Zero Hedge

Is This Peak 'Clown World'?

Is This Peak 'Clown World'?

Authored by Steve Watson via Modernity News,

Transport for London has dropped a dog house-shaped "calm space" onto the concourse at Ealing Broadway station and called it progress.

The tiny pod features a bench, noise-dampening acoustics and a "soothing" forest mural. They claim that it is part of an effort to "boost accessibility for neurodivergent travellers under TfL's Equity in Motion strategy," whatever that means.

Massive backlash has ensued, with many questioning this as a priority over train delays, complete lack of air conditioning on many lines, poor cleanliness, broken escalators and an epidemic of fare dodgers costing £190 million a year.

The kennel is part of TFL's 'Equity in Motion' scheme, a 'customer inclusion plan' launched in February 2024 which it claims will make travel "fairer, safer, more inclusive and more accessible."

Mark Evers, who leads customer insight, strategy and experience at TfL, told Ealing.News: "Everyone should be able to travel confidently and independently across London, and we know that busy environments can sometimes pose a barrier and be overwhelming, particularly for our neurodivergent customers."

"These trials will help us understand how we can better support customers who might need to take some time out when using our services," he added.

Jesus wept.

The photograph did more work than the press release. Open sides. Pitched roof. Wood-effect walls. A painted woodland. A single bench. It reads as a child's playhouse parked in a ticket hall.

Darren Johnson, a former London Assembly member, went at the physics of the claim:

Surely the forest mural will counter the tannoy blasts, barrier alarms and the endless chirruping of TikTok reels blasting from phones, right?

There are plenty of more pressing issues:

Do they really think this thing is going to be used as they envisage?

American Citizen, under Milo's joke post, was blunter: "Chances are a migrant will be inside this taking a shit."

To be fair, the house is more cosy looking than those featured in plenty of accommodation ads in London.

When passengers noted that the pod would be almost immediately wrecked or occupied, TfL actually replied, suggesting "We understand the concern. The pod is located close to station staff and within CCTV coverage, and it's included in routine station security and safety checks."

They added, "Any inappropriate behaviour will be managed in line with standard station procedures, and any damage will be addressed as needed. The trial will also help us understand how the space is used in practice."

That sentence is doing a lot of work. "Standard station procedures" is the same toolkit that already coexists with barrier-jumping, vaping in carriages, speakerphone culture and graffiti that TfL has had to throw extra cleaning gangs at.

The Times reported earlier this year that a graffiti surge left parts of the Underground looking, in one MP's phrase, "like 1970s New York," with Bakerloo and Central hit hardest because those lines have so little spare stock that tagged trains stay in service. Bakerloo's 1972 stock is the oldest passenger rolling stock in the country.

CCTV does not stop crime when there is no consequence. People refuse fares, vape on trains and disturb other passengers with impunity.

This is not a quiet branch line. Ealing Broadway is a Zone 3 interchange for the Central line, District line, Elizabeth line and National Rail. At peak times it is a crush of school runs, office traffic and Heathrow-bound crowds.

It is also a known fare-evasion hotspot. BBC reporting from the concourse described officers watching people hurdle barriers, crawl under them and "double gate" behind paying passengers.

TfL has put the network-wide loss at about £190 million a year - 3.5 per cent of fare income - and wants 1.5 per cent by 2030. A later disclosure to Tube Alerter, reported by MyLondon, said the real figure could be as high as £211 million because TfL applies a 10 per cent haircut to avoid "overstating" the loss.

The same station had a passenger trapped and dragged by a train in November 2024. RAIB published its report in March 2026. Temporary barriers went up on platform 4 because of the gap between train and platform. Lifts routinely fail. Step-free access comes and goes. That is the arena into which TfL has now inserted a woodland cubby and a QR code for feelings.

TFL, which cannot keep toilet facilities usable, has discovered the language of trauma for a four-week photo opportunity.

There is no air con on most of the deep Tube. Central, Bakerloo, Jubilee, Victoria, Waterloo & City, Piccadilly and Northern still cook passengers in summer. Only about 192 of 620 Tube trains are air-conditioned. The trains many west Londoners ride every day were built when Ted Heath was in Downing Street.

Sadiq Khan's City Hall has spent years announcing equity frameworks while the basic deal of public transport - you pay, the train comes, the carriage is usable - has got sloppier. Fare evasion doubled on the Tube against pre-pandemic levels. Prosecutions are still well below the old peak. Penalty fares often go unpaid. Staff take the abuse. Paying passengers fund the gap. Then the same organisation asks those passengers to admire a sensory pod.

This is peak clown world.

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Tyler Durden Sun, 09/06/2026 - 07:00

The Real Elites Vs. The Ruling Elites

The Real Elites Vs. The Ruling Elites

Authored by Ryan McMaken via The Mises Institute,

Always and everywhere, political institutions are controlled by elites. It doesn't matter if the regime type is democratic or monarchical. It doesn't matter if there is a written constitution or not. All political institutions - and certainly every sovereign state - are run by a group of elites who control the means of coercion.The myth of "rule by the people" is precisely that: a myth.

But this leaves a big question open: who are the elites? Wilfredo Pareto, that pioneer of Italian elite theory, convincingly suggests that elites are simply those people who are most skilled in their respective fields. Being skilled does not suggest any sort of virtue or beauty, of course, and we cannot assume that any member of the elite will be more moral or refined than any, say, middle-class mechanic.

In the case of political elites, to be "elite" simply means to be the most effective at organizing and commanding political action. This can be done toward both virtuous ends or evil ends. The political elites excel at the gaining and wielding of political power. Nothing more. In hereditary monarchies, for example, the monarch is a monarch because his ancestors were more effective at using violence - and at stealing and killing - than were their competitors. Their descendants are able to remain in the elite through effective political scheming to maintain their positions. In democracies, those who gain and maintain power are effective at deceiving the voting public and at currying favor with the ruling coalitions of various interest groups. They're not "the elite" because they are especially virtuous or well educated. They simply excel at cultivating the knowledge necessary to wield the power of the state against their enemies and against potential rivals.

Economic Elites vs. Political Elites

There is, however, often confusion as to the difference between economic elites and political elites. One could say that economic elites are those who are most skilled at the management of property. Yet, the nature of the economic elites depends largely on what type of regime exists within society. In a society that has a mostly market system, the economic elites are those who are most productive in the free marketplace. These are the people who are skilled at entrepreneurship, sales, logistics, investing, and all other aspects of a freely functioning market. In a mostly free society, the economic elites are free to spend most of their time on their activities in the marketplace, and they are thus rewarded for spending their efforts in improving their own productivity. Moreover, all of society benefits from these sorts of economic elites. This is because rewards in the marketplace stem from delivering more goods and services to more people at a price that a growing number of people can afford.

Things are different in a society where the economy is dominated by the state - and thus by the political elite. In such a society, the economic elites are those who are most skilled at using the power of the state to achieve success in the state-regulated marketplace. In this case, the economic elites are those who are able to partner with the regime to obtain policies that benefit the elites through the manipulation and regulation of the market. These policies include bailouts, state-backed monopolies, and an easy-money-fueled financial system. In this system, the economic elites are able to maintain and enhance their positions and their wealth through effective political action, and by serving the political elites instead of customers in the marketplace.

When this happens, we cannot assume that the economic elites are there because they add value to society. Rather, the economic elites in this latter system are parasitical. They rely on the exploitation of others to maintain their positions and to expand their market share. One of the most dramatic examples of this can be seen in the response to the financial crisis that began in 2008.

Had the marketplace been allowed to function, many large banks and other firms would have been bankrupted, and their property repurposed by other, more efficient owners and managers. Those new owners could have become a new economic elite. But thanks to the intervention of the incumbent political elites, failing firms were saved through the redistribution of wealth from the productive classes to hand-picked, politically connected incumbent firms and owners. Thus, firms like Citicorp and AIG were bailed out, new regulations imposed, and firms like JP Morgan greatly expanded their market share. The Federal Reserve's mass purchasing of mortgage-backed securities rescued a large portion of the financial sector from insolvency. As a result, most of the economic "elite" we find in the financial sector owe their positions to political action rather than any actual skill in the marketplace. Sure, these people are fond of telling themselves that they are rich because "the market" values them so highly. In reality, they are successful because lobbyists have succeeded in propping up their firms and ensuring, through constant monetary inflation, growth in their portfolios.

But this is just one example. In any society where the political elites are prolific spenders, or engage in widespread regulation of the economy, the economy is continually distorted in a way as to favor the politically well connected at the expense of everyone else. For example, the economic "elites" who rely heavily on government contracts - e.g., Elon Musk, Peter Thiel, the founder of Flock Safety, et al - are not in the elite because they are especially productive in a free market. They are in the elite because they are adept at seizing the property of taxpayers through the tax-and-spend mechanism.

Note that in this interventionist system, the real economic elites - the people who would have risen to the top of an actually free economy - are crowded out and kept down by government action that favors certain firms. Who are these would-be elites? We'll never know, and instead we are left with our counterfeit billionaire class which is "elite" only in their skill at exploiting people who do real work in the private sector.

Conclusion

Thus we have a merging of the economic and the political elite. Both types of elites generally rely on some sort of deception to buttress their claims.

The political elite, for example, claim their positions by virtue of some sort of mandate from heaven, or moral virtue, or because they allegedly reflect the "will of the people." These are all lies, of course, but have nonetheless worked to fool and pacify the public for many centuries.

Under a regime of economic interventionism, the economic elites rely on lies as well. They claim they are elites because they are efficient or hard-working, or "serve the customer." These are lies as well since, in the absence of a free - or even mostly free - market, the elites are, in fact, in their positions due to political maneuvering. They are, in effect, merely an extension of the political elite. The more interventionist the regime is, the more this is true.

The real elites have always been those who receive the voluntary and free support of others through the private sector, or through other non-violent means of interaction: through families, religious institutions, and other institutions of the private sector. On the other hand, those who become "elites" through the initiation of violence, and through the looting of others, have always been frauds and imposters.

Tyler Durden Sat, 09/05/2026 - 23:20

Hegseth's Polygraphs Return To Pentagon In 'Major Leak Hunt' Over Iran War

Hegseth's Polygraphs Return To Pentagon In 'Major Leak Hunt' Over Iran War

The polygraphs have returned to the Pentagon, after the Trump administration has been furious over what the president calls 'leaks' by US officials to the press, particularly regarding alleged diminished munitions stocks and missile shortages.

The New York Times reports Saturday that Pentagon investigators have questioned roughly 50 personnel on the Joint Staff whether they had disclosed classified information to journalists.

File image, Anadolu Agency

The publication calls it a "major leak hunt" - with the widespread polygraph tests having taken place in August, and possibly with more rounds to come.

"Between 1,500 and 2,000 officers and officials work for the Joint Staff, which coordinates operations, policy and war plans with combatant commanders around the world," the NY Times notes.

Dozens of other officials, including under US Central Command (CENTCOM), were also polygraph tested earlier this summer.

An avalanche of media reports in August, and from earlier in the summer, have said the US exhausted much of its stock of long-range Tomahawk missiles on the Iran war, along with Patriot and THAAD missile interceptors.

US officials have stated to CBS that no one failed the tests, but it has had a chilling effect, given that sources have also described the scope of the dragnet as "extraordinary". 

All of this seems not only geared toward preventing leaks to the press, but comes amid a climate of perceived 'disloyalty' and dissent against War Secretary Pete Hegseth.

Polygraphs are typically used in the military or intelligence community in cases of suspected foreign espionage or instances of suspicion of handing off classified information. Hegseth has already greatly narrowed his trusted inner-circle.

