The post Five Big Take Aways from the May Jobs Report appeared first on CEPR.

 

 

This week, I sit down with Chris Davis, Chairman and Portfolio Manager at Davis Funds. They discuss his approach to managing risk and the key elements changing the economy. We also discuss Chris’s mentors including Charlie Munger, and how he settled into the family business.

A list of his current reading and favorite books is here; A transcript of our conversation will be available here shortly.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our BONUS Masters in Business Monday with Joe McLean, Managing Partner at MAI Capital Management, where he leads firm’s Sports & Entertainment division, serving 100s of pro athletes/entertainers across NBA, NFL, MLB, PGA + NASCAR. His path to finance runs directly through the locker room as a 4-year NCAA Division 1 player at U of Arizona. Dubbed the athlete’s “Money Whisperer” by the New York Times, he is known for his non-negotiable 60% savings mandate for clients.

 

 

 

Current Reading/Favorite Books

 

 

 

The post MiB: Beating the S&P For Generations with Chris Davis of Davis Funds appeared first on The Big Picture.

'Take The Badge Off': Former Ferrari Boss Slams New $635k EV That Company Thinks Will Attract 'Younger Buyers'

One week after Ferrari unveiled its first-ever all-electric car, called the Luce, the design continues to divide analysts. Some referred to the new model as a "mix between a Honda Accord EV and a Tesla," while others said that Tesla's Model S Plaid was far superior. The latest report from Goldman analysts provided new details about their most recent visit to Ferrari's headquarters in Maranello.

Last Friday, Ferrari hosted an investor day, which analyst Christian Frenes attended. He spoke with top Ferrari executives just days after the Luce reveal event in Rome earlier in the week.

Frenes said management framed the Ferrari Luce as an "additive range model designed to expand the customer base."

He continued:

Management reaffirmed the Luce as a strategic entry point to engage new demographics and regions, particularly in markets with higher BEV penetration such as Asia and the Nordics while also targeting a new and younger customer group. The exterior design intentionally distinguishes the EV from existing ICE and PHEV models. Management also reaffirmed it remains aligned with its "technological neutrality" approach continuing to sell V12s and V8s to those interested.

Beyond design, Ferrari's battery-powered, four-door, five-seat Luce has another problem: its price tag - a staggering 550,000 euros, or about $638,660. If Ferrari expects that to open the brand to a younger, broader customer base, management certainly has a different view of the world - one that isn't grounded in reality.

For starters, Tesla's Model S Plaid costs only a fraction as much and, on key performance metrics, appears to outperform the Luce. The Model S also comes with Full Self-Driving, a feature we are fairly certain Ferrari's first EV lacks.

By the end of last week, Ferrari CEO Benedetto Vigna appeared to be on damage-control duty after shares dropped in response to negative investor reaction to the Luce's design and performance specifications.

crazy.. pic.twitter.com/DTNVAYNPZX

— Tesla Owners Silicon Valley (@teslaownersSV) May 27, 2026

Let's not forget that Ferrari hybrids are depreciating faster than their petrol-powered counterparts. This is a sign that car collectors are shunning anything electric (read the report). 

Shares have yet to recover to pre-Luce reveal levels.

Beyond the terrible design and high price, one could debadge the Luce, and it would be hard to decipher the car from a Kia or Toyota or even a Nissan ... 

Ferrari Luce, explained pic.twitter.com/F0vRf03cwj

— Trung Phan (@TrungTPhan) May 26, 2026

That problem itself has infuriated Luca Cordero di Montezemolo, the former Ferrari president, who told local media that the Luce "risks destroying a legend, and I'm deeply sorry. I hope they at least remove the Prancing Horse from that car."

American automotive YouTuber Doug DeMuro said Luce has the specs of a "nice Polestar" .. .

Professional subscribers can read the full Ferrari note at our new Marketdesk.ai portal.

