The weekend is here! Pour yourself a mug of Danish Blend coffee, grab a seat outside, and get ready for our longer-form weekend reads:

• The Father-Daughter Showdown That Shook an $18 Trillion Investing Empire: WSJ on Abby Johnson finally winning the long, quiet war for Fidelity — and what her late father gave up to make it happen. The succession story the family kept out of the press for a decade. (Wall Street Journal)

• If you let AI do your writing, I will come to your house and kill you: Sam Kriss at his most unhinged and most correct. A furious, funny polemic against the replacement of human thought with algorithmic slop. (Sam Kriss) see also The literary world is sleepwalking into an AI disaster: The Argument on why publishing’s slow-motion capitulation to AI-generated content is an existential crisis hiding in plain sight. (The Argument)

• The Secret Sauce of: It’s the Paycheck, Not the Tax Code. Sweden is indeed highly equal by international standards, largely thanks to pre-distribution. And the kollektivavtal is really the big story here. But there are wrinkles, suggesting some increasing concentration of wealth at the top; and perhaps there are also some surprising lessons from American success stories about raising wages.Arin Dube on what the Swedish wage-compression model actually rests on — collective bargaining coverage, not headline tax rates. The kind of empirical correction that should reset half the policy conversation. (Arin’s Substack)

• Why YouTubers Are Turning Hollywood Upside Down. Variety spoke with Hollywood producers, filmmakers, distributors and YouTube executives about this sea change and the young rebels taking Hollywood by storm. The Backrooms kids went from viral creepypasta to major studio deals. Variety on how a generation of creators raised on YouTube is rewriting the rules of the entertainment business. (Variety)

• It is the end of the world and I am here to take you home: A short, well-written Substack essay on the texture of life at the end of an era. Pair with whatever weekend you’ve been having. (Natalie’s Substack)

• Soon She’ll Be the Queen of Belgium. But for the Last Two Years, She Was the Princess of Harvard. On Wednesday and Thursday, Crown Princess Elisabeth is graduating from Harvard’s prestigious Kennedy School of Government with a master’s in public policy. Vanity Fair on Princess Elisabeth’s Harvard exit — Kennedy School degree, low-key roommates, and the next-monarch-of-Belgium logistics in the background. A lighter read than the headline suggests. (Vanity Fair)

• The Painful Truth About Long Covid: There might finally be a way forward for long Covid treatment—if only you were allowed to talk about it.Nothing about Long Covid adds up. Prevalence rates range from 3% to 86% depending on the study. The confusion is the point—this is a disease that defies easy categorization. (Wired)

• Why Are Men So Bad at Making—and Keeping—Friends? What do we make of this ostensible myth of the male loneliness crisis? One interpretation is that there is nothing to worry about, and everybody is fine. The trouble with that interpretation, however, is the fact that everybody is so evidently not fine. Derek Thompson on the data behind the male-friendship recession — hours, networks, who actually shows up. The trend he keeps writing about that the rest of the chattering class keeps under-pricing. (Derek Thompson) but see also To make friends, join a club. To join a club, find an activity fair. These citywide events are a low-stakes way to meet people and combat loneliness. Vox’s Highlight on the modest, slightly desperate revival of adult activity fairs — and the social-isolation data that makes them necessary. Pair with the Derek Thompson piece. (Vox)

• Inside the plan to make Victor Wembanyama the biggest athlete on the planet: The NBA, staring down the approaching retirements of LeBron James, Steph Curry and Kevin Durant in the coming years, was in dire need of a new face, someone even the most casual fans could identify. Wemby had a solution: “I’m not gonna give basketball a choice of who the face is going to be.”  The Athletic on the joint Nike/Spurs/NBA effort to engineer Wembanyama into the next global sports brand. Specific, well-sourced, and timely with the Finals on. (The Athletic)

• 38 Tony Nominees Reveal the Strangest Skills They’ve Picked Up: The stars of “Giant,” “Fallen Angels,” “The Rocky Horror Show,” “Ragtime” and more prove they’ll go to great lengths to be believable in a role. NYT Theater’s annual photo feature. Light, charming, exactly the right length. (New York Times)

Video of the day: Martin Scorsese Breaks Down His Most Iconic Films | GQ

Be sure to check out our Masters in Business interview this weekend with Chris Davis, Chairman and Portfolio Manager of Davis Funds. The firm oversees $20 billion in client assets, with Davis (and colleagues) co-investing $2 billion in their own mineus alongside shareholders. Davis was named Morningstar’s Portfolio Manager of the Year; he also sits on the boards of Berkshire Hathaway and Coca-Cola.

 

25% of manufactured goods imports have two or three trade dependencies

Source: McKinsey

 

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The post 10 Weekend Reads appeared first on The Big Picture.

Waste Of The Day: Mismanagement At SF Zoo

Authored by Jeremy Portnoy via RealClearInvestigations,

Topline: The taxpayer-funded San Francisco Zoo "does not have a healthy or stable financial condition," according to a city audit released in May. The zoo has no written plans or budgets to guide its construction projects, and spent $12 million on them without city approval. Employees are also allegedly hiring their friends and relatives as contractors.

Key facts: The zoo is required to get approval from San Francisco's Recreation and Park Commission before paying more than $50,000 for a construction project. But employees never did so while spending millions on a new "Madagascar Center" and other huge projects, auditors found.

There is also a "widespread view among staff that [the zoo] has a toxic workplace environment," according to the audit. Employees were allegedly chosen for senior roles based on "discrimination and favoritism," not "professional qualifications."

The zoo spends more than $4 million on contracted services like security and advertising every year, but there is no evidence that any of them went through a competitive bidding process to find the best price. The zoo keeps no records of its contractors and was unable to tell auditors how much they are being paid, the audit found.

The audit also confirmed that former zoo CEO Tanya Peterson's fiancé was hired to perform concerts, and other relatives of zoo staff received more than $800,000 for construction projects. The San Francisco Chronicle first exposed the nepotism allegations in 2024, which eventually contributed to Peterson's resignation.

The City of San Francisco gives the zoo $4 million in funding every year, though that amount has not increased since 1993. Most of the zoo's revenue comes from tickets, but low attendance has caused the zoo to outspend its budget for at least the last eight years. The zoo hid this fact from the city by projecting "unrealistically high" attendance numbers each year and making purchases based on the inflated revenue that never materialized, according to the audit.

Oversight of the zoo has been difficult because employees are ignoring public records requests, according to the audit. They claim that because the zoo is a nonprofit, it is exempt from open records laws, but the zoo signed an agreement years ago to share all records as if it were a city agency.

Search all federal, state and local salaries and vendor spending with the world's largest government spending database at OpenTheBooks.com.

Background: The city plans to bail out the zoo with an $8.5 million loan after a city-commissioned report found that closing the zoo or finding a new operator would be more expensive.

The zoo is also planning to bring in pandas from China to fill a new exhibit that will cost $27 million to build. Activist groups like In Defense of Animals have opposed the proposal, arguing the zoo cannot properly care for new animals until it fixes its financial problems.

Summary: San Francisco's zoo has a responsibility to its animals and to taxpayers to manage its money through a carefully-planned budget, not endless deficits.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

Tyler Durden Fri, 06/05/2026 - 18:25

Putin Rejects Open Letter By Zelensky Urging Meet: 'Pointless'

Russian President Vladimir Putin has responded dismissively to Ukrainian President Volodymyr Zelensky's open letter issued the day prior, which urged that the two leaders meet in order to finally forge a peace deal and bring an end to the war, now it its fifth year.

