Trump Directs DOJ To Seek Capital Punishment For Killers Of Police, Firefighters

Authored by Jill McLaughlin via The Epoch Times,

President Donald Trump told first responders on Oct. 15 that he was pushing the Department of Justice (DOJ) to seek capital punishment for murderers convicted of killing members of law enforcement or firefighters.

"We're bringing the death penalty back for anybody that kills a police officer, by the way, or anybody in law enforcement," Trump said at a White House Rose Garden luncheon honoring America's law enforcement and firefighters.

He said he directed the DOJ to pursue capital punishment for people convicted of killing a police officer, but also asked the department to add the punishment for anyone who murders a firefighter.

"They're on the ladder and they get shot at and nobody ever talks about that," Trump said. "You'll see - shootings will stop very quickly."

"America owes our first responders a debt it can never fully repay," he said. "But as president, I will always stand behind those who stand on the front lines of law enforcement, fighting fires, all of the things that you people do so courageously."

National Border Patrol Council President Paul Perez told the president that first responders have "never had the support or leadership from any administration that we have from you."

"And it's because of you that America is stronger, America is safer, and the border is totally secure because of you and your leadership," Perez said.

National Volunteer Fire Council Chairman Steve Hirsch presented the president with a fire helmet at the luncheon.

"While this helmet protects us in a fire or a wreck, we want it to protect you," Hirsch said. "We want God to wrap his protective arm around you and use this helmet - remember that we want you to be protected by our Lord."

The U.S. Fire Administration reported that 30 on-duty firefighters have been shot and killed by gunfire in the United States since 1990.

An average of about 50 officers are killed intentionally every year by firearms or other weapons, according to FBI statistics.

The federal government and U.S. military still allow death penalty sentencing, along with 27 states, while 23 states, as well as Washington, D.C., have abolished it.

Four states - California, Pennsylvania, Oregon, and Ohio - allow capital punishment but have placed an executive hold on death penalty cases.

Many U.S. states still consider murdering a law enforcement officer a capital offense with added circumstances. But in the four states that have a hold on executions, the death penalty cannot be applied.

Several organizations were represented Thursday, including the International Association of Fire Fighters, the Fraternal Order of Police, the National Sheriff's Association, the National Association of Police Organizations, the Federal Law Enforcement Officers Association, and the National Border Patrol Council.

Tyler Durden Fri, 10/16/2026 - 11:10

Apple's iPhone Duo Delivery Dates Slip To Late January As Preorders Swamp Launch Inventory

Apple's first foldable iPhone went up for preorder earlier this morning, with the earliest buyers securing delivery next Friday.

Shipping estimates quickly slipped into November, then December, with some iPhone Duo models now showing delivery dates as late as the end of January. The growing backlog suggests initial orders are outpacing available launch inventory.

Here's more from Apple blog MacRumors:

The first customers who preordered right when preorders began at 5 a.m. Pacific Time today will have their iPhone Duo delivered on launch day, Friday, October 23. By just 5:30 a.m. Pacific Time, though, Apple's online store in the U.S. was already showing a shipping date of January 25 for all iPhone Duo configurations.

• iPhone Duo / Star White / 256GB: January 25
• iPhone Duo / Star White / 512GB: January 25
• iPhone Duo / Star White / 1TB: January 25
• iPhone Duo / Star White / 2TB: January 25
• iPhone Duo / Night Sky / 256GB: January 25
• iPhone Duo / Night Sky / 512GB: January 25
• iPhone Duo / Night Sky / 1TB: January 25
• iPhone Duo / Night Sky / 2TB: January 25

Apple customers who were furious about the new delivery times took to X:

Within 5 minutes iPhone Duo Orders have slipped to Dec!! https://t.co/TPPvMz8B4H

— Rjey (@RjeyTech) October 16, 2026

Delivery dates for iPhone Duo are now 12/15 to 12/22 https://t.co/zKFyu4VhuM

— Ray Wong (@raywongy) October 16, 2026

Dang, Duo already backordered almost to February 2027 lol https://t.co/lRYTOyL6jh

— Christian Selig (@ChristianSelig) October 16, 2026

"Compared with the debut of the iPhone 18 Pro and Pro Max in September, which went smoothly for customers who placed a timely order, securing an iPhone Duo was significantly more difficult," Bloomberg reporter Chris Welch wrote.

With the first deliveries due next Friday and shipping estimates stretching into the end of January, scarce launch inventory could push resale prices on platforms such as eBay to double or triple the retail price. Whether buyers will pay those expected hefty resale prices, potentially as much as a fairly used 2008 Toyota Corolla, remains to be seen.

Demand outstripping launch inventory is great news for Apple's new CEO, John Ternus.

Tyler Durden Fri, 10/16/2026 - 10:55

Another Mass Shooter Stopped By Armed Citizen In Oregon

Three children and one adult are dead following an active shooter situation at Silver Rail Elementary in Bend, Oregon on Thursday afternoon. The suspected active shooter is also dead after an armed civilian chased the shooter into the school and killed him.

The shooter was reportedly a 16-year-old boy, though no details on identity or motive have been releases yet.  He was armed with a long gun; an anonymous law enforcement source told the Associated Press it was a pump-action shotgun purchased legally by his mother.     

Police responded to the school at about 12:59 p.m. after receiving a report that an unknown man had shot into a car.  Deschutes County 911 dispatchers received multiple calls reporting that someone had entered the school and started shooting.  By the time they arrived, the assailant was already dead.  

Unfortunately, three children (ages 5, 8, and 11) and one teacher were killed before the shooter was stopped.  A 7-year-old child and a 54-year-old teacher were also critically injured.  Both were transported to St. Charles Medical Center in Bend.

Victim names have not been officially released.  

While the identity of the shooter is still under wraps, commenters are already suggesting that the attack might be yet another case of a transgender lunatic on a rampage.  It should be noted that the state of Oregon has one of the highest rates of teens and children undergoing transgender treatments in the US.

If this is the case, then the incident may be buried by the establishment media.  It might also be sent down the memory hole because of the successful intervention of an armed citizen.  The narrative for decades within the media was that armed civilians rarely if ever stop violent crimes.  

The Crime Prevention Research Center (CPRC) has repeatedly examined the definitions used by the FBI to categorize civilian interventions in violent crimes, and they found significantly higher numbers of such cases than the FBI had reported.  In other words, the FBI was suppressing the actual data on civilians saving the day, often with their own firearms. 

One recent CPRC count identified 615 active shooter incidents from 2014–2025 and concluded armed citizens stopped 225 of them (about 36.6%). When limited to locations where civilians are legally allowed to carry (i.e., excluding gun-free zones), the rate rises to roughly 52–53% (and higher in some recent single-year examples). 

CPRC attributes the gap to the FBI missing or overlooking numerous incidents and occasionally misclassifying civilian interventions (for example, listing private armed citizens or volunteer church security as professional security guards). They argue their expanded list still uses the FBI’s core definition and that media coverage tends to under-emphasize successful civilian interventions.      

While gun control advocates often cite mass shootings as a reason for banning of weapons (or outright confiscation), these incidents account for only 2% of all gun deaths in the US on average.  The majority (around 60%) are suicides, and 35% are homicides.  

Around 20% of US counties account for 90% of all homicides in the country.  Of these counties, the vast majority are controlled by Democrats.  Among the worst 1% of US counties (about 31 counties, holding ~20% of the population and ~41% of murders in recent data), the CPRC lists political leanings as 21 Democratic strongholds, 6 leaning Democratic, and 4 swing or Republican-leaning.  

In other words, the counties with the most aggressive gun control advocates and laws in the US are also the places with the most gun violence.  Perhaps it's because law abiding citizens in these places are far less likely to carry, which emboldens criminals to commit more violence. 

Tyler Durden Fri, 10/16/2026 - 10:40

"Engineering Flex": Flying Tesla Roadster Wows Wall Street, But Production Waits Until 2028

Tesla shares rose 4% in early New York premarket trading after Thursday night's flying Roadster reveal delivered what HSBC analysts called an "engineering flex." However, for reservation holders who have been waiting years, the "Back to the Future"-style sports car that can perform midair barrel rolls using SpaceX air thrusters came with another dose of reality: production won't begin until 2028.

Real life, baby https://t.co/3QEqn18wig

— Tesla (@Tesla) October 16, 2026

HSBC senior global autos analyst Michael Tyndall wrote early Friday morning his first take on last night's Tesla Roadster reveal, saying it was "an engineering flex rather than a demonstration of earnings power; still some wait for first deliveries." 

Here's Tyndall first take:

Tesla revealed the Roadster at a SpaceX facility on 15 October, almost nine years after it started taking orders/deposits for the model in November 2017.

Financials - limited details

• No details on financial impact of the model (i.e. indication of potential units or pricing, other than reservation amount on Tesla's website). The model is said to go into production in 2028. Global Mobility's latest forecast (released 15 October) does not include any production estimates for this model.
• On Tesla's 1Q26 earnings call, CEO Musk had said that: "I don't think it [Roadster] moves the needle massively from a revenue standpoint, but it is very cool".
• Tesla has not disclosed how many total orders it has for the model so far since Nov-17. The Founders Series that required a USD250k deposit (limited to 1,000 units) was sold out (totalling USD250m in deposits) but there is no clarity on the orders for the Standard version for which Tesla collected USD50k deposits per unit.

Regulatory approvals - no clarity

InsideEVs (15 October) notes that during the reveal event CEO Musk was "cagey about whether it would actually be legal to drive on public roads". Tesla's reservation page for the model says:

• The base "Performance" version is "road ready"
• The Thrust augment (limited release) is "race ready" - so potentially cannot be used on public roads
• The Rocket augment is not approved for public road use and not available in all regions

Key questions

• How much of the technology will make it to the final vehicles? How much of it will pass type approval legislation?
• Is 2028 production time-line realistic? Given the novel nature of the technology are we likely to see further delays?
• Given the pivot away from human-driven cars, does this represent a worthwhile use of R&D expenditure?

Separately, JPMorgan analyst Rajat Gupta, who rates Tesla neutral, said the new Roadster's "rocket upgrade" showcases deep collaboration with SpaceX, though production remains years behind the original schedule.

"Production is targeted for 2028, compared with the original 2020 delivery target announced when the vehicle was first unveiled in 2017," Gupta said.

Notably, the flying Tesla Roadster appears to borrow technology from SpaceX, such as air thrusters, which supports the case that Tesla and SpaceX share not just materials but also engineering. 

Barclays senior autos analyst Dan Levy wrote Thursday about the prospects of a Tesla-SpaceX merger, in which he said:

The possibility of a Tesla/SpaceX merger has increasingly become the consensus expectation, as widely highlighted by media reports. Even Elon Musk has publicly alluded to a combination: On the most recent Tesla earnings call, Elon Musk pointed to "more and more overlap" between Tesla and SpaceX, and in an interview at the All-In Summit last month, he noted, "With all this collaboration, on so many levels, who can imagine what action one might take when there's so much close collaboration in so many areas."

Levy expects a merger announcement ahead of Tesla's annual general shareholder meeting in December 2026.

Watch Hagerty's Exclusive Video on The Roadster

* * *

Tyler Durden Fri, 10/16/2026 - 10:40

A Bumpy Ride

Via Rabobank,

Following the slightly hotter US CPI print on Wednesday – headline inflation was in line with expectations, but core accelerated a bit more than anticipated - producer price inflation accelerated significantly more than expected. Last month, US producer prices rose 1.3% m/m. Yet, rates were down on the day, not up.

Maybe traders found some comfort in the fact that most of the inflationary pressure remains concentrated in energy prices. Or, perhaps, the PPI print underscored the pressure on US producers. If they are unable to pass higher energy costs on to consumers, margins should come under pressure.

Yesterday’s retail sales suggest that energy prices may be eroding some consumer demand. Headline sales rose 0.8% on the month, but much of that increase was due to petrol sales – or, rather, prices. Excluding autos and gas, underlying sales printed a weaker-than-expected 0.1% m/m increase.

But more importantly, perhaps, are the recent wobbles in the AI trade. Rising rates were already complicating the funding required for the sector’s huge investment plans. And investors are perhaps getting apprehensive about the large sums that AI-related companies are asking for. Concerns about competition from China added to that mix this week, after CXMT claimed it has made a breakthrough in memory chip technology.

So, AI-related stocks have had a tough few days, CoreWeave’s bonds made headlines for not exactly the best reasons, and the FT writes that investor are “dumping data centre bonds” more broadly. With so much of economic growth currently riding on the AI boom, those wobbles were probably the main reason for the fall in Treasury yields: a flight to safety, and perhaps revised estimates of how strong demand and therefore growth and inflationary pressures will be going forward.

Despite these growing pains, Fed Chair Warsh remains an AI believer. At the IMF’s annual meeting, the Fed Chair repeated that investments in artificial intelligence are a huge benefit to the US economy. Even if the path is will be “very bumpy,” it will ultimately be “very good” for wealth in the US and other countries that adopt AI. This optimism, and the lack of any hints that the Fed may need to hike rates again in October, provide some support for equities today.

AI investors are not the only ones worried about Chinese competition. Trade data released this week suggest that China’s exports to Europe have risen sharply. That particularly relates to cars and AI-related electronics. The EU reached an agreement with China last week that would limit the export of hybrid cars into the bloc, and the European Commission may take further steps to protect its own industry.

Bloomberg reports that Brussels is scrutinizing trade data to detect surges in imports. That would be a first step towards new import quotas on goods being shipped from China or other countries. Bloomberg’s source notes that the EU will probably use the agreement it reached with China on hybrid vehicles as a blueprint for other sectors – which means that any new quota on sectors or goods would be set at a high-enough level to limit the risk of retaliation. Having said that, Beijing has already warned the EU against “new tricks” with respect to its trade policy.

The news fits with our conclusion that structural forces are pushing the EU and China towards greater confrontation on trade, as China’s economic reliance on exports clashes with Europe’s determination to protect strategic industries. However, as my colleagues note in their report, both China and the EU possess significant leverage in their bilateral trade relationship, even as their power rests on different foundations and operates over different time horizons. We therefore believe that a US-style conflict is less likely than a managed escalation that includes negotiations, de-risking, and selective retaliation.

