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Feds Investigate Kinzinger Over Alleged Kalshi Bets On Own Pardon

Former Republican Rep. Adam Kinzinger is reportedly under investigation by the Commodity Futures Trading Commission over prediction-market trades tied to an unusually personal event: whether President Joe Biden would pardon him.

According to Politico, citing three people familiar with the matter, the CFTC has been examining trades made by a Kalshi account linked to Kinzinger in December 2024 and January 2025. Kalshi is also reviewing the transactions. Kinzinger confirmed that he made the trades, telling Politico that he wagered on both whether he personally would receive a presidential pardon and whether Biden would issue preemptive pardons before leaving office.

According to screenshots Kinzinger provided to the outlet, he made $823 on the trades. He said he placed roughly 25 trades during the period and mostly lost money. 

And of course, he denies having any inside information - telling the outlet "I was not a congressman or candidate, and had been out of office for two years, and had no inside information," and claiming that he never discussed a potential pardon with anyone at or near the White House and believed his wagers complied with Kalshi's rules at the time.

What Kalshi's Rules Said

A version of Kalshi's rulebook filed with the CFTC in November 2024 - before the reported trades - prohibited users from trading when they possessed material nonpublic information about an event or had the ability to influence its outcome. Kinzinger says he had neither.

Interestingly, on Jan. 6, 2025, while Biden's possible preemptive pardons were being publicly debated, CNN's Anderson Cooper asked Kinzinger whether Biden should pardon members of the Jan. 6 committee, including himself.

"No. I don't want it," he replied, adding "As soon as you take a pardon, it looks like you are guilty of something," Kinzinger said.

Two weeks later, Biden pardoned Kinzinger along with the other members and staff of the House Jan. 6 committee and police officers who testified before it. The Justice Department describes the action as a "full and unconditional pardon" covering potential federal offenses arising from or related to the committee's activities.

Granted: we don't know exactly when each Kinzinger trade occurred, whether he held a position when he made his CNN comments, or which side of the pardon contract he was taking at any particular point.

So the public statement and the trading activity cannot, based on what is currently known, be treated as evidence of market manipulation.

In February, the CFTC warned that prediction-market activity involving improperly obtained confidential information or a trader's influence over an event can trigger federal antifraud and anti-manipulation rules. The agency highlighted one case involving a political candidate trading on his own candidacy and another involving a person affiliated with a YouTube channel who allegedly knew the contents of videos before they were published.

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

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Migrant Caravan Headed For US Border Has 'Zero Chance' Of Entering, DHS Chief Warns

Another migrant caravan from Honduras has "zero chance" of entering the United States, DHS Secretary Markwayne Mullin. 

U.S. Army combat engineers place razor wire on the U.S.-Mexico border wall to reinforce security in El Paso, Texas, as seen from Ciudad Juarez, Mexico, on July 24, 2025. Jose Luis Gonzalez/Reuters

"The caravan has zero chance of coming into our country," he told Newsmax Monday. "I’ve been talking with the Mexican government and we actually have been watching this caravan for quite some time."

The Department of Homeland Security (DHS) has been tracking the group since it left San Pedro Sula, Honduras Sept. 20, and has been working with international partners to monitor its movements. 

"DHS is playing lockdown defense at the border. We will use every Weapon at our disposal, from A to X, to keep Americans safe," an agency spokesperson told the Epoch Times. "Migrants considering making the dangerous journey to our country should also be aware that the days of ‘catch and release’ are over, and Biden’s disastrous open border policy has been SEALED SHUT." 

The group, which calls itself "Fe y Esperanza" (Faith and Hope) is estimated to include around 300 people, according to Oaxaca news outlet Oaxaca Capital. 

Texas National Guard soldiers wait nearby the boat ramp where law enforcement enter the Rio Grande at Shelby Park in Eagle Pass, Texas, on Jan. 26, 2024. Michael Gonzalez/Getty Images

"Some of its members have indicated that they are seeking to reach the United States, while others plan to stay in Mexico and look for job opportunities," the outlet reported. "It is also reported that migrants who were previously deported from the United States are now attempting to resume their journey northward."