Pentagon spokesman Sean Parnell has only said that the Department of War "takes all leaks of classified national security information extremely seriously and investigates accordingly."

This isn't the first wave of polygraphs at the Pentagon under Trump. Hegseth had previewed these actions all the way back in Fall 2025. There's also been widespread signings of NDAs.

While there already exist laws and policies covering unauthorized disclosure of classified, restricted, or sensitive information, this is clearly part of a broader push to tighten up leaks.

The reality too is that leaks to the media are a fairly standard part of any administration, going back through American history. Trump likely knows this, but is naturally leery of any further efforts to undermine his policies - especially in this sensitive moment ahead of the November midterm elections.

Tyler Durden Sat, 09/05/2026 - 22:45

China Expands Online Content Controls, Putting More Pressure On Creators

China Expands Online Content Controls, Putting More Pressure On Creators

Authored by Michael Zhuang via The Epoch Times,

China's new rules governing companies that produce and distribute content for social media took effect on Sept. 1, potentially exposing both independent content creators and the accounts they manage to penalties for violations.

Men play games on computers in an internet bar in Beijing on Dec. 16, 2015. Greg Baker/AFP via Getty Images

The regulations require companies providing services such as content planning, production, distribution, marketing, promotion, and talent management to register as service providers.

Critics and independent content creators told The Epoch Times that the rules could broaden the communist regime's control over online content, particularly information about sensitive social issues such as unemployment, unpaid wages, unfinished housing projects, and protests.

They spoke on condition of anonymity out of fear of reprisal.

Under the new rules, companies already registered to provide such services have 30 days from the regulations' effective date to amend their business registrations.

Companies involved in online performance management, publishing, audiovisual services, or internet news services must also obtain the relevant licenses.

The rules require covered companies to appoint a person responsible for content management and establish a management team, as well as procedures governing employees and emergency responses.

When signing contracts with online creators, companies must verify their identities and clearly define their management responsibilities.

Platforms can also impose measures on both the companies and the content creators they have contracted with when alleged violations of laws, regulations, platform rules, or contractual agreements occur.

Those measures can include restricting account functions, suspending monetization, or shutting down accounts.

Risks to Online Creators

For people working in China as independent content creators, the new requirements have raised concerns about both income and uncertainty over what content is permissible.

A content creator in Shenyang, China, told The Epoch Times that the rules could directly affect the livelihoods of people who depend on online traffic for income.

"Many people doing livestreams don't know what they can say and what they can't say. Once the traffic gets high, the risks come with it," she said.

The content creator explained that she has seen other creators have their accounts blocked after their livestreams began attracting substantial audiences.

She also questioned how regime authorities and platforms would determine what constitutes prohibited content.

"What does it mean to incite emotions, and what does it mean to make false propaganda? Who decides? There is no clear standard," she said.

The regulations are formally framed as a system for managing businesses involved in the distribution and operation of online content.

However, critics say the requirements could extend beyond large multi-channel networks (MCNs), and apply to smaller operations that may not previously have considered themselves part of the industry.

A Chinese online commentator told The Epoch Times that the rules could encompass small studios, account-management teams, and small livestreaming accounts.

"In the past, many small studios simply helped people obtain advertising, edit videos, and do promotions. They didn't consider themselves MCNs," the commentator said.

"This time, the regulations are very broad. As long as you participate in producing content for online accounts, or help distribute it, you could be required to register and file records, and you would have to assume them as a condition for operating."

In his view, the system shifts part of the regime's censorship responsibilities onto platforms and content-operations companies. Rather than directly intervening in every piece of content, the regime can require companies and platforms to police the accounts under their control.

Concerns Over Reporting on Social Issues

The potential impact could be particularly significant for creators who cover social and economic problems in China.

An independent content creator in Harbin, China, who focuses on analyzing social issues and asked to be identified only by his surname Li, told The Epoch Times that he regularly follows issues including gig employment, difficulties facing restaurants and other businesses, unfinished housing projects, and problems withdrawing money from banks.

Such topics, he said, could potentially be interpreted by platforms as negative information or as an attempt to exploit social issues for attention.

"If influencers continuously follow these things, the network regulators may think you are hyping up a social incident, seeking attention, and making money from traffic," Li said.

"I can only speculate this way. The regime has not clearly stated the standards."

Although Li primarily analyzes information from the perspective of a reader, rather than reporting firsthand on every incident, he said he remains concerned about the restrictions.

"Some content is not false; it's just different from what the official releases say," he said. "Creators are afraid of losing their accounts or income, so they may simply give up publishing. This is self-censorship."

Li said the result could be that social events increasingly have only the version of events permitted by regime authorities.

Once creators face the possibility of having their accounts closed, losing their ability to earn money, or effectively losing their livelihoods, he said, they may choose not to publish information even when they believe it to be accurate.

The regulations impose penalties for violations under existing laws and regulations. Where no specific penalty is provided, the regime can issue warnings and impose fines ranging from 10,000 yuan ($1,490) to 200,000 yuan ($29,800).

For creators and critics, however, the greater concern may be the effect of the rules before any formal penalty is imposed.

If platforms and companies are held responsible for the content produced by the accounts they manage, they have an incentive to remove material that could attract regulatory scrutiny.

That could leave creators increasingly reluctant to report on sensitive social issues, not necessarily because the information is false, but because the potential loss of an account, audience, or income may make publishing it too risky.

Xiao Bin contributed to this report.

Tyler Durden Sat, 09/05/2026 - 22:10

New Images Reveal China's Stealth Drone At Secretive "Area 51" Base

New Images Reveal China's Stealth Drone At Secretive "Area 51" Base

Aviation researcher Andreas Rupprecht posted footage on LinkedIn that appears to show China’s next-generation high-altitude intelligence, surveillance and reconnaissance drone, an aircraft he estimates is “comparable in size to the US Air Force’s B-21 Raider.”

Rupprecht wrote on LinkedIn that the WZ-X drone was spotted at a secretive air base in China’s Xinjiang region, known to some as China’s version of Area 51:

Two new images of the PLAAF’s latest and largest intercontinental HALE ISR #UAV, provisionally referred to simply as the #WZ-X, have been leaked, apparently showing the aircraft somewhere in Xinjiang. The UAV was first spotted on satellite imagery in May 2025 at the PLAAF’s UAV test centre at Malan Air Base in the Xinjiang Uygur Autonomous Region of northwestern China.

Rupprecht continued:

In recent years, Malan/Uxxaktal (ZWML) has developed into the PLAAF’s main test centre for trialling UAVs and UCAVs of all types, while also serving as the base of the 178th UAV Brigade. Satellite imagery from 2022 onwards shows extensive expansion of the base’s infrastructure, including new hangars, taxiways and facilities likely linked to the previously unknown, very large flying-wing UAVs WZ-X and the similarly mysterious UCAV GJ-X, both of which are roughly comparable in size to the B-21 Raider. As such, the base, much like the second secret air base at Lop Nur, which is likely focused more on manned systems such as the J-36, J-XDS and, eventually, the H-20, is often compared to the US Area 51 because of its remote location and its role in testing next-generation weapon systems.

Based on the few, often blurry, images available, the WZ-X appears to be a twin-engined flying-wing design similar in configuration to the US RQ-180, but considerably larger. Rough estimates suggest a wingspan of about 52 m and a length of roughly 14 m. Its two engines, of unknown type, are reportedly fed by a central top-mounted intake, allegedly covered by a conformal mesh to reduce radar cross-section. Apart from its very wide span, the design appears to feature a relatively spacious central fuselage section and a dorsal SATCOM antenna. Its range is estimated at more than 20,000 km, with a normal cruising altitude of 18-20 km and a cruising speed of Mach 0.5-0.65. As for the manufacturer, some sources claim it was developed by Nantong University (NTU), located in Nantong, Jiangsu province.

The WZ-X could help Beijing locate warships, map air defenses and relay targeting information to China’s massive arsenal of long-range missiles, as well as hypersonic weapons, in the event of a conflict over Taiwan

Last week, a new report from Taiwan’s leading English-language daily newspaper, the Taipei Times, revealed that China had deployed a record 244 coast guard, research and other government vessels around the island.

Technical details about the WZ-X remain scarce, and claims about its capabilities remain unverified. However, the expanding infrastructure at Malan and repeated sightings suggest that the aircraft is undergoing flight testing.

Tyler Durden Sat, 09/05/2026 - 21:35

US Sanctions Turkish Bank Over Alleged IRGC Transfers In Latest Action

US Sanctions Turkish Bank Over Alleged IRGC Transfers In Latest Action

Via The Cradle

The US Treasury announced sanctions on Friday on a Turkey-based bank and two of its subsidiaries, accusing them of moving tens of millions of dollars on behalf of Iran's Islamic Revolutionary Guard Corps (IRGC) Quds Force and facilitating Tehran's movement of funds across the international banking system. 

“"Financial institutions continue to find out the hard way that we are serious about Operation Economic Outcast," US Treasury Secretary Scott Bessent said. "We know who you are, we know where you are, and we will continue to take action together with our allies and partners until we have buried the head of the Iranian snake."

The Office of Foreign Assets Control (OFAC) named Golden Global Yatirim Bankasi Anonim Sirketi, alongside its two Istanbul-based units, Golden Global Varlik Kiralama Anonim Sirketi and Golden Global Portfoy Yonetimi Anonim Sirketi.

OFAC alleges the bank was created to help Iranian oil revenues reach Turkey from China, where exchangers converted the funds into cash and gold, and accuses it of opening correspondent banking to Iranian institutions through accounts under Quds Force control. 

The sanctions come as part of Washington's Operation Economic Outcast, a campaign to economically asphyxiate Iran by cutting off its remaining revenue and severing the channels it uses to move money abroad. 

Bessent told Reuters on August 30 that fresh secondary sanctions would follow every week, with banks first in line. He said the Treasury was telling lenders it was not acceptable to hold Iranian money or assist the government in Tehran, and indicated the next escalation could mean severing an institution from the dollar system altogether.

Days earlier, the Treasury barred the UAE branches of Egypt's Banque Misr from dollar access over alleged Iranian links. 

Speaking ahead of the G20 finance meeting in Asheville, North Carolina, Bessent threatened ministers and central bank governors to break their economic ties with Iran or face secondary sanctions of their own, warning that no leakage would be tolerated.

The sanctions come as part of Washington’s "Economic D-Day," an economic strangulation campaign launched after Washington failed to achieve its military objectives against Iran. 

"In the Second World War, D-Day marked the historic beginning of a campaign with our allies to target and drive the enemy from its positions, including those in third countries.  Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone," Bessent had said.

"President Trump has taken action that his predecessors have long deferred. Under his leadership, America is no longer managing the Iranian threat. We are ending it. Those who stand with the United States will reap the rewards of our partnership. Those who tether themselves to Tehran should expect to share in the isolation of a withering regime," he had also said.

Tyler Durden Sat, 09/05/2026 - 21:00

Meanwhile In Ceuta...

Meanwhile In Ceuta...

Authored by Steve Watson via Modernity News,

Viral footage out of the invaded Spanish enclave of Ceuta shows a bottlenose dolphin calf came in close to the sand at Playa del Trampolín in Ceuta this week, disoriented and still alive. A group of men who entered illegally in the July surge pulled it from the water, hoisted it like a prize, and - according to local reporting, a conservation complaint, and Telecinco - one of them bludgeoned it in the head with a stick.

An Ecoservicios worker in high-vis tried to stop the handling. Voices on the clip can be heard shouting "No! No! You can't eat it! It's a dolphin!" The animal was killed. Some of the men then moved off toward the breakwater with the body.

