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Services Sector Survey Surge Sparks US Growth Rebound Hopes In August

After a relatively ugly series of disappointing macro data - and a hectic week of interventions - preliminary August data from S&P Global's PMI survey was expected to signal a slowdown in growth for the US economy (but still growth).

But, the respondents had other things on their mind as while Manufacturing slipped, the Services sector of the economy soared

• Flash US Services PMI Business Activity Index: 56.8 (July: 54.6). 20-month high.

• Flash US Manufacturing PMI: 53.2 (July: 53.9). 5-month low. 

“US business is booming," says Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, "with firms reporting the fastest output growth for over four years so far in the third quarter as the expansion picked up further momentum in August."

The survey data for the third quarter are currently pointing to annualized growth approaching 3.0%, up solidly from the 1.5% pace seen in the second quarter.

Jobs growth has also shown a welcome revival in August, with employers gaining in confidence as concerns fade over the negative economic impacts of tariffs and the conflict in the Middle East.

However, as Williamson writes, "the latter in particular remains a key area of concern for businesses, especially via the impact on supply lines and energy prices. "

Supply delays were again reported in August to one of the greatest extents seen over the past four years, clearly constraining output in many companies.

Price pressures, while fading, also remain elevated and prone to renewed upward pressures should energy prices rise again.

Growth momentum has meanwhile shifted from manufacturing to services between the second and third quarters.

Williamson concludes: "As reduced safety stock building and supply delays dampen factory production growth, the service sector is now playing a key role in driving a sustained US expansion, underscoring a dependency on consumer spending and financial services growth.”

Tyler Durden Fri, 08/21/2026 - 09:56

A dad plunged 120 feet while trying to get a better view of the water at a Montana national park – and remarkably survived the horrific fall.

A U.S. Assistant Attorney has been mysteriously found dead in a San Diego federal building on Wednesday after being reported missing that evening.

China Sentences Evergrande Founder To Life In Prison

Five years after Chinese property development firm Evergrande Group collapsed under the weight of enormous debt, founder Xu Jiayin was sentenced to life in prison on Thursday.

Xu Jiayin, also known as Hui Ka Yan, founder of property developer Evergrande, appears for sentencing at the Shenzhen Intermediate People's Court in Shenzhen, China, on Aug. 20, 2026. Shenzhen Intermediate People's Court /Xinhua via AP

Xu (Hui Ka Yan in Cantonese), 64, pleaded guilty in April to fundraising fraud, illegally taking public deposits, illegally extending loans, bribery, fraudulently issuing security, and misuse of funds. His sentence was handed down in Shenzhen in southern China. The court also confiscated his personal property.

Evergrande was also fined 8.82 billion yuan (US$1.31 billion), and slapped its Hengda real estate subsidiary with a 7 billion yuan (US$1.04 billion) fine. 

As the Epoch Times notes further, Xu has not been seen in public since 2023, but the Shenzhen Intermediate People’s Court released photographs that show him wearing a blue shirt and flanked by two officers as the sentence was read out.

Crimes Should be 'Severely Punished'

“The criminal acts of Evergrande Group, Hengda Real Estate, ‌and Hui Ka Yan ... involved ⁠particularly huge amounts and egregious circumstances, caused particularly significant economic losses and caused particularly serious social harm, and should be severely punished,” the court said in ‌a statement.

State media Xinhua news agency stated that the court sentenced 56 others to prison sentences of between 22 months and 18 years for their roles in “illegally absorbing public deposits, fundraising fraud, and illegal use of funds” in relation to the Evergrande case. It did not name any of the individuals.

It was not immediately clear whether Xu had legal representatives who could comment on his behalf.

After a two-day trial in April, Xu “pleaded guilty and expressed remorse,” according to state media outlet Xinhua.

Born into poverty, Xu became Asia’s richest man, partly because of links with senior officials in the Chinese Communist Party (CCP).

He expanded Evergrande massively during China’s property boom between 1996 and 2019, but the company was burdened with huge debts.

Evergrande, which was China’s biggest developer, ran into financial problems in 2020 amid China’s COVID-19 crisis, and in 2021, it developed liquidity issues.

In March 2024, the company and Xu were penalized after being accused of artificially boosting its revenues by $78 billion in the two years before it defaulted on its debt obligations.

A Hong Kong court ordered Evergrande to be liquidated in 2024, and the Hong Kong Stock Exchange delisted it in 2025.

The company has defaulted on most of its $300 billion liabilities. Its problems are emblematic of a prolonged slowdown in China’s real estate sector, which has dragged ​down the world’s second-biggest economy.

The China Evergrande Centre building sign in Hong Kong on Dec. 7, 2021. Tyrone Siu/Reuters

A former steel technician, Xu founded Evergrande in 1996.

