FERC Will Impose Reforms If PJM Fails To Adopt Changes By September, Chairman Warns

By Ethan Howland of UtilityDive

The PJM Interconnection has until the end of September to agree to governance and stakeholder reforms or the Federal Energy Regulatory Commission will impose them, the agency’s chairman, Laura Swett, said Thursday.

“PJM is facing a grave legitimacy crisis,” Swett said at a technical conference FERC held on the grid operator’s governance issues. “Some transmission owners are openly discussing leaving the RTO altogether. Put plainly, market participants have lost confidence in PJM’s decision-making abilities.”

With PJM failing to attract significant new generation in its last two capacity auctions, the grid operator is ready for major changes in the way it operates, according to its new President and CEO David Mills, who officially took over the role in May after several months as interim leader.

“We are fully committed to rise to the challenge,” including capacity market reform, Mills said.

Potential reforms discussed at the meeting include increased board independence, a formal role for states at PJM, and giving states the right to file proposals at FERC — called “filing rights” — while also expanding PJM’s filing rights.

After taking post-conference comments, FERC intends to hold a dispute resolution forum in September with PJM stakeholders to develop a governance reform package, according to Swett. If an agreement isn’t reached by the end of that month, FERC will impose its own reforms on PJM, she said.

Capacity market exposes governance weaknesses

The technical conference comes about two years after capacity prices spiked in PJM as rising demand from data centers outpaced any increase in power supplies on PJM’s system, which spans 13 Mid-Atlantic and Midwest states and the District of Columbia. That price spike led to rate increases of 20% or more for some utilities and sparked intense interest from governors and policymakers.

PJM’s struggles in responding to the rapid shift in its supply-demand balance intensified governance problems that had been festering for years, Jodi Moskowitz, PSEG’s vice president regulatory — law, deputy general counsel and RTO strategy officer, said at the meeting.

Two problems highlighted at the meeting were the ability of PJM members to effectively fire the grid operator’s board members as well as its stakeholder process, which can be long and end without concrete results.

PJM uses a sector-weighted voting system in its stakeholder process, with a two-thirds majority of a sector-weighted vote required for a measure to pass. Under the system, members are divided into five categories — electric distributor, end-use customer, generation owner, other supplier and transmission owner.

One effect of the voting system is that two sectors can join up to block a measure they don’t like, which has happened repeatedly, especially on contentious issues, the RTO Governance Research Network said in comments filed at FERC.

During the meeting, representatives for American Electric Power and others said stakeholders should have an advisory role, like the one used by the Midcontinent Independent System Operator. Under that process, PJM’s board would get input from stakeholders, but final decisions would rest with the board.

Currently PJM members run the grid operator’s stakeholder process, which can lead to priorities getting offtrack, according to Asim Haque, PJM executive vice president, governmental and member services.

PJM’s failure to use authorities that it has and its failure to engage with states reflects the organization’s culture, according to FERC Commissioner David LaCerte.

“This is a cultural quagmire that they’ve developed by eroding the board in the past and creating this fear of [board members] being terminated to where they’re not using their authorities,” LaCerte said “They’re not engaging with the states because they don’t want to get out of line with what the stakeholders want.”

The solution appears to be making the stakeholder process advisory, LaCerte said.

“I don’t think we can do business as usual,” Haque said.

Tyler Durden Tue, 07/28/2026 - 14:20

DOJ Sues Colorado For Offering In-State Tuition Aid To Illegal Immigrants

Authored by Naveen Athrappully via The Epoch Times,

The Department of Justice (DOJ) sued Colorado on Thursday over state regulations that provide in-state tuition and financial aid to illegal immigrants.

Illegal immigrants from Nicaragua, Ecuador and other nationalities at a door on the border wall waiting to be picked up by the U.S. Border Patrol in El Paso, Texas, on Jan. 4, 2023. Paul Ratje/Reuters

The July 23 lawsuit, filed with the District Court for the District of Colorado, accused Colorado of ignoring Title 8 of the U.S. Code Section 1623, which bans illegal immigrants from being eligible for post-secondary education benefits in a state unless the same benefits are provided to all U.S. citizens, irrespective of their state of residence.

Colorado's Advancing Students for a Stronger Tomorrow Act, initially passed in 2013 and amended in 2019 and 2022, allows illegal immigrant students living in the state to access in-state tuition and financial aid.

In-state tuition benefits are granted to eligible students when applying to Colorado public universities or community colleges, whereas out-of-state U.S. citizens are required to pay higher tuition rates at these institutions.

"These statutes constitute blatant unequal treatment favoring illegal aliens over U.S. citizens. Worse, such preferential treatment is squarely prohibited and preempted by Congress," the lawsuit said.

According to a fact sheet from the Colorado Department of Higher Education, the Act removed several barriers that had prevented thousands of illegal immigrant high school students from qualifying for in-state tuition and financial benefits.

The 2022 revision of the Act reduced the time an illegal immigrant student needed to attend high school to obtain these benefits from at least three years to just one year.

Under the Supremacy Clause of the U.S. Constitution, extending eligibility for post-secondary education benefits to illegal immigrants is "unconstitutional," the lawsuit said. Several courts have struck down similar in-state tuition laws as unconstitutional.

For instance, earlier this month, the Fifth U.S. Circuit Court of Appeals ruled in a case filed by the Trump administration that Texas cannot offer in-state college tuition to illegal immigrants under its Dream Act, ruling that federal law overrides state policy.

In the Colorado lawsuit, the DOJ asked the court to enter a judgment declaring that the state's Advancing Students for a Stronger Tomorrow Act violates the U.S. Constitution's Supremacy Clause. It asked the court to issue a permanent injunction prohibiting the defendants from enforcing the Act or any similar statute.

Defendants in the lawsuit include the Colorado Commission on Higher Education, the Colorado Department of Higher Education, and its executive director.

In a July 23 statement, the DOJ said that the lawsuit against Colorado was the 14th case filed by the department challenging in-state tuition policies for illegal immigrants.

"By granting illegal aliens in-state tuition, Colorado is violating federal law and subsidizing education for illegal aliens at the taxpayers' expense," Associate Attorney General Stanley E. Woodward, Jr. said in the statement.

"This Department will not cease until President [Donald] Trump's promise is fulfilled: illegal aliens will not receive benefits denied to our Nation's own citizens."

The Epoch Times reached out to the Colorado governor and the Colorado Department of Higher Education for comments, but did not receive a response by publication time.

In addition to Texas, the Trump administration has succeeded in getting permanent injunctions against in-state tuition benefits for illegal immigrants in Kentucky, Nebraska, and Oklahoma.

Cases filed against California, Virginia, Massachusetts, Maryland, Rhode Island, New Jersey, Kansas, and Minnesota are pending.

Meanwhile, the DOJ announced in a July 24 statement that the District Court for the Southern District of Illinois ruled in favor of the federal government in a lawsuit against Illinois's in-state tuition benefits for illegal immigrants.

The case was filed in September 2025, with the state subsequently filing a motion to dismiss the lawsuit. The DOJ said that Illinois chose to give preferential treatment to illegal immigrants while not extending that treatment to Americans outside Illinois.

"This ruling enforces the statute Congress wrote and stops the State from putting illegal aliens ahead of American citizens," U.S. Attorney Steven D. Weinhoeft said in the statement.

In a July 23 fact sheet update, the National Immigration Law Center stated that adoption of "tuition equity" laws and policies across various states suggests that such actions help both U.S. citizens and immigrants of all statuses by reducing high school dropout rates and increasing the number of students pursuing college degrees.

Tyler Durden Tue, 07/28/2026 - 13:40

Nvidia's Taipei Office Raided As Taiwan's AI Chip-Smuggling Dragnet Results In Arrests

Taiwanese prosecutors have detained an Nvidia employee and searched the chipmaker's Taipei office, the first time the island's criminal investigation into the diversion of restricted AI hardware to China has reached inside the company whose processors sit at the center of it.

The Keelung District Prosecutors Office said Tuesday it had detained a man surnamed Chang on suspicion of falsifying business documents under the Criminal Code, after investigators searched his home and his workplace on July 24. Prosecutors said Chang is "strongly suspected of having committed the offences, and that there is a risk of flight, destruction of evidence, and collusion with accomplices or witnesses." A court granted the detention request.

The statement did not name Nvidia. Bloomberg first reported that Chang works for the company and that the search covered his desk at Nvidia's Taipei office, and Bloomberg's sources said the detention also involves an allegation of breach of trust. Prosecutors have not accused Nvidia of any wrongdoing.

Seven people are now being held in the case, including two from Super Micro Computer and one from Taiwan-listed Albatron Technology. Chang is the first known Nvidia employee to face detention in a chip diversion case anywhere.

The investigation opened in May, when Taiwanese officials said they were examining the shipment of high-end AI servers built by Super Micro and containing restricted Nvidia chips to China, Hong Kong and Macau in violation of US export controls. Those held are accused of forging documents to move roughly 50 Super Micro servers. Some cleared Taiwanese customs and were routed to China through Japan, an official previously told AFP.

Taiwanese media have described Chang as a senior business-development manager and reported that prosecutors are examining end-user and know-your-customer documentation he is alleged to have signed off on - the paperwork layer that export compliance depends on. Prosecutors have released no further detail on his role or the evidence.

Nvidia, whose chips power most of the world's advanced AI systems, said it sells primarily to established partners and original equipment manufacturers that help ensure compliance with US export rules. "Smuggling is a nonstarter," a spokesperson said. "Even relatively small exporters and shipments are subject to thorough review and scrutiny on both sides of the globe, and any diverted products would have no service, support, or updates."

The American Case

Taiwan's investigation runs alongside a far larger US enforcement action. In March, the Justice Department unsealed charges against Super Micro co-founder and board member Yih-Shyan "Wally" Liaw, Taiwan sales manager Ruei-Tsang "Steven" Chang and contractor Ting-Wei "Willy" Sun, alleging a conspiracy to divert roughly $2.5 billion in Super Micro servers carrying restricted Nvidia GPUs - including H200 and B200 parts - to China between 2024 and 2025 without Commerce Department licenses.

Liaw's trial is set for November 2. He faces up to 20 years on the lead conspiracy count. Chang has been described in earlier reporting as a fugitive. Super Micro was not charged, has said it is cooperating, and placed the implicated employees on leave. Taiwanese prosecutors have said it is too early to tell whether their case connects to the American one.

The Gap Prosecutors Are Working Around

Taiwan manufactures the world's most advanced semiconductors and assembles them into the servers at issue. It has no statute that directly criminalizes exporting AI chips to China.

That is why the charges in Keelung are forgery and false business records rather than anything touching the diversion itself. A proposed amendment to Taiwan's Foreign Trade Act, adding what has been described as a mainland China semiconductor clause, would let prosecutors charge the export directly. It has not passed. The Ministry of Economic Affairs has confirmed consultations with Washington on adopting performance-threshold controls modeled on the US framework, without committing to a timeline.

Seven weeks into the case, prosecutors are still building it out of the general Criminal Code.

Washington has restricted sales of Nvidia's most capable accelerators to China since 2022, on the argument that hardware that trains commercial models also trains military and surveillance ones. Blackwell-class parts remain under a presumption of denial, meaning license applications are effectively refused. The H200 was moved to case-by-case review in January.

Chinese demand has not moved with the policy. Older-generation parts command steep premiums on the gray market, and diversion reports have circulated for years. The servers in the Taiwan case are worth a fraction of the American one, which is roughly the point: the hardware is scarce enough that even small volumes are worth forging paperwork over.

Tyler Durden Tue, 07/28/2026 - 13:20

FIRY Wins $719 Million Game Of Solitaire, Torching Shorts Along The Way

Markets rarely hand you a clean morality play. On Monday night, a federal judge entered one, clocking in no less than 78 pages, in the public docket. And for anyone who has played one of America's chart-topping “skill gaming” apps - a group that certainly includes many readers of this site - this may be for you.

A federal trial has now established that at Papaya Gaming, the private Tel Aviv-based publisher of Solitaire Cash and Bingo Cash, the “humans” across the table were actually quite often programmed bots.

The winner in all of this is Firy, Inc. (of the eponymous FIRY ticker), the operator that played the SPAC game to a $3.5 billion valuation in 2020, roundtripping 96% to a $130 million market cap with an estimated 20% of its float sold short.

