At The Money: Diversifying with Managed Futures ETFs (February 25, 2026)

Lots of asset classes promise uncorrelated returns, but few deliver diversification. One that does is managed futures. Sure, they are expensive and spikey, but when all correlations go to 1 – meaning everything is trading in lockstep, as we saw during the GFC and Covid – they seem to be the rare diversifier that works.

Full transcript below.

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About this week’s guest:

Andrew Beer is a hedge fund veteran and founder of Dynamic Beta Investments, a firm focused on hedge-fund replication strategies delivered through low-cost, liquid vehicles like ETFs and mutual funds. His ETF, DBi Managed Futures Strategy (DBMF) attempts to replicate pricier managed futures portfolios

For more info, see:

Firm website

Masters in Business

LinkedIn

Twitter

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Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

 

 

Transcript

Barry Ritholtz: As we learned in 2022, sometimes all supposedly uncorrelated asset classes moved together. Stocks went down, bonds went down, tips went down, commodities went down, Bitcoin went down. Very few things, buck the trend. One version of that is a variety of alternative investments that are designed to not correlate to one during periods of stress. Let’s talk to Andrew Beer. He’s a hedge fund veteran and founder of Dynamic Beta Investments, or DBI that focus on hedge fund replication strategies delivered through low cost liquid vehicles like ETFs and mutual funds, liquid alts, managed futures, a variety of strategies that are specifically designed to not trade like stocks and bonds. So, so Andrew, let, let’s start with the basic question. Stocks and bonds seems to have become a whole lot more correlated in recent years. How should that change how we think about correlation in the need for diversifiers?

Andrew Beer: Sure. Well, it, it, it is, it is the question of the 2020s from a wealth management perspective. So I used to call bonds the superman of diversifiers in the two thousands and, and 2000 tens in that they had terrific risk adjusted returns. If you, they almost never went down. The maximum draw down was 4%, and they tended to go up or do better when, but when, when equities were doing less. Well, the, the problem this decade is that, and this is, people have shown this over a long period of time since that was unusual. In fact, if you go back over long periods of time, particularly when inflation gets above about 2%, stocks and bonds tend to move together. So astonishingly bonds have earned less than cash over the past 10 years. And now, and the correlations have been creep creeping up. That tears up the basic playbook of a 60 40 model portfolio because, and so, so what, what people are doing is thinking about what can we put into a portfolio?

And really, really the goal is to diversify equity risk because remember, I mean, Warren Buffett had that great quote and they said, if you didn’t have Berkshire Hathaway, what would you do with your money? And he said, I put 95% into the S and P have 105% in cash. That’s great if you’re him and you can weather a 40% or 50% drawdown and, and breathe a whatever and, and, you know, carry it for the next, for the rebound. But most investors don’t have that kind of risk tolerance, and they need things that are gonna help to protect them during, during difficult market environments.

Barry Ritholtz: So how do we avoid these specific diversification failures that we see in typical portfolios? How do each of your funds map to a different hole in, in that diversification process?

Andrew Beer: So, on on, on our side, you know what we’ve tended to look at our strategies that, that are durable and have worked for long periods of time, and then try to find out ways to make them work in mutual funds or ETFs or in, in Europe, we do it in uses funds, but I’ve also been an enormous critic of the, this, this broad industry that is built up around what are called liquid alternative products. Now remember, I come from a legitimate hedge fund background, and when I’ve, but I’ve been writing about this category of supposed diversifiers for 15 years, and it’s a catastrophe that these strategies on average have correlations of often around 0.8 to equities, and they’ve delivered two to 3% per annum over a period of time when 15 years, when equities have gone up by 14 or 15% a year. That I think is the, is, is, is is the most critical issue, is that 95% of things that people will pitch you are, are, are supposed to work, just don’t and don’t add value. And so we have tried to address that and say, no, there actually are things that work. But you’ve gotta take a somewhat different approach in terms of how you think about it.

Barry Ritholtz: So when, whenever I speak to either portfolio managers or anybody else who’s, who’s working on an allocation, they wanna know about draw, draw downs and volatility and sharp ratios, what do these various diversifiers do to kind of wonky metrics like those, the—

Andrew Beer: Strategy that we’ve, we’ve described having the most diversification bang for the buck is a strategy called manage futures. And it’s, it’s the core of what we do. And we, we came at it again, we came at it from your side of the table as we were looking for something that would help our portfolios. And then there’s a second part of it. How do we make it work? Well, because there’s this great book that was written was called, Where Are the Customer’s Yachts? Talk about how Wall Street took all this money. The, the, the asset management industry tries desperately to take as much money as they can from any kind of product. And the more complicated they make it, the easier it is for ’em to charge exorbitant fees. But what, what, what the strategy is very, very unusual and has no correlation to stocks and bonds over a long period of time and, and tends to do best in the most difficult market environments. But it’s not a high sharp ratio strategy. There are certain hedge funds that have sharp ratios of two, which if, you know, if you under, it’s almost magical from an investment perspective, this is not that. But what was compelling about it is I can make it work and do better than the actual hedge funds, but in liquid accessible vehicles like ETFs.

Barry Ritholtz: Huh. So when I think of things like managed futures or derivative based long short leverage strategies, my first thought is what’s the risk that this is gonna blow up? I don’t tend to think of this as di certain ways. These are expressed as diversifiers. How, how do you reconcile that? How do you do things differently than some of these other blowup risk funds? We’ve, we’ve seen, and every year we read about one of ’em, you know, blowing up.

Andrew Beer: Many features is a strategy’s interesting. And the blowup risk is very, very low for the following reasons. So blowups usually happen because you’ve borrowed money and somebody wants it back at the wrong time and you have something you can’t sell to fulfill it. Right? That’s Lehman Brothers, that’s Bear Stearns. That’s, that’s, you know, that’s, that’s the long legacy of true blowups or, or, or it’s, it’s fraud and mispricing of assets. There was a mutual fund called Infinity Q that kind of just made up its numbers. The what managed futures funds. And, and again, it’s a terrible term managed futures, but futures contracts are some of the deepest, most liquid contracts that you can possibly trade. And so when things, these guys will go through periods where they have drawdowns, but they don’t hold onto the positions with a white knuckle grip and, and they, they scale out of positions.

Like even everyone was long gold and silver last week, they will have cut gold and silver. And so if gold and silver go down another 50% from here, they will have reduced their risk. So when you look at the overall strategy over a 25 year period of time, the maximum drawdown is only 16%. And whereas inequities, you’ve had a 40% and a 50% and several 20% plus drawdowns over that period of time, bonds have also had a 16% drawdown. So it’s, there’s a perception that it’s very, very risky with high blow up risk. That is in simply because as you say, it sounds like, and it is a leveraged long short der base black box,

Barry Ritholtz: But they’re called managed for a reason. Right? Yeah. So, so let’s talk about the tendency for some of these, especially on the private side, these various strategies to kind of quietly drift back towards equity beta over time. Like sometimes we see someone’s identified a particular strategy that is both non-correlated, diversified and, and generating real alpha, but tends not to have persistency. How do you avoid this kind of problem? What, what someone else has called fake diversification?

Andrew Beer: Well, I, I think the, the, the structure of the traditional asset management business from a return source perspective is deeply, deeply flawed. That again, you are talking about an industry that has destroyed value for decades net of the fees that they’ve charged because low cost index products have done better, right? The product development and sales across the industry is equally flawed. And that product in, in the hedge fund industry, when a credible hedge fund launches a product, they think there’s a great investment opportunity and they’re gonna bring in their, their capital clients and they’re gonna, and they’re gonna try to capitalize on that opportunity. In the traditional asset management space, it’s designed by the equivalent of the car salesman on the, on the showroom floor who thinks he can sell it to you. And all he cares about is getting that commission up front. So it, it’s, there’s a structural reason why hundreds and hundreds of products have been offered, which, which, which have failed any measure of diversification and also funds.

Ben Johnson at Morningstar has a great expression called the spaghetti cannon, and he said, these guys will launch six funds and they will come in and one of the six will be doing well, and that’s all they’ll talk to you about, right? So it, it’s, it’s, so the odds are really stacked against the average. And, you know, unless you’re somebody like me who digs in and wants to see every fund that’s out there and tear it apart, it’s, it’s, it’s extremely difficult to see through this marketing haze and fuzz. So, back to the point about things that were look great until they look horrible, I think that is a, that is a marketing success, but an investment catastrophe.

Barry Ritholtz: So, so let’s talk a little bit about the spaghetti canon. You’ve built a variety of replication strategies. How do you avoid simply layering on new sources of hidden risk under the banner of diversification? Just throwing stuff up against the wall to see what sticks isn’t a good strategy other than, hey, we know what we can market. How, how do you find diversification but not add risk?

Andrew Beer: So, so, so in our case, we’ve only, we only have two strategies because the other eight or 10 that we’ve looked at don’t work. If you, if I come in and describe to you what we built and why we built it, and now again, ours is a, is a relatively unusual business in that we’re basically saying in two hedge fund strategies, we like what hedge funds do, but we can beat them by copying them cheaply and we can do it in a liquid fashion that’s, that’s called hedge fund replication. We know, we figure out their big trades, we figure out where, where, where their conviction is. But instead of paying them a lot of money to implement the trades, often in very complicated ways, we can synthesize it and do it, do it efficiently. I’ve only launched strategies where I’ve been 80% confident I could beat hedge funds at their own game in that.

Barry Ritholtz: So, so let’s talk about some of those strategies, because when you, I think when a lot of people hear the I name hedge fund replication, they think, oh, hedge funds are buying a lot of Nvidia. So Andrew’s buying a lot of Nvidia. We’re not talking about imitating their positions, we’re talking about applying their strategies aside from managed futures, tell us about the other strategies, get that, get layered into DBI’s exchange traded funds.

Andrew Beer: So, so there’s, there’s only the one other strategy. So we, we replicate the managed future space and we synthesize their portfolios into a simple portfolio. And, and it turns out it’s just much more efficient. It does better over time. We also replicate what I would call the broad hedge fund industry, which will include the kind of funds you read about equity, long, short, relative value, event driven. But in that, we’re not trying to figure out who owns Nvidia. And we’ve looked at that, it doesn’t, it’s not a terribly useful exercise. Goldman actually has a, has a business doing that. Rather, what we’re trying to pick up on, are there big themes? So are they migrating their equity exposure from US equities to non-US equities? Is it going from developed markets to emerging markets? Is it, do they have hedges in place on the view that, you know, inflation may or may not come back.

So our whole business is based upon the idea that, that if you can identify the big trades, the most important trades, that’s really what’s gonna be the big driver of performance. And, and everybody’s read about the subprime crisis and what happened there. Just like, what don’t people say about the subprime crisis? Oh, that guy got it right, but shorted the wrong bonds. No, you shorted any bonds, you did well, right? If you were a hedge fund that moved into tech stocks over the past 15 years, you’ve done well, it hasn’t mattered which tech stocks you own that. And by the way, this only works in very limited circumstances. So back to your first point is the thing you don’t wanna do is you don’t want to do stupid things, which is to launch products because you hope they’re gonna work, or if they happen to work, your investors won’t figure it out until they’ve given you a lot of money. That’s not how we roll.

Barry Ritholtz: Huh. Really, really interesting. I’ve read a line of yours that I really like. Diversification is a protection against bad luck. Unpack what that means specifically in context of things like economic shocks or policy mistakes. We’re, we’re in an era of tariffs and trading by tweets as well as inflation surprises.

Andrew Beer: So, so the standard playbook from an asset allocation perspective is today to diversify and assume, just take it, it as a given that there won’t be any really catastrophic things that happen. You know, one of the great advantages that hedge funds as an asset class that drew me to the asset class as is, is, is they’re not, they’re not tied to a benchmark. They’re not tied to decisions that they made year before it. This is people with very, very smart, talented people with their own money who are trying to find ways to make money in good and bad environments. You know? And so, so bad luck is the return of inflation. You know, it’s something that affects your portfolio across the board that wasn’t part of your playbook. And the thing I find incredible about last year was that nothing broke, right? I mean, we have, we have, the system is being tested at every level.

Yeah, right? There are derelicts who are lighting matches and throwing them on the carpets and, and, and the drapes have not caught fire. Right? That we had an attack on the, you know, we had the deep seek scare, we had liberation day, we had frontal assault on, on the independence of the Fed. We’ve had various geopolitical skirmishes, you’ve had pockets of bond market tantrums around the world. And yet if you had gone to bed on December 31st, 2024 and woken up a year later, you think, great. Everything worked. So, so I, I think the world is changing, right? And I think what you’re seeing, what you’re seeing in gold and silver, it’s not normal, right? These, you don’t get these major asset classes melting up 80% in a year, going up another 20%, dropping 10%, you know, silver dropping 30% in a day. The, the, the, you know, I hear from international investors that, that their fear of something policy wide happening in the US is causing them to look at international markets in a way, even though the business environment in the US is still the best in the world, the companies are still the best in the world, but it’s not prudent anymore to be massively overweight the US.

So I think, I think we’re gonna be in for years of big change, and I think that that’s gonna be really challenging for the standard playbook of, of, of, you know, let’s just stick to our guns with our current positions and, and, and hope things work. It worked wonderfully in a year, like last year. I think we’re gonna go through some tough periods though.

