Big Blew It! IBM Crashes Most Since '60s Amid CapEx Woes; Goldman Warns Over 'Software Bear Case'

Summary:

• Wall Street Desks Stunned 
• IBM Shares Crash Most On Record, Exceeding Dot Com & 1987 Crashes 
• CEO Arvind Krishna Blamed Preliminary 2Q Results on "Shifting" Customer CapEx Spending

IBM's surprise second-quarter warning blindsided traders Tuesday morning, raising new concerns that enterprise technology budgets are being redirected toward AI infrastructure at the expense of traditional software and IT services.

Shares plunged 24% in the first 20 minutes of New York trading. Should those losses hold through the close, IBM would suffer its largest one-day crash on record, based on Bloomberg trading data going back to 1968.

Here's what Wall Street's top desks are saying in first takes:

UBS analyst Robert Ruple:

The big news this morning was a surprising negative preannouncement by IBM, down 22%, with Q2 sales of $17.2 bn versus $17.8 bn expected and EPS of $2.93 versus $3.02. Citing unanticipated capex reprioritization impacting client buying patterns with numerous large deals failing to close on time, cybersecurity distractions and some supply chain-related impact where they saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure (thanks to AI boom) ahead of expected price increases. This redirection of budgets towards AI has been a topic that Karl Keirstead/team have been articulating as potential risk for some time (particularly for incumbent SaaS suppliers and IT Services companies), which sounds like a harbinger of commentary that could be further accentuated by other software, IT services and hardware-related companies as Q2 reporting season progresses that is sure to weigh on sentiment incrementally.

David Vogt provides his initial thoughts on the IBM miss and these results suggest that enterprise IT spending pressures are hitting sooner than investors anticipated, leading to a revenue shortfall and non-GAAP EPS guidance of $2.93, below both expectations and consensus. The primary driver was weakness in IBM's zSeries mainframe cycle, which hurt its high-margin Transaction Processing (TP) business. While Red Hat delivered solid 11% constant-currency growth and recently acquired assets such as HashiCorp and Confluent performed well, these positives were overshadowed by a sharp decline in TP revenue, which appears to have fallen in the mid-teens year over year and represents nearly 30% of IBM's Software segment. As a result, investors are likely to reassess IBM's long-term software growth outlook, particularly for 2027 and beyond, as rising infrastructure costs and tightening IT budgets weigh on demand. These results reinforce concerns that stronger growth areas like Red Hat may not be sufficient to offset prolonged weakness in TP business, increasing pressure on IBM to pursue larger acquisitions or other growth initiatives to sustain its software growth trajectory remaining at neutral.

Goldman analysts:

IBM: Negatively preannounced Q2 results this morning, with Revenues coming in well below estimates on shortfall led by Software & Infrastructure performance. Stock -17% in pre. Prelim Q2 Revenue missed estimates ($17.2bn vs. cons $17.9bn).  Company said "did not anticipate magnitude of CapEx reprioritization."  Shortfall vs. consensus was led by "Software and Infrastructure performance shortfall." Mgmt commentary: "What played out was worse than our expectations, driven by a shortfall in our Z performance and the associated software stack, primarily in Transaction Processing. In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases. This dynamic impacted client buying patterns. While we anticipated some supply chain related impact in our expectations, we did not anticipate the magnitude of the capex reprioritization." BOTTOM LINE:  This should fully play into the Software bear case, and would imagine should drive fairly broad-based weakness across software + services layer today (most names down 3%+ early in pre).

Goldman analyst James Schneider:

What happened: We expect the stock to trade meaningfully lower following IBM's negative pre-announcement this morning, which was driven by a shortfall in Infrastructure and Software to a lesser extent. We believe the mainframe shortfall reflects client demand re-prioritization toward near-term server and other hardware purchases given surging memory and component prices, a dynamic consistent with what peers such as Dell and HP have cited. This reprioritization also drove a shortfall in Transaction Processing because of perpetual licenses tied to new mainframe purchases. In addition, we believe the company's Data & Automation software segment saw weaker demand due to company-specific execution issues. Red Hat results were in line with expectations at a growth of 11% in the quarter. We leave our estimates unchanged for now, pending further color from the company on next week's earnings call on updated 2026 guidance and potential remediation efforts.

BNP Paribas analyst Stefan Slowinski: 

IBM is trading -22% pre-market on a disappointing Q2 earnings pre-announcement, driven by the company's Infrastructure (hardware) and Software businesses, blamed on capex reprioritization (i.e. crowding out) and delays caused by cybersecurity uncertainty, with no indication of any improvements yet.

Barclays analyst Andrew Keches:

The news: IBM pre-released selected 2Q26 results alongside a letter to shareholders, with revenue below expectations amid shortfalls in Software and Infrastructure. Revenue came in at $17.2bn overall (vs. $17.9bn est.), while at the segment level, Software grew 5% y/y (vs. +11% est.), Infrastructure fell 7% (vs. -3% y/y est.), and Consulting was flat (vs. +2% y/y est.). The company attributed most of the underperformance to unexpected shifts in clients' late-quarter budget allocations toward securing supply-constrained infrastructure ahead of price increases. IBM also acknowledged an execution component, with numerous large deals failing to close on schedule.

The context: Today's update comes at a sensitive point for IBM's investment narrative. Software has become the company's primary growth engine, and management had increasingly framed AI as additive to the software stack rather than a source of disruption. Today's update complicates that framing as the shortfall was concentrated in Z and the associated Transaction Processing software stack, with clients redirecting spending toward supply-constrained servers, storage, and memory. The key debate, in our view, will be whether this represents a temporary shift in the timing of enterprise purchases, or evidence that rapid AI infrastructure investment is beginning to crowd out portions of traditional software spending.

Our take: Clearly the results are a disappointment and the equity move alone (-20% premkt as of writing) will be a drag on credit performance. Credit metrics would not be impacted in a meaningful way, but the development adds to already weak sentiment in the name. We are mindful of the pointed M&A comments made on the last call (valuations attractive, appetite could be higher than in normal years), and although this pre-release suggests nothing about the topic, weak results will add to the overhang. Moreover, IBM spreads have held in better than most A/BBB TMT curves in the recent TMT sell off, widening the differential to BBB telco and single-A software curves such as NOW. To be clear, we view this quarter as a one-off rather than a step function in mainframe and software demand and also acknowledge that IBM has the cash flow to absorb medium sized M&A, but the impetus to step in and defend the structure at these levels is not obvious to us.

Laterals: The clearest potential beneficiaries from IBM's commentary are hardware providers levered to the spending categories being prioritized, such as servers and storage at DELL and HPE, and memory at MU. Conversely, the update may reinforce concerns around software names broadly, as well as consulting and IT-services businesses such as ACN and KD, if AI infrastructure investment is crowding out other portions of enterprise technology budgets. That said, we are somewhat surprised by the breadth of the read-through across the group so far this morning. IBM explicitly acknowledged company-specific execution issues, including large deals that failed to close on schedule, and the decision to pre-release more than a week before its scheduled earnings call suggests that its shortfall may be more outlier than industry-wide. We understand that this is a "sell first, ask questions later" market, but we would be cautious about treating IBM's results as a 1:1 read-through to every software and services company.

Laterals: The clearest potential beneficiaries from IBM's commentary are hardware providers levered to the spending categories being prioritized, such as servers and storage at DELL and HPE, and memory at MU. Conversely, the update may reinforce concerns around software names broadly, as well as consulting and IT-services businesses such as ACN and KD, if AI infrastructure investment is crowding out other portions of enterprise technology budgets. That said, we are somewhat surprised by the breadth of the read-through across the group so far this morning. IBM explicitly acknowledged company-specific execution issues, including large deals that failed to close on schedule, and the decision to pre-release more than a week before its scheduled earnings call suggests that its shortfall may be more outlier than industry-wide. We understand that this is a "sell first, ask questions later" market, but we would be cautious about treating IBM's results as a 1:1 read-through to every software and services company.

Bloomberg tracked analysts have an average 12-month price target of $300 on IBM, highlighting how far Wall Street expectations had run ahead of the shock preliminary second-quarter results earlier. Of the 25 analysts covering the stock, 17 rate it a Buy, six are Neutral and just two recommend selling. 

SaaSpocalypse Is Back: IBM Crashes Most Since 1987 As Customers Abruptly "Shift CapEx Spending"

IBM shares plunged almost 20% in premarket trading, putting the stock on track for its worst intra-day collapse since the infamous Oct. 19, 1987.

Worse than the Dot Com crash...

The catalyst for the selloff was IBM CEO Arvind Krishna's letter to investors outlining preliminary second-quarter results.

Here is what's key:

• IBM CEO: DID NOT ANTICIPATE MAGNITUDE OF CAPEX REPRIORITIZATION

Traders were likely caught off guard by a 7% decline in infrastructure revenue, raising new concerns about demand across one of IBM's key business segments.

Here are the preliminary 2Q results:

• Revenue of $17.2 billion, up 1%

• Software revenue up 5%

• Consulting revenue flat, up 1% at constant currency

• Infrastructure revenue down 7%

Krishna detailed in the letter to investors that customers unexpectedly redirected their June technology budgets toward servers, storage and memory to secure scarce equipment before anticipated price increases.

In return, that left less money and management attention available for IBM's z17 mainframes and related transaction-processing software. Deals IBM expected to close during the quarter were delayed or pushed into later periods, rather than necessarily canceled outright.

Here are Bloomberg headlines:

• IBM CEO: SAW CLIENTS SHIFT QUARTERLY CAPEX SPEND IN JUNE

• IBM CEO: THIS DYNAMIC IMPACTED CLIENT BUYING PATTERNS

Signaling a return to the SaaSpocalypse (client spend shifting from commoditized software to constrained hardware), Krishna wrote:

When we discussed our expectations with you in April, we noted that we would be wrapping on the launch of z17 in the second quarter.

Given this was the strongest start to a mainframe program in our history, we expected Infrastructure revenue to decline low-single digits for the year, beginning this quarter.

What played out was worse than our expectations, driven by a shortfall in our Z performance and the associated software stack, primarily in Transaction Processing.

In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases.

This dynamic impacted client buying patterns. While we anticipated some supply chain related impact in our expectations, we did not anticipate the magnitude of the capex reprioritization.

In addition, clients were distracted with rapidly-evolving, industry-wide cybersecurity concerns in the quarter.

Krishna also admitted: "We did not adapt and move quickly enough," with large deals failing to close on expected timelines.

The key question is whether IBM is emerging as an early warning sign that the AI boom is beginning to crack, with a potential "token revolt" taking shape as customers push back against surging AI costs.

Tyler Durden Tue, 07/14/2026 - 10:36

Watch: Smug NYT Podcaster Visibly Annoyed When Mick Jagger Defends Elon Musk

Authored by Steve Watson via Modernity News,

Mick Jagger just delivered a masterclass in cutting through media spin, leaving a leftist New York Times podcaster visibly rattled as he clarified that his "mad mogul" lyric about Elon Musk was actually a compliment.

The Rolling Stones legend refused to play along with the expected narrative during the interview, pushing back firmly when the host, David Marchese, presumed the line was a diss.

Instead, Jagger highlighted Musk's real-world achievements in space, crediting him with stepping up where government agencies have fallen short.

Watch the NYT podcaster's face when he realizes Mick Jagger likes and respects Elon Musk—after initially thinking a new Rolling Stones song lyric was a diss:

NYT: "But something's nagging at you, what is it?"

Jagger: "No, it's not nagging. It's just that people, they hear one... pic.twitter.com/UuuIgPSSyG

— Julia ?? (@Jules31415) July 14, 2026

In the exchange, Jagger explained the context behind the lyric from the new Rolling Stones album Foreign Tongues. He pointed to the rescue of the stranded NASA astronauts last year, noting that Musk's SpaceX provided the transportation NASA couldn't.

Jagger told the interviewer: "It's not nagging, but people hear one word and they don't really listen to the line. So it's like, 'Mick Jagger has a go at Elon Musk.' You're not listening to the line, you're only listening to 'Musk.' ... even though I do call him mad."

Marchese's expression totally changed from smiling to frowning in an instant when Jagger refused to confirm the interviewer's gleeful expectation that the singer would criticise Musk.

He continued: "When I wrote that, I was thinking that because of him, they were able to get those astronauts back that were stuck because he provided the transportation because NASA couldn't provide the transportation..."

"Who would you trust to get you into space?" Jagger continued, adding "Would you trust Boeing or would you trust NASA or would you trust mad mogul Mr. Musk? It's really a side-winding compliment because he was the one I remembered was able to do that when the others couldn't."

Jagger exposed how Marchese had completely misinterpreted the lyrics of the song, making him look foolish.

The podcaster pressed on, noting Musk was the only person named on the album, implying significance.

Jagger stood his ground, adding that "mogul doesn't always go down well, either," and the host again showed how one dimensional he is by suggesting "No one likes a mogul."

Jagger was clearly exhausted with the exchange as Marchese simply refused to understand what the singer was getting at.

In another recent NYT interview, Jagger contrasted his approach to performing live with Bruce Springsteen's rabid anti-Trump activism, emphasizing that his job is to give fans a great time, not sermonize.

Jagger's nuanced expression underscores a refreshing independence in an industry often dominated by predictable elite consensus, and his clarity cuts against the grain of performative outrage.

Moments like this expose the disconnect between coastal media bubbles and ground-level realities.

The Rolling Stones continue to prove their enduring relevance not by chasing trends, but by staying true to a no-nonsense ethos that prioritizes delivery over dogma. Jagger's unapologetic take serves as a subtle rebuke to those who weaponize art for division rather than unity through great music and honest reflection.

Jagger gets it - focus on what works, entertain the audience, and let results speak louder than spin. In a free society, that kind of straight talk is exactly what keeps culture vibrant against efforts to enforce conformity.

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

Tyler Durden Tue, 07/14/2026 - 10:05

Warsh Tells Congress Fed Has "No Tolerance For Elevated Inflation": Watch His Testimony Live

Fed Chair Warsh (voter) will deliver his first semi-annual testimony as Fed Chair to the House. Warsh’ text was e released at 08:30EDT (link here) and he is scheduled to begin his testimony at 10:00EDT.

In his prepared remarks, Warsh said policymakers at the central bank have no tolerance for high inflation, reiterating a vow to tame price growth that has been elevated for five years. 

“The members of our committee have no tolerance for persistently elevated inflation,” Warsh said Tuesday in testimony he’s scheduled to deliver before lawmakers at 10 a.m. “And we share a resolute commitment to restoring price stability.”

The new Fed chairman has emphasized policymakers’ commitment to tackling inflation since he took office in May, and said the number one objective is to get monetary policy right: “If we get policy right — and we will — the inflation surge of the last five years will be a thing of the past,” Warsh said. 

As Bloombgerg notes, Warsh’s remarks before the panel come amid warnings from several other Fed policymakers that higher interest rates may be needed to curb inflation, especially in the context of soaring memory prices.

Warsh was upbeat on the overall economy, describing the labor market as broadly stable with few signs of layoffs and solid nominal wage growth. The Fed chief was more circumspect on the artificial intelligence boom, which he said is driving a surge in business investment but also posing uncertainties for the economy.

“We don’t know the extent to which the economy will benefit from the AI build-out. Yet it seems inevitable that what is now called "AI investment" will soon be called just "investment." Even so, new opportunities for the economy introduce new challenges for policymakers. We at the Fed are monitoring the implications for inflation and the labor market." Warsh said.

“New opportunities for the economy introduce new challenges for policymakers. We at the Fed are monitoring the implications for inflation and the labor market.”

Minutes of the Federal Open Market Committee’s June 16-17 meeting reflected growing concern among policymakers over inflation just as worries over the labor market slightly receded. New rate projections released alongside that decision showed nine officials foresaw at least one quarter-point hike this year, with six anticipating at least two. Another nine expected no move or a cut. Warsh, who has been critical of so-called forward guidance that offers clues on the path for rates, declined to submit a forecast.