Putin made clear Friday that he sees no point in holding a personal meeting with Zelensky. He was asked directly about the letter while attending the St. Petersburg International Economic Forum (SPIEF). In response the Russian leader addressed not the "authors of the epistolary genre," but to Russian soldiers on the frontline: "The whole country is proud of you and is counting on you. Keep up the good work, brothers!" And then, per TASS:

Asked to clarify if this response means that he doesn’t plan to meet with the letter’s author, Putin said, "So far, I see no point in this."

He went on to reject the idea of "meeting just for the sake of meeting" - but did reveal for the first time that only last month he sent an informal envoy to Ukraine at Kiev’s request. Apparently that was the opening of a serious diplomatic overture.

But then, he noted, Ukrainian forces bombed a college dormitory in Lugansk merely soon after the Russian envoy arrived. The brutal attack killed 21 people, mostly teenage girls - and injured many dozens more. The Kremlin was outraged at the 'terrorist act' and the following week heavily bombed various Ukrainian cities, especially the capital. 

State media featured more of Putin's response:

The letter is either "a means to create an environment for a personal meeting, or maybe is this letter meant to make sure that no personal meetings can take place at all,” he remarked, concluding: “I think it's the second.”

Zelensky's lengthy Thursday letter had said Ukraine is also ready for a "full ceasefire." Zelensky wrote: "Ukraine proposes ending this war through direct engagement between us - and you. I am proposing a meeting. Ukraine is ready for a full ceasefire for the duration of the negotiations," he added.

The letter also at one point said, "The choice is yours now. Enough of war" and then spells out that "Ukraine proposes to end this war."

"This must be done honestly, with dignity, and with guarantees that the war will not be reignited," Zelensky added. And then interestingly, "We see that the United States is fully focused on the issue of Iran, and it would be wrong to simply wait until the war in Europe returns to the center of its attention."

Despite the long appeal, President Putin and the Kremlin have demonstrated a willingness to allow a long war to drag on, and are unlikely to be moved. Putin has said there's no need for a truce unless a deal is already close or about to be signed. But the two sides aren't any closer to being at the negotiating table as yet.

Tyler Durden Fri, 06/05/2026 - 18:00

Minnesota Mob Blindness: St. Paul Prosecutor Drops All Charges Against City Church Demonstrators

Authored by Jonathan Turley via JonathanTurley.org,

Minnesotans are familiar with the perils of "snow blindness," a temporary blindness caused by overexposure to ultraviolet rays from the reflection from snow and ice. It appears that Minnesota politicians and prosecutors have a type of mob blindness, where they cannot see crimes committed in front of them by the far left. That condition appears to be tragically evident in St. Paul, where City Attorney Irene Kao made an absurd denial of any criminal activity at the demonstration in the City Church on Jan. 18th. While claiming that there were no observable crimes, Kao's decision just happened to be enormously popular with the mob-driven politics and polling in her state.

In January, dozens of anti-ICE protesters, and former CNN journalist Don Lemon, descended upon the church and disrupted a mass because a church official had connections to ICE.

The demonstrators could have been charged with such offenses as disorderly conduct, interfering with a religious observance, knowingly participating in a noisy assembly and making or continuing a disturbing or excessive noise.

There was a demonstrator who was able to get her misdemeanor charges dismissed earlier. However, Emily Phillips was arrested for her conduct outside of the church and actually responded to police demands that she stop using her bullhorn.

Her case is a good point of comparison. Protesting outside is vastly different from entering a church or event to disrupt it or shout down speakers.

These demonstrators entered a church, refused to leave when told to do so, and abused parishioners while stopping the services.

Kao offers little more than a shrug: "Following a careful evaluation of the video footage, investigative reports, and other available materials, prosecutors determined that the current evidence is insufficient to meet that standard for criminal charges under Minnesota state statutes."

There are 39 people still charged by the federal government under the FACE Act.

Kao insisted, "The right to peacefully protest is protected, as is the right to exercise one's religious beliefs. Balancing these equally important rights is paramount to our decision today."

This is not protected free speech. It is conduct. Indeed, it is criminal conduct.

While Kao stressed that there was no property damage, it is not required under these criminal charges.

What is missing is not the basis for criminal charges but the will to prosecute them. Once again, Democratic politicians are yielding to the mob and refusing to see the criminal conduct.

It is reminiscent of CNN national correspondent Omar Jimenez reporting live from Kenosha, Wis., with a raging fire in the background over a chyron reading, "FIERY BUT MOSTLY PEACEFUL PROTESTS AFTER POLICE SHOOTING."

These politicians and state prosecutors hope to ride this rage wave back into power in Congress and the White House. Indeed, some have told voters to "let your rage fuel you."

We have seen this pattern before in history. Establishment figures often try to harness the rage of the mob, only to be ultimately consumed by the rage themselves.

Irene Kao's decision is a cynical concession to the mob. It is a decision that will give the Minnesota mob a further sense of license.

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of the bestselling books "The Indispensable Right: Free Speech in an Age of Rage" and "Rage and the Republic: The Unfinished Story of the American Revolution."

Tyler Durden Fri, 06/05/2026 - 17:40

Trump Tells "Less Shackled" Pulte To Fire Intelligence Officials As Senate Blocks FISA Extension

When has the Senate ever not increased government spy powers? When President Trump installs Bill Pulte as acting DNI and instructs him to start kicking hornet nests, apparently.  

In a WSJ interview published Friday, Trump revealed he has directed incoming acting Director of National Intelligence Bill Pulte to begin the process of firing a large number of employees as part of a major shake-up of the U.S. intelligence community. Trump described the Office of the Director of National Intelligence (ODNI) as “unnecessary and/or too big” and said he wants it made “much smaller” - and possibly even terminated.

“I’d like to see it smaller. I think there are a lot of people in there that shouldn’t be there,” Trump said, targeting holdovers from prior administrations. He told Pulte to “start the process” of firings, noting that Pulte’s acting status makes him “less shackled” and gives him more power in the short term to do the “hard work” of downsizing before a permanent director is confirmed. Trump compared the approach to Education Secretary Linda McMahon’s efforts to shrink her department.

This aggressive move comes as the Senate early Friday morning blocked a procedural motion to extend a key provision of the Foreign Intelligence Surveillance Act (FISA), in a 47-52 vote that saw seven Republicans join nearly all Democrats in opposition. The timing of Trump’s decision to name federal housing finance regulator Pulte as acting Director of National Intelligence played a central role in the backlash.

Senate Majority Leader John Thune acknowledged that "the naming of Pulte to that position, although the timing arguably wasn't the best," still should not derail such a critical national security measure according to AP. However, the backlash proved too strong.

• Democrats and several Republicans viewed Pulte's lack of intelligence-community experience and past controversies as disqualifying for leading the 18 U.S. intelligence agencies.
• Sen. Mark Warner (D-VA), the top Democrat on the Senate Intelligence Committee, said a negotiated "compromise" on a strong FISA bill had been reached with Chair Sen. Tom Cotton - but the "complete irresponsibility of putting forward" Pulte changed the equation.
• Warner questioned giving Pulte "the keys to the 18 intelligence agencies."
• Sen. Ron Wyden (D-OR) framed the bipartisan vote as a stand against warrantless surveillance of Americans' communications.

Trump himself walked back the move on Thursday, saying Pulte would not be his permanent nominee for the role.

The blocked FISA provision would have extended warrantless collection of foreign-target communications (which can incidentally capture Americans’ data). The dramatic personnel and structural changes Trump is pushing through Pulte at this exact moment intensified opposition and contributed to the Senate’s inability to advance the extension before its June 12 expiration.

