Zero Rss

Xi At WH: We Should Strengthen Communication, The Thucydides Trap Can Be Overcome

Arrival Ceremony and initial Trump-Xi remarks:

Xi: "We Should Strengthen Communication... the Thucydides Trap can be overcome."

The moment of President Xi's arrival at the White House:

NOW: Trump welcomes Xi Jinping to the White House. pic.twitter.com/zvXVkxqaGj

— Clash Report (@clashreport) September 24, 2026

For more of our analysis and what to expect:

Read: Mr. Xi Comes To Washington: What Wall Street Banks Are Expecting

*  *  *

Chinese stocks slipped overnight as the two-month extension of the US-China trade truce fell short of some Wall Street expectations (some desks were hoping for +6 months), offering limited reassurance that today's talks would deliver a long-lasting trade deal, stabilize bilateral ties, and ease uncertainty over global trade.

The mainland CSI 300 Index dropped 1.7%, while the Hang Seng China Enterprises Index pared losses and closed flat. Broader Asian equities also came under pressure after a global bond selloff gathered pace as investors responded to stronger-than-expected US economic data on Wednesday and weak Treasury auction demand amid increasing fears of further Federal Reserve tightening

The two-month truce extension through Jan. 10 removes an immediate source of uncertainty but falls short of the three-to-six-month extension some Wall Street desks were hoping for. 

As we detailed in an overnight note titled "Mr. Xi Comes To Washington: What Wall Street Banks Are Expecting," President Trump rolled out the red carpet for President Xi Jinping at Joint Base Andrews on Wednesday.

President Xi Jinping just arrived in Washington, D.C. for a state visit to the U.S.

President Trump and Mrs. Trump warmly received President Xi and his wife Madame Peng Liyuan at the airport. pic.twitter.com/MkXecYvx2Z

— Mao Ning 毛宁 (@SpoxCHN_MaoNing) September 24, 2026

B-1 Lancer flies over as President Trump welcomes Chinese President Xi to the United States.

Looks like an episode from The Office the way the camera zoomed in on Xi’s face. pic.twitter.com/cqOYgKwnsQ

— Collin Rugg (@CollinRugg) September 23, 2026

Xi's first White House visit since September 2015 includes bilateral talks, a South Lawn ceremony and a black-tie dinner later today with technology executives including Nvidia's Jensen Huang, Tesla/SpaceX's Elon Musk and OpenAI's Sam Altman. Private tea with the Trumps and a National Archives visit are also on the books. 

The high-level diplomatic visit comes as unresolved disputes mount. Trade talks center on the duration of the tariff truce, a proposed "Board of Trade" arrangement covering roughly $30 billion in goods on each side, and potential Chinese purchases of soybeans, Boeing aircraft and LNG. Rare earth supplies, technology restrictions, Iran and Taiwan also loom over the summit.

On the AI front, low-cost Chinese open-weight models are pressuring US frontier labs and eroding moats. Restrictions on advanced chips, allegations that Chinese companies distilled US models, and a proposed AI hotline add another layer to negotiations.

The broad expectation across JPMorgan, Deutsche Bank, TD Cowen and Raymond James is that the summit will produce limited breakthroughs. Wall Street's focus now shifts to how long the truce lasts and whether either side makes concrete concessions.

Earlier this morning, former acting deputy US Trade Representative Wendy Cutler told Bloomberg TV that the temporary US-China trade truce extension signals Trump's dissatisfaction with Beijing's rare earth exports and agricultural purchases.

It's a "way, way shorter time than China had hoped for; China wanted to extend that truce until the end of Trump's term," Cutler told Bloomberg's Heidi Stroud-Watts.

She continued, "We're at a point in our relationship with China where big deliverables are just no longer possible, and we're talking about managing the relationship and keeping it stable, but not improving and strengthening it."

Matt Maley, a veteran Wall Street strategist and chief market strategist at Miller Tabak + Co., wrote in a note that the two-month extension may disappoint investors who were hoping for a longer-term deal and may not bode well for equities. "A lot of investors that I have been speaking to were hoping for a six-month extension," he said.

Read what JPMorgan, Deutsche Bank, TD Cowen and Raymond James have to say here.

Tyler Durden Thu, 09/24/2026 - 10:15

New Home Sales Soared In August, Prices Plunged As Mortgage Rates Spiked

With homebuilder confidence plumbing new depths (and Housing Starts and Permits plunging), expectations were surprisingly for a small bounce back in new home sales in August (after collapsing in July).

Analyst consensus was correct, with a 6.4% MoM jump (+1.3% MoM exp) with July's 10.5% MoM plunged revised dramatically higher to just 4.3% MoM decline. August was the biggest surge in sales since February, but still left sales down 2.0% YoY...

Total new home sales SAAR jumped to 864k - its highest level of 2026...

Median new home prices tumbled, down 5.8% from a year ago to $393,700....

Additionally, average new home sales price plunged almost $50K to $478,700, lowest since since August 2024...

This was the biggest monthly drop in average new home prices on record!

Interestingly, the supply of new homes for sales continues to tread water along with homes under construction. A trend that has been clear all year...

And finally, here's a weird one - as mortgage rates have soared (now back above 7.00%), so sales have also soared?

So did homebuilders finally slash prices as the final 'incentive' to restart sales? Or was this a last minute rush into homes ahead of rate-hikes and soaring mortgage rates?

Tyler Durden Thu, 09/24/2026 - 10:11

A Perfect Storm - Where Are The Umbrellas?

By Michael Every of Rabobank

As the Wall Street Journal puts it today, ‘A perfect storm is raging in the bond market’ as US 10-year yields are at 5.11% vs. 4.93% at yesterday’s close, the largest one-day rise since 2025’s “liberation day”; Canada’s are at 3.95% vs. 3.83%; the UK’s 5.35% vs. 5.20%; Australia’s 5.38% vs. 5.25%; Germany’s 3.55% vs. 3.46%; France’s 4.66% vs. 4.50%, and Japan’s 3.05% vs. 2.98%.

You can blame some of that on yesterday’s data, where the Eurozone services PMI was marginally better than expected at 53.0 and the US manufacturing and services PMIs leaped to 57.0 and 58.7 respectively. It’s great that seven months of Middle East and Russia-Ukraine war with high energy prices haven’t dented growth. The downside is there’s little reason for ‘rate cuts!’ And just imagine if geopolitics gets worse or economies must ‘run hot’ to rearm at pace.

In terms of energy, US Energy Secretary Wright has stated a US diesel export ban won't work, but Politico says the White House is still preparing plan for 90-day ban even as some GOP lawmakers and oil industry representatives are fighting to stave off the announcement. In short, it’s perhaps not for nothing that European, UK, and Aussie diesel prices have been climbing, and where markets might be in for another battering.

Xi Jinping is at a high-stakes US summit with Trump, where their trade truce has been extended… until 10 January: after that, who knows? Germany, which isn’t present, has surrendered anyway: Euractiv reports Berlin is seeking to loosen the EU’s ‘made in Europe’ rules and “rejects protectionism and discrimination” – not more Chinese imports, apparently.

Yet this is about far more than tariffs: Bloomberg notes China is holding sensitive F-35 parts which were mysteriously diverted to Hong Kong (which brings the security of international shipments of goods into question). And, of course, the Wall Street Journal and Bloomberg claim China backs Iran and the Houthis, while its ‘Russia cannot lose’ stance is already accepted.

Trump and Xi are also discussing AI, as the Australian government saw its websites attacked by a Claude agent, a claim was made that Claude may have cracked the secrets of efficient molecular gene editing, with vast implications, top AI leaders warned the UN of global security risks as such systems grow more powerful, and Mark Zuckerberg unveiled an AI ‘charm’ device that can fit on a keychain – so now there is no escape anywhere. The market impact of this is unclear: the potential coming storm isn’t.

There is still no breakthrough between the US and Iran nor of a settlement in the broader region, where tensions smoulder. Putin said his election turnout shows Russians support his military agenda as Foreign Minister Lavrov told the UN that Moscow will not pause its Ukraine ‘operation’, and Ukraine’s Zelenskyy warned of a “painful winter” for Russia if energy truce talks fail. A Russian military helicopter also violated Polish airspace, seeing Warsaw scramble fighter jets. Tony Blair urged PM Burnham to rejoin the EU, which both British voters and the EU get a say in. Argentina’s President Milei demanded Falklands talks with the UK. “My job is to assume things get worse,” Australia’s new defence chief told the financial press. Stormy enough for you?

Meanwhile, the Financial Times echoes something stressed here regarding Japan: “The threat of appearing as a vassal state is growing ever more real for middle powers.” The depressing global realpolitik is that middle powers are NOT powers, just caught in the middle.

That doesn’t mean they aren’t useful: Japan and South Korea are being looked at by the US to ease its shipbuilding and ammunition bottlenecks. However, that means the US has less tolerance for those not working with it and will exert pressure to get the outcomes it wants. The US Treasury openly pushing the ‘independent’ BOJ to end the Yen Carry Trade via rate hikes, threatening a perfect storm for some assets, in exchange for a strong JPY, cheaper commodity imports, and more Japanese domestic investment into defence industries is one key example.

Another is Canadian PM Carney saying he modelled the “extreme tail risk” of the US invading: his army envisioned insurgency tactics like the Afghan mujahedeen. Canada had plans to invade the US under the British Empire, the US had similar ones to invade Canada, and many militaries have wild scenarios in desk draws. This exercise was undertaken as headlines warned the US might invade Greenland. Instead, we have a peaceful new permanent US-Greenland-Denmark security treaty with a de facto loss of Danish sovereignty - which Canada supports.

The US will not tolerate free trade with a country not sticking to its China tariffs, as the USTR just made clear; nor will it accept a large open border with a country that drifts away from it geopolitically. These are not normative statements but realpolitik facts. Economists can model the win/lose of Canada shifting from the US economy, which supports its true value-added industries, to a Europe which needs far less of them (as Ottawa is already seeking carveouts from the EU’s “burdensome requirements” re: deforestation). Geostrategists don’t need to model the extreme fat tail risks in geopolitics when the government is already showing us a “We can be Afghanistan if necessary” national strategy.

However, the tide seems to be flowing in the other direction in that region. Mexico is close to a new USMCA deal, Venezuela is a US client state, Greenland a US security protectorate, and Brazil’s presidential election might see pro-Trump Bolsonaro, Jr. elected. Moreover, 14 Western hemisphere states joined the US to sign a ‘Joint Statement on Defending Hemispheric Sovereignty’ to enhance economic cooperation, explore investment screening mechanisms, safeguard critical minerals supply chains, promote trusted suppliers for digital infrastructure, and fight “narco-terrorism.” In short, even if we have wild weather in Eastern Europe and the Middle East, and storm clouds may even be gathering over parts of Asia, don’t let headlines cloud your vision over the most likely weather on other fronts.

Regardless, when you look at the conflating global backdrop, unless and until geopolitics provides us with new rays of sunshine, there are not going to be enough umbrellas for those who think, act, or trade like it’s 2005 or 2015.

Australia, which has long been in that camp but usually doesn’t need an umbrella, has just seen its Prime Minister rain on that parade (“The post-1945 world order is no longer fit for purpose.”), as has the RBA Governor (“We’re moving into a new world… Can we afford to be that open now? Can we afford to be so dependent on other countries for certain essentials?”). But what’s the policy prescription going to be then, and when? “What is GDP *for*?” Aussie employment data today were an odd mix that doesn’t help matters. Jobs growth was 39.5K, double estimates, but all part time as full-time positions fell, and unemployment was a whisker shy of 4.7% at an official 4.6%, up from 4.5%.

If you need me, I’ll be by the umbrella stand.

Tyler Durden Thu, 09/24/2026 - 10:00

Biden-Nominated Judge Dismisses Michigan Case Accusing Oil Majors Of Suppressing Renewables

Authored by Owen Evans via The Epoch Times,

A federal judge dismissed an antitrust lawsuit in which Michigan accused four major oil companies of acting as a cartel to block renewable energy.

U.S. District Judge Jane Beckering in Grand Rapids on Tuesday rejected a lawsuit filed in January by Michigan Attorney General Dana Nessel, a Democrat, against BP, Chevron, Exxon, Shell, and the American Petroleum Institute.

Nessel claimed they caused Michigan residents to suffer "artificially high home and transportation energy costs."

She said that defendants acted "as a cartel in an unlawful conspiracy in restraint of trade to forestall meaningful competition from renewable energy in order to maintain their dominance in the transportation energy market and primary energy markets in Michigan and nationally in order to reap windfall, and illegal, profits."

The complaint said that the defendants' conspiracy "restrained competition in the primary energy market by suppressing renewable alternatives like solar and wind power in favor of fossil fuels."

The judge said antitrust laws protect against none of the injuries for which Michigan sought a remedy, except for energy overcharges.

"The distance is too great between the alleged conspiracy and Michigan's and its residents' overcharges to find that the conspiracy proximately caused the overcharges," Beckering said.

Other judges have rejected similar climate lawsuits, including in Delaware, Maryland, New Jersey, New York, Pennsylvania, Puerto Rico, and South Carolina.

A lawyer for Chevron previously called Michigan's lawsuit "baseless as demonstrated by multiple related court dismissals."

"Michigan's lawsuit was part of a coordinated campaign against an industry that is vital to everyday life and serves as the engine of America's economy," the American Petroleum Institute's SVP and general counsel Ryan Meyers told The Epoch Times by email. "Climate policy is a federal, not state, issue, and we are pleased with the court's decision."

The Justice Department (DOJ) had submitted a brief in support of the companies in the Michigan lawsuit.

"Michigan is attempting to impose liability for wholly out-of-state conduct related to global greenhouse gas emissions and regulate that conduct under state law," the department wrote.

"Federal law exclusively governs interstate air emissions, including remedies for global climate change."

It said that Michigan is attempting to use state law to "hold energy producers liable for a worldwide problem caused by indivisible greenhouse gas emissions, all because the problem has far downstream alleged effects in Michigan that are no different from, and may indeed be dwarfed by, alleged effects in other states or other parts of the world."

The Epoch Times has contacted Attorney General Dana Nessel's office to ask if the state will appeal.

The Epoch Times contacted BP, Chevron, Exxon, and Shell for comment but received no reply by publication time.

The Trump administration has also taken legal action against the Democratic-led states of Michigan, Hawaii, Vermont, and New York over their climate-related actions, alleging that they interfere with federal authority and the country's energy development, according to the DOJ.

The DOJ in May 2025 accused the four states of overreach through their climate laws and lawsuits.

"These burdensome and ideologically motivated laws and lawsuits threaten American energy independence and our country's economic and national security," then-Attorney General Pamela Bondi said in a statement at the time.

"The Department of Justice is working to 'Unleash American Energy' by stopping these illegitimate impediments to the production of affordable, reliable energy that Americans deserve."

The lawsuits against the four states followed President Donald Trump's April 2025 executive order designed to protect American energy from state overreach, which stated that the nation's energy independence is threatened when state and local governments seek to regulate energy beyond their statutory authorities.

In 2023, California Attorney General Rob Bonta, backed by Newsom, sued California's biggest oil producers for "climate change-related harms," including extreme drought, flooding, and wildfires. A judge paused the litigation in April this year as the Supreme Court takes up the companies' request to quash similar lawsuits.

* * *

Tyler Durden Thu, 09/24/2026 - 09:30

Panic At CNN As Paramount Seeks Elon Musk Equity Investment

Paramount is weighing whether to bring Elon Musk on as an equity investor in its takeover of Warner Bros. Discovery, according to a report from Semafor. David Ellison has been sizing up potential investors as he works to lock down financing before the merger closes. Paramount has not said how much money it hopes to raise, and the size of any Musk investment remains undetermined. A Paramount spokesperson declined to comment, and Musk did not respond to a request for comment.

The news prompted panic inside CNN, which is owned by Warner Bros. Discovery. Staffers at the network had plenty to worry about before Musk's name entered the conversation. Layoffs loom over the newsroom, nobody knows who will run the place once Ellison takes the keys, and now the man who took a chainsaw to Twitter's payroll might own a slice of the operation.

"Amazing it comes out now of course," one CNN source said, pointing to the awkward timing for California Gov. Gavin Newsom, who threw his support behind the merger to keep Paramount jobs in his state. "Not good for Gavin!"

"When it rains...[it pours]," another source said. "It's really scary given what he did at X and DOGE."

At CBS News, David Ellison installed Bari Weiss as editor-in-chief after Skydance acquired Paramount, and she has drawn fierce criticism for firing longtime 60 Minutes correspondents and for how she manages the newsroom's coverage. CNN staffers have watched that saga unfold, and they have taken notes.

Once the merger is complete, David Ellison will control HBO Max, Paramount+, HBO, CBS, CNN, and thousands of film titles. That makes him one of the most powerful figures in American entertainment, and it makes who backs him financially a matter of real consequence.

Larry Ellison, David's father and the founder of Oracle, has personally guaranteed more than $40 billion of the equity financing that makes the acquisition possible. But an investment from Musk would still carry significance.

"An investment from Musk would be a significant vote of confidence in the combined Paramount Warner Bros. from a businessman who also has a devoted retail investor following," explained Semafor business reporter Rohan Goswami. "A check from Musk or other big financial backers would also give Paramount a more diversified investor base, and reduce Larry Ellison's financial burden."

The relationship between the two men runs deep in both directions. Larry Ellison invested in Tesla in 2018 and sat on its board for several years. When Musk took Twitter private in 2022, Ellison invested $1 billion in the deal.

"Musk's dollars and political influence were concerning to Democrats during the 2024 election, given his control of X," writes Goswami. "The possibility of him having even partial ownership in CNN and CBS would likely raise alarm bells in Washington, even though it is unlikely Musk would have formal input over the company's operations."

The news of Musk's potential involvement comes days after the $110 billion merger cleared its final hurdle. Paramount settled the antitrust lawsuit that California Attorney General Rob Bonta brought against the deal.

