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The transcript from this week’s, MiB: Seth Bernstein, Chief Executive Officer of AllianceBernstein, 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.

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MASTERS IN BUSINESS Seth Bernstein, CEO, AllianceBernstein
Bloomberg Radio  |  Host: Barry Ritholtz

00:00:07  BARRY RITHOLTZ: This week on the podcast, we have an extra special guest. Seth Bernstein is the CEO of AllianceBernstein, as well as Head of Asset Management for Equitable Holdings. The firm manages $905-plus billion in client assets. He’s been CEO since 2017, joining the firm after 32 years at JPMorgan Chase and its predecessors. I thought this conversation was really fascinating, and I think you will too. If you’re interested in how a firm adapts to changing conditions, you’re going to find this to be a really fascinating discussion. With no further ado, my discussion with AllianceBernstein’s CEO, Seth Bernstein.

00:01:00  BARRY RITHOLTZ: Seth Bernstein, welcome to Bloomberg.

00:01:01  SETH BERNSTEIN: Barry, thank you very much. I’m delighted to be here.

00:01:04  BARRY RITHOLTZ: I’m delighted to have you. So before we start talking about AB, let’s delve a little bit into your background. You studied political science and economics at Haverford. What was the original career plan? Was it always investment management?

00:01:19  SETH BERNSTEIN: No, I had no idea what investment management was. I didn’t have anyone in my family who was in the financial services business. The original plan was for me to be an architect.

00:01:28  BARRY RITHOLTZ: Oh, really?

00:01:29  SETH BERNSTEIN: But I came up against two sort of immovable objects. One, I wasn’t terribly talented, and two, I didn’t have enough dough. So I discovered that no one makes money in architecture.

00:01:41  BARRY RITHOLTZ: Is that true?

00:01:41  SETH BERNSTEIN: No, I’m sure someone does, but not many do.

00:01:44  BARRY RITHOLTZ: Fat head, long tail. That seems to be the winner-take-all story everywhere. All right, so you come out of Haverford, ’84, somewhere around there?

00:01:52  SETH BERNSTEIN: ’84.

00:01:52  BARRY RITHOLTZ: And your first gig was at JPMorgan Chase?

00:01:56  SETH BERNSTEIN: Morgan Guaranty Trust Company.

00:01:57  BARRY RITHOLTZ: Morgan Guaranty. How long were you there for?

00:02:00  SETH BERNSTEIN: Well, Morgan ultimately was sold to Chase.

00:02:04  BARRY RITHOLTZ: So I said this wrong, and I actually had a note to myself. Your first gig after college was at JPMorgan Chase, or one of its 1980s predecessors?

00:02:16  SETH BERNSTEIN: That’s correct.

00:02:17  BARRY RITHOLTZ: Okay, I do my homework, and I literally had to put that into a parenthesis and I forgot to say it. So 1984, you start at a predecessor firm to JPMorgan Chase. Tell us about Morgan Guaranty. What were you doing there?

00:02:32  SETH BERNSTEIN: I was lucky enough to get into a year-long training program where this firm, irrationally, was willing to train liberal arts majors like me in accounting, in corporate finance, and, you know, higher-level math topics and other areas in order to build bankers and traders. That was the goal.

00:02:59  BARRY RITHOLTZ: So I understand poli sci as liberal arts, but did the economics major help at all?

00:03:05  SETH BERNSTEIN: I went to a Quaker college.

00:03:07  BARRY RITHOLTZ: So, no. All right. So you’re at Morgan Guaranty. Tell us a little bit about the roll-up process and where that ended. How did you end up —

00:03:17  SETH BERNSTEIN: Still employed?

00:03:18  BARRY RITHOLTZ: — at JPMorgan Chase? The reason I ask this is, around the same time I got married, and our bank accounts are at JPMorgan Chase, but that’s not where it started. It’s like nine banks ago, and we never changed banks. They would just send — oh, all right, Manufacturers Hanover is now Dime, is now this, is now that. And eventually it became Chase.

00:03:40  SETH BERNSTEIN: We were at the end of that merger trail, basically. JPMorgan had been an independent entity until 1958 or ’59, when they merged with the Guaranty Trust Company, and that was Morgan Guaranty. The holding company was J.P. Morgan and Company, a wonderful bank. They valued people. They almost never went outside to recruit anybody. So it was a fantastic place to have a career, because whenever they’d go into a new business — whether it was bond underwriting, because they were prohibited under Glass-Steagall — they would essentially retrain people who were already there. So you got opportunities that weren’t necessarily available elsewhere.

00:04:23  BARRY RITHOLTZ: Promote from within. Not a bad strategy.

00:04:25  SETH BERNSTEIN: Promote from within, yeah. It worked for a long time, until it didn’t.

00:04:28  BARRY RITHOLTZ: And Glass-Steagall went away in late ’99, something like that.

00:04:32  SETH BERNSTEIN: Glass-Steagall effectively went — JPMorgan was really the first. They granted powers. JPMorgan got equity powers in 1991 or ’92, and I was moved to equity capital markets, a new group. I went there and then ended up running high yield. And then I was responsible for debt capital markets, loan syndications. And then at the time of the merger, I was in media and telecom, because that’s what you do with people who get bored of doing bond underwriting. You make them bankers, whether they’re good or not.

00:05:09  BARRY RITHOLTZ: You did more than just bond underwriting. You eventually became the global head of fixed income and currency.

00:05:13  SETH BERNSTEIN: So after the merger with Chase, I was kind of thinking about what I wanted to do. JPMorgan Chase thought it was a good idea to keep me around, so they gave me an incentive to stick around. I figured that would be a great opportunity to look around for a year and figure it out. If you’ll recall, markets began to taper off at the beginning of 2000, with the whole fear and the internet, the whole issue around building dark fiber. So the high yield market was going to hell in a handbasket. And so I decided maybe it would be a good idea to move. And one of my friends said, why don’t you come over to investment management and private banking? You’d be a CFO, figure out what to do. And then he said, you should run fixed income. And I looked at him — I’d been in fixed income for most of my career — and I said, but I’ve never managed anyone’s money. And he said, don’t worry, they don’t either. So come on board. And so that’s what I did.

00:06:14  BARRY RITHOLTZ: That’s unbelievable. So you were global head of fixed income and currency for 10 years, but then CFO of investment management and private banking?

00:06:24  SETH BERNSTEIN: That was before that.

00:06:24  BARRY RITHOLTZ: That was prior. So I’m working backwards. Right. So was fixed income and currency the final spot, or was it global head of managed solutions?

00:06:33  SETH BERNSTEIN: Global head of managed solutions. I ultimately was asked to go over and run the multi-asset businesses of both investment management — JPMorgan Asset Management — and the portfolios for the private bank of JPMorgan, which was hard to do, because one was a distributor, one was a manufacturer, and we ultimately split it up because we had to. And I then ran all the discretionary money for the private bank and Chase Wealth Management.

00:07:01  BARRY RITHOLTZ: All right. So from there, 32 years at essentially many, many different jobs, but ultimately in the same organization. You decide, all right, I’ve been doing this for three-plus decades, let’s look around and see what’s out there. What led you to take the top job at AllianceBernstein? And that was 2017, correct?

00:07:26  SETH BERNSTEIN: Well, they asked.

00:07:29  BARRY RITHOLTZ: How did they find you? Obviously, when you take on a position like that, they’re looking at a variety of different applicants. How did they find you?

00:07:41  SETH BERNSTEIN: They found me through a person who worked at AXA. AXA was the ultimate owner, the majority owner, of AllianceBernstein, and it was the owner of Equitable. AllianceBernstein was part of Equitable prior to AXA’s purchasing Equitable in 1990-ish. If you’ll recall, back then, that was right after Drexel collapsed, high yield collapsed, real estate collapsed. Equitable got caught up in that. And so Equitable was acquired by AXA, the French insurer, and they made a lot of money with it. They had bought it at a pretty knockdown price. And by 2017, AXA had decided to go in a different direction. They wanted to get out of the life insurance business. And so they decided that they needed to sell Equitable, and a way to facilitate that sale was to bring AllianceBernstein and Equitable back together. And so they were looking for a new head of AllianceBernstein to do that. And a person I knew from my time at JPMorgan was at AXA, and she introduced me to a number of the senior people there. And the rest is sort of history.

00:08:55  BARRY RITHOLTZ: So you’ve been CEO since 2017. At the time you join, AllianceBernstein has $500 billion. This is significantly higher, coming up on a trillion here. But when you were joining, you’re fighting some pretty substantial headwinds. There was a big investor shift going on, really since the financial crisis, from active to passive. Fee compression was everywhere. Institutional sales trading — I remember when that was 20, 25 cents a share. It went to pennies, and then fractions of a penny. What did you find when you joined the company? Anything surprising? Was it what you were expecting?

00:09:37  SETH BERNSTEIN: No, I don’t think you have any idea.

00:09:39  BARRY RITHOLTZ: Oh, really?

00:09:40  SETH BERNSTEIN: When you go from one company after nearly 33 years into another company — I knew a lot of people. I had been a private wealth client, believe it or not, of Bernstein for, at that time, 15, 16 years. I competed against them in fixed income. I knew a lot of people who worked there, but I had no idea what was going on. What I found was a company that had had a very tough financial crisis — their own investment performance in value and in growth. If you’ll recall, AllianceBernstein is a merger of a growth manager, Alliance, with a value manager in Bernstein. And the stock had soared, and AUM of the combined entity had reached, intra-quarter, almost $900 billion. By 2012, they were $380 billion.

00:10:31  BARRY RITHOLTZ: Wow.

00:10:32  SETH BERNSTEIN: And what was 70% equities, roughly, in 2006 was 30% equities in 2012.

00:10:36  BARRY RITHOLTZ: So bonds kind of held their own, and equities collapsed.

00:10:39  SETH BERNSTEIN: Bond performance was pretty good, but equity performance collapsed. We faced a lot of redemptions. My predecessor did a very good job restructuring it — a guy they had recruited out of Goldman — and he had brought in some new teams, and the firm began to develop some really interesting investment performance in equities, which allowed us to buck the trend and have net flows in active equities, which was an important growth. He also started the firm’s evolution into private credit, which I’ve taken a lot further. And the firm was listing but doing better from a performance perspective, not gaining much assets, and then really began to take off.

00:11:20  BARRY RITHOLTZ: What do you learn after 32 years at an institution that eventually becomes JPMorgan Chase about how great financial institutions are built? What was your takeaway that you brought to AB?

00:11:35  SETH BERNSTEIN: What I think I brought to AB was a different perspective, more global than they had. They were very U.S.-centric, although they had a great Asian business. I think I brought an appreciation of how investment processes worked, and an understanding that you can have the smartest people in the world with the most impressive process deliver appalling returns. It’s serendipitous why it works when it does work. So be careful mucking around in it. I think I brought an understanding that the way they had rebuilt AllianceBernstein was to strip resources from everything but the investment teams, because they had nothing to sell. They did a very good job at it. And I began to focus on distribution, whether it’s in private wealth and institutional, and most importantly in retail. And we decided to go full focus on the insurance business, because we saw that as a really important source of growth, both for our private credit business but also our fixed income business.

00:12:38  BARRY RITHOLTZ: What do you think big institutions get wrong? It sounds like post-GFC, AllianceBernstein, before your predecessor really took the reins, kind of was stumbling. It’s a little bit of hindsight that we know all the things that were going wrong with large active managers, but generally speaking, what is it about big institutions that they sometimes just don’t see these things coming, and stumble into the dark on these issues that clearly you identified as problematic?

00:13:16  SETH BERNSTEIN: Look, I think when the good Lord created business models, asset management was really blessed, right? You have no need for capital, or de minimis need for capital, working capital in the business. Your whole revenue stream is structured on ad valorem pricing. So even when you destroy value and markets go up, you make more money. Kind of a wonderful thing.

00:13:41  BARRY RITHOLTZ: Right? A 10% tailwind never hurts.

00:13:43  SETH BERNSTEIN: Never hurts. And we’ve certainly benefited, as has the industry as a whole, from that consequence. Thirdly, you get to work with some of the most interesting, if weirdest, people in the world.

00:13:55  BARRY RITHOLTZ: Absolutely true.

00:13:56  SETH BERNSTEIN: And frankly, particularly when you have an RIA and you have to be focused on wealth management, you better become a really good fiduciary. Because if you’re not putting your clients’ interests first, you’re going to lose them, because all you have is their confidence in you. Because your business, Barry, is a word-of-mouth business. People don’t come to you — I suspect not — because they’ve heard you on your show. They come to you because you have clients who say, this guy protected us.

00:14:23  BARRY RITHOLTZ: Yeah. There’s an aspect of being a fiduciary that seems so obvious today, but 15 years ago, the fiduciaries were a small minority. And I’ve been saying this for 30 years, and it’s taken me being wrong for decades before the industry caught up.

00:14:43  SETH BERNSTEIN: I’m not sure the industry is there yet.

00:14:45  BARRY RITHOLTZ: You look at the big brokerage firms — at the very least, they’ve all become hybrid RIAs.

00:14:50  SETH BERNSTEIN: That’s fair.

00:14:51  BARRY RITHOLTZ: And the dominant fee structure is no longer transactional commission. It’s pretty much fee-based. But when I discovered this in the 1990s, I thought, oh, this has to change right away. I don’t see how this — and it took literally 25 years before the industry, and the financial crisis certainly helped.

00:15:12  SETH BERNSTEIN: Well, but the industry hasn’t done itself any favors about it either. I mean, while I don’t particularly care for abusive and overly ruled legislation, the changes that they were trying to make with regard to forcing a higher fiduciary orientation was not a bad idea and concept.

00:15:36  BARRY RITHOLTZ: No, it was a great idea.

00:15:37  SETH BERNSTEIN: But the industry fought it pretty much.

00:15:38  BARRY RITHOLTZ: Well, because it meant they couldn’t spin these accounts around.

00:15:41  SETH BERNSTEIN: That’s right.

00:15:42  BARRY RITHOLTZ: And generate much higher fees. I mean, look, either it’s a fiduciary standard or it’s not.

00:15:50  SETH BERNSTEIN: It is not black and white.

00:15:51  BARRY RITHOLTZ: Right? You could play with suitability. You know, I used to say, what does suitable mean? Don’t sell IPOs to grandma. That’s suitability. But that isn’t the same as being legally obligated to put the client’s interest first. And the crazy thing is — and I don’t want to go on a rant on this here, because this is about you, not me — but shouldn’t your relationship with the person handling your finances be more like your doctor, lawyer, accountant, and less like the guy selling you a used Honda or BMW? That just doesn’t make any sense to me.

00:16:28  SETH BERNSTEIN: You see, to me, that’s the key issue that I think the industry’s gotten wrong, because I would dismiss the accountant and the attorney. There is no one you put more trust in than your healthcare advisor. After that, who’s the next?

00:16:42  BARRY RITHOLTZ: You would think it would be the person handling your money.

00:16:45  SETH BERNSTEIN: It’s your future. It’s your kids’ education, right? It’s your charitable intent. Your —

00:16:49  BARRY RITHOLTZ: Retirement.

00:16:50  SETH BERNSTEIN: It’s your retirement. Yeah. I think it’s really important, and I think we ignore that to our detriment.

00:16:56  BARRY RITHOLTZ: Coming up, we continue our conversation with Seth Bernstein, discussing the turnaround at AllianceBernstein since he’s become CEO. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

00:17:12  BARRY RITHOLTZ: I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Seth Bernstein. He is the CEO of AllianceBernstein, a firm which is managing over $905 billion and is majority owned by Equitable Holdings. About 31% is publicly traded. Is that approximately right?

00:17:34  SETH BERNSTEIN: Approximately right.

00:17:35  BARRY RITHOLTZ: So let’s talk a little bit about what was going on when you took over, and just how this turnaround came to pass. Persistent outflows, an active management model. A lot of the research department — like so many other research departments — were having difficulty justifying a lot of the expenses. What was the immediate short-term plan? What were your first few months on the job?

00:18:02  SETH BERNSTEIN: Yeah, so let’s talk about it. When you run into trouble before the markets turn, it is a silver lining and a blessing. And the firm had begun to take actions and was very much focused on costs. And by the time I arrived, the firm was looking at the merits of moving its headquarters out of New York, because as the industry commoditized, as active sales were declining broadly, the firm’s leases were coming up, and they really had a soul-searching discussion of, can we afford to continue in New York, or do we have to diversify our bets? By the time I had arrived, no decisions had been made. They briefed me on what was going on. And it seemed pretty clear to me that there was a compelling case to reduce our footprint here in New York and go find a place where we could find really talented people who we wouldn’t have otherwise seen, because they either couldn’t afford to live in New York, or, for example, people who were really tech savvy — were we going to be high enough on the food chain that they’d look for us to hire them here in New York, when you had Google at the time searching for everybody?

00:19:09  BARRY RITHOLTZ: Right. North and south, hoovering everyone up and paying great salaries.

00:19:12  SETH BERNSTEIN: Exactly right. We do pretty well finding investors and keeping them. We know how to manage them. They have very fruitful careers. But outside of that, it’s a more challenging career development issue. And so we looked around. We looked at a number of cities. Our firm is overstocked with former consultants, and so we overanalyzed everything, and we came down to five cities, one of which was Nashville. And we announced later in 2017 that we were going to relocate to Tennessee. And we are now eight years into it.

00:19:48  BARRY RITHOLTZ: A thousand people moved down there, right?

00:19:50  SETH BERNSTEIN: Ultimately, we have 1,100-plus jobs there.

00:19:54  BARRY RITHOLTZ: And so let me guess the other cities you were looking at. Okay?

00:19:57  SETH BERNSTEIN: Are you ready? So it was 15 originally, but I’m only expecting the five.

00:20:01  BARRY RITHOLTZ: I’m going to give you three off the top of my head. Charlotte.

00:20:05  SETH BERNSTEIN: That was one of the five.

00:20:06  BARRY RITHOLTZ: Because there’s so many big banks there. There’s a lot of talent. Chicago?

00:20:09  SETH BERNSTEIN: No.

00:20:10  BARRY RITHOLTZ: Really? A lot of finance talent. Half the price of New York. Tampa?

00:20:15  SETH BERNSTEIN: Nope.

