Zero Rss

Getting An 'A' At Harvard Will Be Tougher Starting In 2027

Authored by Micaiah Bilger via The College Fix,

Two thirds of faculty vote to approve cap on A grades for undergrads...

Harvard University faculty gave an emphatic “yes” to capping A grades in a vote Wednesday amid concerns about grade inflation and academic rigor at the prestigious institution.

Approximately 70 percent voted to approve the 20-percent cap on As in undergraduate courses, The Crimson, Harvard’s student newspaper, reports. Nearly 700 professors participated in the vote. The measure will go into effect in the fall of 2027.

Harvard psychology Professor Steven Pinker praised the decision in an X post Wednesday, calling it “a big step in combatting the grade inflation that has been dumbing down our courses, conveying the wrong message to students, and making universities a national laughingstock.”

Another professor, political scientist Max Abrams at Northeastern University noted the impact of the decision on other higher education institutions. 

Harvard isn’t just some university. Many universities look to Harvard to inform their own decisions. I am strongly in favor of Harvard’s moves to reduce grade inflation. When everyone gets an A there is no signal. pic.twitter.com/Tpb4enuADA

— Max Abrahms (@MaxAbrahms) May 20, 2026

Other scholars called for their Ivy League institutions to follow Harvard’s lead.

Along with limiting As, the faculty also approved a measure by a large majority “to use average percentile rankings, rather than GPA, to determine internal awards and honors,” according to The Crimson.

A third measure within the proposal did not pass. It would have allowed professors “to petition to opt out of the A cap” if the grading for their course is on an “unsatisfactory, satisfactory, and satisfactory-plus basis,” the report states:

When the proposal was first introduced in February, its architects pitched the A cap and percentile-ranking system as paired reforms: the ranking system would prevent students from avoiding larger or more difficult courses in search of better grades under the cap.

After pushback, the subcommittee separated the measures into distinct votes, delayed implementation by a year to fall 2027, and added a “satisfactory-plus” designation for courses that chose to opt out of the system.

In the weeks before the vote, some faculty also pushed for a more complicated alternative to the“20 percent plus four” formula that would have tightened limits in smaller courses. But that amendment failed to make it onto the final ballot after faculty favored the original formula in a preliminary poll.

All three proposals came from a Harvard faculty committee in response to a report that found 60 percent of all undergraduate grades are now As – a 35 percent increase compared to 20 years ago.

In a statement after the vote Wednesday, the committee said the change will help restore integrity to the institution.

“This matters for our students above all,” they stated. “A Harvard A grade will now tell them, as well as employers and graduate schools, something real about what a student has achieved. An A will once again be what Harvard’s guidelines have long said it is: a mark of extraordinary distinction.”

Despite widespread concerns about grade inflation, Harvard students overwhelmingly opposed the cap, American Council of Trustees and Alumni fellow Steve McGuire pointed out on X. 

Now get rid of student course evaluations. pic.twitter.com/2xql1bW49U

— Steve McGuire (@sfmcguire79) May 20, 2026

One petition launched by a freshman claimed that the grading reforms would be “racially harmful,” The College Fix reported in April.

Concerns about grade inflation have arisen at other institutions as well, including Yale and Columbia universities and Swarthmore College in Pennsylvania. Additionally, some professors say they are under pressure not to fail students.

Tyler Durden Thu, 05/21/2026 - 13:40

The News-to-Death Ratio Strikes Again

Authored by Carl Henegan and Tom Jefferson via The Brownstone Institute,

There is a peculiar arithmetic that governs modern health reporting, one that has very little to do with actual risk. Hans Rosling captured it neatly during the 2009 swine flu episode, when he calculated a “news-to-death ratio” of 8,176-to-1. In other words, for every death attributed to swine flu, there were over eight thousand news stories. Tuberculosis, by contrast, received less than 0.1 news stories per death over the same period.

If that sounds absurd, it is, and yet very little has changed.

Take the current hantavirus scare. A cruise ship, the MV Hondius, sits off Cape Verde. There are 7 cases in total (2 confirmed, 5 suspected) and 3 deaths, including a Dutch couple and a German national. Passengers have been confined to their cabins while evacuations and disinfection efforts are organised. It is, undeniably, a dramatic story: a floating Petri dish, a whiff of quarantine, and a hint of the exotic.

In the past week alone, there have been at least 10 to 15 unique news stories, generating hundreds of articles. For a disease that, in normal times, struggles to attract even a single weekly mention, this represents a surge bordering on the hysterical.

And yet it is worth stepping back for a moment and asking, what are we actually looking at?

Hantavirus is a rare disease. In the United States, which diligently tracks such cases, there have been 890 laboratory-confirmed instances since 1993. In the UK, the situation is even less clear: from 2012 to early 2025, only 11 domestically acquired symptomatic cases have been recorded. Surprisingly, nine of these cases were not linked to cruise ships or exotic travel, but rather to a more mundane source—exposure to “pet fancy rats” or rodents bred as reptile feed.

This is not a pathogen ready to spread through the Home Counties. However, the rarity is not the issue; visibility is.

Diseases that afflict the poor, quietly and persistently, rarely command attention. Tuberculosis killed 1.23 million people globally in 2024. Over a million deaths every year, largely concentrated in less affluent parts of the world. It is one of the most lethal infectious diseases known to medicine, and yet it barely registers in the Western news cycle.

Why? Because TB is familiar, it is slow; It lacks narrative flair, and it does not trap well-heeled passengers in their cabins while helicopters circle overhead.

If you want coverage, you need something else entirely. You need novelty, uncertainty, and above all, proximity to affluence. A cruise ship outbreak ticks every box: a disease with a balcony suite.

This is the uncomfortable truth behind Rosling’s ratio: the media does not report risk, it reports drama. And drama requires context that audiences can imagine themselves in.

A rodent-borne virus in some remote rural setting barely registers. Put that very same virus aboard a cruise ship with buffet queues, balcony cabins, and a passenger list that looks uncomfortably like the readership, and suddenly it becomes headline news.

The result is a profound distortion of public perception. We are invited to worry about the improbable while ignoring the inevitable and reality. A handful of hantavirus cases generates dozens of headlines; a million tuberculosis deaths pass with barely a murmur.

If we were to apply Rosling’s lens to the present moment, the imbalance would be obvious. Three deaths linked to a suspected hantavirus cluster have produced hundreds of reports in a matter of days. Meanwhile, tuberculosis continues its relentless toll with scarcely a fraction of that attention.

The modern “news-to-death ratio” may not be precisely 8,176-to-1, but the underlying pattern remains intact.

The lesson here isn’t truly about hantavirus; instead, it’s about how we collectively determine what is significant.

Diseases associated with poverty—those that are endemic, predictable, and devastating—often fail to attract media attention because they don’t instill fear in the right audience or in the right way. No one is interested in the thousands of cholera deaths that are too remote, too ordinary, and lack the dramatic impact that draws interest. What commands attention are diseases that puncture our sense of safety, the kind that can slip past the gangway and make themselves at home on a cruise ship.

This post was written by two old geezers who live in a world where risk is misread, priorities are skewed, and the arithmetic of attention bears little resemblance to the arithmetic of death.

Republished from the authors’ Substack

Tyler Durden Thu, 05/21/2026 - 13:00

Jane Street Accused Of Using Terra Telegram Backchannel Before UST Crash

Authored by Zoltan Vardai via CoinTelegraph.com,

A newly unsealed court filing in the Terraform Labs bankruptcy case alleges Jane Street used a private Telegram channel with former Terraform intern Bryce Pratt to obtain nonpublic information before the collapse of TerraUSD. Pratt is currently a systems developer at Jane Street. 

The channel, called “Bryce’s Secret,” allegedly gave the quantitative trading firm a backchannel to Terraform insiders as Jane Street unwound exposure to TerraUSD (UST) shortly before the algorithmic stablecoin lost its dollar peg in May 2022, according to the filing. “Jane Street used Bryce’s Secret chat group and other backchannel sources of non-public information to front-run trading that hastened the collapse of Terraform,” the filing states.

The claims renew scrutiny of who profited from Terra’s $40 billion collapse, one of the crypto industry’s largest failures, and could test how traditional insider trading and market manipulation theories apply to decentralized finance markets.

On Feb. 23, Todd Snyder, Terraform’s court-appointed administrator, sued Jane Street, its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang in Manhattan federal court, accusing them of “misappropriating confidential information and manipulating market prices.” 

Two months later, Jane Street filed a motion to dismiss the lawsuit, arguing that Terraform attempted to “extract cash from Jane Street to foot the bill for a fraud that Terraform itself perpetrated on the market,” Cointelegraph reported on April 23.

A spokesperson for Jane Street told Cointelegraph that the lawsuit was a transparent attempt to “extract money when it is well-established that the losses suffered by Terra and Luna holders were the result of a multi-billion dollar fraud perpetrated by the management of Terraform Labs.”

Terraform Labs court filing in the lawsuit against Jane Street. Source: cloudfront.net

Curve trade raises new UST concerns

The timing of a particular UST trade has raised more concerns, suggesting potential access to insider information by an unknown entity.

On May 7, 2022, Terraform quietly withdrew about $150 million in UST from the Curve 3pool liquidity pool.

Less than 10 minutes after Terraform’s withdrawal, Curve 3pool saw its largest single swap of $85 million, precipitating a steep sell-off in UST, which the filing said “ultimately led to the collapse of the Terra ecosystem.”

The heavily redacted filing does not identify the entity behind the swap.

Terraform Labs court filing in the lawsuit against Jane Street. Source: cloudfront.net

Snyder seeks to recover alleged wrongful gains from Jane Street, plus compensation for additional damages to distribute to Terraform creditors and investors who lost funds in the 2022 collapse.

Jane Street is the world’s leading quantitative trading firm by net trading revenue, with $39.6 billion generated in 2025, reported Reuters.

Cointelegraph reached out to Terraform’s court-appointed administrator for comment but had not received a response by publication.

Tyler Durden Thu, 05/21/2026 - 12:20

"Drills Are Intended To Send A Signal": Russia Holds Massive Nuclear Drills On Land, Sea And Air Alongside Belarus

Trucks carrying intercontinental ballistic missiles rumbled over forest roads, atomic-powered submarines set sail from Arctic and Pacific ports, and crews scrambled into warplanes as Russia and neighboring Belarus held the final stage of their joint nuclear drills Thursday.

Russian President Vladimir Putin discussed the maneuvers in a video call with his Belarusian counterpart Alexander Lukashenko. “The use of nuclear weapons is an extreme, exceptional measure for ensuring the national security of our states,” Putin said, according to AP.

Lukashenko earlier inspected Russian short-range nuclear-capable Iskander ballistic missiles at a military unit involved in the drills and declared: “I dreamed about this machine a long time ago.”

The three-day drills that began Tuesday come amid a surge in Ukrainian drone strikes. including on Moscow’s suburbs that killed three people and damaged several buildings and industrial facilities. The strikes made it harder for officials in the Kremlin to cast the conflict in Ukraine — now in its fifth year — as something so distant that it doesn’t affect the daily routines of Russian civilians.

Drills involve wide array of nuclear weapons

Russia’s Defense Ministry said the exercise involved 64,000 troops, over 200 missile launchers, more than 140 aircraft, 73 surface warships and 13 submarines, including eight armed with nuclear-tipped ICBMs. The drills focused on the “preparation and use of nuclear forces under the threat of aggression,” it said.

The maneuvers also practice cooperation with Belarus, an ally that hosts Russian nuclear weapons. Russian arsenals in Belarus include its latest intermediate range nuclear-capable Oreshnik missile system.

A Yars ICBM is seen during drills of Russia's nuclear forces in Belarus (Russian defense ministry).

Along with nuclear-tipped ground- and submarine-launched ICBMs, the maneuvers featured a broad assortment of short- and medium-range weapons.

Unlike the intercontinental missiles that can destroy entire cities, tactical nuclear weapons intended for use against troops on the battlefield are less powerful. They include aerial bombs and warheads for short- and medium-range missiles and artillery munitions.

