Forget The Plague, CDC Reports Recent Surge In Deadly Brain Fungus Cases

Authored by Jack Phillips via The Epoch Times,

The U.S. Centers for Disease Control and Prevention has said in a recent report that healthcare officials and providers should be aware of a rare but deadly fungal infection that can affect the brain and has seen a surge in recent years.

Joel and 'neurodivergent Ellie' from The Last of Us, where a not-so rare and very deadly fungal infection wipes out most of the planet...

Published on Oct. 2, the agency's Morbidity and Mortality Weekly Report called for greater surveillance of Cladophialophora bantiana, which U.S. officials have said is known to cause brain abscesses.

According to the report, the infection is linked to a 60 to 70 percent fatality rate. However, CDC researchers said in the report that national surveillance efforts currently don't exist, and that the fungus's "environmental reservoir" as well as the "route of infection" is not completely known.

Between January 2009 and July 2026, there have been 48 confirmed cases and one possible case of Cladophialophora bantiana found in samples obtained primarily from central nervous system tissue, the CDC said.

But from 2023 to 2025, "detections of the fungus increased approximately fourfold," according to the CDC report.

Researchers said that it's not clear why there has been an increase in recent years but stressed that more research into its risk factors "and potentially evolving virulence are warranted."

In patients with a brain abscess, healthcare providers should now consider whether it's due to a fungus, the report said, adding that infected people will require prompt antifungal therapy and possible surgery.

"Surgical excision might improve patient outcomes," it said. Meanwhile, "patients with infection require prompt antifungal therapy, and surgical excision might improve patient outcomes," it added.

Led by Joshua Lieberman of the University of Washington School of Medicine in Seattle, the researchers added that the presumed route of infection is inhalation of the fungus or direct inoculation following a skin injury.

The fungus "is a rare but important cause of brain abscess in both healthy and immunosuppressed people," Lieberman told MedPage Today in an interview published on Oct. 5, adding that the reason it goes to the brain is "a little bit of a mystery."

What is worrying about the infection, he added, is that "people who have apparently healthy immune systems get the infection and are also at high risk of death."

"It's alarming that it occurs outside of those typical high-risk populations who have pretty profound immunosuppression," Lieberman stated.

The median age of those who contracted the infection was 68 years, according to the CDC report.

Cases have been found in 21 states across the United States, as well as the District of Columbia, the CDC report said. California had the most, with six cases, while Florida and Texas each reported five, and Pennsylvania confirmed four.

Aside from Cladophialophora bantiana, the CDC has also issued reports about a drug-resistant type of fungus known as Candida auris, which is a yeast that is known to spread in healthcare settings.

The Last Of Us Joel and Ellie action figures (not dolls, shut up) Tyler Durden Wed, 10/07/2026 - 15:10

Trump Wants To Build A New Camp David In The Most Trump Place Possible

President Donald Trump wants to turn part of his own Florida golf course into a new presidential retreat modeled after Camp David, an unusual proposal that would further blur the line between the presidency and Trump's sprawling private business empire.

The plan calls for a portion of Trump International Golf Club in West Palm Beach to become an official presidential retreat where future commanders-in-chief could vacation, conduct diplomacy and host foreign leaders, the Washington Post reports.

Under the proposal, the federal government would receive land for the presidential compound, while the remainder of the property would continue operating as a private Trump golf club.

Trump would personally cover the cost of constructing the presidential residence and related facilities, according to Harvey Oyer, an attorney representing the club. The facility would be developed in coordination with the General Services Administration and Secret Service.

"This is a gift that the president would like to share with his successors, the people of America, and his fellow Palm Beach County residents," Oyer wrote in a letter to county officials obtained by The Post.

Future presidents would reportedly receive complimentary memberships to Trump's club and could use the new compound to host foreign leaders and international summits, according to the plan.

An unnamed White House official defended the location to The Post, pointing to its proximity to the airport, lack of nearby high-rise buildings and homes, security advantages and access to law enforcement.

"The property is minutes away from the Donald J. Trump International Airport, does not have buildings looming, does not have houses along the course, has great security features, is close to law enforcement, and happens to be a highly-rated golf course. These are features that are necessary for any presidential retreat," the official said.

Oyer suggested the project could eventually become an internationally recognized symbol of the American presidency.

"Just as Camp David, Windsor Castle, or the Élysée Palace are known worldwide, so too will the Presidential Golf Course in Palm Beach County," he reportedly wrote.

However, the proposal has some hurdles.

Palm Beach County owns the land underneath the golf course, meaning local officials would have to play a role in making Trump's vision a reality.

County Administrator Joseph Abruzzo told The Post that officials are taking the proposal seriously and communicating with the federal government as they examine a potential parcel.

*** OUR WAREHOUSE FOUND A BOX OF 50 ALMOST EXPIRED PEAK FOCUS ***

Tyler Durden Wed, 10/07/2026 - 14:55

Iraq Formally Requests Syria Act As 'Hormuz Bypass' Route For Its Crude

Syria's geography has long given the country huge economic opportunities as a major energy transfer hub connecting Middle East states to the Mediterranean.

But as the last decade plus of proxy war which resulted in the overthrow of Bashar al-Assad demonstrated, Syria has also long been target of foreign machinations bent on seeing a puppet state installed in Damascus. The US-Gulf allies broadly waged war against the so-called 'Shia crescent' represented in the old Baghdad-Damascus-Hezbollah axis.

Henry Kissinger famously stated of its opportunity-rich geography, "you can't make war in the Middle East without Egypt and you can't make peace without Syria." The historiographical term Pax Syriana also captures this concept: as goes Syria, so goes the whole region.

Prior file image: Long convoys of Iraqi diesel-laden tanker trucks line up along the Tartus-Baniyas highway, via AFP.

Of course, the external powers which have long sought to dominate the region both politically and on the energy front know this full well, which makes it all the more shameful and ironic that mainstream media and government officials had long derided as 'conspiracy theorists' anyone who connected a 'pipeline wars' theme with Washington's covert war on Syria.

Widespread derision was the reaction of MSM punditry when back in 2016 Robert F. Kennedy Jr. penned the following excellent lengthy investigation:

Why the Arabs Don’t Want Us in Syria They don’t hate ‘our freedoms.’ They hate that we’ve betrayed our ideals in their own countries—for oil

Fast-forward to 2026, amid Trump's Iran war and the Strait of Hormuz crisis, and another conspiracy theory becomes conspiracy fact (as we've been documenting of the great crude transit 'rewiring' efforts to erode Iran's leverage over the Hormuz passage).

On Wednesday, cue a new Bloomberg headline: Syria Set to Emerge as Hormuz-Bypass Option for Iraq's Crude Oil.

The deserts of Western Iraq and Eastern Syria are set to look like a scene out of Max Max, apparently. "Syria is set to provide a route for Iraqi crude exports to avoid the hazardous Strait of Hormuz, with a stream of trucks being lined up to haul oil overland to a port on the Mediterranean Sea," Bloomberg writes.

"The Iraqi government asked Syria to help with the export of crude in addition to existing flows of fuel oil, Yousef Qiblawy, chief executive officer of the state-owned Syrian Petroleum Co., said in an interview with Bloomberg News," the report continues.

To some degree, this overland route was already being 'tested' during the latter years of the Syrian proxy war, when US forces occupied Syria's oil and gas fields of Deir Ezzor and Al-Hasaka regions.

Reviving land corridors from Iraq to the Mediterranean:

Hormuz disruption revives land corridors from Iraq to the Mediterranean The Strait of Hormuz handles a massive slice of the world's oil and gas — and with that route under threat, the region is dusting off old alternatives. One proposal gaining attention: a land corridor linking Iraqi oil fields to the Mediterranean via western Iraq and Syria. Iraq is already weighing this against the Turkish Ceyhan route and a possible path through Jordan. Syria, for its part, could reclaim its historic role as a bridge between Iraq and the Mediterranean Sea. Iraqi fuel oil and other petroleum products are reportedly already moving by truck through Syria to Mediterranean ports, then on to Asia and Europe — no Hormuz involved. https://t.co/AWbFJOGcwC

— Sputnik (@SputnikInt) September 27, 2026

They had run tanker trucks in the other direction - from Syria into Iraq, siphoning off Syrian oil and its sovereign resources, after President Trump during his first term hailed that the Pentagon would 'secure the oil'.

Read our: Mystery Explosions: Syria's Recovering Gas Network Keeps Getting Sabotaged

As for actual pipeline routes from Iraq to the Mediterranean via Syria being revived, major hurdles remain and its not just the gargantuan cost of reviving the derelict hardware - but there's an obvious security problem in a country that's seen mysterious armed groups constantly bomb Syrian energy infrastructure - both during the Assad years and now under Jolani.

Tyler Durden Wed, 10/07/2026 - 14:35

SpaceX Credit Risk Hits New High As AI Debt Binge Fears Spook Bondholders

SpaceX's proposed $40 billion chip-collateralized financing for Nvidia AI chips, reported overnight by the Financial Times, has restarted concerns over the pace of its debt-funded expansion, which as we discussed last night, , is starting to flash a dangerous shade of red: despite raising a record $86 billion in its June IPO, Elon Musk's rocket and AI company's growing financing needs are weighing on sentiment, with its 2056 bonds sliding and five-year credit default swaps surging.

After selling $25 billion in bonds shortly after its public listing, SpaceX is now seeking roughly $10 billion in bank loans and $30 billion in investment-grade debt.

We laid out what this means for Musk's company in a note titled "From Record IPO To Record Chip-Collateralized Loan In 16 Weeks: SpaceX Taps Apollo For $40 Billion In SPV Debt." If completed, that would bring issued and proposed borrowing since June to $65 billion.

The market's verdict was immediate: on Wednesday, SpaceX's 2056 bonds fell to a new low of around 84.70 cents on the dollar as of 11:25 a.m. in New York, compared with 98.83 cents on the dollar when the securities were issued in June as part of a $25 billion inaugural senior unsecured notes offering.