The testimony was prepared prior to the Bureau of Labor Statistics’ release of fresh inflation data that showed consumer prices declined in June for the first time in six years and a key gauge of underlying inflation was little changed. As noted earlier, headline CPI fell 0.4% from May, mostly reflecting a slump in energy prices amid a pause in the US and Iran war. However, a resumption of hostilities has since sent oil prices surging again with Brent crude topping $87 a barrel for the first time in a month and threatens to push inflation sharply higher again. Core CPI, which excludes volatile food and energy components, was flat. On a year-over-year basis, core prices increased by a slower-than-expected 2.6%.

The Fed has kept rates between 3.50-3.75% for four straight meetings, and Warshʼs term begins amid a backdrop of sticky inflation, potential tariff pass-throughs, and energy supply shocks, which have stoked fears of further policy tightening. The Fedʼs June meeting minutes released this week showed that some officials support resuming hikes ahead; while traders will look to Warshʼs remarks for any explicit thresholds that could trigger a rate rise, Warsh has notoriously leaned against any forms of forward guidance.

Speaking last week, Warsh reiterated the Fed will not provide it, describing it as an obstacle to healthy FOMC debate; he added that rates should be the primary monetary policy tool, and expressed hope that new tech can improve economic understanding within a period of 9-12 months.

Watch his testimony live at 10am ET

Warsh's full prepared remarks are below:

Chairman Hill, Ranking Member Waters, and other members of the Committee—good morning.

It's a privilege to join you. At my first appearance before this panel, I am particularly honored to represent my superb colleagues throughout the Federal Reserve System.

In submitting the Board's Monetary Policy Report, I think of a long line of central bank chiefs who came before Congress in keeping with the Federal Reserve Act. I think also of earlier efforts, going back to the time of the Framers, to create a central bank that would endure and serve the nation's founding principles.

One of the large figures in the Federal Reserve's history is Alan Greenspan, who passed away last month after a century of life. By my count, my friend appeared before Congress more than two hundred times, displaying his agile mind and his distinctive way with words. We at the Fed recall the Chairman's strong and steady hand in a period of rapid economic change. And we honor his memory.

As a country, we just marked our 250th year. And when Americans count our blessings, we can include an economy predicated on the brilliance of our constitutional design and system of ordered liberty—an economy without equal in all it's done for human flourishing.

Some forms of Fed communications are discretionary, but not this one—and for good reason. It is a prudent and wisely conceived obligation, designed to keep the Fed accountable, responsible, and faithful to its congressional mandate of full employment and price stability. These obligations are of a piece with the Fed's rightful independence in the conduct of monetary policy.

Today we are at a hinge point in history. It's up to all of us to meet this moment. The task of this generation of policymakers—and of individuals throughout the private sector—is to ensure the American economy excels far into the future.

* * * *

The Fed's number one objective is to get monetary policy right—or as near to it as we possibly can. That is our clear and constant aim, the star we steer by. And if we get policy right—and we will—the inflation surge of the last five years will be a thing of the past.

A month ago, I chaired my first meeting of the Federal Open Market Committee. My colleagues and I recognize that high inflation has been an undue burden on American households and businesses. While monthly price fluctuations are inevitable—especially in an unsettled world—underlying inflation over longer time horizons is determined largely by monetary policy.

The members of our Committee have no tolerance for persistently elevated inflation. And we share a resolute commitment to restoring price stability. This was the focus of our June meeting, at which we decided to hold the target range for the federal funds rate at 3-1/2 to 3-3/4 percent.

Naturally, our work at the Fed demands a proper reading on economic conditions. As you see in our Monetary Policy Report, economic activity is expanding at a solid pace, showing resilience in the face of recent developments. Household consumption growth is moderate. Manufacturing output has moved up steadily this year. The housing sector, however, gives a different picture and continues to lag.

The most striking feature of the economy right now is business investment. The rapid pace—which appears to be accelerating—reflects, in large part, the construction of data centers and the immense demand for the AI-related equipment and software that fill them. Investment in equipment overall increased about 8 percent for the year ending in the first quarter. Within that category, high-tech spending logged an especially impressive growth rate of nearly 25 percent on a four-quarter basis. We don't know the extent to which the economy will benefit from the AI buildout. Yet it seems inevitable that what is now called "AI investment" will soon be called just "investment." Even so, new opportunities for the economy introduce new challenges for policymakers. We at the Fed are monitoring the implications for inflation and the labor market.

That brings me to the supply side, where productivity growth has been strong, predating gains from AI adoption. America's labor market appears broadly stable. Job creation has kept pace with the workforce. The unemployment rate is low and has changed little over the past year. We're seeing relatively few layoffs, only slight variance in the rate of job vacancies, and solid growth in nominal wages.

* * * *

I came to my new position as a believer in the best traditions of the Federal Reserve. The performance of our nation's central bank depends on a commitment to excellence, professionalism, and integrity. Humility about what we know—and the courage to revisit our prior views—are also hallmarks of a great institution like ours. All of these standards define the culture of the Fed, and it's my responsibility to uphold them.

I am heartened by the welcome I've received and by the encouragement of my colleagues in considering how best to advance the conduct of policy. We have a duty to point the institution forward—to take a fresh look at current practices to make sure we are serving our objectives.

And we are going about it systematically. I have appointed a task force in each of five areas that are central to the broad conduct of monetary policy. We have engaged some of the very best minds, from inside and outside the economics profession. They are supported by specialists from the Fed's expert staff. The task forces have been given a straightforward charge: Start with first principles, ask hard questions, examine current practices, consider alternatives, and, ultimately, propose next steps for policymaker consideration. The purpose here is to equip the Fed to make better decisions in monetary policy and to put these years of high inflation behind us.

The first task force will assess the form and function of Fed communications. It will ask: What is the efficacy, and what are the risks, of how we currently deliberate and convey our policy choices?

The second task force will review the Fed's balance sheet policies, including the ample-reserves regime and the composition of asset holdings. It will ask: What are the advantages and disadvantages of that regime, and what are the alternatives?

The third task force will evaluate new data sources and consider methodological changes to improve the information upon which we rely. It will ask: How do we ensure that policymakers are receiving accurate, relevant, contemporaneous, actionable data on the state of our economy?

Our task force on productivity and jobs will survey the pace, reach, and impact of new general-purpose technologies. We've experienced technological advances all our lives. But given the scale of investment—and potential changes in the method and speed of innovation—we might be seeing changes of a different order. The task force will survey the landscape and ask: What do these changes mean for America's productive capacity and for American workers? And what are the implications for the Fed in pursuit of our employment and inflation mandates?

Finally, the task force on inflation frameworks will examine the drivers of inflation and weigh a range of ideas for delivering price stability. This group will ask: Do our models and our thinking provide an empirically robust view of prices and outputs in our dynamic economy? Can we do better?

We are starting a new chapter at the Federal Reserve at a consequential time for our nation. It's been a privilege to return to the Fed and to work again with so many talented and dedicated people I'm fortunate to call my colleagues.

I can report to you that we intend to be fit for purpose and focused on the future. We are the Federal Reserve, and we are as determined as ever to fulfill the mission that Congress has given us.

Thank you, and I welcome your questions.

Tyler Durden Tue, 07/14/2026 - 09:45

Warren Buffett Cuts Gates Foundation From Annual Stock Giving As Epstein Scandal Shadows Over Bill Gates

Warren Buffett excluded the Gates Foundation from his annual charitable stock gifts for the first time in two decades, as scrutiny over Bill Gates' connections with convicted sex offender Jeffrey Epstein continues to cast a dark shadow over Gates and the foundation.

CNBC reports that the 95-year-old chairman will donate 9 million Class B shares to the Susan Thompson Buffett Foundation, and 1 million shares each to the Sherwood Foundation, the Howard G. Buffett Foundation, and the Novo Foundation.

"My goal is to dispose of all of my Berkshire shares within about eight years," Buffett wrote in a statement announcing the gifts.

He added, "As I explained last year, my children are unfortunately growing older. I have every hope that the three of them are able to carry out the disposal of my shares by December 31, 2034."

Buffett's exclusion of the Gates Foundation breaks decades of giving; the foundation has received more than $47 billion in Berkshire stock from Buffett since 2006. This follows scrutiny of the foundation's ties to Epstein, and Buffett has recently said he has not spoken with Gates since the controversy erupted.

The Wall Street Journal recently reported that the Gates Foundation slashed 500 jobs, or about 20% of its staff, as the organization has come under fire for Gates' ties to Epstein. Back in February, Gates pulled out as a keynote speaker at a high-profile global AI summit in India.

The Gates Foundation CEO recently told employees during a town hall event that the Gates-Epstein relationship had deeply tarnished the nonprofit's reputation, according to a Financial Times report.

Bill Gates with an unidentified but manifestly well-proportioned brunette number, in a photo from the Epstein files (House Oversight Committee)

However, it is not just the Gates-Epstein ties that Buffett should be concerned about.

Late last year, the Gates Foundation had to publicly sever ties with far-left philanthropic adviser Arabella Advisors, which engineered a revolutionary network of nonprofit entities, including the New Venture Fund, Sixteen Thirty Fund, Hopewell Fund, and Windward Fund, that support the permanent protest industrial complex against President Trump.

Meanwhile, even left-wing outlets like Bloomberg are criticizing the Gates family.

How will Bill repair his image, or will he ever be able to?

Tyler Durden Tue, 07/14/2026 - 09:25

Rate-Hike Odds Slump As US Consumer Prices Plunge Most Since COVID In June

With oil prices having tumbled (before this latest resurgence) but semiconductor prices soaring still, expectations were for a small 0.1% MoM decline in CPI but in fact it printed dramatically cooler, dropping 0.4% MoM - the biggest monthly decline since COVID (April 2020), dragging the YoY CPI change down to +3.5% YoY...

Source: Bloomberg

Both Goods and Services costs saw YoY growth decline...

Energy dominated the decline while Core Services rose very modestly...

CPI breakdown:

• Headline CPI down 0.4% MoM in June after rising 0.5% in May. This decline in the all items index was the largest 1-month decrease since April 2020 when it fell 0.8% .

• Over the last 12 months, the all items index increased 3.5% YoY after rising 4.2% in May.

  • Core CPI rose 2.6% over the year, following a 2.9% increase in May.

  • The energy index increased 15.7% for the 12 months ending June. The food index increased 3.0% over the last year.

  • The shelter index increased 3.3% over the last year.

  • Other indexes with notable increases over the last year include airline fares (+26.5%, medical care (+2.0%), recreation (+2.8%), and household furnishings and operations (+2.5%).

Headline components:

• CPI energy fell 5.7% in June after rising 3.9% in May, 3.8% in April, and 10.9% in March. The energy index was the largest contributor to the monthly all items decrease, more than offsetting increases in other indexes including those for shelter and food.

• CPI for food increased 0.2% over the month, as did the index for food at home and the index for food away from home.

Energy's decline was the largest since Aug 2022...

Oil's tumble (as we predicted) helped a lot...

On a short-term annualized basis, inflation collapsed... from 8.2% to 2.8%...

Core CPI was unchanged (also below expectations), slowing the annual pace of inflation to +2.5% YoY...

Core components:

The index for all items less food and energy was unchanged in June (technically down 0.017). Indexes that decreased over the month include motor vehicle insurance, communication, apparel, medical care, and used cars and trucks. Conversely, the indexes for recreation, household furnishings and operations, and personal care were among the major indexes that increased in June.

• The shelter index increased 0.1 percent over the month, the smallest 1-month change reported for that index since January 2021.

  • The index for owners’ equivalent rent rose 0.2 percent in June, and the index for rent increased 0.1 percent.

  • The lodging away from home index fell 2.3 percent over the month.

  • Shelter index rose 3.28% YoY, down from 3.37% in May and first annual decline since March

  • Rent index rose 2.84% YoY, down from 2.92% in May and first annual decline since March

• The motor vehicle insurance index declined 2.0% in June after falling 1.7% in May.

• The index for new vehicles was unchanged in June after declining 0.3% in May

  • The used cars and trucks index fell 0.2% in June.

• The index for communication fell 1.5% over the month, and the index for apparel declined 0.6%.

• The medical care index decreased 0.1% in June after rising 0.3 percent in May.

• The index for physicians’ services decreased 0.2% over the month, and the index for prescription drugs declined 0.1%.

  • The hospital services index increased 0.1% in June.

• The index for recreation increased 0.5% over the month after rising 0.3% in May.

• The household furnishings and operations index rose 0.2% in June as did the personal care index.

Supercore CPI also saw it biggest MoM drop since COVID, down -0.2% MoM, led by Education & Communication, and Transportation services

"This is great news for Kevin Warsh and the Fed", said David Russell, Global Head of Market Strategy at TradeStation

"Everyone expected energy to drop, but there was also good news in car prices, shelter and apparel.

However, these trends might not last if renewed conflict in the Middle East lifts oil prices. Disinflation gets harder going forward if energy doesn’t keep falling.

If JPMorgan traders are right, this should mean a 1-1.5% gain in stocks...

Rate-hike odds plunged...

July hike odds collapsed top pre-Warsh levels...

2026 rate-change expectations tumbled to 35bps (1 hike prices in and a coin flip for a second)...

So will Fed Governor Waller walk back his hawkishly panicky remarks yesterday?

Tyler Durden Tue, 07/14/2026 - 09:10

Futures Mixed Ahead Of CPI And Warsh Testimony, As IBM Sinks, Bank Earnings Fizzle

US stocks are struggling for direction as traders waited to buy the dip on a busy day that kicked off with Wall Street earnings whichwith JPM, BofA, Goldman, Citi and Wells all reporting. Kevin Warsh’s testimony before Congress and CPI data are due later. As of 8:00am ET, S&P 500 futures fell 0.2% with Nasdaq 100 contracts up 0.6%, set for a rebound from the selloff in AI-linked names yesterday and defying declines elsewhere. In premarket trading, IBM crashed 20% - the most since 1987 - after unexpectedly preannouncing a big revenue miss; elsewhere, semiconductors are leading after Korea's Kospi staged a powerful rebound from session lows while SK Hynix saw a 10% swing in Korea trading; Mag7 is mixed, and the AI theme is bid.  WTI crude traded around $80/bbl and Brent above $86/bbl (both off session highs) as the ceasefire / MoU appear to be voided with both sides claiming control of the SoH.  Both Disc and Staples are lower, perhaps reflecting some consumer fears. Energy / Mats are bid on the Middle East, Fins are bid into earnings, Industrials are higher with the AI theme with HC mixed. Higher oil prices lifted odds of a July US rate hike in place, with swap markets signaling a nearly 40% chance of a hike when the Fed meets later this month. The yield on two-year UK gilts touched the highest level since May. Treasuries edged higher and the dollar fell. Traders will closely watch the CPI data, especially after the Fed’s Waller, a former dove, said Monday that a hike is on the table if inflation stays hot and as bond market volatility saw a double-digit jump. The recent fall in gasoline prices likely helped drag down the CPI print, which may notch its first monthly decline since the onset of the pandemic in 2020.  The macro focus is on CPI plus the consumer / GDP read-through from GSIBs. The data calendar includes weekly ADP employment change (8:15am), June CPI (8:30am) and May TIC flows (4pm), Fed calendar includes Warsh’s testimony on its Semi-Annual Monetary Policy Report before the House Financial Services at 10am. Also scheduled to speak are Governor Barr (12:40pm), Chicago Fed’s Goolsbee (1pm) and Governors Cook (1:30pm) and Bowman (2:55pm).

In premarket trading, Mag 7 stocks are mixed:  Apple is down 0.7% after being cut to underweight at KeyBanc, which expects weaker device demand and service revenue growth in the US (Nvidia +1.2%, Tesla +0.3%, Amazon -0.4%, Alphabet -0.5%, Microsoft -2.8%, Meta Platforms -1.1%).