The Defense Ministry said the Russian armed forces test-fired Yars and Sineva ICBMs, as well as medium-range sea-launched Zircon and air-launched Kinzhal missiles, noting that all missiles hit their designated practice targets. Belarusian troops test-fired a short-range Iskander ballistic missile inside Russia.

Putin has repeatedly reminded the world about Moscow’s nuclear arsenals since the war in Ukraine started in February 2022 to deter the West from ramping up support for Kyiv.

In 2024, the Kremlin adopted a revised nuclear doctrine, noting that any nation’s conventional attack on Russia that is supported by a nuclear power will be considered a joint attack on his country. That threat was clearly aimed at discouraging the West from allowing Ukraine to strike Russia with longer-range weapons and appears to significantly lower the threshold for the possible use of Moscow’s nuclear arsenal.

Russia's new Sarmat ICBM is being test launched at an unspecified location in Russia (Russian defense ministry).

The revised doctrine also placed Belarus under the Russian nuclear umbrella. Putin has said that Moscow will retain control of its nuclear weapons deployed in Belarus, which borders Ukraine and NATO members Latvia, Lithuania and Poland, but would allow its ally to select the targets in case of conflict.

Drills come as Ukrainian drones spotted in the Baltics

The maneuvers are held amid an increase in drone activity in the Baltic nations. On Tuesday, a NATO jet shot down a Ukrainian drone over southern Estonia. Ukraine apologized for that “unintended incident,” without specifying what had happened.

On Wednesday, an emergency announcement about a drone flying over Belarus prompted residents of the Lithuanian capital of Vilnius, including top officials and lawmakers, to take shelter and led to a brief closure of its airport.

Ukrainian drones targeting Russia’s Baltic ports and energy facilities have recently crossed or come down in NATO territory on several occasions. Amusingly, instead of blaming the source, Ukraine, Western officials blamed Russian electronic jamming of the drones.

Russia’s Foreign Intelligence Service said Tuesday that Ukraine is preparing drone attacks against Russia from the territory of the Baltic countries and warned of retaliation It alleged Ukrainian military personnel had been deployed to Latvia and warned that the country’s membership in NATO wouldn’t protect it from “just retribution.” Latvian authorities said the allegation was not true.

Last month, the Russian Defense Ministry published a list of factories in Europe that it said were involved in producing drones and their components for Ukraine. It warned that attacks on Russia involving drones manufactured in Europe are fraught with “unpredictable consequences.”

Some commentators interpreted the bellicose statements from Moscow and this week’s exercise featuring short- and medium-range nuclear weapons capable of reaching targets in Europe as part of Kremlin efforts to discourage Western allies from bolstering support for Ukraine.

Asked what message the nuclear exercise was intended to send, Kremlin spokesman Dmitry Peskov responded that “any drills are intended to send a signal,” but wouldn’t elaborate.

Tyler Durden Thu, 05/21/2026 - 12:00

US Targets Hamas Support Networks

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is sanctioning four individuals associated with a pro-Hamas flotilla that is trying to access Gaza in support of the terrorist group, the department said in a May 19 statement.

Hamas terrorists secure an area before handing over an Israeli American hostage to a Red Cross team in Gaza City on Feb. 1, 2025. Photo by SAEED JARAS/Middle East Images/AFP via Getty Images

The flotilla is organized by the Popular Conference for Palestinians Abroad (PCPA), which has been classified as a specially designated global terrorist by the United States.

"The PCPA was established with funding from Hamas's International Relations Bureau and Hamas directs its activity through the placement of Hamas officials throughout the organization, including its executive body, the General Secretariat," the Treasury said.

"So-called humanitarian flotillas that are organized by or supporting designated parties represent a significant compliance risk for financial institutions. Sanctioned terrorist groups continue to maintain significant influence over maritime flotillas to Gaza."

The four individuals sanctioned by the Treasury include a Spanish member of the PCPA's General Secretariat, who is a central figure of the flotilla; the acting secretary general and president of the PCPA, who is from Jordan; a Belgium-based European coordinator for the Samidoun organization; and a Samidoun coordinator from Spain.

Samidoun is a front organization for the Popular Front for the Liberation of Palestine, which the State Department has designated as a foreign terrorist organization. Both the PCPA and Samidoun act on behalf of sanctioned Palestinian terrorist organizations, the Treasury said.

In addition, OFAC sanctioned several members of Muslim Brotherhood networks who are aligned with Hamas.

All property and interests in property of the sanctioned individuals that are in the United States or in control of U.S. persons are effectively blocked and must be reported to OFAC. The sanctions prohibit U.S. persons from engaging in any transactions involving the property or interests in property of those who are sanctioned.

"The pro-terror flotilla attempting to reach Gaza is a ludicrous attempt to undermine President Trump's successful progress toward lasting peace in the region," Secretary of the Treasury Scott Bessent said. "Treasury will continue to sever Hamas' global financial support networks, no matter where in the world they are."

State Department spokesperson Thomas Pigott said in a May 19 statement that OFAC has targeted three enablers - the flotilla organizers, Muslim Brotherhood members, and Samidoun members - who he said are used by Hamas to sustain its position in Gaza, engage in terrorist violence, and finance its operations.

OFAC's action exposes how Hamas exploits purported civil society organizations, diaspora groups, and religious institutions "to advance its malign agenda while claiming humanitarian objectives," according to the spokesperson.

"Under President Trump, the United States remains committed to supporting efforts to achieve lasting peace in the Middle East," he added. "We will continue to use all available tools to counter those who support terrorism and obstruct the path to a peaceful resolution of the conflict."

Hamas-UN Ties

Meanwhile, U.S. lawmakers are aiming to eliminate a U.N. agency accused of employing Hamas terrorists, according to a May 19 statement from the office of Sen. Tom Cotton (R-Ark.). The agency being targeted is the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

In February 2025, President Donald Trump signed an executive order banning funding for UNRWA. According to the order, the agency has reportedly been infiltrated by members of foreign terrorist organizations, with employees from the organization being directly involved in the Oct. 7, 2023, Hamas attack on Israel.

UNRWA has dismissed these allegations. In a September 2025 fact sheet, the agency said that claims of some members of its staff in Gaza having links with Hamas or the Palestinian Islamic Jihad are false and that it has "not received any information, let alone any evidence, from the Israeli Authorities or any other Member State" about such accusations.

In a May 18 letter to Trump, Cotton and 24 colleagues asked that the administration take "decisive action to fully dismantle UNRWA and eliminate it from the UN budget."

"Any aid organization in Gaza or otherwise must be demonstrably free of ties to terrorism and committed to transparency, accountability, and peace," they said in the letter. "We must ensure this failed system doesn't continue reinforcing the conditions that have fueled terrorism for generations. The time to act is now."

Tyler Durden Thu, 05/21/2026 - 11:40

Turkey Liquidated Almost All Of Its US Treasuries In March To Defend Crashing Lira

Two months ago, at the end of March, we reported that Turkey was aggressively dumping its gold reserves in a panic scramble to obtain dollar funding, which Erdogan's regime was using to keep the Turkish lira from crashing, and to also pay for energy imports which had suddenly soared in price as a result of the Iran war.

The violent selling by Turkey (and other emerging markets) was behind the brutal plunge in gold prices, which tumbled by more than $1000 from near all-time highs at the start of the war to the low 4000s by the time Turkey had done selling much of its gold. 

Then earlier this week, we got another confirmation of Turkey's wild liquidation spree when the latest central bank data showed that Turkey’s foreign reserves had their biggest monthly decline on record in March, as the Iran war triggered global selloffs in emerging market assets and strained the lira.

According to balance-of-payments data, Turkey's official reserves cratered by $43.4 billion in March. Part of the decline reflected state intervention to offset portfolio outflows. The current-account deficit, meanwhile, widened to $9.7 billion in March from $7.3 billion in February as a result of soaring commodity prices.

A major energy importer, Turkey has been hit hard by higher oil and gas prices caused by the effective closing of the Strait of Hormuz and the resulting disruptions to world supplies of crude and refined products. Meanwhile, global banks have started changing their formerly favorable outlook on the lira, citing the exploding current-account deficit. Should inflation pressures persist, Turkey will have no choice but to pursue another accelerated devaluation of the Turkish lira. 

“As international institutions continue to raise their average oil price forecasts for 2026, disruptions in supply chains and ongoing regional tensions — and their potential negative impact on transportation and tourism revenues — keep upward risks alive in year-end projections” for Turkey, said Istanbul-based economist Haluk Burumcekci.

Turkish central bank Governor Fatih Karahan said last week that the ratio between the current-account deficit and gross domestic product would be “below historical averages” this year while acknowledging the upside risks.

Yet as we said in March, while selling gold is a step of clear desperation for Turkey which had put in much efforts in recent years to build up a substantial gold stock, it is understandable for a regime that suddenly finds itself in a dollar funding crisis, the bigger question is did Turkey do the same with its holdings of Treasuries which are far more liquid and thus far less likely to move the market even when facing a sizable liquidation. 

The answer, we learned today, is a resounding yes.

According to Bloomberg calculations based on US Treasury data, Turkey sold almost all of its US Treasuries in March as it stepped up efforts to support its currency during the first month of the Iran war. The amount of Treasuries held by Turkey crashed to just $1.8 billion by the end of March, down from $16 billion the previous month, the data showed. The figure includes securities held by the central bank and other Turkish entities, including corporates.

The decline coincided with a selloff in Turkish markets after the Middle East conflict erupted, sending oil prices sharply higher. The central bank moved immediately to prevent a crash in the lira by tightening funding conditions and selling off foreign exchange and gold assets. Its interventions also included swapping gold from reserves, although now that it has also dumped the bulk of its last ditch dollar reserves, those swaps will almost certainly end up forcing Turkey to hand over whatever gold was pledged. 

Turkey’s Treasury holdings were as high as $21 billion in February 2025 after the country spent a year rebuilding reserves. They had peaked about a decade ago at $80 billion, before steadily declining as relations with the US soured over a range of political and geopolitical disputes, and as Turkey consistently sold reserves to maintain a smooth devaluation of the lira. 

Despite the interventions, the lira has remained under pressure as the war drags on. Last week, the central bank raised its year-end inflation target to 24% from 16%, after data showed annual inflation accelerated to 32.4%. Turkish bonds have also suffered steep losses, with 10-year yields hitting record highs of 35.75%.

And now that Turkey has no more gold or Treasurys with which to defend the currency, expect a sharp and painful death in the currency which has gone from less than 10 against the dollar five years ago to a record 45.6 today..

Tyler Durden Thu, 05/21/2026 - 11:20

Is The Bond Market About To Break Washington

Submitted by QTR's Fringe Finance

The bond market is beginning to force reality onto Washington, and it may ultimately force an end to the Iran war long before politicians or diplomats are willing to admit it.

For months, investors have focused on missiles, retaliation headlines, oil chokepoints, and the possibility of a broader regional escalation from the Iran War. During the geopolitical noise, I urged readers not to overlook stress in financial markets that was happening before the war even started, namely in places like private credit and subprime auto lending. I called these “real crises” hiding behind record highs while “investors” chase gamma squeezes higher in an ongoing distortion feedback loop that is making things look far better than they are under the surface.

And now, beneath all the geopolitical noise, a much more serious, harder to ignore crisis is unfolding. As Cypher says in The Matrix:

"Fasten your seat belt Dorothy, 'cause Kansas is going bye-bye."

This crisis is in the Treasury market. Bond yields are moving sharply higher, and they are sending a message that policymakers can no longer afford to ignore: the financial system is becoming unstable under the weight of war spending, massive deficits, persistent inflation, and a debt load that was already unsustainable before this conflict began.

The bond market does not give a flying fuck about political narratives, gamma squeezes, meme stocks, retail investors or any other ticky tacky end-around style loopholes that continue to push stocks higher. It cares about math, fiscal policy and monetary policy. And the math is getting ugly very quickly.

The 10-year Treasury yield is arguably the single most important price in global finance because virtually every major asset class is built on top of it. Mortgage rates, commercial real estate valuations, private equity models, corporate borrowing costs, equity multiples, venture capital, and government financing itself all depend on stable Treasury markets. When yields rise too quickly, everything starts repricing at once. That is why this matters so much more than the daily moves in the stock market.

