Zero Rss

Oracle Loans Backing Massive New Mexico Data Center Tumble To Stressed Levels

Overnight we explained why the AI supercycle now hinges on the ever faster issuance of more and more debt, so critically needed to fund trillions in capex in the coming years...

... and which according to Goldman will look something like this.

The problem is that as spreads keep blowing out as more investors do the ugly math (discussed extensively here), the pace of debt issuance is starting to slow as credit markets get cold feet.

The latest example comes courtesy of the same Oracle which we profiled as the "first AI domino to fall", back in November '25, and whose $18 billion in leveraged loans tied to a New Mexico data center leased to the company slid into stressed territory on Friday, highlighting investors’ fear that increasing local backlash will derail the tech group’s massive AI infrastructure build-out. 

According to the FT, loans linked to the $165 billion “Project Jupiter” were quoted at 89 to 91 cents on the dollar by syndicate banks including Santander and Jefferies. Healthy debt typically trades within a tight band near par.

Oracle's massive Project Jupiter data center in New Mexico.

What makes the price slide from par in just a few months especially concerning is that the 1,400-acre data center campus in Doña Ana County is at the heart of Oracle’s landmark $300bn contract with OpenAI to provide computing power. The marquee project secured $18Bn of loans from a consortium of banks late last year to kick-start construction, along with billions of equity investment from Blue Owl.

According to the FT report, efforts to offload the debt to a broader group of investors have hit a wall due to concerns around Oracle’s massive borrowing and declining creditworthiness. The debt secured a private investment-grade rating from credit rating agencies but that's largely thanks to the SPV structure which is synthetically boosting the project's overall credit rating (as discussed previously).

Indeed, as Barclays wrote in its latest credit report on ORCL, despite the overall improvement the bank has seen in the credit, one area that remains less comfortable is "the timeline for its data center projects, particularly for those that have faced setbacks such as New Mexico/Jupiter."

And amid the growing grassroots pushback to data centers, the market is also turning increasingly less comfortable, with the company's gargantuan debt load is not helping.

Oracle’s corporate credit rating currently sits just one notch above junk following a downgrade from S&P in July. That, together with the recent meltdown in lower-rated AI credits, meant that banks were now forced to hold more Oracle-linked project debt on their balance sheets than initially planned. And judging by the trajectory of Oracle's CapEx, which is now growing at an explosive pace, they will end up holding much more in the coming months.

Separately, Oracle’s 82-year-old co-founder Larry Ellison abruptly cancelled a $7.5Bn share-trading plan last weekend, just one day after unveiling it, without explanation.

One thing that is very clear is that the market is not giving the company much if any credit for its massive, if questionable, backlog, which has been made possible only thank to the company's even more massive debt spree.

Oracle’s stock has plunged 50% since it unveiled its $300bn deal with OpenAI a year ago.

And if the massive debt wasn't enough of a problem, Project Jupiter has faced its own share of delays due to fierce local opposition over concerns about its impact on the local area’s water supply and air quality. The project was initially going to be powered by 2.2 gigawatts of gas turbines, but the state land office blocked a request to run a natural gas pipeline to the data centre.

In April, Oracle announced that it would power itself with Bloom Energy fuel cells, which emit less sulphur and nitrogen oxides, but permission to connect a pipeline to feed these was also blocked. 

The project’s air permit application was paused in August after lawsuits from two environmental groups, although a judge said the process could continue on Thursday. 

Deb Haaland, New Mexico’s Democratic gubernatorial nominee and a former US Interior secretary, said she would pause all new data centres if elected in November and require developers to heavily invest in renewable energy.  State filings show Oracle donated more than $12,000 to her campaign in late August.

It is not clear how a moratorium could affect the company’s sites, although it would like lead to even more delays.  

“Big Tech’s mantra may be ‘move fast and break things’, but here in New Mexico, we do things our way,” Haaland said in a press conference.

Comparable to nationwide trends, a recent poll by New Mexico's Albuquerque Journal found that 65% of its residents were against the development of large data centres, versus only 20% of respondents supporting such construction. 

Project Jupiter’s initial phase is as of this moment at least seven months behind its proposed date to come online, according to market intelligence firm SynMax. It was expected to be completed by November this year. It won't be; in fact it may not be completed for years. 

Tyler Durden Sun, 09/20/2026 - 20:00

India's Clean Energy Boom Halts Coal Power Growth

Authored by Tsvetana Paraskova via OilPrice.com,

India's coal power generation did not grow between the first half of 2024 and the first half of 2026, for the first such two-year period in over 50 years in which coal power has remained flat in the world's second-largest coal consumer, a new analysis by the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief showed.

"The period from the first half of 2024 to the first half of 2026 saw the largest increase in non-fossil power generation on record in India," Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air (CREA), wrote in the analysis.

Moreover, the clean energy boom led to the first time in more than 50 years that India has seen no growth in coal power generation over a two-year period, even as electricity demand grew overall.

Despite the record clean energy growth, India continues to pursue major capital investments in fossil fuels, including new coal-power capacity, plans for conversion of coal-to-chemicals, and efforts to boost domestic coking coal production for the steel sector, CREA noted.

A total of 43 gigawatts (GW) of coal-power capacity was under construction in India as of the end of June 2026, according to the analysis.

Overall coal-fired capacity installations in India continue to rise, and coal remains a key pillar of India's electricity mix - about two-thirds of total power output.

Despite booming renewable capacity additions, India continues to rely on coal to meet most of its power demand as authorities also look to avoid blackouts in cases of severe heat waves.

Coal will still be a key part of India's power system for the next two decades, Rajnath Ram, adviser for energy at the government policy think tank, NITI Aayog, said at the end of last year.

"We cannot be subjective about coal. The question is how sustainably we can use it," the official noted.

Tyler Durden Sun, 09/20/2026 - 19:30

Germany's Merz Admits "Disaster" After AfD Victory As CDU Crash Out Of State Parliament

Update: The situation for Merz's party just went from "disaster" to full Titanic as projections signal the CDU will get just 4.9% of the vote - below the critical threshold required to enter parliament...

This would be the first time the CDU failed to enter state parliament since the founding of the federal republic in 1949.

Two days ago Friedrich Merz said Germany was "a country of immigration."

Today, his party collapsed. 🇩🇪 pic.twitter.com/d8dvWPe92r

— Inevitable West (@Inevitablewest) September 20, 2026

Merz's approval rating is at a record low...

*  *  *

German Chancellor Friedrich Merz's political troubles deepened as exit polls put his Christian Democrats on course for their worst-ever result in a state election.

MERZ'S CDU PARTY POSTS WORST RESULT EVER IN A GERMAN STATE VOTE

AFD AHEAD OF SOCIAL DEMOCRATS IN NORTHEASTERN STATE VOTE

ANTI-CAPITALIST LEFT PARTY LEADING IN BERLIN ELECTION

— zerohedge (@zerohedge) September 20, 2026

Right-wing Alternative for Germany (AfD) is set to win most votes in the state of Mecklenburg-Western Pomerania while the socialist Left Party has surged to first place in Berlin, according to initial projections.

Local outlet Deutsche Welle adds more color:

In Mecklenburg-Western Pomerania, the AfD is projected to take 37%, edging out the center-left Social Democratic Party (SPD) on 35.5%.

The center-right Christian Democratic Union (CDU), the party of Chancellor Friedrich Merz, is projected to slump to 5.5%, barely above the threshold to enter the state parliament.

In Berlin, the CDU suffered another alarming setback, polling at just 20% against 24.8% for the far-left anti-capitalist 'Left Party'.

AfD is third on 15.7%, up 6.9 points. 

Sunday’s showing could mark the first time the CDU is expelled from a state parliament since the founding of the federal republic in 1949.

“We can’t sugarcoat it, it was a disaster,” Merz told reporters in Berlin in a statement directly after exit polls were released, but offered no sign that he would step down.

He gathered senior CDU officials to party headquarters, where he sought to gauge their support for his leadership.

Lars Klingbeil, the SPD co-leader and vice chancellor, said the government needs to take stock and ask why voters voiced such uncertainty about policymaking in Berlin, where Merz’s coalition has struggled to sell its plan to overhaul the pension system and take on more debt to boost spending on defense and infrastructure.

“I take this very seriously,” Klingbeil told ARD.

“I also believe that we need to look at results like these with humility and ask ourselves: What can we do differently? What can we do better?”

The AfD party’s national co-leader, Alice Weidel, said Merz was the “wrong chancellor” and doing damage to his party.

“He’s dragging the CDU down with him,” Weidel told ARD.

“The CDU must ask itself — especially now — whether it wants to continue with this chancellor and with these left-wing policies. Because it won’t be able to carry on like this.”

AfD wrote on X:

"Chancellor Merz is not stepping down after the CDU disaster - no, instead he's telling the citizens that there won't be any 'back to the good old days'.

But, Mr. Merz. There will be. With the Alternative for Germany, which aligns its policies exclusively with the interests of its own citizens—and which will replace the CDU. Everywhere,"

"I am taking over this responsibility because I want to bring our country forward," Merz said.

Yet deindustrialization is really what's on the ballot, as Merz and the German political establishment have failed the nation.

Germany's political landscape is fragmenting in three directions at once: the CDU in the center, the AfD on the right, and the Left Party on the far left. No single coalition appears to be taking shape. This comes weeks after AfD's victory in Saxony-Anhalt. The results intensify pressure on Merz only 16 months into his chancellorship.

Andrzej Szczepaniak, a senior European economist and executive director at Nomura International in London, wrote in recent weeks that Europe has entered an 18-month election cycle that could accelerate the continent's shift toward populism, with high-profile elections already underway. 

Szczepaniak emphasized the "seeds of political change" are already here, indicating that "politics in Europe is lurching towards more populism." 

Read the full report here. 

The political shift extends well beyond Europe. In Brazil, foreign capital is beginning to flow in as right-wing challenger Flávio Bolsonaro leads socialist President Luiz Inácio Lula da Silva, suggesting investors are positioning for a potential change in economic policy. 

Tyler Durden Sun, 09/20/2026 - 19:00

Drug 10 Times Stronger Than Fentanyl Seized In San Francisco

Authored by Cynthia Cai via The Epoch Times,

San Francisco police have arrested four suspects, recovered multiple firearms, and seized over 20,000 counterfeit pills - some containing cychlorphine, a new synthetic drug that is up to 10 times stronger than fentanyl.

The arrests resulted from a months-long investigation that started with the fatal overdose of a San Francisco teenager, according to San Francisco Police Department (SFPD) Chief Derrick Lew on Monday.

SFPD opened its investigation after officers responded on April 7 to a home on Bush Street, where a mother had found her teenage son deceased due to a suspected overdose.

Officers from the narcotics unit collected evidence, including what appeared to be pharmaceutical medication, to determine the source of the pills, SFPD said in a statement.

During testing, officers found that the pills were counterfeit, with some containing the synthetic drug cychlorphine.

The drug was first detected in the United States at a Drug Enforcement Administration (DEA) laboratory in Florida in April 2024. Later that year, the Center for Forensic Science Research and Education confirmed identity of the drug through reference materials, according to the U.S. National Library of Medicine.

