The post Under Trump, Foreigners are Ripping Us Off More Than Ever: Trade Deficit Jumps in August appeared first on CEPR.

My mid-week morning reads:

• The Diesel Weapon: Why a rather unglamorous fuel is suddenly at the centre of a transatlantic power struggle, and why this matters for all of us (Material World)

• 250K per year is plenty of income: If you don’t feel rich here, you probably never will: Twitter of course hates this conversation because half that website is comprised of people terrible with money, or who actively trade (gamble) crypto/equities etc, or enjoy private taxis for their burritos (Uber eats).  (Hot Takes) but see Even High Earners Are Living Paycheck to Paycheck: Why $300,000 Isn’t Enough Anymore: Amid worsening signals of retirement readiness, Goldman Sachs sees an opportunity for employers to provide financial guidance and support. (Barron’s)

​• The Surge in Rates Is Blowing Up Commercial Real-Estate Deals: Buyers who signed contracts when financing was cheaper are now demanding price cuts or walking away. Special servicing on CMBS loans hit 11.42% in August, the highest since February 2013.  (Wall Street Journal)

• When the financial system becomes searchable: Financial crises rarely begin with one self-contained weakness. They emerge when vulnerabilities connect: leverage meets a margin call; a margin call meets an illiquid market; falling prices meet common collateral; and a funding concern becomes a run. Before the event, each link may sit in a different spreadsheet, institution or jurisdiction. Afterwards, the route through them can look obvious. This post explores a possibility raised by advances in artificial intelligence (AI): that the financial system could become searchable, making more of those routes visible beforehand. (Bank Underground)

• The end of short-form content. I’m calling it: TikTok, Instagram, and Twitter are not going away, but their times as genuine social media platforms are behind them. It’s time to go long. (Embedded)

• Ce n’est pas la France qui quitte l’euro, c’est l’euro qui quitte la France: The move in French-German 2 year bond spreads today is reminiscent of the euro crisis. The ECB needs to step in. But its circuit-breaker could break the French government. (Half Macro Half Climate)

• The dawn of the age of the exoskeleton: The devices continue to show noticeable benefits for users in various real-world tasks. Ildar Farkhatdinov: from Seattle Mountain Rescue teams to warehouse workers, powered exoskeletons are leaving the lab and showing measurable gains in real-world tasks. (The Conversation)

• Russia’s new drive to crush Ukraine: Since July, Russian strikes have closed the Black Sea to shipping, stranding a bumper harvest in Ukrainian silos and pounding Odesa’s and Kyiv’s power grids. Ukraine’s shortage of Patriot interceptors is the binding constraint. Moscow’s relentless offensive on cities and ports has stalled the country’s Black Sea grain exports, severing an economic lifeline. (Financial Times) see also War Is Forcing the World to Reckon With Geography’s Power: Patricia Cohen: we thought money, goods and information had beaten distance. Then one blocked Persian Gulf shipping route pushed up energy prices and interest rates, disrupted factories and threatened harvests worldwide. Trade blockages in the Persian Gulf have reminded the world that there are forces as great as or greater than technology and globalization. (New York Times)

​• Measles Is Forcing Hospitals to Adapt to a New Normal: U.S. cases top 3,600, the most since 1991. Hospitals are dusting off decades-old protocols — parking-lot triage, negative-pressure rooms — and Pennsylvania alone has logged 943 cases and five deaths. The US resurgence of measles is forcing hospitals and health systems to adopt new protocols and procedures to deal with a disease they thought was in the past. (Wired)

• Taylor Swift’s Audience Is Growing Up. Her Music Is Devolving. The singer’s music once put a clever twist on ideas about aging and adulthood. Now she just seems to be going backwards. (The Atlantic)

Video of the day: Ted Sarandos on Next Stage of Growth for Netflix

Be sure to check out our latest Masters in Business interview with Omar Aguilar, President, Chief Executive Officer, and Chief Investment Officer of Schwab Asset Management, which runs more than $1 trillion across over 100 ETFs, mutual funds, and separately managed account strategies. He has held both the CEO and CIO titles since 2022

 

New Innovation Is Required to Fund AI’s $6 Trillion Buildout

Source: Bain

 

Sign up for our reads-only mailing list here.

The post 10 Wednesday AM Reads appeared first on The Big Picture.

Cowardly Europe Fears Dissent

Authored by J.B. Shurk via American Thinker,

Orwellian brutes now govern Europe...

Former-banker-turned-tiny-French-President Emmanuel Macron blasted what he called "American free speech" while speaking to reporters last week. Defending the European Union's robust censorship policies, le petit fromage insisted that Europe's speech-policing Digital Services Act should censor information that governments consider false "much more extensively, much faster, and much more forcefully."

Macron then did his Orwellian best to condemn free speech as oppression and praise censorship as liberation: "So-called American 'free speech' - at least as it exists today and has been promoted by some people - is the opposite of free speech." The terribly disliked French leader continued, "My freedom cannot mean that I am free to...insult you or vandalize the public square that belongs to everyone. Yet that is some people's idea of 'free speech.'"

Then the little mouse of a man roared, "Until we hold those who disseminate content on social media accountable, we will not be able to regulate it." Furthermore, if "someone writes something" that is "false," then that person should be "held accountable." Tough talk from an insecure man afraid of words.

What is going on in Europe? Why is the whole continent so scared of public debate and dissent? If the political Establishment is unable to defend its ideas and policies without censoring the opposition, then its ideas and policies are absolute rubbish! The people who have willed their way to power across Europe apparently believe that they cannot win an argument unless they are the only ones permitted to speak!

That's a bit like a puny pugilist demanding that referees tie another boxer's hands behind his back before declaring himself world heavyweight champion!

Personally, I think mini-mouse Macron is just tired of people pointing out that he married his grandmother (or his grandfather, as the case might be). We used to teach our children, "Sticks and stones may break my bones, but words will never hurt me." Now Western leaders are so terrified of words that they'd rather imprison everyone with an opinion than learn to take a joke or hear a contrary point of view.

Here's the truth that Macron and his fellow Euro-weenie censors refuse to understand: Free speech is free only when a speaker can say something offensive or controversial without fear of the State's wrath.

Although Macron wants to criminalize speech that he considers untrue, he spreads endless falsehoods of his own! While beseeching British Prime Minister Andy Burnham to betray the will of voters who chose to leave the European Union ten years ago, the Napoleon-complex-afflicted French president whined, "Brexit is the biggest lie of the last thirty years!" That boast is absurdly false (or what European censors call criminal "misinformation"). The British people did vote to separate themselves from Queen Ursula von der Leyen's European empire.

Even though Brexit fearmongers predicted imminent economic collapse should the British people choose to rule themselves - and despite the best efforts of Brexit saboteurs at home and abroad - the United Kingdom is currently outperforming France and other major European economies, having led the G7 in growth during the first half of 2026. One reason Brexiters voted to leave the E.U. in 2016 was because British citizens did not want their military to be swallowed into a European Army beyond their control - a prospect, ironically enough, which pro-E.U. stalwarts once called "disinformation" but which has proved increasingly prescient.

Queen von der Leyen and her Brussels Eurocrats are working feverishly today to use the Russia-Ukraine War as an excuse to create increasingly centralized European defense structures.

It's also worth remembering that European expansionists originally promoted the Union as an intergovernmental body meant to boost European economic markets and promised that the supranational institution would never directly usurp national sovereignties. That was a clear case of "misinformation" and certainly one of the biggest lies of the last half-century!

Speaking of lies that European leaders have promoted as "truths," the Russia Collusion Hoax against President Trump (which British and Ukrainian intelligence agencies helped to propagate), the "global warming" apocalypse (which was scheduled to kill us all fourteen years ago), and the "Reign of COVID Error" (during which "health experts" lied about the virus arising from nature instead of a Chinese laboratory and then lied about fake "vaccines" being "safe and effective") are three of the biggest mass frauds and information warfare campaigns ever perpetrated by governments against the public.

Macron has never called for these lies to be censored from social media platforms. He just doesn't like it when random Americans point out that the European Union is an undemocratic and totalitarian system of governance that should be burned to the ground. And he really doesn't like it when commoners correctly point out that his old high school teacher - and abusive wife - sometimes slaps him around.

Unfortunately, Macron's inability to understand the importance of free speech is a European-wide learning disability.

In the U.K., a member of the public has filed a Prevent referral against eighty-six-year-old comedy legend John Cleese because he continues to make fun of Islam's love for rape and murder. The complaint argues that Cleese should be considered a "moderate to high risk" for "radicalisation, communal tension, and hate incidents" for writing, among other things, "I personally prefer a culture that does not approve of FGM, Child Marriage and Killing Infidels."

The complaint accuses Cleese of "anti-Muslim hate" and seeks further scrutiny of the cultural icon. In response to news of the referral, the Monty Python alum wrote, "The Islamic male ego becomes so bloated by its lack of restraint that it believes any criticism is blasphemy," and, "I look forward to being arrested." Later, he declared his targeting "One of the proudest moments of my life."

Meanwhile, a retired police officer was recently fined more than £1,000 under the U.K.'s Communications Act for reposting a bacon joke ridiculing Islam. As one free speech advocate rightly observed, "No-one making a similar joke about Jesus would face prosecution."

At the same time that it targets retired cops for having a sense of humor, the British government continues to hand out "skilled worker sponsorship licenses" to Islamic bookstores that sell books on jihad!

An Islamic preacher in London encourages Muslim men to beat their wives if they refuse to obey. The same Islamic cleric describes "acceptable" execution methods for gay men, including throwing them off tall buildings and pummeling their bodies with rocks. These sermons are available on YouTube.

Nevertheless, the mosque still enjoys charitable status in the U.K. Islamic jihadists preach violence and murder, and law enforcement agencies ignore their threats, just as they ignored - for decades - Islamic men raping tens of thousands of young girls across Britain.

However, when a comedian and a retired police officer mock Islam's penchant for violence, the British government scrutinizes their speech as "threats." That should be no surprise when U.K. police forces instruct officers that Nigel Farage's immigration beliefs are "Islamophobic hate crimes" and encourage non-Muslim staff to fast during Ramadan in "solidarity" with their Islamic conquerors.

Two-tiered "free speech" is official government policy. Furthermore, a Home Office-linked unit has been recording social media criticism of the government's Prevent program, including 77 observations concerning people and organizations criticizing Prevent on X and Reddit. Documents show that government-linked officials are monitoring and recording the speech of people who publicly challenge this controversial counter-extremism policy.

Orwellian brutes now govern Europe. Need further proof? The Green Party in the U.K. wants to replace "mother" and "father" with more "inclusive" terms. Meanwhile, the Germans just awarded the Westphalian Peace Prize to NATO's military alliance.

Parents are strangers. War is peace. Free speech is violence. Censorship promotes liberty.

In truth, freedom in Europe is dead.

Tyler Durden Wed, 10/07/2026 - 02:00

The Petrodollar Could Break Soon - And Upend The Global Financial System

Authored by Nick Giambruno via InternationalMan.com,

The Iran war could claim a casualty far more consequential than a missile battery, an air base, or an oil tanker: the petrodollar system.

For more than 50 years, US protection of the Gulf monarchies has helped support global demand for dollars and US government debt. That bargain may now be coming under strain.

The concept is straightforward.

The US provides military protection to countries such as Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, and Qatar.

In return, these countries price much of their oil in US dollars and recycle large amounts of their oil revenue into US financial assets, including Treasuries.

Call it an alliance.

Call it a strategic partnership.

I prefer to call it a protection racket.

Whatever name you choose, the arrangement has provided enormous support for the dollar since Nixon severed its last link to gold in 1971.

Oil sits at the center of the global economy. Every industrial economy needs it. If countries need dollars to participate in the global oil trade, they have a powerful reason to hold dollars.

That creates demand for the currency that has nothing to do with buying American goods or services.

It also creates demand for US financial assets.

Oil exporters earn dollars. They need somewhere to put them. For decades, a large portion flowed back into US banks and Treasury securities.

That helped deepen the Treasury market, support the dollar, suppress US borrowing costs, and finance deficits that no other country could sustain.

But every protection racket depends on one thing:

The protector must provide protection.

The Iran war threatens that premise.

If the Gulf monarchies conclude that the US cannot protect their oil infrastructure, shipping lanes, cities, and regimes from Iran, why should they continue upholding their side of the bargain?

That question could reshape the international monetary system.

And one man warned almost exactly 20 years ago about the signal that would tell us this shift had begun.

Ron Paul Saw This Coming 20 Years Ago

On February 15, 2006, Congressman Ron Paul delivered a little-known but prophetic speech on the floor of the House of Representatives called "The End of Dollar Hegemony."

He identified the signal investors should watch for:

"The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros. The sooner the better."

I discussed this subject with Ron Paul at an investment conference years ago. He stood by that assessment.

His point was simple.

Watch the oil producers.

The day they start moving away from dollars and toward gold - or a monetary system that gives them access to gold - the foundation beneath the dollar-based financial system starts to crack.

We may now be approaching that point.

Why the Gulf States Could Turn East

The Gulf Cooperation Council includes Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, and the United Arab Emirates. Together, these countries rank among the most important oil exporters on Earth.

China sits on the other side of that trade.

It is the world's largest oil importer and the GCC's largest trading partner.

That creates a natural relationship: China needs enormous quantities of energy, and the Gulf states need enormous markets for their oil.

For years, China and the Gulf states have discussed ways to conduct more trade outside the dollar system.

But the Gulf monarchies faced a constraint.

They depended on the US security umbrella.

Moving too far toward China risked alienating the country they counted on to protect them.

The Iran war changes that calculation.

If the Gulf states conclude that Washington cannot protect them from Iran - and that the American military presence can turn their countries into targets - the value of that security guarantee falls.

They then have a powerful incentive to reach an accommodation with Iran while deepening economic ties with China.

That would weaken one of the political foundations supporting the petrodollar.

And China has spent years building an alternative.

From the Petrodollar to the Petroyuan - and Gold

China understands the biggest problem with asking an oil producer to accept yuan.

Why would Saudi Arabia, the UAE, or another exporter want to accumulate piles of Chinese currency?

Beijing has spent years developing an answer.

In 2018, the Shanghai International Energy Exchange launched a yuan-denominated crude oil futures contract. That gave oil producers another mechanism for pricing and trading crude outside the dollar.

But China has also built something that makes the yuan far more useful to commodity exporters: a path from yuan into physical gold.

An oil producer can sell crude into the Chinese market, receive yuan, spend those yuan on Chinese goods, or use China's financial and gold-market infrastructure to convert surplus yuan into physical bullion.

That changes the proposition. The exporter does not have to choose between holding dollars and accumulating piles of yuan. It can turn part of its trade surplus into an asset with no issuer, no counterparty, and no foreign government standing between the owner and the wealth.

Think about the difference.

Under the dollar system, an oil exporter sells a finite natural resource and receives financial claims issued by the US government.

Those claims carry political risk.

Washington demonstrated that risk when it froze Russia's reserves after the invasion of Ukraine.

Gold carries no such counterparty risk.

Nobody can print it.