00:20:15  BARRY RITHOLTZ: Really? Okay.

00:20:17  SETH BERNSTEIN: You’re not doing so good.

00:20:18  BARRY RITHOLTZ: All right. I’m one for three. Give me some.

00:20:21  SETH BERNSTEIN: Dallas.

00:20:22  BARRY RITHOLTZ: Okay.

00:20:22  SETH BERNSTEIN: Austin, where we already have a great operation.

00:20:24  BARRY RITHOLTZ: Well, Austin was actually number five in my head, but it didn’t come out. DFA is there. There’s a few other people there.

00:20:29  SETH BERNSTEIN: Schwab’s there.

00:20:31  BARRY RITHOLTZ: They’re still a big presence in San Francisco.

00:20:34  SETH BERNSTEIN: Yeah, but they have a big operation there. And Denver.

00:20:37  BARRY RITHOLTZ: Denver. Oh, that’s really interesting. So the obvious question: why Nashville?

00:20:43  SETH BERNSTEIN: We wanted to be a big fish in a small pond, which we couldn’t have been in Charlotte. I mean, Charlotte’s a very compelling place.

00:20:50  BARRY RITHOLTZ: Or Dallas.

00:20:51  SETH BERNSTEIN: Or definitely not Dallas. Although, what a dynamic economy.

00:20:55  BARRY RITHOLTZ: Tremendous economy. A ton of hedge funds, a ton of finance.

00:20:58  SETH BERNSTEIN: A lot of talent there. A lot of people moving everywhere. Good demographics. Austin.

00:21:03  BARRY RITHOLTZ: And by the way, Dallas is a very livable city.

00:21:06  SETH BERNSTEIN: It is. I agree.

00:21:07  BARRY RITHOLTZ: Houston is just a humid swamp, but it’s located near all of the oil areas.

00:21:16  SETH BERNSTEIN: But a great art scene and really good food.

00:21:18  BARRY RITHOLTZ: Yes. Fantastic food in Houston. Absolutely. Texas is filled with all these really fun things. Dallas is Dallas. I haven’t been to Dallas in a few years. I’m going to be there in the fall. It’s just a delightful city.

00:21:32  SETH BERNSTEIN: Denver. Austin, sorry, I mentioned Austin. But Austin’s tough to get to for our people who are in Asia and in Europe.

00:21:41  BARRY RITHOLTZ: There’s that “nerd bird,” they used to call it, back and forth from Silicon Valley to Austin, decades ago in the nineties, because even then the tech companies were moving back office to cheaper Texas. Cheaper land, cheaper everything.

00:21:56  SETH BERNSTEIN: But it’s no longer back office.

00:21:58  BARRY RITHOLTZ: Well, that’s been the big change. Although post-pandemic, a lot of Wall Street moved to Miami, and then a bunch of them kind of boomeranged back. It’s kind of interesting. We are wildly off topic. Let me bring this back to your first six months at AllianceBernstein.

00:22:18  SETH BERNSTEIN: So we decide to move to Nashville. That was worth roughly $85 million a year to us, recurring.

00:22:24  BARRY RITHOLTZ: Really? Oh my goodness. That’s a massive savings.

00:22:28  SETH BERNSTEIN: It was a huge savings. Part of it was real estate, part of it was people, and it’s worked real well for us.

00:22:35  BARRY RITHOLTZ: Wow. Almost a hundred million dollars a year.

00:22:37  SETH BERNSTEIN: And here’s just another part of it: we didn’t force any of our investors to move, because we’re price takers of that talent. I think now — and I may be wrong — I think we have nearly a hundred investors who have elected to move down there.

00:22:50  BARRY RITHOLTZ: When you say investors —

00:22:52  SETH BERNSTEIN: Money managers.

00:22:53  BARRY RITHOLTZ: — who picked up and left New York, or elsewhere, or wherever.

00:22:57  SETH BERNSTEIN: Correct.

00:22:58  BARRY RITHOLTZ: I mean, don’t get me wrong, Nashville is a spectacular, super fun town.

00:23:02  SETH BERNSTEIN: It’s a great town.

00:23:04  BARRY RITHOLTZ: Just not what you think of when you think of finance.

00:23:06  SETH BERNSTEIN: Well, you know, ironically, it was the financial center for the Upper South for many, many years.

00:23:12  BARRY RITHOLTZ: Oh, really? I had no idea. That’s really interesting. All right. So you have this strategic and financial savings by moving there. What were some of the challenges? What was, oh gee, we didn’t anticipate this happening?

00:23:30  SETH BERNSTEIN: You mean in moving? Look, I think the most notable challenge is it’s a domestically focused city from a private sector employment perspective. It’s the healthcare services capital of the U.S. But guess what? Hard to find international tax accountants locally. People with those kinds of exposures, and people who had more traditional Wall Street-like training, whether from an operations or technology side. What was a delightful surprise is we got over the wall lots of resumes from people in Atlanta, Chicago, New York, Boston, and the West Coast, saying, hey, you know, I’m from there, or my spouse is from there, or I really like the lifestyle, I was there for a bachelorette party. So, but it worked. And so it’s been pretty good for us.

00:24:21  BARRY RITHOLTZ: As for the international tax accountants, do they have to physically be located in Nashville? If we learned anything during the pandemic, hey, if you have a computer and an internet connection, you can pretty much be anywhere.

00:24:34  SETH BERNSTEIN: You know, ultimately I’m a big believer in people working together collaboratively within the office. We recognize we’ve got to be flexible, and we’re never going back to five days a week. But we want people as close as we can around. But yes, we have people all over the country. We do, all over the world. We have functions which operate in multiple locations simultaneously. So of course we can do it, but we wanted critical mass there.

00:25:01  BARRY RITHOLTZ: So let’s stay with that idea of corporate culture — having everybody in the office together when you can. When you arrived at AllianceBernstein, what really struck you about the culture that needed to be preserved? What was like, hey, this is really something?

00:25:17  SETH BERNSTEIN: Deep fiduciary culture. Really, really putting clients first, whether it’s in our private wealth business or our investment teams. I think both Alliance and Bernstein did that beautifully, and I think that continues to thrive. I hope that’s one of the most important things for me about the institution. We had, as you pointed out, a very well regarded sell-side research business, which I decided to see if we could reduce our exposure to, for exactly the reasons you said. It is an accident of history why a buy-side firm had a sell-side research business to start with, but almost everyone cross-subsidizes those businesses — so their equity capital markets business or prime brokerage business. We didn’t have any of those cross-subsidies to provide to them. And so we entered into a joint venture with SocGen, Société Générale, which has proven to be pretty successful, and the quality of the research remains very strong, and they have a much stronger partner with deep markets capabilities that they are really, I think, doing a good job commercializing.

00:26:29  BARRY RITHOLTZ: And all those other banking relationships that make sense to have a research department with. Eventually, do they take over the research group, or is it always going to be a joint venture?

00:26:39  SETH BERNSTEIN: No. Ultimately, it’ll transition to them. And that was always the intention. We were quite clear about it. They were very concerned about the culture and not damaging it. It’s a large French institution, and these were a bunch of Americans and Brits. And so we needed to make sure we took stuff very, very mindfully, step by step. We’re still midway through that period. We have five years from the anniversary. We have an arrangement which we talk about from time to time. But that’s the plan.

00:27:12  BARRY RITHOLTZ: And in 2022, AB buys CarVal, which is a specialist in private market credit and debt issuance. The combined private market platform between Bernstein and CarVal is $91 — almost a hundred billion dollars.

00:27:28  SETH BERNSTEIN: That’s right. It was roughly $35 billion before we bought them, and they were another $16 billion, so call it $50 billion. So we’re nearly double what we were when we acquired them.

00:27:40  BARRY RITHOLTZ: So I’m really curious: how does what’s essentially an equity and fixed income shop like AllianceBernstein go about kicking the tires of an alternatives business? There has to be a ton of challenges there. How do you conceptualize those risks?

00:27:57  SETH BERNSTEIN: Look, I grew up lending. I ran the leveraged finance business at JPMorgan. It’s a business I knew. I’m certainly no current expert on the intricacies of it today. But prior to me arriving, AB had built quite a successful private credit business. When Lehman collapsed, we took a team out of Lehman to build a middle market lending business. They’re with us today, based in Austin, and have been remarkably successful. A private real estate debt business. And we had a natural client base. We have, in addition to Equitable — and now Corebridge, when that merger occurs — we have 60 insurance companies as clients who we manage money for.

00:28:42  BARRY RITHOLTZ: So you guys are uniquely situated to sell into the insurance market. Obviously, having a majority owner that’s an insurer provides one aspect. But given that history, what has it been like looking into that market, which I don’t hear a lot of other large shops being aggressive sellers into, the world of insurance?

00:29:05  SETH BERNSTEIN: Sellers or buyers into the world of insurance?

00:29:07  BARRY RITHOLTZ: Either or both. You are selling your product to them and taking their assets in, as well as the parent company merger — we’ll talk about that merger later. But you’re on — I don’t want to say both sides of the trade — but you’re selling into that marketplace and have a deep understanding of the insurance business.

00:29:29  SETH BERNSTEIN: We’ve been managing insurance money forever. I mean, Alliance was started by a life insurer, effectively. And the skills are very different. The client service model is totally different — highly customized, very relationship dependent. The expertise around subject matters, whether it’s regulatory accounting, whether it’s asset-liability matching, really are critical parts of that sale. We do that very well, and we continue to invest in it. And frankly, it’s the largest pool of institutional capital there is in fixed income. And it’s growing. It’s growing at a pretty rapid rate.

00:30:12  BARRY RITHOLTZ: Yeah. You guys and this other kid named Warren Buffett at Berkshire figured out, hey, there’s a tremendous amount of stable assets that —

00:30:21  SETH BERNSTEIN: What a great funding source.

00:30:23  BARRY RITHOLTZ: Right? I mean, how is it that nobody else really seems to —

00:30:26  SETH BERNSTEIN: Oh, other people have thought about that. Marc Rowan thought about it, and I think he’s done pretty well.

00:30:31  BARRY RITHOLTZ: Apollo.

00:30:32  SETH BERNSTEIN: Apollo’s done very well. KKR has figured that out. Guggenheim figured that out. A lot of firms have figured it out.

00:30:38  BARRY RITHOLTZ: Really interesting.

00:30:40  SETH BERNSTEIN: And Prudential being a good example.

00:30:41  BARRY RITHOLTZ: Well, right, but they started on the insurance side, not on the asset management side. But very fair examples. I have to ask about the ETF business. It was effectively nonexistent when you joined. Is that a fair statement?

00:31:00  SETH BERNSTEIN: That’s correct.

00:31:01  BARRY RITHOLTZ: 31 strategies, $21 billion, pretty rapidly.

00:31:03  SETH BERNSTEIN: All active.

00:31:04  BARRY RITHOLTZ: Actively managed, almost all. Yes. Very, very little in terms of just passive indexing.

00:31:08  SETH BERNSTEIN: Very little. And more importantly, almost all of them are new strategies. So they aren’t cannibalizing existing strategies. It’s not a new wrapper for the vast majority of that.

00:31:18  BARRY RITHOLTZ: So what led you to the ETF business, and how did this ramp up?

00:31:22  SETH BERNSTEIN: I hired an incredibly talented guy named Onur Erzan from McKinsey, who is now president of AllianceBernstein. And he absolutely banged the table, pounded the table, that we’ve got to ramp up our active ETF business. And I think he was right, and we backed it. And it’s been a big story for us here. It’s a growing story for us in Asia, where we really punch above our weight, and we’re excited to see what we can do in Europe.

00:31:49  BARRY RITHOLTZ: Where do you think the ETF business can go for AB? How big can this get?

00:31:56  SETH BERNSTEIN: I’m pretty confident, absent some weird regulatory or legal reason — for example, 401(k) plans have a difficult time owning ETFs; the Department of Labor can change that — but we’re not going to launch another mutual fund in the U.S., really. I think it’ll all be ETFs, unless the asset class doesn’t suit it for the liquidity constituency of it. But I think it will be the vehicle of choice, along with separately managed accounts. I think those will be the two wrappers we really focus on. For an individual who’s a client of yours, if you can deliver most of that in SMA form, he or she is paying a lot less tax, because you can tax-manage it much more effectively. You can avoid wash sales. You can have a less overly diversified portfolio, because remember, you have lots of unintended bets when you have a multi-manager portfolio.

00:32:51  BARRY RITHOLTZ: Right, right. Really interesting. Coming up, we continue our conversation with Seth Bernstein, CEO of AllianceBernstein, discussing the current environment for asset management. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

00:33:08  BARRY RITHOLTZ: I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest is Seth Bernstein. He is the CEO of AllianceBernstein and Head of Asset Management at Equitable Holdings. AllianceBernstein manages over $900 billion in client assets. I have to ask you a funny question. Many years ago, I worked with a guy who, by dumb coincidence, had the same last name as one of the names on the door of the firm.

00:33:40  SETH BERNSTEIN: Alliance.

00:33:40  BARRY RITHOLTZ: No, no, no. Totally different company, but similar concept to you. And whenever a prospective client would ask, he had this terribly amusing non-answer. Something along the lines of, look, I’m trying to create my own reputation and brand separate from the family wealth, and I just wish you would treat me as an independent — never saying, no, I’m completely unrelated to the family. I called it the non-denial denial. I’m curious, your last name is Bernstein, of AllianceBernstein. Does anyone ever say to you, hey, are you the —

00:34:22  SETH BERNSTEIN: All the time.

00:34:23  BARRY RITHOLTZ: All the time. All the time. Obviously you haven’t been there since —

00:34:27  SETH BERNSTEIN: The more insulting question is, are you the founder? And I said, no, I’d be over a hundred years old.

00:34:35  BARRY RITHOLTZ: Right. When was it founded?

00:34:38  SETH BERNSTEIN: 1967.

00:34:41  BARRY RITHOLTZ: Okay. So when you were done playing with blocks, you didn’t have to go into the office that morning?

00:34:48  SETH BERNSTEIN: No, not that day.

00:34:49  BARRY RITHOLTZ: Not that day. But this legitimately comes up —

00:34:53  SETH BERNSTEIN: Regularly, particularly in the private wealth business. But where it’s really important to make it clear is in Asia, where —

00:35:00  BARRY RITHOLTZ: Because they just assume.

00:35:01  SETH BERNSTEIN: Everyone assumes, because most of their businesses are family oriented. But just so you know, in the final moments of whether I was going to get this job or not, I did offer to change my first name to Alliance to get it.

00:35:14  BARRY RITHOLTZ: That’s really amazing. And the fascinating thing about that is, if there’s any industry that’s a meritocracy, it feels like Wall Street has evolved. You live and die on — forget annual performance — what your numbers were last quarter, last month, last week. It really is performance driven and not necessarily your last name. I had to ask if that came up. That’s really fascinating. So let’s talk a little bit about the current environment. There is a merger that was approved by shareholders of Equitable and Corebridge. I know the deal hasn’t closed, and so you probably can’t really say a whole lot about it, but this is going to create about a hundred billion dollars of Corebridge assets that are going to ultimately end up — I assume — moving over to AB. Does anything change for you guys with the upcoming merger of Equitable and Corebridge?

00:36:19  SETH BERNSTEIN: Other than the assets, I’m not aware of anything changing. And they very much value the identity that AB has. And, you know, we are thrilled by the merger and the opportunities that will bring, but no changes anticipated.

00:36:39  BARRY RITHOLTZ: So let’s talk a little bit about some of the assets that you guys have been growing. Private credit, at least up until this year, has been a house on fire. What do you think about the future of private credit? What’s going on there?

00:36:56  SETH BERNSTEIN: Banks are constrained in their ability to continue to service their clients through loans. They’ve been that way structurally, certainly since the financial crisis, and even before that it was hard to hold these assets on balance sheet. JPMorgan spent an enormous amount of time and money trying to securitize their loan book. In fact, that’s where credit derivatives started. And I worked in the groups that helped formulate that, although I certainly was in no way the father of the engineering around that. But it was critically important to reduce that exposure on most bank balance sheets. I believe that trend continues. Banks are levered players. They’re funded short. They’re not natural holders of long-lived, particularly fixed-rate, assets. Insurers are a much better home for that. And frankly, so are funds, because funds don’t offer true liquidity options for you. There’s no run on a fund. Now, what we’ve seen recently, and one of the reasons private credit has been in the news, is vehicles structured for wealthier clients did have some very limited liquidity options for them. But ultimately, there is no maturity transformation in credit. You got what you got. And frankly, I think there shouldn’t be any liquidity other than the payment of interest and repayment of the debt itself.

00:38:26  BARRY RITHOLTZ: I’m glad you say that, because I frequently have this conversation with peers elsewhere. Which part of “seven-year lockup” did you find confusing? The illiquidity premium exists because it’s illiquid. If you want liquidity, well, here’s a hundred trillion dollars in the public fixed income markets. Have at it. Am I being too harsh, or is that a fair statement?

00:38:51  SETH BERNSTEIN: Look, I think people want to get the stuff sold, and so they try to do what they can. But frankly, I think giving any expectation — and frankly, I think the documents were pretty clear — that liquidity isn’t there. But I think better that we go through this now, before there’s any significant credit deterioration. I mean, clearly there’s some deterioration out there.

00:39:13  BARRY RITHOLTZ: It’s relatively — for anyone who lived through the GFC — pretty modest. This is —

00:39:18  SETH BERNSTEIN: It’s nothing. So the truth of the matter is, while there will be loans that go bad, I think most of these funds will be pretty fine at the end of the day. And ultimately, there’s a role for it to play. But it’s really — our focus is much more institutionally focused rather than —

00:39:34  BARRY RITHOLTZ: Than what we’ve seen in some of the areas in it. And just so people understand, there’s a — depending on the funds — two, three, four percent default expectation built into these models. It’s not like, oh my God, something defaulted. That’s just what happens in the normal cost.

00:39:53  SETH BERNSTEIN: That’s the nature of lending money. Yeah, and that’s absolutely true. Now, we have private credit in our private wealth businesses as well, and I think properly structured, it has a role for you, particularly if you have a tax-advantaged location to put it.