Washington understands this, even if it refuses to say it publicly.

The United States can survive political embarrassment overseas, but it simply cannot survive a disorderly Treasury market.

That is why I believe the bond market is eventually going to force a few things. First, a de-escalation of the Iran conflict. The priority now is no longer “victory” or even geopolitical strategy. The priority is restoring stability before bond yields spiral completely out of control. A prolonged war that keeps oil prices elevated while deficits explode higher is simply incompatible with a heavily indebted financial system already struggling under the burden of high interest rates.

The problem is that America entered this conflict from an extraordinarily weak fiscal position to begin with. This is not World War II, when the country had a young population, industrial dominance, low debt levels, and decades of economic expansion ahead of it. Today the US government is already running deficits approaching $2 trillion annually during what is supposedly a normal economic environment. Interest expense on the national debt has already become one of the largest items in the federal budget. Now add war spending, weakening foreign demand for Treasuries, rising commodity prices, and higher refinancing costs, and the entire situation starts looking dangerously unstable.

This is where the inflation problem becomes unavoidable.

War has always been inflationary, but not just because of oil shocks or supply chain disruptions. The deeper issue is debt creation itself. Wars are financed through borrowing, and borrowing at these levels increasingly requires central bank intervention one way or another. The process is actually very simple: war creates debt, debt pressures the financial system, and eventually the system responds through some combination of money creation, currency debasement, and financial repression.

That is exactly what the bond market is beginning to anticipate right now.

Ironically, as I’ve predicted the past week, before the Federal Reserve eventually steps in to suppress yields, we may actually see another round of rate hikes first. If oil prices remain elevated and inflation expectations continue rising alongside Treasury yields, the Fed may feel forced to tighten policy again simply to preserve credibility and prevent inflation psychology from becoming entrenched. If that doesn’t work, I’ve predicted that the Fed will simply start bullshitting its inflation numbers.

In other words, the system may briefly attempt to defend the dollar before ultimately surrendering to debt realities. That creates the possibility of a brutal stagflationary environment where growth slows, markets weaken, borrowing costs rise, and inflation remains stubbornly elevated at the same time.

And that…is a nightmare scenario for risk assets and a near-impossible job for incoming Fed chair Kevin Warsh.

For years, markets became addicted to near-zero rates and endless liquidity. Entire sectors of the economy were built on the assumption that capital would remain permanently cheap. But when Treasury yields rise meaningfully, everything changes. Leveraged speculation becomes harder to sustain. Corporate refinancing becomes more expensive. Housing affordability deteriorates further. Commercial real estate faces additional stress. Equity valuations compress. The “everything bubble” suddenly starts losing oxygen and all the shit I’ve written about that I think will blow up — including all 10 area of the market I highlighted here — will implode.

And once again, the people who get hurt the most will not be the financial elite, it will be ordinary Americans. You heard it from the former bartender turned Substack shit-talker first…read this slowly:

Mom and pop savers are about to get squeezed from every direction at once. Their wages will fail to keep up with inflation. Their borrowing costs will rise. Their credit card rates will stay elevated. Their insurance, food, energy, and housing costs will continue climbing. Their retirement portfolios will become more volatile. And eventually, after enduring all of that pain, they will likely watch policymakers step in to rescue the bond market and financial system through another round of monetary intervention that further destroys the purchasing power of their savings.

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Every cycle ends the same way. Wall Street and the financial system are treated as too important to fail, while ordinary citizens absorb the consequences through inflation and currency debasement. Policymakers will present future interventions as necessary for “financial stability,” but stability for whom? Stability for leveraged institutions, overextended governments, and asset markets dependent on artificially suppressed rates.

Meanwhile, the average family gets punished twice. First through inflation, then through the policies used to contain the damage caused by inflation.

And make no mistake, if yields continue climbing, the Fed and Treasury will eventually intervene in some form. Maybe they will not officially call it yield curve control at first. Maybe it arrives through stealth quantitative easing, emergency liquidity facilities, Treasury buyback programs, bank regulatory changes, or coordinated purchases through the financial system. But the end result will be the same: suppress long-term yields because the debt burden has become too large for markets to absorb naturally.

At current debt levels, genuinely free market interest rates are politically and financially impossible. The bond market is beginning to expose that reality.

That is also why I am becoming bullish again on gold, silver, and mining stocks after stepping away from them earlier this year following their enormous run in 2025. If the Fed ultimately chooses to suppress yields while inflation remains structurally elevated, precious metals become one of the clearest beneficiaries. Gold and silver perform best when confidence in fiat systems deteriorates and when governments prioritize debt sustainability over currency stability. I’ve long said I think they will have a sharp fall lower on the initial deleveraging, then probably double off their near term bottom in short order once the Fed’s liquidity starts hitting the market.

And that is exactly the direction this appears to be heading.

The Iran war may end sooner than many expect, not because global leaders suddenly become responsible, but because the bond market is forcing them into a corner. Financial instability is becoming the greater threat. Policymakers now face an impossible balancing act between inflation, debt servicing costs, economic slowdown, and geopolitical conflict.

Something will have to give. Historically, when governments reach this stage, they choose to protect the debt market and sacrifice the currency.

There is little reason to believe this time will be any different.

--

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions. All positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier.

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Tyler Durden Thu, 05/21/2026 - 11:05

Trump EPA Targets Biden-Era Refrigerant Rules In Affordability Push

Watch Live 

President Trump Participates in an Announcement with the Administrator of the EPA https://t.co/lZJTv7m8HJ

— The White House (@WhiteHouse) May 21, 2026

* * * 

The Trump administration plans to delay compliance with Biden-era EPA regulations targeting hydrofluorocarbons later today. These regulations apply to refrigerants used in air conditioners, refrigerators, supermarket cooling systems, refrigerated trucks, cold storage, and some industrial applications.

Bloomberg reports that the EPA's 2023 Technology Transitions Rule, enacted under the American Innovation and Manufacturing Act, will be rolled back, with an estimated cost savings of more than $2.4 billion.

EPA Administrator Lee Zeldin said the Biden-era rules imposed costly and unrealistic requirements that exceeded the law.

Americans were right to be frustrated with the Biden-era refrigerant rules. They didn't protect human health or the environment and instead piled on costly, unattainable restrictions beyond what the law requires," Zeldin told the outlet in a statement.

Zeldin added, "Today, the Trump EPA is fulfilling President Trump's promise to lower costs and is fixing every problem we can under the authority Congress gave us."

President Trump and Zeldin are set to announce the rollback of Biden-era EPA regulations at a White House event later today. Zeldin's team is also preparing to propose additional rollbacks on hydrofluorocarbon regulations for refrigerated transport.

C-SPAN says Trump and Zeldin are set to announce the Oval Office at 11:00 ET.

The move here fits within Trump's broader deregulation agenda, which has focused on rolling back Biden-era environmental rules and lowering compliance costs for businesses to induce an economic boom.

Tyler Durden Thu, 05/21/2026 - 10:15

US PMIs Lead The World As Manufacturing Tops 4-Year Highs, Services Sink

Following Japan's ugly PMIs (Services lowest since March 2025) and Europe's disaster (weakest composite EU PMI since late 2023)...

...with prices surging...

All eyes are on the US 'soft' survey data for signs of divergence (or contagion).

With US 'hard' data improving notably, the preliminary soft survey data for May was mixed with improved performance in manufacturing was countered by a sluggish service sector.

• Flash US Services PMI Business Activity Index: 50.9 (April: 51.0). 2-month low.

• Flash US Manufacturing PMI: 55.3 (April: 54.5). 48-month high. 

Source: Bloomberg

“The damaging economic impact from the war in the Middle East is becoming increasingly evident in the business surveys," according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:

"The ‘flash’ PMI data for May recorded only modest growth of business activity as demand was again squeezed by a further spike in prices and jobs were cut as firms worried over rising costs and the economic outlook.

Coming on the heels of a subdued April reading, the May PMI indicates that the economy will struggle to manage annualized GDP growth of much more than 1% in the second quarter...

However, Williamson notes that even this subdued pace of growth may not last.

"On average, over the past three months order book growth has slowed to its weakest for two years, and a boost from precautionary stock building due to concerns over further price hikes and supply delays will not last forever.

Demand also looks set to cool further in response to rising prices.

"Firms’ costs have jumped higher at a pace not seen since the energy price shock of 2022 and are being passed on to customers in the form of sharply higher selling prices. The survey price gauges therefore indicate that inflation looks set to rise further just as the economy cools.”

Finally, while the composite numbers are not that encouraging, on a relative basis, US looks dominant...

Maybe trump was right about the impact of the war on everyone else? (Just don't tell anyone who drives!)

Tyler Durden Thu, 05/21/2026 - 09:54

Lilly's Next-Gen Weight-Loss Drug Clears Trial With Near-Bariatric Surgery Results

Eli Lilly reported positive Phase 3 results for its next-generation obesity drug, retatrutide, which delivered weight-loss results on par with those of bariatric surgery.

In the TRIUMPH-1 trial, overweight adults, but without diabetes, achieved meaningful weight loss across all tested doses after 80 weeks:

• 12 mg dose: average weight loss of 70.3 pounds, or 28.3% of body weight.

• 9 mg dose: average weight loss of 64.4 pounds, or 25.9%.

• 4 mg dose: average weight loss of 47.2 pounds, or 19%

Ahead of the results, RBC Capital Markets analyst Trung Huynh said the key success range would be 28% to 30% weight loss.

Lilly's 12 mg dose appears to have cleared the low end of Huynh's bar, with patients losing an average of 28.3% of their body weight over 80 weeks.

"We're in a zone that's historically been associated with bariatric surgery, and you're getting it with a medicine," Kenneth Custer, president of Lilly Cardiometabolic Health, told Bloomberg in an interview.

Custer added, "I think we can definitively check the box" based on the data that "retatrutide moves the goalpost on max efficacy."

Retatrutide is a first-in-class triple hormone receptor agonist targeting GIP, GLP-1, and glucagon, positioning it as potentially superior to current weight-loss drugs such as Lilly's Zepbound, Novo Nordisk's Wegovy, and copycat GLP-1s.

Lilly noted some downsides to taking the drug in the trial:

Events of dysesthesia and urinary tract infections were generally mild to moderate, the majority resolved during treatment, and most participants continued taking retatrutide

In markets, Lilly shares rose about 1% in premarket trading in New York, while shares of the Wegovy competitor, Novo Nordisk, traded in Copenhagen, fell slightly.

Latest in the GLP-1 space:

• HIMS Shares Plunge As Pivot To Branded GLP-1s Weighs On Outlook

The key question is whether bariatric surgery begins to lose favor among patients as next-generation obesity medications replicate, or come close to replicating, surgery-level weight loss without an invasive procedure.

Tyler Durden Thu, 05/21/2026 - 09:40

The Water Economics Of Data Centers Vs. Almond Farms & Golf Courses

A recent Gallup poll shows that nearly 70% of Americans oppose the construction of a data center in their communities, highlighting the rise of local resistance movements against hyperscaler buildouts. This resistance is driven by concerns over skyrocketing power bills, the destruction of farmland as it is transformed into industrial-scale AI infrastructure, and fears that data centers will drain local resources, particularly water.

It's no surprise that data center resistance is only gaining steam and will likely accelerate from here, as tech bros on the All-In podcast recently sounded the alarm. This resistance is emerging not just as power bills explode and water scarcity fears mount, but also as corporate America unleashes the "white-collar purge," with human labor swapped for GPUs. Meta was the latest to announce rising AI adoption alongside a new round of layoffs.

Water has become a flashpoint in data center debates, as some of these facilities can use 5 million gallons of water every day, as much as 16,000-plus average U.S. households, according to Environmental Protection Agency estimates.

There is also the extraordinary amount of power required to run the chip stacks, which consumes millions of additional gallons of water - more than the water used for cooling.

