Zero Rss

Senate Parliamentarian Rejects White House Ballroom Funding In Reconciliation Bill

Authored by Joseph Lord via The Epoch Times,

The Senate’s nonpartisan referee has rejected a bid by Republicans to fund $1 billion for the White House ballroom expansion and other White House security upgrades.

According to Senate Parliamentarian Elizabeth MacDonough, the $1 billion proposal breaks the rules of the reconciliation process. As parliamentarian, MacDonough’s go-ahead is traditionally required to approve individual items passed under the partisan process.

Republicans are seeking to use the reconciliation process—which is not subject to the filibuster—to pass $72 billion in funding for Immigration and Customs Enforcement (ICE) and Customs and Border Protection, which has been blocked by Democrats in the wake of fatal shootings of U.S. citizens by immigration agents. The GOP bill would fund the agencies through 2029, the end of President Donald Trump’s second term.

Trump has long pushed for the addition of a major ballroom to the East Wing of the White House, particularly in the wake of an alleged assassination attempt while attending an event away from the executive mansion.

The Secret Service had requested the money after the incident at the White House Correspondents’ Association dinner last month.

Republicans had pursued including this funding in an immigration enforcement funding package.

According to Democrats, MacDonough’s ruling holds that funding for a project as large as the proposed White House expansion is too broad to be included in the filibuster-proof bill.

It’s unclear which, if any, segments of the GOP proposal can be included in the final funding bill.

The parliamentarian left the bulk of the bill’s immigration language intact, barring some minor provisions such as the one providing funding for Customs and Border Protection to hire, train, and pay agents. Republicans have indicated that these sections can be revised and retained in the legislation.

A model of the White House and proposed ballroom (R) is displayed during a ballroom fundraising dinner with President Donald Trump in the East Room of the White House on Oct. 15, 2025. Kevin Dietsch/Getty Images

Technically, Republicans can ignore MacDonough’s rulings, which are ultimately considered advisory; however, respect for the parliamentarian’s authority is so deeply embedded in the upper chamber’s culture that this rarely happens.

Ignoring or overriding a ruling on a budget reconciliation bill would set a precedent that could deeply weaken the filibuster, an eventuality that members of both parties have long wished to avoid.

In 2021, after the Senate parliamentarian rejected a bid by Democrats to include a $15 minimum wage in a reconciliation package, some Democrats called for the ruling to be overturned; however, these calls were ultimately rejected.

Senate Majority Leader John Thune (R-S.D.) speaks to members of the press in Washington on April 14, 2026. Madalina Kilroy/The Epoch Times

A spokesman for Senate Majority Leader John Thune (R-S.D.) wrote in a post on X that “none of this is abnormal” during the complicated budget process that Republicans are using to try to pass the immigration enforcement and White House security money on a partisan basis.

“Redraft. Refine. Resubmit,” Wrasse said in the post.

Senate Minority Leader Chuck Schumer (D-N.Y.) framed the ruling as a win for Democrats.

“Republicans tried to make taxpayers foot the bill for Trump’s billion-dollar ballroom. Senate Democrats fought back — and blew up their first attempt,” Schumer wrote in a May 17 post on X.

“Americans don’t want a ballroom. They don’t need a ballroom. And they sure as hell should not be forced to pay for one,” Schumer added, vowing that Democrats would continue to seek to block funding for the White House expansion.

Tyler Durden Mon, 05/18/2026 - 14:15

Judge Dismisses Musk's OpenAI Lawsuit After Jury Reaches Verdict

Update: Musk to appeal

*  *  * 

A nine-person federal jury has sided with OpenAI, Sam Altman, Greg Brockman, and Microsoft, determining that Elon Musk filed his high-profile lawsuit too late under the statute of limitations. The verdict effectively ends Musk’s claims that OpenAI abandoned its founding nonprofit mission to benefit humanity.

The jury unanimously concluded that Musk knew or should have known about OpenAI’s shift toward a for-profit model and major Microsoft partnerships years earlier - potentially as far back as 2019–2021, making his August 2024 filing untimely. U.S. District Judge Yvonne Gonzalez Rogers in turn accepted the advisory jury’s finding on this threshold issue and dismissed the case. 

Musk, a co-founder who contributed roughly $38–44 million in OpenAI’s early days, alleged that the company betrayed its original charitable trust by pursuing massive profits and commercial deals, particularly with Microsoft. He sought up to $150 billion in damages or “ill-gotten gains,” the removal of Altman and Brockman from leadership, and a restructuring to restore the nonprofit focus on safe, humanity-benefiting AI.

OpenAI countered that Musk was fully aware of the company’s evolving plans (including for-profit elements he himself had once advocated), waited until after launching his competing xAI venture in 2023, and was motivated by competitive rivalry rather than genuine concern for the mission. They described the suit as “sour grapes.”

Developing...

Tyler Durden Mon, 05/18/2026 - 13:38

Judge Tosses Key Evidence In Luigi Mangione Case Over Warrantless Backpack Search

A judge just handed Luigi Mangione some big wins in his high-profile murder case. On Monday, New York Supreme Court Justice Gregory Carro issued a mixed ruling on evidence seized during the suspect’s dramatic arrest at a Pennsylvania McDonald’s. The decision represents a partial victory for the defense on constitutional grounds while delivering a significant boost to prosecutors by preserving the most damning pieces of physical evidence linking Mangione to the assassination of UnitedHealthcare CEO Brian Thompson.

Mangione, 28, appeared in court for the hearing, dressed sharply as he has throughout proceedings. He has pleaded not guilty to second-degree murder and other charges in the Dec. 4, 2024, killing that shocked the nation and ignited fierce public debate over corporate greed in the American healthcare system.

The Arrest and the Evidence at Stake

The ruling stems from Mangione’s arrest on Dec. 9, 2024, in Altoona, Pennsylvania - roughly 280 miles from the Manhattan crime scene. Police responded to a tip after Mangione was recognized while eating breakfast. Officers approached him, and what followed became the focal point of lengthy suppression hearings held late last year.

During the initial encounter at the McDonald’s, officers conducted a warrantless search of Mangione’s backpack in a public setting, visible to restaurant employees and patrons. They discovered a loaded gun magazine wrapped in underwear and other items. The search was paused, and Mangione was taken to the Altoona police station, where a more formal inventory search occurred.

Justice Carro ruled that the initial McDonald’s search was improper - an unconstitutional warrantless intrusion because the backpack was not within Mangione’s immediate control or reach at the time. As a result, several items recovered during that phase are now suppressed and inadmissible in the state trial.

The Ditched Evidence Includes:

• Loaded handgun magazine
• Cellphone
• Passport
• Wallet
• Computer chip
• Certain initial statements made by Mangione to officers at the scene

However, the judge found the subsequent search at the police station valid, allowing prosecutors to use critical items recovered there.

Admissible Key Evidence:

• The alleged murder weapon: A 3D-printed “ghost gun” with a silencer, which ballistics reportedly match to shell casings found at the crime scene.
• A red notebook containing handwritten notes expressing deep frustration with the health insurance industry—often described in media as a “manifesto.”
• USB drive and related items from the station search.

This split decision mirrors similar outcomes in Mangione’s separate federal case and underscores the complexities of Fourth Amendment jurisprudence in high-stakes arrests.

The Crime That Captivated America

To understand the ruling’s weight, one must revisit the events of December 2024. On the morning of Dec. 4, Brian Thompson, 50, a father of two and CEO of UnitedHealthcare, was gunned down in cold blood outside the New York Hilton Midtown. He was heading to an investors’ conference when a masked assailant approached from behind and fired multiple shots. Thompson was struck in the back and leg; he died shortly after.

The killer fled on a bicycle, leaving behind shell casings engraved with the words “delay,” “deny,” and “depose” - phrases widely interpreted as a pointed critique of insurance industry practices that deny claims and delay care. Surveillance video, fingerprints, DNA, and other forensic links quickly pointed investigators toward Mangione, a 26-year-old University of Pennsylvania graduate from a well-to-do Maryland family with a background in engineering.

Mangione’s arrest five days later, with a fake ID and a backpack full of incriminating items, ended a intense manhunt. His Ivy League education, handsome appearance, and apparent grievances against corporate America turned him into an unlikely folk hero for some. Protests, “Free Luigi” chants, and online memes have accompanied the case from the start, reflecting broader societal anger over healthcare costs, claim denials, and corporate profiteering.

Legal Strategy and Implications

For the defense, led by prominent attorneys, the suppression motion was a cornerstone of their strategy. By challenging the backpack search, they hoped to dismantle much of the prosecution’s physical case. While they secured wins on peripheral items, the admission of the gun and notebook is a heavy blow. The notebook, in particular, could allow prosecutors to argue motive and premeditation before a jury.

Manhattan District Attorney Alvin Bragg’s office hailed the ruling as preserving justice for a “premeditated, targeted” killing. Bragg has emphasized that additional evidence - beyond the backpack - ties Mangione to the scene, including video footage, ballistics, and witness identifications.

Legal experts describe the outcome as a classic “partial win” scenario. Defense attorneys may appeal the admissible evidence or challenge statements under Miranda rules (the judge also addressed Huntley issues regarding voluntariness of statements). However, with the weapon and writings intact, the state’s case remains formidable.

The state trial is scheduled to begin September 8, 2026, in Manhattan Criminal Court. A separate federal case, charging stalking and other counts, carries potential life sentences but no death penalty following an earlier federal ruling. Mangione remains detained at the Metropolitan Detention Center in Brooklyn.

Tyler Durden Mon, 05/18/2026 - 13:30

The Lines We Thought Machines Wouldn't Cross

Authored by George Ford Smith via The Mises Institute,

In 2000, the world braced for Y2K. It came with a date and a remedy. There was panic about doomsday but as I and other programmers stretched the year field from two to four characters, apart from scattered hiccups, the lights stayed on. Everything about Y2K was known - the problem, the solution, and the deadline.

Q-Day is something else entirely.

Q-Day is shorthand for the moment when quantum computing crosses a line we assumed would hold—when the mathematics that secures modern life can be broken, and broken quickly. On Q-Day the locks will be quietly and rapidly picked. And the unsettling part is that the thief may already have your safe, waiting for the day the combination becomes trivial to compute.

Today’s encryption is a lock that would take an ordinary zeros-and-ones computer longer than the age of the universe—26.7 billion years—to pick. The most widely-used system—RSA with a 2,048-bit key—relies on the virtual impossibility of factoring “the product of two very large prime numbers.”

A sufficiently advanced quantum computer, however, would not try every possible combination. It would use a fundamentally different method—one discovered by MIT mathematician Peter Shor—to solve the problem efficiently. What is impossible today would become routine. The world’s assumption of security would no longer hold.

Data stolen today—bank records, corporate secrets, medical files, state communications—can be stored until the day it becomes readable, what analysts call “harvest now, decrypt later.” It gives today’s thieves a speculative claim on tomorrow’s knowledge. But, like all speculative claims, its value depends on time, uncertainty, and the actions of others. The longer the delay, the more likely the data is obsolete, replaced, or secured in a different manner or place.

There is no agreement about when Q-Day will likely arrive. “Google thinks it could happen by 2029, while Adi Shamir—one of the cryptography experts behind the development of RSA encryption—believes it’s at least 30 years away.”