As the communist regime gradually opened up its market and eased controls, Xu, like many other Chinese, moved to Guangdong Province, where he worked as a salesperson before founding Evergrande in 1996.

In his first project, Xu borrowed 3 million yuan (about $440,000) from the bank to purchase land, then started selling homes once construction began, according to a 2010 report by People’s Daily, the official newspaper of the CCP.

Within a day, he had sold more than 300 apartments and raked in 80 million yuan (about $11.7 million), allowing him to finance the next project, according to the report.

By the end of 2009, Evergrande had dozens of projects across 25 major Chinese cities, according to the company’s official website.

He Was Once Worth $45 Billion

In 2017, Xu ​had a net worth of $45.3 billion, according to ⁠Forbes.

Xu stepped down as chairman of Hengda in August 2021, two months before the company defaulted on a $148 million loan, the first of many debts it was unable to repay.

The liquidation process has ​moved ‌slowly. Only $255 million worth of assets were sold as of August 2025, compared with creditors’ claims totalling $45 billion.

Evergrande’s liquidators declined to comment on Xu’s sentencing.

The liquidators are trying to freeze Xu’s offshore assets and those of his ex-wife, Ding Yumei, who owns property in London and Vancouver.

Ding flew out of Hong Kong before August 2023, China’s state-controlled Tencent News reported, and her current whereabouts are unknown.

Speaking at the 2018 China Charity Awards, Xu praised the CCP and attributed everything Evergrande and he had to the regime.

Yuan Hongbing, a former professor of law at Peking University who now lives in exile in Australia, told The Epoch Times in 2023 that Xu had used political connections with Zeng Qinghong, a senior CCP official who was vice president from 2003 to 2008.

But Feng Chongyi, an associate professor in China studies at the University of Technology Sydney, told The Epoch Times this week that Xi had spent years weakening forces associated with Jiang Zemin and Zeng, who was his longtime political ally, because they once threatened Xi’s hold on power.

Reuters contributed to this report.

Tyler Durden Fri, 08/21/2026 - 09:45

As "Tin Cup" celebrates its 30th anniversary, the film's writer Ron Shelton says he has an idea for a sequel to the sports rom-com.

Harry and Meghan are but the latest in a long line of ballyhooed outsiders who tempted fate coming to Hollywood thinking they could crack the creative code.

The Los Angeles Police Department is investigating the case of the missing Nicolas Cage movie at Netflix, which has been missing for two months.

A trio of top TV vets Susan Rovner, Jana Winograde and Lloyd Braun are launching a new microseries platform, aTwist, on Sept. 3.

Vicki Gunvalson tries to scoot her way out of drama in Las Vegas but it doesn’t work. “Virtual Reali-Tea” co-hosts Danny Murphy and Evan Real are here to give you all the scoop on “The Real Housewives of Orange County” season 20, episode 7. Vicki confronts newbie Carmella Garcia about her parenting, which does not...

Vicki Gunvalson tries to scoot her way out of drama in Las Vegas but it doesn’t work. “Virtual Reali-Tea” co-hosts Danny Murphy and Evan Real are here to give you all the scoop on “The Real Housewives of Orange County” season 20, episode 7. Vicki confronts newbie Carmella Garcia about her parenting, which does not...

Pastor Lorenzo Sewell delivered a fiery speech at a Dearborn, Michigan, city meeting, claiming the city is operating under “Sharia law” and accusing local Muslims of pushing the community away from American laws. His remarks came amid a series of anti-Islam protests in the city.

News broke on Wednesday that the Duke and Duchess of Sussex are moving back across the pond from Montecito, California, six years after their exit.

News broke Wednesday that the Duke and Duchess of Sussex are heading back across the pond, with Page Six hearing cash is a "big" reason for the move.

The project is being completed in three phases to limit the disruption, but residents could still face months away from their homes.

A tourist was left dangling from a rope as he attempted to rappel down a waterfall. The tourist later said he had been trapped in the waterfall for around five minutes and had repeatedly struggled to breathe.

Teen Drops Social Media Addiction Claims Against Meta, Google, & Snap, Ahead Of October Trial

Authored by Kimberley Hayek via The Epoch Times,

A 15-year-old New Jersey girl whose lawsuit served as a test case in litigation accusing social media companies of designing platforms to addict young users dropped her remaining claims Thursday against Meta Platforms, Google, and Snap Inc.

The plaintiff, identified in California court records only as P. M-Y., had alleged the owners of Instagram, Facebook, YouTube, and Snapchat contributed to her social media addiction, depression, and self-harm.

She dismissed the case without any payment from the three companies, according to a court filing and statements from the defendants. TikTok, also named in the suit, had settled earlier.