• IBM (IBM) sinks 19% after reporting preliminary quarterly sales results that missed analysts estimates, with Chief Executive Officer Arvind Krishna saying customers were holding back spending.
• Software and IT/professional services stocks are broadly lower after IBM’s preliminary revenue for the second quarter fell short of the consensus estimate. Microsoft falls 2.8%, Intuit drops 5% and Adobe declines 4.8%
• CoStar Group (CSGP) falls 5% after the real estate analytics firm named Robin Rossmann as the company’s next CFO. Rossmann will succeed Christian Lown, who is stepping down to pursue an opportunity outside the company’s industry.
• Goldman Sachs Group (GS) climbs 1.3% after posting $7.42 billion for a quarter with record-breaking stock-trading results, driven by financing and taking profit in arranging bets.
• JPMorgan (JPM) falls 2% after the lender said it sees full year adjusted expenses at about $107.5 billion, previously seeing about $105 billion.
• O-I Glass (OI) slips 3% after BofA cut its rating to underperform from buy, saying relative upside for the shares may lag due to volume weakness in glass packaging.
• Trex (TREX) climbs 3% after the decking manufacturer’s second-quarter net sales forecast beat the average analyst estimate.

In other AI related developments Nvidia and Mitsubishi Heavy Industries are looking to tie up on AI data center technologies, Nikkei reported, and Samsung is said to be in early discussions for a potential US share sale. Memory and chip stocks remain the core equity theme after investors poured $21 billion into ETFs last week, according to JPMorgan. In other corporate news, Brown-Forman President/CEO Lawson Whiting is set to step down once a successor is named. BP said it expects to write down another $1 billion from energy transition assets in the second quarter, as the British major continues the painstaking work of re-orientating itself toward its core oil and gas business. Apple falls in premarket trading after being cut to underweight from sector weight at KeyBanc, which expects weaker device demand and service revenue growth in the US.

Today's event-filled calendar began with a mixed reaction to Goldman Sachs, JPMorgan, Bank of America, Wells Fargo and Citigroup, as the banks were already priced to perfection, and despite blowout earnings, their stocks mostly dipped in premarket trading. June CPI data is expected to show some relief after inflation accelerated rapidly from March through May. Federal Reserve Chair Warsh is scheduled to testify before House members hours later.

“Geopolitics on the margin is a negative, but the oil price has not spiked dramatically,” said Richard Flax, chief investment officer at Moneyfarm. “I expect Warsh will give a sort of data-driven speech rather than say too much about forward guidance. For us, it’s more about the inflation data.”

Warsh would probably prefer not to present this week’s Humphrey-Hawkins testimony, but “Congress isn’t inclined to let Warsh off the hook,” writes Bloomberg Senior US Economist Andrew Sacher, who outlines what to expect from Warsh’s appearances. 

In an escalation of the standoff between the US and Iran over the Strait of Hormuz, President Donald Trump reinstated the blockade of Iranian ships transiting the waterway and demanded a 20% reimbursement for all other cargo. US forces also completed another round of strikes against the Islamic Republic.

“We know the market can sustain far higher oil prices and US stocks keep rising,” said Alpesh Patel, managing partner at RootBridge Capital. “The only thing that matters is any indication rates are going to rise.”

Global investors buying stocks aggressively should consider reducing exposure with investor sentiment getting extremely bullish, according to the latest BofA Global Fund Manager Survey, with positioning on US equities now at its highest level since December 2024 at a net 24% overweight, cash levels “uber-low” at 3.6%, and BofA’s Bull & Bear Indicator now at the extreme bull reading of 9.

Overnight, China exports climbed 27% from a year earlier, exporting a record $412 billion worth of goods in June, blowing past all forecasts and turbocharged by a global investment supercycle in AI.

In a sign of confidence that the artificial-intelligence buildout will keep on fueling demand for chips, people familiar said Samsung Electronics is exploring a potential offering of ADR, similar to SK Hynix, in hopes of top ticking the memory bubble. Semiconductor stocks bounced in early US trading after Monday’s rout. “This suggests that the Nasdaq could break its short-term negative correlation with the oil price, and rise alongside energy prices if this continues,” wrote Kathleen Brooks, research director at XTB.

In Europe, the Stoxx 600 slid 0.4%, having dodged the weakness in tech stocks on Monday, is falling 0.6% with a drag from the media, travel and consumer sectors. Ericsson AB’s shares fell as much as 10% after warning that margins in its main networks business will come under pressure. Here are the biggest movers Tuesday:

• Mycronic shares gain as much as 14% to hit a record high as earnings from the Swedish electronics equipment group beat forecasts. DNB described the report as “impressive”
• BP shares surged as much as 3.3% to touch a one-month high as Jefferies noted that the oil major’s net debt estimates for the second quarter had undershot expectations
• Allegro climbs as much as 6.5% to highest since 2022 after the Polish e-commerce company reported strong preliminary 1H results and indicated it may raise its full-year outlook
• Salzgitter shares rise as much as 7.4% as Jefferies upgrades its rating on the steel producer to buy from hold, citing benefits from EU steel quotas
• Hapag-Lloyd shares rise as much as 8.2% in Frankfurt after the German container shipper boosted its Ebitda forecast for the year
• Genus shares rise as much as 14%, the most in about six months, after the animal genetics specialist said it now sees full-year profit ahead of market expectations
• Ericsson shares fall as much as 10% after the Swedish mobile networks and technology group said margins for its key Networks division will come under pressure in the second half of 2026, overshadowing otherwise in-line figures
• IntegraFin shares fall as much as 5.4%, the most in nearly two months, as the investment platform sees third-quarter flows come in slightly below some analysts’ expectations
• Norske Skog falls as much as 18%, the most since February 2025, after the Norwegian paper and forestry firm reported its latest earnings, which included misses on total operating income and Ebitda
• Norion Bank falls as much as 13%, the most since February, after the Swedish banking group reported weak second-quarter earnings. SB1 Markets points to an underlying miss in net interest income and higher costs

Asian stocks reversed earlier losses as South Korean memory chipmakers rebounded in late trading. The MSCI Asia Pacific Index gained 0.4% after falling as much as 1.6% earlier in the session. Samsung was the biggest boost to the index amid news the company was in early discussion for a potential share sale in the US. SK Hynix also erased an early plunge, helping to lift the Kospi gauge. The movements in Korea’s memory chip stocks underscore the extreme volatility gripping some of the world’s biggest beneficiaries of the artificial intelligence boom. Japan’s Topix rose as investors looked for opportunities in non-tech sectors that have lagged the broader market. Taiwan’s Taiex index dropped 1.4% to its lowest in more than two weeks.

The “recent volatility indicates you are starting to build two camps — one remains very optimistic, whereas you have a growing group that question the sustainability,” said Mattias Martinsson, chief investment officer at Tundra Fonder AB. “That creates a tug of war, from day to day, which has very little to do with geopolitical events. For today the optimists have the upper hand.”

In rates, treasuries are little changed after retreating from session highs reached as oil extended its climb, with investors awaiting testimony by Fed Chair Kevin Warsh and June CPI report. US 10-year yield near 4.62% outperforms bunds and gilts in the sector by 2bp and 4bp following retreat from 4.634%, highest since May 20; curve spreads are also little changed. 2- and 5-year tenors reached new YTD yield highs. Around 11bp of Fed tightening is priced in for the July policy meeting following Monday’s increase on hawkish comments from Fed Governor Christopher Waller.  Money markets see at least one Bank of England and one European Central Bank rate hike this year, while leaning strongly toward a second in December. IG dollar issuance slate empty so far. Monday saw a combined $6.7 billion priced as issuers paid about 2.7 basis points in new issue concessions on deals that were 5.5 times covered.

In FX, the Bloomberg Dollar Spot Index is down by 0.2% and moves across currency markets remain relatively muted.

In commodities, Brent extended its gain to $86/barrel on the new US blockade of Hormuz is driving more rate-hike bets from traders and rippling across the short-end of European bond markets.  WTI crude oil futures are up about 3%, off session highs reached as the truce between the US and Iran collapsed following fresh attacks on shipping in the Strait of Hormuz. Gold is gaining to move back above $4,000/oz. 

The US economic data calendar includes weekly ADP employment change (8:15am), June CPI (8:30am) and May TIC flows (4pm), Fed calendar includes Warsh’s testimony on its Semi-Annual Monetary Policy Report before the House Financial Services at 10am. Also scheduled to speak are Governor Barr (12:40pm), Chicago Fed’s Goolsbee (1pm) and Governors Cook (1:30pm) and Bowman (2:55pm)

Market Snapshot

Top Overnight News

• President Donald Trump formally notified lawmakers this weekend that the nation is once again at war with Iran, giving his administration another 60-day clock to use the military in the region without congressional approval. Politico
• Brent topped $86 as Donald Trump said he would reinstate a blockade of Iranian ships transiting the Strait of Hormuz at 4 p.m. ET today. BBG
• For decades, OPEC influenced the market by how much oil it produced. But China, the largest importer, is demonstrating its remarkable power over prices. Typically the world’s largest oil importer, China slashed purchases this spring, reducing demand so much that it prevented oil prices from soaring even higher earlier in the war. WSJ
• Trump plans to back a Russia sanctions bill championed by late Senator Lindsey Graham, a person familiar said. His support would be a major win for Ukraine’s push to punish buyers of Moscow oil and gas. BBG
• China's exports surged in June, buoyed by orders for chips to fuel the global AI boom and automobiles, deepening producers' reliance on overseas buyers as policymakers in the world's No. 2 economy continue to grapple with ‌how to boost demand at home. The stronger-than-expected trade performance keeps China on track to post a surplus topping $1 trillion for a second straight year, with factories sustaining sales despite slowing growth in major economies and trade frictions with Washington. RTRS
• Japanese policymakers on Tuesday flagged the possibility of changes to the asset allocation of the ‌nation's giant state pension funds, though they offered no clues on the timing or scale of any shift. RTRS
• Over the past year, the Trump administration has made deals to acquire equity stakes in more than two dozen firms, an unusual practice that extended the government’s influence over industries including semis, nuclear energy, minerals, and quantum computers and steel. AI execs are increasingly wondering if they will be next. NYT
• Gov. Kathy Hochul is banning large data-center construction for up to a year, making New York the latest state to confront the rollout of sites powering the artificial-intelligence boom. The move responds to concerns over power costs, water supplies and community impacts as states consider limits on AI infrastructure’s effects on electricity grids and utility bills. WSJ
• As Warsh prepares to face Congress, traders now see a US rate hike later this month as a coin toss. Money-market pricing suggests traders boosted their wagers for a July increase to almost 50% after yesterday’s strikes on Iran. BBG
• US House will vote today on merging the SAVE America Act with a national security and State Department funding bill: Fox 
• Trump said they're looking into whether Cuba is storing Iranian drones, while he added that they will take care of it if Cuba has Iranian drones.
• CPI Preview: Goldaman expects a 0.17% increase in June core CPI (vs. +0.3% consensus), corresponding to a year-over-year rate of +2.76% (vs. +2.9% consensus). The bank expects a 0.11% decline in headline CPI (vs. -0.1% consensus), reflecting lower energy prices. The forecast is consistent with a 0.24% increase in core PCE in June, reflecting another large increase in its financial services component. 

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly in the red following the weak lead from the US, where risk sentiment was weighed on by tech selling and geopolitical escalation, while US-Iran strikes persisted for the third consecutive night and Trump announced to reinstate the naval blockade on Iran, as well as touted a 20% Hormuz shipping fee. ASX 200 was dragged lower by weakness in tech, industrials, consumer staples and financials, but with the downside stemmed by resilience in energy and utilities, while there was also an improvement in Westpac Consumer Sentiment. Nikkei 225 initially dropped below the 67,000 level amid tech weakness and higher oil prices, but then gradually nursed its losses and returned to flat territory as domestic yields softened. Hang Seng and Shanghai Comp conformed to the tech-related weakness and ultimately failed to benefit from the better-than-expected Chinese trade data.

Top Asian News

• Japanese Finance Minister Katayama suggested it is time to consider including JGBs in NISAs, and stated that if the environment surrounding asset management changes sharply, a change to GPIF's portfolio could be examined, while she hopes to quickly establish details on steps to make Japanese government bonds more attractive.

European bourses (STOXX 600 -0.6%) are lower across the board after Monday's choppy trade. Escalating US-Iran tensions return as a headwind for Europe, with energy prices rising, weighing on many of the continent's biggest industries (airlines, luxury). European sectors highlight the negative bias. Basic Resources (+1.3%) and Energy (+1.2%) are printing decent gains, while Utilities (+0.3%) and Chemicals (+0.2%) also trade in the green. To the downside is Travel & Leisure (-2.1%), Media (-2.0%), and Consumer Products & Services (-1.9%).

Top European News

• EU Commission approved EUR 659mln German State aid for four new semiconductor facilities.
• German Wholesale Prices MoM (Jun) M/M -0.7% vs. Exp. 0.2% (Prev. -0.6%).
• UK BRC Retail Sales Monitor YoY (Jun) Y/Y 1.7% vs. Exp. 2.9% (Prev. 3.4%).

FX

• G10s are mostly firmer as markets are reluctant to buy Dollars into US CPI, after it gained on Monday. Kiwi is the clear outperformer; energy exporters CAD and NOK also perform well.
• Geopolitics remain constructive for USD with Brent over USD 85/bbl, in addition to this, hawkish Fed speak from Waller saw markets assign a 50% probability of a Fed hike this month. (“Fed would need to consider a rate hike in the near term if core inflation is hot this week”). Despite these factors, the Buck is negative on the day as it stabilises below Monday’s 101.32 peak ahead of a packed session which is slated to see US CPI, and Warsh’s testimony to the US house which potentially sees a text release at 13:30 BST. The level to watch if momentum continues today is the 21DMA @ 101.00, should CPI come in hot, Monday’s 101.32 peak will be in focus, thereafter is July 2nd’s 101.43 high.
• Kiwi is the best performer once again as markets add to RBNZ tightening bets, interest rate futures now implying 58bps by year-end - around 5bps added vs. the end of Monday’s London session. Upside which comes after hawkish remarks from RBNZ's Conway and a strong quarterly NZIER Business Confidence.

Fixed Income

• US and Iran continued to strike each other for a third night, after President Trump warned that they would hit Iran “very hard”. POTUS also announced a naval blockade on all Iranian ports, which is set to begin at 21:00 BST / 16:00 EDT.
• Crude benchmarks were firmer throughout the APAC session, though price action was more-or-less sideways. Into the European morning, the bias turned a bit more bullish after the UKMTO reported another incident on a tanker near Oman. This comes after two Emirati tankers were struck overnight. It is clear that the IRGC will not accept any transits through undesignated paths through the Strait of Hormuz; as such, traffic through the Hormuz is waning. Marine Traffic data has shown that only two tankers completed passages through the Hormuz in the 24 hours up to 07:25 BST today; this compares to c. 28 ships/day following the US-Iran MoU signing.
• As it becomes apparent that ships are no longer going through the Hormuz (and added risk of the blockade and/or nuclear attacks), the crude complex has moved higher. Brent Sep’26 (+3.7%) sits at the upper end of a USD 83.68-87.38/bbl range.
• Spot gold is a little firmer this morning, and trades within a narrow USD 3,983-4,034/oz range; currently holding just above the USD 4k/oz mark. The yellow metal appears to be taking a breather following a couple of sessions in the red, which was spurred by recent geopolitical escalations and a hawkish Fed speak via Waller. Elsewhere, base metals hold a positive bias following stronger-than-expected Chinese data overnight. In brief, Exports and Imports both rose from the prior, and by more than the consensus. 3M LME Copper holds within a USD 13,461-13,624/t range.
• Germany sells EUR 4.222bln vs exp. EUR 6.0bln 2.70% 2028 Schatz: b/c 1.13x, average yield 2.77%, retention 29.63%.
• Japan sells JPY 530.9bln 20-year JGBs; b/c 4.52x (prev. 2.97), average yield 3.626% (prev. 3.542%), Tail in price 0.00 (prev. 0.24).
• The Netherlands sells EUR 3.27bln vs exp. EUR 2.5-3.5bln 2.50% Jan 2031 DSL: Average yield 2.911% (prev. 2.795%).
• Australia sells AUD 400mln 5.00% June 2036 bonds b/c 4.1, avg yield 4.908%.