Tyler Durden Sat, 06/06/2026 - 08:45

UK Conservatives Blast Labour North Sea Ban As 'Utter Madness'

Authored by Tsvetana Paraskova via OilPrice.com,

The current UK government's policy of not allowing new drilling in the UK North Sea is “utter madness” as billions of barrels of untapped oil could benefit the UK industry and reduce Britain’s reliance on imports, Kemi Badenoch, the leader of the opposition Conservative Party, has said.

The ruling Labour government of Sir Keir Starmer has recently moved to permanently ban new oil and gas licenses in the UK section of the North Sea, drawing criticism from the UK offshore industry associations and from the Tories.

The Conservatives’ Badenoch commented this week on a new study by the University of Aberdeen, whose researchers said on Wednesday that it would be “economically, environmentally, and strategically beneficial for the UK to prioritise domestic oil and gas production rather than increasing reliance on imports.”

The University of Aberdeen’s peer-reviewed study found that significant untapped potential remains in the West of Shetland basin, which is estimated to contain about 4.7 billion barrels of oil equivalent (boe) yet to be discovered.

The study highlights that the remaining potential in the area could extend the life of the UK oil and gas sector, said Nick Schofield, Professor of Igneous & Petroleum Geology at the University of Aberdeen.

“West of Shetland is not a depleted frontier - it is a technically demanding but strategically important energy province,” Schofield noted.

The study showed the “utter madness” of the ruling Labour in opposing drilling in the North Sea, Badenoch said.

“The University of Aberdeen survey just demonstrates the utter madness of the stance taken by Keir Starmer and John Swinney,” the leader of the Conservatives said in remarks carried by Belfast Telegraph.

“Domestic oil and gas are vital to the nation’s energy security, as well as being the economic lifeblood of the North East,” Badenoch said.

“Yet the industry is on its knees due to the windfall tax and the ban on new developments. The Conservatives would scrap both immediately,” she added.

Tyler Durden Sat, 06/06/2026 - 08:10

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

 