Cychlorphine can be up to 10 times more potent than fentanyl and is currently undetectable by drug test strips or hospital opioid urine tests, according to an April 30 advisory from the White House Office of National Drug Control Policy.

As of March 2026, at least 24 states have reported overdoses or deaths related to cychlorphine. East Tennessee has reported a cluster of 19 confirmed deaths, with other cases spread among states including California, Illinois, Kentucky, Ohio, and Texas.

Due to the strength of cychlorphine, the DEA says reversing the effects of the synthetic drug "might require several doses of naloxone to be effective."

In San Francisco, investigations into the teen's death eventually led officers to the potential source of the pills. They carried out multiple controlled drug buys to identify the suspects before obtaining warrants.

On Sept. 8, officers served a search warrant on the 700 block of O'Farrell Street, where they seized a few oxycodone pills and cocaine and arrested 46-year-old Nicholas Wallace.

The next day, search warrants led officers to the 300 block of Executive Park Blvd. and the 1300 block of Newhall Ave. where they arrested 46-year-old Leander Pitts and 39-year-old Starr Lamare.

Officers seized over 20,000 pills, including suspected counterfeit Xanax, oxycodone, hydrocodone, cyclobenzaprine, and fentanyl, among other deadly narcotics.

Law enforcement also recovered a semi-automatic assault rifle, a semi-automatic pistol, $2,267 in cash, and 6.5 grams of black tar heroin - a sticky, rock-like form of heroin that primarily originates from South America.

All four suspects have been booked in San Francisco County Jail on various charges, which include possession for sale of narcotics and firearms, according to SFPD.

"Our investigators will stop at nothing to ensure deadly narcotics are taken off our streets and individuals who peddle them are arrested and held accountable," Police Chief Derrick Lew said. "This tragic case highlights the dangers these deadly drugs pose to our community."

Although arrests have been made, police say the investigation remains active and they will continue to follow leads to identify additional arrests. Members of the public are encouraged to contact SFPD with tips at 1-415-575-4444.

Tyler Durden Sun, 09/20/2026 - 18:30

Trump Would 'Probably Be Open' To Meeting Iranian President, Who Will Address UN

President Trump in a Sunday morning Fox News interview repeated some of his talking points about a big decision he is preparing to make regarding what comes next in the Iran war

He told the outlet he's currently in "deciding mode" on Iran and that "very big things" are coming, and once again suggested it would either involve major military escalation or else a drawdown in tensions.

The president said: "My question is, if and when do I blow the entire nation up? They better behave."

But he went from saying that he's mulling the destruction of an entire society, to then suggesting it could be the opposite - top negotiations could happen, to the point that he could meet Iranian President Masoud Pezeshkian.

He said he might allow Iran to "rot" economically or else a deal could be forged, adding that "very big things are going to be happening in the not-so-distant future."

Interestingly, the US actually issued visas to allow Iranian top officials and diplomats to travel for the UN General Assembly meeting through this week. According to Iran's PressTV:

Iranian President Masoud Pezeshkian is set to travel to New York to attend the 81st session of the United Nations General Assembly next week.

Pezeshkian is scheduled to address the General Assembly on Wednesday, September 23, where he’s expected to present the Islamic Republic’s stance on international developments and the US-Israeli war of aggression against the country.

On the sidelines of the gathering, the president is also expected to hold meetings and consultations with world leaders.

Trump was asked about the high level UN meeting which opens Monday, and surprisingly signaled a willingness to engage diplomatically, going so far as to say he would "probably be open" to meeting with Iranian President Masoud Pezeshkian.

In Trump's mind, there seem to be three options on the table, or as he put it--"to obliterate Iran, letting it rot economically or reach a deal."

Iran has meanwhile over the weekend once again warned US allies in the region that they'll be considered "complicit" if the US resumes it military assault on the Islamic Republic. The Iranian military HQ stated that "any mistakes will result in painful attacks."

Tehran further indicated Sunday that it is still awaiting Trump's response to its conditions for ending the war. Mohammad Bagher Ghalibaf confirmed to AFP that Iran's demands were sent to Washington via the Qataris.

🚨General Staff of the Iranian Armed Forces:
According to intelligence received, the US has once again decided—with the green light from certain regional countries—to resume actions against Iran during a joint meeting in a European nation.

— IRIB (Islamic Republic of Iran Broadcasting) (@iribnews_irib) September 20, 2026

These conditions have been summarized as "the end of the war on all fronts, the release of frozen assets and the end of the naval blockade."

Releasing all frozen funds is a tall ask, given the White House has only become more aggressive it waging economic war on the Iranians. But Iran has blasted the theft and hijacking of its funds and sovereign assets.

* * *

Tyler Durden Sun, 09/20/2026 - 18:00

"Not Enough Raw Material!" - Resource Wars Put Tungsten In Crosshairs As Western Rearmament Supercycle Looms

Submitted by Almonty Industries CEO Lewis Black, 

The UK just invested £71m to restart a tungsten mine, with an option on half the output. Other governments will follow. I should be pleased – I've spent years arguing the West needs to fund its own supply.

The problem is I've seen what happens next. In 2008, Japan and South Korea poured billions into securing critical mineral supply chains. They funded projects across Australia and Canada. The result: no material produced. The money went to a generation of junior mining executives. I remember them on their boats in Monaco – very grateful, very happy. Governments have good ideas. The people they back to deliver on them are sometimes another matter.

The challenge is that a government is a jack of all trades – it can't tell a good mine from a bad one, so it hires engineers who write glowing feasibility reports with a waiver in the small print. And there is no shortage of people who call themselves management. Most of them are clowns who shouldn't be left alone with a box of matches.

Japan and South Korea learned. They stopped trying to pick winners and pushed the risk onto their industrial base – the companies that buy the stuff. Those companies know how to protect a dollar. If the new money follows that model, the checks might land somewhere useful this time.

Tungsten markets

Michael Dornhofer, ISBP – assessment as of 11 September, 2026

Tungsten prices in the USA and Europe stay unchanged for another week and are still around 3000 USD/mtu WO3. Reports from China show their domestic price trend moved to an upward tendency.

The reason is quite simple: There is not enough raw material! As the APT price in China is only about one third of the western price, Chinese APT producers are not willing to buy western concentrates on western price level. But without a significant amount of imported raw material, the industry is running short on raw material. Soon it will become clear whether the Chinese domestic prices will go up towards western levels, or China might reduce output of downstream products for export.

The coming weeks will show us. And there's another interesting development that even some "experts" overlooked. On 5 August, China placed several foreign entities under sanctions and banned them from operating in China. One entity on this list is the non-profit organization RBA.

RBA (Responsible Business Alliance) is the world's largest industry coalition dedicated to promoting responsible business conduct. RBA has more than 600 member companies including Apple, Tesla, Microsoft, Amazon etc. and runs the RMI (Responsible Minerals Initiative) program.

Nearly the entire western downstream industry insists on RMI certificates for their total supply chain. When, due to the ban of RBA, no RMI audits and certificates are possible in China, western downstream producers cannot accept any tungsten material or downstream products coming out of China.

China wants to replace the RMI audits by audits performed by CCCMC (Chinese Chamber of Commerce for Metals & Chemicals). But knowing that China imports thousands of tonnes of concentrate from countries like Myanmar and North Korea, and so material from these countries are in the tungsten supply chain in China, it's questionable who would trust Chinese audit certificates.

So, this easy-to-overlook new regulation in China could lead to an additional "firewall" between China and RoW, which might have a very significant effect on the tungsten world market.

Michael Dornhofer is founder of ISBP (Independent Supply Business Partner) in Graz, Austria. He has spent more than 20 years in tungsten, including 13 years at Wolfram Bergbau und Hütten, Sandvik's tungsten business, and has worked as an independent agent and consultant to the tungsten and hard metal industry since 2019.

From January, the door shuts

Since 2023, the Pentagon has barred Chinese, Russian, Iranian and North Korean tungsten from defense contracts. From 1 January 2027, that restriction moves upstream. It will no longer matter where the tungsten was melted or processed. What matters is where it was mined. Ore, feedstock, recycled material: if it started life in one of those four countries, it is out. The route that kept the loophole open – mine in China, process somewhere friendlier, sell it as non-Chinese – closes for good.

That's the American side. On the other side, producer countries are shutting their own doors. Zimbabwe banned exports of tungsten ore and concentrates in July, confirmed by the Ministry of Mines and reported by Bloomberg last week. Vietnam's industry ministry has drafted a proposal to pull tungsten off the permitted-export list entirely. Vietnam is the world's second-largest producer, at around 3,400 tonnes a year. If that draft becomes law, the non-China supply pool gets a lot smaller.

Zimbabwe barely produces any tungsten. The volume is negligible. But the pattern is worth watching – one more producer country pulling raw material off the open market. The list of places you can actually buy tungsten outside China keeps getting shorter.

Opinion

People ask why we don't branch out. Gold is on a run. Lithium gets headlines. Every commodity has someone telling you it's the one to watch. We do tungsten and molybdenum. We don't know anything else – and I would rather say that than pretend otherwise.

A vet treats everything that walks through the door. Dogs, cats, parrots. A doctor specializes. The guy who whips out your appendix does not do brain surgery, unless you're on a budget.

Mining is the same. Every deposit has its own geology, its own metallurgy, its own set of problems you only discover once you are underground. The companies that chase whatever commodity is fashionable learn everything at surface level and nothing underneath. We have been at this long enough to know what we don't know – and we don't know gold or lithium or anything that's not a refractory metal.

We are the doctor.

In the media

The analysts have arrived. Jefferies has initiated coverage of Almonty with a Buy rating, citing the tightening tungsten market and the growing need for supply outside China. With the shares up considerably over the past year, interest in both Almonty and tungsten has clearly moved on.

What matters now is execution – bringing new supply into a market that badly needs it.

*  *  *

On the tungsten news front, Almonty partnered with Rwanda's government last Monday, securing a foothold in Africa's largest tungsten-producing nation. By Thursday, the miner, which expects to become the leading Western producer of conflict-free tungsten (ex-China), tapped Swedish mining equipment maker Sandvik's Wolfram Bergbau und Hütten AG unit to process existing tailings from its Los Santos mine in western Spain.

As last week's news proved, Almonty's move is about bringing the most immediately available tungsten supply to the West as resource wars and China's critical materials chokehold on the world collide with the US rearmament supercycle set to kick off in the near term.

In other words, the West doesn't have the time to open new mines. 

via Christian Keller, Barclays' global head of economics research

Without critical materials, the West's rearmament supercycle, reindustrialization, data center buildouts and a nearly endless list of other projects would not be possible. Wall Street should refocus on producing miners that can deliver today because they're the ones providing the building blocks that make Western reindustrialization possible. 

Tyler Durden Sun, 09/20/2026 - 17:30

Iran's Military Believes US Is Preparing To Resume Attacks

Iran's central military command has announced it believes the United States has made the decision to resume military attacsk on the Islamic Republic.

Citing the country's General Staff of the Iranian Armed Forces, state media IRIB states that "According to intelligence received, the US has once again decided - with the green light from certain regional countries - to resume actions against Iran during a joint meeting in a European nation."

Getty Images

At the same time Iranian leadership again warned US allies in the region that they'll be considered "complicit" if the US resumes it military assault on the Islamic Republic. The Iranian military HQ stated that "any mistakes will result in painful attacks."

