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Beijing Moves Down The AI Stack: After GPUs, China Is Coming For Broadcom's Switches

Xi Jinping lands in Washington for a state visit today, but as Bloomberg sums up the mood in one line: the two leaders "may find common ground on AI safety, but neither is willing to give ground in the technology race." And right on schedule, the FT reports that Beijing has started counting Broadcom switches.

According to the FT, China's State-owned Assets Supervision and Administration Commission (SASAC), which oversees the country's state-owned companies, has spent recent weeks surveying how much Broadcom switching gear is installed in state-controlled data centres. The count came back... high: "The survey found that the penetration rate of Broadcom switches among state-owned companies could be as high as 90 per cent, one of the people said."

The exercise supports Beijing's "domestic chips for domestic use" campaign. The initial findings could lead SASAC to issue "informal guidance" telling state data centres to cut back on Broadcom. In Beijing, informal guidance tends to carry the weight of a formal order.

Why switches, and why now

Switches get little attention in the AI boom, but they decide whether 10,000 accelerators work together as one training cluster or sit around as 10,000 very expensive heaters. Broadcom's merchant Ethernet silicon dominates that layer worldwide. Nvidia and Huawei also sell high-end switches in China, but Nvidia is already barred from state-backed data centers. That leaves Broadcom as the last major American supplier embedded in China's state AI build-out.

SASAC is also looking at how Broadcom sells, not just how much. Per the FT, the agency is checking whether Broadcom used its market lead to bundle products or require purchase commitments of up to tens of thousands of switch chips. Those terms allegedly limited how much H3C and Ruijie Networks could buy from other vendors such as Huawei. H3C and Ruijie are the preferred vendors on the procurement lists behind billions of dollars in annual public-sector IT spending. If that line of questioning sounds familiar, Beijing used the same approach last year when it found Nvidia had breached antimonopoly law over its Mellanox deal. Mellanox is, notably, a networking business.

Two caveats from the FT story: 

• Private operators are exempt. ByteDance and Alibaba are not covered, so the rule doesn't reach the companies doing most of China's frontier training.
• Nothing gets ripped out. Existing gear stays in place. One rack-maker sales rep described the policy as "part of a broader policy to 'nationalise the supply chain'." In practice, that means a replacement cycle rather than a purge.

The stakes for Broadcom

According to its latest 10-K, 17% of Broadcom's FY2025 revenue (about $10.9bn of $63.9bn) came from shipments to China including Hong Kong. That was down from 20% a year earlier. Much of that figure is ship-to accounting for contract manufacturers assembling gear for non-Chinese customers, so true Chinese end-demand is smaller. AVGO rose about 0.5% on the headline, which suggests traders don't see much damage. Sure enough, while the near-term P&L hit is modest but the strategic cost is bigger: switching is set to become a multibillion-dollar market inside China, and it is being set aside for domestic suppliers.

The bigger picture: Goldman's numbers on China's self-reliance push

Goldman's recent research shows how quickly the domestic stack is filling in:

• The demand side is large. Goldman's desk points out that China's domestic AI chip market is "quietly gearing up for a staggering 69% compound annual growth rate through 2030." GS Research's CHIPS IV forecasts China semiconductor capex rising +13% / +15% / +15% in 2026–28, driven by memory and advanced-node capacity.
• The foundry is full. In the SMIC note (available to pro subs here), Allen Chang says SMIC grew revenue 20% QoQ in 2Q26. That was the fastest among the global top-10 foundries, whose aggregate growth was 11.5%. Chang attributes it to "China's strong AI demand and customers diversifying their suppliers to better secure capacity." Utilization is expected to stay above 95% through 2H26, new wafer pricing takes effect in 3Q26, and 54–71% of capex goes to 7nm and advanced nodes. Goldman expects no ASP declines because there's no spare capacity to discount.

• The private sector is localizing without being told to. In the Alibaba note after the Apsara conference (available here for pro subs), Golman analyst Ronald Keung forecasts capex of Rmb209bn / 243bn / 260bn for FY27–29E and a cloud power footprint of 20GW by 2032, supported by "unique cost advantages from its custom T-head silicon." Alibaba is exempt from the SASAC push, yet it is building its own chips anyway.
• Policy points the same way. Goldman chief China economist Hui Shan writes that policymakers are "focused on advanced manufacturing rather than broad-based easing." So while consumers deal with a housing slump, the fabs keep getting funded.

Put Goldman's research next to the policy timeline and the pattern is clear:

• August 2025: New data centers told to source at least 50% of chips locally.
• September 2025: Big tech told to stop buying Nvidia's China-specific chips, and regulators issued the Mellanox antitrust finding.
• November 2025: State-funded data centers banned from using foreign AI accelerators (Reuters).
• June 2026: A reported ~2 trillion yuan ($295bn) national compute plan through 2028 with an 80% domestic-content target (TechTimes).
• September 2026: The survey of switches, one of the last foreign-made layers left.

On the supply side, Huawei used last week's Huawei Connect to lay out an Ascend roadmap of the 960 in 2027, 970 in 2028 and 980 in 2029. It also showed an Atlas 960 SuperPoD that links 4,096 NPUs over its proprietary UnifiedBus interconnect, which means its networking is in-house too (Irish Times). DeepSeek reportedly plans to deploy at least 160,000 Ascend 950DTs. Huawei has raised 950DT prices by 60%, citing "tight component supply," which suggests pricing power is not an American monopoly either.

The catch: domestic gear costs more to run

Industry experts told the FT that Huawei's switches are less energy-efficient than Broadcom's, which means higher power bills for users. That matches Goldman's SMIC work: with utilization above 95% and no price cuts coming, "domestic" currently also means "capacity-constrained and not cheap." China's workaround is to build power generation faster than anyone else, which they've done this admirably.

And unlike the US, China has the electrical capacity to build all of this. China has 4000GW of total power generation and growing 20%. The US is at 1200GW and flat (with PJM and ERCOT nearing capacity) https://t.co/mEwD3LzvXs pic.twitter.com/p0xFKqeEAB

— zerohedge (@zerohedge) September 23, 2026 Bottom line

Export controls were meant to keep China a generation or two behind in AI hardware. They did slow progress in places, but they also gave Beijing both a reason and the political cover to replace every layer of the stack: accelerators, foundry, memory, interconnect and now switches. Each layer runs slower and hotter than its US counterpart, but it is Chinese-made. The market Broadcom has lost is small this year and likely to shrink further. Goldman's 69% CAGR figure describes a market growing quickly, and US suppliers are increasingly shut out of it.

Tyler Durden Wed, 09/23/2026 - 18:00

Missouri Congressional Map Returns To Supreme Court For Third Time

Authored by Aldgra Fredly via The Epoch Times,

The dispute over Missouri's new congressional map returned to the Supreme Court for the third time, with justices considering whether the state can use the GOP-backed map in the midterm elections.

The new map could help Republicans gain an additional U.S. House seat in the Nov. 3 elections.

The Supreme Court has twice prevented the state from using the redrawn congressional map, most recently on Sept. 10, when it granted the opponents' bid to stay a federal judge's order allowing the state to use the map in the midterm elections.

People Not Politicians, the group opposing the redrawn congressional map, filed an emergency motion with the U.S. Supreme Court on Sept. 22 after the U.S. Court of Appeals for the Eighth Circuit ruled that using the 2022 map in the Nov. 3 general elections would be unconstitutional, as the state had already used the redrawn 2025 map in the August 2026 primaries.

In a Sept. 21 ruling, the Eighth Circuit ordered U.S. District Judge Stephen Clark to enter a permanent injunction barring Missouri Secretary of State Denny Hoskins from using any congressional map other than the one the Legislature approved in 2025.

The federal appeals court stayed its ruling until Sept. 28 to allow time for a Supreme Court review.

Opponents asked the Supreme Court to block the ruling, saying it undermined the court's previous injunction blocking the use of the 2025 congressional map.

"The Eighth Circuit's order does not merely undermine this court's stay order; it requires the district court to issue a permanent injunction granting the exact same relief this court stayed in the exact same case," the motion stated.

The motion asks the Supreme Court to clarify that its Sept. 10 stay "precludes enforcement of the replacement injunction - or any additional federal court injunctions contrary to the stay order - so long as that stay remains in effect."

Opponents also argued that the Eighth Circuit lacked jurisdiction to enter the ruling.

"The Eighth Circuit cannot disrupt an imminent election after ballots have been cast by issuing relief that this court has already foreclosed and that it lacked jurisdiction to grant, all based on a merits theory of the panel's own invention," they said.

The Supreme Court gave supporters of the new map until midday on Wednesday to respond to the latest appeal.

The 2022 map, drawn by the General Assembly after the 2020 census, was designed to give Republicans a 6-2 edge. The 2025 map, drawn as part of a mid-decade redistricting, was designed to give them a 7-1 advantage.

Missouri held primary elections on Aug. 4 using the 2025 Missouri First map approved by the Republican-controlled General Assembly. President Donald Trump supported the redrawn map.