Hyperscalers are set to deploy $700 billion in capex this year to build out data centers and key AI infrastructure products, suggesting that local resistance nationwide will only continue to build as tech bros search for alternative options (low-Earth orbit and or residential backyards). Permitting denials and other issues may delay or block nearly half of data center projects this year.

However, on the subject of water, critics of data centers often fail to point out - especially in California - that agriculture also consumes a tremendous amount of water.

X user Smirkley compared the economics of a 5-gallon water-cooler jug, arguing that 5 gallons of water generates about $132 in economic output in data centers, but only about 2 cents in almonds.

Yet where is the outrage here?

Here is Smirkley's math:

• Data centers: $529.1 billion ÷ 20 billion gallons × 5 = $132.28 per 5 gallons
• California almonds: $5.66 billion ÷ 1.59 trillion gallons × 5 = 1.78 cents per 5 gallons

Smirkley's point is that AI infrastructure produces far more economic output per gallon than almonds.

Fine. Let me make it simple.

Almonds grown in the US use 80x more water than every American data center combined. This is the difference between an 8oz glass vs. a 5-gallon jug. pic.twitter.com/6NvR46klqJ

— Smirkley (@Smirkley) May 19, 2026

"Anti-data-center luddites may be worse than anti-nuclear activists. It is the same emotional panic, but even dumber somehow," the X user noted, adding, "Almonds grown in the U.S. use 80x more water than every American data center combined. This is the difference between an 8 oz. glass and a 5-gallon jug."

Honestly, fuck almonds pic.twitter.com/6PWXPKD8A7

— @jason (@Jason) May 14, 2026

"Data centers aren't stealing your water. Even if the total water draw of data centers triples by 2030, they'd require just 8% of the water consumed by American golf courses.@dodgeblake interviewed @AndyMasley, the man who's been debunking AI water doomerism," outlet Pirate Wires wrote on X. 

Data centers aren’t stealing your water.

Even if the total water draw of data centers triples by 2030, they’d require just 8% of the water consumed by American golf courses.@dodgeblake interviewed @AndyMasley, the man who’s been debunking AI water doomerism. Full story 👇 https://t.co/2paxx8rHeO pic.twitter.com/gDpDiwDOca

— Pirate Wires (@PirateWires) May 20, 2026

Where is the outrage for almonds and golf courses?

Tyler Durden Thu, 05/21/2026 - 09:15

Walmart Tumbles On Disappointing Guidance; Warns Low-Income Consumers Drowning, High Fuel Costs Will Hit Profit

Extending concerns about US consumer weakness - now that the bumper OBBBA tax refund period is over - after yesterday's earnings by Home Depot and Target, this morning Walmart reported Q1 earnings (the last big company to report, rounding out earnings season) and warned that fuel costs are squeezing the company’s bottom line and could lead to higher prices for shoppers. 

In the latest quarter, the world’s largest retailer said comparable sales in US stores rose 4.1%, excluding fuel, in the latest quarter, slightly better than the 4.0% Wall Street analysts were expecting. That was the good news; the bad news is that this was the slowest growth in comp store sales since 2024; Walmart also forecast adjusted profit for the second quarter that missed analysts’ expectations. That, together with several warnings on the state of the low-income consumer and that prices will rise unless input costs drop slammed shares.

The results show that the company continues to gain market share across income levels with its focus on low prices, fast delivery and wide assortment. But the emphasis on affordability is facing pressure as inflation accelerates and the conflict in Iran drives up fuel prices. Here is a snapshot of what WMT just reported, starting with the highlights:

• Revenue $177.75 billion, +7.3% y/y, beating estimates of $175.06 billion
  • Walmart-only US stores comparable sales ex-gas +4.1%, estimate +4%
  • Sam’s Club US comparable sales ex-gas +3.9%, estimate +3.59%
• Adjusted EPS 66c vs. 61c y/y, in line with exp. 66c
• Gross margin 24.3%, in line with exp. 24.3%

Walmart's comparable sales rose 4.1% from a year ago, just ahead of expectations, as the number of transactions was up 3% and the value of the average transaction increased 1.1%. That was down from a 4.6% rise in the previous quarter, and was the slowest year-over-year growth since the first quarter of 2024. Furthermore, with transactions at Walmart US rising 3%, and average ticket prices up only 1.1%, means that WMT is eating much of the input costs and making up for its with traffic. That however, will change very soon as the company revealed in its earnings call. 

Going down the line:

• Change in US E-Commerce sales +26%, estimate +18.6%
• Operating cash flow $4.74 billion, -12% y/y
• Adjusted operating income $7.67 billion, estimate $7.69 billion

US e-commerce sales grew 26% during the quarter, fueling growth in the company’s biggest market. Sales of grocery and general merchandise rose mid single-digits. General merchandise, which consists of apparel, electronics and other discretionary items, gained the most share in five years.

Walmart reported strong growth in grocery and general merchandise categories; partially offset by 100 bps headwind from maximum fair pricing legislation in pharmacy. Broad-based share gains across categories and income tiers led by upper-income households.

“The high-income consumer is spending with confidence in many categories, whereas the low-income consumer, we can tell, is more budget-conscious, trying to navigate certain financial distress,” Chief Financial Officer John David Rainey said in an interview with Bloomberg News. During the quarter, sales slowed somewhat in April after the Easter holiday. Higher tax refunds likely muted the impact of rising gas prices, though that’s abating, Rainey said. Prices rose 1.2% during the quarter and they could increase further if fuel prices stay where they are, he added, although that would surely lead to reduced traffic.

Translation: if it weren't for upper income consumers, who are forced to trade down to discounters such as Walmart, earnings would have been a disaster. 

And nowhere was this more obvious than in the company's guidance, because while Q1 earnings were solid, the reason the stock is selling off sharply in premarket trading is the company's disappointing forecast:

Second quarter forecast: 

• Sees adjusted EPS 72c to 74c, both below the median estimate of 75c 
• Sees net sales at constant currencies +4% to +5%
• Sees operating income at constant currencies up 7% to 10%

2027 full-year forecast

• Still sees adjusted EPS $2.75 to $2.85, below the median estimate $2.92
• Still sees net sales at constant currencies +3.5% to +4.5%

Walmart, which is viewed as an economic barometer due to its large size and footprint across the US and other markets, was the latest confirmation that the "lower half" of the K-shaped economy continues to sink, and it is only the upper half (that is increasingly shopping at WalMart) which is keeping the retailer afloat. 

While spending has largely held up in recent years, consumers have become increasingly selective with their purchases. Good deals and unique products can still attract buyers.

But the biggest wildcard is that the higher tax refunds this year have given families some extra cash, but this benefit is now fading fast as we explained a month ago. While most prices of general goods haven’t risen as operators move existing inventory, this could change as the war drags on.

There' more: fuel weighed on Walmart’s profit margin in the quarter, as the company absorbed “virtually the entirety” of the increases during the period, Rainey said. The company is prioritizing keeping prices low, with the number of discounts rising 20% from a year ago. That said, Reiney warned of potential higher retail price inflation in Q2 and H2 if the current elevated cost environment persists.

"It’s tough on very short notice to be able to navigate a cost headwind like that,” he said. While Walmart will be able to manage through it, he expects to see an equal or larger challenge related to fuel in the current quarter.

Rainey said that the number of gas gallons customers bought at Walmart stations fell below 10 for first time since 2022; he added that the decline in gas buying is sign of financial stress.

Walmart has consistently posted stronger results than many competitors, raising investors’ expectations and pushing the company's forward PE to an insane 45x, a multiple that will soon get a painful reminder of what happens to multiples during consumer recessions.

Walmart’s cautious narrative echoes commentary from big-box peers Target Corp. and Home Depot which both signaled this week that consumers are staying resilient although purchases are slowing. Kraft Heinz, McDonald’s and other companies have also struck a cautious tone recently. The past year has been a roller coaster for consumer-facing companies, first with President Trump’s expansive, on-off tariffs, that in some cases roiled operations, and now with the ongoing geopolitical conflicts threatening to dampen demand.

The Bentonville, Arkansas-based retailer has said it seeks to gain market share during challenging economic times by focusing on value and essentials like groceries. Delivery and other online services have expanded Walmart’s base of clients to include wealthier shoppers. Advertising and other businesses are also contributing to profit growth and giving the company more room to further invest in lowering prices and improving store operations.

In particular, fast deliveries have been a growth engine, and the company’s efforts to make inroads into the fashion market are gaining traction. Walmart has also expanded the selection of merchandise on its marketplace of third-party vendors.

The company’s shares tumbled more than 3% in premarket trading in New York. The stock has risen 17% so far this year as of Wednesday’s close. Shares of Walmart’s peers, including Target and Kroger Co., also fell in premarket trading on Thursday.

Full Q1 investor presentation below (pdf link)

q1 Fy27 Earnings Presentation by Zerohedge

Tyler Durden Thu, 05/21/2026 - 09:10

FBI Charges Assistant US Attorney For Stealing Smith Report Docs In Trump 'Witch Hunt' Case

Authored by Jonathan Turley,

Former Justice Department prosecutor Carmen Mercedes Lineberger has been indicted for allegedly removing confidential Justice Department material and then concealing her efforts. Lineberger is accused of secretly transferring Jack Smith’s final report and hiding the material under files labeled “chocolate cake recipe” and “bundt cake recipe.” There has not been a greater recipe for disaster since aides tried to fit all of Biden’s candles on a cake. The case is particularly interesting because there was another person who was accused of a secret removal of Justice Department material who was not prosecuted: former FBI Director James Comey.

Linebarger, 62, of Port St. Lucie, Florida, has been indicted on four criminal charges: one felony count of obstruction of justice, one felony count of concealing government records and two misdemeanor counts of theft of government property valued at less than $1,000.

According to the indictment, Lineberger altered electronic file names of government records to conceal unauthorized transmissions of the documents to her personal email accounts and used file names for cake recipes to conceal her possession of the confidential information.

U.S. District Judge Aileen Cannon blocked the public release of the report after the prosecution collapsed against the President.

The Justice Department alleges that Lineberger received a copy of Smith’s report before the court sealed it. Months later, she allegedly decided to transfer it to her personal email account in violation of the court order and Justice Department rules.

She has now pleaded not guilty and faces up to 20 years on the obstruction charge and other charges.

The decision is notable for a couple of reasons.

First, Smith made one last move in dismissing the case against Trump that left the door open to resuming his prosecution. Smith moved to dismiss the indictment “without prejudice” and then stressed to the court that the Department has previously “noted the possibility that a court might equitably toll the statute of limitations to permit proceeding against the President once out of office.” In other words, Trump could be prosecuted after he leaves office.

It is not known what the motive might have been in this transfer. One possibility would be a type of souvenir or trophy grab, which would be ironic given Smith’s suggestion that Trump may have transferred classified material for that type of possessory thrill. Another is the possible use for a book. Finally, there might have been a desire to preserve evidence to avoid destruction during the Trump years or possible release to the media.

The second notable aspect is that Comey was accused of such a knowing removal, but he was never actually prosecuted.

There was no court order governing the material removed by Comey after his firing, but it was clearly departmental material.

The Inspector General, Michael Horowitz, found that Comey was a leaker and had violated FBI policy in his handling of FBI memos. He found that Comey grabbed the material on his way out of the Bureau, including those containing the “code name and true identity” of a sensitive source.

While he did not find a disclosure of the classified information, Horowitz found that Comey took “the unauthorized disclosure of sensitive investigative information, obtained during the course of FBI employment, to achieve a personally desired outcome.” He further added that Comey “set a dangerous example for the over 35,000 current FBI employees—and the many thousands of more former FBI employees—who similarly have access to or knowledge of non-public information.”

Comey later admitted that he asked his friend, Columbia Law Professor Daniel Richman, to leak information from the documents to the New York Times.

While Comey is facing a weak criminal case over threats conveyed through beach shells, some of us saw his conduct in removing this material as a more serious breach.

Comey went on to write books on “ethical leadership” and recently sent a message to current FBI personnel that they should “hang on” and wait out Trump: “In two and a half years, and then we can rebuild.”