Sign up for our reads-only mailing list here.

~~~

To learn how these reads are assembled each day, please see this.

 

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

Has Trump Opened Pandora's Box?

Authored by John Rosenburger, Senior Fellow at Eisenhower Media Network

The limits of U.S. military power are now fully exposed.

2.5 months in to the U.S.-Israeli war against a nation that posed no threat to the United States’ vital interests, justified by a pyramid of lies, several things are abundantly clear. President Trump failed to define clear and viable political objectives to achieve in our role as Israel’s proxy in yet another war of choice. “Viable” here meaning objectives that are realistically attainable through the military means at a nation’s disposal.

In his classic work Strategy, British theorist B. H. Liddell Hart emphasized that a political leader’s foremost duty is to ensure that war aims are grounded in military reality. As he famously warned, political objectives must “not demand what is militarily impossible.”

Yet that is precisely the error President Trump committed.

Credit: Wikimedia Commons & Amazon

Without clearly defined political objectives, it is impossible to construct U.S. Central Command (CENTCOM), which is in charge of military operations in West Asia and appears to be moving from one ineffective tactic to the next without any unifying operational design. The repeated bombing of military‑related targets across a country the size of Western Europe with more than 90 million people is not a strategy; it is a tactic untethered to any discernible operational or strategic end state.

By limiting ourselves almost entirely to the use of airpower—fully aware that the American public will not accept another protracted ground war in the Middle East, particularly on behalf of Israel’s interests—the Trump administration has boxed itself into an approach with no historical precedent for success. No regime of Iran’s scale has ever been overthrown through airpower alone, and there is no reason to believe this conflict will be the first.

Despite repeated assurances that the war is being won, President Trump has provided no stable or coherent definition of what “victory” actually means. Is it regime change and internal overthrow of the Iranian government? Is it unconditional surrender of Iran’s armed forces? Is it the seizure of nuclear material previously claimed to have been obliterated? Take your pick. The absence of a clear, consistent political end state leaves military commanders struggling to determine what they are supposed to achieve.

Credit: Evan Vucci, @realDonaldTrump/Truth Social

History shows that wars fought without well‑defined political objectives, matched with a viable military strategy, tend to devolve into wars of attrition—conflicts that favor the side with greater resilience and willingness to endure. We see that historical truism unfolding before our eyes. We fail to appreciate that Iran is waging a fundamentally different kind of war, one rooted in national survival, and that resolve has shaped the character and trajectory of the conflict.

It is also clear that this war was based on a host of flawed assumptions. The Trump administration assumed that by assassinating the Grand Ayatollah Khamenei, the IGRC and security apparatus of the nation would collapse, and the Iranian people would flood into the streets to violently overthrow the government. How they would do that while being unarmed defies logic. That overthrow, of course, didn’t happen. It had the opposite effect. The government and the people have never been more unified.

Credit: Hamshahri Photo/Wikimedia Commons

The Trump administration assumed that the massive armada of air power it would employ would quickly destroy Iran’s capability to retaliate. It didn’t. It assumed that the Iranian armed forces would not attack U.S. bases and embassies in the region. They did. It assumed that Iran did not have the capability to hide and accurately employ thousands of ballistic missiles and drones for days and weeks on end. It did; another gross failure of both U.S. and Israeli intelligence agencies as the Iranians pound Israel’s cities, U.S. bases, and Gulf nations night after night.

The Trump administration assumed Iran was incapable of closing the Strait of Hormuz if the U.S. military destroyed Iran’s naval surface fleet. They ignored the fact that Iran had several other means of interdicting the movement of any ships through the Strait—a plethora of different mines, small attack submarines designed to operate in shallow water, swarms of armed fast boats, multiple types of attack drones, and an arsenal of ballistic and hypersonic missiles. Equally concerning, the administration overlooked the fact that Lloyds of London and other maritime insurance companies would not underwrite the loss of tankers and cargo ships that attempted to cross the Strait. Iran will ensure the Strait remains closed using its arsenal of asymmetric weapons they’ve designed for just that purpose, giving them powerful leverage in future negotiations.

Credit: MassLive, AP, CalMatters