Tyler Durden Wed, 09/23/2026 - 17:40

Senate Panel Rejects Immunity For Ex-Fauci Aide

The Senate Committee on Homeland Security and Governmental Affairs rejected on Sept. 23 a bid to seek immunity for a longtime special assistant to Dr. Anthony Fauci.

The vote on a resolution authorizing an application for a court order compelling testimony under immunity from the assistant, who was not identified, fell short of the required two-thirds of members.

All eight Republicans, but no Democrats, voted in favor. Two Democrats would have had to cross the aisle for the resolution to be approved.

Fauci, 85, headed the National Institute of Allergy and Infectious Diseases from 1984 to 2022.

He refused to answer questions before the panel earlier in the year, citing the Fifth Amendment, prompting the committee to refer him for contempt of Congress to federal prosecutors.

The Department of Justice has not charged Fauci with any crimes.

As Zachary Stieber reports for The Epoch Times, the female assistant worked for Fauci from 2007 to 2022, according to Sen. Rand Paul (R-Ky.), the committee's chairman.

He said her position "placed her in the flow of communications directly relevant to our investigation" into Fauci.

She recently appeared behind closed doors before the committee and invoked the Fifth Amendment, or her right against self-incrimination.

The questions senators want answered primarily deal with the destruction of government records, Paul said. A doctor who was a longtime adviser to Fauci recently pleaded guilty to conspiring to delete government records. Fauci has directed subordinates to delete emails.

Sen. Maggie Hassan (D-N.H.), who voted against the resolution, said before the vote that senators should pursue a "good-faith bipartisan approach to obtain this information" rather than rush to approve the resolution.

Republicans expressed frustration and anger that only Hassan among Democratic panel members was present during the meeting.

"I come from the private sector. To not show up to a meeting, to say 'I refuse to do my job,' is something that only happens in politics," Sen. Bernie Moreno (R-Ohio) said.

"That is outrageous."

After the vote, Paul said:

"A majority of the committee voted to seek the truth. All Republicans voted to seek the truth. We voted to protect this witness and hear her story. All we needed was two Democrats who wanted to hear her story, but not a single one of them is interested in the investigation or the truth about destruction of federal records."

Hassan said that was a mischaracterization of the Democrats' position.

Paul said he would be sending a letter to the Department of Justice requesting pursuit of the matter, and said his committee's investigation into government record destruction will continue.

Tyler Durden Wed, 09/23/2026 - 17:20

Trump Meets Venezuela's Rodriguez In New York

Authored by Kimberly Hayek via The Epoch Times,

President Donald Trump and Venezuela's interim President Delcy Rodriguez met Tuesday night on the sidelines of a United Nations reception, their first face-to-face talks since American forces seized then-President Nicolas Maduro in January.

Venezuela's Interim President Delcy Rodriguez and U.S. President Donald Trump (R) meet on the sidelines of the U.N. General Assembly in New York on Sept. 22, 2026. Venezuela Presidential Palace Handout via Reuters

The pull-aside was booked for 7:40 p.m. at a gathering Trump is hosting during the U.N. General Assembly. No joint appearance was planned nor a detailed agenda released.

Participants in the pull-aside meeting with Rodriguez included State Secretary Marco Rubio, Treasury Secretary Scott Bessent, White House Chief of Staff Susie Wiles, and White House Chief of Staff Stephen Miller.

"We held a historic meeting with the President of the United States, Donald Trump, during which we discussed strengthening the bilateral relationship between our countries and advancing a cooperation agenda in strategic areas such as energy, mining, security, and other matters of mutual interest," Rodriguez said in a statement on Telegram.

"We expressed our gratitude to President Trump and his administration for the steadfast support provided during the emergency caused by the earthquakes of June 24, as well as for their backing of our country's reintegration into multilateral forums," she wrote, according to a translation. "Venezuela and the United States share a historic relationship that, in this new phase, we are called upon to steer through dialogue. We will continue to pursue a diplomacy that serves the national interest, aimed at achieving concrete results and collective benefits for the Venezuelan people."

Rodriguez landed Monday for what is her first trip to the United States since taking office. She is scheduled to address the General Assembly on Wednesday afternoon.

U.S. Ambassador to the United Nations Mike Waltz told reporters about the upcoming meeting on a call.

"The president will host a U.N. General Assembly leaders' reception. There, he'll participate in a pull-aside with the acting president Rodriguez of Venezuela," Waltz said. He did not say what they would discuss.

Trump spoke to the General Assembly on Tuesday morning, hours before the reception, where he called Maduro an "outlaw dictator," adding that hundreds of political prisoners had been freed since the capture. Trump pointed to the January raid as proof Washington would use its "unmatched military might" to protect its interests in the Western Hemisphere.

"To the victor belong the spoils," he said, calling an oil deal his administration signed with Caracas last month "perhaps the biggest deal ever made."

He has said he wants $100 billion in investment to flow into Venezuela's oil industry.

On Sept. 16, Trump removed Venezuela from the U.S. list of countries that have failed to combat drug trafficking. The country had been on that list since 2005.

"Given the positive steps taken under interim President Delcy Rodríguez, I have determined Venezuela should no longer be designated as having failed demonstrably to fulfill its drug control commitments," the presidential determination said. "I expect to see continued, measurable progress from the interim government in dismantling narcoterrorist groups and stopping drug trafficking through Venezuela to the United States."

Last month the two governments signed an energy agreement covering 65 billion barrels of reserves. Trump called it in a Truth Social post "the biggest oil deal in world history."

Rodriguez said the pact is meant to last 25 years and to develop 17 strategic oil fields with a production target of more than 1.5 million barrels a day.

"This deal is a huge win for both the American and Venezuelan people," Secretary of State Marco Rubio wrote on X.

Rodriguez, 56, was born in Caracas and trained as a lawyer. Maduro named her vice president in 2018. U.S. forces captured Maduro and his wife, Cilia Flores, on Jan. 3 and flew them to the United States on narcoterrorism and drug charges. Venezuela's high court then designated Rodriguez interim president. Maduro has pleaded not guilty.

Reuters contributed to this report

Tyler Durden Wed, 09/23/2026 - 17:00

Iran Vows To 'Paralyze' Regional Airports Which Prevent Its Flights From Landing

Facing crippling US sanctions against its aviation sector as part of the Trump/Bessent Economic D-Day initiative, Iran is warning that if regional countries join the sanctions action, their own airports could be targeted.

Iran's Supreme National Security Council has on Wednesday put neighboring states who are allies of Washington on notice. The statement warned their airports will be "paralyzed" if they cooperate with US attempts to prevent the landing of Iranian airliners. 

Source: Government of Kuwait

Treasury Secretary Scott Bessent declared on Monday that by Wednesday. Sept. 23, "all the Iranian airlines will be shut down around the world."

He warned that any airports or companies providing fuel, landing, and ticketing for sanctioned Iranian entities risk dollar-system exclusion.

Already Turkey has taken the dramatic action of canceling all flights in the foreseeable future for various Iranian carriers.

According to more of the Iranian Supreme National Security Council statement, delivered via its chief, Mohsen Rezaei, "We ask all the countries of the region not to join America’s adventure. If they do not allow Iranian aircraft to travel, their own airports will not be able to have flights either."

"You are our friends, but you should not join America’s ranks. You should prevent the war from spreading," he added. Throughout the prior seven months of war with the US, Iran has shown a willingness to target major civilian hubs, particularly in neighboring Kuwait.

Iran is defiantly planning to press forward with its commercial airline operations. While some countries are complying with the US order, China is clearly not...

An Iranian Mahan Air flight from Tehran landed in Guangzhou, China today, Sept. 23 as new U.S. aviation sanctions took effect, flight Radar shows.

China is clearly not caring about US sanctions. pic.twitter.com/g990JZ4SLz

— Open Source Intel (@Osint613) September 23, 2026

As for the heavily sanctioned Iranian aviation industry, in recent years the Islamic Republic has suffered some significant aerial disasters, which included the May 19, 2024 death of President Ebrahim Raisi. His military helicopter went down in a rugged, mountainous area of northwestern Iran.

Some speculate that lack of airline parts and aging aircraft, due to the long-standing US targeting of the industry, has only served to increase the chances of aviation disasters.

Tyler Durden Wed, 09/23/2026 - 16:40

Shareholders Sue New York Times Over 'Biased' Israel Coverage

Authored by Zachary Stieber via The Epoch Times,

Shareholders sued The New York Times on Sept. 23, alleging the company has failed to prevent false reporting about Israel and other topics.

The State Board of Administration of Florida, representing the Florida Retirement System Trust Fund and National Center for Public Policy Research, filed the lawsuit in a New York court.

"The Company's repeated publication of materially false or baseless factual assertions, many later admitted internally or disproven externally, supports a reasonable inference that the Board has not only failed in its obligation to monitor the Company's internal controls, but it has allowed such flagrantly selective application of the internal controls to support the conclusion that in the absence of any Board-level oversight, journalistic standards have been weaponized within the Company to serve the personal agendas of unchecked editors," the 48-page filing says.

