Follow The Risk

Via SchiffGold,

Tracing the distribution of risk is an important method that is helpful for understanding the trade-offs of any government action. Almost every government action reduces risk for some group and repackages the risk and forces another group to bear it. The government often serves as a hedge against risk, but it is important to understand who the payer is and what the costs are before blindly signing off on state control. The most common form of risk relates to the concept of "concentrated benefits, dispersed costs." Small groups like farmers or steel producers can hedge against industry risk by receiving benefits that are spread across the entire American tax base. The inverse of this problem is when small groups must make large sacrifices to reduce the overall risk of the total population. There are few situations where government risk management is worth it, and most of them are when the repackaged risk is paid fairly by those who receive the benefit. Growth in government risk management both incentivizes more risk and particularly damages those who avoid creating risk.

"Concentrated benefits, dispersed costs" is a phrase that describes the incentives behind targeted government industry policy. Because some groups are compact and organized with a compelling reason to coordinate, they are able to present their story clearly and effectively to government actors. The taxpayers who will pay for the benefits transferred to the special interest groups are not able to easily coordinate and they have no compelling reason to, as the burden of each individual is relatively small when compared to the cost of coordination.

When industries like banking or agriculture face large risks and can convince the government that it is needed to protect them, the industries are able to turn their risk into a guaranteed cost for taxpayers. This makes businesses less responsible, increasing the risk, and putting them into conflict with the people who involuntarily bear their risk. This problem only continues to worsen over time as the government grows and more industries recognize the benefits of state protection. Particularly when industrial failures already damage the nation, forcing taxpayers to insure them even in times of stability only deepens the problem.

Another form of risk redistribution is when many individuals shift their risk to smaller groups. One obvious example of this is when equity investors and businesses advocate for lower interest rates at the expense of those with heavy positions in bonds and cash. Inflation simply turns the risks of those with higher demand for present consumption into a guaranteed cost for those with a preference for future consumption. Many regulations make producers responsible for any problems with their products, which reduces customer risk, but damages customers in the long run as producers on the margin often leave the market. Although some of these government actions might make a specific problem better in the short term, they are extremely dangerous, as they put the few at the mercy of the many. Although this occurs most saliently with financial and economic risk, the expansion of the state may take risk redistribution to areas of life with much more troubling consequences.

An expanded welfare state may lead to the promotion of assisted suicide, and other violations of life, for those with a high risk of large medical costs. Risks are best borne by those who create them, as they have enough information to take on risk intelligently. While the voice of the majority can call for government-funded insurance in all areas of life, they cannot change the nature of risk.

The fundamental purpose of government is to create institutions that manage the existential risks that no set of private individuals would be interested in or able to manage. Most of the risks that the government manages against are far from existential, and even more of them would be solved by the market if given enough time and institutional stability. The government is most capable when it manages risks that are experienced by all and turns them into a financial burden shared by the same group. National security and the protection of property rights are two examples of risk prevention where something borne by every citizen is turned into a financial cost for the tax base. While not every citizen contributes equally to the prevention of these risks, every American benefits from them. Whenever a new risk concerns the public, examine how quickly it becomes a government responsibility to fix it.

Evaluate to whom the proposed solution is shifting the risk. Is the benefit of risk prevention worth the guaranteed cost? Do those creating the risk contribute fairly, or will they merely be incentivized to create more risk?

Tyler Durden Thu, 08/27/2026 - 14:20

Qatar And Kuwait Restore 70% Of Pre-War Oil Exports Through Hormuz

Authored by Tsvetana Paraskova via OilPrice.com,

Qatar and Kuwait have managed to boost their crude oil exports from the Strait of Hormuz to 70% of pre-war levels as they followed the United Arab Emirates in shuttling oil through the chokepoint and using ship-to-ship transfers in the Gulf of Oman, anonymous traders told Bloomberg on Thursday.

Before the Middle East conflict, Qatar and Kuwait collectively exported about 2 million barrels per day (bpd) of crude oil via the Strait of Hormuz.

They don't have alternative routes as Saudi Arabia and the UAE do, and struggled to ship oil out of the Persian Gulf in the first couple of months of the conflict.

But around June, Kuwait and Qatar began shuttling crude out of Hormuz and offered it for transfers outside the chokepoint in the Gulf of Oman.

The increasing Kuwaiti and Qatari oil volumes add to the barrels that Saudi Arabia and the UAE have been sneaking through the Strait of Hormuz and on routes bypassing it since the start of the war.

The UAE has managed to boost its oil exports to pre-crisis levels as early as June, as it has kept pushing crude through the Strait of Hormuz and beyond. It has been shuttling crude through the chokepoint to load it on larger vessels outside the Strait, maximizing the use of its onshore pipeline to ship crude from the west to the east of the country, bypassing Hormuz, and shipping tankers through the Strait in dark mode.

Saudi Arabia, for its part, has also started offering STS transfers of Gulf crude outside Hormuz, and has been using the Red Sea and Egypt's Mediterranean ports to bypass the Persian Gulf's chokepoint.

Thanks to the shuttle services and dark activity, total oil flows through the Strait of Hormuz have now risen to about 7-8 million bpd, up from about 4 million bpd in the middle of July, according to Bloomberg's trading sources.

The under-the-radar operations and the Gulf states' creative solutions to the threats in the Strait of Hormuz and the Red Sea have helped keep oil flowing, even if at much reduced rates compared to February levels.

The higher oil volumes exiting the Persian Gulf have kept benchmark crude oil futures in check despite the tightening global fuel markets.

Tyler Durden Thu, 08/27/2026 - 13:40

Average 7Y Auction Stops On Screws As Foreign Demand Drops

A stellar 2Y auction, a subpart 5Y, and it only makes sense that we end the week with a perfectly average sale of $44BN in 7Y bonds.

The last coupon auction of the week priced at a high yield of 4.512%, up from last month's tailing 4.473%, and on the screws with today's When Issued 4.512%. Remarkably, this is the 3rd 7Y auction to price on the screws in 2026 alone, suggesting this tenor may be the most relevant one for market accuracy ahead of the actual auction. 

The bid to cover rose to 2.505, up from 2.486 last month and the highest since May; it was also above the recent average of 2.491.

Internals took a small step back: Indirects were awarded 60.8%, down from 70.2% in July and below the six-auction average of 65.1%. And with Directs taking 27.0%, up from 16.9% last month, Dealers were left with 12.3%, the lowest since May if above the recent average of 11.8%.

Overall, this was a snoozer of an auction and maybe that's for the best one week after the Bessent Buyback Bluff sparked market chaos and turmoil across the entire yield curve. In short: things are mostly back to normal, even if yields on the long-end remain just shy of multi-year highs.

Tyler Durden Thu, 08/27/2026 - 13:21

Dollar General Jumps On "Traffic-Led Momentum" As $4 Gas Accelerates Consumer Trade-Down

Dollar General shares surged 6% in the cash session Thursday morning after stronger customer traffic fueled a second-quarter earnings beat and prompted the discount retailer to raise its full-year outlook.

Jefferies analyst Corey Tarlowe wrote in a first take on earnings that "traffic-led momentum drives another beat."

The discount retailer, with 21,000 stores nationwide, most of them located in low-income ZIP codes, reported second-quarter earnings of $2.48 per share, up from $1.86 a year earlier and well above the Bloomberg Consensus estimate of $2. Revenue increased 5.2% to $11.29 billion, while comparable sales rose 3.5%, exceeding the 2.63% expected by analysts tracked by Bloomberg.

Operating profit in the quarter jumped 29% to $769.2 million, beating the $637 million estimate. Gross margin expanded to 32.6% from 31.3% one year ago and came in well above the 31.7% consensus forecast.

Tarlowe said the results reflected "broad-based category strength" and continued traffic momentum, with customer visits rising 2%.

Dollar General raised its 2027 comparable-sales growth forecast to a range of 2.5% to 2.9%, from a previous range of 2.2% to 2.7%. The retailer now expects earnings of $7.80 to $8 per share, up from $7.20 to $7.45 and also above estimates.

That strength may be a little deceiving and might not signal a healthy consumer. Dollar General's traffic-led growth suggests cash-strapped households continue to trade down.

Last week, Walmart reported that sales were under pressure as lower-income consumers pulled back amid a national average gasoline price above the politically sensitive $ 4-per-gallon threshold and a rising-rate environment.

Wells Fargo analysts remained cautious about whether the discount retailer’s momentum could continue into 2027, even as they described the second-quarter results as encouraging.

Shares are up 6% on the session, breaking above a summer high. 

Meanwhile, Treasury Secretary Scott Bessent told CNBC's Squawk Box earlier this month, "I got sick of hearing about this K-shaped economy. I can say here definitively, the K-shaped economy is over."

Tyler Durden Thu, 08/27/2026 - 13:20

California Senate Passes Bill To Fine Influencers Over Undisclosed Paid Political Posts

Authored by Savannah Hulsey Pointer via The Epoch Times,

The California Senate passed a bill on Aug. 24 to fine content creators who make paid political content without disclosing the compensation.

The legislation, authored by Democratic Assemblymember Marc Berman, will still need a vote in the state Assembly before it reaches Gov. Gavin Newsom's desk.

Assemblyman Marc Berman listens to witness testimony while presenting his Assembly Bill 3209 to the Senate's Appropriations Committe at the Capitol in Sacramento, Calif., on June 17, 2024. Travis Gillmore/The Epoch Times

The governor will have until the end of September to either sign or veto the bill.

"Voters should have a right to know whether or not campaigns are paying for the messaging that they're seeing," Berman said last month.

Both Texas and California require content creators to include disclaimers on political posts. The new legislation is an effort to enforce the law.

Currently, the state's campaign watchdog can request that a court compel an influencer to disclose the monetary connection, but it could take months for the process to reach fruition.

However, Berman's bill would give California's Fair Political Practices Commission the power to fine both influencers and political committees if they violate the law, bypassing the court's involvement.

Creators can face fines of up to $5,000 per violation.

Southern California content creator Dustin Torreverde, who has not been paid for political content, said he believes it is important for influencers to disclose this kind of payment, but is concerned the bill could cause an unfair burden for people in his field.

"A lot of us are very small creators," he said. "So if we were to get penalized and we have to get lawyers, stuff like that, it's going to be very difficult for us."

California's Senate action comes about a month after Sen. Adam Schiff (D-Calif.) introduced federal legislation to require disclosure of the political affiliation of influencers. That bill has not yet been brought up for a vote.

The Promoting Authenticity with Influencer Disclaimer (PAID) Act would give the Federal Election Commission the authority it has pursued for years.

The act would amend the Federal Election Campaign Act to require anyone paid by a political committee or candidate to add a clear disclaimer that they were paid to post the content.

"As more and more information in American life is shared through informal communicators like influencers, we need to recognize the risks of proliferating paid political speech without the guardrails that apply to all other forms of political advertising," Schiff said in a statement.

"An influencer can reach far more than a billboard or even a broadcast ad in 2026, but people deserve the same understanding of who is behind that post and if they are paid for it. The PAID Act is a bicameral solution to apply the same bipartisan standards we've applied to other advertising to this new class of political speech."

Rep. Mark Takano (D-Calif) authored the House companion legislation.

"Our social media feeds must be fixed," he said in a statement.

"Users deserve to know if a creator has been compensated by a campaign to post for them. Senator Schiff and I introduced the PAID Act because current campaign disclosure laws have not kept up with this new creator economy, and voters deserve to know who is financing their feeds before they vote."

The Associated Press contributed to this report.

Tyler Durden Thu, 08/27/2026 - 13:00

Zinc Hits Four-Year High As "Extremely Thin" Physical Supply Fuels Squeeze

Zinc futures in London are headed for their largest monthly close since January, with prices hitting four-year highs this week amid tightening physical supplies.