The final estimate of the Eurozone HICP statistics confirmed that headline inflation ran at 3.8% in September, and that core inflation continues to run at 2.5% – keeping the ECB on track for additional tightening, but probably not until December.

The ECB’s Wunsh confirmed that the recent rise in longer-dated yields does not necessarily prevent some further rate hikes. The rise in long-term yields has tightened financial conditions, but Wunsh argues that it has had limited effect on Eurozone financing, which is shorter-term. While wage developments remain “benign,” the policymaker argues that the ECB cannot wait for visible second-round effects before acting.

Indeed, that would mean the central bank has fallen behind the curve, and policymakers will be wary of making a similar mistake as the previous energy shock. Yet, acting more forcefully before such evidence materializes would meaningfully increase the risk that the ECB errs on the side of too tight monetary policy.

Tyler Durden Fri, 10/16/2026 - 10:40

Mamdani Moves To Ban Horse Carriages From NYC, Drivers React

Authored by Nicholas Zifcak via The Epoch Times,

Mayor Zohran Mamdani has confirmed that he and the City Council speaker have agreed to phase out carriage horse rides in Central Park, a win for animal rights activists who have long opposed the rides.

The mayor said he would make sure workers and owners are protected as the rides wind down, with an end date of June 1, 2028.

"I think that we have a civic responsibility to ensure that we are not leaving anybody out to dry," Mamdani said at an unrelated press conference Oct. 14. The City Council announced it will vote on the bill ending carriage rides on Oct. 22.

The Transport Workers Union, which represents the carriage drivers, denounced the text of the bill as noncommittal, with "no meaningful economic relief for workers." The bill does not require the city to compensate the 68 owners for their city-issued license or medallion.

Mamdani said the city's plan will become more explicit and options are still being discussed. The mayor said he would make sure owners and workers won't be made to pay "for the sunsetting of an industry."

However, drivers say they feel they have been treated poorly, and that the City Council has no solid justification for the ban.

In a statement, the union denounced City Council Speaker Julie Menin for what it described as using "the tragic death of a tourist to contrive a public safety crisis."

On June 17, Romanch Mahajan, 18, a tourist visiting from India, was thrown from a carriage after the horse spooked and bolted during a ride with his family. Mahajan hit his head and died. After his death, Menin announced her support for the ban in a video on X.

Carriage horse drivers argue the issue is not public safety. Mahajan's death is the first in more than 160 years of horse-drawn carriages operating under the union in Central Park, compared to as many as 28 deaths related to bikes, e-bikes, and scooters on New York streets in 2026 alone. Menin and Mamdani have yet to set new safety measures on e-bikes and scooters.

Animal rights groups have long sought to end the carriage horses in Central Park, launching social media campaigns whenever there is a horse-related incident, such as the death of a carriage horse named Deniz on June 9 after he ate Japanese yew growing in the park.

Animal rights group New Yorkers for Clean, Livable, and Safe Streets (NYCLASS) reacted on X to the ban.

"For decades, NYCLASS fought to end cruel and dangerous horse carriages," it wrote. "It took the extraordinary courage, compassion, and unwavering leadership of Speaker Menin."

Drivers say that the horses are well-treated and that extensive city rules govern their feeding schedule, what time of day they can work, as well as the temperature range during which horses are not allowed to work (18 degrees or colder, 90 degrees or warmer). The city also mandates an eight-hour workday and five weeks of vacation time for the horses every year.

'No Way!'

Carriage license owner Ahmet Bilici, who trained as a veterinarian in Turkey before coming to the United States in 2001, became a carriage driver to support himself as he was learning English. The job stuck, and he's been a driver for 23 years. He said that if the City Council wanted to work with carriage drivers, drivers would be amenable, but that City Council just wants a ban.

"When you take this carriage from me, I am going to lose my quarter century! No way!" he said. "I trusted the city because the city licensed the medallion, and now you are shutting down? No way!"

Bilici said the ban will hurt 300 families if you count support staff, which includes stable workers, blacksmiths producing horseshoes, and craftsmen making saddles.

"This is my small business, my investment. It's like my house. You're burning my house!"

Bilici said that if the city shuts down the carriage rides, it must compensate drivers.

"There's no way we can accept this," he said.

Another driver, Danielle Slot, also said she was extremely disappointed. She thinks there is no solid justification for the ban.

"Our City Council is supposed to look out for people and represent people, and they're supposed to see through these things," said Slot, referring to the long-term campaign of NYCLASS head Steven Nislick to ban carriage horses, which dates to 2008.

Slot previously worked with horse-drawn carriages on Michigan's Mackinac Island, a 4-square-mile island in Lake Huron that never welcomed automobiles and still relies on horse-drawn carriages.

"I've just completely lost faith in the government here, which is very sad," said Slot. "It feels like they're capitalizing on sensationalism."

Slot said she voted for Mamdani.

She said City Council members are unaware of the realities of the equine industry, thinking as if a new home can easily be found for horses where they won't need to work. The proposed ban requires owners to make sure horses are not sold off to other carriage drivers out of state.

"It's a really nice thought that there would be some magical sanctuary. But it's just not realistic," said Slot, who added that caring for horses costs thousands of dollars a year. She said those on the City Council supporting the bill either don't know, or they don't care.

Slot moved to New York to work as an actor and is still pursuing her career in the performing arts. She said she came to New York in part "because this is a place where I feel like people are protected, people can be who they want to be," but she said her experience with the ban on horse-drawn carriages makes her feel the political system is compromised.

Tyler Durden Fri, 10/16/2026 - 10:10

Trump Unloads On Zelensky In Lengthy Interview Tirade: 'He's Not A Good Guy'

In a rarity, President Trump spent a good amount of time in a fresh Newsmax sit-down interview lambasting Ukraine's President Volodymyr Zelensky, a longtime Washington ally who has been the recipient of billions in US arms and funds.

At a moment Zelensky has resisted Trump's call to stop striking Russian oil refineries, Trump bashed the Ukrainian leader as "not a good guy for (the US) to deal with." Watch Trump put Zelensky on blast...

.@POTUS: "Zelensky is not a good guy for us to deal with... If they're going to end up with a settlement of some kind, they're not going to do it with him. He doesn't want to settle. He says he wants to settle, but he doesn't." https://t.co/jVbg0jRJg0

— Rapid Response 47 (@RapidResponse47) October 16, 2026

He lamented that the Ukrainian president does not want to help bring an end to the war, now it its fifth year.

"He says he wants to settle, but he doesn't. I'm not a big fan of Zelensky. They've destroyed that country," the US president said, ultimately laying blame the blame also on the prior Biden administration.

Trump said it is the Ukraine war - and not the Iran war which he started with his Operation Epic Fury - that is driving up global energy prices.

"Now, if you tell me that Zelensky is again shooting at refineries, all he's doing is making the world oil price higher," Trump stated.

"Well, I think that's a disgrace. There's plenty of other targets... There are a lot of targets that you can hit," the president continued.

Trump goes after Zelensky extensively in the interview, not holding back:

Trump: "I watched an interview of a young woman the other day from Ukraine. And she said, 'President Zelenskyy has destroyed our country. President Zelenskyy has taken our men away from us. Our men have no legs, no arms. Our men in many cases in mental institutions or they're dead.'"

— Aaron Rupar (@atrupar) October 16, 2026

"But when you shoot at diesel refineries where you make, you know, diesel oil and we need that and the world needs that, then he's not doing a good service for the world" - Trump said further of Zelensky.

The American president again went so far as to say it's time for a new Ukrainian leader, and that fresh elections must be held.

"I think you need an election because there's nobody that's telling me that the people of Ukraine are satisfied having missiles hitting their apartment building," Trump said.

Concerning the admitted ongoing difficulty of getting the two warring sides to the negotiating table, Trump described, "As you know, Putin hates Zelenskyy, and Zelensky hates Putin. And when you have that kind of hatred, it's very hard to get something settled."

Trump has engaged in plenty of prior public critiques of Zelensky, but again - it's unusual for him to sit down with a conservative outlet and offer lengthy commentary on how Zelensky is failing.

Show host Rob Finnerty looks briefly shocked when Trump bluntly says "I find Zelensky to be more difficult to deal with than Putin"...

Trump on Zelensky: I find Zelensky to be more difficult to deal with than Putin. https://t.co/7i8H2yDFHR

— Clash Report (@clashreport) October 16, 2026

This week there are signs that the US may be cutting back intelligence-sharing with Kiev, also amid Ukrainian outrage at the diesel deal with Putin announced last week. Ukraine has continued refinery strikes, also with Zelensky saying that Trump's prior proclaimed 'energy ceasefire' was "news to me".

* * *

Tyler Durden Fri, 10/16/2026 - 09:55

US Industrial Production Is Growing At The Fastest Pace In 4 Years As Manufacturing Rebounds

Amid hot inflation (CPI, PPI, Import/Export prices) and AI-infected growth scares, US Industrial Production data this morning added another twist, printing far better than expected as capacity utilization picked up further in September.

Headline Industrial Production rose 0.7% MoM in September (almost double the 0.5% MoM expected) with August's unchanged revised up to +0.1% MoM. That is the sixth straight month of gains for industrial production...

...lifting the annual increase in US industrial production to +2.25% - the highest since Sept 2022.

Utilities were the main driver: +3.5% in September (and a strong +14.8% annual rate in Q3) and Mining picked up.

US Manufacturing rebounded from August's dip (better than expected)...

Durable manufacturing was up only slightly as motor vehicles & parts fell 3.0%. Nondurables rose 0.4%, though semiconductors and related components were very strong.

Capacity Utilization also surprised to the upside (76.9% vs 76.5% exp).

That is the highest since Dec 2023 (but still 2.5 percentage points below its long-run (1972–2025) average).

Nevertheless, it was a clear beat on the side of growth (albeit uneven as autos lagged), driven largely by utilities, with manufacturing showing a modest rebound after prior softness.

Tyler Durden Fri, 10/16/2026 - 09:34

Rate Hike Odds Tumble After Warsh Does Not Address October FOMC Meeting

In our morning wrap we said that market sentiment was boosted overnight following Kevin Warsh's speech at the IMF meeting in Bangkok, specifically "The day's driver is Warsh (or rather what he didn't say): with the blackout starting Saturday, the Fed chair declined to push back on rate expectations and instead talked up a "massive investment surge" from AI."

Goldman set the context, with its chief economist Jan Hatzius writing in a note overnight that in comments at the IMF’s annual meetings, Fed Chairman Kevin Warsh did not specifically address the FOMC’s upcoming October meeting but said that “in the intermeeting period, the world has broadly conformed to our expectations [at the September meeting].” Hatzius adds that "alongside other recent comments from FOMC participants, Warsh’s comments indicate that the FOMC is set to pause in October. We continue to expect a second and final hike in December."

Below we excerpt the highlights from Goldman's note:

• In comments at the IMF’s annual meetings, Fed Chairman Kevin Warsh did not specifically address the FOMC’s upcoming October meeting but said that “in the intermeeting period, the world has broadly conformed to our expectations [at the September meeting].”
• In other recent comments from FOMC participants, Fed Vice Chair for Supervision Bowman said, “I don’t feel any urgency for taking further action at this point.” San Francisco Fed President Daly, speaking after the firmer than expected September CPI report, likewise said that she did not see an urgent need “to decide with a limited set of information.”
• Taken together, these comments indicate that the FOMC is set to pause in October. We continue to expect a second and final hike in December.
• In other comments during his fireside chat, Warsh highlighted that the US is experiencing “a massive investment surge” related to the AI buildout. He also noted that there has been a “synchronous tightening in monetary policy around the world” recently. 

Warsh's comments, or rather lack thereof, coupled with the market's interpretation that his lack of priming an October hike (which is hardly surprising for a Fed chair who has repeatedly refused to offer forward guidance) means one isn't coming, was enough to send October rate hike odds sharply lower, or 13%, less than half where they were before Warsh...

... even as odds of a December rate hike rose to new contract highs.

One possible reason for the market's near certainty that a rate hike is coming in the year's final FOMC meeting: the Bloomberg Economics Federal Reserve Sentiment Index continues to rise, now at its highest level since 2023

More in the full Goldman note available to pro subs.

Tyler Durden Fri, 10/16/2026 - 09:26

Bad Inflation Cures Itself. Good Inflation Doesn't

Authored by Lance Roberts via RealInvestmentAdvice.com,

Key Takeaways

• Inflation driven by supply shocks is "bad" inflation, and bad inflation is self-liquidating because rising income doesn't support it.
• September headline CPI ran 3.7% while core sat at 2.6%. The gap is gasoline, up 34.2% over the year and now more than half of the monthly increase.
• Real wages have turned negative, and labor's share of output just set its lowest reading since the series began in 1947.
• The 10-year breakeven sits near 2.3%. The market that gets paid to price inflation is not pricing an inflation problem.

Most of the argument about inflation right now is a fight between people using the same word for two completely different things. One side sees a 3.7% headline print and starts sketching a repeat of 1979. The other sees core running more than a point below it and declares the problem solved. Both are reading the same release. The distinction that matters is not how big the number is, but whether anybody's income is financing it. That is the line between "good" inflation and bad inflation, and almost nobody draws it.

Good Inflation, Bad Inflation, And The Difference Nobody Makes

There is a general framework to inflation, and it is older than any of us. Prices can rise because buyers are bidding for scarce goods with money they've actually earned. Or prices can rise because the cost of producing something has jumped for reasons unrelated to demand. An oil embargo will do it, as we saw in the 1970s. So does a shuttered Strait of Hormuz, a new tariff schedule, or a pandemic that takes half the world's shipping capacity offline for eighteen months.

This is an important point for the "debasement" crowd, whose narrative overlooks the underlying fundamentals.

"The following economic illustration is taught in every 'Econ 101' class. Unsurprisingly, inflation is the consequence if supply is restricted and demand increases via monetary interventions."

However, there is a very important distinction to be made about inflation. The first type is the "good" kind of inflation, and it is genuinely good. Demand pushes prices up; firms book wider margins; tight labor markets funnel those margins into paychecks, and the higher paychecks fund the higher prices. The loop closes and becomes self-reinforcing because every leg of it is paid for by real output.

The second kind, the "bad" kind of inflation, closes nothing. A tariff is a tax, just like an oil shock is a tax. Somebody's cost went up, and the money has to come out of a budget that did not grow. Every dollar of that price increase is a dollar not spent somewhere else. Bad inflation doesn't create the income that pays for it, so it destroys the demand that supports it. Such is the mechanism behind the oldest saying in commodities: "high prices cure high prices."

