The transcript from this week’s, MiB: Mamoon Hamid, Kleiner Perkins on AI Investing, is below.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

 

~~~

 

Masters in Business: Mamoon Hamid, Kleiner Perkins

Host: Barry Ritholtz  ·  Guest: Mamoon Hamid, Partner, Kleiner Perkins  ·  Bloomberg Radio

Announcer (00:00:02): Bloomberg Audio Studios. Podcasts, radio, news.

Barry Ritholtz (00:00:08): This week on the podcast, another banger. Mamoon Hamid is partner at Kleiner Perkins, where he’s been focusing on early-stage AI investments for nine years. He’s got a fascinating background — early investor in Slack, Figma, Glean, Box, et cetera. Previously, he co-founded Social Capital with Chamath and worked for a number of other venture firms, including US Venture Partners. I thought this conversation was fascinating and I think you will also. With no further ado, my conversation with Kleiner Perkins’ Mamoon Hamid. Mamoon Hamid, welcome to Bloomberg.

Mamoon Hamid (00:00:57): Thank you so much for having me, Barry.

Barry Ritholtz (00:01:00): So I’m fascinated by your background. You grow up in Frankfurt, Germany. You come to the US to go to college at Purdue — bachelor’s in electrical and computer engineering — a master’s at Stanford, an MBA from Harvard. What was the original career plan?

Mamoon Hamid (00:01:18): So let’s go back to, I think, 1986. Do you remember the Challenger explosion?

Barry Ritholtz (00:01:18): Sure. Every kid growing up remembers that.

Mamoon Hamid (00:01:28): And one of my teachers was actually supposed to go on the space shuttle, because there was a teacher—

Barry Ritholtz (00:01:36): Christa McAuliffe. That’s right.

Mamoon Hamid (00:01:36): Yeah. And every kid got fascinated, especially if you had a teacher going to space. So I followed the whole journey of the Challenger space shuttle and the teachers and all that. But with that also came this desire to learn more about space, and I instantly wanted to become an astronaut. Naturally — I think I was seven or eight years old. As I thought about high school, liking science and math, and thinking about where to go to college — and as you mentioned, I was growing up in Frankfurt, Germany — one of my uncles had given me this list of colleges, the top 10 engineering schools. I just applied to all 10. And one of them happened to be Purdue, where to this day the most astronauts have graduated from.

Barry Ritholtz (00:02:30): Really? That’s fascinating.

Mamoon Hamid (00:02:31): Yeah. So my path was aeronautical engineering and trying to figure out a way to get into space. I’ve yet to do that, but that is what led me down the path of applying to Purdue in the first place and the association with space and NASA — and then actually going from something so massive and big, space, to something so small, chips and semiconductors and transistors.

Barry Ritholtz (00:02:55): Which are enabling space, so there’s definitely a connection. Is it true that when you went to business school, you were already thinking about being a venture capitalist?

Mamoon Hamid (00:03:06): When I applied to business school — so I’d worked for a good six years after undergrad. I studied electrical and computer engineering, and that naturally made me think about a career in Silicon Valley designing chips, which is what I did for the first six years of my career, working in the semiconductor industry. But what became really interesting for me was the notion of startups and founding companies, and how these so-called venture capitalists were behind some of the most iconic companies I was coming across. So I actually wanted to get into venture capital, and that’s why I applied to business school — and specifically only applied to one business school, Harvard, because I naively thought that if you wanted to get into venture capital, you had to go to Harvard or Stanford. And I’d already gone to Stanford for grad school. So it’d be nice to get a change of scenery—

Barry Ritholtz (00:03:56): Just round it out a little bit.

Mamoon Hamid (00:03:57): And move to Boston.

Barry Ritholtz (00:03:58): Yeah — give up the nice weather. So in between college and grad school, you spent how many years at Xilinx?

Mamoon Hamid (00:04:09): I was there six years. So the story actually goes: I was 19 when I graduated from college, from Purdue, and I thought, okay, the best thing for a young kid is to continue on to grad school. So I applied and ended up getting in at Stanford. But I also got a number of job offers. This is 1997, the dot-com boom — and I’m thinking it’s a bit like this time. Should you opt out of the job market and get extremely valuable experience, or continue on with grad school? So I did the best of both worlds: I went to Stanford, took a few classes every quarter, and worked full time at Xilinx. And this is back in 1997, the middle of the dot-com boom.

Barry Ritholtz (00:04:57): Really interesting. You are known today as someone who thinks about software generally, and enterprise software in particular. That seems like an unusual transition from semiconductors. What led to that shift? What changed your thinking?

Mamoon Hamid (00:05:16): Great question, Barry. So in 2005, when I got into venture capital, my full intent was to learn how to invest in great semiconductor companies, or in founders who build the semiconductor companies of the future. It turns out that after the dot-com bust, there was not a lot of investment in infrastructure — data centers and networking and switching and semiconductors broadly. So I realized pretty early on that if I wanted to build a career in investing, you have to go where the puck is going — skate to where the puck is going. And I skated toward Web 2.0 and software. In my own firm, US Venture Partners, where I started my venture capital career as an associate, I was hired to help the partners evaluate semiconductor opportunities. That’s actually why I went there — there were some legendary semiconductor investors there, and some of my mentors even today were the folks running the firm. But I realized that all my friends in 2005 were moving to Web 2.0 and the internet. This is the beginning of Facebook, which happened to be started at Harvard when I was there. You were seeing all these people in my cohort’s age group moving into software and web, and I felt like I had to move along with that. My day job was evaluating semiconductor businesses, but in the evenings I was in San Francisco, going to the Web 2.0 parties and meeting all the founders starting software businesses. So I slowly started, as a side project — and the side project became the main project — to move from semis to software and the internet. But in the back of my mind, I always remained a semiconductor guy. And semis are back now, as you know.

Barry Ritholtz (00:07:17): And AI seems to be the application of both semis and software, so you’re well prepared. We’ll talk about AI in a bit — I want to stay in the two thousands. When you were at USVP, you had early exposure to companies like Box and Yammer — I don’t really remember Yammer, I remember Box — big enterprise software deals. What did you learn from that experience? What have you brought forward with you from that era?

Mamoon Hamid (00:07:47): So Box happened to be my first investment at USVP, where I joined the board. It was an early-stage company — a few hundred K of revenue, two very young founders, Dylan and Aaron, 20 and 21 years old, dropped out of college. Sort of the prototypical founder, right? The archetype of a young founder. And they were going after storing your files in the cloud and sharing them inside your company.

Barry Ritholtz (00:08:16): Let me stop you for a second, because I think anybody under 40 is perplexed by what you just said. I recall in the late nineties and early two thousands, whether I was at home or at work or on a laptop or at the beach house, whatever I needed was always somewhere else. And the beauty of early blogging software was that I could upload files, charts, images — that was the closest thing to the cloud. It just didn’t exist then. If you wanted something you could access anywhere you had an internet connection, it literally did not exist.

Mamoon Hamid (00:08:56): Yeah. So maybe I’ll go back to exactly the point I made in my head, which was: if there is one application that moves into the cloud first, it’s going to be file sharing. I remember this from when I was on my Windows computer in the eighties and nineties — what’s one of the applications we all used a lot? Do you remember the Windows File Explorer? We were constantly clicking in and trying to find the file—

Barry Ritholtz (00:09:23): Finding something — or searching for it.

Mamoon Hamid (00:09:24): Searching for it, or placing it in a folder very nicely.

Barry Ritholtz (00:09:28): The name you used to put on a file was important, because if you couldn’t remember the name, you couldn’t find it. It wasn’t like, here’s a phrase that’s somewhere in this document, go find it. If you didn’t remember exactly where that was nested or what name you put on it — good luck.

Mamoon Hamid (00:09:43): Good luck, right? And so the world moved from the desktop to the browser — by 2006, 2007 we’re all using Firefox, Mozilla; Chrome’s not even existent—

Barry Ritholtz (00:09:56): It was Internet Explorer until Chrome came along.

Mamoon Hamid (00:09:59): Exactly right. And so my thesis was: one of the business applications that will move into the browser — software as a service — will be file sharing and collaboration. Because, precisely to your point, the file that you always needed was somewhere else. This made so much sense to me. At the time, in 2007, when I invested in Box, there were many of these companies doing file sharing, but it was mostly for consumers.

Barry Ritholtz (00:10:32): Dropbox.

Mamoon Hamid (00:10:33): Dropbox was in that same era, but there was Xdrive and Elephant Drive. As an associate, when you’re suggesting an investment, you’re going to do a lot of diligence — I remember the laundry list of companies I looked at. There were probably 40 companies doing something similar, but most of them were dedicated toward consumer use cases — photos, music, stuff like that.

Barry Ritholtz (00:10:56): The Napster era was right around then.

Mamoon Hamid (00:10:58): Exactly. And so the hypothesis was: this stuff will be relevant to large companies, who will want file sharing and collaboration for their companies. And Box actually pivoted from being a consumer company to being an enterprise company. That’s when I got pretty excited, because it lined up with this view I had that large companies would move from file servers in their data centers, or wherever in their buildings, to files that reside in the cloud.

Barry Ritholtz (00:11:28): And they’re willing to pay for it.

Mamoon Hamid (00:11:30): They’re willing to pay for it.

Barry Ritholtz (00:11:31): Unlike back then, when consumers were so reluctant to pay for anything. So it’s interesting, because you’ve had a lot of early investment success with a variety of companies. Is it easy or difficult to learn from past winners? Is every startup different, or do you develop a little pattern recognition that gives you some clues — hey, these guys are onto something?

Mamoon Hamid (00:11:58): Yeah, I think there’s definitely some compounding of learning from early wins and losses. You brought up Box — my first investment. I got to spend a lot of time with the founders, got to learn the business with the founders, actually, because they were young and I was young — I was in my twenties when I joined the board. From that experience, I learned a lot about what it meant to sell software bottoms-up into large companies, which led me to the investment in Yammer — which many folks may not remember, but it was an enterprise social network circa 2010, kind of like Twitter meets Facebook, but for your company. Microsoft ended up acquiring it in 2012, and it’s part of the Microsoft suite now, part of Teams and all that. But the experience of that bottoms-up adoption — you looked at Yammer, and a lot of large companies wanted an enterprise social network, kind of like a town hall, a messaging platform. You share a file, people comment on it, like people do on Twitter or Facebook. That was taking some of the learnings from the web era and the social era and applying them to the business world. So at Yammer I learned a lot. It was a quick journey, but there was a level of engagement and monetization that was good. And a year or so later, I came across another company: Slack.

Barry Ritholtz (00:13:36): Slack, yeah.

Mamoon Hamid (00:13:37): And it was sort of similar — now it was true messaging. Actually, on my way over here, I was walking through and saw a bunch of colleagues on Slack, which makes me really happy. Slack is used broadly across the globe to this day in 2026. The lessons learned in that 2010-11 era led to the investment in Slack in 2014, for me, when it was a 10-person company. So back to the point about compounding of learning: Box led to Yammer, Yammer led to Slack, and since Slack there have been others. But there certainly is some pattern recognition around products that are working.

Barry Ritholtz (00:14:17): And then in 2011, you co-founded Social Capital with Chamath — a very famous model, which was: how can we address many of the social ills that are hurting the country through the intelligent use of startups, technology, et cetera. Was this a reinvention of venture capital, or just a new set of tools within a partnership? It was kind of novel for its era.

Mamoon Hamid (00:14:50): It was novel for its era, because we decided we would go after education, healthcare and finance — three of the largest parts of society — and address inequities in those areas with our investments, believing that technology has the ability to democratize access to healthcare, education and financial services. And that’s largely played out over the last 15 years. We just thought there would be a ton of opportunity — as venture capitalists, we’re seeking out opportunity, and we thought that by going after large pockets of GDP, you’d identify really exciting opportunities. It turns out my interests remained in enterprise software, and I spent a lot of my time in enterprise software even when we started Social Capital.

Barry Ritholtz (00:15:46): So in 2017, you leave Social Capital for Kleiner Perkins, a firm that has long been iconic. The laundry list of companies Kleiner has backed: Google, Cisco — were they early in Apple also?

Mamoon Hamid (00:16:00): I think they were. Google, Amazon, Sun Microsystems, Genentech, Intuit — unbelievable. Tandem, if you remember. The list of greats is amazing.

Barry Ritholtz (00:16:12): So they’re an iconic company, but they’re not the dominant force they once were. When you joined, what made that opportunity so attractive?

Mamoon Hamid (00:16:22): So look, I had long admired Kleiner Perkins — an extreme reverence, I would call it — going back to my days moving to Silicon Valley. I mentioned I moved to Silicon Valley in 1997 and worked for this company, Xilinx. Think about my first few weeks on the job: I’m in my cubicle, and I’ve got a Sun Microsystems workstation, which was actually a dream, because in college we had to share 20 of them among 2,000 of us. Now I have my own Sun SPARC — I think it was a SPARC 20. And guess what? There’s a Netscape browser, and I’m buying books for grad school on Amazon. And by the way, there are a couple of guys down the hallway at Stanford who are starting this company called Google, and I’m starting to use that search engine. The one commonality among Xilinx, Sun, Netscape, Google and Amazon is that Kleiner Perkins had led the Series A — was the first institutional investor — for all five of those companies. So as a young guy, I developed this extreme reverence for Kleiner Perkins because of the investments they had made in these history-making companies. Which is also what led me to think about venture capital as a career as a young engineer — I wanted to be like those guys; they were investing in all the coolest companies I was using as a 19-year-old. And one of the people behind many of those investments — Sun, Netscape, Google and Amazon — was my partner, John Doerr. So for me, there’s this extreme reverence for John Doerr and his career, and trying to emulate that. He was an electrical engineer from Rice, went to Harvard Business School, worked at Intel Corporation, then came to Kleiner Perkins out of business school. It had a deep meaning to me. And truth be told, in my business school essay — which I still have — I wrote that I wanted to go work at Kleiner Perkins. That was 2002, when I wrote the essay. Then, when I tried to apply for a job in 2005 coming out of business school, I didn’t get very far. But I did end up there in 2017.

Barry Ritholtz (00:18:45): So eventually, if you keep plugging away, you get to where you want to go. That’s great. Coming up, we continue our conversation with Mamoon Hamid, Kleiner Perkins managing member, talking about the reboot of the firm. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

Barry Ritholtz (00:19:07): I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Mamoon Hamid. He is managing member and general partner at Kleiner Perkins, where he is pivoting the firm toward early investments in software, artificial intelligence and automation. So, you co-led the refounding of Kleiner Perkins in 2017-2018. The firm was refocused on early-stage, Series A investing. Tell us what was behind the thought process. What made you say: we don’t want to be bigger, we want to be smaller and more focused?

Mamoon Hamid (00:19:49): If I look back at the decades of Kleiner being probably the most successful venture capital firm throughout the seventies, eighties, nineties, and even the early two thousands, the one thing that defined Kleiner Perkins was that it was a small partnership of seven-ish or so partners who sat around a table in Menlo Park, meeting companies and having healthy discourse and debate about which companies to invest in and what the future of technology would bring to the world. It was defined by a small group of partners who were in many cases technical. They were operators. They had a passion for technology and its impact on humanity. That was what I kept coming back to — that was what defined Kleiner’s decades of success. And we went back to the future, in 2017 and ’18, to that model. Today our partnership is six partners, and we have three more investment professionals. We’re a very small, nimble team. We have two funds, and this team invests from both pools of capital.

Barry Ritholtz (00:21:11): So early stage — is that the seed round, or is it a little more developed?

Mamoon Hamid (00:21:17): The early-stage fund is seed and Series A mostly, and maybe some Bs. And the growth fund is Bs and Cs all the way to — we invested in the last Anthropic round at a $900 billion valuation, which is rare, for special companies. But it has the ability to invest across stages, even to the pre-IPO round.

Barry Ritholtz (00:21:41): And is it a coincidence that the growth fund is two and a half times the size of the seed fund? At that point these companies are bigger and require a bigger check — or is that just happenstance?

Mamoon Hamid (00:21:54): I think our funds are sized based on the opportunity set in front of us. Our early-stage funds have been almost exactly 35 companies for the last 15 years. So 35 companies per fund, which we think of as the right number of shots on goal for an early-stage fund to return multiples.

Barry Ritholtz (00:22:17): Like 25 to 30 million per?

Mamoon Hamid (00:22:20): Exactly. So it starts out with maybe, in some cases, a $5 million check, and the subsequent checks are another 15 or 20. Or the first check could be 30, and then with pro rata you’re investing, let’s say, up to $40 million per company. And then your growth fund is doubling down, investing a lot more in those companies.

Barry Ritholtz (00:22:39): Really kind of interesting. So the focus is artificial intelligence startups across the software, healthcare, transportation and autonomy industries. Let’s unpack that, because I’m hearing a little overlap with each of your prior venture experiences. Tell us why those four areas are so attractive.

Mamoon Hamid (00:23:04): This is a truly once-in-a-lifetime revolution that we’re going through with AI, and the number of exciting companies and people that we’re seeing right now is at an all-time high. The whole world, in some ways, is being refactored with AI — and this is just the very beginning. So I would say all parts of the economy, even beyond those four areas. Like I mentioned earlier: healthcare, financial services, all sorts of knowledge work. It’s going to be all sorts of physical automation in terms of robotics. Even space, even defense, drug discovery, materials discovery. I think it is all fair game at this point in terms of where the exciting pockets of innovation are, because there has never been a tailwind like this — one that allows all parts of the world to be refactored based on the biggest technological revolution ever.

Barry Ritholtz (00:24:30): I’m glad you described it that way, because I keep hearing people compare AI to the internet, and that seems too contained, too timid. I wonder if you agree with the thought that the only thing remotely comparable to this is the industrial revolution — which, centuries later, we are still dealing with the impact of.

Mamoon Hamid (00:24:54): I absolutely agree with you, Barry. It is like the industrial revolution. It’s like the railroads. It’s like the printing press. It is that. It’s not the internet.

Barry Ritholtz (00:25:04): That’s really interesting, because when I think internet, the first thing you think of is: oh, this is a bubble and this is going to collapse. But you mentioned you’re an investor in Anthropic — these are, forget not-profitable companies, these are companies with giant revenue streams already, and they’re barely a few years old. How big can this sector get? Is this going to take over every corner of the economy?

Mamoon Hamid (00:25:31): Let’s talk about that. I think that’s the real conversation — the very exciting conversation one can have about this topic. I’ll start at a very high level. The GDP of the world today is about $120 trillion, and about half of that is labor — the labor component. So roughly $60 trillion. And of that $60 trillion, roughly 60 percent or so is white collar — maybe 50 to 60 percent, somewhere in there. So that’s anywhere from $30 to 35 trillion. And if you look at tokens, and what the frontier model companies provide, it is units of labor. We’re already seeing how those units of labor are being utilized in computer science — software development — in law, in medicine, in drug discovery. These are little agents and buddies that we as humans now have to help us do more with our intellect. The way I see it, we’re talking about trillions of dollars opening up for these companies. Exhibit A is a company like Anthropic, which, as it has publicly stated, has gone from zero to a $45 billion revenue run rate — that’s unbelievable — in a matter of less than three years. And that is likely going to double. The company started this year, I believe, at 20, and has already more than doubled in the short year we’ve been in so far. These numbers are astounding, not only because these companies are selling software or technology — they’re selling units of labor. And the labor markets, as we all know, are the biggest component of the world’s GDP. We’re talking about trillions of dollars of opportunity. That’s what excites us so much about this time: it’s not just about selling tools and software that we’ve been accustomed to selling to IT departments. It’s selling actual labor — to companies, to corporations, even to consumers who are using AI in their personal lives.

Barry Ritholtz (00:28:01): So let’s talk a little bit about that. The fear I keep hearing is that everybody’s going to lose their job. It’s a very Malthusian argument — that this technology is going to replace labor the way the steam engine did. I’m getting a sense from the data, and from analysts like Torsten Slok, that this isn’t a replacement for white-collar labor, it’s an enhancement — or at least that’s the argument. Give us your perspective on that.

Mamoon Hamid (00:28:33): I actually fully agree with the point of view that you have. It’s like getting email. When we got the computer, the people who were using the typewriter started using the computer and started doing other types of jobs. Even in the steam era, the industrial revolution, we found ways to repurpose jobs and people and their skills. I don’t think humans are going out of style. I don’t think the world is going to be largely unemployed and on UBI because we’ve displaced all this work and all these people with AI. That’s the extreme where the mind goes, but it’s just not the reality. And that bears itself out in the numbers we see — record low unemployment rates. Actually, we need more labor, more people, than we ever have.

Barry Ritholtz (00:29:30): More skilled labor. We are seeing a decrease in job availability for kids right out of college, for unskilled labor. If anything, is this likely to force more people to get more technical, to up their skill set?