Paramount agreed to spend an additional $1.5 billion on domestic production over five years. The company must release 30 films in theaters every year, rising to 32 after the first two years, with at least 20 wide releases, rising to 21, and four independent films each year. If Paramount misses any of those targets, it must sell Miramax Studios and pay $30 million for every film it comes up short. The settlement also forces Paramount to negotiate cable deals separately and commits it to raising domestic production from 5% of all films to 20%, or even 30%, if Congress passes certain tax credits. The settlement also created a News Editorial Independence Board for CBS News and CNN, though nobody has spelled out what powers it will hold. The agreement said nothing about layoffs.

Still, for a newsroom that has spent years telling viewers to fear Elon Musk, the prospect of him buying in carries a certain poetry.

Tyler Durden Thu, 09/24/2026 - 09:15

Futures Tumble As Yields Hit Multi-Decade Highs, Oil Surges

Futures are lower with Tech underperforming as part of a global risk-off tone with few areas of safety, driven by a global bond rout that has sent yields across the globe to levels not seen in a generation. As of 8:00am ET, S&P futures are 0.6% lower with Nasdaq futures sliding 1.0% and reflecting the fallout from Wednesday’s barrage of inflationary signals, which sent stocks in Asia and Europe lower. In premarket trading, semis and memory are lagging the broader tech tape for the 2nd day, with software seeing slight outperformance, but still lower. Defensives and energy are leading cyclicals. The yield curve is bear steepening with the back-end yields making multi-year highs; pushing the 10Y yield to 5.14% and the 30Y yield to the highest since 2004. This follows Wednesday’s US data and auction-led selling in US paper with an ascent in energy prices today driving the moves further. The rout in bonds swept into Asia, with yields in Japan, Australia and New Zealand climbing by more than 10 basis points on Thursday. The USD remains bid and DXY is less than 40bp from its 52-wk high. In commodities, energy and ags resume their leadership as the market reduces its optimism for an imminent solution in the MidEast; metals are weaker with precious lagging ase.  The Trump-Xi meeting will be one to watch on today's calendar, following US Treasury Secretary Bessent's announcement of a two-month extension to the trade truce which appears to have disappointed markets as it was less than what China expected. US economic data slate includes 2Q current account balance and weekly jobless claims (8:30 a.m.), August new home sales (10 a.m.) and September Kansas City Fed manufacturing activity (11 a.m.) 

In premarket trading Magnificent Seven: Alphabet (GOOGL) -0.7%, Amazon (AMZN) -0.9%, Apple (AAPL) unchanged, Microsoft (MSFT) -0.6%, Tesla (TSLA) -1%, Nvidia (NVDA) -1.1%, Meta Platforms (META) -2%

• Darden (DRI) falls 5% after the restaurant-chain operator posted first quarter sales that disappointed.
• Dropbox (DBX) declines 5% after Citi downgraded the file management software company to sell, writing that recent optimism about its AI strategy “derives too much success too early.”
• Etsy Inc. (ETSY) slips 2% after Arete downgraded the online retail platform to neutral, citing concerns over its valuation and growth sustainability.
• Everpure (P) jumps 7% after the data-storage company forecast revenue for 2028 that exceeded the average analyst estimate.
• MGM Resorts International (MGM) is down 9% after Barry Diller’s People Inc. dropped plans to acquire the rest of the casino giant.
• Stitch Fix (SFIX) falls 19% after the online personal styling platform forecast a much weaker full-year 2027 Ebitda that analysts expected.
• Viking Therapeutics (VKTX), which had surged 36% Tuesday on experimental weight-loss drug results, is down 12% after offering $200 million in common shares and another $200 million in convertible notes to help fund clinical development.

In other corporate news, a consortium backed by BlackRock and IFM are said to be closing in on $25 billion deal to buy Stack Infrastructure’s Asia Pacific data centers. Morgan Stanley is working to contain the damage from a leaked deal list after one of its top bankers accidentally sent an email to some clients containing a list of deals the firm was working on and monitoring.

Wednesday’s strong economic data, a weak debt auction, and mounting concerns over diesel prices and policy is rattling both Wall Street and Main Street, driving yields across most maturities to the highest in almost two decades. This has pushed inflation anxiety back to being front and center for investors, with concerns about Brent above $100 and an overheating US economy piling fresh pressure on bond markets. That’s taken the shine away from stocks, pulling the Nasdaq 100 down from a record high.

"Higher bond yields are becoming a more meaningful headwind for equities,” said Simon Wiersma at ING Bank. “Middle East de-escalation could take some pressure off bond markets, but the bigger story is the structural rise in global borrowing needs.”

Futures reflect the fallout from Wednesday’s barrage of inflationary signals. According to BBG, Traders are unlikely to commit fresh capital before tonight’s Trump-Xi summit, despite Bessent saying the US and China have extended their trade truce.

Oil’s latest leg higher came after an Iranian official warned Tehran may expand the war to the Indian Ocean if the US or Israel attacks again. “Now that the war has expanded from the Persian Gulf and the Strait of Hormuz to the Red Sea, it may, in the next phase of a potential conflict, widen further,” Iran’s semi-official Fars cited Yahya Rahim Safavi, who’s also a senior member of the Islamic Revolutionary Guard Corps, as saying.

“Oil prices remain the key driver overall,” said Nadege Dufosse, head of multi-asset at Candriam. “Investors are flying blind as it’s impossible to guess which way the talks between Iran and the US will go.”

Energy Secretary Chris Wright told oil industry leaders to brace for possible US curbs on diesel exports amid an intensifying debate within the Trump administration over that approach.  A potential diesel export ban would carry “significant implications” and even have the counterintuitive effect of an increase in gasoline prices if US refiners cut runs, notes Morgan Stanley.

Meanwhile, as extensively noted here, the entwined mix of AI and inflation is causing angst. Debt pressures return with Amazon, Alphabet CDSs topping the year’s highs, and Nvidia insurance costing more amid circular financing concerns.

“Before the year draws to a close, a choice is likely to be needed between inflation and the debt-financed capital expenditure boom,” notes Jonestrading Chief Strategist Mike O’Rourke. “Main Street has paid the price for five-plus years and does not have much left to give,” O’Rourke adds.

Hyper CDS new all time wides, led by ORCL, SPCX, NVDA and META pic.twitter.com/gr7OcinLUl

— zerohedge (@zerohedge) September 23, 2026

Fresh warnings about price pressures were raised at two rate decisions in Europe. The Swiss National Bank lifted its inflation forecast as it dialed down its threat of intervention to support the franc. Norges Bank increased borrowing costs for a second time this year and said it was primed to hike again. For the Fed, swaps fully reflect three quarter-point hikes over the next year, with significant hedging for a fourth. 

“A resolution in the Middle East would certainly bring some relief, particularly to European rates given the energy channel, but in the US the story goes beyond oil at this stage,” said Alessandro Gabellone at Bank Degroof Petercam. 

“Inflation has been above target for years, while fiscal imbalances and rising interest costs are increasingly part of the discussion around long-term yields,” he said.

Traders will follow the summit between Trump and China’s Xi Jinping later today at a time when tensions between the world’s two biggest economies persist over rare earths, technology curbs and Taiwan. “Super Intelligence” would be a big topic of discussion, Trump said on social media. “I want to leave it exactly where it is. That is China’s position also.”

Treasury Secretary Scott Bessent announced that a trade agreement struck by the leaders last year will now run an additional two months until Jan. 10, clearing the way for two more meetings in the coming months at summits in Shenzhen and Miami.

In Europe, the Stoxx 600 is down 0.4% with the average yield rising to levels not seen in almost two decades. Tech and autos are the worst performers. Energy gains. Here are some of the biggest movers on Thursday:

• Mitchells & Butlers shares rise as much as 3.9% after the pub chain reported a pick-up in like-for-like growth in the final quarter, aided by a strong showing over the August bank holiday weekend.
• Motor Oil Hellas shares rise as much as 1.9% after Goldman Sachs upped its price target on the Greek refiner, predicting it to benefit from higher diesel crack spreads.
• BioGaia gains as much as 5.1% after Danske Bank reiterated its buy rating and raised its price target on the Swedish health additives company, seeing a good risk/reward opportunity going into the company’s third-quarter report, due on Oct. 22.
• Raspberry Pi rises 23% after first-half revenue at the micro-computer maker jumped 90% to $256.9 million.
• OVS shares rose as much as 4% in Milan trading after the Italian fashion retailer’s adjusted net sales grew 11% year on year.
• H&M shares fall as much as 3.7% after US tariff refunds were largely credited for driving a beat in third-quarter profits at the Swedish fast-fashion retailer.
• Tryg shares fall as much as 3.5% after Danske Bank downgraded the Danish insurance firm to hold from buy, predicting headwinds from inflation and rising interest rates.
• Verbio declines as much as 6.9% as Jefferies says that despite a solid finish to the year, the biodiesel and bioethanol fuel producer’s new FY26/27 Ebitda guidance is below consensus.
• Vistry shares drop as much as 11% after the housebuilder reported weak interim results and outlined the findings from the review conducted by its CEO.

Asian stocks declined for a second day amid renewed pressure from elevated oil prices and US bond yields. The MSCI Asia Pacific Index dropped 0.9%, with China the worst performer in the region. Indian equities dropped the most in over two months amid a selloff in the heavyweight financial sector after the nation’s insurance regulator proposed changes that include capping commissions. Japanese stocks were mixed as markets reopened following a three-day holiday. South Korea was shut for a holiday.  .

In FX, the Bloomberg Dollar Spot Index continues to carve out fresh multi-month highs, adding 0.2%. The Norwegian Krone leads G10 FX, whilst the Swiss Franc lags after respective rate decisions. USD/JPY has eclipsed its 200DMA for the first time since early September.

In rates, treasuries are mixed in early US session with the yield curve steeper around a little-changed 7-year sector. Front-end tenors unwind some of Wednesday’s steep losses while long-end has added to them, lifting 30-year yield to 5.44%, highest since 2004. 10-year reached 5.15%, highest since 2007. US 2-year yields are lower by around 3bp with long-end yields higher by around 3bp, close to cheapest levels of the day, steepening 2s10s and 5s30s curves by 4bp-5bp. 10-year yield is little changed near 5.125%, with bunds in the sector lagging by 1bp and gilts outperforming by 2bp. European rates are a touch higher with the French-German 10-year spread widening to about 111bps. Higher energy costs have hit sentiment in Europe. $44 billion 7-year note auction at 1 p.m. New York time follows poor demand for Wednesday’s 5-year note sale, which tailed by more than 3bp. WI 7-year yield near 5.055% is ~54bp cheaper than last month’s, which stopped on the screws. IG dollar issuance slate empty so far. Five borrowers priced a combined $5.2b Wednesday, paying about 6bp in new issue concessions on deals that were 1.9 times covered. Weekly volume stands near $33b, about $6.5b short of the $40b projected by dealers. Focal points of US session include weekly jobless claims data and 7-year note auction. 

In commodities, WTI crude oil futures are up around 1.4%, off session highs, extending Wednesday’s rally after an IRGC official threatened to expand the war in the Middle East into the Indian Ocean.Brent is higher by 2.5% and up nearly 10% from the week-to-date low as hopes of a US-Iran deal fade and rhetoric remains hostile. Brent gained after US Energy Secretary Chris Wright told oil industry leaders to brace for possible US curbs on diesel exports amid an intensifying debate within the Trump administration over such a move. The firmer greenback is dragging precious metals lower with spot gold down 0.6%. Bitcoin declines nearly 1%. 

US economic data slate includes 2Q current account balance and weekly jobless claims (8:30 a.m.), August new home sales (10 a.m.) and September Kansas City Fed manufacturing activity (11 a.m.) Fed speaker slate includes Richmond’s Barkin (8:30 a.m.), Cleveland’s Hammack (8:50 a.m.) and Philadelphia’s Paulson (10:10 a.m.). New York President John Williams said in a London event Thursday that more work needs to be done to lower US inflation.

Market Snapshot

Top Overnight News

• The US 30-year yield climbed to its highest level since 2004 as comments from Iran further stoked oil-driven inflation fears and fiscal concerns. Equity futures fell. BBG
• Brent surged to around $106 after a military adviser to Iran’s supreme leader said Tehran may expand the war to the Indian Ocean if the US or Israel attacks again, further undercutting hopes of a deal. BBG
• Saudi Arabia has sold almost 100 million barrels of oil to Asian buyers since the middle of last week, helping to avert a looming supply crunch in the region. The crude will be sent via the Strait of Hormuz to buyers including Chinese state-run and independent refiners, as well as processors in India, Japan and South Korea. BBG
• President Donald Trump’s strong rapport with Xi Jinping is set to be on display in Washington this week as the Chinese leader makes his first U.S. state visit in more than a decade. But below the surface-level pageantry at the White House, little is likely to be resolved as the world’s two biggest economies continue to spar over trade, Taiwan, AI and more. NBC
• US Treasury Secretary Scott Bessent announced on Wednesday that Washington and Beijing have agreed to extend the trade agreement reached in South Korea for just two months, as Chinese President Xi Jinping arrives in Washington for a state visit. SCMP
• Large cargo ships have recently paid up to $5 million to pass through the Panama Canal, as the global shipping industry reacts to trade disruptions from the Iran war and extreme weather patterns in the Western Hemisphere. WSJ
• The AI build-out is on track to become the biggest economic bet in U.S. history, dwarfing the investments made to fund other huge U.S. infrastructure projects such as the railroads, the highway system and the plumbing for the internet. WSJ
• AI firms are rushing to discount their products as some enterprises express caution about paying full price for all the new tools. The Information
• Sellers are feeling the strain of US mortgage rates around 7%. Nearly one in five homes for sale had a price cut in August, while 45% of sales involved a seller concession, according to Redfin data. BBG
• Mark Carney said he had seriously considered the “extreme tail risk” of a US invasion when asked about the possibility in a NYT interview. BBG
• A US judge issued an order blocking the Trump administration’s White House ban on CNN, MS NOW and Politico.
• US Senate Majority Leader Thune believes President Trump is open to implementing AI guardrails despite his public defiance on the issue: Axios.
• An industry group representing US tech companies is reportedly pushing the US administration to withdraw its proposal to charge for H-1B visas: WSJ.
• BofA Total Card Spending (w/e Sep 19th) +6.9% Y/Y (prev. +5.8% W/W); surging gas prices have opened up a gap in ex-gas spending between higher and lower income households.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly pressured following on from the declines in global peers alongside the recent bond turmoil and jump in yields, owing to several factors including strong US data, hawkish Fed rhetoric and mixed reports regarding a US diesel export ban.
ASX 200 retreated with the declines led by weakness in miners, real estate and materials, while sentiment was not helped by mixed jobs data including an unexpected rise in the Unemployment Rate to a five-year high. Nikkei 225 outperformed after Japanese participants returned from the long weekend and with tech names playing catch-up to the recent AI-related momentum. Hang Seng and Shanghai Comp retreated despite early optimism from President Xi's state visit to the US, while a two-month extension to the US-China trade truce until January 10th also failed to spur risk appetite.

Top Asian News

• PBoC will offer lenders a record amount of up to CNY 1tln in overnight funds each day over the upcoming holiday period, according to Bloomberg.
• PBoC to comprehensively use and timely adjust monetary policy tools to keep liquidity ample; to step up counter cyclical adjustments.
• Japan's Finance Ministry is to consider cutting issuances in liquidity-enhancement auctions for medium-term JGBs, according to sources.
• Japanese Finance Minister Katayama said the principles on forex established since the joint US-Japan intervention remain in effect, while she won't comment on specific FX levels.
• Japan reportedly plans to finance economic security spending mainly through "bridging bonds", reducing the need for the issuance of deficit bonds, Nikkei reported citing sources.

European bourses (STOXX 600 -0.3%) opened entirely in the red and has come under a fresh leg of pressure in recent trade amid the upside across the energy space. The source of the move came amid comments by the Senior adviser to Iran’s Supreme Leader Major General Safavi, saying the US conflict could expand further into the Indian Ocean. Sectors highlight the negative bias. Energy, Food, Beverages & Tobacco and Optimised Personal Care are the only sectors in the green. Leading the downside is Tech, followed by Autos and Financial Services. 

Top European News

• The UK Treasury is open to smaller fiscal headroom and Chancellor Healey may accept a smaller fiscal buffer to reduce tax rises in next month’s Budget, according to FT.
• German Ifo Expectations (Sep) 90.4 vs. Exp. 89.3 (Prev. 89.1).
• German Ifo Current Conditions (Sep) 89.5 vs. Exp. 89 (Prev. 88.5).
• German Ifo Business Climate (Sep) 89.9 vs. Exp. 89 (Prev. 88.8).
• French Business Confidence (Sep) 101 vs. Exp. 102 (Prev. 101).
• French Consumer Confidence (Sep) 86 vs. Exp. 85 (Prev. 86).

