Zero Hedge

Tanker Explosion Reported At Russia's Ust-Luga Seaport

Tanker Explosion Reported At Russia's Ust-Luga Seaport

An ammonia leak during loading operations on the LPG tanker "Eco Wizard" reportedly triggered an explosion, resulting in the tanker sinking at one of Russia's most strategically important ports, located in the Leningrad Region of northwest Russia on the Gulf of Finland. 

German public broadcaster Deutsche Welle reported that Eco Wizard experienced an explosion during onboard loading operations at Ust-Luga seaport. All crew members were safely evacuated...

On a tanker in the Leningrad Region of Russia, an ammonia leak occurred. This is already the sixth tanker this year that has been affected in some way by an explosion after entering Russian ports. The incident took place at the Russian port of Ust-Luga on the Baltic Sea during the loading of the tanker Eco Wizard, according to the Russian Ministry of Transport.

Telegram channel "MNS | Moscow • News • Events," citing its sources, reports that an explosion occurred on board the tanker during ammonia pumping operations at the terminal of JSC "MHK Eurochem." As a result, holes appeared in the hull of the ammonia carrier, through which water began to flood. Eco Wizard sails under the flag of the Marshall Islands and arrived in Ust-Luga from Belgium.

Current location of Eco Wizard. 

The owner of the vessel is StealthGas Inc. Additional details about the owner:

Ust-Luga is one of the most strategically important ports in Russia—economically, logistically, and geopolitically, mainly because it handles over 100 million tons of cargo annually, including coal, oil products, fertilizers, and LNG. 

The incident marks the sixth tanker explosion at a Russian port this year, raising suspicions of possible sabotage by Ukrainian special forces or Western intelligence operations—mysterious explosions for sure.

Tyler Durden Mon, 07/07/2025 - 05:45

Germany's Pension Ponzi Scheme Is Collapsing: What Comes Next

Germany's Pension Ponzi Scheme Is Collapsing: What Comes Next

Submitted by Thomas Kolbe

If you’ve ever wanted to witness the slow-motion collapse of a Ponzi scheme, you might want to keep an eye on Germany’s public pension system.

Rhetorically and politically sugar-coated as a “pay-as-you-go” system — where today’s workers finance the retirement of yesterday’s — this bureaucratic redistribution leviathan is utterly dependent on an ever-growing pool of contributors. Problem is: Germany is aging, shrinking, and losing its industrial base.

Just in time for this demographic crunch — declining birth rates, increasing life expectancy, and longer pension payout durations — policymakers have decided to torch what’s left of the country’s industrial foundation in a green frenzy. Year after year, around €70 billion in value creation is being sent up the chimney, while more than half a million jobs have disappeared in recent years. That’s half a million fewer contributors to the pension Ponzi.

Tax Payer´s Money To Maintain The Illusion

To keep the locomotive rolling — even as it barrels in the wrong direction — the federal government now plugs the pension system’s gaping cash hole with roughly €123 billion annually from the general budget. In other words: workers pay a second time, in the form of taxes, to support the same unsustainable system they already fund through record-high payroll deductions.

With a government spending ratio now exceeding 50% of GDP, Germany has erected a full-scale hyperstate. Attached to its bloated bureaucracy are ever-growing administrative tentacles: layers of social insurance agencies and subsidized institutions now serving as the domestic enforcement arm of Brussels’ self-destructive Green Deal.

The coming deep economic depression, which has been foreshadowed by three years of quasi-permanent recession, will test just how resilient — and solvent — the savings and wealth accumulation of past generations truly are. It may be their prudence that softens the blow of the present generation’s green delirium.

Trapped in the Logic of a Ponzi Scheme and Keynesian Voodoo Economics

Entirely captive to the logic of Ponzi finance and Keynesian voodoo economics, Germany’s new federal government now plans its grand escape from all woes. With a debt hammer of one trillion euros over the coming years, it aims to wipe away every problem while putting the economy back on track.

Broadly speaking, the money is supposed to raise the defense budget to 5% of GDP, as demanded by the latest NATO summit, pour into the country’s crumbling infrastructure, and plug countless holes in the overstrained welfare apparatus.

We don’t need to go into detail here to recall that such stimulus-fueled bonfires leave behind nothing but more debt and inflation, misallocating printed capital into sectors with little or no real demand. It would suffice if politicians had even a passing familiarity with recent economic history — they’d realize they are once again slamming their heads against the very same wall as in decades past.

Socialists Debate Higher Contribution

Meanwhile, the SPD — junior coalition partner to Chancellor Friedrich Merz’s CDU-led government — is currently debating raising the pension contribution ceiling by €500 to €8,050 monthly salary. This increase would translate to an additional yearly burden of over €1,116 for anyone earning that amount. In other words, those who already carry the lion’s share of the country’s fiscal load as the last remaining productive pillars of society would be hit with yet another surcharge. The welfare state and social peace, they argue, are worth this sacrifice.

The coalition partner CDU’s reaction was not long in coming. There was unanimous rejection of the SPD proposal to once again burden the country’s top earners. Wolfgang Steiger, Secretary General of the CDU’s Economic Council, stated:

“We strictly oppose the move to raise the contribution ceiling in statutory health insurance. It would further increase the cost of labor.”

That sounds good at first and has its merits. After all, it’s about time fiscal policy wielded the Milei chainsaw instead of continuing with the socialist cornucopia. Yet recent history has shown us that the CDU flips positions faster than expected.

It is, not least, Chancellor Friedrich Merz’s fault that trust in his party has hit rock bottom. After multiple broken campaign promises — like cutting the electricity tax or securing the country’s external borders once and for all — no one believes his party anymore.

After all, the community, acting as a global social welfare office, also needs to provide compensatory payments across other social insurance branches — which, thanks to successful recruitment efforts related to illegal migration, are facing significant special financing needs.

Germany is the Victim of Its Own Success

Two successful postwar generations built the capital and economic foundation on which the neo-socialist aberration could flourish — manifesting itself in an overgrown welfare system.

At the root of the problem lies not only the crushing tax and contribution burden in Germany but also its stagnating productivity, which together make rapid private capital formation nearly impossible for large parts of the population.

Even though politicians occasionally flirt with the idea of introducing elements of a capital-funded pension system, such proposals are a suicide mission in light of the sheer weight of the public pay-as-you-go system. Germans hold almost exclusively cash-based savings, which makes them highly vulnerable whenever the state — in concert with the ECB — fires up the inflation engine. On top of that, they remain deeply risk-averse investors, culturally and historically allergic to equity markets or private pension schemes.

Powerful Voting Block

The pension insurance provides the perfect case study. With over 21 million pension recipients, every reform attempt at the expense of this group faces a homogeneous voting block. Germany could raise the retirement age, which it is attempting to do to 67 years. It could reduce benefits, which it does not. Pensions are tied to inflation and productivity growth in the economy.

Politicians could reject the green-socialist agenda and return to the economic rationality of the free market to expand the contributor base and attract investment. They do not. The bureaucracy — the political front organization — is simply too powerful. Regulation is its product, and additional welfare recipients are its customers.

The path of least resistance will be taken: further increasing contribution rates for the productive pillars. Federal subsidies from the tax pool will supplement this to ease the pressure. But due to demographic development and the destructive economic policies in the EU, especially in Germany, the Ponzi scheme is steering toward an abyss.

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About the author: for over 25 years, Thomas Kolbe has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Mon, 07/07/2025 - 05:00

Ayatollah Khamenei Makes First Public Appearance Since War With Israel, US

Ayatollah Khamenei Makes First Public Appearance Since War With Israel, US

Iran's Supreme Leader Ayatollah Ali Khamenei made his first public appearance since last month's 12-day conflict between Iran and Israel, at the end of which the US sent B-2 bombers in an effort to destroy three key nuclear facilities.

Khamenei attended a religious ceremony in Tehran, which was featured in a video broadcast by state media. The 85-year-old leader attended the Imam Khomeini Mosque during an Ashura event, considered the most sacred day in the Shia Muslim calendar.

Handout: Office of the Iranian Supreme Leader/Reuters

The Supreme Leader is seen acknowledging a large crowd with waves and nods as attendees stand and chant slogans of devotion upon his arrival.

Khamenei had remained completely out of public sight since the surprise attack by Israel on June 13, with only prerecorded messages being released at various times.

There was widespread speculation that Israel was seeking to take out the Ayatollah if its warplanes or assassins had a chance. Many top-ranking military leaders as well as nuclear scientists were killed over the 12-day period, which saw Iran launch significant retaliatory attacks on Tel Aviv and other locations in Israel.

One key pre-recorded speech upon the end of fighting, issued by Khamenei on June 26, involved the top Shia religious cleric dismissing President Trump's demand for Iran’s submission. He declared that Iran had dealt "a slap to America’s face" by launching an attack on a US military base in Qatar; however, the Pentagon said all inbound projectiles were intercepted.