Thune indicated the Senate will try again next week, but any deal would still need 60 votes to advance - and the House has its own complications, including disagreements over a central bank digital currency provision.

Pulte's acting appointment, announced at a sensitive moment in FISA negotiations, provided opponents with leverage to slow the process and demand more accountability on both surveillance reform and leadership qualifications.

Tyler Durden Fri, 06/05/2026 - 17:20

Rubio Backs Bolivia's Government As Protests Trigger Food, Fuel Shortages

Authored by Evgenia Filimianova via The Epoch Times,

The United States has pledged additional emergency assistance to Bolivia as protests and road blockades deepen shortages of food, fuel, and medical supplies across the South American country.

U.S. Secretary of State Marco Rubio spoke with Bolivian President Rodrigo Paz on June 4 and discussed efforts to address growing shortages caused by nationwide unrest.

“The Secretary noted the United States is ramping up emergency assistance and logistics operations support in Bolivia to help those facing acute food and medical shortages due to illegal roadblocks intended to destabilize Bolivian society,” U.S. State Department spokesperson Tommy Pigott said on June 4.

Pigott said Rubio reaffirmed “the United States’ unwavering commitment to support Bolivia’s democracy and the Paz Administration” as the country works through a political and economic crisis.

Paz’s government faces mounting pressure from labor unions, peasant groups, miners, and supporters of former Bolivian President Evo Morales, who have staged protests and road blockades across the country.

Blockades Disrupt Supplies

The unrest began with a workers’ strike in May and later expanded into road blockades that cut off access to the neighboring cities of La Paz and El Alto, which together are home to about 2 million people.

Protesters are demanding that the government reverse austerity measures and address rising living costs.

Blockades organized by the federation of trade unions representing peasants and miners, the Bolivian Workers’ Central (COB), and other groups have depleted food supplies in La Paz and left hospitals struggling to obtain oxygen.

Women wearing traditional dress known as "cholitas" take part in a march calling for the resignation of President Rodrigo Paz, in La Paz, on May 22, 2026. Aizar Raldes / AFP via Getty Images

The demonstrations have also exposed broader economic tensions, with protesters calling for higher wages, improved fuel supplies, and access to additional mining areas. Public school teachers are separately negotiating for salary increases.

COB in a June 2 statement on Facebook called for Paz’s resignation and said his administration had failed to govern effectively.

The organization also demanded the release of detainees, an end to what it described as persecution against its leaders, and measures to guarantee fuel and food supplies, and called for a permanent state of emergency.

The Bolivian Highway Administration (ABC) reported 84 roadblocks nationwide on June 4, according to a June 5 report by Bolivian newspaper El Deber.

Government Actions

Paz has called for dialogue while also pursuing measures to reopen blocked roads.

On June 3, he appointed Ernesto Justiniano as defense minister following the departure of Marcelo Salinas, who stepped down on June 2.

“The immediate task is to restore normalcy: passable roads, supplies, medical care, work and peace,” Justiniano said after taking office.

Paz said in a June 3 post on X that Justiniano would help restore stability and improve conditions for Bolivians. The president said he had sent a ⁠bill ​to congress authorizing joint police ​and military operations to clear roads.

He accused some protesters of attempting to divide the country through “lies, violence, and blockades” while emphasizing his commitment to democracy and dialogue.

People line up to buy gasoline in plastic containers in the Calacoto neighborhood of southern La Paz, Bolivia, on June 2, 2026. Jorge Bernal / AFP via Getty Images

Paz also called for the creation of humanitarian corridors to allow food, medicine, and fuel to reach communities affected by the protests.

On June 4, he said his government remained willing to negotiate with protest groups.

“Today we took another step toward strengthening dialogue, a key tool for finding solutions to conflicts,” Paz wrote in a post on X after meeting with Vice President Edman Lara and congressional leaders.

“I repeat it, and I will continue to do so: we have every willingness to listen to and address the demands of the mobilized sectors.”

The crisis has become an early test for Paz, whose October 2025 election ended two decades of left-wing rule in Bolivia.

Bolivian President Rodrigo Paz holds a press conference in La Paz, Bolivia, on May 20, 2026. Claudia Morales/Reuters

Paz, a member of the Christian Democratic Party, took office promising economic reforms and stronger action against corruption and drug trafficking. His government has argued that some demonstrations are politically motivated and designed to destabilize the administration.

Rubio said on May 20 that Washington stood firmly behind Bolivia’s constitutional government and would oppose any attempt by criminals or drug traffickers to remove democratically elected leaders from power.

Tyler Durden Fri, 06/05/2026 - 17:00

Questions & Answers

Authored by James Howard Kunstler,

"I’m the look-around candidate. All you have to do to understand why I’m surging in the polls is just look around. . . ."

- Spencer Pratt

Just watch in wonder and nausea as California’s mail-in ballots dribble in, providing a real-time demonstration of the “Our Democracy” party spitting in the country’s face again, since everybody knows exactly what’s going on.

Meanwhile, the Senate voted down the SAVE Act again this week by 52 to 48 for. . . reasons. But, hey, cheer up, it’s Pride Month. At the same time that California was queering its own “jungle primary,” a troupe of drag queens swanned and capered around New York’s City Council Chamber in what was called a “Pride Ball” (actually more of a show than a ball).

And what it really showed is that the party running New York City has no shame. How, exactly, does mental illness intersect with the public interest, you might ask? Historians of the future, roasting armadillos-on-the-half-shell over their campfires, will probably figure it out. For now, you must pretend that no such question even exists. Don’t bother asking. Just go along with the gag.

Here’s a scene you might like to see: As you know by now, the president has nominated Acting Attorney General Todd Blanche to be the Senate-confirmed full-on, bona fide AG. But Senator Thom Tillis (R-NC) says he would require Mr. Blanche to declare that the Jan 6, 2021, Capitol riot was “an insurrection.” Wouldn’t it be fun to hear Mr. Blanche reply by saying, “Can’t do that, sir, because the DOJ has an ongoing case that involves dozens of federal officers from several agencies instigating the events of that day in collusion with members of Congress and the US military, and, well, I can say no more about that at this time. . . .”

Similarly, election fraud. Just days ago, Mr. Trump, told Miranda Divine of The New York Post, “We had a rigged election [2020], we can’t have rigged elections. We know who rigged the election. We know everything now. . . we have information that nobody thought was possible. . . . Let’s see what happens.”

Hmmmm. . .. Wouldn’t that prompt you to suspect that the DOJ has a case, or multiple cases, involving 2020 election fraud cooking on its stove? Recall that not long ago the FBI seized 700 boxes of evidence from the Fulton County Election Hub in Union City, GA. And another truckload out of Maricopa County, AZ. Do you think they’ll discover some, er, irregularities in all that? Perhaps eye-wateringly blatant?

Would it not then be urgent to seek indictments of actual persons, if any are deserved, well before November, so that measures could be taken to preclude more fraud and cheating in the midterm election — measures like . . . passing the SAVE Act!

How might Majority Leader John Thune explain his intransigence on the matter in the face of all that? Or, like New York’s City Council, does he have no shame?