Central Banks

• Norges Bank hiked rates by 25bps to 4.50%. Expectations heading into the announcement were split. The Bank noted that inflation has been above target for several years, and that by raising the rate, it will help reduce inflation and that the policy rate will be elevated for a time. The Committee is prepared to raise the policy rate further if warranted by the inflation outlook. The decision was backed by continued elevated inflation metrics, with the Bank alert to upward risks to the inflation outlook; it stated that "Inflation may then become stickier and harder to bring down again". Governor Bache suggested that the inflation outlook has not materially changed, as such, stated that the Bank is prepared to deliver further rate hikes to bring inflation down to target. This is reflected in the rate path projection, which does not point to further tightening later this year, but will continue into Q1/Q2'27.
• The Riksbank left rates unchanged at 1.75%, as expected. With the commentary, and particularly the forecasts, a hawkish bias can be seen with the language being that "it is expected that the increases to the policy rate will begin this year", while the forecasts imply a hike around end-2026/start-2027 and then another one in the Q2/Q3-2026 period, and then thereafter there is some optionality of another hike by Q3-2028, a marked hawkish tilt vs the June projections. Albeit, this is caveated by the assessment that Q2 GDP strength was somewhat due to temporary factors, though the general commentary remains constructive. Overall, the strengthening of the SEK highlighted the overall hawkish tone.
• The SNB left rates unchanged at 0%, as expected. The main update was the tweak to the FX language, which now shows "...willing to be active in the foreign exchange market..." from the June line of "If necessary, the SNB has an increased willingness to intervene in the foreign exchange market", omitting the "increased" framing. In terms of the Bank's inflation forecast, they were lifted across 2026, 27 and 28, primarily due to higher energy prices. They also noted that the recent uptick in inflation was attributed to a rise in goods inflation, driven by higher prices for oil products. In an immediate reaction, the CHF weakened given the aforementioned change to the intervention language.
• Fed's Williams (voter, Neutral) said the big challenge is on inflation and need to get it back to target in a timely manner while stating that it is reasonable to see another rate hike by year-end. He said short-run inflation expectations have been more encouraging, though the longer term they have not. On the economy, Williams said it has been remarkably resilient and downside risk to achieving maximum employment have receded.
• BoE's Lombardelli said policy is increasingly likely to need to tighten if elevated energy prices persist. On second-round effects, she said the absence of evidence is something but not much, and that it is likely still too early to see evidence in the data. On policy, Lombardelli described it as restrictive and that it is increasingly likely to need to tighten if elevated energy prices persist, absent clear evidence of disinflation or weaker activity.
• BoE's Dhingra said most of the financial conditions have done a lot of tightening work already in the UK and is encouraged on what pricing is doing. Dhingra added that the labour market looks pretty weak, while highlighting that winter energy prices will be critical for second round effects.
• ECB’s Kocher said the ECB must prevent excessively high inflation from becoming entrenched and that the Eurozone economy remains fragile. Kocher added that there has been signs of somewhat more Eurozone momentum since summer.
• ECB's Schnabel said the energy shock is much more persistent than thought.

FX 

• G10s are mostly lower against the USD, albeit only marginally. The EUR holds afloat, joined by the Kiwi, Loonie and GBP, whilst the CHF underperforms a touch.
• DXY holds within a 101.00 to 101.23 range. The Dollar traded steady throughout overnight and early-European trade, but then moved higher alongside a bout of strength in the energy complex. This came after an IRGC official noted that the “war could expand” to the Indian Ocean or Bab el Mandeb Strait if the US decides to go to war again. More generally, crude benchmarks will be digesting reports that the US dismissed Iran's Hormuz offer during UN talks, saying Tehran does not control the Strait.
• Fed’s Williams spoke this morning, where he suggested it was reasonable to see another rate hike by year-end. Markets are pricing in a 38.4% chance of one 25bps hike by year-end, with a c. 50% chance of another this year.
• Policy announcements from the SNB, Riksbank and Norges Bank have led to some volatility in the respective currencies. Kicking off with SNB, the Bank opted to hold rates, lifted inflation projections and removed its “increased willingness” for intervention. As such, the CHF moved lower following the announcement. Over in Sweden, the SEK was initially choppy following the Bank’s decision to hold rates. But then gradually strengthened, as the Bank lifted its rate path forecasts to imply a hike towards the end of this year/start of next year. Elsewhere, the only hike today was delivered by Norges Bank. It lifted its Key Policy rate by 25bps to 4.50%, and reiterated its tightening bias. EUR/NOK knee-jerked lower as traders unwound their bets of a hold, before paring around half of that move.

Fixed Income

• The very modest bearish action at the start of the morning has given way to downside of c. 40 ticks in Bunds. Amidst a combination of factors, namely: energy upside on Iranian commentary, hawkish central banks, strong German Ifo & trade/tariff concern ahead of the US-China meeting, and also from Germany via the VDA.
• Unsurprisingly, the bulk of the move was on the Iranian adviser Safavi intimating that the “scope of the war may expand…”, to include the Indian Ocean and other regions. An update that, over the course of around one hour, lifted Brent by over USD 2.00/bbl and pushed the US 30yr yield to its highest in over 20 years.
• Bunds hit a 119.87 trough, nine ticks above Wednesday’s contract low. As mentioned, much of the focus has been on yield action, with upside seen across curves globally and a slightly steepening bias seen.
• For USTs, no real move to Fed’s Williams, though he did note that pricing for another hike by end-2026 is “reasonable”. As it stands, markets imply a 38% chance of one 25bps hike by year-end, and just over a 50% chance of two. At a 104-28 contract low with yields bid across the curve.
• Ahead, the focus remains on central banks with several speakers due, before the Trump-Xi meeting begins and the readout which is scheduled for just after 15:00BST commences. A meeting that is framed by recent remarks from Treasury Secretary Bessent that while the truce has been extended to January 2027, he does not know if a bigger deal can be done.
• Italy sells EUR 2.5bln vs Exp. 2.5-3bln 3.00% 2028 BTP: b/c 1.64x (prev. 1.58x), average yield 3.64% (prev. 3.02%).

Commodities

• WTI Nov and Brent Dec futures started the European morning with only modest gains, but gradually picked up as the session progressed. The bullish bias potentially comes amidst the lack of US-Iran diplomatic progress and after an IRGC official noted that the “war could expand” to the Indian Ocean or Bab el Mandeb Strait if the US decides to go to war again.
• Focus also remains on the potential US diesel export ban, although the White House denied reports that the Trump administration is preparing a 90-day ban. Morgan Stanley warned that such a move, while not its base case, could have significant implications and potentially raise gasoline prices as barred diesel exports fill storage and force refiners to cut runs. The bank estimated refiners could need to reduce runs by around 2mln BPD, in turn cutting gasoline supply by roughly 650k BPD.
• WTI trades around USD 93.70/bbl within a USD 91.23-94.69/bbl range, while Brent trades above USD 100.00/bbl within a USD 97.09-100.94/bbl range. Dutch TTF is firmer, with the contract trading within a EUR 73.39-75.04/MWh range. The Trump-Xi meeting could provide some impact amid reports of potentially reducing or removing China’s 15% tariff on US LNG.
• Precious metals remain subdued following Wednesday’s surge in the USD and global yields, with hawkish Fed rhetoric and strong US data continuing to weigh on the complex. Spot gold trades towards the bottom of a USD 4,254-4,303/oz range, with the 100 DMA at USD 4,309/oz. Spot silver similarly trades around the lower end of a USD 63.52-64.55/oz range.
• Base metals are mixed/rangebound against a subdued risk backdrop, with copper also digesting news that BHP suspended operations at its Escondida mine in Chile following an accident. 3M LME copper resides in a USD 14,575.08-14,677.78/t range.
• Saudi Aramco CEO said that it is studying a "a fourth and a fifth route" for crude oil exports and noted that the Co. can restore disrupted operations within days.
• China’s NDRC raised retail fuel prices in the current bi-monthly cycle, effective September 25th, with gasoline prices up CNY 395/tonne and diesel prices up CNY 385/tonne.
• BHP (BHP AT) said operations at the Escondido mine in Chile were suspended following an accident.

Trade/Tariffs

• US President Trump said it was a great greeting with Xi and that the entire tech and banking world will be at Thursday's dinner. Trump also stated that he had some great conversations with leaders at the UN General Assembly.
• Chinese President Xi said he looks forward to in-depth exchanges with US President Trump and will expand cooperation between the two countries in various areas, while he is confident the US trip will produce fruitful results. Xi also commented that China and the US must be allies, not adversaries, and he is confident China and the US can find the right path to coexist in a new era.
• US Treasury Secretary Bessent said the US-China trade truce was extended to January 10th, while he doesn't know if a bigger trade deal can be done with China and could just roll the current deal forward. Furthermore, Bessent said that presidents Trump and Xi are expected to meet four times this year and that China is doing well so far in meeting 2026 pledges.
• China's MOFCOM said they discussed AI with the US under the bilateral economic and trade consultation mechanism.
• Germany's VDA is reportedly endorsing new tariffs against China for the first time, according to Handelsblatt.
• India cut import duties on crude palm oil and soybean oil to 5% (prev. 10%).

Geopolitics: Iran

• Senior adviser to Iran’s Supreme Leader Major General Safavi said the scope of the war may expand to the Indian Ocean and other regions, if the US starts a new war.
• Israeli source said an additional round of strikes against Iran seems to be a matter of time, Al Hadath reported. The source added that Iran is intensifying the transfer and fortification of the Natanz nuclear project. Additionally, the source said Israel does not see a real chance of reaching an agreement between the US and Iran, and that the US wants to end the Iran war with a political agreement or a decisive attack that topples the regime. On further strikes, the Israeli source said they will strike Iranian nuclear facilities again if Iran crosses the red lines, with or without US involvement.
• US Treasury Secretary Bessent said they are getting sometimes up to 17mln oil barrels out of Hormuz and noted that probably 80-90% of Iran's external flights are shut down.
• Chinese Foreign Minister said the Strait of Hormuz conflict must be resolved through dialogue and calls on all parties to seek a peaceful solution, Al Arabiya reported.
• Pakistan's Foreign Minister told Iran's Foreign Minister that they must remain committed to dialogue and diplomacy.
• Iran's Foreign Ministry noted that Iran's Foreign Minister held a meeting with Pakistani counterpart at the UN General Assembly.
• UK Chancellor Healey said he spoke with US Treasury Secretary Bessent today about stepping up pressure on Iran and how to work together to drive growth in both nations.
• EU's Costa spoke to Iran's President Pezeshkian and urged Iran to resume its cooperation with the IAEA, while he also called for an end to Iran's strikes against its neighbours and a full restoration of freedom of navigation in the Strait of Hormuz.
• Initial reports noted two explosions in Bandar Abbas and one in Sirik, southern Iran, with the explosion in Sirik reportedly coming from near the coast, off to the sea.

Geopolitics: Ukraine

• Russia's Kremlin said no decision yet has been made on a December summit between US President Trump and Russian President Putin and that discussing a possible agenda is premature.
• Waves of Russian missiles attacked Kyiv and more than a dozen heavy explosions were heard in 30 minutes, according to an FT reporter.

US Event Calendar

• 5:00 am: Aug F Building Permits, prior 1394k
• 8:30 am: 2Q Current Account Balance, est. -257.4b, prior -226.83b
• 8:30 am: Sep 19 Initial Jobless Claims, est. 200k, prior 196k
• 8:30 am: Sep 12 Continuing Claims, est. 1740k, prior 1730k
• 10:00 am: Aug New Home Sales, est. 615.55k, prior 607k

Central Bank Speakers 

• 4:10 am: Fed’s Williams Speaks During Moderated Discussion
• 8:30 am: Fed’s Barkin In Fireside Chat With Economic Club of Washington
• 8:50 am: Fed’s Hammack Delivers Opening Remarks at Inflation Conference
• 10:10 am: United States Fed’s Paulson Speaks At Fintech Conference

DB's Jim Reid concludes the overnight wrap

As we go to press, the main story is still the huge global bond selloff, with yesterday seeing the biggest jump in the 10yr Treasury yield (+15.2bps) since the market turmoil around Liberation Day in April 2025. The main driver was a strong batch of PMIs, along with a rebound in oil prices, which both led to mounting speculation about faster rate hikes. Indeed, futures this morning are pricing a 71% chance of a Fed rate hike at the next meeting in October. So that drove a bunch of records, and we even saw the 5yr Treasury yield (+16.7bps) rise above 5% for the first time since 2007. In addition, there were growing signs of stress in Europe, where the Franco-German 10yr spread (+6.2bps) rose to 110bps by the close, marking its highest level since the Euro crisis in 2012. So it was a rough day all round, and risk assets came under fresh pressure, with the S&P 500 (-0.75%) posting its biggest decline in a month, with futures down another -0.21% this morning.

Those moves had several catalysts, but the biggest were the US flash PMI numbers, where the composite PMI unexpectedly hit a 5-year high of 58.4 in September (vs. 55.3 expected). So that played into the narrative of resilient growth, which in turn would enable the Fed to keep hiking rates to deal with inflation. And significantly, this was part of a global theme, as we found out earlier that the Eurozone composite PMI hit a 3-year high of 53.1 (vs. 51.7 expected). So if anything, the initial signal from the PMIs suggested that growth was accelerating in September across many of the world’s biggest economies.

That positive data drove the hawkish repricing, but it got a further boost thanks to a fresh rebound in oil prices. Indeed, Brent crude (+3.86%) ended a run of 5 consecutive declines yesterday, closing back up at $103.08/bbl. That came amidst growing doubts about the chance of a US-Iran deal, despite the talks at the UN this week. For instance, a spokesman for Iran’s foreign ministry said that Iran had presented a list of conditions to the US for restarting negotiations via Qatari mediation. That included the US accepting a shipping route agreed by Oman and Iran, along with an end to the naval blockade and the release of Iran’s frozen assets. And Iran’s President Pezeshkian struck a defiant tone, saying that Iran would not allow freedom of navigation through Hormuz while the US blockade and sanctions remain in place. So for investors, the sense was that the two sides were still far apart, and the 12-month Brent future (+0.42%) hit a 3-month high of $80.96/bbl by the close. So it was clear that investors were still expecting a protracted period of higher oil prices.

Collectively, that strong data and the oil rebound led to growing speculation about faster rate hikes. But interestingly, this fits into the usual pattern of recent cycles, where investors have tended to underestimate the scale of hikes at the outset, before adjusting in a hawkish direction. We explored this pattern on Monday (link here), where we pointed out several reasons that leant in the direction of faster hikes. For instance, much as inflation is lower than in the 2022 cycle, broader financial conditions are much more accommodative today. Moreover, another historical pattern is that central banks tend to correct for the last crisis, and in 2021-22 they faced criticism for not reacting to inflation fast enough, so we’re already seeing a more hawkish reaction function this time. And looking forward, the latest uptick in commodity prices hasn’t filtered through to the inflation numbers yet either.

This hawkish repricing was clear over the last 24 hours, and when it came to the Fed, market pricing for an October hike rose from 53% on Tuesday, to 69% by last night’s close. Similarly for the ECB, the chance of an October hike rose from 48% on Tuesday to 66% by the close. So in other words, there was a mounting sense that central banks would need to accelerate the hiking cycle, and that hikes at every other meeting might not be enough to get inflation back to target again. Looking beyond the next meeting as well, market pricing also shifted hawkishly. So for year-end, investors are now pricing in 37bps of Fed hikes, implying a near-even chance that they’ll deliver two more hikes before the year is out, which is the most hawkish pricing for December 2026 so far. That backdrop led to another huge bond selloff yesterday, with yields seeing big rises across the board. That was particularly clear for US Treasuries, where the 10yr yield (+15.2bps) saw its biggest daily jump since the market turmoil after Liberation Day in April 2025, taking it up to a post-2007 high of 5.11%. The moves were clear across the curve as well, with the 2yr yield (+14.2bps) jumping to its highest since May 2024, at 4.90%, whilst the 30yr yield (+9.9bps) hit a post-2007 high of 5.40%. A weak 5yr auction also didn’t help matters, with yields up to their intraday highs after $70bn of notes were sold at 5.03%, +3.1bps above the pre-sale yield. And in turn, the rise in US yields saw the dollar index (+0.49%) rise to its highest since July, while gold (-1.68%) had its biggest decline in two weeks.

That selloff was echoed in Europe, where the energy price gains and the strong PMIs drove a hawkish repricing as well. So that pushed bond yields up to fresh multi-year highs, with the 10yr bund yield (+9.2bps) at a post-2009 high of 3.55%, whilst the 10yr OAT yield (+15.4bps) hit a post-2008 high of 4.66%. Notably as well, it also pushed the Franco-German 10yr spread up to 110.4bps, which was a level last seen in July 2012, a few weeks before Mario Draghi delivered his famous “whatever it takes” speech that was a key turning point in resolving the crisis.

All that put a lot of pressure on equities, even though the growth data surprised on the upside. So the S&P 500 (-0.75%) posted its biggest decline in a month, with all the major sector groups apart from energy (+1.04%) losing ground. The NASDAQ (-1.13%) and the small-cap Russell 2000 (-1.77%) saw even larger falls. Meanwhile in Europe, the STOXX 600 (-0.44%) also saw a pullback, alongside declines for the DAX (-0.66%) and the CAC 40 (-0.39%) as well.

Overnight in Asia, the bond selloff has continued, with Japan’s 2yr yield (+4.8bps) up to a post-1995 high of 1.88%, whilst the 10yr yield (+11.1bps) is up to its highest since 1996, at 3.07%. And that’s been echoed in other countries, with Australia’s 10yr yield (+10.4bps) up to 5.32%, whilst New Zealand’s 10yr yield (+14.1bps) is up to 5.04%, the highest since November 2023. So equities have also struggled, with losses for the Hang Seng (-0.52%), the CSI 300 (-1.29%), the Shanghai Comp (-0.93%) and the S&P/ASX 200 (-0.80%). The main exception has been the Nikkei (+0.94%) although that reflects a catch-up after the index has been closed for the previous three days. Meanwhile in South Korea, markets are closed for a public holiday.

Looking forward, a key event today will be the summit between Presidents Trump and Xi. From a market standpoint, the main news was US Treasury Secretary Bessent saying they’d agreed to extend last year’s trade truce by two months, which will now keep tariffs lower until January 10. This extension was shorter than had been floated by US officials beforehand, but does offer more time to potentially reach a longer deal.

Finally, as oil prices were rising, another energy story yesterday was around whether the US might restrict diesel exports. Trump said on Tuesday that he was considering a possible export ban, and US diesel prices then slumped yesterday after Politico reported that the US was preparing a plan for a 90-day export ban. However, Reuters then reported a White House official who said this wasn’t accurate, while US Energy Secretary Wright said that “a full blanket ban or zero exports of diesel” are not being discussed. However, he did say that the administration was working with refiners to voluntarily curb exports of diesel. So despite the rises in crude, US wholesale diesel prices settled -3.35% lower after trading as low as -7.45% intra-day.