Needless to say, at a market cap of a paltry $130 million, the market had written the whole thing off, pricing FIRY below the $185 million of cash on its latest, March 31st balance sheet, never mind the platform or anything else left on either side of the ledger.

But all that changes now. FIRY led the lawsuit against Papaya and is the beneficiary of a $719 million award handed down overnight, well over 5 times its market cap. This is the judge’s ruling after a $420 million jury award and Papaya’s failed attempts to get the case tossed out.

What Papaya did, in the court's own words (from Monday’s Opinion)

• “In January 2021, for example, Papaya used bots in about 90% of its cash tournaments” (Op. at 8.)
• From 2021 to 2024, “bots accounted for over 13 million of the participants on Papaya's platform, compared to about 11 million human players.” (Op. at 7.)
• "Papaya only paid customers roughly $2 billion of the $6.7 billion that it advertised had been awarded in prizes.” (Op. at 8.)
• "When a bot ‘won’ one of these tournaments, Papaya kept all entry fees.” (Op. at 28.)

Liquidity bots, tailored bots, and losing before you played Papaya ran two kinds of fakes.

• "Liquidity bots were used to create immediately accessible tournaments of various sizes, including up to 20 or more ‘players’.” “[A] 20-player tournament might have one human player and nineteen bots.” (Op. at 7.) Their job was to make a game exist instantly, at any hour of the night.
• The second kind decided outcomes: “bots were used to give a player a designated win or loss. For instance, a player who had a losing streak could be given a ‘win’ to motivate them to keep playing in more tournaments.” (Id.) These “tailored bots” operated “in over 630 million Papaya tournaments, or in roughly one-quarter of the 2.6 billion tournaments that Papaya hosted during the years 2021 to 2024,” and “[m]ore than 6.1 million of those human beings played in at least one tournament where tailored bots were designed to give them a loss.” (Id.)

Think about that: millions of Americans paid to lose games that were over before they started.

The Fifth Amendment and the apology

Perhaps predictably, Papaya's executives pled the Fifth Amendment during the case and the court did not let them un-
ring that bell at the last minute.

• “Papaya's executives invoked their Fifth Amendment right against self-incrimination at their depositions. About a year later, on the eve of trial, those same executives sought to withdraw their invocation of the Fifth Amendment privilege.” (Op. at 13.)

Later on, Papaya's own trial lawyers conceded to the jury: “Papaya has taken responsibility for its actions. It stopped
giving those customer complaint responses. It stopped using bots.” (Op. at 11 n.2.) Please clap. 

The $719 Million Blow

On April 23, a unanimous jury found Papaya liable for false advertising and awarded $420 million in damages - what the winning law firm King & Spalding calls the largest false-advertising award in U.S. history.

Yesterday's opinion granted a $719 million disgorgement of Papaya's profits - higher than the $420 million jury verdict - and did not mince words: “Papaya's fraudulent conduct was extraordinary.” (Op. at 37.) Papaya “entered the U.S. market through a massive deception” (Op. at 71) — a “willful, bad faith violation of the law.” (Op. at 76.)

FIRY ends up the big loser and the big winner

FIRY launched the first real-money skill-gaming platform back in 2012 (Op. at 4) and rode the SPAC wave public at a $3.5 billion valuation in December 2020. The court traced what happened next: “Skillz’s revenue had fallen by 60% in just two years, tumbling from $384 million in 2021 to $152 million, while Papaya's revenue skyrocketed from $163 million to $461 million over the same period.” (Op. at 10.) In June the company rebranded itself FIRY... because five years of a tortured stock price will do that to you.

Now What?

The cheater owes $719 million and the honest player collects. Good over evil, with interest.

The 20% of the float that was short into Monday's opinion bet on the wrong hand. On the April jury verdict alone, FIRY closed up 238% amid multiple volatility halts. And that was before the judge denied a new trial and raised the number above what the jury awarded ($420 million to $719 million).

To appeal, Papaya must produce an appeal bond on the order of $800 million in real money — no bots accepted. Will the private credit bubble extend to writing that paper for a private Israeli company whose only product a federal jury and a federal judge have both found was fraudulently marketed? Is there an AI angle here? Asking for a friend in Tel Aviv.

Next Up: Voodoo

Monday was not the first time this has happened. In 2024, FIRY took AviaGames - publisher of Pocket7Games - to a California jury and won $42.9 million for patent infringement, two years before its latest win against Papaya (“Skillz Wins $42.9M IP Trial Against Rival Accused Of Bot Fraud”).

Now in 2026, FIRY takes a win against Papaya.

Then there is the one more case not yet discussed: FIRY’s July 2024 lawsuit against Voodoo, the French owner of Blitz Win Cash, over what it alleges is the same bot playbook. While Voodoo fights these claims and nothing has been decided, one would imagine the Papaya verdict is being analyzed today in Paris.

Tyler Durden Tue, 07/28/2026 - 12:40

PG&E Says It Has 12.7 GW In Data Center Pipeline As It Courts Smaller Loads

By Emma Penrod of UtilityDive,

Pacific Gas and Electric now counts 12.7 GW in its data center pipeline, of which 490 MW of projects have executed interconnection agreements and another 3.9 GW are in final engineering, company officials said Thursday during a second-quarter earnings call.

The company’s data center pipeline has fluctuated over the past year, from 7.3 GW at the end of 2025 to 5.4 GW in the first quarter of 2026 as projects dropped out. The company’s most recent investor presentation Thursday retroactively revised down its queue from last quarter to 5.1 GW, citing changes to its methodology.

Executives attributed the changes to stricter vetting of potential projects and expressed confidence that their efforts to attract the right kind of customer are paying off.

PG&E Corporation CEO Patti Poppe said she expects to serve 1.8 GW of new data center load by 2030.

“As we continue to build our pipeline, we’re focusing not on size, but on quality,” Poppe told analysts on Thursday’s call. “We remain very focused on pricing this load correctly — attractive to data center customers, but still rate-reducing for our other customers. ... Done right, these efforts can help build a high-confidence pipeline that lowers electric bills, drives economic growth and keeps California at the forefront of technology and innovation.”

Although PG&E attracted interest from some larger data center projects this past quarter, Poppe said smaller data centers with electric demand under a gigawatt constitute the bulk of the company’s queue to date.

By the numbers — PG&E Q2’26

• 22.7 GW: Data center pipeline, with 3.9 GW in final engineering
• $1.25B: Amount PG&E expects to receive from the California Wildfire Fund for the 2021 Dixie Fire.
• $16.6B: Revenue requested in the utility’s 2027 General Rate Case, for which evidentiary hearings are underway
• $73B: Five-year capital plan

Meanwhile, the 2026 wildfire season remains relatively quiet, with Poppe noting that 2026 is — so far — the company’s fourth consecutive year without a major fire. She said the company has managed to avert 13 potential ignitions this year thanks to its monitoring and mitigation efforts.

However, the company continues to face significant costs and liabilities related to previous wildfires. Earlier this month, the California Public Utilities Commission proposed a settlement agreement that would impose a $22 million penalty on the utility for the 2022 Mosquito Fire in Placer County.

Pending public comment and approval, the settlement would end the CPUC’s investigation into the utility’s role in the fire. PG&E faces at total of $400 million in liabilities for the Mosquito Fire, plus $2.25 billion related to the 2021 Dixie Fire. It expects to receive $1.25 billion from the state Wildfire Fund for the Dixie Fire and has already received $128 million from the fund for the 2019 Kincade Fire. It does not expect reimbursement from the fund for the Mosquito Fire, according to company filings.

The utility expects California lawmakers to pass reforms to shore up the state Wildfire Fund later this year. Though S&P recently upgraded PG&E’s credit rating, legislative reform remains critical to the company’s strategy for achieving investment-grade ratings, PG&E executive vice president and CFO Carolyn Burke said on Thursday.

“There’s no case for no action,” Poppe later added. “In other words, if the legislature does not act or if they act and don’t actually solve the problem, then we’re going to have to take action.”

Poppe and Burke declined to answer analysts’ questions about the details of that potential action, but indicated that all aspects of the company’s $73 billion financing and capital plan would be on the table.

Under its current plan, the company will spend about $58 billion on transmission and distribution lines and $3 billion on power generation, according to the company’s earnings presentation. A 2027 General Rate Case currently underway seeks more than $16 billion in revenue.

Poppe said the interim rate request — opposed by some intervenors — was intended to reduce rate shock for customers. She said it would have no bearing on the company’s financing plan.

Tyler Durden Tue, 07/28/2026 - 12:20

The Fair Share Myth And Other Socialist Fables

Authored by Jonathan Turley,

New York City socialist mayor Zohran Mamdani is back in his element. After admitting that he cannot fulfill his campaign pledge to arrest Israeli Prime Minister Benjamin Netanyahu, Mamdani returned to his class warfare narrative. This week, he taunted the city’s highest-earning taxpayers with a letter informing them of another special tax awaiting them in the Big Apple.

As wealthy citizens flee the city, Mamdani strongly suggests that those who remain are going to get burned by his promised “warmth of collectivism.” In doing so, he repeated a socialist myth about how the wealthiest taxpayers are not paying “their fair share.”

Mamdani went on X to tell those with second homes in New York City worth more than $5 million that “you’ve got mail” and a “new pied-a-terre tax.” He gleefully declared, “The best city in the world deserves the best parks, libraries, and schools in the world. That’s only possible when we all pay our fair share.”

The fair share myth is a virtual mantra among socialist and Democratic leaders, from Mamdani to Sen. Bernie Sanders (I-Vt.) to Rep. Ro Khanna (D-Calif.). In my book, “Rage and the Republic,” I address the false claim that the wealthy are not “paying their fair share.”

In fact, the top 10 percent already pay more taxes than the bottom 90 percent combined.

In 2023, the top 1 percent paid an estimated 38.4 percent of all federal individual income taxes. One can certainly raise the need for additional taxes to support public works, but it is simple demagoguery to claim that the wealthy do not pay their fair share when the top 10 percent pay an estimated 75 percent of federal income taxes. The U.S. income tax system is already the most progressive in the developed world, even before additional New York state and city taxes are added in.

The demonization of the wealthy is one of the oldest tactics of politicians seeking to empower themselves by harnessing mob rage.

Combined with pledges of free stuff under socialism, it creates a dangerous delusion among disgruntled citizens.

Another common fable has been repeated by socialists such as Darializa Avila Chevalier, the prison abolitionist who won a recent primary for Congress in New York. This radical, who once boasted how she wiped her hands on the American flag in lieu of a napkin, was pressed on whether there has ever been a “successful model of socialism anywhere in the world outside the U.S., in terms of both human rights and widespread economic justice.”

She responded by citing Sweden and Norway, as other figures such as Sanders have done before her. Indeed, the claim of successful Scandinavian socialist systems is a sort of Marxist bedtime fairytale, told to children about a workers’ paradise in quaint Nordic fishing villages.

But Sweden’s experience only shows the limits of socialism even in a relatively small nation. Decades ago, after disastrous results to its economy, Sweden turned away from the very kind of socialist theories increasingly fashionable in the U.S. today.

Norway has large public welfare systems, it is true. But there is a very specific reason for that: It has enormous direct oil revenues supporting a very small population. The Norwegian state produces about 120 barrels of oil for every man, woman and child living in the country. If the U.S. could produce that much oil per person through a state-controlled entity, it would be more oil than the entire world produces today and worth enough money to replace all federal individual and corporate income tax revenue.

In truth, countries like Denmark and Sweden strongly embrace capitalist principles today. They are listed among the most capitalist nations on Earth — in some rankings ahead of the U.S.

Indeed, many of their leaders have expressed disbelief or amusement at longstanding claims by American leftists about their being socialist nations. In 2015, Danish Prime Minister Lars Rasmussen observed, “I know that some people in the U.S. associate the Nordic model with some sort of socialism. Therefore, I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”

Likewise, the former Swedish Social Democratic Minister of Finance Kjell‐Olof Feldt said, “That whole thing with democratic socialism was absolutely impossible. It just didn’t work.”

But to candidates eager to prove their revolutionary bona fides, none of that matters.

Even mainstream hopefuls such as California Gov. Gavin Newsom (D) are now making the bizarre claim that capitalism is no longer working. It also does not matter that, in supporting Mamdani’s new tax, Gov. Kathy Hochul (D) heralded how it could raise $500 million, despite reports showing a loss of billions in annual revenue as wealthy taxpayers flee the state.