Shareholders said that a whistleblower reported problems to the company's internal channel for such issues in November 2023.

"I feel that I'm on a desk that is particularly biased against Israel ... I can't tell if the Masthead does not see that our desk is biased, does not see it as a problem to be resolved, or just hasn't figured out how to get a handle on it," the whistleblower was quoted as saying.

The person later presented 26 slides to a standards editor that described how the paper had rejected footage from a source because the source was "pro-Israel" and how a freelancer's praise of Hitler was downplayed as "just some jokes."

The whistleblower's concerns, later expanded to include questions about the lack of a promised training on anti-Semitism, and the hiring of a freelancer who said he "supports the Palestinian struggle against occupation," did not prompt any changes, according to the filing.

One incident outlined by shareholders was how The New York Times included a photograph of a child in its 2025 article, "Gazans Are Dying of Starvation," without disclosing that the child had pre-existing health conditions, as Getty Images had noted days prior in captions of pictures of the child.

The paper later updated the photo's information and said that "after publication of the article, The Times learned from his doctor that Mohammed also had pre-existing health problems."

Evidence shows that controls the company promotes to the public, including standards review before content is published, are not working, as that and other incidents show, the lawsuit says.

It requests the court order The New York Times to show shareholders materials they requested to see in August, including all versions of the paper's editorial standards since Jan. 1, 2020.

"This lawsuit has no merit and was brought for an improper purpose," a spokesperson for the paper told The Epoch Times in an email.

"Although it is positioned as a corporate governance petition to inspect the company's books and records, it is a transparent attempt to exert agenda-driven pressure against an independent media organization, level false allegations of bias and chill journalism protected by the First Amendment. We will defend against the suit vigorously."

Tyler Durden Wed, 09/23/2026 - 16:20

Only 7% Of Voters Rank Data Centers As A Top Political Issue; New Survey Finds

Authored by Bryan Hyde via American Greatness,

A new poll from the Rainey Center for Public Policy shows just 7 percent of registered voters view data centers as a top-three national political issue, confirming that fewer than 10 percent prioritize them at the federal level.

The Washington Examiner reports that the survey of 1,004 registered voters found that found that national concern over data centers remains low with artificial intelligence itself drawing just 12 percent support as a top issue.

The poll was conducted between Sept. 10 and 14, after former Anthropic researcher Jacob Coxon quit his role and warned of the existential threat of AI, sparking a nationwide conversation about AI regulation.

Voters have a clear ask: build it right. 71% support requiring data-center operators to sign community benefits agreements - covering things like jobs, tax revenue, and grid upgrades - before construction begins. Read our September Policy Survey: Summary of Findings - link in... pic.twitter.com/gb1O7nDMUx

— Rainey Center (@RaineyCenter) September 20, 2026

Fifty-seven percent of survey respondents listed "grocery prices, gas and household utilities" as the most salient issue, followed by 30 percent listing jobs and the economy, and 20 percent listing affordable housing.

The poll showed AI as the 13th-most salient issue, directly following energy costs and transgender issues in schools and sports, with data centers being built in communities coming in as the 15th-most salient issue, behind cybersecurity.

According to PBS Newshour , while voters do not rank data centers high on national political agendas, opposition spikes dramatically when facilities are planned nearby.

Fifrt-eight percent of voters say new tech data centers have a mostly negative effect on the country and 65 percent of voters oppose building these facilities in their own communities.

Meanwhile 25 percent of voters say they support local data center construction.

The polling results follow a week of federal and state lawmakers debating how and whether to proceed with additional AI regulations in the face of calls for guardrails on their own industry from frontier AI lab leaders , according to the Washington Examiner.

When questioned on what specifically should be the top three priorities for lawmakers on data centers and AI, 48 percent of survey respondents responded "holding AI companies liable for harms," while 38 percent answered that "data centers pay their own electricity."

National leaders remain largely divided on the issue, with President Donald Trump calling on people to ignore the calls for new guardrails because of the United States' AI race with China.

Tyler Durden Wed, 09/23/2026 - 15:40

'Mr.Gold' Warns Higher Rates Will Blow Everything Up

Via Greg Hunter’s USAWatchdog.com,

Financial writer and precious metals expert Bill Holter (aka Mr. Gold) has warned for years about what happens in the end when a debt bubble pops. 

Mr. Gold explains, “This bubble is like any other bubble in mankind’s history..."

"  In the 1920s, credit was extremely easy.  When credit tightened, it was the wealth effect in reverse.  We saw this again in the early 1970s.  We saw this again in the 1987 crash.  Interest rates went from 7% to over 10% . . . and that bubble popped.  We had the emerging market debt problem back in the early 1990s, Long Term Capital in 1998, the Dot Com bubble in 2000, the 2007-2008 Great Financial Crisis, and all you have to do is look at a chart of bond yields and you’ll see that each time yields spiked, those bubbles popped.  Right now, interest rates are spiking, and this is the biggest bubble. 

This is the everything bubble.  Everything is in a bubble.  The only things that are not in a bubble are gold and silver because they are real money. 

I think gold and silver are reflecting the risk of the debt structure coming down. 

From a global standpoint, countries are moving away from the dollar.   They don’t want to be trapped in the dollar system.  The dollar is the world reserve currency that is issued by an insolvent bankrupt entity. 

Higher rates, that’s what is going to blow everything up, higher rates.”

Mr. Gold says the rates can fall back down in a hurry if the economy starts to skid. 

Mr. Gold also says the so-called “reset” you have been hearing about for years is real.  It cannot be stopped, but it is an unfolding process right up until the very end.  Holter says:

“The reset is not a pushed button until the very, very end.  That very, very end is going to be a weekend where you go to bed Friday and things look normal, and on Monday morning, the whole world will have changed. . .. Rising interest rated have happened hundreds of times in history.  That is not the reset. 

The reset is when those rising rates affect the existing debt in the system, and that debt fails and collapses. 

Of course, you can add in derivatives, and the reset is really a wipeout of wealth.  It’s the wipeout of the population’s wealth.  Along with that goes the ‘Great Taking.’  They started putting these laws on the books in 2014 knowing there was going to be a huge rug pull at some point.  They made it legal for brokers, banks and insurance companies to take client assets . . . to save the corporations. 

What does that do to the population?  The population becomes penniless.  If you are not protecting yourself, you are going to get swept up in the wave of the Great Reset.”

Holter says the Deep State wants total control, which is why there is a big push to go all digital. 

Holter says buying gold and silver is not about making money but protecting purchasing power and a defense against the Great Reset. 

Holter says, “If you lose 50%, you have to make 100% to get back to break even.  This is not going to be a time that you lose 50% and then things will start going back up again..."

"  Because of the debt all over the world, when the debt breaks, the financial system is going to break. 

If you have counterparties between you and your capitol, you are going to lose your capitol. 

People ask, how much do I put into gold and silver, and I say put in what you don’t want to lose. 

Gold and silver are the only money on the planet that cannot bankrupt in a world that is bankrupting. 

If you had this (gold) mindset since 2000, you are way ahead of the pack compared to the S&P or the DOW.  There was zero default risk. 

When you bought gold, you got the biggest return and took the lowest risk.”

There is much more in the 44-minute interview.

Join Greg Hunter of USAWatchdog as he goes one-on-one with financial writer and precious metals expert Bill Holter/Mr. Gold as he warns of the Great Reset and the Great Taking that will come with it for 9.22.26.

Tyler Durden Wed, 09/23/2026 - 15:05

"This Nor'easter Is Going To Be An Ordeal"

The US East Coast has avoided any tropical development so far this year, but a developing nor'easter in the Atlantic just off the North Carolina and Virginia coast could still deliver hurricane-force winds and heavy rain, with the greatest impacts expected in the Northeast later this week and into the weekend. 

"Oh, this Nor'easter is going to be an ordeal. This storm will be a monster and will be lashing the coast for several days. Thank your lucky stars this isn't January because it would be the most epic blizzard," meteorologist Ryan Maue wrote on X, adding, "Maybe it's a harbinger of 'bomb cyclones' to come this winter?"

Oh, this Nor'easter is going to be an ordeal.

This storm will be a monster and will be lashing the coast for several days.

Thank your lucky stars this isn't January because it would be the most epic blizzard.

Maybe it's a harbinger of "bomb cyclones" to come this winter? pic.twitter.com/gxOADbTznO

— Ryan Maue (@RyanWeather) September 22, 2026

The nor'easter formed earlier today off North Carolina and Virginia and is forecast to strengthen as it moves north along the coast, potentially bringing severe weather to coastal areas of the Mid-Atlantic and Northeast.

Nor’easter: brace for 50 mph wind gusts and 15 ft waves! 🌊

It's going to be a rough ride for the East Coast.