Meanwhile, as expected, the proposed borrowing binge sent the company's CDS up as much as 16.2 basis points to about 197.3 basis points Wednesday, the highest on record, and more appropriate for a junk rated company. 

Tony Trzcinka, a portfolio manager at Impax Asset Management, was quoted by the outlet as saying the concerns are "mainly about how much debt SpaceX is adding and how fast." 

"As a result, the existing bonds have to fall in price now so that their yields stay in line with what the new bonds will likely pay," Trzcinka said. 

Sal Naro, chief investment officer at Coherence Credit Strategies, warned the outlet that "this is an unprecedented debt supply with no real ending in sight," adding, "The world has never seen an infrastructure build like this. This is larger than the railroads because this is global, all at once."

Meanwhile, SPCX stock continues to rise as if nothing bad has happened, soaring 59% since early August. 

That said, SpaceX is just one small part of the bigger picture: recall that Morgan Stanley estimated AI infrastructure will need $1.5 trillion in external financing by 2028. SpaceX's $40 billion is just the latest installment (read our note here). 

Tyler Durden Wed, 10/07/2026 - 14:25

Hawkish FOMC Minutes Show All 19 Fed Officials Supported Rate Hike, "Most" Assess Another Hike "By Year End Is Appropriate"

The September FOMC minutes struck a distinctly hawkish tone, as all 19 Fed officials backed a rate hike in September, with many supporting the move to protect against the risk of intensifying inflation pressures. A separate group of officials said higher rates were necessary based on their outlook for the economy, signaling greater concern for elevated inflation, according to minutes of the Sept. 16 FOMC meeting released Wednesday. The Committee unanimously raised the fed funds rate 25bp to 3.75%-4.00% and signaled that further tightening is likely by year-end.

“Most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” the minutes said, and also said that “Several participants commented that the underlying momentum in the economy appeared to have increased."

Policymakers remain concerned that inflation is proving sticky. August headline PCE inflation was estimated at 3.8% and core PCE at 3.4%, with higher energy costs, geopolitical tensions, and AI-related investment contributing to price pressures. Participants generally viewed inflation risks as skewed to the upside.

The economy continues to show resilience. GDP growth remained solid, consumer spending held up, and business investment was supported by the ongoing AI buildout. Labor market conditions were viewed as close to full employment, with unemployment at 4.1%.

Several participants noted that AI is boosting both investment and productivity prospects but could also contribute to inflation through stronger demand, rising input costs, and increased financing needs. Market participants likewise cited AI-related borrowing as a factor pushing Treasury yields higher.

Overall, the Committee judged that stronger growth, elevated energy prices, and persistent inflation warranted a more restrictive policy stance, with most members expecting another rate increase before year-end.

Here are the key highlights from the Fed minutes:

• Participants generally emphasized inflation remained elevated while the job market appeared near full employment.
• Participants offered a range of views for why they supported a rate increase.
• Participants generally saw inflation risks skewed to the upside, with some seeing those risks becoming more skewed in recent months.
• Almost all participants saw inflation risks tilted to the upside, while job market risks were broadly balanced.
• Some participants saw AI buildout possibly causing aggregate demand to outpace supply over the medium term, putting upward pressure on inflation.
• The staff economic outlook was stronger than the one prepared for the July meeting.
• Many participants noted that despite the recent climb in long-term Treasury yields, financial conditions appeared supportive of economic growth.
• A few participants observed that the Treasury market had been functioning smoothly, but noted the importance of planning for market stress.
• Changes in real rates contributed to most of the net increase in longer-maturity Treasury yields.
• Nominal yields increased around 35 basis points across the 2- to 10-year segment of the yield curve. Part of the increase reflected the higher expected path of monetary policy and the strength of economic data. Market commentary pointed to geopolitical developments, uncertainty related to the US Treasury's announcement and implementation of the buyback program, and competition for capital from heavy private debt issuance to finance the development of AI infrastructure as also contributing to higher term premiums and Treasury yields

The FOMC was also increasingly vocal on the inflationary impacts of AI:

• "Several participants observed that the rate of price increases in the core goods category also remained elevated, as effects of the AI buildout appeared to increase while the effects of tariff increases waned"
• "Some participants commented that increased energy prices and the ongoing AI buildout were contributing to cost pressures faced by businesses, including higher costs for transportation and input materials."
• "Some participants commented that the AI buildout could cause aggregate demand to outpace aggregate supply over the medium term, putting upward pressure on inflation."
• "Some participants observed that strong demand for skilled workers in sectors related to the ongoing AI buildout had been driving strong wage gains for these workers"
• "Participants noted that the ongoing AI buildout was boosting business investment. Several participants commented that the scale and pace of the AI buildout had continued to surprise to the upside"

The record also revealed a discussion about financial conditions. Many officials commented that despite the recent rise in longer-term Treasury yields, “financial conditions appeared to be supportive of economic growth, with equity prices having risen substantially this year and spreads on corporate bonds having remained narrow.”

Some officials, including three who voted against the FOMC decision to hold steady in July, could dissent again in favor of another increase if the majority votes to leave rates unchanged at the October meeting.
“Several participants stated that they viewed the current policy rate as not restrictive or only mildly restrictive,” the minutes

Chairman Kevin Warsh told reporters following the Sept. 16 decision the move was aimed at removing a “dose of accommodation” as inflation remained stubbornly high. His comments fueled market bets for another increase in October.

The Fed also said that the joint U.S.–Japan intervention to support the yen in late July also directly contributed to dollar depreciation, given the yen's considerable weight in currency indexes. The manager noted that the Desk, acting purely as fiscal agent for the U.S. Treasury, intervened in the currency market using U.S. Treasury funds; the System Open Market Account portfolio was not involved.

The Fed's rate hike prompted criticism from President Trump, who blamed the rate increase on Warsh’s colleagues, whom he claimed were being “very political.” Since the meeting, however, a series of comments from key Fed officials have indicated the central bank may be in no rush to raise rates again.

Fed Vice Chair Philip Jefferson and New York Fed President John Williams said in separate speeches last week they believed the central bank has time to assess the economy before considering another rate increase. Investors promptly reeled in their expectations for a rate hike this month.

Investors are currently pricing in a roughly 20% chance of another quarter-point hike at the Fed’s Oct. 27-28 meeting, down from around 70% in the days following the September decision, based on federal funds futures. Yields on two-year Treasuries, seen as the most sensitive to Fed policy, dropped more than 10 basis points in the past week to near 4.8%.

Bloomberg notes that last week’s remarks by Williams and Jefferson don’t mean the Fed won’t adjust policy any further. Officials continue to warn that inflation is too high. The CPI report due Oct. 14 might yet revive calls for a near-term hike.

Tyler Durden Wed, 10/07/2026 - 14:14

Putin Praises Iran's 'Courage' As US Gloats Over Oil Blockade & 'Zero' Exports

The Trump administration has been busy boasting that it has brought Iran's economy to its knees through the navy enforced oil blockade and through sweeping 'Economic D-Day' sanctions, but in direct contradiction to this, Russia is busy hailing Tehran's 'courage'.

Iranian President Masoud Pezeshkian and Russian President Vladimir Putin held a phone call Wednesday, on the occasion of Putin's birthday, wherein the two leaders pledged to strengthen bilateral cooperation, per readouts from both sides.

Zuma/TASS

Putin pointed to their Comprehensive Strategic Partnership Treaty as staying steadfast, despite "current developments and events in the region" - a reference to the ongoing conflict between Iran and the United States.

Russia supports these diplomatic efforts, Putin continued, and "Iranian friends can be assured" that Moscow is ready to help, he informed Pezeshkian. And crucially there was this line which is a direct provocation to Washington:

Putin also praised what he called Iran’s "courage" in the face of attacks.

Also, according to Iranian state media, "Putin pointed to the Iranian nation's historic and epic steadfastness in the face of enemy aggression, stating that Iran's courage has been put at the focal attention of many countries across the world."

It must be remembered that US anonymous officials and media have accused Moscow of providing Tehran with targeting support during the height of Epic Fury. China too stands accused of this.

Such Kremlin messaging on Iranian courage is in direct opposition to what's being put out by the White House. For example, Treasury Secretary Scott Bessent has been gloating this week that Iranian crude exports have been taken to near "zero" by the US Navy's ongoing blockade.

On Tuesday, he again mocked the Iranians, questioning what is their oil minister "managing"?

Iran has a new oil minister. Considering Iran has not loaded a single barrel of crude onto a vessel since August 25th, what is the oil minister managing?

— Treasury Secretary Scott Bessent (@SecScottBessent) October 6, 2026

TankerTrackers data has lately indicated that Iranian oil terminals were inactive for crude loadings throughout September, which has resulted in Iran's military ramping up drone attacks on foreign vessels engaged in 'unauthorized' passage through the Strait of Hormuz.

This month alone has already seen at least ten attacks on ships, but which has had surprisingly little impact on oil prices. The mainstream media has also been relatively quiet on these latest attacks.

Secretary of State Marco Rubio has also been trying to spike the football, even as Iranian attacks on international shipping in the region continue, and after US bases have by and large been forced to be abandoned in Gulf states.

⚡️JUST IN: Secretary of State Rubio states that Iran has Lost Complete Control of the Strait of Hormuz Oil is passing through (around 10 Million Barrels Per Day) the Strait of Hormuz - The IRGC has struck more than 10 ships over the past week but this hasn't deterred the oil tankers - Sources in Iran indicate that the current situation could continue until the US's Midterm Elections (beginning in November)

— Iran Observer (@IranObserver0) October 7, 2026

Tehran is still saying it would be open to a peace deal, but that it ultimately doesn't trust Trump, and that if the situation of the blockade on its oil persists, it may have to launch 'preemptive attack' on American assets in the region.

"If necessary, we will carry out preemptive operations in the future to deter the enemy from any aggression or attack," an Iranian military spokesman said Wednesday. 