Amid a rash of capital flight, many ask why Mamdani would want to continue taunting the wealthy and portraying them as freeloaders. The fact is, wherever it gets a foothold, socialism becomes self-perpetuating.

Wherever ruinous policies destroy an economy, demand increases for government services and welfare. Citizens become more dependent on government as wealth is diminished.

The most vivid example of the new socialist fabulism came this week from the new British prime minister, Andy Burnham. He declared that he wants to restore the policies of 40 years ago, before the Conservative government of Margaret Thatcher.

In his own version of promising the “warmth of collectivism,” Burnham declared, “The country surrendered control of the essentials — housing, water, energy, transport — and left people exposed to higher costs.”

Burnham’s account leaves out that the supposed golden age under Labour Prime Minister James Callaghan, which he was referencing, led in 1977 to the so-called “winter of discontent.”

Those policies destroyed the British economy, and the nation was faced with the humiliation of being rescued by the International Monetary Fund as if it were some banana republic.

With a record like that, it is little surprise Mamdani and his allies prefer to focus on socialist mythologies rather than realities.

Jonathan Turley is a law professor and the New York Times best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.“

Tyler Durden Tue, 07/28/2026 - 11:40

Secret Service Probes Iran-Linked Video Calling for Melania Trump's Assassination

Authored by Tom Ozimek via The Epoch Times,

A video calling for the assassination of First Lady Melania Trump has been published by a media outlet linked to Iran’s Islamic Revolutionary Guard Corps (IRGC), with the U.S. Secret Service saying it is aware of the material and investigating anything perceived as a threat.

Tasnim, an IRGC-affiliated news outlet, released the video on its Telegram channel on July 28. The video offered specific suggestions for carrying out an attack against the first lady.

The video, titled “Where to Kill Melania?!,” claims to have information about how her security detail operates and points to possible vulnerabilities and locations where she might be found by would-be assassins. The Epoch Times has reviewed the video but is not reproducing it or detailing its instructions.

Besides encouraging lethal “operations by global freedom fighters” targeting the first lady, the video contains a direct threat against President Donald Trump’s youngest son.

“This is just the beginning,” a voice says near the end of the video. “Barron Trump, wait for us.”

Secret Service Responds

The Secret Service told The Epoch Times that it is aware of the video and reviews material that could pose a threat.

“The Secret Service is aware of the video and investigates anything that can be perceived as a threat toward our protectees,” Nate Herring, a lead public affairs specialist with the agency’s Communications and Media Relations office, said in an emailed statement.

“Out of concern for operational security, we do not discuss matters of protective intelligence.”

While Herring confirmed that the video was being examined, he did not indicate whether the agency had identified a specific or credible threat.

Calls for Trump’s Death

The video is the latest Iran-linked material to target the president and his family as military tensions between Washington and Tehran continue.

Billboards have appeared in the Iranian capital in recent weeks calling for Trump’s death.

During the funeral procession for slain leader Ayatollah Ali Khamenei earlier this month, mourners also carried banners calling for the president’s assassination.

As crowds jostled in Mashhad awaiting Khamenei’s funeral cortege, mourners chanted slogans demanding revenge.

“I swear by the blood of the supreme leader, Trump, we will kill you!” they shouted, while some women held placards reading “Kill Trump.”

Trump has said he has long been at the top of Iran’s target list.

“I’ve been on their list for a long time. That’s what we’re dealing with,” Trump told The New York Post on July 10. “The only thing is, I’ve left instructions—if anything happens, to just literally bomb them at levels that they’ve never seen before.”

A day later, Trump said 1,000 U.S. missiles were “locked and loaded” and aimed at Iran, with thousands more ready to follow if the regime assassinated him.

“Orders have already been given, and the U.S. Military is ready, willing, and able,” Trump wrote in a post on Truth Social.

History of Iranian Plots

Threats against Trump from Iran predate the latest conflict.

Iranian officials have repeatedly vowed to avenge the January 2020 killing of IRGC commander Qasem Soleimani, who died in a Trump-ordered U.S. drone strike in Baghdad.

Revolutionary Guard Gen. Qasem Soleimani (C) attends a meeting in Tehran on Sept. 18, 2016. Office of the Iranian Supreme Leader via AP

In November 2024, federal prosecutors charged Iranian national Farhad Shakeri over what they described as an IRGC-directed murder-for-hire network targeting people in the United States.

According to the U.S. Department of Justice, Shakeri told investigators that an IRGC official had instructed him to submit a plan to surveil and kill Trump.

Shakeri, who immigrated to the United States as a child and was deported around 2008 after serving 14 years in prison for a robbery conviction, was also accused of using criminal associates to support Iranian surveillance and assassination operations.

Tyler Durden Tue, 07/28/2026 - 11:00

Nearly 400 Drones Target Moscow Overnight, With Zelensky In Washington Seeking To Sway Trump

Ukraine's long-range drone attacks on Russian territory have long become a nightly thing (as have Russian drones and missiles on Ukraine territory), but it has become clear that these attack waves have grown in volume and effectiveness.

On Tuesday Russian officials are newly acknowledging another massive attack wave on the Moscow region, describing that nearly 400 drones were inbound on the capital overnight. 

Source: General Staff of the Armed Forces of Ukraine

Moscow Mayor Sergei Sobyanin indicated that 390 drones had been tracked by anti-air defense systems across the wider Moscow region since Monday night, but said that "most" of them were intercepted - with no forthcoming reports of casualties. 

One regional report cited some damage in residential and business areas, however:

In the village of Vaulovo, a private house caught fire in the “Dubrava” dacha community, and a dacha house was damaged in the “Romashkino” community in the village of Dubna. No one was injured.

A warehouse belonging to the logistics company 3PL caught fire in the village of Koledino in Podolsk, outside Moscow, following the attack, the independent Telegram channel Astra reported, citing photos and video from witnesses. A nearby Wildberries warehouse is operating “as normal,” the company reported.

Drones impacted other regions of Moscow, however, and left at least 19 people in the Belgorod region injured. The high rate of injuries was due to an intercity bus being struck.

Ukraine has continued targeting Wildberries warehouses and logistics hubs (the major Russian online retailer which is comparable to Amazon) - an escalating trend since July 18. So far nearly a dozen facilities have been hit across Moscow and the surrounding region, St. Petersburg and the Leningrad region, Voronezh, Tambov, Krasnodar, Stavropol Krai, and Crimea..

Crimea meanwhile continues to struggle to keep the lights on and gas supplies available for the population. Regional reports say power was knocked out for the city of Feodosia overnight, after an electric substation was struck.

Ukraine's President Zelensky has been highlighting the 'success' of the country's drone capabilities to Western backers, and is expected to carry the same message to Washington this week.

Israel shared "intelligence" with Trump to encourage war on Iran, and now Zelensky is attempting the same move with "intelligence" that promotes more belligerence against Russia.

Biden's Ukraine proxy war and Trump's Iran regime change war are increasingly converging. https://t.co/fV3vbQBcSJ

— Aaron Maté (@aaronjmate) July 27, 2026

He also urgently wants more missiles, both offensive and defensive, after President Trump vowed to allow Ukraine licensing to produce its own Patriot systems - which in reality would likely be a years-long process to just get off the ground.

Zelensky has touched down in Washington, where he is attending Sen. Lindsey Graham's - and he will also be hosted at the Oval Office for a Trump meeting. He says he has new intelligence and a compelling case for Washington to increase its involvement on Kiev's side.

Tyler Durden Tue, 07/28/2026 - 10:40

Massie Joins Democrats In Bid To Sue White House Over Iran War

Authored by Dave DeCamp via AntiWar.com,

Rep. Thomas Massie (R-KY) is joining a group of Democrats who are attempting to sue the White House over its refusal to follow a War Powers Resolution that was passed by Congress and directed President Trump to end the war with Iran, Fox News Digital reported Monday.

The War Powers Resolution was passed by both the House and Senate in June, marking the first time Congress approved a concurrent resolution under the 1973 War Powers Act directing the termination of an unauthorized war.

via Fox News

Section 5(c) of the 1973 War Powers Act states that "at any time that United States Armed Forces are engaged in hostilities outside the territory of the United States, its possessions and territories without a declaration of war or specific statutory authorization, such forces shall be removed by the President if the Congress so directs by concurrent resolution."

Massie told Fox that Trump and US War Secretary Pete Hegseth are "in blatant violation of two sections of the War Powers Resolution of 1973."

"For the first time since the law was enacted, a concurrent resolution has passed in accordance with 5(c) of the law, but the White House has ignored it. It seems they’ve assumed the law is unconstitutional, but no court has ever found that to be the case, so the law remains on the books while the White House flouts it. In the 1983 case INS v. Chadha, the Supreme Court did not opine on the 1973 War Powers Resolution. It's time for the courts to settle this, and that’s what our legislation directs," Massie said.

"They’ve also violated section 5(b) of the law, but rather than ignore the law, they’ve perpetuated a ruse that the 60-day limit on Presidential military activity does not apply with respect to the Iran war, because each time they effect a temporary ceasefire, the statutory clock restarts. We believe no court would agree with this absurdity, and this should be litigated as well," he added.

The legislation to enforce the War Powers Resolution was introduced by Rep. Gregory Meeks (D-NY), the ranking member of the House Foreign Affairs Committee, and has five co-sponsors, four Democrats plus Massie. The bill would require House Speaker Mike Johnson (R-LA) to take legal action against the administration to enforce the concurrent War Powers Resolution.

"The power to declare war rests unequivocally with Congress, yet Speaker Johnson and the vast majority of Republicans have allowed President Trump to trample over the Constitution and wage a war that has not been authorized by Congress," Meeks said in a statement on the bill.

"Nevertheless, Democrats, together with the few Republicans who upheld their oath, successfully passed my Iran War Powers Resolution that requires the president to end his hostilities in Iran last month," he added.

"Despite what the administration might say, I believe my War Powers Resolution is binding, and it is time to settle that question in the courts. As the Speaker of the House, Johnson must bring this suit forward. If the Speaker won't defend congressional prerogatives, we must compel him to do so, which is why I’ve introduced this legislation to force his hand," he added.

Tyler Durden Tue, 07/28/2026 - 10:20

Conference Board Survey Signals Ugly Job Market, Weakest 'Present Situation' In Over 5 Years

The Conference Board's measure of Americans' Consumer Confidence fell more than expected in July, from an upwardly revised 92.2 to 90.8 (well below the 92.4 expectation)...

The Present Situation index fell to 114.9 (below 117.5 exp) -  its weakest since Feb 2021 while Expectations were unchanged at 74.7 (very slightly better than the 74.4 exp).

“Consumer confidence moderated slightly in July, continuing a general downward sloping trajectory since late 2021,” said Dana M Peterson, Chief Economist, The Conference Board.

“The Present Situation Index was less positive for a third consecutive month while the Expectations Index remained in negative territory. Consumer appraisals of current business conditions and, to a lesser extent, perceptions of the current labor market both softened.

Looking ahead, consumers anticipate little improvement in business conditions over the next six months, but expectations for the labor market were slightly less negative. Expectations for household incomes moderated but remained optimistic overall.”

On a six-month moving average basis, by age, confidence for consumers under 35 remained the highest, while confidence among those aged 35-54 showed the greatest improvement.

By income, confidence was mixed, but generally higher-income groups were more optimistic.

By generation, confidence for Gen Z and Millennials remained the highest, while confidence fell the most for the Silent Generation on a six-month moving average basis.

By political affiliation, confidence among Independents and Democrats softened while Republicans were somewhat more positive.

And while jobless claims dropped to their lowest level since 1969 last week, perceptions of current employment conditions declined, with the labor market differential - the share of consumers saying jobs are “plentiful” minus the share saying jobs are “hard to get” - dipping by 0.7 ppts to +3.1%. This downshift was driven by fewer consumers reporting that jobs are “plentiful”, while the those saying jobs are “hard to get” dipped slightly over the month.

Consumers’ average and median 12-month inflation expectations were less elevated in July. Most consumers—61.3%, unchanged from June—still expected higher interest rates over the next 12 months. Notwithstanding recent volatility in the equity markets, consumers still expected higher stock prices a year from now. 

Consumers’ write-in responses on factors affecting the economy continued to be mostly pessimistic in July.

References to prices and oil and gas eased in frequency but remain elevated. Comments about food and grocery prices increased.