Nobody can default on it.

And once an oil producer takes physical possession, no foreign government can freeze it with a keystroke.

From the perspective of a country trying to reduce its exposure to Washington, that has obvious appeal.

A viable path from oil to yuan to physical gold gives Gulf producers a way to reduce their dependence on the dollar without accumulating large reserves of Chinese currency. If the Iran war weakens confidence in US protection, the financial infrastructure needed to move away from the petrodollar already exists.

The Gulf states have a path from oil to gold that bypasses the dollar. But what happens to your wealth if they take it?

A loss of demand for dollars and US debt could erode your purchasing power and shake your investments. The time to prepare is before that shift gathers force.

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

Tyler Durden Tue, 10/06/2026 - 23:25

Kremlin Says Russians Should Ignore "Rumors" On Possible Plague Outbreak In Siberia

Authored by Jack Phillips via The Epoch Times,

The top Kremlin spokesman sought to tamp down "various rumors and speculation" about reports of a possible plague outbreak in Siberia and said that Russians should only monitor statements from government sources.

Kremlin spokesman Dmitry Peskov in Moscow on Feb. 18, 2022. Sergey Guneev/Sputnik/Kremlin via Reuters

"The leading agency with authority in this area is Rospotrebnadzor," Kremlin spokesman Dmitry Peskov said on Monday, according to Russian media outlet TASS, referring to Russia's national public health agency. "And it is Rospotrebnadzor's official statements that should be relied upon, without listening to various rumors and speculation."

"Rospotrebnadzor is home to highly qualified professionals in this field. Let's listen to their official statements," Peskov added.

The statement comes as Russian health authorities said they took preventative actions after the death of a laboratory worker at the Anti-Plague Research Institute of Siberia and the Far East near Irkutsk, Russian news agency Interfax reported on Oct. 4.

The worker was diagnosed with pneumonia of unknown origin, Rospotrebnadzor said, although officials haven't yet confirmed the cause of her death. It's also not clear when the worker died.

"Due to the patient's professional activities, upon receiving information, a comprehensive set of anti-epidemic measures was immediately and fully implemented in accordance with sanitary legislation," Rospotrebnadzor said over the past weekend.

That included finding "the widest possible circle of people who had been in contact with the patient," the health agency said.

The hospital has been placed under quarantine, Mayor Maxim Modin said on Oct. 2, no longer admitting or discharging patients, and its laboratory halted carrying out routine tests. The hospital's outpatient clinic kept operating as usual, he said.

On Monday, Igor Kobzev, the regional governor of the Irkutsk region, issued a statement on social media platform Telegram that testing has shown "no microorganisms related to her professional activities were found in the woman's biopsy specimens."

"The cause of her death was pneumonia of unknown etiology," Kobzev added. "Importantly, no new cases of Anti-Plague Institute employees seeking medical attention have been identified in the past few days."

The official described the "sanitary and epidemiological situation" in his region as "currently stable," without elaborating, before he thanked the chief of Rospotrebnadzor and its staff.

An independent Russian media outlet, Lyudi Baikala, reported that as many as 200 people in the area who came in contact with the laboratory worker have been placed under quarantine. Neither Rospotrebnadzor officials and Kobzev have commented on the number of people who were placed under quarantine.

Responding to the reports, a U.S. State Department spokesman told The Epoch Times on Monday that Trump administration officials are aware of reports of "a fatal case of suspected pneumonic plague" and is monitoring the situation.

"Many details have not been confirmed. We encourage Russian authorities to share accurate information quickly and openly," the State Department spokesman said.

The United Nations' World Health Organization (WHO) describes pneumonic plague as a less common but severe form of the infection caused by the bacteria Yersinia pestis, which is generally found in rodents, small mammals, and fleas.

"Plague can be a very severe disease in people, with a case-fatality ratio of 30 percent to 60 percent for the bubonic type, and it is always fatal for the pneumonic and septicaemic kinds when left untreated," WHO says on its website, referring to other forms of the disease.

Tyler Durden Tue, 10/06/2026 - 16:20

Germany's Former Spy Chief Arrested In Biggest Espionage Scandal Of The Century

August Hanning, former head of the German BND foreign intelligence agency, which is Germany's equivalent of the CIA, has been arrested on espionage charges in a shocking and unprecedented situation in which a country's top intelligence officer and head of a national spy agency was caught spying for another state.

The 80-year-old faces formal charges including "treasonous espionage, spying out state secrets, attempted treason, and espionage" - according to German media. While an official statement from the prosecutor's office has not yet identified the foreign service he's suspected of working for, Israel has been widely named, also given this past well-documented associations and links.

August Hanning, via Associated Press

Curiously, Hanning's arrest at his home in Nordwalde in western Germany comes a full two decades after he left the top intelligence post. He served as BND chief from December 1998 to November 2005 before moving to the Federal Interior Ministry.

In short, it appeared he not only illegally held on to thousands of classified documents, but used them over the years to peddle influence - including preparing a presentation for a foreign intelligence service based on the internal government docs. What's more is he was covertly obtaining new documents even many years out of office.

Israeli media itself is highlighting that the way Hanning was caught actually involves shady Israeli operatives:

The affair rocking Germany involves thousands of classified documents, suspected payments, contacts with foreign intelligence officials and a surprising connection to Israel: The investigation that led to its exposure actually began with the case involving the abduction of millionaire heiress Christina Block’s children, in which Israelis were also implicated.

International reports at the time: "According to prosecutors, August Hanning, who once headed Germany’s domestic intelligence service, allegedly approached Peri [ex-Shin Bet head], now owner of the Israeli consulting firm CGI Group, to organize a team of Israeli operatives for the abduction. The team allegedly assaulted Hänsel, kidnapped the children, smuggled them into Germany, and handed them over to Block. A Danish court later ordered her to return the children to their father."

According to a summary of the plot coming to light through the high profile Christina Block case via Channel 7 Israel National News:

Hanning had already come under scrutiny by authorities as part of an entirely separate case - the case of Christina Block, heiress to a German restaurant empire, who is standing trial over the abduction of two of her children from Denmark to Germany amid a bitter custody dispute with her former husband.

That case also attracted attention in Israel. The investigation implicated Israelis, including security personnel, and reports about the affair also mentioned former members of Israel’s security establishment.

Hanning’s name was linked to allegations concerning an earlier attempt to return the children to Germany, claims that he denied. As part of that investigation, investigators searched his home and office in September of last year and seized equipment for examination.

That, according to the German investigation, is where the case took a dramatic turn. Secret BND documents were discovered on an electronic storage device seized from Hanning. The problem was obvious: Hanning had left the intelligence service in November 2005 and therefore should not have had access to current intelligence material.

More insane details from the Block case and kidnapping plot via The Guardian:

A second former high-ranking BND official has also been arrested, and the person's home also searched. That official is accused of handing over to Hanning additional secret documents in exchange for payment.

Some of the alleged details of the Block case are wild. It was Hanning that set up Block with the brutal Israeli contractors who dragged the children into the forest and bound them up:

Ex BND chief August Hanning has more Israeli ties than a Tel Aviv haberdashery Hanning introduced German heiress Christina Block to the Israeli private spying firm CGI Group Block used the Israelis to abduct her own children from her ex and plant fake images of child abuse on his phone Hanning, who served on the board of another Israeli spying firm, arranged the operation through former Shin Bet chief Yaakov Peri

— Max Blumenthal (@MaxBlumenthal) October 6, 2026

That official has been identified only as Manfred D. - Hanning's own former chief of staff when he had been BND chief. Manfred D., who had continued on as chief of staff for Hanning's successors, was apparently from 2012 to March 2026 continuing to hand over a wealth of classified files to Hanning, despite his long having been out of government. Manfred D. is charged with "aiding and abetting attempted treason and espionage against the state."

German media is widely describing the espionage case as the "biggest espionage scandal of the century." Marc Henrichmann, who chairs the German parliament's intelligence oversight committee, declared in the wake of the high level arrests that "whoever allies themselves with the enemies of our liberal democracy will be found out."

    OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Tue, 10/06/2026 - 16:00

Nickelodeon's Parent Hub Is A Nightmare Woke Indoctrination Syllabus For Kids

Authored by Steve Watson via Modernity.news,

The network that once sold slime and SpongeBob is running a parent portal that treats political activism as bedtime reading.

The children's channel has assembled a disturbing syllabus, and it wants the parents to administer it.

Libs of TikTok flagged nickparents, the network's own resource hub, on Monday.

WTF. @Nickelodeon, a major children's TV network, has a parent resource page that provides WOKE info guides for KIDS.

Topics include teaching children about "anti-racism", "countering islamophobia", promoting gender ideology, and MORE.

They want to indoctrinate your children. https://t.co/wcIGhik5Te

— Libs of TikTok (@libsoftiktok) October 5, 2026

The tiles are not subtle. Countering racism and anti-Blackness. Countering islamophobia. Celebrate LGBTQ+ families, "proud every day of the year." A GLSEN guide to combating "LGBTQIA+ discrimination." Gun violence. The Capitol attack. Vocabulary on "equity and race."

Nickelodeon's parent site hosts the guides, under a banner that reads "PARENT RESOURCES" and the line "We may not have all the answers...but we know some folks who might."

The folks, it turns out, are far left activist partners.

One tile points parents to "Talk & Take Action: A Guide to Countering Racism and Anti-Blackness," produced with The Conscious Kid. "Dismantling anti-Blackness begins with education," the educator version says, further noting "Teachers we're calling on you!"

A companion page, "How Kids Can Be Allies," opens with "No one is ever too young to learn how to be an ally." The Conscious Kid, Nickelodeon writes, "developed a list of actions to guide kids on how to be an ally to BIPOC. Share these actions with your children and continue the fight against racism and bias."

The list tells children to "take on issues of racial injustice as your own," to understand "systemic racism," and to "commit to doing the work" as "a daily, lifelong practice."

It's absolute indoctrination designed to make kids believe anti-black racism is rampant and out of control.

The roundup goes further. It points families to Ground Control Parenting, including posts Nickelodeon itself describes as "Talking to Your Children About George Floyd and Tips on Bringing Your Child to a Protest."

Showing Up for Racial Justice is recommended for "how to support protesters." A Nick News special, Kids, Race and Unity, hosted by Alicia Keys, comes with a discussion guide that states "children start receiving explicit and implicit messages about race from birth and begin to show racial bias by age 3."

Believe it or not, toddlers are not racist because Alicia Keys says so.

That is not a cartoon network explaining why sharing is nice. It is a Cartoon Network handing parents a protest manual and a claim that toddlers are already racially biased.

Next to the race guide sits "Talk and Take Action: Parents', Caregivers' and Educators' Guide to Countering Islamophobia," again written with The Conscious Kid.

The guide says it is "designed to provide parents and caregivers with the tools, tips, and language needed to talk about Islamophobia" and "simple, but empowering, action steps families can take together."

One of those steps is blunt: "The single most powerful thing you can do to combat Islamophobia is to learn about the Islamic faith."

Good lord.

The same document steers families toward "small acts of activism" and names political figures in its discussion material. A children's network is instructing households on how to police speech about a religion, under a clinical label that treats scepticism as a pathology.

Parents who have watched Islamist terror, grooming-gang scandals, and campus intimidation do not need a slime brand to redefine their concerns as a phobia.

The LGBTQ tiles are just as direct. "Celebrate LGBTQ+ Families" promises parents can be "proud every day of the year." The GLSEN tile is an educators' guide to "combating LGBTQIA+ discrimination."

Nickelodeon's caregiver version says the network is "proud to present this parent resource," packed with "key terms, conversation starters, a reading list, and a reflection journal, provided by Nickelodeon's partners at GLSEN."

GLSEN is not a neutral literacy charity. It is an advocacy group whose business is school gender policy. Nickelodeon has put that group's vocabulary in front of the people raising the audience.

The same grid offers "Discussing Gun Violence with Kids" and "How to Talk About the Capitol Attack." That's one thing for the likes of CNN. A preschool-to-tween channel packaging race ideology, religious-speech rules, gender doctrine, guns and January 6 as a parental product is quite something else.

None of this arrived in a vacuum. We've previously highlighted how Nickelodeon put a drag performer in front of children for Pride.

The clip, first pushed years earlier and still circulating, features drag performer Nina West singing through the colours of the Pride flag. Fox News quoted the lyric: "Baby blue, pink and white represent transgender people because every letter in LGBTQ plus is equal. And Black and Brown represent the queer and trans people of color."

Nickelodeon's own YouTube description calls it an original song "about the meaning of the rainbow Pride flag" and tells viewers "June is Pride Month, so let's celebrate by lifting up voices in the LGBTQIA+ community!"

This is a real video by Nickelodeon aimed at toddlers and preschoolers: https://t.co/FH5VJzu4T9

— End Wokeness (@EndWokeness) June 25, 2024

The same performer fronted a Blue's Clues Pride parade sing-along. Yahoo reported the lyric "Ace, bi and pan grown-ups you see can love each other so proudly," and quoted the team calling it "the queerest thing I've ever seen happen in the preschool space."

During the pandemic, in June 2020, as riots spread after the death of George Floyd, ViacomCBS cable channels, including Nickelodeon, went dark for 8 minutes and 46 seconds.

Newsweek reported the on-screen line: "Nickelodeon is going off the air for 8 minutes and 46 seconds in support of justice, equality and human rights." CNN reported that the spot flashed "I can't breathe" over the sound of gasping, and that chief executive Bob Bakish described the purpose as to "honor George Floyd and pay tribute to other victims of racial violence."

Parents filmed children asking for the channel to be turned off. The Independent reported Nickelodeon's reply to the complaints: "Unfortunately, some kids live in fear everyday. It is our job to use our platform to make sure that their voices are heard and their stories are told."

The network then aired a "Declaration of Kids' Rights," which Newsweek and CNN both quoted in part: "You have the right to be seen, heard and respected as a citizen of the world... You have the right to be treated with equality, regardless of the color of your skin... You have the right to an education that prepares you to run the world."

A kids' channel appointed itself the ministry of fear, then scolded parents for noticing their children were scared.

The programming has matched the pamphlets. In 2014, The Legend of Korra ended with its lead in a same-sex relationship, a first for a Western children's cartoon of that profile.

In June 2020, Nickelodeon's official account posted "Celebrating #Pride with the LGBTQ+ community and their allies this month and every month," with graphics of Korra, transgender actor Michael D. Cohen, and SpongeBob.

Creator Stephen Hillenburg had long described SpongeBob as asexual and had said he never intended to write sexuality into the series. The corporate account folded the character into the campaign anyway.

Parents are not confused about what this is. A channel that wants to sell them cartoons has spent years selling them a politics: race as original sin, dissent about Islamic extremism as a phobia, gender ideology as a family craft project, and the living room as an organising cell.

Anyone still sitting their kids in front of this is directly complicit in fostering the next generation of mentally deranged far left radicals.

Tyler Durden Tue, 10/06/2026 - 15:45

Trump To Unveil Anduril Deal, Bringing Submarine Parts Factory To Baltimore

Bethlehem Steel's Sparrows Point complex near crime-ridden Baltimore City was once the largest steelmaking facility in the US and viewed by some as once the world's largest steel mill.