The conservation group DAUBMA took photographs, clips and social-media stills to the Guardia Civil and asked for animal-cruelty and protected-fauna charges. Alvise Pérez's Se Acabó la Fiesta filed at Ceuta's court on the same facts. A petition by Nadia García Gómez put it in writing: the calf was "brutally pulled from the water... handled as if it were an object and violently struck on the head."

Spanish citizens must now share their city with savages who treat a dolphin like a piñata.

They likely have a lower IQ than the animal they pulled out of the sea and bludgeoned. They are predatory scum acting solely on chemical instinct, completely lacking in empathy, judgement or respect for anything other than their own worthless existence.

El Trampolín is not a postcard cove anymore. It is the same strip that has held thousands of arrivals since late July, when more than 70,000 people crossed from Morocco into a city of roughly 84,000.

Madrid still talks as if most of them "went home," yet the reality is that reed shacks, rotting food and human waste have sat on that shoreline for weeks. The calf swam into that hell and couldn't escape.

One of the men in the circle was filming the spectacle on what looks like an iPhone 17 Pro Max. The "destitute asylum seeker" kit keeps getting more expensive.

DAUBMA says the calf reached the shallows alive, was dragged out, was struck, and shows a bleeding wound under one eye while people on the tape try to wipe the blood. It called the case "extrema gravedad ambiental" and asked the environmental prosecutor to take it. Bottlenose dolphins are protected under Spanish and EU law.

A day earlier the animal-rights party PACMA shared a clip showing a migrant in Ceuta immobilising a park goose, bagging it, legs bound, a fish already in hand. A bystander intervened and the bird was dropped. The man left the scene.

PACMA issued a statement condemning "any act of violence, capture or manipulation of an animal, regardless of who commits it, their nationality, origin or administrative situation," while adding that there is "not enough information to affirm that the incidents with animals were motivated by hunger."

As we highlighted in mid-August carers who feed Ceuta's street-cat colonies said sites by the desalination plant and in Huerta Téllez, Carmelitas, Príncipe, Sidi Embarek and Punta Blanca had emptied after the migrant camps spread over the same ground. Volunteers described dead cats found cut or missing half a body, and pigeons and gulls half-eaten near the settlements.

Conservative influencer Eva Vlaardingerbroek points out that while everyone is rightly disgusted over the dolphin incident, European children are being raped and killed by migrants relentlessly, and it's beginning to become little more than background noise.

"It took a dolphin calf," she wrote. "That says something about the way our society views the value of human children." She also pointed to the Lindsay Clancy case in the United States - a mother who strangled her three children and was immediately wrapped in feminist excuse-making. Murder a dolphin instead, Vlaardingerbroek noted, and that chorus disappears.

The situation in Ceuta remains dire. Playgrounds that used to hold Spanish children are smeared with excrement. Beaches that held families have become open latrines. Mothers cannot let their daughters outside without a male escort.

Ceuta's chief prosecutor, Silvia Rojas, told Spanish media that 23 sexual assaults - nine of them against children - had been recorded since the late-July surge, almost one case a day. Police unions speak of women and girls clinging to vans near the CETI because stepping away results in assault, and being dragged into the hills.

Locals have had enough. In late August residents tore beach camps apart, threw gear into the sea and chanted that if the men would not leave, Ceuta would throw them out. Police put a cordon between Spaniards and the shacks and used rubber bullets on the people who live there.

The revolt did not stay inside the enclave. Marches spread across the peninsula.

Sánchez went to Congress and called it "absurd to think that the government knew and did nothing." He boasted of returns "within 72 hours" and a €309 million emergency package. Foreign Minister José Manuel Albares has claimed "practically the entirety" of those who entered have gone back to Morocco.

Video from El Trampolín a month later still shows tents, wrecked shoreline and a city that looks sacked. Tent camps billed for 1,500 cannot accomodate 5,000 to 10,000 people.

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 Sat, 09/05/2026 - 20:11

DHS Seeks Faster Dismissal Of Some Asylum Claims

DHS Seeks Faster Dismissal Of Some Asylum Claims

Authored by Timothy Frudd via The Epoch Times,

The Department of Homeland Security (DHS) is seeking to move quickly to dismiss more asylum cases found legally insufficient.

The U.S. Immigration and Customs Enforcement at the Department of Homeland Security in Washington on Feb. 17, 2026.(Madalina Kilroy/The Epoch Times) (The U.S. Immigration and Customs Enforcement at the Department of Homeland Security in Washington on

"If an asylum claim is facially deficient, you don't need an evidentiary hearing. We are done wasting time and government resources indulging sham asylum claims." DHS general counsel James Percival wrote in an X statement on Sept. 3.

Evidentiary hearings, also known as merits hearings, allow asylum applicants and DHS officials to present evidence regarding asylum claims. They also give immigration judges an opportunity to hear arguments from both sides and review the evidence submitted.

The department's push to expedite the dismissal of asylum claims deemed legally insufficient follows multiple actions by the Trump administration to crack down on asylum fraud.

In his social media post on Thursday, Percival shared a Fox News report that U.S. Immigration and Customs Enforcement's (ICE's) Office of the Principal Legal Advisor's attorneys had been instructed by DHS to seek the dismissal of legally insufficient asylum applications.

The attorneys were instructed by DHS to file motions to pretermit in immigration court, according to the report. Pretermit motions formally request that immigration judges deny asylum applications prior to full merits hearings.

Asked about the new guidance, a DHS spokesperson told The Epoch Times that a pending asylum application did not "confer legal status" in the United States.

"America's asylum system was never intended to be used as a de facto amnesty program or a catch-all, get-out-of-deportation-free card," the spokesperson said in an emailed statement on Sept. 3.

President Donald Trump and DHS Secretary Markwayne Mullin have reversed the previous administration's "catch and release" border policy. The policy allowed many illegal immigrants to be released into the United States instead of detaining them until their immigration cases were resolved.

"All illegal aliens receive due process. We are applying the law as written by Congress," the DHS spokesperson said.

The Epoch Times reached out to ICE about the new guidance but did not hear back before publication time.

Administration's Broader Asylum Measures

The department's U.S. Citizenship and Immigration Services (USCIS) previously announced an interim rule change in late July to expedite asylum applications.

The interim rule change allows USCIS to refer asylum applications to immigration judges without interviewing asylum applicants in advance. The change was implemented to reduce the backlog of asylum applications.

When the asylum application rule change was announced in July, Percival said it would improve efficiency and fulfill Trump's immigration mandate.

"One of the greatest barriers to effective immigration enforcement is intentional delay by illegal aliens and the open borders attorneys who represent them," he said.

In May, DHS directed ICE to crack down on fraudulent asylum claims by taking action against attorneys who file false asylum claims in immigration court.

On Sept. 3, the spokesperson added that the department has worked for months to recruit new immigration judges who will "ensure the rule of law and restore integrity" to the immigration system in the United States.

The DHS directive came after Trump issued a presidential memorandum in March in response to what he described as "rampant fraud and meritless claims" in America's immigration system. The memorandum called for lawyers and law firms to be held accountable for misconduct.

Homeland Security Investigations later announced in July that it was seeking to impose a fine of more than $470,000 against an immigration attorney who allegedly filed false asylum claims for clients.

Trump's memorandum was criticized by the American Immigration Lawyers Association (AILA) as a "chilling directive" targeting immigration attorneys, law firms, and the immigration bar.

"It seeks to delegitimize the work of resolute professionals who ensure that immigrants - many of whom are fleeing persecution and are contributing to their new communities - have access to fair legal representation," AILA President Kelli Stump said at the time.

Tyler Durden Sat, 09/05/2026 - 19:50

COSCO Denies US Claims Its Container Ships Serve As Beijing's Global Spy Network

COSCO Denies US Claims Its Container Ships Serve As Beijing's Global Spy Network

China's state-owned shipping giant COSCO rejected a report published last week alleging that the company had concealed advanced surveillance equipment aboard its cargo ships to monitor US military communications near the coastlines of target nations, including the US.

Reuters quoted COSCO on Friday as calling the allegations "totally unfounded" and false.

What Reuters reported on Tuesday:

The officials, who spoke on condition of anonymity to discuss the U.S. assessment of the Chinese program, said COSCO has a decades-long intelligence-collection partnership with Beijing. The arrangement allows China to collect communication signals from vessels and aircraft operating across Europe, North America and Asia, they said.

The advanced equipment aboard the ships is intended to enable China to gather information about "military communications technologies and encryption developments," one of the officials said.

The world's fourth-largest container carrier also told the outlet:

COSCO SHIPPING has always adhered to market‑oriented operations and compliance practices across all our global businesses

All communication, navigation, safety and operational equipment installed on our vessels is used solely for legitimate ‌commercial ⁠purposes, including navigation safety, ship-to-shore communications and emergency response. 

The allegations surface just weeks before Chinese President Xi Jinping's expected Sept. 24 visit to Washington for talks with President Trump.

If substantiated, COSCO's alleged use as a signals intelligence operations would fit a broader pattern of Chinese gray-zone activity in which commercial infrastructure and civilian technologies are leveraged to advance state objectives.

Dr. Ryan Clarke of the CCP BioThreats Initiative wrote in a book last year that Beijing's strategy increasingly combines next-generation weapons with irregular and nonkinetic tools, including synthetic narcotics such as fentanyl and cannabinoids, what he characterized as biological weapons involving COVID-19, psychological influence through platforms such as TikTok, and other instruments of unconventional warfare.

Tyler Durden Sat, 09/05/2026 - 19:15

Citadel Eyes US Shale As Oil Trading Moves Closer To The Wellhead

Citadel Eyes US Shale As Oil Trading Moves Closer To The Wellhead

Authored by Julianne Geiger via OilPrice.com,

Citadel is shopping for U.S. oil production assets, including a previous bid for WildFire Energy before Magnolia Oil & Gas agreed to buy the Eagle Ford producer for $4.06 billion.

Reuters reported Friday that the hedge fund and commodities trader has held talks with several private-equity owners of oil-weighted exploration and production companies in recent weeks.

WildFire would have given Citadel roughly 53,000 barrels of oil equivalent per day of production, about 70% of it oil, plus 810,000 net acres in South Texas. Magnolia ultimately won the auction in July.

Citadel already trades oil, natural gas, power, and other commodities. It also already owns natural gas production. The firm bought Paloma Natural Gas from EnCap Investments in 2025, renamed it Apex Natural Gas, and added more assets from Comstock Resources and Azul Resources.

Oil would give Citadel another physical position behind its commodities trading business.

U.S. shale has become particularly attractive this year because its barrels do not need the Strait of Hormuz, Bab el-Mandeb or another overseas chokepoint to reach Gulf Coast refineries and export terminals. Middle East disruptions have kept crude prices elevated and pushed U.S. producers to some of their strongest earnings in years.

That geography is something Citadel founder Ken Griffin was already worried about months ago. In April, Griffin warned that a six-to-12-month Hormuz closure would push the global economy into recession. His concern was straightforward: sustained oil shortages would raise energy costs, inflation and transportation costs across the global economy.

Owning U.S. production gives a commodities firm direct exposure to the barrels that become more valuable when overseas supply gets disrupted.

Citadel would hardly be alone. Vitol built and later sold its VTX Energy Partners shale business. Gunvor has been pursuing more than $1 billion of Haynesville gas assets.

Private-equity-backed shale producers have traditionally been sold to larger drillers looking for acreage and scale. Citadel's interest adds another class of buyer: firms that already make money trading the price of oil and increasingly want ownership of the oil itself.