Mentions of war, geopolitics, and conflict eased during the sample period. However, as the fighting has reaccelerated quite recently there could be an increase in these mentions in the revised data for July.

Tyler Durden Tue, 07/28/2026 - 10:10

J&J's Proposed $5.5 Billion Talc Settlement May "Lift Remaining Overhang" On Shares, Says Guggenheim

Johnson & Johnson announced late Monday that it had reached an agreement to commit $5.5 billion to resolve most lawsuits alleging its talc products caused ovarian cancer. The settlement could end 15 years of litigation and "lift the remaining overhang" on J&J shares, according to one institutional trading desk.

The "comprehensive resolution," as described by J&J, requires participation from law firms representing at least 95% of pending state and federal claims. The company faces roughly 76,000 lawsuits, though some Wall Street analysts expect that number could soon top 90,000.

J&J maintains that its talc products are safe and never contained asbestos. It stopped selling talc-based baby powder in the US in 2020 and globally in 2023 after repeated attempts to resolve the claims through bankruptcy court failed.

"Studies show talc is safe, does not contain asbestos, and does not cause cancer," J&J wrote in the press release.

"After decades of litigation and full vetting of the science in an extensive hearing, plaintiffs effectively conceded their inability to prove specific causation by withdrawing their experts on the topic in two bellwether cases," said Erik Haas, Worldwide Vice President of Litigation, Johnson & Johnson.

Haas continued, "In a watershed moment, the Court thereafter ordered plaintiffs to show why the remaining claims should not be dismissed, confirming what we have maintained for years: that these claims lack scientific merit and were sustained only by unreliable expert opinions that could not survive rigorous judicial review."

Guggenheim Securities senior biopharmaceutical equity research analyst Vamil Divan wrote in a note that a "Potential Talc Settlement Could Lift Remaining Overhang on JNJ Shares," adding, "It's Not Over' Til It's Over, but This Time It May Actually Be Over."

Divan added more color:

JNJ has announced an update on their ongoing talc litigation, with the company reaching a proposed settlement that would lead to them paying a minimum of $5.5Bn to resolve the outstanding claims related to the product potentially causing ovarian cancer.

We have lost count on the number of times the company has seemingly come close to resolving this issue but not being successful, but this time appears potentially different with law firms representing the MDL and state leadership supporting the resolution and apparently poised to recommend it to their clients, per the company.

JNJ also clarified to us that the minimum $5.5Bn commitment would be paid out on a claim-by-claim basis based on a grid that assigns a value to each claim based on numerous criteria, starting with $3Bn next year.

We would note that our investor discussions on talc have declined markedly over the past year as the company has delivered significant positive progress both commercially and with their pipeline, particularly in Innovative Medicine.

As a result, it is not clear to us how much of an overhang this talc litigation actually is on JNJ shares anymore. However, we believe expectations were still in the ~$10Bn range for what JNJ may need to pay to settle all of the outstanding ovarian cancer claims, so if this can be resolved for ~$5.5Bn then we think that should be received positively by the Street.

Analysts from Citi offered their take on the J&J development:

Another Proposed Resolution for Ovarian Talc, Hopefully the Last

Management has proposed another resolution of its ovarian talc litigation, potentially tying off 15 years of litigation. The resolution follows a July 22 court ordering that plaintiffs exhibit why the remaining talc claims should not be dismissed for inability to prove specific causation – “The order followed plaintiffs’ withdrawal of their specific causation experts in two bellwether cases, after a hearing that demonstrated their opinions were not based upon reliable scientific methodologies.” The resolution requires participation of at least 95% of the remaining claimants, with total payments of $5.5B including the first payment of no more than $3B in 2027, and no additional payments before 2028. While management has been at this threshold previously, with the inability of the plaintiffs to provide specific causation in these pivotal cases, it appears that this proposed resolution will be the final, successful one. We rate JNJ Buy.

J&J shares rose about 2% in premarket trading. The stock had gained nearly 29% for the year through Monday's close.

Wall Street remains firmly bullish. Among analysts tracked by Bloomberg, 71.4% rate J&J a "Buy," while the remaining 28.6% recommend "Hold." None carries a "Sell" rating.

The average 12-month price target stands at $276.24.

Tyler Durden Tue, 07/28/2026 - 09:40

Max'd Out Again: FAA Proposes Inspections For Hundreds Of Boeing 737 Planes Over Seat Installations

Authored by Naveen Athrappully via The Epoch Times,

The Federal Aviation Administration (FAA) is proposing an inspection of hundreds of seats installed in Boeing 737 Max aircraft due to safety concerns.

The FAA proposed adopting a new airworthiness directive for three 737 Max models—737-8, 737-9, and 737-8200, the agency said in a notice published in the Federal Register on July 27.

An airworthiness directive is a legally enforceable regulation issued by the FAA to correct what it deems to be an unsafe condition in a product. The proposed directive “would require a detailed inspection of the seat track fittings of each left and right side track-mounted passenger seat assembly for correct installation and applicable on-condition actions,” the FAA said in a notice.

According to the agency, it has received a report suggesting that certain track-mounted passenger seats were not properly installed in the models’ seat tracks. Incorrect installations can result in seats disengaging from seat tracks during turbulence, increased load, or emergency landing.

If not addressed, the situation could result in passengers and crew members getting injured during an emergency situation and the aisle becoming blocked, which can slow down an evacuation process, the FAA warned.

The FAA decided to issue the notice after determining that the unsafe conditions are “likely to exist or develop on other products of the same type design,” the agency said.

The issue is estimated to affect 453 airplanes. With an estimated 69 track-mounted passenger seat assemblies per airplane, aircraft operators may need to shell out more than $2.65 million to inspect all the affected seats, according to the FAA.

A Boeing spokesperson said the planemaker issued guidance to ​operators about the issue in December 2025.

“We support the FAA making that guidance mandatory,” the spokesperson said.

The FAA recently determined that Boeing can resume issuing airworthiness certifications for these models. An airworthiness certificate is issued at the last stage of an aircraft’s production process and confirms that the plane is safe to operate.

The FAA prohibited Boeing from issuing these certificates for newly built 737 planes in 2019 following two accidents.

In the first incident, a Lion Air Flight 610 crashed over Indonesia in October 2018. A few months later, in March 2019, Ethiopian Airlines Flight 302 crashed in Ethiopia. Combined, the accidents resulted in the deaths of 346 passengers and crew members.

In 2022, the FAA also stopped Boeing from issuing airworthiness certificates for 787 planes due to production quality issues.

In September 2025, the FAA allowed Boeing to start issuing these certificates for some of the 787 and 737 Max planes. The agency and Boeing issued certificates on alternating weeks.

The FAA said earlier this month that over the past eight months, it has observed that the airworthiness certificates issued by the agency and Boeing had “comparable production quality findings.”

The agency decided that Boeing can now handle this responsibility. The FAA will continue inspecting, monitoring, and auditing Boeing’s production system. The oversight will involve “closely observing and assessing” the company’s safety culture and Safety Management System, the agency said.

“The decision follows months of thorough data and safety review demonstrating consistent production quality and reflects the FAA’s confidence in Boeing’s ability to issue airworthiness certificates under FAA oversight,” the FAA said in a July 17 statement.

737 Deliveries, Orders

Boeing generated better-than-expected cash flow in the second quarter on continued strong demand for its aircraft, extending the US manufacturer’s turnaround efforts after years of crises.

The company reported free cash flow of $631 million thanks to higher payments for new aircraft, solidly beating analyst estimates of a $331 million outflow.

Revenue rose 8% to $24.6 billion, and Boeing said it still aims to generate $1 billion to $3 billion in free cash this year.

The planemaker is now building 47 of its 737 Max aircraft each month in the Seattle area, with plans to increase that rate eventually to 63.

Ramping up production is key to repairing its balance sheet and cashing in on an order book worth $715 billion that gained a boost from a slate of commitments at last week’s Farnborough International Airshow.

Boeing announced over 170 firm and preliminary orders at the show and the company’s management said demand remained strong for its aircraft. 

“While we’re making progress on our development programs, you’re never done until you’re done,” Chief Executive Officer Kelly Ortberg told employees in a memo alongside the earnings.

Tyler Durden Tue, 07/28/2026 - 09:22

US Home Prices Unexpectedly Jumped In May; Chicago Leading, Vegas Lagging

Having declined for three straight months, US home prices in America's 20 largest cities was expected to rise very marginally (+0.1% MoM) in May (according to the latest data from S&P Cotality Case-Shiller).

Instead, home prices accelerated 0.3% MoM (better than expected), lifting the annual appreciation to +1.63% YoY - the fastest annual price gain since July 2025...

“Monthly price appreciation continues to reflect the seasonal strength often associated with the spring homebuying season,” Rebecca Kaufman, Associate Director of Commodities at S&P Dow Jones Indice observed.

“On a non-seasonally adjusted (NSA) basis, the National Index rose 0.6% in May from April, while the 10-City and 20-City Composites each advanced 0.9%."

After adjusting for seasonality, the National Index declined 0.05% month over month, while the 10-City and 20-City Composites posted modest gains of 0.3% and 0.2%, respectively.

"The gap between the NSA and seasonally adjusted results underscores the extent to which seasonal factors are supporting headline price growth," added Kaufman.

"Even where prices increased on a seasonally adjusted basis, gains remained modest and were negative in real terms.

The geographic dispersion of home price trends continues to persist.

Kaufman noted that while major metropolitan areas in the Northeast and Midwest recorded year-over-year gains exceeding the national average, many metropolitan areas in the West and Sunbelt regions remain under pressure.

“For the third consecutive month, Chicago led all metros with a 6.9% annual increase in May, followed by New York (4.2%) and Cleveland (3.1%).

In contrast, Las Vegas posted the largest decline, falling 1.9% year over year, with Seattle (-1.8%), Denver (-1.8%), and Tampa (-1.6%) also registering notable losses."

Given the lag in Case-Shiller data, mortgage rates could argue that prices should be starting to rise here...

“Affordability remains a significant headwind for the housing market,” Kaufman concluded.

“Thirty-year mortgage rates increased to 6.5% in May, leaving the ultra-low 3% borrowing costs a distant memory. At the same time, stubbornly high inflation rates are keeping both the cost of home financing and the cost of living high for prospective buyers.

“Against this backdrop, housing demand remains constrained, elevated borrowing costs continue to discourage potential homebuyers, and housing values decline in real terms for existing homeowners.”

But the oddly tight coupling with Fed Reserves suggests the path is lower...

Interestingly, for the 12th consecutive month, inflation outpaced national home price appreciation, with CPI running well above the 1.6% annual gain, extending the streak of negative real home price returns.

Is this Trump's 'affordability' plan kicking in? Or just lagged rates finally impacting reality.

Tyler Durden Tue, 07/28/2026 - 09:13

This Is The Chart That Jensen Huang Does Not Want You To See

In October 2025, while the world and his pet rabbit was buying anything-AI with both hands and feet, we were the first to warn that "AI Is Now A Debt Bubble Too, Quietly Surpassing All Banks To Become The Largest Sector In The Market"...

...as the world began to wake up to the negative free cash flow implications of the unprecedented CapEx spend required to achieve AI-Utopia... and therefore the need to fund that via debt (and equity)...

The poster-child at the time was Oracle, which had seen its stock explode higher on the back of the latest circular-financing deal involving OpenAI and NVDA, "The dissonance between ORCL equity dreamers and credit realists is dramatic to say the least."

With the interconnected web of reacharound deals growing more and more complex... to keep the dream alive.

Following our exposé, several in the mainstream media started picking up on this - including CNBC's David Faber - but as AI stocks reaccelerated off the Iran-ceasefire-dip lows, momentum-chasers dominated any fundamental (real world economics) threat.

But, that reality was still there, getting worse, growing larger, and being recognized by more and more credit market professionals as "an issue", and we continued to document...

• 6/13: Massive AI Debt Issuance Main Driver Behind Jump In Global Credit Impulse

• 6/14: The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle

• 6/15: Nvidia To Raise $20BN In Debt From First Bond Sale Since 2021, As AI Debt Frenzy Goes Parabolic

• 7/07: Amazon Sells Another $25BN Bonds As Goldman Urges Clients To Start Hedging AI Debt Bubble

• 7/14: "Carnage" In The Hyperscaler Bond Market: Did Goldman Just Pop The AI Debt Bubble

• 7/22: "Generational Transfer Is Taking Place": The Cash Crunch Is Coming For AI Hyperscalers

• 7/22: AI's Off-Balance-Sheet Time-Bomb Goes Mainstream: Leverage Might Be Much Worse Than It Looks

And most recently, just this week: "Goldman's One-Delta Desk Weighs 'High Degree Of Policy Reflexivity' Versus Hyperscaler Debt Doubts"

And now even Fitch Ratings is realizing, just 10 months after us, that the real bubble is in AI Debt.