Mamoon Hamid (00:29:49): I actually do believe that. It is not: oh, you don’t need to be a software developer and study CS anymore because these software jobs are going away. It’s that now the job of a software engineer is to manage a whole host of agents, make them do work for them, and be the brains behind the operation. Think of it as having all these little agents — little employees — working on your behalf. That is the higher-level thinking. When we go to school, we learn how to problem-solve. If we’re solving a math problem and it’s hard, we think about many different ways to solve it. The same applies here: how am I going to use AI to help me solve problems? We have four kids, believe it or not, and I’m telling them: go into math, science, and actually art — have spectral diversity in your learning — because the skills that mattered in the past, solving math problems with pen and paper, will really matter in the future.

Barry Ritholtz (00:30:55): So let’s bring this back to how you think about the opportunity set that’s out there at Kleiner Perkins. You do structured reviews of every interesting deal that was passed on. I’m kind of fascinated by that. I know a lot of VCs hold their misses as a badge of honor — some firms post them on their website. What’s driving the thought process around revisiting missed deals or mistakes? What does the process teach you?

Mamoon Hamid (00:31:35): One of the things I did when I got to Kleiner Perkins in 2017 was that we would look every week at that week’s Series As that got done by our peer firms — about 30 or 40 firms — and whether we had seen the company that was invested in or not. A simple heuristic: are we seeing the things that matter — and they seem to matter because our peer firms invested in those companies. We’ve been doing this now for the last nine years. Initially our goal was that we should see 60 percent — and seeing means you met the company. For us, that now hovers around 70 percent or so. You don’t want it to be a hundred percent, because then that’s just the game you’re playing — we just see everything. And you don’t want to be at 20 percent, because you’re not seeing enough. We think 70 percent is a good number. And then we look at it: if we saw 70 percent of the good stuff, was the better stuff in the 30 percent we didn’t see? Or, of the 70 percent we saw, did we pass on the good stuff and do the bad stuff? We go through that exercise quite frequently. We just had an offsite a few weeks ago, and we went through it again — we pour salt on the wounds. Okay, we saw these companies and we passed. Why did we pass at that early-stage round? Just to remind ourselves why we need to adjust the way we do things. I’ll give you an example: Anthropic, which is an incredible company. The Series A was not a traditional one — SBF from FTX led the Series A, famously. We know how that worked out.

Barry Ritholtz (00:33:24): We do know how that worked out.

Mamoon Hamid (00:33:24): It was an amazing investment and very prescient on his behalf. I forget how much it would be worth today, but it would be worth a lot. But the Series B was a sort of non-consensus, non-obvious round. We actually met with the founders — but we met them over Zoom, and we played with the product. You don’t get the same visceral feeling about a company and the founders and their ambitions and aspirations and what they’re trying to do with their company. So — what a miss, right? I think that round got done at a $4 billion valuation or something, which is not a small valuation, but still—

Barry Ritholtz (00:34:08): Compared to today.

Mamoon Hamid (00:34:09): Compared to today. And we looked at a lot of our passes that were good companies, and many times we just didn’t meet them in person. The pandemic era bred some really bad habits — you did a first meeting over Zoom. I looked at my own investments, and for the last 20 investments I’ve done, the first meeting was always in person. So I’ve driven my whole calendar to: I just don’t want to do any meetings on Zoom anymore. I want to meet people in person, and if it’s worth a 30-minute Zoom, it should be worth a 30-minute in-person meeting. And I’m glad we get to do this in person — big difference. It wouldn’t be the same thing if I were on a Zoom screen doing this with you.

Barry Ritholtz (00:34:59): That’s exactly right. What about the reverse of that? If you’re analyzing your misses, do you ever review your hits, your wins, and ask: why did we get this right? What can we take forward from this?

Mamoon Hamid (00:35:14): That’s a great question. What we do look at is: is the portfolio that we built better than the portfolio that we missed? And it’s actually a toss-up.

Barry Ritholtz (00:35:32): Huh — that’s really interesting.

Mamoon Hamid (00:35:34): In the sense that it would be bad if we didn’t see companies and that basket of companies was way better than the companies we saw. We try to be very intellectually honest about whether we’re seeing the right stuff or the wrong stuff — and it turns out it’s a toss-up.

Barry Ritholtz (00:35:56): The reason I ask that question is that in the public markets, you learn more from your misses than your wins, because it’s very hard to tell the difference between skill and luck in the public markets. I’m curious if the same sort of thing applies to venture.

Mamoon Hamid (00:36:15): I think it does. You really beat yourself up on the misses, and on the ones you did do, you’re just like: okay, check, it happened — and maybe you don’t think about them as much as the ones you missed.

Barry Ritholtz (00:36:29): Really, really interesting. Coming up, we continue our conversation with Mamoon Hamid, partner at Kleiner Perkins, discussing the state of venture investing today. I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio.

Barry Ritholtz (00:36:46): I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. Mamoon Hamid is my extra special guest. He is a partner at Kleiner Perkins, where he’s driving the firm’s focus on early-stage investments in artificial intelligence and related technology. So let’s talk a little bit about the state of venture investing today. When you meet a founder for the first time — preferably in person — what are you looking for? What are you trying to spot that isn’t in the pitch deck they sent earlier? How do you separate intensity from delusion? What are you trying to identify in that first meeting?

Mamoon Hamid (00:37:32): It is the most interesting time in my venture career, for obvious reasons — this AI revolution. The tailwinds that AI brings to companies being started today are unlike anything we’ve seen before. So the quality of ideas is at an all-time high, and I would say the quality of the people is also at an all-time high. Those two forces combined mean there are a lot of really high-quality ideas and founders that we’re seeing — and the volume, because of that, is at an all-time high. To your question of what we’re looking for: obviously everything today is AI-enabled, with AI tailwinds — and venture capital isn’t venture capital unless there’s a strong tailwind of something. That makes this such an exciting time, because the winds are so strong — in some ways because the frontier model companies are providing better and better models, which allow companies that build on those models to provide a strong value proposition. Take, for example, a company like Harvey, which is AI for legal. It’s in most of the Am Law 100, sells to large enterprises and Fortune 100-type companies, and is becoming the de facto way that law firms and legal departments are using AI. And yes, they have a lot of secret sauce on top of what the model companies provide, but at the same time, they get better and better as these models get better and better. This is a category that just got created in the last few years, and there are numerous examples like it in every sector of society. Just take a step back — I don’t know what your reaction was to ChatGPT when you first saw it, but for me, it was the same reaction I had when I first got to use an internet browser. That Netscape moment was equivalent to the ChatGPT moment. And we started to think about the second-order effects — what are the things that come from here, from ChatGPT, from LLMs? We thought about the labor pyramid — think about knowledge work. We went straight to: what are the most highly skilled, highly paid jobs in the country? If you look at the top 20 list of jobs by dollars earned, it’s some form of engineer, doctor or lawyer. So what we did at Kleiner Perkins was invest in companies that do AI for legal, AI for software development, AI for medicine. We invested in companies like Harvey; Windsurf, which got acquired by Google; and companies called Ambience and OpenEvidence — to go after the top of that labor pyramid. And back to your point, it’s an enhancement for those people. It was supposed to be like a copilot — which it is—

Barry Ritholtz (00:41:04): Registered trademark, Microsoft Corporation.

Mamoon Hamid (00:41:07): Yeah, exactly — Copilot. And in some cases it’s become an autonomous agent for those people. Software developers run agents to do work for them now. And so we worked our way down the labor pyramid a bit — what’s the next level? If doctors, lawyers and engineers are in the $200K-plus-a-year pay range, what’s one level below that? You’ve got financial analysts, salespeople, nurses. So we’ve invested in that next class of companies: Rogo, which is AI for finance; Hippocratic, which is an agentic nursing platform; Nooks and Revo, which are helping salespeople — copilots for their work. So we’ve worked our way down the labor pyramid. And if you think about the pyramid, guess what’s at the bottom? Physical labor — the lowest paid, lowest skilled in some cases. Eventually robotics will get there, and hopefully do a lot of the backbreaking work that nobody should be doing. That goes along with the timeline of how we’re thinking about these things: you start with the highly skilled, highly paid, and over the next decade you get down to the lowest-skilled, lowest-paid work.

Barry Ritholtz (00:42:31): So you mentioned the tailwind behind AI. What does that do to valuations? How do you underwrite startups in a market where even the half-decent companies look kind of expensive?

Mamoon Hamid (00:42:46): Great question. When you have companies that have gone from zero to a trillion dollars in value in the last three to four years — when you’re a founder, what do you do? You point to that. That’s what I can be; I can get to a trillion dollars, because I’m going after really large problems. And we love that ambition. What do people do then? They say: well, if the probability of a $1 trillion outcome is 1 percent, and you add up the probabilities for all the other outcomes, you’ve got yourself an expected value of $10 billion or more — at least that’s the minimum. You do the 1 percent of $1 trillion, that’s $10 billion, and you add up all the other probabilities, and it’s probably like 30, 40, 50 billion. So if you’re looking at a Series A company where the ambition is tremendous, the valuation may just be — you’re raising a hundred million at a billion-dollar valuation for two guys out of the gate. And those are real examples. I think we’ve got a bit of this pointing at the large outcome — and if it’s paired with smart people and an ambitious idea, it has that kind of potential. But the reality is there are usually only one or two of those real outliers that are Mag Seven scale. Gravity in itself doesn’t allow for the world to have a hundred trillion-dollar companies.

Barry Ritholtz (00:44:28): Plus, if it’s a trillion-dollar total addressable market, it’s going to attract a lot of competition, a lot of other startups — perhaps more than if you’re focusing on a smaller niche. Although even in cloud storage, you mentioned 40 companies in the early days. There have got to be tens of thousands of companies going after each of these segments in AI.

Mamoon Hamid (00:44:53): Yeah, there are. And the hard part of the work we have is identifying what we think will be the leading company, because in technology, generally speaking, the leading company gets most of the market cap — which, if you look at the Mag Seven—

Barry Ritholtz (00:45:10): Winner take all.

Mamoon Hamid (00:45:11): Winner take most, right? They take 90 percent of the market. Nvidia — 95 percent of all GPU spend. Take Google, Alphabet — multiple businesses. Or take a Tesla; take a Meta — owns social. So winner takes most in technology.

Barry Ritholtz (00:45:30): Really interesting. You’ve described the AI moment as one of the most important company-building opportunities in our lifetime. What’s the risk of venture funding too many of these startups? Or is this just a fat head of winners and a long tail of well-we-gave-it-a-shot? Is this simply the nature of this business, where a couple of winners drive all the returns for your funds?

Mamoon Hamid (00:45:59): Venture is a power-law business — there’s no question about it. There’s this article I read the other day where 90 percent of the AI revenue is in the hands of two companies.

Barry Ritholtz (00:46:13): That’s crazy.

Mamoon Hamid (00:46:14): OpenAI and Anthropic. The remaining 10 percent is in a bunch of companies that are excellent companies, but the scale of those two companies is so massive that it dwarfs all the other great work happening in tons of other companies that we’ve backed. And by the way, those will be great outcomes and great companies — there’s no question about it. It’s just that the power law really shows itself when you look at the numbers. Yes, our job is to be in the companies that make history and follow the power law. What we find is that you would think there are dozens of companies — there are actually tens, maybe fewer than 10, and there are two to three that are converging to become the winners in a category. Everyone’s trying to identify those two to three companies and be in them. One of the challenges we face is that we try to invest early in what we think is the winner in the category. Sometimes you don’t know early that this is the winner, and if you invest too early, you conflict yourself out of the eventual winner.

Barry Ritholtz (00:47:28): You only invest in one company per silo, so to speak? Just to avoid those sorts of conflicts.

Mamoon Hamid (00:47:35): Yes. Typically we’re joining the boards of these companies, and if you have confidential board-level information and you then invest in a competitor, all of a sudden there’s a chance of a conflict of interest. So we definitely try to avoid that.

Barry Ritholtz (00:47:51): So I’m kind of fascinated by this: as venture investors, you obviously see the promise of AI across all these different economic sectors. I’m curious how you are using AI internally at Kleiner Perkins. Are you using it to source deals, or do due diligence, or predict specific outcomes? How does AI fit into your operations?

Mamoon Hamid (00:48:17): We have definitely been maxing out on AI internally — not only because we invest in these companies. Glean is a company we incubated inside of Kleiner Perkins, actually — it’s in year seven now, a pre-AI company started by an incredible engineer, Arvind Jain. That’s our knowledge management. Every single piece of knowledge inside Kleiner Perkins resides in Glean, and you can go to it, query it, chat with it. If I want to find your phone number and email — say I’ve never met you before, but I know someone at Kleiner probably knows you — I’ll go to Glean. If I want to ask about an HR policy, I’ll go to Glean and quickly ask, because it just knows everything about Kleiner Perkins. It knows investment memos, it knows cap tables — it knows the really confidential stuff. It’s permissioned in a way where the people who are supposed to know can know. That’s part of the magic: it’s very safe and secure, and you trust it to know the things it’s supposed to know and not know the things it’s not supposed to know. So that’s one example. But we also get so much information — board decks, long board memos, financials. I’m going to a board meeting after this, and I got the board memo. The first thing I do is send it to an email alias that runs it through AI, and it produces a summary of the board meeting and questions I should be thinking about — an instant step I take once I get the board materials, so that I start thinking about it before I actually go read the board memo. I sort of have a preview of it in my mind. We do a portfolio review every four months or so, and we have a couple hundred companies. It used to be a very manual process — we had a dedicated person working on it. Now our technology team has built a system where we take these summaries and they get piped into this portfolio book that we create, with all the financials and all the metrics. We’re heavily leveraging AI there — in this case it’s Glean and Claude, the underlying models, obviously. And we’ve done a bunch of other things. I actually love to rate my meetings, just so I remember the tens and the nines that I should have paid attention to but forgot. I want to have an exhaust of all the things I’m encountering in my real life, and AI is an amazing capture of that exhaust — providing intelligence and signals to our team, piping it into our CRM. There are all these cool things we’ve done. We have an internal tech team — an amazing team of four folks who build a lot of these tools — and we are definitely maxing out on using everything that’s out there.

Barry Ritholtz (00:51:20): Really quite fascinating. So, final question before we get to our favorites that we ask all of our guests: what are investors not thinking about when it comes to AI — or anything else — that perhaps they should be? What sort of topics — policy, data, geography — what’s getting overlooked but shouldn’t be?

Mamoon Hamid (00:51:42): I think right now we’re going through a time where software is considered to be dead — they call it the SaaS apocalypse, right?

Barry Ritholtz (00:51:53): Although they’re just coming off their lows.

Mamoon Hamid (00:51:55): Yeah. And there’s always an overreaction: oh my God, it’s going to be an AI capex world, and only chips will matter — only fiber and data centers and power will matter. The reality is that the way we as humans interact with technology is through software — through the things we have known as software and tools. And by the way, CIOs in large companies buy from companies that sell to them; they don’t just buy a smart agent. So I think the pendulum has swung a little too far, and we underappreciate what software still does and will continue to do forever — for our enterprises, for governments, et cetera.

Barry Ritholtz (00:52:41): Software: not going away. Really interesting. All right, let’s jump to our favorite questions, starting with: who are your mentors who helped shape your career?

Mamoon Hamid (00:52:51): One of my mentors is Irwin Federman, whom I dearly love. He’s 90 years old now. He’s a New Yorker — he sold peanuts, I believe, at Dodger Stadium when the Dodgers were still there in the fifties. He was my mentor at USVP, and he’s a legendary semiconductor investor, believe it or not. He was one of the co-founders of SanDisk Corporation, and before that he was CEO of Monolithic Memories.

Barry Ritholtz (00:53:22): I hope he still has a few shares of those.

Mamoon Hamid (00:53:24): He probably does. And SanDisk is in this memory hype cycle we’re going through — hype or not, there’s a real need for memory. I believe it’s now maybe a half-a-trillion-dollar market cap company. Something crazy — don’t quote me on that, but memory is having its day right now. In any case, he was a mentor because not only did I work for him, but I saw through his lens how to be a great board member, how to make investments, how to back people, how to build relationships with people. He also gave me feedback that no one else in life would, because I think he loved me — I really felt the love — because the kind of feedback he gave me was feedback that I don’t think people would generally have the courage to give you. It’s pretty direct — tough love. And I love that about him. It reminds me that I need to go pay him a visit.

Barry Ritholtz (00:54:25): Well, you’re in New York — you might as well.

Mamoon Hamid (00:54:27): Oh — no, he actually lives in the Bay Area now. He’s a New Yorker who relocated to the Bay Area, I think, 50 years ago.

Barry Ritholtz (00:54:34): So let’s talk about books. What are some of your favorites, and what are you reading currently?

Mamoon Hamid (00:54:38): I’m just starting on this book called Believe — why you should believe, especially in this era of AI. I’m on the board of a company called Thrive Global, whose CEO and founder is Arianna Huffington. Arianna gave me the book. She and I have very aligned views on faith and spirituality — Arianna, I believe, is Greek Orthodox, and I’m Muslim — and we talk about how faith guides our lives, and about this age of AI. That’s actually the conversation she and I have. She said: I have the perfect book for you. It’s about how we should believe even more in this age of AI, because it helps us understand the world — we’re trying to make sense of it all the time. Religion can give us a bit more of a constrained view of what the world actually is, because otherwise it’s just a black box; you won’t be able to comprehend the vastness of what we’re trying to comprehend as human beings. And especially with AI, we’re pushing the boundaries of what’s possible. I think there’s actually more in the scriptures than you’d think — that’s the view she and I share, and this book hits home with it. It’s by the New York Times columnist Ross Douthat. Believe — check it out.

Barry Ritholtz (00:56:16): On my list now. What about streaming? I know you host a podcast. What do you either watch or listen to these days?

Mamoon Hamid (00:56:25): My wife and I love to watch Dateline, 48 Hours — these crime shows.

Barry Ritholtz (00:56:31): All the crime shows.

Mamoon Hamid (00:56:31): All the crime shows. In some ways it just takes things down a notch, but it’s also so instructive about human psychology — what motivates people to do not-so-great things. And there’s generally a theme to it at this point; it’s a very repetitive theme.

Barry Ritholtz (00:56:52): It’s Dunning-Kruger. They have no idea about the trail of DNA evidence they leave everywhere. Anytime I’ve watched that show, it’s like — what are you doing?

Mamoon Hamid (00:57:01): And it should be that it’s harder and harder to commit crimes.

Barry Ritholtz (00:57:07): And yet—

Mamoon Hamid (00:57:08): There are still crimes.

Barry Ritholtz (00:57:10): Still — and just as many as ever. Only people are getting caught more easily.

Mamoon Hamid (00:57:13): Yeah. And the cell phones — they’re pinging those towers.

Barry Ritholtz (00:57:18): What do you mean you weren’t in the house? We can tell you were within a hundred feet of this person at that time.

Mamoon Hamid (00:57:23): Exactly. So it’s probably not a very full answer — you’re probably looking for some cool show that I watched.

Barry Ritholtz (00:57:30): No, not at all — I’m fascinated by that. It’s funny, because there used to be this giant gap between the CSIs and what was actually going on. But if you watch the two of them, it’s really closed. Maybe there’s a little selection bias here, because all those shows are about the people who got caught — so you’re seeing where the technology worked, where the forensic science got that guy. It’s really very funny. All right, our final two questions. What sort of advice would you give to a recent college grad interested in a career in either venture investing or technology?

Mamoon Hamid (00:58:12): It’s probably the same advice I would have given 20 years ago, or given myself coming out of college: go work at a fast-growing company, where you can learn from the growth it’s encountering, but also from the people — and build the network that you’ll have for the rest of your life. It’s probably the best time in your life, coming out of college, to learn from others around you and to experience high growth, because from high growth, lots of lessons are learned. If you can find a way to get into a high-growth technology startup — an AI startup — it is the best way to develop the skills, but also the empathy of what it means to have carried a bag and sold something, and built something, and shipped something. I always tell folks there shouldn’t be a direct path into venture capital. It’s a second thing — it’s not the first thing you do coming out of college or grad school. You have to have built and shipped and sold, and developed that empathy for high growth and the lessons learned, before you get into our career.

Barry Ritholtz (00:59:26): Really, really interesting answer. And our final question: what do you know about the world of venture investing or technology today that might have been useful 25 or 30 years ago, when you were first ramping up?

Mamoon Hamid (00:59:40): It’s all about the people. It sounds so trite, but it is. I say: ordinary-looking people doing extraordinary things. And how do you assess those ordinary people who are doing extraordinary things? By really understanding the people — their intentionality, their desires, their ambition, what drives them, their motivation. Which goes back to why you meet them in person: you’re trying to figure out why they are doing this. Building a startup, a company, is hard work. It’s a sacrifice on life. So there had better be a good reason why you’re doing it.

Barry Ritholtz (01:00:18): Really interesting answer. Thank you, Mamoon, for being so generous with your time. We have been speaking with Mamoon Hamid. He is partner at Kleiner Perkins. If you enjoyed this conversation, well, check out any of the 647 we’ve done over the past 12 years. You can find those at Apple, Spotify, YouTube, Bloomberg — wherever you get your favorite podcasts. I would be remiss if I did not thank the crack staff that helps put these conversations together each week: Alexis Noriega is my video producer, Sean Russo is my researcher, Anna Luke is my podcast producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

 