Rebuilding the bureau in Comey’s image is a truly chilling notion. Those “good old days” with Comey allowed agents to launch a baseless Russian collusion investigation at the behest of the Clinton campaign and lie to a secret court to secure surveillance of Trump figures.

In the meantime, it will be Lineberger, not Comey, who will face a jury for the removal of confidential material.

For Lineberger, these types of charges tend to be cut-and-dried for prosecutors if they can show that the material was restricted and that she took steps to conceal the alleged theft. While she gained access before the court order, she allegedly transferred the material after the order and then hid the material in files labeled as cake recipes.  If those facts can be established in court, prosecutors likely believe that she can stick a fork in herself because she is done.

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

Tyler Durden Thu, 05/21/2026 - 09:00

Renter Nation Returns? Multi-Family Unit Starts & Permits Soar In April

On the back of a small uptick in homebuilder confidence (though still languishing)...

...Building Permits jumped notably (+5.8% MoM vs +2.5% exp) in preliminary April data (while Housing Starts dipped 2.8% MoM, though less than the 5.2% MoM decline expected)...

The pace of starts and permits on a SAAR basis has remained flat for four years...

Multi-family unit starts and permits soared in April...

As single-family home starts stagnate...

It appears builders believe that 'Renter Nation' is on its way back.

Tyler Durden Thu, 05/21/2026 - 08:50

Foreign Treasury Selling Is Getting Serious

Submitted by QTR's Fringe Finance

We already knew that the bond market was starting to call bullshit on America’s fiscal and monetary policy. Now we know that foreign governments are dumping U.S. Treasuries, and China is leading the way…even while President Trump pals around with President Xi Jinping.

According to CNBC, foreign holdings of U.S. government debt fell sharply in March as central banks sold Treasuries to defend weakening currencies during the geopolitical and energy shock tied to the escalating Middle East conflict.

China reduced its Treasury holdings to roughly $652 billion, the lowest level since 2008. Japan, the single largest foreign holder of U.S. debt, also cut exposure aggressively. Overall foreign holdings dropped from approximately $9.49 trillion to $9.25 trillion in a single month.

That should deeply concern anyone paying attention to the structural fragility underneath the U.S. financial system.

For decades, the global economy has operated on a relatively simple arrangement. The United States issues the world’s reserve currency, foreign governments recycle trade surpluses into U.S. Treasuries, and America finances massive deficits because the rest of the world willingly absorbs its debt. That system only works as long as there is confidence in the dollar, confidence in the Federal Reserve, and confidence that U.S. government debt remains the safest and most liquid place on earth to park capital.

When major foreign holders begin reducing exposure during a period of rising inflation, exploding deficits, and growing fiscal instability, it creates a potentially dangerous chain reaction. And the timing for the world to be dumping treasuriers right now could not be worse.

Bonds are already under pressure because inflation is proving far stickier than policymakers expected. As I wrote last week, both CPI and PPI came in significantly hotter than anticipated, forcing markets to rapidly reassess the possibility that the Federal Reserve may actually need to raise rates again instead of cutting them.

Meanwhile, deficits continue spiraling, interest expense on the national debt keeps exploding higher, and the Treasury must issue enormous amounts of new debt simply to keep funding government spending. Now layer weakening foreign demand on top of all of that.

That combination is nasty. If foreign governments buy fewer Treasuries while supply continues surging, yields move higher. Higher yields tighten financial conditions across the entire economy. Mortgage rates stay elevated. Corporate refinancing becomes more expensive. Regional banks sitting on massive unrealized bond losses face renewed pressure. Commercial real estate weakens further. Consumers get squeezed harder.

And because Treasuries serve as the foundational collateral layer of the global financial system, instability there spreads everywhere else. This is why the liquidation story matters far beyond geopolitics.

China reducing Treasury exposure is not entirely new. The broader trend has been developing for years as Beijing slowly diversifies reserves away from direct dependence on U.S. assets. Whether through outright selling or indirect “shadow holdings” routed through financial centers like Belgium and Luxembourg, the direction has been fairly clear for a long time.

But Japan selling aggressively alongside China is where things become even more uncomfortable. Some of Japan’s selling is likely tied to defending the yen as energy shocks and rising oil prices pressure its economy. Japan imports the overwhelming majority of its energy, so a collapsing yen combined with surging import costs creates enormous strain domestically. Selling Treasuries gives Tokyo access to dollar liquidity it can use to intervene in currency markets and stabilize the yen before the situation spirals further.

Japan has spent decades as one of the most reliable buyers of U.S. debt. If even Tokyo is becoming less comfortable absorbing massive amounts of Treasuries while inflation remains elevated and deficits continue exploding, markets should pay attention. Japan may simply see the same thing the bond market increasingly sees: the United States is issuing debt at an unsustainable pace into an environment where inflation is no longer fully under control.

If that’s the case, that is not just a portfolio adjustment. That is a confidence signal. The uncomfortable reality is that the United States has become dangerously dependent on perpetual debt expansion at the exact moment global appetite for absorbing that debt is becoming less certain.

🔥 50% OFF FOR LIFE: Using this coupon entitles you to 50% off an annual subscription to Fringe Finance for life: Get 50% off forever

And this is where the Federal Reserve’s trap becomes even more severe. If inflation reaccelerates while Treasury demand weakens simultaneously, the Fed faces two terrible options: raise rates further to defend credibility and contain inflation, risking deeper stress across banks, housing, private credit, equities, and the broader economy or step back in with liquidity programs and money printing to stabilize markets and absorb debt issuance, effectively reigniting the same inflation problem they spent years trying to contain.

That is the corner policymakers have backed themselves into after years of artificially suppressed rates, endless stimulus, and the assumption that global demand for U.S. assets would remain infinite regardless of fiscal discipline.

It won’t. And I wrote this past week about why it seems incoming Fed Chair Kevin Warsh has a job in front of him that seems impossible. 

The most dangerous part of this story is that markets still seem unwilling to fully process what sustained deterioration in Treasury demand would actually mean. Investors have spent decades treating U.S. government debt as the unquestioned risk free foundation of the financial system.

But when foreign governments begin reducing exposure while inflation stays elevated and deficits spiral, that assumption starts getting tested in real time.

And once confidence in the system itself begins eroding, things can unravel far faster than policymakers would like to admit.

--

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions. All positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier.

The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

Tyler Durden Thu, 05/21/2026 - 08:45

Jobless Claims Refuse To Show Any Signs Of AI Jobpocalypse

The number of Americans filing for unemployment benefits for the first time fell to 209k last week (below expectations), continuing to show absolutely on signs of any labor market stress...

Source: Bloomberg

That is basically unchanged since 2021.

Continuing jobless claims ticked up modestly but remains below 1.8 million Americans (just off two year lows)...

Source: Bloomberg

So, despite the tsunami of headlines every day about the AI jobpocalypse, 'hard' data shows no signs of any pain yet (wait until the severance packages run dry)...

Tyler Durden Thu, 05/21/2026 - 08:35

Watch: Vance Urges UK Patriots To Defend Their Culture Against Starmer Mass Migration Betrayal

Authored by Steve Watson via Modernity.news,

US Vice President JD Vance has sent a direct message of support to Britons standing up for their culture, telling attendees of the Unite the Kingdom rally to push forward despite Keir Starmer’s attempts to silence opposition to mass migration.

The rally, held this past weekend in London and organised by Tommy Robinson, saw thousands of patriots turn out waving British flags. 

Starmer’s government had tried to sabotage the event by blocking visas for 11 foreign speakers it labelled “far-right agitators.”

🚨 WOW! JD Vance just broke it down PERFECTLY for patriots in the West rising up against 3rd world migration, BUCKING Keir Starmer calling it "far-right"

"To everybody in the UK who rejects [3rd world migration], I'd encourage them to just KEEP ON GOING! It's OK to want to… pic.twitter.com/cKUjz95Nt7

— Eric Daugherty (@EricLDaugh) May 19, 2026

The Prime Minister openly boasted about the bans on X, writing “I’ll always champion peaceful protest. But the Unite the Kingdom march organisers are peddling hatred and division. We’ve already blocked visas for far-right agitators who want to come here to spew their extremist views. They don’t speak for the decent, fair, respectful Britain I know.” 

He followed up: “Today the voices of division will be loud. They don’t speak for the country I know, one that belongs to all of us.”

A video from the event captured a striking contrast, showing a left-wing woman in tears hugging her masked companion in fright at the sight of the national flag. 

Left-wing woman breaks down in TEARS while hugging mask wearing boyfriend after being triggered by thousands of people marching with British flags. 🇬🇧 pic.twitter.com/8JMyBBq3kw

— Oli London (@OliLondonTV) May 18, 2026

Vance rejected the establishment narrative that wanting secure borders equals extremism.

“To everybody in the UK who rejects 3rd world migration, I’d encourage them to just KEEP ON GOING! It’s OK to want to defend your culture!” Vance stated. 

He added, “All over the West is this idea that the way to generate prosperity is to bring in MILLIONS and millions of unvetted people and DROP them into your neighborhoods — and we simply reject that idea!”

“It’s OK to want to live in a safe neighborhood. It’s okay to want your job to go to yourself and your neighbors and not to a stranger who you don’t even know. It is reasonable for the people in Western societies to want to control who comes into their country and who doesn’t,” Vance stressed.

He added: “A lot of people, frankly, a lot of people in the media have tried to persuade all of those people that it’s somehow racist to want to protect your borders… even though very often the very people who are most affected by low wage immigration are lower income black and Hispanic Americans right here in the United States of America, and I guarantee that’s true in the UK.”

Vance concluded by drawing a direct link to America First: “So we believe in making America great again. You can’t do that unless you protect your borders. I’d encourage our friends in the UK to follow the same path.”

This latest intervention builds on Vance’s repeated clashes with Starmer and European leaders. He previously called out the British Prime Minister to his face over the UK’s free speech crackdown.

The US later vowed to use its “full arsenal of tools” against Starmer’s policies 

Vance has also long warned about the dangers of Europe’s migration experiment, describing it as “civilisational suicide” 

He has cautioned that Islamist extremists could seize control of European nukes within 15 years.

Vance has also triggered globalist outrage with his blunt speeches on replacement-level migration.

While Starmer brands patriotic pushback as “hatred and division,” ordinary Britons at the rally made clear they simply want what Vance described as basic common sense: safe streets, jobs for locals, and control over their borders.

Vance’s words arrive as frustration with open borders boils over across the West. Working-class communities on both sides of the Atlantic are paying the price through suppressed wages, overburdened services, and rising insecurity — effects the political class routinely dismisses.

By standing with those who reject cultural erasure, Vance is highlighting a fundamental truth: people of free nations have the sovereign right to preserve their identity and security.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Thu, 05/21/2026 - 08:05

Quantum Stocks Erupt As U.S. Gov't Awards $2 Billion, Takes Equity Stakes

IBM and small-cap quantum names, including IonQ, D-Wave Quantum, Rigetti Computing, Infleqtion, and other peers, are surging in New York premarket trading after a Wall Street Journal report said the Trump administration is preparing to award $2 billion in CHIPS Act grants to nine quantum-computing companies.

IBM is set to receive half of the $2 billion tranche, or about $1 billion, as the large-cap leader in the race to build quantum computing systems that could revolutionize national security, accelerate scientific discovery, and deliver a range of other economic benefits.

WSJ, citing the Commerce Department, outlined the companies expected to receive funding from the 2022 Chips and Science Act:

The department has agreed to give $1 billion of the package to IBM, a leader in the race to build computers that use quantum mechanics to solve problems much faster than traditional supercomputers.

. . .

IBM and other companies are working to develop specialized chips for quantum computing, a focus for the government in its bid to spur domestic supply chains. Chip maker GlobalFoundries is receiving $375 million in funding.

The rest of the firms are expected to receive $100 million, except for startup Diraq, which is slated to get $38 million.

A slew of companies pursuing various approaches to quantum are slated to be awarded funds, including publicly traded firms D-Wave Quantum, Rigetti Computing and Infleqtion.