Commodities

• A bearish start for benchmarks as the complex reacts to the overnight energy move.
• Action that was sufficient to push Bunds below the 125.00 handle and to a 124.82 base, lower by just over 40 ticks on the day. Since, no real reaction to the morning’s updates, including a UKMTO tanker report in Oman, despite modest energy upside at the time.
• For Germany, June’s WPI was dictated by energy, with the Y/Y moderating from the prior but at an elevated level as mineral oil products were just under 22% higher vs June 2025. However, the same component was down 6.8% M/M, leading to a -0.7% headline M/M print (exp. 0.5%, prev. -0.6%). No move to the series.
• Gilts opened lower by a handful of ticks before extending below the 87.00 handle, and then moving sharply lower to an 86.42 base, catching up to the above and continuing the pattern of greater magnitudes of action vs peers on energy-related moves. Pressure may also be a function of pricing into the Burnham coronation on Friday, as he will become UK PM from the point Starmer formally hands over. On that, Rathbones has reduced its Gilts holding in order to protect against “fiscal irresponsibility” ahead of Burnham and the Chancellor decision. Note, likely outgoing Chancellor Reeves speaks at Mansion House this evening.
• USTs also lower, down to a 108-17 trough given the energy move, which has seen a modest extension on the pressure after Fed’s Waller on Monday evening said another hot core inflation read would mean the Fed needs to consider a near-term hike. CPI today is seen at -0.1% M/M (prev. 0.5%), while the now even more pertinent core is seen at 0.2% M/M (prev. 0.2%). Following Waller and the recent energy moves, pricing for July has moved in favour of a hike, with around a 60% chance of a 25bps move currently implied. We now look to testimony from Chair Warsh, which is scheduled for after CPI; note, a text release alongside CPI is possible.
• BP (BP/ LN) says upstream production is expected to be between 2,170-2,220mboepd (prev. 2,339mboepd Q/Q), due to seasonal maintenance predominantly in the Gulf of America and the effects of disruption in the Middle East.
• Pakistan LNG is reportedly seeking an additional LNG cargo for July as US-Iran hostilities in the Strait of Hormuz constrain supplies from Qatar, according to Bloomberg.
• Turkey’s energy minister said Iraq requested retaining oil export capacity of 750K BPD through the Kirkuk-Ceyhan pipeline for 12 months under an agreement.
• Iran’s Oil Minister Paknejad said Iran’s oil exports continue as usual despite the US removal of oil waivers.
• Freeport-McMoRan (FCX) Indonesia unit is targeting 2026 copper production of 0.8bln pounds.

Central Banks

• RBNZ Chief Economist Conway said the Middle East conflict complicates monetary policy like all supply shocks, while he added that understanding how firms respond to cost shocks is crucial in maintaining low and stable inflation. Furthermore, he said that despite easing prices, the effects of the shock are expected to continue impacting the economy for some time, and that a further reduction in monetary stimulus is likely to be required.
• BoE Governor Bailey said that the core banking system in the UK is resilient and that debt levels are not stretched. He stated that renewed hostilities in the Gulf underline continuing instability. The UK's position is supported by its fiscal framework as well as monetary policy.

Geopolitics: Iran

• US President Trump reiterated that Iran has no air force, no navy and no military, while he said they will hit Iran very hard on Monday night and on Tuesday. Trump said they had a deal yesterday and that Iran breaks deals, as well as commented that the MoU was built to test Iran and that Iran didn't honour it. Trump also stated that they will hit 'Pickaxe Mountain' pretty soon and have their eyes on the site all the time, which is a good potential target
• US Central Command announced that it conducted and completed a third consecutive night of strikes against Iran, with US strikes reported in Bushehr, Bandar Abbas and Bandar Kangan, while explosions were also reported in Iran's Qeshm Island and Kish Island. More recently, there have been reports of explosions have been heard near Bandar Abbas, Bushehr and Choghadak.
• Details of US President Trump’s proposed Strait of Hormuz toll plan are still being finalised, according to Semafor, saying Trump is 'very serious about the tolls.
• Iran's armed forces have begun targeting US naval vessels in the Strait of Hormuz with cruise missiles, Al Mayadeen reported.
• Iranian Army Spokesperson said the Strait of Hormuz will not be open with US aggressions and war, SNN reported.
• IRGC said it targeted weapons warehouses, satellite communications centres, and US forces' housing building at Bahrain's Juffair base. Iran's army also targeted US military facilities and equipment in Kuwait with drones, as well as targeted a 'hostile' US vessel with cruise missiles, while it was separately reported that a US military base in Jordan was hit by a missile attack and that a missile attack hit an Iranian Kurdish opposition group site east of Iraq's Erbil.
• UKMTO received a report that a tanker was hit by an unknown projectile 40NM northeast of Qalhat, Oman. UKMTO reports of an incident 13NM southeast of Lima, Oman, the tanker was reportedly hit by a missile transiting outbound on the southern route
• The UAE Defence Ministry reported that two national tankers were targeted by Iranian cruise missiles in the southern Strait of Hormuz, with the incident occurring in Omani territorial waters, although the fires on both tankers were brought under control, and it reserved the right to respond to the escalation.
• ADNOC confirmed tankers "Al Bahyah" and "Mombasa B" were hit in the Strait of Hormuz.
• Oman’s Foreign Minister said complex talks are under way to make a long-term arrangement to guarantee freedom of navigation through the Strait of Hormuz.

Geopolitics: Ukraine

• Russian ballistic missiles targeted Ukraine's capital of Kyiv, with sirens and explosions heard across the Ukrainian capital, according to FT.
• Russian forces conducted group strikes at night, damaging military industry and enterprises involved in missile production in Kyiv, while it damaged infrastructure facilities in Odessa, used to store Ukrainian armed forces' fuel and lubricants.
• Ukraine Navy spokesperson said Russia struck a civilian vessel near Ukraine’s Black Sea port of Odesa. Additionally, Ukraine said it struck two Russian oil refineries in the Bashkortostan and Krasnodar regions.

US Event Calendar

• 6:00 am: Jun NFIB Small Business Optimism, est. 95.7, prior 95.3
• 8:30 am: Jun CPI MoM, est. -0.11%, prior 0.5%
• 8:30 am: Jun Core CPI MoM, est. 0.2%, prior 0.2%
• 8:30 am: Jun CPI YoY, est. 3.8%, prior 4.2%
• 8:30 am: Jun Core CPI YoY, est. 2.8%, prior 2.9%
• 4:00 pm: May Total Net TIC Flows, prior 26.1b
• 4:00 pm: May Net Long-term TIC Flows, prior 103.1b

Central Bank Speakers

• 10:00 am: Fed Chair Warsh Testifies at House Financial Services Cmte.
• 12:40 pm: Fed’s Barr Speaks on Artificial Intelligence
• 1:00 pm: Fed’s Goolsbee in Fireside Chat
• 1:30 pm: Fed’s Cook Speaks at Conference on Financial Inclusion
• 2:55 pm: Fed’s Bowman Speaks at Conference on FInancial Inclusion

DB's Jim Reid concludes the overnight wrap

The most striking financial market takeaway is the extraordinary shift in Japan’s relative affordability over the past decade and a half. When we launched the series in 2012, Japan was one of the most expensive countries in the world, while the US sat towards the cheaper end of the spectrum. Today, that picture has completely reversed. Tokyo is now the cheapest city in the world in which to buy an iPhone, you can almost get two dates there for the price of one in London, enjoy three meals out for the cost of one in Zurich or New York, and buy property at a fraction of the prices seen in New York, Hong Kong and London. With Japan’s PPP-implied price level falling from 125 in 2012 to just 60 today, the report poses an intriguing question: if reading the 2012 edition would have encouraged you to buy America, should reading the 2026 edition make you take a fresh look at Japan? Tens of thousands of data points have been analysed to compare relative prices across 69 cities that matter to global financial markets. Click here to see where your city ranks on everything from everyday prices to overall quality of life and click now to get ahead of the 45,000 readers who might already be planning next year’s bargain holiday. Tokyo, perhaps?

Staying in Asia, markets are again weak this morning on the back of the escalating tensions in the Middle East and the softening sentiment towards the AI trade. Oil is up just under another couple of percentage points this morning having been up around 9% yesterday. More on that below. The KOSPI (-0.02%) has actually fought all the way back to flat after being down -5% an hour ago when I started work on this. It might still be an hour until you read this so you may want to check yourselves. Elsewhere, the Nikkei (-0.25%) has been much less volatile but has also been recovering while I type. The Hang Seng (-0.47%), the CSI 300 (-0.39%), and the Shanghai Composite (-0.66%) are also lower. S&P 500 (-0.09%) and NASDAQ 100 futures (flat) have also been recovering as the overnight session has progressed but with Stoxx (-0.6%) futures still lower. 

Today we have a huge day with US CPI, Warsh’s testimony to the House and the unofficial start of Q2 US earnings season with 5 big banks reporting.   

Ahead of this and all the overnight moves, the big story yesterday was the latest jump in oil prices, which revived fears around stagflation, and hit bonds and equities on both sides of the Atlantic. That followed further strikes between the US and Iran over the weekend, which meant Brent crude (+9.59%) saw its sharpest rise since March 2020, reaching a 4-week high of $83.30/bbl by the close. Moreover, yesterday saw a fresh escalation in the rhetoric, with Trump saying that “We’re taking over the Strait”, before announcing that the US was reinstating an “Iranian blockade”, which Trump said was “so named because it is only stopping Iran’s ships or customers from entering or leaving. All other countries will have fair and open use of the Strait.” He also said that the US would “be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World.” I asked AI how much that could raise if you assumed pre-war volumes. It came back with a figure of around $400-500m a day based on $2-2.5bn of daily cargo passing through the Strait.

President Trump has a habit of starting with an extreme negotiating position so no doubt this would come down if it was ever implemented, but the very spectre of tolls will make markets and customers nervous. US Central Command said that it will resume the Iran blockade at 4pm NY time today, so that still leaves a bit of time for a possible climbdown. Yesterday’s mood out of the Middle East also wasn’t helped by escalation between Saudi Arabia and the Houthi rebels, with the latter targeting a Saudi airport after the Saudi-backed Yemen government carried out strikes against Sanaa airport.

The escalation over Hormuz saw inflation concerns creep back into play yesterday, with investors pricing in more rate hikes from central banks. For instance, pricing of a Fed hike in just a couple of weeks’ time jumped from 34% to 43% yesterday and the amount of hikes priced by the December meeting was up +5.4bps on the day to 43bps. The Fed repricing was also supported by some hawkish comments from Governor Waller, who kept the door open to an imminent hike, saying that “If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term”. Similarly for the ECB, the number of hikes priced by December was up +10.5bps on the day to 44bps, so it was clear that higher oil prices were shifting market pricing in a hawkish direction.

This backdrop also had a clear effect on sovereign bond yields, which continued to move higher on both sides of the Atlantic. So for US Treasuries, the 2yr yield (+7.6bps) closed at a 16-month high of 4.28%. And notably, the 2yr real yield (+2.2bps) closed at 2.23%, which was its highest closing level in almost two years. Meanwhile the 10yr yield (+6.3bps) was also up to 4.62%, marking its highest level in nearly two months, and the 10yr real yield (+3.6bps) closed at 2.34%, its highest since 2023. And over in Europe, yields on 10yr bunds (+4.3bps), OATs (+5.5bps) and BTPs (+7.0bps) all moved higher as well.

Looking forward, the question of Fed rate hikes will be in focus today, as we’ll get the US CPI print for June at 13:30 London time. This is a significant one, because market pricing for the next Fed meeting is still in the balance, so any surprises could easily push that in either direction. In terms of what to look out for, the recent decline in gas prices means our US economists expect headline CPI to come in negative for June, with a monthly price decline of -0.16%. So if realised, that would take the year-on-year rate down to +3.8%. But core CPI is expected to still be more resilient at a monthly +0.23%, with the year-on-year rate at +2.8%. 

Whilst the CPI print will be the initial focus, attention will then shortly turn over to Fed Chair Warsh, who’s testifying before the House Financial Services Committee at 15:00 London time. That’s part of the regular semi-annual testimony from the Fed Chair, with the Senate Banking Committee hearing taking place tomorrow as well. But our US economists expect him to remain reticent about providing guidance for any upcoming policy action and remember that Warsh was the one official who didn’t submit a dot in the most recent dot plot.

Whilst sovereign bonds were struggling, it was also a rough day for equities as the rise in oil prices coincided with a fresh slump for chip stocks.  The Philly semiconductor index (-4.78%) fell back sharply, with the NASDAQ (-1.55%) also pulling back. And in turn, that slump for tech stocks dragged on the S&P 500 (-0.79%), with the index posting a sizeable decline despite most of its constituents rising on the day. Meanwhile in Europe, equities put in a relatively better performance, given the region’s comparatively smaller concentration of chip stocks and as European markets closed before the full rise in oil prices, with the STOXX 600 only down -0.01%.

Finally, China’s latest trade data surprised to the upside overnight, with both exports and imports growing significantly faster than expected in June. Strong global demand for AI-related products and technology goods helped offset increasing geopolitical pressures. Exports rose 27.0% year-on-year, surpassing expectations of 19.0% and accelerating from May’s 19.4% growth. Imports increased 36.0%, well above the forecast of 26.1% and stronger than the previous month’s 27.4% rise. As a result, China’s trade surplus widened to $125.62 billion in June from $105.43 billion in May, exceeding market expectations of $120.10 billion.

Looking at the day ahead, and the main data highlight will be the US CPI print for June. Otherwise, Fed Chair Warsh will be speaking before the House Financial Services committee, and we’ll also hear from the Fed’s Barr, Goolsbee, Cook and Bowman, along with BoE Governor Bailey. Finally, today’s earnings releases include JPMorgan, Citigroup, Goldman Sachs, and Bank of America.

Tyler Durden Tue, 07/14/2026 - 08:24

Spotting Market Bubbles: Why History Says It's Nearly Impossible

Authored by Lance Roberts via RealInvestmentAdvice.com,

If you knew you were standing inside a stock market bubble, you wouldn’t be standing in it for long. You’d sell. So would I, and so would everyone reading this. And if spotting market bubbles was something everyone could do in real time, the bubble couldn’t form in the first place. That paradox is why spotting market bubbles is one of the hardest jobs in finance, and why bubbles look painfully obvious only after the fact.

Market bubbles are not a modern invention. They’ve been a recurring feature of financial life for almost 400 years, ever since the first organized stock exchange opened in Amsterdam in the early 1600s.

The Dutch Tulip Mania of 1636 to 1637 is the textbook case. Tulip bulb prices in the Netherlands soared roughly twentyfold in a few months, then collapsed by about 99% in May 1637. Less than a century later, the South Sea Bubble of 1720 took shares of the South Sea Company from £128 in January to £1,050 in June before collapsing back to near the starting price by year-end. Isaac Newton, often cited as the smartest man of his era, lost a fortune in that one. He’s reputed to have said: “I can calculate the motion of the heavenly bodies, but not the madness of crowds.”

