My Two-for-Tuesday morning train WFH reads:

• Inflation Is Stinging Bonds—With One Big Exception: Treasury inflation-protected securities are generating positive returns despite a rough bond market. Barron’s on TIPS finally doing the job they were designed to do. Worth re-reading if you’ve been underweight inflation-linked paper for the last decade. (Barron’s)

• It’s Boating Season, But Only If You Can Afford Fuel: In normal times, boaters spend their money at marinas, tackle shops and dockside restaurants, keeping local businesses buzzing. This year, they’re spending it all at the pump. (Businessweek)

• What layoffs hide about the real problem with the job market: The WaPo on a labor market where the headline layoff numbers are tame but hiring has quietly collapsed — the no-fire-no-hire economy. A more useful frame than most takes you’ll see this week. Despite high-profile cuts by companies including Meta and UPS, layoffs are about as low as they’ve been in years. (Washington Post)

• Life After Ozempic: Esquire on what happens when patients come off GLP-1s — the weight, the appetite, the relationship to food, the unfinished science. When you stop taking the miracle weight-loss drug, the cravings return—for food, yes, but also for something more. The post-prescription phase is where the real story is. (Esquire)

• AI eats the world. Benedict Evans on Tech platforms shifts: Every 10-15 years, a platform shift reshapes technology. What happens in a platform shift? Who is affected, and how much? Inside tech: new gatekeepers, new value capture. Outside tech: Is this a new tool, a new revenue model, or an existential threat? Benedict Evans’s annual deck — clear charts, no breathlessness, and the most useful single document for thinking about where AI economics actually sit right now. Required reading. (Benedict Evans)

• Fear and Loathing in Palo Alto: Washington Monthly on the Silicon Valley right’s mood circa late spring 2026 — the bravado has thinned, the lawyers have not. A useful temperature-take on a tribe whose self-image is increasingly out of sync with its own balance sheet. Theo Baker’s debut book is a film-worthy investigation of Stanford’s culture of fraud. But his disdain for the tech bros keeps him from understanding them. (Washington Monthly)

• Hating AI is good, actually: A spirited rebuttal to the soft-determinist “AI is just here” framing — useful as a counterweight even if you ultimately disagree. Pair with the WSJ “American Rebellion” piece. LinkedIn may be awash with boosters, but shunning AI is the human choice. (The Hand Basket)

• The Mercedes-AMG GT 4-Door Coupé makes a dramatic debut: If you still think EVs are low-key, quiet and a little bit vanilla, Mercedes-AMG wants to change your mind. Introducing the first all-electric car from the high-performance sub-brand (Wallpaper)

• 10,000 rulings: The courts’ overwhelming rebuke of ICE policies: A POLITICO analysis reveals judges have ruled against ICE detention practices in roughly 90 percent of cases since the agency mandated that millions of immigrants must be locked up while they face deportation proceedings. Politico tallies up the immigration courts and finds the administration has been losing — quietly, at scale, on the law. The political story and the legal story are running on different clocks. (Politico)

• Blond Ambition One hundred years of Marilyn Monroe: Monroe is famous for her mix of irrepressible sexuality and childlike innocence, but those who knew her in life found her less girlishly naive than tragic and wounded. A Bookforum essay-review on a new round of Madonna writing — what the project has been, what it cost, and what the latest biographers get wrong. Smart cultural criticism. (Book Forum)

Video of the day: The blueprint for becoming an emotionally mature adult, in 68 minutes.

Be sure to check out our Masters in Business interview this weekend with Vimal Kapur, CEO and Chairman of DJIA component Honeywell International. The firm is in the midst of dividing into three companies: Honeywell Automation, Honeywell Aerospace, and Solstice Advanced Materials. The firm has fully integrated AI as the intelligence layer in all of its automation processes and products.

 

Kevin Warsh is facing the highest yields on 10-year Treasuries on his swearing-in date of any Fed chair going back to Alan Greenspan in August 1987

Source: @lisaabramowicz1

 

Sign up for our reads-only mailing list here.

 

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

Brussels Eyes Wealth Taxes As Europe’s Fiscal Crisis Spirals

Submitted by Thomas Kolbe

A fatal fiscal dynamic has become entrenched across the European Union. In nearly every member state, public spending is accelerating at all levels — from municipalities and social insurance systems all the way up to the European Commission — while the private economy at best stagnates and its industrial core sectors visibly erode.

This dangerous economic imbalance, in which a shrinking private sector is forced to finance a continuously expanding state apparatus, is already producing fiscal consequences visible in the bond markets. Interest rates have been rising steadily for years, making debt servicing increasingly expensive, while the financing needs of public budgets continue to grow under the ruling ideology of an all-encompassing state. This widening fiscal gap is fueling political appetites for higher taxation — a destructive race among parties to squeeze taxpayers at every level has begun.

And naturally, when it comes to fleecing European taxpayers, the European Commission cannot be absent. Brussels is currently preparing its seven-year budget framework, set to exceed €2 trillion beginning in 2028.

Apollo News recently reported that the European Parliament is even demanding a further 10 percent increase in this budget ceiling. Excess, wastefulness, and a complete detachment from economic reality are driving the EU’s relentless search for new independent tax revenues.

To this end, Commission President Ursula von der Leyen commissioned the Center for Social and Economic Research (CASE) last year to produce a study examining the potential of wealth taxation in the EU — another brick laid in the rapidly expanding tax debate.

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Bluntly put, this reflects the incestuous culture of Brussels, where academic satellites traditionally align themselves with the ideological winds of their political sponsors in order to secure taxpayer-funded grants.

The study focused primarily on the collection methods and revenue shares associated with wealth taxes, capital gains taxation, and the so-called exit tax. In other words, Europe’s tax policy is now moving toward the heart of private property itself. Brussels is unpacking the toolkit of preparatory state propaganda. Terms such as “justice gap,” “redistribution,” and “social justice” appear throughout the report, alongside the usual resentment-driven rhetorical formulas designed for one purpose only: preparing the public for a future in which the fiscal arms of European governments reach ever deeper into family wealth and long-term financial planning.

The central thesis of the CASE study is that private wealth in Europe has grown disproportionately and become increasingly concentrated in the hands of a small number of households. Right from the outset, however, the state itself — with its swelling bureaucracy and expensive interventionism in climate policy, the Ukraine conflict, and welfare systems — is carefully removed from scrutiny.

Not a single critical word appears in the study about the darker side of taxing citizens’ accumulated assets. Taxation today is carried out in the spirit of subservience: the taxpayer no longer possesses any meaningful voice. Instead, a debate framed around “fairness” is intended to soften the final pockets of resistance. In the end, everything is reduced to fiscal design and public relations.

One particularly revealing sign of the EU’s fiscal direction can be found in the debate surrounding the so-called exit tax. Combined with the introduction of a digital euro and the possible integration of Switzerland into the EU’s fiscal regime, escape routes for capital would effectively be sealed off. Wealthy citizens would likely flee beforehand, pulling their capital out of the EU while they still can.

What is remarkable is that politicians, institutes, and media organizations appear incapable of drawing conclusions from real-world experience. Norway’s introduction of a wealth tax triggered an exodus of the super-rich, ultimately leading to a noticeable decline in tax revenues. Understandably, Brussels now seems eager to close the gates — and has even helped ignite a wealth-tax debate in Switzerland, though this effort will likely fail. Its climate-policy framing alone makes it highly suspect to Swiss voters.

Switzerland does, of course, already levy wealth taxes at the cantonal level. But the current debate within the EU reaches much further into the direct taxation of citizens’ existing wealth than anything Switzerland has implemented thus far.

Europe’s treatment of its productive classes reveals the deeply statist spirit that now dominates the political and media establishment. The fact that the top 10 percent of income earners in Germany already contribute roughly 55 percent of all income tax revenues is no longer politically relevant. Desperate states will pull every lever available to fill the fiscal holes left behind by the green transformation.

The CASE study also aligns strikingly — both in timing and substance — with the current German debate over abolishing income splitting for married couples, increasing inheritance taxes on business assets, and reintroducing the wealth tax.

Germany already imposes a form of exit tax under certain circumstances when companies relocate abroad. What may be missing is only the Dutch approach: the comprehensive fictitious taxation of unrealized capital gains. The Netherlands is serving as the testing ground. Such taxation would likely become the next maneuver of a bloated state apparatus that has lost control of its spending.

What we are witnessing is a political class that continues to believe in building an eco-socialist surveillance state despite economic reality, visible deindustrialization, and social decay. And like every socialist project before it, environmental statism will eventually damage its host economy so severely that the laws of economics, logic, and resource scarcity will ultimately bring it down.

* * *

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

Tyler Durden Tue, 05/26/2026 - 03:30

Finland Flourishes As Freedom Flounders In The 'Land Of The Free'

Global freedom declined for the 20th consecutive year in 2025, according to Freedom House. More than 50 countries saw political rights and civil liberties deteriorate, including the United States.

This graphic, via Visual Capitalist's Gabriel Cohen, ranks the world’s most and least free countries using Freedom House’s 2026 Freedom in the World report, which evaluates political rights and civil liberties across 195 countries and territories.

Finland topped the rankings with a perfect score of 100, followed by New Zealand, Norway, and Sweden at 99. Meanwhile, South Sudan scored 0, the lowest possible rating, highlighting the widening divide between the world’s strongest democracies and most repressive regimes.

Why Europe Dominates the Freedom Rankings

Europe accounts for most of the world’s highest-scoring countries, led by the Nordics and Western Europe. Strong electoral systems, independent courts, press freedom, and protections for civil liberties helped countries like Finland, Sweden, Germany, and the Netherlands rank near the top globally.

There are two European outliers with low scores out of 100: Belarus (7) and Russia (12). Both are run by repressive autocratic regimes that have been in power for over two decades. The two Eastern European countries feature neither press independence nor free and fair elections, and rank among the least free countries worldwide.

The below data table shows the countries with the highest freedom scores in 2025:

Outside of Europe, the world’s freest countries include New Zealand (99), Canada and Uruguay (97), and Japan (96).

Within each of these countries, robust civil society and independent journalism help keep elected officials accountable, while political transitions are handled without fear of violence.

The Decline of the U.S.

Alongside Bulgaria and Italy, the United States had one of the steepest declines in its score in 2025 among countries classified as Free. The world’s leading superpower fell to a score of 81, its lowest on record, tying South Africa and falling behind Panama (82).

Over the past two decades, the U.S. score has slipped by 12 points, driven by rising polarization and political violence. The 2025 decline was caused in part by government efforts to crack down on nonviolent expression by citizens and noncitizens alike.

The weakening of anticorruption safeguards and enforcement practices by the new U.S. presidential administration was also cited as contributing to the lower score compared to previous years.

The World’s Least Free Countries

While the U.S. remains firmly classified as “Free,” the gap between democratic and authoritarian countries remains stark. The lowest-ranked countries were concentrated across Africa, Asia, and the Middle East, where elections are restricted, opposition movements are suppressed, and civil liberties remain severely limited.

South Sudan, one of the world’s youngest countries, obtained the worst possible score of 0, followed by a tie between Sudan and Turkmenistan (both 1). In each of these countries, minority rights are under assault and political freedoms are nonexistent.

Larger countries across Africa, Asia, and the Middle East also rank poorly. Vietnam scored 20, while Egypt, Ethiopia, and the United Arab Emirates tied at 18.

Three regimes in the Americas also appear within this bottom tier of Not Free countries: Cuba (9), Nicaragua (14), and Venezuela (13).

Curious to see how other countries have changed their fortunes since last year? Check out The State of Freedom Around the World on Voronoi.

Tyler Durden Tue, 05/26/2026 - 02:45

The Digital Euro As Europe's Backdoor Capital Control System

Submitted by Thomas Kolbe

The digital euro ranks among the most ambitious projects within the political architecture of the European Union. As the Eurosystem and the EU increasingly merge into identical and integrated political spaces, it can no longer be denied that this CBDC project is primarily a geopolitical power play by Brussels. Yet the euro-CBDC — shorthand for “central bank digital currency” — remains stuck in a loop. Originally envisioned years ago as already being in the project phase, the first digital wallets are now not expected before the end of 2029. Bundesbank President Nagel pointed this out in his interview with Handelsblatt.

During the interview, Nagel emerged as an articulate advocate of a euro-CBDC, despite the fact that its introduction would inevitably hand enormous power to the European Central Bank as issuer and administrator of digital wallets. This would coincide with the dismantling of core business areas currently controlled by commercial banks. Nagel downplayed the danger of large-scale capital flight from accounts held at savings banks, Deutsche Bank, and others, arguing that planned digital wallets would be capped at €3,000. With this argument, Nagel attempts to minimize the undeniable risk that the technology could later be expanded far beyond its initial limits.

Unfortunately, the interview fails to clarify the substantive difference between the CBDC envisioned for the eurozone and the already existing stablecoins, most of which are denominated in U.S. dollars. There is a fundamental distinction between programmable digital money issued by a centralized state authority and digital currency services provided by multiple competing private-sector issuers.

A full-scale battle between systems is increasingly taking shape in the realm of digital money. On one side stand European institutions pushing for systematic centralization of power. On the other side of the Atlantic lies a model that, compared with the EU approach, resembles a return to Wild West capitalism: more deregulation, a shrinking state apparatus, and in monetary policy, a gradual return to private-sector money creation through privately issued stablecoins.

Fiat-linked digital currencies, so-called stablecoins, are currently one of the hottest trends in American finance. The largest private issuer of a dollar stablecoin is Tether, whose digital dollar has now reached a market volume of roughly $190 billion. These privately issued digital dollars represent a major innovation within blockchain technology. In particular, they enable real-time transfers, operate without banking holidays, and provide access outside the traditional SWIFT system for anyone with an internet connection.

Users essentially need nothing more than a smartphone and an installed wallet app — no traditional bank account required. Another advantage lies in potentially lower fees and, in some cases, higher yields, since providers avoid the bloated administrative structures of traditional banks. Stablecoins undoubtedly represent a major increase in individual sovereignty - at least until issuers, possibly under government pressure, decide to freeze access to users’ holdings.

The fact that the eurozone has so far neither agreed on a digital CBDC control standard nor trapped citizens inside such a digital financial prison stems from several factors. One is technological. The threat posed by quantum computing dramatically intensifies the risks involved. A centralized digital financial system such as the euro-CBDC would face massive hacking attempts and manipulation from the moment of its launch. This is the classic weakness of centralized systems: they provide attackers with one clearly defined point of attack. Moreover, the European Union and the Eurosystem together form an over-bureaucratized and fully centralized power structure that inevitably lags behind current technological standards.

For precisely this reason, decentralized financial ecosystems such as the Bitcoin network are technologically superior. Bitcoin is secured by a decentralized network of independent miners and node operators. Every participant defends the structure out of direct self-interest. With well over 100 million Bitcoin holders worldwide and tens of thousands of miners, an almost impenetrable protective wall emerges. Contrary to Nagel’s remarks in the interview, the commercial banking sector is obviously also resisting the centralization of the financial system in the hands of the ECB. The reason is simple: a full rollout of the digital euro would make the traditional banking business model — accounts, savings products, and transfer services — largely obsolete.