Simply put, as Goldman's Rich Privorotsky noted this week: the cracks around hyperscaler financing continue to widen as the market struggles to find the appropriate clearing price for companies that have historically run under levered balance sheets but now have enormous capital ambitions. 

The last week or so has seen questions about hyperscalers' ability to fund the massive CapEx required to keep the AI dream alive with the explosion in hyperscaler credit risk finally starting to weigh on the stocks of those companies (GOOGL didn't help with no credible visibility on ROI to ease those fears)...

The cost of protecting against default is rising across all the hyperscalers (with ORCL and CRWV most worrisome)...

All of which brings us to Nvidia...

But, it is NVDA's credit risk that has surged by the most on record after reports of the chipmaker being in conversations on hundreds of billions of artificial intelligence infrastructure deals stoked fears about the company’s obligations.

July 24: Nvidia announced a $500 billion partnership with SK Group, the parent company of South Korean chipmaking giant SK Hynix

July 24: Nvidia announced a $1 billion investment in Naver as part of a partnership to help build South Korea's sovereign AI infrastructure.

July 26: The WSJ reported that Nvidia is helping back roughly $250 billion in financing for OpenAI's planned 10-gigawatt AI data center in Ohio

July 26: The WSJ also reported that Nvidia is discussing up to $350 billion in financing to help OpenAI purchase its AI chips

July 27: Nvidia deepened its partnership with Safe Superintelligence, the AI startup founded by former OpenAI chief scientist Ilya Sutskever

The increasingly interconnected web of dependencies between technology manufacturers and AI startups continues to stir unease. The risk of these “circular” deals was highlighted last year here, and although markets forgot all about it, they are now once again freaking out.

For JonesTrading chief strategist Mike O’Rourke, investors can “talk about the compute storage all they want and the fundamental demand, but it is clear that a significant portion of Nvidia’s sales come from an ecosystem that Nvidia is artificially creating.”

The result is that the “only certainty one can have is the high degree of uncertainty in the AI environment,” he said. 

All of which snapped NVDA's 5Y CDS spread up to 82bps (intraday) - almost double what it was a week ago...

The level of borrowing across the AI infrastructure likely requires investment-grade ratings, which are difficult for the likes of OpenAI and Anthropic PBC to currently support given they are rapidly burning cash to grow their businesses.

So, backing from big (better-rated) firms can help debt that funds AI infrastructure spending win high-grade ratings.

“The amount of capex needed to build out the AI infrastructure is massive, and debt markets are being inundated with supply,” said Sal Naro, chief investment officer of Coherence Credit Strategies.

“There’s a fear of financial alchemy driven by opaqueness, off-balance-sheet transactions and intercompany relationships, which could result in credit rating downgrades.”

Credit-market signals are a more relevant short term gauge than EPS valuations for hyperscalers, notes Manish Kabra at Societe Generale.

When there is a peak in CDS spreads, it should signal the market beginning to price in an improvement in hyperscalers’ free cash flow and an end to a derating.

But an inflection in FCF is not expected until the second half of 2027, Kabra adds.

And, like everything, there is a limit to what the market will take before those 'better-rated' companies face the same leverage test that the startups do.

All of which brings us to the chart that we are sure Jensen Huang would not want to see emblazened across trading desks.

One of these things is not like the other.

From the inception of NVDA CDS last November until the end of March (ceasefire lows), the two markets were well-synced, as you would expect...

But since then, the divergence has been dramatic (and NVDA's share price is starting to show it)...

While NVDA's stock is 'off the highs' NVDA's credit risk is signaling something considerably worse and there are big tests ahead this week for Nvidia and the broader AI trade.

Hyperscalers Microsoft, Meta, and Amazon are set to report earnings across a two-day period. Investors will be closely watching their CapEx guidance, having proven sensitive to heavy spending in recent months. (Just ask Alphabet how their capex forecast was received last week.)

Tyler Durden Tue, 07/28/2026 - 08:45

Incompatible With Western Society...?

Authored by Steve Watson via Modernity News,

The comment section under Al Jazeera's Facebook coverage of the Berlin Pride attack has laid bare a reality Western elites still refuse to face.

Hundreds of users with Arab and Muslim names flooded the post with open celebration of the Islamist vehicle-ramming that killed one woman and injured 29 others.

Laughing emojis made up roughly a third of the reactions. Comments praising the attacker with "Alhamdulillah," "Jihad," and "Thank God" stacked up without shame.

The comment section of Al Jazeera on Facebook has become controversial after hundreds of Islamists openly expressed support for the recent car ramming attack against an LGBT parade in Berlin.

Around a third of the reactions to the post are laughing emojis.

Comments from users... pic.twitter.com/j4DAmxj7FC

— Visegrád 24 (@visegrad24) July 27, 2026

The Al Jazeera English Facebook post in question is this one:

There is also an earlier "BREAKING" post about the parade being called off that drew similar reactions:

Laughing emojis made up a conspicuous portion of the reaction totals. These were not isolated trolls. They formed a consistent chorus of approval for the deliberate targeting of people at a Pride event.

The responses also include:

• "Alhamdu lillah"
• "Jihad"
• "Thank God"
• "Good news indeed"
• "god is great"
• "that's good news"
• "why only one?"
• "14 idiots injured"
• "I hope the driver is ok"
• "please make a gofundme for that driver's future"
• "The driver deserves a medal ?"
• "Not all heroes wear capes"
• "9ice work" / "nice work"
• "Salute"

These comments sat in plain view under an official Al Jazeera English post, making the ideological incompatibility impossible for anyone still paying attention to ignore.

This is the predictable product of importing large numbers of people whose core religious and cultural worldview treats homosexuality as an abomination worthy of death.

The same ideology that drove 21-year-old Abdul Ballout - German-born of Lebanese origin - to plow a white van into a crowd near Berlin's Christopher Street Day celebrations on Saturday night, then continue the assault with a blade.

Ballout's history is insane. He had already tried to join Islamic State in 2025, traveling to Lebanon to make contact with the group. He was arrested there, served a short sentence, and was flown back to Germany.

In May 2026 a Berlin juvenile court convicted him of preparing a serious act of violence endangering the state and of publishing Islamic State propaganda. He received a suspended sentence, was ordered into deradicalization counseling he barely attended, and walked free. By the weekend he was driving a rental van into Pride revelers in Tiergarten park.

Holy shit. It gets even crazier.

Abdul Ballout had already planned a terrorist attack once before. He then fled to his homeland Lebanon. Germany brought him back.

Abdul was reportedly scheduled to attend a "deradicalisation course" TOMORROW.

What in the Suicidal Empathy is... pic.twitter.com/4UGFkwNLRa

— ???? ???? ?? ?? (@NiohBerg) July 26, 2026

Police tracked him down the following evening in a Spandau garden allotment. When he charged officers with a sharp instrument they shot him dead. The manhunt was over. The policy failure was not.

BREAKING:

The Lebanese Islamist terrorist Abdul Ballout has been shot and killed by the German police in Berlin moments ago after attacking them with a knife.

He carried out a truck-ramming attack against the Berlin Gay Pride parade yesterday, killing 1 and wounding 29 pic.twitter.com/aC2i4Pj3C3

— Visegrád 24 (@visegrad24) July 26, 2026

Ballout's record was no secret. He had prior convictions for assault and robbery. Prosecutors had sought a longer non-suspended sentence. The justice system released him anyway under the soft logic of juvenile law and "deradicalization."

Germany's police officers' association head Dirk Peglow later called the approach too lax: "With people who pose such a threat, the end of their time in detention must not be the end of state supervision."

This is the logical end point. https://t.co/jaWP8rWZFG

— m o d e r n i t y (@ModernityNews) July 26, 2026

While the blood was still fresh, Berlin Pride organizers issued a statement warning against using the attack "for political ends."

"People are trying to divide our society and set some people against others. As the CSD in Berlin, we will not allow this," they said. A speaker at a related vigil went further, admitting the first thought after hearing of the car attack was "Hopefully it's not a Kanake... hopefully it's a Christian white person." When it turned out otherwise, the response was more intersectionality.

The organisers of Berlin Pride say yesterday's attack must not be used "for political ends". A terrorist attack is the very essence of political ends. What do they want people to do? Sing 'Don't Look Back In Anger' and then forget about it? Enough with the suicidal empathy. https://t.co/Q77z0R5TQA

— m o d e r n i t y (@ModernityNews) July 26, 2026

An Islamist with a documented terrorism history is released, attacks a Pride event, and the institutional left pivots immediately to protect the ideology and the migration system that enabled him.

The same voices that lecture endlessly about "queer safety" suddenly discover that naming the ideology is the real danger. "Queers for Palestine" marched in solidarity with the very ideology that produces these attackers, only for leftists to blame conservatives, GB News, or "whiteness" once the van hit the crowd.

The Al Jazeera comment section simply removed the filter. When the attacker is one of their own, celebration replaces condemnation.

Western societies have spent decades pretending that mass migration from cultures that explicitly reject core liberal freedoms - especially sexual freedom - can be managed with counseling sessions and rainbow flags. The body count and the Facebook reactions say otherwise.

Chancellor Friedrich Merz called the attack "abhorrent" and an assault on openness and freedom. Berlin Mayor Kai Wegner described it as "an attack on our way of life and coexistence." Fine words. They do not change the fact that Ballout was known, convicted, released, and free to act. Nor do they erase the public cheering that followed.

Europe continues to import populations whose stated beliefs and demonstrated behavior are incompatible with the societies that host them.

The results are written in blood on the streets of Berlin and in the laughing emojis under an Al Jazeera post. The refusal to confront that incompatibility is no longer a policy disagreement. It is a death wish.

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

Tyler Durden Tue, 07/28/2026 - 08:05

Korea Barbeque'd: Kospi Crashes As Chip Stocks Tank, AI Token Index Spirals Lower

South Korean stocks plunged on Tuesday as concerns over circular AI financing and China's expanding DUV lithography capabilities (read here) were top of mind among investors. Adding to the pressure, chipmakers may not have found a floor just yet because Silicon Data's LLM Token Expenditure Index continues to slide, suggesting that companies are shifting toward cheaper models, particularly open-source alternatives from China.

Top Overnight News

The Kospi index follows a weak US session lower, falling as much as 10.7% heading for the worst session since early March as both Samsung Electronics and SK Hynix slid more than 12%. Korea Exchange triggered a circuit breaker for the benchmark, marking its…

— zerohedge (@zerohedge) July 28, 2026

The Kospi tumbled nearly 11%, with Samsung Electronics and SK Hynix dropping more than 13% each, prompting the Korea Exchange to temporarily halt both cash and program trading for 20 minutes.

South Korea's main equity index has now lost nearly 34% from its peak one month ago, reversing a rally into a vicious bear market. Concerns over AI profitability, Chinese semiconductor competition, forced deleveraging and evaporating liquidity have accelerated the selloff.

Notably, eight of the Kospi's 14 circuit-breaker halts since the Dot-Com era have occurred this year.

Beyond circular AI financing and China potentially catching up in the chip race, weakening AI demand indicators via Silicon Data's LLM Token Expenditure Index only suggest a bottom for chip stocks has yet to materialize.

London-based UBS analyst Joe Dickinson commented on the chip stock selloff, saying it "drives sharp risk-off moves across global markets."

Dickinson added more color:

The KOSPI is down 11% following a weak US handover, dragging the MSCI APAC down 3%, led largely by semiconductors and supply chain proxies. The move was catalyzed by weakness in ASML following reports that China has begun domestic DUV tool production.

Ha SeokKeun, chief investment officer at Eugene Asset Management, said, "Sentiment toward Korean semiconductor stocks is extremely weak. Broad risk-off sentiment, forced deleveraging, widening hyperscaler CDS spreads, and deteriorating retail investor sentiment are all adding to the selling pressure."

One day the hyperscaler bond meltdown will end, but not yet.... not yet.

