warriors and explorers, doers and fighters and in every human endeavor Americans see an unfinished competition.

"What is strong can be made stronger. What is fast can be made faster. What is great can be made greater than ever before. And that's what's happening with America."

He continued: "Show us a mountain, and we'll just climb it. Show us an ocean and we'll just cross it. Show us a problem and we will just solve it. Show us a task the world calls impossible and Americans will get it done."

Trump: "We knocked the Hell out of Iran. They're dying to settle. They want to settle so badly. We gave them a week off for a funeral because we're nice." pic.twitter.com/wV13cT3FLp
— The Bulwark (@BulwarkOnline) July 4, 2026

There's a rich irony in Khamenei's public funeral starting on the very day, July 4th, that America celebrates the 250th anniversary of its founding. The founding fathers warned the young Republic that America "goes not abroad in search of monsters to destroy."

John Quincy Adams famously warned, "She might become the dictatress of the world. She would be no longer the ruler of her own spirit."

Tyler Durden Sat, 07/04/2026 - 15:45
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CFPB Orders Remote Employees To Relocate To Washington Or Lose Jobs

2026-07-04T14:19:32.202-07:00

CFPB Orders Remote Employees To Relocate To Washington Or Lose Jobs

Via American Greatness,

The Consumer Financial Protection Bureau (CFPB) has directed hundreds of employees who live outside the Washington area to relocate to the agency’s new headquarters or face losing their jobs, a move that could significantly reduce the bureau’s workforce.

Acting Director Russell Vought notified employees in a memorandum Tuesday that approximately 450 remote workers must commit to relocating to Washington by July 14. Employees who agree to the move are scheduled to begin reporting to the bureau’s new headquarters September 6.

According to the directive, employees who decline to relocate or fail to respond by the deadline will be separated from the agency.

The CFPB’s new headquarters, located at 445 12th St. SW in Washington, previously housed the Federal Communications Commission and currently houses the Pension Benefit Guaranty Corporation. The facility has space for about 550 employees, roughly half of the bureau’s current workforce of approximately 1,100.

The bureau’s employee union characterized the relocation order as a de facto workforce reduction, arguing the requirement is likely to prompt many employees to resign rather than move to Washington.

A limited number of employees appear to have been exempted from the relocation requirement, though the agency has not publicly explained the exemptions.

The CFPB has not publicly commented on the relocation notices.

Tyler Durden Sat, 07/04/2026 - 15:10
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Independence Week

2026-07-03T16:19:28.308-07:00

Independence Week

By Bas van Geffen, Senior Macro Strategist at Rabobank

It was a reassuring week for those who are concerned about central bank independence. At the ECB’s annual conference in Sintra, moderator Sarah Eisen channeled a bit of her inner Beyoncé, asking a panel of central bank heads “To all you [bankers], who are independent, throw your hands up at me.” All four policymakers, including Fed Chairman Warsh, confirmed the importance of central bank independence: “The Fed acted independently before the Supreme Court ruling, and the Fed will continue to do so after the ruling.”

The Supreme Court kept the FOMC’s Cook in her seat for now, pending “due process.” However, that does not bar Trump from continuing to try to fire her. In the same ruling, the court overturned a nine-decades-old precedent to allow the US president more freedom to fire the heads of federal agencies at will.

The justices did acknowledge that the Fed is a special case, and that the president’s power to fire a governor “for cause” was deliberately enacted by Congress to prevent that governors only serve at the president’s pleasure. And, the justices concluded, the burden of proof is not a low bar; since independence is key to the Federal Reserve’s design, they argue that “for cause” should be a substantial threshold.

So, the legal disputes will continue over what constitutes “for cause.” Bloomberg reports that the Trump administration is “doubling down” on their efforts to reshape the central bank, as Trump seeks to place more allies in the FOMC.

But the next line of the chorus was a bit more difficult for some of the panellists to sing along with. “All the [govvies], making money, throw your hands up at me” seems to have struck a nerve with the ECB’s Governing Council.

From the sidelines of the Sintra conference, Reuters reported that the central bank is considering increasing the minimum reserve requirement for banks from 1% to 2%. Tweaking the policy stance does not appear to be the reason. From a monetary policy perspective, the minimum reserve requirement is not a very potent instrument. Instead, it appears to be a cost consideration.

It wouldn’t be the first time that this is discussed. In 2023, policymakers changed the remuneration of banks’ minimum reserves – also motivated by some quick cost savings. Today, the ECB still pays more interest on the excess reserves that banks have deposited with the ECB than the central bank earns on the assets in its QE portfolios.

The result is negative net interest income, and various national central banks have thus been lossmaking in the past couple of years. That’s not an immediate problem for the central bank, but the ECB is certainly mindful of the optics and the political sensitivity. Last month’s decision to hike the policy rate by 25 basis points adds new impetus to that discussion.

At Sintra, Warsh also reiterated his aversion against forward guidance. The Fed chair refused to comment on the implications of economic data releases, or even which data series he prefers. But that doesn’t stop the market from drawing their own conclusions. On that note, US non-farm payroll growth disappointed. Companies added only 57,000 new jobs in June, and the 172,000 print for May was revised down to a much more moderate 129,000.

The employment statistics weren’t any better. The unemployment rate declined to 4.2% from 4.3%, but that was due to a large decline in the labor force. The fall in participation even outpaced the large decline in household employment. So, both the establishment survey and the household survey painted a picture of a weak labour market in June.

As a result, US money markets pared back their pricing of Fed rate hikes somewhat. That may also have given some new support to equities. Renewed AI-optimism also helps. The South-Korean Kospi index leads the charge, which appears to be led by Samsung Electronics. The company is up 8% after reportedly securing an order from Anthropic for customized AI chips.

Turning to geopolitics, negotiations between the US and Iran in Qatar have concluded, without much hiccups. The Washington Post reports that US officials feared that Israel might try to assassinate Iran’s negotiating team during the talks. So much so, that they even sent warning to Tehran. Similar risks may resurface as Iran holds the funeral ceremony for Khamenei. Iran warned both the US and Israel to refrain from attacks during the days of mourning.

Following the talks, President Trump told CNBC that Iran “agreed to just about everything we need.” Yet, reality still seems to be different. The US maintains that Iran will not get any frozen assets until it fulfills its part of the memorandum of understanding. Iran, meanwhile, is still demanding the reverse order of these events. And then there’s the issue of Hormuz tolls – or fees. The US insists that Iran does not impose any control or toll, but several European leaders have reportedly accepted the reality that some fees are unavoidable now.

Tyler Durden Fri, 07/03/2026 - 17:55
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Massive Security Presence For Khamenei’s 'Multi-City' Funeral Amid Hezbollah, Hamas, Taliban, China, Russia Paying Respects

2026-07-03T14:19:18.470-07:00

Massive Security Presence For Khamenei’s 'Multi-City' Funeral Amid Hezbollah, Hamas, Taliban, China, Russia Paying Respects

Via The Cradle

Intensive preparations and security measures took place on Friday for late Iranian supreme leader Ali Khamenei’s massive funeral, as foreign officials and delegations began arriving in the country from dozens of nations to pay their respects.

The heightened security measures, including airspace restrictions and mass deployment of security forces, began this week and extended into Friday.

via AFP

The event is being described as a "multi-city" funeral that will span several parts of Iran, including Tehran, Qom, and Mashhad.

According to authorities, more than 10 million citizens are expected to gather in Tehran alone, with millions more expected to take part in ceremonies in the cities of Mashhad and Qom.

Large-scale commemorations and ceremonies are also set to take place in Iraq, where the late Iranian leader was also revered. Tehran has coordinated these matters with authorities in Baghdad.

The late supreme leader’s coffin arrived at the Imam Khomeini Mosalla in Tehran on Friday.

Iranian authorities are finalizing major security and logistical arrangements ahead of a multi-day state funeral for Supreme Leader Ali Khamenei, following his assassination in a US-Israeli attack on 28 February. Today, the late leader's casket arrived at the Imam Khomeini Grand… pic.twitter.com/JMjoJ8J36e
— The Cradle (@TheCradleMedia) July 3, 2026

Several Iranian officials were seen paying respects to the assassinated leader, including President Masoud Pezeshkian, Parliament Speaker Mohammad Bagher Ghalibaf, and Foreign Minister Abbas Araghchi.

Footage also showed Pakistan’s Prime Minister Shehbaz Sharif reciting a prayer in front of Khamenei’s coffin along with members of his delegation.

Delegations representing Lebanon’s Hezbollah and Amal Movement and the Iraqi resistance faction Kataib Hezbollah were also present.

🇮🇷 As world leaders landed in Tehran for Khamenei’s funeral, they were met with a memorial for the Minab school attack inside the airport.

Messaging doesn’t get more deliberate than this.

Writer: Monicapic.twitter.com/lGZtuANABT
— Mario Nawfal (@MarioNawfal) July 3, 2026

Representatives from over 100 nations are expected to attend and have begun arriving, including from Turkiye, India, Russia, China, Afghanistan, Bangladesh, Iraq, Saudi Arabia, and Bosnia and Herzegovina.

"Ceremonies will continue on Saturday and Sunday with the body lying in state at the Grand Mosalla before a funeral procession through Tehran on Monday. Further rites are scheduled in the holy city of Qom, followed by ceremonies in Baghdad, Karbala, and Najaf in Iraq," IRNA reported.

Pakistani PM Shehbaz Sharif, Army Chief Asim Munir, and their delegation paid their respects to Iran's late Supreme Leader, Ali Khamenei. pic.twitter.com/bCiwMLbMu1
— Clash Report (@clashreport) July 3, 2026

Public farewell ceremonies will officially begin on July 4 at 6:00 am. The late supreme leader is set to be buried in the city of Mashhad on July 9.

The night before the preparations kicked off on Friday, the Commander-in-Chief of Iran's Islamic Revolutionary Guard Corps (IRGC), Brigadier General Ahmad Vahidi, was seen paying respects to Khamenei’s coffin in images released by Iranian media on Thursday evening. General Vahidi had not been seen in months.

Senior leaders from Hezbollah and Hamas have paid their final respects to Iran’s late Supreme Leader, Ayatollah Seyyed Ali Khamenei, during funeral ceremonies in Tehran.

Among those attending was Mahmoud Qamati, Deputy Head of Hezbollah’s Political Bureau, who led a Hezbollah… pic.twitter.com/f6oZInk8N7
— BPI News (@BPINewsOrg) July 3, 2026

An Iranian military official warned the US and Israel on Thursday that any attack on the funeral or during its preparations will be met with a severe response.

"We warn the enemies of Iran, especially the US and the Zionist regime, to avoid any miscalculation and ⁠to think about the harsh retaliation our armed forces would make to any threat and aggression against our country," said Ali Abdollahi, commander of Khatam al-Anbiya Central Headquarters.

IRGC caretaker commander Ahmad Vahidi made his first public appearance since the outbreak of the US-Israeli war on Iran, seen paying respects beside the coffin of Ayatollah Sayyed Ali Khamenei in Tehran ahead of funeral ceremonies beginning July 4.

￭ The ceremony at Tehran's… pic.twitter.com/evi5ehyBKy
— VPol (@VocalPolitics1) July 3, 2026

In February 2025, a squadron of Israeli fighter jets flew over the funeral of late Hezbollah chief Hassan Nasrallah – who was assassinated by Tel Aviv in a brutal attack on Beirut in September 2024.

Khamenei was assassinated by the US and Israel on February 28 – the first day of the latest war on Iran.

Several members of his family were killed in the attack, including his wife, daughter, daughter-in-law, and grandchild. His son Mojtaba, who was injured in that attack, has succeeded him as supreme leader of the Islamic Republic.

Ghalibaf and Araghchi in tears today at the farewell ceremony for Ali Khamenei and his family in #Iran. pic.twitter.com/heCafNagta
— Jason Brodsky (@JasonMBrodsky) July 3, 2026

Khamenei had refused to leave his residence despite warnings about a plot to kill him, telling his security team that he would only permit being moved to a safer location if the same could be done for 90 million Iranians.

Similarly, Nasrallah had also refused to leave Beirut despite warnings prior to his assassination.

Tyler Durden Fri, 07/03/2026 - 16:40
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US Believed Israel Tried To Assassinate Iran's Top Negotiators As Ghalibaf's Plane Made Emergency Landing

2026-07-03T14:19:17.591-07:00

US Believed Israel Tried To Assassinate Iran's Top Negotiators As Ghalibaf's Plane Made Emergency Landing

The New York Times has issued a new report citing unnamed US officials who believe that Israel came close to assassinating Iran's top negotiators Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi.

According to the report, a concrete Israeli threat against Ghalibaf and the FM emerged while they were traveling back to Iran from Islamabad following talks with US Vice President JD Vance on April 12.

Source: Mehr news

Prior to that point, during active fighting, Israel had worked its way through killing much of Iran's senior leadership starting with Ayatollah Ali Khamenei, but questions lingered over whether the country's top negotiators - who have come to represent Tehran on the global stage - could be deemed legitimate targets.

Even as Washington and regional brokers stepped in to try and halt the prospect of runaway conflict, wherein the US would find itself in yet another 'forever war' and quagmire, Israel still floated the potential for more assassinations targeting top Islamic Republic leadership.

The NYT, citing officials, sets up the mid-April near-miss incident as follows:

In April, Mr. Ghalibaf was set to travel to Islamabad to meet with Vice President JD Vance. But Iranian security officials were concerned that Israel would use the opportunity to assassinate Mr. Ghalibaf or Mr. Araghchi to derail the talks, the officials said.

Iranians sought guarantees from the United States, through Pakistani and Qatari intermediaries, that Israel would not carry out any covert operations targeting the Iranian delegation, the officials said.

Pakistani fighter jets escorted the Iranian airplanes carrying a delegation of more than 70 Iranians from the border of Iran to Islamabad and back again when the session was over.

But on the way back to Tehran, an Israeli security threat emerged.

From there, Iranian security forces reportedly notified Ghalibaf's plane of intelligence indicating that Israel planned to attack the aircraft - and the delegation took the warning seriously enough to divert from the original flight path and make an emergency landing in Mashhad, northeastern Iran.

Ghalibaf and his entourage then opted to return to Tehran by land, the report says. The following sounds straight out of a Hollywood script:

Iran’s security forces notified the plane carrying Mr. Ghalibaf back to Tehran that they had picked up intelligence that Israel planned to attack the plane and that two Israeli fighter jets had entered Iran’s airspace from its western border near Iraq, the two officials said.

"Mahdi Mohammadi, a senior adviser for Mr. Ghalibaf, who accompanied him to Islamabad, confirmed this account on his social media page," the NYT notes. "The plane made an emergency landing in the city of Mashhad, Iran’s closest airport to the Pakistani border, and the Iranian delegation traveled some eight hours by land back to Tehran, Mr. Mohammadi and the two officials said."

Some commenters have expressed deep skepticism at the Thursday NYT story...

Well this sounds fake AF
— Emily Schrader - אמילי שריידר امیلی شریدر (@emilykschrader) July 2, 2026

Behind the scenes the Trump administration had reportedly been asking the Israelis to "back off" in order to allow space for negotiations. Certainly, had Ghalibaf or Araghchi been attacked and killed, the situation would have spiraled into all-out war, which still remains a prospect.