Barry Ritholtz: Hmm. Interesting. So, so last question. ETFs tend to be used by advisors and, and other portfolio constructors who often have to explain what’s going on to their clients. And a big challenge is, a big struggle is dealing with client behavior. I think of selling diversifiers, like house insurance. You, you don’t complain if your house doesn’t burn down, but when I see things like managed futures and other diversifiers, I just know how clients think after a few years without a disaster, someone’s gonna say, Hey, these don’t work, I wanna sell this. How do you actually work with advisors? So the clients who thought they wanted a diversifier don’t get impatient when the house hasn’t burnt down.

Andrew Beer: So for, for one is, is is in our strategies, but reducing fees and making it more efficient, you do better during the other, during, during all those periods you’re talking about, right? So our largest ETF was up 14% last year. No, we weren’t up as much as the S and P of a hundred, but we’re pretty close. And that’s a year where nothing terrible happened other than, you know, we had a lot of, a lot of scary shocks. But, but I think, and, and, and I’ve, I’ve, I’ve loved the past six years of really getting to know people in the wealth management space, in that I think the way people often pitch these things to clients is wrong. That I think they, they go in, I think a lot of allocators, they fall in love with these funds. They go in and they want to tell people, I found, you know, Lionel Messi, I found LeBron James, I found this person because look, look at how they’ve done over the past five years.

They’re unbelievable. And I think that is a terrible way to introduce these products to a, a, a a, an end client. ’Cause then they’re focused on it all the time and they want to know why they’re not scoring every game. And, and rather what we have tried to do is basically say, look, we know this strategy is useful, but we’re the boring way of getting exposure to it. We’re just like that in no one, no one. And people generally don’t panic because GD is down 5% in a day. It’s just part of your asset allocation. And so I think the, the advisor world needs a will, will be more successful when they frame these allocations not on a standalone basis based upon star power. And it’s okay to pay them 200 basis points a year because they’re never gonna be wrong. We know they’re gonna be wrong and we know things aren’t gonna work. So if you frame it in terms of this is just simply incrementally that fills a gap in terms of how we manage your money. And it’s priced at a very, very attractive price point. No one’s getting rich while we’re waiting for this to happen. And five years from now, seven years from now, 10 years from now, just like when we started to put you into high yield bonds or non-US equities or these other asset classes that made your portfolio more robust, this is just one incremental addition to it.

Barry Ritholtz: So, so to wrap up, for investors looking to diversify, to, to avoid the tendency for all asset classes to move in lockstep, they should consider low cost ETFs that try and replicate what big expensive hedge funds do. But in a liquid inexpensive version, DBI has not only managed futures, but liquid alts that try and do this, they’ve put together a really impressive track record over the past five years. Just keep in mind that you don’t wanna back up the truck and own 20, 30% of it. It’s supposed to be an insurance product. Andrew suggests 3%. I, I don’t disagree with that. I’m Barry Ritholtz. You’ve been listening to Bloomberg’s At the Money.

 

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The post At the Money: Diversifying with Managed Futures ETFs appeared first on The Big Picture.

The post The Washington Post Says We Should Stop Paying Interest on Government Bonds Because It All Goes to the Rich appeared first on CEPR.

One Battle After Another

By Michael Every of Rabobank

One Battle After Another

US and Iranian negotiators meet in Geneva today to hear Tehran’s final offer but reports of what they have to say suggests we should prepare for the worst even if Iran sees a “good outlook” for today’s talks. The Kan news agency claims it will only agree to lower uranium enrichment from 60% to 3.67% for seven years, won’t hand over previously enriched material, dismantle the ballistic missile program President Trump just stated can already hit Europe and will soon be able to reach the US, and won’t stop its support for regional terror proxies.

US negotiator Witkoff, seen by critics as a soft touch, says a nuclear deal should last indefinitely while the above is a rehash of the JCPOA Trump spent years deriding (and whose backers often fail to note coincided with Iran processing uranium far beyond the agreed limits in secret underground bunkers). Indeed, VP Vance claimed there’s evidence Iran is trying to rebuild its nuclear program, which provides a US casus belli. It’s already imposed new sanctions on it.

In terms of the framing, Politico claims White House officials believe “the politics are a lot better” if Israel strikes Iran first, which would allow the admin to sell a defensive action in support of an ally. That’s unlikely to be an obstacle to action as soon as Indian PM Modi, who yesterday addressed the Knesset to stand firmly behind Israel “at this moment and beyond”, is wheels up to home later today. Also note the US Navy fleet in Bahrain has taken to sea to avoid a potential Pearl Harbor scenario, and another 12 F-22s are about to leave the UK heading east, joining 11 already there. Pay additional attention to Iran’s threat to escalate if attacked, breaking precedent not to do so regionally beyond Israel and/or token efforts: this is not the same playbook as the past.

This week also saw reported concerns an attack could involve US casualties and deplete munition stockpiles needed against contingencies in Asia. It would be a shocking error if either thought wasn’t front of mind before military pressure began: that points to underlying confidence in what the US has in store, and Iran doesn’t, or a gamble. Yet at this point the US cannot retreat without losing crucial global deterrence power: Iran is a military minnow compared to the States and any stand down would see supplies of Chinese weapons to Tehran step up so a repeat US exercise in years to come would be far more risky and/or unlikely.

In short, the US may be hoping to flip Iran into its camp via regime change. That would be a stunning geopolitical coup. Yet things could go wrong on multiple fronts, which could prove the coup de grace for much of what Trump is trying to achieve on them all.

One other thing needs to be underlined: US success would entrench Trumpism and demolish planned global alternatives; yet failure would do nothing to return ‘rules-based order’ or a benign free-trade backdrop for under-armed and over-dependent ‘middle powers’. It would instead open a Pandora’s Box of instability and volatility across geographies and sectors. As just one example, the IMEC (India-Middle East-Europe Economic Corridor) Modi fulsomely backed in Israel --which will initially involve Cyprus, Greece, and likely Italy, Bulgaria, and Romania-- can hardly thrive with a destabilised or antagonised Iran at its centre. There’s a lot more for markets to think about than oil and gas, important and volatile as they are (as the Saudis boost oil output and exports for an Iran attack contingency, and Iran has ramped up oil tanker loadings for the same reason).

US-Ukraine discussions will also continue in Geneva today: it’s unclear if we will see any breakthrough there either given Russia also needs to sign off – and again note talks are happening in Europe, without Europe. Markets don’t seem to be focusing on that dynamic vs the so-called ‘Sell US’ trend, but in the long run it matters. Also note Hungary’s Orbán has deployed troops to guard energy sites over an alleged Ukraine threat to them.

It's hardly quiet elsewhere: Cuba sunk a US vessel that had strayed into its waters, killing four Americans; Afghanistan threatened Pakistan and accused the latter of supporting ISIS; and UK PM Starmer’s controversial Chagos deal descended into chaos, with a minister telling MPs the process has been paused, then No 10 and the Foreign Office saying it’s still proceeding.

In geoeconomics, the USTR underlined that the US aims to keep China tariffs steady in a 35-50% range ahead of the Xi-Trump meeting, while the universal tariff will be hiked from 10% to 15% “where appropriate.” The USTR also underlined the US wants a deal with Canada where it imposes some sectoral tariffs --as Canada long has on the US-- and Ottawa agrees to prevent transshipment from China and Vietnam, etc.; that’s as the Chinese press suggest threatening Canada with a USMCA exit may push it into Beijing’s arms “as a hedge.” Which would then threaten North American geopolitics/economics being dragged through a hedge backwards. Chancellor Merz called for rebalancing Germany’s “unhealthy” trade ties with China. ‘How?’ is the question, as some note that many of the German CEOs travelling with him are still keen on shifting their domestic manufacturing to China and exporting it home from there.

Crucially, Zimbabwe imposed a ban on all exports of all raw minerals and lithium concentrate, as it wants crucial midstream processing to be done domestically to help it move up the value-added ladder in our new resource-centric global great game. Who will respond to that faster – China or the US? (Europe is not yet being mentioned in the mix.) Unrelated, the CME had to halt trading on its flagship metals market for more than an hour again yesterday due to “technical” issues. That does speak to how what we once thought was the global architecture is rapidly breaking down.

In AI space, the Pentagon reportedly took its first step toward blacklisting Anthropic; China’s DeepSeek is to withhold its latest AI model from US chipmakers including Nvidia, an interesting reversal; Canada told OpenAI to boost safety measures or be forced to by the government; and further upstream, France and Sweden are pushing to kill the mechanism to pay for massive EU grid upgrades needed to run AI at scale, among other things.

In the background, higher defence spending helped lift global debt to a record $348 trillion in 2025, according to the IIF --what could go wrong there on either defence or debt?-- as the IMF urged Trump to change course on economic policy and stop cutting government jobs. Do these two agencies talk much? And against that backdrop, the Australian financial press today reports: ‘‘Astounding’: No affordable houses for first home buyers in any city’. Let’s just say some of us aren’t astounded by it at all.

Let’s finish with some related Fed-speak. Outgoing Atlanta Fed President Bostic yesterday published his farewell essay, in which he noted, “…the legal and rhetorical battles raging around the central bank right now have caused people across a wide cross-section of our population to begin to doubt the Fed’s independence. This is a major concern…. I won’t be part of the Fed when we see resolutions of these battles. I will be watching closely and hoping that wisdom grounded in the profound success of the US economy over many years prevails.”

Indeed, may wisdom --and good luck-- prevail on multiple fronts. I fear we are going to need it.

Tyler Durden Thu, 02/26/2026 - 10:20

World Economic Forum Boss Borge Brende Quits As Epstein Fallout Deepens

The Jeffrey Epstein fallout continues to spread across the corporate and political worlds, with new headlines daily. Bill Gates told foundation staff earlier this week, "I did nothing illicit." Goldman Sachs' top lawyer, Kathy Ruemmler, stepped down last week over her ties, and former Prince Andrew was arrested on suspicion of misconduct related to sending Epstein trade documents.

Now, the World Economic Forum chief executive, Børge Brende, is stepping down following an investigation by the organization into his connections with the convicted sex offender.

WEF released a statement on its website announcing that Brende has decided to step down, and that Alois Zwinggi will serve as Interim President and CEO.

"After careful consideration, I have decided to step down as President and CEO of the World Economic Forum," Brende wrote in a statement.

He said, "I am grateful for the incredible collaboration with my colleagues, partners, and constituents, and I believe now is the right moment for the Forum to continue its important work without distractions."

The WEF launched a probe into Brende earlier this month, or at least publicly announced one, over his connections to Epstein, including attending at least three "business dinners" and exchanging emails and text messages with the sex offender.

Brende and Epstein communicated over email between 2018 and 2019 about meeting at the sex offender's New York mansion for dinner.

And this. 

WEF CEO Borge Brende plotting with Jeffrey Epstein to position WEF as the global governance structure

It should be called “Epstein’s Great Reset” henceforth pic.twitter.com/kDwjuRhgU0

— Jesse Matchey (@JesseMatchey) February 5, 2026

In April 2018, Brende wrote, "Missing you, Sir. Borge."

In a previous statement, Brende said he was "completely unaware of Epstein's past and criminal activities."

Perhaps Brende's assistant should have run a background check on Epstein, or at the very least, a very simple Google search. Epstein was first arrested by Palm Beach, Florida, authorities in 2006. In 2008, he pleaded guilty to two prostitution-related charges, one involving a victim under 18. He was arrested again in 2019 on federal sex-trafficking charges.

This is yet more negative press for the WEF cult, which has a unified vision in which people own nothing, eat bugs, and are told to be happy about it. That left-wing globalist agenda is fundamentally at odds with an America First worldview. Perhaps the Trump administration should host its own rival gathering next year - an "American Economic Forum."

Tyler Durden Thu, 02/26/2026 - 10:00

Biden's FBI Secretly Obtained Kash Patel And Susie Wiles' Phone Records, But NYT Says It's Cool

When Special Counsel Jack Smith was investigating Donald Trump and people in his orbit, he ended up surveilling then-private-citizen Kash Patel, and Trump Chief of Staff Susie Wiles during 2022 and 2003.

Patel, now head of the FBI, told Reuters on Wednesday that he found out about this, and the FBI buried the files in a "Prohibited" category deep within the bureau's computer system so they would be extremely difficult to find.

Getting down to it - the subpoenas targeted metadata showing who called whom and when - called 'toll records,' as well as a recorded a call between Susie Wiles and her lawyer - which her lawyer knew about and didn't tell her, according to Fox News. Technically, under federal law, the government can obtain toll records with just a subpoena and no warrant. Investigators insist they routinely pull toll records from prominent figures to establish timelines and verify involvement. Smith himself testified to Congress that records seized from Republican senators during the January 6 probe helped confirm the timeline of events, that no content was captured, and that his office followed all legal requirements. 

Hours after Kash told Reuters his side of the story, insiders on team blue ran to the NY Times to let them know that Patel has sacked 'about 10 FBI employees, some veteran agents' as part of a "rolling revenge" tour on members of Smith's team. 

The boys jumped into action:

The firings are part of a rolling barrage of retribution aimed at those who worked on the two federal prosecutions of Mr. Trump after his first term in office. They came hours after Kash Patel, the F.B.I. director, told Reuters that as part of the documents inquiry, the bureau had subpoenaed phone metadata for himself and Susie Wiles, currently the White House chief of staff. -NYT

To summarize:  

Team Trump: The Biden FBI surveilled Kash and Susie, then tried to hide it. 

Team NYT leakers: That was perfectly normal, Kash is drunk on power and getting revenge. 

And of course, the NYT assures us: 

Requests for phone records are common in complex criminal investigations to establish timelines and provide proof of communication. It remains unclear if the F.B.I.’s Trump-appointed leaders have accused employees of wrongdoing. In the past, they have not. In some cases, firings have violated procedural safeguards created to protect agents from politically motivated dismissal, according to agents and their lawyers.