The storm's worst will probably lash the corridor from New York to Boston this weekend, with coastal flooding a primary concern because of high tides and strong winds. pic.twitter.com/BCAjWa9x25

— Ben Noll (@BenNollWeather) September 23, 2026

"This will be a long-duration storm for many areas along the Mid-Atlantic and New England coasts, with impacts beginning along the central Atlantic coast at midweek, spreading to New England on Friday and lasting through the weekend in some areas," AccuWeather wrote in a report. 

⚠️🌊🌬️ Coastal Flood Warnings & Advisories are in effect for most of our tidal areas through Thursday night or Friday to highlight the widespread minor to moderate tidal flooding expected at high tides. Northeast winds gusting up to 50 mph along the coast through Thursday. (1/2) pic.twitter.com/njQ5fbJsfK

— NWS Mount Holly (@NWS_MountHolly) September 23, 2026

On Saturday, the worst of the storm is expected across southeastern New England, particularly Massachusetts. Local outlet NBC Boston warns that the Boston metro could expect  5 to 8 inches of rain between Friday and Sunday, while Cape Cod could see conditions on par with a tropical storm. 

"If the low shifts close to Boston, this becomes a massive event with 60 to 70 mph wind gusts, heavy rainfall, major storm surge and significant disruptions to Boston Harbor and the Massachusetts coastline," Fox Weather wrote in a separate report. 

[Potential Coastal Storm Fri-Sun] After a dry week we are tracking an early season nor'easter Friday to Sunday bringing rain, strong to damaging wind gusts, as well as coastal flooding/beach erosion. pic.twitter.com/uSpZFiUx8c

— NWS Boston (@NWSBoston) September 23, 2026

"The nor'easter could take on some characteristics of a tropical storm," AccuWeather warned. 

Tyler Durden Wed, 09/23/2026 - 14:45

China's Quad-G Plan For Global Hegemony Involves The UN And AI

Authored by Anders Corr via The Epoch Times,

The regime in China denies that it has plans for "hegemony or expansion," but its history - from the peasant land seizures of the 1920s to claims on the entire South China Sea today - is replete with land grabs and territorial expansion.

Starting in 2021 with its first of four global initiatives, the Chinese Communist Party (CCP) has used ideas for such initiatives and Beijing-led international organizations as engines to extend its expansion toward its long-held goal of global hegemony.

The CCP's four global initiatives are ostensibly related to development, security, civilization, and governance. They are meant to seem palatable to the international community while integrating the United Nations and other forms of global governance into the CCP's own system, with itself in the lead.

The initiatives are currently expanding and strengthening. On Sept. 12, China expanded the digital element of its Global Development Initiative (GDI) by inviting additional countries to join its World Artificial Intelligence Cooperation Organization (WAICO). The organization was founded in July and is headquartered in Shanghai.

CCP leader Xi Jinping gave the keynote speech at the event. He called for "true multilateralism," which analysts interpret as a justification for a parallel global order with Beijing in the lead.

WAICO already has approximately 30 member countries, including Russia and Iran. It serves as a key economic and intelligence initiative led by Beijing to expand the CCP's global influence by promoting China's AI software and cloud infrastructure.

The more countries use China's AI assets, the more Beijing's authoritarian approach to AI is normalized, and the more opportunities for global espionage and influence open up for China's military and intelligence agencies.

More generally, the GDI uses a wedge strategy to increase the CCP's influence in countries by aligning development aid with the U.N. Sustainable Development Goals (SDGs). The resulting influence can then be expanded through larger Belt and Road Initiative projects such as ports, trains, roads, pipelines, and digital infrastructure.

This broader penetration turns countries toward joining the BRICS group, originally Brazil, Russia, India, China, and South Africa, and now including Iran, among others. The group is economically dominated by Beijing, which expects BRICS countries to follow the CCP's lead on relatively anodyne statements such as Middle East peace, as well as on more substantial international projects such as AI development and efforts to shift world trade away from the U.S. dollar. Xi has personally invited BRICS countries to join WAICO.

The Global Security Initiative (GSI) overlays China's preexisting military partnerships, such as the Shanghai Cooperation Organization (SCO), with the vision of a "common" security led by the CCP. The Beijing Xiangshan Security Forum, a key vehicle for extending the GSI to influential international military stakeholders, took place from Sept. 15 to Sept. 17. One subject during the forum was reportedly "the impact of AI on future warfare."

The threat posed by the GSI and its networking with military and economic partners is real and current. Iran supports the GSI and is a member of the SCO. On Sept. 12, news broke that Chinese entities, most likely with the approval of the CCP, provided Iran with satellite images of U.S. forces in Jordan. Those images likely assisted Iran's missile attack that killed three U.S. troops in July.

China has also provided Iran with dual-use components and fuel precursors for its missile and armed drone technologies used against Israel, Saudi Arabia, and Ukraine. Other than U.S. sanctions against a few Chinese companies, there were few repercussions imposed on the regime in China for providing Iran with dual-use items and satellite intelligence during a war. This signals to Beijing that it can provide the same to other SCO and BRICS countries in the future simply by changing the names and addresses of the Chinese entities involved.

Afghanistan, which hosts al-Qaeda terrorists, is an observer nation in the SCO and could also receive Chinese intelligence or equipment for use against the United States, Pakistan, or India. Beijing has long had a positive relationship with the Taliban in Afghanistan, which has suppressed non-Pashtun ethnicities in the country.

This accords with Beijing's Global Civilization Initiative (GCI), which claims to create a more pluralistic world in part through supporting the sovereignty of dictators even as they stifle free markets, speech, and diversity within their own countries.

When Xi announced the GCI in 2023, he hypocritically said: "We advocate the common values of humanity. Peace, development, equity, justice, democracy and freedom are the common aspirations of all peoples. Countries need to keep an open mind in appreciating the perceptions of values by different civilizations, and refrain from imposing their own values or models on others and from stoking ideological confrontation."

The hypocrisy of this position is evident because then and now, Xi's regime militarily threatens democratic Taiwan; steals maritime territory from the Philippines, Vietnam, and other South China Sea claimants; takes Himalayan territory from India by force; and destroys the freedoms of religious minorities like the Uyghurs, Christians, and Falun Gong within China.

Now, with the CCP's four global initiatives, this violent illiberality threatens to scale globally. Xi unveiled his Global Governance Initiative (GGI) last September at an SCO meeting in Tianjin. It promotes international law with the CCP in the lead and a coordinating function for the three prior initiatives.

According to Chinese state media, "Viewed as a unified framework, the four initiatives form a 'four-in-one' interactive structure: development as the foundation, security as the guarantee, civilization as the bond, and governance as the coordinating mechanism - all serving the overarching objective of building a community with a shared future for humanity."

The CCP's "community with a shared future for humanity" sounds acceptable on first blush but can be directly compared to Imperial Japan's "Greater East Asia Co-Prosperity Sphere" in that both used anti-colonial rhetoric and regional economic integration to try and replace "Western hegemony" with an illiberal hegemony of its own making, led by an authoritarian and territorially aggressive power.

What could be called the CCP's Quad-G Plan for global hegemony is dangerous to free markets, human rights, and democracy. The CCP is a totalitarian political party attempting to use the large economy of China, its diplomats, an international AI norms-setting body, and an already-existing international institutional structure at the United Nations and elsewhere as the power and tracks for moving an established U.S.-led international system with true sovereignty for members toward a global and illiberal hegemony with Beijing at the center.

The CCP's Quad-G approach raises questions about whether U.S. national security and the safety of democracies everywhere necessitate significantly reducing the CCP's influence at the United Nations and other international organizations, as well as expanding sanctions from targeting a few Chinese entities to targeting China as a whole.

Options at the U.N. include canceling the visas of China's U.N. diplomats, as was done to Iranian diplomats in 2014 and 2020, to working to return China's seat at the forum to democratic Taiwan. Though Taiwan does not currently propose this, other more powerful countries and groupings, including the United States, the European Union, and the G7 countries, should consider encouraging this idea to more effectively counter the CCP.

The more democratic countries legitimize the CCP by engaging with it diplomatically, the more latitude it has to influence other countries to depend on its financing, join CCP-led international partnerships, and fall in line with Beijing's proposals to international organizations. This acclimates them and others to further accept the CCP's leadership and its preferred authoritarian forms of global governance, with Beijing at the center.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden Wed, 09/23/2026 - 14:25

Kalshi's $5,499 Question: Wash Trading, Or A Subsidized Volume Machine?

Kalshi's Ethereum perpetual futures contract has a favorite trade size, and it's $5,499.

A CoinDesk analysis published Monday pulled 3,450 trades in the contract, a futures product with no expiry that tracks the spot price of ether, from 23 one-hour windows between September 17 and 20. Of those, 1,406 landed within $2 of $5,499. That's $7.7 million of the $13.5 million sampled, or 57% of the dollar volume. Bitcoin perpetuals showed the same thing with different numbers: trades near $2,500 and $5,000 made up 54% of the $8.5 million sampled. Going back to June 19, CoinDesk found a recurring size on 43 of 46 sampled days, with the magic number migrating from $4,999 to $9,999 to $3,999, $4,499 and $5,499.