The result? Cascading and disastrous effects. The U.S.-Israel war against Iran initiated a global economic crisis, strangling the production and transportation of oil, liquid natural gas, urea, helium, and aluminum from the nations surrounding the Persian Gulf. The war further increased U.S. national debt, which is just shy of $39 trillion dollars and growing. The Trump administration increased our national debt by $1 trillion in the first 5 months of this year, and borrowed another $343 billion last month alone. Now, the Department of War is asking Congress for another appropriation of $200 billion to cover the unexpected costs of this war of choice. For the first time in our nation’s history, our debt-to-GDP ratio is 122 percent, with no sign of decreasing. The consequences could be catastrophic to our economy in the months and years ahead if left unabated.

This war of choice has practically exhausted the U.S. military’s inventory of offensive and defensive missiles, inventories that cannot be replenished for years. It’s increased our country’s strategic vulnerability and reduced the Pentagon’s ability to deter other threats around the globe. The limits of U.S. military power are now fully exposed. Russia and China smile with glee.

Nine U.S. military bases in the Gulf States have been destroyed or abandoned. The Gulf States are unlikely to ever welcome American forces back into their countries, as the Trump administration has demonstrated that the United States cannot and will not protect Gulf Arab allies. The administration has essentially destroyed the Gulf Cooperation Council (GCC) coalition and also managed to alienate most NATO allies in the process.

Russia is enjoying a windfall in oil and natural gas sales and revenue as it becomes the principal supplier of oil to China, India, Europe, Japan, South Korea, and other nations that relied on oil from the Gulf nations. Airlines across the globe are rationing jet fuel and reducing flights. Prices for gas and diesel are exploding at the pump here in the United States, which will thrust additional inflation on the American people struggling to afford the costs of food, housing, transportation, and medical insurance.

Credit: U.S. Department of State/Wikimedia Commons

Furthermore, given that the U.S. attacked Iran with no warning twice during earnest negotiations the past year, Iran has no reason to ever trust us again and negotiate an end to this conflict. We’re witnessing the unintended consequences of a war of choice that was poorly conceived and poorly planned, driven entirely by hubris. In two short months, Iran has gained the operational and strategic initiative and will determine the outcome of this war. It seems the Trump administration has opened Pandora’s Box.

Lastly, the administration has failed to define a path to victory that culminates in the restoration of a durable peace in the Middle East.

Professor Donald Stoker captures this imperative in his illuminating book Why America Loses Wars, noting that “…if the political leadership has done its job, their definition of victory [the political objective] includes a clear vision of what they want the post-war situation to look like. Ultimately, as Cicero tells us, war is about the restoration of peace; if it does not seek this, the war is not just. Union General William Tecumseh Sherman insisted that “The legitimate object of war is a more perfect peace. War is fighting for the peace we want.”

All were right.

Absent an effective political and military strategy that restores stable and enduring peace between nations in the region, this war risks becoming yet another U.S. exercise in violence untethered from purpose; a war ending in failure, useless destruction, and economic depression that will require years to overcome.

Tyler Durden Fri, 06/05/2026 - 23:25

Where It's Hardest To Afford A Home

Big cities like Hong Kong or Los Angeles are well-known for their expensive real estate markets. But there are also plenty of housing markets you wouldn’t necessarily expect among the least affordable – including several in Australia, New Zealand and Canada.

As Statista's Tristan Gaudiaut details below, according to a 2026 ranking by Forbes, Hong Kong remains the world’s least affordable housing market, with median home prices still more than 16 times higher than median pre-tax household incomes, based on the dominant housing type in each market.

You will find more infographics at Statista

It is followed by Sydney (13.8) and Vancouver (11.8), while several U.S. cities, including San Jose (11.4), Los Angeles (10.9) and Honolulu (10.5), also rank among the least affordable.

The first European market in the ranking is London, with a price-to-income ratio of 8.1.

Overall, the list highlights the continued dominance of major cities in Australia, Canada and the United States.

While affordability ratios have eased slightly in some markets in recent years, the broader trend remains unchanged.

Across most major urban areas, ratios still hover well above historic norms, often in the 8-to-14 range, meaning housing costs continue to outpace incomes by a wide margin and keep homeownership out of reach for large parts of the population.

Tyler Durden Fri, 06/05/2026 - 23:00

NASA Ends Mars Mission 6 Months After Losing Communication With Spacecraft

Authored by T.J. Muscaro via The Epoch Times,

After more than a decade of service, unlocking treasure troves of insights into Mars's atmosphere, NASA announced on June 3 that its MAVEN mission has come to an end after a still unknown anomaly threw the spacecraft off course and drained its battery.

NASA’s MAVEN mission is observing the upper atmosphere of Mars to help understand climate change on the planet. MAVEN entered its science phase on Nov. 16, 2014. NASA's Goddard Space Flight Center