00:40:08  BARRY RITHOLTZ: So let’s talk a little bit about private credit. I think the big issue from earlier this year — and hold aside the specific companies that kind of ran into trouble — but when you look at what’s going on, there’s a wide dispersion of underwriting quality. There’s some variance in how often and how precisely these marks happen in these non-traded things. And then, again, we come back to the redemptions in non-traded vehicles, which always kind of shock me. What does this industry need to do to get past the sort of difficult first half of the year we saw in 2026?

00:40:50  SETH BERNSTEIN: Post numbers which show that maybe there’s a deterioration, but it’s not meaningful yet. Educate clients on what’s going on by providing them more transparency — a sense of clarifying, you know, how many names are on your watch list? How many have gone non-accrual?

00:41:11  BARRY RITHOLTZ: There’s no obligation to do that currently.

00:41:14  SETH BERNSTEIN: There is, and they do it for accounting and reporting reasons. But ultimately, regular, periodic updating of your client probably makes them more comfortable with what’s going on. You should be over-communicating during periods like this.

00:41:27  BARRY RITHOLTZ: That’s really — during periods like this, or always?

00:41:31  SETH BERNSTEIN: Well, I think always, because ultimately they’re trusting that you’re giving them a balanced view of what’s going on.

00:41:37  BARRY RITHOLTZ: And to be fair, the headlines are not about the whole industry. It’s about a small handful of companies that have run into modest issues. Again, we’re not in —

00:41:52  SETH BERNSTEIN: And there’s always been fraud. I mean, that’s what we’ve seen come out from time to time in —

00:41:55  BARRY RITHOLTZ: A couple of places.

00:41:56  SETH BERNSTEIN: Sure, in a couple of places. But the truth of the matter is, there’s been an enormous amount of money that’s focused on this segment. And so I think you’re absolutely right. Structuring, terms and pricing got out of whack. But frankly, it’s a much better time to be investing today, post that event.

00:42:14  BARRY RITHOLTZ: So let’s talk a little bit about where this space is going. For most of my career, private credit has been pretty much all institutional. Over the past few years, we’ve seen a big take-up from the wealth management side — RIAs, et cetera. And then a lot of conversations about this being available for retirement accounts or 401(k)s. Tell us your thoughts. What do you think happens with private credit, and how do we do this the right way so we don’t run into these problems?

00:42:45  SETH BERNSTEIN: I think actually target date funds, 401(k)s generally, might be a perfectly appropriate place for it. Highly predictable needs. You have professional management making those decisions, usually separate from the people managing the money themselves. The sponsors of those 401(k) plans are pretty sophisticated investors in their own right. Private credit, particularly for individuals who need the income that those portfolios will generate, might have a very welcome spot in it. And in fact, we are, we think, leaders in working with other private asset managers in developing vehicles to utilize side by side with your target date funds in order to build highly diversified private credit, private equity, private real estate exposures for the beneficiaries of those plans. To me, that’s an institutional purchase, because there’s someone intermediating that decision.

00:43:57  BARRY RITHOLTZ: So let’s talk about that group. It’s AllianceBernstein, Brookfield, and Carlyle working together. How did this come together, and where do you think this goes?

00:44:08  SETH BERNSTEIN: Well, I think it came together as we were talking to other firms about what we thought. We’ve been a pioneer in the 401(k) business, in building particularly custom glide paths and target dates for big, sophisticated plan sponsors — state plans, corporate plans. And there was clearly a desire to get a higher return built in over time into these portfolios, given the aging population, the need for diversification and different sources of return. And so we went and polled a number of different firms, and we ended up finding we had really compatible philosophies and capabilities with Carlyle. We engaged with a number of firms in trying to understand who would be a natural complement to us. And from a private or real asset side, we thought Brookfield would be a very strong partner. And from a private equity side, we thought Carlyle brought a lot to the table. So we ultimately formed it. And it’s very early days. I think the industry has been too enthusiastic about how quickly all of this will be adopted. Plan sponsors tend to be a pretty conservative group of people at the end of the day, and it’s going to take years for this really to develop. But 10 years from now, will that be part of most of the large plans? I suspect it will be.

00:45:35  BARRY RITHOLTZ: How do you address some of the criticism? Anytime we see a new 401(k) plan come along, or a response come along, I always am raising my eyebrows about how much the industry — and to some degree you can blame BlackRock and Vanguard for this — has driven fees down generally, but even more so in 401(k)s. In the old days, I would look over a 401(k) and be aghast at, why are you paying 2% for an S&P 500 fund? This doesn’t make any sense. Now I look across some of the 401(k)s that I see, and they’re very inexpensive. Can privates find their way into 401(k)s at a competitive price point?

00:46:20  SETH BERNSTEIN: Yes. I think for two reasons. One, these are institutional investors in their own right, so they’re going to negotiate hard to get lower fees. Insurers don’t pay huge fees for private credit, because the cost of funds matters enormously to them. Secondly, it’s a very small portion of the total portfolio, and frankly, the cost of administering the overall plan. So between their competitive power as buyers, institutional buyers, and the small component of the total target date portfolio that they’re going to constitute, it’s a pretty small part of the fee burden that a client is going to be carrying. And frankly, it should be fairly easy to outperform net of fees.

00:47:08  BARRY RITHOLTZ: And that’s all anyone really cares about.

00:47:10  SETH BERNSTEIN: And that’s really all that people care about.

00:47:11  BARRY RITHOLTZ: Right? Especially — we’ve been in a low rate environment for so long. The expectation is maybe it’s higher for longer, but not 10 years. So we’ll be back to a lower interest rate — not zero, but lower — interest rate environment, and people want some yield. That’s really the driving thinking here.

00:47:29  SETH BERNSTEIN: I think that’s exactly what the thing is. Look, if you look at the supers in Australia, which are really interesting innovations — the superannuation funds in Australia have been intellectual leaders in how to think about retirement. And one of the really interesting things they do is they structure glide paths through retirement rather than to retirement. The last thing most people need at age 65 is to be predominantly in short-term fixed income and cash. You need to be invested.

00:48:02  BARRY RITHOLTZ: On the assumption you have another 20, 25 years to go.

00:48:05  SETH BERNSTEIN: Even 10 years. Yes. Most people don’t have enough money to retire, right? So a lot of people defer their ultimate retirement and get supplemental income elsewhere. So planning into retirement, I think, is a pretty prudent thing to do. Ultimately, if you’re able to tie that to purchasing annuities at a pretty low cost — so not purchasing them necessarily upfront, but maybe planning your target dates to end with a pool of liquidity to turn around and buy annuities at age 75, for example — you could really reduce the cost of that and give people income protection for a longer period in their life. I think there are really interesting things that are going to continue to evolve in the target date space.

00:48:47  BARRY RITHOLTZ: Really, really interesting. Since you mentioned 65, I have to ask: you’re coming up on a decade as CEO. Do you think about succession planning? Have you thought about who follows you when you decide to take your retirement?

00:49:07  SETH BERNSTEIN: You see, I think that’s one of my most basic obligations, and we spend a lot of time on succession planning, not just for me but for all the senior leadership of our firm. And yes, we have plans in place, and I don’t expect to be there —

00:49:27  BARRY RITHOLTZ: Forever.

00:49:28  SETH BERNSTEIN: Forever. Right. So, yes.

00:49:30  BARRY RITHOLTZ: So given that you’re there, in a few months, 10 years: what are you most proud of? What decisions did you make that you wish you could undo? And what of the long-term plan remains unfinished at AllianceBernstein?

00:49:47  SETH BERNSTEIN: Oh, good question. What should I have done that I didn’t do? I should have put my own people in quicker. Just as a learning to me: any new CEO, you need people you really trust can execute a transition and are bought into it. And change is a good thing. It’s not necessarily a bad thing. Secondly, I’m particularly proud of what we’ve done in our private credit space. I’m really proud of what we’ve done in the insurance space. I think those are winners. We have built a market-leading SMA platform for munis. We are growing really rapidly. We’ve automated the investment process. We give people choice, we give people information, and we give people client service that they don’t get at other firms. And it’s been growing like a weed for a while now. I’m very proud of what our fixed income team has done there. I think our private wealth business remains a gem. We have incredibly loyal clients, and I’d love to grow that business more rapidly than we have. We are growing at a good rate, but we grow organically. We haven’t grown inorganically, frankly, because valuations for RIAs are hard to justify. Also, we are very sensitive to the cultural implications of big mergers. They just don’t have a great track record of working, either in the wealth management space or the investment management space.

00:51:26  BARRY RITHOLTZ: So last question, before I get to my favorites, which I have to ask you as both the current CEO and former CFO: the AB stock price has been fairly stable. Your dividends are pretty beefy, something like nine or 10%. Is that something that is by design, or is it just the nature of — you guys throw off a lot of free cash flow?

00:51:52  SETH BERNSTEIN: The industry throws off an enormous amount of free cash flow, and in a mature business, you should probably be distributing it. In our case, it’s by design. We’re about the last publicly traded partnership.

00:52:05  BARRY RITHOLTZ: Which is an unusual structure in itself.

00:52:07  SETH BERNSTEIN: Very unusual. The only place people used to see them was really in MLPs and stuff, you know, in the energy sector in particular, and in real estate.

00:52:16  BARRY RITHOLTZ: And the dreaded K-1s.

00:52:17  SETH BERNSTEIN: And we issue K-1s, so that’s a hassle, which limits institutional interest in the stock. But that’s who we are. That’s what we have.

00:52:29  BARRY RITHOLTZ: I find that such a fascinating, quirky thing. And yet I guess it’s the institutional allergy to K-1s; otherwise, I would imagine there’d be broader ownership of a coupon like that. It’s essentially a high-yielding bond with an equity kicker.

00:52:52  SETH BERNSTEIN: That’s essentially it. It’s a convert.

00:52:54  BARRY RITHOLTZ: That’s what it looks like.

00:52:56  SETH BERNSTEIN: And I mean, the truth of the matter is that if I really believed — if the board really believed — the stock price would really pop, if our majority owner didn’t have a negative tax implication of doing it, I think you’re obliged to look at it. But the honest answer is, if you do it and you don’t get that pop, you’ve got a lot of people who are not so happy with you.

00:53:20  BARRY RITHOLTZ: Right. To say the very least. All right, I only have you for a few more minutes, so let’s jump to our favorite questions that we ask all of our guests. Starting with: who are your mentors who helped shape your career?

00:53:32  SETH BERNSTEIN: Oh, I had a number of mentors. I guess my most influential mentor was my mother. She was a very successful advertising executive, and she was no-nonsense, always. But when I go beyond that, at JPMorgan, the guy who ran equity capital markets and believed in me, a guy named Brian Watson, who ended up running the venture capital and private equity business of JPMorgan before the merger. He was a really instrumental mentor to me. I think the guy who runs Equitable, Mark Pearson, has been an unbelievable mentor and partner in running it, because the relationship between those two firms was rocky for a time. And I think we’ve run it as one larger business while maintaining the individuality of the individual business units. Those are three people that come to mind.

00:54:32  BARRY RITHOLTZ: Really, really interesting. Let’s talk about books. What are some of your favorites? What are you reading currently?

00:54:39  SETH BERNSTEIN: I am reading the new book on the Trump administration that came out, that Maggie Haberman wrote.

00:54:46  BARRY RITHOLTZ: She’s always a fun, fiery writer.

00:54:49  SETH BERNSTEIN: She sure is. And it brings it home, and it brings it live. During COVID, a bunch of friends and I got together and created a book club. And we never read fiction. And so for a while, while the book club was operating, we read a ton of fiction, which was —

00:55:09  BARRY RITHOLTZ: Give us a few names.

00:55:11  SETH BERNSTEIN: We read The Razor’s Edge. We read Kim by Rudyard Kipling. We read — God, I’m having a senior moment, which come more and more frequently, and only travel in one direction —

00:55:33  BARRY RITHOLTZ: As an older man.

00:55:34  SETH BERNSTEIN: It gets —

00:55:34  BARRY RITHOLTZ: Worse. As an older man, I can tell you it only — I’m a day older than you, and let me just share my experience: it only gets worse.

00:55:41  SETH BERNSTEIN: Right. One of the books we read, which I love, was James, which is kind of a retelling of the Huckleberry Finn story.

00:55:52  BARRY RITHOLTZ: Oh, really?

00:55:54  SETH BERNSTEIN: It’s a fantastic — James.

00:55:56  BARRY RITHOLTZ: I’m going to definitely put that on my list.

00:56:00  SETH BERNSTEIN: Tom Sawyer. Yeah.

00:56:01  BARRY RITHOLTZ: Yeah. Since you mentioned what you were doing during the pandemic, what about streaming? Are you watching or listening to anything?

00:56:09  SETH BERNSTEIN: No, my wife hates me because I don’t watch stuff with her.

00:56:12  BARRY RITHOLTZ: Oh, really?

00:56:13  SETH BERNSTEIN: I mean, we did. We watched a lot of things like Shrinking. I love it.

00:56:17  BARRY RITHOLTZ: We love Shrinking.

00:56:18  SETH BERNSTEIN: Yeah. I was a big Game of Thrones fan, stuff like that. But no, I don’t. I read a lot. So I’m not great at that.

00:56:26  BARRY RITHOLTZ: Final two questions. What sort of advice would you give to a recent college grad interested in a career in either investing, wealth management, fixed income trading, anything along those lines?

00:56:40  SETH BERNSTEIN: Sure. My advice to them is never act like you know the answer if you don’t, because people aren’t going to trust you because of your experience. So if you lose that trust early, it’s really hard to regain. Two —

00:56:54  BARRY RITHOLTZ: Wait — don’t fake it till you make it? Because that was —

00:56:57  SETH BERNSTEIN: I think you’re out of your mind.

00:56:59  BARRY RITHOLTZ: I heard that year after year after year, and always hated it.

00:57:03  SETH BERNSTEIN: The second thing I would say to you is the other side of that coin, which is: ask lots of questions. It’s okay. I mean, you can get totally irritating, and I’m going to throw you out of my office eventually, but I don’t expect you to know the answer.

00:57:18  BARRY RITHOLTZ: And our final question: what do you know about the world of investing today that might have been useful 30, 40 years ago, when you were first getting started?

00:57:29  SETH BERNSTEIN: People who think they can time the market, and do, and actually can prove out that they really do it well — you can count on one hand. Diversification: no one diversifies to get rich. You diversify to stay rich.

00:57:44  BARRY RITHOLTZ: And those are two very different skill sets, aren’t they?

00:57:47  SETH BERNSTEIN: Exactly.

00:57:48  BARRY RITHOLTZ: Really fascinating. Seth, thank you so much for being so generous with your time. This has been absolutely delightful. We have been speaking with Seth Bernstein. He is the CEO of AllianceBernstein and the Head of Asset Management at Equitable Holdings. If you enjoy this conversation, well, check out any of the 659 we’ve done over the past 12 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 crack staff that helps put these conversations together each and every week. Sean Russo is my head of research. Anna Luke is my producer. And today is the last episode of Alexis Noriega, my video producer, who helped bring Masters in Business to the video world over the past year. I just want to say an extra special thank you to Alexis for everything she’s done for us. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