In another momentous development this week, the new management at CBS-News cashiered 60-Minutes star Scott Pelley for apparent insubordinate behavior in a confab with the show’s newly-hired Executive Producer Nick Bilton and Mr. Bilton’s boss, Editor-in-Chief Bari Weiss. They had already sacked the querulous Sharyn Alfonsi a week earlier. Of course, 60-Minutes, with its giant audience following NFL games, was one of the main units in the Deep State’s gaslighting apparatus, and Mr. Pelley burned brightest there for years, flaring out one lying-ass narrative after another from the Russia Collusion hoax to 2020 election fraud to the Jan 6 fake “insurrection,” with the same burnished arrogance he showed his new bosses. Gone now. . . buh-bye. Next up, Lesley Stahl (“Sir!!! Sir !!!”), and the self-important prick Bill Whitaker. Fire them all!

If you seek to understand why the American public is so deeply bamboozled, it is largely the utter failure of the news business. You can trace that to a couple of signal changes of policy. One was the 1987 repeal of the FCC’s “Fairness Doctrine,” which required TV stations holding federal licenses to cover controversial public issues in a “fair and balanced manner.” The other was the 2013 “modernization” (under Barack Obama) of the Smith-Mundt Act (1948), which had prohibited the US government from “propagandizing” its own citizens — and after “modernization” turned squishy on that.

The 1975–1976 (Sen. Frank) Church Committee — the Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities — documented that the CIA had long-term secret relationships with dozens of U.S. journalists. This is casually referred to as “Operation Mockingbird.” Since the Church Committee, it has only gotten much worse as the Deep State struggles to cover-up layer upon layer of crimes it keeps committing. The nightly news shows now are just anchors and “panelists” shooting their mouths off. The news itself goes mostly unreported. A big reason is that broadcast news now employs nearly zero correspondents in-the-field. Nobody is out there reporting on events. They don’t want to spend the money. So, the news just spins and spins, mostly in the service of manufactured lies.

Also last week, famous New York Times columnist and fake Nobel economics prize-winner Paul Krugman put out a video calling for the “purging” of MAGA and everything MAGA-adjacent from American life — when his team (the party of “Our Democracy”) comes back to power, as it must.

He didn’t detail whether this process would entail internment camps and crematoriums, but you could infer as much from his tone.

Kinda gives you a clue of where their heads are at.

Tyler Durden Fri, 06/05/2026 - 16:20

Ringing The Bell: Meta Plunges On Report It May Sell "Tens Of Billions" In New Stock

They don't ring the bell at the top, but they sure do sell a lot of stock.

With SpaceX, Anthropic and OpenAI looking to IPO hundreds of billions in common stock (not counting even more hundreds of billions in lock up expirations that will hit the market soon)...

... coupled with Google's record $80 Billion follow on offering (of which half was a memestock-esque At The Market offering direct to retail), suddenly the cash-incinerating AI companies - already full to the gills with SPV and various other forms of debt - are realizing that if they don't move fast they will miss the boat.

And sure enough, FT reports that arguably the biggest cash burner of the lot, Meta, is considering raising tens of billions of dollars in a stock offering as it seeks new sources of capital to fund Mark Zuckerberg’s vast ambitions in AI, following the launch of Google’s record $85bn share deal this week.

According to the report, company execs have been exploring “creative” ways to raise cash as it prepares to sharply boost its AI-related capital expenditures to as much as $145bn this year and even higher in 2027, according to three people familiar with the plans.

The discussions intensified after the success of Google parent Alphabet’s equity raising this week, which was increased by $5bn after strong investor demand, but - as noted above - GOOGL has a much more viable cash flow profile than Meta, which will be FCF negative this year.

The news sent META stock plunging to the lowest level since early April. 

Meta’s decision to consider a fresh share sale comes amid a frenzy of activity in US equity capital markets, with Elon Musk’s SpaceX set to hold its initial public offering next week and AI groups Anthropic and OpenAI also working on plans for massive Wall Street debuts. 

Mega tech companies have also tapped debt markets - which as we said last year AI is also now a bubble - as they rush to finance AI infrastructure, including chips and data centers.

Meta CFO Susan Li is leading the talks over the potential share sale alongside Dina Powell McCormick, who moved from Meta’s board to take a more active role as president in January. Powell McCormick has been tasked with overhauling Meta’s approach to AI infrastructure and financing, with a focus on longer-term planning as it enters the most capital-intensive period in its history.

Meta must find new ways to fund the huge data centers needed to train and run advanced AI models to fulfil Zuckerberg’s vision for “personal superintelligence” delivered through Facebook, WhatsApp and Instagram, as well as a family of AI-powered wearables such as smart-glasses and voice pendants.

Meta has not yet hired banks and ultimately may not issue new stock. One person cautioned that it was “premature” to say that the company had decided what to do and all financing options remain on the table.  A Meta spokesperson said the share sales talks were “pure speculation”, but added “we’ve been clear that huge opportunities lie ahead in AI, and we’ll continue focusing on raising capital in the most flexible ways to support that”.

A person familiar with Meta’s discussions said the group had looked at the structure of Alphabet’s capital raising, which included “mandatory convertible preferred issuance”. This allows it to raise cash immediately, but defers the stock issuance potentially for years.

According to the FT report, Goldman Sachs would be in a strong position to win the Meta mandate considering Powell McCormick spent 16 years at the investment bank. The Wall Street bank led the Google deal announced this week. 

As noted above, Meta exces are conscious that they will have to move fast if they decide to raise equity to ensure capacity and investor enthusiasm remain amid a historic glut of activity in US public markets. SpaceX is set to raise as much as $86bn next week in an IPO that would value the group at $1.78tn. Claude maker Anthropic has confidentially filed for its own listing and rival OpenAI is also preparing to go public. Both are expected to raise tens of billions and attract $1tn-plus valuations.

Analysts say that Meta’s Big Tech rivals such as Microsoft and Amazon are also likely to be considering their own stock sales as their data centre spending surges and investors question the impact on their balance sheets.

Meta has already raised fresh capital through new means and innovative structures. The company had less than $10bn in long-term debt as recently as 2022, but borrowed $55bn in globe-trotting deals in recent months. In October, it raised $27bn in a bond sale through a joint venture with private capital firm Blue Owl to build a Manhattan-sized data centre in Louisiana dubbed “Hyperion”. Something we warned would soon become an off balance sheet template for all Mag 7s.

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

Meta has also been conserving capital by cutting costs and other means. Last month it fired 8,000 people and stopped hiring for 6,000 roles.The company also halted share buybacks in late 2025 after repurchasing its shares regularly since 2017.

Google paused its buyback programme in the first quarter after repurchasing about $45bn last year, according to FactSet data and company filings.

Finally, those wondering why the Mag 7s are rushing to sell stock instead of do much cheaper debt offerings, we gave the answer exactly a month ago: "Banks Are Choking": The AI Debt Bubble Has Started To Burst.

Which only leaves equity sales, and just like that what went up in the past 2 months, is rapidly coming down. 

Tyler Durden Fri, 06/05/2026 - 15:40

Coinbase To Launch Token-Backed Mortgage Down-Payments This Summer

Authored by Turner Wright via CoinTelegraph.com,

Cryptocurrency exchange Coinbase will allow qualified borrowers to pledge digital assets to fund Fannie Mae-backed mortgage apartments beginning this summer.

In a Thursday notice, Coinbase and its partner, Better Home & Finance, said the mortgage structure plan launching “by summer 2026” will allow borrowers to initially use Bitcoin (BTC) or USDC (USDC) as collateral for loans to fund down payments for homes. The initiative, first announced in March, represented a significant shift in companies allowing digital assets to be used for financing houses. 

“We’re excited to expand access to all qualified borrowers to fix an ongoing issue: buyers who qualify on every measure that matters but cannot clear the down payment hurdle because their wealth isn’t where the system expects to find it,” said Better founder and CEO Vishal Garg.