Lately the Iranians have urged Washington to continue to 'muzzle' and restrain its more hawkish Israeli ally. FM Araghchi said Wednesday in reference to Trump that "POTUS has committed the U.S. to muzzling its pets in Tel Aviv. If they ignore their master, Iran will school them. Any threat against our People and Leadership will receive Immediate Powerful Response."

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US At 250: Why America Has Been So Successful And Can It Continue

2026-07-03T14:19:16.580-07:00

US At 250: Why America Has Been So Successful And Can It Continue

To mark the 250 year anniversary of the US Declaration of Independence, Deutsche Bank has published a report looking at how the US emerged as a global superpower, and why it’s likely to remain one despite new challenges.

First, DB considers how the US went from being a comparatively small country to the world's pre-eminent global power. These reasons range from the US' natural advantages, like favorable geography, to factors like its institutional stability and risk-tolerant capital markets.
DB then considers the challenges that threaten US outperformance: China’s rapid growth means the US faces its biggest rival since its own emergence as the world’s dominant power. China's rise also coincides with several other issues: the rules based international system that the US helped create is under immense strain; the reserve currency status of the US Dollar is under pressure; and the country's public debt-to-GDP ratio is set to hit new records in the coming years.
Finally, the bank's analysts Peter Sidorov and Henry Allen look at why the US is likely to sustain its outperformance, thanks to a collection of reinforcing advantages. In fact, the US has consistently emerged from challenging periods successfully, be that after the Great Depression, the malaise of the 1970s, and again around the GFC and its aftermath.
The bank concludes with a few lessons for investors and for the rest of the world.

1. The Lessons from History: What underpins America’s Success?

Before delving into the drivers of US success, let us bring with a few highlights of its historical outperformance. Since the United States' founding, the country has achieved remarkable economic success on a whole range of metrics. For one, the US saw rapid growth in population. It started as a comparatively small entity at its founding, but it quickly surged to overtake the large European countries in the mid 19th century and has continued to outpace them since. And with more people, it was little surprise that US GDP rapidly outpaced other countries too.

This success extends beyond GDP growth. Unlike France or Germany, the US has never had a bout of hyperinflation in its history, with its currency maintaining its value comparatively well. Meanwhile, the US’ long-term equity performance has also been very strong. In the time since equity data is available from the late-19th century, real returns have outpaced the UK and Germany by substantial margins

So what has caused this incredible success?

The first reason, and one of the most critical historically, has been the US’ political and institutional stability. Clearly, there have been moments of intense turmoil, most notably with the Civil War in the 1860s. Its historical path also should not be over-romanticised, with US territorial expansion during the 19th century having many similarities to that of the Old World colonial empires. Nonetheless, the US is incredibly rare in that its political system is recognizably the same over the last 200 years. This relative stability and early development of property rights provided a fertile environment for long-term investments, which in turn has aided economic growth over the centuries.

The second reason is its geographic advantages. The US possesses vast arable land, navigable rivers, large coastlines, and access to two oceans. It therefore found itself more insulated from the destructive effects of the world wars, with productive capacity not impacted in the same way. Moreover, the country borders Mexico and Canada, who in both population and GDP terms are much smaller than the United States, meaning it didn’t face the security risks that many European powers faced over the 19th and early-20th centuries.

The third reason has been its abundance of energy resources, particularly relative to Europe. In large part a corollary of its geographic strengths, this energy abundance has given the US several advantages. First of all, lowering costs for households and industry, which has helped the economy be more resilient against geopolitical shocks. Moreover, with the US becoming a net energy exporter in recent years, it also strengthens the external position.

The fourth reason for the US' relative success was that its main competitors in Europe were deeply affected by the world wars and wider political turmoil. Their productive and financial capacity was severely degraded, with the destruction causing huge loss of life as well. Even among those who survived, many scientists, engineers and entrepreneurs left for the US in the first half of the 20th century. Whilst not a US “success” as such, this meant that on a relative basis, the US’ divergence widened considerably. Indeed, in the first half of the 20th century, the US economy grew by 5.7 times, Germany by 3.4 times, the UK by 2.0 times, and France by 1.8 times.

The fifth reason for the US’ outperformance is scale. It has a large domestic market of over 300m people, with high average incomes, a common language, and low internal barriers to trade. This has given firms the ability to reach a large-scale domestically before expanding abroad. Indeed, it is notable that 8 of the world’s 10 largest firms are based in the US, whereas none are in Europe.

The sixth reason is the structural advantage of the US Dollar, which remains dominant in global trade and FX reserves. This dollar demand matters because it lowers borrowing costs and raises demand for US Treasuries. In turn, it leaves the US with an exceptional capacity to run bigger fiscal and external deficits without facing a funding crisis, and expands the geopolitical leverage that the US possesses. This has been dubbed the “exorbitant privilege”, and has been a major advantage in recent decades.

The seventh reason is financial depth. The US has a large banking system, but also a wide range of non-bank financing, which means startups have access to other sources of capital. In fact, in the decade from 2013 to 2023, annual venture capital financing was 0.7% of GDP in the US, compared to just 0.2% in the EU. This financial depth is important because innovative firms can often be loss-making for lengthy periods, so countries with bigger pools of patient risk capital are better placed to commercialise new technologies.

The eighth reason is its self-compounding advantages in education and research. The US has many of the world’s strongest research universities, including 7 of the top 10 in the Times Higher Education World University Rankings for 2026. Moreover, this research also has an economic angle, as scientific discoveries feed into startups, workforce training and industrial scale-ups. In turn, this becomes self compounding, because top global talent is attracted to the US, and ensures it remains at the forefront of new sectors such as artificial intelligence.

The ninth reason is its pro-business architecture, including a greater tolerance of business failure than many European systems. For instance, Chapter 11 reorganisation is designed to preserve and restructure viable firms rather than liquidate them. This more positive approach to business failure ties into the empirical literature, which suggests that more debtor-friendly and efficient insolvency frameworks are associated with greater entrepreneurship and innovation.

The tenth reason is adaptability. The cultural acceptance of failure and capacity to reinvent itself have boosted US ability to adapt to the changing world. This has allowed it to navigate repeat boom-and-bust cycles, as well swings of the policy pendulum – between openness and isolationism, between protectionism and free trade – without threatening overall the institutional stability we highlighted above. And while capitalism has been a key underlying driving force, it is pragmatism rather than ideology that have driven continued success over time.

It is also important to note that these advantages do not play out individually, but are mutually reinforcing, with the interaction between them allowing the US to benefit from network and externality effects that few if any countries can match.

US history has been marked by challenges and recoveries

That said, this success story was far from a straight line. US outperformance has frequently been questioned, yet it has repeatedly defied the sceptics, including at numerous points in the last century.

Right from the country’s founding, questions were raised about its long-term potential, and in the Civil War of the 1860s, the nation’s survival was at stake after less than a century.

Even over the past 100 years, which has ostensibly been a period of US pre eminence, there have frequently been doubts. For example, after the Wall Street Crash of 1929, the Great Depression saw unemployment peak above 25% and remain above 10% for an entire decade. The associated stock market collapse saw the S&P 500 fall by -86% from peak-to-trough, not reaching its 1929 peak again until 1954. This was a global shock, but it undermined faith in the US system of freemarket capitalism.

However, the country eventually pulled out of the slump. That started with Franklin Roosevelt’s New Deal program, which helped to restore confidence and economic activity. Then the start of WWII saw economic activity surge even further, particularly as there wasn’t fighting on US soil. By the end of WWII, the US had never been in a stronger position relative to its peers, not least with Europe having to rebuild after the war.

Similar doubts were clear as the US grappled with the various crises of the 1960s and 70s. This period saw major political turmoil and multiple assassinations, including President Kennedy in 1963, his brother and presidential candidate Robert Kennedy in 1968, and civil rights leader Martin Luther King Jr. in 1968. A few years later, Richard Nixon became the first president to resign from office amidst the Watergate scandal. US military power was also facing questions at this time, as the Vietnam War turned into a protracted conflict that also faced substantial domestic opposition.

Then on the economic front, inflation started to gather pace from the late-1960s, surging further after the first oil shock of 1973, leading to a 16-month recession. Measures were imposed to conserve energy, including the National Maximum Speed Limit, which wasn’t repealed until 1995. Then in 1979, a second oil shock drove inflation up again.

This turmoil raised questions about whether policymakers could effectively tackle the crises of the day. In 1979, President Jimmy Carter delivered what was widely referred to as the “malaise” speech, although it was actually called “A crisis of confidence”. He said there was “growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.” He spoke of a “growing disrespect” for institutions, and said how the public often “see paralysis and stagnation and drift.” Even the US president was acknowledging that the country was facing huge issues.

Nevertheless, the US then recovered strongly into the 1980s and 90s. Inflation was tamed, albeit with drastic monetary tightening, and the economy saw rapid growth once it recovered from the early 1980s recession. In 1991, the dissolution of the Soviet Union marked an end to the Cold War, and the 1990s were widely considered a unipolar moment where the US was left as the unmatched global superpower. So
once again, the US came through a period of doubt over its success.

But the unipolar moment proved brief, as the global financial crisis cast fresh doubt over US prestige. Unemployment surged above 10%, and the economy entered an 18-month recession, the longest since the Great Depression. Moreover, the subsequent recovery was very sluggish, with growth rates well below those of previous decades. Economists resurrected the idea of “secular stagnation”, originally put forward by Alvin Hansen in the 1930s, suggesting the US faced an era of permanently slower growth.

These questions about US pre-eminence came as China was growing rapidly at the same time. In 2005, China’s GDP (in USD terms) was still only 18% of the US total, but that surged to 62% by 2015. That was an incredible shift in relative economic weight in the space of a decade.

But for all the doubts of the 2010s, the secular stagnation narrative has since disappeared in the 2020s. The US economy bounced back remarkably quickly from the pandemic, aided by huge quantities of stimulus that were far larger than 2008. Moreover, recent years have seen the US at the forefront of AI developments, raising hopes of a new productivity surge, with its lead extending over the other advanced economies. So yet again today, the US has emerged from a rockier period around the financial crisis and its aftermath, into a relatively strong position that includes the highest GDP per capita of any G7 country.

2. The Challenges Ahead: Why the US now faces a crucial decade

The above discussion highlights how the US has repeatedly overcome periods of doubt, with predictions of American decline proving premature each time. However, in several respects today’s challenges feel more acute. The US is not as dominant a geopolitical power as it used to be, given China’s emergence as a serious rival. Moreover, its debt-to-GDP ratio is on the verge of new records, meaning its fiscal space is far more constrained to deal with new challenges. As such, the next decade will offer a further test of US adaptability, and whether the political system can respond to these interacting pressures.

What are the biggest near-term challenges for the United States?

Since the end of the Cold War, the most significant adjustment has been the end of the unipolar moment and China’s emergence as a genuine peer competitor, which is different in scale and capability from any rival the US has faced since the late-19th century. China has already overtaken the US on manufacturing output, merchandise trade, and GDP (on a PPP basis), and is rapidly closing the gap in advanced technologies and semiconductors. The US retains decisive leads in nominal GDP, capital markets depth, the dollar system, and frontier innovation, but the gap has narrowed substantially.

The military balance tells a similar story. US defense spending remains roughly three times China's at market exchange rates, but the PPP-adjusted gap is far smaller. More broadly, the gap between US military spending and other major economies has shrunk over the past 15 years. That comes as the proliferation of low-cost precision and autonomous systems is eroding the historic advantages of expeditionary power projection, raising the cost of underwriting the global security order the US has provided since 1945.

We can also see the emergence of Chinese leadership in a whole range of areas. Among others, China accounts for a third of all global manufacturing activity, with a sector as large as the US, Japan, Germany and South Korea combined. The cost of electricity there is a fraction of what people pay in Europe or the US. And just as the US dollar’s role has come under pressure, China is strengthening the global influence of the RMB, in part because of its vast domestic savings surplus.

The emergence of China comes as the rules-based international system designed and led by the US for eight decades is under strain from multiple directions. Admittedly, these strains have not just emerged. Even before the Trump administration, emerging markets had grown in relative size and become less willing to accept Western-designed institutions. Meanwhile, the political support for globalisation has frayed across advanced economies.

But recent US policy choices have raised profound questions about the future global order. In 2025, the US effective tariff rate rose to its highest since the 1930s, representing the largest peacetime trade barrier increase in a century. Strategically, the US alliance network has been an enormous economic asset, underwriting dollar dominance, securing trade routes, and providing the soft-power foundation for global rule-setting. Yet US membership of NATO has become an openly debated question, and tariffs have been raised on US allies as well as rivals.

This uncertainty has contributed to growing pressure on the US’ status as the global reserve currency. The dollar's share of global reserves has fallen from roughly 72% to 58% over two decades — a gradual decline rather than a collapse, but a clear trend nevertheless. The reduction has accrued to a basket of "non traditional" reserves and to gold, which has seen the largest central bank buying programme in over half a century. In addition to the overall transition away from a 1990s unipolar world, specific factors have added to the challenges that dollar dominance faces. This includes the weaponisation of the dollar through sanctions — notably the freezing of Russian central bank reserves in 2022, which gave non Western-aligned countries a strategic incentive to develop alternatives even at material cost — as well as the structural decline of the petrodollar arrangement as energy trade has fragmented and the US has become a net oil exporter.

Irrespective of the cause, were the US “exorbitant privilege” to erode further, this would bring major costs to the US and allow other currencies to benefit (see note on the potential benefits for the euro). As mentioned earlier, the structural subsidy that the US receives from its reserve currency status includes lower borrowing costs, the ability to run persistent external deficits without the
discipline imposed on other economies and the advantages of the dollar being the unit of account for global trade, commodities and cross-border lending.

None of this implies imminent displacement. No alternative is remotely ready to assume the dollar's role. Network effects and inertia in trade invoicing and central bank balance sheets all favour continued dollar dominance. Indeed, the pound sterling held a prominent role for many decades after the US had emerged as the world’s largest economy. So the realistic risk for the next decade is not collapse but gradual erosion, with a slow loss of the privilege margin that has boosted US economic performance.

The US fiscal trajectory is the most plausible catalyst to accelerate that erosion, and for institutional investors is the single most concrete macroeconomic risk facing the United States. Over the last four years since 2022, the federal deficit has been consistently running at around 5-6% of GDP. Those are the highest peacetime deficits in US history outside of a major recession, and this is happening in a full employment economy. Debt held by the public is set to surpass 100% of GDP this year, and the CBO projections point to an unsustainable trajectory. Interest payments on the federal debt now exceed defense spending and are the fastest growing line item in the budget.

Most significantly, the binding constraints are now set to arrive within the next decade. The latest estimates project that the Social Security trust fund will be depleted by late 2032, which would trigger an automatic benefit cut absent legislative action. The Medicare hospital insurance trust fund faces a similar reckoning shortly after. So while the unsustainability of the US public debt trajectory has been in the headlines for many years, these events are now more imminent – ones that the next US administration that takes office after the 2028 election will have to face.

To be fair, the fiscal challenge is far from arithmetically catastrophic – a combination of AI-driven productivity growth and moderate fiscal consolidation could lead to significant improvements in the long-term debt profile. The difficulty is whether the political system can deliver such an outcome. Past fiscal consolidations required bipartisan compromise. Yet the current political environment offers little prospect of similar cooperation, with polarisation a mounting issue. Attempts in recent decades (like the Simpson-Bowles Commission in 2010) have failed to gain sufficient support.