But the real reason there has so far been relative calm on the CBDC front inside the Eurosystem becomes obvious once one observes the speed at which global capital flees crisis zones. The introduction of a CBDC would signal that the ECB intends to build in a mechanism for capital controls, possibly in anticipation of a full-scale financial or sovereign debt crisis in the euro area. A dramatic surge in interest rates triggered by a selloff in European bonds would once again force the ECB to intervene as lender of last resort, on a scale potentially far greater than anything seen during the financial and sovereign debt crises of the past decade and a half. Such intervention would inevitably raise fundamental questions about the long-term stability of the euro itself.

That the eurozone will eventually face another debt crisis is hardly in doubt. The only uncertainty is timing — namely, when bond markets, confronted with Europe’s relentless debt binge, in which even Germany is now enthusiastically participating, will finally give the thumbs down.

* * *

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

Tyler Durden Tue, 05/26/2026 - 02:00

Globalism Seeks To Kill The Nation-State

Authored by J.B. Shurk via American Thinker,

International government threatens the whole planet.

People are beginning to understand that those who rule in their name have long been working to eliminate the nation-state.

The United Nations is not neutral ground for national governments to discuss their differences; it is a governmental construct meant to replace national governments.  The World Health Organization is not an international body meant to coordinate complex responses to global health emergencies; it is an institution vested with vast power and authority to track and regulate every human on the planet.  The Bank for International Settlements, the World Bank Group, and the International Monetary Fund don’t exist to expand free trade, open markets, and assist developing nations; they exist to centralize control over all economic transactions in the world.

The onslaught of “green new deal” laws in Canada, the United States, the United Kingdom, the European Union, Australia, and New Zealand have nothing to do with preserving the environment or “saving the planet”; they are part of a broader U.N. initiative to track every person’s so-called “carbon footprint” in order to monitor, tax, and regulate all human activity.  The U.N.’s “climate reparations” policy has nothing to do with “justice” or “science”; it exists to justify the redistribution of wealth from Western nations to non-Western nations under the guise of “international law.”

The message we have heard all our lives is loud and clear: Nations do bad things.  International organizations do good things.

The rhetorical war on “nationalism” didn’t begin because people who are proud of their nations magically became Nazis; people who are proud of their nations are called “Nazis” so that those who rule over us can demonize the nation-state.  If you go back through newspapers and scholarly essays before WWII, “nationalism” and “patriotism” are used interchangeably.  After WWII, there is an obvious linguistic break.  “Patriotism,” for the most part, survives as an acceptable civic virtue (How else can governments send men into battle if there are no patriots?).  “Nationalism,” however, becomes increasingly used through the decades as a derogatory term linked to fascism — as if the very organizing concept of a nation-state is inherently authoritarian and anti-democratic.

Thinking about this anti-nationalism campaign for more than a second reveals its silliness.  Why would a constitutional republic with representative democracy be “fascist” at the national level but “democratic” when organized internationally?  Why would the Executive leader of a nation such as Germany, France, or the United States be more “authoritarian” than the secretary-general of the U.N. or the president of the European Commission?  Why would an international governing body be considered more “democratic” than a town, region, or nation of people governing themselves?  Why should the president of the European Commission, Ursula von der Leyen, be considered Europe’s “representative leader” when the European people never voted for her to “represent” them?

The U.N. has 193 member state ambassadors representing roughly 8.3 billion people.  Why should such a minuscule parliamentary assembly be considered “democratic” or “representative” at all?  At best, it uses the veneer of “democracy” to justify imposing its authoritarian will upon all of humanity.  Whether one dictator or 193 dictators working in concert — when humanity is forced to obey the edicts of rulers, it doesn’t matter if those edicts come from a national or international body.

Natural rights and freedoms do not become more natural because 193 people in New York City say so.  God-given liberties exist despite the existence of government, not because of government.  The more people over whom a government claims jurisdiction, the less likely that any one person’s natural rights will be respected and protected.  When a citizen cannot look his “representative” in the face, his “representative” is much less concerned about infringing that citizen’s natural liberties.

International governments are no less likely to become totalitarian than national governments.  Just as Hitler’s national socialism and Mussolini’s fascism did last century, international tyranny prefers to disguise itself as something peaceful, benevolent, and for the common good.  Had Hitler successfully conquered Europe, perhaps the German Empire would have been called the European Union.  Had Hitler conquered the world, perhaps the U.N.’s headquarters would be in Berlin.  National totalitarianism becomes international totalitarianism just as easily as national mask and vaccine mandates transform into “vaccine passports” and World Health Organization mandates.

The same people who hyperventilate about President Trump’s supposed “authoritarianism” roundly applaud the authoritarianism of global institutions such as the World Health Organization.  In fact, when the president withdrew the United States from WHO on his first day back in office last year due to the international body’s mishandling of the COVID pandemic and efforts to cover up the pandemic’s origin in Wuhan, China, critics in the press accused Trump of being “scientifically reckless” and called “global cooperation” a “biological necessity.”

That’s another part of internationalism’s linguistic magic trick: The same global corporate news machine that has spent the last eighty-plus years conditioning people to understand the word “nationalism” as something evil, militant, and barbaric has simultaneously conditioned the world to see anything “international” as inherently good, peaceful, and progressive.  The “national / international” dichotomy didn’t happen by accident; it’s been shoved down our throats all our lives.  But once again, if a rational person takes a moment to consider the semantic manipulation, it is quite absurd.

If the International Monetary Fund, headquartered in Washington, D.C., were more accurately renamed the “American Monetary Fund,” would the financial institution become more suspect?  If so, then how should we view the word “international” as anything other than a verbal ruse meant to project a false message that the IMF acts on behalf of all people on the planet?  American taxpayers have principally funded the World Health Organization since its formation in 1948.  If it had been called the American Health Organization, would the press have been as upset when “authoritarian” Trump decided to stop funding it?  If not, does this not suggest that words such as “world” and “global” distort the identity and purpose of these intrusive organizations?

“Internationalism” is a Trojan Horse or at least the camel’s nose under the tent for Big Government authoritarians who wish to impose their will on the whole planet.

When “international” agents or soldiers come knocking, their mission sounds downright “humanitarian,” doesn’t it?  The United Nations has a whole Department of Peace Operations.  That department sends out military and law enforcement personnel known as “peacekeepers.”  And for decades the “peacekeepers” from the Department of Peace Operations have raped women and girls all over the world.  The “internationals” have been abusing the “nationals,” and the international United Nations and the multinational corporate news organizations have spent decades covering up all of the “internationals’” prolific raping.  International organizations dedicated to “peace” can’t be seen doing things that only “fascist” nationals do.

Big lies expose internationalism’s true intent: Internationalists are building a global empire.  This empire is authoritarian (because it demands global compliance at the expense of personal freedom) and totalitarian (because it requires complete subservience to a centralized and dictatorial global government).  There is nothing “democratic” or “representative” about this international system of governance.  It has no interest in protecting an individual’s rights and freedoms.  It has no interest in respecting a nation’s sovereignty.  It will permit both individuals and nations to be raped in the name of “global peace.”

Therefore, it makes perfect sense why the United Nations encourages mass illegal immigration into the United States and Europe.  When you are in the business of destroying nations, you do not care if murderers and rapists destroy local families.  You do not care if Islamic terrorists burn down Christian churches.  You do not care if the “newcomers” to Europe and America have pledged to conquer the West.

For globalism to win, it must first kill the nation-state.

Tyler Durden Mon, 05/25/2026 - 23:25

Healthcare Workers Dominate America's Highest-Paid Jobs

Want to earn more than $300,000 a year in America? The clearest path is still a highly specialized medical career.

This ranking of America’s highest-paying occupations uses Bureau of Labor Statistics (BLS) data to compare mean annual wages and total U.S. employment across the country’s top-paid roles.

As Visual Capitalist's Dorothy Neufeld details below, the results show how concentrated high pay is in healthcare. They also reveal another important pattern: many of America’s best-paid jobs are held by relatively small workforces, making them some of the rarest careers in the economy.

America’s Highest-Paying Jobs

The rankings below show the 30 highest-paying occupations in the U.S. based on mean annual wages, alongside total nationwide employment levels.

Why Doctors Dominate America’s Highest-Paying Jobs

Healthcare’s dominance reflects a powerful mix of high barriers to entry, limited specialist supply, and steady demand for complex medical care.

Most of the highest-paying medical specialties require more than a decade of education and residency training, limiting the pipeline of qualified professionals. At the same time, America’s aging population is increasing demand for specialists in cardiology, radiology, oncology, and surgery.

As a result, highly specialized physicians command some of the largest salaries in the economy. Adding to this, the U.S. is projected to face a shortage of more than 141,000 physicians by 2038.

America’s Highest-Paying Jobs Are Also Among Its Rarest

Many of America’s top-paying professions employ surprisingly small numbers of workers nationwide.

For example, there are only about 1,000 pediatric surgeons across the U.S., despite the profession ranking first overall in pay. Several other elite medical specialties, including prosthodontists (760) and oral surgeons (5,000), also have relatively small workforces.

This scarcity helps explain why wages remain exceptionally high. Limited supply continues to collide with growing healthcare demand and an aging population with rising rates of chronic illness.

The Highest-Paying Jobs Outside Healthcare

Outside of healthcare, only a handful of roles break into the upper tier of U.S. pay, led by aviation and executive management.

Airline pilots, copilots, and flight engineers ($280.6K) rank among the country’s highest-paid workers as aviation faces persistent pilot shortages. Meanwhile, chief executives ($262.9K), financial managers ($180.5K), and architectural and engineering managers ($175.7K) command high salaries due to their leadership responsibilities and oversight of complex operations.

Will America’s Highest-Paying Jobs Change?

Despite rapid advances in AI and automation, many of America’s highest-paying jobs remain difficult to replace.

Specialized surgeons, anesthesiologists, and pilots operate in highly regulated environments that require years of hands-on training and real-time decision-making. These barriers continue to shield many elite professions from automation pressures reshaping other parts of the workforce.

At the same time, healthcare spending is forecast to grow faster than the broader economy through 2033, helping sustain strong demand and high salaries for specialized physicians.

To learn more about this topic, check out this graphic on the best places to work in America in 2026.

Tyler Durden Mon, 05/25/2026 - 22:50

Musk: SpaceX Is Actively Seeking More AI Compute Customers, After Anthropic Deal

By Sebatsian Moss of Data Center Dynamics

SpaceX's xAI subsidiary is looking to score more data center compute lease deals, after it sold all of the capacity of Colossus I to Anthropic.

That deal will see Grok's competitor pay $1.25 billion a month over the next three years for the 300MW facility. The deal can be terminated by either party, with 90 days' notice.

"As the recently expanded partnership with Anthropic demonstrates, SpaceX is offering AI compute as a service at significant scale," CEO Elon Musk said.

"We are in discussions with other companies to do the same. "Over time, especially with orbital data centers, we expect to serve AI at extremely high scale."

In April, AI code editing startup Cursor announced that it would also be using space at xAI data centers - although SpaceX is set to acquire the business within 30 days of its IPO.

SpaceX is expected to go public on June 12, with the company looking to raise upwards of $75 billion. IPO documents reveal that xAI spent $12.7bn on AI infrastructure in 2025, and has already invested $7.7bn in the first quarter of 2026.

Alongside the first Colossus data center, xAI is developing Colossus 2. It acquired the land last March, and the data center came online in January. Despite Musk claiming it offered 1GW of capacity at launch, satellite imagery taken in January reportedly showed it had cooling equipment installed capable of managing 350MW.

The IPO document makes multiple mentions of the 1GW of data center capacity at SpaceX’s disposal, but describes it as “nameplate compute draw.” It explains this is calculated by taking “the number of GPUs installed in our data centers at the end of the period multiplied by their respective all-in power draw.

According to a chart in the IPO filing, the company’s nameplate compute draw was 1GW in March 2026, up from 300MW a year before. However, it also notes that this figure “reflects installed capacity and does not represent actual power consumption or utilization.” So while the GPUs are installed, they may not yet be powered up, suggesting the company’s actual useful compute power could be significantly less than 1GW.

How much capacity at the xAI data centers is actually reserved for Grok, the company's own generative AI effort, is unclear. The platform has seen dwindling usage, while increasing numbers of staff have left the company - including all non-Musk co-founders.

SpaceX, meanwhile, plans to launch up to one million space data center satellites in the years to come.

Tyler Durden Mon, 05/25/2026 - 22:15

First Andreessen, Now Goldman CEO Shuts Down AI Job-Apocalypse Doomerism Narrative

Amid the flood of AI doomerism, from Pope Leo XIV's Monday warning that AI and the digital transformation of the economy could unleash "new forms of slavery" and mass job losses, to Bernie Sanders and unhinged socialists calling for a halt to data centers buildouts, a move that would conveniently cede compute power to communists in Beijing, a growing and emerging chorus of dystopian futurists is now trying to frame the AI boom as an existential labor-market crisis rather than the next productivity supercycle that arrives just in time as a demographic winter unfolds.

Adding to recent comments from Netscape co-founder and Andreessen Horowitz (a16z) co-founder Marc Andreessen, who argued that AI-related job-loss fears are merely hysteria and that AI is actually arriving at the moment the nation needs it most:

"We're going to have AI and robots precisely when we actually need them [with populations shrinking] to keep the economy from actually shrinking."

...none other than Goldman Sachs CEO and occasional weekend DJ in the Hamptons, David Solomon, penned a recent opinion piece in The New York Times asserting that the AI-related "job apocalypse and mass unemployment ahead" hysteria is "overblown."

"I'm the C.E.O. of Goldman Sachs. The A.I. Job Apocalypse Is Overblown," Solomon titled the NYTimes op-ed, likely aiming for maximum media exposure with such an eye-catching headline.

Solomon's framing of the headline appears to be a direct response to growing resistance not only to AI chatbots but also to data centers nationwide, a backlash wave we pointed out many months ago as alarm bells ring loudly from the tech bro community. As AI infrastructure becomes the backbone of the next economic cycle, the anti-data-center movement is quickly gaining steam and becoming a political weapon by the doomerism community.

Solomon argues that AI will not eliminate jobs at an apocalyptic scale. Instead, he says it will allow workers to become more productive, shift to higher-value tasks, and create new roles focused on managing, implementing, validating, and regulating AI systems.

However, Solomon does acknowledge that there will be labor market disruptions:

Absolutely. This transition, like other significant moments in our history, will entail new challenges, especially as A.I. separates labor from productivity in magnitudes we haven't seen before.

He pointed out that the U.S. economy has seen this story before: it has repeatedly absorbed technological shocks, from electrification to automobiles to computers, while overall employment and living standards continued to rise.

Solomon said AI will likely follow the same pattern as previous technological shifts, eliminating some jobs while expanding others, such as the explosion in construction jobs tied to the $700 billion in capex that hyperscalers are set to deploy this year alone.