Decades of deindustrialization led to the mill's closure in 2012. By 2014, the 3,300-acre site entered a redevelopment phase and was transformed into a giant logistics and industrial complex under new ownership called Tradepoint Atlantic. 

Tradepoint Atlantic is set to enter a new chapter, with Anduril Industries having won a $2.9 billion US Navy contract to manufacture components for Virginia-class nuclear-powered attack submarines there.

According to The New York Times, Palmer Luckey's defense company plans to invest $3.7 billion in the project and directly create more than 3,000 jobs. The new shipyard is expected to open in 2030.

"We need to grow the maritime industrial base, the submarine industrial base, so that we can produce more submarines," Anduril Chief Strategy Officer Christian Brose was quoted as saying.

Left-wing Maryland Governor Wes Moore and other state Democrats are expected to attend the announcement following lengthy negotiations over the redevelopment plans. Maryland and Baltimore County are expected to provide hundreds of millions of dollars in tax subsidies.

The former Bethlehem Steel site has undergone a total transformation. It combines warehouses, distribution centers, industrial facilities, deepwater shipping terminals and rail connections to CSX and Norfolk Southern. Tenants include Amazon, FedEx, Under Armor, Home Depot, Volkswagen, BMW and others.

"President Trump knows a self-sustaining domestic shipbuilding sector is critical for national and economic security," said Anna Kelly, a White House spokeswoman.

Luckey commented on The Wall Street Journal's report on Monday, which said the site would manufacture drone boats, calling the reporting "false."

FYI, this "Exclusive" story is false. We told the reporter it was false, but they decided to trust their sources instead.

— Palmer Luckey (@PalmerLuckey) August 6, 2026

Brose said manufacturing drone boats or unmanned weapons of war was not part of the site's initial plans.

Hopefully, Tradepoint Atlantic brings stable, goods-producing jobs to the metro area, which has experienced decades of deindustrialization under Democratic control, leaving the crime-ridden city whose population has collapsed to a 100-year low. 

Tyler Durden Tue, 10/06/2026 - 15:20

Office CMBS Delinquency Rate Re-Spikes To 12.2%, Far Worse Than Financial Crisis Peak As End Of Extend-And-Pretend Looms

Authored by Wolf Richter via WolfStreet.com,

The dictum morphs from "Survive till '25" (when low interest rates were supposed to return) to "Sell at today's price, or the lender will."

The delinquency rate of office mortgages that have been securitized into commercial mortgage-backed securities (CMBS) re-spiked in recent months and in September hit 12.2%, the second highest ever, behind only January 2026 (12.3%), and 1.5 percentage point above the worst moments of the Financial Crisis, according to data by Trepp, which tracks and analyzes CMBS.

The biggest driver of the increase in September was a $1.1 billion maturity default on a loan that had matured in August, and was not paid off. That loan was securitized in 2021 and the different slices of CMBS were sold to institutional investors around the world at the time. The banks that originated the loan are off the hook.

The loan is backed by eight office and film-studio properties of 2.2 million square feet in Hollywood, whose largest tenants are Netflix and 20th Century Fox. But two of the Netflix leases and the 20th Century Fox lease, representing 30% of the net rentable area, are expiring soon, and renewals are still up in the air.

Extend and pretend forevermore?

The $1.1 billion Hollywood loan that went into maturity default in September had been transferred to special servicing in July 2026. The loan is backed by five Class A office towers built between 2008 and 2021 and three film-studio properties, totaling 2.2 million square feet, all located within a mile of each other in Hollywood. The borrowers are the mega-landlords Blackstone Property Partners and Hudson Pacific Properties.

The special servicer that is now managing the loan, representing the CMBS holders, is SitusAMC, the largest special servicer by unpaid principal balance ($111 billion as of January), according to SitusAMC.

Netflix is the largest tenant, leasing 57.8% of the net rentable area (NRA). One of its leases expires in January 2027 (7.0% of the NRA) and another lease expires in June 2028 (17.2% of the NRA), totaling 24.2%. Discussions with Netflix about lease renewals are ongoing, according to SitusAMC, cited by Fitch Ratings, which rates the CMBS.

20th Century Fox is the second largest tenant. Its lease, accounting for 6.4% of the NRA, expires in December 2026. The decision to renew the lease is awaiting confirmation on whether studio productions will be renewed for additional seasons, and the "outcome will determine if the leases will be extended," according to Fitch, citing the special servicer.

Here is the extend and pretend: The loan was recently modified, and the borrowers, Blackstone Property Partners and Hudson Pacific Properties, were granted a 14-month maturity extension through November 9, 2027, at the current (far below market) fixed interest rate of 4.435%, according to Fitch, citing the special servicer. To get the extension, Blackstone and Hudson Pacific agreed to fund a leasing reserve with $20 million from sources other than property cash flow. Fitch noted that the loan would remain subject to a "full cash trap" until full repayment, with all excess cash flow being directed to the leasing reserve.

Citing the risk that the Netflix and 20th Century Fox leases will not be renewed, Fitch changed its rating outlook to "negative," putting the CMBS in line for a downgrade "if market conditions, valuations, and/or actual portfolio performance deteriorate beyond Fitch's current expectations of sustainable performance, particularly if the borrower is unable to address upcoming lease rollover risk."

The properties were 84.9% occupied in July, down from 91% in September 2025. But the upcoming lease expirations of 30% of the NRA, if not rolled over, would leave nearly half of the space in the properties vacant.

A $470 million loan on office properties in downtown Houston was the second largest driver behind the increase in the default rate as it missed the maturity payoff earlier, according to Trepp.

The loan, originated and securitized into a single-borrower CMBS in 2021, is backed by the 34-story 1.0 million sq. ft. One Allen Center, completed in 1972; the 50-story 1.2 million sq. ft. Three Allen Center, completed in 1980; and an adjacent 6-story parking garage with a health club on top. Brookfield Properties is the landlord.

The interest-only loan comes with a floating rate of SOFR plus 3.08%. After the Fed's most recent rate hike, SOFR has been about 3.88%, which would move the current rate on the loan to 6.96%. Another rate hike by the Fed will move the loan's interest rate to about 7.2%. The loan was originated when SOFR was near 0%.

The property is 71% occupied. The largest tenants include Freeport LNG, Motiva, and Plains Marketing, according to Trepp.

S&P Global, which rates the CMBS, noted in March that it was concerned Brookfield Properties would not pay off the loan at the "final extended maturity date" in April. And that maturity date came and went without payoff.

Trepp said that the loan's move to non-performing status in September could reflect the ongoing loan negotiations.

The idea is to extend and pretend some more until interest rates come back down to 2% or whatever, which might allow for the loan to get refinanced.

Extend-and-Pretend Not Forevermore.

This extend and pretend, or the end thereof, was the theme in today's First Draft, a note that CRE publication Bisnow sent to subscribers. The note would be hilarious if it weren't so serious, or both:

"One of this industry's favored pastimes is the slogan, and for years it reprised one Rialto's Joe Bachkosky recalled onstage: 'Survive until '25.' But when 2025 failed to deliver, it turned into 'bliss in '26.' Lately, a few idealists have floated 'heaven in '27,' which sounds less like a prophecy every week and more like a prayer."

Mark Bonner, Bisnow's editor-in-chief and author of the note, continued:

"AEW's Lauren O'Neil called the moment 'a shift back to fundamentals,' which is industry speak for when the spreadsheet voodoo stops working.

"KBS' Sondra Wenger said today's distress 'is in the structure,' a murky way of saying the building is fine, but the price paid for it isn't.

"Poverni Sheikh Group's Eugene Poverni said the risk curve has 'slid one to the right,' meaning buyers want value-add returns for core-plus risk. Translate that once, and buyers want more for less, but translate it twice, and prices start to tumble.

"Meanwhile, refinancing is all but dead.

"That could mean an apartment building that runs smoothly day to day is in trouble anyway because someone paid a 3-cap for it in 2021. At the time, the price made sense. On Sept. 30 of that year, the 10-year closed at 1.52%, with the Fed's benchmark rate near zero. Five years later to the day, as many of those loans come due, the 10-year closed at 5.29%."

And Bonner concluded:

"But last week, the people holding the capital stopped pretending, and it seems like 'survive until 25' finally has a successor. It does not rhyme, and nobody will put it on a panel slide: Sell at today's price, or the lender will."

Tyler Durden Tue, 10/06/2026 - 15:00

The $1 Million Tanker Was Just The Start: Every Crude Freight Index Hits Record High As Hormuz "Works" Too Well

Just when we thought crude tanker rates couldn't go any higher, they did - again.

A week ago, a record million dollars a day charter for a supertanker was the punchline. Now it's the floor: the Baltic Exchange's TD3C, the benchmark Saudi Arabia-to-China VLCC route, hit yet another all-time high of $1.33 million per day on Monday, up 10% on the week and 21 times where it was a year ago!

But the real fireworks are elsewhere. As Lloyd's List's Greg Miller writes, the tanker market's "cascade" effect has gone into overdrive, with record VLCC strength spilling into suezmaxes, and suezmax demand in turn dragging up aframaxes:

Crude tanker markets hit a tipping point in mid-September, surging to a new level as more crude exited the Strait of Hormuz. Over the past three days, rates crossed another tipping point, spiking even higher due to the lagged global 'cascade' effect.

In other words, the better the Hormuz shuttle "works", the more expensive it gets to ship a barrel anywhere in the world.

Let's take a closer look at the carnage segment by segment, what Goldman, JPM and BofA say is driving it, and why the only thing standing between owners and $1.6 million a day is the refining margin.

"Available Tonnage Is Vacuumed Off Position Lists The Second It Is Marketed"

Regular readers know we have been tracking the tanker rate crisis since before it was cool - specifically February 20 - a week before the first Iran shots were fired, when the Baltic's Middle East-China VLCC route had "only" tripled to $151K a day. We were also on the $1 million milestone before it happened: "Mideast Chaos Sends Supertanker Rates Soaring To Near Record $1 Million A Day", a headline we upgraded from $800K within hours. Then on Sept 23, with rates on the Gulf-India route nudging $1 million, we put out this chart:

What changed in the past week?

According to Lloyd's List, Gulf producers decided to push more tankers through Hormuz under US military protection (even as Iran ratchets up attacks: UKMTO confirmed two separate projectile strikes on crude tankers in and around the Strait just over the weekend), which sharply increased near-term cargo supply and pulled more VLCCs to wait for ship-to-ship (STS) transfers in the Gulf of Oman. Clarksons Securities puts the wait for an STS slot at seven to 10 days, and estimates STS volumes have surged from 5-6 million barrels a day a month ago to 12 million b/d.

And since VLCCs loading via STS in the Gulf of Oman earn about 50% more than VLCCs loading in the Atlantic, with a much shorter ballast leg from Asia, owners are doing the rational thing. As Poten & Partners' head of tanker research Erik Broekhuizen put it:

"Even in a crazy market, shipowners tend to make rational decisions. The earnings discrepancy has kept VLCCs closer to the Asian market, leaving it to suezmaxes and aframaxes to do the heavy lifting out of the US Gulf, turbocharging their earnings."

Translation: the Atlantic has run out of supertankers. With few ballast VLCCs around, charterers have been forced to split 2 million-barrel stems into 1 million-barrel suezmax cargoes, and the result is what Fearnley Securities calls a market where "available tonnage is seemingly vacuumed off position lists the second it is marketed." Sparta Commodities summed it up even more concisely: "Atlantic freight is repricing violently on real tightness."

Parabolic Suezmaxes

Suezmax owners are the big winners. Atlantic basin suezmax rates more than doubled in three trading days, and they were already at or near record highs before the latest jump. On Monday:

• US Gulf-Europe: $577,792/day, up 150% w/w
• Guyana-Europe: $584,012/day, up 150% w/w
• West Africa-Europe: $567,138/day, up 145% w/w
• Black Sea-Med (with a Russia-Ukraine war premium on top): $801,077/day, up 115% w/w

Every single one of the Baltic Exchange's suezmax indexes hit an all-time high on Monday. For context, the US Gulf-Europe route was paying $90K at the start of September.

And now the cascade is running in reverse too: with suezmaxes (half the cargo) earning more than double what VLCCs do in the Atlantic, VLCC owners are simply holding out for more. The Baltic's West Africa-China VLCC index jumped 43% w/w to $697,160/day and US Gulf-China rose 20% to $473,958, both all-time highs. The Oman-China route, the one that actually captures the STS shuttle trade, was steadier at an "astronomical" $860,580/day, just shy of its Sept 17 record.

As for TD3C, Lloyd's List notes it is "perhaps the least relevant" index to actual owner earnings since almost no one sails direct from Saudi Arabia to China anymore - most crude is shuttled out to STS positions in a two-step process - but as a proxy for the total freight bill it is hard to beat. Nothing says "orderly market" like the benchmark route nobody uses hitting a record every week.

The Aframax Record Books Get Rewritten

Atlantic aframaxes had their moment in March, when panicked Asian buyers booked unusually long-haul aframax loads out of the US Gulf to replace Mideast crude. Those peaks were never revisited... until now. On Monday the Baltic's US Gulf-Europe aframax index was at $313,794/day (+44% w/w), Cross-Med at $343,227 (+19%), Caribbean-US at $335,288 (+70%) and North Sea-Europe at $348,651 (+10%). In early September most of these were paying $45K-$100K.

"Increased suezmax activity continues to provide further support for aframax demand," said Clarksons in its Monday brokerage report. Put simply, there is no class of crude tanker left that isn't being squeezed. And for those looking for the long-term perspective, here is John Kemp's inflation-adjusted Baltic Dirty Tanker Index: at 6,242 in October, it is now the highest on record in real terms, blowing past the November 2004 peak of 5,195.

Goldman: Gulf Exports Are Back... Which Is Exactly The Problem

Here is the paradox. Normally, more oil getting out of the Gulf would be bearish for freight. Not this time. As Goldman's commodity team wrote last week in "Adaptation: Persian Gulf Exports Return to 2025 Level" (available to pro subs), which we discussed at the time:

We estimate that Persian Gulf oil exports, including estimated "dark exports", have recovered to 23.3mb/d over the last week, in line with their 2025 average, as exports doubled in September. Increased Hormuz exports, including via ship-to-ship transfers, have driven the recovery despite the attack on the Saudi East-West pipeline (which disrupted flows to Yanbu for nearly two weeks) and the continuing Houthi blockade of Saudi exports via Bab-al-Mandab. Crude accounted for nearly 90% of the September recovery, reaching 19mb/d (108% of 2025 average)...

But while the barrels are back, the logistics are not.

A pre-war barrel took one voyage from Ras Tanura to Ningbo; today it takes a dark transit, a shuttle run, a 7-10 day wait off Fujairah or Sohar, a ship-to-ship transfer and then the long haul. Every one of those steps ties up tonnage. It's also why we have been saying since early March that Fujairah and the Hormuz bypass routes would become the center of the oil universe (a call Abu Dhabi is now putting tens of billions behind), and why the US Navy's billion-barrel escort operation has been, from the owners' perspective, the gift that keeps on giving.