The 20th century gave us bigger versions of the same story. The Roaring Twenties ended with the 1929 crash and a peak-to-trough Dow drawdown of nearly 89% by 1932. Japan’s late-1980s asset bubble carried the Nikkei 225 to 38,915 on December 29, 1989, and triggered a collapse that eventually took the index down more than 80%, with the post-bubble low not arriving until October 2008, nearly 19 years after the peak. Then came the dot-com bubble. Between January 1995 and March 10, 2000, the Nasdaq Composite rose roughly 572% to a peak of 5,048.62. It then fell 78% by October 2002, and didn’t recover its 2000 high until April 2015.

The 2008 housing-and-credit bubble ended differently. Instead of a single speculative asset, the bubble formed in mortgage credit and spread across the entire global banking system. The S&P 500 lost 57% from its peak to its trough. None of these episodes looked the same on the way up. Yet all of them look identical on the way down. This is why spotting market bubbles is always a function of hindsight.

Notice in the chart above. The drawdowns from the four largest equity bubbles ranged from 57% to 99%. None of them recovered quickly. The Nasdaq took 15 years. The Nikkei took 34 years to finally reclaim its 1989 peak, hitting it in February 2024, before pushing on to fresh all-time highs since. The damage from a real bubble isn’t measured in months. It’s often measured in lost decades.

Why Spotting Market Bubbles Is Mostly Hindsight

As stated above, spotting market bubbles in advance is often futile. Just because assets sport high prices, valuations, or any other metric you choose, those alone do not necessarily define a bubble. A good example of the futility of spotting market bubbles in advance was in 1996 when Alan Greenspan warned of “irrational exuberance.” Yes, prices were elevated, sentiment was extremely bullish, and the Nasdaq then tripled over the next three and a half years before peaking. Anyone who sold on that warning missed an enormous gain before the eventual crash. That’s the trap.

Owen Lamont, a portfolio manager at Acadian Asset Management who has spent years studying market extremes, put it bluntly. He once joked that a bubble is just “when I think the stock market is overpriced and then it doubles.” That’s not really a joke. It captures the practical impossibility of timing a top in real time. Stanley Druckenmiller, working alongside George Soros, identified the Japanese bubble in 1988 and shorted it. The Nikkei kept ripping higher into late 1989, and Druckenmiller eventually said his lesson was simple.” Valuation is not a catalyst.“

Bubbles also sustain themselves through narrative, not arithmetic. In 1999, the story was that the internet had repealed the rules of economic gravity. Cisco Systems, the world’s most valuable company at its peak, traded at a trailing P/E ratio above 100. In 1989, the story was that Japan Inc. was unstoppable. In 2007, the story was that housing prices would never fall nationally. Each story was wrong, but each story sounded reasonable at the time, especially because each story had real evidence supporting it. The internet did transform commerce. Japan was a manufacturing powerhouse. Housing prices had not, in fact, fallen nationally for decades. The bubble forms when investors take a real trend and extrapolate it past any reasonable mean reversion.

The Four Horsemen Investors Should Watch

So, with that said, if high prices or valuations alone don’t make a bubble, what does? Several decades of academic and practitioner research point to a consistent checklist. Lamont calls them the four horsemen, and they are essentially what you would expect.

1. High prices, measured by valuation multiples that significantly exceed long-term averages.
2. High volatility. Bubbles don’t drift higher quietly. They lurch up and down with bigger and bigger swings.
3. High trading volume, particularly among retail and speculative accounts that were previously inactive.
4. The spread of “bubble beliefs,” the idea that this time is different and traditional valuation rules no longer apply.

However, for me, I would include a fifth indicator that’s saved me more than once. It’s defensiveness. When the cheerleaders of an asset stop selling its merits and start attacking the people who question it, the bubble has gone parabolic. We saw it in late-1999 internet stocks. We saw it again at the 2021 SPAC mania and the Bitcoin peak. And we saw it most recently in the 2025 precious metals run.

When I published my critique of the commodity supercycle and dollar-debasement thesis last year, the response from precious metals advocates wasn’t a counterargument backed by data. It was dismissal and accusations of being on the wrong side of history. Silver then rallied roughly 135% on the year before suffering its biggest single-day drop since the 1980s in late January 2026. Gold knocked more than 10% off its peak in the same window. When debate stops, and tribal loyalty takes over, the top is usually close.

How the Current Setup Compares to 1999

Naturally, the question is whether we are currently “spotting a market bubble”? The honest answer is that some signals are flashing yellow. Others aren’t.

The yellow signals are real. The S&P 500’s cyclically adjusted P/E sits within striking distance of the all-time high set in December 1999. Concentration risk is severe. The top 10 stocks now make up a larger share of the S&P 500 than tech, media, and telecom did at the March 2000 peak. Performance for AI infrastructure leaders has gone parabolic. A normalization of multiples back toward the long-term average would, by itself, deliver a market drawdown of 30% or more even without a recession.

However, the differences from 1999 are real and matter. In March 2000, dozens of marquee Nasdaq names had no earnings, no cash flow, and business models built on burning venture capital to acquire eyeballs. Today’s leaders, meaning Nvidia, Microsoft, Alphabet, and Meta, throw off enormous free cash flow. Pets.com had 9 months of cash left when it went public. Nvidia generated tens of billions in operating profit last quarter. That isn’t a small distinction. A bubble built on hopes and venture capital pops differently than one built on real, but extrapolated, earnings power.

The table below puts the comparison on a single page. Some indicators are eerily similar. Some are actually worse today. And a few key fundamentals are meaningfully better.

Read the verdict column carefully. Out of 13 indicators, four flash similar or worse than 2000, six look genuinely better, and three sit on the watch list. That’s not a green light. It’s also not 1999 with a new ticker symbol. The honest read is that we have a stretched market with a single dominant narrative and severe concentration, but with profitability, monetary policy, and retail behavior in better shape than they were at the last comparable top.

The piece that worries me more than the headline P/E is concentration. When the S&P 500 owes most of its return to a handful of stocks, you don’t actually own a diversified U.S. equity portfolio. You own a thematic AI bet dressed as an index fund. That’s the exposure most readers should be measuring carefully right now.

How to Stay Invested Without Catching a Falling Knife

Bubbles, real or imagined, create a behavioral problem more than a portfolio problem. The behavioral problem is that investors flip from “all in” to “all out” based on the week’s headlines. Both of those positions are usually wrong. Stocks aren’t a light switch. The decision is rarely between fully invested and fully in cash.

What’s actually worked through every prior bubble cycle is straightforward.

1. Stay invested in a diversified mix you can defend in any tape.
2. Trim what’s run, add to what hasn’t.
3. Hold meaningful positions in assets that behave differently from the popular trade, including bonds, value stocks, and, most importantly, cash, which gives you an opportunity.
4. Above all, define in advance what would force you to reduce risk, and write it down.

I’ve been arguing for some time now that bonds remain the best portfolio stabilizer for most investors, even after the 2022 drawdown. In a real equity unwind, bonds historically offset stock losses through the duration trade as the Fed cuts in response. That’s the relationship that briefly broke down in 2022 because both stocks and bonds were repricing higher inflation at the same time. In a true bubble pop scenario, when growth and inflation expectations both collapse, the negative correlation tends to reassert itself.

The other rule is worth repeating. Rebalancing is not market timing. Selling some of your winners and buying some of your laggards forces you to do something contrarian on a calendar, not on a hunch. Investors who rebalanced annually from 2000 to 2002 still suffered, but suffered far less than those who rode the Nasdaq concentration into the abyss.

Free Resource: If you want the full framework we use to stress-test client portfolios for concentration risk, download our RIA Portfolio Risk Guide. It walks through the same checks our team runs every quarter.

The Signals That Mark the End

What actually triggers the unwind, in past bubbles, is rarely the thing analysts spend the most time worrying about. The Fed didn’t pop the Nasdaq with the warnings of 1996. The Fed popped it with the 1999 and 2000 rate hikes. The Bank of Japan popped its bubble by raising the discount rate from 2.5% to 4.25% in late 1989. In 2007, a small wave of subprime mortgage delinquencies sparked the contagion. The catalyst is usually a tightening of liquidity, not a change in the narrative.

Several signs tend to cluster near the top:

• First, a flood of new stock issuance. SPACs in 2021. Internet IPOs in 1999 and early 2000. When the supply of speculative paper finally meets demand, prices roll over. Lamont himself has flagged issuance as the single signal he’s watching most closely right now. With multiple AI-era giants reportedly preparing to go public, that signal is worth tracking week to week.
• Second, a shift from “buy the dip” to “buy the rip.” Healthy bull markets see investors add on weakness. Late-stage bubbles see investors pile in on strength because they’re afraid of being left behind. That FOMO behavior is the textbook performance-chasing pattern.
• Third, mainstream financial coverage that stops debating valuation entirely. When the question “are we in a bubble” disappears from major publications and gets replaced by exclusive feature stories on the personal lives of momentum traders, the top is usually close. We aren’t there yet, but we’re closer than we were a year ago.
• Fourth, a credit event. Bubbles don’t usually pop from inside the asset. They pop because something in the financing chain breaks. In 2000, it was margin calls and burning cash balances. Then, in 2008, it was subprime credit. In 2021, it was the SPAC unwind that started taking down low-quality issuers.

The next pop, whenever it comes, will likely be triggered by stress somewhere in private credit, leveraged loans, or AI infrastructure financing rather than in the equity market itself.

The bottom line is that you don’t need to know exactly when the music stops. You need to know what your portfolio looks like when it does. That’s the question to ask yourself this week, well before the question becomes urgent.

Tyler Durden Tue, 07/14/2026 - 08:05

The UK Government Lobbied For Putting Migrants And Trans People On Banknotes

Authored by Steve Watson via Modernity News,

The UK's own Cabinet Office pushed hard to overhaul banknotes by elevating LGBT+ and ethnic minority figures, claiming historic greats like Winston Churchill gave an "incomplete picture" of British identity. This push came just before the Bank of England decided to ditch those same towering historical figures for images of hedgehogs and foxes.

This latest revelation exposes the ideological machinery at work inside Whitehall. While the public recoiled at the idea of swapping national heroes for animals, government officials were actively lobbying for even more radical identity-driven changes.

In a letter to the Bank of England's chief cashier last summer, officials from the Office for Equality and Opportunity - part of the Cabinet Office and led by Bridget Phillipson - argued that current historical figures reflected "limited dimensions of British identity." They called for "greater representation of women, disabled people, ethnic minority communities and LGBT+ individuals" to "send a strong signal of progress and recognition."

Alan Mendoza and former Glasgow City Councilor Austin Sheridan react as the Cabinet Office urge the inclusion of LGBT and ethnic minority communities on banknotes. pic.twitter.com/IWvkZtuL3V

— GB News (@GBNEWS) July 12, 2026

The whole saga is particularly ridiculous because the core argument for axing Churchill and other giants was that they were supposedly too "ideologically divisive" for modern Britain.

Yet officials simultaneously pushed to install figures selected explicitly through the lens of identity politics and group representation - an approach guaranteed to be far more polarizing in practice.

It reveals the selective outrage: traditional British heroes are labeled divisive for their achievements, while injecting contemporary activism onto the currency is framed as unifying "progress."

'We have real pressing financial issues as a country. I find focus on stuff like this quite ridiculous!' @NanaAkua1 hits out at the Cabinet Office's suggestion that banknotes should feature prominent ethnic or LGBT figures from British history. pic.twitter.com/760hztl82u

— GB News (@GBNEWS) July 12, 2026

The intervention has sparked accusations that Labour elements conspired to sideline Britain's most celebrated figures.

Shadow minister Alex Burghart slammed the move: "Labour tried to deny any involvement in the cancellation of Winston Churchill and other British heroes. But government officials have been caught red-handed conspiring with the Bank of England to remove them from our banknotes."

He added that banknotes "should feature the greatest Britons - the historic figures that unite our country. They shouldn't be chosen on the basis of Labour's equality laws."

This diversity drive unfolded alongside the Bank of England's decision to replace Churchill on the £5 note, Jane Austen on the £10, J.M.W. Turner on the £20, and Alan Turing on the £50 with images of British animals, plants, and landscapes. The Bank cited a public consultation where a majority favored nature themes, partly for security reasons on new polymer notes.

Critics have pointed out the irony, noting Alan Turing - a gay war hero - was already featured, yet the push continued for broader "under-represented" groups. Suggestions reportedly included figures tied to events like the Empire Windrush.

This fits a longer pattern of institutional discomfort with Britain's historic icons. Our earlier coverage highlighted the absurdity of trading Churchill for hedgehogs and the broader erosion of national symbols.

A serious nation honors the leaders who defended its freedom and shaped its character - not because they tick modern demographic boxes, but because their achievements built the country whose currency circulates today.

Swapping out the likes of Churchill for foxes and badgers, while civil servants agitate for identity politics on money, signals a profound loss of confidence. Britain's history is not a problem to be diluted. It is the foundation worth preserving.

There are small steps within education and society to dissolve our history & culture.
I actually believe it will backfire, as there's always a rebellious streak in the British public, who will actively protect their culture.

— MaccGardenFest (@Maccgardenfest) July 12, 2026

The sick joke is that all the woke, DEI crap they try to shoehorn into our culture is what is truly "elitist and divisive".

— Pinpoint Inaccuracy (@pinpointinaccry) July 12, 2026

How about an underage girl being raped by a Muslim on the back of a Tenner. That's ethnic ?????

— Colin Kirby (@ColinKi54036475) July 12, 2026

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

Tyler Durden Tue, 07/14/2026 - 07:45

JPMorgan Drops Despite Highest Quarterly Profit In HIstory, As Traders Focus On Negatives

Q2 earnings season is officially off.

Moments ago, JPMorgan became the first mega bank to report Q2 earnings (technically Wells beat it by a few second but nobody really cares about that particular bank), firing the starting pistol on the second quarter earnings season. The Q2 results were solid (Net Interest Income and FICC miss but more than offset by blowout Equity Sales and Trading and Investment Banking revenue) , but as we note in out bank earnings preview last night, perfection (and beyond) was already largely priced into the stock which has become a true hedge fund hotel, and as a result the stock is modestly in premarket trading. 

Here is a snapshot of what the company reported for Q2:

• EPS $7.70, beating est. of $5.58, and up $2.46 YoY
• Revenue: 
  • Adjusted revenue $58.02 billion, smashing est $51.39 billion, and up $12.3 billion YoY
  • Managed net interest income $25.62 billion, missing est, $25.64 billion 
  • Total Commercial and Investment Bank revenue $24.85BN, up $5.32BN YoY
    • FICC sales & trading revenue $6.05 billion, missing est. $6.29 billion with weakness in commodities
    • Equities sales & trading revenue $6.03 billion, smashing est. $3.98 billion
    • Investment banking revenue $3.90 billion, smashing est. $3.06 billion
      • Advisory revenue $1.01 billion, missing est. $1.07 billion
      • Equity underwriting rev. $829 million, beating est. $621.3 million
      • Debt underwriting rev. $1.44 billion, beating est. $1.17 billion

Let's take a closer look at JPM's Q2 earnings. 

First, the good news: JPM reported its highest quarterly profit ever as stock traders blew past analysts’ estimates and a long-held Visa stake paid off to the tune of $4.6 billion. Indeed, a notable one-off item that contributed to the firm’s success this quarter was JPMorgan' $4.6 billion net gain related to the sale of Visa shares. The bank said this in its earnings supplement: "The net gain was “related to Visa Class C common stock held at fair value and received by the Firm in an exchange offer following the acceptance by Visa Inc. on May 11, 2026 of the Firm’s tender of its 18.6 million shares of Visa Class B-2 common stock.”

More good news: equity trading was stellar, with Q2 equities revenue rising 86% from a year earlier to $6.03 billion, anmd more than $2 billion higher than expected; In fact, it beat even the highest estimate among analysts surveyed by Bloomberg and brought total trading revenue to $12.1 billion, more than the previous all-time high set in the first three months of this year. 