Solomon cites his economists, who recently forecast that AI could automate 25% of current work hours over the next decade, with white-collar sectors such as banking, law, accounting, software, and customer service most exposed.

Solomon said that if AI destroys jobs at an unprecedented scale, there should be a "joint effort" between the corporate world and government to help workers and institutions adapt to the new labor market.

"The U.S. economy can and will adapt to major advances in technology," he emphasized.

Solomon's comments were similar to those made earlier this year by venture capital guru Andreessen, who argued that fears of an AI-driven jobs apocalypse are overstated.

In his view, automation and robots are entering the picture at exactly the moment economies need them to offset labor shortages and prevent stagnation.

Read:

• Marc Andreessen Calls AI Job-Loss Fears 'Fake', Expects Employment Gains

• If You're Freaking Out About A Future Jobless AI Dystopia...

Elon Musk has been among the loudest and most vocal voices warning about the demographic winter consuming not only the Western world but many other countries as well. He has framed his Optimus robot as "great for Japan" because it could help offset a shrinking workforce.

Tyler Durden Mon, 05/25/2026 - 21:40

Arab States Voice Outrage Over New 'Illegal' Embassy Opening In Jerusalem

Via The Cradle

Fifteen Arab and Islamic countries condemned on Sunday the decision of the breakaway region of Somaliland to open an embassy in occupied Jerusalem. The foreign ministers of Egypt, Saudi Arabia, Qatar, Jordan, Turkiye, Pakistan, Indonesia, Djibouti, Somalia, Palestine, Oman, Sudan, Yemen, Lebanon, and Mauritania denounced the move in a joint statement on Sunday.

The countries condemned "in the strongest terms the illegal and unacceptable step taken by the so-called 'Somaliland' region in opening a purported 'embassy' in occupied Jerusalem," according to the statement.

Newly opened embassy in Jerusalem, via X

The countries issued the statement one week after Israeli President Isaac Herzog welcomed Somaliland's first-ever ambassador to Israel, Dr. Mohamed Hagi, at the President's Residence in occupied Jerusalem. "This new and important partnership between our countries will lead to a future of cooperation in a variety of fields – for the benefit of both our peoples and the entire region," Herzog stated.

Seven countries have opened embassies in Jerusalem since the US, under President Donald Trump, recognized the city as Israel's capital in 2017.

The decision sparked widespread international condemnation, given that Israeli forces illegally occupied East Jerusalem during the Six-Day War in 1967, which Palestinians call the Nakba. Since then, Israel has colonized East Jerusalem in violation of international law by expelling indigenous Palestinian Muslims and Christians and facilitating the settlement of Jewish Israelis in their place.

The 15 countries rejected any unilateral measures to entrench "an illegal reality in occupied Jerusalem or conferring legitimacy on any entities or arrangements that contravene international law and relevant United Nations resolutions."

The statement reaffirmed the fact that "East Jerusalem has been occupied Palestinian territory since 1967" and said any measures seeking to alter its legal or historical status are "null and void."

The foreign ministers also expressed full support for the unity, sovereignty, and territorial integrity of Somalia, rejecting any unilateral actions that undermine Somali sovereignty.

In April, Somalia condemned Israel's appointment of an ambassador to the breakaway region of Somaliland, calling the move a "breach" of its sovereignty and international law. "This action represents a direct breach of Somalia's sovereignty, unity, and territorial integrity," the Somalian Foreign Ministry said, adding that it "undermines the established international consensus." 

Mogadishu added that the decision violates its territorial integrity and contradicts the UN Charter and African Union principles. The ministry stressed that Somaliland “remains an integral part” of Somalia, rejecting any attempt to grant it diplomatic recognition outside federal authority.

On December 26, 2025, Israel formally recognized what it termed the Republic of Somaliland, marking a significant shift in its policy toward the Horn of Africa. The move altered the political equation along one of the world's most sensitive maritime routes.

It consolidates a four-party alignment linking Israel, India, the UAE, and Ethiopia. This emerging axis focuses on securing maritime chokepoints in the Gulf of Aden and Bab al-Mandeb, while laying the groundwork for an alternative to China's Belt and Road Initiative (BRI) in eastern Africa.

16 Arab Islamic Countries Condemn Somaliland’s Opening of Purported Embassy in Jerusalem

Doha | May 24, 2026

The Ministers of Foreign Affairs of the State of Qatar, the Arab Republic of Egypt, the Kingdom of Saudi Arabia, the Hashemite Kingdom of Jordan, the Republic of… pic.twitter.com/F7gsx4Elsf

— Ministry of Foreign Affairs - Qatar (@MofaQatar_EN) May 24, 2026

The timing followed months of escalating regional pressure, including the 12-day Israeli–Iranian war in June 2025 and the Yemeni maritime blockade targeting vessels bound for Israeli ports following the beginning of Israel's genocide of Palestinians in Gaza.

Securing these waterways became a core component of Israeli national security planning. Somaliland's geography explains its importance. Somaliland's territory overlooks one of the world's busiest maritime arteries, facilitating trade flows linking Asia, Africa, and Europe. 

Tyler Durden Mon, 05/25/2026 - 21:05

Debt Remembered And Debt Ignored

Authored by Greg Marasca via AmericanThinker.com,

Memorial Day compels Americans to confront a word we avoid: debt.

Not the financial kind that Congress pretends will magically resolve itself, but the older, heavier meaning — the kind carved into headstones at Arlington and cemeteries across the country.

It is the debt paid in full by those who gave their lives, so the rest of us could live free.

No interest rate can measure it. No budget line can contain it. It is final, irrevocable, and sacred.

Every year, we pause, as we should, to acknowledge that liberty is no accident. Its purchase price is steep. Many stood a post, walked point, climbed into a cockpit, or sailed into hostile waters so that we could enjoy the ordinary luxuries of American life: arguing about politics, grilling in the backyard, complaining about work, raising families in relative peace. The fallen paid the ultimate debt, while the rest of us live on the dividends of their courage.

There remains another debt that all Americans must face, one far less noble and far more self-inflicted: the national debt that at $39 trillion is growing faster than the economy and its current path is unsustainable with interest payments amounting to $1 trillion a year — a figure most cannot comprehend.

Unlike the solemn debt honored on Memorial Day, this one grows not from sacrifice but from avoidance, avarice and unaccountability. It is the bill we keep pushing onto future generations because those elected lack the discipline and forbearance to make the difficult choices.

The contrast is stark.

On one side are the young Americans who never hesitated when their country asked for everything. On the other, a political culture that bemoans over the smallest act of fiscal restraint. The fallen gave their lives, while Washington can’t forego a spending increase.

Memorial Day reminds us that debts must be paid.

The laws of economics will not suspend themselves out of patriotic courtesy. We borrow to fund today’s comforts while expecting tomorrow’s citizens, many of whom are not yet born, to pay the bill.

Imagine explaining this to a Marine who never made it home from Fallujah or a soldier who fell in the Korengal Valley. They understood duty in its rawest form. They lived by the credo that you don’t hand your problems over to the next guy.  You handle them.  You carry your weight.  You complete the mission.

The contrast is telling and that is the point.

Memorial Day should not be reduced to a political talking point; rather it should remind us of the standards we once held. The men and women we honor this day lived with a clarity of purpose that our national budget sorely lacks. They understood that freedom requires responsibility. They knew that choices have consequences. They accepted that service is putting the country’s needs ahead of one’s personal initiatives.

If we truly want to honor their memory, we can start by adopting even a fraction of that discipline. We can demand leaders who treat the national debt as a real threat, not a distant abstraction. We can stop pretending that borrowing without limit is a harmless national pastime. And we can remember that the freedoms secured by the fallen are weakened when the nation they died for is weighed down by obligations it cannot meet.

The debt paid by America’s fallen is unpayable, but it is not unteachable. It is written in sacrifice, in folded flags, in names etched into stone.

One debt was paid in blood. The other is being charged to our children. 

And if we forget the difference, then we have learned nothing from those who paid the first.

Tyler Durden Mon, 05/25/2026 - 20:45

China Moves To Shut Down Offshore Stock-Trading Channels Used By Mainland Investors

Authored by Arthur Zhang via The Epoch Times,

China’s securities regulator has opened enforcement actions against Futu, Tiger Brokers, and Longbridge Securities, accusing the offshore online brokerages of illegally serving mainland investors who used the platforms to trade U.S. and Hong Kong stocks.

The China Securities Regulatory Commission (CSRC) said on May 22 that it had opened investigations and issued administrative penalty pre-notification letters against Tiger Brokers (NZ) Limited, Futu Securities International (Hong Kong) Limited, Longbridge Securities (Hong Kong) Limited, and their related onshore and offshore entities.

The regulator said the firms conducted securities brokerage and margin-financing services in mainland China without approval and also “illegally” engaged in public-fund sales and futures brokerage activities.

The action was announced alongside a broader campaign by eight Chinese agencies to “comprehensively rectify” cross-border securities, futures, and fund operations.

The agencies involved are the CSRC, Ministry of Industry and Information Technology, Ministry of Public Security, People’s Bank of China, State Administration for Market Regulation, National Financial Regulatory Administration, Cyberspace Administration of China, and State Administration of Foreign Exchange.

2-Year Wind Down

The eight-agency implementation plan sets a two-year rectification period to phase out unauthorized mainland-facing services by offshore securities, futures, and fund institutions. During that period, offshore firms are barred from providing existing mainland investors with buy orders or fund-inflow services; only one-way selling and fund withdrawals are permitted. After the period ends, the firms must shut down mainland websites, trading software, and supporting servers.

The CSRC said investor property safety would not be affected by the rectification campaign and that affected overseas institutions must communicate with mainland investors and arrange account handling.

The policy effectively turns affected mainland-facing accounts into exit-only vehicles—investors can sell positions and withdraw funds, but cannot buy new purchases or add funds. It does not amount to confiscation of client assets, but it closes a private, app-based route that had allowed Chinese retail investors to trade overseas securities more directly than through Beijing-approved channels.

The implementation plan also extends beyond the brokerages themselves. It targets offshore institutions, mainland affiliates and partners, intermediaries, internet platforms, apps, and online self-media accounts that publish account-opening tutorials or other promotional materials for unauthorized cross-border trading.

Futu, Tiger Disclose Penalties

Futu Holdings, which is listed on Nasdaq, said it received a notice of investigation and an administrative penalty pre-notification letter from the CSRC and its Shenzhen bureau. The company said the regulator proposed ordering related entities to rectify or cease the activities, confiscate illegal gains, and impose fines totaling about 1.85 billion yuan, or about $271 million. The CSRC also proposed a personal fine of 1.25 million yuan, or about $183,575, against Futu founder and CEO Li Hua.

Futu said the proposed penalty remains subject to further proceedings and final determination by the CSRC. The company said it is entitled to submit statements, present defenses, and request a hearing. It also said mainland Chinese accounts accounted for about 13 percent of total funded accounts at the end of the first quarter of 2026, while business operations outside mainland China remain normal.

UP Fintech Holding, the Nasdaq-listed parent of Tiger Brokers, said in a Form 6-K exhibit that certain subsidiaries received notices from the CSRC’s Beijing Bureau on May 22. The company said the bureau accused the subsidiaries of conducting unlicensed cross-border securities business and fund and futures activities in mainland China. UP Fintech said the bureau imposed administrative penalties totaling about 308.1 million yuan (about $45.34 million) and confiscation of income totaling about 103.1 million yuan (about $15.17 million). It also said CEO and controlling person Wu Tianhua received a warning and a 1.25 million yuan penalty (about $183,965).

UP Fintech said retail client assets in mainland China under its consolidated accounts represented about 10 percent of total client assets at the end of 2025. The company said it accepts the penalty, is cooperating with regulators, and will implement required rectification measures.

The CSRC stated it intends to confiscate all “illegal gains” from Tiger, Futu, Longbridge, and related entities, but its public announcement did not disclose a combined illegal-income figure for all three firms.

The announcement triggered sharp selling in Futu and UP Fintech shares. Futu closed at $89.76, down $34.09, or 27.5 percent, after trading as low as $73.02 intraday. UP Fintech closed at $4.36, down $1.49, or 25.5 percent, after trading as low as $3.18 intraday.

Years in the Making

The May 22 enforcement action marks an escalation of a campaign that began more than three years ago. In its official Q&A, the CSRC said it began rectifying cross-border operations by offshore institutions on Dec. 30, 2022, to bar such institutions from “illegally” soliciting mainland investors and opening new accounts for them.

The latest plan expands the campaign from individual enforcement to full-chain governance. The CSRC said the new requirements cover marketing, account opening, processing trading instructions, fund transfers, internet platforms, apps, and independent content creators that guide mainland investors into unauthorized offshore accounts.

The regulator said offshore institutions and related mainland entities “violate Chinese law” if they conduct securities, futures, or fund business in mainland China without state approval, whether directly or through affiliates and partners. It also said related violations involving cybersecurity, personal information protection, anti-money laundering, and foreign-exchange rules are included in the state’s “rectification campaign.”

Tech-Linked Brokers in the Crosshairs

Futu, Tiger, and Longbridge built their appeal by offering digital brokerage platforms that made it easier for Chinese-speaking retail investors to trade U.S. and Hong Kong securities.

Futu’s founder, Li Hua, was a former Tencent employee, and Tencent has been a major shareholder of the digital brokerage firm. Tiger Brokers was founded by Wu Tianhua, a former NetEase executive, and has counted Xiaomi as a strategic investor. Longbridge is a newer online brokerage with a founding and investor background often associated with China’s internet sector, according to Chinese state media.

The official allegation by the CSRC did not frame the action as a campaign against those technology companies. Still, the cases fit a broader pattern in which Beijing has brought app-based financial activity under tighter state supervision, especially where online platforms touch securities trading, fund flows, investor data, and cross-border transactions.

Capital-Control Signal

The CSRC described the campaign as a move to protect investors, maintain financial-market order, and guide outbound investment through lawful channels. In its Q&A, the regulator said investors can use routes such as Hong Kong Stock Connect, Qualified Domestic Institutional Investor (QDII) products, and Cross-boundary Wealth Management Connect (Cross-boundary WMC) for overseas investment.

Those channels are more limited than direct app-based trading in U.S. and Hong Kong stocks. Stock Connect covers eligible Hong Kong-listed securities rather than the full U.S. market. QDII products are managed through approved institutions and quotas. Cross-boundary WMC is limited by geography, product scope, and eligibility rules.

That makes the policy more than a licensing dispute. Beijing is not banning all offshore investment by mainland residents, but it is closing a private route that made foreign securities more accessible to ordinary investors. The structure of the rule pushes capital back toward channels that regulators can monitor, limit, and adjust.

On Chinese social media, some users reacted with frustration, saying the move narrows ordinary households’ ability to diversify outside China’s domestic markets. Others doubted that money previously invested through offshore brokers could be redirected toward mainland A-shares.