 

~~~

 

 

 

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UK Mulls Military Support For Saudis Against Houthis After MbS Appeal

Amid ongoing Saudi humiliation as the Houthis have rapidly expanded their territory in Yemen, which involved a 36-hour period last week where the rebels took control of the country's entire Red Sea coast, Crown Prince Mohammed bin Salman (MbS) is desperately seeking military help from key allies in the West and regionally.

Already rejected by the Trump administration (other than some few dozen American advisors being brought into the kingdom to help guide a response), Britain is weighing whether to step up.

According to Bloomberg, the Saudi government has issued a formal request to Andy Burnham's government for operational support in repelling the Iran-aligned rebels, given their threat over the Bab el-Mandeb Strait, and amid the increased attacks inside the kingdom on airbases and Aramco oil sites.

Like the meager US response, Burnham has agreed to send British military advisors, Bloomberg notes, while contemplating potentially bigger action - which has yet to be decided.

The key problem remains that after drones struck the kingdom's East-West oil pipeline, which is expected to be down for major repairs for a month or more, Riyadh is looking to increase its amount of oil shipments to offset the losses. Reuters has indicated at least five or six weeks for the pipeline to come back online.

And now it is both the Iranians and Houthis threatening its exports, and not to mention Shia militias out of Iraq (the latter believed responsible for the drone attack on the pipeline). Oil has soared since last week's Houthi blitz against the Saudi-backed Yemeni government, allowing it to tighten its 'siege for siege' policy against Saudi Arabia.

Not only do the Saudis desperately want British help in Yemen, but MbS is flying to Cairo Tuesday, where he will likely also asked President Abdel Fattah el-Sisi for military support.

Reports also say he wants Turkish help, especially in light of the recently inked Mecca Defense Pact - which so far hasn't resulted in any kind of 'Article 5-style' response.

Saudi wants British help in Yemen, MbS is flying to Cairo today presumably to ask Sisi for the same, and perhaps hoping for Turkish support as well

Really shortlisting on experience here: it's a coalition of the previously routed https://t.co/sUkLz08WqH

— Gregg Carlstrom (@glcarlstrom) September 15, 2026

As for where things stand on the battlefield, and amid more overnight reports of Houthis ballistic missiles fired on Saudi Arabia, one pundit has offered a hilariously accurate assessment of Saudi Arabia's performance thus far. Bill Buppert of The Libertarian Institute writes:

I’m not sure there has been a more incompetent regional military power as the Saudis since Italy in WWII. They have the 8th largest military budget in the world. The Saudis pour billions into their military for the very best state-of-the-art equipment which makes the result even more comical.

Their whole army is designed for vibes and aura farming.

They’re the opposite of the Italians. Italy had terrible production, equipment and leadership, but actually fought bravely, whereas the Saudis are given all the equipment and advisors they could dream of and still fail.

Mind you, the current conflict is primarily between the Yemeni military and Houthi militants. Currently the Saudis only provide logistical support and airstrikes.

The whole first book of Dune revolves around underestimating the Fremen.

The commentator then concludes: "Money can’t buy competence" - after Washington and London have spent decades sinking billions into Saudi military readiness and base infrastructure.

Tyler Durden Tue, 09/15/2026 - 08:40

UK Mulls Military Support For Saudis Against Houthis After MbS Appeal

Amid ongoing Saudi humiliation as the Houthis have rapidly expanded their territory in Yemen, which involved a 36-hour period last week where the rebels took control of the country's entire Red Sea coast, Crown Prince Mohammed bin Salman (MbS) is desperately seeking military help from key allies in the West and regionally.

Already rejected by the Trump administration (other than some few dozen American advisors being brought into the kingdom to help guide a response), Britain is weighing whether to step up.

According to Bloomberg, the Saudi government has issued a formal request to Andy Burnham's government for operational support in repelling the Iran-aligned rebels, given their threat over the Bab el-Mandeb Strait, and amid the increased attacks inside the kingdom on airbases and Aramco oil sites.

Like the meager US response, Burnham has agreed to send British military advisors, Bloomberg notes, while contemplating potentially bigger action - which has yet to be decided.

The key problem remains that after drones struck the kingdom's East-West oil pipeline, which is expected to be down for major repairs for a month or more, Riyadh is looking to increase its amount of oil shipments to offset the losses. Reuters has indicated at least five or six weeks for the pipeline to come back online.

And now it is both the Iranians and Houthis threatening its exports, and not to mention Shia militias out of Iraq (the latter believed responsible for the drone attack on the pipeline). Oil has soared since last week's Houthi blitz against the Saudi-backed Yemeni government, allowing it to tighten its 'siege for siege' policy against Saudi Arabia.

Not only do the Saudis desperately want British help in Yemen, but MbS is flying to Cairo Tuesday, where he will likely also asked President Abdel Fattah el-Sisi for military support.

Reports also say he wants Turkish help, especially in light of the recently inked Mecca Defense Pact - which so far hasn't resulted in any kind of 'Article 5-style' response.

Saudi wants British help in Yemen, MbS is flying to Cairo today presumably to ask Sisi for the same, and perhaps hoping for Turkish support as well

Really shortlisting on experience here: it's a coalition of the previously routed https://t.co/sUkLz08WqH

— Gregg Carlstrom (@glcarlstrom) September 15, 2026

As for where things stand on the battlefield, and amid more overnight reports of Houthis ballistic missiles fired on Saudi Arabia, one pundit has offered a hilariously accurate assessment of Saudi Arabia's performance thus far. Bill Buppert of The Libertarian Institute writes:

I’m not sure there has been a more incompetent regional military power as the Saudis since Italy in WWII. They have the 8th largest military budget in the world. The Saudis pour billions into their military for the very best state-of-the-art equipment which makes the result even more comical.

Their whole army is designed for vibes and aura farming.

They’re the opposite of the Italians. Italy had terrible production, equipment and leadership, but actually fought bravely, whereas the Saudis are given all the equipment and advisors they could dream of and still fail.

Mind you, the current conflict is primarily between the Yemeni military and Houthi militants. Currently the Saudis only provide logistical support and airstrikes.

The whole first book of Dune revolves around underestimating the Fremen.

The commentator then concludes: "Money can’t buy competence" - after Washington and London have spent decades sinking billions into Saudi military readiness and base infrastructure.

Tyler Durden Tue, 09/15/2026 - 08:40

Futures Drop As Yields, Oil Prices Keep Rising

Futures are lower - but well off session lows thanks to some well-time oil sell orders just before US traders walked in to work - as bond yields continue to make new highs, with both Nasdaq and Russell lagging the S&P which feels like more de-risking into tomorrow's Fed release. AS of 8:15am ET, S&P and Nasdaq futures are down 0.1% amid premarket weakness in Mag7 with GOOG / META / MSFT all down at least 90bp but NVDA in the green helping Semis outperform on the move lower. Memory / Korea names are bid despite Kospi closing lower. Energy, Utils, and pockets of Healthcare are higher with the other sectors weaker pre-market. The yield curve is bear steepening as yields continue to march higher in response to oil/energy and growth. The 10Y rose as high as 5.04% before retracing back to around 5.0% USD is stronger. Crude is +2% as the UKR / RU détente on striking energy infra fails to materialize and growing chatter of UK aiding Saudis in fighting the Houthis. Ags are mixed and Metals are weaker, with Base outperforming Precious. Today’s macro data focus is on weekly ADP and Empire Mfg.

In premarket trading, Mag 7 stocks are mostly lower: Nvidia +0.5%, Tesla -0.1%, Amazon -0.2%, Meta -0.5%, Apple -0.6%, Alphabet -0.9%, Microsoft -0.9%

• Cryptocurrency-linked stocks fall on waning optimism that a comprehensive US crypto regulatory bill will progress this week.
• Dave & Buster’s (PLAY) drops 13% after the restaurant and arcade chain operator reported revenue for the second quarter that missed the average analyst estimate.
• Eli Lilly (LLY) is up 1.3% after Berenberg upgraded the pharmaceutical giant, with analysts arguing it’s worthy of a more significant valuation premium due to its superior growth profile and the breadth of its pipeline.
• Enova International (ENVA) falls 18% after the financial services company withdrew its applications with the Office of the Comptroller of the Currency and the Federal Reserve for the acquisition of Grasshopper Bancorp.
• Etsy (ETSY) rises 3% after Oppenheimer upgraded the online retailer to outperform, citing improvements the company is making to its platform.
• Forgent Power Solutions (FPS) gains 9% after the power equipment company reported fourth-quarter revenue and adjusted Ebitda above a guidance range given in May. The company’s backlog grew 256% year-over-year.
• Vera Therapeutics (VERA) jumps 12% after the drugmaker gave updated results from a late-stage trial of its recently approved drug for a kidney disorder.
• Waystar (WAY), which provides payment-related software to health-care organizations, rises 12% after a Reuters report that said the company is exploring options that include a sale. The report cited sources familiar with the matter.

In other corporate news, Enova International withdrew its bank regulatory applications for the acquisition of Grasshopper Bancorp. Dave & Buster’s shares fell in premarket trading after the restaurant and arcade chain operator reported second quarter results below expectations.

Elevated bond yields, which overnight hit a new 19 year high of 5.04% before reversing, are setting the tone for markets, placing surging energy costs and mounting debt firmly on traders’ radar. Enthusiasm for the AI trade, the major driver of equity gains this year, also remains tempered as debate rages over whether the technology may inflict catastrophic harm. A surprising note from Goldman found that the momentum trade is shifting notably under the surface. 

“Of course the bond selloff is weighing on tech and growth stocks,” said Louis Puga at Societe de Gestion Prevoir. “There are really two worlds at play here: on one side healthy corporate balance sheets and profits, and on the other side countries running big deficits and putting pressure on the bond market.”

The weakness in bonds raises the stakes ahead of the Federal Reserve’s interest-rate decision on Wednesday, for which money markets are pricing in more than a 90% chance of a hike. If officials hold off, or Chair Kevin Warsh signals a shallower-than-expected path of tightening, investors may demand even higher yields as protection against inflation.

“After years of inflation overshooting target, the Fed’s credibility is under scrutiny,” wrote Jenny Zeng at Allianz Global Investors. Warsh’s “recent comments leave little doubt that restoring price stability remains the priority. September is the meeting where that commitment is put to the test.”

A resilient economic backdrop and cautious investor positioning suggest the equity market can absorb more pressure before the rally comes under threat, Bloomberg proposes. “Being early is the same as being wrong, so I’d be careful not to declare the game over too soon,” Rowe says. Still, investors are keen to make protective moves: Hedging demand is ticking higher, with three of the four largest VIX trades this year all taking place in the last two weeks.

Underneath the AI rhetoric, the picture is more nuanced. Growth won’t suddenly change and adoption and token use remain high, while any move by leading AI developers to slow the frontier could hand an advantage to some of the hyperscalers. Still, investors are likely to become more selective about picking potential winners. 

Monday’s chip drawdown was also reflective of positioning: The latest BofA global fund manager survey revealed that long global semiconductor stocks is the single most crowded trade, according to more than half of respondents. The poll also showed fading exuberance around risk assets, with net 49% of managers now overweight global equities compared with 56% last month.

In politics, the Supreme Court refused to clear the Postal Service to enforce new restrictions on mail-in ballots for the midterm elections, rebuffing the Trump administration’s request to intervene. Gavin Newsom said he would not run for president in 2028 if Kamala Harris enters the race, ruling out a potential primary showdown between two of California’s most prominent Democrats.

Europe’s Stoxx 600 fell 0.2%. Deutsche Bank slipped more than 2%, echoing declines among US peers after Bank of America warned that trading revenue for the current quarter will be flat. Regional bonds were mixed. Here are the biggest movers Tuesday:

• Kety shares rose as much as 9.7% after the Polish aluminum products and packaging maker agreed to buy Italy’s Metra from KPS Capital Partners
• Shares in Acciona Energía and parent Acciona advanced after newspaper Expansión reported that EQT and Norges Bank Investment Management have joined forces to bid for the Spanish renewables company
• Defense stocks outperformed a struggling broader market on Tuesday morning, with the sector boosted by US inventory shortfalls and news that Japan could raise defense spending
• Wickes shares rose as much as 9.9%, the biggest intraday gain since May 2025, after the home improvement retailer reported a “significantly improved trend” in the third quarter and said it remains confident it can meet full-year expectations
• Kier shares rose as much as 4.8%, the most since July, after the UK infrastructure contractor’s FY26 results showed continued growth in orders and the firm announced it would reallocate capital for property investment toward the balance sheet
• Schott Pharma climbed as much as 5.5%, the most in almost a month, as JPMorgan initiates at overweight with a Street-high €27.1 price target, citing supportive structural trends and the German pharma packaging company’s market leading role
• Trustpilot shares dropped as much as 20%, the most since December 2025, after the online review platform’s results were “noisier than usual” according to JPMorgan analysts, who noted one-off items that impacted the firm’s top-line and lack of a guidance upgrade
• European lenders declined following US peers weakness after Bank of America’s CEO said trading revenue will be “relatively flat” compared with last year’s third quarter
• Lundbeck shares slid as much as 5.9%, the most since February, after Deutsche Bank downgraded the pharmaceutical company to sell, noting headwinds including a patent cliff for Rexulti that are set to weigh on sales in the medium term
• Deutz shares fell as much as 7% after the German engine manufacturer successfully completed a cash capital increase via accelerated bookbuilding
• UniCredit shares fell as much as 2.9% after RBC Capital Markets initiated coverage at sector perform, saying there are few catalysts for a rerating of the Italian lender while earnings are clouded by its ongoing attempt to acquire Commerzbank

Asian stocks declined, dragged by financials, as headwinds mount for the market on higher oil prices and US 10-year Treasury yields breaching the 5% mark. The MSCI Asia Pacific Index dropped 1%, poised for a fourth-straight session of losses. Asian banks declined, following US peers lower after Bank of America said its trading revenue will be “relatively flat.” Singapore led broad losses across the region, while equities rose in Vietnam. Spiking bond yields and oil prices are weighing on the macro outlook ahead of expected monetary tightening this week in the US and Japan. The Asian benchmark has fallen 3.7% over four days. Asian banks may take some cue after JPMorgan and Morgan Stanley give some color on trading revenue at a conference in New York tonight, said Kieran Calder, head of Asia equity research at Union Bancaire Privee.

Meanwhile, Citigroup cautioned that bearish bets have increased across global markets, with Asia having the weakest positioning. On the other hand, BlackRock has returned to an overweight recommendation on emerging-market equities including South Korea and Taiwan, betting that access to scarce resources needed for the AI boom and strong earnings will drive outperformance.

“Rising yields and energy prices are creating a risk-off environment,” said Bilal Khan, head of international equity sales, at Arif Habib. “Chip-related stocks did show some resilience earlier in the session before adding to the selloff.”

In FX, the Bloomberg Dollar Spot Index rises for a second day, with the yen underperforming.

In rates, bond markets continue to decline, with 10-year US Treasury yields hitting the highest since 2007. Yields are higher across the board in Europe too. Treasuries are mixed in early US session with long-end yields still about 2bp cheaper on the day after retreating from session highs as oil gains fade. Yields across tenors reached fresh YTD highs, the 10-year its highest level since 2007.  Front-end Treasury yields are little changed, steepening 2s10s and 5s30s curves by about 2bp; 10-year is back around 5% after peaking at 5.04% Gilts hold similar moves following Telegraph report that the Bank of England could soon stop selling long-dated bonds
$13 billion 20-year bond reopening has WI yield near 5.41%, about 21bp cheaper than last month’s new-issue auction, which tailed by half a basis point, IG dollar issuance slate includes a couple of deals. Ten offerings totaling almost $24 billion were priced Monday with issuers paying about 2bp in new issue concessions on deals that were 4.1 times covered. At least five borrowers stood down Monday, setting the stage for another heavy slate Tuesday. US session includes 20-year bond reopening at 1 p.m. New York time.

US stock futures are falling. European equities are sinking too, with a drag from financial services and banking stocks, the latter after downbeat comments from Bank of America’s CEO on trading revenue in the third quarter.

In commodities, oil prices are up, with Brent rising above $108/bbl as traders weigh ongoing disruptions to supplies, before sliding around the time US traders (but mostly Jane Street) walked into the room.  WTI crude has pared a 2.8% gain to about 1%.Gold is sinking further below $4,300/oz and base metal prices have also dipped.

US economic data slate includes weekly ADP employment change (8:15am) and September Empire manufacturing (8:30am); Fed speakers remain in external communications blackout period around the Sept. 15-16 FOMC meeting

Market Snapshot

Top Overnight News

• Saudi Arabia has increasingly found itself caught in the middle of the war between the United States and Iran. Now, the kingdom’s leadership is assessing dwindling options on how to respond.  NYT
• The Defense Department’s inspector general released its first report on the war with Iran on Monday, saying the conflict has resulted in a shortfall of U.S. munitions and “bottlenecks” in supply chains as the Trump administration works to replenish weaponry. NBC
• Offering a grim assessment of Russia’s relations with the West, President Vladimir Putin pointedly warned European governments not to deploy any troops, including peacekeeping forces, to Ukraine, saying it would mean “war.” WaPo
• Ukraine on Mon said it would end energy attacks if Russia did the same, but Kyiv is skeptical Moscow will agree to a halt. CNBC
• Ukraine Strikes Russian Refinery, Drone Plant and Ozon Facility in Massive Overnight Attack: Kyiv Post
• Japan is considering a new mid-term defense spending target of 3.5% of GDP in line with NATO and other US allies, a move that could send a shockwave through financial markets concerned about Prime Minister Sanae Takaichi’s spending plans. BBG
• Japan Prime Minister Sanae Takaichi’s cabinet approved a plan to temporarily reduce the consumption tax on food, moving closer to delivering on a key election pledge to ease the burden on households from the soaring cost of living. BBG
• The Bank of England ​is poised to announce this week that it will stop selling long-dated government bonds which ‌have been hit by a global selloff in debt markets, potentially freeing up some cash for finance minister John Healey: Telegraph 
• China’s domestic economic indicators weakened further last month, piling pressure on policymakers to take more forceful measures to reinvigorate growth in the world’s second-largest economy. Retail sales grew 0.4% year-on-year in August, data from the National Bureau of Statistics showed on Tuesday, down from 0.6% growth in July and falling short of a median forecast of 0.8% growth. FT
• Industrial America is contending with a fresh wave of supply chain inflation as Donald Trump’s Iran war pushes up energy costs, tariffs raise import prices and the AI boom strains supplies of crucial electronics. FT
• There is another factor that could add Treasury bonds volatility into the mix: hedge funds, a growing force in this market. Hedge funds held about $2 trillion of Treasurys at the start of this year, more than double their holdings five years earlier, according to the Treasury Department’s Office of Financial Research, which said hedge funds controlled a record 7% of the market. Data released by the Federal Reserve on Friday suggests that funds’ Treasury holdings remain elevated. WSJ
