Individual Economists

Turkey's Fix For Its $20 Billion Hedge Fund Meltdown: Kindly Ask The Winners To Give The Money Back

Zero Hedge -

Turkey's Fix For Its $20 Billion Hedge Fund Meltdown: Kindly Ask The Winners To Give The Money Back

Two weeks after a cluster of Istanbul asset managers stopped honoring redemptions, triggering a market-wide circuit breaker and the liquidation of 131 funds held by some 455,758 Turkish retail investors, Ankara has unveiled its plan to make everyone whole. Or at least, to make everyone a little bit less un-whole.

As Bloomberg reports, Turkey will start payments to investors caught in the fund crisis. The Capital Markets Board (SPK) approved interim payments of up to 1 million lira (about $20,400) per eligible investor in funds run by Tera, Pusula, Atlas and Hedef, calculated on each investor's "net investment" as determined by the Central Securities Depository (MKK). Below a million lira, you get your money back; above it, you get a million and a place in the queue. Money market funds get paid first, the rest in descending order of investor count, with A1 Capital, Bulls and Pardus funds slotted in afterward. The interim payments are advances against whatever the liquidation ultimately recovers, which is a polite way of saying nobody knows yet.

Emre Tezmen, chair of Tera Yatırım, was arrested early last Wednesday.

Finance Minister Mehmet Simsek, meanwhile, insists that "we are not talking about a systemic problem," pointing out that public debt is just 22% of GDP and the budget deficit is "roughly half the developing country average." All true, and also not much consolation to the investor who, as Turkish Minute recounts, sold her Istanbul home before moving to Portugal, parked the proceeds in stock funds as an inflation hedge, and has watched her account fall ~90% while being unable to withdraw even that. "It is melting away before my eyes, and I can't do anything about it."

The "please give it back" account

The payouts are the boring part. The truly bizarre part is how Turkey - long the biggest banana in crowded bus of capital markets banana republics - plans to refill the pot.

Alongside the interim payments, the regulator announced the creation of "Voluntary Return Accounts" at Birlesik Fon Bankasi "for individuals seeking to return excessive profits obtained from pre-liquidation share sales." Proceeds will be funneled to the fund liquidation estates and on to Ziraat and Isbank for distribution to investors. A separate "General Share Refund Account" has been opened for anyone who would like to hand back profits from speculative trading in listed stocks, and a new fund inside the deposit insurer TMSF will receive assets later determined to be proceeds of crime (details here).

To summarize: Turkey's plan to compensate 455,000 losers is, in part, to ask the winners nicely.

Bloomberg's Eric Balchunas summed it up best: "Turkey wants investors who made a lot of money in market to gift excessive returns to the other investors who lost $20b."

Which raises a question that every holder of Turkish assets, foreign ones included, will now be asking: if realized gains can be deemed "excessive" after the fact, at what point do they become yours?

For those who don't feel like volunteering, there is the stick, or rather a discounted stick: under a leniency provision, anyone who pays twice their gains (minimum 500,000 lira) within 15 days of a criminal complaint gets a reduced penalty. Note where that money goes: not to the stranded investors, but to the Treasury and Finance Ministry. Market manipulation as a revenue line.

So who exactly made the "excessive gains"?

Here the honor system runs into a few practical problems. According to a detailed timeline of the probe, Pusula chairman Muhammed Yariz wired roughly 2.89 billion lira (~$15 million) to Edmond de Rothschild in Switzerland on September 1, two weeks before his firm defaulted; Pusula Holding chairman Serdar Turhan sent ~1.2 billion lira (~€25 million) to the same Swiss bank on August 24. Both have since been arrested. One suspects the Birlesik Fon Bankasi "voluntary return" desk is not their first call.

Then there's Cengiz Avci, a major shareholder in Odine Solutions, a stock that rose 987% this year to a peak 366 billion lira valuation before collapsing 94%. Prosecutors allege he booked ~15 billion lira in gains and converted 12 billion lira (~$244 million) into cash. There is an arrest warrant. He "had not returned and was not located." Presumably the voluntary return form got lost in the mail.

And then there's the politics. Fatma Betul Sayan Kaya, deputy chair of Erdogan's ruling AKP and a former family minister, resigned after the opposition alleged she bought shares in shipbuilder Ozata Denizcilik, a navy contractor whose valuation was ramped to $5 billion (above Ford Otosan) while Tera's brokerage reportedly controlled 95% of its shares, for about €1.1 million in April and sold for €23.3 million just before the September 16 crash. Kaya has not directly addressed the allegations, which remain unproven in court. A 21x return in five months: if that isn't "excessive," we'd love to know what is.

It doesn't stop there. As Middle East Eye details, one Erdogan adviser sat on Tera Portfolio's board until January, another former presidential adviser stayed on until the crisis erupted, and an Ozata board member arrested this week is the son of a former banking regulator and the son-in-law of a sitting deputy finance minister. Tera chairman Emre Tezmen, arrested on charges of running a Ponzi-like scheme, previously served on the board of the MKK, the very central depository now tasked with calculating each investor's "net investment" for the payouts.

Freeze, unfreeze, arrest the tweeters

The enforcement response has been equally on-brand. On a Friday, the Justice Minister announced asset freezes on 46 companies, 18 funds and 42 individuals. By Sunday, the freezes on 45 companies and 19 funds were lifted after the CMB conducted "a new assessment," with Simsek explaining that "protecting investment, employment, production and exports was a priority." Restrictions on the 42 individuals remain. Meanwhile, prosecutors in Bakirkoy arrested 16 people for social media posts deemed to be market manipulation and blocked access to 246 accounts "spreading speculative panic." It's always the tweets.

Officials have now identified 217 suspects across 26 manipulated stocks, with 56 detained as of September 30. The mechanics of the scheme were hardly sophisticated: funds piled into illiquid, low-float stocks, and with nobody on the other side, prices went vertical. Prosecutors allege some prices were inflated nearly 100x. Then the regulator tightened concentration rules in late August, the funds were forced to sell into a market with no bid, and retail rushed for the exits on the TEFAS platform. The ones who got out first were, inevitably, the ones closest to the funds.

The numbers tell the story: Pusula's funds shrank from 115 billion lira to under 8 billion, with 107 billion lira withdrawn before the doors closed. Money market funds, supposedly the safe end of the spectrum, saw 456 billion lira pulled in a single week (from 2.14 trillion to 1.68 trillion). In other words, those who knew ran, and those who trusted a "state-supervised system," as one law graduate who invested with her mother put it, are now waiting for a $20,000 interim check.

What Goldman is telling clients

As the crisis erupted, Goldman's EM credit desk wrote on September 17 that the equity market's 6% plunge was due to the "near-collapse and redemption default of asset manager Pusula Portfoy, precipitated by the regulator's clampdown on concentrated 'fund-chain' positions," followed by Tera "failing to meet redemption requests." The central bank responded with bond buybacks (you know, "NOT QE"), bigger repo auctions and lower discount rates, while Simsek spent the day "defending current policy mix and committing not to deviate from the anti-inflation track despite elections." Turkey CDS widened 10bps intraday before closing +6.5bps; Turkish bank perps fell as much as 65 cents. 

We were more laconic: Turkey was getting "Leopolded" we reported late on Sept 16 when first news of the fund meltdown emerged.

By that weekend, Goldman's EM credit team was calling it a "systemic liquidity squeeze" in which "the liquidation of approximately $20 billion in local funds, sparked by redemption failures, dragged the BIST 100 down 6% and pushed external sovereign debt and CDS as much as 15bps wider midweek." Yet the bank's key takeaway was that "Turkey's move was technical rather than credit-driven, with a domestic fund liquidation transmitting into external debt before local buyers and short covering reversed most of it."

Goldman CEEMEA sales trader Ashwin Sharma went further, noting that the crackdown targeted a speculative boom that index provider MSCI had described as "co-ordinated trading," and that reining it in, "given threats of possible MSCI demotion (to Frontier)," was "a clear positive for me." His conclusion: "Despite near-term redemption-driven volatility, I continue to see Turkey as an attractive buy-on-weakness story," with banks pointing to further rate cuts and NIM expansion into 2027, and an energy price shock (Turkey is a net oil importer) the biggest risk. The bank's GIR EM strategists echoed the theme in their weekly kickstart, flagging Turkey's 5% weekly drop on "regulatory action on select investment funds."

The carry crowd hasn't left either. In a September 29 note, Goldman's EM SSA desk said Turkey remains a carry trade "GIR continues to favour and where we continue to see client allocation," with clients extending out the curve into paper like the EBRD 27.5% 2029s, which yield ~200bps above the 2027s. Then again, as of this morning, the bank's credit desk reported that in the Turkish corporate complex "risk was still available and offered with corps feeling particularly abandoned."

Which is, in a nutshell, the Turkish trade: the high-30s lira yields and the orthodox finance minister are real, and so is the system in which an AKP deputy chair allegedly makes 21x on a navy shipbuilder ramped by a fund whose chairman sat on the board of the securities depository, while the regulator's answer to the losers is a $20,000 advance and a bank account for the winners' conscience.