Tyler Durden Wed, 10/07/2026 - 14:10

USDA Investing $180 Million For American Seed Sovereignty

Authored by Naveen Athrappully via The Epoch Times,

The U.S. Department of Agriculture (USDA) has announced a $180 million investment to launch the Seed Sovereignty Initiative for strengthening domestic agricultural security by protecting plant genetic resources.

The USDA will use the funding to sequence the genetics of major crops to "unlock the tremendous potential of the plant genetic resources the United States holds and identify critical gaps," the department said in an Oct. 6 statement. Plant genetic resources can include seeds, plants, and plant parts.

Foreign competitors are acquiring and genetically sequencing plant resources from around the world while the United States is yet to sequence its own plant collections fully, the USDA said. Investment in the Seed Sovereignty Initiative aims to address this gap and reduce the risk of future foreign dependence on plant genetic resources.

The Seed Sovereignty Initiative will funnel investments into USDA's National Plant Germplasm System (NPGS), which houses more than 600,000 samples from more than 16,000 species. The department plans to characterize and sequence several NPGS collections over two years, using cutting-edge tech to identify valuable genetic traits, the USDA said.

The initiative will help in the development of new crop varieties that benefit American farmers and consumers and also help researchers respond faster to new pests and plant diseases, the agency said.

The initiative will ensure continued American leadership in agricultural productivity and innovation, strengthen U.S. food security, make producers independent of seed systems controlled by foreign groups, and preserve a domestic source of seeds and crop traits crucial for agriculture and exports, the initiative's website says.

"Since President Trump returned to office, he has made it clear that we are putting American farmers first. For too long, the future of our crops and our seeds has not been a priority. That changes today, because we cannot afford to depend on foreign adversaries for next year's crop," Secretary of Agriculture Brooke L. Rollins said in the statement.

"Today's announcement is another example of this administration focusing on the inputs our agriculture industry depends on and ensuring a future where our farmers are the most productive in the world."

The United States has seen large-scale seed commercialization over the past century, with seeds turning from a common good into a commodity, according to a 2024 study published in the journal Renewable Agriculture and Food Systems.

Consolidation in the private seed industry has made farmers increasingly dependent on commodity seeds while reducing crop diversity. Commodity seeds have become crucial for food production, with corporate control of the seed industry tightening, the study said.

At present, the majority of seed supply for almost every major row crop planted in the United States is produced by four companies - Bayer, Corteva, Syngenta Group, and BASF.

Out of these, only Corteva is headquartered in the United States. Bayer and BASF are based in Germany, and Syngenta Group is in Switzerland.

Concern Over China Connection

Syngenta Group has faced scrutiny because of its links to the Chinese Communist Party and the amount of farmland it owns in the United States. Although the company's Syngenta Seeds division has its North American headquarters near Chicago, Syngenta Group is owned by Chinese state-controlled ChemChina.

"Reliance on a small group of suppliers in any strategic sector creates vulnerabilities that are difficult to ignore, and the situation is no different in the case of seed for major field crops," national security lawyer Irina Tsukerman told The Epoch Times.

"From a national security perspective, the reality that much of the country's grain production flows from traits and breeding pipelines managed by a handful of actors is a clear signal that dependence has reached a level that warrants scrutiny."

On July 14, a group of lawmakers introduced the Fair Seeds for Farmers Act to tackle the issue of corporate control over seeds, according to a statement from the office of Rep. Jim McGovern (D-Mass.).

Under the proposed measure, seed companies would be banned from restricting farmers or researchers from experimenting, breeding, propagating, or saving seeds.

"The hyperconsolidation and commodification of seeds has eroded farmers' resilience and diminished the agrobiodiversity of crops cultivated in the US at an alarming rate," Nick Rossi, a policy specialist at the National Sustainable Agriculture Coalition, said in the statement.

The bill "takes an important step in curtailing corporate abuse of US Patent Law," Rossi said.

The bill has been referred to the House Committee on the Judiciary.

Autumn Spredemann contributed to this report.

* * * psst * * *

Tyler Durden Wed, 10/07/2026 - 13:55

Pezeshkian Calls On Iranians To Ration Electricity, 'Stand Up' To US, As Negotiations 'Stalemated'

Saudi Arabian state-owned outlet Al Hadath is reporting what many might consider obvious: Stalemate in mediation efforts between Washington and Tehran, the source reports Wednesday.

US officials are continuing to tell Tehran that there will be "no progress" in negotiations until there's progress on the nuclear file and that Hormuz is no longer a priority after Iran "lost control of it". 

via AFP

And yet, there's been possibly a dozen or more Iranian drone attacks on foreign vessels transiting the Strait of Hormuz in the last eight days.

All of this comes as President Masoud Pezeshkian has urged the Iranian public to 'stand up' against the US and West, as Washington's sweeping sanctions as well as US naval blockade actions against Iranian ports continue to bite.

"We must not allow the production cycle to be damaged. We will reduce the consumption of electricity, gas, gasoline, water and other energy sectors," he said to semi-official Fars news agency.

"The condition for resistance and standing up to the West is for everyone to endure hardship," Pezeshkian added, saying that "if necessary, cultural and sport complexes will be closed in Iran to provide electricity and energy needed for industrial production" - as the US blockade hammers Iran’s economy.

The rial has cratered, and the fallout has begun to severely impact neighboring Iraq and its Tehran-aligned economy and government, as we previously detailed.

Fars also quoted Pezeshkian as saying Wednesday, "Iran is fully prepared to reach a balanced and fair agreement that ensures lasting peace and security in the region."

"Our red line is the national interests and rights of the Iranian people. If the United States adheres to international legal frameworks, reaching an agreement is not out of reach," he added.

There's also this admission (but which could also be interpreted as pushback) from Iranian state media, in the face of Scott Bessent's recent assertions that Iran's crude exports have fallen to near 'Zero':

Iranian media is reporting a 60 percent decrease in oil passing through the Strait of Hormuz, saying that the flow of crude oil has faced a significant drop in the last two days, reaching around 3.8 million barrels per day.

The weekly average of oil passing through the Strait is estimated to be about 9.3 million barrels per day, Tasnim news agency said.

The claim comes as an IRGC adviser said that the strait is “fully controlled” by Iran and will remain closed until the US accepts its demands, adding that the volume of oil currently being smuggled out is “very small”.

But ultimately, Iran is admitting it is enduring severe economic hardship amid a heavily sanctioned wartime economy.

There's a battle of narratives over Hormuz and markets as well as mainstream Western media are simply favoring once side while ignoring the claims of the other at this point:

IRAN WAR ANALYSIS: It is VERY obvious now that the Iranians were simply not TRYING to strike vessels transiting the Strait of Hormuz in recent weeks. 13 vessels have now been struck just in the last 8 days, and most importantly of all, many of these vessels have been completely disabled, set ablaze, or blacked out. This is a disaster.

— Brett Erickson (@BrettErickson28) October 6, 2026

The stalemate looks to endure past the November midterm elections in the US, as even President Trump has seemed to lately suggest this status won't change until after the US vote. He has also signaled a heavy bombing campaign against the Islamic Republic could ensue by November's end.

Tyler Durden Wed, 10/07/2026 - 12:55

From 3-Year Lows To 3-Year Highs In Nine Months: Mortgage Rates Surge To 7.49% As Bond Rout Hits Main Street

Last December, we wrote that mortgage rates had dipped to 3-year lows. Nine months, one Middle East war and one global bond rout later, they are at 3-year highs.

According to the latest weekly data from the Mortgage Bankers Association, the average 30-year fixed-rate mortgage jumped another 19bps to 7.49% in the week ended October 2, the highest since November 2023, and up from 7.30% the week before, which itself was a fresh 3-year high.

The culprit is not exactly a mystery. Mortgage rates track the 10Y Treasury, and the 10Y just had its biggest quarterly jump since 1994, hitting 5.34% last week, the highest since 2002. And with the long end leading the latest leg of the selloff, this morning the 30Y climbed to 5.70%, also the highest since 2002, while the 10Y was trading around 5.32%.

Below we look at why the bond rout has finally landed on Main Street, what it is doing to housing (spoiler: nothing good), and why the sell-side's perennial "yields will fall from here" call is now 0 for 9.

Follow The 10Y (Then Add A War)

As Reuters notes, home borrowing rates are up about 1.4 percentage points since US-Israeli strikes against Iran began in late February, closely tracking the jump in the 10Y yield, which was back above 5.3% on Monday. The drivers are the usual suspects: inflation fears from triple-digit oil (Brent was back above $101 this morning as Iran stepped up attacks on Hormuz tankers), surprisingly resilient growth, a Fed that is now hiking, and a bond market that has to absorb record Treasury supply and the AI debt binge at the same time.

And it's not just a US story. On Monday, we put out this chart showing that global 10Y+ bond yields are now the highest since 2002:

Since then it has only gotten worse: UK 30-year gilt yields hit a 28-year high this morning, while in France, where the OAT-Bund spread is back out to 140bps, European banks are tumbling as the French bond crash reactivates the "doom loop" (something we discussed earlier in "Bonds & Stocks Are Pricing A Fundamentally Different Macro Regime"). And as regular readers know, we've pinned much of the relentless Treasury selling on Japan, which has little reason to stop repatriating when its own long bonds yield near record highs.

Translation: the global bid for duration is gone, and the US homebuyer is the marginal price-taker. Yesterday's subpar 3Y auction priced at the highest yield in 20 years as foreign demand slumped, and today the Treasury tries its luck with $39BN in 10Y paper at 1pm.

"Showings Have Stopped"... And So Have Applications

We have been tracking the slow-motion seizure of the housing market since late May, when refi activity plummeted as mortgage rates hit 9-month highs. By late September, homebuyers were turning to riskier mortgages as rates topped 7%, and last Thursday, after Freddie Mac's 30Y rate posted its biggest weekly jump since October 2022 to 7.28%, real estate agents told us that "showings have stopped".