Tehran further indicated Sunday that it is still awaiting Trump's response to its conditions for ending the war. Its chief negotiator Mohammad Bagher Ghalibaf confirmed to AFP that Iran's demands were sent to Washington via the Qataris.

Starting Saturday night there was an avalanche of online chatter over potential new escalation, given President Trump abruptly cut short a visit to Camp David.

Some pundits saw in this a sign of some kind of imminent military action in the Middle East, also amid reports that extra military hardware is being sent to the region.

But others have suggested this is just setting up for another TACO moment, and reports of escalation is just the White House trying to instill fear and uncertainty in Tehran.

There's also speculation that Washington could be moving towards direct intervention in the Saudi-Yemen conflict, after the Houthis have been attacking key Saudi Aramco oil sites. Also, Riyadh has just come under attack for the first time of the war.

INSIGHTS: There’s a TON of very obvious signaling taking place right now for imminent massive escalation against Iran.

President Trump, just after Camp David, is returning early to the White House (and reported on by Barak…).

Bibi Netanyahu is cutting his U.S. Tour a day… https://t.co/ntsZHwJj00

— Brett Erickson (@BrettErickson28) September 19, 2026

In the background is a new State Department warning to Americans to avoid all travel to the Middle East. A statement indicated that the Iran war could quickly worsen.

“This military conflict has the potential to escalate rapidly. Americans outside the Middle East should seriously reconsider travel to and through the region,” the State Department said late Saturday on X. It said that Americans currently in the region should "exercise heightened vigilance and be aware of potential flight cancellations, airspace closures, and travel disruptions."

Tyler Durden Sun, 09/20/2026 - 17:00

Trump Says His Planned DC Arch Would Host Drones And Snipers

Via Headline USA,

President Donald Trump said Sunday that the massive arch he wants to build between the Lincoln Memorial and Arlington National Cemetery would become a "top grade military complex" able to host drones and snipers while storing ammunition.

It is one more example of how Trump is insisting that his initiatives to beautify the White House and the city are also serving a defensive purpose.

Trump has been calling the new White House ballroom a "military complex" and arguing it is necessary for national security purposes.

The Republican president said in a social media post that he had agreed, at the "strong request" of the military, to convert the planned 250-foot-tall memorial arch "into a top grade Military Complex/Triumphal Arch, to house, store, and have the rapid ability to use large numbers of drones, plus Snipers, on both the roof and plaza areas, and additionally have and hold large quantities of sniper ammunition in storage."

Trump says planned arch to have ammunition storage and staging areas for snipers pic.twitter.com/Y1MpaPLO9J

— Jennifer Jacobs (@JenniferJJacobs) September 20, 2026

After teasing it in October 2025, Trump has continued to promote his vision for a 250-foot triumphal arch situated between the Lincoln Memorial and Arlington National Cemetery.

The arch will “celebrate the triumphs of the American people, inspire patriotism and love of country, and beautify our nation’s capital,” the Department of the Interior, as its sponsor, declared in its project materials.

The arch (one of several projects that the Republican president is pursuing to leave his lasting imprint on Washington) is currently awaiting final approval from the National Capital Planning Commission (NCPC), a federal review panel dominated by Trump appointees.

Among the others are the white House ballroom, renaming and renovating the Kennedy Center, refurbishing the Lincoln Memorial Reflecting Pool and rebuilding a golf course in East Potomac Park that could significantly reduce the public's access to running and biking paths.

Rep. Don Beyer (D-Va.) on Sunday criticized Trump’s announcement.

“Putting a drone launching site directly in the landing path for [Ronald Reagan Washington National Airport] is a stupid, dangerous, and unworkable idea,” Beyer said on X.

“Trump clearly expects to lose a lawsuit and therefore wants to set up a pretext to argue that the arch is tied to national security.”

 

Tyler Durden Sun, 09/20/2026 - 16:30

With The Fed Behind Us…

By Peter Tchir of Academy Securities

With the Fed Behind Us…

The 10-year Treasury sold off after the Fed bounced Thursday, only to resume selling, finishing the week just under 5%. Stocks, which seemed to move up and down with Treasuries, decided to move to the beat of their own drum into the close on Friday. Similarly, for the past few weeks, it seems that if you knew oil was up/down, you could predict yields would be up/down. Not on Friday.

On this special day we will build on Thursday’s post-FOMC report: Back to Regularly Scheduled Programming. You might be wondering “what makes today special”? Well, for the first time ever, the T-Report has the same access to the White House as CNN, though not quite how we hoped it would happen. The ban definitely seems weird. Not sure what to make of it, and maybe it will be nothing, but it does seem strange at the very least.

In Thursday’s report we touched on:

• Oil and energy prices, which we will focus on more today.
• Japanese Yen. Support has broken the 155 level solidly (closing at 156.9), which is likely to cause it to weaken further as a lot of people were willing to bet on I Am the House Now Bessent.
• Compute Build and AI Spend. Increasingly, this is likely to be a focus of this week’s Trump/Xi summit.
• Space. We need to do more to focus on the opportunities and risks (commercial and national security) for space. Working with some of Academy’s GIG members to more thoroughly assess this, as the national security aspect seems to be gaining more attention.

The Houthis and Saudi Arabia

Should we be treating what is going on between the Houthis and the Saudis as a subset of the Iran/U.S. war? The Houthis are, after all, a proxy of Iran. The Saudis have been working with the U.S. and the President, so are they merely just an ally? A subset, an extension, or something in its own right?

While Iran is likely influencing the Houthis and certainly has given them the tools to cause havoc and mayhem, the Houthis seem to be taking the initiative. Maybe they see the U.S. as distracted with Iran. Maybe they see the U.S. testing the Saudis’ loyalty as an ally. In any case, it seems like they have seen an opportunity and are taking strides to set their agenda in and around the Red Sea. They have seemingly gone out of their way to avoid any attack against U.S. assets. Instead, they are hitting the Saudis where it hurts: their energy industry. And according to reports, that includes jet fuel facilities at the airport.

We cautioned about getting excited that the pipeline damage inflicted on the “alternative to the Strait” pipeline would be repaired quickly. One, the damage seemed more extensive than just to the pipeline. Two, and more importantly, there is no evidence that new strikes could be thwarted. It seems like we should start pricing in “disruptions” to the energy complexes that are outside the scope of the U.S./Iran conflict.

Will the Saudis be able to defend themselves? Will they “beg” America to get involved more directly? If they do, will the U.S. get involved? Will they try to disrupt traffic through the Red Sea? If so, how much can they do before the U.S. gets involved? I’d ask how much before Europe would get involved, but that seems like it is too unlikely to even think about (they probably should, but it doesn’t seem imminent).

Markets seem to only react badly when actual events affecting energy prices occur. Markets seem to react positively to any story, rumor, or hope that is positive. That relationship may need to change…

Even My Mother Knows Diesel Prices are High!

Usually, by the time my mother knows something is affecting financial markets, it is a pretty good time to fade the trade as it has become totally consensus. I’m not so sure about that this time.

Since the war began, we’ve been focused not as much on oil, but more on LNG and Diesel. Both are “tighter” than oil itself. More susceptible to supply chain disruptions. Less flexibility to work around. So rather than “fading” something we’ve argued that people should focus on, we should just embrace that people (including my mother) are now thinking about the dangers of rising diesel prices: for industry, transportation, and agriculture (and maybe the “back up” generators at some data centers).

We already busted through the “red circle” that we had in last week’s version of this chart.

This is a big deal and has created some chatter about restricting diesel exports from the U.S. As discussed in prior reports, that is not likely to work (even with restrictions, the domestic price isn’t likely to deviate too far from Global Price minus Transportation minus Storage). It is also likely to hurt U.S. companies going forward as customers entering into new contracts need to consider this possibility (plus there are likely to be some legal challenges).

Rising diesel prices are high on my list of inflation pressures that are mounting and difficult to control (unless you are in charge of the war efforts).

One Path to Victory with Iran

Anything could happen. We could all wake up on Monday to find that there is a “deal” that is on the table and close to getting done. We did have an MOU after all (though from day 1, it seemed that although we all saw a written version, there were “unwritten” versions or promises made, that were inconsistent and it seemed like neither side had really listened to what the other side had said or wanted). I won’t discount some sort of “deal” but it seems difficult to believe that it will be one the U.S. can claim as a major victory, if it happens now (given the current news flow surrounding the war).

The economic sanctions could pressure Iran into a deal. The blockade has been very successful. Iran seems to be able to “contain” the amount of trade going through the Strait against their interests (some is going through, but Iran is still able to scare many into not trying to run through the Strait).

• Can the increased focus on sanctions work? Sure, but in a matter of weeks? Hmmmm…I find it difficult to believe that a nation that kills its own citizens on an industrial scale will collapse in weeks, or even a couple of months. They have had experience with evading sanctions for decades, albeit sanctions not being enforced as strictly as they are supposedly being enforced now.
• It remains unclear how sanctions will work unless the U.S. is willing to go after China (and Turkey) to the full extent of what Bessent has outlined. So far, that doesn’t seem to be happening. It will almost certainly be a discussion point this week for Trump and Xi.

Sanctions are helping and might be enough to force a good deal, but that doesn’t seem like a “tomorrow” sort of event.

Increasingly, we are being asked about “knocking out” Iran’s infrastructure. Could that happen? Yes, but here is a quick assessment:

• Anything clearly military focused has already likely been hit and destroyed.
• That leaves “dual use” facilities. Facilities that have both a military use and a commercial use. Let’s say energy sources close to military facilities that also service communities. Some of these are viable targets as the military usage is enough to justify going after them. Similar for some bridges necessary for moving troops or armaments. But this can be tricky: on a legal and humanitarian level. Global perception, while not necessarily at the top of the admin’s concerns, should still be a concern.

This is a possible path for the U.S., but it could be a difficult balancing act of doing enough to force change, without doing too much reputational (or even legal) damage.

Taking the Islands that control the Strait: after the midterm elections.

One theory that General (ret.) Bellon discussed this week is taking action to secure the islands that control the Strait, culminating possibly with Kharg Island.

The rationale is:

• Wait until after the midterms, because risks to U.S. troops will increase, but it won’t be as politicized as it would be prior to the elections. Prior to the election, IRAN WILL HAVE MORE OPTIONS than after the elections. Basically, if Iran believes the midterms represent a hurdle to Trump, they can take different actions than they can after the midterms have occurred. There is no longer some “deadline” for Trump, giving him more flexibility and changing Iran’s response function. This makes a lot of sense.
• Sanctions may work to create a deal, but anything resembling a different regime is not likely. Taking the islands that control the Strait, and eventually Kharg Island itself, would cripple their energy industry and demonstrate real weakness on their part. It will be difficult to do without loss of further life, but when so many other options leave us with a “kick the can” option, the President may decide an option that has horrible costs may be better than going through this effort every few years.
• Signaling the will to do this might be enough to change Iran’s negotiating stance. Taking even one small, relatively insignificant island that is the easiest to defend may also change the calculus for Iran. The U.S. might win not by taking every Island, including Kharg, but the start of turning a threat into reality could be enough.