Looking at the day ahead now, and US data releases include the weekly initial jobless claims, new home sales for August, and the Kansas City Fed’s manufacturing index for September. Then in Europe, we’ll also get the Ifo’s business climate indicator from Germany for September. Otherwise from central banks, we’ll hear from the Fed’s Williams, Barkin, Hammack and Paulson, the ECB’s Schnabel and Lane, and the BoE’s Dhingra, Breeden and Lombardelli. The ECB will also publish their Economic Bulletin.

Tyler Durden Thu, 09/24/2026 - 08:46

They Used AI To Race-Swap Him...

Authored by Steve Watson via Modernity.news,

Stanford University took a real photograph of three students in a dining hall, ran it through artificial intelligence, and published the result as a "Welcome Home" banner. However, one of those students, Hispanic undergrad Billy Ramirez, class of 2027, was gone.

In his place stood an AI-generated Black woman. The two students next to him had their faces slimmed and altered. Clothing was even changed into Stanford merchandise.

This was not a student meme. It was official marketing from Residential & Dining Enterprises, the office that runs housing and dining for one of the richest universities in America - an institution that still soaks up hundreds of millions in taxpayer money while preaching ethics about "synthetic media."

Stanford busted using AI to race swap white male student for black female in ad: 'Silenced and erased' https://t.co/qZMddVpNMP pic.twitter.com/8vR8JRjb3s

— New York Post (@nypost) September 22, 2026

Ramirez recognized the shot. A Stanford photographer had taken it at a 2024 Lunar New Year dinner as he held a plate of noodles. Dining posted the unedited picture the next day. Years later it came back as campus décor, but completely redesigned.

"I was driving to school from my hometown when my friend sent me the images comparing the banner to the original photos, and I was immediately baffled," Ramirez told The Stanford Review, which broke the story.

Ramirez further explained, "At first, I found it hilarious that they had used AI to completely change our appearances, including my race and gender. But after looking at the comparison, I was also upset because I don't agree with Stanford making those choices about how we were represented. Seeing my identity changed and being left out of the picture made me feel, in a way, silenced and erased from a representation that was supposed to include me."

He later told The New York Times, "To see me erased like that so easily was kind of very upsetting." To the San Francisco Chronicle he added that the doctored banners were "all over campus. It's the first thing you see when you walk in."

The conservative campus paper posted the side-by-side.

?? Stanford's dining and housing office ran an ad through AI, and somehow erased an actual Hispanic student and replaced him with a generated black woman.

Billy Ramirez says a Stanford photographer took the original image, but when it turned up in university advertising, he had... pic.twitter.com/lcB1K7kAzE

— Mario Nawfal (@MarioNawfal) September 22, 2026

Stanford's own AI guidelines for marketing and communications are not vague. The university forbids creating or publishing AI-generated content that "falsely depicts Stanford people, events, research, facilities, or achievements."

It requires clear identification of AI-manipulated images when leaving that out could mislead people about what is real. It also bars synthetic media depicting real individuals without explicit consent.

Residential & Dining Enterprises did all of it anyway: no consent from Ramirez, no disclosure on the banners, and a fabricated person dropped into a photo of actual students.

After the Review published, the university stopped pretending it hadn't happened. Public relations director Charlene Gage said the school had reviewed the matter and confirmed AI was used "in violation of university policy."

"Stanford's A.I. policy is clear: The use of A.I. in producing or altering images of Stanford people, events, research, facilities or achievements is strictly prohibited," the university said. "Both the alteration and lack of disclosure in this case violate that policy. We are working with Residential and Dining Enterprises to provide additional training and ensure proper review of all materials."

The banners came down. Officials promised more training. The Chronicle also noted the same dining shop appeared to have used AI on meal-deal posters earlier in the year. The instinct was already there. This time they race-swapped a living student and hung the result where freshmen walk in.

The punchline writes itself. A real minority student was deleted and replaced with a computer generated person so the brochure could appear to be more diverse.

Stanford has spent years treating race as a branding problem to be managed. In 2022 it rolled out the "Elimination of Harmful Language Initiative," a list that treated "American" as suspect and put "grandfather" and "brave" on the chopping block before national ridicule forced a retreat.

The word "American" is one of dozens on the chopping block under the university's Elimination of Harmful Language Initiative, launched to eradicate "racist, violent and biased" language in websites and code. https://t.co/j8zMqEyPnM

— The Washington Times (@WashTimes) December 22, 2022

Stanford University has taken down its 'Elimination of Harmful Language Initiative' site, following feedback that the effort was 'counter to inclusivity.' For Stanford it's a lesson learned: censorship is no way to educate.https://t.co/ZjCSiMFJVo

— Wall Street Journal Opinion (@WSJopinion) January 11, 2023

In 2024 it was still demanding DEI statements from students applying to an engineering marketing class. This year it was still funding racialized research titles even after claiming it had wound that machinery down.

When the real campus does not match the poster in their heads, they no longer have to hunt for a different group of volunteers. They generate one.

The same racial script is not confined to Palo Alto. At the University of Illinois Urbana-Champaign, a required first-year education course walked future teachers through slides on "undocumented" language rules, "internalized oppression," "minoritized identities," and how "white peers" supposedly silence everyone else.

A whistleblower told Fox News Digital the professor kept repeating that "you as future educators" must carry this into classrooms - while the class taught almost nothing about how to actually teach math or reading.

Further down the pipeline, schools have been sorting children into "affinity groups" by race. White kids get the lecture on privilege and America's sins. The other room gets praise and, in the New York example that spread last year, cupcakes. Parents described children coming home in tears. The program is not a rumor from a single district. It has shown up across progressive school networks.

Thousands of schools in America have implemented a program of separating their students into 'Affinity Groups'

Children are separated by race. White children are scolded and told about their white privilege and racism, the non-whites are praised and given cupcakes (THIS IS REAL)... pic.twitter.com/L5zq7W7PJ4

— Wall Street Apes (@WallStreetApes) September 2, 2025

Ramirez was not asking to be a symbol. He was in a photo holding noodles. That was too inconvenient. His race and sex were edited out, two classmates were digitally put on a diet, and a fictional black woman was invented to complete the set.

Absolute ideological obsessive insanity.

Tyler Durden Thu, 09/24/2026 - 08:33

Japan Breaks The 'Debt Causes Inflation' Narrative

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

A dollar today buys nearly twice as many Japanese yen as it did fifteen years ago. Crude oil, in yen terms, is up roughly 70% year to date. Food prices are similarly elevated. Japan imports most of the energy and much of the food it consumes, paying for it in dollars that keep getting more expensive. Those facts alone should lead us to conclude Japan has an inflation problem.

As if those factors weren't enough, add their debt overhang, with the narrative that mounting government debt is inflationary. If that logic holds in the US, it should apply with even more force in Japan, where government debt is nearly double ours as a share of the economy, and where the yen carries none of the dollar's reserve-currency privilege to cushion its borrowing needs.

A collapsing currency, heavy import dependence, and the developed world's heaviest debt load. Surely that's a recipe for an inflation crisis. Instead, Japan's latest data shows headline CPI at 1.9% and core at 1.7%, both below where the US sits today.

Let's go to Japan and find out why an economy with seemingly every ingredient for runaway inflation has relatively tame inflation. The facts may change how you think about the relationship between government debt and inflation in the US.

The Data

From 1995 to the present, Japan's CPI averaged a mere 0.50%, with deflation marking 13 of the 31 years shown below. Since the pandemic, inflation has been above its 2% target. As a result, the Bank of Japan (BOJ) has been slowly raising its policy rate. Today, the policy rate is 1.25%, a departure from zero and negative rates that presided over much of the period shown below.

Japan's recent inflation is certainly higher than the 1995-2020 experience, but it's still running below America's, where July CPI and Core CPI were 3.4% and 2.5%, respectively.

Measure Japan United States Headline CPI, YoY 1.9% 3.4% Core CPI, YoY 1.7% 2.4% Policy rate (hiked Sept. 16) 1.25% 3.75-4.00% A Setup Built for More Inflation, Not Less

Japan self-supplies only 16% of its energy and 37% of its food, meaning most of what heats Japanese homes, runs its factories, and feeds its people is bought abroad, in dollars. Run that through a currency that's lost nearly half its value against the dollar since 2021 and oil that's up over 50% year over year, and Japanese wholesale inflation has been affected. To wit, Japan's corporate goods price index ran at 7.2% year-over-year in April, with import prices in yen up 29% versus 17.7% in the exporter's own currency. That 11.3% gap is almost entirely related to the yen's depreciation.

A 7.2% wholesale inflation rate on top of its currency and import exposure is the kind of setup that has produced double-digit consumer inflation in many other countries. Yet, Japan's consumer inflation is less than 2%.

Some of the lack of inflation pass-through to consumers stems from subsidized energy prices and businesses still absorbing costs rather than passing them through. Aging demographics and a declining population also weigh on consumer demand and inflation. Furthermore, and maybe most importantly, government debt is presenting a strong headwind, as we will discuss next.

The Debt Question

If the "debt and deficits are inflationary" story were true, Japan should be the cautionary tale, not the United States. Its government owes 1.6 times as much, relative to the size of its economy, and finances almost all of it with domestic capital. Very few foreign investors own Japan's debt, while foreign buyers absorb nearly a third of U.S. Treasuries.

The level of debt does matter, and in Japan's case it is very problematic, but not in the way most people think. Government debt isn't free money injected into the economy. Instead, it's a claim on capital today and when the debt gets serviced and rolled over in the future. Every yen or dollar used to fund the servicing and rollover of existing and new government debt is a yen or dollar a bank, insurer, or pension fund didn't lend to a business building a factory, hiring workers, investing in R&D, or expanding capacity.

Economists use the term negative growth multiplier to describe the economic impact of most government debt. Because government spending tends to be unproductive, debt servicing typically offsets the initial benefits over time. In aggregate, government debt reduces economic activity and impedes an economy's ability to become more productive.

This idea was made popular by Reinhart and Rogoff's 2010 research on debt overhang. They concluded that when government debt exceeds roughly 90% of GDP, each additional dollar of debt-financed spending buys progressively less growth, not more.

Japan Crowds Out Economic Progress

Japan is a real-world test case for Reinhart and Rogoff's theory. With banks, insurers, pension funds, individuals, and the Bank of Japan (BOJ) absorbing most Japanese debt, that capital isn't chasing more productive private investment. Furthermore, with little economic growth for the past twenty years and a generally deflationary environment, the desire to invest in private Japanese ventures has been greatly curtailed

To wit, Japanese corporations sit on some of the largest cash hoards in the developed world rather than deploying it domestically. What Japan is witnessing is the crowding-out effect. The result of the government demanding large amounts of capital is not inflation or higher interest rates, but rather capital parked unproductively in Japanese debt instead of investments that can generate organic, demand-pull inflation and economic growth.

Debt, in other words, hasn't been a demand-side accelerant in Japan. The US, with a lower debt ratio and a captive foreign bid for its debt, is not in the same boat as Japan. However, debt is crowding out investment into more productive uses, and rising interest rates will make the crowding-out effect a bigger drag. This should give pause to anyone claiming more debt equals more inflation.

TFP Tells The Story

Total factor productivity (TFP) measures the output an economy gets beyond what capital and labor add. Think of TFP as the gains from technology, innovations, and smarter capital allocation. Over long-term horizons, TFP is the main driver of per-capita growth as labor and capital have limits. In Japan's case, its aging population, strict immigration laws, and declining population mean that labor is negatively impacting economic output. Furthermore, as we have been discussing, capital is being misallocated toward the deficit. Thus, its limited TFP is the primary source of growth.

The chart below shows that Japan's Total Factor Productivity (TFP) has been flatlining around 1%, as has its real GDP growth.

Summary

The simple deficits = inflation story being used to justify buying gold and bitcoin while shedding bonds at all costs is lacking. Instead, we must consider the longer-term implications of government debt and how too much debt inhibits economic demand and limits inflation by reducing investment in more productive uses.

Japan can thank its high debt loads and aging demographics for the inflation restraint. But bear in mind that the cost paid in stagnant growth and diminished prosperity for its citizens has been dear. We do not fear an inflationary spike in the US; instead, we are concerned that the economic doldrum that has infected Japan for over 25 years will slowly work its way here.

Tyler Durden Thu, 09/24/2026 - 08:05

Aramco CEO Eyes "Fourth & Fifth" Oil Export Routes To Break Hormuz Chokehold

Brent crude futures climbed back above $104 a barrel early Thursday as Iran threatened to widen the Middle East conflict into the Indian Ocean and optimism surrounding yesterday's meetings between US and Iranian officials on the sidelines of the UN General Assembly faded.

A focal point this morning is Nikkei Asia’s interview with Saudi Aramco CEO Amin Nasser, who said Aramco is studying additional crude export routes to bypass the Strait of Hormuz.

Nasser said Aramco is conducting engineering and feasibility work on “a fourth and a fifth route” for crude exports. He did not disclose their locations.

He warned, "This crisis is not really getting better. The situation will get worse because this interruption is significant. It's not a small interruption," adding, "I don't think things are getting better."

The plan for two more oil export routes builds on the current three primary routes, one of which passes through the Hormuz chokepoint that Iran has disrupted. This comes after drone attacks earlier this month disrupted Saudi Arabia's East-West pipeline to the Red Sea, but media reports this week suggest the pipeline could restart soon at half capacity.

"When people talk about the East-West [pipeline], they think it's one pipeline. It's not, it's multiple lines," he said. "It's not easy to interrupt all the lines at the same time. So it gives us the flexibility to respond and cater to our customers."

Beyond the Hormuz chokepoint and the East-West pipeline, Aramco can move crude north through Egypt's Sumed pipeline to the Mediterranean, Nasser said.

"People think about interruptions in Hormuz, interruptions in Bab-el-Mandeb, [but] we never stopped. We continue to supply our customers," he said. "The only thing you do [is] shift more vessels, one way or the other. ... We do have this multiple optionality that allows us to meet our customers' demand."

Last weekend, Qatari Energy Minister Saad Al-Kaabi blasted Treasury Secretary Scott Bessent for saying he was "wrong" to claim that the Hormuz chokepoint would be "worthless" to the oil industry in two years. 

"I think this is completely wrong," Saad Al-Kaabi said at the Qatar Economic Forum in New York.

Speaking to Fox Business's Larry Kudlow on the sidelines of the Group of 20 finance ministers' summit in North Carolina earlier this month, Bessent said the Hormuz maritime chokepoint, in about "two years will be… a worthless piece of water," adding that oil "will be going on pipelines across land."

🚨𝗝𝗨𝗦𝗧 𝗜𝗡: 🇺🇸 Treasury Secretary Scott Bessent says

“In 2 years, the Strait of Hormuz will be like a worthless piece of water.” pic.twitter.com/B94NIWtews

— DustyBC Crypto (@DustyBC) September 1, 2026

Bessent has a point. Aramco's push for new export routes reinforces the outcome we first pointed out at the war's start: energy flows will reroute around Hormuz, gradually eroding Tehran's leverage. Iran's threat to widen the conflict may be an attempt to keep that leverage alive. And it won't be just the Saudis rewiring energy flows; it'll be all the Gulf allies with the capability to do so. 

Tyler Durden Thu, 09/24/2026 - 07:45

Poland Suspects "Hybrid Warfare" After Starlink Station Fire As War Spillover Fears Mount

A fire erupted at a ground-based Starlink communications station in central Poland, raising new concerns about sabotage as spillover risks from the Russia-Ukraine war mount.

Reuters reports that the fire broke out overnight Wednesday at the ground station's power equipment and generator. The report cited Deputy Prime Minister Krzysztof Gawkowski.

"The fire engulfed the power station and the generator; it is clear that this act of sabotage was deliberately designed to disable the station, effectively cutting off the internet connection... and disrupting internet access for various institutions, including the Ukrainian military," Gawkowski said.

Gawkowski added, "While everything is operational today, we must recognise, as Prime Minister Tusk recently noted, that this is an element of hybrid warfare."

NEW: A fire broke out at Starlink ground station in Wola Krobowska, Poland, with firefighters treating it as possible arson.

The fire damaged power infrastructure and a generator. Security agencies are investigating.

Digital Affairs Minister said the incident could be part of… pic.twitter.com/QDx1EqpRLd

— Conflict Radar (@Conflict_Radar) September 24, 2026

Bad actors could've targeted the ground station because Ukraine's military relies heavily on Starlink for battlefield communications, coordinating units and supporting one-way attack drone operations. The internet service, which is repeated from Poland and elsewhere and then beamed down into Ukraine through a network of low Earth orbit satellites, has been critical to Kiev's war effort.

Beyond Ukraine, US intelligence services warned this week of potential spillover risks from possible Russian operations using Geran long-range attack drones against targets in Spain, France or Italy, according to Euronews.

There were numerous drone incidents targeting Germany's Leipzig/Halle Airport early last month, with a drone laden with explosives found on the tarmac.

Tyler Durden Thu, 09/24/2026 - 06:55

60 Minutes' "Pardon Economy" Bombshell Ignored The Clintons... And Joe Biden

Authored by Paul D. Thacker via RealClearInvestigations,

When Bari Weiss was hired to lead CBS News last year, many of the network's star reporters feared the centrist founder of The Free Press news site would turn the network into a mouthpiece for the Trump administration. Longtime "60 Minutes" correspondent Scott Pelley was fired after he accused Weiss of "murdering the show."

If the season premiere of "60 Minutes" is any indication, progressives have little to complain about. In a segment titled "The Pardon Economy," veteran CBS reporter Lesley Stahl alleges that Trump has upended the way U.S. presidents have dispensed pardons for "100 years or more" by creating a "new system" that involves lobbyists and high-priced "pardon brokers."

Stahl's report suggests that Trump has replaced the normal order - in which pardons typically go through an apolitical review by the Justice Department's Office of the Pardon Attorney - with a scheme that looks like "pay-to-play." It has already led Democrats to vow they will investigate the issue if they retake the House in the November mid-term elections.

To situate Trump in this "pardon lobbyists" narrative, Stahl links the White House to two convicted con artists who claim close ties to Trump without disclosing one critical detail: There is no evidence the two have ever succeeded in getting anyone a pardon. While their efforts suggest that some in Washington may be trying to capitalize on the narrative about Trump's alleged corruption - inspired, in part, by questionable pardons he has issued previously - "60 Minutes" offers no concrete proof connecting the administration to these money-making schemes.