Emily Jeffcott, an attorney for P. M-Y., said her client chose to end the remaining claims so she could try to resume her life.

She “initiated this process with the goal of holding social media companies accountable and to push for changes to protect young people like herself,” Jeffcott said.

More than 3,300 personal injury cases filed by individuals have been consolidated in California state court in Los Angeles. P. M-Y.’s lawsuit was selected as one of three “bellwether” or test cases set to go to trial in October. Attorneys use such trials to determine how juries may react to similar claims and to help set values for settlement talks.

Two other teen plaintiffs with similar allegations against the same companies remain scheduled for October trials. TikTok has already settled those cases, as well.

Platforms Defend Safeguards

Meta said in a statement that the plaintiff had a significant mental health condition that pre-dated her use of social media and that many of these cases fit the same pattern. The company added it would vigorously defend against the remaining suits.

Google-owned YouTube said the decision to drop the case affirms “our longstanding position that we provide safe, age-appropriate experiences and strong parental controls for young people and families.”

A Snap spokesperson said the company remains focused on strengthening safeguards, tools and educational resources to support users’ safety, privacy, and well-being.

The broader litigation includes claims by individuals, states, and school districts that features such as infinite scroll, algorithmic recommendations, and autoplay promote compulsive use and contribute to youth mental health problems. The companies have denied the allegations and say they take extensive steps to keep teens safe.

A previous case concluded in July when a Florida teen dropped his claims against Meta after the other defendants settled.

In March, a Los Angeles jury awarded $4.2 million against Meta and $1.8 million against Google in a case brought by a woman who said she became addicted to the platforms at a young age, with TikTok and Snap settling that case before trial.

Related litigation continues on other fronts, with 29 states pursuing a federal trial in Oakland, California, that began this week. They accuse Meta of designing Facebook and Instagram to hook young users, fueling anxiety, depression, and even suicide, and of misleading the public about safety. Meta has rejected those claims, arguing that “social media addiction” is not an established psychiatric condition and that it complied with the Children’s Online Privacy Protection Act.

In March, a Los Angeles jury found Meta and Google liable for $6 million in damages in the first individual social media addiction trial to reach a verdict. Jurors decided the companies’ platforms contributed to the plaintiff’s psychological harms. Snap and TikTok had settled before that trial began.

A New Mexico judge earlier this month ordered Meta to pay $567 million into a child mental health fund after finding the company’s platforms contributed to the state’s youth mental health crisis. Meta faces additional pressure from state attorneys general and school districts in multiple jurisdictions.

Tyler Durden Fri, 08/21/2026 - 09:25

What the shell?

The gentle brightener is *finally* off full price.

Broadcom CDS Explodes As It Seeks Up To $100 Billion In Massive Off-Balance Sheet Debt Deal

Amid the growing angst about hyperscaler CapEx (and more specifically, the historic flood of new debt issuance to fund it), attention among the always-bullish equity talking-heads has shifted - and rightfully so - to the bond markets as alarm signals flare up with an increasing frequency. Of course, for ZeroHedge readers, this is not a new topic, it is something we have been warning of for the past year, ever since we explained that debt was the true AI bubble last October:

• The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle
• Goldman Warns Massive Hyperscaler Bond Issuance Means "Risk Skewed To Downside"
• "Generational Transfer Is Taking Place": The Cash Crunch Is Coming For AI Hyperscalers
• Hyperscaler Bond Spreads Blow Out After Google Shocks With Another $25 Billion Bond Offering
• The AI CapEx Boom Is Building Twice As Fast As The Housing Boom
• The Circular Delusion Of Markets: How Earnings Growth Runs On Borrowed Money (& The Smart Money Is Leaving)
• Nvidia Confirms Record $500 Billion Off-Balance Sheet SPV Deal To Fund The World's Biggest Circle Jerk
• Nvidia's $500 Billion Bet Shows Up In Credit
• Hyperscaler CDS Volumes Explode To All-Time High On Credit, Circular Financing Fears

Then, last week we explained why - as Nomura's Charlie McElligott also joined the credit chorus - the unprecedented flood of AI corporate debt had started to crowd out demand for US government paper, an ominous development as it meant continued massive capex would lead to even higher treasury yields... as well as even more inflation, a toxic mix to the Treasury.

What's worse, the market had finally started to pay attention, as one look at the surge in treasury swaption vol of vol made abundantly clear, which is why last week we warned - correctly - that Bessent was about to get very busy as bearish bets hit levels last seen during previous trasury market crises. 

Bessent will be busy https://t.co/0BslbpgnLs pic.twitter.com/kreaTPS1rh

— zerohedge (@zerohedge) August 11, 2026

One week later Bessent did in fact, get busy, and shocked the market with a "cringingly executed" (to quote McElligott) buyback directive announcement, one which lasted all of 23 hours before the entire move was reversed and yields are now trading 4 bps higher than where they were before the Treasury announcement. 

