The post High-Priced Chips in Warehouses: Nvidia’s Big Con? appeared first on CEPR.

Controversial Map In Netanyahu Briefing Triggers Wave Of Speculation

Via Middle East Eye

Israeli Prime Minister Benjamin Netanyahu unveiled a map of the wider Middle East showing his country and the UAE aligned with a paramilitary in Sudan accused of committing genocide, and separatists in Libya, Yemen and Somaliland.

The map, which carried the logo of Germany's Friedrich-Ebert-Stiftung Institute, will not surprise regional watchers, but it could prove awkward for some of Israel's regional partners and cement suspicions among Arab states.

Israel and the UAE were shown as part of a "Hexagon Alliance". The map showed Greece, Ethiopia and parts of India aligned with them. But it also showed a swath of southwestern Sudan as friendly to the UAE and Israel.

The Rapid Support Forces (RSF) control southwestern Sudan. United Nations experts and dozens of media reports, including from Middle East Eye, have revealed extensive Emirati support for the Sudanese paramilitary, which is led by former Janjaweed leader Mohamed Hamdan Dagalo and has been widely accused of committing genocide in Darfur. The UAE has officially denied backing the RSF.

The map was part of Netanyahu’s unveiling on Sunday of a new security doctrine that emphasizes preemptive strikes and the establishment of "buffer zones" on Israel’s borders.

"The War of Redemption necessitated an upgrade of fundamental principles within the traditional national security doctrine, among them: giving priority to prevention and offense over containment and defense, including launching preemptive strikes to thwart evolving threats; strengthening home front defense against new threats; cementing Israel's status as a regional power," Netanyahu’s office said in a statement on Sunday.

"Opportunities have been created for forging new alliances in our region and beyond," the statement added.

'Sunni Diamond Alliance'

The map Netanyahu shared shows Israel aligned with secessionist groups while framing its oldest Arab treaty partners as countries not considered friendly to Israel. The map did not show Egypt and Jordan as aligned with Israel.

Instead, it marked Egypt as part of a "Sunni diamond alliance" with Pakistan, Turkey, and Saudi Arabia; it showed Jordan, whose peace treaty with Israel dates back to 1994, as "friendly" to the alliance.

Netanyahu's public presentation is likely to raise concerns among critics about Israel’s support for secessionist groups and the partition of fragile states. He showed a government in eastern Libya controlled by Khalifa Haftar to be aligned with Israel. 

Netanyahu: I established the ground barrier between Israel and Africa along the Egyptian border. It was primarily a barrier against infiltration. Otherwise, there would already be another million Muslims here, and we would have been flooded like Europe. https://t.co/kpNrkiYjjG

— Clash Report (@clashreport) October 18, 2026

Yemen's Southern Transitional Council, a UAE-backed separatist movement that dissolved in January 2026 and re-emerged as the Transitional Council of South Arabia, was also shown on the map as being friendly towards Israel and the UAE

Israel became the first country to recognize Somaliland earlier this year. Somaliland is a breakaway republic of Somalia where Israel and the UAE have been expanding their military presence, according to multiple media reports.

Netanyahu’s map showed how Israel sees its security as part of a broader region extending well beyond the Arab world.

He showed Greece and Ethiopia as "friendly" states. The latter is on the verge of a full-scale war with Eritrea, where Israel has long coveted a Red Sea military base, MEE has reported.

Netanyahu's map also reaffirmed the longstanding ties between Hezbollah, the Houthis and Iran as part of an "Axis of Resistance". 

Tyler Durden Tue, 10/20/2026 - 20:30

The Billionaire Couple Quietly Spending Millions To "Reinvent" The Democrat Party

A billionaire hedge fund couple is dumping millions into a high-stakes effort to push the Democratic Party away from its increasingly radical left flank and challenge its entrenched leadership.

Steve and Sue Mandel, wealthy Democrat donors from Greenwich, Connecticut, have committed at least $20 million to a network of political groups aimed at elevating more moderate candidates, according to a new report from The Wall Street Journal.

Hedge-fund billionaires Sue and Steve Mandel. (via WSJ)

Their operation includes at least three organizations designed to confront the party's existing power structure and potentially reshape Democratic politics ahead of the 2028 presidential election. At the center is Majority Democrats, which is working to boost candidates who can appeal beyond the party's progressive base.

Another group, The Bench, focuses on identifying and backing rising political talent, while the Searchlight Institute is crafting more centrist policy ideas in hopes of making Democrats competitive again nationally.

The couple is taking an unusually hands-on role, closely tracking campaigns and working with Seth London, a seasoned Democrat consulanted who served a stint in the Obama White House as Legislative Assistant and Associate Director. The billionaire couple's effort has already drawn additional funding from political and media power players, including former New York City Mayor Michael Bloomberg and James Murdoch, according to the Journal.

The effort underscores growing frustration among some deep-pocketed Democratic donors who argue the party has lost touch with ordinary voters and desperately needs an overhaul. Rather than demanding ideological purity, the Mandel-backed groups are prioritizing candidates with strong personal stories and proven ability to win elections.

However, as the Journal points out, the Mandels' political investments have not always paid off:

During this year's Senate race in Michigan, it threw its support behind Mallory McMorrow, a telegenic state senator and self-described "pragmatist" who had been a client of Smith's.

McMorrow dropped out less than a month before the primary, and Abdul El-Sayed, from the party's left, won. Democrats who didn't support El-Sayed traded blame. Proponents of The Bench criticized Washington groups for helping the other moderate candidate, Haley Stevens.

A former Stevens adviser had the opposite takeaway: The Bench had made the race more costly and complicated.

Addtionally, critics on the far left were quick to dismiss the effort.

"The Mandels' approach represents the same Democratic establishment with some new seasoning on top," said Usamah Andrabi, spokesman for the far-left Justice Democrats, told the Journal. "That's simply not what the party's voters are looking for right now."

Tyler Durden Tue, 10/20/2026 - 20:05

Bolivia's Energy Crisis Deepens As Natural Gas Reserves Run Dry

Authored by Felicity Bradstock via OilPrice,

• Bolivia's dwindling natural gas reserves and declining exports have undermined its economy and intensified fuel shortages.
• Rising global energy prices and subsidy cuts have increased living costs and fueled widespread protests.
• A $1.9 billion IMF rescue package and energy-sector reforms aim to stabilize the economy, but long-term recovery requires diversification.

Years of underinvestment in Bolivia's gas industry have left the South American country facing a severe fuel shortage, as energy prices rise ever higher owing to the ongoing war in Iran. The energy shortages and economic crisis follow years of poor decision-making by the government.

In 2006, then-president Evo Morales took control of Bolivia's fossil fuel industry, renegotiating contracts with international oil and gas companies and benefiting from the revenue. Much of the country's newfound wealth was invested in public spending programs, expensive fuel subsidies, and the maintenance of a fixed currency exchange rate pegged to the U.S. dollar. Fossil fuel revenues contributed heavily to Bolivia's economy for several years, supporting GDP expansion and the development of social programs that helped halve poverty rates.

For many years, Bolivian's were led to believe that they had more extensive gas supplies than they actually did. However, in recent years, Bolivia's fossil fuel sector has suffered as reserves have dwindled and no successful gas discoveries have occurred. As of April, Bolivia has an estimated 3.7 trillion cubic feet of proven reserves. The fall in gas production led exports to fall by almost 60 percent over the last decade. Bolivia continues to rely heavily on natural gas, which accounts for around 70 percent of its electricity mix.

Meanwhile, little progress has been made in developing the country's green energy sector, leaving it facing severe energy shortages. The fall in gas revenues has left the economy suffering terribly, as inflation soars and the price of imported goods becomes ever more unaffordable. Luis Fernando Romero, the former head of an association of economists in southern Bolivia, stated, "We failed to take advantage of a historic opportunity that brought in immense revenue."

This situation is not uncommon, with many other oil-rich states having had similar experiences. Several Middle Eastern states have long depended on oil and gas revenues for economic growth, and most have only recently announced plans to diversify their economies to reduce reliance on fossil fuels. Several countries across the MENA region announced new economic strategies following greater talk of a global green transition, which could leave them missing out on vital oil revenues if they don't take moves to diversify and invest in value-added sectors.

The lack of investment in Bolivia's other domestic sectors has left it struggling to stay afloat as it runs out of fuel and is forced to pay high fuel import costs. President Rodrigo Paz warned that "International prices are forcing us to make complex choices."

In September, Bolivia's Congress approved a $1.9 billion loan from the International Monetary Fund (IMF), even though the terms of the deal require the government to impose strict austerity measures that could fuel social unrest. The loan received approval from the IMF's Executive Board on October 2, and the government will now be required to cut its fuel subsidies and significantly reduce public spending. It has already increased fuel prices and is expected to scrap further gasoline subsidies from the beginning of next year. The loan is expected to unlock up to $4 billion more in financing from the World Bank and other lenders.

However, there are major concerns that the new financial plan will significantly increase the cost of living for households already struggling. Last December, the government reduced fuel subsidies, leaving little support for the most vulnerable Bolivians. This led to widespread protests as people called for President Paz's resignation. In February, there was further social unrest after the distribution of poor-quality gasoline ruined thousands of vehicles. Then, in June and July, several weeks of road blockades by protesters occurred.

Meanwhile, to tackle the ongoing fuel shortages, Bolivia's government announced plans in September to triple the fund financing refined fuel purchases, following similar announcements by Peru and Ecuador. This is expected to help mitigate diesel shortages and rising prices. Both Peru and Ecuador have increased fuel subsidies in recent months and are focusing on increasing production at state oil refineries to alleviate the price pressure of expensive fuel imports.

In July, Bolivia's Energy Minister Marcelo Blanco announced that the government had authorized the private sector to import and sell refined fuels to mitigate severe shortages. Then, in September, the government said that the state hydrocarbons firm plans to focus on exploration, extraction, and refining to continue developing Bolivia's gas resources. However, experts warn that Bolivia could become a net fossil gas importer by around 2030.

As Bolivia continues to battle fuel shortages and seeks to support economic recovery by borrowing from international organizations, the government must focus on diversifying the economy by developing other value-added sectors to sustain long-term growth. In addition, the government must also develop Bolivia's renewable energy sources to reduce dependence on expensive fuel imports and ensure the country's energy security.

Tyler Durden Tue, 10/20/2026 - 19:40

Japan's Electricity Prices Surge 25% As LNG And Coal Costs Soar

Authored by Tsvetana Paraskova via OilPrice,

Japan's average power prices jumped by over 25% at the start of this week from the previous week amid soaring LNG and higher coal prices.

The nationwide power price rose by over 25% week-to-week to $0.19 (31.15 Japanese yen) per kilowatt-hour (kWh) on Monday, Bloomberg reported, citing data from Japan Electric Power Exchange.

Japan, one of the world's biggest LNG importers, this summer reduced gas-fired generation in favor of coal as the price of liquefied natural gas remained elevated.

Japan has been burning more coal and less gas for power generation since the war in the Middle East started, and it is not the only one. All Asian countries have made the switch from gas to coal on affordability and availability grounds.

Moreover, surging oil prices have led to a significant increase in Japan's import bill for oil and LNG.

LNG prices surged in Asia to a four-year high as very few cargoes manage to exit the Strait of Hormuz while competition with Europe for winter supply is intensifying.

The average spot LNG price for delivery into north-east Asia in December was assessed at $29.30 per million British thermal units (MMBtu) at the end of last week. This was the highest spot LNG price for Asia since December 2022, and sharply higher compared to $26.50 per MMBtu assessed in the previous week.

As a result, Japan's gas-fueled power generation is the most expensive in years.

The switch to coal, for its part, has also had its cost challenges this year. Increased demand in Asia amid reduced supply from the top thermal coal exporter, Indonesia, is driving up coal prices, too. The global benchmark for coal prices, the Newcastle futures, have jumped by 30% compared to pre-war levels.

Power prices in Japan have also jumped this month due to scheduled maintenance at some power-generating facilities ahead of winter.

Tyler Durden Tue, 10/20/2026 - 18:50

Feds Using DNA To Probe Ilhan Omar 'Married Her Brother' Claim, Eye Conspiracy Charge: Report

Federal prosecutors plan to use DNA evidence in their criminal investigation of Rep. Ilhan Omar (D-Minn.), people familiar with the probe told the New York Post on Monday. One source said the DNA is critical to proving the long-running allegation that Omar's 2009 marriage to Ahmed Nur Said Elmi was a marriage to her brother, made so he could get a green card he never received. Omar has denied the claim since 2016, no charges have been filed, and the Justice Department has not confirmed any DNA evidence.