Unprecedented carnage in AI IG CDS continues, matched by another 3bps sweep wider (to a new record) in the hyperscaler CDS basket. pic.twitter.com/7xxTsJ7fty

— zerohedge (@zerohedge) July 27, 2026

The selloff is also driven by doubts about whether hyperscalers can justify their massive Capex plans, and the token index continuing to slump lower may only suggest a sustained migration toward lower-cost models (read here) could undermine forecasted demand for computing and threaten the investment boom cycle that fueled gains in Samsung, SK Hynix, TSMC and other chipmakers.

Tyler Durden Tue, 07/28/2026 - 07:45

"Good Things Could Happen"

By Molly Schwartz, cross-asset strategist at Rabobank

President Trump spoke with reporters yesterday aboard Air Force One, saying that the US is “meeting with Iran” and that “good things could happen”—with the “could” doing some heavy lifting. What the “good things” are, or when they “could happen,” is still TBD. The other alternative is that “if they don’t work out, [the US] will go back to very strong military action.” That, of course, is dependent on whether or not these talks are actually happening (or at least happening with the people who matter) which Iran currently denies.

We heard announcements over the weekend that Trump was “pausing” strikes on Iran. But that doesn’t mean that Iran has paused strikes against its neighbors. Indeed, Jordanian and Israeli military forces both claimed to have intercepted drones in Jordanian airspace early yesterday morning, while sources from Saudi Arabia said that they intercepted drones launched by Iran-backed militias operating in Iraqi territory.

Markets, however, were seemingly unmoved. Brent crude oil futures traded sideways around $90/bbl after gapping lower on the open, while US rates were similarly sluggish. However, the US yield curve continues to flatten, now at 22bp down from recent heights of 73bp, seemingly poised to flatten further as short-term inflation and Fed hike expectations rise. Re-escalated tensions last week led to a sharp spike in 2-year breakeven yields, up more than 21bp from July 23, back to 2.16%. Meanwhile, the US OIS curve signals investor expectations of a hike by the September FOMC meeting, and more than two full Fed hikes by March of next year.

Trump is not taking a note from Warsh with regard to his philosophy on limiting communication on monetary policy, also making his stance on interest rates and the Fed very clear yesterday. Predictably, Trump re-emphasized that he thinks “rates should be lowered,” but qualified that “you need a consensus from people,” highlighting that “Warsh is great, but he has a board.” The tone came across as softer than that he used when speaking of Warsh’s predecessor (perhaps giving Warsh some wiggle room to hold rates (or hike?)), but the bar for softer rhetoric in this instance is on the floor.

In his recently published FOMC preview, Talking about hikes, Rabobank’s Philip Marey writes that hikes are not part of his own Fed forecasts. Still, he expects plenty of chatter around them, both in markets and within the FOMC itself. He points to Kevin Warsh’s desire for a “good family fight” and the possibility of dissents in favor of hikes at the upcoming decision.

While Kevin Warsh does technically need a consensus to come to an interest rate decision, the current composition of the FOMC still appears to favor the doves. A look at where members generally sit on Bloomberg’s Hawk-Dove spectrum suggests an even five-to-five split, with the remaining Board members clustered closer to the middle. However, that headline balance overstates the hawks’ practical position. Warsh sits firmly on the dovish side and, as Fed Chair, has additional influence in shaping the policy discussion and building consensus. More importantly, the voting arithmetic is tilted in the same direction: five of the dovish members are voters, while only two of the more hawkish members currently have a vote, with the others either non-voters or alternates. So, unless the hawks can bring centrists with them, the balance of votes is likely to remain firmly with the doves, raising the bar for hikes even further.

That said, hikes are not entirely off the table. While energy prices have fallen by around $10/bbl from last week, a full-scale re-escalation and persistent disruptions to the Strait of Hormuz, and the Bab el-Mandeb Strait, could fuel inflationary pressures in the US. Marey writes that “if inflation expectations become unanchored…we may have to pencil in a hike later this year and push the rate cuts further into the future.”

On the other side of the Atlantic, Brussels is still grappling with the prospect that “cold shoulders” and civil discourse are not always the most effective strategies, not only when dealing with an adversary like Russia, but also when trying to wrangle EU members to make any decision. The EU’s proposed sanctions package against Russia failed to pass last week after Greece refused to sign off unless a carve-out was made to allow Greece to continue to transport Russian LNG.

EU officials were furious. According to the Financial Times, one EU official said that “this approach does not work any more” while another lamented that they “don’t want to hear anyone talk about ‘solidarity’ any more.” Still, as Trump put it, “good things could happen.”

Perhaps that means Greece eventually signs off on the sanctions package; perhaps it means a more durable de-escalation further down the line.

For now, though, markets are left trading the gap between what could happen and what has actually happened.

Tyler Durden Tue, 07/28/2026 - 07:28

Futures Slide As Tech Rout Continues, Kospi Halted As It Crashes 10%

Futures extend Monday's losses as the Tech tape continues to unravel; global Semis were hit yesterday and again overnight (despite the best attempts of Goldman and JPM to force retail to buy the falling knives) with Asian stocks and especially Korea (-10%) bearing the brunt with fears of Chinese competition accelerating the sell-off and then spilling back over into the US. As of 7:00am ET, S&P futures are down 0.2% with tech slammed pushing the Nasdaq 0.9% lower and leaving the index set for a five-day run of losses for only the second time this year. Semis are again lower pre-market led by weakness in Nvidia, Intel and Micron, while Mag7 names are mostly bid and outperforming. While Defensives are leading Cyclicals, there are bids to Discretionary and Financials as both sectors look to outperform. As JPM writes in its Market Intel post this morning (available to pro subs), the market is swept in a risk-off tone (where all the news continues to be sold) that is continuing both the broadening in the US and a rotation ex-US where EU may continue to outperform as investors tilt towards Value; the $64 trillion question remains when do Semis / AI find a bottom. There is some good news as expectations (because they certainly are not taking place) of US, Iran negotiations are reducing commodity prices. As such yields are down 3bps, the USD is flat, and commodities are weaker led by Energy and Precious with Base and Softs the outperformers. Today’s macro data focus is on the weekly ADP print, Housing price indices, Consumer Confidence, Import / Export data, Inventories, and regional Fed activity indicators. 

In premarket trading, chip producers and other AI-related firms are extending their selloff as worries about China’s progress in advanced chipmaking weighs down sentiment. This is also exasperating concerns over the sustainability of the AI spending boom that has propelled the sector in recent years.

• Tesla and Nvidia are underperforming Magnificent 7 stocks during the selloff in chipmakers and AI-linked firms:
• Microsoft +1.1%, Apple +0.6%, Meta Platforms +0.4%, Alphabet +0.1%, Amazon +0.1%, Nvidia -1%, Tesla (TSLA) -1.4%.
• Applied Digital (APLD) gains 2.9% after the digital infrastructure designer reported fourth-quarter revenue to $258.7 million, a 407% increase from a year ago.
• Cadence Design Systems Inc. (CDNS) is up 2.5% after the electronic design automation software company reported second-quarter results that beat expectations and raised its full-year forecast.
• Carrier Global (CARR) jumps 5.1% after the HVAC company boosted its sales forecast for the full year.
• United Parcel Service Inc. (UPS) is up 2.7% after boosting guidance for the year, suggesting the courier is benefiting from strong pricing as it works to shift volume from low-margin e-commerce shipments to more-profitable packages.

In other corporate news Johnson & Johnson agreed to a $5.5 billion commitment to resolve litigation related to claims that its talc products caused ovarian cancer. KKR is said to be exploring options for LS Automotive India including a sale. In deals, Curium is said to be in advanced talks to acquire radiopharma company Lantheus Holdings in a transaction that could value Lantheus at up to $8 billion, including contingent value rights. Stellantis agreed to sell its car-sharing business Free2move to a German private equity firm, part of a plan by the maker of Fiat and Peugeot cars to exit unprofitable businesses and refocus investments on core brands and regions.

While the weeks-long volatility in chipmakers is rumbling on amid fresh concerns over massive debt issuance, debt-funded AI capex spending and rising competition from China, traders are rotating into consumer stocks and other sectors that tend to generate relatively stable revenues regardless of the economic cycle. Lower crude prices also eased inflationary angst, with Brent dropping 3% to below $86 a barrel. The global benchmark is falling for a third straight day as the US and Iran extended their pause in hostilities. Focus will now turn to talks between Tehran and Oman over restarting traffic in the Strait of Hormuz.

“It’s perfectly legitimate for investors to dilute their positions in semiconductors. It’s a good time indeed to take some profits and diversify,” said Vincent Juvyns at ING Groep NV. “That being said, I advise clients to stay invested as visibility is pretty good for the sector.”

There’s more than earnings to consider over the coming days, of course. Citadel Securities’ Frank Flight, the firm’s head of macro strategy, expects the Fed to raise interest rates this week. “The market may once again be underestimating the extent of the hawkish shift at the Fed,” Flight wrote in a note. A hike “would emphatically end the forward guidance era” while underscoring the Fed’s independence, he said.

Meanwhile, the increasingly interconnected web of dependencies between technology manufacturers and AI startups continues to stir unease. The risk of these “circular” deals was highlighted last year here, and although markets forgot all about it, they are now once again freaking out. For JonesTrading chief strategist Mike O’Rourke, investors can “talk about the compute storage all they want and the fundamental demand, but it is clear that a significant portion of Nvidia’s sales come from an ecosystem that Nvidia is artificially creating.” The result is that the “only certainty one can have is the high degree of uncertainty in the AI environment,” he said. 

Credit-market signals are a more relevant short term gauge than EPS valuations for hyperscalers, notes Manish Kabra at Societe Generale. When there is a peak in CDS spreads, it should signal the market begining to price in an improvement in hyperscalers’ free cash flow and an end to a derating. But an inflection in FCF is not expected until the second half of 2027, Kabra adds. 

The gap between single-stock and index volatility is off its highs, but remains close to historical extremes, consistent with very low implied correlation. The combined effect of dispersion and sector rotation beneath the surface have caused individual stock moves to cancel each other out at the index level within the S&P 500.

Elsewhere in markets, corn futures in Chicago rose as government data pointed to the sharpest drop in US crop conditions in three years, potentially reducing supply. The biggest US power grid, PJM Interconnection, is warning that data centers may face involuntary outages under a plan to avert widespread blackouts and protect residential ratepayers from electricity price spikes.

Asia bore the brunt of Tuesday’s selling. The regional benchmark headed for a correction after SK Hynix and Samsung Electronics Co. tumbled more than 13% in Seoul.  The KOSPI tumbled 10%, closing at session lows following another 20 minute marketwide halt, on concern about circular AI financing and new DUV capability from China which may increase memory supply. The macro spillover is continuing. As KOSPI is down over 30% from the peak, Goldman estimates the retail wealth effect to reduce by ~15bp of GDP. Drop in equities also eases financing pressure from leveraged ETF, especially as govt continues to step up control on the product. 

Tech stocks are also slipping in Europe, but that’s being offset by strength in consumer goods and autos stocks, with the Stoxx 600 up 0.4%. European chip giant ASML extended losses for the week to 10% following the emergence of a possible Chinese state-backed rival. Still, advancing stocks in the Stoxx 600 outnumbered decliners by more than two to one even as earnings from Barclays Plc, LVMH and Unilever Plc drew a mixed reaction. The Stoxx 600 benchmark rose 0.4%. 

In FX, the Bloomberg Dollar Spot Index rises 0.1% as investors await the Fed’s decision due later this week.    Interest-rate futures imply roughly a 38% chance of a quarter-point increase on Wednesday. The Fed is likely to leave rates unchanged but renewed tensions in the Middle East and Fed Chairman Kevin Warsh’s decision to hold a press conference “have made it a closer call than anyone would have thought a couple of weeks ago,” wrote Erik Weisman, chief economist and portfolio manager at MFS Investment Management

• JPY retreats slightly against the USD given the recent modest strength in the DXY; USD/JPY remains under the 23rd July peak at 162.42.
• EUR is modestly softer against the USD amid the lack of fresh catalysts. EUR/USD reside towards the bottom end of a 1.1354-1.1380 range at the time of writing.
• GBP has dipped under 1.33 (vs high 1.3305) amid the aforementioned DXY upside with limited UK-specific drivers in the session.

In rates, 10Y TSY yields are down 3bps to 4.62%, down 10bps since July 23 when Brent traded up to $100, with UK gilts slightly outperforming as investors trim their Bank of England rate-hike bets ahead of this week’s meeting. 