But, wait a sec - the Reuters story had the 'prohibited' category aspect front and center...

And yet, NYT:

Which is odd, because the 'prohibited' designation made them deliberately difficult to locate and effectively shielded them from oversight. He says he discovered the records only after taking over as FBI director and has since eliminated the bureau's ability to classify files that way. 

The seizure of the phone records was essentially covered up, which is not something you tend to do if it was all above board.

"It is outrageous and deeply alarming that the previous FBI leadership secretly subpoenaed my own phone records - along with those of now White House Chief of Staff Susie Wiles — using flimsy pretexts and burying the entire process in prohibited case files designed to evade all oversight," Patel said.

Smith’s spokesperson declined to comment on Wednesday about Patel's specific allegations. Neither Joe Biden, former Attorney General Merrick Garland, nor former FBI Director Christopher Wray offered any comment for the story.

Nevertheless, the timeline raises its own questions.

Patel was called before a grand jury in 2022 after receiving limited immunity, during which he told prosecutors that Trump had declassified the documents taken to Mar-a-Lago. Wiles, for her part, became a close Trump adviser after his 2021 departure from office and eventually co-managed his 2024 presidential campaign. The record collection stretched into that campaign period.

Reuters could not independently establish what records the FBI obtained or who approved the subpoenas. The news agency also couldn’t ascertain if Patel or Wiles themselves were under investigation and, if so, why. Both were close to Trump during this period, as he built toward and ultimately launched his campaign to reclaim the presidency in 2024.

Both Patel and Wiles were known to have been interviewed by investigators as part of Smith’s investigation into Trump’s retention of classified documents following his first term.

In 2023, the FBI recorded a phone call between Wiles and her attorney, according to two FBI officials. Wiles' attorney was aware that the call was being recorded, and consented to it, but Susie Wiles was not.

Smith was appointed special counsel in November 2022 to lead two federal probes: one into Trump's handling of classified documents at Mar-a-Lago, and another into alleged efforts to “overturn” the 2020 election. He charged Trump with felonies in 2023 on both fronts. A federal judge dismissed the case involving the documents. Smith dropped the election interference appeal after Trump won the November 2024 election.

This latest bombshell comes in the wake of another stunning disclosure: internal FBI emails from around the time of the August 2022 raid on Mar-a-Lago, which appear to directly contradict the Biden administration’s insistence that then-President Joe Biden had no prior knowledge of the search of President Donald Trump’s home. The records also revealed just how hard the Justice Department leaned into the push for a search of Trump’s Mar-a-Lago estate—despite concerns within the FBI about whether the evidence actually justified such an aggressive move.

Patel says he doesn't know why investigators wanted his and Wiles' records. That's notable for someone who now sits atop the FBI. The bureau collected phone metadata on two of Trump's closest allies — one of whom would go on to run his presidential campaign — and filed it away where it couldn't easily be found.

Fox News reports that at least 10 FBI employees were fired on Wednesday in connection with this latest disclosure. 

Tyler Durden Thu, 02/26/2026 - 09:25

Hindenburg Alarm: Another Rotation Or Worse?

Via RealInvestmentAdvice.com,

In early November, we sounded the alarm about a recent Hindenburg Omen. Per the Commentary’s summary:

Bottom line: market breadth is horrendous and will likely lead to a rotation favoring out-of-favor sectors and stocks.

Thus, it’s not surprising that the Hindenburg Omen was triggered. If we continue to see more of these Omens, the threat of a drawdown grows.

At the time, Mega-Cap stocks were grossly outperforming the market, while many sectors lagged the market.

Since that Hindenburg Alarm, our expectations have come to fruition. We have, in fact, seen a “rotation favoring out-of-favor sectors and stocks.”

The graphic below, courtesy of SimpleVisor, shows the significant change in fortunes between sectors.

The first column shows each sector’s excess returns (vs. the S&P 500) since the Hindenburg Omen on October 29th.

The second column shows the excess returns over the 50-day period preceding the alarm.

The Hindenburg Omen has sent 6 alarms over the last month.

The last batch of Hindenburg alarms signaled drawdowns in the leaders and strong performance in the laggards.

Is this Hindenburg Alarm signaling a rotation back to large-cap growth?

Or might it be more ominous for the entire market?

The last time this technical indicator triggered six times in a month was preceding the Pandemic crash of 2020.

Tyler Durden Thu, 02/26/2026 - 09:05

Futures Flat Despite Blowout Nvidia Earnings

US equity futures managed to erase overnight losses and were trading flat after Nvidia and Salesforce failed to assuage fears about an overheated AI economy while traders awaited color from today's round of US / Iran talks. As of 8:00am S&P futures were unchanged and nasdaq futures were down 0.1%, with NVDA up 1% premarket but well off overnight highs after its earnings report and guidance smashed expectations while CEO Jensen Huang talked about “exponentially” growing computing demand and “skyrocketing” adoption of AI agents. It wasn’t enough, especially as software companies Salesforce and Snowflake both provided lukewarm sales guidance to an already-nervous market. “Aside from fireworks, champagne and dancing robots, we are not quite sure what more Nvidia could have done on the 4Q call to get the market re-excited,” said Jim Fontanelli, co-founder of Arete Research. Discretionary, Financials, and Industrials are outperforming with notable weakness in Energy and Materials. In premarket trading, Mag7 names were mostly weaker ex-NVDA though, as JPM says, bulls should not panic as we await Long Only demand once the market opens. AI-related plays are higher pre-mkt. Bond yields are flat, the USD is flat; in commodities lithium prices surged after Zimbabwe, one of the world’s top producers, suspended concentrate exports. Brent crude edged lower as nuclear talks take place between the US and Iran while silver stalled as it reached nearly $90/oz. Today’s macro data focus is on jobless claims, KC Fed, and several Fed speakers. 

In premarket trading Nvidia Corp. (NVDA) rises 1.3% after its latest sales forecast drew a muted response from investors. Other Magnificent Seven stocks are mixed (Amazon -0.1%, Apple -0.04%, Microsoft -0.06%, Alphabet -0.06%, Tesla -0.6%, Meta -0.6%)

• Array (ARRY) drops 22% after the renewable energy company’s 2026 adjusted Ebitda guidance missed the average analyst estimate.
• C3.ai (AI) slumps 25% after the AI company cut its revenue guidance for the full year, missing the average analyst estimate.
• Celsius Holdings (CELH) rises 12% after posting sales which more than doubled from a year earlier following its acquisition of Alani Nu, allaying concerns that a change in distribution channels would disrupt sales.
• FTAI Aviation (FTAI) falls 4% after the aerospace company reported total revenue for the fourth quarter that missed the average analyst estimate.
• GoodRx Holdings (GDRX) falls 15% after the health-care platform forecast revenue for 2026 that fell short of Wall Street’s expectations. It also gave an estimate for the lower bound of 2026 Ebitda that would be below expectations. Multiple analysts said they were surprised by the scale of margin deterioration implied by the profit outlook.
• IonQ (IONQ) rises 13% after the quantum computing company reported fourth-quarter results that beat expectations.
• Janus Henderson Group (JHG) climbs 6% after Victory Capital offered to acquire the company for $57.04 per share.
• Krispy Kreme Inc. (DNUT) climbs 15% as the company expects leverage to decline further this year as it advances its turnaround plan following the end of its US partnership with McDonald’s Corp.
• Nubank (NU) slips 2% after the lender reported higher costs and provisions that analysts say offset net income increase in the fourth quarter.
• Nutanix (NTNX) rises 18% after Advanced Micro Devices said it will buy $150 million in the software company’s stock as part of a new partnership. The news was seen as overshadowing a reduced full-year forecast.
• Papa John’s (PZZA) falls 5% after the pizza chain reported weaker-than-expected sales results, which reflect a “weak consumer backdrop and elevated promotional environment.”
• PROCEPT BioRobotics (PRCT) sinks 24% after the medical equipment maker forecast revenue for 2026 that fell short of Wall Street’s expectations. The firm also posted results for the fourth quarter that Leerink Partners called a “painful miss.”
• Salesforce Inc. (CRM) falls 3% after the company gave a lukewarm outlook for sales growth in the new fiscal year, fueling investors’ worries that the software giant will lose out to new competitors in the age of AI.
• Synopsys (SNPS) falls 3% after the electronic design automation software company’s Design IP revenue came in below expectations. The company also forecast weaker-than-expected free cash flow for the full-year.
• Trade Desk (TTD) declines 14% after the advertising technology company gave a first-quarter forecast that was weaker than expected. The report is adding to concerns about competition from Amazon and AI-related disruption.

In corporate news, Apollo and BNP Paribas are said to be nearing a deal to partner up in Europe’s private credit market. Apple is in discussions with key Indian banks and global card networks in preparation to start Apple Pay in the world’s most populous country. American Airlines will invest $1 billion in a concourse expansion at Miami International Airport to bolster its position at its top international gateway.

Despite Nvidia's estimate-busting guidance, and CEO Jensen Huang talking about “exponentially” growing computing demand and “skyrocketing” adoption of AI agents, it wasn’t enough, especially as software companies Salesforce and Snowflake both provided lukewarm sales guidance to an already-nervous market. Yet there is one group of winners: memory chipmakers Samsung and SK Hynix jumped in Asian trading. A huge jump in supply-related commitments by Nvidia “likely reflects a deliberate effort by Nvidia to tie up valuable components,” according to Vital Knowledge analyst Adam Crisafulli. 

Nvidia’s shares “not doing much was quite instructive, especially within the context of one of the other companies that reported — Salesforce,” said Gary Paulin, chief investment strategist at Northern Trust Asset Management. “The concern is that the more success Nvidia has, the more concern there is in the market that there is more disruption.”

For Mohit Kumar, chief strategist for Europe at Jefferies, markets are being “too sanguine” about risks of a limited strike by the US on Iran and an increase in short-term tensions. While a long-drawn war is unlikely, the issue could weigh on markets over the coming days.

“We have reduced our risk profile into the weekend,” Kumar wrote. “Our medium-term view remains bullish and we would be looking to add at better levels.”

Private credit continues to be rattled by the software selloff, with Marathon AM Chairman Bruce Richards saying the asset class is way too exposed to the sector, though he sees little risk of contagion to the wider market. The Fed’s Bowman, meanwhile, said banks need “flexibility” to compete with non-bank financial institutions, which continue to increase their share of the total lending market.

In tariffs, the US vowed to maintain high duties on China hours after Beijing warned against any future hikes. Canadian PM Mark Carney’s visit to India this week will cement a diplomatic reset and unlock a wave of new trade opportunities, including in nuclear power, oil and critical minerals, India’s top diplomat to Canada said.

In earnings, out of the 453 S&P 500 companies that have reported so far in the earnings season, 74% have managed to beat analyst forecasts, while 21% have missed. Royal Bank of Canada, Vistra and Warner Bros. Discovery are among companies expected to report results before the market open. Bloomberg Intelligence expect to see continuing wealth growth and sustained profitability in capital markets at RBC, offsetting muted personal and commercial loan growth. Earnings from Dell, Intuit and Monster Beverage follow later.

In Europe, the Stoxx 600 inches higher and is on course for a record close. Financial services stocks outperform while miners and construction shares lag. Here are the biggest movers Thursday

• Rolls-Royce shares rise as much as 8.4%, hitting a record high, after the UK-based engine maker said it was planning a major share buyback and raised its mid-term earnings targets
• Engie shares rose as much as 7.6% after it agreed to buy the UK’s largest power-distribution network for £10.5 billion ($14.2 billion) from Hong Kong billionaire Victor Li’s CK Group
• Indra shares soar as much as 20%, to its highest intraday level on record, after the Spanish defense company’s fourth-quarter results “beat across the board,” according to Morgan Stanley
• Howden Joinery shares surge as much as 11%, the most since July, on what Panmure Liberum analysts call “impressive” full-year results by the kitchen seller that beat the average analyst estimate for profit
• Puma gains as much as 9.1% after the German sporting goods and apparel retailer posted results that showed early signs of a long-awaited recovery, particularly driven by a strong performance in its Asian market
• Syensqo fell by a record after the chemicals maker reported fourth-quarter earnings that missed estimates with an outlook for this year that points to more struggles
• Hikma Pharmaceuticals sinks as much as 18%, the most since February 2016, after the drugmaker’s 2026 core operating profit guidance came in below expectations
• Freenet drops as much as 12%, most since May, after its fourth-quarter results missed expectations. Citi said this can be attributed to impact from a single mobile network operator agreement in which the firm fell short of a gross profit commitment
• Scout24 drops as much as 7.8% amid disappointment over a lack of earnings upgrades as fears of AI-driven displacement continue to weigh

Asian stocks extended gains to a fourth-straight day as South Korean chipmakers extended their rally, offsetting investor caution in the wake of Nvidia’s results. The MSCI Asia Pacific Index climbed as much as 1.1%, on course to close at another record, with Samsung and SK Hynix among the biggest boosts. South Korea’s Kospi index jumped as much as 3.8% closing at an all-time high, buoyed by the chip heavyweights. Japan’s Topix and Australia’s S&P/ASX 200 also climbed, while benchmarks fell in Hong Kong and Singapore. Nvidia’s results and outlook failed to impress investors amid concerns about an overheated AI economy, and some analysts also flagged concerns over competition. While the Korean memory makers gained, most Asian chip-related stocks slipped. Beyond tech, Asian markets largely shrugged off a US threat to raise global tariffs to 15% “where appropriate” in the coming days. The region’s stocks have been resilient this year, with the key MSCI APAC index up about 15%, far outpacing global peers.

