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Das: The End Of American Greatness?

Authored by Satyajit Das via New India Exporess,

A U-turn for the US in its 250th birthday

America’s claim to singularity rested on plentiful resources, cheap labour, govt largesse and military edge. With all of the factors fraying, it needs a hard look at the mirror

As the United States of America celebrates the 250th anniversary of its independence, it is useful to reflect on the nation’s ascent. History and geography foremost. A virgin territory for European colonisers provided a fresh start escaping the encumbrances, distinctions, hatreds and internecine wars of the Old World. It is a continent protected by two, as President Donald Trump puts it, “beautiful” oceans. Other than the revolution for independence, war of 1812, the civil war and the Mexican-American war, it has largely avoided major warfare on the mainland.

Today, it happens to be the third-largest continent blessed with fertile soil, plentiful freshwater, forests and mineral deposits including iron ore, coal and oil—most of it obtained cheaply by forcibly dispossessing and exterminating indigenous owners. The drive and ambitions of generations of immigrants with little were central to development.

In the 20th century, it attracted talent from other countries across disciplines. Foreigners are central to US industry and science. Today, more than half of Silicon Valley’s technology workers are foreign-born and trained overseas at the cost of their native countries. Agriculture, hospitality and construction benefit from cheap immigrant labour, particularly for physically demanding, repetitive or menial jobs. Abundant resources facilitate a strong agricultural and industrial base, which underpins its military power.

America’s free enterprise ethos is overstated. Public investment on infrastructure, education and research, such as funding from the Defense Advanced Research Projects Agency, are important. The Internet and Google’s search engine were partially supported by government funds. American industry benefitted from tariff protection.

Low wages are central. Many G20 countries have significantly higher minimum wages than the US level of $7.25 per hour (higher in some states). America’s Gini Coefficient—a measure of inequality—is higher than many comparable economies. America’s ‘get-rich’ and ‘everybody-can-be-a-winner’ culture is central to acceptance of these discrepancies. American tolerance for failure is significant. F Scott Fitzgerald was wrong believing "there are no second acts in American lives”. For most entrepreneurs, bankruptcy is conveniently a rite of passage.

The US dollar’s status as a reserve currency in the post-war monetary order allows American businesses to minimise currency risk, heavy government borrowing to finance large budget and current account deficits while boosting US financial markets. Strong protection of rights and good governance, historically, gave confidence to domestic and foreign actors.

These advantages have diminished over time.  America faces resource constraints. Agricultural output is affected by declining soil quality, the use of fertilisers and pesticides, and climate change effects on rainfall, wildfires and temperature. Monocultural farming practices have increased exposure to disease. Forests have been overharvested. Many raw material reserves are now reaching the end of their economic lives. The US’s oil reserves may last for roughly 50 years, depending on consumption and new discoveries. Their expected life, excluding shale oil, may be less than 10 years.

Deindustrialisation and outsourcing of production have substantially reduced its industrial base. Business largely provides services or focuses on branding, marketing, advertising and selling other’s products rather than on manufacture. Tesla views itself as a technology firm, recycling a product first considered by Thomas Edison and Henry Ford. It has fallen behind Chinese firm’s like BYD. Industrial giants, like GE and Boeing, are in decline. Important innovation hubs like Bell Labs and PARC are less influential.

This has been accompanied by loss of skilled workers. Despite being skewed by the results from expensive private schools, US students ranked 28th and 12th out of 37 OECD member countries in mathematics and science respectively, below major industrial peers. Favoured careers for American children include influencers, online content creators or professional athletes. America trains fewer engineers than Russia despite a population almost two and a half times larger. The decline of interest in STEM careers has meant growing reliance on foreign expertise in key areas. In the words of Russian physicist Sergei Kapitsa: “Mathematics is what Russian professors teach Chinese students in American universities.” 

America’s military, reliant on expensive high-tech weaponry, has repeatedly failed against patient opponents skilled in cheap asymmetric warfare willing to endure long campaigns of attrition and losses. Societal dysfunction is evidenced by deaths of despair, the rise in mortality rates from suicide, drug overdoses and alcohol-related deaths linked to social and economic factors.  

Restoring American greatness requires addressing these trends. Instead, the Trump administration is accelerating and entrenching them.  It is fomenting societal divisions for short-term political gain. Homeland and border security is now a vehicle for xenophobia, racism, vilification and legal mistreatment of foreigners, some of whom are legal residents. This immigration phobia is counterproductive given American dependence on foreign skills and cheap labour. The US is now a less favoured destination for global talent with scientists, engineers and researchers seeking opportunities elsewhere.

The over-hyped free-enterprise system has given way to control by wealthy insiders buying influence by their campaign contributions. The dollar’s supremacy is under threat from seizure of foreign assets, tariffs, secondary sanctions, expulsion from the dollar payment system and the risk of a constructive default by a forced exchange of US government bonds for less valuable securities. 

The rule of law is threatened by arbitrary rule using erratic Presidential fiat, disregard for court orders and weaponising an increasingly partisan Department of Justice and judiciary to attack adversaries. Unilateral claims on assets, like Ukraine’s minerals and energy plants, Venezuelan oil, TikTok, the Panama Canal and Greenland, which can then presumably be redistributed to the administration’s favoured lickspittles, undermine protection for property rights and will discourage foreign investors.

American society is now unstable. Some divisions, like those along racial lines, income and wealth, are familiar. A new element is resentment of an intellectual elite and experts captured by Pat Buchanan: “… it is blue-collar Americans whose jobs are lost when trade barriers fall, working-class kids who bleed and die in Mogadishu… the best and brightest tend to escape the worst consequences of the policies they promote… This may explain … why… the best and wealthiest Americans are the staunchest internationalists…” Consensus is nearly impossible. The chance of some form of civil war is now non-trivial. 

Rather than greatness, the US is transitioning to a failed First-World kleptocracy with high tariffs, unsustainable debt, budget deficits, oligarchy, corruption and societal dysfunction. For those seeking parallels, the reigns of Idi Amin in Uganda and Mobutu Sese Soku in Zaire offer helpful guides.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Thu, 07/30/2026 - 21:45

A Dozen Red States Join Trump's SCOTUS Vote-By-Mail Shadow-Docket Push

The Supreme Court fight over President Trump's mail-in voting order picked up reinforcements this week: twelve Republican-led states, with Alabama at the front, filed Tuesday in support of the administration's emergency application, and the procedural clock now compresses the whole dispute into roughly the next two weeks - with the midterms 96 days out.

As we detailed Tuesday, the administration went to the high court Monday seeking to lift the injunction blocking Executive Order 14399 - the March directive ordering DHS and the Social Security Administration to compile citizenship-verified voter lists and instructing the Postal Service to restrict delivery of mail ballots to people on them - after the 1st Circuit upheld the block on Saturday in a 2-1 decision declaring that "state and local officials are responsible for administering federal elections." The new development, per SCOTUSblog's Amy Howe, is the twelve-state filing urging the justices to pause the 1st Circuit's order while litigation continues - and the argument it leads with is the one most likely to get a stay granted: a live circuit split. The states point to two recent D.C. Circuit rulings on the very same executive order, one of which, they say, "held that it is too early to challenge the EO," and the other of which reinstated the order on that same basis.

Courts Split

The 1st Circuit blocked the order across the 23 Democratic-led states (plus DC) that sued in Massachusetts, reasoning that election officials there are already diverting resources and buying ballot envelopes to comply with a directive that may be unlawful. The D.C. Circuit, looking at the same order, lifted a broader injunction against the Postal Service rule - leaving open, as CNBC noted, the possibility that USPS could implement the restrictions in the 27 states that never sued. Two appellate courts, one executive order, opposite bottom lines, an election on the calendar: that is the fact pattern emergency relief was invented for, and the red states are making sure the justices cannot miss it.

Solicitor General D. John Sauer called it "an intra-branch directive from the president to his subordinates" that of its own force changes nothing in any state, per CNN - while simultaneously warning, per The Hill's account of the application, that agencies would need to begin implementation as soon as early-to-mid August for anything to take effect by November, given state timelines for voter-roll verification and absentee ballot processing. Both things can be true, but the second one sets the real deadline: if the Court has not acted within days of receiving the states' response, the order is functionally dead for this cycle no matter who eventually wins the merits.

Looking Forward

The challengers - the California-led coalition of 23 states and DC - must respond by 4 pm Monday, August 3, to both the government's application and the twelve states' supporting request. The application lands first with Justice Ketanji Brown Jackson, who handles emergency matters from the 1st Circuit, though the full Court customarily votes when an administration brings the request. This is, per CNN, only the administration's third emergency appeal of the year after filing nearly 30 last year - the administration's 35th overall, by The Hill's count - a slowed cadence that makes the ones it does file read as the priorities.

Whether a president can direct federal agencies to build a national eligible-voter list and condition mail-ballot delivery on it, or whether that intrudes on election machinery the Constitution leaves to the states - will not be resolved on this timeline. What gets resolved in the next two weeks is simply whether the order operates in November, and in which states, and the answer may well arrive via a one-paragraph shadow-docket order with no reasoning attached. Ninety-six days out, with 23 states running one set of mail-ballot rules and 27 potentially running another, the map itself is becoming the story...

Tyler Durden Thu, 07/30/2026 - 21:20

Why Americans Soured On Higher Education

Authored by Viktor Joecks via The Epoch Times,

Even colleges can’t fool all of the people all of the time.

Just 38 percent of Americans have high confidence in higher education, according to a new Gallup poll. That’s down from 57 percent in 2015. Gallup found the three main reasons for this lack of confidence are political agenda, cost and not preparing students for a future career.

This is a stunning—and much-needed—fall from grace.

Many schools and politicians spent decades pushing ever more kids into college. Sen. Bernie Sanders even sponsored the “College for All Act.” It was endorsed by numerous left-wing groups, including the American Federation of Teachers and National Education Association.

These voices assured high school students that higher education was a virtual guarantee of financial security. You’ve likely heard some version of this factoid. College graduates earn $1 million more than non-graduates during their careers.

This effort certainly convinced more people to attend college. In 1974, just under 48 percent of high school graduates attended college. That number topped 70 percent in 2009. In 2014, it was 68.4 percent.

But for many, the promised financial benefits didn’t materialize—even as tuition soared. More than 9.5 million student loan borrowers are currently in default, according to a recent AP analysis. That includes a 4.2-million-borrower jump from April 2025 to March 2026. One of the reasons for the sudden jump appears to be the end of the COVID-era payment pause. Borrowers go into default if they don’t make a payment for nine months.

Universities once introduced students to the great ideas and authors of Western Civilization. Now, many professors emphasize America’s sins, not her greatness.

Debate once flourished on college campuses. Now, colleges routinely allow students to shout down speakers who believe men aren’t women or harass Jewish students.

Further, elite universities routinely discriminate against white and Asian applicants.

Would-be students have noticed.

In 2024, college attendance was under 63 percent among high school graduates. The drop-off has been especially pronounced among male students.