Garg said in a March post on X:

“This isn’t a niche thing. It’s what everyone is going to do once most financial assets are tokenized. It’s just a better way to buy a house.”

The move by Coinbase and Better followed US regulatory agencies under the Trump administration being friendlier to crypto companies and more accepting of digital assets integrated with traditional finance. In June 2025, the US Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to consider crypto as an asset in mortgage risk assessments without requiring a conversion into fiat.

Other mortgage lenders have made similar moves since the FHFA order. In February, Newrez began allowing borrowers to use their cryptocurrency holdings to qualify for a mortgage application.

Source: Bill Pulte

Volatile crypto-backed mortgages scrutinized for political motivations

Although the price volatility of cryptocurrencies like Bitcoin may present challenges to the mortgage plan, some US lawmakers have accused FHFA head Bill Pulte of being “unduly influenced” by President Donald Trump in supporting such policies.

“Expanding underwriting criteria to include the consideration of unconverted cryptocurrency assets could pose risks to the stability of the housing market and the financial system,” said five US senators in a July 2025 letter to Pulte following the FHFA order.

Republican lawmakers, including crypto proponent Cynthia Lummis, have proposed codifying the FHFA order into law. She introduced the 21st Century Mortgage Act in July 2025, saying government agencies “must evolve to meet the needs of a modern, forward-thinking generation.”

Tyler Durden Fri, 06/05/2026 - 15:40

 

 

Of all the dumb things Wall Street is infamous for, perhaps none is sillier than the all too regular forecasting game. Quarterly earnings, Non-farm payrolls, annual S&P predictions, oil prices, inflation rates, FOMC cuts — its a never-ending parade of predictions, most of which are laughable.

Guessing the revenues and profits of any company is tough enough; it becomes even more difficult for any company with only a few years of history.

Allow me to present to you Exhibit A in whatever subsequent litigation arises, via the WSJ:

“SpaceX’s revenue could reach $3.4 trillion in 2040, according to a Morgan Stanley analysis shared with top investors Thursday, according to people familiar with the matter.

Morgan Stanley told investors the rocket maker’s adjusted earnings before interest, taxes, depreciation and amortization in 2040 could top $2.7 trillion, the people said.”

I find it hilarious that anyone imagines they forecast revenues and/or profits a decade and a half into the future, let alone $3.4 trillion. Hey, you gotta move some shares, and this seems to be one way to accomplish that.

Just recall whatever you were thinking back in 2012 about 2026 (or the early 2010s about the mid 2020s)  — was Artificial Intelligence the top of your list? Intel finally rallying after the US government took a 10% stakle in it? Korea up 4X? GameStop / meme-stock short squeeze? Silicon Valley Bank / digital bank run? 500 basis point rate hikes in 2022? Did you anticipate the pandemic, the rise of EVs, the invasion of Ukraine, or either Trump elections? January 6, or October 7? A treatment/cure for Pancreatic Cancer?

The world is composed of countless co-variables — not only things we cannot predict, but also secondary effects and unforeseen consequences that are even more impossible to forecast — the further out you look, the number of possible outcomes increases exponentially.

So much happens over the course of a year that it makes forecasting challenging; 10-15 years into the future is utterly laughable.

Look, I get it, analysts’ jobs are hard enough as is, and many of them are justifiably terrified about being replaced by Claude.

Still, f*ckery tomfoolery like this does not give one confidence in this IPO process…

 

 

Previously:
Nobody Knows Anything (Archive)

Is SpaceX IPO Breaking Capitalism? (May 13, 2026)

The Folly of Forecasting (June 7, 2005)

 

See also:
SpaceX won’t make the S&P 500 (FT, June 5, 2026)

 

Source:
Morgan Stanley Sees SpaceX’s Revenue Reaching $3.4 Trillion in 2040
By Corrie Driebusch
WSJ, June 5, 2026

 

The post Nobody Knows Anything, SpaceX IPO edition appeared first on The Big Picture.

Ohio State University Reaches $100 Million Settlement With Nearly 300 Sex Abuse Survivors

Authored by Jasper Ward via The Epoch Times,

Ohio State University has reached a $100 million settlement with nearly 300 former students who had accused the school's campus doctor of sexually assaulting them decades ago, the school and a lawyer for the victims said on Wednesday.

The Ohio State University campus in Columbus, Ohio, U.S., November 25, 2020. Megan Jelinger/Reuters

The settlement with 279 of the 280 former students was ratified by the university's board on Wednesday. It followed years of litigation over accusations of decades of abuse by Richard Strauss.

The abuse occurred from 1978 to 1998, the year he retired from the faculty.

"The mediation and its confidentiality are continuing as the parties work to finalize the details of the settlements, and additional information will be shared as appropriate," the school and a lawyer for the victims said in a joint statement.

In February, the university reached eight additional settlements, bringing the total to 304 survivors and more than $60 million.

Strauss, who killed himself in 2005, was employed by Ohio State's athletic department and medical staff for nearly two decades.

A 2019 report detailing the investigative findings said that Strauss had sexually abused at least 177 men, nearly all of whom were students, and that university staff who knew of the abuse failed to act. The abuse included groping and fondling of the students' genitals and other acts under the guise of a medical examination.

News of the investigation and its findings prompted more than 500 plaintiffs to sue Ohio State, alleging they had been sexually abused by Strauss and that the school had shown deliberate indifference.

Tyler Durden Fri, 06/05/2026 - 15:00

Fannie, Freddie Jump After Trump Floats $1 Trillion Valuation

Fannie Mae and Freddie Mac shares jumped on Friday morning after President Trump said late Thursday that the mortgage giants were "probably worth $1 trillion," reviving Wall Street hopes for a long-awaited exit from government control.

President Trump praised FHFA Director Bill Pulte on Thursday for turning around Fannie Mae and Freddie Mac, saying the mortgage giants "probably have $1 trillion in value."

Full transcript:

"...a person who's got high integrity. He's done a phenomenal job at Fannie Mae, Freddie Mac. You probably have $1 trillion in value there. When he took over it was much less, and I guess I'm responsible for that too because everybody wanted me to sell it in my first term for 10% of what it's worth right now. If I would've sold it, we would've lost $900 billion. We would've lost. Think about it. It's probably worth $1 trillion. People want me to sell it at $100 billion — a very small percentage of what it's worth now. And he built up a lot. Did a great job. And it's an acting position. He is not going to be permanent because I don't think you'd want to be. But he was a smart guy. You may find out some things about the rigged elections, etc. etc. I think he wants to do it. He's got a lot of energy but will be very good. He's not a permanent position. We're looking at — we are interviewing people right now. But it is somebody just to take over for a little while."

.@POTUS on @pulte: "He's very smart. He's a person who's got high integrity. He's done a fantastic job... and it's an Acting position. He's not going to be permanent because I don't think he'd want to be permanent. But he's a very smart guy." pic.twitter.com/2wqOy7VtaS

— Rapid Response 47 (@RapidResponse47) June 4, 2026

Fannie and Freddie were both up in the early cash session, rising 5% and 3%, respectively. Shares in both mortgage giants tumbled earlier this week after Trump named Pulte as acting Director of National Intelligence, raising concerns that the dual role could delay the sale of the government's stake.

As of Friday morning, Fannie shares are down 34% YTD, while Freddie has slumped 38% YTD, as traders grow uneasy over the pace of the Trump administration's privatization plans. Optimism around potential share sales drove large gains in 2025.