• US House Democrats will reportedly challenge US Treasury Secretary Bessent on rising costs at the Financial Services Committee on Tuesday, Semafor reported citing a memo, with questions also to include bonds, tariffs, Russia, Iran and crypto.
• US Supreme Court rejected Trump administration mail ballot curbs for the Midterms.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly lower following the recent tech selling that was triggered by calls from industry CEOs for a slowdown in AI development, which President Trump pushed back against, while participants digested mixed Chinese activity data and await major central bank meetings. ASX 200 underperformed amid weakness in the mining, materials, resources and financial sectors, while risk sentiment was also not helped by the rising yield environment. Nikkei 225 was choppy, while Kioxia benefited from reports that Kioxia is weighing a US listing next year. However, the index then stumbled and briefly turned negative before rebounding again. KOSPI saw two-way price action amid the choppy mood in the local tech giants. South Korea's main stock exchange saw its first after-hours trading session, trading between 16:00-20:00 KST. According to data cited by Bloomberg, volatility spikes in individual stocks triggered brief trading halts 1,637 times, over 4x the number during the regular session. This shows the lack of liquidity provided and will therefore remain risky until institutional traders provide more liquidity. Hang Seng and Shanghai Comp were indecisive following several data releases from China, including a continued contraction in House Prices and mixed activity data in which Industrial Production topped forecasts but Retail Sales disappointed, while Fixed Assets Investment weakened and the Urban Unemployment ticked higher.

Top Asian News

• China's stats bureau said August economic activity was generally steady, though the impact of an unfavourable external environment is deepening. NBS stated residents' ability and willingness to spend should be enhanced, while it added the supply of high-quality goods and services should be improved.
• Japan is said to mull raising defence spending to 3.5% of GDP, according to Bloomberg. However, Finance Minister Katayama stated that she is not aware of the report.
• Japan Finance Minister Katayama said Japan will include that a food sales tax cut will be limited to two years in upcoming legislation and that Japan will assess tax revenue, review spending and aim to lower the debt-to-GDP ratio in the upcoming budgeting process. Katayama added that Japan will control new debt issuance through the combined initial and supplementary budgets. Furthermore, she said the government will maintain market credibility by reviewing spending and revenue and will not rely on deficit-financing bonds to fund tax cuts.
• Japanese PM Takaichi is set to reshuffle LDP executives on Wednesday ahead of a cabinet reshuffle on Thursday

European bourses (STOXX 600 -0.8%) are entirely in the red, as higher energy prices and yields continue to weigh on equities. Not much in terms of geopolitics overnight, outside of the continued strikes on Saudi airbases by the Houthis. On the data front, the UK jobs report was mixed; payrolls fell more than expected while the unemployment rate held steady. Little reaction was seen in the FTSE 100. Sectors highlight the negative bias, with Retail the only sector printing modest gains. Financial Services is the clear sector laggard, with Basic Resources and Consumer Products & Services following closely behind.

Top European News

• ECB’s Moulin said the current increase in long-term bond yields reflects higher supply and increased inflation expectations and added that the inflation outlook justified recent ECB rate rise. On government debt, he said member states must take steps to reduce budget deficits. Specifically for France, he said that France’s debt agency has no problem selling bonds, with no difficulty for the French Treasury in raising funds.
• Worldpanel said UK Grocery inflation at 2.3% in 4 weeks to Sep (vs 2.1% in Aug).

FX

• Snapshot: G10s are broadly lower against the USD, which continues to benefit from stronger energy prices and elevated yields. The JPY remains the underperformer on wider yield differentials, whilst high-beta Antipodeans have been pressured by the risk environment.
• DXY is firmer this morning and trades at the upper end of a 99.47 to 99.68 range. Strength is facilitated by higher energy prices and elevated yields, with the US 10-year topping the 5.00% mark. Should geopols/yields remain stable heading into the FOMC on Wednesday, then the index will likely hover within recent ranges.
• JPY continues to underperform, paring back a few weeks of strength. As mentioned previously, the next bout of strength for the JPY would likely require a hawkish BoJ this week - one which would see policymakers explicitly guide for a faster pace of rate hikes. Elsewhere, Finance Minister Katayama was on the wires earlier, where she stated that she was not aware of reports that the government plans to boost defence budget spending to 3.5% of GDP (vs current 1.9%).
• GBP has been hampered by the broad USD strength. Earlier, markets saw the release of a mixed Jobs/Wages report, whereby Unemployment remained steady at 4.9% (exp. 5%), whilst the wages components were in-line. Overall, it will not do much to shift views at the BoE ahead of Thursday’s meeting, where expectations are for rates to remain on hold.

Fixed Income

• Global fixed benchmarks are entirely in the red, and yields have risen to multi-decade/record highs. USTs (-14 ticks) are the clear underperformers, whilst Bunds (-20 ticks) and Gilts (-14 ticks) also remain in the red.
• USTs are the clear underperformers today. It appears that an accumulation of a) higher energy prices, b) hawkish Fed repricing, c) fiscal stability woes have all caught up to the benchmark. Moreover, there may be some concession heading into the US 20-year auction later today; for reference, the Japanese outing for the same maturity was solid.
• From a yield perspective, the US 10-year (5.02%) holds beyond the key 5.00% mark, after making a peak of 5.04% earlier this morning. This brings the yield to levels not seen since the GFC. The Fed policy decision on Wednesday should see yields edge off highs (at the long-end), however, a convincing breach below the 5% mark would also likely require a hawkish SEP/commentary. This, in theory, would help ease stability concerns at the long-end; but of course, other factors such as AI-issuance and the Middle East crisis will temper any moves lower.
• Gilts are pressured alongside peers, given energy dynamics. Earlier, a mixed jobs/wages report had little impact on Gilts at the open; the Unemployment Rate remained at 4.9% (exp. 5%), whilst wages were in-line. On the supply side, The Telegraph reported that the BoE has reportedly written plans with the DMO to overhaul its money-printing programme, with plans to stop selling 20- and 30-year gilts.
• Bunds follow the above. There was little move to WPI, which saw the M/M top expectations. Thereafter, the German ZEW Survey was released, where Economic Sentiment rose incrementally from the prior, whilst Current Conditions improved. No move was seen in Bunds following the data.
• The Bank of England has reportedly written plans with the DMO to overhaul its money-printing programme, with plans to stop selling 20- and 30-year gilts, according to the Telegraph.
• Germany sells EUR 3.817bln vs Exp. 5bln 2.70% 2028 Schatz: b/c 1.26x (prev. 1.49x), average yield 3.27% (prev. 2.85%), retention 23.66% (prev. 23.4%).
• UK sells GBP 1.25bln 2029 Gilt via Tender: b/c 3.65x (prev. 3.61x), average yield 4.818% (prev. 4.062%).
• Japan sells JPY 532.1bln 20-year JGBs: b/c 4.01x (prev. 3.98), average yield 3.856% (prev. 3.698%), Tail in price 0.15 (prev. 0.17).

Commodities

• WTI Oct and Brent Nov futures remain firmer as the Middle East conflict continues to underpin the complex, with Saudi Arabia’s East-West pipeline still offline following attacks, Riyadh seeking to boost shipments through the Strait of Hormuz, and Iran reiterating that the Strait remains closed and under its control. WTI trades towards the bottom end of a USD 101.83-103.49/bbl range (vs yesterday’s USD 100.53-104.95/bbl range), while Brent resides close to the current intraday peak within a USD 106.25-107.86/bbl range (vs yesterday’s USD 104.80-109.80/bbl range).
• Dutch TTF are currently flat and off earlier highs, trading around EUR 82.50/MWh within a EUR 81.76-83.42/MWh range (vs yesterday’s EUR 79.52-84.50/MWh range), with the increasing energy-supply risks continuing to underpin European gas ahead of winter.
• Precious metals are softer as the firmer USD and high oil prices reinforce expectations of a Fed hike tomorrow. Spot gold has slipped back below USD 4,300/oz and trades within a USD 4,261-4,317/oz range (vs yesterday’s USD 4,253-4,355/oz range), with the 100 DMA at USD 4,328.90/oz).
• Base metals are subdued amid the firmer USD, softer risk tone and mixed Chinese activity data, with weak retail sales and investment offset somewhat by stronger industrial production. Copper is also pressured by fresh deliveries into LME warehouses signalling easing supply tightness. 3M LME copper trades on either side of USD 14k/t in a USD 13,985.85-14,083.68/t range.
• Half of Russia’s leading diesel-producing refineries have reduced output following drone strikes.
• Libya's oil and gas minister said they plan to raise nat gas production to 4bln SCFD within 3-5 years.
• EPA Administrator said the US is proposing to rescind all major greenhouse gas emission standards for all power plants.
• Oman November OSP for November delivery set at USD 128.48/bbl.
• China Steel Association said it condemns overproduction and urges controls and urges for supply-side remedies, and strictly enforces output controls.

Central Banks

• ECB staff committee urged for clarification whether President Lagarde will leave before the end of the term, warning that prolonged uncertainty risks damaging trust in the institution, according to FT.
• NBP's Zarzecki said there's minimal room for Polish rate changes until end-2026.

Geopolitics: Iran

• Iranian Parliament Speaker Ghalibaf said Iranian forces have full control of the Strait of Hormuz and will prevent enemy vessels from crossing.
• Iran's top security official Rezaei said don’t get distracted by the US President’s mixed signals from 'no negotiations' to 'we’re ready to talk', while he added that stakes around oil and the straits have changed, damage control won’t stop what’s coming, and there will be no talks until Iran's conditions are met, period!
• Iran's Foreign Minister Araghchi held a phone call with Lebanon's House of Representatives Speaker Berri and discussed the need to strengthen coordination to confront Israel's efforts to ignite wars against Lebanon and countries in the region. Araghchi stressed Iran's keenness to preserve Lebanon's national sovereignty and territorial integrity in the face of Israeli aggression, while he affirmed Iran's full support for the proud Lebanese resistance in the face of Israeli occupation and aggression.
• UKMTO said they received a delayed report of an incident in the Strait of Hormuz, stating that a vessel has been struck by an unknown projectile.
• UN Security Council will hold an emergency meeting on Tuesday regarding developments around the Bab Al-Mandab Strait, according to Fars News Agency.
• Iranian Foreign Minister Araghchi held talks with the leader of Iraq’s Patriotic Union of Kurdistan (PUK).

Geopolitics: Ukraine

• Sources cited by Russian press said US President Trump's statement on an energy truce is "an impromptu move", and that no decision was made on an energy truce in the latest talks in Moscow between the US delegation and Russian President Putin.
• Russia Foreign Minister Lavrov said that the US has never offered concessions to Russia over the Ukraine conflict in exchange for Moscow’s assistance in resolving the Iranian issue, Interfax reported. Furthermore, Lavrov said Russia is ready for reasonable compromises on Ukraine.
• Russia Foreign Minister Lavrov plans to meet US Secretary of State Rubio on the sidelines of the UN General Assembly in New York, RIA reported.
• Ukraine President Zelensky said Ukrainian forces made new gains at the Syzran refinery and struck a UAV production facility in Taganrog, a UAV preparation and launch base in the Oryol region, and targets in the Black Sea
• NATO military jets were scrambled in Lithuania due to a drone near Vilnius and a military fighter jet shot down the drone in Lithuanian airspace, according to the National Crisis Management Centre.
• A Russian presidential aide warned that if Poland enters a war against Russia, Moscow would use its entire military arsenal.

US Event Calendar

• 8:30 am: United States Sep Empire Manufacturing, est. 15, prior 20.6

DB's Jim Reid concludes the overnight wrap

As I continue to bravely soldier on through manflu, markets have started the week with a few notable coughs and splutters as inflationary fears and talk of an AI slowdown have led to a difficult 24 hours. Although the weekend talk was all about AI, the broader market driver was a fresh rise in energy prices, with Brent crude (+1.02%) closing at $105.68/bbl, and back above $107 this morning, while European natural gas futures (+3.83%) hit their highest since 2022. So that pushed bond yields to multi-year highs, and we even saw the 10yr Treasury yield (+2.0bps to 4.99%) move above 5% in trading for the first time since 2023. It's back above that level in Asia as I type. The 5% threshold alone would have been a newsworthy day, but we simultaneously saw a huge slump for chip stocks given the AI slowdown headlines, with the Philly semiconductor index (-5.86%) posting its worst day since July. So it was another session where September lived up to its reputation as the worst month of the year for asset performance, with bonds and equities continuing to struggle. Today we'll hear from US Treasury Secretary Bessent in his testimony to the House Financial Services Committee. It'll be interesting to see if he tries to lean in some credible way against the rising tide of bond yields.  

Before this, geopolitical headlines were the biggest factor behind yesterday’s selloff. In part, this followed Friday night's closure of Saudi Arabia’s east-west pipeline, which acts as an alternative to the Strait of Hormuz. There was hope this was largely precautionary, but the Associated Press reported officials yesterday who said the repairs could take 3-5 weeks. So with another supply route taken out, that added to fears about a lengthier period of disruption. In addition, as we discussed yesterday morning, the meeting between Iran and other Gulf nations about a temporary shipping lane in the Strait of Hormuz scheduled for Monday was postponed on Sunday. We don’t have the exact details, but Bloomberg reported that a source had suggested this was partly because of Saudi Arabia’s frustration at Iran-backed groups continuing attacks on its territory. So that dampened hopes about traffic resuming through the Strait of Hormuz anytime soon. 

We did see a decent turnaround later in the session after President Trump posted that Russia and Ukraine had agreed to halt their strikes on energy targets and made a series of posts about Iran, including that it “wants to make a deal, quickly and badly”. It later appeared that any Russia-Ukraine deal on energy strikes was not actually agreed yet, with Ukraine’s President Zelenskiy acknowledging a “strong US proposal” while saying that Ukraine would suspend its strikes if Russia were to stop attacks on Ukraine’s “energy facilities, critical infrastructure and food supply routes”. Still, with Trump’s posts suggesting an increased sensitivity to higher energy prices, and with Iran’s ILNA citing Pakistani sources that the US was seeking a “step-by-step” agreement with Iran, the rise in oil lost some of its steam.

All that meant energy prices extended the large gains we saw last week but closed well off the day’s highs. For instance, Brent crude (+1.02%) settled at $105.68/bbl by the close, after trading as high as $109.80 at the start of the US session, while WTI was +1.34% higher to $101.39/bbl. Brent is another +1.54% higher this morning at $107.31, still comfortably off yesterday's highs but creeping back towards it. Over the other side of the pond, front-end European natural gas futures were up another +3.83% yesterday to a post-2022 high of €82.60/MWh.

That backdrop of building inflation meant investors priced in a growing chance of a full-blown hiking cycle for the months ahead. Indeed, the probability of a Fed hike tomorrow was up to 92% by the close last night, from 88% at the end of last week. And looking further out, 90bps of hikes are now priced by the June 2027 meeting, up +2.0bps on the previous day. That contributed to a fresh surge in Treasury yields across the curve, with the 10yr yield briefly moving above 5% for the first time since 2023. Yields did then turn lower, helped by Trump’s post on the energy strikes, but a late sell-off still saw yields end the day at their highest levels since autumn 2023. Ultimately, the 10yr yield (+2.0bps) closed at 4.99%, while the 2yr yield (+3.4bps) saw a larger rise to 4.66%. As mentioned at the top 10yr yields are now back above 5% in Asia, trading at 5.02% as I type. 

Over in Europe the fixed income sell-off was more consistent given the continent’s bigger exposure to higher energy prices. Moreover, a hawkish shift in ECB pricing drove a big selloff at the front end in particular. So among others, Germany’s 2yr yield (+6.8bps) jumped to 3.26%, the highest since September 2023, and the 10yr bund yield (+1.2bps) hit a post-2009 high of 3.51%. The larger front-end repricing came amid a larger rise in European inflation expectations, with the Euro 1yr inflation swap (+9.8bps) up to 3.60%, whilst the US 1yr inflation swap (+0.7bps) saw a marginal rise to 2.59%. Elsewhere in Europe, the 10yr OAT yield (+2.0bps) hit a post-2008 high of 4.47%, and here in the UK, the 10yr gilt yield (+2.4bps) hit a post-2007 high of 5.37%.

As all that was going on, there was a big selloff in chip stocks yesterday after the weekend calls for some kind of AI slowdown. So the Philly semiconductor index (-5.86%) had its worst daily performance since July. President Trump again pushed back against the prospect of an AI slowdown, as he had initially on Sunday, saying yesterday that the US already had “tremendous CRIMINAL and REGULATORY power over these companies!” And then in a separate post, he said that “the United States is leading, by a lot, every other country. Don’t kill the Golden Goose!” While this helped chip stocks recover a bit, they were back near the day’s lows by the close. That slump helped to drag US equities down more broadly, with the S&P 500 (-0.48%) seeing a decent fall, despite a narrow majority of companies in the index rising on the day. In Europe, the STOXX 600 (-0.49%) registered a similar loss.

Markets are lower again in Asia, but losses are relatively contained. As I check my screens, the S&P/ASX 200 (-0.89%), the KOSPI (-0.71%), the Hang Seng (-0.23%) and the Nikkei (-0.16%) are all in negative territory with mainland Chinese stocks just on the negative side. US equity futures are down a couple of tenths of a percent with European futures flat.

Early morning data showed that China’s industrial production grew 5.2% year-on-year in August, surpassing market expectations of 4.8% and accelerating from the 4.5% growth seen in July. The stronger-than-expected performance was largely supported by robust external demand, which continued to bolster export-oriented manufacturing despite broader signs of economic weakness. However, industrial production remained the lone bright spot in an otherwise challenging economic landscape. Fixed asset investment for the January-August period contracted by -7.2%, slightly worse than the -7.1% expected decline and deteriorating further from the -6.7% contraction recorded in the previous month. As a key indicator of both public and private capital expenditure in China, the metric has remained firmly in negative territory since April, highlighting persistent weakness in investment activity. Meanwhile, retail sales increased just +0.4% year-on-year in August, falling short of +0.8% expectations and slowing from the 0.6% rise seen in July. The data suggests that consumer spending in the world's second-largest economy remains subdued despite a series of stimulus and support measures introduced by Beijing.

Separately, China’s property sector continued to weigh on economic activity, with new home prices declining by -0.17% in August, nearly matching July’s -0.18% drop. The continued fall in housing prices underscores the ongoing challenges posed by the country’s prolonged real estate downturn.

Finally, there was very little data yesterday, although we did get Canada’s CPI print for August. That was exactly as expected, with headline CPI remaining at +3.0%, and the various core measures also in line with expectations. Against that backdrop, there was little change in market pricing for the Bank of Canada’s next meeting in late-October, with a 75% chance of a hike priced in by the close.
Looking at the day ahead, data releases include UK unemployment for July, the German ZEW survey for September, and the US Empire State manufacturing survey for September. From central banks, we’ll hear from the ECB’s Escriva and Cipollone. Otherwise, US Treasury Secretary Bessent will be testifying before the House Financial Services Committee.

Tyler Durden Tue, 09/15/2026 - 08:31

Will Trump Accounts Make Every Kid A Millionaire?

Authored by Paul Mueller via The Daily Economy,

No - or at least, not by the time they finish high school.

Depending on how they're funded, a Trump Account could turn a child into a decamillionaire by retirement, or it might just be worth about $4,300 on their eighteenth birthday. As with any account, three variables dictate the outcome: contributions, rate of return, and time.

What might Trump Accounts actually be worth for children born this year? A thousand dollars takes a very long time to become a million dollars. That initial thousand dollars for children born during this administration could grow to be $4,342.45 (8.5 percent annual return), $5,122.17 (9.5 percent annual return), or $6,032.83 (10.5 percent annual return) by the time they turn 18. That's nice, but not life-changing.