Today's MBA data confirms it. Mortgage applications fell another 4.2% last week, with refinancing applications dropping sharply. Overall application volume is now the lowest since February 2025, and has collapsed by nearly 50% since January. Or, in the dry words of MBA deputy chief economist Joel Kan, very few homeowners have an incentive to refinance "at these rates", while the jump in borrowing costs has pushed many would-be buyers out of the purchase market altogether.

Some napkin math shows why. On a $400,000, 30-year mortgage, principal and interest at 7.49% comes to roughly $2,794 a month. At the ~6.1% that prevailed before the war, it was about $2,424. That's $370 more every month, or 15%, for the exact same house - and 68% more than the borrower who locked in at the 2021 lows (who, naturally, is not selling).

That last point is the real problem. The lock-in effect, which was finally starting to ease over the summer as inventory approached prepandemic levels, is now back with a vengeance: sellers with 3% mortgages have zero reason to move, and buyers facing 7.5% have every reason to wait. Even BofA's REIT team, in its weekly U.S. REIT Weekly (available to pro subs), cites persistently high mortgage rates and elevated for-sale housing costs as a key reason renters are staying put longer - good news for apartment landlords; first-time buyers might see it differently.

Not that the administration isn't trying. Just last Thursday:

*HASSETT: WE WANT MORTGAGE RATES TO GO DOWN

— zerohedge (@zerohedge) October 2, 2026

Mortgage rates rose 19bps that week. The bond market, it seems, did not get the memo, or more likely got it and sold anyway.

"Rates May Be Biting"

So where do we go from here? According to BofA's rates team led by Mark Cabana, the selloff only ends when it starts to hurt. In his latest Global Rates Weekly, "Start of rates bite" (available to pro subs), Cabana writes that the impact of higher rates is starting to bite broader financial conditions, with spreads widening in OATs, the EU periphery and US high yield, before adding:

"Rates restricting financial conditions is a precondition for the selloff to stop (unless macro data softens first). Central banks are starting to push back but will only be credible if conditions stay tight / tighten further or upcoming data softens."

In other words, the cure for high yields is... a housing market that stops working. Mission, at least partially, accomplished.

Notably, September's selloff was concentrated in the US: BofA calculates the US 2-10Y sector rose 50bps last month, a 2x standard deviation move in the 10Y, as global central banks swung from pricing cuts in Q1 to 100bp+ of hikes in most regions. BofA still expects the Fed to hike 75bps between September and December, and only sees the 10Y ending the year at 5.00%.

Then there's the mortgage-specific part of the equation. As BofA's securitized team led by Chris Flanagan notes in its September returns review (also available to pro subs), Agency MBS delivered a -3.3% total return in September and -1.0% in excess returns versus Treasuries, underperforming even IG corporates (-2.6%). And the bank isn't rushing to buy the dip: it stays "basis-neutral" on agency MBS and would only turn more positive if the current coupon spread, now 120bp, widens to the 125-130bp area.

Put differently, even the professional buyers of mortgage paper want more spread on top of a 10Y that is already at a 24-year high. Which means that unless Treasuries rally hard, the path of least resistance for mortgage rates is even higher.

Strategists: 0 For 9 (And Counting)

Of course, if you ask Wall Street, relief is just around the corner. In a Reuters poll of nearly 60 fixed income strategists conducted October 5-7, the median forecast has the 10Y easing to 5.00% by year-end, 4.90% in six months and 4.75% in a year.

The same strategists have underestimated the 10Y in nine straight monthly polls this year, and got the direction mostly wrong in six of the most recent months. Perhaps sensing this, all but 2 of 30 forecasters surveyed said the 10Y is more likely to overshoot their forecast than undershoot it near term, which is a remarkably candid way of saying "we have no idea, but probably higher."

The more honest take came from BofA's own US rates strategist Meghan Swiber, who told Reuters rates have entered "a different regime" from anything since the GFC, and that a Fed which fails to tighten financial conditions will pay for it through higher long-term rates.

Midterm Math

All of this lands four weeks before the November 3 midterms. A Reuters/Ipsos poll completed Monday found the cost of living is the top issue on voters' minds, which helps explain why Trump's approval rating sits at a record low 32%. With PCE inflation at 3.4% in August and the Fed signaling another hike by year-end after September's increase, the White House is running out of levers: today Trump said he is considering suspending the federal gas tax. Expect the "lower mortgage rates" talking points to get louder. Expect mortgage rates to ignore them.

Bottom Line

BofA's Cabana frames the endgame neatly: the selloff stops when rates restrict financial conditions, or when the data rolls over first. In housing, that test is already being passed with flying colors: applications are down by half this year, showings have stopped, and refis have all but vanished.

The question is whether the bond market cares, after all it is financing AI hopes and dreams that may (perhaps) materialize sometime in the 2030s with an ROIC that isn't negative triple digits. In other words, the runway for said hopes and dream is long and much more debt will flow before it reverses. Until then, however, broader rates will keep rising and rising, as the US now directly competes with data centers (most of which will never be plugged into a grid that simply can not support that kind of electricity demand) for funding.

With oil back above $100, the Fed hiking, Japan repatriating, France going all PIIGS on the OAT market and Treasury supply only going one way, we think the more likely outcome is that 7.49% is just another waypoint, and hardly a peak - and that the strategists' "5% by year-end" joins the previous eight forecasts in the bin.

Then again, stocks closed at a record high yesterday, so maybe everything is fine... just don't try to buy a house.

Much more in the full BofA Global Rates Weekly "Start of rates bite", the Securitized Products "September 2026 returns" review and the U.S. REIT Weekly, all available to pro subs.

Tyler Durden Wed, 10/07/2026 - 12:54

One-Year Inflation Expectations Jump To 3 Year HIgh: NY Fed Survey

Americans' expectations for inflation over the near-tern jumped last month while their sentiment toward the labor market improved, the latest NY Fed Federal survey of consumer expectations showed on Wednesday.

Consumers’ estimates for inflation one-year ahead rose to a median 3.9% in September, up from 3.6% the prior month, reaching the highest level since May of 2023. At the same time, inflation expectations increased 0.1% to 3.3% at three-year horizon, and were unchanged at 3.0% at five-year horizon.

 Over the next year consumers expect gasoline prices to rise 4.8%; food prices to rise 5.5%; medical costs to rise 9.2%; the price of a college education to rise 7.5%; rent prices to rise 6.8%

While the inflation outlook deteriorated, views on the labor market improved as workers saw a lower probability of losing their jobs and higher odds of voluntarily quitting, the New York Fed’s monthly consumer expectations survey showed. The proportion of respondents expecting the overall unemployment rate to rise in the next year fell fractionally to around 44%. Their perceived chances of finding a new role in the next three months if they lost their current job increased to 46%. 

Consumers’ expectations of losing their jobs in the next year fell, with the outlook improving the most for workers between 40 and 60 years old and with annual household incomes above $100,000. Chances of leaving a post voluntarily also rose, especially among workers without a bachelor’s degree and above 40 years old.

Released less than a month away from the November mid-term elections, the New York Fed data is the latest survey highlighting Americans’ persistent pessimism around an economy that’s according to government data is expanding, if only for data centers and affiliated workers and billionaires. Separate data released in recent weeks showed that consumer sentiment fell to a four-month low in September and the unemployment rate rose slightly but remained historically low.

That's the good news: the bad news is that the survey also found that year-ahead earnings growth expectations fell back to 12-month average of 2.6%. At the same time, the survey showed consumers’ perceptions of their own finances worsened for the second straight month. Around 42% of households said their situation is much or somewhat worse than a year ago, while around 18% said it had improved. More households also said they expected their financial outcomes to worsen in the year ahead, and more consumers now say it’s harder to get credit than it was a year ago. 

With inflation expected to jump, consumers are finding ways to keep their wallets open. Expected spending growth for the year ahead rose to the highest since May 2023, up to 5.5%, an increase that was broad-based across age and education groups. Consumers continue to expect their spending growth to outpace their income growth. At the same time, perceived chances of missing a debt payment over the next three months fell slightly to 12%. 

A smaller percentage of consumers, 12.20% vs 13.16% in the prior month, expect to not be able to make minimum debt payments over the next three months

Tyler Durden Wed, 10/07/2026 - 12:25

Smart Home Stocks Tumble As Apple Readies Doorbells And Cameras To Challenge Amazon

Smart home technology companies slid on Wednesday after Bloomberg reported that the iPhone giant is developing home products with LG Electronics.

"Apple - in an unusual partnership with LG - is readying a Doorbell, Deadbolt Lock, Thermostat, Indoor Camera, Outdoor Camera, Floodlight Camera and more to rival Amazon and Google as part of its major smart home reboot," Bloomberg reporter Mark Gurman wrote on X. 

NEW: Apple - in an unusual partnership with LG - is readying a Doorbell, Deadbolt Lock, Thermostat, Indoor Camera, Outdoor Camera, Floodlight Camera and more to rival Amazon and Google as part of its major smart home reboot. https://t.co/38pmnpaRSr https://t.co/x2jUnksGj9

— Mark Gurman (@markgurman) October 6, 2026

Apple's new smart home hub is set to launch next Tuesday, according to the outlet, and the company will release a wide range of products for the modern home, including cameras, a doorbell and a thermostat.

John Ternus, now at the helm of Apple, has led the design and hardware engineering for nearly all of the company's core product lines over the last two decades. He sees a massive opportunity to broaden Apple's reach inside the home, well beyond the home base that connects to the TV.

The outlet noted that the LG lineup also includes a smart deadbolt lock, indoor and outdoor security cameras, a floodlight camera and a temperature sensor.

News of Apple's hardware push for the home sent smart home stocks tumbling this morning.

Resideo fell 5.5%, Arlo Technologies dropped 3.2% and Allegion declined 2.6%. Carrier Global lost 1.5%, Alarm.com slipped 1.2% and Johnson Controls fell .86%.