A decline in college enrollment has led to a wave of college closures. In the 2013-14 school year, there were more than 7,200 postsecondary institutions accepting federal financial aid. In the 2024-25 school year, there were 5,760. That’s a 20 percent decrease.

This doesn’t mean UNLV or Stanford are on the verge of bankruptcy. Many of the closed schools were technical schools that offered certificates, not four-year degrees. But hundreds of degree-granting institutions, especially in the Northeast, have closed too. America’s declining birth rate is another daunting problem for many struggling institutions.

Now, colleges face a new challenge—students using AI to cheat. Brown University economics professor Roberto Serrano recently demonstrated how widespread this problem is. For one economics class, he let his class of 86 take home the midterm. The average score was 96 percent. In past classes, the average midterm score had been between 65 and 80 percent.

Since he suspected many of his students used AI to cheat, he changed the final to an in-class exam. Twenty-seven students either dropped the class or didn’t take the final. The average score was 48.5 percent. Two students who scored 100 percent on the midterm scored a zero on the final. The data suggested only a handful of students didn’t use AI on the midterm.

Put this all together.

College is ridiculously expensive, saddling many students with loans they’ll spend decades struggling to repay. Colleges shelter students from authors like Shakespeare and competing ideas. They practice racial discrimination in admissions. And now, students can get A’s by outsourcing their thinking to ChatGPT. Even propped up by government subsidies, that’s not a great sales pitch.

Here’s the irony. The ongoing college collapse is driven by knowledge, not ignorance.

Tyler Durden Thu, 07/30/2026 - 20:55

Cuba Crisis: Assessing The Claims Against Havana

By Patrick Pillow Via The Libertarian Institute

When President Donald Trump declared Cuba an “unusual and extraordinary threat” to US national security in a January 2026 Executive Order, the designation was accompanied by a series of sweeping claims. Among them were accusations that Cuba “provides support” to Russia, China, Iran, Hamas, and Hezbollah, that it “supports terrorism,” and that the Cuban government supports actors who “seek to destroy the United States.”

What began as a discussion over Cuban intelligence capabilities has now expanded into a much broader narrative that presents Havana as a link between America’s foreign adversaries, militant organizations, and domestic political movements. And the claims have only continued to grow.

At the center of the debate are concerns over Cuba’s intelligence facilities and potential cooperation with foreign adversaries. Commercial satellite imagery has shown development at Cuban intelligence sites, including the Bejucal facility near Havana, where analysts have identified construction consistent with expanded signals collection capabilities.

The discussion quickly shifted from the capabilities identified through satellite imagery. In May 2025, Fox News reported that Republican lawmakers were increasingly concerned that Chinese-linked facilities in Cuba could serve as a platform to “monitor U.S. military movements” and “disrupt critical communications.”

The article highlighted warnings from House Intelligence Committee Chairman Rick Crawford (R-AR) and a letter from House lawmakers Mark Green (R-TN), John Moolenaar (R-MI), Carlos Giménez (R-FL), and Sheri Biggs (R-SC), who argued that suspected Chinese-linked sites could eventually function as a “forward operating base” for electronic warfare and intelligence collection against the United States.

While such facilities could potentially enhance Cuba’s ability to monitor U.S. military and communications activity in the region, analysts have noted that there is no public “smoking gun” directly linking these sites to Chinese intelligence operations, despite repeated U.S. claims of Beijing’s involvement.

In May, Axios reported that U.S. officials believed Cuba had acquired hundreds of military drones and discussed potential drone warfare scenarios involving U.S. interests in the region, including Guantánamo Bay and possibly Key West.

Those allegations were later repeated in a White House report on Cuba’s security threat, which cited The Jerusalem Post and echoed claims of Iranian drone transfers and military consultations. Notably though, the claims rely on anonymous U.S. intelligence sources and the original Axios reporting, while neither the media reports nor the White House assessment provided publicly available evidence independently verifying the allegations.

This sequence of events brings to mind Operation Northwoods, a 1962 Joint Chiefs of Staff proposal that explored staging attacks and attributing them to Castro’s Cuba as a justification for military action. Unlike the Axios allegations, Operation Northwoods was a documented proposal and, while never carried out, showed the lengths governments would go to manufacture pretexts for military action. 

The Axios report itself included several caveats that complicated its claims. Despite the headline, “Exclusive: U.S. eyes attack-drone threat from Cuba,” the same article stated that “U.S. officials don’t believe Cuba is an imminent threat” and that “no one’s worried about fighter jets from Cuba.” Perhaps the most significant admission was that the intelligence could “become a pretext for U.S. military action.”

The timing is worth mentioning: after the administration described Cuba as a national security emergency, alleged it was assisting U.S. adversaries, and warned of potential drone threats, CIA Director John Ratcliffe traveled to Havana to deliver a message that cooperation was possible only after “fundamental changes,” while invoking the January operation that removed President Nicolás Maduro from power in Venezuela.

The allegations were immediately disputed by both Havana and Moscow. Cuban officials accused Washington of creating a “fraudulent narrative” to justify additional pressure, while Russian officials denied that Cuba had purchased hundreds of military drones from Russia and Iran.

Neither government response proves that the Axios allegations are false, but the dispute highlights an issue: the public evidence behind the most significant claims remains unavailable.

By July, the alleged drone threat had moved beyond intelligence reporting and into political advocacy. United Against Nuclear Iran displayed an Iranian Shahed-136 drone in Coral Gables, Florida, warning that Iranian military technology in Cuba could threaten the United States.

Speakers at the event, including former Florida Governor Jeb Bush and Rep. Carlos Giménez, emphasized the drone’s capabilities, including its reported explosive payload and range, arguing that such systems could theoretically reach targets as far away as New York and that large-scale drone attacks could overwhelm existing defenses.

However, the exhibit demonstrated only that Iranian drone technology exists—not that the displayed drone came from Cuba, that Havana possesses Shahed-136 systems, nor that Cuba has the capability or intent to use such weapons against U.S. targets. Even coverage of the event relied on claims that “reports” indicated Iranian drones were present in Cuba, rather than presenting evidence from Cuba itself.

The narrative continued to expand with a July 20 State Department report titled Cuba: The Capital of 21st Century Communism, which argued that “Havana had solidified its place as the ideological capital of the modern radical left.” 

The document points to figures such as Twitch streamer Hasan Piker and participants in Cuba solidarity movements as evidence of an influence network. While these individuals openly support engagement with Cuba and criticize U.S. policy, the analysis provides no evidence that they are acting as agents of the Cuban government or participating in a coordinated influence operation.

The claims also extend to domestic politics, arguing that “many of the most significant upheavals in recent American political history—from the George Floyd riots to the rise of Antifa to protests on college campuses—can be linked, in some way, shape, or form, to Cuban influence.”

Of note, the document does not provide evidence that Cuba directed, funded, or coordinated these movements. Instead, it appears to treat ideology, criticism of U.S. foreign policy, and participation in Cuba solidarity efforts as evidence of an influence network.

The report also states that China and Russia have “tripled” their intelligence personnel in Cuba since 2023. That claim traces back to a Wall Street Journal report citing unnamed officials familiar with U.S. intelligence assessments, rather than publicly available or declassified intelligence.

Sanctions-ravaged Cuba can barely keep the lights on, and yet it poses some grand existential threat to the US homeland?

Cuba moves to open several crisis-ravaged sectors of its economy to private firms, as the communist government tries to ease acute shortages of basic goods and services resulting from a US energy blockade. pic.twitter.com/RHBcrpTbH2

— Al Arabiya English (@AlArabiya_Eng) July 29, 2026

None of this is to say that Cuba does not pose legitimate security concerns. Havana has a history of espionage, intelligence operations, and alliances with U.S. adversaries. The question though is if this history should influence the claims now being made about Cuba.

The conclusion this document reaches goes beyond just intelligence concerns. Rather than simply describing Cuba as a hostile foreign government, it presents Havana as a network of activist groups, nonprofits, universities, and domestic political movements with an agenda. The claims presented make many allusions without providing evidence that Cuba directed, funded, or controlled these movements.

Claims this broad require clear evidence. The history of disputed intelligence assessments including Iraqi weapons of mass destruction, “yellowcake” uranium, and mobile biological weapons programs, are just a few examples where assertions were made while evidence remained lacking or fabricated.

With Havana recently rejecting the State Department report as “propaganda,” only time will tell whether the allegations presented in this document lead to a change in U.S.-Cuba policy or if it will become just another chapter in the decades-long rivalry between Washington and Havana.

Tyler Durden Thu, 07/30/2026 - 20:05

'Situational Bewareness': Star AI Investor Dumps Assets To Citadel After Massive Levered Bets Blow Up Summary:

• In echoes of Archegos chaos from 2021, Situational Awareness - a once $45BN tech fund - has been forced to liquidate its public share holdings due to margin calls from TRS

• Ken Griffin's Citadel scooped up the portfolio (at a health discount we are sure) as counterparties forced the liquidation.

• The fund is now around $10BN (all private holdings)

• Leopold - the fund manager - is getting married this weekend to Anthropic's Chief of Staff

*  *  *

Update (1500ET): Wondering who was involved? Below we highlight the holdings of Sandisk and circled bank/dealer positions (Morgan Stanley, Goldman, Jane Street, JPM, BNP, UBS, Deutsche, BofA etc.) who are all typical total return swap counterparties. 

As a reminder, they hold the physical shares; clients get the economic exposure and leverage synthetically.

*  *  *

Update (1130ET): The Wall Street Journal reports that Situational Awareness, the highflying artificial-intelligence-focused hedge-fund firm, sold the bulk of its stock portfolio to Ken Griffin's investment firm Citadel after suffering deep losses, according to people familiar with the matter.

There were other bidders for the firm's public equities book, which included large positions in AI hardware stocks such as Nebius and Sandisk.

Citadel rival Millennium and Situational Awareness investor Jane Street both put in their own offers, people familiar with the situation said.

But, 'Big Ken' saved the market again (and his own book).

According to the same 'people familiar', Situational Awareness did not sell its private portfolio of AI companies, which includes a significant stake in Anthropic.

Aschenbrenner's fiancée also works for the leading AI company.

The Dario curse:

SBF invested in Anthropic. Stake now worth billions, but fund blows up (SBF in prison)

Leopold invested in Anthropic. Stake now worth billions, but fund blows up (Leopold getting married)

— zerohedge (@zerohedge) July 30, 2026

From assets under management above $45 billion less than a month ago, Situational Awareness's AUM is reportedly now back below $10 billion...

Not so wunderkind after all?

Perhaps Leopold should have listened to Ken Griffin's warnings from a couple of years ago?

As @GoshawkTrades wrote on X:

A 24-year-old ex-openai researcher ran a fund to $45 billion with eight people, was up 439% net through june, and by the end of july had sold his entire public stock portfolio to ken griffin in a single block trade.

griffin described this exact failure mode two years ago, asked why portfolio managers wash out at citadel:

"you have a portfolio that is extraordinarily highly concentrated, you have large positions, you cannot demonstrate a clear and concise competitive advantage in why you own those positions."