Does this mean Trump Accounts won't materially benefit a lot of kids? No. The magic of the numbers really comes from the basic principles of compound interest over long periods of time, not anything special or magical about the Trump Accounts themselves.

Extending the time horizon to retirement, however, is a different story. These Trump Accounts could be worth a lot if funded aggressively and left to compound over a lifetime. By the time a child born today reaches retirement age in 2093, that $1,000 seed money could be worth: $236,478.93 (8.5 percent annual return), $437,266.28 (9.5 percent annual return), or a whopping $804,030.69 (10.5 percent annual return).

Currently, Trump Accounts are limited to $5,000 annually of individual contributions, but qualified general contributions do not count toward this. So Michael Dell's $6.25 billion gift of $250 per child toward 25 million accounts will not count against the $5,000 annual limit. The claim about Trump accounts creating millionaires only works if one assumes the money compounds at an above market rate until the kids retire at age 67, or that they receive thousands of dollars of contributions into their account while children.

Maxing out the annual contributions ($5000/year, $90,000 over 18 years), however, will deliver impressive results. By the time they turn 18, those children will have a substantial endowment of $200,957 (8.5 percent), $222,078 (9.5 percent), or $245,691 (10.5 percent) depending on their rate of return. Extend that another 50 years or so to retirement and we are talking real money: ~$11 million (8.5 percent), ~$19 million (9.5 percent), or ~$33 million (10.5 percent).*

These calculations don't account for inflation. Prices may be three and a half (2 percent annual inflation) to seven times (3 percent annual inflation) higher in 67 years. So that eye-popping number of $33 million (which will not be a common outcome) may only be worth the equivalent of $4 to $10 million in today's dollars. While 10.5 percent is the historical long-term average annual rate of return for the S&P 500, it can vary quite a bit year to year and even decade to decade. More importantly, most children will not see maxed-out annual contributions to their accounts every year.

Becoming a decamillionaire requires $5,000 contributions per child annually for 18 years - no small feat for most people. One of the architects of Trump Accounts, Brad Gerstner, however, believes that hundreds of billions of philanthropic dollars will flow into these accounts every year. Plus, these accounts may serve as a focal point for family and friends who want to contribute to children's long-term prosperity - much as grandparents of an older generation would give long-term Treasury bonds to their grandkids.

But there were already tax vehicles to invest money for your own kids, like 529 education savings accounts. Trump accounts were created to facilitate broad-based direct-transfer philanthropy. Billionaires now have a mechanism for giving money directly to millions of people without government officials or NGOs taking a big cut. The distribution of the Dells' gift just hit children's accounts this week.

Will there be widespread adoption of Trump accounts, and will people contribute to them regularly? Less than a month after the rollout, Secretary Bessent said over seven million children were enrolled - a promising start. Will billionaires contribute significant amounts of their wealth to millions of kids through Trump accounts? Michael and Susan Dell's $250 per child gift, matched by Gerstner in Indiana and Dalio in Connecticut, has become a reality. And will Trump accounts provide a viable alternative to currently unsustainable entitlement programs like Social Security? These are a few very important questions that will determine how much Trump accounts impact American society.

It's true that Trump accounts, should they be held until retirement, could be worth impressive amounts of money, especially if people contribute every year their child is a minor. But 2093 is a long way off. Saving and investing for the far future is great. Parents will still have to decide whether sacrificing thousands of dollars today is worth tens or even hundreds of thousands of dollars in future decades.

*The account projections do not incorporate the program's permitted fund fees, which may be as high as 0.10 percent annually, per this White House explanation. Even a small fee matters over 67 years.

Tyler Durden Tue, 09/15/2026 - 08:05

BYD's EU Invasion Deepens Germany's Auto Industry Crisis

The rise of right-wing populism in Germany comes as globalist policies backfire and crush Europe's industrial powerhouse. The nation's auto industry is in shambles, with layoffs and production cuts, after European leaders had the brilliant idea of letting cheap Chinese EVs flood the struggling continent.

Bloomberg cites new data from Schmidt Automotive Research showing Chinese brands accounted for 10.7% of Western European car sales in the second quarter, up from 3.4% two years earlier, highlighting how BYD Motors's cheap $34,000 EV is quickly taking market share from domestic brands. 

Chinese EVs in the EU have seen quarterly registrations surpass those of Japanese brands. Citigroup analyst Harald Hendrikse estimates Chinese brands could capture 30% of the EU market by 2035 without additional protective measures. 

The immediate result of the flood of Chinese EVs on the continent has been restructuring news from Volkswagen that upwards of 100,000 jobs could be cut by the end of the decade. More recently, Jaguar Land Rover plans to cut 10% of its workforce. 

Beyond automakers, the ripple effect of layoffs is impacting parts supplier companies: 

European Auto Job Cuts

Auto Suppliers Job Cuts

Germany, previously resistant to tougher trade barriers, is preparing tariffs on Chinese hybrids as it watches its industrial base erode, stoking the rise of Alternative für Deutschland as German political elites betray working-class folks.

Protection could give domestic brands time to restructure. Still, China's dominance in batteries and rare earths gives Beijing potential means to retaliate, complicating Europe's effort to preserve its automotive industrial base.

The quick erosion of Europe's automotive industry is a national security risk for the continent because its factories, skilled workforce and supplier networks underpin the continent's capacity to produce weapons. At a time when the Russia-Ukraine war escalates and the Middle East conflict spreads, a diminished industrial base in Europe ahead of a much-needed rearmament supercycle is just bad news for EU defenses.

Tyler Durden Tue, 09/15/2026 - 07:45

Bloomberg Terminal Hikes Prices As Inflation Hits Wall Street's Data Bills

Bloomberg Terminal subscriptions will see a price hike starting Jan. 1, 2027, according to an email Bloomberg sent out early Monday.

Monthly subscription prices will increase by $140 per Terminal at locations with multiple licenses and $155 at locations with a single license. That's about a 3% price hike, or an additional $1,680 and $1,860 annually per subscription - ​​which range from $28,320 to $31,990 per year respectively.

Email: 

Existing subscriptions that renew on or before December 31, 2026 (and new Bloomberg Terminal subscriptions installed on or before the same date) will not see a price increase until their renewal date, as it occurs, in the following two years. 

Starting January 1, 2027, Bloomberg Terminal subscriptions will see a price increase of $140 per month per subscription for client locations with multiple licenses, and a price increase of $155 per month for client locations with a single license. When these increases take effect, they stay in place for two years. The average annual increase for the two-year term is 2.97%

"As always, we continue to invest in technology and talent to ensure we provide our customers with the highest quality products, services and support in the industry while adding enhanced capabilities," the email read.

Latest innovation on the Terminal .... a chatbot:

Bloomberg's price hike shows inflation continuing to pass through into market-data costs. It also strengthens the need for cheaper alternatives.

Tyler Durden Tue, 09/15/2026 - 06:55

My Two-for-Tuesday morning reads:

• What if Elon Musk Was Always Elon Musk? The most disturbing part of the controversial new four-hour documentary. (Slate)

• Why So Many AI Researchers Think the Machines Could Kill Everyone: A combination of rapid advances, recursive self-improvement, and agentic swarms are genuinely “spooking people” inside big labs. Will Knight on Rishub Jain, who left Google DeepMind after realizing that using AI to build the next generation of AI was removing humans from the equation. (Wired) see also AI Is Powerful Enough to Crack Our Hardest Math Problems — and Kill Us All: An Anthropic safety researcher puts the odds of annihilation above 10% — doomsday now more likely than Steph Curry missing a free throw. (Wall Street Journal)

​• ‘Offensively Cheap’: Solar Power Is Looking Up: Rachel Millard reports from Chakwal, Pakistan, where a cement maker is turning dry earth and peach groves into a forest of panels — solar already generates over a quarter of its power. (Financial Times)

• The Simple Request That Could Lower Your Mortgage Rate: Lenders can now consult two different credit-scoring models and pick the one that results in the lower rate ​. (Wall Street Journal)

• A Stealth Startup Thinks It Just Hacked the Memory Shortage: Kepler Computing claims a new approach to chip design—and a proprietary material—can help end the supply bottlenecks that have sent memory prices surging. (Wired)

• The GDR and Vietnam: From Fake Coffee to Coffee Empire: New stories from the East German specialists behind this Cold War project . Katja Hoyer on how East Germany’s coffee crisis turned Vietnam into one of the world’s great coffee producers. (Katja Hoyer)

​• The Man Who Refused to Sit on the Sidelines: Sally Jenkins on Kevin Dowdell, an elite FDNY rescue-unit lieutenant, who taught his sons to take action. When he disappeared on 9/11, they went to Ground Zero to search for him.  (The Atlantic)

• Trump Is Remodeling the White House. The Group Set Up to Protect It Has Stayed Quiet: The White House Historical Association, a nonprofit set up by Jacqueline Kennedy to preserve the building’s character, has declined to criticize the president’s changes.  Dan Diamond on the White House Historical Association — the nonprofit Jacqueline Kennedy set up to preserve the building’s character — declining to criticize. (Washington Post)

• People long for simpler times, say Practical Magic reboot stars: Mix together a beloved film simmering for decades, a sprinkling of social media hype and a generous glug of star power and you just might conjure up the long-awaited sequel to Practical Magic. Naomi Clarke on the decades-simmering sequel, with Joey King and Williams as Sandra Bullock’s daughters. (BBC)

​• Does the NBA Have an Owner Problem?: The Ringer on Ballmer, Mark Walter, and soaring team valuations — “Every day or every week, it’s like: Wait a second, how can that be possible?” (The Ringer)

Video of the day: China Found Something Better Than Oil

Be sure to check out our Masters in Business with Seth Bernstein, CEO of AllianceBernstein and Head of Asset Management of Equitable Holdings, the 69% owner AB. The firm manages $905.5B. Previously, he spent 32 years at JPMorgan Chase, where he eventually became the Global Head of Managed Solutions & Strategy at JPAM, responsible for all discretionary assets for Private Banking clients, and Global Head of Fixed Income & Currency. He eventually became CFO of JPM’s Investment Management & Private Banking division.

 

AI-pilled firms are growing headcount

Source: Ramp

 

Sign up for our reads-only mailing list here.

 

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

Judge To Begin Consideration Of Bayer's $7.25 Billion Roundup Settlement

Authored by Troy Myers via The Epoch Times,

A circuit judge in Missouri is set to begin weighing on Sept. 14 agrochemical giant Monsanto's proposal of a $7.25 billion settlement for tens of thousands of lawsuits alleging that the company's popular Roundup weedkiller causes cancer.

Bottles of Roundup weed killer on a shelf at a Lowe's Garden Center in Burbank, Calif., on June 25, 2026. Justin Sullivan/Getty Images

Judge Timothy Boyer of St. Louis is not expected to issue an immediate ruling at the hearing, but he will examine Monsanto's lawyers' justification of the settlement as they seek Boyer's final approval, while some plaintiffs' attorneys argue that their clients should not be strong-armed into accepting the company's proposal.

The settlement, which was announced in February, is meant as a way to contain litigation.

It aims to resolve nearly all of the roughly 65,000 claims still pending in federal and state courts, and it's meant to cover future Roundup claims as well. The settlement received preliminary approval from Boyer on March 4.

As part of the settlement, the company would offer payouts for individuals who were exposed to Roundup and developed non-Hodgkin lymphoma. The exact award amount for each person would depend on different factors, including the severity of their cancer, their age when they were diagnosed, and whether they were exposed to the chemical at work or at home.

For occupation claimants - meaning farmers, gardeners, maintenance workers, landscapers, and more - their payouts could range from $60,000 to $165,000.

The agreement would also award residential claimants, referring to homeowners who use Roundup for their gardens, yards, and driveways. Payouts for this group could range from $20,000 to $40,000.

"Monsanto remains confident that the class settlement, which is supported by plaintiffs' counsel representing tens of thousands of potential class members, is fair to all parties, the objections have no merit, and warrants final approval following the September 14th hearing," the company said in an Aug. 28 statement.

Supreme Court's Involvement

Litigation against Monsanto, acquired by Germany-based Bayer in 2018, has plagued it for years, leading to one case reaching the highest court in the United States.

Individuals across the country have claimed that exposure to Monsanto's Roundup weedkiller, which contains a key and controversial ingredient called glyphosate, causes cancer.

Although the company has repeatedly denied any link between its products and cancer, there have been multiple instances of juries throughout the country awarding plaintiffs millions of dollars.

One of those cases involved Missouri man John Durnell, who was diagnosed with non-Hodgkin lymphoma after exposure to Roundup.

He had previously won $1.25 million in his lawsuit against Monsanto, with a Missouri jury agreeing that the agrocompany failed to follow a Missouri state law requiring a warning for risks such as cancer.

But Monsanto appealed the decision, and eventually it came before the Supreme Court. The company called that prior verdict flawed because of a legal doctrine known as preemption, which holds that federal law overrides state law when the two are in conflict.

Monsanto said the federal government, through the Federal Insecticide, Fungicide, and Rodenticide Act, had already regulated its Roundup product and glyphosate. The Environmental Protection Agency (EPA), under that law, approved glyphosate's use and has never required additional labeling related to cancer risks.

The justices, in one of the most consequential decisions from its last term, ruled 7-2 on June 25 in favor of Monsanto, holding that federal law does indeed preempt Missouri's state law, thus throwing out the basis of the lower court's verdict for Durnell.

Following the ruling, Bayer CEO Bill Anderson said the company would continue to pursue the $7.25 billion settlement.

Bayer already paid a $10 billion settlement in 2020 that resolved many Roundup cases but had left the company open to future claims.

Glyphosate Controversy

For years, health advocates have accused the key ingredient of Roundup - glyphosate - of being a cancer-causing chemical.

The EPA registered glyphosate as a pesticide in 1974, and it has since become one of the most widely used chemicals in the world for agriculture production.

As its use over time increased, so too did claims that exposure to glyphosate caused cancer.

The World Health Organization's International Agency for Research on Cancer published a March 2015 review that found the chemical as "probably carcinogenic to humans."

The Trump administration backed Monsanto in the Supreme Court case, filing a brief that urged the justices to rule favorably for the company.

In a Feb. 18 executive order, President Donald Trump said glyphosate was critical to national defense and instructed his administration to ensure that there was an adequate supply.

"Lack of access to glyphosate-based herbicides would critically jeopardize agricultural productivity," the order read. "Glyphosate-based herbicides are a cornerstone of this Nation's agricultural productivity and rural economy."

This caused a rift among the Republican base, as proponents of the Make America Healthy Again, or MAHA, movement became increasingly frustrated with the federal government's support of glyphosate.

Health Secretary Robert F. Kennedy Jr., one of the movement's champions, had previously helped secure a $289 million award from Monsanto in 2018 for a client who alleged that Roundup caused him to develop non-Hodgkin lymphoma.

But following Trump's executive order, Kennedy released a statement that appeared to balance support for glyphosate in securing the country's food supply in the short term and the need to shift away from the chemical over time.

"Pesticides and herbicides are toxic by design," Kennedy wrote in a Feb. 22 post on X. "Unfortunately, our agricultural system depends heavily on these chemicals. ... I support President Trump's Executive Order to bring agricultural chemical production back to the United States and end our near-total reliance on adversarial nations."

He stressed that Trump did not build the current system - he inherited it - and that there are ongoing efforts to shift away from harmful agricultural methods.

Two months before the Supreme Court ruling in favor of Monsanto, Kennedy testified in Congress.

Sen. Brian Schatz (D-Hawaii) asked the health secretary whether glyphosate caused cancer, and without hesitation, Kennedy responded, "Yes."

"I would say it's important to minimize consumption of glyphosate as much as possible," Kennedy said.

Tyler Durden Tue, 09/15/2026 - 06:30

It's Time To Talk About The Shitting...

Authored by Steve Watson via Modernity News,

The "enrichment" we were sold was cuisine, music and vibrant street life. What arrived, in town after town, is a sanitation standard the UN still spends billions trying to wipe out of third world nations.

Open defecation is not a Western urban myth. WHO and UNICEF still count hundreds of millions of people doing it in fields, ditches and open ground. Nigeria sits near the top of the league table. India, despite a national toilet-building drive, still records tens of millions.

When you import the people at scale and refuse to enforce the most basic public standards, you import the habit. The footage is now so routine it has become a genre.

The picturesque village of Broxtowe, Nottinghamshire, has been blessed with the kind of diversity that was only previously seen in London:

Africans defecating in residential streets in the middle of the day ?? pic.twitter.com/GrR5FPCIx3

— Rare | ???? (@RareRestore) August 31, 2026

A children's park is next. Nothing says community cohesion like a man treating a playground as an outdoor latrine and finishing the job by hand.

A man defecates in a children's park. He uses his hand to clean himself. pic.twitter.com/BEcggkUlAq

— David Atherton (@daveatherton) September 6, 2026

Truly, the contribution to British civic life is immeasurable.

Notting Hill Carnival has been doing this for years. A resident's doorbell captured carnival-goers treating her property as a trench for shitting and pissing all day. Some even apologised to the camera. Sadiq Khan's London treats the event as a celebration.

This London Resident used her Ring Doorbell Cam to capture dozens of Notting Hill Carnival Goers pissing & shitting on her property all day.

Some even apologised to the camera ??

Sadiq Kahn likes to celebrate this for Londoners. pic.twitter.com/qnXi0HGGtd

— Concerned Citizen (@BGatesIsaPyscho) September 1, 2026

Susan Watts, 69, recorded dozens of people using the space by her front door after earlier carnivals and told the Daily Mail the stench left it "like being in a filthy toilet." The council quoted her £75 to jet-wash a private area. Dignity, it turns out, has a surcharge.

THIS IS ENGLAND TODAY. IMPORT THE THIRD WORLD, BECOME THE THIRD WORLD. GOD HELP US ALL ???? pic.twitter.com/zAS3RAMXlI

— aileen B ????????? (@AileenBart60380) August 27, 2026

Oxford Street is London's main retail drag. When you have to put up signs telling adults not to defecate on it, the experiment has already failed.

This is displayed on Oxford St. London's main retail thoroughfare. When you have to put up signs saying "don't shit here" something has gone badly wrong. pic.twitter.com/ZviMfaX0on

— m o d e r n i t y (@ModernityNews) February 21, 2026

I think this was seen on Oxford Street? I was shocked- l lived in London for 15 years until mid 1990s and never saw anyone shitting in the street far less posters forbidding it.

— Cait Mercer (@MercerCait) February 21, 2026

Birmingham now has the same notices.

UK: ??

SHAMEFUL Defecating in the streets is prolific in Birmingham.

It has been said that Britain of old was paved with gold.

Ever since we've been invaded, our streets are paved with SHIT.

Don't be fooled, if our cities were still safe and proud, there would be no need... pic.twitter.com/3jrAq0ua4T

— Rogue (@RogueUnfiltered) June 1, 2026