The fight started when Beni, a pseudonymous quant and co-founder of Stealth Neolab, posted that Kalshi's ether perp was printing $539 million of 24-hour volume against $3.1 million of open interest, a ratio of 174 to one, and called the repeating $5,500 prints "undeniable proof" of wash trading. He also waved around an Artemis chart of prediction-market share, which is a different product from the perps, a mistake Kalshi's crypto chief was happy to point out.

Hey Beni,

Seems like a bunch of wires got crossed here so I just wanted to set the record straight. Your original claim was that Kalshi’s crypto prediction market volume was fake. The chart from Artemis shows prediction market volume share, not perps. We don’t do rebates for… https://t.co/RudV9qzDNn pic.twitter.com/QSIpBu0Cm5

— IcoBeast.eth🦇🔊 (@icobeast) September 20, 2026

Kalshi's rebuttal the next day was interesting. The exchange says the fixed-size prints come from one market maker resting orders of a set size and getting picked off by "many takers." Its own numbers show the takers winning; in one hypothetical it walks through, the aggressors clear about $98,000. Self-trades are blocked at the matching engine, it runs surveillance for pre-arranged trades, and it has "seen no evidence of collusion or wash trades."

Take all of that at face value and Kalshi has still described a market maker that loses money on every fill and keeps quoting anyway. The rebuttal explains why. Its example liquidity deal pays a firm $100,000 a month to keep bids and offers of at least $5,000 resting within 0.1% of each other, 95% of every hour. The money is for being on the book. A quote of exactly $5,000, or $5,499, is what a contract written that way produces.

The Subsidy Stack

Which raises the question Kalshi's rebuttal doesn't ask of itself: why does the market maker keep doing this? The answer is that Kalshi pays it to, through three separate programs.

The resting-liquidity stipend is the first. The second is a fee rebate. A June 24 filing with the CFTC set up a temporary program that hands self-clearing members back all of their net maker and taker fees on perps each month, with two guardrails: no double-paying incentives on the same volume, and no trade may end up net-negative in fees once the maker and taker sides are combined. Free trading for the biggest accounts, but not paid trading.

The third would go further. A September 2 filing cuts the taker fee on crypto perps to 0.3 basis points, or 0.003%, and pays the maker a net rebate of the same 0.3 basis points. The filing makes that live "upon Exchange notice, but not earlier than 5:00 PM ET on September 16, 2026." Kalshi says the notice hasn't gone out and the program isn't running, so it can't be what generated the September 17-20 tape. Nobody outside Kalshi can currently check that.

Kalshi also runs a retail-facing Volume Incentive Program that splits a cashback pool by each trader's share of volume during reward periods. Market makers with existing agreements are excluded. Whether it touched the disputed markets isn't disclosed.

Put together, the stipend pays one side to post the $5,499 quote and the fee rebate makes it free for the other side to hit it. The repeating number is the incentive structure working as written.

The CFTC Wrote The Memo Five Weeks Early

On August 12 the CFTC's Division of Market Oversight put out a staff advisory, Letter 26-23, whose stated focus is "incentive programs established in connection with prediction markets." It warns that "volume-based rewards with steep tiers or threshold bonuses can encourage participants to trade solely to reach volume targets, heightening risks of wash-trading, pre-arranged trading," and, separately, that "market-maker programs that guarantee net profits or cover participant losses through stipends and rebates may incentivize artificial strategies." Exchanges are told to build surveillance around the specific behavior each program invites.

The advisory names no exchange and finds nothing against anyone. Kalshi's response, that CME, Cboe and NYSE all pay for liquidity too, is true and beside the point. 

Real Trades, Fake Signal

Rajiv Sethi, an economist at Barnard College, published the cleanest account of the mechanism on Wednesday - and it doesn't necessarily point to cheating. In his reading, "the volume rewards paid by Kalshi to the market maker are flowing in part to aggressive traders who are able to move before stale orders can be cancelled." The fee refund makes it worse, because refunding the taker's fee "aggravates the adverse selection problem faced by liquidity providers." His verdict: "By channeling funds to aggressive low latency traders through the market makers, the exchange is undoing the liquidity provision that the rewards were meant to boost."

Tyler Durden Wed, 09/23/2026 - 14:05

More US Homebuyers Apply For Riskier Mortgages As Interest Rates Top 7%

Authored by Andrew Moran via The Epoch Times,

Higher interest rates pushed prospective homebuyers toward riskier mortgages last week, new industry data show.

The total volume of mortgage applications declined almost 2 percent for the week ending Sept. 18, according to a report released by the Mortgage Bankers Association on Sept. 23. This represented the third consecutive weekly drop.

Applications for a mortgage to purchase a home fell 1 percent and were down 11 percent from the same time a year ago. Refinancing applications also fell to their lowest levels since February 2025, down 3 percent monthly, and were 62 percent lower year over year.

"Applications for both refinance and purchase loans declined further last week, noting that the comparison is to the week that included the Labor Day holiday," Mike Fratantoni, the group's senior vice president and chief economist, said in a news release.

Last week's decline aligned with the sharp increase in interest rates.

Because fixed-rate mortgage costs have accelerated in recent weeks, borrowers sought riskier adjustable-rate mortgages - also known as ARMs - Fratantoni added.

"With fixed rates much higher, more borrowers opted for ARMs, with the ARM share reaching 9.8%, as rates for 5/1 ARMs were more than a percentage point lower than those for fixed rate loans," he said in a statement.

The average contract interest rate for 30-year fixed-rate mortgages rose to 7.12 percent, from 6.97 percent - the highest since May 2024.

Mortgage rates have increased by more than 100 basis points since the United States and Israel launched a joint military operation against Iran in late February. The conflict, approaching the seven-month mark, has sent Treasury bond yields surging.

The benchmark 10-year Treasury yield reached 5 percent again midweek, up from 3.96 percent before the war in Iran began. The mortgage market generally tracks government bond yields, resulting in higher borrowing costs for prospective buyers.

ARMs start with a lower fixed rate for three to ten years, then change every six months or annually based on market conditions. This product saves borrowers money upfront but can swing higher or lower based on benchmark rates.

Mortgage rates have ticked up slightly so far this week.

As of Sept. 22, the average 30-year fixed rate was 7.17 percent, according to Mortgage News Daily.

Fueling Interest Rates

Global energy markets and inflation data have been the driving forces behind interest rates and will determine the Federal Reserve's next policy decision, says Jeff DerGurahian, head economist at loanDepot.

"For now, rates appear to be standing at a fork in the road. Softer inflation and lower oil prices could provide relief, while continued energy pressure could keep mortgage rates near or above 7%," DerGurahian said in a note emailed to The Epoch Times.

Crude prices have fallen sharply this week, with U.S. oil down about 10 percent to around $91 per barrel. Brent, the international benchmark, returned above $100 midweek.

As of Sept. 22, the national average for a gallon of diesel has risen to $6.52, according to the American Automobile Association.

Meanwhile, the next major inflation report will be August's personal consumption expenditures (PCE) price index, the Fed's go-to inflation measure.

After that, the September consumer price index report will be released in mid-October.

The Cleveland Fed projects annual headline consumer inflation will jump to 3.5 percent, but core inflation, which strips out volatile energy and food prices, will hold steady at 2.4 percent.

Until then, investors are leaning toward another quarter-point rate hike at the October Federal Open Market Committee policy meeting after the Fed followed through last week on the first increase to the benchmark federal funds rate since July 2023.

"Those expectations are not set in stone though," DerGurahian said.

"If oil prices move lower or the September core inflation reading comes in softer than expected, the October hike could be pushed further out. Continued improvement could even cause markets to remove one of the three future hikes currently priced in."

Fed Chairman Kevin Warsh will hold the next two-day meeting on Oct. 27 and 28.

Tyler Durden Wed, 09/23/2026 - 13:45

US Diesel Craters, EU Prices Skyrocket As Politico Reports White House Preparing Plan For 90-Day Export Ban

Summary: 

• New Politico Report Suggests White House Preparing For Diesel Export Ban
• "Definitely Doesn't Work": U.S. Energy Sec Rejects Diesel Export Ban, Risks Creating Bigger Supply-Squeeze Later

Politico Reports White House Prepares Plan For 90-Day Diesel Exports Ban

Diesel is certainly top of mind in the White House as a global refining crisis has sent prices at the pump for the industrial fuel to record-high levels, so high that Apollo's chief economist, Torsten Slok, warned earlier that it could spark a core inflation shock.

Policy maneuvering by the White House is limited, and what has been floated by Trump and some top Republicans is a diesel export ban, while top desks on Wall Street have warned that it's a terrible idea and could exacerbate prices around the world.

Earlier, U.S. Energy Secretary Chris Wright was at odds with Trump's call for a diesel export ban; Wright said, "The blunt tool of banning diesel exports definitely doesn't work."