"and there are some people that just, with full information, are unable to help themselves and get to a better portfolio construction."

he was also asked the opposite question in the same interview, why citadel keeps working, his third and final answer was this:

"it's experience. it's the price paid in losses and pain that converts into wisdom. my leadership team, we've been through a lot of very difficult moments of the markets together. we've learned some very bitter lessons. but it makes us much more effective as investors in periods of turmoil and crisis."

citadel started in november 1990. situational awareness started in 2024, long AI infrastructure and short software at roughly 4x leverage. both legs went against it in the same three weeks.

there was no bitter lesson priced into that book yet.

that's what got bought.

he wasn't wrong about AI. he was wrong about the construction of his book.

Here's Ken...

a 24-year-old ex-openai researcher ran a fund to $45 billion with eight people, was up 439% net through june, and by the end of july had sold his entire public stock portfolio to ken griffin in a single block trade.

griffin described this exact failure mode two years ago, asked… https://t.co/kVNwitYcmx pic.twitter.com/Ob7EeXIvUv

— Goshawk Trades (@GoshawkTrades) July 30, 2026

*  *  *

Update (1000ET): Situational Awareness has exited all of their public investments, CNBC’s David Faber reports on air, citing people familiar with the situation.

Faber reports that the liquidation was done “through one enormous trade."

Roughly two-thirds of the assets under management at Situational Awareness were public equities, both that he owned on the long side and that he was shorting, Faber says.

That could help explain the panic bid in Nasdaq this morning, as investors may believe the overhang from this unwind is over...

...do you really think that Leopold was the only 'smartest man in the room' that was using TRS to massively lever into momentum?

*  *  *

In 2020/2021, one fund almost single-handedly used massive amounts of leverage to drive several big media and tech stocks dramatically higher.

That fund - Archegos - run by the now infamous Bill Hwang - used Total Return Swaps (TRS) to build massive levered positions on the back of de minimus capital (and even more notably, without everyone seeing how much he really owns because these were 'off-balance-sheet' swaps).

For a while, everything was awesome.

The prime brokers were earning their interest and Archegos was making bank, Hwang was a genius, as the shares rose on the back of their own virtuous buying circle.

But then, one day in March 2021, one of his big stocks (ViacomCBS) suddenly drops a lot because the company sold more shares.

The banks came knocking for some more collateral to cover the losses (which were huge due to the leverage), but Archegos didn't have the cash (and they had been using TRS from a number of brokers - none of which knew about - creating a systemic crisis). 

The prime brokers were forced to liquidate the holdings (first one to sell wins), and the result was the escalator up in shares became an elevator down (see chart above) in a number of the names that Archegos was holding.

Since then we have had a few scares, but in general, banks have improved their risk management process (a number of risk managers were fired over Archegos).

But, the money that primes can make from the interest and the incessant momentum of the AI bubble perhaps became too much to miss out on... especially when you know other competitors are doing 'the thing'.

All of which brings us to the last month...

About six weeks ago, we raised a big red flag that something was going on as soaring funding costs suggested the banks were offering significant leverage...

Unprecedented surge in S&P funding costs by dealers lending out futures and Total Return Swaps (remember Archegos) to institutional clients. Think of it as lending costs for long positions. pic.twitter.com/x9KQu4r9MK

— zerohedge (@zerohedge) June 15, 2026

The last few weeks have seen dramatic unwinds of a number of the highest-flying AI-related names (and the total collapse of momentum)...

Put those two things together and we smelled a TRS-Tantrum.

Overnight, we may have found the first culprit caught in this over-levered trap.

Situational Awareness, a hedge fund launched by former OpenAI employee Leopold Aschenbrenner that manages around $20 billion, is seeking new money after facing losses linked to declining AI stocks, the Financial Times reported.

Situational Awareness (SA) said in an investor letter dated July 24 outlining its half-year performance that it had "not been immune" to the market moves, including in Asia, but added that the dynamic had created opportunities for investment, the FT reported. The hedge fund was up 439% on a net basis this year through the end of June, the paper said. 

The fund engaged existing investors and lenders in discussions on raising capital, according to the FT, which cited unidentified people briefed on the matter.

“PS. At times we call out opportunities that seem like a particularly good time to add funds, if you have been waiting for one,” he said in the investor letter, seen by the FT, which was sent in recent days and offered the ability to invest new cash on August 1.

Some investors have been offered the option to purchase assets in its portfolio, the newspaper added.

The talks were described as ad-hoc by one of the people.

As Bloomberg reports, some of the fund’s largest holdings have slumped in recent weeks.

Shares of AI-focused cloud platform Nebius Group NV, in which the fund disclosed a multi-billion-dollar position in May, have dropped 48% from a peak last month, wiping around $35 billion from the company’s market value.

In March, Situational reported a large position in Sandisk Corp., which has fallen 56% in just over a month, and another in SharonAI Holdings Inc., which is down by a similar margin since mid-June.

Do those charts look familiar?

Look again at the PARA chart at the top - pumped and dumped by Archegos.

CNBC's David Faber reported this morning that several of the firm’s prime brokers - including Bank of America, Goldman Sachs and JPMorgan Chase - have been working with the fund as it seeks to meet margin requirements or reduce positions in an orderly fashion, according to people familiar with the discussions.

The brokers have been marketing a group of the firm’s holdings on both the long and short side for sale prior to today’s start of trading, according to people familiar with the situation.

These reports have been denied by the fund.

Martin Shkreli (consider the source), confirms that SA is down 50% MTD and that Goldman is liquidating...

Rumors:
SALP down more than 50% MTD
SALP was up 200% YTD and is now down more than 30%
GSCO has liquidated some SALP positions

Source: Godel News
*want to be clear we wish SALP well and hope all of our clients and non-clients do great. just reporting what we're hearing. https://t.co/zcmVNNCK94

— Martin Shkreli (@MartinShkreli) July 29, 2026

In around 15 days, the next set of 13Fs will drop and we will discover which dealers have the most TRS exposure on their books.

As a reminder, Bill Hwang was sentenced to 18 years in prison...

Tyler Durden Thu, 07/30/2026 - 20:00

Musk's America PAC Reportedly Plans $120 Million Midterm Blitz, Setting Stage For Renewed Left-Wing War On Elon

The New York Times reports that Elon Musk's America PAC plans to spend as much as $120 million to help Republicans in November's midterm elections, signaling that the world's richest man is preparing to reenter the political game with fewer than 100 days until voters head to the polls.

America PAC's spending surge will likely spark a coordinated opposition campaign from Democratic groups and left-wing NGOs, ranging from protests and activist pressure to sustained negative press coverage of Musk, as well as attempts to damage his brands, including Tesla, SpaceX, and xAI.

The Democrats' playbook could resemble their coordinated pressure campaign against Musk when he was involved with DOGE and the dismantling of most of USAID. This sparked street demonstrations by left-wing and far-left activist networks supported by left-wing NGOs, along with an aggressive left-leaning media campaign that sought to make him the public face of the administration's agenda.

The NYT report is based on "two people briefed on the plans," and like many stories run by left-leaning corporate media. Musk usually denies the reports on X, but if this report is correct, it says Musk authorized America PAC to build a field operation across at least eight states, targeting Senate races in Alaska, Iowa, Maine, Michigan, and Ohio, while considering contests in North Carolina, Georgia, and Texas.

America PAC is also gearing up to support House candidates in California, Wisconsin, and Washington, according to those people.

Musk's nearly $300 million bet on the 2024 campaign proved politically successful. Still, it came at a steep cost to his brands, which became targets of information warfare operations with coordinated pressure from left-wing journalists and NGO-backed activist groups.

Remember when MSM outlets ramped up stories portraying Musk as a Nazi while he was at DOGE, dismantling the left's USAID slush fund?

This is how the information operations game is played, and the ones being played were the American people.

Remember, the far-left even launched a firebomb campaign against Tesla service centers, as the left fringe rules through intimidation, violence, and terrorism.

JUST IN: Tesla firebomb attacker indicted by federal grand jury, facing 20 years in prison. pic.twitter.com/uj94L8ym6t

— Remarks (@remarks) April 1, 2025

Judging by Musk's X posts and the broader Republican Party's increasingly new messaging, the GOP appears to be converging on a single marketing platform ahead of the midterms: Democrats serve as the political vehicle for a socialist and Marxist takeover. It's that simple.

That narrative is not being manufactured from nothing. The Democratic Socialists of America's own rhetoric about dismantling the American "empire" from within gives Republican strategists a political gift in the market while establishment Democrats fret over their party fracturing in a far-left revolutionary takeover.

The emerging theme for America PAC and Republican candidates will likely focus on anti-communism, framing the election as a choice between capitalism vs. socialism, national sovereignty vs. border abolition, and law and order vs. violent crime and revolution.

DSA has effectively handed Republicans the advertising material to connect illegal alien invasion, violent crime, attacks on law enforcement, street unrest, and all other failed globalist policies under a single ideological threat narrative. That is precisely the political branding that establishment Democrats fear and are melting down over (read here & here).

Tyler Durden Thu, 07/30/2026 - 19:40

Biden's Pardon Can't Protect Fauci From Legal Consequences

Dr. Anthony Fauci may have believed his Fifth Amendment marathon at the Senate Homeland Security & Governmental Affairs Committee hearing on Wednesday would shield him from prosecution, but he miscalculated.

Before he refused to answer questions from the committee, Fauci did deliver an opening statement, during which he attacked Committee Chairman Sen. Rand Paul (R-Ky.) and explained his decision not to answer any questions.

"Given Senator Paul's obvious obsession with calling for my prosecution, his repeated slanderous comments about me, and, recently, his publicly releasing my unredacted personal diary aimed at embarrassing and intimidating me, the only conclusion I can reach is that the sole reason he is calling me before this committee is to get me to say something - anything - that could vindicate his repeated public pledges that I end up, in his words, 'behind bars,'" Fauci said. "Therefore, although it pains me to do so because of the respect I have for the legislative branch of government and my decades-long record of cooperating with Congress, under the advice of my attorneys, I will invoke my right under the Fifth Amendment of the Constitution to refrain from answering your questions."

And so he did, an estimated 111 times, but it won't protect him completely.

On Jan. 20, 2025, his last day in office, Biden granted Fauci a full and unconditional pardon covering any offenses he may have "committed or taken part in" tied to his government roles between Jan. 1, 2014, and Jan. 19, 2025. The broad preemptive pardon Joe Biden handed him on the way out the door covers federal charges alone, and it leaves him exposed to the state charges that may arrive sooner than his lawyers expected.

Florida wasted no time proving the point. State Attorney General James Uthmeier announced an investigation into the former director of the National Institute of Allergy and Infectious Diseases (NIAID) after Fauci declined to answer lawmakers' questions on Wednesday.

Fauci's lack of candor to Congress is unbelievable. My office is launching an investigation into Dr. Fauci. It's past time we get the truth of what happened during COVID.

— Attorney General James Uthmeier (@AGJamesUthmeier) July 29, 2026

This makes Uthmeier the first state attorney general to formally investigate Fauci since the pandemic, and likely not the last.