London futures for the industrial metal initially gained as much as 1% before reversing course. Zinc fell .8% to $3,861 a ton as of 11:40 a.m. local time, halting a seven-day rally.

Despite the pullback, zinc's physical market remains extremely tight.

"Supply constraints boosting zinc: Zinc price has risen 31% since March to $3,966, driven by declining mine output, operational disruptions (fires, delays, and lower grades), and limited project development outside China," Jefferies analyst Sagar Sahu wrote in a note on Tuesday.

Sahu added, "ILZSG, international association for zinc & lead, has revised its 2026 global zinc market forecast to a 19kt deficit vs a 271kt surplus earlier. We raise our FY27-28E zinc price assumptions to $3,615-3,700, still 7-9% below spot prices."

Guangzhou Futures analysts separately noted, "Available physical liquidity is at extremely thin levels" on the LME, adding, "Before mine output recovers materially, smelting costs will provide a strong floor for zinc prices."

Zinc's cash-to-three-month spread widened into backwardation of more than $190 per ton on Thursday, after approaching $200 per ton on Wednesday, the steepest since December.

According to Fastmarkets, treatment charges, the fees miners pay smelters to process ore into zinc metal, have fallen as low as minus $110 a ton. This comes as ore shortages force smelters to compete for concentrate. Persistent negative fees could pressure smelter margins, trigger production cuts and deepen the supply squeeze.

Similarly, copper futures in London are showing signs of supply stress, including widening short-term spreads, low inventories, and negative treatment charges. Potential US import tariffs have been among the main drivers, forcing traders to redirect shipments toward the US and reducing availability elsewhere.

Last week, veteran commodities strategist Jeff Currie warned in a series of X posts:

Wake up, folks. Commodities are telling you something, and yesterday the Treasury confirmed it.

Scarcity in the physical world. Repression in the financial one. Scarcity pushes prices up. Repression holds yields down. The gap between them is the debasement.

Commodities are the only asset class that wins on both sides. The structural case for commodities has been turbocharged.

Read more about what Currie had to say about commodities here.

Tyler Durden Thu, 08/27/2026 - 12:40

RFK Jr. Says Pennsylvania Officials May Have Fabricated Measles Deaths

Authored by Zachary Stieber via The Epoch Times,

Health Secretary Robert F. Kennedy Jr. said on Wednesday that officials in Pennsylvania may have made up deaths that they described as associated with measles.

Health and Human Services Secretary Robert F. Kennedy Jr. at the Hubert Humphrey building in Washington on August 10, 2026. Travis Gillmore/The Epoch Times

The Pennsylvania Department of Health and Pennsylvania Gov. Josh Shapiro said on Wednesday that Pennsylvania had recorded the first deaths related to measles in 35 years.

"The announcement appears to have been premature, and the deaths may even have been altogether fabricated by one of the Governor's hopeful staffers," Kennedy wrote in a post on X. "The Lancaster County Coroner says that it has no record of any measles deaths. State law requires that all measles deaths be reported to the coroner."

Lancaster County Coroner Steve Diamantoni told news outlets and a county commissioner that his office had not handled any deaths from measles. The office did see an infant who died shortly after birth from spleen laceration, and an autopsy determined that the primary cause of death was the laceration, Diamantoni told the Philadelphia Inquirer.

The pathologist who conducted the autopsy did not feel the death was related to measles, the coroner said. The office, which declined to comment to The Epoch Times, is still investigating the cause of the ruptured spleen.

Kennedy also told reporters in an unrelated press conference in Florida that Pennsylvania officials had not provided information about the deaths to the Centers for Disease Control and Prevention.

"We're trying to figure out ... who those deaths were and whether they actually happened," he said.

Both individuals who died tested positive for measles prior to their deaths and were not vaccinated, according to the Pennsylvania Department of Health. One was an infant, the agency said, pointing to Diamantoni's comments.

The agency said it uses the term "measles-associated" for deaths "when laboratory or epidemiologic evidence of measles is present, but the disease may not be assessed by the medical certifier or coroner to be the immediate cause of death."

Dr. Debra Bogen, Pennsylvania's health secretary, said, "As a pediatrician with more than 30 years of caring for children, I have thoroughly reviewed the case investigation information and sadly can confirm that there were two recent measles-associated deaths in Lancaster County, which were reported to the CDC's measles response team early Tuesday morning."

Pennsylvania officials have not disclosed any additional details about the second death beyond the person testing positive for measles and being unvaccinated. Bogen and her department did say that not all deaths are referred to a coroner under Pennsylvania law.

A thin-section transmission electron micrograph (TEM) reveals the ultrastructural appearance of a single virus particle, or "virion", of measles virus. CDC via Getty Images

State law says that any deaths "known or suspected to be due to contagious disease and constituting a public hazard" shall be investigated by a coroner.

State officials also encouraged people to take the measles, mumps, rubella (MMR) vaccine after announcing the deaths.

"This illness and death from measles is completely preventable," Shapiro told a briefing in Lancaster on Wednesday.

The minimum age for the MMR vaccine is one year, according to the CDC, although officials in Pennsylvania and some other states allow vaccination as early as six months of age for babies in measles-outbreak areas.

A person walks past a sign at a health center where the measles, mumps, rubella (MMR) vaccine is administered in Lubbock, Texas, on Feb. 27, 2025. Ronald Schemidt/AFP via Getty Images

The deaths were the first associated with measles reported in the United States this year. Three were reported in 2025. Local doctors said those deaths were due to measles, but Kennedy has said the people were already sick, including a girl who was already suffering from mononucleosis.

Lancaster County Commissioner Josh Parsons, a Republican who first highlighted comments from the county coroner, said in a post on X that the information about the infant's death showed it was with, not from, measles. He also said that state officials should release information on the other death that was described as associated with measles.

"The people of Lancaster County deserve to have transparency over whether there were actually two measles deaths or not," Parsons said.

Tyler Durden Thu, 08/27/2026 - 11:40

Stalemate, Not Checkmate

Bas van Geffen, senior macro strategist at Rabobank

Stalemate, not checkmate

CIA Chief Ratcliffe’s 15-minute dialogue in Moscow was reportedly an elevator pitch warning Russia not to support Iran, and not to attack NATO.

Peace talks between Russia and Ukraine are at a dead end, and Ukrainian attacks on Russian economic infrastructure – including refineries and large online retailers – are increasingly putting pressure on President Putin. So, Moscow is preparing to escalate its assaults on the country. Russian military presence in Belarus is building up, which could reopen a front towards Kyiv.

Moreover, Putin considers Ukrainian attacks as NATO strikes because the weapons were supplied by the alliance. If Putin were to attack any of the Baltic states, NATO either triggers article 5 and attacks Russia, or it doesn’t. Who knows where either option leads. Escalation would spread the US’ resources thin, after reports that its defence industry is already struggling to replenish the missiles fired in the Iran war. But not doing so would effectively undermine NATO, and Europe’s security architecture.

That’s all still a hypothetical that markets can ignore for now, but the Ukrainian strikes are adding pressure to the energy complex. Ukraine forced another outage at the second-largest Russian gasoline producer, and Moscow will extend the diesel export ban through September according to Reuters’ sources. These supply shocks add to the disruptions from the Iran war.

So, several central banks are now flagging tighter policy to stop the energy shock from transforming into broader-based price pressures. Yesterday, Schnabel said that the ECB must raise rates further to prevent second-round effects early on.

The Bank of Japan’s Himino argues for a similar pro-active approach as inflationary pressures are picking up, to avoid that policymakers need to hike more aggressively later. And yesterday’s high Australian inflation print is adding to speculation that the also RBA may need to raise rates again soon – we still have a hike pencilled in for November, but the inflation print could accelerate policymakers’ timeline if it is confirmed by other incoming data.

As we’ve flagged before, time is not on central bankers’ side. The longer the Iran war lasts and the longer disruptions in energy markets persist, the stronger the inflationary impact will be.

The Qatari prime minister will travel to Tehran today to try to revive the dialogue between the US and Iran. However, the US’ change of pace to low-scale military conflict and economic warfare reduces the odds of a quick resolution. The Justice Department is preparing to revive prize courts, to improve the efficacy of the US naval blockade.

Protests and panic buying of food and fuel indicates that the war is starting to take a real toll on the Iranian population. Yet, the US may not succeed in isolating Iran economically without the support of other economic superpowers – including China. China’s ongoing trade relationship with Iran may be just enough for the country to hang on. So, a Ukraine-Russia style stalemate looks increasingly more likely than a checkmate.

This also means that oil markets continue to rely on inventories to fix a flow problem. Our energy strategists have raised their forecasts for Brent and WTI crude. But they believe that this will particularly be a problem in refined products, where refinery throughput is a key constraint.

Tyler Durden Thu, 08/27/2026 - 11:00

Viral Sensation Ox Alpha Model Revealed As GLM-5.3-Flash, Running Entirely On Chinese Chips

China’s Z.AI (Zhipu) confirmed it’s responsible for the viral - and mysterious - Ox Alpha AI model that swept to the top of online usage charts this weekend, pushing its shares up as much as 12% on Thursday. The Beijing-based company said it intends to price use of the model, now called GLM-5.3-Flash, at $0.15 per million input tokens and $0.50 per million output tokens, or units of artificial intelligence work. That puts it alongside DeepSeek in the class of low-cost, very high-efficiency models that are attracting users away from premium-tier offerings from the likes of Anthropic PBC.

As part of the reveal, Zhipu AI launched its latest open-weight model, GLM-5.3-Flash, f/k/a Ox Alpha, saying that the system ran entirely on a cluster of 100,000 domestically produced chips during a high-profile stealth trial.

In other words, not only is China dominating the open-weight model, it will soon dominate the hardware the is used to run it, precisely as we warned a week ago.

With open model token prices rising, one can guess what is going on at Anthropic and ChatGPT.

What happens when China floods the world with cheap Ascend chips to power the Chinese open models https://t.co/8u0zDGUgwM pic.twitter.com/NGn3T78UOo

— zerohedge (@zerohedge) August 13, 2026

Following the news, Zhipu’s shares closed more than 12% higher at HK$1,160 in Hong Kong on Thursday.

“What GLM-5.3-Flash confirms is a pattern that is no longer surprising — Chinese labs shipping near-frontier open models at a fraction of the Western price,” said Dermot McGrath, founder of Shanghai-based consultancy ZenGen Labs.

The announcement followed a week of heavy traffic on artificial intelligence model marketplace OpenRouter and agent platform OpenCode, where the model processed 62 trillion tokens before its formal release on Wednesday, according to Zhipu.

On OpenRouter, the system processed more than 23 trillion tokens in its first six days, making it the platform’s biggest launch to date.

Ox Alpha, as it was initially known, emerged over the weekend as an uncredited release on OpenRouter - the biggest launch in that marketplace’s history - and quickly gained traction among curious observers and users. It’s a reasoning model designed for coding and agentic tasks, and it can process text, image and video input, according to its description. The model is not far off from Anthropic’s Opus 4.8 on coding and agentic capabilities, Z.ai said in a blog post.

The deployment marks a significant test of China’s ability to handle large-scale global inference workloads on home-grown hardware, as Beijing seeks to reduce reliance on advanced processors from Nvidia amid tight export controls.

During its preview, Ox Alpha rapidly surged to the top of global usage rankings. According to OpenRouter data on Thursday, the model ranked first among coding systems on the platform, accounting for 10.3 trillion tokens, or nearly 31 per cent of its total weekly volume.
To overcome the lower memory capacity and bandwidth of individual Chinese chips compared with top-tier Nvidia graphics processing units, Zhipu – which operates internationally under the Z.ai brand – said it built a specialized inference engine that split processing stages into independently managed computing pools.