Tyler Durden Sat, 09/05/2026 - 17:30

DeepSeek's 160,000 Huawei Order Is A Real Threat To Nvidia In 2027

DeepSeek's 160,000 Huawei Order Is A Real Threat To Nvidia In 2027

Roughly 350 kilometers northwest of Beijing, in the city of Ulanqab, DeepSeek is constructing a data center measured in gigawatts. Running at full capacity, the site would draw enough power to supply 750,000 homes. On Friday, Bloomberg reported that DeepSeek intends to fill a portion of this massive footprint with at least 160,000 of Huawei's newest AI processors, the Ascend 950DT. Once operational, it will stand as the largest known cluster of Chinese-made AI silicon in the world.

Yet, Huawei's processors have a notoriously poor track record when it comes to the heavy lifting of training AI models - a limitation DeepSeek experienced firsthand with the previous chip generation. Instead of building models from scratch, the Huawei chips will be relegated to inference: running DeepSeek's finished models to generate answers for end users. That is not the consolation for Nvidia it sounds like. Inference is the larger pool of compute, the faster-growing one, and increasingly the one that pays - and Huawei has just taken the biggest inference order in China.

What The Chips Won't Do

Every AI model leads a double life. The first phase is training: a grueling, months-long process where tens of thousands of chips work in perfect synchronization, digesting vast swaths of the internet to learn how to predict the next word. The second phase is inference, which encompasses everything that follows - answering chatbot queries, writing code, or summarizing documents. Training determines who holds the technological crown, but inference drives the sheer volume of compute and, increasingly, the revenue.

When Huawei laid out its roadmap last September, it positioned the 950DT as a dual-threat capable of both training and inference. However, Bloomberg's sources indicate DeepSeek has zero intention of using it to train. Last year, buckling under pressure from Chinese authorities to adopt domestic hardware, DeepSeek spent months attempting to train its R2 model on older Ascend chips with on-site Huawei engineers. According to the Financial Times, the effort failed to yield a single successful training run. DeepSeek ultimately reverted to Nvidia for training, keeping Huawei strictly for inference. A year later, and a full hardware generation newer, Friday's report confirms that division of labor remains intact.

This means China's premier domestic chip has successfully captured the inference market, but remains locked out of the training arena. Ironically, this is precisely the boundary U.S. export controls were designed to enforce. Four years of restrictions were intended to block China from training frontier models; Washington never actually set out to prevent them from running finished ones.

What Nvidia keeps in China, meanwhile, barely counts. Its remaining Chinese training demand is fueled by rented overseas compute and alleged smuggling routes, and neither pipeline shows up on Nvidia's balance sheet as legitimate Chinese revenue. The segment Huawei has taken is the one that books.

Huawei Can't Fill It

One issue - Huawei simply cannot manufacture these chips fast enough. According to Bloomberg, severe shortages of top-tier memory will bottleneck 950DT production to the low hundreds of thousands this year. Huawei is actively juggling DeepSeek's massive order against other domestic clients and a fledgling export initiative, meaning it could take well over a year just to fulfill this single contract. DeepSeek has even petitioned Beijing to pressure Huawei into accelerating deliveries.

The root of this bottleneck lies in a component often overlooked in AI coverage. An AI accelerator is only as fast as the high-bandwidth memory (HBM) stacked alongside it. The companies that matter here are South Korea's SK Hynix and Samsung, and the U.S.'s Micron. When Washington severed China's access to advanced HBM in December 2024, Huawei had to pivot to developing its own. The 950 series is the first Ascend generation to feature this in-house memory, and Bloomberg's sources confirm it is exactly what is crippling output.

China's national champion is having its flagship chip rationed by the state, while the nation's most prominent AI lab waits in line begging for a larger allocation. To put this in perspective, Bloomberg reported last year that Huawei's entire 2026 production target is roughly 1.6 million Ascend dies - enough for about 600,000 of the older 910C chips and a scattered mix of newer silicon. Furthermore, the 950DT is generally considered to be on par with Nvidia's Hopper generation (the H100s that fueled the 2023 AI boom). By the time DeepSeek's cluster is fully operational in late 2027, more than a year from now, Nvidia will be two full generations ahead in training - a race Huawei is no longer running.

A Fraction Of The Site

The bigger open question is scale. Bloomberg emphasizes that 160,000 950DTs will constitute "only one chunk" of the gigawatt-scale facility in Ulanqab. What will occupy the rest of the site remains a mystery.

When Elon Musk's xAI activated its initial 100,000 Nvidia H100s in Memphis in 2024, the cluster required roughly 150 megawatts of power. Applying that ratio to 160,000 Hopper-class Huawei chips yields a footprint of about 250 megawatts - roughly a quarter of DeepSeek's planned gigawatt, or perhaps a third if the 950DT proves more power-hungry than Nvidia's hardware (a metric Huawei keeps under wraps). Regardless of the exact math, the vast majority of the gigawatt site is unaccounted for.

Washington has its own theory regarding the missing hardware. In February, a senior Trump administration official claimed that DeepSeek trained its latest model on Nvidia's Blackwell chips - current-generation hardware strictly banned from entering China - and suggested these chips are likely housed at the Inner Mongolia facility. "We're not shipping Blackwells to China," the official stated, though they declined to elaborate on how DeepSeek procured them. DeepSeek did not respond to Reuters' requests for comment at the time. While Washington has repeatedly accused both DeepSeek and Moonshot of relying on smuggled Nvidia silicon, Bloomberg notes it hasn't independently verified these claims.

The Huawei order is the narrative Beijing wants public, while the Blackwell smuggling allegation is the narrative Washington wants public - and neither explains the true scale of the Ulanqab facility. 

Beijing Is The One Saying No

In December, the Trump administration cleared Nvidia to sell its H200 chips - the crown jewel of the Hopper generation - to vetted Chinese buyers, provided the U.S. Treasury received a 25 percent cut. The Commerce Department formalized this rule in January, and Bloomberg reports the administration was ready to authorize the export of up to a million chips. Beijing has approved a fraction of that volume.

Given the options, Chinese tech giants still prefer Nvidia. Both Alibaba and Tencent placed massive orders the moment U.S. restrictions relaxed, and Chinese firms continue to rent top-tier Nvidia compute by the hour from unregulated overseas data centers. The true blockade is being orchestrated in Beijing - as the Chinese government is aggressively weaning its domestic labs off foreign silicon, restricting Nvidia imports, and forcefully pivoting the industry toward Huawei.

So - Huawei is not winning Chinese inference on price and performance. It is winning on quota - which makes the threat to Nvidia a policy instrument rather than a product, and a far harder thing to compete against. 

Nvidia CEO Jensen Huang has warned for years that U.S. export controls would inevitably forge a self-sufficient Chinese chip industry. His prophecy is now being fulfilled - by the Chinese government itself. Regardless of what Washington permits, Beijing acts as the ultimate gatekeeper, utilizing import quotas to force its most critical AI labs to adopt Huawei hardware for their fastest-growing workloads.

Tyler Durden Sat, 09/05/2026 - 16:55

With Its War On Prediction Markets, The Gaming Lobby Plays A Bad Hand

With Its War On Prediction Markets, The Gaming Lobby Plays A Bad Hand

Authored by Dean Heller via RealClearMarkets,

There's a saying in Vegas, the house always wins. I represented Nevada in Congress for more than a decade and I can attest to the truth behind that phrase. But what I learned is that it's rarely a fair fight. The gaming industry works to stack the odds against competition, whether it's at the tables, in courtrooms, or in the halls of Congress.

It was never a fair fight, which is why the gaming industry is so worried about prediction markets. Prediction markets are far from perfect, but they're fair. There is no house. It's no wonder the gambling industry is working overtime to stop them. Recently, the American Gaming Association tried to join a lawsuit in Wisconsin against the CFTC, and its lobbyists went to Congress this week asking for an outright ban on sports event contracts.

While representing Nevada, I sat on the Senate Finance and Banking committees, and whipped votes to protect our gaming industry from anything that smelled like competition. When Sheldon Adelson wanted a federal ban on online gambling, I backed the Restoration of America's Wire Act and warned that internet gaming would be "a final nail" for brick-and-mortar casinos. Looking back, I was probably being a little dramatic. The bill failed anyway, in large part because opponents argued it would cost states an economic boost and push bettors toward unregulated offshore sites.

So when I watch the gaming lobby go to war against prediction markets today, I recognize the play. I ran it.

The industry has launched a multi-state litigation campaign, fired off cease-and-desist letters to stop sports event contracts, and cheered as 41 state attorneys general urged the CFTC to cede jurisdiction over these markets to the states. In certain states, lottery and gaming agencies are colluding with the American Gaming Association. When your state gaming agency and the casino lobby are copying each other's homework, it's fair to ask who's actually regulating whom.

Here's what makes the crusade hard to take seriously. While the casinos lecture Washington about consumer protection, a lawsuit in Philadelphia is showing the country how the sportsbook business actually works. A gambler named Terry Thompson wagered roughly $18.5 million on FanDuel and lost more than $1.5 million. He was a "VIP." His reward for all that losing? His FanDuel host arranged a personalized Cameo video from Phillies star Bryce Harper, who says he never consented and thought he was recording a holiday greeting. Thompson is now suing FanDuel for feeding his addiction, and the Pennsylvania Gaming Control Board is reviewing sportsbooks' use of celebrity messages to keep high rollers betting.

Think about the business model that produces that story. Sportsbooks make money when customers lose. So the customers losing the most get the white-glove treatment, and the ones who win too much get shown the door.

There's a reason prediction markets can be straight with their customers in a way sportsbooks can't. An exchange collects a small fee on every trade, win or lose, so no revenue rides on anyone's losing streak. When a platform's paycheck doesn't depend on a customer going broke, it can step in at the signs of trouble, the repeat losses and the chasing, without touching its own bottom line. And instead of fighting oversight, this industry keeps asking for more of it.

Some of these markets, like Kalshi and NADEX, are federally regulated, based in the United States, and volunteering to pay state taxes. North Carolina just passed a law recognizing federal oversight and taxing prediction market revenue, which was smarter than burning taxpayer money in court and inconvenient for the claim that these platforms cost states money. New Jersey came close to taxing prediction markets this year, and the loudest opposition came from the union representing Atlantic City's own casino workers, who argued that taxing prediction markets would "legitimize" a competitor to their industry. They'd rather forgo the tax revenue than admit prediction markets are here to stay.

My advice to my old friends in gaming is the advice I wish someone had given me during the Wire Act fight: innovate, don't litigate. The knee-jerk lawsuits didn't stop sports betting, tribal gaming, or the internet, and they won't stop this. I love Las Vegas. It's one of my favorite places on earth, and there's plenty of room for everyone. Let consumers decide.

After all, this is the town that will take a bet on anything. Funny that the one wager it won't touch is a fair fight.

Tyler Durden Sat, 09/05/2026 - 16:20

Under-The-Radar Oklahoma Bitcoin Mining Site Condemned After Leaking 3 Million Gallons Of Water

Under-The-Radar Oklahoma Bitcoin Mining Site Condemned After Leaking 3 Million Gallons Of Water

A massive water leak in El Reno, Oklahoma has brought new scrutiny to a Bitcoin mining operation that city officials say had been operating without required approvals and in violation of multiple building and safety codes, according to KFOR 4. Three million gallons of water were leaked, according to KOCO ABC. 

The facility, operated by Athlon BT LLC, had largely escaped public attention until the leak was discovered. City officials say the company had also installed a fire hydrant without their knowledge, while questions remain about how water was being used at the site.

Athlon originally applied for building permits in 2022. By 2023, however, El Reno had issued a stop-work order after the permits expired and officials identified multiple fire and life-safety code violations. The company was given until December 2023 to address the problems, according to the city.