Been here before

Readers will recall the last time Turkish markets needed a marketwide trading halt, after the arrest of Erdogan's top rival Ekrem Imamoglu sent the lira to a record low ("All Hell Breaks Loose In Turkey"). And in May we noted that Turkey had sold nearly all its US Treasuries, dumping holdings from ~$16 billion to $1.8 billion alongside gold to defend the lira after the Middle East war erupted. The buffers, in other words, are thinner than the macro tables suggest.

As for the gated funds, the playbook should be familiar to anyone who followed the private credit redemption mess earlier this year: illiquid assets, daily liquidity promises, and a "screen price" that only exists until someone tries to sell. As one local analyst put it, whether the till "will have the money to pay it is unclear." The interim payments come out of what's left in the funds; the rest depends on the liquidators finding buyers for stocks that, by prosecutors' account, had been inflated as much as 100-fold, and on the winners volunteering to give back their winnings.

We wouldn't hold our breath. But we would watch the precedent: in Turkey, a realized gain is now only yours until the government decides it was excessive.

Tyler Durden Sat, 10/03/2026 - 08:45

Black Smoke Reported Over Critical Aramco Refinery As Saudis Weigh Major Assault On Houthi Rebels

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Black Smoke Reported Over Critical Aramco Refinery As Saudis Weigh Major Assault On Houthi Rebels

Unverified reports and footage circulating on X early Saturday morning appear to show smoke rising from Saudi Aramco's Riyadh refinery. The cause and any impact on operations remain unclear. Separately, Axios reports that Saudi Arabia is preparing a major offensive against Iran-backed Houthis in the coming days. President Trump's comments last week that a bombing campaign against Tehran could resume after the midterm elections add to signs that the Gulf conflict remains far from any near-term resolution.

Turkish news outlet Türkiye Today cites NASA's FIRMS satellite monitoring system, which shows higher-intensity VIIRS thermal hits across Aramco's Riyadh refinery, one of Saudi Arabia's most important refining assets, with a capacity of about 130,000 barrels a day.

Open-source intelligence (OSINT) accounts on X are sharing footage of what may be Iran-backed Houthi attacks on the refinery. No official word yet on why thick black plumes of smoke are rising from multiple locations at the refinery.

A separate report by Axios overnight states that the Saudis are preparing for a major operation against the Houthis in the coming days, targeting coastal areas that give the rebels leverage over the critical maritime chokepoint of the Bab al-Mandeb Strait. The report cites two US officials.

More color from Axios:

Behind the scenes: A U.S. official said the Saudis have been planning the operation for weeks and that plans were approved by Saudi leadership several days ago.

  • The operation will include ground forces loyal to the internationally recognized government in Yemen with Saudi air cover.
  • On Thursday, Saudi Defense Minister Prince Khalid Bin Salman called Defense Secretary Pete Hegseth to brief him on the planned operation and ask again for U.S. airstrikes against Houthi targets, the U.S. official said.
  • A U.S. official said that the U.S. "is not going to take kinetic action for now."

President Trump reiterated to TIME last week that he may escalate attacks on Iran after the November midterms if an acceptable deal can't be reached.

Separately, University of Chicago political scientist Robert Pape has warned that Oct. 1 could mark a new phase in the conflict. He writes that "Iran's 45-day deadline to the United States expired today."

"On August 16, Iran's Supreme National Security Council decided that if Washington did not lift its naval blockade of Iranian ports within 45 days, Tehran would retain the option of launching renewed attacks against U.S. forces," Pape underscores. "That clock has now run out."

Tyler Durden Sat, 10/03/2026 - 08:10

"One Month Until Drawdown": UBS Sounds Alarm On Europe's Thin Gas Buffer As Winter Looms

Zero Hedge -

"One Month Until Drawdown": UBS Sounds Alarm On Europe's Thin Gas Buffer As Winter Looms

UBS energy analyst Nayoung Kim warned about a growing vulnerability in Europe's natural gas market on Thursday: with less than a month before seasonal withdrawals begin, storage levels remain well below historical norms for this time of year, leaving the continent with a smaller buffer against winter demand and supply disruptions.

Kim wrote that despite optimism this week over improved Hormuz flows (read the Goldman report), which has kept energy prices in check, top LNG exporter Qatar shipped just four cargoes in September, compared with 25 a month before June 2025 and an average of around 30. Force majeure has also been extended into November or early December for some buyers.

The final countdown to Europe's NatGas drawdown period is underway, with EU gas storage standing at just 71.50% full as of the end of the week, well below the 15-year average of around 88% for this time of year.

Weekly injections slowed to 1.3 billion cubic meters from 1.6 billion, with Norwegian maintenance and higher industrial demand offsetting an increase in LNG arrivals.

"We expect storage to reach 74% by winter, below last year's 84% and the five-year average of 90%, before falling to around 25% by the end of winter," Kim wrote in the note.

Meanwhile, Asian buyers are stepping up purchases. Weekly LNG inflows into Asia rose 12%, led by Northeast Asia, while combined arrivals into Japan and South Korea jumped 33% from the previous week.

Europe will have to pay up to keep cargoes coming before the Northern Hemisphere winter arrives. Asia's JKM benchmark is trading at a premium of more than $1.50 per million British thermal units to Europe's TTF, potentially forcing European buyers to raise bids for spot supplies, according to the analyst.

For Europe, the reality is clear: its benchmark Dutch TTF natural gas price will have to stay elevated through the winter, and buffers will remain unusually thin.

All it will take is one cold shot, renewed disruption to Gulf shipments, or sustained Asian buying for the Europeans to panic.

Beyond low NatGas supplies, Europe is also facing a fuel crisis, as the Trump administration has asked France and Germany to begin releasing emergency diesel supplies.

Tyler Durden Sat, 10/03/2026 - 07:35

Far Left UK Green Party Wants The Words 'Mother' And 'Father' Erased

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Far Left UK Green Party Wants The Words 'Mother' And 'Father' Erased

Authored by Steve Watson via Modernity.news,

The Green Party is going to war against language, having decided the words "mother" and "father" are no longer fit for its members.

Ahead of its conference in Brighton this weekend, Zack Polanski's party has circulated an 'Inclusive Terminology Guidance' telling activists to drop "mothers and fathers" for "parents and carers", and warning that the wrong vocabulary can create "unwelcoming or exclusionary" environments and feed into bullying and harassment under the party's own code of conduct.

The Telegraph reports that the document, already in use as equalities training, brands a run of ordinary English "unacceptable", then tells members what to say instead. 'Sexual preference' is out because it "implies that attraction is a choice". 'Transsexual' is out because it "does not encompass non-binary people". 'Homosexual' is discouraged for the same reason.

'Lunatic' and 'nutter' are non-compliant because they "reinforce negative stereotypes and stigma about mental health". 'Elderly', 'youngster', 'able-bodied', 'sex-change', 'female politician' and 'lady doctor' are all on the discouraged list. Gendered job titles go too: 'chair', not 'chairman'; 'police officer', not 'policeman'.

The race section is the same project in different clothes. Members are steered toward "global majority", described as an umbrella for people of Black, Asian, Brown, Indigenous and Latin American heritage, on the grounds that these groups are most of the world's population and are "often minoritised" in countries such as the UK.

'Brown' should be "used with caution," while "racially minoritised" is preferred because it "emphasises that minority status is created by social and power structures, rather than being inherent". "Black, Asian and minority ethnic" is to be handled carefully, because "many people are uncomfortable with grouping diverse experiences under a single label".

A section titled "What if I get it wrong?" tells members "it's OK to make mistakes from time to time", provided they are trying to be more "inclusive". The approved response is to apologise, thank the person who corrected you, and "adjust your language moving forward". Then the stick: "repeated or deliberate behaviour may be considered harassment, which is unlawful".

A Green Party spokesman told the Telegraph and the Daily Mail: "This is an existing and standard equalities training document, similar to those found in other organisations that also take equalities seriously. It is a guide and nothing else." The spokesman did not say when it was published.

The Free Speech Union called it "absolutely mental":

Conservative Party chairman Kevin Hollinrake said: "The Greens are obsessed with policing people's language and thoughts in the name of their increasingly bizarre crusade against ordinary Brits. Last week they were dictating who people spend time with and what jokes they make. Now they're attempting to prohibit perfectly normal words like 'mother' and 'father'."

He added, "This extraordinary obsession with censoring how people speak and behave in their everyday lives is made even more nonsensical by Polanski's inability to get a grip of the vile antisemitism within his own party." He added that Polanski should "look closer to home before lecturing others about what they can and cannot say."

JK Rowling answered in the only register the document deserves. "Speaking as the elderly mother of three youngsters, who hasn't had a sex change and knows many homosexuals, it is my able-bodied and sexually-preferred opinion that the Greens are turning into total nutters."

None of this arrives in a vacuum. Polanski took leadership of the party in September 2025. Membership has since jumped from about 68,000 to 200,000 by March 2026, with 441 new councillors elected in May, a haul swollen by left-wing activists who left Labour under Sir Keir Starmer after Polanski put Palestinian activism and transgender rights ahead of anything resembling environmental policy.