Stahl's report also ignored the long history of wrongdoers paying exorbitant fees for lobbyists to get their pardons viewed by the Oval Office - most famously Bill Clinton's brother, Roger, and Hillary's brothers, Hugh and Tony Rodham.

Although Stahl's report quotes Trump officials denying her claims, a DOJ official who was outraged by her "misleading" report provided RealClearInvestigations with documents showing that well-connected D.C. insiders are routinely involved in the pardon process.

Leaked Documents

The DOJ documents shared with RCI involve the high-profile and controversial pre-emptive pardons issued by President Biden to Trump antagonists on his final day in office in 2025 - specifically top NIH official Anthony Fauci, U.S. Army Gen. Mark Milley, and former Congresswoman Liz Cheney.

The release of pardon documents is highly unusual. Pardon documents are zealously guarded by the White House, in part because they can reveal lobbying and political considerations - the very matter Stahl's report insinuates is novel under Trump. The official shared them under the condition that screenshots of the documents not be made public out of concern they might anger Trump, who has pushed for criminal investigations of document leaks.

The official noted that there is no evidence that "pardon brokers" put on camera by CBS have influenced the president and said that the documents were being released specifically to show that many pardon recipients retain expensive legal counsel to represent them. And despite the assertion in the "60 Minutes" report that pardons under prior administrations normally required admitting guilt, none of the three - or any of those pardoned by Biden, including his family members - has expressed the slightest contrition.

What the leaked documents - the letters Milley, Cheney and Fauci sent accepting the pardons - do show is that Fauci, Milley, and Cheney were all using the services of high-priced attorneys at politically connected law firms. They do not, however, provide any insight into how the pardons came about. Milley and Cheney's letters to Biden were sent through attorneys at Williams & Connolly, a top-tier, white-shoe law firm based in Washington, D.C., that has long represented a wide range of powerful Democrats and Republicans.

Now a retired congressional investigator, Jason Foster helped to lead the House investigation of the Clinton pardon scandal. He said the Fauci, Milley, and Cheney pardon papers raise questions about when their attorneys first contacted the Justice Department and the Biden White House about the pardons.

"Based on my experience leading these investigations in the past, this is clearly not a first interaction their attorneys are having with the administration," Foster said. "This doesn't mean they've done anything wrong, but there's no constitutional requirement that anyone go through the pardon attorney office."

First Contact?

Williams & Connolly attorneys did not respond to RCI's questions asking when they first contacted the Biden administration about pardons for retired General Milley and former Congresswoman Cheney. Nor did they answer questions regarding how much they charged for this work.

Records show that Fauci also had an attorney, David Schertler, send the letter accepting the pardon. That letter, however, was addressed not to the Justice Department, but to Biden's White House Counsel.

"On behalf of Dr. Anthony S. Fauci, we appreciate the President's consideration and his action this morning on Dr. Fauci's behalf," reads the letter Schertler sent to Edward Siskel, Biden's top legal advisor. "Dr. Fauci accepts the President's pardon."

Fauci emailed the Hill and contacted reporters at Reuters and other outlets that same day, claiming that the White House approached him about the pardon a month prior and that he did not ask for one. He added, "I have committed no crime and there are no possible grounds for any allegation or threat of criminal investigation or prosecution of me."

At a July Senate hearing, Senator Ashley Moody asked Fauci whether he spoke with President Biden and asked for the pardon. "On the advice of counsel, I respectfully decline to answer based upon my rights under the Fifth Amendment to the Constitution," Fauci replied. When asked multiple follow-up questions about how he got his pardon, Fauci again asserted his Fifth Amendment rights - as he did to every other question he was asked on a wide range of topics, including the color of his tie.

RCI emailed David Schertler extensive questions, asking when he first contacted the Justice Department and the White House about Fauci's pardon. RCI also asked about his communications with attorneys in the pardon office and how much his firm charged Fauci for help with the pardon.

Schertler did not respond to RCI's questions asking when he first contacted the Biden administration about Fauci's pardon and how much his firm charged the former NIH official for pardon work.

Hidden Cameras

The centerpiece of the "60 Minutes" "pardon lobbyist" segment was an undercover investigation of Jack Burkman and Jacob Wohl, two characters offering to secure pardons for $300,000. But almost every fact detailed by "60 Minutes" on Burkman and Wohl had already been reported six months earlier by The New York Times.

Burkman and Wohl are conservative activists who were convicted of felonies for a robocall scheme to frighten black people against voting by mail in the 2020 presidential election, the Times reported. The two now work as lobbyists who allege special access to Trump and influencers such as Laura Loomer. The Times reporting established that Burkman and Wohl were selling their alleged access to secure pardons. The newspaper, for example, reported on an audio recording in which Burkman said that he and Wohl "use a combination of influencers and members of Congress," as well as going "direct to the president, and I think that's a very good approach."

White House spokeswoman Lauren Bis emailed RCI that the Trump administration has a "robust pardon review process," and President Trump makes the final decision. "Anyone spending money to lobby for pardons is foolishly wasting their money and the President doesn't even know who these so-called 'lobbyists' are."

"60 Minutes" also regurgitated details first reported last March in the Times of Burkman's lobbying for pardons on behalf of nursing home owner Joseph Schwartz, who paid Burkman's firm almost $1 million, and the rapper Torrence Ivy Hatch Jr., known as Boosie BadAzz, who paid the pair $600,000.

To create TV drama, "60 Minutes" worked with convicted felon Ammon Covino, who met with Burkman and Wohl at the Ritz-Carlton. "60 Minutes" recorded the interaction with hidden cameras. To make Burkman and Wohl look good, Stahl introduced them to listeners as purported accomplished "pardon brokers."

Although he reportedly paid $600,000 to convicted felons, the rapper known as Boosie BadAzz has not received a presidential pardon.

"They claim they got one for this owner of a nursing home chain convicted of massive tax fraud," Stahl said. "He paid them nearly a million dollars for their promise to reach the president."

This is misleading. The Times reported that nursing home owner Joseph Schwartz stopped paying Burkman and Wohl after they failed to get him a pardon, a detail "60 Minutes" seems to have ignored. In fact, there is no evidence that Burkman and Wohl have gotten a pardon for anyone. Instead, Burkman and Wohl make money off felons by promising pardons that never seem to materialize.

RCI sent CBS News an extensive list of questions, noting apparent contradictions in their reporting, such as failing to note that two felons they recorded by hidden camera claiming they can get pardons have never actually gotten anyone a pardon. CBS News did not respond to these questions. A spokesperson sent this statement: "60 MINUTES stands behind our reporting and the investigative work our team did to shed light on the pardons process."

Instead of advancing a narrative about a "new system" of "pardon lobbyists," "60 Minutes" seems to have recycled key findings from the Clinton pardon scandal of 2001, while claiming their reporting has uncovered something new and unique about pardons in the Trump administration.

Clinton Pardon Scandals

During his final hours in office, President Bill Clinton signed a flurry of pardons that led to a years-long scandal that found his own brother, Roger Clinton, had accepted hundreds of thousands of dollars to lobby for pardons, as did brothers of first lady Hillary Clinton and an attorney who worked on her Senate campaign that year.

"Pardon for Felon Considered After Kin Paid Roger Clinton," reported the New York Times in 2001 regarding a $50,000 payment to Roger by the family of Rosario Gambino, a convicted heroin trafficker and reputed organized crime figure. Just as Burkman and Wohl make wild claims of pardon success but never seem to deliver, the Gambino family told the Times that Roger Clinton led them to believe that a pardon for Rosario was a "lock."

While Roger Clinton failed to get anyone a pardon, House investigators released a 2002 report that found that he accepted hundreds of thousands of dollars to lobby for pardons. However, one person who did succeed in lobbying the Clinton administration for a pardon was Hillary Clinton's brother, Hugh Rodham.

Two felons - a convicted drug dealer and a businessman who marketed a bogus baldness cure - paid Hugh Rodham a combined $400,000 to get them pardons, which included lobbying White House staff. House investigators found that Rodham's lobbying efforts also involved telling White House staff that one of the pardons was "very important" to First Lady Clinton.

The House investigation also detailed similar actions by Hillary's other brother, Tony Rodham, who secured pardons over the objection of the Justice Department by lobbying his brother-in-law, President Bill Clinton: "Tony Rodham lobbied President Clinton to grant pardons to Edgar and Vonna Jo Gregory while he was receiving substantial sums of money from the Gregorys."

The findings that felons had hired both Bill and Hillary's family members to lobby the Clinton White House for pardons were widely covered by news outlets, including reporters at CBS News. Stahl joined the CBS News Washington bureau in the early 1970s and moved to "60 Minutes" in 1991, almost a decade before the Clinton scandal became national news. So it's hard to understand how she missed these details of the Clinton pardon scandal to now claim the Trump administration has created a new "pardon economy," as "60 Minutes" calls its news segment.

More Trump Probes

Although Stahl's "60 Minutes" segment did not support its claim that Trump has created a unique new system for pardons, it is already prompting fresh partisan attacks against the president. In an online story that followed the "60 Minutes" piece, CBS News reported that Democrats were alarmed by the undercover video: "Senior Democratic lawmakers vowed Monday to investigate the new market that has sprung up around President Trump's pardons, citing CBS News video of lobbyists offering to 'put pressure on the president' in exchange for a hefty fee from a convicted felon."

Now the top Democrat on the House Judiciary Committee, Congressman Jamie Raskin will likely lead these investigations. Raskin told CBS News that pardons are "kind of an underground market because not everybody knows how to get to it."

CBS News failed to report, however, that one of the people who benefited from this underground market was Raskin himself, who Biden pardoned along with Liz Cheney on his final day in office.

Tyler Durden Thu, 09/24/2026 - 06:30

Escobar: The Calm Before The Showdown

Authored by Pepe Escobar via LewRockwell.com,

The only art that the Prince must totally master it's the art of war

- Machiavelli

The Supreme Warrior Wins Without Fighting

-Sun Tzu

This was supposed to be the calm before the storm. Where the Epstein Syndicate would schmooze the Global South gathered in New York for the - comatose - UN General Assembly and seduce them with assorted "gifts", wooing them away from the impending Great Debacle and deflecting attention from the breathtaking speed of the collapse of Pax Americana.

Cut to Wednesday, when we have Day One of the UN General Assembly Debate, with Neo-Crassus/Neo-Caligula/Goldfinger/Psycho Toddler supposed to deliver a speech.

On the same day, he meets with the Gulf petro-sheiks for what could become some sort of suicidal pact.

And then on Friday, Xi Dada in person comes to the U.S. on an official state visit. (Invisible) sparks are guaranteed to fly.

All that would guarantee that the nearly inevitable New Demented Offensive on Iran and the Axis of Resistance might be postponed for a few days.

But then hysteria re-reigned all over again, as panicked imperial stakeholders were faced with some startling facts on the ground, from zero Saudi oil exports and to "burn, baby burn" at Riyadh airport.

Cue to the thundering sound of scurrying bling bling cockroaches. They seem to realize that hitting Iran again, now, is beyond dangerous, as the escalation ladder will go totally out of control - complete with Tehran finishing off the scared-to-death petro-sheikhs.

So the cockroaches did find out, the hard way, that whatever happens Iran is bound to become the oil hegemon of the Persian Gulf.

Cue to Pakistan and Turkiye - the other two members of the dodgy as hell Mecca Defense Alliance - freaking out in tandem, promising to defend Saudi Arabia even physically.

For context, cut to Ansarallah spokesman Mohammad Al-Bukhaiti:

"By God, if Turkey or Pakistan get involved, we will strike them with an iron fist. And just as we are disciplining Saudi Arabia today, we will discipline them as well."

That was the polite advice from the elder al-Bukhaiti. The younger, Hussain, a journalist, was way more heavy metal: if Pakistan attacks Yemen, Yemen will not allow any Pakistani commercial ship to pass through the Red Sea; will launch a direct attack on Pakistan; and will consider Pakistan a Zionist partner.

How the House of Saud is going down

It's now Escalation Ladder A-Go-Go. The Energy Shock'n Awe is at hand. All buffers are gone; the U.S. Strategic Petroleum Reserves (SPR); the Saudi East-West pipeline (for at least a month, maybe more); and China's methodical, hefty cut on oil imports.

What's left is the UAE's Fujairah - moving only 2 million barrels a day. But if the U.S. attacks the Axis of Resistance, that will also be gone in a flash.

Saudi Arabia cannot export oil and/or gas. So there's only one way out to Clumsy Lone Decider MbS; to surrender. Accept Yemen's terms. And expect the bill to include the 3 southern provinces stolen by the Brits and given to the Saudis in 1934.

No surrender means the very slim possibility of the House of Saud surviving at all.

Alastair Crooke, in fine form, nailed it to perfection. The Ansarallah/Yemeni Armed Forces lightning-fast campaign had been planned for as long as 7 years. Sana'a takes a very long view. This represents total Yemen ownership of the process; but with an outcome completely aligned with Tehran.

There's a stunning parallel with Afghanistan 5 years ago - a story I followed in detail. The then Ghani puppet government collapsed in only 10 days because of patient Pashtun tribal interconnection conducted under the aegis of Gen. Soleimani.

Now it's the same process, involving tribal Arabian leaders. It's an easy sell. The mongrel "Saudi" state was built around an ultra-sectarian Wahhabi nucleus, a bunch of illiterate camel-herding Bedouins, with a single family monopolizing the money, political power and all decisions.

Many of roughly 100 tribes will have no trouble to become part of a process of folding the Kingdom into what could be called the Iran-Ansarallah compound. They will take back their oil; Arabia then will no longer be reduced to an American replacement of Persian power; and that will be the end of the free lunch for U.S. oil companies. China cannot but approve this vision.

The petro-sheiks have chosen their table

Sana'a did send a clear message to the U.S. via Oman. Yemen would only attack Saudi shipping - and not American or international shipping. That stands as long as Washington does not attack Yemen. Yet if that happens, Yemen obliterates the American base in Djibouti, essential for surveillance of the whole Horn of Africa.

The key question now is whether the U.S. - and the Mecca pact - really dumped Saudi Arabia. Or if this is just a realignment fog before a concerted attack - GCC included - on Ansarallah.

If that happens, Tehran has made it crystal clear it will strike U.S. military and commercial assets all across the Gulf, especially in the UAE and Saudi, and all the way to Iraq.

Major General Mohsen Rezaee, secretary of the Supreme National Security Council in Iran, and Leader Mojtaba Khamenei's personal representative, provided the context with a single sentence:

"We invited them [GCC nations] to the Salalah meeting [in Oman]...and they reciprocated with a secret meeting in Germany with the U.S. Central Command and Israel."

It's all here. Iran invited the GCC petro-sheiks to a common regional table. The GCC instead chose the Washington/Tel Aviv table.

Rezaee has also outlined how Iran upgraded supersonic missiles from Mach 6 to Mach 10; expanded electronic warfare and air defenses; and is now able to hit U.S. vessels anywhere in the - distant - Indian Ocean.

Then there's that ship-targeting missile that splits into 80 projectiles tested - successfully - on a U.S. aircraft carrier. The Pentagon is mum on the subject.

Rezaee, in more ways than one, has gently advised the U.S. Navy to get out of Dodge - as in the Indian Ocean - before sparks fly again.

Cue once again to the young al-Bukhaiti:

"A major escalation by Saudi Arabia is expected in the coming day or days... It will be met with a surprise retaliatory response that will make Saudi Arabia and its allies forget that they lost Mocha and Bab al-Mandab."

So the Epstein Syndicate may have planned for a solo op on Yemen, just to find out that Iran and Yemen come as a package.

Respect Iran's terms. Or else.

Tehran conveyed its new terms to the U.S. through Qatar, even as Rezaee continues to define "the respected Pakistani government" as a steady consultation partner.

The terms include the release of frozen assets and the end of the Trump naval blockade. Rezaee said there are 7 conditions, but he disclosed only 6. The list did not include "removal of economic sanctions". The public first item is "an end to the war on all fronts."

That is exactly what was written at the start of the dead cat MoU.

The June memorandum of understanding already contained crude-export waivers and a no-new-sanctions clause.

Then there's the Strait of Hormuz reciprocation. That is part of Tehran's bargaining structure. Rezaee said Iran is "a short step" from announcing a Hormuz management deal with Oman that may need regional endorsement.

A Tasnim-sourced description calls the arrangement "a step towards Iran exercising sovereignty over the Strait". In parallel, Foreign Minister Araghchi told his counterpart and friend Wang Yi in Beijing that Iran "has reached a plan with Oman to open the Strait." Then Ghalibaf repeated on Sunday that the Strait of Hormuz stays closed until Iran's conditions are met.

Washington's answer, on Sunday, was demented rhetoric - as usual. Neo-Crassus/Psycho Toddler told Fox News he is in "deciding mode". And then he came up with an intergallactic howler: he's deciding "if and when do I blow the entire nation up".

No comments necessary.

He has essentially three options.

1. Renewed strikes.

2. Let Iran "rot" economically (that's the plan for now).

3. A deal.

In an access of common sense, he also said he would "probably be open" to meeting President Pezeshkian at the UN General Assembly.

Iran's Armed Forces, for their part, claimed they have intel that Washington has decided "with the green light from certain regional countries" to resume action and threatened "continuous, effective and painful strikes."

When it comes to the Big Picture, Pakistan insisted there is no military response under discussion regarding Yemen. Türkiye "does not want to enter the fray". Still, Pakistan's military spokesman has pledged to go "to any extent", and the Foreign Office confirmed "some deployments" under the Mecca Defense Alliance. Insiders in Islamabad swear this is only for show: Pakistan cannot afford to be dragged into a war against Ansarallah.

The heart of the matter is that the Epstein Syndicate simply cannot afford not (italics mine) to make a move. Consider the dire circumstances: they already connot control currency collapse, food supply chain elimination and widespread lack of oil/diesel. They need massive diversionist tactics.