But Fauci may still face federal consequences as well. During the hearing, Sen Josh Hawley (R-Mo.) informed Fauci that the Supreme Court says that he has no Fifth Amendment privileges.

"As you very well know, as the Supreme Court has been clear for a century and more, Brown v. Walker, 1896. When he has been pardoned, he may not stand upon his privilege," Hawley explained.

To that point, Chairman Paul also revealed that Fauci's refusal to testify could result in the committee voting to hold him in contempt.

"The committee will have to consider after this hearing what appropriate action should be taken against you for the failure to testify after being directed to do so," Paul said. "It's against the law to obstruct an investigation of Congress. There will be repercussions to your refusal to testify today."

Whether Senate Republicans convert the contempt vote into an actual referral remains uncertain, and anyone who has watched congressional Republicans handle accountability fights over the past decade has earned the right to skepticism.

But, clearly, Fauci's legal troubles are not over.

Tyler Durden Thu, 07/30/2026 - 18:50

Cocaine Valued At Roughly $20 Million Seized From Truck At US Border

Authored by Naveen Athrappully via The Epoch Times,

Federal authorities have seized more than 1,000 pounds of cocaine from a commercial truck at a southern border entry point, estimated to be worth at least $20 million, according to the Department of Justice (DOJ).

Federal law enforcement officers seized more than half a ton of cocaine worth more than $20 million hidden in a truck at the Calexico Port of Entry in California. Courtesy of the DOJ

The drugs were hidden in the floorboards of the truck and the attached flatbed trailer, the DOJ said in a July 29 statement. The cocaine was seized at the Calexico Port of Entry, the border crossing linking California with Mexico.

This is the "second-largest cocaine seizure" made this year in the Southern District of California, the department said. The biggest single seizure for the year was recorded in May when more than 2,000 pounds of cocaine worth an estimated $45 million was confiscated.

When the truck arrived at the port of entry, officers from Customs and Border Protection (CBP) and other agencies X-rayed the trailer and identified anomalies with the floorboards. After the rebar aboard the trailer was unloaded, officers lifted the wooden floor to discover the hidden drugs.

In total, 366 packages of cocaine weighing 1,002.13 pounds were seized.

The driver of the truck, Jose Manuel Lopez Lopez, 44, Mexico, was arrested by authorities and charged with illegally importing cocaine into the United States.

Lopez has pleaded not guilty. If convicted, he faces a maximum penalty of life imprisonment, with a minimum of 10 years in jail.

The amount of confiscated cocaine is a "tremendous amount of drugs, even by the standards of this district," the government said in a motion to detain the defendant, according to the DOJ.

The Epoch Times was unable to reach Lopez's legal representative for comment.

The case was investigated by the California Homeland Security Task Force (HSTF) as part of Operation Take Back America.

The task force was set up following a January 2025 executive order signed by President Donald Trump, tasking it with ending the presence of criminal cartels and foreign gangs in the United States.

Operation Take Back America was established in March 2025 through a memorandum issued by then-Deputy Attorney General Todd Blanche. One of the operations' objectives is to establish HSTFs.

The CBP has seen a surge in drug seizures, including cocaine, according to a July 16 statement from the agency.

In June, the total amount of cocaine, methamphetamine, heroin, fentanyl, and marijuana seized nationwide was 49 percent higher than in June 2024 under the previous administration. Cocaine seizures alone rose by 71 percent in June from the previous month.

"CBP is preventing dangerous criminal aliens and illicit narcotics from entering our communities, enhancing the safety of every American for generations to come," CBP Commissioner Rodney S. Scott said in the statement.

The robust seizure numbers come amid concerns about the drug's use in the country. The Centers for Disease Control and Prevention warned in a report in August 2025 that overdose deaths involving stimulants, mainly cocaine and psychostimulants with abuse potential, "increased substantially" since 2011.

In 2011, a total of 4,681 cocaine-related overdose deaths were reported, which surged to 29,449 deaths by 2023, according to the report.

Among 309,274 overdose deaths between January 2021 and June 2024 in 49 states and Washington, D.C., 30 percent were found to involve cocaine.

Tyler Durden Thu, 07/30/2026 - 18:25

See The Hilarious AI Ads That Furious California Democrats Want Banned

Two California Democrats are moving to outlaw AI-generated campaign ads at the federal level, just days after a Republican rival for the governor's mansion used the technology to hammer their party.

Sen. Adam Schiff (D-CA) and Rep. Ro Khanna (D-CA) on Monday reintroduced the AI Ads Act, which would make it a federal violation to use artificial intelligence to impersonate candidates or committees in federal races.

This is the satire Ro Khanna and Adam Schiff want to make illegal so democrats aren't the butt of jokes.

— Charles Curran (@charliebcurran) July 30, 2026

The push comes on the heels of two AI-generated spots from GOP gubernatorial candidate Steve Hilton, who went after Gov. Gavin Newsom, former Vice President Kamala Harris and Democrat gubernatorial nominee Xavier Becerra.

Enough Is Enough. Let's Fix California.

— Charles Curran (@charliebcurran) July 23, 2026

Of course, Hilton isn't the only one having fun with the technology. The campaign of Spencer Pratt, the reality television star turned Los Angeles mayoral candidate, made waves with his creative and side-splitting ads from Los Angeles-based director Charles Curran.

Be the Hero LA needs. Vote Spencer Pratt. pic.twitter.com/VTskAwynpB

— Charles Curran (@charliebcurran) May 20, 2026

LA is worth saving. Vote Spencer Pratt. pic.twitter.com/sQQQUjN9YY

— Charles Curran (@charliebcurran) June 1, 2026

Unsurprisingly, Schiff claims his bill isn't about politics, but about protecting against a so-called "serious threat to our democracy."

"AI-generated fraudulent advertising which uses the likeness or voices of candidates to misrepresent their positions, campaigns, or causes, or otherwise misrepresents a candidate's point of view is not only wrong - it poses a serious threat to our democracy that should concern all Americans regardless of their party," said Schiff. "Fraudulent AI advertising has already proliferated in races across the country, and if Congress does not act, this runaway challenge will only get worse as AI becomes increasingly capable of blurring the lines between fact and fiction. With November elections around the corner, time is of the essence to reign in false political advertising."

Groups that support the bill include Common Cause, Citizens for Responsibility and Ethics in Washington, the Campaign Legal Center, Protect Democracy and Public Citizen, according to the New York Post.

"AI will transform our lives and our society in many ways, but it can't be used to mislead voters or undermine our democracy. I'm proud to lead the AI Ads Act with Senator Schiff to ban AI-generated content that deceives the public about candidates or elections," Khanna said in a statement.

Tyler Durden Thu, 07/30/2026 - 18:00

Federal Judge Rules Race-Based Portion Of Houston Program Unconstitutional

Authored by Kimberly Hayek via The Epoch Times,

A federal judge on Tuesday permanently barred the city of Houston from enforcing the race-based parts of a program that includes numerical goals for awarding public contracts to minority-owned businesses, ruling that doing so is in violation of the equal protection clause of the 14th Amendment.

A judge's gavel, in this file photo. Andrew Kelly/Reuters

U.S. District Judge David Hittner described his decision as the first to extend the U.S. Supreme Court's 2023 ruling against race-conscious college admissions to municipal public contracting programs. He found Houston could not justify treating businesses differently due to the race of their owners.

"The public interest favors a permanent injunction because there is no public interest in permitting the government to continue enforcing an unconstitutional race-based policy," Hittner wrote in his findings of fact and conclusions of law.

Landscape Consultants of Texas Inc. and Metropolitan Landscape Management Inc., two Spring-based landscaping firms owned by Jerry and Theresa Thompson, a white married couple, filed the original lawsuit in September 2023. They were represented by Pacific Legal Foundation. In their filing, they argued Houston's Minority, Women, and Small Business Enterprise Program, as well as a similar policy at the Midtown Management District, precluded them from opportunities due to their race.

"Equal protection means equal protection for everyone, not preferential treatment for some," Erin Wilcox, a lawyer for the plaintiffs at the Pacific Legal Foundation, said in a statement. "The Fourteenth Amendment guarantees every business owner the same shot at a government contract, regardless of race."

Houston City Attorney Arturo Michel said the city may appeal.

"The city will abide by the court's decision regarding existing contracts and recently awarded contracts pending any further court order," Michel said.

The program requires the city to establish annual goals for contracts going to minority-owned businesses. It also allows departments to impose contract-specific goals.

Non-minority firms were often required to subcontract a percentage of work to certified minority-owned businesses even if they had no operational need to subcontract. Minority-owned firms could fulfill the requirement with their own workers.

Hittner held a four-day bench trial in December 2025, ultimately concluding that under the Supreme Court's framework in Students for Fair Admissions Inc. v. Harvard, government may use race only to remedy specific, identified past discrimination.

"Houston is required to identify concrete, particularized discrimination and demonstrate that its use of race is necessary to remedy that discrimination," Hittner said. "Houston has not done so."

Hittner noted the city's own expert witness testified that a 2024 disparity study commissioned by the city identified no specific instances of intentional discrimination by Houston officials or employees in recent years. The city had not disciplined anyone for contracting discrimination in the previous five years and found no particular constitutional or statutory violations.

Hittner limited the injunction to the race-conscious guidelines. Preferences based on gender or small-business status were not struck down. The order also applies to the Midtown Management District's parallel policy.

Reuters contributed to this report.

Tyler Durden Thu, 07/30/2026 - 17:40

Apple Tumbles On China, Service Revenue Miss

The Thursday rebound in the Nasdaq 100 - largely on the coattails of Microsoft and the expectations that further liquidations by that 25 year old Leopold guy are over - has been powerful, though much of the urgency has come from the same high-beta corners punished hardest during the semiconductor rout. That helps stabilize the tape, but it doesn’t resolve concerns around capex spend or Chinese chip capabilities. Amazon speaks directly to the hyperscaler debate through AWS and spending plans. And while Apple is not at the center of concerns about hyperscaler spreads, at nearly $5 trillion in market cap, its results carry enough weight to shape sentiment across a market short on conviction.

Consensus looks for Apple revenue growth of roughly 16% to nearly $109 billion, with the iPhone cycle and services doing the heavy lifting. The broader read-through is whether consumer demand remains firm, whether margins can absorb tariff and chip-cost pressure, and whether one of the world’s largest companies can still generate enough growth to support the premium embedded across mega-cap tech. A set of strong reports would give the rebound something more credible than short covering, even if it leaves the sector’s structural concerns intact.

There’s also some ceremony to the moment. Tim Cook’s final earnings call closes an extraordinary chapter before John Ternus takes the baton, but as Bloomberg's Brendan Fagan notes, nostalgia will not carry the stock or the broader sentiment. 