A YouGov poll this week found Britons now rate the Greens "weak, out of touch, incompetent and serving their own interests", with net favourability sliding from plus five to minus 19 on his watch. He is standing in the Holborn and St Pancras by-election on 8 October, against Labour's Sagal Abdi-Wali.

The language guide is the internal version of positions the party has already taken in public. Last year, on Piers Morgan Uncensored, Polanski was asked if a woman can have a penis and answered yes. He called biological sex "not necessarily" binary, described gender as a "spectrum", and claimed he knew better than the UK Supreme Court, whose April 2025 ruling in For Women Scotland had defined sex under the Equality Act as biological sex at birth.

By March 2026 a leaked Green dossier was proposing a Department of Migration that would work with education authorities to "disseminate knowledge" in classrooms about "the situations from which those seeking asylum and resettling refugees are fleeing, and the need for and moral obligation of asylum and humanitarian protection."

In May, Scotland's loosened rules produced Green MSP Dr Q Manivannan, a transgender Tamil immigrant on a temporary student visa, without British citizenship or permanent residence.

The victory speech introduced "a transgender Tamil immigrant" whose pronouns are "they/them", and included the claim that "Transness is Blackness. Transness is womanhood. Transness is disability." A party that will not say mother and father had already elected someone for whom every category is interchangeable.

In July, two weeks after Reform's Ann Widdecombe was killed in a hammer attack at her Dartmoor home, Polanski shared an Instagram post of a man in a T-shirt bearing a guillotine and the line "We're only making plans for Nigel." Reform UK reported him to the Metropolitan Police for incitement. He later unshared it.

A party spokesman said he "unequivocally does not support this type of dangerous message" and had accepted the collaboration "without realising there was more to it." Nigel Farage said: "If I was to post anything as inciteful then I would expect to be arrested, and so should Polanski."

The same week as the language guide, the Mail on Sunday reported Green training that told members to police friends' jokes, log "what happened, including dates, times, locations", and audit the race of their closest friends to fight "affinity bias".

The attempt to retire "mother" and "father" flattens a biological relation into an administrative one.

The Communist Manifesto treats the charge of wanting to abolish the family as a boast as much as an accusation, and answers it by declaring that the bourgeois family vanishes with capital. Engels, in The Origin of the Family, Private Property and the State, cast the monogamous household as a property arrangement whose job was to produce heirs, and looked forward to its supersession once private property was abolished.

Later Western Marxism kept the target and dropped the economics. The family became the workshop in which "oppressive" norms, sex roles, and authority were said to be reproduced.

Erasing words is how that is done without a manifesto. "Mother" names a woman who carried a child. "Father" names the man who fathered one. "Carer" names a function anyone can be assigned. Once the specific words are marked as harmful, the specific institution becomes harder to defend, because the defence has to be made in the replacement language.

This is exactly what George Orwell warned of in 1984.

A party that already tells children they owe a moral debt to asylum policy, that already treats sex as a spectrum, and that already elevates identity over citizenship, has every reason to want "mother" and "father" filed under unacceptable. The family is the rival loyalty. Marxism has always understood that. The Green guide is the HR version.

Tyler Durden Sat, 10/03/2026 - 07:00

Failing Canada And Britain Blame Trump, Putin, And 'White Supremacy'

Zero Hedge -

Failing Canada And Britain Blame Trump, Putin, And 'White Supremacy'

Authored by J.B. Shurk via American Thinker,

Commie Canada and the dis-United Kingdom should be renamed the "Dumb and Dumber" of the British Commonwealth.

King Charles III's North American prime minister, Mark Carney, ran to The New York Times last week to talk about his military combat preparations against the United States in the event that President Trump crosses Lake America and liberates Canada from its delusional leaders. What a showboating dunce. The U.S. singlehandedly sustains Canada's economy and national security, yet the tiny central banker huffed and puffed in a hilariously Napoleonic display of fake strength.

In the same interview with the failing Times, Con-man Carney outlined his intent to integrate Canada's economy with that of China and the European Union and to replace the U.S. Dollar with a China-linked global reserve currency. Rhetorically defending Canada's sovereignty while insulting his U.S. benefactor, Little Mark Carney explained how he would subjugate his socialist nanny-state to Chinese Communist Party General Secretary Xi Jinping and unelected European Commission President Ursula von der Leyen. Mark is the global mascot for "educated" idiots everywhere.

Not to be outdone by not-so-Great Britain's Canadian cousin, U.K. Prime Minister Poindexter (er, I mean Andy Burnham) informed the United Nations General Assembly last week that his government was constructing yet another speech-police organization (this one given the august name, "National Centre for Information Defence," which should not be confused with the "Research, Information, and Communications Unit," the "Government Communication Service," the "Counter Disinformation Unit," the "Defending Democracy Taskforce," the "Information Threats and Influence Directorate," the "Rapid Response Unit," the "National Cyber Force and Social Cohesion Taskforce," the "Media Monitoring Unit," or any of the other information-control agencies already mobilized across totalitarian Britain) to protect the British people from scary thoughts and words. Burnham blamed the Russians for spreading "a narrative of decline, stoking division, and sowing despair" in the U.K. (and definitely not Westminster's promotion of decline, division, and despair!) and promised to counteract this "information warfare" by censoring Britons' public speech and feeding his collapsing country a steady diet of State-sanctioned propaganda. In order to beat back the Russians, Dilapidated Britain must have its very own digital Iron Curtain! Two cheers for democracy! Hip hip...who cares.

The British people are screwed. On average, their government grants settlement or citizenship to an illegal alien every single minute. These foreign nationals receive more welfare from British taxpayers than ever before. The third-world invaders (I mean, "newcomers") use Britain's streets as public toilets. Rather than securing the kingdom's borders, the Home Office hands out a nine-page booklet informing mostly-Muslim men of military age that it is illegal to rape women and children while they conquer the islands. In the last two years alone, the number of illegal immigrants (and future citizens!) arriving by boat has exceeded the size of the entire British Army! But if these outrageous facts disturb you enough to publicly express your feelings on social media, you will most likely join the roughly 65,000 Brits who have been arrested for "speech-related offenses" over the last five years. Foreign invasion? Good! Free speech? Very bad!

Apparently, the British police state also plans to imprison anyone who would rather not fight WWIII against the Russian Federation. During a recent episode of former cabinet minister Jacob Rees-Mogg's "State of the Nation" on GB News, one leftist-globalist commentator in favor of mass conscription argued, "We would have to lock a few people up...some of the pro-Russian voices, people saying there isn't a threat, don't fight for your country, don't go to war for Burnham, we'll have to lock 'em up." Rather than responding with horror at the suggestion that his fellow Britons should be imprisoned for opposing a catastrophic war, Rees-Mogg pedantically replied, "Well, we suspended habeas corpus during the Napoleonic Wars...indeed, yes." In another interview, Rees-Mogg nonchalantly remarked that British citizens have a "duty" to "die" for Britain in a war against Russia.

In Burnham and Rees-Mogg's Britain, the only way to "defend democracy" is to imprison anyone who disagrees with the British Establishment and to sacrifice everyone else to the killing fields! The British Isles might as well be renamed the "Gulag Archipelago."

Interestingly, GB News - which leans conservative - discovered last week that Britain's media regulator, the Office of Communications (Ofcom), had covered up data showing that viewers trust GB News more than the BBC. GB News, in fact, is ranked above all other networks with regard to viewpoint diversity and impartiality. British authorities apparently did not want the public to know these inconvenient truths because the BBC is treated as an objective, trustworthy, and premier source of news (fact check: false!). In an effort to control the public's perception of the BBC, Ofcom restricted what information the public was permitted to know. P.M. Burnham takes the "defense of information" very seriously!

How seriously? Burnham and the British government force citizens to pay for the BBC's awful dreck whether they watch it or not! Every household in the U.K. must fork over a £180 license fee to the BBC each year. Because more households are refusing to pay the license, the government is considering the imposition of a mandatory £11-a-month Internet tax in order to keep the BBC's fake news funded. The BBC says that the "fee is essential for maintaining the quality and diversity of public broadcasting in the UK."

What does "quality and diversity" look like at the BBC? Two "reporters" just did a major exposé describing how women who don't polish their nails perpetuate "white supremacy." No joke! "Nail art's historical and creative roots are linked back to black, Latino, and Asian communities and the suggestion that bare nails are now a sign of high status could stigmatise bold manicures," the BBC "reports." "They are often called elegant or tasteful, and these are often usually euphemisms that perpetuate white supremacist standards of beauty." Yes, Burnham, force Britain's working-class to pay for this race-baiting propaganda posing as hard news!

Earlier this year, British authorities announced that YouTube and other social media platforms would be forced to manipulate their algorithms and push BBC "news" to the top of feeds in order to counter "disinformation." In other words, Whitehall steals money from British citizens to pay for State-run TV and then forces them to watch it. During the Cold War, we called that Soviet-style propaganda. Yet if you ask the fake "reporters" at the BBC, Canada's publicly-funded CBC, or America's NPR or PBS, all these propagandists would insist that they have nothing in common with the Soviet Union's Pravda or the Russian Federation's RT (Russia Today) News. In the West, State-funded media are somehow not State media. Does that sound more like propaganda or breaking news?