Meanwhile, something else is headed our way:

The technological singularity, the point where artificial intelligence surpasses human intelligence and begins improving itself in an unstoppable loop, is most commonly predicted to arrive between 2035 and 2045. That window has been shrinking. A few years ago, most experts placed it decades away. Now, some of the most prominent voices in AI believe the precursor step, artificial general intelligence (AGI), could arrive before 2030.

Singularity futurists might be overlooking technical obstacles in their projections, such as the failure of intelligence to scale at the projected magnitude, but Q-Day’s arrival seems fairly certain. It brings into view several themes familiar to students of Austrian School economics.

First, the knowledge problem. As Hayek emphasized, the information required to coordinate complex systems is dispersed, qualitative, and often tacit. No central planner can know when Q-Day will arrive or which systems are most exposed in real time. Mandates that assume a timetable risk misallocating resources. By contrast, decentralized actors—banks, firms, developers—can respond to price signals, insurance costs, vendor competition, and evolving threat intelligence.

Second, incentives and time preference. Security spending is the classic case of a present cost for a future benefit. The payoff is the loss you never incur. In a world of quarterly reports and countless distractions, the temptation is to defer. Yet the nature of Q-Day flips the calculus: the cost of delay compounds because the exposure window is long and the fix is slow. Systems are not swapped overnight. Keys must be rotated, protocols updated, hardware replaced, staff retrained. The discipline required here is precisely what Austrian analysis highlights: aligning incentives so that long-term preservation of capital is not sacrificed to short-term appearance.

Third, capital structure. Information systems are capital goods with long lives and complex interdependencies. When firms procrastinate and then rush, investment bunches up under pressure—an IT version of malinvestment. By contrast, building crypto-agility—the ability to swap cryptographic components without tearing down the whole system—is a form of sound capital planning. It spreads costs over time and reduces the risk of a frantic, error-prone scramble later.

Fourth, property rights and trust. In a digital economy, encryption is not a luxury; it is part of the institutional framework that makes exchange possible. If signatures can be forged and identities spoofed, claims to ownership—of accounts, contracts, even money—are weakened. The invisible infrastructure of trust becomes visible precisely when it fails. Q-Day, if mishandled, would not merely be a technical glitch; it could turn the reliability of exchange itself into a disaster.

Fifth, competition. If a single, mandated solution fails, it fails system-wide. A free-market approach—multiple implementations, open standards, independent audits, competing vendors—reduces single points of failure and encourages faster discovery of weaknesses.

One more point. We often draw comfort from lines we believe machines will not cross, but occasionally those lines move. Q-Day is one such movement. It does not herald the end of privacy or the collapse of commerce, any more than Y2K heralded the end of computing. But it does force us to confront a truth Austrians have long emphasized: Complex orders endure not because they are guaranteed, but because they are maintained—by incentives, by institutions, and by continual adaptation to changing knowledge.

And, as long as we still have the power to act purposely, the singularity, if it comes about, will represent a higher level of human intelligence and human life generally. It will not be something we will passively accept. Cost-benefit considerations will always apply, as will our moral sense of what is right. As Ray Kurzweil has written,

Since AI is emerging from a deeply integrated economic infrastructure, it will reflect our values because in an important sense it will be us. We are already a human-machine civilization. Ultimately, the most important approach we can take to keep AI safe is to protect and improve on our human governance and social institutions.

And as I have argued elsewhere, our human governance institution is in need of radical revision.

Tyler Durden Mon, 05/18/2026 - 13:15

Buffett Cash Hoard: Why $397 Billion Sits On The Sidelines

Authored by Lance Roberts via RealInvestmentAdvice.com,

$397 billion. That’s how much “Buffett cash” now sits on Berkshire Hathaway’s balance sheet after Greg Abel’s first quarter as CEO. Warren Buffett left $373 billion behind when he stepped down at the end of 2025. Three months later, after Abel’s debut earnings report on Saturday, the hoard had grown by another $24 billion. The figure is bigger than the GDP of Hong Kong or Norway. It exceeds the market value of every American corporation except a tiny handful of mega-cap names. And it earned roughly four to five percent in Treasury bills while the S&P 500 ripped through three of its best consecutive years in modern history.

That Buffett cash hoard has also created a lot of speculation, innuendo, and assumptions, which is what I want to walk through in today’s discussion. Primarily, what that cash hoard actually represents, the popular theories explaining it, and what it really costs shareholders to hold.

The headline cash hoard number is striking on its own. Berkshire Hathaway ended Q1 2026 with a record $397.4 billion in cash and short-term Treasury bills, surpassing the prior $381.7 billion peak set in Q3 2025 and adding another $24 billion to what Buffett left behind. Of that, roughly $52 billion sits in plain cash and equivalents, with the bulk parked in Treasury bills earning short-term yields. By the time Abel released his first quarterly print on May 2, Berkshire was one of the largest holders of US Treasury debt in the world.

This wasn’t an accident. Between 2022 and 2024, Berkshire sold a net $172.93 billion in equities, with $134.1 billion of that coming in 2024 alone. Buffett trimmed his Apple position from nearly 50% of the equity portfolio down to roughly 22%. He cut Bank of America by more than half. Berkshire stopped repurchasing its own shares for nearly two years, sitting out twenty-one consecutive months as the stock traded above what Buffett considered its intrinsic value. Buybacks finally resumed under Abel on March 4, 2026, but only at $234 million in Q1, a token figure against a balance sheet of this size. In Q1 alone, Berkshire sold another $24.1 billion in equities against $16 billion in purchases, a net $8.1 billion reduction that pushed the cash pile to its new record.

The selling was deliberate, sustained, and almost entirely contrary to the prevailing market mood. While CNBC anchors debated whether the AI revolution was just getting started, the world’s most patient investor was quietly heading for the exits. Abel, in his first quarter, did exactly the same thing.

The History Of Buffett’s Cash Hoard

Berkshire’s cash position has always been countercyclical. When markets get cheap, the pile shrinks. When markets get expensive, it grows. That pattern has held for decades, but the magnitude in this cycle is unlike anything we’ve seen before.

In 2014, Berkshire’s cash and Treasury position hovered around $63 billion. By 2019, it had grown to $128 billion as bull market valuations stretched higher. The pandemic crash in early 2020 drew Buffett out for a brief window, when he deployed capital into Occidental Petroleum and Chevron. Those deployments barely dented the larger trend, and by the end of 2022, Buffett’s cash hoard had only modestly receded to roughly $109 billion despite the bear market that year.

Then came 2023 and 2024. As the S&P 500 ripped through gains of roughly 26 percent and 25 percent in consecutive years, Buffett didn’t chase. He sold. The cash hoard nearly doubled in 2024 alone, climbing from $168 billion to over $325 billion. By Q3 2025, it crested at $381.7 billion before a slight deployment trimmed it to $373.3 billion at year-end. Then in Abel’s first quarter at the helm, the hoard climbed to a fresh record of $397.4 billion as Berkshire kept selling, kept compounding T-bill yield, and continued to find few large-scale opportunities at acceptable prices.

The shape of that chart isn’t a coincidence. It’s the visual representation of a value investor’s discipline meeting a market that increasingly didn’t offer value. And the bar that matters most now is the one on the right: the discipline didn’t end with Buffett’s retirement.

Theory Versus Reality

The financial press has spent the past two years generating theories about Buffett’s cash position, and Saturday’s record Q1 print has reignited every one of them. Some are reasonable. Most miss the structural drivers entirely. Let’s separate the popular narratives from the actual mechanics.

Theory: Buffett Was Calling A Crash

This is the most viral interpretation. The Oracle of Omaha sees a bubble. He’s positioning Berkshire to scoop up bargains when the market collapses. The Buffett Indicator, which compares total US market capitalization to GDP, reached its highest level in history at the end of Q1 2026.

The math behind the indicator is straightforward. Take the total market value of all US publicly traded equities, divide by US nominal GDP, and you get a single ratio that Buffett himself called in a 2001 Fortune interview “probably the best single measure of where valuations stand at any given moment.” With Q1 2026 nominal GDP at $31.86 trillion (BEA advance estimate, released April 30, 2026) and total market capitalization near record highs, the ratio has surpassed every prior peak in the data series.

Two readings matter at this moment. The Federal Reserve’s broader corporate equities measure, divided by GDP, is roughly 232%, the highest level on record. The narrower Wilshire 5000 measure divided by GDP comes in at approximately 215%. Both versions are in record territory. Both are roughly two standard deviations above their long-term trend lines.

There’s some truth in the crash-call interpretation. Buffett has openly cited valuation discipline in his shareholder letters, and Abel echoed that language Saturday when he told shareholders Berkshire “can move it from insurance to non-insurance, into equities, or if we so choose, to hold it in cash.” But framing either of them as a market timer misreads the process. They don’t sell because they predict a crash. They sell because they can no longer find prices that justify the underlying business economics. Those are different statements that happen to look identical from the outside. The indicator above is consistent with the decision to stop buying. It’s not the same as a forecast that the market will fall next quarter.

Theory: Buffett Lost His Edge

The narrative that Buffett, at 95, simply couldn’t keep up with a bull market led by technology gained traction during 2023 and 2024. Berkshire trailed the S&P 500 in both years. Berkshire has now trailed the index by more than 30 percentage points since Buffett signaled his plan to step down last May. The Magnificent Seven were running, AI was the dominant story, and Berkshire’s portfolio looked stodgy by comparison.

However, I’ve heard this critique my entire career. It was wrong every previous time, and I’d argue it’s wrong now. Buffett’s framework is the same one he used in 1969, 1999, and 2007. The framework doesn’t fail. The market environments that cause its short-term underperformance are themselves brief and mean-reverting. And Abel’s decision to keep selling in his first quarter signals the framework isn’t going anywhere.

Reality: Berkshire Is Too Big For Its Own Process

Here’s the part that doesn’t make headlines but matters most. Berkshire’s market cap is now approaching $1 trillion. Buffett has said for years that “there remain only a handful of companies in this country capable of truly moving the needle at Berkshire.” When you need to put $50 billion or more to work in a single position to move the dial on a balance sheet that size, your universe of investable opportunities shrinks dramatically.

Add in the 20% takeover premium that Berkshire would have to pay to acquire any meaningful target, and the math gets brutal. A potential acquisition trading at 22x forward earnings quickly becomes 26x or 27x after the premium. That’s not a value investment, but rather a momentum trade dressed up in a board resolution.

Reality: Treasury Bills Were Paying You To Wait

The single most overlooked factor in this entire conversation is yield. From 2023 through most of 2025, short-term Treasury bills paid roughly 4-5%. That’s nothing. Berkshire generated about $8 billion in interest and other investment income in just the first three quarters of 2024, compared to $4.2 billion in the same period of 2023. Q1 2026 operating earnings just printed at $11.35 billion, up 18% year over year, with insurance underwriting profits up 28%. Net income more than doubled to $10.1 billion. The cash isn’t just sitting there. It’s compounding while it waits.

When cash itself produces a real return, the opportunity cost of waiting collapses. That’s a structural change from the 2010 to 2021 environment, when zero-rate cash was a guaranteed loss relative to any positive-return asset. The hoard wasn’t growing only because Buffett was selling and Abel kept selling; it had been compounding all along.