In the meantime, demographic trends are compounding both the fiscal and innovation challenges. The US fertility rate has fallen to 1.6 and the dependency ratio is set to deteriorate sharply as the baby boomer cohort fully enters retirement. Even though the population is comparatively younger than many other developed countries, it is still ageing. For example, the UN projects that the share of the US population aged 65 and over will rise from 19% in 2026 to 22% by 2036, rising further to 28% by the end of the century.

An important connecting driver across fiscal, political and demographic challenges has been a rise in inequality. Its steady rise since the 1980s has gone hand-in-hand with a rise in political polarisation, especially once combined with the economic shock that followed the GFC and the sluggish recovery in its aftermath. A corollary of this is that the traditional “American dream” of social mobility has found itself under mounting pressure. The US now has lower intergenerational income mobility than almost all DM economies, which risks corroding the social contract on which open markets and creative destruction depend. It has also led to negative social effects, notably a widening of the life expectancy gap between Europe and the US since the 1980s.

3. Why the US Should Remain a Long-Term Success Story

The challenges facing the US are real, but the weight of evidence still suggests it will remain the world's leading economy for the foreseeable future. Its collective structural advantages remain difficult to replicate, and it retains the same adaptability that’s helped it recover from previous difficulties.

The starting point is that the US should remain the world's largest economy well beyond the critical decade coming up. A global demographic slowdown means that previous assumptions of rapid population and economic growth in emerging markets no longer look inevitable. Conversely, US economic growth has generally surprised on the upside since the pandemic, with the “secular stagnation” narrative of the 2010s quietly fading. Indeed, the US economy has successfully weathered multiple shocks in recent years, ranging from rapid Fed rate hikes, to tariffs, to the Iran conflict. Moreover, there is further upside potential to productivity growth (and hence economic growth) from the US’ significant lead on AI.

This AI boom is the latest expression of the US capacity for reinvention that stretches back through its history: a willingness to embrace disruptive, capital intensive technology and absorb the dislocation it brings. AI is one of many new technologies that have often led to economic volatility (and boom-bust cycles on occasion), but whose benefits have delivered broad, economy-wide productivity gains over time. That was clear historically with canals, railroads, and electrification, and also with more recent innovations like the internet.

Thus, the US is well-positioned to lead the AI cycle for several mutually reinforcing reasons: an innovation-friendly ecosystem of research universities and venture capital; a cultural and institutional acceptance of the boom-bust investment cycles that frontier technology requires; the deepest capital markets in the world to fund it; and abundant domestic energy. The shale revolution has transformed the US into a net energy exporter, and cheap, plentiful power is now a decisive input advantage in the race to build and run data centres. Few competitors can match this combination.

The AI boost comes at a time when the US has already re-established its productivity outperformance in recent years. Since the pandemic, US productivity growth has risen above its post-1970 average, which in turn is boosting GDP and the revenue base. The potential fiscal arithmetic is powerful. According to CBO estimates, if productivity growth were just half a point above their baseline in the coming decade, then debt held by the public would only rise to 110% rather than 120% by 2036 (see the following DB note on the US debt outlook for more). However, productivity gains alone are unlikely to resolve the fiscal issue, in part because the political incentive is to spend the fiscal dividend rather than save it and in part given the uncertainty of how the gains would be distributed — a theme we return to below.

On demographics, the US also enjoys a clear advantage over its principal rivals. China's working-age population will begin a pronounced contraction in the 2030s, with Europe in aggregate also seeing a decline, whereas the US will see moderate growth under a normalised migration trend . With a growing working-age population, the US would avoid this drag from a shrinking labor force. Moreover, the US has had a consistent capacity to absorb immigration at levels few other developed economies have managed. And with the demographic slowdown now reaching emerging markets, few major economies now have clearly better longterm demographic potential than the US. For instance, while India will maintain positive demographic momentum over the next couple of decades, with its fertility rate now below replacement rate, its advantage will shrink by the middle of the century.

Even on the financial side, whilst the dollar’s role has come under pressure, it still retains a dominant and unrivalled position. The network effects that sustain it are exceptionally strong, and there is no obvious successor in the wings, unlike when the dollar overtook sterling in the interwar period. The depth and liquidity of US capital markets, inseparable from the dollar's role, are themselves a structural draw that even US rivals rely upon. Indeed, it is notable that the asset seeing a major increase in official reserves is gold, rather than another currency. And while new payment technologies could bring new risks to dollar dominance, US dominance in the stablecoin space will help limit these risks for the foreseeable future.

The Conditions for Continued Success: Pitfalls to Avoid

Yet much as there are credible reasons for US outperformance to continue, this cannot be taken for granted.

The first key challenge is to ensure that the gains from future technological growth are broad-based, as excessive concentration risks adding to political and institutional dysfunction. We know from history that technological progress does not automatically deliver broadly shared prosperity. For instance, during the early Industrial Revolution, aggregate output rose for decades as wages for ordinary workers stagnated, a period that has been dubbed “Engels’ pause”. This offers a cautionary lesson on AI, and with the labor share of income in the US already near historic lows today, a further deterioration risks intensifying the social and political backlash building against the technology. It’s important to avoid that, as a backlash against technological advances would in turn negate its gains. A related risk is that if AI gains accrue to capital through profit margins while labor is shed, this would negate the fiscal benefits from higher productivity given the focus of the US tax system on labour taxation.

This brings us to the second challenge – managing the fiscal adjustment and the related timing risk. The US is currently running budget deficits at levels previously unprecedented outside of a major recession or war. The ideal scenario would be some sort of bipartisan consensus, as in the early 1990s, to deal with the fiscal challenges ahead in a pre-emptive manner. However, political incentives to reduce deficits appear limited, raising the prospect that it will be up to markets to ultimately force consolidation. The risk is that this could come at a moment of heightened vulnerability, such as a wider economic crisis or recession, resulting in a harsher correction. A degree of financial repression, especially if combined with genuine consolidation, could end up playing a role in managing the debt burden. But a full embrace of that route — in an extreme case, via debt monetisation by the Fed — would merely accelerate the erosion of the dollar's special status.

The third challenge is protecting the US’ institutional foundations. Institutional stability (and the consistent rule of law and secure property rights underpinning it) have been the bedrock on which the capital-markets and dollar advantages ultimately rest. If that eroded over the coming decades, it would create a more uncertain climate for long-term investments and dampen the international appeal that has attracted top talent and financial capital to the United States.

The fourth challenge is a global one, in that the US has benefited immensely from the post-war system of US leadership. However, that settlement has come under increasing strain in recent years, particularly as emerging markets that have grown in size seek greater influence in global affairs. After all, the US only makes up around 26% of global GDP in USD terms. But with its allies, the influence of the US increases substantially. For instance, the G7 as a whole makes up 44% of global GDP, and if you include further US allies such as Australia and South Korea, its effective alliance network still comprises more than 50% of global GDP in dollar terms. With the US standing as the clear and unsurpassed leader of this group, maintaining this network has enormous benefits.

What will the US’ ongoing success imply, and what are the key takeaways?

To wrap up, let us briefly consider two concluding questions. First, what does the above analysis mean for investors looking at the US over the long term. And second, what lessons can the rest of the world learn from the success of the US model over time.

For those allocating capital, the case for the US as the world's pre-eminent investment destination remains intact. An investor into the US buys a bundle that is hard to replicate – productivity leadership, the deepest and most liquid capital markets in the world, the rule of law that underpins them, and the flexibility conferred by the dollar's reserve role. That combination should persist. However, the risk premium around the US has risen, as fiscal strains and a wider geopolitical reshuffling point to a wider distribution of outcomes and bigger tail risks.

In practice, this could play out in several ways. First, the dollar's "exorbitant privilege" is unlikely to disappear within the next decade, but gradual diversification of both reserves and payments is real and persistent. Already, the dollar's global importance has ebbed in recent years. These growing question marks around the dollar’s status are the first risk. Second, US equity leadership is now heavily concentrated in a handful of AI-exposed names, so the bull case increasingly rests on a small group of companies, again widening the tail risk outcomes. And third, there is a tail risk of a correlated scenario where a fiscal reckoning coincides with a correction in the AI investment cycle, pressuring equities, duration and the dollar simultaneously, and undermining the diversification that normally cushions portfolios. This is a scenario worth planning for, even if it is not the central case.

What can the rest of the world learn from the US’ success? In part, it is simply down to luck, including geographic advantages and an abundance of resources, such as energy, that cannot be replicated elsewhere. However, there are several features that could be reproduced elsewhere.

The first is its resilient institutional architecture, with a legal system and property rights that have provided a favourable environment for long-term investment. Although the US has faced severe crises in the last 250 years, including a civil war, its system of government has been recognisably the same throughout that time.

Second, it has a well developed financial system, and a tolerance for risk that’s enabled the US to embrace new technologies and emerge quicker from downturns, with resources shifting quickly to new and productive sectors. US history demonstrates how suppressing volatility and preventing resource re-allocation can be counterproductive over the long term.

Third, a key component of US success has been its adaptability to different contexts, and its ability to leverage existing strengths when under pressure. These range across its energy resources, capital markets, universities, military power, reserve currency status, and technological leadership. Even when one point has appeared under threat, others have been able to compensate.

More in the full file available to pro subs.

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US Nuclear Regulator Proposes Changes To Nuclear Safety Standards

2026-07-02T14:19:42.805-07:00

US Nuclear Regulator Proposes Changes To Nuclear Safety Standards

Authored by Jill McLaughlin via The Epoch Times,

A U.S. nuclear regulatory agency proposed sweeping reforms July 1 to modernize nuclear reactor licensing and safety practices, shifting away from a global radiation measurement standard after 50 years.

The cooling towers for units 4 (L) and 3 (R) are seen at Plant Vogtle, operated by Georgia Power Co., in east Georgia's Burke County near Waynesboro, Ga., on May 29, 2024. Arvin Temkar/Atlanta Journal-Constitution via AP, File

The regulatory changes are expected to make it faster and easier to build more nuclear reactors to meet increased energy demands.

The Nuclear Regulatory Commission (NRC), an independent federal agency that oversees licensing and regulation of nuclear energy and radioactive materials, expects the changes will streamline regulations without lowering safety standards.

"NRC's regulations have not kept pace with new technologies and our energy needs," Chairman Ho Nieh said in a July 1 statement. "This proposed rule strips out rigid frameworks and unnecessary conservatism to accelerate the safe deployment of new reactors and expand existing capacity across America."

The effort is part of President Donald Trump's executive order, "Ordering the Reform of the Nuclear Regulatory Commission," signed May 23, 2025, calling for his administration to reform the agency's regulations and operations to achieve dominance in the global nuclear energy market.

The order also sets out goals to quadruple American nuclear energy capacity from about 100 gigawatts in 2024 to 400 gigawatts in 2050.

To get there, the order calls for adopting science-based radiation limits and reconsidering reliance on the decades-old framework of the linear no-threshold model for radiation exposure and the "as low as reasonably achievable" (ALARA) standard.

"Those models are flawed," Trump's order stated.

The agency was directed to consider adopting determinate radiation limits and consult with the Department of Defense, Department of Energy, and the Environmental Protection Agency.

Changing the model would represent the first major shift in U.S. nuclear policy in half a century.

Critics say that the deregulation could prioritize economic growth over public health.

Changing the radiation model has drawn criticism from nuclear safety expert Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists.

Last year, Lyman told the agency in July 2025 there was "absolutely no technical or practical basis" for changing the agency's use of the ALARA principles in its radiation protection regulations.

A report last year by the Conservative Coalition for Climate Solutions found the change would be a step in the right direction for nuclear energy.

Using ALARA standards is enormously costly, raising the price of building and operating nuclear plants by billions of dollars, the 2025 report found. The standards have also created public phobia and misinformation that "any radiation is harmful," according to the report by the coalition's Nick Loris and Prasanna Pydipalli.

Other countries - France and South Korea - are shifting toward threshold-based models using data collected from worksites but haven't yet made the change, the report found.

The coalition concluded that adopting the new threshold standard for radiation would unleash the potential of nuclear innovation.

"By moving from outdated fear-based models to proportionate, risk-informed regulation, the U.S. can lead the next era of safe, reliable, clean, and globally competitive nuclear energy," Loris and Pydipalli wrote.

The commission issued proposed rules to modernize reactor oversight and radiation protection, and issued draft text to reshape its environmental review process under the National Environmental Policy Act.

The agency's proposed changes would give nuclear power plant operators more flexibility in evaluating radiation doses to workers and the public using more up-to-date methods.

Jay Timmons, president of the National Association of Manufacturers representing 13 million workers, commented on the announcement.

"Building more nuclear reactors here at home is how we secure America's energy future and unleash American energy dominance," Timmons posted on X on July 1.

The U.S. Department of Energy's "Reactor Pilot Program shows what is possible when policymakers embrace innovation instead of standing in its way," Timmons said.

Energy Secretary Chris Wright testifies before the Senate Armed Services Committee hearing on the budget request for the Energy Department on Capitol Hill in Washington on May 13, 2026. Manuel Balce Ceneta, File/AP Photo

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Warren Pushes Progressive Agenda In Senate Primaries As Schumer Prioritizes Path Back To Majority

2026-07-02T14:19:41.780-07:00

Warren Pushes Progressive Agenda In Senate Primaries As Schumer Prioritizes Path Back To Majority

Senate Minority Leader Chuck Schumer and Sen. Elizabeth Warren are engaged in a high-stakes contest for influence over the future direction of Senate Democrats, with the Massachusetts progressive working to reshape the caucus through targeted primary support while the New York leader focuses on expanding the map to retake the majority.

Warren has thrown her weight behind several challengers who have explicitly said they would not support Schumer remaining as leader if Democrats regain control. She has framed her involvement as a response to voter demand for bolder action on economic issues and systemic change, pointing to recent primary successes by candidates aligned with New York City Mayor Zohran Mamdani as evidence that the party's base is ready for a sharper break from the status quo.

In comments to The Hill, Warren highlighted the outcomes in New York's House primaries, where three Mamdani-backed candidates prevailed against establishment-backed incumbents. She described the results as a reflection of broader voter sentiment rather than isolated events. "It says more about the state of voters. Voters want change. They want people who have clear ideas about how to make their lives better and to know that they will fight for them," Warren said.

Those New York victories were widely viewed as setbacks for the Democratic establishment. The wins featured strong showings by progressive and democratic socialist candidates and included moments of open frustration with party leadership, such as crowds at victory events chanting "You're next" when House Minority Leader Hakeem Jeffries appeared on screen. Warren had endorsed Mamdani during his successful 2025 mayoral bid; Schumer did not publicly support him.

Watch as supporter chant "You're Next" at Hakeem Jeffries during Claire Valdez' victory party last night after all three Mamdani-endorsed socialists won their Congressional races.

The Democrat Party is now the Party of socialism - and the establishment Dems can't put that genie… pic.twitter.com/anlIZFq0n7
— Conservative Brief (@ConservBrief) June 24, 2026

Schumer, a prolific fundraiser, has concentrated on recruiting and backing candidates he believes have the best shot at winning competitive general elections. A spokesperson for the leader emphasized that his sole priority is "taking back the Senate" to block President Trump's agenda and deliver results for Americans, arguing that recent recruitment efforts have created a credible path to majority status that few anticipated a year ago.