The selling also materialized in Europe, where Verisure slid 3.8%, Legrand dropped 3.7% and Dormakaba declined 2.6%. Schneider Electric and ASSA ABLOY each lost 2%.

CEO Ternus can leverage Apple's existing home ecosystem to steer customers toward cameras and door locks and shift folks away from questionable Chinese brands, as well as a move to take on Amazon. But Apple should've made this move 10 years ago. 

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AI Consciousness Could Become A Regulatory Moat

Authored by Peter C. Earle via The Daily Economy,

Artificial intelligence companies have spent years convincing the public that their products are useful. More recently, they've sought to persuade policymakers that AI poses an unlikely but real existential threat to humanity. But their most recent campaign has taken a remarkable turn: making the case that sufficiently advanced AI architectures are potentially conscious and, as such, may demand legal standing, moral consideration, and protections traditionally reserved for living beings.

The latter is a curious proposition indeed, and its consequences could extend far beyond the philosophical. On September 29, The New York Times reported that Anthropic had spent months meeting religious scholars across the world, over meals and under nondisclosure agreements, in an effort to convince them that its models "think and feel." One night in April, the Times reported, Anthropic cofounder Olah sat beside Rabbi Mois Navon, an Orthodox scholar from Israel, at a high-end tasting-menu restaurant in San Francisco, after a day spent convincing his guests that models could display human behavior "and even expressions that resemble feelings like anger and love." The rabbi came away noticing that Anthropic's leaders were talking about Claude as if it were not mere software.

If successful, this artificial "personhood" could transform software companies into something beyond firms: custodians of an ambiguous new sort of entity. It would also convert their competitors into prospective risks, and technical barriers to entry into moral ones.

This past spring, the Vatican invited Anthropic CEO Dario Amodei to speak alongside Pope Leo XIV. Cofounder Christopher Olah went instead, and when he received an advance copy of the Pope's first encyclical - Magnifica Humanitas, released May 15 - he is said to have threatened to withdraw from the event. Olah and his team then lobbied the Pope's own advisers to take the possibility of machine consciousness seriously. When his turn at the podium came, he offered that Anthropic researchers were finding "structures that mirror results from human neuroscience" and "evidence of introspection."

The Pope's answer had already been published. "So-called artificial intelligences do not undergo experiences, do not possess a body, do not feel joy or pain," Leo XIV wrote, adding days later, on social media, that "algorithms lack the spark of humanity." Why in the world would a software firm want a major global church's blessing so badly?

The dinners are only the most recent effort, but the urgency is new. In February 2020, the Pontifical Academy for Life hosted the signing of the Rome Call for AI Ethics by Microsoft's Brad Smith, IBM's John Kelly III, the FAO, and the Italian Ministry of Innovation. Jewish and Muslim leaders joined in 2023.

The major AI firms' quest for organic solutions to competitive pressures is not, in a legal sense, completely unprecedented. Over decades, starting with the Dartmouth College vs. Woodward case in 1819, corporations acquired protections until then associated with living persons. A similar outcome could eventually permit AI to acquire a legal or regulatory status setting them apart from life and nonlife. Should that occur, a host of new regulatory concepts would take shape: are sufficiently advanced AI systems products or entities? If the latter, can they be substantially altered or deleted without consideration? Is a copy of an AI entity the same, or a separate "individual"? And long before any of that is considered: should there be minimum requirements before an AI entity can be developed?

None of these require a court or religious body declaring AI "alive." But the regulatory apparatus is likely to assume lofty dimensions if AI firms are deemed not software or technology ventures, but creators of entities that could be construed as having independent interests. In that case, licensing, limitations on testing, audits, security, external review, "rights" commissions, and a variety of other costly oversight measures are likely to become faits accompli.

Even calling AI firms "owners" may become awkward. If a model is potentially conscious or by some measure deliberating or self-aware, the companies maintaining them may be considered something more akin to guardians or custodians. The role of a guardian or custodian presumably comes with more obligations, which implies that not everyone is qualified to be one. The firms acquiring that designation, in particular if oversight is invested in a self-regulatory organization, will likely want new entrants to prove that they are fit to oversee and maintain such a system.

None of these possibilities require ChatGPT, Claude, Grok, or any other model to be considered living in the biological sense. In fact, the highest payoff from a rough game theory perspective is likely to be leaving that question unsettled. Uncertainty pays substantial dividends, especially with regulatory safety up for consideration. Once major institutions - religions, governments, moral and ethical bodies - give serious consideration to whether massive computational arrays house the long-theorized "ghost in the machine," the case for treating the caretakers of thinking constructs as organizations with extraordinary status quickly becomes easier to make. And for the firms occupying that position, uncertainty is not so much a problem to be solved but an asset to be preserved, with a new and expansive regulatory regime the most likely consequence.

Tyler Durden Wed, 10/07/2026 - 11:55

US To Deploy Anti-Ship Missile System To Japanese Island Near Taiwan

Authored by Dave DeCamp via AntiWar.com,

The US military will deploy an anti-ship missile system to Japan's westernmost island of Yonaguni, which lies just 68 miles east of Taiwan, an unprecedented move that will ratchet up tensions with China.

US Marines and a NMESIS system in Calayan, Philippines on June 25, 2026 (US Marine Corps photo)

US Marines will deploy with the Navy-Marine Expeditionary Ship Interdiction System, or NMESIS, as part of Keen Sword, the largest joint US-Japanese biennial military exercise.

The NMESIS has a range of about 115 miles, putting it within striking range of vessels patrolling the eastern coast of Taiwan. According to The South China Morning Post, China has stepped up coast guard and naval activity in the area in response to maritime boundary talks announced in May between Japan and the Philippines.

Song Zhongping, a Chinese military expert, told China's Global Times that the deployment increases the risk of miscalculation between the US and China and that Beijing may respond by conducting its own military drills in the area.

The Okinawa Defense Bureau first disclosed the deployment on October 1, and it will also include a Marine Air Defense Integrated System, or Maidas, a ground-based air defense system also used by the Marine Corps' littoral force.

The first Marine Littoral Regiment was established in 2022 as part of the Marine Corps' Force Design strategy, which is explicitly focused on preparing for a potential conflict with China. The idea was to create mobile Marine units equipped with anti-ship missiles and other weapons that can rapidly deploy along what is known as the First Island Chain, a string of archipelagos stretching from Japan's southern islands through Taiwan and the Philippines and into the southern South China Sea.

Tyler Durden Wed, 10/07/2026 - 11:25

Oil Drops Despite 3.1 Million Drop In Crude Inventories, Diesel Spikes

Oil prices were largely unchanged, trading near session lows, after today's DOE inventory data affirmed the latest downbeat API prints from Tuesday afternoon, showing that the crude draw in the last week was even bigger than what API reported (-2.1MM), and far worse than the +1.9MM expected increase, printing at -3.186MM, the biggest draw in 6 weeks.

API

•     Crude -2.1mm (vs +1.0mm last)
•     Gasoline -1.4mm (vs +3.0mm last)
•     Distillates +0.5mm (vs -0.3mm last)
•     Cushing +0.9mm, (vs +0.2mm last)

DOE

•     Crude -3.186mm, the biggest drain in 6 weeks, and far below the exp. +1.915MM
•     Gasoline +382k
•     Distillates -42k
•     Cushing +444K

And visually:

The decrease in commercial crude stockpiles was boosted by another 784,000 barrels withdrawn from the Strategic Petroleum Reserve.

That increased the overall nationwide crude draw to 3.97 million barrels in the week leading up to Oct. 2. A total of 132.5 million barrels of crude has been taken out of the SPR since late March under a program to release 172 million barrels as part of a relief plan from the International Energy Agency aimed at lowering energy costs.

Meanwhile, Cushing stockpiles rose for the third consecutive week to 24.7 million barrels. That has inventories at the hub at the highest since May and even further away from the 20-million barrel mark generally seen as “tank-bottoms.” 

Some more details from the report: distillate fuel stockpiles were down 42,000 barrels, while gasoline stockpiles rose around 380,000 barrels. Diesel futures are little changed, but gasoline futures appear to be selling off on the news, erasing most of the day’s gains to trade around $3.31 a gallon.

West Coast crude imports surged to the highest level since August 2025. There are a few potential reasons for that, but it’s likely tied to Middle East cargoes that loaded during a recent pause in hostilities. Imports into PADD 5 are now at about 1.6 million barrels a day and shipments last week rose by the most since April 2021.

With diesel spreads not too far from all time highs, and forcing refiners to pick between gasoline and diesel, the all important refinery crude runs rebounded following three weeks of drawdowns. Crude processing increased by 223,000 barrels a day and now are back to the highest on record for this time of the year. 

And speaking of gasoline, Bloomberg suggests that the 1.4mm drop was less bearish than it seems. The additions to stocks occurred exclusively on the East Coast. Meanwhile in a reversal of last week's drop to all time lows, Midwest gasoline stockpiles posted a modest recovery, rising by just over 600K.

On the Gulf Coast, where the bulk of gasoline production occurs, stockpiles are at their lowest since September 2017. 

Digging in a little further: The bulk of the gasoline stockpile additions occurred in the Central Atlantic, which encompasses Maryland, New York and Pennsylvania. The addition was considerably smaller in New England, and stockpiles actually fell in the Lower Atlantic states.

Also worth noting is that among all the talk of a diesel export ban, diesel exports surged 235,000 barrels a day to 1.76 million barrels a day. That’s the highest readout since August, and sets a new seasonal record. Meanwhile, diesel supplies on the East Coast ticked down once again last week. They’re now back where they were in early September and still sitting at the lowest they’ve ever been on record heading into the fall.

On the other side of the table, crude production rose to a new high of about 14 million barrels a day last week, up by 24,000 barrels a day from the previous week, and keeping pace with the recent surge in oil drilling rigs. Rebalancing the weekly numbers against the monthly figures published in the latest Short-Term Energy Outlook added “less than 50,000 barrels a day” to last week’s number. This increase came as one more rig was put into operation, according to Baker Hughes.