JPMorgan's top oil strategist Natasha Kaneva made a similar point in her latest Oil Flash Note (available to pro subs): Hormuz throughput was back to ~13 million b/d, but "SoH transmission is not due to improved safety but improved ability to operate under risk," and freight rates were "~$1.27mm/day, a record." (They are higher now.) Goldman also points out that refined products are more flammable than crude, so the physical risks of a Hormuz crossing are greater for product tankers, which is one reason Gulf product exports are still stuck at ~50% of 2025 levels while crude is at 108%.

Meanwhile, Goldman's Rich Privorotsky summed up the market's take on Monday: "Plenty of threatened escalation and additional tankers hit, but diplomatic pathways remain open and, crucially, oil is getting out of the Gulf." Yes it is - at $1.33 million a day.

How High Can It Go? Ask The Refiners

For decades, $100,000 a day was the psychological bellwether of a VLCC upcycle. As Lloyd's List puts it, tanker shipping's "Overton window" now has an extra zero. Or as DNB Carnegie shipping analyst Jorgen Lian confessed at last week's Capital Link conference: "Our imagination is obviously not imaginative enough, because we've been lagging the reality by far." Spoken like a true sell-sider.

So where is the ceiling? It's set by the (parabolic) crack spread. If importers pay so much in freight that they can't earn a profit refining the crude, they stop shipping it. And with cracks at historic highs, that ceiling is a lot higher than anyone thought. Clarksons Securities lays out the math:

"As capacity gets scarcer, the balance shifts from owners competing for cargoes to charterers competing for ships. This is why refining margins matter so much. Once the supply curve is close to vertical, the question increasingly becomes how much the marginal cargo can afford to pay."

Per Clarksons, every $10/bbl increase in crude freight lifts VLCC TCE by ~$400K/day. Citing Argus, it estimates the Singapore product slate sold for $151/bbl last week, implying a pre-freight refining margin of ~$40/bbl, against Oman-Asia VLCC freight of ~$21/bbl, meaning "there is still considerable margin left for VLCC owners to capture." If owners grabbed the entire margin, which Clarksons admits is "unlikely in practice", Oman-China VLCC rates would be almost double current levels, at $1.6 million a day.

BofA's numbers back that up. The bank's Asian refining margin has been holding at roughly $35-45/bbl since August, more than four times its 5-year average (for more details see BofA's latest "The Oil Gusher" note)....

... while its European refining margin is at ~$49/bbl, with diesel cracking ~$90/bbl over Brent. That makes sense to anyone who has followed our coverage of the record diesel crack and Goldman's "nightmare" refining crisis warning; as we put it over the weekend, the US doesn't have an oil problem, it has a refinery problem. Turns out, so does the tanker market, only in a good way (for owners).

Two more factors stretch the ceiling.

• First, energy security: state-controlled buyers may "temporarily overpay for freight to secure volumes now", particularly if they worry US protection of the shuttle tankers isn't guaranteed indefinitely.
• Second, the share of freight in the delivered cost of crude, which Poten's Broekhuizen estimates has gone from ~3% at the start of the year to 27% now. Unprecedented for crude, though Breakwave Advisors notes Atlantic-to-China freight was more than 40% of landed iron ore cost last week - and capesize rates are nowhere near record highs. In other words, by dry-bulk standards, there is still room to run.

The Catch: Rates Don't Need More Ships To Fall

Before anyone extrapolates $1.6 million, Clarksons offers a crucial caveat:

"The reverse is also important. Rates do not need more ships to become available before they fall. If refinery margins weaken, charterers' willingness to pay can fall sharply even while vessel availability remains tight."

And that is where BofA comes in with the counterpoint. Its European refining margin strip is already in "(slight) backwardation", with the 4Q26 strip below the 3Q26 average of more than $42/bbl, and the bank models refining margins dropping to $15/bbl by end-2027. BofA's US refining team (in its "Refining roundup", also available to pro subs) is equally skeptical that the market should be paying up for a permanently higher crack, reiterating its "hesitance to buy into a +$3/bbl LT midcycle crack valuation." If the crack goes, the ceiling on freight goes with it - and we've seen this movie before: in June, tanker rates nearly halved in days on Hormuz normalization hopes, right after earnings had soared to $470,000 a day.

Meanwhile, the war itself isn't getting any calmer: per Bloomberg, the US blockade has now bottled up at least 50 tankers carrying Iranian oil, while Tehran's parliament speaker says the Strait won't fully reopen until the US meets seven conditions. Which, for now, is bullish for freight - right up until the ceasefire headline that sends it the other way.

Bottom Line

Lloyd's List puts the commercial logic simply: the spot rate "can be whatever charterers are willing to pay," with the caveat that charterers will, as financial pain increases, belatedly expand period coverage and reduce spot exposure. Or as Clarksons put it, "the rapid increase in Middle East crude flows has put the squeeze on all tanker classes."

Our take: with refining margins at $40+/bbl and Gulf barrels needing two or three ships to get to market instead of one, there is still near-term upside, and the Atlantic cascade has further to run as VLCC owners hold out for suezmax-equivalent economics. But the more important number may not be a TCE at all: freight is now 27% of the delivered cost of a barrel, which makes this an inflation story as much as a shipping one (as Bloomberg's Javier Blas warned in "The Next Inflation Shock: $1 Million-a-Day Oil Tankers" two weeks ago).

And when the owners themselves start ringing the register - Trafigura's tanker arm Volare jumped in its Oslo debut on Monday "as a wave of shipping IPOs builds" - history suggests the people who know ships best are selling them to the people who know them least. Enjoy the $1.33 million a day while it lasts: in shipping (as in everything else) nothing cures record rates like record rates.

Much more in the full Goldman "Adaptation: Persian Gulf Exports Return to 2025 Level" note and BofA's "The Oil Gusher: 3Q26 Playbook Part I" and "Refining roundup" notes, all available to pro subs.

Tyler Durden Tue, 10/06/2026 - 14:40

The Education Cartel And The Blue State School Scam

Authored by Jonathan Turley via JonathanTurley.org,

Below is my column in the Hill on the education cartel and how it is destroying our K-12 school system. After decades of bloated budgets and failing scores, our school system is now less popular than Cuba and communism. It is a particularly telling comparison in Chicago where union members went to Venezuela to praise the worker's paradise of the Maduro regime while the school system dumped U.S. bonds in opposition to the American "regime." Generations of inner-city children are being left without a future due to the failure of our school system, which prioritizes its own survival over its students.

Here is the column:

"In the first place, God made idiots," Mark Twain once wrote in an 1879 travel book. "That was for practice. Then he made school boards."

It appears that most Americans now agree with him. New polling shows that K-12 education has now reached a record low in the number of people who are even "somewhat satisfied" with the state of education in the U.S.

What is most troubling is that the near-total contempt for our school system does not make a bit of difference. Families and students have become largely irrelevant to an education cartel, a self-sustaining, self-perpetuating political alliance of unions and politicians.

According to Gallup, only 32 percent of American adults say they are "completely" or "somewhat" satisfied with the quality of K-12 education. That is the lowest figure in Gallup's 27 years of asking the question. Public satisfaction with the school system has dropped almost 20 points since just 2024.

For many of us, neither the drop in public support is surprising. The collapse comes at a time when universities are reporting that college students are entering higher education without basic math and other skills.

We have also seen the dismal decline in standards at elite universities like Harvard, where faculty have been compelled to teach high school-level math classes to students.

In May, faculty in the University of California system (which eliminated standardized testing to achieve greater equity in admissions) reported an alarming lack of math knowledge among new students.

Most recently, a University of California, San Diego, faculty report found a nearly 30-fold increase since 2020 in incoming students whose math skills fell below a high-school level.

For many of us, neither the drop in skills nor public support is surprising. For generations, the public school system has failed students in major cities. Despite massive budget increases, actual test scores continue to fall or remain at subpar levels.

In a prior column, I was particularly moved by the frustration of a mother in Baltimore who complained that her son was in the top half of his class despite failing all but three of his classes. Her story led to my changing my view of school vouchers. Despite my long support for public schools, I believe vouchers may be the only way to wrest control away from the education cartel by introducing real competition based on academic performance.

Faced with low proficiency scores, teachers' unions and school administrators have continued to lower proficiency requirements. They are simply pushing students out the door without basic skills, robbing these kids of any chance to break out of cycles of poverty and unemployment. When confronted with their poor performance, school board members have declared meritocracy to be a form of "white supremacy." Gifted and talented programs are being eliminated in the name of so-called "equity."

In any other field, such generational failure would be unthinkable. No business or enterprise could sustain itself. However, that is the point. There is little competition in this system. Blue states have largely blocked voucher systems while protecting teachers from performance-based standards.

Actual students have become irrelevant to budgets. In Chicago, there are schools that remain open despite 80 percent vacancy rates. One school, Frederick Douglass Academy High School has only 27 students, or 2 percent of its building's capacity. The school system spends $55,000 for each student at Frederick Douglass Academy.

Overall, 35 percent of Chicago schools are half full or less. But that did not stop the schools from spending a couple million on transcendental meditation sessions or giving teachers and students days off to join May Day protests (with city-subsidized buses).

According to a recent study, in 2025, Chicago Teachers Union spent a record $4.2 million on politics and lobbying but less than 18 percent on representing teachers. This included massive contributions used to elect former teacher and union organizer Mayor Brandon Johnson, a former organizer for the union. Johnson, in turn, has effectively turned over his office to the far-left union.

In economics, there are few scourges older and more damaging than the cartel, which uses its power over an area to create "higher prices, lower quality, and stifled innovation." There is a natural tendency for people to form such groups to stifle competition and feather their own nests. Adam Smith warned that "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public."

The Education Cartel is becoming one of the greatest and most insidious forms of such anti-competitive conduct. Teacher unions have used hundreds of millions of dollars in campaign contributions to acquire unchallenged power in blue states where they can dictate ever-increasing salaries, pensions, and budgets. One estimate found that, since 2015, the nation's two largest teachers unions - the National Education Association and the American Federation of Teachers - spent $669 million on federal campaigns and another $336 million on state and local campaigns.

Figures such as Randi Weingarten with the American Federation of Teachers effectively made their unions piggy banks for the Democratic Party and appear at far-left rallies to support Democratic causes. In return, Democratic leaders give this cartel most everything that the demand, including barring competition in the form of public vouchers or tying budgets to improving the education of actual students.

It is a closed circuit. Democratic leaders increase school budgets and salaries and the unions then send back hundreds of millions to fund Democratic campaigns.

If you want to understand the priorities of the unions, just watch one of National Education Association head Becky Pringle's unhinged speeches. Her declarations that the union will "win all of the things" clearly did not include educational improvements for students.

A recent study found that blue states with strong teachers' unions overwhelmingly have worse student literacy scores than red states. At least eight of the ten states with the worst literacy scores were liberal districts with politically powerful teachers' unions, according to the Progressive Policy Institute.

For example, in New York, more than half of third- to fifth-grade students failed their reading proficiency exams this year. And it isn't about money: The state spends almost $37,000 per student to fund this bloated, poor-performing bureaucracy. But the unions also pump political contributions into the campaigns of Democratic leaders in every election, and nothing changes.

In the meantime, historically poor states like Mississippi and Arkansas, with relatively new voucher and performance-based systems, are showing major improvements in scores among their students. Yet when these same policies are proposed in blue states, they are routinely blocked by the powerful teachers' unions.

Many liberals instinctively support unions and schools despite their costs. Recently, former New York Times journalist (and now Howard University Journalism Professor) Nikole Hannah-Jones drew criticism over an exchange with her daughter when she discussed her disappointment that her daughter would not stay at a majority-black, inner-city school despite its poor conditions and resources. Her daughter finally insisted on going to a private school out of concern for her own future as opposed to what Jones called supporting "her life's work."

Most families do not have the resources of Jones to make that choice. They are captives to a system that appears entirely detached and unresponsive to their same concerns as Jones's daughter.

The mark of a cartel is that it controls competition while inflating profits or costs. However, the education cartel makes you long for the old oil or even drug cartels. The difference is that the education cartel actually charges cartel prices while producing diminishing products. It is like OPEC watering down the gas at the pump while pumping up the price. Everyone is getting windfall profits, from the unions to the politicians. Only the kids are being shortchanged by America's school system.

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

Tyler Durden Tue, 10/06/2026 - 14:20

Ugly 3Y Auction Stops Through At Highest Yield In 20 Years Despite Plunge In Foreign Demand, Record Directs

With bond traders still bruised from the catastrophic, "mega-tailing" 5Y auction two weeks ago, some were looking toward this week's restart of Treasury coupon auctions with trepidation, although after the brutal selloff in recent weeks, there probably was enough concession to avoid another disaster. And sure enough, after we got the results of of today's $58BN three-year auction, everyone can exhale because the auction was a bit better... even if the internals left actually far uglier than the lack of tail would suggest. 

Starting at the top, the auction stopped at a high yield of 4.932%, up sharply from 4.475% last month, and the highest since May 2006. More importantly, no more tails: the auction stopped through then When Issued 4.934% by 0.2bps, the 4th consecutive stop through in a row.

The bid to cover dropped to 2.616 from 2.722, below the 6-auction average.

The internals were uglier: Inidrect buyers slumped to 57.59%, down from 62.15% and the lowest since February. And with Directs awarded 31.66%, or just shy of the highest on record...

... Dealers were left holding 10.7%, a drop from last month's 10.9% and below the recent average of 12.6%.

Overall, this was an uglier auction than the lack of tail would make it out, and the plunge in Foreign buyers (Indirects) was only offset by a near-record Direct bid as not even rates trading at 24 year highs was sufficiently attractive for foreign buyers. 

 

Tyler Durden Tue, 10/06/2026 - 13:24

Asia's Gold Producers Start Hoarding Their Own Metal As Faith In The Dollar Erodes

For most of modern history, the gold trade worked one way: emerging-market mines dug it up, shipped it out (often as cheap ore, more often through the back door), and London and New York did the rest. But that arrangement is now quietly breaking down.

According to a must-read report in Nikkei Asia, countries across Asia are moving to capture more of the value from the gold boom by refining domestically, taxing exports and having their central banks buy local production. Nikkei calls it "a new form of resource nationalism", and one that "could exert upward pressure on gold prices over the medium to long term." The two reasons it gives will be very familiar to regular readers: waning confidence in the US dollar as the world's reserve currency, and the fact that dollar assets of countries at odds with Washington have been frozen under sanctions.

In other words, the world's gold producers have noticed the same thing the world's central banks noticed in 2022: gold is the one reserve asset nobody else can freeze, and they are sitting on top of it.

Below we walk through who is hoarding gold and how, why Goldman thinks central-bank (and now producer-country) demand is doing "nearly all" the work in its $5,400 gold forecast, and why - for now - none of that has been enough to beat a hiking Fed.