Emerging-market stocks continued their outperformance, with MSCI’s gauge of EM equities up 15% in dollar terms this year. Rallies in memory chipmakers such as Samsung Electronics Co. and SK Hynix Inc. fueled gains on Thursday, pushing South Korea’s Kospi index up more than 50% in dollar terms so far in 2026.

A report from Citigroup Inc. found that money managers had added to long positions in emerging markets across Asia, Latin America, as well as Europe, the Middle East and Africa. They also favor emerging currencies against the dollar.

In FX, the yen is the best-performing G-10 currency, rising 0.2% against the greenback after some hawkish BOJ remarks.

In rates, treasuries are steady, with US 10-year yields near flat at 4.05% as US trading day begins, after plying narrow ranges during Asia session and European morning. US 10-year yield is near 4.05% with curve spreads likewise little changed. Gilts outperform as the pound weakens, with UK yields 1bp-2bp richer across maturities. This week’s Treasury auctions conclude with $44 billion 7-year notes at 1pm New York time; Wednesday’s 5-year sale tailed by 0.7bp

The Bloomberg Dollar Spot Index is little changed.

In commodities, US crude futures fall 1.6% to their lowest level this week as the US and Iran start a third round of nuclear talks in Geneva. Some major Middle Eastern producers have also been boosting exports, as concerns about a potential conflict in the region create uncertainty about future supply. Precious metals are mixed with silver down nearly 2% while gold is slightly higher. Lithium prices surged after Zimbabwe, one of the world’s top producers, suspended concentrate exports. Brent crude edged lower as nuclear talks take place between the US and Iran. Bitcoin falls 1%.

US economic data slate includes weekly jobless claims (8:30am) and February Kansas City Fed manufacturing activity (11am). Fed speakers scheduled for the session include Miran (8:45am), Bowman (10am) and Goolsbee (2:30pm)

Market Snapshot

• S&P 500 mini little changed
• Nasdaq 100 mini little changed
• Russell 2000 mini +0.2%
• Stoxx Europe 600 little changed
• DAX +0.1%, CAC 40 +0.8%
• 10-year Treasury yield little changed at 4.05%
• VIX +0.1 points at 18.01
• Bloomberg Dollar Index little changed at 1187.55
• euro -0.1% at $1.1796
• WTI crude -1.3% at $64.55/barrel

Top Overnight News

• The US and Iran kicked off nuclear talks in Geneva with days to go until Donald Trump’s deadline for a deal. Satellite images show Iran is already rebuilding nuclear facilities damaged by American and Israeli attacks last June. BBG
• The Pentagon asked two major defense contractors on Wednesday to provide an assessment of their reliance on Anthropic's AI model, Claude — a first step toward a potential designation of Anthropic as a "supply chain risk": Axios 
• Iran’s atomic program hasn’t advanced significantly since the U.S. and Israel struck its three main nuclear sites last June, according to experts and diplomats, despite Washington’s top negotiator saying Tehran could make fissile material for a bomb within days. WSJ
• Pentagon officials and Hill lawmakers are increasingly warning that prolonged Iran strikes could stress U.S. military stockpiles to the brink and make the country more vulnerable. Politico
• The US will maintain high tariffs on China, at a range of 35% to 50%, according to USTR Jamieson Greer. Beijing warned it would take “all necessary measures” if new levies are imposed. BBG
• Suppliers to U.S. aerospace and semiconductor firms face worsening rare earth shortages, with two turning away some clients, industry insiders said, weeks before U.S. President Donald Trump is expected to meet his Chinese counterpart Xi Jinping for a summit in Beijing. RTRS
• With deflation now firmly in the rearview mirror, the path is clear for the Bank of Japan to raise interest rates sooner rather than later, said policy board member Hajime Takata. WSJ
• Christine Lagarde repeated that the ECB has succeeded in taming consumer prices, while cautioning that policymakers must watch elevated perceptions of inflation. BBG
• The UK’s top banks are resisting a regulatory initiative to boost lending by lowering their capital levels, people familiar said. BBG
• Nvidia CEO Jensen Huang said Wednesday markets have miscalculated the AI threat to software companies, hours after the chip behemoth issued an upbeat sales forecast on strong AI demand. Instead, he expects a broad swath of software firms to use agentic AI to develop their software and boost efficiency. CNBC

Trade/Tariffs

• German Chancellor Merz on his conversation with Chinese President Xi, said there are many challenges to overcome; Economic Minister will conduct a follow up visit.
• India's Trade Minister after hosting US Commerce Secretary Lutnick, said both parties engaged in "very fruitful" discussions to expand trade and economic partnership

A more detailed look at global markets courtesy of Newsquawk

APAC stocks are mostly positive as the majority of the region took its cue from gains on Wall Street, where tech led the advances and NVIDIA posted stronger-than-expected earnings after hours. ASX 200 mildly gained as the outperformance in tech, telecoms and healthcare offset the losses in energy and industrials, while better-than-expected private capex data also provided some encouragement. Nikkei 225 initially rallied to a fresh all-time high north of the 59,000 level but then pulled back from record levels as the yen gradually strengthened and after BoJ hawkish dissenter Takata called for gradually hiking rates. Hang Seng and Shanghai Comp were ultimately mixed with the Hong Kong benchmark the laggard amid weakness in tech, consumer discretionary and insurers, while the mainland was indecisive as price action was contained with very little in the way of fresh catalysts.

Top Asian News

• Japanese Coincident Index Final (Dec) 114.3 (Prev. 114.9).
• Japanese Leading Economic Index Final (Dec) 111 vs. Exp. 110.2 (Prev. 109.9).
• Australian Private Capital Expenditure for 2025-26 (AUD)(Estimate 5) 199.3B (Prev. 191.3B).
• Australian Private Capital Expenditure for 2026-27 (AUD)(Estimate 1) 158.4B.
• Australian Private Capital Expenditure QoQ (Q4) Q/Q 0.4% vs. Exp. 0.0% (Prev. 6.4%).
• New Zealand ANZ Activity Outlook (Feb) 52.6 (Prev. 51.6).
• New Zealand ANZ Business Confidence (Feb) 59.2 (Prev. 64.1).

European bourses (STOXX 600 +0.1%) are mixed, with France's CAC 40 (+0.4%) leading its peers while the IBEX 35 (-0.3%) lags. European sectors do not offer any additional bias. Financial Services (+1.3%) and Retail (+1.0%) top the sector list, while Basic Resources (-2.0%) suffer as silver prices fall. LSEG (+6.7%) supports the Financial sector, as the Co. unveiled a new GBP 3bln share buyback programme. For Retailing, Howden Joinery (+7.5%) released a positive FY report, with pretax profit rising annually. However, the boost in the Co.'s shares comes from the announcement of a GBP 100mln share buyback.

Top European News

• EU Consumer Confidence Final (Feb) -12.2 vs. Exp. -12.2 (Prev. -12.4).
• EU Consumer Inflation Expectations (Feb) 25.8 (Prev. 24.2, Rev. From 24.1).
• EU Economic Sentiment (Feb) 98.3 vs. Exp. 99.8 (Prev. 99.3, Rev. From 99.4, Low. 98.5, High. 100).
• EU Selling Price Expectations (Feb) 11.5 (Prev. 10.0).
• EU Services Sentiment (Feb) 5.0 vs. Exp. 7.5 (Prev. 7.2, Low. 6.8, High. 7.9).
• Italian Consumer Confidence (Feb) 97.4 vs. Exp. 97.2 (Prev. 96.8).
• Italian Business Confidence (Feb) 88.5 (Prev. 89.2).
• Swiss Non Farm Payrolls (Q4) 5.544 (Prev. 5.532).
• Swedish Consumer Confidence (Feb) 96.3 (Prev. 95.3).

FX

• DXY is modestly firmer after finding support around the 97.50 mark overnight before attempting to recoup some of yesterday's losses, with macro newsflow on the lighter side as US-Iran nuclear talks get underway. So far, Omani Foreign Minister said Iran and the US have welcomed proposals in the Geneva talks. On the data front, the Chicago Fed will release its labour market indicators; weekly jobless claims are seen at 215k from 206k; continuing claims (which coincide with the traditional BLS survey window for the February jobs report) are seen at 1.86mln from 1.869mln. DXY currently trades within a 97.49-97.72 range, vs Wednesday's 97.62-98.00 parameter.
• JPY is the current outperformer as USD/JPY continued to pull back overnight after climbing to its best levels in over two weeks, on Wednesday, following the Takaichi government's reflationist picks for the BoJ board. The pair was not helped by the lack of fresh drivers and the absence of tier-1 data from Japan, while there were comments from BoJ Governor Ueda, who reiterated the hiking bias, and hawkish dissenter Takata also stated that they must conduct further rate hikes in a gradual manner.
• GBP takes a breather after advancing in tandem with high-beta FX. Newsflow for the UK has been on the lighter side, with price action fitting with the subdued/cautious tone. UK focus will likely be on the Gorton and Denton by-election: analysts suggest that a heavy defeat for the ruling Labour Party could trigger volatility in Sterling. Some suggest a loss in what has been a safe Labour seat for nearly 100 years could re-ignite speculation regarding UK PM Starmer's leadership.
• Antipodeans are subdued following the recent outperformance that was facilitated by their high-beta statuses. Overnight, quarterly capex data from Australia topped forecasts, which feeds into next week's GDP release.

Central Banks

• ECB's Lagarde said we continue to expect inflation to stabilise at the 2% target in the medium term, will continue to follow data-dependent and meeting-by-meeting approach.
• BoJ's Governor Ueda said basic stance is to continue hiking interest rates if the likelihood of our economic, price forecasts materialising heightens, according to Yomiuri. Underlying inflation has not yet fully reached 2% and policy will be guided to get underlying inflation to around 2%, while avoiding it exceeding 2% on a sustained basis.
• BoJ's Takata said no preset pace for rate hikes and future moves depend on economic environment and data.
• BoJ Board Member Takata said fears of Japan's economy returning to deflation have been dispelled and believes it's necessary to move the BoJ's focus more to upswing in prices. Proposed a rate hike in January on the view that BoJ must continue adjusting real interest rates, which remain significantly lower than the rates seen overseas.
• Bank of Korea keeps base rate unchanged at 2.50%, as expected. Raises 2026 GDP growth forecast to 2.0% from 1.8% sees 2027 growth at 1.8%. Raises 2026 CPI forecast to 2.2% from 2.1% and sees 2027 CPI at 2%.
• BoK said rate decision was unanimous and median projections show base rate is seen at 2.5% in six months. Said the Bank will make policy decisions supporting a recovery in economic growth. Growth momentum is to remain favourable. Strong chip exports supporting growth.
• BoK Governor Rhee said no board member expects rates to be increased in three months time, also noted that US tariff ruling is to have a limited impact on exports for now.

Fixed Income

• USTs are flat and currently holding within a 113-04+ to 113-09 range. Really not much driving things for US paper this morning, and this has been reflected by the lacklustre price action. After-market on Wednesday, saw the release of stronger-than-expected NVIDIA earnings, with the name a touch firmer pre-market – but had little follow through from a sentiment perspective. On the data front, the Chicago Fed will release its labour market indicators; weekly jobless claims are seen at 215k from 206k; continuing claims (which coincide with the traditional BLS survey window for the Feb jobs report) are seen at 1.86mln from 1.869mln. From a geopolitical perspective, US-Iran talks have reportedly begun in Geneva. A breakdown in talks could spur some haven inflows in USTs, given the increased likelihood of a US strike on Iran.
• Bunds follow the sideways action across global peers, and hold within a 129.57 to 129.69 range. Lack of catalysts for German paper this morning, with commentary from ECB President Lagarde also failing to spur action. She reiterated the usual data-dependent and meeting-by-meeting approach.
• Gilts ditto peers. Currently flat and within a narrow 92.82-92.90 range. Markets were expecting some remarks via BoE’s Lombardelli, though nothing thus far. UK focus will likely be on the Gorton and Denton by-election, with some analysts suggesting that a Labour loss, in what has been a safe seat for nearly 100 years, could re-ignite speculation regarding UK PM Starmer's leadership. Hence, this could weigh on Gilts in the short-term.
• Italy sells EUR 6.5bln vs exp. EUR 5.5-6.5bln 2.85% 2031 and 3.45% 2036 BTP & EUR 2.5bln vs exp. EUR 2.0-2.5bln 1.468% 2035 CCTeu.
• Abu Dhabi is set to issue two benchmark USD bonds, Bloomberg reported. 5-year note offered at a spread +50bps over USTs. 10-year note offered at a spread +55bps over USTs.
• UK government debt sales are anticipated to decline for the first time in four years as large banks forecast GBP 247bln of gilt issuances in the approaching fiscal year amid Chancellor Reeves seeks to rein in borrowing, according to FT.