What to watch for:

• The U.S. moving vessels with top-notch medical facilities into proximity (less than 1 hour by helicopter, say as a guideline) would be a good indication. The military’s commitment to saving each and every life possible, and providing the best care possible, is real. So, they would need to move these vessels that can perform state-of-the-art surgery and operations, close enough to help any soldiers needing aid.

Of all the discussions that I’ve heard around a “post-midterm” victory, this path seems reasonable. Maybe the theory would even be that once Iran sees the ships moving in, and knows the President isn’t potentially hamstrung by upcoming midterms, it capitulates and looks for a deal? Maybe a bit optimistic, but it resonates with me.

Greenland Deal

The President announced a deal. I will reserve comment until we see the terms of the actual deal (so far, as has become the norm, there are all sorts of assertions from a variety of sides, with little documentation).

The deal could be a real game changer, as the President implied via Truth Social. It might just be an updated formulation of agreements already in place (never hurts to update something that was written long before the polar ice caps were melting, when computers were the size of a house, and rare earths and critical minerals weren’t required in vast amounts).

A win in any case, but how much of a win remains to be seen. And could it have been done without all of the “annex” / “take” Greenland rhetoric?

Trump and Xi

We will provide a full take on this on Tuesday morning, as we work with the GIG to figure out what is likely the highest priority on both sides.

A few months ago, trade, rare earths, and critical minerals would have been high on that list. A few weeks ago, Iran and global energy had to be high on that list.

Now, cyber, AI, and compute have to be highest on the list.

At first blush, on most of these issues, the U.S. seems to need more from China than they need from the U.S. Never a great way to enter into a summit with China, but we will delve deeper on Tuesday.

Bottom Line

I’m running out of time in Vermont, and it might be nicer to spend it outside rather than at my laptop (and the Wi-Fi is spotty at best).

Diesel and the Middle East are key to rates.

For now, I think the path for energy prices (and stocks) and rates (globally) is higher. The news flow has not been positive this weekend, and it is difficult to see that changing quickly as Trump seems to be focused on dealing with Iran from a “stronger” position after the midterms (not stronger in terms of having the support of the House and the Senate, stronger because the perception that he has a deadline is gone).

For compute, Cheap Chinese Compute remains a concern.

It is difficult to get all “warm and fuzzy” about the outcome of this summit for markets. More choppiness seems to be the order of the day, with a bias to the downside for me on the compute spend story (though good for their credit spreads).

We get to bookend this week with a Monday morning appearance on CNBC and Friday morning on Bloomberg to analyze the results of the summit!

Should be another interesting week that we all have to navigate. Even with the Fed behind us, we will be paying attention to the data that may determine the next move for the Fed, but Iran, the Houthis, diesel, rates, and the summit are all going to move markets (hopefully in accordance with how we are recommending positioning).

Tyler Durden Sun, 09/20/2026 - 15:30

Grassley Urges Diesel Export Ban As Global Fuel Crisis Stokes Resource Nationalism Fears

"With diesel at $6.57 in Iowa, why doesn't Pres. Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated," Iowa Sen. Chuck Grassley wrote on X late Saturday night.

Grassley warned, "High diesel prices ARE KILLING FARMERS' INCOME."

W diesel $6.57 in Iowa why doesn’t Pres Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated. High diesel prices ARE KILLING FARMERS INCOME #cornwatch #soybeanwatch

— Chuck Grassley (@ChuckGrassley) September 20, 2026

Grassley is not wrong about the global refining crisis that is squeezing farmers and anyone else who uses the industrial fuel that powers the economy, from truck drivers and freight operators to businesses across virtually every industry. 

The risk now is that an economic shock could materialize if fuel costs stay elevated, with the latest AAA data showing the nationwide average diesel price set to cross $6.50 a gallon.

Chatter on Capitol Hill about a diesel export ban has increased, with Senate Majority Leader John Thune telling reporters last Tuesday that he is "open to exploring" the idea.

Any ban on refined petroleum product exports would escalate resource nationalism and could initially boost domestic availability and lower U.S. wholesale prices, particularly near export terminals. The problem is that domestic relief would be uneven because shifting barrels to the Northeast or West Coast would be difficult.

Barclays refining and midstream analyst Theresa Chen warned last week, "We continue to view the possibility of an export ban as both detrimental to the US refining complex and unlikely to provide the intended price relief."

The ban could weaken production incentives. If retained fuel overwhelms domestic storage and distribution capacity, weaker refinery margins could eventually encourage lower refinery runs.

On top of that, foreign buyers of the industrial fuel would need replacement cargoes, which could exacerbate the global shortage and accelerate resource nationalism as other governments tighten control over fuels. Those restrictions could also extend beyond energy products to critical materials.

Grassley’s call for an export ban faces resistance within the Trump administration. Interior Secretary Doug Burgum said last week that restricting oil or fuel exports would be unlikely to lower consumer prices and could provoke retaliation from trading partners.

The risk now, as Bloomberg Intelligence senior commodity strategist Mike McGlone warned last week, is that a diesel crisis could trigger an economic shock similar to what happened during the 2008 energy crisis.

Tyler Durden Sun, 09/20/2026 - 15:00

Stolen $586,000 Copper Shipment Found Hours Later At Kentucky Warehouse

A load of copper worth nearly $600,000 was recovered on Sept. 11 after investigators followed a trail from Illinois to Kentucky and Ohio, wrapping up the initial search only about eight hours after the theft was reported, according to Yahoo News.

The case began when a shipment scheduled to travel from DeKalb, Illinois, to Rock Hill, South Carolina, never made it toward its intended destination. Authorities believe whoever collected the freight had presented themselves as an established trucking company, using genuine business information to make the pickup appear legitimate.

The breakthrough came from location data tied to Schneider National equipment involved in the haul. Rather than heading southeast toward South Carolina, the freight was traced to Prestonsburg, Kentucky, where police found the entire six-pallet copper shipment inside a warehouse. Three people were detained in Kentucky.

Photo: FreightWaves/Yahoo News

Meanwhile, investigators continued following the equipment used to move the load. A Schneider chassis and container were located in Chillicothe, Ohio, while state troopers separately intercepted the tractor associated with the pickup. One additional person was taken into custody in Ohio.

Yahoo reports that the operation involved authorities in Illinois, Kentucky and Ohio, along with Schneider National and CargoNet, which had helped flag the theft. Information about the truck, trailer and driver was quickly distributed among agencies as investigators attempted to follow the shipment across state lines.

Police are now examining whether the incident may overlap with another theft involving Schneider equipment and whether the people or trucking identities involved could be part of a wider cargo-theft operation. So far, authorities have not publicly identified the four people detained or disclosed what charges they may face.

The episode also illustrates how freight theft has evolved beyond simply stealing unattended cargo. Criminals can use authentic company information to appear legitimate long enough to take control of valuable shipments. In this instance, rapid reporting and tracking technology allowed investigators to locate both the cargo and much of the equipment before they could disappear further into the supply chain.

* * *

Tyler Durden Sun, 09/20/2026 - 14:00

'Keep Digging'... Says Shovel-Salesman Jensen Huang

Submitted by QTR's Fringe Finance

Maybe it’s the bullshit detection genes that were passed down to me from my mother, but I simply can’t wind up trusting a word Nvidia CEO Jensen Huang says about how much AI regulation the United States needs.

Just call it a gut reaction from me. It doesn’t mean Huang is necessarily wrong about AI. It’s just that I look at him and all I can see is one of the most financially conflicted people on planet Earth to ask about AI regulation.

According to CNBC, Huang has increasingly gained President Trump’s ear on AI policy, appearing alongside him repeatedly and pushing a relatively simple message as concerns about AI safety mount: keep moving, keep building and don’t let regulation get in the way.

What an astonishing coincidence that this also happens to be fantastic policy for Nvidia, which sits at the nerve center of a multi trillion dollar AI infrastructure boom…which itself sits at the nerve center of an even larger global economic ponzi scheme (hereinafter referred to as: the global economy).

Nvidia’s chips are effectively the picks and shovels of the entire operation. Every hyperscaler racing to build another data center, every AI lab trying to train a larger model and every corporation terrified of being left behind has helped create extraordinary demand for Nvidia’s hardware. In return, Nvidia has “invested” in a countless number of other operations that rely on its hardware. One big happy circle jerk family.

And one of the most spectacular corporate ascents in history for Nvidia. It has become one of the central pillars of the AI trade, which itself has become enormously important to the U.S. stock market. Nvidia and the other mega cap technology companies tied to the AI boom carry enormous weight in major indexes owned by investors around the world.

There is a staggering amount of money riding on the proposition that the AI spending boom continues. And sitting directly in the middle of it is Jensen Huang. It’s been the reason for my (somewhat) tongue-in-cheek opinion that Nvidia will never miss an earnings report again, because the powers that be would rather see them commit egregious accounting fraud than tell the truth about shitty numbers and watch the global economy collapse.

And now Huang is apparently becoming one of the president’s most influential voices on precisely the question that could determine how quickly this machine is allowed to keep running. You almost have to admire the efficiency.

CNBC reports that Trump has increasingly echoed Huang’s views on AI safety, while Huang has publicly dismissed some of the more apocalyptic warnings surrounding artificial intelligence. His preferred solution to many safety concerns is essentially “good old fashioned engineering.”

Maybe he’s right. But forgive me if I’m not eager to treat the CEO of Nvidia like an objective third party monk who has been summoned down from a Nepalese ashram to offer Washington philosophical wisdom about the future of humankind. The guy is a CEO of the company selling the hardware required to run the experiment.

Nvidia makes extraordinary amounts of money when OpenAI, Meta, Google, Microsoft, Amazon and everyone else decides they need more compute. It makes money when data centers get larger. It makes money when models get larger. It makes money when the AI arms race accelerates. Somehow, I assume, it even makes money when I use my toaster to make an english muffin in the morning.

Presumably, Nvidia would face a less favorable commercial environment if policymakers imposed rules that materially slowed that race. Or altered my breakfast plans.

That doesn’t mean Huang is lying. It doesn’t mean his policy arguments are necessarily wrong. And it certainly doesn’t establish some secret conspiracy between Nvidia and the White House. But it does mean the conflict of interest is so enormous you can practically see it from space.

This is why I find Huang’s growing proximity to Trump far more interesting than another photograph of two powerful men smiling at dinner.

CNBC reports that Huang is expected to attend the president’s state dinner for Chinese President Xi Jinping. The administration, meanwhile, has emphasized accelerating American AI development and resisting restrictions it believes could weaken the United States relative to China. Those positions can align extremely well with Nvidia’s commercial interests.’

Maybe that alignment produces good policy. But investors should understand who is sitting at the table and what they have riding on the outcome.

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If Exxon’s CEO became one of Washington’s most influential voices on whether America should restrict oil drilling, I wouldn’t simply write down his opinion and call the matter settled.

If JPMorgan’s CEO were advising the president about whether banks needed additional capital requirements, I’d probably keep JPMorgan’s balance sheet somewhere in the back of my mind.

And when big pharma figured out a way to “find” clinical studies questioning ivermectin’s safety record in the middle of a pandemic where they were trying to sell vaccines, despite ivermectin being on the WHO’s Model List of Essential Medicines and having been used successfully in 3.7 billion doses for the last 39 years, I didn’t trust that either. The timing was just too…perfect.