In commodities, oil prices slide for a second day, with Brent sitting around $86 having touched $100 last week. That’s buoying bond markets, with yields falling across the US, Europe and the UK.  Gold prices are down, though holding above $4,000/oz, and Bitcoin slipped below $64,000.

Looking the day ahead now, economic data includes US June advance goods trade balance, wholesale inventories, July Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Dallas Fed Services activity, May FHFA house price Index, and France July consumer confidence. We’ll also be getting a large batch of earnings including Visa, Coca-Cola, Boeing, NXP Semiconductors, Teradyne and Ford.

Market Snapshot

Top Overnight News

• The Kospi index follows a weak US session lower, falling as much as 10.7%. Asia’s semiconductor related stocks come under intense selling pressure dragging the MSCI AC Asia Pacific index down over 3%
• The Kospi slumped as much as 10.7%, heading for the worst session since early March as both Samsung Electronics and SK Hynix slid more than 12%. Korea Exchange triggered a circuit breaker for the benchmark, marking its eighth such halt this year
• German officials are working behind the scenes to identify Chinese economic vulnerabilities that they could exploit if the European Union finds itself in a trade war with the world’s second-largest economy
• Australia’s central bank chief said there are signs the economy is cooling as anticipated, though it’s still unclear if this year’s interest-rate hikes are enough to return inflation to target or whether additional tightening will be needed
• China set a ceiling on new US tariffs and warned Washington against sanctioning Chinese artificial intelligence companies, drawing boundaries weeks before the next meeting between President Donald Trump and Chinese leader Xi Jinping
• A selloff in semiconductor stocks deepened Tuesday, as signs of China’s progress in advanced chipmaking weighed on global rivals and concern mounted over the sustainability of the artificial intelligence spending boom
• President Donald Trump said the US and Iran were engaged in diplomatic talks to end the Middle East conflict, but warned the two sides would return to fighting if negotiations didn’t yield a deal
• A nearly $600 billion rout in just a little over a month has flipped SK Hynix Inc. from one of the world’s hottest AI trades to one of the biggest portfolio question marks
• Oil extended a steep decline after President Donald Trump said that the US and Iran were engaged in talks to try to end the Middle East conflict, with the two sides continuing to hold off on attacks
• US Pacific Tsunami Warning Center said the tsunami threat from the Japan earthquake has now passed, with no tsunami threat remaining for Japan's coast.
• Shots fired at US consulate in Toronto for the second time this year, according to the New York Post. 
• US Senate votes to advance Trump nominee Clayton for Director of National Intelligence role.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly negative amid a tech bloodbath and competition concerns following reports that China had started mass production of domestically developed DUV lithography equipment, which had pressured ASML shares and the Nasdaq yesterday. ASX 200 bucked the trend as strength in telecoms and the consumer sectors offset the weakness in miners, materials and resources. Nikkei 225 briefly fell beneath the 62,000 level amid the tech-related losses, with Kioxia heavily pressured. KOSPI triggered a circuit breaker with double-digit declines seen in Samsung Electronics and SK Hynix. Hang Seng and Shanghai Comp were lower but with downside limited in Hong Kong amid the mixed performance among the local tech bluechips, while the mainland was subdued as trade frictions lingered with the US reportedly probing Chinese factories in Vietnam.

Top Asian News

• Japan's Finance Minister Katayama said must communicate with JGB market in run-up to budget compilation, and we hadn't done that. said:. Believes the government's relationship with the BoJ has been smooth. Very good that final version of the Economic Blueprint has won market understanding. Not currently considering JGB buybacks. Global bond markets have been affected by various factors such as US monetary policy, Ukraine and Middle East situations. Weak yen can have both merits and demerits. Won't comment on specific FX levels and won't comment on potential intervention. No change in stance that we're ready to respond on Forex as needed.
• Japanese Finance Minister Katayama said taking price relief measures one after another, also noted that foreign banks' participation in projects under Japan's US investment scheme wipes out concerns about dollar funding.
• 5.0 magnitude earthquake in Qinghai, China, CENC reported. 
• Japan's Nuclear Regulation authority said there are no irregularities at nearby nuclear power plants after earthquake. Includes Ikata, Genkai, Sendai plants.
• Earthquake of prelim 7.1 magnitude hits Japan's Kyushu, NIED reported; issues tsunami warning of 1 metre, NHK reported.

European bourses began the session firmer despite sharp losses in APAC, particularly the KOSPI (-10%). At the time of writing, the Euro Stoxx 50 sees gains capped as ASML continued to weigh following reports China started DUV tool production, with the stock extending losses after Monday’s -8.5% decline. Sectors are mostly in the green, with Optimised Personal Care leading and Energy lagging, the former weighed on by LVMH post earnings. Broader sentiment is supported by optimism around US–Iran talks (see commodities for further details), which weighs on crude and underpins equities. Movers: ASML extends losses (-1.5%) on China DUV concerns. In earnings, LVMH (-1%) reported a revenue beat but softer Fashion & Leather Goods sales, Unilever (+6%) beat and raised guidance, while Mercedes-Benz (+3%) cut revenue guidance but maintained margins. In APAC, SK Hynix and Samsung fell ~12% amid memory concerns linked to CXMT’s listing.

Top European News

• US diplomats walked out of a UN Security Council meeting after France publicly criticised the Trump administration's human rights record.

FX

• DXY was directionless for most of the European morning before picking up in recent trade despite a lack of US-specific catalysts, with markets increasingly viewing the upcoming Fed meeting as potentially “live”. Tightening bets remained around a 30% probability of a 25bps hike, though softer crude limited further upside in the Buck. DXY has been edging higher in recent trade after topping the 1st July peak (101.60) and aims for the 25th June high at 101.75.
• JPY retreats slightly against the USD given the recent modest strength in the DXY; USD/JPY remains under the 23rd July peak at 162.42.
• EUR is modestly softer against the USD amid the lack of fresh catalysts. EUR/USD reside towards the bottom end of a 1.1354-1.1380 range at the time of writing.
• GBP has dipped under 1.33 (vs high 1.3305) amid the aforementioned DXY upside with limited UK-specific drivers in the session.
• Antipodeans underperform, led by AUD, which drifted lower to a 0.6963 base following remarks from RBA Governor Bullock that were viewed as lacking strong forward guidance. NOK also lagged as oil prices declined, with the cross nearing parity (1.001).
• PBoC set USD/CNY mid-point at 6.7928 vs exp. 6.7730 (prev. 6.7911).

Fixed Income

• UST are firmer, gaining around five ticks at best to a 108-24+ peak, just above Monday’s 108-22 high but still shy of last week’s 109-00 and 109-08+ peaks. The move was driven by the pullback in energy amid US–Iran diplomacy, with focus turning to incoming data and a 7yr auction.
• Bunds trade in line with USTs but with slightly greater magnitude, holding around 10 ticks below the 125.21 peak while still posting gains of a similar amount. The upside is supported by softer energy prices, with some caution ahead of the Fed given the ~30% implied probability of a July hike.
• Gilts opened on the front foot and outperform, gapping higher by around 10 ticks before extending to a 87.48 peak, taking out last week’s high. The benchmark then looks towards prior resistance levels at 87.60, 87.72 and 87.82.
• Italy sell EUR 2.5bln vs exp. EUR 2-2.5bln 2.20% 2028 and 0.50% 2028 BTP and EUR 3bln vs exp. EUR 2.5-3bln 2.00% 2037 BTPei. 2.20% 2028: b/c 1.79x (prev. 1.51x) & average yield 2.89% (prev. 2.74%). 0.50% 2028: b/c 1.90x & average yield 2.92%.2.00% 2037 BTPei: b/c 1.4x & real yield 2.04%.
• UK DMO sold GBP 750mln of 0.125% Jan 2028 Gilts via tender: average yield 4.090% (prev. 3.989%); b/c 5.35x (prev. 4.97x).
• Netherlands sold EUR 2.99bln (exp. 2.0-3.0bln) 2.75% 2036 DSL: average yield 3.206% (prev. 3.209%).
• Japan sold JPY 649bln in 10yr, 20yr and 30yr JGBs in enhanced liquidity auction; b/c 2.68 vs. Prev. 2.92. Highest accepted spread +0.004% vs. Prev. +0.020%. Allotment of bids at highest spread 87.6152% vs. Prev. 98.6666%. Australia sold AUD 800mln 4.25% October 2036 bonds, avg. yield 5.0345%, b/c 4.70.

Commodities

• Crude futures are lower as US–Iran diplomacy (at face value) continue to improve sentiment, with Oman’s Hormuz proposal and reports of Iranian “flexibility” weighing on prices. Brent Oct’26 trades towards the bottom of a USD 83.58–85.60/bbl range, while WTI Sep’26 sits near the lower end of USD 80.36–82.43/bbl. Dutch TTF was also softer by almost 2%, finding support around EUR 56/MWh.
• Precious metals are subdued despite lower oil, as geopolitical risk premium unwinds and caution emerges ahead of the FOMC.
• Spot gold trades within a narrow USD 4,034–4,081/oz range, inside Friday’s USD 4,022–4,082/oz band.
• Base metals are on a softer footing, though losses were contained by constructive geopolitics. The complex is weighed on by weak APAC tech sentiment, with 3M LME copper trading within a USD 13,620.00–13,739.83/t range.
• Libya's NOC said it halted production at the El Feel oil field (80-90k BPD) and a partial halt to the Wafa field (20-30k BPD), according to Sky News Arabia & Al Hadath; due to protest action.
• Saudi Aramco is mulling new oil pricing to reflect higher freight costs for cargoes loading from Egypt's Sidi Kerir to Asia.
• QatarEnergy has extended LNG force majeure for European customers.

Trade/Tariffs

• Germany said to be working on mapping China's weaknesses in preparation for potential future trade war, Bloomberg
• reported.
• China said it never deliberately pursues a trade surplus and vows to strengthen industry through global coordination, according to Xinhua.
• US probes Chinese factories in Vietnam, stoking new levy fears.
• US Trade Representative Greer said in Fox News interview new Section 301 tariffs shouldn't cause economic effects we're not already facing, adds tariff rates are comparable to previous tariffs and talks with Mexico are focused on ensuring balanced trade

Central Banks

• Citadel Securities said Fed chair Kevin Warsh could surprise with a rate hike this week, which would bolster his credibility in the inflation fight.
• RBA Governor Bullock said board is ready to hike cash rate further if needed, while key question is if tightening already delivered is enough to slow inflation. said:. Policy works with a lag, meaning the full impact of this year's rate increases has yet to emerge. The strongest contribution monetary policy can make is to preserve low and stable inflation. Further slowing in demand growth will likely be needed to bring inflation lower. Some additional easing in labour market conditions will probably be required. The economy has adjusted gradually and broadly in line with expectations. Monetary policy cannot solve Australia's weak productivity growth. Underlying inflation has developed as expected but remains too high. Businesses continue to report increasing non-labour cost pressures. The housing market has softened more than anticipated. Demand growth is moderating broadly in line with the May baseline forecasts. It remains too early to judge the full economic impact of the recent oil shock. Don't know what the board will decide at next meeting, will depend on whether board thinks policy is restrictive. Will have some difficult decisions to make if board thinks inflation is not coming down.
• Philippine Central Bank Governor said large inflation impact seen in 2027 and 2028, adds peso decline could also cause increase in inflation, also sees small chance for aggressive tightening. said:When the dollar is strong, we limit intervention to maintain order.

Russia-Ukraine

• Russia's Tyumen oil refinery halted operations on July 25 after a drone attack, sources say.
• Finland temporarily closes airspace near Russia amid potential stray drone.
• EU hesitates to target an Irish alumina plant accused of supplying Russia's war industry, amid fear of cutting off supplies critical for European industry, according to FT.
• US President Trump will meet with Ukrainian President Zelensky at 09:30EDT/14:30BST and will meet with Israeli PM
• Netanyahu at 11:30EDT/16:30BST on Tuesday.
• US Senate is expected to start voting on Russia sanctions bill as soon as Tuesday during Ukrainian President Zelensky's visit.