Trump responded by directing a message at Khamenei which said "You’re a man of great faith, respected in your country. But you need to be honest — you got beat to hell."

Given the obvious deep inroads Mossad intelligence has made into the Islamic Republic, Khamenei likely spent the conflict in a secret underground bunker known only to his closest aides.

Iran suffered severe damage, but Tel Aviv also showed signs of devastation from Iranian ballistic and hypersonic missile strikes:

At one point the headquarters of the Islamic Revolutionary Guard Corps (IRGC) was attacked and reportedly blown up by Israeli warplanes.

But Iran's ballistic missiles also did severe damage on some Israeli military command centers, including apparent attacks on some Mossad locations in Israel.

Tyler Durden Mon, 07/07/2025 - 04:15

The UK Aims To Entrench Its Influence In Estonia In Order To Lead The Arctic-Baltic Front

The UK Aims To Entrench Its Influence In Estonia In Order To Lead The Arctic-Baltic Front

Authored by Andrew Korybko via Substack,

The possible deployment of nuclear-capable F-35As there, which could be equipped with US air-to-ground nukes since the UK no longer has its own, would give London a leading role in managing the joint Arctic-Baltic front against Russia that’s expected to remain even after the Ukrainian Conflict ends...

Estonian Defense Minister Hanno Pevkur told the Postimees newspaper after last month’s NATO Summit that his country is interested in hosting nuclear-capable F-35As from its allies, with the outlet suggesting that the UK could deploy some of the 12 that it plans to purchase after they’re transferred. The UK’s other announcement that it’ll join NATO’s dual-capable nuclear aircraft mission raises the chance that these jets could be equipped with US nukes since the UK no longer has its own air-to-ground ones.

The Wall Street Journal explained how “U.K. Shifts Nuclear Doctrine With Purchase of U.S. Jets”, which could lead to it obtaining the aforesaid nukes from the US, while Kremlin spokesman Dmitry Peskov declared that Estonia’s readiness to host nuclear-capable jets from any NATO country poses an “immediate danger” to Russia. All this follows Russia’s Foreign Spy Service warning in mid-June that the Brits and Ukrainians are cooking up two false flag provocations in the Baltic to rope Trump into the war.

Seeing as how it was assessed in late April that “Estonia Might Become Europe’s Next Trouble Spot”, it’s therefore likely that they’ll let the UK deploy nuclear-capable F-35As at Tapa Army Base, where it already has some troops as part of its largest overseas deployment. Putting everything together, it can therefore be concluded that the UK is actively expanding its sphere of influence in the Baltic on anti-Russian pretexts and via associated means, with Estonia playing a leading role by hosting its regional forces.

The Baltic front of the New Cold War is connected to the Arctic one due to Finland joining the alliance in 2023 and Russia responding by building up its forces along their border to deter NATO-emanating threats from there. This joint front, which is expected to remain tense even after the Ukrainian Conflict ends, will also see the construction of the “EU Defense Line” that’ll stretch along Finland’s, the Baltic States’, and Poland’s eastern borders with Russia and Belarus as a 21st-century Iron Curtain.

It’s within this context that Trump reportedly plans to pull some US troops out of Central & Eastern Europe (CEE), perhaps in exchange for Russia reducing its own presence in Belarus (possibly including its tactical nukes), as part of their plans to build a new European security architecture. Be that as it may, the “EU Defense Line” – which includes new border fortifications and the deployment of extra-regional countries’ forces like the UK’s and Germany’s – ensures that the EU-Russian security dilemma will persist.

Russian Foreign Minister Sergey Lavrov recently said that the EU is becoming an extension of NATO, which is confirmed by these countries’ role in the “EU Defense Line”, their reaffirmed commitment to Ukraine during the latest NATO Summit, and the EU’s €800 billion “ReArm Europe Plan”. Therefore, the abovementioned security dilemma is also a NATO-Russian one, which might dramatically worsen even if there’s a mutual Russia-US pullback of forces in CEE should Trump give air-to-ground nukes to the UK.

The risk of World War III breaking out by miscalculation would remain sky-high in that event due to the ambiguity about whether every British-piloted F-35A that takes off from Estonia (even just for training) is equipped with American nukes as part of a first strike sneak attack. This dark scenario can only be averted by Trump refusing to give the UK air-to-ground nukes, but even if he declines, NATO-Russian tensions will still remain even after peace in Ukraine due to the increasingly British-led Arctic-Baltic front.

Tyler Durden Mon, 07/07/2025 - 03:30

Russia Army Captures Two More Settlements In 3rd Straight Month Of Advance In Ukraine's East

Russia Army Captures Two More Settlements In 3rd Straight Month Of Advance In Ukraine's East

Russia's military announced on Sunday that its forces had taken control of two additional settlements in eastern Ukraine, specifically one in the Donetsk region and the other in Kharkiv.

The statements indicated the villages of Piddubne in Donetsk and Sobolivka in Kharkiv are now under Russian control, though the Ukrainian side has not yet acknowledged this.

Via Reuters

Piddubne had an estimated pre-war population of about 500 and is located merely 4 miles from the Dnipropetrovsk oblast border.

As for, Sobolivka, it lies about two miles west of Kupiansk and is outside of areas previously claimed by Russia, according to the Institute for the Study of War (ISW).

Russia's Defense Ministry said in a couple of social media posts that its troops had “liberated” the settlements, and made reference to "Poddubnoye" and "Sobolevka" - according to the Russian spellings.

According to analysis presented in AFP, this marks the third straight month of Russian forces' advance in Ukraine's east, after stagnant front lined during the winter.

"Russia’s military advance in June accelerated for a third consecutive month and made its largest advance since November, according to AFP’s analysis of data from US-based Institute for the Study of War (ISW)," AFP writes.

"The Russian army took 588 square kilometers (227 square miles) of Ukrainian territory in June, compared with 507 square kilometers in May, 379 square kilometers in April, and 240 square kilometers in March, according to ISW data," the publication adds.

Drone assaults from both sides continues to be a feature of the war, with Russia just days ago having unleashed an unprecedented 500 drones on Ukraine.

Kiev was targeted again overnight Friday, and the next day the city's mayor Vitali Klitschko said the number of people killed had increased to two, with an additional 31 people wounded.

But Ukraine has been touting some successes, with the country's General Staff on Saturday stating that it struck the Borisoglebsk air base in Russia’s Voronezh region. The statement characterized it as a strike on the home base of Russia’s Su-34, Su-35S and Su-30SM fighter jets.

Tyler Durden Mon, 07/07/2025 - 02:45

Germany Is Not Being Honest About Who Is Assaulting Children At Swimming Pools

Germany Is Not Being Honest About Who Is Assaulting Children At Swimming Pools

Authored by eugyppius,

Migrants will not stop molesting and assaulting children at swimming pools in the best and most democratic Germany of all time...

In the last 10 years, we’ve welcomed a lot of ill-behaved and criminal young men into our country for no discernible reason, and along the way we’ve had the dubious privilege of discovering whole new categories of crime. There is the hostile-immigrant-drives-his-car-into-a-crowd-of-unsuspecting-innocents crime, there is the hostile-immigrant-stabs-a-bunch-of-random-people crime, there is the immigrant-gang-collectively-rape-underage-girl-in-park crime, and there is the immigrants-at-swimming-pool-molest-or-assault-various-children crime.

The latter has been stealing the headlines since the latest (allegedly carbon dioxide-induced) ‘heatwave’ in Germany. Recent stories include this one about a 25 year-old man of undisclosed background (who is almost certainly a migrant, otherwise authorities would not be so secretive about his origins) exposing himself to a bunch of underage teenagers at a pool in Asperg (Baden-Württemberg). Or this one, about a 21 year-old Syrian at a pool in Schweinfurt (Bavaria) caught exposing himself to four boys. Or this one, about men of “dark complexion” who severely beat an 18 year-old and threw him down some stairs. Or this disturbing one, about two Syrians who groped and assaulted a 12 year-old girl at a pool in Hof (Bavaria), forcing her beneath the water repeatedly and leaving her with a bloody nose.

Stories like this often come in groups, and what set off the present cascade was a particularly grim incident from June 22nd in Gelnhausen (Hessen), in which a group of Syrian migrants aged 18 to 28 molested eight or nine underage girls at the local pool. When the girls first complained about what was happening, pool personnel sent them back into the water. After this incident became a nationwide story, the Mayor of Gelnhausen, Christian Litzinger (CDU) gave an interview in which he appeared to ascribe the crime to “high temperatures”, which can cause “tempers to flare up”.