Meanwhile, Yemen's revolutionary surge accelerates the timetable to the showdown. While Iran concentrates on ensuring a definitive neo-Crassus/Goldfinger/Psycho toddler mid-term debacle, in tandem with honing its new offensive doctrine: as in being ready to preemptively strike at any sign of U.S. rumblings.

It's nearly impossible to draw reason out of an illogical geopolitical universe where nothing matters and the Hegemon is totally out of control. Yet we persist.

We are all riders on the (coming) storm.

Pepe Escobar is an independent geopolitical analyst and author. His latest book is Raging Twenties. He's been politically canceled from Facebook and Twitter. Follow him on Telegram.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden Thu, 09/24/2026 - 05:00

NATO Jets Scrambled After Russian Military Helicopter Breaches Polish Airspace

Another dangerous border breach incident has occurred involving Russia's military and a NATO 'eastern flank' country.

Polish military officials announced Wednesday that a Russian military helicopter made a brief incursion into Poland's sovereign airspace from the Russian exclave of Kaliningrad.

AFP/Getty Images

Kaliningrad and Poland share a 130-mile heavily fortified frontier border, and tensions have soared ever since the Ukraine war began.

"The Mi-8 helicopter spent 42 seconds in Polish airspace and entered to a maximum depth of about 300 meters (328 yards)," the Polish Army Operational Command stated in a post on X.

Polish or NATO jets went immediately active as a result. "Fighter aircraft were scrambled, and ground-based forces and assets remained on standby. The nature of the incident indicates that Russia is once again testing the readiness of our air defense," the statement said.

Poland's military framed the incident as intentional and as part of Moscow's willingness to 'test' Western readiness and resolve:

It said "the nature of the incident indicates that Russia is once again testing the readiness of our air defense". Moscow did not comment immediately.

Poland and other European Nato members have recently said Russia may be preparing attacks to test their commitment to supporting Ukraine - Moscow denies this.

The Kremlin did not immediately issue comment, but has previously repeatedly denied that there is any intent whatsoever to expand the Ukraine 'special military operation' into Europe.

However, earlier this month Foreign Minister Lavrov warned that "If Europe attacks Russia, it will be a completely different war [from that in Ukraine], and it will be very short."

The suggestion was that Russia is ready do defend itself with strategic forces if it has to, in a veiled warning of nuclear confrontation.

Several 'incursion' incidents have already happened this month along the borders of Eastern European NATO member states. Most of these incidents have centered on drones. 

Britannica

Polish Prime Minister Donald Tusk suggested Russia was planning drone and missile strikes against Poland and other countries on NATO's eastern flank. Polish Prime Minister Donald Tusk said just days ago, "In recent weeks, the Russian hybrid threat against Europeans... has intensified."

Tyler Durden Thu, 09/24/2026 - 04:15

"The Danes Lied The Most": What's Really In The Text Of Trump's Landmark Deal With Greenland

Authored by John Weeks via AntiWar.com

US To Establish Two New Military Bases In Greenland

The United States plans to open two new military bases in Greenland, an expansion made possible by a new security agreement between the US, Denmark, and the semi-autonomous Danish territory of Greenland.

On Tuesday, President Donald Trump, Danish Prime Minister Mette Frederiksen, and Greenland Prime Minister Jens-Frederik Nielsen signed the new security agreement during a trilateral ceremony at the United Nations General Assembly in New York.

US Army image

The "agreement," which amends a 1951 defense treaty, allows the US "to establish an additional Defense Area at Narsarsuaq and Mestersvig in accordance with modalities and technical details to be mutually agreed by the Parties," which is where the two new military bases will be created.

Narsarsuaq hosted the US Bluie West One military base in the 1940s and 1950s. Mestersvig is a current military outpost used by the Danish special forces unit called Sirius Dog Sled Patrol.

The agreement also allows the US to "modernize and expand its activities" at its existing Pituffik Space Base in northwestern Greenland, create additional military facilities on the island, and enjoy greater military access by land, air, and sea.

It also bans non-NATO nations from establishing a military presence on Greenland and provides the U.S. with economic privileges (such as “minerals cooperation”) in the resource-rich island.

During a speech to assembled world leaders at the UN before the trilateral ceremony, Trump spoke of the "unprecedented agreement regarding the northern frontier of North America, the large and strategically vital piece of land known as Greenland."

This rhetoric tracked with Secretary of War Pete Hegseth’s vow in March to establish a "Greater North America." However, the agreement does not have the US take over Greenland, as leaders on the island, in Denmark, and throughout Europe had feared earlier this year.

Such fears were well placed, considering that the US conquered Venezuela in January, has been working toward regime change in Cuba, and is currently at war with Iran.

What's in the actual Greenland deal text? Analysis in the following: "The Danes lied the most: Trump is pretty much correct in saying that this new deal grants the US control of Greenland"...

Ok, we now have the actual text of the Greenland deal (https://t.co/HwqZT6CGb2), so we can say how it compares to the existing 1951 arrangement and who, between Trump and Denmark, lied the most in their framing of it.

Long story short - which may surprise some - the Danes lied… https://t.co/DPM2iFkN4v

— Arnaud Bertrand (@RnaudBertrand) September 23, 2026

Geopolitical commentator Arnaud Bertrand's breakdown of the official text and the implications:

1) This is now a permanent arrangement: whereas the existing 1951 deal only lasted as long as NATO existed, this one "does not have an end date and may only be amended by mutual consent." It even survives a hypothetical future independence of Greenland: in that event, Denmark and Greenland must ensure that the independent Greenlandic state "affirmatively assume[s] all of the rights and obligations of the Kingdom of Denmark specified in this Agreement."

2) In the 1951 agreement, the US could set up bases only where both governments agreed, and only on the basis of NATO planning. The new deal locks in three bases: the US can "modernize and expand its activities" at Pituffik, its only base in Greenland until now, and "shall be allowed to establish an additional Defense Area at Narsarsuaq and Mestersvig." Further bases beyond these 3 can be justified by the defense of "the American continent," a US interest rather than a NATO one. Also, quite subtle but this is interesting: Article IV(iii) says that "the United States may establish additional defense areas in Greenland" and that consultations are then held "to decide implementation details based on mutual agreement." What this means is that the principle of a new base is automatically granted and only the implementation details require agreement. Article VII also gives the US "the right to raise concerns regarding construction, or change of use" of any building near a US base, after which the parties decide together what to do. Which means that the US has a say over civilian planning around its bases.

3) On US military movement across Greenland, the wording change between the 1951 agreement and this new one is quite funny. The 1951 text said (Art. V(3)): the US "may enjoy... the right of free access to and movement between the defense areas through Greenland, including territorial waters, by land, air and sea," but only "in accordance with general rules mutually agreed upon and issued by the appropriate Danish authority in Greenland." The new one says: "the United States of America shall enjoy... the right of free access to and movement between the Defense Areas through Greenland, including the Territorial Waters, by land, air and sea." That's it: "May" becomes "shall," and the US military movement no longer has to follow rules "issued by the appropriate Danish authority in Greenland." The US also gets something new on top: "undersea access to and movement within the Territorial Waters," i.e. submarines.

4) Non-NATO exclusion: non-NATO states are barred from military installations or a persistent presence in Greenland unless all three parties approve, giving the US an effective permanent veto. The 1951 deal had no equivalent clause.

5) Investment screening: this is entirely new. "States or investors from a state that is not a member of NATO, a NATO partner, or an EU member state" (i.e. Russia, China, India, the Gulf States, etc.), "shall not be allowed to have (i) control, (ii) significant influence, or (iii) access to non-public information...within Particularly Sensitive Sectors or Activities in the territory of Greenland (including the Territorial Waters), unless agreed between the Parties." Again, it basically means that the US has a permanent veto over who can invest in strategic sectors in Greenland, as far as non-NATO or EU states are concerned.

6) Lastly, in stark contrast with the 1951 deal, the framing of the deal changes significantly: this new deal is largely framed around the US. The 1951 agreement existed only "for the benefit of the North Atlantic Treaty Organization." The new one lists the defense of "the American continent" as an objective, celebrates "the irreplaceable role" of the United States military as well as "the United States' indispensable historical and ongoing contributions to the security and defense of Greenland," and names the establishment of Trump's "Golden Dome" missile defense system as a key goal.

During his UN speech, Trump unleashed an extremely aggressive statement aimed at Tehran: "Will a deal be made with Iran that lets them rebuild and create a far greater country than it ever was before, maybe one of the greatest in the Middle East, or even the world? Or do I annihilate the Islamic Republic, and do it quickly, never giving them a chance to kill and destroy people and countries again? Do I drive them into hell with no chance of survival and no hope of future greatness or generations?"

  FOR ZEROHEDGE READERSA $10 HEDGE,
ON US.$10 off one order of $30 or more. New or returning, one per person. YOUR EMAILGET MY $10 →Signs you up for ZeroHedge Store emails. $30 minimum, once per person, can't be combined. Every order helps support ZeroHedge. Tyler Durden Thu, 09/24/2026 - 04:00

In Red Sea Crisis, Somaliland Seizes Leverage For US Recognition

Authored by Dan M. Ford via Responsible Statecraft,

The president of Somaliland took advantage of the geopolitical and global economic turmoil caused by the Iran War to visit Washington this week in an effort to advocate for American recognition of Somaliland and for the deepening of economic ties between the two.

President Abdirahman Mohamed Abdullahi, known as Irro, made a public appearance at the Hudson Institute on September 14, where he argued that his country's three-and-a-half decade run as a secure, self-governing actor warranted recognition from the United States. Irro also said that, although he's "not a geologist," experts tell him his country has "everything" the U.S. could want in terms of critical minerals, which he'd be happy to provide the U.S. in exchange for deeper relations.

A self-proclaimed sovereign country widely considered to be part of Somalia by the international community, Somaliland has for decades struggled to gain recognition on the international stage. But Israel's unexpected decision in December 2025 to be the first government in the world to recognize Somaliland as an independent state has raised questions about which other countries might follow suit. Somaliland denies that recognition came as part of a quid-pro-quo arrangement, but, shortly after the recognition, it was reported that Somaliland will be forming a security partnership with Israel, potentially including offering the Israelis military access to its territory.

If there was ever a moment for Somaliland officials to make the case for recognition, now is indeed the time. Somaliland sits in one of the world's most geostrategically significant locations. With roughly 530 miles of coastline along the Gulf of Aden - which connects to the Red Sea through the vitally important Bab el-Mandeb Strait - Somaliland is at the heart of a crucial shipping route and on the edge of the expansive battlefield of the Iran War.

Somaliland's major port city of Berbera is located just across the Gulf from the Yemeni coast, putting Somaliland's major economic engine within striking distance of potential Houthi attacks.

The Houthi rebels - an Iran-aligned militant group fighting the Yemeni government and its Saudi backers in Yemen's devastating civil war - have played a major role in expanding the footprint of the ongoing Iran War. The Houthis have repeatedly targeted ships traversing the Red Sea as well as energy and logistics infrastructure in Saudi Arabia.

Their stunning gains along Yemen's southwest coast in recent weeks - including the capture of the major port city of Mocha, near Bab el-Mandeb - mean the Houthis are increasingly in control of the Yemeni coastline along the strait, which gives the group added leverage. Indeed, if a lasting peace deal remains elusive, Iran could aim to use the Houthis' position to effectively shut down shipping through Bab el-Mandeb, which is only about 18 miles wide at its narrowest point.

This would essentially mirror the Iranian strategy on the Strait of Hormuz, which sits on the other side of the Arabian Peninsula. By shutting down shipping through both Hormuz and Bab el-Mandeb, the Iranians and their allies would essentially bring to a halt nearly all sea trade connecting the Middle East to the Indian Ocean, worsening the ongoing global supply shock, especially as it relates to energy. The greater the pain on the world's pocketbook, the greater the likelihood, the Iranians believe, that pressure will mount to a point where the United States and Israel have no choice but to negotiate an honest end to the war.

Irro's argument for recognition is straightforward. Somaliland has been operating as a functional and relatively secure country since claiming independence from Somalia in 1991. It has its own military and police force, and has a coast guard that patrols its waters along the Gulf of Aden, defending against potential threats from pirates and other nefarious actors on the seas. In an appeal to traditional Western appreciation for democracy, Irro argues that Somaliland's ability to hold consistent (though often delayed) elections is another indicator of its ability to govern well.

But the Hudson Institute appearance was unsteady. Irro, aged 70, giggled seemingly uncontrollably throughout, and struggled to articulate a vision for the broader region. At one point, he compared neighboring Sudan to Venezuela, saying - like the Latin American country - Sudan is "too far away" from Somaliland for him to provide an opinion on its civil war, despite the fact that the two are only about 460 miles apart.

Cameron Hudson, a former U.S. intelligence official specializing in Africa, said on X that Irro "did himself and his country a major disservice by being unprepared or incapable of being able to respond convincingly to serious topics that will determine his country's future. It was like watching an African Biden."

Last Tuesday, Irro held a breakfast with a bipartisan group of members of Congress from both chambers as well as a group of ambassadors. The president also met individually with several members of Congress, including Sen. Ted Cruz (R-Tex.), Rep. John Rose (R-Tenn.) and Rep. John Moolenaar (R-Mich.), with whom he reportedly discussed a wide variety of issues pertaining to security, trade, and investment.

In addition to meeting with American officials, Irro met with members of the Israeli embassy in Washington, including the country's ambassador.

Ever since Trump took office, Somaliland has seen an opportunity to push for American recognition. Last year, the breakaway state offered the United States the opportunity to open up a military base along its Gulf coast in exchange for recognition, which the Trump administration reportedly seriously considered. Ultimately, though, concern over how such recognition would complicate U.S. relations with nearby governments in the region ultimately dissuaded the American president from agreeing to the arrangement. Such recognition would also hurt American relations with Somalia, which remains a major counterterrorism partner in the fight against the al-Qaeda affiliate al-Shabaab.

Nevertheless, American military presence in the region appears to be growing. Recent reporting suggests the U.S. has sent military personnel to Somaliland's eastern neighbor Puntland, another region claiming independence from Somalia.

Despite a fraying federal system and deep insecurity, Somalia is still a member of both the African Union and Arab League, allowing it to maintain close ties with its regional neighbors. U.S. recognition of Somaliland would risk hurting American relations with this broad base of countries across the Middle East and Africa.

In terms of what Somaliland is willing to provide the U.S. for recognition (or at least for enhanced relations), Irro told Semafor he would consider offering greater military access - including potentially building a military base (as he has offered before) - as well as access to the country's deep resources. In an appeal directed right at Trump, Irro also suggested the possibility of naming the airport in the major port city of Berbera, which has one of the longest runways on the continent, after the American president.

Still, it'll be a challenge for Somaliland's leadership to persuade the United States to recognize it while Somalia remains an American partner in counterterrorism activity, and while the wider regional community opposes Somaliland's independence. But if either of these factors change, and if the Gulf region remains a hotbed for conflict, global geopolitical and military positioning will, at the very least, keep the conversation going.

Tyler Durden Thu, 09/24/2026 - 03:30

China Floods Europe With Cheap Cars, Grabs Record Market Share As Domestic Brands Buckle

Europe is becoming a glaring case study in how globalist leaders can destroy an entire automotive manufacturing base by flooding the continent with cheap Chinese cars and sending domestic automakers spiraling into crisis, while their policies simultaneously spark what Nomura analysts have said will be political blowback over an 18-month election cycle, with shifts toward the right already visible in recent German elections.

Bloomberg News cites new data from Dataforce showing that Chinese automakers captured a record share of Europe's car market in August by flooding the continent with cheap hybrids that undercut domestic brands.

Chinese brands, including BYD, accounted for nearly 12% of European new-car sales that month, according to Dataforce. The largest surge in sales came from hybrids: one in four sales overall and roughly one in three plug-in hybrids.

Chinese hybrids avoid the additional EU duties imposed on imported EVs, giving BYD a competitive advantage on an energy-stricken continent.

EV and hybrid sales jumped 27% in August, offsetting declines in combustion-only cars and lifting the overall market by 4.6%.

The increasing Chinese auto footprint inside Europe is becoming increasingly alarming when viewed from a Goldman chart posted to clients earlier today. 

Germany's auto industry crisis has refused to end as Volkswagen last week lowered its operating-margin forecast, reflecting a write-down on its Porsche stake and soft Chinese demand. Layoffs and production-line wind-downs are also mounting for European automakers.

Stellantis recently planned to halt production of the electric and hybrid Fiat 500 at Italy's Mirafiori plant during the final two weeks of October. Output could reach 60,000 vehicles this year, compared with an original forecast of around 100,000.

Meanwhile, Germany is preparing economic security proposals that could include tariffs on Chinese hybrids as its auto industrial base remains in turmoil.

The problem with Europe's auto industrial base, amid what can only be viewed as a planned demolition by the continent's globalist leaders, is its lack of readiness to retool for wartime, as the US is currently doing (see the GM report from last week), when civilian production quickly converts to weapons manufacturing. 

Europe is a case study for the world in what not to do, as its globalist leaders appear to be at the mercy of Beijing. 

Tyler Durden Thu, 09/24/2026 - 02:45

Anti-Immigration AfD Now The Most Popular Party In Key Western German State In A National Vote

Via Remix News,

The anti-immigration Alternative for Germany (AfD) party is known for its strength in the east of the country, but its popularity in Western Germany is also only growing, including in the country's most populous state, North Rhine-Westphalia.

This latest Forsa poll points to incredible growth of the AfD in a very short time in the voter-rich Western German state. It is now the most popular party in the entire state when measuring a national vote and would earn 24 percent of the vote.