So when the CEO of the company arguably benefiting more than anyone else from the AI capital spending explosion tells the president that fears surrounding AI are overblown and additional regulation could be counterproductive, I’m going to apply precisely the same standard.

Huang’s job is not to protect my portfolio, the stock market or civilization. His job is to run Nvidia, and he has been extraordinarily good at it. That is exactly why I don’t understand the impulse to treat his pronouncements about AI policy as though they arrived on stone tablets.

The stakes here are much larger than Nvidia.

AI enthusiasm has become deeply embedded in the market’s valuation structure. Trillions of dollars of market capitalization are tied directly or indirectly to assumptions about continued AI investment, continued infrastructure spending and eventual returns on an almost unimaginable amount of capital being poured into the sector.

Anything that threatens that narrative, including disappointing returns, slower model development, power constraints, tougher regulation, customers deciding they have bought enough GPUs for a while and/or me discontinuing use of my toaster in the morning, potentially threatens much more than one semiconductor stock.

AI will also play a massive role in the upcoming midterm elections. There is also a very real case that if we pass a certain point waiting to regulate AI, we may not have a chance to in the future. And there’s also arguments that AI CEOs are calling for regulation to stifle competition. Whatever the case, we have to go about regulation ideas in a more objective fashion.

Jensen Huang may ultimately be correct that engineers can manage these risks without heavy government intervention. He may be correct that excessive regulation would damage American competitiveness. Those arguments deserve to be evaluated on their merits.

But they should also be evaluated alongside the economic incentives of the person making them. There is something almost comical about watching the man standing closest to the cash register explain why everybody needs to keep shopping. You don’t need a conspiracy theory to be skeptical in this situation.

Follow me one more time. Huang runs a company whose fortunes are intimately connected to the continuation of the AI boom. The Trump administration has publicly emphasized American AI dominance, economic growth and strong financial markets. Where those interests overlap, Nvidia has every reason to make its case as aggressively as possible.

And Huang could be doing exactly that. Good for him. But I’m not confusing excellent corporate strategy or political relationship building with an independent assessment of whether AI poses serious risks or requires additional oversight.

When the CEO of the company selling the picks and shovels tells Washington that the gold rush shouldn’t be slowed down, I don’t hear the voice of an impartial referee…I hear the guy selling the shovels telling everyone to keep digging.

--

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. 

 

Tyler Durden Sun, 09/20/2026 - 13:30

Ocean Container Freight Costs Explode, Rivaling COVID-Era Crisis Highs

A worsening ocean freight price shock is reviving concerns about the supply-chain disruptions seen during the pandemic and the 2024 Red Sea crisis.

If continued through the fall and winter, higher shipping costs could intensify inflationary pressure, squeeze corporate margins, and weaken growth. Together, these factors raise the risk of a broader economic shock, particularly if diesel prices remain elevated. 

Bank of America retail analyst Lorraine Hutchinson warned in a note Saturday that ocean freight rates have jumped 201%, approaching the 250% spike seen during the 2021 container ship shortage. Meanwhile, AAA national average diesel prices near $6.50 a gallon are crushing truckers' margins and boosting rates on the nation's highways. 

"Most contracts are set in the spring, but we're watching this for those using spot rates and as a potential headwind for 2027," Hutchinson said.

Beyond container rates, the Baltic Dry Index, which tracks freight rates for several vessel classes, including Capesize, Panamax and Supramax vessels, has jumped to December 2023 highs. 

"We see the current surge as something of a perfect storm, with vessel supply tightening and demand firing in both basins at the same time," Thurlestone Shipping analysts said.

A prolonged freight price shock could carry today's shipping squeeze into the 2027 contracting cycle, exposing businesses to higher transportation costs and increasing pressure to pass those costs on to consumers.

Tyler Durden Sun, 09/20/2026 - 13:00

FBI Using AI To Stop School Shootings; Doomers Want It Paused

Authored by Steve Watson via Modernity News,

While the same 'current thing' leftists who spent years on climate, oil and "Palestine" now chants that AI will wipe out the human race, FBI Director Kash Patel just announced that the agency is using the technology to actively prevent mass shootings, including school attacks, before they happen.

Patel said artificial intelligence helped the bureau prevent possible school shootings in North Carolina and about half a dozen other states, and that he has increased the FBI's use of AI by 605 percent.

That is the version of AI that the pause-and-treaty crowd does not want discussed.

? JUST NOW: In a MASSIVE win, FBI Director Kash Patel announces that half-a-dozen states' possible school SH00TINGS were thwarted through the use of AI

One was just stopped in North Carolina ??

"We've done it in North Carolina and about half-a-dozen other states to prevent... pic.twitter.com/SKzwJIkvnV

— Eric Daugherty (@EricLDaugh) September 19, 2026

The comments match what he told the Senate Judiciary Committee days earlier. When he took the job, the bureau had two test use cases for artificial intelligence. "We just hit our 140th, that's a 605 percent increase since I've been in this seat, to process information to triage intelligence, analyze, and get this information out to our local partners."

This is not a science-fiction sermon. It is tip triage.

Patel has been making the operational case since spring. On Sean Hannity's podcast he said the old FBI treated modernization as an afterthought.

"AI was never used at the FBI till we got there, literally crazy," he said. "I'm using it everywhere."

The bottleneck was volume. The National Threat Operations Center takes thousands of tips a week. "If we had just humans look at it, we would never sift through them all." He put the question more sharply still: "What's the point of collecting terabytes of data if you can't sift through it?"

The North Carolina case is the one he keeps returning to. "We stopped a school massacre in North Carolina because we got a tip and we were able to triage it with artificial intelligence." A separate New York school threat, he said, was disrupted after "a tip from our private-sector partners who are building out AI infrastructure."

In a Fox News op-ed he described the machinery. When a call hits NTOC, AI generates a transcript, drafts a summary of the threat, scans open cases for matches, and assigns a lead value so the hottest tips rise first.

"This specific threat intake process helped the FBI quickly act and stop an attacker plotting a mass shooting at a North Carolina preschool," Patel urged.

The same overhaul, he wrote, helped the bureau identify and locate 6,300 missing children last year - a 30 percent increase - and arrest 2,000 abusers, a 20 percent increase. In a Richmond case, facial recognition tools were used to pull 8- and 12-year-old children away from a would-be abuser now facing 50 years.

The tools are being used to rank leads and get them to agents and local partners before someone walks through a school door.

It's not something that has been considered by the doomer leftists now literally calling for AI to be 'switched off'.

San Francisco and London just got an NPC software update. The banners changed. The wardrobe did not.

Dozens marched from OpenAI's Mission Bay headquarters to Anthropic's offices and on to San Francisco City Hall, demanding Mayor Daniel Lurie declare a local "AI state of emergency." Chalk on the pavement read "Extinction is on the table."

Organiser Hunter Glenn told reporters, "I was pretty scared about the possibility of extinction for awhile." In London, "PauseAI" and "Pull The Plug" rallies formed after Anthropic alignment lead Evan Hubinger said he personally believed there was a greater than 10 percent chance AI could "kill all humans" within a decade. Their slogan: "10% chance of extinction? 100% chance of resistance."

Scott Jennings had already mapped the rotation. "It's always the same apocalyptic crowd moving from one issue to the next. Responsible guardrails are one thing, but handicapping American innovation while China speeds ahead with zero regulation isn't sound policy - it's just foolish."

Nvidia CEO Jensen Huang gave the extinction industry a simpler number. There is a "0% chance" the world ends in 2030. "2030 is not going to be the end of the world."

A U.S. pause would not freeze the technology. It would freeze the labs already winning and hand the century's defining stack to Beijing. Europe sold GDPR as virtue and now hosts none of the world's dominant labs.

Palantir co-founder Joe Lonsdale told Jesse Watters the scare is not civic caution. It is a campaign.

"These guys don't believe in God. They're atheists, but they've created something they believe is God," Watters said, laying out Lonsdale's point. "This is their Messiah, and this is their end of the world."

Lonsdale was direct. "There is a coordinated campaign to make the American people afraid." San Francisco, he said, dropped Christianity and still wanted a messiah and an apocalypse. "If you give up religion, you want some kind of messianic complex, some kind of big thing to believe in. These effective altruists - this is their Messiah, this is their end of the world, this is their obsession."

An industrial revolution is coming that would be "amazing for America if we get it right." The people trying to stop it, Lonsdale said, "hate America."

That theology now has a policy shop. Bill Gates is back on the emergency circuit calling AI an "alien intelligence."

"I don't think any government is nearly as deep on this as they have to be," he told Reuters. "Governments are way behind on this one." Then the Hollywood script: "There's all sorts of movies where some aliens are coming, and magically the US and China and everybody comes together to solve the problem. AI is kind of like this alien intelligence. It's here, and we better do like it shows in those movies."

On a podcast he went further. "It's not the role of the industry to self-regulate or understand the whole-of-society impact that comes out of AI." He wants a permanent cross-border watchdog stitched from nuclear inspections, aviation rules and ozone treaties - and a meeting with Xi Jinping. In the same news cycle his foundation pledged $1 billion over two years to spread AI through schools, clinics and farms. Alarm in one hand. Pipeline in the other.

President Trump has already rejected the slowdown. "We're leading China in AI," he said. "Whoever wins AI, wins." A lot of the horror stories being shopped around, he added, "won't happen."

Trump also answered the doomer circuit with an appointment, not a pause. He said he is forming an "AI Force," modeled on Space Force, and will name a high-IQ "AI Czar" to keep the United States first while the left's latest scare campaign is treated as what he called it: another hoax.

"AI is the next Industrial Revolution, or Internet, but will be even larger and more impactful, possibly as much as 25% of our Country's GDP," he said. "We are leading China, and the rest of the World, and I intend to keep it that way."

"We will not in any way hinder or stifle the Growth of this incredible Industry. Rather, we will cherish it, help it, and watch over it, as it grows," Trump added, noting that bad actors can be handled with the criminal and civil courts already on the books - not a Gates-style global leash.

? BREAKING: President Trump announces he will be appointing a HIGH IQ "AI CZAR" and launches the "AI FORCE"

Trump says we will UNLEASH AI and that the propaganda will fail

All of this will be geared towards not only BUSTING anti-AI hoaxes but keeping America number one. LET'S... pic.twitter.com/Cy3T8R1cBK

— Eric Daugherty (@EricLDaugh) September 19, 2026

One future is the FBI using models to transcribe a threat call, score it, match it, and get a cop to a North Carolina preschool before the shooting starts. The other is a global committee, a Netflix doom documentary sold as the new Inconvenient Truth, and a street mob that needs the next wipeout the way some people need a weather report.

China is not holding a pause-and-pray summit. Chinese firms have been accused by U.S. officials of stripping American models at industrial scale. Beijing's spy chief has treated AI as a Party-control problem, which is another way of saying the CCP wants the weapon.

Patel's point is narrower and harder to slogan away. Used by cops, under the law, the same class of tools the doomers want parked under an international inspectorate is already being used to find missing kids, rank tips, and stop school plots. Every plot that never makes a headline is a child who goes home.

America can build the thing, police the abuse, and keep the lead. Or it can let the extinction church write the rules while the bureau that just started using the tools is told to wait for permission from a committee Gates wants to staff.