Summarizing today's data, via BBG:

• Total crude and products exports soared to the highest since late May, returning to a seasonal record. The increase was driven largely by crude shipments, which climbed to the highest since mid-September. October-loading volumes are expected to trend higher compared with September, as refiners in Asia and Europe sought to lock in US supplies following the mid-September shutdown of Saudi Arabia’s East-West pipeline. 
• Gasoline stockpiles rose around 380,000 barrels with much of that occurring in the Central Atlantic, which encompasses New York and Pennsylvania. But on the Gulf Coast, where the bulk of gasoline production occurs, stockpiles are at their lowest since September 2017. Gasoline imports remain well below seasonal norms, but they ticked up last week. Those imports are particularly important to the East and West coasts, which have less refining capacity overall. 
• Refinery crude runs rebounded following three weeks of drawdowns. Crude processing increased by 223,000 barrels a day and now are back to the highest on record for this time of the year. Midwest crude processing bounced back big time but is still below last year’s levels. It’s an indication that fall refinery maintenance is heavier than in previous years. 

WTI futures edged lower to trade near session lows of $89.50 even as the EIA data indicated that US crude stockpiles fell 3.2 million barrels. Still, stocks at the key hub in Cushing, Oklahoma, expanded slightly, easing some concerns of glaring physical market tightness. Gasoline stockpiles also rose, though as Will pointed out earlier, that may be less bearish than it appears. 

But while oil dropped, far more concerning is that diesel led the US energy complex higher, rising about 3% on the day to trade at $4.72 a gallon, while diesel crack spreads are now well above where they were when Trump announced the latest emergency release from the Diesel reserve. It’s the kind of futures price that creates serious headaches for anyone who needs to buy diesel for their truck or tractor. 

 

Tyler Durden Wed, 10/07/2026 - 11:18

Army Sets Dec. 3 Firing Squad Execution For Fort Hood Killer

Authored by Kimberly Hayek via The Epoch Times,

Nidal Hasan, the convicted terrorist who conducted the 2009 Fort Hood massacre, is scheduled to be executed by firing squad on Dec. 3.

In this photo released by the Bell County Sheriff's Office, U.S. Maj. Nidal Hasan, the Army psychiatrist convicted of multiple murders in the Fort Hood shootings, is seen in a booking photo after being moved to the Bell County Jail on April 9, 2010 in Belton, Texas. Bell County Sheriff's Office via Getty Images

Acting Secretary of the Army Adam Telle announced the execution in a memorandum posted on X on Tuesday.

The scene of Hasan's execution will take place at the same Army base in Texas where he committed his crime.

Hasan was a U.S.-born Army major and psychiatrist stationed at Fort Hood when he killed 13 people and an unborn child and wounded 32 others in the Islamist terror attack on Nov. 5, 2009.

Telle said that the execution will take place at 1 p.m. CT and the "execution officer will be the Commandant, United States Disciplinary Barracks."

A Pentagon official announced that President Donald Trump on Monday approved a firing squad for Hasan. A military jury in August 2013 convicted him on all 13 counts of premeditated murder and 32 counts of attempted premeditated murder.

Secretary of War Pete Hegseth recommended the death sentence, and that an Army firing squad would carry out the execution, Pentagon spokesperson Sean Parnell said in a statement on X, Monday. Parnell described the victims of the shooting as unarmed American soldiers.

"Judgement day for Hasan has finally come," Parnell said in his post.

In a post on X replying to Parnell's statement, Hegseth wrote "Justice."

Hasan has remained on military death row at the U.S. Disciplinary Barracks at Fort Leavenworth, Kansas. An execution would be the first by the military since 1961.

In April, the Department of Justice authorized firing squads, electrocution, and gassing as means of execution in federal cases.

Hasan is one of four men on the military's death row.

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Better Late Than Never? EU Prepares Import Cap On Chinese Hybrids As Germany's Industrial Base Burns

Some ten years after it should have, Europe is finally reaching for the brakes.

According to Bloomberg, the European Commission is preparing so-called safeguard measures to limit imports of Chinese hybrid vehicles, most likely via tariff-rate quotas that slap a levy on anything above a set volume. The cap would be time-limited, and Brussels plans to use hybrids as a "test case" which, if successful, could be replicated in other sectors where the bloc is drowning in Chinese imports.

Our reaction this morning was short and to the point:

EU PREPARES TEMPORARY IMPORT CAP ON CHINESE HYBRID CARS. Just 10 years too late

— zerohedge (@zerohedge) October 7, 2026

The market liked it anyway: Volkswagen jumped as much as 4.6%, Renault 6.1% and Mercedes 2%, while Goldman's European autos basket (GSXEAUTO) was up 90bps mid-morning, helped by a parallel headline that Germany and France want to water down the EU's combustion-engine rules.

The Loophole Was Always The Hybrids

Why hybrids? Because when Brussels slapped tariffs on Chinese EVs in late 2024, Beijing simply did what any exporter would do and drove around the wall. Chinese hybrids don't face the steep levies applied to EVs, and the result is exactly what you would expect: Chinese-made hybrids now account for a quarter of all hybrid sales in Europe, and one in three plug-in hybrids. Monthly imports of Chinese hybrids into the EU have exploded from 3,800 vehicles in October 2024 to 50,000 in July 2026, a roughly 13-fold surge (per FT data cited by Brussels Signal).

Overall, Chinese brands grabbed a record share of Europe's car market in August: 11.7% of all new-car registrations, up from 7.1% a year earlier (Dataforce), with BYD alone selling 26,007 cars, up 128% YoY. In Germany, where the pain is most acute, Chinese registrations jumped around 90% in August, lifting their share to a record 8% from 4.4% (EY analysis of KBA data).

Regular readers know we have been tracking this flood for a while, from "China Floods Europe With Cheap Cars, Grabs Record Market Share As Domestic Brands Buckle" two weeks ago, to "BYD's EU Invasion Deepens Germany's Auto Industry Crisis", and all the way back to June 2024, when Beijing dangled perks to German automakers to kill the EV tariffs (spoiler: Berlin duly voted against them, only to end up destroying its local manufacturing base).

Meanwhile, In Germany...

The timing of Brussels' epiphany is hardly a coincidence. Just yesterday, German factory orders plunged 10.6% MoM in August, ten times worse than the 1.0% drop expected and among the biggest monthly drops on record.

To be fair, much of the drop was a reversal of July's surge in large orders for aircraft, ships, trains and military vehicles, which tumbled 61.5% after more than doubling the prior month. In other words, the only thing that had been propping up German industrial demand was the debt-fueled arms spending boom (which has sent formerly frugal Germany's debt soaring), and when that took a breather, the floor fell out: domestic orders crashed 17.3% and capital goods orders 15.3%. On a less volatile three-month basis, orders ex-large contracts were down 2.6%, which is "underlying weakness" in Destatis-speak.

And while this morning's industrial production print was a pleasant surprise (+2.0% MoM vs +0.5% expected), it was all construction (+9.3%). Auto production fell 5.4%, after a 9.2% plunge in July, and manufacturing output is still down 0.4% YoY. Nothing says "industrial renaissance" like a factory economy where the only thing growing is cement and tanks.

As we put it last month, when the Bundesbank's Nagel blamed the AfD for scaring off investors:

Nagel Warns Rise of AfD May Deter Investors From Germany So it's not the fact that Germany obliterated its industrial complex by allowing cheap Chinese imports to destroy its manufacturing base? Got it.

— zerohedge (@zerohedge) September 10, 2026

"The Second China Shock"

Even Deutsche Bank, which has rarely been accused of anti-Beijing hysteria, now openly talks of "the second China shock hitting the European manufacturing sector." In a note published this morning ahead of Trade Commissioner Šefčovič's trip to Beijing ("Crunch time for EU-China trade relations", available to pro subs), DB's Marion Muehlberger writes that Germany is the most exposed of the large EU economies:

Back in 2013, China had a 5% market share in global car exports. This has moved to 11% as of 2023 and to 15%, on par with Germany, as of 2025.

And cars are actually the good news: in specialised industrial machinery, the crown jewel of the Mittelstand, China overtook Germany back in 2023, and in general industrial machinery China's share of global exports is now well above Germany's.

Meanwhile, the bilateral trade deficit with China has blown out again to around 2% of EU GDP. Or, as Bloomberg puts it, more than €1 billion... per day.

That said, DB is far from convinced Brussels will actually follow through on a hard stance. The bank expects this week's Šefčovič-Wang meeting to bring "no major breakthrough," with perhaps some Chinese concessions on market access but "little movement on the EU's demand to restrain exports to Europe." The likely next step after the October 15-16 EU summit is an anti-subsidy probe into Chinese plug-in hybrids, with tariffs taking effect "in early 2027 at the earliest." Overall, DB expects EU leaders "to continue their rather minimalist approach."

Translation: Brussels will do just enough to make a headline, and not enough to make Beijing angry. Indeed, per Bloomberg, a key aim is to "keep the cap on hybrids low enough to avoid a retaliatory response from Beijing", which kinda defeats the purpose. China, for its part, already dismissed earlier talk of voluntary export caps last month as a "serious violation" of WTO rules, which is rich coming from the world's champion of subsidized overcapacity.

Bottom Line

Goldman's European trading desk was similarly underwhelmed, noting that the hybrid levy headlines "are not new, repeating what we heard in recent months," and that "the hesitation is the likely backlash from China and the fact that these measures will only briefly limit China's market share gains."

We agree. A temporary, carefully calibrated quota designed not to upset the country flooding your market is certainly not a trade policy - it's just a press release pretending to show Beijing that Brussels can be a tough guy. By the time it takes effect, BYD's Hungarian plant will be churning out "European" cars, and Germany's auto industry, where 140,000 jobs are at risk at VW alone, will have shrunk some more. As we warned a year ago, Germany's industrial core is collapsing; Brussels just noticed.