The DNA report is the latest turn in a probe that went public a week ago, when Homeland Security Investigations agents searched Omar's Washington home on Oct. 12. Agents also seized Omar's phone, and more than a dozen grand jury subpoenas have gone out, some to her relatives, a source told the Associated Press. The grand jury is collecting evidence in Minnesota, where the U.S. Attorney's Office opened the case. Omar called the search an "attempt to target political enemies and weaponize federal law enforcement" and said, "I will not be silenced."

The Post's sources did not say whether the DNA was collected before or after the search. One of them pushed back on earlier reports that investigators went "dumpster diving" for swabs of Omar, Elmi or family members. Reporter Leland Vittert had said on Saturday that agents had done just that, before the raid:

Multiple sources have confirmed to me that federal agents went dumpster diving to get DNA from Minnesota Congresswoman @IlhanMN and her family before the raid on her D.C. home earlier this week. Our reporting suggests investigations go far beyond simple immigration fraud. NewsNation sources say the likely coming indictments will be stunning in nature and far beyond anything the public has understood the case to be about.

— Leland Vittert (@LelandVittert) October 17, 2026

Two other sources told the Post that the search, the DNA and other evidence give prosecutors a solid basis to bring a charge of conspiracy to commit immigration fraud before a grand jury. A conspiracy charge would let prosecutors allege overt acts that fall outside the statute of limitations, former federal prosecutor Neama Rahmani told the Post. He said prosecutors could pursue a conspiracy case that would likely fall within a 10-year limit, or a civil case, which has none, and that the warrant would not have been executed unless it had "come from the highest levels of the DOJ."

That fits the warrant. A person familiar with the document told The Washington Post that it lists potential charges of conspiracy, immigration fraud and false statements. Investigators are also looking at whether Omar or her father, Nur Omar Mohamed, misstated her birth date on immigration paperwork so she could derive citizenship through him when he naturalized in 2000. Rahmani called her late father "an unindicted co-conspirator." The Justice Department has not released the affidavit.

Homeland Security Secretary Markwayne Mullin, whose department's agents carried out the search, said on Oct. 16 that "multiple other warrants" were served the same day. "We had a judge sign it, and we expect to be able to take the case to a grand jury," he told the Charlie Kirk Show, according to CBS News.

The marriage and the birth-date theory lead to different places. A marriage-fraud conviction would not threaten Omar's own citizenship the way a false-statements case would, the New York Post noted, and stripping the citizenship of a sitting member of Congress would be unprecedented. Border czar Tom Homan said over the weekend that the government has built "a strong case" that could lead the administration to seek denaturalization. As we reported, the Wall Street Journal had already said officials wanted to revoke her citizenship and deport her, and agents reportedly secured her passport in the search.

D.C. U.S. Attorney Jeanine Pirro, whose office is separately examining Omar's House financial disclosures, told Fox News that "that judge would not have signed that warrant unless there was probable cause." Those disclosures cut Omar's reported net worth by tens of millions of dollars in a year, which the Post attributed to an unexplained accounting "discrepancy."

Omar's lawyers, Amy Jeffress and Joshua Matz, answered last week with a letter to the Justice Department demanding the "immediate return" of everything seized. They wrote that agents ignored a magistrate judge's "special requests" for carrying out the search and broke longstanding DOJ policy by acting so close to an election, and that President Trump has "made no secret" of wanting to target her. A DOJ spokesperson called the letter "riddled with false allegations and inaccuracies" and said leaking it was "a publicity play." Rep. Jamie Raskin, the ranking Democrat on House Judiciary, had already called the search "blatant political intimidation," coming 22 days before the Nov. 3 election. Former federal prosecutor Jim Trusty told Fox News the warrant shows "at least probable cause," but that it is "a long way off from proving a case at trial."

The marriage record at the heart of the DNA claim is tangled. Omar and Elmi divorced in 2017, and she gave birth to her third child while legally married to him. Her marriage to Ahmed Hirsi was not legally entered into until after her divorce from Elmi was finalized, the Post reported, although the two had a Muslim ceremony in 2002. She filed joint taxes with Hirsi in 2014 and 2015 while still legally married to Elmi, from whom she had separated in 2011. Elmi, who lives in the UK, applied for a marriage-based green card and withdrew it in 2019 when immigration officials asked for more evidence, according to The Washington Post, which also quoted a former immigration official saying the brother claim was investigated during Trump's first term without enough evidence to go forward. Omar divorced Hirsi in 2019 and married political consultant Tim Mynett.

We reported last week that her staff asked Minnesota's legislative library in 2019 to change her birth year, and that Mynett snapped at a reporter over rumors she had fled the country. Mynett has said only that his wife "came here when she was 12 years old as a child war refugee." Her lawyers say there is "no legitimate basis for any suggestion that she has violated any law concerning her citizenship status."

 

Tyler Durden Tue, 10/20/2026 - 18:25

$270 Million In Suspicious Student Aid Fraud Flagged By Treasury

Authored by Naveen Athrappully via The Epoch Times,

The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has discovered roughly $270 million in suspicious financial activity likely associated with student aid program fraud.

FinCEN issued an alert in July asking financial institutions to report suspicious activities linked to student aid fraud.

A review of submitted reports identified more than 20,000 potentially suspicious transactions since February this year. FinCEN has reported approximately $270 million in suspected fraud to federal investigators for further investigation, the Treasury said in an Oct. 19 statement.

"Federal student aid is intended to expand educational opportunities, not line the pockets of fraudsters who steal from students pursuing their education and hardworking taxpayers," Treasury Secretary Scott Bessent said in the statement.

"Treasury is working with financial institutions and law enforcement to identify these fraud schemes, recover stolen funds, and hold those responsible accountable."

The department said it was working with the White House Task Force to Eliminate Fraud, headed by Vice President JD Vance, and encouraging whistleblowers to report fraud-related information.

In an example of educational fraud, the Department of Justice (DOJ) announced last month that a Detroit man was sentenced to 92 months in federal prison for fraud schemes, including one that targeted federal student aid programs.

The man and others submitted fraudulent student aid claims for more than 1,200 individuals, collecting more than $10 million before being caught, the DOJ said. The fraud spanned 100 schools across more than 20 states.

In March, the DOJ said a former professor admitted to stealing government funds through a scam involving fraudulent student financial aid applications. More than 100 such false applications were filed across several universities and colleges in Texas.

Education Aid Schemes

The Treasury detailed some of the federal student aid fraud schemes in its statement. For instance, "ghost student" schemes involve criminals stealing an individual's personal information and using it to enroll as a student in classes. The victim often never realizes that a third party is collecting student aid in their name.

In "straw student" schemes, fraudsters pay real people to enroll in classes and collect financial aid in their names. In some cases, corrupt school employees may be part of these schemes.

"Student aid fraud has real consequences for students and American taxpayers. It drains finite grant resources from deserving students, potentially prevents legitimate students from enrolling in classes occupied by fraudulent enrollees, and can leave identity theft victims responsible for debts they never incurred," the Treasury said.

In July, the Department of Education held a first-of-its-kind Higher Education Fraud Summit, with participants discussing ways to tackle fraud in the sector.

"We have already prevented nearly $2 billion in attempted federal student aid fraud from going to bad actors. Every dollar lost to fraud is a dollar taken away from a student trying to build a better future," Underssecretary of Education Nicholas Kent said in a statement.

In an October 2025 update, the University of Alaska warned students to protect themselves from student aid fraud. Specifically, the university said that students should share their personal information only with trusted, secure websites.

The university recommended that students regularly monitor their credit for any unusual or new activity and report any identity theft or other suspicious activity.

"Treat digital content, like emails, texts, voicemails, and website content, with increased scrutiny, especially if the materials or resources they provide or advertise seem too good to be true or appear designed to create a sense of urgency," the university said.

Tyler Durden Tue, 10/20/2026 - 18:00

The Great Rare Earth Disconnect: Prices Up 23%, Miners Down 28%

Here is a question that should be harder to answer than it is: China still controls the rare earth spigot, the latest Trump-Xi summit did nothing to loosen its grip, Japan is about to run out of yttrium, Washington has put a $110/kg floor under NdPr, and Western buyers are paying anywhere from 5x to 346x the Chinese price for heavy rare earths.

So why are rare earth stocks down on the year?

That is the question Canaccord's critical minerals team led by Reg Spencer asks in an overnight note titled "Rare Earths: Equity disconnect from strong market fundamentals", and the answer is blunt:

Given our favourable SxD outlook, floor pricing, recent pricing stability (NdPr), and Western pricing premiums (particularly for heavies), we think recent equity performance has been driven more so by global macro factors and highlights a disconnection from rare earth market fundamentals.

In other words, the commodity is acting like a strategic asset and the stocks are trading like a risk-off casualty. The numbers are stark: year to date, the ex-China NdPr price is up 23%, while Canaccord's rare earth developers are down 17% on average and its producers are down 28%.

We have been tracking the rare earth theme since long before China started rationing exports to the West in late 2024, and back in July 2025 we laid out "The Coming Rare Earth Revolution And How To Profit", flagging MP Materials as the stock best positioned to benefit. A few hours later the Pentagon announced its MP deal, and well we allowed ourselves a modest victory lap:

Last night we said MP is the stock best positioned to capitalize on the rare earth revolution. Up 43% this morning

— zerohedge (@zerohedge) July 10, 2025

Fifteen months later, MP trades at $40.17, about half of Canaccord's $82 target. So what happened?

The Chart That Says It All

Canaccord's chart below shows the problem in one picture. Chinese NdPr (black) and Rotterdam NdPr (dark blue) have converged and climbed steadily all year, with the Western price now above $110/kg. Meanwhile the REMX ETF (light blue) peaked in May and has since slid from above $100 to the high-$50s.

The carnage is broad. On the producer side, Lynas, MP, USA Rare Earth and Iluka are all deep in the red, and even China Northern Rare Earth and Shenghe are lower on the year. Diversification at its finest.

Developers did a bit better on average, mostly thanks to Viridis (VMM), which is still up well over 50% on the year. Strip that out and the picture is grim: Hastings is down roughly two-thirds, St George about half, and Arafura and Brazilian Rare Earths 35-50%.

Canaccord's verdict: "We question how equities have performed so poorly YTD despite strong underlying market fundamentals." Those fundamentals include recent sector M&A, direct government support, a scarcity of Western supply and "ex-China NdPr pricing up 23% YTD."

The Floor Works... Just Ask China

Start with the most important structural change of the past year. As we reported when the Department of Defense set a price floor last August, Washington has moved from financing Western supply to underwriting its economics. Canaccord tallies the floors: US$110/kg NdPr for MP (DoD), Lynas (Japan, US, plus upside sharing) and USA Rare Earth, which also gets US$575/kg for dysprosium and US$2,050/kg for terbium.

And the floor has done something nobody expected: it has tamed the Chinese price too. For years Beijing used export quotas, policy changes and, more recently, export controls to whipsaw NdPr from about $175/kg down to around $50 and back again. Over the past 10 months, Canaccord notes, Chinese pricing has "begun to normalise around the US$110/kg floor price level."

Put differently, the volatility that made rare earth projects unbankable has largely vanished, and yet investors are paying less for those projects than they did in January.

Two Markets, Two Prices

NdPr is now a one-price market, more or less. Everything heavier is a different story. Since Beijing started rationing heavies, the West has developed its own (thin, opaque) price for anything China won't ship, and the gaps are absurd. Rotterdam dysprosium sits around $1,074/kg vs $227 in China, and terbium at $4,594 vs $983.

But Dy and Tb are the tame ones. Canaccord now forecasts yttrium, gadolinium and samarium for the first time, and the Western premiums there are almost comical. Chinese yttrium oxide has averaged about $8/kg over the past five years, while European spot is "~US$740/kg", a premium of 85x, and "some price reporting agencies have quoted US prices of up to US$1,750/kg." Gadolinium trades about 10x China in Baltimore, with US CIF quotes as high as $3,100/kg.

We ran Canaccord's own spot price table through the calculator, and here is what the "dual market" looks like element by element. CIF North America samarium, used in the SmCo magnets that go into missiles, fighter jets and radar, trades at 346 TIMES THE CHINESE PRICE!