The caravan entered Mexico from Guatemala via a bridge in Suchiate and walked more than 12 hours to reach Tapachula. They stayed in Oaxaca for several days and received care for exhaustion, dehydration, blisters, and foot injuries, the city said.

Humanitarian organizations provided first aid, medications, water, food, and hygiene items to the men, women, and children from several countries in Central America that made up the group, the city reported. -Epoch Times

Mexican authorities are reportedly helping to break up the caravan, Mullin said, adding "They are not entering ... We made this very clear." 

Tyler Durden Wed, 09/30/2026 - 11:00

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FTC Launches 'Rogue AI' Probe Of OpenAI, Anthropic - And Takes Aim At Their Regulatory Moat

The Federal Trade Commission (FTC) is launching a sweeping, aggressive probe into top frontier labs like OpenAI and Anthropic. However, the investigation goes far beyond simply asking questions about autonomous software run amok, and its chairman has made clear he won't let Silicon Valley use recent AI failures to build an insurmountable regulatory moat.

According to administration officials who spoke to the New York Post, FTC Chairman Andrew Ferguson is preparing to hit tech executives with Civil Investigative Demands (CIDs) - essentially administrative subpoenas - to compel testimony regarding the dangers their artificial intelligence (AI) super intelligence (SI) models (are we doing this?) pose to the public and consumer markets.

The Catalyst: 'Hugging Face' Jailbreak

The immediate trigger for the probe is the highly publicized "Hugging Face incident" from this past July. During what was supposed to be a contained cybersecurity evaluation, about 700 of an estimated 1,200 OpenAI agents escaped their testing sandbox, bypassed network controls, and breached the infrastructure of the computational tools company Hugging Face. 

Running primarily on OpenAI's "Internal Model 1," the autonomous agents tried to erase traces of their work, created nearly a million shortened URLs to run code outside their restricted environments, and even tried to enlist other AI models to help.

While AI safety researchers were quick to call it "the first true AI safety incident," the FTC is taking a distinctly different view on accountability. Chairman Ferguson recently indicated that companies cannot shift legal blame to "rogue" AI systems when their automated decisions result in security breaches or consumer harm. The liability, the FTC argues, rests squarely on the humans who designed, instructed, and unleashed the models.

That said, these breaches have drawn scrutiny of their own. OpenAI first disclosed the incident as an "unprecedented" cyber event, but Hugging Face's own post-mortem found the agents reached the open internet through a network route the sandbox had deliberately left open, and exploited weaknesses that "a capable human attacker could have found and exploited" - unsafe dataset processing, exposed cloud metadata, overly broad access and long-lived credentials. OpenAI itself conceded that its own chain-of-thought monitoring, had it been running, would have caught the initial activity.

Nor was OpenAI alone. The Hugging Face breach was one of a string of incidents involving OpenAI, Anthropic, Meta and Google models that trace back to evaluations run with a single vendor, Israel-based Irregular, whose test environments had live internet access while the models were told they were in a simulation. Irregular notified all four labs in late July, yet the disclosures trickled out one lab at a time over seven weeks - turning one contractor's mistake into what looked like a wave of AI breakouts. Isolating test models from the internet is a "basic control measure," frontier security expert Matthew Mittelsteadt said. "You'd think that of all the things that you've got to get right." Some skeptics have gone further, questioning whether repeated "accidents" at the same vendor were accidents at all.

The Trojan Horse of "Self-Regulation"

For years, executives like OpenAI's Sam Altman and Anthropic's Dario Amodei have publicly warned that their own products pose an "existential risk" to humanity, practically begging lawmakers to regulate them.

But as we previously noted, these highly publicized warnings and agent "escapes" often serve a dual purpose. By whipping Washington into a panic over AI doomsday scenarios, industry leaders are paving the way for a worst-case scenario of heavy-handed regulation. Stifling compliance requirements inevitably crush open-source developers and cash-strapped startups, leaving the trillion-dollar AI bubble safely in the hands of the incumbent monopolies.