With that in mind, here is what Apple reported for the recently concluded June 30 (fiscal Q3) quarter:

• EPS $2.02 vs. $1.57 y/y, beating estimates of $1.89
• Revenue $109.42 billion, +16% y/y, beating estimates of $108.85 billion
  • Products revenue $78.68 billion, +18% y/y, beating estimate $77.25 billion
  • IPhone revenue $54.25 billion, +22% y/y, beating estimate $53.6 billion
  • Mac revenue $10.35 billion, +29% y/y, beating estimate $8.62 billion
  • IPad revenue $6.19 billion, -5.9% y/y, missing estimate $6.89 billion
  • Wearables, home and accessories $7.88 billion, +6.5% y/y, beating estimate $7.87 billion
• Services revenue $30.74 billion, +12% y/y, missing estimate $31.36 billion

Broken down by product:

... we see that Apple is in desperate need of a new revenue stream: even Services is now rolling over while the rest is a melting ice cube mess, and once AAPL's price hikes kick in, sales will crater. 

Mac sales beat expectations as pent up demand for the M5 MacBook Air, M5 Pro/Max MacBook Pro and of course the hot-selling MacBook Neo, should resulted in a big beat. The question is what is the margin on these products now that their components as much, much more expensive. 

Yet one place where revenue unexpectedly missed was Apple's heretofore Golden calf, namely Services, which unexpectedly came light by almost $1 billion to estimates, rising just 12% to $30.74 billion, and missing estimate $31.36 billion. Since this is the highest margin product line, any slowdown here will set off alarm bells for the bulls. 

Taking a closer look at the Geographic breakdown, China stood out because after several quarters of solid growth (after several years of disappointment) revenues missed again (along with Japan this time):

• Greater China rev. $18.82 billion, +22% y/y, missing estimate $19.58 billion
• Americas rev. $45.78 billion, +11% y/y, beating estimate $45.42 billion
• Europe revenue $29.40 billion, +22% y/y, beating estimate $27.58 billion
• Japan revenue $6.55 billion, +13% y/y, missing estimate $7.49 billion
• Rest of Asia Pacific revenue $8.87 billion, +16% y/y, beating estimate $8.71 billion

Here results were a mirror image of last quarter, when the US missed but was more than offset by Chinese sales; this time it's China (and Japan) that missed, in what appears to be another major slowdown in Chinese sales growth. 

Putting it all together, it appears that the stock which in recent weeks was priced to perfection - and as a FCF positive substitute to the rest of the AI complex - is getting hit on the Service revenue and China miss. As Bloomberg puts it, "though total revenue topped estimates, the China sales amounted to $18.8 billion in the fiscal third quarter, well short of the $19.6 billion estimated by analysts. Revenue from services was $30.7 billion, compared with a $31.4 billion projection."

Apple’s progress in China has been closely watched by investors and analysts as it recovers from a downturn in that country. The company is still growing in the market, but hasn’t bounced back as quickly as some were looking for, and as shown above, the growth rate is rapidly slowing... again.  

Apple also has been struggling with shortages of memory chips and computer processors, a situation that forced the company to raise prices on Macs and iPads last month. The supply crunch has led to extended wait times on key computers like the Mac mini and Mac Studio. Once the new iPhone hits the street with a price some 20% higher, watch for total sales to tumble. 

Elsewhere, this quarter serves as a swan song of sorts for CEO Tim Cook, who will hand the reins to hardware head John Ternus on Sept. 1. Cook, Apple’s leader since 2011, diversified the product lineup and increased annual sales to nearly half a trillion dollars. 

AAPL stock had been up 23% this year heading into the results, outpacing many tech peers. Apple reclaimed its title as the world’s most valuable company in recent days - overtaking Nvidia -  in part because it’s seen as a safe haven from runaway AI spending. The company has a current market value of almost $5 trillion, although it is now again below that after the slide after hours.

The company also is making some changes to how it offers products. On Tuesday, it rolled out a device leasing program called Apple Upgrade, allowing users to essentially subscribe to iPhones, iPads and Macs and trade them in at the end of their lease terms. The program, which resembles car leasing, will likely mitigate the recent price increases for many buyers.

Apple stock slumped more than 4% in after hours action, offsetting some of the surge in Amazon stock.

Tyler Durden Thu, 07/30/2026 - 17:25

'We Won Completely': Weinstein Says COVID 'Conspiracy Theorists' Were Totally Vindicated

Not so long ago, everything below was a bannable offense - usually based on the vapid logic of some 24-year-old "trust & safety" associate. In a clip circulating Thursday, evolutionary biologist Bret Weinstein takes stock of what the dissidents actually won for their trouble, Vigilant Fox reports.

WEINSTEIN: "We live in two worlds simultaneously at the moment. I remember conversations that I had with people I cared deeply about at the beginning of COVID right as the lab leak story was beginning to crack."

Bret Weinstein explains how the COVID conspiracy theorists were proven right about everything and it doesn't matter.

WEINSTEIN: "We live in two worlds simultaneously at the moment. I remember conversations that I had with people I cared deeply about at the beginning of COVID... pic.twitter.com/DFyBy6i2DH

— The Vigilant Fox (@VigilantFox) July 30, 2026

"What I saw was, actually, I think we're going to win the lab leak story. We're not yet winning the vaccine story, and we're way behind on the repurposed drug story.

"In 2026, here's what we see. We actually won. Completely. All of these things are now visible to anybody who wishes to see them.

Yet, while hearts and minds were won and 'conspiracy theorists' vindicated, we have a limp dicked government that won't hold anyone's feet to the fire. 

"And we've lost completely. Our capacity to do anything about this is now on full display. We have none."

"Your ability to simply get the story clear enough and enough evidence on the table does not have an impact on what happens next.

"We're still apparently dispensing these frickin shots. How crazy is that? Right after all that we have unearthed, after all the people who lost their careers to unearth this stuff, they're still dispensing the frickin shots."

WEINSTEIN: "We need to figure out now how to talk to the people who actually have goodness in their hearts, but are still so desperately confused.

"You have to figure out how to approach them with enough generosity of spirit that you can get them over the line to just seeing. You can get them to take off the blindfold."

h/t Modernity.news

Tyler Durden Thu, 07/30/2026 - 17:20

House Democrats Expand Midterm 'Red To Blue' Target Map To 30 Seats

Authored by Chase Smith via The Epoch Times (emphasis ours),

The Democratic Congressional Campaign Committee (DCCC) added five more seats to its Red to Blue program on July 28, and the National Republican Congressional Committee (NRCC) responded the same day with a separate statement criticizing each of the five Democratic candidates.

The U.S. Capitol on June 16, 2026. Madalina Kilroy/The Epoch Times

The expansion brings the program to 30 seats. Red to Blue candidates receive strategic guidance, staff resources, training, and fundraising support from the committee, according to the DCCC’s announcement. The committee said candidates qualify by surpassing goals for grassroots engagement, local support, campaign organization, and fundraising.

“In less than 100 days, Democrats will take back the House majority and it will be powered by our incredible candidates such as the five named to Red to Blue today,” DCCC Chair Rep. Suzan DelBene (D-Wash.) said in the release.

“Whether in suburban, rural, or redistricted seats, the American people have soured on Republicans’ broken promises and failure to lower costs. Voters are outraged by higher prices on everything and a war of choice spiraling out of control. They are eager for change and new leaders who will fight for them, not be a rubberstamp for Donald Trump.”

The five are Amish Shah in Arizona’s First District, Pia Dandiya in Florida’s 22nd, Lindsay James in Iowa’s Second District, Jake Johnson in Minnesota’s First, and Sam Forstag in Montana’s First.

The DCCC described Shah as an emergency room physician and former state representative who has already represented part of the district in the Arizona House.

Dandiya is a former teacher and high school principal from Palm Beach County. Both parties hold their Florida primaries on Aug. 18. Dandiya faces a contested Democratic field, with a challenge from Kaysia Earley. The DCCC’s endorsement puts the committee behind her before the election.

Florida’s 22nd District is currently held by Rep. Lois Frankel (D-Fla.), who is running in the new 23rd District this fall following redistricting.

James is a Presbyterian minister, former chaplain, and Iowa state representative running for an open seat against Republican Joe Mitchell, whom the DCCC release called a career politician and lobbyist.

Johnson is a public school math teacher and union leader challenging Rep. Brad Finstad (R-Minn.).

Forstag is a U.S. Forest Service smokejumper and vice president of National Federation of Federal Employees Local 60, running for the seat Rep. Ryan Zinke (R-Mont.) is leaving.

The DCCC release said Forstag organized against staffing cuts at public land agencies and described Republican nominee Aaron Flint as Zinke’s hand-picked successor.

The NRCC issued five statements within hours, one for each candidate. The statements largely characterized the candidates as too liberal for their districts.

NRCC spokesperson Ben Petersen noted for the Arizona race that the DCCC backed Shah’s opponent in the primary and that Republicans there are consolidating behind nominee Jay Feely. The DCCC did back Shah’s opponent in the Arizona primary but later endorsed Shah after he won.

NRCC spokeswoman Emily Tuttle referenced a Fox News report that James missed more than half of her votes in the Iowa House over the past year. Her campaign responded to that report at the time in a statement saying, “Lindsay has always fought for Iowa families, taking on corporate greed and predatory landlords and writing the bill to cap the cost of insulin.”

Tyler Durden Thu, 07/30/2026 - 17:00

Bank Of Japan Confirms Yen Intervention, Fed Conducted 'Rate Check'

Update (1645ET): Nikkei reports that market participants learned that the Japanese government and the Bank of Japan intervened in the foreign exchange market by buying yen and selling dollars.

Additionally, Nikkei confirmed that the US monetary authorities conducted a "rate check," a preliminary step before intervention.

This indicates that Japan and the US worked together to curb the yen's depreciation.

*  *  *

Having collapsed to its weakest relative to the dollar in 40 years, it appears the Ministry of Finance and Bank of Japan has had enough and intervened.

Having tagged 164/USD, the Japanese currency suddenly exploded stronger (below 160/USD, which was the prior level of intervention)...

The scale of the move is commensurate with the last large intervention in April.

Obviously, there is no confirmation, yet, but the timing, coming after the Fed and after Japan markets have closed, would certainly fit what we know about the MoF’s tactics, and that’s why there’s renewed speculation over official action. 

Tyler Durden Thu, 07/30/2026 - 16:45

Amazon Jumps On Solid AWS Growth And Profit, Even As Outlook Disappoints And Free Cash Flow Turns Negative

As Bloomberg notes, "Microsoft’s solid earnings breathed new life into the tech sector Thursday, but Amazon’s report after the bell this evening could deflate the optimism again." To be sure, there’s a lot riding on Amazon results. The longevity of the AI spending boom is in doubt as shareholders punish ambitious capex plans, which has taken away some of the support away from the chipmaker stocks. 

Before Microsoft’s earnings, the Philadelphia Semiconductor Index had fallen 27% this month. It bounced more than 7% Thursday. Chipmaker Sandisk rose 23%, Micron and Microsoft itself both climbed more than 16%. The Seattle-based software giant announced better-than-expected results, emphasized its clear roadmap to AI monetization and refrained from increasing its capex plans. Amazon is going to have to produce something pretty special to keep the party going.  

