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US Housing Starts Plummet In July, Near COVID Lows

After Housing Starts exploded higher in June (driven by a massive rebound in multi-family units), July was expected to see a reflexive decline of 5.9% MoM...

...things were considerably worse, with US Housing Starts plunging 12.4% MoM (the third major monthly drop in four months)...

On the other hand, the more forward-looking Building Permits (preliminary for July) rose 5.0% MoM (well above the 0.6% MoM expected), after two months in a row of declines.

On a SAAR basis, Starts at back near post-COVID lows while Permits are holding in a four year range...

Under the hood, both Single-Family and Multi-Family movements were stroinger for Permits abut weaker for Starts (after multi-family starts soared last month)...

This shouldn't be a total surprise after yesterday's decline in builder sentiment (confidence among US homebuilders dropped for a second month to the lowest level of the year, dragged lower by elevated borrowing costs and higher material and land prices).

It seems recent rises in the mortgage rate (and inventories already at over-stuffed levels, given the slowness of sales) has finally dented the homebuilders' self-satisfying confidence... and the lack of affordability leaves the American Dream fading into Renter Nation...

Tyler Durden Tue, 08/18/2026 - 08:42

"Sea Of Red": Futures Slide As Market Wakes Up To Soaring Bond Yields And Diesel Prices

US futures are a "sea of red" (as Bloomberg describes it) in early trading as thin summer volumes persist, with the wrong kind of inflation coming to the fore and Monday’s tech selloff weighing on sentiment despite bullish AI news. The recent stock-bonds disconnect is finally being reappraised with US futures lower across the board. As of 8:00am ET, S&P 500 futures fell 0.4% with Nasdaq 100 contracts down 1.1% with Semis, Mag7, and Memory all under pressure, while Software is bid. Nvidia dropped 1.8% as the cost of protecting its debt against default closed in on a high reached last month. Defensives and Energy are leading as investors continue to de-gross / de-lever. Tech stocks drove declines across global markets equities as long-dated bond yields pushed further into multidecade highs and oil prices extended their climb, draining traders’ appetite for risky assets.  Yields on 30-year Treasuries rose 2bps to 5.33%, the highest since 2007 as "yields seem to be reacting to a combination of energy prices, the deteriorating US fiscal situation, elevated credit issuance, and BOJ/JPY dynamics which are all driving term premia higher", per JPM.  US crude neared $85 a barrel with Brent trading above $91, while the Diesel crack spread rose above $100 for the first time ever, as tensions in the Middle East showed no sign of easing. The dollar was little changed while gold declined. Price pressure concerns are hardly new. But with long-term yields around the globe hitting multi-decade highs, the debate may be shifting toward whether the set-up reflects persistent “sticky” inflation or an AI-driven “growth” dynamic. For the former, the signals are clear to see: persistently elevated oil prices, soaring diesel costs, “Dr. Copper” dynamics and the effects of El Niño. Today’s macro data focus is weekly ADP, Import / Export prices, Housing Starts, Mfg measures, and Pending Home Sales. Tomorrow’s Fed Minutes are likely more impactful as he bond market focuses on next week’s Jackson Hole mtg / Warsh speech

In premarket trading, Mag 7 stocks are mostly lower: Meta Platforms (META) slips 1% as the company heads to court Tuesday for a high-stakes showdown with a coalition of state attorneys general over claims that the company deliberately designed Facebook and Instagram to encourage compulsive use among young users (Apple +0.6%, Microsoft +0.7%, Amazon -0.4%, Alphabet -0.5%, Tesla -1.3%, Nvidia -1.9%)

• Chipmakers and other AI-related firms slide, weighing on US stock futures, as risk-off sentiment sets in.
• Abercrombie & Fitch (ANF) is down 2% after Raymond James downgraded the clothing company to market perform following the stock’s recent rally.
• Amylyx Pharmaceuticals (AMLX) rises 26% after saying a late-stage trial of its experimental drug met its primary endpoint for patients who experience low blood sugar levels following bariatric surgery.
• Aon (AON) slips about 1% on light trading after saying CFO Edmund Reese is leaving after two years in the post.
• Baidu ADRs (BIDU) drop 6% after the Chinese search-engine operator reported its fifth quarter of free cash outflow in the past six, thanks to soaring capital expenditures. Its revenue was shy of analyst estimates, dragged by underperformance at its subsidiary iQiyi.
• Bath & Body Works (BBWI) climbs 3% after Citi raised the recommendation on the company to buy, with analyst Paul Lejuez noting a second quarter EPS beat and positive tone about recent product launches.
• Fabrinet (FN) slides 9% after the process engineering and manufacturing services firm’s Datacom sales disappointed investors.
• Home Depot (HD) climbs 2% after results beat estimates in the latest quarter, a sign that spending on improvement projects is holding up despite high borrowing and housing costs.
• Norwegian Cruise (NCLH) falls 2% as Mizuho downgrades the company to neutral, saying cash requirements may pressure the balance sheet.

August’s rebound in chipmakers faltered in premarket trading, with semiconductor stocks sliding 3.4% and Nvidia down almost 2% as its CDS push wider. Equity markets are struggling under the weight of rising borrowing costs as bond investors demand higher premiums to finance spendthrift governments and shield against persistently sticky inflation. Elevated oil prices have also reinforced expectations that central banks will need to tighten monetary policy.

“The Middle East is clearly re-escalating again and long-term interest rates are rising, and these are things that end up corroding the value of equities,” said Emma Moriarty at CG Asset Management. “And in a market where it’s summertime, liquidity is a little bit thinner, it’s a bit more prone to volatility.

In Europe, French 30-year yields hit their highest since 2008, while their UK peers were approaching 6%. Germany’s borrowing costs hit a 15-year high in a major sale of long-dated bonds.  Yardeni Research warned investors are becoming more concerned about the surge in borrowing by AI hyperscalers and questioning whether the Fed will remain sufficiently vigilant on inflation if oil prices climb again.

“We aren’t pushing the panic button,” strategists led by Ed Yardeni noted. “However, we are closely monitoring whether the bond vigilantes might do so.

Events in the Middle East will remain a key point of focus as both the US and Iran show less willingness to compromise. President Donald Trump said he won’t try to revive a stalled truce with the Islamic Republic, dimming prospects for a swift reopening of the Strait of Hormuz. 

For Mohit Kumar at Jefferies, there is “no easy way out” and “further pain in the near term” for energy costs. “We have stayed away from the long end of the curve and rates duration and instead focus on steepeners,” he wrote. “We see no reason to change our portfolio.”

Traders expect tech-stock volatility to continue as investors shift their focus back and forth between robust earnings and worries over whether debt-fueled infrastructure investment will deliver sufficient returns to justify the spending. “You are going to get winners and losers and you’re going to get a lot of wasted capex,” said Justin Onuekwusi, chief investment officer at  St. James’s Place. “That, to me, is a huge future challenge.”

The Stoxx 600 equity index headed for a fifth straight day of losses, the longest such stretch this year. Here are the biggest movers Tuesday:

• H&M climbed as much as 4.6%, the most in almost 11 months, as Citi places the Swedish fashion retailer on a 90-day positive catalyst watch ahead of its third-quarter results
• Coloplast shares gained as much as 3.6% after the Danish medical-products maker reported better-than-expected revenue for the third quarter
• Hemnet Group shares surged as much as 13%, to the highest in more than three months, after JPMorgan double-upgraded the Swedish online property portal to overweight and said it’s “worth revisiting” following a period of underperformance
• Skan shares rose as much as 8.5% to the highest level in almost a year after the pharma equipment supplier reported first-half results
• Basilea shares jumped as much as 8.1%, the most in more than a year, after the Swiss biopharmaceutical company reported an increase in revenue for the first half-year and upgraded its outlook for the full year
• 1&1 shares soared as much as 6.5% as its parent United Internet plans to buy as many as 6 million shares in the telecom company
• Schott Pharma shares advanced as much as 7.6%, to the highest in almost a year, after Barclays said the German pharma packaging company is leaving its issues “in the rear-view mirror” and is set for growth acceleration
• Huber+Suhner shares dropped as much as 12%, the most since 2020, after the maker of antenna systems and fiber-optic cables reported weak results that missed expectations in the first half
• Royal Unibrew fell as much as 9.1%, the most since April, on weak second-quarter earnings because of a soft performance in Northern Europe
• Scor shares fell as much as 3.1%, the most in eight weeks, as UBS downgrades the reinsurer to sell from neutral

Asian stocks were set to snap a four-session winning streak as gains in oil prices fueled inflation concerns, while rising global bond yields also dimmed the appeal of equities. The MSCI Asia Pacific Index erased an early advance to trade 1% lower. Tech and industrials were the biggest drags on the benchmark while subgauges of healthcare and energy stocks advanced. Japan’s Nikkei led losses among key national indexes in the region, dropping 2.5%. South Korea’s Kospi also reversed early gains and finished lower as trading resumed after a holiday. Asia’s stock benchmark is up more than 2% so far in August following two straight months of losses. Traders will be studying minutes from the Fed’s July policy meeting, due for release later this week, for clues to the central bank’s rate path. Globally, investors are taking profit and reducing exposure, said Jung In Yun, chief executive officer at Fibonacci Asset Management Global in Singapore. “Seems like a short-term issue, not a major catalyst for another steep fall.” Elsewhere, Indonesia’s benchmark index rose to the highest in three months after President Prabowo Subianto’s 2027 budget speech on Friday eased some investor concerns over fiscal discipline.

In rates, treasuries drift lower into the early US session, with futures near lows of the day and the curve extending a steepening move. Longer-dated bond yields have continued to carve out fresh peaks alongside persistently higher energy prices. US yields cheaper by up to 2bp across the long end, with 2s10s and 5s30s steeper by 1bp and 1.4bp on the day, respectively. US 10-year yields trade around 4.74%, cheaper by 1bp, with bunds and gilts lagging by an additional 2bp and 1bp in the sector.  Germany long-end lags, following a €4 billion ($4.6 billion) August 2056 syndicated bond sale at highest yield since 2011. US session focus includes a busy data slate, while another large day for corporate issuance is also expected. IG dollar issuance slate includes a few deals already. Twelve issuers priced $9.1 billion on Monday, pushing monthly volume above $145 billion for a new August record. Issuers paid about 5bps in new issue concessions on deals that were 2 times covered. Another busy session for corporate deals is expected for Tuesday. Treasury auctions this week include $16 billion 20-year bonds (Wednesday) and $8 billion 30-year TIPS (Thursday)

In commodities, Brent crude hit a fresh month-to-date high during European trade against the backdrop of dwindling expectations of an immediate resolution to the US-Iran conflict. Focus is moving beyond crude benchmarks with the widening in crack spreads garnering attention. The Nymex heating oil and ICE gasoil cracks both hit fresh records on Monday, with the former topping $100 a barrel. US gasoline also gained, with the Nymex prompt spread the strongest since 2022. 

Diesel crack hits record $102. This is absolutely unprecedented.

Industrial economy either grinds to a halt or consumers about to be hit with the biggest energy pass through in history pic.twitter.com/OtAdgrCvb3

— zerohedge (@zerohedge) August 17, 2026

This adds further ammunition to the inflation angst surrounding geopolitical disruptions and in Europe serves to raise scrutiny over government balance sheets. France is a standout with short bets on French paper continuing to ratchet higher ahead of upcoming budget negotiations. The recent ascent of precious metals is faltering. Spot gold down 0.5%. 

In FX markets, the Bloomberg Dollar Spot Index snapped a three-day losing streak to climb 0.1%; oil prices extended gains after prospects for a peace deal between the US and Iran dimmed. USD/JPY rose as much as 0.2% to 159.78, highest since July 31; one-week risk reversals trade at 193bps, puts over calls, compared to Monday’s high of 248bps. GBP/USD slipped as much as 0.2% to 1.3520; data showed UK employers shed more workers in July and job vacancies hit a fresh five-year low. EUR/USD was modestly lower at 1.1575; one-month options sentiment turned bullish for the first time since early March. Kiwi led G-10 losses; NZD/USD fell 0.5% to 0.5872

Looking at the US economic data calendar, we get ADP weekly employment change (8:15am), August New York Fed services business activity, July import/export price index, housing starts, building permits (8:30am), industrial production (9:15am) and pending home sales (10am). No Fed speakers scheduled for the session

Market Snapshot

Top Overnight News

• Iran will shift to a "fully offensive" military posture because efforts to negotiate a permanent end to the war with the U.S. have stalled, a senior Iranian official told Reuters on Monday, as Washington ruled out extending ‌a temporary ceasefire agreement. RTRS
• Yemen’s Iranian-allied Houthi rebels are escalating attacks along the country’s Red Sea coast, shutting down operations at a strategic seaport and pushing closer to the Bab al-Mandeb Strait, an important global shipping chokepoint. WSJ
• Long-term borrowing costs across major economies hit multi-decade highs on Tuesday as inflation concerns, deficit fears and surging AI bond issuance put pressure on government debt around the world. FT
• US investment-grade bond sales have set a third straight monthly record, continuing the market’s fastest pace of issuance as spending on the artificial-intelligence buildout fuels corporate borrowing. August’s high-grade debt supply reached $145.2 billion, topping 2020’s total of $136 billion for the month. BBG
• Chinese AI companies are building systems that perform almost as well as leading models without the most powerful hardware, challenging their US rivals. One measure of China’s long AI push is its dominance in 2023 patent applications. BBG
• China’s economy showed across-the-board weakness in July and growth likely slipped further below the government’s annual target, sparking a call from Premier Li Qiang on officials to ramp up supportive measures. BBG
• Apple has acknowledged for the first time that regulatory changes forcing it to loosen control of its App Store are weighing on its more than $100bn services business, a rare concession that antitrust action is beginning to dent one of the company’s most profitable divisions. FT
• Unemployment in the U.K. was unchanged in the three months through June, while wage growth edged up slightly, likely not moving the dial for Bank of England policymakers who are expected to leave interest rates on hold next month. WSJ
• Canada faces a new round of 50% U.S. tariffs this week that businesses said could cause job losses in some already struggling industries, while complicating broader negotiations over the future of North America's free trade agreement. RTRS
• Anthropic PBC is on track to generate annualized revenue of more than $65 billion based on its current performance, up more than sevenfold from its pace at the end of last year. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks mostly declined following the weak lead from Wall Street, where all major indices declined amid higher oil prices and yields due to ongoing geopolitical uncertainty following the expiry of the US-Iran MoU and with Trump rejecting a truce extension, while he also threatened to bomb US ally Oman. ASX 200 eked out slight gains amid a slew of earnings, as results from BHP and CSL helped keep the index afloat, although gains were capped by weakness in telecoms, financials and the consumer sectors.
Nikkei 225 retreated beneath the 68,000 level with underperformance in Japan amid upside in yields, higher oil prices, fears of a faster pace of BoJ rate hikes, and the recent weak GDP data. KOSPI initially rallied on return from the long weekend, but then faltered as the early tech resilience waned, and with some suggesting that US President Trump's decision to reduce military drills with South Korea could partly be due to frustration regarding the pace of South Korea's investment pledge. Hang Seng and Shanghai Comp were subdued following the recent disappointing economic data, in which Industrial Production and Retail Sales missed forecasts, although the downside in the mainland was somewhat cushioned after China's MOFCOM and eight other ministries announced measures to boost consumption in lower-tier cities and counties.