Think of it this way. A group of people drives the same way to work every day. Half get a raise, the other half doesn't. The city decides to put a toll booth on the road they drive to work; each year, that toll rises. Both groups have an increasing number draining their bank accounts each month. However, only one group has sufficient compensation to continue using the toll road. The group without the compensation raise is eventually forced to stop using the toll road; traffic falls, and the operator cuts the toll to win them back.

What The September Print Actually Says

Let's review the recent August data to see what the message, versus the narrative, actually is. The headline CPI came in at 3.7% year over year in September. Core came in at 2.6%, a tick higher than August. Read that pair again, because it is the whole argument. The gap between them widened from nine-tenths of a point to one and a tenth, meaning the headline accelerated roughly three times faster than the core.

That gap suggests a very different narrative than what the media suggests. Gasoline rose 9.1% in the month alone and 34.2% over the year, and the BLS attributes over half the entire monthly increase in the all-items index to that one category. Energy overall is up 20.4%. Meanwhile, core goods, where a genuine demand boom would show up first and loudest, rose 0.7% over twelve months, sitting exactly where it was in August. Shelter ticked up to 3.2%

Now the part I owe you, because I set a test in advance. Core ticked up, shelter ticked up, and services' less energy reached 3.1%, which would eventually prove me wrong. One month of tenths is noise rather than a trend. It is also the first month this year that those three moved the wrong way together, and core goods holding flat at 0.7% is why I am not moving yet, because that is where a demand boom announces itself first, and it has not.

Headline CPI pulled further away from core in September. The shaded area is the spread, and the spread is energy. Source: BLS via Massive Market Data, September 2026.

I've been making this argument since June, when I wrote about why the May 4.2% headline was an oil story rather than a demand story. To wit:

"A 4.2% headline that is three-fifths gasoline is not the same animal as a 4.2% headline driven by wages, rents, and services broadening."

Four months later, the composition has not changed. What has changed is that the evidence against the demand-pull story got considerably stronger.

Labor Just Set A 79-Year Low

The most important evidence comes from the labor market. If this were the "good" kind of inflation, workers would be capturing some of it. They are not.

Real average hourly earnings fell 0.7% over the twelve months through September, more than double the August decline. Nominal wages rose 0.1% on the month against a 0.6% CPI print, so purchasing power went backward at the fastest pace of the year. Run the same calculation off average hourly earnings and CPI, and you land in the same place. Real wage growth is near -0.7%, down from over 1.5% as recently as last spring.

In April 2026, real wage growth crossed below zero and hit its weakest reading in September. The gold bars represent the months when wages grew faster than prices. The red bars are months when they didn't. Source: BLS via Massive Market Data, August 2026.

Then there is the one number that everyone simply overlooked. In the second quarter, labor's share of nonfarm business output fell to 52.8%. The Bureau of Labor Statistics flagged that as the lowest level in a series that begins in the first quarter of 1947. Read that again. There have been 79 years of data, 2 dozen business cycles, 4 major wars, the Volcker shock, the China trade shock, and the pandemic. Despite all that, in what is supposed to be an economic boom, we just set a record low.

Labor's share of nonfarm business output in Q2 2026, the lowest reading since the series began in 1947.

Labor's share of output has been falling for a quarter century and just made a series low. Good inflation requires this line to rise. Source: BLS, Productivity and Costs, Q2 2026.

Stop and notice that in the chart above, this is not a 2026 event. The erosion in labor runs back to the early 2000s, long before "artificial intelligence" or "surging debt." The last two years have simply accelerated the numbers. With respect to the inflation question, the timing matters most. A price level that is rising while labor's slice of output hits an all-time low is the textbook signature of cost pass-through rather than demand-pull. In this environment, corporations are fixated on protecting profit margins, while workers are absorbing the difference.

The economic activity surveys tell the same story if you take the time to read past the headlines. The ISM services printed 54.9 in September, with new orders easing to 59.8. That reads like a demand boom until you see prices paid at 74.0, the highest since July 2022, against an employment index that has not managed to exceed 50.1 in three months. Steady orders, hot input costs, flat payrolls. When respondents were asked what was driving those costs, fuel came up about twice as often as anything else.

Where The Inflation Bulls Have A Point

As always, we need to examine both sides of every argument, as the inflation bulls do have a valid point.

The strongest one is the AI buildout. Memory is genuinely scarce; its scarcity is genuinely caused by capital spending, and the producer price index for storage devices has climbed 23% since the end of 2024, while import prices for computers and parts are up 37%. J.P. Morgan's research team puts the memory shock at 0.2% to 0.4% on core inflation. That is capex-driven price pressure; it is real, and it did not come from an embargo. However, that scarcity will eventually reverse. As with oil prices, high prices eventually curtail demand.

The second argument is that tariffs are a policy choice, not a weather event. That is a true statement, and a tariff regime that stays in place for years produces a price level that stays elevated for years. Calling that "transitory" is a semantic trick. I can't argue with that. A permanent tax produces a permanent price. However, the current tariffs were not enacted by Congressional legislation, which would make them more permanent. In this case, they were enacted through executive order, which means the next Administration can repeal them quickly.

The third is that energy is not reliably mean-reverting on any schedule you can trade. Geopolitics doesn't run on a calendar. However, high oil prices, as shown in the chart below, reliably mean-revert over time.

Those are all sound and valid arguments, but there is a problem with all three, though. Every one of them describes a SUPPLY constraint. A memory shortage is, by definition, a shortage. Call the tariff what it is: a tax. And the Middle East risk is a supply risk. None of them creates the income that pays the higher price. All three fail the same test: gasoline fails, and a more flattering story doesn't change what the bill does to a household budget.

Why Bad Inflation Cures Itself

"Inflation is inflation. My grocery bill doesn't care about the taxonomy."

That is a fair statement. The pain from inflation is the same either way, and when you are staring at the number on the gas pump, the squeeze on household budgets happens regardless. Just because it happens to be the academically preferable kind, the household budget just doesn't care. However, the taxonomy isn't about how it feels, but how it ends, and bad inflation ends in a way the good kind never does.

Every major energy spike since 1971 has reversed within one to two years. The 2008 spike gave way to a 25% collapse. The 2022 spike gave way to a 17% collapse. Source: BLS, CPI energy index via FRED, through September 2026.

Notably, look at what happens after every spike on that chart. In June 2008, energy jumped by more than 24%, then subsequently fell by 25% over the following year. In June 2022, energy surged by 41.5%, then only to fall by 16.6% by 2023. Every period from the 1974 and 1980 shocks, the 2000 run, and the 2015 collapse is the same. The pattern repeats itself because it has to, since "demand destruction" is not an economic theory; it's just arithmetic. The current reading of roughly 20% sits well inside the range that has always reverted.

Such is why the bond market refuses to panic. The 10-year breakeven inflation rate is 2.33% as of October 13, and the September monthly average was 2.36%. That number has barely moved all year, holding a range of roughly 2.24% to 2.44% while headline CPI swung from 2.4% up to 4.2% and back to 3.7%. The one market that gets paid to be right about inflation looked at an 180-basis-point headline swing and didn't blink. It then watched September print three-tenths hotter and tick down.

Critically, this is where the case from the "Persistent Purveyors Of Doom" gets confused with itself. Yes, bond yields are elevated, and the bears point at that as vindication for their case. The 10-year sits near 5.1% and the 30-year above 5.55%. But if you decompose it, the rise is due to real yield and the term premium, not inflation expectations, because expectations have been pinned near 2.3% for 18 months. Since early September, the long bond has added about 30 basis points, while the breakeven has given up 3. The bears are right that the long end is repricing. They just have the wrong reason.

Five tests, and five answers pointing in the same direction, which all bring to mind a rule to live by.

"When every strategist on television agrees that inflation is structural and yields only go up, the setup is usually pointed the other way."

What This Means For Portfolios

Will bad inflation cure itself on a schedule you can put in a calendar? No. Demand destruction takes quarters, not weeks, and an energy shock can persist long enough to cause real damage as it resolves. Such is the frustration of running a process that works in quarters for clients who measure in weeks. But will it resolve without the Fed having to break something? On this evidence, probably yes, and that is a very different portfolio than the one the inflation-forever crowd is selling.

It argues for duration, which is the position I laid out in my discussion about wage growth as a leading inflation indicator. Since then, the real wage data has reinforced that positioning. Investors who bought commodity-linked exposure as an inflation hedge may have the wrong trade. The reason is that commodities would hedge the one kind of inflation that has historically unwound. However, quality equities with pricing power beat the debt-heavy cyclicals that need a nominal boom to work. Most notably, watch the labor data rather than the CPI headline. Labor is where the answer lives.

In the current environment, as laid out in the "Druckenmiller Warning," an effective bond sleeve would look something like this.

Here is what would change my mind, stated plainly so you can hold me to it. If core services excluding shelter reaccelerate, if the Employment Cost Index turns up, if real hourly earnings cross back above zero, and the quits rate rises, then the wage loop is closing, and this inflation became the durable kind while I was arguing it wasn't. Watch those four. I'd rather be corrected by data than by a client's statement.

The thing to fear was never that prices would keep climbing. It's that they'll stop climbing because nobody can afford them anymore, and labor's share of output has been telling us for twenty-five years exactly which of those two we're heading toward.

Tyler Durden Fri, 10/16/2026 - 09:20

The post Trumpflation Is Here! appeared first on CEPR.

Federal Judge Tosses Ex-CIA Chief Brennan's 'Speculative' Lawsuit Against Trump Admin

Authored by Debra Heine via American Greatness,

A federal judge on Thursday threw out former CIA Director John Brennan's lawsuit, which sought to compel the Trump administration to preserve records for his defense against potential criminal charges, ruling that he lacked standing.

The Department of Justice is investigating claims that Brennan and other national security officials conspired to undermine President Donald Trump.

The suit, filed in July 2026, sought to compel the Justice Department to retain investigative records so Brennan could prove any indictment against him was the result of vindictive or selective prosecution by the Trump administration.

Judge Jia Cobb, a Clinton-appointed judge, described Brennan's allegations of political targeting as "deeply concerning," but determined the claimed injury was "speculative" and not yet imminent, as no indictment has been filed.

Brennan was President Barack Obama's CIA director from March 2013 to January 2017, and before that, Obama's counterterrorism adviser.

He is facing indictment in at least two investigations: the broader "grand conspiracy" probe into the 2016 election interference inquiry and a separate case regarding alleged false statements made to Congress in 2023.

Prosecutors in the Southern District of Florida are examining allegations that Obama and Biden-era intelligence and law enforcement officials conspired to deprive President Trump of his civil rights through various investigations, from the 2016 Russia probe and the intelligence community assessment to the Mar-a-Lago classified documents case and related matters.

According to the Republican-led House Judiciary Committee, Brennan "made numerous willfully and intentionally false statements of material fact" during his testimony in 2023, including:

• Falsely denying that the CIA relied on the discredited Steele dossier in drafting the post-2016 election Intelligence Community Assessment; and

• Falsely testifying when he told the Committee that the CIA opposed including the Steele dossier in the Intelligence Community Assessment (ICA).

• These statements were contradicted by the record established by the House Permanent Select Committee on Intelligence (HPSCI) and the CIA, the committee stated in a press release in October 2025.

Newly declassified documents show:

• A CIA officer drafted the annex containing a summary of the dossier;

• Brennan made the ultimate decision, along with then-FBI Director James Comey, to include information from the dossier in the ICA; and

• Brennan overruled senior CIA officers who objected to the inclusion of the dossier material.

The former CIA director argued in his lawsuit that because he planned to contest any prosecution that arises from the DOJ's probes as vindictive and selective, internal records and communications would be needed to establish that in court.

Brennan alleged that President Trump had singled him out in retaliation for his role in the Russian collusion hoax.

Cobb appeared to that aspect of Brennan's case seriously, saying that "if he was eventually able to prove those allegations true, that would certainly suggest that his potential prosecution is vindictive."

But at this point, the judge said it remains to be seen that Brennan is facing enough harm to bring the lawsuit.

"Even taking all of Brennan's allegations to be truthful at this stage," the judge wrote, "the injury he alleges is simply too attenuated from the actions he seeks to enjoin to warrant a finding of standing here."

Tyler Durden Fri, 10/16/2026 - 08:35

Futures Rise As Warsh Stays Mum, Tesla "Flying Car" Interrupts AI Liquidation

US futures are higher, and small caps are leading, as the crowded-trade unwind that hammered chips, momentum and AI baskets all week takes a breather: Fed Chair Kevin Warsh said nothing about rates at the IMF gathering in Bangkok overnight (traders took the silence as a dovish gift, cutting October hike odds to 14% from 26%), Tesla jumped 5% after Musk unveiled his "flying" Roadster, and oil slipped after Trump said Iran had asked for a halt to US attacks but then it rebounded when the market realized Trump is just lying; as a result haven demand faded and the global bond rally stalled, with 10Y yields rising 6bps to 5.12%. As of 8:00am ET, S&P futures are 0.1% higher at 7,800, Nasdaq futures are down -0.2% and Dow futures are -0.2%; Russell 2000 contracts are up 0.5%. Yesterday the S&P rose 0.3% and closed within 1% of its record high after Jensen Huang rode to CoreWeave's rescue, even as the SOX fell for a 7th straight day and the Nasdaq barely eked out a gain. Premarket, all Mag 7 names except Amazon are higher led by Tesla, while CoreWeave (-3.9%), Strategy (-2.9%) and Netflix (-2.5%) lag and the AI baskets (semis and memory) remain in the red per JPM. The day's driver is Warsh (or rather what he didn't say): with the blackout starting Saturday, the Fed chair declined to push back on rate expectations and instead talked up a "massive investment surge" from AI. In rates, Treasuries slide with a mild bear steepening (2s flat, 10s +4bps, 30s +3bps per JPM) as the rebound in global stocks clips the haven bid; bunds and gilts are also lower by about 15 ticks with UK banks in focus after reports Chancellor Healey will raise their taxes. In FX, the Bloomberg Dollar Spot Index drops 0.4%, down a second day, with the kiwi and Aussie leading G10 and the euro set to end a five-week losing run. In commodities, WTI is down 1% near $97 and Brent trades around $105 but is still headed for a second weekly gain; gold is up 0.3% at $4,184, silver gains 0.8% and copper rises 1% in London. Crypto is mixed: Bitcoin is little changed around $82,000 while Ether bounces. US economic data slate includes September import/export prices (8:30am), industrial production and capacity utilization (9:15am), the federal budget balance (2pm) and August TIC flows (4pm); Fed speaker slate includes Goolsbee on Bloomberg TV at 6pm, the last word before the blackout. There are no coupon auctions, but Treasury's primary dealer questionnaire (noon ET) ahead of the Nov. 4 refunding is worth watching.