There was bad news: FICC revenue of $6.05 billion missed estimates of $6.29 billion with weakness in commodities Additionally, while Investment Banking beat, advisory revenue of $1.01 billion missed estimates of $1.07 billion. And while managed net interest income increased by more than 9% from a year prior to $25.62 billion from $23.31 billion last year, it was a slight miss to the $25.64 billion estimate. 

There was some more bad news, this time on the expense side: Q2 expenses were $27.3 billion, more than expected. The firm also updated its full-year cost guidance to about $107.5 billion, beyond the increase Dimon telegraphed at an industry conference in May.

Investment banking was in focus in the wake of SpaceX’s record initial public offering in June. JPMorgan pulled in $3.28 billion in investment-banking fees in the second quarter, beating estimates and up 30% from a year earlier "driven by higher fees across all products, with particularly strong performance in equity underwriting fees."

The bank’s provision for credit losses – how much JPMorgan expects to lose from uncollectible loans – was $2.52 billion for the period, significantly less than the $3.09 billion that analysts had expected. Of this, net charge-offs were $2.37 billion, also below the estimate $2.62 billion. 

Even as almost every business exceeded expectations, CEO Jamie Dimon was cautious about prospects for the future.

“Several risks are shifting below the surface like tectonic plates, including geopolitical tensions and wars, sticky inflation, large global fiscal deficits and elevated asset prices,” Dimon said in the statement. “We cannot predict how these forces will ultimately play out. They may remain manageable, but they could also cause meaningful disruptions when they shift or collide.”

Jamie Dimon also pointed out that card annual fees jumped by more than 30%, “reflecting healthy retention levels after recent product refreshes as well as demand for our premium products.”

Looking ahead, the firm expects full-year net interest income to now be about $105.5 billion, after previously anticipating it would be around $103 billion. For the quarter, it came in at $25.5 billion. That, however, comes along with the increase in full year expenses to $107.5BN. In a presentation Tuesday, the firm said the increase is “primarily due to higher volume- and revenue-related expenses driven by the activity levels and associated revenue outperformance.” For the quarter, expenses were $27.3 billion, more than expected.

The bank also said it expects the full-year net charge-off rate in its credit-card business to come in at around 3.2%, lower than the 3.4% guidance it provided in April.

The report comes as Jamie Dimon is finally preparing his sucession: last month, the bank named Troy Rohrbaugh and Doug Petno co-presidents of the firm, the latest twist in the race to succeed Dimon, 70, when he eventually steps down. The bank said longtime executive Marianne Lake would retire as part of the changes, with Rohrbaugh replacing her atop the company’s sprawling consumer arm and Petno gaining sole control of the commercial and investment bank. 

Looking back, today’s report isn’t helping the priced to perfection stock, which has been a laggard year-to-date on a total-return basis -- up only about 5% including dividends through yesterday. Morgan Stanley, Goldman Sachs and Citigroup all delivered more than 20% including payouts, and Bank of America has returned more than 9% by that measure. Wells Fargo is the standout loser, down almost 5% this year even after counting dividends.

Shares of JPMorgan, up 3.8% this year through Monday, fell 2.6% in early New York trading.

Full Q2 invest presentation below (pdf link)

JPM Q2 2026 Results by Zerohedge

Tyler Durden Tue, 07/14/2026 - 07:36

Ericsson Tumbles On Margin Headwinds Sparked By Memory Chip Inflation

Ericsson shares in Stockholm plunged the most in 18 months after the Swedish telecom equipment giant warned that soaring component costs will pressure margins in its core networks business this quarter.

The stock fell as much as 10% in Stockholm after outgoing CEO Börje Ekholm warned about higher input costs, partly driven by AI-fueled demand for memory chips. Citi analysts said the top concern is the margin impact extending into 2027.

"The big challenge in our view is the building component cost pressure and, not so much the near-term impact, but more the pressure to come in 2027," Citi analyst Andrew Gardiner wrote.

Second-quarter adjusted earnings before interest, taxes and amortization tumbled 7% to 6.88 billion kronor, slightly above the Bloomberg Consensus estimate of 6.82 billion kronor. Ericsson has been slashing costs as soft carrier spending weighs on the telecom-equipment industry. It eliminated about 5,000 jobs in 2025 and targets similar headcount reductions this year.

BNP Paribas analysts highlighted the "cost pressure building" for Ericsson:

What happened?

The Ericsson call has now finished, and the stock is down c7%. The main focus on the call was on rollout costs, semis cost inflation, and IPR.

BNPP View:

1. Network‑rollout cost drag: Ericsson highlighted that the first few quarters of a network‑rollout cycle are financially the most demanding. The company expects a ramp‑drag in the next few quarters as the mix shifts toward large‑scale rollout projects (we presume India/Japan), which depresses margins before economies of scale and higher volumes kick in. Ericsson said the contracts are accretive over the longer term, even though the short‑term impact on gross margin will be negative. We interpret this that the ~100bp weaker margin in GM in Q3 26 is likely to see continued mix effect drag for a few more qtrs.

2. Memory‑cost inflation and limited pass‑through: Ericsson confirmed that semiconductor price inflation remains an increasing issue. Input‑costs rose in Q2, and the financial impact will increase over the coming quarters, prompting Ericsson to pursue product substitution, targeted cost‑reduction programmes, and longer‑term structural actions such as price adjustments on new tenders and renegotiations with existing customers. Because most contracts are long‑term, they lack automatic price‑pass‑through clauses, i.e. Ericsson company cannot fully offset the higher component costs automatically. Pass‑through will be gradual and is subject to negotiation on a case‑by‑case basis. This is a weaker level of pricing power than we had appreciated and suggests that Ericsson might not be able to fully pass on cost inflation this time.

3. IPR one‑off impact: Ericsson will not have a major one‑off impact from the new IPR settlement. Instead, the agreement is reflected in a higher IPR ARR of SEK13.5bn (was SEK13.0bn). Ericsson said impact of the agreement is marginal in Q3 26 (we presume SEK500m divided by 4).

In a separate note, Barclays analyst Simon Coles told clients that while Ericsson posted "another quarter of resilient margins," the company is warning that headwinds are mounting in the second half of the year.

Ericsson is guiding down its networks gross margin:

• Sees Networks adj. gross margin 48% to 50%, Bloomberg Consensus estimate 49.5%

Ericsson did not directly blame soaring memory chip prices for margin compression in its earnings release or during the earnings call with analysts.

However, Deutsche Bank analyst Janardan Menon pressed management on an earnings call about rising random-access memory prices and the competitive advantage enjoyed by Chinese telecom giants, which can source these chips at lower prices.

CEO Ekholm responded: "And there may be, as you say, a little bit lower cost inflation in the Chinese ecosystem. And as you know, we cannot rely on that ecosystem to export to a number of countries we're in. That forces us to look at the product design in a different way."

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

These Are The Cities Where Burglaries Spike In The Summer

For years, homeowners have been told that summer is prime time for burglaries as families leave for vacations and homes sit empty. But a new analysis of FBI crime data suggests that advice only tells part of the story, according to Moneygeek.

After examining burglary reports from 74 of the nation's largest cities between 2022 and 2024, researchers found that while burglary rises modestly during the summer nationwide, the pattern varies dramatically depending on where you live. In many parts of the country, summer really is burglary season. Along much of the West Coast, however, the opposite is true.

Overall, burglaries were just 5.6% higher during June through August than during the rest of the year, far less than the large seasonal spikes often suggested by conventional wisdom. More importantly, that national average masks major regional differences.

Moneygeek notes that cities with cold winters experienced the strongest seasonal swings. Minneapolis posted the largest increase, with summer burglaries jumping roughly 47% compared to the rest of the year. Other northern cities, including St. Paul, Newark, Buffalo and Indianapolis, also recorded significant summer increases.

Researchers believe harsh winters may naturally suppress burglary activity by keeping more people indoors and reducing opportunities for break-ins. When warmer weather arrives, vacations, student departures and increased travel may create more opportunities for property crimes.

The picture changes almost completely along the Pacific Coast.

Cities including Riverside, Portland and San Diego actually experienced fewer burglaries during the summer than during the rest of the year. Riverside showed the strongest reversal, with burglary rates falling more than 12% during the summer months. Honolulu and several other coastal cities displayed similar trends.

Rather than peaking during vacation season, many West Coast cities recorded their highest burglary activity during the winter months. Researchers suggest that milder climates eliminate the dramatic seasonal shifts seen in colder regions, leading to a much different pattern of criminal activity.

The study grouped cities into three broad climate regions. Cold-weather cities averaged nearly a 12% summer increase in burglaries, while Sun Belt cities showed only a modest seasonal change of roughly 5%. Pacific Coast cities, meanwhile, averaged a slight decline in burglary during the summer.

The findings also challenge the idea that homeowners across the country should prepare for burglary risk at the same time each year.

For residents in northern cities, traditional summer precautions—such as using timers, security cameras, holding mail and checking alarm systems—appear well supported by the data. But homeowners along the West Coast may actually benefit more from increasing those precautions during the colder months instead.

Researchers caution that the data does not prove why these seasonal patterns exist. The FBI's monthly statistics also combine residential and commercial burglaries, making it impossible to isolate exactly what's driving the differences. Still, the geographic pattern was remarkably consistent, with cold-weather cities showing substantially stronger summer increases than their Pacific Coast counterparts.

The broader takeaway is that there is no single national "burglary season." Instead, burglary trends appear to be heavily influenced by regional climate and local conditions, suggesting that homeowners may want to think about seasonal security differently depending on where they live.

Tyler Durden Tue, 07/14/2026 - 05:45

Germany Stops Recommending COVID-19 Vaccination For Most People Under 75

Authored by Zachary Stieber via The Epoch Times,

Germany has updated its COVID-19 vaccination recommendations, advising most people under 75 not to receive a COVID-19 vaccine.

A health worker at a mobile COVID-19 vaccination station in a shopping mall fills a syringe with the Pfizer-BioNTech vaccine in Ludwigsburg, Germany, on Nov. 11, 2021. Thomas Kienzle/AFP via Getty Images

Germany's Standing Committee on Vaccination, which offers vaccine recommendations for the country, on July 9 said in a 33-page document that its stance on COVID-19 vaccination was changing "to reflect the current epidemiological situation and the population's immune status."

The committee, known as STIKO, added: "A large proportion of the adult population now has hybrid immunity, characterised by exposure to a variety of antigenic contacts, and is therefore sufficiently well protected against severe cases of COVID-19.

"This also applies to healthy pregnant women. Consequently, the recommendation to achieve baseline immunity for the adult population (including pregnant women without underlying conditions or pregnancy-related complications) is no longer applicable. In [the] future, the standard vaccination recommendation will apply to those ≥ 75 years of age."

STIKO's recommendations are advisory, but form the basis of guidance adopted by states and the Federal Joint Committee's vaccination directives. STIKO comprises members from the Robert Koch Institut, with members representing specialties such as pediatrics and virology.

In January, STIKO's updated immunization schedule advised people aged 60 and older to receive a COVID-19 vaccine annually, and people aged 18-59 who had not received a shot in the past to receive one, including women of childbearing age and pregnant women, and people who had not achieved at least three antigenic contacts for baseline immunity, or a combination of at least three prior shots and COVID-19 infections.

STIKO also recommended COVID-19 vaccination for people aged 6 months and older with specific conditions that the committee said increased their risk of serious illness, such as chronic liver disease and obesity, as well as family members and close contacts of people in whom COVID-19 vaccination was not likely to produce a protective immune response.

In the United States, the Centers for Disease Control and Prevention in January rolled back COVID-19 vaccine recommendations, but a federal court blocked the update. An appeal is ongoing.

Four categories of changes precipitated the updated advice, STIKO said on July 9, including that much of the adult population has hybrid immunity.

STIKO also found that severe cases of COVID-19 during pregnancy have become "very rare"; that COVID-19 case numbers, hospitalizations, and deaths have been steadily declining; that deaths are happening mostly among people aged at least 75 years; and that a seasonal pattern of COVID-19 has become established, with cases peaking in the late summer and early fall.

While removing the general recommendation for most of the population under 75 years of age, STIKO is still recommending vaccination for people at increased risk due to underlying illnesses, including pregnant women.

Tyler Durden Tue, 07/14/2026 - 05:00

Tipping Point: When Populations Peak

Last weekend (July 11 to be exact) marked World Population Day, celebrating the approximate day that the world's population reached 5 billion on July 11, 1987.

With that in mind, Statista's Felix Richter takes a closer look at one of the population trends that will affect many countries sooner or later in the 21st century: population decline.

You will find more infographics at Statista

Especially prevalent across Europe and developed Asia, this demographic trend is a consequence of declining birth rates and ageing populations and poses significant challenges to the countries affected.

In countries like Japan and Italy, where population decline is estimated to have begun in 2010 and 2014, respectively, fertility rates have fallen below the replacement level of 2.1 percent a while ago. Influenced by factors such as higher education and career opportunities for women, shifts in societal norms regarding family and childbearing and an ageing overall population, natural population change, i.e. the difference between births and deaths, turned negative years ago. For several years, positive net migration stopped the overall population from declining until the (negative) natural population change eventually became larger than the population growth from migration.

Countries with declining populations face a number of challenges, both economic and social. Economically, a shrinking workforce can lead to labor shortages, reduced productivity and increased pressure on social welfare systems. With fewer working-age individuals to support a growing elderly population, the financial burden on pension systems and healthcare services intensifies. Socially, a declining population can result in the depopulation of rural areas, shrinking communities and the ensuing challenges in maintaining infrastructure and public services.

Addressing these issues requires comprehensive strategies. Raising the retirement age or increasing taxes/social contributions can help alleviate the financial burdens associated with a demographic imbalance. Policies to support work-life balance and affordable childcare can help slow the population decline and immigration of young, skilled workers can help address labor shortages and increase productivity.

According to the latest revision of the United Nation’s World Population Prospects, many countries will face these challenges within this century if they don't already, such as the aforementioned Japan and Italy, China and South Korea, which were expected to see their first population decline in 2021. Brazil's population is expected to start declining in 2042, France's in 2049 and even India’s vast population is projected to start shrinking in 2062.

Among developed nations, the United States, Canada and Australia are notable exception, with none of them currently expected to see their first population decline in the 21st century.

Geographically, many African nations are still growing rapidly, resulting in a continental shift in global population that will see countries like Nigeria, the Democratic Republic of Congo, Ethiopia and Tanzania among the most populous nations in the world by 2100.

Tyler Durden Tue, 07/14/2026 - 04:15

France Cuts 6.4 GW Of Nuclear Power As Heatwave Grips The Country

By Michael Kern of OilPrice.com,

France’s nuclear power generation was slashed by 6.4 gigawatts (GW) on Monday amid a prolonged and intense heatwave that hiked river temperatures and limited the ability of the power plants to use the water to cool reactors.

As many as eight reactors in France, which is Europe’s leader in nuclear power generation, were forced to curtail power output, according to data from the plants’ operator EDF and grid operator RTE cited by Reuters.

The 6.4 GW of curtailed power output was equivalent to 14% of France’s overall power demand as of Monday morning. 

The reactors where output has been limited include Saint Alban 1 and 2, reactors 3, 4, and 5 at Bugey, Golfech 2, and Blayais 1 and 3.

The Golfech 2 and Bugey 3 reactors were taken fully offline, while the other six were operating at reduced rates as of Monday morning.  

This is not the first time France has had to curb output at reactors and limit the nuclear power production, due to high summer temperatures. 

France’s nuclear power generation accounts for around 70% of its electricity mix, and when its reactors are fully operational, it is a net exporter of electricity to other European countries. 

Despite the curbs of nuclear generation during the current heatwave, data from RTE suggests that France would remain a net exporter with over 10 GW of power exported to France’s neighboring countries on Monday. 

The hydropower generation would also be a concern amid the heatwave that has lasted a least a week and is expected to continue at least until Wednesday this week. 