Britain's State-imposed "narrative control" is utterly totalitarian. Dismissing the "narrative of decline" and "despair" in Britain as a "corrosive narrative...which bears no resemblance to reality" and a "distorted and untrue narrative about Britain," P.M. Burnham casts all public dissent as "far-right narratives." As military historian Professor Michael Rainsborough mocks, "The problem isn't the problem, the problem is the people noticing the problem." Rainsborough points out that right after Burnham rebranded "decline" as "disinformation," the prime minister laid out a "10-year plan" to fight inflation, housing costs, hopelessness, inequality, and division. "The narrative of decline," in other words, "bears no resemblance to reality, although reality apparently requires a 10-year plan."

Both Canada and Britain are failing. The public has noticed. Carney and Burnham wish to whitewash reality with fake "narratives." The worse things become, the more difficult it will be for their ministries of truth to succeed. Expect the BBC to blame Trump, Putin, and "white supremacy."

Tyler Durden Fri, 10/02/2026 - 23:25

"Are You An FPV Pilot": Pentagon Calls On Drone Operators For Next "Gauntlet" Showdown

Zero Hedge -

"Are You An FPV Pilot": Pentagon Calls On Drone Operators For Next "Gauntlet" Showdown

The Department of War has put out a request for service members with "FPV experience" to participate in testing events called “Gauntlets” and fly Category 1 drones in field training exercises to accelerate drone development and prepare the US for the next conflict, where drones, robotics, and automated kill chains dominate the modern battlefield.

"Are you an FPV pilot? We want to hear from you!" DoW asked on X on Friday morning.

"The Drone Dominance Program is recruiting service members with FPV experience who would like to be considered as pilots for future Gauntlets and related efforts," the request said.

The Drone Dominance Program is the DoW's answer to purchasing large quantities of drones across every category, from 1 to 5, and building out a domestic supply chain of components free from dependence on conflict areas and countries such as China, which can easily weaponize supply chains to hinder procurement.

Earlier this week, Defense Secretary Pete Hegseth revealed that Autonomous Warfare Command, dubbed "AutoWarCom," is set to accelerate the DoW's purchases across all categories of drones, robotics, and AI.

What's key is that drone procurement will be a massive part of the rearmament supercycle and provide tailwinds to drone companies, such as heavily shorted Ondas, whose Ultra drone could very well see ramped-up orders by the military as it's seen as an MQ-9 Reaper alternative for ISR missions. 

"Once we apply sustained budget to changed doctrine, we will outperform the world," said Owen West, a former Marine, assistant defense secretary, and Goldman Sachs trader who has been tasked with leading the DoW's Defense Innovation Unit. "And by snapping in AI, we will be ahead of the world, because we are the leaders in AI."

Tyler Durden Fri, 10/02/2026 - 23:00

The Tyranny Of One Man's Opinion

Zero Hedge -

The Tyranny Of One Man's Opinion

Authored by Judge Andrew P. Napolitano via LewRockwell.com,

Thomas Cromwell was the Lord Chancellor of England for much of the reign of King Henry VIII. He engineered the convictions and executions of many whom Henry wanted out of the way, including his two predecessors in office - one of whom was St. Thomas More - and even the king's second wife, Queen Anne.

When Cromwell's son Gregory, who became sickened as he watched his father devolving from counselor to monster, learned that an executioner for the queen had been sent for from France a week before her trial, he asked his father what the purpose of her trial was if the king had preordained the queen's guilt and prepaid the executioner. Cromwell replied that the king needed a jury to give the appearance of legitimacy to her conviction and prevent the public perception of "the tyranny of one man's opinion."

In America, we have a Constitution not only to prevent the perception but also the reality of the tyranny of one man's opinion. The Constitution's Fifth Amendment makes clear that if the government wants life, liberty or property, it cannot take it by executive command, but only by due process - a fair jury trial and all its constitutional protections; and Article I makes it clear that if the government wants war, it cannot commence it by executive command, but only by congressional declaration.

We have a Constitution also to assure the separation of powers in the federal government. Congress writes the laws, appropriates the taxpayers' money and funds borrowed in their names and declares war when the United States is in danger of imminent foreign threat. The president enforces the laws, spends money as Congress directs and wages the wars Congress has authorized. The judiciary decides what the Constitution and the laws mean and, if properly challenged, determines if the president and Congress or the states have exercised their duties lawfully and constitutionally.

The central constitutional question is not whether a president sincerely believes that his policies are necessary. It is whether the Constitution permits personal liberty and limited government to depend upon the opinion of one man. That is the danger of executive government without effective legislative and judicial checks.

A fair reading of the Constitution begins with a truism: Presidential power is not whatever the president believes it to be. It is only what the Constitution and laws actually confer.

Consider the administration's attacks on alleged drug-trafficking boats. President Donald Trump says he has directed military forces to strike narcotrafficking vessels and describes the operation as part of his campaign against fentanyl and cartels. But the constitutional question is separate from the president's characterization of the targets. A person suspected of being a drug trafficker - or even a mass murderer - does not thereby become condemned to death. Criminal guilt always requires accusation, evidence and adjudication according to law, before punishment.

These boat killings are unlawful extrajudicial executions. In the language all Americans can understand, they are murders.

The same principle applies to Iran. The Framers deliberately divided the war powers. Article I gives Congress the power to declare war, authorize military force, regulate the armed forces and control appropriations. Article II makes the president commander in chief. The distinction matters. The president commands forces; Congress determines where and under what circumstances the president does so.

Trump has openly declared an American blockade of the Strait of Hormuz and said that the United States controls which ships pass through it. He has also imposed sanctions which deny food, medicine and currency stability to millions of innocent Iranians. He even threatened to murder all Iranians - beyond the thousands he has already killed - if a peace agreement is not soon reached.

Those statements highlight what the Constitution was designed to prevent one individual from addressing alone: Whether the United States should wage military and economic hostilities against the population of another nation.

Congress has repeatedly resisted treating the Iran conflict as a matter solely for presidential discretion. Just two weeks ago, support for Trump's war failed to muster majorities in both houses of Congress.

Nor can the president's personal assessment of Iran's nuclear intentions settle the matter. In 2018, his State Department's compliance report said Iran was fulfilling its nuclear-related non-proliferation commitments and U.S. intelligence had assessed with high confidence that Iran had halted its nuclear weapons program in 2003.

In 2020, his State Department again said that Iran was not then engaged in key activities associated with designing and developing a nuclear weapon. In 2025, his Director of National Intelligence testified that the entire U.S. intelligence community continued to assess that Iran was not building nuclear weapons.

Those facts alone establish something constitutionally important: The president's personal belief - whether informed or uninformed - is not evidence or law or a substitute for congressional authorization.

The same textual principle reaches domestic spending and taxation. Article I provides that only Congress can impose taxes, and money may be drawn from the Treasury only pursuant to appropriations made by law. Even though the Supreme Court has invalidated Trump's tariffs, he continues to impose them. Even though Congress has not authorized funds for Trump's vanity projects, he continues to spend tax dollars on them.

The Constitution does not grant any branch of government carte blanche. It has separated powers precisely because legislators, presidents and judges can all succumb to the corruption of power - and can all be wrong.

That is the deeper meaning of the tyranny of one man's opinion. The danger is not merely that one president might be wrong. It is that a constitutional system becomes meaningless if one man's conclusions about war, crime, taxation, spending, foreign threats or national security become the sole basis for government actions - particularly actions that kill innocents.

The Founders separated the sword from the purse and divided governmental power because they understood a truism: Personal liberty and limited government cannot long survive when entrusted to one man's opinion.

Tyler Durden Fri, 10/02/2026 - 22:35

NASA Wants To Resurrect The SR-71 Blackbird

Zero Hedge -

NASA Wants To Resurrect The SR-71 Blackbird

Earlier this month, NASA Administrator Jared Isaacman fueled speculation about the agency's high-speed flight research plans by unveiling a mysterious aircraft silhouette on a slide titled "Rebuilding our X-plane portfolio."

Asked whether the image on the slide depicted the famed SR-71 Blackbird, Isaacman denied it was a Blackbird but signaled renewed ambitions for high-altitude, high-speed flight, saying NASA was getting back into the business of "flying high and fast again."

This brings us to an Aviation Week report saying NASA is working to return a Blackbird to flight after nearly three decades in retirement.

The agency has approached retired Blackbird engineers about restoring Tail No. 844, a 59-year-old aircraft removed earlier this year from an outdoor display at NASA's Armstrong Flight Research Center in California.

The aircraft was moved into a former Space Shuttle hangar, where crews have been working on it, former NASA and Air Force test engineer Mike Relja revealed to the aviation news website. 

However, as the outlet shared, there is one major problem:

The Air Force and NASA destroyed a $600 million supply of spare parts for the Blackbird fleet in 2007. The move came long after it seemed unlikely, if not impossible, that an SR-71A would return to operational service.