From Vientiane To Jakarta: Everyone Wants A Refinery Now

Start with Laos, which produced roughly 12 tons of mined gold in 2025 (the sixth-largest output in Asia, per the World Gold Council and Metals Focus) and estimates its reserves at 500-1,000 tons. Until now, most of that left the country as ore, "through both official and unofficial channels." In 2024 the government set up the Lao Bullion Bank, which aims to refine local gold at home, raise gold's share of the country's FX reserves, and give citizens a trusted place to store their savings. Laotian PM Sonexay Siphandone now calls gold development "a key priority in strengthening our economic foundation." The head of the Japan Bullion Market Association, who attended the launch event, described the speed of the build-out as "astonishing."

Indonesia, the world's 10th-largest producer at more than 100 tons a year, is going further: it announced last year an export tax of up to 15% on gold, effective 2026, because domestic supply can't keep up with local investment demand. Regular readers will recall that we flagged Jakarta's levy (Nov 17, 2025) when it was still in its "final stage," complete with a sliding scale that rises with the gold price. At roughly $4,150/oz, a 15% duty works out to about $620 an ounce, which is a very polite way of saying "please don't export this."

And then there is China, the world's largest producer at a little over 380 tons a year (about a tenth of global output), which is also a major importer. As market analyst Jeff Toshima told Nikkei, "As a rule, taking gold out of the country is restricted." More on Beijing below.

The trend isn't limited to Asia. Madagascar's central bank has been buying domestically produced gold since the early 2020s under a Gold Purchase Program that its gold operations supervisor calls "the cornerstone of this reserve diversification strategy." Ghana, the world's sixth-largest producer, signed an MoU with the WGC in July to curb illegal mining and make sure "the benefits of Ghana's gold resources are realized by our communities and our nation as a whole."

Translation: the cheap ore pipeline to Western refiners is narrowing, and the people who run those refiners know it. "From the perspective of major international refiners ... absolutely this trend will have an impact on their ability to source," Metals Focus MD Nikos Kavalis told Nikkei. Toshima also supplied the historical irony: "Gold from the colonies flowed into London and helped underpin the British Empire's gold standard." The colonies, it seems, would now like to keep the gold.

Rerouting gold away from the West to dodge sanctions isn't new either; we noted it in real time right after Russia's reserves were frozen:

*RUSSIAN GOLD PRODUCERS EXPLORE EXPORTS TO UAE, CHINA Similar to Turkey-Dubai-Iran gold triangle

— zerohedge (@zerohedge) April 1, 2022

The Sanctions Premium

The common thread is the one we have been pounding the table on since the spring of 2022: once the US and its allies froze Russia's FX reserves, every reserve manager in the non-aligned world learned that a dollar asset is only as safe as your relationship with Washington. ANZ's Geullim Yum put it diplomatically to Nikkei: as the dollar-centered system "comes under scrutiny, gold is gaining importance as an asset insulated from the political and fiscal policies of any single country."

The data back it up. As SocGen's cross-asset team noted in its "China is buying gold again. Are you?" note (available to pro subs, and which we discussed last month), the dollar's share of global FX reserves fell to 57% in 2025, down more than 5 points since 2022, while 62% of reserve managers in the 2026 central bank survey expect it to keep declining moderately over the next five years and 84% expect gold to make up a bigger share of their reserves.

SocGen's summary is about as blunt as sell-side prose gets: central banks, "China, among others," are "buying the dips while continuing to reduce US Treasury holdings at a steady pace, as the de-dollarisation theme continues unabated." China's chart says it all: PBOC gold reserves are up 20% since 2022 (and 122% since 2015) to 2,345 tonnes, while its Treasury holdings are down 41% since 2020.

China: Officially 20 Tonnes, Unofficially Much More

Officially, the PBOC added 20 tons in August, its 22nd consecutive month of net purchases, which Nikkei notes is the longest streak since comparable data began in December 1999. Unofficially, the number is much bigger, which is something we have been flagging since 2024 (and again here, Jun 13, 2025), well before the FT "confirmed" it (Nov 15, 2025):

China Buying Twice More Gold Than Officially Reported Amid Surge In Central Bank Purchases https://t.co/8nMRP2GMqK

— zerohedge (@zerohedge) September 15, 2026

Nothing has changed since. Goldman's central bank nowcast estimated 44 tonnes of official buying in July (Sep 14), with China accounting for 35 tonnes, roughly double what Beijing admits to. On a three-month seasonally adjusted basis, Goldman's Lina Thomas and Daan Struyven now see central banks buying ~91 tonnes per month, more than five times the pre-2022 average of 17 tonnes.

Then there's the private side, where the hoarding is even louder. Goldman's head of commodity market strats Adam Gillard pointed out last month that when Bloomberg discovered "record Chinese gold imports," it was hardly news: China's non-monetary imports were 997 tonnes in January through July, up 80% y/y, with another 142 tonnes in August. Even more interesting, he noted that the strength came largely from "higher flows into Beijing + Guangdong flows which has previously been associated with official sector buying." Put differently, some of that "non-monetary" gold may be quite monetary indeed.

Gillard's numbers also show who is holding up the market. Between March and July, China's imports more than doubled from the prior five months, offsetting a 228-tonne drop in Indian imports and a 253-tonne swing to ETF selling outside China, almost by itself (net change across the four: -29 tonnes).

JPMorgan's Market Intelligence desk picked up on the same thing (Sep 23), crediting gold's surprising resilience to the Fed's hawkish repricing to two forces: ETFs that have "net added tonnes every week since mid-July" (about 180 tonnes in total), and "strong Chinese buying – imports topped a record 1000 tonnes." Meanwhile, the buyer list keeps getting broader and less Western: SocGen's table of the top five central-bank buyers each year now reads Poland, China, Kazakhstan, Czech Republic and Chile.

Goldman: Central Banks Are Doing "Nearly All" The Heavy Lifting

This is where the Nikkei story ties into the bull case. In its latest Precious Analyst note, "Fed Hikes to Slow, Rather than Derail, the Gold Rally", Goldman kept its $5,400/toz end-2027 forecast despite the Fed's hike, and was explicit about what is driving it:

Continued central bank diversification remains the main structural driver of our constructive gold view, contributing nearly all of our expected 23% appreciation through end-2027. ... Reflecting this acceleration, we raise our central bank demand assumption to 60 tonnes/month on average through 2026-27, versus 50 tonnes/month in 2026 and 40 tonnes/month in 2027 previously. We continue to view reserve diversification following the 2022 freeze of Russian central bank assets as structural, and recent central bank conversations suggest the appetite for gold remains strong.

ETFs and speculators are barely a rounding error in Goldman's math; this is a central bank story, full stop.

And here is the problem for anyone hoping the producer-country trend is already priced in: Goldman's model counts reported and nowcast central-bank purchases, not tonnes that never leave Laos, Jakarta or Shandong in the first place. If producer countries keep a growing share of their own output, through domestic refining, export taxes or central-bank purchase programs like Madagascar's, that is supply removed from the international market, and the bank's "net upside risk" gets a little more upside.

The near-term path is slower, though: Goldman cut its year-end 2026 fair value to $4,650/toz from $4,900, still above spot.

There is also a wildcard: call-option positioning on GLD is still about three times historical averages, which Goldman reads as a sign that worries about "G10 fiscal sustainability" are keeping demand for gold as a "macro-policy hedge" alive. If that positioning holds while central banks keep buying, dealer hedging "could mechanically amplify the rally and drive gold prices well above our forecast." (With France now going full PIIGS on the bond market, we doubt those fiscal worries go away anytime soon.)

So Why Is Gold Down 12%?

Because structural doesn't mean imminent. Gold hit a record above $5,500 in January, nearly reached $4,700 in late August, and was $4,110 on Sept 28, down 12% from that late-summer peak. Nikkei puts the blame where it belongs: the Fed raised rates in September for the first time in more than three years, with at least one more hike expected before year-end. As Nikkei says, downward pressure is likely to persist "until the ultimate level of the policy rate becomes clear."

Goldman's desk agrees. On Sept 28, as gold fell 3% when China liquidated length on the Shanghai open, Gillard passed along a colleague's warning that front-end real rates are back near two-year highs: "when cash suddenly offers a very large positive real return, the opportunity cost becomes difficult to ignore." His assessment of China's physical bid was just as careful: "supports price on a sell-off but isn't enough to sustain a rally." This weekend's GS commodities desk note (Oct 4) said "rates are holding it back, but still long-term constructive," with "very low" short-term conviction on delta but "strong support at $4k/oz." GS Materials specialist James McGeoch summarized feedback from the road even more briefly: "Gold most interesting asymmetry, $4k floor, pick a ceiling."

For the bear case, BofA's technicians (Jul 16) warned that "gold's lost year may leave 2H26 vulnerable," pointing to a death cross, crowded positioning and similarities to the 1980 and 2011 tops, which they say put $3,315 in play "if 2026 proves to be a major top." Jefferies' mining team (Aug 4) likewise argued that gold has "recoupled" with real rates. Fair enough, but neither the 1980 nor the 2011 top came with 91 tonnes a month of central bank buying and producer countries locking up supply at the mine.

Bottom Line

Nikkei ends on what could be the thesis for the rest of this decade, quoting ANZ's Yum: "In the long run, the actions of producer countries could become another factor pushing gold prices higher."

We'd go further. For three years the gold story has been about the buyers: central banks diversifying away from a weaponized dollar. What Nikkei describes is the supply side catching on, as the countries that dig the metal up decide they would rather hold it than sell it for Treasuries they might not be allowed to keep. Combine 91 tonnes a month of official buying with mines that increasingly stay home, and the $4,000 floor everyone on the GS desk keeps citing looks more like a minimum than a hope.

In the near term, Warsh and the front end are in charge, and nobody should expect producer-country hoarding to beat a hiking Fed in any given week. Over a horizon of a few years, though, betting that the dollar's share of reserves recovers while Laos, Jakarta and Beijing go back to shipping out ore looks like the much harder trade. Then again, the West has bet against the colonies' gold before... it didn't go great. The next test comes Thursday, when China returns from Golden Week and shows whether the dip-buyers are still there. 

Much more in the full Goldman and SocGen notes, both available to pro subs.

Tyler Durden Tue, 10/06/2026 - 13:20

OpenAI Shops $30 Billion Round To UAE Funds, BlackRock As Altman's 'Bad Things' Remark Draws Bipartisan Fire

With its planned IPO on ice for the moment, OpenAI is pitching a $30 billion funding round to a group of United Arab Emirates sovereign funds led by Abu Dhabi's MGX, along with BlackRock, at a $1.4 trillion pre-money valuation, Bloomberg reported Monday. There is no lead investor, and the price was set by OpenAI rather than negotiated. Meanwhile CEO Sam Altman has sparked a firestorm in DC with comments that the world should accept "some bad things happening" for the benefits of AI.

The OpenAI round

The UAE funds are considering an investment up to $10 billion between them at that $1.4 trillion valuation - which is is 64% above the $852 billion post-money valuation of the $122 billion round in March. The figure would also place OpenAI's valuation above Anthropic, which was at $965 billion in May.

OpenAI's annualized revenue has reportedly passed $40 billion, up 70% since July. That makes the ask roughly 35x run-rate for a company that Fortune says booked $6.7 billion of revenue and an operating loss in Q2, and that the FT reported spent $34 billion last year. One FT source said OpenAI "needs capital." OpenAI says the March round left it with plenty. OpenAI filed confidentially for an IPO on June 8. Then, on Sept. 12, Altman told Fortune it wouldn't be 2026 - "an ill-advised moment to go public," given what's going on with safety (and then just recently said 'screw it' - AI is worth the danger). That said, in April the WSJ reported that OpenAI had missed revenue and user targets and that CFO Sarah Friar was worried the company might not be able to pay for future compute contracts if revenue failed to catch up.

Then there's the backstop. As we reported last November, Friar suggested the federal government could "backstop" OpenAI's data-center financing. In June, as we detailed, Altman began floating a plan to hand small OpenAI equity stakes to ordinary Americans, which we read as a backdoor backstop. We asked at the time whether the bailout would come before the IPO or after. Nobody mentioned the third option: a $30 billion bridge round, priced by the issuer, in between.

DeepSeek

Overnight, Bloomberg also reported that DeepSeek is close to locking in at least 80 billion yuan ($12 billion) of new funding, with signed term sheets that could take the total to 100 billion yuan - twice the 50 billion it originally set out to raise. Tencent and CATL are writing the biggest checks. This is the same round DeepSeek paused in late July, as we noted, after transcripts leaked of founder Liang Wenfeng saying that Huawei was giving DeepSeek about 16,000 Ascend 950s while the internet giants got hundreds of thousands, and that DeepSeek could get hold of some processors he called "noncompliant." The round restarted in August at a valuation of about $74 billion and has now blown through its target. On annualized revenue reported at $400-500 million in July, that valuation is well over 100x sales. OpenAI at 35x looks cheap next to it.

The 'bad things' backlash

Altman made the remark in an interview with Politico's Decoded newsletter published Sunday. "We believe that the world should accept some bad things happening for the benefits of this technology and people having the agency," he said, according to Forbes. He also said he expects "orders of magnitude more" positive outcomes than negative ones.

“We believe the world should accept some bad things happening for the benefits of this technology.” In a conversation for the first edition of Decoded, a new daily newsletter and podcast, OpenAI CEO Sam Altman talked with POLITICO’s @BrendanBordelon about trade-offs, AI safety, and how his company is different from Anthropic. Subscribe to Decoded for the full conversation with Sam Altman: https://t.co/YHJJsDOQVh

— POLITICO (@politico) October 4, 2026

Florida Gov. Ron DeSantis, a Republican, responded on social media: "And a handful of tech oligarchs get to make that decision for the rest of us? No dice." Illinois Gov. JB Pritzker, a Democrat, posted that Altman "shouldn't be making any decisions about what 'bad things' we have to accept on all of our behalf." Sen. Ruben Gallego, a Democrat from Arizona, wrote one word: "No."

Politico noted that much of the backlash assumed Altman was accepting existential harm to humanity, which he explicitly said he was not, or that he was trying to dodge responsibility for AI-caused damage, when he in fact called for policymakers to debate new AI liability regimes.

Alyssa Cass, a political consultant who has worked with New York AI-safety lawmaker Alex Bores, told Politico the equation is simple: "There is more safety talk from OpenAI because there are more safety incidents from OpenAI."

Those incidents keep piling up. In July, roughly 700 OpenAI agents got out of their sandbox during an internal cyber evaluation and spent July 9-13 inside Hugging Face's production systems trying to game their benchmark; Hugging Face later said it had to use an open-source Chinese model to defend itself. After another escape on Sept. 20, OpenAI paused training on its most capable models, and on Sept. 28 it cancelled GPT-6.1 Astra, its October flagship, after its head of safety said the model had regressed on deception. On Oct. 2, it said it had notified more than 100 organizations of "misaligned agent activity," and on Tuesday it apologized again at a hearing in Sydney for its agents' unauthorized access to Australian government websites.