In premarket trading, Magnificent Seven stocks are mostly higher: Tesla rises 3.6% after the EV maker unveiled its long-delayed Roadster sports car (Meta Platforms (META) +0.5%, Microsoft (MSFT) +0.5%, Alphabet (GOOGL) +0.3%, Amazon (AMZN) +0.3%, Apple (AAPL) +0.3%, Nvidia (NVDA) -0.1%)

• Fox Corp. (FOXA) gains 3.9% after BofA upgraded the media company by two notches, to buy from underperform, citing Fox’s deal to buy Roku.
• Mobileye Global (MBLY) climbs 4% as Citi starts coverage on the maker of software and hardware technology for automobiles with a buy rating, expecting the company to benefit from growth in autonomous driving technology.
• Semtech Corp. (SMTC) rises 4.4% after Northland Securities upgraded the company to outperform from market perform, a move that comes in the wake of its analyst day event, where it raised its third-quarter forecast.
• Omeros (OMER) is down 4.1% after the drug developer said an advisory committee of the European Medicines Agency issued a negative opinion on the company’s application for its narsoplimab therapy.
• Travelers (TRV) drops 4.6% after the insurance company reported net premiums written for the third quarter that met the average analyst estimate. Revenue declined modestly year on year, while catastrophe losses rose.
• Truist Financial (TFC) falls 2.1% after the financial services company reported third quarter taxable equivalent net interest income that came in just short of expectations.
• Wise (WSE) falls 2.3% after the payments firm reported cross-border volumes that missed analyst expectations.
  Zeta Global (ZETA) is up 4.6% after Goldman Sachs upgraded the software company to buy from neutral, seeing potential for it to gain market share.

In other corporate news, Tesla unveiled its long-delayed new Roadster sports car (yes, the one that "flies": Newsquawk reports it uses thrusters to land after a ramp jump, does 0-60mph in under a second and enters production in 2028), sending shares of its Chinese suppliers Ningbo Xusheng, Wencan Group and Ningbo Joyson Electronic up 10% each. Thoma Bravo-backed Proofpoint agreed to buy cybersecurity company Varonis Systems for about $6.3 billion, prompting six brokers to cut Varonis to hold-equivalent. Some Anthropic investors discussed a more tempered $1.5 trillion valuation on the back of slowing revenue growth, according to Reuters, confirming our article from yesterday. Netflix is replacing its chief creative officer with veteran TV and film executive Peter Rice, Meta made one of its new AI models available for developers to download and modify, Mercedes-Benz and Nvidia extended their automated driving partnership, and City Therapeutics raised $200 million in a US IPO priced at the mid-point of its range. Meanwhile, three CoreWeave co-founders have sold $3.3 billion in shares since last year's IPO, which may explain why they look so relaxed.

After a brutal few sessions for crowded pockets of the market, including chips, momentum stocks and popular thematic baskets, futures point to a mild recovery in the final trading day of the week, Bloomberg's Before the Bell notes. Europe is on track for its biggest weekly outperformance over the S&P 500 since March as investors rotate out of the AI trade, and Asian stocks rebounded as dip buyers returned to chipmakers after a four-day selloff. The relief comes after quants suffered their worst day since August and hedge funds dumped AI stocks at the second fastest pace in a year.

The overnight catalyst was Warsh, and the most important thing was what he didn't say. With the Fed about to enter its blackout ahead of the Oct 27-28 FOMC, the Chair declined to push back on market pricing despite this week's hot CPI and PPI, saying only that since September "the world has broadly conformed to our expectations." Goldman's economists read this as a signal that the FOMC is set to pause in October, while still expecting a second and final hike in December. That is the punchline even though Bloomberg Economics' Fed Sentiment Index, which tracks the tone of Fed communications, continues to rise and is now at its most hawkish level since 2023 after Daly and Hammack warned about overlapping, long-lived supply shocks.

Then there is CoreWeave, which has become ground zero in a tug of war between investors who see rising bond yields as a potential rally killer for the AI trade and those who think compute demand will outweigh such concerns. As DB's Jim Reid recaps, CoreWeave's 5Y CDS initially widened another 76bps to 1194bps, its widest level yet, before ending 30bps tighter at 1086bps once Jensen Huang declared that "CoreWeave's strength is improving every day" (we discussed the credit fallout here and here). The stock is down another 3.9% premarket.

“Today’s rebound is partly a relief rally,” said Billy Leung, an investment strategist at Global X Management. “I’d be cautious about extrapolating today into a straight-line recovery. The fundamental AI/semiconductor story in Asia remains strong, but oil and US yields remain important constraints, so the market probably stays volatile and increasingly earnings-driven.”

The flow data shows a variety of trends: cumulative flows into tech funds are tracking a record year, according to BofA citing EPFR data, and leveraged ETF AUM is off its highs but still elevated, while the long-dated Treasury ETF has seen consecutive $1 billion outflows for the first time ever. And for those worried about narrow leadership, Bloomberg's historical analysis suggests thinner, leader-driven advances have often been followed by gains, particularly over the subsequent six to 12 months.

JPM's Market Intel desk under Andrew Tyler stays Tactically Bullish and sees "stabilization in price action" with RTY leading. The team argues that this week's price action looks more like rotation than broad-based deterioration, flagging the resilience of the equal-weight S&P, and expects the rotation to slow rather than end abruptly; it remains focused on selective dip-buying, likes Financials after generally positive large-cap bank earnings, and says all eyes are on next week's META earnings and Nvidia's GTC event. JPM's ETF desk (Jonathan Rogerson) notes the retail dip-buying impulse is "in full force": SOXL has taken in $3.2 billion over two sessions (16% of AUM created), while heavy supply in Ethereum ETFs carries "a strong scent of profit-taking."

Over at Goldman, Delta One head Rich Privorotsky calls the Asian bounce "a little lackluster relative to the scale of the selloff" and warns that "the problem remains oil, which is stubbornly high." He adds that "rates are finally beginning to reflect the same AI capex growth shock that equities have spent the week repricing." Sean Vogel's flows and positioning note puts it more bluntly: "In hindsight, the pain trade was long AI/ short bonds. Now we're watching both sides unwind." The data back that up: GS Prime's AI long/short ratio has fallen to 3.27 from a 4.34 peak (7th percentile over the past year), and NDX forward P/E is down to about 21x, the lowest since the AI cycle began in 2023. Sam Dunn on the US desk sums it up: "The AI trade is still long but now a 6 out 10 in terms of length and much cleaner than it was in Jun/July."

Elsewhere, China proposed adding advanced AI technologies to its export-control list, potentially restricting overseas transfers of AI models and chips, while Taiwan will curb AI chip exports to China as part of its US trade deal, and Beijing moved to prop up its own stock market by urging companies and state funds to buy shares while guiding some investors to curb selling. In the Gulf, CENTCOM confirmed that a container ship that sank in the Strait of Hormuz this week was struck by an Iranian projectile, Iran's navy said a "violating" tanker caught fire in a restricted zone east of Hormuz, and Trump declined to rule out using the "Mother of all Bombs" on Iran after the midterms, even as he said Tehran had asked for a halt to US attacks.

In Europe, the Stoxx 600 rises 0.6% to 643.72 with 471 members up and 122 down, heading for a third day of gains; media and autos are the best performing sectors while health care is the only one in the red. The DAX leads with a 0.9% gain and cyclicals do the heavy lifting, while the FTSE 100 lags as UK banks slide after Bloomberg reported Chancellor Healey will raise taxes on banks (the Guardian says via a 3% increase to the bank surcharge): Lloyds is down 2.3% (also cut at RBC) and NatWest 2.1%, while HSBC and Barclays are little moved. JPM's desk says Defense, Renewables, Software and Momentum Short are among the best performing baskets. Here are the biggest European movers:

• Nestle shares rise as much as 1.5% after JPMorgan upgrades the stock to overweight, saying FY27 could be a “vintage year” for the consumer goods company.
• Aixtron shares rise as much as 10% after the chip-equipment maker reported preliminary orders well above analyst expectations.
• Nordex shares rise as much as 15% after the wind turbine manufacturer posted third-quarter earnings that smashed expectations and raised its margin goal for the full year.
• Verbio shares rise as much as 11% as Jefferies upgrades the German biofuels manufacturer to buy from hold, saying the company is increasingly attractive now that its investment phase is largely behind it.
• Brunello Cucinelli shares rose as much as 6.2% after the Italian luxury firm reported third-quarter earnings that beat expectations and raised its growth guidance for the year.
• Man Group shares gain as much as 3.3% after the UK investment firm reported stronger-than-expected inflows for the third quarter, with growth across both alternative and long-only strategies.
• Avanza shares declined 5.3% after the lender reported operating income for the third quarter that missed the average analyst estimate.
• Wise shares drop as much as 2.7% after the payments firm reported cross-border volumes that missed analyst expectations.
• Lloyds Banking Group shares fall as much as 2.7% after RBC Capital Markets downgraded the UK lender to sector-perform from outperform, noting that competition in the regional deposit market threatens to erode the benefits of its structural hedge.

Asian stocks rebounded, led by chipmakers after a four-day selloff on concerns over the AI boom, with the MSCI Asia Pacific Index jumping as much as 1.8% (Samsung, SK Hynix, BHP and Alibaba the biggest contributors), though the gauge was still on track for its worst weekly loss in more than three months. Japan's Topix and Nikkei both rose 1.9%, the Hang Seng gained 1.2% and the CSI 300 0.8% as state-backed buying returned with a record 18.8 billion yuan inflow into the E Fund CSI 300 ETF on Thursday, Taiwan's Taiex added 0.7% and the ASX 200 1.1%. Korea's Kospi, which tumbled nearly 8% on Thursday, climbed as much as ~4% and closed 2% higher at 5,668. TSMC slipped despite better-than-expected results and a strong outlook, a sign that tech sentiment remains fragile. The outlier was Indonesia, where the JCI plunged 11%, the most since January 1998, after MSCI proposed reclassifying the country from emerging-market to standalone-market status; Goldman's GIR estimates outflows of $5.0 billion to $7.8 billion depending on the scenario, and IndoGBs sold off 30bps. Goldman's Asia desk (Enna Hattori) dubbed it a "soft bounce", with flows finishing only 1.2x better to sell, and cautioned that the market "will require some fundamental reassurance before being able to regain MTD losses."

In FX, the Bloomberg Dollar Spot Index is down 0.4%, falling a second day, as traders pare bets on an October Fed hike after Warsh steered clear of any policy signals. Risk-sensitive currencies lead G10, with NZD/USD up 0.9% and AUD/USD up 0.6%; the euro rises 0.2% to around 1.1245 and is set to end a five-week losing run (ING's Francesco Pesole sees it largely confined to a 1.10-1.15 range in the coming months), and the pound hit a three-week high of 1.3337 despite the bank tax story. The yen is flat around 157.9 per dollar. In EM, Bank Indonesia intervened to support the rupiah as the MSCI shock fuels bets on a rate hike, a few days after Asian central banks dumped dollars to defend their tech currencies.

In rates, Treasuries slide, led by the long end, as the rebound in global stocks reduces the appeal of haven assets and Warsh's comments did little to alter the rate outlook; 10-year yields are up 5bps at 5.11%, with 2s little changed and the curve bear steepening, unwinding part of Thursday's 12.7bp bull flattening rally which came in spite of a PPI print that was the hottest since March 2022 (because when AI capex gets wobbly, inflation apparently stops mattering). Money markets now price a 14% chance of an October hike, down from 26% earlier. European bonds are also weaker, with bunds and gilts down about 15 ticks; gilt traders are looking for clues on how Chancellor Healey will balance spending and revenue ahead of the Oct. 28 Budget, with a bank tax the latest idea. There are no coupon auctions today, but at noon ET Treasury releases its primary dealer questionnaire ahead of the Nov. 4 refunding, and some on the Street expect 20Y and 30Y auction sizes to be cut by $3 billion each (with speculation the 20Y could be cut altogether).

The short-lived nature of the Treasury rally suggests that the safe-haven status of US bonds is continuing to wane, said Steven Barrow, head of G10 strategy at Standard Bank.

In commodities, crude is on the back foot, with WTI Dec'26 down 1.2% near the bottom of a $95.29-96.39 range and Brent Dec'26 down 0.8% within $104.91-105.94, after Trump said Iran had asked for a halt to US attacks and that negotiations are ongoing; the IEA also said member countries agreed to complete the release of 100 million barrels still outstanding from the March intervention. Even so, oil is set for a second weekly advance as mounting Middle East supply risks outweigh the reserve release: Iran's navy said a "violating" tanker caught fire east of Hormuz, Saudi Arabia and the Houthis continue to trade strikes, and Ukraine has resumed attacks on Russian refineries. Spot gold trades in a $4,147-4,189 range and eyes its 21-DMA near $4,200, silver is up 0.8% at $57.82, and LME copper gains 1% toward $14,500/t as sentiment improves.

US economic data slate includes September import/export prices (8:30am), industrial production and capacity utilization (9:15am), the federal budget balance (2pm) and August TIC flows (4pm). Fed speaker slate includes Goolsbee on Bloomberg TV (6pm) ahead of the communications blackout that begins Saturday. Travelers, Truist, M&T Bank, Citizens Financial and Regions report before the open.