Naturally, this is but a partial list comprising only those news reports that I found, that anybody bothered to report to the police and that have made it into the press. The problem is vastly more pervasive than my brief summary might suggest. Personally, I haven’t been to a public pool in Germany in 10 years. I would never go again, and I would certainly never send my kids there. What used to be occasionally amusing places to get a bit of exercise have become crowded loci of urban chaos invariably full of drunken 20 year-old men from the global south. Everybody knows this is happening but it’s very politically incorrect to acknowledge that it’s happening, and so it’s become the occasion for a great deal of bizarre messaging from our progressive establishment.

A small group of peculiar lunatics have decided that what we really need to do is remind everybody that groping and assaulting and molesting is not okay. Thus we’ve been treated to an array of bizarre anti-swimming-pool-molestation messaging campaigns that just love to reverse the typical ethnicities of perpetrator and victim.

Consider the Cologne “Ich sag’s” (“I say it”) poster series. “Shoving is not funny!” screams this placard, with an awkward cartoon of a blonde German boy joining in harassing a brown girl:

Another poster from the same series informs viewers that “groping” is “forbidden” and likewise features a blonde German offender, because obviously that’s the problem demographic here.

All of that is irritating enough, but it’s nothing compared to the posters devised by a literal blue-haired city bureaucrat in Büren (near Paderborn), which take the woke programme so far around the bend that I had trouble believing they weren’t intended as subversive parodies. In the anti-groping category, Büren provides this insane PSA of a fat red-haired woman molesting a diminutive black man with a prosthetic leg, while a bizarre sea turtle named Tiki lurks beneath them and deplores unwanted touching.

Tiki the retard turtle, who apparently cannot even swim because he requires goggles and flotation devices, recurs in this anti-peeping placard, which – you guessed it – features a German man intruding upon a black woman.

Aside from other obvious objections, what strikes me about these posters is how infantilising and trivialising they all are – waving away an entire category of crime that is overwhelmingly, disproportionately committed by adult male migrants as some kind of cartoonish childhood problem that just requires a bit of schoolmarmish clarification to iron out.

Tyler Durden Mon, 07/07/2025 - 02:00

Analyzing Xi's Absence From The Latest BRICS Summit

Analyzing Xi's Absence From The Latest BRICS Summit

Authored by Andrew Korybko via Substack,

Chinese President Xi Jinping declined to travel to Rio for the latest BRICS Summit on the reported pretext of scheduling conflicts and having already met with his Brazilian counterpart Luiz Ignacia Lula da Silva twice this year.

The South China Morning Post speculated that the real reason was that Xi didn’t want to be “perceived as a supporting actor” there given the state dinner that Lula will hold for Indian Prime Minister Narendra Modi, however, who’ll be the first Indian premier to visit Brazil in nearly six decades.

Despite the border de-escalation deal that Xi and Modi agreed to during the last BRICS Summit, China and India still remain rivals, which recently manifested itself through reported Chinese support to Pakistan during the latest Indo-Pak Conflict and India’s perception that China is using the SCO against it. Accordingly, with Modi indisputably being the top VIP at the group’s latest annual gathering, it might therefore indeed be the case that Xi felt uncomfortable and thus declined to travel there to attend.

This hypothesis directly leads to the question of why Lula agreed to make Modi’s visit an official state one with an associated dinner despite him traveling there to attend a multilateral event. While it could just be for reasons of protocol considering the historical significance of his visit, Lula might have also calculated that it could expand Brazil’s balancing act from its hitherto mostly binary Sino-US nature into a more complex one through the inclusion of India. That could in turn alleviate some pressure from Trump.

Lula, whose evolution into a liberal-globalist during his third term (as documented in the several dozen analyses enumerated at the end of this one here) led to him closely aligning with Biden, endorsed Kamala right before the last US presidential election and recently told Trump to stop tweeting so much. All of that naturally put him in Trump’s crosshairs precisely at the moment when Brazil and the US are engaged in trade and energy talks whose successful outcome is more important to Brazil than to the US.

As luck would have it, Modi’s decision to attend the latest BRICS Summit in person and thus become the first Indian Prime Minister to visit Brazil in nearly six decades provided Lula with an opportunity to give him a state visit, which might have been responsible for Xi’s absence from the event as was reported. From the US’ perspective, there might indeed be a connection between these two developments, which could ingratiate Lula with Trump if he comes to share that perception at his advisors’ suggestion.

After all, this is the first time that Xi won’t attend a BRICS Summit in any capacity, not even remotely. The resultant optics fuel Western media speculation about China’s commitment to the group, which can manipulate some of the global public’s views regardless of its veracity. This sequence of events – China’s Indian rival (which is still friendly with the US in spite of the US’ latest efforts to subordinate it) visiting Brazil, Xi declining to attend the BRICS Summit, and Western media’s spin – aligns with US interests.

Accordingly, Xi’s absence from the latest BRICS Summit (regardless of the real reason[s] behind it) might stimulate US-Brazilian ties and comparatively reduce China’s role in Brazil’s balancing act if India’s role therein soon becomes more significant, which can altogether be considered a setback for China. To be sure, it’s not a major one and it could potentially be reversed through skillful Chinese diplomacy, but it’s still difficult for any honest observer to describe this outcome as meaningless, let alone a success.

Tyler Durden Sun, 07/06/2025 - 23:55

Biden Claims European Leaders, Dems, & Republicans Are Calling Him As Trump Unravels His 'Accomplishments'

Biden Claims European Leaders, Dems, & Republicans Are Calling Him As Trump Unravels His 'Accomplishments'

Authored by Debra Heine via American Greatness,

Joe Biden asserted Wednesday that European leaders, as well as Democrat and even Republican office holders have been reaching out to him since President Donald Trump took office. Biden also complained that his “accomplishments” from his stint in the White House were “changing so rapidly” under President Donald Trump, the Wall Street Journal reported.

Biden was tapped to deliver the keynote speech at a conference of human resources professionals in San Diego held by the Society for Human Resource Management (SHRM), amid a House Oversight and Government Reform Committee investigation into the cover-up of his mental decline while in office.

Following his remarks, Biden sat down with the SHRM president and CEO, Johnny Taylor, for a live chat.

The 82-year-old took credit for strengthening NATO, and claimed that he regularly gets calls from world leaders asking him to get more involved, although he offered no details.

Trump has been critical of NATO and has repeatedly complained about the lack of military spending among NATO allies, though he recently concluded that the alliance was “not a rip-off.”

Finland and Sweden joined NATO during Biden’s term in office, prompted by Russia’s invasion of Ukraine in 2022. Under Biden, the U.S. supplied Ukraine with billions of dollars in defense aid, while under Trump, munitions shipments to Ukraine have been paused.

“We strengthened NATO in a significant way,” Biden asserted. “Now, I’m getting calls. I’m not going to go into it, I can’t, from a number of European leaders asking me to get engaged. I’m not, but I’m giving advice. Because things are different,” he continued, stressing “I’m not, but I’m giving advice.”

Biden went on to assert that his opinion on unspecified matters was also in high demand among members of congress.

“I’m also dealing with a lot of Democrats and Republican colleagues calling me, wanting to talk — not because they think I have the answer, just to bounce things off [me],” he said, without disclosing what topics he has been consulted about.

“How can you just walk away?” Biden asked. “You don’t see me out there publicly doing a lot of this,” he added.

Biden asserted that he remains involved in political discussions “because I really cared about what I was doing”

“Many of the things I worked so damn hard, that I thought I changed in the country, are changing so rapidly,” he lamented.

Biden also told the crowd that he has been “working like hell” to write a 500-page book documenting his term in the White House. “Every president is expected to write a memoir,” he quipped, adding that his publisher wants it out by “March of this year.”

In response to Biden’s remarks, White House spokeswoman Anna Kelly said flatly: “Absolutely no one is calling Joe Biden for advice because his disastrous foreign policy left America weaker than ever before.”

Kelly added: “Thanks to President Trump, NATO allies have made a historic 5 percent defense spending pledge, Iran’s nuclear capabilities are obliterated, and our country’s standing on the world stage is restored.”

Biden’s comments lamenting the unraveling of his baleful legacy came during a week in which Trump racked up huge wins with Supreme Court rulings, foreign policy, low border crossings, outstanding economic news, and the passage of the “Big Beautiful Bill.”

“President Trump is delivering win after win for the American people, and we are the hottest nation in the world,” White House spokesperson Liz Huston said in a statement Thursday.

“The One, Big, Beautiful Bill is going to pass, Iran’s nuclear capabilities are obliterated, the stock market is at record highs, the border is the most secure its ever been, and the Supreme Court just ended nationwide injunctions that were being abused to halt the rest of the America First agenda,” Huston said. “Thanks to President Trump — the Golden Age of America is here.”

Former White House Chief of Staff Mick Mulvaney told Sky News that no one should “begrudge” Biden for giving the speech.

“My guess is he was paid between one and two million dollars,” Mulvaney said.