But while Bessent can address the market again any time he wants and threaten Treasury shorts (“By At LeAsT dOuBlE”), the bigger problem facing the Treasury is that the deluge of AI debt is really just starting - recall there is another $6-8 trillion in capex that has to be spent by 2030, most of it in the form of corporate debt, which will lead to relentless pressure higher on US interest rate for the foreseeable future. 

Some AI companies realize that it is only a matter of time before Bessent chills this AI debt diarrhea indefinitely; which explains why Bloomberg reported today that Broadcom is preparing another gargantuan SPV deal, and is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal that will benefit Anthropic PBC and other companies. 

The financing, which is still being ironed out, may also include a roughly $30 billion junior debt tranche, said some of the people, who asked not to be identified because the information is private.

Under the proposed plan, Broadcom would guarantee a portion of the senior-secured tranche, which could range from about $60 billion to $70 billion. The numbers under discussion would potentially bring the total to as much as $100 billion, which would make it the largest SPV deal ever funded.

The agreement would add to a rush of deals aimed at financing artificial intelligence infrastructure. AI companies like Anthropic are taking a bigger role in the build-out, aiming to ensure they have enough computing capacity. Broadcom, meanwhile, is looking to sell more chips and other data center equipment, challenging Nvidia in this lucrative market.

Since AI infrastructure SPV require private credit backers, Blackstone and Apollo - the same firms that backstopped Nvidia's recent $500 billion compute collateralized deal - are in talks with Broadcom to participate in the chip financing, following a partnership the three companies struck in June to help finance computing infrastructure. The debt - as one would expect ever since Meta set the standard with its Beignet off-balance sheet deal - would be issued by a special-purpose vehicle, or SPV, most of which won't appear on any balance sheet.

The potential deal would help firms including Anthropic access chips and other key AI infrastructure, according to Bloomberg which broke the news. It could be similar to the $35 billion debt agreement that kicked off the group’s AI XPV partnership, they said. 

In the first deal for the AI XPV platform two months ago, we explained that Broadcom backstopped most of the debt and investors including Apollo and Blackstone financed the purchase of custom AI chips to lease to Anthropic. And in a sleight of brilliant financial engineering where everyone pretends there is no actual debt being issued, this enabled the senior debt tranches to win investment-grade ratings at lower borrowing costs. 

However, that is just the start... of both the debt issuance runway and Bessent's headaches. The partnership, which plans to finance more than 20 gigawatts of computing power, will require hundreds of billions of dollars. That level of capacity would roughly equal the output of 20 nuclear plants. 

The unprecedented scale of the borrowing now under discussion underscores the capital requirements of the AI boom, which has prompted a slew of novel debt deals at a pace and scale that’s simultaneously unnerved some investors. In what was actually a huge nothingburger, Nvidia earlier this month announced that a coalition of major financial firms including BlackRock and Goldman Sachs Group were lining up more than $500 billion to help fund the AI build-out, although the agreement was only an MOU and was at best intended to provide some comfort to credit markets. It failed, since Nvidia CDS is now trading at all time wides. 

Broadcom’s chief executive officer said in March that the company expects AI chip sales to top $100 billion next year. The chipmaker has also struck other partnerships, including an accord with Apple that’s expected to be worth more than $30 billion. Broadcom’s valuation has soared in recent years, propelled by agreements to make custom AI chips for firms like OpenAI.

After briefly declining, Broadcom shares rose as much as 1.1% in late trading after Bloomberg News reported on the discussions. The stock had climbed 5.2% this year through the close. But forget about the stock: these days all the action is in the bond trading and/or Credit Default Swap land, and is why Broadcom’s massive new bond deal illustrates the US Treasury’s uphill task in containing long-bond yields

Broadcom’s debt is interesting because its recent competition for Google’s TPU business has been accompanied by a spike in CDS. And, as Bloomberg notes, the monster debt deal will do little to alleviate that pressure and will likely feed down to the CDS of other chip/hyperscaler credit.

As we noted in our EOD wrap, hyperscaler CDS is already back near the July all-time wides, with names that issue new debt seeing clear spikes in CDS pushing their default risk slowly but surely every higher. 

The problem is that unlike equities, where there apparently is an infinite number of greater fools using other people's money to force daily gamma squeezes, there will come a time - and yield - when the bond market simply refuses to keep funding these endless AI boondoggles, especially when China can now do pretty much everything faster, cheaper and almost as effectively. At that point, the AI bubble will finally burst. 

Tyler Durden Fri, 08/21/2026 - 09:15

Things got chippy between Caitlin Clark and Paige Bueckers on Thursday night.