Existing Home Sales Hover Near Record Lows As Affordability Gap Widens

With mortgage rates soaring, expectations were for a fourth straight month of declines in existing home sales. Instead sales rose 1.5% MoM (-0.8% exp) thanks in part to a downward revision for August (from -2.0% to -3.2% MoM)...

At least some of last month’s modest improvement predated the more than half-point climb in mortgage rates since early September to 7.49%. September’s gain also belies the formidable challenges facing the nation’s housing market.

The total existing home sales SAAR remains below the 4.00mm Maginot Line...

Despite the increase, “August and September marked the two slowest months for home sales this year,” NAR Chief Economist Lawrence Yun said in a statement.

“Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home.”

Earlier in the year, the country had been making some progress in reducing the so-called “lock-in” effect - the disincentive to move that homeowners face because of their low existing borrowing costs.

However, the recent surge in rates has halted that progress.

It also adds a “$19,000 shock” for would-be buyers with a $2,000 monthly budget, Realtor.com Chief Economist Danielle Hale said earlier this month in a blog post.

“The reset in rates over the last five weeks has shaved a little more than 6% off of the purchasing power of buyers across every budget, which is almost twice the typical price-savings advantage of buying in this less competitive season,” Hale said.

Meantime, the supply of previously owned homes for sale climbed 4.6% from a year ago to 1.6 million, NAR data show. That represents 4.8 months of supply at the current sales pace, staying at the more than decade high it reached in August.

Previously owned home sales in both the South and the West rose 2.8% in September. Sales in the Midwest were flat and activity in the Northeast fell.

“The fourth-quarter outlook for closing activity will clearly be down, maybe even measurably down,” Yun said Tuesday on a call with reporters.

“We are seeing more delays in the contracts with these rising interest rates.”

Finally, with the spread between current mortgage rates and the effective average mortgage rates that American homeowners have back near record wides...

...we don't see any signs of trapped sellers meeting buyers' affordability levels any time soon!!

Tyler Durden Tue, 10/13/2026 - 10:08

Zelensky Indicates Intelligence From Partners Cut Off Amid Overnight Strikes

Ukraine's President Volodymyr Zelensky has not only alleged that Russia has hit six energy sites since President Trump announced Putin signed on to an energy ceasefire, but he's also lashing out at Western allies, saying that for the first time in a long time no intelligence was shared by 'partners' warning of the latest overnight attack.

Zelensky said Tuesday in a post on X that an overnight Russian assault on the capital was "particularly vile" but that no intelligence was shared ahead of time, as has been typical previously.

Q: Has the U.S. stopped sharing intel with Ukraine? White House: I will have to get back to you on that. https://t.co/auu6jtFp27

— Clash Report (@clashreport) October 13, 2026

"There was also a particularly vile ballistic strike on Kyiv—five missiles that hit civilian infrastructure. Regarding this strike, unfortunately, there was no warning from partners," he wrote. "Intelligence data on the launch of Russian ballistic missiles helps save people's lives, and this is one of the most critical issues."

"This is precisely what helps prevent people from being killed — when there is an early warning about ballistic missiles," he wrote, without specifically apportioning blame. But the veiled message blaming the White House comes through loud and clear.

Zelensky/X

Given the timing and context, the clear suggestion is that Washington cut Zelensky and his officials out of the usual intel-sharing, and this has also broadly impacted allied sharing.

President Trump has lately threatened to precisely cut off intelligence as Ukraine has not complied with the US request for its forces to stop hitting Russian refineries, amid a global diesel supply and price crisis.

Zelensky further on Tuesday claimed that Ukraine is for now adhering to a pledge to not strike Russian oil refineries. He says this pause has been on for two days since Trump proclaimed a deal, which however Zelensky said was "news" to hm.

Of the latest Russian attacks, "These are absolutely clear signals that they have no intention of refraining from strikes on Ukraine," Zelensky said.

The Ukrainian leader has further lambasted the Trump deal with Putin for the release of Russian diesel. "We need American pressure on Russia, not sanctions relief, not concessions," Zelensky said earlier.

Trump is meanwhile ultimately blaming Ukraine for rising energy prices, and not the Iran war and Hormuz crisis.

Here's what Ukrainian media says is happening behind the scenes in the meantime:

Two Ukrainian officials said their U.S. counterparts had made clear that Washington would hold Kyiv responsible if Russian energy infrastructure were struck during the recently announced ceasefire.

"They called all the top military officials with threats," one Ukrainian official told the Kyiv Independent. "They're telling everyone that they're going to turn off both the intelligence sharing and PURL."

Zelensky has yet to specifically say that Washington itself has halted intelligence, but if the situation lingers the blame-game is probably coming.

Zelenskyy says Ukraine received no advanced intelligence about the Russian ballistic missile attack against Kyiv last night. But he falls short of saying that this was linked to Trump's threat passed via Kushner and Witkoff in Miami on Friday and via calls to Ukrainian officials over the weekend to pull US intelligence. Kyiv receives intelligence from numerous partners including European services. "There was also a particularly vile ballistic missile strike on Kyiv – five missiles that hit civilian infrastructure," he says. "Unfortunately, we received no early warning from our partners about this strike."

— Christopher Miller (@ChristopherJM) October 13, 2026

The Prioritised Ukraine Requirements List (PURL) is the procurement mechanism and program European allies use to purchase weapons from the US for Ukraine. The US administration has outright said it is ready to halt the program if Zelensky doesn't comply, and Trump has gone so far as to say that maybe Ukrainians should find a new leader.

Tyler Durden Tue, 10/13/2026 - 09:20

Terror Plot At UK Airbase 'Almost Certainly' Directed By Iran, British PM Says

Authored by Jill McLaughlin via The Epoch Times,

Last month's suspected terror plot at RAF Fairford, an airbase shared with the United States in England, was likely coordinated and directed by Iran's ruling regime, British Prime Minister Andy Burnham said on Oct. 12.

"I can confirm our assessment that it is highly likely to have been coordinated in Iran - almost certainly directed by Iran's Islamic Revolutionary Guard [IRGC]," Burnham told lawmakers.

Burnham said investigators were in close contact with the United States about protective security at shared military bases in the UK and were continuing to investigate the case.

Seven suspects, all in their 20s, were arrested on terror and explosives charges for their alleged involvement in the RAF Fairford incident on Sept. 27.

Police responded to local tips about suspicious activity near the facility in Gloucestershire, England. Officers stopped three vans heading toward the airbase used by American forces to launch strikes against Iran.

Police and military explosive disposal teams searched the vehicles and found gasoline inside but no explosives, investigators said.

The Pentagon has since removed its heavy bombers from the base. The men have been released from custody and have not been formally charged.

In another incident, two Latvian men were arrested on espionage charges on Oct. 7 after they allegedly broke into the RAF Molesworth airbase, used by U.S. and NATO intelligence teams, near London.

Burnham didn't say whether the two airbase incidents were linked, but he vowed to investigate any future threats from Iran.

"We will not tolerate these threats on our soil," Burnham said. "We will crack down on Iran's use of criminal networks using our full range of powers to target them and their funding streams. And we will bring further sanctions to restrict the capacity of Iran and the IRGC to do us harm."

The United States and the UK joined 27 other countries to "condemn in the strongest terms Iran's use of violent attacks, including the acts of lethal plotting, arson, sabotage, cyber-attacks, and other hybrid activities" against the countries and their partners.

"We recognize the United Kingdom's attribution of Iran's involvement in the incident at RAF Fairford on 27 September," the countries said in a joint statement after Burnham's announcement. "The UK has also concluded this event demonstrates the IRGC's continued willingness to project hostile activity beyond its borders through covert networks and proxy actors."

The nations vowed to "investigate, disrupt, and prosecute" all attempts to "silence, intimidate, harass, harm, or coerce people through proxies or other means."

"Iran should be in no doubt that we are united and remain committed to safeguarding our sovereignty and strengthening our international coordination, bolstering our national resilience, protecting our communities, and ensuring that those responsible are held to account," the countries stated.

The alleged attempted terror attack comes after recent attacks across Europe targeting Jewish communities, Iranian journalists, and U.S. interests. The pro-Iranian Islamist group Harakat Ashab al-Yamin al-Islamiya (HAYI) claimed to have instigated the attacks, according to state officials.

The incidents included a March 9 attack using a homemade explosive at a synagogue in Liège, Belgium; attacks against Jewish institutions in the Netherlands targeting a synagogue on March 13, 14, and 15; and a foiled bomb plot against a Bank of America branch in Paris on March 28.

The United States and other countries called for the HAYI attacks to end earlier this month, saying the relationship between Iranian security services and international and local criminal groups was long-standing.

"Attempts to kill, kidnap, harass, intimidate, or otherwise attack people on our soil, [undermine] national sovereignty and international norms. These actions must stop immediately," the countries stated on Oct. 6.

Tyler Durden Tue, 10/13/2026 - 09:05

The post Crazy Lies from the Anti-Tax Gang appeared first on CEPR.

Nasdaq Futures Slide As AI "Casino" Hangover Crushes Kospi; S&P Flat After JPM FICC Miss

US futures are mixed with the Nasdaq lagging as the AI rout that started on Wall Street on Monday ricocheted through Asia, where the Kospi crashed as much as 7% after Broadcom's Hock Tan likened AI investing to a casino and China's CXMT touted a denser memory chip design, while Q3 bank earnings kicked off with a FICC trading miss at JPMorgan; as a result, a flight to safety sent 10Y yields 5bps lower to 5.19% as cash Treasuries reopened after the holiday, while Brent slid back toward $105. As of 8:00am ET, S&P futures are down 0.1% around 7,850 while Nasdaq futures slide 0.7%, Dow futures are up 0.7% and Russell 2000 futures rise 0.3%. That follows a session in which the S&P dipped 0.1% and the Nasdaq 100 fell 0.7% on what was the lowest volume session in 23 years, with the SOX down 2.7% for its fourth straight decline even as two-thirds of S&P members rose. In premarket trading, memory names are getting hammered again (Western Digital -4.5%, Seagate -4.1%, Sandisk -3.7%, Micron -2.8%) and Nvidia is the worst of the Mag 7, down 0.9%, while JPMorgan is flat after FICC revenue of $5.37BN missed the $6BN estimate but the company guided NII higher; UnitedHealth rises 2.8% after raising its guidance. The day's driver is AI angst (again): Hock Tan's warning that financing the buildout, not chip supply, is the problem (as we discussed yesterday) was the spark, while CXMT's progress on new DRAM architecture did the rest in Seoul, where Samsung and SK Hynix lost around 8% and 10%. Treasuries rallied, with yields down 2-5bps led by the 10Y, after Fed Governor Waller said the surge in long-term yields is doing some of the work of tighter policy, while bunds and gilts gained as lower energy prices eased inflation worries. The BBG dollar index is down 0.2%, snapping a four-session winning streak, and the yen leads G10 after a report that the BOJ is leaning against a back-to-back hike in October. In commodities, WTI is down about 1.5% near $92.3 and Brent is 1.7% lower to $104.6; gold rises 0.3% to around $4,190, silver is up 0.4% near $60.5 and copper is flat. Bitcoin regains $83,000. US economic data slate includes September NFIB small business optimism (already out: 97.9 vs est. 98.2), ADP weekly employment change (8:15am), September existing home sales (10am) and the September federal budget balance (2pm). Fed speaker slate includes Goolsbee (7am and 10am), Barkin (1pm) and Collins (4pm). The Treasury sells $95BN of 13-week and $82BN of 26-week bills at 11:30am and $95BN of 6-week bills at 1pm.

In premarket trading, Magnificent Seven stocks are mixed: Apple (AAPL) +0.7%, Microsoft (MSFT) +0.4%, Alphabet (GOOGL) +0.2%, Amazon (AMZN) -0.4%, Meta Platforms (META) -1.2%, Tesla (TSLA) -0.8%, Nvidia (NVDA) -0.7%

• Chemours Co. (CC) slips 1.6% after RBC Capital Markets cut its recommendation on the chemicals company to sector perform on lower demand.
• Domino’s Pizza (DPZ) drops 1.5% after the restaurant chain reported total domestic stores comp sales growth for the third quarter that missed the average analyst estimate.
• Enerflex’s US-listed shares (EFXT) rises 7% after the natural gas and petroleum producer said it received a contract award to design and assemble over one gigawatt of low emission behind-the-meter natural gas-fired power generation units for a large-scale North American data center.
• Johnson & Johnson (JNJ) slips 2% after the maker of pharmaceuticals and medical devices posted mixed sales for the third quarter. Revenue from the firm’s MedTech unit for the quarter fell short of the average analyst estimate.
• JPMorgan Chase (JPM) gains 1%, erasing an earlier loss, after the bank boosted its net interest income forecast for the full year. It also reported FICC sales & trading revenue that missed expectations.
• Syndax Pharmaceuticals (SNDX) plunges 10% after the biotech said a phase 2 trial of axatilimab failed to meet its primary endpoint of annualized rate of decline in forced vital capacity in a rare lung disease.
• UnitedHealth (UNH) rises 2% after the health insurer boosted its adjusted profit for the full year, following third-quarter results that were ahead of the average analyst estimate. Analysts view results as better than expected and are on watch for commentary on 2027 growth outlook during the earnings call.
• VF Corp. (VFC) is up 3% after Piper Sandler and Truist Securities upgrade the retailer to buy-equivalent ratings, noting the company’s Vans brand is at an inflection point.
• Viking Holdings (VIK) gains 3% as Barclays upgrades to overweight, noting that European river levels are back in recovery mode.

In other corporate news, JPMorgan kicked off bank earnings season with a miss where it hurts most in a volatile quarter: third-quarter FICC sales & trading revenue came in at $5.37 billion versus the $6 billion estimate, though the bank now sees full-year net interest income of about $106.2 billion, above the $105.28 billion estimate. JPMorgan and Goldman Sachs have taken a rare move to limit exposure on a $5 billion loan sale for AI startup Volta Infrastructure as investors demand higher yields for risky debt tied to the AI boom (good thing nobody is worried about AI financing). UnitedHealth raised its full-year adjusted EPS forecast to at least $20.50. Meta Platforms released its long-awaited Muse Wonder AI model, which its leadership says is on a par with OpenAI’s ChatGPT and Anthropic’s Claude on some functions. Microsoft is gearing up to install the latest version of its own chips in data centers, and Applied Materials expects to double revenue over the next few years without a commensurate rise in hiring. SentinelOne plans to offer $1.25 billion in convertible senior notes due 2031. Jio Platforms is said to have drawn more than $20 billion in bids for its IPO. In Europe, LVMH's fashion and leather goods sales fell 5% organically, Crédit Agricole agreed to buy IKB Deutsche Industriebank from Lone Star, Nokia agreed to sell its Enterprise Campus Edge business to Aurelius, Monte Paschi rejected Intesa Sanpaolo's improved takeover offer as not financially satisfactory, and UBS transferred £1.7 billion of UK pension assets to Legal & General.