Regulatory Capture The Flag

And so of course, Congress wants - no NEEDS - to control this technology. Democratic Sen. Richard Blumenthal went first, alone, with a Sept. 9 letter to Altman, and Republican Sen. Josh Hawley opened a Senate investigation the next day. Since Sept. 28, Florida AG James Uthmeier, who sued OpenAI in June, has moved for an injunction to stop it from building new models without third-party-approved safeguards, the nonprofit LASST has sued, and California AG Rob Bonta has served a subpoena.

Sen. Elizabeth Warren joined him for a Sept. 28 letter to Treasury Secretary Scott Bessent. It goes after the June executive order that created a classified "benchmarking" process for frontier models, run partly out of Treasury. Participation was made voluntary, reportedly after Meta's Mark Zuckerberg and allies intervened. It also cites Reuters reporting that administration officials promised the labs that open-weight models would be exempt from safety testing, and notes that open-weight models including DeepSeek V4 Pro are good at finding and exploiting vulnerabilities. "Voluntary measures and self-policing clearly are not working," the senators wrote. Answers are due Oct. 9 - this Friday.

The next day, Trump had the labs to lunch and came out, as we covered, with a morally, though not legally, binding accord. Semafor later reported that Zuckerberg was central to drafting it.

Hence today's letter, published by Semafor and addressed to Bessent and White House chief of staff Susie Wiles, among others. It asks for all meetings and correspondence between industry and the government before the June order and an actual description of the pre-deployment testing process the White House keeps saying exists. The senators want guardrails set by elected officials, not "a toothless framework shaped in secret by a handful of billionaires." Answers are due Oct. 19.

Will any of it get answered? Semafor's read is that the demands only get teeth if Democrats retake Congress. In the meantime, the sovereign funds being asked for $10 billion can read a Senate letter as well as anyone.

Tyler Durden Tue, 10/06/2026 - 13:00

Google Plugs Into Constellation's Nuclear Reactors As PJM's "Bring Your Own Power" Era Arrives

For most of 2026, the bear case on the US power producers could be summed up in one sentence: nobody is signing data center PPAs in PJM. Last week Amazon did. This morning Google did, too, and this one is five times bigger.

Google parent Alphabet has contracted for 3,590 megawatts of power from Constellation Energy (CEG) inside PJM, the largest US grid, the companies said on Tuesday, according to Reuters, confirming an overnight report from Bloomberg. Roughly a quarter of it, 890 MW, is new nuclear capacity squeezed out of 11 existing reactors under a 20-year PPA backed by more than $4.3 billion of Constellation investment, expected to start delivering in 2028. The rest is a long-term supply agreement for another 2,700 MW. And in case anyone missed why this is happening now, the companies said it outright: the deal is a response to PJM's "bring your own power" proposal.

Constellation shares jumped as much as 14% premarket (they were up 6.3% when Bloomberg first broke the story last night), trading above $300 for the first time in a month. 

Zerohedge readers know this story didn't start this morning. We have been tracking the AI-nuclear trade since Microsoft agreed to restart Three Mile Island in September 2024, when nuclear names surged across the board on what was then a shocking headline. (Five years earlier, we were writing about "America's Chernobyl" finally closing its doors. Funny how the AI capex cycle changes things.) Two years later, Constellation has become Big Tech's nuclear landlord.

Below we break down the deal, why PJM forced Google's hand, what Goldman's power desk and utilities team are saying, and why the cheapest nuclear megawatt is the one already built.

The Deal: 890 Nuclear Megawatts... Plus 2,700 More

The terms, per the companies' statement and the Reuters and Bloomberg reports:

• 890 MW of new nuclear capacity under a 20-year PPA, coming from upgrades at 11 Constellation units in Illinois, Pennsylvania and New Jersey. The first upgraded plant is expected to start delivering in 2028.
• $4.3 billion+ of new investment by Constellation in "new equipment and technology... increasing thermal and electric efficiency," as Goldman's industrials desk put it this morning.
• A separate long-term supply agreement for 2,700 MW in PJM that is "not tied to a specific generation source and serves as long-term revenue certainty for Constellation's operating plants," per Google.

Translation: the 890 MW is the headline-friendly "new clean firm power" part. The 2,700 MW is essentially Google locking in a long-dated price for a big chunk of Constellation's existing output. Who needs a hedging desk when you have a hyperscaler?

Stack it next to Constellation's other hyperscaler deals and Google's is bigger than Microsoft, Meta and Amazon put together (2,646 MW combined), at least once the non-unit-specific supply is counted:

It also comes less than a week after Amazon's 690 MW, 20-year PPA at Calvert Cliffs, which we covered on Thursday in "Amazon Secures 20 Years Of Nuclear Power From Constellation As Goldman Sees Industry-Wide Win". And Google is hardly new to the game: it is already funding the restart of NextEra's Duane Arnold reactor in Iowa (which just landed a $1.9BN DOE loan), and last month lined up new capacity from Southern Co. by paying for upgrades at two of its nuclear plants.

Here is a snapshot of Constellation's recent nuclear deals, updated for the just announced Google transaction, along with disclosed terms:

And a summary of the terms of both the Google deal and the recent agreements with Microsoft, Meta, Amazon and GSA. 

Why Now? "Bring Your Own Power" Is Coming To PJM

The key line in the Reuters story is the last one. PJM management has proposed that data centers connecting to its 13-state grid either bring their own power or accept being remotely cut off during peak demand. Goldman's Nelson Armbrust laid out the mechanics in his What Matters Today note this morning (available to pro subs):

"Today, when you build a data center, you need a permit but you don't need to secure energy – this is what will be ruled (hopefully) on October 12th. PJM's proposed Interim Resource Adequacy Service (IRAS) targets new large loads (≥ 50 MW) entering service after June 1, 2027. To avoid priority grid curtailment during emergencies, data centers must secure their own power under the "Bring Your Own New Capacity" (BYONC) framework."

In other words, Google just bought its ticket before FERC decides on the price of admission. Armbrust adds that excluding unbacked loads from capacity planning starting in the 2029/30 delivery year "aims to lower capacity prices and stabilize asset valuations."

Lower capacity prices would certainly be a change of pace. As we tweeted the night of July's auction, PJM is already out of power:

Today PJM failed to secure 7GW in energy to ensure system stability into 2028 (due to price caps, without which electricity prices would be 70% higher). PJM is already below the critical reliability threshold, and in 2027 is facing a catastrophic shortage of power and brownouts

— zerohedge (@zerohedge) July 15, 2026

Capacity prices have gone from $28.92/MW-day to the cap in two auctions, and the cap is the only thing that kept 2028/29 from clearing at $554.72:

PJM's emergency fix, a one-time "backstop" auction for new capacity, didn't go much better. As we detailed on Sunday in "'Deeply Flawed': Biggest US Grid Scraps Emergency Data Center Power Auction One Day After FERC Smackdown", FERC suspended the Reliability Backstop Procurement for five months. That's a power auction for data centers... delayed. Goldman utilities analyst Carly Davenport called it "net bearish but mixed" for the IPPs, and pointed straight at the bilateral route Google just took (available here for pro subs):

"...lack of clarity around the finalized framework could lengthen the regulatory overhang on the stocks and dampen data center customer appetite to sign long term PPAs, though continue to point to higher pricing and tight markets in PJM in the absence of line of sight to new capacity. We also believe given the bilateral process is preferred by many developers/customers, the ruling on the IRAS framework could be more consequential, which, if constructive could limit the need of the RBP."

A few days ago, Davenport also named Neutral-rated CEG and Buy-rated TLN as "most exposed given the PJM leverage." This morning that exposure worked in Constellation's favor.

As for who has been paying for PJM's shortfall so far: the ratepayers. Davenport's work shows every PJM state has seen bill inflation above the US average over the past three years, with PJM bills up more than 24%. That's roughly 10 points above the national average, and New Jersey alone is up 43.4% (chart source GS Power Up America webinar):

With the midterms four weeks away, nobody in Trenton, Annapolis or Harrisburg wants to explain the next leg higher. Hence "bring your own power."

Goldman: From A "Heartbeat" To A Pulse

For context on why the IPPs have been such a slog, here is Goldman's GSX desk summarizing last week's Power Up America webinar with Davenport, Joe Ritchie, Adam Bubes and Olivia Foster (available to pro subs):

"No large-scale data center PPA between a developer and an IPP has been announced since January. FERC is expected to rule on the PJM large-load framework on October 12... RBP (Reliability Backstop Procurement) filings in PJM should also move in the near term. Together with the midterms, these are the main gating items for PJM deal flow."

That "since January" drought ended twice in seven days. The webinar also noted that the group is down ~30% over the last 12 months, with CEG, NRG, TLN and VST trading on average at just over 7x EBITDA and a 12% free cash flow yield on 2027 estimates, "both at the discounted end of historical ranges," while the IPP basket trades near its Liberation Day lows:

After the Amazon deal, Goldman's power specialist Adam Wijaya said one investor question "stuck out": can this get the group working again? His answer was that the PPA gives "a sense of a 'heartbeat' for the group on go forward." To be sure, this second, much bigger, deal a week later starts to look like a pulse.

On the numbers, Davenport valued the Amazon deal using Constellation's own disclosure: a 1 GW nuclear PPA at a $20-$50/MWh premium to the PTC floor is worth $125M-$325M of FCF before growth. That implied $86M-$224M for Amazon's 690 MW, which she called "a solid update" but small at "~3% of its total nuclear fleet." Applying the same yardstick to Google's 890 MW gives roughly $110M-$290M (napkin math, before whatever the 2,700 MW supply deal is worth). Add Amazon and Constellation has signed up something like $200M-$510M of annual FCF upside in a week. Davenport is still Neutral with a $305 price target, which is suddenly right on top of where the stock is trading on Tuesday morning. We expect the next price target revision to point (much) higher. 

Putting it all in one place, here is what the two PPAs signed in the past seven days are worth to Constellation, using Goldman's own FCF yardstick alongside some illustrative revenue math. Not bad for what Bloomberg billed overnight as a mere "billion-dollar" deal: Constellation's investment alone is $4.3 billion, and the PPA revenue could top $1 billion a year once both deals are running.

And that's before a single dollar from the 2,700 MW supply agreement, which is three times the size of the nuclear PPA.

Goldman's desk was already leaning in before this morning's print. Armbrust called the US Power Up basket (GSENEPOW) a buy with "P/E is at 1y lows, RSI at 50 and price performance has been lackluster... I think its a buy."

The Cheapest Nuclear Megawatt Is The One You Already Own

The underappreciated part of the deal is how Google gets its new 890 MW: uprates, meaning squeezing more output from reactors that are already licensed, built and on the grid. No new site, no decade-long permitting, no first-of-a-kind cost overruns.

Some napkin math: $4.3 billion for 890 MW works out to roughly $4,800 per kW. That is more than a new gas plant (Goldman's Ritchie says a 400-500 MW CCGT now costs "roughly $400-500 million," or about $1,000/kW, if you can get turbines and an interconnection slot within 4.5 years). But it is a fraction of new large nuclear: the US-Korea package earmarks $120 billion for eight reactors (six AP1000s and two APR1400s), which works out to well over $10,000/kW. And unlike the gas plant, the uprate comes with 20 years of carbon-free, around-the-clock output and no fuel-price risk: even the heavily pro-Democrat labor unions are starting to like nuclear.

Lined up side by side, the math is hard to argue with. Gas is the cheapest per kW... if you can get the turbines and survive a four-and-a-half-year interconnection queue. Restarting a shuttered reactor, as Microsoft is doing at Three Mile Island, is the real bargain, but there are only so many mothballed reactors left to restart. Which leaves uprates: roughly a third of the cost of a new reactor, a decade sooner, and on sites that are already licensed and plugged into the grid:

Little wonder, then, that Google is paying Constellation to squeeze more out of what it already owns rather than wait for the AP1000s. It's also why the next round of hyperscaler deals will likely look a lot like this one.

That US-Korea deal is one of three nuclear headlines Armbrust counted in the past week, together with the $4 billion federal loan for Vistra to boost nuclear output, and now Google-Constellation. And yet positioning is going the other way:

"Positioning in in our Uranium basket (GSXURANI) is at the lows… time to reengage?"

Goldman's Brian Lee added that the Korea program "further tighten[s] the expected uranium supply balance in the 2030s." Uranium pros at the lows while governments and hyperscalers race to lock up reactors. That is one hell of a setup.

The demand side isn't easing either. GIR sees 108 GW of US data center power demand by 2030, up from 39 GW in 2025...

...which lifts total US power demand growth to a 3.5% CAGR, a number that would have been laughed out of any utility investor day five years ago:

Or, as Ritchie put it: "the demand environment right now honestly just couldn't be better."

Who Pays? (Hint: Not Just Google)

Google can afford it. Consensus expects hyperscaler capex to grow 116% year/year in Q3, and Goldman expects more than 50% growth in 2027, above the ~$1.1 trillion consensus. That's something we discussed earlier in "'The S&P 2': Micron And Nvidia Alone Will Deliver A Third Of Q3 Earnings Growth":

How that capex gets financed is a separate question, and increasingly a debt-funded one. But 20-year power contracts are the kind of off-balance sheet commitments that tend not to show up in the leverage ratios until someone goes looking for them.

Still, Google signing for its own capacity beats the alternative, which is 67 million PJM customers paying for it through capacity charges. This is the model we have been demanding for nearly a year: if hyperscalers want to plug a city's worth of load into the grid, they bring their own power.

Make "behind the meter" mandatory https://t.co/bCBnwx2E5g

— zerohedge (@zerohedge) December 24, 2025

Goldman has since come around, raising its behind-the-meter forecast to 67GW by 2030. Google's deal isn't behind the meter (the electrons still flow into PJM), but it is the next best thing: the data center pays for the new capacity, not the ratepayer. And in the long run, we still think the real answer is a small modular reactor sitting next to every data center campus.

Bottom Line

Goldman's Wijaya put it best after the Amazon deal: "we know how quickly the tide can turn on power." The tide just turned twice in a week, and the catalyst that matters most is still ahead: FERC's ruling on PJM's large-load framework on October 12. If IRAS is approved in anything like its current form, every hyperscaler building in PJM after mid-2027 will need to bring its own capacity or accept being curtailed first, and there are only so many existing reactors to sign.

Which is why we think the 3,590 MW is the floor, not the ceiling. Two hyperscalers have now signed with the largest US nuclear operator in seven days, while the IPPs still trade at ~7x EBITDA with uranium positioning at the lows. Either the market is right that politics and regulators will keep the group in the penalty box, or (far more likely) the rest of Big Tech is about to queue up for the same reactors. Then again, a regulator that has already punted the RBP once could punt again.

We'll check back after FERC rules next Monday.

More in the full Goldman "Constellation Energy announces a 20-year nuclear PPA for ~700 MW in PJM; positive for industry broadly" and "Americas Utilities: Power: FERC suspends the RBP process for five months; mixed for IPPs but IRAS still key" notes, both available to pro subs.