Short for "Mars Atmosphere and Volatile Evolution," NASA's MAVEN mission launched in November 2013 to study the Red Planet's atmosphere, specifically how it interacts with solar flares and other types of space weather, as well as readings of the dust storms. The mission was supposed to last one year, but the hardware continued to operate for another decade, providing insights crucial to sending a human crew there with the right protection in the future. It was also able to give ground systems early warning of incoming coronal ejecta from the sun.

"MAVEN has profoundly advanced our understanding of Mars's atmosphere, climate history, and habitability, making it a cornerstone of NASA's exploration of Mars for over 11 years," Tiffany Morgan, director of NASA's Mars Exploration Program, said during a press call. "MAVEN's findings have helped shape future mission designs and have strengthened our understanding of Mars as a system."

MAVEN additionally served a crucial communication role as part of NASA's Mars Relay Network, working alongside the Mars Reconnaissance Orbiter and other spacecraft to pass along priceless data collected by rovers on the Martian surface back to Earth. It was also recruited to help observe the interstellar comet 3I/ATLAS as it passed through the solar system.

Mission leaders last heard from the spacecraft on Dec. 6, 2025, just before it made a routine pass behind the Red Planet - similar to how NASA lost signal with the Artemis II crew as they flew around the far side of the moon. Loss of signal was only supposed to last 30 minutes.

Mission leaders then explained that "a brief fragment of telemetry data" was able to be recovered by analyzing radio signals picked up by open-loop receivers on NASA's Deep Space Network. That data showed the MAVEN spacecraft was in "safe mode" and caught in a spin when it emerged from behind Mars.

The spin indicated that there was a disruption in the spacecraft's trajectory, and a review board concluded that the rotation caused batteries to drain, rendering it unrecoverable.

An anomaly review board was created in February to determine what happened to the spacecraft while it traveled around the far side of the planet. Mission leaders expected more questions to be answered in the coming months and declined multiple requests to share their own speculation of what happened.

As for MAVEN's fate, NASA officials said that the spacecraft will continue to orbit Mars for 50 to 100 years.

Tyler Durden Fri, 06/05/2026 - 22:35

Moscow To Host US-Russia Hockey Match Week Of July 4th

The world's two largest nuclear powers are apparently turning to old school, Cold War-style sports diplomacy to thaw out their deeply frozen bilateral relations, even as there's as yet no solution to the grinding Russia-Ukraine war.

Russian and American ice hockey players are scheduled to face off in Moscow on July 1. President Vladimir Putin first proposed holding hockey matches between Russian and American players in both countries during a direct phone call with President Trump.

Getty Images

Soon after that March 2025 phone call the Kremlin noted at the time that Trump had "expressed support" for the initiative.

According to the American Chamber of Commerce in Russia (AmCham Russia), the event is part of a broader series of matches. Notably the initial match is timed just ahead of the milestone 250th anniversary of US independence on July 4th.

"We hope this will help melt the ice that formed between us," AmCham Russia President Robert Agee said Thursday. The announcement was made at the 29th St. Petersburg International Economic Forum (SPIEF), which is currently ongoing.

He confirmed that Russia and the US would play the match, expressing that it will be a "friendly" game, according to TASS.

While it's unclear which players will make up the rosters from either side, The Moscow Times has cited that Agee said "NHL superstar and prominent Putin supporter Alexander Ovechkin will be involved in the event, though the full roster will be a mix of professional and amateur athletes. He did not provide further details."

The International Ice Hockey Federation banned Russia from all official international tournaments immediately following the 2022 invasion of Ukraine, and so this event constitutes a rare, symbolic defiance of the international sports body and its regulations set down.

In the meantime, the Ukrainians are fuming over the plan, as they want to see Russia as isolated as possible. But a US against Russia hockey game, covered by international media and featuring superstar athletes on the ice would be anything but 'isolation'.

Back when Putin was literally on the ice himself for an exhibition...

WATCH: Putin scores 8 goals in an exhibition hockey game in Russia pic.twitter.com/XePFMRIej9

— Bloomberg Originals (@bbgoriginals) May 10, 2019

Indeed it in and of itself would be a big diplomatic win for Moscow, but the White House sees this as essentially worth it if it can lead to peace, and eventual normalization of relations with Russia.

Tyler Durden Fri, 06/05/2026 - 21:20

The Market Is Starting To Price In Something Most People Still Don't See

Authored by Milan Adams,

There is a strange disconnect developing between financial markets and the average person.