That decision could lead to significant restart costs. In addition to all of the consumable spares that must be in regular supply, NASA would need to restore access to the Blackbird's unique JP-7 fuel blend, the triethylborane ignition chemical, engine oil and hydraulic fluids, Relja adds. A hodgepodge of bespoke ground equipment also no longer exists, leaving the current effort without vital, if unheralded, pieces of equipment.

"To raise the wing, you need a cart," he says. "To get the engine out, you need a cart. You need equipment to pull the [engine] spikes, pull the [ejection] seat. All that stuff is gone."

When Relja raised all of these issues with Ash, the NASA manager assured him it would not be a problem, without going into details about their solutions.

"Every time I threw one of these things out there, he says, 'Oh, engineering will take care of that [and] engineering will take care of that,'" Relja recalls.

At the same time, he does not dismiss a return to flight as impossible, especially if NASA has enough resources to make it achievable.

"If you got a ton of money, maybe you can make it happen," he says. "They went to the Moon, you know."

Why NASA wants to restore the SR-71 to flightworthy status remains unclear. Reports over the years have pointed to Lockheed Martin's development of the SR-72, dubbed the "Son of Blackbird," for intelligence, surveillance, and reconnaissance missions. Yet no flight tests have been publicly confirmed. 

Tyler Durden Fri, 10/02/2026 - 22:10

Mystery Gunmen Slaughter Seven People On Bus In Syria's Homs

Zero Hedge -

Mystery Gunmen Slaughter Seven People On Bus In Syria's Homs

Via Middle East Eye

Gunmen in Syria killed seven people and wounded four others after opening fire on a civilian bus in western Homs province on Wednesday evening.

The bus was carrying company employees returning home from work when it came under fire as it crossed the Masyaf Bridge in the western Homs countryside, according to the Homs Health Directorate.

Downtown Homs. Wiki Commons

Security units were immediately deployed to the scene to secure the area, while criminal investigators began collecting evidence to identify those responsible and determine the motive, according to Homs Internal Security Forces commander Brig Gen Bassem Mohammad Shaaban.

The injured were taken to hospitals across the governorate, while security forces began an investigation.

Maan Mahmoud Fahd, director of the Homs Grand Hospital, told Sana that four individuals were declared dead upon arrival, after suffering from severe gunshot wounds to the head and chest.

No group has yet claimed responsibility, and authorities have not named any suspects. Shaaban vowed to pursue those responsible, saying the attack would not go unpunished.

"We view this cowardly attack as an attempt to undermine security in Homs and destabilise the stability we have worked to consolidate," Shaaban said.

"We will not allow criminals to threaten the security of our people or undermine the stability the city is experiencing," he added.

The ambush was one of several recent attacks to raise security concerns in Syria since the fall of Bashar al-Assad's government in December 2024.

Brigadier General Munir al-Hariri, a Syrian military analyst, told Syria TV that former Assad loyalists were most likely behind Wednesday's attack, which he said aimed to destabilize security in the country. [ZH: We should note the presence of the literally hundreds if not thousands of jihadist groups, many of them foreign, unleashed on Syria during the height of the CIA/NATO/Gulf-backed proxy war to overthrow Assad].

In August, a bus carrying members of the internal security forces was targeted near Damascus, while an explosive device exploded on a passenger bus in Jaramana, southeast of the capital, wounding 14 people earlier that month.

Gas pipeline blast

The bus attack was one of three major security incidents to hit Syria on Wednesday. A gas pipeline explosion at the Tishreen thermal power plant in Syria's Damascus countryside on Wednesday evening forced three power stations out of service, the Syrian Electricity Company said, warning that the shutdown would cause longer scheduled power cuts.

The blast triggered a large fire and injured two people, according to state broadcaster Alikhbaria. The explosion hit a pressure-reduction station at the plant entrance and damaged the two gas lines that supply it, the Syrian Petroleum Company said.

The loss of gas supplies shut down the Deir Ali and Nasiriyah plants, along with Tishreen, which lies about 36km from the capital.

Abdul Hamid Salat, director of the energy ministry's media department, said the interruption to gas supplies had also affected water-pumping and treatment stations, disrupting services for hundreds of thousands of people across Damascus and its countryside, Daraa, Sweida and Quneitra.

Speaking at the site late on Wednesday, Energy Minister Mohammad al-Bashir said the fire was brought under control overnight. Al-Bashir added specialists would inspect the site once civil defense teams finished cooling it, to determine "the causes and circumstances precisely".

The Homs microbus that was targeted, via SANA

Authorities have not yet established whether the explosion resulted from a technical fault, a deliberate attack or sabotage.

Israeli incursion

Israeli forces fired three artillery shells at the area around al-Mantara Dam in Syria's southern Quneitra province on Wednesday. No immediate casualties or damage were reported.

On Thursday morning, Israeli forces also entered the village of Saida al-Golan in southern Quneitra with around 12 military vehicles as students were making their way to school. The forces later withdrew towards villages in the Yarmouk Basin, with no reports of arrests or house searches.

Reports from Al-Araby News outlet indicate that there was an assassination attempt on a Ministry of Defence officer in the city of Sanamen, situated to the north of Dara.The shelling came amid continued Israeli military activity in southern Syria.

On Tuesday, Israeli forces carried out incursions in Quneitra, including an operation in which soldiers questioned and assaulted shepherds, according to Syrian state media.

The latest developments also come days after Syrian President Ahmed al-Sharaa said talks with Israel on a security framework had reached nearly 90 percent agreement before Israel withdrew or introduced additional conditions.

Speaking at an Atlantic Council panel in New York last week, al-Sharaa said several rounds of negotiations had taken place over the previous year with US involvement and that the talks were continuing.

Tyler Durden Fri, 10/02/2026 - 21:45

DOJ Won't Defend Suppressor Registry In Court After Congress Killed The $200 Tax

Zero Hedge -

DOJ Won't Defend Suppressor Registry In Court After Congress Killed The $200 Tax

The Justice Department has now made it official: it will not defend part of the 92-year-old National Firearms Act in court, confirming what we reported in August.

Solicitor General D. John Sauer told Congress that "the Department of Justice has determined not to file an appeal" in Silencer Shop Foundation v. ATF, the case in which a federal judge ruled that NFA registration requirements for suppressors and short-barreled rifles and shotguns are unconstitutional now that the tax behind them is gone. The letter, addressed to Senate Judiciary Chairman Chuck Grassley and dated Sept. 24, was made public this week.

The NFA has required owners of suppressors and short-barreled guns to pay a $200 tax and register with the federal government since 1934. President Trump's One Big Beautiful Bill eliminated that tax for suppressors and short-barreled rifles and shotguns, but left the registration requirement in place. Gun rights groups sued, arguing that a registry justified by Congress's taxing power can't survive once there's no tax to collect.

On Aug. 5, U.S. District Judge James Wesley Hendrix of the Northern District of Texas agreed, finding the challenged provisions could no longer be sustained under Congress's taxing power and rejecting the government's fallback argument that the interstate commerce power could save them. The case was consolidated with Jensen v. ATF.

The injunction protects the plaintiffs and their "current and future members and customers," not the general public. The covered groups include Gun Owners of America, the Citizens Committee for the Right to Keep and Bear Arms, FPC Action Foundation and the Texas State Rifle Association, according to Bearing Arms. Machine guns, destructive devices and the NFA's special occupational tax are not covered at all.

The result is a two-tier Second Amendment. If you hold the right membership card, the federal registry no longer applies to your suppressor. If you don't, nobody in Washington will say. "The DOJ has yet to release any guidance about how the court's decision will impact the NFA's registration requirements for those who fall outside the protection of the injunction," Bearing Arms' Cam Edwards wrote.

The court granted DOJ a 10-day extension, to Oct. 12, to respond to nine plaintiff states asking whether the injunction covers all of their residents or only members and customers of the plaintiff groups, and ATF Director Robert Cekada has said guidance on transfers and interstate travel is coming "within weeks."

Republicans on the Hill want the department to go further. In August, Rep. Andrew Clyde of Georgia led 46 House members and 8 senators in urging Attorney General Todd Blanche not only to skip the appeal but to apply the ruling nationwide through rulemaking, warning that "an appeal would prolong regulatory uncertainty for law-abiding gun owners and businesses and would consume DOJ resources."

Whether the nationwide relief they asked for arrives, in the Oct. 12 filing or ATF's promised guidance, will decide whether gun owners outside the covered groups are still committing a federal felony by skipping paperwork for a tax that no longer exists.

* * *

Tyler Durden Fri, 10/02/2026 - 21:20

When Regulation Changes Who Becomes Rich

Zero Hedge -

When Regulation Changes Who Becomes Rich

Authored by Shahid Islam via RealClearMarkets,

Economic debates about inequality usually begin with a familiar question: Who has how much income?

It is an important question. But perhaps it is not the only one we should be asking.

A society can change who becomes rich without substantially changing how unequal the society is. Regulation can weaken one economic elite while creating opportunities for another. Entrepreneurs and investors may lose relative influence while lawyers, compliance specialists, lobbyists, consultants and regulatory experts gain it.

The Gini coefficient may barely notice.

Income distribution and income-source distribution are not the same thing.

Regulation does more than redistribute income. It changes the relative returns to different kinds of knowledge and human capital. And when those returns change, talented people respond.