~~~

 

 

 

The post Transcript: Mamoon Hamid, Kleiner Perkins appeared first on The Big Picture.

My extended long weekend reads:

• The World Cup Shows What’s Great About America: Even if the so-called “Pro-America” crowd hates it. Kinzinger finds a burst of unforced patriotism in the tournament crowds. An earnest note for the holiday weekend. (Adam Kinzinger)

• This Simple White Line Is America’s Greatest Unsung Innovation: The painted road line as overlooked genius, part of the WSJ’s America-at-250 series. A perfect Fourth-of-July ode to the unglamorous stuff that works. You know about the lightbulb and the iPhone. This is the unknown story of another ingenious creation that changed a nation (Wall Street Journal)

• The Case for Buying Individual Muni Bonds. There are advantages for those with muni holdings of $250,000 or more to opting for an individualized, actively managed portfolio. There are unique aspects of the muni market supporting this preference. (Barron’s)

• Meet the Bodyguards Signing Up to Protect America’s Frightened Billionaires: After a season of high-profile assassinations, political violence, and kidnappings, wealthy Americans are racing to hire personal security services. GQ on the private-security boom catering to anxious tech and finance moguls. Genuine threat or vanity expense — the budget moves either way. (GQ)

• Seven observations from playing with AI: I thought it was important to try this technology for myself and see how good it is. Here are seven hype-free observations I have taken from the experiment: Hands-on field notes from actually using the tools, not theorizing about them. (Gavin Jackson) see also Claude: What Are You Good At? I had a little chat about how to best use AI with Claude, see what AI itself had to say on the topic of using AI. Practical, from the user’s chair. My own notes on where these AI assistants actually earn their keep — and where they don’t. (The Big Picture)

• The Internet I Grew Up With Doesn’t Exist Anymore: A thorough retrospective of my time on the internet. A wistful elegy for the open, weird, pre-platform web. Familiar territory, but this one’s heartfelt. (Christian Cleberg)

• $22,000 Per Hour: Assistants Use a Legislative Loophole to Outearn Surgeons: The Upshot finds a billing loophole turning surgical assistants into improbable high earners. American health-care economics, distilled. A law meant to end surprise medical billing has led to large paydays for some surgical assistants, who can earn far more than the doctors they help. (New York Times)

• ‘All I Have Is the Power to Talk and Be Heard’  The Interview: Tucker Carlson on pitying Donald Trump, never listening to podcasts, and planning a new political party—while selling you nicotine pouches. (Columbia Journalism Review)

• Inside the Food Truck Mafia Wreaking Havoc Around the National Mall: Turf wars. Food and fire hazards. $15 ice-cream cones. How an organized network of unlicensed food trucks took over America’s Front Lawn (Washingtonian) see also The Capital Is a Mess: Chain-link fences, construction cranes, armed guards, and portable toilets everywhere. Construction chaos remakes the National Mall. Washington as perpetual job site — and a fitting backdrop to the food-truck turf wars above. Chain-link fences, construction cranes, armed guards, and portable toilets everywhere (The Atlantic)

• The Tick That Hunts Down Its Hosts—Including Us: The unsettling biology of a tick that actively pursues its prey. Excellent, mildly horrifying nature writing. Lone-star ticks don’t just pursue and bite people. The affliction they’re spreading, an allergy to red meat known as alpha-gal syndrome, attacks a way of life. (New Yorker)

• Phil Mickelson’s Long History of Misconduct: A detailed accounting of behavior the golf world has long whispered about. The reporting Lefty’s carefully managed image was built to outrun. Interviews with 19 sources reveal two incidents of lewd language and unwanted advances, and the behavior that led to his departure from two additional golf clubs. (Skratch)

Video of the day: Google Maps is unreasonably fast. Let me explain

Be sure to check out our Master’s in Business with Mamoon Hamid, partner at Kleiner Perkins. He is a leading investor in enterprise-software and AI. He was an early investor in Slack, Figma, Rippling, Glean, Netskope, and Box. Hamid co-founded Social Capital with Chamath Palihapitiyal. In 2017, joined Kleiner Perkins

 

America at 50, 100, 150, 200 & 250

Source: Bruce Melhman

Sign up for our reads-only mailing list here.

 

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

Citi Expects Oil To Sink To $60 As Hormuz Traffic Normalizes

Brent Crude prices could plunge to as low as $60 per barrel by the end of the year, according to the latest note from Citi's commodity research team which expects flows through the Strait of Hormuz to soon normalize and the US and Iran to reach a deal in the coming months.

"Fundamentals are rapidly reasserting themselves as Hormuz disruptions fade, with Brent back to the low $70s/bbl. While the US-Iran process remains fragile and disputes over Hormuz administration and transit fees persist, we expect the MOU to hold and turn into a deal over the coming months as incentives to de-escalate outweigh the alternative for the US, Iran, and much of the ME region. Shipping flows are normalizing, Chinese buyers remain absent, physical crude markets have weakened sharply, and inventories have drawn far less than expected," Citi’s Francesco Martoccia wrote in his latest note.

"We continue to recommend selling any summer rallies and forecast Brent reaching $60 to $65 a barrel by the turn of the year," Citi analysts said in the note (available to pro subs).

The investment bank has traditionally been one of the most bearish voices in the market, and especially now that it expects shipping through Hormuz to normalize now that the Strait is open again. Moreover, China’s crude buying remains weak, physical prices have crumbled due to the surge of prompt supply from the Middle East, while “inventories have drawn far less than expected,” Citi said.

Inventories, including in the United States, have crashed to multi-decade lows since the war began four months ago. Buying to refill depleted stockpiles could support oil prices going forward, more bullish analysts say. 

However, the coming global race to rebuild depleted oil inventories will not be enough to offset a massive glut that’s coming to the market next year, as traffic through the Strait of Hormuz appears to be headed toward normalization, Goldman Sachs said this week.

The investment bank expects the global oil surplus to be about 3 million barrels per day (bpd) next year, Samantha Dart, co-head of global commodities research at Goldman, told Bloomberg Television in an interview on Wednesday.

“We do expect a little over 1 million barrels a day just of SPR rebuilding globally, but still, that would leave us close to 2 million barrels a day of a surplus,” Dart added.

Other Wall Street banks have also started to predict a glut next year after the U.S. and Iran signed the MoU.

Morgan Stanley, for example, has slashed its oil price forecasts for the next 18 months as it expects the reopening of the Strait of Hormuz to accelerate a new supply glut.

Tyler Durden Mon, 07/06/2026 - 05:45

The Three SHTF Scenarios That Could Change The World Faster Than Anyone Expects!

Authored by Madge Waggy,

For decades, the greatest threats to global stability were often imagined as distant possibilities—events reserved for history books, military simulations or the darkest years of the Cold War. Today, that assumption is becoming increasingly difficult to defend. International defense spending has reached levels not seen in decades, armed conflicts continue to reshape regional security architectures, and governments across Europe, North America and Asia are investing heavily in civil defense, cybersecurity and the protection of critical infrastructure. These are not preparations made in anticipation of ordinary times, but responses to a world that has become measurably more volatile than it was only a few years ago.

History offers a sobering reminder that societies are rarely transformed by a single catastrophic event. More often, they are changed by a sequence of crises that appear unrelated until they begin reinforcing one another—geopolitical confrontation, economic instability, infrastructure failures and the gradual erosion of public confidence. Whether viewed through the lens of preparedness, national security or historical precedent, one conclusion remains remarkably consistent: the most consequential moments are often recognized only after they have already begun.

Top Three Unstoppable SHTF Scenarios

Three crises that could change everyday life faster than most people believe possible.

 

1. Nobody Notices the Beginning

 

One of the biggest misconceptions about large-scale disasters is that they begin with a single dramatic event. Movies have trained us to expect sirens, mushroom clouds and emergency broadcasts interrupting television programming. Reality has been far less theatrical. Most crises begin quietly, almost anonymously, disguised as temporary inconveniences that appear manageable until they suddenly aren’t.

Think back to the first weeks of 2020. News reports about an unfamiliar virus circulated for weeks before most people paid attention. Outside a handful of specialists, almost nobody seriously believed that international travel would stop, businesses would close overnight or supermarket shelves would be stripped bare by ordinary shoppers. Looking back now, it’s easy to say the warning signs were obvious. At the time, they blended into the constant flow of headlines competing for attention every single day. That pattern has repeated itself throughout history. Major disruptions rarely arrive without warning; they arrive surrounded by so much background noise that almost nobody recognizes them until hindsight turns scattered events into an obvious timeline.

The reason this matters is that the international situation entering the second half of the decade feels unusually crowded with risks that, taken individually, don’t necessarily point toward catastrophe. The war in Ukraine continues to reshape European security policy. Military spending has increased across much of NATO, while countries that had spent decades reducing their armed forces are now expanding recruitment and rebuilding stockpiles of ammunition. In Asia, naval activity around Taiwan has become more frequent, North Korea continues to invest in its missile program, and governments throughout the Pacific are preparing contingency plans that would have sounded alarmist only a few years ago. None of those developments automatically lead to global conflict, but together they create an environment where a single mistake could carry consequences well beyond the region where it begins.

Military planners have long argued that modern wars are less likely to start with a formal declaration than with a sequence of rapidly escalating incidents. A cyberattack disables part of a communications network. Intelligence services detect unusual military movements that may—or may not—be routine exercises. Satellite images are interpreted differently by opposing governments, each convinced the other is preparing to move first. Political leaders are then forced to make decisions in real time while operating with incomplete information, knowing that waiting too long carries risks, but acting too quickly may trigger the very crisis they hope to avoid. History contains numerous examples of conflicts that expanded not because every participant wanted war, but because every participant believed the other side had already decided that war was unavoidable.

2. The Black Sky Event

Few people spend much time thinking about the electrical grid. It is one of those systems that exists almost entirely in the background, quietly supporting modern life without demanding much attention from the people who depend upon it every single day. Flip a switch, and the lights come on. Open a banking application, and a payment is processed within seconds. Order groceries online, and thousands of decisions involving warehouses, logistics companies, transportation hubs and inventory management systems unfold without ever becoming visible to the customer. The greatest achievement of modern infrastructure may not be its scale, but its ability to disappear into everyday life. Only when one part of the system stops working does the extraordinary complexity behind ordinary routines become impossible to ignore.

That complexity has become increasingly difficult to overlook during the past several years. Governments have invested heavily in strengthening electrical networks, protecting telecommunications infrastructure and improving cybersecurity across both public and private sectors. The motivation is not difficult to understand. Modern economies rely upon systems that exchange enormous amounts of information every second, balancing electricity demand, coordinating transportation schedules and synchronizing financial transactions with remarkable precision. A disruption affecting one network rarely remains confined to a single location. Even relatively localized failures can create unexpected consequences elsewhere, not because the systems are fragile by design, but because they have become deeply interconnected through decades of technological progress.

The idea behind what preparedness communities have often described as a “Black Sky” event does not begin with a spectacular disaster. Instead, it unfolds gradually, almost quietly, in a manner that resembles the opening stages of previous crises. A regional outage lasts longer than utility companies initially expected. Mobile networks become unreliable across several metropolitan areas. Electronic payment terminals begin experiencing intermittent interruptions, forcing businesses to accept only cash while technicians investigate the source of the problem. Distribution centers report delays after software responsible for routing deliveries starts producing inconsistent data. None of these developments appears catastrophic on its own. Each can be explained individually. Together, however, they begin creating a pattern that attracts far more attention than any isolated incident would have received only days earlier.

Early Developments

1. Electrical disruptions spread beyond the area where they first appeared.

2. Communications become increasingly inconsistent rather than failing completely.

3. Retail supply chains begin experiencing delivery delays.

4. Financial institutions introduce temporary safeguards while investigating technical anomalies.

5. Emergency services activate contingency procedures designed for prolonged infrastructure failures.

What makes the situation increasingly difficult to interpret is the speed at which uncertainty travels. Modern societies produce an extraordinary volume of information every hour, yet during periods of disruption the demand for answers almost always exceeds the supply of verified facts. News organizations rely upon official briefings that evolve as new information becomes available. Independent analysts compare satellite imagery, transportation data and publicly available infrastructure reports, frequently arriving at different conclusions. Social media platforms amplify eyewitness accounts from thousands of locations simultaneously, mixing accurate observations with misunderstandings, speculation and deliberate misinformation until distinguishing one from another becomes a challenge in itself.

History suggests that confidence can become as important as physical infrastructure during moments of uncertainty. Supermarkets rarely maintain weeks of inventory because modern logistics have made constant replenishment far more efficient than long-term storage. Fuel stations depend upon scheduled deliveries arriving with remarkable consistency. Pharmacies receive regular shipments that reflect predictable patterns of demand. Hospitals coordinate supplies through sophisticated procurement systems designed around uninterrupted transportation. Under ordinary circumstances, these arrangements represent one of the greatest strengths of the global economy. During periods of sustained disruption, however, even modest delays can begin affecting sectors that appear unrelated at first glance.

As reports continue emerging from different regions, attention gradually shifts away from the original outages toward the broader question of resilience. Engineers focus on restoring damaged infrastructure, while government agencies attempt to coordinate information across multiple jurisdictions. Businesses activate continuity plans that had existed largely on paper until circumstances required their implementation. Some organizations transition smoothly to backup systems, while others discover that contingency measures designed years earlier no longer reflect the complexity of present-day operations. Every hour brings incremental progress in some areas and unexpected setbacks in others, creating an environment where optimism and concern coexist in equal measure.