Bose George, managing director at Keefe, Bruyette & Woods (KBW), wrote in a note, "We're comfortable with our most recently published numbers on the valuation—a current combined fair value in the $200–$250 billion range."

Related:

• Ackman Floats "Immediately Actionable" Blueprint To Free Fannie And Freddie

Christopher Maloney, mortgage strategist at BOK Financial, noted, "I don't believe I will ever see Fannie and Freddie released from conservatorship, at least not in my lifetime."

Tyler Durden Fri, 06/05/2026 - 14:00

University Of Oregon Grapples With Budget Crisis After Years Of Woke Excess

Authored by Jonathan Turley,

It appears that being unrelentingly woke means that you need fewer dormitories. The University of Oregon is facing a major budget crisis and will cut $65 million from its budget and close dorms due to low enrollment. That growing crisis, however, did not stop Oregon from burning almost a million dollars fighting against free speech. It also did not induce its faculty to offer greater intellectual diversity and tolerance to prospective students. Oregon is a cautionary tale for a generation of academic social warriors, but also an opportunity for those who want to restore balance in higher education.

Oregon has long been an example of academic orthodoxy. While most state schools begrudgingly yield to First Amendment demands and offer better free speech alternatives to private universities, Oregon is known as a hardened silo for the far left in teaching.

We previously discussed how Portland State University Professor Bruce Gilley, who was blocked from the Twitter account of the University of Oregon’s Division of Equity and Inclusion after tweeting “All men are created equal.” Oregon spent almost a million dollars fighting to bar such speech.

Such controversies have plagued the university for years, with no sign of self-examination by administrators or academics. The university was criticized for its monitoring of social media to punish errant thoughts or microaggressions. The law school’s law review was accused of anti-Israel discrimination.

The school previously gave special recognition to University of California (Santa Barbara) Professor Mireille Miller-Young, who criminally assaulted pro-life advocates on the campus of the University of California at Santa Barbara.  At the University of Oregon, she was honored as a featured speaker at the University of Oregon’s  Department of Women’s, Gender, and Sexuality Studies.  Part of its “black feminist speaker series,” Miller-Young’s work was highlighted by the College of Arts and Sciences and the Department of English to show “the radical potential of black feminism in the work that we do on campus and in our everyday lives.”

Now, the school is facing declining revenues and enrollments.

President Karl Scholz recently announced that this was due to lower out-of-state first-year enrollment, which means lower tuition revenue, increased costs, and a loss of grant funding.

Strangely, while closing dorms, the school is still building two new dorms.

Putting aside the school’s past budget judgment and discipline, the university’s reputation for intellectual orthodoxy deters many who do not want to pay tuition for their children to be indoctrinated or silenced.  Even with plunging trust in higher education, administrators and faculty cannot resist the temptation to exclude opposing voices.

Oregon is not the only school facing such shortfalls. Some woke institutions have closed entirely. The irony is that faculty would seem to prefer to see their institutions die than restore balance to their departments. However, this may offer a real opportunity for legislators and donors to force real changes in the culture of these schools.

As I have previously written, parents and students who value free speech must increasingly look to public universities where faculty are subject to constitutional guarantees. Public universities may be the final line of defense for free-speech advocates.

We now largely have two systems of higher education for those seeking education with a diversity of opinions and viewpoints. Except for outliers like the University of Chicago and other private universities holding the line on free speech, the orthodoxy found at private universities remains a barrier to many conservative and independent thinkers.

If we are to protect these bastions of free speech, legislatures will need to play a more active role in addressing the exclusion of both faculty candidates and speakers on public campuses. Too many faculty members continue to take the view that citizens are a captive audience expected to continue funding their departments, while excluding conservative or dissenting views held by many, if not most, citizens in a given state.

If faculty members want to continue maintaining echo chambers for their own viewpoints, they should have to seek private donors to sustain such intolerance and orthodoxy.

Legislatures can demand evidence that schools are maintaining intellectually diverse faculties in determining the level of continued support from citizens.

When some of us have argued for such campaigns, academics hypocritically claim that we are calling for political litmus tests or hiring based on political parties. It is an absurd argument that I have previously addressed, including in my book “The Indispensable Right: Free Speech in an Age of Rage.”

The call is for donors and legislators to withhold funding until they see real reforms, including greater diversity on faculties. They are not directing the hiring but looking at the results. The faculty members objecting to such calls have watched passively (or actively supported) the purging of conservative or libertarian faculty from universities and colleges.

When confronted by their own obvious ideological litmus tests, they shrug. Some acknowledge that their departments are overwhelmingly liberal, but insist that they just cannot find “competent” or “intellectually promising” conservatives. A few will admit that they do not believe that conservative views have a place in their departments.

It is impossible to deny the purging of faculties to create an academic echo chamber. If a large corporation effectively eliminated women or minorities while claiming no conscious discrimination, they would be trounced in court.

For years, I have raised concerns about the intolerance in higher education and surveys showing that many departments no longer have a single Republican as faculty members replicate their own views and values. There is no evidence that any faculty members (including those acknowledging the loss of virtually all faculty from the right of center) are honestly willing to reform their schools.

That ideological echo chamber is hardly an enticement for many facing rising tuition costs and relatively little hope of being taught by faculty with opposing views.

A Georgetown study recently found that only nine percent of law school professors identify as conservative at the top 50 law schools — almost identical to the percentage of Trump voters found in the new poll.

There is little evidence that faculty members are interested in changing this culture or creating greater diversity at schools.  In places like North Carolina State University a study found that Democrats outnumbered Republicans 20 to 1.

As college and university presidents face these shortfalls, it is time for legislators and donors to demand real proof of diversity in hiring and a change in the culture of these institutions. Otherwise, schools like Oregon will continue to close dorms as they push wokeness over wisdom.

Tyler Durden Fri, 06/05/2026 - 13:40

New Footage Reveals Ford Carrier Damage Far More Severe Than Pentagon Acknowledged

Newly surfaced footage obtained by CNN indicates that a severe fire aboard the USS Gerald R. Ford - the world's largest aircraft carrier - inflicted far more extensive damage than the Trump administration initially admitted to the public.

Early in the conflict it was forced to depart Mideast regional waters and retreat West in the Mediterranean, before undergoing extensive repairs at port in Croatia. Pundits were skeptical of official explanations, which suggested an accidental fire was sparked in the laundry room aboard the giant vessel.

US Navy file: Ford carrier

The major blaze erupted in March at a moment Iran claimed to have directly hit US naval vessels, but crisis was consistently downplayed by Pentagon officials at the time.

The obtained video reveals severely destroyed sleeping quarters, showing sailors' bunks entirely reduced to charred, twisted metal. The ceiling directly above the berthing areas appears completely gutted by the intense flames, while exposed wiring hangs from overhead and thick ash blankets the floor.

One sailor and eyewitness stationed on board the aircraft carrier told CNN: "I seriously thought we were going to lose the ship. It’s either fight or die."

This doesn't sound like some localized fire in a small compartment, but a massive emergency - which as we now now derailed the Ford's ongoing Iran mission in CENTCOM regional waters.

According to prior revealed details, it took the carrier’s crew approximately 30 hours of continuous damage control to fully extinguish the fire, clear out the wreckage, and importantly prevent the fire from reigniting. Some

600 sailors were displaced and left without access to their standard bunks, it had been revealed soon after the event took place.