Middle East

• A military source from Sanaa, Yemen reportedly stated that the recent Yemeni operation showed that Saudi Arabia's oil facilities are now on the list of legitimate targets available to Yemen, Tasnim reported.
• Iran has lost c. 230mln/CM of gas production capacity during the US-Iran conflict, JRTV reported.
• Iran demonstrating 'flexibility' over Hormuz Strait operations, sources tell Al Jazeera.
• Oman is said to have presented to Iran a proposal for a joint regional mechanism to manage the Strait of Hormuz with
• "voluntary fees", according to Reuters sources. The source said Iran would not exercise sole control of the Strait.
• Iran's Foreign Minister is said to have held phone called on Strait of Hormuz security with Saudi and Oman officials.
• US-led talks between Israel and Lebanon will take place in Rome on August 4-6, according to a State Department official.
• US official noted significant momentum in Israel-Lebanon peace track. Talks are to focus on redeployment and border issues in Lebanon.
• US officials say that sanctions may damage Iran more than bombing and Trump administration said to focus on economic pressure to force Iran deal, according to Axios.
• Oman's Foreign Minister held called with counterparts from Iran, Saudi Arabia, Qatar, Kuwait and Egypt to discuss efforts to reduce tensions, according to Iran International. Talks focused on pursuing practical, fair and sustainable understandings through political and diplomatic channels, ensuring safe navigation through the Strait of Hormuz, and restoring the uninterrupted flow of trade and global supply chains.
• Iran will maintain special regime for passage of Russian vessels through the Strait of Hormuz, according to TASS.
• Israel conducts artillery attack on eastern Gaza City, according to SNN.
• Hamas delegations is carrying positive positions on the roadmap presented by Gaza representative Mladenov and the
• mediators, provided Israel agrees, Al Jazeera reported citing sources
• Israeli PM Netanyahu reportedly struggled to get on US President Trump's schedule for today, Axios reported, suggesting the Israeli PM's influence is waning.
• Satellite images show that recent Iranian strikes hit Amazon (AMZN) data centres.
• Reports of an Israeli drone airstrike in southern Lebanon, Al Jazeera reported.
• Iranian, Omani, and Saudi Foreign Ministers held a phone call yesterday; notable details light.
• Occurrences of explosions in Saudi Arabia and Jordan, ISNA reported citing sources; six explosions occurred near oil and gas facilities in the Al-Sharqiyah region of Saudi Arabia.
• Reports of widespread drone attacks on eastern Jordan’s desert, Press TV reported.
• Jordanian army said that they shot down a drone that violated Jordanian airspace in the eastern desert.
• Iraqi sources report attack on separatist group's weapons depot in Sulaymaniya, Iraq.
• Report noted that drone and rocket attack in Erbil was near the US consulate.
• More than seven explosions heard in Erbil, northern Iraq with the headquarters of separatists rocked, while US Consulate in Erbil was also reportedly targeted, according to IRIB.
• Explosions reported in Erbil, northern Iraq, with the Khor Mor Gas Field attacked, according to Tasnim and SNN.

US Event Calendar

To the day ahead now, economic data includes US June advance goods trade balance, wholesale inventories, July Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Dallas Fed Services activity, and May FHFA house price Index. We’ll also be getting a large batch of earnings including Visa, Coca-Cola, Boeing, NXP Semiconductors, Teradyne and Ford.

DB's Jim Reid concludes the overnight wrap

Tech concerns have been the dominant driver in Asia this morning as renewed worries over AI investment spending, and competition from cheaper Chinese companies, have triggered another selloff in global semiconductor stocks. The KOSPI (-10.11%) is the worst-performing index, heading for its steepest decline since early March during the onset of the US-Iran conflict with the sharp drop also prompting circuit-breaker measures earlier in the session. The benchmark is being weighed down by major chipmakers, with SK Hynix falling as much as -13% and Samsung Electronics declining around -12%. Additionally, the Nikkei (-4.10%) is also seeing sharp losses, falling to its weakest level since May 22 with Kioxia Holdings down another -18% and now roughly -60% lower from its peak in late June, around the time we discussed its remarkable story in the WOW! pack given it had gone from nowhere to become the largest company in Japan in a few months. A really remarkable story.

This sums up the past 24 hours as markets have been caught between a new sell-off in chipmakers and the positive news that the US-Iran pause from over the weekend would continue as both sides negotiate in talks. This meant that the S&P 500 (+0.02%) and Nasdaq (-0.16%) were little changed yesterday after an initial rally, whilst the Philly Semi Stock Exchange Index (-2.23%) fell further. The equity performance also wasn’t helped by new highs in real yields, though nominal 10yr Treasury yields (-2.8bps) came down as Brent crude fell -8.70% yesterday, in its largest decline since April. It is an additional -2.0% lower this morning, trading at $86.59/bbl, after being at $101 on Friday morning. S&P 500 (-0.22%) and Nasdaq (-0.74%) futures are lower this morning. 

Elsewhere overnight, the CSI 300 (-2.12%) and Shanghai Composite (-0.90%) are also lower but we have seen CXMT Corp.’s blockbuster debut in Shanghai over the last 24 hours. Their shares surged a stunning +466% after the IPO yesterday. The listing has reinforced investor confidence in Beijing’s drive for semiconductor self-sufficiency and has propelled the company to become China’s most valuable firm. It has also helped send shockwaves around the semis world. 

Turning to the Middle East, Trump said in an interview with Axios yesterday that he had paused strikes on Iran whilst negotiations are taking place, although if the talks fail, the US would “go back to very strong military action.” He also suggested in comments to reporters that “there’s a good chance” of a deal, saying repeatedly that talks were progressing. And while Iran’s Foreign Ministry suggested that no formal negotiations were taking place with the US, we saw continued reporting of talks between Iran and Oman on re-opening the Strait of Hormuz. There was also some more concerning news, not least with Houthi attacks on Saudi oil facilities over the weekend. But overall, the focus on talks sent front-month Brent crude -8.70% lower, while 6-month Brent futures were down -3.29% to $79.67/bbl.

The fall in oil prices meant that near-term inflation expectations also declined, with the US 1yr inflation swap down -10.5bps to 1.93%, while the Euro 1yr inflation swap (-18.0bps to 2.42%) fell even more. The decline in breakevens was partially offset by a rise in real yields, with the 2yr real Treasury yield up +7.7bps, while the 10yr real yield rose +1.5bps to 2.45%, its highest since October 2023. Put together, this left nominal yields a few basis points lower on the day, including for 10yr Treasuries (-2.8bps), bunds (-3.8bps), OATs (-4.5bps), and gilts (-2.6bps). 

The Treasury rally was more marginal at the front-end, with pricing of a Fed rate hike as soon as tomorrow stable at 38% yesterday. Staying with the Fed, in a separate interview onboard Air Force One Trump reiterated that interest rates in the US should be lower and that “Warsh’ll do the right thing,” saying “I know what he wants.” Meanwhile for the ECB, we did see a bit more of a pullback in hike expectations, with pricing of further hikes by the December meeting down -1.6bps to 42bps.

After rallying at the open on the retreat in oil prices, US equities whipsawed lower after chip stocks sold off. The catalyst was chip-equipment manufacturer ASML (-8.41%), whose shares fell after the Information reported that a Chinese company had successfully started mass production of deep ultraviolet lithography machines needed to create advanced semiconductors. The news led to a decline across other chip-equipment peers, with the Philly Semi Stock Exchange Index down -2.23% yesterday.  Nvidia (-4.99%) shares also fell after it was revealed that the company was working on AI deals worth more than $750bn, renewing investor worries on circular AI financing.

The broader equity mood music was better, however, with nearly two-thirds of the S&P 500 higher on the day and the small cap Russell 2000 up +0.62%. And in Europe, indices including the DAX (+1.04%), CAC 40 (+0.40%) and FTSE 100 (+0.42%) saw decent gains, although the Stoxx 600 (+0.02%) was dragged down by ASML and other semi companies.

Economic data was light yesterday but we did get Germany’s July IFO business climate release (86.6 vs 86.0) surprise to the upside, driven by the expectations component (86.7 vs 84.8 est), which may reflect the federal government’s recently adopted reform measures.

Finally, the Swiss Franc weakened after Bloomberg reported that the SNB expects to keep its interest rates at 0% until the end of 2027. The Swiss franc fell by about a quarter of a percent against the euro following the story, though its daily decline was a more modest -0.09%. 

To the day ahead now, economic data includes US June advance goods trade balance, wholesale inventories, July Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Dallas Fed Services activity, May FHFA house price Index, and France July consumer confidence. We’ll also be getting a large batch of earnings including Visa, Coca-Cola, Boeing, NXP Semiconductors, Teradyne and Ford.

Tyler Durden Tue, 07/28/2026 - 07:25

Tether's XAUt Gold Token Receives Shariah Certification To Expand Islamic Finance Access

Authored by Nate Kostar via CoinTelegraph.com,

Tether’s gold-backed token XAUt has received Shariah certification from Amanah Advisors, a move that could expand access to the token among Islamic financial institutions and investors seeking Shariah-compliant exposure to physical gold.

The certification found XAUt’s structure complies with key Islamic finance principles, including full backing by physical gold, the absence of interest and leverage, and transparent reserves.

Each XAUt token represents one troy ounce of physical gold stored in Swiss vaults, according to Tether.

The designation gives Tether a clearer pathway to market XAUt to Islamic financial institutions and investors that require Shariah-compliant investment products.

Tether said it expects the certification to support adoption across markets where Islamic finance is widely used, including the Gulf Cooperation Council, South Asia and parts of Africa.

XAUt is one of the largest tokenized gold products in the crypto market. Tether’s latest reserves report showed the token was backed by more than 707,000 troy ounces of physical gold worth over $3.3 billion as of March 31.

According to RWA.xyz data, the token’s onchain asset value has climbed from about $700 million in July 2025 to roughly $2.5 billion.

Tether tokenized gold. Source: RWA.xyz

Shariah-compliant crypto products gain traction

Cryptocurrencies have long divided Islamic scholars, with debates centering on whether digital assets comply with Shariah principles that prohibit excessive uncertainty, speculation and interest. As companies seek to address those concerns, Shariah-compliant digital assets have begun to emerge.

One early example came in 2025, when Bahrain-based AlAbraaj Restaurants Group adopted a Bitcoin (BTC) treasury strategy and said it planned to develop Shariah-compliant financial instruments to broaden access to Bitcoin across the Islamic world.

More recently, in April, Palm Azgar Finance expanded its Shariah-compliant PUSD stablecoin to ADI Chain, targeting the more than $3 trillion Islamic finance market. PUSD became the second stablecoin available on the network, allowing institutions to settle transactions using either a dollar-linked asset or a dirham-denominated token on the same infrastructure.

Meanwhile, Dubai has emerged as a leading crypto hub in the Middle East, continuing to expand its regulated digital asset market. Earlier this month, the emirate’s Virtual Assets Regulatory Authority (VARA) issued its 50th virtual asset service provider license, surpassing the number of licensed crypto firms in Hong Kong and Singapore.

Tyler Durden Tue, 07/28/2026 - 07:20

Powerful Quake Rocks Southern Japan

A powerful 6.8-magnitude earthquake rocked southern Japan on Tuesday afternoon, injuring dozens, sparking fires, and damaging buildings.

The Japan Meteorological Agency has since called off a tsunami alert for the coasts of the Ariake Sea and the Yatsushiro Sea. The quake struck Kyushu Island, in Kumamoto Prefecture, shortly before 4:30 p.m. local time.

NHK footage showed severe damage to the Kyushu Expressway, smoke rising from homes, and a partially collapsed wall at Kumamoto Castle.

熊本 宇城市と氷川町で震度7 被害相次ぐhttps://t.co/fAoIlTGbTd pic.twitter.com/XUUqaauCBg

— NHKニュース (@nhk_news) July 28, 2026

【速報 JUST IN 】【地震】熊本 八代 橋の一部が崩れる 上空からの映像https://t.co/5yeg6MbbQN #nhk_news

— NHKニュース (@nhk_news) July 28, 2026

【地震】熊本 イオンモール熊本で爆発https://t.co/cc3ru0syKJ pic.twitter.com/aI4j4ELEv5

— NHKニュース (@nhk_news) July 28, 2026

イオンモール熊本で爆発音 多数が閉じ込めか けが人もhttps://t.co/cc3ru0syKJ#nhk_video pic.twitter.com/KTraNyJ1mR

— NHKニュース (@nhk_news) July 28, 2026

There were no reported abnormalities at the nearby Sendai Nuclear Power Plant, Cabinet Secretary Minoru Kihara told reporters.

Tyler Durden Tue, 07/28/2026 - 06:55