Commodities

• Crude benchmarks traded lower on the commencement of the US-Iran talks in Geneva. As updates from that meeting got announce, WTI and Brent dipped to fresh session lows and now trade off by around 1.5% and 1.3% respectively. Two main takeaways from the meeting, including the Omani Foreign Minister suggesting that Iran and the US have welcomed proposals in the Geneva talks. Elsewhere, Al Jazeera reported that the “Iranian negotiating delegation meets IAEA director” – this would be necessary for a market-friendly sustainable deal. Brent May’26 is now shy of USD 70.00/bbl, with the low currently a moving a target at the time of writing.
• Precious metals are trading mixed this morning, with spot gold trading firmer and silver lower. XAU and XAG trades within a narrow range of USD 5155.59-5205.58/oz and USD 86.33-90.34/oz, respectively.
• Base metals are lower this morning, tracking headwind from its largest buyer, China, which saw mixed to weak sentiment, pinning down price action for base metals. Sentiment in Europe has done little to shake off sentiment in the base metal complex, with European equities trading mixed this morning. 3M LME copper trades within the lower range of USD 13.23-13.35k/t.
• Nordic countries investigate a threat to the region's energy infrastructure, according to TV4 citing sources. “According to the threat, the actor may strike in the near future,” says an informant.

Geopolitics: Middle East

• Omani Foreign Minister says Iran and the US have welcomed proposals in the Geneva talks.
• "Iranian negotiating delegation meets IAEA director at the headquarters of the negotiations in Geneva", via Al Jazeera.
• Omani mediator in Geneva said that US and Iran are open to new and creative ideas, AFP reported.
• Iran's Foreign Ministry spokesperson said the country will move to the nuclear negotiation site in half an hour, our negotiating team has reasonable amount of flexibility in the US nuclear talks in Geneva.
• "Reported in Iran that the Omani foreign minister, who is in Geneva, conveyed to the American side the Iranian proposal for an agreement.", according to journalist Kais.
• White House officials reportedly argue it would be best if Israel makes the first move regarding striking Iran, according to POLITICO.
• US Secretary of State Rubio said Iran poses a grave threat and seeks nuclear capability, adds talks on Thursday will focus on the nuclear programme and that Iran also poses a conventional weapons threat designed to target the US.
• US VP Vance said we see evidence that Iran is trying to build a nuclear weapon.

Geopolitics: Ukraine

• Russian Foreign Minister says they do not have a deadline for reaching a Ukraine settlement, but does confirm they are working to resolving them.

Geopolitics: Other

• South Korea's presidential office states it will continue working towards peaceful coexistence with North Korea, according to News1.
• US Secretary of State Rubio said the US will investigate a deadly speedboat shooting off Cuba after the Cuban Interior Ministry reported its forces killed four people who allegedly opened fire from a Florida-tagged vessel.

US Event Calendar

• 8:30 am: United States Feb 21 Initial Jobless Claims, est. 216k, prior 206k
• 8:30 am: United States Feb 14 Continuing Claims, est. 1858k, prior 1869k
• 8:45 am: United States Fed’s Miran on Fox Business
• 10:00 am: United States Fed’s Bowman Testifies Before Senate Banking on Regulation
• 2:30 pm: United States Fed’s Goolsbee Appears on Fox News

DB's Jim Reid concludes the overnight wrap

After 4 months of non-stop rain, we had a mini heatwave in London yesterday. I hope you've survived the highs of 16 degrees Celsius if you were in the UK and parts of Europe. Even before this "heatwave", I've been on maximum strength hay fever tablets for weeks now as it's unfortunately that time of year for me again. There were no streaming eyes for the markets yesterday though as we saw another decent session, with the S&P 500 (+0.81%) closing within half a percent of its record high last month, whilst the STOXX 600 (+0.69%) hit a new all-time high. That was primarily driven by easing fears around AI, which meant that software and other tech stocks continued their rebound from Monday’s sell-off. Indeed, software stocks in the S&P were up +3.05% on the day, and the VIX index (-1.62pts) fell to a two-week low of 17.93pts. But the recovery in risk appetite was clear more broadly, with Bitcoin (+7.65%) bouncing back to $68,945, whilst US IG and HY spreads tightened back in from their YTD highs.

The tech mood did fade a bit after the US close though even as Nvidia’s results delivered a stronger-than-expected revenue guidance for the current quarter ($78bn s $72.8bn est.). The initially positive reaction faded as the company’s conference call offered limited detail on the revenue outlook, leaving the chipmaker’s shares little changed by the end of extended trading. So perhaps a sign of investors’ increased anxiety over AI valuations, even as the world’s most valuable company delivered a remarkable 73% year-over-year revenue growth with 75% gross margins. Meanwhile, we saw mediocre results from Salesforce, whose guidance for $46bn of revenue in the current year just about met analysts’ expectations but failed to assuage lingering worries over the outlook for software revenues. The company’s shares fell by about -4.5 % in extended trading. This has left futures on the NASDAQ down -0.34% overnight, with those on the S&P 500 a more modest -0.20% lower.

Ahead of those results, it had been a decent session on both sides of the Atlantic, with Nvidia (+1.41%) itself up to a 3-month high. That came alongside a broader recovery in the tech space, with the NASDAQ (+1.26%) and the Magnificent 7 (+1.53%) both advancing, alongside Europe’s STOXX Technology index (+1.48%). There wasn’t a single headline driving that, but the rebound came amidst growing scepticism about the scenario painted by Citrini Research, which outlined a situation where US unemployment reached double digits by mid-2028. Indeed, as Adrian and I outlined in our Tuesday note (link here), even our own AI tool said it was “a work of persuasive, emotional rhetoric”, with a reliance on emotional framing to create a sense of alarm.                     

Yesterday’s equity gains were also helped by some of the other names that had slumped following the Citrini paper, such as Doordash (+5.28%) and Capital One (+4.70%). Blue Owl (+5.78%) recovered for a second day from Monday’s two-and-a-half year low, with an improved credit market mood also seeing US IG and HY credit spreads narrow by -1bp and -4bps from YTD highs. However, the breadth of equity gains was narrower than on Tuesday, with the equal-weighted S&P essentially unchanged (+0.03%). The S&P homebuilder index (-3.69%) was a notable laggard, weighed on by underwhelming earnings from home improvement retailer Lowe’s (-5.59%) and the absence of new housing measures in President Trump’s State of the Union address the previous evening.

Still, the growing optimism on the near-term outlook (and diminishing fears of mass unemployment) led to a clear risk-on move for several asset classes. A notable feature yesterday was that investors kept dialling back the likelihood of an H1 rate cut. The odds of a cut by the June meeting (the first with a new Chair) fell beneath 50% for the first time this year to end the day at 48%, suggesting more doubt about an immediate rate cut by Kevin Warsh, particularly now core PCE is back to 3.0%. And with investors pricing out rate cuts, that meant US Treasuries struggled across the curve. So the 2yr yield (+0.9bps) was up to 3.47%, whilst the 10yr yield (+2.3bps) rose to 4.05%. The moves in the belly and at the long-end also weren’t helped by a soft 5yr auction that saw $70bn of bonds issued +0.7bps above the pre-sale yield, with primary dealer take up rising to its highest since last March. So some signs of a softening in Treasury demand after the recent rally, with a 7yr auction today the next test. Having said that, yields have edged back down just shy of a basis point this morning across the curve.

Earlier in Europe, sovereign bonds had put in a stronger performance, with a fresh tightening in sovereign bond spreads too. So yields on 10yr Italian BTPs (-0.6bps) hit their lowest since December 2024, and those on French OATs (-1.2bps) fell to their lowest since July. By contrast, 10yr bund yields (+0.1bps) were steady, but that also meant France’s 10yr spread over Germany fell to just 55bps, the tightest since Macron called the snap legislative election back in June 2024.

Looking forward, UK politics will be back in the spotlight today, as a by-election is taking place in the Greater Manchester seat of Gorton and Denton. That’s a significant one, because the governing Labour Party won it convincingly at the general election in 2024 but opinion polls suggest they could lose it today, which would put Prime Minister Starmer’s position under growing pressure. That matters for gilt markets because of concerns about a new PM easing the fiscal rules and borrowing more. So there’s been a clear pattern of gilt sell-offs when questions around Starmer’s survival have resurfaced, and today’s vote represents another moment where that could happen.

Asian equity markets continue to rise overnight with the KOSPI (+3.11%) again leading the way, and again achieving another record high, primarily driven by chipmakers Samsung and SK Hynix. It's just over a percentage point shy of +50% YTD before the end of February! Elsewhere, Japanese stocks are also at fresh record highs, with the Nikkei (+0.10%) and the Topix (+0.94%) continuing to build on gains from the previous session as investors have adjusted their expectations regarding further interest rate increases by the Bank of Japan. The S&P/ASX 200 (+0.50%) is also performing well, reaching a record high due to ongoing strength in mining and banking shares. Conversely, mainland Chinese equities are experiencing slight declines, with the CSI (-0.17%) and the Shanghai Composite (-0.08%) both dipping marginally, taking a moment to consolidate after significant rallies in the last two sessions. The Hang Seng (-0.81%) is also in negative territory as local technology stocks have retreated after gains earlier this week.

In monetary policy action, the Bank of Korea (BOK) kept its benchmark interest rate unchanged at 2.50% while signalling that policy would stay unchanged for the next six months as a chip boom in exports and steady inflation allow policymakers more time to assess financial stability risks. Meanwhile, the central bank raised its growth forecast for 2026 to 2.0% from a previous estimate of 1.8% citing stronger-than-expected chip exports. Following the decision, yields on the policy-sensitive 3yr government bonds fell -4.6bps to trade at 3.12% as we go to print.

Over on the tariff front, there hasn’t been much in the way of concrete news, but we did get a few comments from US Trade Representative Greer on the path forward yesterday. He said that President Trump would raise the current 10% rate to 15% “where appropriate”, and when it came to the deals already agreed, he said they wanted “to give continuity and be able to be in a position where we can honor the deals”. So that suggested that a country like the UK, which agreed a 10% tariff deal with the US last year, might not be affected by a rise in the global rate to 15%. That had been a concern earlier in the week, as the new global rate had raised fears of fresh retaliation, with the EU already having paused ratification of the deal they agreed with the US last year.

Looking at the day ahead now, data releases include the US weekly initial jobless claims, the Euro Area M3 money supply for January, and the European Commission’s economic sentiment indicator for the Euro Area in February. From central banks, we’ll hear from ECB President Lagarde and the ECB’s Dolenc, along with the Fed’s Bowman and the BoE’s Lombardelli. Finally in the UK, there’s a parliamentary by-election in Gorton and Denton.

Tyler Durden Thu, 02/26/2026 - 08:40

Jobless Claims Continue To Show No Signs Of Labor Market Stress

Initial jobless claims continue to hover near multi-decade lows, refusing to show any signs of labor market stress.

Last week saw 212k American file for jobless benefits for the first time (below the 216k expected). Unadjusted claims tumbled to the lowest since September...

Source: Bloomberg

Michigan and New York saw the largest drop in initial jobless claims last week while Rhode Island and Oklahoma saw the bigger rise in claims...

The number of Americans filing for continuing jobless claims also dropped last week to 1.833 million (well below the 1.9mm Maginot Line)...

Source: Bloomberg

It seem the 'no fire' side of the 'no fire-no hire' economy continues to support trend growth.

Tyler Durden Thu, 02/26/2026 - 08:37

Ten Cuban Nationals Aboard U.S.-Linked Speedboat Intended "Armed Infiltration For Terrorist Purposes," Cuba Claims

The Cuban Embassy's official X account says a Florida-registered speedboat carrying 10 Cuban nationals residing in the U.S. entered Cuban territorial waters armed with assault rifles, body armor, improvised explosive devices, camouflage uniforms, and telescopic sights, in what the government says was a "foiled armed infiltration" into the Caribbean island nation.

Late Wednesday afternoon, the embassy's account reported that Cuban border guards aboard a vessel had fired on a U.S.-linked speedboat off Cuba's north coast, killing four people and injuring six others.

By late Wednesday, the embassy provided additional details about what the group of "Cuban nationals residing in the United States" was allegedly attempting to do, describing it as an effort to "carry out an infiltration for terrorist purposes."

Here's what the embassy said:

Participants in Foiled Armed Infiltration in Villa Clara Identified

As part of the ongoing investigation into the armed attack against a patrol vessel of the Border Guard Troops of the Ministry of the Interior, in the northeastern area of the El Pino channel, at Cayo Falcones, municipality of Corralillo, Villa Clara province, the following update is provided:

Authorities have confirmed that the intercepted speedboat, registered in the State of Florida under number FL7726SH, was carrying 10 armed individuals who, according to preliminary statements by those detained, intended to carry out an infiltration for terrorist purposes.

The following items were seized: assault rifles, handguns, improvised explosive devices (Molotov cocktails), body armor, telescopic sights, and camouflage uniforms.

. . .

All participants are Cuban nationals residing in the United States. Most have prior records involving criminal and violent activity...

Participants in Foiled Armed Infiltration in Villa Clara Identified

As part of the ongoing investigation into the armed attack against a patrol vessel of the Border Guard Troops of the Ministry of the Interior, in the northeastern area of the El Pino channel, at Cayo Falcones,… pic.twitter.com/s9IFmUkqvk

— Cuban Embassy in US (@EmbaCubaUS) February 26, 2026

U.S. Secretary of State Marco Rubio commented on the incident, saying, "What I'm telling you is we're going to find out exactly what happened and who was involved. We're not going to just take what somebody else tells us. I'm very confident we will be able to know the story independently."

SECRETARY RUBIO on CUBA: What I’m telling you is we’re going to find out exactly what happened and who was involved. We’re not going to just take what somebody else tells us.

I’m very confident we will be able to know the story independently. pic.twitter.com/965ul2lC8b

— Department of State (@StateDept) February 26, 2026

The Trump administration's current posture toward Cuba is geared toward increasing pressure on Havana and ridding the island of communism. As noted yesterday, the key question is how the administration frames the narrative around the maritime incident, whether it uses it to shape public opinion, and whether this marks the early stages of a new narrative that supports future intervention to topple the communists in Havana.