Around lunchtime in New York, a new Politico report said the White House was preparing a potential 90-day ban on diesel exports ahead of November's midterm elections.

The report stated that the proposal remains under discussion, with its legal framework unresolved. Politico cited five people familiar with the talks.

"What has overpowered cooler heads [in the White House] is the absolutely, sky-is-falling, we-have-to-do-something concern about prices at the pump" faction, said this person, who was granted anonymity to discuss conversations with White House officials. "That camp has been swept aside by the political camp, which says, 'dammit, something has to happen.'"

AAA Diesel v. Gas at pump

A White House official commented on the report, calling it "another fake news story from Politico."

The immediate price action in the fuel markets was:

• US DIESEL FUTURES SINK MORE THAN 7% TO INTRADAY LOW
• EUROPEAN DIESEL FUTURES SURGE OVER 7% TO SESSION HIGH

Here's what happened:

Last week, Barclays refining and midstream analyst Theresa Chen warned clients that a proposed U.S. diesel export ban would be "detrimental to the US refining complex and unlikely to provide the intended price relief."

Chen outlined one major problem: keeping diesel inside the country does not guarantee it can reach gas pumps.

On Tuesday, Goldman Sachs energy analyst Nikhil Bhandari told clients the global refining system will be stretched through 2027, with diesel and gas prices expected to remain elevated.

The latest EIA data (2025) shows that Mexico is the largest buyer of U.S. diesel, followed by Chile, Brazil, the Netherlands, and the UK.

• Mexico: ~220,000 b/d (17% of total distillate exports). Still #1 but down ~18% from 2024. Mexico imports large volumes of U.S. refined products (gasoline and diesel) while sending heavier crude north.
• Chile: Second-largest destination; volumes rose ~15–16k b/d from 2024.
• Brazil: ~103,000 b/d (third). This is well below earlier peaks near 200k b/d; Brazil has taken more discounted Russian barrels since 2022 sanctions redirected Russian diesel away from Europe.
• Netherlands: ~98,000 b/d (major European trading hub/re-export point).
• United Kingdom: ~89,000 b/d (record annual average).

A case of resource nationalism? Or is the Politico report "another fake news story," as a White House source cited in the report suggests?

"Definitely Doesn't Work": U.S. Energy Sec Rejects Diesel Export Ban, Risks Creating Bigger Supply-Squeeze Later

President Trump will not be pleased...

U.S. Energy Secretary Chris Wright has publicly opposed calls for a ban on U.S. diesel exports, arguing on Wednesday that the measure would backfire by increasing gasoline and jet fuel prices.

"The blunt ​tool of banning diesel exports definitely doesn't ‌work," ⁠Wright said at an event in New York, as reported by Reuters.

Wright said restricting exports would leave refiners with excess diesel inventories, forcing them to cut refinery output.

Lower refinery runs, he warned, would tighten supplies of other fuels, ultimately driving up costs for consumers and businesses.

His comments put him at odds with President Trump, who signaled support for the idea on Tuesday as diesel prices surge to record highs in the U.S. and Europe (and Treasury Secretary Bessent has been assigned to see "if it's feasible."

Trump's comments already sent European pries for the fuel surging.

With flows from the region's top supplier at risk, Bloomberg reports that European diesel's premium to Brent crude jumped to more than $95 a barrel on Wednesday, a record in Bloomberg data going back to 2011.

Known as crack spread, the indicator has been keenly watched by central bankers as they seek to tame inflation. The equivalent measure in the U.S., meanwhile, weakened.

Trump's threat comes as Europe is already grappling with the loss of diesel shipments from the Middle East, and Russian export curbs have tightened the global fuel market further. The US has become Europe's main overseas supplier, with American exports of the workhorse fuel surging to a weekly record near 2 million barrels a day last month.

A key U.S. oil industry group cautioned against the move, saying it could lower American fuel production and damage the global economy.

Of the 8 million barrels of diesel traded globally by sea each day, the U.S. supplies about 1.5 million of them - about 20%. An export ban would remove the single largest source of global diesel from the market, and the consequences could be catastrophic.

"Restricting exports is not a solution to high prices," the American Petroleum Institute says.

"Removing US diesel from the market could instead result in reduced refinery runs, global economic damage and even higher US prices."

Indeed, as Bloomberg macro strategist, Michael Ball, write this morning,while The White House may be able to engineer a brief drop in U.S. diesel prices by limiting exports, it risks creating a bigger supply problem down the road.

With distillate stocks at seasonally record lows...

...the appeal is obvious with U.S. diesel above $6.50 a gallon...

But a broad curb could strand as much as 1.5 million barrels a day, roughly 29% of U.S. diesel output.

If enacted, Ball writes, the effects would be uneven across the U.S.

A surplus would build on the Gulf Coast, while pipeline, shipping and fuel-specification constraints limit how easily those barrels can reach tighter East and West Coast markets.

Bloomberg Intelligence estimates Gulf Coast storage could only absorb about three weeks of net diesel exports before constraints bite.

The global impact would be worse.

Kpler argues there is no real replacement for U.S. export volumes, leaving Latin America and Northwest Europe particularly exposed and increasing competition for Indian barrels.

China could compound the squeeze as domestic inventories fall and the risk of renewed export curbs rises.

The response from refiners would create a negative feedback loop.

If trapped barrels crush margins, refiners are incentivized to cut runs and undertake maintenance.

S&P Global Energy estimates crude runs might need to fall by nearly 2 million barrels a day - more than 10% of the current production level - to clear the surplus.

That is the asymmetry: lower U.S. diesel prices first, tighter global product markets follow, and potentially less U.S. fuel supply later.

The more aggressive the restriction, the greater the risk that today's price relief becomes tomorrow's supply problem.

Tyler Durden Wed, 09/23/2026 - 13:40

Bonds Crash Most Since Liberation Day After Catastrophic 5Y Auction; 2nd Biggest Tail On Record

Coming into today's 5Y auction, the bond market was collapsing, with yields across the curve soaring but especially the 5Y exploding a crazy 15bps heading into today's auction (of 5 Year treasuries), a massive concession which we thought would lead to "lots of demand" for today's offering. 

*TREASURY 5-YEAR YIELD RISES 15 BASIS POINTS ON DAY TO 4.99%

At least there will be lots of demand for paper in today's 5Y auction

— zerohedge (@zerohedge) September 23, 2026

Boy, were we wrong: moments ago the Treasury published results from today's auction and there were absolutely disastrous.

The sale of $70 billion priced at the first 5%+ yield since 2007, 5.033% to be specific (which means the first 5% cash coupon for today's buyers in 19 years), up from 4.391%. But the kicker is that the When Issued traded at 5.001%, meaning the auction tailed by a massive 3.1bps, which is the 2nd highest tail on record.

The bid to cover was ugly: down to 2.212 from 2.371, and the lowest since December 2018. 

The internals were even worse: Indirects plunged to 54.31% from 61.51%, the lowest since the depths of covid, in March 2020. And withj Directs inexplicably jumping to 29.92%, the highest since December '25, Dealers were left holding 15.8% of the auction, the most since May 2024.

Overall this was a horrific auction, where demand simply was not there contrary to what the When Issued indicated, and the results sparked a fresh rout acorss the curve, with the 10Y last trading just shy of 5.13% in what is shaping up as the worst day for the bond market since Liberation Day.

Tyler Durden Wed, 09/23/2026 - 13:31

CFTC Chair Pushes Tokenization As SEC Opens Door To Onchain Stocks

Authored by Ezra Reguerra via Cointelegraph,

US Commodity Futures Trading Commission (CFTC) Chair Michael Selig said financial markets should prepare for "mass tokenization" as regulators adapt existing frameworks for blockchain, artificial intelligence and onchain markets.

In remarks delivered Tuesday at the US Treasury Market Conference, Selig said tokenization of real-world assets (RWAs) could become the foundation of a more efficient financial system, enabling near-instant settlement and real-time collateral movement between clearinghouses, intermediaries and users.

"Just as the transition from hand signals to electronic trading advanced our financial system, I believe tokenization can do the same for all asset classes," Selig said, adding that the CFTC would pursue principles-based rules as tokenization and onchain finance evolve.

Selig said in August that the CFTC would move ahead with crypto rules under its existing authority if Congress did not pass the CLARITY Act. The Senate failed to advance the bill on Sept. 15.

On Sept. 17, the CFTC submitted a regulatory action covering crypto asset transactions and markets for White House review. The filing is still at the "prerule" stage and does not detail the planned regulations.

SEC also moves to bring markets onchain

Officials at the US Securities and Exchange Commission (SEC) have also promoted the development of tokenized markets.

In a Bloomberg TV interview, the SEC's Division of Trading and Markets Director Jamie Selway said that tokenization and crypto have recently become politicized but are "not naturally a politicized function."

Selway said US success in developing the markets should receive bipartisan support.