Top Asian News

• China’s Ministry of Commerce and eight other ministries issued guidance aimed at boosting consumption in lower-tier cities and counties, with fiscal support a key focus. Measures include upgrading retail channels, encouraging new consumption formats, improving local service efficiency and expanding eldercare, childcare, education, healthcare and sports facilities, while eligible personal consumer loans and loans to service-sector operators may receive fiscal interest subsidies.
• PBoC plans to expand Yuan offshore market and is backing the creation of a new model for real estate developments, adding they will intensify review of macroeconomic and financial efforts.

European bourses are softer across the board, with the recent bond selloff causing risk aversion. Persisting inflationary pressures, increased government spending and shifting investor demographics are hitting bonds globally. Political uncertainty, especially in the US ahead of the midterms, is also putting pressure on bonds. Its impact on equities is that higher yields would weigh on profits as it would require larger payouts. Higher yields would also mean higher discount stock valuations. Sectors highlight the negative bias. Retail and Energy are the only sectors posting decent gains while Tech, Industrial Goods & Services and Basic Resources are the sector laggards.

Top European News

• UK Unemployment Rate (Jun) 4.9% vs. Exp. 4.8% (Prev. 4.9%).
• UK Employment Change (Jun) 83k (Prev. 147k).
• UK Average Earnings excl. Bonus (Jun 3MYr) 3.5% vs. Exp. 3.4% (Prev. 3.4%).
• UK Average Earnings incl. Bonus (Jun 3MYr) 4.1% vs. Exp. 4.1% (Prev. 4.4%).
• UK Claimant Count Change (Jul) -11.0k vs. Exp. 11.2k (Prev. -6.4k).
• UK HMRC Payrolls Change (Jul) -13k (Prev. -13k).
• German ZEW Economic Sentiment Index (Aug) 34.2 vs. Exp. 30 (Prev. 26.3).
• German ZEW Current Conditions (Aug) -61.1 vs. Exp. -68.8 (Prev. -77.6).
• European ZEW Economic Sentiment Index (Aug) 31.4 vs. Exp. 25.4 (Prev. 23.4).

FX

• DXY is modestly firmer today with headline catalysts light; the latest reporting optimistic from Pakistan but not reflected by Iran and the US. All-in-all, the market is viewing the latest updates as both sides in stalemate, and with Hormuz traffic low oil it looks like Crude could stay elevated and continue to weigh on the risk tone. Absent tier-1 data and headlines should keep focus on yield moves with US supply tomorrow potentially the most expensive for the Treasury in 25 years. DXY is within a narrow 99.52-99.69 range.
• UK Jobs: The strong wage figures were caveated by a 6.1% rise in public sector pay helped by NHS pay awards, while the unemployment rate unexpectedly remained at the prior 4.9% level (exp. 4.8%) and the 3M employment change printed below the prior; sparking a modest dovish reaction with Cable falling 15 pips; action which has persisted two hours later. Now, Wednesday’s CPI is in focus, and with GBP having had a strong run vs. the USD, it could see a decent move should figures rise at a slower than expected pace.
• Action elsewhere is quiet. NZD dipped below 0.59 to a 0.5870 trough amid the risk tone, USD/JPY looks towards 160.00 as oil prices hit its terms of trade, action which also fails to help energy exporters NOK and CAD, the latter which is flat against the USD, while NOK is weaker against the Buck (USD/NOK +0.2%), but firmer vs. SEK after it strengthened on Monday.

Fixed Income

• Global fixed benchmarks continue to move lower, in a continuation of the action seen last week. Yields continue to trudge higher; the steepening seen in the last few sessions appears to have taken a breather this morning, with yields across the curve moving higher to a similar magnitude.
• Yields continue to hold at multi-decade highs; the US 30yr (5.32%) sits at levels not seen since 11 June 2007, with the next peak going back to 2004 (5.53%). As for the yield spread, the US2s30s continues to widen, now at 113bps (vs 98bps at the start of the month). To remind, front-end rates were pressured after recent soft US data which led to a dovish Fed repricing, whilst long-end rates have been impacted by fiscal/geopolitical/political uncertainty.
• USTs (-3 ticks) are off by a handful of ticks and trade within a 108-10 to 108-15+ range. Domestic newsflow has been light this morning, and will likely remain so for the remainder of the day given the lack of Tier 1 data and the summer lull. Bunds (-35 ticks) and Gilts (-30 ticks) also follow the bearish tone, but UK paper has its own data to digest this morning.
• Overall, the UK’s jobs data doesn't show a significant change in the labour market, a point that was expected heading into the release. Initial focus on the hotter-than-expected wage metrics, including the upward revision to the measure with bonuses. Additionally, the claimant count unexpectedly declined and the prior was revised down. However, this is offset by the unemployment rate unexpectedly remaining at the prior 4.9% level (exp. 4.8%) and the 3M employment change printing below the prior.
• The UK sells GBP 4bln 4.875% 2036 Gilt: b/c 3.65x (prev. 3.13x), average yield 5.155% (prev. 5.040%), tail 0.1bps (prev. 0.1bps).
• Japan sells JPY 1.9tln 5-year JGBs; b/c 4.15x (prev. 3.43x), average yield 2.020% (prev. 2.163%), tail in price 0.02 (prev. 0.03).

Commodities

• WTI and Brent Oct futures hold a positive bias as constructive geopolitical headlines are trumped by escalatory rhetoric (see below). WTI trades towards the upper end of USD 84.64-85.68/bbl after topping yesterday’s USD 85.04/bbl high (vs low 81.50/bbl). Brent eyes USD 92/bbl in a current USD 90.64-91.85/bbl range after notching a USD 88.01-91.21/bbl range yesterday. Dutch TTF resides around recent ranges with gains of some 1.5% intraday, testing EUR 63/MWh to the upside in recent trade.
• Metals are subdued as elevated energy prices keep the USD underpinned and thus weigh on the complex. Spot gold pulled back to around USD 4,400/oz and earlier hit lows close to its 100 DMA (USD 4,385/oz) in a USD 4,386-4,436/oz intraday range at the time of writing. Spot silver remains within yesterday’s USD 64.75-66.56/oz range. Base metals are lower across the board. 3M LME copper tested support around the 14k/t mark this morning to trade in a current USD 13,996.18- 14,174.00/t range at the time of writing.
• In terms of the main geopolitical updates, US President Trump reiterated that the US remains in control of the Strait of Hormuz and said Iran wants to reach a deal, although he does not believe Tehran will agree to the terms, he considers necessary and stressed that he is not seeking an extension of the Iran MoU. Trump also criticized US-ally Oman, saying he does not think the country “behaves very well” and that the US could handle it very easily. Meanwhile, Pakistani journalist Anas Malick reported that an understanding to extend the US-Iran ceasefire under the Islamabad MoU has been reached and agreed in principle. Separately, UKMTO reported an incident in the Strait of Hormuz in which a vessel conducting an outbound transit was struck by an unknown projectile. This morning, Houthi rebels said they used multiple drones to attack an Aramco refinery in Saudi Arabia's Jazan region, although it is unclear if this is referring to a fresh attack or last week’s attack.
• Libya is seeking investment of up to USD 40bln to develop oil resources, according to FT.
• India is reportedly considering cutting its 100% tax on imported sugar to help curb domestic prices, according to Bloomberg.

Trade/Tariffs

• US President Trump and Canadian PM Carney spoke late on Monday after several days of trade negotiations between the countries, according to a Bloomberg reporter citing sources.

Central Banks

• ECB's Lane said inflation will hover around 3% for the rest of the year but it depends on whether there is a resolution to the crisis. Lane added that food inflation is relatively low.

Geopolitics: Iran

• Iranian Parliamentary Speaker Ghalibaf said the Strait of Hormuz will not open until the blockade and oil embargo are lifted. He added that "Iran is ready to inflict a heavier defeat on the enemy than before, in proportion to his actions and encroachments."
• UKMTO said it received a report of an incident in the Strait of Hormuz, where a vessel was struck by an unknown projectile while conducting an outbound transit of the Strait of Hormuz, causing damage to the engine room and crew casualty
• Yemen's Houthis attacked Saudi Aramco's Jazan refinery with drones, according to Saba news citing sources.
• Airstrikes targeted the Abu al-Duhur military airport in eastern Idlib countryside, Syria, with a Jerusalem Post stating that Israeli fighter jets were responsible for the attack on the Abu al-Duhur Airbase in northwest Syria. There were also reports of Israeli warplanes targeted the areas of Mansouri and Deir Saryan in southern Lebanon, while Lebanese media reported intermittent Israeli shelling on the high ground of Jabal al-Rafie on the outskirts of Nabatieh al-Fawqa in southern Lebanon.
• An explosion was reported at the Shaddadi gas pipeline in the outskirts of Hasakah, Syria.
• UAE's Foreign Minister discussed the latest regional developments in a phone call with the Kuwaiti Foreign Minister.
• COSCO Shipping (1919 HK) and CMES have reportedly stopped sending oil tankers through the Strait of Hormuz and Bab al-Mandeb, sources suggest.
• Saudi Aramco resumed oil loadings from inside the Strait of Hormuz last week, Reuters reported.

Geopolitics: Ukraine

• Moscow mayor said Russia shot down 180 drones in the Moscow region overnight.
• Western diplomatic source said an increasing number of European politicians are advocating for a resumption of dialogue with Russia, TASS reported.

Geopolitics: Other

• Russian Foreign Minister Lavrov said Russia and North Korea are fighting to establish a new, righteous world order, according to KCNA.

US Event Calendar

• 8:30 am: Jul Import Price Index MoM, est. 0.1%, prior 0.3%
• 8:30 am: Jul Housing Starts, est. 1345k, prior 1427k
• 8:30 am: Jul P Building Permits, est. 1375k, prior 1374k
• 9:15 am: Industrial Production MoM, est. 0.3%, prior 0.1%
• 9:15 am: Jul Capacity Utilization, est. 76.3%, prior 76.1%
• 10:00 am: Jul Pending Home Sales MoM, est. 0%, prior -5.4%

DB's Jim Reid concludes the overnight wrap

Markets have seen growing weakness over the last 24 hours, with bonds and equities slipping thanks to negative geopolitical headlines from the Middle East. There wasn’t a single catalyst for the declines, but with few signs of the US and Iran coming to any sort of a deal, that meant investors priced in a more extended closure of the Strait of Hormuz. Indeed, Brent crude oil (+2.65%) closed above $90/bbl yesterday for the first time in two weeks, and this morning we’ve seen a further +0.72% rise to $91.52/bbl. So that’s led to pressure across the board, with the S&P 500 (-0.52%) slipping back, and futures are pointing to another -0.32% decline today. Moreover, inflation concerns helped send long-end bond yields up to fresh multi-year highs, with the 30yr Treasury yield (+4.7bps) closing at a post-2007 high of 5.31%, whilst Germany’s 30yr yield (+1.8bps) hit a post-2011 high of 3.74%. And that trend has shown no sign of letting up overnight either, with the 30yr Treasury yield up another +1.0bps to 5.32%.

In terms of the latest from the Middle East, yesterday’s headlines made clear that the US and Iran were still far apart from any sort of deal. For instance, President Trump told reporters he had no interest in extending the 60-day memorandum of understanding agreed in June, which technically expired yesterday, even if it effectively collapsed back in July. He also threatened to bomb Oman if they got in the way of the US, and in a Fox News interview earlier in the day, Trump said there was a back channel with officials from Iran’s Revolutionary Guard, but that he was in “no hurry”. Meanwhile, Iran denied Trump’s assertions of a back channel, saying “There are no talks taking place between IRGC officials and the Americans”. US Energy Secretary Chris Wright also didn’t sound in any rush either for a deal, saying that the US is playing the long game with Iran.