And the squeeze is very real. Just this morning the FT reported that Japan has made an urgent request to Washington and global companies to help resolve its yttrium crisis, warning of a severe shortage by year-end. "Inventories are plummeting," one official said. Per Argus, yttrium oxide costs about $9/kg in China and roughly $1,150/kg outside it, a 179-fold jump in two years. A senior US official added that China is shipping the US just two-thirds of the rare earths it promised under last October's truce, and Japan "only the bare minimum." That followed last month's Trump-Xi summit, where China pledged to buy US coal but fell short on rare earths, and the two sides settled for a two-month truce that markets promptly faded.

To be fair, Canaccord is careful here. It notes the ex-China DyTb market was just 151 tonnes in 2025, and China's was 22x larger. It warns that Western premiums "should be viewed cautiously" and that "we question whether pricing is sustainable at these levels," with some magnet makers already pivoting to lower-cost ferrite magnets. Its own price deck has ex-China yttrium falling from $740/kg this year to $100 by 2030. Still, even the bank's haircut numbers leave Western producers with integrated separation (it names Lynas and MP) earning premiums nobody would have modeled two years ago.

Demand Goes Up, Again

Meanwhile the demand side keeps getting revised higher. Canaccord now sees NdFeB magnet demand growing at a 7.3% CAGR to ~365,000 tonnes by 2035, 15% above its prior update. EVs remain the anchor (52 million units by 2035 vs 23.5 million in 2026), but the bank has added data centers (motors for cooling), e-bikes and scooters, and drones. Drones are only ~1% of forecast demand, but the bank notes that Ukrainian and Russian military drone production alone was estimated at ~9 million units, so "our model forecasts may prove conservative."

Then there are the robots. Canaccord models humanoid deliveries growing at a 45% CAGR to 2.5 million units by 2035, and points out that Tesla is reportedly preparing an Optimus line designed for 1 million robots a year. For comparison, global EV sales rose more than 4,600% from 2014 to 2024. Maybe the robot curve won't look like that... but if it does, the magnet math gets very ugly very quickly.

Netting it all out, Canaccord sees the global NdPr market in deficit through 2028 (about 7% short this year), roughly balanced in 2029-31 as Eneabba, Kangankunde, Caldeira, White Mesa and the Lynas expansions come online, and then sliding back into a deeper deficit: -10% by 2035. Dy+Tb follows the same shape, ending at a 12% deficit.

The West's Blind Spot

The bulls' case gets even stronger once you look past the mines. Canaccord forecasts ex-China NdFeB magnet capacity rising more than 300% by 2030 to about 70,000 tonnes, which sounds impressive until you realize it would still be only 23% of global capacity, with China at ~77%.

And the West may not even get there, because it is missing a step. Global NdFeB metallisation and alloying capacity is about 210,000 tonnes in 2026, and more than 90% of it is Chinese controlled. Ex-China capacity is set to roughly double to 38,000 tonnes by 2030, which falls well short of planned Western magnet capacity. Canaccord calls metallisation "a major blind spot in western supply chain development", and its channel checks found lead times of up to two years for strip casters, "with sourcing from China impossible under current export controls."

This echoes ING's warning, which we covered two weeks ago, that China's rare earth chokehold may outlast this decade because the bottleneck is "industrial rather than geological." Canaccord's conclusion is just as stark: "our research points to China maintaining market dominance, with shortfalls in Western supply (and likelihood of ongoing Chinese export controls) supporting bifurcated markets and pricing premiums."

Translation: the scarcity premium for anything mined, separated or metallised outside China is a structural feature that will be around for years, and the companies capturing it are trading as if it will be gone by next quarter.

Wall Street Is Paying 50 Cents On The Dollar

Which brings us to valuation. Canaccord's producer coverage trades at an average 0.57x P/NAV and its developers at 0.47x. On the bank's targets, MP has 104% upside, Lynas 108% (target raised to A$23), USA Rare Earth 204% and Energy Fuels 150%, even after Canaccord cut its EFR target to C$30 on project delays.

The rating changes: Meteoric (MEI) goes to Hold from Spec Buy, since its value is now tied to Lynas' all-scrip takeover at 0.0207 LYC shares per MEI share. (Lynas shares fell almost 8% the day that deal was announced, another reminder that this market keeps punishing consolidation.) Hastings (HAS) goes to Spec Buy from Hold "on valuation", even though its target was cut to A$0.30 from A$0.55, which tells you just how far the stock has fallen.

Of course, price targets have a habit of following prices rather than leading them, and at least some of the selloff has a perfectly sensible explanation: these are long-duration, capex-heavy projects at a time when the 10Y is above 5%, tech is wobbling and the bid for anything speculative has evaporated. Canaccord concedes as much, blaming "global macroeconomic pressures."

Same Disconnect, Different Metal

Tungsten isn't a rare earth, but it is a critical material with the same chokepoint (China controls roughly 80% of supply, per Jefferies), and it shows the exact same disconnect, only worse. Take Almonty Industries (ALM), the most prominent Western tungsten miner and a name we have covered extensively in recent weeks.

When Goldman's Nick Cash initiated coverage last month, he put Almonty "at the center of the Western tungsten investment narrative," with tungsten prices up 8x since the start of 2025. He was also the Street's skeptic, expecting prices to normalize and Sangdong's ramp to run slower than the market hoped, with a $13 target vs a $24.73 consensus. The stock was $12.74 that morning. Today it is below $9, down 62% from its April peak and back where it started the year, after dropping another 10% on the day of yesterday's Investor Day. So even Goldman's cautious target now implies about 45% upside.

Meanwhile the operations are going the right way. Sangdong in South Korea started production in September and is moving toward 24/7 operations, with its first concentrate shipment due later this month, and Cantor's Matthew O'Keefe models output jumping from 126,287 MTU this year to 444,400 MTU in 2027, with all-in sustaining costs falling from $905 to $319 per MTU. Oppenheimer's Ian Zaffino puts the shares at just 5.7x/4.2x FY27/FY28 EBITDA, with roughly $290 million in net cash.

So what spooked the market? Spot prices. Western APT has slipped from $3,140 to about $2,700/MTU, and Chinese prices have retreated even more sharply. But Zaffino explains why that is a misleading signal: Western APT and oxide plants are running at capacity under long-term contracts and can't absorb more concentrate, so "concentrate prices have softened, even as availability of finished APT/oxide in the West remains constrained." And the demand wave hasn't even started. On January 1, 2027, US defense procurement rules extend to tungsten mining, refining and separation, so Chinese or Russian ore processed in a third country no longer qualifies. Stifel says the US strategic tungsten stockpile is nearly depleted, and Bernstein sees the Western rearmament order boom running from 2027 through 2030. The cherry on top: on Monday, CME announced plans to launch tungsten futures by early Q1 2027 at the latest (subject to regulatory review), which tells you how seriously the market's plumbing is taking a metal that equity investors are currently dumping.

In other words, spot is pricing today's bottleneck in Western processing, and the stock is pricing spot, while the 2027 demand cliff is priced almost nowhere. Sound familiar?

Supply Security Gets The Stage In London

Goldman, for its part, thinks the debate has already shifted. Its third Global Metals & Mining Conference kicks off in London today during LME Week, bringing together the world's largest "diversified, copper, aluminium, rare earth and lithium producers." In their conference preview, Goldman's Matt Greene and the bank's mining team write that "the conversation has increasingly shifted to supply," with governments "becoming more active participants in the mining sector through faster permitting, shared infrastructure, strategic funding, price floors and direct offtake agreements, reflecting the growing importance of resource security." The question the bank poses is the right one: "whether the industry can deliver the supply that markets are increasingly pricing in."

For rare earths, the honest answer seems to be: not anytime soon, and not without China. Which is exactly why the sector's stocks probably shouldn't be trading at half of NAV.

When Macro Lets Go

We have seen this movie before. Back in March we reported that the US reportedly had just two months of rare earths left, and in July that China's "killer chokepoint" was reshaping the global economy. Each time the physical market tightened, and when Washington finally stepped in (see last July's MP deal), the equities caught up violently.

Today we have a two-month trade truce that expires January 10, a Japanese government begging for yttrium, the West's flagship tungsten miner trading below even Goldman's skeptical target ten weeks before the Pentagon's sourcing rules kick in,a floor price that has turned NdPr into a one-way bet with a safety net, and an equity market that is valuing the West's only scalable non-Chinese suppliers at roughly half of what they're worth on conservative assumptions.

Canaccord's closing line sums it up: "We expect demand to remain strong, as the West looks to secure ex-China supply and build its independence within the global magnet supply chain."

Our take: the disconnect will probably close the same way it did last summer, with a headline out of Beijing or the Pentagon, and the investors waiting for macro to give them the all-clear will be buying it 50% higher. After all, nothing cures a 0.5x P/NAV like a 346x price premium.

An Uncomfortable Reality: China's Rare Earth Chokehold May Outlast This Decade https://t.co/ln17BOGCgV

— zerohedge (@zerohedge) October 6, 2026

More in the full Canaccord note "Rare Earths: Equity disconnect from strong market fundamentals", available to pro subs.

Tyler Durden Tue, 10/20/2026 - 17:40

"A Good Idea": SpaceX Jumps On Blowout Quarter, Musk Confirms Committees Discussing Tesla Merger

Update (1730ET): The earnings call has seen SPCX shares extend their after-hours gains amid a tsunami of attention-grabbing comments from Elon Musk and CFO Bret Johnsen.

Perhaps the most shocking was Musk saying that he sees between $500 billion and $1 trillion of annual recurring revenue by the end of 2027.

Then he stepped it up further:

Musk says there’s a small opportunity for SpaceX to have 20 gigawatts of AI compute online next year.

Musk says he’s been spending a lot of his time in Memphis, "often four days a week," trying to get more data center compute developed. 

He’s aiming to bring in 13 gigawatts of compute by the end of next year.

And this year, he expects between 2.5 GW and 3 GW to come online. 

As a reminder, (based on this quarter’s numbers) they have 1.7 GW of nameplate compute.

“We are, frankly, hounded relentlessly by every hyperscaler,” Musk says, referring to demand for SpaceX data centers.

“I don’t think we’re going to have a demand issue here.”

And finally, the topic of merging Tesla and SpaceX was brought up:

"I'm tap dancing through a minefield," says Musk on the question of a merger, adding that both SpaceX and Tesla have formed special committees to discuss this idea.

Musk also downplayed the move somewhat:

"“I think some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it."

But then he adds:

"I do think there’s a lot of merit for combining the companies," Musk says, concluding that "I think it will be a good idea".

The market is pricing a 66% chance of the merger being completed by the end of next year...

All of that combined, has pushed SPCX up around 5%...

*  *  *

As we wrote in our preview, hopes are high for what SpaceX will report today. The company is expected to report solid revenue growth, however more than offset by far more solid capex growth which will result in SpaceX burning almost a quarter trillion over the next 3 years as it builds out its data center capacity. Notably, SpaceX could post its first quarterly profit today - though this is only its second earnings report as a public company. Wall Street expects earnings of 15 cents a share, or about $1.9 billion in net income, compared with a $541 million loss last quarter.

Besides the top and FCF lines, Deutsche's list of "other areas of focus" is a good checklist of what else to look for:

• AI: neocloud pricing and new contracts, the Cursor contribution, Grok Bot adoption, and the data center capex outlook (read: any hint that 2027 capex starts with a "2").
• Launch: timing of the next few launches after Flight 14; Flight 15 looks set for mid-/late November, though DB doesn't expect a second-stage catch.
• Connectivity: after the $8 billion Grain spectrum deal, "additional color on management's next move(s) in the US (build vs. buy)," which is something the wireless carriers will be listening to closely.

Additionally, investors are seeking additional hints about a potential Tesla and SpaceX merger. Today’s earnings are happening just a few days after Tesla unveiled its new Roadster, which incorporated SpaceX gas thrusters that allowed the vehicle to hover and do barrel rolls in the air. Following the event, a bunch of Tesla and SpaceX executives and employees started following each other on X, according to an account that monitors tech executives. DB said that the timing as "mainly a function of valuation differentials and politics (may want to avoid a potential Democrat-led administration taking over post Trump)."

Elon Musk has talked a lot about the “convergence” of his businesses over the last year. Meanwhile SpaceX and Tesla are already collaborating on one of Musk’s most ambitious projects: the Terafab, which aims to mass produce semiconductor chips in the US to be used in his companies’ various products.