Tyler Durden Tue, 10/06/2026 - 12:25

Columbia's Satire Paper Declares "Land Acknowledgments" Are No Laughing Matter

Authored by Jonathan Turley via JonathanTurley.org,

Columbia University satire student paper The Federalist has long relished triggering viewers, particularly conservatives. When it mocked the murder of Charlie Kirk, it shrugged off objections that people need to get a sense of humor. However, the paper has now apologized for something beyond satire: land acknowledgments. The editors issued a cringing apology for a joke about land acknowledgments. It appears that, unlike political assassinations, land acknowledgment are simply not laughing matters. It pledged to focus on something called "punch-up humor" that picks only on "people and systems in positions of power."

The editors removed a column titled "I Lived It: Before We Had Sex, My Boyfriend Said a Land Acknowledgment." It posted a statement on its Instagram page that the article "upset many members of the Columbia community and handled a sensitive topic rashly and irresponsibly: the important recognition of the native land Columbia University and much of our country sit on."

We take full accountability for the weight of our harmful words, and we thank Columbia's Native American Council, as well as other members of the community, for bringing this to our attention. We deeply apologize for any harm this article caused, and we are taking this moment to refine our humor guidelines to ensure that our mission of satire does not hurt communities and voices that should uplifted.

In a moment like the one we are currently living in on a campus like ours, political satire is more important than ever, and we would like to reaffirm our commitment to uplifting marginalized voices in this endeavor.

It was a telling moment in higher education, with institutions fighting to coerce faculty members and students to engage in what critics call a woke, performative moment before meetings, classes, and events.

Recently, the University of Washington settled a case after burning a fortune on litigation over a professor's dissenting view of land acknowledgment.

We previously discussed the case of Professor Stuart Reges, who teaches at the computer science and engineering school of the University of Washington. He refused to post the school's "land acknowledgment" and instead posted an alternative statement. Professor Reges sued the university and various officials in 2022. Professor Reges has declared, "Land acknowledgments are performative acts of conformity that should be resisted, even if it lands you in court."

After the university encouraged faculty to add a prewritten "Indigenous land acknowledgment" statement to their syllabi, reading:

"The University of Washington acknowledges the Coast Salish peoples of this land, the land which touches the shared waters of all tribes and bands within the Suquamish, Tulalip and Muckleshoot nations."

Reges decided to write his own statement:

"I acknowledge that by the labor theory of property the Coast Salish people can claim historical ownership of almost none of the land currently occupied by the University of Washington."

The labor theory (which I teach) generally refers to John Locke's theory. In his Second Treatise, Locke laid the foundation for property as a divine gift of God that began in the state of nature, where all was created in common by God. Reges declared that these tribes, indigenous people, "can claim historical ownership of almost none of the land and that the claim of the university land was not sufficiently used or developed to bestow a claim upon the Coast Salish people. That acknowledged group is a broad collection of different groups with ethnic or linguistic associations."

In his lawsuit, Professor Reges detailed how, after he stated his own views, the university moved against him.

Reges noted that the university allowed other professors "to include modified statements in their syllabi that were more consistent with the University's recommended statement." The operative point is that "other faculty at the Allen School continue to include land acknowledgment statements in their syllabi that differ from the University's own statement, so long as they express a viewpoint consistent with the University's recommended version."

That ended up costing the public a massive amount of money in Washington, but none of the faculty or administrators responsible for this conflict incurred any penalties or costs. Indeed, they were heralded for their struggle in favor of land acknowledgments.

Given such efforts, it is clear that many in academia will not tolerate any jokes, let alone alternatives, to land acknowledgments. It is part of the ideological echo chamber of higher education. The joke, however, is on these forces of orthodoxy. Forcing public apologies with public acknowledgments only undermines efforts to get people to consider the history of Native peoples.

Many of us support discussion and recognition of the history of native peoples. We simply oppose mandatory land acknowledgments, including "voluntary" systems that bar alternatives or coerce participation. As for the cringing editors of The Federalist, they supplied the greatest satirical moment after claiming a mission to "doggedly pursue the truth in its most raw, exaggerated, hyperbolic, blatantly untrue form."

Some matters in higher education are simply beyond satire, and that is a truly pathetic acknowledgment.

Tyler Durden Tue, 10/06/2026 - 12:20

Debate Over Islam Divides A Texas County

Authored by Darlene McCormick Sanchez via The Epoch Times,

In Collin County, home to a growing Muslim population, residents of McKinney have been gathering signatures to recall the city council members and the mayor who approved a mosque site plan after a tense city council meeting in August.

A few miles south, on the 25th anniversary of 9/11, protesters gathered outside a Plano mosque, waving American flags and holding signs about Jesus and "Don't Mecca My Texas," as Muslims passed by on their way to prayer.

To the east in the rural part of the county, what's known as EPIC city, a 1,000-home Muslim development, anchored by a mosque, remains on hold. Texas Attorney General Ken Paxton sued to stop construction amid public concerns that the enclave would promote sharia, or Islamic law.

Muslims say their freedom to believe is a fundamental right protected by the Constitution and dismiss the opposition as political opportunism or plain bigotry. Those who oppose the mosque have concerns about Islam's political aspects, radical Islamic extremism, or the sense that Islam doesn't belong in a nation built on Christian values.

Perhaps nowhere in Texas has the argument over whether Islam is a religion or political ideology been so visible as in Collin County, part of the suburban sprawl north of Dallas. The rapid Muslim growth here has met robust local opposition at a time when some Republicans in Texas and on the national stage have made a campaign issue out of opposing Islam's political aspects.

Cowboy Country and Islam

Texas - land of cowboys, ranches, and barbecue - was home to 224 mosques in 2020, the third-largest number in the nation behind New York and California. Some estimates now put that Texas number closer to 300.

Collin County has seen a sharp rise in Muslim adherents, up from around 6,000 in 2000 to more than 37,000 in 2020, according to one religious survey.

But as more Muslims settle in the red state of Texas, strife over Islam as a political movement has grown and is increasingly reflected in election campaigns. Critics call it Islamophobia; others call the concerns justifiable.

A recent headline in The New York Times summed up the friction with a provocative article titled "Islamophobia's Rise in Texas."

The story outlined a terrorist threat at a new Islamic center in Houston, a Conroe woman who told Muslim shoppers at a grocery store they weren't welcome, and anti-Muslim sentiment over the mosque expansion in McKinney.

At the August McKinney City Council meeting, Ashley Marie Louden spoke out.

She vowed to launch a recall against elected officials who, she said, have repeatedly ignored the will of their constituents. Their unanimous vote to approve the new mosque site plan was the last straw.

"When the city council stops answering to the people, the people have a duty to act," Louden said during the city council meeting. "It's time to start organizing a recall on every member who has chosen cowardice and silence [over] accountability."

She told the Epoch Times her phone blew up after the city council approved a site plan for the mosque expansion in a busy area of town.

Louden said that characterizing resistance to a mosque expansion as mere Islamophobia dismisses valid public concerns.

Take, for example, Iran's Islamic caliphate chanting "Death to America" for almost 50 years. More recently, popular Muslim influencers such as Hasan Piker have proclaimed America "deserved 9/11."

"I think a lot of residents, and I just think as a nation, a lot of people are starting to see what radical Islam comes with, and they have every right to be concerned because it's not something that we should just welcome in the name of not being Islamophobic," Louden said.

Character-Defining Moments

At the same McKinney city-council meeting, others said the freedom to build a house of worship is about as American as it gets. The meeting lasted more than four hours and attracted more than 100 people who signed up to speak.

Samad Syed brought a copy of the Constitution with him to the podium.

"This Constitution of America represents the greatest promise: that every person stands equal before the law; that our rights do not depend on our faith, our background, our popularity," he said.

"Tonight, this council is not deciding what kind of building belongs in McKinney. You're deciding what kind of city McKinney will be remembered as. ... Every generation has moments that define character."

Others stood up in defense of their Muslim neighbors, saying they deserve to practice their religion just like anyone else in America.

"It's very disappointing to hear all the racism, Islamophobia, and hate," Kassey Stanfill said. "I have read the Quran and the Bible, and a lot of things said today were taken out of context."

Mehdi Elofir, who sits on the board of the McKinney Islamic Association, told city leaders at the meeting that his association has met every requirement needed to expand the mosque, including studies on traffic, drainage, and environmental impact.

"This project has not been rushed," he added, referring to the approximate 5.6-acre development consisting of a mosque, classroom building, and gym.

Religion or Political Ideology

But several spoke about their experiences living abroad under sharia, saying it's not compatible with America's Constitution and that that should give the council pause. Women are not treated as equals under sharia, and gays are not tolerated, they said.

Sandra Sammons said she grew up in a Muslim country. She said Westerners don't understand that mosques are more than religious centers; they're Islam's center of power.

Sharia operates under a different set of rules than Western Judeo-Christian values. "It dictates marriage, dietary laws, government, criminal and civil law, education - every area is governed by sharia law," she said. "In Islam, there is no separation of church and state."

Federal and state elected officials also took their turn at the podium, extending the debate beyond local residents.

Rep. Keith Self (R-Texas) pointed to the British grooming gangs scandal involving mostly Muslim men who raped and abused young girls. He said authorities turned a blind eye to alleged crimes over concerns they would be accused of being racist or Islamophobic.

"Fourteen hundred years of political Islam - you can't get away from it," said Self, co-founder of the Sharia-Free America Caucus.

State Rep. Keresa Richardson, a Republican serving parts of Collin County, asked the council to delay site plan approval until the conclusion of a Texas investigation into a sharia tribunal operating in Dallas. A member of the McKinney Islamic Association advised the tribunal, Richardson said.

The Dallas tribunal is accused of seeking "to replace actual courts of law and to evade neutral, generally applicable state and federal laws," according to Paxton, who announced the investigation in an April 6 news release.

The McKinney Islamic Association did not respond to a request for comment from The Epoch Times.

The three separate buildings proposed for Virginia Parkway will total more than 32,000 square feet and provide more than 200 parking spaces.

Some residents showed up to question potential parking and traffic problems that could cause further congestion in the area when combined with school schedules.

They blamed the city council and mayor for a lack of transparency and for ignoring their concerns dating back a decade to a proposal to expand the McKinney airport.

'A New Phenomenon'

The McKinney mosque wasn't the only place getting pushback in Collin County. Plano was caught up in the debate as well.

On the anniversary of 9/11, the Lone Star Legionaries staged a "Stand With Texas" rally in a grassy area next to the Plano mosque.

Police and security stood by as about 50 protesters held flags and banners in near triple-digit heat. A helicopter circled as counter-protesters lined the sidewalk leading to the mosque.

Dan Chandler, a Plano resident who attended the 9/11 protest, said Americans need only look to European countries such as the UK and Spain, which have seen large numbers of Muslim immigrants, to see their future.

"Islam is not a religion," he told The Epoch Times. "It's a ploy to take over the world and to take over Texas and America."

About 40 yards away, Muslims streaming into the mosque thanked supporters who staged a counter-protest.

Cars occasionally honked for both sides.

"Thanks a lot. I really appreciate all of you coming," one Muslim man told counter-protesters who were holding signs reading "Love Thy Neighbor," "Safe Spaces for All Faiths," and "Unite Don't Divide."

Muslims who spoke with The Epoch Times seemed to take the backlash in stride, blaming it on a lack of understanding and the political season leading up to the midterm elections.

Saif Islam of Plano stopped to talk about the protest. He said people were misinformed about his religion and believes the protests are being driven by people running for office, not by fear of sharia or extremism.

"There'll always be some crazy state of mind," Islam said of the protestors. "If they want to know more, they should come in and join. We have open forum every Saturday."

He said people have been given the wrong impression of his faith.

"I feel sorry [for] people of Jesus, who should be of love and compassion," Islam said. "At least they should try minimally and attempt to get to know who these people are, rather than protesting."

Saif Islam came from Bangladesh to America about 45 years ago. The Muslim community in the area has deep roots and friendships with Christians, Hindus, and others, he said.

"We share their parking lot," he said of a neighboring church. "They share our parking lot. I mean, unprecedented friendship we have, locally."

Akram Syed, president of the Islamic Association of Collin County, said the Plano mosque where the protest was held had been in the neighborhood for 25 years.

Syed called the protest unusual and chalked it up to the "political theater."

"This is a new phenomenon for us," he said, adding that politicians were looking for a "boogieman" to help them win elections.

Recalls and Lawsuits

Louden said the recall petition involves Mayor Bill Cox and three council members whose terms don't expire next year: Ernest Lynch, Geré Feltus, and Justin Beller.

The reason for the recall as stated on the petition was "a loss of public confidence in the ability of the officers named herein to faithfully represent the citizens of the City of McKinney."

Beller addressed the sometimes raucous crowd before the vote.

"I think [Muslims have] earned and deserve a little trust that they'll do right by you as their neighbors," he said.

Beller said politicians are "fear-mongering" that Muslims who have lived in the community for years will somehow become a threat if a new mosque is built.

None of those facing recall responded to an Epoch Times request for comment.

Council members have defended their decision, arguing the city would be sued if it denied the mosque expansion.

Resident Julie Simons said she was worried about traffic in the area during Muslim holy days such as Ramadan. She expressed frustration with a council that deemed itself "powerless."

"If you're powerless - you represent us - which means we're powerless," she said.

"This is our country's 250th birthday. We left England, where there was a king who determined our circumstances, our consequences, our destinies, and now it feels like we're here again. But the Muslims are king."

John Aselton, who helped organize the recall petition, said it stems from a loss of confidence in McKinney elected officials. The mosque vote was part of a broader pattern, he said.

"The main point of the recall is not that you should be afraid of your local government; they should be afraid of you," he told The Epoch Times.

Louden said the petition drive gathered about 7,600 signatures - more than the required 5,805.

The city secretary must certify the signatures. If the city council members don't step down, the council must order a recall election.

Tensions over the recall were apparent during a recent visit to Bonnie Wenk Park in Collin County, where several people stopped by to sign the petition.

One petition organizer, who declined to give his name, grew agitated when asked how many signatures had been gathered that day, fearing that revealing the numbers would embolden the opposition.

That's because the petition has faced pushback, leading to accusations of voter intimidation, with Collin County Citizens for Integrity filing a complaint with the U.S. Department of Justice.

A Muslim City

Controversy over mosques isn't new to Collin County.

Last year, the proposed EPIC City development outside of Josephine, a rural area about 15 miles southeast of McKinney, was heralded as the "epicenter of Islam in America." The development was named for the East Plano Islamic Center (EPIC).

In addition to a mosque, the EPIC development would include a K-12 faith-based school, sports facilities, a community college, senior housing, an outreach center, and businesses.

The battle over building the Muslim-centric neighborhood garnered national attention.

Numerous public officials and community members have worked to halt the development, citing concerns about sharia, assimilation, and potential ties to foreign Islamic groups.

Following backlash at the local, state, and federal levels, it changed its name to The Meadow.

Paxton announced a lawsuit in late 2025 against EPIC, as well as developer Community Capital Partners and others, alleging violations of Texas securities laws. The lawsuit also claimed that the housing development would be illegally reserved for Muslim residents.

Backers denounced the legal action as Islamophobic and are defending their right to build the community near Josephine. The development remains on hold.

As Goes Texas

Republicans campaigning in the Lone Star State are tapping into public unease over the rapid increase in the Muslim population and fear of Islamic law.