NORDRHEIN-WESTFALEN | Sonntagsfrage Bundestagswahl Forsa/Kölner Stadt-Anzeiger

AfD: 24% (+2)
CDU: 22% (-4)
GRÜNE: 18%
SPD: 14% (+1)
LINKE: 12% (+3)
FDP: 3% (-1)
Sonstige: 7% (-1)

Änderungen zur letzten Umfrage vom 22. April 2026

Verlauf: https://t.co/BFZmdFPvIW#btw29 https://t.co/8HxWHdoMm3 pic.twitter.com/Aq1Ll352E8

— Deutschland Wählt (@Wahlen_DE) September 23, 2026

Meanwhile, the Christian Democrats (CDU) fell four points to 22 percent, the lowest value Forsa has ever recorded for the party in the state. The previous low was 23 percent in December 2021. However, in order to avoid confusion, it must be noted that the Forsa poll asked two very distinct questions. One question asked voters in North Rhine-Westphalia how they would vote at the federal level and also how they would vote at the state level. At the state level, voters in North Rhine-Westphalia would still back the CDU over the AfD; however, the CDU's advantage over the AfD has narrowed to just seven percentage points ahead of the April state election.

NORDRHEIN-WESTFALEN | Sonntagsfrage Landtagswahl Forsa/Kölner Stadt-Anzeiger

CDU: 29% (-3)
AfD: 22% (+2)
GRÜNE: 18% (+1)
SPD: 14%
LINKE: 8% (+2)
FDP: 3%
Sonstige: 6% (-2)

Änderungen zur letzten Umfrage vom 22. April 2026

Verlauf: https://t.co/abpZT4akVf#ltwnw #ltwnrw pic.twitter.com/7osvf3qadq

— Deutschland Wählt (@Wahlen_DE) September 23, 2026

For Minister-President Hendrik Wüst, the drop in support for his CDU party comes at an especially sensitive time. Wüst recently became the only top CDU politician who called for the government to begin the process of investigating a possible ban of the AfD party. He is also seen a strong contender to replace Merz as chancellor.

The latest figures show that if a state election were held this Sunday, the CDU under Wüst would receive 29 percent, down from 32 percent in Forsa's April survey. The AfD has risen two points to 22 percent. The gap between the two parties has therefore fallen from 12 to seven points in just a few months.

About a year ago, however, the lead was far larger, at 22 percentage points. In July 2025, 38 percent of respondents favored the CDU while the AfD stood at a mere 16 percent.

While this may be of some consolation to Wüst that he is still more popular than the CDU federal branch, the fact that the AfD is now leading in the state at the federal level represents a massive sea change in German politics.

North Rhine-Westphalia is one of the most diverse of all of Germany - outside of the city-states like Berlin - featuring 35 to 38 percent of the population with a migration background. It is also a state with numerous industries hit hard by Germany's ongoing economic downturn.

The three recent state elections in eastern Germany have become a "turning point" for the CDU after a sharp setback in Saxony-Anhalt, the party's failure to enter the state parliament in Mecklenburg-Vorpommern two weeks later, and disappointing results in Berlin. Chancellor Friedrich Merz said he was "deeply shocked" about the vote in Saxony-Anhalt and spoke of consequences. He also noted that he took responsibility for the election outcomes but would not resign the chancellorship or his role as chairman of the CDU party.

The question now is whether widespread dissatisfaction with Merz will continue to weaken the CDU's prospects across Germany.

Read more here...

Tyler Durden Thu, 09/24/2026 - 02:00

The Muse Is Loose: Inside Zuckerberg's $100-A-Month Bet That You'll Let Facebook Run Your Life

Those lucky enough to be living under a rock in the past month, would be surprised to learn out that after trading near the year's lows in mid-August, Facebook Meta stock just hit a 2026 high, and it is all thanks to the constant buzz over the release of its Muse AI agent two weeks ago, which has not only taken the tech world by storm, but sent Meta shares an additional 21% higher in that period vs just 1% for the S&P.

What is it?

Muse, which was launched on September 8, 2026, is what Meta calls "the world's first personal AI agent built for everyone." Instead of just chatting, it carries out everyday tasks such as purchasing, travel, email and organizing for you, with reported pricing of $20 and $100 monthly besides a generous free tier.

Two weeks after launch it's growing fast, amid a broad range of reactions from euphoria, to skepticism, to outright revulsion. Gravitating toward the latter end of that spectrum, none other than Amazon earlier this week announced it would ban the use of Muse on its retail website. Ironically, that may have only helped Meta, whose downloads in the first two weeks since launch have surpassed none other than ChatGPT itself.

The market reaction has also been rapid and intense: not only has it helped push Meta stock into the stratosphere, it has once again prompted "disruption" fears, sending banking and various "consumer inertia" stocks sharply lower amid fears that Muse, running in the background, could make the drudgery of moving one's bank account, canceling existing subscriptions and generally anything with "high switching costs", a thing of the past. 

To that point, in its end of day wrap, Goldman yesterday said that "the most talked about theme on our desk today was the impact of Agentic AI post Meta Muse and the shorting of “Consumer Inertia" names. Our basket, GSXUSWCH (-2.58% today), which has been one of our most actively traded baskets in recent sessions, consists of stocks in industries where customer retention is supported by "behavioral, operational, contractual or financial switching costs." ...in other words, services that are hard to cancel (unless you have Agentic AI do it for you)." Goldman went on to point out some of the biggest losers from this basket, including PLNT, NYT, SCHW, ALL, and INTU.

Yet through it all, Muse has continued to climb in the App Store to currently the #1 most downloaded free app in the US, and at  increasing download volume compared to a week ago. The combination of virality and Meta’s strong distribution platform (the company reportedly reaches over 2 billion users) make the buzz around Muse quite palpable.

Following the accelerated model progression of Muse Spark with big gains in agentic and multimodel capabilities in recent months, Meta is also shipping quickly around Muse with a series of innovations within just two weeks from launch. Meta launched a beta for Muse outbound calls to US businesses (where it may have had some help from old-school call centers), opened access for developers to build Muse connectors, launched Muse for Mac, and added Shop Pay for agentic checkout, among other improvements. Earlier today, Zuckerberg even introduced a Muse Charm pendant during Meta Connect. 

In a note discussing the launch of Muse, JPMorgan's Dough Anmuth (full note available to pro subs), wrote that Muse’s early traction reflects three key drivers:

• Strong product-market fit, including leading agentic performance, ease of use, and an emphasis on privacy/safety (good luck with that).

• a generous free tier that reduces friction for trial and repeat usage;
• Meta’s scaled distribution advantage.

While it is still early, JPM believes that Muse has the potential to become the most widely used consumer AI application since ChatGPT. The bank also believes that Meta is currently focused on learning how people are using Muse and improving the product, while also increasing consumer adoption and engagement. Opening up access for developers to build Muse connectors last week was also significant as it is the first of likely many steps to bring businesses into Muse.

As tens of millions, and then potentially hundreds of millions of businesses, ultimately have their own agents on Muse, the bank expects Muse transactions to be handled less by browsing or calling, and more through agent-to-agent interactions. At that point, Meta will be able to monetize on a take-rate or commission model - or based on whatever the business’s goals are - similar to how it monetizes in advertising today.

Some more details

To justify its claims that Muse adoption is early and encouraging, JPMorgan writes that Muse has "shown strong early signs of virality and consumer adoption," with Muse reaching the #1 most downloaded free app in the U.S. and Canada Apple App Stores...

... and daily downloads in the U.S. now exceeding all other Meta Family of Apps.

JPMorgan believes Meta’s near-term priority with Muse is to continue to drive adoption and engagement, with monetization beyond heavy-user subs likely not coming until at least 2027. As such, Meta is already starting to push Muse via ad inventory on Instagram and Facebook, and is offering 1 Billion Muse Tokens for inviting friends to Muse in addition to launching a national TV ad campaign.

muse is going NATIONWIDE to a television near you

this is our first @muse ad ever, going live this weekend! we hope you like it while watching the big game(s)!

big ups to @joshginsberg, denise, and the whole meta marketing team ❤️ pic.twitter.com/1zMUVgdKna

— Alexandr Wang (@alexandr_wang) September 20, 2026

Additionally, Muse’s generous 100M free weekly tokens will likely be a core driver of sustained engagement as it compares favorably to Grok Bot ($30+/mo) and Gemini Spark ($20/mo), while Instinct (free) is still invite-only given compute constraints.

At its Q2 earnings, Mark framed consumer personal agents as a potentially massive market, with billions of people likely to use agents that understand their goals and work 24/7 on their behalf across health, hobbies, finances, productivity, relationships, & more. Meta is positioning Muse as clearly differentiated from traditional chatbots by emphasizing its ability to take action rather than simply answer questions, supported by computer-use capabilities & connections to the apps people use daily.

In addition to the existing library of Connectors (incl. Gmail, Spotify, Peloton, Opentable, and more), Meta recently opened access for developers to build Muse Connectors for their apps and services, and Muse can also guide users through creating custom Connectors for unsupported services.

Early Muse use cases suggest the product broadly aligns with the vision Meta laid out, with users sharing examples across commerce, product research, restaurant bookings, travel planning, email/text drafting, and other multi-step workflows.

While JPM expects Meta to prioritize adoption and engagement over monetization near term (consistent with its historic playbook), especially since Meta - like XAi - has excess compute among its many data centers - many of these workflows also provide a clear line of sight to longer-term monetization via:

1. a take-rate/ commission model based on transactions/objectives that Muse facilitates (e.g. shopping checkouts, reservations, flight/hotel bookings, lead generation)
2. subscriptions for incremental usage. It will take time for small businesses and larger enterprises to launch agents on Muse, but agent-to-agent interactions will likely form the foundation for Meta’s monetization.

Also, while Muse and other agents will surely face pushback from online platforms and marketplaces early on, e.g. Amazon has blocked Muse access, JPMorgan still expects broader ecosystem participation over time as agents prove to be incremental sources of traffic and transactions.

Turning to the market, JPM's Anmuth writes that "on a very tactical, short-term basis, we believe that some investors became more cautious heading into this week on the view that Muse had already launched, Watermelon would likely come after Meta Connect, & OpenAI would release its competing agent product this week, all of which may have contributed to Monday’s outsized move in Meta shares." More broadly, he expects Muse adoption and engagement to continue to ramp, with Meta beginning to prove out AI returns—and leadership—beyond its core advertising platform, with a Total Addressable Market potentially in the tens of trillions of dollars. 

Of course, it's not just unicorns and rainbows. 

A deeper dive reveals that at its core, Muse is merely an updated and modernized version of OpenClaw, the first real agent, and one which Meta's highly overpaid AI chief Alexandr Wang "reverse engineered" and repurposed for Meta's massive audience, using its vast distribution platform to capture agentic market share while taking advantage of Meta's massive excess compute. 

Bill D'Alessandro thinks he's found why Meta's Muse keeps impressing him.

It's OpenClaw under the hood.

Nine months ago OpenClaw didn't exist under that name. Peter Steinberger shipped it in November as Warelay, renamed it Clawdbot, then Moltbot, then OpenClaw after Anthropic…

— Prasenjit Sarkar (@stretchcloud) September 21, 2026

An X user explains why this matters:

The bottleneck in personal AI agents was never the model. It was the signup flow.

Nat Friedman said something worth sitting with today: Meta built Muse from scratch, but it's heavily inspired by OpenClaw, and after using OpenClaw in January he bought hundreds of Mac minis for his team because they fell in love with it.

Here's the mechanism. OpenClaw is a self-hosted agent framework that Peter Steinberger and dozens of contributors built in under six months. It crossed 100,000 GitHub stars in its first week and has passed 387,000 stars, one of the fastest growing repos in GitHub's history. You run it on your own server, point it at any model, and it manages memory, browsing, messaging and cron jobs through plain markdown files: SOUL.md, IDENTITY.md, USER.md.

Muse, which Meta shipped September 8, uses that same file structure. Its own agent confirmed it when asked directly: it runs on those exact files. Meta didn't need to out-engineer the open source version. It needed to remove the server, the API keys and the config, and hand three billion people a one minute signup instead.

The result: Muse pulled 902,000 downloads in its first six days, ahead of Meta AI's own 773,000 in the same window, and META stock jumped more than 12% on the numbers. Nous Research's Hermes Agent is chasing the same self-hosted lane and can import OpenClaw's settings directly. Steinberger is now joining OpenAI to work on agents for everyone, and OpenClaw is moving to a foundation to stay independent.

I've watched this movie before. Docker didn't invent containers. Slack didn't invent chat. The lab that wins is rarely the one that proves the concept. It's the one that removes the last piece of friction between the concept and a normal person's Tuesday.

The hidden bottleneck was distribution wearing a technical costume. My take for founders: if your product needs a server and an SSH session just to try it, you're one onboarding flow away from a much bigger company doing it for you.

The problem with rushing out an optimized version of the original agent is that Meta appears to have steamrolled over some of the most basic tenets, such as security and privacy. Regarding the first, this is what ArsTechnica said

Meta founder and CEO Mark Zuckerberg has gone to great lengths to hype the security of its new AI assistant, Muse, claiming it is “built from the ground up for privacy and security.” A zero-day vulnerability that gives locally run apps and terminal commands complete control of the agent raises serious doubts. Further raising questions, Amazon on Sunday began blocking Muse from its site.

... For Muse to do [the things it does], users must first give it access to their accounts. This includes authenticating the assistant to each service and, because the app runs on macOS, giving it permissions to a broad range of operating system-restricted device resources, like writing files to disk, accessing the mic and camera, and monitoring location and calendars. Apple has spent years developing these defenses to prevent installed apps or commands entered into the terminal from accessing these resources, clearly because the company considers them a security threat. Muse completely undoes these default measures.

The zero-day allows any app or terminal command to gain access to the token that authenticates users to their Muse account. Meta developers designed the assistant so that any locally installed app or executed code, regardless of the macOS permissions it has, can change a long list of undocumented settings. Most of them are fairly innocuous, such as controlling dark mode. One setting, however, is anything but innocuous. It allows processes to change the endpoint where transcription occurs. Normally, it’s a server address operated by Meta. Attackers can exploit this flaw by changing the location to their own endpoint. Once that happens, the attackers have the token that gives complete control over the Muse account.

...

"To me, the bar is infinitely higher in terms of the security of these apps. They don’t have to be perfect, but when you take a look at Muse, it’s like they didn’t, in my opinion, think about security, which is really worrisome,” Wardle said. “At the very least, they should be thinking about security from the very start, and they are just not.”

Which brings us to privacy, which at best was an afterthought for Muse. IBM Vice Chair Gary Cohn told Yahoo Finance that he is not ready to use the service because of privacy concerns. He has good reason for that, as this excerpt reveals: 

I installed Muse on my iPhone and then on a Mac mini I have basically for this very purpose. I asked it to write a bio of me from what it knew about me. After some back and forth where it told me it only knew my name, I suggested it use its browser to find some info. It did, and it came back with a reasonable bio. It isn’t one I would ever use, but that wasn’t the point. I just wanted it to do its first research on me.

I then asked it to suggest things it might do to help me, based on what it knows about me. It suggested researching topics for articles, helping book podcast guests, and creating a morning briefing each day on stories and events it thinks I might want to write about.

Then, yesterday, I was having a conversation with my Primary Technology podcast co-host, Stephen Robles, about the new iPhones. Moments later, I got a push notification from Muse suggesting that the conversation we were having would make for a good column and offered to put together research for me to write about. It even flagged a message from my editor about having a column ready for Monday.

Not only had I not asked it to do that sort of thing, I never gave it permission to read my messages. In fact, I remember explicitly choosing not to let it have access to my messages, calendar, and other personal information.

Stranger still was what happened when I asked Muse how it knew. It told me it didn’t have access to my message history at all. Instead, it said the Muse app on my Mac was simply passing along the text of incoming notification banners.

“When a notification pops up on your paired Mac, the text of that notification gets relayed to me—basically what you’d see in the banner itself,” Muse told me.

It went even further. “I can’t open your Messages app, scroll threads, or read history. It’s the incoming notification stream only, not access to your texts.” Except that wasn’t true.

And then, there are plain old glitches as this op-ed from Inc shows:

If you haven’t read my piece about Muse uploading all my private text messages and then hallucinating an explanation, you probably should. The short version, however, is that if you give it Full Disk Access on a Mac, it will do things way beyond what you’ve asked it to do. And I’m a pretty tech-savvy person, and I did not give Muse permission to access my messages, and I never once asked it to perform a task that would have required it to do that. Still, it started sending me push notifications about texts I was receiving from my editor as well as my podcast co-host.

When I asked Muse how it knew what I had been talking about, it told me it could see notification previews from my Mac. When I pushed further, it told me it couldn’t give me “the exact plumbing.” It turns out the robot just made that up. The real answer was much worse.

Adding insult to injury, there is a clear incentive to dissemble and prevaricate from day one, an immediate warning sign which got Muse blocked from Amazon.

Looking at the shipping version of the Muse app, I noticed that the code includes evidence that its automated browser goes out of its way to not look like an automated browser. Muse also launches Chrome in a way that disables automation indicators and injects code that hides navigator.webdriver—the standardized property that tells a website a browser is being controlled by automation. 

Muse also creates fake values in Chrome for things like browser plugins. That’s designed to create a browser fingerprint that appears more like one belonging to a human, not a robot. It even checks pages for signs that it has been detected or blocked, including CAPTCHAs, “verify you are human,” “access denied,” and Cloudflare’s “Ray ID.” This is especially notable given Amazon’s claim that Muse does not identify itself as an AI agent when visiting its store.

* * * 

To be clear, I’m not suggesting Muse is secretly reading everyone’s messages or routinely bypassing macOS security. I still haven’t gotten an answer as to how it was reading my messages with Full Disk Access turned off, but I’d be happy to dig into it with anyone from Meta that wants to help. I am, however, suggesting that trust is the single most important asset any company has, and Meta has a giant Muse-sized trust problem.

Assuming one is ok with all of this, the next question is how much will all this cost Meta?

As WCCFTech explained , to eliminate privacy concerns, Muse runs inside a dedicated and isolated cloud computer - a Virtual Machine or VM - that contains its own browser to securely house your data and credentials. A second guardrail, called a Sentinel, continuously monitors the environment, and ensures that the agent does not finalize transactions without both Sentinel's approval and your explicit confirmation.