With temperatures topping 40 degrees Celsius (104 F) for days, red alerts have been issued throughout France amid the heatwave, and thousands of people have died of heat-related conditions since late June, when the record-breaking extreme summer temperatures started to disrupt life. Even the most famous and prestigious cycling event, the Tour de France, held a shortened stage on Sunday for the first time ever, due to the extreme heat.  

Tyler Durden Tue, 07/14/2026 - 03:30

German Parliament Moves To Criminalize Denying Israel's "Right To Exist"

Various European initiatives and policies which criminalize "holocaust denial" have for years dominated headlines and driven immense controversy over freedom of speech and public debate.

But Germany is now taking it a big step further, with the Bundesrat, Germany's upper house of parliament, having just approved a bill that would criminalize publicly denying Israel's "right to exist" or calling for its abolition.

via Reuters

If passed into law, a conviction would bring up to five years in prison, according to the proposed legal change. The legislation will now move to the lower house.

If ultimately approved, it would make Germany the first country in Europe to punish speech denying Israel's "right to exist".

Critics of such efforts to crack down on pro-Palestinian activism and protests have pointed out that the question of any nation's "right" to "exist" is a highly philosophical and theoretical one, which makes it strange that any government would codify the statement into law, elevating it to a kind of of dogma.

The legal proposal would greatly expand Germany's existing Section 130 of the criminal code - which is what authorities currently use to prosecute Holocaust denial.

However, dissenters within the German government have warned the proposed expansion would be a violation of the German constitution, as it would establish a "special right against a specific opinion" in breach of Article 5. Here's what the constitution's "freedom of expression" clause says:

Every person shall have the right freely to express and disseminate his opinions in speech, writing and pictures and to inform himself without hindrance from generally accessible sources. Freedom of the press and freedom of reporting by means of broadcasts and films shall be guaranteed. There shall be no censorship.

The Bundestag's research service has warned in a report on violation of individual rights: "Both the rejection of the right of the State of Israel to exist and the call for the elimination of the state are likely to constitute subjective value judgments."

Recently Tucker Carlson unpacked the difficulty inherent in the whole notion of a country having a "right to exist" in a testy exchange with a reporter. Carlson has also frequently pointed out that the phrase is a bizarre and uncommon formulation, given that not even Americans in all of history have spoken in terms of a nation-state or government 'existing' as a 'right'...

A reporter asks Tucker Carlson if Israel has a “right to exist.” When he presses her to define it, she can’t.

Tucker responds: “I believe in universally applicable standards, and if they’re not universally applicable, they’re not standards — they’re preferences.” pic.twitter.com/tUzmcDShSy

— Michael Hennessey (@Snowflake_News) March 21, 2026

More recently, Amnesty International has publicly come out in opposition to the German measure, stating, "The protection of Jewish life is of particular importance – but this initiative massively endangers freedom of expression."

In the United States, the Israel-Gaza conflict has increasingly split the Democratic Party, amid growing midterm related turmoil. But there's been an increasing debate raging on the Right as well, as younger generations of conservatives show much more willingness to criticize Israel and push against taxpayer funding for the Israeli government and military to the tune of billions.

Tyler Durden Tue, 07/14/2026 - 02:45

10,000 Excess Deaths During June European Heatwave, Official Data Show

Authored by Guy Birchall via The Epoch Times,

More than 10,000 excess deaths were reported across Europe during the recent heatwave that baked the west of the continent in late June, official data showed on June 13.

A man cools himself during a heatwave in Chamonix, France, on June 25, 2026. Reuters/Pierre Albouy

More than 9,000 of those who passed away were aged 65 and above, according to European Monitoring of Excess Mortality for Public Health Action (EuroMOMO), a continent-wide mortality monitoring network backed by the World Health Organization (WHO) and the European Centre for Disease Prevention and Control.

The data, pooled from national mortality statistics in 27 European countries, included excess deaths from all causes, not just heat-related ones, during the week of June 22 to 28, when the heatwave peaked in France, Spain, the UK, and other countries.

Though the deaths cannot be attributed exclusively to the soaring temperatures, scientists have said there were no other known major factors, such as disease outbreaks, that would likely have contributed to the mortality spike during that week.

Extreme heat can kill by causing heat stroke or aggravating cardiovascular and respiratory diseases, with older people among the most vulnerable, according to the WHO.

"To have this kind of excess at this time of year is unusual. It's really high," Lasse Vestergaard, chief physician at Denmark's Statens Serum Institut, which hosts EuroMOMO, said. "It is difficult to explain this high excess mortality by anything but the extreme heat."

The combined mortality for the same 27 nations over the previous eight weeks averaged around 500 deaths per week below typical levels; however, EuroMOMO data is subject to revision, either up or down, as more data flow in over the coming weeks.

EuroMOMO does not publish excess deaths per individual country, but it noted that France and Belgium both logged "very high excess" mortality in the last week of June. Spain, Switzerland, and the Netherlands noted "moderate excess," England, Wales, Italy, and Germany registered a "low excess" of deaths, and the remaining 17 showed normal levels.

The heatwave at the end of June disrupted power supplies, shut schools, and smashed temperature records in France, Spain, and the UK.

Belgium's excess mortality was the highest during any heatwave in records going back to 2000, according to the country's public health institute Sciensano.

"Our latest analysis shows that 1,747 more people died than expected during this heatwave, corresponding to an excess mortality of 48 percent," Sciensano said in a July 10 LinkedIn post. "The deadliest days, 27 and 28 June, recorded mortality levels comparable to those observed during the peak of the first COVID-19 wave in April 2020."

During the heatwave, France experienced its hottest ever national average days on June 24 and June 25, with both days recording an average temperature of 30 degrees Celsius (86 degrees Fahrenheit) over 24 hours, surpassing the previous record set on June 23 of 29.8 degrees Celcisus (85.6 degrees Fahrenheit), according to French weather agency Meteo-France.

That average is calculated using figures from 30 weather stations evenly distributed across the country.

According to Meteo-France, the highest temperature recorded in France was 46 degrees Celsius (about 114.8 degrees Fahrenheit) at Verargues on June 19, 2019.

In another scientific study from the UK - by Imperial College London, the UK Met Office, and the London School of Hygiene & Tropical Medicine - it was estimated that some 2,700 people died from heat-related causes in England and Wales alone, amid the May and June heatwaves.

A 2007 study by the French Academy of Sciences on the 2003 European heatwave found that more than 70,000 excess deaths occurred across 16 countries that year.

American political scientist Roger Pielke Jr. has said that the increase in deaths in Europe in previous years is attributable to the lack of air conditioning across the continent.

"The math is simple," Pielke Jr., who has previously worked at the U.S. National Center for Atmospheric Research and the University of Colorado, Boulder, wrote in a June 25 post on Substack, discussing the deaths in the European heatwave of 2022.

"Today's heat deaths reflect today's level of AC coverage. Raise the coverage, and a share of those deaths are eliminated - in proportion to how protective AC is and how many more households gain it."

Pilke stated that if Europe had American levels of air conditioning penetration during that period, deaths would have been reduced by as much as 26,000.

A Dash Q400-MR Fireguard aircraft of the civil security drops retardant mixed with water during a demonstration of firefighting capacity by the Gironde's Fire and Rescue Departmental Service in Saint-Aubin-de-Medoc, France, on July 3, 2026. Christophe Archambault/AFP via Getty Images Tyler Durden Tue, 07/14/2026 - 02:00

Before The First Switch Goes Dark

Authored by Madge Waggy,

Most people imagine that the beginning of a crisis announces itself with unmistakable spectacle. We picture fighter aircraft crossing national borders, emergency broadcasts interrupting television programs or financial markets collapsing within a single afternoon. It is an understandable expectation because history is usually taught through decisive moments rather than the countless ordinary decisions that quietly shaped them. Yet those who spend their careers inside engineering firms, logistics agencies, intelligence communities or infrastructure operators often develop a very different understanding of how the modern world changes. They learn that the first indication of an approaching storm is rarely dramatic. It is more likely to appear inside revised procurement schedules, altered technical standards, infrastructure assessments, budget reallocations or conference presentations attended by specialists whose work almost never attracts public attention. By the time newspapers discover a story worth printing, the people responsible for keeping societies functioning have often been adapting to it for years.

That quiet transformation has become increasingly visible throughout the past decade. Public guidance issued by organizations responsible for protecting critical infrastructure has gradually adopted a vocabulary that barely existed in mainstream discussion twenty years ago. Engineers now speak routinely about degraded environments, operational resilience, segmented industrial networks, manual recovery procedures, continuity during communications failures and prolonged operation without external support. None of those expressions should be interpreted as evidence that catastrophe is imminent. They reflect a practical reality familiar to every experienced systems engineer: sufficiently complex networks cannot be made invulnerable, only more resilient. As industrial automation, cloud services, satellite communications and artificial intelligence have become intertwined with electricity, transportation, finance and healthcare, protecting every connection has become less realistic than ensuring that essential services continue operating even when individual components fail.

The evolution of that philosophy became particularly noticeable during (May 2026), when the U.S. Cybersecurity and Infrastructure Security Agency introduced CI Fortify, a genuine initiative encouraging operators of critical infrastructure to strengthen their ability to isolate essential operational systems, maintain continuity under degraded conditions and recover safely after sophisticated cyber incidents. Read on its own, the guidance appears entirely reasonable. Governments prepare for unlikely events because preparing after they occur is no preparation at all. Utilities routinely rehearse emergency procedures, hospitals conduct disaster exercises and telecommunications providers regularly test continuity plans. None of that should surprise anyone familiar with critical infrastructure. What deserves closer attention is not the existence of those preparations, but the remarkable consistency with which similar assumptions have begun appearing across sectors that once planned almost independently.

When Separate Warnings Began Pointing in the Same Direction

Viewed individually, the defining infrastructure events of recent years appear entirely unrelated. The cyberattacks that disrupted portions of Ukraine’s electrical grid during (2015–2016) demonstrated that industrial control systems could become direct targets during geopolitical conflict. The Colonial Pipeline ransomware incident in (2021) revealed how disruption affecting digital business environments could rapidly produce consequences extending far beyond computer networks. Public advisories released between (2023–2025) described persistent activity attributed to groups such as Volt Typhoon, focusing less on immediate destruction than on quietly establishing access to communications and infrastructure considered strategically important. Around the same period, numerous governments expanded investment in transformer manufacturing, emergency communications, domestic semiconductor initiatives, resilience exercises and continuity planning for sectors supporting essential public services. Each development possesses a logical explanation when examined independently. Together, however, they reveal something more interesting than any single incident ever could: institutions responsible for infrastructure increasingly appear to be planning for prolonged disruption rather than isolated emergencies.

That distinction matters because it changes the questions engineers ask. Traditional emergency planning assumes that neighboring regions remain capable of providing assistance. Severe storms damage one area while another sends repair crews. Flooding interrupts one transportation corridor while alternative routes remain available. Cyber incidents affecting individual organizations can often be contained with outside expertise, replacement hardware and unaffected communications. Planning for prolonged disruption is fundamentally different. It quietly assumes that assistance itself may become slower, limited or temporarily unavailable because multiple systems are experiencing strain simultaneously. Once that possibility enters the equation, resilience is no longer measured by how quickly help arrives. It is measured by how effectively critical services continue functioning before help can arrive at all.

Among specialists, this shift has inspired an increasingly sophisticated discussion about dependency rather than vulnerability. Modern civilization depends upon far more than electricity alone. Reliable electrical transmission supports telecommunications. Telecommunications synchronize banking, emergency services, transportation and logistics. Satellite timing enables countless digital systems that most people never realize depend upon it. Cloud computing has become deeply integrated into industries that once operated almost entirely through local infrastructure. Hospitals rely upon uninterrupted electrical supply while simultaneously depending on communications, pharmaceutical logistics, refrigeration, digital imaging and increasingly interconnected medical equipment. Every improvement introduced over the past two decades has increased efficiency, yet every improvement has also woven another thread into a fabric whose overall strength depends upon thousands of relationships functioning at the same time.

One veteran electrical engineer, speaking during a public infrastructure symposium several years ago, summarized that reality in a sentence that received polite applause before disappearing into the conference proceedings.

“The strongest systems are rarely the ones with the fewest weaknesses. They’re the ones that continue working after the first weakness has already been discovered.”

At the time, the remark sounded like little more than professional wisdom shared among colleagues. Read today, against the backdrop of evolving resilience strategies, it carries a noticeably different weight. The conversation surrounding infrastructure is no longer centered exclusively on preventing failure. Increasingly, it asks how societies continue functioning when failure, in one form or another, inevitably arrives.

The Hardware Beneath the Illusion

The digital economy has cultivated an extraordinary illusion: that civilization has somehow detached itself from the physical world. Financial markets appear to move through invisible algorithms, artificial intelligence exists inside distant cloud platforms, governments communicate through encrypted networks that seem to occupy no tangible space at all. Yet every byte crossing an ocean still depends upon glass fibers resting on the seabed. Every intelligent machine relies upon semiconductor fabrication plants that cannot simply be replicated in another country within a few months. Every modern city remains anchored to substations, transformers, switchyards and transmission corridors whose design has changed far less dramatically than the software now controlling portions of their operation. Beneath the elegant surface of digital civilization lies an industrial skeleton assembled over generations, and unlike software, steel does not receive overnight updates.

Engineers responsible for maintaining electrical transmission systems rarely describe the grid as a machine. They describe it as a living balance. Electricity exists only because generation and consumption remain synchronized across enormous distances every second of every day. A disturbance in one region does not politely remain where it began; the network responds instantly, redistributing stress according to immutable physical laws rather than human expectations. Decades of engineering have produced protection systems capable of isolating faults before they propagate, making today’s electrical grids remarkably reliable by historical standards. That reliability, however, often conceals the extraordinary precision required to sustain it. Millions of people experience nothing more dramatic than a light switch responding exactly as expected, never realizing that countless automated decisions have already occurred long before the room became illuminated.

Large transformers occupy a unique position within that ecosystem. They are simultaneously ordinary and irreplaceable. Most consumers never notice them, yet they quietly regulate the flow of electricity between generating stations and distribution networks serving entire metropolitan regions. Manufacturing one is neither simple nor rapid. Specialized steel, precision winding, insulation systems, exhaustive testing and carefully planned transportation all contribute to production timelines measured in months rather than days. Industry reports have repeatedly highlighted concerns surrounding global manufacturing capacity for these components, encouraging utilities to diversify suppliers and improve long-term planning. Those discussions are rooted in practical logistics rather than sensational predictions, yet they reveal something important about the modern age: resilience increasingly depends not only upon defending infrastructure, but upon preserving the industrial capability required to rebuild it.

The Architecture of Dependence

If electricity forms the nervous system of contemporary civilization, information has become its circulatory system. The overwhelming majority of international internet traffic still traverses undersea fiber-optic cables stretching silently across the ocean floor, linking continents through infrastructure that receives remarkably little public attention considering the volume of global commerce it supports. Satellite constellations contribute precise timing signals essential for telecommunications, navigation, banking and electrical synchronization. Cloud computing has concentrated immense computational capability within a comparatively limited number of facilities distributed across strategic regions. Individually, each system possesses redundancy and sophisticated safeguards. Together, they form an intricate architecture whose greatest strength lies in cooperation rather than isolation.

Infrastructure researchers frequently note that efficiency naturally encourages concentration. Manufacturers specialize where expertise already exists. Logistics hubs expand because traffic is already flowing through them. Data centers emerge where energy, connectivity and climate create economic advantages. The process is rational, incremental and almost invisible while it unfolds. Only much later does the resulting map reveal itself, showing how entire industries gradually clustered around a relatively small collection of indispensable locations. Such concentration is not evidence of negligence. It is often the inevitable consequence of decades spent optimizing performance, reducing costs and increasing reliability. Yet optimization introduces a subtle trade-off. Systems become extraordinarily capable during ordinary conditions while requiring increasingly sophisticated planning to remain equally capable during extraordinary ones.