Rather than producing immediate panic, the first noticeable change appears in everyday routines. Families begin purchasing additional bottled water, batteries and shelf-stable food—not necessarily because they expect the worst, but because recent experience has demonstrated how quickly normal purchasing habits can change during periods of uncertainty. Hardware stores report increased demand for portable generators and emergency lighting. Local governments remind residents to review preparedness plans originally developed for severe weather events. These individual decisions seem reasonable when viewed independently, yet together they begin reshaping daily life in subtle but unmistakable ways.

By the time officials announce that restoration efforts may require considerably longer than originally anticipated, the conversation has already expanded beyond electricity itself. The real question is no longer whether power will eventually return, but how a society built upon continuous connectivity adapts when continuity can no longer be taken for granted. That question, more than any technical explanation or engineering report, becomes the defining theme of the weeks that follow.

3. The Hidden Variable

Every crisis begins with a tangible problem. A military confrontation unfolds along a border. A cyberattack disrupts essential services. A financial shock sends markets into turmoil. These events dominate headlines because they can be measured, mapped and documented. They leave behind damaged infrastructure, economic losses and political consequences that analysts can examine long after the immediate emergency has passed.

The more difficult question is what happens after those measurable events begin influencing something far less visible.

History suggests that societies rarely unravel because of a single catastrophe. More often, they are tested by uncertainty itself. Information becomes fragmented, official statements evolve as new facts emerge, and competing interpretations race across television broadcasts, podcasts and social media platforms faster than any government can realistically respond. Within hours, millions of people may be looking at the same event while reaching entirely different conclusions about what has actually happened.

The modern information environment has transformed that process in unprecedented ways. During previous generations, news traveled through a relatively small number of newspapers, radio stations and television networks. Today, virtually anyone can publish photographs, videos or eyewitness accounts that reach a global audience within minutes. This democratization of information has created extraordinary opportunities for transparency, but it has also made distinguishing reliable reporting from incomplete or manipulated content considerably more difficult.

In an environment already strained by military tensions, infrastructure disruptions and economic uncertainty, information itself begins behaving like another critical resource. Accurate reporting becomes increasingly valuable precisely because it is competing against an overwhelming volume of conflicting claims. Every delay in communication creates space for speculation. Every contradictory statement encourages further debate. Every unanswered question generates dozens of possible explanations before investigators have even completed their initial assessments.

This gradual erosion of certainty produces consequences that extend well beyond politics. Financial markets react not only to events themselves but also to expectations about what may happen next. Businesses postpone investments when reliable forecasts become difficult to produce. Consumers delay major purchases, employers slow hiring decisions and international companies reconsider expansion plans while waiting for greater clarity. None of these individual decisions appears dramatic in isolation. Collectively, however, they can reshape economic activity far more effectively than a single headline ever could.

The same pattern has appeared repeatedly throughout modern history. Economic crises have often been accelerated by collapsing confidence rather than disappearing resources. Banking systems depend upon trust that deposits will remain accessible. Supply chains depend upon confidence that contractual obligations will be fulfilled. Democracies depend upon public acceptance that institutions remain capable of resolving disputes peacefully, even during periods of extraordinary disagreement. Once confidence begins deteriorating, restoring it often proves considerably more difficult than repairing damaged infrastructure or rebuilding physical assets.

Signals That Often Accompany Periods of Heightened Uncertainty

1. Rapidly changing official guidance as new information becomes available.
2. Increased market volatility driven by expectations rather than confirmed developments.
3. Growing dependence on unofficial sources for real-time updates.
4. Sudden shifts in consumer behavior despite stable underlying supply.
5. Expanding public debate over which institutions remain the most reliable.

One of the defining characteristics of the digital age is that every major event now unfolds simultaneously across multiple realities. The physical event occurs first. Within minutes it is interpreted by journalists, government agencies, financial analysts, independent researchers and millions of ordinary citizens, each bringing different assumptions and priorities. By the end of the day, the public conversation may no longer revolve around the original event itself, but around competing explanations of what it means and what should happen next.

This phenomenon has introduced a challenge that previous generations rarely faced on such a scale. The speed of communication has increased exponentially, while the speed of verification has not. Satellite imagery requires analysis. Intelligence assessments require corroboration. Infrastructure failures require technical investigation. Financial data requires careful interpretation. Reliable conclusions almost always arrive more slowly than speculation, creating an unavoidable gap between public demand for immediate answers and the time required to produce them responsibly.

For emergency planners, that gap represents one of the most significant challenges of modern crisis management. Restoring electricity, reopening transportation corridors or stabilizing financial systems remains essential, but maintaining public confidence increasingly depends upon something equally important: clear, consistent and credible communication. Without it, even temporary disruptions can appear far larger than they actually are, while isolated incidents may be interpreted as evidence of broader systemic failures.

Perhaps that is the lesson connecting all three scenarios explored throughout this article. Military escalation, infrastructure disruption and institutional uncertainty are often discussed as separate risks, each belonging to different areas of expertise. In reality, modern societies have become so interconnected that developments in one domain inevitably influence the others. A geopolitical confrontation affects energy markets. Energy disruptions influence industrial production. Economic uncertainty shapes political decision-making. Information networks amplify every stage of the process, compressing days of public reaction into hours.

Whether future crises resemble past events or take entirely new forms, one principle remains remarkably consistent. The resilience of a society depends not only upon the strength of its military, the sophistication of its technology or the size of its economy, but also upon its ability to adapt when certainty becomes scarce. Throughout history, civilizations have demonstrated an extraordinary capacity to recover from disasters that once appeared overwhelming. The greatest advantage has rarely been perfect preparation or flawless prediction. More often, it has been the willingness to remain adaptable, cooperate across institutions and communities, and make informed decisions despite incomplete information.

In an era defined by accelerating technological change and increasingly interconnected systems, that may prove to be the most valuable form of resilience of all.

The Common Thread

Looking back through history, it is remarkable how often major crises are remembered for the moment they reached public consciousness rather than the moment they actually began. The headlines that define an era usually arrive only after months, and sometimes years, of developments that seemed disconnected while they were unfolding. Economic downturns are rarely caused by a single trading day. Wars seldom begin with one isolated incident. Even technological revolutions tend to emerge gradually before suddenly appearing inevitable in retrospect. The same pattern can be found across countless historical events, where the decisive turning point often becomes obvious only after enough individual pieces have fallen into place.

That observation forms the common thread connecting every scenario explored throughout this article. Although military conflict, infrastructure disruption and institutional uncertainty appear to belong to different worlds, they are ultimately linked by the same underlying reality: modern civilization functions as an interconnected system. Decisions made in one capital influence financial markets on another continent. A disruption affecting a single shipping route alters manufacturing schedules thousands of kilometers away. Political uncertainty reshapes investment, while economic instability influences diplomacy, defense planning and public confidence. Each development interacts with countless others, creating consequences that are often impossible to predict from any single event alone.

Perhaps that is why periods of rapid change have always been so difficult to recognize while they are happening. Human beings naturally interpret new developments through the lens of previous experience. Temporary shortages are expected to remain temporary. Political disagreements are assumed to follow familiar patterns. Technical failures are treated as isolated problems waiting for engineers to solve them. Most of the time, those assumptions prove correct. Societies recover, institutions adapt and ordinary life gradually resumes. It is precisely because this pattern has repeated so often that genuinely transformative moments are frequently underestimated during their earliest stages.

Preparedness, therefore, has never been solely about stockpiling supplies or anticipating worst-case scenarios. At its core, preparedness has always reflected something far broader: the ability to adapt when familiar assumptions no longer apply. History consistently rewards flexibility over certainty. Communities that cooperate tend to recover more quickly than those divided by distrust. Organizations capable of adjusting to rapidly changing conditions often outperform those relying exclusively on rigid plans. Individuals who remain informed without becoming overwhelmed are generally better positioned than those driven entirely by optimism or fear.

One lesson emerges repeatedly from past crises. Information matters, but judgment matters even more. During periods of uncertainty, headlines compete for attention, opinions multiply and speculation often spreads faster than verified facts. The challenge is not simply finding more information, but learning how to evaluate it carefully, recognizing the difference between immediate reactions and longer-term trends. Decisions made under pressure rarely benefit from panic, yet they also suffer when obvious warning signs are ignored. Maintaining that balance has always been one of the defining characteristics of resilient societies.

The world entering the second half of this decade is neither uniquely dangerous nor uniquely secure. It is, however, more interconnected than at any previous point in history. Advances in technology, communication and global trade have delivered extraordinary prosperity and unprecedented convenience, while simultaneously creating new forms of dependency that earlier generations never experienced. That duality is likely to define many of the challenges ahead. Every innovation that strengthens society also introduces new questions about resilience, complexity and the unintended consequences of living in a world where events on one side of the planet can influence daily life on the other within hours.

For that reason, the value of examining scenarios such as those presented here lies less in predicting the future than in appreciating how quickly circumstances can change when multiple systems interact. History has repeatedly demonstrated that resilience is rarely built in the middle of a crisis. It is developed beforehand through planning, cooperation, investment in reliable institutions and an informed public capable of responding thoughtfully when conditions become uncertain.

No one can predict precisely what the next defining global crisis will look like. It may resemble challenges experienced before, or it may emerge from directions that currently receive little attention. What history suggests with remarkable consistency is that the first signs are seldom recognized for what they are. They appear as isolated headlines, temporary inconveniences or regional developments that seem unlikely to affect anyone beyond their immediate surroundings. Only later, when enough connections become visible, does the larger picture begin to emerge.

And perhaps that is the most enduring lesson of all. The greatest challenges are not always the ones that arrive with the loudest warning. More often, they begin quietly, almost unnoticed, hidden within the ordinary rhythm of everyday life until the moment that rhythm changes—and the world realizes it has already entered a new chapter.

Tyler Durden Mon, 07/06/2026 - 05:00

World Cup Fans Drive Spending Surge In These US Host Cities

Bank of America has released new aggregated credit and debit card data showing that the World Cup is already driving a noticeable increase in retail spending activity across the tournament's 11 U.S. host cities.

According to BofA analyst Aditya Bhave, brick-and-mortar spending at restaurants and bars in host cities rose 5.3% year over year in the three weeks ending June 27, outpacing the 3.8% gain seen across the rest of the U.S.

Bhave noted that other forms of brick-and-mortar retail spending also accelerated in host cities, suggesting the tournament is providing a real-time boost for local restaurants, bars, and retailers.

Boston and Miami were exceptions, with restaurant and bar spending remaining flat and other retail spending slowing. Bhave said both cities hosted Scotland group-stage games and suggested that a heavy inflow of Scottish fans may have crowded out local spending.

Bhave noted that the data likely understates the full impact of the World Cup because it captures only spending by BofA customers.

Professional subscribers can read more notes on consumer here at our new Marketdesk.ai portal. 

Tyler Durden Mon, 07/06/2026 - 04:15

LEGO Faces Backlash Over Pride-Themed Content Aimed At Kids

Via American Greatness,

The Denmark-based toy company LEGO is facing criticism after promoting Pride-themed content on social media and its website. Parents accused the company of introducing LGBT themes to a brand primarily marketed to children.

Although LEGO produces some building sets for adults, the company markets most of its products to children. Many young consumers follow the brand on social media.

In a recent Instagram post, LEGO celebrated Pride Month with the caption, “Pride moments built, brick by brick. Swipe to see more of our LEGO colleagues’ stories.”

LEGO goes all out for lgbtq pride

This is a toy brand for children!!

They just posted this video promoting gay marriage and marching in Pride parades.

THIS is what they’re pushing on kids.

Absolutely disgusting! @LEGO_Group

Parents, BEWARE! pic.twitter.com/TzqIN7V7eM

— Libs of TikTok (@libsoftiktok) July 1, 2026

The accompanying slideshow featured LEGO minifigures recounting coming-out experiences, including one character attending a Pride parade and another depicting a male character proposing to his boyfriend.

Parents and social media users criticized the post, with several calling for a boycott of the company.

“LEGO is now openly pushing Pride parades, gay marriage, and rainbow ideology straight at children,” one commenter wrote on X.

“This isn’t ‘inclusion.’ It’s sexualizing childhood and grooming the next generation with adult themes.”

LEGO is now openly pushing Pride parades, gay marriage, and rainbow ideology straight at children.

This isn’t “inclusion.” It’s sexualizing childhood and grooming the next generation with adult themes.

Parents are waking up. Boycott time. Companies that target kids with this…

— ThePolarBear (@UnluckyIrishman) July 2, 2026

The commenter added, “Parents are waking up. Boycott time. Companies that target kids with this stuff deserve to lose customers… keep this garbage away from our children.”

In 2021, LEGO released a set titled “Everyone Is Awesome,” featuring 11 faceless minifigures displayed in the colors of the Progress Pride flag. The company labeled the set for ages 18 and older.

According to the information provided, the set’s designer, Matthew Ashton, said it was created with children in mind and reflected his own experience of coming out as a teenager.

“Children are our role models and they welcome everyone, no matter their background. Something we should all be aspiring to,” Ashton said.

“If I had been given this set by somebody at that point in my life, it would have been such a relief to know that somebody had my back. To know that I had somebody there to say ‘I love you, I believe in you. I’ll always be here for you.’ So, in a way, this set is not just for the LGBTQIA+ community. It’s for all of the allies — parents, siblings, friends, schoolmates, colleagues, etc. — out there as well.”

The company also promoted a Pride Month activity on its official website on June 1.

“It’s time to paint the town red, orange, yellow, green… basically a whole rainbow of color! That’s right, it’s Pride Month, and we’re celebrating the best way we know how: with LEGO® bricks!” the activity description states.

The page encouraged participants to create Pride-themed LEGO builds, stating, “This year, we want you to celebrate what makes you—and everyone you love—quite frankly, AWESOME.”

Tyler Durden Mon, 07/06/2026 - 03:30

Soaring Imports Push India's Crude Stocks To Near 1-Year High

India’s strategic and commercial crude oil inventories have jumped to a nearly one-year high as the world’s third-largest crude oil buyer boosted its imports to a record high in June, OilPrice reported.

As at the end of June, India’s crude oil stocks held in strategic, commercial, and refinery storage had increased to 104 million barrels, up from 90.5 million barrels at the end of April, according to data from commodity intelligence provider Kpler cited by Indian outlet Economic Times. Before the Iran war began, India held 107 million in crude oil inventories as of the end of February—the highest end-month level for the previous 12 months.

The war depleted inventories in March and April, before Indian refiners started raising imports from Russia and turn to Venezuela—both sources of supply that doesn’t need to transit the Strait of Hormuz.

By June, stocks were recovering and nearing the level from before the Iran war.

India imported a record high level of 5 million barrels per day (bpd) of crude oil in June, more than half of which - 2.6 million bpd - from Russia, thanks to the U.S. waiver (now expired) on sales of Russian oil already loaded on tankers.

Yet, India wants to lower its crude import bill, protect public finances, and become more resilient to supply shocks such as the Middle East conflict that crippled supply from the Strait of Hormuz. That’s why it is looking to boost energy security by diversifying import sources and expanding its strategic storage.

Currently, India’s underground Strategic Petroleum Reserve storage has a total capacity of 5.33 million metric tons of crude oil, equal to only 39 million barrels of crude oil, or eight days’ worth of India’s oil consumption.

India’s storage of just about a week of its roughly 5 million bpd of consumption, is well below the SPRs of many other large oil consumers, which exposes New Delhi’s vulnerability to sudden supply shocks.

Separately, in response to media reports that India is flipping Russian oil imports by exporting its products back to Russia, India’s Oil Minister, Hardeep Singh Puri, said that the country's refiners are not directly exporting any refined petroleum products to fuel-starved Russia, although some supplies from traders are likely reaching Russia.

Reports emerged earlier this week that Russia had started importing fuel from India by sea in a bid to ease the fuel shortages triggered by Ukrainian drone attacks on Russian refineries. In an exclusive Reuters report, industry sources revealed that an initial shipment of at least 60,000 metric tons (510,000 barrels) of gasoline has been dispatched from India via two tankers destined for Russian ports.

Hours after the report surfaced, India’s oil minister insisted that Indian refiners aren’t directly selling fuel to Russia.

“Indian companies are not selling fuels to Russia,” Puri said at a media briefing, but acknowledged that it is “possible that Indian-origin refined fuel is sold to Russia via traders.”

Gasoline from Indian refiner Nayara Energy, in which Russia’s top oil firm Rosneft holds a 49% stake, has been sold to Russia via traders, sources with direct knowledge of the deals told Reuters on Thursday. So it is likely that India-produced fuels are now reaching Russia via traders, as Moscow scrambles to alleviate a major fuel supply crisis.

Ukraine’s intensified drone strikes in recent months have now knocked offline an estimated 30% of Russia’s oil refining capacity. During peak summer demand, Russian refining throughput has sunk to a two-decade low.

In a rare public admission at the end of June, Russian President Vladimir Putin acknowledged that Russia faces fuel shortages and a fuel crisis that needs further government intervention to solve.

The fuel shortages that emerged in some regions in May have now reached the capital city Moscow, too, after Ukrainian strikes last month hit and sent Moscow’s Kapotnya refinery offline. The refinery is unlikely to resume fuel production before 2027 after suffering extensive structural damage from multiple strikes by Ukraine’s long-range drones, industry sources told Reuters last month.

Tyler Durden Mon, 07/06/2026 - 02:45

More Defense Spending, More Climate Redistribution: The EU Spins A $2.2 Trillion Wealth Transfer Machine

Submitted By Thomas Kolbe

Negotiations over the European Commission's next seven-year budget are entering their decisive phase. Should Ursula von der Leyen and her allies succeed with their plans, Germany will once again shoulder a substantial financial burden. By now, however, Germans have become accustomed to that reality.

Across the world, public debt levels are approaching dangerous flood marks. The global economy is effectively drowning in debt, with total public liabilities now exceeding 95% of global GDP. It is therefore only a matter of time before bond markets bring the debt party to an end, pushing interest rates—and with them debt-servicing costs—to levels governments can no longer afford. Such a reckoning would merely represent the logical consequence of political irresponsibility, contempt for taxpayers, and the megalomania of a political culture that continues expanding government on an ever-growing mountain of debt.

A four-decade bull market in sovereign bonds, characterized by steadily declining yields, came to an end roughly four years ago. Since then, interest rates have been rising as investors gradually lose confidence in both the political direction of Western governments and the relentless expansion of the administrative state. A turning point is approaching. Fiscal austerity is standing at the gates of an era defined by political extravagance.