* * *

Tyler Durden Sun, 09/20/2026 - 12:30

Big Oil Backs Mazama's $135 Million Bet On Superhot Geothermal

Mazama Energy announced $135 million in new capital with an oversubscribed Series B that included ConocoPhillips and Shell Ventures. With Devon Energy initially backing Fervo in 2023, a pattern is emerging with oil and gas veterans placing their bets in the geothermal industry. 

Some of the techniques developed by the O&G industry are translating well to geothermal projects. Horizontal drilling, well completions, and underground reservoir expertise are finding new purpose in an industry that is far more politically neutral than the fossil fuel industry ever could be.

Geothermal very well could be one of the AI-powered trades that is yet to be fully discovered. The Trump administration has thrown its full support behind the technology, as it holds some of the best qualities of nuclear energy without the [unfounded] radiation concerns.

Traditional geothermal, such as the established technology used by companies like Ormat, taps naturally occurring reservoirs of hot water and steam, making these sites very dependent on specific geology. The newer technology being utilized by companies like Fervo and Mazama engineers underground pathways to allow for injected water to circulate through hot rock and force the heat back to the surface. 

Mazama wants to push those techniques into much hotter rock. The company says its Oregon project demonstrated an engineered geothermal system at 629°F in 2025. Its second well, Athena, reached 10,350 feet in 15 drilling days this month, roughly 80% faster than the earlier well, and is drilling deeper toward 750°F.

The company highlights the benefits of the higher temperatures in their press release from the capital raise:

"Reaching 750°F (400°C) delivers up to 10 times the power of a conventional 390°F (200°C) well, owing to the much higher energy density of supercritical water and improved reservoir productivity. This allows Mazama to deliver projects using 75% less water and drilling 80% fewer wells than conventional geothermal developments."

According to Mazama’s announcement, the financing will support the DOE-backed Project Ceres, targeting 15 MW of electrical capacity per well and a power-generation demonstration in 2027.

Tyler Durden Sun, 09/20/2026 - 12:00

The Fed Rate-Hike Won't Fix The Inflation It Targets

Authored by Lance Roberts via RealInvestmentAdvice.com,

The Fed did what the bond market dared it to do. This past week, in a unanimous vote, the FOMC raised the target range for the federal funds rate by 25 basis points to 3.75%-4.00%, the first Fed rate hike since 2023. The stated reason was “price stability.” Yet this is a Fed whose own chairman has spent the past year insisting that real growth does not cause inflation, and that the drivers of this one sit largely outside the central bank’s reach. As we argued in prior Bull Bear Reports on the debt-and-inflation problem, that tension is not a footnote; it is the entire story of the Fed rate hike, and something worth exploring more deeply.

Make no mistake, it was the bond market that forced the issue. Such is interesting when you consider that Kevin Warsh wants the market to create the signal. Well, he got what he wished for. The 10-year Treasury yield pushed to roughly 5.01% around Wednesday’s decision, a level not seen in 19 years, while the 30-year cleared 5.35%. In other words, the market’s message was clear: “Raise rates, or we will.”

What The Fed Rate Hike Actually Does

However, what gets lost in transmission is what the Fed is actually trying to achieve through interest rate policy. The mechanism behind rate hikes or cuts is a demand story, nothing more. Raising the policy rate raises the cost of money across the system. Credit-financed demand cools first, mortgages, auto loans, capex, anything that lives or dies on the cost of borrowing. As that demand softens, the economy loses some of its power to bid prices higher, and the pace of increase eases. “Price stability,” in the Fed’s own framing, is really “expectations” stability.

Now, notice what the Fed’s tool never touches, and this was mentioned by Warsh on Wednesday. A higher Fed funds rate does not drill a well, end a war, or reopen the Strait of Hormuz. The Fed rate hike works on one side of the ledger, and one side only: the demand side. Such is the design, and such is also the limit. When the inflation in front of you is a supply problem, a demand lever pulls on the wrong rope.

What Warsh Means By “The Fed Can’t Fix Prices”

However, this is where most of the mainstream commentary gets sloppy. The Warsh school separates two things that the word “inflation” quietly blends together.

1. There are relative prices, set in the real economy by supply and demand for actual goods, and then
2. There is the monetary unit, the purchasing power of the dollar itself.

An iPhone gets cheaper because of globalized production. Oil prices rise because of a war that threatens supply lines. No policy rate produces either outcome.

When Warsh implies the Fed cannot fix prices, the defensible version of that claim is narrow and correct. Monetary policy cannot repair a supply-driven, relative-price shock. It can only compress demand until something breaks. Milton Friedman’s line, that inflation is “always and everywhere a monetary phenomenon,” is usually quoted, incorrectly, to argue the opposite. However, read that carefully, because it makes Warsh’s point. Friedman described the slow erosion of the currency over the years (driven by a general rise in inflation amid economic growth), not the price of gasoline during a Gulf conflict. The Fed owns the monetary unit, but does not own the oil market.

Look at the composition of the number the Fed is fighting.

Headline ran 3.4% in August, but energy alone ran 16.9%. Strip the war out, and the overheating story gets much harder to tell. That is not a demand economy running too hot. That is a supply line on fire.

Then Why Hike Into A Supply Shock?

Fair objection. If the Fed cannot produce a barrel of oil, the Fed rate hike looks like “theater.” It is not, and the reason is CREDIBILITY. A central bank tightens into a supply shock for three defensible reasons, none of which involve lowering the price of crude.

1. To keep inflation “expectations” anchored, so a one-off energy spike does not get built into wages and contracts and turn into the self-sustaining spiral of the 1970s.
2. To protect the institution’s word after the “transitory” humiliation of 2021, when the Fed looked through a shock and watched it metastasize.
3. Because the cost of being wrong twice dwarfs the cost of over-tightening once.

The dot plot shows the committee has made that trade. Sixteen of eighteen officials now see the possibility of at least one more hike this year, and four pencil in two.

“Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal.” – FOMC statement, September 16, 2026

Read that quote once again. The committee expressly said that it can steer prices with rates. However, history tells us more precisely that the Fed can reliably steer demand only. Those are not the same claim. Fighting a supply shock with a demand tool is the textbook recipe for stagflation, slower growth, and higher unemployment without curing the thing that lit the fire. Such is the box Warsh is in, the same Volcker-versus-Burns dilemma, now his to own.

Here is a clearer way to see the potential danger that Warsh is walking into. The same dot plot that pins the neutral rate at 3.1% now has the funds rate at 3.875% and climbing toward a 4.1% median by year-end. Once you strip away the language, the Fed is already about 90 basis points into restrictive territory, with more to come, even as Warsh insists conditions are not “broadly restrictive.”

That setup leaves the Fed with absolutely no margin for error. In the current environment, the Fed is hiking rates to offset an oil price spike. If energy costs continue to weigh on growth and the Fed continues to tighten, it will accelerate the deterioration. If oil reverses, the inflation impulse fades quickly, and the Fed’s hikes accelerate the economic bite. Both roads end at the same address, a Fed caught in a policy mistake, scrambling to fix the overshoot.

What Usually Happens To Stocks After A Hike, And Why This Time Is Different

The bulls have a comforting statistic ready for this week, and it is a real one. Going back to the late 1980s, the S&P 500 has slipped only modestly immediately after a first Fed rate hike, roughly 2% over the first three months, then recovered to average gains of nearly 9% over the following year, according to Goldman Sachs. LPL Financial puts the average 12-month gain at 6.7%, with a median of 10.7%. The tidy conclusion is that rate hikes are buying opportunities.

However, as is always the case, beware of “averages,” which in this case may well be lying to you. The reason I say that is due to the composition. The Fed almost always hikes into a strong, demand-driven expansion. It rarely hikes into a supply shock. When it has, the record is far uglier, and the damage tends to arrive late, once the energy spike feeds inflation and the tightening starts to bite.

After the 1973 oil embargo, the S&P fell 11% in a month and 41% over the next year. Another, more recent example, was when the Fed tightened amid the energy-and-inflation shock of 2022. During that period, the index lost roughly 19% for the year and remained underwater well past 12 months. Every “hikes are bullish” study carves 2022 out as the exception. Today, it is most likely not the exception, but the template.

One thing that matters is the pace of the Fed rate hikes. Charles Schwab’s strategists found that the S&P returned 10.5% over the year following slow tightening cycles and lost 3.6% after rapid ones. So what should you actually expect over the next year, hiking into a war-driven supply shock with the 10-year near 5%? Our read sits below. It is a judgment anchored in that history, not a backtest.

In the current market, the leadership is not subtle. When the Fed hikes amid an energy shock, money tends to flow to where inflation is a benefit rather than a hindrance. For example, in 2022, as shown below, energy led the market up by about 48%. This suggests that investors, today, like then, should favor energy, materials, and defensives with real pricing power, as well as staples and health care. On the other side, underweight long-duration assets such as technology and communication services, as well as rate-sensitive discretionary and real estate names. However, there is always a caveat. If oil breaks and the shock fades, that map inverts, and today’s laggards lead the way back.

Such is the danger of leaning on a historical average built almost entirely on the wrong kind of hike.

What This Means For Markets Over The Next Few Months, And How To Navigate It

So how do you navigate it? Rates are “higher for longer,” and the committee has told you plainly it is willing to go again. The 30-year above 5.35% and the 10-year near 5.01% raise the bar that every equity, especially long-duration growth, has to clear to justify its multiple.

The forecasters are already marking that reality. Ed Yardeni cut his year-end S&P 500 target to 7,900 from 8,400 on the decision, flagging the risk of a downturn over the next three to six months as yields climb on energy. We would take the warning seriously without treating it as gospel.

Let’s focus on the bond market, which is the harder call right now, and the argument cuts both ways.

The bull case is a good one.

“The term premium has expanded to levels that historically pay investors to own duration, and a hike that slows the economy is the classic tailwind for long Treasuries. If Warsh restores “credibility” and growth cools, the long end rallies, and this past week’s high yields will look like a gift.”

The bear case, however, also has teeth.

“The 30-year sits at a 19-year high for a reason: relentless issuance against a $40 trillion debt, layered on top of supply-driven inflation. Rate hikes can not fix that. That tail does not disappear either just because the Fed moved a quarter point. So, this argues that investors should take exposure at the point where the term premium is best paid for the risk. That is in the belly of the curve, with 5-7 year durations.”

Crucially, none of this argues for abandoning equities. It argues for respecting a market regime in which the risk-free rate finally competes with everything else. It is an environment where the biggest driver of “price stability,” the Fed cited, is a war it can’t control. The deeper problem lies one level down. The deficits and debt that we repeatedly flagged are the real long-run engine of price stability. Monetary policy sits downstream of all of it.

The Fed can raise the price of money. It cannot lower the price of a war. Size the portfolio for the difference.

Tyler Durden Sun, 09/20/2026 - 11:30

Bessent And He Lifeng Open High-Stakes Trade Talks Ahead Of Trump-Xi Summit

Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are meeting Chinese Vice Premier He Lifeng at JPMorgan Chase's Manhattan headquarters on Sunday for a critical round of trade negotiations. The all-day session marks the final ministerial push before President Donald Trump hosts Chinese President Xi Jinping in Washington beginning September 24.