Tyler Durden Sun, 07/06/2025 - 21:00

NATO's Rutte Warns Of Chinese-Russian Red Dawn As Medvedev Suggests He's "On Magic Mushrooms"

NATO's Rutte Warns Of Chinese-Russian Red Dawn As Medvedev Suggests He's "On Magic Mushrooms"

NATO Secretary-General Mark Rutte has gone full 'Red Dawn' - warning that China and Russia might orchestrate simultaneous invasions of Taiwan and Europe to destabilize the Western alliance.

“If Xi Jinping would attack Taiwan, he would first make sure that he makes a call to his very junior partner in all of this, Vladimir Vladimirovich Putin, residing in Moscow, and telling him, ‘Hey, I’m going to do this, and I need you to keep them busy in Europe by attacking NATO territory,’” Rutte claimed in a recent interview with The New York Times. “That is most likely the way this will progress, and to deter them, we need to do two things.”

To counter this perceived threat, Rutte advocated a comprehensive dual approach aimed at fortifying NATO’s resilience and expanding its strategic partnerships.

“One is that NATO, collectively, being so strong that the Russians will never do this,” he explained, emphasizing the need for a robust collective defense posture to dissuade any Russian adventurism. “And second, working together with the Indo-Pacific—something President [Donald] Trump is very much promoting, because we have this close interconnectedness, working together on defense industry, innovation between NATO and the Indo-Pacific.”

Rutte further heightened concerns by highlighting Russia’s rapid military rearmament, which he described as a pressing geopolitical challenge. “We have an enormous geopolitical challenge on our hands,” he told the Times. “And that is first of all Russia, which is reconstituting itself at a pace and a speed which is unparalleled in recent history.” The NATO chief claimed that Russia is “now producing three times as much ammunition in three months as the whole of NATO is doing in a year,” a statistic he attributed to Moscow’s deepening partnerships with North Korea, China, and Iran in sustaining its war against Ukraine.

Dmitry Medvedev, a senior Russian official, took to X to mock the NATO leader, writing, “Rutte has clearly gorged on too many of the magic mushrooms beloved by the Dutch. He sees collusion between China & Russia over Taiwan, and then a Russian attack on Europe.” Medvedev added, “But he’s right about one thing: he should learn Russian. It might come in handy in a Siberian camp.” The caustic response reflects Moscow’s broader strategy of deflecting Western criticism with ridicule, though it offers little clarity on Russia’s actual strategic calculations.

Since Russia’s invasion of Ukraine in 2022, Trump has pressed NATO allies to significantly increase defense spending, successfully pushing for a new target of 5% of GDP, a sharp increase from the previous 2% benchmark. This demand, coupled with heightened concerns over European security, has driven countries like Britain and Germany to bolster their military budgets.

*  *  *

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What Prevents Trump From Implementing The "Chainsaw" Approach Like Milei?

What Prevents Trump From Implementing The "Chainsaw" Approach Like Milei?

Authored by Daniel Lacalle,

In recent months, many libertarians have criticised Donald Trump’s economic policies, arguing that he is not implementing drastic public spending cuts like Javier Milei has done in Argentina.

However, this comparison ignores key structural and contextual differences between the two countries and their governments. Below is a detailed explanation of why the situation in the United States under Trump is different from that of Argentina under Milei and why criticisms of Trump’s strategy are unfounded.

1. The Committed Budget: Biden’s Legacy

It is hard to understand why European libertarians fail to grasp such a basic concept as the “fiscal year”. The U.S. fiscal year begins on October 1, and the Biden administration took advantage of this to ramp up spending.

When Trump took office in January 2025, 97% of the federal budget for that year was already committed or spent. This was due to the Biden administration’s approval of several “Full Year Continuing Resolutions”, which left most funds and expenditures locked in for fiscal year 2025. Thus, Trump had no room to make immediate and drastic cuts, as most of the budget was untouchable until the next fiscal cycle.

Despite this, in 2025, discretionary spending reductions equivalent to $541 billion were carried out, and the accumulated deficit between April and May 2025 was 97% lower than in the same period of 2024.

2. Mandatory and Discretionary Spending

Mandatory spending (which includes programs like Social Security and Medicare) had already been increased by the Biden administration, and this increase took effect between February and December 2025. The U.S. fiscal year starts in October, and Biden implemented most of these increases through Continuing Resolutions (CRs) and the extension of existing programs, consolidating and, in many cases, increasing federal spending in key areas.

These resolutions included over $100 billion in funds for federal disaster assistance programmes, $29 billion for FEMA’s Disaster Relief Fund, and $10 billion in economic assistance for agricultural producers.

At the end of 2024, Biden approved a $54 billion (8%) increase in major mandatory spending programmes such as Social Security, Medicare, and Medicaid, as well as the extension of Obamacare, all applicable to 2025.

The Environmental Protection Agency (EPA) budget grew by $21 billion (700%), and the Trump administration was only able to act on $14 billion that was discretionary.

It is essential to remember that Biden did all this without a new budget law, simply by maintaining and extending existing allocations.

Biden’s proposed 2025 budget included additional increases, but these were blocked because they did not receive congressional approval.

Trump needs congressional approval to reverse these increases and reduce spending. That is what the “Big Beautiful Bill” includes. On the other hand, discretionary spending, especially in defence, was also committed, further limiting the new government’s immediate room for action.

The Big Beautiful Bill includes the first reduction in mandatory spending in the last sixty years—$1.6 trillion—and $2.4 trillion in discretionary spending.

3. Initial Fiscal Results

Despite these restrictions, the Trump administration achieved certain advances: in April, the second-largest fiscal surplus in history was recorded, and although a deficit reappeared in May, the deficit between March and May has been slashed compared to 2024. This indicates that measures were already being taken to improve the fiscal situation, mainly through higher revenues from trade agreements and private sector growth.

4. The “Big Beautiful Bill” and Deficit Reduction

It is astonishing that some libertarians and Austrians criticise the Big Beautiful Bill by buying into the Keynesian narrative that there will be no improvement in revenues, growth, employment, or investment from deregulation, trade agreements, and tax cuts.

That some libertarians deny the Laffer curve and the boost from deregulation surprises me. The Big Beautiful Bill incorporates $7 trillion in committed investments from trade negotiations, which also attract $4 trillion in tax revenues over the legislative period and a stimulus effect on the economy that results in an increase in tax revenues in the baseline scenario of $1.2 trillion.

Contrary to what some critics claim, the “Big Beautiful Bill” will not increase the deficit but will significantly reduce it.

A reduction of $1.6 trillion in mandatory spending and $2.4 trillion in discretionary spending is expected between 2026 and 2027. Additionally, an increase in tax revenues is anticipated thanks to deregulation, tax cuts, and new trade agreements, which will strengthen economic growth and employment.

We liberals, libertarians, and Austrians should be less critical of the greatest effort in reducing the State, liberalisation, deregulation, spending cuts, and tax reduction since 1990, but above all, some should not buy into the narrative that denies the positive effect on revenues and growth from deregulation, tax cuts, and trade negotiations.

5. Comparison with Milei: Similarities and Differences

Milei was able to implement immediate cuts because he inherited an open budget and extremely high inflation, which allowed him to reduce public spending in real terms by not adjusting it for inflation. Argentina’s budget does not include the provisions that the Biden administration incorporated, so President Milei was able to carry out a 30% reduction in public spending immediately and with unquestionable success, especially by eliminating subsidies, public works, and non-automatic transfers.

In contrast, Trump inherited a budget that was already committed and much lower inflation (less than 2.5%), limiting the impact of not adjusting spending for inflation.

If we compare both administrations, a very similar effort has been made. Trump has reduced public spending by 5% in the first quarter, and savings exceed $540 billion. By the end of his term, President Trump will have carried out a reduction in public spending equivalent to Milei’s.

Both leaders have promoted policies of tax reduction, deregulation, and the promotion of investment and employment. However, Trump’s tools and room for manoeuvre have been conditioned by the U.S. institutional structure and the decisions of the previous administration.

6. Conclusion

The policies of Trump and Milei share the goal of reducing public spending, fostering growth, and improving employment, but the starting circumstances are radically different. Criticising Trump for not applying an immediate “chainsaw” ignores the budgetary and legal constraints he faces in the United States. What matters is recognising that, within his constraints, Trump is implementing historic cuts and pro-growth policies that will positively impact the U.S. economy in the medium term.

My messages to those who attack the Trump administration for not being liberal enough are as follows:

  • Name a single U.S. administration that has successfully implemented a comparable approach to deregulation, tax cuts, and spending reduction while also passing a significant reduction in mandatory spending through both Congress and the Senate.

  • Buying into the Keynesian estimates of fiscal impact is curious. Denying the positive impact of reducing imports, increasing exports, and collecting more from trade agreements is surprising. Denying the economic and fiscal boost from deregulation and tax cuts is unforgivable.