In terms of expectations, analysts expect Amazon profits to rise 8.8% from a year earlier, based on revenue growth of 17.5%. Free cash flow is expected to come in negative for a second straight quarter. Revenue in the key Amazon Web Services business is expected to grow 31% from a year earlier to $40.6 billion.

While free cash flow for the AI hyperscalers as a group is expected to turn negative, for Amazon, it’s seen fluctuating, dipping below zero before recovering. Amazon was an early starter in the world of cloud computing. That has sometimes looked like a disadvantage. It’s among the cheapest of the big tech stocks, trading at a price to blended forward earnings ratio that’s 1.6 standard deviations below the 10-year average. Nevertheless, as Bloomberg's Sebastian Boyd writes, the tone from analysts has been largely positive. Estimates have been revised slightly higher, and climbed to $1.83 from $1.8 at the end of April. 

With all that in mind, this is what Amazon just reported for the recently concluded Q2:

• EPS of $5.75, beating exp of $1.81 (including a one-time profit on its holdings in Anthropic)

Revenue was stronger across the board (except for another modest miss in the small physical store sales category, and a new miss in subscription services).

• Net sales $200.61 billion, beating estimates of $197.01 billion
• Online stores net sales $70.43 billion, beating estimates of $69.92 billion
• Physical Stores net sales $5.79 billion, missing estimate $5.87 billion
• Third-Party Seller Services net sales $46.78 billion, beating estimates of $46.15 billion
• Subscription Services net sales $13.73 billion, missing estimates of $13.75 billion
• Advertising services net sales $19.81 billion, beating estimates of $19.32 billion

However, the most important revenue item, AWS, smashed smashed the sellside estimate...

• AWS net sales $42.23 billion, beating estimates of $40.57 billion, and rising a whopping 37%, the fastest pace of growth since the fourth quarter of 2021. 

Geographically the results were focused on North America beating again by more than $2 billion, even as international was a modest miss:

• North America net sales $116.18 billion, estimate $113.94 billion
• International net sales $42.20 billion, estimate $42.71 billion

Going down the line: 

• Operating income $27.46 billion, beating estimate $23.61 billion
• Operating margin 13.7%, beating estimate 12%
• North America operating margin +7.9%, beating estimate +7.48%
• International operating margin 4.1%, beating estimate 3.76%
• Fulfillment expense $29.63 billion, below the estimate $29.79 billion
• Seller unit mix 61%, beating estimates of 60.2%

While AWS sales growth was solid, just as impressive was the the margin for the segment also increased from 37.68% to 39.36%, just shy of the highest on record, and again beating the median Wall Street estimate of 33.52%. Elsewhere, North American profit unexpectedly jumped to $9.123 billion, resulting in a profit margin of 7.83%, down from 7.94% a quarter ago, while international margins rose to 4.07% from 3.58%, the highest since Q2 2025.

As a result of the rise in AWS profits, and generally solid sales margins, Amazon's consolidated operating margin posted a notable jump and in Q1 increased 9.7% to 11.7%, just shy of an all time high. 

Looking ahead, the company's guidance was unexpectedly weak: 

• Net sales for Q3 are expected to be between $197 billion and $202 billion; the midpoint of $197.5 billion was a big miss compared to the median estimate of $203.93 billion.
• Operating income for Q3 is expected between $22.0 billion to $26.40 billion, the midpoint also falling below the estimate of $25.07

The projected 10.7% revenue growth was the lowest since March 2025.

And while we wait to get some sense of what happened to AMZNs capex guidance, and whether it was revised higher again, here is a less than flattering view of the company's free cash flow: the company's LTM free cash flow plunged to $7.6 billion negative for the trailing twelve months, vs $18.2 billion for the trailing twelve months ended June 30, 2025.

And so, to fund its impressive AWS growth, where competition is becoming more fierce by the day, AMZN will need to issue stock or issue much more new debt to fund further capex growth. Indicatively, AMZN's debt soared to $129 billion in Q2, doubling from $65.6 billion at the end of 2025.

Amazon reported spending more than $53 billion on capex, including proceeds from some sales, in the period ended June 30. The company has said it expects to spend $200 billion — a 56% increase from 2025 — mostly on data centers, including those customized for AI services, prompting investors to focus on any signs of overspending.

After all that, AMZN shares were sharply higher this time - unlike last quarter - up about 8% higher largely on the AWS revenue growth and margin, as the market ignores the negative free cash flow... for now. 

Tyler Durden Thu, 07/30/2026 - 16:40

US Intel Chiefs Back Trump's Claim China Interfered In American Elections

Authored by Tom Ozimek via The Epoch Times,

The heads of four U.S. intelligence and national security agencies have backed key elements of President Donald Trump’s claim that China engaged in election interference by targeting American voter-registration data.

A fact sheet released July 30 by the White House Government Transparency Task Force says China and its proxies bought, stole, or hacked voter data belonging to as many as 220 million Americans, including some information that was not publicly available.

The fact sheet pairs that finding with the intelligence community’s official definition of election interference, which includes a foreign power’s targeting of voter data.

It notes that, for a foreign country’s actions to amount to “election interference,” they do not have to change the actual results.

“That definition includes a foreign power’s targeting of voter registration infrastructure or data,” the task force states, citing declassified documents produced by the U.S. intelligence community.

The fact sheet was approved by the heads of the Office of the Director of National Intelligence (ODNI), the National Security Agency, the Central Intelligence Agency (CIA), and the Department of Homeland Security, according to the White House.

Representatives from those agencies—as well as the Federal Bureau of Investigation—also coordinated with the White House before Trump’s July 16 address and “approved the factual statements” drawn from intelligence documents used in the speech, the task force states.

Election Interference Defined

In his speech, Trump said China has long been meddling in U.S. elections, including that it was “working to influence” the results of the 2020 presidential election, in which President Joe Biden was ultimately declared the winner.

Trump did not explicitly claim that China managed to change the 2020 result, and neither did the heads of U.S. intelligence agencies.

The spy chiefs did say in the fact sheet that voter-registration data is itself part of election infrastructure and could be manipulated in ways that affect election results, for instance by preventing groups of voters from casting their ballots.

“Adversaries could alter data to potentially prevent individual voters or groups of voters from voting, causing delays on election day or forcing voters to use provisional ballots,” the task force states, citing intelligence community documents.

A voter walks to a polling place in Milwaukee, Wis., on July 28, 2026. Nam Y. Huh/AP

“Adversaries could also use the registration data which in some cases is also available publicly or for purchase—to tailor other interference or influence efforts,” it adds.

Election interference “is a subset of election influence targeted at the technical aspects of the election, including voter registration, casting and counting of ballots, and reporting of results,” according to the task force.

The release of the fact sheet marks the clearest institutional backing yet for central parts of Trump’s allegations, which were challenged by some Democrats who cited an earlier intelligence assessment that China did not interfere in the 2020 election.

Trump Orders Investigation

During his July 16 address, Trump described China’s acquisition of the voter data as “the largest compromise of election data in history” and an “unprecedented election security nightmare.”

Trump said U.S. intelligence had found that “China was working to influence the results of the U.S. midterm elections, and later the results of the 2020 presidential election itself.”

He also said U.S. intelligence agencies began learning in 2020 that China had bought, stolen, or hacked tens of millions of voter records across 18 states but that some officials withheld or downplayed the information.

Trump directed the Department of Justice, CIA, FBI, and ODNI to investigate why the intelligence was withheld and, where appropriate, to seek criminal charges.

Sen. Mark Warner (D-Va.), the ranking member of the Senate Intelligence Committee, accused Trump of using the disclosures to influence the approaching midterm elections. Warner cited the intelligence community’s previous assessment that China did not attempt to interfere in the 2020 election.

“China is a serious strategic competitor, and it absolutely seeks to advance its interests at America’s expense,” Warner said.

“The Intelligence Community … concluded that China considered—but ultimately did not deploy—an influence campaign intended to affect the outcome of the 2020 election, and that no foreign government altered vote totals, hacked voting machines, or compromised the integrity of our election infrastructure,” he added.

Trump, in his speech, called the U.S. election system “so broken and so vulnerable that no one can possibly defend it.”

“It is not defensible,” Trump said.

The president also said that many previously classified documents spanning from January 2020 to June 2026 that support his claims would be declassified and released to the public.

“This is a cyber threat aimed at the very heart of our democracy,” he said.

Tyler Durden Thu, 07/30/2026 - 16:20

58% Against, Both Parties Scrambling: Data-Center Revolt Hits The Midterms

A "booming backlash" against AI data centers is shaping the midterm election - candidates cutting ads touting their anti-data-center credentials, protesters showing up at campaign events, industry players taking note - which will come as genuinely useful news to anyone who has spent the past year getting their information exclusively from NBC News.

The network's framing is that last year's elections in a handful of states revealed the hyperscale buildout as a major tension point up and down the ballot, and that the fight has now intensified into a full midterm issue - with demonstrators displaying "Stop Data Centers" signs at President Trump's Michigan appearance on Sunday - the protest movement having now reached the point where it greets the president of the United States at his own events.

The anti-data center protest during President Trump’s speech in Michigan: pic.twitter.com/EjsuS7yn7g

— Craig Mauger (@CraigDMauger) July 27, 2026

According to the report, Republicans, Trump included, have shifted toward ensuring data centers do not drive up voters' power bills, which is what happens when the polling gets loud enough to be heard over the donor calls.

A June Yale Program on Climate Communication poll cited by CNBC found 58% of registered voters oppose data-center construction in their own area - including 53% of conservative Republicans, which is not a demographic famous for agreeing with the 74% of liberal Democrats who feel the same way. More than 300 cities, towns and counties have enacted bans or moratoriums on hyperscale construction, per a count by The Information, and Data Center Watch tallied 75 major projects worth more than $130 billion delayed or canceled in the first quarter of 2026 alone - roughly matching the damage from all twelve months of 2025. New York Governor Kathy Hochul signed the nation's first statewide moratorium this month, voters in Monterey Park, California passed a permanent ban at the ballot box, and in April an unknown attacker fired 13 shots into the home of an Indianapolis councilman who had voted for an AI facility, leaving a note reading "No Data Centers," per The Week - the point at which a land-use dispute stops being a land-use dispute.

This is what it sounds like living next to a data center. The video below was recorded at midnight, and the data center is situated next to 100s of residential homes. pic.twitter.com/BHGqt3vKfb

— Merissa Hansen (@merissahansen17) May 10, 2026

The issue is bipartisan in the most literal sense: nobody knows which party owns the issue. In Wisconsin, Democratic gubernatorial candidate Francesca Hong is campaigning on a pledge to "tax the rich, fund our schools and stop AI data centers," per AP, while Pennsylvania's Josh Shapiro takes fire from his own rural base for welcoming the buildout onto prime farmland. In deep-red west Texas - which JLL projects will overtake northern Virginia as the world's largest data-center market by 2030 - protest groups led by Republicans are springing up in Lubbock, some of whose founders say they may not vote for Governor Abbott at all, and Abbott has responded by ordering regulators to make sure Texans are not paying higher electricity bills for the privilege of hosting Google. When the same issue is simultaneously a Democratic socialist's headline pledge and a Republican rancher's reason to stay home, the consultants have a problem no ad buy fixes.