What The Cash Hoard Cost Shareholders

This is the part of the analysis no one wants to do, honestly. So let’s do it.

If we take the cash position averaged across 2023, 2024, and 2025, roughly $250 billion blended over the three years, and ask what that capital would have earned in the S&P 500 versus what it actually earned in Treasuries, we get a meaningful number. The S&P 500 returned approximately 26% in 2023, 25% in 2024, and 16% in 2025. Compounded against the average cash position, a hypothetical S&P 500 deployment would have produced roughly $155 billion in gains over the three years. The actual Treasury bill earnings on that cash came to about $34 billion. The forgone gain was approximately $125 billion.

That’s a real number. By any reasonable measure, holding that much cash during a sustained bull run costs Berkshire shareholders meaningful upside relative to a hypothetical fully invested alternative. The trailing 12 months tell the same story. Berkshire’s Class A shares have lagged the S&P 500 by a meaningful margin over the past year as the index has continued to grind higher, and Saturday’s earnings reaction was muted despite the operating beat.

Comparing Berkshire to the S&P 500 understates what a strict value framework actually missed during this cycle. The S&P is a blended benchmark. The basket Buffett genuinely sat out was the mega-cap growth complex. The cleanest investable proxy for that basket is the Vanguard Mega Cap Growth ETF (MGK), a fund built around the largest US growth names. It captures the Magnificent Seven and the broader leadership in AI names that drove the bulk of index returns from 2020 forward.

Looking at the ten-year price-return comparison anchors the cost differently. Over the period from May 2016 through April 2026, BRK.B delivered approximately 237% in cumulative price appreciation, while MGK returned roughly 398%. That’s a CAGR gap of about 4.5 percentage points per year, compounded across a full decade.

The chart above isn’t an indictment of Buffett, but rather a mirror. The companies that drove the spread, Nvidia, Microsoft, Apple at peak weighting, Alphabet, Meta, and Amazon, are precisely the ones Buffett either never owned in size or began trimming aggressively. The same discipline that has produced his long-term track record kept Berkshire underweight the very basket that won the decade. Whether that discipline is vindicated by an extended period of mean reversion or whether the mega-cap growth basket continues to compound at premium rates is the open question. The answer matters more for Abel’s first three years than almost any other variable he inherits.

Here’s where the analysis usually stops. It shouldn’t.

The calculation of the opportunity cost of Buffett’s cash assumes Berkshire could have deployed $397 billion into the S&P 500 at index returns. That’s a fantasy. Berkshire doesn’t allocate to index funds, even though Buffett often recommends that individual investors do. The mandate is to buy entire businesses or substantial equity stakes in great companies at fair prices. By 2024, those opportunities at Buffett’s required hurdle rate had effectively disappeared. Q1 2026 confirmed that Abel inherited the same problem.

The chart above isn’t an indictment of Buffett, but rather a mirror. The companies that drove the spread, Nvidia, Microsoft, Apple, at peak weighting, Alphabet, Meta, and Amazon, are precisely the ones Buffett either never owned in size or began trimming aggressively. The same discipline that has produced his long-term track record kept Berkshire underweight the very basket that won the decade. Whether that discipline is vindicated by an extended period of mean reversion or whether the mega-cap growth basket continues to compound at premium rates is the open question. The answer matters more for Abel’s first three years than almost any other variable he inherits.

Here’s where the analysis usually stops. It shouldn’t.

The calculation of the opportunity cost of Buffett’s cash assumes Berkshire could have deployed $397 billion into the S&P 500 at index returns. That’s a fantasy. Berkshire doesn’t allocate to index funds, even though Buffett often recommends that individual investors do. The mandate is to buy entire businesses or substantial equity stakes in great companies at fair prices. By 2024, those opportunities at Buffett’s required hurdle rate had effectively disappeared. Q1 2026 confirmed that Abel inherited the same problem.

The relevant counterfactual isn’t “S&P 500 returns minus Treasury yields.” The relevant counterfactual is what equities Berkshire could have actually bought, in the size it needed, at prices the team would defend in an annual letter. That set was very nearly empty in 2024. It remains nearly empty today.

There’s a second issue. Buffett’s actual track record requires you to measure performance over full cycles, not just the rising part of one. In 2022, when the S&P 500 fell 18%, Berkshire gained 4%. The cash looks like a drag in a bull market. However, it becomes the most valuable asset in the conglomerate’s portfolio when the cycle turns. Abel inherits that firepower at a moment of historically extreme valuations across the S&P 500. He used his first quarter to grow it rather than spend it. The full accounting will require seeing what he does with the dry powder over the next two to three years.

What This Means For Your Portfolio

If you’re managing your own money, the temptation is to map Buffett’s actions directly onto your situation. That’s a mistake. You’re not Berkshire or Warren Buffett. You don’t have a $1 trillion balance sheet, a 100+ year portfolio duration, and you don’t need to deploy $50 billion to move the needle. However, you can buy a $10,000 position in a great company without distorting the price of that company’s stock.

What you can take from this is more philosophical.

• Yes, valuation matters. The S&P 500 entered 2026 at one of the most expensive starting points in history, with a CAPE ratio above 40 and a forward P/E that historically correlates with poor 10-year forward returns. Buffett’s cash position was a market signal even if it wasn’t a market call.

• Sequence-of-returns risk is also real, especially for retirees or those approaching retirement. A market correction in the early years of retirement does permanent damage to a portfolio that a 30-year-old can absorb without consequence. Building a cash buffer when valuations are extreme is sound risk management, not market timing.

• And finally, discipline beats fear of missing out. Every cycle produces a chorus of voices arguing that valuation no longer matters because of some structural innovation. In 1999, it was the internet. In 2007, it was the new financial alchemy of structured credit. In 2024, it was AI. The names change. The discipline that protects capital across cycles does not.

Regardless of where you align, the next two years will tell us whether the $397 billion cash hoard was the most prescient capital allocation decision of the cycle, or whether Abel will eventually validate the critics by paying up for assets Buffett refused to chase. His first quarter answered the immediate question. He kept selling, kept the discipline, and he let the cash hoard grow. I have my view on what comes next. The data, the discipline, and the sixty years of history all point in the same direction.

But I’ve been wrong before, and so has Buffett. We’ll find out together.

Tyler Durden Mon, 05/18/2026 - 12:40

Iran Counter-Blockade Bites As No Tankers Load At Kharg For 10th Day

Earlier today, in response to news that the number of tankers anchored at Iran's Kharg Island oil terminal had hit a post-blockade peak, we wondered if this means that Iran is running out of tankers to store oil, i.e., Trump' blockade of the blockade is working. In any case, it certainly means that Iran is no longer able to sell any of the oil, depriving it of much needed oil export revenues which it has found itself forced to shut in as there is no open downstream path for the product.

Tanker Tally at Iran’s Kharg Island Hits Post-Blockade Peak: BBG

Running out of tankers to store oil.

— zerohedge (@zerohedge) May 18, 2026

A few hours later, Bloomberg echoed question, writing that Iran’s main oil export facility in the Persian Gulf stayed devoid of tankers for at least a 10th day, underscoring the growing strain on Tehran from a US naval blockade.

Using Sentinel satellite data of Kharg Islan, Bloomberg found that since May 8, no loadings of large ocean-going tankers are visible at the facility’s crude-export berths. 

Oil tankers anchored near Iran’s Kharg Island oil terminal on May 16, 2026. Red circles are very large crude carriers

The counter blockade is depriving Tehran of critical petroleum revenue and the market of millions of barrels of supply. Prior to the US blockade, Iran was by far the largest - if not only - country exporting its crude because the Islamic Republic had blocked other countries’ ships from using the strait.

With no loaded tankers departing Kharg even as oil keeps arriving at the country's largest oil terminal, it remains unclear how much of a factor lack of spare capacity has become as Trump hopes to cripple Iran's oil production with lenghty shut-ins. Bloomberg' Julian Lee writes that it’s hard to say the speed at which Kharg' remaining capacity might fill given that Iran has curbed its output in response to the American blockade.

One possibility is that it’s cheaper for Tehran to use on-land facilities rather than filling ships, something that might help to explain the absence of loadings and a simultaneous buildup of tankers in nearby anchorage areas.

Here, Bloomberg's other energy analyst Javier Blas chimes in, and notes that Iran is still loading crude into tankers (although not in Kharg Island). Instead, it's loading a tanker at Jask, an alternative terminal outside the Strait of Hormuz. But since it is inside the US Navy blockade line, those tankers are likely only being used for storage purposes. 

An image on Monday from the European Union’s Sentinel 1 satellite, examined by Bloomberg, shows a ship moored at Jask’s loading buoy. A separate image from the Sentinel 2 orbiter from Sunday shows an Aframax-sized vessel heading toward the mooring.

Iran is still loading crude into tankers -- although (not right now) in Kharg Island. Instead, it's loading a tanker at Jask, an alternative terminal outside the Strait of Hormuz (but inside the US Navy blockade line).

Left May 17 🛰️Sentinel-2; right, May 18 🛰️Sentinel-1 pic.twitter.com/iU2o6YXAmD

— Javier Blas (@JavierBlas) May 18, 2026

Vessel-tracking data compiled by Bloomberg identify the tanker as the Vernon, a ship that has been sanctioned by the US for its involvement in Iran’s oil trade. It remains to be seen if the ship will attempt to get through the American cordon.

There were no telephone or email contact details for the Panama-based company listed as the ship’s beneficial owner and manager on the Equasis maritime database, while emails to the ISM manager, based in Hong Kong, were returned as undeliverable

While Tehran appears to have shifted its primary loading terminal from Kharg to Jask, loading at Jask remains uncommon. The port has seen only nine carriers filled since the terminal was officially opened in 2021. Of those, five have taken place since the war began at the end of February.

Up to Friday, the US Navy had redirected 75 Iran-linked commercial vessels and disabled a further four since it imposed its blockade on April 13, US Central Command said in posts on X last week.

Tyler Durden Mon, 05/18/2026 - 12:20

Russian Drone Hits Chinese Ship In Black Sea, Less Than 24-Hours Before Xi-Putin Summit

Just 24 hours before Presidents Vladimir Putin and Xi Jinping are set to meet for their planned summit in Beijing, soon on the heels of Trump's visit, and a geopolitical wrench may have just been thrown into the works.

According to Ukrainian President Volodymyr Zelensky, Russian forces have attacked a Chinese ship heading toward a Ukrainian port - a provocative move that threatens to seriously anger Beijing at the worst possible diplomatic moment.

via Ukraine Navy

Early Monday morning, a Russian drone reportedly struck the KSL Deyang, a vessel flying under the Marshall Islands flag, just off the coast of Ukraine, Reuters also confirms.

The ship was reportedly empty at the time while en route to Ukraine's Pivdennyi port in the Odesa region to load up on iron ore concentrate.

A fire was observed on board, but it was quickly brought under control and extinguished, with the vessel escaping severe damage. 

The Ukrainian government is alleging this wasn't some kind of accidental fog-of-war blunder, with President Zelensky immediately calling out Moscow:

“Drones struck Odesa ... and one of the UAVs hit a vessel owned by China. The Russians could not have been unaware of what vessel was at sea,” Zelensky said.

A Ukrainian navy spokesman told AFP that none of the crew members, all Chinese nationals, were injured. He added that the vessel continued on its journey.