The AI trade is unwinding again from the Nasdaq 100 to Seoul: a global slide in semiconductor stocks deepened overnight, sending the Kospi down more than 7% at one point as concerns about AI overheating and Chinese competition intensified. The trigger was Broadcom chief Hock Tan likening AI investing to a casino and warning that financing the buildout, not chip supply, is the problem, just days after Nvidia-backed Firmus’s offering collapsed; a report of progress at China’s CXMT on a new memory architecture did the rest. The AI trade is splitting into model makers and the capex chain: Meta rose after releasing Muse Wonder even as the Philly semi index fell for a fourth straight session. US futures are attempting to shrug it off — S&P contracts recovered to roughly flat by 5:45am — and the next inflection point comes via the busy slate of pre-market bank earnings, with the KBW bank index down around 12% from its August peak (we previewed the big bank prints here).

“Memory names are under pressure from a rise in Chinese competition and an increasing number of voices in the industry warning of a bubble,” said Bank J Safra Sarasin’s von Rotberg. “The volatility in the tech trade makes a confirmation of hyperscaler capex guidance ever more important.”

Still, markets keep doing what they're not supposed to: the S&P sits within a whisker of its record high on the lowest volume in 23 years, while underneath the surface Goldman finds an extraordinary flight to quality not seen since Covid, and the median S&P stock trades 15% below its 52-week high. And while the AI financing angst grows (Oracle is now trucking natural gas to its data centers), JPMorgan and Goldman are capping their exposure on a $5 billion AI infrastructure loan.

Goldman's Bobby Molavi writes that the past two to three months have felt like “everyone has been sprinting to standstill.” Deals are being pulled, and with more than $500 billion of debt issued this year for the infrastructure buildout, “we are seeing a lot of future AI revenue being spent up front,” per Bloomberg.

The rotation remains the story for Goldman's Rich Privorotsky, who argues “the market got itself incredibly long one corner and effectively short everything else,” listing four AI stories that hit at once: CXMT, Microsoft's Maia 300 moving to TSMC 2nm, Hock Tan's comments (“taken wildly out of context”) and Meta's Muse Wonder. In Japan, he notes, five stocks effectively account for the entire Nikkei decline while the TOPIX is up. On energy: “So much for the Russia/Ukraine energy ceasefire… couldn’t survive a news cycle,” and “If energy takes out the highs with velocity, markets will struggle in a much more correlated fashion.” His silver lining: “Financials could reinforce the rotation, with the bar relatively low given de-rating ahead of numbers.”

Over on the GS TMT desk, Sean Johnstone sees “a lot of nervousness ahead of an Anthropic S1,” notes Meta's Muse Wonder reportedly ranks behind only Claude Opus 5.5 on Artificial Analysis’ Intelligence Index, and concludes that “Capital (and the cost of capital) is becoming the bigger constraint.” Tony Pasquariello, meanwhile, points out that net exposure across GS's global PB book sits in just the 10th percentile of the past year, with the US market net sold for three straight weeks: “I’m not sure that I can remember a time when a market that was on the highs was attracting so little chase.” Yesterday's floor was a 2 on a 1-10 activity scale, per the GS US desk, which thinks S&P upside is cheap into month-end, with the next one-week implied move at ~96bps, one of the lowest in about six years.

JPM's Market Intel desk stays Tactically Bullish heading into earnings, noting breadth was supportive yesterday with over 60% of S&P stocks higher and the rotation/broadening continuing premarket. Tech specialist Joshua Meyers says the most proximate trigger was Hock Tan's DBS conference panel, where he warned financing could become a bigger bottleneck than component shortages and compared "many investors" to casino gamblers, while a weekend sell-side note re-ignited power concerns (powered-shell shortages of as much as 19GW next year), all of which hit on a low-liquidity holiday as investors sit on their hands ahead of an expected private frontier lab investor meeting on Wednesday. JPM's Manish flags meaningful risk of a Quality reversal around the CPI release and the Fed meeting if the Fed turns dovish, noting semiconductor sentiment is above the 99th percentile. On earnings, FactSet consensus has Q3 at 29.6% EPS growth on 12.4% revenue growth, with all 11 sectors expected to post positive revenue and earnings growth for only the second time in history.

Big US bank stocks, meanwhile, are in correction territory as the latest earnings from Wall Street roll in. The KBW Bank Index has dropped around 12% from an August peak, exceeding the 10% threshold for a technical correction.

“Loan book quality, capital markets activity and trading will be very much in focus, as all three may have weakened,” said Wolf von Rotberg at Bank J Safra Sarasin. “They need to show that lending growth remains strong and net interest income continues to rise.”

On the geopolitical front, President Trump’s Russian diesel deal has opened a rift with Republican senators, European leaders and Ukraine, while running into a 2022 law barring most Russian energy purchases. Even if it goes ahead, it will deliver a first release of 2.25 million barrels in October, less than a single day of US consumption. Brent is still more than 50% higher than when the Iran war began, with Houthi strikes on Saudi Arabia’s main airport keeping the supply risk alive; Goldman estimates the Brent risk premium at $24/bbl.

In Europe, the Franco-German 10Y spread closed Monday at a post-2012 high of 142bps, per DB, albeit with less fanfare than when those levels were first breached ten days ago; Blackstone's Jon Gray warned that fiscal strains in France, the UK and elsewhere in Europe pose a more pressing risk than in the US, and the IMF told UK Chancellor Healey to use cost-of-living support “sparingly” ahead of his Oct. 28 budget.

Turning to European stocks, the Stoxx 600 rises 0.6% to 639.73 with 471 members up, as positive earnings news counters renewed concerns about the AI trade, which prompted investors to rotate out of semiconductor and AI-linked names globally. Chemicals and healthcare are the best performers, with real estate helped by the pullback in Brent sending yields lower across European curves; tech, consumer products and basic resources lag. JPM's desk notes defensives and rate-sensitive baskets are outperforming while semis and luxury lag, with LVMH a clear drag after its worse-than-expected numbers on weak Chinese demand — the stock is already down more than 40% this year. Here are the biggest European movers:

• BP shares gain as much as 1.6% after the British oil major’s 3Q trading statement guided for a fall in net debt to $13.5b-$14.5b, compared to $22.3b in the previous quarter.
• Whitbread shares gain as much as 3.6% after the hotel operator reported strong first-half results, including a beat on profit before tax.
• Givaudan shares rise as much as 8.1% after the maker of fragrances and flavors reported like-for-like growth that was well ahead of expectations in the third quarter.
• Greencore shares rise as much as 6.8% after the food manufacturer said annual adjusted operating profit will come in higher than previously expected, following a strong finish to the year.
• Ypsomed shares rise as much as 3.1% after Berenberg initiates coverage of the stock with a buy rating, citing the growing market for self-injection systems for drugs, resilient margins and a supportive valuation.
• Oxford Instruments gains as much as 4.9% as JPMorgan says the scientific instruments specialist’s first-half trading update was strong “on all fronts.”
• Sulzer rises as much as 5.4% after the Swiss pump maker positively surprises on orders in the third quarter.
• Bellway shares rise as much as 3.9% after analysts at Jefferies said the downbeat outlook for FY27 does not look as bad as feared, as the company warned of lower completions and tighter margins.
• LVMH shares fall as much as 2.3% after the French luxury-goods giant reported third-quarter organic revenue that missed estimates, with its biggest division — fashion and leather-goods — posting a slump in sales.
• European semiconductor stocks slide, tracking a selloff across Asia and US peers, after Broadcom CEO Hock Tan warned of overheating market sentiment.
• Schaeffler shares fall as much as 5.4% after the German car parts maker posted disappointing preliminary third-quarter results.
• Befesa shares slip as much as 4.9% after Jefferies reduced its full-year earnings estimates for the waste recycling services firm and trimmed its price target in anticipation of softer third-quarter results.

Asian stocks declined as the global AI trade came under renewed pressure, with the MSCI Asia Pacific Index falling as much as 2.1% to the lowest level since Aug. 4. The Kospi slumped 5.46% after breaking its 200-day moving average — at one point down 7.4% before finding support near 6,000 — and Seoul briefly halted program trading for the first time since August; foreigners sold a net $3.4 billion, $3.2 billion of it in tech, per Goldman, which also notes Samsung's buyback has ended and SK Hynix's is nearly complete. The Nikkei 225 fell 1.82% on its return from a long weekend, but the TOPIX rose 0.14%: TEL (-7.2%), SoftBank (-8.5%), Advantest (-2.9%), Kioxia (-13.3%) and Ibiden (-7.8%) accounted for all of the Nikkei's losses, while Japanese banks rose 2.1% ahead of US bank earnings. Taiwan's Taiex fell 1.95% and the Taiwan dollar posted its biggest drop since June 2025. The ASX 200 outperformed as energy, financials and defensives offset tech and miners. The Hang Seng (+0.31%) and CSI 300 (-0.29%) reversed early weakness, though Chinese automakers fell across the board after the Ministry of Finance cut the VAT export rebate on new-energy vehicles to 9% from 13%. India's Nifty rose 0.76% on IT services. "Rotation into financials, defensives and software cushioned losses elsewhere," Goldman's Asia desk wrote.

In FX, the Bloomberg Dollar Spot Index is down 0.2% after rising 0.6% over the past four sessions, with the DXY in a 102.30-102.57 range as yields and energy ease. The yen outperforms, with USD/JPY down 0.3% around 158.1, after Bloomberg reported BOJ officials are leaning against a rare back-to-back hike this month while still eyeing December; EUR/USD rises 0.3% to 1.1189 and cable edges up to 1.3230. USD/KRW rose 0.5% to 1,341.60 as the Kospi tumbled, while the Taiwan dollar fell as much as 1% to 32.215.

In rates, Treasuries rallied as cash trading reopened after Monday's holiday, with yields down 2-5bps led by the 10Y, which slipped 5bps to 5.19%; USTs are firmer by around 10 ticks, at the upper end of a 104-18 to 104-30+ range. Fed Governor Waller said higher long-term yields could help the Fed cool demand in rate-sensitive sectors such as housing and autos, doing some of the work of tighter policy (finally, a use for the bond rout). Bunds rose as much as 49 ticks and gilts gained more than 50 ticks as energy prices eased, with the UK 10Y opening 7bps lower at 5.37%; Germany's 5-year auction drew a weak 1.1x bid-to-cover. Big investors are snapping up Treasuries to lock in the highest yields in decades, with almost $14 billion injected into US government bond funds since the start of October, per the FT. Positioning may add fuel: CFTC data show speculators have rebuilt sizeable net shorts in 10-year futures while sharply cutting 2-year shorts, leaving the 2s10s curve exposed to an initial bull flattening if Wednesday's CPI is soft. Goldman's Kaplan points out that “bond funds are underweight duration at an extreme that has historically skewed to lower yields over the next 1–2 quarters.” Goldman expects a 0.24% increase in September core CPI (vs. +0.2% consensus) and a 0.59% rise in headline CPI (vs. +0.6% consensus), reflecting higher energy prices; the GS US desk warns “A 10bp downside surprise on core would be meaningful for rates.”

As money markets price in at least one more US rate hike by December, Federal Reserve Governor Christopher Waller said the surge in long-term Treasury yields is helping curb demand in rate-sensitive sectors.

“When yields go up, is that going to impact interest-sensitive sectors like housing and autos and other things? Yeah, of course it is,” Waller said at Bloomberg’s New Economy Forum in New Delhi on Tuesday. While that isn’t the Fed’s intention, higher yields are “doing a little bit of the work,” he said.

In commodities, WTI Nov and Brent Dec futures are softer, extending their pullback from yesterday's gains as Trump reiterated the Iran war will end "very soon": WTI fell to a $91.81 low from a $93.49 peak and Brent to $104.71 from $106.14, though Houthi attacks on Saudi Arabia and US Gulf production shut-ins remain supportive. Goldman estimates the Brent risk premium at $24/bbl and notes its average global crude freight rate is now $30/bbl vs. $4 a year ago. Dutch TTF is firmer, climbing to €86.40/MWh on colder weather and Middle East supply concerns, after European gas hit a post-2022 high on Monday. Spot gold rose from a $4,151 low to $4,201 and silver trades in a $59.58-60.73 range. LME copper is little changed within a $14,549.68-14,667.00/t range.

US economic data slate includes September NFIB small business optimism (97.9 vs est. 98.2, prior 98.7), ADP weekly employment change (8:15am), September existing home sales (10am) and the September federal budget balance (2pm). Fed speaker slate includes Goolsbee (7am, 10am), Barkin (1pm) and Collins (4pm). Corporate events: SEMICON West runs through Thursday; Workday and BGC hold investor days.