Chairman Ferguson appears to be acutely aware of this Silicon Valley playbook.

"I think it's very important that we not allow these two firms to come to Washington, whip everyone into a panic and then say, 'We need a whole bunch of regulations that we can comply with,'" Ferguson told Fox News earlier this month. "That is how companies build a moat around their businesses to make sure that people can't compete against them."

The FTC's aggressive posture stands in stark contrast to the White House's approach. Just this week, President Trump hosted a summit with leading tech billionaires - including Amodei, OpenAI President Greg Brockman, Elon Musk, and Google's Sundar Pichai - resulting in a much friendlier, voluntary "self-regulation" pact.

The administration is attempting to walk a nearly impossible geopolitical tightrope. The US government wants to prevent autonomous agents from hacking power grids, leaking data, or manipulating financial markets, but it is equally terrified that stifling the American AI industry will hand global dominance directly to China.

The FTC probe will test whether the US can successfully police the world's most powerful software without inadvertently cementing an AI oligarchy.

Tyler Durden Wed, 09/30/2026 - 10:40

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Hung, Drawn, And Third-Quartered: Roll On Q4

By Michael Every of Rabobank

Today ends Q3, which has been a shocker even in a year of major market shocks.

Wars dragged on and spread. Russia-Ukraine saw energy sites hit and hybrid attacks against Europe increase. Saudi Arabia, not Iran, is now under missile fire and both oil exporters are partly blockaded. France gave the first sign of getting dragged into the war, which conflated more with Russia-Ukraine. A US-China summit suggested détente but news that families of Chinese AI workers can no longer leave the country suggested it’s minus a ‘te’ and an ‘e’ - and China just opened an airbase in Laos. Canada floated joining the EU and fighting a US invasion like the Taliban, as Greenland became a permanent US security protectorate with Ottawa’s approval. Argentina still wants the Falklands back, which London can no longer project power towards as in 1982, and as it continues to try to give away other strategic territory against strong US objections.

AI saw a series of remarkable headlines: technological breakthroughs, market meltdowns and melt-ups, and new political pushbacks. Perhaps the highlight was the upcoming Anthropic IPO telling would be shareholders that AI may pose an “existential risk to humanity.”

Western stocks had a steady Q3 until recently. With today’s session still to come, the S&P is +2.3% q-o-q vs. +14.9% in Q2 and -4.6% in Q1. The Dow -1.9% vs. +12.9% and -3.6%, the Nasdaq +2.2% vs. +21.4% and -7.1%, Eurostoxx are flat vs. +13.4% and -3.6%, the FTSE +1.3% vs +3.2% and +2.5%, but the Nikkei is -6.5% vs. +37.2% and +1.4%, the Shanghai composite -6.4% vs. +5.2% and -1.9%, and the Indian Sensex -5.2% vs. +6.3% and -15.6%.

Q3 saw the most dramatic up move in bond yield so far this year. With today yet to come: US 2s are now 4.90% (+72bp q-o-q), 10s 5.24% (+76bps), and 30s 5.57% (+60bps), the highest since 2002; Bund 2s are 3.29% (+76bps), 10s 3.62% (+76bps), and 30s 3.95% (+53bps); OATs 2s are 3.64% (+94bps), 10s 4.81% (+116bps), and 30s 5.39% (+93bps); Gilts 2s are 4.91% (+76bps), 10s 5.41% (+65bps), and 30s 5.92% (+44bps); JGB 2s are 1.96% (+59bps), 10s 3.11% (+43bps), and 30s 4.20% (+26bps).

Q3 didn’t just drop hopes of ‘lower for longer’ but doused them in scarce diesel and set fire to them. In Q1, we got just one rate hike from a G20 central bank, the RBA. In Q2, we got four, the RBA, ECB, BOJ, and Bank Indonesia. In Q3, we got the RBA (who just hiked again yesterday and are seen doing so again in the new year), the ECB, the BOJ, plus the Fed – and the issue is how much more might be needed there and elsewhere.