The firm said these architectural adjustments tripled end-to-end serving performance from its initial baseline, bringing hardware efficiency and per-token costs on par with mainstream Nvidia accelerators. The claims have yet to be independently verified.

While Zhipu did not name specific chip suppliers for this cluster, it has previously collaborated with top domestic semiconductor developers, including Huawei Technologies, makes of the increasingly popular Ascend chip, Cambricon Technologies and Moore Threads.

Cambricon said on Thursday it had achieved “Day 0” compatibility to serve GLM-5.3-Flash. Moore Threads said it also achieved “Day 0” support for the new model.

Featuring 320 billion total parameters, GLM-5.3-Flash activated just 18 billion per request to reduce computing overhead, according to Zhipu. It is also the first model in the GLM-5 series to natively process visual information alongside text.

Benchmarking firm Artificial Analysis gave the model a score of 57 on its Intelligence Index, placing it 10th globally and third among open-weight models, trailing Moonshot AI’s Kimi K3 and Alibaba Group Holding’s Qwen3.8 2.4T A95B.

Zhipu is touting aggressive pricing to win over international developers, offering GLM-5.3-Flash at 1/10th the rate of standard GLM-5.3 – dropping to 1/20th under a limited promotion. It claimed the new model cost about 1/40th as much as Anthropic’s Opus 4.8 at comparable intelligence levels.

Despite heavy traffic during the free trial, early developer feedback was mixed. While users praised the model’s ability to debug complex code – a community test showed that it solved 28 per cent of 175 LiveCodeBench problems – others reported occasional hallucinations, dropped tasks and sluggish generation. Artificial Analysis similarly noted that GLM-5.3-Flash’s output speed trailed the industry average.

Zhipu has released the model weights globally and integrated GLM-5.3-Flash across its application programming interface, ZCode platform, and GLM Coding Plan.

The launch coincides with intensified competition in China’s open-source ecosystem.

Separately, on Wednesday, Alibaba released Qwen3.8-Flash-Next, a multimodal preview of Qwen4 that it said activated 6 billion of its 125 billion parameters to similarly drive down inference costs. Alibaba owns the South China Morning Post.

Tyler Durden Thu, 08/27/2026 - 10:45

The post Update to the Fast-Food Spending Index appeared first on CEPR.

The Greatest Cover-Up In Economic History: How Washington Hid Its Role In The 2008 Crash

Authored by Kevin Villani via Mises Institute,

The commentary in a recent Wall Street Journal by Senator Phil Gramm and Representative Jeb Hensarling did the nation an immense service by dismantling the persistent myth that private market greed and financial deregulation caused the 2008 financial crisis. As they rightly pointed out, inflation-adjusted mortgage rates during the bubble era were historically high, and financial institutions were suffocating under increasingly strict federal mandates, not running wild in a deregulated vacuum.

Yet, for nearly two decades, the public has been fed a completely fabricated baseline narrative. Having served as the Chief Economist at the Department of Housing and Urban Development (HUD) and later as the Chief Economist at Freddie Mac during critical regulatory shifts, and as an expert in securitization-having structured the first CMO with Larry Fink at First Boston, the first CBO with Mike Milken at Drexel, the first unique MBB with Lou Ranieri at Salomon, and later the first CLO-I watched the true mechanics of this disaster play out from the inside. The reality is uncomfortable for the political class: the real crime of 2008 was not a failure of capitalism, but a catastrophic failure of central planning.

The subprime crisis was deliberately engineered in Washington. Through affordable housing quotas managed by HUD, progressive policymakers systematically weaponized government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. To meet arbitrary, politically-motivated homeownership targets, these institutions were forced to aggressively buy up low-quality, high-risk mortgages.

The mechanics of this distortion were devastatingly simple. To satisfy Washington's mandates, the GSEs had to continuously lower their credit scoring thresholds, accept zero-down-payment structures, and purchase loans with unverified incomes. This top-down command economy completely erased private market discipline. Private lenders-knowing they could instantly dump these toxic, subprime originations onto the balance sheets of government-backed entities-stopped underwriting for risk and began underwriting for political compliance. By forcing the financial system to accept trillions of dollars in low-quality debt, Washington single-handedly fueled the historic housing bubble.

When the house of cards inevitably collapsed, the economic devastation was staggering. The direct government fiscal costs alone reached an estimated $2 trillion domestically and topped $12 trillion globally in banking interventions and stabilization efforts. But the indirect, structural costs were far worse: a permanent loss of up to $14 trillion in US economic output and the immediate vaporization of over $19 trillion in household wealth.

Faced with a disaster of their own making, policymakers pulled off a multi-trillion-dollar ideological cover-up that may ultimately prove to be far more damaging than the original crime.

To shift the blame entirely onto private capital, Washington weaponized the Financial Crisis Inquiry Commission (FCIC). The commission's partisan majority report was custom-built to exonerate the state's progressive interventions. To achieve this, the political class relied heavily on a curated roster of nationally-recognized academic contributors. These individuals perfectly embodied what Nobel laureate economist Friedrich Hayek famously labeled "armchair intellectuals"-theorists with zero actual industry experience whose abstract models merely confused the public and distracted attention from the fundamental, government-driven causes of the collapse.

This academic misdirection, operating in tandem with Marxist-driven street movements like Occupy Wall Street, successfully captured the public imagination. By framing a state-engineered credit crisis as an inherent flaw of the free market, Washington channeled public rage away from regulators and straight onto Wall Street. This manufactured consensus provided the perfect pretext to pass the Dodd-Frank Act-a massive expansion of state regulatory power that heavily penalized the private sector while leaving the government's destructive, highly leveraged dominance over housing finance completely untouched.

The long-term consequences of this deception are playing out in real time today. We see the latest fruit of the 2008 cover-up in the radical economic platforms of the Democratic Socialists of America (DSA). Because the true history of the crash was erased, a new generation of progressives now uses the false narrative of "market failure" to demand national rent controls, a federal tenant bill of rights, and the aggressive expansion of state-owned "social housing." They are deploying the exact same rhetoric used by the FCIC majority and the Zuccotti Park occupiers to advocate for the complete central planning of American real estate.

By shielding Washington from accountability, the 2008 cover-up institutionalized systemic moral hazard and permanently crippled market discipline. When central planning fails, the state's universal response is to demand even more centralized control. Unless we aggressively correct the historical record and expose the armchair intellectuals who enabled this deception, the ongoing ideological cover-up will succeed in setting the stage for a new generation of even more devastating, state-engineered economic collapses.

Tyler Durden Thu, 08/27/2026 - 08:05

Futures Jump After Nvidia's Unprecedented 2028 Guidance Stuns Markets

Futures are higher led by Tech as NVDA earnings boost the tape. As of 8:00am ET, S&P futures are 0.5% higher while Nasdaq futures jump 1.1% led by NVDA which is +7.4% in pre-market trading following an unprecedented forecast of 70% revenue growth in 2028, which is boosting Semis (+3%), incl MRVL +5.2% into their print tonight. NVDA helped the market climb a significant wall of worry and is not poised to resume it march higher. Memory is +3.6%, Software is +2.3%, Korea +2.1%, and Low/Unprofitable Tech +1.2% points to a broad-based Tech rally. Yet Only 2 of 7 Mag7 names are higher, NVDA and TSLA. Outside of Tech, most sectors are trading lower ex-Industrials / Utils which are benefitting from a reboot of the AI trade. Our Retail flows remain materially off their highs with behavior shifting from ETFs to single stocks; Mag7 / NVDA most bought, MRNA most sold with gold seeing strong inflows. Bond yields are +1-2bp with USD flat. Cmdtys are mostly lower dragged by Energy and Base Metals; Precious are mixed with gold flat and silver higher. Today’s macro data calendar includes July advance goods trade balance, weekly jobless claims and July inventories (8:30 a.m.) and August Kansas City Fed manufacturing activity (11 a.m.). Fed speaker slate includes Cleveland Fed’s Beth Hammack on CBNC at 10 a.m. and Fox Business at 1 p.m.

In premarket trading, Magnificent Seven stocks are mostly lower even as Nvidia jumps 7.2% after the leader in AI chips gave an outlook for revenue growth that was stronger than expected. Others are mostly in the red: Alphabet -0.4%, Amazon -0.3%, Apple -1.1%, Meta Platforms -0.3%, Microsoft -1%, Tesla +0.4%. 

• AI infrastructure stocks broadly gain after Nvidia’s outlook. Intel (INTC) 2%, Advanced Micro Devices (AMD) +1%.
• Software companies are rising following robust results from a number of notable names in the sector.
• CrowdStrike (CRWD) rises 9% after the security software company raised its full-year forecast on key metrics.
• Dollar General (DG) gains 13% after the retailer’s comparable sales for the second quarter topped expectations and management boosted guidance for the year. The stock had been down 7.5% this year through Wednesday’s close.
• Dollar Tree (DLTR) falls 4% as the retailer’s guidance for the third quarter and full year proves underwhelming after the stock’s 38% advance since its 1Q results on May 28. The S&P 500 Index was up 2.1% for the same period.
• Everpure (P) rises 2% after the computer storage company reported second-quarter results that beat expectations and raised its full-year forecast.
• Nutanix (NTNX) climbs 5% after the software company’s fourth-quarter results beat expectations and it gave an outlook that is seen as positive.
• Okta (OKTA) gains 17% after the software company boosted its full-year forecast on key metrics, including adjusted earnings and revenue.
• Salesforce (CRM) is up 10% after the software company raised its full-year forecast and announced an expanded partnership with Anthropic.
• Wendy’s (WEN) plunges 14% after Reuters reported that Nelson Peltz’s Trian Fund Management has no plans to make a bid at this time to take the fast-food chain private.

In other corporate news, a $31 billion venture between Kioxia Holdings Corp. and Sandisk Corp. to ratchet up flash memory production added to the buoyant tone in technology stocks. Security Benefit Life Insurance will restructure its $14 billion stockpile of collateral loans after such assets drew scrutiny from regulators. Caesars Entertainment turned down a bid from investor Carl Icahn to take the company private and instead chose a lower offer from billionaire Tilman Fertitta because it was more comfortable with other terms of his proposal. The owners of the 800-mile Trans Alaska Pipeline System are seeking to renew its federal land authorization more than seven years before it expires, a move that could capitalize on President Trump’s enthusiasm for US oil production.

Nvidia’s 7% pre-market gain following its solid revenue outlook is propelling the Nasdaq future higher by 1.1%, even as the index pulled back from highs after Politico reported the White House is mulling a fresh round of tariffs on chips. Nvidia’s upbeat outlook offered relief to investors concerned about a bubble in the AI economy as CEO Jensen Huang said demand for its artificial-intelligence accelerators continues to expand. 

Nvidia’s surprising stab at providing longer-term guidance (70% revenue growth for fiscal 2028, versus consensus around 45%) was taken positively, especially in the context of the number reflecting constrained supply dynamics (imagine how high the forecast could have been without the bottlenecks). The conference call pushed back on the circular deal narrative, while Huang later said “investing in these companies is a once in a generation opportunity. I think the only regret that I have is that I didn’t invest more and sooner.”

Nvidia’s results showed that the AI cycle is primarily constrained by physical bottlenecks such as memory and power, rather than a shortage of end demand, said Amanda Lyons, head of research at Energy Group Capital. “It effectively pushes the cyclical question further out and, crucially, gives investors permission to extend the earnings-growth runway not just for Nvidia, but across the second- and third-order beneficiaries of the AI buildout,” she said.