Market Snapshot

Top Overnight News

• Iran is fortifying its defenses, rallying loyalists, and hinting that their forces could conduct land incursions into neighboring countries as it threatens a wider, harsher response against the U.S. and its Gulf allies as it prepares for potential American attacks after the midterms and seeks to deter them. WSJ
• Saudi Arabia intercepted ballistic missiles launched by Yemen’s Houthis, targeting Riyadh and Khamis Mushait. Donald Trump dismissed concerns that Russia and China might be helping Iran. Oil slipped after three days of gains. BBG
• A global slide in semiconductor stocks deepened, sending South Korea’s chip-heavy equity benchmark down more than 7% at one point, as concerns about AI overheating and Chinese competition intensified. Investor angst over the AI trade increased after Broadcom Inc.’s chief executive likened market sentiment to a casino and warned that financing the buildout will become a key problem. BBG
• JPMorgan and Goldman Sachs have taken a rare move to limit exposure on a $5 billion loan sale for AI startup Volta Infrastructure as investors demand higher yields for risky debt tied to the AI boom. BBG
• JPMorgan 3Q FICC sales & trading revenue $5.37B, est. $6B; sees FY net interest income about $106.2B, est. $105.28B. BBG
• Nvidia's share of China's market for data-center AI chips fell to 34% in the first half of 2026, as US export controls restricted supplies of its products and domestic rivals led by Huawei gained ground. RTRS
• Volumes in options tied to individual stocks have recently reached levels seen during the meme-stock mania of 2021, about $700 billion of notional volume a day. WSJ
• BoJ officials are leaning against a rare back-to-back interest rate increase this month while still eyeing the possibility of another move as soon as December, according to people familiar with the matter. BBG
• Federal Reserve Governor Christopher Waller said the surge in long-term US Treasury yields is helping to curb demand in interest-rate-sensitive sectors such as housing and automobiles, doing some of the work of tighter monetary policy. BBG
• Big investors are snapping up US Treasuries, seeking to lock in the highest yields in decades as they bet borrowing costs can only climb so much further before a months-long sell-off abates. Investors have injected almost $14bn into US government bond funds since the start of October, after net inflows in the third quarter reached a record $59.3bn. FT
• Russia will be able to return diesel exports to levels above those US President Donald Trump has outlined under a deal with Moscow which has been criticised by Ukraine and some US lawmakers, Deputy Prime Minister Alexander Novak said on Monday. RTRS
• Iran and the US remain divided over the sequencing of a diplomatic agreement: Al-Akhbar. Tehran is demanding an end to the war, removal of the naval blockade and oil sanctions, and release of frozen assets before reopening the Strait of Hormuz and discussing nuclear issues, while Washington is insisting on nuclear concessions first. Newsquawk
• IMF raised 2026 Global Real GDP growth forecast to 3.1% (prev. 3.0%), citing AI investment tempering energy price shock in key economies, while it maintains 2027 global growth view at 3.4%. Maintained US 2026 growth forecast at 2.3% and raises 2027 forecast to 2.3% (prev. 2.2%), lowered China 2026 GDP forecast to 4.5% (prev. 4.6%) and cut 2027 forecast to 4.0% (prev. 4.1%). Newsquawk
• Surging bond yields are the top risk to the financial system, the IMF says. BBG
• US Sept. NFIB small business optimism falls to 97.9, est. 98.2. BBG
• UK Chancellor Healey is reportedly rejecting calls to equalise capital gains tax and income tax rates: FT
• Black Sea strikes threaten Bulgarian refinery supply, the Bulgarian premier says; a merchant ship was sunk off Bulgaria’s Black Sea coast. BBG/Newsquawk
• JPM Market Intel stays Tactically Bullish into earnings but flags meaningful risk of a Quality factor reversal around CPI and the Oct. 28 Fed meeting. JPM

A more detailed look at global markets courtesy of Newsquawk

APAC stocks mostly declined amid a tech sell-off following the mixed handover from Wall Street, where the Nasdaq underperformed as chip and memory names were pressured by China competition concerns after CXMT announced technological progress on a denser memory chip design. ASX 200 outperformed its regional peers with price action range-bound as the downside in tech and miners was offset by strength in energy, financials and defensive sectors. Nikkei 225 suffered from the tech-related pressure as participants returned from the long weekend. KOSPI slumped alongside the tech sell-off, with a sidecar triggered early on due to heavy losses. Hang Seng and Shanghai Comp conformed to the tech-led declines across the region, with weakness in autonames after reports that China will cut the VAT export tax rebate rate on new energy vehicles to 9% from 13%.

Top Asian News

• China smartphone shipments fell 15.4% in Q3, according to IDC.
• India's PM Modi said today's technology and data and knowledge and innovation are powers, adding that tech should help new opportunities for millions.

European bourses (STOXX 600 +0.6%) have moved higher throughout the session. There was earlier underperformance in the tech–heavy AEX (+0.1%), but it has since climbed into the green. Initial pressure stemmed from the slump in tech behemoths in Asia and throughout the US trading session on Monday. The drivers seem to be two-fold: 1) increased competition after CXMT said they made progress on new memory architecture, as they plan to roll out a new server-memory product by year-end, according to SCMP, 2) Broadcom CEO likens market sentiment to a casino and highlights concerns about AI buildout financing. Tech continues to be in favour for fund managers, with a BofA survey showing that the proportion of managers overweight tech has risen to 37% (prev. 30%). Sectors highlight the positive bias. Chemicals top the sector pile, with Health Care and Real Estate following closely behind. The sector laggards include Tech, Consumer Products & Services and Basic Resources. LVMH (-1.5%) reported Q3 sales after the close on Monday. Headline revenue beat estimates; however, the widely watched Fashion & Leather Goods fell 5% (exp. -1.57%). As expected, struggles in China were highlighted as a major challenge, while the CFO added that short-term cost-cutting will not increase sales. US equity futures are mixed, with underperformance in the NQ. Outside of the tech story, focus will be on banking earnings, with JPM, GS and C set to report.

Top European News

• UK Chancellor Healey is reportedly rejecting calls to equalise capital gains tax and income tax rates, the FT reported citing sources. The report added that the Treasury could still decide to raise CGT by a small amount and also said the Treasury is working on CGT relief to encourage entrepreneurs who sell their business to reinvest back in the UK.
• Retail bosses are to warn UK Chancellor Healey that a tax raid on shops will push up prices and worsen the cost of living crisis, according to Telegraph.
• UK grocery price inflation accelerates to 2.5% in the four weeks to October 4th (vs 2.3% in the 4 weeks to Sep), according to Worldpanel.
• German Chancellor Merz said Germany needs to increase its long-term growth potential. Merz added that he wants a comprehensive pension reform and that there will be temporarily higher contributions paid by workers and employers into the pension system.

FX

• Snapshot: DXY is under pressure this morning, owing to easing yields and a pullback in energy benchmarks. The downside in oil does not have a specific catalyst, and it appears to be more of a pullback from yesterday’s advances. Overall, the geopolitical situation remains tense with Saudi striking Houthi targets overnight; elsewhere, a merchant ship was sunk off Bulgaria’s Black Sea coast. Given the USD pressure, G10s are stronger, albeit to varying degrees; the JPY outperforms, whilst the CAD posts only mild gains.
• DXY holds within a 102.30 to 102.57 range. As mentioned, pressure comes alongside easing yields/energy, with domestic newsflow focused on the Fed’s Waller. He mentioned that recent high yields are somewhat attributed to the AI buildout. Interestingly, he noted that recent yield levels are doing some of the Fed’s work on demand. No reaction was seen on the comments, but remarks are not too dissimilar from those seen in the ECB Minutes.
• JPY outperforms vs peers, following reports in Bloomberg, citing sources, which suggested that the BoJ is leaning back against back-to-back hikes in October. Instead, the Bank may change the language surrounding its 2% target to signal that it is “approximately” at the level, rather than “approaching” it. This essentially corroborates a Reuters source report from earlier in the month, but still managed to spur a hawkish reaction in the JPY. MUFG (following the Reuters piece) suggested that the language change will back its case for a December hike.

Central Banks

• Fed's Waller (Voter, Dovish) said the US remains the dominant country in building AI models and that AI could contribute to widening GDP per capita. If AI investment falls off, it will put a check on prices and that hyperscalers are still planning on spending trillions of dollars over the next three years. On the bond market and yields, Waller said the AI build-out is definitely having an impact on yields and that real yields reflect the impact of real growth. Waller went on to say that higher yields could do some of the Fed's work on demand and that inflation expectations are well anchored.
• Fed's Hammack (2026 voter) reiterated that more restriction is needed, but she is keeping an open mind on pace of rate hikes and noted that policy restriction will need to hit demand, either through capital spending or consumption. Furthermore, she said inflation pressures are broadening out from AI, with other firms all doing well and ready to invest, while she doesn't want to discourage growth but stated that they may need to 'pull it back a little bit'.
• The BoJ is reportedly to lean back against back-to-back hikes in October, Bloomberg reported citing sources. The source added that the BoJ could adjust language on the 2% inflation target from "approaching 2%", to "approximately 2%", while also suggesting that December is still in play.
• BoJ Governor Ueda reiterated the BoJ's stance that market determines long-term interest rates and will continue to closely monitor bond markets, adding that long-term interest rates are determined in the markets and reflecting various factors. Ueda said core inflation is gradually nearing 2% and that it is important to anchor inflation around 2% now.
• RBA Minutes from the September Meeting stated the Board was concerned excess demand in the economy was greater than previously assumed and it saw an increased risk of persistently elevated inflation, while it reiterated it will increase rates further if needed. All board members had agreed that a 25bps rate hike was necessary, and the Board briefly weighed the case for keeping rates unchanged, including a decline in house prices. Furthermore, it discussed upside inflation risks and factors that could sustain higher inflation, as well as noted that some upside inflation risks had already emerged or intensified since August, and the Board highlighted the need to adjust rates in a timely manner to keep inflation expectations anchored.
• BoE's Greene (hawkish dissenter) said a bigger risk is not being proactive enough in tackling inflation than raising rates too soon, while she warned if they wait until second-round effects materialise, it will be too late. Greene noted concern about successive supply shocks and stated they must be proactive in leaning against second-round effects, as well as stated that UK monetary policy is not that restrictive.
• ECB's Elderson said the heatwave in Europe may have imposed costs equivalent to the area's projected 2026 economic output, underscoring a potentially material macroeconomic risk.

Fixed Income

• The bullish APAC performance remains, but has not extended, in the European morning thus far. Despite a number of potential catalysts occurring, nothing has fundamentally shifted the dial from a FTQ on the tech sell-off and energy downside, as the Middle East backdrop has not escalated.
• USTs firmer by around 10 ticks as things stand, but only a tick or two above the APAC peak. No move at the time to Fed’s Waller, but his comment that higher yields are doing some of their work is notable, though in-fitting with his dovish-bias. At the upper-end of 104-18 to 104-30+ parameters.
• Bunds followed suit overnight, and have extended by a few ticks to a 121.44 peak this morning, higher by 49 ticks at best. Specifics for the space light, no move to the unrevised German final inflation print and weak Bobl auction. Regional focus remains on familiar factors for the bloc and Germany specifically.
• Gilts gapped higher by just over 10 ticks, before climbing to an 84.47 peak in short order, and since then have held just off that but still with gains in excess of 50 ticks. Aside from the above points and the usual, relatively speaking, larger move seen on energy action, Gilts react to a few factors today. A UK court ruling which significantly increases the odds of the Treasury keeping c. GBP 4bln in seized crypto holdings; a windfall for Chancellor Healey. Additionally, a FT source report suggests that CGT will not be equalised to Income Tax, though it could still see an increase; a reported view taken by the, unsurprising, view that such an increase would increase capital outflows from the UK.
• Italy sells EUR 7bln vs Exp. EUR 5.5-7bln 3.00% 2029, 3.35% 2033 and 3.95% 2041 BTP.
• The UK sells GBP 500mln 4.00% 2063 Gilt via Tender: b/c 3.98x (prev. 3.51x), average yield 5.802% (prev. 5.722%).
• Australia sells AUD 300mln 3.00% March 2047 bonds: b/c 3.60x, avg. yield 5.6818%.

Commodities

• WTI Nov and Brent Dec futures are softer, extending their pullback from yesterday's gains as Trump reiterated that the Iran war will end very soon, while talks between Washington and Tehran continue through intermediaries. Nonetheless, diplomatic progress remains limited, with reports this morning suggesting the two sides remain divided over the sequencing of an agreement, although Iranian FM Araghchi reiterated that Tehran is seriously pursuing diplomatic efforts. Meanwhile, Iran continues to insist on its conditions for reopening Hormuz, while Houthi attacks on Saudi Arabia and the US Gulf production shut-ins remain supportive for the complex. WTI has fallen to a USD 91.81/bbl low from a USD 93.49/bbl peak, while Brent has declined to USD 104.71/bbl from USD 106.14/bbl highs.
• Dutch TTF is firmer amid upcoming colder weather in the Western Hemisphere alongside continued Middle Eastern supply concerns. TTF has climbed from a EUR 83.90/MWh low to EUR 86.40/MWh highs.
• Precious metals are firmer, with spot gold benefiting from lower global yields and a softer DXY amid softer oil prices, although expectations of further Fed tightening keep upside capped. Spot gold has risen from a USD 4,151/oz low to USD 4,201/oz while spot silver has gained within a USD 59.58-60.73/oz range.
• Base metals are mixed, with copper flat amid the broader risk-off tone across the tech sector. 3M LME copper has risen within a USD 14,549.68-14,667.00/t range, while COMEX copper is firmer within a USD 6.7030-6.7725/lb range.
• Maersk (MAERSKB DC) and Hapag-Lloyd (HLAG GY) will re-launch the FM1 service on the route between Asia and the Middle East.
• Kuwait lowered November crude prices for November, according to the pricing document.

Trade/Tariffs

• Western auto executives warned the EU’s deal with Beijing to restrict hybrid vehicle imports into the bloc will offer only “temporary” protection, as Chinese rivals push ahead with their ambitions to expand sales across the continent, according to FT.
• China proposes civil aviation dual-use export rules to facilitate compliant exports for aviation enterprises.

Geopolitics: Middle East

• US President Trump said the Houthis are misbehaving very badly and that he spoke with Saudi Crown Prince MBS about attacks, while he also stated that oil will drop when the war with Iran ends very soon and that the Midterm elections will have no impact on his decisions regarding Iran.
• US President Trump said Iran will never get nuclear weapons and that this war will end very soon, with gas prices to go down as soon as the war ends, while Trump said he had to change the course a little bit on Iran because they couldn't let Iran get a nuclear weapon.
• US President Trump posted, "I see so many comments from the Radical Left Morons and Lunatics that China and Russia are helping the “wonderful” Islamic Republic of Iran. If they are, it’s at a very low level, but I don’t believe they are at all. They have too much to lose, and we would know about it, and know about it very fast!"
• Iran's Foreign Minister Araghchi said that the Foreign Ministry is seriously pursuing the use of diplomatic capabilities to secure national interests, IRIB reported.
• IRGC commander-in-chief said no extra-regional power has the right to threaten and maintain a hegemonic presence or interfere in the Strait of Hormuz and the Persian Gulf.
• Iran and the US remain divided over the sequencing of a diplomatic agreement, Al-Akhbar reported citing sources. The source said that Tehran is demanding an end to the war, removal of the naval blockade and oil sanctions, and release of frozen assets before reopening the Strait of Hormuz and discussing nuclear issues while Washington is insisting on nuclear concessions first.
• Iran is fortifying defences, rallying loyalists and threatening a wider, harsher response against the US and its Gulf allies as it prepares for a potential resumption of attacks after the Midterms and seeks to deter them, according to WSJ.
• Yemen's Houthis said they targeted Riyadh Airport with ballistic missiles on Monday, while the group also carried out an operation targeting Khamis Mushait Air Base with a drone. Furthermore, it was reported that air traffic at King Fahd International Airport in Dammam was temporarily halted.