Don't expect to see much, if any profit: Starlink satellite-internet service is SpaceX’s only profitable business. The militarized version of Starlink, called Starshield, came under increased scrutiny last week after Ukrainian President Volodymyr Zelenskyy accused the White House and Musk of placing restrictions on the technology in Ukraine, disrupting military operations. Both Musk and Trump have denied involvement, igniting a firestorm over who controls the technology that has become indispensable to Ukraine’s war against Russia.

As for the market's reaction, recall that SPCX shares slumped 14% the day after its first earnings release in August, in part over fears that insiders would sell shares after the earliest of many lockup expirations. Those fears were quickly calmed when the shares rebounded, but the setup heading into this quarter’s results is similar to last time. On Wednesday, an additional 1.3 billion shares, representing 28% of those subject to the 180-day lock-up period, will become available to trade.

So with all that in mind, here is what SpaceX just reported for Q3, its second quarter as a public company. For the most part a solid beat across the board, blowing past Wall Street expectations, and posting its first quarterly profit, $4.4 billion, or 35 cents a share, more than double estimates, while spending a massive $20 billion on capex

• Revenue $14.58 billion, beating estimates of $12.87 billion 
  • Space revenue $1.77 billion, beating estimates of $1.43 billion
  • Connectivity revenue $5.25 billion, beating estimates of $4.86 billion

Here is the revenue by segment: it shows that SpaceX is no longer a Rocket Company but is now mostly a neocloud, pardon, Hyperscaler.

• Capital expenditure $19.59 billion, beating estimates of $19.6 billion
  • Space capital expenditure $1.61 billion, higher than estimates of $1.52 billion
  • Connectivity capital expenditure $1.54 billion, below estimates of $1.6 billion

Here is the capex by segment:

Turning to expenses...

• Total Costs & Expenses $11.78 billion, beating estimates of $11.23 billion
• R&D expenses $4.60 billion, missing estimates of $5.06 billion

... and operating income:

• Operating income $2.79 billion, beating estimates of $2.24 billion
• Connectivity operating income $2.37 billion, beating estimates of $1.86 billion
   
• Adjusted Ebitda $8.81 billion, smashing estimates of $6.59 billion
  • Space adjusted Ebitda $357 million, estimate $123.1 million
  • Connectivity adjusted Ebitda $3.50 billion, estimate $2.94 billion

Here is the adjusted EBITDA by segment:

• Number of rocket launches 35, missing estimates of 41
• Mass to Orbit 476 mt, missing estimates of 559
• Cash and cash equivalents $51.29 billion, estimate$91.2 billion

While much will be said about the company's profitability, note that the $4.4 billion of net income got a boost from $1 billion of “other income” and a $390 million tax benefit. That said, the underlying business still beat expectations: operating income was $2.8 billion versus $2.2 billion expected.

A visual way of representing what happened in Q3: 

Looking at the key components, EBITDA and CapEx, we find that both revenue and EBITDA smashed estimates, while CapEx was largely unchanged from last quarter.

As we noted in our preview the big question would be the delta between EBITDA and CapEx growth, and as shown in the chart below, while EBITDA was a record $8.8BN, it is still nowhere near enough to catch up to the whopping $19.6BN in capex.

Another very important number: amount of installed compute rose to 1.7GW, just shy of estimates of 1.74GW. 

Summarizing the fine print: SpaceX reported blowout revenues and EBITDA, driven by stronger ARPU, even as ending compute, consumer broadband subs and external launches all came below expectations.

Commenting on the quarter, the SpaceX CFO said that the company "delivered another strong quarter in Q3. Revenue grew an impressive 161% year-over-year, fueled by continued momentum in Connectivity and a clear inflection in our Super Intelligence business. The combination of our launch leadership, recurring Starlink revenue, and the significant expansion of our SI infrastructure continues to drive meaningful  operating leverage... We are building the infrastructure of the future with discipline — focused on capital efficiency, strong returns on invested capital, and maintaining a robust, investment-grade balance sheet — while moving with the velocity to capture the  opportunity in front of us."

In its wrap, Bloomberg writes that SpaceX of this quarter is not the same as the SpaceX of last quarter. AI - now officially called Super Intelligence - has overtaken Starlink to become the company’s biggest business by revenue. Just last quarter, Starlink was comfortably ahead. The speed of that shift shows just how quickly SpaceX’s AI infrastructure business is scaling.

The SpaceX story used to be rockets funding satellites. Increasingly, it’s rockets, satellites and a giant balance sheet funding an AI company. In other words, a hyperscaler.

The results were solid, and the stock liked them - at least until the call - with SPCX stock higher about 3%, fading a bit of its after hours jump.

Tyler Durden Tue, 10/20/2026 - 17:35

The Deep(er) Midterms

Authored by Victor Davis Hanson via American Greatness,

There are two ways of looking at the midterms, now less than three weeks away.

• One is as a simple referendum on the issues and politicians of the day.

• The other involves a far deeper conflict of visions (as Thomas Sowell puts it): socialism versus capitalism, intrusive versus limited government, and the destruction of time-honored institutions and traditions versus their preservation and renewal.

Rarely in American history have the two parties been so far apart or the choice between them so stark. In brief, Islamist-sympathizing socialism is on the ballot against free-market capitalism and American exceptionalism.

The new Islamist-allied socialist Democratic Party is confident, largely because the party holding the White House has increased its share of House seats in a midterm election only three times since 1900. Each of those exceptions arose under unusual circumstances.

In 1934, FDR was still riding the wave of his New Deal promises to end the Depression.

In 1998, Bill Clinton enjoyed backlash support after the Republicans’ unpopular impeachment inquiry, at a time when the economy was robust, and the budget was finally being balanced.

In 2002, George W. Bush had united the nation after 9/11 and had not yet begun what proved to be an unpopular Iraq War.

In other words, the party in the White House has gained House seats in only about 10 percent of the 31 midterms over the past 126 years. Pundits also point to Trump’s approval rating, now below 40 percent in most polls, and the persistently high price of regular gasoline ($4.33). Uncertainty over the 33-week Iran war, they argue, makes it difficult for Trump to preserve his majorities in either the House or the Senate.

Those are the issues ostensibly at stake. But the choice goes much further than that: voters face a “deep” midterm election that will help determine the very future existence of the nation.

The new Democratic agenda is not about lowering gas prices. Americans are being asked to hand Congress to what has become the most radical major party in U.S. history, as socialists and neo-communists believe they can finally win statewide races across the country. What would that entail?

Lawfare

The Democrats have not outlined any agenda other than “Trump! Trump! And more Trump!”

If they win the House, Democrats plan to spend the next two years impeaching, investigating, and hounding Trump, his administration, and his family. Their aim is to block new Republican legislation and paralyze the remainder of his presidency.

The Iran War

The Left condemns the effort to denuclearize Iran as a lost war, even though the United States has nearly destroyed the Iranian theocratic apparatus along with much of the country’s nuclear, military, industrial, and economic infrastructure—at a relatively low cost in blood and treasure by historical standards.

An enfeebled Iran, stripped of its military and economic dominance and facing an uncertain future, would no longer be able to blackmail or threaten Europe and North America as a nuclear-armed theocracy. Its terrorist clients would also lose funding, weapons, and leadership, with profound consequences for the Middle East.

When the war ends—as it soon will—and gas prices return to previous levels, policies already in place, including tax cuts, deregulation, foreign investment, energy development, and advances in AI, should help fuel an economic boom.

But the Democrats’ plan is simply to withdraw from Iran, count on the goodwill of the Islamic Revolutionary Guard Corps to guarantee free passage in the Strait of Hormuz, allow Iran to resume full oil production, and accept the Iranian regime’s word that it will no longer threaten the Gulf states or Israel and cease its decades-long support for the terrorist proxies—Hezbollah, Hamas, and, more recently, the Houthis.

Energy

The party that has repeatedly blocked federal oil and gas leases, canceled the construction or reconstruction of dozens of pipelines, and spent billions of dollars to subsidize unreliable, costly, and inefficient solar and wind power is now promising to lower the price of fossil fuels? Who really believes that?

Instead, the Left has vowed to end the production of natural gas, diesel, and gasoline as quickly as possible. Voters need only look at the once robust British and German economies, now struggling after years of restrictions on oil and natural gas exploration and development, as well as Germany’s elimination of nuclear power.

We should recall Obama’s energy secretary Steven Chu. He infamously let slip that his goal was to keep American energy prices at European levels. In the UK and Germany, gasoline is currently around $9 a gallon—a great thing for Democratic Socialists who see high fuel prices as the best way to cool the planet and remain in power.

Gasoline in the United States now averages only $4.33 despite Iranian oil being off the market, attacks in the Gulf, and Iran’s attempted blockade of the Strait of Hormuz. The reason is that Democrats were prevented from blocking new fossil fuel leases, pipelines, refineries, and fracking between 2017 and 2021 and again from 2025 onward.

Immigration

Almost none of the current Democratic candidates—at least until the eve of the 2024 election—criticized the Biden administration’s destruction of the southern border, much less the open-armed embrace with which it welcomed some 10–12 million illegal aliens, including 500,000 criminals.

The Left wants to dismantle border enforcement and the wall and to ensure that the current near-zero level of illegal immigration expands to the Biden administration’s peak of 10,000-plus illegal entries per day. Voters may be disturbed by ICE detentions, but they should remember a high-profile ICE presence was only necessary because the border was effectively eliminated by Biden.

By contrast, it is almost impossible now to find Biden’s millions of illegal aliens who were deliberately dispersed by the Left throughout the country—and particularly into Democratic sanctuary-city states. The Left will never close the border. Nor will it ever allow immigration to become entirely legal, meritocratic, diverse, and manageable, because to do so would cut off the Left’s supply of future constituents.

Fraud

Some estimates put aggregate current federal-program fraud at nearly $500 billion annually.

There is also widespread welfare and social services fraud concentrated in blue states like California, Illinois, Massachusetts, Minnesota, and New York.

In these states, welfare and social services are generous and, by design, subject to little scrutiny. Fraud is treated as a minor problem in what Democrats regard as a successful effort to attract voters with federal and state dollars. Few major Democratic officeholders sincerely denounce such fraud, since doing so could cost them votes.

DEI

The idea that race, outward appearance, gender, and sexual preference are essential rather than incidental to one’s identity is a central doctrine of the contemporary Left.

Should the Left regain power, expect de facto nullification of the bans against racial tribalism found in federal law and Supreme Court rulings. Race-based hiring, admissions, dorms, and graduations would return and proliferate.

The demands for reparations would likely regain traction, as they already are doing in California, a state with no history of slavery and 27 percent of the resident population born outside the United States.

The Left believes that people who were never slaves are owed billions of dollars by a government already $40 trillion in debt—and that people who never owned slaves must atone for an institution abolished 161 years ago. Slaveowners accounted for about 1.4 percent of the nation, almost all in the South. That some 700,000 Americans died in a civil war that ended slavery seems to be of absolutely zero importance to the Left.

Islamism

Only a quarter-century after 9/11, Islamism is somehow on the ballot. After October 7, the Democratic Party embraced the philo-Islamist/socialist view that sees radical Islam as not so radical after all. For them, theocratic Islamism is a legitimate and indeed preferable alternative to democratic Israel and increasingly a legitimate alternative to Western values and laws.

There is not a single truly democratic state in the Islamic Middle East, where women, gays, and non-Muslims are de facto second-class citizens. And yet we are told by many on the new Left that there is no real difference between Iran and Israel and that the terrorist organization Hamas is Israel’s innocent victim.

The apparently new leftist-Islamist alliance is actually not so new. We see its dividends now in a burning Paris. Decades earlier, that political partnership destroyed the Shah’s regime and ushered in nearly 50 years of Iranian theocratic tyranny.

Opposition to radical Islam and illegal immigration, along with justifiable anger toward a class of elites who seem openly to hate Western civilization, explains why reform and remigration parties are gaining traction all over Europe. Indeed, in the continent’s eleventh hour, Europeans are starting to fight open borders, unassimilated immigration from the Middle East, radical green ideologies, and disarmament. Why would we vote into power what the Europeans are now desperately trying to eject from office?

We already know what will happen when the new Democrats take power. After all, they are only promising to do to America what socialists have already done to now-floundering Europe, Canada, and California.

Before the election, voters should also ask themselves why more than two million Americans each year are fleeing the blue-state socialist model.

The answer? On taxes, regulations, cost of living, housing affordability, crime, and state budgets, red and purple states consistently outperform blue states. Americans already vote with their feet; they should remember those differences when they cast their ballots.