“The ship was entering for loading. After it was hit at night by a Shahed, the crew coped with the consequences on their own. Fortunately, no one was injured, and the vessel continued on its way to its port of destination,” navy spokesman Dmytro Pletenchuk said.

The incident went down just after on Sunday Xi and Putin had just exchanged "congratulatory letters" to set the stage for Putin's upcoming arrival in Beijing. 

The China-owned vessel wasn't the only ship attacked within that span of time. According to The Independent:

Russia attacked a Panama-flagged civilian vessel heading to Ukraine's Chornomorsk port in the southern Odesa region on the Black Sea early on Monday, the regional governor said.

It is one of several ships destined for Ukrainian ports that have been struck by Russian forces in the past day.

The vessel was damaged in the attack, which caused a fire, Governor Oleh Kiper said on the Telegram messaging app, adding that no one had been injured in the incident and that the crew had extinguished the fire. The vessel has continued on its way, the governor added.

TradeWinds is also suggesting a third ship was struck, but few details have been given. Black Sea transit continues to be a dangerous prospect, also with naval mines long being a feature of the 4+ year long war.

Tyler Durden Mon, 05/18/2026 - 12:00

DoJ Establishes "Anti-Weaponization" Fund After Trump Drops $10 Billion Lawsuit Against IRS

Update (1130ET): The DOJ announces that as a part of the settlement agreement in President Donald Trump v. the IRS, the Attorney General established “The Anti-Weaponization Fund” to provide a systematic process to hear and redress claims of others who suffered weaponization and lawfare.

“The machinery of government should never be weaponized against any American, and it is this Department’s intention to make right the wrongs that were previously done while ensuring this never happens again,” said Acting Attorney General Todd Blanche. “As part of this settlement, we are setting up a lawful process for victims of lawfare and weaponization to be heard and seek redress.”

“The use of government power to target individuals or entities for improper and unlawful political, personal, or ideological reasons should not be tolerated by any Administration,” said Principal Associate Deputy Attorney General Trent McCotter. 

Bloomberg reports that the fund will receive $1.776 billion and will come from the judgment fund, which is a perpetual appropriation allowing DOJ to settle and pay cases.

The fund will have the power to issue formal apologies and monetary relief owed to claimants.

The Fund will consist of a Commission of five members appointed by the Attorney General. One Member will be chosen in consultation with congressional leadership. The President can remove any member, but a replacement must be chosen the same way as the replaced member was selected.

*  *  *

As Tom Ozimek detailed earlier via The Epoch Times, President Trump’s attorneys on Monday filed a court notice voluntarily dismissing his $10 billion lawsuit against the IRS and the U.S. Treasury Department, in a case that accused the agencies of failing to prevent a former contractor from leaking Trump’s tax returns to the media.

No reason was stated in the May 18 motion, which asks the court to dismiss the case with prejudice, meaning Trump and the other plaintiffs cannot bring the same claims again in the future. A court filing in April indicated that talks were underway to settle the case, with the parties stating at the time that discussions were taking place “productively to avoid protracted ligitation.”

Monday’s filing said the IRS and Treasury Department had neither filed an answer nor moved for summary judgment, allowing the plaintiffs to dismiss the action unilaterally without requiring court approval or government consent.

Trump, along with two ​of his sons and the Trump ⁠family business, sued the IRS ​and the Treasury Department in January, accusing both agencies of failing to take mandatory precautions to prevent former IRS contractor Charles “Chaz” Littlejohn from illegally obtaining access to their tax records and disclosing that information to The New York Times and ProPublica.

The lawsuit alleged that Littlejohn had “staff-like access” to confidential tax return information and exploited weaknesses in IRS safeguards to obtain and leak the records between 2019 and 2020.

Lawsuit Details

The lawsuit, filed in the U.S. District Court for the Southern District of Florida, sought at least $10 billion in damages and accused the IRS and THE Treasury of violating federal privacy laws governing taxpayer information.

Trump brought the suit in his personal capacity, while Donald Trump Jr., Eric Trump, and the Trump Organization were also named as plaintiffs.

Littlejohn, who at the time was employed by defense contractor Booz Allen Hamilton, was accused of having improperly accessed and disclosed tax information related to Trump and affiliated entities, including business holdings.

The plaintiffs claimed Littlejohn’s actions caused “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other plaintiffs’ public standing.”

The lawsuit argued that IRS and Treasury safeguards were so inadequate that the agency took roughly 3 years to detect the breach.

“Defendants had a duty to safeguard and protect Plaintiffs’ confidential tax returns and related tax return information from such unauthorized inspection and public disclosure,” the complaint alleged, pointing to the need for the agencies to have in place appropriate technical, employee screening, and monitoring systems to prevent Littlejohn’s actions.

“Defendants failed to take such mandatory precautions.”

Littlejohn pleaded guilty in October 2023 to one count of unauthorized disclosure of tax return information.

Prosecutors said he used broad search parameters to conceal his activities, uploaded stolen data to a private website to avoid IRS monitoring systems, and stored records on personal devices before providing them to media outlets.

In January 2024, U.S. District Judge Ana Reyes sentenced Littlejohn to five years in prison, the maximum sentence permitted under the statute. Reyes described the breach as the “biggest heist” in IRS history.

“It cannot be open season on our elected officials,” Reyes said, noting that Littlejohn purposefully sought his job at least in part to obtain and leak tax information.

Before Monday’s voluntary dismissal, the case had appeared to be moving toward a possible resolution in recent weeks.

In an April 17 filing, attorneys for Trump and the Justice Department jointly requested a 90-day pause in proceedings to allow settlement negotiations to continue.

The IRS and THE Treasury Department did not immediately respond to requests for comment on the dismissal filing.

Tyler Durden Mon, 05/18/2026 - 11:40

Cuban Foreign Minister Says US Is Building 'Fraudulent Case' For Military Action

Authored by Chris Summers via The Epoch Times (emphasis ours),

Cuban Foreign Minister Bruno Rodríguez on May 17 said the United States is building a “fraudulent case” ​to justify economic war and eventual military intervention against the Caribbean island nation.

Cuban troops participate in a military parade in honor of former Cuban leader Fidel Castro at Revolution Square in Havana on Jan. 2, 2017. Yamil Lage/AFP via Getty Images

His comments were a direct response to a report by Axios, which cited classified U.S. intelligence reports saying Cuba had obtained more than 300 military drones and had discussed using them against the U.S. military base at Guantanamo Bay, which is at the eastern end of the island. The Epoch Times is unable to verify the Axios report.

“Without any legitimate excuse, the #US government is building, day after day, a fraudulent case to justify a ruthless economic war against the Cuban people and eventual military aggression,” Rodriguez said in a post on X. “Specific media outlets are playing along, promoting slander and leaking insinuations from the U.S. government itself.”

The minister did not specifically mention the Axios report about military drones, and he did not formally deny that Cuba possessed such weapons, which have been used by both Russia and Iran, and Tehran’s proxies, in conflicts in recent years.

“Cuba does not threaten or desire war,” Rodriguez added. “It defends peace and is willing and preparing to confront external aggression in exercise of the right to legitimate self-defense recognized by the UN Charter.”

In a May 18 email to The Epoch Times, a U.S. State Department spokesperson said the U.S. president will always act “to protect Americans, our interests and our homeland from any threat.”

“President Trump ... has taken historic action to rid our backyard of uncontrolled migration, dangerous narco trafficking, organized crime, and hostile foreign military presence,” the department said.

“Cuba, a failed Communist state which has long hosted hostile foreign military, intelligence and terror groups, presents a significant threat to our national security that President Trump will not allow to devolve into a greater crisis to the safety and security of Americans.”

In a May 17 post on X, Monroe County Sheriff’s office, which covers the Florida Keys, said, “Monroe County Sheriff Rick Ramsay has not been contacted by any federal or state authorities regarding news reports Sunday of any possible military action taken by Cuba against the U.S. military base in Cuba at Guantanamo Bay using drones.”

The post quoted Ramsay as saying he did not believe there was any reason to be concerned.

“I am confident I will be notified if anything does change and I will alert the public,” Ramsay added.

The Cuban ambassador to the United Nations, Ernesto Soberón, said in a May 17 post on X that the people of Cuba “stand ready to defend their territory, their sovereignty, and their independence.”

“Cuba would never initiate an attack on any country, let alone the United States,” Eva Golinger, an attorney and writer based in New York, said in a May 17 post on X. “They do, however, have the right to self defense under international law, as all countries do, if they are attacked.”

U.S. President Donald Trump has previously said Cuba persecutes and tortures political opponents, provides a safe haven for terrorist groups such as Hezbollah and Hamas, and constitutes an “extraordinary threat to U.S. national security and foreign policy.”

Last week, Cuba said it poses no threat to U.S. national security and that there are no legitimate grounds for it to remain on the list of state sponsors of terrorism.

CIA Director John Ratcliffe and other officials visited Cuba on May 14, at the invitation of the communist regime in Havana. At the time, the U.S. Embassy in Cuba referred The Epoch Times to the White House for comment, which in turn referred it to the CIA. The CIA didn’t respond to an email seeking comment on that meeting.

Fuel Crisis

Cuban Energy and Mines Minister Vicente de la O Levy said on May 13 that the country has completely run out of diesel and heavy fuel oil, and its power grid has entered a critical state.

O Levy said Cuba had not received any oil imports since December, until Russia sent 100,000 tons (about 700,000 barrels) of crude last month.

Trump said on Truth Social last week that Cuba was asking for help and that the two countries were going to talk.

Newly erected holding tents for detained migrants at the U.S. Naval Station in Guantanamo Bay, Cuba, on Feb. 21, 2025. U.S. Navy/AFN Guantanamo Bay Public Affairs via Reuters

The regime in Cuba was founded in 1959 after rebels led by Fidel Castro ousted U.S.-backed leader Fulgencio Batista. Under Castro’s leadership, the regime moved toward Marxism-Leninism and consolidated one-party communist rule in the years that followed. Cuba was closely allied with the Soviet Union until the bloc’s collapse in the early 1990s.

Cuba was heavily reliant on Venezuelan oil, supplied by former Venezuelan leader Nicolás Maduro’s socialist regime, but that supply was stopped after he was ousted in January and replaced by interim leader Delcy Rodríguez.

Mexico also stopped sending oil, under pressure from the United States.

A watch tower at Camp X-Ray, which was the first detention facility to hold what the U.S. government described as "enemy combatants," at the U.S. Naval Station in Guantanamo Bay, Cuba, on June 27, 2013. Joe Raedle/Getty Images

The U.S. State Department said in a May 13 post on X that it “is publicly restating the United States’ generous offer to provide additional direct humanitarian assistance to the Cuban people.”

“The Cuban regime must decide whether to accept our offer or deny life-saving help for the Cuban people, who desperately need it,” the State Department said.

Tyler Durden Mon, 05/18/2026 - 11:20

"Scale Matters": NextEra, Dominion To Merge In Utility Megadeal Aimed At Grid Expansion To Power AI Boom

As power demand surges on the back of data-center buildouts, with hyperscalers expected to unleash about $700 billion in capex this year to expand AI infrastructure and maintain an edge over China in the AI compute race, NextEra Energy and Dominion Energy are moving to scale up. The utilities agreed to a $67 billion all-stock merger that would create the world's largest regulated electric utility network.