With both sides still far apart, investors grew pessimistic that the Strait of Hormuz would properly reopen any time soon. So that meant Brent crude oil prices (+2.65%) rose to $90.87/bbl by the close, their highest level since late July. And there were sizeable increases further out the oil futures curve, with the 12-month Brent future (+2.00%) jumping to a two-month high of $78.01/bbl. In other words, investors are pricing in a more protracted period of higher oil prices again.

As investor concern mounted about a longer closure for the Strait of Hormuz, that put pressure on fixed income, particularly longer-dated sovereign bonds. In fact, 30yr yields hit multi-year highs across several countries, which showed how the fiscal pressures on governments aren’t going away either. Indeed, in the US, the 30yr Treasury yield (+4.7bps) closed at a post-2007 high of 5.31%, whilst the US 30yr real yield (+5.7bps) hit a post-2008 high of 3.08%. Then in Europe, we also saw Germany’s 30yr yield (+1.8bps) hit a post-2011 high of 3.74%, and France’s 30yr yield (+2.2bps) hit a post-2008 high of 4.87%.

For shorter maturities, the jump in yields wasn’t quite as big, but they also moved consistently higher. The 10yr Treasury yield (+3.0bps) was up to 4.72%, and in Europe, 10yr bund yields (+1.8bps) hit a post-2011 high of 3.22%, whilst the 10yr OAT yield (+2.0bps) hit a post-2008 high of 4.06%. However, there were more limited moves in central bank expectations and for front-end yields, with market pricing for a September Fed rate hike only inching up from 32% to 35%.

For equities, the stagflationary impulse from higher oil prices meant it was a similar story of declines on both sides of the Atlantic. So by the close, the S&P 500 (-0.52%) posted its worst day of August so far, and it would have been worse had it not been for a rebound in chip stocks, as the Philly semiconductor index closed up +1.64% on the day. Otherwise though, the S&P 500 saw the most daily decliners (367) since early July as all major sector groups except energy fell on the day, and the equal-weighted index (-0.92%) also had its worst day in over a month. Over in Europe, markets closed before the weakening fully played out, but the STOXX 600 (-0.22%) still posted a 4th consecutive decline, alongside bigger losses for the DAX (-0.38%) and the CAC 40 (-0.66%).

That negative trend has been clear overnight in Asia, where most of the major indices have lost ground this morning, including the Nikkei (-1.64%), the KOSPI (-0.60%), the Hang Seng (-0.65%), CSI 300 (-0.79%) and the Shanghai Comp (-0.39%). Those moves also follow on from the latest batch of China’s economic data yesterday, which generally surprised on the downside. For instance, retail sales were only up +0.6% year-on-year in July (vs. +1.5% expected), whilst industrial production only grew by +4.5% year-on-year (vs. +5.0% expected). Otherwise, the pressure on long-end bond yields has also continued in Asia, with Japan’s 10yr yields (+1.5bps) at a post-1996 high of 2.92% this morning. Meanwhile in Australia, the 30yr yield (+5.6bps) is at 5.59% this morning, the highest since that maturity was first issued in 2016.

Finally, there wasn’t much data yesterday, although it did generally lean in a hawkish direction and kept up the pressure on bond yields. First, the Empire State manufacturing survey unexpectedly jumped to a 4-year high of 20.6 in August (vs. 10.0 expected). Separately in Canada, the headline CPI increased by more than expected to +3.0% in July (vs. +2.9% expected). Moreover, the core measures were also above consensus, with the median core measure up to +2.0% (vs. +1.9% expected), and the trim core measure at +1.9% (vs. +1.8% expected). So investors dialled up the chance of a rate hike by the Bank of Canada’s December meeting, with the probability rising to 68% on the day, up from 58% on Friday.

Looking at the day ahead, data releases include US industrial production, capacity utilisation, housing starts, building permits, and pending home sales for July. Meanwhile in Europe, there’s the German ZEW survey for August, and the latest UK labour market data. From central banks, we’ll hear from the ECB’s Lane. Finally, today’s earnings releases include Home Depot.

Tyler Durden Tue, 08/18/2026 - 08:30

Uber Eyes 1 Million Daily Drone Deliveries With Zipline Partnership

Authored by Bill Pan via The Epoch Times,

Uber is investing in and partnering with drone-delivery startup Zipline as it bets on growing demand for ultra-fast air delivery of takeout and groceries.

Lucid, Nuro, and Uber unveil a robotaxi during Nvidia Live at CES 2026 ahead of the annual Consumer Electronics Show in Las Vegas, Nevada, on Jan. 5, 2026. Patrick T. Fallon / AFP via Getty Images

Zipline drones will begin making deliveries through the Uber Eats platform in Dallas and Houston by the end of this year, the companies announced Monday.

The service will initially launch in markets where Zipline already operates, with the companies ultimately aiming to expand to "dozens of U.S. cities."

The companies aim to reach 1 million Uber Eats deliveries per day using Zipline drones by the end of 2029.

With Zipline's drones, Uber expects orders to be delivered within five to 10 minutes.

"Our goal is for millions of people to be able to order lunch, dinner, snacks and more through the Uber Eats app and have them delivered by Zipline in minutes," the companies said in a statement.

Uber is also investing an undisclosed amount in Zipline.

Uber Expands Drone Delivery Network

The deal marks Uber's biggest commitment to drone delivery yet. It is also the first time the ride-hailing giant has set a long-term delivery target for the technology.

Uber first tested drone deliveries in 2019 through its aviation division, Uber Elevate, but sold the unit the following year as the company sought to cut costs amid a decline in ridership during the COVID-19 pandemic.

More recently, the company has offered drone deliveries in Dallas through a partnership with Israeli startup Flytrex and has reached an agreement to work with Irish drone operator Manna in Europe.

Uber Eats has also experimented with ground-based delivery robots through partnerships with companies including Serve Robotics and Coco Robotics.

The strategy mirrors Uber's approach to its robotaxi business, where the company has assembled a growing network of partnerships rather than developing all of the technology in-house.

That model has allowed Uber to stay involved in emerging transportation technologies despite selling off its own programs, including Uber Elevate and the Uber Advanced Technologies Group.

Investments have also become a major part of that strategy, with Uber committing more than $10 billion to autonomous vehicle companies and related partners.

The Race to Take Orders to the Skies

Uber is not alone in betting on drones as competition intensifies across the food, grocery, and retail delivery markets.

Uber Eats rival DoorDash has partnered with several drone operators and said in July that it had received air carrier certification from the Federal Aviation Administration, clearing a major regulatory hurdle for launching its own drone delivery program.

Wonder, the parent company of Grubhub, has also partnered with Zipline and plans to begin drone deliveries in Texas next year.

Major retailers are also building their drone delivery infrastructure, betting on autonomous aviation to solve the highly congested, expensive "last-mile" logistics problem.

Walmart has partnered with several drone companies, including Zipline, Flytrex, and Alphabet-owned Wing, to deliver goods by air. Amazon, meanwhile, designs its own aircraft and operates flights completely in-house.

Tyler Durden Tue, 08/18/2026 - 08:05

As Japanese Bond Yields Soar, Unrealized Losses At Life Insurers Hit $200 Billion

With Japanese bonds in freefall every day, pushing yields on 10Y JGBs to a 3 decade high, just shy of 3%...

... the time to pay the piper is fast approaching as unrealized losses on domestic bonds at Japan's major life insurers have soared to 30.86 trillion yen ($194 billion) as of the end of June, up 60% year-on-year, and trillions more since then, revealing the downside of the rising interest rates that have lifted investment income.

The total - which was compiled by Nikkei Asia from the 13 respondents out of 14 major life insurers surveyed - surpassed their unrealized gains on domestic stocks, which were up 48% to 30.03 trillion yen.

The main driver is obviously the one thing that is destroying Japan's entire financial system, rising Japanese government bond yields. Yields on 30-year JGBs, a key investment target for life insurers, climbed to the 3.9% range at the end of June, up about 2.7% points from the end of July 2023, before the combined unrealized gains among these companies flipped to losses.

The upward trend in yields has continued beyond June on expectations of further Bank of Japan rate hikes and concerns about fiscal expansion.

As the Nikkei reports, life insurers traditionally invest in ultralong-term JGBs to prepare for their future obligations to policyholders. In principle, unrealized losses disappear if the bonds are held to maturity. But under certain circumstances, they risk straining finances.

As we discussed last year, if the market value of a bond falls 50% below its acquisition cost, insurers may be required to recognize an impairment loss. Nippon Life Insurance recorded 44 billion yen in impairment losses for the April-June quarter, while Meiji Yasuda Life Insurance booked 25.3 billion yen. Some bonds purchased during the ultralow interest rate environment of the late 2010s have fallen far enough in value to reach the impairment loss threshold.

It gets far worse when instead of holding the worthless paper to maturity, insurers need to sell the bonds before maturity. Life insurers manage assets and liabilities seeking to align the duration of investment assets with the duration of future insurance obligations. When successful, rising interest rates reduce the market value of both assets and liabilities, limiting the net impact on financial strength.

But when assets have longer maturities than liabilities, rising rates can reduce net assets and increase the risk of deteriorating financial health. Insurers then may need to shorten asset duration by selling bonds, turning unrealized losses into realized ones.

Sony Life Insurance's policy lapse and surrender rate in April-June rose 0.2 points year-on-year to 1.4%, partly because a rapid depreciation in the yen prompted more customers to cancel policies denominated in foreign currency. The figure for T&D Financial Life Insurance, which has a strong presence in bank channel sales, climbed 0.88 points to 1.56%.

A surge in policy cancellations represents the greatest concern. As rates rise and stock prices climb, if many customers shift into insurance products or investment trusts offering higher yields, insurers may need to liquidate assets to fund surrender payments. Read: sell those bonds which are supposedly "held to maturity."

Though most insurers think current lapse and surrender levels can be handled with cash on hand, demand trends are difficult to forecast because they are tied closely to interest rate movements.

"Policy cancellation trends require closer monitoring than ever before," said Sadahiko Hayakawa, chief financial officer of Sony Financial Group.

The good news for now is that insurers' earnings remain strong. Core operating profit for the 14 major insurers, a measure of underlying earnings, reached 951.8 billion yen in April-June, up 37% year-on-year, with 12 of the companies reporting profit growth. Higher interest rates increased interest income from bondholdings, while dividend income from equities also rose.

To expand investment returns further, insurers are rotating into higher-yielding bonds, which however is a two-edged sword as those are the bonds who price is falling the fastest... and keeps falling every day. 

Tyler Durden Tue, 08/18/2026 - 07:45

"Absolutely Unprecedented": Diesel Crack Spread Hits Record As Refined-Products Crisis Arrives

Brent and WTI futures remain below $100 a barrel on Tuesday morning, partly suppressed by governments releasing strategic oil reserves into global markets. But the more serious issue is building downstream, where the Russia-Ukraine war, strikes against energy infrastructure, and continued disruptions around the Strait of Hormuz are fueling the refined-products "perfect storm" we have repeatedly warned about.

Oil extended gains this morning, with Brent trading around $91 a barrel after another vessel attack was reported near the Hormuz maritime chokepoint. President Trump also said he had no interest in extending the interim peace agreement with Iran, which expired Monday.

Diesel is now the biggest concern ahead of the Northern Hemisphere harvest. Rising fuel costs threaten to hit farmers, freight operators, and ultimately consumers through higher prices for food and goods. JPMorgan penned a note last week warning that a global food crisis could erupt as soon as next year (read here).

Back to diesel, the squeeze is being compounded by depleted inventories, with US diesel reserves near 23-year lows and European stockpiles approaching levels last seen during the 2022 energy crisis. 

A chart we published overnight went viral after showing the front-month US diesel crack spread (the NYMEX one-month heating-oil/WTI crack spread) hit a record $102 per barrel.

"This is absolutely unprecedented. The industrial economy either grinds to a halt, or consumers are about to be hit with the biggest energy pass-through in history," we noted.

Diesel crack hits record $102. This is absolutely unprecedented.

Industrial economy either grinds to a halt or consumers about to be hit with the biggest energy pass through in history pic.twitter.com/OtAdgrCvb3

— zerohedge (@zerohedge) August 17, 2026

Several Wall Street desks have warned about the unfolding diesel crunch:

• Goldman's Daan Struyven Shows Global Diesel Exports Crashing
• Citi's Anthony Yuen Warns: Global Diesel Inventories "Below 5YR Minimum"
• BofA's Francisco Blanch Warns: "Diesel's Perfect Summer Storm" Unfolding
• Jefferies' Sam Burwell Warns: Hormuz Shock "Manifesting Itself In Cracks, Not Crude"

Notably, diesel prices are rising far faster than crude. SPR releases may be suppressing crude prices right now, but they do little to resolve shortages of refined products. Instead, the releases are pushing emergency crude inventories, particularly in the US, toward dangerously low levels (the US SPR below 300 million barrels), while the downstream fuel shock continues to intensify - a perfect storm indeed. 

Tyler Durden Tue, 08/18/2026 - 07:20

Top Admiral Visits USS Lincoln, Suggests Reports Of Dire Conditions Are Greatly Exaggerated

The top US military commander in the Middle East has personally visited the USS Lincoln carrier, which is currently patrolling the Middle East after having long been engaged in operations against Iran.

US Central Command (CENTCOM) chief, Adm. Brad Cooper, directly inspected the ship amid widespread reports of low morale and extremely challenging conditions amid a record extended deployment.

Screenshot via CENTCOM on X.

But Cooper came away with the opposite conclusions from what the headlines and some lawmakers are saying. After the Saturday visit, Cooper said the Lincoln has "among the lowest number of cases related to mental health" out of 11 active US aircraft carriers.