Finally, voters should also ask themselves why the current crop of Islamist-adjacent socialists always needs to cleanse their social media accounts. Why must they retract their prior bombast? Why do they attack questioners rather than answer questions about their past?

Why do we all know that what they say and do after being elected will be exactly what they said and did before they ran for office?

By contrast, are conservatives, Republicans, or independents serially trashing the United States in the manner of Democratic Socialists like Hasan Piker, who said that the United States is worse than al-Qaeda?

Is there a Republican counterpart to James Talarico, who scrambles to retract remarks describing capitalism as an “oppressive system” that needs to be “dismantled” or suggesting that “white skin” confers immunity to the “virus of racism”?

Or is there anyone among the conservatives remotely resembling Representative Ilhan Omar, who declared that America is “one of the worst countries”? Or like Darializa Avila Chevalier, who called the United States “a f–king disgrace”?

Are they demonizing the majority of the American people in the manner of Zohran Mamdani’s housing czar, Cea Weaver, who declared that homeownership is “a weapon of white supremacy”? Or like Melat Kiros, who argues that “We were never really going to be able to tackle white supremacy in the way that we need to without reparations”?

Could anyone imagine Republican or conservative candidates apologizing for terrorism in the manner of marquee Senate candidate Abdul El-Sayed, who responded to a cowardly Islamist attack on a synagogue with “Hurt people do hurt people”?

In short, treat this midterm election as the deep choice that it is.

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

Tyler Durden Tue, 10/20/2026 - 17:20

US Nears Russia Deal To Free Detained Americans, Witkoff En Route To Moscow

ABC and The New York Times are reporting that multiple Americans detained in Russia could soon be free as part of a major Trump deal with Moscow. 

Negotiations are said to be in the final stages, with Special Envoy Steve Witkoff set to be in Moscow on Wednesday. And so a major announcement and release could happen by the time he leaves the Russian capital later the same day.

via PBS

Stephen Hubbard, an American who is accused of fighting as a mercenary for Ukraine forces when he was captured in 2022, is expected to be among the released prisoners.

Citing unnamed officials, ABC writes, "They add that the talks have centered on freeing Stephen Hubbard, a 72-year-old retired teacher who is the only American held in Russia officially designated as wrongfully detained by the State Department, as well as several other U.S. citizens held by Moscow on what the administration said it believes are dubious charges."

President Trump acknowledged Monday that he was "trying to get a hostage that the country has been after for a long time" - which appeared to refer to Hubbard. "Let's see what happens," Trump said. "That'll be soon."

On Tuesday, Witkoff and Ukrainian President Volodymyr Zelensky met in Oslo as part of efforts to find an end to the Ukraine war. In a closing presser for the talks, Zelensky said the latest working proposal features security guarantees for Ukraine modelled on NATO's Article 5, which is the collective defense clause.

"We have discussed security guarantees, and I’m grateful to the American side for emphasizing once again that they will be strong," Zelensky said following talks in Oslo.

"We discussed NATO, Article 5 and Article 5-like guarantees. Different types of security guarantees are included in the document, which Steve will share with the Russians, and we will hear their feedback."

However, the Kremlin is unlikely to go for NATO Article 5-style protections, given a key rationale for the 'special military operation' in the first place was NATO expansion up to Russia's doorstep.

Kremlin spokesman Dmitry Peskov has meanwhile said, "We hope that a meeting can be arranged in the very near future, and that the American negotiators, Mr. Witkoff, will be able to brief President Putin on their contacts with both the Ukrainians and the Europeans."

Norwegian PM Jonas Gahr Store says US envoy Steve Witkoff will travel to St Petersburg tomorrow for talks with the Russian leadership, following today’s discussions in Oslo with Zelensky and EU representative Alexander Stubb. “He will... exchange ideas from this meeting and proposals developed by European and American colleagues, and possibly pave the way for a meeting at the leaders’ level.”

— Brian McDonald (@BrianMcDonaldIE) October 20, 2026

Witkoff is due in Moscow Wednesday, where he is indeed expected to present the results of the Oslo talks to Putin and his team.

Peskov said further: "We consider such meetings to be of great importance on every occasion. They are always timely and very substantive, and we greatly appreciate the mediation efforts of the American negotiators."

Tyler Durden Tue, 10/20/2026 - 17:00

SpaceX Earnings Preview: Equity Sees $125 Billion, Credit Sees 83 Cents

Today after the close, SpaceX (SPCX) reports its second quarter as a public company, a day ahead of Tesla and (as Deutsche Bank puts it) "surprisingly early." The first one did not go well: the stock slid despite a big revenue beat and closed down 14% the next day, wiping out some $225 billion in market value.

This time, the sellside is mostly looking past the quarter and straight at 2027. Nobody more so than Deutsche Bank's Edison Yu, who in his preview note "Compute-driven state of mind" (available to pro subs) lifts his 2027 forecasts to $125 billion in revenue and $84 billion in EBITDA, materially above consensus of $108 billion and $65 billion. The catch, which Yu flags himself, is that those numbers are "underpinned by > $200bn in capex."

And that's where the other half of the SpaceX story comes in. While equity analysts debate how high 2027 can go, the company's 6.65% notes due 2056 just slumped to a lifetime low of 83.3 cents on the dollar, down from 98.83 at issue in June, and SpaceX's five-year CDS spreads blew out to a record high earlier this month.

In other words, the stock market is pricing the upside, and the bond market is pricing the bill.

The Quarter: In Line, With "Potential Upside In Profitability"

Start with the near term. Deutsche expects an in-line print, "with potential upside in profitability." Yu models Q3 revenue of $12.6 billion (+127% YoY), a gross margin of around 59% and EBITDA of over $6.6 billion. The engine is AI, which "is benefiting from a full-quarter contribution from cloud hosting, boosting revenue by almost 3x sequentially to ~$6bn." AI solutions & infrastructure alone is expected to jump from $2.2 billion in Q2 to $6.0 billion, which means the AI segment would account for just over half of total revenue at the business formerly known as a rocket company.

Elsewhere, consumer broadband subscribers should end the quarter at 13.5 million (vs. 12.0 million in Q2), while ARPU slides another $2 to $64, giving connectivity revenue of nearly $5 billion, up 60% YoY. The Space segment, the one in the company's name, is expected to shrink 22% YoY on twelve external Falcon 9 launches. As for the cash, Yu forecasts $19 billion in capex "mainly directed at AI compute," taking capacity to 1.8GW, and leading to free cash flow burn of $14 billion, in one quarter.

Here is the full breakdown vs. consensus:

Note that Deutsche is slightly below the Street on Q3 revenue ($12.63 billion vs. $12.89 billion) and broadband subs (13.5 million vs. 14.2 million), but slightly above on EBITDA margin (52.6% vs. 51.4%). Options are pricing a move of about 7.8% in either direction, which is a bit more than half of what the stock actually did after Q2.

How High Can 2027 Go?

This is where Deutsche gets interesting. In Yu's view, "the largest swing factor in respect to forecasts will be compute deployment." Management is targeting more than 2GW exiting 4Q26, which DB thinks is "doable," and then 5-10GW exiting 2027. DB models toward the low end, at about 6GW, and lays out a line of sight into 5-7GW of power over the next couple of years: 1.9GW of Doosan turbines, 1.2GW from the Southaven plant's 41 turbines, 0.7-1.1GW from the APR acquisition, 900MW or more leased through the Stateline JV, plus the TVA grid supply and backup turbines at Colossus 1 and up to another gigawatt "from other sources." (We assume SpaceX will need all of it to keep the Nvidia chips it is borrowing to buy switched on.)

Put it together, and the bank's math says the neocloud business alone can generate $70-90 billion of revenue in 2027, "depending on timing and pricing dynamics." For context, SpaceX's entire 2025 revenue was $18.7 billion. And the result is a 2027 forecast that is now 16% above consensus on revenue and 29% above on EBITDA:

Deutsche isn't even the most aggressive on compute. Goldman's Eric Sheridan, in his own SpaceX Q3'26 preview earlier this month (also available to pro subs), forecasts SpaceX scaling to ~2.4GW of AI compute by year-end, ~7.0GW by the end of 2027 and ~10.6GW by the end of 2028:

Goldman models $85.5 billion in 2027 AI solutions & infrastructure revenue, of which $45.5 billion comes from hosting deals on just ~1GW of contracted capacity. As we noted when we dug through Goldman's neocloud rate card, most of those hosting deals are "90-day cancellable on both sides." Which is probably worth keeping in mind when somebody extrapolates them to 2029.

Speaking of extrapolating, Musk himself already raised the bar on the Q2 call:

Musk reiterates expectation of $100 billion ARR by the end of this year (10x the June ARR), and now sees SpaceX seeing $1 trillion in revenue by 2030, and "non zero chance" of getting there in 2029. Some context: the average analyst estimate (30 of 39 sellside analysts are Buy on SPCX) for 2029 revenue is $208 billion

— zerohedge (@zerohedge) August 4, 2026

Evercore's Kutgun Maral, for one, expects an annual run rate of $104 billion by year-end and 2.3GW of compute (vs. the Street's 2.2GW), and raised his target to $270. Deutsche keeps its Buy and $235 target, vs. Friday's close of $146.03.

The $200 Billion Footnote

Here is the full set of DB's estimate changes. Look at the bottom line of each block:

Deutsche raised 2027 revenue by $10 billion, and 2027 capex by $22 billion, to $207 billion, and 2028 capex by $40 billion to $230 billion. And while 2028 revenue barely moves ($200 billion vs. $198 billion), 2028 EPS actually dips, because, as Yu admits, "there is concern by investors that pricing could normalize in 2028-29." The bank now assumes $/GW pricing "declines by 25% to about $30bn in 2028." In other words, the compute gets more expensive to build exactly when it gets cheaper to rent.

Line up DB's own EBITDA against DB's own capex, and the problem becomes obvious:

Napkin math: under Deutsche's bullish model, capex exceeds EBITDA by about $47 billion this year, $124 billion in 2027 and $81 billion in 2028, or roughly $250 billion across three years. SpaceX ended Q2 with $100 billion in cash and marketable securities, and DB expects about $13.5 billion of that to have been burned in Q3 alone. Which means the 2027 gap by itself is bigger than the cash pile... and that gap has to be filled by someone.

That someone, of course, is the bond market.

Meanwhile, In Credit...

Regular readers will recall that SpaceX slammed head first into the bond market less than two weeks after its record $86 billion IPO, selling $25 billion of investment grade bonds which were, depending on who you asked, "4x oversubscribed." Bondholders have been underwater pretty much since the break, and on Monday the 6.65% notes of 2056 hit a new all-time low of 83.345:

At that price, the 30-year paper of a BBB-rated company that is supposedly about to post $84 billion in EBITDA yields roughly 8.1%, which is the kind of number one usually associates with the junk bond market (as we put it back in August, "SPCX bonds skeptical about the $1 trillion in revenue"). The 5.875% notes due 2036 tell the same story: per Trace, their spread was 193bps earlier this month, vs. 140bps when they were sold in June.

What changed? The record chip-collateralized loan. On Oct 6, the FT reported that SpaceX wants to raise another $40 billion, about $10 billion in bank loans and $30 billion of IG debt, in a deal led by Apollo, to pay for Nvidia chips. Add the $25 billion from June, and SpaceX will have borrowed (or tried to borrow) $65 billion since June, on top of the $38.4 billion in debt it reported as of June 30. The next day, five-year CDS jumped as much as 16.7bps to about 197.6bps, the highest since the swaps started actively trading in June (when they were around 110bps):

Of course, we covered it at the time:

Barclays' credit analysts, led by Andrew Keches, argued that an SPV structure might be good for SpaceX in the long run by reducing the amount of debt at the parent company, but warned that in the near term the coming supply could put pressure on the company's existing bonds.

Well, they were right about the near term: less than two weeks later, the bonds are 1.4 points lower than where they were on Oct 7, and DB's revised capex forecast suggests $40 billion won't be the last ask. Or as Coherence Credit's Sal Naro told Bloomberg, speaking of AI debt in general: "This is unprecedented debt supply with no real ending in sight."

None of this will surprise those who have been reading us since last October, when we first warned that AI had quietly become a debt bubble too, and that the debt would sooner or later have to compete with everyone else (including Uncle Sam) for the same duration buyers. SpaceX, which Musk said in December had been cash-flow positive for years and didn't really need anyone's money, is now one of the biggest borrowers in that line.