Dominion shareholders will receive .8138 NextEra shares for each Dominion share, leaving NextEra investors with about 74.5% of the combined company and Dominion holders with 25.5%. The merged utility would be more than 80% regulated, serve 10 million customer accounts, and control about 110 gigawatts of generation capacity across the U.S. East Coast, from Florida to a cluster of data centers in Northern Virginia.

NextEra positioned the merger with Dominion as a way to quickly scale power grids along the East Coast while lowering power bills, as the era of AI data center buildouts only begins to accelerate: 

With growth drivers evenly balanced between regulated and long-term contracted businesses and more than 130 GW of large-load opportunities in its pipeline, the combined company will have a broader opportunity set, more ways to grow and the scale, balance sheet and best-in-class operating, supply chain, construction and technology capabilities to deliver the generation, transmission and grid investments needed to serve customers, support economic growth and cost-effectively meet surging power demand while keeping bills affordable.

"The transaction is structured as a 100% stock-for-stock transaction and is expected to be tax-free to shareholders. The combined company will operate under the NextEra Energy name and trade on the New York Stock Exchange under the ticker symbol NEE," NextEra wrote in the press release.

NextEra CEO John Ketchum said the merger is a "historic moment" and comes as "electricity demand is rising faster than it has in decades."

Ketchum continued:

We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever— not for the sake of size, but because scale translates into capital and operating efficiencies. It enables us to buy, build, finance and operate more efficiently, which translates into more affordable electricity for our customers in the long run.

The way the merger is framed appears aimed at federal regulators, who have seen growing resistance to data centers at the local level amid soaring power bills. It is worth noting that on some grids, especially in the Mid-Atlantic, backfiring green policies have collided with data-center buildouts and surging demand, sending power prices sky-high.

This earnings season was an eye-opener, as we noted that hyperscalers will deploy $700 billion in capex this year to support AI infrastructure.

In markets, shares of Dominion Energy soared 15%, while shares of NextEra remained flat.

Evercore ISI analyst Nicholas Amicucci noted that the merger will "likely face a significant amount of regulatory scrutiny."

The way the merger is framed, as a means of scaling grids and supporting data-center buildouts while pitching affordable household power prices, is music to the ears of federal regulators.

Tyler Durden Mon, 05/18/2026 - 10:45

"Shockingly Bad" Chinese Econ Data Stuns Wall Street, Sparks Hard Landing Concerns

Confirming our Sunday preview, overnight China reported growth data which slowed across the board in April with investment resuming declines, retail sales missing sales and growing at the weakest rate in 4 years while industrial production rose at the slowest pace in three years, calling into question Beijing's reluctance to add stimulus to the economy as a global energy crisis hits factories and consumers across the world.

China's Monday data dump of official data on Monday painted a picture of an economy where booming exports no longer offset deteriorating consumption at home, prompting analysts at banks including Nomura and SocGen to urge bolder measures in support of growth.

As shown in the chart below, fixed-asset investment unexpectedly shrank 1.6% in the first four months of 2026 from a year earlier, while industrial production grew just 4.1% last month, the weakest in almost three years. Retail sales also missed forecasts and rose just 0.2% in April, the worst reading since they contracted in December 2022, when China reopened from Covid.

What is shocking is that it is common knowledge that Beijing traditionally massages its economic data to present itself in the rosiest possible light: the fact that it allowed data this ugly would suggest that the picture on the ground is much uglier. 

Goldman's Delta One head Rich Privorotsky captured this sentiment well, writing this morning that "overnight news from China showed economic data materially below expectations. Industrial production, retail sales and fixed asset investment all missed meaningfully. It’s hard to tell whether this reflects genuine demand destruction but perhaps it helps explain how the oil market has managed to balance despite ongoing supply concerns. I genuinely can’t remember a period when Chinese data, which tends to be heavily massaged, missed by anything close to this magnitude. Negative read through for consumption related categories."

Remarkably, not a single economist surveyed by Bloomberg had predicted as pessimistic a reading for industry, retail sales and investment. The disappointing performance of the world’s second-biggest economy last month is a reminder of its domestic vulnerabilities, after a global artificial intelligence investment boom sent trade soaring.

The breadth of the acute slowdown in April has put the prospect of a more aggressive stimulus back on the agenda after China stood out in its resilience to the fallout from the Iran war. The government pulled back on fiscal spending in March, while the central bank has steered clear of even hinting at any further loosening in policy, amid ample market liquidity and weak demand for credit. 

Fu Linghui, spokesman for the National Bureau of Statistics, described the deterioration of economic indicators as “a normal fluctuation from month to month.” But he also highlighted challenges such as a persistent imbalance between supply and demand as well as a complex global environment.

Investment plunged by around 8% in April from a year earlier, according to estimates from Goldman Sachs and Capital Economics, returning to a similar pace of decline seen in the second half of 2025. Manufacturing and infrastructure investment both weakened, while private investment plummeted

In response to the dismal data, Nomura economists wrote that authorities “might need to step up policy support for stabilizing growth,” adding that “Beijing has no room for complacency.”

A rising number of economists has been forecasting the People’s Bank of China won’t lower interest rates this year after the oil shock pushed up inflation expectations, though many still expect a cut to lenders’ reserve requirement ratio. The PBOC last lowered the policy rate and the RRR at the peak of the trade tensions with the US a year ago. 

Authorities are still likely to take a patient approach and avoid rushing out response to just one month of data. The Communist Party’s decision-making Politburo will convene in July to review economic growth and policies, making it the next potential window for any adjustment in stimulus. 

“The stance still seems to be to play cautiously,” said Jing Liu, chief economist for Greater China at HSBC in an interview on Bloomberg TV. “Our base case is no extra stimulus for the economy for the time being.”

Even though many manufacturers are struggling to cope with higher raw material costs, overall exports soared as Chinese tech products found willing buyers abroad. Greater demand for green energy products is also benefiting China. But a sustained weakening of investment and consumption at home could still bring risks to Beijing’s goal of achieving 4.5% to 5% artificial growth this year.

The April data suggest gross domestic product may expand as little as 4.1% on-year in the second quarter, which could prompt incremental policy easing, according to Macquarie Group Ltd. For now, Goldman is maintaining its forecast for a GDP gain of 4.7% in April-June, compared with 5% in the first three months of the year.

The data “should keep PBOC easing – RRR and even rate cuts – firmly on the table, while fiscal top-up may come later,” SocGen's head China economist Wei Yao wrote in a note.

The plunging manufacturing data comes at a time of continued dismal credit demand and heavy rainfall in southern China, which could be behind the sharp fall in capital spending, Goldman economist Lisheng Wang said in a note (available to pro subs here).

Statistical adjustment is another potential factor. Many economists believe authorities took measures to correct over-reporting of the data in late 2025. Such a change may have exaggerated the volatility of the figures recently, as the on-year contraction in steel and cement output narrowed in April, according to Goldman Sachs. 

The consumer economy has meanwhile continued to struggle as households spent less on items as varied as autos and furniture. Car sales plunged 15% in April from a year earlier, the worst contraction since mid-2022, when the country was under Covid restrictions. The government has scaled back subsidies for electric vehicle purchases this year, while the Iran oil shock hurt sales of gasoline-powered cars. 

Purchases of home appliances and furniture — products that used to be buoyed by government subsidies — declined at a double-digit pace. Gold, silver and jewelry sales plummeted 21% — a huge reversal from earlier this year and 2025, when soaring prices for precious metals led to a speculative investment frenzy.

The industrial sector is also getting more lopsided as export-driven sectors lead the growth while industries that relied on domestic sales lagged. The production of electronics, lifted by soaring global demand for AI chips, expanded 15.6% in April, the fastest pace in two years.

The auto industry also expanded briskly at 9.2%, as overseas EV sales took off. Meanwhile, commodities linked to real estate and construction — such as cement, glass and steel — recorded declines, while crude oil processing volume fell, which ING Bank economist Lynn Song attributed to the war’s impact

Soaring chip prices may partly explain why factory output weakened even as exports surged.  While industrial production is reported after an adjustment made for inflation, sales abroad are calculated in nominal terms, making it hard to separate movements in prices versus volumes. Surging costs of chips and electronics accounted for about half of April’s 14% headline export growth, according to Nomura. 

“China still looks like a two-speed economy: strong in strategic manufacturing and exports, but weak where household confidence matters most,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “The concern is not just that activity missed, but that the weakness is broadening across the domestic side of the economy.”

There is one silver lining when it comes to the Chinese economy: exports are expected to remain strong after climbing 15% in the first four months from a year ago. Stabilizing trade ties with the US, reinforced by President Donald Trump’s visit to Beijing, further bolster the outlook.

But a turnaround is nowhere in sight for domestic consumption. Chinese households net repaid the most loans in April since comparable data going back to 2010.

“Policy space remains ample,” said Hao Zhou, chief economist at Guotai Junan International Holdings. “The April data are less a sign of deterioration than a trigger for more proactive easing — which should help anchor growth and support a gradual recovery into the second half of the year.”

Tyler Durden Mon, 05/18/2026 - 10:30

Ukraine's Odesa Heavily Attacked In 'Retaliation' For Deadly Drone Raids On Moscow

The Russian Defense Ministry (MoD) announced Monday that its forces executed a massive missile and drone barrage across Ukraine, which is clearly the expected big retaliatory response following Ukraine's large-scale drone wave attack on Moscow over the weekend.

Kremlin officials specifically described the new assault as indeed direct retaliation for "terrorist attacks" carried out by Kiev, which killed at least three in the Russian capital, injured dozens, hit a refinery, and unleashed havoc and fear among the population. The MoD said it targeted military and defense industrial sites, but Ukraine's account differed.

Ukrainian forces had deployed at least 130 UAVs during the capital-bound raid, and damaged a major regional airport. Large fires were spotted near major roadways, sometimes in the heart of busy city areas.

Russia's nighttime into early Monday retaliation has been expectedly fierce, as overnight it specifically targeted Odesa and Dnipro, leaving at least one person dead and over 30 injured. In the port city of Odesa, the drone strikes damaged residential buildings, a school, and a kindergarten, according to Ukrainian officials.

Prior illustrative image: via NBC

Ukrainian media chronicled some of the following:

• On Sunday, Russia carried out a combined overnight attack on the city of Dnipro, striking a residential area, sparking multiple fires, and causing casualties.
• According to the Ukrainian Air Force, Russian forces began launching drones toward Dnipro at approximately 8 p.m.
• On Monday, May 18, at 2:32 a.m., Ukraine was under threat of ballistic missile strikes. Shortly afterward, missiles were detected heading toward Dnipro, including both ballistic and cruise missiles.
• According to local authorities, Russian drones struck three residential buildings in Odesa’s Kyivskyi and Prymorskyi districts.
• One of the buildings, a single-story house in the Prymorskyi district, was completely destroyed. Other buildings sustained damage to facades, roofs, and windows. Several fires broke out but were quickly extinguished.

But Ukraine's cross-border drones have also continued unabated, as two people were killed and two more were injured following a a Monday UAV attack on Russia's southern Belgorod region, local authorities said. Belgorod has come under regular attack since near the start of the war, given its southern-most location, close to the front-lines to the south in Ukraine.