Included in the litany of problems the ship has faced, reports have alleged that in some instances crew members tried to commit suicide by going overboard. 

He did say mental health is a "priority" on the warship and said that long service at sea was "uniquely challenging and tough".

"I applaud Lincoln's leadership for... stepping up and making mental health and crew resilience a leadership priority," Cooper stated, while also admitting frankly that that "all is not perfect".

The Lincoln departed its San Diego home base on Nov. 21, 2025, on what was supposed to be a seven-month deployment. That deployment is now in its ninth month, but what's far more remarkable is that the Lincoln went more than 200 days without a port call to give sailors a chance to walk on land and unwind away from the somewhat claustrophobic conditions aboard their huge ship.

On Monday, President Trump while speaking to reporters in the Oval Office also downplayed and rejected reports of a crisis on board, saying that the carrier was "beautifully maintained and beautifully taken care of"...

Reporter: Is there enough food on USS Lincoln?

Trump: There is. That was a fake CNN report.

Over the years, we had them out there much longer.

An admiral told me, “I have been on ships much longer than that, sir.” And people on the Lincoln say it’s beautifully taken care of. pic.twitter.com/qzagDUuaX6

— Clash Report (@clashreport) August 17, 2026

This was after the following high level military statement:

In a statement on Friday, Aug. 14, Acting Secretary of the Navy Hung Cao called some media reports about the ship “dishonest” but did say that “a small number of mental health cases were treated” aboard the ship. His statement was the highest-level acknowledgement of mental health incidents onboard the Lincoln.

Also, days ago War Secretary Pete Hegseth called the negative and alarming reports of poor conditions "completely misrepresented". Trump had then on Friday followed his remarks by addressing the over-extended deployment, calling the length of time at sea "not nearly long enough."

Tyler Durden Tue, 08/18/2026 - 06:55

Blasphemy Law Is Back: Retired British Police Officer Fined For Islam Joke

Authored by Steve Watson via Modernity News,

A retired British police officer has been handed a criminal conviction and more than £1,000 in fines for resharing a satirical Facebook meme poking fun at Islam.

Stephen Gray, 65, a former Police officer who served nearly three decades, was found guilty under Section 127 of the Communications Act 2003 of making a "grossly offensive" post.

The case has sparked fresh warnings that blasphemy laws, abolished in England in 2008, are being revived by the back door - but only for one religion.

'It was one joke, not targeted at anybody, pointing out certain parts of Islam.'

Former police officer and foster carer Stephen Gray recounts his experience of being charged for resharing a post criticising Islam, raising questions about a potential backdoor to blasphemy laws. pic.twitter.com/9BMeUigvxC

— GB News (@GBNEWS) August 16, 2026

Gray's first concern when charged was not himself, but the young Irish girl he and his wife had been fostering for six years. "I was initially quite worried because obviously we have to have enhanced DBS checks to foster children," he told The Telegraph.

He added, "These kids have enough to put up with without the fear they may be moving again hanging over their heads." Social services later described the prosecution as "utter rubbish" and reassured the couple it would not affect their fostering.

Gray was reported to Durham Constabulary by a non-Muslim neighbour with whom he had previously had an unrelated disagreement.

He had reshared two images. The first featured a Middle Eastern man alongside the words "time for mass deportation" and "Children in Need," with a caption reading: "12-year-old Mohammed recently arrived at Dover. Please donate to help him move from a three-star to a five-star hotel which has a better halal menu, free wifi and Sky and is nearer to a girls' school."

The district judge ruled this was not grossly offensive because it related to a political issue debated in Parliament.

The second image showed a man in a turban next to a rasher of bacon with the caption: "Fun facts about Bacon! People who eat bacon have a lower chance of marrying a 9-year-old!" That post led to the conviction.

The judge decided it was about religion rather than politics and was therefore "grossly offensive."

Gray has been clear about his intent. "I made a joke, an ironic joke, about Islam. That is all it was at the end of the day. A joke. I certainly never, not for one second, thought it would be deemed abusive."

He added: "I guess some of the posts may have been in bad taste. Some of them may upset one or two people, but I didn't think for one second it would be cast as grossly offensive by the police, the Crown Prosecution Service and by the courts. Not for one second."

Hundreds, if not thousands, of other people had reshared the same material. Gray did not create the images.

The Crown Prosecution Service initially declined to charge him, stating there was no realistic prospect of conviction. The complainant then used the Victims' Right to Review scheme, and the CPS reversed course.

Gray is appealing with the support of the Free Speech Union. His former boss at Cleveland Police was "absolutely gobsmacked." Gray recalled: "Back when I was serving, if I had taken this case to my sergeant or inspector, I would have been on foot beat night shift for the next five years for wasting everybody's time. It wouldn't have got past the front door of the police station."

He now sees a clear pattern. "I just think it's a dangerous road that the Government is going down trying to use the justice system to get us to stop criticising a religion that promotes a lot of things people might not agree with."

Lord Young of Acton, general secretary of the Free Speech Union, put it bluntly: "Prosecuting people for making jokes about Islam, particularly if they contain a kernel of truth, is a new low. No one making a similar joke about Jesus would face prosecution."

Young added, "Blasphemy laws were abolished in England 18 years ago and should not be resurrected by the courts and applied to just one religion."

This is not an isolated incident. It fits a growing pattern of institutional pressure against any criticism of Islam.

Earlier this year, a Christian police community support officer with North Yorkshire Police was driven out of his job after asking basic questions about jihad and Hamas atrocities during a mandatory diversity training session billed as a "safe space."

Luke Salmons was suspended, faced misconduct proceedings, and ultimately resigned under pressure after colleagues reported a book in his locker. The force's own "safe space" invitation to discuss the issues proved hollow the moment scrutiny touched Islam.

Police forces have gone further. South Wales Police instructed officers to log conversations and comments about Islam that go beyond what the force deems "legitimate" discussion.

The Free Speech Union has warned this creates a chilling effect, allowing subjective judgments to be recorded and potentially surface in future enhanced DBS checks.

It is part of a wider push under the Labour government's non-statutory definition of "anti-Muslim hostility," which critics say is being gold-plated by public bodies to police speech.

Schools have not been spared. Multiple Labour-run councils issued guidance telling teachers that children's drawings of prophets, including Jesus or Mohammed, could be considered blasphemous under certain Islamic interpretations.

Art, music, dance and PE have all been flagged for sensitivity to Muslim parental concerns about human figures, instruments and mixed-gender contact.

At the same time, the government has urged schools, councils and workplaces to monitor and report "anti-Muslim hostility," complete with a new tsar-style role to oversee the effort.

The working group that helped shape the government's definition of anti-Muslim hostility has drawn particular scrutiny. Every member has documented links to Islamist organisations, including groups successive governments have refused to engage with because of their extreme positions.

The Free Speech Union's investigation laid out the connections in detail, raising obvious questions about bias in a process meant to define acceptable speech about one faith.

The same machinery has already claimed other victims for online jokes. Lucy Connolly was imprisoned for a post on X after the Southport attacks.

After her release on licence, the government threatened to return her to prison for sharing another satirical comment. Her case, like Gray's, shows how quickly a joke can become a criminal matter when it touches the wrong subjects.

Gray's conviction is the latest demonstration that Britain's justice system now treats criticism of Islam as uniquely toxic. A political meme about immigration hotels was waved through. A joke referencing historical facts about the Prophet Muhammad's marriage was criminalised.

The complainant was not Muslim. The posts were not directed at any individual. Thousands of others shared the same content without consequence. Yet a retired police officer who spent his career upholding the law now has a criminal record for a Facebook reshare.

The Free Speech Union is funding Gray's appeal, scheduled for November, and has instructed leading counsel.

The outcome will test whether English courts are prepared to enforce a selective blasphemy code that Parliament deliberately abolished.

For now, the message to ordinary citizens is clear: some jokes are more equal than others, and the state is watching.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Tue, 08/18/2026 - 06:30

Humanoid War Robots Could Soon Patrol US Southern Border To Combat Weaponized Migrant Flows

Building on our February theme that physical AI and humanoid robots would move beyond factory floors and folding laundry in homes into conflict zones and other high-risk environments, US-based Foundation Robotics is now discussing potential national-security deployments of its Phantom humanoid robot along the southern border.

Fox News reporters spoke with CEO Sankaet Pathak, who said the U.S.-based startup, which develops humanoid robots for industrial and military applications, has already demonstrated the capabilities of its Phantom MK1 robots to the Department of Homeland Security for border deployment.

"We're in conversations with almost all national security government bodies, so Air Force, Navy, Army, DHS," Pathak said. "We continue to have dialogues. We're starting to negotiate contracts and some applications for them."

Pathak said Phantom MK1 is designed to navigate rugged terrain that can be difficult for vehicles, drones and fixed cameras. He said potential deployment missions could center on monitoring remote border areas, inspecting tunnels, and flagging migrant crossings.

"If drones and watchtowers were able to solve for everything, why do we still have humans at the border?" Pathak emphasized.

MACHINES ON A MISSION: A U.S. robotics company says its humanoid robots could soon patrol the southern border — autonomously navigating rugged terrain, detecting people, and flagging potential crossings for human agents 24/7.

Foundation CEO Sankaet Pathak told Fox News Digital… pic.twitter.com/GrCstXNmY5

— Fox News Politics (@foxnewspolitics) August 16, 2026

Pathak said Foundation could begin a limited pilot immediately and potentially undertake a larger deployment within several months.

Yet when Fox News asked a DHS spokesperson about the humanoid robots, the person said there is currently no formal arrangement in place.

"The Department of Homeland Security currently does not have any non-contractual agreements, pilots, or active prime contracts with Foundation," the spokesperson said.

In early March, Foundation co-founder Mike LeBlanc told TIME Magazine that the company is in "very close contact" with DHS regarding possible patrol deployments along the southern border.

LeBlanc prepares to hand a shotgun to a PhantomMattia Balsamini for TIME. Source: TIME

Foundation is already a military-approved vendor and holds government research contracts worth $24 million with the U.S. Army, Navy and Air Force. This suggests that these war bots are very close to being tested in war zones.

In fact, testing humanoid robots in Ukraine, which, remember, is the world's AI weapons laboratory, could be coming much sooner than previously thought. Earlier this year, we outlined that the company sent two Phantom MK1 robots to Ukraine for testing.

By July, several Ukrainian news outlets, including United24 Media, said that its military would begin a grant competition to develop humanoid robots for military use as part of a broader push to automate the front line and reduce battlefield risks for its troops.

We suspect Foundation could receive a portion of the grant, potentially incentivizing the company to send additional robots to Ukraine for testing.

Phantom MK1 robots recently participated in a live-fire training exercise in Las Vegas, Nevada.

If and when Ukrainian forces deploy these systems for testing, the modern battlefield will provide a rapid and unforgiving test of their operational effectiveness. Just imagine the videos that would surface on X, humanoids fightings against FPV drone. 

Back to the southern border, the future vision of securing the border will likely include all categories of drones (latest drone report), humanoid robots, and ground bots that will make the border highly militarized to ensure that no hybrid warfare, such as weaponizing migration flows, can be seen, like what was done over the Biden-Harriss regime years, or more recently, the invasion of the Spanish enclave of Ceuta by military-aged men. 

Tyler Durden Tue, 08/18/2026 - 05:45

Trump Doubles Down On Plans To Make Hormuz Strait A US Territory: "A Great Idea" Summary

• Trump repeats declaration that he'll make Strait of Hormuz a "US territory", calling it "a great idea".
• Iran goes "fully offensive": Tehran threatens escalation if diplomacy fails, after last week's military command reshuffle.
• MoU expires: Iran says the US-Iran agreement is effectively dead & "irrelevant". 
• Trump threatens Oman: Trump warns "we'll bomb the s**t out of them."
• Backchannel denied: Tehran rejects Trump's claim of IRGC communications.

//--> //--> Strait of Hormuz traffic returns to normal by September 30?
Yes 12% · No 89%
View full market & trade on Polymarket

*  *  *

Trump Latest Iran Remarks from Oval

President Trump repeated some of the same old talking points while addressing reporters in the Oval Office on Monday. He asserted that Iran wants to make a deal, but "they're not going to make the kind of deal that I feel is necessary."

"Look, we're in there for one reason: Iran cannot have a nuclear weapon," he said. He also doubled down on a prior declaration that he wants to make the Strait of Hormuz a US territory. He said this is "a great idea" - which in effect dispels the notion that when he said it the first time it was mere hyperbole. This is also amid ongoing claims that the US military has "complete control" over the strait.

🇺🇸Trump just doubled down on plans to declare the Strait of Hormuz a U.S. territory, calling it “a great idea.”

Trump did not detail how the U.S. would claim jurisdiction over the strategic shipping lane between Iran and Oman which carries 20% of the world’s oil.…

— NewsForce (@Newsforce) August 17, 2026 Oil Spikes as Hormuz Developments Continue from Bad to Bad

Oil spiking amid a hodgepodge of more 'bad news' Hormuz headlines, as the Iranians have vowed to go on the 'offensive' amid demands that American forces clear out of the region. Fars is currently reporting Iranian forces have seized a UAE oil tanker in the Strait of Hormuz. 

US Energy Secretary Wright has meanwhile vowed that the US Navy will continue getting better at escorting approved maritime traffic across. He confirmed "we are not fully back to full oil flow in the Middle East," according to the Monday comments.

Oil jumps, though its unclear what the precise catalyst might be...