Instead, officials say Athlon continued construction and eventually began operating the facility despite lacking the inspections and final certificate of occupancy required by the city. Officials have cited problems involving electrical systems, drainage and other areas of the property.

“They really weren’t in compliance at all,” city spokesperson Lyndsay Bayne said.

The discovery came as a surprise not only to residents but also to local officials, who said the Bitcoin mining operation had attracted little attention before the leak, according to KFOR 4.

Athlon had previously described the structures on its website as “mobile data centers.” The operation, however, differs considerably from the large hyperscale data centers proposed in communities such as Yukon and Piedmont, which have generated debate over their potential demands on local infrastructure and water supplies.

The KFOR 4 report says that El Reno officials say Athlon told the city its equipment was air-cooled and therefore should not have required water for cooling. According to the city, the water line involved in the leak was supposed to serve only a fire hydrant.

That hydrant itself has raised additional questions. Officials say Athlon installed it behind the property without notifying the city, and it did not appear on municipal records. The hydrant was also reportedly concealed beneath a large pile of brush.

KFOR later observed above-ground piping that appeared to connect the mobile data center units and extend toward the hydrant. Athlon’s website, before becoming unavailable, also referenced what the company called “hydro-cooling technology.” Those details have prompted questions about whether the water line may have served a purpose beyond fire protection.

Photo: KOCO ABC

KFOR reported that its attempts to obtain an explanation from Athlon have gone unanswered. Calls and emails to the company received no response, and its website subsequently displayed a maintenance notice.

After the water leak was discovered, El Reno condemned the property.

The episode is unfolding amid a broader debate over data center development in Oklahoma, although city officials have stressed that Athlon’s Bitcoin mining operation should not be confused with the much larger data center projects being proposed elsewhere.

“El Reno doesn’t have any large data centers or any plans to have any large data centers,” Bayne said. “This was completely under the radar.”

The city has since strengthened its rules governing future data center developments. A recently adopted ordinance requires proposed data centers and large artificial intelligence facilities to undergo greater scrutiny and provide an opportunity for public comment before they can move forward.

For residents concerned about the strain such facilities could place on local resources, the Athlon controversy has added urgency to calls for stronger oversight. The unresolved questions surrounding the company’s permits, infrastructure and water use are also likely to keep the Bitcoin mining operation under scrutiny as city officials determine how the facility was able to operate for so long without full compliance.

Tyler Durden Sat, 09/05/2026 - 15:45

FICO Crashes As Trump Housing Chief Pulte Cracks Mortgage-Score Monopoly

FICO Crashes As Trump Housing Chief Pulte Cracks Mortgage-Score Monopoly

"Equifax, Experian, and TransUnion have been overcharging Americans for far too long," Federal Housing Finance Agency Director Bill Pulte wrote on X late Thursday.

The Trump administration's campaign against the cost of credit scores and reports used in the mortgage industry sent shares of Fair Isaac, the company behind FICO scores, as well as Equifax and TransUnion, tumbling on Friday morning.

Pulte continued: "This will end soon. We are seriously considering bi-merge, and stronger solutions (SAFER and SOUNDER). We will not allow companies to take advantage of American consumers. No more."

Pulte's warning was accompanied by a Reuters report that mortgage giants Fannie Mae and Freddie Mac will allow all lenders to use VantageScore, a competing credit-scoring model, expanding a rollout across 50 lenders.

The move to lower costs for homebuyers and boost competition in the mortgage credit-scoring market, which FICO dominates, is seen by the market as a direct challenge to FICO's long-standing dominance.

Ashish Sabadra, an equity-research analyst at RBC Capital Markets, provided clients on Friday morning with more details about the industry implications following Pulte's X post:

Assessing the Impact on Credit Bureaus (EFX/TRU/EXPN) and FICO

Our view: Tweet from FHFA Director Bill Pulte suggests the agency is seriously considering permitting bi-merge credit reports for conforming loans. If fully adopted across the mortgage market, this shift could negatively impact up to one-third of mortgage inquiries. Beyond volume loss, the move would also introduce greater competition in mortgage credit reporting, a dynamic we will monitor closely for signs of pricing pressure.

Regarding bureau-level impact, EFX carries the greatest mortgage exposure given its mortgage solutions and income and employment verification businesses, though these same assets also present meaningful bundling opportunities. However, with the remaining third-party resellers estimated to control 75%+ of the market, these players may preferentially gravitate toward TRU and EXPN. EXPN has the least mortgage exposure among the three bureaus and would likely face the smallest revenue headwind from this potential regulatory change.

Separately, Bill Pulte also tweeted that, effective immediately, he is instructing Fannie Mae and Freddie Mac to approve all lenders to use VantageScore. VantageScore adoption has already gained meaningful traction, with VS4 market share reaching approximately 25% at UWM and ~34% at Rocket through August 25th. However, while 50 lenders participated in the pilot program, Fannie Mae data indicates that only four mortgage lenders were actively issuing VantageScore loans. Pulte's directive to open adoption to all lenders would therefore represent a significant broadening of the program. 

Mortgage exposure: In 2025, Mortgages represented ~21% of EFX's revenues, with mortgage credit reports and mortgage solutions collectively accounting for ~11% of total revenues, or 32% of USIS revenues. For TRU, mortgage exposure stood at ~13% of total revenues, representing ~35% of US Financial Services revenues. EXPN has comparatively limited exposure at ~4% of total revenues.

Background. FHFA Director Bill Pulte announced last night that effective immediately, Fannie Mae and Freddie Mac have been instructed to approve all lenders to use VantageScore as an eligible credit scoring system. The directive follows a successful initial rollout in which 50 lenders delivered loans using VantageScore under the program.

In a separate post, Pulte stated that EFX, TRU, and EXPN are overcharging American consumers and that he is seriously considering a bi-merge credit pull requirement for conforming loans, as well as structural reforms.

Fair Isaac crashed as much as 21%, its sharpest intraday decline since March 2020 if losses sustain through close. Equifax and TransUnion each tumbled as much as 11%.

Separately, TD Cowen analyst Jaret Seiberg told clients that Pulte's attack on ​​​​​​mortgage-related costs could support the administration's affordability message ahead of the midterm elections this fall.

Tyler Durden Sat, 09/05/2026 - 14:35

The Soft Antichrist Of The AI Age: What Everyone Is Missing About The US-China Arms Race

The Soft Antichrist Of The AI Age: What Everyone Is Missing About The US-China Arms Race

Authored by Patrick Feeley via Substack,

I. The word

Peter Thiel spent the back half of last year giving private lectures on the Antichrist, and the word has been loose in the discourse ever since. His political reading is the old one. The Antichrist is not a cartoon devil. He is the figure who arrives offering peace and safety, and who uses the fear of catastrophe to install one universal order. In Thiel's telling that figure is a regulator. He stops technology in the name of survival. The price of the peace is stagnation.

I want the frame. I do not want his conclusion.

The more probable figure is not the one who promises safety. It is the one who promises growth. Most of the world does not lie awake about existential risk from machine intelligence. It lies awake about electricity, logistics, credit, tax collection, and a median citizen who is twenty four and needs work. To that world the universal offer is not a moratorium. It is a stack. Cheap. Financed. Hosted. Present. Already attached to the handsets, the ports, and the power.

That is the soft Antichrist. It does not arrive with a speech about ending history. It arrives as the only AI that can grow your GDP.

I am not writing theology. I am writing underwriting.

II. The comforting story

The market is telling itself a story. The AI race is a contest of models. America builds the best systems. China copies. Europe regulates. Capital therefore clusters around closed labs, chipmakers, and hyperscale cloud. The scoreboard is a benchmark table.

That story is not false. It is incomplete in a way that misprices power. It treats the richest customers as the only customers that matter. It treats evaluations as destiny. It treats national power as a software demo.

I disagree.

The race will be decided by who becomes the default operating system for the economies that still have the most growth left. Those economies will not adopt AI as a lifestyle product. They will adopt it as a growth tool. They will take the stack that is cheap, present, financed, and attached to what they already run. If that stack is Chinese, Beijing does not need to conquer anyone. It only needs to become expensive to leave.

III. Where the mass actually is

When Sargasso maps AI adoption across emerging GDP rather than across model releases, the picture is not the one the market is priced for.

Start with the denominator. On purchasing power terms, IMF projections for 2026 put China at about $44.3 trillion against $32.4 trillion for the United States. India is near $18.9 trillion. Indonesia clears $5.4 trillion and Brazil $5.2 trillion. Turkey is at $4.0 trillion, Mexico $3.6 trillion, Saudi Arabia $2.9 trillion, Egypt $2.6 trillion, Nigeria $2.4 trillion. Nominal dollars still flatter America, and by a wide margin. China's nominal print is about $20.9 trillion against the same $32.4 trillion for the United States. Both numbers are true. They answer different questions. Nominal tells you who can buy foreign assets. PPP tells you how much physical and administrative activity there is to automate. For an adoption thesis, the second number is the one that matters.

Ray Dalio has been describing the political consequence in plain terms. He calls it a tribute system. A hierarchical order in which leaders travel to Beijing to acknowledge relative power in exchange for access and stability. He ties it to a growing view abroad that American security guarantees will not be honored under stress. I take the framing seriously. I do not treat it as scripture. Ports and rail were the first set of rails. Models will be the next set.

IV. The evidence is already in the download data

This part of the argument is no longer speculative.

Over roughly four years, the American share of model downloads on Hugging Face fell from about sixty percent to the mid teens by late 2025, according to reporting in The Wire China. Hugging Face's own one year review of the DeepSeek moment is blunt on the composition shift. DeepSeek R1 became the most liked model on the platform in its history. The top of that list is no longer majority American. Baidu went from zero public Hugging Face releases in 2024 to more than one hundred in 2025. ByteDance and Tencent raised their release counts eight to nine fold. Of newly created models under a year old, downloads for Chinese models surpassed any other country, including the United States. Western startups and researchers now routinely fine tune Chinese base models because those are the largest open weights available.

The Wire China's Southeast Asia reporting puts the commercial logic in local language. A Jakarta lab head said developers will always pick the cheapest one. A Malaysian founder said he wants the biggest model and there is no Western open source offering at that size. Chinese cloud providers were running thirty seven availability zones across six Southeast Asian regions against thirty across four for the Western field.

None of this shows up cleanly in a frontier benchmark table. All of it shows up in switching costs three years from now.

V. The institutional layer

Beijing is not leaving the volume layer to price alone. In July 2026 it stood up the World Artificial Intelligence Cooperation Organization in Shanghai, with twenty nine founding members. Public reporting names Russia, Kazakhstan, Pakistan, Indonesia, Brazil, and a broader set spanning Africa and Latin America among the signatories. The five year commitments attached to the body, as reported by Caixin and The Diplomat, are unglamorous and therefore serious. Training placements. Joint application centers with regional blocs. A weather early warning system deployed into dozens of countries.

Read that list as an underwriter. Training placements create the administrators who will write the next procurement. Application centers create the reference deployments. Weather systems create dependency inside a ministry that cannot afford an outage. Standards get set that way. Not with a better model. With a bureaucracy that has already learned one.

VI. America is running the right play against the wrong clock

Washington understands the problem. Executive Order 14320, signed July 23, 2025, created the American AI Exports Program to push full stack packages abroad. Chips, models, applications, cybersecurity, cloud, and data centers sold together. Analysis from the Institute for Progress argues the contested emerging markets that should sit at the center of that effort include Brazil, Egypt, Indonesia, Nigeria, Thailand, the Philippines, Malaysia, Vietnam, and Bangladesh. That is the correct map. It is essentially the map in this piece.