The VIX Index is below 15 and VVIX below 86, while even one-year Nvidia implied volatility appears cheap - despite its CDS trading at highs and as Chinese competition builds. The risk of AI headline fatigue is setting in. “Given Jensen’s constant visibility this quarter, the myriad of circular deal announcements, and just the mental exhaustion from AI headlines,” this week’s main event remains that of Warsh and the Fed at Jackson Hole, according to Dave Lutz at Jonestrading.

The company is “taking a more active role in removing the capital and infrastructure bottlenecks that could constrain its own growth,” notes Amanda Lyons, head of research at Energy Group Capital. More broadly, she adds that “the AI cycle is still being governed primarily by physical constraints such as memory, packaging, power and data-centre capacity, rather than by any shortage of end demand.”

Nvidia’s performance reflects how it has become the funding trade for AI picks and shovels, even as it acts as the industry’s bank. GAM’s head of global equities Paul Markham notes “the biggest risk to Nvidia here is a cash call, which is that it becomes a victim of its own success in the sense that investors get very, very excited about the Anthropic IPO and sell some Nvidia to fund it.”

With software considered to be perceived victims of AI, a reassuring print from CRM leader Salesforce gives some relief in predicting strong revenue expansion and deepening its partnership with Anthropic. Elsewhere in AI, AWS committed to deploy two million additional Nvidia GPUs across its global infrastructure in 2027-2028.

Attention will now turn to the Jackson Hole Economic Symposium. Kevin Warsh will deliver his first major speech as Fed chair on Friday, giving investors fresh clues on the policy outlook after he faced criticism over a lack of clarity about his views on the economy.

“The market wants a little bit more hawkishness because you have seen some pretty strong numbers coming out on growth and inflation, pointing more toward higher rather than lower rates,” said Caspar Rock at Schroders Wealth Management. “More clarity should give a bit more confidence, and that might perk up the dollar rather than fixed interest markets.”

Earnings growth from core tech names “is crucial given this is the main driver for US markets, and tech investment is the main driver for US growth,” said Geoff Yu at BNY. However, “with strong growth comes the risk of tighter monetary policy, which for now is also the market’s base case.”

Still, some pockets of weakness tempered Thursday’s optimism. HP Inc. tumbled as investors worried about demand for the company’s computers and printers. Meanwhile, Wheat prices hit the highest since July 2023, keeping inflation concerns in focus alongside still-elevated energy prices.

Tech optimism was also not on display in Europe with the Stoxx 600 down 0.3%,  as a retreat in consumer stocks outweighed the gains in the technology sector.

Asian stocks advanced for a third day, led by chip stocks after Nvidia Corp.’s bullish sales outlook injected vitality into the AI trade. The MSCI Asia Pacific Index advanced as much as 0.7% before paring. The Nvidia-inspired rally in chip stocks swept across the region, from South Korea to Japan with SK Hynix, Samsung Electronics and Kioxia the biggest contributors. “Nvidia handed SK Hynix and Samsung one of the strongest demand signals they could have asked for,” said Josh Gilbert, an analyst at online trading platform eToro. “When the industry’s most important customer can not get enough memory and prices are still heading higher; the read-through for both stocks is very positive.”  Kioxia shares rose 5%, boosted by reports that it will build a new facility in northern Japan. The company confirmed after the market closed that it plans to spend more than ¥5 trillion ($31.4 billion) with Sandisk to ratchet up production capacity across the country.  Benchmarks in South Korea and China gained while Japanese stocks fluctuated. Philippines was the worst performer in the region, dropping the most in two months, as a third successive rate hike added to economic headwinds. AI-bellwether Korea also digested its central bank’s decision to raise its benchmark interest rate for a second consecutive meeting to contain inflation.

In rates, treasuries hold small losses as US trading gets under way, lifting yields by 2bp-3bp ahead of the monthly 7-year note auction, following a subpar, tailing 5Y on Wednesday. Yield-curve flattening trend unleashed by last week’s Treasury Department decision to expand buybacks targeting 10- to 30-year sectors is intact; 5s30 spread narrowed to under 79bp, lowest since July 29 (most recent Federal Reserve decision date), 2s10s to under 43bp, lowest since Aug.  10-year yield is about 2bp higher on the day near 4.67% and slightly cheaper vs UK and German counterparts. Oil prices, which in recent sessions have led yields lower, are little changed, inside Wednesday’s ranges.
$44 billion 7-year note auction at 1 p.m. New York time has WI yield near 4.52%, higher than results since May 2024; last month’s 7-year auction tailed slightly after a rally into the bidding deadline. IG credit new-issue calendar is anticipated to be light through month-end; Wednesday saw just one (floating rate) offering priced.

In FX, the Bloomberg Dollar Spot Index is up 0.1% with Aussie dollar extending its week-to-date outperformance versus the greenback.

In commodities, brent crude prices are a touch firmer, having fallen earlier, as traders weigh Hormuz discussions and the Russian escalation on Ukraine. WTI crude oil futures are up 0.2%. Precious metals have trimmed earlier gains with spot gold now up just 0.2%. Bitcoin is up 2.4% and back above $80k. 

US economic data calendar includes July advance goods trade balance, weekly jobless claims and July inventories (8:30 a.m.) and August Kansas City Fed manufacturing activity (11 a.m.). Fed speaker slate includes Cleveland Fed’s Beth Hammack on CBNC at 10 a.m. and Fox Business at 1 p.m.

Market Snapshot

Top Overnight News

• Kuwait and Qatar, two of the Persian Gulf’s smaller oil producers, are sending more crude through the Strait of Hormuz, adding to an increase in shipments that are keeping global prices in check. The two countries, which exported a combined 2 million barrels a day of oil before the outbreak of the Iran war, have managed to get shipments back to 70% of pre-conflict levels. BBG
• Qatar's prime minister will visit Tehran on Thursday in a bid to relaunch diplomacy after the U.S. and Iran traded recriminations over Washington's promise to increase economic pressure on ‌Tehran by targeting its trade partners for sanctions. Reuters.
• Iraq is offering buyers of its crude the option to collect supplies from outside of the Persian Gulf for the first time since the Iran war began, highlighting resilient exports flowing through the Strait of Hormuz: BBG
• Russia is preparing to escalate attacks on Ukraine after concluding that negotiations for a peace deal have reached a dead end. For now, Russia is weighing an intensification of powerful conventional ballistic missile attacks on Kyiv, including the center of the capital, and infrastructure targets in other Ukrainian cities. BBG
• The Trump administration is weighing a new round of sweeping tariffs on semiconductors, despite warnings from tech companies that the move could doom U.S. hopes of dominating artificial intelligence. Politico
• Nvidia reports blowout quarter, says demand for AI chips is getting even hotter. Shares rallied as the chip giant forecast 70% revenue growth next year and defended its financial support of AI companies. WSJ
• Kioxia Corporation and Sandisk Corporation today announced anticipated significant investments in Japan, totaling over $31 billion (approximately 5 trillion yen) contingent upon government support. The investments through 2032 will continue to strengthen partnership, one of the most successful joint ventures across any industry. The partnership has helped drive decades of NAND flash memory innovation and invested over $50 billion (approximately 9 trillion yen) in Japan over the past 25 years. BBG
• Anthropic PBC has agreed to spend $45 billion to rent AI cloud computing power from Nscale’s flagship data center development in West Virginia, the latest move to secure capacity for its expanding business in advance of going public. BBG
• US Treasury Secretary Scott Bessent’s more activist style of managing the nation’s debt has Wall Street war-gaming a potentially bigger shift in the government’s borrowing strategy over the coming months: BBG
• South Korea’s central bank hiked its policy rate by 25bp to 3%, its second consecutive tightening action, a move that was expected, as the country faces upside risks to both growth and inflation. Nikkei
• Norway’s economy picked up pace last quarter, growing 0.3% and keeping the door open for more monetary tightening. BBG
• Fed's Cook (voter) denied wrongdoing and vowed to fight US President Trump's effort to fire her from the Fed. Cook's lawyer said there is no legally valid reason for ousting Governor Cook from the Federal Reserve board: RTRS

A more detailed look at global markets courtesy of Newqsuawk

APAC stocks were ultimately mixed, but with most indices in the green, after the flat performance stateside, where markets digested the firmer-than-expected headline PCE data and braced for NVIDIA earnings. The AI darling beat on top and bottom lines, although its shares were initially subdued, but were then boosted during the earnings call as the CFO flagged about a 70% revenue growth for the next fiscal year. ASX 200 underperformed amid another barrage of earnings releases and after recent inflation data, which prompted a call by NAB for the RBA to resume hiking rates at the next meeting in September. Nikkei 225 swung between gains and losses with the index fading the initial NVIDIA-spurred euphoria. KOSPI led the advances in the region as chipmakers cheered NVIDIA's strong results and outlook, while investors were also unfazed by the BoK's pre-emptive back-to-back rate hike. Hang Seng and Shanghai Comp were mixed amid several earnings releases and slower Industrial Profits, although the mainland was kept afloat after the PBoC conducted both 7-day and overnight reverse repos.

Top Asian News

• Chinese Industrial Profits (YTD) (Jul YY) 17.6% (Prev. 18.7%).
• Australian Private Capital Expenditure for 2026-27 (AUD)(Estimate 3) 200.7B (Prev. 173.4B).
• Australian Private Capital Expenditure for 2025-26 (AUD)(Estimate 7) 210.0B (Prev. 207.6B).

European bourses begin Thursday's trade with a negative tilt, with the majority of indices in the red, outside of the DAX 40. The primary reason for the upside in the German benchmark is the read-across following upbeat Nvidia and Salesforce earnings. The broad  positiveness in chipmakers was also seen overnight, with the KOSPI closing with gains of 1.5%. Sectors highlight the negative bias, with Tech the only sector printing decent gains. To the downside lies Food, Beverages & Tobacco, with Chemicals and Optimised Personal Care rounding out the sector laggards. Key movers include: Pernod Ricard (-6.0%), Q2 revenue missed estimates and guided FY sales growth at the lower end of its range due to soft US market; Delivery Hero (+0.4%), raises its FY26 guidance.

Top European News

• German GfK Consumer Confidence (Sep) -26.6 vs. Exp. -29.6 (Prev. -29.4).
• European M3 Money Supply (Jul YY) 3.4% vs. Exp. 3.4% (Prev. 3.3%).

FX

• Lacklustre price action across the FX space which has all G10 currencies essentially flat against the Buck.
• Nothing to derail the AI Capex narrative within NVIDIA earnings, in which Q2 results were strong and guidance impressed; a release which did not give too much lead to FX markets. Focus now turns to numerous Fed speakers today including the hawkish Hammack and Schmid; thereafter attention will be on Chair Warsh, who is set to speak on Friday at 15:00 BST. DXY flat/modestly firmer with a peak of 99.20 which is just above the 200DMA.
• JPY confirms the general trend seen across G10s with not many surprises from BoJ Deputy Governor Himino whose tone was consistent with pricing of September’s likely 25bps hike, noting in both of his speeches the BoJ needed to “pay more attention to upside inflation risks than before”. USD/JPY range bound within 159.30/40, calendar is light so will likely be dictated by a busy US schedule with just Tokyo CPI scheduled for Friday.
• EUR flat against the Buck with EZ catalysts light ahead of ECB minutes. Price action today will likely be at the whim of the Buck with ECB minutes likely to not surprise. EUR saw some modest weakness of around 10 pips after taking a lead from French stocks ahead of the first French presidential debate at 15:45 BST. Note that the docket features the three favourites, Marine Le Pen who does not appease markets and Jean-Luc Mélenchon, who recently touted France “set fire” to a large chunk of its public debt. EUR/USD slipped from the familiar 1.1650 to a 1.1634 base, before paring that aforementioned downside.