Geopolitics: Ukraine

• US President Trump said Ukrainian President Zelensky and Russian President Putin have to get together and end the war, while he added that they both don't know how to make a deal, but he thinks they support the energy ceasefire. Furthermore, Trump said he thinks Putin wants to make a deal more than Zelensky, and that Zelensky has to focus on making a deal, not talk.

Geopolitics: Other

• North Korea confirmed it test-fired a tactical ballistic missile, while North Korean leader Kim said North Korean weaponry will be developed and completed more strenuously, according to KCNA.
• US President Trump said he may meet with North Korean leader Kim and it would be exciting, while he also said that he is considering firing the US ambassador to Greece.
• Belize's Foreign Ministry rejected China's sanctions and said measures against Belize's Foreign Minister are unwarranted.

Crypto

• Bitcoin rebounds from Monday's losses and has regained the USD 83k handle after falling to a trough of USD 80.93k.

US Event Calendar

• 6:00am: Sept. NFIB Small Business Optimism, est. 98.2, prior 98.7 (actual 97.9)
• 8:15am: Sept. 26 ADP Weekly Employment Change, prior 23.750k
• 10:00am: Sept. Existing Home Sales, est. 3.95m, prior 3.98m
• 10:00am: Sept. Existing Home Sales MoM, est. -0.8%, prior -2.0%
• 11:30am: US to sell $95BN 13-week bills and $82BN 26-week bills
• 1:00pm: US to sell $95BN 6-week bills
• 2:00pm: Sept. Federal Budget Balance, est. -$30.0b, prior $197.9b

Central Bank Speakers

• 7:00am: Fed’s Goolsbee Speaks in Semafor Podcast Interview
• 10:00am: Fed’s Goolsbee Speaks in Kyla’s Newsletter Podcast Interview
• 1:00pm: Fed’s Barkin Speaks in Moderated Discussion
• 4:00pm: Fed’s Collins Speaks at Banking Conference

DB's Jim Reid concludes the overnight wrap

Superintelligence may yet wipe out the Reid family as in celebrating my wife's birthday yesterday I discovered via the card he delivered that one of my 9-year-old twins spells mummy with one "m". Meanwhile, despite being on the planet for 52 years, I still can't wrap presents. Every present I give looks as if I don't care at all about the recipient because of the chaotic state of the wrapping. There is nothing I can do about it. It might explain why it took until my late 30s to get married though.

After a quiet start to the week with US bond markets closed yesterday, this morning we've seen a major Asian tech sell-off and later today we'll see the start of the US Q3 earnings season barrage. JPMorgan, Goldman Sachs, Wells Fargo and Citigroup all report today, followed by Bank of America, Morgan Stanley and BlackRock tomorrow. Financials are actually expected to be one of the sectors with the weakest YoY growth so be aware of that as you digest today's results. Overall, our US equity strategists expect S&P 500 earnings growth to remain at a record 34% YoY in Q3, versus consensus at 27%. Their view is that consensus is again embedding too much of a slowdown, leaving scope for another quarter of above-average beats. See their piece here for more. In Europe, the season really kicks off next week and our equity strategists expect earnings growth to reach 25% in Q3, 5 pp above consensus (their full preview is here). So it should be a very strong earnings season on both sides of the Atlantic and indeed across the globe.

Ahead of the onslaught there has been a big sell-off in tech overnight, seemingly on concerns over Chinese AI competition. The sell-off, which began this time yesterday has continued to weigh on the KOSPI (-6.30%), leaving the tech-heavy index with its largest two-day drop (-9.79%) since July, back when a reassessment of the AI trade was the key theme in equities. The Nikkei 225 has also come back from a long weekend in Japan with a -2.21% loss.

The catalyst for the latest AI-driven sell-off came after the South China Morning Post reported yesterday morning that China’s CXMT memory chipmaker had made good progress on new DRAM architecture that would boost memory density. So that led to a fall in several memory makers, including the likes of Micron (-3.88%) yesterday, and South Korea’s Samsung (-7.98%) and SK Hynix (-8.72%) this morning. In fact, the Philly semiconductor index fell for a 4th consecutive session yesterday, which is the first time that’s happened since July. Nasdaq (-0.79%) futures are lower this morning with both the S&P and Stoxx equivalents down a more measured -0.19%. 10yr US yields are down -4.6bps after being closed yesterday.

Turning to the rest of yesterday’s developments now, it was a relatively different picture, with most equities advancing despite a rise in oil and gas prices. That came as markets digested the weekend news that the Houthi militants had bombed Riyadh’s airport, along with lingering uncertainties around some kind of energy ceasefire between Russia and Ukraine. Yet despite all that, the S&P 500 (-0.06%) ended the session only a little below flat, whilst the STOXX 600 (+0.65%) saw bigger gains. US equity gains were ultimately reversed by the continued selloff in chip stocks, with the Philly semiconductor index down -2.67%. That said, two-thirds of the index were higher with the Mag-7 closing up +0.47%.

In terms of that rise in oil prices, Brent crude (+1.84%) closed up to $106/bbl, whilst European natural gas futures (+3.58%) hit a post-2022 high of €84.24/MWh. The risk-off in Asia has helped Brent fall back -1.12% this morning.

While US bond markets were closed for a holiday, the latest rise in energy prices led to a repricing across European rates yesterday. Indeed, higher inflation expectations were clear, as the Euro 1yr inflation swaps rose +4.7bps to 3.52%, which pushed front-end yields higher across Europe, as it revived fears about more persistent inflation over the months ahead. Indeed, the sense was that things were still deteriorating, particularly with gas prices hitting a new high. All that came as doubt was cast on the energy ceasefire between Russia and Ukraine, with Ukrainian President Zelenskyy saying that Ukraine would respond if Russia didn’t agree to the ceasefire. So that added to energy supply concerns, particularly with investors already nervous about a wider Middle East escalation after the attacks on Saudi Arabia.

So that meant front-end yields moved up across Europe, with the Franco-German 10yr spread (+5.1bps) closing at a post-2012 high of 142bps, albeit with less fanfare and market stress than when 2012 levels were previously breached 10 days ago. The 2yr yield moved higher in Germany (+2.4bps), France (+1.5bps) and Italy (+2.3bps). So it was interesting that French bonds were not the worst performing at the front end, perhaps suggesting that much of the sizeable summer front end carry positions had now been squared.

Before the late US equity dip and the overnight Asia sell-off, all the major European indices ended higher on the day even with gas prices notably higher. That included the Stoxx 600 (+0.65%) and the DAX (+0.76%), whilst France’s CAC 40 (+0.38%) still saw a rise, even though it underperformed.

To the day ahead now, and as discussed near the top, earnings releases include JPMorgan, Wells Fargo, Goldman Sachs and Citigroup. Data releases from the US include the NFIB’s small business optimism index for September, along with existing home sales. Finally, the Fed’s Waller, Barkin and Collins will speak today.

Tyler Durden Tue, 10/13/2026 - 08:38

Big Tech's Next AI Battleground Is Your Face: Alibaba Takes Aim At Meta Ray-Ban With New Smart Glasses

Alibaba Group Holding unveiled a new generation of AI smart glasses early Tuesday, intensifying competition with its challenger Meta Platforms, which currently sells a lineup of Ray-Ban smart glasses, as Big Tech positions eyewear as the next big battleground.

The Qwen Glasses N1 series, introduced in China, starts at $450 before discounts, putting it in the same price range as Meta's Ray-Ban smart glasses. A Pro version, expected to cost around $520, adds eye-tracking capabilities.

Alibaba's Qwen Glasses N1. Source: Bloomberg

According to Alibaba, the smart glasses feature 50-megapixel cameras, bone-conduction microphones, and AI assistant integration with the Qwen model. The glasses will support shopping, payments, and health tracking, with battery life of up to 25 hours on standby or nine hours of music playback.

Last month, Loop Capital analyst Rob Sanderson told clients that smart glasses are becoming the "next major computing platform" and that an "inflection point" has already arrived.

As we've previously noted, Meta currently leads the space, with Google, Samsung, Apple, and SNAP preparing their own AI-powered eyewear.

Bloomberg's Mark Gurman said earlier this year that Apple is planning to release its first smart glasses in "late 2027."

Apple's smart glasses will feature "oval-shaped cameras, unique colors, and multiple frame styles," according to Gurman. "Over time, Apple believes the glasses could evolve into a health device and eventually incorporate augmented reality technologies capable of improving how people see," he said.

Read the Loop Capital report here in a note we titled "Big Tech's Next AI Battleground Is Your Face."

Tyler Durden Tue, 10/13/2026 - 08:20

"Winter Storm Battleground": Millions Face Potentially Crippling Snowstorms Across 19 States

A rapidly strengthening El Niño is raising fears of a brutal winter across the United States as meteorologists warn that millions of Americans could be battered by powerful snowstorms, dangerous ice events and widespread flooding.

The developing weather phenomenon, driven by unusually warm Pacific Ocean waters, could trigger one of the strongest El Niño events on record, dramatically altering storm patterns across the country.

NOAA's Climate Prediction Center recently placed the odds of a strong-to-very strong El Niño persisting into early 2027 above 83%.

Meteorologist Ryan Hall has identified a massive "winter storm battleground" stretching from southern Maine down the East Coast to Florida, with potential impacts extending west into Texas, Louisiana, Mississippi and Alabama, according to The U.S. Sun.

The corridor Hall is most concerned about runs through Oklahoma, Arkansas, Tennessee, Kentucky, Virginia, the Carolinas and the Appalachian region. For New England and the Mid-Atlantic he has called rain versus snow a coin flip.

"I'm now a lot more confident than I was a few weeks ago that somebody in this corridor is going to get a big snowstorm or a big ice storm this winter," Hall warned.

The threat extends to the West Coast, where California could face unusually heavy rainfall, mountain snow and an increased risk of flooding and mudslides, according to SFGATE.

Across the southern United States, an active storm track could unleash repeated rounds of heavy precipitation, with snow and ice possible wherever sufficiently cold air arrives.

However, not every forecaster expects a winter dominated by massive snowstorms.

AccuWeather meteorologist Paul Pastelok cautioned that rainfall, coastal flooding and swollen rivers could prove more significant, particularly in northern regions where warmer temperatures are favored, according to The U.S. Sun.

"It may be more about rainfall this year," Pastelok said, while acknowledging the potential for disruptive East Coast storms later in the season.

Tyler Durden Tue, 10/13/2026 - 08:05

JPM Reports Surprise Revenue And EPS Miss, Guides Higher Net Interest Income

And Q3 earnings season is off with a mixed report from JPMorgan, which moments ago reported results that showed a surprising drop in FICC trading revenue which sent the stock sliding in the premarket trading, but then promptly erased the entire loss after the company revealed Net Interest Income guidance that came about $1 billion higher than expected.

Let's start at the top. 

The largest US bank reported Q3 revenue and earnings which unexpectedly missed both on the top and bottom line, driven by a surprise drop in the bank's FICC (fixed-income, currency and commodity), the first such decline in more than two years. The fixed-income top-line fell 4% from a year earlier, bringing total trading revenue to $10.3 billion for the period, while analysts were expecting $10.5 billion.

Here are the details:

• Adjusted revenue $50.91 billion, +8% y/y, missing estimates of $51.37 billion
• FICC sales & trading revenue $5.37 billion, missing estimates of $6 billion
• Equities sales & trading revenue $4.95 billion, beating estimates of $4.47 billion
• Investment banking revenue $3.10 billion, +15% y/y, missing estimates of $3.27 billion
• Advisory revenue $1.22 billion, +32% y/y, beating estimates of $1.14 billion
• Equity underwriting rev. $564 million, +7% y/y, missing estimates of $646.4 million
• Debt underwriting rev. $1.22 billion, +3.8% y/y, missing estimates of $1.24 billion
• Managed net interest income $27.15 billion, +13% y/y, estimate $26.87 billion
   
• Adjusted EPS $5.75, (GAAP EPS $5.57) missing estimates of $5.93

The 15% climb in total trading revenue and 14% jump in investment-banking fees came in at the lower end of the range the firm telegraphed at an industry conference last month. At the time, JPMorgan saw both rising by a percentage in the mid to high teens.

The bank's Q3 results also included $658 million of net investment securities losses that Dimon called “discretionary” in the statement.

Some more details on the bank's "fortress balance sheet":

• Loans $1.58 trillion, +10% y/y, estimate $1.56 trillion
• Total deposits $2.78 trillion, +2.5% q/q, estimate $2.73 trillion
• Provision for credit losses $2.74 billion, -19% y/y, estimate $2.79 billion
• Net charge-offs $2.20 billion, -15% y/y, estimate $2.48 billion
• Compensation expenses $14.77 billion, +8.9% y/y, estimate $15 billion
• Non-interest expenses $27.30 billion, +12% y/y, estimate $27.18 billion
• Net yield on interest-earning assets 2.48% vs. 2.45% y/y, estimate 2.47%
• Standardized CET1 ratio 13.9% vs. 14.8% y/y
• Managed overhead ratio 54% vs. 52% y/y, estimate 52.6%
• Return on equity 17% vs. 17% y/y, estimate 17.8%
• Return on tangible common equity 20% vs. 20% y/y, estimate 21%
• Assets under management $5.21 trillion, +13% y/y, estimate $5.27 trillion
• Tangible book value per share $112.64 vs. $105.70 y/y, estimate $115.18
• Book value per share $132.30 vs. $124.96 y/y, estimate $134.93
• Cash and due from banks $21.26 billion, -14% q/q, estimate $25.96 billion

Taking a look at the bank's all important Commercial and Investment bank where the big FICC and several Investment Banking misses were, we find the following:

Markets & Securities Services revenue

• Markets revenue of $10.3B, up 15% YoY
  • Fixed Income Markets revenue of $5.4B, down 4% YoY, driven by lower revenue in Commodities, Rates, Credit and Public Finance, largely offset by higher revenue in Currencies & Emerging Markets
  • Equity Markets revenue of $5.0B, up 49% YoY, driven by strong performance across products, particularly in Prime and Derivatives
• Securities Services revenue of $1.6B, up 14% YoY, predominantly driven by fee growth on higher market levels and client activity, as well as higher deposit balances and higher deposit margin

Banking and Payment revenue

• IB revenue of $3.1B, up 15% YoY, largely driven by higher advisory fees, but missing estimates of $3.27B
• Payments revenue of $5.6B, up 14% YoY, driven by higher deposit balances, higher deposit margin and fee growth
• Lending revenue of $2.2B, up 20% YoY, largely driven by lower losses on hedges of the retained lending portfolio and higher loan balances

Expense of $10.8B, up 11% YoY, predominantly driven by higher brokerage expense and higher compensation expense, including higher revenue-related compensation

Credit costs of $663mm, predominantly driven by net lending activity and changes in the credit quality of certain exposures

• Net reserve build of $452mm and NCOs of $211mm

The FICC miss was the most notable and follows as trading desks face fallout from rising interest rates, although it isn't clear why that would have adversely impacted JPM's trading activity. 