On Sept. 17, the SEC granted a temporary "Innovation Exemption" for tokenized US stock trading.

The exemption lets certain platforms trade digital versions of US-listed stocks under certain conditions.

SEC Chair Paul Atkins said in February that such an exemption could facilitate onchain trading while regulators developed longer-term rules.

Tyler Durden Wed, 09/23/2026 - 13:00

Brazil's Socialist Lula Cries 'Foreign Interference' At UN As Bolsonaro Ties Him In Runoff Polls

"Flávio Bolsonaro has moved marginally ahead of Lula in a potential run-off, with the race effectively tied," Daniel Lavarda, HSBC's head of Brazil macroeconomic research, wrote in a note to clients on Tuesday. 

Lavarda said, "Worsening approval ratings weigh on Lula's prospects, reducing probability of re-election to 18% (per to our model)," adding, "With the race tied up, the outcome will hinge on late-campaign developments, turnout and ability to mobilize voters." 

Lavarda's latest note on the Brazilian election continues the theme that the right-wing challenger, Bolsonaro, has a real chance of defeating the unhinged socialist, President Luiz Inácio Lula da Silva. That theme largely began when Polymarket's election odds flipped to a Bolsonaro lead on September 10.

Lula (Left); Bolsonaro (Right)

Now, the Polymarket bet, with nearly $154 million traded, shows Bolsonaro leading at 59% versus Lula's 41%.

On Tuesday at the United Nations General Assembly in New York, Lula cried foul, saying that countries shouldn't interfere in the internal affairs of other nations.

"We will not allow the enemies of democracy, whether domestic or foreign, to undermine popular will. Brazilian democracy belongs to Brazilians. Brazil will continue to be a sovereign country," Lula said. "Nobody will turn us away from this path."

Meanwhile ... 

Lula's speech comes as the prospect of a Bolsonaro win has shifted foreign capital flows back to Brazil. Goldman analysts found, after surveying 70 global investors, that EWZ, the US-listed Brazil equity ETF, could be set up for a 20% surge if the right-wing candidate wins.

Our technical analysts at The Market Ear see far greater upside in Brazilian stocks if a Bolsonaro win materializes early next month:

• Brazil's Next Big Squeeze: Up To 54% Upside

A Bolsonaro win would cement a rightward shift across much of South America as millions reject nation-killing progressive experiments.

Tyler Durden Wed, 09/23/2026 - 12:40

Market Warning Signs And The 'Perfect' Hedge

Via Crescat Capital,

We showed in prior letters that the US stock market has recently reached all-time high valuations across a variety of dimensions. Now, the market is flashing warning signals of a potential major market top based on a variety of divergent technical and cross-market indicators.

We show four of these in this letter:

New 52-week Highs vs. Lows Chart

Normally, when a stock market index moves up and down, the underlying stocks reaching new 52-week highs minus those hitting new 52-week lows go up and down, in sync. One can see that relationship most of the time in the NASDAQ Composite chart below over the last year. Recently, however, it’s been the opposite.

This index just closed at a marginal new all-time high, while the underlying stocks hitting new lows have exceeded those hitting new highs for 17 days straight. Weak, non-confirming market internals can signal a major market top. In this case, a narrow group of large stocks has driven the overall index return to new highs without confirmation from its underlying components.

Widening CCC vs. BBB Credit Spreads

Credit markets are generally quicker to pick up on deteriorating corporate cash flows than equity markets. While the S&P 500 Index has been hitting new all-time highs over the past six months, US triple-C credit spreads relative to triple-B have widened significantly over the same time, another non-confirming divergence, which we show in the chart below.

Similar warning signals of a pending stock market downturn from this indicator can be seen in the same chart historically:

1. A divergence in credit spreads vs. the 2000 tech bubble and stock market top;
2. Trends and levels consistent with the very beginning of the last two major stock market meltdowns and recessions: the 2008 Global Financial Crisis and the 2020 Covid recession; and
3. Deterioration consistent with the 2022 bear market.

Recent Negative Correlation of the Advance-Decline Line vs. S&P 500

The advance-decline line is a plot of the cumulative sum of daily differences between the number of issues advancing and those declining for a given market index. In capitalization-weighted stock indices, such as the S&P 500, price changes of larger market-cap stocks will have larger effects on index returns. The advance-decline line can provide insight regarding the number of individual stocks participating in a market rally or decline.

Divergence occurs when the underlying index moves in one direction and the advance-decline line for that index moves in the opposite direction. When the advance-decline line is moving down while the underlying index pushes higher, one begins to question the true health and direction of the market.

Below is a chart showing the rolling 50-day correlation between the S&P 500 and its cumulative advance-decline line. Over 2026, we have seen their relationship weaken substantially and even turn negative. The last time we saw such divergence was during the peak of the Dotcom bubble.

S&P 500 Deterioration of Members Trading Above 200-day Moving Average

The percent of members in the S&P 500 trading above their 200-day averages has plunged over the past month, as we show in the chart below, even as the index itself has remained relatively flat, near all-time highs. This divergence points towards a breakdown in market breadth despite apparent top-line stability. Again, performance is becoming increasingly concentrated among a small group of megacaps.

As one can see in the chart, a similar setup emerged in the lead-up to Liberation Day (April 2nd, 2025), where technicals began to weaken before the broad market selloff. Selling pressure and risk reduction were already building beneath the surface ahead of the tariff announcement. The tariff announcement was the spark that lit the fire.

The Perfect Hedge

What do we see as the perfect hedge for today’s stock market? While no hedge is perfect, to us it means positioning for what we believe offers the strongest potential risk-adjusted outperformance, or alpha, relative to the S&P 500.

Today, we believe that opportunity is in gold. More specifically, we see even greater alpha potential in Crescat’s diversified activist precious and critical metals exploration strategy. Junior mining exploration carries operational risks and market volatility, but we believe it offers substantially better value and long-term growth potential than gold itself. That is where our precious metals hedge funds are focused.

Tyler Durden Wed, 09/23/2026 - 12:20

Spain Clears Way For US Extradition Case Against Cox Media Heir Turned Communist Financier

The Spanish government has begun a process that could soon lead to the US extradition of Jim "Fergie" Chambers, the communist centimillionaire and heir to the massive Cox media fortune.

Bloomberg reported Tuesday that Chambers moved a step closer to extradition to the US after Spain's Cabinet allowed the case to proceed to court.

Chambers has been detained since his July 10 arrest in Ibiza and is wanted by the US on money laundering, riot and riot conspiracy charges linked to 2023 pro-Palestinian demonstrations and transfers to a company in Tunisia, where he previously lived.

Government spokeswoman Elma Saiz confirmed to the outlet that Spanish courts would now review the request. If judges approve extradition, the final decision returns to Prime Minister Pedro Sánchez's Cabinet.

We profiled Chambers in July, shortly after he was arrested, and noted that he was a major funder of America's radical left and had been described by pro-Palestinian activist Laith Marouf as "the new Soros."

Chambers founded the Babochki Collective and is a major backer of Stop Cop City, Palestine Action US (later renamed Unity of Fields), and related legal defense efforts. He allegedly funded bail, legal fees, and direct-action campaigns targeting police-training projects and Israeli-linked defense firms, while also building networks with far-left activists.

A communist and a convert to Islam from New York, Chambers allegedly used his $250 million fortune to fund "revolutionary organizing."

The indictment also alleges that, after fleeing the US in 2023, he transferred about $7.5 million out of the country in order to seek opportunities to provide material support to Hamas, Middle East Eye reported.

There are numerous reports that Chambers has possibly supported or interfaced with designated terrorist groups, including Samidoun, which the US Treasury identified as a "sham charity serving as an international fundraiser for the Popular Front for the Liberation of Palestine (PFLP) terrorist organization," and Middle East Children's Alliance, which has been cited by US and allied governments for links to the PFLP.

Additional US groups he has possibly supported or interfaced with include China-based Marxist Roy Singham's NGO sphere, including ANSWER Coalition, Party for Socialism and Liberation, and Newsclick, as well as student and campus mobilization networks (such as Students for Justice in Palestine) and political prisoner advocacy groups. Chambers' own Berkshire Communists project in Massachusetts has served as a local hub for organizing and arms training within this network.

City Journal's Stu Smith wrote in a recent report, "Chambers is one of the main funders of America's radical Left. His money has flowed to a host of projects in the "anti-imperialism" organizing space," adding, "Chambers claims that he and Singham are effectively the two primary financiers of the US radical left." 

🚨 Fergie Chambers, heir to the Cox media fortune and a major funder of militant pro-Palestine groups, was detained in Spain as the Trump administration seeks his extradition on federal charges carrying up to 30 years in prison.pic.twitter.com/4YrIyZSR8q

— Stu Smith (@thestustustudio) July 13, 2026

Chambers' arrest came shortly before Secretary of State Marco Rubio and US Treasury Secretary Scott Bessent declared war on the radical left in front of delegations from more than 60 nations and focused on joint efforts to curb transnational far-left terrorism across the Western world (with a focus on Cuba). 