Most people still see the situation with Iran as another distant geopolitical story. It appears on television for a few minutes, disappears behind domestic political news, and then returns a few days later when another headline emerges. Investors, however, are beginning to treat it very differently. They are not watching the negotiations because they care about diplomatic symbolism. They are watching because a growing number of traders believe the global economy may be far more vulnerable to a prolonged disruption than policymakers are willing to admit.

The irony is that the biggest threat is no longer war itself. The biggest threat is uncertainty.

For months, markets convinced themselves that a deal between Washington and Tehran was only a matter of time. There would be disagreements, public threats and last-minute complications, but eventually economic reality would force both sides toward some form of compromise. That belief became so widespread that many investors stopped considering what would happen if the opposite occurred.

Now that assumption is being tested.

Over the last several days, optimism surrounding a diplomatic breakthrough has faded once again. Conflicting reports about the future of the negotiations have pushed oil markets into another period of volatility, and prices remain dramatically higher than they were before the crisis began. Brent crude recently climbed back above $95 per barrel after fresh uncertainty surrounding the talks, while industry executives warned that the market may still be underestimating the risks ahead.

What makes this particularly dangerous is that the global economy no longer has the same shock absorbers it once had.

Back in 2008, governments could throw enormous amounts of money at a crisis. During the pandemic years, central banks unleashed trillions of dollars in liquidity. Today many of those same governments are carrying debt loads that would have been considered extraordinary only a decade ago. Interest costs are rising. Economic growth is slowing. Consumers have spent years absorbing inflation that never fully disappeared. The financial system looks stable on the surface, but underneath that surface there are clear signs of fatigue.

That is why the Strait of Hormuz matters so much.

Most people know it is an important shipping route. What they often do not understand is how concentrated global energy flows actually are. In peacetime, roughly one fifth of the world’s oil and liquefied natural gas moves through that narrow corridor. Think about that for a moment. One out of every five barrels of oil consumed somewhere on this planet depends on a maritime bottleneck that can be measured in miles rather than hundreds of miles.

The modern global economy was built on the assumption that this route would remain available.

Everything from airline tickets to fertilizer prices is connected to that assumption.

The danger is not necessarily a complete shutdown. Markets do not need a worst-case scenario to panic. They only need enough uncertainty to begin pricing in the possibility of one. Once that happens, shipping costs rise, insurance premiums increase, inventories start being accumulated instead of consumed, and companies begin preparing for disruptions that may never actually occur. Ironically, those preparations themselves can create economic damage.

That process may already be underway.

One of the most interesting comments this week came not from a politician but from one of the world’s largest oil traders. A senior executive at Vitol warned that markets could be seriously underpricing the risks associated with the current situation. According to him, the real stress may not appear when headlines are at their most dramatic. It may appear months later when refiners and industrial consumers suddenly discover that physical supplies are harder to obtain than expected.

History suggests he may have a point.

Most economic shocks do not begin with a dramatic collapse. They begin with a series of small disruptions that seem manageable in isolation. A delay here. A shortage there. Higher insurance costs. Longer shipping routes. Reduced inventories. Rising borrowing costs. None of these developments look catastrophic on their own. The problem appears when they begin reinforcing one another.

By the time ordinary consumers notice the impact, the chain reaction is usually well advanced.

Tyler Durden Fri, 06/05/2026 - 20:55

Climate Change: No. 1 Problem Of No Nation?

Despite claims of new records for global high temperatures every few years now, the topic of climate change has still not reached the top of the agenda for many people.

As Valentine Fouurreau reports, data from Statista Consumer Insights shows respondents in none of the 32 nations covered by the survey collectively rated climate change as the most important problem for their own country when asked to name the issues that were of the biggest significance to them.

You will find more infographics at Statista

Of the countries included in our infographic, Japan comes closest with climate change being named as a severe issue by the fifth-highest number of respondents, followed by China and India in rank 7.

Generally, this is more of an expression of the few problems of Japanese and Chinese people, as still only 27 percent and 21 percent, respectively, rated the climate change issue as severe.

Despite ranking only seventh in India, climate change was recognized as a big problem there by more people, 34.

Among developed nations such as France, Germany, South Korea or the U.S., worry about climate change hovered between 23 and 28 percent.

Tyler Durden Fri, 06/05/2026 - 20:30

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.