The NHS gets it too. An intoxicated man who has already fouled himself refuses to leave A&E. Staff time, corridor space, and public patience all redirected to a problem that starts with the same refusal to use a toilet.

?INTOXICATED MIGRANT REFUSES TO LEAVE A&E HOSPITAL AFTER PISSING & SHITTING HIMSELF ?

?THIS IS WHY THE NHS IS ON ITS ARSE - ABSOLUTE STATE OF IT! pic.twitter.com/8xZIPGHEMs

— Gauci Reports (@GauciReports) November 15, 2025

Spain and Italy get the same treatment.

Muslim migrant shitting in the streets in Ceuta Spain ?? ?

Welcome to the Islamic enrichment of Europe ? pic.twitter.com/PzK8LF9SdR

— CanadianExMuslim (@ExMuslimAz) July 31, 2026

A drinking fountain in Spain with the tap used as an anal bidet, on a fixture children drink from.

Migrant washes his ass at a drinking fountain in Spain which kids use to drink. Sources confirm the tap was wedged in between his buttcheeks. Diversity is our strength! ? https://t.co/Uwoc8hwgAl

— Mark Johnson (@Mark_Johnson80) September 11, 2026

Rome, once the capital of a vast empire, now the toilet of the world.

Migrant openly shitting on the street.

Rome, Italy.

pic.twitter.com/fel6WSqCTg

— Canadian Patriot (@PPC4Liberty) May 23, 2024

Canada is not spared.

Cultural enrichment in Canada means you get to deal with public defecation. pic.twitter.com/nstSF6Jjdw

— Ian Miles (@ianmiles) September 14, 2024

Vancouver's own figures are not a vibe. City data and CTV reporting put faeces removals in the first two months of 2025 at 1,870. 2023 saw 19,900 collections. 2024 still logged 17,670.

#REPORT: Vancouver residents are calling for action as "public defecation in the city reaches new heights," with 1,870 human feces removals taking place in the first two months of 2025 alone. pic.twitter.com/NsuPTFppVk

— Canada Proud (@WeAreCanProud) May 7, 2025

Business groups run "Poop Fairy" patrols because the municipal programme is too slow.

?NEW

Video surfaces of a bus in Brampton being put out of commission

after someone took a ? on the bus

Why is public defecation 'exploding' in 2025?pic.twitter.com/ElQoE447YZ

— Tablesalt ???? (@Tablesalt13) October 22, 2025

The Nigerian government has spent years running campaigns begging its own citizens to stop doing this in public. Billboards, World Toilet Day speeches, a "Clean Nigeria: Use the Toilet" drive. Vice President Kashim Shettima said access to toilets is "about dignity, health, and safety."

Nigerian government in their desperate attempt to stop public defecation has launched a campaign urging #Nigerian man to stop defeacating in public. pic.twitter.com/QOo5QPup0L

— PSAFLIVE (@PSAFLIVE) November 13, 2022

UNICEF has repeatedly placed Nigeria among the world's worst for open defecation, with tens of millions still practising it.

India remains in the same conversation even after Swachh Bharat. The habit did not vanish because a plane ticket was purchased.

Public Defecation - Is a major problem in countries like INDIA and NIGERIA. pic.twitter.com/0PUJETequ5

— Cornbread Mafioso ?? (@Soulful1865) June 13, 2024

The historic town of Cambridge in the UK has already taken the next logical step: if the arrivals prefer squatting and shitting all over the floor, the host city will install facilities to enable just that. Labour-run Cambridge City Council spent nearly £1 million on a Silver Street toilet block that includes squat-style cubicles "preferred by some international visitors," then charges £1 to use them.

Resident Heather Boyd told the BBC: "I certainly think if I'm going to spend £1, I'm not going to squat as well. That is absolutely crazy." Britain spent centuries perfecting the flush toilet. Now taxpayers are paying in order for the third world to squat into a hole.

How culturally enriching. How much these individuals are contributing. The GDP of public health risk, the tourism brochure of a high street that needs pictograms of a squatting figure with a red line through it.

If Trafalgar Square's Fourth Plinth is meant to reflect London and the UK as it really is, Here's the next statue:

The Gentleman In Blue (Shitting In The Street) - Commissioned by the late Professor Jason Arday. pic.twitter.com/CQptIew9HY

— Mcgregor Mackenzie ??????? (@mcgregormackenz) September 11, 2026

Still, it could be worse. And it is.

Tyler Durden Tue, 09/15/2026 - 05:00

These Are The European Countries With The Newest Cars

Europe’s roads reveal a striking divide between countries where drivers regularly replace their vehicles and those where aging, secondhand cars remain the norm, according to a new report from ecarstrade.com. 

New research from B2B automotive company eCarsTrade compared vehicle fleets across more than 30 European countries and found Luxembourg sitting comfortably at the top of the rankings for the continent’s newest cars.

Nearly 43% of Luxembourg’s registered vehicles are less than five years old, the highest proportion in the study. At the other end of the age spectrum, only about 6% of its cars have been on the road for 20 years or longer. The country also replaces vehicles unusually quickly, with its annual fleet renewal rate topping 10%. Roughly 7% of Luxembourg’s cars are now fully electric.

Belgium ranked second. More than one-third of its cars are less than five years old, while the country added roughly 456,000 new vehicles in 2024. Its fleet renewal rate is about 7.5%, among the strongest in Europe. Electrification is also becoming more prominent: roughly 5% of Belgium’s total fleet is electric, while EVs account for around 28% of new registrations.

Denmark placed third, with approximately 28% of its cars less than five years old and only around 6% at least 20 years old. But Denmark stands out even more when it comes to the transition toward electric vehicles. More than half of new vehicles sold there are fully electric, and battery-powered cars already account for roughly 12% of the country's entire fleet.

The United Kingdom came in fourth. Britain has an especially small population of very old cars, with fewer than 5% of vehicles aged 20 years or more, the lowest share measured in the study. Nearly 2 million new cars were registered in 2024, helping keep the country's annual fleet renewal rate near 6%. EVs represented about 19% of new registrations, although they still make up a relatively small share of all vehicles currently on British roads.

Norway rounded out the top five and remains Europe's standout when it comes to electrification. More than 27% of all Norwegian cars are fully electric, by far the highest share among the countries examined. Even more striking, roughly 88% of new vehicles purchased in Norway are electric. That means the country's existing fleet is rapidly being transformed as older gasoline and diesel vehicles are gradually replaced.

Behind the top five were Liechtenstein, Austria, Germany, Switzerland and the Netherlands. Germany, for example, has roughly 30% of its fleet under five years old, while Switzerland is closer to 25%. The Netherlands has a somewhat older fleet overall, despite having a relatively healthy market for newer vehicles and EVs.

The report says that the opposite extreme can be found in Albania. According to the research, roughly nine out of every 10 vehicles there are at least a decade old, giving Albania the oldest fleet among the countries examined. The disparity highlights a broader economic divide in European car ownership: wealthier Western and Northern European countries generally replace vehicles more frequently, while parts of Eastern and Southeastern Europe rely much more heavily on older vehicles and secondhand imports.

That distinction can also make registration statistics somewhat misleading. A vehicle being registered in a country for the first time does not necessarily mean it is a new car. Used cars exported from countries such as Germany and France frequently enter fleets elsewhere in Europe as newly registered vehicles despite already having years of driving behind them.

“There’s a very clear split across Europe when it comes to car ages,” an eCarsTrade auto industry expert said. “Western countries keep replacing their fleets regularly, partly because incomes are high enough to realistically afford new vehicles.”

The researchers pointed specifically to Romania, Poland and Albania as markets where imported secondhand vehicles play a much larger role. As a result, the underlying age of some national fleets may be even greater than headline registration figures initially suggest.

The study, conducted in August 2026, compared more than 30 European countries using three primary measures: the percentage of cars at least 20 years old, the percentage at least 10 years old, and the percentage less than five years old. Those variables were combined into a Fleet Age Score ranging up to 100, with lower scores indicating newer national fleets.

Luxembourg recorded a score of just 1.6, well ahead of Belgium at 13.1 and Denmark at 17.1. The UK scored 18.8 and Norway 18.9, followed by Liechtenstein at 19.6, Austria at 20.8, Germany at 20.9, Switzerland at 23.7 and the Netherlands at 24.1.

Taken together, the numbers show that Europe is not moving toward a newer or more electric vehicle fleet at anything close to a uniform pace. In Luxembourg, frequent vehicle replacement keeps the average car relatively young. In Norway and Denmark, electrification is rapidly reshaping what people drive. Meanwhile, countries that depend heavily on imported used vehicles continue to operate fleets that can be dramatically older than those found just a few hundred miles away.

Tyler Durden Tue, 09/15/2026 - 04:15

US Bombs Somalia For 81st Time This Year

Authored by Dave DeCamp via Antiwar.com,

US Africa Command announced on Friday that its forces launched another airstrike in Somalia as the Trump administration continues a record-breaking bombing campaign in the country, which receives virtually no coverage in US media.

AFRICOM said the strike was launched on September 8 and targeted al-Shabaab in the vicinity of Quumbi, a village about 50 miles northeast of the southern port city of Kismayo,

As usual, AFRICOM offered no other details about the strike, and there were no statements from US-backed forces about military operations in the area that day.

"Specific details about units and assets will not be released to ensure continued operations security," AFRICOM said.

According to AFRICOM's numbers, the attack brings the total number of US airstrikes in Somalia this year to 81, higher than any other year prior to 2025, when President Trump oversaw 124 AFRICOM airstrikes, breaking the previous annual record of 63 that he set in 2019.

The US has also been conducting an air war against an ISIS affiliate in Somalia's northeastern Puntland region, and Drop Site News recently reported that a US strike was carried out in the region on September 3, though it has not been claimed by AFRICOM, suggesting that not every US attack is being announced.

According to numbers from New America, an organization that tracks the air war and also counts airstrikes that are reported but not claimed by the US, the September 8 strike would bring the total number of US bombings in Somalia this year to 83.

The US has been involved in Somalia for decades and has been fighting al-Shabaab since the George W. Bush administration backed an Ethiopian invasion in 2006 that ousted the Islamic Courts Union, a Muslim coalition that briefly held power in Mogadishu after taking the city from CIA-backed warlords.

Al-Shabaab was the radical offshoot of the Islamic Courts Union, and its first recorded attack was a suicide bombing in 2007 that targeted Ethiopian troops occupying Mogadishu. It wasn't until 2012 that the group pledged loyalty to al-Qaeda. The ISIS affiliate in Puntland started as an offshoot of al-Shabaab and first emerged in 2015.

Tyler Durden Tue, 09/15/2026 - 03:30

Older Britons Are Working Longer As Youth Unemployment Rises

Britain has a strange labor problem: the people who have spent decades working increasingly aren’t leaving, while the people trying to begin their careers increasingly can’t get in, according to Bloomberg.

More than 1.7 million people over 65 are now employed in the UK, the highest level on record. Meanwhile, youth unemployment is hovering near a decade-plus high, and nearly one million people between 16 and 24 are neither employed nor in school.

The demographic shift is dramatic. About two decades ago, there were roughly 10 working young people for every employed person over 65. Today there are only about two.

Some of this is simply good news: people are healthier, living longer and have more opportunities to work flexible schedules. But money is clearly part of the equation too. Rising living expenses have pushed some retirees back into the workforce and encouraged others to postpone retirement.

That becomes more consequential when companies aren’t creating many new positions. The Bank of England has described Britain as having a “low hire, low fire” labor market. Companies aren’t necessarily conducting massive layoffs, but they’re also reluctant to expand payrolls. When older employees remain in their jobs longer, fewer vacancies naturally work their way down the ladder.

Bloomberg writes that AI could amplify the problem. Graduate positions as a percentage of available jobs have reportedly been cut in half since 2022. Instead of building large teams of junior employees, companies can increasingly give experienced workers AI tools and ask them to produce more.

As one employment expert put it, some companies are effectively saying, “we just want to get rid of some junior staff and replace them with AIs.”

Working from home could be contributing as well. Junior employees require more training and supervision, something that becomes considerably more difficult when employees and managers aren’t regularly sitting together.

The end result is almost backwards from the traditional labor-market cycle. Britain has record numbers of retirement-age people still collecting paychecks at precisely the same time that an unusually large number of young people can’t find their first one.

Tyler Durden Tue, 09/15/2026 - 02:45

ISIS Fanatic Set To Walk Free From UK Prison In Weeks

Authored by Steve Watson via Modernity News,

An ISIS fanatic who pledged allegiance to the caliphate, circulated execution videos, and blagged his way into an NHS heart unit with a fake degree is lining up for parole in November.

GB News host Patrick Christys broke the story this week and put it as plainly as it deserves: "What a country we are."

'What a country we are!' @PatrickChristys exclusively reveals that a 'ISIS fanatic', who faked a degree to work in the NHS, could be set free onto the streets of Britain within months. pic.twitter.com/5b3enaS0z3

— GB News (@GBNEWS) September 10, 2026

Full segment:

Ali Abdillahi, a Somali-born Dutch national who has lived in Britain since the age of seven, was jailed in March 2022 for eight years and ten months.

The Old Bailey heard he ran a private Telegram group called "Sons of Abdullah," pumped out recordings of preachers calling for armed jihad, and shared Islamic State films showing executions and graphic violence.

View counts on the material ran from 280 to 1,300. Officers found a pledge of allegiance to ISIS on his phone and notebooks that laid out the same mindset.

Mr Justice Sweeney called it one of the "more serious cases of its type." The judge told Abdillahi: "You had showed you committed these offences because of your support for Islamic extremism." Sweeney added that he supported the concept of "Armed Jihad" and viewed Islamic State as the "inheritor of Islam." No separate jail term was added for the fraud that got him through the hospital doors.

In July 2020, while he was spreading that material, Abdillahi forged a biomedical science degree from the University of Hertfordshire, stuffed the lie onto his CV, and applied through an agency.

Croydon University Hospital took him on as a cardiographer. He treated heart patients. The court was told no concerns were raised about his work before his arrest on 7 August 2020 at his home in Enfield.

He then tried to use the same fake qualifications to talk a court into granting him bail on the terrorism charges. That earned him the extra ten months for perverting the course of justice.

When police first asked about the degree, he offered this: "I believe I created a character for myself, and looking back, I do not know what is real and what is not... I was convinced I had a degree. My intention was not to lie or anything like that."

Metropolitan Police Counter Terrorism Command's Commander Richard Smith said at the time: "Extremist propaganda online is extremely harmful and is a means by which terrorist groups seek to radicalise people all over the world. Abdillahi sent videos and recordings glorifying extremist violence to promote the hate-filled mindset he supported to others."

Christys noted the obvious: this was not a porter or a cleaner. "An ISIS fanatic managed to use a totally fake degree to get a real job in the NHS... he was examining people's hearts."

GB News has established he is listed for parole on 19 November. A three-year extended licence sits on top of the sentence. Whether the Home Office has even bothered to order his deportation is, according to the channel, still unclear.

'We have thrown our doors open to jihad.'@PatrickChristys asks whether the West has learnt any lessons from 'radical Islamism', 25 years on from the 9/11 terrorist attacks. pic.twitter.com/TResBYut2J

— GB News (@GBNEWS) September 11, 2026

'I could weep for the state of the UK.'

Journalist Cristo Foufas reflects on the impact of Islamist terrorism on Britain. pic.twitter.com/w8Jmq5FcJG

— GB News (@GBNEWS) September 11, 2026

This is not a one-off. In February, we reported the case of Zahid Iqbal, jailed in 2013 after plotting to bomb a Territorial Army centre in Luton with an IED strapped to a remote-controlled toy car, working from an al-Qaeda kitchen-bomb manual.

The parole board moved to free him years early despite warnings from prison and community offender managers, and despite a previous early release in 2021 that had to be revoked when he failed to comply.

Reform UK crime adviser Colin Sutton called that decision "baffling." "This wasn't a guy in his bedroom cooking something up. This was somebody who arranged training. He had links with al-Qaeda. He was a proper terrorist. And he was released early in 2021 and had to be called back in because he wasn't complying with the conditions."

Abdillahi's November date sits inside the same culture. Terrorists and fraudsters get calendars. Ordinary people who post the wrong opinion get cells.

Labour's answer to a prison system running at around 97 percent capacity has been to empty it. After public fury over plans that would have fast-tracked rapists, groomers and the killers of PC Andrew Harper, Prime Minister Andy Burnham narrowed the scheme. Rape, serious child sex offences, grooming and unlawful killing were carved out. The rest of the machine still runs.

25 years after 9/11 and Britain is quite literally importing convicted terrorists on small boats and allowing it to continue.

No wonder MI5 says the terror threat is greater today than then. pic.twitter.com/f39FMGsgfD

— Matt Goodwin (@GoodwinMJ) September 11, 2026

Official figures published this month show about 700 eligible offenders due out on 1 October, with some 2,550 released by the end of the year and around 4,500 over the following months.

Prisoners who would once have served 40 percent of a standard sentence can now walk after a third. Others who would have served two-thirds can leave at halfway. Police chiefs have already said forces will need nearly £500 million extra just to chase licence breaches and fresh offending from the wave.

The exemptions do not rescue the principle. A man who pledged himself to ISIS, tried to radicalise others, and was allowed to put electrodes on British patients with a printed-off degree is still being processed toward the street. The Home Office cannot even say, on the record, whether it intends to put him on a plane.

Britain imported the ideology, waved the fake certificate through an agency, parked him in a heart department, and is now preparing the paperwork for his return to the community.

That is not a glitch. It is the system working as built: weak borders, weaker vetting, and a justice machine that treats jihadist propaganda as a manageable risk while it panics over tweets posted by those concerned about it.

Tyler Durden Tue, 09/15/2026 - 02:00

China's Biotech Stocks Emerging As Latest Ai Trade

By Charlie Zhu, Bloomberg Markets live reporter and strategist

China’s biotech stocks are emerging as the latest AI trade, fueled by expectations the technology will accelerate drug development and boost returns.

The Hang Seng Biotech Index has risen nearly 22% this quarter, set to outperform the Hang Seng Tech gauge by the most on record in Bloomberg data going back to 2015, as investors bet artificial intelligence will reduce timelines and cost in pharmaceutical research and development. The prospect of AI-originated drugs generating licensing and royalty income in the longer run may give the rally staying power.

“AI-driven drug discovery (AIDD) is taking off in China and generating a lot of investor interest, owing to the speed and cost benefits that AI brings,” Citigroup Inc. analysts including John Yung wrote in a note this month. The sector’s low penetration of the projected $313 billion global pharmaceutical R&D market implies “significant room for growth.” 

Shares of Insilico Medicine Cayman TopCo have more than doubled since their debut in Hong Kong in end-December, while those of Shanghai-listed HitGen Inc. have gained nearly 40% this year following a 90% rally in 2025. Both companies have buy ratings from every analyst tracked by Bloomberg.

Unlike many US companies that remain loss-making, several Chinese leaders are already profitable and should see earnings accelerate as robust demand translates into stronger utilization and operating leverage, according to Citigroup. Strong growth in AI-related revenue from leading wet lab vendors — which test AI-designed drugs — in the first half and advances of drug candidates at companies such as Insilico have bolstered sentiment toward the sector.