Yet while FICC was a disappointment, the bank's equity traders notched their best third quarter on record, with a 49% jump from a year earlier to $4.95 billion. That came in ahead of expectations and marked the latest in a series of bumper quarters for that business, and was driven by the volatility of the AI bubble. 

JPMorgan’s NII for the third quarter came in at $27 billion, above estimates. Expenses for the quarter were $27.3 billion, more than expected, and the bank lifted its full-year adjusted expense guidance to about $108.6 billion, above the $107.5 billion executives expected in July.  

Commenting on the results, CEO Jamie Dimon said that "each line of business performed well" adding that growth continued to be robust in card, even as the bank "reduced share repurchases this quarter."

“Large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface,” Chief Executive Officer Jamie Dimon said in the statement. “These forces may be manageable, but we remain prepared for a wide range of outcomes.”

Dimon said on Bloomberg Television last week that there was “a little bit of a slowdown in September” for the investment-banking business.

While the bank's result were mediocre at best, with FICC and I-banking revenues that came on the weak side offset by stronger equity trading, it was the bank's guidance that was published in the earnings presentation, released almost an hour after earnings hit, that helped the stock recover most of its losses. 

The bank reported that it now expects to earn about $106.2 billion in net interest income this year, more than the roughly $105.5 billion it predicted in July, and that its “central case” for next year is about $107 billion in NII excluding its markets business. Both figures were about a billion ahead of analysts’ estimates.

Goldman's bank S&T trader and specialist team (Alex Mitola, Christian DeGrasse) had this to say about JPM earnings: 

• (+/=) JPM: Headline EPS miss in part driven by some noise, while core EPS was relatively in-line, but there’s a few points of weakness standing out,
• 1) core rev missed just slightly, driven by weaker fees (FICC trading partially offset by better equities, of which investors were somewhat aware of given mid quarter commentary) while expenses was relatively in-line (perhaps some would want more levers pulled amidst weaker fees)
• 2) NII was solid, but deposit costs of +7bps QoQ were higher than +1bps street, and most importantly for JPM & broader banks
• 3) a significantly slower share buyback with JPM lowering the pace of the buyback to ~$1bn vs $6.7bn last quarter. The decline in the buyback is very notable as, 1) despite this, CET1 declined 30bps QoQ to 13.9%, driven both by higher rates / AOCI (paper marks on securities) and also still solid RWA growth. The market has been spending more time on capital alongside the move higher in rates – but JPM getting more defensive here & the buyback may be a signal to the broader bank industry and capital return estimates are likely biased downward from here.
• Guidance though came in better than consensus, with FY26 NII guide of $106.2bn vs $105.5bn cons, Expenses of $108.6bn vs $108.1bn cons, and 2027 NII ex markets of $107bn, above the street at $104.5bn and +10% YoY… Call @ 830am

After all that, the stock is basically unchanged, although we wouldn't be surprised if it drifts lower after the start of trading, as markets focus on the much more notable slide in actuals compared to the company's guidance.

Tyler Durden Tue, 10/13/2026 - 08:01

Europe's Diesel Shortage Is A Problem Created By Political Design

Authored by Daniel Lacalle via dlacalle.com,

The diesel agreement between Donald Trump and Vladimir Putin will not solve the diesel shortage, considering the magnitude of the problem created by years of misguided, wrongly called "environmental policies." Complaining about diesel prices and the US-Russia deal while eliminating domestic refining capacity and bombing refineries is just another example of bureaucratic hypocrisy.

Renewables are important, but they cannot substitute diesel, just as they have been unable to offset the importance of natural gas. Diesel is essential for every segment of the economy, from transport, manufacturing, and farming to distribution. Now, European politicians complain. However, governments cannot negotiate away years of lost refining capacity. Europe's vulnerability is structural. Yes, war has intensified it, but policy choices helped create an energy system increasingly dependent on imported fuels, expensive infrastructure, and high taxation. Furthermore, the risk is that - as happened in the past - oil and gasoline prices may fall, and the European businesses and families will still pay much higher energy and fuel prices.

According to European Commission figures and comparisons based on official European and US data, Europe suffers an enormous energy-cost disadvantage after two decades of massive subsidies and renewable rollout. Industrial electricity prices are more than twice those in the United States, while industrial natural gas prices reach four times US levels. At the pump, European consumers pay approximately 47% more for diesel and 70% more for gasoline. This is not simply an oil-price problem. It is an enormous competitiveness problem that permeates throughout the economy.

On October 9, Trump announced that Russia would release 300,000 tonnes of diesel immediately, followed by 500,000 tonnes in November, one million thereafter, and another three million, subject to refinery conditions. Washington temporarily authorized Russian diesel transactions until April 7, 2027. However, these are announced commitments, not confirmed deliveries. It may mitigate but not solve the diesel crisis.

The distinction is important. A sanctions exemption may permit trade, but it cannot repair damaged processing units. According to International Energy Agency estimates, Russian diesel production has suffered a temporary but significant blow, declining almost 30% following Ukrainian attacks.

The important element is a policy choice, not a consequence of war.

Europe's refining contraction is the key factor behind the structural diesel problem. It has lost more than 20% of refining capacity since 2009. At the end of 2025, the EU, Britain, Norway, and Switzerland had 72 mainstream refineries and an annual primary processing capacity of 625.4 million tonnes, down 167.6 million tonnes. Industry association FuelsEurope counts 35 closures since 2009.

The deterioration did not stop with the 2022 Ukraine war and has continued recently. Europe lost almost 400,000 barrels per day of refining capacity between 2024 and 2025, with five refineries closing over two years. This trend is a continuing reduction in the infrastructure needed to turn crude into usable fuel.

Environmental policy is part of this story, but taxation and policy choices have aggravated the problem. Governments made it uneconomical to upgrade aging facilities or build new units. Furthermore, at least five closed European facilities abandoned crude processing through conversion into biorefineries. These conversions worsened conventional refining capacity and did not offer a reliable and sustainable alternative.

The policy mistake is obvious and reminds us of the same errors committed with nuclear plants and natural gas supply. Eliminating capacity is a policy mistake without a credible path to reduce diesel's importance. This move was not a transition but a jump into the void. Europe now relies more heavily on refined products from the Middle East, the United States, and India. Importing products is not an environmental policy success. "Not in my backyard" led to dependency and loss of competitiveness. The EU was the fourth-largest buyer of Russian fossil fuels, accounting for 8% (EUR 1.2 bn) of Russia's export revenues from the top five importers in August 2026, according to CREA.

Ukraine's refinery attacks have reduced fuel availability, and Russia has restricted diesel exports. While damaged refineries can be repaired, it will take months.

War in the Middle East and disrupted Hormuz flows have compounded the shortage. The European Central Bank estimates reported in September put the refining-margin contribution to diesel prices at €0.41 per liter, approximately 19% of the pump price. That is why watching Brent alone misses the problem, as crude and diesel are different markets.

On September 21, EU diesel averaged €2.226 per liter, the highest reading in the European Commission's series since 2005. Taxes accounted for €0.861, or 38.6% of the price. VAT applies on top of excise duties, effectively taxing the tax itself.

The EU minimum diesel excise is €0.33 per liter. America's federal diesel tax is 24.4 cents per gallon, before state taxes and fees. European taxation adds a persistent cost wedge that cheaper crude cannot eliminate. This means that the average EU final diesel price is almost 50% higher than the US one. Thus, falling oil prices can provide relief without restoring competitiveness. Fixed duties remain, and scarce refining capacity may keep diesel expensive even when crude oil becomes cheaper.

Europe needs to abandon ideology in energy, provide solid investment conditions, eliminate regulation, and support an adequate refining system. Even though the European Commission's newly announced "refinery dialogue" mentions these issues, it does not change the underlying ideological perspective or any of the existing regulations and misses the key measures to reduce the competitiveness gap, which come from lower taxes, more investment, and elimination of punitive regulations. Emergency Russian cargoes may help at the margin, even if European politicians complain about the US-Russia deal. However, none of this is going to repair Europe's own policy-created vulnerabilities. The solution may take years, even if the changes are implemented today.

Tyler Durden Tue, 10/13/2026 - 07:20

China Is Studying Ukraine's Drone War To Prepare Its Military For Future Conflicts

China is using the war in Ukraine as an opportunity to study the future of military conflict, paying particular attention to how inexpensive drones are changing the economics and tactics of modern warfare, according to the South China Morning Post.

A new report from the Center for Strategic and International Studies (CSIS) suggests Beijing has developed an extensive system for monitoring battlefield innovations and incorporating them into its own military planning. Chinese defense researchers generally identify and assess new developments within several months, although implementing those findings across the People's Liberation Army (PLA) often takes considerably longer.

SCMP writes that the October 7 study, authored by Lilly Min-Chen Lee and Kateryna Bondar, reviewed more than 90 Chinese military and defense-industry publications dating back to 2022. The findings suggest that Chinese officials increasingly view Ukraine as a testing ground for weapons and strategies that could become essential in a future conflict.

Of particular interest is the ability of relatively cheap unmanned aircraft and boats to threaten expensive military hardware and heavily defended installations. Chinese researchers have examined everything from manufacturing drones at industrial scale to defeating electronic jamming, coordinating large numbers of unmanned systems and reducing the time between locating a target and striking it.

Beijing appears especially concerned about protecting its own military infrastructure from similar attacks. Ukraine's successful strikes against Russian naval facilities, aircraft and other high-value targets have prompted Chinese defense planners to reconsider vulnerabilities in their own forces.

Those concerns are beginning to influence military preparations. Chinese forces have incorporated drone threats into training exercises, while the country's defense industry has demonstrated new interception systems, directed-energy weapons and other technologies designed to neutralize unmanned aircraft.

One example came after Ukraine's June 2025 Operation Spiderweb, when drones secretly positioned inside Russia attacked strategic bomber installations. By October, Chinese military personnel were participating in exercises involving simulated assaults by more than 20 drone operators. Researchers believe the timing suggests that Beijing was responding to lessons from the Ukrainian operation, although Chinese state media did not explicitly make that connection.

China's navy has also begun practicing against unmanned maritime threats. An August 2025 exercise introduced hostile drone boats into a naval training scenario, with more advanced live-fire exercises following in April 2026.

The PLA is simultaneously investing in the institutional infrastructure needed to prepare for this type of warfare. New military education programs are focusing on unmanned systems, including a specialized engineering college established in September 2026.

The broader conclusion is that China is treating Ukraine as a preview of what its own military could face in a future war. Beijing is gathering intelligence, evaluating the effectiveness of emerging technologies and gradually adapting its forces accordingly.

There is, however, an important distinction between observing combat and experiencing it. While China can study Russia's and Ukraine's successes and failures, its military still lacks the firsthand battlefield experience needed to determine which tactics and technologies will hold up under real wartime conditions.

Tyler Durden Tue, 10/13/2026 - 06:55

"Britain Is Full": Farage Vows To Shut Down Asylum System For Five Years, Deport 90,000 Pending Claimants

Nigel Farage has a new answer to Britain's asylum backlog: abolish the asylum system.

Standing in Hythe, Kent on Monday in front of a replica Channel "mega dinghy," the Reform UK leader pledged that a Reform government would suspend the asylum system for a full parliamentary term: all new claims rejected, all pending applications voided, and every claimant marked for deportation, according to the BBC. No refugee status, no humanitarian protection, no tribunals and no resettlement schemes. Home affairs spokesman Zia Yusuf put it in three words: "Britain is full."

"The country is currently facing a national security emergency and the first duty of government is to protect its citizens. We cannot accept more asylum seekers while we still have no idea how many people are in the country illegally and the threat they pose. A Reform government will always put British people first and protect our borders." — Nigel Farage, to The Telegraph (emphasis ours)

Translation: rather than fix the queue, Reform proposes to delete it. Regular readers will recall that when Farage first sketched out his migration plan (ECHR exit, an asylum ban for illegal arrivals, migrants moved from hotels to disused RAF bases), we called Reform's plan for dealing with UK illegal migrants a good start (Aug 27, 2025). Fourteen months later, the "start" has become a full stop.

Reform's Plan For Dealing With UK Illegal Migrants Is A Good Start https://t.co/j0UlzNMa7S

— zerohedge (@zerohedge) August 27, 2025

Below we lay out what's in the plan, the numbers behind it, the (predictable) reaction, and the awkward fact that it lands just as Reform's poll lead has evaporated.

What's In "Restoring Justice"

Per the BBC, PA and The Telegraph (via the Daily Sceptic), the plan, dubbed "Restoring Justice," would:

• Void the applications of the ~90,000 people currently in the asylum and humanitarian protection appeals queue and deport the claimants to their home country or "a safe neighbouring country" (PA via AOL).
• Scrap all asylum tribunals, legal refugee routes and resettlement schemes, including immediately closing the resettlement scheme Home Secretary Shabana Mahmood reopened in September. Homes for Ukraine would be abolished for new arrivals, but Ukrainians already here could stay.
• Re-task every Home Office official now working on asylum cases to "reviewing and overturning previous refugee grants." Any refugee granted asylum in the last five years would have their case reviewed (The Independent reports the review would cover grants since 2024, with those from "safe" countries losing their status).
• Pull Britain out of the ECHR, repeal the Human Rights Act 1998 and disapply the 1951 Refugee Convention to head off the inevitable legal challenges (BBC).
• Create a dedicated detention-and-deportation agency needing 24,000 to 28,000 detention spaces. The BBC notes it is "unclear how this would provide enough capacity."
• Ban UK visas for Pakistan, Somalia, Eritrea, Syria, Afghanistan and Sudan if they refuse deportation flights, and hit countries with few nationals in the UK with tariffs, airline bans and asset freezes. As Farage put it: "People will accept their bad guys back" (The Independent).

It sits on top of Reform's earlier pledge to deport up to one million people in its first term (Telegraph via Daily Sceptic), and the August "Operation Fortress" plan to have the Royal Navy intercept dinghies and return them "under escort" to France or Belgium (Guardian). Asked how many civil servants it would take, Farage declined to say, only that it was "going to save us a fortune."

Tariffs as an immigration weapon: someone in Hythe has clearly been watching Washington.