None Of This Will Surprise Regular Readers

We've been tracking this revolt since it was a smattering of county fights. Earlier this month - in one day, there were 142 coordinated protests across 42 states under Tea Party veteran Amy Kremer, who declared that America is not for sale and predicted data centers on the ballot in November and again in 2028.

Today was incredible!

142 protests. 42 states. One message: ONE NATION UNITED AGAINST DATA CENTERS!

Communities across America showed up today for a National Day of Protest Against AI Data Centers to say that We The People deserve a voice before massive data centers are… pic.twitter.com/TwE7oRjR6V

— Kylie Jane Kremer (@KylieJaneKremer) July 18, 2026

The prediction is aging well - and now the mainstream media is catching up, four months before midterms. Meanwhile the enforcement arm of the buildout keeps generating its own coverage - this week's example being the Kansas physics teacher jailed for clapping at a data-center hearing while the commission passed the zoning anyway.

A high school teacher in Kansas was arrested for clapping in opposition to a proposed data center during a city council meeting. pic.twitter.com/yWRy5P0NHP

— FactPost (@factpostnews) July 28, 2026

Needless to say, the pitchforks are out...

Tyler Durden Thu, 07/30/2026 - 15:45

The Facts Behind China's "Gold Reset"

Authored by Peter Reagan,

The internet loves a reset.

A “reset” takes an impossibly complicated subject and boils it down to a date, a decision and one big red button.

China’s recent gold market announcements launched a veritable cottage industry of dire warnings and hysterical predictions.

Over the past few weeks, my feeds have been absolutely flooded with claims that China’s brought back the gold standard. And that Beijing built a machine designed to “collapse the dollar.” Some warned that July 24 would mark “the end of gold trading” – somehow eliminating manipulation and revealing gold’s “real” price.

(One popular video managed to make nearly all those claims at once!)

Listen: I understand why people are getting worked up.

China is the world’s top gold-mining nation. In 2023, China surpassed India to become the world’s #1 gold-buying nation (and its consumption substantially exceeds domestic mining). Its central bank, the People’s Bank of China or PBoC has been steadily adding to its official gold reserves for the last 20 consecutive months.

Now China and Hong Kong are building new vaults, clearing systems and delivery connections around the precious metal.

That sounds significant because it is significant.

But let’s not get ahead of ourselves.

This isn’t a gold standard. It is not a ban on paper gold.

And there is no evidence that China flipped a switch that will suddenly “reset” gold’s global price.

As is often the case in real life, the real story is more complicated.

I think it’s important though, because I expect it will have a much bigger impact over the long run…

China is building more than a bigger vault

Let’s begin with what actually happened.

On July 7, Hong Kong began trial operations of a new central clearing and settlement system for gold.

Clearing and settlement are two of those phrases that make most people’s eyes glaze over. In plain English, the new system is designed to help institutions complete gold transactions more efficiently – matching buyers and sellers, transferring payments and confirming who owns what.

Hong Kong also launched the first phase of a new “Delivery Connect” program with the Shanghai Gold Exchange. This is intended to make it easier to settle cross-border gold transactions and move physical metal between the two markets.

Meanwhile, Hong Kong wants to expand its gold storage capacity to more than 2,000 metric tons within three years. That would be roughly 10 times its current reported capacity.

Officials describe the goal as building a complete gold ecosystem incorporating trading, clearing, storage, delivery, insurance and logistics.

Think of it this way:

Owning a large pile of gold is one thing.

Building the roads, warehouses, scales, security systems and payment networks required to move that gold is something else entirely.

China has already accumulated substantial quantities of physical gold. Now it is developing more of the infrastructure needed to make that gold useful across institutions and borders.

That does not make the yuan a gold-backed currency.

But it could make gold easier to hold, trade and deliver within a financial system centered more closely on China and the yuan.

China’s banks are closing one retail door

The second development is what gave rise to the July 24 “China reset” story.

Industrial and Commercial Bank of China, or ICBC, announced that it would stop acting as an intermediary for individual customers trading precious-metals contracts through the Shanghai Gold Exchange after end-of-day settlement on Friday, July 24.

ICBC’s notice covered several kinds of contracts.

Some represented spot gold products eligible for physical delivery. Others were deferred-delivery contracts that allowed customers to use leverage – controlling a larger gold position with a smaller amount of money.

ICBC advised customers with existing positions to sell, close their trades or arrange physical delivery before the service was shut down. Other major Chinese banks have announced similar withdrawals from individual Shanghai Gold Exchange trading, although not all of them used the same deadline.

For example, China Construction Bank announced a similar July 24 closure and warned that remaining inventories or positions could subsequently be sold or forcibly closed. (They’d already raised collateral requirements on precious metals contracts to 120%.)

The banks’ stated reason was risk management.

That makes sense in light of gold’s extraordinary volatility this year. Gold climbed to an intraday high near $5,600 in January before briefly retreating below $4,000 in June. Chinese banks responded by tightening trading requirements, with some collateral requirements reportedly reaching as high as 140%.

In other words, a customer had to deposit more collateral than the value of the position itself! At the same time, CME Group’s COMEX requires a 40% margin for gold futures.

At that point, the appeal of offering the service presumably became rather difficult for the banks to justify.

This was not a nationwide prohibition on gold ownership. Chinese citizens can still own physical gold, buy bars and coins and use other non-leveraged gold products.

Nor did China shut down the Shanghai Gold Exchange.

A more accurate description would be:

China is not closing the gold vault. Its largest banks are closing part of the speculative trading counter attached to the vault.

That is noteworthy. But it is not a monetary reset.

Here’s what China did not do

China did not restore the gold standard.

Under a traditional gold standard, a nation defines its currency in terms of a specific quantity of gold and promises conversion between the two. China made no such promise.

The yuan is not redeemable for a fixed weight of gold. Beijing has not announced that every yuan will be backed by gold reserves. Nor has it limited its ability to create more currency according to the amount of gold in its vaults.

China also did not ban futures or derivatives trading.

In fact, Hong Kong is doing nearly the opposite.

As part of its effort to become a larger gold-trading hub, Hong Kong has revived gold futures denominated in both U.S. dollars and “offshore yuan,” with physical delivery services available through participating institutions. The goal of all these changes? To strengthen Hong Kong as an offshore yuan center and a regional gold-trading, clearing and reserve hub – not to make the yuan convertible into gold.

China isn’t systematically eliminating paper gold. It looks more like they’re reducing access to certain volatile, bank-operated retail products – meanwhile, expanding institutional gold trading, clearing, delivery and storage.

Those two policies are not necessarily contradictory.

Beijing may want gold to play a larger strategic role without encouraging ordinary households to make highly leveraged short-term bets on its price.

That is a far more plausible explanation than the idea that China secretly scheduled the destruction of the global monetary system for a Friday afternoon in July.

Why people are paying attention anyway

The hype may be overblown, but it did not appear out of thin air.

China occupies a unique position in the gold market.

It is the world’s largest gold producer, accounting for roughly 10% of global mine output in recent years. It is also the largest consumer – which means the nation uses more gold than it produces and must import substantial quantities to meet domestic demand.

Chinese gold demand is also changing.

In 2025, purchases of bars and coins rose more than 35% to approximately 504 metric tons. For the first time, Chinese demand for investment bars and coins exceeded demand for gold jewelry. Domestic mine production reached approximately 381 metric tons.

Then there is China’s central bank.

The People’s Bank of China reported adding approximately 15 metric tons of gold in June, its largest monthly increase since October 2023. That extended its reported purchasing streak to 20 consecutive months and brought official holdings to approximately 2,346 metric tons.

Put the pieces together:

• China mines lots of gold.

• Chinese households and institutions buy gold.

• China imports additional gold.

• The PBoC accumulates gold.

• Hong Kong is expanding gold storage.

• New systems are being built to clear, settle and deliver gold across borders.

That is not a gold standard. But neither is it meaningless.

China is building a financial neighborhood in which physical gold is easier to store, trade and use – while reducing reliance on institutions and payment systems outside its control.

We have discussed before why central banks increasingly regard physical gold as a vital reserve asset in a world of rising government debt, geopolitical friction and currency uncertainty.

China’s latest moves fit that broader pattern.

Could China reshape gold’s global price?

This is where we have to be especially careful.

Gold does not have one market or one price-making machine.

Its global price emerges from a complicated network of physical bars, wholesale spot transactions, futures contracts, currency movements, central-bank activity and buying by households and institutions around the world.

London and New York remain enormously influential. Shanghai has become increasingly important. Prices move between these markets through arbitrage – traders responding whenever gold becomes meaningfully cheaper in one location than another.

A popular argument says futures trading creates an artificial gold price because vastly more contracts trade than physical bars change hands.

There is a grain of truth here.

Leverage allows traders to control large positions without paying the full value upfront. During extreme market moves, margin calls and forced liquidations can amplify price swings. Recent metals volatility has offered plenty of examples of speculative activity accelerating both rallies and selloffs.

But it would be a mistake to conclude that all futures trading is fake or that eliminating it would automatically reveal gold’s “true” price.

Futures also provide liquidity and help buyers and sellers discover prices. Research on China’s own gold market has found that futures trading has historically played a significant role in price discovery. The World Gold Council likewise notes that futures concentrate trading activity, add liquidity and contribute to the process by which new information becomes reflected in prices.

Less leverage may reduce forced selling and speculative excess. In fact, the Bank of International Settlements claims that leverage and margin-triggered liquidations amplified the abrupt reversal in gold’s price back in January.

It can also mean fewer buyers and sellers, thinner trading and greater volatility.

So I would not claim that China’s bank closures will automatically produce a more honest gold price – especially because those closures affect only certain retail trading channels, while Hong Kong is simultaneously expanding other forms of futures trading.

The potentially more important development is the growth of physical infrastructure.

If more gold is stored in Hong Kong…

And if more trades result in physical delivery…

And if Delivery Connect attracts substantial cross-border activity…

And if Asian institutions increasingly use those systems rather than merely referencing prices established elsewhere…

…then physical demand from China and the rest of Asia could exert more direct influence over gold’s global price.

That would not happen on one deadline.

It would happen gradually, transaction by transaction. Gold bar by gold bar.

What to watch next

The best way to judge China’s gold ambitions is not to watch social media predictions or stare at gold’s price on the morning after July 24.

Watch what China actually builds.

Does Hong Kong’s storage capacity begin moving toward its 2,000-ton goal?

How much gold passes through the new clearing system?

Do international banks, central banks and large commercial buyers use Delivery Connect?

Do Hong Kong’s new gold contracts attract enough trading to become meaningful?

Does more gold move into allocated storage and physical settlement rather than remaining merely a contractual promise?

Those numbers will tell us whether China has created a genuine alternative gold center – or merely another ambitious financial project that never attracts sufficient use.

Infrastructure matters. But infrastructure must be used.

An empty highway does not reshape trade simply because someone poured the concrete.