What To Watch Today After The Close

Deutsche's own list of "other areas of focus" is a good checklist:

• AI: neocloud pricing and new contracts, the Cursor contribution, Grok Bot adoption, and the data center capex outlook (read: any hint that 2027 capex starts with a "2").
• Launch: timing of the next few launches after Flight 14; Flight 15 looks set for mid-/late November, though DB doesn't expect a second-stage catch.
• Connectivity: after the $8 billion Grain spectrum deal, "additional color on management's next move(s) in the US (build vs. buy)," which is something the wireless carriers will be listening to closely.
• Tesla merger: DB sees the timing as "mainly a function of valuation differentials and politics (may want to avoid a potential Democrat-led administration taking over post Trump)."

To that we'd add one more: anything on financing. Specifically, whether the $40 billion Apollo deal is done, how much of it sits in an SPV, and how much more is coming. And, after today's pledge of a SpaceX share to "every kid in America," maybe also how many shares that is.

Who Blinks First?

Deutsche's long-term thesis (as well as everyone else's for that matter) is straightforward: "the endgame is to build and possess the greatest amount of compute at the lowest cost on the ground and eventually in orbit," which should eventually let SpaceX "deliver leading intelligence/inference capabilities which we think investors generally are still quite skeptical about." Yu also concedes that "the stock has increasingly traded more in line with the AI cohort as opposed to Space." Morgan Stanley's Adam Jonas, who has become the bank's resident in house SpaceX cheerleader and now covers only this company, thinks SpaceX "looks unusually cheap" on the forward (duh), recently described the skepticism even more vividly: asked who owned the stock, out of 40 clients "not a single hand went up." 

So who is right: the equity analysts who see 2027 EBITDA nearly 30% above consensus, or the bondholders who are demanding 8% for 30 years? Probably both, in their own way.

The upside case is real, but every dollar of DB's 2027 EBITDA comes with roughly two and a half dollars of capex attached, and that capex will be funded by the same creditors who just marked the 2056s to 83. If today's call brings a higher capex number and no clarity on financing, we suspect the bond market will be the one setting the tone, just as it did after Q2. Then again, Musk has never been shy about telling bears that he "tried to warn them," and as of Friday's close the stock was still 8% above its $135 IPO price. The bonds, meanwhile, are almost 16% below theirs.

Much more in the full Deutsche Bank "Compute-driven state of mind" note and Goldman's "SpaceX Q3'26 preview," both available to pro subs.

Tyler Durden Tue, 10/20/2026 - 15:45

CME Plans World's First Tungsten Futures As Booming Missile Demand May Spark Severe 2030 Shortage

CME Group plans to launch the first tungsten futures contract as deepening resource nationalism, Chinese export restrictions, and rising demand from the global rearmament cycle intensify Western governments' focus on securing conflict-free materials and highlight the industrial base's urgent need to hedge future price risk. These new contracts would introduce exchange-traded forward pricing to a market that currently relies heavily on spot prices and has limited visibility into future pricing.

Trading is expected to begin in early 1Q27, subject to regulatory review. The contract will be settled against Fastmarkets' Western benchmark for ammonium paratungstate, or APT, the raw material and commercial precursor for almost all downstream tungsten products. 

For miners, manufacturers, and trading desks, the potential benefits extend well beyond hedging. A liquid futures curve could show how the market participants view the worsening global supply constraints for the critical metal. That would add a new forward-looking dimension to spot prices, allowing participants greater visibility into pricing months and years out. 

"Tungsten sits at the intersection of advanced manufacturing, semiconductor technologies and geopolitics, and our clients are increasingly seeking to hedge their exposure and improve price transparency," said Jin Hennig, CME Group's managing director and global head of metals.

"CME Group Tungsten futures will join our growing suite of critical minerals and energy transition metal products, providing clients more opportunities to manage risk as global supply chains restructure," Hennig added.

Fastmarkets CEO Raju Daswani pointed out, "Growing volatility and concentrated supply are increasing the need for transparent, trusted price benchmarks in the tungsten market," adding, "The launch of this contract, based on Fastmarkets' tungsten APT assessment, is a significant step in the market's development, connecting physical-market price discovery with new opportunities to manage price risk." 

Fastmarkets' Western APT benchmark surged after China, in early 2025, restricted the flow of the critical metal to Western defense and industrial companies, sending prices as high as $3,000 a ton. Spot prices have since moved lower to around $2,775. 

CME's announcement coincided with Almonty Industries' Investor Day at Nasdaq in Midtown Manhattan, where the tungsten producer presented to analysts from Oppenheimer, Stifel, Jefferies, Goldman Sachs, and other firms.

CEO Lewis Black and the management team outlined a constructive operating outlook for the miner's South Korean, Spanish, and Portuguese mines, along with updates on expansion projects and additional supply sources.

Almonty's investment case centers around its move to be one of the largest conflict-free tungsten miners (ex-China) for the West. Its operating assets and expansion pipeline position the miner as a tungsten lifeline for the rearmament cycle.  

Black told investors that constrained Western tungsten supplies are strengthening Almonty's commercial position, supporting improved offtake terms as Sangdong ramps Phase 1 production and advances its Phase 2 expansion.

Sangdong's Phase I is designed to process 640,000 tons of ore annually. Phase II is planned to double that capacity, with equipment ordering and underground planning already underway.

Several projects offer additional growth potential:

• Rwanda: A planned joint venture, to be owned 75% by Almonty and 25% by the government, would initially source and process material from local producers. Management views this as a faster route to incremental supply while longer-term mining projects advance.
• Panasqueira: Drilling for the Portuguese mine's Level 4 expansion is expected to finish by year-end. Management is also evaluating the recovery of tungsten and other metals from existing tailings.
• Los Santos: Tailings processing has produced encouraging laboratory and pilot results, supported by an offtake agreement with a price floor. Commercial viability remains unproven.
• Montana: Existing permits and nearby infrastructure support development potential, but detailed planning remains underway. The presentation did not establish a firm production timetable.
• Sangdong molybdenum: Additional drilling is intended to validate historical data and support an updated technical report, providing a separate development opportunity beneath the tungsten deposit.

"Almonty remains one of the key solutions to meeting western tungsten demand after China's exit from the market and the company's impressive production ramp is still unfolding with prices just off record highs. We are updating our target price to $21 given the push-out of Sangdong shipments but remain Buy rated," Stifel materials analyst Brock Cannon wrote in a note after the investor meeting. 

Jefferies chemicals and materials analyst Laurence Alexander said the Sangdong ramp remains a near-term catalyst. He indicated that the early January ban on US defense companies sourcing tungsten from foreign adversaries or conflict areas "represents a clear pivot point in demand, which should align favorably with the Sangdong production ramp."

Alexander continued, "The US will prohibit defense contractors from acquiring tungsten, tungsten metal powder, and tungsten heavy alloys mined, refined, or produced in China, Russia, Iran, or North Korea. With only ~13% of global production from conflict-free zones, the qualified supply pool is likely smaller than the headline deficit implies. Should a similar EU measure be implemented, Western premiums likely widen further."

The key takeaway from the new CME contracts, set to begin trading early next year, is a forward curve that will provide the first clear view of how the market interprets the shortage of this critical material.

A Financial Times story published overnight adds to the mounting global news coverage, suggesting that spot prices for critical materials remain disconnected from reality, as China's resource nationalism has left Japan just "months" away from "running out of critical rare earths."

We'll leave readers with the most impactful chart from Almonty's investor deck, presented to analysts yesterday. It shows a widening structural tungsten deficit emerging around 2030.

In that case, it's all about "owning the bottlenecks." The mining sector has been de-rated in the second half of the year, but it will bottom out at some point, and the theme of owning the top producers will reemerge amid the rearmament cycle ramping up. 

Tyler Durden Tue, 10/20/2026 - 15:45

Is YouTube Still Running Cover For Fauci?

Authored by Peter Navarro via The Epoch Times,

Anthony Stephen Fauci harmed millions of Americans by mismanaging the pandemic. Google’s YouTube and its woke censors helped him every step of the way.

The pandemic is over. The censorship is not. YouTube still suppresses speech that threatens Dr. Fauci and the failed policies he built. The latest example is an interview I gave to Epoch Times Senior Editor Jan Jekielek about my new book, “Why Fauci Must Rot in Prison.”

YouTube runs its censorship under what it calls the “Four R’s of Responsibility”: Remove, Raise, Reduce, Reward. It did not Remove the interview; a takedown would have made news. It chose the quiet R: Reduce.

Here is what Reduce looks like. The interview premiered on Oct. 13. Five days later it had 21,248 views. The 10 full episodes of Mr. Jekielek’s American Thought Leaders posted before mine averaged about 170,000 views; the five immediately before it averaged 73,000. In the show’s China playlist, where my interview sits, the 10 prior episodes averaged 124,000. An episode with Dr. Phil posted one day ago already has 47,000—more than double mine in a fifth of the time.

This is not an unpopular video. According to Mr. Jekielek, it is performing massively on other platforms. Only on YouTube has it been wounded on arrival.

That is the YouTube black box. Nobody outside Google can see which switch was thrown, and there is a drawer full of them: pulling a video from the recommendation engine that drives most of its traffic; dropping it from the “Up Next” autoplay queue; burying it in search; withholding the notification to a channel’s 584,000 subscribers; tagging it “borderline” so it is never shown to anyone who did not already go looking; putting it in “limited state,” which strips comments, likes, and suggested videos; and demonetizing it. The video stays up, so YouTube can swear it censored nothing. It is a cell with no door.

This is the same war YouTube helped Dr. Fauci wage across every front of the pandemic. Let me be clear: Dr. Fauci was dead wrong about the lockdowns, masks, early-treatment antivirals, and the risks of the vaccines and boosters. YouTube silenced the people who were right. Americans died. Young men got myocarditis. Pregnant women may have had more miscarriages.

In April 2020, YouTube CEO Susan Wojcicki told CNN that “anything that would go against World Health Organization recommendations would be a violation of our policy.” Dr. Fauci stood with the WHO. So YouTube stood with Dr. Fauci.

Lockdowns. In October 2020, Jay Bhattacharya of Stanford, Sunetra Gupta of Oxford, and Martin Kulldorff of Harvard published the Great Barrington Declaration. It argued what I had argued inside the White House: general lockdowns would kill more people than they saved. Francis Collins called them “fringe epidemiologists” and ordered “a quick and devastating published takedown.” Dr. Fauci wrote in his diary on Oct. 15, 2020, in his favorite words: “I blew away the Great Barrington Declaration.” YouTube finished the job. In April 2021, it deleted a Florida roundtable in which Gov. Ron DeSantis sat with Mr. Bhattacharya, Mr. Kulldorff, Ms. Gupta, and Scott Atlas, because the panel said children should not be masked.

Masks. On March 8, 2020, Dr. Fauci told 60 Minutes, “There’s no reason to be walking around with a mask.” Then came mandates, then two masks at once. When Sen. Rand Paul (R-Ky.), a physician, said in August 2021 that cloth masks do not prevent infection, YouTube deleted the video and suspended him for a week.

Antivirals. I put more than 60 million doses of hydroxychloroquine into the Strategic National Stockpile. YouTube removed testimony from Sen. Ron Johnson’s (R-Wis.) December 2020 hearing on early treatment, then in June 2021, suspended him for a week for saying hydroxychloroquine and ivermectin were safe generics that deserved study.

Vaccines. On Sept. 29, 2021, YouTube banned any claim that an approved vaccine is dangerous and began terminating channels wholesale. That fall, Dr. Fauci’s own diary recorded “a lack of a lot of data for safety among young individuals particularly in the context of myocarditis,” while the White House chief of staff was “very much intense on getting this approval through.” Eight months earlier, he had written that post-dose fever could “theoretically” be associated with first-trimester miscarriage. Say that on YouTube in 2021, and your channel was gone.

In my book, I lay out, issue by issue, that I was right and Dr. Fauci was wrong. YouTube made sure the country heard only him.

YouTube has already confessed. On Sept. 23, 2025, Alphabet’s lawyers wrote the House Judiciary Committee that Biden officials “conducted repeated and sustained outreach” and “continued to press the Company to remove non-violative user-generated content.” Thirteen months later, it is throttling a Fauci critic again.

It is time for the FCC to put an end, once and for all, to YouTube playing God with our lives. The blood on Dr. Fauci’s hands has spilled onto YouTube. YouTube has made a mockery of Google’s old motto, “Don’t be evil.” It is time to do to YouTube what YouTube has done, at such cost, to so many of us. Silence them.