The Numbers: Down 41%, Still 20,935

Farage opened by recalling the day in May 2020 he took a fishing boat out of Dover and called the crossings "the beginning of an invasion," noting that "over 200,000 illegal immigrants have come" since (Reform UK). The Home Office's own series backs him on that one: small-boat arrivals total 213,545 since 2018, including 41,472 last year, the second-highest year on record behind 2022's 45,755.

Which, as we noted last month, means that boat migrants who have entered Britain now outnumber its soldiers (Sep 28).

Boat Migrants Who Have Entered Britain Now Outnumber Its Soldiers https://t.co/QN8ZQJ5sGs

— zerohedge (@zerohedge) September 28, 2026

The awkward bit for Reform's "emergency" framing: crossings are actually falling. Provisional Home Office data show 20,935 arrivals from Jan 1 to Oct 8, down 41% from 35,476 over the same period of 2025, on 305 boats averaging 68.6 people each. The boats, however, keep getting bigger: in August a single "mega-dinghy" brought a record 230 people across (The Independent), hence Farage's line that this is no longer "a small boats crisis." And the 2026 lull can turn fast: 1,648 people landed on 22 boats in the seven days to Oct 9 alone (Home Office).

The Reaction: "Desperation," "Copycat," "Chaos"

Everyone hated it, though for impressively different reasons.

Labour chair Bridget Phillipson called it "a clear sign of desperation and weakness," adding that Farage "is casting around for more and more extreme policies as he tries to deal with scandals, police investigations and a growing challenge from Restore — this is a carbon copy of their policy" (The Independent).

The Tories, meanwhile, complained it wasn't extreme enough to be original. Shadow home secretary Chris Philp said the proposals "largely copy" Conservative policy: "Banning asylum claims by illegal immigrants, abolishing the immigration tribunal and ending Labour's resettlement routes are all existing Conservative policy. Our detailed BORDERS plan also sees us coming out of the ECHR... and closes the modern slavery claim and judicial review loopholes, both of which Reform seems to have missed." The Tories have separately pledged to remove 750,000 illegal immigrants within five years (BBC). So Labour says Reform copied Restore, and the Tories say Reform copied the Tories.

The Refugee Council's Jon Featonby called the plan "unworkable": "Closing our asylum system would cause chaos. Desperate people would still arrive on our shores, but instead of entering an orderly system, they would be driven underground and vulnerable to exploitation and abuse." The Lib Dems' Max Wilkinson suggested the UK join the EU migration and asylum pact instead (BBC).

The legal hurdles are real. Repealing the HRA needs Parliament, and a unilateral ECHR exit by executive power would likely be challenged in court (The Independent). Readers will recall that even a council trying to shut a single asylum hotel in Epping lost: the Court of Appeal sided with the government to keep the migrant hotel open (Sep 1, 2025), after a summer of protests. Strasbourg's critics aren't confined to Clacton either: a top German judge warned that an overzealous ECHR "endangers the existence of Western democracies" (Sep 5, 2025).

The Politics: A Pledge In Search Of A Poll Lead

The timing tells its own story. Five months ago Reform was the party to beat: Farage's Reform UK stormed to historic gains in the May "midterms" (May 8), and in August Farage crushed the Clacton by-election with 63% (Aug 14) after resigning his seat to force a "People vs. The Establishment" vote (Jul 7).

Farage Crushes Clacton By-Election With 63% As Comedy Candidates Dominate Longest Ballot In British History https://t.co/HIC8Ykgjd6

— zerohedge (@zerohedge) August 14, 2026

Since then, the summer of donation stories has taken its toll. In YouGov's latest poll for The Times and Sky (Oct 4-5), Labour leads on 27%, with Reform down 3 points to 22% and the Conservatives on 20%; Restore Britain is on 3% (YouGov). That's Labour's best YouGov showing since January 2025 and the first statistically significant lead for any party in three months, after Andy Burnham's conference speech.

Read the plan as the political move it is: with the Tories and Restore Britain competing for the same voters, Reform is staking out the hardest line on its strongest issue.

Bottom Line

As policy, the plan has obvious holes: no headcount, 24,000-28,000 detention spaces nobody has found, and a legal path that runs through the ECHR, the HRA, the Refugee Convention and every judicial review a well-funded NGO can file. As politics, it is shrewd. Britain has taken in 213,545 small-boat arrivals since 2018, and voters have watched one government after another promise to "stop the boats" while the dinghies got bigger. Farage doesn't need the plan to be workable. He needs it to be the only one voters remember, and with Labour and the Tories busy accusing him of plagiarism, he's halfway there. We side with Farage on the diagnosis. Whether the cure survives its first High Court hearing is another matter.

Next test: the Home Office's next weekly small-boat release on Friday, Oct 16, and the next round of polls, which will show whether "Britain is full" can win back the 3 points Reform lost.

Much more in the full Reform UK speech here.

Tyler Durden Tue, 10/13/2026 - 05:45

Tear Down That Woke

Authored by Silvio Canto, Jr. via American Thinker,

Let me give everyone some cautious advice. Save photos or magazine covers of Europe or what it used to be. Your kids and future grandchildren may need to see them to support those stories of the Europe that our ancestors came from. Honestly, we may be down to photos or memories if current trends continue in what we used to call the old country. It was through photos and memories that our parents told us about the pre-Castro Cuba they grew up in. All they had were those black-and-white photos and stories.

Maybe we will get lucky, and everyone will heed Secretary Rubio's message about preserving our Western culture.

Maybe we will someday remember that speech as "tear down that woke". I hope so but the recent events in France do not make you very optimistic.

Where is Europe going?

Well, not in a good direction as Douglas Murray pointed out via Hot Air:

Today, Britain and Europe still slumber. And worse than slumber, they are busily engaged in submitting to their enemies.

At the United Nations General Assembly last month, the UK's foreign secretary, Ed Miliband, made sure to have a meeting with the highest representative from what remains of the terrorist government in Tehran. The UK's domestic security service, MI5, said last year - in a highly unusual public statement - that the UK has foiled several Iranian terrorist plots in Britain in a short period of time. But Miliband mentioned none of this. As he shook hands with the Iranian terrorist representative, he condemned attacks and attempted attacks on British soil, but did not suggest that the UK would retaliate. Meanwhile, Miliband declared that preventing violence in the West Bank - only when directed against Palestinians by Israelis, and not the other way around - is a priority for the UK government. He later declared himself "humbled" by the presence of a Palestinian Authority representative in the UK.

It seems to be the attitude of the UK government that terror is caused by Israel and brought to the United Kingdom by the U.S. The reality is that terror has been repeatedly brought to the UK by Iran and its various terror proxies, and that they have been allowed to operate there effectively unpunished. They are allowed to enter the UK illegally. They are allowed to plan attacks that are thwarted at great expense of time and money, and they are not even berated by the UK government.

Surrender is the word, and then they wonder why their streets look like they do or why so-called "students" are burning Paris. Who would have believed not too many years ago that "students" with foreign flags and face masks would be burning a school named after Nelson Mandela? Wonder how many of those "students," angry about too much homework, even know who Mandela was?

Or that more and more Europeans would be voting to save their country and culture from uncontrolled immigration? Or that governments were talking about paying couples to have babies because current birth rates mean that the home team will lose to the visitors reproducing the old-fashioned way?

Save those photos, or maybe a video, from a trip to Europe. It may be all we have soon.

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

Tyler Durden Tue, 10/13/2026 - 05:00

How Would NATO Defeat A Russian Invasion? Top Commander Reveals Aspects Of Classified Plan

NATO's top military commander, US Air Force General Alexus Grynkewich, on Monday gave an important speech presenting a "theory of victory" in the scenario of a future Russian attack along the Western military alliance's 'eastern flank'.

He asserted that NATO forces would "block, blunt and break" any Russian attack on member territory, which would make any such assault "utterly futile". But he also characterized the plan as one that would seek to avoid a wider, prolonged war from erupting. But he insisted the alliance is "ready to fight tonight" even though it does not seek escalation.

"Should the adversary choose to press the attack or commit his reserves, we will break the warfighting system engaged against us," Grynkewich declared at the speech given at the Warsaw Security Forum on Monday. "This includes not just the attacking force itself, but anything and everything that supports, sustains or controls that force." This would suggest missile attacks deep into Russian territory, including on command-and-control centers.

"I think our populations around the alliance are a bit nervous," Grynkewich acknowledged while explaining why he is taking what was a classified plan established months ago into the public realm.

He said NATO leadership must seek to assure member populations that it will successfully defend them. "What I want to do is assure the 1 billion citizens of our alliance that we’ve got this," he said. "We know what we need to do. We know how we would do it, and it’s going to take all of us working together." However, looming large over all of this is the specter of nuclear war - something not focused on in his strategic talk.

Anadolu Agency: NATO Supreme Allied Commander Europe (SACEUR) General Alexus G. Grynkewich speaks during a panel on the first day of the Warsaw Security Forum, held Monday.

Below is a brief outline and blueprint of what he laid out in the speech...

He described the overall objective as to quickly neutralize a potential invasion force and its direct support systems, but crucially without seeking Russia's wider strategic defeat. He presented that this would be according to multiple phases:

Phase 1 (Containment & Supremacy): Ground troops stop initial territorial grabs while air, naval, space, and cyber assets secure battlefield control.

Phase 2 (Disruption): Advanced sensors and drones stall enemy momentum if the assault persists.

Phase 3 (Dismantling): Relentless multi-domain pressure (kinetic and non-kinetic) destroys enemy logistics, communications, and command structures, cutting off supplies and isolating commanders.

From there Grynkewich emphasized deterrence, describing that NATO's ability to match any enemy escalation will only solidify alliance unity and gradually weaken Moscow's overall force posture and will to keep going.

Bloomberg summarized the talk according to the following key notes:

• Does not believe a conflict is imminent or inevitable.
• NATO will respond to attacks by blockading, degrading and striking adversary forces.
• If necessary NATO will neutralize systems targeting its combat systems.
• The alliance will pair high-end precision-guided munitions with large-scale, low-cost, scalable systems.

NATO's SACEUR General Alexus Grynkewich: We know how we will fight if a fight comes to us. And we know we will win. And together we will ensure that any adversary who considers attacking our alliance reaches the only conclusion that matters: Today is not the day. https://t.co/tt1NfjeaX7

— Clash Report (@clashreport) October 12, 2026

The Wall Street Journal has further issued a detailed report going into more detail on the Ukraine war-inspired 'autonomous zone' on the eastern flank:

The approach was devised to block a Russian adversary whose geographic advantages and outsize defense industry could enable it to mass forces against Baltic states, Poland and other NATO allies before the alliance could marshal a robust response. Under its strategy, an extensive “autonomous zone” would be established so that drones and ground robots could blunt a Russian attack without extensive allied casualties. 

At the same time, long-range missiles would strike Russian command posts and air defenses in the exclave of Kaliningrad, near St. Petersburg and in Belarus. That would puncture Russia’s efforts to control the skies and enable the U.S. Army’s V Corps and other NATO ground forces to counterattack. 

NATO air forces would move swiftly to strike Russian reinforcements as they streamed toward the battlefield and to attack other targets in the rear. 

The NATO attacks would be enabled by a “data backbone,” a system for instantaneously sharing classified targeting data through the cloud among allied forces. Elements of that network have been tested in the Middle East during the U.S. fight with Iran.

The approach has been dubbed the Eastern Flank Deterrence Initiative and its overall objective, U.S. military officials said, is to force Putin to look at NATO’s defenses and conclude “not today” if he considers attacking. To reinforce that, alliance forces constantly drill to both test and demonstrate their readiness.

Meanwhile European officials are still strongly hyping and warning about what they call a continuing sabotage campaign which has made heavy use of drones and other tactics that violate European airspace and security.

NATO's SACEUR General Alexus Grynkewich: The risk of a major attack on NATO territory right now is actually relatively low. The reason is Vladimir Putin's war is ongoing in Ukraine, and his military is unfortunately engaged in that conflict. That force is not available to threaten NATO territory. That doesn't mean he couldn't do something smaller, and obviously we do see the sabotage activity and everything else that's ongoing.

— Clash Report (@clashreport) October 12, 2026

EU top diplomat Kaja Kallas is also on Monday calling on President Trump to sanction Russian and ditch the controversial diesel deal. 

"Pressure ‌on Moscow, ​not concessions, is the fastest way to end ​the war," ​she ​said.

Tyler Durden Tue, 10/13/2026 - 04:15

France Is World's Most Dangerous Place For Bitcoiners: 90 Attacks In 7 Months

Authored by Christina Comben via CoinTelegraph.com,

French authorities have recorded 90 cases involving kidnapping, abduction, extortion, threats, and violent theft related to cryptocurrencies in just over seven months.

The figures, provided to Cointelegraph by the French Interior Ministry, are from Jan. 1 to mid-August 2026. Authorities also recorded 223 arrests, and 126 people were imprisoned from January to July.

The figures equate to a new case every two and a half days, although there is no official year-on-year comparison to understand if the problem has become suddenly worse: "We do not have the statistics on these items for 2025, as the recording of events began on Jan. 1, 2026," the ministry says.

What makes the new numbers even more striking is they are much higher than other public trackers of meatspace attacks.

Chainalysis counted 30 publicly known violent crypto incidents in France through mid-2026, but noted that the scale was "almost certainly larger." Security firm Gart.io has tracked 73 attacks in France in the year to date, which puts France in the number one spot ahead of the USA on 66 real world attacks, and the UK on 27.

The rise in physical attacks - known as "wrench attacks" - on crypto holders in France points to something bigger than a rash of isolated incidents. Leaked personal data may be the culprit.

So, why France?

Wrench attacks are far from a new phenomenon. Bitcoin security advocate Jameson Lopp's long-running directory of known physical attacks has documented 365 cases across 60 countries between 2014 and 2026, with France topping the leaderboard.

What seems to be new, however, is the speed at which violent crypto crimes are spreading throughout the country. Attacks have gone beyond Paris to places including Strasbourg, Marseille, Grenoble, Toulouse and Nantes, according to Chainalysis.

Violent attacks above the historical baseline. Source: Chainalysis.

Criminals aren't targeting crypto rich tourists, and of the victims with known residency, 93% were French.

Chainalysis head researcher Eric Jardine tells Cointelegraph the surge is "very likely" due to a "significant data breach."

"These sort of breaches expose more than financial information; they reveal who holds crypto, where they live, and how to find them."

That makes physical attacks against crypto holders particularly insidious because they can begin long before a thug shows up with a wrench demanding your seed phrase or a crypto transfer. The assailants first need to know who has something worth stealing, where they live and how to reach them.