For politicians like Ursula von der Leyen, however, austerity would amount to admitting that decades of debt-financed government expansion have led into a dead end. Few things are more alien to modern political elites than acknowledging failure. This is particularly true within Brussels, where the bureaucratic establishment and the ideological foundations of the European project remain firmly convinced that they are building a supranational European state on the right side of history.

Unsurprisingly, austerity is nowhere to be found in Brussels.

Instead, negotiations over the next seven-year EU budget are underway. The European Commission has floated a financial framework worth approximately €2 trillion. Funding for Ukraine-related military expenditures, broader European rearmament, and the enormous subsidy complex underpinning the Green Deal are all expected to come from higher member-state contributions and newly issued common debt. In doing so, Brussels continues to strengthen both its political authority and its influence over national governments.

Germany currently finances roughly one-quarter of the EU budget. Under the proposed framework, German taxpayers would ultimately contribute around €500 billion over the entire budget period. Last year alone Germany paid approximately €30 billion into the EU budget while receiving roughly €13 billion back, primarily in the form of agricultural subsidies and the ever-expanding subsidy machinery supporting Europe's green industrial policies and interventionist economic model.

Yet even a €2 trillion budget - already representing a leap into fiscal fantasy given the severe economic damage inflicted by years of excessive European regulation - is apparently no longer sufficient for Brussels.

Discussions are now underway to increase the budget by another €200 billion.

Leading the charge, unsurprisingly, is the European Commission itself: an insatiable bureaucracy working relentlessly to establish independent sources of taxation. Customs revenues, proceeds from emissions trading, plastic taxes—the imagination of Brussels appears limitless. At the same time, direct financial demands on member states continue expanding almost automatically, with ever-higher budget contributions treated as political routine despite growing conservative resistance across Europe.

Should the von der Leyen Commission succeed in making this fiscal leap, Germany's annual contribution to financing the European project would rise from roughly €30 billion today to approximately €78.6 billion.

For taxpayers, the implications are profound. An entirely new layer of government—complete with its own bureaucracy and increasingly its own taxation powers—has gradually positioned itself above existing national institutions. Since the joint borrowing undertaken during the pandemic and the issuance of the massive NextGenerationEU bonds, Brussels has steadily transformed itself into an independent borrower on international capital markets.

Officially, the German government still opposes granting the European Commission broader taxation powers and objects to dramatically expanding the EU budget. Yet all indications suggest that Berlin will ultimately shift the fiscal burden to Brussels itself, paving the way for larger common bond issuance—or some comparable mechanism—to finance the growing central apparatus.

Beginning in 2028, repayment of the €750 billion NextGenerationEU debt will commence. Those obligations, spread over subsequent years, must eventually be repaid to investors. Since these resources simply do not exist, Europe's capitals will almost certainly reach the same conclusion: refinance the liabilities through continuous new bond issuance, effectively burying what remains of the European Union's original prohibition against common sovereign debt.

In many respects, the transformation of Europe's financing structure resembles a financial evolution toward a European superstate. Ultimately, common liability for Brussels' debts appears virtually inevitable. The political and institutional path back has largely disappeared.

For German taxpayers, this strategy amounts to little more than witnessing another familiar fiscal shell game.

Brussels will almost certainly continue creating new revenue streams through customs duties, emissions trading, plastic taxes, and whatever additional levies policymakers may devise.

The remaining financing gap will inevitably be covered through Eurobonds issued on capital markets.

Such policies carry significant inflationary risks, as additional sovereign borrowing expands the money supply and places upward pressure on prices. At the same time, government borrowing increasingly crowds private investment out of credit markets, raising financing costs for productive businesses while strengthening the role of the public sector.

The consequences are already becoming visible. Europe's downward spiral of declining prosperity is accelerating. It is a tragic process of economic deterioration—one that is increasingly likely to culminate in a major sovereign debt crisis.

* * * 

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

Tyler Durden Mon, 07/06/2026 - 02:00

The Unfinished Revolution: When Rights Become Privileges

Authored by John & Nisha Whitehead via The Rutherford Institute,

“What country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance?”

- Thomas Jefferson

What exactly are Americans celebrating this Fourth of July?

Two hundred and fifty years after the Declaration of Independence proclaimed that all people possess inalienable rights, we now live under a government that increasingly behaves as though rights belong to the government to distribute, restrict and revoke as it sees fit.

Freedom has become conditional.

Equal justice under law has become selective.

Constitutional rights have become political bargaining chips.

Government now claims the authority to decide which religious beliefs deserve accommodation and which may be excluded—a clear violation of the First Amendment’s warning against both establishing a religion and favoring or disfavoring one religion over another.

It insists that some speakers deserve constitutional protection while others may be censored, surveilled or punished—a violation of the right to free speech.

It proclaims itself the defender of unborn life while dismantling programs that protect the health and welfare of children already born.

It welcomes some immigrants with extraordinary speed while denying others the full measure of due process promised by the Constitution.

It pays lip service to equality under law while dismantling programs designed to ensure equal opportunity and root out discrimination.

It invokes the sanctity of children while narrowing which children may claim the birthright citizenship guaranteed by the Fourteenth Amendment.

It insists that no one is above the law while expanding presidential immunity and removing many of the traditional checks on executive power.

None of these contradictions exists in isolation.

Together they reveal a dangerous shift in the relationship between the citizen and the state.

Rights that the Declaration of Independence described as inalienable are increasingly treated as permissions—granted when convenient, withheld when inconvenient, and interpreted according to political priorities rather than constitutional principle.

That is not merely bad policy.

It is a repudiation of the American Revolution, because the Revolution began with one radical claim: freedom is our birthright.

To listen to those in power, however, freedom is a privilege reserved for a select few: the politically favored, the ideologically acceptable, the obedient, the compliant, the useful.

The Declaration of Independence advanced a very different idea: that all people are endowed by their Creator with certain unalienable rights.

That was the real revolution.

America’s founders may have disagreed—often grievously and hypocritically—about who qualified as “the people,” but they were united in one essential conviction: our rights do not come from government.

The government exists to serve us.

Government exists to safeguard and protect our inalienable rights—not ration them, redefine them or revoke them.

That distinction matters.

Once government is allowed to decide whose rights count, rights cease to be rights at all.

They become privileges.

And privileges can always be revoked.

For 250 years, Americans have treated the Declaration of Independence as the nation's birth certificate, but the Declaration was never merely a birth certificate—it was a warning label.

It was written by people who understood that freedom is fragile, power is relentless, and no generation remains free simply because an earlier generation fought for liberty.

The Declaration was not a celebration of government.

It was an indictment of government.

It catalogued the abuses of a ruler who had placed himself above the law, treated the people as subjects rather than sovereigns, undermined representative government, obstructed justice, maintained standing armies, imposed surveillance, abused power and waged war against the very people he claimed to govern.

The names have changed. The machinery has changed. The technology has changed.

The danger has not.

That is why the Constitution matters.

The Constitution translated the warnings of the Declaration into law.

Through separated powers, checks and balances, federalism, and a Bill of Rights, the founders sought to bind government down with what Thomas Jefferson called “the chains of the Constitution.”

James Madison understood that the greatest threat to liberty would not come from a foreign king but from our own government if left unchecked.

“If men were angels,” Madison famously observed, “no government would be necessary.”

Because those entrusted with power are not angels, the Constitution—especially the Bill of Rights—was designed to restrain it.

The Constitution assumes that power will seek to expand. That is why it divides power. That is why it checks power.

That is why it places certain freedoms beyond the reach of government majorities, executive decrees, judicial maneuvering and political convenience.

Yet those constitutional restraints are increasingly being loosened—not by formal amendment, but by precedent, emergency powers, executive practice, bureaucratic discretion and public indifference.

The warnings are no longer theoretical.

Even the judiciary has increasingly become part of that transformation.

Rather than serving as a reliable constitutional brake on concentrated power, the U.S. Supreme Court has repeatedly removed barriers that once restrained the executive branch: presidential immunity, limits on nationwide injunctions, and expanded presidential power to fire independent agency officials.

Each decision may be explained on its own legal reasoning. Together they tell a larger constitutional story: the presidency grows stronger, while the people’s ability to restrain it grows weaker.

In Trump v. United States, the Court declared that presidents enjoy sweeping immunity from criminal prosecution for official acts, placing many exercises of executive power beyond the reach of laws that govern every other citizen.

In Trump v. CASA, the Court curtailed the power of lower federal courts to issue nationwide injunctions, making it more difficult to halt unconstitutional executive actions before they take effect across the country.

In Trump v. Slaughter, the Court expanded presidential control over supposedly independent agencies by strengthening the president’s power to remove agency officials.

Even where the Court has reaffirmed constitutional protections—as it did in rejecting the Trump administration’s attempt to undermine birthright citizenship—it has still left intact a dangerous constitutional reality: executive overreach can move faster than meaningful accountability.

The founders would have recognized this danger immediately. They had just fought a revolution against concentrated executive power.

Tyranny today may no longer look like King George III, but it is no less dangerous when it arrives wrapped in the language of national security, public safety, emergency management, border control, religious liberty, law and order, governmental efficiency and executive necessity.

It promises protection while steadily expanding surveillance, policing, executive discretion and bureaucratic control. It wraps itself in flags. It quotes Scripture. It invokes patriotism. It salutes the troops.

It speaks the language of freedom while making freedom conditional on obedience.

Thomas Jefferson would have recognized the pattern.

If Jefferson were drafting the Declaration of Independence today, the list of grievances would look strikingly familiar.

Instead of protesting quartered soldiers, he would likely protest militarized police forces equipped like occupying armies.

Instead of denouncing general warrants, he would condemn dragnet surveillance, geofence searches, facial recognition technology and warrantless tracking capable of monitoring millions of innocent people.

Instead of objecting to arbitrary searches of homes and papers, he would confront a government that can peer into our phones, financial records, online communications, travel histories and biometric data with astonishing ease.

Instead of warning against standing armies, he would question a permanent national security apparatus that wages endless wars abroad while steadily importing the tactics of war into policing at home.

Instead of protesting taxation without representation, he might challenge an administrative state that increasingly governs through executive orders, emergency declarations and unelected bureaucracies insulated from meaningful public accountability.

Instead of condemning the obstruction of justice, he would confront a system in which courts too often defer to power, Congress too often abdicates its authority, and presidents increasingly insist they may act first and answer later—if they answer at all.

Instead of accusing a distant monarch of placing himself above the law, he would confront a constitutional system in which the presidency has become imperial, the bureaucracy has become unaccountable, the surveillance state has become omnipresent, and the citizen has been reduced to a suspect, a data point, a taxpayer, a voter, a consumer and, too often, a pawn.

The machinery of power has grown unimaginably more sophisticated, but the central question remains exactly the same: who governs—the people or the government itself?

This is why the Fourth of July matters.

It was never intended as a celebration of government power. It is a celebration of liberty and self-government—the moment ordinary people declared that no ruler, no legislature, no court and no army should ever become too powerful to challenge.

That is precisely the principle now being tested.

Nowhere has this inversion of constitutional government been more visible than under the Trump administration, where rights increasingly appear to depend not on constitutional principle but on political identity, ideological conformity and executive preference.

The danger is not simply that government power is expanding. It is that government is claiming the authority to decide who possesses constitutional rights and who does not.

Freedom of speech, but only for those whose speech government approves. Religious liberty, but only for the beliefs those in power favor. Due process, but only for the people government considers worthy. Equal protection, but only for the politically acceptable. Citizenship, but only for the babies government chooses to recognize. Accountability, but only for ordinary citizens and not for presidents cloaked in immunity.

This is how constitutional government is hollowed out.

Not all at once.

Not always with tanks in the streets.

Not always with a formal suspension of the Constitution.

Liberty rarely vanishes in one dramatic act. It recedes gradually—emergency by emergency, exception by exception, court ruling by court ruling, executive order by executive order, crisis by crisis.

It disappears when due process becomes optional, habeas corpus is treated as expendable, speech is chilled, surveillance becomes routine, government secrecy expands, religious freedom becomes selective, citizenship becomes negotiable, oversight bodies can be fired at will, and executive power grows while meaningful accountability contracts.

It disappears when “we the people” grow so accustomed to fusion centers, surveillance cameras, geofence warrants, AI-assisted policing, militarized SWAT raids, civil asset forfeiture, government watchlists, facial recognition systems, warrantless tracking, endless wars, executive decrees and perpetual states of emergency that constitutional government becomes little more than a ceremonial ideal.

The most dangerous lie of the modern police state is not that government possesses extraordinary powers—it is that those powers are necessary, permanent and beyond question.

Every emergency becomes justification for another exception. Every crisis becomes an opportunity to normalize another expansion of authority. Temporary measures become permanent institutions.

Extraordinary powers become ordinary tools of government. And while the machinery of control expands, the machinery of distraction conspires to keep us from focusing on the government’s self-serving corruption, power grabs and abuses.

Authoritarian regimes require a populace that is too distracted—by spectacle, by outrage, by entertainment, by partisan tribalism, by endless political theater, by what the Romans called bread and circuses, by what we might call militainment—to get outraged enough to do something about the theft of their liberties.

When so-called representatives of the people celebrate power more than liberty, spectacle more than substance, and obedience more than accountability, that is not patriotism. It is conditioning.

The founders understood the danger of that conditioning. They distrusted concentrated power, feared standing armies, insisted on constitutional restraint and placed sovereignty not in rulers but in the people.

They pledged allegiance not to personalities, parties or power, but to enduring ideals and principles.

The founders did not create freedom.

What they created was a constitutional framework designed to preserve it.

Whether that framework survives depends upon whether the American people continue using it.

As America approaches its 250th anniversary, the most important question is not whether the nation survived.

The real question is whether the principles that inspired the Revolution have survived as well.

Have we preserved the belief that government derives its just powers from the consent of the governed? Have we preserved the conviction that no one is above the law? Have we preserved the understanding that liberty requires eternal vigilance?

Or have we quietly accepted the idea that rights exist only at the pleasure of those in power?

If we truly wish to honor the spirit of 1776, we must restore the constitutional restraints that made liberty possible in the first place.

Bind the government, including the president, down with the chains of the Constitution.

James Madison understood that written constitutions alone cannot preserve liberty.

Rights written on paper become little more than “parchment barriers” unless the people insist that those limits be honored.

The Constitution cannot defend itself. Neither can freedom.

That was the lesson of independence.

It remains the warning of our time.

The unfinished work of the American Revolution was never about building a stronger government. It was about preserving a free people capable of restraining their government.

Two hundred and fifty years ago, Jefferson wrote that governments derive “their just powers from the consent of the governed.”

He did not write that governments derive their powers from fear. Or emergency. Or efficiency. Or surveillance. Or military strength. Or presidential immunity. Or partisan loyalty.

He wrote that governments exist to secure rights that already belong to the people.

The generation of 1776 pledged “their Lives, their Fortunes and their sacred Honor” because they understood that liberty would never preserve itself.

Our generation is unlikely to be asked to sign another Declaration of Independence.

But we are being asked something just as consequential: whether we will preserve the constitutional safeguards entrusted to us or quietly surrender them for the promise of security, efficiency and political victory.

Every generation inherits the Revolution unfinished.

Every generation must decide whether to continue its work—or abandon it.

As I make clear in Battlefield America: The War on the American People and its fictional counterpart The Erik Blair Diaries, freedom does not defend itself.

Thus, the question before us is no longer whether America has reached its 250th birthday. The question is whether Americans still believe what made that birthday worth celebrating in the first place.

Preserving that birthright is our responsibility.

The Constitution is not self-enforcing.

Courts will not always protect liberty. Congress will not always defend its authority. Presidents will rarely surrender power voluntarily.

Which leaves only one remaining guardian of constitutional government: We the people.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Sun, 07/05/2026 - 23:20

Trump: 'Netanyahu Knows Who The Boss Is' After Phone Call

President Trump and Israeli Prime Minister Benjamin Netanyahu could meet as early as next week after the US leader returns from the annual NATO summit in Ankara, Turkey.

That's what Trump told Axios on Saturday after a Friday phone call, wherein the Israeli PM congratulated the American leader on the 250th Independence Day of the United States. Trump said something very interesting in the wake of the call: "We get along very good. [Netanyahu] knows who the boss is," he told Axios.

via Reuters

US-Israel relations have been deeply strained of late, given deep Israeli reluctance on the US-Iran MoU signing, as well as the US-mediated ceasefire in Lebanon.

Israel fears that the end result to a hasty peace could be a nuclear-armed Iran, and some Israeli leaders have gone so far as to say military action must not stop until there's true regime change.

"During their conversation, the Prime Minister said that the United States is a guarantor of global freedom, and that Israel greatly values the close relationship between the two nations. Prime Minister Netanyahu and President Trump agreed to meet soon in the United States," Netanyahu's office said of the Saturday call.

On the issue of controversy over the US-Israel relationship and the push to launch Operation Epic Fury, Axios provides the following:

• "Many of Trump's closest advisers think that Bibi was wrong about everything," a U.S. official said.
• Trump lashed out at Netanyahu over Israel's escalation in Lebanon in a phone call last month, calling the prime minister "crazy" and accusing him of ingratitude.
• The tensions have deepened a broader Republican schism over Israel and the war, with MAGA influencers like Tucker Carlson accusing Trump of being beholden to Netanyahu.

Indeed there seems of late a concerted White House effort to dispel this narrative. It seems that Trump is at least now more conscientious about it, given he's publicly seeking to assure Americans that Bibi "knows who the boss is."

A prior Trump-Bibi call in June didn't go so well. At that time reports based on US officials indicated that President Trump ripped into Netanyahu, cussing at him and the president essentially 'steamrolled' him - angry over breaking the Lebanon truce and demanding that Israel's military not attack Beirut.

Trump is said to have told Netanyahu "you’re fucking crazy’" while demanding Lebanon truce: "I’m saving your ass," he also reportedly said. Israeli officials have sought to downplay these negative reports...

Israeli Prime Minister Benjamin Netanyahu dismissed reports of a growing rift with U.S. President Donald Trump, calling their relationship “excellent.”

Speaking to Fox News, Netanyahu said the two have occasional “tactical disagreements,” but added, “In 99% of cases we see eye…

— Open Source Intel (@Osint613) July 5, 2026

Since then, the US has essentially forced Israel to acknowledge the Lebanon ceasefire - though it should be noted that the IDF occupation has been allowed to continue in southern Lebanon - and direct exchanges of missile fire between Tehran and Tel Aviv has been silenced.

Tyler Durden Sun, 07/05/2026 - 22:45

Charlie Kirk Assassination Case Heads For Key Hearing

Authored by Janice Hisle via The Epoch Times,

After months of wrangling, the case of Charlie Kirk's alleged assassin, Tyler James Robinson, is now headed toward its first major legal threshold.