There is a broader concern among retail investors that Beijing is reducing access to overseas assets while China’s domestic stock market continues to struggle with investor confidence.

Tyler Durden Mon, 05/25/2026 - 19:55

'Weeks Inside Highly Fortified Bunkers': Report Details Painfully Slow Communication Within Iran's Leadership

According to a Sunday CBS News report citing US officials, Iran's Supreme Leader Mojtaba Khamenei is still in hiding in a secret location with extremely limited communication to the outside world. Driven underground by a pervasive fear within Tehran's remaining leadership structure following relentless US and Israeli military strikes, the Supreme Leader is effectively isolated.

This information is nothing 'new' - but even as talks with the US are now little by little reportedly proceeding - and as a ceasefire has been extended by weeks - the Ayatollah is clearly not taking any chances. The CIA and Mossad have openly acknowledged that are actively looking for his hideout. But the report seeks to provide an explanation as to why Tehran's response to any specific updated draft peace deal often takes several days.

CBS detailed how the isolation is to keep Western intelligence from mapping his coordinates, which involves only being reached via a slow, archaic network of physical couriers designed to conceal his location.

The report further alleges that these heightened security measures have significantly disrupted communication lines within Iran's government, complicating active negotiations with the Trump administration and at times dragging responses to US peace proposals to a grinding halt.

But this is also to a large degree by design, to allow the different military units autonomy of command in the instance for more 'decapitation strikes' targeting governing centers in Tehran.

The end result, says CBS, is that "When the U.S. sends proposed details, the difficulty in reaching the supreme leader means there can be a long delay before the U.S. receives a response, two of the officials said."

Yet, it wasn't long ago that White House officials and mainstream pundits were insisting that the Ayatollah is not actually in charge of the country. But now assumptions have shifted back, apparently.

The report claims further:

At this point, most Iranian leaders don't see daylight, spending weeks inside highly fortified bunkers and avoiding speaking to each other unless absolutely necessary, the sources said. 

"Watching them try to figure out how to talk to each other is almost like watching a sitcom. They are completely exasperated," one official said. 

The most cautious measures are being taken by the supreme leader. 

By design, even officials at the highest levels of the Iranian government don't know where he is and have no way to contact him directly. 

One official followed with: "This is why you see people saying things like, 'The supreme leader has agreed to the framework,' or 'We're waiting to hear back on the final deal points.' Every piece of information he receives is dated and there's a lot of latency to his responses," one official said.

U.S. intelligence: Iran's Supreme Leader, Mujtaba Khamenei, is hiding in an undisclosed location with limited access to the outside world, relying on a network of couriers to send and receive messages. (CBS News)

Isn't that common sense?

— Pakistan Walli (@pakistanwalli) May 25, 2026

It has become obvious that the negotiations process has become painfully slow and confused, and so this narrative by anonymous US officials seems an effort to lay blame squarely on the Iranians, instead of Washington's own often shifting goals and conditions.

Tyler Durden Mon, 05/25/2026 - 19:20

Democrats Using Black Athletes As Pawns In Redistricting War

The Congressional Black Caucus, aligned with the NAACP, is urging black college athletes to avoid Southeastern Conference schools in Southern states as a form of economic pressure against Republican-drawn redistricting maps that eliminate majority-black congressional districts. The campaign is called "Out of Bounds,” and is essentially asking young black athletes to forfeit their best shot at a professional sports career so Democratic lawmakers can make a political statement about redistricting.

NAACP calls for black athletes to boycott college sports in south

“Across the South, Black athletes have helped build some of the most profitable college athletic programs in America, generating hundreds of millions of dollars in annual revenue,” the NAACP argues on its “Out of Bounds” campaign website. “At the same time, several southern state governments are moving to limit, reduce, weaken, or erase Black voting representation by creating new, unconstitutional voting districts.”

House Minority Leader Hakeem Jeffries framed the redistricting fights as "an unprecedented attack on black political representation,” demanding "an unprecedented response." That response, apparently, involves steering eighteen-year-old football recruits away from Alabama, Georgia, LSU, Florida, Tennessee, Texas, and Texas A&M - programs that collectively represent the most direct pipeline to the NFL in American sports. Jeffries said black lawmakers are "standing in solidarity with NAACP in its call for athletes to boycott institutions within the SEC that belong to states that have unleashed these Jim Crow-like racially oppressive tactics, which is unacceptable, unconscionable and un-American,” he continued. “And we believe that the silence of these institutions is complicity, and we will not stand for it.” 

For a talented black athlete from anywhere in the country, an SEC scholarship is frequently the fastest and most visible route to a professional contract, financial security and generational wealth. Yet, Jeffries and CBC Chair Yvette Clarke are asking those athletes to set that aside. 

"The Congressional Black Caucus cannot support legislation benefiting major athletic institutions that continue to remain silent while black voting rights and black political power are being systematically dismantled across the South,” Clarke said.

The legislation in question is the SCORE Act, a bipartisan proposal backed by the NCAA that would establish national standards for compensating college athletes. The bill had been scheduled for a House floor vote before Republican leaders were forced to postpone it after CBC members signaled opposition. 

In other words, a bill designed to ensure college athletes get paid was delayed, in part, because black Democratic lawmakers blocked it to protest that Southern public universities are not taking a stand against redistricting. 

According to Jeffries, these universities "should feel compelled to speak up. Not because of their athletic programs; because it's the right thing to do." Clarke argued that "institutions that profit from black talent and black communities have a responsibility to stand with those communities when their fundamental rights are under attack," extending that logic beyond athletics to "corporate America or any other institution within American civil society."

Clarke warned that the effort is "just the beginning" and could spread beyond state universities, adding, "Let this serve as an example: Silence from our institutions in moments of injustice carries consequences."

The CBC and NAACP can package this campaign in the language of “justice” and “solidarity,” but strip away the rhetoric, and the message is brutally simple: Democratic politicians want young black athletes to torpedo their own futures to wage a political pressure campaign over congressional maps. Democrats may be angry over Republican redistricting efforts, but they are asking young black athletes to walk away from the fastest route to the NFL, millions of dollars, and generational wealth over a political battle that has nothing to do with them or SEC football programs.

Tyler Durden Mon, 05/25/2026 - 18:10

Corrections Vs Bears: How The Fed Rewired The Market

Authored by Lance Roberts via RealInvestmentAdvice.com,

After three decades of watching market cycles play out from both sides of the trade, I’ve come to a simple conclusion: Wall Street’s love of simple rules is one of the most dangerous aspects of investing. When stocks fall 10%, it’s just a “correction.” However, if they decline 20%, it’s a “bear market.” Simple, clean, repeatable, and printed on every financial media graphic from here to Tokyo. The problem is that the definitions of a correction and bear market have not been updated since Alan Shaw developed them at Smith Barney in the 1960s. Moreover, the market those definitions were designed to describe no longer exists.

Currently, the S&P 500 index is roughly 83% above its long-term trend line, with the Shiller CAPE (cyclically adjusted price-to-earnings ratio) hovering near 40. That valuation level was only exceeded once in the history of American financial markets. The Fed’s balance sheet, still at $6.7 trillion, is more than eight times its pre-2008 level. Under these conditions, the old bear-market definition no longer measures what it was built to measure. A 20% decline from here doesn’t signal either a regime or price trend change. In other words, it would be only a “correction” within an ongoing bullish trend. That understanding is key to today’s discussion.

The Current Bear Market Definition Is Arbitrary

As noted, the “20% rule” traces to Alan Shaw, a technical analyst at Smith Barney in the mid-20th century. His framework was simple. Anything up to 10% was noise. A decline of 10% to 20% was a correction. Anything beyond 20% was a bear market. Shaw’s colleague Louise Yamada, who took over Smith Barney’s technical analysis practice in 2000, later described its staying power with characteristic directness: “It’s just so easy and simple to remember.”

Shaw’s framework made sense in its time. Markets in those decades lived much closer to a gravitational center of fair value. When prices fell by 20%, they often broke the market’s longer-term trend. A decline of that magnitude carried real information. It told you that selling pressure had overwhelmed buying, the market’s price trend had reversed, and the market’s direction of travel had changed from up to down. That’s precisely what the bear market definition was supposed to capture. A change in regime, not just a number.

The question is: after a 17-year-long bull market that stretched prices well beyond long-term trends, is Mr. Shaw’s measure still valid?

To answer that question, let’s clarify the premise.

• A bull market is when the market price is trending higher over a long-term period.
• A bear market is when the previous advance breaks, and prices begin to trend lower.

The chart below provides a visual of the distinction. When you look at price “trends,” the difference becomes both apparent and useful.

The distinction is essential.

• “Corrections” generally occur over short time frames, do not break the prevailing trend in prices, and are quickly resolved by markets reversing to new highs.
• “Bear Markets” tend to be longer-term affairs in which prices grind sideways or lower over several months as valuations revert.

What a Real Bear Market Actually Looks Like

The two genuine bear markets of this century make the definition’s original intent clear. Between March 2000 and October 2002, the S&P 500 lost nearly 49% of its value. It didn’t recover to its prior peak until 2007. Seven years lost. The bullish trend didn’t pause; it broke, and investors who sat through it got years of negative real returns with no policy rescue from Washington or the Fed.

The 2008 crisis was worse. From October 2007 to March 2009, the S&P fell about 57%. It didn’t return to its prior highs until early 2013. The price structure didn’t just dip below an arbitrary threshold. It collapsed, stayed down for years, and required one of the most aggressive monetary policy responses in the Fed’s history to eventually stabilize. That’s a bear market in the original sense of the word. A sustained, structural reversal of the prior bullish trend.

Now compare that to 2022. The S&P peaked on January 3 of that year, fell 25.4% to its October trough, and technically satisfied every condition of a bear market under the standard definition. By July 2023, every point of that decline had been recovered. By early 2024, the index was making new all-time highs. The 2022 decline was painful, but it did not reverse the underlying trend. Yes, prices fell, but found support well above any reasonable measure of long-term fair value, and resumed their climb. Putting the 2022 episode in the same category as 2000 or 2008 doesn’t just mislead investors; it tells the story exactly backward.

How the Fed Rewired the Market

To understand why the bear market definition needs to be revised, you have to reckon honestly with what the Federal Reserve has done to the market’s structural foundation. Before the 2008 financial crisis, the Fed’s balance sheet sat at roughly $800 billion. Modest. Stable. Largely inconsequential to equity prices on any given day.

Then came the crisis. The Fed launched three rounds of quantitative easing between 2009 and 2014, pushing its balance sheet to roughly $4.5 trillion. It tried to normalize beginning in 2018, then COVID hit. In two years, the balance sheet more than doubled again, from $4.3 trillion to nearly $9 trillion. As of April, 2026, it still sits at $6.7 trillion, even after years of several years of quantitative tightening.

That liquidity didn’t evaporate. It repriced every financial asset upward. It suppressed yields, starved investors of income alternatives, and effectively forced capital into equities regardless of underlying valuation. The market didn’t reach these levels because corporate America suddenly became dramatically more profitable. It reached them because the price of money was artificially held low for over a decade, which changed the math in every valuation model investors use. The result is a market structure with no historical precedent for its distance from the long-term trend.

What the P/Es Actually Tell You

The more bearish crowd consistently points to the Shiller CAPE ratio as a measure of impending doom. However, investors should understand that the CAPE ratio measures the market’s current price relative to 10 years of inflation-adjusted earnings. At 40, investors are currently paying 40 times that earnings figure for every dollar of S&P 500 exposure. That’s a lot by any historical measure, considering the historical median is 16x. The bear’s argument, and rightly so, is that the market has traded above 40 on the CAPE ratio only once before in its history, and that was at the dot-com peak. We know how that ended.

But this is important, as we have discussed many times, the problem is that valuation measures are just that – a measure of current valuation. More importantly, when valuations are excessive, it is a better measure of “investor psychology” and the manifestation of the “greater fool theory.”

Notably, valuation models are not, and were never meant to be, “market timing indicators.” There are many articles penned suggesting that if a measure of valuation (P/E, P/S, P/B, etc.) reaches some specific level, it means that:

1. The market is about to crash, and
2. Investors should be in 100% cash.

Such is incorrect.

What valuations provide is a reasonable estimate of long-term investment returns. It is logical that if you overpay for a stream of future cash flows today, your future return will be low. We can see this evidence by comparing the 10-year total return of a $1000 investment in the stock market to Shiller’s CAPE ratio, as noted above.

However, here’s where it gets interesting. Even if you don’t use the long-term median as your target, the math of mean reversion is sobering at any reasonable level. At the time of this writing, we can map each scenario from the S&P close of 7,399 (May 10, 2026), and the picture becomes clear.

Notice what that table shows. A 20% decline from current levels leaves the market at roughly 32x cyclically adjusted earnings. That’s twice the historical median. The market doesn’t even begin to approach a valuation floor that has historically supported the start of a new secular bull market until you’re down 50% to 60% from here.

That’s not a prediction; that’s arithmetic, and the difference between a correction and a bear market in today’s financial markets.

The recovery math compounds the problem. A 30% loss requires a 43% gain just to break even, before accounting for the time lost while recovering. A 50% loss demands a full 100% return to get back to where you started. For investors in or near retirement, that’s not a temporary setback. That’s a structural threat to financial security.

“A 20% decline from a market that’s 83% above trend doesn’t reach trend. It barely dents the excess. The old bear market definition was built for a different world, and that world no longer exists.”

Two Halves To A Full Cycle

I wrote about this in August 2020, right after the COVID crash had recovered, and everyone was declaring it the shortest bear market in history. My argument then was the same one I’m making now: March 2020 was a correction, not a bear market, because it never broke the long-term bullish price trend that started in 2009. The same is true of 2022. And of the Iran-related correction we saw in early 2026. Those were all pressure releases within an ongoing bull market. None of them completed the cycle.

Because that’s the part Wall Street glosses over. Every bull market is only half of a full market cycle. The second half, the bear, is when the excesses accumulated during the upswing, the overvaluation, the leverage, the speculative positioning, get wrung out through a sustained decline that resets prices back toward fundamental value. That process has played out after every major bull market in the historical record. From the 1929 collapse to the 1970s grind, the dot-com bust, and the financial crisis. None of them was optional; they were just the structural corrections of prior excesses.

The bull market that started at S&P 683 in March 2009 is now 17 years old. It’s the longest on record and has been sustained by:

• Three rounds of QE,
• A zero-interest rate policy for most of a decade,
• $5 trillion in pandemic stimulus, and
• A generational AI investment cycle that’s still in its early innings.

All of that is real. But none of it changes the underlying valuation math, and eventually, prices will reflect fundamentals. They always do. The problem for investors, however, isn’t whether a real bear market will happen; it’s when, and more practically, whether your portfolio is built to survive the transition.

As noted, the 2020 and 2022 declines share one critical feature: both recovered before prices touched the long-term trend line shown above. They were corrections in an ongoing bullish trend, and both required a significant Fed or fiscal response to stabilize. A genuine bear market, one that resets valuations toward historical norms, would require neither a quick recovery nor a policy rescue. It would require a decline large enough to reach that trend line.