Commerce Secretary Howard Lutnick's strategy of using federal funding in exchange for equity stakes will also apply to the quantum computing companies listed above. This is similar to a series of other deals, especially in the rare earths space, including rare-earth magnet maker Vulcan Elements and mining company MP Materials.

US TO GRANT $2B TO 9 QUANTUM COMPUTING FIRMS, TAKE STAKES: WSJ

Among companies receiving funds:

IBM: $1BN
GFS: $375MM
QBTS: $100MM
RGTI: $100MM
INFQ: $100MM

— zerohedge (@zerohedge) May 21, 2026

Lutnick stated, "The Trump administration is leading the world into a new era of American innovation."

In premarket trading, IBM rose 6%, D-Wave Quantum soared 19%, Rigetti Computing jumped 15%, and IONQ up 9%.

Quantum computing benefits:

• National security: Quantum systems could eventually break parts of today's encryption, forcing governments, banks, defense firms, and cloud providers to move toward post-quantum cybersecurity. It also has potential uses in secure communications, advanced sensing, navigation, and intelligence systems.

• AI and scientific discovery: Quantum computing could accelerate complex simulations used in materials science, drug discovery, chemistry, energy systems, and advanced manufacturing. Combined with AI, it could shorten research cycles that currently take years.

• Semiconductors and supply chains: The race is not only about software. It requires specialized chips, cryogenics, photonics, control systems, and advanced manufacturing capacity, making it a strategic industrial-policy priority similar to AI chips.

• Finance and logistics: Quantum algorithms could improve optimization problems, including portfolio modeling, risk analysis, routing, supply-chain planning, and energy-grid management.

"Everybody is excited about quantum because it is the next big thing. A lot of the expectations and hopes have yet to be realized," said Dana Goward, president of the Resilient Navigation and Timing Foundation.

It is important to note that quantum computing remains in the early stages, is expensive, and is technically challenging.

Nvidia CEO Jensen Huang recently said that "very useful" standalone quantum computers are still roughly 15 to 20 years away.

Tyler Durden Thu, 05/21/2026 - 07:45

Futures Slump, Ignoring Korean Euphoria, After Iran Rejects Trump Enriched Uranium Demands

A steady rebound in US equities driven by peak insanity in Korea (where the two chip stocks that account for most of the market surged and sent the Kospi soaring more than 8% overnight) faded after a report that Iran’s Supreme Leader issued a directive that the country’s near-weapons-grade uranium must remain in the country, rejecting Trump's key ceasefire demand, while oil and bond yields jumped as traders waited in mounting futility to see whether hopes of a peace deal in the Middle East would translate into tangible progress. As of 7:15am ET, S&P 500 futures fell 0.4% and Nasdaq futures slid 0.3% after otherwise very strong Nvidia’s earnings failed to ignite further strong gains in the artificial intelligence trade. Treasuries fell as Brent reversed earlier losses to climb 2% above $107 after Tehran's response disappointed those hoping for de-escalation. JPMorgan CEO Jamie Dimon did not help, warning that interest rates may climb much further from current levels. Long-dated bonds around the world have tested multiyear highs in recent days on concern about an oil-driven spike in inflation and amid worries over government spending.

Yesterday's Nvidia earnings proved to be a dud: Nvidia shares were unchanged (crushing both put and call buyers as the implied vol collapse) in US premarket trading after the AI chipmaker reported Q1 results and gave a forecast amid increased investor skepticism. While analysts were broadly positive, some also questioned the sustainability of growth, especially amid higher competition. Intuit sank 13% after the software company said it plans to reduce its workforce by about 17%. The shares of space exploration and satellite internet companies were broadly steady after Elon Musk’s SpaceX filed publicly for an initial public offering. Tesla advanced 1.6%, while other Mag 7 stocks were mixed (Amazon +0.6%, Alphabet +0.3%, Meta -0.2%, Apple -0.3%, Microsoft -0.3%).

• Aevex Corp. (AVEX) is up 8.5% after the drone maker reported first-quarter earnings. The company also announced that it was awarded $15.6 million in contracts by the US Air Force.
• Applied Digital (APLD) jumps 11% after the company signed a 15-year lease valued at about $7.5 billion with a US investment-grade hyperscaler for its Polaris Forge 3 campus.
• Elf Beauty Inc. (ELF) is up 9.9% after the cosmetics company beat the average analyst estimate on major profit and revenue estimates. Meanwhile, the company forecast adjusted earnings per share for 2027 that fell short of expectations.
• Intuit (INTU) sinks 13% after the tax-preparation software company reported third-quarter results that were seen as disappointing for its TurboTax business. It also said it is cutting about 17% of its staff, confirming an earlier Reuters report.
• Nebius (NBIS) is up 8.4% after partnering with Bloom Energy to deploy fuel-cell technology to power its AI infrastructure build-out in the US. Bloom rises 2.6%.

In other corporate news, Samsung reached a tentative last-minute deal with its union, averting a potentially crippling strike scheduled to start on Thursday at the world’s biggest memory firm.

Virtually all overnight gains in the S&P faded just after 6am when Reuters blasted the following two headlines which poured cold water on expectations of a quick deescalation in the Iran war

• *IRAN SUPREME LEADER SAYS URANIUM MUST STAY IN IRAN: REUTERS
• *IRAN SUPREME LEADER ISSUES DIRECTIVE ON URANIUM: REUTERS

Almost overshadowed by headlines related to AI-disrupter Anthropic and SpaceX, Nvidia’s results produced the expected high growth.  Nvidia’s revenue growth shows that the momentum of the debt-fueled AI data-center buildout is accelerating. While analysts are broadly positive, some also questioned the sustainability of growth, especially amid higher competition. Some also pointed to the company's compute revenue miss as an early warning sign, especially with Nvidia changing the way it reports revenue so it masks this weakness going forward. Nvidia's price reaction was expected to be more muted compared to the last few years - call open interest has been drifting lower. While this suggests a cooling in the speculative chase that previously defined the popular AI trade, it isn’t dimming the price action of peripheral beneficiaries - a windfall for Asian chip makers. 

“Investors remain relentless in pursuit of supernormal returns offered by AI,” said Emmanuel Valavanis, an equity sales specialist at Forte Securities, noting how narrow the market has become given a “laser beam focus on AI, the biggest tech infrastructure build-out of 21st century.”

Shortly after the Nvidia results, SpaceX filed publicly for what stands to be the largest-ever IPO, revealing billions in losses and a super-voting share plan allowing Elon Musk to keep the company under his control. SpaceX had a net loss of $4.28 billion on revenue of $4.69 billion for the first quarter, compared with a net loss of $528 million on revenue of about $4 billion a year earlier, the filing shows. 

While this will surely change, for now SpaceX is now a cash incinerating machine, with nearly $25BN in cash burn in the last 12 months.

“We believe that our current space efforts will catalyze transformative breakthroughs that could reshape terrestrial industries and lead to the emergence of new trillion-dollar markets on the Moon, Mars, and beyond.” Space Exploration said in its Form S-1.

Elsewhere Jamie Dimon said interest rates may climb much higher from current levels, while his firm will likely hire more AI specialists and fewer traditional bankers as the adoption of the technology accelerate.

The muted tone in US markets contrasted with buoyant optimism in Asia, where a key tech gauge jumped the most in six weeks.

Overnight Asia saw stock market fireworks with Korea's LG Electronics and Hyundai Mobis both surging in Seoul after Nvidia CEO Jensen Huang touted new opportunities offered by robots and automated vehicles. SoftBank Group Corp. jumped 20% as two companies backed by the Japanese investor - OpenAI and SB Energy Corp. - were said to be preparing for initial public offerings. Regional chipmakers tracked Wednesday’s gains in US peers.

“The rally in Asia has been supported by very strong momentum in technology, particularly around the current reality of AI demand,” said Francisco Simón, European head of strategy at Santander Asset Management. “Looking ahead, investors also continue to see structural growth potential linked to the future evolution of AI, including companies that may emerge as leaders.”

European shares edged higher after early declines as investors digested earnings reports and purchasing managers’ index data from across the region. The Stoxx 600 rose 0.4%, British defense technology firm QinetiQ was among the top gainers after posting strong results and announcing a new share buyback programme, while Ubisoft slumped on weak bookings. Here are the biggest movers Thursday:

• QinetiQ shares jumped as much as 11%, the biggest daily rise in over a year, after earnings showed a profit beat and a buyback initiative.
• Investec rallied as much as 5.3% in London to its highest intraday level since April after the specialist lender reported net income for the full year that beat the average analyst estimate.
• Generali shares rose as much as 2.9%, the best performer on the Stoxx 600 Insurance Index, after the Italian insurer reported what analysts say are strong 1Q earnings.
• CSG shares rose as much as 5.9% after Oddo BHF upgraded the defense company to outperform from neutral, saying there is potential for significant re-rating after a short attack sent the stock plunging earlier this month.
• Naturgy Energy Group shares gained as much as 3.4%, trading at their highest level since 2022, after receiving upgrades from Morgan Stanley and BNP Paribas.
• Alfen rose as much as 25% after a Jefferies upgrade gives it a sole buy rating, with the energy-equipment company seen favorably positioned to capitalize on the energy transition theme, with double-digit growth in all end-markets.
• Greece’s Public Power rose as much as 6% to a record high after it concluded a share capital increase on Wednesday.
• Hexagon shares fell as much as 18% on Thursday, their first day of trading excluding rights to the company’s upcoming spin off of its subsidiary Octave.
• Ubisoft shares slumped as much as 19% on Thursday after the video game maker guided to a high single-digit percentage drop in net bookings for the coming fiscal year, well below expectations.
• Convatec shares dropped as much as 5.6%, worst performer in the Stoxx 600 Health Care Index on Thursday morning, after the medical products and equipment manufacturer provided an update for the first four months of 2026.
• MaaT Pharma shares plunge as much as 61%, the most on record, after the French biotech company said its experimental therapy Xervyteg for acute graft-versus-host disease is likely to be turned down by the European Medicines Agency.
• Autotrader falls as much as 4.8%, most since Feb. 3, after a soft earnings report which analysts said will weaken confidence in the online vehicle marketplace. The stock has lost about a fifth of its value this year.
• Elior slumped as much as 26%, the most since November 2024, after the French catering and food services company’s first-half results came in significantly below expectations and it lowered guidance for the full year.

Investors are also getting a reading into business activity in major economies against a backdrop of rising energy costs. The data compiled by S&P Global are closely watched as they arrive early in the month and are good at revealing trends and turning points. In the UK, businesses posted the first decline in output in over a year as the Iran shock and a mounting rebellion against Prime Minister Keir Starmer hit activity in the services sector. In the euro area, activity shrank at the quickest pace in 2 1/2 years.

Earlier in the session, Asian equities snapped a four-day losing streak, with a rally in tech shares and easing Middle East tensions helping lift sentiment. The MSCI Asia Pacific Index rose as much as 2.8%, the most over a month. South Korea’s Kospi surged more than 8% to lead gains in the region after Samsung Electronics reached a tentative deal with its labor union. Shares in Taiwan and Japan also jumped. Chip heavyweights contributed the most to the Asian benchmark’s gains. Meanwhile, SoftBank Group shares soared in Japan after reports said that two of the companies it backs are preparing to list in the US.

Walmart, Ralph Lauren and Deere are among companies expected to report results before the market opens. While confident in its ability to win market share, Walmart is unlikely to raise full-year guidance given persistent uncertainties from higher fuel and freight costs, Citi said. Numbers from Take-Two and Workday follow later in the day. 

In commodities, Brent crude futures are up 2% to near $107 a barrel, erasing an earlier fall, after a report that Iran’s Supreme Leader has issued a directive that the country’s near-weapons-grade uranium should not be sent abroad. European stocks surrendered gains and turned red on the news, while US equity futures dropped.  Precious metals extended declines. 

Bonds also sold off, with the decline in Treasuries pushing US 10-year yields up 3 bps to 4.61%. European government followed suit, led lower by shorter dated maturities.