Tyler Robinson, accused of killing conservative commentator Charlie Kirk last year, appears during a hearing in Utah's Fourth District Court in Provo, Utah, on Dec. 11, 2025. Rick Egan/The Salt Lake Tribune via AP, Pool

Robinson, 23, is accused of fatally shooting Kirk, the 31-year-old founder of the conservative Turning Point USA youth movement, while Kirk spoke at Utah Valley University on Sept. 10, 2025.

During a four-day proceeding set to begin on July 6 in a Utah courtroom, prosecutors must reveal some of the evidence they have against Robinson.

This preliminary hearing requires the evidence to pass two key tests. And the judge overseeing the case has set strict rules for people who will be attending, including news crews.

Here is what to expect, based on general legal principles, Utah law, and rulings from Utah Fourth District Court Judge Tony Graf Jr.

Why The Hearing Matters

Not all U.S. criminal courts use a preliminary hearing to put evidence through an initial screening, but Utah courts do.

The hearing is like a "mini trial," which comes with advantages and disadvantages for both sides in a criminal case.

Prosecutors have already shared much evidence with Robinson's lawyers, as criminal law requires. But this hearing requires them to show their cards more specifically.

That will give defense lawyers a chance to poke holes in some of the evidence that prosecutors have against Robinson.

However, prosecutors have a wild card in their favor. At this hearing, they may present some evidence that would not be allowed during a trial.

In Utah, that evidence includes "reliable hearsay" testimony - statements that a witness heard someone else make. Usually, hearsay is forbidden, and witnesses must testify only about what they personally stated or observed.

The law requires prosecutors to present enough evidence to persuade Graf that they have "probable cause." That consists of two parts: First, they must provide sufficient proof that a reasonable person could conclude that the alleged crimes happened. Second, that evidence must show that the accused probably committed those offenses.

Open To The Public, With Restrictions

Members of the public and news reporters are allowed to attend the preliminary hearing, the judge ruled on June 1, despite objections from Robinson's lawyers. They wanted to close all or part of the hearing.

Instead, access will be granted, subject to limited seating and strict rules, the judge said. He gave a lengthy explanation of the rules on June 26.

The rules are necessary, he said, to ensure everyone's "safety and well-being" and to preserve fair trial rights for Robinson, as well as for Kirk's widow, Erika Kirk.

No one - except specified people - will be allowed to bring electronic devices to Graf's courtroom in Provo, Utah; he is also banning the devices from the entire fourth floor of that building, outside his courtroom.

People who are exempt from that rule include attorneys and their support staff, as well as media personnel who receive Graf's approval.

"In addition, every person who will be in attendance will be afforded the dignity and respect due to them," Graf said.

He cited an order he issued on Sept. 24, 2025, regarding courtroom decorum.

"All spectators shall be quiet, civil, and orderly," Graf said. "Spectators shall not engage in any distracting, disruptive, provocative, disrespectful, uncivil, or threatening behavior of any kind."

Further, he is forbidding attendees from making any gestures, including shaking or nodding heads to signal disagreement or agreement with statements.

No one is allowed "to wear or display pins, buttons, signs, clothing, or photographs expressing support for or against any person," Graf said.

"The court respectfully asks all persons seeking admission to conduct themselves in an orderly and respectful manner while court staff and security personnel carry out their responsibilities, including security screening and the assignment of wristbands for entry into the hearing," he said.

What Could Happen Next?

Because probable cause is considered a low bar to clear, it is rare for a case to fail at the preliminary hearing stage.

But if that does happen, the case probably would continue after a delay. Prosecutors would be allowed to add more evidence and refile the charges.

Most preliminary hearings end with the case being "bound over" for trial.

At trial, the standard of proof that prosecutors must meet is the highest in the criminal justice system. It is "beyond a reasonable doubt."

This standard requires "more certainty than any other burden of proof in law," according to Cornell Law School's Legal Information Institute.

Beyond a reasonable doubt does not mean beyond all imaginary doubt. It means that the judge or jury is "firmly convinced" that the defendant committed the alleged crimes.

If Robinson is convicted as charged, he could face the death penalty.

Graf on June 26 rejected defense lawyers' request to remove the death penalty as an option. However, he found prosecutors in contempt because they made statements about being able to clear the "reasonable doubt" hurdle.

To remedy that violation of his order prohibiting such an out-of-court statement, the judge said he will work with attorneys on both sides.

They will put together an extra detailed jury selection questionnaire, and a larger pool of potential jurors might need to be summoned, Graf said.

Tyler Durden Sun, 07/05/2026 - 22:10

On 250th Anniversary, A Look Back At Gun Ownership In America

Authored by Michael Clements via The Epoch Times,

"A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."

The Second Amendment to the U.S. Constitution guarantees what may be the most uniquely American of all rights. Those 27 words have inspired millions of words in thousands of debates over the Amendment's meaning and what, if any, limits may apply.

"The Shot Heard 'Round the World," 2009, by Domenick D'Andrea. Public Domain

There is no question that firearms played a pivotal role in the birth and growth of the United States of America.

From the Pilgrims' matchlock muskets and the six shooters carried by cowboys, to the modern semiautomatic rifles wielded by Korean business owners in the Los Angeles riots of 1992, guns are an integral part of American culture.

The right to keep and bear arms is unique, says Amy Swearer, a senior legal fellow with Advancing American Freedom and Second Amendment scholar.

"It's an incredibly short list [of countries that recognize the right to own guns], and there are none of them have anything in theory or practice that is what I would say [is] a true equivalent of the American right to keep and bear arms," Swearer told The Epoch Times.

Based on sales data, permit applications, background checks and other factors, there are an estimated 400 million to 500 million firearms in civilian hands in the United States, according to the Sixguns Fraternity. This is an average of two firearms for every person over age 18.

Yet, while America celebrates 250 years as a society that honors the individual right to keep and bear arms, gun ownership remains one of the nation's most divisive issues.

Gun control groups did not respond to emails seeking comment for this article, but many have posted their concerns online. Gun control advocates say violence intervention strategies, strict gun control - including bans - and tighter regulation of the firearms industry are elements of common-sense gun laws.

They point to high-profile stories of mass shootings, school shootings, and violent crime involving firearms.

"The gun homicide rate in the U.S. is 26 times higher than that of other developed countries, but research shows that common-sense public safety laws can reduce gun violence and save lives," Everytown for Gun Safety, states on its website.

The group, along with others, say gunshots are the number one cause of death for American children.

The Centers for Disease Prevention and Control reports that the top cause of death for children between 1- and 17-years-old are "unintentional injuries." Matthew Garnett with the CDC's National Center for Health Statistics, defines unintentional injury as, deaths from fatal injuries that were "unintended, unplanned, and did not occur on purpose."

"Unintentional injury deaths include a wide array of mechanisms, with the four most common being: poisoning, motor vehicle crashes, drowning, and falls," Garnett wrote.

Second Amendment activists say gun control policies harm law abiding citizens rather than criminals. They say the data presented by gun control organizations are cherry-picked or manipulated to get the desired result.

Gun Owners of America says Everytown skews its data on children killed by firearms because it includes 18- and 19-year-olds. Generally, most data involving children only includes children aged 1 to 17, while 18- and 19-year-olds are considered adults.

Public safety has always played a role in American gun legislation, says Robert J. Spitzer, professor emeritus at the State University of New York, College at Cortland.

This includes laws on where and how guns could be carried, who could own them, and which arms are protected by the Second Amendment.

Spitzer has written extensively on the Second Amendment. In a 2017 article published by Duke University, "Gun Law History in the United States and Second Amendment Rights," he describes gun laws from pre-Revolutionary times to the modern day.

He contends that while America has a "wild west" reputation, it has also worked to tame that reputation. Spitzer wrote that "stand-your-ground" laws, the unlicensed carry of firearms, allowing those younger than 21 to legally carry a gun in public, and similar policies, do not align with America's tradition of gun regulation.

"[These] laws are not a return to the past. They are a refutation of America's past, and a determined march away from America's gun regulation tradition," Spitzer wrote. "And these changes have nothing to do with improving safety or security in society, but everything to do with politics."

So, what did the founders have to say? How did they view guns and their impact on public safety? And what route have the courts taken in trying to answer those questions?

Founding View Of Guns

The founders appear to have considered the ability to defend oneself a responsibility as much as a right. As Englishmen and lawyers, they studied English Common Law. Most of them were familiar with the "Commentaries on the Laws of England," by Sir William Blackstone.

Blackstone was an English jurist and legal scholar. His commentaries are considered an authoritative text when it comes to English law.

In the first chapter, Blackstone outlines the process for relief when a person's rights are violated or they are violently attacked. The first avenue is the court and the law, according to Blackstone. If that fails, the next step is a petition to the King and Parliament, and "lastly to the right of having and using arms for self-preservation and defense."

The right to be armed for self-defense underpinned legal arguments John Adams, Founding Father and second U.S. president, made when defending British soldiers charged with murder in the 1770 "Boston Massacre." His argument, voiced before there was a second amendment, informs his, and other founders', world view on the matter.

On March 5, 1770, a group of colonists was berating a British soldier guarding the Customs House in Boston. British Army Capt. Thomas Preston brought a squad of seven soldiers to support the lone guard.

As the situation grew tense, one of the soldiers fired his musket. Thinking the order to fire had been given, the others followed suit. Three colonists, including a black sailor named Crispus Attucks, were killed immediately. Two others died later.

Adams, Josiah Quincy Jr., and Robert Auchmuty, Jr., represented Preston in court. Adams argued that the soldiers had every reason to believe they were in danger.

"Here every private person is authorized to arm himself, and on the strength of this authority, I do not deny the inhabitants had a right to arm themselves at that time, for their defence, not for offence, that distinction is material and must be attended to," Adams stated.

Preston was acquitted of his murder charges.

Civilian gun ownership is necessary for a "well-regulated militia," according to Stephen Halbrook, a Fairfax, Virginia-based attorney and senior fellow with the Independent Institute.

"It was considered a duty," Halbrook told The Epoch Times.

Halbrook pointed out that the first settlement at Jamestown, Virginia, almost failed partly because of conflict with Indians who were hostile to the colonists.

"You had a responsibility ... to have arms in your home and basically to carry them around with you. After the Constitution comes into being in 1792 the federal militia laws ... required, that every able-bodied white male citizen would have to provide arms for himself and enroll in the militia, and to go when called to duty," Halbrook said.

This was outlined by Alexander Hamilton in Federalist Paper No. 29. Hamilton explained that the militia consists of armed residents prepared to defend themselves and their communities.

According to Hamilton, "well-regulated" means the members will "acquire the degree of proficiency in military functions which would be essential to their usefulness." While Hamilton called on the federal government to support the militias, he stressed that they would operate under local authority.

"Reserving to the states respectively the appointment of the officers, and the authority of training the militia according to the discipline prescribed by Congress," Hamilton wrote.

The federal government has a militia law, 10 U.S. Code § 246 - Militia: Composition and Classes, as do 45 states.

The federal law states that the unorganized militia is made up of all able-bodied males between the ages of 17 and 45 who are not members of the National Guard or Naval Militia, and females who are members of the National Guard and Naval Militia.

Nevada, Montana, Wyoming, North Dakota, and West Virginia do not have established militias. Twenty-two states have active militias, though Connecticut's militia is ceremonial. The rest of the state militias are inactive unless they are called to service.

Self-Defense

Swearer said that America has drifted away from the original intent of the militias. But there have been militia-style actions.

During the 1992 Los Angeles riots that erupted after four police officers were acquitted of charges stemming from the March 3, 1991, beating of Rodney King, several Korean business and property owners took up arms to defend their homes and businesses.

As the riots spread into the area known as Koreatown, many business owners and residents noticed that police were standing by, watching. So, the Korean residents armed themselves, got on their roofs, and held off the rioters. They became known as the "Rooftop Koreans."

"It is arguably a militia usage. It's that same understanding of the people protecting themselves when the government fails to protect them," Swearer said.

It was hardly the first time Americans armed themselves to defend their property. The United States was born in armed conflict.

Halbrook said that around the time of the Boston Massacre, the first gun control laws were passed. As Spitzer noted in his article, many of the laws were focused on public safety.

Firearms regulations from this era covered brandishing firearms, bans on certain types of weapons, carry restrictions, dueling, hunting, inspection of gun manufacturing facilities, and storage requirements, and the responsible discharge of firearms, among others.

There were also laws on who could possess guns. Halbrook said the main objective was to prevent certain groups from being armed.

For example, in his article, Spitzer points out that in 1619 the first General Assembly made it illegal to sell guns, powder, or shot, to Indians. A person convicted under the law faced hanging.

As part of a law requiring church attendance, the General Assembly included language requiring that "all such as bear arms shall bring their pieces, swords, powder and shot." Though not specified in the law, the likely reason for this requirement is to defend the colonists gathered in the church.

These early gun prohibitions were not focused as much on the guns as who could carry them. And, like the colonial governments, America has prohibitions on who can keep and bear arms.

Today, as in those early days, the United States prevents felons, the mentally ill, and others who could be considered dangerous to society from legally owning firearms. This was upheld in the 1980 U.S. Supreme Court case, Lewis v. U.S.

In that case, the court ruled that under the Omnibus Crime Control and Safe Streets Act of 1968, "the fact of a felony conviction imposes firearm disability until the conviction is vacated or the felon is relieved of his disability by some affirmative action," such as having his rights legally restored.

This legal concept was affirmed in the June 2024 decision in United States v. Rahimi, when the court ruled that disarming people deemed by a court to be dangerous aligns with the Second Amendment.

According to the court record, Zackey Rahimi, of Arlington, Texas, abused his girlfriend. Subsequently, she won a domestic violence restraining order against him. Rahimi was disarmed under 18 USC 922 (g) (8), the federal law that bars people under such an order from possessing or purchasing firearms.

After agreeing to the order, he assaulted another woman and was involved in at least five shootings. His firearms were confiscated because of the restraining order. Rahimi appealed the confiscation to the Court of Appeals for the Fifth Circuit, which found the law unconstitutional.

The Supreme Court reversed that.

"Since the Founding, the Nation's firearm laws have included regulations to stop individuals who threaten physical harm to others from misusing firearms," the decision states. "As applied to the facts here, Section 922(g)(8) fits within this tradition."

In a subsequent case, United States v. Hemani, the court in June 2026 rejected the idea that the federal government could automatically strip someone of their right to bear arms based on the mere fact that they took drugs. Writing for the majority, Justice Neil Gorsuch indicated more consideration was needed over whether the individual had lost their capacity to reason.

Gentleman's Honor

Halford said it wasn't until the early 19th Century that the first laws resembling modern gun control were passed. He said that in 1813 Kentucky and Louisiana passed laws prohibiting the concealed carry of weapons, including knives and other weapons.

He pointed out that the first such laws were passed in the South, but it was years before northern states passed similar laws. Halbrook said the new law had more to do with the concept of a Southern gentleman's honor.

"In Kentucky ... you had the code of dueling ... and it would be ungentlemanly to carry an arm concealed," Halbrook said. "It was kind of a macho thing ... only a person with bad intentions would hide [his weapons]."

Prohibitions based on politics, race, and similar factors did not fare well with the judicial system.

In the 1857 Dred Scott decision, the Supreme Court found that slaves were not citizens and did not have Constitutional rights, including Second Amendment rights.

"It cannot be believed that the large slaveholding States regarded them as included in the word citizens ... to keep and carry arms wherever they went," the decision reads in part.

In 1865, the Freedman's Bureau was established to ensure that freed slaves enjoyed the same civil rights as other Americans, including their Second Amendment rights. Though there were subsequent attempts to deny black Americans their civil rights, the court has generally ruled those laws unconstitutional.

In the following decades, a variety of gun laws were passed with the objective of promoting safety or preventing crime. Three of the most notable are the National Firearms Act of 1934, the Gun Control Act of 1968, and the Firearms Owners Protection Act of 1986.

The National Firearms Act was a response to organized crime in the 1920s and 1930s. The law designated some weapons as dangerous or unusual. These included fully automatic machine guns, short-barreled rifles and shotguns, and silencers.

Backers of the law knew it was doomed as a gun-control measure. So, it was passed as Congress exercising its taxing authority. But, according to the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) website, the tax was a secondary purpose.

"Its underlying purpose was to curtail, if not prohibit, transactions in [National Firearms Act] firearms," the website states.

Only Federal Firearms License holders who pay a $200 tax can deal in National Firearms Act items. The tax, which remained $200 until last year when it was reduced to $0, was meant to inhibit ownership of National Firearms Act items.

The Gun Control Act corrected the constitutional problems in the National Firearms Act.

In 1968, the Supreme Court found in Haynes v. United States that forcing a person to register a National Firearms Act item, then prosecuting that person using information from the registration process violated the Fifth Amendment's protection against self-incrimination.

In 1986, the Firearm Owners' Protection Act was enacted. It added to the definition of "silencer" combinations of parts, and any part to make a silencer to the list of National Firearms Act items. It also prohibited the transfer or ownership of machine guns except for state and law enforcement agencies, and machine guns lawfully owned prior to May 19, 1986.

But in the 2000s, three landmark decisions was issued that turned the gun debate upside down.

Supreme Court Returns To History

Prior to 2008, the courts used a two-step "means test" to determine if a gun law was constitutional. Under this method, courts considered whether a law would obtain a favorable objective - such as crime reduction - even if it did not strictly align with the text of the Second Amendment.

It was accepted that a law might infringe on the right, but that could be acceptable if the end result outweighed the degree of restriction.

In its June 2022 decision in New York State Rifle and Pistol Association v. Bruen the court said the two-step approach was excessive.

By a 6-3 vote, the court concluded that the standard for applying the Second Amendment was determining whether the gun control policy was consistent with the nation's history and tradition. The court also found that New York State's licensing scheme, along with prohibitions on carrying guns in public, were unconstitutional.

Writing for the majority, Justice Clarence Thomas said any gun control law must align with the Second Amendment's language and have a "historical analog" from the time of the Amendment's ratification to pass constitutional muster.

This meant that if the law covered the activity listed in the amendment, specifically keeping and bear arms, it was unconstitutional unless a similar law existed around the time of the amendment's ratification.

The Bruen decision shook the gun debate and will impact Second Amendment cases for years to come. Two other Supreme Court rulings helped set the stage for the landmark decision.

In the 2008 case of District of Columbia v. Heller, the high court ruled that the Washington's prohibition on handguns, and requirements that privately owned guns be kept unloaded under lock and key, violated the Second Amendment.