The friction between the two senators has become harder to downplay. Democratic strategist Steve Jarding noted that successful Warren-backed candidates would likely serve as "soul mates" on key issues, elevating her standing within the progressive wing of the caucus.

An anonymous Democratic senator aligned with Warren described to The Hill growing unease among progressives that Schumer and DSCC Chair Kirsten Gillibrand are too closely tied to corporate interests. The senator singled out Gillibrand's role in advancing cryptocurrency deregulation legislation as particularly problematic and questioned Schumer's recruitment of 78-year-old Maine Gov. Janet Mills to challenge Sen. Susan Collins. The source called Mills a "conservative, business-oriented Democrat" lacking grassroots energy at a moment when the party's base wants the system disrupted, drawing parallels to concerns raised after President Biden's 2024 debate performance.

Warren has endorsed multiple Senate primary candidates who have distanced themselves from Schumer's leadership, including Graham Platner in Maine, Lt. Gov. Juliana Stratton in Illinois, and state Sen. Mallory McMorrow in Michigan. She has also backed Lt. Gov. Peggy Flanagan in Minnesota and Zach Wahls in Iowa, neither of whom has committed to supporting Schumer. Schumer, by contrast, backed Mills in Maine and Rep. Haley Stevens in Michigan.

In Iowa, the super PAC VoteVets - historically aligned with Schumer - spent roughly $10 million supporting Josh Turek, who defeated Wahls. Schumer and Gillibrand issued a joint statement celebrating Turek's nomination as putting the seat "firmly in play" for November.

Warren has supplemented her candidate endorsements with substantial fundraising, contributing a total of $800,000 to state Democratic parties in six battleground states this cycle: Alaska, Georgia, Maine, Michigan, North Carolina, and Ohio.

She has defended her choices, particularly her support for Platner, arguing that he connects directly with Mainers struggling economically and is committed to fighting corruption and lowering costs in Washington.

Despite the visible tensions, most Democratic senators do not expect Warren to mount a formal challenge to Schumer's leadership after the midterms. She is seen primarily as a policy advocate rather than someone positioned to manage a large and diverse caucus. A Warren spokesperson confirmed she "has no interest in being the Senate Democratic leader." When asked directly about the possibility, Warren laughed softly and replied: "I want to do everything that I can to help working families. We need a Democratic Party that's ready to be in the fight."

Tyler Durden Thu, 07/02/2026 - 16:40
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Ex-CIA Chief John Brennan Sues Trump, Admin Officials Over Allegedly Vindictive Investigations

2026-07-02T14:19:41.027-07:00

Ex-CIA Chief John Brennan Sues Trump, Admin Officials Over Allegedly Vindictive Investigations

Authored by Timothy Frudd via The Epoch Times,

Former CIA Director John Brennan is seeking a court order requiring the Trump administration to retain records related to allegedly vindictive investigations into him and his involvement in probing alleged Russian interference in the 2016 presidential election.

Former Director of the U.S. Central Intelligence Agency (CIA) John Brennan testifies before the House Permanent Select Committee on Intelligence on Capitol Hill in Washington on May 23, 2017. Alex Wong/Getty Images

While the Justice Department hadn't formally brought an indictment against Brennan, his lawsuit noted that it had undertaken grand jury investigations in recent months. He accused prosecutors of abusing their authority and said there was reason to believe the administration wasn't preserving records as required under law.

Brennan said the judge's order was necessary to preserve his constitutional rights and evidence that he could use to prove vindictiveness in a would-be prosecution.

"This Administration has adopted a policy of using criminal process and prosecution to punish the President's perceived adversaries," Brennan's legal team wrote in the court filing.

"It is against this backdrop that former Director of the Central Intelligence Agency, John O. Brennan ... is being vindictively singled out for investigation and prosecution."

The lawsuit filed by Brennan's legal team on Wednesday names President Donald Trump, acting Attorney General Todd Blanche, FBI Director Kash Patel, CIA Director John Ratcliffe, White House chief of staff Susie Wiles, and other government officials as defendants.

A Justice Department spokesperson told The Epoch Times, "While we cannot comment on the existence, or lack thereof, of an investigation, it is certainly rich that John Brennan is accusing anyone of a 'retribution campaign.'"

Brennan's lawsuit focused on two investigations. One centered on an alleged conspiracy to deprive Trump of his rights by probing alleged Russian interference. Another was related to statements he made to Congress regarding an intelligence community assessment of Russian influence during the election.

Brennan's legal team said Justice Department officials have "taken steps that clearly violate well-established norms and limitations on prosecutorial conduct" as part of the Trump administration's investigations.

"Those overreaching actions have violated Director Brennan's constitutional rights and will serve as the basis for challenges to any resulting charges, including motions to dismiss any indictment on the grounds that it is the result of selective and vindictive prosecution," they wrote.

The lawsuit noted that the examination of prosecutors' emails, texts, and other communications would allow the courts to determine if decisions were based on legitimate law enforcement concerns or an effort to "selectively" and "vindictively" prosecute the former CIA director.

"There is a very real risk, however, that some of these materials and communications will no longer exist by the time any such challenges are filed and the court hears them," the lawsuit stated.

Brennan's legal team cited technology changes that it said do not ensure the routine preservation of communications and "ample evidence in the public record" of Trump administration officials failing to meet legal obligations to preserve records as the two reasons for its concern.

The lawsuit said the Trump administration is obligated to preserve records and evidence that would be relevant in a potential challenge if Brennan were indicted. Brennan's legal team pointed to both the Presidential Records Act and the Federal Records Act as regulations covering many of the communications and materials involved in the two investigations.

Brennan was previously referred for criminal prosecution by the House Judiciary Committee over his connection with an investigation that was launched in 2016 into suspected Russian influence on Trump's presidential campaign. Rep. Jim Jordan (R-Ohio), chairman of the House Judiciary Committee, said in October 2025 that Brennan allegedly "knowingly made false statements during his transcribed interview" in May 2023 and that his testimony on the 2016 investigation into Trump included "numerous willfully and intentionally false statements of material fact."

In the House Judiciary Committee's criminal referral, Jordan wrote, "Brennan falsely denied that the CIA relied on the discredited Steele dossier in drafting the post-election Intelligence Community Assessment."

Brennan previously accused the Trump administration in December of attempting to judge shop, a practice used to file a lawsuit in a court with a judge likely to give a favorable ruling. The former CIA director asked U.S. Chief Judge Cecilia Altonaga of the Southern District of Florida to prevent U.S. District Judge Aileen Cannon, who dismissed the classified documents case against Trump in 2024, from being involved in future proceedings.

Tyler Durden Thu, 07/02/2026 - 16:20
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Iran Runs Into Big Problem: No Buyers For Its Oil, As Full Tankers Pile Up Off China

2026-07-02T14:19:40.231-07:00

Iran Runs Into Big Problem: No Buyers For Its Oil, As Full Tankers Pile Up Off China

Iran was euphoric when as part of the Trump MOU, it got permission to flood the world with its oil after Trump effectively eliminate sanctions that had been in place for 40 years. However, it has quickly run into another, potentially far bigger problem: as the armada of Iranian oil tankers exits the Persian Gulf, it is now struggling to find buyers before the expiry of a 60-day window granted by Washington,

According to Vortexa data and Bloomberg calculations, there are more than 58 million barrels of Iranian crude and condensate was on-the-water as of July 1, yet more than 90% has no clear destination. The vessels are either indicating "for orders" or Singapore as their next port of call, a sign they may conduct ship-to-ship transfers in the Malacca Strait.

A failure to quickly sell the crude will not only deprive Tehran of much-needed revenue, but more importantly, will weaken its hand in the ongoing negotiations with Washington. The Islamic Republic has until mid-August to find buyers after the US lifted sanctions on the oil in the middle of June and ended a blockade of Iranian ports, part of an interim peace deal.

And here is the culprit : demand from Chinese independent refiners - Iran's main customers prior to the conflict - has been muted as the sector's run rates crash to a nine-year low. China's state-owned refiners have also stayed on the sidelines, citing concerns over the ability of banks to finance any deals.

Translation: as we suspected a month ago, China's economy is in far worse shape than telegraphed, and as a result it does not need Iranian oil (what oil it does need it just sources from its massive strategic reserves).

In Early June we said that confirming our recent reporting on China's oil demand collapse, crude oil imports to China in May fell to their lowest since October 2017 because of the price spike resulting from the Persian Gulf tanker traffic disruption, plunging refinery margins (due to price ceilings imposed by Beijing), of a slowing economy and the rapid slowdown in the economy.

The May total stood at 33 million barrels, or 7.8 million barrels daily, Bloomberg reported, citing Chinese customs data. This is roughly a 30% drop vs the average daily import rate of 11.6 million barrels last year. As previously noted, refinery run rates are down as well, as are fuel exports, with Beijing careful to make sure there is enough diesel and gasoline for the domestic market. All this is happening as the latest batch of Chinese data was "shockingly bad", promptly fears of a China hard landing.

Most of Iran's oil is in and around the Persian Gulf, in the Indian Ocean or the Malacca Strait near Singapore. However, with Indian imports largely coming from Russia, that only leaves China as the biggest export target. Alas, suddenly China does not want Indian oil, not because it disapproves of the Iranian regime, but simply because its economic slowdown means far less oil is needed!

Iran said on Wednesday that it had shipped more than 40 million barrels of oil since the US lifted its naval blockade to signal strength. However, half of this shipment, or more than 20 million barrels of Iranian crude, has been idling in Asian waters for seven days or longer, up almost 18% from a week earlier, according to Kpler Ltd. The reason is the same: China does not need the oil.

Estimates for the overall volume of the country’s oil on water - either in transit or stationary - have ranged from 58 million to 68 million barrels since the US sanctions waiver kicked in last week.

A week ago, Bloomberg reported that sellers including middlemen and representatives from the National Iranian Oil Co. made contact with refiners in India, Japan, South Korea and elsewhere even before the license was officially granted, traders involved in the discussions told Bloomberg. That urgency has since increased, they said, however so far there is little favorable response.

Tehran faces a number of obstacles in trying to sell the oil. European Union and UK restrictions are still in place, complicating insurance, while some ports may be hesitant to accept the dark-fleet vessels that Tehran uses to carry its crude. There's also a chance the barrels could get stranded mid-deal if President Donald Trump decided to end the window early.

Buyers remain wary that Washington could reimpose sanctions if negotiations collapse, US Treasury Secretary Scott Bessent told Fox News on Tuesday. "No one other than China, who was already buying it when it was sanctioned, has bought it, so it's still trading at a discount."

The other major barrier to Iran offloading the crude is a lack of demand in major Asian markets, where there's been little interest despite Tehran's efforts to court buyers. As we have extensively reported, the region is well-supplied, both with non-Iranian Persian Gulf oil that can now transit the Strait of Hormuz and crude from farther afield that was bought during the war.

China's imports of Iranian crude - which have never been subject to US sanctions as Beijing simply ignores them - more than halved in June to about 654,000 barrels a day from a month earlier, according to Kpler. Still, at least one tanker has discharged a cargo of the oil in China over the past week, according to Kpler and Vortexa.

Iran oil exports; China oil imports pic.twitter.com/Z5V6vt0QT4
— zerohedge (@zerohedge) June 5, 2026

Indian Oil Minister Hardeep Puri met his Iranian counterpart in New Delhi last week, but stopped short of committing to imports. The country's state-run processors are avoiding the Iranian oil for now, because they've already secured Russian crude supplies through at least the end of August. They are also still seeking clarity from Washington over US-denominated payments, they added.

India would consider resuming purchases once payment channels are clarified, while a complete withdrawal of sanctions could enable refiners to buy from Iran over the longer term, the people said.

Still, Asian interest in Iranian oil could quickly emerge if the price is right. Refiners that have already secured crude supplies can resell some oil to free up some space, should the shipments be highly discounted, and there's also the option of raising operating rates if raw material costs are cheap.

Tyler Durden Thu, 07/02/2026 - 15:40
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The Elephant In The Room That Is Fraud

2026-07-01T14:19:31.998-07:00

The Elephant In The Room That Is Fraud

Authored by Jack Hellner via AmericanThinker.com,

There has clearly been trillions of fraud over the last several decades, and politicians in both parties have shown very little interest in rooting out the fraud until Trump. Somehow, most of the media and other Democrats aren’t too concerned with saving taxpayer dollars—they spend their time attacking Trump.

The media and other Democrats were outraged when Trump spent $16 million dollars fixing the reflecting pool problems, and there was endless reporting, but there is virtually no outrage and minimal reporting on the endless fraud, no matter how many billions have been legitimately stolen from the taxpayers.

The following is a small sample of what crooks have gotten away with, which is only the tip of the iceberg.

Federal data revealed this:

In 2024, 35 percent of exchange enrollees and 40 percent of fully-subsidized low-income enrollees generated no medical claims….

Tens of billions went to big insurance companies to pay for many fake people. Yet, as Democrats shuttered the government, almost all the media spewed were intentional lies about how Republicans wanted to take health care away from the poor, and premiums would rise substantially for them.

The media didn’t have much interest when an enterprising young reporter found massive fraud in daycare centers in Minnesota. They also didn’t have any concern when we learned Governor Walz and Attorney General Keith Ellison knew about the fraud for a long time and instead of going after the criminals, sought to destroy the whistleblowers.

Here is how PBS reported on the story:

This week, the Trump administration dispatched federal officers to Minnesota amid concerns over fraud. The deployment comes after a right-wing influencer posted a video claiming, without proof, that daycare centers operated by Somali residents in Minneapolis had misappropriated more than $100 million.

Hospice fraud in California is massive. Where is the endless reporting by the media? Why aren’t they concerned that Governor Newsom and other officials did little to nothing about it? They also don’t seem interested in how many millions of taxpayer dollars flow to entities associated with Newsom’s wife. Instead, they attack the Justice Department for investigating the obvious.

A huge amount of fraud was found with a small sample of SNAP recipients, yet this news piece seems aggravated at the Trump administration for doing something about it:

The USDA says 700,000 were removed from SNAP. Here’s what counts as fraud.

Multiple studies have found that SNAP fraud is rare, yet the Trump administration continues to place heavy focus on the issue.

In May, Rollins told Fox News that her department had found around 700,000 people fraudulently using SNAP rolls since February 2025 and arrested 895 people in the past year for fraud. She said 244,000 fraudsters used dead people’s social security numbers and 500,000 collected benefits in multiple states.

Here is a story that got little coverage about health care fraud schemes. You would think that with all the worries about Medicare survival that an arrest of around 450 people in 45 states would get extensive coverage, but it doesn’t.

New: Record Healthcare Fraud Bust: 450 Defendants Now Charged by Trump DOJ

How often is this happening throughout the country?

What about this?

Michigan childcare provider collected $1.1M in taxpayer funds despite no visible signs of operating

Where are the administrators we pay for verifying that daycare providers do in fact qualify for the money?

The media clearly has little interest in reporting on fraud perpetrated by illegals:

Illegal Alien Gets 8 Years in Prison for $89 Million Payroll Scheme Employing Illegal Alien Construction Workers

I bet few people saw this story about all the money funneled out during COVID:

NC Tax Preparer Pleads Guilty in $13.9M COVID-19 Fraud Scheme

Seven other return preparers have already pleaded guilty to their roles in the same scheme.