Referencing an X post, the outlet notes that Meta has promised each Muse user a dedicated VM, replete with 2 vCPUs, 8GB of RAM, and 100GB of SSD. Assuming the personal agent scales to 100 million users within 1 year - entirely plausible especially as it is already topping app download leaderboards - Meta would require at least 1.58 million AMD Ryzen EPYC CPUs, where each such CPU has 126 cores.

Of course, Meta can reduce this number by heavily sharing CPUs between active users. If 10 percent of Muse userbase is active and running tasks at any given time, the CPU load falls to 158,000 AMD Ryzen EPYC units. Of course, to maintain network scalability, Meta might have to target a 50 percent userload, which then translates to 0.79 million AMD Ryzen EPYC CPUs. As such, a lot rides on the overall compute architecture that Meta follows.

The memory and storage conundrum, however, is trickier still. Since your personal persistent Muse VM has to be available 24/7, 100 million users can entail 100 petabyte of RAM and 10,000 petabyte of SSD. Of course, not all users will consume this quantum of storage.

For obvious reasons, these compute requirements are quite strenuous, and can rapidly scale if Meta allows access to Muse via WhatsApp and Instagram. It is hardly a surprise, therefore, that Meta appears to be going all-in on compute in recent weeks and months, becoming the primary co-developer and lead deployment partner of Arm AGI CPU in March 2026. The tech giant also added tens of millions of AWS Graviton cores to its compute portfolio in April 2026.

Taking a closer look at the math reveals some truly startling numbers as laid out here:

Every Muse user is supposed to get their own cloud PC. 2 vCPUs, 8GB RAM, 100GB disk. 

If Meta actually leaves those boxes on, user growth turns into a chip and memory problem.  that’s what i'm trying to size

Muse is 13 days old and US only
App Store downloads are still under 1M on iOS; Add WhatsApp, web, android, mac and you might have 1-2.5M accounts. Most of those are not hot machines. Call live VMs closer to a million 

Ok, where does this go:
- stays messy and US-heavy: maybe 30M in a year
- whatsApp works: 25M in six months, 100M in a year
- they force it through whatsapp and insta: 250M

Let's go with 100M, the middle scenario

Those EPYCs have 126 cores. Two vCPUs per user means about 60 VMs per chip if nobody is sharing. Share them and you fit more, and it is less of a private machine.

if you leave them 1:1 and always on:
today → tens of thousands of chips, 14 PB RAM  
25 million → 400k chips, 200 PB  
100 million → 1.6 million chips, 800 PB RAM, ~1.6 GW  
250 million → 4 million chips, 2 EB  
1 billion → 16 million chips, 8 EB

$AMD
Ships on the order of 10 million server chips this year. The whole industry about 39 million. 
100 million dedicated Muse users is a visible piece of AMD’s year, and they were already getting called sold out. Next die has more cores, which is how you stuff more VMs on the same chip.

CPU time can be shared. That RAM stays reserved if the files are supposed to live on the box. 2026 DRAM is already spoken for, HBM first. 100M users would lock up about 1% of a year’s DRAM bits. A billion users, 10%.

Meta’s own power plan is 7 GW this year, 14 next. Training and ads are already in that.

The paid tiers do not cover it. 
Ten million people on $20 is $2.4 billion a year. 
Last quarter Meta did $60.8 billion, almost all ads, and $31 billion of capex. 
Full year capex is $130-145 billion. 100 million 
VMs is $30-50 billion of hardware if you actually build them.

The conclusion: "either a lot of those VMs get frozen when idle, or this does not scale as advertised"

To summarize: judging by the initial reception, the Muse has been very successful, and as of this moment, it has enough momentum to become the most popular agent in the world. However, those using it should be aware of three things: they will have no privacy, and virtually no security (good luck getting customer services at the free tier when Muse goes rogue and deletes all your emails or spends all your money on pizza deliveries). Worse, the glitches of this rushed product will only emerge over time. And then the question is how much will all this cost Meta, which is already neck deep in capex, and its CDS is soaring to all time wides, outperforming just the debt basket cases that are SpaceX and Oracle. 

Hyper CDS new all time wides, led by ORCL, SPCX, NVDA and META pic.twitter.com/gr7OcinLUl

— zerohedge (@zerohedge) September 23, 2026

Which leads us to the last question: after the initial phase of curiosity fades, how many people will be willing to pay Zuck $20 (or $100) every month to run their lives?

The answer will determine if Zuckerberg's latest toy will become what JPMorgan said could be the "most widely used consumer AI application since ChatGPT", or if a better name for Muse would have simply been Metaverse 2.0... and its trademark bottomless money pit.

More in the full JPMorgan note available to pro subs.

Tyler Durden Thu, 09/24/2026 - 00:55

Something Has Changed And World War Over Ukraine Is Back On The Table

Authored by Brandon Smith via Alt-Market.us

The eyes of the world have been fixated on the war in Iran for the past six months, meanwhile, the single-most dangerous flashpoint on the planet has gone mostly ignored. Until, that is, waves of Ukrainian drone strikes activated a run on global diesel markets. Suddenly, everyone is paying attention again…

Russia is the second largest diesel exporter in the world next to the United States, supplying around 12% of total global exports (the US supplies 22% of exports). To put this in perspective, only 10% of global diesel exports pass through the Strait of Hormuz under normal conditions – And that supply is coming from seven different oil producing nations including Iran.

After western sanctions, Russian diesel shipments have gone primarily to Turkey, Brazil, India and China. However, because Russian supplies continued to circulate on global markets, these countries did not have to draw fuel from alternative sources.

Conditions have now changed, and not for the better. Constant Ukrainianian drone strikes on Russian refineries have forced the Kremlin to stop all diesel exports and retain their existing supply for the population and the war effort.

If you want to know why diesel prices have been hit hard since July, Russian export cuts are the reason. Traffic through the Strait of Hormuz has steadily climbed since July according to independent satellite tracking confirmation (anyone using AIS transponder data alone will have a low and inaccurate count). It’s the Russian refinery issue that has inflated diesel prices in recent months.

With Russian sources completely cut off, multiple nations will have to draw from other producers. Meaning, the pie is shrinking, but everyone still wants the same size slice they’ve always had. If the US also stops diesel exports in response, it would be a disaster for foreign markets and result in true supply shortages (Europe would be hard hit; half of their diesel imports come from the US).

In 2024 I questioned why the Ukrainians kept going after odd targets such as nuclear early warning radar stations rather than key resources like oil refineries in order to stop Russia’s attrition strategy. Well, it looks like the Ukrainians finally figured it out.

Russia’s attrition strategy has been highly effective in grinding down Ukraine’s troop strength (to the point that they were recruiting mostly men over 40), but the key flaw of a slow moving front line and a protracted offensive is that it requires a large stockpile of resources. Ukraine’s drone attacks have a low success rate, but if they send a thousand UAVs to attack a refinery and a couple get through, then that’s still a win in the long run because it drags down Russia’s lumbering attrition-based operation.

The Trump Administration has asked Ukraine to stop hitting Russian refineries due to the instability to global markets, but Zelensky has ignored the request. It’s not surprising; they’ve finally found a tactic that works.

Of course, now the rest of the world is being affected by diesel supply shortages when this was not the case a year ago. One would think the Europeans, who have been particularly throttled by price hikes on fuel and energy, would be in a rush to end the war. And maybe they are about to intervene, but not in the way we might hope…

I think it’s fair to say that the Ukraine war would have ended a long time ago had it not been for the interference of European governments propping up Ukraine and encouraging them to NOT make a deal. Ultimately, Russia is going to keep the Donbas region whether Ukraine likes it or not. But Zelensky refuses to accept this outcome, so, the war rages on much longer than it needs to.

The situation gets much more dangerous, though,with the push by European elites to put boots on the ground. They seem to want to start a world war. Beyond the diesel resource problem which puts a timetable on the war for both sides, European governments have increased troop movements to eastern borders and it’s starting to look like they’re getting ready for something big.

Poland has been building extensive trenches and fortifications using German combat engineers on the border of Belarus. Germany has established a 5000-man armored brigade in Lithuania, the first time the Germans have stationed permanent combat troops abroad since 1945. NATO has launched a 9th multinational battle group with regular exercises in Finland near the Russian border. Multiple nations are sending rotating brigades to Latvia, Romania and Estonia. Even the Canadians are sending troops.

Recent weeks have seen repeated Polish and Baltic fighter activations due to alleged drone or aircraft activity near alliance airspace. Allies are pre-positioning equipment and planning much larger stockpiles of ammunition and resources in frontline states. NATO has also published extensive contingency planning for the eastern flank.

There has been a surge in political and civil-preparedness messaging for civilians. Polish warnings about possible disguised drone/missile incidents. French measures to protect critical infrastructure after hybrid-attack briefings. German military-hospital capacity planning. Lithuanian plans for evacuation routes. UK public preparedness bulletins including recommendations for civilians to stock up on food and supplies..

Even Switzerland has been posting security and preparedness messages for citizens, indicating a “deteriorating security situation” in relation to the military build up.

All of this could be viewed as a defensive posture and not necessarily planning for direct engagement with the Russians; but consider for a moment that Russia has not once threatened to attack European or NATO targets and has consistently said that their only interest is Ukraine. Yet, Europe has removed their “trip wire” defense strategy and replaced it with a permanent front. It sure does seem like they are getting ready for an event which might provoke the Russians to strike targets outside of Ukraine.

What would that event be?

To be clear, I’m not a big fan of the Russian government. Evidence suggests that they engage in regular psy-ops in the US and there are far too many conservative influencers who kiss Putin’s ass. That said, I’m not a fan of Ukraine or the Europeans either, and I suspect the EU elites would LOVE to trigger a world war if they thought they could get away with it.

Why? Well, here’s my theory…

Europe has been the primary target of a decade long cultural replacement operation. Mass immigration has been utilized to undermine the stability of economic and social structures. For years I have been warning that these third world migrants are being imported as a mercenary army to control the locals and prevent rebellion against future leftist agendas.

We are already seeing confirmation of this in the UK, where migrants are being integrated into police forces to subdue conservative protesters.

The thing is, this invasion plan has sparked an enormous counter-movement of European patriots in countries like Britain and Germany. Anti-immigration and conservative parties like Restore in the UK and the AFD in Germany are seeing wild success in membership and elections. Meaning, time for leftists/globalists is running out and they need to do something quick before they lose direct governmental power.

A world war sure would come in handy, right? All kinds of restrictions on the populace can be put in place, along with a perfect excuse to delay or eliminate normal elections. Would the progressives actually go that far just to prevent conservatives from taking government?  We all know that they would.

So, we have two running clocks that did not exist at the beginning of the Ukraine war: We have a diesel shortage clock, specifically for the Europeans. And, we have an avalanche of conservative movements with major elections happening from 2026 through 2029.

My concern is that the leftists are about to go for broke in an effort to keep power. I don’t think they’re crazy enough to want a nuclear war, and perhaps the Russians want to avoid this as well. If that’s the case, then the result would be a large multi-region conflict that MIGHT turn nuclear if either side feels like they are losing.  The main goal of the EU elites at that stage would be to lure the US into the fray.

In any case the aftershocks would be disastrous. Let’s hope that conservative and populist movements in Europe can pull the rug out from under their far-left governments before the situation on the eastern front escalates any further.

Tyler Durden Wed, 09/23/2026 - 23:25

Korea Picks A $22 Billion Texas Gas Plant As First Down Payment On Its $350 Billion Pledge To Trump

Ten months, one tariff threat and several "sleepless nights" later, South Korea has finally found somewhere to put the first piece of the $350 billion it promised to invest in America. The winner is a gas-fired power complex in Encinal, Texas (population 540, where real estate is about to ballistic), and it is built to feed the one thing Washington can never get enough of: electricity for data centers and chip fabs.

According to the FT, Seoul this week chose the proposed $22.3 billion, 6.3-gigawatt complex. The White House could announce it as soon as Wednesday, possibly with Trump announcing it himself, depending on how preparations for Xi Jinping's arrival in Washington go. Trump and President Lee Jae Myung met for 30 minutes on Tuesday on the sidelines of the UN General Assembly. The deal still needs final US approval.

Donald Trump, left, has also pressed South Korea’s President Lee Jae Myung to support the war in Iran © Evelyn Hockstein/Reuters

Yonhap reported that the plant will be built in stages: an initial 1.4GW of simple-cycle gas turbines, followed by roughly 4.9GW of more efficient combined-cycle generation. However, in the first whiff of even more vaporware, no customers have been confirmed. Korea's KED Global adds that there is no power purchase agreement yet, with signing targeted for 2027. It also reports that the Trump administration asked for a roughly 25% increase in the project's size, which would take it to about $25 billion.

How the money works

Under the November 2025 agreement, Seoul supplies $200 billion in upfront capital for projects in "strategic industries," capped at $20 billion a year, plus a separate $150 billion for shipbuilding. Project cash flow is split 50/50 with Washington until Korea recovers its principal and interest. After that, Korea's share drops to 10% and the US takes 90%. It is a generous arrangement, just not for the side putting up the money.

Korean officials told the National Assembly that Encinal could generate $43 billion to $45 billion of revenue over 20 years, which they say is enough to recover principal and interest. Those numbers deserve a closer look:

• $43 billion to $45 billion works out to roughly $2.2 billion a year, or about twice the upfront capital. That is gross revenue. It comes before fuel, operations, maintenance and financing costs, and pretty much everything else... and gas is the main input cost of a gas plant.
• Korea receives only half of the project's cash flow until it is repaid. On a plain reading, recovering $22 billion plus interest from a 50% share would take distributable cash flow well above the capital invested. Seoul has not yet published a breakdown showing how revenue of about 2x capex achieves that.
• The official line is that every project must be "commercially reasonable." But as Haeyoon Kim of Korea Tech and Trade Watch told the FT, the US-led Investment Committee decides what counts as commercially reasonable, and Trump makes the final call. Seoul can object, but objecting risks higher tariffs.

Industry Minister Kim Jung-kwan said the government had "been negotiating intensely with the U.S. in order to pursue commercially viable projects," and that the goal was to expand Korean companies' entry into the US market. Lee said last week the talks had given him "sleepless nights."

Following Japan's lead

Tokyo went first. As we reported in February, the opening $36 billion tranche of Japan's $550 billion pledge was led by SB Energy's 9.2GW gas plant in Ohio (which as we reported last night is suddenly having major issues, having delayed its IPO), which Commerce Secretary Lutnick called "the largest natural gas generation facility in history." Japan has since added up to $40 billion of small modular reactors in Tennessee and Alabama.

If Seoul was looking for a template, it found one. The cost per unit of capacity is almost identical. At $22.3 billion for 6.3GW, Encinal comes to about $3,540 per kilowatt. At about $33 billion for 9.2GW, the Ohio plant comes to about $3,590 per kilowatt. Both are well above what US combined-cycle plants cost before the AI boom, which is what happens when every hyperscaler on earth wants the same megawatts at the same time.

The real constraint: turbines

Money, it turns out, is the easy part. As we detailed earlier this month, large gas turbines are effectively sold out through 2030. Applied Digital's CEO warned that orders placed today may not arrive until 2032. Some developers are so desperate they are going back to 19th-century technology, boilers and steam, just to get power online sooner. Encinal's plan, 1.4GW of fast-to-deploy turbines first and then 4.9GW of combined-cycle capacity, means getting in line for the same heavy-duty equipment every hyperscaler is already chasing.

Goldman's latest research on the power problem (available to pro subscribers) published just hours before the FT story, shows why Washington wants these megawatts. In a Carbonomics note on Wednesday, Michele Della Vigna's team said that with power availability "emerging as a key constraint on AI infrastructure deployment" and grid connection times in the US and Europe expected to lengthen, they "raise our outlook for BTM [behind-the-meter] power generation from 40GW to 67GW by 2030."

Goldman now expects on-site gas generation to meet about 28% of US data center power demand by 2030. Its preferred beneficiaries of conventional gas generation are GE Vernova, Siemens Energy, Mitsubishi Heavy and INNIO. Not a Korean name among them, which leaves an awkward question for Seoul: how much of the equipment spending on a Korean-funded plant will actually end up with Korean suppliers.

The competition for that equipment is not only American. The same Goldman research flags that Alibaba Cloud is targeting 20GW of data-center power by 2032, which is more than three Encinals for one Chinese cloud provider alone.

Then there is the question of who ends up buying the electricity. The obvious candidates are the hyperscalers, and they are not short of cash to spend. Goldman credit strategist Amanda Lynam last week raised her forecast for hyperscaler investment-grade bond issuance to $420 billion in 2027, "more than a 60% increase vs our full-year 2026 estimate of $250 billion," with 65% to 75% expected to be placed in the dollar IG market.

In other words, the would-be customers for Encinal's power are borrowing record sums to build data centers that need exactly this kind of plant. The bull case for Seoul is that one of them signs a PPA by 2027. The bear case is that Korea has fronted $22 billion on the assumption that someone will, while the AI capex cycle that Goldman's own economists say has companies "over-earning" is nearing its peak.

The bigger picture

The project comes as the US-Korea relationship is under strain on several fronts:

• Iran: Trump has pressed Seoul for help in the war against Iran, and Lee has ruled out sending forces in a combat role.
• Submarines: Seoul wants US help building nuclear-powered submarines. Washington agreed last year to cooperate on technical requirements and fuel, but there has been almost no progress since.
• Linkage: One Korean official told the FT that US counterparts had signaled further progress on the submarines would come only after Seoul announced some of its promised investments. Pay first, then we talk.

Nuclear projects and a scaled-down Alaska LNG project are expected to follow Encinal. Korea is also negotiating a stake of about 7% in Westinghouse, down from the 15% it originally sought, according to KED. For now, the first check is going to a Texas gas plant with no customers, no power purchase agreement, turbines that may not show up this decade, and revenue projections that still have to be squared with a 50/50 cash-flow split. That leaves $328 billion to go.

Tyler Durden Wed, 09/23/2026 - 23:00