Jardine says the French tax authority compromise in 2024, where a tax official in the Paris area "leaked PII, financial and crypto holding information on French taxpayers," may have been the accelerant. Chainalysis records show attacks surged from late November of the same year.

Chainalysis also points to a further incident in January 2026, with crypto tax reporting firm Waltio disclosing a breach affecting some 50,000 users, creating yet more useful data for attackers to mark their targets.

Francis Pouliot, founder of Canadian Bitcoin exchange Bull Bitcoin, has repeatedly challenged Europe's DAC8 crypto reporting rules in France, which expand tax reporting and information-sharing requirements for crypto users across the European Union.

"DAC8 has transformed the concept of Know Your Customer into Kill Your Customer," he said, along with describing France as the "crypto kidnapping capital of the world."

The world of physical attacks. Source: Gart.io

When the target isn't the Bitcoiner

According to Chainalysis, one of the most revealing changes may be who is being attacked. Globally, relatives and acquaintances accounted for around 25% to 30% of violent crypto incidents by early 2026, and in France, the proportion was more than 40%.

In May 2026, six men allegedly tried to abduct the wife of The Sandbox co-founder Sébastien Borget from the couple's home in Villenoy, France, with one attacker posing as a delivery driver to get her to open the gate.

In August, a couple in rural France reportedly endured three separate attempts to break into their home after buying a property previously occupied by crypto millionaires, after the previous owners' tax information and address were leaked onto the dark web.

A similar tactic was used in 2025, when the father of a crypto entrepreneur was abducted in Paris and held for two days, with the kidnappers reportedly cutting off part of his finger and sending it to his son while demanding $5.6 million in cryptocurrency.

Jardine says the targeting of relatives and associates "suggests criminals are doing reconnaissance before they act," whether by "monitoring social media, analyzing blockchain data, using leaked information, or receiving tips from insiders."

That turns the usual idea of a crypto target on its head, since the person with the wallet may not be the person standing in front of the attacker.

French authorities are responding by treating the attacks as organized crime, coordinating investigations through JUNALCO, the country's specialized organized crime jurisdiction.

The $5 wrench conundrum

Most crypto holders have learned how to protect their seed phrases, set up hardware wallets, test their environments and avoid clicking on phishing links.

While those things are still important, none of them will help if a bad actor already knows who they are, where they live and that they have something worth stealing in the first place.

Cryptography can protect a wallet, but it can't stop an attacker with a $5 wrench.

Tyler Durden Tue, 10/13/2026 - 03:30

German Coalition Turmoil Deepens As SPD Co-Leader Bas Quits, Blames CDU "Public Attacks"

Just when Friedrich Merz gathered his party's top brass to "regroup," the government lost another load-bearing wall.

On Monday, labor minister Bärbel Bas, who was also co-chair of the junior coalition partner SPD, abruptly resigned from both posts. The 58-year-old said she needs time to grieve after the sudden death of her stepdaughter, but she also pointed a finger at "public attacks," including from within the ranks of Merz's own CDU/CSU bloc, which she said continued throughout her mourning period, and which according to Reuters had made her situation unbearable. She keeps her Bundestag seat.

Bärbel Bas at SPD headquarters the day after the Saxony-Anhalt vote, Sept 7, 2026 (Reuters/Maryam Majd)

The resignation landed on the second day of a CDU retreat meant to steady the party after a September that went from bad to historically catastrophic. Regular readers will recall that the AfD took 43.8% in Saxony-Anhalt, where Merz's CDU slumped to 17.2%, and two weeks later the chancellor admitted a "disaster" as the CDU scored just 4.9% in Mecklenburg-Western Pomerania and failed to enter a state parliament for the first time in its history.

MERZ'S CDU PARTY POSTS WORST RESULT EVER IN A GERMAN STATE VOTE AFD AHEAD OF SOCIAL DEMOCRATS IN NORTHEASTERN STATE VOTE ANTI-CAPITALIST LEFT PARTY LEADING IN BERLIN ELECTION

— zerohedge (@zerohedge) September 20, 2026

Nationally, the picture is no prettier: the AfD hit 30% in the GMS poll, 10 points ahead of the CDU/CSU, enough to leave the "black-red" coalition without a majority, while an Insa survey found 78% of Germans say Merz is not the right chancellor. Meanwhile, the vaunted "firewall" is visibly crumbling: four CDU lawmakers in Saxony-Anhalt helped elect an AfD speaker last week and have reportedly agreed to back AfD's Ulrich Siegmund for state premier in December.

Bas also leaves a hole in the middle of the reform agenda. Her ministry runs large parts of Germany's welfare system and was handling the pension and working-time legislation at the center of the coalition's reform push, with Berlin aiming to pass the broader pension overhaul by year-end. CDU politicians had accused her ministry of dragging its feet on measures coalition leaders agreed back on July 1, which is a polite way of describing the "attacks" she referenced on her way out.

Her replacement: Alexander Schweitzer, the former premier of Rhineland-Palatinate, nominated by Finance Minister and fellow SPD co-chair Lars Klingbeil. Readers may recall Schweitzer is "former" because the CDU beat the SPD in his state in March, so the SPD's answer to an electoral crisis is to promote a politician who just lost an election. Business groups, for their part, welcomed the appointment as a chance for a "new start."

Klingbeil also proposed an extraordinary SPD party congress in December or January to re-elect the entire leadership. People familiar told Bloomberg the next co-chair must be a woman from the party's left wing, though not Manuela Schwesig, who is busy with coalition talks in Mecklenburg-Western Pomerania. Klingbeil, who scrapped a trip to India to deal with the vacuum (his attendance at this week's IMF/World Bank and G20 meetings in Bangkok is now uncertain), called the attacks on Bas "indecent" and said they were "poisoning our political culture."

Happier times: Merz signs the coalition agreement with the SPD, May 5, 2025 (Sandro Halank, Wikimedia Commons, CC BY-SA 4.0)

Merz said Bas's decision demands "respect," while his spokesman Stefan Kornelius denied a media report that the chancellor himself had grumbled off the record about her absence despite knowing her personal situation, the kind of denial that tends to precede further reports, or even more denials.

Reuters notes that the departure of one minister is not expected to bring down the government, and coalition leaders issued a statement last week vowing to carry on through the "historic test" facing German democracy. But the calendar is brutal: an SPD leadership contest, a possible first-ever AfD state premier in Saxony-Anhalt in December, a pension overhaul with a year-end deadline and five more regional elections next year that will shape Merz's control of the Bundesrat.

As Nomura's Andrzej Szczepaniak warned last month, Europe has entered an 18-month election cycle in which politics is lurching toward populism, and Germany is the main event. All of this while the economy the reforms are supposed to rescue keeps getting outcompeted:

Beijing's trade template: China overtook Germany in exports of industrial machinery and equipment, in exports of specialized industrial machinery and will any minute overtake it in share of road vehicle exports. Coming to a Data Center near you next. https://t.co/eoHrZ2i6iV

— zerohedge (@zerohedge) October 12, 2026

And so, the German coalition limps on (for now), but the year-end pension deadline just became the first casualty. A government that can't keep its own labor minister is unlikely to sell voters on working longer.

Tyler Durden Tue, 10/13/2026 - 02:45

Hock Tan Warns AI Investors Are Gambling In A Casino... Whose Chips His Own Credit Is Paying For

Usually it's the chip CEOs who are the cheerleaders and the bond market that plays the skeptic. On Monday, the CEO of the second-most important AI chipmaker on the planet decided to play both roles.

Speaking on a panel at a DBS conference in Singapore, Broadcom boss Hock Tan said that many of the investors piling into AI behave more like gamblers than investors, setting extreme expectations only to discover they are effectively sitting at a casino table. In his own words, "a lot of investors have no clue what they are investing in."

He didn't stop there. Tan also questioned the long-term economics of the money-losing frontier labs, and, most importantly for markets, warned that insufficient capital could become the next constraint on the AI industry's growth. As if to make his point for him, Intel's Lip-Bu Tan, who shared the panel, said hardware will stay in short supply for another two to three years. Translation: the chips will be scarce, and so will the money to pay for them.

Semis did not take it well. The SOXX slumped 2.6% and JPMorgan's AI memory basket tumbled 4.3% on a day when more than 60% of S&P members actually rose. Asked to explain the selling, JPMorgan tech specialist Joshua Meyers wrote in the bank's afternoon Market Intel briefing (available to pro subs) that "the most proximate reason seems to be Hock Tan's participation in a panel at a DBS conference in Singapore, where he warned financing could become a bigger bottleneck than component shortages (in addition to questioning frontier lab business models, and comparing 'many investors' to casino gamblers)."

Below we look at why Tan is right about the bottleneck, and why the people he called gamblers are the ones keeping his stock afloat while his own bondholders head for the exits.

The Bottleneck Is Money

Tan's warning will come as no surprise to (even not so regular) readers: we have been warning since last October that the AI buildout runs on ever increasing amounts of debt, and last week Goldman's Rich Privorotsky effectively conceded the point when he said the AI borrowing binge is now crowding out everyone else in the capital markets.

The evidence has been piling up. Last Thursday, Nvidia-backed Australian data center operator Firmus first slashed the price of its IPO by 25% and then pulled its $5.5 billion listing altogether, opting to raise money in private markets instead (good luck with finding someone dumb enough there). Our reaction at the time:

*FIRMUS DECIDED TO WITHDRAW APPLICATION TO LIST ON ASX *FIRMUS NOW PURSUE CAPITAL FROM PRIVATE MARKETS Bring on the Apollo life insurance policies

— zerohedge (@zerohedge) October 8, 2026

And Tan wasn't the only one at the DBS event flagging it: just before he took the stage, DBS CEO Tan Su Shan said the market is now repricing the risks around AI financing after the heavy investment of the past two years. When the bank hosting the conference and the chipmaker on the panel agree that the money is the problem, it's probably the money.

The Customer Is Losing Money... And Broadcom Is Lending It

Then there is the swipe at the frontier labs. Tan said OpenAI's $50 billion annualized revenue as of September suggests there is a viable business, but that the company is still losing money because it spends so much on training and compute, so for now the number tells you little about long-term profitability.

Fair enough. Except that OpenAI is Broadcom's customer, and on top of it, courtesy of SPV structures that would make Jeff Skilling blush, Broadcom is the one arranging the money for OpenAI to buy Broadcom's chips (you may get a little nauseous after reading that).

As we detailed last Thursday, Broadcom is in talks on a $50 billion+ chip financing for OpenAI (Bloomberg puts the next leg at closer to $30 billion), on top of the $60 billion it is syndicating for Anthropic and the $35 billion "Big Sky" platform it set up with Apollo and Blackstone in June. That's roughly $145 billion of chip debt with Broadcom's name on it, or as we put it when we tweeted this chart, "$300BN in chip-collateralized SPVs, so far":

In other words, the CEO questioning the labs' business models is also the biggest single lender to those business models! Over the weekend, Jefferies went even further, warning of "massive capital destruction" since just two cash-burning labs account for half of a $2.3 trillion backlog.

And last week's FT report that OpenAI's run-rate was ~$50 billion rather than the widely cited ~$70 billion, which Goldman's TMT desk chalked up to gross-vs-net accounting, showed just how much of a ~$1 trillion equity complex rests on largely made up and unaudited numbers from two private companies.

Gamblers Hold The Stock, Bondholders Hold The Bag

Which brings us to the irony. Tan may sneer at the "casino" crowd, but the casino is the only thing propping up AVGO. Per Goldman's derivatives desk, Mag7 is now ~22% of total US prime exposure (the most since early 2022), semis exposure has doubled to ~12% from ~6% at the start of the year, and roughly $115 billion sits in levered semis ETFs. JPMorgan's factor team adds that semiconductor sentiment is back above the 99th percentile. Those are the real gamblers.

Broadcom's creditors, meanwhile, are folding. The moment Broadcom's Anthropic financing hit the tape, we said what would happen next:

*BROADCOM AMASSING $60 BILLION TO FUND CHIPS FOR ANTHROPIC CDS gonna fly tomorrow

— zerohedge (@zerohedge) October 2, 2026

It took about 12 hours for Broadcom bonds to hit all-time lows. And it has been one-way traffic since August, when Broadcom's CDS exploded after it emerged that the company was seeking up to $100 billion in an off-balance sheet SPV.

Back then, 5Y CDS hit a record 122bp. After a brief September reprieve, the Anthropic and OpenAI financings sent it right back up: according to Goldman's TMT specialist sales desk (available to pro subs), Broadcom's 5Y CDS printed a record 136bp last Thursday, alongside Oracle at a record 261bp, as nearly $500 billion of 2026 AI borrowing gets repriced. Goldman flagged both spreads as key gauges of concern over debt-funded AI capex. At 133bp, Broadcom's CDS is a few basis points from that record, and more than triple where it was in May, while Nvidia, its own $500 billion "compute financing platform" notwithstanding, sits at 86bp:

Put differently, the stock is held by the people Tan just called gamblers, and the bonds are priced by the people who agree with him.

Tan Had Some Help

To be fair, JPMorgan's Meyers also pointed to a weekend sell-side note re-igniting power worries (a shortage of "powered shell" of as much as 19GW next year, and more in 2028), plus Middle East headlines and nervousness ahead of a private frontier lab investor meeting on Wednesday. Memory got an extra kick from China's CXMT progress on next-gen DRAM, which we covered this morning in "Memory Remains The Epicenter". And with bond markets shut for the holiday, Goldman's cash desk said it was the lowest-volume session of the year, which tends to amplify every move.

Tellingly, Goldman's derivatives desk saw clients reach for HYG downside, buying 50k Jan 77/73 put spreads, with the bond market closed. Even the gamblers, it seems, are hedging the credit.

Bottom Line

JPMorgan's Market Intel team is sticking with its "Tactically Bullish" call into earnings, arguing semis can climb this latest wall of worry. Maybe. But when the CEO whose company is financing its own customers' chip purchases says money, not silicon, is the next bottleneck, while his own CDS prints records, we'd side with the credit market.

After all, in a casino the house always wins. The question is who the house is when the house is also lending the chips.

More in the full JPM US Market Intelligence afternoon briefing and Goldman's TMT specialist sales note, both available to pro subs.

Tyler Durden Mon, 10/12/2026 - 23:31

The Collective Is The Enemy Of Community

Authored by Thaddeus G. McCotter via American Greatness,

The Democratic Socialists of America exploit young people's longing for community, but socialism's coercive collectivism destroys the voluntary relationships that sustain it.