The media is working hard to avoid the story about how we chased down a Somalian fraudster after he fled the country:

$250 Million Minnesota Fraudster Finally Nabbed — in Mogadishu

Every once in a while, the media and other Democrats claim to care about debts and deficits, but they clearly don’t when they refuse to help going after fraud and treat every cut or freeze in government spending programs as a disaster.

The only time they really care about deficits is when they falsely claim that Republican tax cuts cost the government trillions of dollars.

Here is the truth about federal income and spending:

Individual income taxes collected FY 2017 $1.5 trillion. By FY 2025, they were up to $2.66 trillion—up more than double the 35% inflation rate for that period. Corporate income taxes in FY 2017 were $297 billion and in FY 2025, they were $452 billion (or up 52%).

Meanwhile, spending went up from $3.98 trillion to $7.20 trillion—up 77%, which is more than double the rate of inflation. Uncontrolled spending including massive fraud is clearly the problem.

Is our media on it? Hardly.

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Deflation Is Not The Villain - The Overleveraged Fiat System Is

2026-06-30T16:19:21.382-07:00

Deflation Is Not The Villain - The Overleveraged Fiat System Is

Authored by Nick Giambruno via International Man,

It is important to clarify something here.

While mainstream economists, the financial media, academia, and other gatekeepers of the rotten fiat currency system howl about the dangers of deflation, it is worth taking a moment to consider whether it is really such a bad thing.

First, it is important to define our terms.

The correct and true meaning of inflation is an increase in the money supply. So the correct and true meaning of deflation is a decrease in the money supply. But that is not what most people mean when they refer to deflation, because the money supply rarely contracts in a fiat monetary system. When most people say deflation, they mean a general fall in prices.

One of the biggest popular misconceptions in economics is that a general fall in prices is a "bad thing."

It is an enormous misnomer. Falling prices caused by increases in productivity are actually a good thing. Who does not want to see their money go farther?

Technology is naturally deflationary. It drives down costs, increases efficiency, and makes goods and services cheaper over time.

In an honest monetary system, that would mean falling prices and rising purchasing power. In other words, your money would buy more as technology advances.

But that is not how the current system is designed to work. In fact, it does the opposite. It is like running on a treadmill that keeps accelerating.

In a fiat currency system, deflationary increases in productivity are more than offset by inflation, which benefits people who own stocks, houses, and other assets that rise with inflation, and hurts those who depend on wages denominated in the debased currency.

In short, in a fiat currency system, the benefits of deflationary technology primarily accrue to asset holders, because the forced inflation created by central banks pumps up asset values.

If we were living under an honest, hard-money monetary system, where the benefits of technology would not be offset by central banks debasing the currency, those gains would accrue more evenly across the population.

That is why I think the chart below is instructive.

It is a long-term view of real wages versus productivity.

The two tracked together well for decades, showing that as productivity increased, real wages did too. In other words, most people benefited from increases in productivity through higher real wages.

Then something changed around 1971, when that strong positive correlation broke. It was the year the US government cut the dollar's last link to gold and the dollar became a pure fiat currency.

Since 1971, there has been a growing gap between productivity and real wages.

If you could transport yourself back to the early 1970s, just as the divergence between productivity and real wages began, and ask people what they thought 2026 would look like, they might have said something like The Jetsons - flying cars, advanced technology, and a society in which everyone was better off.

They probably would not have believed you if you told them that, in reality, people would be worse off in many ways in 2026 than they were in the early 1970s, despite enormous technological progress. We may not have flying cars or The Jetsons, but there have still been significant advances. Yet people's standard of living has declined in many ways.

Today, many people are bewildered by how people could be worse off now than they were then. The answer is in this chart, which shows that the fiat system and currency debasement are the problem.

Despite advances in technology, the shocking level of currency debasement has not merely kept pace with the natural deflation that comes from increased productivity, but has vastly outpaced it... which is why people are, in many ways, worse off today than they were in the early 1970s. That prosperity has been stolen by inflation and fiat currency.

Since 1971, productivity has continued to increase, largely thanks to advances in technology, but those gains have not translated into growth in real wages as they had in the past under an honest money system. That is because under a fiat currency system, the central bank - the Federal Reserve - has created significantly more inflation than the gains in productivity, which meant real wages did not keep up.

However, those productivity gains from advancing technology did not just disappear. They were redirected somewhere else. They accrued primarily to asset holders, as wage earners chased rapidly depreciating fiat currency.

In short, the fiat currency system is a mechanism for transferring wealth created by technological productivity gains to asset holders and politically connected insiders closest to the money printer.

Frankly, it is a disgusting, dishonest system that operates at the expense of honest people.

But that is the nature of the monetary system we are all forced to live under. And it is wise to acknowledge it, understand it, and take action to protect yourself.

And now, with AI bringing a mind-bending level of productivity gains, this dynamic is about to go into overdrive.

I suspect we will see the gap in the chart above explode even further as AI, and future breakthrough technologies, produce the biggest productivity gains in human history, even as the US government is forced to create the largest amount of inflation in history to try to keep the debt-ridden fiat system going in the face of this historic disruption.

In other words, as technology becomes exponentially more deflationary and debt grows exponentially larger, the central bank's response will have to become exponentially more aggressive.

That means more debasement of your purchasing power to fight the very force that should be making your life cheaper.

Clearly, you want to be an asset owner in this environment so you can protect yourself from currency debasement and also benefit from tech-driven productivity gains.

But what assets should you own? I will get to that soon.

If we lived under an honest monetary system anchored in hard-to-produce money like gold, I think there would be far fewer worries about AI automation and disruption. That is because we would not live under a debt-ridden fiat system in which the government is forced to debase the currency. That would mean increases in productivity from technology would benefit far more people, as their money would go farther, prices would generally fall, and the cost of living would decline. And the government would not try to offset that with inflation.

In such a world, I do not think AI would be nearly as controversial, because it would be seen as making the average person wealthier by reducing the cost of living.

So technological deflation that increases productivity and lowers prices is most certainly not a bad thing, as the fiat economists would have you believe. It is a wonderful thing and should create more abundance and make most people wealthier... in an honest monetary system.

That is why the whole framing around this issue needs to be challenged. It is not technology that is the problem. It is the fiat currency and the highly leveraged system that is the problem.

It is also why you see charlatans promote things like universal basic income (UBI) as a solution to the supposed AI problem.

The solution to the non-problem of technological increases in productivity is most certainly not a UBI, but rather an honest hard-money monetary system in which everyone generally benefits from increases in productivity - not just asset holders and politically connected insiders closest to the money printer.

Throwing the plebs a few crumbs with a UBI to help prop up a failing debt-based fiat currency scam is not a real solution. But thankfully, there is a real solution.

It starts with understanding the monetary, economic, and political forces driving this crisis - and taking practical steps before the next major wave of instability hits.

The fiat system is already under enormous pressure from sky-high debt, endless money printing, and accelerating technological disruption. The people who understand what is happening will be in a far better position than those who are blindsided by it.

That is why I put together a free special report focused on practical solutions - the top three strategies to help protect your money, preserve your freedom, and prepare for what comes next.

Tyler Durden Tue, 06/30/2026 - 17:00
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Katz Says Israel Could Be Back At War With Iran 'Tomorrow'

2026-06-30T14:19:28.049-07:00

Katz Says Israel Could Be Back At War With Iran 'Tomorrow'

Authored by Dave DeCamp via AntiWar.com,

Israeli Defense Minister Israel Katz said on Monday that the Israeli military was ready to restart the war against Iran and that it could happen as soon as "tomorrow".

Katz vowed that Israel would bomb Beirut's southern suburb of Dahiyeh if Hezbollah rockets were fired into northern Israel and that the IDF was prepared to respond if that prompted Iranian attacks on northern Israel.

Katz visiting Israeli troops in southern Lebanon on February 2, 2025. Israeli Defense Ministry photo

"There is no reality in which Israel will not respond to an Iranian attack," Katz said, according to Israel Hayom. "The equation stands – rocket fire on Israeli communities means an immediate assault on the Dahiyeh. The possibility exists that Iran will attack Israel not only in response to strikes in the Dahieh. We could find ourselves at war with Iran tomorrow."

The Israeli minister said that a second potential scenario that would lead to a renewed war with Iran would be if President Trump decides to restart the bombing campaign.

"There are two scenarios that would resume full-scale fighting – a decision by President Donald Trump or Iranian missile fire. This could happen in two days," he said.

Katz also insisted that Israel was ready to fight Iran on its own, which he called a "blue and white operation," despite the fact that Israel is extremely reliant on US air defenses.

"The IDF is just waiting for it. We have selected targets to strike in Iran, and the IDF is prepared and alert, but we will not interfere with the US President’s current moves vis-a-vis the Iranians," he said.

Katz also boasted about the destruction of Shia Muslim villages in southern Lebanon. "It was clear during Operation Silver Plow that the Shia villages along the contact line had to disappear," he said, using the codename for Israel’s recent operations in southern Lebanon.

'Israel is preparing for the immediate resumption of military operations against Iran.'

Senior Middle East Correspondent @ariel_oseran joins @benitalevin on #TheRundown pic.twitter.com/8c7YfNgaMP
— i24NEWS English (@i24NEWS_EN) June 30, 2026

"We are currently in a situation where there is nearly 100% destruction in the contact-line villages of the western and central sectors. In the eastern sector, we are at 73% of villages destroyed," Katz added.

Tyler Durden Tue, 06/30/2026 - 15:40
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Mega Heat Dome Inbound For Washington, DC

2026-06-29T14:19:42.521-07:00

Mega Heat Dome Inbound For Washington, DC

A massive heat dome is set to descend on the eastern half of the U.S., stretching from the Midwest to the East Coast and putting more than 230 million people in the crosshairs of temperatures above 90F, while millions will experience triple-digit temperatures during the Fourth of July holiday week and into weekend festivities.

The Midwest will be the epicenter of the heat dome early in the week, with metro areas such as St. Louis and Detroit climbing into the mid- to upper 90s.

By Wednesday, the heat shifts eastward, threatening record highs across Washington, Baltimore, Philadelphia and New York City, where temperatures are expected to exceed 100F over multiple days.

Heat wave is inbound, and this one could be among the DC area's most intense.

As we close in on the Wednesday start of an unusually intense and long-lasting blast of extreme heat extending into the Fourth of July weekend, computer models continue to pump out numbers that could… pic.twitter.com/CctcKMJMri
— Capital Weather (@capitalweather) June 29, 2026

Meteorologist Ryan Maue described it as a "mega heat dome" that will produce "record highs (daily) for almost the entire Eastern Seaboard from Maine to South Carolina."

"Fire up the grill, buy plenty of ice 🧊 for your favorite beverages, get your pool floaties in order, and prepare for an extremely hot and humid Independence Day weekend across the Eastern United States with temperatures well over 100°F," Maue wrote in the note.

Bloomberg's two-week forecast for average temperatures across the Washington, D.C., metro area indicates the heat dome will linger until nearly the midpoint of the month. Temperatures are forecast to return to the 30-year mean of around 78F.

This is not global warming - just entering peak summer in North America.

To note, there are mounting El Niño risks (read here & here).

Tyler Durden Mon, 06/29/2026 - 15:00
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Chinese AI Matches Mythos In Cybersecurity Tasks With Open-Weight Model

2026-06-28T16:19:28.770-07:00

Chinese AI Matches Mythos In Cybersecurity Tasks With Open-Weight Model

While Anthropic has been forced to shut down its latest general-use models for over two weeks after it emerged that the company's de-tuned public-facing Fable 5 model could be 'jailbroken' into its unrestricted form (Mythos 5) to perform tasks that pose security risks, a Chinese AI company backed by Alibaba and Tencent has released a model that matches the performance of Mythos in some cybersecurity scenarios.

The company, Zhipu AI - also known as Z.ai, can match the latest US models when it comes to finding security bugs - though it still lags at other tasks, according to the Wall Street Journal.

Overall, the capability gap between top U.S. models and those built by Chinese companies has narrowed significantly, and use of Chinese AI systems has surged as businesses seek to rein in runaway costs. A host of companies, including Microsoft, are weighing how they can offer Chinese models on their platforms, a development that is set to alter the balance of power among tech companies.

What's more, Zhipu's GLM-5.2 is an open-weight model, meaning it can be downloaded and run on hardware by anyone and can be modified and used without supervision - which hackers are undoubtedly loving.

GLM-5.2 has ranked as one of the 10 most-used AI models, according to data from OpenRouter, a company that provides access to more than 400 AI models. In some benchmarking tests, according to the cybersecurity company Semgrep, GLM-5.2 bested Anthropic’s Claude Opus 4.8 model, which was released in May. When given further instructions, Opus 4.8 and GLM-5.2 can match Mythos in bug-finding ability, according to researchers.

As we noted last week for our premium subscribers, this is how Goldman's Delta One head, Rich Privorotsky framed the latest Chinese shock to the system from open-weight models:

The big development over the last couple of days has been GLM-5.2, another Chinese open source model that appears highly competitive on SWE benchmarks relative to some of the latest private models. It is not quite cutting edge, but the gap between open and closed models continues to narrow. The weights are open (MIT license), models can be distilled, quantized and reproduced...its a big leap in capability and a clear sign the field is narrowing.

It's not just some of Wall Street's top thinkers who were immediately drawn to the stats of the latest Chinese offering: various industry insiders were in shock.

Artificial Analysis’ new knowledge work benchmark rated it higher than GPT 5.5

"This kind of powerful weapon that can alter the landscape of cyberwarfare can’t remain solely in American hands," Zhou Hongyi - CEO of Chinese cybersecurity company 360 Security Technology, speaking at a cybersecurity conference in Beijing. His company has released a new bug-finding tool called Tulongfeng - which it claims is comparable to Mythos when it comes to finding bugs.

Zhou Hongyi, chief executive of 360 Security Wu Hao/EPA/Shutterstock

So while the Trump administration restored some access to Mythos 5, IT departments across America are now at a disadvantage when it comes to using something this powerful to find and patch their own vulnerabilities.

"Banning Fable while selling chips China needs to develop its own version is a gift to China," said Saif Khan - a distinguished technology fellow at the Institute for Progress think tank who focused on export restrictions under the Biden administration. Kahn says that the US needs to maximize the use of Mythos and similar models to harden cyber defenses while it can.

Among the Mythos 5 and Fable 5 users that had lost access before Friday’s decision to restore Mythos 5 access for some trusted entities: the National Security Agency, which had been testing the tools and found them impressive in trials, according to people familiar with the matter.

Critics of the White House approach have said it has been lax in restricting use of Chinese open-weight models from companies such as DeepSeek and Zhipu, which are popular among U.S. businesses. -WSJ

Meanwhile - OpenAI on Friday said it will now limit access to its latest model - GPT 5.6, after Trump administration officials raised security concerns. The company warned that the government's current case-by-case evaluation process isn't a good long-term solution, but they're adhering to it following a recent executive order focused on security and model oversight.

In short, the Trump administration is driving people to use open-weight Chinese models, while hobbling the US AI industry.