The tension is that the same government running an export promotion program is running an export control program, and the second one moves faster than the first. The UAE's status was upgraded only in July 2026, and even then chip access was scoped to approved entities. Meanwhile Huawei has been shopping Ascend parts into the UAE, Saudi Arabia, and Thailand, and courting Egypt directly. Beijing has published a self sufficiency ambition on a near term horizon and is moving to expand domestic AI chip output.

Set aside whether the controls are correct on the merits. Underwrite the second order effect. Capability still flows outward through commercial relationships and distillation. American open efforts start constrained at home. The result is a one way street into the volume layer of the world economy, at exactly the moment when the volume layer is where the standard gets set.

Western discourse is spending its attention elsewhere. Alignment theater. Synthetic media. White collar displacement in rich cities. Those are real problems. They are also rich country problems. The quieter failure is dependency. Once an emerging state's logistics, credit, schools, and revenue collection run on foreign models, switching stops being a procurement decision. It becomes a sovereignty decision. Sovereignty decisions do not get made on price.

VII. The map I would force into any serious strategy memo

When we screen a country the way we screen a company, we are not asking which model it admires. We are asking what it has already installed, who financed the installation, and what it would cost to rip out.

Asia. India, Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Bangladesh, Pakistan, Kazakhstan, Cambodia, Laos, Sri Lanka.

Middle East and Gulf. Saudi Arabia, the UAE, Egypt, Turkey, Iran.

Africa. Nigeria, Ethiopia, Kenya, South Africa, Angola, Ghana.

Latin America. Brazil, Mexico, Argentina, Chile, Colombia.

These are not equivalent cases. India can build its own. The Gulf can simply buy, and is buying from both sides. Vietnam and Indonesia industrialize and will take whatever shortens the industrialization. Nigeria and Ethiopia need administration and power far more than they need chat interfaces. Brazil and Mexico live between Western finance and Chinese trade and will hedge accordingly. Pakistan and Kazakhstan sit on corridors Beijing already financed once.

The common variable is growth urgency. Growth urgency selects the stack that shows up, and it selects it quickly.

VIII. The throat

Compute is the oil of this cycle, and the supply chain has a throat. Counterpoint Research put TSMC at seventy three percent of the pure play foundry market in the second quarter of 2026. Its position at the leading nodes is more concentrated than that headline suggests.

You do not need an invasion scenario to price the leverage. You need governments that come to believe only one counterpart can reliably keep the chips, the cloud, the handsets, and the financing flowing. That belief is cheaper to create than a fab and harder to reverse than a tariff.

IX. Two futures

In the first, America wins the cathedral. Benchmarks stay American. Safety papers multiply. Closed models remain impressive and expensive. Emerging economies still buy the stack attached to Chinese devices, Chinese capital, and turnkey Chinese infrastructure. Global token volume follows global GDP, which is to say it follows the parish. The United States keeps the prestige and loses the installed base.

In the second, America treats emerging GDP as the actual battlefield. Competitive open weights exist and are hostable by states that want an alternative to Beijing without becoming a tenant of a single American lab. Energy, chips, and cloud are treated as national goods rather than as line items. The public companies that can genuinely deploy AI into durable operations are valued above the ones that can only demonstrate it.

Markets are priced closer to the first future than the evidence supports. That gap is the part I care about.

X. This is the same thesis, widened

In Pilot Purgatory I argued that AI works and capital is available, and that the binding constraint is organizational. Companies cannot absorb what they have bought. Forty two S&P 500 companies captured 312 percent of the index's price return since ChatGPT while the other 458 captured 38 percent. Fifty eight percent of small and mid cap companies claim an AI strategy and under one percent describe implementation as mature.

That was a governance problem inside public companies. Widen the aperture by one order of magnitude and it is the same problem at the level of the state. Intelligence is being manufactured at declining cost. Absorption is the bottleneck. When Sargasso underwrites a company, the question is whether the organization can metabolize the technology it has already purchased. Run that question at the level of a country with weak administrative capacity and urgent growth targets, and the answer is worse. That is precisely why the party that clears the bottleneck earns something more durable than a product cycle. It writes the rails under the next order.

XI. What I would underwrite

If you underwrite AI as a feature race between rich country labs, you will be right about the models and wrong about the century.

Underwrite instead who owns the rails that India, Indonesia, Brazil, Mexico, Saudi Arabia, the UAE, Vietnam, Nigeria, Egypt, and Turkey will actually run. Underwrite who captures adoption where governance is thin and growth is urgent. Underwrite the closed labs and the national champions as though their real competitor is not the next chat interface, but a hierarchy that intends to make itself impossible to leave.

The AI race that matters is not who builds the smartest model in the richest city. It is who becomes the operating system for the economies that still have the most growth left in them.

This is not a recommendation. It is my map.

Sargasso Capital Management is a constructivist investment firm. This post is research and commentary. It is not an offer to sell or a solicitation of an offer to buy any security or interest in any fund.

Sources
  1. Fortune, "Peter Thiel is delivering 4 private sold-out lectures at a club in San Francisco, about the Antichrist," September 2, 2025. Link; Reason, "I listened to over 7 hours of Peter Thiel's leaked Antichrist lectures," October 14, 2025. Link
  2. Visual Capitalist, "The World's Largest Economies in 2026, Nominal vs. PPP," using IMF World Economic Outlook projections. Link; IMF DataMapper, GDP based on PPP. Link
  3. Fortune, "Ray Dalio says China's ascent ushers in era of 'tribute system,'" May 16, 2026. Link; Fortune, "Ray Dalio just finished a 10-day trip to China," June 24, 2026. Link
  4. The Wire China, "Surrounding American AI from the South," June 21, 2026. Link
  5. Hugging Face, "One Year Since the 'DeepSeek Moment,'" January 20, 2026. Link
  6. Reuters, "Twenty-nine countries sign agreement to establish global AI cooperation body," July 16, 2026. Link; Caixin Global, "China Launches Shanghai-Based AI Governance Body With 29 Founding Nations," July 17, 2026. Link; The Diplomat, "With New AI Governance Organization, China Seeks to Formalize Its Global AI Influence," July 2026. Link
  7. Executive Order 14320, "Promoting the Export of the American AI Technology Stack," July 23, 2025. Link; Institute for Progress, "America's AI Exports Program." Link
  8. Morgan Lewis, "BIS Upgrades UAE Export Control Status, with AI Chip Access Limited to Approved Entities," July 2026. Link
  9. South China Morning Post, "Huawei eyes export of AI chips to Middle East, Southeast Asia to rival Nvidia," July 12, 2025. Link
  10. Bloomberg via Free Malaysia Today, "Huawei pitches AI chips to Egypt in test of US tech diplomacy," August 26, 2026. Link
  11. RCR Wireless, "China aims to triple AI chip output," August 28, 2025. Link
  12. Counterpoint Research, Global Pure Foundry Market Share, Q2 2026. Link
  13. Sargasso Capital Management, Pilot Purgatory, May 6, 2026. Link
Tyler Durden Sat, 09/05/2026 - 14:00

Foldable iPhone Production Reportedly Limited Ahead Of Launch

Foldable iPhone Production Reportedly Limited Ahead Of Launch

Apple is expected to unveil its first, long-awaited foldable iPhone next Wednesday at its product event in Cupertino, California. Rumored to be called the iPhone Ultra, the device could start at more than $2,000, with MacRumors estimating that the new iPhone could cost as much as $2,499.

Apple analyst Ming-Chi Kuo expects the company to introduce the foldable alongside the iPhone 18 Pro lineup, although Nikkei Asia reports that manufacturing constraints could delay preorders.

Sources deep within Apple's supply chain told the Japanese outlet that production lines for the foldable iPhone are producing only a few hundred units per day as the company works to meet its extremely high quality-control standards.

"Apple has very high quality requirements and added an extra trial run in August ahead of actual production. However, production is ramping up slowly, with output currently at only a few hundred units a day in late August. That initial volume could be challenging to meet market demand," one supply-chain manager told the outlet.

The simple production math is absolutely brutal. Apple has reportedly targeted production of between 8 million and 10 million foldable iPhones this year. Even at 500 units per day, the current production rate would yield fewer than 200,000 phones over the course of a year.

Separately, Kuo expects manufacturing constraints to delay preorders until the fourth quarter. That would mirror the 2017 rollout of the iPhone X, which was unveiled in September but did not become available for preorder until late October.

Next week's unveiling will be the first major product showcase under CEO John Ternus, the longtime hardware chief who succeeded Tim Cook last Tuesday. Cook has moved into the executive chairman role after leading Apple for 15 years.

Late this week, Brandon Nispel, an equity research analyst at KeyBanc Capital Markets, published a note to clients outlining what to expect at next week's launch event:

We think Apple's Sept. 9 iPhone launch event is likely a negative catalyst for shares where we likely learn the main unknown, iPhone pricing, neither of which we think hold positive implications. We think either: 1) a larger price increase can soften gross margin pressure, but likely will impact unit volumes and bring "sticker shock"; or 2) prices are raised more selectively, amplifying the focus on gross margins, and a possible need to raise prices again in the future; we don't think either is a great outcome. Apple's Sept. event is typically followed by modest negative reaction to shares.

What do we expect to be announced?

We expect 3 new iPhones: iPhone 18 Pro, iPhone 18 Pro Max, and the iPhone Fold/Ultra.

iPhone 18 Pro

The iPhone 18 Pro is expected to maintain the same 6.3 inch display as the iPhone 17 Pro, while moving to an A20 Pro processor, vs. the A19 Pro chip in the 17 Pro. The A20 Pro should provide better performance and power efficiency when compared to the iPhone 17 Pro, while Apple's C2 modem is expected to improve battery life when using cellular data and improve performance in congested coverage areas. The smartphone is also set to be equipped with an upgraded variable aperture camera allowing users to adjust the amount of light passes through the camera lens. Additionally, the iPhone will have a 4,288mAh battery vs. 4,252mAh in the iPhone 17 Pro.

iPhone 18 Pro Max

The iPhone 18 Pro Max is expected to maintain the same 6.9 inch display as the 17 Pro Max, similarly moving to the A20 Pro processor, and includes a 5,567mAh battery compared to the 5,088mAh battery in the 17 Pro Max, which may increase the thickness of the iPhone. The Pro Max is also expected to include the new variable aperture camera.

iPhone Fold/Ultra

Apple is expected to release its first ever foldable iPhone, which is expected to have a 5.5 inch display when closed and a 7.8 inch display when opened. The Ultra may include the A20 Pro processor, C2 modem, a titanium frame, and the Company will bring back Touch ID on the side of the device rather than having Face ID. It is anticipated to be Apple's thinnest iPhone yet at ~4.5mm, coming in roughly 1mm thinner than the iPhone Air, which was launched at last year's event. However, the phone is expected to come with a camera downgrade compared to the other models, with two rear cameras and no telephoto lens. The Fold/Ultra is also rumored to include two batteries, which could make it the largest battery capacity in an iPhone.

We expect 2 new Apple Watches: Apple Watch Series 12 and Watch Ultra 4.

We expect new AirPods.

We expect timing of iOS 27 launch timing to be solidified.

What's the typical reaction to the event?

We believe given Apple is one of the world's most well reported on companies, announcements at the event rarely are surprising to investors and it doesn't pay to be bullish going into the event. In the past 5 years, Apple's average stock performance the day the iPhone is announced is -0.72%, and T+5 day performance is -1.22%.

What's our view?