Leading Chinese AIDD companies are also trading at steep discounts to their US peers despite broader exposure across the value chain, analysts said. Meanwhile, continued progress in clinical milestones and new partnerships offer catalysts for local players, Linda Shu, head of China healthcare research at HSBC Qianhai Securities, said in a note.

To be sure, competition remains a concern as contract research organizations, drugmakers and private platforms may expand into AIDD, while disruptive technologies could erode the advantages of existing platforms. Broader doubts about the sustainability of AI investment may also weigh on shares.

Still, “China has a strong combination of scientific talent, a large innovative-drug pipeline and extensive drug contract manufacturing infrastructure for synthesizing and testing AI-generated molecules,” said Victoria Mio, a portfolio manager at Janus Henderson Group Plc. Investors will be focused on “proprietary data, internal pipeline progress, pharmaceutical partnerships, licensing economics and cash runway,” she said.

Tyler Durden Tue, 09/15/2026 - 01:10

When War Comes Home: A Constitutional Warning

Authored by Andrew P. Napolitano via Ron Paul Institute,

A failed war does not end when the drones stop flying. It creates a new danger: A government that refuses to admit defeat and a president who, having failed abroad, seeks muscular victories elsewhere.

The war against Iran is a case study in the limits of military power, the dangers of presidential overreach and the enduring wisdom of the Constitution's separation of powers. It was unauthorized, unconstitutional, illegal, strategically incoherent and - by the standards by which wars must be judged - a geopolitical failure.

The American people were told that force would achieve clear objectives. Iran would be compelled to surrender. Somehow, American security would be enhanced. The region would become more stable.

Instead, the United States expended enormous resources, consumed scarce munitions, deepened regional instability and failed to produce the political outcome President Donald Trump promised. Senior military officials just last week warned him that extending large-scale operations risked exhausting critical military capabilities and weakening America's ability to respond elsewhere.

The United States can destroy buildings, eliminate targets, deploy aircraft, ships, missiles, drones and troops anywhere on the planet. But war is not a video game in which the destruction of enemy assets automatically produces political surrender. War is a contest of wills, societies, culture and endurance.

And here is the constitutional question that should have been asked before the first bomb was dropped: Who gave the president the authority to begin this war? The Constitution did not.

Article I, Section 8 gives Congress - not the president - the power to declare war. The framers deliberately rejected the British model in which kings could drag nations into conflicts based upon personal judgment, ambition or political convenience. James Madison warned that the executive branch was "the branch of power most interested in war," and therefore the Constitution placed the decision to enter war outside the president's constitutional reach.

The president is commander in chief. He commands forces after lawful congressional decisions have been made. He does not possess the power to transform his title into a personal authority to begin wars.

That principle has been repeatedly recognized by the Supreme Court. In cases such as Youngstown Sheet & Tube Co. v. Sawyer, the Court rejected the idea that President Harry Truman had unlimited power simply because he claimed national security. Justice Robert Jackson's famous concurrence warned that executive power is most dangerous when it operates in a "zone of twilight" where presidents attempt to expand authority beyond constitutional boundaries and without congressional concurrence.

The Iran war belongs precisely in that twilight - where executive ambition collides with constitutional restraint.

The administration may argue that modern threats require flexibility. That argument has been made by presidents of both parties for decades. But flexibility is not the same as unlimited authority. The Constitution was written for difficult moments, not easy ones. It was designed to restrain presidents even when they believe they have compelling reasons to act.

The military failure abroad has created a political dilemma at home. A president who promised victory must now confront the reality that victory was never achieved.

The danger is what happens next.

History teaches that political leaders who suffer public humiliation abroad often seek demonstrations of strength elsewhere. Foreign-policy failure can produce domestic overreach. Leaders who cannot achieve the desired result overseas may attempt to prove their power through actions at home.

That is where the war comes home.

The president, frustrated by military limitations, may turn toward radical immigration enforcement, Supreme Court-prohibited tariffs, statutorily prohibited domestic deployments of military forces, stealing foreign-owned oil, and assertions of executive authority that collide with free speech and free association.

But the Constitution does not permit a president to substitute disappointment for law.

The Fifth Amendment guarantees that no person - not just Americans - shall be deprived of life, liberty or property without due process of law. The Sixth Amendment guarantees all persons - not just Americans - from whom the government seeks life, liberty or property the right to a public trial before an impartial jury, and other constitutional protections. These protections apply not because accused persons are necessarily innocent but because government power is too dangerous to operate without restraints.

Evidence is not conviction. Accusation is not guilt. Presidential assertion is not judicial judgment.

The executive branch cannot simply identify alleged criminals in speedboats or elsewhere, declare them enemies and impose punishment without trial. That is a system the American Revolution rejected.

The same principle applies to the use of military force inside the United States. The founders were deeply suspicious of standing armies being used for law enforcement. That suspicion produced constitutional protections and later statutes prohibiting the military's role in civilian law enforcement.

The military exists to defend the nation from foreign threats. It is not a presidential police force.

Likewise, Congress - not the president - defines crimes and establishes punishments. A president cannot create new categories of enemies and decide their fate by executive command. The Constitution does not authorize a monarchy with aircraft carriers.

Every generation faces a temptation to exchange freedom for security. Every generation is told that normal rules cannot apply because a crisis is too serious, an enemy too dangerous and a moment too urgent.

The founders knew that argument well and they rejected it.

The Constitution was written precisely because government officials would sometimes believe that their objectives justified employing extraordinary power. The separation of powers, congressional war authority, judicial review and due process protections are not obstacles to effective government. They are safeguards against government becoming the threat it was created to prevent.

The ultimate question is not whether a president is strong enough to exercise power. The question is whether the president is restrained enough to obey the laws he has sworn to uphold.

That is the fear of a republic when the war comes home. To paraphrase the author Herman Melville, beware the president weeping when he bares an iron hand.

Tyler Durden Mon, 09/14/2026 - 23:25

The Deep State's Get-Out-Of-Jail-Free Card

Authored by Jay Rogers via American Greatness,

Last Wednesday, House Judiciary Chairman Jim Jordan sent FBI Director Kash Patel a letter demanding every document connected to an operation codenamed Round River.

If you haven't heard of it, that's understandable; it's the sequel nobody promoted, and I'll get to it. I've spent part of my career testifying as an expert witness on fiduciary duty, the branch of law that punishes people for betraying the trust placed in them.

Measured by that standard, Round River isn't merely disinformation; it's a breach of duty so complete that in my industry it would end a career and trigger a bar complaint.

In Washington, it's earned a strongly worded letter.

That's the whole scandal in one sentence: the deep state keeps getting caught, and nobody ever pays for it.

Start with what most people half remember. In October 2020, less than three weeks before the election, the New York Post published emails from a laptop Hunter Biden abandoned at a Delaware repair shop. Within 48 hours, 51 former intelligence officials, including two former CIA directors, signed an open letter declaring the story had "all the classic earmarks of a Russian information operation." Twitter locked the Post out of its own account. Facebook throttled the link. The letter did exactly what it was built to do. By 2022, the Washington Post's own hired cryptography experts had authenticated thousands of the laptop's emails using the same digital signatures banks use to verify a wire transfer. Real disinformation, corrected two years too late to matter.

Here's the detail that should bother you more than the letter itself: the man who organized it told Congress, under oath, exactly why he did it. Michael Morell, former acting CIA director, testified that a call from Antony Blinken, then a senior Biden campaign adviser, "triggered" his decision to draft the statement. Asked why he wanted to help the vice president win, Morell didn't dress it up: "Because I wanted him to win the election," he said. He had no evidence of Russian involvement, he testified. Four of the 51 signers, including Morell, were active CIA contractors at the time, with badges granting access most Americans never get. They used their old authority to help a friend's campaign and called it a national security judgment. My brother spent his career in Army Special Forces guarding secrets that get people killed and signed papers promising decades of silence. These 51 men signed a letter to swing a presidential election and called it patriotism.

The paper trail keeps growing. In February, former senior intelligence officer Thomas Kuhns, who spent his career on the intelligence community's analytic standards committee under Obama, filed a formal complaint with the intelligence community's inspector general. His conclusion, built on line-by-line tradecraft analysis rather than partisan grievance, was that the letter's "planning, drafting, and dissemination" showed characteristics consistent with coordinated intelligence deception operations. Kuhns noted that none of the 51 signers, despite decades of FBI contacts, ever asked whether the laptop was real before declaring it Russian bait. In May, the inspector general referred his complaint to the Justice Department, and nobody there has said a word about it publicly since. A career analyst accusing his own former colleagues of running a deception operation against the electorate should be front-page news. It barely registered.

The FBI, we now know, was running a parallel operation of its own. Documents declassified this August show analysts on the FBI's Foreign Influence Task Force launched it around December 2019, sorting more than 70 Americans and organizations by political utility. Democrats, including Joe and Hunter Biden, were filed as "targets" of Russian disinformation; Republicans, including Bill Barr and Mike Pompeo, were filed as "conduits" spreading it. Of 53 confidential sources touching the case, at least 14 fed the bureau derogatory information on the Bidens dating to 2015. The FBI never investigated a single tip; it labeled them as disinformation anyway, then warned Congress that asking about Burisma made members unwitting tools of Moscow. Patel says he's disbanded the unit and opened a review, and that the bureau has identified "tens of thousands of responsive pages" and is "preparing... for disclosure." Six years later, we're still waiting on someone to flip the switch.

None of this worked without help. Newsrooms that spent 2020 calling the laptop Russian disinformation spent the next three years waving off Joe Biden's visible decline the same way, right up until special counsel Robert Hur described the sitting president as a "sympathetic, well-meaning, elderly man with a poor memory," too frail to stand trial for mishandling documents. Then came the June 2024 debate, and the collective editorial memory of the press corps improved overnight. Convenient. The pattern repeats because it works: dismiss the inconvenient fact, discredit whoever raises it, and admit the truth once it's too late to change the outcome.

Defenders of the letter's signers claim these were private citizens exercising their First Amendment rights, not the CIA acting as an institution. But Morell asked the agency's own Publication Review Board to clear his draft the same week he recruited signatories, which means he leaned on his active clearance and his institutional relationship to lend the letter a credibility no private citizen carries on their own. You don't get to borrow the flag when it helps and hand it back once the subpoenas start.

None of this happens in a vacuum. The public reads Round River against a backdrop it already distrusts. A federal special counsel indicted Trump on 37 felony counts for retaining classified documents at Mar-a-Lago; a different special counsel investigated Biden's parallel documents problem and charged him with nothing because prosecutors doubted a jury would convict a man they called too forgetful to be culpable. Hunter Biden was convicted on gun and tax charges, then pardoned by his father before sentencing. The Durham report found the FBI opened a full investigation into the Trump campaign on raw, uncorroborated intelligence and never opened so much as an inquiry into similar intelligence about a Clinton campaign scheme to do the same in reverse. None of that proves coordination. It's enough to explain why voters call the asymmetry two-tiered before Round River even enters the conversation.

Here's the accountability scoreboard six years in: 51 security clearances revoked by executive order, a couple of internal reviews, one inspector general referral sitting at Justice since May, and not one indictment, deposition, or dollar of restitution from anyone who ran either operation. Compare that to a broker who mismarks risk tolerance: license gone, career over. The deep state gets a strongly worded congressional letter and a press release about an "ongoing review." Small wonder trust in the federal government sits near a five-decade low, with barely one in five Americans saying Washington does the right thing most of the time. That's not apathy. It's a verdict.

Congress can fix this without rewriting the Constitution: criminal exposure for clearance holders who abuse them and inspectors general free to act on their own timeline.

Until one of those 51 names sees the inside of a courtroom, the lesson every future intelligence officer will draw is the only one that matters: lie for the right team, and the worst that happens is you lose a parking pass at Langley.

Tyler Durden Mon, 09/14/2026 - 22:35

Teen Rescued From Frigid Alaskan Waters After Drifting For Days

A 15-year-old boy from St. Lawrence Island, Alaska, was rescued after spending two days on a capsized boat in the frigid Bering Sea.   The teen, identified by family as Derek Parker Aghnaanga, left Savoonga on Friday, September 4th, with his older brother and cousin in an 18-foot fishing skiff. They were expected back Sunday afternoon but the boat did not return.

Unfortunately, Derek's brother and his cousin died from drowning during the ordeal, leaving him to float alone on the vast Alaskan waters.  The U.S. Coast Guard began a search, though the chances of finding survivors was considered slim. On Monday morning, a Coast Guard aircrew spotted Derek sitting on top of the overturned boat 4 miles from St. Lawrence Island and 164 miles from the mainland coast.    

According to a relative, Darren Toolie-Noongwook, a fishing line got tangled in the motor. The crew tried to free it but failed, leaving the boat to drift. Later that night the weather worsened and the 18-foot skiff overturned.

Family members have say that Sidney Kulowiyi, the older brother and boat captain, was moving to get Derek a life jacket when he became tangled in the lines as the boat flipped. He was pulled under and did not make it out. Derek and their cousin, Barton Rookok, climbed onto the overturned hull. 

They spent the first night together on top of the skiff, but the next night Rookok panicked (possibly due to hypothermia), left the boat, and drowned.

A nearby fishing vessel pulled Derek to safety after he was located by the Coast Guard they later recovered the bodies of his two relatives. The rescuing captain said the boy had clung to the skiff through cold water of about 50°F (10°C) and mentioned that his brother was still under the boat and that his cousin had slipped away the night before.  

Surprisingly, there are only around 12 such incidents of boats capsizing per year in the Bearing Sea and larger ships have a high rate of crew survival.  However, the sinking of small skiffs like Derek's usually lead to death for those involved.   

Family members say Derek told them he believed he was going to make it - that he would be found and be safe.  He sat on his knees and prayed until the Coast Guard located him.  

Tyler Durden Mon, 09/14/2026 - 22:10

BRICS Urges 'Maximum Restraint' As US-Iran War Tests Unity At New Delhi Summit

Authored by News Desk via The Cradle,

The BRICS group of nations adopted a joint declaration on 12 September, expressing "deep concern" over the ongoing conflict between the US and Iran and urging "maximum restraint" as part of a "multilateral approach" that respects national viewpoints.

(Photo credit: BRICS)

The declaration was adopted on the first day of the BRICS leaders' annual summit in New Delhi.

"We express deep concern over the continued escalation of tensions in Middle East/West Asia and, recalling our respective national positions, call for exercising maximum restraint, as well as avoiding actions that could further aggravate the situation," the declaration said.

BRICS leaders gathered at the summit to develop the bloc's common positions on international conflicts, sanctions and trade, reform of global institutions, finance, energy, technology, health and development.

BRICS leaders failed to reach a consensus condemning the US aggression against Iran, as the bloc includes both Iran and the UAE, which are on opposing sides of the conflict.

The BRICS group of nations unanimously adopted a joint declaration expressing 'deep concern' over the war in the Middle East and urged maximum restraint. READ: https://t.co/nXJgNWjwVH pic.twitter.com/o40AozQil9

— Reuters (@Reuters) September 12, 2026

The UAE joined the war against the Islamic Republic on the side of its allies, the US and Israel.

Summit host India is also a close ally of Israel and one of its main weapons suppliers.

Other BRICS members include Brazil, Russia, China, South Africa, Egypt, Ethiopia, and Indonesia.

In response to the unprovoked US-Israeli attack in February, Iran effectively closed the Strait of Hormuz, through which Gulf energy exports to Asia flow.

The closure caused a surge in energy prices that has harmed the economies of BRICS nations, in particular in Asia.

The declaration affirmed the commitment of BRICS member states to a peaceful resolution of international disputes "through dialogue, consultation, and diplomacy."

It also expressed concern over "unilateral tariff and non-tariff measures" that distort trade, disrupt supply chains, and harm global economic development.

Since returning to office, US President Trump has used the threat of tariffs against China and India and imposed additional economic sanctions on Iran and Russia.

Trump has also issued secondary sanctions against nations and entities trading with Iran.

The joint statement expressed "serious concern" about deliberate attacks on civilian infrastructure and peaceful nuclear facilities under full International Atomic Energy Agency (IAEA) safeguards, saying such attacks violate international law and relevant IAEA resolutions.

Though the US and Israel have carried out attacks on Iran's nuclear facilities and civilian infrastructure, the statement did not name either country specifically regarding such attacks.

Regarding Israeli actions in Gaza, the statement calls for maintaining the ceasefire and facilitating unhindered humanitarian assistance; opposes the forced displacement of Palestinians and territorial/demographic changes to Gaza; and supports Palestinian self-determination and the creation of a Palestinian state on the 1967 borders with East Jerusalem as its capital.

Regarding Lebanon, the statement calls on Israel to withdraw its forces from Lebanese territory and adhere to the Lebanon ceasefire and UNSC Resolution 1701.

On Syria, it calls for respect for Syria's sovereignty and an inclusive Syrian-led political process, warns of the risk posed by "foreign terrorist fighters" to Syria's and regional stability and security,and calls for the withdrawal of foreign occupying forces, an apparent reference to Israel.

It also encourages continued work on interoperable cross-border payment systems and greater use of BRICS members' local currencies rather than US dollars for trade and investment settlements.

The BRICS statement also stresses the importance of reliable energy supplies and stable markets and explicitly says fossil fuels will continue to play an important role, especially for emerging and developing economies.

It simultaneously backs a "just, orderly, equitable and inclusive" transition to renewable energy and emissions reductions according to countries' different circumstances, as outlined in the UN's Sustainable Development Goal 7 (SDG 7) framework.

Tyler Durden Mon, 09/14/2026 - 21:45