Iran: Shifting from Defensive to 'Fully Offensive'

This should come as no surprise after the much-publicized military command reshuffle of a week ago, but a top Iranian official has told Reuters that the country is shifting from a defense posture to a "fully offensive" one in its conflict with the United States:

• Iran has decided to shift its policy from defensive to a “fully offensive” one, a senior Iranian official tells Reuters
• Iran has set a deadline of a few weeks for the full implementation of the MoU by the US, the official says
• All Iranian entities will be prepared to escalate tensions in the Strait of Hormuz and the region if diplomacy fails, the official warns
• Iran will not wait for the US to continue the naval blockade indefinitely, the official adds

While bonds and stocks moved on the headline, oil was left little impacted - again perhaps become Tehran had already for days been signaling this new 'offensive' messaging as a policy shift...

Meanwhile, Iran is denying earlier Trump claims to have opened up backchannel communications with the IRGC...

Spokesperson for the Revolutionary Guard to Tasnim: Trump's claims about behind-the-scenes talks with the IRGC are delusions stemming from defeat. There are no talks between IRGC officials and Americans

Based on our information and confirmation from foreign ministry officials,…

— barry with the NED (@bonzerbarry) August 17, 2026

And strangely, there was this development: 

Iranian drones target Barzani's Erbil office. Masrour Barzani stated: "my personal office and the home of the head of the Security and Intelligence Agency were targeted by Iranian drone attacks." No casualties were reported.

This is after Axios reported that Nechirvan was the mediator link to the IRGC backchannel. Here's what Axios said in a Sunday report on these prior, secretive diplomatic efforts:

In mid-May, U.S. negotiators trying to reach a deal with Iran to end the war ran into a problem: They couldn't tell if the people across the table actually spoke for the country's powerful Islamic Revolutionary Guard Corps (IRGC).

So Trump administration officials did something unconventional — they went around Iran's negotiators and reached out directly to IRGC leadership. The person they tapped for the backchannel was Nechirvan Barzani, the president of the Kurdistan region in Iraq, who had something very few others do: the trust of both U.S. and IRGC leaders.

Trump Threatens to Bomb Oman if it Gets in Way

President Trump has issued some fresh Monday remarks on Iran, after a weekend where he was relatively quiet on the conflict he launched nearly six months ago, which has long been the central controversial decision made as Commander-in-Chief, threatening to define his whole second term. In a short interview with Fox News reporter Trey Yingst, who frequently reports from Jerusalem and the Middle East, Trump threatened to bomb Oman if the Gulf country "gets in the way" of US efforts to negotiate and strike a favorable peace deal with Iran.

"I asked the president about... parallel talks that are taking place between Iran and Oman about control of the Strait of Hormuz," Yingst introduced. Trump then responded: “if Oman gets in the way [of US control in the Strait of Hormuz], we'll bomb the s**t out of them."

But already, Oman and Iran have been hammering out a nearly finalized Hormuz Strait deal, which essentially cuts the United States out of negotiations and management of the vital energy transit waterway. The deal is widely seen as ceding to Tehran de facto control of the strait, and thus also giving the Iranians major continued leverage in the ongoing standoff and conflict with Washington.

The timing of Trump's remarks are further interesting given that on the same day, 60-day window established in the Memorandum of Understanding (MoU) inked between the US and Iran in June has finally expired.

Iran's Foreign Ministry on Monday made clear its position that the deadline was "irrelevant" anyway given that talks never began as the US resumed hostilities. Spokesman Esmaeil Baqaei said that under the MoU, the ceasefire window intended to give the two sides time to discuss "the nuclear issue" and "the lifting of sanctions"; however he charged the US with violating the terms and thus destroying the chance for talks.

Trump: Bachchannel with IRGC Open, Which Iran Then Denies

But despite that the MoU will now go down as another failed opportunity, President Trump surprisingly raised another avenue, telling Fox that there is a backchannel with the Iranian Revolutionary Guard Corps (IRGC) officials. The IRGC of course represents a 'hardline' aspect to Iranian governance and military command structure, and so it's surprising that this would be Trump's alleged backchannel. To be expected, Tehran has been quick to deny this on Monday.

Trump asserted that Iran should raise "the white flag of surrender" - but that he has "no time schedule" and is in "no hurry" to make a deal. He noted his observation that the Iranian's are "good poker players, but they're dying," said Trump.

In the interview the president was also asked about widespread reports that the Pentagon is running out of missiles - of both defensive interceptor and offensive variety - due to the Iran and Ukraine wars:

Regarding US munitions used against Iran, Trump said that what has been used so far against Iran "is peanuts."

Trump added that while the US has many mid-level weapons, many of the more advanced weapons, including air-defense systems, were "given away" to Ukraine by former US President Joe Biden.

Trump separately on Monday reiterated the following warning on nuclear weapons in fresh Truth Social Post:

Trump Admin 'Very Lucky Oil Prices Haven't Ballooned'

In the meantime there continues to be nothing but bad options for the administration. Tehran will seek to bleed, pressure, and humiliate Trump going into the November midterms. Iran wants global economic and energy pain to come back and bite Americans, and thus sink Republicans in Congressional elections.

Joey Hood, former acting director of the Office of Iranian Affairs at the US State Department, has pointed out that Trump has encouraged Americans to see higher prices as "a very small tax in exchange for making sure that Iran doesn’t get a nuclear weapon."

Hood underscored, "But I don’t think any of those objectives have really been reached." He explained, "The Trump administration is very lucky that oil prices haven't ballooned, because countries around the world have taken measures to try to absorb the shock. There are also still ships getting through the strait, perhaps by turning off their transponders and passing through undetected."

The Iranians have been signaling that they have moved from a defensive posture to an offensive one, which they warn will be more aggressive in dealing with Washington action and provocation. 

Tyler Durden Tue, 08/18/2026 - 05:44

If Other Countries Give Fewer Shots, Why Can't We Ask Why?

Authored by Jack Hellner via AmericanThinker.com,

By age 18, a child in the United States can receive roughly 30 to 75 total vaccine doses if they follow standard schedules and get annual flu shots. Fewer shots are needed because vaccines are combined.

By comparison, in Germany, the Robert Koch Institute (via the Standing Committee on Vaccination, STIKO) recommends routine protection against about 12 to 15 infectious diseases for children. Because Germany relies heavily on multi-component combination shots (like the 6-in-1 hexavalent vaccine), children receive roughly 11 to 14 actual physical injections.

Elsewhere in Europe, in England, children receive around 20 to 25 individual vaccine doses from birth to age 14, delivered via roughly 14 to 16 actual needle injections.

Similarly, under Japan’s routine immunization program, children receive around 20 to 22 individual injection shots.

And in Spain, children receive around 15 to 18 individual injection shots from birth through adolescence under the official public health system.

These comparisons raise some obvious questions.

Doesn’t it look like children in the United States get more shots today, and there would be a valid reason to recommend fewer?

Do children in countries with fewer shots have worse health results?

Do other countries ignore science when they have fewer shots?

Wouldn’t it be nice if the media were curious instead of just repeating talking points to trash President Donald Trump?

And vaccines aren’t the only area of health care where such questions should be asked.

Obamacare is one of the worst and most costly bills ever passed, yet the media and other Democrats still falsely claim that it makes health care more affordable.

If Democrats just wanted to cover the poor and those at high risk, they would have just expanded Medicaid and high-risk pools instead of destroying the whole system.

They never wanted affordable care. They wanted government-controlled care.

Tyler Durden Tue, 08/18/2026 - 05:00

'Do What Israel Tells You!' - Graffiti On USAF Jet Suggests Troops Think War Isn't For America

It only took two weeks of fighting for a majority of polled Americans to conclude that the war on Iran benefits Israel more than the United States. If comments from a prominent, former Navy SEAL and graffiti written in the dust of a US Air Force jet in the Middle East are any indication, many American service members are convinced their participation in the war only serves the agenda of the State of Israel and its prime minister, Benjamin Netanyahu.  

On Sunday, Quincy Institute for Responsible Statecraft executive VP Trita Parsi posted a photo that he said was sent to him "from the field" showing temporary graffiti one or more service members had written in the dust of a military aircraft: 

"Do what Israel tells you to!" Graffiti scrawled on a US military aircraft flap points to disbelief in the supposed rationale for a US war on Iran (via Trita Parsi)

Some messages on what looks like a Boeing KC-135R Stratotanker satirically embrace the idea that American service members should be enthusiastic about serving Israel: 

• "Be a good goy and do what Israel tells you to!!!" 
• "I LOVE ISRAEL. I AM A GOOD GOYIM." 
• "BiBi's Cucks" 

Some clarifications are in order. "Bibi" is a nickname used by Netanyahu, and "cuck" refers to weak men who submit to other men's domination. "Goy" and "goyim" are, respectively, singular and plural Hebrew nouns used to refer to non-Jews. Those two words aren't inherently derogatory toward non-Jews. However, like other labels for people, they can be used derisively or as an "outsider label" depending on the context. For example, in an email conversation with AI scientist Roger Schank, convicted sex-criminal Jeffrey Epstein wrote, "This is the way the jew [sic] make money… let the goyim deal in the real world.”

Epstein made an appearance on the dusty wing flap too. Reflecting a widespread but not-yet-proven theory that Israel coerced Trump into starting a war on Iran by threatening to release damning information obtained by Epstein, one of the messages repeats a common play on words that turns US "Operation Epic Fury" into "Operation Epstein Fury." 

Another message mocks the Trump administration's recurring claims that a deal to end the five-month-old war and open the Strait of Hormuz is imminent: "Peace Deal #64 Incoming... ALL THIS FOR THE HOLY LAND." Another mocks the surveillance state that's rising at home while service members who are sworn to defend the Constitution are sent overseas for an unconstitutional war launched on false premises: "I love Flock Cameras."  

As this is written, mainstream media isn't touching the story with a ten-foot-pole, despite the sound reputation of Parsi, who has vouched for its authenticity. The media silence about the messages has thus far relieved the Pentagon from having to issue a statement about them. If it does, we can expect the DOD to claim the graffiti is unrepresentative of how most US service members feel.

Parsi says a service member told him that journalists have no idea how low morale is. "What people in the media don't understand when they compare past conflicts to this one, is this operation has no morale behind it," the military man told Parsi. "That makes a world of difference to service members deployed to undesirable locations indefinitely."

In an interview with Tucker Carlson last month, podcaster and former Navy SEAL Shawn Ryan gave some blunt insights into similar feelings among special operators still on active duty:

"I just had some buddies leave and everybody knows what this is. Everybody knows they're fighting for Israel. It's a joke. This is not me saying this, this is them. This is the guys that are gonna go over there in Tier 1, Tier 2 units that are joking around, saying 'this isn't even for us.'

Throughout history, that's not a winning strategy. If they don't believe in what they're potentially going to do...and they know it's not for the United States, it's for a foreign country --- like, the fight's out of the dog, buddy...They know it's not for us. They're not defending our country."

Ryan said he'd just hosted a pre-deployment party for an operator, who was fixated on the grim reality of what service in the war on Iran is really about. "That's all he was talking about. And it's fucking sad...like, why don't you just get out, man?" 

Shawn Ryan just said the quiet part out loud on Tucker:
“Everybody knows they’re fighting for Israel. It’s a joke.”

Active Tier 1 and Tier 2 guys are openly joking: “Yeah… this isn’t even for us.”

“They know it’s not for the United States. It’s for a foreign country.”

“They… pic.twitter.com/sJN20gUJ0b

— Defiant Ghost (@TheDefiantGhost) July 24, 2026

Thanks to reporting on the extent to which the Israeli government went to sell Trump on breaking his campaign promise to be a "peace president," it's been increasingly common to hear the war being characterized as a "war for Israel." Having convinced America to attack its chief regional rival -- in a war that has killed at least 18 service members and wounded more than 600 others -- Israel is now abstaining from direct participation.

As far-right finance minister Bezalel Smotrich said last month, “The State of Israel has no interest in joining the contained confrontation between Iran and the United States. The current situation is the best one for us.”

Tyler Durden Tue, 08/18/2026 - 04:15

Meta Flags Migration Searches... Then Offers UN Asylum Help

Via Remix News,

Meta’s Facebook and Instagram platforms have begun displaying targeted warning messages to users searching for news or information related to mass immigration, including terms such as “Ceuta.”

The prompts caution users to “be careful when searching for migration info” and include a prominent link or button offering “help with moving to a new country.”

🌍🔴BREAKING: Facebook is now displaying a message warning users to be "careful when searching for migration info" when they search for news related to mass immigration, including keywords like "Ceuta."

If users click on the new link, they will be directed to a page that offers… pic.twitter.com/EherEJiMJX

— Remix News & Views (@RMXnews) August 17, 2026

Clicking through takes users to a Meta Help Center page titled “Help is available if you want to move to a new country.” That page, created in consultation with experts from the International Organization for Migration (IOM) and the Organization for Security and Co-operation in Europe (OSCE), provides tips and guidance to help migrants enter Europe and other states.

The site encourages regular migration, compliant with the laws of origin, transit, and destination countries, compared to illegal migration, which it describes as dangerous and likely to expose people to violence, exploitation, and abuse.

The resource further directs users to the UNHCR website for information on asylum procedures, resettlement options for recognized refugees, and family reunification. These programs are fueling mass immigration into Europe and North America, often through legal channels, which offer a significantly larger demographic threat than illegal channels.

It also references IOM services and, in related materials and app descriptions circulating with the prompts, points toward the IOM’s MigApp. That mobile application is officially branded by the UN migration agency as a tool for “empowering migrants,” offering information on visas, health regulations, risks, money transfers, document storage, and access to IOM programs.