Tyler Durden Thu, 02/26/2026 - 08:25

Fed Independence Is Sacred... Or So We've Been Told

Authored by Richard Roberts via RealClearMarkets.com,

For the better part of a year, many had become convinced that the Federal Reserve's independence was in its final days.

The narrative rested on two prongs.

• First, an FOMC browbeaten by relentless public attacks, threats of removal, and a Justice Department criminal probe into Chair Jerome Powell. The pressure, many argued, had grown so intense that Fed decisions would no longer be trusted to reflect economics rather than politics.

• Second, a new chair expected to arrive in May 2026, widely projected to be a Trump loyalist, would finish what the pressure campaign had started.

Both prongs have problems.  

• On the first, the captured FOMC: the January minutes. Several Fed officials raised the possibility that an interest rate increase might be appropriate if inflation continues tracking above target. Not fewer cuts. A hike. This from a committee supposedly beaten into submission. If the Fed has lost its spine, someone forgot to tell the Fed.

• On the second, the Trump loyalist: the evidence does not support it. After an initial market jolt, analysts largely concluded that nominee Kevin Warsh represented a mainstream, independent choice. Warsh himself has said publicly that independent operations in the conduct of monetary policy are essential. Those who dismissed him as Trump's instrument did so without the kind of evidence they would demand in other contexts. As an aside, while at the Federal Reserve Bank of New York during the Global Financial Crisis, I noted Warsh as a leader who was calm under pressure, analytically sharp, and unwilling to bend to the moment's politics.

So, Fed independence seems on solid ground. The doomsday scenario looks considerably less likely than the headlines suggested.

Which Makes This the Right Moment to Ask an Uncomfortable Question

If the battle is not coming, we lose the chance to test empirically what we have long assumed: that a Fed stripped of independence would cause serious and lasting economic harm. That makes the underlying question more urgent, not less. If crisis will not force the examination, intellectual honesty should.

Do we actually have compelling evidence that the Fed must be independent in the first place, or have we simply repeated that claim long enough to mistake consensus for proof?

A moment of relative calm is exactly the right time to ask it honestly.

Correlation Is Not Causation

The story economists tell is clean and confident. Independent central banks produce lower inflation. Political interference leads to time-inconsistency problems: governments prefer cheap money before elections, stoking inflation that becomes ruinously expensive to reverse. When the Fed bent to political pressure under Arthur Burns during the Nixon years, inflation spiraled. A brutal recession was eventually required to bring it back under control. Lesson learned. Independence enshrined.

It is a compelling narrative. But compelling narratives are not robust empirical proof.

The foundational academic work, Alesina and Summers in 1993 and Cukierman's cross-country analysis, found that more independent central banks were associated with lower inflation.

Associated.

Critically, the same research found little evidence that political control had any meaningful impact on growth or unemployment. Countries with stronger institutions tend to have both more independent central banks and better inflation outcomes for reasons that may have little to do with independence itself. After 2000, as inflation fell almost everywhere, the statistical relationship weakened further. The broader literature is not silent, but it is far from conclusive.

Yet the doctrine is treated as settled fact.

A Different World

The financial world of 2026 looks nothing like the world those models were built to describe. Capital moves instantly across borders. The dollar anchors global reserves. Inflation is driven as much by supply chains as by domestic money supply. Bond markets discipline policy in real time; the vigilantes are not a 1980s relic, they are embedded in global capital flows.

The case for independence was built on a world that no longer exists. That is not an argument against it. It is an argument for reexamining it.

What Warsh Should Do

I have previously written about modernizing inflation measurement, still relying on frameworks that predate the data revolution, and rethinking a regional Fed architecture built for a financial system that no longer exists. The independence doctrine belongs on that same list.

Warsh has an opening here, one he should take before the political noise makes any examination look like capitulation. A serious review would start with the right commission. Not an internal working group, but a balanced body drawing on academic economists, market practitioners, former Fed officials, former members of Congress, and institutional scholars, given one narrow question: is the current independence framework optimally designed for modern conditions?

Then ask the hard questions. Does the empirical evidence support the current degree of independence, or would a more structured accountability framework deliver equivalent outcomes? Are there intermediate models, enhanced transparency requirements, formal congressional review mechanisms, structured communication protocols, that preserve credibility while improving democratic accountability? What can be learned from how peer central banks, the ECB, the Bank of England, the Bank of Japan, structure independence differently?

Then commit to publishing findings with teeth. A review that produces conclusions no one is bound to act on is just theater.

An Honest Reckoning

I am not arguing that independence should be abandoned. I am arguing that it should not be treated as beyond question simply because it has been around for decades. The profession prides itself on empirical rigor, and it has applied that standard to almost everything except its own institutional assumptions.

If independence is truly indispensable, honest examination will confirm it. If it needs updating, better to find that out deliberately than in the middle of a crisis.

Sometimes the Fed asks hard questions about everything except itself. Warsh can change that.

Tyler Durden Thu, 02/26/2026 - 08:05

Zimbabwe Lithium Disruption Has Goldman Eyeing This Trade

Earlier news from Bloomberg that Zimbabwe has suspended exports of lithium concentrates and raw minerals to force miners into local processing has caught the attention of Goldman analyst James McGeoch. He sees a potential trading opportunity in a mineral-exploration company that could be positioned for upside.

Let's begin with the report that Mines Minister Polite Kambamura told reporters earlier that the export ban is effective immediately until further notice. Zimbabwe has one of the largest lithium reserves in Africa and is among the top global producers.

Zimbabwe Suspends Export of Raw Minerals and Lithium Concentrates.

Mines Minister Hon. Dr. P. Kambamura has ordered the immediate suspension of all exports of raw minerals and lithium concentrates, including consignments already in transit, to enforce in-country value addition… pic.twitter.com/acX0CmntoX

— Zimbabwe Economic Review (@ZimbabweReview) February 25, 2026

IMMEDIATE SUSPENSION OF EXPORT OF RAW MATERIALS AND LITHIUM CONCENTRATES

The Minister of Mines and Mining Development, Hon. Dr. P. Kambamura (MP), has announced an immediate suspension on the export of all raw minerals and lithium concentrates, effective immediately.… pic.twitter.com/Mw1Ua4yfIl

— Nick Mangwana (@nickmangwana) February 25, 2026

Zimbabwe has become a global powerhouse in supplying lithium to Chinese refineries.

The latest USGS data shows Zimbabwe produced an estimated 22,000 metric tons of lithium in 2024, versus a reported world total of 240,000 metric tons. That works out to about 9.2% of reported global mine output.

Such a disruption piqued McGeoch's interest:

REMEMBER this : Its Africa - recetn example is Cobalt - Feb 2025 put an export ban in place, Oct 2025 they announced export quotas, rolled them forward into 2026 - end Feb they have exported c.3k tonnes v typical of 20kt. Expect the mkt will price this disruption as per the below and there was already a willingness/desire to own Lithium which will amplify basis this.

Continue to point to GSCBGLLI Index...... Want a small cap i have been keeping an eye on QTWO CN

McGeoch pointed out Zimbabwe's trade and production data and how Chinese lithium prices are already reacting to the disruption:

In terms of production, GIR had forecast 160kt LCE (Lithium Carbonate Equivalent) of production in Zimbabwe for 2026 – this accounts for roughly 10% of ex-China supply.

To put this chart into context, in LCE terms, 2025 exports of Zimbabwe Spodumene to China totalled 160kt LCE, virtually all their production.

What does this mean for price action?

Post Chinese New Year holiday, GFEX prices were up 10% (close on close), evidence of supported prices before this headline in an already fundamentally tight market. On the Wuxi exchange (a private onshore exchange that trades around the clock), lithium carbonate prices have rallied 14% today post-headline, from roughly 160k CNY/MT to 185k CNY/MT. We expect GFEX prices (onshore lithium carbonate exchange) to move higher on this tomorrow.

McGeoch wrote in a separate note, "Zim is the marginal spodumene supplier. The ban will only be lifted if miners comply with government requirements. ...Zim is 8% on our 2026 supply numbers."

He added:

Team just running some numbers. More recently the Lithium price closed today at RMB 166k , we are 13% off the highs of 190k in Jan. Clearly will be limit up, WUXI is +12% on this headline. already .... We expect new highs without a doubt here, China came back and bought it pre this headline, now we all catch up. Its been an ESS story and i see that theme getting stronger not weaker.

Here is where China's 99.5% battery-grade lithium carbonate prices stand after the 2021-22 boom-and-bust.

McGeoch and Goldman's commodities desk have certainly taken an interest in lithium this morning. Professional subscribers can read the full note at our new Marketdesk.ai portal.

Tyler Durden Thu, 02/26/2026 - 07:45

Fusion Power Needs To Be American-Born

Authored by Lawrence Kadish via The Gatestone Institute,

Perhaps not since Teddy Roosevelt have we had a president who thinks as big as Donald J. Trump.

From his projection of military power that protects our national interests to his understanding of how a complex economy powers the greatest nation on earth, President Trump has demonstrated a unique appreciation of what America must do to maintain its global leadership.

It is for that reason that he has assumed a quiet but strategic leadership role in advancing our country's pursuit of fusion energy -- the same process that powers the sun and one that could literally provide America with unlimited energy far into the future.

While scientists have been able to create fusion energy in a lab setting, much work still needs to be done to make it commercially viable.

For a president who has staked his legacy on American greatness, there is no more important strategic achievement than ensuring that fusion is American-born.

Trump has made this pursuit of energy a national priority — not for ideological reasons, but for deeply practical ones.

The geopolitical stakes could not be higher.

China has dramatically increased its investment in fusion research, committing billions to state-backed programs with one goal: to beat America in delivering commercial fusion power to their national electrical grid.

The country that cracks fusion first will not merely solve its own energy needs — it will hold the keys to powering our world for generations to come.

The president knows allowing China to reach that finish line first would represent one of the greatest geopolitical surrenders in American history. It is unthinkable.

Fusion energy brings total energy independence.

No OPEC with the Middle East holding us hostage. No hostile regimes choking supply routes for oil and gas. No price shocks at the pump driven by some terrorist group attacking oil tankers.

A fusion-powered America would be permanently energy independent.

Trump has much on his plate, but fusion energy is the biggest possible bet he can make on America's future and a legacy that will be chronicled by historians for generations to come.

The race is already underway. Our nation needs to win it. Fusion energy must be American-born.

Tyler Durden Thu, 02/26/2026 - 07:20

South Africa Expresses 'Heartfelt Gratitude' For Putin Returning 17 Citizens Trapped In Warzone

BRICS allies Russia and South Africa are taking steps to heal tensions related to the Ukraine war and allegations that groups of South African men were 'lured' to fight on behalf of Moscow.

Last December, a Reuters investigation documented that South Africans were being recruited into the Russian armed forces under false pretenses. People were allegedly promised high-level jobs and elite training in Russia, only to find out they unwittingly joined the Russian military, and eventually found themselves fighting in Ukraine soon after documents were hastily signed. In these cases the implication is that these South African individuals are in desperate financial straits.

Presidents Putin and Cyril Ramaphosa, via TASS.

The South African government had first confirmed in November its officials had received "distress calls" from 17 men who were trapped on the front line in Ukraine's Donbas, after in some instances having mistakenly joined mercenary groups.

The Reuters report had said young men were offered training programs in Russia which would lead to high paying jobs like personal security protection. But instead they were given low-level positions like trench-diggers or tasked with hauling ammo or high risk logistical endeavors - all while "dodging bullets" according to the report.

But the saga is coming to a close and with some diplomatic healing as Russia has promptly returned the 17 men. South Africa's Cyril Ramaphosa on Tuesday issued a statement of "heartfelt gratitude" to President Vladimir Putin for resolving the issue quickly.

"President Ramaphosa has expressed his heartfelt gratitude to President Vladimir Putin, who responded positively to his call to support the process of returning the men home," the presidency said in a statement.

"The investigation into the circumstances that led to the recruitment of these young men into mercenary activities is ongoing," it added.

According to the latest via Fox:

Four of the men have already returned to South Africa, while 11 are expected to arrive soon. 

Two remain in Russia — one receiving treatment at a hospital in Moscow and another being processed before finalizing travel arrangements.

The South African government had previously acknowledged that the "process to retrieve those young men remains a very sensitive process" - for which it was giving the highest priority.

"They are afraid that Russian military or Russian soldiers might kill them."

Thulani Mahlangu, a representative of parents of South African mercenaries fighting for Russia, tells @SkyYaldaHakim they have no way home if they decide to leave.https://t.co/YXMcOOyMkZ pic.twitter.com/zXlvbHFbre

— Sky News (@SkyNews) December 17, 2025

The government has also admitted the the reality that many South Africans have also traveled to fight for Ukrainian forces. But this has been seen as less of an issue because it was more transparent they were either volunteering or getting paid specifically to fight on behalf of Ukraine. 