The bottom line is that the 20% threshold isn’t wrong. It’s just not calibrated for a market that’s trading 83% above its long-term trend. In a world where markets lived near fair value, a 20% decline carried information about the trend. Today, it carries sentiment information. That’s a meaningful difference, and it changes how you should think about both potential corrections and portfolio risk.

Stop anchoring your risk budget to the 20% number.

The relevant question isn’t “how far has this fallen?” It’s “how far is this from where prices would need to be for the bull market trend to genuinely reverse?”

Right now, that gap is enormous. A real bear market, in the structural sense, would likely need to be a 30% to 50% decline, and possibly deeper, before prices would reach the kind of valuation support that has historically ended bear markets and started new secular bulls.

That doesn’t mean panic. It means position sizing, risk management, and stop-loss disciplines need to account for a potential drawdown far larger than the 20% threshold Wall Street treats as the danger zone.

We continue to suggest that investors maintain appropriate hedges, keep risk allocations proportional to their time horizon and income needs, and resist the “buy the dip” impulse when the dip doesn’t actually bring you closer to value.

Make no mistake, the trend is still up. The AI investment cycle is real, earnings are growing, and the tape remains technically constructive at current levels. But the distance between current prices and genuine long-term fair value is wider today than at any point outside the dot-com peak. That’s not a reason to be out of the market. It is a reason to know exactly what you own, why you own it, and what your exit plan looks like if the second half of this cycle finally arrives.

Tyler Durden Mon, 05/25/2026 - 15:15

Pope Sounds Alarm On AI "Slavery" While Church Aligns With Lefty Anthropic

Pope Leo XIV published his first encyclical on Monday, entitled Magnifica Humanitas (The Magnificence of the Human Person).

The roughly 42,300-word declaration, issued as a papal encyclical, warned, "The fight against new forms of slavery is a decisive test for the ethical discernment of AI and digital transformation."

"If technology promises emancipation, yet produces new forms of global subordination, it stands in contradiction to the fundamental principle of human dignity," the pontiff explained in the encyclical, while urging governments to regulate the private companies driving AI advances and warning that the pursuit of profit cannot justify mass job losses.

The pontiff called for retraining and protections for working-class folks threatened by AI-related job loss, stronger education to help students understand AI risks, and safeguards against violent, sexualized, or fake AI-generated content targeting children.

His strongest warning came on the military use of AI. Leo said AI risks making life-and-death decisions faster, more impersonal, and easier to justify, especially as cyberattacks, influence campaigns, AI kill chains, and hybrid warfare blur the line between defense and aggression.

At the event earlier today, where the pontiff unveiled the encyclical, attendees included prominent cardinals and theologians, as well as Christopher Olah, a co-founder of the left-leaning AI startup Anthropic, who leads its interpretability team.

The pope said the church and Anthropic will cooperate to "find a path for humanity in the age of artificial intelligence" ... 

Pope Leo XIV, during the presentation of Magnifica Humanitas — the first papal encyclical in history dedicated to artificial intelligence — stated that the Church and Anthropic will cooperate to “find a path for humanity in the age of artificial intelligence.

The discussion… pic.twitter.com/28zA5xeHsE

— NEXTA (@nexta_tv) May 25, 2026

To note, encyclicals are among the highest forms of teaching from a pope to the Catholic Church's 1.4 billion members worldwide.

The full text can be viewed here.

Odd that the pope bashes AI but aligns with lefty Anthropic ... 

How much Anthropic does the Vatican Bank own? 

Tyler Durden Mon, 05/25/2026 - 14:40

Everyone Talks About The Cost Of Gasoline... Soon Everyone Will Be Talking About The Cost Of Food

Authored by Michael Snyder via The Economic Collapse Blog. 

For most people, the price of gasoline is the most obvious consequence of the war in the Middle East. As I write this article, the average price of a gallon of gasoline in the United States is $4.56. Of course, in some parts of the country, consumers are paying much more than that. This is a big story, and the truth is that gasoline prices are going to go even higher in the months ahead.

But if you think that the price of gasoline is bad, just wait until you see what eventually happens to food prices. The price of diesel has been rising even faster than the price of regular gasoline, and fertilizer prices have been absolutely skyrocketing. Those costs will get passed along to the rest of us. It is just a matter of time. Meanwhile, our farmers are dealing with drought conditions that are unprecedented, and now a “Super El Niño” is coming.

What all of this means is that food prices will rise to very painful levels.

So even though everyone is complaining about rising gasoline prices at the moment, one prominent economist is warning that “the next story is food”…

The cost of food in the U.S. appears poised to rise sharply alongside oil prices, as war-related supply disruptions put pressure on the companies and farmers who keep the country’s shelves stocked.

“The big story right now is oil,” economist Justin Wolfers told MS NOW on Tuesday. “The next story is food.”

Oil prices have risen over 50 percent since the conflict began on February 28, pushing gas prices to a nationwide average of over $4.50 for the first time since 2022.

Can you imagine what would happen if food prices were to rise another 50 percent from current levels?

Over the past year, many of the most common items that Americans purchase at the grocery store have already become much more expensive…

When compared to the same time last year, fruits and vegetables have seen some of the biggest price hikes. Tomatoes are 40% more expensive now than they were this time last year. Bad growing weather, tariffs, and rising fuel prices have all contributed to the huge change in tomato prices, reports the New York Times.

Coffee, another imported product, is 19% more expensive than it was last spring.

You’re also likely seeing inflated prices at the butcher counter. Meat is up 9% overall, but beef has grown even more expensive. Ground beef is about 15% pricier, beef roasts are 18% more, and steak is up 16%.

We can blame the war with Iran for the recent price hikes that we have been experiencing, because the war has made diesel much more expensive.

And diesel is used to transport most of what we eat…

What’s contributing to the price spikes? Fuel prices have soared while the Iran war prevents cargo ships from passing through the Strait of Hormuz, a vital corridor for global oil supplies. Diesel fuel powers fishing boats, tractors and the trucks that ship 83% of U.S. agricultural products.

Just as you’re paying more at the pump, so are truckers who transport goods all around the country. Some vendors and suppliers are adding fuel surcharges to make up for the increased cost of transporting and delivering their goods.

In addition, fertilizer prices have gone absolutely haywire, and those costs will be passed along to us once harvest season arrives.

The solution to this crisis would be for the Strait of Hormuz to reopen.

But Iran isn’t willing to do that.

Instead, Iran intends to make the status quo in the Strait of Hormuz permanent…

Iran and Oman are actively discussing a permanent security mechanism for the Strait of Hormuz. Iran is pushing to institutionalize and normalize a transit fee or toll on commercial shipping vessels navigating the narrow waterway. According to an Iranian diplomatic envoy, the proposed system is designed to secure the long-term positioning of Iran and Oman as the primary regulators of the strait, effectively transforming a temporary leverage point from the recent military conflict into a permanent sovereign right.

To formalize its grip, Iran’s newly established Persian Gulf Straits Authority began applying conditional rules and hefty transit tolls, in some cases exceeding one million dollars per vessel, while granting selective exemptions to friendly nations like Russia or China. By engaging Oman, which shares territorial jurisdiction over the Strait, Iran is seeking to build a coalition that validates these tolls under the guise of funding localized maritime security.

The US maintains an opposing view on the matter, viewing the permanent toll as a non-negotiable barrier to reaching a sustainable peace deal. Under the United Nations Convention on the Law of the Sea, international straits are governed by transit passage protocols that guarantee the uninterrupted flow of global commercial shipping, a principle the US insists must be restored without conditions.

This is one of the reasons why there is not going to be an agreement to end the war.

U.S. Secretary of State Marco Rubio just warned that what Iran is attempting to do with the Strait of Hormuz “will make a diplomatic deal impossible”…

“A toll collection system in the Strait of Hormuz will make a diplomatic deal impossible.”

“We are very disappointed with NATO allies, we will discuss the issue of troop deployment at the upcoming meeting.”

If the Strait of Hormuz remains closed, a global inflation crisis is guaranteed.

And on top of everything else, now a “Super El Niño” is rapidly approaching.

We are being warned that it could potentially be the most powerful “Super El Niño” in recorded history…

Scientists have warned that an imminent ‘super El Niño’ could be even more powerful than a previous event which caused over 50 million deaths.

The 1877 El Niño was one of the most severe climate events in recorded history, triggering a global humanitarian disaster known as The Great Famine.

Climate reconstructions suggest water temperatures in a key region of the Pacific Ocean rose by 2.7°C (4.86°F), which caused disruption to rainfall patterns around the world.

If the Super El Niño of 1877-1878 killed 50 million people when the global population was just a fraction of what it is today, what would an even more powerful Super El Niño do?

An associate professor at Washington State University is telling us that “multiyear droughts similar to those in the 1870s could happen again”…

Estimates indicate the resulting scarcity of food and disease outbreaks killed up to four per cent of the Earth’s population at the time.

That would be the equivalent of at least 250 million people if it happened today.

Now, forecasts suggest water temperatures could potentially exceed 3°C (5.4°F) above average later this year – making the upcoming super El Niño even more powerful than the one nearly 150 years ago.

‘Simultaneous multiyear droughts similar to those in the 1870s could happen again,’ Deepti Singh, associate professor at Washington State University, told the Washington Post.

Worldwide food production was already going to be way down this year due to the global fertilizer crisis.

Now an immensely powerful “Super El Niño” is being added to the equation.

What do you think that all of this is going to do to food prices?

Needless to say, the answer is obvious.

We are in far more trouble than most people realize, but for now, most of the population just continues to party.

Michael’s new book, entitled “10 Prophetic Events That Are Coming Next,” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Mon, 05/25/2026 - 14:05

Trump Tells Arab States Joining Abraham Accords Should Be 'Mandatory' - Throws Open Door For Iran In Grand Deal

President Trump is still trying to play the role of the globe's ultimate deal-maker via Truth Social, using a mix of mandatory diplomacy and ultimate economic carrots, issuing a lengthy missive on Iran talks and the Abraham Accords on Monday morning.

He introduced the post by stating that negotiations with Tehran are "proceeding nicely" before dropping a provocative diplomatic bombshell: a demand that a big list of major Middle Eastern nations immediately sign onto the Abraham Accords as a prerequisite for any broader peace framework.

The most unexpected aspect to the post laid out that if Tehran plays ball with Washington, Trump is dangling the prospect of the Islamic Republic itself joining the regional coalition, which it must be remembered hinges on 'normalization' with Israel.

"I stated that, after all the work done by the United States to try and pull this very complex puzzle together, it should be mandatory that all of these Countries, at a minimum, simultaneously, sign onto the Abraham Accords," Trump wrote Monday, referencing a Saturday phone call with Arab leaders.

Trump detailed further:

Those Countries discussed are Saudi Arabia, The United Arab Emirates (already a Member!), Qatar, Pakistan, Türkiye, Egypt, Jordan, and Bahrain (already a Member!). It may be possible that one or two have a reason for not doing so, and that will be accepted, but most should be ready, willing, and able to make this Settlement with Iran a far more Historic Event than it would, otherwise, be. The Abraham Accords have proven to be, for the Countries involved (The United Arab Emirates, Bahrain, Morocco, Sudan, and Kazakhstan), a Financial, Economic, and Social BOOM, even during this time of Conflict and War, with the current Members never even suggesting leaving, or taking so much as even a pause.

The above was coupled with the following ultimatum: "It should start with the immediate signing by Saudi Arabia and Qatar, and everybody else should follow suit. If they don’t, they should not be part of this Deal in that it shows bad intention."

And then he dropped the significant twist related to Tehran, in claiming that several of the regional leaders he spoke with "would be honored, as soon as our Document is signed, to have the Islamic Republic of Iran as part of the Abraham Accords. Wow, now that would be something special!"

Inviting Iran to join the Abraham Accords as a part of a broader final deal framework has resulted in a lot of head-scratching, given that just weeks ago Trump repeatedly threatened to bomb the country 'back to the stone age' and effectively end 'civilization' there. US rhetoric has been filled with scorn for Iran, and yet it is now being asked to join a grand US-backed alliance.

Trump is his very long message issued a final directive in the following:

"Therefore, I am mandatorily requesting that all Countries immediately sign the Abraham Accords, and that, if Iran signs its Agreement with me, as President of the United States of America, it would be an Honor to have them also be part of this unparalleled World Coalition. The Middle East would be United, Powerful, and Economically Strong, like perhaps no other area, anywhere in the World! By copy of this TRUTH, I am asking my Representatives to begin, and successfully complete, the process of signing these Countries into the already Historic Abraham Accords."

Meanwhile, look who's fully on board and has returned to singing Trump's praises (after expressing concern over a 'bad' Iran deal in the works)...

President Trump’s most recent proposal requiring expansion of the Abraham Accords as part of a negotiated settlement to the Iran conflict is simply brilliant and would result in the most significant change in the Middle East in thousands of years.

With Saudi Arabia and others…

— Lindsey Graham (@LindseyGrahamSC) May 25, 2026

Whether Trump can single-handedly force countries as far apart in their foreign policies as Saudi Arabia, Pakistan, and Turkey... or especially Iran, into a binding alignment with Tel Aviv remains a massive question mark (to put it mildly), or rather would be incredible and highly unrealistic. 

But with the threat of "shooting, but bigger and stronger than ever before" serving as the baseline, the White House has put regional powers officially on notice - in Trump's logic at least.

Tyler Durden Mon, 05/25/2026 - 13:30

It Was Never About The Climate

Authored by Silvio Canto Jr via AmericanThinker.com,

Here is a question for your long weekend:

Why haven’t you ever seen a climate change protest before the Chinese embassy anywhere?

Why is it always the US or capitalism messing up the environment?

Why don’t they show up at all when China is a bigger threat to clean air than any US city?

The answer is obvious, but I’ll say it.

It was never about the climate but rather capitalism or the US.

Check this out:

In 2024, climate activists in New York City protested alongside anti-Israel protesters at a rally headlined “Climate Justice Means Free Palestine.”

Last year, climate change celebrity icon Greta Thunberg tried to storm Israel by sea on a flotilla protesting the country’s war in Gaza, yelling “Free! Free! Palestine!” when she was refused entry.

And, last week, activists from CodePink, a far-left feminist activist group that has received funds from an American expatriate, Neville Roy Singham, living in Shanghai, took a break from their rallies supporting the Islamic Republic of Iran and the Cuba Communist Party to circulate a video on Instagram, attacking a Utah data center project backed by investor Kevin O’Leary.

That’s a busy bunch protesting against the West.

Maybe someone should tell them that the clean air in Cuba is due to a collapse of industrial activity.

Or we can always remind them of how they treat gays in Palestine or women in general.

As the article points out, these marches were always about hating the West and what we stand for.

So don’t be fooled by the slogans or some well-meaning people showing up to protest.

The root of all of this is hatred of the West and our individual freedoms.