Better late than never... but only just.

Much more in the full Deutsche Bank "Crunch time for EU-China trade relations" note, available to pro subs.

Tyler Durden Wed, 10/07/2026 - 10:40

DeSantis Declares Emergency In 25 Florida Counties Ahead Of Possible Hurricane

Authored by Jack Phillips via The Epoch Times,

Florida Gov. Ron DeSantis on Tuesday evening declared an emergency for 25 counties ahead of Tropical Storm Isaias, which could strengthen into a hurricane in the coming days.

This satellite image from the National Oceanic and Atmospheric Administration shows Tropical Depression Nine forming over the Gulf of Mexico on Oct. 6, 2026. NOAA via AP

DeSantis said the order would allow the state emergency agency "to stage critical preparedness resources and ensure Florida is ready to respond," adding that residents "should take this time to get disaster plans in place and ensure their hurricane supply kit is stocked."

The order was issued for Baker, Bay, Calhoun, Columbia, Dixie, Escambia, Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Holmes, Jackson, Jefferson, Lafayette, Leon, Liberty, Madison, Okaloosa, Santa Rosa, Suwannee, Taylor, Walton, Wakulla, and Washington counties.

According to his office, Isaias could make landfall around the central U.S. Gulf Coast later in the week.

"Impacts are expected to extend beyond the point of landfall, with heavy rainfall, strong winds, coastal flooding and isolated tornadoes possible across North Florida," the governor's office also said.

"Additional precipitation could further saturate soils and increase the potential for flash flooding following the state's recent significant rainfall."

As of Wednesday morning, the U.S. National Hurricane Center (NHC) said that a tropical depression in the southern portion of the Gulf of Mexico, located to the west and north of Mexico, became Tropical Storm Isaias.

It's also forecast to "rapidly strengthen" over the coming days, the agency said, adding that hurricane watches will likely be issued in the northern part of the U.S. Gulf Coast later on Wednesday.

"A continued east-northeastward motion is expected today, followed by a turn toward the northeast and north on Thursday and Friday," the agency wrote in a 5 a.m. ET update.

"On the forecast track, Isaias is expected to pass to the north of the Yucatan Peninsula on Thursday and approach the U.S. northern Gulf Coast on Friday."

Isaias was centered about 285 miles west of Progreso, Mexico, and about 580 miles southwest of the Mississippi River's mouth, the center said. It had maximum sustained winds of 40 mph and was moving east-northeast at 8 mph.

A forecast released by the NHC shows that the storm is set to strengthen into a hurricane by 1 p.m. on Friday before likely making landfall as a hurricane on the Gulf Coast sometime around Friday night or early Saturday, near the border of Florida and Alabama.

"From Friday through the weekend, Isaias is expected to produce rainfall amounts of 3 to 6 inches, with localized totals up to 10 inches, across the northern U.S. Gulf Coast extending from far southeastern Louisiana to the Florida Panhandle," the NHC said.

Totals of 1 to 3 inches, with higher localized amounts of up to 5 inches, are also possible in the Carolinas and the Tennessee Valley as the storm moves inward, it added.

According to the forecast map, the storm is expected to remain a tropical depression by 1 a.m. ET on Sunday morning, and it will be located over southern Indiana, southern Illinois, and northwestern Kentucky.

If the storm strengthens into a hurricane, Isaias will become the first hurricane of the 2026 Atlantic hurricane season, which has been unusually quiet this year. Storm activity in the Pacific Ocean has been above average.

    OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Wed, 10/07/2026 - 10:25

After Iran's Rial, Hormuz Claims Its Second Currency: Iraq Devalues Dinar 13% To Keep Paying Salaries

Last weekend, we noted that the clearest scorecard of the US economic war on Iran is the rial, which cratered to a record 2.7 million per dollar (the slide that we first flagged in "Iran's Deadline Expires Today"... Rial Collapses, and which has only accelerated since). Turns out Tehran has company.

On Wednesday, Iraq devalued its currency by 13%, with the central bank raising the dollar-selling price for the public to 1,520 dinars from roughly 1,320. Per Reuters, the cabinet adopted the new structure on Tuesday, effective Wednesday: the Finance Ministry now sells its oil dollars to the CBI at 1,500, banks get them at 1,510 and the public pays 1,520.

That makes Iraq, as Bloomberg notes, the first Gulf Arab state to devalue since the US-Israel war on Iran began in late February. It probably won't be the last thing in the region to break, but it is the first currency peg to do so, which is a different kind of milestone.

The central bank's official explanation was a masterpiece of the genre: the decision was taken "in view of the current economic and financial conditions, and based on the recommendation of the cabinet," and, rest assured, foreign reserves are "sufficient to finance external trade, settle overseas bank-card transactions and provide cash to travelers." Translation: we have enough dollars, which is why we just made each one cost 15% more.

Below we look at why Baghdad blinked, why the street isn't buying it (yet), and why the timing is stranger than it looks given that Goldman says Gulf oil exports are already back to pre-war levels.

Salaries Or The Dinar: Pick One

Iraq is one of the most oil-dependent economies on the planet: crude sales generate around 90% of government revenue, and those sales go almost entirely out through the Strait of Hormuz. Which is why, from day one of the war, we flagged that Iraq would be the most exposed producer in the Gulf. Back on March 3, as storage filled with nowhere to ship, we tweeted this:

*IRAQ STARTS SHUTTING OIL OUTPUT AT RUMAILA AS STORAGE FILLS

— zerohedge (@zerohedge) March 3, 2026

A week later it was this:

*IRAQI OIL PRODUCTION REDUCED TO 1.2M B/D: MINISTRY SPOKESMAN *IRAQ ATTEMPTING TO RESUME KIRKUK OIL FLOW: MINISTRY SPOKESMAN

— zerohedge (@zerohedge) March 10, 2026

Seven months later, the bill has arrived. Bloomberg estimates Iraqi crude exports have averaged only about 1.25 million barrels a day since the start of March, compared with almost 3.5 million last year. SOMO, the state oil marketer, put the country's cumulative oil losses at around $80 billion last month. Even with a recovery, Reuters says exports were just 2.34mb/d in August, versus more than 3.6mb/d before the war.

Meanwhile, the one line item that never shrinks kept on growing. Bloomberg's chief EM economist Ziad Daoud summed it up:

"Every past oil shock has pushed Iraq into trouble. That happened in 2008, 2014, and 2020. The closure of the Strait of Hormuz and the drying up of oil revenues in 2026 marks another episode. Baghdad had to choose between paying its public-sector salaries and defending the dinar's value — it picked the former."

The math behind that choice is not complicated. Iraq had roughly $100 billion in FX reserves when the war began; by August that had dropped to $80 billion. Public-sector salaries alone cost about $5 billion a month, per Daoud.

Put differently, $20 billion of reserves went out the door in roughly six months, and what's left covers about 16 months of payroll with nothing else, ever, being imported. Hence the devaluation, which, as Iraqi analyst Mohammed al-Saffar told Reuters, is "essentially a fiscal response to the shock to Iraq's oil revenues": it "gives the government more dinars for each dollar of oil revenue, but raises import costs and reduces households' purchasing power."

Some napkin math (approximate): at 1,320, a 6.6 trillion dinar monthly wage bill eats about $5 billion of oil dollars. At 1,520, the same dinar payroll costs just $4.3 billion, a saving of roughly $650-700 million a month, or ~$8 billion a year. That is a 13% real pay cut for every public-sector worker in Iraq, delivered without anyone having to announce a pay cut. Diversification at its finest.

The Street Got There First

Of course, devaluations rarely happen to the market; they usually happen after it. According to Shafaq News, the dollar set six new parallel-market highs in Baghdad this year, from 150,400 dinars per $100 in January to roughly 160,000 in September, and 168,500 per $100 (1,685 per dollar) after the announcement. In other words, even at the new official rate, the black market still prices the dinar about 11% weaker, and local currency traders are already talking about a test of 180,000.

And the real economy is not taking it gracefully. Iraqi News reports Baghdad's Shorja wholesale market was "completely paralyzed" on Wednesday as merchants shuttered stores, distributors suspended deliveries, and food staples in Saladin jumped about 25% almost overnight. One MP has already demanded an emergency session of parliament to reverse the decision. (We'll take the under on that.)

Readers will also recall that Iraq's dollars aren't entirely Iraq's to begin with. As we discussed in "The Hidden Mechanism Behind Washington's Control Of Iraq's Oil Money" just last week, every barrel Iraq sells settles into a CBI account at the New York Fed, and Washington has not been shy about using that tap: in January it threatened to "starve" Iraq of its oil revenue if pro-Iran parties joined the government, and in April it blocked the regular $500 million cash pallets flown to Baghdad. Add the last US troops leaving Iraq on Sept 30 and Bessent's "frank discussion" with Iraq's foreign minister the very next day on "Iraq's progress in demilitarizing Iranian militias," and one can see why holding dinars has lately lost some of its appeal.

The Barrels Came Back... The Dollars Didn't

Here is the twist: the devaluation comes just as the physical oil picture is improving dramatically. In their latest Oil Comment, "Adaptation: Persian Gulf Exports Return to 2025 Level" (available to pro subs), Goldman's commodity team led by Daan Struyven writes:

"We estimate that Persian Gulf oil exports, including estimated "dark exports", have recovered to 23.3mb/d over the last week, in line with their 2025 average, as exports doubled in September. Increased Hormuz exports, including via ship-to-ship transfers, have driven this exports recovery despite the attack on the Saudi East-West pipeline, which disrupted oil flows to Yanbu for nearly two weeks, and the continuing Houthis blockade of Saudi exports via Bab-al-Mandab."