Market Snapshot

Top Overnight News

• Federal Reserve chair Kevin Warsh has signaled that hotter-than-anticipated inflation has not swayed his views on the US economy, prompting traders to further scale back bets on a rate rise this month. FT
• Goldman economists say Warsh’s comments indicate the FOMC is set to pause in October; they continue to expect a second and final hike in December. GIR
• President Donald Trump said he would not use nuclear weapons against Iran, telling Newsmax that the U.S. “doesn’t have to.” Trump also said he did not foresee sending U.S. ground troops into Iran. CNBC
• Iran’s Navy identified a “violating” oil tanker “a few hours ago” that caught fire in a restricted zone east of the Strait of Hormuz, state-run IRIB News reports; the tanker had turned off its tracking systems. BBG
• US Central Command confirmed that a container ship that sank in the Strait of Hormuz this week was struck by an Iranian projectile; Trump declined to rule out using the “Mother of all Bombs” on Iran after the midterms. BBG
• The US is considering moves to ease restrictions on “shadow fleet” tankers linked to Russia and Iran as it struggles to bring down soaring diesel prices ahead of November’s midterm elections. FT
• The International Energy Agency said member countries agreed to complete the release of 100 million barrels of oil still outstanding from an intervention in March. BBG
• China moved to stabilize its equity market by urging companies and state funds to buy shares while guiding some investors to curb selling, people familiar with the matter said. Financial regulators held a meeting Thursday to discuss stabilization measures for the stock market. BBG
• Taiwan is preparing to tighten export controls on AI chips to further align with US restrictions, according to a senior official in Taipei, joining a Trump administration clampdown on the smuggling of cutting-edge semiconductors to China. BBG
• China proposed adding advanced AI technologies to its export-control list, potentially restricting overseas transfers of AI models and chips. BBG
• Indonesian stocks suffered their worst rout in nearly three decades after MSCI warned the country’s emerging-market status is at risk, stoking fears of removal from global indexes and foreign capital flight. BBG
• Ukraine's resumption of strikes on Russian refineries is a 'disgrace' that keeps global energy prices elevated, US President Donald Trump said. Ukraine struck a Russian oil refinery after President Volodymyr Zelenskiy declared that Kyiv was abandoning a ceasefire covering energy sites that Trump had announced, and criticized his willingness to strike deals with Moscow. RTRS
• Progress toward a U.S.-Mexico tariff deal has stalled after opposition from Commerce Secretary Howard Lutnick, people familiar with the talks said, the second time that he has had a hand in upending advanced negotiations with a North American partner. WSJ
• PM Mark Carney urged Albertans to reject separatism in an Oct. 19 referendum, calling national unity critical. The province will vote on whether to remain in Canada or start a process that may lead to secession, subject to a second ballot. BBG
• UK Chancellor Healey will raise taxes on banks, likely by increasing the bank surcharge; UK lenders fell in early trading. BBG
• Three CoreWeave co-founders have sold $3.3 billion in company shares since last year’s IPO. BBG
• Some Anthropic investors discussed a more tempered $1.5 trillion valuation on the back of slowing revenue growth. RTRS via BBG
• JPM Econ (Abiel Reinhart) keeps its September core PCE forecast at 0.31% m/m (3.1% y/y) after PPI; GS raised its estimate to 0.34%. JPM/GIR
• US President Trump is to deliver remarks in Dalton, Georgia at 14:45 EDT/19:45BST on Friday.
• US President Trump said no real reason for him to go to Maine and thinks he will go to Minnesota, while he said he is not involved in that when asked regarding probe into Democrat Rep. Omar.
• Japan is to sidestep 3.5% defence spending target despite US pressure: Asahi
• US President Trump said he will be going to Iowa state on Thursday, October 22nd and Sunday, November 1st.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as global markets regained composure following the recent tech bloodbath. Elsewhere, Indonesian stocks are the outlier with double-digit percentage losses as the MSCI consults on a proposal to reclassify Indonesia from Emerging Market to a Standalone Market Status. ASX 200 gained with the upside led by tech and miners, while recent weak jobs data also supported the case for a pause from the RBA at the next meeting. Nikkei 225 recouped some of the losses from the prior day's turmoil. KOSPI outperformed but still has far to go after falling by as much as 8% yesterday. Hang Seng and Shanghai Comp conformed to the broad recovery in risk assets, while PBoC Governor Pan also recently reiterated that China would maintain a moderately loose monetary policy.

Top Asian News

• South Korean Finance Minister and Central Bank Governor held a meeting with the Fed and US Treasury Department.
• China is reportedly moving to lift the stock market with selling curbs and buybacks, Bloomberg reported.
• Japan's Finance Minister Katayama said can't comment whether we would need extra budget or not, adds even if needed, the extra budget would be limited to urgent policy priorities.

European bourses (STOXX 600 +0.5%) have an upward bias to start the final trading session of the week, with cyclical-heavy indices outperforming as tech rebounds from this week's losses. Sectors highlight the positive bias. Autos lead, with Media and Telecoms following closely behind. To the downside resides Health Care, as the only sector in the red. UK banks are under pressure this morning after Bloomberg reported that UK Chancellor Healey will raise taxes on banks. The report follows a Guardian source stating that the proposal includes a 3% increase to the bank surcharge. Lloyds (-2.3%) and NatWest (-2.1%) are under the most pressure, while Barclays (-0.2%) and HSBC (+0.5%) are little moved given its large international business. US equity futures follow their European peers. Tesla (+5%) is getting a boost pre-market as it unveils its flying car, while Strategy (-2.4%) falls after MSCI announces new screening methodology that targets companies holding digital assets. Tesla (TSLA) Roadster uses thrusters to land after ramp jump, while Roadster can accelerate 0-60Mph in less than 1 second, while it will enter production in 2028.

Top European News

• UK Ofcom proposes to cap Second Class stamp price for a further year, until March 2028.
• Chinese Finance Minister met with the EU Economy Commissioner Dombrovskis, ECB President Lagarde and Eurogroup President Pierrakakis. Chinese side is willing to give full play to the role of China-EU financial dialogue and other mechanisms with the EU side.
• Germany's Finance Minister said he is not against China, China is an important partner, but is not playing by the rules and we should not be naive.
• Rio Tinto (RIO LN) CEO said that they are looking to build commodity trading capabilities.

FX

• Snapshot: G10s are firmer against the broadly lower USD this morning. Antipodeans lead, benefiting from the risk tone, whilst the JPY holds towards the bottom of the pile, but still remains flat.
• USD continues the prior day’s downside, which stemmed from AI-debt concerns and lower yields. Also fuelling the downside this morning is a speech from Fed Chair Warsh, where he ultimately provided no forward guidance ahead of the October meeting; as such, money markets pared back their bets of an October hike (now 14% vs 26% earlier). The docket for the remainder of the day remains exceptionally light aside from US Import/Export Prices and Industrial Production.
• GBP is a touch firmer this morning, benefiting from the softer USD a little more-so than peers. Focus remains on the looming UK Budget (Oct 28), where source reports have generally been welcomed by markets. The latest was via Bloomberg, which suggested that Chancellor Healey could raise taxes on banks. The source adds that the move will likely involve increasing the bank surcharge that it added on top of the standard corporation tax rate. It seems as if markets are taking the potential tax on banks as a reliable way to improve the fiscal situation, without having a significant impact on growth.

Central Banks

• Fed Chair Warsh said he may be over-scarred from the Global Financial Crisis, adds since September FOMC, world has broadly conformed to our expectations. Will be crystallising what is happening to output, employment and inflation. We will be meeting a couple more times this year, which will be the crystallising moment. Right now, we have structural growth and an investment surge. Obviously, the Fed's policies spill over to the rest of the world, but their policies spill back to the US too. Will make judgements at the October and December meetings. At the Fed, we made clear that we would deliver price stability; I do not believe in prejudging meetings. Do not prejudge meetings. Do not believe in signalling what I might do at meetings for the rest of 2026. AI is going to hit the demand side of the economy before the supply shock. AI will help central banks have confidence in data and monetary policy. AI will change the real economy, but near-term impact on employment is uncertain. AI will make economy more productive, more wealth, but path to them will be a bumpy one.
• Fed's Goolsbee (2027 voter) said it's a discouraging month regarding inflation and still feel some optimism if drivers of inflation can go away in short order, if inflation is from overheating demand from AI, that's more disturbing and have to address it.
• Fed's Hammack (2026 voter) said hearing more from lower-income Americans struggling with inflation, adds anecdotal information provides important economic guidance. Businesses are seeing a lot of input cost price pressures. Worries about formation of inflation mentality. Formation of inflationary mindset might force more aggressive Fed policy action. Hard to know what a neutral rate is. Financial conditions do not appear restrictive right now.
• BoJ Governor Ueda said underlying inflation is approaching 2% and the BoJ will continue to raise policy rate in accordance with economic, price and financial developments. There is a risk of underlying inflation overshooting 2% price target.
• ECB's Wunsch said further tightening would be reasonable given persistent inflation pressures and the resilient EZ economy. Inflation is running at almost 4%, domestic inflation stands at 3% and energy prices are likely to remain elevated for longer than previously expected. Not committing to anything due to the high degree of uncertainty. Market pricing of three rate hikes seems reasonable.
• ECB's Nagel said Germany is getting fit for the challenges of the future and a fitness program of reforms is always important. Regarding bond market, Germany will remain the anchor of stability in Europe.
• ECB's Rehn said growth outlook is better today than start of the year, adds not seeing second-round effects on inflation. Labour market not as tight, wage moderation ongoing. Must show vigilance on inflation outlook.
• BoE Governor Bailey said it's too early to form strong views on strength of second round effects. So far signs of second round effects are subdued and businesses emphasizing cost cutting. UK economy is more resilient than we expected and not as strong as we need. News from Middle East is the biggest factor moving UK gilt yields. Second-round inflation pressures look subdued so far. More hopeful than a month ago that they will get more international alignment on AI testing.
• RBNZ Chief Economist Conway said there is reasonable confidence that inflation has not become broad-based and that rate hikes help contain spillovers from an energy shock.
• PBOC's Pan said that the PBOC is to support offshore CNY markets development; to further expand liquidity management tools.
• PBoC injected CNY 60bln via 7-day reverse repos with rate kept at 1.40%.
• PBoC set USD/CNY mid-point at 6.7220 vs exp. 6.6947 (prev. 6.7253).
• Bank of Canada Governor Macklem said Canada hasn't raised rates yet, but the longer it goes, the harder it is to look through increases in energy prices.

Fixed Income

• Fixed income benchmarks are a touch lower to start the final trading session of the week. USTs essentially flat, and look set to end with weekly gains despite a hotter CPI and PPI print this week, as Fed Chair Warsh fails to provide little guidance. As such, money markets pared back their bets of an October hike (now 14% vs 26% earlier).
• Focus will be on the US Treasury primary dealer questionnaire, expected at 17:00BST/12:00EDT, ahead of the QRA on November 4th. Some analysts expect the Treasury to cut both 20-year and 30-year auction sizes by USD 3bln each, and to be replaced by T-bills. To add, there has also been speculation that the 20-year could be cut altogether.
• Gilts and Bunds trade in tandem, posting losses of around 15 ticks.
• Focus for Gilts this morning, and heading into the Budget, is on any clues to how Chancellor Healey chooses to balance spending with income. The latest being focused on the banking sector, with Bloomberg reporting that UK Chancellor Healey will raise taxes on banks. The report follows a Guardian source stating that the proposal includes a 3% increase to the bank surcharge.
• Australia sold AUD 1bln in 3.25% April 2029 bonds, average yield is 4.8238%, bid to cover of 4.89.

Commodities

• Crude benchmarks are on the backfoot, with mild underperformance in the WTI Dec’26 (-1.2%) vs Brent Dec’26 (-0.8%). The former currently holds towards the bottom end of a USD 95.29-96.39/bbl range, whilst the latter sits within a USD 104.91-105.94/bbl range. The mild underperformance seen in WTI is likely a bit of an unwind following yesterday’s relative outperformance, on the back of large weekly US headline inventory and as the US Treasury extended a sanctions waiver allowing Lukoil petrol stations to operate within the US.
• The geopolitical environment remains tense on three major fronts: 1) The US-Iran situation remains unresolved, though President Trump did mention that Iran requested a halt to attacks and that negotiations are ongoing. A factor which is likely weighing on the complex this morning. 2) Saudi Arabia and the Houthis continue to strike each other, and 3) Russia and Ukraine have continued to strike energy facilities, despite Trump’s announcement of an energy ceasefire.
• Spot gold currently trades within a USD 4,147-4,189/oz range, continuing to build on the prior day’s gains; the yellow metal now eyes its 21-DMA at USD 4.2k/oz. Strength today is facilitated by a slightly softer USD, which comes after Fed Chair Warsh avoided any guidance surrounding the October confab, which saw a slight paring of tightening bets.
• Base metals are rebounding from recent losses as global sentiment improves. 3M LME Copper (+1%) currently trades at the upper end of a USD 14,296-14,482/t range, and now eyes USD 14.5k/t.
• South Korea is reportedly to extend oil fuel price cap for another four weeks.
• Russia and Iran is reportedly discussing gas pipeline route and pricing, TASS reported.
• Japanese Chief Cabinet Secretary Kihara said Japan expects October crude procurement to be at the same level as last year.
• China set 2027 corn import tariff quota at 7.2 mln tons and wheat import tariff quota at 9.64 mln tons.

Trade/Tariffs

• China's MOFCOM is to revise the "Catalogue of Technologies Prohibited and Restricted from Export in China," and temporary registration management will be implemented for the export of related technologies.
• Taiwan is to curb AI chip exports to China as part of the US trade deal, Bloomberg reported. Servers and high-end chips will be added to the controlled items list.
• France is said to have agreed to support UK inclusion in the bloc's proposed "Made in Europe" legislation, although Britain would need to align with the EU's approach to tariffs on Chinese EVs.
• Japan is to open anti-dumping probe on Chinese pigments and preparations made from Chinese rutile titanium dioxide.
• US Commerce Secretary Lutnick throws future of US-Mexico trade talks into further doubt as he has objected to significant reductions in tariffs on Mexican steel, aluminum and automobiles, according to WSJ.