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

Tyler Durden Tue, 10/20/2026 - 15:30

EU Accuse Trump Of Pushing Ukraine Into 'Surrender' As Witkoff Meets Zelensky In Oslo

As President Trump ratchets the pressure on Zelensky, the expected furious voices out of the EU are at a fever pitch.

EU High Representative Kaja Kallas on Tuesday rebuked the United States amid reports Washington has cut off intelligence-sharing, and after Trump signed a waiver preventing the Lindsey O. Graham Sanctioning Russia from being enacted.

via Ukrainian Presdency

The White House is also demanding that Zelensky immediately halt all long-range drone strikes on Russian energy facilities.

The EU's Kallas has shot back: "American negotiators have been trying to push Ukraine into surrender for almost two years."

She alleged the US is pressing Kyiv to give in purely to Putin's terms, even as new talks among Western allies are happening in Oslo, Norway.

"Why Ukraine hasn't surrendered on Putin's terms is because Europe has been supporting Ukraine," she told the European Parliament in the fresh remarks.

She said European partners must remain at the negotiating table in order to "balance" the positions being taken by the White House. She strongly suggested these positions are being influenced by Moscow.

"Those things that they are interested in lifting sanctions, all of these things actually Europe needs to be around that table because it's European decisions," Kallas said.

Despite the obvious souring of relations between the US and Ukraine, Trump envoy Steve Witkoff and Volodymyr Zelensky are currently meeting in Oslo on Tuesday.

Norwegian Prime Minister Jonas Gahr Støre is playing host and mediator "at a critical time for Ukraine" - a statement said.

Zelensky posted video of the initial meet and greet:

Ukraine is working for peace. I thank our partners for their support! https://t.co/ocTVnk05wQ

— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) October 20, 2026

US Secretary of State Marco Rubio has rejected as "scandalous" some of the fresh accusations coming out of Europe, particularly the charge that Ukrainians are dying due to Washington throttling intelligence.

"I saw somebody associated with the Ukrainian government say that people in Ukraine are dying because the US is denying them information. That's scandalous. That's outrageous. That's just simply not true. That's not accurate," the secretary of state said.

* * *

Tyler Durden Tue, 10/20/2026 - 15:00

The Simpsons Brings Back Apu As Irritable, Loud, And Unlikeable

Authored by Steve Watson via Modernity.news,

The Simpsons has finally let the the Indian character Apu speak again after nearly a decade of silence prompted by previous accusations of 'racist stereotyping' levelled at the show all stemming from the fact that a white actor voiced the character.

However, what has now transpired perfectly illustrates what happens when producers cave to activist pressure and then overcorrect.

The once happy, lovable Kwik-E-Mart owner is now irritable, loud and unlikable, according to viewers reacting to Sunday's episode "The Revengening."

Removes Indian immigrant character who was happy and lovable because of claims of racist stereotyping. Bring character back after hiring authentic Indian immigrants to write and voice character. He is now irritable, loud, and unlikable. What did the producers mean by this?

— Magills (@magills_) October 19, 2026

The character last spoke in the October 2017 episode "The Serfsons." He continued to appear in the background as a mute figure while the show grappled with complaints over voice actor Hank Azaria affecting an Indian accent.

Azaria told a podcast at the time that he had spoken at his son's school and encountered a 17-year-old Indian student who had never watched the show yet treated "Apu" as a slur.

"It's practically a slur at this point," Azaria said. "All he knows is that is how his people are thought of and represented to many people in this country." He continued: "I really do apologise. I know you weren't asking for that but it's important. I apologise for my part in creating that and participating in that. Part of me feels like I need to go around to every single Indian person in this country and personally apologise."

Plenty of Indian viewers rejected that framing at the time.

No Indian was ever offended by Apu apart from that failed comedian Hari Kondabolu.
Most Indians loved Apu.
So take your concepts of cancel culture and cultural appropriation and stick it where the sun don't shine.

— Raj (@rsn) April 13, 2021

Why do people keep listening to a small percentage of outraged marxist mobs on the internet ????

— s?? ???????? ???? ? (@SamChenkual) April 13, 2021

The pressure that produced the apology originated with Kondabolu's 2017 documentary The Problem With Apu. The film argued that the convenience-store clerk character rested on harmful stereotypes. The show made a glancing reference to the complaints in 2018, then largely parked the character.

Azaria later described the decision to stop as a collective one the production team felt was "the right thing." He continued voicing other Springfield residents while Apu stayed quiet.

Sunday's Halloween-themed episode treated the long absence as plot. A mysterious killer in a "Daft Monk" costume (a Daft Punk helmet plus monastic robe) is repeatedly killed by Springfield residents, survives, and returns a year later seeking revenge. He summons the town to City Hall, removes the helmet, and reveals himself as Apu. "I am the man you left for dead. I am the one you pretended never existed," he declares.

The character is now voiced by India-born, U.S.-raised actor Sunil Malhotra, known for animation work including The Legend of Korra and The Legend of Vox Machina.

In the episode, Apu recounts being dumped on the Island of Forgotten Garbage, healed by Dr. Nick, returning home to find his family and the Kwik-E-Mart gone, and then being ignored by everyone in town as if invisible.

Marge steps in with language that tracks the show's own earlier hesitation: "Apu, we're so sorry we left you for dead. Believe me, we wanted to do the right thing." Bart adds, "But we were so scared, and just didn't know what to do."

Homer offers a penance that doubles as a reminder of the character's previous place in town life: "You were on our bowling teams, our barbershop quartets, our dad rock cover bands. We took you for granted. I took you for granted." The sequence turns out to be a nightmare; Apu wakes in the Kwik-E-Mart with Manjula (now voiced by Janina Gavankar) and agrees to attend a Halloween party.

Showrunner Matt Selman described the approach as deliberate. "We love this character, and wanted to bring him back in a smart, 'Simpsons'-y way that allowed him to evolve," he told Variety. "We're excited by what Sunil has already brought to the role, and look forward to seeing more of Apu in the future."

Viewers who watched the episode did not share that enthusiasm. Reactions on X described the new voice as try-hard and the character as louder and much less appealing than the version that had been retired.

@DiscussingFilm This seems more racist then the first voice

— I hear you (@Seriously_try) October 19, 2026

@DiscussingFilm Leftism and political correctness ruins everything. This shit is ass.

— holysmokes (@holysmokes_84) October 19, 2026

@DiscussingFilm Sounds like a shittier version of what his voice was before

— Cozy Autumn Groyper (@thatgroyper2) October 19, 2026

@DiscussingFilm This actually sounds way more offensive because he is trying to emulate the original

— Karim Jovian (@KJovian) October 19, 2026

@DiscussingFilm id rather have him silent than this. honestly, just end the show already.

— ?? (@1c0pnq) October 19, 2026

@DiscussingFilm That voice is fucking garbage. Insulting to fans. Just end the show. The Simpsons, as great as it was its heyday, is now an anachronism that cannot exist in today’s hypersensitive culture. It is now something else, so just end the show and create something else, FFS.

— William Sullivan (@WillyJSullivan) October 19, 2026

This is what happens when a show that once thrived on sharp, boundary-pushing satire decides every joke must first clear a committee of the professionally aggrieved.

The Simpsons built its appeal on equal-opportunity exaggeration, the willingness to mock everyone and everything without pausing to check who might claim injury on behalf of someone else.

That edge is gone. What remains is a cautious, self-flagellating version of the same program, rewritten to soothe activists who treat other people's cultures as props for their own moral status.

The result is not progress. It is a shambling remnant of the original, kept on air by people more interested in signalling their virtue than in telling a funny story.

* * *

Tyler Durden Tue, 10/20/2026 - 14:45

Florida Issues Arrest Warrant For Former Cuban Leader Raul Castro

Authored by Troy Myers via The Epoch Times,

Florida is seeking to arrest former Cuban leader Raúl Castro over his alleged role in a conspiracy to shoot down and murder three U.S. citizens and one lawful resident aboard two civilian aircraft more than 30 years ago.

The state arrest warrant was announced Monday by Florida Attorney General James Uthmeier, who accused Castro of having spies embedded in America to help carry out the shooting down of two unarmed planes operated by Brothers to the Rescue, a humanitarian organization that promotes Cubans' efforts against the country's long-standing communist regime.

The former Cuban leader, now in his mid-90s, is charged with one count of conspiracy to commit first-degree murder and also faces a parallel, federal indictment by the Department of Justice, announced May 20.

"Raúl Castro ordered the murder of four Floridians in cold blood, and Florida will never stop pursuing accountability for that communist conspiracy," Uthmeier said in a news release. "The Castro regime's spies operated in our communities, fed intelligence to Havana, and helped put civilian pilots in the crosshairs of Cuban MiGs."

The four victims in the planes shot down on Feb. 24, 1996, were Carlos Costa, Pablo Morales, Mario de la Peña, and Armando Alejandre Jr.

According to the affidavit, Castro, who was the minister of Cuba's Revolutionary Armed Forces and first vice president at the time of the incident, was the final decider in authorizing the attack, giving senior military officials an order to "shoot them down at sea when they show up, and those who have the authority are not to consult anyone."

Cuban spies operating in South Florida's Miami-Dade and Monroe Counties infiltrated the Brothers to the Rescue organization and reported their flight plans back to Cuban leaders, the news release said.

On the day of the attack, three unarmed Brothers to the Rescue aircraft departed the Opa-Locka Airport in Miami-Dade County. Once they crossed the 24th latitude line, while still outside the island-nation's territory, Cuban MiGs destroyed two of the civilian Cessnas with missiles, killing the four onboard.

"For thirty years, their families and our Cuban American community have carried this profound loss and refused to let the pursuit of justice fade," Miami-Dade Sheriff Rosie Cordero-Stutz said in the news release. "Today's action sends a clear message: the passage of time does not diminish the value of these lives or our responsibility to pursue accountability."

The news release added that the aircraft were traveling away from Cuba and received no warning before the attack.

Elements of the alleged criminal conspiracy, like the gathering of intel by stateside Cuban spies, occurred in Miami-Dade and Monroe Counties. Chief Judge Ariana Fajardo Orshan of the 11th Judicial Circuit, which encompasses Miami-Dade, signed the arrest warrant.

Florida's Office of Statewide Prosecution has assumed jurisdiction of the ongoing investigation, Uthmeier said, and additional charges against Castro are possible.

"Under President [Donald] Trump's administration, we're committed to pursuing every lawful, prosecutable avenue to bring accountability, including parallel federal and state prosecutions," U.S. Attorney Jason Quiñones said in the news release.

Florida's arrest warrant against Castro joins the United States' increasing pressure campaign against Cuba's brutal communist rule, as Trump administration officials have long stated their intentions of wanting regime change on the island nation.

On Aug. 6, the State Department announced sanctions against Cuba's military.

More recently, Trump took the stage at the United Nations on Sept. 22 and called Cuba a failed state, adding that "freedom will be coming" to the island. The Cuban delegation walked out.

A week after that speech, Trump told reporters at the White House that he believed the United States and Cuba could reach an agreement, and American military action would not be necessary.

Prior to that comment, the president hinted in June that a potential Cuba operation could mirror the Caracas, Venezuela, raid on Jan. 3 to apprehend then-Venezuelan leader Nicolás Maduro and his wife Cilia Flores, both of whom are in custody in New York and pleading not guilty to a number of charges.

Cuban Americans told The Epoch Times they were hopeful for U.S. military action against their home country following the overnight operation in Caracas.

They also reacted with glee over the U.S. indictment against Castro in May.

Alina Fernández Revuelta, the daughter of Fidel Castro, welcomed the charges against her uncle.

"The charges increase pressure on a regime untouchable for decades," she told The Epoch Times in a text message. "Coming from a family directly connected to that history, you understand the weight of this moment in a different way."

Tyler Durden Tue, 10/20/2026 - 12:15

Loop Downgrades Apple As iPhone Rebound Shipment Hopes Slide

Apple shares are down about 1% in premarket trading in New York on renewed concerns about iPhone demand.

Loop Capital technology analyst Ananda Baruah downgraded Apple from "Buy" to "Hold," citing slumping expectations that the company will recover lost iPhone shipments next year and warning that skyrocketing memory chip costs could further squeeze profit margins.

Baruah lowered his 12-month price target to $330 from $370, nearly in line with Bloomberg-tracked analyst forecasts of around $334. The new target implies roughly 4% downside from the $343 share price cited in the note.