Meanwhile, Kremlin announced Monday that Moscow anticipates an eventual resumption of the Russia-Ukraine peace process, though it noted that negotiations are currently paused.

Kremlin spokesman Dmitry Peskov made the statement in response to comments from President Trump, who on Friday suggested that a Russian missile strike hitting a Kiev residential building had delayed progress toward ending the four-year conflict.

Per the Associated Press, "The death toll from a Russian missile attack that flattened a Kyiv apartment building rose Friday to 24, including three teenagers, Ukrainian President Volodymyr Zelenskyy said as he led the mourning for one of the deadliest attacks on the capital in the 4-year-old war."

Цієї ночі росія атакувала #Одесу безпілотниками: є постраждалі

Внаслідок влучання виникла пожежі та руйнування в житлових будинках. Попередньо 2 постраждалих, з них - дитина. Пожежі ліквідовані.

Від ДСНС залучалися понад 80 рятувальників pic.twitter.com/hFM1dSqyei

— DSNS.GOV.UA (@SESU_UA) May 18, 2026

"The cruise missile hit the nine-story corner apartment block Thursday during what the Ukrainian air force said was Russia's biggest barrage on the country of the full-scale invasion. Emergency workers finished digging through the rubble searching for victims after more than a day, Zelenskyy said on X," the report adds.

But in response, Peskov emphasized that focus should also be directed toward persistent Ukrainian strikes targeting civilian infrastructure inside Russia. 

Tyler Durden Mon, 05/18/2026 - 10:10

Cars Are Fast Becoming Dystopian Prison Pods...

Authored by Steve Watson via Modernity.news,

The surveillance state has found its newest frontier: your car’s dashboard. What used to be a symbol of American freedom and independence is rapidly morphing into a high-tech cage that watches your every move and can override your decisions at will.

In a widely shared post on X, users detailed complaints pouring in about Subaru’s upgraded AI ‘EyeSight’ system now featured on the latest models. 

Drivers report the system pouncing on brief glances away from the road – while Biden-era federal mandates prepare to make this level of surveillance mandatory in every new vehicle by 2027.

Subaru has released a new “EyeSight system” on their new vehicles

Drivers who bought the cars are saying if you glance off the road for a second to look at the mountains, or change a song, the vehicle starts alerting

It will also stop the car by using its ‘Emergency Stop Assist… pic.twitter.com/o0uAgLm58r

— Wall Street Apes (@WallStreetApes) May 16, 2026

As the video highlights, even a momentary glance to change a song or take in the scenery triggers relentless alerts. The technology doesn’t stop there. 

Its new Emergency Stop Assist with Safe Lane Selection feature can detect what it calls an “unresponsive” driver, issue escalating warnings through sounds and steering wheel vibrations, and then take full control: automatically braking, slowing the vehicle, steering it to the shoulder, and activating hazard lights.

This isn’t some optional gimmick. It’s being rolled out as standard “safety” tech, but drivers are calling it exactly what it feels like – an overbearing electronic babysitter that treats competent adults like distracted children. 

It serves as a chilling preview of where the entire auto industry is headed under government pressure.

This kind of intrusive monitoring is precisely the tool a police state would dream of to exert total control over personal movement. If authorities gain deeper integration with these systems, they could effectively decide when, where, and if you get to drive at all.

The Subaru rollout is just the latest flashpoint in a broader push toward vehicle surveillance that goes far beyond basic safety. A federal mandate buried in the 2021 Infrastructure Investment and Jobs Act requires all new passenger vehicles sold in the U.S. to include advanced impaired-driving prevention technology starting with 2027 models. 

As detailed in reporting from the New York Post, this means infrared cameras and sensors constantly monitoring eyes, faces, head position, and behavior to detect distraction, drowsiness, or impairment – with the power to prevent the car from starting or limit its operation. https://nypost.com/2026/04/30/us-news/sinister-in-car-spy-tech-that-can…

Automakers are already patenting and deploying even more aggressive systems, including biometric scans that analyze everything from your gait to your heart rate. Privacy advocates warn the data won’t stay in the car – it could flow to insurers for risk scoring, law enforcement, or worse.

As we also recently highlighted, dystopian technology including AI face scanning, lip reading and emotion monitoring is being deployed in vehicles, as well as cross-checks for drivers against police databases before even allowing the vehicle to move. 

And authorities are already signaling their eagerness to weaponize these tools for broader travel restrictions. In Massachusetts, Democrats advanced a bill aimed at reducing statewide vehicle miles traveled to meet climate targets, pushing policies that critics say amount to limiting how far people can drive in their own cars. 

X users are reacting with the outrage this deserves, blasting the tech as the thin end of the wedge for total control:

Subaru just turned your car into a fvcking SNITCH. Look away for 2 seconds? BEEP BEEP, vibrate, and then it drives itself off the road like Karen on crack. Government wet dream 1984 Orwellian bullshit. 😒 Boycott these traitors. 🔥

— J. L. Hunter (@JLHunter1984) May 16, 2026

So, this thing will go off if you look into your mirrors or over your shoulder to see if it's safe to take a turn, or change lane, or to brake. What a GREAT idea. Lets all tunnel vision on what's in front of us and ignore everything else. What could possibly go wrong?

— sam (@donder172) May 16, 2026

Can only imagine what it would do if it knew you voted for a republican.

— Amos 9 Fifteen (@Amos467253) May 16, 2026

nice.

refuse to purchase a car like this.

simple as.

if they all go bankrupt, they will stop this shit. pic.twitter.com/8N5WQnMVyx

— HumanProbably (@HumanProbably2) May 16, 2026

It must be stopped and waiting for some genius aftermarket design to override. Kill it. Kill all surveillance that’s being rolled out. It must be destroyed.

— L. (@LisaFMRRN) May 16, 2026

Globalist climate agendas, big government overreach, and corporate-government collusion are converging to strip away the last vestiges of personal autonomy on the open road. What starts as “safety features” and “environmental goals” ends with your car deciding whether you’re allowed to leave your driveway.

Americans have always valued the freedom to get behind the wheel and go where they please without Big Brother riding shotgun. 

These prison pods represent the opposite vision – one of constant monitoring, automated intervention, and restricted mobility. 

The only real answer is rejection: refuse to buy these surveilled vehicles, support politicians who fight the mandates, and preserve the used car market as the last refuge of actual driving freedom.

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 Mon, 05/18/2026 - 09:50

Key Events This Week: Nvidia Earnings, FOMC Minutes And Global PMIs

Looking at the week ahead, Nvidia’s earnings on Wednesday, with a market capitalisation now of $5.46tn, will be the main event. In economics, we have the global flash PMIs on Thursday, along with inflation data from Canada tomorrow, the UK on Wednesday, and Japan on Friday. From central banks, the highlight will be the FOMC minutes on Wednesday. Those flash PMIs will be important, as they’re one of the first indicators on how the global economy has performed this month, so will be scrutinized for any signs of how the war in Iran is impacting activity and prices.

The US calendar is relatively light, with the NAHB housing market index today expected to remain unchanged at a cyclically low 34, followed by Tuesday’s pending home sales, where a modest +1.0% increase is anticipated (from +1.5% previously). Attention will then turn to Thursday’s April housing activity data, where housing starts are expected to ease to an annualized pace of 1.425mn (from 1.502mn), while permits are projected to tick higher to 1.375mn (from 1.363mn). All estimates are according to our economists.

Beyond housing, Thursday is the key day for macro releases. The weekly initial jobless claims are expected to edge slightly lower to 209k (from 211k). The same day will also bring the Philadelphia Fed manufacturing survey, where our economists expect a pullback to +21.0 (from +26.7), alongside the flash PMIs. In the US, manufacturing is expected to soften marginally to 53.7 (from 54.5), while services are seen ticking up to 51.5 (from 51.0).

In contrast to consumer sentiment—which will see an updated reading of the Michigan survey on Friday (expected at 48.2 versus 49.8 previously)—business surveys have generally remained more resilient despite the energy shock. That said, some indicators have shown rising input costs and lengthening delivery times, developments that could signal renewed inflationary pressure building beneath the surface.

Turning to central bank communications, the Fed speaker slate is relatively limited but still notable. Governor Waller is scheduled to participate in an ECB policy panel tomorrow, alongside comments from Philadelphia Fed President Harker (voter) on the outlook. On Wednesday, Vice Chair Barr will discuss consumer financial health metrics, while the Fed will also publish the minutes from the April FOMC meeting. Richmond Fed President Barkin (non-voter) will follow on Thursday with remarks on the economy, before Governor Waller rounds out the week with a further appearance on Friday.

In Europe, the highlights will include the UK labour market report tomorrow and inflation data on Wednesday. DB's UK economist expects headline CPI to slow to 2.98% YoY and core CPI to fall to 2.61% YoY. More detail and forecasts are in the full inflation spotlight note here. The UK will also release the GfK May consumer confidence index and April retail sales on Friday. Other notable European releases include Eurozone consumer confidence on Thursday and Germany’s Ifo survey on Friday.

In Asia, Japan faces a busy week, with key data including Q1 GDP tomorrow and April nationwide CPI on Friday. Our Chief Japan economist expects positive real growth of an annualised 1.3% QoQ for the GDP report and sees core CPI inflation, excluding fresh food, holding at 1.8% YoY, alongside a retreat in core-core inflation, excluding fresh food and energy, to 2.2% (from 2.4% in March). 

Finally, beyond Nvidia’s earnings on Wednesday, results are also due from major US retailers, including Walmart, Home Depot, and TJX.

Courtesy of DB, here is a day by day calendar of the week's main events:

Monday May 18

• Data: US May New York Fed services business activity, NAHB housing market index, March total net TIC flows, China April retail sales, industrial production, investment, home prices, Italy March trade balance
• Central banks: BoE's Greene and Mann speak
• Earnings: Baidu, Ryanair Holdings
• Other: G7 meeting of finance ministers and central bank governors (through May 19)

Tuesday May 19

• Data: US April pending home sales, UK March average weekly earnings, unemployment rate, April jobless claims change, Japan Q1 GDP, March capacity utilisation, Eurozone March trade balance, Canada April CPI, March building permits
• Central banks: Fed's Waller speaks, ECB's Lane and Makhlouf speak, BoE's Breeden speaks
• Earnings: Home Depot, Amer Sports

Wednesday May 20

• Data: UK April CPI, RPI, PPI, March house price index, Germany April PPI, Denmark Q1 GDP
• Central banks: FOMC minutes, Fed's Paulson and Barr speak, China 1-yr and 5-yr loan prime rates
• Earnings: NVIDIA, Analog Devices, TJX, Lowe's, Intuit, Target, Experian, Marks & Spencer
• Auctions: US 20-yr Bonds ($16bn)

Thursday May 21

• Data: US, UK, Japan, Germany, France and Eurozone May preliminary PMIs, US May Philadelphia Fed business outlook, Kansas City Fed manufacturing activity, April housing starts, building permits, initial jobless claims, Japan April trade balance, March core machine orders, Italy March current account balance, ECB March current account, Eurozone March construction output, Q1 labour costs, May consumer confidence, Australia April labour force survey
• Central banks: ECB's Villeroy speaks, BoJ's Koeda speaks, BoE's Taylor speaks
• Earnings: Walmart, Deere, Generali, Ross Stores, Take-Two, BT, Zoom, Workday
• Auctions: US 10-yr TIPS (reopening, $19bn)

Friday May 22

• Data: US May Kansas City Fed services activity, UK May GfK consumer confidence, April retail sales, public finances, Japan April national CPI, Germany June GfK consumer confidence, May Ifo survey, France May business confidence, Canada March retail sales, April industrial product price index, raw materials price index
• Central banks: Fed’s Waller speaks, ECB's Vujcic, Kazimir, Muller and Lane speak
• Earnings: Cie Financiere Richemont, Lenovo

Taking a look at just the US, Goldman writes that the key economic data release this week is the Philadelphia Fed manufacturing index on Thursday. There are several speaking engagements with Fed officials this week, including events with Governors Waller and Barr and Presidents Paulson and Barkin. The minutes to the FOMC’s April meeting will be released on Wednesday.