In FX, the Bloomberg Dollar Spot Index is up 0.2% while the Swedish krona and Aussie dollar slipped to the bottom of the G-10 FX pile, losing 0.4% each. While a resolution could put the dollar under selling pressure, conviction of a lasting peace deal is lower, ING strategists say. “The dollar’s contained reaction to Trump’s comments leaves a relatively larger scope for further downside if a deal is indeed about to be agreed,” they write in a note; “But it also confirms thinner market patience, and a new period of a stall in negotiations could end up taking DXY above the 99.50 mark even without any new military re-escalation."" At the same time significant downside in the currency may be limited given hawkish FOMC minutes on Wednesday, strategists say

Looking at today's calendar, we get Housing starts for April, Philadelphia Fed business outlook, and initial jobless claims through May 16 are due at 8:30 a.m. ET, followed by provisional PMI data for May at 9.45 a.m. 

Market Snapshot

• S&P 500 mini -0.3%
• Nasdaq 100 mini -0.3%,
• Russell 2000 mini -0.3%
• Stoxx Europe 600 +0.4%,
• DAX +0.5%,
• CAC 40 +0.3%
• 10-year Treasury yield +2 basis point at 4.60%
• Bloomberg Dollar Index little changed at 1201.2,
• euro little changed at $1.163
• WTI crude -0.1% at $98.13/barrel

Top Overnight News

• Iran's Supreme Leader has issued a directive that the country's near-weapons-grade uranium should not be sent abroad, two senior Iranian sources said, hardening Tehran's stance on one of the main U.S. demands at peace talks. RTRS
• Pakistan stepped up diplomatic efforts on Thursday to hasten U.S. and Iran peace talks, as Tehran said it was reviewing Washington's latest responses and President Donald Trump suggested he could wait a few days for "the right answers" from Tehran but was also willing to resume attacks on the country. RTRS
• Tehran is studying the American text and has not yet submitted its response. Pakistan is working to bring closer the viewpoints between the US and Iran. Iran is in the process of responding to the text sent by the US and that "the sent text has reduced the gaps to some extent", but requires guarantees: Al Arabiya and ISNA
• The US will open a new consulate building in Greenland, renewing concerns over Washington’s designs for the island. Protests are planned. BBG
• Beijing is holding up a proposed visit by the Pentagon’s top policy official as China pressures Donald Trump over a $14bn weapons package for Taiwan. FT
• The Trump administration is awarding $2 billion in grants to nine quantum-computing companies in deals that include U.S. government equity stakes. WSJ
• Anthropic’s revenue is set to more than double to $10.9 billion in the second quarter, an explosive rate of growth that will help it turn an operating profit for the first time. WSJ
• The RBI is considering all available options to stabilize the rupee, including an interest-rate hike, more currency swaps and raising dollars from investors overseas, people familiar said. BBG
• Euro-area business activity shrank at the quickest pace in two and a half years, adding to fears that the Iran war and surge in energy costs are dealing a severe blow to the economy. BBG
• The Fed proposed a new type of limited payment account to give fintech firms greater access to the US payments system. BBG

Iran

• Tehran is studying the American text and has not yet submitted its response, Al Arabiya reported citing sources. Pakistan is working to bring closer the viewpoints between the US and Iran. ISNA further reported that Iran is in the process of responding to the text sent by the US and that "the sent text has reduced the gaps to some extent", but requires guarantees.
• "According to my sources in Tehran, Iran’s response hasn’t been handed to the Pakistani mediator. There’re ongoing deliberations, and serious efforts to reach a final draft," according to Al Jazeera's Hashem.
• "Pakistan’s mediation efforts between US and Iran are at a crucial stage where efforts are underway to secure an agreement or a framework for comprehensive talks which can eventually lead to a ‘deal’," according to journalist Mallick.
• Pakistani source tells Al Jazeera the Army Chief is still in Pakistan and his visit to Iran depends on the outcomes of the interior minister's visit, enriched uranium is the main sticking point in the US-Iranian negotiations.
• Pakistan's Army Chief is to travel to Tehran on Thursday for negotiations and as part of mediation efforts between the US and Iran, ISNA reported.
• Pakistani political and media circles point to accelerated mediation efforts after Pakistani Interior Minister's Tehran meetings, IRNA reported. The report adds that presenting a narrative that indicates that progress in negotiations between Tehran and Washington is likely.
• Iran's Foreign Ministry spokesperson said Iran is pursuing talks "in good faith" but views US with "deep suspicion", Press TV reported. Confirms multiple rounds of messages have been exchanged through Pakistani intermediaries based on the 14-point proposal.
• Iranian official said they are ready to use new weapons if the US makes an additional act of aggression again, while he said they have produced and advanced weapons inside the country that have not yet been used on the battlefield and have not yet been tested. Furthermore, the spokesman stated that in terms of equipment and defensive capabilities, they are not experiencing any shortages that would prevent the defence of the country, and this time, they do not intend to act with restraint.
• IRGC said forces are ready to respond to any enemy aggression and all armed forces are ready with fingers on the trigger, according to SNN and Tasnim.

A more detailed look at global markets courtesy of Newqsuawk

APAC stocks mostly rallied as the region took impetus from the gains on Wall Street, with global risk sentiment underpinned following a slide in oil prices due to increased optimism regarding a resolution to the Middle East conflict, after President Trump stated that they are in the final stages of talks with Iran. Furthermore, it was also reported that the Pakistani Army Chief may visit Iran today to announce the achievement of a final draft agreement, while the US side gave Iran a text through a Pakistani mediator after having received Iran's 14-point text a few days ago. ASX 200 climbed higher with the gains led by outperformance in the real estate, mining and materials industries, while the index also shrugged off the weak flash PMIs and disappointing jobs data. Nikkei 225 surged higher amid the decline in energy prices and heavy buying in tech stocks, with SoftBank shares up around 20% following the earnings beat from NVIDIA, while there was a slew of data from Japan which were ultimately mixed, but included stronger-than-expected trade figures. KOSPI outperformed amid tech strength with SK Hynix surging by a double-digit percentage, while Samsung Electronics was boosted by an eleventh-hour tentative wage agreement with the labour union to avert an 18-day mass walkout. Hang Seng and Shanghai Comp lagged despite the increased liquidity effort by the PBoC, with price action rangebound and Chinese markets constrained amid weakness in energy stocks and automakers.

Top Asian News

• Japanese Finance Minister Katayama said Japan's fiscal policy is proactive and not expansionary.
• Japan's draft extra budget is reportedly around JPY 3tln, while it was also reported that Japan plans to spend JPY 500bln in reserve funds on energy measures.
• India is said to weigh options to boost the rupee, including a rate hike, with the RBI also considering options such as currency swaps and raising dollars from overseas investors.
• South Korea's NPS may hike domestic stock holding target by 5 percentage points amid rises in domestic stock market, Maeil reported.

European bourses (STOXX 600 +0.3%) are entirely but modestly in the green, ex. FTSE 100 (-0.1%). Signs of an end to the Iran war seem to be emerging, with President Trump saying the US is in the final stages of negotiations with Iran, while Al Arabiya reported that Tehran is studying the American text. The source report added that Pakistan is working to bring closer the viewpoints between the US and Iran. Elsewhere, EZ flash PMIs disappointed, with commentary continuing to highlight stagflation worries despite ECB Lagarde’s persistence in moving away from the language. European sectors point to a positive bias. Autos (+1.2%) and Retail (+0.6%) top the sector pile while Energy (-0.2%) and Banks (-0.2%) underperform.

Top European News

• EU Commission downgrades 2026 GDP growth forecast to 0.9% (prev. 1.2%), 2026 inflation revised to 3.00% (prev. 1.9%).
• UK Chancellor Reeves is to announce cuts to food tariffs and children's bus fares on Thursday in a cost-of-living push to win back voters. It was separately reported that Reeves will not announce a proposed voluntary cap on supermarket prices for essential groceries following strong backlash from the sector, according to Financial Times. Furthermore, Politico reported that Reeves is to announce a cut to agrifood tariffs on some products and a rise in mileage rates.

FX

• The Dollar index is unchanged on the day and returns to Thursday’s lows around 99.00 after chopping on geopolitics and soft EZ/French data. Action ultimately dictated by geopolitics, with reports recently sounding constructive and has outweighed the Dollar positive factors which incl. poor EZ PMI metrics and hawkish FOMC Minutes.
• EUR saw decent weakness on dismal French data, which heightened the possibility of EZ-US differentials widening. French PMIs marked the steepest contraction since late 2020. Services and composite were expected to be broadly unchanged from priors, though both slipped significantly further into contraction territory. The Manufacturing picture was better, though the metric still fell into contraction. The EZ figure was also poor but provided some reprieve for the single currency. EZ Manufacturing was resilient, though still fell below expected and previous, while composite and services fell further into contraction. As the French series was released, EUR/USD saw a move c.24 pips lower to a 1.1594 trough, though pared some downside as German/EZ figures were not as bad as feared according to the indications from France.
• JPY remains reluctant to deviate from the 159.00 mark despite hawkish remarks from BoJ's Koeda. JPY fundamentals remain bearish amid reporting around the Supplementary Budget and terms of trade. Koeda’s remarks overnight, “BoJ needs to continue to raise the policy interest rate”, mark the second non-dissenting member to indicate willingness to tighten policy (Masu+Koeda). This shows that last meeting’s 6-3 vote split will be vulnerable in June’s meeting, with the aforementioned members’ remarks indicating a possible 5-4 vote split for a hike, where interest rate futures currently imply a 77% probability of such action.

Central Banks

• BoJ Board Member Koeda said the BoJ needs to continue to raise the policy interest rate in response to developments in economic activity and prices, as well as financial conditions, while she thinks the BoJ needs to continue examining the extent to which underlying inflation is anchored. Koeda said given the situation in the Middle East, she sees some possibility that underlying inflation may exceed 2% looking ahead, and noted it is reasonable for BoJ to raise the policy interest rate at an appropriate pace to address high inflation, whilst also considering the trade-offs for the economy. Furthermore, she warned that if real interest rates continue to deviate markedly in a negative direction from the natural rate of interest, unintended distortions could arise in future resource allocation, as well as stated that the BoJ should proceed steadily with normalising its balance sheet in a predictable manner, while ensuring flexibility.
• ECB's Rehn said economy is moving towards the adverse scenario of projections; may need to raise rates to maintain credibility.
• Norges Bank Expectations Survey (Q2): 12-month ahead CPI 3.3% (prev. 2.8%), 2026 real wages 1.1% (prev. 1.3%).