The feature appears to have rolled out recently and has drawn attention amid a surge of irregular migrant crossings into the Spanish enclave of Ceuta. In late July 2026, tens of thousands of people attempted to enter Ceuta by swimming or scaling border fences, with reports of dozens of deaths.

Investigations showed that many of the attempts were coordinated through large public Facebook groups that shared maps, distances, equipment recommendations, and calls for additional crossings. Meta removed multiple groups after media reports, stating it monitors the situation in real time and removes content that facilitates human smuggling.

Critics argue that Meta’s messaging goes beyond safety warnings and actively steers users, potentially including those researching or considering irregular routes, toward UN institutions that support asylum claims and migrant empowerment. Fox News correspondent Bill Melugin highlighted screenshots of the Instagram interstitial, noting that the “get migration info” pathway leads directly to UN resources for asylum seekers and the empowering-migrants app.

Dan Lyman wrote on X that “journalists in Europe have noticed this ‘guide’ when conducting searches on Instagram for ‘Ceuta.'”

Lyman further notes that a reporter told him, “It’s a guidebook to migration when people are searching for illegal immigration.”

Journalists in Europe have noticed this “guide” when conducting searches on Instagram for “Ceuta.”

“It’s a guidebook to migration when people are searching illegal immigration,” a reporter told me.

This is brand new.

A prompt pops-up with a query followed by a detailed… https://t.co/RXPd4RqQWb pic.twitter.com/GMsChgnZkh

— Wid Lyman (@Wid_Lyman) August 16, 2026

The EU knows that images like Ceuta are a boon to right-wing parties. For those seeking to come to Europe, there are many doors open. This new prompt from Meta may serve as a guidebook for mass immigration through the legal channels the EU desires.

Read more here...

Tyler Durden Tue, 08/18/2026 - 03:30

"Generates A Number Of Risks": UBS Warns German NatGas Storage Levels Alarmingly Below Seasonal Norms

Following up on our "Winter Is Coming: Europe Faces Twin Diesel And NatGas Crunch" note earlier this month, which focused on Europe as a whole, UBS analysts focused on Germany's natural gas inventories Monday morning and warned that levels are alarmingly low for this time of year, raising the risk of elevated prices and a renewed supply crunch if the Northern Hemisphere experiences a severe winter.

Simon Penn, a London-based UBS macro strategist, wrote earlier today that Germany's NatGas storage is just 48% full, compared with 65% a year ago and 75% during the 2022 energy crisis. 

We would go a step further: inventories are now at their lowest level for this time of year in 17 years.

Penn added more color:

Economist Felix Huefner sees Germany hitting 65% in November, compared to the government target of 80% and the EU's target of 90%. This generates a number of risks. 

A surge in demand and hence gas prices if Germany attempts to achieve its targets; increased pressure on Germany's fiscal position if the government needs to use Trading Hub Europe (THE) to replenish stocks; pressures elsewhere in Europe as German demand crowds out other national buyers; Germany's regasification facilities are limited which means even if it can find LNG supply, it can't necessarily convert that to stored gas. Hence, a gas shortage could ensue late winter anyway. 

The ECB estimates that a 10% increase in wholesale gas prices adds 0.6pp to Eurozone headline inflation. In addition, all that is likely to place downward pressure on German GDP, which is already threatened by the consequences of a near-dry Rhine river. There is now a mere 10cm of navigable depth at the Kaub pinch point - in February it was 400cm and a year ago 200cm. Cargo barges are down to 10-20% of capacity to stay afloat.

Circling back to our Aug. 7 "Winter Is Coming" note, we warned that it is not just a global diesel crunch keeping Goldman's Samantha Dart up at night. NatGas is another mounting concern.

Continued disruption through the Strait of Hormuz, compounded by historically low Rhine River levels, is slowing Europe's effort to rebuild NatGas stockpiles. That risk is now materializing in the inventory data.

Here is where Europe stands in terms of NatGas storage:

At this point, Europeans had better hope that a strong El Niño would produce relatively mild weather. Otherwise, the continent could face a cold and extremely expensive winter.

Tyler Durden Tue, 08/18/2026 - 02:45

Europe's Looming Existential Crisis

Authored by Kenneth Timmerman via American Greatness,

Americans pay little attention to Europe, other than to sneer at the Euro-elites and bemoan the fecklessness of European leaders.

I am guilty of both sins. Mea culpa.

But I am also aware of the coming existential crisis facing Europe as a whole and the European Union quite specifically.

It comes in several flavors, and all of them are bitter.

First is the shock and embarrassment posed by the influx of 72,000 North African Muslim wannabe migrants into Ceuta, one of two tiny Spanish enclaves in Morocco, just miles away from the Spanish mainland near Gibraltar.

The inability—or unwillingness—of the Spanish authorities to repulse them has provoked a Europe-wide reaction, prompting Italy’s center-right prime minister, Giorgia Meloni, to impose passport controls on visitors from Spain for the first time since the Schengen accords of 1995 created a “borderless” European space.

Spain retaliated last week, imposing controls of its own on visitors from Italy.

This week Meloni teamed up with her center-left Danish counterpart, Mette Frederiksen, to jointly condemn uncontrolled migration.

“We are both proud of Europe’s Christian cultural heritage and want to protect it,” they said on Monday. “We expect those who come to our countries and choose to make Europe their home to respect our values and not seek to impose ways of life on us that we do not share.”

Meloni drafted a letter to European Commission President Ursula von der Leyen condemning lax EU immigration policies, which was joined by Frederiksen and 21 EU leaders.

Immigration has been a long-simmering issue since German Chancellor Angela Merkel opened the floodgates to hundreds of thousands of Syrian “refugees” in 2015. The Ceuta stampede is just the latest chapter.

Fabrice Leggeri, a Frenchman who was executive director of the EU Border and Coast Guard Agency from 2015 to 2022, fought tooth and nail to standardize EU immigration procedures and to transform his bureaucratic backwater into a real law enforcement agency.

He was stymied by the European Commissioner in charge of Home Affairs, Ylva Johansson of Sweden. “Don’t worry,” she said. “You don’t need guns and uniforms because migrants come in search of love. Europe is an aging continent, so whether you like it or not, it is your job to welcome migrants.”

Next comes EU enlargement.

Standing at the gates to join the EU’s 27 member states are tiny Montenegro and Albania. Then comes Iceland, should its citizens approve a resumption of EU membership talks in an upcoming referendum.

While only Albania, which is predominantly Muslim, is controversial, their accession could open the door to membership talks with Ukraine and Serbia.

Ukraine would require a peace deal with Russia, which would be less likely should Ukraine be rewarded with EU membership. Serbia, a Russian ally and gateway to the Russian economy, poses its own problems.

And finally, there is the whole question of democracy and freedom.

EU citizens rail incessantly over the often ridiculous regulations enacted by the unelected bureaucrats of the European Commission that affect their daily lives.

Many of these are motivated by Europe’s powerful “Green” parties and lobbyists. Others stem from the left-wing, anti-capitalist, anti-farmer bias of the Eurocrats.

One case in point: the reintroduction of wolves onto agricultural lands where the predators had been eradicated generations ago. Today, the wolf packs are protected as endangered species even as they devastate sheep herds from Sweden to southern Italy.

I know farmers who brave the authorities and secretly hunt down wolves endangering their livelihoods. They operate as a veritable underground resistance movement, communicating using coded texts, always watchful of the police.

It’s a running joke that a young Swedish girl could get gang-raped by Syrian immigrants, and the police wouldn’t lift a finger. But if a farmer got caught killing a wolf, they would exhaust every investigative and prosecutorial resource to put him away for years.

European Commission President Ursula von der Leyen is certainly aware of the dissenters among the European Parliament, mainly from the populist or center-right parties.

But instead of accommodating them, she is attempting to reinforce the powers of the unelected Commission by doing away with the existing rule of unanimity when it comes to foreign policy decisions.

For years, Hungarian leader Viktor Orbán vetoed European Commission policies that invariably criticized Israel, supported the Palestinians, or criticized the United States.

His election loss only emboldened Ms. von der Leyen, who frequently clashed with Orbán personally and in public.

Now she wants to allow a simple majority of member states to approve foreign policy dictates, a shift that would essentially create the “tyranny of the majority” America’s founders warned about 250 years ago.

Former Belgian Prime Minister and European Council President Charles Michel is scathing in his criticism of von der Leyen. “Today, the Commission is trying to take control. That’s not in line with the [EU] treaty,” he told a Belgian magazine in April. “There is super authoritarian governance.”

Much but not all of those new powers came during the COVID years and in response to the war in Ukraine. But the anti-democratic gene runs deep among the Eurocrats.

Former Czech President and Prime Minister Václav Klaus lived through decades of Soviet Communism imposed on his country after World War II. Already in 2009, he was warning about the lack of democratic institutions within the EU.

“The present decision-making system of the European Union is different from a classic parliamentary democracy, tested and proven by history… Here, only one single alternative is being promoted, and those who dare think about a different option are labelled as enemies of European integration.

“Not so long ago, in our part of Europe we lived in a political system that permitted no alternatives and therefore also no parliamentary opposition. It was through this experience that we learned the bitter lesson that with no opposition, there is no freedom. That is why political alternatives must exist.”

Europe and the EU are at a crossroads.

Down one road, Europe will become increasingly authoritarian and increasingly centralized, while its founding cultures will be increasingly marginalized and demeaned in favor of Muslim immigration and multiculturalism. These were the faults that led to Brexit, Britain’s withdrawal from the EU.

Down another road, Europe will return to its roots, celebrate its diverse cultures and its Christian and Jewish heritage, and honor the wishes of its member states and their people.

Count me skeptical, but I don’t see that democratic alternative on the horizon, at least not yet.

Tyler Durden Tue, 08/18/2026 - 02:00

What's Behind Trump's Unexpected Favor To Kim Jong Un?

Authored by Andrew Korybko,

He might be flirting with a radical policy recalibration even if he soon changes his mind...

Trump unexpectedly announced that the US will “substantially reduce” its participation in the annual Ulchi Freedom Shield large-scale joint military drills with South Korea that he was apparently unaware of till just recently and which began this week. He described his decision as being “Based on my very good relationship with Kim Jong Un” and aimed at not “send[ing] a signal that is totally inappropriate and hostile”. He also complained about its costs and South Korea’s refusal to help the US fight Iran.

Trump’s favor to Kim was unexpected because he mentioned North Korea alongside Russia, China, and Iran as “US adversaries” just last month who have the ability to manipulate US elections. His Under Secretary of War Elbridge Colby was also in Southeast Asia in early August, where he was replicating the NATO 3.0 concept through what can be called AUKUS+. While it’s mainly aimed at containing China, fearmongering about North Korea could raise its appeal among some South Koreans and Japanese.

On that topic, those two states are US mutual defense allies, and they share similar threat perceptions of China and North Korea. They’re also rapidly militarizing, with South Korea planning to build its first nuclear submarine with American assistance and Japan considering abandoning its Three Non-Nuclear Principles, both of which have heightened regional tensions to the US’ divide-and-rule benefit. The same goes for the latest Russian-Japanese tensions over the Southern Kurils in which the US backs Japan.

It was therefore completely unexpected that Trump would do Kim a favor as significant as “substantially reducing” the US’ participation in its annual large-scale joint military drills with South Korea since this goes against all of the abovementioned policies. While only he can account for his reasons, and it’s possible that he simply felt like it and there’s nothing deeper, it can’t be ruled out that he has some plan in mind. His South Korean counterpart’s recent call to resume talks with the North could provide a hint.

Trump might thus be considering the resumption of his own talks with Kim, whether bilaterally like during his first term and/or somehow connected with his “Board of Peace” initiative, the motivation of which could be a blend of personal and geostrategic calculations. As regards the first, he might want to cement his legacy as a “president of peace” like he’s previously described himself as while also distracting from the political-military debacle of the Third Gulf War that he initiated earlier this year.

On the geostrategic front, Trump might fear that Russia, North Korea, and China could strengthen their military-security ties to the point of a de facto alliance in the face of the challenge that AUKUS+ poses to them all, which could risk World War III by miscalculation if North Korea carries out more nuclear and/or missile tests amidst worsening regional tensions. Essentially, the speculative resumption of Trump-Kim talks could therefore be for escalation-control purposes, though only if they’re successful.

It’s admittedly premature to analyze anything beyond what was already mentioned in this piece, and even that which was written is reasonable conjecture, but it’s nevertheless notable that Trump unexpectedly did such a significant favor for Kim in spite of the rising regional tensions that the US is responsible for. After all, this single move goes against all of the US’ policies in Northeast Asia, so it’s not far-fetched that he might be flirting with a radical policy recalibration even if he soon changes his mind.

Tyler Durden Mon, 08/17/2026 - 23:50

WSJ Catches Up, Discovers AI's Off-Balance Sheet Liabilities Are $3 Trillion And Growing $1.2 Trillion Per Quarter

More than two months ago, long before most Wall Street analysts had any clue that the bulk of the AI buildout commitments were diligently hidden in various off-balance sheet SPVs and other (perfectly legal) accounting gimmicks, we wrote a lengthy article detailing just that, and explaining why far beyond the $1 trillion (and rapidly rising) in annual plain vanilla capex -- all of which now has to be funded through debt issuance since free cash flow across the hyperscaler universe is negative for the foreseeable future (if not forever) -- which most pundits obsess over daily...

... the real risk was in the "The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle."