Fixed Income

• Fixed benchmarks are mixed this morning, with USTs (U/C) flat, whilst Bunds (-23 ticks) and Gilts (-21 ticks) are pressured. Earlier action was uneventful, but a report that the US is mulling a new round of tariffs on chips spurred some mild downside in fixed benchmarks.
• USTs attempt to pare back some of the pressure seen on Wednesday following the slightly hotter US PCE report, whereby the headline topped expectations. On the Fed, it may not shift too much for policymakers heading into the September meeting – but a slew of Fed speak is expected in the next few days. Today sees interviews via Schmid and Hammack, whilst Chair Warsh is set to speak on Friday. A tight-lipped approach from the Chair could see markets begin to shift attention back to credibility concerns, and therefore result in the resumption of the debasement trade. From a yield perspective, the US 10yr (4.65%) remains shy of the level which saw the Treasury announce its long-end support (4.7%) – albeit only marginally so. A resumption of debt / credibility concerns could see the 10yr circulate within a 4.75-5% range into the next bout of key US data. On the flip side, a significant breach below the 4.5% mark would likely require a dovish Warsh on Friday (unlikely), and favourable NFP (Sept 4) / CPI (Sept 11) reports.
• Bunds and Gilts are pressured this morning, The downside can, in part, be explained by the ongoing strength in Dutch TTF gas prices. Woes have also been further exacerbated by recent reports that Russian President Putin is to escalate the war in Ukraine, as he sees talks with Ukraine at a dead end.

Commodities

• In geopolitics, Nour News reported that Iran has warned that vessels violating new Hormuz transit rules could face blacklisting alongside their flag. The piece added that penalties could extend to other ships using blacklisted service providers. Interestingly, a headline out of Iranian Press TV suggested that Oman reportedly stopped cooperating with the US to facilitate escorted tanker movements through southern Hormuz. Note: Trump has twice publicly threatened Oman with military action due to its bilateral negotiations with Iran regarding the Strait of Hormuz.
• Meanwhile, some focus returns to Russia-Ukraine after Bloomberg sources suggested Russia is preparing to escalate attacks on Ukraine after concluding that negotiations for a peace deal have reached a dead end.
• WTI Oct and Brent Nov initially extended losses north of USD 1/bbl, but have since clambered off lows – potentially thanks to the Nour News report above. Currently WTI and Brent are posting losses of only USD 0.10/bbl, with the latter currently sitting towards the upper end of a USD 85.32-86.99/bbl range. Elsewhere, Dutch TTF is relatively flat intraday but off highs after dipping under EUR 66/MWh this morning before finding support near EUR 65/MWh and somewhat stabilising around EUR 65.50/MWh.
• Metals are mixed with precious metals taking a breather after yesterday’s losses, although with upside capped as the DXY remains resilient to oil losses. Spot gold trades in a USD 4,593-4,643/oz range, with yesterday’s parameter. Spot silver found early support at its 100 DMA (USD 68.24/oz) and resistance near yesterday’s high (USD 69.95/oz). Base metals are mostly subdued by the resiliency of the buck, but underpinned by ongoing China stimulus hopes, 3M LME copper resides in a narrow USD 14,207.30- 14,323.13/t range at the time of writing.
• Kuwait and Qatar have reportedly increased crude shipments through the Strait of Hormuz to around 1.4mmln BPD, some 70% of pre-conflict levels, according to reports.
• Thai gold dealers said that the Ministry of Finance currently has no near-term plans to impose a gold tax.

Trade/Tariffs

• USTR Greer said the US did not add any new demands at the end of the negotiations with Canada and that the US wanted mutual protection on things like steel and aluminium in trade talks with Canada. Greer also stated that the US won't just sit down and take it if Canada imposes more retaliation, as well as noting there are no open channels with Canada at the moment.
• The US White House is reportedly considering a new round of tariffs on chips, Politico reports citing sources. The report detailed that one approach under consideration would increase the number of tech products subject to levies. This means that duties would hit chips, and potentially items such as laptops, gaming consoles and servers that fill data centres.
• US Senator Moreno (R) reportedly sent a letter to USTR Greer to open a Section 301 investigation on South Korea over its treatment of Coupang, according to Semafor.
• The US is investigating Apex Logistics over AI chip smuggling to China.
• US President Trump signed a proclamation to increase lean beef imports with the quota increased by 100k tons of beef per month effective September 1st for 90 days, while the proclamation increases lean beef trimmings that are imported with no-above-quota tariff.

Central Banks

• ECB's Radev said October and December meetings are both live, Econostream reported. Radev stated that waiting until second-round effects are fully visible could mean acting too late, but that there is not enough broad-based evidence to say growth risks are "clearly to the upside". On neutral, he said that 2.5% is not a "precise dividing line" but "probably around neutral".
• BoJ Deputy Governor Himino said he believes the BoJ should continue to raise the policy interest rate and adjust the degree of monetary accommodation in accordance with developments in economic activity, prices and financial conditions. He added that the BoJ must be mindful of upside price risk more than ever before and that they will debate policy at every meeting while taking such risks into account. Himino highlighted that if underlying inflation rises to a level above the 2% price target, it would have an adverse impact on the economy. On the currency, the BoJ wants to scrutinise the various effects of a weak Yen on the economy.
• BoK kept rates steady to 3.00%, as expected. Forecasts: Sees 2026 CPI at 2.7% (prev. 2.7%), 2027 at 2.3% (prev. 2.3%); 2026 GDP growth at 3.3% (prev. 2.6%) and 2027 at 2.9% (prev. 2.1%). BoK says rate decision was not unanimous as Board Member Hwang dissented on rate decision, while inflation is projected to remain above target level for a considerable time
• NAB expects the RBA to raise rates by 25 bps to 4.6% in September.

Geopolitics: Iran

• Iran has warned that vessels violating new Hormuz transit rules could face blacklisting alongside their flag, classification society and insurer, and that penalties could extend to other ships using blacklisted service providers, Nour News reported citing an official.
• An Iranian lawmaker said Iran controls the Strait of Hormuz and vessels from the US, France, Britain or other hostile countries to enter the region.
• Pakistani Foreign Ministry spokesperson said Pakistan is not obliged to comply with unilateral sanctions imposed on Iran, while UN sanctions would constitute a different matter.
• Iraqi sources report an airstrike on the main base of separatist terrorist groups in the city of Sorran, located in the Erbil province of Iraqi Kurdistan region, according to Fars News Agency.
• Two explosions were reported in Mokha, Yemen, from missiles fired by the Houthis

Geopolitics: Ukraine

• CIA chief's recent surprise trip to Moscow was to warn Russia not to attack NATO, according to WSJ.
• Russian Government Spokesperson Peskov said Russia's response to Ukrainian strikes on Russia's economic and trade infrastructure will be harsh.
• Russia's Kremlin said Moscow remains open to participating in negotiations for a Ukrainian settlement, Al Arabiya reported.
• Russian Foreign Ministry said the UK should abandon its hostile position towards Russia, which creates risks of transferring the conflict to a fundamentally new level, IFX reported.
• Russia attacked an industrial facility in the Ukrainian city of Kryvyi Rih, according to Ukrainian authorities.
• EU states resurrect plan to use frozen Russian assets for Ukraine, with Sweden, the Netherlands and Spain pushing to use the funds to solve Kyiv’s funding crisis, according to FT

Geopolitics: Other

• North Korea denounced the US' decision to sell weapons to South Korea and said US hostility to North Korea is clearly acknowledged, while it will respond swiftly and decisively to hostile actions, according to KCNA.

US Event Calendar

• 8:30 am: Jul P Wholesale Inventories MoM, est. 0.2%, prior 0.2%
• 8:30 am: Aug 22 Initial Jobless Claims, est. 208k, prior 206k
• 8:30 am: Aug 15 Continuing Claims, est. 1792k, prior 1799k

Central Bank Speakers 

• 10:00 am: Fed’s Hammack to appear on CNBC
• 1:00 pm: Fed’s Hammack Appears on Fox Business

DB's Jim Reid concludes the overnight wrap

After a mixed session yesterday, the market mood has turned more positive again overnight following Nvidia’s earnings last night. The chipmaker’s results delivered a moderate revenue beat, with revenue guidance for the current quarter also coming slightly ahead of expectations ($108bn vs $105.2bn est.). Crucially, this was accompanied by a bullish medium-term outlook from the company’s management on the conference call, who expected revenue growth of around 70% in the next fiscal year that starts in January 2027. So this signaled greater optimism that current runaway growth in AI demand would continue into next year.

Nvidia’s shares were up by +4.7% by the end of after-hours trading, after a -1.59% decline in yesterday’s regular session, helping futures on the S&P 500 (+0.48%) and Nasdaq (+0.83%) to decent gains overnight. The tech mood has also been helped by encouraging results from Salesforce, which released a slightly stronger-than-expected sales outlook and a deepening of its partnership with Anthropic, as well as CrowdStrike, whose shares jumped by nearly +10% after-hours. The positive tech sentiment has supported gains in Asia this morning, with the Kospi (+1.49%) leading the way, while the CSI 300 (+0.50%), Shanghai Composite (+0.60%) and Nikkei (+0.18%) are also all in the green, although the Hang Seng (-0.46%) is drifting lower.

Ahead of Nvidia’s results, equities had had a quiet day, with the S&P 500 (-0.02%), Nasdaq (-0.08%) and Mag-7 (-0.13%) all seeing marginal declines. European equities also saw muted moves, with the STOXX 600 (-0.01%) barely changed, while the DAX (+0.08%), CAC (+0.27%) and FTSEMIB (+0.31%) posted small advances.

Before that, yesterday’s main highlight was a hawkish-leaning batch of US data. While July core PCE inflation came in line with consensus at +0.2% mom, the details of the release were more inflationary. The unrounded reading was +0.246%, so just a smidgen from rounding up to +0.3%. That’s stronger than had been implied by the CPI and PPI prints as super core services PCE rose by +0.28% mom. There were also upward revisions to core PCE inflation for the previous three months, leaving the 3- and 6-month annualized rates at 3.0% and 3.5% respectively, so showing little sign of progress on disinflation. And other details of the PCE release were on the stronger side, with personal income rising +0.4% mom (vs +0.2% exp.).

Meanwhile, other US data releases pointed to strong economic momentum. Durable goods orders rose by +1.1% in July (vs +0.5% expected), with capital goods shipment growth (+1.4% mom vs +1.1% exp.) accelerating to an impressive +11.3% yoy. Finally, the second release of the Q2 GDP print saw consumer spending revised higher (from +3.2% to +3.4% annualized). That meant real final sales to private domestic purchasers, a key metric of underlying domestic demand, rose by +4.2% annualized in Q2, their strongest gain since early 2023, even as the Iran energy shock dragged on purchasing power. In all, it was a solid slate of data that’s hard to square with a view that Fed policy is restrictive.

US rates saw some hawkish repricing in response. While pricing of a September Fed hike was pretty stable (up from 36% to 37%), there was greater repricing of Fed expectations further out with 42bps of hikes now being priced by next June (+3.7bps on the day). This left 2yr Treasury yields +3.6bps higher at 4.21%. The sell-off was more modest at the long-end, with the 10yr up +1.8bps and the 30yr a marginal +0.2bps. We’ve seen a sizeable flattening of the Treasury curve since the surprise buyback announcement last Wednesday, with the 2s30s slope down by -15.5bps over this period.