Baruah explained the reason for the rating downgrade:

We're downgrading AAPL to Hold from Buy and lowering our PT to $330 from $370 on new iPhone data from Loop Capital Supply Chain Analyst John Donovan (Latest AAPL ASP Tracker & Build Analysis – Reported Cuts Not True – Yet?) as our "normalized" EPS is reduced to $11.00 from $12.00 (and our new PT using an AAPL median P/E of 30x is $330.) 

The gist is that when AAPL previously reduced its Sep Q & Dec Q iPhone unit ships by 10% we believed they would be in a position to make up many (if not most) of these units through CY2027 as the reductions were supply related (memory & processors) & not demand related. 

This no longer appears to be the case. Further, while not the core aspect of our call today we acknowledge then potential for GM risk as memory costs continue to increase.

The revised forecasts also reflect much lower expectations for iPhone selling prices. For next year, the analyst slashed his average selling price estimate to $1,096 from $1,235 and reduced projected iPhone revenue to about $285 billion from $315 billion.

He expects total 2027 revenue to reach $539 billion, down from $569 billion, and earnings of $9.76 a share, compared with his previous $10.11 estimate.

For the December quarter, Baruah forecasts 79 million iPhone shipments, below the consensus estimate of 85 million. He forecasts iPhone revenue of about $88.7 billion for the quarter, below Wall Street expectations of roughly $93 billion.

Baruah's note, published on Monday, builds on soft iPhone demand cited by analysts at Jefferies and other desks. There was good news last week on Duo demand, as the flurry of preorders outstripped launch inventory, pushing some orders out until January 25. But premium handsets priced at $1,000-plus and $2,000-plus are still too expensive for mass adoption. Apple's Tim Cook learned that the hard way with the $3,000-plus, goofy-looking Vision Pro. 

Tyler Durden Tue, 10/20/2026 - 12:00

Mutatis Mutandis Not Ceteris Paribus

By Michael Every of Rabobank

2026 has seen economists and strategists forced to accept that geopolitics, rather than being the odd ‘exogenous shock’, is a structural backdrop disrupting models and markets. If an economic or market call depends on a geopolitical one, it logically requires an entirely different skillset. Of course, people adapt. Six years ago, economists and strategists busily tracked Covid infections while knowing nothing about virology or epidemiology until, fortunately(!), the virus naturally mutated into something less, not more, dangerous. Today, they Hormuz track tanker passages and/or Ukrainian strikes on Russian oil refineries. However, neither says what the geopolitical backdrop will mutate into.

The Financial Times notes, ‘Iranian hardliners say the time for nuclear weapons has come’, and the US and Israel are reportedly weighing “inevitable” strikes. Secretary of War Hegseth just made an impromptu visit to Israel as PM Netanyahu, a week before elections, reiterated he’s “ready to strike,” and Syria fears an imminent Israeli-backed Druze offensive. As China’s premier slammed “blatant” US aggression against Iran and Russia again offered to process Iranian uranium, Foreign Minister Lavrov backed Iran, and Tehran said “friendly” nations might be allowed safe passage through Hormuz while adding 122 vessels to its 'non-conformity' list. Pakistan’s army chief visits Tehran today, Egypt’s parliament delayed a vote on military support for the Saudis by a week, Qatar announced an unspecified new defence partnership, and Macron is on a 3-day visit to the Gulf, starting in Kuwait (rumoured to face a possible Iranian ground incursion) before heading to the UAE, Bahrain, and Qatar: as a French diplomat says France “has to assist Gulf states”, is it Qatar’s new defence partner? Elsewhere, Turkey-Azerbaijan tensions are rising, Ethiopia threatened Eritrea, Trump says he recognises the breakaway republic of Somaliland as “a totally different country”, and 160 people are reported dead in escalating drone attacks across Sudan. So, what’s the output from modelling that all – war or peace?

Trump has partially reinstated Starlink access for Ukraine yet slammed Zelenskyy, saying “somebody else” should negotiate – and he’s ready to meet Xi and Putin next month to thrash out a deal without Kyiv or Brussels. Rumors are this could involve Europe buying Russian gas again, with the US holding shares in a new NordStream pipeline. That isn’t “strategic autonomy.” Neither is the US warning Europe if it tries to set up a rival to Starlink by freezing the US out there will be “devastating” retaliation. NATO is meanwhile making new plans for how to fight Russia, Finland ordered 1 million landmines – but the UK cut £2bn from army front line spending. So, what’s the output from modelling that all – war or peace?

Trump signaled uncertainty about meeting North. Korea’s Kim next month – perhaps because of the internet rumour that he’s dead, which would open tail risks of civil war in a hermit kingdom with nuclear weapons, if so. As Taiwan and the Philippines now build maritime cooperation in the face of Chinese pressure, the Chinese press talks about a new fleet of PLA-N drone carrier ships.

The geoeconomic knock-on effects of this backdrop are clear: Saudi Arabia has postponed its 'Davos in the desert': what other spending, and dollar recycling will it and other GCC countries have to postpone if this chaos continues? Energy prices remain high, if volatile on ‘peace’ hopes, as oil tanker rates push Asian and European refiners into the red. By contrast, Venezuela is seeing oilfield hiring pick up as US FDI into it builds.

In trade, the US sanctioned five Chinese entities over AI trade secret theft and ordered DeepSeek removed from federal systems as a national security risk. China has banned the export of some drones (used by rivals’ militaries, some note) on top of other recent tech export bans, which now includes tunnel-boring machines used in mining, e.g., for rare earths, and construction, targeting India in particular, who is using them in metros and national-security tunnels in the Himalayas next to China. Elsewhere, the US pitched itself as a trade partner to Central Asia to woo them from China and Russia, and New Zealand is talking to Brazil and Canada as its FTA with India begins. The market implications in these shifting trade flows can be significant: expect prices to soar for tunnel-boring projects, for example – and note the CME plans tungsten futures as the global demand for weapons rises.

Meanwhile, changing politics can also change markets. Yesterday saw an ugly bond reaction to the ugly protests and looting in France (and Belgium and Italy, following earlier peaceful protests in Spain and Portugal) with 10-year French yields +13bps, Italian +8bps, and German +3bps. If this is an ‘exogenous shock’ then economists’ and strategists’ structural metrics still apply, but other skillsets are again needed to make that call - and some political scientists suggest French politics has mutated into something more dangerous.

While France will see localized curfews, more protests are planned: and organised groups domestic and foreign, and a major French political party, are fanning the flames. Were the RN’s Le Pen to win the presidency in six months, which was the original market concern, there is now fear that the far left may aim for insurrectionary politics; and the whispered risk is Macronistes in key institutions may even see such chaos as a route back to power.

Even if we only focus on fiscal metrics, French 10-year borrowing costs are now half a rate hike higher than Friday. It’s also clear there’s no public appetite for austerity but a demand for more public spending on education and public housing, or the police and justice system, or both, when France might be about to get involved in a Middle East war and have to prop up a Ukraine whom the US has walked away from.

Of course, France can’t be allowed to fail given its importance within the EU. Then again, can the RN be allowed to succeed? The hypothetical whispered realpolitik binary is between the ECB bailing France out if needed, at a cost to the Euro and the fury of Germany, and not doing so at a cost to EU economic, political, and market stability. But could the ECB bail everybody else out from French contagion and leave Paris to sort out its mess? Maybe… except France has the aircraft carrier and nuclear weapons the EU will rely on even more if the US is doing even less: so, even here, a geopolitical call likely needs to be made first. Whatever happens now, more volatility seems far more likely than a ‘reversion to mean’.  

Meanwhile, this isn’t just about France: Albania is seeing violent street protests; India has extended the detention of its angry youthful anti-government ‘Cockroach’ party leaders; the Wall Street Journal says the US ‘Congress Is Broken’ and early voting data show 19-29 voting has collapsed so far; UK politics is fragmenting and has seen one political murder this year; an Australian politician was just struck by a left-wing activist’s car, losing a leg. That, plus votes are being counted in Alberta’s referendum on a referendum on independence, which while unlikely to succeed will very likely keep the issue alive just as it is in Quebec. Again, whatever happens now, more volatility seems far more likely than a ‘reversion to mean’. 

So, mutatis mutandis --a rule can be applied to a new situation provided the necessary adjustments are made while keeping the fundamental point the same-- arguably applies over the more common “because markets” ceteris paribus, or all things remain equal.

After all, one thing the looters in France were saying loudly was that all things are not equal in their eyes - and global power isn’t distributed that way either.

Tyler Durden Tue, 10/20/2026 - 11:45

Chinese Tech Giants Order $35 Billion Of Nvidia's Latest 'Compliant' GPUs - Except There's A Huge Problem

ByteDance, Alibaba, and Tencent have ordered more than 3 million of Nvidia's new RTX PRO 5500 workstation GPUs, representing a collective sticker price exceeding $35 billion, as Chinese tech giants scramble for export-compliant hardware amid ongoing U.S. trade restrictions, Reuters reported Tuesday, citing sources familiar with the matter.

Nvidia has warned customers and partners that it cannot guarantee fulfillment because Chinese demand vastly outstrips planned production. One source indicated that buyers were informed they might receive only 5% to 10% of their requested quantities, while another noted the company expects to produce no more than 3 million RTX PRO 5500 cards globally throughout 2027. Total orders from Chinese customers alone have already surpassed 6 million units, according to the sources. The three tech giants are seeking cards priced at approximately $11,400 each, with Nvidia advising customers to expect early samples in December and commercial deliveries to begin in the first quarter of 2027.

The RTX PRO 5500 is a Blackwell-architecture workstation GPU engineered for high-performance professional systems rather than massive data-center clusters. Built on the same GB202 die as the GeForce RTX 5090, it features roughly 21,760 CUDA cores, 84 GB of GDDR7 ECC memory, and about 1,398 GB/s of bandwidth. Chinese firms primarily intend to deploy the cards for AI inference - running trained models to process chatbot responses and other user-facing tasks - rather than the heavier training workloads restricted to Nvidia's premier data-center accelerators.

Under current U.S. export controls, Nvidia's most advanced Blackwell data-center processors, such as the B300, are barred from sale to Chinese buyers, while shipments of the older Hopper-based H200 face case-by-case licensing reviews. Consequently, the RTX PRO 5500 stands among the most powerful Nvidia chips legally available to the Chinese market under existing regulations.

The massive order volume highlights the enduring demand for Nvidia hardware among Chinese technology enterprises despite years of tightening U.S. export policies. As Reuters noted last month, China's Ministry of Industry and Information Technology previously directed firms like ByteDance and Alibaba to report their procurement plans for the RTX PRO 5500, signaling intended government approval. That followed reports that ByteDance alone was weighing an order of roughly one million units.

China is weighing allowing domestic companies to buy $NVDA new RTX Pro 5500 with ByteDance reportedly considering an order of ~1 million chips as local AI demand outruns supply.

Nvidia says Chinese chipmakers have seen "unprecedented growth since 2022" so even a partial reopening could give it a path back into a market where its AI share fell from like 95% to nearly zero.

— Shay Boloor (@StockSavvyShay) September 27, 2026

This dynamic reflects a familiar pattern. Successive export controls have severely eroded Nvidia's historical dominance in China's AI data-center chip market. Earlier compliance-focused products, including the H20 and the RTX 6000D, encountered regulatory friction, production bottlenecks, or eventual discontinuation; secondary-market prices for the pulled RTX 6000D have roughly doubled in China, according to Reuters sources. Nvidia CEO Jensen Huang has previously noted that U.S. trade restrictions reduced the company's share of China's AI data-center accelerator market to a fraction of its former scale.

Concurrently, export limitations have created an opening for domestic alternatives. Huawei and other local semiconductor firms have steadily gained ground with native AI accelerators, even as Chinese tech giants continue to chase any accessible Nvidia silicon. The $35 billion figure represents total requested sticker-price value rather than confirmed revenue; actual deliveries will represent only a fraction of those volumes due to strict manufacturing limits and Nvidia's ongoing reallocation of TSMC production capacity toward its next-generation Rubin platform for 2027.

Whether Beijing ultimately grants final approval for the full scale of imports, and how many units Nvidia can successfully deliver, remains uncertain. For now, the reported order surge demonstrates that Chinese hyperscalers remain deeply committed to Nvidia's software ecosystem for inference workloads - even when forced down to workstation-class hardware - highlighting the enduring tension between geopolitical export controls and global market demand.

    OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Tue, 10/20/2026 - 11:00