This changing landscape has influenced resilience planning across numerous sectors. Public frameworks released during recent years increasingly emphasize continuity under degraded conditions, regional cooperation, diversified supply chains and the preservation of essential industrial capacity. Rather than assuming uninterrupted global logistics, planners have begun considering scenarios in which replacement equipment arrives more slowly, specialized expertise becomes temporarily scarce and communication between organizations grows less predictable. None of these assumptions requires a dramatic trigger. Natural disasters, geopolitical tension, technical failures or overlapping disruptions could all produce similar operational challenges. The common denominator is not catastrophe itself, but the recognition that interconnected systems recover according to the pace of their slowest critical dependency.

The New Currency of Strategic Competition

Competition between major powers has evolved alongside the infrastructure supporting modern societies. During much of the twentieth century, strategic advantage was often measured through visible indicators—industrial production, military hardware or territorial influence. The twenty-first century has introduced a quieter dimension in which resilience itself has become a form of national capability. Governments invest not only in stronger defenses, but in redundancy, domestic manufacturing, emergency communications, diversified energy sources and continuity planning designed to ensure that essential services endure even when conditions become unusually demanding. Those investments are rarely accompanied by dramatic public announcements because preparedness seldom attracts sustained attention during periods of relative stability. Nevertheless, their cumulative effect reveals an increasingly sophisticated appreciation for how deeply national security and civilian infrastructure have become intertwined.

Artificial intelligence is beginning to influence that relationship in ways still unfolding. Defensive systems already employ machine learning to identify anomalous network activity, prioritize alerts and assist analysts responsible for protecting vast digital environments. At the same time, researchers openly acknowledge that similar technologies can accelerate reconnaissance, automate portions of vulnerability discovery and increase the speed at which complex information is analyzed. Like previous technological revolutions, AI is unlikely to eliminate the importance of human judgment; instead, it is gradually compressing the time available for that judgment to be exercised. Decisions that once unfolded over days may increasingly require responses within minutes, placing greater value on preparation completed long before any incident occurs.

Perhaps that explains why resilience has become one of the defining themes of contemporary infrastructure planning. The objective is no longer simply to construct stronger systems. It is to ensure that societies retain the ability to adapt when conditions depart from expectations. Whether future disruptions arise from cyber incidents, natural disasters, geopolitical crises or combinations that no planner can fully predict, the institutions responsible for keeping modern civilization functioning appear to be converging upon a remarkably consistent conclusion. The most valuable capability may not be preventing every failure. It may be preserving enough stability that recovery remains possible before uncertainty has an opportunity to become something far more difficult to measure: a loss of confidence in the systems people once assumed would always be there when they reached for the light switch.

The Last Illusion

Perhaps the most remarkable feature of modern civilization is not its technological sophistication, but the confidence it has quietly cultivated in the permanence of that sophistication. Entire generations have grown up believing that electricity, communications, digital finance, satellite navigation and global logistics are constants rather than achievements maintained every hour by millions of interconnected decisions. We rarely stop to consider how many engineers, technicians, dispatchers and operators stand between ordinary life and extraordinary disruption because, on most days, their greatest success is remaining invisible. The world functions so consistently that continuity itself has become almost impossible to appreciate until it is interrupted.

History, however, has rarely been generous toward assumptions of permanence. Every era eventually discovers that the systems appearing strongest are often those that have simply not yet encountered the combination of pressures capable of exposing their hidden limits. That observation is not a prediction of collapse, nor is it evidence that disaster waits just beyond the horizon. It is simply the lesson repeated by complex societies across centuries. Stability is never a destination reached once and preserved forever; it is a condition renewed continuously through preparation, maintenance and adaptation. The documents now published by infrastructure agencies around the world reflect that understanding with increasing clarity. They speak less about preventing every conceivable failure and more about preserving the ability to function when prevention proves incomplete. Quietly, almost imperceptibly, resilience has replaced certainty as the defining objective.

Imagine, then, a future evening that arrives without warning and without spectacle. There are no air raid sirens, no dramatic broadcasts interrupting television programming and no unmistakable declaration that history has changed course. Instead, the first indications are so ordinary that almost everyone dismisses them. A district experiences an unexpected outage lasting longer than anticipated. Mobile networks become unreliable in another region. Freight movements slow because several digital systems require manual verification. Financial transactions begin taking a little longer to settle. Emergency maintenance teams receive an unusually high number of unrelated service requests within the same twenty-four-hour period. Individually, every incident possesses a perfectly reasonable explanation. Collectively, they form a pattern that remains invisible precisely because no single event appears extraordinary enough to command immediate attention.

Days later, normality gradually returns. Electricity is restored, communications stabilize, transportation resumes its familiar rhythm and public attention shifts toward newer headlines. For most people, the episode survives only as a temporary inconvenience, another brief disruption absorbed into the endless flow of modern life. Yet inside the control centers responsible for keeping those systems alive, the memory lingers differently. Engineers archive operational data, compare response timelines, revise contingency procedures and quietly alter assumptions that had remained unchanged for years. The infrastructure looks exactly as it did before, but the confidence surrounding it has subtly evolved. Experience has introduced questions that routine maintenance alone cannot answer.

Perhaps that is the quiet transformation history records most often and society notices least. Great changes seldom announce themselves at the moment they begin. More often, they emerge gradually, hidden within revised engineering standards, procurement decisions, emergency exercises and technical language that appears too mundane to deserve public attention. Years later, when historians search for the moment everything started to shift, they rarely find a single defining event. Instead, they discover countless ordinary decisions made by people who recognized that the world had become more complicated than it appeared from the outside.

The unsettling possibility is not that the lights may one day fail. Every electrical system eventually experiences interruptions, and every infrastructure operator plans accordingly. The more thought-provoking possibility is that one day the lights will return exactly as expected, the streets will fill once again with traffic, financial markets will reopen, phones will reconnect and daily routines will continue almost unchanged—while somewhere beyond public view, the people entrusted with maintaining those systems quietly acknowledge that the assumptions guiding them for decades are no longer sufficient. If such a moment ever arrives, the most profound change may not be visible in darkened skylines or silent cities. It may exist only inside the minds of those who understand that the next interruption will no longer be measured by how quickly electricity returns, but by how much confidence disappeared before it did.

Tyler Durden Mon, 07/13/2026 - 23:25

Saudi Arabia Turns Taiwan Into Drone Export Leader As Iran War Reshapes Warfare

New data show that Saudi Arabia purchased a record $47.2 million worth of small drones from Taiwan last month, underscoring how governments are beginning to rapidly procure suicide drones.

Bloomberg was the first to cite new data from Taiwan's Ministry of Finance showing that drone exports surged in June, driven by a record order from Saudi Arabia. The timing suggests Riyadh absorbed many hard lessons during the US-Iran conflict and is moving quickly to build stockpiles of one-way attack and interceptor drones.

The exported drones weighed roughly 7 to 15 kilograms - or up to 30 pounds - and in a recent report by Piper Sandler analyst Clarke Jeffries, these drones are considered Group 1 and Group 2.

Jeffries laid out three key insights about the rapidly changing defense landscape:

He also listed ways to profit from the drone industry as the wave of orders begins:

Read:

• "Only The Beginning": How To Profit From The Asymmetric Warfare Boom

It's not only one-way attack and interceptor drones that will be produced en masse globally, but also counter-AUS technology to defend high-value assets such as refineries, ports, data centers, and power grid infrastructure

.Related:

• US Military Races To Harden Strategic Nuclear Bases With Counter-Drone AI Shield

In the mergers and acquisitions space, DZYNE Technologies - a maker of drones, loitering munition-type systems, and counter-drone technology - was recently sold by its investors to Nasdaq-listed defense and industrial technology firm Ondas Holdings for a handsome profit.

To begin the week, Bloomberg reported that drone company Helsing completed a $18 billion financing round from investors, including Goldman Sachs.

Refer to our note above on how to profit from the asymmetric warfare boom, as this theme will continue.

Tyler Durden Mon, 07/13/2026 - 23:00

We Can't Control This: The Populist Tide Is Coming For Both Parties

Authored by Charles Bass and Richard Swett via RealClearPolitics.com,

Who was David Brat?

Many Americans have forgotten the name. We haven’t.

In 2014, David Brat, then a little-known economics professor, stunned the political world by defeating House Majority Leader Eric Cantor in a Republican primary in Virginia. At the time, most observers viewed the upset as an isolated event - a local revolt against an established leader who had lost touch with his district. In retrospect, it was something much larger. David Brat’s victory was an early warning shot. It signaled that a powerful populist movement was building within the Republican Party, one fueled by frustration, distrust of institutions, anger toward political elites, and a conviction among many voters that neither party was listening to them. Two years later, that same current helped propel Donald Trump to the presidency and fundamentally reshape the Republican Party.

As we watched with dismay the results of the New York Democratic congressional primaries, the memory of David Brat came floating back.

What happened in New York may prove to be a similar moment for Democrats. For years, political analysts have treated populism as primarily a Republican phenomenon. That was always a mistake. Populism is not an ideology. It is a political force. It can emerge from the left or the right. It thrives whenever large numbers of citizens conclude that the people running the country’s major institutions no longer understand or care about their concerns.

Today, both parties are confronting their own versions of that phenomenon.

The populism that has transformed the Republican Party often channels its frustrations toward immigration, globalization, cultural change, and government dependency. The populism now emerging within parts of the Democratic coalition directs its anger toward concentrated wealth, large corporations, and what it sees as entrenched political and economic power. The targets differ. The emotions do not. At its core, populism reflects a broad loss of confidence in elites – political, economic, academic, media, and corporate. Millions of Americans increasingly believe that the institutions that once commanded public trust are no longer delivering results, no longer accountable, and no longer responsive.

That sentiment has been building for years. The financial crisis damaged confidence in Wall Street. Endless political gridlock damaged confidence in Washington. Social media accelerated distrust of traditional news organizations. Rising housing costs, student debt, stagnant wages, and growing economic inequality left many younger Americans questioning whether the system works for them at all. When confidence in institutions erodes, voters look elsewhere.

They become more willing to embrace candidates who promise disruption rather than stability, confrontation rather than compromise, and sweeping change rather than incremental reform.

As former members of Congress who represented New Hampshire’s Second Congressional District from opposite political parties, we find this trend deeply troubling. American democracy has historically depended on a broad center. Progress came not because one side achieved total victory, but because competing interests eventually found common ground. The system was designed to reward coalition-building and compromise. Today, compromise is increasingly viewed as weakness.

Moderation is often treated as betrayal. Political incentives now favor outrage over persuasion and ideological purity over practical governance. That dynamic is affecting both parties.

The Republican Party has already experienced a dramatic populist transformation.

The Democratic Party may now be entering a similar period of internal upheaval.

Whether that process ultimately reshapes Democratic politics as profoundly as Trump’s movement reshaped the GOP remains to be seen. But the signs are increasingly difficult to ignore.

What concerns us most is that the underlying forces driving these movements are not going away. Neither party has yet found a convincing answer to the frustrations that fuel populism. Economic insecurity remains widespread. Institutional trust remains low. Political polarization continues to deepen. Younger voters are increasingly skeptical of traditional leadership. Social media amplifies anger faster than solutions. These are not temporary conditions. They are structural challenges.

As strange as American politics has seemed over the last decade, we should not assume we have reached the end of the story. We may only be in the middle chapters. The populist wave that transformed the Republican Party did not stop with Eric Cantor’s defeat. It gathered strength over time. The same could happen on the Democratic side.

We hope we are wrong. We hope both parties rediscover the value of practical problem-solving, responsible leadership, and the political center. Our country needs strong institutions and leaders willing to govern rather than simply mobilize outrage. But history suggests that once public confidence in elites begins to break down, the forces unleashed are difficult to contain. David Brat’s victory was not the cause of the populist transformation of the Republican Party. It was a symptom. What happened in New York may be another symptom. And if that is true, American politics is about to get a lot more unpredictable.

The tide is rising. We may not be able to control it. But we would be wise to understand it.

Tyler Durden Mon, 07/13/2026 - 22:35

GOP Uses Kavanaugh's Own Playbook To Take Another Swing At Birthright Citizenship

Last month, the Supreme Court struck down Trump's executive order attempting to end birthright citizenship. Justice Kavanaugh joined that majority in striking down the order, but he also filed a separate partial dissent, and his reasoning did Republicans a favor.

Chief Justice John Roberts wrote for the majority in Trump v. Barbara, a 5-4 decision joined by Justices Kagan, Sotomayor, Barrett, and Jackson, and leaned on the 1898 case U.S. v. Wong Kim Ark to hold that the 14th Amendment guarantees citizenship to "all children born in the United States and subject to its power."

Kavanaugh concluded Trump's order conflicted with an existing federal statute, not the Constitution or the 14th Amendment specifically. His complaint was narrower. Trump's order collided with a law Congress passed in the spirit of an amendment conservatives say was written mainly to secure citizenship for freed slaves and their children. Kavanaugh's fix was simple. Congress could rewrite the statute.

The Court today holds that the Order violates the Fourteenth Amendment to the Constitution. I respectfully disagree with the Court's constitutional holding. In my view, the Executive Order does not violate the Fourteenth Amendment. But the Order does contravene a federal statute, 8 U. S. C. §1401(a). Congress could - consistent with the Fourteenth Amendment - amend §1401(a) or otherwise enact new legislation establishing exceptions to birthright citizenship for children born to foreign citizens unlawfully or temporarily in the country. But Congress has not yet done so.

Now the GOP is seeking to end birthright citizenship for illegal immigrants via the roadmap that Kavanaugh laid out. Sen. Jim Banks (R-Ind.) filed legislation on Monday called the Citizenship Act. It would strip automatic citizenship from children born in the United States to illegal immigrants and birth tourists by classifying their parents as "invaders" under federal statute, a designation drawn from the 2025 executive order President Trump signed declaring the crisis at the southern border an invasion.

Its text states that "any person who enters the United States without authorization or for the purpose of engaging in birth tourism is considered an invader," and it strips their children of automatic citizenship on that basis.

The bill leaves the Constitution untouched. The bill also finds cover from a source Republicans rarely quote approvingly. In the 2025 case U.S. v. CASA, Justice Sonia Sotomayor, an Obama appointee, confirmed in a separate opinion that "children born of alien enemies in hostile occupation" fall outside birthright citizenship. She stopped short of calling illegal immigrants invaders. Banks' bill closes that gap for her.

Beyond the Wong Kim Ark language, the bill rests on Article IV's requirement that the federal government "protect each state against invasion," and Congress' Article I power to "establish a uniform rule of naturalization," a direct challenge to blue-state officials who have floated their own citizenship rules.

The bill's supporting material goes further than the usual border-security framing. It notes that some Mexican nationals view northward migration as a means of reclaiming territory lost in the military conflicts of the 1840s, as formalized in the 1848 Treaty of Guadalupe Hidalgo, the agreement that made Texas and the surrounding Southwest part of the United States. It also cites Chinese birth tourism operations encouraged by the Chinese Communist Party as evidence that birthright citizenship has become a vector for foreign influence rather than a settled matter of domestic law.

"The Supreme Court's birthright citizenship decision was an unprecedented assault on American sovereignty, and we must do whatever it takes to save our country," Banks told Fox News Digital. He added, "I'm leading the Citizenship Act to reverse the effects of this consequential ruling and ensure the millions of illegal aliens that invaded our country can't continue to exploit our immigration system."

The Citizenship Act faces a much steeper climb than Kavanaugh's opinion ever cleared. Any immigration bill needs 60 votes to break a filibuster, and Democrats have shown zero appetite for handing Trump a win on birthright citizenship after fighting his executive order all the way to the Supreme Court. Kavanaugh may have offered a roadmap, but the Senate remains a problem.

Tyler Durden Mon, 07/13/2026 - 22:10