European bond markets saw an even clearer reversal from Tuesday’s rally, with yields on 10yr bunds (+3.3bps), OATs (+4.0bps), BTPs (+5.3bps) and gilts (+4.3bps) all moving higher. We heard from the ECB’s Schnabel, who underlined her position as one of the most hawkish voices on the ECB Governing Council. She told Bloomberg that “further tightening will be necessary”, adding that given “resilient aggregate demand, it is critical to prevent the occurrence of second-round effects early on”. That said, Schnabel did little to push back on current market pricing, saying that markets “seem to understand our reaction function very well”. That comes as OIS markets are pricing 62bps of ECB hikes by next June (+6.5bps yesterday), including the almost fully priced hike for the upcoming September meeting.

Staying in Europe, tonight we’ll see the first French presidential debate ahead of the April 2027 election. The gradual heating up of the pre-election campaign comes as a widening of French sovereign spreads over summer has left France with the highest 10yr yield among the large and medium-sized euro area economies. The French far-left candidate Jean-Luc Melenchon drew attention on Tuesday night as he revived the call to cancel French debt currently held by the Banque de France, though this idea has been dismissed by other politicians across France’s political spectrum including RN’s Bardella.

On the geopolitical front, we saw limited news on Iran, with some of the optimism that emerged the day before fading as Reuters reported, citing Iranian sources, that an agreement with Oman over the Strait of Hormuz has not yet been finalized. Brent crude still ended the day -0.84% lower at $87.84/bbl, but was well off the lows of around $86 early in the European session. This morning Brent is down another -0.48%.

In yesterday’s other notable market moves, both wheat (+6.56%) and corn (+2.70%) prices spiked to their highest level in three years. Strikes between Russia and Ukraine have caused major disruption to both countries’ grain exports over the past several weeks and yesterday’s mood wasn’t helped by a Bloomberg report claiming that Russia’s President Putin is preparing to escalate attacks on Ukraine. The decline in Ukrainian and Russian grain exports has intensified a challenging backdrop for agriculture prices that also includes the emergent El Niño, this summer’s drought in Europe and the disruption to fertilizer exports out of the Gulf.

Elsewhere in Asia, the BoK raised its policy rate for the second consecutive time, hiking from 2.75% to 3.0%. Although the hike was widely expected, the market surprise came from the bank’s upgraded growth projections, with GDP for 2026 now at 3.3% (2.6% prevs) and 2027 at 2.9% (2.1% prevs). Although Korean rates initially came under pressure following the announcement, ten-year futures have since recovered and are trading around 32 ticks higher.

To the day ahead now, US data releases include July advance goods trade balance, wholesale inventories and weekly jobless claims, while in Europe we’ll have Germany September GfK consumer confidence, France July PPI and Eurozone July M3 data. On the central bank side, we’ll get the accounts of the July ECB meeting and the Jackson Hole symposium will get under way, though its main highlights, including Warsh’s speech, will be on Friday. Earnings include Marvell, Workday, Affirm and Dollar Tree. And France will see its first major presidential debate ahead of the April 2027 election.

Tyler Durden Thu, 08/27/2026 - 07:59

Barack Obama Elementary School Closed Due To Mold And Rodents

Most people have never heard of the Barack Obama Elementary School in Richmond, VA, but the story of the school is interesting because it's a reflection of the political madness the US went through over the course of the past decade. 

The school was originally built in 1922 and is over 100 years old.  It was once called J.E.B Stuart Elementary, but in 2018, the political left went on a historical arson spree - Tearing down statues and renaming anything with ties to the Confederacy as a way to assert ideological dominance. 

Hysteria over the protest events in Charlotte in which "Nazis" held a torchlight vigil (which we now know was most likely funded and organized by the SPLC) led to an American version of the Chinese Cultural Revolution. 

The remnants of the Civil War were slated for erasure and the school, named after a confederate general, was an obvious target.  It was renamed after Barack Obama; taking on the reputation of a president who did more to sow racial division in the US than any other person in modern history.  The fanatical woke movement was nurtured and given momentum by the Obama Administration and the American public has been dealing with the repercussions ever since.

Like its namesake, Barack Obama Elementary has something rotten under the surface.

The school of 285 students is now shut down for an undisclosed period after it was discovered that the buildings were testing positive for mold.  The facility also had reports of rodents (mice or rats) in several rooms, alongside the more prominent mold health issue.  The mold and rodent problems were noticed by staff as they prepared for the start of the new school year.

Officials say they hope to reopen the building in a week, though this has proven to be an overly optimistic goal after earlier “clear” air-quality tests were quickly contradicted by new visible mold discoveries (behind bulletin boards, on computers, in the art room, etc.), forcing repeated delays.  A more realistic time frame is one month or more.   

The building is indeed old, but it is rather poetic that a property renamed to "hide the shame" of its confederate roots ended up being shut down after "Barack Obama" was slapped on the front because of decay.  It's also ironic that Democrats were so proud of themselves for blotting out a confederate figure:  The confederates were, of course, Democrats.  School officials say they will work to reopen the facility as soon as possible, though no concrete timeline has been given.

Following their mantra of "never let a good crisis go to waste" (quoted by Rahm Emmanuel, former Chief of Staff to Barack Obama), Democrats are seeking to use the school closure as further leverage to promote a new sales tax in the area.  

Barack Obama Elementary is in a majority black neighborhood and the student body is around 95% black.  The shutdown of the school is a sensitive subject for Democrats and liberals because of the symbolism.  Once a group attaches their political image to a building or a monument, they make those monuments a target for ridicule.  One of their buildings is now full of fungus and rats; it's funny because it's fitting.   

Tyler Durden Thu, 08/27/2026 - 07:45

Global Youth Unemployment And Inactivity Inch Up Again

For two years in a row, global unemployment and inactivity among youths aged 15 to 24 has inched up again across world regions.

As seen in data by the International Labor Organization, the coronavirus pandemic caused these rates to go up in 2020, but the situation improved again gradually, in 2022 and 2023 falling below pre-pandemic levels.

But, as Statista's Katharina Buchholz reports, since then, rates have been on a slow upswing once more, reaching 12.4 percent of youths in the labor force who are unemployed and 20 percent of youths overall who are either unemployed or not engaging in any activity like education, training, employment or looking for work.

You will find more infographics at Statista

According to the recently released ILO report Global Employment Trends for Youth 2026, progress made in the area of youth employment post-Covid has come to an "abrupt halt" as uncertainty and fragility have taken over global economies, GDP growth has remained subdued and inflation has been high. The report also points out that there has not only been a deterioration in the quantity, but also the quality of jobs for youths globally, meaning that many are underemployed or work jobs that don't match their qualifications. Especially the group of NEETs (who are neither in employment, education or training) is made up of a high number of women and girls, who tend to focus on housework and family care responsibilities more often.

12.4 percent unemployed young people between the ages of 15 and 24 equal 67 million individuals worldwide, while the NEET rate of 20 percent translates to 257 million youths. Unemployment rates were higher among young men, while NEET status was more widespread among young women.

Tyler Durden Thu, 08/27/2026 - 05:45

BBC Unleashes El Niño Apocalypse Fearmongering

Authored by Guy de la Bédoyère via The Daily Sceptic,

Friday, August 21st 2026 was a slow news day. You could tell because the BBC's Radio 4 6 O'Clock News led with the vacuous revelation Harry and Meghan are coming back to the UK. Slightly less uninteresting was the second story, the disastrous case against the Mail and how Harry and his fellow litigants are going to have to pay tens of millions of pounds to the newspaper in compensation.

There were more vacuous revelations to come. The 'other' top story was the impending catastrophe promised by the mounting El Niño crisis in the Pacific. The 6 O'Clock News was typical of the corporation's output for the day.

This is how the bulletin flagged up the story in the headlines:

[Announcer] Dire warnings from the Met Office about the effects of what it describes as an unprecedented El Niño event.

Cue then to the Voice of Doom, in this case the obliging Professor Adam Scaife - head of the Met Office's long-range forecasting and a professor of applied maths at the University of Exeter - who was identified later in the bulletin:

We think that when it peaks in November and December it's likely to be [a] record event, beyond anything we've seen in living memory.

That sort of phrasing, readers may recall, is straight out of the 17th-century playbook of weather catastrophising, as I discussed in a piece for this website in 2024 ('They Were Catastrophising the Climate in the 17th Century'). Instead of the modern 'since records began', Scaife had opted for a version of the 17th Century's equivalent. Here's a quote from that piece I wrote:

All summer long there were "so great rains, that produced greater floods than in the memory of man", wrote John Locke in 1673.

Such methods of emphasising a point are a handy way of terrorising oneself and other people because they evoke a sense of something both unprecedented and terrifying, predicated entirely on the nebulous limits of human memory without even specifying what that amounts to - or doesn't.

Just look at the BBC's wording.

Not only are there "warnings", but they are also "dire". 'Dire' comes from the Latin word dirus, which means something 'awful' or 'ominous'. Appropriately enough, it was a word often used by the Romans in a religious context when confronted with a bad omen, either in the form of a natural event or as the result of a sacrifice, such as the examination of the animal victim's entrails.

There was something overwhelmingly religious about the bulletin's coverage of the El Niño apocalypse because it served as no more than a harbinger of doom - something that might or might not happen and, even if it does, we are in no position to know exactly what form it will take.

It was ironic, but typical, that a scientist confronted with something he doesn't know for a fact but is only guessing resorted to religious-style phrasing. This was exactly the sort of behaviour we saw during Covid too. The phenomenon is in fact entirely normal for most human beings. We live in a world of uncertainty and there is a latent desire among all people to believe they live in exceptional times.

Scientists are all too inclined, in circumstances where they do not know what will happen, to use their scientific status to substantiate such claims. This affords their pronouncements an aura of false credibility - both to themselves and their audiences.

The full item was delivered by the BBC's Environment Correspondent Matt McGrath (spin forward in the bulletin to 07:26). It included more of Scaife - he has worked in the meteorology field since the early 1990s - who expanded darkly: "I have never seen an event like this in our forecasts."

McGrath:

[Vague sounds of weather and barely audible Spanish fading down] In Peru this week the famous Machu Picchu tourist trail closed because of flooding, said to be [my italics] linked to a strengthening El Niño. This is the naturally occurring pattern that shifts weather across the globe. Scientists are growing ever more concerned [my italics] that this year's event will be exceptionally strong with widespread impacts.

Let's linger with McGrath's intro for a moment. First, note how he used the words "said to be" when suggesting that the flooding might be linked to a "strengthening El Niño". "Said to be"? That's like a medieval rumour and as fatuous as Percy's observation to Blackadder that "They do say that the Infanta's eyes are more beautiful than the famous Stone of Galveston." He also uses "ever more concerned" to suggest a crisis which isn't only impending but is also becoming worse, to add some gratuitous dynamic to the story.

McGrath continued: "Professor Adam Scaife is the Met Office's head of long-range forecasting:"

[Scaife] I have never seen an event like this in our forecasts. The tropical Pacific is warming faster than I've ever seen. We think that when it peaks in November and December it's likely to be [a] record event, unprecedented beyond anything we've seen in living memory.

You'll note that although this was depicted as a sound scientific opinion, the words of Scaife quoted amounted to no more than a personal anecdote. It was unsubstantiated - with no data or detail of any kind supplied (perhaps McGrath cut it out). Naturally, it also went completely unchallenged. It's at moments like this that scientists seem entirely to forget the scientific principle that you should test every hypothesis to destruction, not make vague pronouncements based on your perception of the utility and relevance of the limits of human memory.

McGrath continued:

In Panama drought has drained the freshwater lakes that feed the shipping canal, forcing the authorities to cut the number of vessels passing through. And the effects are already reaching people's pockets. India, the world's second-biggest sugar producer, is now importing for the first time in a decade. A weak monsoon has hit production, and prices have jumped 40% in two months.