Tyler Durden Mon, 05/25/2026 - 12:55

Huawei Touts Sanctions-Busting Chip Breakthrough, SMIC Shares Erupt

Semiconductor Manufacturing International soared to a record high in China after Huawei unveiled what it described as a breakthrough pathway for advanced semiconductor production at the IEEE ISCAS conference, without relying on the West's most advanced chipmaking equipment.

Huawei's semiconductor chief, He Tingbo, told the audience earlier today that the company has developed a "New Semiconductor Path in Practice" that replaces traditional Moore's Law-style geometric scaling with time scaling and reducing signal propagation delay across devices, circuits, chips, and systems.

Huawei's press release stated:

In her speech, she presented the Tau (τ) Scaling Law, a new principle for guiding the future development of the semiconductor industry. This law proposes replacing geometric scaling with time (τ) scaling as a new guiding principle for the evolution of both semiconductors and electronic systems. Based on this principle, innovative technologies such as LogicFolding can be used to continuously compress signal propagation delay and steadily improve transistor density, which will drive the ongoing evolution of semiconductors and electronic systems.

Tingbo said Huawei plans to make 1.4-nanometer chips by 2031 using its own "LogicFolding" architecture. TSMC has said it expects to begin mass production of 1.4nm chips in 2028, leaving Huawei about five years behind the global leader, Taiwan Semiconductor Manufacturing.

Tingbo claims LogicFolding can boost chip performance and will be used in upcoming Kirin mobile chips expected this fall.

This comes as U.S. sanctions on advanced chipmaking equipment and high-end semiconductors have been aimed at slowing China's push into cutting-edge chip production.

Shares of Chinese chip stocks surged, with SMIC jumping more than 18% and Hua Hong Semiconductor hitting daily limits.

The view is that this is a potential breakthrough in China's effort to bypass U.S.-led export controls and reduce dependence on Western semiconductor equipment.

We suspect someone in the Trump team will likely weigh in on this development in the coming days, if not weeks.

Tyler Durden Mon, 05/25/2026 - 11:10



 

 

The transcript from this week’s MiB: Vimal Kapur, Chairman and CEO of Honeywell, is below.