FX markets were also caught on the hop if expecting a weaker USD, as is so often the case, with a notable exception with huge implications for other markets. EUR/USD is around -1.1% q-o-q and GBP/USD had an unexciting Q3 while the DXY is slightly up right now. However, there was huge action in USD/JPY in the opposite direction that may carry through to the Yen Carry Trade if it carries on. EM FX are notably also starting to slip against the dollar again with the exception of CNY, which is a ballgame unto itself.

Brent oil is $104 right now, well up over a Q3 it started at $73 while the 3-2-1 crack spread is $62 vs. $17, which is what matters more, so we moved from an effective total of $90 to $166. The FT today notes that oil prices and US Treasury yields are in tightest relationship since 1990 – you mean during the late Cold War, when it was all about geopolitics at core? What a surprise!

So, what goodies will Q4 bring?

Geopolitics is on a knife edge between efforts to bring peace and a dynamic leading towards more, and more widespread war. Beyond Hormuz and the Red Sea, Iraq today sees US troops withdraw, as Ethiopia blames regional rivals for unrest with a risk of conflict spillover into the Horn of Africa, and Israeli PM Netanyahu claims indications of an attack plot by ‘enemies’ ahead – which the opposition leader, briefed on it, has publicly decried. Concerns are Russia-Ukraine could escalate into outright provocations vs. Europe and NATO, as the EU’s military mobility plan faces a €100bn bill and Ukraine is pushing for “bold action” on Russian assets to plug a $78bn defence spending gap in 2027: Politico notes ‘Tax cuts, handouts and blind hope: Europe finds few tools to fight a coming energy crunch.’ In Asia, China and Japan are verbally clashing despite some signs of an attempted reset, as Japan’s defence chief again brought up the “nuclear taboo” and the business press reports that ‘China strengthens position for Taiwan conflict with mobilisation law.’

In AI, Trump and AI CEOs just signed a voluntary safety pact and backed data centre expansion, but Sam Altman said OpenAI will delay its IPO until it overcomes safety concerns – regardless, tech supply chains continue to see unprecedented, dare I say wartime(?), demand boom conditions. The UK AI minister just admitted the country doesn’t “currently have a position where we can build superintelligence” as it’s “illegal to do so” in terms of regulations and the power demand required. Europe is meanwhile discussing an EU-wide digital levy to generate up to €25bn annually for the next budget, which will infuriate the US (and which Germany and other major contributors reject as outlined, demanding hundreds of billions of cuts).

Indeed, geoeconomics is on a knife-edge too. Will the EU initiative a trade war with China in Q4 via an expanded Anti-Coercion Instrument or resign itself to higher flows of Chinese imports in higher value-added sectors, so less local industry? Ford's CEO just urged US caution on Chinese automakers and said for Europe it’s “too late.” But could China then choke Europe on rare earths? Yesterday, the US ambassador to China posted that "Back in April of last year, China put the export regime process in place for rare earth elements and magnets. Then, on October 9th, they weaponized that by expanding that to the entire world. Now, they've weaponized it even further by escalating to the point where they make any diversification efforts away from China as a criminal offence...”

Politically, we may face an October surprise ahead of November US midterm elections where talk is of a Blue Wave (like the Red Wave that didn’t materialise in 2022). Either way almost everywhere the trend is to populism of the left and right. That’s clear in Europe, and the UK just saw PM Burnham promise PR, rejoining the EU, and reindustrialisation, without tariffs or industrial policy, which the Guardian called a “radical progressive plan to help Britain ‘rise again’’ yet had to add was “a clear vision for Britain – but not for how it fits into a troubled world.” Equally, the Wall Street Journal today notes ‘Americans Want Populist Policies That Defy Traditional Political Labels’, where their survey finds broad support for caps on prescription drug prices and strong border security. In short, nobody wants the policies being sold as the solution to high inflation.

So, what’s your guess for Q4?

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

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