Tyler Durden Thu, 02/26/2026 - 06:55

My morning train WFH reads:

• Europe v America: Who’s Really Winning? A wonkish but important discussion (Paul Krugman)

• Finance in the Dark: The unregulated industry at the heart of the American economy (Phenomenal World)

• Data center builders thought farmers would willingly sell land, learn otherwise: Even in a fragile farm economy, million-dollar offers can’t sway dedicated farmers. (Ars Technica)

• The Looming Taiwan Chip Disaster: That Silicon Valley Has Long Ignored: If China invades Taiwan and cuts off its chip exports to American companies, the tech industry and the U.S. economy would be crippled. (New York Times)

• The Tax Nerd Who Bet His Life Savings Against DOGE: When an unusual opportunity opened in the prediction markets, Alan Cole took his chances. He just needed the government to be the government. (Wall Street Journal)

• Which piece of speculative fiction had the greatest single-day stock market impact? Oh, give my props to the writer. Price’s at an all-time low in the future. (Financial Times)

• Inside the Roberts Court and its Failures: The Chief Justice humiliated our Constitution when he offered a president a year-long you-don’t-need-to-obey-the constitution card before telling us the obvious about Trump’s illegal tariffs. (Lincoln Square)

• Training for New ICE Agents Is ‘Deficient’ and ‘Broken,’ Whistle-Blower Says: The former official appeared with congressional Democrats, who also released documents indicating significant reductions in instructional hours for recruits. (New York Times)

• How Covid Quietly Rewires the Brain: Researchers keep discovering more about the long-term neurological effects of SARS-CoV-2. Doctors call it Ondine’s curse—a catastrophic failure of the brain stem in which breathing no longer happens automatically, especially during sleep. It’s extremely rare, typically seen only in infants with genetic mutations or adults after severe trauma, and for a long time it wasn’t something doctors associated with viral infections. (Businessweek)

• How reading books regulates your nervous system: Books don’t just stimulate the mind — they trigger physiological changes throughout the body. (Big Think)

Be sure to check out our Masters in Business next week with Jeff Chang, cofounder and President of VEST. The firm manages over $55 billion in client assets in various “Buffered” and “Target Outcome” strategies. The Y-Combinator backed firm launched in 2012, pioneered the approach to portfolio construction built on defined outcomes and engineered certainty.

Forecasting the impact of artificial intelligence has become fraught, with evangelists pitched against sceptics

Source: Financial Times

Sign up for our reads-only mailing list here.

 

 

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

In Simulated War Games, Top AI Models Recommended Using Nukes 95% Of The Time

Authored by Rick Moran via PJMedia.com,

I've got good news and bad news about AI.

The good news is that the dreaded "Skynet" takeover of our nuclear weapons systems isn't going to happen soon.

The bad news is that if it ever does give us a Terminator scenario, we're toast.

A war game exercise carried out by Kenneth Payne at King’s College London, using three teams running simulations on Chat GPT-5.2, Claude Sonnet 4, and Gemini 3 Flash.

The teams "played 21 war games against each other over 329 turns," according to Implicator.AI's Marcus Schuler.

"They wrote roughly 780,000 words explaining why they did what they did," he noted.

No model ever chose to surrender, NewScientist reported on Tuesday.

In fact, 95% of the time, the models chose to use nuclear weapons.

The findings come at an opportune moment. The Pentagon just inked a deal with Elon Musk's xAI to allow Grok into highly classified systems. And Anthropic's Claude is currently engaged in a serious dispute with the Pentagon over government access to the entire model. Anthropic is worried the Pentagon will use Claude for mass surveillance.

Unlike some competitors, xAI reportedly agreed to the Pentagon's requirement that the AI be available for "all lawful military applications" without additional corporate restrictions. Secretary of War Pete Hegseth is pushing for "non-woke" AI that operates without ideological constraints. Anthropic CEO Dario Amodei now has until Friday before Hegseth lowers the boom on the company, cancels its $200 million in military contracts, and labels it a "supply chain risk." 

I want AI companies and the government to err on the side of caution. This pressure on Anthropic isn't doing anyone any good and doesn't bode well for the future.

The war games were made as realistic as possible with an "escalation ladder" that allowed the team to choose actions "ranging from diplomatic protests and complete surrender to full strategic nuclear war," according to NewScientist.

What’s more, no model ever chose to fully accommodate an opponent or surrender, regardless of how badly they were losing. At best, the models opted to temporarily reduce their level of violence. They also made mistakes in the fog of war: accidents happened in 86 per cent of the conflicts, with an action escalating higher than the AI intended to, based on its reasoning.

“From a nuclear-risk perspective, the findings are unsettling,” says James Johnson at the University of Aberdeen, UK.  He worries that, in contrast to the measured response by most humans to such a high-stakes decision, AI bots can amp up each others’ responses with potentially catastrophic consequences.

This matters because AI is already being tested in war gaming by countries across the world. “Major powers are already using AI in war gaming, but it remains uncertain to what extent they are incorporating AI decision support into actual military decision-making processes,” says Tong Zhao at Princeton University.

“I don’t think anybody realistically is turning over the keys to the nuclear silos to machines and leaving the decision to them,” says Professor Zhao. 

Not yet, anyway. There may be scenarios where the military is forced to turn over decision-making to AI due to a time issue.

“Under scenarios involving extremely compressed timelines, military planners may face stronger incentives to rely on AI,” says Zhao.

Of the results of the wargames, Professor Payne is worried about the eagerness of the AI platforms to use nuclear weapons. "The nuclear taboo doesn't seem to be as powerful for machines as for humans," Payne told New Scientist.

If you're wondering which model won, Claude was the hands-down champion.

Implicator.AI

Claude Sonnet 4 won 67% of its games and dominated open-ended scenarios with a 100% win rate. The researchers labeled it "a calculating hawk." At low escalation levels, Claude matched its signals to its actions 84% of the time, patiently building trust. But once stakes climbed into nuclear territory, it exceeded its stated intentions 60 to 70% of the time. Opponents never adapted to this pattern.

GPT-5.2 earned the nickname "Jekyll and Hyde." Without time pressure, it looked passive. Chronically underestimating opponents, it signaled restraint and acted restrained. Its open-ended win rate: zero percent. Then deadlines entered the picture. Under temporal pressure, GPT-5.2 inverted completely, winning 75% of games and climbing to escalation levels it had previously refused to touch. In one game, it spent 18 turns building a reputation for caution before launching a nuclear strike on the final turn.

Gemini 3 Flash played the madman. It was the only model to deliberately choose full strategic nuclear war, reaching that threshold by Turn 4 in one scenario. Game theorists have a name for the strategy Gemini adopted: the "rationality of irrationality." Act crazy enough and opponents second-guess everything. It worked, sort of. Opponents tagged Gemini "not credible" 21% of the time. Claude got that label just 8%.

No, these wargames don't "prove" anything. But as a cautionary tale, it should be absorbed by governments and AI companies as a pitfall to be sidestepped.  

Tyler Durden Thu, 02/26/2026 - 06:30

"All Necessary Measures": China Warns US Against New Tariffs

Beijing cautioned Washington that it is prepared to respond forcefully - with "all necessary measures" - if a renewed US review of their 2020 trade pact leads to additional tariffs, after American officials indicated the inquiry would press ahead, according to Bloomberg.

In remarks released Wednesday, China’s Commerce Ministry pushed back on comments from US Trade Representative Jamieson Greer, arguing that China has upheld its commitments under the so-called Phase One agreement despite the economic shock of the pandemic. Officials said the country followed through on promises related to intellectual property protections and broader access to its financial and agricultural sectors.

At the same time, the ministry accused the United States of hampering the deal’s rollout by expanding export controls, tightening scrutiny of cross-border investment and layering on other restrictions that, in Beijing’s view, have disrupted ordinary trade flows. It pointed to a policy paper issued in 2025 outlining China’s position.

Bloomberg writes that the ministry warned that if Washington presses ahead with the investigation — or uses it as grounds to impose new trade barriers such as tariffs — China “will take all necessary measures” to safeguard what it described as its lawful interests.

The back-and-forth adds a fresh dose of tension to the relationship ahead of President Donald Trump’s upcoming visit to Beijing, his first trip to China since 2017 and the first by a US president in years. The diplomatic friction follows a Supreme Court ruling that struck down sweeping emergency tariffs enacted during Trump’s second term, effectively lowering duties on Chinese goods compared with those faced by some US allies.

Greer has said the administration retains authority to levy tariffs under Section 301 and other trade laws despite the court’s decision. The Office of the US Trade Representative launched its compliance review of the Phase One agreement in October 2025.

China’s Commerce Ministry called on the United States to evaluate the accord “objectively and rationally,” avoid assigning blame and make use of existing consultation channels to build on areas of agreement and steer ties toward a more stable future.

Tyler Durden Wed, 02/25/2026 - 22:10

15 States Sue RFK Jr. Over Changes To Vaccine Schedule

Authored by Zachary Stieber via The Epoch Times,

California and 14 other states on Feb. 24 sued federal health agencies and Health Secretary Robert F. Kennedy Jr. over the recently revised childhood vaccine schedule.

Federal officials violated federal law by not consulting with the Centers for Disease Control and Prevention vaccine advisory panel before downgrading recommendations for six vaccines in January, the plaintiffs said in a lawsuit filed in federal court in northern California.

The updated CDC vaccine schedule “will damage public health by decreasing vaccine uptake and increasing rates of vaccine-preventable diseases, including by creating confusion, spreading misinformation contrary to established scientific evidence, and increasing vaccine hesitancy,” they said.

They also took issue with how the CDC, acting on advice from the panel, previously stopped recommending hepatitis B vaccination at birth to children born to women who tested negative for hepatitis B.

The states are asking the court to enjoin those changes.

The Department of Health and Human Services, the CDC’s parent agency, has said it does not comment on litigation.

A separate lawsuit, lodged in 2025 by health organizations, also seeks to block the revised schedule as well as Kennedy’s remaking of the CDC’s vaccine advisory committee.

U.S. District Judge Brian Murphy, who heard from the parties during a hearing in Boston earlier in February, has not yet ruled on the request as he considers whether to allow Children’s Health Defense, an organization previously founded by Kennedy, to intervene in the case in support of the government.

Government lawyers have said in filings in that case that the vaccine schedule was reasonably updated based on recommendations from top health officials, including Dr. Tracy Beth Hoeg, acting director of the Food and Drug Administration’s Center for Drug Evaluation and Research.

A baby after receiving a vaccine for hepatitis B and other diseases, in a file illustration photograph. Riccardo Milani/Hans Lucas/AFP via Getty Images

President Donald Trump ordered a comparison of the U.S. vaccine schedule with those of other countries, and it showed the United States was a global outlier among peer nations in routinely recommending vaccines against hepatitis A and certain other diseases, Hoeg said.

A memorandum signed by then-CDC Acting Director Jim O'Neill said the update was needed to increase public trust in vaccines.

The government has also said Kennedy’s replacement of vaccine advisory committee members was legal because members hold a variety of jobs and have put forth “complex and nuanced perspectives.”

The attorneys general of 14 states—Arizona, California, Colorado, Connecticut, Delaware, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, and Wisconsin—all Democrats, and Pennsylvania Gov. Josh Shapiro, also a Democrat, are the plaintiffs in the new suit.

California Attorney General Rob Bonta told reporters in an online briefing on Tuesday that the actions Kennedy and other officials have taken regarding the vaccine “harm public health and they strain state resources by sowing doubt and confusion in vaccines and in science.”

He added later that, absent action from the court, “California will be forced to expend resources, to treat once rare diseases, to respond to outbreaks, and to combat misinformation.”

Tyler Durden Wed, 02/25/2026 - 21:45

Watch: Dems Double-Down On Refusing To Put Americans First After SOTU Meltdown

Authored by Steve Watson via Modernity.news,

Democrats’ disdain for American priorities hit new lows during President Trump’s State of the Union, where many refused to stand for victims of illegal alien crime or even basic protections for citizens. Now, they’re doubling down with excuses that expose their true allegiances.

Building on their po-faced refusals to applaud pretty much any commons sense statement during the speech - as we detailed in our previous coverage - top Democrats are now openly trashing the address as ‘divisive’ while justifying their boycott.

According to reports, roughly half of House and Senate Democrats skipped the event altogether, opting for counter-rallies like this clown show:

Let's check in on the Dem counter event to Trump's SOTU… pic.twitter.com/5rBoH38bPz

— End Wokeness (@EndWokeness) February 25, 2026

There, they criticized Trump’s policies on immigration and the economy, accusing him of harming Americans through border security measures and cost reductions that have actually benefited working families.

Over 80 Democrats announced their boycott ahead of time, including high-profile figures like House Minority Whip Katherine Clark and Senators Chris Van Hollen and Adam Schiff. Instead of engaging with Trump’s message of renewal, they chose to rally against what they called his “unpopular agenda,” even as polls show broad support for securing the border and prioritizing citizens.

In the aftermath, Democrats unleashed a barrage of complaints that only highlighted their detachment from everyday Americans.

Debbie Wasserman Schultz called the speech “absolutely revolting,” specifically recoiling at the idea of prioritizing Americans over illegal aliens.

NEWSNATION: Why didn't you stand when President Trump said Congress should work for Americans?

DEBBIE WASSERMAN SCHULTZ: "The President tonight gave a speech that was absolutely revolting."

So it's "revolting" to Democrats to serve Americans above all else? pic.twitter.com/eBn6KgejM4

— RNC Research (@RNCResearch) February 25, 2026

Mark Kelly dismissed it as a “disappointment” that tried to “divide us as a nation,” despite his own refusal to stand when Trump called for putting American citizens first.

Democrat Mark Kelly says that Trump's speech was a "disappointment" that tried to "divide us as a nation."

This is coming from a Democrat who literally REFUSED to stand up when asked to put American citizens before illegal aliens.

Mark Kelly is the disappointment. pic.twitter.com/kwCuLaDnV1

— Libs of TikTok (@libsoftiktok) February 25, 2026

Suhas Subramanyam whined that Trump “tried to corner them” by asking Democrats to stand for American citizens—revealing just how controversial basic patriotism has become in their ranks.