Tyler Durden Sun, 06/28/2026 - 18:05
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The Path To A September Rate Cut (Despite AI Inflation)

2026-06-28T15:19:40.626-07:00

The Path To A September Rate Cut (Despite AI Inflation)

By Peter Tchir of Academy Securities

The Path to a September Rate Cut (despite AI inflation)

A lot has changed in the past 24 hours. After Thursday’s CNBC interview, it seemed obvious (to me) that I needed to write about how there is a real path to a Fed Rate Cut in September. Not only has the market priced in a 75% chance of a hike in September, and 1.25 hikes by the December meeting, most have also taken any chance of a cut off the table. I think that is missing the path that I believe Warsh is trying to create. We argued last weekend, The Fed and Rates, that Warsh had curtailed the tail risk on the long end of the curve. We switched from bearish to neutral on the long end of the curve (10s went from 4.46% to 4.37% this week). The more we think about it, the more we believe that he has started us on a path, that despite his hawkish rhetoric, sets up for a cut in September to be followed by another cut in October, just ahead of the midterms.

Two things occurred, making me rethink today’s topic: Iran and doubts about the AI trade.

Those two topics are important enough that we need to at least address them, but in the end, we decided to focus on the path to rate cuts, as the other two stories will take time to play out.

Iran, Attacks Resume, But Ceasefire is Not Officially Broken

Iran and the U.S. exchanged fire on Friday and Saturday, and fighting continues to be a risk this weekend. Academy published a SITREP on The U.S. Strikes Iranian Targets over Ceasefire Violation.

For now, the working assumption is that this round of back-and-forth attacks will not derail the discussions. That both sides were “flexing” to remind the other side of why they are at the table. If the ceasefire breaks down, the hostilities escalate, and the oil trade is once again disrupted, then the odds of a September rate cut look bleak, but for now, that is not our base case on Iran.

There are two things that have not gotten the attention they deserve with respect to oil prices:

The U.S. drained the SPR (strategic petroleum reserve) rapidly and to its limit, which kept oil prices capped, but that ability is largely gone, so something needs to be done.
Providing sanction relief to Iranian oil may be as important as re-opening the Strait. Providing sanction relief not only brings more Iranian oil to the market than before, but it also lets them move the oil they were already sending (above sanctioned limits) with a higher degree of flexibility and transparency.
- The fact that the concept of OPEC seems to be in tatters doesn’t hurt either.

Admirals Joyner and Whitworth, along with Bret Lowry, Maria Donnelly and I (Peter Tchir), touched on the f ragility of the peace between Iran and the U.S. in this month’s Around the World Podcast (iTunes and Spotify). The podcast also provides an update on our take on the Russia/Ukraine war, Cuba (which doesn’t get the attention it deserves), and of course, China and macro.

We need to keep a close eye on Iran, but for now, we see us limping along the path to discussing the details of the rather vague MOU that both sides seem to interpret very differently.

Questioning the AI Growth Story

We continue to see two economies. The AI and Data center economy and the rest of the economy. The former has been generating the jobs, the growth, and the earnings. The SOX Index (Philadelphia Semiconductor Index as if anyone, anywhere doesn’t know what the SOX is at this time) hit a high on Monday before dropping almost 10% from there.

Micron’s earnings call helped generate a rebound on Thursday, but that proved to be short-lived.

Questions are swirling around the spending. The cost of the buildout (more on that later). The utility of AI versus the cost of using AI. At some level, is the cost of using AI rising even faster than the benefits?

The growing angst about AI and Robotics (in our AI Revolution pieces) continues to grow and is something the AI companies need to aggressively address before it becomes a problem (via legislation or taxes, for example).

This isn’t a debate that will be answered today, but it does seem like the market is starting to rethink valuations. Stories were circulating that OpenAI may delay their highly anticipated IPO from this year to 2027. Since there is no official timetable, it is difficult to evaluate the veracity of such news, but it did little to help market sentiment.

It is always risky (and not wise) to publish a chart that one does not really understand. But rarely has the T-Report been accused of being risk averse and wise, so here it goes.

According to Bloomberg the Silicon Data LLM Token Expenditure Index (is a daily statistical benchmark to measure the effective expenditure level of the actively traded broad LLM Market, measuring price per million tokens). Say that ten times quickly!

I really don’t know how good this index is at measuring what it tries to measure (and it is in its infancy in any case), but it seems like something worth paying attention to as we all try to figure out where we are headed on AI spend (not just the spending to build out AI and data centers, but the actual spending on the compute they provide).

For what it’s worth, credit spreads in the sector started to widen recently. Not that problematic and certainly not enough to derail the borrowing to spend, but it is always worth paying attention to credit.

Expect more questions about valuations, even with good news, let alone with bad news.

The Path to a September Rate Cut

Let’s get to the “ fun ” part of today’s Report. We will lay out a case for September Rate Cuts that is entirely consistent with Warsh’s messaging.

We will do this, step by step. Some of the “steps” may seem to be disjointed, but I think they all tie well together.

Miran and The Neutral Rate

Let’s just go back in time, before the U.S. attacked Iran.

Miran was the administration’s inside person on the Fed. I didn’t like that he voted to cut every single time, but I think he did a lot of good work on the Neutral Rate.

The Neutral Rate, like R* and many other things in the field of economics, sounds precise, but is incredibly difficult to measure. There is a range of what the Neutral Rate is at any given time. That range moves along with the economy and technology.

I felt attacking the neutral rate, and arguing that it was lower than the previous Fed had thought, was a solid argument towards getting cuts. You could probably justify 50 to 100 bps of cuts, just based on arguing that the prior Fed had been wrong on where the neutral rate was.
- It is not an accident that I try to frame this as the “new” Fed blaming the “old” Fed for mistakes. It is consistent with this admin (and every other administration), to blame prior administrations for mistakes. It is often reserved for Presidents, but the tactic can be applied more broadly.

While no one is talking about the neutral rate today, I think this work will become relevant again.

STOP WITH THE PCE CHATTER!

Surprisingly, few things make my head explode (though high on the list is The Big Short’s portrayal of just a few people seeing cracks in the housing market, when lots of people saw the issue, but got stopped out because they timed it wrong).

But on Thursday my head nearly exploded, as I heard over and over that “ PCE, The Fed’s preferred inflation gauge ” did whatever it did.

I don’t know what it did because the PCE is NOT this Fed’s preferred measure. I’m not even sure if it was Powell’s favorite measure. I’m pretty positive Bernanke said it was the best measure. Maybe Yellen did too? Maybe Powell, though that doesn’t stand out. But I can pretty much guarantee you that Warsh doesn’t stay awake at night looking at PCE data.

The Data Source Task Force

I keep raising my hand (though I’m not sure that is a thing), but I’d love to be on the data source task force. Garbage In, Garbage Out.

This is where we square the circle on Warsh’s tough stance on inflation, with achieving a September Rate Cut.

Which data set do you believe?

The blue line is Owners ’ Equivalent Rent of Residences. It feeds into CPI. You can read the BLS Description. I challenge anyone to read that and argue it reflects anything in the world of renting shelter today.

In our “beloved” CPI, OER didn’t peak until the middle of 2023. Even then it “peaked” at 8%. Zillow peaked at almost 16% back in early 2022! For anyone who remembers the rental market post-Covid, which metric seems right?

Remember Team Transitory, who was still going ahead with QE while “contemplating” a rate cut, basing their assessment on inflation in shelter on OER versus something actually seen in the real world?

What is the BLS & Cleveland Fed New Tenant Repeat Rent NTRR YoY index? If you guessed, worst name ever for an index, you are probably correct! It is an index that the Cleveland Fed introduced (with little fanfare) to try to track rents. Guess what? It tracks the Zillow index pretty darn well!

So, Warsh doesn’t even need to go to outside sources! The Task Force can ask the somewhat obvious question – Why don’t we use the index that the smart people in Cleveland created? They did this work for a reason! They know OER is flawed. Maybe OER needs to be in CPI because it takes an act of Congress to change the CPI calculation (because it is used for Social Security benefits). But maybe, just maybe, someone at the Fed can say we should base monetary policy on something that resembles the real world, instead of some archaic, obsolete metric?

Two things come out of this work:

The Team Transitory mistake was waiting too long to tighten monetary policy, because they were looking at the wrong data.
Affordability, not inflation, is the bigger problem people face, and the affordability problem was a 2021/2022 problem, that was NEVER picked up accurately by the inflation data.

Now let’s go back to PCE and bring back Truflation.

I put the “green” line for inflation target at 2.9% rather than 2%. Yes, we have been “conditioned” to treat 2% as the target, but Warsh did “hint” that the left side (i.e., “big figure”) is more important than the total or “rounded” number. Sure, 2.9% isn’t 2%, but expect to be “conditioned” over the coming months to see that 2 point something is close enough to 2.

Truflation core is currently at 1.45% and has been below 1.8% since February.

Truflation produces real-time, daily inflation indices and other economic data to provide a more transparent and current view of the market than traditional government-reported metrics. Unlike monthly, survey- based methods, Truflation’s indices are compiled using extensive datasets (you had me at real time. You also had me at datasets).

It is also quite obvious, that had Team Transitory even glanced at Truflation we might have moved to tighter monetary policy sooner?

The same two mistakes that show up in housing show up in this as well:

The Team Transitory mistake was waiting too long to tighten monetary policy, because they were looking at the wrong data.
Affordability, not inflation, is the bigger problem people face, and the affordability problem was a 2021/2022 problem, that was NEVER picked up accurately by the inflation data.

The Data Source Task Force will come back with data that provides cover to cut and that data is likely better for basing decisions on, than the data the Fed has been wedded to!

Affordability NOT Inflation

I’m not even sure how to “fix” this chart, but I will figure it out (maybe with the help of AI).

We don’t look at the CPI data series very often. We tend to focus on monthly or annual changes. But affordability is the cumulative effect and that is what is hitting people.

Given what we saw with Truflation and with rent, I suspect that CPI understates the real-world problem – by a LOT. And the problem is primarily a 2021 and 2022 problem!

I think there are cases to be made around past mistakes being made because the wrong data was used.

Avoiding future mistakes by looking at the correct data makes sense!

The Impact of the War Being “Over”

We can quibble about whether the war is over or not, but going back to Academy’s SITREP, we expect peace talks to continue, and the flow of oil to also continue.

Yes, there are problems in the energy ecosystem. We are “higher for longer” in prices, from oil out to January, to diesel, etc., but by all accounts the worst is behind us.

Why would we possibly be pricing in war impacts on inflation, when we seem to be in some new status quo? Maybe I spend too much time with geopolitical experts, but we don’t see a return to full hostilities, or significantly higher oil prices. Again, the removal of sanctions is a big deal.

The Administration’s Goals Have NOT Changed

The President didn’t wake up one day a few weeks ago, and tell Warsh, go ahead and hike. The President, as I believe he reiterated again this week, says he knows a lot about real estate and lower rates help real estate.

So, you can believe that Warsh is truly hawkish, that Bessent no longer cares about 3, 3, 3, and the President is oblivious to his hand-picked Fed Chair being hawkish (a chair who will likely spend Thanksgiving dinner at the home of his father-in-law, a large Trump donor), or you can think about what “master plan” is behind all of this.

Imagine (it is easy if you try) that Warsh convinced Trump that sounding dovish right now would be a disaster. Imagine (again, it is easy if you try) that he convinced the President to let me sound hawkish on inflation. That my hawkish message will control the long end of the yield curve (which it did). That we will convince every reporter and Wall Street analyst to believe we are going to hike and fight inflation. That we are retaining our independence (which they will to a degree).

And then Mr. President, this is the “good” part, data will start rolling our way. Inflation is already overpriced and with the war ending, it will come down more. Then, we will argue (persuasively, because it is true) that we should use other sources of data that show lower inflation.

Then, Mr. President, we will dazzle them with “neutral rate” mumbo jumbo. It has always been mumbo jumbo, but we will use it to our advantage.

Then, when the hawks and “dumocrats” (or is it spelled with a b?) say we are not protecting the people against inflation, we will point out it is all about affordability and the prior administration and “their” Fed (despite Powell being appointed by Trump) being “too late” resulting in “the mess” we are in.

You can agree or disagree with anything I just wrote on “political” grounds or otherwise, but can you really argue that it cannot play out that way?

AI and Data Center Inflation

Do you know what sort of spending is not affected by 50 bps of hikes?

Spending by companies trading at 100x some multiple! (Ok, probably some hyperbole here, again, but seriously, 50 bps of hikes is meaningless to the data center/AI build). Just look at the price of electricity. Hiking to slow down AI/Data center spending (which is inflationary for now), will be incredibly ineffective/useless. The people hurt by 50 bps of hikes aren’t the ones driving inflation, they are the ones trying to stay one step ahead of the Repo Man (still a bizarre movie).

AAPL dropped after announcing some price hikes. The price hikes on relatively expensive things to begin with (the upper part of the k rather than the lower part). But the market, I believe, perceived that those price hikes would not be absorbed easily. If one of the largest consumer product companies raises prices and the market questions their ability to pass on costs, what does that mean for the

average company selling to consumers? I don’t read that as inflationary.

Someone in my stream, who I cannot seem to find at the moment, pointed out that some of the survey data pointed to increases in prices paid, and declines in prices received. Bad for margins, but hardly inflationary.

Anecdotally, and this was somewhat confirmed by a chip company we met with recently. Remember when they were “giving away” memory? I looked at updating my 5-year-old desktop. I have 64 gig of RAM. I do remember paying “up” for the upgrade. While today’s RAM is better, faster, etc., I was shocked, that most desktops came with 32 gig as standard and 64 gig was a relatively costly upgrade.

This feeds back into the “ are AI/Data Centers getting too expensive” question? And yes, it is inflationary, but has nothing to do with the true affordability or the inflation problems many are dealing with.

Bottom Line

Look for the market to start pricing in rate cuts. If there is one “pound the table message” I’d give, it is lower yields at the front end of the curve. The “hike” community is applying the wrong data to this Fed.

I’m less clear on the long end, but I’m neutral, to even slightly bullish on 10s. Bessent wants a 3 handle. Warsh took out the tail risk. There are all sorts of headwinds facing the longer end of the yield curve, but I think with some “appropriate” timing, the admin can launch Operation Twist with some other tools and force the long end lower.

I’m far from certain on AI/Data Center valuations.

I think with recent weakness, go heavily overweight energy, especially nuclear across the globe. As the President focuses on domestic issues, energy and electricity production remains front and center. Even Europe is nearing that point.

Lean heavily on ProSec and overweight the biotech/pharma component, while underweight the chip component (still a critical part of ProSec but not where the best value is).

Look for credit spreads to come under some pressure, as the big tech/data center/AI/space issuers have more to do and are less price sensitive than we are used to, because their multiples allow them to be less price sensitive. Just like their potential to issue more equity (after years of buybacks) is weighing on their equity.

While Bitcoin and crypto in general aren’t moving markets like they once did (thanks to prediction markets and leveraged ETFs, etc.), the losses in crypto may slow down the “gambling” crowd, which won’t help equities in general, especially the high-flyer, momentum stocks that have benefited most from this crowd.

Good luck and get ready for another short week, that will probably feel much longer than 4 days!

Tyler Durden Sun, 06/28/2026 - 16:20
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US SNAP Payment-Error-Rate Hits High Of 10.62%

2026-06-27T15:19:26.737-07:00

US SNAP Payment-Error-Rate Hits High Of 10.62%

Authored by Naveen Athrappully via The Epoch Times,

The national payment error rate for the Supplemental Nutrition Assistance Program (SNAP) hit 10.62 percent for Fiscal Year (FY) 2025, far exceeding the 6 percent threshold set by Congress.