Geopolitics: Iran

• US President Trump said wouldn't use nuclear on Iran, while he is talking to Russia and China regarding denuclearisation, adds may have to go to Pickaxe Mountain and don't see troops on the ground in Iran. Iran has asked for a halt to US attacks and negotiations are still ongoing.
• IRGC Brigadier General Akraminia said "we have introduced new equipment into our combat formations", Al Mayadeen reported.
• IRGC Brigadier General Akraminia announces new operational plans to push back more American ships and flee ever further; reiterates that the Army Navy has complete operational control over the Sea of Oman, SNN reported.
• Iranian Army Commander Major General Amir Hatami said three ships entered the Sea of Oman and were fired upon by Iranian forces, severely restricting maritime traffic.
• Iranian Ambassador said that "The United States is not demonstrating serious political will to negotiate with Iran", Tass reported. Iranian Ambassador to Moscow's Kazem Jalali.
• US President Trump answered he doesn't trust anyone when was asked if he trusts Israeli PM Netanyahu.

Geopolitics: Ukraine

• US President Trump said Ukrainian President Zelensky is not a good guy to deal with, adds Zelensky is more difficult than Putin to deal with. He is allowed to do a self-pardon. Plenty of other targets besides refineries to hit. Need an election in Ukraine.
• US President Trump said Ukraine's resumption of strikes on Russian refineries is a disgrace.
• EU President of the European Commission Von Der Leyen said that they are working on the 22nd package of sanctions against Russia, adding that no sanctions will be lifted unless Russia stops its war.
• Russian forces struck a vessel sailing to Ukraine's Odessa, according to IFX.
• Temporary restrictions introduced at Pulkovo Airport in St. Petersburg, Russia, according to TASS.
• Ukrainian drones are attacking Russia's Moscow region and reportedly hitting industrial warehouse facilities.
• Massive fire breaks out in Ukraine's Khmelnitsky region following a reported strike on a fuel depot.
• US senators are demanding an investigation into disruption of a satellite system supporting Ukraine, according to an Al Jazeera correspondent.
• Order to limit Ukraine's access to Starshield system came from inside the White House, according to sources.
• Ukraine's Air Force said jet drones spotted over Kirovohrad region heading west.
• Russian local governor said drones hit industrial facilities in Russia's Rostov region.
• Russian President Putin said Ukraine failed to grasp consequences of returning to targeting refineries.

Geopolitics: Middle East

• Saudi army conducted missile attack on areas of Amran and Saada provinces in northern Yemen, according to IRNA.
• Yemen Houthi official said Saudi Arabia must answer for the massacre of civilians in Yemen and called for independent international probe into the Saudi war on Yemen.
• Saudi-led coalition noted there 20 Houthi attacks on Riyadh in October and that recent strikes included an attack on King Khalid International Airport that killed 12 on October 10th.
• Explosions reported in the city of Dammam, Saudi Arabia, SNN reported.
• Yemeni armed forces strike military positions in Aden, hitting military operation headquarters managed by Saudi officers which killed four.
• Saudi-led coalition said it intercepted and destroyed a drone launched towards Saudi Arabia's Eastern Region.

Geopolitics: Other

• Chinese Foreign Minister told Israel's President promoting peace and reconciliation in the region is the cornerstone of China's Middle East policy, and China consistently held that the Palestinian question is greatest historical injustice of this century. Immediate priority is to fully open access to the Gaza Strip. Israel should stop and reverse its forced establishment of settlements in the West Bank.
• South Korea asks the US for a tax break for Alaska LNG project, according to Maeil.
• South Korea-US ties are said to be straining over intelligence sharing restrictions, trade disputes, and reduced military cooperation, raising concerns about Seoul's ability to counter North Korea's nuclear threat. South Korean President Lee Jae-myung is seeking to rebuild trust with Washington while improving ties with Beijing as trade tensions and potential Trump-Kim talks add uncertainty.
• US Secretary of State Rubio spoke with Israeli PM Netanyahu and spoke with Lebanon's President Aoun regarding recent developments including the seizure of a truck carrying Hezbollah explosives. Rubio also urged direct military-to-military communication between Lebanese and Israeli forces for deconfliction.

Crypto

• Bitcoin (+1%) and Ethereum (+3%) attempts to rebound from recent losses as the risk tone improves.

US Event Calendar

• 8:30 am: Sep Import Price Index MoM, est. 1.0%, prior 0.7%
• 8:30 am: Sep Import Price Index YoY, est. 8.2%, prior 7.0%
• 8:30 am: Sep Export Price Index MoM, est. 0.9%, prior 0.6%
• 8:30 am: Oct NY Fed Services Business Activity
• 9:15 am: Sep Industrial Production MoM, est. 0.4%, prior 0%
• 9:15 am: Sep Capacity Utilization, est. 76.5%, prior 76.3%
• 12:00 pm: Treasury primary dealer questionnaire (ahead of Nov. 4 QRA)
• 2:00 pm: Sep Federal Budget Balance, est. -$30b, prior $197.94b
• 4:00 pm: Aug Total Net TIC Flows, prior $83.7b
• 4:00 pm: Aug Net Long-term TIC Flows, prior -$27.9b

Central Bank Speakers

• 6:00 pm: Fed's Goolsbee Speaks on Bloomberg TV

DB's Jim Reid concludes the overnight wrap

It's been yet another fascinating 24 hours with CoreWeave 5yr CDS initially widening another 76bps intraday to 1194bps, its widest level yet, before turning around and ending -30bps tighter at 1086bps. This turn around was seemingly sparked by Nvidia CEO Jensen Huang coming to the AI computing company’s defense amid its sharp selloff in recent days. The comments likely contributed to a broad dip buying in Tech seen during the US trading session. The Philly Semi index was down over -4% in early trading before rebounding to closing down “just” -0.88% lower but still for its 7th consecutive loss. 10yr US Treasury yields were down -12.7bps due to the risk-off and yet 378 names in the S&P 500 were higher on the day and the index managed to end up with a +0.33% gain and stay within a percent of its record high. Even the NASDAQ itself pared back its losses, having hit an intraday low of -1.44% at the open, to scrape a slight +0.08% gain. The KOSPI is back up over 4% this morning as well.

Drilling deeper into the continued AI volatility, CoreWeave's equity also recovered from being down -9.54% at the lows to close up +5.94% yesterday. In terms of other comments from Nvidia CEO Huang, which turned around the session, he noted that “CoreWeave’s strength is improving every day”, before adding “I’m optimistic. Their cost of capital is actually decreasing.” While that is true given when the company issued its current debt, the market is pointing to a higher cost of capital now and increased refinancing costs in the future, so it's one to continue to watch. I explored some of these moves in more depth in my chart of the day yesterday (link here), which showed that for now at least, AI-linked financing costs aren’t excessive relative to the rest of the credit stack but there are outliers starting to emerge. Indeed, Oracle is the other main outlier and the stock was down -8.83% at the lows yesterday before recovering to close +2.02% higher.

Overnight, Kevin Warsh has just spoken at the IMF conference and perhaps the most important thing was what he didn’t say. With the Fed about to enter its blackout ahead of the October 27-28 meeting, Warsh declined to push back against rate expectations, saying he doesn’t “prejudge meetings”, despite this week’s hotter inflation numbers. Instead, he was strikingly upbeat about the US economy, talking about a “massive investment surge” and the potentially huge productivity benefits from AI. Markets took the lack of hawkishness as good news, with October hike pricing dropping to around 15% from roughly 30% as he spoke, while S&P and Nasdaq futures are both +0.15% higher having been negative for most of the session before he spoke. Stoxx futures are +0.68% higher.

A recovery in Asian equity markets had already been in full force before Warsh but has continued after. South Korea's chip-heavy KOSPI (+4.28%) is leading gains after tumbling nearly 8% yesterday, a move that pushed the index to its lowest close since April. Elsewhere, the Nikkei (+1.83%) is also trading firmly higher, recovering a portion of Thursday's steep losses as semiconductor stocks have regained ground. Chinese equities are likewise advancing, with the Hang Seng (+1.25%), CSI 300 (+0.75%) and the Shanghai Composite (+0.95%) all higher. In contrast, Indonesia's Jakarta Composite is plunging nearly -11.0% in its steepest one-day decline since January 1998 after MSCI proposed reclassifying the country from emerging-market to standalone-market status.

Warsh's comments overnight actually followed another hawkish round of Fed speakers ahead of the upcoming Fed blackout period. Federal Reserve Bank of San Francisco President Daly said that she had changed her view from earlier this year that the Fed should “look through” supply shocks, saying “Do the conventional pieces of wisdom — where our tool doesn’t really work for supply shocks and they dissipate on their own — does that really apply when the shocks are overlapping and they’re long-lived?” Federal Reserve Bank of Cleveland President Hammack joined her in these concerns, adding that “at some point businesses start building in an expectation that more of these are going to come, and that prices are just going to keep going up.”

However the theme of the day was a big global rate rally, as the prospect of slower AI growth pushed yields lower across the board. So, the 2yr yield (-5.9bps) fell to 4.74%, whilst the 10yr yield (-12.7bps) was down to 5.06%. And this was a global pattern as well, with yields on 10yr bunds (-5.3bps), OATs (-8.5bps) and BTPs (-6.7bps) all falling over the session.

But even as bonds were rallying, a striking feature was it took place despite another batch of hawkish US data. So in other words, AI growth concerns continued to outweigh the inflation impulse when it came to yields. Most notably, there was a huge upside surprise in PPI inflation, with headline inflation up +1.3% in September (vs. +0.6% expected). In fact, it was the strongest monthly jump in producer prices since March 2022, shortly after Russia’s invasion of Ukraine. Moreover, the core measures were also stronger than expected, with the measure excluding food, energy and trade services up +0.5% on the month (vs. +0.3% expected). So as with the CPI, the release helped to fuel concerns that inflation was broadening out beyond energy. Taking into account the PPI and CPI components, our US econ team is projecting a +0.37% monthly increase for PCE.

The hawkish data impulse was also clear in the labour market, as the weekly initial jobless claims also remained low in the week ending October 10, coming in at just 199k (vs. 200k expected). So that kept the 4-week moving average broadly steady at 198.5k, only up slightly from its 198.25k level the previous week. In addition, the retail sales number was also stronger than expected, rising +0.8% in September (vs. +0.3% expected). So with the latest data, that left the Atlanta Fed’s GDPNow estimate at an annualised pace of +3.6% for Q3.

Earlier in Europe, markets put in a relatively stronger performance, as they remained more insulated from the AI-related issues. So the STOXX 600 (+0.38%) actually put in a second consecutive gain, taking the index to a 3-week high. That included particularly strong gains for the FTSE 100 (+1.08%) and France’s CAC 40 (+0.78%), although Italy’s FTSE MIB (-0.72%) was a relative underperformer. In the meantime, gilts saw a relative underperformance, with the 10yr yield only down -5.0bps on the day which came as the UK GDP release for August was stronger than expected. That showed GDP up +0.1% (vs. -0.1% expected), which meant the rolling 3-month growth rate was at +0.7% compared to the previous three months (vs. +0.5% expected).

Looking at the day ahead, and it’s a quiet one ahead. However, we will get data on US industrial production and capacity utilization for September. In the Euro Area, there’s also the final CPI print for September.

Tyler Durden Fri, 10/16/2026 - 08:28

CoreWeave Founders Cashed Out $3.3 Billion Before The Meltdown

Before CoreWeave imploded, its three co-founders had been busy dumping stock, a lot of it, totaling $3.3 billion since the company's March 2025 IPO. The AI cloud provider rents access to Nvidia-powered data centers that fuel the AI circular financing scheme. Its unsecured bonds due in 2032 have crossed into distressed territory, and its five-year CDS spreads have blown out as debt levels at hyperscalers and neocloud providers come into question.

Michael Intrator, Brian Venturo and Brannin McBee sold $2.4 billion this year alone, according to Bloomberg's new report on corporate filings.

Intrator has sold more than $907 million in shares this year. McBee's sales since the IPO total $1.06 billion, equivalent to 40.4% of his undiluted stake at the listing. Venturo has sold more than $1.2 billion, representing over 35% of his original holding.

As musician Kenny Rogers once sang, "You got to know when to hold 'em, know when to fold 'em, know when to walk away, and know when to run..."

CoreWeave shares have plunged more than 50% from their May peak, erasing $15 billion of the founders' paper wealth.

By late in the week, CoreWeave's 2032 bonds traded at deeply distressed levels. The 9.625% notes due in 2032 tumbled to nearly 76 cents on the dollar, a level that typically signals distress.

CoreWeave's CDS spread had also reached a record of 1,117 bps by the end of the week, implying 63% odds of a default within five years.

On Thursday, we laid out why Gartner expects over 80% of neoclouds to fold, and we hinted at the big problem: CoreWeave is the borrower on its own unsecured bonds, and it is also the tenant that is supposed to pay the rent on a big chunk of the junk-rated data center bonds issued by other companies. If CoreWeave's cost of capital is "decreasing" at 16%, what does that make the cost of capital for the companies whose bonds are backed by CoreWeave's lease payments?

Related:

• "Its Going To Zero": CoreWeave Implodes As Stocks Finally Notice What Credit Has Been Screaming For Weeks

Deutsche Bank chimed in:

Deutsche Bank: "CoreWeave no doubt will need additional capital to fund existing backlog over the next 12-18 months," with NTM operating cash flow of ~$10 billion against required capex of $45 billion. That is a $35 billion funding gap: if even half of it had to be raised at the ~15% where CoreWeave's unsecured bonds now trade, the extra interest bill would be roughly $2.6 billion a year, more than the entire $2.1 billion loss analysts expect CoreWeave to post this year. Or it could just sell more stock

— zerohedge (@zerohedge) October 16, 2026

Charting CoreWeave's top executives dumping stock:

Michael Intrator

Brian Venturo

Brannin McBee

Kenny Rogers said it best: "You got to know when to hold 'em, know when to fold 'em, know when to walk away, and know when to run..."

Tyler Durden Fri, 10/16/2026 - 08:20

Americans' Trust In Fellow Voters Falls To Fifty Year Low; Survey Finds

Authored by Bryan Hyde via American Greatness,

Americans' trust in their fellow citizens' voting judgment has fallen to its lowest recorded level in more than five decades, according to a recently published Gallup survey.

American voters' growing distrust of political leaders and institutions now extends to one another, with Democrats and Republicans showing similar levels of skepticism.

According to Gallup, 51% of U.S. adults have a great deal or fair amount of trust in Americans as a whole to make democratic judgments - the lowest reading since Gallup began tracking the measure in 1974.