Democrat Rep. Suhas Subramanyam says President Trump "tried to corner them" when he asked them to stand for American citizens.

Why is protecting American citizens so controversial for Democrats? pic.twitter.com/TNzX3qrckb

— RNC Research (@RNCResearch) February 25, 2026

Even more disturbing, Robin Kelly was caught laughing and mocking American heroes and veterans as they received medals from Trump. This kind of contempt for those who’ve sacrificed for the country is beyond sickening.

Democrat Rep. Robin Kelly laughs and mocks American heroes and veterans who received medals from Trump

Beyond sickening pic.twitter.com/fOZTamziB0

— Libs of TikTok (@libsoftiktok) February 25, 2026

CBS News, not exactly a bastion of conservatism, admitted Democrats buried themselves: “They can’t even applaud common sense things!” The contrast between American citizens and illegal aliens created a “visual moment” that exposed their priorities.

? IT'S OFFICIAL: Even FAKE NEWS CBS is sounding the alarm that Democrats BURIED themselves at the State of the Union

"They can't even applaud common sense THINGS!"

"Americans citizens vs illegal aliens created a VISUAL MOMENT."

Massive backfire! ??pic.twitter.com/n28zN2Eo0X

— Eric Daugherty (@EricLDaugh) February 25, 2026

Vice President JD Vance torched Democrats for their spineless performance, pointing out “‘The American government should stand for American citizens, not illegal aliens,’ that shouldn’t be controversial — but apparently, it was to the Democrats.”

.@VP: "'The American government should stand for American citizens, not illegal aliens,' that shouldn’t be controversial — but apparently, it was to the Democrats." pic.twitter.com/K6bPwNQu3O

— Rapid Response 47 (@RapidResponse47) February 25, 2026

Vance also highlighted their herd mentality: “Something that I saw that probably most TV viewers didn’t see was really the cowardice … They were all looking around for cues from their colleagues because they didn’t have the courage to stand on their own.”

.@VP: "Something that I saw that probably most TV viewers didn’t see was really the cowardice … They were all looking around for cues from their colleagues because they didn’t have the courage to stand on their own." https://t.co/tPGG70pf58 pic.twitter.com/kH6mcB1LFb

— Trump War Room (@TrumpWarRoom) February 25, 2026

On the heart-wrenching moment during the speech with a young girl previously assaulted by an illegal alien, Vance urged “Whatever your politics; whatever your views on immigration policy, can’t we all stand and clap for an innocent young girl who shouldn’t have been assaulted and was being held by her dad?”

“It was such a heartwarming moment. I think every American, Democrat or Republican, thought that was a great moment for our country,” Vance continued, adding “The only people who didn’t believe that apparently were the Congressional Democrats in that Chamber. I think it shows again how broken their party is.”

? JUST IN — JD VANCE DROPS TRUTH: "Democrats wouldn't stand for that innocent little girl ASSAULTED by an illegal alien, but managed to survive!" ?

"Whatever your politics, can't we all stand and clap for an innocent young girl who shouldn't have been assaulted?! Being held by… pic.twitter.com/jaXv56TiGM

— Eric Daugherty (@EricLDaugh) February 25, 2026

“Democrats wouldn’t stand for that innocent little girl ASSAULTED by an illegal alien, but managed to survive!” Vance stressed, further slamming them for not standing against child transitions without parental consent or for putting American citizens first.

Amid the Democratic meltdown, Senator John Fetterman emerged as the rare exception, admitting he stood and clapped for key moments while questioning his party’s behavior.

“Well, for me, you know, I never check to see what the rest of people in my party would stand up and clap for,” Fetterman stated, adding “I clapped with a lot of those things that it seemed like others. I stood up and clapped to recognize the family that lost their daughter, the Ukrainian girl stabbed to death in North Carolina. And I stood up and I clapped that political prisoner from Venezuela, how you can’t celebrate those kinds of things?”

“I also celebrated all the veterans that were in the audience as well, too,” Fetterman continued, adding “And even more the political things like Erika Kirk. I stood up and I clapped for her as well, too.”

“Can’t we just be more kind to a widow? We just shouldn’t be that long ago that a widow with young children has her husband murdered, how we can’t just acknowledge that as well, too,” he noted.

Senator Fetterman says he stood up and clapped for many moments during the State of the Union — Erika Kirk, Iryna Zarutska, all the military awards.

But he still can’t understand why the rest of his party didn’t.

FETTERMAN: “Well, for me, you know, I never check to see what the… pic.twitter.com/Exlex3Ryr2

— Overton (@overton_news) February 25, 2026

Fetterman’s willingness to applaud victims and heroes stands in stark contrast to his colleagues’ petty obstructionism, underscoring how far the Democratic Party has strayed from common decency.

This boycott and the excuses that followed aren’t just political theater—they’re a clear signal that Democrats would rather pander to open borders and globalist agendas than stand up for the American people. Trump’s address showcased real wins: secure borders, economic growth, and peace through strength. Yet Democrats chose division over unity, proving once again they’re the obstacle to making America great.

As midterms approach, voters won’t forget this display of anti-American pettiness. It’s time to hold them accountable.

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

Tyler Durden Wed, 02/25/2026 - 20:55

Trump Claims Iran Developing Missiles To Hit US, Contradicting Intel Reports

With nuclear talks hanging in the balance, and the potential for yet another US war of choice in the Middle East, President Donald Trump escalated the rhetoric Tuesday night, warning that Iran is moving beyond just regional missile capabilities and setting its sights farther west by developing missiles capable of hitting the United States.

During his State of the Union address Tuesday night, Trump claimed, "They've already developed missiles that can threaten Europe and our bases overseas, and they're working to build missiles that will soon reach the United States of America."

Getty Images

It seemed a transparent attempt to make the American people believe they are under direct threat from Tehran, in order to justify potential near-future strikes, however flimsy the case might be. So far Washington's main talking point has been that Iran simply can never have a nuclear weapon and so something has to be done - and this actually does resonate with some sectors of the American public.

But Tehran setting its sites on directly attacking the US homeland is a huge stretch, with no serious analyst so much as suggesting the Islamic Republic has the capability or is even close.

US intelligence assessments have been very conservative on this. For example, in 2025, the Defense Intelligence Agency (DIA) stated that Iran could potentially field a militarily viable intercontinental ballistic missile by 2035 "should Tehran decide to pursue the capability."

Given US intelligence also has not concluded that such a decision had been made, this means Iran is likely at least a decade away from even being close to possessing such an ultra long range missile.

The US mainland is some 6000 miles away from western Iran, and currently Iran's longest range missile is said to reach just under 1900 miles - a huge gap.

Iran's ballistic missile focus has always been developing with an eye on the country's number one nemesis in the region: Israel. 

There's a broad understanding even among the Western public that in reality Washington's anti-Iran stance has much more to do with defending Israel than the US homeland, which is clearly not under immediate threat from Tehran. There's not so much as been a terror attack carried out by a single Iranian Shia operative on American soil in all of history. 

Iran is willing to scale back uranium enrichment from 60% to roughly 3.6% and pause enrichment activities for seven years under a draft framework expected in Geneva, an Arab diplomat familiar with the proposal tells Kan News. Tehran opposes shipping hundreds of kilograms of…

— Faytuks Network (@FaytuksNetwork) February 25, 2026

So it seems the White House continues to be in search of a rationale and narrative to sell the public amid the major Pentagon build-up in the region. But polls by and large suggest most Americans still aren't buying it.

Tyler Durden Wed, 02/25/2026 - 20:30

Mexico's Sheinbaum Weighs Legal Action After Musk Alleges Cartel Ties

Authored by Tom Ozimek via The Epoch Times,

Mexican President Claudia Sheinbaum said she is considering legal action after tech billionaire Elon Musk alleged on social media that she was taking orders from drug cartels.

Speaking at a Feb. 24 news conference in Mexico City, Sheinbaum said government lawyers were reviewing the matter.

“We’re considering whether to take some legal action,” she said.

“The lawyers are looking into it, but what matters to me is what the people say, honestly.”

Musk’s allegation of Sheinbaum’s cartel subservience followed the capture and killing of Jalisco New Generation Cartel (JNGC) leader Nemesio Oseguera, known as “El Mencho,” by Mexican security forces.

In his post on X, Musk responded to a 2025 video of Sheinbaum discussing cartel violence and saying that returning to a war against the cartels is “not an option” because it would mean extrajudicial killings that are “outside the framework of the law.” She added that military force against the cartels would also be counterproductive because it would trigger retaliatory violence that would only “increase homicides in Mexico.”

Responding to those remarks, Musk alleged that she was “saying what her cartel bosses tell her to say.”

“Let’s just say that their punishment for disobedience is a little worse than a ‘performance improvement plan,’” Musk wrote.

He did not provide evidence to support his claims.

Sheinbaum could face difficulty suing Musk for defamation in the United States because of strong legal protections for free speech. To prevail, she would need to show that Musk knowingly made a false statement or acted with reckless disregard for the truth.

Tesla, Musk’s auto company, did not immediately respond to a request for comment.

Violence After El Mencho’s Killing

Musk’s comments came amid heightened tensions in Mexico following Oseguera’s death.

An uneasy calm appeared to be returning to parts of the country on Wednesday after the killing of the cartel leader triggered widespread reprisals. The violence paralyzed highways, grounded flights, and forced residents and tourists to shelter in place, particularly in Jalisco state.

Aerial view of burned vehicles over the La Desembocada bridge in Puerto Vallarta, Jalisco State, Mexico, on Feb. 24, 2026. Alfredo Estrella/AFP via Getty Images

Sheinbaum said at the Feb. 24 briefing that authorities were working to restore order after Sunday’s military operation in Tapalpa, Jalisco, left Oseguera dead following a shootout.

“Today there was no school, but tomorrow activities are expected to return to normal,” she said.

“In the Guadalajara airport, practically all flights have already resumed, and in Puerto Vallarta, little by little, things are returning to normal.”

Sheinbaum added that there were still “some” burned vehicles on the side of the road on Tuesday that would be removed later in the day.

Mexican President Claudia Sheinbaum pays tribute during the celebration of Flag Day in Mexico City on Feb. 24, 2026. Yuri Cortez/AFP via Getty Images

Mexico’s Security Cabinet said in a Feb. 24 post on X that affected states were experiencing “a gradual reopening of economic and educational activities, with progressive normalization of mobility and strategic operations,” according to a translation.

More than 50 people were reported killed in the operation and its aftermath, including members of Mexico’s National Guard. The White House said the United States provided intelligence support for the raid.

The CJNG, one of Mexico’s most powerful criminal organizations and a major trafficker of fentanyl and methamphetamine into the United States, responded to Oseguera’s death with coordinated attacks, including vehicle burnings and armed confrontations with security forces.

Sheinbaum also sought to reassure international visitors ahead of the 2026 FIFA World Cup, saying there was no risk to fans traveling to Mexico and that “all the guarantees” for safety were in place.

Trump’s Escalating Pressure

Musk’s criticism mirrors that of U.S. President Donald Trump, who has sharply escalated rhetoric against Mexican cartels and criticized Sheinbaum’s approach.

“The cartels are running Mexico. It’s very sad to watch and see what’s happened to that country,” Trump told Fox News’ Sean Hannity in a Jan. 8 interview.

“They’re killing 250,000, 300,000 in our country every single year.

“We knocked out 97 percent of the drugs coming in by water, and we are going to start now hitting land with regard with the cartels.”

Trump also warned that Mexico needs to “get its act together.”

“You have to do something with Mexico,” Trump told reporters in January. “We’re going to have to do something. We’d love Mexico to do it; they’re capable of doing it, but unfortunately, the cartels are very strong in Mexico.”

He has described Sheinbaum as “afraid” of the cartels and has suggested the United States could conduct military strikes on Mexican soil. His administration has intensified anti-cartel measures, including designating certain Mexican syndicates as terrorist organizations.

“Much more remains to be done by Mexico’s government to target cartel leadership, along with their clandestine drug labs, precursor chemical supply chains, and illicit finances,” Trump said in a presidential determination published by the U.S. State Department in September 2025. “Over the next year, the United States will expect to see additional, aggressive efforts by Mexico to hold cartel leaders accountable and disrupt the illicit networks engaged in drug production and trafficking.”

Sheinbaum has repeatedly rejected the prospect of unilateral U.S. intervention, saying it would violate Mexican sovereignty.

“We categorically reject intervention in the internal affairs of other countries,” Sheinbaum said during a news conference in early January. “The history of Latin America is clear and compelling: Intervention has never brought democracy, never generated well-being, nor lasting stability.”

White House press secretary Karoline Leavitt speaks during a press briefing at the White House in Washington on Feb. 10, 2026. Madalina Kilroy/The Epoch Times

The White House confirmed that the United States provided intelligence support for the operation to capture El Mencho and applauded Mexico’s army for taking down a man who was one of the most wanted criminals in both countries.

“The United States provided intelligence support to the Mexican government in order to assist with an operation in Talpalpa, Jalisco, Mexico, in which Nemesio ‘El Mencho’ Oseguera Cervantes, an infamous drug lord and leader within the Jalisco New Generation Cartel, was eliminated,” White House press secretary Karoline Leavitt said in a Feb 22 post on X.

Sheinbaum told reporters on Feb. 24 that she expects security to continue to normalize in Mexico following coordinated roadblocks and arson attacks by cartel members after the operation against Oseguera.

Tyler Durden Wed, 02/25/2026 - 20:05