⭕️ CNN Footage Reveals USS Gerald Ford Fire Was Far More Severe Than Pentagon Acknowledged

New footage obtained by CNN shows the fire aboard the USS Gerald R. Ford aircraft carrier two months ago was significantly more extensive than the Pentagon’s official account suggested,… pic.twitter.com/Ycew0G2h3y

— Drop Site (@DropSiteNews) June 5, 2026

While the definitive cause of the fire remains unclear, Tehran has claimed responsibility, asserting it successfully targeted the premier American aircraft carrier.

Again, this has fueled widespread speculation that the Iranian account could be accurate, given the Pentagon is known to have downplayed other instances where significant military hardware came under fire.

Prior reporting has also underscored that the blaze actually hindered combat operations against Iran. The incident has been confirmed to have resulted in a complete halt to two days of combat operations. Chief of Naval Operations Adm. Daryl Caudle, had described two months ago, "They fought that, put it out, and started flying sorties two days after that, so I’m very proud of that crew."

Tyler Durden Fri, 06/05/2026 - 12:40

Morgan Stanley Projects SpaceX Revenue Hitting Stratospheric $3.4 Trillion In 2040, $2.7 Trillion In EBITDA

Yesterday we shared a forensic analysis of the mechanics of the $75 billion SpaceX IPO and how to trade it, while specifically saying we are leaving the fundamentals aside. The reason for that is that the historicals of the company are, to put it mildly, problematic when it comes to projecting how the company grows into a multi-trillion behemoth. 

As a reminder, SpaceX posted revenue of just under $20 billion for the LTM period, with approximately $6 billion EBITDA and loss of $4 billion, virtually all driven by the conglomerate's Connectivity (Starlink) division and to a lesser extend, the Launch Services division. Solid numbers on their own, but do they justify a $1.75 trillion in valuation?

So how exactly does SpaceX get from here to there? 

We got the answer this morning courtesy of the WSJ which got its hands on an analysis shared by Morgan Stanley with top investors. 

Needless to say, to support the $1.77 trillion valuation Elon Musk’s SpaceX is targeting in its IPO, bankers are telling investors to look to the future.... far into the future. 

Morgan Stanley projects that SpaceX’s revenue could reach $3.4 trillion in 2040. The bank told investors the rocket maker’s adjusted EBITDA in 2040 could top $2.7 trillion, or a largely unheard of 80% EBITDA margin.

Some more details: the WSJ also notes that sellside analysts at Goldman Sachs and Morgan Stanley both projected SpaceX’s revenue would be near $160 billion in 2028, up from $20 billion currently. Goldman estimated that the rocket company’s revenue would exceed $470 billion in 2030, while Morgan Stanley projected it would reach nearly $330 billion. Goldman and Morgan Stanley expect SpaceX to have adjusted EBITDA of around $110 billion in 2028 and $352 billion and $230 billion, respectively, in 2030. 

Using these data, we have charted how SpaceX revenue and EBITDA would have to grow (assuming a 2028 baseline of $160BN in revenue and $110 billion in EBITDA). The projection is... aggressive.

To get to those stratospheric - no pun intended - levels, both banks anticipate revenue from SpaceX’s AI business to provide the bulk of the revenue after this year and grow dramatically. Goldman projected that unit would contribute around $322 billion in 2030, while Morgan Stanley projected around $190 billion that year. SpaceX reported revenue from its nascent AI division of $3.2 billion in 2025.

How realistic are these assumptions? Some thoughts from Brandon Carl, who writes that the MS forecast would require 14% US GDP growth over 14 years . The long-term average is 6.5%.:

"Most Successful Company Ever" Assumptions

• SpaceX commands 5% of US corporate profits
• Corporate profits become 15% of GDP, by far a record

Implications

• Total US corporate profits = $54 trillion
• US GDP = $205 trillion
• 14 year US GDP growth rate = 14%

"Still Aggressive" Assumptions

• SpaceX commands 2% of corporate profits
• Corporate profits are 10% of GDP, historically high
• Then US GDP = $770 trillion growing at 26%

Assume that EBITDA is about 1.75x profits, so profits = $1.54 trillion.

Goldman and Morgan Stanley are certainly redefining the hockeystick when it comes to the SpaceX IPO: the two banks snagged the top two roles out of the 21 banks on SpaceX’s IPO, putting their banks in line to get the biggest shares of the hundreds of millions of dollars of fees. Which is why if for whatever reason the IPO bombs or fails to launch they stand to lose the most.

So will people "buy" these ludicrous projections? Well, according to Bloomberg, with one week left to go until the actual IPO, the offering is already oversubscribed.

• *SPACEX IPO IS SAID TO DRAW MORE ORDERS THAN SHARES AVAILABLE

This means that the deal will almost certainly price at Musk's desired offering price of $135. What happens after that is anyone's guess. 

Tyler Durden Fri, 06/05/2026 - 12:05

Micro-Cap 'War Unicorn' Merlin Soars After Advancing AI Pilot For C-130 Military Plane

Aerospace and defense technology firm Merlin jumped in premarket trading after announcing that its AI-powered autonomous flight software for the C-130J Super Hercules cargo plane, developed with U.S. Special Operations Command, is moving toward formal testing.

Merlin wrote in a press release earlier that its AI-powered autonomous flight software has "successfully completed" the critical design review for the C-130J, adding the "milestone positions the program to enter a structured formal test campaign, including aircraft-level testing, reflecting a disciplined systems engineering progression from design through verification."

The Merlin AI Pilot will automate flight operations for the C-130J from takeoff to touchdown and is framed as an "operating system" for autonomous aviation.

Merlin has completed the Critical Design Review for its C-130J autonomy program with @USSOCOM. CDR is the milestone where our government customer reviews the detailed design of the system and accepts it is mature enough to move toward the aircraft. We cleared it.

Learn more… pic.twitter.com/8OgM9H5it8

— Merlin (@MerlinAero) June 4, 2026

The C-130 is the workhorse cargo plane of the U.S. military. The upgraded version, by slapping a "J" on the end, includes:

• Newer turboprop engines

• Six-blade composite propellers

• Digital cockpit and avionics

• Reduced crew requirements

• Better range, climb, speed, and fuel efficiency than older C-130s

Shares of the micro-cap defense company jumped 28% in premarket trading.

Merlin also pointed out that it is "rapidly advancing its AI-powered autonomy stack onboard the C-130J, with potential pathways for expansion across other Department of War or commercial aviation platforms."

The rise of "war unicorns" has been an important theme this year as the Department of War resets its procurement program toward startups and away from big legacy primes.

Goldman analysts also recognize the rise of defense startups and sat down with Palmer Luckey's Anduril earlier this week. Read the note here.

Tyler Durden Fri, 06/05/2026 - 11:50

The post Friday Morning Book Review: Cancelling Billionaires: The Urgent Case for a Wealth Tax appeared first on CEPR.

ISS Astronauts Told To Prepare For Possible Evacuation As Air Leak Worsens

NASA senior adviser and press secretary Bethany Stevens wrote on X that astronauts aboard the International Space Station have quickly shifted into SpaceX's Dragon spacecraft and are prepared to evacuate if needed, after cracks and leaks in the Zvezda service module transfer tunnel appeared to worsen.

"The Zvezda service module transfer tunnel, known as PrK, has suffered from cracks and leaks for some time, and has been mitigated by Roscosmos as much as possible to date. The cracks have always been a concern that NASA watches very closely," Stevens said.

According to NASA, the Zvezda service module is 43 feet long and contains living quarters, life support systems, communications systems, electrical power distribution systems, data processing systems, flight control systems, and propulsion systems.