Tyler Durden Sun, 07/06/2025 - 15:10

Merchant Ship Attacked With RPGs In Southern Red Sea Chokepoint

Merchant Ship Attacked With RPGs In Southern Red Sea Chokepoint

On Saturday evening, air raid sirens sounded across the Dead Sea region and parts of the West Bank following the launch of a ballistic missile from Yemen toward Israel. The launch, attributed to Iran-backed Houthi forces, marks an alarming expansion of their missile capabilities beyond the Red Sea maritime chokepoint. 

Hours later, on Sunday morning, the UK Maritime Trade Operations (UKMTO) received a report that a merchant vessel transiting 51 nautical miles southwest of Al Hudaydah, Yemen, came under attack by multiple boats armed with small arms and rocket-propelled grenades. The vessel's onboard security team returned fire. The incident remains ongoing.

UKTMO wrote:

UKMTO has received a report of an incident 51NM southwest of Al Hudaydah, Yemen. The vessel has been engaged by multiple small vessels who have opened fire with small arms and self-propelled grenades. Armed Security Team have returned fire and situation is ongoing. Authorities are investigating. Vessels are advised to transit with caution and report any suspicious activity to UKMTO.

The missile launch and maritime attack appear to be coordinated escalatory actions by the Iranian proxy group across multiple domains—air and maritime.

An update on Iran-Israel-U.S. tensions: The situation has calmed since the U.S. stealth bomber airstrikes on three Iranian nuclear facilities. However, President Trump stated on Friday that Tehran has yet to agree to nuclear inspections or cease uranium enrichment. 

Trump told reporters on board Air Force One that he believed Tehran's nuclear program had been "set back permanently," although he warned Iran could restart at a different location. 

Looking ahead, Israeli Prime Minister Benjamin Netanyahu is scheduled to visit the White House on Monday, where a potential ceasefire deal could materialize to end the 21-month war in Gaza. Trump has previously announced a "final proposal" for a 60-day ceasefire. 

Tyler Durden Sun, 07/06/2025 - 14:35

Turkey Arrests Three More Opposition Mayors, After Istanbul's Imamoglu Detained

Turkey Arrests Three More Opposition Mayors, After Istanbul's Imamoglu Detained

Via Middle East Eye

Three opposition mayors have been arrested in Turkey in what the Republican People's Party (CHP) have a branded a "political operation". Adana Mayor Zeydan Karalar, Antalya Mayor Muhittin Bocek and Adiyaman Mayor Abdurrahman Tutdere were all arrested on Saturday as part of an investigation into corruption allegations that have already seen the imprisonment of Istanbul Mayor Ekrem Imamoglu.

It follows the arrest of more than 120 people earlier this week as part of an investigation into alleged corruption in the opposition stronghold of Izmir, the country's third-largest city.

The CHP, the largest opposition party in Turkey, has accused the ruling Justice and Development Party (AKP) and President Recep Tayyip Erdogan of targeting them after widespread success in the 2024 local elections and polling suggesting Imamoglu could unseat the president in a future election.

Mansur Yavas, CHP mayor of the capital Ankara, criticised the arrests on X, saying his party would not bow to "unlawfulness".

"In a system where the law is bent and twisted according to politics, where justice is applied for one segment and ignored for another, no one should expect us to trust the rule of law or believe in justice," he wrote. 

According to the state-run Anadolu Agency, the mayors of Adana and Adiyaman were linked to a case involving alleged tender-rigging and corruption.

Police also arrested Ahmet Sahin, deputy mayor of Istanbul's Buyukcekmece district. The mayor of Antalya was detained in a separate investigation into corruption allegations, while police also arrested his son.

The left-wing Peoples' Equality and Democracy Party (DEM Party) also condemned the arrests on social media.

"This persecution of elected officials must stop," wrote Tulay Hatimogullari, co-chair of the party, on X.

"Failure to recognise the will of the people is causing deep divisions within society -  these operations are not a solution, but rather block the path to a democratic Turkiye."

Typically the interior ministry only has the power to replace elected mayors if they are suspected of terrorism offences.

Under the municipal law, if a mayor is suspended over corruption investigations a deputy mayor is selected by the city council and since the CHP holds a majority in the councils of all three cities they will not lose control.

On Monday, an Ankara court began examining a case involving allegations of vote-buying in the party's 2023 primaries.

The move could lead to the annulment of the election of its leader Ozgur Ozel, who has become well-known for organising protests against the imprisonment of Imamoglu.

Tyler Durden Sun, 07/06/2025 - 14:00

Zelensky's Latest Call With Trump Was 'Most Productive' He's Ever Had

Zelensky's Latest Call With Trump Was 'Most Productive' He's Ever Had

The White House rhetoric on Ukraine could be slowly shifting, after President Trump said he was "very unhappy" with a Thursday phone call with Russian President Vladimir Putin.

After a single night's record drone attack of some 500 UAVs sent on Ukraine, Trump said "It just seems like he wants to go all the way and just keep killing people. It's not good. I wasn't happy with it" - in reference to Putin.

Via Sky News

But it should be remembered that the White House just days prior halted some shipments of defense aid, which speaks louder than words. European allies are predictably upset and Kiev is now dealing very carefully with Washington, and handling Trump with kid gloves, given it is in a precarious situation on the battlefield.

Ukrainian President Volodymyr Zelensky, announced Saturday that his latest conversation with Trump this week was the best and "most productive" he has ever had.

"Regarding the conversation with the president of the United States, which took place a day earlier, it was probably the best conversation we have had during this whole time, the most productive," Zelenskiy said in his nightly video address.

"We discussed air defense issues and I'm grateful for the willingness to help. The Patriot system is precisely the key to protection against ballistic threats," he added.

Zelensky has also been asking Washington to slap more sanctions on Moscow, something Trump has so far resisted in order to give better space for peace negotiations to take off.

Asked by reporters over whether Zelensky's request for more Patriot missiles would be honored, Trump replied, "They're going to need them for defense... They're going to need something because they're being hit pretty hard."

Trump had further said of the Zelensky call, which happened Friday, "We talked about different things... I think it was a very, very strategic call."

This suggests that some new decision-making could be afoot regarding supplying Ukraine. There have been recent reports, however, that Trump is prioritizing defense of Israel, even diverting arms and ammo away from eastern Europe for that purpose. Trump has been expressing deep frustration at lack of momentum in US-backed peace efforts, for which he's criticized both warring sides.

Tyler Durden Sun, 07/06/2025 - 13:25

Tchir: The Risk For Stocks Is That The Administration Decides It Was Correct All Along On Tariffs

Tchir: The Risk For Stocks Is That The Administration Decides It Was Correct All Along On Tariffs

By Peter Tchir of Academy Securities

Big, Beautiful Production For Security

The “Big Beautiful Bill” is now law (which always brings back childhood memories of Schoolhouse Rock – yes, we had that in Canada too). If you don’t know the “I’m Just a Bill” song it is well worth a quick search.

We are taking the view that the new tax law is a big positive for the economy and markets.

  • Yes, we can all argue who benefited the most and who got hurt by the bill. We can worry about the deficit. The law is probably far from anyone’s ideal vision of a “perfect” law, but we don’t think that is the main point.
    • It is too early to worry about some “calculated” deficit that would occur over several years, under certain sets of conditions, that may or may not occur.
    • Also, we will continue to highlight the Tariff Revenue Chart, which is adding real revenue for the Treasury and is NOT included in the CBO projections.
  • A bill, passed by the House and Senate, and signed into law by the President, is a big deal. We can now plan. So far, much of what has been driving the economy and markets has relied on Executive Orders. While Executive Orders are useful, we have seen how easily they can be changed or even challenged in court. This law gives us certainty for many important aspects of the economy for at least the next 4 years. Maybe we should focus more on the details, as the “devil is in the details,” but this time, that might be “missing the forest for the trees.” What it says is less important than the fact that it now exists. Some degree of uncertainty for the economy has been removed.
    • From what we can tell, it seems that some of the growth-oriented benefits are front-loaded. To the extent that plays out, it will help propel the economy in the near-term.

Peace through Strength seems to be holding with the ceasefire in the Middle East and NATO increasing their spending.

Both of these developments (the new tax law and renewed respect on the military front) should help unleash some Animal Spirits in the Economy. The markets have had no shortage of Animal Spirits, but that does not seem to be entirely the case with the economy.

The Jobs Data was better than we expected (and what virtually every other economist was expecting), and as we described in that report, it was more consistent than prior reports. Having said that, there are some things to quibble about, but all that can change if we really start to reignite the Animal Spirts, which the administration seems to be doing.

One Eye on Tariffs

The July 9th date is rapidly approaching and there are indications that the “extension” of the “pause” may not be a given. It makes me very nervous that my social media stream is FULL of people mocking anyone who was afraid of tariffs. “Record highs despite the tariffs,” scream report after report. Hmmm.