JPMorgan is not involved in the negotiations, though Bessent previously invited CEO Jamie Dimon to speak at a Treasury-hosted G20 finance leaders meeting in Asheville.

This negotiating channel previously engineered the Busan truce, which capped bilateral duties near 20 percent after reciprocal tariffs spiked into triple digits. The administration has since rebuilt its tariff structure under alternative statutes, while broader excess-capacity tariffs remain paused until after this week's summit. The existing truce expires on November 10, adding urgency for both sides.

The Core Negotiating Agenda

Three primary issues dominate the current talks, alongside geopolitical tensions over Taiwan and Iranian oil:

• Rare Earths and Critical Minerals: Beijing committed in Busan to resume shipments of critical materials, but a senior U.S. official noted that China's performance has fallen short. Disruptions to these supplies significantly impact global manufacturing and technology. Beijing holds the leverage of offering more export licenses but has yet to restore pre-restriction volumes.
• Artificial Intelligence: Negotiations will cover both open-weight and proprietary closed-weight AI models. Low-cost Chinese open-weight systems are increasingly adopted by U.S. developers, prompting Washington to push for bilateral guardrails against misuse by non-state actors while avoiding a complete bifurcation of the tech ecosystems.
• Unresolved Trade Commitments: Negotiators are revisiting items left hanging from Trump's May visit to Beijing. This includes efforts to reduce tariffs on non-sensitive goods, finalize Chinese agricultural purchases, and address proposed U.S. tariffs linked to industrial overcapacity and forced-labor concerns.

Broader geopolitical issues continue to shadow the economic track. The conflict involving Iran and its impact on energy supplies has emerged as an unexpected major pressure point in the talks. Additionally, Washington continues to monitor the flow of fentanyl precursor chemicals from China, which will likely feature heavily in the main summit.

Expectations and Market Impact

The likelier outcome is diplomatic management rather than a major structural pact. Both administrations have a strong interest in avoiding a renewed escalation of trade tensions and preventing the Busan framework from falling apart before November.

Markets will look for any formal extension of the November 10 date, verified increases in magnet export permits, and whether agreements on AI guardrails contain binding terms.

Tyler Durden Sun, 09/20/2026 - 11:05

Good Intentions Paved The Road To The 2008 Financial Crisis

Authored by Paul Mueller via The Daily Economy,

This week marks the eighteenth anniversary of the failure of Lehman Brothers, a key event of the 2008 global financial crisis (GFC). Lehman's failure and the GFC more broadly were dramatic economic events. Lehman Brothers was the largest bankruptcy in US history to date. The global financial crisis gave rise to the Great Recession. The stock market fell by more than 50 percent, the economy contracted by 4.3 percent, unemployment rose from 4.7 percent to 10 percent, and the subsequent decade of US economic growth was abnormally anemic.

Many myths about Lehman's failure and about the 2008 global financial crisis continue to dominate public discourse. Popular consensus still places the blame primarily on deregulation, Wall Street greed, and reckless financial engineering. And many anecdotes inform their perspective.

Mortgage fraud was common and egregious, especially in the final few years of the housing frenzy (2004-2007). No-doc loans, NINJA loans, and liar loans were far too common - and most people were not held accountable for their complicity. Accusations of fraud by large banks and credit rating agencies, though, were largely overstated. Other than a couple big mortgage lenders engaged in systemic fraud (Countrywide) or truly reckless lending (Golden West), most financial institutions operated on the right side of the law.

The real driver of the GFC was pervasive bad incentives created by years of misregulation. Consider, for example, the Federal Reserve's Recourse Rule. This regulated how much capital banks had to hold against different classes of assets, and strongly favored mortgage-backed securities (MBS). Not surprisingly, banks shifted their portfolios to hold more MBS - one of the major asset classes to blow up in 2008. Regulation created this herd-like behavior, leading to overconcentration in a certain asset and greater systemic fragility.

Simultaneously, more than a decade of regulatory pressure forced Fannie Mae and Freddie Mac to lower their underwriting standards - a shift that soon infected the entire industry. The Community Reinvestment Act, federal agencies, and the Department of Housing and Urban Development all pushed for reduced mortgage underwriting standards. More people were able to buy a home - even if they couldn't afford it.

Peter Wallison and Edward Pinto document this regulatory transformation. Far from a market-driven "race to the bottom" by private lenders chasing short-term profit, housing regulators in the early 1990s viewed traditional underwriting standards as discriminatory barriers to homeownership. Using the 1992 Housing and Community Development Act, the Department of Housing and Urban Development mandated affordable-housing quotas for Fannie Mae and Freddie Mac - requiring them to allocate an ever-increasing share of their support to low- and moderate-income borrowers, starting at 30 percent in 1992 and climbing to 56 percent by 2008.

To achieve these goals, Fannie and Freddie systematically dismantled traditional underwriting guidelines. The conventional mortgage market consisted of 30-year fixed-rate loans requiring 20 percent down payments, fully documented borrower income, and high credit scores. These mortgages were remarkably stable and had very low levels of defaults.

But by the mid-2000s, this underwriting standard had been replaced by loans with less than 10 percent down payments, adjustable interest rates, and lower FICO requirements. As Pinto later argued in a report to the Financial Crisis Inquiry Commission, roughly 27 million US mortgages - half of the entire market in 2008 - were high-risk, non-traditional loans, with government-backed agencies holding or guaranteeing the vast majority of them.

The otherwise laudable goal of increasing access and affordability led to higher housing prices and degraded the quality of mortgage finance, which then made its way onto bank balance sheets. Misregulation didn't stop once the crisis began - the same instinct to override market signals with discretionary judgment, which had already reshaped underwriting standards for a decade, next reshaped the government's response to the panic itself.

Government interventions meant to "fix" the market made things worse. Lehman's failure was certainly a blow to the market, but not as much as some people make it out to be. The S&P finished fractionally higher the Friday after Lehman's failure than it had the Friday before - most of the stock market decline came weeks later in October following further government interventions.

Two previous government actions that made Lehman's bankruptcy more disruptive than it needed to be. In March 2008, government officials brokered a bailout for Bear Stearns. This created a moral hazard in which Lehman executives rejected acquisition bids from interested investors and delayed deleveraging their mortgage portfolios, likely in the expectation that they would receive a deal, too. Federal officials' last-minute attempt to rescue Lehman left the firm unprepared for its complex Chapter 11, resulting in a chaotic bankruptcy that destroyed wealth and froze counterparties worldwide.

Lehman's failure highlights the broader problem in 2008: discretionary and reactionary government actions meant to dampen the GFC unintentionally made it worse. They created uncertainty and panic. Consider how the Troubled Asset Relief Program (TARP) required all major banks to take bailout money even if they didn't need it. Treasury Secretary Paulson didn't want investors and lenders to identify and dump the weakest banks.

Yet this badly misjudged the market. Most lenders and investors had a pretty good sense of which banks were in trouble already. Forcing healthy institutions to take TARP funds signaled that contagion was deeper and more systemic than feared, accelerating capital flight from the banking sector.

Government officials also created perverse incentives by bailing out some firms early while letting others fail. If there is one thing worse for markets than bad news, it is uncertainty. And the Bush administration created deep market paralysis with its inconsistent, and often panicked, interventions in financial markets in 2008. Ordinary Americans paid the price then and are still paying the price today, in the form of greater government distortions of financial markets.

The Federal Reserve still holds nearly $2 trillion of MBS, an asset class it bought, and continued to buy, due to the "emergency" 18 years ago. More problematic, though, is that the GFC shook people's confidence in markets and in a free economy. The drive for broader government assistance programs on both sides of the political aisle has been fomented in part by the calamity of the GFC. Subsequent asset bubbles fueled popular cynicism about cronyism in the financial system.

The institutional memory from 2008 was on display in 2020 and 2021, when both the Federal Reserve and two different administrations turned on spigots of government spending, lending, and economic stimulus - resulting in the elevated inflation we face today. Nearly a quarter of the dollar's value has vanished since 2019.

If there is one thing we should learn from the 2008 GFC, it is that discretionary government interventions tend to generate negative unintended consequences. Even more importantly, we should view calls for more regulation, whether of cryptocurrency, stablecoins, energy production, or data center construction, with a skeptical eye.

Individual rules that may seem to make sense on paper can create perverse incentives, especially when they come stacked on top of other regulations. Unintended regulatory synergies generate herd-like behavior. Precisely the opposite is required for the decentralized experimentation that drives economic resilience.

Tyler Durden Sun, 09/20/2026 - 10:30

WW3 Near-Miss? AI Hallucinated Nuclear Weapons Components Aboard Chinese Vessel Bound For Iran

Could runaway artificial intelligence (AI) spark a future WW3?

We don't need movies like Terminator 2 and its SkyNet to help us imagine this, it's 2026 and there is already a terrifying real-world precedent that could have kicked off a shooting war with nuclear-armed China.

A human analyst within the US intelligence community utilized data gathered by AI for a report that was later widely circulated across classified Pentagon channels, except that the chatbot which was relied upon in effect hallucinated nuclear weapons components being transported aboard a Chinese vessel bound for Iran.

Illustrative: US 7th Fleet file image, Recon Marines conduct exercises

Naturally this set off the highest alerts in Washington in the middle of an active hot war which President Trump launched ostensibly to prevent this very thing - Iran obtaining a nuke and atomic weapons components.

From there military planning kicked into high gear, with a special forces boarding operation imminent. Supposedly elite assets were already airborne, ready to descend on the Chinese ship in question.

But then, "the operation was halted only after officials took a closer look at the intelligence report and discovered that it had been produced with assistance from an AI chatbot," CNN reports in a bombshell Friday exclusive. The episode reportedly happened last spring.

The severe error was realized with barely enough time to call off what could have been the geopolitical blunder and disaster of the century, "The chatbot had incorrectly identified the material the vessel was carrying."

In essence the United States found itself based on completely manufactured 'intel' potentially headed for conflict with China.

As if to to preempt anyone who might be tempted to think the account is merely being hyperbolic or needlessly sensational, one official (unnamed) source told CNN that the intelligence assessment, which was "entirely false" - in the end "almost started a war."

While Pentagon leadership, including US Special Operations Command Pacific, has yet to respond to CNN's queries, the outlet pieces together the alleged chain of events and how this could have possibly happened in the following:

In this particular instance, the analyst queried a chatbot about some intelligence reporting on the ship’s manifest that originated with US Special Operations Command Pacific, based in Hawaii. It was not clear whether the chatbot was a commercially available one or a US government product.

“The internal tools are mostly just copies of the commercial stuff wearing lipstick,” a former senior US official familiar with the AI systems used by military and intelligence analysts.

The bot fused together open-source intelligence with secret signals intelligence in government holdings and reached its fateful conclusion about the material the ship was carrying.

The analyst then used AI again to package the findings into a standard intelligence report — the kind that is trusted by military officials — and disseminated it.

The report seems to be suggesting that the unknown AI tool that was utilized would be deemed substandard and weak for such an important assessment in the first place.

Further "comforting" for readers is that given heavy AI-integration seems the "irreversible" trend of the day across the DoD/Depart of War and IC, similar near-misses in the near and distant future are bound to happen.