In Heller, the court found that the Amendment protects an individual right to carry firearms for protection, which the District's law made all but impossible.

Then on June 28, 2010, the Supreme court ruled 5-4, in MacDonald v. Chicago, that the Second Amendment applied to state and local governments, as well as to the federal government.

Post-Bruen Developments

After Bruen, some states with strict gun laws, including New York, California, Hawaii, Illinois, Rhode Island, and others doubled down passing so-called "Bruen response laws."

Hawaii implemented a law prohibiting firearms on all private property open to the public unless the property owner gives express permission to gun owners to carry on their property.

The Supreme Court recently struck down that law in Wolford v. Lopez, ruling that it placed an undue burden on licensed gun owners.

Rhode Island, Virginia, and Illinois banned certain semiautomatic firearms, so-called assault weapons. New York and California instituted background checks for ammunition purchases in 2023.

As she announced the ammunition background check law, New York Gov. Kathy Hochul said her state was dedicated to promoting gun safety.

"We know this has nothing to do with lawful gun owners, nothing to do with them at all. These are people who have been convicted of felonies or other categories of people that should be prohibited from firearms and ammunition," she said.

At the time, President Joe Biden was in the White House and had successfully implemented much of his agenda to increase firearms regulation. The Bipartisan Safer Communities Act, which included funding for violence intervention programs as well as stronger gun control laws, was enacted in 2022.

Biden opened an Office of Gun Violence Prevention in the White House. The Bureau of Alcohol, Tobacco, Firearms, and Explosives was taking a much tougher stand on regulating firearms manufacturers and dealers through its zero-tolerance policy, and he was making strides toward implementing universal background checks.

Gun rights advocates, on the other hand, have been energized by the Supreme Court decisions, as well as what they consider to be a pro-Second Amendment president in Donald Trump.

Trump is currently 18 months into his second term. He closed the office in the White House, dismantled almost all of Biden's gun control programs and opened a Second Amendment office in the Department of Justice's Civil Rights Division.

Gun rights activists said there is more to be done. They are calling for the repeal of the National Firearms Act and Gun Control Act, the shutdown of the ATF, and the destruction of billions of gun sales records, which they say the agency is using to build an illegal registry.

The ATF denies it has such a registry.

The experts say that, like all the other constitutional rights, the Second Amendment will continue to be examined and possibly limited or expanded.

Halbrook offered advice for gun owners that could be applied to either side of the debate.

"They have to pay attention to politics, they have to vote, they have to support candidates who are going to be on their side, and they have to vote against those who are against them," Halbrook said.

The second amendment is spelled on a U.S. flag in a gun store in Rio Rico, Santa Cruz County, Ariz., on Sept. 17, 2025. Charly Triballeau/AFP via Getty Images Tyler Durden Sun, 07/05/2026 - 21:00

South Korea Plans Investment Fund From Chip Tax Revenue

At a time when chip and memory companies are disproportionately receiving the benefits of hundreds of billions in capex, and a growing number of politicians are consider ways to socialize these outsized gains, Yonhap News reported that South Korea plans to create an investment fund using tax revenue from its burgeoning semiconductor industry to finance long-term economic growth.

In a senior-level meeting of the government and the ruling party, presidential chief of staff Kang Hoon-sik said the additional revenue from the country’s chip industry should be invested for future growth, the news agency reported.

“By launching the fund with the extra tax revenue, we aim to make bold investments for the future, including supporting the three mega projects, creating future growth engines, addressing K-shaped polarization, and supporting housing, startups and jobs for those in their 20s and 30s,” Kang said.

South Korea recently unveiled its three mega projects initiative, which involves significant investment in semiconductors, physical AI and data centers.

Investments of at least 1,350 trillion won ($880 billion) from companies including Samsung Electronics and SK Hynix will be made, as the government looks to strengthen the country’s long-term competitiveness and position itself as an AI powerhouse.

Samsung Group and SK Group said they plan to build two chipmaking plants apiece in the southwest for a total of 800 trillion won, to rapidly expand production capacity to meet increasing demand. South Korea also announced 550 trillion won of investment from companies including internet leader Naver Corp. to build 8.4 gigawatts of AI data-center capacity by 2029.

The country aims to double its memory production capacity within five years and secure world-class manufacturing capabilities to pull far ahead of competing nations, the industry ministry said in a statement. South Korea must move faster than its global rivals to secure leadership in chips, data centers and physical AI, President Lee Jae Myung said at a briefing where he called the Samsung and SK Hynix leaders “national heroes.” 

Kang said the mega projects will help create new growth engines to determine the country’s future over the next 20 to 30 years, Yonhap added.

Tyler Durden Sun, 07/05/2026 - 20:58

Nvidia Supplier Hon Hai Sales Beat As Continued AI Demand Offsets Consumer Electronics Decline

Nvidia’s server assembly partner Hon Hai Precision Industry reported a bigger-than-expected 40% jump in quarterly sales and said AI demand is growing further, according to Bloomberg. 

Hon Hai’s revenue grew to NT$2.51 trillion ($79 billion) in the three months to June, beating the average of analyst estimates of NT$2.37 trillion. Demand for AI-related products drove sales, compensating for a slight decline in demand from consumer electronics and computing products, where soaring memory prices have resulted in widespread demand destruction.

Shipments of AI racks are expected to maintain their momentum in the current quarter, while demand for information and communications technology products is entering peak season, the company said in a statement Sunday quoted by Bloomberg. Overall operations are expected to grow both quarter-on-quarter and year-on-year.

Hon Hai, also known as Foxconn, has established itself as a key AI hardware player by assembling servers that house Nvidia accelerators. This comes as Alphabet, Amazon, Meta Platforms and Microsoft are setting aside about $725 billion for AI spending this year, a total which Goldman believes could rise as high as $1.4 trillion in 2027, even as warnings abound about overcapacity and questions about how to monetize the technology grow louder.

In March, the Taiwanese company projected strong sales growth in 2026, fueled by sustained AI momentum. It derives a significant chunk of sales from assembling Apple’s iPhones and MacBooks and is in a position to benefit from any positive reception for the latest iPhone 17 product family, although in light of the upcoming price hikes across Apple products it remains to be seen what consumer reception will be for the higher-priced products.

But like many electronics manufacturers, Hon Hai faces a shortage of memory chips used in a wide range of products from smartphones to PCs and servers. Executives have said the crunch should not significantly impact demand for premium handset and computer products the company makes for major customers.

Tyler Durden Sun, 07/05/2026 - 20:34

Iran To Grant China, 'Friendly' Countries 'Special Consideration' On Hormuz Fees

Via The Cradle

Iran's ambassador to China stated on Saturday that the Islamic Republic would impose service fees on vessels transiting the Strait of Hormuz, but that China and other "friendly" countries would be granted "special considerations."

During a speech at the World Peace Forum in Beijing on Saturday, Iranian Ambassador Abdolreza Rahmani Fazli affirmed that Iran was working in "collaboration and cooperation" with Oman on "new arrangements" for the strait.

via Associated Press

Ships passing through Hormuz, through which one-fifth of the world's oil exports moved before the US-Israeli war on Iran, must travel along Iranian territory to the north and Omani territory to the south.

"As a country where the Hormuz is part of its territorial waters, we will definitely charge service fees," Fazli said. However, the fee would not be a "toll," he added, as tolls are considered illegal under international maritime law. Instead, the fees would be for security and administration.

"These new arrangements will be concerning guaranteeing the security of passage through the Straits of Hormuz, supervision of the passage of the vessels … and also guaranteeing and dealing with the environmental consequences of the massive number of ships," he stated.

Iran's NourNews agency quoted the ambassador as saying that "special considerations" would be applied to China and other friendly nations when determining the level and type of service fees charged for their vessels.

Beijing began importing large amounts of Iranian crude in the early 1990s as China industrialized and sought new energy sources to shift away from coal.

Beijing's purchases typically account for roughly 90 percent of Iran's oil exports, providing tens of billions of dollars in annual revenue that support Iran's government and military. To bypass US economic sanctions, much of the oil is transported using trans-shipment hubs and a shadow tanker fleet to obscure its origins.

The Strait of Hormuz was closed by Iran after the US and Israel launched an unprovoked war on the Islamic Republic on February 28.

In April, as energy prices soared, the US responded by imposing a naval blockade on Iran's southern ports to attempt to halt Iranian oil exports.

The Memorandum of Understanding (MoU) signed by Iran and the United States on June 15 to halt hostilities stipulated that commercial ships would be allowed to transit through the Strait of Hormuz free of charge for 60 days. Fazli added that new arrangements regarding Hormuz would be made in cooperation with Oman.

Last month, Oman proposed that ships transit the strait via a new southern route close to its coast and a new northern route along Iran's coast, while the central route through the strait is de-mined. Omani officials worked with the UN's International Maritime Organization (IMO) to develop the plans.

However, Iran rejected plans for the southern route, which would have been overseen by the US, saying it would violate Clause 5 of the MoU.

On Thursday, Iranian forces attacked a Singaporean ship attempting to pass through the southern Omani route, causing the IMO to abandon the effort.

The last 24 hours in the Strait of Hormuz are a doozy.

At the start of the clip, you will see many of the vessels that were going through the Oman route take the Iran route instead.

Now there's something I should probably point out. In the last week or so, US escorts through… pic.twitter.com/rK1iKRtrYm

— HFI Research (@HFI_Research) July 5, 2026

On Friday, Iranian Parliament Speaker Mohammad Bagher Ghalibaf announced Iran and Oman had reached an agreement on the joint management and regulation of traffic in the Strait of Hormuz. 

Tehran has repeatedly vowed that the strait will not return to its pre-war status despite an illegal US blockade on its ports and attempts to undermine Iranian control of the waterway. 

"Hormuz is defined under Iran's command, not CENTCOM," Iranian Deputy Foreign Minister and top negotiator Kazem Gharibabadi said in a statement on July 2nd.

Tyler Durden Sun, 07/05/2026 - 19:50

OPEC+ Approves Another Oil Output Increase As Hormuz Exports Start To Recover

OPEC+ agreed a further increase in output targets from August, the group said in a statement on Sunday, ‌adding to global supply at a time when oil prices are falling due to the gradual reopening of the Strait of Hormuz for oil exports. 

Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman adjust production and reaffirm commitment to market stability

Read Press Release▶️https://t.co/dyMd6A6Fpj

— OPEC (@OPECSecretariat) July 5, 2026

The oil-producing cartel, which recently lost the UAE as a core member, agreed during an online meeting to increase quotas by 188,000 barrels per day from August, on top of similar increases for June and July. That said, the producers reserved the right to increase, pause, or reverse the phase-out, including the November 2023 cuts already unwound. Furthermore, every country that overproduced since January 2024 still has to fully compensate for it, tracked monthly by the JMMC. 

The seven ​core members of OPEC+, which groups OPEC and allied producers including Russia, have hiked their output quotas from April through July ​by almost 800,000 bpd. Yet the increase has remained largely on paper because of the U.S.-Israeli war on Iran, ⁠which closed the Strait of Hormuz to tanker traffic for some of the most important OPEC+ members, including Saudi Arabia, Kuwait and ​Iraq.

According to Reuters, OPEC+ output fell to 33.13 million bpd in May, according to OPEC data, from 42.77 million bpd in February. It began ​to recover in June thanks to U.S. efforts to help the UAE and other OPEC+ nations export more oil, but is still below pre-war levels.

Despite persisting supply disruptions, oil prices have returned to pre-war levels, pressured by sharply lower Chinese imports, higher exports from non-Middle East producers, and a record global strategic stock release coordinated ​by the International Energy Agency.

"The group of seven kept unwinding their production cuts as widely expected," UBS analyst Giovanni Staunovo said. "The near-term focus ​will remain on how many tankers will manage to cross the Strait of Hormuz and how quickly demand and Chinese crude imports recover."

A memorandum of understanding ‌between Washington ⁠and Tehran to end the war, which has been breached on several occasions but is still holding, has also helped convince traders that supply will ultimately return to normal levels.

Brent crude prices traded near $72 per barrel on Friday, down from recent peaks of more than $120 per barrel and back to levels traded just before the U.S. and Israel attacked Iran on February 28.

Besides agreeing production targets, OPEC+ is also facing other challenges after the United Arab Emirates left ​the group and Iraq signaled it wants ​higher quotas.

OPEC+ includes 21 members ⁠including Iran, but in recent years only the seven nations - and the UAE until its departure - have been involved in monthly production management. Those seven producers, Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, are ​boosting output as part of the phased rollback of a 1.65 million bpd supply cut agreed ​in 2023, when ⁠the group still included the UAE.

In a stunning twist, the UAE quit the alliance in late April because it wanted to align its capacity more closely with its production, free of production restraints imposed by the group. From August, taking into account the UAE's exit from May 1, the seven core members will still ⁠have about ​379,000 bpd of the original cut to return to the market, according to ​Reuters calculations.

With the August increase now decided, they will have fully unwound the 2023 cut if they make one more hike of around the same size for September at ​their next meeting on August 2.

Tyler Durden Sun, 07/05/2026 - 16:55

The Biggest Problem With AI Today

By Christopher Penn, of Almost Timely News

What’s the biggest problem in AI today? Is it cost, with token budgets being blown out of the water by agentic AI? Is it sustainability, with AI consuming electricity and fresh water? Is it ethics, with tech companies cramming AI into everything?

I think it’s deeper than that. Those are all symptoms of a much deeper-rooted problem: nobody’s making decisions.

Or more correctly, we’ve abdicated far too much of our executive function to AI. We’ve surrendered our thinking. 

Let’s dig in.

Part 1: Where This Issue Came From

On Friday afternoon, I was mulling over what I wanted to cover in this week’s issue. It’s a holiday weekend here in the USA, so not as many folks will be reading, and that’s okay. (I appreciate that YOU are) And I’ve covered a ton recently:

• How to improve advertising with AI
• Why listicles may cause more harm than good
• Setting up private, local models
• How AI detection works
• AI for GEO mental models
• AI for retail GEO
• 18 ways to save token budgets
• How to make AI write better

So on a whim, I set up a NotebookLM with the last 180 days of conversations from over 40 different subreddits, like r/marketing, r/chatgpt, etc. - everything around marketing, business, and AI. I connected it to Claude Code with the NotebookLM command line tool (the most token—efficient way for Claude to talk to NotebookLM), and then put all of my 2026 newsletters year to date into an input folder.

I asked Claude to compare what I’ve written about thus far this year with what folks are finding their hardest problems are with AI. Claude spit out a list of 10 major things derived from over 800,000 words of foaming at the mouth on Reddit that it thought might be good newsletter topics:

• AI Visibility challenges
• Agentic oversight is degrading
• AI deployment is broken
• 40-60% of company budget is wasted on the wrong models
• AI is a rental
• AI sycophancy is screwing up synthetic focus groups
• AI detectors don’t work
• AI is hollowing out corporations and no one’s hiring junior staff
• People measure AI by tokenmaxxing
• Marketers are basically unpaid labor for AI companies training data

Claude was REALLY pushing for me to write about how measurement is broken in marketing and AI today, and I might do that at some point, but that’s not what I see when I look at this laundry list. Yes, there are measurement issues in many of them, data issues in many of them, but... measurement being broken is the symptom of what I said earlier - we’ve abdicated executive function.

For those who aren’t analytics nerds, you know that measurement is a trailing indicator. It’s not a leading indicator.

Part 2: Executive Function Recap

As a reminder, I bucket executive function into four categories that I call PODS:

• Plan: you think about achieving something in the future and make a plan to get there from here
• Organize: you take what you have and try to make sense of it
• Decide: you take what you have and make decisions about it
• Solve: you solve the problems you have

Yes, there is more nuance to executive function than this, but this handy, short list is an easy way to see what our brains are doing. That’s critical thinking, one of the worst-named practices we have.

Why? Because critical thinking isn’t about being critical, per se. It’s about metacognition - the definition of which is thinking about thinking. When you’re thinking about how you think, you open the door to improvements, to growth.

Thinking about thinking means asking questions and reflecting - is this the best way to do something? How could I do this better? How could I derive more enjoyment from this thing I’m doing? It’s not criticizing yourself as much as it is recognizing what you’re doing and whether it’s working or not.

When you’re planning, organizing, deciding, and solving, you’re inherently thinking about thinking. Every time you plan, every time you bring order to chaos, you have to check in with your own brain to see if what you’re doing is moving you closer to the goal posts.

Executive function is one of the things that defines our sentience as living creatures. Every sentient creature from a mouse to us does these tasks. You’ve read or heard stories about crows fashioning tools from wire to solve problems, you’ve watched dogs and cats make decisions and plan. I’ve watched my own cat measure optically whether or not she can make a particular jump.

Properly prompted, today’s AI tools are superb at executive functions as well. Given the right frameworks, harnesses, and data, they can plan, organize, decide, and solve better than we can at most language-based tasks.

And therein lies the actual problem.

Part 3: The Tale of the Tape

Let’s look at each of the 10 topics Claude suggested to see the threads that connect them.

AI Visibility challenges: when you read the verbatims of what people are saying about AI visibility measurement, you can tell they’re pretty much making it up. This is especially true of software vendors that are offering and peddling solutions that have very little grounding in reality - and yet, stakeholders eat this stuff up because they’d rather have certainty about a wrong number than accept uncertainty or no number at all. they are not thinking about their thinking.

Agentic oversight is degrading: the commenters on Reddit focused on the fact that as agents get more sophisticated, it’s harder and harder to follow along to see what they’re doing. So we just hit OK all the time - if we’re even thinking about a human in the loop. We’ve forfeit our authority here. In fact, some AI tools have this built in as a feature. Claude calls it dangerously skip permissions. Qwen calls it YOLO mode.

AI deployment is broken: here, the discussion is about stakeholders telling their stakeholders that the organization has deployed AI without any sense of the impact that it’s had. One poster cited a statistic that 29% of companies see significant ROI from AI, even though individual employees are claiming 5x productivity increases. The math doesn’t math. Here, people don’t want to think and reflect about what deployment even means. Katie’s been writing a lot about this in the Trust Insights newsletter the last few weeks. At its heart, we are confusing using AI with getting results out of AI.

40-60% of budget is wasted: here, folks are talking about how everyone just accepts the default model in AI tools, which is typically the most expensive one. Claude, for example, defaults to Opus 4.8, which is a much more expensive model than Sonnet 5 or Haiku 4.5. We’re not thinking. We’re not making decisions about cost trade-offs versus effectiveness. Another person pointed out that this is by design to create habits. It’s about habit formation for the most expensive models so that when the subsidization of today’s AI ends, we are accustomed to using the most expensive models. This is brain hijacking in a way.