Let’s not forget that the stock market rally started when we “paused” tariffs from levels that seemed insanely high and based on “dubious” (to be extremely polite) logic. 10% on most of the world, with China at 35%, wasn’t much worse than where many thought we were headed – reciprocal tariffs. We continue to highlight the wide variety of tariff mitigation strategies being employed which are also softening any blow. But it is disingenuous to claim the “tariff policy” worked and the bears “missed it.”

The President backing down on tariffs is what allowed for the rally.

Since then, we’ve had the tax law and Peace through Strength, which are additional positives.

The spending on AI continues unabated as companies crave efficiency, whether or not the economy is doing well.

We only mention this as there does seem to be some risk that the administration will decide to take “another bite at the apple” on tariffs. That seems like the biggest risk to the market in the coming days. That we go back to some policy that employs tariffs at levels that will not be manageable. That risk is increasing as the number of victory laps on tariff policy is growing. Finally, that Tariff Chart we mentioned, which is bringing in revenue, also shows that very little money, relative to the size of the economy, has been spent on tariffs so far, so it is too early to judge (even at the “pause” rates) what the impact will be on the economy.

Finally, while “sectoral” tariffs have dropped from the headlines, some tail risk remains with those (depending on how the administration decides to use them). It seems that the more formal process in place for these reduces any tail risk, but it is another thing on the tariff front that seems to have more downside than upside, given how comfortable markets are.

National Production for National Security

If I thought it was intimidating being in London with Admiral Sir George Zambellas (former First Sea Lord and Lord Warden of the Cinque Ports), it was about to get even more intimidating.

We finished our London trip as part of the keynote address of an event held by Q15. Katy Martin of the FT moderated a panel with me and Baroness Dambisa Moyo, who had to zoom in as there was an urgent matter being debated in the House of Lords. She also serves on the boards of Chevron and Starbucks.

Despite our dramatically different backgrounds (and degrees of success) we seemed to reach similar conclusions on the concept of National Production for National Security. We get to similar conclusions (described somewhat differently, but close enough for these purposes) via different processes. To me, that makes it resonate even more.

The U.S. is not the only country that needs to be taking steps toward figuring out what is required for a “no fail” state and then doing something to ensure that this occurs.

Not every country needs to be (or can be) isolated for all of its needs. Even some crucial necessities will require trade. But the more that can be done with allies, or friends, or even just countries in close proximity, the better. It is, as we’ve seen, easy for “adversaries” to use your critical needs to your disadvantage. Even allies, who might not do it on purpose, could face unforeseen events for themselves that limit their ability to continue to trade as before.

My fervent hope is that the administration dedicates as much time and energy to this pursuit as possible. Ideally shifting away from tariffs as the main tool to get domestic growth higher and focusing on DEREGULATION and Targeted Spending to really jumpstart these efforts.

We have seen some things done on the semiconductor side, and apparently on the steel side (not sure if the things being done regarding steel will turn out to be useful, but it is out there).

Yet there doesn’t seem to be the urgency I would expect.

The latest trade negotiations with China scream:

  • We are at risk of being held hostage by processed and refined rare earths and critical minerals.
  • Academy has been writing about this for years: Rare Earths - a National Security Threat was published back in February 2021 – and yet, it still feels like the nation is in its infancy with regards to overcoming this risk.
  • DEREGULAITON can go a long way. As a property developer this seems like it is in the President’s Wheelhouse. The Commerce Secretary also seems well suited for this battle. We have imposed regulation after regulation over the years. The question is whether all these regulations make sense in an era where we are in direct competition with China. The U.S. had the luxury of being the sole superpower for decades, so it is valid (even necessary) to revisit a lot of things now that we must look at global competition from a different perspective.
  • We may need to spend money. Offer contracts. Take a variety of financial initiatives (beyond some things like accelerated depreciation in the newly passed tax law) to get these industries that are important for national security (chips, medicines, certain commodities, etc.) to grow as rapidly as we may need them to grow. While deregulation is definitively in the Trump playbook, it is less clear that this is. However, we look back to Bessent’s “three legged stool” analogy, where he seems to realize it and may be able to help on that front while others tackle deregulation.
  • We cannot hammer home the point enough that refined and processed commodities are at the forefront of our fear. We usually get some “snickers” when we point out that oil is useless. And yes, the statement is designed to illicit that response, but the reality is that Gasoline and Diesel are extremely useful, but oil in its raw (or crude) form is just not that useful in everyday life. Again, yes, the statement is a bit over the top, but it is meant to get people really thinking about what we need - and that is the refined (or processed) versions of commodities. We’ve lamented that many reports indicate that 90% of the oil released from the Strategic Petroleum Reserve was sent outside the country to be refined.
    • Yes, getting access to rare earths and critical minerals is important, but if you cannot process them or refine them yourselves, you are leaving the most important step to someone else – in this case China. It depends on the specific commodity, but using AI, it seems fair to say that somewhere between 80% and 90% of mission critical materials for “things” we need (on many fronts) is still controlled by China.
    • We don’t need to be able to procure and refine every last ounce of what we use, but we are so far from that, and we need to take urgent steps as the lack of processing and refining is becoming a very visible weakness (and not just in the U.S. but also in many other major countries, who have possibly been “too comfortable” to do some of the “heavy lifting” that they really need to do).

It is a good time to paraphrase one of my favorite lines from COVID. I believe it was the CEO of Whirlpool who said something to the effect of “a product that is 99% done, is still not done.” Just think about that statement in the context of where we are with respect to many rare earths, critical minerals, semiconductors, medicines, etc.

Bottom Line

A focus on national production for national security (something every country needs to be thinking about) would go a long way to supporting the economic momentum delivered by the tax law and rejuvenated defense posture of the United States.

The risk is that the administration decides it was correct all along on tariffs and that we see more “Big Beautiful Tariff” policies in the coming days and weeks as we near some deadlines.

Markets seem “ahead” of the economy, which is fine if we continue to put forth policies that encourage the economy to catch up. We seem to be on the right path for “Animal Spirits” to rise within the economy, but not if there is a renewed focus on tariffs.

It should be another interesting week and hope you are all having a great 4th of July weekend!

Tyler Durden Sun, 07/06/2025 - 12:50

Tropical Storm Chantal Makes Landfall - All Eyes On Possible NYC Path

Tropical Storm Chantal Makes Landfall - All Eyes On Possible NYC Path

With deadly Texas flooding dominating headlines this weekend, we now shift focus to Tropical Storm Chantal, which made landfall near Myrtle Beach, South Carolina, early Sunday. This marks the first tropical storm to make landfall in the 2025 Atlantic hurricane season—and the earliest to do so since 2022.

Chantal is the third tropical storm of this year's hurricane season, following Andrea and Barry, both of which formed in June. The new storm appeared on our radar Friday, with spaghetti models showing a potential path up the U.S. East Coast, through parts of the Mid-Atlantic, and possibly over southern New Jersey and New York City.

Updated spaghetti models posted by meteorologist Ben Noll on X show a strong level of confidence in Chantal's track into the Mid-Atlantic and Northeast, where severe weather could be seen next from D.C. to New York and Boston.

"In addition to being the first of this season, Chantal's landfall was the earliest in the season since 2022 in the United States," Knoll noted in a weather post featured in the Washignton Post.

Additional forecast models show a high level of confidence that Chantal will track up the East Coast before spinning out into the Atlantic. Models are subject to change. 

The months of August and September tend to be the most active for hurricane activity. 

If you have travel plans along the East Coast this week, keep a close eye on Chantal.

Tyler Durden Sun, 07/06/2025 - 12:15

UK Restores Formal Diplomatic Ties With Syria After Grooming Sharaa For Power

UK Restores Formal Diplomatic Ties With Syria After Grooming Sharaa For Power

Via The Cradle

Britain reestablished full diplomatic relations with Syria on Sunday as part of the visit of UK Foreign Secretary David Lammy to Damascus to meet the country's new de facto leader, Ahmad al-Sharaa (Jolani).

In a video message on X, Lammy claimed the UK had an interest in Syria's recovery after 14 years of war. "It matters that it's stable, because if it's not, the terrorism that can happen here washes up on our own streets back at home," he said.

Image: FCDO

He also stressed the importance of addressing illegal immigration, noting that "it's hugely important we continue to support progress here."

"This is a country that is ancient, made up of many different people. The future has to be an inclusive one. It has to be a peaceful one. And I hope for prosperity for all of the Syrian people," he said.

Britain played a key role in sparking the war in Syria in 2011, which killed hundreds of thousands, and in bringing the current government, led by Sharaa, to power in December 2024.

Sharaa previously fought for the Islamic State of Iraq (the precursor to ISIS) after the 2003 US invasion. He was detained in Iraq in 2006 and released by US officials in 2008.