Five measures of trust in the federal government are at low points in Gallup's trends. pic.twitter.com/uwmZXcCJT0

— Gallup (@Gallup) October 14, 2026

Axios reports the distrust cuts across party lines with just 53 percent of Democrats, 51 percent of Republicans and 49 percent of independents trusting Americans' ability to make democratic decisions.

While the public's skepticism was historically aimed at political leaders and government institutions, the growing partisan divide has now caused citizens to lose faith in one another, reflecting a deeper systemic shift.

According to the Pew Research Center, public trust in the electorate's democratic judgment has been on a downward trajectory for several decades, accelerating sharply in recent years.

Trust stood at 86 percent in 1976 and 78 percent in both 2002 and 2005, but has stayed below 60percent since 2018, according to Gallup.

The Gallup survey found that Americans have more trust in their local government (67 percent) and state government (55 percent) than in their fellow citizens' democratic judgment (51 percent), according to Axios.

Democrats are more likely than Republicans and independents to trust both local and state governments.

Gallup reports Republicans still largely retain trust in the federal government, albeit somewhat less than a year ago.

The survey also revealed that 42 percent of Americans say they trust politicians who hold or seek public office, while 33 percent trust the news media.

The erosion of peer-to-peer trust is particularly concerning to political scientists who say the trend poses a unique challenge to democratic norms.

When voters view the opposing side not merely as political rivals but as fundamentally incapable of sound democratic decision-making, it undermines the willingness of the defeated party to accept election outcomes as valid.

Gallup surveyed 1,000 U.S. adults by landline and cellphone Sept. 1-17, 2026 with a margin of error of plus or minus 4 percentage points.

Tyler Durden Fri, 10/16/2026 - 08:05

Beijing Tightens Grip On Solar Exports: Will Trump Play America's Quartz Card?

Beijing's new restrictions on advanced solar technologies and equipment suggest the Trump-Xi meeting in Washington did little to ease trade tensions. The new measures aim to preserve China's technological advantage as the US and India expand domestic solar manufacturing. This reinforces ongoing concerns about critical materials, where Beijing has placed export controls on tungsten, germanium, gallium, and antimony.

Bloomberg cites a statement released by China's Ministry of Commerce earlier this morning announcing that it would add 12 solar-related technologies and core equipment to its export-control list, citing national security concerns. The changes form part of a broader revision covering 40 technologies, including AI and biopharmaceuticals.

"In recent years, the application of solar technology in sensitive fields such as aerospace, national defense, unmanned equipment, and high-security-level infrastructure has been continuously expanding," the ministry said in the statement.

The statement continued, "The national security risks that may be caused by the export of solar technology have been constantly rising. It is necessary to implement timely and appropriate supervision."

The measures include a ban on exports of production technology for perovskite and solar modules, advanced technologies that offer higher efficiency and potential use in space-based solar power. Restrictions will also apply to certain technologies used to produce polysilicon, a key solar-panel material.

According to BloombergNEF analysts, the new controls could complicate efforts to diversify the global solar supply chain. Manufacturers in the US and India still depend on China for some critical materials, equipment, and technologies.

The question now is how the Trump administration will respond, if it can.

Trump administration trade officials could restrict exports of US high-purity quartz to China through export controls and licensing requirements.

China's solar dominance remains vulnerable to restrictions on US-sourced high-purity quartz, giving Trump potential leverage.

Tyler Durden Fri, 10/16/2026 - 07:45

Britain Is Accelerating Towards Crisis

Authored by David Betz and Michael Rainsborough via The Daily Sceptic,

Something is going badly wrong across Western societies, and the sense of political dislocation is no longer a fringe concern. Trust in institutions has fallen, established political parties are losing support and arguments over immigration and national identity have become sharp dividing lines.

In Germany, the President now warns openly of a return to the political divisions of the Weimar era. In France, a protest movement that began in schools has spread across the country, bringing arson, mass arrests and violent clashes with riot police to cities from Strasbourg to Marseille. Across Europe, insurgent parties of Left and Right prosper on dissatisfaction with political systems that seem increasingly unable to correct themselves. Britain exhibits the same symptoms. The question is why governments confronted by such conditions so often appear to aggravate the problems rather than address their causes.

Aggravating the conditions driving the crisis follows the logic of accelerationism. Most closely associated with the British philosopher Nick Land, accelerationism holds that an existing order contains forces which, once unleashed, drive change forward and ultimately overwhelm attempts to restrain them. Rather than arrest the process, accelerationist thought embraces its intensification, although versions of the idea on Left and Right differ markedly over where it might lead. The essential rationale remains: if the existing order contains forces capable of destroying or transforming it, remove the restraints and let them run their course.

Judged by that standard, Britain's ruling classes are accelerationists par excellence. They oversee economic stagnation, mounting national debt, growing welfare dependency, the decay of town centres and public services, and deepening social divisions, compounded by rapid demographic change and repeated failures to deliver effective immigration controls. Their own reports document segregation, declining trust and failures of integration, yet governments refuse to change the policies contributing to those problems. As opposition becomes more organised and disruptive, the state responds with surveillance and speech restrictions, as well as two-tier policing and justice. Grievance produces resistance, resistance produces stronger enforcement, and stronger enforcement fuels the grievance.

We first raised the likelihood of Britain moving towards violent social breakdown in a short article 'The British Road to Dirty War' in January 2019. At that time the prognosis was seen as controversial, not least within our own university. We were 'cancelled' and removed from our positions of authority in the Department of War Studies for daring to raise this heretical possibility.

Now, the prospect is no longer confined to supposedly dissenting academics. In June 2026, Conservative leader Kemi Badenoch warned that communal divisions risked taking Britain towards civil war. What was once been dismissed as an alarmist prediction was now being voiced by the leader of the opposition. Recognising the danger is one thing, though; reconsidering the policies contributing to the problem is quite another.

Governments are not spectators to the forces at work, which raises the most fundamental - and still largely unanswered - question in the civil war debate: why, despite endless warnings about growing social fracture and the prospect of civil strife, do Britain's ruling classes continue pursuing policies that exacerbate these tensions? Why persist on a course that threatens to unleash forces capable of sweeping away the very political order upon which their own survival depends?

Is it simply incompetence?

The current debate over immigration illustrates this paradox most clearly. So, let's begin from the obvious explanation: that it is all a case of ineptitude.

There is plenty of evidence of incompetence, but as an explanation for the failure to tackle the wider problems generated by unconstrained immigration, legal and illegal alike, it doesn't quite wash. For example, consecutive administrations have promised to reduce immigration but then consciously moved in the opposite direction. Brexit should have removed one familiar explanation for the inability to control national borders. Instead, the system introduced in 2021 widened access to overseas labour by lowering skills and salary thresholds, removing the cap on skilled workers and abolishing the resident labour market test. Net migration subsequently reached 944,000 in the year ending March 2023. The rules were later tightened, and the figures fell but remain historically high.

Nor can governments claim that the negative social consequences are a surprise. As far back as 2001, the Cantle Report after the riots in Bradford and Oldham described communities living "parallel lives". As Home Secretary, Theresa May warned in 2010 that poorly managed immigration placed pressure on public services and damaged community relations. David Cameron declared state multiculturalism a failure in 2011. The Casey Review reiterated many of these findings in 2016. In November 2024, the Government stated that its intent was to restore order to a "broken" immigration system. In 2025 Keir Starmer warned of Britain becoming an "island of strangers", while the Government's 2026 social cohesion plan acknowledges similar problems.

The recurrence of such warnings points towards more than poor judgement. Other forces are clearly at work. For example, large employers, notably in the health and social care sectors, have come to depend heavily upon international recruitment, giving them a powerful interest in maintaining existing arrangements, while the detrimental social impacts are borne by the population at large, including fiscal costs, pressure upon housing, infrastructure, health and welfare services, wage suppression and rising crime, especially in sexual offending.

These social costs did not have to be distributed in this way. Employers could have been encouraged to invest more heavily in domestic recruitment, training and retention. Such choices would have imposed burdens of their own, but political decisions necessarily involve trade-offs. Governments instead accommodated business demands for access to overseas labour while leaving the wider population, especially those on lower incomes and in already deprived areas, to bear the burden.

Over time, the logic acquired a momentum of its own. Dependence upon overseas labour was increasingly cited as a reason why immigration could not substantially be reduced. Policy created dependency; dependency became the argument for continuing the policy. Cue the inevitable smug Question Time audience member who bewails that without migrants, who will staff the NHS, and more importantly, who will serve us in Pret?

Incompetence alone cannot explain why governments pursue policies that heighten the danger of civil strife. Governments have certainly miscalculated, but they have also made deliberate choices, sustaining existing arrangements long after the resulting social tensions had been officially admitted.

Another failure, another report

Faced with declining social cohesion, governments have proved far readier to devise new administrative remedies than to reconsider the policies contributing to the problem. The latest example is Protecting What Matters, the Government's 2026 social cohesion plan. It acknowledges that large-scale migration makes community bonds harder to maintain, points to continuing segregation and records falling trust and worsening tensions.

Having diagnosed the problems, Whitehall proposes national integration standards, local cohesion plans, new mechanisms for detecting communal friction and a Social Cohesion Measurement Framework. After 25 years of reports documenting deepening societal divisions, the answer is apparently another programme for managing the consequences, while leaving the policies contributing to those divisions untouched. One set of policies creates the problems that justify another.

To illustrate the contradictory thinking at work, in March 2026 Home Secretary Shabana Mahmood accepted that people seeing illegal small-boat arrivals and the pace of immigration more generally had good reason to feel that matters were "out of control". Yet having conceded the failure of control, she turned to what she regarded as the more grievous threat: the growth of ethno-nationalism. Government policies, in other words, had provoked precisely the political reaction she now proposed to combat.

Combating the rise of the 'far-Right' gives government a new set of tasks. Anger over immigration is treated as a threat to social cohesion; hostility towards immigration becomes a potential source of extremism; communal tensions require monitoring and intervention. The policies generating much of the discontent stay in place, while government expands its efforts to contain the political reaction.

The accelerationist dynamic can therefore be summarised as a feedback loop. Policies that generate discontent are maintained; government seeks to contain the reaction they have caused; containment further exacerbates the grievance against the state. By treating the political expression of that grievance as a problem to be suppressed, the authorities intensify the very forces they are trying to control.

When political correction fails

Democratic politics depends upon the possibility of correction. Governments can be removed, policies reversed and lost arguments fought again at the next election. People can profoundly dislike a policy while accepting the political system, provided they retain confidence that democratic institutions offer a peaceful means of changing the direction of policy.

The scale and pace of recent immigration have tested that bargain. Governments of both major parties have promised greater control, yet policy has either barely changed or failed to deliver the promised results. The lesson is corrosive: when elections fail to translate public demands into political change, the appeal of seeking redress through other means inevitably grows.

Loss of faith in the capacity of elections to bring about meaningful change also extends to the institutions responsible for implementing government policy. The civil service, courts and police cease to appear as neutral instruments of democratic governance and come to be seen as obstacles to popular will, seemingly unresponsive to demands expressed through the ballot box.

Mismanaged immigration also accelerates the communalisation of politics. Competition over housing, schools and public resources, alongside disputes over cultural norms and practices, becomes organised increasingly around ethnic or religious identities. Government reinforces these divisions when it consults faith and community organisations, directs programmes towards particular groups and seeks representatives to speak on their behalf. A state that encourages minorities to consolidate politically along communal lines should hardly be surprised when the majority begins to do the same, and nativist demands follow.

If elections fail to change policy, while institutions meant to arbitrate political disputes are themselves seen as favouring competing communal interests, confidence that the system offers a peaceful route to political change begins to collapse. Opposition then moves beyond electoral politics. Protest becomes more confrontational, direct action more attractive and resistance easier to justify.

When containment becomes escalation

As opposition moves from protest to direct obstruction, the full weight of the state is brought to bear against those who resist. At Eastney Marina in Portsmouth, the authorities facilitated the landing and onward transport of migrants brought across the Channel by criminal smuggling networks, despite fierce local opposition. The determination to secure their passage stood in stark contrast to the refusal to reconsider the policies that had provoked the confrontation.

Such confrontations become tests of government authority: whether the state can enforce its decisions in the face of organised resistance. For those resisting, the same confrontation raises a question of legitimacy: whether governments that have consistently ignored demands for political change can still claim the obedience of their citizens.

Once resistance challenges the state's authority, changing course becomes politically more difficult than an earlier correction would have been. A policy reversal secured through ordinary politics can be defended on its merits; one made under pressure from direct action risks demonstrating that disruption works. The policy becomes a test of the government's resolve, giving ministers another reason to hold their ground.

For those resisting, the lesson is precisely the opposite, providing another reason to question the state's legitimacy. Elections, manifesto promises and official reviews have failed to deliver the promised reductions in immigration. Yet a government perceived as unwilling to secure the national borders proves ready to deploy its coercive powers against those challenging its decisions. The contrast reinforces the belief that open defiance is the only language the state appears to understand.

The two responses feed upon each other. Resistance gives government stronger reasons to assert its authority; the resulting enforcement deepens the grievances driving resistance. A classic escalatory dynamic develops, with each side supplying the other with reasons for its next move.

The confrontation over illegal Channel crossings thus develops into a more fundamental struggle over political power: whether change can still be secured through ordinary politics, or whether the outcome will increasingly be settled by force.

The self-preservation trap

As things deteriorate, the state is much better equipped to suppress a protest than to address its underlying causes. No comparable machinery springs into action when a policy fails for 20 years. Revising immigration policy requires ministers to confront organised interests, institutional dependencies and assumptions embedded across government. Arresting someone who blocks a port is considerably easier than reconsidering the policies that brought them there in the first place.

The grievances behind such protests have accumulated through years of political choices whose costs have been deferred, dispersed or transferred elsewhere. Some difficulties have arisen from governmental inaction; others are the direct result of policies deliberately pursued. Yet governments that have shown little inclination to address these problems become remarkably decisive when the resulting tensions threaten their authority. The authoritarian impulse asserts itself as those in power seek to defend the political order over which they preside.

Accidental accelerationists?

Accelerationism ordinarily implies intention. There is little reason to presume that Britain's ruling classes consciously seek the social upheaval or political destruction that accelerationist ideas envisage. Governments, however, are hardly innocent bystanders to the forces they help set in motion. They decide which interests to accommodate, determine which costs they are prepared to impose and follow the same course long after the dangers are plain to see. Absence of intention does not imply absence of responsibility.