Only physical gold is gold itself

Although China did not launch a gold-backed currency, ban derivatives or reset the global price of gold, its recent decisions illustrate something I discuss frequently:

Physical gold and a financial claim tied to gold are not the same thing.

A futures contract is an agreement.

It has rules, expiration dates, collateral requirements and counterparties. The exchange can change its terms. A bank can increase margin requirements. A financial institution can decide it no longer wants to sell a product.

That does not make every contract fraudulent or useless. These instruments serve legitimate commercial purposes (as well as speculation). It simply means the contract is not the gold itself.

ICBC customers discovered that distinction firsthand. Their bank-operated access to the Shanghai Gold Exchange existed only as long as the bank chose to provide it. When the bank changed its policy, customers had to sell, close their positions or take delivery.

The rules around a promise can change.

An ounce of physical gold remains an ounce of physical gold.

That does not mean physical gold’s price cannot fall. Gold experienced a severe decline this year, and anyone who says its price moves in only one direction is ignoring history.

Nor do I know whether China’s new systems will push gold higher next week, next year or at all. Anyone promising a dramatic price explosion because of a single deadline is selling certainty that does not exist.

Here is what we do know:

China is investing serious resources in the storage, clearing and delivery of physical gold. Its central bank continues to accumulate the metal. At the same time, some of its largest banks are effectively outlawing leveraged retail speculation on gold’s price.

China is not abandoning paper markets entirely. But it is making physical gold bullion a larger and more important part of its financial system.

For Americans concerned about their long-term savings, that distinction is worth understanding. Because there is a big difference between owning an asset and owning a promise based on the price of an asset.

China isn’t about to reset gold’s price on July 24.

Instead, what it’s really doing is reminding the world what gold actually is. They’re reminding everyone who’s forgotten why physical gold matters.

Tyler Durden Thu, 07/30/2026 - 15:25

Jim Rickards Slams Tech Bros Running The Marxist Playbook

Authored by James Rickards via DailyReckoning.com,

Can Marxism offer a framework for understanding artificial intelligence (AI) and the tech bros behind it?

This is not to suggest that Marxism is a viable economic system or a practical alternative to capitalism. It’s not. But Karl Marx was a heterodox economist before he became an ideologue, and some of his ideas are powerful tools for understanding economics, even if his overall program was a failure.

Let’s use some of those tools to understand the rise of AI oligarchs and the future of AI.

We begin with Marx’s main idea: the abolition of private property. How do tech bros feel about private property? They steal it. If you can simply take private property, then it’s not private. Marx would approve.

The AI gang does this by scraping vast amounts of internet content for use in training their large language models (LLMs). That material includes copyrighted books, magazine articles, academic papers, images, music and countless other forms of intellectual property (IP).

Do tech bros pay royalties? Do they pay licensing fees? Sometimes, but often they don’t. They take what they want like internet pirates, or the Bolsheviks after the Russian Revolution in 1917.

In fact, AI models have used my nine books in their training sets. Google, Apple, Microsoft, OpenAI and Meta have paid me nothing. Anthropic offered to pay me $37,000 for some (not all) of my books. I accepted the offer, but I still haven’t received the payment. Maybe I’ll call my lawyer about that before their IPO.

The point is that much of the AI crowd behaves no differently than the imperialists of the 19th and early 20th centuries, who exploited land, resources and human capital, including slavery, while paying little or nothing in return.

V. I. Lenin called imperialism “the highest stage of capitalism.” But Lenin never met a tech bro. They put imperialists to shame.

YOU Are Paying for the Boom

Marx’s theory was based on the idea that the owners of the means of production (capitalists) used labor but did not pay workers a fair share of the surplus created by the production process. There are a lot of flaws in this theory.

But the tech bros have a better idea: Get rid of human labor completely.

AI allows companies to pay some workers less because a growing share of productivity comes from software rather than labor. More to the point, AI is eliminating certain jobs entirely, as seen in layoffs among software developers and in industries such as healthcare and customer service that are increasingly using AI to perform repetitive or administrative tasks.

In the AI world, capitalists don’t just take more than their share; they take the entire buffet table. The tech bros’ solution to mass unemployment is guaranteed basic income, a handout. This ignores the dignity of the individual, which is achieved largely through productive work.

Other examples of taking public assets for private use include massive demands placed on the electric grid to power hyperscale data centers. Towns and counties around the country could face higher electric bills as hyperscalers compete with residents and businesses for available electricity.

It’s another case of extracting wealth from everyday Americans to feed the AI beast.

Even that’s not enough. AI applications are being crammed into our laptops, tablets and smartphones whether we know it or not and whether we like it or not. This is forcing manufacturers to build more powerful devices, which can increase costs for consumers while requiring additional processing power to handle AI features.

Many of these AI features operate by default, even if users never intentionally engage with them. That means you may be using AI without realizing it.

Never mind that AI output can be inaccurate and, at times, dangerous. The problem is compounded as AI-generated content increasingly circulates online and becomes part of future training data. Meanwhile, many AI features collect large amounts of user data from the devices they run on.

Individual AI users also provide fresh inputs to LLMs through prompts, interactions and, in some cases, data collected from their devices. AI operators are hungry for this kind of information because they have already consumed vast amounts of publicly available internet content, while the quality of that content continues to deteriorate as more AI-generated material floods the web.

Are you getting paid for information that may be collected from your device? Do you even know it’s happening? Almost certainly not. This is just another form of digital extraction that enriches the tech bros while helping fuel trillion-dollar valuations.

In addition to authors, artists, local communities and everyday Americans, the AI mafia is also feeding off the government. Subsidies include streamlined permitting for massive data centers, tax incentives and abatements in many jurisdictions, favorable regulatory treatment in some areas and enormous government contracts.

There are costs associated with all of these government benefits, but they are not borne by the AI companies themselves.

They’re borne by everyday citizens in the form of taxes, higher electricity rates, reduced quality of life as data centers reshape small communities and the risk that increasingly capable AI systems could create serious disruptions in sectors such as banking, telecommunications and healthcare if they malfunction or are misused.

The Extraction Economy… And New Revolutionaries

The Chinese are no better. The success of Chinese AI models such as DeepSeek and Moonshot has been aided by their ability to build on advances made by leading U.S. AI labs. It’s a case of one group of pirates raiding another group of pirates.

Both thrive on information they did not create, but the Chinese have become especially adept at turning those advances into low-cost competitors.

This predatory behavior can be likened to imperialism or piracy. The technical economic term for it is externality. That means the profits and benefits of extracting information are kept by AI firms, while many of the costs are pushed onto the public.

It’s no different than a gold mine that keeps the gold but dumps the cyanide used in refining into public waterways. The miner gets the gold and the public gets poisoned. The fact that AI is digital does not make the behavior any more acceptable from a social perspective.

Perhaps the most disturbing aspect of Silicon Valley’s extractive culture is that many CEOs are not only aware of it; they thrive on it. They have perfected the art of turning their own customers into unwilling guinea pigs. A culture of short-termism, disdain for the public and pure greed keeps the extraction racket going.

If there’s one ray of sunshine, it’s that some members of Gen Z appear to be turning their backs on AI, autonomous agents and endless screen time.

There’s growing fatigue with the amount of time people spend online, along with increasing concern about the pervasive nature of AI. This shift also reflects widespread frustration that much AI output is bland, repetitive or simply wrong.

Some Gen Zers are doing something that now seems almost radical: They’re reading books.

There are many reasons why the AI bubble could burst, but the Gen Z revolt may be one of the least appreciated and most unexpected.

Tyler Durden Thu, 07/30/2026 - 14:45

OpenAI Slashes GPT-5.6 Luna Price By 80% As China's Cheaper Models Close In

OpenAI just cut the price of its cheapest GPT-5.6 model by 80 percent, three weeks after launch - the clearest signal yet that the company that kicked off the generative AI boom is being dragged into a price war it did not start.

On Thursday the company said GPT-5.6 Luna, its speed-focused model, now costs 20 cents per million input tokens and $1.20 per million output tokens, down from $1 and $6. GPT-5.6 Terra, the mid-tier model, gets a 20 percent trim to $2 per million input tokens and $12 per million output. Pricing for the flagship GPT-5.6 Sol remains unchanged.

"Our strategy remains focused on advancing both capability and efficiency so each generation of intelligence can accomplish more work at a lower cost," OpenAI said in its announcement.

The move arrives as companies that once encouraged unconstrained "tokenmaxxing" have started looking hard at AI bills that sometimes run into the billions. Enterprises want clearer returns before committing to the most expensive models, and they now have more alternatives than they did in the early ChatGPT era.

OpenAI is framing the cuts as the fruit of efficiency work rather than a margin sacrifice - a day earlier the company said GPT-5.6 had helped make itself cheaper to run, and it is passing those gains through to how usage is counted in Codex and ChatGPT Work subscriptions, with the lower prices rolling out on AWS as well.

Chinese open-weight models have closed the gap quickly. Moonshot AI's Kimi K3, released earlier this month, has beaten some leading proprietary systems on industry benchmarks and can be run on a company's own infrastructure. That development helped spur a round of competitive responses.

The scale of the challenge is hard to overstate. At 2.8 trillion parameters, K3 is the largest open-weight model ever released, and blind developer testing put it in first place in LMArena's front-end coding arena, ahead of Anthropic's frontier Claude Fable 5. Demand has been heavy enough that Moonshot has capped new subscriptions and API access over capacity constraints, and the company's daily revenue has grown roughly sixfold since launch as it seeks a $50 billion valuation ahead of a potential Hong Kong IPO. The economics underneath are brutal: on Artificial Analysis's cost-per-task index, K3 completes a task for 94 cents and DeepSeek V4 Pro for four cents, versus $1.04 for OpenAI's flagship Sol and $1.80 for Anthropic's Claude Opus 4.8 - and Moonshot reports cache-hit rates above 90 percent in coding workloads that cut K3's effective input cost to 30 cents per million.

Anthropic followed with Claude Opus 5, which it pitches as approaching the performance of its top-tier Fable 5 model at half the price - and beating it outright on some knowledge-work benchmarks - while holding the same rate card as its Opus 4.8 predecessor. Microsoft has been loudly promoting its own cheaper models, including MAI-Cyber-1-Flash, a new cybersecurity-focused offering that AI chief Mustafa Suleyman says delivers "world-leading performance at 50% of the cost." Google, meanwhile, launched a trio of new Gemini Flash models this month and claimed its top Flash model undercuts Kimi K3 and other Chinese systems on a per-task basis.

OpenAI's GPT-5.6 family consists of three tiers: Sol (highest capability), Terra (balanced), and Luna (fastest). By aggressively discounting the middle and low ends while leaving the top model alone, the company is trying to keep volume customers from migrating to open-weight or rival proprietary systems without fully abandoning the premium pricing that funds frontier research.

Whether the cuts are enough to slow the shift toward cheaper alternatives remains to be seen. What is clear is that the era of unconstrained AI spending is giving way to a more pragmatic one - one in which even OpenAI has to compete on price.

Tyler Durden Thu, 07/30/2026 - 14:25