After his release, Sharaa was appointed head of Islamic State operations in Mosul Province, dispatching suicide car bombers to kill Shia Muslims and Christians. In August 2011, he was dispatched to Syria by Abu Bakr al-Baghdadi to establish the Nusra Front.

That same year, UK intelligence facilitated the travel of British extremists of Libyan and West and South Asian backgrounds to Syria to fight against the government of Bashar al-Assad. Many joined the Al-Qaeda-affiliated Nusra Front and ISIS.

The same year, former UK Prime Minister Tony Blair's chief of staff, Jonathan Powell, founded the NGO Inter Mediate, a Foreign Office-funded project aimed at establishing secret channels with insurgent groups. 

He boasted that his group worked closely with the UK foreign office and UK intelligence. Powell personally met multiple times with Sharaa in Idlib Governorate in an effort to rebrand his terrorist image and groom him as Syria's next leader.

The Nusra Front was later rebranded as Hayat Tahrir al-Sham (HTS). Sharaa and HTS captured Damascus in December, ousting Assad.

Syrian analyst Malek Hafez told the Syrian Observer that Powell, who became UK National Security Advisor in November, has a team running a media office inside the presidential palace, "reportedly run by two women – one British, the other of Lebanese-British heritage."

As Hafez concludes, "The rise of Ahmad al-Sharaa was not spontaneous – it was carefully engineered through a long-term, western-backed strategy, in which Britain played a disproportionately influential role among western powers."

Since Assad's fall, Syria has moved toward becoming an extremist Islamic state based on the violent ideology of the medieval Islamic scholar Ibn Taymiyyah.

In March, extremist Islamist gunmen affiliated with Syria's Ministry of Defense and General Security massacred at least 1,500 Alawite civilians, often referring to them as pigs and dogs before killing them.

Tyler Durden Sun, 07/06/2025 - 11:40

Rickards: Superintelligence Will Never Arrive

Rickards: Superintelligence Will Never Arrive

Authored by James Rickards via DailyReckoning.com,

Readers know at least two things about artificial intelligence (AI).

The first is that an AI frenzy has been driving the stock market higher for the past three years even with occasional drawdowns along the way.

The second is that AI is a revolutionary technology that will change the world and potentially eliminate numerous jobs, including jobs requiring training and technical skills.

Both points are correct with numerous caveats. AI has been driving the stock market to record highs, but the market has the look and feel of a super-bubble. The crash could come anytime and bring the market down by 50% or more.

That’s not a reason to short the major stock indices today. The bubble can last longer than anyone expects. If you short the indices, you can lose a lot of money being wrong. But it is advisable to lighten up on equity allocations and increase your allocation to cash in order to avoid the worst damage when the crash does come.

On the second point, AI will make some jobs obsolete or easily replaceable. Of course, as with any new technology, it will create new jobs requiring different skills. Teachers will not become obsolete. They’ll shift from teaching the basics of math and reading, which AI does quite well, to teaching critical thinking and reasoning, which computers do poorly or not at all. Changes will be pervasive, but they will still be changes and not chaos.

The Limitations

Artificial Intelligence is a powerful force, but there’s much less there than meets the eye. AI may be confronting material constraints in terms of processing power, training sets and electricity generation. Semiconductor chips keep getting faster and new ones are on the way. But these chips consume enormous amounts of energy, especially when installed in huge arrays in new AI data centers. Advocates are turning to nuclear power plants, including small modular reactors to supply the energy needs of AI. This demand is non-linear, which means that exponentially larger energy sources are needed to make small advances in processing output. AI is fast approaching practical limits on its ability to achieve greater performance.

This near insatiable demand for energy means that the AI race is really an energy race. This could make the U.S. and Russia the two dominant players (sound familiar?) as China depends on Russia for energy and Europe depends on the U.S. and Russia. Sanctions on Russian energy exports can actually help Russia in the AI race because natural gas can be stored and used in Russia to support AI and cryptocurrency mining. It’s the law of unintended consequences applied to the short-sighted Europeans and the resource-poor Chinese.

AI Lacks Common Sense

Another limitation on AI, which is not well known, is the Law of Conservation of Information in Search. This law is backed up by rigorous mathematical proofs. What it says is that AI cannot find any new information. It can find things faster and it can make connections that humans might find almost impossible to make. That’s valuable. But AI cannot find anything new. It can only seek out and find information that is already there for the taking. New knowledge comes from humans in the form of creativity, art, writing and original work. Computers cannot perform genuinely creative tasks. That should give humans some comfort that they will never be obsolete.

A further problem in AI is dilution and degradation of training sets as more training set content consists of AI output from prior processing. AI is prone to errors, hallucinations (better called confabulations) and inferences that have no basis in fact. That’s bad enough. But when that output enters the training set (basically every page in the internet), the quality of the training set degrades, and future output degrades in sync. There’s no good solution to this except careful curation. If you have to be a subject matter expert to curate training sets and then evaluate output, this greatly diminishes the value-added role of AI.

Computers also lack empathy, sympathy and common sense. They process but they do not really think like humans. In fact, AI does not think at all; it’s just math. In one recent experiment, an AI computer was entered into a competition with a group of 3- to-7-year-olds. The challenge was to draw a circle with the tools at hand. Those tools were a ruler, a teapot and a third irrelevant object such as a stove. The computer reasoned that a ruler was a drafting instrument like a compass and tried to draw a circle with a ruler. It failed. The children saw that the bottom of a teapot was a circle and simply traced the teapot to draw perfect circles. The AI system used associative logic. The children used common sense. The children won. That result will not vary in future contests because common sense (technically abductive logic) cannot be programmed.

High-flying AI companies are quickly finding that their systems can be outperformed by newer systems that simply use big ticket AI output as a baseline training set. This is a shortcut to high performance at a small fraction of the cost. The establishment AI companies like Microsoft and Google call this theft of IP, but it’s no worse than those giants using existing IP (including my books, by the way) without paying royalties. It may be a form of piracy, but it’s easy to do and almost impossible to stop. This does not mean the end of AI. It means the end of sky-high profit projections for AI. The return on the hundreds of billions of dollars being spent by the AI giants may be meager.

Sam Altman: Innovator or Salesman?

The best-known figure in the world of AI is Sam Altman. He’s the head of OpenAI, which launched the ChatGPT app a few years ago. AI began in the 1950s, seemed to hit a wall from a development perspective in the 1980s (a period known as the AI Winter), was largely dormant in the 1990s and early 2000s, then suddenly came alive again in the past ten years. ChatGPT was the most downloaded app in history over its first few months and has hundreds of millions of users today.

Altman was pushed out by the board of OpenAI last year because the company was intended as a non-profit entity that was developing AI for the good of mankind. Altman wanted to turn it into a for-profit entity as a prelude to a multi-hundred-billion-dollar IPO. When the top engineers threatened to quit and follow Altman to a new venture, the board quickly reversed course and brought Altman back into the company, although the exact legal structure remains under discussion.

Meanwhile, Altman has charged full speed ahead with his claims about superintelligence (also known as advanced general intelligence (AGI) with the key word being “general,” which means the system can think like humans, only better). One way to understand superintelligence is the metaphor that humans will be to the computer as apes are to humans. We’ll be considered smart, but not smarter than our machine masters. Altman said that “in some ways ChatGPT is already more powerful than any human who ever lived.” He also said he expects AI machines “to do real cognitive work” by 2025 and will create “novel insights” by 2026.

This is all nonsense for several reasons. The first as noted above is that training sets (the materials studied by large language models) are becoming polluted with the output from prior AI models so that the machines are getting dumber not smarter. The second is the Law of Conservation of Information in Search I also described above. This law (supported by applied mathematics) says that computers may be able to find information faster than humans, but they cannot find any information that does not already exist. In other words, the machines are not really thinking and are not really creative. They just connect dots faster than we do.

A new paper from Apple concludes, “Through extensive experimentation across diverse puzzles, we show that frontier LRMs [Large Reasoning Models] face a complete accuracy collapse beyond certain complexities. Moreover, they exhibit a counter-intuitive scaling limit: their reasoning effort increases with problem complexity up to a point, then declines despite having an adequate token budget.” This and other evidence point to AI reaching limits of logic that brute force computing power cannot overcome.

Finally, no developer has ever been able to code abductive logic; really common sense or gut instinct. That’s one of the most powerful reasoning tools humans possess. In short, superintelligence will never arrive. More and more, Altman looks like just another Silicon Valley salesman pitching the next big thing with not much behind it.

Tyler Durden Sun, 07/06/2025 - 10:30

It's Official: Elon Musk's 'America Party' Registers With Federal Election Commission

It's Official: Elon Musk's 'America Party' Registers With Federal Election Commission

Update (Sunday):

A new filing with the Federal Election Commission (FEC) confirms that Elon Musk's America Party (AMEP) is now official, as the billionaire sets out to challenge the entrenched "uniparty" duopoly in Washington.