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

~~~

Barry Ritholtz with Vimal Kapur, CEO & Chairman, Honeywell
Episode aired May 21, 2026 — Bloomberg Radio

 

Barry Ritholtz  [00:00:16] This week on the podcast. Yet another extra special guest, Vimal Kapur is CEO and chairman of Honeywell. He’s worked there for the past 37 years and not only has he been overseeing a fascinating transition, Honeywell is in the midst of breaking itself up into three distinct parts. I thought this conversation was fascinating and I think you will also, with no further ado, my conversation with Honeywell’s Vimal. Kapur.

Vimal Kapur  [00:00:49] Pleasure Barry. Thanks for hosting me.

Barry Ritholtz  [00:00:50] Well, my pleasure to have you here. It’s not very often we get a member of the Dow Industrials as part of our guests. Let, let’s start out a little bit with your background. You received a degree in electronics engineering from the Thapar Institute of Engineering in India. What was the original career plan?

Vimal Kapur  [00:01:13] Original career plan was to work and get a job. That was a career plan? Yeah, that was a career plan. And then, you know, first I did two small stints of a job and then I joined Honeywell in early 89. It was a new company in India, so set up. So I ended up joining a startup ’cause it was set up as a joint venture between two large companies. There’s a large Indian company called Tata Group. They jointly

Barry Ritholtz  [00:01:38] Automobiles, everything. Tata

Vimal Kapur  [00:01:39] Is enormous now, everything. Correct. So they invested in this venture. It’s a big Honeywell with a lot of tech. And then they create this joint venture in which you show up and it’s basically creating something from scratch. We had no revenue when I started. Our revenue was 0.00. So you learn how to build a company, how you scale, you wear multiple hats like in a startup, you don’t have a very defined role. So I think that early experience of high flexibility and you know, growing through a very high base in a short period of time, that laid some very strong foundations. You know,

Barry Ritholtz  [00:02:14] For me, so in the United States out in Silicon Valley, we notice a lot of these startups where they end up certainly isn’t where they began. There’s a usually a pivot or three or four. What was the original idea in the joint venture and what did that eventually turn into?

Vimal Kapur  [00:02:32] They turned into what it was planned for because Honeywell did not have its automation business footprint in India at that time. So you’re talking 40 years back. So they partnered with a local company to scale the business. They already had those products and capabilities in us and they were trying to get into Asia and they formed partnerships in few countries, India being one of them. And the strategy was to penetrate the local market, develop the local capability, and we were able to do that quite well. So it’s, it’s not that we have to change our product strategy, but we have to run, learn as we go through. We had intense local competition. How do you beat that? How do we create our own, you know, our own revenue stream there. So it was a very successful story. So,

Barry Ritholtz  [00:03:14] So you come up through the operating side, not so much the, you know, Harvard Business School, Davos theory side. How much of an advantage has that been as your career clicked through all these different divisions?

Vimal Kapur  [00:03:29] I mean, I think it’s a advantage to, in a way, to work in a practical business because you have to deal with actual problems which the business deal with. And having worked in different businesses gave me an opportunity to deal with a different customer situation, different end markets, operational issue, commercial issue, product development, issue, supply chain. So I would say, I mean, there’s no replacement of formal education. One, I’m not suggesting that having a higher degrees is a disadvantage, but I would say that it is equal amount of advantage to get practical experience. And I was benefiting from variety of experiences I got in my long career in Honeywell. And

Barry Ritholtz  [00:04:08] You ran three very different businesses before becoming CEO, process solutions, building technologies, performance materials. Tell us, I mean those names seem sort of ambiguous, right? Tell us a little bit about what each of those three divisions did. Yeah,

Vimal Kapur  [00:04:26] So process, solution business is, you know, it provides automation system in the energy sector. So energy sector, think about it, refining, petrochemical, plants, other oil and gas facilities, pipeline terminals, even I would say facilities like, which may paper metals and mining. So these facilities are very complex in terms of their operating procedures and if they’re not automated, it’s nearly impossible to run them. So this business provides a sophisticated automation system to these large companies. So think about Exxon and Shell and BP as kind of a typical customer or Aramco in Middle East and ADNOC. So this serving these customer, this business was very global or is very global. Even today the business still is very successful. And I became CEO in 2014 of this business. And oil downturn happened within six months. How I becoming the leader of the business. So you learn through tough experiences. Oil price was from whatever, 140, $150 to like a big nose dive. And we did a lot of work in the downturn. Learned a lot. But primarily your question, this business is all about sophisticated automation in complex facilities. And then I moved to the building automation business where we still do automation, but now in this case buildings of different type hospitals, airports, schools, university campuses, data centers. And there the business model was very different. Now you serve multiple building through variety of channel partners across the world. And so our strength comes through product innovation. Our strength comes through channel management. Very different business model compared to what I did in, you know, in my in my process automation days and,

Barry Ritholtz  [00:06:22] And then

Vimal Kapur  [00:06:23] Performance material, performance material and technology. Very interesting business, they build technology, they build energy infrastructure. So if you wanna build a, if you are a refiner, you buy crude, which we all hear a lot about today due to, you know, ongoing Iran conflict. You don’t sell crude, you sell product, you sell gasoline, you sell diesel, you sell jet fuel. So they have options to make multiple products. And as the input changes or the market needs changes, they need to decide what are the options they have to build different offering from their perspective. This business provides technology to energy company to build energy infrastructure ’cause it’s a molecule transformation, converting one molecule to another molecule that’s a heavy technology involved behind it. So performance material and technology provides technology to the customer to build tech, you know, energy infrastructure. So very high technology or research oriented business. You have a lot of chemical engineers who are gonna invent the next best technology and you provide their technology to some very large companies. And that was fascinating to lead that business to see that cycle elimination and work in that business. So yeah, very diverse experiences in variety of sectors, different business models, which I’m benefiting today because now I have experience of dealing with different markets and different situations. And that practical experience helps you a lot as you really get into your CEO job.

Barry Ritholtz  [00:07:56] So in 2022 you were named chief operating officer, we were just coming out of the pandemic. What was that environment like? How did you take your experience at these three prior divisions where you were either president or president and CEO, how, how did that affect running operations?

Vimal Kapur  [00:08:16] I mean, I think at that time the biggest challenge that time actually was the chip shortages and how do we really redesign our products because chips are simply not available. So we really had to learn how do we redesign our products in a much shorter period of time. So think about if we design a product in one year, we had to do that in two months because there’s no other option if we don’t do that, we can’t have an alternative source of the supply and we can’t our product. So I used a lot of experiences on dealing with such different scenario in mild jobs and we were able to successfully, you know, deal with that. That was also a job. I also got exposure to the businesses of Honeywell, which I hadn’t done before. Aerospace being the biggest one. So that got added into my responsibility. So there was a lot of learning there on how that industry works, which is totally different from everything else I had done.

Barry Ritholtz  [00:09:11] Is there a throughput through materials, processes, technologies and aerospace? Or are these all completely different animals,

Vimal Kapur  [00:09:20] Different animals in the sense of the end markets they serve? Right, there are some commonality of the business models and you know, there are, there are, there’s a common denominator, but there are differences which really led me to think about whether we are good to be one company or multiple companies when I started as a CEO and part of it was the differences between them, but part of it was opportunities which is ahead of us that how these businesses independently could shape or scale much differently versus when we are together, which, which led us to do a lot of work to think about optionality and pros and cons of each option and which led us to make a decision that we are better off to split into three companies

Barry Ritholtz  [00:10:04] And we’re gonna spend some time delving into those three companies and the thinking behind it. Before we get to that, I wanted to ask you a couple of more general questions about the firm. You’ve been there so long since, since the 1980s. I’m curious, how has the culture of Honeywell changed? It’s almost 40 years, three and a half decades. Is it still essentially the same company or has everything cha like so many other companies? Yeah, I,

Vimal Kapur  [00:10:38] It evolved a lot. I would say, you know, we, there was a big change movement in early 2000 when Honeywell and AlliedSignal merged together.

Barry Ritholtz  [00:10:47] I recall.

Vimal Kapur  [00:10:48] Yep. So little bit of fun fact, AlliedSignal acquired Honeywell and changed its name to Honeywell, which doesn’t happen. The acquirer keeps name because they figured Honeywell brand was so powerful, it was more impactful. So they changed their own name. So that was a big moment, your question on cultural assimilation of two large companies, it was kind of merger of equals and it did go through its own motion of ups and downs. And that’s when Dave Cote came in as chairman and CEO of Honeywell. And Dave did a great job to rebuild the Honeywell culture, which was much more one company mindset. We are not two companies, we are one company. We are gonna put work towards one stock, one Honeywell mindset, put a lot of operational culture in the organization. So that was one phase of, you know, under, under his leadership. Then my predecessor Darius Adamczyk, he became CEO in 2017. He further enhanced our operational excellence skill. He invested a lot of effort to build more digital backbone of the companies, simplifying Honeywell in terms of internal systems we have, Darius was very passionate about digital on how to mine data and create more capability for our customers. So he created a culture of more operational excellence, more operational rigor, while Dave was much more focused on one Honeywell mindset, culture integration, not multiple companies. And as my tenure comes in over the last now two plus years, we are now pivoting from the more growth oriented company. And the reason that’s important is that over a period of time, our margin rates have grown up and we were sub 10% margin company in 2005, 2006, last date was 23%. So our earnings growth is gonna come more from the top line growth versus margin expansion. Not that we want to mar do margin expansion, but we can’t get from another 15%. There’s no headroom. So growth culture is important, which means we have to be more externally focused now. We need to understand our markets, need to understand our customers, what’s changing, need to understand our competition. So our company, even though name preserves itself as a heritage and, but it has been constantly evolving itself and that’s one of the reason this company has survived hundred in 20 years because it has courage to reinvent itself versus being inward looking and always saying that, okay, we are what we are and we are not gonna change.

Barry Ritholtz  [00:13:16] Hmm. Really, really interesting. So I used to hear people talk about automation pretty regularly as just the process of moving more and more things to machines. We kind of hear people using the phrase artificial intelligence and AI the same way kind of bluntly. I’m curious from the Honeywell perspective when it comes to automation and ai, what are the customers buying? Is it productivity gains? Is it safety improvements, is it cheaper labor or a substitute for labor? What, what is the key selling point for your customers? So

Vimal Kapur  [00:13:55] I would say the, we have to go back to where the automation industry started from to better appreciate how will AI impact automation offerings or automation products. Go back to mid seventies when this industry got created somewhere in mid 75 timeframe when computing was invented, chips were invented. There came the need to say the word has a lot of these expensive assets. Those assets are now running very efficiently. So can we move from the older technologies, which were kind of World War I and World War II era to more modern digital technologies. And the way automation system was created was that you sense a set of properties and how a particular equipment or a machine or a processor is running and then you have a software program running in a computer which is going to make sure that it gets back to the desired condition, what it wants it to be. So it’s a logic based predefined system. And the assumption was most of the time this will work in a normal situation when exception occur, human will take a call. So automation systems were always designed with a human in the loop. And human was supposed to take care of change in input condition, change in output conditions, maintain the equipment, take care of maintenance requirement down the line. Now you fast forward 50 years before AI and data science came in, the people who are running these equipment or automation system or different facilities in different environment, think of a pharma manufacturing facility or a data center. They acquired a knowledge on exceptions which were occurring in those operating conditions. But when they retire or they move on, their knowledge went along with them. So when the next set of people came in, they kind of have the same learning cycle. Maybe some of it was captured in some documents, some manuals, but not a lot. So what AI is solving for is our systems have no intelligence layer on top of the core automation layer so that when the next human being comes in, they’re not starting from scratch, they have an advantage of all the learning over the last 25 years all built in. So they get to say, when this condition occurred, nine out of 10 times this was done. It always worked. So you as a human being can say, okay, I think I will choose this. Logic makes, so humans still needs to make a decision. So I think it’s a changing the human and making them more capable at the heart of it. And the reason it becomes even more compelling now is the shortage of skills which are happening in the industrial sector for performing these kind of tasks. So I would say it’s a perfect convergence of the situation that more capability is coming into our system because of availability of data science. And at the same time situation requires this capability to be there because less people are available to do this work and that’s gonna create more capability in automation system. So automation system remains, intelligence layer is on top of it. So it makes a automation system better in terms of what it can do by preserving its capability.

Barry Ritholtz  [00:17:10] Coming up we continue our conversation with Vimal Kapur, CEO of Honeywell discussing turning Honeywell into three standalone companies. I’m Barry Ritholtz, you are listening to Masters in Business on Bloomberg Radio. I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Vimal Kapur. He is CEO and chairman of Honeywell International. He’s been with the firm for 37 years. Honeywell is a highly regarded automation and industrial company. So let’s start out with plans to break the firm up. You have three distinct entities, Honeywell Automation, Honeywell Aerospace, and then Solstice Advanced Materials. So let, let’s talk about that split that sounds fairly natural breakup based on industry. Tell us a little bit about the thinking behind that.

Vimal Kapur  [00:18:26] The thinking behind that was when I started as a CEO, my incoming thesis was that we have to simplify this company. It’s performed extremely well, great return to shareholder, great service to our customer, but what will we do for the next 25 to 30 years? Are we set up for that? And my thesis was that we need to simplify this into few things where we have a scale. But I started the job in middle of 23 as a CEO of the company. Two things happened in the year of 23, which is good to kind of reflect back just three years back. That was the first year when aerospace cycle really became very strong. It was the year one where everybody said, oh, this industry is growing a lot, let’s pay more attention to it. And this was also the first year when something called AI was talked, right? So if we were sitting here three years back, we wouldn’t be talking ai. So it’s that recent phenomena. So the question we had to really ask ourself that if we have to simplify as a company and these two external drivers are occurring simultaneously, a huge demand in our largest business, which is aerospace automation, which is core to Honeywell, is going to probably redefine itself with ai. Should we do it as one company or should we do it as a, in a different construct? And that question get into a problem solving by early 24 to say, let’s look at all the scenarios, what’s possibilities, what others are doing. And as we did the work over 2024, we got more and more conviction. It’s better to separate automation and aerospace into two separate companies. But we ended up making three decisions because specialty chemical is extremely good business, which neither fitted in any one of these two. And we said it’s compelling to also spin that off as a separate company. So rather than, you know, two said, we ended up becoming three. So they became a standalone business in October of last year, doing extremely well since we spun it off now for six months. Very proud of the management team and the board, which is running this company. Aerospace will become a standalone company in about six to eight weeks from now. Six weeks actually as we speak today. 29 June is a date, and date is formed. We quite committed to that and it’s gonna be leader in segment in aerospace and KO will be a pay automation company, which will be probably one of the largest, if not the largest automation company in the world.

Barry Ritholtz  [00:20:51] Hmm. So advanced materials, does that include building technologies? And

Vimal Kapur  [00:20:57] It’s a pure play chemicals business, just

Barry Ritholtz  [00:20:59] Straight up

Vimal Kapur  [00:20:59] Chemical chemicals business. They make refrigerant, which goes into your car, which goes into your home. They have some other technologies which are related to chemicals that business is doing extremely well as a standalone company. The automation, which you mentioned building automation or automation of industrial facilities, that’s part of the remaining Honeywell, which is Honeywell Automation. Now we will not be called Honeywell Automation. We are using as, just as a equal descriptor on what the business will be. We will reimagine our name as we go by in a couple of weeks from now and we’ll reveal that name what it should be. But for sake of simplicity, the chemicals business, an aerospace business and an automation business and,

Barry Ritholtz  [00:21:39] And performance materials and technology is,

Vimal Kapur  [00:21:42] So part of it became into advanced material, advanced material solstice and then part of it is retained within Honeywell. So it’s split into kind of two.

Barry Ritholtz  [00:21:51] ’cause this is really, everybody thinks of these very broadly, but there are some really narrow specific use cases for different correct groups. So I was trying to figure out what would align with what.

Vimal Kapur  [00:22:05] So think about automation business serves three large end markets. All types of buildings, all types of energy facilities and all types of industrial facilities. That’s what we have kept in the automation. And we also are conscious that we should not make automation business serving so many segments that it’s becomes confusing again, right? So we wanna narrow down to a few very large and impactful segments. This market size is about $200 billion. We will be just shy of 20 billion of revenue. So we have a lot of runway to think about creatively what more we can do, how do we grow more. So we are not shortage of runway. Secularly automation is a naturally high growth, you know, segment because it’s something which is so basic to existence of an industrial facility or on an asset. And then when you add the AI story coming on top of it’s gonna have increasingly more growth, momentum. So all sent, all things being said. Yeah, it’s very well positioned for a compelling future.

Barry Ritholtz  [00:23:05] And what does the aerospace group do? Not, unlike ge you’re not making aircraft engines,

Vimal Kapur  [00:23:11] Right? So we do make aircraft engine for the business jet. So more mid-size,

Barry Ritholtz  [00:23:15] The smaller engines,

Vimal Kapur  [00:23:16] Smaller engine, the business jet engines we make, we don’t make the big engines, but we are a systems company. We make different component from the nose to tail of the plane. So our components are right in the cockpit. Our components, we make radars, we make navigation system, we make brakes for the plane, we make environmental controls in the plane. So we are a systems company, we make engines, we make apus. So our, our approach is system designed for a new platform. So every platform comes in and it could be a commercial plan, could be a business, it could be a defense platform. We will pitch in different components and systems of Honeywell. Customers will select many of them, some of them then that will become part of that c you know, that fleet for decades and decades. So it’s a multi-product business, not constrained to one particular product line. And the business model is more powerful because it’s a systems approach and not a component approach. So you’re right in the heart of the systems, you understand how the whole mechanics work and really add more value for our customers.

Barry Ritholtz  [00:24:23] So over the past, let’s call it 10 years, there have been a number of activist investors like Elliot management that, not just Honeywell, but lots and lots of other large conglomerates, they often agitate for share buybacks or increased dividends or sometimes just break the company into pieces. You seem to have landed pretty much in a, in a similar space as some of these activists. First, were they at all influential in your thinking or was this something that, hey, these are such different businesses, there’s no longer scale advantages of having them under one roof?

Vimal Kapur  [00:25:04] I would say the situation in our case was a bit unique because we started doing work to investigate our future optionality early 2024 and did a lot of work and actually even announced the separation of chemicals business in October. Elliot wrote a letter which was in public domain and I got to see it at the same time. And every everybody else saw it to say we should further split aerospace and rest of Honeywell too. That was their argument. There’s a more value to be created. The good news was that we already had done the work and we were convinced that’s the right thing to do, but we had not announced anything. So we treated them as another shareholder who has a point of view and we have to articulate our strategy. So there was strong convergence on the thinking and I think we worked with them very collaboratively on, you know, path forward. And I would say that there’s a lot being said on activist shareholder, but my experience is that they are, they are like any other shareholder who have a logical argument. If you have a counterpoint, you should support this with the facts and data or if you support their point, then you have to execute it. And in that case it just becomes much more of not what to do but how to do it. So our conversation with Elliot, like any other shareholder was this is a situation, here are the paths, this is how we are thinking about it. And we benefited from their expertise in capital markets, how the shareholders will react. And definitely that helped us to shape our decision in terms of, in a certain way, which was very constructive.

Barry Ritholtz  [00:26:38] Hmm, really, really interesting. So we seem to go through these long phases where conglomerates kind of become in style. They become favored. You oversaw $14 billion in m and a, which sounds like a lot of money, but we know really isn’t, you know, that’s not a, that’s not a mega buying spray. And for a long, for the longest time it seemed like there was a financial advantage to being a conglomerate. At what point does that structure stop being an advantage? What does it, what does being part throwing all these different pieces under one roof, what does that prevent the company from doing?

Vimal Kapur  [00:27:21] I think every business model has an era. So I think we have to go back to what created this era of conglomerate or larger companies. The, it really started from the, when the word was started becoming more globalized, after 2000, China came into WTO, the word became more global and there was much more global trade, which became the norm on how companies were growing. So all US companies started growing globally, but at the same time they were able to drive a lot of productivity by taking manufacturing into Asia. A lot of, you know, manpower, productivity by doing work in different virtual way with a lot of IT skills coming in. So there was a case to make bigger companies bigger because they had the unique know-how to drive a lot of productivity and scale at a global scale because they were already present there. And that cycle persisted for almost 15 years till the time that value was captured. And that value capture became generally known. Therefore the question started asking to say is creating this complex company worth it or simplification or a sector focus is a better way to do it. So I think there was a reason that proposition really worked well and created a lot of value. Take a case of Honeywell, our shareholder value creation from a time of 2000 to 2000 17, 18, 1 of the best in class and the entire s and p. So it’s not that anything was wrong, we created tremendous shareholder value. But now this point of saturation comes in and then it really brings you to the point of specialization if the markets have scale and you can preserve scale while you’re a specialist. That’s best of the both words. And that’s what we are, we are doing now to create a scale aerospace company, a scale automation company. We are still very global. We still have very mature processes, but at the same time we are focused on singular segment. So I guess like in everything else you learn through cycles and this cycle is all about having the mix of scale and specialization. This will persist until something else comes in now where there’s a case to do something else and I feel good about where we are in our position and this is gonna create much more shareholder value.