“While this is a modest decrease from FY 2024, the FY 2025 rate still shows significant waste at the state level,“ the U.S. Department of Agriculture (USDA) said in a June 24 statement.

”Including both overpayments and underpayments, this year’s rate represents a collective $10.1 billion in improper payments nationwide.”

The payment error rate measures how accurately states calculate SNAP eligibility and the amounts that beneficiaries receive.

The One Big Beautiful Bill Act, signed into law by President Donald Trump last year, established a State Quality Control Incentive provision under which states must pay a percentage of SNAP program bills if their payment error rate exceeds a certain limit.

A state with an error rate of 6 percent to 8 percent will be required to fund 5 percent of the benefits. This scales up as error rates get higher. States with error rates of 10 percent or more must fund 15 percent of benefits.

“[This has instituted] real financial consequences for states that mismanage taxpayer dollars,” the USDA stated, noting that these rules could come into effect as soon as Oct. 1, 2027.

States with error rates exceeding 6 percent are also required to submit a Corrective Action Plan to the USDA’s Food and Nutrition Service, explaining how they intend to address the root causes of the high error rates. Some states may end up getting financially penalized.

“These payment error rates are further proof that state accountability is severely lacking in SNAP,” Agriculture Secretary Brooke Rollins said.

“USDA has taken historic action to help interested states curb SNAP waste, and I hope other states, regardless of political leadership, prioritize needy families and the American taxpayer over politics.”

Tackling Error Rates

A June report from the American Public Human Services Association detailed the results of a survey conducted among all 50 state SNAP agencies between May 19 and June 5, which was aimed at understanding how the agencies planned to improve their payment accuracy.

Out of the 39 states that responded to questions on state capacity and operational readiness, 92 percent said they had already completed a root cause analysis of the error rates or that such an effort was underway.

“States reported that payment errors stem from both participant and administrative factors, with responses suggesting errors are roughly evenly distributed between the two,” the report reads.

Many states have increased or are considering boosting their workforce, expanding training, adopting new technologies, and strengthening quality assurance functions to identify and avoid errors.

Commenting on the FY 2025 SNAP payment error rates, Senate Committee on Agriculture, Nutrition, and Forestry Chairman Sen. John Boozman (R-Ark.) said efforts must be taken to ensure that the program is administered in a fair, accurate, and responsible manner, according to a June 24 statement from the committee.

“It is clear that improvements were needed to ensure SNAP is administered as intended to support those truly in need while protecting taxpayer dollars,” Boozman said.

“I applaud the states that are implementing innovative solutions to decrease error rates and be good stewards of federal funds. The reforms included in the Working Families Tax Cuts were designed to promote accountability for significant mismanagement.”

Working Families Tax Cuts refer to the One Big Beautiful Bill Act.

SNAP Changes

States and federal officials are making SNAP food purchase rules more stringent to direct beneficiaries toward healthier choices.

Beginning this fall, SNAP-authorized retailers are required to stock more nutritious items across four food categories—produce, protein, dairy, and grains.

Almost a dozen states also plan to ban beneficiaries from buying energy drinks, candy, and soda using SNAP coupons over the coming months.

However, on June 22, a federal judge blocked the USDA from restricting SNAP beneficiaries in five states from buying sugary foods or drinks.

The states—Colorado, Iowa, West Virginia, Tennessee, and Nebraska—had previously received USDA approval to impose such restrictions. The judge ruled that the department lacked the authority to approve these food restriction waivers.

A USDA spokesperson defended the department’s actions.

“The idea that taxpayer funds should not be used to purchase junk food should not be controversial,” the spokesperson said.

“USDA will not be backing down from the fight to Make America Healthy Again, including for families and communities reliant on SNAP.”

Tyler Durden Sat, 06/27/2026 - 17:30
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Apple Wants To Buy Memory From China As Soaring Chip Prices Spark Inflation Shock

2026-06-27T14:19:39.805-07:00

Apple Wants To Buy Memory From China As Soaring Chip Prices Spark Inflation Shock

Last Thursday, in the aftermath of Apple's biggest one day plunge since Liberation Day, and second biggest single-day drop ever...

.... when the company lost over a quarter trillion dollars in market cap after the company's unprecedented price increase announcement which for some products was as much as 50% as Apple decided to pass on soaring component costs to consumers, following similar moves from other consumer electronics companies....

... and which Apple blamed on "unsustainable" prices by the memory cartel - namely SK Hynix, Samsung, Micron and Sandisk - who have been flooded with unprecedented demand from hyperscalers (freshly funded with hundreds of billions in newly-issued investment grade debt) we predicted that "China's memory makers are waiting by the phone" for a disgruntled Tim Cook to call, demanding bulk, cheaper RAM.

*APPLE SHARES CLOSE DOWN 6.1% IN BIGGEST DROP SINCE APRIL 2025

China's memory makers are waiting by the phone
— zerohedge (@zerohedge) June 25, 2026

To be sure, Apple wasn't alone: just hours later Microsoft also announced it was raising Xbox prices, in effect launching an avalanche of memory-driven price increases across the industry, now that it has been normalized to pass on soaring memory prices to consumers.

This, in turn, takes place following a series of reports - initially on this website almost a month ago which showed that the recent surge in core inflation is largely due to runaway chip/memory prices as Apple has since confirmed...

At what point does Trump start raging at soaring memory prices

PPI Electronic Components is pulling entire core index higher pic.twitter.com/v9ufHmx0gG
— zerohedge (@zerohedge) June 11, 2026

... followed last week by the WSJ also joining the chorus by reporting that "the Data-Center Boom is sparking a third wave of inflation."

Fast forward to this morning when with AI stocks tumbling as "check/capex payers", including AAPL, get crushed, while "check/capex receivers" soar...

Hyperscalers vs Chips pic.twitter.com/qtYEDM8lQ7
— zerohedge (@zerohedge) June 25, 2026

... the abovementioned Chinese memory makers did not have long to wait, and overnight the FT reported that Apple is lobbying the Trump administration for clearance to buy memory chips from CXMT, a Chinese company that the Pentagon as put on a blacklist because of alleged connections to the People’s Liberation Army.

As we expected, the iPhone maker has been waging a lobbying campaign to get the White House’s blessing in order to ease the financial pressure of the rise in memory chip prices. A person told the FT that Apple approached the commerce department more than a month ago, but the tech company has been targeting other officials across the administration and allies in Washington.

Apple is not barred from buying chips from China's DDR giant CXMT, or YMTC, another Chinese memory chipmaker which focuses on NAND memory and has been growing its market share aggressively, having caught up to Sandisk, and set to become the world's 3rd largest maker of flash memory as soon as this quarter

But the Pentagon has put both companies on its Chinese Military Company blacklist. The so-called 1260H list contains dozens of Chinese groups with alleged ties to the PLA that undermine US national security.

Securing CXMT as a memory supplier would help remedy a situation in which the tech giant is being squeezed by its own suppliers, a position in which Apple has never been before .

The lobbying campaign comes after President Donald Trump met his Chinese counterpart Xi Jinping in Beijing last month. Ahead of the summit, and in the months ahead of their previous meeting in South Korea in October, the US has held back from introducing new technology-related export controls that would affect Chinese companies.

As the FT notes, the Pentagon’s 1260H list creates reputational risk for companies, but in most cases it has no legal ramifications. We said as much just hours earlier when we said that those "worried about Chinese memory roadblocks by the US govt to ease memory inflation forget Trump undid 40 years of Iranian sanctions to lower the price of oil." And now that oil price inflation is contained, Trump has memory-driven cost-push inflation to fix ahead of the midterms, and whether he wants to or not, the only option his Admin has - besides imposing a price ceiling on memory (which may still come) - is to agree with Apple's request.

Last year, when memory prices were far lower and domestic producers did not have their customers by the throat with record chip prices and chip inflation was not yet the biggest driver of core prices, the commerce department added CXMT to a package of Chinese groups it intended to place on a trade blacklist called the “Entity List”. But the White House told it to hold off on new export controls because the administration was in the middle of tough negotiations with China to try to reach a truce in the trade war.

In any case, the FT notes that it remains unclear if Apple would get any guarantee from the administration, especially a promise that the US would not later put CXMT on the Entity List. Trump last year agreed to let Nvidia sell advanced H200 chips to China, a move many of his officials opposed.

In February, the Pentagon updated the 1260H list before withdrawing it within an hour. Several people said it was removed because the White House was angry that someone at the Pentagon had taken CXMT and YMTC off the list. When the Pentagon re-released it this month, both of the Chinese memory chip manufacturers had been reinstated.

“Apple choosing to partner with a Chinese military company would be a grave mistake,” John Moolenaar, the Republican chair of the House China committee, told the FT. However, he expect that the Republican will rapidly change his tune once there is public outcry in a the next few weeks against soaring electronic component prices, which will ultimately be blamed on runaway memory costs.

“Helping the [Chinese Communist Party] succeed in its plans to dominate critical supply chains will make our country’s tech industry and economy more dependent on China at a time when we must build secure tech supply chains with our allies,” Moolenaar said, seemingly unaware that by not using Chinese components, he is allowing South Korea's memory cartel dictate not only US inflation but also the country's monetary policy, now that even Fed officials are pointing to AI/memory prices as key inflation drivers.

*KASHKARI: INFLATION DRIVEN BY SUPPLY ISSUES, INCLUDING AI-BUILD

Readers may recall that back in 2022 - when the world's faced another major surge in chip and component prices due to the logistical nightmare following covid - Apple faced a backlash when it considered buying memory chips from YMTC for iPhones to be sold in China. Marco Rubio, who was then the top Republican on the Senate intelligence committee, told the FT that “Apple was playing with fire”. Back then Rubio added that Apple would be “subject to scrutiny like it has never seen from the federal government” if it proceeded to procure YMTC chips. However, back in 2022, memory hadn't emerged as the biggest source of rising core inflation. It has now, and should Rubio refuse to pivot on his position, he would promptly become the target of public ire over surging consumer goods prices.

Yet even with Tim Cook, and soon all other US consumer electronics products makers pushing hard for alternative memory sources, the memory lobby won't give up easily on the (temporary) oligopolistic position the commodity makers have achieved. “It makes no sense for the administration to decouple America’s reliance on critical minerals from China, only to approve new dependencies in a field as critical as AI,” said Michael Sobolik, a security expert at the Hudson Institute.

One former official warned the US risked losing another industry by letting Apple buy memory from a group that receives Chinese subsidies. “Trump can show the courage to keep American memory alive for our security and our competitiveness or pour it down the drain so [Apple chief executive] Tim Cook can squeeze out a few more points of margin.”

It wouldn't surprise us if the "unnamed former official" is on South Korea's payroll because while China is still a modest actor in the memory space, the actual giants are all located in South Korea: Apple relies on US chipmaker Micron in addition to South Korea’s Samsung and SK Hynix for the DRAM memory used in its devices.

Meanwhile, in advance of a historic flood of orders that could send its market cap soaring, we reported that China's DRAM giant CXMT has received regulatory approval to list in Shanghai for the largest mainland IPO since 2022 as the Chinese national champion positions itself to challenge the DRam incumbents. The IPO of its domestic NAND peer, YMCT, is set to follow just weeks later

Oh, and for those confused what happens when a commodity price surges, the post-covid case study should serve well: in 2023, DRAM prices because of a supply glut. This was a boon for buyers such as Apple, which was able to secure massive amounts of cheap inventory.

But the AI boom of the past three years has seen a reversal in fortunes for the memory suppliers. As hyperscalers spent hundreds of billions of dollars for AI infrastructure, demand for advanced DRam — known as HBM — has led to a protracted shortage of traditional memory for consumer electronics.

However, now that the market has shown it will no longer reward ridiculous amounts of hyperscaler capex spending - a U-turn from the market's reaction function for much of the past year - especially now that most of the big chip spenders no longer generatepositive cash flow and forced to issue billions in new debt for every incremental order of memory...

... in the end it won't be Trump that decides the fate of memory prices: it will be hyperscalers' own shareholders who will eagerly punish their management teams for incremental capex spending, forcing these companies to come up with new and creative ways to use and optimize existing Ram (likely in the form of many more Software-driven TurboQuant moments) to come up with more efficient and faster models.

In any case, after soaring into the stratosphere for the past year courtesy of all Hyperscaler free cash flow and hundreds of billions in on and off balance sheet debt, the party is finally ending and the memory bubble is about to burst.

Tyler Durden Sat, 06/27/2026 - 15:10
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Tanker Rates Nearly Halve As Hormuz Shipping Normalizes

2026-06-26T15:19:16.276-07:00

Tanker Rates Nearly Halve As Hormuz Shipping Normalizes

The recent spike in the cost to hire a supertanker carrying 2 million barrels of crude from Saudi Arabia to China is now being sharply reversed, as more shippers send vessels through the Strait of Hormuz and normalization trends continue to improve.

Bloomberg reports that tanker rates for the Saudi Arabia-to-China route tumbled to about $287K on Friday, down 44% from more than $514K on Tuesday. That data came from the Baltic Exchange.

Rates remain elevated and still highly profitable for owners, but the sharp drop late in the week suggests the market is beginning to normalize after an interim U.S.-Iran peace deal reduced the war risk premium around the Hormuz chokepoint. Early movers certainly capitalized on lofty rates last week.

According to Bloomberg data, 48 vessels have transited the narrow waterway on Friday, though that does not include ships that switched off their transponders.

By the end of the week, Brent crude fell below $72 per barrel, while WTI traded around $69, hovering near pre-war levels.

A late Thursday note from Arrow Shipping & Energy said that 75 million barrels of crude have flowed out of the Persian Gulf via tankers since the U.S. and Iran signed an interim peace deal. Persian Gulf exports are now at about 75% of pre-war levels, according to Bloomberg estimates.

Asian Refiners Swamped, Brace For Over 60 Million Barrels Of Oil Ready To Exit Hormuz

Tanker loadings are now resuming at Saudi Arabia's Ras Tanura terminal, yet another sign exports from allied Gulf countries are ramping up.

"Crude remains under significant pressure as the bearish narrative continues to center on improving flows through the Strait of Hormuz," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. "While transit numbers appear somewhat lower following yesterday's attack on a vessel, traffic has not stopped entirely."

HSBC analyst Kim Fustier said the reopening of the Hormuz waterway has created a "near-term supply overhang; Gulf exports rebound faster than the market can absorb them."

Fustier noted, "China remains key swing buyer," but said the "next inflection point when backlog of stranded vessels runs out and SPR releases end in July," may shift Brent back towards $80/bbl.

Tyler Durden Fri, 06/26/2026 - 15:40
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China's YMTC Global NAND Market Share Surges To 13%, Now Tied With Sandisk

2026-06-25T14:19:18.299-07:00

China's YMTC Global NAND Market Share Surges To 13%, Now Tied With Sandisk

Yangtze Memory Technologies Corporation (YMTC), China's largest maker of NAND flash memory which is breathing down Sandisk's neck in global sales, and which is widely expected to IPO soon after China's DDR giant CXMT goes public in the coming weeks, has increased its global NAND flash memory market share from 8% in the same period in 2025 to 13%, Kuai Technology reported citing the latest Counterpoint research report.