At this point, we expect iPhone 18 Pro and Pro Max builds of 73M in F4Q26/F1Q27, which compares to our estimate of 67.7M in the prior year, so on a like-for-like basis, we expect a higher number of iPhone 18 Pro/Pro Max builds vs. the iPhone 17. However, when including the iPhone 18 Fold/Ultra and the iPhone 17 base model, we see total iPhone 18 builds of 80M, vs. ~91M in the prior year, where we see declining unit volumes due to the lack of iPhone 18 base model. We suspect the decline in unit volume of ~12% is made up for with higher pricing due to mix as well as higher unit ASPs. We are factoring in iPhone Pro price increases of $150 to $1,249 and iPhone Pro Max price increases of $200 to $1,399, and assume a $2,199 price for the iPhone Fold/Ultra

Apple shares are up 17.7% year to date as of Friday's close.

The average 12-month price target among analysts tracked by Bloomberg is $329.91, representing roughly 3% upside from current levels.

Also next week, Chinese smartphone rival Huawei will release the latest generation of its trifold smartphone on Monday, just ahead of Apple's launch event.

Tyler Durden Sat, 09/05/2026 - 13:25

NANO Nuclear Advances KRONOS With Baker Hughes, Adds Enveniam To Fuel Efforts

NANO Nuclear Advances KRONOS With Baker Hughes, Adds Enveniam To Fuel Efforts

Three weeks after we noted that NANO Nuclear Energy's vertical-integration strategy was beginning to look more like a physical fuel cycle than a corporate slide deck, the company has delivered a pair of updates spanning both ends of the nuclear value chain.

NANO’s announcement from Thursday details ongoing progress for the design of a circulation pump for cooling their KRONOS reactor, and Friday's announcement describes the multi-prong agreement with a new engineering firm for developing their nuclear fuels business segment.

Development of the primary helium circulator was moved from preliminary engineering to detailed design. Howden, a Baker Hughes subsidiary following the acquisition of Chart Industries, is “building upon the reactor performance requirements established by NANO Nuclear.”

The helium circulator is one of the most critical components of high-temperature gas-cooled reactors like NANO's KRONOS design. It moves helium coolant through the reactor to transfer heat from the core and out to the secondary system.

Howden has established a “mature technical foundation” which allows for further optimization in manufacturing planning.

Jay Yu, Founder and Chairman of NANO Nuclear Energy, noted:

"each engineering milestone strengthens the industrial ecosystem supporting KRONOS while further positioning the program for future first-of-a-kind deployment and long-term commercial success."

The day after announcing progress with the circulator, NANO released a statement detailing a new agreement with Enveniam.

The MOU establishes a collaboration between the two companies addressing a wide range of operations across the nuclear value chain. The press release points to six principle workstreams under the combined effort:

  • Nuclear fuel transportation
  • Conversion and deconversion
  • Microreactor commercialization
  • Advanced manufacturing
  • Domestic fuel supply chain
  • Commercial energy markets

James Walker, Chief Executive Officer of NANO Nuclear Energy, highlights:

"Enveniam's capabilities closely align with our expertise and business plans across these critical workflows. We believe this collaboration can help us evaluate projects more efficiently, identify execution risks earlier and build stronger delivery plans as opportunities advance toward definitive agreements."

Most notably, this new work between NANO and Enveniam follows the announcement last year that Enveniam will be serving as Lead Project Integrator for LIS Technologies.

There, Enveniam will lead “the design, development, and construction of the LIST laser-based uranium enrichment facility.”

LIS Technologies and NANO Nuclear are working together to develop a vertically integrated fuel chain, with LIS fulfilling the enrichment stage. NANO is working on multiple other stages of the fuel chain, to include conversion and deconversion, fuel fabrication, and fuel transportation.

Tyler Durden Sat, 09/05/2026 - 12:15

Biden-Appointed Judge Dismisses DOJ Lawsuit Against New Jersey Law Restricting ICE Operations

Biden-Appointed Judge Dismisses DOJ Lawsuit Against New Jersey Law Restricting ICE Operations

Authored by Troy Myers via The Epoch Times,

A district judge ruled on Friday that New Jersey can continue restricting federal immigration officers from using state property for immigration enforcement-related purposes.

New Jersey Gov. Mikie Sherrill is shown in this file photo. Eduardo Munoz Alvarez/Getty Images

The Department of Justice (DOJ) had accused New Jersey in a lawsuit of violating the Supremacy Clause of the U.S. Constitution, also known as preemption, which holds that federal law supersedes state law when the two are in conflict.

The agency alleged that an executive order New Jersey Gov. Mikie Sherrill signed earlier this year blocked federal immigration operations from using state property, preventing Immigration and Customs Enforcement (ICE) from carrying out its duties.

Biden-appointed Judge Georgette Castner of the U.S. District Court for the District of New Jersey disagreed.

"[The executive order] does not prevent the United States from carrying out federal immigration laws; rather, it declares that New Jersey will not provide its own resources to assist the United States in these efforts," said Castner.

The judge also dismissed DOJ lawyers' argument that adhering to federal immigration law, the Immigration and Nationality Act, specifically, was "impossible" because of the state restriction and prevented "the United States from accessing aliens."

"The Court finds this response unconvincing," Castner wrote. "The Court also finds no conflict preemption."

The Justice Department did not respond to a request for comment by publication time.

Under Sherrill's executive order, federal immigration officers are prohibited from using state property as a staging area, processing location for illegal immigrants, or operations base for carrying out enforcement.

The law also prevents any New Jersey executive branch departments or agencies from allowing federal authorities to use state property.

Sherrill included an exception in her order that allows access if authorized by a judicial warrant or order.

The governor welcomed Castner's decision in a Friday statement, criticizing federal immigration agents as "untrained."

"ICE is not making New Jersey's communities any safer," she said in a statement.

"My number one priority will always be to protect New Jerseyans, and I will continue to fight for safe communities for everyone in our state."

Although Castner conceded in her 30-page opinion that the federal government has an obligation to remove illegal immigrants from the United States, she wrote that "nothing in the [Immigration and Nationality Act] indicates that states are required to assist the federal government in meeting this obligation."

After the signing ceremony of her executive order earlier this year, Sherrill announced a website launch for New Jersey residents to report their interactions with ICE and upload photos and videos of officers.

Information submitted to the portal would be used by the state attorney general's office to potentially "hold the government accountable."

New Jersey has also adopted a mask ban on federal law enforcement officers and a requirement for them to show identification before making an arrest. The DOJ sued over that law as well.

The Garden State, and a few others, had already banned its local and state law enforcement agencies from cooperating with ICE, otherwise known as 287(g) agreements, prior to President Donald Trump's return to the White House last year.

Several more Democratic-led states have followed in outlawing such cooperation or attempting to do so since Trump, a Republican, began his second term and made it a priority to stop illegal immigration.

Tyler Durden Sat, 09/05/2026 - 11:40

AI Bears: Right About The Excess, May Be Wrong On The Trade

AI Bears: Right About The Excess, May Be Wrong On The Trade

Authored by Lance Roberts via RealInvestmentAdvice.com,

While the AI bears focus on concentration and circular financing, the last tech overbuild was financed with debt, and this one is being paid for in cash.

Before I discuss why I disagree with the “AI bears,” I want to state that I respect their opinions, have evaluated their concerns, and have simply derived a different set of conclusions. That is an important statement, because this particular group of “AI bears” includes some of the sharpest risk minds in the business, and they have been early to almost every warning that later mattered.

When people this good line up on one side of a trade, you go back and check your own work. That’s what I did, and this article is where I landed. As always, the reason I publish these articles is for accountability later, for you and our clients.

While this group of AI bears may indeed be right about the excess, they could still be potentially wrong about the trade. I care about the latter, and those are two different claims that the market keeps confusing.

The Bear Case Deserves A Hearing

Let’s start with the person I admire the most in the AI bear camp: Fred Hickey. Fred has run The High-Tech Strategist since 1987 and has made the cleanest version of the argument. He compares today’s datacenter mania to the fiber-optic overbuild that cracked in 2000, only far larger. To wit: he has called it a “more dire situation than the great fiber-optic capacity overbuilds.” 

He is not alone in this view, and that really is the point to address. Michael Burry has been circling the same plumbing, watching Nvidia’s credit-default swaps widen as the chipmaker turns into banker, landlord, and equity partner to its own customers.

But the AI bear roster doesn’t stop there. The Bank for International Settlements flagged roughly $1.65 trillion in off-balance-sheet obligations held by the largest hyperscalers, exceeding the amounts they carry on their books. Then Sequoia’s David Cahn put the annual gap between AI infrastructure spending and ecosystem revenue at nearly $600 billion. Furthermore, Allianz measured the capex-to-revenue divergence at about 46%, well past the 32% that marked the 2001 telecom bust. Then, lastly, in August, an MIT study suggested that most corporate AI pilots had produced no measurable revenue at all.

That is a very serious AI bear group making a very serious case, and you should only ignore it at your peril. When a strategist who has correctly traded five separate Nvidia collapses of 55% or more says a sixth is coming, and a Bank of America survey shows 54% of professional managers are now calling AI a “bubble,” you need to factor that into your thinking. As investors, we must work out precisely which parts are right and which parts are borrowed pattern-matching from a different era.

So, let’s start with where the AI bears are right.

Where The Bears Are Right

Yes, valuations are stretched, and by the measure that matters most for fragility, concentration is worse now than it was in 2000.

Notice how far the line has traveled in the chart above. The ten largest stocks now make up roughly 43% of the S&P 500, a record, and past the 27% peak the index touched at the height of the dot-com boom. By that single measure, the market is more top-heavy today than at any point in modern history. The equal-weight index has already begun to diverge from the headline benchmark, which is exactly the kind of internal crack that tends to show up before the megacaps wobble. Such is the setup the AI bears keep pointing toward, and on that point, they are correct.

Secondly, the circular-financing argument is real, too. When Nvidia takes an equity stake in a company that then commits to buying Nvidia chips, part of what gets reported as “demand” is the seller funding its own sales. Such is a genuine distortion of the signal, and it deserves the scrutiny that it has been getting. Add the depreciation math, where trailing capex of roughly $434 billion dwarfs the $149 billion of depreciation currently running through income statements, and you get a bill that arrives in 2027 through 2029, whether the revenue does or not. The AI bears did not invent any of this; they just read the corporate filings.

Where The Analogy Breaks

So, with all that stated, it seems to be obvious that you should just get out of the AI trade now before the next “Dot.com” crash occurs. Here’s the problem with that comparison. The comparison to the fiber-optic “boom and crash” is that it turns on the one variable that actually determined the outcome in 2000, and that variable does not read the same today: who is writing the checks.

Leading up to the 2000 overbuild, the financing came from companies that had no business borrowing what they borrowed. WorldCom, Global Crossing, and the upstart carriers that were stringing fiber on debt, and the vendor loans that Lucent and Nortel handed customers who could not pay them back. When revenue failed to arrive on schedule, those balance sheets could not cover the shortfall, and the structure collapsed into bankruptcy court.

Today’s buildout is a different animal on this exact axis. Roughly two-thirds of the 2026 capex is funded directly from the operating cash flow and equity of Microsoft, Alphabet, Amazon, and Meta, four of the most profitable enterprises ever assembled. The existing borrowing is investment-grade and still a minority of spending. The balance sheets carrying this cycle are not WorldCom’s, and that difference is close to the whole ballgame.

Revenue Is Real

Second, “no revenue” is not the same thing as revenue that simply hasn’t caught up to the spending yet. Inference now clears roughly 70% gross margins. Microsoft’s AI business is past a $37 billion run rate, Amazon’s AI revenue is growing in the triple digits, and Anthropic went from about $9 billion to a reported $47 billion run rate in a single year.