Barry Ritholtz  [00:29:36] So 20 years before you started talking about breaking into three pieces, your fellow Dow component, general Electric went through the same process, arguably with not a whole lot of success, they started out fairly richly valued, there wasn’t a whole lot of room to grow. And I’m curious, when you’re thinking about breaking into three, are you looking at other companies like General Electric and saying what can we learn from what they did right, what they got wrong, what, what missteps they made? I

Vimal Kapur  [00:30:11] Think the situation for each company is very different because separation cannot create value alone by itself. You have to be convicted that the standalone asset has enough growth, potential and invest and asset base which is gonna grow, which is gonna create value. So I think comparing example you gave versus Honeywell is absolutely very different portfolio. Apples

Barry Ritholtz  [00:30:34] And oranges,

Vimal Kapur  [00:30:34] Very, very different. I mean, so I would say that our drivers were more around what I talked about, our stock price were more static. We were more, we did not destroy any shareholder value. So our question was how do we create more shareholder value with external factors coming in? Growth of aerospace, growth of AI is that inflection point for us to make a different decision. So we did it more from a point of strength versus we have some crisis coming in. So sometime you use your point of strength to make the right decisions and we did it fast and we did it right. I think every other company we came from a different circumstances, but the decision on the outward looked very similar. They looked like they all did the same thing, but they all came from very different backgrounds and you know, different set of assets. When, when we started looking at it, some people believed that we got influenced by success of ge. I want to remind that GE success came post our decision. That was a process which was occurring. So yeah, you have, that’s a data point to say they’re also doing it. But some of the success we have observed some outstanding work by the GE leadership team that really started happening 24, 25 timeframe. We were far along the way in our own analysis by that time. So I think those are kind parallel things happening. So there’s no one thing you can attribute to say that this thing influenced it. It’s a combination of the reason which all come together and that’s what really brings us to where we are today.

Barry Ritholtz  [00:32:05] I like this phrase in your thesis of the current transition from automation to autonomy with artificial intelligence as the dividing line. How far along that process are we as a country are the industrial sector and Honeywell.

Vimal Kapur  [00:32:27] So let’s say that we as a country have an advantage of being the leader in the space of cloud and data science and companies like Honeywell has responsibility to take the knowhow which the tech sector is creating, be it Microsoft, be it Google, be it Nvidia and all the, you know, very capable tech companies. How do we bring that capability into our sector? Because our customer is not gonna go and they’re not looking to buy a cloud capability or they’re not looking to buy a AI LLM, they wanna solve a problem, they wanna run a business, they wanna run an operation, they wanna have more uptime, they wanna have more, you know, profitability. So our job is to take our system to what I mentioned to you before and add this intelligence layer and what this intelligence layer is all about, taking capability from the tech companies. Take large language models from the likes of Google and Nvidia, use the cloud power which is there from Amazon and Microsoft, but really build a purpose-built offering from an industrial sector. And as we are doing that, we are able to create the agentic models for our customers and that’s what they buy from us. The underlying plumbing, what we have, they don’t wanna know it, they don’t wanna know how this is built, say, so you’re automating this piece of my work. That’s great so I’m gonna get more productivity for that, how much I should pay you for it, right? So I would say we are in the state that this is no more a hypothesis. We are in the, not in the early innings, but we are in the stage of deployment of these capabilities across different customer base. The why it is not taken up at scale is because our customers have to go through a significant change management in their organization. ’cause fundamentally the roles of people are changing. Some roles require skills which are less important today and some more new skills are required and they can’t do that overnight just because I created a new set of technology, they have to absorb it, they have to ingest it. But we have some fabulous examples on customer using in scale in different sectors like university systems, quick service restaurants, people are using some of our technologies at a very large scale in refineries, et cetera. So I would say that if I’m sitting with you it 12 months back, I would’ve said very modest deployment sitting today, I would say I’m very excited on what opportunity we see a year from now. I would argue that the penetration will go up, substantially up because it’s a real economic value creation from what we are really profiting and we as a country are leading because we have the core components of this technology and now we have to, you know, take this capability across the world and our customers excited. They really like what we are doing.

Barry Ritholtz  [00:35:16] Earlier you mentioned restaurant automation. What does Honeywell do for either fast food service or casual dining?

Vimal Kapur  [00:35:26] So think about it. I mean when you look at a small fast food dining restaurant, there’s not much automation in that. But it consumes energy for sure. I mean let’s take a typical McDonald’s restaurant as just as an example. There’s a kitchen there, there’s a fryer, there’s a refrigeration. It’s just keeping a lot of products there. There’s of course lights going on. These assets were never thought as a way to improve energy efficiencies by companies like us. We say we should automate a large hospital. It’s massive. There’s a lot of opportunity there, a large building. These assets were never paid attention by us because there was no technology available. But when the cloud technology came in, we are able to connect these assets flawlessly, you know, in a matter of hours. And then you’re able to use a lot of AI based rule set to understand what should be the energy consumption actual versus what it is today. And give that tools to the owner to say, you know, an example, we connected a quick service chain in uk, I think something like 500 plus of their restaurants into a single operating system and they’re observing 30 to 40% energy reduction. Wow. Like anything else, the good old management principle, what you inspect is what you get. Once these were thinking running off my own, nobody paid attention even though their desire to do something, there was no mechanism. So we created an easy mechanism to make this available to the customer. So all of a sudden they’re able to generate a lot more productivity without adding too much of cost. And that’s a part of the new tools which is coming in, which was not possible. And that gives me a lot of excitement that this is gonna be much more level of, you know, productivity efficiency, which is less talked about. You know, whenever there’s AI dialogue, it’s about jobs, it’s gonna cut jobs. Nobody talks about economic value creation. It is doing a real value for our customer base, making people more productive. That’s the story of the industrial side, which is probably requires more, more amplification.

Barry Ritholtz  [00:37:26] So what’s the Peter Drucker quote? You can’t manage what you can’t measure. So forget 500 restaurants. What is Starbucks? 30,000, McDonald’s 40,000.

Vimal Kapur  [00:37:36] This applies to all of these kind of assets and many people have done this work. So it’s not that we have created some new invention. Some of them have done this kind of discovery, but this effort was not very standardized. It’s like a custom made thing somebody will do because you are a big company, you can afford it. But when you do it a large scale, there are hundreds of these chains, there are hundreds of retail stores. We’re also doing similar work, one of the big retail store chains, very similar example. So these distributed assets are becoming a way of capturing value at one end of the equation. On the other end of the equation, when you have retirees coming and our customers are worried about knowledge going out of the door, they’re looking at a mechanism of knowledge capture so they can perform their task. That’s also penetrating very rapidly. So scenarios are different. Some scenarios are looking at, I never paid attention and now I can do it. Some are saying I have less people do something about it and but the capability is fundamentally the same, it’s the same capability which solves both the problem

Barry Ritholtz  [00:38:39] Coming up. We continue our conversation with Vimal Kapur, CEO and Chairman of Honeywell discussing the state of automated technology today. I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio. I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Vimal Kapur. He is CEO and chairman at Honeywell. The company he has worked at for the past 37 years since starting there as an engineer. So I’m curious as to how some technologies seem to just take forever to find their way into the real world. You know, if you travel around the world, I remember the first time I saw one of the point of sale handheld units in a restaurant in Europe, I don’t know, maybe it was 15 years ago. And I was astonished, wait, I don’t have to request a check. They come then they have to give ’em the key, the card, they go away like we’ll take a check. They come by. It’s, it seems to have taken a decade to make its way here. What are some of the impediments to some of this, some of the cutting edge technologies that’s obviously using a bunch of tech that already existed. Is this a problem getting adaptation even though it was clearly more productive, more efficient, faster turn of tables? Like I was astonished how long it took. So I for the United States to implement That’s

Vimal Kapur  [00:40:26] Fair. I think there’s a scenario in your example because it’s a technology displacement of some old method versus a more new method. But the reason I believe more bullish about it is that we are solving a known problem. And the known problem is word has less people to do a lot of work around skilled labor in the industrial world. That’s a real problem. So our solution is not trying to find a problem, we are finding we are giving a solution to a known problem. Adoption rates are lower because of the change management issue. But this is a change management of the order of 18 months, 24 months, 30 months. Not a decade. Not a decade, right. So I remain very optimistic given my, you know, experience in these sectors. The adoption rates here are gonna be much more quicker because the problem is real. We are not inventing the problem. This problem exists for a, and by the way, this problem is everywhere in the world. This is not a US problem. Only skilled labor, skilled labor. Europe has more population shrinkage than us go to Japan and Korea, they have the same problem. China, China as well. China has population shrinkage, right? So this is a universal issue. This is not invented here. Now we get excited on the job displacement happening with robots and humanoids. That’s a small portion of a manufacturing industry that probably is also displacing some tasks which humans are not willing to do. Like lifting boxes, right? Yeah. I mean okay it’s not very interesting. But then there are other jobs with other sectors which we address where a physical AI or intelligence layer is gonna create a tremendous amount of economic value. So

Barry Ritholtz  [00:42:05] I keep hearing people compare that intelligence layer of artificial intelligence to the internet. I’m wondering, and you seem very bullish and excited about everything AI can do, is there a better comparison? Is the industrial revolution a better framework for thinking about the impact of AI over the next 10, 50, a hundred years? I think the

Vimal Kapur  [00:42:31] AI impact will be different in each sector. And I think if we make it too broad brush, we are losing the bigger picture. But when we are making it specific to a segment, then you’re being more precise to say in context of the end markets we serve the industrial sector, I talked about examples there. It’s all about the skill shortage issue, which is very different from if we are using AI for better search engine, if I may, using AI for, you know, making a summary of our talk, which somebody can do in, that’s a very different use case. And one can argue is it gonna add productivity or not or is it gonna take away jobs? That’s a different scenario from simply not having people to do work. Very different scenario. And I think that makes our case more compelling. The adoption rates are driven by a near real, real need versus we are trying to create a need which is unknown and that’s not being talked a lot more, a lot more dialogue is around job displacement. But those are more in the jobs which could be automated like finance function or HR function. Maybe to a certain degree it’s true, but not to the point. My personal view is that it’s gonna have the amount of impact which is being talked about.

Barry Ritholtz  [00:43:43] So let’s talk about some of the challenges of this technology layer and some of the black hats out there. When Mythos came out, I would imagine a company like Honeywell set up and took notice the idea of AI taking over industrial controllers, power water, air conditioning, all that stuff has to be thought of as a genuine threat. Nobody wants rogue thermostats or what have you. How do you look at the threat from a, a powerful entity like Mythos and how much of an arms race are we in to harden all of our, you know, soft underbelly?

Vimal Kapur  [00:44:27] So I think we have to appreciate the fact that where we are deploying ai, it is substantially different from what we are generally talking about in broader public domain. If you think of applying AI in an industrial system, let’s take a case of a hospital and I want to apply AI into automation system to make it more efficient. The data of that is not in public domain. The data is in Honeywell system or it’s one of our competitors system. So you cannot go to internet and train anything ’cause there’s nothing to train on. So that makes data friction as a big problem in industrial sector, which in a way becomes a protection layer for us. But that doesn’t

Barry Ritholtz  [00:45:07] Mean, so the friction becomes a protection layer, but

Vimal Kapur  [00:45:09] It doesn’t mean we should not do anything about it, right? It’s to say, oh, I’m protected. It means we should take it seriously to think of potential threats coming in because if the data friction is removed, which is hard to do, but it humans are very intelligent. So we have worked very hard to remove the data friction and also use our domain knowledge because interestingly you cannot solve a horizontal problem in industrial domain. What I mean by that is you do not have a software application like a CRM system or an HR system. The problems of each sectors are very different. If you’re a refinery, you’re trying to produce more jet fuel and more diesel. If you are a life sensors manufacturing facility, you’re trying to produce drug with minimal quality giveaway. But if you’re a data center, you want more uptime, your problems are so different. So we can’t create a magic AI application and sell to everybody. We have to be purposeful that where do we use our data and what problem we solve, which only come from years of experience. So those two really become in a way a constraint for a generic company to come in because the data friction and lack of understanding of domain, which means companies like us, which possess both have to solve this problem. And that’s why we are very bullish about it, to say we are gonna do it. We are gonna take all the capabilities from tech companies and build new set of capabilities to take our industry from a pure play automation to more towards autonomy. And autonomy doesn’t mean humans will disappear, humans will become more empowered, human will become more capable. And to the extent there’s some skill shortages, it’ll address that point.

Barry Ritholtz  [00:46:48] So let’s talk a little bit about how tumultuous the past 12 months have been in terms of geopolitics. We not only have the war in the Ukraine, but now in Iran we had the on again off again on again and most recently off again tariffs. How does this affect how a company like Honeywell thinks about reshoring and bringing manufacturing back to the United States thinks about supply chain issues? How do you plan in such a tumultuous environment? Well,

Vimal Kapur  [00:47:21] It’s definitely a challenge for companies to have more stability is what companies want. So I would say that companies like us have very mature processes to deal with it. So every time this issue occurs, we have some sort of disturbance for, depends, four weeks, eight weeks, 20 weeks, who knows depending on the situation. So we have learned how to deal with it, but it doesn’t come without a cost. You lose some growth in that window, you may have to incur extra costs like it happened in case of tariff because when tariff got announced, we have no choice but to pay it. Right? Right. Now whether we can recover it or not as a subsequent decision,

Barry Ritholtz  [00:47:57] Are you one of the many companies that have filed litigation to get, get refunds?

Vimal Kapur  [00:48:01] We did not file any litigation.

Barry Ritholtz  [00:48:03] How big of a hit was

Vimal Kapur  [00:48:05] Tax. It was not big for us. We were mostly down to the second part of your question. We have been doing manufacturing local for local for multiple years. So we made for us in US made for Europe in Europe, made for China. In China. So we don’t move a lot of stuff around. However, what we cannot control is the global nature of the components we buy. Right? If I have

Barry Ritholtz  [00:48:26] To buy everything in the supply chain and raw materials. Correct.

Vimal Kapur  [00:48:29] Because we can’t make everything. So if it, if a component is made in Korea, like batteries, we have to buy it from there. And if a component is made in China or somewhere else, we have to buy it from there. So that impact is certainly not under our coverage because we don’t have an endless capacity to invest in everything. But our core manufacturing, we have 150 factories, you know, and they’re well dis the world distributed around the world and they’re well distributed across the world. I mean, so we are so we don’t have this foundational challenge of reshoring, but we certainly have to deal with changing environment in which we have to think about more local supply based development aligned to what the expectations are at this point of time. Huh.

Barry Ritholtz  [00:49:15] So we’ve noticed that defense budgets really around the world, not just here in the United States, ha have been rising and there certainly has been fairly robust demand for aerospace. There’s a big upgrade cycle just kind of starting. A lot of the fleets are pretty old. How do you look at this in terms of risk and opportunity? How are you thinking about defense and aerospace?

Vimal Kapur  [00:49:38] The defense is a big opportunity for our aerospace business. That’s about 40% of the aerospace business. Wow. So it’s certainly the current changes in geopolitical environment and government spending more money is only positive. So it’s gonna become a even more growth driver for the business compared to what it had. So when we started this thesis two and a half years back, we did not predict this level of demand in the defense. But now that’s really a reality. Whether it’s in us, whether it’s some of our US allies, there’s a lot more growth opportunity across the board for different products and services we provide.

Barry Ritholtz  [00:50:14] And then there’s been some debate about the future of technology and industry. China seems to be running away in a couple of areas like energy transition and robotics. From where you sit, is the lead gonna pass back and forth or is there a clear winner and that’s a potential problem for the United States, both strategically and economically? I think

Vimal Kapur  [00:50:40] We have to look at what’s, look ahead, what’s this trying to look back and be, you know, skeptical about it. I will look ahead the problems, which the word HA is in ahead of us. We clearly know the US lead in ai. So how do we protect the lead? We clearly have a lead in quantum, which is one of the businesses we own that. How do we really keep that scale?

Barry Ritholtz  [00:51:01] You do, I didn’t realize what, what does Honeywell do on the quantum space? So

Vimal Kapur  [00:51:05] We own a business called Quantum in which Honeywell has a majority stake. We spun it off a separate company in 2021.

Barry Ritholtz  [00:51:11] Oh, okay. All

Vimal Kapur  [00:51:12] Right. So it’s not, it’s Honeywell investments in that company versus it’s not part of Honeywell.

Barry Ritholtz  [00:51:17] I recall, yeah, I crawl that way back when. That’s right. Really 2021. Really fascinating.

Vimal Kapur  [00:51:22] Correct. So there are technologies in which us have an advantage, us have to rebuild its supply base for some of the critical sectors like semiconductor, like pharmaceutical, which are mission critical. And I think that’s underway. But we need to have patients that those things take years to happen. There’s not a switch to say, right, we wanna do it. And those things show up, they can take 5, 7, 10 years. Hmm. So I think it’s heading in the right direction. We as a country has all the capabilities. We have the capital, we have the knowhow, but we have to refurbish some of our skills, which we lost over a couple of years in few portions of industrial sector. But let’s not forget, we have very, very capable companies which created the same sector all over the world, right? So those have not gone away.

Barry Ritholtz  [00:52:06] So reassuring is not as challenging as a lot of people make out. It is

Vimal Kapur  [00:52:10] More thoughtful in terms of which, how do you prioritize all things being equals Reassuring is the right thing to do, but my personal view is we should pick up the top five and say, okay, here are the five we wanna go. Really go after and make it successful. ’cause try to do everything is gonna be just extremely difficult in order of prioritization.

Barry Ritholtz  [00:52:28] So final question before I get to our, our speed round. What do you think when, when it comes to automation and artificial intelligence, what do you think business people and investors for that matter really are misunderstanding? What, what little nugget that you’ve experienced would give them a little more insight into what the future looks like? I think

Vimal Kapur  [00:52:49] The point we discussed earlier that the automation gets heavily enabled by AI and really create the intelligence layer and that opportunity to create sales is being underestimated. I think this opportunity is real because of the skill shortage, because of the knowledge gap, which has I got created over a period of time. So I truly believe that’s something which needs more, more conversation and more emphasis.

Barry Ritholtz  [00:53:15] So. So I only have you for another three minutes, so let me click through these questions really quickly. Starting with, tell us about your mentors who helped shape your career.

Vimal Kapur  [00:53:26] My early managers, I mean, I was lucky to have some very good managers who taught me different things, you know, not to be fearful about whom you’re talking to. How do you think about value propositions? How to think global scale. So I think in Honeywell you’re blessed to have some very strong leaders in different part of my career and in the first 15, 20 years, which really shape you because if you, what shapes you as the first 15 ish years of your life? ’cause once those value system is built in your brain, you kind of live with that. And I was benefiting from some very powerful ventures in different parts of the company. Let,

Barry Ritholtz  [00:54:01] Let’s talk about books. What are some of your favorites? What are you reading recently?

Vimal Kapur  [00:54:05] So books I read variety, both from leadership to sector specific. The recent one of the book I’m reading is the Price from Daniel Yergin. If anybody is interested about oil economy, please do read it. Six months back I started reading Chip War. So some of the sector specific things, but also read about leadership of some of the people I admire. Dave Cote, who was chair C of Honeywell for a long time. He has some very fascinating book. “Winning Now, Winning Later” in the, joined our board recently. She has some fascinating leadership books. So I read some of them, I read a lot of books on China. I think it’s underestimated the scale of that economy. So I think we just need to, there’s a book called Words View, China’s View of the Word, very interesting book. It’s like we have a view about China, what about their view? Have we ever asked them the question, why do you, what do you do? So I kind of have very diverse the reading habits of, you know, waiting from my business specific to leadership to some of the country’s specifics. Yeah, toggled around a lot on that. And,

Barry Ritholtz  [00:55:11] And our final two questions. What sort of advice would you give to a recent college graduate interest in the career in either engineering or management?

Vimal Kapur  [00:55:22] I mean, both are fascinating career. I would say engineering is a career which gives you a lot of options. So do pursue that because it gives you a wide variety of choices. Management is something that people should do who have more willingness to take a risk and have courage to make decisions. Because in the end, at some point in your career, you will have to do both. And if you think that’s not your sphere, that’s something you’re not good at it. I would rather argue than you choose something you’re really good at versus otherwise you’re going to get saturated at some point. But management is an excellent carrier by itself. So both are, both are excellent.

Barry Ritholtz  [00:56:00] And our final question, what do you know about the world of automation, engineering and artificial technology today that might’ve been useful 37 years ago when you first started at Honeywell?

Vimal Kapur  [00:56:14] I don’t know. I think I’m always excited about learning new technology all the time. You know, I’m still very curious to read things, how they work. I think I will say that staying curious is very important for us as a human being. We should never be satisfied on what we know. We should always ask the question, what we do not know. Whether it is about a technology or a business process or for that matter, any fact of life and more you are curious, more successful you are because you’re open-minded and you’re always willing to learn. And that has been my principle all my life. Always learn something new about anything. And you feel very fulfilled.

Barry Ritholtz  [00:56:52] Huh? Really, really terrific. Vimal, thank you so much for being, thank you very much. So generous with your time. We have been speaking with Vimal Kapur, CEO, and Chairman of Honeywell. If you enjoy this conversation, well be sure and check out any of the previous 637 we’ve done over the past 12 and a half years. You can find those at Bloomberg, iTunes, Spotify, YouTube, or wherever you find your favorite podcasts. I would be remiss if I didn’t thank the correct team that helps put these conversations together amongst the many people who helped me. Alexis Noriega is my video producer. Sean Russo is my researcher. Anna Luke is my producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

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