According to Counterpoint, Samsung ranks first in the global NAND market with a 29% revenue share, followed by SK Hynix at 18%, while YMTC ranks fifth, tied with Sandisk, and is about to tie Japan's Kioxia for fourth position in global marketshare. YMTC increased its market share to 13% from 8% in Q1 2025, boosted by memory shortages and rising prices.

The Wuhan-based YMTC has recorded double-digit growth for three consecutive quarters, with revenue reaching $2.6 billion in the first quarter of 2026, up nearly 445% year-on-year.

Major Korean players such as Samsung and SK Hynix said that the pace of Chinese memory chipmakers’ catch-up has exceeded expectations.

According to the latest report from market research firm Counterpoint Research, YMTC has become the fastest-growing company in the global NAND market. Korean industry insiders believe that its rapid expansion in both technology and production capacity is directly threatening the market positions of Samsung and SK Hynix.

Amid the global shortage for DDR and NAND ram, China is rapidly emerging as the biggest wildcard. With both CXMT and YMTC expected to go public shortly and raise billions in new capital, expect China to aggressively pursue market share in the only way that China knows how: by aggressively undercutting all its competitors on price.

In April, DigiTimes reported that YMTC passed Apple’s verification test and will begin supplying storage chips for the company in May. YMTC would become the first Chinese company to supply Apple with NAND chips, and Apple’s third flash memory chip supplier after US-based Kioxia and Korea-based SK Hynix.

A report by Bloomberg said that Apple has been testing chips from Yangtze Memory for months, but the deal has yet to be confirmed, with Apple currently weighing different options. In light of the recent price increases by Apple, one can be absolutely certain that Apple will announce - in weeks if not days - a major commercial partnership with YMTC which will aggressively undercut all of its flash competitors on price as it sees to catch up to Korean giants Samsung and SK Hynix.

Tyler Durden Thu, 06/25/2026 - 15:00
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Micron Soars After Reporting Blowout Earnings, Boosts Guidance

2026-06-24T15:19:08.104-07:00

Micron Soars After Reporting Blowout Earnings, Boosts Guidance

Step aside Nvidia: as we noted in our preview, with the world's most valuable company going nowhere in recent months, all attention has shifted to Micron, which has rapidly become one of the most important stocks in the world and certainly the most actively traded, surpassing both Nvidia and Tesla in recent days.

As such all eyes were on Micron's earnings today, and even with "sentiment at 11/10", according to UBS, the company still managed to blow away expectations for its Q3 earnings while delivering a sales forecast that topped Wall Street estimates after AI-fueled shortages of the components sent prices soaring.

Here is what it just reported for the just concluded May/Q3 fiscal quarter:

Starting with the bottom line...

Adjusted EPS $25.11, beating consensus of $20.49.

We then go to the top of the income statement:

Adjusted Revenue $$41.46BN, smashing all sellside estimates of $$35.69BN, and even well above the most optimistic buyside bogeys.
- Cloud Memory revenue $13.77 billion, beating estimate $10.69 billion
- Core Data Center revenue $11.52 billion, beating estimate $6.8 billion
- Mobile and Client Revenue $11.52 billion vs. $3.26 billion y/y, beating estimate $9.73 billion
- Automotive and Embedded rev. $4.63 billion, beating estimate $3.51 billion
Adjusted gross margin 84.9% vs. 39% y/y, beating estimate 81.9%
Adjusted operating income margin 81.2% vs. 26.8% y/y, beating estimate 77.9%
R&D expenses $1.32 billion, +36% y/y, higher than estimate $1.29 billion
Adjusted operating expenses $1.52 billion, +34% y/y, beating estimate $1.43 billion

Looking ahead, the company's forecast is just as impressive:

Micron sees Q4 adjusted Revenue of $49-$51BN, beating estimates of $43.24BN
Sees adjusted EPS $30 to $32, beating estimate $25.31
Sees adjusted gross margin about 86%, beating estimate 83.6%
Sees adjusted operating expenses about $1.65 billion, below estimate $1.66 billion

Commenting on the quarter, the company said that “Micron is investing at record levels in technology, products and supply to address our customers’ rapidly growing demand. We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance.”

More important was the company's discussion of its long-term agreements, i.e. "Strategic Customer Agreement". This is what it said in the accompanying presentation:

We are pleased to announce that we have completed 16 SCAs with customers across the data center, consumer and auto market segments. These SCAs accelerate the transformation of our business model, enhance partnership in technology and innovation, and provide customers with contracted supply assurance.
Typically, these agreements have a five-year term, from calendar 2026 through the end of calendar 2030. Automotive agreements generally have a three-year term.
The 16 signed agreements represent roughly 20% of our DRAM volume and a third of our NAND volume over this period.
These SCAs include four very large customers and three medium-sized customers.
The remaining agreements relate to smaller customers from the automotive industry and represent our commitment to this important sector.
When completed, we expect approximately half or more of our company revenue to be under these SCAs with customers across end markets. Our customers value our U.S. supply plans, and this is reflected in our SCAs.
These SCAs are structured as take-or-pay agreements, with binding commitments to purchase specific volumes over this multi-year term.
The largest agreements generally have a ceiling price for existing products at the current CQ2 (calendar Q2) market price, and a floor price through the term of the agreement.
Several SCAs, which account for a modest portion of the SCA-related revenue, include either fixed prices or have no price bands associated with them where pricing will be subject to market conditions. When all planned SCAs are executed, agreements with either fixed prices or price ceilings at or close to current CQ2 market prices are expected to be approximately 40% of our revenue.
For SCAs which do contain such price bands, pricing is designed to stay within this floor to ceiling level through the course of the term. This pricing visibility will help our SCA customers across market segments to better manage their business and grow their demand.
For our SCAs with price bands, the floor price enables a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle.
14 of the 16 SCAs that we have signed have a cumulative revenue at minimum price per our contracts of approximately $100 billion over the remaining agreement term.
They also strengthen our long-term financial performance, margins and free cash flow expectations, with higher visibility and improved stability in our business performance.
Under the SCAs we have signed so far, we project to receive cash deposits and related financial commitments of $22 billion. This further demonstrates customer commitment to this new business model. Mark will provide additional details.
Our SCAs with customers across data center to consumer devices to auto and industrial applications create a new paradigm for us to strengthen our customer relationships. They provide committed DRAM, including HBM as appropriate, and NAND supply to our customers over a multi-year time horizon.
In a period of significant shortage, this supply visibility is extremely beneficial to our customers. This visibility enables our customers to leverage SCA supply to make progress on their strategic plans, drive growth and enable their end consumers to benefit from their products and services. We are very appreciative of our customers, who have worked with us through this period of tight supply with a strong collaborative spirit to create win-win outcomes for the long term for the entire ecosystem and end consumers.

Micron and its peers in the memory space — Samsung Electronics and SK Hynix — have become major beneficiaries of the artificial intelligence boom. A spending spree by data center operators has stoked the appetite for both conventional memory and a newer variety called high-bandwidth memory, or HBM, that works with AI systems.

Micron has struggled to satisfy memory-chip demand, creating shortages in areas like computers, phones and cars. Though the company is expanding its manufacturing capacity, prices are expected to remain high for the foreseeable future.

Micron works with Nvidia to integrate its memory into AI infrastructure. Earlier this month, Nvidia Chief Executive Officer Jensen Huang confirmed that his company will rely on Micron’s HBM4 memory, along with those of its rivals, for its next-generation Vera Rubin platform. All three of the major memory makers have been jockeying for a slice of that business.

Meanwhile, SK Hynix, which currently leads the HBM market, just announced plans for a stock listing in the US. The company is seeking roughly $29 billion in the offering, aiming to further capitalize on memory demand.

In a note published by Goldman's analyst, James Schneider, he write the following post-earnings observations:

Key stock takeaways: We expect the stock to move higher following a quarter and guidance that were well ahead of the Street, despite elevated investor expectations given continued industry pricing momentum for both DRAM and NAND markets. We expect investors to focus on critical elements of management's commentary on today's conference call, including (1) additional color on the company's 16 Strategic Customer Agreements; (2) potential updates to the company's FY27 CapEx outlook; (3) market color on the conventional DRAM and NAD segments.
Quarterly results were well above the Street: Micron reported revenue of $41.46 bn, well above GS at $37.58 bn and the Street at $36.28 bn, while gross margin of 84.9% was above GS at 83.4% and the Street at 82.5%. Non-GAAP EPS of $25.11 was also well above GS at $22.07 and the Street at $21.05. DRAM revenue of $31.33 bn was well above GS at $28.30 bn and the Street at $28.21 bn, while NAND revenue of $9.94 bn was also above GS at $9.18 bn and the Street at $7.77 bn.
FY4Q guidance is well above the Street. Micron guided FY4Q well above the Street on revenue and margins. Revenue was guided to $50.00 bn at the midpoint, which is well above GS at $48.77 bn and the Street at $43.34 bn. Non-GAAP gross margin was guided to 86%, in line with GS at 86.1% and above the Street at 84.6%. Non-GAAP EPS guidance of $30.00 - $32.00 (midpoint of $31.00) was above GS at $29.95 and well above the Street at $25.77.
Read-through to our coverage: We expect a positive initial reaction for SNDK (Buy) in our coverage given similar end-market exposure.
Price target and risks: Our 12-month target price of $900 is based on a 18X P/E multiple applied to our normalized EPS estimate of $50.00. Key upside/downside risks include: (1) continued execution on the company's HBM roadmap and share gain vis-a-vis Samsung, (2) sizable step-up (above current expectations) in HBM content for AI accelerators, (3) continued signs of CXMT gaining DRAM market share, negatively impacting pricing dynamics.

In kneejerk response, the stock which slid in the past 2 days, has recovered most of the losses and has surged more than 10% rising to $1136 after briefly dipping below $1000 just before the market closed.

The company's investor presentation is below (pdf link)

Micron Q3 26 Earnings Deck by Zerohedge

Tyler Durden Wed, 06/24/2026 - 16:19
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The Burden Of History: Justice Jackson's Curious Call To Overturn Critical 2nd Amendment Precedent

2026-06-23T14:19:43.856-07:00

The Burden Of History: Justice Jackson's Curious Call To Overturn Critical 2nd Amendment Precedent

Authored by Jonathan Turley,

Since her confirmation in 2022, Justice Kentaji Brown Jackson has established a legacy that is fast becoming one of the most radical in the Court’s history. Her sole dissents have drawn sharp criticism from both her conservative and liberal colleagues. However, for critics of some of these decisions, Justice Jackson continues to publish opinions that are not just, as she describes it, cathartic but chilling. Worse yet, the latest judicial jump scare was shared by her colleague, Justice Sonya Sotomayor, in her concurring opinion in United States v. Hemani..

At issue in the case was an effort to prosecute Ali Hemani for recreational use of marijuana, a prosecution that threatened up to 15 years and to strip him of his gun rights under 18 U.S.C. § 922(g)(3)

Writing for the majority, Justice Neil Gorsuch ruled that the provision was not "consistent with the Second Amendment." Gorsuch noted that Hemani was not alleged to be a drug addict or to have used his guns in a menacing manner.

Gorsuch wrote that the "historical laws on which it relies targeted different kinds of people, did so for different reasons, and operated in different ways."

However, Jackson used the concurrence to argue for overturning NYSRPA v. Bruen, a case critical to laying the foundation for interpreting the Second Amendment based on historical precedent. Jackson lashed out at the"'history and tradition' metric" and called for the Court to "revisit" the case.

Declaring Bruen "unworkable," Jackson called for the restoration of the "means-end scrutiny - the approach courts applied before we adopted Bruen's 'history and tradition' metric - offers a more rational way of assessing the constitutionality of firearm regulations."

The reason for undoing Bruen? According to Jackson, "it imposes on judges the unfamiliar and difficult tasks of sifting through centuries-old evidence in order to answer 'contested historical questions,' and 'applying those answers to resolve contemporary problems.'"

Justice Jackson added that "Given those challenges, it is unsurprising that Bruen's test is vulnerable to inconsistent and arbitrary application, as judges draw different conclusions from the same historical evidence and reach divergent assessments of the same laws."

The burden of actually seeking to understand the intended meaning of a constitutional provision is certainly greater than the more free-style approach of Jackson who focused on how to "resolve contemporary problems" under a living Constitution. However, to suggest that her outcome-determinative approach is less inconsistent and arbitrary is only true when you control the Court with justices who have like-minded "solutions" for contemporary problems.

That is precisely what many Democrats have in mind as they openly pledge to pack the Court with an insistent liberal majority if they can retake power. Moreover, Jackson is often cited as the model of the left, a justice who is unburdened by the language and history of constitutional provisions.

Just last week, liberal Wisconsin State Supreme Court justices heralded Jackson’s approach in arguing for the restoration of race-based gerrymandering. The state jurists lamented not being able to interpret the Constitution to address the “harms this country has caused to those who are marginalized, disempowered, or disenfranchised,” including the “preference for White Americans and to burden Black Americans and those of other disadvantaged races or backgrounds.”

These federal and state Supreme Court opinions are a glimpse into what awaits the country if Democratic leaders carry out their threat to take over the Supreme Court by adding four liberal justices in the image of Justice Jackson.

It is not simply the desire to immediately overturn prior cases but to establish a largely untethered jurisprudence driven by judicial fiat and impulse. It is certainly an easier way to write opinions and would clear the way for a stated agenda on the left to maintain power indefinitely.

Before voters "unburden" these jurists, they need to seriously consider the costs of eviscerating an institution that has been vital in maintaining this Republic for the last 250 years.

Here is the opinion: United States v. Hemani

onathan Turley is a law professor and the New York Times best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.”

Tyler Durden Tue, 06/23/2026 - 13:45
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Definium Soars As Much As 50% After LSD-Based Depression Drug Meets Late-Stage Clinical Trial Goal

2026-06-22T14:19:09.529-07:00

Definium Soars As Much As 50% After LSD-Based Depression Drug Meets Late-Stage Clinical Trial Goal

Definium Therapeutics shares surged as much as 54% on Monday, reaching $37.90 in morning trading as investors reacted positively to developments in the biotech company's research pipeline and potential strategic opportunities.

Definium Therapeutics said its LSD-based depression drug, DT120, met the main goal of a mid-stage trial, reducing depression scores by 8.1 points more than placebo after six weeks, according to Reuters.

Patients showed improvement within one week after a single dose, with benefits remaining at 12 weeks. Analysts had said a 4–5 point placebo-adjusted improvement would be a strong result.

DT120, a psychedelic that activates serotonin receptors, was generally well tolerated, with mostly mild side effects occurring on dosing day and no serious safety concerns.

The trial included 149 adults with major depressive disorder, a condition affecting about 21 million U.S. adults. Recent U.S. policy has also encouraged faster development of psychedelic-based mental health treatments.

We noted back in April that psychedelic stocks were going "mainstream", pointing them out as one of the more interesting policy-driven biotech themes, arguing that a supportive regulatory backdrop could become a meaningful catalyst for the sector.

Since then, momentum has accelerated. The FDA unveiled new measures to speed research into psychedelic treatments for serious mental health conditions, while President Trump signed an executive order directing federal agencies to expand access to promising emerging therapies. The moves could accelerate development timelines for treatments targeting depression, PTSD, addiction, and other difficult-to-treat disorders.

Tyler Durden Mon, 06/22/2026 - 15:45
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