Elite Substitution

Imagine an economy in which high returns come primarily from producing things consumers voluntarily buy. Entrepreneurs search for new products, engineers improve production and investors search for promising companies.

Now introduce an increasingly complex regulatory system.

Those activities do not disappear. But another set of skills becomes more valuable: interpreting regulations, satisfying disclosure requirements, obtaining government permissions, anticipating political decisions and influencing the rules themselves.

The relevant question is not simply whether regulation reduces inequality. It is what happens to the return from creating economic value relative to the return from navigating political and regulatory institutions.

If intervention reduces the return to one form of economic power while increasing the return to another, we may get what I call elite substitution.

The elite does not disappear. Its composition changes.

Sarbanes-Oxley and the Fixed Cost of Complexity

Consider the Sarbanes-Oxley Act of 2002.

Following Enron and WorldCom, Congress sought to strengthen financial reporting and restore investor confidence. But compliance costs are not necessarily proportional to firm size.

A large corporation and a small public company may both need auditors, lawyers, internal-control systems and compliance personnel. The large company can spread those expenses across billions of dollars of revenue. The smaller company cannot.

GAO research has found that Sarbanes-Oxley compliance costs, although generally higher in absolute terms for larger companies, are proportionately more burdensome for smaller companies. GAO also found that companies moving from exempt to nonexempt status experienced a median increase of about $219,000, or 13 percent, in audit fees in the year of transition.

Sarbanes-Oxley did not cause the rise of private equity by itself. But increasing the fixed cost of public ownership changes the relative attractiveness of public and private organizational forms.

That matters because public markets allow ordinary investors to participate directly in corporate growth, while many private-market opportunities have historically been concentrated among institutional and accredited investors.

Regulation intended partly to protect ordinary investors can therefore inadvertently encourage some activity to migrate toward markets to which those same investors have less access.

Who Can Afford the Maze?

I saw another version of this phenomenon while working in the wealth-management industry before 2008.

I remember a rule of thumb concerning sophisticated offshore trusts: they generally became economically worthwhile only for estates of roughly $75 million or more. The precise threshold varied, but the economics was straightforward.

Lawyers, accountants, trustees and other specialists were expensive. Below a sufficiently large asset level, the cost could exceed the benefit.

That experience taught me something important:

Complexity has a fixed cost.

A $100 million household can economically justify sophisticated legal and tax strategies whose professional costs would make little sense for an ordinary household.

The same principle applies to businesses. A small company may struggle to employ one regulatory specialist. A multinational corporation can maintain entire departments of attorneys, accountants, lobbyists and compliance professionals.

Rules may formally apply equally while imposing very unequal economic burdens.

This creates a paradox. Regulation intended to constrain powerful economic actors can sometimes increase their relative advantage because they possess the resources necessary to navigate the resulting complexity.

We have not necessarily eliminated privilege. We may simply have changed its technology.

Dodd-Frank and Yesterday's Crisis

The same issue appears in banking.

After the 2008 financial crisis, Dodd-Frank increased the importance of compliance officers, attorneys, risk specialists, consultants, programmers and regulatory analysts. A Government Accountability Office study found that community banks, credit unions and industry associations reported increased staffing, training, employee time and compliance-system expenditures associated with selected Dodd-Frank rules.

The obvious defense is that this activity may prevent another financial crisis. If so, its social return could be enormous.

But that argument contains a difficult knowledge problem.

Major financial regulations are often responses to observed failures. Sarbanes-Oxley followed Enron and WorldCom. Dodd-Frank followed the financial crisis.

But the next crisis need not resemble the last one.

Financial institutions adapt. Capital moves. Technology changes. New products appear and risks migrate. The Federal Reserve's financial-stability framework itself acknowledges that shocks are inherently difficult to predict and therefore focuses primarily on monitoring vulnerabilities rather than predicting particular shocks.

This does not mean regulation produces no benefits. Higher capital, greater liquidity and improved risk controls may make institutions safer.

But the costs are relatively visible: compliance departments, legal expenses, reporting systems and management time. One of the largest claimed benefits - the crisis that did not happen - is much harder to observe.

The economic question is whether the marginal resources devoted to regulation make the financial system sufficiently safer to justify their opportunity cost.

The ACA and the Value of Political Knowledge

The Affordable Care Act illustrates another side of the same phenomenon.

The ACA changed subsidies, insurance rules, reimbursement arrangements and government-financed coverage. These changes affected expected revenues and profits throughout the healthcare industry.

Economists Mohamad Al-Ississ and Nolan Miller examined Scott Brown's surprise 2010 Massachusetts Senate victory, which reduced the perceived probability that the pending healthcare legislation would survive in its expected form.

They found striking differences. Managed-care firms experienced abnormal returns of about 6 percent, pharmaceutical companies about 2.8 percent, while healthcare facilities experienced abnormal losses of about 3.5 percent.

This does not prove that these gains and losses were political rents. A hospital could become more valuable under expanded insurance simply because more patients could pay their bills.

But it demonstrates something important:

Government rules can change expected private cash flows sufficiently that political events become capitalized into asset prices.

Once the government determines reimbursement formulas, subsidies and eligibility rules, understanding government becomes part of business strategy.

Political knowledge acquires economic value.

And when political decisions can create or destroy substantial corporate value, firms rationally devote resources to anticipating, navigating and influencing those decisions.

What the Gini Coefficient Cannot See

Imagine two economies with identical income distributions.

In one, high incomes depend primarily upon success in markets. In the other, they depend much more heavily upon successfully navigating political and regulatory institutions.

The Gini coefficient could be identical.

The economies would not be.

This is why inequality statistics tell us only part of the story. We measure how much income people receive but rarely ask enough about what activities generate that income.

None of this establishes that regulation necessarily makes society poorer. Preventing fraud, improving disclosure or correcting genuine externalities can create social value. Elite substitution and a smaller economic pie are separate propositions.

But every society has unusually talented and ambitious people. The important question is what institutions reward them for doing.

Do they receive the highest returns from inventing products, building companies and allocating capital successfully?

Or increasingly from mastering the rules governing those activities?

People respond to incentives. Economists have understood that for centuries. There is no reason the principle should stop operating when the government enters the picture.

Sarbanes-Oxley, Dodd-Frank and the Affordable Care Act addressed very different problems and may have produced important benefits. But all three raise a question conventional discussions of inequality often overlook:

When the government changes the rules, does it eliminate economic privilege - or merely change who is best positioned to capture it?

And when talented people discover that navigating the rules offers greater rewards than creating value outside them, we should ask one final question:

Did we redistribute the pie - or did we also make it smaller?

Tyler Durden Fri, 10/02/2026 - 20:55

US Squeezes China's Jet Parts Supply As Rare Earth Showdown Escalates

Zero Hedge -

US Squeezes China's Jet Parts Supply As Rare Earth Showdown Escalates

If you want an indication that resource nationalism and Beijing's weaponization of critical material exports to gain leverage over the US in high-stakes trade negotiations are accelerating, a new report Thursday afternoon says the Trump administration is planning to slow shipments of commercial jet parts to China.

Reuters cites several people familiar with the Commerce Department's moves to slow export licensing and limit the quantities of jet parts approved for shipment to China's state-owned planemaker COMAC to prevent stockpiling.

Officials have also explored new licensing requirements covering aviation hydraulic fluid and rules that could make it easier to restrict landing gear and other components.

The report stated:

The slowdown has taken several forms. The Commerce Department slowed export licensing for airplane parts bound for China in recent weeks, two other sources told Reuters.

Officials have also expressed interest in issuing an export regulation that could make it easier to restrict landing gear and other aircraft parts to China, two sources said. A draft version included a new licensing requirement on aviation hydraulic fluid shipped by US suppliers like ExxonMobil, one of the people said.

And the Commerce Department has been ⁠limiting the number of parts licensed to be shipped to China's state-owned planemaker, COMAC, to keep the company from stockpiling, another source said.

What this suggests is that last month's Trump-Xi meeting in Washington produced no resolution on rare earths, only now an increased willingness by Beijing to tighten restrictions on critical material exports to the US and the West even further. 

This has produced shortages of gallium, germanium, tungsten, and other critical materials essential to the looming defense rearmament supercycle, and in return, we've launched our "own the bottlenecks" theme. 

In early 2025, China ramped up restrictions on critical material exports to the US, while the Trump administration sought a level playing field and has choked off China's access to cheap crude, whether from Cuba, Venezuela, or through the Strait of Hormuz.

Tyler Durden Fri, 10/02/2026 - 20:30

FBI Made Over 8,900 Arrests, Located 1,410 Child Victims Under Operation Summer Heat 2.0

Zero Hedge -

FBI Made Over 8,900 Arrests, Located 1,410 Child Victims Under Operation Summer Heat 2.0

Authored by Naveen Athrappully via The Epoch Times,

The Federal Bureau of Investigation has located 1,410 children and arrested 8,927 individuals in around three and a half months under Operation Summer Heat 2.0.