Musk has voiced deep frustration with GOP lawmakers over their failure to codify DOGE cuts and President Trump's "Big Beautiful Bill," which was signed into law on Independence Day.

FEC Filing:

Filing #1898441 states that AMEP will be headquartered at 1 Rocket Road, Hawthorne, CA 78725—the same address as Musk's rocket company, SpaceX, according to public records.

Leadership:

AMEP's Custodian of Records and Treasurer is listed as Vaibhav Taneja, who also currently serves as CFO of Tesla, per publicly available filings.

The Filing:

.    .     . 

One day after his latest poll asking his followers on X whether the USA needs a new political party, Elon Musk announced on Saturday that the "America party has formed."

"By a factor of 2 to 1, you want a new political party and you shall have it!" Musk wrote. 

"Today, the America Party is formed to give you back your freedom."

The announcement comes after 1,248,856 people voted 'yes' to whether he should "create the America Party."

The announcement comes one day after President Donald Trump signed his signature tax and spending bill, which Musk has vehemently opposed for weeks, and which resulted in a very public falling out with Trump - whose campaign Musk spent hundreds of millions of dollars promoting. 

Musk also led the Department of Government Efficiency (DOGE), which found billions of dollars in waste, fraud and abuse - virtually none of which was included in Trump's so-called "Big Beautiful Bill."

While the Trump-Musk spat has simmered in recent weeks, Trump earlier this week threatened to cut off billions of dollars in subsidies to Musk's companies. 

Meanwhile, Musk foe Steve Bannon tore into the plan for a third political party - saying on his "War Room" podcast on Friday: "The foul, the buffoon. Elmo the Mook, formerly known as Elon Musk, Elmo the Mook. He’s today, in another smear, and this — only a foreigner could do this — think about it, he’s got up on, he’s got up on Twitter right now, a poll about starting an America Party, a non-American starting an America Party." 

"No, brother, you’re not an American. You’re a South African and if we take enough time and prove the facts of that, you should be deported because it’s a crime of what you did — among many," Bannon added. 

Musk, meanwhile, wrote on Friday that "The fat, drunken slob called Bannon will go back to prison and this time for a long time. He has a lifetime of crime to pay for."

Tyler Durden Sun, 07/06/2025 - 10:15

Tesla Sales Drop 60% In Germany In June

Tesla Sales Drop 60% In Germany In June

Tesla's sales in Germany dropped 60% in June to 1,860 vehicles, according to the KBA. For the first half of 2025, sales fell 58.2% year-over-year to 8,890 units, despite overall growth in battery EV sales., according to Reuters.

Tesla has also now seen six straight months of declining sales in France, Sweden, Denmark, and Italy. Chinese EV maker BYD saw its German sales nearly quadruple in June to 1,675 and surged over fivefold to 6,323 year-to-date.Recall, Tesla's company-wide Q2 delivery numbers came in at 384,122 vehicles last week, just below the estimate of 389,407. 

While estimates had been lowered multiple times, the number was still better than whisper numbers as low as 350k or 360k that were starting to make their way around the street.

Production beat expectations. Tesla built 410,244 vehicles, compared to the forecast of 400,083. Model 3 and Model Y deliveries totaled 373,728, slightly under the estimate of 377,295. The “Other Models” category — including the Model S, X, and Cybertruck — showed Tesla delivered 10,394 vehicles, below the expected 14,644.

Production of these models also came in slightly under, at 13,409 compared to the estimate of 13,616.

Model 3 and Y production reached 396,835 units, higher than the expected 383,567, suggesting Tesla had ramped up output of its most popular models.

Deutsche Bank analysts noted late last week that the surprise upside came mainly from the U.S. (likely due to tax credit pull-forward) and stronger sales in parts of Asia, though China was weaker than expected.

Model 3/Y deliveries outperformed forecasts, while S/X/Cybertruck lagged. Energy storage deployment missed estimates. Deutsche Bank sees potential margin upside from the delivery beat but notes that full-year volume growth remains challenging due to policy headwinds and Model Q delays. Elon Musk’s renewed focus on U.S. and European sales could help in H2, the bank said.

As we noted last week, ahead of Tesla’s Q2 2025 delivery report, expectations were subdued amid signs of continued demand weakness and investor concerns over the company’s growth trajectory. Analysts widely anticipated another disappointing quarter, despite hopes pinned on the rollout of a refreshed Model Y and the company’s long-term robotaxi ambitions.

The Bloomberg consensus projected Tesla would report global deliveries of 395,328, representing an 11% year-over-year decline, though still higher than the 336,700 vehicles delivered in Q1. Production was expected to hit 443,321 units, up from 410,800 in the same period last year.

Tyler Durden Sun, 07/06/2025 - 09:55

To Make America Great Again, Start Here

To Make America Great Again, Start Here

Authored by Charles Hugh Smith via OfTwoMinds blog,

Our status quo is so thoroughly corrupt that it's no longer even seen as corruption, it's just BAU--business as usual.

It's a big ask, but let's depoliticize the phrase "make America great again" and consider what this would actually entail, not as a lobbyists' grab-bag of tax breaks for the wealthy and arcane giveaways in 500-page Congressional bills, but as a restoration of the fundamental foundations of greatness.

In the conventional contexts of the current era, this boils down to ideology and finance. If we dial back culture-war over-reach and free up "market forces," for example, this will restore America's greatness.

The problem with all this kind of thinking is it's superficial and banal, for it ignores the real source of America's decline: the moral rot that has eroded every institution and every nook and cranny of our society. Whenever I mention this moral rot, I get immediate push-back of this sort: corruption has always been around, so today is no different from previous eras.

While it's self-evident that self-interest and greed manifest as corruption, it's not true that the systemic corruption of the present is no different from previous eras--it's worse, much worse because it's now normalized, and so we accept the most outrageous forms of corruption as "normal."

So private equity buys a company, loads it with debt, transfers all the borrowed cash to the private equity "owners," and then leaves the company a sinking hulk that soon declares bankruptcy. Or when private equity snaps up hospitals and healthcare clinics and prices rise not for better service but to "reward the owners," this plundering of "healthcare" is just good solid MBA-school maximization of shareholder value.

What few seem to notice is the barriers that limited the pillage and plundering of the private and public-sectors have all eroded or been hollowed out. The legal framework is now a mirror-image of the financial sector, a series of facades that mask the pillage and plundering: of course it's profitable, but it's also legal.

The social barriers have also been dismantled. There are no taboos left, as "anything goes" is the modern zeitgeist. The notion that corporations have a social responsibility to the community they're embedded in is now a quaint whiff of nostalgia, along with the notion that corporations have an implicit responsibility to serve the larger national interests as well as "shareholder value."

Every institution has been hollowed out by self-service. Is it any wonder than younger generations have near-zero trust in institutions, given that their PR veneer of "public service" is just a cover for milking the system for private gain?

If you read histories of capitalism--for example, Fernand Braudel's three-volume Civilization and Capitalism, 15th-18th Century ( Volume 1, Volume 2, Volume 3) you discover that "capitalism" only functions as advertised if it is embedded in a moral order, something Adam Smith understood.

In early European capitalism, Christianity (Catholic and Protestant) provided this moral order. In China, Confucianism provided the moral foundation of the society and the economic - political structures.

Consider Xi Jinping's campaign to unify Confucianism and Marxism. This is not an anachronism, it reflects Xi's understanding that Marxism does not provide the moral foundation needed to limit the corruption undermining China. Only restoring a Confucian moral order can do that.

I explored this in some depth in this essay Pieces of the China Puzzle (April 27, 2024).

Here is an excerpt:

As the author noted, "his attempted synthesis of Marx and Confucius has prompted bafflement, even mockery, among observers outside and inside China."

To me, there is nothing baffling in this synthesis; it not only makes perfect sense, it can be understood as essential in the broader context of China's history and culture.

If we truly want to make America great again, as opposed to using the slogan as cover for more grift and graft, then we have to start by recognizing the moral sinkhole we're in. Institutions, the government and corporations have all lost our trust because they're all cesspools of self-serving corruption.

No, this is not "normal" or "the way it's always been." Those are the excuses we deploy to avoid facing the truth: our status quo is so thoroughly corrupt that it's no longer even seen as corruption, it's just BAU--business as usual.

There will be consequences, for a society that lacks a moral foundation is a society shorn of value, a society of fakery, PR and narrative control designed to mask maximizing my gain regardless of consequences pillage and plunder.

When a hard rain finally falls, it will surprise us, for in our grandiosity and hubris, we imagined we were gods, immune to the fatal consequences of our corruption.

*  *  *

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Tyler Durden Sun, 07/06/2025 - 09:20

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