Fixed Income

• USTs are off by a few ticks, but have been clambering off worst levels throughout the European session; currently towards the upper end of a 109-05 to 109-12 range. Wednesday saw sentiment lift amidst positive geopolitical newsflow, and this has continued into today’s session. Most recently, reports have suggested that Iran is in the process of responding to the text sent by the US, adding that it has “reduced the gaps to some extent”. This led to some pressure in the energy complex, in turn, lifting US paper.
• Bunds trade firmer today and towards the upper end of a 124.71 to 125.12 range. Strength today has been facilitated by a) geopolitical optimism (see above), and b) a dire set of PMI metrics. In brief, the French figures were awful, with Manufacturing surprisingly slipping into contractionary territory and Composite/Services also deteriorating; the German metrics also indicated the downbeat Manufacturing environment, but were more or less in line with expectations. The EZ-wide figure concluded that activity in the region is softening across both the Manufacturing and Services; "The survey data indicate that the euro area economy looks set to contract by 0.2% in the second quarter”. The report concludes by suggesting that price gauges suggest inflation is running close to 4%, which, alongside slowing growth, “creates a deepening dilemma for policymakers”.
• Gilts move higher alongside the pressure in the crude complex. The region had its own PMI metrics to digest. Manufacturing remained solid whilst Services surprisingly fell into contractionary territory. UK paper was choppy in reaction to the data, but ultimately little moved – perhaps as attention turns to Chancellor Reeves, who is due to speak at 11:30 BST. Reports suggest that she will announce targeted cuts to agrifood tariffs expected to save consumers more than GBP 150mln annually. She is also expected to announce free summer bus travel for children, and a GBP 400mln package for motorists and hauliers, including a postponed 5p fuel duty rise. Political analysts view her speech as an attempt to secure herself as the Labour Party’s long-term chancellor in the midst of recent political turmoil

Commodities

• In geopolitics, US President Trump said Iran talks were in the “final stages” but warned the US could get “a little bit nasty” if no deal is reached, while stressing sanctions relief would only come after an agreement. Iran said dialogue was continuing around its 14-point proposal, but rejected surrender, ultimatums or deadlines. Tehran is studying the American text and has not yet submitted its response.
• WTI and Brent crude futures are moving lower following the aforementioned constructive geopolitical headlines. WTI Jul briefly topped USD 100/bbl before returning under the level, currently in a USD 97.29-100.11/bbl range. Brent Jul resides in a 103.68-106.80/bbl parameter. Dutch TTF is now softer by over 1%, with downticks also seen in light of the constructive US-Iran commentary.
• Spot gold is contained to a USD 4,512-4,570/oz range, on a modestly softer footing intraday but off extremes as the yellow metal moves in lockstep with the USD, which is influenced by energy prices. Spot silver found intraday resistance at USD 77/bbl before printing a USD 74.67/oz low.
• Base metals are lower despite the broader optimism from the US-Iran relatively flat DXY at the time of writing, whilst PMI data in Europe pointed to an overall bleak picture, with the data pointing to contractions in the EZ and the UK. 3M LME copper resides in a USD 13,477.65- 13,713.40/t range.
• ADNOC said that while it can ramp up its oil production in a matter of weeks, it will take 4 months for oil flows through Hormuz to return to 80% of pre-war levels.
• China raises gas and diesel prices by CNY 75 and CNY 70 per ton, respectively, from May 22nd.
• UAE's new pipeline that bypasses the Strait of Hormuz is reportedly around 50% complete.
• Goldman Sachs said global oil stockpiles fell at a record pace of 8.7mln bpd so far in May, while it added that physical markets continue to tighten with estimated oil exports through the Strait of Hormuz remaining at a very low 5% of normal.

Geopolitics

• Ukraine’s Drone Forces commander said Ukrainian drones attacked Russia’s Syzran oil refinery (147k-170k capacity) in the Samara region of Russia.
• US Defence Undersecretary Colby may visit China ahead of a possible trip by Pentagon chief Hegseth amid tension over Taiwan arms sales, SCMP reported.
• US deployed the USS Nimitz carrier strike group to the Caribbean in a show of force as President Trump pressures Cuba, according to NYT.
• US President Trump said on Wednesday he would speak with Taiwan's President Lai in an unprecedented move for a US leader that could roil US relations with China, according to The Guardian.
• Beijing is reportedly holding up a proposed visit by a Pentagon top policy official as China pressures US President Trump regarding a USD 14bln arms sale to Taiwan, according to FT.
• Chinese President Xi may visit North Korea by as early as next week, according to Yonhap.

US Event Calendar

• 8:30 am: United States May 16 Initial Jobless Claims, est. 210k, prior 211k
• 8:30 am: United States May 9 Continuing Claims, est. 1786k, prior 1782k
• 8:30 am: United States May Philadelphia Fed Business Outlook, est. 17.8, prior 26.7
• 8:30 am: United States Apr Housing Starts, est. 1410k, prior 1502k
• 8:30 am: United States Apr P Building Permits, est. 1384k, prior 1363k
• 9:45 am: United States May P S&P Global US Manufacturing PMI, est. 53.8, prior 54.5
• 9:45 am: United States May P S&P Global US Services PMI, est. 51.2, prior 51
• 9:45 am: United States May P S&P Global US Composite PMI, est. 51.8, prior 51.7

Central Banks

• 11:20 am: United States Fed’s Goolsbee Speaks in Chicago Radio Interview
• 12:20 pm: United States Fed’s Barkin Speaks on the Economy

DB's Jim Reid concludes the overnight wrap

Yesterday’s positive market mood has continued into Asian hours this morning, with the Kospi (+8.08%) and Nikkei (+3.58%) surging via a tech rally even as Nvidia’s eagerly awaited earnings drew a mixed response last night. This follows yesterday’s +1.08% gain for the S&P 500 on increased investor optimism that a US-Iran deal might materialise, leading to sharp declines for Brent crude (-5.63%) and a reversal in Treasury yields (-8.1bps on 10yr).

Starting with Nvidia, the chipmaker reported 85% yoy sales growth to $81.6bn last quarter and projected revenue of around $91bn in the current quarter (vs. $87.4bn est.). Despite the impressive growth and a 75% gross margin, that moderate sales guidance beat drew a lukewarm response from investors. Nvidia’s shares slipped by about 1% in post-market trading after a +1.30% gain yesterday that took it to a +19.8% gain YTD.

Futures on the Nasdaq and the S&P 500 are flat this morning following Nvidia’s results, but this comes after markets steamed ahead yesterday as the anticipation of good news on Iran brought oil prices and yields lower. The S&P 500 (+1.08%) rose for the first time in four sessions, with chipmakers and technology companies leading the way ahead of Nvidia’s results. The Philly Stock Exchange Index (+4.49%) rebounded strongly, with the Nasdaq (+1.54%) and the Magnificent-7 (+1.34%) also posting sizeable gains. European indices also rebounded, with the Stoxx 600 (+1.46%), CAC 40 (+1.70%), FTSE 100 (+0.99%) and DAX (+1.38%) all posting strong gains.

That positivity has carried over into Asian markets this morning. Japan’s Nikkei is up +3.58%, with Softbank surging +19.85% boosted by its roughly 13% stake in OpenAI as the WSJ reported that OpenAI is preparing to file an IPO in the coming days or weeks. Adrian Cox has written a quick note here on this overnight, putting the fundraising in some perspective. It would be double the previous largest IPO in history. Elsewhere, Korea’s KOSPI is soaring +8.08% with the likes of LG Electronics up +25.97% following Nvidia CEO Huang’s earnings call comments about the upside for physical AI and robotics. 8 stocks in the index are up by more than 15% as I type. Samsung (+5.35%) is also advancing strongly after reaching a tentative deal with its labour union to avoid a strike. The ASX is +1.63% higher but Chinese risk is broadly flat.

Before all that, it was rising optimism that the US and Iran might reach a deal that boosted markets yesterday. President Trump said that the US was in the “final stages” for a possible draft deal to end the conflict. Iran’s Tasnim news agency reported that Iran is reviewing the new draft US sent to Tehran in response to its 14-point proposal, while Axios reported that Trump and Israel’s Netanyahu had a tense call on Tuesday over the new peace proposal drafted by Qatar and Pakistan. That said, Trump did also threaten escalation, saying “We’ll either have a deal or we’re going to do some things that are a little bit nasty”. But overall investors jumped on potential, with Brent crude falling -5.63% to $105.02/bbl, whilst the 6-month ahead future fell -3.96% to $88.24/bbl. Brent is back up a modest +0.89% overnight.  
The decline in oil helped Treasury yields retreat from Tuesday’s highs. The 10yr yield fell -8.1bps to 4.59%, though that still leaves it +23bps above where it was on May 8. The bond rally was led by breakevens, especially at the front-end, with the 1yr US inflation swap falling -13.9bps to 3.24%. Long-dated real yields also declined after the sharp repricing over the past week, with 30yr nominal (-5.8bps) and real (-5.7bps) yields retreating from post-GFC highs.

While the rates rally dominated the day, the minutes of this month’s FOMC meeting showed officials growing more open to the potential need to raise rates. In particular, a “majority of participants highlighted… that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent”, with “many” officials calling for the Fed to drop its easing bias as a result. As a reminder, three of the voting FOMC members had dissented in favour of dropping the bias.

European government bonds also saw significant relief, with yields on 10yr bunds down -9.6bps to 3.09%, while OATs (-11.2bps) and BTPs (-13.6bps) saw double digit declines amid the decline in oil prices. Those moves came as the final Euro Area April CPI was in-line with the flash reading at +3.0% y/y.

Here in the UK gilts outperformed after a big miss on April headline inflation (2.8% y/y vs 3.0% y/y expected). This was largely driven by weaker services inflation, which rose 3.2% y/y (vs 3.5% expected and down from 4.5% in March), though core CPI (2.5% y/y vs 2.6%) saw a more moderate downside miss. So combined with the global rally, that helped 10yr gilt yields to fall by -14.1bps to 4.99%, whilst the number of hikes priced in for the BoE in 2026 eased from 61bps to 47bps.

In overnight data, we’ve seen the first of the May flash PMI releases. The composite PMI declined in both Australia (from 50.4 to 47.8) and in Japan (from 52.2 to 51.1). Both manufacturing and services PMIs saw a deterioration, but it is services that led the decline, falling to 47.7 in Australia and a 14-month low of 50.0 in Japan. Meanwhile, Australia's unemployment rate unexpectedly rose from 4.3% to 4.5% in April, marking its highest level since November 2021. The amount of further RBA hikes priced by year-end has declined from 34bps to 25bps following the data. In contrast, Japan trade figures were unexpectedly resilient in April, with +14.8% year-on-year export growth (vs. +9.2% expected) driving the economy to a third consecutive monthly trade surplus at ¥302bn, significantly outperforming expectations for a marginal deficit.

Flash PMIs will remain in focus later today, with the Eurozone, Germany, France, UK and US releases due. Other US data today includes weekly initial jobless claims (our economists expect these to edge slightly lower to 209k from 211k), the May Philadelphia Fed manufacturing survey, as well as April housing starts and building permits. In the Eurozone, we’ll also have May consumer confidence and the March current account data. Central bank speakers today include the ECB’s Villeroy and BoE’s Taylor. Notable earnings include Walmart and Generali.

Tyler Durden Thu, 05/21/2026 - 07:38

Kremlin Blasts 'Borderline Crazy' Threat From Baltic NATO State

Russia has express outrage and condemnation of what it has on Wednesday denounced as a "borderline crazy threat" from NATO member Lithuania.

Lithuanian Foreign Minister Kestutis Budrys in an interview this week with Neue Zurcher Zeitung provocatively stated that NATO is capable of destroying all Russian bases located in Kaliningrad if necessary.

via MSC

"We have to show the Russians that we're capable of penetrating the small fortress they've built in Kaliningrad," he said of the Russian exclave. "NATO has the capability, if necessary, to raze Russian air defenses and missile bases there to the ground."

Russia's RT has published the Kremlin response as follows:

Recent threats directed at Russia’s Kaliningrad Region by Lithuanian Foreign Minister Kestutis Budrys are “borderline crazy” and reflect a “maniacal” hostility toward Russia among Lithuania’s leadership, Kremlin spokesman Dmitry Peskov has said.

“This anti-Russian sentiment makes them blind, prevents them from thinking about the future and from acting in the interests of their nations,” Peskov said, referring to political elites in all three Baltic states.

Later in the day, Russian Foreign Minister Sergey Lavrov echoed Peskov’s remarks, arguing that Western officials resort to such hostile rhetoric to assert their relevance. “But unlike the philosopher [Rene Descartes] who said ‘I think, therefore I am’ these people simply are,” the diplomat joked.

As for his other hawkish comments in the interview, the Lithuanian top diplomat strongly suggested the Ukraine war could spread deep into Europe, saying that should the frontline in Ukraine collapse, the consequences would be felt not only across NATO's eastern flank but throughout the entire European Union.

"The idea that a conflict with Moscow would only affect Russia's immediate neighbors is a dangerous misconception. It's part of Russian propaganda," Budrys said.

"If the frontline collapses, everything collapses - the EU, the economy, social order," he added. "There isn’t a single safe haven in Western Europe that would escape the consequences of war. We must finally quantify the cost of a lack of deterrence honestly."

Source: EuroNews

As a reminder, Kaliningrad is surrounded by Poland to the south and Lithuania to the north and east, which makes Moscow naturally alarmed whenever Polish or Lithuanian officials spew forth threats related to the exclave, which is Russian sovereign territory. However, Europe has also been fearful over the significant military assets and radar capability that Russia has stationed there.

Tyler Durden Thu, 05/21/2026 - 07:20