Despite the assertion that the event is unprecedented, in July 1920 and during the 1930s drought brought water levels in Gatún Lake dangerously low, nearly forcing closures of the canal and prompting major new dam construction to secure its water supply. This led to the building of the Madden Dam across the Chagres River in 1935 to create Lake Alajuela, which bolstered the water supply.

As for India, McGrath - who appeared only to have followed other news releases on Friday - didn't mention that India is also one of the largest sugar consumers in the world and thus especially vulnerable to fluctuations in the crop. A 'decade' is hardly a long time in world history for a start. As it happens, India's sugar production has increased by a staggering 7.6 times since the mid-1970s, meaning that El Niño aside, any environmental fluctuations are going to have more visible effects.

Moreover, any problems caused by high rainfall have been compounded by Red Rot and Top Borer disease, as well as stockpiling and speculation (according to the Financial Express). This illustrates just how complex these scenarios are, and the banality of attributing them to single causes.

McGrath ploughed on:

And it's not just food that's likely to be impacted. The same weather turmoil could push up energy prices too. Professor Amanda Maycock [of the Met Office Academic Partnership] is from the University of Leeds:

[Maycock] I think we're definitely looking at the compound effect of different influences from a weather and climate perspective - you know, the prices of things like liquid natural gas imports and so on can be affected by demand that's happening elsewhere in the world, which may well be affected by the El Niño if there are droughts in certain regions, reductions in the production of hydroelectricity, for example in places like Brazil. That could have a knock-on effect for us here in the UK.

Apart from observing the eternal fact that the weather and climate affect human activity, Maycock didn't seem to say much of consequence at all - at least in what McGrath used. But note the opening words "I think" and the later "could have" (no more valid than 'might not').

McGrath wasn't finished. He had a moment of lucidity when he acknowledged that there's no evidence climate change is affecting El Niño, but he quickly got a grip and found a way to leave listeners quaking in their boots at the prospect of a hotter year next year - so "scientists say":

The effects depend on where you are in the globe. As mentioned, a weaker monsoon in India but for the UK the prediction is for more rain in a wetter, stormier autumn. El Niño is a naturally occurring event and there's no clear evidence that climate change is making it stronger but it's arriving in an already warmer world and that, scientists say, is what will sharpen its impacts. But all the extra heat that's set to release from the ocean into the atmosphere, next year is likely to be the hottest ever recorded.

Even if the predictions turn out to be true, McGrath showed no interest in what we might do about it. The story seemed purely concerned with the prospect of doom.

The bulletin continued with a piece by the BBC's Climate Editor, Justin Rowlatt, about how "unusual" the current El Niño is. He harked back to the last extreme El Niño event in 1877 but darkly reminded listeners that the world is now 1.4 degrees warmer than in "pre-industrial times", an era the parameters of which he did not bother to specify, presumably because 'pre-industrial times' is simply the next vague block of time always wheeled out before 'living memory'. As it happens, just as a for instance, between 250 BC and AD 400 Roman Europe was around 1-2 degrees warmer than the 20th Century.

In the Roman world, and almost anywhere else in antiquity, anything that seemed deviant was recorded and scrutinised, whether it involved a meteor falling from the sky, a talking cow, a swarm of bees, a maidservant giving birth to a boy with only one hand or anything else that looked or sounded peculiar. By such signs, promising or ominous, the Romans ruled their lives. The statesman Cicero wondered whether the superstitious observations and the attention paid to omens and their interpretation amounted to self-induced imprisonment. This mentality has endured into modern times.

As ever, the whole El Niño news item really amounted to nothing but speculation and glossed over the fact that since time immemorial human beings have had to cope with extreme weather events and climate change of all types and hues.

When modern scientists bolster their claims with terms like 'I think', 'could be' and 'anything we've seen in living memory', and useful-idiot journalists substantiate their stories with 'scientists say', I'm not sure what the difference is between now and the ancient world.

One thing is certain: these terms ain't science, but perhaps it takes a non-scientist to notice. Whatever happens next year is beyond our control, so when and if it does, we'll just have to cope with it.

Appropriately enough for such pap, by Saturday August 22nd the story had disappeared from the bulletins, gone with the wind, though no doubt it'll be back like a bad penny on the next slow news day.

"Science requires an almost complete openness to all ideas. On the other hand, it requires the most rigorous and uncompromising scepticism."

- Carl Sagan, in 'Wonder and Scepticism', Skeptical Inquirer (vol. 19, no. 1), 1995

Tyler Durden Thu, 08/27/2026 - 05:00

Full-Face Veils Banned In Portugal After President Signs 'Burqa Law'

Via Remix News,

Portuguese President António José Seguro has officially signed into law a bill banning face-concealing attire in public spaces, with the move seen targeting the full-face Islamic veils like the burqa and niqab.

Addressing the national debate, President Seguro framed the decision around human interaction, stating:

"The face should be considered a central element of human identity and communication."

However, the former Socialist Party leader acknowledged the controversial nature of the ban, recognizing it as a matter of significant cultural and social sensitivity.

The law was largely backed by the country's right-wing politicians and labeled the "burqa law" by Portuguese media.

It passed parliament in July with the votes of right-wing parties, with the left firmly in opposition.

The new legal framework strictly limits garments designed to hide one's identity in public spaces.

It also penalizes forcing individuals to cover their faces based on gender, religion, or age.

Violators face financial penalties ranging from €150 to €3,000.

There are, however, some exceptions.

Wearing items that cover the face, such as medical masks, professional/artistic gear, and extreme weather wear, are all examples of exceptions under the law.

Read more here...

Tyler Durden Thu, 08/27/2026 - 03:30

"Citizens Want Political Turnaround": AfD Now Polls At 43% Across Eastern Germany

Building on Nomura analyst Andrzej Szczepaniak's note from earlier this week, which forecasts that right-wing parties are positioned to make electoral gains across Germany, France, Spain, Switzerland, and the UK over the next 18 months, new polling data from Germany further suggest that Alternative for Germany (AfD) is performing exceptionally well as citizens demand political change after years of failed progressive experiments that encouraged a Third World migrant invasion and nation-killing deindustrialization trends.

AfD co-leader Alice Weidel cited new polling data on X from a Forsa survey showing that, if a federal election were held now, eastern German voters would choose:

• AfD: 43%
• The Left: 16%
• CDU/CSU: 13%
• Greens: 9%
• SPD: 9%
• FDP: 3%
• Other parties: 7%

Weidel said, "According to a recent Forsa survey, the AfD is at 43% across the entire East, while the CDU is down to just 13%. The citizens want the political turnaround!"

Einer aktuellen Forsa-Umfrage nach liegt die AfD im gesamten Osten bei 43%, während die CDU auf nur noch 13% kommt. Die Bürger wollen die politische Wende!https://t.co/c94bESp3Qu pic.twitter.com/lrKvllJCAa

— Alice Weidel (@Alice_Weidel) August 26, 2026

The key takeaway from the new survey is that the AfD is polling at more than three times the level of the center-right CDU/CSU and exceeds the combined support of the CDU/CSU, SPD, and Greens.

German weekly newspaper Junge Freiheit commented on the new survey, saying, "The numbers are particularly interesting ahead of the upcoming state elections in Saxony-Anhalt on September 6th and in Mecklenburg-Western Pomerania two weeks later."

The outlet continued, "The assessment of Chancellor Friedrich Merz's (CDU) performance remains abysmal across Germany. As in the previous week, only 13 percent of those surveyed expressed satisfaction, while 85 percent were dissatisfied."

Elon Musk has previously stated, "AfD is the only hope for Germany."

AfD is the only hope for Germany https://t.co/6ONn1LOipE

— Elon Musk (@elonmusk) August 19, 2026

One reason German citizens are particularly frustrated is that Europe's economic engine is collapsing, with Volkswagen Group labor representatives warning earlier this week that as many as 140,000 jobs could be cut at the struggling automaker.

Circling back to Szczepaniak, the Nomura analyst wrote, "Five years ago, financial markets would not have seemed so at ease with such a prospect. But then again, these populist right-wing political parties were previously not so fiscally prudent as they are perceived to be today."

He added, "Now, if anything, financial markets are much more concerned about populist left-wing parties being elected due to their desire to increase spending, often paid for through higher borrowing or higher taxes, which are likely to shut the engine off of already stuttering economies."

EU Election Roadmap 

Read Nomura's assessment of Europe's changing political landscape here.

Tyler Durden Thu, 08/27/2026 - 02:45

White Prisoners In UK Being Forced To Convert By Muslim Gangs: Report

Authored by Steve Watson via Modernity News,

Britain's prisons are becoming recruitment grounds for Islamic gangs, with white inmates converting under threat of violence while the system frees terrorists early, jails protesters longer than child sex attackers, and racks up hundreds of millions housing foreign offenders.

New Ministry of Justice figures have exposed a stark reality inside England and Wales' jails. One in five Muslims behind bars is white - nearly four times the 5.8 per cent rate in the general population.

The number of white Muslim prisoners has climbed from 2,767 in 2022 to 3,218 by the end of June 2025, a 16 per cent rise. Overall Muslim inmates rose 14 per cent in the same period, from 14,037 to 16,051, now making up roughly 18 per cent of the prison population despite Muslims comprising just 6.5 per cent of the country.

? Read more https://t.co/b8r0O97xDs ??

— Daily Mail (@DailyMail) August 25, 2026

Shadow Justice Secretary Nick Timothy laid out the numbers and the implications. "The percentage of Muslims who are white in our prisons is so vastly higher than in the general population it raises serious questions," he said.

Islamist gangs control many of our prisons.

Conversion to Islam is the only way to stay safe from them.

I obtained data showing 1 in 5 Muslim prisoners are white.

That's four times higher than in the general population.

This cannot continue. pic.twitter.com/G87pfD7EoI

— Nick Timothy MP (@NJ_Timothy) August 25, 2026

"We know that experts have warned repeatedly about forced conversions taking place behind bars, driven by Islamic gangs. We need to be honest that something is not right here - Labour must urgently investigate and stamp out forced conversions in prison," he further urged.

Government advisers have documented the pattern for years. Jonathan Hall KC, the independent reviewer of terrorism legislation, described Islamist terrorists operating as "self-styled emirs" who controlled prisoners through "leadership and recruitment."

This included targeting "vulnerable or lonely prisoners, using guidance, sharing of food or material gifts" and "conversion backed by implicit or actual violence."

The London Bridge attacker Usman Khan, while inside, encouraged prisoners to take Muslim names and wear Muslim dress while trying to convert others.

Ian Acheson, who reviewed Islamist extremism in prisons, said conversions often occur "as a pragmatic response to who controls power and space in our prisons." In high-security jails especially, safety is at a premium and large numbers of violent young men seek belonging. "So Islam in this case has gang characteristics."

'We need to have much tighter regulation and control of the prison system'

Fiyaz Mughal, founder of Muslims Against Antisemitism, warns the UK prison system is failing to control violent Muslim gangs, leaving staff and inmates powerless. pic.twitter.com/TVdJzSr6Pa

— GB News (@GBNEWS) December 22, 2025

A 2023 government-commissioned review by Colin Bloom found gangs ordering new arrivals to become Muslim or face consequences. "Failure to identify as a Muslim meant that at best the new prisoner would be denied 'protection' from the dominant Muslim gang on that wing, or at worst the new prisoner would be subjected to violence and intimidation from that same gang."

A lawyer who regularly visits top-security prisons reported the process starts almost immediately. "This is something which will happen hours after arriving on a wing. Immediately they arrive in prison they slot into the gang hierarchy. In some cases there are entire floors dominated by Muslim gangs."

Some conversions are opportunistic - "convenience Muslims" seeking extra time for prayers or better halal food. Others are coerced. Qurans left on beds carry a clear message.