Monday, May 18 

• 10:00 AM NAHB housing market index, May (consensus 34, last 34)

Tuesday, May 19 

• 08:00 AM Fed Governor Waller speaks: Fed Governor Christopher Waller will participate in a panel at the European Central Bank. Moderated Q&A is expected. On April 17th, Waller cautioned that higher oil prices as a result of the Iran war could lead to a “more lasting increase in inflation.” Waller noted that “if the risks to inflation outweigh those to the labor market,” that could require “maintaining the policy rate at the current target range.”
• 10:00 AM Pending home sales, April (GS +1.0%, consensus +1.0%, last +1.5%)
• 07:00 PM Philadelphia Fed President Paulson (FOMC voter) speaks: Philadelphia Fed President Anna Paulson will speak about the economic outlook at the Atlanta Fed’s Financial Markets Conference. Text and audience Q&A are expected. On March 27th, Paulson said that there was “a little bit more of a risk that the transmission of higher fuel prices, higher fertilizer prices, into inflation expectations is faster and maybe a little bit more durable.” That said, Paulson also noted that “for [all these shocks] to turn into sustained inflation, you need a mechanism that keeps that going” and that “on the wage-setting side, it doesn’t seem like there’s a lot of impetus that would make that happen now.”

Wednesday, May 20 

• 09:15 AM Fed Governor Barr speaks: Fed Governor Michael Barr will deliver a speech on consumer financial health at a conference in Atlanta, Georgia. Text is expected. On May 5th, Barr said that “the longer [the Iran war] goes on, the greater the risk that the inflation we’re seeing in these prices becomes embedded in the economy, and then we have to worry more.” Barr noted that “we’re in a situation right now where we really need to wait and see to understand what direction [the conflict] is going.”
• 02:00 PM FOMC meeting minutes, April 28-29 meeting: At its April meeting, the FOMC left the fed funds rate and the policy guidance in its statement unchanged. Presidents Hammack, Logan, and Kashkari dissented against the implicit easing bias in the standing policy guidance, while Governor Miran dissented in favor of a 25bp cut. Chair Powell said that the number of FOMC participants who could support moving to balanced guidance has increased since March and that the center of the FOMC “is moving toward a more neutral” outlook for future rate changes, but most felt making a change now was unnecessary. We pushed back our expectations for Fed cuts by one quarter to December and March. With energy cost passthrough likely to keep year-over-year core PCE inflation closer to 3% than 2% all year, we think that a combination of lower monthly inflation prints after the oil shock fades and further labor market softening will likely be needed for the FOMC to cut this year. We still expect that bar to be met but now expect it to take a bit longer.

Thursday, May 21 

• 08:30 AM Initial jobless claims, week ended May 16 (GS 210k, consensus 210k, last 211k); Continuing jobless claims, week ended May 9 (consensus 1,785k, last 1,782k)
• 08:30 AM Philadelphia Fed manufacturing index, May (GS 20.0, consensus 18.0, last 26.7)
• 08:30 AM Housing starts, April (GS -3.5%, consensus -5.5%, last +10.8%) 
• 09:45 AM S&P Global US manufacturing PMI, May preliminary (consensus 53.7, last 54.5); S&P Global US services PMI, May preliminary (consensus 51.0, last 51.0)
• 12:20 PM Richmond Fed President Barkin (FOMC non-voter) speaks; Richmond Fed President Tom Barkin will deliver a speech at the Urban Land Institute Triangle in Raleigh, North Carolina. Text and Q&A are expected.

Friday, May 22 

• 10:00 AM University of Michigan consumer sentiment, May final (GS 48.2, consensus 48.3, last 48.2); University of Michigan 5-10-year inflation expectations, May final (GS 3.4%, last 3.4%)
• 10:00 AM Fed Governor Waller speaks; Fed Governor Christopher Waller will deliver a lecture on the economic outlook at the Frankfurt School of Finance and Management in Germany. Text and moderated Q&A are expected.

Source: Goldman, DB

Tyler Durden Mon, 05/18/2026 - 09:25

Switzerland To Vote On Capping Population At 10 Million

In less than four weeks, on June 14, Swiss voters will decide on a proposal that, if passed, would mark a constitutional first: enshrining a hard limit on the country’s total permanent resident population.

The "No to a Switzerland with 10 Million" initiative, backed by the right-wing Swiss People’s Party (SVP), seeks to amend the Federal Constitution to keep the population below 10 million until 2050. If thresholds are approached or breached, the government would be required to tighten asylum and family reunification rules and renegotiate or terminate international agreements—including the landmark Agreement on the Free Movement of Persons with the EU—that contribute to population growth.

Rapid Growth

Switzerland’s population stands at approximately 9.1 million as of early 2026. It has grown by roughly 1.9 million since 2000, with net international migration accounting for about 80% of that increase. Natural population growth (births minus deaths) remains very low due to a fertility rate of around 1.3 children per woman.

Foreign nationals currently make up roughly 27% of the resident population (about 2.5 million people as of late 2024/early 2025 data), a share that has risen steadily:

• Around 2011 (15 years ago): ~22–23%
• Around 2016 (10 years ago): ~25%
• Today: ~27% foreign nationals (foreign-born and migration-background shares are higher, reaching ~40% when including naturalized citizens and second-generation residents)

Most foreign residents come from EU/EFTA countries (around 63–82% of the foreign population), primarily for work. Net migration into the permanent resident population has averaged 60,000–90,000 annually in recent years, though it declined modestly in 2025.

The Case for a Cap

Supporters argue that sustained high immigration, while economically beneficial in many respects, has created tangible pressures in a small, mountainous country with limited space for expansion. Key concerns include:

• Housing shortages and rising rents, especially in urban centers like Zurich and Geneva.
• Overcrowded public transport and congested roads.
• Strain on schools, healthcare, and the environment.
• Questions about long-term social cohesion and infrastructure sustainability.

Proponents frame the initiative as a pragmatic “sustainability” measure—prioritizing quality of life and per-capita prosperity over indefinite aggregate growth. In a nation with one of the world’s highest standards of living, they ask a straightforward question: How big should Switzerland be?

But What About Worker Shortages?

Opponents, including the Federal Council, a parliamentary majority, and much of the business community, warn that a rigid constitutional cap could backfire. Key arguments:

• Switzerland’s economy relies heavily on foreign talent to fill skilled positions in pharmaceuticals, finance, engineering, healthcare, and hospitality.
• An aging society needs workers to sustain pensions and public services.
• Terminating or renegotiating EU bilateral agreements risks damaging market access, research collaboration, and overall economic dynamism.
• Existing tools (quotas, safeguard clauses, and labor market preferences) already allow for managed migration; a blunt population target introduces uncertainty and potential labor shortages.

Critics also note that recent net migration has moderated somewhat and that many immigrants integrate successfully and contribute significantly through taxes and innovation.

Popular Idea

Recent polls show the outcome is too close to call, with support hovering around 47–52% depending on the survey. Parliament recommends rejection, but the decision rests directly with voters in Switzerland’s system of direct democracy.

The referendum reflects a deeper European tension: how to reconcile low native fertility, labor needs, and the desire to preserve national character, infrastructure capacity, and social trust. Unlike fertility policies or temporary immigration quotas tried elsewhere, Switzerland’s proposal is unique in attempting a constitutional limit on total population stock.

Tyler Durden Mon, 05/18/2026 - 09:15

The Question This Week Is "Does Trump Go Back To The Well On Bombing Iran?"

By Benjamin Picton, Senior Market Strategist at Rabobank

Hormuz diary, day 79. The strait remains functionally closed and global crude and refined product stocks are rapidly drawing down. President Trump has returned from Beijing after much bonhomie with no concrete commitments from China to help get shipping moving again, though the American side has claimed that China wants the strait to re-open with no tolls imposed and has committed to buy at least $17bn of US agricultural products annually.

Trump is running out of patience, and has told Iran that “the clock is ticking” before US strikes resume. Asia is running out of fuel.

Iran has established a new protocol for allowing ships to pass the strait. Araghchi says the strait is “open to all commercial ships”, the IRGC says that Chinese ships are being allowed to pass, Iranian state TV said that “more than 30 ships” had been allowed to pass between Wednesday and Thursday, and that that number is set to accelerate. Nobody seems to know how many of the 30 ships were not Chinese.

George Prokopiou’s Karolos ran the strait with its tracking system switched off, carrying a cargo of 1 million barrels of Iraqi crude bound for India. A Panamanian-flagged vessel managed by Japanese refiner ENEOS snuck through on Friday, and several other ships also passed through Hormuz into the Gulf of Oman.

Bond markets are no longer taking this all in their stride. Yields on US 10s rose 24bps last week, 10-year Gilt yields lifted 26bps. Last week’s hotter-than-expected April US CPI reading of 3.8% conspired with PPI ex food and energy of 5.2%, and strong payrolls data the week before to see the 5y-5y inflation swap creep up to 2.47%. The OIS curve says rate hikes, Kevin Warsh’s ascension as Fed Chair notwithstanding. Gundlach says the Fed can’t possibly cut. Bloomberg says traders are eyeing a tipping point towards a new era of higher yields. A graph of the 10-year says that the tipping point came all the way back in 2022 for those who were paying attention. CPI has now been above target for more than five years. Inflation can-kicking in the 1970s gave us the Volcker Shock later on.

The S&P500 closed down 1.25% on Friday. Futures are -0.7% this morning. Asian stocks are getting battered. The DXY is bid and high beta FX is being offered. Even the hitherto immortal Aussie housing market is beginning to creak as auction clearance rates hit their lowest levels since the pandemic lockdowns of 2020. The headwind of higher rates and lower real incomes is now compounded by tax changes aimed at discouraging investors. Has Australia picked up on the end of neoliberalism zeitgeist to shift from a Thatcherite home-owning democracy to Xi Jinping-style common prosperity where “houses are for living in”? Is there no-one left to buy after government became the liquidity of last resort through first home buyer co-ownership programs last year?

While markets fret over the outlook, the question this week is “does Trump go back to the well on bombing Iran?” Einstein said that doing the same thing over and over again while expecting different results is the definition of insanity; Oscar Wilde said that consistency is the last refuge of the unimaginative. CENTCOM commander Brad Cooper says the Iranian military industrial base is 90% degraded and Scott Bessent says that Iranian crude is going to have to go back to the well as the US blockade brings shut-ins ever closer. The CIA says Iran still has 70% of its pre-war missiles and can hold out under blockade for months. Who is talking their own book? Is the US government as faction-ridden as the Iranian government is supposed to be?