FBI Director Kash Patel speaks at the Nassau County Police Academy David S. Mack Center for Training and Intelligence in Garden City, N.Y., on Aug. 14, 2026. Samira Bouaou/The Epoch Times

Compared to Operation Summer Heat 1.0, which concluded in 2025, arrests are up 3 percent and the number of children located is higher by 34 percent, according to a Sept. 30 post on X by FBI Director Kash Patel. A total of 5,013 weapons have been seized in the current operation, a 120 percent jump from last time.

Operation Summer Heat 2.0 - active between June 1 and Sept. 20 - included the seizure of more than 59,525 pounds of cocaine and more than 1,499 pounds of fentanyl. Six most-wanted fraudsters were caught during this period, while six alleged cybercriminals were extradited.

In an Aug. 29 post on Facebook, FBI Omaha said that under Operation Summer Heat 2.0, they worked with various state, local, tribal, and federal partners in Nebraska and Iowa, resulting in the arrest of around 95 individuals and the seizure of 119 weapons.

The FBI said in a Sept. 14 statement that the operation led to the arrests of 662 individuals across the state of Louisiana, with 315 firearms seized.

"Communities are safer because of our ongoing partnerships and initiatives like Operation Summer Heat 2.0," Special Agent in Charge Jonathan Tapp said in the statement. "Incarcerating a dangerous criminal for one night or even a few hours is 100 percent ineffective at maintaining public safety. However, putting them in prison for years, is a different story."

"This year, the FBI reported the largest year-to-year decrease in violent crime since we started collecting and reporting numbers in 1936," Tapp said.

Last year's Operation Summer Heat, which ran from June 24, 2025, to Sept. 20, 2025, had led to the arrests of 8,629 individuals, with 2,281 firearms being seized. In addition, 1,053 children were identified or located.

A July 2026 report from the think tank Council on Criminal Justice that assessed crime statistics across various U.S. cities found decreases in various crimes.

Homicides were down by 18 percent in the first half of 2026 compared with the first half of last year, according to the report. In addition, aggravated assaults were down 2 percent and gun assaults were down 6 percent.

In a Department of Homeland Security (DHS) statement, Lauren Bis, assistant secretary at the DHS's Office of Public Affairs, credited the Trump administration's policies for lower crime rates, saying it was no surprise that the decline in crime coincided with the deportation of criminal illegal immigrants.

The Council on Criminal Justice suggested in a July 23 statement that no single factor may be responsible for the declining crime numbers.

"Murder and other crime rates are falling across the map, in cities with different political leadership, housing and economic conditions, policing and prosecution strategies, violence reduction models, and levels of federal enforcement activity," Council on Criminal Justice President Adam Gelb said in the statement.

"Local policies and programs surely matter, but the striking consistency of the decline suggests that macro-level forces are exerting enormous influence as well," Gelb said.

Criminal Illegal Immigrants

Meanwhile, the Trump administration continues to crack down against criminal illegal immigrants.

On Sept. 29, the DHS announced that it had recently deported several illegal immigrant gang members, including violent assailants, burglars, and murderers.

Among the deported were a Surenos gang member from Mexico convicted of second-degree murder, a Mexican Mafia gang member with aggravated assault and murder convictions, and an MS-13 gang member with an international warrant for murdering a police officer, the department said.

The DHS also announced on Sept. 30 that it had added 5,000 more illegal immigrants to its Worst of the Worst website. Launched in December, the website allows people to search through a database of dangerous illegal immigrants arrested nationwide.

With the addition of the 5,000, the total number of criminal illegal immigrants displayed on the site is now at over 40,000, according to the agency.

"This is still just a fraction of the total amount that the brave men and women of ICE work every single day to get off our streets and out of our country," DHS Secretary Markwayne Mullin said in the statement, referring to Immigration and Customs Enforcement.

"The Trump Administration is committed to transparency, and that's why this website allows the American people to see for themselves what kind of dangerous illegal aliens ICE is removing from their communities," Mullin said.

Tyler Durden Fri, 10/02/2026 - 20:05

Hochul Yanks Cornell Case From Local DA, Hands It To Letitia James - Who Already Picked A Side

Zero Hedge -

Hochul Yanks Cornell Case From Local DA, Hands It To Letitia James - Who Already Picked A Side

The Cornell fraternity case that was coming apart at the seams this week has a new prosecutor.

Gov. Kathy Hochul signed an executive order Thursday night appointing state Attorney General Letitia James as special prosecutor in the alleged Cornell sexual assault case, effectively removing Tompkins County District Attorney Matthew Van Houten from it.

"Tonight, I signed an executive order appointing Attorney General Letitia James as special prosecutor in the Cornell sexual assault case," Hochul posted on X. "New information has raised serious questions about how this case was handled, and I've lost faith in the Tompkins County DA's ability" to handle it.

Hochul said the newly released information "undercut my faith, and the public's faith" in the DA's ability to investigate and prosecute the case, and went further:

"Who knew what when? What did they do wrong? Why didn't they come forward? How was this woman denied justice?"

Her case against the locals rests on two claims. First, that the woman's own statement that she was raped "never made it into the account that Cornell police sent to prosecutors." Second, that the DA never interviewed her before deciding not to prosecute.

Van Houten had already reopened the investigation earlier this week, according to ABC News. And part of his stated reason pointed in the opposite direction from the governor's: prosecutors said the woman's original statement appeared inconsistent with claims in the civil lawsuit she later filed against members of the Chi Phi fraternity.

CBS New York obtained screenshots of messages sent two days after the alleged 2024 incident, in which one of the accused men apologized for being too intoxicated to "shut it down and kick people out before it got way out of hand," and the woman replied that "none of the sexual stuff was illegal". Her attorney, Thomas Giuffra, acknowledged an exchange took place but could not confirm those specific texts, and said his client was traumatized and in denial at the time and had been intoxicated to the point of incapacity that night. More messages surfaced Thursday that, as Breitbart's John Nolte put it, appear to "unravel" the allegations.

Hours later, the case was taken away from the prosecutor who had just reopened it, and handed to the one whose name is guaranteed to turn it into a national political fight.

James was indicted on federal bank fraud charges in October 2025, but the case was dismissed in November 2025 after a judge ruled that interim U.S. Attorney Lindsey Halligan was not lawfully serving, and two grand juries then declined to indict her again. In March, FHFA Director Bill Pulte sent new criminal referrals over her homeowner's insurance applications to federal prosecutors in Florida and Illinois. She has not been charged. She has called the effort a vendetta, with her attorney Abbe Lowell accusing the administration of trying to "rename, refile, and repeat baseless allegations."

"Every New Yorker deserves to know that when they report a crime, it will be investigated fully and fairly," James said in a statement. The DA's office did not respond to CBS' request for comment.

Three days before her appointment, James had already weighed in. "What this young woman has been forced to endure is horrific and unacceptable," she wrote in a Sept. 28 post, adding, "To her, and to all survivors: you're not alone. We stand with you."

Asked about the post at a Friday press conference, Hochul sidestepped. "I have every confidence in our attorney general to do what she's always done, look at the facts, examine the record, and draw the proper conclusions," she said, according to The Independent. James was briefer: "I will not comment on a Facebook post."

No one has been charged. Whatever happened in 2024, the question of whether the case was mishandled is now going to be answered by the most politically exposed prosecutor in the state. Duke lacrosse fans will recognize the script.

    OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Fri, 10/02/2026 - 19:40

Canada Fast-Tracks 1 Million-Bpd Pacific Link Oil Pipeline To Asia

Zero Hedge -

Canada Fast-Tracks 1 Million-Bpd Pacific Link Oil Pipeline To Asia

Authored by Julianne Geiger via OilPrice.com,

Canada is fast-tracking a proposed 1 million-barrel-per-day oil pipeline to the Pacific coast, giving Alberta another route to Asian buyers and another way around its overwhelming dependence on the U.S. market.

Prime Minister Mark Carney said Thursday that Ottawa will list the project as one of national interest, sending it through a single federal review process that Ottawa aims to complete by September 1, 2027, potentially allowing construction to begin shortly afterward.

The pipeline would run from Alberta to southern British Columbia, largely following the existing Trans Mountain corridor. Trans Mountain Corp. and Pembina Pipeline would lead the project, with the federal and Alberta governments expected to hold the majority stake. Indigenous communities would be offered at least 10% ownership.

Alberta estimates construction could cost between C$35.2 billion and C$43.7 billion. Ottawa says the project could generate more than C$20 billion in annual GDP, create as many as 140,000 jobs at peak construction and produce C$100 billion in government revenue by 2060.

Canada still sends more than 90% of its crude exports to the United States. Its main escape route is the 890,000-bpd Trans Mountain pipeline, which reaches the Pacific and is already running at capacity.

That Pacific access has become more valuable since the Iran war disrupted Middle Eastern flows and sent Asian refiners hunting for barrels that do not have to clear the Strait of Hormuz. China has already become the largest buyer of Trans Mountain's seaborne exports, taking roughly 60% of shipments, according to the Canadian government.

Ottawa and Alberta are also pursuing another 300,000 to 400,000 bpd of capacity on the existing Trans Mountain system.

The new pipeline still needs a final route, regulatory approvals, and consultation with Indigenous communities and British Columbia.