More notably, even Nvidia, the bears’ favorite “whipping boy,” has seen forward earnings climb so rapidly that its multiple has actually compressed as fundamentals caught up to what was believed to be overly exuberant expectations. That is the mirror image of Cisco in 2000, which peaked at nearly 30 times sales on earnings that then evaporated. The revenue trailing capex is a timing issue, not the zero-payback story the headlines imply.

Third, the AI bears predict a glut, yet the binding constraint right now is the opposite of a glut. Microsoft is sitting on something like $80 billion of Azure orders it cannot fill for lack of electricity, with GPUs idle in inventory waiting on power.

Today, more than 60% of the data center capacity planned for 2027 is not yet under construction. If or when datacenter demand is rationed by the power grid rather than by customers walking away, you do not have a capacity glut; you have a shortage. However, a fair objection at this point, and it is the strongest one the bears have: build two or three years’ worth of power and transmission, and today’s shortage becomes tomorrow’s oversupply. That is true concern, and it is the timeline risk worth watching closely, but it is also a 2028 question, not a 2026 one.

What The AI Bears Debate Means For Investors

Let me be clear. The AI bears have a real case, but no timing. This is the same problem we noted in “Debt Trap: A Crisis Without A Calendar.” I am definitely not arguing that investors should be buying the AI complex with both hands and closing their eyes. The question is NOT whether there is excess, because there plainly is. The real question is what a disciplined investor does with a genuine, extreme, but cash-funded overbuild.

Start with position sizing, because it is the one tactic that survives contact with a drawdown. NVIDIA has fallen by 55% or more on five separate occasions since 2000, and it has recovered to new highs after each. Investors who were sized to hold through the pain benefited tremendously. They did even better if they managed their exposure risk during those drawdowns.  Own your AI exposure at a weight where a 50 percent drawdown is uncomfortable rather than fatal. Sizing comes first.

Secondly, the rules are simple.

  • Favor the self-funders over the borrowers, and
  • Spread your exposure across the layers of the trade, the chips and the clouds, and the power underneath them, rather than staking the whole thesis on a single chip name.
  • Always insist that the price you pay is backed by existing earnings and not by a total addressable market slide.
  • Lastly, keep some dry powder (ie, cash), because the volatility in this complex is a feature rather than a defect, and a real correction turns into a gift the moment you have cash and a shopping list ready.

Where you take the risk matters as much as how much you take. Not all AI exposure carries the same danger, and the map below is how I would sort it.

The 5-Signals

The self-funders and the power bottleneck are part of this trade that looks least like 2000. Conversely, the levered edges are the part that looks most like it. That levered part is where a revenue disappointment does the real damage, and those are the first positions to shed when the story starts to wobble. The profitable compounders funding their own buildout sit in a different bucket, and selling them because a bear called a top is how investors miss years of compounding while waiting on a crash that shows up late, or never.

Which raises the harder question. How do you know when the story is actually wobbling?

This is crucial, and the trap that most investors fall into. You do not need to call the top. What you need is a short list of signals that fire before the top is obvious to everyone, and the discipline to act on the list rather than argue with it.

Which brings me to the question I get most often: “Why not skip the stock-picking and just own the index?”

Here is my opinion. The index has quietly become the “bet.” With the ten largest names accounting for nearly 43% of the S&P 500, buying the market today is a concentrated wager on those same few companies, made passively, without anyone ever deciding it was a good idea. Owning the index is not a way to sidestep the AI trade, because it is the AI trade, whether you meant it that way or not.

Bob Farrell’s Rule #9 is always worth repeating here:

“When all the experts and forecasts agree, something else usually happens.”

Conclusion

With more than half of managers now calling AI a “bubble” and “long the Magnificent 7” ranked the most crowded trade on the Street for nearly two years, the consensus has already tilted bearish. That does not make the AI bear case wrong, but it does suggest the obvious crash may refuse to arrive on the obvious schedule.

One of my favorite quotes from Howard Marks is that, “being too far ahead of your time is indistinguishable from being wrong.” When it comes to investing, timing is critical. Most importantly, notice that Hickey himself holds his AI-bear book at roughly 1% of his portfolio in puts, suggesting he treats it as a hedge rather than a conviction short. That is the posture worth borrowing. Own the compounders, hedge the tail, and let the revenue prove or disprove itself on the tape.

The AI bears will eventually be right about a drawdown, because everyone is eventually right about a drawdown. Whether they are right about the trade depends on a question their favorite analogy cannot answer:

“What happens when the richest companies on earth overbuild with their own money rather than borrowed money?”

Such is the question actually on the table, and that is the question you must answer before you sell.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden Sat, 09/05/2026 - 10:30

Ukraine Pushes Congress For Russia Sanctions Before Election Recess

Ukraine Pushes Congress For Russia Sanctions Before Election Recess

Authored by RFE/RL staff via OilPrice.com,

Ukraine's top sanctions official says he remains optimistic about prospects for a sweeping Russia sanctions bill in the US Congress despite growing uncertainty over when the House of Representatives will take it up, as lawmakers face a sharply shortened legislative calendar ahead of the November elections.

Vladyslav Vlasiuk, Ukrainian President Volodymyr Zelenskyy's sanctions commissioner, spent this week in Washington meeting lawmakers and congressional staff as Kyiv presses Congress to advance the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026.

The legislation passed the Senate on August 7 by an overwhelming 86-11 vote, reflecting rare bipartisan agreement. The bill would give the president additional authority to impose punitive tariffs on countries that continue buying Russian fossil fuels. It also includes provisions targeting Iran, which Vlasiuk said is engaged in close military-industrial cooperation with Moscow.

But the measure faces a more complicated path in the House, where some Democrats have expressed reservations about provisions that would give President Donald Trump additional authority to impose tariffs.

Republican leaders announced on September 3 that the final two weeks of the pre-election House session are canceled, severely curtailing what had been a full legislative calendar for September.

House members are expected to leave Washington no later than September 17 and not return until mid-November. The House will reconvene for one additional week of business after next week's Labor Day break.

The compressed calendar has increased pressure on supporters of the sanctions legislation. Senior Republican aides told RFE/RL that the bill remains a GOP priority, provided Democrats "get their ducks in a row."

Democratic aides, in response to RFE/RL inquiries, expressed cautious optimism about the measure, underscoring uncertainty over whether Speaker Mike Johnson will bring it to the floor.

Vlasiuk: 'Good Chance'

Vlasiuk said he held roughly 20 meetings with lawmakers and congressional staff during his Washington visit, including discussions with members of both parties.

He said the Ukrainian delegation encountered broad support for increasing pressure on Russia and that no lawmaker told him outright that they would oppose the legislation.

"Everyone agreed that it was necessary to increase pressure on Russia," Vlasiuk said at a briefing at the Ukrainian Embassy in Washington. "No one said that he definitely would not support this bill."

He described Ukraine as "quite optimistic" about the level of support for the legislation, including among Democrats.

One potentially important route would be for the House to consider the bill under suspension of the rules, a fast-track procedure generally used for legislation expected to command broad support. Vlasiuk said that was among the realistic scenarios for moving the bill forward.

"I think that there is really good chance that this bill will be brought onto the floor," he said.

Vlasiuk has previously identified the week after next as Kyiv's preferred window for a House vote. With the House calendar now compressed, that period could provide one of the last opportunities for a vote before lawmakers leave Washington.

Asked by RFE/RL whether the momentum surrounding the bill was still there, Vlasiuk pointed to what he characterized as continued bipartisan backing for Ukraine.

"There is a lot of support for Ukraine on the Hill," he said, adding that Kyiv has been "very vocal" in stressing the urgency of passing the bill. "At the same time, well, I mean, let's wait and see," Vlasiuk said.

Democrats Wary Of Trump Powers

The principal obstacle is not broad disagreement over confronting Russia, according to Thomas Melia, a former senior State Department official and Senate Foreign Relations Committee deputy staff director who is currently with the Free Russia Foundation.

In an interview with RFE/RL, Melia explained that Democratic leaders have several reasons for hesitating. One is that the legislation is not strictly necessary for the administration to impose sanctions, he said. Trump already possesses significant authority to sanction Russian individuals and entities.

The bill's principal value, in Melia's assessment, is therefore partly political and symbolic: Its bipartisan backing would demonstrate congressional resolve to increase pressure on Moscow.

But Melia said the House Democratic leadership was not sufficiently involved in negotiating the version that ultimately emerged from the Senate.

That concern is particularly relevant to Representative Gregory Meeks of New York, the senior Democrat on the House Foreign Affairs Committee, who has expressed general support for tougher pressure on Russia but has raised concerns about provisions of the legislation.

There is also a substantive concern: The final version of the legislation gives the president additional tariff authority. Melia said that has created hesitation among Democrats who are wary of giving Trump another instrument that could be used broadly against US trading partners.

Melia also emphasized another change from the bill's earlier form: The final version makes the sanctions optional rather than mandatory.

That distinction matters, he said, because the original legislation's political force came in part from its mandatory sanctions provisions and overwhelming bipartisan support in the Senate.

After the death of Senator Lindsey Graham, the administration backed a version of the legislation but sought changes that made sanctions nonmandatory and added tariff authority, Melia said.

The result, in his view, is a weaker measure than the original. Melia said the final version nevertheless retains substantial political significance because of the broad bipartisan support that surrounded the tougher proposal.

Kyiv Backs Tariffs

Vlasiuk defended the tariff provisions, arguing that they could make sanctions substantially more effective. "This is a powerful instrument which will allow to amplify the effect of the sanctions," he said.

He argued that tariffs and sanctions can have similar economic effects but differ in their ability to be circumvented.

"Sanctions can be adapted, sanctions can be evaded, tariffs cannot be adapted or evaded," Vlasiuk said.

He also rejected concerns that countries could be arbitrarily targeted under the bill, saying the legislation establishes criteria based on purchases of Russian fossil fuels.

In particular, he pointed to China and India, which Ukraine considers central to Russia's continued ability to sell its energy exports.

Vlasiuk said the pressure could represent "a huge blow" to Russia's ability to finance its war against Ukraine.

Ukraine also supports the bill's inclusion of Iran, he said, citing Tehran's close military cooperation with Moscow.

"Everyone understands how close cooperation is between the military-industrial complex of these countries," Vlasiuk said. "Therefore, Iran is very well-deserved."

House Vote Window Narrows

The political stakes are heightened by the House's decision to cancel its final two weeks of pre-election legislative work.

The chamber is expected to depart Washington no later than September 17, although Republican leaders have said members could be recalled if the Senate advances a party-line budget reconciliation package. That scenario is not currently expected.

Representative Don Bacon of Nebraska, a Republican who has supported the sanctions effort, described the lack of congressional action as a serious failure.

"This is a real shame. It passed 86-11 in the Senate," Bacon said. "Congressional inaction on Russia's invasion of Ukraine and on Putin's crimes is a real failure. The history books will not be kind."

For Kyiv, the urgency is not simply legislative.

Vlasiuk warned that Ukraine faces another difficult winter after months of Russian missile and drone attacks. He said 160 people had been killed in missile and drone strikes in recent months.

"We have to increase the pressure over Russia to make them change their plans, to make them really negotiate," he said.

He argued that passing the sanctions bill now would have two effects: It could eventually increase economic pressure on Russia, while immediately sending a political signal to both Ukraine and the Russian government.

There is, he said, an element of inertia in sanctions policy. Even after legislation passes, implementing measures can take days, and producing a significant effect on Russia's economy can take weeks.

"But at the same time, the very fact of passing this sanction bill," Vlasiuk said, would send a "strong signal of support to Ukrainian people" and a "really strong signal to Russian government."

Tyler Durden Sat, 09/05/2026 - 08:10

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