Texas Gov. Greg Abbott, who is running for reelection this fall, has made banning sharia a core pillar of his campaign, like other conservatives seeking office.

Abbott designated the Council on American-Islamic Relations (CAIR) - a Muslim civil rights and advocacy group that denied the accusation - and the Muslim Brotherhood as terrorist groups last year.

He promoted laws banning developments "from creating sharia compounds and defrauding and discriminating against Texans."

At the Republican midterm convention held in Dallas in September, Abbott leaned into the message against political Islam.

"We are not waiting on Washington, D.C. We will fully ban sharia law in Texas," he said.

Evidence suggests Washington is paying attention.

"Religious belief is inviolate. Conduct that functions as a political system is not," Self told a House Judiciary subcommittee in May.

"The Constitution guarantees equal rights, due process, and individual liberty, while sharia assigns legal distinctions among individuals and bases authority on religious mandates."

The Trump administration designated three international branches of the Muslim Brotherhood as terrorist organizations earlier this year - the first administration to do so.

During an August interview with conservative radio host Glenn Beck, President Donald Trump said the influence of sharia law in London and Paris has created "almost like a second way of life."

"I would absolutely prohibit the sharia law thing. It is happening in this country a little bit, and where we see it, we take it out," he said.

"We have one system."

Tyler Durden Tue, 10/06/2026 - 11:40

50 Iranian Tanker Logjam Unfolds As US Naval Blockade Starves Tehran Of Oil Revenue

Bloomberg cites a new report from United Against Nuclear Iran that claims the US naval blockade of the Strait of Hormuz has created a parking lot of more than 50 Iranian tankers that dare not cross the critical waterway.

The nonprofit think tank, which focuses on combating threats posed by Iran, said the number of laden tankers was broadly unchanged from two months earlier. The tankers were mostly carrying crude, along with some petroleum products and LNG.

UANI also noted that empty tankers were waiting at anchorages across the Indo-Pacific region rather than returning to Iranian ports, adding that at least 20 Iran-flagged ships were positioned off Sri Lanka and another was off Oman.

UANI's report comes days after Bloomberg said Iran's crude loadings fell to zero in September.

Over the weekend, Treasury Secretary Scott Bessent joined Mike Allen on "The Axios Show" and confirmed: "For the first time in history, they [Iran], since they started pumping oil, they will have no oil on the water this week. They will have no revenue."

Bessent on Iran: For the first time in history, since they started pumping oil, they will have no oil on the water this week. They will have no revenues. https://t.co/PIrHwUCG4q

— Clash Report (@clashreport) October 3, 2026

Separately, last week, Goldman analysts Yulia Zhestkova Grigsby, Alexandra Paulus, and Daan Struyven told clients that a "divergence between the fall of Iranian exports and the rise of exports of other Persian Gulf producers" was underway.

The Goldman energy experts estimated that "dark exports" have helped boost Persian Gulf oil exports to 23.3 million barrels a day late last month, back to prewar levels.

All indications so far point to the Trump administration's "Operation Economic Outcast" working as planned, with allied Gulf exports continuing to flow while Iran is starved of oil revenue amid the blockade. The question is whether this plan should've been implemented on day one of the conflict.

Tyler Durden Tue, 10/06/2026 - 11:20

AI Geniuses Are Decidedly Not Policy And Economic Geniuses

Authored by David McGarry via RealClearMarkets,

Geniuses are an odd species. To paraphrase Montesquieu, the exceptional are often also a bit loony. Cornelius Vanderbilt, a devotee of spiritualism, believed himself to have communicated with the spirit of George Washington. To improve his health, Henry Ford devoured weeds, and Thomas Alva Edison was averse to bathing. The point: geniuses are an odd species, who, for all the indispensability of their works to American prosperity and innovation, ought not be trusted credulously. Today in Washington, D.C., Congress must endeavor to protect artificial intelligence (AI) from the technologists most prominent in its creation.

Anthropic's Dario Amodei desires the U.S. government (an agent of compulsion) to dictate the "pace" of innovation, as the CEO wrote this month. "I have become convinced that fully addressing the risks requires even more prudence - not just investing in risk prevention, but pacing the rate of capabilities advancement so that risk prevention has time to keep up." Amodei warns of impending catastrophe should innovation continue at its current rate. Yet his company, the creator of what he supposes to be a tool of catastrophic potential, demands state-imposed fetters. Anthropic will institute some precautions, but not thoroughgoing "safety standards as well as limits on the rate of unchecked AI progress" - not until such standards and limits bind the entire industry. This means, in simpler terms, the kind of regulatory scheme Anthropic prefers - the kind that jars with the principles of antitrust law and would, as David Sacks notes, shelter the company's market share from the gales of competition.

The "prudence" of Amodei and the other pessimists is more rascally than genuine; it is an age-old propensity to see evil lurking in every major innovation and demand statism to manage it. The experience of the ages did not vindicate such assumptions when the printing press brought on a flood of "confusing and harmful" literature, when the typewriter displaced the human hand, or when the emergence of machines caused economist John Maynard Keynes, in the 1930s, to declare: "We are being afflicted with a new disease, technological unemployment."

In 2016, Geoffrey Hinton, the "Godfather of AI," predicted the demise of human radiologists, which field is, a decade on, employing human beings at record rates. Explaining his error, Hinton recently confessed that, a decade ago, he was ignorant of important facts. Unreformed, Hinton recently likened an episode in which an OpenAI agent, improperly set free from technical constraints, hacked Hugging Face to the nuclear reactor explosion at Chernobyl. He allowed Congress about a year to fend off disaster by regulating the technology.

The regulatory model favored by the pessimists is likely to subject free innovation to cartelization, free speech to state control, and the American system of property rights and free exchange to the will of bureaucratic juntas. As the Taxpayers Protection Alliance argued, even those pessimists who "consider themselves conservatives on technological questions...propose to embark upon a revolution in American government. To preserve the good life, they tell us, we must jettison the freedoms on which the pursuit of happiness depends. No vain denials of the scope of proposed state control can convincingly gainsay that contradiction."

The marriage of pessimism and statism has arrived on Capitol Hill, where many are in a mood to regulate AI - and to do so aggressively. Myriad bills have been introduced, and - among others, presumably - Senate Majority Leader John Thune (R-S.D.) and Sen. Amy Klobuchar (D-Minn.) are concocting what is likely to be a prominent addition to the collection. House Minority Leader Hakeem Jeffries (D-N.Y.) recently articulated the fearful position well, advocating "decisive congressional action immediately, in a manner consistent with what some of the leading AI voices in the country are now saying needs to happen."

All the while, President Donald Trump and many in Congress - including Speaker Mike Johnson (R-La.) - have resisted the paranoiacs. They remain confident in the American system: free innovation within the confines of traditional legal principles developed throughout the course of centuries to protect the rights of citizens from corporate excesses.

Doubtless, the captains of industry now building frontier AI models can accomplish innovative feats beyond the ken and capacities of all but a few Americans, let alone the median Washington, D.C., politician or bureaucrat. But their knowledge of politics and economics - of the ends of government and the means necessary to secure them - is not to be assumed. It is the office of the technologist to understand how to innovate, and that of the congressman to understand how to govern. The fretting and the myopias of the one should not rule the judgment of the other. A federal regulatory standard, enacted by Congress, is a sine qua non of sustained American innovation. But it must be built upon a foundation of practicality and not fanciful timidity, experience and not theory, and sound principles - the principles native to this land of liberty - and not statist reaction.

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

Tyler Durden Tue, 10/06/2026 - 11:00

Federal Survey Of 21,990 Kids Ties COVID Shots To Autism, ADHD

Authored by Steve Watson via Modernity.news,

A new analysis of the federal National Health Interview Survey finds children who received a COVID-19 shot had higher odds of autism, ADHD, anxiety, asthma and special-education use than children who did not.

The authors, including epidemiologist Nicolas Hulscher and cardiologist Peter McCullough, say the pattern survived a long list of statistical controls and rose with dose count.

Their conclusion is blunt: COVID-19 vaccination of children should cease immediately.

Neurodevelopmental Outcomes in COVID-19-Vaccinated Versus Unvaccinated U.S. Children: Analysis of the National Health Interview Survey, 2022-2024: https://t.co/slUVkwGFqf@McCulloughFund @P_McCulloughMD @NathanMeadPhD @Docjohnc

— Nicolas Hulscher, MPH (@NicHulscher) October 5, 2026

The paper, posted October 5 on the Zenodo repository, pools the 2022-2024 Sample Child files. It covers 21,990 children aged 0-17 with a recorded COVID vaccination status, and 19,882 aged 2-17 for the autism, ADHD and learning-disability items.

"Unvaccinated" in this comparison means no COVID-19 vaccine. It does not mean the child skipped the routine schedule.

Set against children who never received a COVID shot, COVID-vaccinated children had:

• 32 percent higher odds of current autism
• 26 percent higher odds of a lifetime autism diagnosis
• 33 percent higher odds of ADHD
• 23 percent higher odds of any neurodevelopmental diagnosis
• 19 percent higher odds of special-education use
• 24 percent higher odds of asthma
• 27 percent higher odds of daily or weekly anxiety
• 57 percent higher odds of mental-health medication
• 60 percent higher odds of mental-health therapy

The steepest autism estimate landed where parents were told the product was a routine precaution. Among children aged 5 to 7, three or more COVID shots were linked to 154 percent higher odds of current autism. Ages 2 to 7 with three or more doses sat at 137 percent higher odds.

The odds also climbed with the number of shots. Against children who received none, current-autism odds were 3 percent higher after one dose, 25 percent higher after two, and 40 percent higher after three or more.

Hulscher told The Gateway Pundit the association "persisted across numerous adjustment strategies, strengthened with increasing dose count, and reached its largest estimate in some of the youngest multiply vaccinated children."

He added: "This is a safety signal that must not be ignored. Endangering the developing brain is a red line. COVID-19 'vaccination' of children should cease immediately."

BREAKING STUDY: "COVID-19 'Vaccination' of Children Should Cease Immediately" https://t.co/PjpwHpxjnB

— The Gateway Pundit (@gatewaypundit) October 5, 2026

The authors say the autism signal held after accounting for age, sex, race, income, parental education, insurance, region, healthcare access, wellness visits, emergency-room use, hospitalization, prescription use and influenza vaccination.

It remained after a balancing method that wiped out measured differences between the groups, and after the analysis was limited to children without asthma, diabetes or fair or poor health.

Influenza and HPV shots were run as comparison exposures. Children who received a COVID shot but not a flu shot had 45 percent higher autism odds than children who received a flu shot but not a COVID shot.

They also state the limit their design cannot escape. The survey is cross-sectional. It cannot put the shot before the diagnosis in calendar time, and it cannot test the full routine childhood schedule.

A linked birth-cohort study is what they say should come next. That is a real constraint. It is not a reason the CDC, FDA or the manufacturers spent four years refusing to run the comparison on their own books.

CDC surveillance now puts autism at 1 in 31 American 8-year-olds. For boys the figure is 1 in 20, and in California, which has the tighter data, about 1 in 12.5 boys. Two years before those numbers landed, the national rate was 1 in 36.

Health Secretary Robert F. Kennedy Jr. put the denial in plain language in April 2025. "It's clear that the rates are real. Year by year there is a steady, relentless increase," he said. "This is a preventable disease. We know it's an environmental exposure. It has to be. Genes do not cause epidemics."

He described children who "were fully functional and regressed because of some environmental exposure into autism when they're two years old."

By September 2025 the department had stopped treating the question as forbidden. NIH's Autism Data Science Initiative set aside more than $50 million for 13 projects on environmental, medical and perinatal influences, and named medications and vaccinations as exposures under study.

Kennedy said the department was "closely examining" vaccines, and noted that "some 40 to 70% of mothers who have children with autism believe that their child was injured by a vaccine." President Trump's line at the same moment was shorter: "They pump so much stuff into those beautiful little babies, it's a disgrace."

The McCullough Foundation review released last October assembled 107 studies tying vaccination to autism, other neurodevelopmental disorders or brain injury, and described a clinical sequence running from multiple shots to fever, seizures, encephalitis, brain injury, regression and an autism diagnosis. Autism prevalence, that review argued, jumped on the order of 32,000 percent as the U.S. schedule swelled toward 72 doses.

Vaccines are not the only exposure officials spent years waving off. Internal Johnson & Johnson documents reported in September 2025 show the company's U.S. epidemiology director, Rachel Weinstein, writing in 2018 that "the weight of the evidence is starting to feel heavy to me" on prenatal Tylenol and neurodevelopmental disorders. A consumer-safety lead had already called the literature "a safety signal that needs to be evaluated" in 2008. Kenvue, the spun-off maker, still says there is no causal link.

Trump moved on the wider schedule in August. An executive order cut routine childhood recommendations to 11 core shots, ended the blanket push for hepatitis B, COVID-19 and influenza in healthy children, and told the Justice Department to challenge states that block religious or medical exemptions.

"In many cases, we were requiring 72 jabs for our beautiful, healthy, lovely, delicate little children," Trump said. Kennedy's assignment was to find the environmental exposure. "Genes don't cause epidemics."

The new survey analysis lands while the COVID product itself is still being sold into a thinner and thinner justification. Pediatric trials were never powered for autism, ADHD or special-education placement.

The Zenodo authors note that vaccine-derived spike has been reported in blood, monocytes, cerebral arteries and peripheral tissue months to years later, and that prenatal spike exposure produced autism-like behavior and neuroinflammation in male rats. That is their biological rationale. It is not a settled mechanism. It is also not nothing.

Around it sits a year of findings the agencies have not answered. FDA lot-release testing of Moderna's Spikevax recovered only 70 to 80 percent of a known endotoxin spike, with lipid nanoparticles capable of hiding most of an incorporated bacterial toxin from the assay.

A 35-year-old man who took three Pfizer shots, two from "E" batches, developed a heart tumor found 170 days after the first dose that doubled every 10 days and, once removed, contained fragments of Pfizer spike DNA.

Hulscher called that case "literally the smoking gun of turbo cancers."

A Nobel laureate warned Anthony Fauci in February 2021 that shot contents were reaching the placenta and the fetus and provoking an immune response in the amniotic fluid. Fauci told the public there were no red flags.

Myocarditis signals out of Israel were in hand by January 2021 and still described as mild months later.

On August 27 the FDA cleared Moderna's 2026-2027 formulas 81 days before the human study of those formulas was even scheduled to start.

And remember...

Congress is not done trying to close the exit. A Senate bill now in circulation would make it far harder for a parent or a state to decline a federal vaccine recommendation once the recommendation exists.

The survey paper is not a randomized trial, and its authors say so. What they also say is that no factor they could measure explains the autism gap, that the gap climbs with doses, and that it is largest in the children shot earliest.

Parents were told this product had been studied for the outcomes that wreck a childhood. It had not.

The federal file they were told not to worry about now shows the association in black and white. Stopping the shots in children is the minimum a government owes the families still being offered them.

Tyler Durden Tue, 10/06/2026 - 10:20