In the meantime, escalation risks mount. A drone struck close to the UAE’s Barakah nuclear plant over the weekend and Saudi Arabia reportedly intercepted three drones directed at its own territory. Ukraine is stepping up attacks on targets deep inside Russia even as Russia pounds Ukrainian territory. Ukraine mounted its largest attack on the Moscow region in more than a year, targeting high-value military assets, oil facilities, Moscow’s main airport, and a sanctioned semiconductor factory. Zelenskyy saying there has been a “shift in the balance” on the battlefield.

As we sit here in 2026 Russia’s ‘Special Military Operation’ originally been planned to conclude within weeks is now in its fifth year. In uncomfortable similarity, the US’s 4-6 week ‘targeted military campaign’ is now in its 12th week. Finding common ground in peace negotiations continues to prove elusive in both cases, making stalemate the path of least resistance. Central banks and many governments continue to base forecasts on a near-term resolution in Iran that sees the Strait of Hormuz fully re-open to shipping. Seemingly everybody has a Schlieffen Plan where they will be home by Christmas.

Financial markets are no different. While markets might be waiting for the restart of a bombing campaign in Iran to send physical crude prices and prompt spreads sharply higher (and stock prices sharply lower), for physical supply chains in Asia getting back to the (oil) well becomes more pressing by the day. Hot war is certainly bad, but a grinding stalemate would be disaster enough.

Tyler Durden Mon, 05/18/2026 - 09:10

Space Stocks Take-Off On Musk's SpaceX IPO Comments

AST SpaceMobile, EchoStar, and Rocket Lab moved higher in premarket trading in New York after Elon Musk, speaking by video at the Samson International Smart Mobility Summit on Monday, said a SpaceX IPO is coming "pretty soon," adding to investor hype around the publicly traded space industry.

"We've got to get the SpaceX IPO stuff going here pretty soon," Musk told the summit, which was taking place in Tel Aviv, via video call.

Elon: "I would be there in person, but we gotta get this @SpaceX IPO going pretty soon."

👀🚀 https://t.co/6uwiDKS9of pic.twitter.com/yGVMTm7qmg

— Sawyer Merritt (@SawyerMerritt) May 18, 2026

Shares of EchoStar were up about 3.5% in premarket trading. AST SpaceMobile and Rocket Lab also moved higher by about 2.5% after Musk's comments earlier today.

On Friday, Reuters reported that SpaceX has selected Nasdaq for its long-awaited IPO and is targeting a June 11 pricing date, followed by a June 12 debut under the ticker "SPCX."

The Polymarket bet on SpaceX's symbol "SPCX" has hit 93%.

//--> //--> Will SpaceX's public ticker be another ticker?
Yes 93% · No 7%
View full market & trade on Polymarket.

In April, SpaceX confidentially filed for an IPO with the SEC and is planning to disclose its prospectus as soon as next week, according to CNBC.

SpaceX's IPO could raise upwards of $75 billion for the rocket company and dwarf Saudi Aramco's $29 billion debut in 2019. The money raised would be used to fund an "insane flight rate" for the Starship rocket and to push ahead with deploying orbital data centers in low Earth orbit. The company's valuation stands at around $1.75 trillion.

Other IPOs to watch in the second half include chatbot startups, such as OpenAI and Anthropic.

Tyler Durden Mon, 05/18/2026 - 08:55

D-Day For "Huuuge" Meta Layoffs Looms As AI Job Apocalypse Accelerates

'D-Day' for Meta layoffs is quickly approaching, as the Facebook and Instagram owner will slash 10% of its global headcount - or about 8,000 employees - in the initial round as it swaps headcount for GPUs.

Former Meta employee Adel Wu described the current situation on X, saying her millennial and Gen Z friends still at the tech company are currently "either just waiting, hoping to get laid off or extremely anxious because the job is their lifeline."

Welcome to the accelerating AI job apocalypse, affecting white-collar youngsters with lots of student debt.

Wu described the upcoming Wednesday layoff announcement as "huuge" and noted, "I remember the very first big layoff the night before was almost like doomsday, people were stuffing their bags with free snacks and drinks and chargers."

during my last year at meta there were probably 4-5 layoffs, but this one on 5/20 is huuuge

my friends still there are either just waiting hoping to get laid off or extremely anxious because the job is their lifeline

i remember the very first big layoff the night before was… https://t.co/3fhVNzQjGn

— adel 🌟 (@adelwu_) May 16, 2026

Wu's X post quoted Emily Dreyfuss of The San Francisco Standard, who provided additional color in a note about the incoming layoffs:

Next week, Meta is expected to lay off 8,000 employees(opens in new tab), roughly 10% of its global workforce, with about 500 of those cuts landing in the Bay Area.

They will join a worldwide tally of more than 100,000 tech workers laid off since January, with more on the horizon.

At Meta, employees are anxiously anticipating a 7 a.m. email Wednesday that will tell them their fate.

To these rank-and-file workers, the AI job apocalypse feels like it's already here. And even as they fear their own replacement, they are being asked by management to use and train the very products that will soon take their jobs.

Dreyfuss quoted an anonymous Meta employee who said, "This is as anxious and stressed as I have ever been at a job."

"If you're on a work machine, you are probably being surveilled. But the framing that we are using this to train AI to do everyone's job and the sort of unapologetic, 'we’re training your replacement, and we're not paying you more for it' approach is just another signal of how little Meta cares about the humans that it employs," the employee told Dreyfuss.

We previewed the coming job apocalypse for Meta in recent weeks:

• Meta Plans 20% Layoffs To Divert Capital To Data Centers
• Meta To Unleash First Wave Of Mass Layoffs May 20 As It Eliminates 10% Of Its Workers

... and this comes as CEO Mark Zuckerberg has been investing hundreds of billions of dollars into AI as he seeks to dramatically reshape his company's core business around AI after Metaverse failures.

Meta is not alone: Amazon recently trimmed 30,000 corporate employees, representing nearly 10% of its white-collar workers. In February, the fintech company Block fired nearly half of its staff.

Layoffs. fyi, a website tracking tech job cuts worldwide, reported that 73,212 employees have lost their jobs so far this year. For all of 2024, the figure was 153,000.

Goldman laid out in 2023 just how many jobs AI will take. That number is absolutely scary for white-collar America, where many are saturated with student debt.

Tyler Durden Mon, 05/18/2026 - 08:25

"Taiwan Loses Its Strategic Importance In 18 Months," Says Chamath Palihapitiya

In an interview with Fox News' Bret Baier that aired Friday, President Trump said that he doesn't want "to travel 9,500 miles to fight a war" over Taiwan.

"I'm not looking to have somebody to go independent and, you know, we're supposed to travel 9,500 miles to fight a war," Trump told Baier. "I'm not looking for that. I want them to cool down. I want China to cool down."

Taiwan has been a major point of friction between Washington and Beijing. Last week, Secretary of State Marco Rubio told NBC News that the issue was not a key topic during Trump's summit with Chinese leader Xi Jinping.

The initial White House readout of the summit also did not mention Taiwan, home to the world's most advanced semiconductor production.

Taiwan is strategically important for three main reasons:

• It is indispensable to global semiconductor production.

• It sits at the center of the Western Pacific security architecture.

• It remains a major flashpoint in U.S.-China relations.

In other words, Taiwan is critically important to the U.S. because it is not only a semiconductor production supernode, but also a geopolitical fortress against China and a potential flashpoint in U.S.-China relations.

However, Chamath Palihapitiya, CEO of Social Capital and part of the All-In podcast, pointed out that Taiwan could be on track to lose one of its most strategic advantages in the next 18 months.

Palihapitiya continued:

We're 18 months from Taiwan not being an important moment of conversation the way it is today.

Why 18 months? Because we are at a point where we're probably 1-2 nanometers away from being able to do what we need Taiwan to strategically do for us.

And so as we scale up our chip fabs, as we get more capacity, and interestingly, there are these orthogonal technologies being developed.

I don't know if you guys saw, but Neuralink was showcasing a machine that is literally operating at the almost nanometer scale to do the brain operations for the implantation, all automatically.

When you have the dexterity and the capability mechanically to make these things, the real reason then is a very different one than what it is today.

Today, it's economic. And if you take that off the table, I think we'll have a very different attitude to Taiwan.

Chamath: Taiwan Loses Its Strategic Importance in 18 Months@chamath:

“ We're 18 months from Taiwan not being an important moment of conversation the way it is today.

Why 18 months? Because we are at a point where we're probably 1-2 nanometers away from being able to do what… pic.twitter.com/XL2UqRIQyi

— The All-In Podcast (@theallinpod) May 17, 2026

Palihapitiya's take on the rise of U.S. chip fabs, many of which are based in Arizona and could soon turn the state into the new Taiwan, drew backlash on X, notably from geopolitical risk analyst Ian Bremmer, who said, "This is Trump's perspective: the only thing that matters about Taiwan is the chips. Very different from the view of U.S. allies in the region: Japan, South Korea, and Australia."

Tyler Durden Mon, 05/18/2026 - 07:54

"Please Work Remote": NYC Braces For Commuter Chaos With Ongoing LIRR Strike

Welcome to day three of the Long Island Rail Road strike, which is set to cause commuter chaos this morning in the New York City area, as more than 3,500 workers across five unions walked off the job Saturday after contract talks with the MTA collapsed.

Negotiations between the MTA and unions resumed Sunday and are set to continue Monday morning.

LIRR service remains suspended due to the strike. Please work from home if you can. If you must travel today, travel alternatives include:

• Limited shuttle bus service to/from six Long Island locations to Queens subway stations, for both the AM and PM rush hour.
• NICE Bus…

— LIRR (@LIRR) May 18, 2026

The MTA has urged riders to work remotely today and is deploying up to 275 free shuttle buses, though that capacity only covers a tiny fraction of the LIRR's nearly 300,000 weekday riders.

It seems that Socialist NYC Mayor Mandami finally got his promise of free buses, but at the cost of a strike and commuter chaos.

The disruption could also snarl travel to Long Island beach destinations over Memorial Day weekend, including the Hamptons.

Some employers, including JPMorgan and Citigroup, have advised affected workers to consider remote work this week.

The National Mediation Board, a federal agency that oversees labor disputes, summoned both sides late Sunday evening to continue negotiations, but no resolution was found. Talks are expected later today.

A spokesman for the International Brotherhood of Teamsters stated that their wage proposal was reasonable and that two federal review panels had sided with them.

"We remain ready to negotiate a fair agreement at any time and get back to work on behalf of Long Island commuters," the statement said.

The union wrote on X, "After more than three years with no raises, LIRR's union workers, including 500 Teamsters locomotive engineers, will not make any more sacrifices to cover for the MTA's mismanagement."

Rail Teamsters from the @BLET and their union coalition remain on strike at the MTA-owned Long Island Rail Road.

After more than three years with no raises, LIRR’s union workers, including 500 Teamsters locomotive engineers, will not make any more sacrifices to cover for the… pic.twitter.com/acb6jGY6Fj

— Teamsters (@Teamsters) May 17, 2026

What an absolute mess for commuters this morning.

Tyler Durden Mon, 05/18/2026 - 07:45