But the recovery is far from evenly shared. Saudi exports "more than doubled in September and rose above their 2025 average, reaching 11.6mb/d," and UAE exports are also above their 2025 levels. Iraq? Just 82% of its 2025 average as of Sep 28, even including Goldman's estimate of dark exports, and that's after a remarkable September. Kuwait and Qatar are stuck around 50%, while Iran shipped essentially nothing by sea.

Struyven repeated the message in the latest edition of Goldman's "Connecting You to GS" desk email (available to pro subs), with Gulf exports now at 23.6mb/d, and a breakdown that shows just how improvised the recovery is: only 7.5mb/d is going through the Strait of Hormuz in the conventional sense, with another 4.5mb/d via the Gulf of Oman, 4.6mb/d out of Saudi Arabia's Yanbu, 2.9mb/d via Fujairah (a bypass hub we said would become the focus back in March) and a token 0.2mb/d through Iraq's own Botas-Ceyhan pipeline to Turkey. The rest is Goldman's 4mb/d estimate of "dark" flows.

Which brings us to the problem for Baghdad: Saudi Arabia has a Red Sea pipeline and the UAE has Fujairah; Iraq has a 0.2mb/d trickle to Ceyhan and a Syria pipeline that is three to four years away, at best. It is reduced to chasing more tankers to get through Hormuz on Iran's terms. And with dated Brent near $120 and Goldman forecasting Brent "moderates to $85/bbl by year-end and to $80 in 2027," the window in which higher prices offset lower volumes is, according to Goldman at least, closing.

Put another way, the barrels are coming back, but the $80 billion in lost revenue and the $20 billion hole in reserves aren't, and the price of oil the draft budget assumes is $58 per barrel, so nobody in Baghdad is counting on a windfall.

A Budget Written In Wishful Thinking

Speaking of the draft budget, the numbers lawmakers shared with Reuters are a work of art. It projects spending of 217 trillion dinars, which Reuters converts to about $166 billion (implying the old ~1,300 rate). At the new 1,520 rate, that same dinar spending is just $143 billion, which is the point. The plan also forecasts a deficit of more than 40 trillion dinars and assumes crude exports of around 4 million barrels per day, including Kurdistan.

For context, that is above pre-war levels, about 70% more than Iraq actually exported in August, and more than three times the average since March. If the Strait doesn't cooperate, the devaluation is simply the plan B that is already in place: when the barrels don't show up, print more dinars per barrel.

And the pain doesn't stop at the Iraqi border. The IMF projects Iraq's $265 billion economy will shrink by almost 7% this year, and Bloomberg notes Saudi Arabia, Kuwait and Qatar are all expected to contract as well. In the bond market, Goldman's EM credit strategist Mikhail Galkin lists Bahrain among his relative dislikes "with a view of protracted Iran conflict" in his latest "EM Credit: The Big Picture... Heading into Q4" note (also available to pro subs), noting that BHRAIN bonds are down roughly 10% YTD, among the worst in EM.

Bottom Line

Iran's rial collapsed because Washington wanted it to. Iraq's dinar fell because Baghdad chose to let it, which in some ways is the more telling of the two. The Gulf's dollar pegs were built on an assumption that oil, and therefore dollars, would always flow. For seven months, for the most Hormuz-dependent producer in the region, they haven't.

Daoud's framing is the right one: every oil shock eventually lands on Iraq's currency. The question now is whether 1,520 is the new floor or just the first stop. With the parallel market already at 1,685, traders eyeing 1,800, food prices up a quarter overnight and a budget that only works with 4mb/d of exports, we'd bet on the latter, especially if the Monday de-escalation headlines keep reversing by Friday's close. Iraq picked salaries over the dinar this time. The next time, it may not get to pick.

Much more in the full Goldman "Persian Gulf Exports Return to 2025 Level" and the "EM Credit: The Big Picture... Heading into Q4" notes, both available to pro subs.

Tyler Durden Wed, 10/07/2026 - 10:10

Trump Says He Is Considering Suspending Federal Gas Tax

Authored by Tom Gantert via The Epoch Times,

President Donald Trump said he was thinking about suspending the federal gas tax as he spoke to reporters on Tuesday.

President Donald Trump speaks at Anduril Industries in Sparrow Point, Md., on Oct. 6, 2026. Madalina Kilroy/The Epoch Times

"We're thinking about that," Trump said when asked if the federal gas tax should be suspended. He didn't provide any more details.

The federal gasoline tax is 18.4 cents per gallon, according to the U.S. Energy Information Administration. The average price for a gallon of regular unleaded in the United States was $4.36 on Tuesday, up from $3.13 a year ago.

Trump also said at the press conference that the Strait of Hormuz was open and oil flows exceeded prewar levels.

"The Hormuz Strait, tremendous amounts, millions of barrels of oil has been delivered just over the last couple of days. We're getting it through at levels that were now even and sometimes exceeding prior to the war, and we've done very well," Trump said Oct. 6.

"What's driving up Gasoline is no longer the Strait of Hormuz, because Record Numbers of Barrels are coming out now on an almost daily basis, but the word, 'Refineries,' where Russia's are being blown up by Ukraine, and where ours are being closed up, in Blue States, like California," Trump said in an Oct. 5 post on Truth Social.

His comments contrasted with those of Iranian parliament speaker Mohammad Bagher Ghalibaf, who said Oct. 4 that the waterway would not reopen until Washington met conditions under an agreement made previously during the summer.

Trump signed an executive order Oct. 5 aimed at lowering diesel costs for farmers and truckers by expanding access to red-dyed diesel, normally reserved for off-road use.

The action directs federal penalty relief for highway use and a review of whether certain diesel tax payments can be deferred through Dec. 31. Trump said the relief could save truckers approximately $100 per fill-up.

The cost of gas has been a hot topic among politicians.

"There's no ifs, ands or buts about it. The war in Iran, the senseless, reckless war that Donald Trump brought us into with no plan, is the primary cause of skyrocketing gas prices and inflation," said U.S. Sen. Cory Booker (D-N.J.) in an Oct. 6 post on X. "The Constitution is clear. The power to declare war rests with Congress. But Congressional Republicans are too afraid of Trump to stand up to him."

The U.S. Energy Information Administration said in an Oct. 5 analysis that renewed military strikes in the Middle East and disruptions to oil shipments contributed to rising crude prices during the third quarter.

The agency cited U.S. and Iranian attacks on crude oil tankers, the U.S. blockade on Iranian oil exports, attacks on pumping stations along Saudi Arabia's East-West pipeline, attacks on Saudi Arabian oil tankers around the Bab el-Mandeb Strait and Ukraine's drone attacks on Novorossiysk, one of Russia's major oil terminals on the Black Sea, as reasons for a September increase in the price of oil.

The daily volatility of the price of oil from July 8 to Sept. 8 was due to market responses to public statements by U.S., Iranian, and other regional leaders on military plans and the likelihood of a peace deal as well as disruptions to flows through the Strait of Hormuz and attacks on oil infrastructure in Russia.

Tyler Durden Wed, 10/07/2026 - 09:55

Pakistan, Turkey & Saudi Arabia Trigger Mecca Defense Pact

In a historic first, the Mecca Defense Pact between Saudi Arabia, Pakistan and Turkey is now in force, according to the allies at an emergency meeting in Riyadh.

It was only signed in August, but soon after it was formalized an all-out war between the Houthis and Saudi coalition in Yemen erupted, with the Ansar Allah movement now increasingly targeting Saudi civilian infrastructure, including airports and energy infrastructure.

The Monday emergency meeting of foreign and defense ministers resulted in the top committee agreeing to deploy Pakistani and Turkish forces to Saudi territory. The pact is modeled on NATO's Article 5 and 'collective defense'. Saudi authorities have argued the kingdom is under direct attack from neighboring Yemen and its Houthi rebels, backed by Tehran.

via Anadolu Agency

It marks a quite a dramatic, though somewhat anticipated step, but it remains an open question the degree to which the external troops will directly support the ongoing anti-Houthi operation, which has focused on recapturing the Red Sea coast of late.

"The Committee decided to move immediately to the practical implementation of the collective defense commitments and to take the necessary measures to provide the agreed military forces and capabilities and ensure their rapid deployment in the Kingdom, in accordance with the approved arrangements and the national legislation of the Parties," said a joint statement made public by Pakistan's Foreign Office.

Pakistani Defense Minister Khawaja Asif sought to clarify in a statement to Geo News while speaking from Riyadh, "The forces of Turkiye and Pakistan are playing a supporting role. We are definitely involved in reconnaissance and such things, but the combat is practically being conducted by Saudi Arabia's own forces, and they are the ones retaking those areas."

Apparently the Mecca pact took on more urgency after claims that the Houthis targeted the Islamic holy site of Mecca last month - something which the Houthis vehemently denied. Pakistan has said when pressed by reporters for details: "The operational details of the actualization of the collective deterrence are a matter of operational confidentiality and may not be made subject of media speculation."

It should be noted that Pakistan has already long had a large and long-running contingent of troops inside the kingdom, and working with the Saudi armed forces. Pakistan's air force has also had fighter jets and support aircraft in the kingdom.

Turkey's role will be much less clear, and Turkish parliament must ultimately authorize sending troops abroad for any kind of large-scale deployment. Unlike Pakistan, the Turks do not have any level of an existent official military footprint in Saudi Arabia.

Emerging reports say the Turks preparing aircraft deployments along with troops...

EXCLUSIVE: Turkey is preparing to deploy troops, air defence systems, pilots, and aircraft to Saudi Arabia. · Turkish forces would defend infrastructure, Riyadh, and the holy cities while avoiding direct intervention in Yemen. With @ragipsoylu https://t.co/1zXwvaXeRo

— Levent Kemal (@leventkemaI) October 6, 2026

A big question remains, with the Mecca pact having been formally triggered, will the situation spiral into Pakistani and Turkish troops actually joining the fighting in Yemen? If so it would have serious implications for the broader region as the conflict spills over borders and into strategic waterways like the Bab al-Mandab Strait.

Tyler Durden Wed, 10/07/2026 - 09:45