Whether reflecting on the impersonal essence of "virtual reality" and the incessant stream of demands and anxieties it imposes upon our diurnal, increasingly alienated existence, or listening to the concerns of one's fellow citizens, one hears a persistent leitmotif: the longing for true community, especially among the youth.

One aspect of this longing has been well bruited: people's gnawing sense that the myth of "virtual community" is an alienating illusion that increasingly leaves them numb and pining for personal engagements - the flesh-and-blood amities, intimacies, and sundry other encounters of true community.

Exacerbating this sense of loss, especially among the young, people are very concerned about "affordability" - such as the inability to purchase a new home, rent an apartment, find an entry-level job, or keep the one they already have - due to the rise of artificial intelligence (AI) and inflation. But too often overlooked is how the diminishment of these opportunities has reduced people's personal interaction and the sense of community it brings.

Indeed, when people, notably youth, talk about wanting to "shop locally," support small businesses, or even reject "corporate" entities and their culture, it is not a complete rejection of capitalism. Indeed, one can clearly recognize young people's embrace of free markets and small businesses. Yet, it is a practical complaint regarding its failures - one of which is its eclipse of community beneath an impersonal corporatism. (One can make the argument that today's youth are essentially the political descendants of Jeffersonian Republicans, but I digress.)

Naturally, one group that has not overlooked young people's yearning for a greater sense of community is the Democratic Socialists of America (DSA). They exacerbate youth's disaffection with the economy by equating corporatism and capitalism and proffer socialism as a virtuous panacea for economic ailments. And, for alienated people yearning for community, the DSA conflates and substitutes the collective for community.

But the truth is the collective is the enemy of community.

As Robert Nisbet warned in his seminal work, The Quest for Community: A Study in the Ethics of Order and Freedom:

Marxism, like all other totalitarian movements in our century, must be seen as kind of secular pattern of redemption, designed to bring hope and fulfillment to those who have come to feel alienated, frustrated, and excluded from what they regard as their rightful place in a community. In its promise of unity and belonging lies much of the magic of totalitarian mystery, miracle, and authority.

It is a false promise.

Under socialism, the "warm embrace" of the collective is created by an omnipotent, centralized government. It relies upon coercion, not consent. In addition to crushing an individual's agency and ability to dissent, it destroys the voluntary intermediate institutions that form a community and insulate and protect the individual from the domination of the centralized government.

As Nisbet explained, the destruction of these intermediate institutions is imperative for would-be authoritarians:

We may regard totalitarianism as a process of the annihilation of individuality, but, in more fundamental terms, it is the annihilation, first, of those social relationships within which individuality develops. It is not the extermination of individuals that is ultimately desired by totalitarian rulers, for individuals in the largest number are needed by the new order. What is desired is the extermination of those social relationships which, by their autonomous existence, must always constitute a barrier to the achievement of the absolute political community. The individual alone is powerless. Individual will and memory, apart from the reinforcement of associative tradition, are weak and ephemeral. How well the totalitarian rulers know it. (...) To destroy or diminish the reality of the smaller areas of society, to abolish or restrict the range of cultural alternatives offered individuals by economic endeavor, religion, and kinship, is to destroy in time the roots of the will to resist despotism in its large forms.

The antithesis and antidote to the collective is community.

Community requires individual consent, agency, voluntary associations, and governmental subsidiarity. This is decidedly different from the strawman argument proffered by socialists that the choice is between the collective and a calloused "rugged individualism." While deceptive, such an argument makes a cynical sense, because subscribing to the DSA's agenda would leave someone just a coerced cog in the collective, not a consensual member of a true community.

Once more, Nisbet writes in his book, The Sociological Tradition:

There must be in any stable culture, in any civilization that prizes its integrity, functionally significant and psychologically meaningful groups and associations lying intermediate to the individual and the larger values and purposes of his society. For these are the small areas of association within which alone such values and purposes can take on clear meaning in personal life and become the vital roots of the large culture.

And is it not the aim of all radicals, including the DSA, to destroy root and branch the foundations of an established civilization?

Is it not to fundamentally eradicate all individual agency and consensual, intermediate communal relationships to impose their radical ideological dictates to perfect humanity and create Utopia?

Is it not, as Nisbet avers, to make sure "man's alienation from man must lead in time to man's alienation from God," and from community into the chill grip of the iron fist of the collective?

Tyler Durden Mon, 10/12/2026 - 23:25

Luxury Condos Seized In Singapore’s Massive Money-Laundering Case Go Unsold

Singapore has no shortage of people curious about the spoils from its massive money-laundering crackdown. Getting them to actually buy the confiscated real estate has been another matter.

The government is gradually disposing of assets tied to the S$3 billion laundering scandal that erupted in 2023, according to Bloomberg. More than 80 homes are being sold alongside watches, jewelry, handbags and other expensive possessions seized from the operation.

The luxury goods have been hot. The luxury real estate decidedly has not.

Of more than two dozen high-end properties recently put through auctions, only four apartments have found buyers that way. At one sale, more than 60 people showed up for seven properties carrying over S$43 million ($33.6 million) in combined opening prices. Not one sold.

One Gramercy Park apartment near Orchard Road failed to attract a single bid. Another large marble-finished unit with its own elevator was offered at S$7.55 million. Eventually someone tried S$4 million, prompting laughter before the offer was dismissed.

The scene captured an uncomfortable reality for sellers: plenty of people want to see what happens when convicted money launderers' assets hit the auction block, but curiosity isn't translating into aggressive offers.

“There has been a lot of hype generated,” said Tan Tee Khoon, Knight Frank Singapore’s head of auction and sales. Some attendees, he added, openly admit: “I just want to come and see.”

The weak results also arrive at a difficult moment for the most expensive slice of Singapore's housing market.

Bloomberg writes that government measures intended to restrain property speculation have dramatically narrowed the pool of potential purchasers. Most foreigners buying residential property face an additional 60% stamp duty, while relatively few locals are prepared to spend eight figures on a home.

Two confiscated apartments at Martin Modern recently changed hands for S$2.12 million and S$2.08 million, roughly around their previous transaction levels. Two others at Wallich Residence sold for S$6.6 million and S$5.48 million, below their initial auction prices.

The broader Singapore property market remains relatively firm, but the top end has developed weak spots. Private-home prices recently posted their fastest quarterly increase since 2024 even as transaction volume fell about 30% from the previous quarter.

Sentosa, where members of the laundering operation accumulated expensive property, illustrates the disconnect. Villa prices on the resort island fell roughly 11% over the decade through 2025.

Some seized homes are now being marketed for considerably less than their former owners paid. Convicted launderer Lin Baoying spent almost S$29 million on two detached Sentosa houses in 2021. Their current combined guide price is more than S$6 million below that purchase price.

Deloitte's Singapore unit is overseeing the liquidation and plans to release assets in stages through mid-2027. If properties repeatedly fail to sell, prospective buyers have an obvious incentive to wait for further reductions. Sellers, meanwhile, don't want to cut prices so aggressively that the portfolio begins looking like distressed inventory.

Photos: Knight Frank/BBG

The assets stem from an enormous 2023 police operation involving more than 400 officers and over 200 properties, many in expensive areas including Orchard Road and Sentosa. Ten China-born defendants were convicted, and the group became widely known as the “Fujian Gang.”

The fallout eventually reached Singapore's financial sector. Nine firms, including Credit Suisse, Citibank and United Overseas Bank, were hit with a combined S$27.45 million in penalties over anti-money-laundering shortcomings connected to the case.

Yet while multimillion-dollar apartments sit without bids, the former owners' handbags and jewelry have been flying out the door. At an auction conducted by Hotlotz, every luxury-goods lot sold. One limited-edition Louis Vuitton pumpkin bag created with Japanese artist Yayoi Kusama was expected to fetch S$12,000 to S$16,000. Instead, 81 bids pushed the final price to S$87,000.

The difference is partly psychological. Someone chasing a rare handbag, watch or piece of jewelry may worry another opportunity won't appear. Property buyers can compare an apartment against alternatives, determine fair value and walk away when the numbers don't work.

Another 14 Hotlotz auctions are planned, including Hermès handbags and watches from Rolex, Patek Philippe and Richard Mille. Dozens of homes also remain in the liquidation pipeline. The government has already recovered substantial sums. By the end of March, approximately S$1.4 billion in cash and proceeds from disposed assets had entered Singapore's Consolidated Fund.

For now, Singapore's most infamous criminal asset sale has produced a strange split: people will fight over the handbags, but they won't fight over the homes. And with buyers increasingly convinced that patience could produce lower prices, the remaining condos may prove considerably harder to move than the watches, diamonds and designer bags sitting inside them.

Tyler Durden Mon, 10/12/2026 - 23:00

At Least 10 Supertankers Approaching Port Of Fujairah Reverse Course Amid Iran’s Attacks

A growing number of empty supertankers have been turning away from the Persian Gulf as escalating Iranian attacks threaten a critical transfer hub for wartime oil shipments, Bloomberg reports.

At least 10 very large crude carriers and several Suezmax vessels approaching the port of Fujairah in the United Arab Emirates have stopped or reversed course in recent days, according to tanker-tracking data compiled by Bloomberg. 

While other vessels are still continuing on their journeys into the region, the retreat of these tankers amid near-daily attacks around the Strait of Hormuz - some near Fujairah itself - raises fresh concerns over the sustainability of oil flows through the waterway.

Fujairah is commonly signaled as an interim destination by vessels ultimately sailing to the Gulf of Oman, where they can collect cargoes via ship-to-ship transfer, or onward into the Persian Gulf. That makes the number of ships heading toward the port a broader indicator of tanker operators’ appetite for approaching the waterway.

The shift threatens a key workaround that has helped Persian Gulf oil exports recover to near prewar levels. Large crude carriers can wait off Fujairah and in Omani waters outside Hormuz while shuttle tankers make the riskier transit through the strait, bringing out crude and transferring it for onward shipment to buyers.

The system depends on a steady supply of receiving tankers, so a significant retreat from the region by empty VLCCs could slow the flow of crude, tying up the shuttle vessels for longer when tanker availability is already tight.

The pullback is particularly striking given the financial rewards on offer. A global tanker shortage has pushed shipping costs to extraordinary levels.

For example, hiring a vessel to haul oil from the US to China now costs more than launching a rocket into space.

Tyler Durden Mon, 10/12/2026 - 22:45

"My Guy, I Can Code": After Deconstructing Adobe, Dev Uses Claude To Clone Microsoft Office For Free

Days after unveiling free, open-source stand-ins for seven Adobe applications, Atlanta engineer Brandon Thomas has turned to Microsoft Office. This week he posted WordCraft, GridCraft and DeckCraft - replicas of Word, Excel and PowerPoint - to GitHub, Tom's Hardware reported. Thomas says he used Anthropic's Claude to help build the software and is giving the results away.

The Adobe set came first. Gizmodo's Mike Pearl reported on Oct. 7 that Thomas had used Claude Opus 5.5 and the Rust programming language to recreate Photoshop, Illustrator, Premiere and four other Adobe applications. Thomas wrote on Hacker News that they were in early alpha and "not anywhere close to ready," while Pearl called the Photoshop stand-in "glitchy, but real." Adobe, Pearl noted, agreed to a $150 million settlement after federal prosecutors sued it in 2024, alleging it was "trapping" people in subscription plans.

The Office clones followed within days. Paul Thurrott reported on Oct. 9 that WordCraft reads and writes DOCX files, and that ArtCraft, Thomas's company, calls it 87 percent complete for ribbon commands and about 62 percent complete for real feature parity. For GridCraft, a pre-alpha Excel stand-in, ArtCraft claims 93 percent of Excel's worksheet functions. DeckCraft, the PowerPoint stand-in, is said to cover about 79 percent of the feature set and to be 80 percent of the way to a first alpha.

Thurrott also reported that ArtCraft has removed the download links from its website, leaving GitHub as the way to get the code.

Gadget Pilipinas took a closer look at the project's documentation and found some important caveats. WordCraft's roadmap says charts, SmartArt and embedded OLE objects are lost when a DOCX file is loaded and saved, and validation against real business documents had not yet begun. The site also noted that counting ribbon commands measures whether a feature can be invoked, not whether it actually behaves the way Word does. It listed the licenses as Apache-2.0 or MIT. Release numbers differ between the two outlets: Thurrott reported version 0.3.0, while Gadget Pilipinas cited 0.5.0.

The larger target is the subscription model itself. When Microsoft added Copilot to its consumer plans in January 2025, PCWorld reported, Microsoft 365 Personal rose from about $7 a month to $10 and Family from about $10 to $13, with 60 AI credits a month included. Existing subscribers could remain at the old price on a "Classic" plan.

And the customer base is enormous. Microsoft last reported 89 million consumer Microsoft 365 subscribers in July 2025 and then stopped publishing the metric, according to Office-Watch, which estimates the total is now about 95 million. It also reported that consumer cloud revenue rose 24 percent in the quarter ended June 30.

Tom's Hardware called Thomas's project "a targeted protest" against subscription software and said ArtCraft's Discord community is already asking for more, with a CAD clone among the most frequent requests. But it also cautioned that most of the apps are "still far from what they intend to replace."

After the Adobe release, critics dismissed the software as vibecoded "AI slop." Thomas answered on X:

My guy, I can code

In college I was building laser games on skyscrapers and cloning the luciferase-luciferin system into plants via agrobacterium-mediated transfection

AI models enable me to work as an entire company. I'm doing 4x better than Google's revenue per employee https://t.co/HE3qk7paBm pic.twitter.com/sGCkdy92QM

— e/chelon (@echelon) October 9, 2026

The revenue-per-employee comparison is Thomas's own claim, and none of the coverage cited here independently checked it.

The project's "clean-room" description also remains untested. ArtCraft says the apps are clean-room reimplementations written from public specifications and observed behavior. Besthub summarized the view of lawyer Neil Brown, who it said notes that the legal position depends on the jurisdiction and argues that an independent reimplementation made without access to the original source code may not infringe. None of the coverage cited here reports a legal challenge from Microsoft or Adobe.

None of this means Office has been replaced. By ArtCraft's own figure, WordCraft remains about 38 percent short of real feature parity, and the documentation makes clear that important functionality is still missing.

What has changed is the cost and speed of producing a plausible competitor. One engineer working with a coding model has released rough but working versions of Word, Excel and PowerPoint only days after doing the same for Adobe's creative suite - and he is aiming directly at a market where the incumbents have spent years moving customers toward recurring subscriptions.

Tyler Durden Mon, 10/12/2026 - 22:35