The Zvezda service module transfer tunnel, known as PrK, has suffered from cracks and leaks for some time, and has been mitigated by Roscosmos as much as possible to date. The cracks have always been a concern that NASA watches very closely. NASA and Roscosmos have been working…

— Bethany Stevens (@NASASpox) June 5, 2026

Stevens continued, "The cracks have always been a concern that NASA watches very closely. NASA and Roscosmos have been working to determine the root cause of the cracks, and Roscosmos manages the issue through operational mitigation measures and periodic partial-repair efforts."

Out of caution, NASA ordered all four SpaceX Crew-12 members, along with NASA astronaut Chris Williams, to be on high alert inside Dragon during the repair.

NASA said it continues to work with Roscosmos and other station partners toward a more permanent fix for the long-running issue.

Reuters cited a senior NASA official who said the air leak has been monitored over the last few months but significantly worsened earlier this week, increasing from a loss of one pound of air per day to two pounds per day.

Tyler Durden Fri, 06/05/2026 - 11:20

The Atomic Crab

By Benjamin Picton, senior market strategist at Rabobank

The Atomic Crab

The Dow Jones hit a fresh all-time high yesterday, surging 1.73% to close at 51,562. The S&P500 posted more modest gains while the NASDAQ closed slightly lower as investors rotated out of some growth-oriented tech names and back towards healthcare and financials with more of a value or cyclical flavor.

Treasuries traded in a narrow range to close with yields little changed, while European sovereigns mostly saw modest declines in yields with the slightest hint of bull steepening evident in some curves. The Bloomberg Dollar spot index was down slightly but is inching higher again in early trade this morning.

Oil markets continue to be a point of focus. Front-month Brent futures closed 2.84% lower yesterday as markets remain of a Pollyanna state of mind over the status of the Strait of Hormuz. Dated Brent went the other way to post a (very) small gain yesterday after a 3.61% lift on Wednesday. The Singapore gasoil for spot delivery index was down 4.45% to $136.57/bbl.

Scuttlebutt over the status of US-Iran peace talks continued to dominate headlines yesterday. Following Donald Trump’s announcement of a Israel/Lebanon ceasefire that was contingent on Hezbollah ceasing its attacks on Israel we had confirmation this morning that Hezbollah has no intention of halting strikes. Hezbollah leader Naim Qassem made a statement on Thursday saying that “as long as the occupation exists, the resistance will continue” and calling the negotiations between the Lebanese government and Israel “absurd, humiliating and shameful.”

For Israel’s part, defence minister Katz has said that Israeli attacks in Southern Lebanon will continue and that the IDF will maintain “freedom of action” including in Beirut – which has been a red line for the Americans. Benjamin Netanyahu has recently faced criticism at home for being seen to be too compliant with American demands over strikes in Lebanon. Netanyahu faces an election in October, which polling suggests he may lose. Peace on all fronts was an Iranian condition precedent for reopening Hormuz and commencing the 60-day nuclear talks, but it seems that neither belligerent is interested.

Meanwhile, Donald Trump’s language on the Iran peace talks has gone from “deal imminent”, to “a deal soon, maybe” to “actually, we really don’t need a deal”. Trump showed signs of crabwalking away from a key demand that Iran hand over its stockpile of highly enriched uranium by saying that he does not need a deal with Iran to secure the uranium, but that there was no reason to send US troops into Iran to do so because the uranium is “entombed”.

Regular readers will recall that RaboResearch updated our Iran war baseline forecast two weeks ago to say that we didn’t think a meaningful deal would stick in the short term, and that the Strait of Hormuz would consequently remain functionally closed until September at least. The incompatibility of the two parties’ nuclear demands was a key factor in this judgement, so it is significant that Trump is now showing hints of softening his position on this point. However, capitulation on the highly enriched uranium or the limits of Iran’s nuclear enrichment program shifts the needle back towards US strategic defeat, with potentially grave consequences for all who have prospered under 80-years of Pax Americana.

We noted here yesterday that Bloomberg had reported that the IAEA had published a restricted document arguing that the nuclear risk posed by Iran is now higher than it was prior to the war. Subsequently, Bloomberg has reported that Iran has permitted IAEA monitors to inspect its Bushehr nuclear plant within the last week, but that Iran has steadfastly refused to comply with requests to verify the condition and location of its highly enriched uranium.

Needless to say, while the US-Iran stalemate continues global oil and oil products stocks continue to run down towards dangerously low levels. Vitol board member Tom Baker recently said that the oil trader estimated global demand destruction at about 4 million barrels a day, mostly from emerging Asia and Africa. China alone has reportedly reduced daily imports by close to 4 million barrels, while strategic reserve releases coordinated by the IEA have also been running close to 4 million barrels a day.

It’s not entirely clear whether or not there is some double counting in the Vitol estimates and China import drop-off, but the back of the napkin calculation gets us somewhere close to the ~12mbbl/day estimated supply loss from the Hormuz closure, and goes some way toward explaining why oil prices have remained remarkably low. Nevertheless, this remains a stocks to flows problem, and the cracks cannot be papered over indefinitely without supply tightness also being felt materially in developed markets.

While China’s reduction in oil imports helps planet earth rebalance energy flows, movements are afoot in Australia to counter Chinese monopsony power over the iron ore trade. China recently formed the state-owned China Mineral Resources Group to coordinate purchases of iron ore cargoes for China’s steel industry and exert market power to ensure that suppliers are paid in CNY, rather than USD. Australian firms supply more than 50% of global iron ore, but those firms have seen their market power eroded by alternative supply coming online in west Africa and an inability to coordinate to counter Chinese market power.

The Australian Financial Review this morning reports overtures from iron ore majors to the Australian government to counter monopsony buying power and give producers more say over how much they are paid and in which currency. Could we see state-backed single desk iron ore marketing in the land down under? Australia’s second-closest neighbour Indonesia recently did just that for coal, palm oil and ferroalloys, and has the world’s largest reserves of nickel – a critical input for Chinese stainless steel and EV battery production.

Elsewhere, there are again renewed hopes for peace prospects in Ukraine as Kyiv’s long-range drone strikes continue to cause havoc deep inside Russia. Vladimir Putin’s St Petersburg International Economic Forum (a kind of Davos for dictators) was recently interrupted by Ukrainian drone strikes on nearby Russian oil infrastructure – prompting Putin to vow that Russia will bolster its defenses against Ukrainian air attacks.

At the same time, Russia’s spring/summer offensive appears to have stalled and news outlets are reporting that Putin is signalling openness to a compromise on Ukraine in line with discussions held with President Trump in Alaska. Putin says that Ukraine needs to accept those compromises, but might there be some wiggle room for Ukraine to extract a better deal given the changed battlefield calculus? For his part, Zelenskyy is pushing for face-to-face talks with Putin to reach peace terms, but Putin says that he will only meet once terms have already been agreed, and that he will only meet in a neutral third-party country, which rules out EU member states in his view.

Tyler Durden Fri, 06/05/2026 - 10:55

"Stocks Should Go Up, Not Down": Trump Rages At Market Reaction To 'Great' Jobs Report

Global capital markets are a mess following this morning's hotter than expected rise in US employment.

Nasdaq is down 2%...

Yields are spiking dramatically...

The dollar is rampaging higher...

And Gold (and bitcoin) are getting clubbed like a baby seal...

All of which prompted President Trump to exclaim that "stocks should go up, not down" on the back of a strong jobs report:

It appears the President has not been watching for the last couple of decades as The Fed has become a mainstay and 'good' news removes their pillar of support...

...meaning 'bad' news for stocks.

Tyler Durden Fri, 06/05/2026 - 10:40