The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle https://t.co/2IAxYrTXjL

— zerohedge (@zerohedge) June 12, 2026

We followed up on this critical topic after the latest batch of hyperscaler earnings in late July, which revealed that the nearly $2 trillion in spending commitments had exploded in the second quarter, with just GOOGL and META north of $1.5 trillion, which prompted us to conclude that "across all hypers, off BS commitments are now $3+ trillion, double in one quarter."

*MICROSOFT: LEASES THAT HADN'T COMMENCED $329.1B AS OF JUNE 30

we will be updating the off balance sheet obligations/debt for Q2 soon. It will probably rise by $1TN+ to $3TN.

— zerohedge (@zerohedge) July 29, 2026

The SPV bubble is batshit insane

GOOGL is $826BN and now Meta said it has already committed almost $700 billion in future AI spending (BBG).

Across all hypers, off BS commitments are now $3+ trillion, double in one quarter.
GLTA https://t.co/HyV9ZGgFu5

— zerohedge (@zerohedge) July 30, 2026

Many, traditionally those who had no idea what we were talking about or the implications of the above findings, took the conventional route and either mocked or slighted what we had found. 

But not everyone: first it was Nvidia which, scrambling to distance itself from the circular financings that were meant to fund precisely these kinds of gargantuan off balance sheet SPVs, unveiled its $500 billion arrangement with a handful of private credit firms (an arrangement that was nothing new, as Nvidia had already done just that particular deal on numerous occasions, and it merely formalized it in the form of an open-ended MOU).

Second and more important, two months after our first warnings, the WSJ finally caught up, and in an article over the weekend titled "Why Big Tech’s AI Spending Is $3 Trillion Higher Than It Seems", it confirmed everything we have been reporting since early June.

Not to put too fine a point on it, but WSJ authors Rudegeair and Santilli echoed everything we said in our original report more than two months ago, to wit: 

Each quarter, big tech companies disclose their massive capital expenditures on artificial-intelligence infrastructure, from data centers to chips. But those figures don’t come close to expressing the full extent of future spending to which Google parent Alphabet, Meta Platforms, Oracle and many others have committed. That is because a huge swath of their coming financial obligations aren’t reflected on their balance sheets.

Nine top tech companies had some $3 trillion of off-balance-sheet commitments mostly related to AI, according to a Wall Street Journal analysis of footnotes in their most recent securities filings. Those obligations are growing faster than traditional “capex,” which totaled about $600 billion over the past year they reported, and were about triple what the companies owe under their outstanding leases and long-term borrowings.

Back in June, we showed this staggering surge in off balance sheet purchase commitment as follows. Needless to say, the latest number is substantially higher.

And this is how the WSJ compared side by side the on (capex) vs off balance sheet obligations at the 6 hyperscalers. Needless to say, the management teams at the big AI spenders are doing everything in their power to cover up just how spectacularly massive their true spending plans are.

The WSJ also takes a look at the off B/S SPVs we have been discussing ever since we explained back in January why Meta's Beignet funding model will be imitated by all of its peers throughout 2026 and onward.

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Of course, that's precisely what happened and this is how the WSJ lays out the funding of Meta’s gigantic “Hyperion” data-center project in Louisiana, which is the size of about 1,700 football fields, and which "helps explain how big obligations wind up off tech companies’ balance sheets."

Meta initially agreed to lease Hyperion for a four-year term starting in 2029, with options to renew for up to 20 years. It guaranteed that it would make bondholders whole if it doesn’t stay the entire two decades. The company doesn’t think payments under that guarantee are probable, so it hasn’t recorded any liability on its balance sheet.

In accordance with accounting rules, Meta’s Hyperion lease obligations will remain off balance sheet until it starts paying rent. It said its aggregate initial lease commitment is about $12.3 billion. Meta disclosed $347 billion in total obligations for leases that haven’t kicked in yet, including for Hyperion, as of June.

This is the WSJ's version of our graphic from 8 months ago: 

Remember what we said about expecting "hundreds of these in 2026?" Apparently it came as a surprise to the WSJ, which writes that "across the companies the Journal analyzed, promises of payments under these uncommenced leases totaled $1.2 trillion in off-balance–sheet obligations, or about four times more than what was disclosed a year earlier. In addition to Meta, the Journal reviewed commitments for Alphabet, Amazon.com, Microsoft, Oracle, Nvidia, Broadcom, SpaceX and Advanced Micro Devices."

Of course, as we explained two months ago, the uncommenced leases are just a part of the off B/S liabilities. There's much more: 

"Data centers get stuffed with a lot of hardware, including the Nvidia chips that are used to train and run models and memory chips that store information. To buy all that, companies sign long-term contractual agreements well in advance to lock in production from their suppliers."

... which is why Nvidia has the most to lose if funding deals that enable the AI bubble aren't in place, which is precisely why the company rushed and forced the various private credit firms to deliver the $500 billion deal announced last week. Putting a number to it: 

"Those and other purchase obligations at the companies the Journal examined stand at a whopping $1.9 trillion. Under accounting rules, purchase commitments typically remain off balance sheet until a product or service is delivered."

The uncommenced leases and purchase commitments are the bulk of the off balance sheet "ticking time bomb" we discussed in June. Only then it was $1.8 trillion. It has since grown by 50% to $3 trillion.... in two months! And this is how the WSJ redid another one of our June charts:

What happens next depends very much on whether or is an optimist... or not.

For the former, the WSJ says that "there are reasons to believe tech companies will make good on all their obligations. Optimists see the skyrocketing demand for AI tools—which has lifted the stock market and led to shortages of key hardware—as a proof point that demand is going to be strong for years, and the money to pay off all these bills will be rolling in."

As for the others, well the problems are only starting. First, this unprecedented explosion in off balance sheet liabilities in "a worrying sign that some tech companies that once seemed to have fortress balance sheets have needed to tap the capital markets frequently."

Alphabet and Amazon recently posted results showing negative free cash flow, meaning their capital spending exceeded the cash they brought in from operating their businesses."

And that is before considering the implications of trillions in off-balance–sheet commitments. Whether or not the revenues ever arrive, purchase commitments and signed leases can’t be canceled, for the most part. 

The worst case scenarios is that these tech giants companies, which until recently had pristine balance sheets will be paying an expensive tab for infrastructure that they can’t profitably use "if things go wrong." These obligations could also lead increasingly indebted companies to have to borrow even more.

One way such a catastrophic scenario may happen, is if Chinese open-weight models accelerate their market share grab by dramatically undercutting the token prices of frontier models (as they have been doing), and lead to a collapse in hyperscaler profits as compute creation shifts to China and its far cheaper chips, not to mention far more abundant sources of cheap energy... which is precisely what is happening right now, with token prices in historic free fall, crashing more than 50% in just the past few weeks as Chinese open-models unleash a historic race to the bottom.

And since the entire WSJ is effectively re-print of what we said in early June, we will leave readers with our conclusion from then as it is just as accurate today as it was two months ago (and $1.2 trillion less in off balance sheet obligations).

Vendor financing and repurchase-style arrangements mean a single counterparty's stress can propagate through several balance sheets at once. Think of it as rehypothecated leverage. Concentration compounds it: the >$2tn of remaining performance obligations across major AI players is built on a handful of very large, long-duration contracts, so the backlog that justifies the spending is also a concentrated counterparty exposure.

The off-balance-sheet items aren't fraudulent or even unusual accounting — they're mostly standard treatment. The hazard is timing and visibility, and it shows up in three deferred effects:

Capex is being committed ahead of the revenue and free cash flow meant to support it; capex revisions have run well ahead of sales and FCF revisions. The depreciation from all this spending is largely still deferred, rising construction-in-progress balances (ORCL ~+200%, META ~+90% YoY) mean today's margins haven't yet absorbed the expense already locked in. And when it does land, cumulative depreciation for MSFT, ORCL, META, and GOOGL could exceed $520bn over three years, pushing depreciation as a share of revenue sharply higher (ORCL potentially 7%→28%, META 9%→19% by FY28). To hold margins, every other cost line has to fall — which only works if sales rise to match, and so far they haven't kept pace.

Even a careful analyst can't fully size the exposure, because classification and disclosure are inconsistent. Whether a compute-capacity deal even counts as a lease turns on judgment calls (does the contract specify a particular GPU/rack, who controls the workloads, etc.). Disclosure varies accordingly: Nvidia quantified $30bn of cloud-service commitments and Oracle $10bn, while Meta declined to quantify the cloud-capacity portion of its $238bn in commitments. That inconsistency means any cross-company comparison of "true" leverage rests on differing materiality judgments — so the aggregate numbers, large as they are, are themselves uncertain.

The good news is that, for now, the risks aren't an imminent solvency problem, but a set of timing and disclosure mismatches - a deferred depreciation wall, capex running ahead of monetization, leverage migrating into the supplier/private-credit layer, and classification judgments that make true capital intensity hard to compare across companies. For their part, hyperscalers have taken advantage of the current moment of market euphoria to raise as much capital as they can, aware that the window will eventually shut. The question is when sentiment turns, and when all these funding conduits are shut, will there be enough funding to sustain the AI revolution for the foreseeable future. Of course, this question becomes moot if demand shifts, and instead of buying the latest and greatest offering from Anthropic or OpenAI for a stratospheric number of tokens, consumers and enterprises turn to dirt-cheap alternatives from China which offer 90% of the performance of frontier models for a fraction of the cost, then all bets are off.

Much more in our full must-read (as the WSJ clearly found) report from June, as well as the  "AI Ecosystem: Charting Recent Trends"  report available to pro subs.

Tyler Durden Mon, 08/17/2026 - 23:29

China's YMTC Is Now World's 3rd Biggest Flash-Memory Supplier With 14% Market Share

Earlier today we reported that China's highly touted DRAM memory maker CXMT recently surpassed Tencent to become China's most valuable company.

That may be just the start, because hot on the heels of the biggest Chinese IPO this decade, comes that "other" Chinese memory maker, Yangtze Memory Technologies Corporation (YMTC) which has now broken into the world’s top three NAND flash memory suppliers by volume for the first time, marking a milestone for China’s semiconductor ambitions as it strives to narrow the revenue gap with global rivals in high-value data-center storage.

The Wuhan-based chipmaker captured 14% of global NAND bit shipments – a measure of total storage capacity shipped rather than total chip units – in the second quarter, narrowly overtaking Japan’s Kioxia, according to data from Counterpoint Research published on Wednesday.

Samsung Electronics retained the global lead with a 25% market share, while SK Hynix – including its Solidigm subsidiary – was second at 22%.

YMTC’s shipments climbed 22% year on year and 5% quarter on quarter, driven by expanding supplies to domestic electronics manufacturers and the increased production of its latest-generation 3D NAND architecture, Counterpoint said.

Despite its surge in shipment volume, YMTC’s market position lags in dollar terms. The company ranked fifth globally in NAND revenue for the quarter, placing it behind both US-based Micron Technology and Kioxia.

The gap stems from YMTC’s heavy exposure to lower-margin consumer products and a relatively small footprint in enterprise solid-state drives (eSSDs), which command higher pricing.

The product mix imbalance is increasingly squeezing revenue as artificial intelligence reshapes global storage demand.

eSSDs accounted for 48% of total global NAND bit shipments in the second quarter, nearly doubling their 26% share from a year earlier. Counterpoint attributed the surge to a broader shift in AI workloads from model training towards inference, which requires vast amounts of fast storage for frequently accessed data sets.

The research firm projected server eSSDs would account for more than half of all NAND bits shipped by the end of the year.

To capture this higher-margin market, YMTC planned to shift its product mix further towards eSSDs in the second half of the year to cement its third-place global standing, supported by expanding avenues for capital, Counterpoint said.

The strategy comes as YMTC continues to scale its manufacturing operations despite years of US trade restrictions designed to limit its access to advanced semiconductor manufacturing equipment.

Morgan Stanley said in May that YMTC was increasing utilization in its second fabrication plant in Wuhan while advancing construction and tool installation at a third facility. The bank estimated the company would add about 35,000 wafers per month of capacity this year, with substantially larger increases planned for 2027 and 2028.

The expansion aligns with Beijing’s push to localise China’s AI infrastructure, which would drive growing domestic demand for home-grown eSSDs and high-bandwidth memory through installation in data centres, Bernstein Research said in May.

Tyler Durden Mon, 08/17/2026 - 23:00

Fake News, Part I: The Long History

Authored by John Maxwell Hamilton via RealClearPolitics,

In 1896, a daring journalist covering the Cuban revolution against their colonial masters crossed the Spanish lines three times to interview insurgent leaders. William Francis Mannix's final trip into the Cuban interior was made at the request of the leader of the insurgent government, Salvador Cisneros Betancourt. El Presidente Cisneros wanted the intrepid correspondent to carry back an appeal begging for support from the American people.

Mannix's riveting reports appeared on the front page of the New York Times and other leading newspapers. After the Spanish expelled Mannix from Cuba, he was invited to speak to the National Geographic Society and other prestigious gatherings. The Cuban appeal was published in the Congressional Record. "I applaud and approve every word in that splendid appeal," said Alabama Sen. John T. Morgan, who supported U.S. government intervention to help the Cuban rebels.

The nation's leading newspapers decried Spain's subsequent expulsion of Mannix from Cuba. The Washington Star, another newspaper that carried Mannix's dispatches, said he was being banished "for having told the truth about insurgents and their cause."

Mannix scored a journalistic triumph, but it was not one that his editors, legislators, or readers imagined. His three trips over enemy lines and his stories, including the Cisneros appeal, were all fakes. Mannix wrote them while sitting in the bar of the Moscotte Hotel in Havana or - for a change of scenery - on the hotel's veranda.