AI is a rental: in this particular topic, the discussion centers around what you actually own in AI, which is very little if you are using today’s closed weights frontier models. Particularly Anthropic’s on-again, off-again rollout of Fable 5, thanks to U.S. export controls, was a wake-up call to the entire industry that you don’t own anything in SaaS, any more than you own music in Spotify or own videos in Netflix - but people think they do.

Sycophancy in focus groups: even though we have good academic research showing that properly prompted AI models can emulate human purchase intent with about 90% accuracy, the level of sycophancy in AI models steers them towards confirmation bias in most situations. This is especially true of synthetic focus groups; when people use AI to simulate consumer intent, what they’re really doing is reinforcing their own biases most of the time. There’s no reflection or questioning the AI output.

AI detectors don’t work: A perpetual favorite topic of mine. This thread of conversation revolved around how companies are using AI detectors to identify the use of AI in situations where it’s not appropriate, without recognizing that the detectors themselves are also broken. In testing I did 3 weeks ago now, AI detectors falsely flagged human outputs 1 out of 7 times. No one is thinking and reflecting enough about who’s watching the watchers.

AI is hollowing out companies: I really liked this quote from the agency owners subreddit:

“What’s strange is nobody decided this. There was no meeting where we discussed this. We automated one annoying task, then another, and one day the job had hollowed out from the inside.“

This erosion of tasks is all about a lack of cognition, a lack of reflection, a lack of a plan. No one’s making decisions - just leaving it up to the machines, a bit more each day.

Tokenmaxxing: this was reflecting on Meta’s most recent news story in which they were on track to spend several billion dollars in AI tokens because they measured AI productivity based on token spend, the dumbest possible way to measure AI.

Marketers as unpaid trainers: this was a whole bunch of ranting about how marketers are effectively unpaid trainers for AI platforms. The more content we produce, the more AI has to train on while simultaneously competing for the tasks we’re paid to do. Here, the thread was about how the average marketer isn’t thinking or reflecting about their relationship to AI.

And this laundry list of 10 items isn’t everything, not by a long shot. Think about how else people use AI without thinking, without thinking about their thinking. Go on LinkedIn and look at the endless streams of comment-bots all paraphrasing the same template over and over again. Look at the workslop flooding your inbox, read the reports your agencies send you that are clearly copy paste jobs.

When we put aside the direction that Claude wanted to nudge this issue of the newsletter, it becomes pretty apparent that it’s really about how much we think about thinking. How self-aware are we? How well and accurately do we perceive our relationship with AI?

Most of all, do we see the amount of executive function we’ve ceded to AI?

Part 4: The Antidote

“Nobody decided this” is haunting me. When you hand off executive functions to AI, who is making the decisions? No one. There’s no one accountable for a decision because the machine is making it for us. Whether it’s building a PowerPoint deck, assembling a report for a client, creating content for a newsletter, when the machine does it, there’s no accountability and there’s no decision making on our part other than approving it.

And this leads to a bunch of bad outcomes, everything from job loss to dissatisfaction with your own work. You know, when you use AI to offload a task, that you didn’t do the work - and you take no pride in it, any more than you’d take pride in the work that a contractor did on your behalf.

Think about this in the context of parents. Go to any parent’s house and you’ll likely see art that the kids made when they were young. The art is generally, objectively, pretty bad. But the parent values it not because of the quality of the art, but because of the level of effort made by the child. They take pride in their child’s efforts, and the child takes pride in what they did in their efforts. For good or ill, when people use AI, they themselves feel like they haven’t made an effort, and the person on the receiving end also feels like they didn’t make an effort.

Sometimes, you don’t even understand the work if you’ve outsourced it. You present it to your stakeholders, and the first question they ask that isn’t in the prepared materials leads to panic city because you can’t answer it, like buying a cake at the store instead of baking it yourself and then having someone ask if a specific allergen is in it. And you’re left scrambling, looking for the label to see what’s actually in the cake.

So my suggested antidote is this: for every task that matters, always start with someting you lead, and force the machines to educate you.

For example, when I compile monthly reports for Trust Insights clients, I turn on my voice recorder and I review the data myself. I talk out loud what I see, what I think, what makes sense and what doesn’t make sense, and then I have AI transcribe it. After the transcription is complete, I ask AI to review it and show me what I missed. I ask it to ask me questions, to record more information, to fish more information from me.

I also ask it, especially around anything in my subject matter expertise, to find me resources to learn and read about its recommendations. Recently, I was asking it to choose from a catalog I’d prepared of over 1,000 different analytical techniques, and it chose an interesting ensemble of 3 techniques, one of which I didn’t know well. So I had it teach me that, so that instead of me passively accepting its recommendations, I learned something. I got better as a professional. I grew my subject matter expertise.

If you think about it, this is not only rational from the perspective of delivering great quality work, it’s also rational from the perspective of my value. If I’m nothing more than a copy paste drone, a meat-based interface to an LLM, then why does my company need me? Why would my clients pay for me when they could just pay to ask ChatGPT or Claude the exact same things?

What they’re paying for is my expertise, my skills not only at using the technology, but the specific lens I direct it with, and the perspective that only I can bring. And if I’m using AI to constantly improve that expertise, to improve that domain knowledge, then they should keep paying for me.

Outside my subject matter expertise, I start with deep research, using AI tools to gather information and then having them create a synthesis. Once I’ve got that, then I have it create a checklist of what constitutes quality in the domain I’m working in. Finally, I sit down with the creations and I read and learn for myself. I have AI make infographics or podcast summaries to learn the domain so that I can connect it to my expertise.

Agentic AI - tools like Claude Code, OpenCode, etc. - are phenomenal researchers, far better than the web-based deep research tools folks have become accustomed to in the past couple of years. When you use a research agent, it has a lot more latitude to gather up sources, to take the time to write down notes and observations, and to synthesize conclusions from the data it has. If you use something like the Trust Insights CASINO research framework, you’ll get some amazing results from the tools that tend to have fewer hallucinations than their web-based counterparts.

Then with that research data in hand, you use it to become a better professional within your domain. You use it to level yourself up. You use it to add to your insights instead of substitute for your insights.

Part 5: Wrapping Up

The biggest problem in AI today is the delegation of our executive function to machines. Whether it’s accountability (machines have none), deskilling, or dissatisfaction with our work, the moment we forfeit executive function is the moment when AI becomes more problem than solution.

We can boil it all down to a simple set of questions:

1. Does the use of AI make the output better?

2. Does the use of AI make me better?

If the answer isn’t yes to BOTH, then you’re not using it well.

Properly used, AI is one of the greatest professional development tools ever created.

Improperly used, it’s one of the most destructive forces your career has ever known, because the moment you offload a task to AI, your own skills at that task get rusty.

And once something becomes rusty enough, it’s cheaper and easier to replace it.

More in the Almost Timely Newsletter

* * * Next-level Wagyu, now at ZeroHedge Store

Tyler Durden Sun, 07/05/2026 - 16:20

Japan Bankruptcies Surge To All-Time High As A Result Of Plunging Yen

In recent months one of the more frequent questions in FX trading has been the relentless collapse in the yen, which recently sank below a 40 year low despite rate differentials stubbornly headed in the opposite direction, and is increasingly flirting with levels which on previous occasions always prompted BOJ intervention.

Among the reasons cited for the chronic weakness of the Japanese currency have been the following three:

1. Real short-term rates in Japan are negative, which is why Ueda has been slow to hike
2. There is a growing perception that Japan's PM Takaichi doesn't want a higher rates or a stronger yen.  A weak yen certainly helps big JP firms profits (while hurting households) so there is a clear weak yen constituency inside the LDP. Japanese financial institutions are also short the yen generally
3. JP financial institutions (notably lifer insurers) see the upfront cost of hedging (the nominal ST rate differential) and have made a mint on unhedged fx assets, and they have been reluctant to change their position just because the yen looks exceptionally undervalued.

Effectively a feedback loop has emerged, whereby the weaker yen leads to an even weaker yen, and despite token resistance by the BOJ - the latest long overdue rate hike being an example - the market clearly anticipates further weakness in the currency, and is pushing it to new lows.

However, a limit to the yen's weakness is now emerging, and it goes to the growing damage on the country's households noted in point 2 above.

As Bloomberg reports, Japan’s weak currency caused the most bankruptcies for the first half of a year since 2022, underscoring the growing economic costs of the currency’s slump. 

Forty-five firms failed from January to June for that reason, up more than 30% from a year earlier, according to a report by Tokyo Shoko Research published last Wednesday. The figure was the highest since 2022, when the data firm started counting companies that specifically cite currency weakness in filing for bankruptcy.

The findings suggest the smaller firms that employ most of Japan’s workers are finding it increasingly difficult to withstand the yen’s prolonged weakness, casting a shadow over the nation’s economy, even as large-cap exporters benefit. 

The data also strengthen the case for continued interest-rate hikes from the Bank of Japan. While higher borrowing costs alone would typically push more firms toward insolvency, closing the gap with US rates could help support the yen.

The yen has steadily weakened against the dollar in recent years as US interest rates climbed to combat pandemic-era inflation while Japanese rates were negative to break free of deflation. While the rate differential has since narrowed, a rally in the dollar and high oil prices from the war in Iran are pressuring the yen.  

The yen hit a new 40 year low of 162 per dollar on Thursday, before rising higher amid some speculation that Japan's financial authorities may finally seek to rein it in. While the weaker currency has boosted exporters’ earnings, it has also driven up import costs, squeezing profit margins across a broad range of import-dependent industries, and has also helped sustain the worst inflation in Japan's recent history.  

The conflict in the Middle East has also drastically boosted costs. A price index for raw materials and merchandise purchases among a broad range of smaller firms surged in the second quarter, according to a survey by the Organization for Small & Medium Enterprises and Regional Innovation. The Bank of Japan’s producer price index has also jumped in recent months.

Tokyo Shoko Research’s report showed bankruptcies were particularly concentrated in the wholesale sector. One example was Tokyo-based Merry Time Foods, an importer of crab, shrimp and tuna from other parts of Asia. The company went bankrupt in May, citing deteriorating profitability due to the weak yen and political instability in its supplier countries.

The research firm said in the report that currency-related bankruptcies are likely to remain elevated for some time, particularly among wholesalers, retailers and manufacturers with limited pricing power.

According to Bloomberg, the strain has been acute for small- and mid-sized businesses, who are more affected by higher borrowing costs than their larger counterparts. They’re also contending with mounting wage hike pressures amid persistent labor shortages. Smaller firms often have limited ability to pass higher costs onto customers due to intense competition.

“The weak yen is one contributing factor,” said Yoshihiro Sakata, manager at Tokyo Shoko Research. “Combined with inflation and rising labor costs, it is creating a cumulative burden on businesses.”

Another source of pressure on smaller businesses may be foreign-exchange hedging, including the use of so-called reverse knockout options, according to Yuji Saito, executive adviser at SBI FXTrade. Such products are widely sold by regional banks as structured hedging products, particularly to small and regional importers seeking to minimize upfront option premiums.

Once the exchange rate reaches a preset knockout level, the option expires and the hedge ceases to provide protection. Companies needing dollars must then either purchase them in the spot market, enter into a new hedge - often at less favorable levels - or leave themselves exposed to further currency moves.

“The weaker the yen gets, the more importers roll into increasingly risky option structures,” Saito said. “Once the knockout level is breached, they are forced to buy dollars in the spot market, creating a negative spiral that puts even more downward pressure on the yen."

Analysts estimate that remaining reverse knockout levels are clustered between 163 and 170 yen per dollar, territory that many firms didn’t think the currency would reach as intervention from the central bank would likely be forthcoming due to the adverse economic impact of such unprecedented currency collapse.

“The number of knockouts could increase if the yen weakens further,” said Hiroyuki Machida, director of Japan FX and commodities sales at Australia & New Zealand Banking Group. “The situation is becoming significant for companies that are unable to pass on higher costs.”

Tyler Durden Sun, 07/05/2026 - 15:45

Russia's Buffer Zone On Ukrainian Border 'Expanding' As Result Of Worsening Drone Attacks: Kremlin

Russia has announced that one key measure that will be taken in response to Ukraine's ramped-up drone attacks on Russian territory, including last month's major strikes on the Moscow area, is the significant expansion of the border 'buffer zone' between the waring countries.

"A security buffer zone on the Russian-Ukrainian border is conditioned by the aggressive nature of the Kiev regime and the Russian military is engaged in this process systematically reaching the appropriate progress," presidential spokesman Dmitry Peskov said on Sunday.

Source: Kremlin/Reuters

In essence this is the Kremlin saying that Russian forces plan to permanently take over territory deeper into Ukraine.

"Based on the aggressive nature of the Kiev regime and in order to insure the safety of our citizens, we are setting up a security zone, or the so-called, buffer zone," Peskov continued. "This buffer zone is being created systematically. We do register significant results regarding the terms of our troops’ advancing."

"There area should be no in no one doubts that it would will be serve to extend the necessary area ensuring our security," he added.

"Our troops are advancing," Peskov continued. "No one here should have any doubt that our military is proceeding systematically, and we are seeing concrete results."

He cited the taking of Konstantinovka: "This is a milestone, it is the most important step towards taking the common fortified area of Kramatorsk and Slavyansk," he claimed according to TASS.

President Putin has of late been taking steps to strongly signal he's committed as ever to completing the war aims of Russia's 'special military operation' - despite reports of nationwide fuel shortages, and also a full-blown gasoline supply crisis in Crimea.

The Kremlin released footage on Friday evening of the 73-year old Russian leader visiting an auxiliary command post to meet with the chief of the General Staff of the Armed Forces.

Putin wore a military uniform, which Russian state sources described as a sign of his resolve to "finish off the terrorist neo-Nazi vermin".

English-language RT's response: "...seems to desire for that security zone to begin on the Polish border."

Putin: "The more strikes the enemy attempts to carry out on our civilian facilities, the larger the security zone we will have to create in adjacent territories."

Sadly, the current Kiev regime seems to desire for that security zone to begin on the Polish border.…

— Chikhi Cato (@KatoHus56872326) July 4, 2026

The scene appeared aimed primarily at the West, which has been questioning Moscow's resolve due to the now frequent Ukrainian drone hits on sensitive energy infrastructure.

President Trump has also lately appeared to pivot back to wanting the resolve the Ukraine conflict, while still seeking permanent offramp regarding to the Iran war crisis.

Tyler Durden Sun, 07/05/2026 - 14:35

A Bad Moon Is Rising On Our Nation's 250th Birthday

Authored by James Howard Kunstler,

Burning Down The House...

"I forgot to get napkins. I just wiped my hand on the American flag behind me."

- Darializa Avila-Chevalier, primary election winner, New York’s 13th Congressional District

Who are all these Democratic Socialists of America, anyway?

DSA on the March shoulder to shoulder with the Pride Brigade

“We are Westerners fighting for the total eradication of Western civilization,” one of their spoxes declared on Instagram in 2024.

Hmmmm . . . . I wonder if you can be a little more specific. Like, including democracy and socialism, two western civ constructs? Kind of looks like a baby / bathwater situation, followed by burning down the house where the baby lived. Do we get a chance to debate this proposition in the midterm election?

Likewise, a St. Paul, Minnesota, school board member, one Chauntyll Allen offered the following policy recommendation on the We Love Our Dog Park Facebook page:

A bad moon is rising on our nation’s 250th birthday. The country is in a rancid mood. You begin to see what happens when political ideas are carried to their last limits. Question is: does all this add up to a winning party platform? You must suppose that higher-ups in the Democratic Party are asking themselves the question now. What do Hakeem Jeffries and Chuck Schumer think when they see these Angels of Death on the march (or in flight) over the midterm battlefield?

Darializa Avila Chevalier, Claire Valdez, and Melat Kiros are going to Congress to link arms with “The Squad” — AOC, Ilhan Omar, Rashida Tlaib, Ayanna Pressley — and they will bring their cargo of DSA policy ideas with them: racial, gender, and social justice; abolish ICE (no more deporting anybody); defund the police; end incarceration (no more jails); free housing and medical care; green this-n-that; government ownership of business; abolish the Senate and the electoral college; pack the SCOTUS...

The platform apparently has a lot of appeal to a certain demographic — which, I suspect, includes the many young recent graduates of the diploma mills who are pissed-off that Mr. Trump & Company are methodically shutting down the NGOs that were supposed to furnish these young race-and-gender studies majors with cushy, six-figure jobs doing “activism.” Alas, that pathway is increasingly blocked and the country only needs so many baristas.

What to do then? Take it to the limit! Be communists. . . with all that entails. 

What’s mine is mine and what’s yours is mine, too.

This new gen of Democratic Socialists is arguably worse than the Confederates of 1861. Those Rebs only wanted to secede from USA and go their own way in one corner of the land. They didn’t want to piss on Johann Sebastian Bach, Leonardo DaVinci, Jane Austen, Margaret Fuller, and Ralph Waldo Emerson as they walked out. The Democratic Socialists of our day are fully aligned with their avatars: Joseph Stalin, Mao Zedong, and Pol Pot, who operated human meat-grinders at scale to tamp down the opposition. Not a great look to align with the great mass-murderers of history.

It must be agony for Schumer and Jeffries. Eradicate Western Civ. . . ? Piss on white people’s corpses. . . ? Are they really going to get behind that? No-o-o-o-o. But they will try to wriggle around this steaming pile for some weeks to come until it is obvious that the Democratic Party has blown itself up, hoisted itself on that old petard. It may be too late for the party’s old guard. No matter how many rain-dances Elizabeth Warren does, nothing will put out this dumpster fire.

Another question for the months ahead: can that party control its increasingly maniacal street warriors, the Antifas, the Pink Pistols, the Transgender Armed Defense forces, and whatever remains of BLM. There is still a lot of money in circulation for public demonstrations and disruptions from George Soros and other sponsors. And apart from that are the forces of jihad, with their own foreign patrons. Gawd knows how many jihadis came into the country during “Joe Biden’s” orchestrated alien invasion. Not just a few, you can be sure.

By the way, can somebody at the Office of Management and Budget do an audit of the $370-billion that “Joe Biden” handed over to John Podesta in the fall of 2024 to administer “climate-related provisions” of the Inflation Reduction Act, and figure out how much of it bounced right back into Democratic Party-adjacent NGOs and down to party capos like Stacey Abrams in Georgia, Brandon Johnson in Chicago, and Karen Bass in LA?

And happy 250th birthday to you, America — if you can keep yourself.

* * * Next-level Wagyu, now at ZeroHedge Store

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