Tyler Durden Fri, 10/02/2026 - 19:15

CBS Dumps Tony Romo Two Months After OWI Arrest With Roughly $72 Million Left On His Deal

Zero Hedge -

CBS Dumps Tony Romo Two Months After OWI Arrest With Roughly $72 Million Left On His Deal

CBS Sports and Tony Romo, the former Dallas Cowboys quarterback turned lead NFL analyst, are done.

"CBS Sports and Tony Romo have mutually agreed to part ways. We thank Tony for his contributions over the past nine years and wish him the best moving forward."

J.J. Watt has been named as Romo's replacement.

Romo joined CBS in 2017 and signed a 10-year, $180 million deal in 2020, one of the richest contracts in sports broadcasting. About four years and roughly $72 million remained on it. Neither side disclosed the terms of the separation, so how much of that CBS actually pays out is anyone's guess.

The exit comes a little more than two months after Romo was arrested for operating while intoxicated on July 23 in the Milwaukee area, after competing in the Wisconsin Amateur Championship. Body camera footage showed him telling deputies he was visiting relatives before he failed field sobriety tests, and police found an open container of alcohol in his vehicle. He later pleaded no contest.

In a statement, Romo said he developed a reliance on pain medication after back surgeries from his playing days, which led to an "over-reliance" on alcohol. "None of this is an excuse. These are my failures, and I take responsibility for them," he said, adding that he plans to step away and focus on his health and family before pursuing another job.

Reviews of Romo's work in the booth had waned in recent seasons, AP noted. An OWI arrest is a convenient off-ramp from the back half of a contract signed at the top of the market.

CBS's parent, Paramount Skydance, is days from closing its $31-a-share cash takeover of Warner Bros. Discovery, with the deal expected to close Tuesday, Oct. 6. A newly merged media giant will be looking hard at every nine-figure talent contract on the books.

Former Houston Texans star J.J. Watt takes Romo's seat next to Jim Nantz and Tracy Wolfson on CBS's top NFL crew, while Ian Eagle, Ross Tucker and Evan Washburn stay together on the No. 2 team. Early reviews of Watt's fill-in work were mixed, praising his preparation while questioning his feel for big moments.

Tyler Durden Fri, 10/02/2026 - 18:50

Waste Of The Day: Defunct Veterans' Hotline

Zero Hedge -

Waste Of The Day: Defunct Veterans' Hotline

Authored by Jeremy Portnoy via RealClearInvestigations,

Contractors working at the Department of Veterans Affairs' suicide-prevention hotline earned $11.2 million without answering a single phone call, according to a Sept. 1 report from the VA inspector general.

Key facts: The Veterans Crisis Line is available 24 hours per day for veterans experiencing a mental health emergency. Trained government staff answer calls, provide support and send a medical team if there is an immediate risk of harm.

In 2019, a contractor was hired to establish a backup crisis line. If the main Veterans Crisis Line was unavailable because of a power outage or some other emergency, contractors at the backup center could answer calls.

The backup center hired new staff in 2022, but the government assumed they would not need security clearance to do their job. They were wrong; the contractors needed to record calls and document veterans' identity and mental health issues. That requires authorization from the General Services Administration, which typically takes 12 to 18 months to obtain.

Without clearance, the contractors were left to essentially sit and twiddle their thumbs. They did not answer a single phone call from a veteran from July 2022 until the contract ended in June 2023.

But a bureaucratic mess allowed the contractor to keep getting paid. Some employees said they did not realize the contractor was not doing any work. Others said they were waiting for a formal notice from a supervisor instructing them to cease payments. In March 2023, one employee even rated the contractor's work as "satisfactory."

Even with proper security clearance, the contractors might have failed to do their job properly. The company was required to staff the backup center with 92 employees, but there were less than 50 people actually assigned.

Before the contractor was hired, the VA started making its own in-house backup call center, raising questions about why the company was hired in the first place.

Summary: According to the audit, veterans are twice as likely to commit suicide compared to other Americans. Taxpayer resources must be used to provide them the resources they need, not to pay contractors without a purpose.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

Tyler Durden Fri, 10/02/2026 - 18:25

Protecting The Indispensable Right: It Is Time To Pass The Free Speech Attorney's Fee Legislation

Zero Hedge -

Protecting The Indispensable Right: It Is Time To Pass The Free Speech Attorney's Fee Legislation

Authored by Jonathan Turley via JonathanTurley.org,

A newly proposed bill in Congress could make a meaningful difference in the fight to restore free speech protections in higher education. The Restoring Civil Rights Attorney's Fees Act of 2026 would address a practical problem for civil rights and free speech groups suing public universities for the denial of free speech. When universities lose at the preliminary injunction stage, advocates cannot recoup costs and fees. The bill would allow that recovery and, as a result, level the playing field with universities, which can tap public funds to litigate these cases.

We have discussed many cases where universities spend millions in public funds to support anti-free speech policies and actions. A relatively small group of public interest groups have waged these battles with a collection of individual attorneys. Universities know that a case ending in a preliminary injunction will not result in fees or costs being paid to the victorious litigant. This bill would change that.

In my book The Indispensable Right: Free Speech in an Age of Rage, I suggest various ways that Congress could reinforce free speech rights, particularly in higher education. This is precisely the type of measure that can help tangibly support that effort.

The problem that we have faced in the free-speech community is that faculty and administrators have created an echo chamber in higher education by purging departments of dissenting voices, particularly conservative and libertarian faculty. Once in control of these universities, officials proceeded to tap into public funds to not only reinforce this ideological orthodoxy but also finance litigation.

Universities routinely lose these free speech cases. However, they know that cases that end at the preliminary injunction stage will often deny litigants the ability to recover fees or costs. In Lackey v. Stinnie (2025), a divided Supreme Court ruled that plaintiffs who received only a preliminary injunction before their case became moot were not "prevailing parties" eligible for fees under federal law.

The result is the use of public funds to drain the resources of free speech groups and advocates. It also adds a coercive element as universities pressure advocates to settle cases by noting that, if they secure a P.I., the university could fold and leave them without any recovery. They are literally using the public coffers to fight against free speech rights supported by the vast majority of citizens.

Congress can close this loophole and level the field. It will not transform higher education, but it will help guarantee that dissenting faculty and students have a fair chance against state universities.

The legislation is also important because, as I discuss in The Indispensable Right and prior columns, public universities are the final line of defense for free speech. Since the First Amendment applies directly to these universities, free-speech advocates have a greater ability to defend free speech and minority viewpoints at these schools. This can offer students an alternative to private universities as they seek environments with a modicum of tolerance (even if forced) for opposing viewpoints.

It is time to pass the Restoring Civil Rights Attorney's Fees Act of 2026.

Jonathan Turley is the best-selling author of "Rage and the Republic: The Unfinished Story of the American Revolution."

    OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Fri, 10/02/2026 - 17:40

CEO Warns The 2028 Election Will Be A Brutal Referendum On This One Thing

Zero Hedge -

CEO Warns The 2028 Election Will Be A Brutal Referendum On This One Thing

Some of Silicon Valley's biggest AI boosters are warning that artificial intelligence could become a defining issue in the 2028 presidential election as voters grow increasingly uneasy about the massive infrastructure buildout needed to power the technology.

Box CEO Aaron Levie told the Andreessen Horowitz podcast that the next presidential contest could effectively become an "AI election," forcing candidates to confront growing public anxiety surrounding the technology.

"The next election will 100% be a referendum on AI," Levie said. "So it has to happen that 2028 is the AI election."

Levie argued that supporters face a messaging problem because making the case for rapid AI development is complicated, while opposition can be communicated through simple warnings about its potential dangers.

Steven Sinofsky, a board partner at a16z and former Microsoft executive, argued that AI skeptics have already seized control of the language surrounding the debate.

"We own none of the vocabulary," Sinofsky said. "The whole debate is pause. It's swarms. It's rogue. Every word has been chosen by the people who don't want to do AI."

The warning comes as President Donald Trump aggressively pushes to cement American dominance in AI, including by accelerating construction of the data centers and energy infrastructure required to support the technology.

The Trump administration's National Policy Framework for Artificial Intelligence calls on Congress to streamline federal permitting for AI infrastructure while ensuring residential customers do not face higher electricity bills because of new data centers.

However, public opinion suggests selling that buildout could be a political death trap for candidates seeking the highest office in the land.

A Fox News poll conducted September 11-14 found 71% of registered voters oppose an AI data center being built in their area, including 46% who strongly oppose one. Just 26% support local construction.

To make matters worse, the skepticism extends beyond where the facilities are built. A September Marquette Law School Poll found 71% of Americans believe the costs of data centers outweigh their benefits, compared with 29% who believe the benefits outweigh the costs. The survey also found 64% believe AI is bad for society, while 36% consider it a good thing.

The Trump administration has sought to tackle one of the biggest sources of voter concern: electricity prices.

Under Trump's Ratepayer Protection Pledge, major technology companies including Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI agreed to build, bring or buy new power generation and cover infrastructure upgrades required for their data centers rather than passing those costs onto households.

Tyler Durden Fri, 10/02/2026 - 17:20

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