In an October 2017 interview on Fox News, President Donald Trump said, "I've really started this whole 'fake news' thing." He called it "one of the greatest of all the terms I've come up with." But faking has a long history. No journalist surpassed Mannix as a fabulist in Cuba, but many followed in his footsteps on the island. Their fabricated sensationalizing reached such proportions that a book-length expose was devoted to the subject on the eve of the United States entering war with Spain. It was called Facts and Fakes About Cuba.

This article and two that follow give perspective on three aspects of fake news: its long history, its attraction to readers, and the consequences of political fake news.

The power of modern technology to pollute streams of information has made fake news seem terrifyingly new. Russian bots flood the Internet with horrifying stories that did not happen. Political operatives produce AI-generated videos of despicable speeches their opponents did not deliver. Your crazy cousin spreads word in his social media posts that President Trump's supporters staged the assassination attempts on his life. As to the latter, a NewsGuard/YouGov poll recently found that almost one-third of Americans believe at least one of the three attempts on Trump's life was staged.

Modern technology is a force multiplier for falsehood. But technology is not the root cause. The launching pad is and always has been people: people who for a variety of reasons want to mislead, and people who for a variety of reasons find falsehood more satisfying than fact. Fake news goes back much further than the computer, the television, the radio, the typewriter, or the printing press.

The history of mankind has been a history of the battle between truth and falsehood. The ancient Greeks created gods in their own image by naming them Apate (fraud), Dolos (guile), and Pheme (rumor). The Roman poet Virgil wrote in the Aeneid of the goddess Rumor:

Her frightening mingle of truth and lies,/ Rhapsodically singing about them in the darkness,/ And all the people hear what she is singing.

One place Rumor did her work was on a busy street corner near the Piazza Navona. Beginning in the 16th century, Romans surreptitiously placed false malicious notes about public figures on a statue of Pasquino, who in legend was supposed to be a local tailor and wit. The name of the mendacious notes lives on as pasquinades.

Buttered news

In the years leading up to the French Revolution, historian Robert Darnton documented that France was awash in misinformation. Craque was slang for fake news. The word mimicked the cracking sound of branches around the Tree of Crakow in Paris, where people gathered in the same way the English did at St. Paul's Cathedral. St. Paul's, where pamphlets were sold and gossip exchanged, was called "the mint of all famous lies."

A hinge point in fake news came in the 1620s, when London printer Nathaniel Butter published the first serialized English-language commercial newspaper, "The News of this Present Week." As soon as it and others like it appeared, discerning critics ridiculed the emergence of "buttered news."

Butter's newspaper could not have appeared without moveable type and the printing press, but this technology had been around for some time. What changed was the emergence of a growing middle class who could read and had disposable income to spend on news - even news of dubious provenance.

Butter and those who joined him in the newsbook business were only beginning to understand journalism. They sometimes published the oldest news first, as if to keep things in order. The British crown constrained them by forbidding the publication of domestic news. Forced to go abroad, they relied on second-hand reports, the spicier the better. A typical article read, "A strange apparition at Rome, of two mighty armies," whose battle in the air was followed by a storm of "blood and fire from heaven." According to one historian, "Roughly one-tenth of these early newspapers contained some sort of apparition, vision, or monstrous-birth item," such as boy-girl twins born to a Swiss cow.

Not all falsehood is fake

We need to be clear about definitions. Fake news is intentional falsification. A factual error in a newspaper is not fake news. It is a mistake. A mistake may be due to sloppy newsgathering or an accidental slip. It may call for firing the reporter. But the author did not aim to deceive. It wasn't a hoax.

Politicians find it convenient to overlook these definitional niceties. They discredit factual news that makes them look bad by calling it "fake news." They become the fakers.

The term fake news was routinely splashed across the pages of American newspapers in the late 19th and early 20th centuries. Each day readers were greeted by headlines like these: "Malicious Fake News." "Fake News Again." "Bit of Fake News." "Concerning Fake News." "More Fake 'News.'" "Fake Stories Afloat." "Fake News. Pope Has Died Twenty-Two Times in Five Years."

The faking habit waned as the 20th century rolled on. First, the cost of starting a new newspaper soared, so it was more difficult for scallywags to wade into the gutter. Second, the intense competition for readers drove the least profitable newspapers out of business. Those that were left found they earned more money by competing on the basis of reliability. Balanced fact-based reports attracted more readers than partisan news. Advertisers preferred to see their products promoted in credible publications.

Of course, some newspapers were outliers. The New York Graphic billed itself as offering "Nothing But the Truth" and then made a merry practice of lying. Long before modern technology made it easy to fake photographs, the Graphic pasted real-life faces on posed bodies. These appeared alongside made-up lonely heart stories.

Many years later fakes still appeared newspapers. In 1980 the Washington Post won a Pulitzer Prize for "Jimmy's World," a story about an 8-year-old heroin addict fabricated by reporter Janet Cooke. A fake in the New York Times the next year was eerily similar to William Mannix's in Cuba. Freelancer Christopher Jones, hired by the Times magazine, invented a detailed story about spending a month with Khmer Rouge guerrillas, who were in hiding in Cambodia. He never left Spain.

But ethical standards had set in by that time. The Graphic went bankrupt in 1932. Its debts amounted to millions. The Post issued a lengthy mea culpa and returned the Pulitzer Prize. When the New York Times realized that Jones might not have been on the up and up, the executive editor assigned three reporters to determine conclusively that the story was a fabrication and then apologized profusely.

We are now back to the buttered days of journalism for the opposite reason we left them behind. The legacy media, as the old established media are called, carry on, albeit in smaller numbers and with generally lower profits. Meanwhile a tidal wave of new, irresponsible media has emerged. The costs of entry are low, and ethics is often considered a nuisance. These news outlets are as eager to fake as Nathaniel Butter and William Mannix were.

Our attraction to fakers like these will be the subject of Part II.

John Maxwell Hamilton, an RCP columnist, is at work on a biography of the journalist-faker William Francis Mannix. His recent book Manipulating the Masses: Woodrow Wilson and the Birth of American Propaganda won the Goldsmith Prize.

Tyler Durden Mon, 08/17/2026 - 22:35

US Navy Destroyer Suffered 4-Day Power Outage In Sweltering South China Sea

Large US naval battleships continue to suffer problems at sea. While there have been many headlines of late detailing the problems of the USS Abraham Lincoln carrier connected to its extended deployment amid the Iran war, a separate warship is having serious problems in Pacific waters, quite apart from the crisis in the Persian Gulf.

"A US Navy guided-missile destroyer spent four days last month without working toilets, galley services and air conditioning in the blistering heat of the South China Sea after the warship lost power," CNN reports.

Arleigh Burke-class guided-missile destroyer Benfold. US Navy/AP

The military has since confirmed an engineering failure which caused the significant outage, which basically shut down all the ship's systems, including the ability to maneuver on its own.

A US 7th Fleet statement identified that the USS Benfold, an Arleigh Burke-class guided-missile destroyer, was on routine operations in the Indo-Pacific on when an "engineering casualty involving its generators" occurred. 

It happened on July 24, and has now set back additional operations. It was supposed to be part of the USS George Washington strike group which is at the moment headed to the Middle East in order to relieve the Lincoln carrier. 

However, the Benfold is still stuck in Asian waters. "There were no injuries to the crew, who demonstrated resilience, grit, professionalism, and unwavering steadiness in their response," the US Navy statement said.

The four-day crisis impacted the ship's galley services, toilets, air conditioning and potable water, the 7th Fleet also confirmed. The heat would have been sweltering.

No explanations have been given as to how the crew managed the waste problem. USNI, which first reported the crisis, describes of the repair process:

The George Washington Carrier Strike Group supported the destroyer, according to 7th Fleet. USS Robert Smalls (CG-62), the cruiser attached to the George Washington Carrier Strike Group, helped provide meals for the crew, Comer said.

Contractor tugboats towed Benfold to Subic Bay where it was met by personnel from the Ship Repair Facility – Japan Regional Maintenance Center on July 28, with crew receiving contracted lodging off the ship the next day. Power was restored on July 30, Comer said.

All repairs were completed by Aug. 7 when the ship completed a berth shift for fuel. The destroyer left Subic Bay on Aug. 8.

Benfold, which had been sailing with the George Washington Carrier Strike Group, pulled into Yokosuka, Japan, on Thursday, according to ship spotters. It did not transit the Malacca Strait with the other ships of the GW CSG, which are likely heading toward the Middle East.

The timing of this engineering failure incident is very bad for the navy, given already there's much scrutiny being placed on long deployments at sea connected to the Iran conflict.

US Navy destroyer left without working toilets, food service or AC for FOUR DAYS after losing power in sweltering South China Sea

USS Benfold suffered generator failure on July 24, leaving its crew without basic amenities amid blistering heat — 7th Fleet spox confirms to CNN pic.twitter.com/CJBm5r7jv1

— Michael Ashura (@MichaelAshura) August 17, 2026

Congressional leaders are currently focused on the beleaguered USS Abraham Lincoln, amid reports of problems in supplying the ship and mental health problems following a record-deployment.

The Hill reports Monday that "A group of 15 senators said Defense Secretary Pete Hegseth owes Americans answers about the ongoing deployment of the USS Abraham Lincoln aircraft carrier strike group after reports of low morale and a mental health crisis among service members aboard."

Tyler Durden Mon, 08/17/2026 - 22:10

Entering The Gates Of Lies: Unmasking The Climate Version Of Theranos

Authored by Sydney Rodman via RealClearEnergy,

One of President Trump's campaign promises was eliminating climate scams. As net-zero climate policies fade into the shadows, another climate scam is biting the dust.

Bill Gates's daughter, Phoebe Gates, may not have her father's entrepreneurial talent, but she, too, frequently peddles climate alarmism. Mr. Gates, however, renounced climate doomerism last year in a widely-shared memo.

A recent media investigation determined the younger Gates and her cofounder, climate influencer Sophia Kianni's self-described sustainable e-commerce startup, Phia, was reportedly collecting sales commissions it had not earned. Phia was marketed as a climate-friendly platform that directed shoppers to secondhand products. Unsurprisingly, the startup created its own climate of lies.

Phia claims to be climate-friendly by promoting secondhand clothing options. Co-founder Sophia Kianni described Phia as having a fundamental "sustainability aspect ... buying an item secondhand actually represents an 80% reduction in carbon footprint compared to buying new." Before studying at Stanford University, Ms. Kianni founded a major Left-wing climate activism organization called Climate Cardinals and served as a climate ambassador at COP27 in Egypt. Gates, for her part, frequently touts her sustainability and climate bona fides. Like father, like daughter.

On the surface, Phia appeared to be successful and profitable. The company secured considerable amounts of seed funding, totaling over $43 million, and had a reported valuation of $185 million by early 2026.

Yet, Phia reportedly was cheating the system. The startup was allegedly using computer code to claim it facilitated numerous purchases - and thus collect a portion of sales - that it had nothing to do with. According to computer experts who investigated the coding behind Phia's platform, a plug-in extension, quietly, unknown to the user, opened an invisible tab in the background. Doing so digitally registered Phia, falsely, as an affiliate marketer involved in the online transaction. Since some revenue in online commerce automatically goes to the affiliate marketer who was the final click before the user's purchase, Phia made itself that final click - even though it was not - and earned millions.

Just as damning, Phia's damage-control efforts sowed more doubts about their fishy operations. Phia's spokesperson responded to allegations, stating that "as soon as we were notified, our team worked overnight to identify, mitigate, and has since resolved the issue." In other words, the company supposedly resolved the issue, but didn't deny any wrongdoing.

Phia's reputation could be in jeopardy. It received investment from celebrities such as Sydney Sweeney, Khloé Kardashian, Jessica Alba, Kris Jenner, and Hailey Bieber. Those investors may now wonder how much deception and incompetence is going on behind the scenes related to other facets of Phia's business model. In fact, this isn't Phia's first scandal. In November, Phia was reportedly busted capturing a "concerning amount of user data," according to reports, including collecting users' banking information.

A former senior executive for Climate Cardinals, who wishes to stay anonymous, has now come forward about Kianni's mismanagement style to the author. The anonymous whistleblower shared, "I was involved for two years and we didn't really do anything. It ruined my perspective for prestige." The whistleblower alleges that a company executive told him "all the numbers on the website are artificially inflated. None of them are real." Soon after, the company experienced a mass exodus of personnel, who decided that, in the source's words, they "no longer wanted to be part of the lies." After Kianni migrated to Phia, her past stayed with her. In order to get ahead, Sophia lied about a fake assistant and even bragged about it.

It is worth asking: is Phia on the path to being Theranos 2.0? The parallels to Theranos, the disastrous tech startup that investigative journalists exposed as being among the greatest scams of modern times - ultimately costing investors hundreds of millions of dollars - are uncanny. Oddly enough, founders of both companies started their company at Stanford and faced rejection there, helping place a "chip on their shoulder," in Phoebe Gates's words.

Both of these startups had great ideas in theory - but they did not survive reality. In fact, they never tried. That is also the case for the climate movement writ large.

Climate alarmism, itself a scam, is a macrocosm of the Phia story. It's a movement based on activism, not facts, and its fundamental claims don't hold up under scrutiny. Climate programs also received billions of government funds under President Biden, until the judicious Trump administration took notice and ended the gravy train. Falsehoods and fear mongering can be quite lucrative.

Phia should serve as a cautionary tale for the future of so-called climate investment - and the climate movement itself.

Sydney Rodman is a visiting fellow at Independent Women's Center for Energy and Conservation.

Tyler Durden Mon, 08/17/2026 - 21:45