The Ministry of Justice insists it does not tolerate intimidation or faith-based coercion and claims prisons act swiftly. Yet the numbers keep rising, and there are now 140 Muslim chaplains compared with 87 for the Church of England.

This is the same prison system that continues to house thousands of foreign national offenders at enormous cost to the British taxpayer.

Figures show 10,487 foreign national offenders costing £629 million a year - money that could fund 16,500 police officers or 15,000 NHS nurses.

Albania tops the list, followed by Ireland and Poland. Deportations remain slow, tangled in missing documents, uncooperative origin countries, and European Convention on Human Rights claims.

Reform UK's prisons adviser Vanessa Frake called the bill "staggering." She noted the drawn-out process: discarded passports, slow diplomatic correspondence, refusals by origin countries, and Article 8 family-life claims. Even a deal to return 200 Albanian prisoners came with conditions and lower daily payments to Albania than the UK pays to keep them.

While foreign offenders and Islamist networks embed inside the system, the authorities have shown a different urgency when it comes to early release.

Zahid Iqbal, convicted in 2013 for plotting to bomb an Army base using an Al-Qaeda manual, was approved for release three years early despite previous non-compliance and warnings from prison and community managers.

Colin Sutton, Reform UK's crime adviser, called the decision "baffling." "This wasn't a guy in his bedroom cooking something up. This was somebody who arranged training. He had links with al-Qaeda. He was a proper terrorist."

Labour's broader early-release schemes have accelerated the emptying of cells to manage overcrowding. Thousands of offenders, including those convicted of violence, have been freed earlier than previous tariffs allowed. Even after partial pauses and exclusions for certain sex offences, the direction of travel remains clear: capacity management takes priority over consistent public protection.

Contrast that with the treatment of British citizens who protest the consequences of mass migration or speak out online. Lucy Connolly, already imprisoned for a single X post after the Southport attacks, faced the threat of recall to prison for reposting a satirical comment about Donald Trump and Keir Starmer. Probation officials treated the joke as "inciting violence" after an anonymous complaint.

In Essex, protests outside an asylum hotel housing Ethiopian migrant Hadush Kebatu erupted after he sexually assaulted a 14-year-old girl and a woman. Kebatu received 12 months. British protesters involved in the subsequent disorder received far longer terms.

Charlie Land got 32 months. Jonathan Glover got 30 months. Lee Gower, a local father and youth football coach, received two years and nine months. Other locals drew sentences of 22 to 33 months. Combined custodial terms for several of them exceeded 17 years - longer than the perpetrator who triggered the unrest.

 

Judges stressed that violence against police is unacceptable. Yet the sentencing disparity is unmistakable. Locals reacting to a sexual assault on a child by a small-boat arrival spend more time inside than the man who committed the assault.

Meanwhile white prisoners report pressure to convert for survival, foreign national offenders cost hundreds of millions, and convicted terrorists walk early under capacity rules.

Prisons reflect the wider failures of open borders and selective enforcement. Gangs exploit the vacuum. Vulnerable inmates adapt or suffer. Taxpayers foot the bill.

Ordinary Britons who notice and object face the sharp end of the law. The figures on white Muslim prisoners are not a statistical curiosity. They are the measurable result of a system that has lost control of its own institutions.

Tyler Durden Thu, 08/27/2026 - 02:00

The Penal Leviathan: What Wacquant And Rothbard Reveal About Modern Punishment

Authored by Luc Lelièvre via Mises Institute,

Loïc Wacquant and Murray Rothbard come from completely different worlds. Wacquant, in Punishing the Poor (2009), analyzes how modern states manage marginalized populations through policing and incarceration. Rothbard, in The Ethics of Liberty (1982), argues that the state is a monopoly of coercion and that real justice means restitution to victims rather than punishment imposed by the government. At first glance, they seem to have nothing in common. Yet, when you look closely at what each says about crime and punishment, they describe remarkably similar institutional dynamics: a penal system that does not exist to deliver justice but to maintain political power, control vulnerable communities, and satisfy the public's desire for punishment.

Wacquant argues that modern punishment targets not crime itself but people with low incomes. In Punishing the Poor, he writes that "it is not so much crime that is being fought, but the poor themselves." He attributes this dynamic to welfare retrenchment and what he interprets as neoliberal restructuring. This is Wacquant's interpretation. My purpose here is not to defend or refute it, but to summarize his institutional analysis and compare it with Rothbard's critique of state power. Wacquant's central point is that the penal system expands as social protections shrink, turning prisons into warehouses for people pushed out of the labor market. He portrays the United States as an expansive apparatus of social control in which punishment falls primarily on street crime while much white-collar wrongdoing is managed through administrative and legal processes.

Rothbard approaches the issue from a different angle. For him, crime is fundamentally an aggression against a person or their property. Justice should repair the victim. That means restitution - returning what was taken, plus a penalty for the harm done. In Rothbard's view, prison is a double injustice. It fails to compensate the victim and forces taxpayers to pay for the criminal's room and board. As one Mises Institute essay summarizes, "the victim receives nothing and is then 'robbed' once more through taxes to feed and house the criminal." Rothbard sees the prison system as wasteful, immoral, and fundamentally misaligned with justice. His alternative is clear: restitution, even if it must be paid through supervised work when the offender has no money.

Rothbard's critique is not only moral but also economic. In his landmark article "Crime and Punishment: An Economic Approach" (1968), Gary Becker reached a similar conclusion from a different perspective. Every sanction carries costs as well as benefits, and incarceration is among the most expensive. If restitution, fines, or compensated labor can deter crime while restoring victims, prison becomes difficult to justify except for dangerous offenders. Becker's analysis complements Rothbard's argument by showing that restitution is not merely ethically preferable - it is also economically superior.

Wacquant and Rothbard share an understanding of the state's role. Wacquant views the penal state as a bureaucratic arm of what he calls neoliberal governance, used to control marginalized populations. Rothbard views the penal state as a predatory institution that thrives on coercion. Both agree that the penal system tends to neglect victims, expand state power, and generate political legitimacy rather than genuine justice.

Their agreement becomes even more striking when viewed through the lens of institutional incentives. A penal bureaucracy does not merely administer justice; it sustains a network of police agencies, prosecutors, correctional officers, prison contractors, and public budgets, all of whose continued existence depends on the expansion of penal institutions. Restitution threatens this logic by shifting attention from the state to the victim. A system centered on repairing private harm requires fewer bureaucracies and leaves less room for political theater. From this perspective, incarceration persists not merely because citizens demand punishment, but because governments have institutional incentives to provide it.

René Girard, in Violence and the Sacred (1972), helps explain how punishment operates. Girard argues that societies have always used scapegoats to relieve social tension. In modern times, the criminal becomes that scapegoat, and the prison becomes the altar. As one Mises Institute essay notes, "the real product of the penal system is collective catharsis." Punishment is not a rational policy, it is a ritual. This is why voters demand harsher penalties even when prisons fail. This is why mass incarceration persists despite its cost and lack of results. Punishment satisfies a symbolic need, not a practical one.

Girard also helps explain why governments find this ritual politically useful. If societies repeatedly seek symbolic victims to restore social cohesion, the state becomes the institution that organizes and legitimizes those sacrifices. Public fear creates demand for punishment; political institutions supply it. Rothbard exposes the institutional side of this relationship, while Girard reveals its anthropological foundation. Together, they show how emotional expectations and bureaucratic incentives reinforce each other, enabling the penal system to expand even when it fails to reduce crime or compensate victims.

This is where Rothbard offers something Wacquant does not: a way out. Restitution replaces the sacrificial logic of punishment with a logic of repair. It shifts the focus from the offender to the victim, closes the moral account rather than leaving it open, and satisfies the need for justice without feeding the bureaucratic machine. In To Serve and Protect (1990), Bruce Benson shows that pre-state legal systems, such as Anglo-Saxon weregild, relied on restitution to prevent feuds and maintain peace. These systems worked because they focused on compensation rather than punishment.

Wacquant advocates "radical penal minimalism," a model that narrows the scope of punishment while preserving its democratic legitimacy. Rothbard calls for a justice system based on restitution rather than incarceration. Girard calls for an end to sacrificial violence. Benson shows how restitution can be implemented. Becker argues that incarceration is often less economically efficient than restitution, fines, and other alternative sanctions.

Despite their profound philosophical disagreements, all five raise serious doubts about the effectiveness and legitimacy of a prison-centered model of justice. Becker questions its efficiency. Benson presents historical alternatives. Girard exposes its sacrificial logic. Wacquant reveals its bureaucratic expansion. Rothbard offers restitution as a principled alternative.

The penal Leviathan will not disappear through abolitionist slogans or bureaucratic reforms. It will disappear only when justice ceases to be a ritual of punishment and becomes a process of repair. That requires reexamining the assumption that crime should be understood primarily as an offense against the state rather than as an injury to identifiable victims. Once the victim again becomes the central figure in justice, restitution naturally replaces punishment as the primary objective.

As long as governments monopolize punishment, they retain incentives to expand the penal apparatus, regardless of its effectiveness. Restitution reverses that logic. It limits bureaucratic power, restores the victim to the center of justice, and transforms punishment from a political ritual into a genuine process of moral and legal repair. Whether approached through sociology, economics, anthropology, or libertarian political philosophy, the victim - not the state - emerges as the indispensable starting point for any coherent theory of justice.

Tyler Durden Wed, 08/26/2026 - 23:33

Soda Purchases Slumped 13% After SNAP Sugary Drink Restrictions

Soda purchases fell about 13 percent among Supplemental Nutrition Assistance Program (SNAP) beneficiaries after 10 states restricted purchases of sugary drinks with SNAP funds in 2026, a study found.

SNAP restriction waivers banned non-nutritious items like soda and candy to ensure that taxpayer dollars are directed toward nutritious options that improve health outcomes, the U.S. Department of Agriculture stated on its website.

The August study from the National Bureau of Economic Research - not yet peer-reviewed - evaluated the immediate effects of SNAP food restriction waivers in 10 states that implemented the bans.

Researchers used a Nielsen consumer dataset of about 5,000 SNAP households from July 2025 to June 2026.

Before the ban, the average SNAP household bought about 185 ounces of soda per month. That’s about 15 cans. The 13 percent drop is about 24 ounces, or two cans less per month.

Purchases of energy drinks also decreased by 4 ounces per household per month.

Interestingly, as Sylvia Xu reports for The Epoch Times, the study found that even households having enough cash to offset the restrictions reduced soda consumption by 18.5 percent, down 40 ounces per month.

When states labeled soda as an unapproved purchase, it acted as a powerful psychological signal, according to the report.

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Instead of bypassing the ban with cash, families reconsidered their habits.

The policy changed what they viewed as appropriate foods to buy, leading to a significant drop in overall soda purchases, according to the study.

These findings indicate that simple administrative restrictions can effectively steer dietary choices and potentially improve public health outcomes, the researchers concluded.

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However, it’s not clear how big the impact on sugar consumption will be.

A similar study in 2024 predicted a decline of up to 20 percent in soda purchases when the soda bans went into effect, but also forecast a 7 percent increase in juice consumption.

That would mean an overall decrease of just 7 percent in the intake of sugar from beverages.

Data on the current level of juice consumption by SNAP users is not yet available.

In fiscal year 2025, SNAP distributed $102.6 billion to nearly one in eight Americans, more than 42 million people. That’s about $2,400 per person per year.

Until this year, those funds could be used to purchase nearly all foods except for alcoholic beverages and hot prepared foods.

As of August, 23 states have implemented SNAP restriction waivers and prohibit recipients from purchasing junk food such as beverages and candy.

This is the first time in the program’s history that the Department of Agriculture has granted waivers allowing states to restrict SNAP benefits.

Tyler Durden Wed, 08/26/2026 - 23:00