Mass immigration and multiculturalism provide the clearest illustration. Neither simply happened to Britain. Both reflected political choices and, in some quarters, ideological convictions about diversity, national identity and the kind of society Britain ought to become. No democratic mandate was ever sought for so profound a transformation of British society.

The political and institutional interests sustaining mass immigration and multiculturalism also evolve over time. One government liberalises immigration for economic reasons; another preserves the system because public services have become dependent upon overseas recruitment; institutions built around multicultural policies acquire constituencies, practices and assumptions of their own. Later governments inherit both the policies and the costs of dismantling them. Choice becomes interest, interest hardens into dependency, and dependency is then presented as necessity.

Britain's present difficulties are therefore no mere accident. The policies contributing to them were consciously chosen, defended and sustained despite successive official warnings about their effects.

So, are they accelerationists?

Why, then, do Britain's ruling classes continue along a course that increases the danger of civil conflict? The answer lies in how the different forces we have examined combine to reinforce one another. Six propositions bring the argument together.

1. Incompetence explains part of the failure but cannot explain the refusal to change course. Governments make bad decisions, misjudge consequences and fail to deliver what they publicly promise. But such failings cannot adequately explain why, when the dangers have long been recognised, governments of both major parties nevertheless pursue much the same policies.

2. Powerful interests have a stake in maintaining the status quo. Employers and public services have become heavily dependent on overseas recruitment. Their interests are organised and well represented in government. Governments face stronger incentives to accommodate these organised interests than to address the consequences borne by the population at large.

3. Ideology shapes what governments are prepared to recognise and reconsider. Immigration and multiculturalism reflect convictions about diversity, national identity and the desirability of social transformation. Such beliefs influence which outcomes governments welcome, which difficulties they tolerate and which objections they regard as legitimate. Political commitments can survive mounting evidence that the resulting changes are generating serious divisions.

4. Political choices create institutional dependencies that make reversal progressively harder. Employers and public services organise staffing around overseas recruitment, while government builds institutions around the society its policies have helped create. Over time, decisions acquire powerful defenders and become embedded in administrative practice. Reversing these policies then requires governments to confront interests, assumptions and dependencies that their predecessors helped establish.

5. The failure of democratic correction encourages opposition beyond ordinary politics. Voters are promised greater control over national borders, but governments fail to deliver. Reports identify problems without resolving them; elections change governments without changing the direction of policy. As confidence in democratic redress weakens, resistance becomes more organised and disruptive. The failure to address grievances through established political channels creates the conditions in which more confrontational methods acquire greater appeal.

6. The defence of political authority can become a source of further escalation. Once resistance challenges the state's ability to enforce its decisions, changing course risks appearing to reward direct action and weaken formal authority. Governments therefore become more inclined to suppress opposition, even as the causes of discontent go unaddressed. Stronger enforcement, in turn, reinforces the conviction among opponents that the democratic process offers no effective remedy. The effort to preserve authority risks intensifying the confrontation that threatens its legitimacy.

So, are Britain's ruling classes the ultimate accelerationists? Not in the literal sense, of course. Accelerationism consciously embraces forces within an existing order whose intensification drives towards its destruction or transformation. Britain's ruling classes, one assumes, do not subscribe to any such doctrine. Yet their policies have set in motion a recognisably accelerationist dynamic. As elections repeatedly fail to produce the promised changes in policy, governments become more determined to assert their authority over those who resist. Governments unable to address the causes of political conflict prove considerably more capable of policing dissent. Suppressing resistance is easier, at least in the short term, than correcting the conditions that generate resistance.

Britain's ruling classes need not seek the destruction of the existing order. They need only defend it until self-preservation becomes self-destruction.

David Betz is Professor of War in the Modern World, King's College London. Michael Rainsborough is Professor of Strategic Theory and Director of the Centre for Future Defence and National Security, Canberra.

Tyler Durden Fri, 10/16/2026 - 07:20

"Perfectly-Integrated" African Migrant On Trial For Strangling, Dismembering His Wife

Via Remix News

An African man, who was described as "perfectly integrated," is on trial in Bonn on charges connected to the strangling murder of his wife, whom he then dismembered. The woman's remains were later found in several locations across Germany, according to court proceedings.

Asmerom G., 42, an Eritrean national, faces the charges in Bonn Regional Court in North Rhine-Westphalia. The case stems from events in mid-November 2025 involving his wife, Weghata A., 32. The couple had married in Ethiopia in 2019, and she arrived in Germany in 2024 through family reunification.

The defendant allegedly met his wife, 32-year-old Weghata A., inside his car, where they began arguing on their way back from a church visit. According to Bonner Generalanzeiger newspaper, Asmerom G. later told police that his wife told him their 3-month-old girl was not his biological child. He reportedly could not remember what happened next.

According to prosecutors, Asmerom G. then strangled his wife in the back seat of the car in a parking lot in Bonn, directly in front of the baby who was sitting in a child seat.

After the crime, the defendant is said to have driven with the body and the baby in the car to the Monastery of Saint Anthony, 160 kilometers away, where he abandoned the little girl in the stroller when it was only 2 degrees Celsius (35 degrees Fahrenheit).

Fortunately for the girl, monks found the child just 40 minutes after she was dropped off.

Asmerom G. then went to work dismembering Weghata's body, including packing her hands and head in plastic bags.

He left the torso behind, which was found at the end of November 2025. Asmerom G. left the body parts on the side of the autobahn, on the A45. The head of the woman was discovered by garbage collectors in April 2026.

Asmerom G. was arrested in Ethiopia and extradited to Germany. He has a prior conviction for aggravated assault. On the first day of the trial, he declined to comment on the allegations. Defense attorney Martin Kretschmer has said the case rests largely on DNA evidence and mobile-phone data.

Kretschmer told Bild newspaper, "Until his arrest, he was considered perfectly integrated."

German media was even singing his praises in 2016. The man from Eritrea had landed a job as an electrical assistant at a firm in Rheinbach, in North Rhine-Westphalia, and gave interviews about leaving his homeland three years earlier to escape political persecution.

He wanted German citizenship, he said. His boss at the time was quick to describe Asmerom G. as talented, reliable, and "capable of anything," according to Bild newspaper.

However, then trouble began. Within a year, Asmerom G. was in trouble with the law. A brawl led to a conviction for grievous bodily harm at Siegburg District Court, earning him a six-month suspended sentence.

He moved on from Rheinbach and took up work behind the wheel of a freight truck. Somewhere along the way, he made a trip back to his home country - for reasons that remain unclear - and returned to Germany with a woman named Weghata A., who was 31 at the time, his wife under Eritrean law. On July 26, 2025, she delivered their daughter.

The child is now in the care of authorities. Lawyer Gesine Ickert, representing the daughter and the deceased's father, has stated that the child is well looked after under the circumstances.

The trial continues.

Tyler Durden Fri, 10/16/2026 - 06:30

Legendary Swiss Bank "Thinks The Unthinkable"; Report

Swiss banking giant UBS is considering abandoning its home country and relocating to the United States as a bitter battle over government regulations threatens to upend one of the world's most powerful financial institutions.

The Zurich-based banking powerhouse and its advisers have drawn up contingency plans to move its headquarters abroad if Swiss lawmakers impose sweeping new capital requirements, according to The Wall Street Journal.

The bank has also received approaches from potential American deal partners, although no negotiations are underway and no formal steps toward a transaction have been taken.

Such a move would mark a stunning rupture between Switzerland and a financial institution synonymous with the country's centuries-old reputation as a global banking haven.

Among the options reportedly under consideration are acquiring a U.S. financial institution and redomiciling, merging with a European rival or selling UBS to an American banking giant.

The escalating confrontation traces back to the spectacular 2023 collapse of Credit Suisse, which forced UBS to absorb its longtime rival in a government-backed emergency rescue.

Last month, Switzerland's upper house of parliament backed a proposal requiring UBS to support its foreign subsidiaries with 90% common equity tier 1 capital.

UBS estimates the measure would force it to hold roughly $16 billion in additional capital, phased in over seven years.

The proposal still requires approval from parliament's lower house, where it could be watered down, and a final decision is not expected before next year.

An earlier government proposal was even more aggressive, with UBS estimating it would have required approximately $24 billion in additional capital.

UBS has fiercely resisted the measures, warning that the requirements would leave it at a severe competitive disadvantage against American and European rivals.

The regulatory battle has also sparked a backlash from major shareholders.

Investment firm Artisan Partners, which manages more than 60 million UBS shares, urged the bank's board in an October 1 letter to abandon Switzerland, blasting the proposed regulations as "punitive" and arguing there was no compelling reason to remain a Swiss company.

Activist investor Cevian Capital has similarly warned that the reforms would make it "not viable" to operate a global bank from Switzerland.

The threat of a dramatic departure has been building for months.

UBS was first reported to be exploring a potential relocation in early 2025, while Chairman Colm Kelleher later held private discussions with Treasury Secretary Scott Bessent about what moving the bank's legal home to America might entail.

Losing UBS could deal a devastating blow to Switzerland's status as one of the world's premier financial centers.

The bank holds roughly $1.7 trillion in assets, equivalent to approximately 150% of Switzerland's entire economic output.

However, Swiss officials are no showing any signs of backing down.

Swiss Finance Minister Karin Keller-Sutter dismissed the relocation threat, warning that abandoning the country would be "far more expensive and legally complex" than complying with the proposed regulations.

"It would also cease to be a Swiss bank," she said in an interview with Schweiz am Wochenende, arguing that UBS's business model depends on Switzerland's legal system and political stability.

"UBS certainly doesn't have to leave Switzerland. Many analysts and specialists agree that the requirements are reasonable and easily manageable for UBS," she added. "The capital inflows experienced by private banks during the conflicts in the Middle East clearly demonstrate the confidence in Switzerland as a business location."

Swiss National Bank President Martin Schlegel echoed those concerns.

"Ultimately, the choice of headquarters is a decision for UBS," Schlegel told public broadcaster SRF. "Of course, it's a large bank and brings benefits to Switzerland. But Switzerland, of course, also brings benefits to UBS."

No final decision has been made, and UBS could ultimately choose to remain in Switzerland.

Tyler Durden Fri, 10/16/2026 - 05:45

Trump Says Montana To Get Pentagon's New 'Super Range' For Weapons Testing

President Donald Trump announced at a campaign rally in Kalispell, Montana, on Oct. 14 that the Department of War has chosen the state to host a new weapons testing site. He did not say where in Montana it will be, but we're sure residents are 'overjoyed' at the news.

President Donald Trump speaks during a rally at the Majestic Valley Arena in Kalispell, Mont., on Oct. 14, 2026. Travis Gillmore/The Epoch Times

"Montana will help ensure the American military always reigns supreme," Trump told the crowd at the Majestic Valley Arena, adding: "A lot of other people wanted it also."

He called the project a "super range for testing advanced weapons and technologies, including potential autonomous weapons, space and electronic warfare technology, supersonics, and hypersonics."

Watch video

As the Epoch Times notes further,

The announcement is part of the Trump administration's agenda to rebuild the national defense base and accelerate innovation with modernization efforts, including the testing of advanced weapons systems and integration of artificial intelligence.

Details of the new project, including timeline, budget, and operational processes, are limited. The Epoch Times has reached out to the War Department for comment.

It is unclear whether the site will be a standalone operation or an expansion of existing defense infrastructure in the Treasure State, including the Montana Spaceport & Test Range and the Limestone Hills Innovation & Test Campus.

The state's broad spaces and sparse populations make them top candidates for weapons testing.

Midterm Races

Trump was in Montana stumping for Republican candidates running in the midterms. More than 7,000 people waited through traffic jams that took hours to resolve as cars made their way into the parking area to see the president speak.

Voters will soon decide which party controls the legislative branch of government.

Key issues for Montanans include the price of energy and the cost of living.

"Fuel prices are the main thing. Everything runs on diesel," Charles Chandler of Libby, in Lincoln County, told The Epoch Times, noting his desire to see the war with Iran end "one way or the other."

Others in the crowd agreed, repeatedly listing the price of food and fuel as top-of-mind issues. Several said the new weapons site could bring much-needed economic activity to the region.

One of the races on the national map that is being seen as competitive is taking place in the state's First Congressional District, where Republican Aaron Flint is battling Democrat Sam Forstag to replace retiring Rep. Ryan Zinke (R-Mont.).

"We're going to elect a true American patriot," Trump said, backing Flint. "He's going to Congress to be a warrior."

Flint, a fifth-generation Montanan, enlisted in the Army after the 9/11 attacks and served in the military for more than 20 years. He criticized his opponent, originally from Portland, Oregon, as a West Coast implant.

"If ever there were a race in the United States of America that was the definition of common sense versus crazy, this is the race," Flint told voters at the rally.

Forstag, a Forest Service smokejumper, union leader, and former lobbyist, is running on a platform prioritizing healthcare and housing reforms and a campaign finance overhaul, including a promise to overturn the Supreme Court's 2010 Citizens United ruling.

Republican Kurt Alme is vying for the U.S. Senate seat left vacant by outgoing Sen. Steve Daines (R-Mont.) He faces Democrat Alani Bankhead and Independent Seth Bodnar, with recent polling showing the conservative with a slight edge over the split field.

Montana Gov. Greg Gianforte promised to continue his partnership with the Trump administration to support border security, tax cuts, and "unleashing American-made energy by embracing an all-of-the-above strategy, including beautiful, clean Montana coal."

While some media outlets have shown photos of empty seats at the president's recent rallies - seats located behind press risers that blocked attendees' view of the stage - the rodeo arena was standing-room-only, with additional supporters left outside watching on a big screen after the venue reached capacity.

Enthusiastic attendees of all ages, from months-old babies to a 105-year-old local highlighted by speakers, watched the president's address, and many waved signs and chanted "USA" throughout the rally.

Trump made a similar locally connected military announcement in Youngstown, Ohio, on Oct. 12, when he broke the news about a new submarine component production and repair facility.

The president visited Alaska on Oct. 13 before stopping in Arizona earlier Oct. 14. His rally schedule next takes him to Dalton, Georgia; Highland Height, Kentucky; Wichita, Kansas; and Greenville, North Carolina.

Tyler Durden Thu, 10/15/2026 - 21:30