CNN underscores, "Across the US military and the intelligence community, officials are pushing to weave AI into nearly every facet of their work, from analyzing the huge volumes of raw intelligence the US collects and selecting targets for strikes, to more mundane applications like managing budgeting, logistics and supply chains."

Meanwhile, another botched AI job perhaps?...

SCOOP: A shipment of F-35 parts, including a canopy, wound up in Hong Kong — sparking an investigation on Capitol Hill and raising the possibility that China could have access to key components of the highly-classified program.

with @marksatter https://t.co/Y0ufsqEcY0

— Audrey Decker (@audrey_decker9) September 18, 2026

So apparently it's not just lazy college undergrads who've become over-reliant on AI as a substitute for deep research and critical thinking, but now we apparently have a generation of US INTELLIGENCE ANALYSTS making potentially world-altering mistakes with the technology.

* * * Tool roll crafted from 5" double-jacketed polyester fire hose

Tyler Durden Sun, 09/20/2026 - 09:25

Watch: British Cops Grill Street-Preacher After Someone Takes 'Offense' At Bible Passages

Authored by Steve Watson via Modernity News,

Britain's latest public-order farce is not a machete fight, a rape gang or a phone-snatch. It is a man on a high street with a Bible.

Footage circulating Friday shows three female officers surrounding a Christian street preacher in a busy shopping precinct.

One of them looks like she should still be sitting exams at school. The other two hover, phones out, expressions tight, as if they have been sent to defuse a bomb.

In the UK they now have children policing the streets. pic.twitter.com/MsvD2QBFzT

— HJB News (@HJB_News__) September 18, 2026

The clip is eight minutes of modern Britain in micro. A member of the public reports being "offended" by words. Officers arrive and the preacher is treated as the problem.

The all inclusive term 'hate speech' is waved around and 'intimidation' is offered as the hook for an investigation. The man citing Scripture is expected to justify himself to people who appear unfamiliar with the very statutes they are leaning on.

The Strong Arm Of The Law ???? pic.twitter.com/ObHEvBtT53

— Ben Dover (@BenDoverh45da) September 18, 2026

This is not law enforcement. It is customer service for the emotionally fragile.

As we hear in the footage, Sections 4A and 5 of the Public Order Act 1986 are the blunt instruments used again and again against street preachers.

Section 5 makes it an offence to use threatening or abusive words or behaviour within the hearing or sight of a person likely to be caused harassment, alarm or distress. "Insulting" was stripped out of Section 5 in 2013. There is a defence if the conduct was reasonable.

Section 4A is the heavier charge. It requires intent to cause harassment, alarm or distress, plus proof that harassment, alarm or distress was actually caused. Police guidance itself describes 4A as aimed at "more serious, planned and malicious incidents."

Yet here are yet more female police officers spewing those statutes at the guy as if they're citing parking restrictions.

Being offended by the Bible is not grounds for a public order offense. Reciting the Gospel in a public street is not automatically "threatening." Calling the encounter "intimidation" because a passer-by disliked the message does not conjure the mental element the statute demands. Courts have said as much, repeatedly, after officers have already cuffed, swabbed and bailed the preacher.

That distinction is lost on too many in uniform. In the new footage the officers look lost in it. One of them is literally a frightened child. The other two look scared of the conversation they started. The preacher is the only person on camera who appears to have read the law.

We've seen this all too often in Britain recently.

In another similar incident, a volunteer Met officer ordered 20-year-old gospel singer Harmonie London to stop performing "church songs" on Oxford Street, claiming she was "not allowed to sing church songs outside of church grounds."

The Met later apologised and admitted the officer "was mistaken," adding: "We're sorry for the offence caused and will take the learning forward."

There are many many more cases.

Pastor Dia Moodley was arrested in Bristol in November 2025 on suspicion of a religiously aggravated Section 4A offence and "inciting religious hatred" after preaching on Islam and transgender ideology.

He was held for eight hours and banned from the city centre over Christmas before the case collapsed.

"Avon and Somerset Police have arrested me twice because my lawful speech was seen as offensive to some Muslims and people with a progressive worldview," he said.

When a Muslim bystander later told him on camera, "If you do that again bro, we'll send the boys round," police filed it as "unpleasant" comments that "do not constitute an offence."

John Steele was arrested in Rotherham after a 30-second conversation about Quran 4:34 at a domestic-abuse stall. Charges were dropped as "not needed in the public interest."

Pastor Steve Maile was handcuffed in Watford and held for 12 hours; Hertfordshire Police confirmed a Section 5 public order investigation.

Shaun O'Sullivan has been arrested 16 times, including for saying "God bless you." A jury acquitted him after a six-day trial that cost an estimated £20,000.

Many such cases.

British Metropolitan Police Officer threatens to arrest Christian Preacher for speaking about God in the street.

"You might be committing offences. If you are making members of the public [feel] harassment, alarm and distress it's a criminal offence."

pic.twitter.com/FYhGoRCHK3

— Oli London (@OliLondonTV) May 21, 2024

British police officer tells Christian street preacher that it's "wrong" she is preaching about God outside Kings Cross station in London.

"These people just want to do their journey. They're not coming here to listen to you. I just think it's all wrong." pic.twitter.com/xrN68ZDYXp

— Oli London (@OliLondonTV) June 21, 2025

? CHRISTIAN STREET PREACHER ARRESTED IN LONDON - DAYS AFTER TRAFALGAR SQUARE MASS ISLAMIC PRAYER ?

A Christian preacher was arrested near London Stratford station while preaching the gospel.

Police reasons (per on-scene accounts & video):

1. Needed a licence/permit for the... pic.twitter.com/QpcPUDyPtg

— Skint Eastwood (@Skint_Eastwood1) March 19, 2026

Police attempt to detain Christian preacher at London Pride. Part 1 pic.twitter.com/9pWYgNcCjd

— SteveSpCorner (@SteveRightNLeft) July 4, 2026

Street preacher in London getting arrested for preaching the gospel of Jesus Christ.

The police and all bystanders heard the gospel, and that is the main thing.

They let the preachers of sin and evil continue. The preachers of good and Jesus they stop,

Life is spiritual. pic.twitter.com/0yAcydH8Yp

— Rikki Doolan (@realrikkidoolan) July 22, 2025

??? British Christian Preacher gets shut down in Manchester Shopping Centre by the Police because some of the 'locals' can't stand Christianity.

Are you happy with this Britain? Really think if you're ok with the Police treating a British Christian who has probably preached... pic.twitter.com/6rJ8jxS5Y2

— Concerned Citizen (@BGatesIsaPyscho) November 30, 2024

Street Preacher in London confronted by Police for preaching the word of God.

WATCH UNTIL END. Hallelujah! ???? Revival Times. pic.twitter.com/gV9AkYWtx8

— Rikki Doolan (@realrikkidoolan) June 10, 2025

Guy on the Left is a UK Christian Street Preacher about to be arrested on a quiet English Street.

The Guy on the right has his own private Police Escort whilst he sings Islamic Prayer on London Bridge right in the heart of the Nations Capital.

Do you see the problem yet? pic.twitter.com/thq1JlOW7A

— Concerned Citizen (@BGatesIsaPyscho) November 19, 2025

A Christian preacher this afternoon was arrested at Southgate station London N14 for preaching about Jesus . @CConcern the police told him it's because public had said he was being islamophobic . We have the full video and wondered when preaching was now illegal ? @Campaign4T pic.twitter.com/ZxC1DhlZCf

— Eye On Antisemitism (@AntisemitismEye) February 23, 2019

UK: ?? A "Christian country" in name only.

A Christian street preacher threatened with arrest by police because he speaks peacefully through a sound system!! Christians are repeatedly arrested for using speakers to share the Gospel peacefully (Bristol 2024, Glastonbury 2024,... pic.twitter.com/ywnslHt4WZ

— ExWren (@VoWalesWren) December 5, 2025

? BREAKING: PREACHING THE GOSPEL NOW A CRIME IN MODERN LONDON? ?

Shocking scenes as a Christian preacher is CIRCLED by multiple Met Police officers - and THREATENED WITH ARREST - for simply sharing the Word of God on the streets of London.

YES... THIS IS LONDON 2025.

?... pic.twitter.com/0p60A3rl0p

— Jim Ferguson (@JimFergusonUK) April 15, 2025

? "Preacher Of The Gospel" Arrested In Sadiq Khan's London:

Gray-haired Christian preacher dragged away in handcuffs for preaching the Gospel.

Police swarm him and handcuff him as he tells them: "No offence has been committed here - this is an utter disgrace." pic.twitter.com/fwzxl5b9Jx

— Skint Eastwood (@Skint_Eastwood1) April 20, 2026

Met Police stand watching a Christian preacher in "Modern London", waiting for him to say something from the Bible that may "offend" Muslims to confront him with.

Sadiq Khan sets the strategy of Met Police.

Coincidence? pic.twitter.com/jyT7dL2x3I

— Tommy Robinson ?? (@TRobinsonNewEra) August 1, 2026

This is not a handful of confused constables. It is policy.

And who exactly is calling the police to report being 'intimidated'?

In February, a lone female Met officer in Whitechapel, was surrounded by angry men insisting "This is a Muslim area," after a Christian preacher dared to recite the gospel.

In a refreshing change, the officer told the men "In this country, we have freedom of speech."

She added: "I understand that you guys don't want to hear it, so I would just recommend that you walk away and don't listen to him. He's not in your home." That officer understood the job. Too many of her colleagues do not.

This is part of a wider crackdown on speech in general.

At least 62,199 people were arrested for communications offences between 2021 and 2025 - roughly 34 a day. Only about one in five of those cases ends in a conviction.

Big Brother Watch's Silkie Carlo called it "an Orwellian mess" and said people have been arrested "for holding blank pieces of paper."

Lord Toby Young asked why authorities police tweets while shoplifting, phone theft and sexual offences rise.

Shadow home secretary Chris Philp put it simply: "Police shouldn't be wasting time on the internet. They should be catching real criminals."

After the 2024 Southport riots, police stood up a National Internet Intelligence Investigations team to flag "protest-related" posts to local forces. More than 100 referrals followed. Nigel Farage called it "the beginning of the state controlling free speech."

On the street the same instinct now wears a high-vis jacket. Offence becomes "intimidation." A Bible becomes a public-order risk. Officers who cannot explain Section 4A still feel entitled to demand names and deliver a public grilling.

Anyone who still assumes the person in the uniform knows the statute should watch another clip making the rounds: security guards outside a migrant hotel fail to display SIA licences - a criminal offence under the Private Security Industry Act - and the attending officer's response, after being walked through the law, is: "He's breaking the law. What am I supposed to do?"

This is the depressing reality of the situation. Quote the Act at them and they freeze. Point to an actual offence by the state's preferred clients and they shrug. Send three young women to lecture a preacher because someone felt intimidated by Scripture, and they treat the complaint as gospel.

Keir Starmer told JD Vance last year: "We've had free speech for a very very long time in the United Kingdom and it will last for a very very long time." The high street footage says otherwise. So do the 62,000 speech arrests. So does the officer who looks like a child, standing between a Bible and a country that no longer trusts its own laws.

Freedom of speech that dies the moment someone claims offence is not freedom.

Tyler Durden Sun, 09/20/2026 - 09:20