A recent New York Post article mapped out a multi-agency Treasury task force focused on stripping NGOs of tax-exempt status, including George Soros' far-left Open Society Foundations, the Southern Poverty Law Center, and the Council on American-Islamic Relations. 

On Tuesday, President Trump told the United Nations General Assembly in New York that Cuba has spent decades coordinating with far-left revolutionaries and subversion networks into the U.S. Trump said the State Department has worked to uncover Havana's ties to subversive and radical groups such as the Communist Party USA, Antifa, and the DSA. 

.@POTUS: The Cuban regime has also spent decades coordinating with left-wing radicals and Communist networks here in the United States. As our State Department has detailed, they have cultivated ties to subversive and radical groups such as the Communist Party USA, Antifa, and… pic.twitter.com/Bopz3W6sXz

— Rapid Response 47 (@RapidResponse47) September 22, 2026

Whether it's the federal government's multi-agency task force focused on communist Chambers, subversion networks from Cuba, China, the Middle East and/or Europe, or NGOs that are hell-bent on stoking a violent Marxist revolution, we have asked the question in a two-part series (see here and here): Where did all the summer riots go?

Tyler Durden Wed, 09/23/2026 - 11:20

Traders Have Modest Hopes For A Trump-Xi AI Deal

While we will provide a more detailed preview of the Trump/Xi summit in a subsequent post, there are signs that President Trump and his Chinese counterpart, Xi Jinping, may emerge from their upcoming summit with an agreement about the artificial-intelligence industry, an increasingly prominent flash point between the world’s two biggest economies. But, as Bloomberg's Jacob Gu  notes, fund managers say it’s unlikely to be significant enough to provide a sustainable boost to AI-related stocks.

Over the weekend, Treasury Secretary Scott Bessent, after hours of talks with Vice Premier He Lifeng in New York, said the two sides agreed to create what he called a “US-China AI dialogue” about the technology’s benefits and threats.

The following day, Liao Min, the Chinese Vice Finance Minister, and a key member of the delegation, told Bloomberg that staff from the two countries were working together toward the details of a potential agreement on AI, investment and trade.

Bessent will present Trump with an AI agreement to review before his meeting with Xi, Fox Business reported.

The importance of AI at the US-China talks is being highlighted by the expected presence of Sam Altman and other industry executives at Trump’s state dinner for Xi to be held later this week, and while US tech execs will be present (again),  Xi is unlikely to bring a delegation of corporate executives when he meets Trump,, the WSJ reported.

But Gary Tan, portfolio manager at Allspring Global Investments, said investors shouldn’t expect it to have much immediate impact on the business between the two countries. “Given past experiences, our sense is that Trump’s visit to China earlier this year with a heavyweight technology entourage did not ultimately translate into meaningful progress on technology or hardware restrictions,” he said.

“From our side, this still looks more symbolic than substantive, and investors should continue positioning for a prolonged AI race rather than an imminent policy breakthrough,” Tan added.

Ashwin Binwani, founder of private investment firm Alpha Binwani Capital, was similarly cautious, since Bessent highlighted safety issues rather than an easing of US export controls.

“A pop on that news is a fade candidate, not a trend to chase,” he said. “Diversify away from pure semiconductor concentration into the hyperscaler capex story, which has its own momentum independent of the summit.”

He said traders have been burned previously when policy discussions failed to result in more concrete steps like licensing or purchase deals. That’s not to say there’d be no potential stock-market impact: He said “a modestly constructive readout” could fuel a rebound in the most heavily shorted Hong Kong stocks as investors close out positions.

Tyler Durden Wed, 09/23/2026 - 11:15

Where Will This All/Diesel End Up?

By Michael Every of Rabobank

Underlining how markets are now driven by geopolitics and geoeconomics, it’s all big names, big games, and big trades today. The UN general assembly is in session as the Wall Street Journal notes, ‘World leaders almost all agree on one thing: the UN is failing.’ Xi will also visit Trump: will those talks achieve anything substantive?

Oil is down on hopes for ‘peace in our time.’ The Saudi east-west pipeline will start again at lower capacity, China warned the Houthis not to block the Red Sea, Trump negotiators held a “very productive” three-hour meeting with the Iranians in New York, Iran floated reopening Hormuz in seven days if the US lifts its blockade, and Ukraine’s Zelenskyy stated Kyiv and Washington want that other war to end “before winter” and is ready for an “energy ceasefire.”

Yet elsewhere the question looks like ‘war at what time?’ Iran has hardened its demands for ending the war, and Trump just publicly threatened it with “annihilation”, then met with the Arab states expected to attack Tehran alongside it if that were to occur. Qatar is urging diplomacy as the Gulf enters “one of the most dangerous phases.” Ukraine’s press reports ‘Russia's rigged election gives Putin a mandate for all-out war’. In Russia, two more oil refineries were just hit, and bomb shelters in Moscow and St Petersburg are quietly being modernized. The US, Greenland, and Denmark signed a security deal that will see expanded US military bases and a larger NATO presence. UK PM Burnham did a U-turn on the Chagos islands deal after being told it was “terrible” by Trump, which is important but not market moving; his refusing to rule out rejoining the EU could be both - and he might notice Argentina considering new submarines and frigates.

The Senate Armed Services Committee chair has criticized the planned pageantry around the Trump-Xi meeting, which was not offered in Beijing in equal measure: but larger questions swirl around tariffs, rare earths, AI, and Taiwan. The Hong Kong press wonders if both men can use their leverage --recall ‘Who has the cards?’ was our 2026 theme this time last year-- to make progress. Do recall that in April 2017, when the two men first met in the US to talk trade and North Korea, Trump, over “a beautiful piece of chocolate cake”, told Xi that he had just launched 59 cruise missiles at Syria in response to its government’s use of chemical weapons against its own people. Today, could the US spare 59 missiles for the same level of opponent?

Ahead of that key meeting, speaking to our zeitgeist, Brazil's President Lula used his UN speech to warn against any foreign interference in his country’s upcoming presidential elections. Much is at stake there in both domestic policy and geostrategic terms.

Trump and Japan’s PM Takaichi met to reaffirm their close geopolitical and geoeconomic alliance. That now encompasses the BOJ and the Yen carry trade too: on which note, Japan’s big banks' domestic loan share is seeing its first sustained post-1991 bubble burst rise, exactly what the White House and Takaichi want as (defence) industry investment rises.

Nearby, South Korea’s President Lee urged the US to ease North Korea sanctions to encourage it to freeze its nuclear programs; and the EU announced it was moving towards an initial FTA with the Philippines, which sits within the US bloc in Asia – it just received a coastguard vessel from Taiwan, for example.

Where will this all end up? Markets must wait for the results of the big-name big game.

Relatedly, where will diesel end up? That question must be asked again today after Trump backed calls to halt US exports of refined products to address record high prices at home. Treasury Secretary Bessent said officials are now looking into if a total or partial diesel export ban is feasible.

As argued yesterday, in an integrated global energy market, such binary action wouldn’t achieve anything good for the US. However, why assume that backdrop?

The US didn’t export any crude at all from 1975 to 2015: shocking to some, perhaps, but true. Yes, the US wants to use “energy domination” as a strategic tool, which requires sharing it - yet why share with everybody, if to your own detriment? Today, why couldn’t the US opt for a partial, geopolitical diesel export ban and use economic statecraft like the Defence Production Act, to keep up refinery output of the ‘right’ products, more Jones Act waivers, to get fuel from the US Gulf to its west and northeast, and new state-backed mandated land and floating storage facilities at home and even regionally, if needed?

“Because markets?” If that is your answer, please recognize that such ideological thinking, for that is what it is at root, limits the ability to project potential future market outcomes, and sometimes expensively so.

Indeed, note that after Trump floated purchasing cheaper Belarussian potash, ‘elbows up’ liberal-world-order PM Carney floated his country and the US forming a self-reliant bloc for fertilisers. That is exactly what the US wants to do – but for far more than fertilisers, and with more countries than just Canada. For example, Mexico’s President Sheinbaum just had a “very good” call with Trump and touted progress towards a trade deal with what are rumored to be much tighter regional rules of origin.

As such, why not with refined crude products too? That doesn’t mean such a strand of US grand macro strategy would be well implemented – but that fact also doesn’t rule out it ever happening.

Meanwhile, against the above backdrop, the Fed’s Collins stated, “I now see an increased likelihood of future scenarios in which inflation remains notably above 2%.” To repeat what was said yesterday, the big trade is to correctly predict the big-name big game, not what a small-picture thinker like a central banker is saying long after the geopolitical facts were obvious.

If certain deals are struck, if certain countries are struck, if certain market flows are struck, energy prices can change dramatically – and then, suddenly, central bankers will be saying very different things. Those who listen only to them will think they are ahead of the curve rather than seeing they are behind the geopolitical and geoeconomic ones.

Tyler Durden Wed, 09/23/2026 - 11:00